DCIT, New Delhi V. M/s. Amrapali Leisure Valley Pvt. Ltd., Noida

ITA 4844/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4939 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHEFALI SWAROOP
• Assessee Lawyers: AMIT GOEL
• Keywords: Bogus purchase
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4844 /DEL./2014 (ASSESSMENT YEAR : 2011-12) DCIT, CENTRAL CIRCLE 7, VS. M/S. AMRAPALI LEISURE V ALLEY PVT. LTD., NEW DELHI. C 56/40, SECTOR 62, NOIDA (U.P.). (PAN : AAICA5579R) ITA NO.4845 /DEL./2014 (ASSESSMENT YEAR : 2011-12) DCIT, CENTRAL CIRCLE 7, VS. M/S. AMRAPALI LEISURE V ALLEY DEVELOPERS NEW DELHI. PVT. LTD., C 56/40, SECTOR 62, NOIDA (U.P.). (PAN : AAICA5576A) ITA NO.5272 /DEL./2014 (ASSESSMENT YEAR : 2011-12) DCIT, CENTRAL CIRCLE 7, VS. M/S. AMRAPALI ZODIAC DE VELOPERS PVT. LTD., NEW DELHI. C 56/40, SECTOR 62, NOIDA (U.P.). (PAN : AAICA1193M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT GOEL, CA REVENUE BY : MS. SHEFALI SWAROOP, CIT DR DATE OF HEARING : 14.08.2017 DATE OF ORDER : 24.08.2017 O R D E R ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 2 PER BENCH : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN THE AFORESAID APPEALS, THE SAME ARE BEING DISPOS ED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, CE NTRAL CIRCLE 7, NEW DELHI (HEREINAFTER REFERRED TO AS TH E REVENUE), BY FILING THE PRESENT APPEAL IN ITA NO.4844/DEL/2014 S OUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 16.06.2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, NEW DELHI, FOR THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA T HAT :- 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.57,03,643/- MADE BY AO ON ACCOUNT OF BOGUS PURCHASE. 3. APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, CE NTRAL CIRCLE 7, NEW DELHI (HEREINAFTER REFERRED TO AS TH E REVENUE), BY FILING THE PRESENT APPEAL IN ITA NO.4845/DEL/2014 S OUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 16.06.2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, NEW DELHI, FOR THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 3 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.5,40,00,000/- MADE BY AO ON ACCOUNT OF BOGUS PURCHASES CLAIMED BY THE ASSESSEE COMPANY AND THE SAME HAS BEEN CAPITALIZED. 4. APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, CE NTRAL CIRCLE 7, NEW DELHI (HEREINAFTER REFERRED TO AS TH E REVENUE), BY FILING THE PRESENT APPEAL IN ITA NO.5272/DEL/2014 S OUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 11.07.2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, NEW DELHI, FOR THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA T HAT :- 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF DISALLOWANCES OF RS.25,46,58,312/- MADE BY ASSESSING OFFICER ON ACCOUNT OF BOGUS PURCHASE WHICH ARE CAPITALIZED. 5. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : IN CASE OF M/S. AMRAPALI LEISURE VALLEY PVT. LTD. (IN ITA NO.4844/DEL/2014) FOR ASSESSING Y EAR 2011-12, ASSESSING OFFICER NOTICED BOGUS PURCHASE MADE BY TH E ASSESSEE COMPANY FROM M/S. OM TRADERS TO THE TUNE OF RS.57,0 3,643/-. AO ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 4 FURTHER NOTICED BOGUS PURCHASE OF RAW MATERIAL BY T HE ASSESSEE COMPANY TO THE TUNE OF RS.5,40,00,000/- IN CASE OF AMRAPALI LEISURE VALLEY DEVELOPERS PVT. LTD. (IN ITA NO.4845 /DEL/2014). AO ALSO NOTICED BOGUS PURCHASES TO THE TUNE OF RS.2 5,46,58,312/- IN CASE OF AMRAPALI ZODIAC DEVELOPERS PVT. LTD. FOR AY 2011-12. AO CONDUCTED DISCREET ENQUIRY IN ALL THE CASES BY C ALLING UPON THE CONCERNED PARTIES FROM WHOM THE ASSESSEE COMPANIES ALLEGED TO HAVE PURCHASED THE RAW MATERIAL U/S 131 OF THE INCO ME-TAX ACT, 1961 (FOR SHORT THE ACT) AND WHEN SUMMONS RECEIVE D BACK UNSERVED THE MATTER WAS GOT ENQUIRED INTO THROUGH C IRCLE INSPECTOR OF THE INCOME-TAX WHO HAS SUBMITTED VIDE REPORTED D ATED 23.11.2012 & 26.02.2013 THAT NO SUCH FIRMS EXIST AT THE GIVEN ADDRESSES. CONSEQUENTLY, THE AO REDUCED AN AMOUNT OF RS.57,03,643/-, RS.5,40,00,000/- AND RS.25,46,58,31 2/- FROM THE WORK-IN-PROGRESS CLAIMED BY AMRAPALI LEISURE VALLEY PVT. LTD., AMRAPALI LEISURE VALLEY DEVELOPERS PVT. LTD. AND AM RAPALI ZODIAC DEVELOPERS PVT. LTD. RESPECTIVELY. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEALS WHO HAS ALLOWED THE APPEALS. FEELIN G AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF C HALLENGING THE IMPUGNED ORDERS PASSED BY LD. CIT. ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 5 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. FROM THE GROUNDS OF APPEAL, ARGUMENTS ADDRESSED BY LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE AP PEAL AND FACTS & CIRCUMSTANCES OF THE CASE, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS :- AS TO WHETHER THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY RELYING UPON HIS OWN ORDER RENDERED IN M/S. ULTRA HOME CONSTRUCTION PVT. LTD. FOR AY 2011-12 ORDER DATED 17.01.2014 IN ITA NO.108/2013-14 AND ON THE GROUND THAT WHEN THE SAID EXPENDITURE EMBEDDED IN THE WORK-IN- PROGRESS WILL BE CONSIDERED FOR COMPUTING THE INCOME OF THE ASSESSEE AS PER POC METHOD, ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE? 9. AO MADE AFORESAID ADDITION ON THE BASIS OF DISCR EET ENQUIRY CONDUCTED BY HIM FIRSTLY BY ISSUING SUMMONS U/S 131 OF THE ACT WHICH RECEIVED BACK UNSERVED FOR LACK OF COMPLETE A DDRESS AND THEN BY GETTING THE MATTER ENQUIRED INTO THROUGH CI RCLE INSPECTOR, INCOME-TAX WHO HAS ALSO REPORTED THAT NO SUCH FIRMS / SUPPLIER OF RAW MATERIAL EXIST AT THE GIVEN ADDRESSES IN ALL TH E CASES ON THE ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 6 GROUND THAT THE IDENTITY AND EXISTENCE OF SUPPLIER OF RAW MATERIAL HAS NOT BEEN PROVED AND GENUINENESS OF TRANSACTIONS ALSO REMAINED UNVERIFIABLE BY RETURNING FOLLOWING FINDINGS :- A) THE EXISTENCE OF THE PARTIES ON THE GIVEN BUSINESS AS WELL AS RESIDENTIAL ADDRESSES WERE NOT VERIFIABLE. B) THE LOCATION OF THE PREMISES FROM WHICH BUSINESS IS PURPORT TO BE CARRIED IS SUCH FROM WHICH OPERATION OF BUSINESS ALLEGED TO BE CARRIED OUT IS NOT POSSIBLE. C) THE LEVEL OF TRANSACTIONS ROUTED THROUGH THE BANK ACCOUNT OF THESE PARTIES ARE SUCH VOLUMINOUS AND BIG, WHICH PERSON OF STATUS OF THESE PARTIES IN NO MANNER CAN MATCH. D) MONEY ROUTED THROUGH THE BANK ACCOUNTS ARE AT FIRST STAGE TRANSFERRED TO OTHER ACCOUNTS AND AT SECOND STAGE THESE ARE WITHDRAWN MOSTLY IN CASH, WHICH IS REPATRIATED TO THE BENEFICIARY I. E. THE ASSESSEE COMPANY AND ITS ASSOCIATES IN CASH. E) MOREOVER, FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE SUCH PARTIES INSPITE OF THE REPEATED OPPORTUNITY GIVEN TO THEM CONCLUSIVELY PROVE THAT NO SUCH PARTY ACTUAL EXIST WHICH CAN STAND AND OWN-UP THE TRANSACTIONS ALLEGED TO BE ROUTED THROUGH THEIR BANK ACCOUNTS AND ISSUE OF PURCHASE BILLS. 10. WHEN THE AO HAS BASED HIS FINDINGS ON ITS DISCR EET INQUIRY THAT THE FIRMS FROM WHICH THE ASSESSEE HAS CLAIMED TO HAVE PURCHASED THE RAW MATERIAL ARE NOT IN EXISTENCE, TH OUGH THE ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 7 TRANSACTIONS WERE ROUTED THROUGH BANK, IT CERTAINLY DISPUTES THE GENUINENESS OF THE TRANSACTIONS AND APPARENTLY LEAD S TO THE CONCLUSION THAT THESE ARE THE BOGUS PURCHASES MADE TO INFLATE THE COST IN ORDER TO FURTHER EVADE THE TAX. 11. BUT, ON THE OTHER HAND, LD. CIT (A) WITHOUT EXA MINING THE ISSUE AS TO BOGUS PURCHASES, THOROUGHLY ENQUIRED IN TO BY THE AO, DELETED THE ADDITION ON THE GROUND THAT WHEN THE SA ID EXPENDITURE EMBEDDED IN THE WORK-IN-PROGRESS, THE SAME WILL BE CONSIDERED FOR COMPUTING THE INCOME OF THE ASSESSEE AS PER POC MET HOD. 12. HOWEVER, FROM THE TOTALITY OF THE FACTS AND CIR CUMSTANCES AND THE ORDERS PASSED BY AO IN AY 2011-12, IT IS AP PARENTLY CLEAR THAT THOUGH THE EXPENDITURE CLAIMED BY THE ASSESSEE DOES NOT HAVE ANY BEARING ON ITS INCOME / PROFIT DURING AY 2011-1 2 AS THE SAME HAVE BEEN ACCOUNTED FOR AS WORK-IN-PROGRESS, BUT THE SAME WILL CERTAINLY EFFECT THE INCOME OF THE ASSESSEE AT THE CONCLUSION OF PROJECT. 13. IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE CONSI DERED VIEW THAT THOUGH THE AO HAS MADE A DISCREET ENQUIRY THRO UGH INSPECTOR AS TO THE EXISTENCE OF THE FIRM FROM WHOM THE ASSES SEE ALLEGED TO HAVE PURCHASED THE RAW MATERIAL, BUT AT THE SAME TI ME AO CATEGORICALLY RECORDED THE OBSERVATIONS IN PARA 4.6 (E) (IN ITA ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 8 NO.4844/DEL/2014 &4845/DEL/2014) AND 5.6(E) (IN ITA NO. 5273/DEL/2014) THAT THE ASSESSEE HAS FAILED TO PROD UCE SUCH PARTIES INSPITE OF REPEATED OPPORTUNITIES GIVEN TO THEM BUT NO SUCH ADEQUATE OPPORTUNITY ALLEGEDLY PROVIDED BY THE AO T O THE ASSESSEE IS VISIBLE ON THE RECORD, PARTICULARLY WHEN EXAMINE D IN THE LIGHT OF THE FACT THAT LD. CIT (A) HAS CATEGORICALLY MENTION ED IN THE IMPUGNED ORDER THAT THE ASSESSEE HAS FILED ALL THE REQUISITE EVIDENCES AGAIN WITHOUT HIGHLIGHTING THE SAID PIECE OF EVIDENCE. EVEN THE ASSESSEE HAS NOT BEEN CONFRONTED WITH THE REPORT OF INCOME-TAX INSPECTOR DATED 23.11.2012 & 26.02.2013, RELIED UPON BY THE AO. SO, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE TO REMAND THE SAME TO THE FILE OF THE AO WHO SHALL PRO VIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PROVE THE ALLEGED BO GUS PURCHASES. 14. RESULTANTLY, THE AFORESAID APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF AUGUST, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 24 TH DAY OF AUGUST, 2017 TS ITA NO.4844/DEL./2014 ITA NO.4845/DEL./2014 ITA NO.5272/DEL./2014 9 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-I, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.