TaxTMI 
TaxTMI 
2023 (6) TMI 867
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....sed legal issue and submits that in case if the Ld. CIT(A) order is upheld, the assessee does not press the grounds raised in the cross objection preferred by it. 3. First of all, we will deal with the appeal preferred by the revenue for AY. 2019-20. Ground no. 1 is against the action of the Ld. CIT(A) deleting the addition of Rs. 68,94,145/- on account of bogus purchase expenses. 4. Brief facts are that the assessee had filed the original return of income on 19.11.2018 u/s 139(1) of the Income Tax Act, 1961 (hereinafter "the Act") declaring total income of Rs. 4,36,19,460/-. And the AO noticed that search and seizure operation u/s 132 of the Act was carried out in the Group case of M/s. Skyway Infra projects Pvt. Ltd. (hereinafter "M/s. Skyway") on 06.11.2019 (AY. 2020-21). The AO notes that the M/s Skyway Group is a civil contractor which undertakes contracts from Government authorities like BMC, MMRDA etc. And the key persons of Skyway group are Shri Ramesh Kumar L. Madhani, Shri Khelan R. Madhani, Shri Mohan Singh B. Deora & Shri Tamar Singh Deora. According to the AO, investigation revealed that the assesse and the group companies have been involved in bogus billing and bene....
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....has followed his own reason given while dealing with the assessee's appeal for AY. 2014-15. The Ld. CIT(A) for AY. 2019-20, held as under: - 54. Ground No. 3 is regarding disallowance of Rs. 70,93,473/- made by the AO on account of bogus purchase expenses. 54.1 For the AY. 2019-20, the appellant has made purchases of Rs. 9,11,140/- from Hitesh kantilal Shah HUF, Rs. 10,82,928/- from Rushabh Corporation, Rs. 11,12,818/- from Rushabh Trading Co. Rs. 12,45,495/- from V. H. Enterprises, Rs. 12,34,457/- from Vimalnath Associates, Rs. 12,20,035/- from Vimalnath Corporation totalling to Rs. 70,93,473/-. The issue regarding disallowance of purchases from the said 07 parties have been discussed in para 7 of this appellate order for AY. 2014-15. With respect to these parties, the facts of the case, findings of the AO in the assessment order and the submission made by the appellant are similar to that for AY. 2014-15. As discussed in para 7.3.4. of this appellate order for A.Y. 2014-15, purchases made from Rushabh Trading, Rushabh Corporation and Hitesh Kantilal Shah HUF have been justified by the appellant during the assessment as well as remand proceedings. Therefore, purchases of Rs.....
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....ssary records regarding purchases were maintained and the purchases were duly recorded in the books of account. The payment for purchase of material was made by account payee cheque. Further, there is no evidence regarding receiving back the cash against the payment made to the purchase parties. For execution of project work, the appellant has to purchase the material from the parties and without purchase of material and payment to labour contractor, the project could not have been completed. Further, the project work was monitored and checked by MCGM and only after being satisfied, MCGM has made payment to the appellant. The disallowance of purchases has been made by the AO on the basis of information received from DGIT(Inv.). It was further submitted by the appellant that the disallowance/addition cannot be made on third party information without further scrutiny made by the AO. For this proposition, the appellant as relied upon the decisions in the case of (i) CIT vs. Odeon Builders Pvt. Ltd. (ii)PCIT vs. Pnaki J. Panani Mumbai High Court 18/1/2020 (iii) Pcit-15, Mumbai vs. Jnakaria Fabric Pvt. Ltd.2020(3) Tmi 474-Bombay High Court (iv) Pcit-13, Mumbai Vs. Rishabhdev Tachnocable....
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....R.K.Madhani & Co., Vimalnath Associates, Vimalnath Enterprises, Vimalnath Corporation, Mahavir Enterprises and Bhavya Enterprises, the Inspector deputed by the AO had visited the premises and the parties were found existing at the given addresses. Therefore, the identity of the parties was established by the appellant in the case of V.H. Enterprises Ltd., the party did not attend before the AO or submitted the necessary evidence -r present address as a result, the AO could not verify the identity and genuineness of purchase from this party. The statements of Vinod Shah (Proprietor of Vimalnath Corporation), Smt. Khushboo V.Shah (Proprietor of V.H.Enterprises), Kantilal D. Jain (Proprietor of M/s. Navkar Corporation and Bhavya Enterprises) and Shri Nishil M. Madhani (key person of Vimalnath Associates & Divya Corporation) were recorded. in their statements, they had admitted that they had provided accommodation entries of purchases to the appellant firm. These persons have not retracted from their statements. Therefore, the averment made by them in their statements cannot simply be brushed aside. However, it is a fact that the appellant firm was engaged in the business of execut....
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....g both the parties, we note that out of eleven (11) parties out of whom assessee had made purchases, four (4) parties namely i.e. M/s. Rushabh Corporation, M/s. Rushabh Trading Co., Hitesh Kantilal Shah HUF and M/s. Vimalnath Traders appeared before the AO during the remand report proceedings and their statements were recorded and the AO in the remand report did not point out any adverse observation against those by parties; and coming to other six (6) parties namely M/s. R. K. Madhani & Co., M/s. Vimalnath Associates, M/s. Vimalnath Enterprises, M/s. Vimalnath Corporation, M/s. Mahavir Enterprises and M/s. Bhavya Enterprises, undisputedly they did not appear before the AO, but the inspector of the department visited the premises of the six parties and found all of them existing at addresses except the party M/s. V. H. Enterprises Ltd. which neither attended nor submitted any details or correct address. Therefore, the AO could not further verify with respect to M/s. V.H. Enterprises. Thus, it is noted that out of eleven (11) parties, ten (10) parties identity/address were correct and transaction with them had been through banking channel. The Ld. CIT(A), in the light of the stateme....
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....he Ld. CIT(A) deleting the addition of Rs. 2,21,04,615/- which was added by the AO u/s 68 of the Act on account of bogus unsecured loans. 9. Brief facts as noted by the AO is that the assessee from FY. 2012-13 to FY. 2018-19 has shown outstanding unsecured loan to the tune of Rs. 90,49,18,677/- in various years. During the search/survey proceedings, the key persons of the company was asked to furnish details of said loans with complete address and PAN of parties, bank statements and documentary evidences of the loan transactions viz confirmation letter, ledger, details of re-payment of principal/interest proofs and details of TDS etc. Pursuant thereto, assessee submitted documents called for by AO, but on scrutiny of the same, AO identified certain lapses. According to AO, the assessee did not have all the documents in order. According to him, the assessee produced only ledger copies and payment proofs from said parties. Evidences like confirmation letter, proof of documents for credit worthiness, Bank statement and TDS statement were not produced. The name of those creditors/parties in chart form is reproduced at page no. 16 to 19 of assessment order; and thereafter AO issued sho....
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....ue in A.Y. 2014-15, the addition made by the AO in respect of unsecured loan received from the said 04 parties in A.Y. 2019-20 is also deleted. As discussed in para 8.3.7 of this appellate order, the unsecured loans taken from these parties have been considered as genuine and addition u/s 68 made by AO has been deleted. Therefore, the addition of interest paid of Rs. 38,70,419/on loans taken prior to A.Y. 2014-15 and that taken during A.Y. 2017-18, 2018-19 and during 2019-20 is deleted. Accordingly ground of appeal No.4 is Allowed." 10. Since the Ld. CIT(A) have followed the ratio of his decision for AY. 2014-15, we have gone through the decision of the Ld. CIT(A) for AY 2014-15 on this issue. His discussion on this issue starts from page no. 24 of his order; and the Ld. CIT(A) notes that the assessee has maintained the details of unsecured loans during last six assessment years and filed documentary evidences like ledger copies and payment proof. The Ld. CIT(A) noted that from FY. 2012-13 to FY. 2018-19, the assessee company had received loan from seven (7) parties namely, Rajendra L. Mahani HUF, Khelan Madhani, Neelima Madhani, Shah Lavji, Hitesh Kantilal Shah HUF, Rushabh Cor....