BHAKTI DEVELOPERS,AMBERNATH vs. DCIT CIR 2, KALYAN

ORDER

PER N.K. PRADHAN, AM

M/s Bhakti Developers

filed by the assessee read as under:

1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs.1,38,01,084/- by treating the purchases as bogus / non genuine purchases without appreciating the fact that a. The said purchases are genuine and are supported by the bill / invoice b. The payments were made to the creditors against said purchases by issuing account payee cheques through normal banking channels c. The appellant has discharged its obligation by providing the detail address of the said creditors The appellant hereby prays that addition may please be deleted.

2. Without prejudice to first ground of appeal, the appellant is preferring the following ground of appeal On the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) erred in not allowing the claim of deduction u/s 80IB(10) of the I.T. Act on addition of Rs.1,38,01,084/- made by treating the purchases as bogus / non genuine purchases without appreciating the fact that such addition of purchases will increase the profits of the housing project eligible for the claim of deduction u/s 80IB(10). The appellant hereby prays that the deduction may please be granted.

3. In a nutshell, the facts of the case are that during the course of assessment proceedings, the Assessing Officer (AO) noticed that the assessee has made purchases amounting to Rs.1,38,01,084/- from hawala dealers who are involved in issuing bogus bills. In support of its claim of aforesaid purchases, the assessee furnished before the AO sample bill, name and address of the said hawala dealers. In order to M/s Bhakti Developers AO issued notice u/s 133(6) to the said parties. However, notices issued in case of 8 parties were returned back by the postal authorities with the remarks ‘not known/unclaimed/refused’. Then the AO deputed Inspector of Income Tax to serve the notices on the said parties. The Inspector reported that no business was being conducted by the aforesaid parties from the given address. Further, in reply to notice u/s 133(6), the proprietor of M/s Ami Traders, Shri Rajendra Ravji Joil, vide letter dated 03.01.2014 stated that he is a taxi driver and has not supplied any material to the assessee. Moreover, the aforesaid parties are identified by the Sales Tax Department, Government of Maharashtra as hawala parties. In the statements/affidavits filed by the aforesaid parties before the Sales Tax Department, they have deposed that they have not done any sale of goods to any of the parties. In response to a query raised by the AO to explain why addition on account of disallowance of claim of bogus purchases should not be made, the assessee filed a reply which has been extracted by the AO at page 10-13 of his assessment order dated 21.03.2014. However, the AO was not convinced with the said reply for the reason that though the assessee was given ample opportunities to furnish supporting documentary evidence like confirmation of the concerned parties, copy of transport receipts, copy of stock register, it failed to produce them before the AO. Also one of the above parties i.e. M/s Ami Traders have categorically denied any sale/purchase transaction with the assessee. Further, as per the information received from the Sales Tax Department, Government of Maharashtra, the present assessee is one of such beneficiaries of hawala operators. The