ASST CIT 25(2), MUMBAI V. PRATAP U POROHIT, MUMBAI

ITA 5296/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4236 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 14-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 31-07-2013
• Court: TRIBUNAL
• Department Lawyers: A K JHA
• Assessee Lawyers: SANJAY KAPADIA
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice
• Section: 69C; 133A; 14A; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER I.T.A. NO.5296/M/2013 (ASSESSMENT YEAR: 2010 - 2011 ) ACIT - 25(2), MUMBAI. / VS. SHRI PRATAP U PUROHIT, PROP. M/S. DEV ENGINEERS, PLOT NO.106, GORAI GURAV SOC., GORAI ROAD, BORIVALI (W), MUMBAI 400 092. ./ PAN : AHCPP6451F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI A.K. JHA, DR / RESPONDENT BY : SHRI SANJAY KAPADIA / DATE OF HEARING : 17.12.2015 / DATE OF PRONOUNCEMENT : 10 .02 .2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 31.7.2013 IS AGAINST THE ORDER OF THE CIT (A) - 35, MUMBAI FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS. 13,02,78,336/ - WHICH WAS MADE BY INVOKING THE PROVISIONS OF SECTION 69C OF THE IT ACT BY TREATING THE PURCHASES ARE GENUINE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD C IT (A) ERRED IN RELYING UPON JUDGMENT OF THE CIT VS. NIKUNJ EXIMP ENTERPRISES PVT LTD WITHOUT APPRECIATING THAT THE FACTS INVOLVED IN THE APPELLANTS CASE ARE DIFFERENT FROM THE FACTS OF THE ABOVE CASE LAWS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT (A) HAS GROSSLY ERRED IN NOT APPRECIATING THE FACT THAT NOTICE U/S 133(6) ISSUED TO THE PARTIES FROM WHOM ALLEGED BILLS WERE RECEIVED WERE RETURNED UNDELIVERED BY THE POSTAL AUTHORITIES AND DEPARTMENT INSPECTOR. 4. ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS GROSSLY ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE THE PARTIES, FROM WHOM ALLEGED BILLS WERE RECEIVED, BEFORE THE AO DESPITE MANY OPPORTUNITIES WERE ACCORD ED TO HIM. 2 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS FAILED TO REBUT THE FINDINGS OF SALES TAX DEPARTMENT VIS - A - VIS BOGUS PURCHASES DESPITE REASONABLE OPPORTUNITY WAS ACCORDED TO HIM. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS GROSSLY ERRED IN ACCEPTING THE MISLEADING SUBMISSIONS MADE BY THE ASSESSEE THAT THE DEPARTMENT DID NOT MAKE AVAILABLE THE INFORMATION, PROVIDED BY SALES TAX DEPARTMENT. 2. BRIEFLY STATED RELEVANT F ACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS AN INDIVIDUAL, IS A BMC MAIN CONTRACTOR ENGAGED IN THE CIVIL CONTRACT WORKS. HE OWNS A PROPRIETORSHIP CONCERN NAMED M/S. DEV ENGINEERS. FOR THE YEAR UNDER CONSIDERATION, ASSESSEE FILED RETURN OF INCOME DECL ARING THE TOTAL INCOME OF RS. 5,82,63,649/ - . THE ASSESSING OFFICER COMPUTED THE ASSESSED INCOME AT RS. 18,88,69,230/ - . IN THE ASSESSMENT, AO MADE AN ADDITION OF RS. 5,25,672/ - U/S 14A R.W. RULE 8D. ASSESSING OFFICER ALSO MADE ANOTHER ADDITION OF RS. 13,02 ,78,336/ - U/S 69C OF THE ACT. THE SAID ADDITION MADE U/S 69C HAS TWO SEGMENTS IE (I) RS. 12,01,91,407/ - AND (II) RS. 1,00,86,929/ - . MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, THE ADD ITION MADE ON ACCOUNT OF SECTION 14A R.W. RULE 8D WAS NOT PRESSED. THEREFORE, THIS ADDITION REACHED FINALITY. REGARDING THE ADDITIONS MADE U/S 69C OF THE ACT, CIT (A) DELETED THE WHOLE OF THE ADDITION OF RS. 13.03 CRS (ROUNDED OF F ). AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE US. 4. RELEVANT FACTS RELATING TO THE ADDITION MADE U/S 69C OF THE ACT INCLUDE THAT DURING THE ASSESSMENT PROCEEDINGS, AO CALLED FOR THE LIST OF THE PURCHASES OF THE RAW MATERIAL IE CEMENT, STEEL, BRICKS ETC. AO ISSUED NOTICED U/S 133(6) OF THE ACT TO THE SAID PURCHASERS. THERE WAS NO RESPONSE TO THE SAID LETTER S . EVENTUALLY, AO FOUND OUT THAT MOST OF THESE PARTIES IE SUPPLIERS OF THE SAID RAW MATERIAL, ARE LISTED BY THE SALES TAX DEPARTMENT IN T HEIR WEBSITE IE WWW.MAHAVAT.GOV.IN AS SALES TAX DEFAULTERS . FURTHER, AO FOUND OUT FROM THE SAID LIST OF THE SALES TAX DEPARTMENT THAT 56 PARTIES ARE FIGURING COMMON IN THE LIST OF PARTIES , WHO SUPPLIED RAW MATERIAL TO THE ASSESSEE . THE DETAILS OF THE SAID PARTIES ARE PROVIDED IN PARA 8.1 OF THE IMPUGNED ORDER. ACCORDINGLY, AO, RELYING ON THE STATEMENT RECORDED BY THE SALES TAX DEPARTMENT AND OTHER DOCUMENTS SUPPLIED BY THEM, TREATED THE PURCHASES MADE FROM THESE PA RTIES AS BOGUS. THE TOTAL OF THESE PURCHASES WORKED OUT TO RS. 12,01,91,407/ - . 3 5. THERE WAS A SURVEY ACTION ON THIS ASSESSEE ON 27.2.2012. A STATEMENT WAS RECORDED ON 28.2.2012. DURING THE SURVEY ACTION, ASSESSEE ADMITTED THAT THE PURCHASES FROM SEVER AL PARTIES ARE BOGUS, THEREFORE, THE WHOLE OF SUCH PURCHASES WAS OFFERED IN THE RETURN OF INCOME IN THE AY 2012 - 2013. AO LISTED OUT 5 OF SUCH PARTIES, WHOSE SALES WERE CONSIDERED BOGUS AND SUCH 5 BOGUS PARTIES ALSO SOLD RAW MATERIAL DURING THE YEAR UNDE R CONSIDERATION AND THE NAMES OF SUCH 5 PARTIES ARE (I) ATMASS ENTERPRISES; (II) OM CORPORATION; (III) SHREE SAI ENTERPRISES; (IV) V.K. ENTERPRISE AND (V) VIRAT ENERPRISE S [PARA 9 OF THE AOS ORDER IS RELEVANT IN THIS REGARD]. THE TOTAL PURCHASES FROM THE SE 5 PARTIES WORKED OUT TO RS. 1,00,86,929/ - . THUS, THE GROSS ADDITION WORKS OUT TO RS. 13.03 CRS (ROUNDED OF F ) (IE RS. 12,01,91,407/ - + RS. 1,00,86,929/ - ) . 6. DURING THE FIRST APPELLATE PROCEEDINGS, APART FROM THE SUBMISSIONS MADE BEFORE THE AO, ASSESS EE GAVE FURTHER SUBMISSIONS AND MOST OF THE SUBMISSIONS ARE REPEAT IN NATURE AND THEY REVOLVE AROUND THE FOLLOWING ARGUMENTS NAMELY (I) THE RAW MATERIAL WAS SUPPLIED DIRECTLY TO THE SITE FOR INSPECT AND USED BY THE ENGINEERS OF THE ASSESSEE; (II) THE PAYME NTS WERE MADE BY WAY OF CHEQUE INVOLVING THE BANKING CHANNELS; (III) NO DELIVERY BILLS AND DELIVERY CHALLANS WERE MADE AVAILABLE BECAUSE OF DIRECT SUPPLY TO THE SITE. THE WEBSITE BASED LIST OF THE SALES TAX DEPARTMENT IS NO GROUND FOR TREATING THEM AS BO GUS SUPPLIERS WHEN CONTRACT WORKS WERE COMPLETED TO THE SATISFACTION OF THE MCGM. ASSESSEE CANNOT BE HELD RESPONSIBLE FOR DISAPPEARANCE OF THE PARTIES AND ABSENCE OF REPLY FROM THE SELLERS TO THE NOTICES ISSUED U/S 133(6) OF THE ACT. IT IS A FACT THAT W HEN THE CONTRACT WORKS WERE COMPLETED, IT IS LOGICAL TO INFER THAT THE SAID WORKS / PROJECTS COULD NOT HAVE BEEN COMPLETED WITHOUT PURCHASE OF THE RAW MATERIALS IE CEMENT; STEEL; BRICKS ETC. CIT (A) RELIED ON VARIOUS DECISION AND FINALLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DELETED THE WHOLE OF THE ADDITION OF RS. 13.03 CRS (ROUNDED OF). HOWEVER, IN THE ORDERS OF THE CIT (A) THERE IS NO INDEPENDENT DISCUSSION WITH REFERENCE TO THE STATEMENT U/S 133A OF THE ACT WITH REGARD TO THE 5 BOGUS PERSONS MENTIONED ABOVE THAT LED TO THE ADDITION OF RS. 1,00,86,929/ - . THE CONTENTS OF PARAS 8.10; 8. 11 AND 8. 12 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAME ARE REPRODUCED AS UNDER: - 8.10. ALL THE ABOVE CLEARLY INDICATES THAT MATERIAL FOR THE ABOVE CONTRACTS REACHED THE RESPECTIVE SITE WHICH GOT TESTED FOR ITS QUALITY. DEPENDING UPON THE 4 STAGE OF WORK RUNNING BILLS WERE PREPARED AND PAYMENTS RECEIVED AFTER CERTIFICATION BY THE SITE ENGINEER S. ALL THESE CLEARLY PROVE THAT THE CONTRACT WORK HAS BEEN EXECUTED TO THE SATISFACTION OF THE MCGM AUTHORITIES AND DUE PAYMENTS WERE RECEIVED AGAINST THE EXECUTED CONTRACTS. THE ASSESSING OFFICER WITHOUT EXAMINING THE FACTS, DISCUSSED ABOVE, HAD COME TO T HE CONCLUSION BASED ONLY THE PRESUMPTION THAT BECAUSE THE NAMES OF THE SUPPLIERS WERE PUT IN THE INTERNET AS SUSPICIOUS DEALERS THE PURCHASES WERE BOGUS. WITHOUT PURCHASE OF MATERIAL SUCH AS CEMENT, STEEL, BRICKS ETC, THE APPELLANT COULD NOT HAVE COMP LETED THE CONTRACT ASSIGNED TO IT. THE ASSESSING OFFICER HAD NO MATERIAL ON RECORD TO SHOW THAT HOW THE CONTRACTS HAVE BEEN COMPLETED BY THE APPELLANT WITHOUT PURCHASE OF MATERIALS FROM THE ABOVE SUPPLIERS. THE BOOKS OF ACCOUNTS OF THE APPELLANT HAD BEEN DULY AUDITED BY THE C.A., AND NO DISCREPANCY WHATSOEVER HAS BEEN BROUGHT OUT IN THE AUDIT REPORT. 8.11. IN VIEW OF THE ABOVE, THE PRESUMPTION OF THE ASSESSING OFFICER THAT THE ABOVE 56 SUPPLIERS HAD ISSUED ONLY BOGUS BILLS WITHOUT SUPPLYING THE MATERIALS AND HENCE THEY ARE NON - GENUINE PURCHASES CANNOT BE ACCEPTED. AS ALREADY MENTIONED PAYMENTS TO THE ABOVE SUPPLIERS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES. 8.22. I HAVE ALSO GONE THROUGH THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LD AR AND FIND THAT THE FACTS OF THE ABOVE REFERRED JUDICIAL PRONOUNCEMENTS ARE SIMILAR TO THE PRESENT FACTS OF THE CASE AND, THEREFORE, THE RATIO OF JUDGMENTS OF THE ABOVE REFERRED TWO CASES ARE FULLY APPLICABLE IN THE PRESENT CASE. IN VIEW OF THE FACTS DISCUSSED ABOVE, AS WELL AS BINDING JUDICIAL PRONOUNCEMENTS OF THE JURISDICTIONAL ITAT, MUMBAI BENCH AS WELL AS HONBLE MUMBAI HIGH COURT AND OTHER LEGAL PRECEDENTS, THE ADDITION MADE BY THE AO AMOUNTING TO RS. 13,02,78,336/ - CANNOT BE SUSTAINED. ACCORDINGLY, THE ADDITION OF RS. 13,02,78,336/ - IS DELETED. IN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED. 7. THE ABOVE PARAGRAPHS SUGGEST THAT MERE SUSPICION IS NOT A BASIS FOR COMING TO THE CONCLUSION AGAINST THE ASSESSEE WHEN THE AO HAS NOT DISCHARGED HIS ONUS COMPLETELY. A GGRIEVED WITH THE ABOVE ORDER OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE GROUNDS RAISED IN THIS APPEAL SUGGEST THAT THE REVENUE IS NOT HAPPY WITH THE WAY THE CIT (A) DECIDED THE ISSUE AGAINST THE REVENUE RELYING ON THE JUDGMENT OF T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NIKUNJ EXIMP ENTERPRISES PVT LTD REPORTED IN 2013 - TIOL (TAX INDIA ONLINE.COM) - 04 - HC - MUM - IT, DATED 17.12.2012. 8. BEFORE US, LD DR FOR THE REVEUE BROUGHT OUR ATTENTION TO THE GROUNDS AND SUBMITTED THAT THE DELETION OF ADDITION OF RS. 13.03 CRS (ROUNDED OF) MADE U/S 69C OF THE ACT IS NOT PROPER. IN THE GROUNDS, THEY REASONED THAT THE CIT (A) ERRED BY RELYING ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES PVT LTD (SUPRA). HE FURTHER MENTIONED THAT THE CIT (A) NOT ONLY ERRED IN ENTERTAINING ASSESSEES SUBMISSIONS WHEN THERE IS NO RESPONSE TO THE NOTICE ISSUED U/S 133(6) OF THE ACT AND WHEN THE ASSESSEE FAILED TO PRODUCE THE 5 PARTIES. THE REVENUE ALSO RELIED ON THE FINDING OF THE FACT BY THE SALES TAX DEPARTMENT WITH REGARD TO THE BOGUS NATURE OF THE SUPPLIERS. 9. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A). FURTHER, HE SUBMITTED THAT THE AO HAS ERRED IN DISCHARGING THE ONUS IN MATTER OF CLAIMS OF THE ASSESSEE. THE FACT THAT THE CONTRACT WAS SUCCESSFULLY DONE BY THE ASSESSEE TO THE SATISFACTION OF THE MCGM WAS IGNORED. THE AOS DECISION IN REJECTING THE PURCHASES OF THE MATERIAL (CEMENT, STEEL, BRICKS ETC) TO THE TU NE OF RS. 13.03 CRS (ROUNDED OF) DISPROVED THE FACT OF EXECUTION OF THE WORKS AND THEREFORE THE AOS DECISION IS NOT SUSTAINABLE. REGARDING THE DECISION OF THE SALES TAX DEPARTMENT IN BLA CK LISTING 59 OF THE SUPPLIERS IN THEIR WEBSITE, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO SOME DECISIONS OF THE TRIBUNAL SUCH AS (I) ITO VS. SHRI RAJKUMAR AGARWAL IN ITA NO.5233/M/2013 (AY 2010 - 2011) DATED 10.4.2015; (II) RAMESH KUMAR & CO. VS. ACIT IN ITA NO.2959/M/2014 (AY 2010 - 2011), DATED 28.11.2014; DEEPAK POTATLAL GALA IN ITA NO.5920/M/2013, DATED 27.3.2015 AND SUBMITTED THAT SOME OF THESE SO CALLED BLACK LIST SUPPLIERS WERE CONSIDERED IN THOSE CASES AND THE ISSUES WERE DECIDED IN FAVOUR OF THE RESPECTIVE ASSESSEES BY HOLDING THAT THE AO FAILED TO DISCHARGE THE ONUS AND NO EFFORTS WERE MADE TO VERIFY THE WORK DONE BY THE ASSESSEE FOR MCGM. SOME OF THE SUP PLIERS ARE COMMON IN ALL THESE CASES. IN THIS REGARD, HE BROUGHT OUR ATTENTION PARAS 6 AND 7 OF THE TRIBUNALS ORDER IN THE CASE OF RAJKUMAR AGARWAL (SUPRA) AND DEMONSTRATED THE ABOVE FINDING OF THE TRIBUNAL IN THOSE CASES. THE FACT OF TRIBUNAL RELYING ON THE DECISION OF ITAT IN THE CASES OF DEEPAK POPATLAL GALA (SUPRA) AND RAMESH KUMAR & CO (SUPRA) WAS ALSO DEMONSTRATED. HE ALSO BROUGHT OUR ATTENTION TO PARAS 8 AND ITS SUB - PARAS OF THE TRIBUNALS DECISION IN THE CASE OF RAMESH KUMAR & CO (SUPRA) AND SUBMI TTED THAT WHEN THE AO FAILED TO APPRECIATE THE WORK DONE BY THE CONTRACTOR AND THE SATISFACTION OF THE MCGM AND WHEN THE AO FAILED TO APPRECIATE THE GP RATES, DECLARED BY THE DEPARTMENT, ARE WITHIN THE PERMITTED LIMITED, THE ADDITION MADE U/S 69C OF THE AC T IS NOT SUSTAINABLE. FOR DEMONSTRATING THE COMMON ALLEGED BLACK - LISTED SUPPLIERS, ASSESSEE BROUGHT OUR ATTENTION TO PAGE 10 OF THE PAPER BOOK, WHEREIN THE NAMES SUCH AS (I) ROHIT ENTERPRISES (SL NO.9); (II) SAMARTH ENTERPRISES (SL NO.10) ETC WERE FOUND F IGURING IN THE LIST OF SUPPLIERS ENLISTED IN PARA 8.1 AT PAGES 3 TO 5 OF THE CIT (A)S ORDER. AT THE END, THE ARGUMENTS OF THE LD COUNSEL FOR THE 6 ASSESSEE INCLUDE THAT WHEN THE GP RATES ARE WITHIN THE PERMITTED LIMITS AND WHEN THE AO FAILED TO VERIFY TO F IND OUT THE DEFECTS IN THE QUALITY OF THE CONTRACT WORKS, THE ADDITIONS MADE BY THE AO U/S 69C OF THE ACT ARE NOT SUSTAINABLE. IT IS A FACT THAT WITH THE ADDITION OF RS. 13.03 CRS (ROUNDED OF) THE GP RATE IS UNUSUALLY AND ABNORMALLY HIGH AT 21.38% (PARA 1 2 OF PAGE 10 OF THE CIT (A)S ORDER IS RELEVANT). THERE IS NO DISPUTE ON THE FACT THAT THE GP RATE FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME IS 10.56% . THEREFORE, IT IS THE ARGUMENT OF THE LD COUNSEL FOR THE ASSESSEE THAT THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT SHOULD NOT BE DISTURBED. HOWEVER, HE ADMITTED THE FACT THAT THERE IS NO SEPARATE DISCUSSION OR SPECIFIC ADJUDICATION OF THE FACTS RELATING TO THE ADDITION OF RS. 1,00,86,929/ - , WHICH WAS SEPARATELY ADDED AS UNCONNECTED WITH THE ALLEGED BLACK - LISTED SUPPLIERS BUT FOR THE REASONS GIVEN IN PARA 9 OF THE ASSESSMENT ORDER INVOLVING 5 PARTIES, WHO ARE NOT IN THE SAID LIST OF THE SALES TAX DEPARTMENT AND HOWEVER, THEY WERE CONSIDERED BOGUS SUPPLIERS OF THE BILLS. IT IS AN ADMITTED FACT THAT THE PURCHASES INVOLVING THESE 5 SUPPLIERS VIZ (I) ATMASS ENTERPRISES; (II) OM CORPORATION; (III) SHREE SAI ENTERPRISES; (IV) V.K. ENTERPRISE AND (V) VIRAT ENERPRISES WERE OFFERED AS UNACCOUNTED ONES IN THE PAST . DURING THE SURVEY ACTION U/S 133 A OF THE ACT ON 27.2.2012 (RELEVANT FOR THE AY 2012 - 2013), ASSESSEE OFFERED THE PURCHAS E S MADE FROM THE SAID PARTIES IN THAT ASSESSMENT YEAR AS UNACCOUNTED ONES . LOGICALLY, THE PURCHASES MADE FROM THE SIMILAR PARTIES FOR THE AY UNDER CONSIDERATION WORKS OU T TO RS. 1,00,86,929/ - SHOULD NOT BE CONSIDERED AS GENUINE PURCHASES AS THEY ARE UNDISPUTEDLY THE BILL SUPPLIERS ONLY AND NOT THE MATERIAL SUPPLIERS. 10. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE OF ADDITION MADE U/S 69C OF THE ACT. WE HAVE ALSO EXAMIN ED THE AFOREMENTIONED ORDERS OF TRIBUNAL. WE FIND, THE DECISION, MADE IN THOSE CASES ADJUDICATED BY THE TRIBUNAL (SUPRA), IS ALSO BASED ON THE DATA AVAILABLE ON THE WEBPAGE OF THE SALES TAX DEPARTMENT. AT LEAST SOME OF THE PARTIES ARE FOUND FIGURING IN TH E LIST SUPPLIED BY THE AO AND THE CIT (A). THE TRIBUNAL DECIDED THE APPEALS IN THE ABOVE MENTIONED CASES (SUPRA), AFTER ANALYSING THE CONTRACT WORKS EXECUTED BY THE ASSESSEE FOR MCGM, ACCEPTED THE FACT THAT THE CONTRACT WORKS WERE EXECUTED AND THE QUALITY WAS ALSO ACCEPTED BY CONCERNED AUTHORITIES OF THE MCGM. IN THOSE CIRCUMSTANCES, THE UTILIZATION OF THE RAW MATERIAL IN CORRECT PROPORTION IS BEYOND DOUBT. IT IS A LOGICAL CONCLUSION THAT CEMENT, STEEL, 7 BRICKS ETC PURCHASES BY THE ASSESSEE SHOULD BE REAL . THE NAMES OF THE SUPPLIERS MAY OR MAY NOT BE SACROSANCT SO LONG AS ASSESSEE INCURRED EXPENDITURE ON THE SAID RAW MATERIALS. IT MAY BE A CASE THAT THE ASSESSEE MADE THE PAYMENTS BY THE CHEQUE TO THE SAID 56 PARTIES, WH O MAY BE BILL SUPPLIERS, CANNOT BE THE SUPPLIERS . B UT, SO FAR AS THE ASSESSEE IS CONCERNED, PAYMENTS ARE INCURRED ON THE RAW MATERIALS PURCHASES BY THE ASSESSEE AS PER THE REQUIREMENTS OF THE CONTRACTS. IN THESE CIRCUMSTANCES, AS HELD BY THE TRIBUNAL IN MANY OTHER CASES, THE ONUS IS ON THE ASSESSING OFFICER TO DEMONSTRATE THE RAW MATERIALS WERE NOT PURCHASED AT ALL FROM THE STATED / ANY SUPPLIER OR AO SHOULD DEMONSTRATE THE CONTRACT WORKS EXECUTED BY THE ASSESSEE ARE OF INFERIOR QUALITY AND THE RAW MATERIALS TO THE TUNE OF RS. 13.03 CRS WAS AN INFLATED ONE. UNFORTUNATELY, AO FAILED TO DISCHARGE THE ONUS ON THE ABOVE ISSUES. THE AO MECHANICALLY COMPARED THE LIST OF SUPPLIERS TO THE ASSESSEE WITH THE LIST AVAILABLE ON THE WEBSITE OF THE SALES TAX DEPARTMENT IE WWW.MAHAVAT.GOV.IN (SUPRA) AND ALL THE PURCHASES FROM THESE PARTIES WERE REJECTED AS BOGUS. IN THE PROCESS, THE AO IGNORED THE ISSUES ABOUT THE FACT OF COMPLETION OF CONTRACTS WITHOUT COMPROMISING THE QUALITY OF THE CONT RACT WORKS . FOR THE SAK E OF COMPLETENESS OF THIS ORDE R, WE EXTRACT THE RELEVANT PARA 8 FROM THE TRIBUNAL S ORDER IN THE CASE OF RAMESH KUMAR & CO (SUPRA) AND THE SAME READS AS UNDER: 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT BEFORE US. WE FIND THAT THE AO HAS MADE THE ADDITION AS SOME OF THE SUPPLIERS OF THE ASSESSEE WERE DECLARED HAWALA DEALERS BY THE SALES TAX DEPARTMENT. THIS MAY BE A GOOD REASON FOR MAKING FURTHER INVESTIGATION BUT THE AO DID NOT MAKE A NY FURTHER INVESTIGATION AND MERELY COMPLETED THE ASSESSMENT ON SUSPICION. ONCE THE ASSESSEE HAS BROUGHT ON RECORD THE DETAILS OF PAYMENTS BY ACCOUNT PAYEE CHEQUE, IT WAS INCUMBENT ON THE AO TO HAVE VERIFIED THE PAYMENT DETAILS FROM THE BANK OF THE ASSESSE E AND ALSO FROM THE BANK OF THE SUPPLIERS TO VERIFY WHETHER THERE WAS ANY IMMEDIATE CASH WITHDRAWAL FROM THE ACCOUNT. NO SUCH EXERCISE HAS BEEN DONE. THE LD CIT (A) HAS ALSO CONFIRMED THE ADDITION MADE BY THE AO BY GOING ON THE SUSPICION AND THE BELIEF T HAT THAT SUPPLIERS OF THE ASSESSEE ARE HAWALA TRADERS. WE ALSO FIND THAT NO EFFORT HAS BEEN MADE TO VERIFY THE WORK DONE BY THE ASSESSEE FROM THE MUNICIPAL CORPORATION OF GREATER MUMBAI. WE AGREE WITH THE SUBMISSIONS OF THE LD COUNSEL THAT IF THERE WERE NO PURCHASES, THE ASSESSEE WOULD HAVE BEEN IN A POSITION TO COMPLETE THE CIVIL WORK. 11. FURTHER, REGARDING THE GP MAINTAINED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE DECLARED GP RATES OF 10.56% (SUPRA). AO HAS NOT EXAMINED THE GP RATE OF THE ASSESSEE OVER THE YEARS ON SIMILAR CONTRACTS. TAKING COMPARABLE CASES, HOWEVER, IT IS THE CLAIM OF THE ASSESSEE WITH THE ADDITION OF RS. 13.03 CRS, THE GP RATE HAS RESULTED TO 21.38%, WHICH IS ABNORMALLY HIGH ON THE FACT OF IT IN THE CONTRACT 8 WORKS LIKE THE ONE E XECUTED BY THE ASSESSEE. UNFORTUNATELY, THERE IS NO REFERENCE TO THESE ASPECTS IN THE ORDER OF THE AO AND THE CIT (A), DESPITE THE REFERENCE MADE BY THE ASSESSEE IN HIS SUBMISSIONS (ITEM 12 IN PAGE 10 OF THE CIT (A)S ORDER IS RELEVANT IN THIS REGARD). T HEREFORE, CIT (A) MAY EXAMINE THIS ISSUE AFRESH IN THE REMAND PROCEEDINGS. HE IS FREE TO CALL FOR RELEVANT REPORTS FROM THE AO AS PER THE PROCEDURE. CIT (A) IS REQUIRED TO EXAMINE THE SACROSANCT NATURE OF THE GP OF 10.56%. 12. COMING TO THE ADDITION OF R S. 1,00,86,929/ - , THE BACKGROUND FACTS GO THE SURVEY ACTION ON 27.2.2012. THE RELEVANT FACTS ARE NOT AVAILABLE THAT RELATES TO THE STATEMENT GIVEN BY THE ASSESSEE INVOLVING THE SAID 5 SUPPLIES SUPPLIERS VIZ (I) ATMASS ENTERPRIS ES; (II) OM CORPORATION; (II I) S HREE SAI ENTERPRISES; (IV) V.K. ENTERPRISE AND (V) VIRAT ENERPRISES; THE NATURE OF DISCLOSURE BY THE ASSESSEE THAT INVOLVES THE DECLARATION OF RS. 1,00,86,929/ - FOR THE AY 2009 - 2010 AS WELL OR OTHERWISE. IN OUR OPINION, THE SAID 5 PARTIES SHOULD BE TR EATED DIFFERENTLY AS THESE PARTIES ARE UNDISPUTEDLY THE NON - SUPPLIERS OF THE RAW MATERIALS NEEDED FOR THE CONTRACTS. IT IS EVIDENT FROM THE FACT THAT ASSESSEE ITSELF OFFERED SUCH CLAIMS AS UNACCOUNTED ONES IN THE PAST. WE CANNOT APPRECIATE AS TO HOW THES E 5 PARTIES, WHO DO NOT HAVE THE CAPACITY TO SUPPLY THE RAW MATERIAL, HAVE GOT CAPACITY TO SUPPLY THE SAME IN THE YEAR UNDER CONSIDERATION. CONSIDERING THE BAC KGROUND OF THE PURCHASES FROM THESE PARTIES, THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THAT THE PURCHASES AMOUNTING TO RS RS. 12,01,91,407/ - ARE GENUINE AND NOT THE UNEXPLAINED ONES. CIT (A) IS DIRECTED TO ADJUDICATE THIS ISSUE OF ADDITION OF RS. 1,00,8 6,929/ - MADE U/S 69C OF THE ACT AFRESH. IT WAS SEPARATELY MADE BY THE AO BY GIVING REASONING AND BY PASSING A SPEAKING ORDER ON THIS ISSUE, WHEREAS THE CIT (A) TREATED THE SAME ON PAR WITH OTHER SUPPLIERS 13. IN SUMMARY, WE ARE OF THE OPINION, CONSIDERING THE ORDERS OF THE TRIBUNAL IN MANY CASES OF ADDITIONS INVOLVING THE SALES TAX DEPARTMENT, THE DI SCLOSURE OF BLACK - LISTED SUPPLIERS AND WHEN THE ASSESSING OFFICER FAILED TO DISCHARGE THE ONUS AS DISCUSSED ABOVE, THE ADDITIONS MADE U/S 69C AMOUNTING TO RS. 12,01,91,407/ - OUT OF TOTAL ADDITION OF RS. 13.03 CRS IS REQUIRED TO BE DELETED. CIT (A) IS DIRE CTED TO EXAMINE THIS ISSUE AND PASS A SPEAKING ORDER ON THE ISSUES RELATING TO THE ASPECTS OF GP AND THE OTHER INDEPENDENT ADDITION OF RS. 1,00,86,929/ - AFTER GATHERING RELEVANT 9 FACTS FROM THE SURVEY STATEMENTS, IF ANY . CIT (A) SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUN CED IN THE OPEN COURT ON 10 TH FEBRUARY , 2016. SD/ - SD/ - ( AMARJIT SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 10 .2 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBA I