OASIS INFRASTRUCTURE P.LTD, MUMBAI V. CIT (A) 22, MUMBAI

ITA 5673/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2910 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 09-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Keywords: Business expenditure; Opportunity of being heard; Principle of natural justice; Accommodation entries; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.5673 /MUM/2014 ( / ASSESSMENT YEAR : 2010-11) OASIS INFRASTRUCTURE PVT. LTD., 119-121/B, SHRIKANT CHAMBERS, SION TROMBAY ROAD, NEAR R.K. STUDIO, CHEMBUR, MUMBAI 400 071. / V. ACIT 10(2), 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. ./ PAN : AAACO5715 H ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI DEVENDRA JAIN REVENUE BY : SHRI NAVEEN GUPTA / DATE OF HEARING : 16-6-2016 / DATE OF PRONOUNCEMENT : 14-09-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE COMPANY, BEING ITA NO. 5673/MUM/2014, IS DIRECTED AGAINST THE APPELLATE OR DER DATED 26 TH JUNE, 2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX ( APPEALS)- 22, MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSME NT YEAR 2010-11, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARI SING FROM THE ASSESSMENT ORDER DATED 18 TH DECEMBER, 2012 PASSED BY THE LEARNED ASSESSING OFF ICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INC OME TAX ACT,1961 (HEREINAFTER CALLED THE ACT). ITA 5673/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE COM PANY IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL , MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED ASSESSING OFFICER -ACIT -10(2), MUMBAI HAS ERRED IN DISALLOWING REVENUE EXPENSE OF DISMANTLING, LOADING, UNLOADING AND ASSEMBLING CHARGES RS.25,00,000/- PAID BY THE APPELLANT FOR MOVE MENT OF THE CRAWLER CRANE, BY HOLDING IT TO BE NON GENUINE EXPENS E. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF HIRING OF CRANES AND EQUIPMENTS, INCLUD ING MOBILIZATION AND DEMOBILIZATION. DURING THE YEAR THE ASSESSEE HAS P URCHASED A USED CRANE NAMELY CRANE KOBELCO CKE 2500 FROM JANAK CRANES I N WORKING CONDITION AT SITE WITH ALL ITS ACCESSORIES FOR A CONSIDERATIO N OF RS 7.20 CRORES FOR WHICH NECESSARY INVOICE WERE SUBMITTED. THE ASSESSEE COMP ANY HAS FURNISHED A PROOF IN THE FORM OF INVOICE RAISED ON JANAK CRANES FOR THE HIRING CHARGES EARNED FOR THE PERIOD FROM 8 TH FEB 2010 TO 28 TH FEB 2010 AND 1 ST MARCH 2010 TO 31 ST MARCH 2010 BY PUTTING ABOVE REFERRED CRANE INTO AC TUAL USE. THE ASSESSEE COMPANY HAS CLAIMED TO HAVE INCURRED AN EX PENDITURE OF RS. 25,00,000/- TOWARDS DISMANTLING, LOADING, UNLOADING AND ASSEMBLING OF THE ABOVE SAID CRANE FROM JANAK CRANES. THE ASSESSEE WA S ASKED BY THE AO TO JUSTIFY AS TO WHY ABOVE REFERRED EXPENDITURE SHOULD NOT BE TREATED AS CAPITAL EXPENDITURE. IN RESPONSE, THE ASSESSEE SUBMITTED TH AT THE SAID CRANE WAS PURCHASED BY THE ASSESSEE COMPANY IN WORKING CONDI TION ON 5 TH FEBRUARY, 2010 WITH ALL ITS ACCESSORIES FROM JANAK CRANE AT S ITE ONLY. THE SAID CRANE WAS MOVED TO ANOTHER SITE AT KOLKATA FOR HIRING PUR POSE DIRECTLY FROM THE PLACE AT WHICH IT WAS PURCHASED AND SINCE THE CRANE IS A CRAWLER CRANE AND CANNOT TRAVEL ON ROAD IT HAS TO BE TRANSPORTED ON V ARIOUS TRAILERS AND TRUCKS AFTER DISMANTLING INTO VARIOUS PARTS AND IT WILL BE LOADED INTO VARIOUS TRAILERS ITA 5673/MUM/2014 3 FOR TRANSPORTING FROM ONE PLACE TO ANOTHER AND FOR THIS, THE SAID AMOUNT HAS BEEN PAID TO JANAK CRANE FOR DISMANTLING THE CRANE INTO VARIOUS PARTS AND LOADING AS WELL AS UNLOADING INTO TRAILERS AND ASSE MBLING AT OTHER SITE. IT WAS SUBMITTED THAT THE EXPENSES CAN BE CAPITALIZED TO A SSET ONLY AND ONLY IF SUCH EXPENDITURE INCREASES THE FUTURE BENEFITS FROM THE EXISTING ASSET BEYOND ITS PREVIOUSLY ASSESSED STANDARD OF PERFORMANCE AND WIL L BE INCLUDED IN THE GROSS BOOK VALUE, E.G., AN INCREASE IN CAPACITY. IT WAS S UBMITTED THAT THE CRANE WAS PURCHASED IN TOTAL WORKING AND RUNNING CONDITION FR OM THE PARTY AND HAD BEEN DIRECTLY DISPATCHED TO THE SITE FOR WORK, THE QUESTION OF CONSIDERING THE EXPENSE FOR DISMANTLING, LOADING, AND UNLOADING AND ASSEMBLING AS CAPITAL EXPENDITURE DOES NOT ARISE AND IT WAS RIGHTFULLY CO NSIDERED AS REVENUE EXPENDITURE. THE CRANE HAS STARTED WORKING FROM 8 TH FEBRUARY, 2010 ONWARDS FOR WHICH THE WORK ORDER FOR THE CRANE WAS IN THE N AME OF JANAK CRANES AND HAS BEEN CHANGED IN ASSESSEE COMPANY'S NAME FROM AP RIL, 2010 ONWARDS AND HENCE THE HIRING BILL FOR THE MONTH OF FEB & MARCH 2010 WERE RAISED ON JANAK CRANES ITSELF. THE ASSESSEE COMPANY WAS ASKED BY TH E AO TO JUSTIFY THE GENUINENESS OF THE ABOVE EXPENSE. NO DETAILS WERE P ROVIDED BY THE ASSESSEE COMPANY. THE ASSESSEE SUBMITTED THAT THE CRANE WAS PURCHASED BY THE ASSESSEE IN WORKING CONDITION ALONG WITH RUNNING WO RK ORDER WITH ALL ITS ACCESSORIES FROM JANAK CRANES AT MAITHAN POWER PROJ ECT SITE, JHARKHOND, ONLY. THE SAID CRANE WAS MOVED TO ANOTHER LOCATION OF THE SAME SITE AT MAITHAN POWER PROJECT SITE, JHARKHAND FOR HIRING PU RPOSE DIRECTLY FROM THE PLACE AT WHICH IT WAS PURCHASED UNDER RUNNING CONTR ACT OF JANAK CRANES ONLY AND THE HIRING WAS STARTED FROM 8 TH FEBRUARY, 2010 ONWARDS. IT WAS SUBMITTED THAT THE CRANE IS A CRAWLER CRANE AND CAN NOT TRAVEL ON ROAD AND HENCE IT HAS TO BE TRANSPORTED ON VARIOUS TRAILERS AND TRUCKS. THE CRANE HAS TO BE DISMANTLED INTO VARIOUS PARTS. FOR THIS PURPO SE THE AMOUNT HAS TO BE PAID TO JANAK CRANES FOR DISMANTLING THE CRANE INTO VARIOUS PARTS AND LOADING AS WELL AS UNLOADING INTO TRAILERS AND ASSEMBLING A T OTHER LOCATION OF THE SAME ITA 5673/MUM/2014 4 SITE OF MAITHAN POWER PROJECT, JHARKHAND . THE ASSE SSEE HAS SUBMITTED THE FOLLOWING DOCUMENTS TO SUBSTANTIATE ITS CLAIM:- 1) INVOICE OF JANAK CRANES FOR RS. 27,57,500/- TOW ARDS THE CHARGES. 2) HIRING INVOICE ON JANAK CRANES FOR FEB & MARCH 2 010 RAISED BY THE ASSESSEE COMPANY 3) HIRING INVOICE ON SIMPLEX INFRASTRUCTURE LTD FRO M APRIL 2010 ONWARDS RAISED BY THE ASSESSEE COMPANY. 4) WORK-ORDER OF SIMPLEX INFRASTRUCTURE LTD IN THE ASSESSEE COMPANY'S NAME FOR HIRING OF CRANE FOR SAME SITE DA TED 26.03.2010. 5) WORK-ORDER OF JANAK CRANES FOR SAME SITE EARLIER DATED 22.05.2009. 6) LETTERS WRITTEN BY THE ASSESSEE COMPANY & JANAK CRANES FOR CHANGE OF WORK-ORDER DATED 22.02.2010. 7) TDS CERTIFICATE ISSUED BY THE ASSESSEE COMPANY FOR TDS DEDUCTED. 8) LEDGER ACCOUNT OF JANAK CRANES FOR THE FINANCIAL YEAR 2009-2010 & 2010-2011 REFLECTING THE TOTAL TRANSACTION OF BIL L, PAYMENT, TDS, SERVICE TAX ETC. 9) XEROX COPY OF BANK STATEMENT FOR PAYMENT OF RS. 25,00,000/- TO JANAK CRANES. THE A.O. REJECTED THE CONTENTIONS OF THE ASSESSEE A ND OBSERVED THAT THE ASSESSEE IN ITS INITIAL SUBMISSION STATED THAT AFTE R PURCHASE OF THE CRANE IN WORKING CONDITION ON 5 TH FEBRUARY, 2010 FROM JANAK CRANES AT SITE AT MAITHAN POWER PROJECT, JHARKHAND , IT WAS MOVED TO ANOTHER SITE AT KOLKATA FOR HIRING PURPOSE DIRECTLY FROM THE PLACE AT WHICH IT WAS PURCHASED. HOWEVER, THE ASSESSEE HAS CHANGED HIS STAND THAT TH E CRANE WAS MOVED TO ANOTHER LOCATION WITHIN MAITHAN POWER PROJECT, JHAR KHAND SITE FOR HIRING ITA 5673/MUM/2014 5 PURPOSE. IT WAS OBSERVED BY THE A.O. THAT THE WORK ORDER WAS IN THE NAME OF JANAK CRANES AND THEY HAVE CONTINUED TO RAISE INVOI CE ON THE JANAK CRANES TILL THE END OF MARCH 2010 AND SUBSEQUENTLY FROM AP RIL 2010 THEY HAVE RAISED INVOICE ON THE END USER PARTY SIMPLEX INFRASTRUCTUR E LIMITED DIRECTLY. IT WAS OBSERVED THAT SINCE THE WORK ORDER WERE IN THE NAME OF JANAK CRANES ASSESSEE HAS RAISED INVOICE ON JANAK CRANES AND WER E ABLE TO GET IT CHANGED IN THEIR NAME FROM APRIL, 2010 ONWARDS IS PROVING C LEARLY THAT ASSESSEE HAD CONTINUED OPERATING THE SAID CRANE AT THE SAME SITE AT MAITHAN POWER PROJECT, JHARKHAND ONLY WITHOUT INDULGING INTO A MOBILIZATIO N OF CRANE FROM ONE SITE TO ANOTHER SITE/LOCATION FOR WHICH THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING DOCUMENT TO PROVE THAT THE CRANE WAS IN FACT MOBILIZED FROM ONE LOCATION TO ANOTHER LOCATION WITHIN MAITHAN POWER P ROJECT SITE. THE A.O. ALSO REFERRED TO THE CONTENTS OF THE AGREEMENT WITH THE JANAK CRANES AND M/S SIMPLEX INFRASTRUCTURES LIMITED. IT WAS ALSO OBSER VED THAT ON 22 ND FEBRUARY, 2010 JANAK CRANES REQUESTED FOR CHANGE OF WORK ORDE R TO M/S SIMPLEX INFRASTRUCTURES LIMITED TO BE REPLACED IN FAVOUR OF THE ASSESSEE COMPANY. SIMILARLY ON 22 ND FEBRUARY, 2010 THE ASSESSEE ALSO WROTE TO M/S SIMP LEX INFRASTRUCTURES LTD. FOR THE ISSUANCE OF WORK ORDER IN THEIR NAME. THE A.O. ACCORDINGLY CAME TO THE CONCLUSION THAT THE EXPENDI TURE CLAIMED BY THE ASSESSEE ON ACCOUNT OF LOADING AND UNLOADING CHARGE S IS NON-GENUINE WHICH IS EVIDENT FROM THE WORK ORDER AND AN AMOUNT OF RS. 25 LACS WAS DISALLOWED AS BUSINESS EXPENSES AND ADDED TO THE INCOME OF THE ASSESSEE BY THE AO VIDE ASSESSMENT ORDER DATED 18-12-2012 PASSED BY THE AO U/S. 143(3) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 18-12-20 12 PASSED BY THE A.O. U/S 143(3) OF THE ACT, THE ASSESSEE FILED ITS FIRST APPEAL BEFORE THE LD. CIT(A). 5. BEFORE THE LD. CIT(A), THE ASSESSEE REITERATED I TS SUBMISSION WHAT WERE MADE BEFORE THE A.O. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS PURCHASED 250MT CAPACITY KOBELCO CKE 2500 CRANE FRO M M/S. JANAK ITA 5673/MUM/2014 6 CRANES AT MAITHON SITE JHARKHAND WHICH WAS IN USE A T THE SITE ITSELF. THE WORK ORDER DATED 22 ND MAY, 2009 ISSUED BY M/S SIMPLEX INFRASTRUCTURES LIMITED INDICATE THAT THE WORK CONNECTED TO MAITHON POWER PROJECT SITE, JHARKHAND WAS AWARDED TO M/S. JANAK CRANES AND THE HIRE CHARGES FOR THE CRAWLER WAS FIXED AT RS.16.5 LACS PER MONTH. THE AS SESSEE CLAIMED THAT THE ABOVE CRANE WAS PURCHASED ON 5 TH FEBRUARY, 2010 ALONG WITH ALL ITS ACCESSORIES FROM JANAK CRANES AT MAITHON PROJECT SI TE ITSELF. THE LD. CIT(A) OBSERVED FROM THE INVOICE NO. 078 THAT IT WAS RAISE D BY JANAK CRANES IN THE NAME OF THE ASSESSEE ON 2.3.2010 AND NOT ON 5.02.20 10 AND HENCE THE CONTENTION OF THE ASSESSEE THAT THE CRANE WAS PURCH ASED IN THE MONTH OF FEBRUARY 2010 CANNOT BE ACCEPTED IN THE ABSENCE OF ANY CONCRETE EVIDENCE. IT WAS ALSO OBSERVED THAT IT WAS NOT POSSIBLE TO DISMA NTLE THE CRANE WITHIN A PERIOD OF TWO DAYS AND IT WAS REASSEMBLED AT THE NE W LOCATION IN THE SAME SITE AND THE WORK STARTED AT THE NEW SITE ON 8.2.20 10. DISMANTLING SUCH A HEAVY CRANE INTO VARIOUS PARTS, THEN LOADING IN THE TRAILERS, TRANSPORTATION, UNLOADING AND FINALLY REASSEMBLING AT THE NEW SITE WAS NOT POSSIBLE WITHIN A SHORT PERIOD OF TWO DAYS. IT WAS OBSERVED THAT THE WORK ORDER GIVEN TO JANAK CRANES WAS IN RESPECT OF MAITHAN SITE AT JHARKHAND, WHEREAS THE DESCRIPTION IN THE INVOICE SHOWS KOLKATTA SITE AND HENCE THERE IS A CONTRADICTION IN THE ASSESSEES CLAIM. VIDE LETTER DATED 22 ND FEBRUARY, 2010 FOR THE FIRST TIME M/S. JANAK CRANES ADDRESSED A LETTER TO M/S. SIMPLEX INF RASTRUCTURE LIMITED WITH A REQUEST TO CHANGE THE WORK ORDER IN FAVOUR OF THE ASSESSEE AT THE EARLIEST EFFECTIVE FROM 1 ST MARCH, 2010. SIMILARLY THE ASSESSEE ALSO ADDRESSED A LETTER DATED 22 ND FEBRUARY, 2010 TO M/S. SIMPLEX INFRASTRUCTURE LIMI TED TO REPLACE THE WORK ORDER IN ASSESSEES FAVOUR. NO EVIDENCE IN THE FORM OF REVISED WORK CONTRACT AWARDED TO ASSESSEE FOR THE MONTH OF FEBRU ARY AND MARCH 2010 WAS FURNISHED BEFORE THE LD. CIT(A) WHICH SHOWS THAT TH E CRANES MIGHT NOT HAVE BEEN PUT INTO USE IN THE MONTH OF FEBRUARY AND MARC H 2010 BY THE ASSESSEE. WITH RESPECT TO THE EXPENDITURE RELATED TO TRANSPO RTATION, DISMANTLING ETC. WAS PAID TO M/S. JANAK CRANES, THE ASSESSEE WAS DIR ECTED TO FILE THE COPY OF ITA 5673/MUM/2014 7 THE INVOICE RAISED IN SUPPORT OF THE CONTENTION THA T THE PAYMENT TOWARDS THE DISMANTLING, TRANSPORTATION ETC. WAS GENUINE. THE L D. CIT(A) HELD THAT THE DATE OF SALE VIS-A-VIS THE DATE OF INVOICE RAISED IN RES PECT OF DISMANTLING, TRANSPORTATION ETC. COMPARED TO THE CLAIM OF USE OF CRANE FROM 5.02.2010 AND NON MENTION OF TRANSPORTATION IN THE INVOICE AND NO N EXISTENCE OF CONTRACT BETWEEN THE ASSESSEE AND THE SIMPLEX INFRASTRUCTURE S DURING THIS FINANCIAL YEAR, THE SUPPLIER OF THE CRANE HAD ONLY ISSUED ACC OMMODATION BILL FOR THE MONTH OF FEBRUARY & MARCH, 2010 TOWARDS CRANE HIRIN G. SIMILARLY, THE ALLEGED DISMANTLING, LOADING, UNLOADING, ASSEMBLING AND TRA NSPORTATION OF CRANE WAS ALSO AN ACCOMMODATION ENTRY GIVEN BY THE SUPPLIER. THE WORK SITE BEING IN THE MINES DISMANTLING, TRANSPORTATION BY HIRING THE TRA ILERS AND REASSEMBLING WOULD DEFINITELY BE AN IMPOSSIBLE EVENT IN TWO DAYS CONSIDERING THE HUGE SIZE OF THE CRANE. CONSIDERING ALL THESE FACTS, THE ENTI RE TRANSACTION IS DEFINITELY SHAM AND IT IS A COLOURABLE DEVICE TO CLAIM A BOGUS EXPENDITURE, HENCE, THE ENTIRE CLAIM OF PAYMENT MADE RS . 25 LAKHS WAS TREA TED AS NON GENUINE AND THEREFORE THE ADDITION MADE BY THE AO WAS UPHELD/SU STAINED BY LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 26-06-2014. 6. AGGRIEVED BY THE APPELLATE ORDER DATED 26-06-201 4 PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE ASSESSEE ACQUIRED CRANE FROM JANAK CRANES WHICH WAS OPERATING AT MAITHAN POWER PROJECT AT JHARKHAND ON RUNNING CONDI TION AS ON WHERE BASIS ALONG WITH THE WORK ORDER AWARDED BY SIMPLEX INFRAS TRUCTURE LIMITED FOR HIRING OF THE SAID CRANE AT MAITHAN POWER PROJECT, JHARKHAND. M/S JANAK CRANES HAD HIRED THE SAID CRANE TO M/S SIMPLEX INFR ASTRUCTURE LTD. WHO WERE CONTRACTORS FOR MAITHAN POWER PROJECT AT JHARKHAND. IT WAS SUBMITTED THAT THE SAID CRANE WAS DISMANTLED AND TRANSPORTED TO OT HER LOCATION AT THE SAME SITE AND ASSEMBLED THEREIN AND THE ASSESSEE PAID CH ARGES OF RS.25,00,000/- + ITA 5673/MUM/2014 8 SERVICE TAX TO JANAK CRANES FOR SAID MOVEMENT OF CR ANE . THE PAYMENT WAS MADE BY CROSSED ACCOUNT PAYEE CHEQUE ON 19-01-2010 AGAINST WHICH TAX WAS ALSO DEDUCTED AT SOURCE AND INVOICE WAS ALSO RECEIV ED FROM JANAK CRANES DATED 20-02-2010. THE SAID BANK LEDGER ACCOUNT, BAN K STATEMENT , TDS CERTIFICATE AND INVOICE FROM JANAK CRANES IS PLACED IN PAPER BOOK FILED WITH THE TRIBUNAL. IT IS SUBMITTED THAT THE CRANE WAS PU RCHASED FROM JANAK CRANES FOR RS. 7.20 CRORES AGAINST WHICH INVOICE IS PLACED IN PAPER BOOK PAGE 4 FILED WITH THE TRIBUNAL. IT WAS SUBMITTED THAT TH E WORK CONTRACT DATED 22/25-02-2009 WAS IN FAVOUR OF JANAK CRANES ISSUED BY SIMPLEX INFRASTRUCTURE LIMITED FOR HIRING OF SAID CRANE ON MONTHLY RENTAL OF RS.16.50 LACS(PB/PAGE 11-14).THE SAID WORK ORDER WAS CHANGED BY SIMPLEX INFRASTRUCTURE LIMITED IN FAVOUR OF THE ASSESSEE VI DE LOI DATED 26-03-2010 ON THE SAME TERMS AND CONDITIONS WHICH IS PLACED IN PA PER BOOK PAGE 15-18, IN PURSUANCE OF REQUEST LETTER WRITTEN BY JANAK CRANES (PB/PAGE 8 ) AND THE ASSESSEE (PB/PAGE 7) BOTH DATED 22.02.2010 TO SIMPL EX INFRASTRUCTURE LIMITED TO TRANSFER THE WORK ORDER IN FAVOUR OF THE ASSESSEE. IT WAS SUBMITTED THAT FOR THE INTERIM PERIOD FROM 08-02-2010 TO 31- 03-2010 , THE INVOICING FOR HIRING OF CRANE WAS DONE BY THE ASSESSEE ON JANAK C RANES(PAGE 9-10/PB) AS THE WORK ORDER WAS IN FAVOUR OF JANAK CRANES , AND FROM APRIL 2010 THE INVOICING WAS DONE DIRECTLY IN FAVOUR OF SIMPLEX IN FRASTRUCTURE LIMITED (PB/PAGE 19-20) AS THE LOI DATED 26-03-2010 WAS ISS UED BY SIMPLEX INFRASTRUCTURE LIMITED IN FAVOUR OF THE ASSESSEE. I T WAS SUBMITTED THAT THE AUTHORITIES BELOW ERRED IN TREATING THE SAID EXPENS ES OF RS. 25,00,000/- FOR DEMOBILIZATION AND MOBILIZATION OF CRANES BY DE-ASS EMBLING, TRANSPORTATION AND ASSEMBLING AT ANOTHER LOCATION WITH IN THE SAME SITE OF MAITHAN POWER PROJECT AT JHARKHAND AS NOT GENUINE AND TREATING TH E SAME TRANSACTION AS SHAM AND COLORABLE DEVICE. THUS, IT WAS SUBMITTED I N NUT-SHELL THAT THE SAID EXPENSES OF RS. 25,00,000/- ( EXCLUSIVE OF SERVICE TAX AMOUNT WHICH IS CLAIMED AS CENVAT CREDIT BY THE ASSESSEE ) FOR DISM ANTLING , TRANSPORTATION AND RE-ASSEMBLING OF THE CRANE AT A DIFFERENT LOCATION WITHIN SITE OF MAITHAN ITA 5673/MUM/2014 9 PROJECT, JHARKHAND BE ALLOWED AS NORMAL BUSINESS EX PENDITURE .THE ASSESSEE RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF CIT V. NIKUNJ EXIMP ENTERPRISES PRIVATE LIMITED (2013) 216 TAXMAN 171(BOM.). 8. THE LD. DR RELY ON THE APPELLATE ORDERS OF THE L EARNED CIT(A). 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE HAD PURC HASE 250 MT CAPACITY CRANE KOBELCO CKE 2500 SR. NO. JD 04 02 407 FROM JA NAK CRANES FOR RS. 7,20,00,000/- VIDE INVOICE NO. 078 DATED 02-03-2010 OF JANAK CRANES(PAPER BOOK/PAGE 4) ALTHOUGH PAYMENTS WERE STATED TO BE MA DE THROUGH HDFC BANK LOAN-3314541 ON 2-3-2010 AS PER LEDGER ACCOUNT SUBM ITTED(PAGE 1/PB), WHEREIN ON PERUSAL OF THE LEDGER ACCOUNT OF JANAK C RANES SUBMITTED BY THE ASSESSEE , THE INVOICE DEPICTED IN LEDGER ACCOUNT I S INVOICE NO 76 DATED 01-02- 2010 FOR RS. 7,20,00,000/- FOR PURCHASE OF KOBELCO CRAWLER CRANE SR. NO. JD04-02407 WITH COMPLETE ACCESSORIES. THUS , THERE IS A DISCREPANCY TO THAT EXTENT IN THE INVOICE DATE BUT BE THAT IT MAY BE TH E ASSESSEE INVOICED JANAK CRANES FOR USE OF THE SAID CRANES W.E.F. 08-02-2010 AND RAISED INVOICES FOR HIRING OF CRANES IN FAVOUR OF JANAK CRANES FOR THE MONTH OF FEBRUARY/MARCH 2010 AS THE WORK ORDER ISSUED BY SIMPLEX INFRASTRUC TURE LIMITED WAS IN FAVOUR OF JANAK CRANES WHICH GOT REPLACED BY ISSUE OF LOI IN FAVOUR OF THE ASSESSEE ONLY ON 26-03-2010 AND THE ASSESSEE STARTE D INVOICING SIMPLEX INFRASTRUCTURE LIMITED DIRECTLY W.E.F. 01-04-2010 O NWARDS. THE BACKGROUND IS THAT THE SAID CRANE SO ACQUIRED BY THE ASSESSEE WAS OWNED BY JANAK CRANES AND WAS INSTALLED AT MAITHAN POWER PROJECT AT JHARK HAND ON HIRE TO SIMPLEX INFRASTRUCTURE LIMITED VIDE WORK ORDER DATED 22/25- 05-2009. THE ASSESSEE ACQUIRED THE CRANE AS ON WHERE BASIS FROM JANAK CRA NES ALONG WITH WORK ORDER FOR HIRING BY SIMPLEX INFRASTRUCTURE LIMITED AT THE SAME SITE/LOCATION AND CONTINUED WITH THE SAID CRANE ON HIRE TO SIMPLE X INFRASTRUCTURE LIMITED ON SAME TERMS AND CONDITION AT THE SAME SITE. THERE IS NO EVIDENCE ON RECORD ITA 5673/MUM/2014 10 TO PROVE THAT THE CRANES WERE DE-ASSEMBLED , TRANSP ORTED AND RE-ASSEMBLED I.E. DEMOBILIZED AND MOBILIZED AT KOLKATTA AS INITI ALLY CLAIMED BY THE ASSESSEE OR AT DIFFERENT LOCATION AT THE SAME SITE AT MAITHA N POWER PROJECT AT JHARKHAND WHICH WAS SUBSEQUENTLY CLAIMED BY THE ASS ESSEE. THE ASSESSEE HAS STATED TO HAVE PAID ADDITIONALLY RS. 25,00,000 /- ( EXCLUSIVE OF SERVICE TAX WHICH WAS CLAIMED AS CENVAT CREDIT) TO JANAK CRANES FOR THE SAID DE- ASSEMBLY, TRANSPORTATION AND RE-ASSEMBLY OF THE SAI D CRANE I.E FOR DEMOBILIZATION AND MOBILIZATION OF THE SAID CRANE A T NEW LOCATION AT THE SAME SITE FOR WHICH NO EVIDENCE WHATSOEVER IS AVAILABLE ON RECORD AND THIS CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED AND I S HEREBY REJECTED. HOWEVER, IF WE CONSIDER THE ENTIRE SEQUENCE OF EVEN T IN TOTALITY , IT PRIMA FACIE EMERGES THAT THE ASSESSEE INITIALLY PAID RS. 25,00, 000/- TO JANAK CRANES ON 19-01-2010 WHICH APPEARS PRIMA FACIE TO BE ADVANCE FOR BOOKING /CONFIRMING THE PURCHASE OF CRANE AND THEREAFTER INVOICE OF RS. 7.20 CRORE WAS RECEIVED ON 05-02-2010 BEING INVOICE NO76 ISSUED BY JANAK CRANE S AS PER LEDGER ACCOUNT ENCLOSED IN PAPER BOOK/PAGE 1 . THEREAFTER , HDFC BANK LOAN OF RS. 7.20 CRORES IS REFLECTED FOR MAKING PAYMENT FOR PURCHASE OF THE CRANE ON 02-03- 2010 . THE INVOICE DATED 20-02-2010 BEARING NO 169 FOR SERVICE CHARGES WAS RECEIVED WHICH PRIMA FACIE APPEARS TO BE FOR THE P URPOSES TO SQUARE OFF THE BALANCE OF ADVANCE OUTSTANDING IN THE SHAPE OF DISM ANTLING, LOADING, UNLOADING AND ASSEMBLING OF CRANES AGAINST WHICH NO EVIDENCE FOR THE ACTUAL EXECUTION OF THE STATED JOB IN THE INVOICE IS ON RE CORD. IN OUR CONSIDERED VIEW, THE ASSESSEE IS NOT COMING OUT WITH THE TRUE AND CO RRECT FACTS TO REFLECT THE TRUE CHARACTER OF THE SAID TRANSACTION AND PAYMENT THEREOF AND IN OUR VIEW PRIMA FACIE IT APPEARS THAT THIS PAYMENT OF RS. 25, 00,000/- IS CONNECTED WITH THE PURCHASE OF THE CRANE BUT THE ASSESSEE IS NOT C OMING OUT WITH THE TRUE AND CORRECT FACTS . THE REVENUE HAS ALSO NOT BROUGH T ON RECORD ANY CONCLUSIVE EVIDENCE TO SUPPORT ITS CONTENTION THAT THESE ARE BOGUS ACCOMMODATION ENTRIES AND THE TRANSACTION IS A SHAM AND COLORABLE DEVICE AS NO ENQUIRY HAS BEEN MADE BY THE AO WITH JANAK CRANE S/SIMPLEX ITA 5673/MUM/2014 11 INFRASTRUCTURE LIMITED OR WITH HDFC BANK FROM WHOM LOANS WERE AVAILED . IN OUR CONSIDERED VIEW AND IN THE INTEREST OF JUSTICE AND FAIR PLAY, THIS MATTER NEEDS TO BE SET ASIDE TO THE FILE OF THE AO FOR RE- DETERMINATION OF THE ISSUE ON MERITS WHEREIN THE ASSESSEE IS DIRECTED TO PRODUCE ALL NECESSARY EVIDENCES AND EXPLANATIONS TO BRING OUT TRUE AND CORRECT NATU RE AND CHARACTER OF THE TRANSACTION. THE AO WILL EXAMINE, ENQUIRE AND VERIF Y THE CONTENTIONS OF THE ASSESSEE IN ACCORDANCE WITH LAW BEFORE ADJUDICATION THE MATTER ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PROPER AN D ADEQUATE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED BY THE AO TO THE ASSE SSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LA W. WE ORDER ACCORDINGLY. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN ITA NO. 5673/MUM/2014 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER, 2016. # $% &' 14-09-2016 ( ) SD/- SD/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 14-09-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS ITA 5673/MUM/2014 12 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI