SHREE GINGER ENTERPRISES LTD., MUMBAI V. DCIT - CC- 5(3), MUMBAI

ITA 6377/MUM/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0235 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 27-07-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 04-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Depreciation; Reason to believe; Reassessment proceedings; Bogus
• Section: 147; 131; 148; 132; 139; 142(1); 133A; 234B; 250; 143(2); 191; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.1330/Mum./2018 (Assessment Year : 2009–10) ITA No.1331/Mum./2018 (Assessment Year : 2010–11) ITA No.1332/Mum./2018 (Assessment Year : 2011–12) ITA No.2641/Mum./2017 (Assessment Year : 2012–13) ITA No.1333/Mum./2018 (Assessment Year : 2013–14) ITA No.1334/Mum./2018 (Assessment Year : 2014–15) ITA No.6377/Mum./2018 (Assessment Year : 2015–16) Shree Ginger Enterprises Ltd. Ginger House, 1 st Floor Raghuvanshi Mill Compound Lower Parel, Mumbai 400 013 PAN – AABCG7928H ................ Appellant v/s Dy. Commissioner of Income Tax Central Circle–5(3), Mumbai ................Respondent Assessee by : None Revenue by : Shri Manoj Kumar Date of Hearing – 28/07/2022 Date of Order – 19/10/2022 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeals have been filed by the assessee challenging the common impugned order dated 15/12/2017, passed for the assessment years 2009–10, 2010–11, 2011–12, 2013–14 and 2014–15, order dated 27/04/2015, passed for the assessment year 2012–13 and order dated Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 2 20/08/2018, passed for the assessment year 2015–16, under section 250 of the Income Tax Act, 1961 (“the Act”) by learned Commissioner of Income Tax (Appeals)–53, Mumbai, [“learned CIT(A)”]. 2. When these appeals were called for hearing, neither anyone appeared on behalf of the assessee nor was any application seeking adjournment filed. Therefore, we proceed to dispose off these appeals ex–parte, qua the assessee after hearing the learned Departmental Representative (“learned DR”) and on the basis of material available on record. 3. Since all these appeals pertain to the same assessee and issues involved are, inter-alia, common, therefore these appeals were heard together as a matter of convenience and are being adjudicated by way of this consolidated order. The grievance of the assessee, in these appeals, can be categorised under following sub-heads: (a) invocation of reassessment proceedings under section 147 of the Act; (b) notice under section 143(2) was not served within the prescribed period; (c) addition on account of alleged purchases out of books; (d) disallowance of depreciation on account of bogus purchases of plant and machinery; (e) disallowance of payment of interest expenses; and (f) ad hoc disallowance of administrative expenses. 4. Our findings / conclusions on aforesaid issues shall apply mutatis mutandis to all the appeals. Further, as the basic facts in all the appeals are Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 3 same, we have elaborately mentioning only the facts for the first assessment year (i.e. 2009-10) before us for the sake of brevity. However, if any particular issue is arising in any assessment year for the first time, facts pertaining to same are discussed accordingly. (a) Invocation Of Reassessment Proceedings 5. The assessee company is engaged in the business of trading and manufacturing of knitted fabrics hosiery cloth and garments. For assessment year 2009–10, reassessment proceedings were initiated by the Assessing Officer („AO’) and notice under section 148 of the Act was issued on 27/02/2015. The AO provided reasons recorded for reopening the assessment to the assessee and same reads as under: “A survey under section 133A of Income tax act 1961 in the case of KSL/Tayal Group cases was carried out by the investigation wing, Mumbai on 10/09/2013. The information from the investigation wing has been received as under: 2. It was found that M/s. Ginger Enterprises Ltd has shown purchases from the following concerns/companies: 1. Advik Textiles and Realpro Pvt Ltd. 2. Bilpower Textiles and Conpro Pvt Ltd. 3. Omrade Lease Finvest Pvt Ltd. 4. Encare Textiles and Properties Pvt. Ltd. 5. Gamin Traders Pvt. Ltd. 6. Hotline Textiles and Infra Pvt. Ltd. 7. Instant Traders Pvt. Ltd. 8. Jade Traders Pvt. Ltd. 9. Loren Leasing and Infotech Pvt. Ltd. 10.Oak Leasing and Infotech Pvt. Ltd. 11.Rosette Leasing and Infotech Pvt. Ltd. 12.Upright Leasing and Infotech Pvt Ltd. 3. The assessee was asked to furnish the details of the transactions made with the above companies as well as the purchase invoices, delivery challans, goods receipt note and other documents in support of purchase of fabrics from the above companies. But, the assessee has not furnished any Information / documents in support of the purchases made from these concerns. It was found Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 4 that the assessee has shown the purchases fabrics of Rs.117 Crores from the above companies in the financial year 2008-09, The details of the same areas under: Sr. no. Name of the supplier F.Y. Amount in Cr. 1. Advik Textiles and Realpro Pvt. Ltd. 2008–09 12.00 2. Bilpower Textiles and Conpro Pvt. Ltd. 2008–09 10.00 3. Comrade Lease Finvest Pvt. Ltd. 2008–09 9.00 4. Encare Textiles and Properties Pvt. Ltd. 2008–09 9.00 5. Gamin Traders Pvt. Ltd. 2008–09 9.00 6. Hotline Textiles and Infra Pvt. Ltd. 2008–09 12.00 7. Instant Traders Pvt. Ltd. 2008–09 10.00 8. Jade Traders Pvt. Ltd. 2008–09 12.00 9. Loren Leasing and Infotech Pvt. Ltd. 2008–09 8.00 10. Oak Leasing and Infotech P. Ltd. 2008–09 8.00 11. Rosette Leasing and Infotech P. Ltd. 2008–09 8.00 12. Upright Leasing and Infotech P. Ltd. 2008–09 10.00 Total: 117.00 4. Further, It was also found that M/s. Ginger Enterprises Ltd has also claimed purchase of plant and machinery of Rs.100 Crores from M/s. Advik Textiles and Realpro Ltd during the financial year 2008-09. During the course of survey proceedings, the assessee was asked to furnish copies of purchase invoices, date of installation of machinery, place of installation and details of professionals involved in installation of machinery etc. But, Shri Sanjay Kumar Tayal has stated that the required information is not available with him and the same will be furnished in due course. He further stated that the said expenses claimed have not been made in purchase of plant and machinery and the substantial amount has gone in up-gradation of the plant, construction of factory building. But, he has not furnished any documentary evidence in support of his claim. The assessee has neither has furnished any information during the course of survey proceedings u/s. 133A conducted on 10.09.2013 to 11.09.2013 In respect of the expenses of Rs.100 Crores on account of plant. and machinery from M/s. Advik Textiles and Realpro Ltd, nor has furnished the said information in post survey proceedings. 5. On verification, it was found that the address of M/s. Advik Textiles and Realpro Pvt Ltd is shown at Unit No.6, Ground Floor, Kamath Industrial Estate, Opp. Siddhi Vinayak Temple, Prabhadevi, Mumbai. The said location is closed to business premises of M/s. Krishna Knitewear Tech. Ltd, Gala No. 396, Kamath Industrial Estate, Opp. Siddhi Vinayak Temple, Prabhadevi, Mumbai. During the course of survey proceedings conducted at M/s. Krishna Knitewear Tech. Ltd at Gala No. 396 of this building, the statement of Shri Ramyash B. Shukla, sales Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 5 and Account Manager of M/s. Shree Krishna Silk Industries Pvt Ltd (another group company of Tayal/KSL Industries Ltd) was recorded. In his statement, Shri Ramyash B. Shukla stated that galas No. 4, 7-A,B,C, 13, 18, 24, 25, 26, 27, 38, are belongs to Krishna Group of companies (Tayal Group) only. It was found that there was no business activities are carried out at Gala No. 6 also and on local enquiries, it was found that this gala also used by Tayal Group of companies. The Inspectors of this Unit has also reported that no such business activities of M/s. Advik Textiles and Realpro Pvt is carried out from this gala of this building, Thus, it was found that there is no actual business activities are carried out by M/s. Advik Textiles and Realpro Pvt from Gala No. 6 of this building. Moreover, on going through the MCA site, it was found that Shri Kulvinder Kumar Nayyar, Plot No. 15/101A, Shirin Apartment, Sector 29, Vashi, Navi Mumbal is one of the Director of M/s. M/s. Advik Textiles and Realpro Pvt. It was also found that Shri Kulvinder Kumar Nayyar has also director of the above mentioned 12 companies (including M/s. Advik Textiles and Realpro Pvt) from which M/s. Ginger Enterprises Ltd has shown purchase of fabric at Rs.117.00 Crores during the financial year 2008-09 relevant to the assessment year 2009-10. It was also found that the address of these companies is shown at Gala No. 6 or 1st floor of Raghuvanshi Mills, Lower Parel, Mumbai. Both these premises are belongs to Tayal Group of companies. Moreover, no business activities are carried out from Gala No. 6 Kamath Industrial Estate, Opp. Siddhi Vinayak Temple, Prabhadevi, Mumbai. The addresses shown in the MCA site of these companies are as under: Sr. no. Name of the supplier F.Y. 1. Advik Textiles and Realpro Pvt. Ltd. Gala no.6, Kamath Industrial Estate, Opp. Siddhi Vinayak Temple, Prabhadevi, Mumbai 2. Bilpower Textiles and Conpro Pvt. Ltd. 1 st Floor, Raghuvanshi Compound, Lower, Parel Mumbai 3. Comrade Lease Finvest Pvt. Ltd. Gala no.6, Kamath Industrial Estate, Opp. Siddhi Vinayak Temple, Prabhadevi, Mumbai 4. Encare Textiles and Properties Pvt. Ltd. –do– 5. Gamin Traders Pvt. Ltd. –do– 6. Hotline Textiles and Infra Pvt. Ltd. –do– 7. Instant Traders Pvt. Ltd. –do– 8. Jade Traders Pvt. Ltd. –do– 9. Loren Leasing and Infotech Pvt. Ltd. –do– 10. Oak Leasing and Infotech P. Ltd. –do– 11. Rosette Leasing and Infotech P. Ltd. –do– 12. Upright Leasing and Infotech P. Ltd. –do– Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 6 6. On going through the mater data available on MCA site, it was also found that in the column of email Id, all the above mentioned company has shown id as [e-mail] except [e-mail] shown in the case of M/s. Comrade Lease Finvest Pvt Ltd. 7. In the circumstances, the enquiry was made in respect of Shri Kulvinder Kumar Nayyar, Plot No. 15/101A, Shirin Apartment, Sector 29, Vashi, Navi Mumbai. It was found that Shri Kulvinder Kumar Nayyar is employee of Tayal Group of company. In the statement recorded under sec. 131 on 08.05.2014, Shri Kulvinder Kumar Nayyar, has stated that he is employed with M/s Ginger Enterprises Ltd., Tayal Group companies as a general manager (Knitting). Earlier he was employed with M/s Krishna Lifestyle Technologies Ltd., which is also a group concern of Sanjay Kumar Tayal. He further stated that the above mentioned 12 companies are floated by Shri Sanjay Kumar Tayal. All these companies are managed and controlled by Shri Sanjay Kumar Tayal. Even, in this statement he has stated that he is director of these companies including M/s. Advik Textiels and Realpro Pvt Ltd on paper only and he is not aware of any business activities of these companies. 8. Thus, it is established that the above mentioned 12 companies are floated/created by Shri Sanjay Kumar Tayal only. The books of accounts of these companies were not available and produced by Shri Kulwinder Kumar Nayyar. In the circumstances, it is found that there is no business activities are carried out by these companies. Thus, the claim of purchase of fabric amounting to Rs.117 crores and purchase of plant of machinery at Rs.100 Crores are not genuine transactions and these are only paper transactions and hence, both the claim of M/s. Ginger Enterprises Ltd is not genuine claim including claim of depreciation and interest paid to bank on the funds utilized on the purchases of fabrics and fixed assets. On the bases of above I have the reason of believe the income of Rs. 132 Cr. has escaped the assessment for AY 2009 10 within the meaning of section 147 of the IT act. The notice u/s 148 r.w.s 147 is, therefore being issued to the assessee to reassess such income and also any other income chargeable to tax which has escaped the assessment, which comes to my office subsequently in the course of proceedings for reassessment for AY 2009-10.” 6. Thereafter, notice issued under section 143(2) and 142(1) of the Act were issued and served to the assessee. In response to same, authorised representative of the assessee attended the reassessment proceedings and furnished the requisite details called for. During the course of hearing, learned DR submitted that neither before the AO nor before the learned CIT(A), the assessee challenging invocation of reassessment proceedings and this issue has been raised for the first time in appeals before us. We find that though, Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 7 this fresh issue should have been raised by way of an application seeking admission of additional ground, however, the assessee has raised the same in its appeals. It is settled that being a legal issue, same can be raised at any stage of proceedings, if the basic facts are available on record. Therefore, we proceed to deal with same. From the reasons recorded, it is evident that pursuant to survey under section 133A of the Act in case of Tayal Group cases it was found that assessee has shown unaccounted purchases and claimed depreciation on plant and machinery, which were found to be bogus. Accordingly, on the basis of information received from the investigation wing, reassessment proceedings in the case of assessee were initiated. In ACIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd, [2007] 291 ITR 500 (SC), the Hon‟ble Supreme Court observed as under: “16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfilment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC).” Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 8 7. Thus, if there is relevant material on the basis of which reasonable person can form a requisite belief that income chargeable to tax has escaped assessment, then proceedings under section 147 of the Act can be validly initiated. Further, it is also well settled that sufficiency or correctness of the material is not a thing to be considered at the stage of recording of reasons. From the reasons recorded for reopening the assessment in the case of assessee it is also evident that the assessee has not disclosed truly and fully all material facts. As a result, we find no infirmity in the reassessment proceedings initiated by the AO under section 147 of the Act. Thus, the grounds raised by the assessee pertaining to this issue are dismissed. (b) Notice under section 143(2) was not served within the prescribed period 8. During the course of hearing, learned DR submitted that neither before the AO nor before the learned CIT(A), the assessee raised this issue and it has been raised for the first time in appeals before us. We find that though, this fresh issue should have been raised by way of an application seeking admission of additional ground, however, the assessee has raised the same in its appeals. It is settled that being a legal issue, same can be raised at any stage of proceedings, if the basic facts are available on record. Therefore, we proceed to deal with same. As per section 143(2) of the Act, notice under this section is required to be served on the assessee before the expiry of 6 months from the end of the financial year in which the return under section 139 or in response to notice under section 142(1) of the Act is furnished. Thus, the time period provided in the aforesaid section for issuance of notice is in respect of Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 9 return filed under section 139 or in response to notice under section 142 (1) of the Act. However, in the present case, reassessment proceedings were initiated by the AO under section 147 and notice under section 143(2) of the Act was issued only pursuant there to. Thus, in view of the above, in absence of any other material available on record we are of the considered view that notice under section 143(2) of the Act was served to the assessee within the prescribed time pursuant to initiation of reassessment proceedings in the present case. Thus, the ground raised by the assessee pertaining to this issue is dismissed. (c) Addition on account of alleged purchases out of books 9. During the course of reassessment proceedings, it was noticed that ledger extract of sundry creditors in the books of the assessee for the period 01/04/2006 to 31/12/2011 showed a journal entry which was „by plant and machinery Silvassa Rs. 117 crore (credit)‟. It was also found that there were claims of purchases of Rs. 117 crore from 12 parties. Shri Sanjay Kumar Tayal, director of assessee company was asked to provide the invoices, delivery challans, goods receipt note and other supporting documents in respect of the above parties. However the same were not provided by the assessee. Shri Sanjay Kumar Tayal submitted that 12 parties from whom purchases of Rs. 117 crore was claimed have been allotted shares. Shri Sanjay Kumar Tayal in his statement recorded on 11/09/2013 stated that books of accounts, purchase bills and transfer documents were kept at Krishna House, 1 st Floor, Raghuvanshi Mill Compound, Senapati Bapat Marg, Lower Parel, Mumbai. Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 10 Subsequently, on the post survey investigation, books of accounts and supporting documents were called. Shri Sanjay Kumar Tayal submitted that all the records, books of accounts and other related documents were destroyed in fire on 29/09/2013 at main factory in Silvassa. It was also found that Shri Kulvinder Kumar Nayyar was the director of the 12 companies from which the assessee had shown purchases of fabrics at Rs. 117 crore in assessment year 2009 – 10. The addresses of these companies were shown as gala No. 6, 1 st floor, Raghuvanshi Mills compound, lower Parel, Mumbai. These premises belong to Tayal Group of companies. On further investigation, it was found that Shri Kulvinder Kumar Nayyar was an employee of Tayal group of company. His statement was recorded on 08/05/2014, wherein he confirmed that he was employed with the assessee company. He also admitted that 12 companies are floated by Shri Sanjay Kumar Tayal and are managed and controlled by him. He also admitted that he was a dummy director and the companies were managed by Shri Sanjay Kumar Tayal. The AO vide order 30/03/2016 passed under section 147 r/w section 143 (3) of the Act treated the purchase of Rs. 117 crore to be out of books and the corresponding sales are also treated to be made out of books. Since, the assessee has shown gross profit @7.04%, therefore, addition of Rs. 8,23,68,000 was made to the total income of the assessee. 10. The learned CIT(A) vide, the impugned order dated 15/12/2017, dismissed the appeal filed by the assessee on this issue and further enhance the addition to the Rs. 9.36 crore by adopting GP rate of assessee at 8%. Being aggrieved, the assessee is in appeal before us. Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 11 11. Having considered the submissions of learned DR and perused the material available on record, we find that details/books of accounts were not produced by the assessee despite various opportunities. Further, the assessee though claimed that all his record/books of accounts were destroyed in the fire, however, neither produced the parties from whom it has made the purchases nor filed any documentary evidence to justify its claim that purchases as shown in profit and loss account are the only purchases made by the assessee. Further, there is nothing available on record to dispute the adoption of enhanced GP rate @8% for assessment year 2009–10. Thus, in view of the above, in absence of any material to support the claim of the assessee, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, addition made by the AO on this issue is upheld. Thus, the ground raised by the assessee pertaining to this issue is dismissed. (d) Disallowance of depreciation on account of bogus purchases of plant and machinery 12. During the course of reassessment proceedings, it was found that assessee has claimed purchases of plant and machinery of Rs. 100 crores from M/s Advik Textiles and Realpro Ltd. The assessee in its reply submitted that the purchases made by them are genuine as per the bills issued by the parties. Further the assessee pointed out that total addition to the plant and machinery during the year under consideration is Rs. 47.94 crores and the remaining plant and machinery of Rs. 52.05 crores purchased during the year is taken as Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 12 WIP. Accordingly, assessee submitted that during the year under consideration depreciation on plant and machinery is claimed only on amount of Rs. 47.94 crores further, the assessee submitted valuation report prepared by Government Approved Valuer addressed to Vijaya Bank, Nariman Point Branch, Mumbai. The AO vide order passed under section 147 r/w section 143 (3) of the Act in absence of requisite details to establish the genuineness of the purchases of plant and machinery disallowed the depreciation claimed by the assessee. 13. Learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under: “6.4 I have considered the submissions carefully. The factual back ground has been narrated earlier. Shri Sanjay Tayal, after initially promising to produce books of accounts and supporting bills and vouchers, immediately after the survey action claimed that its books of accounts had perished in a fire that occurred shortly after the survey on 29.9.2013 The lack of genuineness of transactions of 12 entities including M/s.Advik Textiles and M/s.RealproPvt. Ltd. has been noted earlier and has been highlighted in the assessment order. It is noted that the appellant group companies were using bogus bills from various entities operated by Mahaveer Duggar and Dilip Mehta CA to siphon out money. Wherever and whatever bills of Tayal Group were found either in survey u/s 133A on 10.9.2013, search action u/s 132 on 23.12.2008 or from banks such as UCO bank to whom appellant had submitted the bills (refer records of M/s Actif Corporation Ltd.), the bills have been found to be bogus. It is no wonder that the appellant is seeking refuge under the claim of fire to not produce the basic evidence. The valuers, YardiPrabhu Consultants &Valuers P. Ltd. and Business and Industrial Consultants. whose report is relied upon strongly by the appellant have been examined on oath in the appellate proceedings. They have clearly indicated that their reports do not vouch for the machineries as being found as installed in the relevant year nor do they vouch that they are the same machines. In the absence of bills and details of machinery, no valuer can verify that the additions claimed in a particular year is genuine and is of the value claimed. An estimate of value in no way indicates the actual machine in description or year of manufacture and installation, their existence and the actual cost for claiming depreciation. The genuineness of transaction is not established by the same. Instances of falsification of invoices was already noted. The end use has been not established in respect of the loans raised by the appellant. Forensic audit done by the auditors appointed by the lenders has already indicted the appellant. FIR has been filed by the lenders with CBI in this Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 13 regard. There is clearly a malafide and patently unbelievable claim that books, records and all supporting documents including computer records for AY 2007- 08 to AY 2013-14 for all 8 companies were kept at a single location and were lost in fire. If that were indeed the case, the appellant would have reconstructed its books from its hank statements identifying the parties to whom payments were made, obtaining duplicate bills from them. That this was not done clearly shows that the appellant was unwilling to provide details that would clearly and explicitly prove its fraud. The appellant has claimed how sales were shown when it did not have machinery. However, I am not impressed with this rhetoric. The moot point is whether the assets were installed and that too at the value claimed. The existing old plant, the use of second hand old machines, bogus sales and purchase bills are equally compatible with the sales and accounts claimed by the appellant. The bills that were found in the course of survey have been shown to be bogus. In this context, the disallowance of claim of depreciation is upheld and ground of appeal no 2 is dismissed.” 14. Having considered the submissions of learned DR and perused the material available on record, we find that regarding the process of verification, the valuers had submitted that machines were looking very old. Further the metallic plate on the machines which contains all the technical details of the particular machines i.e. machines serial No., model No., year of manufacturing, electrical ratings, operating diagram, make and various details of the machinery was missing. The valuers further submitted that there was no basis to ascertain the model and the year of manufacture and the year of installation of the machines. Further, the valuers submitted that ownership of the machines cannot be verified in absence of invoices and fixed assets register. In absence of details as sought by the lower authorities, the bills produced by the assessee were found to be bogus. Thus, in view of the above findings, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, addition made by the AO on this issue is upheld. Thus, the ground raised by the assessee pertaining to this issue is dismissed. Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 14 (e) Disallowance of payment of interest expenses 15. Since, borrowed funds have been siphoned off the interest claimed by the assessee was disallowed by the AO. The learned CIT(A) also dismissed the appeal filed by the assessee on this issue, by observing as under: “7.4. I have considered the submissions. As a corollary to the decision in respect of ground of appeal no 2, since borrowed funds have been siphoned off, the interest claimed on the same cannot be considered as used for business. The disallowance is warranted. The computation made by the assessing officer is fair and reasonable. The disallowance is upheld and ground of appeal no 3 is dismissed.” 16. As, findings of learned CIT(A) in respect of bogus purchases have been upheld, we find no infirmity in the aforesaid findings of learned CIT(A) on this issue. Thus, the ground raised by the assessee pertaining to this issue is dismissed. (f) Ad hoc disallowance of administrative expenses 17. In assessment years 2012–13 to 2014–15, AO also made the disallowance of 10% of administrative expenses in absence of bills, vouchers and ledgers in support of the claim. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue. 18. Having considered the submissions of learned DR and perused the material available on record, we find that the assessee did not produce any details/evidence in support of its claim of admission to expenses. In absence of the details, the AO disallowed 10% of administrative expenses by the assessee and added the same to total income. During the appellate proceedings before Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 15 the learned CIT(A), assessee submitted that administrative expenses constitute only minuscule portion of the total turnover. We find that apart from the aforesaid submission nothing has been brought on record to prove that the administrative expenses as claimed was incurred for purpose of business. Thus, in view of the above, we find no infirmity in the impugned order passed by the learned CIT(A) upholding the disallowance of 10% of administrative expenses claimed by the assessee. Thus, the ground raised by the assessee pertaining to this issue is dismissed. 19. Insofar as the ground pertaining to levy of interest under section 234A of the Act is concerned, we deem it appropriate to remand this aspect to the file of AO for de novo adjudication after necessary examination of the fact whether the return of income was filed by the assessee within the prescribed time under the Act. While, interest levied under section 234B and 234C of the Act are consequential in nature. Accordingly, same is allowed for statistical purpose. 20. In the result, all the appeals by the assessee are partly allowed for statistical purpose. Order pronounced in the open Court on 19/10/2022 Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 19/10/2022 Shree Ginger Enterprises Ltd. ÄY 200–10, 2010–11, 2011–12, 2012–13, 2013–14, 2014–15 & 2015–16 Page | 16 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai