Siddarth Engineering Corporation, Pune V. Addl. CIT, Pune

ITA 1502/PUN/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2291 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR SHRI B C MALAKAR
• Keywords: Bogus purchase; Principle of natural justice
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 1 502 /PN/201 3 / ASSESSMENT YEAR : 20 0 9 - 10 SIDDARTH ENGINEERING CORPORATION, S.NO.23, BHAGAT WASTI, NR. GANESH MANDIR, BHOSARI, PUNE 411039 . / APPELLANT PAN: AARFS2761H VS. THE ASST . COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE . / RESPONDENT / APPELLANT BY : S HRI PRAMOD SHINGTE / RESPONDENT BY : SHRI B.C. MALAKAR / RESPONDENT BY : SHRI B.C. MALAKAR / DATE OF HEARING : 29 . 1 0 .2015 / DATE OF PRONOUNCEMENT: 29 .1 2 .2015 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - V , PUNE , DATED 17 . 0 5 .20 1 3 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TA X ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES ERRED IN MAKING THE ADDITION OF ALLEGED BOGUS PURCHASE OF SUM OF RS.1,4 5,50,189/ - BY DISREGARDING APPELLANTS CONTENTION IN THIS REGARD. ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES ERRED IN TREATING THE GENUINE SUPPLIERS AS NON GENUINE MERELY BY PRESUMING CERTAIN FACTS AND FOR FRI VOLOUS REASONS AND BY DISREGARDING ENTIRE RECORD PRODUCED BY THE ASSESSEE IN THIS REGARD. THE A PPELLANT CRAVES LEAVE , ADD , ALTER , MODIFY, DELETE, ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING, IN THE INTEREST OF NATURAL JUSTICE. 3. THE ISSUE R AISED IN THE PRESENT APPEAL IS AGAINST THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES TO THE TUNE OF RS. 1,45,50,189/ - . 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE , A PARTNERSHIP FIRM WAS CARRYING ON THE BUSINESS OF ELECTRICAL WORKS CONTRAC T AND RE - SELLER OF ELECTRICAL ITEMS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.22,49,250/ - . THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD CARRIED OUT SUB - CONTRACT ON BEHALF OF M/S. S.T. ELECTRICALS PVT. LTD. FOR MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. TO THE EXTENT OF RS. 2,09,20,344/ - . FOR CARRYING OUT THE SAID SUB - CONTRACT, CERTAIN PURCHASES OF VARIOUS MATERIALS WERE MADE BY THE ASSESSEE INCLUDING PURCHASES FROM S.G. EN TERPRISES AND M/S. STEEL CRAFT. THE ASSESSEE HAD MADE PURCHASES OF RS. 91,90,787/ - FROM S.G. ENTERPRISES AND RS.53,59,402/ - FROM M/S. STEEL CRAFT, TOTALING RS.1,45,50189/ - . THE ASSESSING OFFICER NOTED THAT BOTH THESE PARTIES WERE SHOWN AS CREDITORS BY THE ASSESSEE FOR GOODS PURCHASE D FROM DECEMBER, 2008 TO MARCH, 2009 AND NOT A SINGLE RUPEE WAS PAID TO THE SAID PARTIES DURING THE YEAR AND THE PAYMENT WAS MADE TO THEM IN THE MONTH OF APRIL, 2010. ON COMPARISON OF BILLS OF TWO SUPPLIERS, WHICH W ERE SUBMITTED BY THE ASSESSEE, CERTAIN STRIKING SIMILARITIES WERE NOTICED I.E. BOTH THE BILLS HAD SAME FONT AND STYLE OF PRINTING BY USING DOT MATRIX PRINTER, PHONE NUMBERS MENTIONED ON THE BILLS WERE ALMOST THE SAME WITH JUST DIFFERENCE OF LAST TWO DIGIT, DESPITE THE FACT THAT THE ADDRESSES OF THE PARTIES WERE LOCATED ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 3 MUCH APART. BOTH THE SUPPLIERS HAD MENTIONED EXACTLY SAME ADDRESS OF THE BILLED PARTY AND BOTH THE BILLS CONTAINED THE REMARK FREE DELY AT SITE AGAINST DELIVERY COLUMN OF THE BILL. IN VIEW THEREOF, TH E ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO BOTH THE PARTIES. ONE OF THE NOTICES ADDRESSED TO M/S. S.G. ENTERPRISES WAS RETURNED UNDELIVERED WITH THE POSTAL REMARKS NOT KNOWN RT TO SENDER. THE OTHER LETTER THOUGH MIGHT HAVE BEE N DELIVERED WAS NOT REPLIED. FURTHER, THE ASSESSING OFFICER ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO THE CREDITORS ON 16.11.2011 SEEKING CERTAIN INFORMATION I.E. COPY OF LEDGER ACCOUNTS OF THE ASSESSEE IN THEIR BOOKS, SALE BILL BOOKS MAINTAINED AND USED BY THEM FOR THE MONTHS FROM NOVEMBER, 2008 TO MARCH, 2009 , DETAILS OF TRADING ACCOUNTS IN RESPECT OF CABLES OF VARIOUS TYPES TRADED DURING THE YEAR AND NAME AND ADDRESSES OF TWO OTHER TOP PARTIES TO WHOM THE CABLES WERE SOLD DURING THE FINANCIAL YEAR. THE SUMMONS ISSUED TO M/S. S.G. ENTERPRISES WERE RECEIVED BACK UNDELIVERED AND THE SUMMONS ISSUED TO M/S. STEEL CRAFT WERE NOT REPLIED TO. THE ASSESSING OFFICER DURING THE ISSUED TO M/S. STEEL CRAFT WERE NOT REPLIED TO. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS PERIODICALLY COMMUNICATED THE RESPONSE OF TWO CREDITORS TO THE REPRESENTATIVES OF THE ASSESSEE . VIDE ORDER SHEET ENTRY DATED 22.11.2011 , THE ASSESSING OFFICER POINTED OUT THAT M/S. S.G. ENTERPRISES AND M/S. STEEL CRAFT APPEAR TO BE BOGUS CONCERNS OR THE BILLS SUPPLIED BY THEM WERE FAKE INSOFAR AS NO GOODS HAVE B EEN SUPPLIED AS PER THE BILLS . THE STRIKING SIMILARITIES OF THE BILLS WERE BROUGHT TO THE NOTICE OF THE ASSESSEE AND IT WAS POINTED OUT THAT THE PAYMENTS WERE MADE MUCH LATER IN FINANCIAL YEAR 2010 - 11 . THE ASSESSEE WAS SHOW CAUSED AS TO WHY THE SAID PURC HASES FROM THE SAID TWO CONCERNS SHOULD NOT BE TAKEN AS FAKE TO INFLATE THE PURCHASES . FURTHER, VIDE ORDER SHEET ENTRY DATED 25.11.2011 , THE ASSESSING OFFICER INTIMATED THE ASSESSEE THAT THE NOTICES UNDER SECTION 133(6) OF THE ACT AND THE SUMMONS UNDER SE CTION 131 OF THE ACT WERE RETURNED UN DELIVERED IN RESPECT OF M/S. S.G. ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 4 ENTERPRISES AND IN RESPECT OF M/S. STEEL CRAFT, NO RESPONSE WAS RECEIVED. FURTHER, IN ORDER TO VERIFY THE GENUINENESS OF THE TWO SUPPLIERS FIELD VISIT WAS MADE BY THE ASSESSING OFFICER AND IN R ESPECT OF M/S. S.G. ENTERPRISES, HADAPSAR, PUNE, THE ASSESSING OFFICER NOTED THAT THE LOCATION WAS FAR FROM THE CITY LIMITS AND WAS A NEWLY ESTABLISHED REGION WITH VERY FEW COMMERCIAL ESTABLISHMENTS. ON MARKING ENQUIRIES FROM VARIOUS DEPARTMENTS, THE WHEREABOUTS OF M/S. S.G. ENTERPRISES COULD NOT BE TRA C ED. THE SURVEY NO.37 I.E. THE PLACE WHERE M/S. S.G. ENTERPRISES HAS SHOWN ITS ADDRESS WAS UPCOMING AREA WHERE MANY CONSTRUCTION ACTIVITIES MAINLY OF RESIDENTIAL WERE GOING ON. FURTHER, THE TELEPH ONE NUMBERS MENTIONED ON THE BILLS OF M/S. S.G. ENTERPRISES SUBMITTED BY THE ASSESSEE HAD NO CONNECTIVITY. IN RESPECT OF THE OTHER CONCERN M/S. STEEL CRAFT AT 640, DATTAWADI, PUNE, THE LOCATION WAS A SHANTY / SLUM PLACE WITH FEW COMMERCIAL ESTABLISHMENTS. ON MARKING ENQUIRIES BY THE ASSESSING OFFICER FROM VARIOUS TRADERS, THE WHEREABOUTS OF M/S. STEEL CRAFT COULD NOT BE TRACED AND FURTHER, TELEPHONE NUMBERS ALSO MENTIONED ON CRAFT COULD NOT BE TRACED AND FURTHER, TELEPHONE NUMBERS ALSO MENTIONED ON THE BILLS HAD NO CONNECTIVITY. ALL THE ABOVE SAID FINDINGS WERE CONFRONTED TO TH E ASSESSEE VIDE ORDER SHEET DATED 16.12.2011 . THE ASSESSEE IN REPLY, PRODUCED COPY OF CONFIRMATION OF ACCOUNT BY M/S. S.G. ENTERPRISES. THE ASSESSING OFFICER IN VIEW OF THE ENTIRE EXERCISE WAS OF THE VIEW THAT FROM THE DISCUSSIONS MADE IN THE ABOVE PARAG RAPHS THE FOLLOWING POINTS EMERGE: 1) THE SUPPLY OF GOODS IN BIG AMOUNTS WITHOUT PAYMENTS FOR MORE THAN 15 MONTHS IS UNUSUAL. 2) THE OUTWARD APPEARANCE OF THE BILLS OF TWO DIFFERENT CREDITORS ARE STRIKINGLY SIMILAR WHICH INDICATES THESE TO BE HANDIWORK OF SAME PERSON / AGENCY. 3) NON - RESPONSE TO NOTICES ISSUED MAKES THE SUPPLY OF GOODS MORE DOUBTFUL. 4) ACTUAL PHYSICAL VERIFICATION OF THE LOCATIONS REVEALED NO EXISTENCE OF BUSINESS ESTABLISHMENTS SUPPOSED TO BE RUN BY THE CREDITORS. ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 5 5. THE ASSESSING OF FICER THUS, OBSERVED THAT THE BILLS ISSUED BY THE CREDITORS HAD BEEN USED TO INFLATE PURCHASES, WHICH IN TURN RESULTS IN DECREASE IN TAXABLE INCOME OF THE ASSESSEE. IN VIEW OF THE VERIFICATION CARRIED ON BY THE ASSESSING OFFICER, PURCHASES OF RS. 1,45,50,1 89/ - WERE CONSIDERED AS NON - GENUINE AND WERE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 6. THE CIT(A) AFTER TAKING NOTE OF THE ASSESSMENT PROCEEDINGS AND THE VARIOUS VERIFICATION EXERCISES TRIED TO BE CARRIED ON BY THE ASSESSING OFFICER A ND AFTER CONSIDERING THE REPLY OF THE ASSESSEE, WHICH IS INCORPORATED AT PAGES 5 TO 10 OF THE APPELLATE ORDER, NOTED THAT THOUGH THE ASSESSING OFFICER TRIED TO GATHER INFORMATION IN RESPECT OF TWO CREDITORS SHOWN BY THE ASSESSEE, BUT IN REPLY THE ASSESSEE MERELY FILED THE CONFIRMATION IN RESPECT OF M/S. S.G. ENTERPRISES, WHILE NO CONFIRMATION WAS FILED IN RESPECT OF M/S. STEEL CRAFT. IN VIEW OF THE FINDINGS OF THE ASSESSING OFFICER, THE CIT(A) OBSERVED THAT THERE VIEW OF THE FINDINGS OF THE ASSESSING OFFICER, THE CIT(A) OBSERVED THAT THERE WAS HEAVY ONUS PLACED UPON THE ASSESSEE TO EXPLAIN ITS POSITION TO THE SATISFACTION OF THE ASSESSING OFFICER BY WAY OF PRODUCING PARTIES AS WELL AS ESTABLISHING THE GENUINENESS OF THE TRANSACTIONS, WHICH HAD NOT BEEN DONE. IN REPLY, THE CLAIM OF THE ASSESSEE WAS THAT B OTH THE PARTIES WERE HAVING T AN NUMBERS AND THEY HA D FILED E - RETURNS AND THEREFORE THE ASSESSING OFFICER COULD HAVE VERY WELL VERIF IED THE GENUINENESS OF THE PARTIES FROM THE INFORMATION AVAILABLE ON PUBLIC DOMAIN. THE CIT(A) IN THIS REGARD OBSERVED THAT IN VIEW OF THE FACT THAT ONCE THE ASSESSING OFFICER HAD MADE HIS FINDING S KNOWN TO THE ASSESSEE, IT WAS INCUMBENT UPON THE ASSESSEE TO DISCHARGE HIS ONUS, WHICH HAD NOT BEEN DONE IN THE CASE. IN ANY CASE, HAVING TAN, PAN OR HAVING FILED RETURN OF INCOME ELECTRONICALLY, DOES NOT IPSO FACTO PROVE THE GENUINENESS OF THE TRANSACTIONS MADE, ESPECIALLY WHEN THE PARTIES WERE NOT AVAILABLE AT THE ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 6 GIVEN ADDRESSES AND THEIR PHONE NUMBERS WERE NOT WORKING AND THERE WAS NO REPLY TO THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT AS WELL AS SUM MONS UNDER SECTION 131 OF THE ACT. IN VIEW THEREOF, THE CIT(A) HELD THAT THERE WAS NO MERIT IN THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD. THE CIT(A) FURTHER DISTINGUISHED THE RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE AND VARIOUS DECISIONS AND POINTED OUT THAT IN THE PRESENT CASE, WHERE THE PARTIES ITS ELF WERE FOUND TO BE NON - EXISTING ON VERIFICATION MADE BY THE ASSESSING OFFICER, FOR WHICH, THE ASSESSEE HAS NO REPLY AND EVEN AT THIS STAGE, WHERE THE ASSESSEE IS NO T IN A POSITION TO PRODUCE PARTIES, AS IT CLAIMS THAT IT HAS NO CONTACTS WITH THE SAID PARTIES, THIS BEING THE CASE OF BOGUS PURCHASES, THERE IS NO MERIT IN THE CLAIM OF THE ASSESSEE. THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS REGARD WAS UPHELD AT RS.1.45 CRORES. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT BOTH THE SUPPLIERS WERE ASSESSED TO TAX AND THE EVIDENCES IN THIS REGARD WERE FURNISHED BEFORE THE AUT HORITIES BELOW. IN RESPECT OF ONE OF THE PARTIES I.E. M/S. S.G. ENTERPRISES, CONFIRMATION WAS ALSO FILED WHICH IS PLACED AT PAGE 51 OF THE PAPER BOOK. HOWEVER, THE OTHER CONCERN M/S. STEEL CRAFT DID NOT REPLY AND NO CONFIRMATION COULD BE FILED. OUR ATTE NTION WAS DRAWN TO THE DETAILS OF VAT RETURNS FILED BY THE ASSESSEE , WHICH REFLECTED PURCHASES FROM BOTH THE PARTIES. IT WAS STRESSED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT BOTH THE PARTIES WERE UNRELATED PARTIES AND BECAUSE OF ISS UE OF CONTRACT I.E. LAYING OF CABLES, PAYMENTS FROM THE CONTRACTOR WERE RECEIVED AFTER A DELAY AND THE PAYMENTS TO THE CREDITORS WERE ALSO DELAYED IN THIS REGARD. THE PAYMENTS ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 7 AGAINST THE GOODS PURCHASED W ERE MADE BY CHEQUE S AND ONE OF THEM FILED THE CONF IRMATION AND HAD ALSO DECLARED THE TURNOVER IN THE VAT RETURNS. ADMITTEDLY , BOTH THE PARTIES DID NOT RESPOND TO THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT OR THE SUMMONS UNDER SECTION 131 OF THE ACT, BUT THE SAID PARTIES WERE NOT IN THE CONTROL OF THE ASSESSEE AND HENCE, THE SAME COULD NOT BE PRODUCED BY THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE AFORESAID ADDITION WAS MADE BY THE ASSESSING OFFICER WITHOUT REJECTION OF BOOKS OF ACCOUNT. FURTHER , RELIANCE WAS PLACED UPON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERPRISES (P.) LTD. (2013) 35 TAXMANN.COM 384 (BOM) , HONBLE GUJARAT HIGH COURT IN CIT VS. M.K. BROTHERS (1987) TAXMANN 547 (GUJ) AND HONBLE BOMBAY H IGH COURT IN BABULAL C. BORANA VS. THIRD ITO (2005) 144 TAXMAN 674 (BOM) . 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN TURN 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN TURN RELYING ON THE FINDINGS OF ASSESSING OFFICER POINTED OUT THAT THE NOTICES / SUMMONS ISSUED TO THE SAID PARTIES WER E RETURNED AND THERE WAS HUGE CREDIT BALANCE OUTSTANDING, WHICH WAS REPAID AFTER GAP OF ONE FINANCIAL YEAR. EVEN THE ASSESSING OFFICER WENT TO THE PREMISES OF THE SAID CREDITORS, BUT NONE WERE FOUND AT THE RESPECTIVE ADDRESSES NOR THE IR WHEREABOUTS WERE K NOWN . IN RE SPECT OF RELIANCE PLACED ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERPRISES (P.) LTD. (SUPRA) , THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE FACTS OF THE CASE WERE DISTINCT , WHEREIN BEFORE THE HON BLE HIGH COURT, ALL THE DETAILS WERE FILED, BUT THERE WAS NO APPEARANCE BY THE CONCERNED PARTY AND IN SUCH CIRCUMSTANCES, THE HONBLE BOMBAY HIGH COURT HELD THAT THE SAID PURCHASES WERE GENUINE. IN RESPECT OF RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 8 REPRESENTATIVE FOR THE ASSESSEE IN CIT VS. M.K. BROTHERS (SUPRA) I.E. THE RATIO LAID DOWN BY THE HON BLE GUJARAT HIGH COURT , THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE FACTS OF THE CASE WERE ALSO AT VARIANCE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD UNDERTAKEN SUB - CONTRACT FROM M/S. S.T. ELECTRICALS PVT. LTD. (MAIN CONTRACTOR), WHICH WAS RECEIVED BY IT FROM MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. , A GOVERNMENT OF MAHARASHTRA ENTERPRISE. THE SAID CONTRACT WAS FOR SUPPLY AND ERECTION OF CABLES. THE ASSESSEE HAS PLACED THE COPY OF WORK ORDER AT PAGE 78 WITH ANNEXURE AT PAGE 79 AND TECHNICAL SPECIFICATIONS AT PAGE 80 OF THE PAPER BOOK. THIS JOB ORDER WAS DATED 24.11.2008 WHICH WAS FOR SUPPLY, INSTALLATION AND ERECTION OF CABLES AND POLES TO VARIOUS SITES AT PCMC AND PUNE. THE ITEMS FOR SUPPLY AND ERECTION ARE CLEARLY MENTIONED THEREUNDER. ANOTHER WORK / ITEMS FOR SUPPLY AND ERECTION ARE CLEARLY MENTIONED THEREUNDER. ANOTHER WORK / JOB ORDER DATED 20.01.2009 WAS ISSUED BY THE SAID CONCERN TO THE ASSESSEE FOR SUPPLY, INSTALLATION AND ERECTION OF CABLES AND POLES AT VARIOUS SITES AT PCMC AND PUNE. THE COPY OF THE SAID WORK / JOB ORDER ALONG WITH ANNEXURE ARE PLACED AT PAGES 81 TO 83 O F THE PAPER BOOK. ANOTHER WORK / JOB ORDER WAS ISSUED ON 05.03.2009 BY THE SAID CONCERN TO THE ASSESSEE AGAIN FOR SUPPLY, INSTALLATION AND ERECTION OF CABLES AND POLES ON VARIOUS SITES AT PCMC AND PUNE. THE COPY OF THE WORK / JOB ORDER IS PLACED AT PAGE 84 OF THE PAPER BOOK WITH SPECIFICATIONS AT PAGES 85 AND 86 OF THE PAPER BOOK. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD TAKEN CONTRACT WORTH RS. 2,19,12,544/ - . FURTHER, THERE WERE SECOND SALES TO THE TUNE OF RS. 1,15,97,020/ - . IN ORDER TO EXECUTE THE CONTRACT OF SUPPLY, INSTALLATION AND ERECTION OF CABLES, THE ASSESSEE CLAIMS TO HAVE BOUGHT THE MATERIALS FROM DIFFERENT PARTIES INCLUDING TWO PARTIES ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 9 I.E. ONE M/S. S.G. ENTERPRISES FOR TOTALING RS. 91,90,787/ - AND ANOTHER M/S. STEEL CRAFT TOTALING RS. 53,59,402/ - . THE ASSESSEE HAS FURNISHED ON RECORD THE DETAILS OF SUPPLIES MADE BY THE SAID CONCERNS I.E. QUANTITY - WISE , RATES AND THE TOTAL AMOUNTS, WHICH ARE PLACED ON RECORD. THE ASSESSEE HAS ALSO FURNISHED DETAILS OF THE PURCHASES MADE BY IT FROM DIFF ERENT CONCERNS TOTALING RS. 2,42,25,393/ - . THE ASSESSING OFFICER HAS ACCEPTED THE PURCHASES MADE BY THE ASSESSEE FROM ALL THE CONCERNS EXCEPT FROM M/S. S.G. ENTERPRISES AND M/S. STEEL CRAFT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFIC ER HAD SOUGHT INFORMATION UNDER SECTION 133(6) OF THE ACT FROM THE SAID PARTIES AND HAD ALSO ISSUED SUMMONS TO THEM UNDER SECTION 131 OF THE ACT. H OWEVER, IN RESPONSE, NO INFORMATION OR NO REPLY WAS FILED BY THE SAID CONCERNS. THE NOTICES / SUMMONS TO M/ S. S.G. ENTERPRISES WERE RETURNED BACK. HOWEVER, SUMMONS W AS DELIVERED TO M/S. STEEL CRAFT, BUT AGAIN NO REPLY FROM THE SAID CONCERN WAS RECEIVED . THE ASSESSING OFFICER ASKED TO THE ASSESSEE TO PRODUCE THE SAID PARTIES AND ALSO TO FURNISH COMPLETE EVIDEN CE IN THIS REGARD. THE ASSESSEE HAD PARTIES AND ALSO TO FURNISH COMPLETE EVIDEN CE IN THIS REGARD. THE ASSESSEE HAD PRODUCED THE BILLS IN RESPECT OF THE SAID PARTIES. HOWEVER, THE ASSESSING OFFICER NOTED THAT FONT SIZE OF THE BILLS ISSUED BY BOTH THE CONCERNS WERE IDENTICAL AND COULD NOT BE RELIED UPON. THE MAIN OBJECTION OF THE AS SESSING OFFICER IN THIS REGARD WAS THAT THE ASSESSEE HAD NOT PAID THE SAID PARTIES FOR THE PURCHASES MADE FROM THE SAID CONCERNS UP TO YEAR 2010. THE CASE OF THE ASSESSEE IN THIS REGARD WAS THAT SINCE IT WAS LAYING CABLES AS PER THE SUB - CONTRACT AND THERE WERE SOME DISPUTES FOR MEASURING OF THE CABLES AND CONSEQUENTLY, PAYMENTS FROM THE SAID CON TRACTORS WERE DELAYED. AS SOON AS THE PAYMENTS WERE RECEIVED FROM M / S. S.T. ELECTRICALS PVT. LTD. IN MARCH, 2010, IMMEDIATELY, CHEQUES WERE ISSUED ON 31.03.2010 . ALL THE PAYMENTS TO THE SAID PARTIES WERE PAID BY CHEQUE AND IT IS NOT THE CASE OF THE REVENUE THAT THE MONEY HAS TRAVELLED BACK TO THE ASSESSEE. OUR ATTENTION WAS DRAWN TO THE ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 10 COPIES OF BILLS ALONG WITH DELIVERY CHALLANS ISSUED BY M/S. S.G. ENTERPRISES A ND M/S. STEEL CRAFT, WHICH ARE PLACED AT PAGES 11 TO 35 OF THE PAPER BOOK. THE PER USAL OF THE SAID BILLS REFLECT THE COMPLETE DETAILS IN RESPECT OF ITEMS SOLD BY THE SAID CONCERN S ALONG WITH QUANTITY, RATE AND THE AMOUNT TO BE PAID AND ALSO V AT TO BE CHAR GED ACCORDINGLY. TO EACH BILL IS ATTACHED THE DELIVERY CHALLANS, IN WHICH IT IS MENTION ED THAT FREE DELIVERY AT SITE, BUT THE MODE OF TRANSPORT I.E. VEHICLE NUMBER IS MENTIONED IN EACH OF THE BILL . FURTHER, THERE IS NOTING O N EACH BILL, CHEQUE NUMBER A ND THE DATE OF THE CHEQUE I.E. DATE ON WHICH THE PAYMENT WAS MADE TO THE SAID CONCERNS BILL - WISE. THE ASSESSEE IN ASSESSMENT PROCEEDINGS HAD FURNISHED ON RECORD THE CONFIRMATION FROM ONE OF THE PARTIES I.E. M/S. S.G. ENTERPRISES, WHO ADMITTED TO HAVE MADE THOSE AFORESAID SUPPLIES TO THE ASSESSEE. THE PAN NUMBER OF THE SAID CONCERN WA S ALSO AVAILABLE ON RECORD, WHICH IS PLACED AT PAGE 51 OF THE PAPER BOOK. FURTHER, BOTH THE CONCERNS WE RE REGISTERED WITH THE SALES TAX DEPARTMENT AND THE VAT DETAILS HAVE BE EN GENERATED BY THE ASSESSEE AND PLACED AT PAGES 52 AND 53 OF THE HAVE BE EN GENERATED BY THE ASSESSEE AND PLACED AT PAGES 52 AND 53 OF THE PAPER BOOK. THE AFORESAID DETAILS REFLECT THE ASSESSEE TO HAVE FURNISHED THE RETURN OF INCOME FOR VAT FROM YEAR TO YEAR AND THE FREQUENCY UNDER WHICH IT WAS SUBMITTED. THE ASSESSEE DURING THE COURSE OF HEARING S FURTHER PLACED THE COPY OF PAN DETAILS DOWNLOADED FROM THE WEBSITE OF INCOME - TAX DEPARTMENT, IN WHICH THE JURISDICTIONAL DETAILS OF BOTH THE CONCERNS ARE AVAILABLE. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS H AD REJECTED THE STAND OF THE ASSESSEE AND HAD TREATED THE PURCHASES AS BOGUS , IN VIEW OF THE INVESTIGATION MADE BY HIM BY VISITING THE PREMISES I.E. THE ADDRESSES OF THE RESPECTIVE PARTIES MENTIONED ON THE BILLS. THE REPORT OF THE ASSESSING OFFICER IN THI S REGARD WAS THAT DESPITE ENQUIRIES, THE SAID TWO ADDRESSES COULD NOT BE FOUND AT THAT ADDRESSES NOR ANY PERSON ADMITTED TO HAVE DEALT WITH THE SAID CONCERNS. ADMITTEDLY, THERE ARE CERTAIN EVIDENCES AGAINST THE ASSESSEE. ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 11 HOWEVER, THERE ARE OTHER EVIDENCE S FILED BY THE ASSESSEE, WHICH VERY CLEARLY ESTABLISHES THE EXISTENCE OF THE SAID CONCERNS. THE FIRST AND FOREMOST IS THE PAN NUMBER ISSUED TO THE TWO CONCERNS, WHICH IS THE EVIDENCE OF DEPARTMENT ITSELF. SECONDLY, THE ASSESSEE HAS FURNISHED COMPLETE INV OICES AND THE DELIVERY CHALLANS AND ALSO THE MODE OF PAYMENT OF THE CONSIDERATION DUE TO THE SAID PARTIES . THOUGH THE SAID PAYMENT S W ERE MADE AFTER DELAY ED PERIOD, BUT THERE WERE REASONS BEHIND IT THAT THE PAYMENTS WERE NOT RELEASED TO THE ASSESSEE IN RES PECT OF THE SAID SUB - CONTRACT AND HENCE, THE DELAY IN MAKING THE PAY MENTS TO THE SAID CONCERNS. HOWEVER, THE SAID PAYMENTS WERE MADE BEFORE DATE OF ASSESSMENT ORDER, WHICH WAS PASSED ON 16.12.2011 . FURTHER, THE ASSESSEE DURING THE COURSE OF HEARING HAS T RIED TO RECONCILE THE DETAILS OF WORKS CONTRACT SUPPLIED PARTY - WISE VIS - - VIS CONSUMPTION OF VARIOUS ITEMS. THE ASSESSEE HAS FURNISHED SAMPLE DETAILS IN THIS REGARD AND HAS ALSO POINTED OUT THAT VAT DETAILS CLEARLY REFLECT THE PURCHASES MADE FROM THE SAID CONCERNS. FURTHER, THE ASSESSEE HAS PLACED ON RECORD THE COPY OF BANK STATEMENT FOR THE FURTHER, THE ASSESSEE HAS PLACED ON RECORD THE COPY OF BANK STATEMENT FOR THE RELEVANT PERIOD, UNDER WHICH THE PAYMENTS TO THE SAID PARTIES HAVE BEEN RELEASED IN THE MONTH OF APRIL, 2010, AGAINST CHEQUE S ISSUE D AT THE CLOSE OF M ARCH, 2010. THE ASSESSEE HAS MADE PURCHASES FROM THE SAID PARTIES, WHICH ARE ENTERED IN ITS BOOKS OF ACCOUNT, WHICH WERE NOT REJECTED BY THE ASSESSING OFFICER AND BOOK RESULTS HAVE BEEN ACCEPTED. FURTHER, THE SAID PURCHASES WERE OF CABLES, WHICH IN TURN HAVE BEEN SUPPLI ED TO STATE UNDERTAKING AS P ART OF SUB - CONTRACT UNDERTAKEN. 11. THE HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERPRISES (P.) LTD. (SUPRA) HA D LAID DOWN THE PROPOSITION THAT A PRAGMATIC VIEW HAS TO BE TAKEN WHERE THE SALES OF THE PURCHASED GOOD S WERE NOT DOUBTED AND WHERE SUBSTANTIAL AMOUNT OF SALES WERE MADE BY THE ASSESSEE TO GOVERNMENT ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 12 DEPARTMENT. FURTHER, WHERE THE BOOKS OF ACCOUNT OF THE ASSESSEE HAD NOT BEEN REJECTED, BUT MERELY BECAUSE SUPPLIERS HAD NOT APPEARED BEFORE THE ASSESSING OFFI CER OR CIT(A), IT COULD NOT BE CONCLUDED THAT THE PURCHASES WERE NOT MADE BY THE ASSESSEE. 12. THE HONBLE GUJARAT HIGH COURT IN CIT VS. M.K. BROTHERS (SUPRA) HAS FURTHER LAID DOWN THAT EVEN IN CASES, WHERE THE PAYMENTS WERE SHOWN TO HAVE BEEN MADE AFTE R SUBSTANTIAL LAPSE OF TIME AFTER DATE OF PURCHASE, THE SAID PURCHASES COULD NOT BE HELD TO BE BOGUS ON THE GROUND THAT THERE WAS NO EVIDENCE TO SHOW THAT VOUCHERS GIVEN BY THOSE PARTIES TO THE ASSESSEE WERE BOGUS OR THAT ANY PART OF THOSE PAYMENT S CAME BA CK TO THE ASSESSEE. ANOTHER RELIANCE PLACED UPON BY THE ASSESSEE WAS ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN BABULAL C. BORANA VS. THIRD ITO (SUPRA) , WHEREIN IT WAS HELD THAT IN CASES WHERE THE BOOKS OF ACCOUNT OF THE ASSESSEE HAD NOT BEEN REJECTE D BY THE ASSESSING OFFICER AND WHERE THE ADDITION WAS BASED ON ENTRIES MADE IN THE ASSESSING OFFICER AND WHERE THE ADDITION WAS BASED ON ENTRIES MADE IN THOSE BOOKS OF ACCOUNT, IT COULD BE SAID THAT THE TRANSACTIONS BETWEEN THE ASSESSEE AND PURCHASER AND THE PARTY FROM WHOM GOODS WERE PURCHASED, WERE GENUINE. 1 3 . APPLYING THE ABOVE SAID RATIOS TO THE FACTS OF THE PRESENT CASE, WE ARE OF THE CONSIDERED VIEW THAT IN THE FACTS OF THE PRESENT CASE, WHERE BOOKS OF ACCOUNT OF THE ASSESSEE HA D NOT B EEN REJECTED AND IN VIEW OF SUBSTANTIAL EVIDENCE FILED BY THE ASSESSEE IN ORDER TO EST ABLISH THE PURCHASES MADE FROM THE SAID PARTIES AND WHERE PAYMENTS TO THE SAID CONCERNS HAVE BEEN MADE BY CHEQUE , THOUGH AFTER GAP OF TIME AND WHERE NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT THE CASH HAS TRAVELLED BACK TO THE ASSESSEE, THERE IS NO MERIT IN THE ORDERS OF AUTHO RITIES BELOW IN HOLDING THE AFORESAID PURCHASES TO BE ITA NO. 1 502 /PN/20 1 3 SIDDARTH ENGINEERING CORPORATION 13 BOGUS. ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) IN THIS REGARD AND DIRECT THE ASSESSING OFFICER TO ALL OW THE CLAIM OF PURCHASES AT 1,45,50,189/ - . THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 1 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 29 TH DAY OF DECEM BER , 2015. SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 29 TH DECEM BER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE A PPELLANT ; 2. / THE RESPONDENT; 2. 3. ( ) / THE CIT (A) - V , PUNE ; 4. / THE CIT - V , PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE