Shri Akshay Anantrai Gandhi, Ahmedabad V. The Income Tax Officer, Ward- 9(2), Ahmedabad

ITA 2899/AHD/2004

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0044 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 12-08-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 27-09-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PG E
• Keywords: Difference of opinion; Corroborative evidences
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI G.D.AGRAWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 12/08/2010 DRAFTED ON: 13/08 /2010 ITA NO.2899/AHD/2004 ASSESSMENT YEAR : 2001-02 SHRI AKSHAY ANANTRAI GANDHI C/4, BHADRESHWAR FLATS NR.ANKUR BUS STOP NARANPURA, AHMEDABAD VS. THE INCOME TAX OFFICER WARD-9(2) AHMEDABAD PAN/GIR NO. : ABYPG 5826 E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI VIJAY RANJAN RESPONDENT BY: SHRI K.M. MAHESH, SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XV, AHMEDABAD DATED 17/08/2004 PASSED FOR ASSESSMENT YEAR 2001-0 2. 2. AS PER THE GROUNDS OF APPEAL, THE APPELLANT HAS RAISED THREE GROUNDS OF APPEAL, HOWEVER, GROUND NO.3 WHICH IS IN RESPECT OF THE DISALLOWANCE MADE BY INVOKING THE PROVISIONS OF SEC TION 40A(3) OF THE I.T. ACT, 1961 OF RS.38,000/- IS NOT PRESSED, HENCE , DISMISSED BEING NOT PRESSED. ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 2 - 3. THE NEXT GROUND IS GROUND NO.1 AND THE SUBSTANTI VE PORTION AS ARGUED BEFORE US IS REPRODUCED BELOW:- 1. IN LAW AND IN THE FACTS AS WELL AS THE CIRCUMSTANCE S OF THE APPELLANTS CASE, THE CIT(A) HAS GROSSLY ERRED IN U PHOLDING THE DISALLOWANCE OF RS.2,05,225 BEING THE HIRE CHAR GES FOR MACHINERY PAID TO M/S.VANDANA ENTERPRISES WHEN HE O UGHT TO HAVE HELD THAT THERE IS NO JUSTIFICATION IN DISALLO WING THE IMPUGNED AMOUNT AND DIRECTED THE DELETION OF THE DISALLOWANCE OF RS.2,05,225. IN NOT DOING SO, HE H AS FAILED TO APPRECIATE THE FOLLOWING AMONGST OTHERS : 3.1. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESP ONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 27/01/2004 WERE THAT THE ASSESSEE IN HIS INDIVIDUAL CAPACITY IS WORKING AS A CIVIL CONTRACTOR. A SUM OF RS.6,62,538/- WAS CLAIMED AS PER PROFIT & LOSS ACCOUNT MACHINERY RENT EXPENSES. OUT OF THE SAID TOTAL CLAIM A SUM OF RS.2,05,225/- WAS STATED TO HAVE BEEN PAID TO M/S.V ANDANA ENTERPRISES AS MACHINERY HIRE CHARGES. IT HAS ALSO BEEN FOUND BY THE ASSESSING OFFICER THAT THE ENTIRE AMOUNT OF RS.2,05,225/- ST OOD OUTSTANDING AT THE CLOSE OF THE ACCOUNTING PERIOD, I.E. 31/03/2001. TO ENQUIRE ABOUT THE SAID CLAIM, NOTICE U/S.133(6) OF THE I.T. ACT, 1961 WAS ISSUED TO M/S.VANDANA ENTERPRISES AT THE ADDRESS FURNISHED BY THE ASSESSEE. IN RESPONSE, PROPRIETOR OF THE SAID CONCERN HAS DENIED ANY TRANSACTION WITH THE ASSESSEE DURING THE SAID FINANCIAL YEAR. THE ASSESSING OFFICER HAS ALSO NOTICED THAT THE SIGNATURE AS PER THE COPIES O F THE BILLS AND CONFIRMATION WHICH WERE FURNISHED BY THE ASSESSEE A ND ON THAT BASIS THE CLAIM WAS MADE HAD DIFFERED WITH THE SIGNATURES MAD E BY THE SAID PERSON IN HIS REPLY IN RESPONSE TO THE NOTICE U/S.133(6) O F THE I.T. ACT, 1961. THE ASSESSING OFFICER WAS NOT CONVINCED THAT THE EX PLANATION OF THE ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 3 - ASSESSEE PRIMARILY BECAUSE OF THE REASON THAT THE PROPRIETOR OF M/S.VANDANA ENTERPRISES HAS DENIED HAVING ANY BUSIN ESS TRANSACTION OF THAT NATURE WITH THE ASSESSEE DURING THE FINANCIAL YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE AFTER ASSIGNING THE FOLLOWING REASONS:- 3(F) THE REPLY OF THE ASSESSEE AS REPRODUCED A BOVE IS TAKEN INTO CONSIDERATION. HOWEVER, THE SAME IS NOT FOUN D TO BE FORCEFUL AND CONVINCING. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE THAT COULD CONTRADICT THE CLAIM OF SHRI UPENDRA TIWARI, WHICH WAS BASED ON VARIOUS DOCUMENTARY EVIDENCES. SHRI TIWAR I HAS CONVINCINGLY REBUTTED THE CLAIM OF THE ASSESSEE BY FURNISHING EVIDENCE LIKE COPY OF BILL FOR AIR COMPRESSOR PURCH ASED, TRANSPORT RECEIPT AND RETURNS OF INCOME FILED BY HIM. THE A HIMSELF HAD CALLED FOR THE VERIFICATION OF THESE DOCUMENTS IN H IS EARLIER LETTER DATED 06-12-2003. FURTHER IN HIS STATEMENT RECORD ED ON OATH SHRI TIWARI HAS CATEGORICALLY DENIED HAVING ISSUED ANY B ILLS IN FINANCIAL YEAR 2000-01 OR ACCOUNT CONFIRMATION LETT ER. THIS CLEARLY PROVES THAT COPY OF BILLS AND ACCOUNT CONFI RMATION LETTER FURNISHED BY THE A ARE FABRICATED DOCUMENTS WITH FO RGED SIGNATURES. ON THE BASIS OF INVESTIGATIONS CARRIED OUT IT IS CLEARLY PROVED THAT THE EXPENDITURE OF RS.2,05,225/- CLAIME D IN THE NAME OF M/S.VANDANA ENTERPRISE IS A BOGUS EXPENDITURE WH ICH IS ACTUALLY NOT INCURRED BY THE ASSESSEE. THEREFORE, THE ONUS WAS ON ASSESSEE TO PROVE THAT THE STATEMENT OF SHRI UPENDR A TIWARI AND THE EVIDENCE FILED BY HIM ARE FALSE. HOWEVER, THE ASSESSEE HAS NOT GIVEN ANY REPLY ON THIS ASPECT AND HE HAS SIMPLY ST TED THAT HE HAD SOME DIFFERENCE OF OPINION WITH SHRI UPENDRA TIWARI DUE TO WHICH HE HAS GIVEN SUCH STATEMENT. THIS CONTENTION OF T HE ASSESSEE IS NOTHING BUT AN AFTER THOUGHT AND A DESPERATE BUT VA IN ATTEMPT TO SAVE HIS OWN SKIN. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT COULD PROVE THE STAT EMENT OF SHRI TIWARI FALSE. MOST IMPORTANTLY THE ASSESSEE HAS AL SO NOT ASKED FOR CROSS-EXAMINATION OF SHRI UPENDRA TIWARI THOUGH SPE CIFIC OPPORTUNITY FOR THE SAME WAS PROVIDED TO HIM VIDE L ETTER DATED 17.12.003. IN VIEW OF THE ABOVE FACTS THE ASSESSE ES CLAIM OF EXPENDITURE OF RS.2,05,225/- IS PROVED TO BE A BOGU S CLAIM WHICH IS ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 4 - ACTUALLY NOT INCURRED BY HIM AS SUCH ADDITION OF RS .2,05,225/- IS MADE TO THE TOTAL INCOME OF THE ASSESSEE. THE PENA LTY PROCEEDINGS U/S.271(1)(C) ARE BEING INITIATED SEPARATELY FOR CO NCEALMENT OF INCOME ON THIS ACCOUNT. 4. WHEN THE MATER HAS REACHED BEFORE THE FIRST APPE LLATE AUTHORITY, THE LEARNED CIT(APPEALS) HAS AFFIRMED THE ACTION OF TH E ASSESSING OFFICER AND HELD THAT IT WAS A CASE OF CLAIM OF BOGUS EXPEN DITURE VIDE PARAGRAPH NO.2.3; REPRODUCED BELOW:- 2.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTH ORISED REPRESENTATIVE CAREFULLY AND HAVE ALSO GONE THROUGH THE DETAILS FILED BY THE AUTHORISED REPRESENTATIVE. I FIND TH AT THE PARTY M/S.VANDANA ENTERPRISES HAS PURCHASED AN AIR COMPRE SSOR ON 19.4.2001 AFTER WHICH IT HAS INFORMED THAT IT WAS H IRED TO THE APPELLANT AND BILLS OF RS.21,150/- HAVE BEEN RAISED FOR THE PERIOD FROM 1.5.2001 TO 17.6.2001. M/S.VANDANA ENTERPRISE S HAS NOT CONFIRMED HAVING GIVEN ANY MACHINERY ON RENT TO THE ASSESSMENT PROCEEDINGS FOR THE FINANCIAL YEAR 2000-01 NOR THE APPELLANT COULD PRODUCE ANY EVIDENCE TO SHOW THAT THE MACHINE RY WAS HIRED FORM M/S.VANDANA ENTERPRISES. AS THE CLAIM OF PAYM ENT OF HIRE CHARGES WAS THE APPELLANTS CLAIM, THE BURDEN WAS O N THE APPELLANT TO PROVE THE SAME BEYOND REASONABLE DOUBT AS PER THE EVIDENCE ACT, WHICH HAS NOT BEEN DISCHARGED BY THE APPELLANT WITH PROPER EVIDENCE. THE TRANSPORT RECEIPT PRODUCED BY THE APPELLANT AFTER THE LAST HEARING BEFORE THE ASSESSING OFFICER , A COPY OF WHICH HAS BEEN PRODUCED BEFORE ME, DOES NOT PROVE THAT TH E MACHINERY WAS HIRED FROM M/S.VANDANA ENTERPRISES AND EVEN THE SUBSEQUENT CONDUCT OF THE APPELLANT SHOWS THAT THE PAYMENT OF HIRING CHARGES OF RS.2,05,225/- HAS NOT BEEN MADE BY THE APPELLANT AND THE APPELLANT HAS WRITTEN BACK THE SAID AMOUNT IN THE S UBSEQUENT YEAR. IN VIEW OF THE ABOVE FACTS, IT IS QUITE CLEAR THAT NO SUCH PAYMENT WAS REQUIRED TO BE MADE AND IT IS A BOGUS EXPENDITU RE CLAIMED BY THE APPELLANT. THEREFORE, THE DISALLOWANCE OF RS.2 ,05,225/- MADE BY THE ASSESSING OFFICER IS CONFIRMED. ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 5 - 5. WE HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE APPELLANT, MR.VIJAY RANJAN LEARNED AUTHORISED REPRESENTATIVE O F THE ASSESSEE APPEARED AND TRIED TO EXPLAIN THAT DUE TO CERTAIN D IFFERENCE THE PROPRIETOR OF THE SAID CONCERN HAS DENIED SOME OF THE BASIC FA CTS, HWOEVER, THERE WERE OTHER EVIDENCES THROUGH WHICH IT COULD BE ESTA BLISHD THAT THE ASSESSEE HAD BUSINESS RELATIONSHIP WITH THE SAID PA RTY AND PAYMENTS HAVE BEEN MADE AS EVIDENCED FORM THE BANK STATEMENTS. W E ARE NOT CONVINCED WITH THE PLEADINGS OF THE LEARNED AUTHORISED REPRES ENTATIVE OF THE ASSESSEE PRIMARILY BECAUSE OF THE REASON THAT PRIMA RY ONUS WAS NOT TRULY DISCHARGED BY THE ASSESSEE. ONCE THE ASSESSING OF FICER HAS RECORDED THE STATEMENT OF MR.UPENDRA TIWARI AND ALSO EXAMINED TH E CONNECTED EVIDENCE BUT DID NOT FIND ANYTHING IN FAVOUR OF THE ASSESSEE, THEREFORE, CONSIDERING ALL THOSE CIRCUMSTANCES UNDER WHICH THE CLAIM WAS HELD AS BOGUS, WE HEREBY HAVE NO OPTION BUT TO AFFIRM THE D ISALLOWANCE. THIS CLAIM OF THE ASSESSEE IS HEREBY DISMISSED. 6. THE ONLY QUESTION AS RAISED THROUGH AN ADDITIONA L GROUND IS THAT ONCE THE AFORESAID AMOUNT HAD SUO MOTU WRITTEN BACK BY THE ASSESSEE IN ASSESSMENT YEAR 2003-04, THEN WHETHER THE SAME CAN AGAIN BE TAXED FOR THE YEAR UNDER CONSIDERATION. SINCE ON THE BASIS OF EXISTING FACTS, AN ADDITIONAL GROUND HAS BEEN RAISED BY THE ASSESSEE W HICH ACCORDING TO US IS A CONNECTED LEGAL GROUND, THEREFORE, HEREBY ADMI TTED. THE GRIEVANCE OF THE ASSESSEE CAN THUS BE RESOLVED IF WE DIRECT T HE REVENUE DEPARTMENT TO EXAMINE THE FACT WHETHER FOR ASSESSMENT YEAR 200 3-04 THE AFORESAID AMOUNT WAS WRITTEN BACK BY THE ASSESSEE. IF IT SH ALL BE FOUND TRUE AND CORRECT, THEN NATURALLY THE CONSEQUENCE IS THAT THE SAME MUST NOT BE TAXED ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 6 - TWICE, I.E. ONCE IN THE ASSESSMENT YEAR UNDER CONSI DERATION BEING DISALLOWANCE IS CONFIRMED AND THEN AGAINST IN ASSES SMENT YEAR 2003-04 ON ACCOUNT OF SUO MOTU WRITE OFF BY THE ASSESSEE. THIS ALTERNATE PLEA AS RAISED THROUGH IMPUGNED ADDITIONAL GROUND HAS SUBST ANCE IN IT, THEREFORE, WE HEREBY DIRECT THAT AFTER VERIFICATION IF THE CLA IM SHALL BE FOUND CORRECT, THEN DUE RELIEF MAY BE GRANTED AS PER LAW. WITH TH E RESULT, THE MAIN GROUND IS DISMISSED, HOWEVER, ADDITIONAL GROUND IS PARTLY ALLOWED ONLY FOR STATISTICAL PURPOSES. 7. THE NEXT GROUND LEFT FOR OUR ADJUDICATION IS GRO UND NO.2; REPRODUCED BELOW:- 2. IN LAW AND IN THE FACTS AS WELL AS THE CIRCUMST ANCES OF THE APPELLANTS CASE, THE CIT(A) HAS GROSSLY ERRED IN H OLDING PART OF THE DISALLOWANCE OF RS.1,55,685 OUT OF THE TOTAL PU RCHASES OF RS.5,70,985 OF WELDMASH FROM M/S. HI TECH CORPORATI ON WHEN HE OUGHT TO HAVE DELTED THE ENTIRE DISALLOWANCE OF RS. 3,00,000. IN NOT DOING SO, HE HAS FAILED TO APPRECIATE THE FOLLO WING AMONGST OTHERS: (A) THAT THERE BEING NO DISPUTE THAT THE WELDMAS H PURCHASED FORM M/S. HI-TECH CORPORATION HAD BEEN CONSUMED AND THIS FACTUAL POSITION HAS BEEN ACCEPTED; (B) THAT THE DOUBT OF THE ASSESSING OFFICER THAT BO GUS BILLS IN THE NAME OF M/S.HI-TECH CORPORATION AT INFLATED RATES W ERE OBTAINED, WITHOUT ANY EVIDENCE TO SO ESTABLISH, OUG HT NOT TO HAVE BEEN THE BASIS FOR UPHOLDING THE DISALLOWANCE. THIS HON'BLE TRIBUNAL MAY, THEREFORE, BE PLEASED TO HOLD THAT THERE IS NO JUSTIFICATION FOR UPHOLDING THE PART OF THE D ISALLOWANCE OF RS.1,55,685 AND DIRECT THE DELETION OF THE ENTIRE D ISALLOWANCE OF RS.3,00,000. ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 7 - 7.1. TOTAL PURCHASES AS CLAIMED BY THE ASSESSEE AMO UNTED TO RS.48,84,193/-. OUT OF THE SAID PURCHASE, THE ASS ESSEE HAS MADE A PURCHASE OF RS.5,70,985/- FROM M/S. TI-TECH CORPORA TION, NADIAD. THE ASSESSEE HAS PURCHASED AN ITEM VIZ. WELDMASH. THE ASSESSING OFFICER WANTED TO VERIFY THE CORRECTNESS OF THE CLA IM, HENCE, ISSUED A NOTICE U/S.133(6) OF THE I.T. ACT, 1961, HOWEVER, I T WAS RETURNED BY THE POSTAL AUTHORITIES UNSERVED WITH THE REMARKS NOT K NOWN. A LETTER HAS ALSO BEEN ISSUED TO THE ITO, WARD-1, NADIAD TO COND UCT NECESSARY ENQUIRIES AND TO TRACE THE SAID PARTY. THE SAID P ARTY COULD NOT BE TRACED BY THE REVENUE DEP. THE ASSESSEE HAS ALSO FAILED TO FURNISH THE DETAILS OF QUANTITY-WISE CONSUMPTION OF WELDMASH. THE A SSESSING OFFICER HAS EXAMINED THE FACTS OF THE CASE AND TAKING INTO ACCOUNT THE CONSUMPTION OF MATERIAL IN CONSTRUCTION WORK HE HAS MADE A LUMP SUM AMOUNT OF RS.3 LACS, AFTER ASSIGNING THE FOLLOWING REASONS:- 4(E) THE REPLY OF THE ASSESSEE AS REPRODUCED ABOV E IS TAKEN INTO CONSIDERATION. THE ASSESSEE HAS FURNISHED A DETAI LED CHART SHOWING CONSUMPTION OF THE ITEM WELDMASH AS ITS VARIOUS WORKS SITES. THE CONSUMPTION OF WELDMASH IS ALSO EVIDENT FROM THE COPIES OF THE RUNNING ACCOUNT BILLS OF DIFFERENT SI TES FURNSIEHD BY THE ASSESSEE VIDE LETTER DATED 16.12.2003. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 13.1.2004 THE ASSESSEE AL SO PRODUCED ITS ENTIRE PURCHASE BILL FILE PURCHASED FROM M/S.HITECH CORPORATION ARE 89 ROLLS. BESIDES THIS 10 ROLLS ARE PURDCHASED FROM TWO OTHER PARTIES NAMELY M/S.SIGMA AND M/S.UMA CORPORATION. COPIES OF THE BILLS OF THESE PARTIES ARE ALSO OBTAINED AND PLACED ON RECORD. LOOKING TO THE CONSUMPTION O F WELDMASH THE PURCHASES FROM M/S.SIGMA AND M/S.UMA CORPORATIO N ALONE WOULD NOT BE SUFFICIENT. HOWEVER, IT IS EQUALLY TRUE THAT IN SPITE OF ALL THESE DETAILS THE ASSESSEE HAS NOT BEEN ABLE TO PROVE GENUINENESS OF PURCHASE MADE FORM M/S. TI-TECH CORPORATION . THE BURDEN OF PROVING GENUINENESS OF SUCH PURCHASE SQUARELY LIES WITH THE ASSESSEE, SPECIALLY IN LIGHT OF THE FACT T HAT THIS OFFICE WAS NOT ABLE TO TRACE THE SAID PARTY. IN VIEW OF THE A BOVE FACTS, IT IS ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 8 - CLEAR THAT PURCHASE OF WELDMASH AMOUNTING TO RS.5,70,985/- FORM M/S.HI-TECH CORPORATION IS NOT GENUINE ALTHOUGH CONSUMPTION OF SUCH MATERIAL IN CONSTRUCTION WORK OF ASSESSEES VA RIOUS SITES HAS BEEN EXPLAINED WITH SUPPORTING EVIDENCES AND ADEQUA TELY RECONCILED. IT APPEARS THAT ASSESSEE MAY HAVE OBT AINED BOGUS BILLS IN THE NAME OF M/S.HI-TECH CORPORATION AT INFLATED RATES TO SHOWN EXCESSIVE EXPENDITURE. THE DECISION GIVEN BY HON'BLE TRIBUNAL IN THE CASE OF M/S.VIJAY PROTEINS LTD. , WHICH IS BASED ON VARIOUS DECISION OF SUPREME COURT IS CLEARLY APPLIC ABLE IN THIS CASE. THE UNDERSIGNED IS NOT SATISFIED BOUT THE CO RRECTNESS & COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE. AFT ER TAKING INTO ACCOUNT ALL THE FACTORS OF THE CASE INCLUDING EVIDE NCE OF CONSUMPTION OF WELDMASH , A LUMP SUM ADDITION OF RS.3,00,000/- IS MADE TO THE TOTAL INCOME OF THE ASSESSEE AFTER INVO KING THE PROVISIONS OF SECTION 145(3). THE PENALTY PROCEED INGS U/S.271(1)(C) ARE BEING INITIATED SEPARATELY FOR CO NCEALMENT OF INCOME ON THIS ACCOUNT. 8. BEFORE THE FIRST APPELLATE AUTHORITY, CERTAIN FA CTS HAVE BEEN PLACED ON RECORD THAT CERTAIN CONTRACTS WERE COMPLETED THR OUGH WHICH THE CONSUMPTION OF THE WELDMASH WAS PROVED, HOWEVER, THE LEARNED CIT(APPEALS) HAS HELD THAT THE QUESTION OF BOGUS BI LLS IN THE NAME OF M/S.HI-TECH CORPORATION WAS NOT RULED OUT. IN HIS OPINION, BY RAISING THE BOGUS BILLS, THE PURCHASES HAVE BEEN INFLATED. FOLLOWING THE DECISION OF THE RESPECTED ITAT AHMEDABAD BENCH C IN THE C ASE OF VIJAY PROTEINS LTD. VS. ASST.CIT REPORTED AS 58 ITD 428, THE LEARNED CIT(APPEALS) HAS HELD THAT 25% SHOULD BE DISALLOWE D, HOWEVER, THERE WAS AN OUTSTANDING AMOUNT OF RS.1,55,685/- IT WAS U PHELD AS AN ADDITION IN THE HANDS OF THE ASSESSEE, AFTER ASSIGNING THE F OLLOWING REASONS:- 3.4. I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTH ORISED REPRESENTATIVE CAREFULLY AND HAVE ALSO GONE THROUGH THE DETAILS FILED BY THE AUTHORISED REPRESENTATIVE. FROM THE D ETAILS FILED BY THE APPELLANT FOR CONSUMPTION OF WELDMASH THE ASSES SING OFFICER ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 9 - WAS CONVINCED THAT THE WELDMASH HAD BEEN CONSUMED I N CONSTRUCTION WORK OF THE APPELLANT AT VARIOUS SITES . THE ONLY DOUBT OF THE ASSESSING OFFICER IS THAT THE APPELLANT HAS OBTAINED BOGUS BILLS IN THE NAME OF M/S.HI-TECH CORPORATION AT INF LATED RATES TO SHOW EXCESSIVE EXPENDITURE. BUT FOR THE SAID FINDI NG OF THE ASSESSING OFFICER THERE IS NO CONCRETE EVIDENCE WIT H THE ASSESSING OFFICER TO SHOW THAT BILLS HAVE BEEN RAISED BY M/S. HI-TECH CORPORATION AT INFLATED RATES. THE FACT THAT THE P ARTY M/S.HI-TECH CORPORATION WAS NOT FOUND IN THE ADDRESS MENTIONED BY THE APPELLANT ALSO SUPPORTS THE STAND OF THE ASSESSING OFFICER THAT THE APPELLANT HAS NOT DISCHARGED HIS BURDEN OF PROVING THE PURCHASES FROM THE SAID PARTY. IN VIEW OF THE ABOVE FACTS, AS CONSUMPTION OF WELDMASH CLAIMED BY THE APPELLANT HAS NOT BEEN TOTA LLY DENIED BY THE ASSESSING OFFICER, I WOULD HOLD THAT DECISION O F HON'BLE ITAT, AHMEDABAD IN THE CASE OF M/S.VIJAY PROTEINS REPORTE D IN 58 ITD 428 WOULD BE APPLICABLE AND 25% OF THE PAYMENTS SHO ULD BE DISALLOWED WHICH COMES TO RS.1,42,750/-. HOWEVER, I FIND THAT THE APPELLANT HAS NOT PAID AN AMOUNT OF RS.1,55,685/- A S ON 31/3/2001 OUT OF THE PURCHASE CLAIMED TO HAVE BEEN MADE FROM M/S. HI-TECH CORPORATION, HENCE THE CORRECT AMOUNT TO BE DISALLO WED IS RS.1,55,685/- AS BOGUS LIABILITY TO THAT EXTENT HAS BEEN SHOWN. ACCORDINGLY, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE REDUCED TO RS.1,55,685/-. THIS GROU ND IS THUS PARTLY ALLOWED. 9. WE HAVE HEARD BOTH THE SIDES. IN THE LIGHT OF T HE COMPILATION FILED, THE MATERIAL PLACED ON RECORD AND ON THE BASIS OF THE DISCUSSION MADE HEREINABOVE, WE ARE UNABLE TO ACCEPT THE PLEADINGS OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE BECAUSE T HE REVENUE AUTHORITIES HAVE MADE CERTAIN INVESTIGATIONS AND, T HEREAFTER, ARRIVED AT THE CONCLUSION THAT THE PURCHASES COULD NOT BE TOTA LLY VERIFIED. WE HAVE ALSO NOTICED THAT THE FIRST APPELLATE AUTHORITY HAS FOLLOWED A DECISION OF THE RESPECTED CO-ORDINATE BENCH PRONOUNCED IN THE C ASE OF VIJAY PROTEINS LTD. REPORTED AS 58 ITD 428, WHEREIN 25% O F THE PURCHASE PRICE ITA NO. 2899/AHD/2004 SHRI AKSHAY ANANTRAI GANDHI VS. ITO ASST.YEAR - 2001-02 - 10 - WAS DISALLOWED. THE LEARNED CIT(APPEALS) HAS THOUG HT IT PROPER AND, ACCORDINGLY, THE DISALLOWANCE WAS MADE WHICH ACCORD ING TO US NEEDS NO DISTURBANCE. THE ACTION OF THE LEARNED CIT(APPEALS ) IS HEREBY AFFIRMED AND THIS GROUND IS HEREBY DISMISSED. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED IN THE TERMS INDICATED SUPRA. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 20/ 08 /2010. SD/- SD/- ( G.D.AGRAWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 20 / 08 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD