CITY LIFE DEVELOPERS, MUMBAI V. CIT 25, MUMBAI

ITA 6116/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1359 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 30-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: DR K SHIVRAM ADITYA AJGAONKAR
• Keywords: Bogus purchase; Unexplained expenditure; Depreciation; Opportunity of cross examination; Additional depreciation; Additional evidence; Third party statement
• Section: 69C; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.6116/M/2014 ASSESSMENT YEAR: 2010-11 M/S. CITY LIFE DEVELOPERS, 5 TH FLOOR, AGARWAL GOLDEN CHAMBER, PLOT NO.13/A, FUN REPUBLIC ROAD, OFF NEW LINK ROAD, ANDHERI-WEST, MUMBAI 400 053 PAN: AADFC1252B VS. ACIT-25(1), C-11, 2 ND FLOOR, PRATYAKSH KAR BHAWAN, BKC, BANDRA EAST, MUMBAI - 51 (APPELLANT) (RESPONDENT) ITA NO.6208/M/2014 ASSESSMENT YEAR: 2010-11 O/O. ASSTT. COMMISSIONER OF INCOME TAX 25(1), PRATYAKSH KAR BHAVAN, ROOM NO.202, 2 ND FLOOR, BANDRA KURLA COMPLEX, BANDRA (EAST) MUMBAI 400 051 VS. M/S. CITY LIFE DEVELOPERS, 5 TH FLOOR, AGARWAL GOLDEN CHAMBER, PLOT NO.13/A, FUN REPUBLIC ROAD, OFF NEW LINK ROAD, ANDHERI-WEST, MUMBAI 400 053 PAN: AADFC1252B (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : DR. K. SHIVRAM, ADITYA AJGAONKAR, A .R. REVENUE BY : MS. ARJU GARODIA, D.R. DATE OF HEARING : 16.02.2017 DATE OF PRONOUNCEMENT : 03.04.2017 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED CROSS APPEALS ONE BY THE ASSES SEE AND THE OTHER BY THE REVENUE HAVE BEEN PREFERRED AGAINST THE ORDER D ATED 28.07.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS). FIRST WE TAK E UP ASSESSEES APPEAL BEARING ITA NO.6116/M/2014. ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 2 ITA NO.6116/M/2014 THE ASSESSEE IN THIS APPEAL HAS TAKEN THE FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) HAS GROSSLY ERRED BOTH IN LA W AS WELL AS IN FACTS IN CONFIRMING THE ASSESSING OF INCOME BY THE ASSESS ING OFFICER OF PEACE HEAVEN PROJECT ON PROTECTIVE BASIS. 2. THE LEARNED CIT(A) HAS FURTHER ERRED IN NOT APPR ECIATING THE FACTS THAT THE INCOME OF PEACE HEAVEN PROJECT HAS B EEN ASSESSED IN ASSESSMENT YEAR 2009-10. THEREFORE, ASSESSING THE S AID INCOME AGAIN FOR ASSESSMENT YEAR 2010-11 ON PROTECTIVE BASIS IS COMP LETELY UNJUSTIFIED AND UNCALLED FOR. 3. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE D ISALLOWANCE OF RS.6,27,167/- WHICH REPRESENTS AMOUNT PAYABLE TO AR CHITECT M/S AJAY WADE & ASSOCIATES OUT OF HIS TOTAL BILL OF RS.21,80,111/ - THEREFORE, DISALLOWANCES OF OUTSTANDING PAYMENT IS COMPLETELY UNJUSTIFIED. 4. THE LEARNED CIT (A) HAS FURTHER ERRED IN NOT APP RECIATING THE FACT THAT THE SAID OUTSTANDING PAYMENT OF RS.6,27,167/- REPRESENTS EXPENSES ACCRUED AND DUE DURING THE YEAR AND PAID SUBSEQUENT LY, THEREFORE DISALLOWANCES OF THE SAME IS COMPLETELY UNJUSTIFIED . GROUND NOS.1 & 2: 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE IMPUGNED ADDITIONS WHICH HAVE BEEN CONTESTED VIDE G ROUND NOS.1 & 2 OF THE APPEAL WERE MADE ON PROTECTIVE BASIS PURSUANT TO OR DER DATED 25.04.2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX. HE H AS FURTHER STATED THAT THE SAID ORDER DATED 25.04.2013 PASSED UNDER SECTION 26 3 OF THE ACT HAS BEEN QUASHED BY THE TRIBUNAL VIDE ORDER DATED 18.05.15 P ASSED IN ITA NO.4498/M/13. IN VIEW OF THIS, GROUND NOS.1 & 2 HA VE BECOME INFRUCTUOUS AT THIS STAGE. IN VIEW OF THE ABOVE GROUND NOS.1 & 2 OF THE APPEA L ARE DISMISSED HAVING BECOME INFRUCTUOUS. GROUND NOS.3 & 4 : 3. THE LD. A.R. OF THE ASSESSEE, BRINGING OUR ATTEN TION TO GROUND NOS.3 & 4 OF THE APPEAL HAS STATED THAT THE DISALLOWANCE OF R S.6,27,167/- HAS BEEN MADE BY THE AO ON ACCOUNT OF DIFFERENCE/MISMATCH OF THE FIGURES IN THE ACCOUNTS OF ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 3 THE ASSESSEE AND THE PAYEE OF THE AMOUNT PAID BY TH E ASSESSEE TO MR. AJAY WADE. HE HAS FURTHER STATED THAT THE ASSESSEE HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING WHEREAS MR. AJAY WA DE, THE PAYEE, HAS BEEN FOLLOWING THE CASH SYSTEM OF ACCOUNTING. THAT THE ASSESSEE HAD BOOKED THE SAID PAYMENT ON ACCRUAL BASIS AND TDS BEING DEDUCTE D THEREUPON; WHEREAS, SINCE MR. AJAY WADE HAS BEEN FOLLOWING CASH SYSTEM OF ACCOUNTING THE SAID AMOUNT WAS NOT SHOWN IN HIS ACCOUNTS AS RECEIPTS. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) THEREFORE DISAL LOWED THE DIFFERENCE OF RS.6,27,167/-. THE LD. COUNSEL FOR THE ASSESSEE HA S ALSO FILED AN APPLICATION FOR ADDITIONAL EVIDENCE AS PER RULE 29 OF THE INCOM E TAX APPELLATE TRIBUNAL RULES, 1963 STATING THAT THE ASSESSEE HAS NOW OBTAI NED CONFIRMATION OF ACCOUNTS FROM MR. AJAY WADE AND THAT THE ALLEGED DI FFERENCE OF AMOUNT HAS ALREADY BEEN PAID BY THE ASSESSEE TO MR. AJAY WADE DURING THE NEXT FINANCIAL YEAR. 4. WE HAVE GONE THROUGH THE COPY OF THE CONFIRMATIO NS FILED BUT WE NOTE THAT THE SAME WERE NOT ENOUGH AND SUFFICIENT EVIDEN CE TO PROVE THE ACTUAL PAYMENT OF THE SAID AMOUNT BY THE ASSESSEE TO MR. A JAY WADE. HOWEVER, CONSIDERING THE INTEREST OF JUSTICE, WE RESTORE THI S ISSUE TO THE FILE OF THE AO TO DECIDE IT AFRESH. THE AO WILL VERIFY THE ACCOUNTS OF THE ASSESSEE AS WELL AS OF MR. AJAY WADE AND THEREAFTER TO DECIDE THE ISSUE AF RESH IN ACCORDANCE WITH LAW. GROUND NOS.3 & 4 ARE THEREFORE TREATED AS ALL OWED FOR STATISTICAL PURPOSES. 5. IN VIEW OF THIS, THE ASSESSEES APPEAL IS TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. NOW COMING TO THE REVENUES APPEAL. ITA NO.6208/M/2014 7. THE REVENUE IN ITS APPEAL HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE LD. ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 4 CIT(A) ERRED IN ALLOWING THE ADDITIONAL DEPRECIATIO N OF RS.1,74,97,618/- WITHOUT CONSIDERING THAT AS PER SEC 32(1)(IIA) OF THE ACT T HE WORDS 'IN THE BUSINESS OF GENERATION OR GENERATION AND DISTRIBUTION OF POWER' WERE INSERTED BY FINANCE ACT 2012 I.E. THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL D EPRECIATION ON WINDMILL ONLY FROM 01.04.2013.' (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE I.T.ACT,1961OF RS 7,79,043/- DESPITE THE FACT THAT THE ASSESSEE DO NOT FULFILL THE CONDITIONS PRESCRIBED IN THIS SECTION. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT THE C OMMENCEMENT CERTIFICATE FOR THE PROJECT WAS ISSUED IN THE NAME OF M/S DHRUV CONSTRUCTION TO DEVELOP WINGS A, B & C UNDER A COMM ON APPROVAL. (IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD CIT(A) ERRED IN NOT CONSIDERING THAT THE JOINT VENT URE ENTERED INTO BY THE ASSESSEE IN RESPECT TO WING C IS AN AFTERTHOUGHT TO SEGREGAT E THE 3 WINGS INTO TWO FIRMS. (V) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) FURTHER ERRED IN NOT CONSIDERING THAT IN THE APPROVED PLAN BEFORE 1.4.2004, THE CONSTRUCTION OF ANY COMMERCIAL UNIT WAS NOT PERMITTED WHEREAS THE WING A & B CONSISTED OF SHOPS . (VI) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION U/S 8 0IB WITHOUT CONSIDERING THAT SOME OF THE FLATS WERE SOLD TO RELATIVES AND SOME F AULTS HAVE BEEN AMALGAMATED INTO ONE FLAT EXCEEDING THE MAXIMUM PERMISSIBLE ARE A, I.E. 1000 SQ. FT. THEREBY VIOLATING THE CONDITIONS REQUIRED FOR DEDUCTION U/S .80IB( 10). (VII) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS. 95,203/- U/S 69C OF THE I.T. ACT AS UNEXPLAINED EXPENDITURE MADE BY THE AO. (VIII) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ALLEGED PURCHASE BILLS WERE NOT SUPPORTED BY THE SUPPLY OF GOODS. (IX) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN NOT APPRECIATING THE FA CT THAT THE NOTICES UNDER 133 ISSUED TO THE PARTIES FROM WHOM ALLEGED B ILLS WERE RECEIVED WERE RETURNED UNDELIVERED BY THE POSTAL AUTHORITIES AND WARD INSPECTOR AND THE ASSESSEE HAS ALSO FAILED TO PRODUCE THE PAR TY BEFORE THE AO. (X) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONSIDERING THAT THE ASSESS EE TRIED TO CAMOUFLAGE THE NON-GENUINE TRANSACTIONS AS GENUINE TO INTRODUC E THE UNEXPLAINED ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 5 MONEY. (XI) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO OVERLOOKING THE STATEMENT GIVEN BY THE PARTIES AND EXPLICIT FINDING OF THE INVESTIGATION CARRIED OUT BY THE SALES TAX DEPA RTMENT AND CORROBORATED BY THE ENQUIRIES OF THE AO. (XII) THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . (XIII) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND.' GROUND NO.(I) 8. THE GROUND NO.(I) OF THE APPEAL IS RELATING TO T HE ISSUE REGARDING THE ALLOWABILITY OF ADDITIONAL DEPRECIATION ON WIND MIL L. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISS UE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF NTPC LTD. VS. DCIT 2012 54 SOT 177 WHEREIN THE HONBLE DELHI HIGH COUR T HAS HELD THAT THE PROCESS OF GENERATION OF ELECTRICITY IS AKIN TO MAN UFACTURE OR PRODUCTION OF ARTICLE OR THING AND THAT AN ASSESSEE ENGAGED IN TH E ACTIVITY OF GENERATION OF ELECTRICITY WOULD BE ENTITLED TO ADDITIONAL DEPRECI ATION UNDER SECTION 32(1). 9. THE LD. D.R. COULD NOT POINT OUT ANY DIFFERENTIA TING CASE LAW AGAINST THE ABOVE STATED PROPOSITION OF LAW LAID DOWN BY THE HO NBLE DELHI HIGH COURT. IN VIEW OF THIS, WE DO NOT FIND ANY FORCE IN GROUND NO.I OF THE APPEAL AND THE SAME IS ACCORDINGLY DISMISSED. GROUND NOS.(II) TO (VI) : 10. THE LD. COUNSEL FOR THE ASSESSEE BRINGING OUR A TTENTION TO GROUND NOS.(II) TO (VI) OF THE APPEAL HAS STATED THAT THE SAME RELATE TO THE DISALLOWANCE MADE BY THE AO UNDER SECTION 80IB(10) OF THE ACT. THE AO OBSERVED THAT THE ASSESSEE HAD NOT COMPLIED WITH THE ELIGIBILITY REQU IREMENTS AS PRESCRIBED UNDER SECTION 80IB(10) OF THE ACT. THE LD. COUNSEL HAS F URTHER INVITED OUR ATTENTION ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 6 TO PARA 8 OF THE IMPUGNED ORDER OF THE LD. CIT(A) W HEREIN THE ISSUE HAS BEEN DISCUSSED. THE RELEVANT PART OF THE OBSERVATIONS O F THE LD. CIT(A) ON THE ABOVE ISSUE IS REPRODUCED AS UNDER: 8. THE NEXT GROUND OF APPEAL PERTAINS TO DISALLOWA NCE OF DEDUCTION U/S.80IB(10). THE FACTS OF THE CASE ARE THAT THE AP PELLANT HAS BEEN CLAIMING THE SAID DEDUCTION SINCE AY 2004-05 IN THE FOLLOWING MANNER: THE AO HOWEVER HAS NOT ALLOWED THE SAID DEDUCTION O N THE GROUNDS THAT ORIGINAL THE COMMENCEMENT CERTIFICATE WAS ISSUED IN THE NAME OF M/S.DHRUV CONSTRUCTION TO DEVELOP WINGS 'A' B & 'C'. THE SAID APPROVAL WAS CONSOLIDATED APPROVAL UNDER COMMO N APPROVAL NO.CHE/1078/LOP WING 'A' AND 'B' WERE DEVE LOPED BY THE SAID DHRUV CONSTRUCTION. HOWEVER IN RESPECT OF WING 'C' ASSESS EE M/S. CITY DEVELOPERS ENTERED INTO A JOINT VENTURE DATED 18-11 -2003 AND BECAME A JOINT DEVELOPER ALONG WITH M/S.DHRUV CONST RUCTION ON THE TERMS AND CONDITIONS SPECIFIED THEREIN. ON PERUSAL OF THE SAID AGREEMENT IT IS SEEN THAT CERTAIN CLAUSES OF THE AG REEMENT ARE STILL BLANK E.G. CLAUSE NO.16. EVEN CLAUSE NO.3 CLEARLY S TATES THAT ALL THE 3 PROPERTIES WERE AMALGAMATED AND LAYOUT WAS APPROVED UNDER NO.CHE/1078/LOP DATED 01-01-2003 AND LAYOUT CONDITI ONS WERE PUT UP BY MCGM UNDER THE REF. NO.BDR-8/5639/2002 DATED 16-10-2002 SAID CLAUSE NO.3 IS SELF SPEAKING PROOF OF COMMON APPROVAL BEARING NO.CHE/10 78/LOP DATED 07-01- 2003. IN THE VIEW OF THE SAME IT IS CLEAR THAT THE JOINT VENTURE AGREEMENT IS AFTER DEVICE BY THE ASSESSEE SO AS TO SEGREGATE THR EE WINGS INTO TWO FIRMS AS STATED ABOVE. IN THE VIEW OF THE ABOVE OF THE BA SIC CONDITIONS OF DEDUCTION U/S.80IB(10) IS NOT SATISFIED BECAUSE THE PROJECT WAS COMPOSITE, JOINT AND SINGLE. BY MERELY BREAKING THE PROJECT IN TO VARIOUS PARTS DOES NOT MAKE THE SAME ELIGIBLE FOR DEDUCTION AS CLAIMED BY THE ASSESSEE. IT IS FURTHER SEEN FROM THE DETAILS FILED THAT A CE RTIFICATE FROM GOVT. LICENSED SURVEYOR SHRI R.B.NEVASE DATED 19-11-2007 CONFIRMS THAT WING A & B CONSISTED OF 9 SHOPS AND APPROXIMATELY BUILT-UP AREA 1773.8 SQ.FT. WHEREAS STATEMENT RECORDED ON OATH FROM SHRI VIJAY GORADIA ON 14-11- ASSESSMENT YEAR AS PER IT RETURN FILED DEDUCTION U/S.80IB(10) 2004-05 1,98,188 2005 - 06 16,37 , 250 2006-07 7,36,978 2007-08 41,03,254 2008 - 09 567,96,889 2009-10 NIL 2010 - 11 7,79,043 ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 7 2006 REVEALS THAT HE HAS TOTALLY DENIED CONSTRUCTIO N OF ANY SHOP IN THE BUILDING (Q.NO.9 TO 12 OF THE STATEMENT). SINCE THE PROJECT CONSISTED OF SHOP IN WINGS A & B THE WHOLE PROJECT CONSISTED OF WINGS A,B & C AUTOMATICALLY BECOME INELIGIBLE FOR DEDUCTION U/S.8 01B(10) BECAUSE IN THE APPROVED PLAN BEFORE 01-04-2004 THE CONSTRUCTION OF ANY COMMERCIAL UNIT WAS NOT PERMITTED. THE COMBINED EFFECT OF THE ABOVE IS THAT THE ASSESSEE WRONGLY CLAIMED DEDUCTION U/S.80IB(10) ON BOTH COUN TS. MOREOVER, IT IS ALSO SEEN FROM THE DETAILS OF FLATS CONSTRUCTED IN WING C THE AREAS OF THE FLAT AS PER BMC APPROVED PLAN ALSO SUB STANTIATE THE FACT THE ASSESSEE HAS SOLD THE FOLLOWING FLATS TO PERSON WHO ARE RELATIVE. FLAT NO. NAME OF THE PURCHASER 702/802 URMILA LADHA- CAN & ANIKET LADHA 1101/1102 ALI Z MISTRY & MRS. FASHA MISTRY 1501/1502 MR. ALWIN MARTIS & MRS. CECELIA MARTIS 1603/1604 DEENA MODI - CAN & RENU MODI CAN 1801/1802 DR. JEET N YADAV & GYANTI YADAV 1803/1903/1904 RAVIKANT PODDAR & VINOD KUMAR DHARMENDRA V PODDAR THE ABOVE DETAILS ALSO PROVE THAT THE ASSESSEE HAS MERELY BROKEN LARGER FLATS INTO TWO UNITS SO AS TO FALL WITHIN THE PERMI TTED AREA OF 1000 SQ.FT. AND 462 SQJT.(CARPET) RESPECTIVELY. IT IS NOTHING BUT A DJOINING COMMON FLATS WITH COMMON AMENITIES LIKE KITCHEN ETC. ONLY FOR THE PUR POSE OF REGISTRATION IT IS DIVIDED INTO PARTS SO THAT THE AREA DOES NOT EXC EED 1000 SQ.FT. SIMILARLY FLAT NO.702 & 802 ARE JUST ONE ABOVE THE OTHER AND ACCORDINGLY FOR THE PURPOSE OF DEDUCTION IS CONSIDERED AS ONE UNITS AS HELD IN THE CASE OF K.G. VYAS 16 ITD 195 (MUMBAI TRIBUNAL) AND 107 ITRD 321 (MUMBAI TRIBUNAL). ON THESE COUNTS ALSO THE CONTENTION OF THE ASSESSEE THAT THE ADJOINING FLATS ARE SEPARATE UNITS DOES NOT HOLD GOOD AS PER THE JU DGMENT OF MUMBAI TRIBUNAL. ACCORDINGLY THE CLAIM OF DEDUCTION U/S.80 IB(10) ON THE GROUND OF EXCESSIVE AREA CONSTRUCTED IN RESPECT OF RESIDENTIA L UNIT IS ALSO VIOLATED AND THEREFORE DISALLOWED. THE AO HAS MADE THE ADDITION AS IN THE EARLIER YEARS. I HAVE GONE THROUGH THE CONTENTION OF THE AO AND I FIND THAT AFTER DETAILED REASONING MY PREDECESSOR HAS ALLOWED THE S AID DEDUCTION TO THE APPELLANT. THE HON. ITAT, MUMBAI IN THE APPELLANT'S OWN CASE HAS ALLOWED RELIEF TO THE APPELLANT FOR AY 2004-05, 2005-06 AND 2006-07 BY UPHOLDING THE DECISION OF CIT(A). RESPECTFULLY FOLLOWING THE DECISION OF HON TRIBUNAL IN THE APPELLANT'S OWN CASE ON THIS ISSUE THIS GROU ND OF APPEAL IS ALLOWED . 11. A PERUSAL OF THE ABOVE PART OF THE IMPUGNED ORD ER REVEALS THAT THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE FOLLOW ING THE DECISION OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR A.Y. 2 004-05, 2005-06 & 2006- 07. SINCE THE ISSUE IS SQUARELY COVERED BY THE DEC ISION OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE AND NO DIFFERENTIATING FAC T HAS BEEN BROUGHT INTO OUR ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 8 KNOWLEDGE FOR THE YEAR UNDER CONSIDERATION, HENCE G ROUND NOS.(II) TO (VI) OF THE REVENUES APPEAL ARE HEREBY DISMISSED. GROUND NOS.(VII) TO (XI): 12. THE LD. COUNSEL FOR THE ASSESSEE, BRINGING OUR ATTENTION TO GROUND NO.(VII) TO (XI) AS REPRODUCED ABOVE, HAS STATED TH AT THE SAME RELATE TO THE DISALLOWANCE OF BOGUS PURCHASES OF RS.95,203/-. HE HAS FURTHER STATED THAT DURING THE YEAR THE AO HAD MADE THE ADDITION OF THE AFORESAID AMOUNT OF RS.95,203/- IN RELATION TO THE PURCHASES MADE BY TH E ASSESSEE FROM MAHAVIR TRADERS BECAUSE OF THE REASON THAT THE NAME OF THE SAID TRADER APPEARED IN THE LIST OF THE HAWALA TRADERS AS PUBLISHED ON THE WEBS ITE OF THE SALES TAX DEPARTMENT. HOWEVER, THE LD. CIT(A) DELETED THE AD DITION SO MADE BY THE AO OBSERVING THAT THE AO HAD NOT MADE INDEPENDENT E NQUIRIES AND THAT THE PURCHASES CANNOT BE HELD AS BOGUS MERELY ON THE BAS IS OF THIRD PARTY STATEMENT; THAT THE PAYMENTS WERE MADE THROUGH BANKING CHANNEL AND THE CORRESPONDING BILLS AND INVOICES WERE ALSO PRODUCED AND EVEN THE CONFIRMATION OF THE ACCOUNTS WAS ALSO FILED FROM MAHAVIR TRADERS ALONG WITH PAN NUMBER. 13. BEFORE US, THE LD. D.R. HAS RELIED UPON THE FIN DINGS OF THE AO AND HAS STATED THAT SINCE AS PER THE SALES TAX DEPARTMENT T HE SAID TRADER WAS INDULGED IN BOGUS BILLING, HENCE THE ADDITIONS HAVE RIGHTLY BEEN MADE BY THE AO. 14. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE HAS RELIED UPON THE FINDINGS OF THE LD. CIT(A) AND HAS SUBMITTED THAT I N THE LIGHT OF VARIOUS CASE LAWS ON THIS ISSUE THE ADDITIONS SO MADE BY THE AO HAVE RIGHTLY BEEN DELETED BY THE LD. CIT(A) RELATING TO THIS ISSUE. HE HAS B ROUGHT OUR ATTENTION TO THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. M.K. BROTHERS (1987) 163 ITR 249 WHEREIN IT HAS BEEN HE LD THAT WHERE THERE WAS NOTHING TO INDICATE THAT THE AMOUNT GIVEN BY THE AS SESSEE FOR THE PURCHASES MADE HAD COME BACK TO THE ASSESSEE IN ANY OTHER FOR M AND WHERE THERE WAS NO EVIDENCE THAT THE SAID CONCERNS GAVE BOGUS VOUCHERS TO THE ASSESSEE AND EVEN THE STATEMENTS MADE BY THE ALLEGED SUPPLIERS IN NO WAY IMPLICATE THE ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 9 TRANSACTION WITH THE ASSESSEE THEN UNDER SUCH CIRCU MSTANCES IT CANNOT BE SAID THAT ENTRIES FOR THE PURCHASE OF GOODS MADE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE BOGUS AND NO ADDITION IN THIS RESPECT CAN BE MADE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER RELIED UPON TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. NIKUNJ EN TERPRISES (P.) LTD. (2013) 35 TAXMAN.COM 384 (BOMBAY) WHEREIN THE HONB LE BOMBAY HIGH COURT HAS UPHELD THE FINDINGS OF THE TRIBUNAL THAT WHERE THE ASSESSEE FILED LETTERS OF CONFIRMATION OF SUPPLIERS, COPIES OF BAN K STATEMENT SHOWING ENTRIES OF PAYMENT THROUGH ACCOUNT PAYEE CHEQUES TO SUPPLIE RS AND STOCK RECONCILIATION STATEMENTS, SALE OF PURCHASED GOODS WAS NOT DOUBTED, THE TRANSACTIONS WERE SUPPORTED WITH EVIDENCES AND CONF IRMATIONS, IN SUCH AN EVENT MERELY BECAUSE THE SUPPLIERS HAVE NOT APPEARE D BEFORE THE AO OR THE LD. CIT(A), ONE CAN NOT CONCLUDE THAT THE PURCHASES WER E NOT GENUINE. 15. IN THE LIGHT OF ABOVE STATED LEGAL POSITION, WE DO NOT FIND INFIRMITY IN THE ORDER OF LD. CIT(A) WHILE DELETING THE ADDITIONS MA DE BY THE AO ON ACCOUNT OF BOGUS PURCHASES UNDER SECTION 69C OF THE ACT. 16. GROUND NOS.(XII) & (XIII) ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED WHEREAS THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.04.2017. SD/- SD/- (SHAMIM YAHYA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: .03.04.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI ITA NO.6116/M/2014 & ITA NO.6208/M/2014 M/S. CITY LIFE DEVELOPERS 10 THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.