DCIT,Circle-1(1), Kolkata, Kolkata V. M/s Mcnally Bharat Engineering Company Limited, Kolkata

ITA 1968/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1899 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P MUKHERJEE
• Assessee Lawyers: P K RAI ACA; MRS TRISHNA SHARMA
• Keywords: Unexplained investment; Reasonable cause; Assessment record
• Section: 69C; 143(3); 133(6)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 196 8 / KOL / 20 16 ASSESSMENT YEAR :2005-06 DCIT, CIRCLE-1(1), P-7, CHOWRINGHEE SQUARE, R. NO.20, 7 TH FLOOR, KOLKATA-69 V/S . M/S MCNALLY BHARAT ENGINEERING CO. LTD., 4, MANGOE LANE, 7 TH FLOOR, KOLKATA-001 [ PAN NO.ABCM 9443 R ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI P. MUKHERJEE ADDL CIT-DR /BY RESPONDENT MRS. TRISHNA SHARMA, & MR. P.K. RAI, ACA /DATE OF HEARING 14-08-2018 /DATE OF PRONOUNCEMENT 31-08-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2005-06 A RISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-1,KOLKATAS OR DER DATED 29.07.2016, PASSED IN CASE NO.549/CIT(A)-1/WARD-1(2)/2008-09, R EVERSING THE ASSESSING OFFICERS ACTION DISALLOWING / ADDING ASSESSEES CL AIM OF PF / ESI ON ACCOUNT OF DELAYED PAYMENT, DISCREPANCY IN VARIOUS TRANSAC TIONS LEADING TO SECTION 69C ADDITION OF UNEXPLAINED INVESTMENT PERTAINING T O SUB-CONTRACTOR PAYMENTS, EXPENDITURE OF PAYMENT TO SUB-CONTRACTORS INVOLVING CORRESPONDING FIGURE OF 20,06,017, 16,52,726/- AND 46,04,963/-; RESPECTIVEL Y, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE COME TO FIRST ISSUE OF CORRECTNESS OF SECTIO N 36(1)(VA) R.W. 2(24)X_ DISALLOWANCE / ADDITION OF ASSESSEES EMPLOYEES CO NTRIBUTION TOWARDS PF / ITA NO.1968/KOL/2016 A.Y.2005-06 DCIT, CIR-1(1), KOL. VS. M/S MCNALLY BH ARAT ENGINEERING CO. LTD. PAGE 2 ESI ON ACCOUNT OF ITS BELATED PAYMENT BEYOND THE G RACE PERIOD BUT BEFORE THE DUE DATE OF FILING RETURN. SUFFICE TO SAY, THE HON' BLE JURISDICTIONAL HIGH COURTS DECISION IN M/S AKZO NOBEL INDIA LTD. VS. CIT ITA NO.110 OF 2011 DECIDED ON 14.06.2016 HAS ALREADY HELD SUCH CLAIM OF PF / ESI DUES PAID BELATEDLY BEFORE THE DUE DATE OF FILING RETURN; IN ASSESSEE S FAVOUR AS PER CIT(A)S DETAILED DISCUSSION UNDER CHALLENGE. THE REVENUE FA ILS TO INDICATE ANY DISTINCTION ON FACTS OR LAW AND FACTS. WE THUS FIND NO MERIT IN THE INSTANT FIRST SUBSTANTIVE GROUND RAISED AT REVENUES BEHEST. THE SAME IS THEREFORE REJECTED. 3. THE REVENUES SECOND SUBSTANTIVE GROUND SEEKS TO REVIVE ASSESSING OFFICERS ACTION MAKING U/S 69C ADDITION OF UNEXPLA INED INVESTMENT OF 16,52,726/- ON ACCOUNT OF DISCREPANCIES PERTAINING TO TAXPAYERS SUB- CONTRACTOR PAYMENTS. RELEVANT CIT(A)S DISCUSSION QUA THE INSTANT SECOND ISSUE READS AS UNDER:- A. BRIEF FACTS: 1.0 DURING THE YEAR UNDER CONSIDERATION, ASSESSEE H AD DEBITED RS.57.94 CRORES ON ACCOUNT OF OUTSOURCING EXPENSES FOR JOB W ORK. COMPLETE DETAILS OF THE SAID EXPENSES ALONGWITH NAME OF THE CONTRACTOR, ADDRESS, AMOUNT DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 22-11-2007. THE SAID DETAILS COMPRISED OF MORE THAN 300 SUB- CONTRACTORS TO WHOM THE JOB CHARGES WERE PAID BY TH E ASSESSEE ON ACCOUNT OF VARIOUS CONTRACTUAL JOBS UNDERTAKEN IN V ARIOUS PARTS OF THE COUNTRY. COMPLETE DETAILS OF THE PARTIES ALONGWITH ADDRESS OF THE PARTIES WERE FURNISHED BEFORE AO. 1.1 IN ORDER TO VERIFY THE ABOVE TRANSACTIONS, THE AO CALLED FOR INFORMATION U/S. 133(6) OF THE ACT FROM VARIOUS SUB CONTRACTORS WITH WHOM THE ASSESSEE HAD ENTERED INTO TRANSACTION WITH RESPECT TO JOB WORK ON SUBCONTRACT BASIS. MAJORITY OF THE PARTIES FROM WHOM INFORMATION WAS ASKED FOR HAD THEIR ADDRESSES IN TH E REMOTE AREAS I.E. AT VARIOUS SITES IN THE RURAL AREA WHERE PROJECTS A RE UNDERTAKEN AND GENERALLY DO NOT HAVE ANY FIXED BASE OF ESTABLISHME NT. 1.2 THE SAID PARTIES DULY FURNISHED THE INFORMATION AS ASKED FOR BY THE AO DIRECTLY TO THE OFFICE OF THE AO. HOWEVER, W.R.T . FEW PARTIES, THE AMOUNT CLAIMED BY THE ASSESSEE AS EXPENDITURE INCUR RED DURING THE YEAR DID NOT RECONCILE WITH THE DETAILS AS FILED BY THE SAID PARTIES TO THE AO. DURING THE COURSE OF HEARING, THE AO RAISED FUR THER QUERIES AND ASSESSEE WAS ASKED TO RECONCILE THE DISCREPANCIES A S OCCURRING IN THE ACCOUNTS OF THE ASSESSEE AND THE INFORMATION PROVID ED BY THE PARTIES TO THE AO. THE ASSESSEE VIDE ITS LETTERS DATED 17-1 2-2008 & 19-12-2008 RECONCILED ALL THE DISCREPANCIES AS POINTED BY THE AO AND ALSO FILED LEDGER ACCOUNT OF ALL THE PARTIES AS APPEARING IN I TS BOOKS OF ACCOUNT ITA NO.1968/KOL/2016 A.Y.2005-06 DCIT, CIR-1(1), KOL. VS. M/S MCNALLY BH ARAT ENGINEERING CO. LTD. PAGE 3 AND ALSO RECONCILIATION STATEMENT WITH THE PARTIES SHOWING THE REASONS FOR DISCREPANCY ALONGIWTH DETAILED REASONS FOR THE DIFFERENCES. 4. THE REVENUES ONLY CONTENTION AS PER ITS CORRESP ONDING SUBSTANTIVE GROUND IS THAT CIT(A) HAS ADMITTED ADDITIONAL DETAI LS DURING THE COURSE OF LOWER APPELLATE PROCEEDING IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES AND TO WITHOUT SEEKING REMAND REPORT FROM THE ASSES SING OFFICER. WE FIND NO MERIT IN THE INSTANT SOLE TECHNICAL ARGUMENT. IT HA S COME ON RECORD THAT ASSESSEE HAD VERY WELL RECONCILED THE DIFFERENTIAL FIGURE(S) REGARDING THE FORMER THREE PARTIES SURINDRA ENGG. CO. LTD., VIN EENGINEER ENTERPRISE AND GURUNANAK CONSTRUCTION. IT EMERGES FROM THE PAPER B OOK THAT ALL THESE DETAILS ALREADY FORMED PART OF ASSESSMENT RECORDS I.E. AT P AGES NO. 32, 35 TO 44, 47, 55, 15, 16, 37 AND 50, 22 & 23. LEARNED DEPARTMENTA L REPRESENTATIVE FAILS TO DISPUTE THE FACT THAT CIT(A) HAD ALSO CALLED FOR AS SESSING OFFICERS COMMENTS AND WAITED THEREAFTER FOR ABOUT TWO YEARS FROM 24.0 4.2014 WHICH WAS NEVER RESPONDED. THIS TRIBUNALS CO-ORDINATE BENCHS DECI SION IN JCIT(OSD) VS. M/S KALAMKARI DESIGNS PVT. LTD . ITA NO.1310/KOL/2016 DATED 11.05.2018 HOLDS IN SIMILAR CIRCUMSTANCES THAT NOTHING CAN PREVENT THE CIT(A) FROM EXAMINING THE RELEVANT EVIDENCE ON HIS OWN. WE THUS DECLINE REVEN UES SECOND SUBSTANTIVE INSTANT GROUND AS WELL. 5. THIS LEAVES US REVENUES LAST SUBSTANTIVE GRIEVA NCE THAT CIT(A) HAS ERRED IN REVERSING THE ASSESSMENT FINDINGS DISALLOW ING EXPENDITURE PAYMENTS TO SUB-CONTRACTORS TO BE TUNE OF 46,04,963/- WITH THE FOLLOWING DETAILED DISCUSSION:- GROUND NO.4: THIS GROUND RELATES TO THE DISALLOWAN CE OF AN AMOUNT OF RS.46,04,963/- ON ACCOUNT OF NON-SERVICE OF LETTER SENT TO A PARTY U/S. 133(6) TO WHOM PAYMENT OF SUB-CONTRACTORS CHARGES HAS BEEN MA DE DURING THE RELEVANT FINANCIAL YEAR. THAT ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, THE AO ERRED IN HOLDING THAT THE ASSESSEE HAS NOT FURNISHED WHERE A BOUT THE SAID PARTY DURING THE COURSE OF ASSESSMENT AS REQUIRED BY THE AO TO SEND THE NOTICE U/S. 133(6). THE AO DEALT WITH THIS ISSUE IN THE ASSESSMENT ORDE R AS UNDER: DISALLOWANCE DUE TO NOTICE RETURNED UNSERVED FROM PARTIES. OUT OF VARIOUS PARTIES TO WHOM, REFERENCE U/S. 133( 6) WAS MADE BY THIS OFFICE, NOTICE ISSUED TO M/S ALSTOM LIMITED NOIDA AT THE GIVEN ADDRESS HAS BEEN RETURNED BY THE POSTAL AUTHORITIES. THE ASSESSEE WA S REQUESTED TO GIVE NECESSARY EXPLANATIONS. IN REPLY, THE ASSESSEE HAS SUBMITTED THAT NON- SERVICE OF LETTER TO A PARTY BY THE POSTAL AUTHORIT IES CANNOT BE A GROUND FOR ITA NO.1968/KOL/2016 A.Y.2005-06 DCIT, CIR-1(1), KOL. VS. M/S MCNALLY BH ARAT ENGINEERING CO. LTD. PAGE 4 DISALLOWANCE. THE EXPLANATION OF THE ASSESSEE IS NO T ACCEPTED SINCE THE WHEREABOUTS OF THE SAID PARTY HAS NOT BEEN FURNISHE D. THEREFORE, THE EXPENDITURE CLAIMED FOR RS.46,04,963/- ON ACCOUNT O F SUB CONTRACTOR CHARGES PAID/PAYABLE TO THE ID PARTY BY THE ASSESSEE IN THE FINANCIAL YEAR 2004-05 IS DISALLOWED AND ADDED BACK FOR THE COMPUTATION OF TO TAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-06. THE APPELLANTS AR MADE WRITTEN SUBMISSIONS AS UNDE R: BRIEF FACTS : 1.0 AS SUBMITTED IN EARLIER GROUND, DURING THE CURS E OF ASSESSMENT PROCEEDINGS, THE AO HAS ISSUED SEVERAL NOTICES U/S.133(6) OF THE ACT TO VARIOUS PARTIES WITH WHOM ASSESSEE HAD ENTERED INTO SUB CONTRACT DURING THE R ELEVANT ASSESSMENT YEAR. 1.1 HOWEVER, ONE OF THE NOTICE U/S. 133(6) SENT IN THE NAME OF M/S ALSTOM LTD., NOIDA WAS RETUNED UNSERVED. THE ASSESSEE WAS ASKED TO EXP LAIN THE REASONS THEREOF. THE ASSESSEE, VIDE LETTER DATED 19-12-2008, EXPLAINED T O THE ASSESSING OFFICER THAT NOTICE SENT TO THE ABOVE PARTY COULD NOT BE SERVED SINCE THE NAME OF THE ABOVE PARTY HAS SUBSEQUENTLY CHANGED FROM M/S ALSTOM LTD., NOI DA TO AREVA T&D :LTD.. IT WAS FURTHER REQUESTED TO THE AO TO RESEND THE NOTICE TO THE ABOVE PARTY ADDRESSING IT BY ITS CHANGED NAME. B. CONTENTION OF A.O 1.0 THE LEARNED. AO DISREGARDED SUBMISSION FILED BY THE ASSESSEE, AND DISALLOWED THE EXPENDITURE OF RS.46,04,963/- ON ACCOUNT OF SU B-CONTRACT CHARGES PAID TO M/S ALSTOM LTD. SINCE THE NOTICE ISSUED AT THE GIVEN AD DRESS WAS RETURNED BY THE POSTAL AUTHORITIES UNSERVED. C. SUBMISSION: 1.0 DISALLOWANCE MADE ON THE CONTENTION THAT ASSESS EE IS UNABLE TO PROVE GENUINENESS OF CLAIM IS INCORRECT. 1.1 IN THIS REGARD, IT IS HUMBLY SUBMITTED BY THE A SSESSEE THAT TRANSACTION ENTERED BY IT WITH THE PARTY CANNOT BE REGARDED AS INGENUINE M ERELY ON ACCOUNT OF THE FACT THAT NOTICE SERVED TO ONE OF THE PARTIES RETURNED UNSERV ED. DURING THE CURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SUBMITTED THE COPY OF LEDGER ACCOUNT OF THE PARTY IN THE BOOKS OF THE ASSESSEE. COY OF THE LETTER ALONGWITH THE LEDGER ACCOUNT IS ENCLOSED HEREWITH AND MARKED AS ANNEXURE-4 . THE LEDGER ACCOUNT ITSELF SHOULD SUFFICE THE GENUINENESS OF TRANSACTION. 2.0 MERE FACT THAT NOTICE U/S. 1`33(6) RETURNED UNS ERVED COULD NOT BE THE BASIS FOR DISALLOWANCE.: 2.1 MERELY ON ACCOUNT OF THE FACT THAT THE NOTICE U/S. 133(6) SEND TO THE ABOVE PARTY WAS RETURNED UNSERVED DOES NOT NECESSARILY MEAN THA T THE TRANSACTION WITH THE SAID PARTY IS NOT GENUINE AND HENCE AMOUNT CLAIMED AS EX PENDITURE ON ACCOUNT OF PAYMENT MADE TO SAID PARTY CANNOT BE DISALLOWED. TH E ABOVE VIEW IS SUPPORTED BY THE DECISION OF SAGAR BOSE VS. ITO (1996) 56 ITD 561 (KOL) WHEREIN THEE HON'BLE JURISDICTIONAL TRIBUNAL HELD THAT SINCE THE ASSESSI NG OFFICER. NEITHER MADE ANY ENQUIRY FROM BANK AUTHORITIES TO FIND OUT FINAL DES TINATION OF MONEY NOR ENQUIRED FROM SALES TAX DEPARTMENT ABOUT PERSONS TO WHOM RELEVANT SALES TAX REGISTRATION NUMBER WAS ALLOTTED, ALSO DID NOT FIND ANY DEFECT AND IRRE GULARITY IN STATEMENTS, BOOKS OF ACCOUNT AND BILLS ETC. PRODUCED BY ASSESSEE HE WAS UNJUSTIFIED IN TREATING PURCHASE AS BOGUS AND MAKING ADDITION MERE ON THE CONTENTION THAT THE PARTIES NOT TRACEABLE AT ADDRESSES GIVEN BY THE ASSESSEE. THUS THE ORDERE D OF THE CIT(A) WAS QUASHED. 2.2 FURTHER, IN THE CASE OF CIT VS- GP INTERNATIO NAL LTD. (2010) 325 25 (P&H) IT WAS HELD THAT THE AO HAVING NOT DOUBTED THE IDENTITY OF THE PERSONS FROM WHOM THE ASSESSEE COMPANY HAS SHOWN RECEIPT OF HARE APPLICAT ION MONEY, IMPUGNED TRANSACTIONS CANNOT BE TREATED AS NON-GENUINE MEREL Y BECAUSE SOME OF THE APPLICANT DID NOT RESPOND TO THE NOTICE ISSUED BY THE AO U/S 133(6) AND, THEREFORE, ADDITION WAS NOT SUSTAINABLE. ITA NO.1968/KOL/2016 A.Y.2005-06 DCIT, CIR-1(1), KOL. VS. M/S MCNALLY BH ARAT ENGINEERING CO. LTD. PAGE 5 2.3 FURTHER, HON'BLE BOMBAY HIGH COURT IN CASE OF C IT VS. GOODLASS NEROLAC PAINTS LTD. (1991) 188 ITR 1 (BOM) HAS HELD THAT TH E CONSEQUENCES OF NO-COMPLIANCE WITH THE PROVISIONS OF SEC. 133(4) IS THE LIABILITY TO PAY PENALTY AND NOT THE DISALLOWANCE OF THE CLAIM FOR DEDUCTION ON THAT GRO UND. THE ACT DOES NOT SEEM TO PROVIDE THAT IF INFORMATION U/S133(4) IS NOT FURNIS HED, THE CLAIM FOR DEDUCTION CAN BE DISALLOWED ON THAT GROUND. THE RELEVANT PROVISION O F THE ACT IS SEC. 272(2)(A) WHICH PROVIDES THAT IN CASE A PERSON, WITHOUT REASONABLE CAUSE OR EXCUSE, FAILS TO FURNISH INFORMATION AS REQUIRED U/S. 133, HE SHALL BE LIABL E TO PAY, BY WAY OF PENALTY, A SUM WHICH MAY EXTEND TO RS.10,000/- FOR EVERY DAY DURIN G WHICH THE FAILURE CONTINUES. APPLYING THE SAME RATIO IN THE ASSESSEES CASE IT C AN BE SAID THAT SIMPLY BECAUSE OF THE FACT THAT DEPARTMENT COULD NOT HAVE ACCESS TO I NFORMATION ASKED FOR U/S. 133(6), IT CANNOT DISALLOW THE IMPUGNED AMOUNT. THEREFORE, MER ELY BECAUSE THE SAID PARTY DID NOT RESPOND TO NOTICE U/S. 133(6) DOES NOT MEAN THA T THE PARTY DOES NOT EXIST OR THE CLAIM OF THE ASSESSEE IS NOT GENUINE. 2.4 ABOVE PRINCIPLE HAS ALSO BEEN UPHELD IN THE FOL LOWING DECISION:- - ACIT VS. ADAM EXPORTS 9ITA NO.1177/MUM/2009 DTD. 25-11-2011)(MUM-TRIBUNAL) - ACIT VS. ROYAL MANORS HOTELS IND. LTD. (ITA NO.25 77/AHD/2003 DTD. 24-06-2009) (AHD-TRIBUNAL) 2.5 THEREFORE, FROM THE ABOVE JUDGMENTS IT IS CLEAR THAT MERELY BECAUSE A PARTY DID NOT RESPOND TO NOTICE U/S. 133(6) IT CANNOT BE SAID THAT THE SAID PARTY NEVER EXISTED AND THE TRANSACTION IS NOT A GENUINE TRANSACTION. S UFFICIENT DETAILS BY WAY OF LEDGER ACCOUNT OF THE PARTY WERE DULY FILED BEFORE THE ASS ESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO STATE THE TRANSACTION IS A GENUINE ONE AND THE SAME WERE ALSO FILED BEFORE ALL THE AUTHORITIES THEREFOR E IT IS EVIDENT ASSESSEE HAS DISCHARGED THE BURDEN LAY ON HIM OF PROVING THE GEN UINENESS OF CLAIM. D. PRAYER : IN VIEW OF THE AFORESAID SUBMISSIONS AND JUDICIAL A NALYSIS, THE ASSESSEE HUMBLY PRAYS THAT THE DISALLOWANCE OF RS.46,04,963/- ON AC COUNT OF PAYMENT MADE TO M/S ALSTOM LIMITED, NOIDA MAY BE DELETED. DURING SCRUTINY PROCEEDINGS, THE AO ISSUED QUERY LE TTERS WITH U/S. 133(6) FOR VERIFICATION TO M/S ALSTOM LIMITED NOIDA AT THE G IVEN ADDRESS, WAS RETURNED UNSERVED BY THE POSTAL AUTHORITIES. THE ASSESSEE WA S REQUESTED TO GIVE NECESSARY EXPLANATIONS. IN REPLY, THE ASSESSEE HAS SUBMITTED THAT NON-SERVICE OF LETTER TO A PARTY BY THE POSTAL AUTHORITIES CANNOT BE A GROUND FOR DISALLOWANCE. THE AO AFTER REJECTING THE APPS EXPLANATION HELD THAT SINCE THE WHEREABOUTS OF THE SAID PARTY HAS NOT BEEN FURNISHED, THE EXPENDITURE CLAIMED FOR RS. 46,04,963/- ON ACCOUNT OF SUB CONTRACTOR CHARGES PAID/PAYABLE TO THE SAID PARTY B Y THE ASSESSEE IN THE FINANCIAL YEAR 2004-05 WAS DISALLOWED AND ADDED BACK TO THE T OTAL INCOME. THE APPELLANTS AR HAS MAINLY CONTENDED THAT THE AS SESSEE THAT TRANSACTION ENTERED BY IT WITH THE PARTY CANNOT BE REGARDED AS INGENUIN E MERELY ON ACCOUNT OF THE FACT THAT NOTICE SERVED TO ONE OF THE PARTIES RETURNED U NSERVED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SUBMITTED THE COPY OF LEDGER ACCOUNT OF THE PARTY IN IT BOOKS OF THE ASSESSEE, WHICH SHOULD SUFFICE FOR THE GENUINENESS OF TRANSACTION. FOR THE PROPOSITION THAT MERELY ON ACC OUNT OF THE FACT THAT THE NOTICE U/S. 133(6) SEND TO THE ABOVE PARTY WAS RETURNED UNSEVED DOES NOT NECESSARILY MEAN THAT THE TRANSACTION WITH THE SAID PARTY IS NOT GEN UINE AND HENCE AMOUNT CLAIMED AS EXPENDITURE ON ACCOUNT OF PAYMENT MADE TO SAID PA RTY CANNOT BE DISALLOWED. THE AR HAS RELIED UPON THE DECISION OF SAGAR BOSE VS- ITO (1996) 56 ITD 561 (KOL) WHEREIN THE HON'BLE JURISDICTIONAL TRIBUNAL HELD TH AT SINCE THE AO NEITHER MADE ANY ENQUIRY FORM BANK AUTHORITIES TO FIND OUT FINAL DES TINATION OF MONEY NOR ENQUIRED FROM SALES TAX DEPARTMENT ABOUT PERSONS TO WHOM RELEVANT SALES TAX REGISTRATION NUMBER WAS ALLOTTED, ALSO DID NOT FIND ANY DEFECT AND IRRE GULARITY IN STATEMENTS, BOOKS OF ACCOUNT AND BILLS ETC. PRODUCED BY ASSESSEE HE WAS UNJUSTIFIED IN TREATING PURCHASE AS BOGUS AND MAKING ADDITION MERE ON THE CONTENTION THAT THE PARTIES NOT TRACEABLE ITA NO.1968/KOL/2016 A.Y.2005-06 DCIT, CIR-1(1), KOL. VS. M/S MCNALLY BH ARAT ENGINEERING CO. LTD. PAGE 6 AT ADDRESSES GIVEN BY THE ASSESSEE. THUS THE ORDER OF THE CIT(APPEALS) WAS QUASHED. FURTHER, IN THE CASE OF CIT VS. GP INTERNATIONAL LTD . ((2010) 325 ITR 25 (P&H) IT WAS HELD THAT THE AO HAVING NOT DOUBTED TH E IDENTITY OF THE PERSONS FROM WHOM THE ASSESSEE COMPANY HAS SHOWN RECEIPT OF SHAR E APPLICATION MONEY, IMPUGNED TRANSACTIONS CANNOT BE TREATED AS NON-GENU INE MERELY BECAUSE SOME OF THE APPLICANTS DID NOT RESPOND TO THE NOTICE ISSUED BY THE AO U/S 133(6) AND, THEREFORE, ADDITION WAS NOT SUSTAINABLE. SIMILARLY, HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS- GOODLASS NEROLAC PAINTS LTD . (1991) 188 ITR 1 (BM) HAS HELD THAT THEE CONSEQUENCES OF NO-COMPLIANCE WITH THE PR OVISIONS OF SEC. 133(4) IS THE LIABILITY TO PAY PENALTY AND NOT THE ADDITION OF TH E CLAIM FOR DEDUCTION ON THAT GROUND. SIMILAR VIEW WAS TAKEN BY TRIBUNALS IN ACIT VS- ADAM EXPORTS ITA NO.1177/MUM/2009 DTD. 25-11-2011) (MUM-TRIBUNA L); ACITX VS- ROYAL MANORS HOTELS IND. LTD. (ITA NO.2577/AD/2 003 DTD. 24-06-2009(AHD- TRIBUNAL) TO THE EFFECT THAT RETURN OF UNSERVED NOT ICE DOES NOT WARRANT ADDITION TO THE TOTAL INCOME. IN VIEW OF THE ABOVE DISCUSSION AND FOLLOWING THE D ECISION OF THE CITED CASE LAWS RELIED UPON BY THE APPELLANT, IT IS HELD THAT THE A O WAS NOT JUSTIFIED IN ADDING BACK THE AMOUNT OF THE EXPENDITURE CLAIMED FOR RS.47,04,963/ - ON ACCOUNT OF SUB CONTRACTOR CHARGES PAID/PAYABLE ON ACCOUNT OF RETURN OF ENQUI RY LETTER/NOTICE U/S. 133(6) UNSEVED BY THE POSTAL DEPARTMENT. IT IS FOUND THAT AO DID NOT MAKE ANY FURTHER ENQUIRY OR FIND ANY SERIOUS DEFECT IN THE ACCOUNTS. THE AO IS DIRECTED TO DELETE THE ADDITION OF RS.46,04,963/-. THIS GROUND IS ALLOWED. 6. WE HAVE HEAD RIVAL CONTENTION AGAINST AND IN SUP PORT OF IMPUGNED DISALLOWANCE. SUFFICE TO SAY, THE ASSESSEE HAS VERY WELL PROVED THE FACT THAT NAME OF ITS PAYEE HAS CHANGED FROM M/S ALSTOM LTD. NOIDA TO AREVA T&D LTD. AS PER RECORDS. THE ASSESSING OFFICER DID NOT RESPO ND TO CIT(A)S NOTICE QUA THE INSTANT ISSUE AS WELL AS FOR A PERIOD OF ALMOST TWO YEARS. THE REVENUE FAILS TO INDICATE ANY INFIRMITY IN PAYEES DETAILS OF NAME CHANGE DURING THE COURSE OF HEARING. IT SOLELY HARPS ON VIOLATION OF RULE 46A OF IT RULES. WE THUS FIND NO MERITS IN ITS INSTANT LAST TECHNICAL ARGUME NT AS WELL. THE CIT(A)S FINDINGS UNDER CHALLENGE QUA THIS THIRD ISSUE ARE ALSO CONFIRMED. 7. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 31/08/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 31 / 08 /201 8 ITA NO.1968/KOL/2016 A.Y.2005-06 DCIT, CIR-1(1), KOL. VS. M/S MCNALLY BH ARAT ENGINEERING CO. LTD. PAGE 7 / COPY OF ORDER FORWARDED TO:- 1 . /APPELLANT-DCIT, CIR-1(1), P-7, CHOWRINGHEE SQ R.NO .20 7 TH FL, KOLKATA-69 2 . /RESPONDENT-M/S MCNALLY BHARAT ENGINEERING CO. LTD. , 4, MAANGOE LANE, 7TH FLOOR, KOLKATA- 001 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5 . 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,