VILAYATI RAM MITTAL PVT. LTD.,NEW DELHI vs. ITO, WARD- 26(3),, NEW DELHI

O R D E R PER PRASHANT MAHARISHI, A. M.

3. The assessee is a company engaged in the business of building and contract work, filed its return of income on 30.09.2010 for Rs. 18054000/-. Subsequently, based on information received from Maharashtra VAT Department the case was reopened u/s 147 of the Act by issue of notice u/s 148 on 05.03.2015. The case of the assessee was reopened on the ground that assessee has taken accommodation entry from non-genuine purchase from three concerns of Rs. 1270221/-. Before Page | 2 Vilayati Ram Mittal Pvt. Ltd Vs. ITO, (Assessment Year: 2010-11) the ld Assessing Officer the assessee contested, that assessee has purchased goods as well as the payments have been made for purchases through banking channel. The main contention of the assessee was that the bill are lying in the custody of MES College of Military Engineering, Pune as the building in which the records were sold was demolished and records are in their custody. The ld Assessing Officer rejected the contention of the assessee and made an addition of Rs. 1270221/- u/s 69C and assessed the total income at Rs. 19324221/-. Assessee preferred appeal before the ld CIT (A) challenging the addition on the merits only which was confirmed. Therefore, the assessee is in appeal.

4. Vide ground no A & B, The ld AR challenged the reopening also before us and stated that notice u/s 148 was not served on the assessee.

5. The ld DR vehemently contested the same stating that this plea was taken neither before the ld AO nor before the ld CIT (A) and therefore, is not sustainable now. He further referred to the assessment order wherein, the ld AO has categorically stated that the notice was served on the assessee. He further submitted that the reopening has been made based on information received from VAT authorities and therefore, reopening is valid. He relied upon the decision of Hon'ble Delhi High Court in case of Paramount Communication.

6. We have carefully considered the rival contentions and perused the orders of the AO where it has been categorically mentioned that notice has been served on the assessee. The above ground was taken neither by the assessee before the ld CIT (A) nor by submitting an affidavit before us. The address of the assessee also remains the same. Assessee has also not stated reason that why this issues was not raised before the lower authorities and no evidences were led before us by examination of the file or by any other method that notice is not served on the assessee when the ld AO has categorically mentioned the fact about service of the notice.. Therefore, in absence of any serious challenge to the aspect of service of notice the above ground is rejected. Further, with respect to the information based on which the case of the assessee is reopened is also received from Maharashtra VAT authorities stating that assessee has entered into accommodation entries transaction and the purchases are bogus. The issue of reopening is fully covered against the assessee by the decision of the Hon’ble Delhi High Court in Principle Commissioner of Income Tax Vs Paramount Communications Pvt Ltd 392 ITR 444 (Delhi). In view of this the arguments of the Ld. authorized representative on the issue of reopening vide ground no A & B are dismissed.

7. Coming on the issue of the merit vide ground no c to K , the Ld. authorized representative argued that assessee has made payment to the parties by banking channel and she submitted the copy of the bank certificate from bank of Baroda dated 3/3/2016 wherein the details of the cheque and the date on which the amount has been transferred to the above parties are mentioned. She also Page | 3 Vilayati Ram Mittal Pvt. Ltd Vs. ITO, (Assessment Year: 2010-11) submitted the copy of the acknowledgement of sales tax return filed by the assessee where the set- off on the above purchases was claimed and no objection is has been raised by the VAT authorities. In view of this, she submitted that assessee has discharged its complete onus of proving the purchases. She further stated that assessee could not produce the bills before the Ld. assessing officer for the reason that it was carrying on work at Pune and after the cancellation of the subject work, the site was taken over by the MES and all the records and documents which were kept their site office have been taken over as well. The assessee is frequently requesting them to release all the documents and records as they were required for the purpose of the income tax returns etc. However the same has not been returned. The assessee on 03/11/2016 has further requested the photocopy of the tax invoices for the above period. Therefore, she submitted that merely because the bills have not been produced the addition cannot be made. She further relied on the decision of the coordinate bench in case of ITO Vs. Rey steals 2016 SCC online ITAT 3141 dated 07/12/2015 wherein case of the bogus purchases the coordinate bench has deleted the addition. She requested an opportunity to submit bills.

8. The ld DR vehemently submitted that as the assessee has not submitted the bill as well as the parties have not replied to notice of the Assessing Officer u/s 133(6) of the Act the assessee does not have any case on the merits. He submitted that decision of the coordinate bench in case of Rey Steels cited by the ld AR does not apply to the facts of the case. In any way he stated that the decision of Rey Steel is not correct for the reason that it has not considered the binding decision of the Hon'ble Delhi High Court in case of La Medica as well as of the Hon'ble Supreme Court in case of Vijay Ship Breaking as well as NK Proteins Ltd where, Hon'ble Delhi High Court upheld the complete addition and the Hon'ble Supreme Court in other cases sustained 25% disallowance.