JAI MATA DI HOME CONSTRUCTION P LTD, MUMBAI V. ACIT 10(3), MUMBAI

ITA 2357/MUM/2012

• Counselvise Citation: 235719914 RSA 2012
• Duration Of Justice: 2 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 26-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI , BEFORE : SHRI R.C.SHARMA , A M & SHRI SANJAY GARG, J M ITA NO. 2357 / MUM/20 1 2 ( ASSESSMENT YEAR : 200 9 - 10 ) M/S JAI MATA DI HOME CONSTRUCTION P. LTD, 505/506, SABARI SAMRIDDHI, BEHIND MAITRI PARK, S.T.ROAD, CHEMBUR, MUMBAI - 400 071 VS. ACIT - 10 (3), MUMBAI PAN/GIR NO. : A A BCJ 0318 A ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MS. VASANTI PATEL /REVENUE BY : MS. JOTHILAKSHMI NAYAK DATE OF HEARING : 2 7 TH AUGUST , 201 4 DATE OF PRONOUNCEMENT : 12/09/ 201 4 O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER CIT(A ) , DATED 7 - 3 - 2012 FOR THE ASSESSMENT YEAR 200 9 - 10 , IN THE MATTER OF ORDER PASSED U/S. 143(3) (II) OF T H E ACT . 2 . IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE ADDITION MADE BY THE AO AMOUNTING TO RS.2,41,04,719/ - ON ACCOUNT OF SHORT REVENUE RECOGNITION AND ON ACCOUNT OF CREDITORS AMOUNTING TO RS. 68, 09,845/ - . 3 . RIVAL CONTENTIONS HAVE BEEN HEARD AND R ECORD PERUSED. FACTS IN BRIEF ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS BUILDER AND DEVELOPER. DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO OBSERVED ITA NO. 2357 /1 2 2 THAT ASSESSEE HAS ESTIMATED GROSS PROFIT OF RS. 1,02,41,284/ - IN RESPECT OF ITS PROJECT UNDER THE NAME PROJECT - SAFAL PRIDE. THE AO FURTHER OBSERVED THAT ASSESSEE COMPANY HAS UNDERTAKEN A PROJECT AND HAS OFFERED 28% OF CURRENT YEAR COST AS GROSS PROFIT FOR THE YEAR. THE AO FURTHER OBSERVED THAT THE ASSESSEE WAS IN RESPECT OF TOTAL ADVANCE OF RS. 9,92,6 0,500/ - AS ON 31 - 3 - 2009. THIS ADVANCES RECEIVED TOWARDS SALE OF 53.57% OF TOTAL SALEABLE AREA OF THE PROJECT. HOWEVER, THE AO DID NOT ACCEPT ASSESSEES CONTENTION REGARDING QUANTUM OF PROFIT OF RS.1,02,41,284/ - OFFERED ON PROJECT, AND HELD THAT PROJECT WAS COMPLETED UPTO 80% SINCE THE ASSESSEE ALLOCATED 80% OF THE LAND COST OVER THE YEARS TO DIRECT COST. THUS, THE TOTAL WORK - IN - PROGRESS OF RS. 9,05,38,324/ - WHICH INCLUDED GROSS PROFIT OF RS. 1,02,41,284/ - AND EARLIER YEAR PROFIT OF RS. 56,45,062/ - WAS NOT ACCE PTED AND AN ADDITION OF RS. 2,41,04,719/ - WAS MADE IN THE PROFIT BY ESTIMATING 80% OF ADVANCE AS INCOME OF ASSESSEE. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ADDITION AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4 . IT WAS ARGUED BY THE LEARNED AR THAT ASSESSEE IS CONSISTENTLY FOLLOWING PERCENTAGE COMPLETION METHOD RIGHT FROM INCEPTION AND IN CONFORMITY WITH THE SAID CONSISTENCY METHOD HAS OFFERED PROFIT ON ITS PROJECT @ 28% OF THE DIRECT COST. SHE INVITED OUR ATTENTION TO THE SCRUTINY AS SESSMENT ORDER PASSED BY THE DEPARTMENT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. AY 2008 - 09, WHEREIN METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE WAS ACCEPTED. DURING THE YEAR UNDER CONSIDERATION ALSO, THE ASSESSEE HAS FOLLOWED THE SAME SYSTEM OF ACCOUNTING FOR OFFERING ITA NO. 2357 /1 2 3 PROFIT ON THE PERCENTAGE COMPLETION METHOD. OUR ATTENTION WAS ALSO INVITED TO THE FACT THAT ASSESSEE HAS OBTAINED OCCUPATION CERTIFICATE FROM LOCAL AUTHORITY ON 4 - 12 - 2009 FALLING IN THE F.Y. 2009 - 10 RELEVANT TO A.Y.2010 - 11 DURING W HICH ASSESSEE HAS SHOWN THE PROJECT AS COMPLETE AND DULY OFFERED PROFIT OF RS. 7.5 CRORES IN THE ASSESSMENT YEAR 20 10 - 1 1 . AS PER LEARNED AR BY IGNORING THIS CRUCIAL FACT THE AO HAS ESTIMATED PROFIT BY TREATING THE PROJECT AS COMPLETE DURING THE YEAR UNDER C ONSIDERATION AND TREATING THE AMOUNT OF ADVANCES AS SALE THEREBY MAKING AN ADDITION OF RS. 2.41 CRORES IN THE PROFIT. AS PER LD. A.R. WITHOUT POINTING OUT DEFECT IN THE BOOKS OF ACCOUNTS OR WITHOUT REJECTING BOOK S OF ACCOUNTS, THE AO CANNOT DISREGARD THE ME THOD OF ACCOUNTING REGULARLY FOLLOWED BY ASSESSEE. OUR ATTENTION WAS ALSO INVITED TO THE STATEMENT OF INCOME FOR THE AY 2007 - 08, 2008 - 09, 2009 - 10 & 2010 - 11 ALONG WITH COMPUTATION, BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND ANNEXURES WHICH SHOWS THAT ASSESS EE HAS REFLECTED WORK - IN - PROGRESS, THE PROFIT AS PER THE PROJECT COMPLETION METHOD, WHICH WAS DULY ACCEPTED BY THE DEPARTMENT FROM TIME TO TIME. WITH REGARD TO THE PROPOSITION THAT REGULAR METHOD ADOPTED BY THE ASSESSEE AND ACCEPTED BY THE DEPARTMENT IN TH E EAR LIER YEAR CANNOT BE DISREGARDED, R ELIANCE WAS PLACED ON THE JUDICIAL PRONOUNCEMENTS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. ADVANCE CONSTRUCTION CO. (P) LTD., 275 ITR 30, HONBLE SUPREME COURT IN THE CASE OF BADRIDAS DAGA VS. CIT, 34 ITR 10 (SC), HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DEMPO & CO. PVT. LTD., 131 CTR 203 (BOMBAY HC) , ITAT DELHI IN THE CASE OF ACIT VS. MAGNUM INTERNATIONAL TRADING CO. LTD., 84 ITD 113 AND ITAT MUMBAI IN THE CASE ITA NO. 2357 /1 2 4 OF MALAD SHOPPING CENTRE PVT. LTD. VS . ITO, 17 TTJ 125 . IN SUPPORT OF THE PROPOSITION THAT THE AO CANNOT INTERFERE WITH THE METHOD CONSISTENTLY FOLLOWED BY ASSESSEE AND ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS, RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NEW POLY PACK PVT. LTD., 245 ITR 492 , CIT VS. A.R.J. SECURITY PRINTERS, 264 ITR 276, CIT VS. DALMIA PROMOTERS DEVELOPERS PVT. LTD., 281 ITR 346 AND RADHASOAMI SATSANG VS. CIT, 193 ITR 321 (SC) . 5 . ON THE OTHER HAND, LEARNED DR VEHEMENTLY ARGUED T HAT ASSESSEE WAS IN RECEIPT OF ADVANCE AS ON 31 - 3 - 2009 AMOUNTING TO RS. 9.92 CRORES WHICH WAS TOWARDS SALE OF 53.57% OF TOTAL SALEABLE AREA AND 80% OF THE PROJECT WAS COMPLETED. ACCORDINGLY, THE AO CORRECTLY DECLINED TO ACCEPT THE METHOD OF ACCOUNTING FOLL OWED BY ASSESSEE DISCLOSING GROSS PROFIT AS CERTAIN PERCENTAGE OF DIRECT COST INCURRED DURING THE YEAR, AND WORKED OUT 80% OF ADVANCE AS REVENUE TO BE RECOGNIZED DURING THE YEAR. WITH REGARD TO METHOD OF ACCOUNTING REGULARLY FOLLOWED BY THE ASSESSEE AND AC CEPTED BY THE DEPARTMENT IN THE EARLIER YEARS, THE CONTENTION OF THE LEARNED DR WAS THAT PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE TO THE INCOME TAX PROCEEDINGS, EACH YEAR IS INDEPENDENT, THEREFORE, THE AO WAS JUSTIFIED IN ESTIMATING 80% OF THE ADVANCE A S INCOME OF THE ASSESSEE. SHE FURTHER RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 6 . WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS CITED AT BAR BY LD . A.R. AND LD. D.R. IN THE CONTEXT OF ITA NO. 2357 /1 2 5 FACTUAL MATRIX OF THE CASE. FROM THE RECORD, WE FOUND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. THE ASSESSEE HAD UNDERTAK E N A PROJECT UNDER THE NAME OF SAFAL PRIDE. ON THIS PROJECT AS PER THE M ETHOD OF ACCOUNT CONSISTENTLY FOLLOWED , ASSESSEE HAS OFFERED 2 8 % OF CURRENT YEAR COST AS GROSS PROFIT WHICH AMOUNTED TO RS. 1,02,41,284/ - . WITHOUT POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNTS OR IN THE METHOD OF ACCOUNTING REGULARLY FOLLOWED, M ERELY ON THE PLEA THAT ASSESSEE ALLOCATED 80% OF LAND COST OVER THE YEARS TO DIRECT COST, THE AO DISREGARDED ASSESSEES METHOD OF ACCOUNTING AND TREATED 80% OF TOTAL ADVANCE AS SALE, ACCORDINGLY WORKED OUT ADDITION OF RS. 2,41,04,719/ - . WE FOUND THAT THE AO HAS NEI THER POINTED ANY DEFECTS IN THE BOOKS OF ACCOUNT REGULARLY MAINTAINED IN THE COURSE OF BUSINESS NOR REJECTED THE BOOKS OF ACCOUNT. THE PERCENTAGE COMPLETION METHOD OF ACCOUNTING AS REGULARLY FOLLOWED BY THE ASSESSEE AND EVEN ACCEPTED BY THE DEPARTMENT IN T HE SCRUTINY ASSESSMENT IN THE IMMEDIATELY PRECEDING YEAR 2008 - 09 WAS FOLLOWED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION . BOTH THE LOWER AUTHORITIES HAVE ALSO NOT DISPUTED THE FACT THAT ASSESSEE HAS OBTAINED OCCUPATION CERTIFICATE ON 4 - 12 - 2009 WHI CH FALLS IN THE FINANCIAL YEAR 2009 - 10 RELEVANT TO A.Y.2010 - 11 AND DULY DETERMINED COST OF PROJECT AND ALSO RECOGNIZED REVENUE THEREON IN THE AY 2010 - 11. THE ASSESSEE HAD OFFERED PROFITS OF NEARLY RS.7.5 CRORES IN THE AY 2010 - 2011 WHEN THE SAID PROJECT WAS COMPLETED AND THE SALES PROCEEDS WERE ULTIMATELY REALIZED . IN THE CASE OF BUILDER, IN ADDITION TO THE METHOD OF ACCOUNTING FOLLOWED, THE YEAR OF ISSUE OF OCCUPATION CERTIFICATE IS IMPORTANT SO AS TO TREAT THE ADVANCE AS SALES INSTEAD OF WORK - IN - PROGRESS. IN THE INSTANT CASE ITA NO. 2357 /1 2 6 OCCUPATION CERTIFICATE WAS ISSUED BY MUNICIPAL CORPORATION OF MUMBAI ON 4 - 12 - 2009 FALLING IN THE FINANCIAL YEAR 2009 - 2010 RELEVANT TO THE ASSESSMENT YEAR 2010 - 11 AND T HE ASSESSEE HAD DULY OFFERED PROFIT OF RS. 7.5 CRORES IN THE ASSESSME NT YEAR 2010 - 11. ACTION OF AO TREATING 80% OF ADVANCE AS INCOME OF CURRENT YEAR AMOUNTS TO DOUBLE TAXATION OF SAME INCOME WHICH WAS DECLARED BY ASSESSEE IN IMMEDIATELY SUCCEEDING A.Y.2010 - 11 WHEN THE PROJECT WAS COMPLETE. THE ASSESSEE IS FOLLOWING PERCENTA GE COMPLETION METHOD OF ACCOUNTING RIGHT FROM INCEPTION AND IN CONFI RMITY WITH THE SAID PERCENTAGE COMPLETION METHOD OF ACCOUNTING HAS OFFERED GROSS PROFIT ON ITS PROJECT @28% OF DIRECT COST OF THE CURRENT YEAR. WE FOUND THAT THIS METHOD OF OFFERING PROFIT AS PERCENTAGE OF DIRECT COST HAS BEEN FOLLOWED BY THE ASSESSEE YEAR TO YEAR AND THE DEPARTMENT HAS ALSO ACCEPTED THIS METHOD IN ITS SCRUTINY ASSESSMENT ORDER FRAMED U/S. 143(3) IN IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008 - 09. WITHOUT SHOWING ANY COGENT RE ASON FOR DEVIATING FROM THE METHOD OF ACCOUNTING REGULARLY FOLLOWED BY THE ASSESSEE AND ACCEPTED BY THE DEPARTMENT , ACCORDING TO WHICH ASSESSEE HAD OFFERED 28% OF GROSS PROFIT DURING THE YEAR, THE AO HAD ESTIMATED PROFIT AT 80% OF ADVANCE RECEIPT. THE AO H AS NOT ASSIGN ED ANY COGENT REASON AS TO WH Y THE METHOD WHICH IS CONSISTENTLY FOLLOWED BY ASSESSEE AND ACCEPTED BY THE DEPARTMENT IN PAST, IS BEING REJECTED. NONE OF THE LOWER AUTHORITIES HAVE DECLINED THE FACT THAT ASSESSEE HAS DULY OFFERED THE ADVANCE REC EIVED AS ITS INCOME IN THE IMMEDIATELY SUBSEQUENT YEAR I.E. AY 2010 - 11 WHEN THE PROJECT WAS COMPLETED, ACCORDINGLY INCOME OF RS.7.5 CRORES WAS OFFERED FOR TAX. WE HAD DULY VERIFIED STATEMENT OF COMPUTATION OF INCOME, BALANCE SHEET, ITA NO. 2357 /1 2 7 PROFIT AND LOSS ACCOUNT IN THE A.YS.2007 - 08, 2008 - 09, 2009 - 10 & 2010 - 11, WHICH SHOWS THAT ASSESSEE HAD REFLECTED WORK - IN - PROGRESS BY ADDING THE GROSS PROFIT IN THE DIRECT COST INCURRED DURING THE YEAR AND WHICH WAS DULY ACCEPTED BY THE DEPARTMENT . THE FACT THAT OCCUPATION CERTIFI CATE ITSELF WAS RECEIVED BY ASSESSEE FROM MUNICIPAL CORPORATION OF GREATER MUMBAI ON 4 - 12 - 2009 FALLING IN THE F.Y.2009 - 10 RELEVANT TO A.Y.2010 - 11 DURING WHICH ASSESSEE HAS DULY OFFERED THE AMOUNT OF ADVANCE AS SALES AND PROFIT OF RS. 7.5 CRORES WAS DECLARED . THUS, THERE IS NO JUSTIFICATION ON THE PART OF THE AO TO REJECT ASSESSEES METHOD OF ACCOUNTING AND MAKING ARBITRARY ADDITION OF RS.2,41,04,719/ - . WE DIRECT TO DELETE THE SAME. 7 . THE AO HAS ALSO MADE AN ADDITION OF RS.68,09,845/ - IN RESPECT OF CREDITOR S . T HE AO OBSERVED THAT ASSESSEE HAS FAILED TO PROVIDE SUPPORTING DOCUMENTS IN RESPECT OF 3 PARTIES, NAMELY, JCL INTERNATIONAL LTD., SANFIELD INDIA LTD. AND AMIT CONSTRUCTION. THE AO ALSO OBSERVED THAT NOTICE ISSUED U/S. 133(6) WAS RETURNED UNSERVED. THE CO NTENTION OF THE ASSESSEE WAS THAT ALL THE CREDITORS WERE REGISTERED AND WERE CORPORATE ENTITY AND WITHOUT PURCHASES, THE ASSESSEE COULD NOT HAVE UNDERTAKEN THE CONSTRUCTION WORK. HOWEVER, THE AO DID NOT CONVINCED WITH THE ASSESSEES CONTENTION AND ADDED TH E ENTIRE AMOUNT IN RESPECT OF THESE THREE CREDITORS IN ASSESSEES INCOME. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ADDITION AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 8 . IT WAS ARGUED BY THE LEARNED AR THAT ASSESSEE HAS FURNISHED FULL DETAIL OF TH ESE THREE PARTIES ALONG WITH STATEMENT OF ACCOUNT, BANK STATEMENT, PURCHASES BILL/VOUCHERS VIDE LETTER DATED 5 - 12 - 2011 BEFORE THE ITA NO. 2357 /1 2 8 AO, HOWEVER, THE SAME WAS NOT TAKEN INTO CONSIDERATION BY THE AO WHILE DECIDING THE ISSUE. OUR ATTENTION WAS ALSO INVITED TO THE OBSERVATION MADE BY THE AO AT PARA 2 OF HIS ASSESSMENT ORDER, WHEREIN HE HAS DULY MENTIONED THE LETTER DATED 5 - 12 - 2011 AS FILED BY THE ASSESSEE. AS PER LEARNED AR ALL PURCHASES ARE FROM VENDORS REGISTERED UNDER LOCAL SALES TAX LAW, INCOME TAX ACT AND M ORE IMPORTANTLY TWO OUT OF THREE PARTIES ARE ALSO REGISTERED UNDER THE COMPANIES ACT, 1956. ALL THE PAYMENTS ARE THROUGH BANKING CHANNEL AND THAT ALSO THROUGH ACCOUNT PAYEE CHEQUES, WHICH ARE GLARING REFLECTED IN THE BANK STATEMENTS PRODUCED BEFORE THE AO. THE ACCOUNTS OF THE ASSESSEE HAVE BEEN SUBJECTED TO STATUTORY AUDIT UNDER THE COMPANIES ACT, 1956 AND ALSO TAX AUDIT U/S. 44AB OF THE INCOME TAX ACT, 1961 AND THE AUDITORS HAVE NOT GIVEN ANY ADVERSE REMARKS ABOUT THE OVERALL AFFAIRS OF THE ASSESSEE. 9 . O UR ATTENTION WAS ALSO INVITED TO THE FACT THAT ALL THE THREE CREDITORS HAVE BEEN PAID DURING THE YEAR AND NOTHING WAS REMAINED IN OUTSTANDING. FURTHER THE PAYMENT WAS MADE BY ACCOUNT PAYEE CHEQUES AND NOTHING WAS SHOWN THAT MONEY HAS FLOWN BACK TO THE ASSE SSEE FROM THESE CREDITORS. THE INDIVIDUAL PARTY - WISE EXPLANATION SO GIVEN WAS AS UNDER : - (A) J. C. L. INTERNATIONAL LIMITED : J. C. L. INTERNATIONAL LIMITED IS A LIMITED COMPANY DULY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, AND THE AC TIVITIES OF THE SAID COMPANY IS TO PROVIDE TOWER PARKING SYSTEM BY HIGH TECHNOLOGY PROVIDED BY STOCKS INDUSTRIES, U. S. A. AND THE SAID SYSTEM PROVIDES VEHICLES PARK IN / RETRIEVED FROM MULTIPLE LEVELS AUTOMATICALLY. THE APPELLANT IS HAVING CORRESPONDENCE WI TH THE SAID J. C. L. INTERNATIONAL LIMITED AND CALLED FOR THE QUOTATIONS AND THE SCOPE OF THE WORK AND ALL SUCH CONFIGURATIONS WHICH ARE/ PART OF THE PAPER BOOK. THE SAID COMPANY HAS ALSO ENTERED INTO AN AGREEMENT, WHICH IS ALSO PART OF PAPER BOOK. THE APP ELLANT HEREBY SUBMITTING CONTRACT AGREEMENT, PERFORMA INVOICE PROPOSALS; SCOPE OF THE WORK, INSTALLATION, LETTERS, PAYMENTS BY ACCOUNT PAYEE CHEQUES AND ITA NO. 2357 /1 2 9 PAYMENT MADE BY THROUGH LETTERS OF CREDIT AND FINAL INVOICE. FOR THAT, NECESSARY BANK STATEMENTS, BANK LETTERS ARE ALSO PART OF THE PAPER BOOK. FROM THE SAID DOCUMENTS, THE APPELLANTS HEREBY STATE THAT THE APPELLANT HAS ENTERED INTO AGREEMENT AND MADE PAYMENT TO THE SAID J. C. L. INTERNATIONAL LIMITED, WHICH IS DULY ACKNOWLEDGED BY THE COMPANY. HOWEVER SUMM ONS WAS RETURNED DUE TO SOME TECHNICAL PROBLEM AND THEREFORE IT DOES NOT AMOUNT TO THE GROUND FOR THE ADDITION OF THE ENTIRE AMOUNT WHICH WAS PAID BY THE APPELLANT DURING THE RELEVANT ASSESSMENT YEAR. THE APPELLANT HEREBY FURTHER STATE THAT AS ON 31.3.2009 , THE CREDITORS BALANCE WAS RS. 67,980/ - AND THE LEARNED ASSESSING OFFICER HAS MADE THE ENTIRE ADDITION OF RS. 50,00,000/ - WHICH WAS MADE BY THE APPELLANT DURING THE RELEVANT ASSESSMENT YEAR, AND SUBSEQUENT PAYMENT OF RS. 67,980/ - IS ALSO MADE BY THE ACCOU NT PAYEE CROSSED CHEQUE ALONGWITH OTHER PAYMENTS WHICH IS ALSO MENTIONED IN THE PAPER BOOK DULY HIGHLIGHTED IN YELLOW COLOUR FLUORESCENT INK. (B) SUNFIELD INDIA LIMITED: THE SAID SUNDRY CREDITOR IS ALSO A LIMITED COMPANY DULY REGISTERED UNDER THE PROVIS IONS OF CORNPAMES ACT, 1956. THE NATURE OF THE SAID COMPANY IS PROVIDING SERVICES IN THE FIELD OF PRESS TRACING SLABS (PT SLABS) I.E. THE SAID COMPANY IS PROVIDING DESIGNS AND SUPPLYING PRESS TRACING MATERIALS FOR THE SLABS AND THE SAID P. T. SLABS IS TO B E CONSTRUCTED WHERE WITHOUT SUPPORT OF COLUMNS, AND SUCH OTHER SUPPORTS. SUCH SLAB REQUIRES HIGH, TECHNOLOGY WHICH REQUIRES 'SUPER SPECIALITIES AND SKILLS FROM REPUTED CONSULTANTS. THE APPELLANT HEREBY SUBMITTING LEDGER ACCOUNTS ALONG WITH QUOTATIONS, INVO ICES, AND SUCH OTHER SUPPORTING DOCUMENTARY EVIDENCES WHICH WAS ALSO SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS, AND DULY HIGHLIGHTED IN YELLOW COLOUR FLUORESCENT INK. THE APPELLANT HAS PAID THE ENTIRE AMOUNT OF RS .11,10,9441 - DURING THE RELEVANT ASSESSMENT YEAR AND FOR NON - SERVICE THE NOTICE UNDER SECTION 133(6), THE LEARNED ASSESSING OFFICER HAS MADE THE ENTIRE ADDITION WITHOUT ANY REASON. (C) AMIT CONSTRUCTIONS: DURING THE RELEVANT ASSESSMENT YEAR, THE APPEL LANT HAS PAID RS.7,58,901 / - TOWARDS THE LABOUR CHARGES FOR THE CONSTRUCTION CONTRACT. THE APPELLANT HAS SUBMITTED THE CONFIRMATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER NOTICE COULD NOT BE SERVED UNDER SECTION 133(6) OF THE SAID ACT UPON TH E SAID AMIT CONSTRUCTIONS, DUE TO ACCIDENT OF THE PROPRIETOR, MR. M. M. CHOPRA, AND FOR THAT, MEDICAL CERTIFICATE WAS ALSO PRODUCED BEFORE THE LEARNED ASSESSING OFFICER WHICH WAS NOT CONSIDERED AND WHICH IS PART AND PARCEL OF THE PAPER BOOK. DURING THE YEA R, THE APPELLANT HAS PAID THE ENTIRE AMOUNT BY ACCOUNT PAYEE CHEQUE AND ALSO DEDUCTED TDS AND ALSO THE QUESTION OF DISALLOWANCE ON THE AMOUNT OF NON - SERVICE OF THE NOTICE UNDER SECTION 133(6) IS NOT JUSTIFIED. ITA NO. 2357 /1 2 10 AFTER EX PLAINING FACTUAL POSITION, LEARNED A R ARGUED THAT BURDEN LIES ON THE PERSON WHO ALLEGES THAT APPARENT IS NOT REAL AND FOR THIS PROPOSITION, RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF DAULAT RAM RAWATMULL, 87 ITR 349 . 10. ON THE OTHER HAND, LEARNED DR CONTEND ED THAT NOTICE ISSUED BY AO U/S. 133(6) RETURNED BACK UNSERVED AND IN SPITE OF GIVING VARIOUS OPPORTUNITIES, ASSESSEE COULD NOT EXPLAIN THE SAID CREDITORS. LEARNED DR ACCEPTED THE FACT THAT LETTER DATED 5 - 12 - 2011 EVEN THOUGH MENTIONED BY AO IN PARA 2 OF HIS ASSESSMENT ORDER, BUT THE ANNEXURES ATTACHED ALONG WITH LETTER WERE NOT BEFORE THE AO, THEREFORE, THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF THESE PURCHASES. ACCORDINGLY, SHE REQUESTED TO UPHOLD THE ORDER OF THE AO MAKING ADDITION ON ACCOUNT OF THESE THREE CREDITORS . 11. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICE U/S. 133(6) OF M/S JCL INTERNATIONAL LIMITED, SUNFIELD INDIA LIMITED AND AMIT CONSTRUCTION, HOWEVER, NOTICES R EMAINED UNSERVED. AS PER LETTER DATED 5 - 12 - 2011, WHICH HAS BEEN MENTIONED BY THE AO IN PARA 2 OF HIS ORDER, THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF PURCHASE SO MADE FROM THESE THREE PARTIES AND THE PAYMENT MADE TO THEM BY ACCOUNT PAYEE CHEQUES. AS P ER THE DETAILS PLACED IN THE PAPER BOOK, WE FOUND THAT ASSESSEE HAS EITHER PURCHASED BUILDING MATERIAL OR OTHER THINGS RELATED TO ITS BUILDING PROJECT AND ALSO UNDERTAKEN JOB WORK FROM THESE PARTIES. THE ASSESSEE HAS ALSO DEDUCTED TAX ON THE PAYMENT SO MAD E TO THESE PARTIES. THE ITA NO. 2357 /1 2 11 PAYMENT WAS ALSO MADE BY ACCOUNT PAYEE CHEQUES. RELEVANT BANK STATEMENT INDICATING PAYMENTS CLEAR ED FROM THE RESPECTIVE BANK ACCOUNT WAS ALSO PLACED ON THE RECORD. ALL THESE DOCUMENTS GO ES TO THE RO OOT OF THE ISSUE SO AS TO PROVE TH E GENUINENESS OF THE PURCHASES/EXPENSES. IN THE INTEREST OF JUSTICE AND FAIR - PLAY, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER CONSIDERING VARIOUS DOCUMENTS DISCUSSED BY US WHICH WAS PLACED IN THE PAPER BOOK. NEEDLESS TO SAY THAT THE AO HAS TO DECIDE THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AND ASSESSEE IS AT LIBERTY TO SUBSTANTIATE ITS CLAIM OF PURCHASES ETC. BY FILING ANY DOCUMENTS WHICH MAY BE SO REQUIRED. WE DIRECT ACCORDINGLY. 12 . IN THE RESULT, APPEA L OF THE ASSESSEE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12/09/ 201 4 . 12/09/ 2014 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 0 9 /2014 /PKM , 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/ /