TaxTMI 
TaxTMI 
2017 (5) TMI 426
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the appellant's case are different from the facts of the above case law. iii. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in not considering that the assessee in his statement on oath during the survey proceedings surrendered on additional income of Rs. 38,70,429/- for F.Y. 2006-07 and the assessee has not retracted from his statement during the assessment proceedings. iv. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in not appreciating the fact that alleged bills were not supported by supply of goods and some of the notices under 133(6) issued to parties from whom alleged bills were received were returned undelivered by the postal authorities and the assessee has also failed to produce the parties before the A.O. v. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made by the A.O. overlooking the explicit finding of the investigation carried out by the Sales Tax Department and corroborated by the enquiries of the A.O. vi. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... VAT registration No. was mentioned, however no confirmation of about transaction. The A.O. held of Rs. 23,49,748/- as bogus. In response to other parties, the notices were returned unserved. The 6th party, M/s. Suraj Enterprises replied that they had no transaction with M/s. Appolo Associates. The A.O., thereon has given the detailed modus operandi of business carried out by the assessee on pages 11, 12, 13, 14, 15, 16 & 17. The assessee has given written submission to the Asssessing Officer but Assessing Officer did not accept the same and held that i) It is settled law that onus lies on the assessee to prove the genuineness of any expenditure which is claimed as deduction in computing its taxable income. Therefore, the onus in the instant case, squarely lay on the assessee to prove that the suppliers were genuine suppliers. Such a burden had to be discharged by the assessee with very strong and clinching evidence in view of denial by these parties and non existence of parties as notices u/s. 133(6) have returned unserved. The Income-tax Inspector's report also corroborates this fact. ii) The assessee was well aware that he was entering into colorable transactions with the alle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s purpose". c. Ramanand Sagar vs. Deputy Commissioner of Income-tax 25G ITR 134: "The expenditure must be laid out wholly and exclusively for the purpose of business or profession. If the assessee fails to satisfy any of these tests, the expenditure claimed is not allowable. d. Commissioner of Income-tax Transport Corporation of India Ltd. "Mere payment by itself would not entitle the assessee to deduction of expenditure unless the same was proved to be paid for commercial considerations. The burden of proof is always upon the assessee. It is for the tax payer to establish by evidence that a particular allowance is justified. It is not for the tax payer to establish by evidence that a particular allowance is justified. It is not for the Income-tax Officer to independently collect evidence and prove that the deduction claimed by the assessee is baseless". 4. The assessee has given the details of work carried out by him and the assessee claimed that he has purchased the material which is utilized in the work. Therefore, the same material is purchases from Hawala parties. The Hawala parties have confirmed in Sworn statement recorded by the Sales Tax Authorities that they have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and prepared by them which are then floated in the newspaper and the procedure followed for the selection of the tender is followed as per norms of MCGM. In each of these tenders, the book of quantities (BOQ) is also submitted as a part of the tender documents, MCGM predefines the minimum technical and non technical requirements. All the required machineries for the execution of the work is planned and ordered by the project manager of the appellant directly with the suppliers as and when required. In addition to the work done recorded in the measurement book and payment certificate, there are many items which are included in the tender for which no payments are made to the contractor. The MCGM also appoints third quality auditors who also checks routinely the quality and quantity of works carried out and submit their specific observations before the bills of the appellant are cleared. Therefore, the 8appellant has a system of maintaining site data of materials, labour and other inputs and outputs as per the norms prescribed by the MCGM. It is important to note that the A.O. had access to the list uploaded by the sales tax department of Maharashtra giving the names of supposedly ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial authorities that merely a statement recorded during the course of survey is not enough evidence to suspect the statement of income especially when no other credible evidences have been found during the course of assessment or during subsequent assessment proceedings to substantiate the statement. Also reference is made to submission of the appellant wherein it may be noted that the appellant while making offer of "surrender of additional income" has categorically stated that "as per my knowledge there is no purchase without delivery of goods". I am in agreement with the submissions made by the appellant in light of the various judicial pronouncements referred to in the submission of the appellant that the A.O. was free to verify the submissions of the said additional income vis-à-vis the various documents and the modus operandi of the appellant and since no infirmity has been found, merely the fact of admitting the income during the course of survey cannot be held against the appellant. In light of the facts brought out above and the facts of the case specifically with respect to the modus operandi as Government Contractor and the fact that even survey conducted at the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lization thereof for proper work are maintained in the office of the purchases are duly recorded. Moreover, there is no evidence to show that the assessee has received cash back against the payment which has been made during the course of survey proceedings. Moreover, the assessee carried out the work and payment has been made by account payee cheque. Therefore, the assessee has all the right to claim as deduction. Moreover, all the goods purchased from the parties have been recorded in books of the accounts has purchased against which the payment have been made by account payee cheques to the parties from whom the goods were purchased from cash or credit. 9. The learned AR submitted that the supplier / broker has given the bills and the list of parties whom the A.O. has issued or notices but the assessee has no control on the same parties. The learned AR submitted that all the purchases are supported by respective bills and have been paid by account payee cheques. All purchase have been entire used for execution of the project as per survey the certification done by site engineer and for which the payment have been received by assessee from MCGM. Before clarification by MCGM depu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of Maharashtra giving the names of supposedly suspected suppliers. The A.O. did not give any conclusive finding that the quantitative details maintained by the assessee are dubious. All the registers and books were examined by the A.O. and all the books were found to be matching with the project completed by the assessee. The assessee has made all the payments by account payee cheques. Even physical survey conducted at the premises of the assessee and there is no evidence to show that cheques and other documents have been found to doubtful. We find that in the case of ITA No. 5194/Mum/2014, wherein the similar facts in the case of ITA No. 5194/Mum/2014 in the case of Mahesh K. Shah, the Tribunal has held as under: In the factual matrix of the case of hand, where the A.O. failed to cause any enquiry to be made to establish his suspicions that the said purchases are bogus, the assessee has brought on record documentary evidences to establish the genuineness of the said purchase transactions, transactions, the "In our considered view, the A.O. has not brought on record any material evidence to conclusively prove that the said purchases are bogus. Mere reliance by the A.O. on infor....