M/s I- Ven Kolte Patil Projects ( Pune ) P.Ltd, Pune V. DCIT, Pune

ITA 1416/PUN/2013

• Counselvise Citation: 141624514 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR HARSHVARDHINI BUTY
• Keywords: Bogus purchase; Additional evidence; Retraction
• Section: 143(3); 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1416/PN/2013 ASSESSMENT YEAR: 2008-09 M/S I-VEN KOLTE PATIL PROJECTS (PUNE) P. LTD., 2 ND FLOOR, CITY POINT, DHOLE PATIL ROAD, PUNE 411 001. PAN: AABCI5939C . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), PUNE. . RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK RESPONDENT BY : SMT. (DR.) HARSHVARDHINI BUTY DATE OF HEARING : 24-06-2015 DATE OF PRONOUNCEMENT : 25-06-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-II, PUNE DATED 28.03.2013 RELATING TO ASSESSMENT YEAR 2008-0 9 PASSED UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7,88,491/- ON ACCOUNT OF NON GENUINE PURCHASES BY HOLDING THAT TH E PURCHASES MADE FROM M/S. FRESHO METALS PVT. LTD. WERE BOGUS ON THE GROU ND THAT THE SAME WERE ADMITTED TO BE NON-GENUINE BY THE SUPPLIER AND HENC E, THE SAME WERE TO BE REDUCED FROM THE COST OF CLOSING WIP OF THIS YEAR. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT- A. THE ASSESSEE WAS NOT ABLE TO DEMONSTRATE WITH DOCU MENTARY EVIDENCE THAT THE PURCHASES MADE FROM THE ABOVE PAR TY WERE GENUINE AND HENCE, THE DISALLOWANCE MADE WAS JUSTIFIED. B. THE ADMISSION OF THE SAID PARTY IN THE STATEMENT R ECORDED IN THE COURSE OF SEARCH WAS A STRONG EVIDENCE AND SINCE TH E ASSESSEE WAS NOT ABLE TO REBUT THE SAME WITH THE HELP OF ANY COG ENT EVIDENCE THE CORRECTNESS OF THE SAID ADMISSION COULD NOT BE DOUB TED AND THUS, THE PURCHASES MADE FROM THE SAID PARTY WERE TO BE TREAT ED AS BOGUS PURCHASES. C. THE LEARNED A.O. HAD PROVIDED REASONABLE OPPORTUNI TY OF CROSS ITA NO.1416/PN/2013 2 EXAMINATION OF THE SAID PARTY BEFORE COMPLETION OF THE ASST. AND HENCE, THE ADDITION MADE WAS JUSTIFIED IN LAW. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT - A. THE ADDITION WAS MADE WITHOUT GIVING AN OPPORTUNIT Y TO THE ASSESSEE TO CROSS EXAMINE THE SUPPLIER WHO HAD STATED THAT T HE SALES MADE TO THE ASSESSEE WERE BOGUS. B. THE SAID SUPPLIER HAD NOT ATTENDED THE OFFICE OF T HE A.O. IN RESPONSE TO THE SUMMONS ISSUED BY THE A.O. AND FURTHER, NO O PPORTUNITY OF CROSS EXAMINATION WAS GRANTED EITHER BY THE A.O. OR THE LEARNED CIT(A) AND THEREFORE, IN VIEW OF THE SUPREME COURT DECISION IN THE CASE OF KISHANCHAND CHELLARAM [125 ITR 713], THE AD DITION COULD NOT BE MADE IN THE HANDS OF THE ASSESSEE. C. THE ASSESSEE HAD PROVED THE GENUINENESS OF THE SAI D PURCHASES BY PRODUCING THE BILLS OF THE SUPPLIER AND FROM THE FA CT THAT THE PAYMENTS WERE MADE BY CROSSED CHEQUES AND THUS, THE ASSESSEE HAD DISCHARGED THE ONUS LYING UPON TO IT TO ESTABLI SH THE GENUINENESS OF THE SAID PURCHASES. D. THE ASSESSEE HAD ALSO SHOWN THAT IF THE SAID ALLEG ED BOGUS PURCHASES ARE EXCLUDED, THE STEEL UTILIZED BY THE A SSESSEE IN VARIOUS PROJECTS WAS FAIRLY SHORT OF THE REQUIRED AMOUNT OF STEEL WHICH WAS NECESSARY FOR CONSTRUCTING THE VARIOUS PROJECTS AND HENCE, WITHOUT SUCH STEEL PURCHASES, THE ASSESSEE COULD NOT HAVE C ONSTRUCTED THESE PROJECTS AND ACCORDINGLY, IN VIEW OF [68 ITD 65 TM] , THE DEDUCTION WAS RIGHTLY ALLOWABLE TO THE ASSESSEE. E. THE SUPPLIER HAVING NOT ATTENDED BEFORE THE A.O. F OR CROSS EXAMINATION BY THE ASSESSEE MUST HAVE GIVEN THE STA TEMENT SO AS TO COVER UP THE LUCANAE IN ITS BOOKS REGARDING THE SUPPLIES AND HENCE, SUCH STATEMENT COULD NOT BE USED AGAINST THE ASSESSEE IN VIEW OF THE EVIDENCES SUBMITTED BY THE ASSESSEE. 4] THE ASSESSEE SUBMITS THAT THE PURCHASES OF STE EL OF RS.7,88,491/- WERE GENUINE AND THE CLOSING WIP TO BE CARRIED FORWARD T O THE NEXT YEAR SHOULD BE INCREASED BY THE ABOVE AMOUNT. 5] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE ADDITION OF RS.7,88,491/- ON ACCOUNT OF PURCHASES MADE FROM M/S FRESHO METALS PVT. LTD., WHICH WERE HELD TO BE BOGUS PURCHASE. 4. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE, AT THE OUTSET, POINTED OUT THAT THE ISSUE IN THE PRESENT APPEAL IS SQUAREL Y COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF SISTER CONCERN. ITA NO.1416/PN/2013 3 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE ALSO REFERRED TO THE SAID ORDER OF THE TRIBUNAL. 6. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE A SSESSEE WAS A COMPANY AND, INTER-ALIA, ENGAGED IN THE BUSINESS OF CIVIL CONSTR UCTION. SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE GROUP OF CASES OF THE ASSESSEE ON 22.08.2008. DURING THE COURSE OF SEARCH ACTION, SE VERAL DOCUMENTS WERE SEIZED. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD D EBITED THE EXPENSES OF RS.13,55,356/- AND RS.7,88,491/- AS STEEL PURCHASE FROM M/S SHREE SURYA STEEL AND M/S FRESHO METALS PVT. LTD.. SIMILAR PURCHASES WERE MADE FROM THE SAID TWO PARTIES IN THE GROUP CASE I.E. M/S KOLTE PATIL DEVELOPERS LTD. OF WHICH ASSESSEE WAS THE SUBSIDIARY AND THE SAID PURCHASES WERE PROVED TO BE BOGUS IN THE SAID CASE. DURING THE COURSE OF POST-SEARCH EN QUIRY, SUMMONS WERE ISSUED UNDER SECTION 131 OF THE ACT TO SEVERAL PARTIES AND THE STATEMENT OF SHRI KRISHNAKUMAR GUPTA WAS RECORDED ON 05.09.2008. HE WAS A DIRECTOR OF THREE COMPANIES I.E. (I) M/S FRESHO METALS PVT. LTD.; (II ) M/S UNIQUE FERRO & METAL PVT. LTD.; AND, (III) M/S PRAKY MERCANTILE PVT. LTD.. H E IN THE STATEMENT ADMITTED THAT THE ACTIVITY OF TRADING IN STEEL IN THE SAID THREE COMPANIES WAS NOT AT ALL CARRIED OUT AND THE ONLY ACTIVITY CARRIED OUT IN THE SAID T HREE COMPANIES WAS OF CHEQUE DISCOUNTING, WHEREBY CHEQUES WERE RECEIVED FROM THE BENEFICIARIES AND CASH WAS RETURNED BACK AFTER DEDUCTING HIS COMMISSION/DI SCOUNTING CHARGES. HE ALSO ADMITTED THAT NO STEEL WAS DELIVERED TO M/S KOLTE P ATIL DEVELOPERS LTD.. FURTHER, STATEMENTS OF THE PERSONS RELATED TO THE OTHER CONC ERNS WERE ALSO RECORDED WHICH, IN TURN, ARE INCORPORATED IN THE ASSESSMENT ORDER ITSELF. CONSEQUENT THERETO, THE CONCLUSION WAS THAT THE PURCHASES OF S TEEL, ETC. MADE FROM SIX CONCERNS I.E. (I) M/S UNIQUE FERRO & METAL PVT. LTD .; (II) M/S FRESHO METALS PVT. LTD.; (III) M/S PRAKY MERCANTILE PVT. LTD.; (IV) M/ S MEGHNA ENTERPRISES; (V) M/S NARENDRA KUMAR & CO.; AND, (VI) M/S R.D. JAIN & CO. WERE NON-GENUINE, WHEREIN, EVEN THE RESPECTIVE PARTIES HAD CONFIRMED THAT THEY HAD NOT MADE ANY ITA NO.1416/PN/2013 4 SALES AND ONLY PROVIDED ACCOMMODATIONS ENTRIES TO T HE ASSESSEE. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS SHOW-CAUSED BY THE ASSESSING OFFICER AS TO WHY THE PURCHASES MADE BY IT SHOULD NOT BE DISALLOW ED FOR THE RESPECTIVE YEARS. THE ASSESSING OFFICER THEREAFTER DISALLOWED THE EXP ENSES ON ACCOUNT OF STEEL PURCHASES TO THE TUNE OF RS.21,43,847/- AND CONSEQU ENTLY THE WORK-IN-PROGRESS WAS REDUCED BY THE SAID SUM AND THE BALANCE WAS DIR ECTED TO BE CARRIED FORWARD TO THE NEXT YEAR. 7. THE CIT(A) UPHELD THE PURCHASES MADE FROM M/S FR ESHO METALS PVT. LTD. AT RS.7,88,491/-. HOWEVER, IN RESPECT OF PURCHASES MADE FROM M/S SHREE SURYA STEEL OF RS.13,55,536/-, THE CIT(A) DELETED THE SAM E IN LINE WITH SIMILAR DELETION MADE IN THE OTHER CASES WHEREIN IT WAS HELD THAT TH E SAID DISALLOWANCES WERE NOT WARRANTED AS THE SAME ARE GENUINE PURCHASES. 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT(A) IN CONFIRMING THE ADDITION OF RS.7,88,491/-. 9. WE FIND THAT SIMILAR ISSUE OF PURCHASES MADE FRO M CERTAIN SIX PARTIES WERE BOGUS CAME BEFORE THE TRIBUNAL IN ITA NOS.1411 TO 1 415/PN/2013 RELATING TO ASSESSMENT YEARS 2003-04, 2005-06 & 2007-08 TO 2009 -10 IN M/S KOLTE PATIL DEVELOPERS LTD. VS. DCIT ALONG WITH REVENUES APPEA L IN DCIT VS. M/S KOLTE PATIL DEVELOPERS LTD. IN ITA NOS.1478 TO 1483/PN/20 13 RELATING TO ASSESSMENT YEARS 2004-05 TO 2009-10 AND VIDE ORDER DATED 20.02 .2015, THE TRIBUNAL VIDE PARA 6 NOTED THE FACTS OF THE CASE WHEREIN THE NAME OF THE SUPPLIER M/S FRESHO METAL PVT. LTD. IS ALSO INCLUDED AND THE PARA 6 REA DS AS UNDER :- 6. THE FACTS RELEVANT TO APPRECIATE THE CONTROVERS Y ARE AS FOLLOWS. IN THE COURSE OF SEARCH ACTION U/S 132(1) OF THE ACT, THE DEPARTMENT MADE ENQUIRIES WITH SOME OF THE SUPPLIERS OF STEEL TO THE ASSESSEE . IN THE COURSE OF SUCH ENQUIRIES, STATEMENTS OF SIX SUPPLIERS OF STEEL, NA MELY, (I) M/S UNIQUE FERRO METALS PVT. LTD.; (II) M/S FRESHO METALS PVT. LTD.; (III) M/S PRAKY METALS PVT. LTD.; (IV) M/S MEGHANA ENTERPRISES; (V) M/S NARENDRAKUMAR & CO.; AND, (VI) M/S R.D. ITA NO.1416/PN/2013 5 JAIN & CO. WERE RECORDED U/S 131 OF THE ACT WHEREI N THE PARTIES DEPOSED THAT THEY HAD NOT MADE ANY ACTUAL SALES/ SUPPLIES OF STE EL TO THE ASSESSEE-COMPANY BUT ONLY ACCOMMODATION BILLS WERE ISSUED BY THEM. IT WAS STATED BY SUCH PARTIES THAT THE BILLS RAISED BY THEM WERE SETTLED BY CHEQU E PAYMENTS, WHICH WERE RETURNED BACK BY WAY OF CASH AFTER DEDUCTING 1% ON ACCOUNT OF COMMISSION. IT IS ALSO EMERGING FROM THE ASSESSMENT ORDER THAT STATEM ENT OF ONE OF THE TRANSPORTER, NAMELY, M/S NEW ARC TRANSPORT WAS ALSO RECORDED BY THE DEPARTMENT WHO ALSO DEPOSED THAT HE HAD ISSUED BOGU S LORRY RECEIPTS TO ONE OF THE SUPPLIERS IN RESPECT OF THE SALES MADE TO THE A SSESSEE AND THAT HE HAD ACTUALLY NOT MADE ANY DELIVERY OF GOODS TO THE ASSE SSEE-COMPANY. IN THE ASSESSMENT ORDER, THE STATEMENTS RECORDED OF SUCH P ERSONS HAVE BEEN EXHAUSTIVELY REFERRED TO. THE ASSESSING OFFICER RE FERRED TO THE STATEMENT OF ONE SHRI KRISHNAKUMAR GUPTA, DIRECTOR OF THREE OF THE A FORESAID COMPANIES, NAMELY, M/S FRESHO METAL PVT. LTD.; M/S UNIQUE FERRO METAL PVT. LTD; AND, M/S PRAKY MERCANTILE PVT. LTD., WHEREIN IT WAS ADMITTED THAT THE ACTIVITY OF TRADING IN STEEL WAS NOT CARRIED OUT BY THE SAID COMPANIES AND THAT THE ONLY ACTIVITY CARRIED OUT WAS OF CHEUQE DISCOUNTING WHEREBY CHEQUES WERE RECE IVED FROM BENEFICIARIES AND CASH WAS RETURNED TO THEM AFTER DEDUCTING COMMI SSION. SIMILARLY, ASSESSING OFFICER REFERRED TO THE STATEMENT OF SHRI KIRTI SHA H, A PARTNER OF M/S MEGHNA ENTERPRISES WHEREIN IT IS STATED THAT THE SAID FIRM DID NOT CARRY OUT ANY ACTUAL ACTIVITY IN TRADING OF STEEL BUT WAS CARRYING OUT C HEQUE DISCOUNTING ACTIVITIES WHEREBY CHEQUES WERE RECEIVED FROM THE BENEFICIARIE S AND CASH WERE RETURNED BACK AFTER DEDUCTING COMMISSION. THE ASSESSING OFF ICER HAS ALSO REFERRED TO THE STATEMENT OF ONE SHRI NARENDRAKUMAR TIMBADIA, WHO W AS PROPRIETOR OF TWO CONCERNS, NAMELY, M/S NARENDRAKUMAR & CO. AND M/S R .D. JAIN & CO.. IN HIS STATEMENT, SHRI NARENDRAKUMAR TIMBADIA ADMITTED THA T HIS PROPRIETORY CONCERNS HAD ISSUED ACCOMMODATIONS BILLS TO THE ASSESSEE-COM PANY. THE STATEMENT OF THE TRANSPORTER, SHRI BHASKAR M. DARANDALE OF NEW A RC TRANSPORT HAS ALSO BEEN REFERRED TO WHEREIN THE SAID PERSON ADMITTED T HAT HE HAD ISSUED BOGUS LORRY RECEIPTS TO M/S M/S R.D. JAIN & CO. WITHOUT ACTUAL DELIVERY OF ANY MATERIAL. 10. THE TRIBUNAL FURTHER AFTER ELABORATING UPON THE ISSUE IN DEPTH HELD THAT THE PURCHASES MADE FROM THE AFORESAID SIX PARTIES AS RE FERRED TO BY US IN THE PARAS HEREINABOVE, ARE BOGUS AND THE ORDER OF THE CIT(A) WAS UPHELD OBSERVING AS UNDER :- 23. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IN SUM AND SUBSTANCE, THE DISPUTE IS WITH REGARD TO THE PURCHA SES CLAIMED TO HAVE BEEN EFFECTED BY THE ASSESSEE FROM THE AFORESAID 11 PART IES. THE CASE SETUP BY THE ASSESSING OFFICER IS THAT THE PURCHASE OF STEEL, ET C. MADE FROM THE SAID 11 PARTIES WAS IN-GENUINE AND THEREFORE AN AMOUNT OF RS.7,75,3 4,092/- REPRESENTING PURCHASES EFFECTED FROM SUCH PARTIES HAS BEEN DISAL LOWED WHILE COMPUTING THE TOTAL INCOME. THE REASONS FOR THE ASSESSING OFFICE R TO HOLD THE PURCHASES AS BOGUS HAVE BEEN DETAILED BY US IN THE EARLIER PART OF THIS ORDER AND ARE NOT BEING REPEATED FOR THE SAKE OF BREVITY. BE THAT AT IT MA Y, IN OUR VIEW, THE PURCHASES EFFECTED FROM SIX PARTIES STAND ON A DIFFERENT FOOT ING THAN THE PURCHASES EFFECTED FROM THE BALANCE FIVE PARTIES. THE POINT OF DISTIN CTION IS THE MANNER AND THE MATERIAL RELIED UPON BY THE ASSESSING OFFICER IN OR DER TO TREAT SUCH PURCHASES AS BOGUS. IN SO FAR AS THE PURCHASE FROM THE SIX PART IES IS CONCERNED, THE SAME HAS BEEN HELD TO BE BOGUS BASED ON THE ENQUIRIES CONDUC TED BY THE DEPARTMENT IN ITA NO.1416/PN/2013 6 THE POST-SEARCH PROCEEDINGS. STATEMENTS OF THE SIX PARTIES WERE RECORDED U/S 131 OF THE ACT, WHICH ELUCIDATED THAT ALL OF THEM D ENIED OF HAVING MADE ACTUAL SUPPLY OF GOODS TO THE ASSESSEE. IN ONE OF THE CAS ES, THE ASSESSING OFFICER HAS ALSO REFERRED TO THE STATEMENT RECORDED OF THE TRAN SPORTER WHEREIN ALSO IT WAS CONFIRMED BY HIM THAT NO ACTUAL TRANSPORTATION OF G OODS WAS EFFECTED. THE AFORESAID ADVERSE MATERIAL OBTAINED BY THE REVENUE WAS PUT ACROSS TO THE ASSESSEE RIGHT FROM THE BEGINNING. IN THIS CONTEXT , IT WOULD ALSO BE RELEVANT TO OBSERVE THAT NEITHER THE SIX SUPPLIERS AND NOR THE ASSESSEE HAS BEEN ABLE TO PRODUCE ON RECORD EVEN THE PRIMARY EVIDENCE TO SHOW THE MOVEMENT OF GOODS FROM THEM TO THE ASSESSEE. FOR INSTANCE, NO DELIVE RY CHALLANS OR OCTROI RECEIPTS OR ANY OTHER FORM OF EVIDENCE OF DELIVERY HAS BEEN BROUGHT OUT. THE PLEA OF THE ASSESSEE WAS THAT THE PAYMENTS HAVE BEEN MADE THROU GH CHEQUES AND THAT THE PURCHASES ARE EVIDENCED BY THE BILLS RAISED BY THE SAID SUPPLIERS. ASSESSEE ALSO ASSERTED THAT CROSS-EXAMINATION OF THE SAID PARTIES WAS NOT ALLOWED TO THE ASSESSEE. 24. AS PER THE REVENUE, IN THE COURSE OF POST-SEARC H INVESTIGATIONS ITSELF, SHRI RAJESH PATIL, CMD OF THE ASSESSEE-COMPANY WAS CONFRONTED ON THIS ASPECT AND WAS OFFERED CROSS-EXAMINATION OF THE SAID PARTI ES. IT APPEARS THAT THE ASSESSEE DID NOT AVAIL OF THIS OPPORTUNITY AS THE C FO OF THE ASSESSEE-COMPANY WAS NOT PRESENT BECAUSE THE DAY-TO-DAY NITTY-GRITTY OF PURCHASES WAS NOT KNOWN TO THE CMD. EVEN IN THE COURSE OF ASSESSMENT PROCE EDINGS, IT TRANSPIRES THAT THE ASSESSING OFFICER ALLOWED AN OPPORTUNITY OF CROSS-E XAMINATION BUT ON THE RELEVANT DATE AND TIME, THE SUPPLIERS DID NOT TURN- UP. BE THAT AS IT MAY, IN OUR CONSIDERED OPINION, CROSS-EXAMINATION OF THE SUPPLI ERS WOULD BECOME MATERIAL ONLY WHEN THE ASSESSEE IS ABLE TO DEMONSTRATE WITH CERTAIN PRIMARY EVIDENCE THAT THE STATEMENTS GIVEN BY THE SUPPLIERS ARE WRONG OR THAT THEY DO NOT REFLECT THE CORRECT STATE OF AFFAIRS. IN THIS CONTEXT, ASSESSE E HAS MERELY REFERRED TO THE PURCHASE BILLS ISSUED BY THE SUPPLIERS AND THE CHEQ UE PAYMENTS MADE. SO HOWEVER, THERE IS NO OTHER EVIDENCE, NAMELY, GRNS, OCTROI RECEIPTS, DELIVERY CHALLANS, ETC. WHICH WOULD SHOW THAT THE SUPPLIES W ERE INDEED MADE. THEREFORE, IN SUCH A SITUATION, CAN THE ABSENCE OF CROSS-EXAMI NATION BE FATAL TO THE ADDITION IN QUESTION ?, ESPECIALLY WHEN AT THE INITIAL STAGE , AN OPPORTUNITY OF CROSS- EXAMINATION WAS INDEED ALLOWED, WHICH COULD NOT BE AVAILED FOR THE REASONS WE HAVE ALREADY STATED ABOVE. IN OUR VIEW, THE RIGHT OF CROSS-EXAMINATION IS NOT AUTOMATIC, BUT IT WOULD BE INCUMBENT ONLY IN A SITU ATION WHERE THE ASSESSEE IS ABLE TO PRIMA-FACIE DEMONSTRATE THAT THE ONUS CAST ON HIM TO ESTABLISH HIS VERSION OF AFFAIRS IS BASED ON PRIMARY EVIDENCE. IN THIS C ASE, THE ASSESSEE HAD FAILED TO LEAD ANY PRIMARY EVIDENCE, VIZ. GRNS, OCTROI RECEIP TS, DELIVERY CHALLANS, ETC. WHICH WOULD SHOW THAT THE SUPPLIES WERE INDEED MADE . 25. NOW, THE ASSESSEE HAS ALSO REFERRED TO AN AFFID AVIT OF SHRI NARENDRAKUMAR TIMBODIA, PROP. OF NARENDRAKUMA & CO. AND PARTNER OF R.D. JAIN & CO., WHEREIN HE CONFIRMED THAT THE PURCHASES MADE BY THE ASSESSEE FROM HIM WERE GENUINE. THIS AFFIDAVIT WAS OBTAINED BY THE A SSESSEE ONLY AFTER THE COMPLETION OF ASSESSMENT PROCEEDINGS AND WAS SUBMIT TED TO THE CIT(A). THE CIT(A) HAS ADMITTED SUCH ADDITIONAL EVIDENCE AND ON THAT THERE IS NO DISPUTE. HOWEVER, HE HAS NOT ACCEPTED THE AVERMENTS MADE THE REIN. WE HAVE ALSO PERUSED THE COPY OF SUCH AFFIDAVIT, A COPY OF WHICH HAS BEEN PLACED IN PAPER BOOK. IN THIS CONNECTION, WE HAVE ALSO PERUSED THE STATEMENT OF SHRI NARENDRAKUMAR TIMBODIA RECORDED U/S 131 OF THE ACT ON 15.09.2008, WHOSE RELEVANT PORTION HAS BEEN EXTRACTED IN THE ASSESSME NT ORDER ITSELF. IN HIS DEPOSITION, HE HAS CATEGORICALLY CONFESSED THAT THE RE IS NO ACTUAL SUPPLY OF GOODS TO THE ASSESSEE AND HE EXPLAINED THAT IN ORDER TO G IVE A COLOUR OF GENUINENESS TO THE SALE BILLS, THEY HAVE PREPARED THE LORRY RECEIP T OF M/S NEW ARC TRANSPORT SHOWING TRANSPORTATION OF GOODS TO THE ASSESSEE. T HE AFORESAID AVERMENT OF THE ITA NO.1416/PN/2013 7 SAID PERSON MADE IN THE COURSE OF POST-SEARCH ENQUI RIES STOOD CORROBORATED BY THE STATEMENT DEPOSED BY THE TRANSPORTER, M/S NEW A RC TRANSPORT. IN CONTRAST, THE AFFIDAVIT FURNISHED IN THE COURSE OF THE APPELL ATE PROCEEDINGS BEFORE THE CIT(A) DOES NOT DEAL WITH THE ABOVE CIRCUMSTANCE AN D IT DOES NOT EVEN EXPLAIN THE REASONS FOR RETRACTION OF HIS STATEMENT, AND IN ANY CASE, THE RETRACTION IS UNCORROBORATED. IN-FACT, THE STATEMENT MADE BY HIM IN THE COURSE OF POST-SEARCH ENQUIRIES STANDS CORROBORATED BY THE STATEMENT OF T HE TRANSPORTER WHEREAS THERE IS NO SUCH CORROBORATION TO HIS AVERMENTS MADE IN T HE AFFIDAVIT FURNISHED BEFORE THE CIT(A). UNDER THESE CIRCUMSTANCES, IN OUR VIEW , THE ORIGINAL ADMISSION OF THE SAID PERSON MADE AT THE TIME OF POST-SEARCH ENQUIRI ES WOULD HOLD THE FIELD. THUS, ON THIS ASPECT ALSO, WE FIND THAT THE CIT(A) MADE NO MISTAKE. THEREFORE, ON THE ASPECT OF THE PURCHASES EFFECTED FROM THE SI X PARTIES WITH WHOM ENQUIRIES WERE CONDUCTED DURING POST-SEARCH PERIOD, THE CIT(A ) JUSTIFIABLY HELD SUCH PURCHASES AS BOGUS. WE HEREBY AFFIRM HIS ACTION, A ND ASSESSEE FAILS ON THIS ASPECT. 26. BEFORE PARTING ON THIS ISSUE, WE MAY ALSO TOUCH -UPON AN ALTERNATE PLEA RAISED BY THE ASSESSEE WITH REGARD TO THE QUANTUM O F ADDITION ON THIS COUNT. IN THIS CONTEXT, ASSESSEE POINTED OUT THAT IF THE ENTI RE AMOUNT OF PURCHASE DEBITED IN THE PROFIT & LOSS ACCOUNT WITH RESPECT TO THE SIX P ARTIES IS DISALLOWED, IT WOULD MEAN THAT THE CORRESPONDING CONSUMPTION OF STEEL HA S NOT TAKEN PLACE IN QUANTITATIVE TERMS. BEFORE THE LOWER AUTHORITIES, ASSESSEE HAD FURNISHED A WORKING, WHICH WAS CONFIRMED BY A STRUCTURAL ENGINE ER REGARDING THE MINIMUM REQUIREMENT OF STEEL IN THE PROJECTS UNDERTAKEN BY THE ASSESSEE. AS PER THE SAID WORKING, IF THE AFORESAID DISPUTED QUANTITY OF STEE L PURCHASE WAS EXCLUDED, IT WOULD SHOW THAT THE CONSUMED QUANTITY OF STEEL WAS LOWER THAN THE MINIMUM REQUIRED TO UNDERTAKE CONSTRUCTION. THEREFORE, ACC ORDING TO THE ASSESSEE, THE ONLY PRESUMPTION THAT CAN BE WITHDRAWN IS THAT ASSE SSEE HAD INDEED EFFECTED THE PURCHASES. IT WAS POINTED OUT THAT ON THE FAILURE OF THE ASSESSEE TO SUBSTANTIATE THE PURCHASES, AT BEST, THE ADDITION CAN BE MADE WI TH RESPECT TO THE GROSS PROFIT ELEMENT CORRESPONDING TO THE AMOUNT OF PURCHASES BU T NOT THE ENTIRE AMOUNT OF PURCHASE BILLS. THE RELIANCE HAS ALSO BEEN PLACED ON CERTAIN DECISIONS IN THIS REGARD, WHICH WE HAVE NOTED IN EARLIER PARAS. 27. WE HAVE CAREFULLY CONSIDERED THE AFORESAID ALTE RNATE PLEA OF THE ASSESSEE BUT FIND OURSELVES UNABLE TO ACCEPT THE SA ME, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THE P ROPOSITION BEING RELIED UPON BY THE ASSESSEE ON THE STRENGTH OF THE DECISIONS OF THE HONBLE GUJARAT HIGH COURT NOTED EARLIER IS NOT DISPUTED. BUT THE MOOT QUESTION IS AS TO WHETHER THE POSITION CANVASSED BY THE ASSESSEE THAT THE QUANTIT Y OF STEEL CORRESPONDING TO THE IMPUGNED PURCHASES HAS BEEN CONSUMED STANDS EST ABLISHED OR NOT ? THE CONFIRMATION OF THE STRUCTURAL ENGINEER, A COPY OF WHICH HAS BEEN PLACED IN PAPER BOOK AT PAGE 79 DOES NOT ELABORATE AS TO THE TIME P ERIOD IN WHICH THE CONSUMPTION OF STEEL HAS TAKEN PLACE. MOREOVER, AT THE RELEVANT POINT OF TIME, MULTIPLE PROJECTS OF THE ASSESSEE WERE UNDER CONSTR UCTION AND THERE IS NO MATERIAL TO CO-RELATE AS TO WHETHER AT THE TIME WHE N THE IMPUGNED PURCHASES WERE EFFECTED ANY PROJECTS WERE BEING CARRIED OUT. THEREFORE, THE RATIO OF THE JUDGEMENTS OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF (I) BHOLANATH POLY FAB PVT. LTD. (SUPRA); AND, (II) SANJAY OILCAKE IND USTRIES (SUPRA) CANNOT BE APPLIED IN THE PRESENT CASE. THEREFORE, THE ACTION OF THE CIT(A) IN HOLDING THE PURCHASES EFFECTED FROM SIX PARTIES AS BOGUS IS AFF IRMED. 11. THE ISSUE RAISED BEFORE US IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN M/S KOLTE PATIL DEVELOPERS LTD. VS. DCIT (SUPRA) AN D FOLLOWING THE SAME PARITY OF ITA NO.1416/PN/2013 8 REASONING, WE UPHOLD THE ORDER OF THE CIT(A) AND DI SMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF JUNE, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 25 TH JUNE, 2015 SUJEET COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT, CENTRAL, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE