DCIT CEN CIR 2(3), MUMBAI V. HI POINT SERVICES (INDIA) P.LTD, MUMBAI

ITA 4373/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9044 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 23-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Capital asset; Depreciation; Peak credit; Question of law
• Section: 69C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, H MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.4373 TO 4376/MUM/2016 ASSESSMENT YEAR: 2007-08 TO 2010-11 DCIT, CENTRAL CIRCLE-2(3), ROOM NO.803, 8 TH FLOOR, OLD C.G. O. ANNEXE BUILDING, M.K. ROAD, MUMBAI-400020 / VS. M/S HI POINT SERVICES (INDIA) PVT. LTD. 310, GOKUL ARCADE, CST NO.173-A, SWAMI NITYANAND ROAD, VILE PARLE (E), MUMBAI-400057 ( / REVENUE) ( !' /ASSESSEE) PAN. NO. AAACH2030C ! ' # / DATE OF HEARING : 11/10/2017 ! ' # / DATE OF ORDER: 11/10/2017 &'( / REVENUE BY SHRI M.C. OMI NINGSHEN-DR $%& ' &'( / ASSESSEE BY SHRI HIRO RAI ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF THE FOUR APPEALS IS BY THE REVENUE AG AINST THE IMPUGNED ORDERS ALL DATED 02/03/2016 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, WHEREIN, COMMON GROUND S HAVE BEEN RAISED. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO RESTRICTING THE DISALLOWANCE U/S 69C OF THE INCO ME TAX ACT, 1961 (HEREINAFTER THE ACT) ON ACCOUNT UNEXPLAINED P URCHASES TO 15% AGAINST THE PEAK CREDIT MADE BY THE LD. ASSE SSING OFFICER, DETECTED DURING THE COURSE OF SURVEY U/S 1 33A OF THE ACT. 2. DURING HEARING, THE LD. DR, SHRI M. C. OMI NINGSHEN, ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUND RAISED BY DEFENDING THE ADDITION MADE BY THE LD. ASSESSING OFFICER. ON THE OTHER HAND, SHRI HIRO RA I, LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE IMPUGNED ORD ERS BY PLACING RELIANCE UPON THE ORDER OF THE FIRST APPELL ATE AUTHORITY. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 3 TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDE R, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. DR, IF KEPT IN JUXTAPOSITION AND ANALYZED, BEFORE ADVERTIN G FURTHER, THE FACTS OF THE PRESENT APPEALS BEFORE US, WE DEEM IT APPROPRIATE TO CONSIDER VARIOUS DECISIONS FROM HON' BLE HIGH COURTS/HON'BLE APEX COURT, SO THAT WE CAN REACH TO A PROPER CONCLUSION. THE HON'BLE GUJARAT HIGH COURT IN SANJA Y OILCAKES INDUSTRIES VS CIT (2009) 316 ITR 274 (GUJ. ) HELD AS UNDER:- 11 . HAVING HEARD THE LEARNED ADVOCATES APPEARING FOR THE RESPECTIVE PARTIES, IT IS APPARENT THAT NO INTERFER ENCE IS CALLED FOR IN THE IMPUGNED ORDER OF THE TRIBUNAL DATED APRIL 29, 1994, READ WITH THE ORDER DATED SEPTEMBER 29, 1994, MADE IN MISCELL ANEOUS APPLICATION. IN THE PRINCIPAL ORDER THE TRIBUNAL HA S RECORDED THE FOLLOWING FINDINGS : '8.3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE FACTS ON RECORD. IN OUR OPINION, THE ACTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) CONFIRMING 25 PER CENT. OF THE AMOUNTS CLAIMED IS FAIR AND REASONABLE AND NO INTERFERENCE IS CALLED FOR. THE COMMIS SIONER OF INCOME-TAX (APPEALS) HAS GONE THROUGH THE PURCHASE PRICES OF THE RAW MATERIAL PREVALENT A T THE TIME AND RIGHTLY CAME TO THE CON CLUSION THAT THE DISALL OWANCE TO THE EXTENT OF 25 PER CENT. WAS CALLED FOR. IT IS ESTABL ISHED THAT THE PARTIES WERE NOT TRACEABLE ; THEY OPENED THE BANK A CCOUNTS IN WHICH THE CHEQUES WERE CREDITED BUT SOON THEREAFTER THE AMOUNTS WERE WITHDRAWN BY BEARER CHEQUES. THAT FAIR LY LEADS TO THE CONCLUSION THAT THESE PARTIES WERE PERHAPS C REATION OF THE ASSESSEE ITSELF FOR THE PURPOSE OF BANKING PURC HASES INTO BOOKS OF ACCOUNT BECAUSE THE PURCHASES WITH BILLS W ERE NOT FEASIBLE. THUS, THE ABOVENOTED PARTIES BECOME CONDU IT PIPES BETWEEN THE ASSESSEE-FIRM AND THE SELLERS OF THE RA W MATERIALS. UNDER THE CIRCUMSTANCES, IT WAS NOT IMPOSSIBLE FOR THE ASSESSEE TO INFLATE THE PRICES OF RAW MATERIALS. ACCORDINGLY , AN ADDITION AT THE RATE OF 25 PER CENT. FOR EXTRA PRICE PAID BY TH E ASSESSEE THAN OVER AND ABOVE THE PREVALENT PRICE IS FAIR AND REASONABLE AND WE ACCORDINGLY CONFIRM THE FINDING OF THE COMMI S SIONER OF INCOME-TAX (APPEALS).' ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 4 12. THUS, IT IS APPARENT THAT BOTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE CONCURRENTLY ACCEPTED THE FIN DING OF THE ASSESSING OFFICER THAT THE APPARENT SELLERS WHO HAD ISSUED SALE BILLS WERE NOT TRACEABLE. THAT GOODS WERE RECEIVED FROM THE PARTIES OTHER THAN THE PERSONS WHO HAD ISSUED BILLS FOR SUCH GOODS. THOUGH THE PURCHASES ARE SHOWN TO HAVE BEEN MADE BY MAKING PAYMENT THEREOF BY ACCOUNT PAYEE CHEQUES, TH E CHEQUES HAVE BEEN DEPOSITED IN BANK ACCOUNTS OSTENS IBLY IN THE NAME OF THE APPARENT SELLERS, THEREAFTER THE EN TIRE AMOUNTS HAVE BEEN WITHDRAWN BY BEARER CHEQUES AND THERE IS NO TRACE OR IDENTITY OF THE PERSON WITHDRAWING THE AMOUNT FR OM THE BANK ACCOUNTS. IN THE LIGHT OF THE AFORESAID NATURE OF EVIDENCE IT IS NOT POSSIBLE TO RECORD A DIFFERENT CONCLUSION , DIFFERENT FROM THE ONE RECORDED BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL CONCURRENTLY HOLDING THAT THE APPARENT SEL LERS WERE NOT GENUINE, OR WERE ACTING AS CONDUIT BETWEEN THE ASSESSEE- FIRM AND THE ACTUAL SELLERS OF THE RAW MATERIALS. B OTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE, THERE FORE, COME TO THE CONCLUSION THAT IN SUCH CIRCUMSTANCES, THE LIKELIHOOD OF THE PURCHASE PRICE BEING INFLATED CAN NOT BE RULED OUT AND THERE IS NO MATERIAL TO DISLODGE SUCH FINDI NG. THE ISSUE IS NOT WHETHER THE PURCHASE PRICE REFLECTED IN THE BOOKS OF ACCOUNT MATCHES THE PURCHASE PRICE STATED TO HAVE B EEN PAID TO OTHER PERSONS. THE ISSUE IS WHETHER THE PURCHASE PRICE PAID BY THE ASSESSEE IS REFLECTED AS RECEIPTS BY THE REC IPIENTS. THE ASSESSEE HAS, BY SET OF EVIDENCE AVAILABLE ON RECOR D, MADE IT POSSIBLE FOR THE RECIPIENTS NOT BEING TRACEABLE FOR THE PURPOSE OF INQUIRY AS TO WHETHER THE PAYMENTS MADE BY THE A SSESSEE HAVE BEEN ACTUALLY RECEIVED BY THE APPARENT SELLERS . HENCE, THE ESTIMATE MADE BY THE TWO APPELLATE AUTHORITIES DOES NOT WARRANT INTERFERENCE. EVEN OTHERWISE, WHETHER THE E STIMATE SHOULD BE AT A PARTICULAR SUM OR AT A DIFFERENT SUM , CAN NEVER BE AN ISSUE OF LAW. IN THE AFORESAID CASE, THE HON'BLE HIGH COURT ACCEP TED THAT THE APPARENT SELLERS, WHO ISSUED THE SAID BILL S WERE NOT TRACEABLE AND THE GOODS RECEIVED FROM PARTIES OTHER THAN THE PERSONS, WHO HAD ISSUED THE BILLS FOR SUCH GOODS. T HE PURCHASES WERE SHOWN TO HAVE BEEN MADE BY MAKING ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 5 PAYMENTS, THROUGH BANKING CHANNEL AND THUS THE APPA RENT SELLERS WERE NOT GENUINE OR WERE ACTING AS CONDUIT BETWEEN THE ASSESSEE AND THE ACTUAL SELLER. IN SUCH A SITUATION , THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) AS WELL AS BY THE TRIBUNAL WAS AFFIRMED. HON'BLE APEX COURT IN KACHWALA GEMS VS JCIT (2007) 158 TAXMAN 71 OBSERVED THAT AN ELEMENT OF GUESSWORK IS INEVITABLE IN CASES, WHERE ESTIMATION OF INCOME IS WARRANTED. 2.2. THE HON'BLE GUJARAT HIGH COURT IN CIT VS BHOL ANATH POLY FAB. PVT. LTD. (2013) 355 ITR 290 (GUJ.) HELD/ OBSERVED AS UNDER:- 5. HAVING COME TO SUCH A CONCLUSION, HOWEVER, THE TRIBUNAL WAS OF THE OPINION THAT THE PURCHASES MAY HAVE BEEN MADE FROM BOGUS PARTIES, NEVERTHELESS, THE PURCHASES THEMSELVES WERE NOT BOG US. THE TRIBUNAL ADVERTED TO THE FACTS AND DATA ON RECORD AND CAME T O THE CONCLUSION THAT THE ENTIRE QUANTITY OF OPENING STOCK, PURCHASE S AND THE QUANTITY MANUFACTURED DURING THE YEAR UNDER CONSIDERATION WE RE SOLD BY THE ASSESSEE. THEREFORE, THE PURCHASES OF THE ENTIRE 1, 02,514 METRES OF CLOTH WERE SOLD DURING THE YEAR UNDER CONSIDERATION . THE TRIBUNAL, THEREFORE, ACCEPTED THE ASSESSEE'S CONTENTION THAT THE FINISHED GOODS WERE PURCHASED BY THE ASSESSEE, MAY BE NOT FROM THE PARTIES SHOWN IN THE ACCOUNTS, BUT FROM OTHER SOURCES. IN THAT VIEW OF THE MATTER, THE TRIBUNAL WAS OF THE OPINION THAT NOT THE ENTIRE AMO UNT, BUT THE PROFIT MARGIN EMBEDDED IN SUCH AMOUNT WOULD BE SUBJECTED T O TAX. THE TRIBUNAL RELIED ON ITS EARLIER DECISION IN THE CASE OF SANKET STEEL TRADERS AND ALSO MADE REFERENCE TO THE TRIBUNAL'S DECISION IN THE CASE OF VIJAY PROTEINS LTD. V. ASST. CIT [1996] 58 ITD 428 (AHD). 6. WE ARE OF THE OPINION THAT THE TRIBUNAL COMMITTE D NO ERROR. WHETHER THE PURCHASES THEMSELVES WERE BOGUS OR WHETHER THE PARTIES FROM WHOM SUCH PURCHASES WERE ALLEGEDLY MADE WERE BOGUS IS ESSENTIALLY A QUESTION OF FACT. THE TRIBUNAL HAVING EXAMINED THE EVIDENCE ON RECORD CAME TO THE CONCLUSION THAT THE ASSESSEE DID PURCHA SE THE CLOTH AND SELL ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 6 THE FINISHED GOODS. IN THAT VIEW OF THE MATTER, AS NATURAL COROLLARY, NOT THE ENTIRE AMOUNT COVERED UNDER SUCH PURCHASE, BUT THE PROFIT ELEMENT EMBEDDED THEREIN WOULD BE SUBJECT TO TAX. THIS WAS THE VIEW OF THIS COURT IN THE CASE OF SANJAY OILCAKE INDUSTRIES V. C IT [2009] 316 ITR 274 (GUJ). SUCH DECISION IS ALSO FOLLOWED BY THIS COURT IN A JUDGMENT DATED AUGUST 16, 2011, IN TAX APPEAL NO. 679 OF 2010 IN T HE CASE OF CIT V. KISHOR AMRUTLAL PATEL. IN THE RESULT, TAX APPEAL IS DISMISSED. 2.3. LIKEWISE, THE HON'BLE GUJARAT HIGH COURT IN C IT VS VIJAY M. MISTRY CONSTRUCTION LTD. (2013) 355 ITR 49 8 (GUJ.) HELD/OBSERVED AS UNDER:- 6. AS IS APPARENT FROM THE FACTS NOTED HEREINABOVE , THE COMMISSIONER (APPEALS) AFTER APPRECIATING THE EVIDENCE ON RECORD HAS FOUND THAT THE ASSESSEE HAD IN FACT MADE THE PURCHASES AND, HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE ENTIRE AMOUNT. HE, HOWEVER, WAS OF THE VIEW THAT THE ASSESSEE HAD INFLATED THE PURCHASES AND, ACCORDINGLY, BY PLACING RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF VIJAY PROTEINS (SUPRA) RESTRICTED THE DISAL LOWANCE TO 20 PER CENT. THE TRIBUNAL IN THE IMPUGNED ORDER HAS FOLLOWED ITS EARLIER ORDER IN THE CASE OF VIJAY PROTEINS TO THE LETTER AND ENHANCED T HE DISALLOWANCE TO 25 PER CENT. THUS, IN BOTH CASES, THE DECISION OF THE COMMISSIONER (APPEALS) AS WELL AS THAT OF THE TRIBUNAL IS BASED ON ESTIMATE. THIS HIGH COURT IN THE CASE OF SANJAY OIL CAKE [2009] 316 ITR 274 (GUJ) HAS HELD THAT WHETHER AN ESTIMATE SHOULD BE AT A PARTICULAR SUM OR AT A DIFFERENT SUM CAN NEVER BE A QUESTION OF LAW. 7. THE APEX COURT IN THE CASE OF KACHWALA GEMS [200 7] 288 ITR 10 (SC) HAS HELD THAT IN A BEST JUDGMENT ASSESSMENT THERE I S ALWAYS A CERTAIN DEGREE OF GUESS WORK. NO DOUBT, THE AUTHORITIES SHO ULD TRY TO MAKE AN HONEST AND FAIR ESTIMATE OF THE INCOME EVEN IN A BE ST JUDGMENT ASSESSMENT AND SHOULD NOT ACT TOTALLY ARBITRARILY B UT THERE IS NECESSARILY SOME AMOUNT OF GUESS WORK INVOLVED IN A BEST JUDGME NT ASSESSMENT. 8. EXAMINING THE FACTS OF THE PRESENT CASE IN THE L IGHT OF THE AFORESAID DECISIONS, THE DECISION OF THE TRIBUNAL, BEING BASE D ON AN ESTIMATE, DOES NOT GIVE RISE TO ANY QUESTION OF LAW SO AS TO WARRA NT INTERFERENCE. 9. IN SO FAR AS THE PROPOSED QUESTIONS (C), (D) AND (E) ARE CONCERNED, THE SAME ARE SIMILAR TO THE PROPOSED QUESTION (A) W HEREIN THE TRIBUNAL HAS RESTRICTED THE ADDITION TO 25 PER CENT. ON SIMI LAR FACTS. IN THE CIRCUMSTANCES, FOR THE REASONS STATED HEREINABOVE, THE SAID GROUNDS OF APPEAL DO NOT GIVE RISE TO ANY QUESTION OF LAW. 10. AS REGARDS THE PROPOSED QUESTION (B) WHICH PERT AINS TO THE DELETION OF ADDITION OF RS. 7,88,590 MADE ON ACCOUNT OF INFL ATION OF EXPENSES PAID TO METAL AND MACHINE TRADING CO. (MMTC), THE A SSESSING OFFICER HAS FOUND THAT MMTC WAS A PARTNERSHIP FIRM OF SHRI NITIN GAJJAR ALONG WITH HIS FATHER AND BROTHER OPERATING FROM BHAVNAGA R. A PERUSAL OF THEIR TRANSACTIONS WITH THE ASSESSEE INDICATED THAT THERE IS SOME INFLATION OF EXPENSES AS DETAILED IN PARAGRAPH 6.1 OF THE ASSESS MENT ORDER. AFTER ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 7 CONSIDERING THE EVIDENCE ON RECORD, THE ASSESSING O FFICER DISALLOWED THE AMOUNT RS. 7,88,590 ON ACCOUNT OF PAYMENT MADE TO M MTC. 11. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COM MISSIONER (APPEALS), WHO UPON APPRECIATION OF THE EVIDENCE ON RECORD FOUND THAT THE ASSESSING OFFICER HAD NOT REJECTED THE GENUINEN ESS OF THE PURCHASES MADE FROM MMTC WHILE MAKING THE DISALLOWANCE. HIS O BSERVATIONS WERE BASED ON INFLATION OF RATES WHICH WERE BEING CHARGE D FROM THE ASSESSEE. ACCORDING TO THE COMMISSIONER (APPEALS), THOUGH MMT C IN SOME RESPECT COULD BE ATTRIBUTED TO BE ASSOCIATED WITH THE ASSES SEE-COMPANY, STILL IT COULD NOT BE EXPECTED THAT MMTC WAS CARRYING OUT IT S BUSINESS WITHOUT ANY MOTIVE OR PROFIT. ACCORDING TO THE COMMISSIONER (APPEALS), IT WAS PROVED BY THE ASSESSEE THAT THE RATES CHARGED BY MM TC WERE COMPARABLE WITH THE PREVAILING MARKET RATES, NO SUC H ADDITION CAN STAND. THE COMMISSIONER (APPEALS) TOOK NOTE OF THE FACT THAT IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE PURCHASE S HAD BEEN DIRECTLY EFFECTED FROM THIRD PARTIES AND NOT DIRECTLY FROM M MTC ; THE DIFFERENCE COULD NOT BE THE NET PROFIT IN THE HANDS OF MMTC ; AND THAT WHILE CONDUCTING THE ENTIRE EXERCISE MMTC WOULD HAVE TO I NCUR CERTAIN EXPENDITURE IN TRANSPORTATION, IN ENGAGING PERSONNE L IN THE OFFICE AND OTHER OPERATIONS AND WAS ACCORDINGLY OF THE VIEW TH AT THERE WAS NO CASE OF ACTUAL INFLATION OF RATES AND DELETED THE ADDITI ON. 12. THE TRIBUNAL, IN THE IMPUGNED ORDER, HAS CONCUR RED WITH THE FINDINGS RECORDED BY THE COMMISSIONER (APPEALS) AND HAS FOUN D THAT THE ASSESSEE HAD MADE PURCHASES FROM MMTC AT THE PREVAI LING MARKET RATES AND THAT MMTC HAD INCURRED CERTAIN EXPENDITURE IN E NGAGING PERSONNEL IN THE OFFICE AND OTHER OPERATIONS AND WOULD MAKE S OME INCOME FROM THE ENTIRE EXERCISE. IN THE CIRCUMSTANCES, THE PURC HASES MADE BY THE ASSESSEE FROM MMTC WOULD NOT BE HIT BY THE PROVISIO NS OF SECTION 40A(2) OF THE ACT. 13. THUS, THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IS BASED ON CONCURRENT FINDINGS OF FACT RECORDED BY THE COMMISS IONER (APPEALS) AS WELL AS THE TRIBUNAL. IT IS NOT THE CASE OF THE REV ENUE THAT THE TRIBUNAL HAS TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL OR T HAT ANY RELEVANT MATERIAL HAS NOT BEEN TAKEN INTO CONSIDERATION. IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY BEING POINTED OUT ON BEHAL F OF THE REVENUE, THE IMPUGNED ORDER BEING BASED ON CONCURRENT FINDINGS O F FACT RECORDED BY THE TRIBUNAL UPON APPRECIATION OF THE EVIDENCE ON R ECORD, DOES NOT GIVE RISE TO ANY QUESTION OF LAW IN SO FAR AS THE PRESEN T GROUND OF APPEAL IS CONCERNED. 14. IN RELATION TO THE PROPOSED QUESTION (F) WHICH RELATES TO THE DELETION OF ADDITION OF RS. 44,54,426 MADE ON ACCOUNT OF PUR CHASE OF CRANE AND ALLOWING DEPRECIATION ON THE SAME, THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE HAD PURCHASED A CRAWLER CRANE FOR AN A MOUNT OF RS. 24,61,000 EXCLUDING THE COST OF SPARE PARTS OF RS. 14,98,490. THE ASSESSING OFFICER AFTER EXAMINING THE EVIDENCE ON R ECORD AND CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE, MADE ADDITION OF RS. 44,54,426, RS. 39,59,490 BEING THE PURCHASE PRICE O F THE CRANE ALONG WITH ITS SPARE PARTS AND RS. 4,94,936 BEING DEPRECI ATION CLAIMED BY THE ASSESSEE. THE COMMISSIONER (APPEALS), UPON APPRECIA TION OF EVIDENCE ON RECORD, WAS OF THE VIEW THAT THE ASSESSING OFFIC ER HAS NOT APPRECIATED THE FACTS OF THE CASE PROPERLY AND HAD MADE DISALLOWANCE WHICH WAS NOT PERMITTED BY THE INCOME-TAX ACT. IT W AS HELD THAT DISALLOWANCE COULD ONLY HAVE BEEN MADE IN RESPECT O F EXPENSES DEBITED ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 8 TO THE PROFIT AND LOSS ACCOUNT WHEREAS IN THE PRESE NT CASE THE PURCHASE OF CRANE AND SPARE PARTS OF THE CRANE AND OTHER MAC HINERIES WERE IN THE NATURE OF ACQUISITION OF CAPITAL ASSET. ACCORDING T O THE COMMISSIONER (APPEALS), THE DISALLOWANCE COULD HAVE BEEN MADE ON DEPRECIATION ONLY IF AT ALL THE ASSESSING OFFICER CONCLUSIVELY PROVED THAT THE PURCHASES OF CRANE AND OTHER PARTS ARE BOGUS. UPON APPRECIATION OF THE MATERIAL ON RECORD THE COMMISSIONER (APPEALS) FOUND THAT THE AS SESSING OFFICER HAS SIMPLY BRUSHED ASIDE ALL THE EVIDENCE ON ACCOUNT OF TECHNICAL INFIRMITIES AND THAT THE EVIDENCE SUCH AS OCTROI RECEIPT ; HYPO THECATION OF THE CRANE TO THE BANK; EXISTENCE OF THE CRANE EVEN TILL DATE WITH THE ASSESSEE CONCLUSIVELY PROVED THAT THE CRANE WAS PURCHASED AN D IT WAS IN USE EVEN AS ON DATE WITH THE ASSESSEE. THE COMMISSIONER (APP EALS) ACCORDINGLY FOUND THAT THERE WAS NO SCOPE FOR ANY DISALLOWANCE AND ACCORDINGLY DELETED THE DISALLOWANCE MADE ON ACCOUNT OF PURCHAS E OF CRANE AND ALLOWED THE DEPRECIATION AS CLAIMED BY THE ASSESSEE . 15. THE TRIBUNAL, IN THE IMPUGNED ORDER, HAS NOTED THAT THE COST OF CRANE WAS NEVER CLAIMED BY THE ASSESSEE IN THE RETU RN OF INCOME. BEFORE THE TRIBUNAL, THE ASSESSEE PRODUCED THE EVIDENCE TH AT THE CRANE IN QUESTION WAS REGISTERED WITH THE RTO AND THE SAME W AS WHOLLY AND EXCLUSIVELY USED FOR THE PURPOSES OF ITS BUSINESS. THE TRIBUNAL, THEREFORE, HELD THAT THE COMMISSIONER (APPEALS) WAS LEGALLY AND FACTUALLY CORRECT IN DELETING THE DISALLOWANCE OF C OST OF CRANE AS WELL AS DEPRECIATION THEREON. 16. FROM THE FACTS EMERGING FROM THE RECORD, IT IS APPARENT THAT THE ASSESSEE HAD NEVER CLAIMED THE COST OF THE CRANE IN THE RETURN NOR HAD IT DEBITED THE EXPENSES TO THE PROFIT AND LOSS ACCOUNT , AND AS SUCH THE QUESTION OF DISALLOWING THE SAME AND ADDING THE SAM E TO THE INCOME WOULD NOT ARISE. MOREOVER, IN THE ABSENCE OF ANY EV IDENCE TO INDICATE THAT THE PURCHASE WAS BOGUS OR THAT THE CRANE IN FA CT DID NOT EXIST, THE QUESTION OF DISALLOWING THE DEPRECATION IN RESPECT OF THE SAME ALSO WOULD NOT ARISE. WHEN THE ASSESSEE HAD CONCLUSIVELY PROVED THE PURCHASE AND EXISTENCE OF THE CRANE, AND HAD NOT DE BITED THE EXPENSES TO THE PROFIT AND LOSS ACCOUNT, NO ADDITION COULD H AVE BEEN MADE IN RESPECT OF THE PURCHASE PRICE NOR COULD HAVE DEPREC IATION BEEN DISALLOWED IN RESPECT THEREOF. THE TRIBUNAL WAS, TH EREFORE, JUSTIFIED IN DELETING THE ADDITION AS WELL AS DISALLOWANCE OF DE PRECIATION. 17. IN THE LIGHT OF THE AFORESAID DISCUSSION, IT IS NOT POSSIBLE TO STATE THAT THERE IS ANY LEGAL INFIRMITY IN THE IMPUGNED ORDER MADE BY THE TRIBUNAL SO AS TO WARRANT INTERFERENCE. IN THE ABSENCE OF AN Y QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW, THE APPEA L IS DISMISSED. 2.4. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ASHISH INTERNATIONAL LTD. (ITA NO.4299/2009) ORDER DATED 22/02/2011, OBSERVED/HELD AS UNDER:- THE QUESTION RAISED IN THIS APPEAL IS, WHETHER THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF BO GUS PURCHASES ALLEGEDLY MADE BY THE ASSESSEE FROM M/S. THAKKAR AG RO ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 9 INDUSTRIAL CHEM SUPPLIES P. LTD. ACCORDING TO THE R EVENUE, THE DIRECTOR OF M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPL IES P. LTD. IN HIS STATEMENT HAD STATED THAT THERE WERE NO SALES / PURCHASES BUT THE TRANSACTIONS WERE ONLY ACCOMMODATION BILLS NOT INVOLVING ANY TRANSACTIONS. THE TRIBUNAL HAS RECORDED A FINDI NG OF FACT THAT THE ASSESSEE HAD DISPUTED THE CORRECTNESS OF THE AB OVE STATEMENT AND ADMITTEDLY THE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THE CONCERNED DIRECTOR OF M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPLIES P. LTD. WHO H AD MADE THE ABOVE STATEMENT. THE APPELLATE AUTHORITY HAD SO UGHT REMAND REPORT AND EVEN AT THAT STAGE THE GENUINENESS OF TH E STATEMENT HAS NOT BEEN ESTABLISHED BY ALLOWING CROSS EXAMINAT ION OF THE PERSON WHOSE STATEMENT WAS RELIED UPON BY THE REVEN UE. IN THESE CIRCUMSTANCES, THE DECISION OF THE TRIBUNAL B EING BASED ON THE FACT, NO SUBSTANTIAL QUESTION OF LAW CAN BE SAI D TO ARISE FROM THE ORDER OF THE TRIBUNAL. THE APPEAL IS DISMISSED WITH NO ORDER AS TO COSTS. 2.5. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS NIKUNJ EXIM ENTERPRISES PVT. LTD. (2015) 372 ITR 61 9 (BOM.) HELD/OBSERVED AS UNDER:- 7. WE HAVE CONSIDERED THE SUBMISSION ON BEHALF OF THE REVENUE. HOWEVER, FROM THE ORDER OF THE TRIBUNAL DATED APRIL 30, 2010, WE FIND THAT THE TRIBUNAL HAS DELETED THE ADDITIONS ON ACCOUNT OF BOGUS PURCHASES NOT ONLY ON THE BASIS OF STOCK STAT EMENT, I.E., RECONCILIATION STATEMENT BUT ALSO IN VIEW OF THE OT HER FACTS. THE TRIBUNAL RECORDS THAT THE BOOKS OF ACCOUNT OF THE R ESPONDENT- ASSESSEE HAVE NOT BEEN REJECTED. SIMILARLY, THE SAL ES HAVE NOT BEEN DOUBTED AND IT IS AN ADMITTED POSITION THAT SU BSTANTIAL AMOUNT OF SALES HAVE BEEN MADE TO THE GOVERNMENT DE PARTMENT, I.E., DEFENCE RESEARCH AND DEVELOPMENT LABORATORY, HYDERABAD. FURTHER, THERE WERE CONFIRMATION LETTERS FILED BY T HE SUPPLIERS, COPIES OF INVOICES FOR PURCHASES AS WELL AS COPIES OF BANK STATEMENT ALL OF WHICH WOULD INDICATE THAT THE PURC HASES WERE IN FACT MADE. IN OUR VIEW, MERELY BECAUSE THE SUPPLIER S HAVE NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE COMMIS SIONER OF INCOME-TAX (APPEALS), ONE CANNOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE RESPONDENT-ASSESSEE. THE ASSES SING OFFICER AS WELL AS THE COMMISSIONER OF INCOME-TAX (APPEALS) HAVE DISALLOWED THE DEDUCTION OF RS. 1.33 CRORES ON ACCO UNT OF PURCHASES MERELY ON THE BASIS OF SUSPICION BECAUSE THE SELLERS AND THE CANVASSING AGENTS HAVE NOT BEEN PRODUCED BE FORE THEM. WE FIND THAT THE ORDER OF THE TRIBUNAL IS WELL A RE ASONED ORDER TAKING INTO ACCOUNT ALL THE FACTS BEFORE CONCLUDING THAT THE PURCHASES OF RS. 1.33 CRORES WAS NOT BOGUS. NO FAUL T CAN BE FOUND WITH THE ORDER DATED APRIL 30, 2010, OF THE T RIBUNAL. ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 10 2.6. THE HON'BLE GUJARAT HIGH COURT IN CIT VS M.K. BROTHERS (163 ITR 249) HELD/OBSERVED AS UNDER:- BEING AGGRIEVED BY THE AFORESAID ORDER, THE ASSESS EE WENT IN SECOND APPEAL BEFORE THE TRIBUNAL. IT WAS URGED ON BEHALF OF THE ASSESSEE THAT THE TRANSACTIONS IN QUESTION WERE NOR MAL BUSINESS TRANSACTIONS AND THE ASSESSEE HAD MADE PAYMENTS BY CHEQUES. THE PARTIES DID NOT COME FORWARD AND IF THEY DID NOT CO ME, THE ASSESSEE SHOULD NOT SUFFER. HOWEVER, ON BEHALF OF THE REVENU E, IT WAS URGED THAT DETAILED INQUIRIES WERE MADE AND THEREAFTER TH E CONCLUSION WAS REACHED. THE TRIBUNAL FOUND THAT THERE WAS NO EVIDE NCE ANYWHERE THAT THESE CONCERNS GAVE BOGUS VOUCHERS TO THE ASSE SSEE. NO DOUBT, THERE WERE CERTAIN DOUBTFUL FEATURES, BUT THE EVIDE NCE WAS NOT ADEQUATE TO CONCLUDE THAT THE PURCHASES MADE BY THE ASSESSEE FROM THE SAID PARTIES WERE BOGUS. THE TRIBUNAL ACCORDING LY, DID NOT SUSTAIN THE ADDITION RETAINED BY THE APPELLATE ASSI STANT COMMISSIONER. HENCE, AT THE INSTANCE OF THE REVENUE , THE AFORESAID QUESTION HAS BEEN REFERRED TO THIS COURT FOR OPINIO N. ON A PERUSAL OF THE ORDER OF THE TRIBUNAL, IT CLEAR LY APPEARS THAT WHETHER THE SAID TRANSACTIONS WERE BOGUS OR NOT WAS A QUESTION OF FACT. THE TRIBUNAL HAS ALSO POINTED OUT THAT NOTHIN G IS SHOWN TO INDICATE THAT ANY PART OF THE FUND GIVEN BY THE ASS ESSEE TO THESE PARTIES CAME BACK TO THE ASSESSEE IN ANY FORM. IT I S FURTHER OBSERVED BY THE TRIBUNAL THAT THERE IS NO EVIDENCE ANYWHERE THAT THESE CONCERNS GAVE VOUCHERS TO THE ASSESSEE. EVEN THE TWO STATEMENTS DO NOT IMPLICATE THE TRANSACTIONS WITH T HE ASSESSEE IN ANY WAY. WITH THESE OBSERVATIONS, THE TRIBUNAL ULTI MATELY HAS OBSERVED THAT THERE ARE CERTAIN DOUBTFUL FEATURES, BUT THE EVIDENCE IS NOT ADEQUATE TO CONCLUDE THAT THE PURCHASES MADE BY THE ASSESSEE FROM THESE PARTIES WERE BOGUS. IT MAY BE S TATED THAT THE ASSESSEE WAS GIVEN CREDIT FACILITIES FOR A SHORT DU RATION AND THE PAYMENTS WERE GIVEN BY CHEQUES. WHEN THAT IS SO, IT CANNOT BE SAID THAT THE ENTRIES FOR THE PURCHASES OF THE GOODS MAD E IN THE BOOKS OF ACCOUNT WERE BOGUS ENTRIES. WE, THEREFORE, DO NOT F IND THAT THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IS AGAINST TH E WEIGHT OF EVIDENCE. IN THAT VIEW OF THE MATTER, WE ANSWER THE QUESTION IN THE AFFIRMATIVE, THAT IS, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ACCORDINGLY, THE REFERENCE STANDS DISPOSED OF WITH NO ORDER AS TO COSTS. ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 11 2.7. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS RAJEEV G. KALATHIL (2015) 67 SOT 52 (MUM. TRIB.)(URO), IDENTICALLY, HELD AS UNDER:- 2.2.AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PRE FERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HI M IT WAS ARGUED THAT ASSESSEE HAD FILED COPIES OF BILLS OF PURCHASE FROM DKE AND NBE, THAT BOTH THE SUPPLIERS WERE REGISTERED DEALER S AND WERE CARRYING PROPER VAT AND REGISTRATION NO.S, THAT LED GER ACCOUNTS OF THE PARTIES IN ASSESSEE'S BOOKS SHOWED BILLS ACCOUN TED FOR, THAT PAYMENT WAS MADE BY CHEQUES, THAT A CERTIFICATE FRO M THE BANKER GIVING DETAILS OF CHEQUE PAYMENT TO THE SAID PARTIE S WAS ALSO FURNISHED. COPIES OF THE CONSIGNMENT, RECEIVED FROM THE GOVERNMENT APPROVED TRANSPORT CONTRACTORS SHOWING T HAT MATERIAL PURCHASED WAS ACTUALLY DELIVERED AT THE SITE WAS FU RNISHED BEFORE THE AO. IT WAS ALSO ARGUED THAT SOME OF THE MATERIA L PURCHASED FROM THE SAID PARTIES WERE LYING PART OF CLOSING ST OCK AS ON 31.03.2009 AS PER THE STATEMENT SUBMITTED ON RECORD . AFTER CONSIDERING THE ASSESSMENT ORDER AND THE SUBMISSION S MADE BY THE ASSESSEE, FAA HELD THAT THE TRANSACTIONS WERE SUPPO RTED BY PROPER DOCUMENTARY EVIDENCES, THAT THE PAYMENTS MADE TO TH E PARTIES BY THE ASSESSEE WERE IN CONFIRMATION WITH BANK CERTIFI CATE,T HAT THE SUPPLIERS WAS SHOWN AS DEFAULT UNDER THE MAHARASHTR A VAT ACT COULD NOT BE SUFFICIENT EVIDENCES TO HOLD THAT THE PURCHASES WERE NON-GENUINE, THAT THE AO HAD NOT BROUGHT ANY INDEPE NDENT AND RELIABLE EVIDENCES AGAINST THE ASSESSEE TO PROVE TH E NON- GENUINENESS OF THE PURCHASES, THAT THERE WAS NO EVI DENCE REGARDING CASH RECEIVED BACK FROM THE SUPPLIERS. FINALLY, HE DELETED THE ADDITION MADE BY THE AO . 2.3.BEFORE US, DEPARTMENTAL REPRESENTATIVE ARGUED THAT BOTH THE SUPPLIERS WERE NOT PRODUCED BEFORE THE AO BY THE AS SESSEE, THAT ONE OF THEM WAS DECLARED HAWALA DEALER BY VAT DEPAR TMENT, THAT BECAUSE OF CHEQUE PAYMENT MADE TO THE SUPPLIER TRAN SACTION CANNOT BE TAKEN AS GENUINE. HE RELIED UPON THE ORDE R OF THE G BENCH OF MUMBAI TRIBUNAL DELIVERED IN THE CASE OF W ESTERN EXTRUSION INDUSTRIES. (ITA/6579/MUM/2010-DATED 13.1 1.2013). AUTHRORISED REPRESENTATIVE (AR) CONTENDED THAT PAYM ENTS MADE BY THE ASSESSEE WERE SUPPORTED BY THE BANKERS STATEME NT, THAT GOODS RECEIVED BY THE ASSESSEE FROM THE SUPPLIE WAS PART OF CLOSING STOCK,THAT THE TRANSPORTER HAD ADMITTED THE TRANSPORTATION OF GOODS TO THE SITE.HE RELIED UPON THE CASE OF BAB ULA BORANA (282 ITR251), NIKUNJ EXIMP ENTERPRISES (P) LTD. (216TAXMAN171)DELIVERED BY THE HONBLE BOMBAY HIGH COURT. 2.4.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT AO HAD MADE THE ADDITION AS ONE OF THE SUPPLIER WAS DECLARED A HAWALA DEALER BY THE VAT DE PARTMENT. WE ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 12 AGREE THAT IT WAS A GOOD STARTING POINT FOR MAKING FURTHER INVESTIGATION AND TAKE IT TO LOGICAL END. BUT, HE L EFT THE JOB AT INITIAL POINT ITSELF. SUSPICION OF HIGHEST DEGREE CANNOT TA KE PLACE OF EVIDENCE. HE COULD HAVE CALLED FOR THE DETAILS OF T HE BANK ACCOUNTS OF THE SUPPLIERS TO FIND OUT AS WHETHER THERE WAS A NY IMMEDIATE CASH WITHDRAWAL FROM THEIR ACCOUNT. WE FIND THAT NO SUCH EXERCISE WAS DONE. TRANSPORTATION OF GOOD TO THE SITE IS ONE OF THE DECIDING FACTOR TO BE CONSIDERED FOR RESOLVING THE ISSUE. TH E FAA HAS GIVEN A FINDING OF FACT THAT PART OF THE GOODS RECEIVED BY THE ASSESSEE WAS FORMING PART OF CLOSING STOCK. AS FAR AS THE CASE O F WESTERN EXTRUSION INDUSTRIES. (SUPRA)IS CONCERNED, WE FIND THAT IN THAT MATTER CASH WAS IMMEDIATELY WITHDRAWN BY THE SUPPLI ER AND THERE WAS NO EVIDENCE OF MOVEMENT OF GOODS. BUT, IN THE C ASE BEFORE US, THERE IS NOTHING, IN THE ORDER OF THE AO, ABOUT THE CASH TRAIAL. SECONDLY, PROOF OF MOVEMENT OF GOODS IS NOT IN DOUB T. THERERFORE, CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER APPEAL, WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY AND THERE ARE NOT S UFFICIENT EVIDENCE ON FILE TO ENDORSE THE VIEW TAKEN BY THE AO. SO, CO NFIRMING THE ORDER OF THE FAA, WE DECIDE GROUND NO.1 AGAINST THE AO . 2.8. THE RATIO LAID DOWN IN THE CASE OF M/S NEETA TEXTILES VS INCOME TAX OFFICER 6138/MUM/2013, ORDER DATED 27/05/2013, SHRI JIGAR V. SHAH VS INCOME TAX OFFICE R (ITA NO.1223/M/2014) ORDER DATED 22/01/2016, M/S IMPERIA L IMP. & EXP. VS INCOME TAX OFFICER ITA NO.5427/MUM/2 015, ORDER DATED 18/03/2016 SUPPORTS THE CASE OF THE ASS ESSEE AND THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. HOW EVER, AS RELIED BY THE LD. DR, THE HON'BLE GUJARAT HIGH COUR T IN THE CASE OF N.K. INDUSTRIES LTD.,ETC VS DCIT (SUPRA) CO NSIDERING VARIOUS DECISIONS DECIDED THE ISSUE IN FAVOUR OF TH E REVENUE AND THE HON'BLE APEX COURT DISMISSED THE SLP VIDE O RDER DATED 16/01/2017 (SLP NO.(C) 769 OF 2017). WE FIND THAT IN THAT CASE, DURING SEARCH PROCEEDINGS, CERTAIN BLANK SIGNED ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 13 CHEQUE BOOKS AND VOUCHERS WERE FOUND AND THUS THE PURCHASES MADE FROM THESE CONCERNS, WERE TREATED AS BOGUS BY THE ASSESSING OFFICER. 2.9. THE HON'BLE GUJARAT HIGH COURT IN N.K. INDUST RIES LTD. VS DCIT (IT APPEAL NO.240, 261, 242, 260 AND 2 41 OF 2003), VIDE ORDER DATED 20/06/2016 CONSIDERED THE D ECISION OF THE TRIBUNAL AND VARIOUS JUDICIAL DECISIONS INCLUDI NG THE CASE OF VIJAY PROTEINS AND SANJAY OILCAKES INDUSTRIES LT D., M/S WOOLEN CARPET FACTORY VS ITAT (2002) 178 CTR 420 (R AJ.), THE TRIBUNAL WAS HELD TO BE JUSTIFIED IN DECIDING THE C ASE AGAINST THE ASSESSEE. THE HON'BLE APEX COURT CONFIRMED THE DECISION OF THE HIGH COURT FOR ADDING THE ENTIRE INCOME ON A CCOUNT OF BOGUS PURCHASES (SLP (C) NO.S 769 OF 2017, ORDER DA TED 16/01/2017. 2.10. IN SUCH TYPE OF CASES, BROADLY, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) AS WELL AS THIS TRIBUNAL HAS FOLLOWED THE DECISIONS FROM HON'BLE GUJARAT HIG H COURT IN THE CASE OF SIMIT P. SETH (2013) 356 ITR 451 (GUJ.) , CIT VS VIJAY M. MISTRY CONSTRUCTION LTD. (2013) 355 ITR 49 8 (GUJ.), CIT VS BHOLA NATH POLY FAB. (P.) LTD. (2013) 355 IT R 290 (GUJ.) AND VARIOUS OTHER DECISIONS OF THE TRIBUNAL AND THE DECISION OF ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 14 M/S NIKUNJ EXIMP(SUPRA) FROM HON'BLE JURISDICTIONAL HIGH COURT, WHEREIN, THE AGGREGATE DISALLOWANCE WAS REST RICTED TO 12.5%. ADMITTEDLY, THERE CANNOT BE SALE WITHOUT PUR CHASES. THE CASE OF THE REVENUE IS THAT THERE IS BOGUS NATU RE OF PURCHASES MADE FROM SUPPLIERS AND THE PARTIES WERE NOT FOUND EXISTING AT THE GIVEN ADDRESSES. 2.11. ADMITTEDLY, IN SUCH TYPE OF CASES, THERE IS NO OPTION BUT TO ESTIMATE THE PROFIT WHICH DEPENDS UPON THE SUBJECTIVE/OBJECTIVE APPROACH OF AN INDIVIDUAL AND THE MATERIAL FACTS AVAILABLE ON RECORD. IN THE APPEAL FOR ASSESSMENT YEAR 2007-08, THE LD. ASSESSING OFFICER DISALLOWED RS.23,34,801/- ON ACCOUNT OF ALLEGED BOGUS PURCHASE S BY INVOKING THE PROVISIONS OF SECTION 69C OF THE ACT O N THE PLEA THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE GENUIN ENESS OF THE PURCHASES AND THUS THE INCOME WAS ASSESSED AT RS.1,15,53,461/-. LIKEWISE, FOR ASSESSMENT YEAR 200 8-09, THE INCOME WAS ASSESSED AT RS. 1,27,79,350/- AND FOR AS SESSMENT YEAR 2009-10, IT WAS ASSESSED AT RS.4,25,21,584/-. FOR ASSESSMENT YEAR 2010-11, THE INCOME WAS ASSESSED AT RS.6,31,87,980/-. THE LD. ASSESSING OFFICER TOOK TH E YEAR-WISE PEAK CREDIT AS HAS BEEN MENTIONED IN THE RESPECTIVE ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 15 ASSESSMENT ORDER. IT IS NOTED THAT WHILE ADJUDICATI NG THE ISSUE, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) SOUGHT REMAND REPORT FROM THE LD. ASSESSING OFFICER AND THE SAME WAS DULY CONSIDERED. ADMITTEDLY, THE NECESSARY DOCUMENTS JU ST LIKE PURCHASE BILLS, SALE INVOICES, PROCESS FLOW CHART, CONTRACT AGREEMENTS, INSPECTION NOTES INWARD AND OUTWARD REG ISTER OF THE MATERIAL AND THE DISPUTED PURCHASES WERE DEBITE D TO SEWAGE TREATMENT PLANT AND THE AUTHENTICITY OF THE DOCUMENTS WAS NOT DISPUTED BY THE LD. ASSESSING OFFICER. THU S, WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIO NER OF INCOME TAX (APPEAL), BECAUSE, THE ASSESSEE HAS PROV ED CONSUMPTION, CONSEQUENTLY, THIS GROUND OF THE REVEN UE IS WITHOUT ANY MERIT, THEREFORE, DISMISSED. 3. NEXT GROUND PERTAINS TO DIRECTION TO THE LD. ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IA OF TH E ACT IN RESPECT OF ADDITION MADE U/S 69C WITHOUT APPRECIATI NG THE FACT THAT THE INCOME TAX U/S 69C OF THE ACT WAS NOT EARNED FROM THE ACTIVITIES OF THE ELIGIBLE BUSINESS FOR CL AIMING DEDUCTION U/S 80IA OF THE ACT. THE LD. DR ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUND RAISED. ON THE ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 16 OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, DEFEN DED THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE PERTAINS TO ALLOWABILITY OF DEDUCTION U/S 80IA(4) OF THE ACT ON PROFIT AND GAINS OF ELIGIBLE BUSINESS AS A RESULT OF DISALLOWA NCE OF PURCHASES. THE CRUX OF ARGUMENTS ON BEHALF OF THE A SSESSEE IS THAT ANY DISALLOWANCE OF PURCHASES MADE IN THE ASSE SSMENT ORDER WOULD INCREASE IN PROFIT AND GAINS ELIGIBLE B USINESS AS A RESULT OF WHICH THE ASSESSEE WOULD BE ENTITLE TO CL AIM THE INCREASED DEDUCTION U/S 80IA(4) OF THE ACT. PLEA WA S ALSO RAISED THAT THE PURCHASES MADE FROM THE DISPUTED SU PPLIERS WERE DEBITED TO SEWAGE TREATMENT PLANT AND AS SUCH HAD BEEN CLAIMED AS EXPENSE IN RESPECT OF STP UNIT. HOWEVER , WE FIND THAT FINALLY, THE ASSESSING OFFICER WAS DIRECTED TO RE-COMPUTE THE PROFIT AND GAINS OF STP UNIT. WE MAY ADD HERE THAT CONSIDERING THE LANGUAGE OF SECTION 80IA, THE LD. A SSESSING OFFICER IS DIRECTED TO EXAMINE THE FACTUAL MATRIX A ND ALSO WHETHER THE ASSESSEE HAS SATISFIED/FULFILLED THE CO NDITIONS ENUMERATED IN THE SECTION THEN DECIDE IN ACCORDANCE WITH LAW. THIS GROUND OF THE REVENUE IS ALLOWED FOR STATISTIC AL PURPOSES. ITA NOS.4373 TO 4376//MUM/2016 HI POINT SERVICES (INDIA) PVT. LTD. 17 FINALLY, THE APPEALS OF THE REVENUE ARE PARTLY ALLO WED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 11/10/2017. SD/- SD/- ( RAJESH KUMAR ) ( JOGINDER SINGH ) )( / ACCOUNTANT MEMBER ( / JUDICIAL MEMBER MUMBAI; ( DATED : 11/10/2017 F{X~{T? P.S / /. .. &*'+,-,.' / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. /0-. / THE ASSESSEE. 3. 1 1 2' ( +, ) / THE CIT, MUMBAI. 4. 1 1 2' / CIT(A)- , MUMBAI, 5. 56 /'$ , 1 +,# +$ 7 , / DR, ITAT, MUMBAI 6. 8% 9 / GUARD FILE. ( / BY ORDER, 05,' /' //TRUE COPY// /( (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI