TaxTMI 
TaxTMI 
2016 (6) TMI 1277
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....nt of share capital Rs. 4,43,30,000/- for A.Y. 2010-2011 and Rs. 1,31,28,500/- for A.Y.2011-2012 and on account of discrepancy in purchases in the assessment year 2013-2014 amounting to Rs. 75,41,500/-. The assessee retracted on 27-12-2012. However, the AO did not agree with the retraction and made addition on account of discrepancy in purchases and share capital. By the impugned order CIT(A) confirmed the action of AO, against which assessee is in further appeal before us. 3. It was contended by ld. AR that merely on the basis of statement recorded u/s.133A(6), addition cannot be made insofar as other than confession there is no independent or corroborate evidence to support the declaration. Nothing was seized or found during the course of survey, except some purchase bills. Reliance was placed on the decision of Hon'ble Bombay High Court in the case of Uttamchand Jain 320 ITR 554, Mumbai Bench of the Tribunal in the case of Premsons, 130 TTJ 159, ITAT Delhi Bench of the Tribunal in the case of Satish Builders, 23 DTR 171, in support of the proposition that merely on the basis of declaration addition cannot be made. Reliance was also placed on CBDT Instruction for not to force ....
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....es for 12 months as placed at pages 40 to 68 of the paper book. Quantitative details of closing WIP is placed at pages 69 to 70 of the paper book. Further he drew our attention to the details filed before the AO with regard to quantitative details of opening & closing stock, which is placed at pages 71 to 72 of the paper book. He also drew our attention to the Thane District Schedule of Rates for material required as per formula given by it. Our attention was also invited to the details placed at page 94 to 126 with regard to Thane District Schedules of Rates. Details of purchases party-wise was also filed before the AO, which is placed at pages 127 to 137 of the paper book. As per the ld. AR in view of these details the CIT(A) asked the remand report from the AO and the AO has also raised query during remand proceedings, which was replied by the assessee vide letter dated 23-3-2015, 27-2-2015 and 19-2-2015. As per ld. AR before the AO could furnish the remand report, the CIT(A) has passed the order. Our attention was also invited to the certificate dated 25-5-2008 from the consultant appointed by MMRDA for using DSR formula for quality & consumption of materials were also filed be....
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....No. 232 to 241. All share holders replied to A.O. in response to summons u/s 131, confirming the transaction with supporting papers such as bank statements, Audited accounts, Acknowledgements for filling returns etc. 9. As per ld. AR in the case of the share application money assessee's onus is just to prove the identity of the share applicants or share holders & nothing further as per the following Supreme Court and High Court judgements which are binding in nature. a) CIT v/s Stallar Investment Ltd. 164 CTR 287( SC) b) CIT v/s Lovely Exports (P) Ltd. 216 CTR 195 (SC), 6 DTR 308 SLP dismissed 319 ITR (St 5) c) CIT v/s Gujrat Heavy Chemicals Ltd. 256 ITR 795 (SC) d) CIT v/s Dwarikadish Investment Ltd. 167 Taxman 321 (Del) S.C dismissed SLP 314 ITR 3 e) CIT v/s Creative World Telefilms Ltd 333 ITR 100 (Bombay.) Page No. 242 to 243 f) CIT v/s Tania Investment 322 ITR 394 (Born) Page No. 244 to 245 g) Recent judgement of Hon'ble Gujrat High Court in CIT v/s Ujala Dying & Printing Mills Pvt. Ltd. Reported in 328 ITR 437 which are on similar facts. Hon'ble Gujrat High Court has dismissed department's ap....
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....ditworthiness Bank statement to prove the money came from applicants coffers. As per ld. AR if returns are filed by creditor are not rejected by that assessing officer, AO has no power to question return of creditor. For this purpose reliance was placed on CIT Kolkata III v/s Dataware Private ltd. Dated 21/912011 Reported in C.A. Journa April 2012 page III CIT v/s Dwarikadhish Investment LTD. 167 Taxman 321 (Del) S.c. dismissed SLP 314 ITR 3 CIT v/s Ujala Dying & Printing Mill Ltd. 328 ITR 437 (Guj) S.C. dismissed SLP 317 ITR (Sta) 1] 11. As per ld. AR though assessee has confessed in statement recorded u/s 131 in the proceeding u/s 133A, The same has been retracted by assessee as the assessee was forced to sign the same due to threat from officers about CBI action, Converting survey in to Search, C.A. was not allowed to remain present in Survey, Directors being technical persons not knowing consequences, Copy of statement not given to assessee in spite of visiting DDIT's office several times etc. It was further contended by ld. AR that statement made by assessee during survey operations has no evidentiary value. For this reliance was placed in ....
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....ssee retracted from the statement by filing affidavit. It was the contention of ld. AR that assessee has filed all the details of shareholders like confirmation, board resolution, audited accounts, bank statement, share certificate etc. However, the AO made addition simply on the plea that these shareholders did not appear in person before the AO. Reliance was placed on the decision of Hon'ble Supreme Court in the case of S. Kadar Khan & Sons, 210 taxmann 248 in support of the proposition that Section 133A does not empower any ITO to examine to any person on oath, thus, the statement recorded u/s.133A has no evidentiary value and any admission made during such statement cannot be made the basis of the addition. Reliance was also placed on the decision of Hon'ble Delhi High Court in the case of S. Arjan Singh 175 ITR 91, Dingra Metal Works 328 ITR 384 and Kerala High Court in the case of Paul Mathews & Sons. With respect to addition on account of purchases on the plea that there was information with the sales tax authority regarding supplier being non-genuine. Reliance was placed by ld. AR on the decision of Hon'ble Delhi High Court in the case of Sunrise Tolling Pvt. Ltd., 361 ITR ....
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.... the enquiry made by the AO these suppliers were not found at the given address. However, at the very same time, we cannot ignore the actual purchases made by the assessee, which was utilised for its construction purpose and sales. Before the AO the assessee has filed detailed statement of consumption of quantity of material so purchased vis-a-vis requirement as per Government formula as per the Thane District Schedule and rates. The assessee had also filed materials, details giving quantities of purchase and sales, summary of monthly purchases, quantitative details of daily purchases for 12 months. The assessee has filed corresponding monthly consumption and sales and quantitative details of sales for 12 months, details of work-in-progress as at the end of the year and also quantitative details of opening and closing stock. The assessee has also submitted before the AO the detailed statement of material required as per formula laid down by the State Government. We had carefully gone through all these statement placed on record and found that during the year assessee had shown total purchases of Rs. 50,95,77,140/-, which was converted into sales amounting to Rs. 57,77,31,972/-. Thu....
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....consumption are placed at page 69 of the paper book. Details of closing working in progress as on 31-3-2009 and 31-3-2010 are placed at page 69 and 70 of the paper book. Item-wise purchase and statement from suppliers are placed at page 134 and 135 of the paper book. From the record we also found that Engineers from Government and MMRDA are checking the road construction at regular intervals while constructions is in progress & samples are sent to laboratories to verify consumption, strength & quality of materials used. The agencies collect samples at random and send it to approved laboratories for checking strength, consumption & quality of materials used & the only realizes payment to the assessee against the sales bill. We also found that purchase and consumption of the material is as per prescribed formula. 15. In view of the above discussion and applying the proposition of law laid down by the coordinate bench of the Tribunal as well as High Courts referred above, we do not find any merit for disallowance of entire amount of purchases. Keeping in view the totality of facts and circumstances of the case vis-a-vis rate of net profit shown by the assessee, to cover up leakage ....