SUNTECK REALTY LTD, MUMBAI V. ASST CIT CEN CIR 21, MUMBAI

ITA 1264/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0592 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2017
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI , JM ITA NO. 1264 / MUM/20 1 7 ( ASSESSMENT YEAR : 2008 - 09 ) ITA NO. 1265 /MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO. 1266 /MUM/20 17 ( ASSESSMENT YEAR : 20 07 - 08 ) ITA NO. 1267 /MUM/20 17 ( ASSESSMENT YEAR : 2011 - 12 ) ITA NO. 1812 /MUM/20 17 ( ASSESSMENT YEAR : 2012 - 13 ) M/S. SUNTECK REALTY LTD., 5 TH FLOOR, SUNTECK CENTRE 37 - 40 SUBHASH ROAD VILE PARLE (E) MUMBAI 400 057 VS. ASST. COMMISSIONER OF INCOME TAX - CENTRAL CIRC LE - 21, MUMBAI PAN/GIR NO. AAACI0336E ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI RAKESH JOSHI REVENUE BY SHRI K. MADHUSUDAN DATE OF HEARING 24 / 10 /201 8 DATE OF PRONOUNCEMENT 30 / 11 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 51, MUMBAI DATED 08/12/2016 FOR A.Y.2007 - 08,2008 - 09,2009 - 10,2011 - 12 & 2012 - 13 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 153A OF THE IT ACT. ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 2 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY AS SESSEE: - A.Y. 2008 - 09 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING THE GROUND RAISED BY THE APPELLANT FOR CONSIDERING THE TOTAL INCOME OF THE APPELLANT OF THE RETURN OF THE INCOME FILED U/S. 139(1) INSTEAD OF RETURN OF INCOME FILED U/S. 153A BY THE LEARNED ASSESSING OFFICER, ON THE ALLEGED PLEA THAT THE ASSESSEE HAS NOT PROVIDED THE REASON FOR DIFFERENCE OF INCOME BETWEEN BOTH THE RETURNS, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN DISALLOWING THE EXPENSES OF RS. 73, 64,365 / - U/S.14A OF THE INCOME TAX ACT, 1961 BY INVOKING THE RULE 8D, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION ON ACCOUNT OF DISALLOWANCES MADE U/S.14A OF RS.73,64,365/ - DETERMINED AS PER RULE 8D, WHILE COMPUTING THE BOOK PROFIT U/S.115JB OF THE I.T. ACT, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN L AW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN GIVING DIRECTION TO REDUCE THE AMOUNT OF RS. 25,92,296 / - FROM THE WIP ACCOUNT OF SUNTECK CENTRE PROJECT BY TREATING THE GENUINE PURCHASES AS ALLEGED UNEXPLAINED EXPEN DITURE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 5) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUND OF APPEAL. 2009 - 10 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS E RRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN ENHANCING THE DISALLOWANCE OF EXPENSES BY RS.24,98,497/ - U/S.14A OF THE I.T. ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION ON ACCOUNT OF DISALLOWANCES MADE U/S. 14A OF THE RS.60,62,479 / - DETERMINED AS PER RULE 8D, WHILE COMPUTING THE BOOK PROFIT U/S.115J B OF THE INCOME TAX ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 3 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN GIVING DIREC TION TO REDUCE THE WIP ACCOUNT OF SUNTECK CENTRE PROJECT BY TREATING THE GENUINE PURCHASES MADE FROM M/S. ROYAL ENTERPRISES AS ALLEGED UNEXPLAINED EXPENDITURE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4) THE APPELLANT CRAVES LEAVE TO A DD, AMEND, ALTER OR DELETE THE SAID GROUND OF APPEAL. 2007 - 08 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN DISALLOWING THE EXPENSES OF RS.2,46,972 / - U/S.14A OF THE INCOME TAX ACT, 1961 BY INVOKING THE RULE 8D ON THE ALLEGED PLEA THAT IN THE ORIGINAL ASSESSMENT ORDER U/S 143(3) OF THE I.T. ACT, 1961 THE SAID DISALLOWANCE WAS MADE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) ON THE F ACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN GIVING DIRECTION TO RE DUCE THE AMOUNT OF RS. 9,60,900/ - FROM THE WIP ACCOUNT OF SUNTECK CENTRE PROJECT BY TREATING THE GENUINE PURCHASES MADE FROM M/S. SOHAM MERCANTILE PVT. LTD. AS ALLEGED UNEXPLAINED EXPENDITURE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUND OF APPEAL. 2011 - 12 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN ENHANCING THE DISALLOWANCE OF EXPENSES BY RS.15,689 / - U/S. 14A OF THE I.T. ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION ON ACCOUNT OF DISALLOWANCES MADE U/S.14A OF TH E RS.33,37,054 / - DETERMINED AS PER ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 4 RULE 8D, WHILE COMPUTING THE BOOK PROFIT U/S. 115JB OF THE I.T. ACT, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT (A) HAS ERRE D IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN GIVING DIRECTION TO REDUCE THE AMOUNT OF RS.1,25,370/ - FROM THE WIP ACCOUNT OF SUNTECK CENTRE PROJECT BY TREATING THE GENUINE PURCHASES MADE FROM M/S. CHAMUNDA ENTERPRISES AS ALLEGED UNEXPLAINED EXP ENDITURE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOWING THE CLAIM OF PROVIDENT FUND OF RS.35,541/ - U/S.43B OF THE INCOME TA X ACT, 1961 ON THE ALLEGED PLEA THAT THE SAME WAS PAID LATE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 5} THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUND OF APPEAL. 2012 - 13 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN GIVING DIRECTION TO REDUCE THE AMOUNT OF RS.1,26,000/ - FROM THE WIP ACCOUNT OF SUNTECK CENTRE PROJECT BY TREATING THE GENUINE PURCHASES MADE FROM M/S. BLU RAY TRADE LINK AS ALLEGED UNEXPLAINED EXPENDITURE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOWING THE CLAIM OF PROVIDENT FUND OF RS.96,906/ - U/S.436 OF THE INCOME TAX ACT, 1961 ON THE ALLEGED PLEA THAT THE SAME WAS PAID LATE, WITHOUT CONSIDERING THE FACTS AND CIRCUMS TAN CES OF THE CASE. 3) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUN D OF APPEAL. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. COMMON GROUNDS HAVE BEEN TAKEN BY ASSESSING IN ALL THE YEARS UNDER CONSIDERATION. ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 5 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSES IS A DOMESTIC PUBLIC LIMITED CO., ENGAGED IN T HE BUSINESS OF BUILDERS, DEVELOPERS AND CONTRACTORS. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR THE A.Y.2007 - 08 ON 36/10/2007 DECLARING THE TOTAL INCOME AT RS. 39/27.705/ - . FURTHER, THE ASSESSEE FILED A REVISED RETURN ON 31.03.2009 DECLARING THE TOTAL INCOME AT RS. 76,49,199/ - . THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND AN ASSESSMENT ORDER U/S. 143(3) WAS PASSED BY THE AO. ASSESSING THE TOTAL INCOME AT RS. 78,95,870/ - LATER ON, A SEARCH AND SEIZURE ACTION U/S. 132(1) WAS CONDUCTED ON 11/01/ 2012 IN THE CASE OF THE ASSESSEE AND ITS GROUP CASES. THEREAFTER, A NOTICE U/S. 153A OF THE I.T. ACT WAS ISSUED, IN RESPONSE TO WHICH, THE ASSESSEE FILED THE RETURN OF INCOME ON 20.08.2013 DECLARING THE TOTAL INCOME ; AT RS. 76,49,199/ - . THEREAFTER, THE LD .AO PASSED AN ASSESSMENT ORDER U/S. 143(3) RWS 153A OF THE I.T. ACT, 1961 ON 28.03.2014 BY ASSESSING THE TOTAL INCOME AT RS. 78,95,870/ - . IN THE SAID ORDER THE AO MADE A DISALLOWANCE OF RS. 2,46,672/ - U/S. 14A OF THE ACT. BESIDES PURCHASES OF RS. 9.60.900/ - FROM M/S. SOHAM MERCANTILE P. LTD. WAS TREATED AS BOGUS AND THE SAME WERE REDUCED OUT OF CLOSING WIP (WORK - IN - PROGRESS) OF THE PROJECT. 6. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE DISALLOWANCE MADE U/S.14A AFTER OBSERVING AS UNDER: - I HAVE CAREFULLY C ONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE AS ALSO THE ORDER OF THE AO. IT IS RELEVANT TO MENTION OVER HERE THAT DISALLOWANCE U/S. 14A OF THE ACT WAS INITIALLY MADE BY THE AO WHILE COMPLETING THE ORIGINAL ASSESSMENT U/S. 143(3) OF THE ACT DATED 14/12/2009. THE SAME WAS APPARENTLY NOT ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 6 CHALLENGED BY THE ASSESSEE IN APPEAL. THEREFORE, THE ADDITION/DISALLOWANCE MADE U/S. 14A HAD IN A WAY REACHED FINALITY BEFORE THE DATE OF SEARCH ITSELF. THEREFORE, IT IS NOT A CASE WHERE THE AO MADE THIS ADDITION FOR THE FIRST TIME IN THE ASSESSMENT MADE U/S. 153A, SUBSEQUENT TO THE SEARCH, WHICH IS THE SUBJECT MATTER OF THE PRESENT APPEAL. THEREFORE, WHAT THE AO HAS DONE IS THAT HE HAS SIMPLY REPEATED THE ADDITION WHICH HAD AL READY REACHED FINALITY. IN FACT, THE AO HAD TO MAKE THIS ADDITION BECAUSE THE ASSESSEE FAILED TO OFFER THIS AMOUNT WHILE FILING THE RETURN U/S. 153A, SUBSEQUENT TO SEARCH, WHICH CANNOT BE TREATED AS FAIR OR REASONABLE. 7. WE HAVE CONSIDERED RIVAL CONTENT IONS AND CAREFULLY GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW. IN SO FAR AS DISALLOWANCE U/S.14A HAS BEEN MADE THE CONTENTION OF LEARNED AR WAS THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, THEREFORE, DISALLOWANCE U/S.14A WAS N OT WARRANTED. FROM THE RECORD, WE FOUND THAT THIS DISALLOWANCE U/S.14A WAS MADE BY AO IN ORIGINAL ASSESSMENT AGAINST WHICH ASSESSEE FILED AN APPEAL WHEREIN SAME WAS CONFIRMED. HOWEVER, ASSESSEE DID NOT PREFER ANY FURTHER APPEAL, MEANING THEREBY ASSESSEE HA S ACCEPTED DISALLOWANCE SO MADE. MERELY BECAUSE, ASSESSEE HAS NOT OFFERED SUCH DISALLOWANCE IN THE RETURN FILED U/S.153A, THE AO HAS MADE ADDITION. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITIES FOR THE ADDITION SO MADE, SUBJECT TO OUR FOLL OWING OBSERVATIONS. 8. HOWEVER, WITH REGARD TO ASSESSEES CONTENTION THAT WHILE MAKING DISALLOWANCE MADE U/S.14A, ONLY INVESTMENT WHICH HAVE EARNED EXEMPT INCOME SHOULD BE CONSIDERED. WE ARE IN AGREEMENT WITH THE LEARNED AR, ACCORDINGLY, WE DIRECT THE AO T O VERIFY AND EXCLUDE THE INVESTMENT ON WHICH ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR UNDER ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 7 CONSIDERATION. WE DIRECT ACCORDINGLY. MOREOVER, THE CONTENTION OF LEARNED AR THAT DISALLOWANCE OF INTEREST SHOULD BE DELETED IN VIEW OF THE FACT TH AT ASSESSEE WAS HAVING INTEREST FREE FUNDS. THEREFORE, IN VIEW OF THE DECISION OF JURISDICTIONAL HIGH COURT IN CASE OF RELIANCE UTILITIES & POWER LTD. [313 ITR 340] , NO DISALLOWANCE IS WARRANTED. IN THE FITNESS OF THING, WE RESTORE THIS ISSUE ALSO BACK TO THE FILE OF THE AO TO VERIFY THE AVAILABILITY OF FREE FUNDS WITH THE ASSESSEE WHICH IS ALLEGED BY THE AR AS HAVING BEEN UTILIZED FOR MAKING INVESTMENT IN TAX FREE SECURITIES. WE DIRECT ACCORDINGLY. 9. SIMILAR GROUND HAS BEEN TAKEN BY THE ASSESSEE IN THE A. YS. 2008 - 09, 2009 - 10, 2011 - 12 AND 2012 - 13, AS THE FACTS AND CIRCUMSTANCES ARE SAME, FOLLOWING THE REASONING GIVEN HEREINABOVE, WE DIRECT THE AO TO APPLY THE SAME TO THESE YEARS ALSO. WE DIRECT ACCORDINGLY. 10 . NEXT GRIEVANCE OF ASSESSEE RELATES TO TREATMEN T OF PURCHASES OF RS. 9,60,900/ - MADE BY THE ASSESSEE FROM M/S. SOHAM MERCANTILE IN RESPECT OF 'SUNTECK CENTRE PROJECT' AS BOGUS AND REDUCING THE SAME OUT OF THE VALUE OF CLOSING WIP OF THIS, PROJECT. IT IS GATHERED THAT THE ASSESSEE HAD MADE PURCHASES TO T HE TUNE OF RS. 9,60,900/ - IN NATURE OF BUILDING MATERIAL FROM THE ABOVE PARTY. HOWEVER, THE NAME OF THIS PARTY WAS APPEARING IN THE LIST OF HAWALA DEALERS AS INDICATED BY THE MAHARASHTRA VAT DEPARTMENT TO THE INCOME TAX DEPARTMENT. IT IS GATHERED THAT THIS PARTY WAS ENGAGED ONLY IN PROVIDING ACCOMMODATION ENTRIES WITHOUT ANY REAL TRANSACTIONS OF SALES AND PURCHASES. THEREFORE, DURING THE COURSE OF ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 8 ASSESSMENT PROCEEDINGS, THE AO ISSUED A SHOW CASE NOTICE TO THE ASSESSEE CALLING UPON IT TO EXPLAIN AS TO WHY T HE ALLEGED PURCHASE FROM THE ABOVE MENTIONED PARTY AGGREGATING TO RS.9,60,900/ - MAY NOT BE TREATED AS UNEXPLAINED EXPENDITURE AND ADDED BACK TO THE INCOME OF THE ASSESSEE. IT APPEARS THAT IN RESPONSE THE ASSESSEE HAD SUBMITTED PURCHASE INVOICES, LEDGER ACC OUNT, CONFIRMATION FROM THE SELLER ETC, HOWEVER, THE ASSESSEE FAILED TO PRODUCE THIS PARTY IN PERSON BEFORE THE AO TO PROVE THE GENUINENESS OF SUCH PURCHASES. THEREFORE, THE CONTENTION OF THE ASSESSEE IN THIS REGARD WAS NOT ACCEPTED BY THE AO AND HE PROCEE DED TO TREAT SUCH PURCHASES AS BOGUS AND REDU CED THE SAME FROM THE CLOSING WI P OF 'SUNTECK CENTRE PROJECT'. 11 . AFTER CONSIDERING IN DETAILED CONTENTIONS OF AR , THE CIT(A) CONFIRMED THE ACTION OF AO AFTER OBSERVING AS UNDER: - 12. FROM THE ABOVE STATEMENT O F SHRI KAMAL KHETAN, IT IS QUITE CLEAR THAT ASSESSEE WAS ENGAGED IN MAKING BOGUS PURCHASES FROM VARIOUS COMPANIES CONTROLLED BY KIT AND OTHERS. NOT ONLY THE ASSESSEE GROUP SURRENDERED A SUM OF R. 3,04 CRS ON ACCOUNT OF BOGUS PURCHASE, BUT ALSO SURRENDERED A SUM OF RS. 56 CRS. IN RESPECT OF OTHER OMISSIONS AND COMMISSIONS DETECTED DURING THE COURSE OF SEARCH AS IS EVIDENT FROM THE STATEMENT OF THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY, SHRI KAMAL KHETAN.. IT IS FURTHER GATHERED THAT SUNTECK REALTY GROUP HAD ALSO MADE CERTAIN TRANSACTIONS WITH ONE RAJ ENTERPRISES ALSO. FURTHER, ON VERIFICATION OF THE BANK ACCOUNT OF M/S. RAJ ENTERPRISES, IT WAS GATHERED THAT WHATEVER CHEQUES WERE ISSUED BY M/S, SUNTECK REALTY, THE SAME WAS WITHDRAWN IN CASH FROM THE BANK A CCOUNT OF THAT COMPANY. IN THIS REGARD, A STATEMENT OF ONE MR. SANJAY AGARWAL OF M/S. RAJ ENTERPRISES WAS ALSO RECORDED ON OATH U/S. 131 WHEREIN HE COULD NOT EXPLAIN VARIOUS CASH WITHDRAWALS MADE IN THE ABOVE FIRM PROPERLY. 13. IN VIEW OF THE ABOVE FACTS, THE CONTENTIONS OF THE ASSESSEE THAT THE PURCHASES MADE FROM SOHAM MERCANTILE P. LTD. WAS GENUINE COULD NOT BE ACCEPTED, UNLESS AND UNTIL, THERE IS SOLID EVIDENCE TO SUPPORT THE SAME. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS NOT GIVEN A NY DETAILS IN SUPPORT OF THE EXPENDITURE OF RS. 9,60,900/ - FROM M/S. SOHAM ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 9 MERCANTILE P. LTD. THEREFORE, IT IS NOT CLEAR AS TO WHAT WERE THE ITEMS OR MATERIAL PURCHASED BY THE ASSESSEE FROM THIS CONCERN AND WHERE WERE THE SAME USED. NO BILLS, VOUCHERS OR C HALLAN, LORRY RECEIPTS, PAYMENT DETAILS IN SUPPORT OF THESE EXPENSES HAVE BEEN PRODUCED. MOREOVER, THE ASSESSEE HAS EXPRESSED HIS INABILITY TO PRODUCE THIS PARTY FOR EXAMINATION. IN THE CIRCUMSTANCES, THE ASSESSEE'S CLAIM TOWARDS THESE PURCHASES COULD NOT BE ACCEPTED. SINCE, THE NAME OF THIS PARTY IS APPEARING IN THE LIST OF HAWALA DEALERS AS PER THE RECORDS OF MAHARASHTRA VAT DEPARTMENT, I HAVE NO REASON TO DEVIATE FROM THE DECISION OF THE AO IN TREATING SUCH PURCHASES AS BOGUS. CONSEQUENTLY, THE DECISION OF THE AO IN REDUCING THIS AMOUNT OUT OF THE CLOSING WIP IS ALSO UPHELD. THEREFORE, THIS GROUND TAKEN BY THE ASSESSEE IS REJECTED. THUS, GROUND NO. 2 IS DISMISSED. 1 2 . WITH REGARD TO THE BOGUS PURCHASES, DETAILED FINDING HAS BEEN GIVEN BY THE LOWER AUTHOR ITIES WHICH HAS NOT BEEN CONTROVERTED. HERE, THE AO HAS JUST REDUCED THE VALUE OF WORK - IN - PROGRESS BY THE AMOUNT OF BOGUS PURCHASES . T HE ASSESSEE HAS ALSO SURRENDERED THIS INCOME . WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITIES. 1 3 . SIMILA R ISSUE HAS BEEN RAISED BY THE ASSESSEE IN ALL THE YEARS UNDER CONSIDERATION, FOLLOWING THE REASONING GIVEN FOR THE A.Y.2007 - 08, WE DIRECT THE AO TO APPLY THE SAME TO THE SUBSEQUENT YEARS ALSO. 1 4 . IN OTHER ASSESSMENT YEARS I.E., 2008 - 09, 2011 - 12 AND 2012 - 13 , THE ASSESSEE HAS ALSO TAKEN A GROUND THAT WHILE COMPUTING BOOK PROFIT U/S.115JB , THE DISALLOWANCE MADE U/S.14A SHOULD NOT BE CONSIDERED. THIS ISSUE HAS BEEN CONSIDERED IN THE DECISION OF ITAT SPECIAL BENCH IN CASE OF VIREET INVESTMENT PVT. LTD., 82 TAX MANN.COM 415 . THE TRIBUNAL IN ITS ORDER HELD AS UNDER: - SECTION 115JB. READ WITH SECTION 14A. OF THE INCOME - TAX ACT, 1961 AND RULE 8D OF THE INCOME - TAX / RULES, 1962 MINIMUM ALTERNATE TAX (SECTION 14A APPLICATION) - ASSESSMENT YEAR 2008 - 09 COMPUTATION U NDER CLAUSE (F) ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 10 OF EXPLANATION 1 TO SECTION 115JB(2) IS TO BE MADE WITHOUT RESORTING TO / COMPUTATION AS CONTEMPLATED UNDER SECTION 14A READ WITH RULE 80 - HELD, YES (PARA 22). 15 . RESPECTFULLY FOLLOWING THE DECISION OF SPECIAL BENCH , WE RESTORE THE MATT ER BACK TO THE FILE OF AO FOR NOT ADDING THE DISALLOWANCE MADE AS PER RULE 8D, WHILE COMPUTING THE BOOK PROFIT. HOWEVER, THE ACTUAL EXPENDITURE DEBITED TO P & L ACCOUNT WHICH RELATE TO EXEMPT INCOME IS REQUIRED TO BE ADDED IN TERMS OF DECISION OF SPECIAL B ENCH IN THE CASE OF VIREET INVESTMENT (SUPRA). ACCORDINGLY MATTER IS RESTORED TO THE FILE OF AO FOR RECOMPUTING THE SAME IN TERMS OF DECISION OF VIREET INVESTMENT (SUPRA). WE DIRECT ACCORDINGLY. 1 6 . IN THE A.Y.2011 - 12 AND 2013 - 13, ASSESSEE HAS ALSO TAKEN GROUND FOR DISALLOWANCE MADE U/S.43B IN RESPECT OF CLAIM OF PROVIDENT FUND. IT WAS CONTENTION OF LEARNED AR THAT PROVIDENT FUND WAS PAID BEFORE LAST DATE OF FILING OF RETURN, ACCORDINGLY, NO DISALLOWANCE IS WARRANTED. KEEPING IN VIEW SUBSTANTIAL INTEREST O F JUSTICE, WE RESTORE THIS ISSUE IN BOTH THE YEARS TO THE FILE OF THE AO FOR VERIFYING THE ACTUAL DATE OF PAYMENT AND IF THE AO FOUND THAT BOTH THE PAYMENTS WERE MADE BEFORE LAST DATE OF FILING OF RETURN THEN NO DISALLOWANCE IS WARRANTED. WE DIRECT ACCORDI NGLY. 1 7 . IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 / 11 /201 8 SD/ - ( RAM LAL NEGI ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 30 / 11 /201 8 ITA NO. 1264/MUM/2017 AND OTHER APPEALS M/S. SUNTEC K REALTY LTD., 11 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//