TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 372
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....ed in these appeals, we shall take up I.T.A. No. 1308/Mds/2012 for the 2 I.T.A. Nos Nos.1308 to 1311/M/ 1311/M/1 /M/12 assessment year 2005-06 as lead case. 2. Brief facts of the case are that the assessee company is carrying on business as developers and builders of residential units. There was a search and seizure action under section 132 of the Income Tax Act in the case of Shri P.K. Duraisamy, Managing Director of M/s. Kalai Constructions P. Limited on 13.03.2008. In the course of search proceedings in the residence of Shri P.K. Duraisamy, MD of the company, the materials inventorised as SN/B&D/S-1, S-2, S-3, S-5, S- 8, S-9, S-10, S-11, S-12 dated 06.05.2008 were seized. Since these bundles contained cash receipts/vouchers for expendit....
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....assessee carried the matter in appeal before the ld. CIT(Appeals). 4. It was submitted before the ld. CIT(Appeals) that regular books of accounts were available for verification, which have been properly audited and corresponding audit report under section 44AB of the Income Tax Act was also filed. He further submitted that during the course of assessment proceedings, the Assessing Officer has 4 I.T.A. Nos Nos.1308 to 1311/M/ 1311/M/1 /M/12 accepted the books of accounts and bills and vouchers. Simply because the assessee has not been able to produce some of the parties, it cannot be said that the purchases are bogus. The ld. CIT(Appeals), after considering the submissions of the assessee has passed the elaborate order, which is reproduced....
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....tate of mind is not correct. The assessee was confronted with the fact of these purchases during the course of search. The assessee had purchased materials from these parties till financial year 2007-08 relevant to the assessment year 2008-09. So the assessee's 5 I.T.A. Nos.1308 to 1311/M/ 1311/M/1 /M/12 story of not knowing the whereabouts of the parties is not acceptable. During the course of search proceedings in the sworn statement recorded on 06.05.2008 of Shri. P.K. Duraisamy Managing Director of M/s.Kalai Constructions P Limited, Shri P.K. Duraisamy in answer to Q.No.1 and Q.No.2 admitted that the purchases pertaining to M/s.Sivaparvathi &, Company, Coimbatore, Shri Shanmuga Traders, Coimbatore, Sri Ram Agency Erode are not tru....
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....e parties. 4.3. The stand taken by the assessee that the Managing Director was in a confused state of mind during the search on 13.03.2008 and therefore admitted inflation in expenditure cannot be accepted because its only while recording statement on 06.05.2008, the Managing Director had made the admission of inflation of expenditure. There is a sufficient time gap between the date of search and the date on which sworn statement was taken from the Managing Director. 4.4. A perusal of the statement of accounts submitted by the assessee with each of the Concerns viz. M/s.Sivaparvathi and Company, Coimbatore, Sri Saravana Hollow Blcok, R. Thirumurgan & Co., Erode, Pongaliamman Chambers, Thirumurugan Lorry Service and Sri Ram Agency Erode sh....
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....s issued in the name of such bogus Concerns. 4.7. When the assessee claims any creditor for any loan or purchase of goods, the onus is on the assessee to prove that there really existed such creditors or parties by way of producing confirmation of such transactions. It is noticed that the assessee has failed in its duty to establish the same with any piece of evidence like PAN, IT return particulars etc., sales tax registration no. etc. as mentioned above. None of .the parties had" appeared before the assessing officer nor produced any confirmation letter. It is noticed that the assessee has failed to produce the required confirmation during the post search investigation, the assessment stage or at the appellate stage. Therefore it is evid....
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....ned by the Assessing Officer and fairly accepted that the matter may be remitted back to the Assessing Officer. 8. We have heard both sides, perused the materials on record and also orders of authorities below. The issue involved in the appeal with regard to non-availability of some companies from whom the assessee had made purchases. However, the Assessing Officer has not doubted the construction made by the assessee. He only doubted the genuineness of the purchases. So, any company which is carrying the construction, it is necessary to buy/ use necessary materials like iron, cement, sand, wood, etc. Without there being any material, the assessee cannot complete the construction work. We find that there is sound reasoning in the submissio....