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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
The DCIT, Vs. M/s. RPS Infra Central Circle 5(1), Projects Pvt Ltd., Room No. 1928, C, 113 Shyam Kamal, 19th Floor, AirIndiaBldg, 27, Tejpal Road, Nariman Point, Vile Parle (E), Mumbai-400021. Mumbai-400057. PAN/GIR No. : AADCR3607E Appellant .. Respondent Appellant by : Shri.Dr. Kishor Dhule CIT-DR & Smt. Neeraja Sharma.DR Respondent by : Shri. JP Bairagra, Shri Ashiskumar Bairagra & Shri Akhilesh Pevekar. AR Date of Hearing 06.02.2023 Date of Pronouncement 03.05.2023 आदेश / O R D E R PER BENCH: The revenue has filed the appeal against the order of Commissioner of Income Tax (Appeals)-53, Mumbai passed u/s 250 of the Act. The revenue has raised the following grounds of appeal:
I Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs.2,34,36,381/- on account of bogus purchase
M/s RPS Infra Projects Pvt Ltd, Mumbai. - 2 - ignoring the fact. that the assessee failed to prove the genuineness of purchases, andpayments by account payee cheques is not enough evidence to prove the genuineness of the transaction ?"
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs.39,339/- as alleged job work and labour expenses ignoring the facts that the assessee failed to prove the genuineness of these expenses and to produce evidences to substantiate the genuineness ?"
3.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 2,02,21,000/-u/s 68 of the Act in respect of unsecured loans ignoring the facts that the assessee has not proved the genuineness of the transaction, the identity of most of the creditors, and credit-worthiness of the parties to the satisfaction of the AO, so as to discharge the primary onus?"
4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of interest expenses of Rs.12,99,000/- on the unsecured loans when the said unsecuredloans were found to be non geninune as the assessee has not proved the geninuness of the transction the identity of the creditors and credit worthiness of the parties.
"The appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal
if 2. The brief facts of the case are that the assessee company is engaged in the business of civil contract works, construction of roads and buildings and undertakes BMC and Government contract works. The assessee has filed the return of income for the M/s RPS Infra Projects Pvt Ltd, Mumbai. - 3 - A.Y 2019-20 on 30.10.2019 disclosing a total income of Rs.10,37,76,680/-.There was search and seizure action U/sec132 of the Act carried out in the group of M/s RPS Infra Projects and related entities on 06.11.2019. Therefore the assessments relating to A.Y. 2014-15 to 2017-18 and subsequent years were covered and completed u/s 143(3) r.w.s 153A of the Act. The Assessing officer (A.O) found that the assessee is a beneficiary of accommodation entries in the nature of purchases, subcontract expenses, labour & Jobwork charges and unsecured loans in the F.Y.2018-19 and the A.O. has issued notice U/sec153A of the Act. In compliance, the assessee has filed the return of income disclosing a total income of Rs. 10,37,76,680/-.
The A.O. has issued notice U/sec 142(1) of the Act calling for the details on the disputed issues. The assessee has filed the voluminous details substantiating the claims made in the Audited financial statements and the return of income filed. Whereas the A.O. in order to verify the genuineness of the transactions has issued notice U/sec133(6) of the Act on the parties concerned with the purchases,
M/s RPS Infra Projects Pvt Ltd, Mumbai. - 4 - subcontract expenses, labour and job works and unsecured loans. Since these entities have not provided the complete details with supporting evidences i.e delivery challans, lorry receipts, way bills in respect of movement of goods and the A.O has relied on the statement recorded. The A.O. has issued show cause notice referred at Para 6.6 of the order. In response to the notice, the assessee has submitted the details vide letter dated 24.09.2021 referred at page 20 of the order. The assessing officer dealt on the facts and submissions on expenditure on account of bogus purchases at Page 20 to 23 of the order and made disallowance of purchases from ten parties aggregating to Rs.2,34,36,381/-. On the second disputed issue of expenditure on bogus job works & labour charges, the A.O. has dealt on the facts pertaining to the parties at page 23 to 35 of the order and made disallowance of payment of M/s Oasis Infra of Rs.39,339/- And the on the Last disputed issue of unsecured loans the A.O. has considered the submissions and dealt at page 36 to 53 of the order and made addition of unsecured loans from(i) Pragathi Civil Solutions Pvt Ltd of Rs 2,00,00,000/-
M/s RPS Infra Projects Pvt Ltd, Mumbai. - 5 - and (ii)Raja Antibiotics of Rs.2,21,000/ and interest paid on unsecured loans of Rs.12,99,000/- and all aggregating to Rs.2,15,20,000/-as unexplained cash credit u/sec68 of the Act. Finally the A.O. has assessed the total income of Rs.14,87,72,400/- and passed the order u/s 153A r.w.s 143(3) of the Act dated 30.09.2021.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas, the CIT(A) has considered the grounds of appeal, submissions of the assessee, findings of the scrutiny assessment, remand report, provisions of law, judicial decisions and up held the validity of issue of issue of notice U/sec153A of the Act and the assessement for the A.Y.2019-20 was an abated as per provisions of section 153A of the Act and granted relief in other grounds of appeal observing at Page 120 Para 64 to 66.1 of the order read as under:
64. Ground Nos. 1 & 2 are regarding disallowance of Rs2,34,36,381/- on account of Bogus purchases. 64.1 During A.Y. 2019-20, the AO has disallowed purchases of Rs. 2,34,36,381/- made by the assessee from 9 parties. The facts of the case, findings of the AO in the assessment order and the submission made by the M/s RPS Infra Projects Pvt Ltd, Mumbai. - 6 -
appellant are similar to that for A.Y. 2014-15. The issue has been discussed in Para no.6 of this appellate order for A.Y. 2014-15 and the ground has been adjudicated in favour of the assessee There is no material change in the facts of the case for A.Y. 2014-15 and 2019-20, thus, following the decision taken on this issue in A.Y. 2014- 15, Ground Nos. 1 & 2 of the appeal for A.Y. 2019-20 are also allowed. Accordingly, ground nos. 1 & 2 of the appeal are allowed.
Ground No3 is regarding disallowance of Rs39,339/as alleged Job Work and Labour Expenses.
65.1 During A.Y2019-20, the AO has disallowed job work and labour expenses of Rs39,339/paid to Oasis Infra The facts of the case, findings of the AO in the assessment order and the submission made by the appellant are similar to that for A.Y. 2014-15The issue has been discussed in Para no. 7 of this appellate order for A.Y2014-15 and the ground has been adjudicated in favour of the assessee Thus following the decision taken on this issue in A.Y 2014-15Ground No. 3 of the appeal for A.Y2019-20 is allowed Accordingly, ground no. 3 of the appeal is allowed.
Ground No. 4 is regarding addition of Rs. 2,15,20,000/- u/s. 68 in respect of unsecured loan and interest paid on unsecured loan.
66.1 During A.Y2019-20, the AO has made an addition u/s68 of Rs. 2,02,21,000/- in respect of unsecured loans taken from Pragati Civil Solutions P. Itd. and Raja Antibiotics Ltd The facts of the case, findings of the AO in M/s RPS Infra Projects Pvt Ltd, Mumbai. - 7 - the assessment order and the submission made by the appellant are similar to that for A.Y. 2014-15. The issue has been discussed in Para no. 8.3 to 8.3.5 of this appellate order for A.Y2014-15 and the ground has been adjudicated in favour of the assessee. Thus following the decision taken on this issue in A.Y2014-15, addition of Rs.2,02,21,000/made by AO in respect of unsecured loans is deleted. During the year, the AO has also made addition of interest of Rs12,99,000/- paid on unsecured loans The issue related to interest paid on unsecured loan is consequential to the addition of unsecured loans. As discussed in Para 7.3. to 7.3.5 of this order, the addition of unsecured loans in respect of Pragati Civil Solutions P. Itd., Raja Antibiotics and R.PShah (HUF) has been deleted Therefore, addition of interest paid on unsecured loans taken from these 3 parties is also deleted. Accordingly, ground no. 4 of the appeal is allowed.
The CIT(A) has considered the submissions, details and relied on the similar findings and decision of the appellate authority in the assessment year 2014-15 and deleted the additions made in respect of bogus purchases, job works & labour expenses and unsecured loans and interest disallowance and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the revenue has filed the appeal before the Honble Tribunal.
M/s RPS Infra Projects Pvt Ltd, Mumbai. - 8 -
5. At the time of hearing, the Ld.DR submitted that the CIT(A) has erred in deleting bogus purchases expenses, bogus job work and labour expenses were the assessee has not substantiated the claim with the complete details and the CIT(A) has erred in deleting the addition of unsecured loans and interest disallowance though the assessee has not proved the identity, genuineness and creditworthiness of the lenders and the Ld.DR supported the order of the A.O and prayed for allowing the revenue appeal. Per Contra, the Ld. AR supported the order of the CIT(A) and substantiated the submissions with the factual paper book, notes and judicial decisions.
We heard the rival submissions and perused the material on record. The grievance of the revenue that, the CIT(A) has erred in deleting the additions of the bogus purchases expenses, bogus job work & labour and unsecured loan and interest disallowance. The Ld.AR submitted that the assessee has cooperated in submitting the information in the assessment proceedings, whereas the A.O has ignored the information, evidences and Audited financial
M/s RPS Infra Projects Pvt Ltd, Mumbai. - 9 - statements. The Ld. AR emphasized that the assessee has discharged its burden by submitting the details/information in the original assessment proceedings and in the remand proceedings. Whereas in respect of bogus purchases and job work & labour expenses, the assessee has submitted the details of PAN, financial statements, income tax returns, copies of bills, ledger confirmation, bank statements of suppliers, MVAT registration certificate etc, But the AO has made addition as the parties were not produced and the payments were not proved. . In the appellate proceedings before the CIT(A), the assessee has filed additional evidence and the Ld.AR demonstrated the evidences filed by letter dated 10-3- 2022 on the disputed issues placed at page 437 to 443 of the paper book and CIT(A) has admitted the evidence and issued directions to the A.O. and called for the report. In the remand proceedings before the A.O, the parties have appeared and furnished the details and the A.O. has recorded the submissions and remand report was submitted placed at page 501 to 514 of the paper book. The third disputed issue with respect to unsecured loan, the assessee has M/s RPS Infra Projects Pvt Ltd, Mumbai. - 10 - obtained loans from two parties during the year and the transactions were reflected in the financial statements. The assessee has submitted the documentary evidence with PAN number of lender, address, contact number, confirmation, Income tax returns, bank statement, audited balance sheet, MCA data and GST details and repayment details of principal and interest in subsequent years.
The CIT(A) has called for the remand report from the AO on the additional evidence and in the remand proceedings the parties have appeared before the AO and the statement was recorded and the remand report was submitted and also rejoinder to remand report was filed on 4.07.2022 placed at page 515 to 544 of paper book.. Further the assessee also submitted the audited financial statements, confirmations, Bank statements, copy of the income tax return, Form no 16A to substantiate the genuineness and credit worthiness of loan creditors. The CIT(A) has considered the facts, circumstances and remand report and observed that the assessee prima-facie has complied the ingredients required u/s 68 of the Act of identity, genuineness and M/s RPS Infra Projects Pvt Ltd, Mumbai. - 11 - creditworthiness. Further, the CIT(A) relied on the judicial decisions and test checked the genuineness and creditworthiness of the lenders and the CIT(A) came to a reasonable conclusion that the assessee has discharged its burden on submitting the information. We considered the facts, circumstances and submissions as discussed above are of the view that the CIT(A) has passed a reasoned and conclusive order. Accordingly we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue.
In the result, the appeal filed by the revenue is dismissed.