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Facts
The assessee, M/s Ashtech (India) Pvt. Ltd., is engaged in manufacturing and transportation. The Assessing Officer reopened assessments based on survey findings where directors admitted to booking bogus fuel/diesel and other expenses. Additions were made for alleged bogus purchases of fuel/diesel and tyres, as well as for unsubstantiated expenses.
Held
The Tribunal partly allowed the assessee's appeals. For the fuel/diesel purchases, the Tribunal deleted the disallowance, finding no justification for sustaining it solely on statements, especially after documentary evidence was verified. For bogus tyre purchases, the Tribunal upheld a 10% disallowance. For unsubstantiated expenses, the disallowance was partly confirmed, and the rest was deleted. The Revenue's appeals regarding share application money were dismissed.
Key Issues
The main issues were the genuineness of fuel/diesel and tyre purchases, the substantiation of expenses, and the legitimacy of share application money received. The Tribunal also considered the validity of evidence obtained during survey proceedings and the retraction of statements.
Sections Cited
40(a)(ia), 68, 133A, 147, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
These appeals by the assessee and the Revenue are directed These appeals by the assessee and the Revenue are directed These appeals by the assessee and the Revenue are directed against a common order dated 30.06.2023 passed by the Ld. against a common order dated 30.06.2023 passed by the Ld. against a common order dated 30.06.2023 passed by the Ld. Commissioner of Income Commissioner of Income-tax (Appeals) – 47, Mumbai [in short ‘the 47, Mumbai [in short ‘the Ld. CIT(A)’] for assessment years 2013 assessment years 2013-14 to 2018- -19 respectively. As common issue-in in-disputes are involved in these appeals involved in these appeals , therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this consolidated order for sake of convenience and avoid repetition of consolidated order for sake of convenience and avoid repetition of consolidated order for sake of convenience and avoid repetition of facts.
Both parties agreed to take Both parties agreed to take up assessment year 2013 assessment year 2013-14 as a lead case for arguments for arguments and follow the decision in the assessment year mutatis mutandis mutatis mutandis to other assessment years. Accordingly, we other assessment years. Accordingly, we take up the appeal of the assessee and Revenue for assessment take up the appeal of the assessee and Revenue for assessment take up the appeal of the assessee and Revenue for assessment year 2013-14 for adjudication. The grounds raised by the assessee 14 for adjudication. The grounds raised by the assessee 14 for adjudication. The grounds raised by the assessee in its appeal for assessment year 2013 in its appeal for assessment year 2013-14 are reproduced as under: 14 are reproduced as under:
“1. On the facts and On the facts and in the circumstances of the case and law on the in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of Rs.9,90,97,267/ Rs.9,90,97,267/- being alleged bogus purchase of fuel / diesel & the being alleged bogus purchase of fuel / diesel & the learned learned CIT (Appeal) learned CIT (Appeal) CIT (Appeal) erred in erred erred in confirming in confirming / upholding confirming / / upholding upholding the the the disallowance of Rs.99,09,726/ of Rs.99,09,726/- being 10 % of purchases of alleged being 10 % of purchases of alleged bogus fuel/ diesel of Rs. 9,90,97,267/ bogus fuel/ diesel of Rs. 9,90,97,267/- In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
2. On the facts and in the circumstances of the case and law o On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law o subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of M/s Ashtech (India) Pvt. Ltd. 3 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Rs.29,54,983/- - on account of alleged bogus tyre purchase bills & the on account of alleged bogus tyre purchase bills & the learned CIT (Appeal) erred in upholding upholding the the addition addition of of Rs.29,54,983/- - on account of alleged bogus tyre purchase purchase bills without correct appreciation of facts and law on the subject. correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
3. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learne subject, the learned assessing officer erred in making disallowance disallowance of Rs.53,19,316/ Rs.53,19,316/- on account of unsubstantiated expenses & the expenses & the learned learned CIT CIT (Appeal) (Appeal) erred in confirming confirming disallowance disallowance of of unsubstantiated unsubstantiated expenses expenses of of Rs.5,31,931/- without without correct correct appreciation of facts and law appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
4. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred subject, the learned assessing officer erred in making disallowance disallowance of Rs. 36,79,111/ 36,79,111/- u/s 40(a)(ia) of Income Tax Act & the learned CIT u/s 40(a)(ia) of Income Tax Act & the learned CIT (Appeal) erred in confirming disallowance of Rs.5,69,535/ (Appeal) erred in confirming disallowance of Rs.5,69,535/ (Appeal) erred in confirming disallowance of Rs.5,69,535/- u/s 40(a)(ia) without correct appreciation of facts and law on the subject. 40(a)(ia) without correct appreciation of facts and law on the subject. 40(a)(ia) without correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case and In view of the facts and circumstances of the case and law on the law on the subject, the same may be deleted. subject, the same may be deleted.” 2.1 The grounds raised by the Revenue in its appeal for The grounds raised by the Revenue in its appeal for The grounds raised by the Revenue in its appeal for assessment year 2013 assessment year 2013-14 are reproduced as under:
1. i. "Whether on the facts and in the circumstances of the case and i. "Whether on the facts and in the circumstances of the case and i. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) is justified in law, the Ld. CIT (A) is justified in deleting the disallowance of in deleting the disallowance of share application money without appreciating the facts that the share application money without appreciating the facts that the share application money without appreciating the facts that the identity, creditworthiness and genuineness was not established by identity, creditworthiness and genuineness was not established by identity, creditworthiness and genuineness was not established by the assessee with regard to the alleged parties?" the assessee with regard to the alleged parties?" 2. "Whether on the facts and in the circums "Whether on the facts and in the circumstances of the case and in tances of the case and in law, the Ld. CIT (A) is justified in deleting the disallowance of law, the Ld. CIT (A) is justified in deleting the disallowance of law, the Ld. CIT (A) is justified in deleting the disallowance of unsubstantiated expenses without appreciating the facts that the unsubstantiated expenses without appreciating the facts that the unsubstantiated expenses without appreciating the facts that the identity, creditworthiness and genuineness was not established by identity, creditworthiness and genuineness was not established by identity, creditworthiness and genuineness was not established by the assessee with regard to the a the assessee with regard to the alleged parties?" 3. Briefly stated facts of the case are that the assessee is a Briefly stated facts of the case are that the assessee is a Briefly stated facts of the case are that the assessee is a private limited company private limited company, engaged in the business of manufacturing engaged in the business of manufacturing of bricks & blocks, crystal marbles, cement bricks & blocks, crystal marbles, cement etc. and transportation etc. and transportation
M/s Ashtech (India) Pvt. Ltd. 4 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. of ash generated in thermal power stations of ash generated in thermal power stations. For the assessment For the assessment year 2013-14 , assessment u/s 143(3) of the Income assessment u/s 143(3) of the Income assessment u/s 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) was completed on 26.03.2015 against the (in short ‘the Act’) was completed on 26.03.2015 against the (in short ‘the Act’) was completed on 26.03.2015 against the returned income of of Rs.10,37,95,810/-. Subsequently, a survey . Subsequently, a survey action u/s 133A of the Act was carried out by the Investigation action u/s 133A of the Act was carried out by th action u/s 133A of the Act was carried out by th Wing of the Income-tax Department, Mumbai tax Department, Mumbai at the premises of the at the premises of the assessee on 13.08.2019 assessee on 13.08.2019 along with premises of premises of other group concerns. During the survey proceedings . During the survey proceedings, statement of various statement of various persons including directors of the persons including directors of the assessee company assessee company were recorded, wherein they admitted of herein they admitted of recording of entry of bogus bogus bills of fuel diesel expenses and other expenses etc diesel expenses and other expenses etc in books of accounts in books of accounts. In view of the information view of the information of entry of bogus expenses booked by the expenses booked by the assessee, received from the Investigation Win received from the Investigation Wing, the Assessing g, the Assessing Officer reopened the assessment by way of issue of notice u/s 148 Officer reopened the assessment by way of issue of notice u/s 1 Officer reopened the assessment by way of issue of notice u/s 1 of the Act dated 01.02.2021. In responses to the of the Act dated 01.02.2021. In responses to the same, same, the assessee filed return of income on 20.02.2021 and thereafter statutory filed return of income on 20.02.2021 and thereafter statutory filed return of income on 20.02.2021 and thereafter statutory notices were issued by the Assessing by the Assessing Officer, which were which were complied with by the assessee by the assessee. The Assessing Officer completed the . The Assessing Officer completed the assessment u/s 147 of the Act on 26.07.2021 wherein he made assessment u/s 147 of the Act on 26.07.2021 wherein he made assessment u/s 147 of the Act on 26.07.2021 wherein he made various additions to the returned income. The computation of the various additions to the returned income. The computation of the various additions to the returned income. The computation of the assessed income is reproduced as under: assessed income is reproduced as under:
“14. Subject to the above discussion, considering the submissions made ct to the above discussion, considering the submissions made ct to the above discussion, considering the submissions made and information available on record, the total income of the assessee for and information available on record, the total income of the assessee for and information available on record, the total income of the assessee for Assessment year 2013-14 is computed as under.- Assessment year 2013 Particulars Rs. Rs.
M/s Ashtech (India) Pvt. Ltd. 5 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Total Income from Business and Profession Total Income from Business and Profession 10,35,40,8141/- (As per assessment order u/s. 143(3) r.w.s. 147 dated assessment order u/s. 143(3) r.w.s. 147 dated 27.12.2016 and ROl filed u/s 147 of the Income tax Act, 27.12.2016 and ROl filed u/s 147 of the Income tax Act, 1961) Add : Addition on account of bogus fuel/diesel bills Add : Addition on account of bogus fuel/diesel bills 9,90,97,267/- 9,90,97,267/ Add: Disallowance of expenses on account of Bogus Tyre Add: Disallowance of expenses on account of Bogus Tyre 29,54,983/- Bills Add: Disallowance of Unsubstantiated Expenses Add: Disallowance of Unsubstantiated Expenses 53,19,316/- Add: Disallowance of Prior Period Expenses Add: Disallowance of Prior Period Expenses 1,87,54,463/- 1,87,54,463/ Add: Disallowance u/s. 40(a)(ia) of the lIncome tax Act, Add: Disallowance u/s. 40(a)(ia) of the lIncome tax Act, 36,79,111/- 1961 Total Additions/Disallowances Total Additions/Disallowances 12,98,05,140/- 12,98,05,140/ Total Income from Business and Profession Total Income from Business and Profession 23,33,45,954/- Income from Other Sources (as per ROI) Income from Other Sources (as per ROI) Add: Addition of Share Application money received during Add: Addition of Share Application money received during 11,85,74,000/- 11,85,74,000/ year u/s. 68 of the Income Tax Act, 1961 year u/s. 68 of the Income Tax Act, 1961 Total Income under the head Other Total Income under the head Other Sources 11,85,74,000/- 35,19,19,954/- TOTAL INCOME 35,19,19,950/- ROUNDED OFF TO Since tax computed as per provisions of section 115JB of the Act is Since tax computed as per provisions of section 115JB of the Act is Since tax computed as per provisions of section 115JB of the Act is lesser than the tax under normal provisions, the assessee is liable lesser than the tax under normal provisions, the assessee is liable lesser than the tax under normal provisions, the assessee is liable to pay tax computed as per normal to pay tax computed as per normal provisions of the Act,” provisions of the Act,”
On further appeal, the Ld. CIT(A) sustained part additions in On further appeal, the Ld. CIT(A) sustained part additions in On further appeal, the Ld. CIT(A) sustained part additions in respect of addition made by the Assessing Officer for bogus respect of addition made by the Assessing Officer for bogus respect of addition made by the Assessing Officer for bogus expenses but deleted the but deleted the addition in respect of share application addition in respect of share application money.
Aggrieved, both the assessee and the Revenue are in appeal both the assessee and the Revenue are in appeal both the assessee and the Revenue are in appeal before the Tribunal by way of before the Tribunal by way of raising grounds as reproduced above. grounds as reproduced above.
The ground No. 1 of the appeal of the assessee is related to the The ground No. 1 of the appeal of the assessee is related to the The ground No. 1 of the appeal of the assessee is related to the disallowance of Rs. 9 9,90,97,260/- made by the Assessing Officer for made by the Assessing Officer for bogus purchases under the head ‘fuel/diesel’ under the head ‘fuel/diesel’ purchased from three purchased from three parties. The facts qua the issue in dispute are that the assessee The facts qua the issue in dispute are that the assessee was The facts qua the issue in dispute are that the assessee registered owner of registered owner of more than 400 trucks and dumper trucks trucks and dumper trucks
M/s Ashtech (India) Pvt. Ltd. 6 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. during the year under consideration during the year under consideration. In the impugned assessme . In the impugned assessment order, the Assessing Officer held the purchases of fuel he Assessing Officer held the purchases of fuel he Assessing Officer held the purchases of fuel (diesel) from three parties namely three parties namely (i) M/s KM Suchak & Company KM Suchak & Company, (ii) M/s Uganda Services and and (iii) M/s Ambaji Petroleum as bogus on the as bogus on the basis of the various observations, firstly statement of emplo basis of the various observations statement of employees of the assessee and partners, directors and the assessee and partners, directors and supplier companies, supplier companies, secondly, entries of purchases from tho , entries of purchases from those three concerns not se three concerns not maintained by the assessee by the assessee on ‘E mist’ i.e. accounting software i.e. accounting software used by the assessee. The assessee however submitted that the used by the assessee. The assessee however submitted that the used by the assessee. The assessee however submitted that the persons whose statement whose statement had been recorded by the Investigation been recorded by the Investigation Wing were not responsible for or handling diesel purchase of the not responsible for or handling diesel purchase of the not responsible for or handling diesel purchase of the assessee and therefore, those statements assessee and therefore, those statements were not to be relied were not to be relied upon. Further, it was submitted that all those persons had filed upon. Further, it was submitted that all those persons had filed upon. Further, it was submitted that all those persons had filed affidavit retracting the statement which were recorded u/s affidavit retracting the statement which were recorded u/s affidavit retracting the statement which were recorded u/s 133A/131 of the Act during survey proceedings. Further, it was 133A/131 of the Act during survey proceedings. Further, it was 133A/131 of the Act during survey proceedings. Further, it was submitted that statement recorded during survey submitted that statement recorded during survey was not having evidentiary value in view of the decision of the Hon’ble value in view of the decision of the Hon’ble Supreme value in view of the decision of the Hon’ble High Court in the case of S. Khader Khan Son (2012) 25 S. Khader Khan Son (2012) 25 High Court in the case of taxmann.com 413 (SC) taxmann.com 413 (SC) confirming CIT v. S. Khader Khan Son 300 confirming CIT v. S. Khader Khan Son 300 ITR 157 (Madras). It was contended by the assessee that al t was contended by the assessee that al t was contended by the assessee that all the documents including bills, vouchers, bank payment were submitted documents including bills, vouchers, bank payment were submitted documents including bills, vouchers, bank payment were submitted before the Assessing Officer. The relevant supplier parties also before the Assessing Officer. The relevant supplier parties also before the Assessing Officer. The relevant supplier parties also complied the notices issued u/s 133(6) of the Act. complied the notices issued u/s 133(6) of the Act. Regarding the ‘E Regarding the ‘E- mist’ accounting software, it was submitted that same was mist’ accounting software, it was submitted that sam mist’ accounting software, it was submitted that sam
M/s Ashtech (India) Pvt. Ltd. 7 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. implemented on trial basis during that period so certain entries implemented on trial basis during that period so certain entries implemented on trial basis during that period so certain entries could not be done on on that software. During appellate proceedings During appellate proceedings before the Ld. CIT(A), the assessee filed further additional before the Ld. CIT(A), the assessee filed further additional before the Ld. CIT(A), the assessee filed further additional evidences, which were forwarded to the Assessing Officer c which were forwarded to the Assessing Officer c which were forwarded to the Assessing Officer calling for a remand report. In the remand report, the Assessing Officer a remand report. In the remand report, the Assessing Officer a remand report. In the remand report, the Assessing Officer admitted the fact that consumption of diesel/fuel cannot be admitted the fact that consumption of diesel/fuel cannot be admitted the fact that consumption of diesel/fuel cannot be considered excessive as the vehicle considered excessive as the vehicles cannot run without diesel/fuel. cannot run without diesel/fuel. However, he recommended sustaining of disallowance to t he recommended sustaining of disallowance to t he recommended sustaining of disallowance to the extent of 10% of purchase from those three parties for two reasons. of 10% of purchase from those three parties for two reasons. of 10% of purchase from those three parties for two reasons. Firstly, according to him , according to him statements, recorded during survey proceedings indicated taking bogus bills by the assessee from those indicated taking bogus bills by the assessee from those indicated taking bogus bills by the assessee from those three parties. Secondly econdly, the Assessing officer in assessment order the Assessing officer in assessment order made an ad-hoc basis basis 10% disallowance in respect of bogus 10% disallowance in respect of bogus tyre purchases, so bogus fuel expenses disallowance might also be so bogus fuel expenses disallowance might also be so bogus fuel expenses disallowance might also be restricted to 10% of purchase bills from those three parties. restricted to 10% of purchase bills from those three parties. restricted to 10% of purchase bills from those three parties. Accordingly, the Assessing Assessing Officer in remand report proposed in remand report proposed an estimated disallowance of 10 estimated disallowance of 10% of total fuel/diesel purchased from purchased from three parties to be in the nature of in the nature of bogus fuel/diesel purchase. The bogus fuel/diesel purchase. The Ld. CIT(A) accepted the proposition of the Assessing Officer made in Ld. CIT(A) accepted the proposition of the Assessing Officer made in Ld. CIT(A) accepted the proposition of the Assessing Officer made in the remand proceedings and sustained the disallowance @ 10% of eedings and sustained the disallowance @ 10% of eedings and sustained the disallowance @ 10% of the total fuel/diesel purchases made from three parties which the total fuel/diesel purchases made from three parties which the total fuel/diesel purchases made from three parties which amounted to Rs.99,09,726/ amounted to Rs.99,09,726/-. The relevant finding of the Ld. CIT(A) . The relevant finding of the Ld. CIT(A) is reproduced as under : is reproduced as under :
M/s Ashtech (India) Pvt. Ltd. 8 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
“14.6. Findings in the Remand Report of the AO: During 14.6. Findings in the Remand Report of the AO: During the course of the course of present appellate proceedings, since additional evidences are filed by present appellate proceedings, since additional evidences are filed by present appellate proceedings, since additional evidences are filed by the appellant, these are forwarded for verification and further the appellant, these are forwarded for verification and further the appellant, these are forwarded for verification and further comments of the AO. The AO, after examining the documents and comments of the AO. The AO, after examining the documents and comments of the AO. The AO, after examining the documents and analysis of the average fuel consumption in analysis of the average fuel consumption in different years has different years has categorically given his finding in para 5.3 onwards. He has clearly categorically given his finding in para 5.3 onwards. He has clearly categorically given his finding in para 5.3 onwards. He has clearly stated that it does not seem to be logical to conclude that the whole fuel stated that it does not seem to be logical to conclude that the whole fuel stated that it does not seem to be logical to conclude that the whole fuel (diesel purchases from the three alleged parties are bogus. In this (diesel purchases from the three alleged parties are bogus. In this (diesel purchases from the three alleged parties are bogus. In this regard he has verified th regard he has verified the bogus fuel/diesel purchases by verifying the e bogus fuel/diesel purchases by verifying the factual data regarding the total running kilometer vs. diesel purchase factual data regarding the total running kilometer vs. diesel purchase factual data regarding the total running kilometer vs. diesel purchase consumption. He has tabulated the details of diesel expenses including consumption. He has tabulated the details of diesel expenses including consumption. He has tabulated the details of diesel expenses including the alleged bogus fuel expenses and running kilometers as submitted the alleged bogus fuel expenses and running kilometers as submitted the alleged bogus fuel expenses and running kilometers as submitted by the assessee as under: by the assessee as under: Total Total (Running) (Running) Diesel Purchase in Average Kilometer per Kilometer Kilometer LTR consumption litre 2012-13 76,92,475 76,92,475 38,57,021 1.99 2013-14 71,47,503 71,47,503 32,17,560 2.22 2014-15 70,80,612 70,80,612 32,36,768 2.19 2015-16 77,87,065 77,87,065 38,04,139 2.05 2016-17 76,83,886 76,83,886 37,54,853 2.05 2017-18 71,85,943 71,85,943 34,72,036 2.07
According to the AO, it is apparent from Table that the running average According to the AO, it is apparent from Table that the running average According to the AO, it is apparent from Table that the running average of commercial vehicle is ranging from 1.99 to 2.22 kilometer per litre. For of commercial vehicle is ranging from 1.99 to 2.22 kilometer per litre. For of commercial vehicle is ranging from 1.99 to 2.22 kilometer per litre. For F.Y.2012-13 relevant to A.Y.2013 13 relevant to A.Y.2013-14, the appellant has total running of the appellant has total running of transportation of 76,92,475 km and total purchase of diesel/ fuel of transportation of 76,92,475 km and total purchase of diesel/ fuel of transportation of 76,92,475 km and total purchase of diesel/ fuel of 38,57,021 litres making an average of 1.99 kms/litre. According to the 38,57,021 litres making an average of 1.99 kms/litre. According to the 38,57,021 litres making an average of 1.99 kms/litre. According to the AO the quantity of diesel/fuel, as disallowed in the assessment order is AO the quantity of diesel/fuel, as disallowed in the assessment order is AO the quantity of diesel/fuel, as disallowed in the assessment order is 19,41,595 litres which works out to 50.34% of the total diesel 5 litres which works out to 50.34% of the total diesel 5 litres which works out to 50.34% of the total diesel purchases in Mumbai region in F.Y.2012 purchases in Mumbai region in F.Y.2012-13. The AO has also stated 13. The AO has also stated that out of 38,57,021 litres of diesel, as much as 50.34% has been that out of 38,57,021 litres of diesel, as much as 50.34% has been that out of 38,57,021 litres of diesel, as much as 50.34% has been purchased from the three parties, i.e. M/s. Shri Ambaji Petroleum, M purchased from the three parties, i.e. M/s. Shri Ambaji Petroleum, M purchased from the three parties, i.e. M/s. Shri Ambaji Petroleum, M/s. Uganda Service Station and M/s. K.M. Uganda Service Station and M/s. K.M. Suchak & Co. In the opinion of Suchak & Co. In the opinion of the AO, it is unlikely that purchase of 50.34% of diesel purchases are the AO, it is unlikely that purchase of 50.34% of diesel purchases are the AO, it is unlikely that purchase of 50.34% of diesel purchases are bogus which appears to be impossible for running such a huge fleet of bogus which appears to be impossible for running such a huge fleet of bogus which appears to be impossible for running such a huge fleet of trucks and heavy vehicles. In para 5.2 of t trucks and heavy vehicles. In para 5.2 of the remand report the AO has he remand report the AO has mentioned that in order to verify the details of such transactions, mentioned that in order to verify the details of such transactions, mentioned that in order to verify the details of such transactions, notices u/ s. 133(6) of the I.T. notices u/ s. 133(6) of the I.T. Act were issued to the three parties, Act were issued to the three parties, entire purchase from which are considered as bogus in the assessment entire purchase from which are considered as bogus in the assessment entire purchase from which are considered as bogus in the assessment order. All these par order. All these parties submitted their reply along with supporting ties submitted their reply along with supporting documents. These were also verified by the AO and found in order. documents. These were also verified by the AO and found in order. documents. These were also verified by the AO and found in order. 14.7. It is also reported by the AO in the remand report that on analysis 14.7. It is also reported by the AO in the remand report that on analysis 14.7. It is also reported by the AO in the remand report that on analysis of the documentary evidences revealed that the details of delivery of of the documentary evidences revealed that the details of delivery of of the documentary evidences revealed that the details of delivery of goods along with Vehicle no., running kilometer, delivery challan no., goods along with Vehicle no., running kilometer, delivery challan no., goods along with Vehicle no., running kilometer, delivery challan no., loading and unloading etc. a contain the loading and unloading etc. a contain the details of vehicles employed for details of vehicles employed for the transportation of goods used for business purpose. The AO has also the transportation of goods used for business purpose. The AO has also the transportation of goods used for business purpose. The AO has also M/s Ashtech (India) Pvt. Ltd. 9 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. noted that the assessee has claimed depreciation on the vehicles used noted that the assessee has claimed depreciation on the vehicles used noted that the assessee has claimed depreciation on the vehicles used for business purposes too. for business purposes too. 14.8. In Para 5.4 of the remand report it is reported t 14.8. In Para 5.4 of the remand report it is reported that the statement hat the statement of sales made for certain days of April, July and March of 2012 of sales made for certain days of April, July and March of 2012 of sales made for certain days of April, July and March of 2012-13 are examined and found corroborated with the log book. Based on these, examined and found corroborated with the log book. Based on these, examined and found corroborated with the log book. Based on these, the AO has come to the conclusion that the commercial vehicles have the AO has come to the conclusion that the commercial vehicles have the AO has come to the conclusion that the commercial vehicles have been used for supply and deliver been used for supply and delivery of goods wherein the requirement of y of goods wherein the requirement of diesel/fuel is essential as per running kilometers. The AO has also diesel/fuel is essential as per running kilometers. The AO has also diesel/fuel is essential as per running kilometers. The AO has also noted that once the running kilometer is verified and found in order, the noted that once the running kilometer is verified and found in order, the noted that once the running kilometer is verified and found in order, the consumption of diesel/fuel cannot be denied as vehicles cannot run consumption of diesel/fuel cannot be denied as vehicles cannot run consumption of diesel/fuel cannot be denied as vehicles cannot run without consumption of diesel/fuel. onsumption of diesel/fuel.” 6.1 Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has sustained disallowance on ad Ld. CIT(A) has sustained disallowance on ad-hoc basis without any hoc basis without any corroborative material and only on the proposition of the Assessing corroborative material and only on the proposition of the Assessing corroborative material and only on the proposition of the Assessing Officer which was based onl was based only on the statement of the persons made the statement of the persons made during the course of the survey proceedings. The Ld. Counsel during the course of the survey proceedings. The Ld. during the course of the survey proceedings. The Ld. submitted that those persons have those persons have already retracted their already retracted their statement and the Assessing Officer statement and the Assessing Officer did not cross not cross-examine those persons, which means Assessing Off which means Assessing Officer admitted th those retractions. Further, he submitted that Further, he submitted that statements made during survey proceedings could not be admitted as evidence in view of the proceedings could not be admitted as evidence in view of the proceedings could not be admitted as evidence in view of the decision of the Hon’ble Supreme Court in the case of S. Khader decision of the Hon’ble Supreme Court in the case of S. Khader decision of the Hon’ble Supreme Court in the case of S. Khader Khan & Sons (supra). The Ld. Khan & Sons (supra). The Ld. Counsel submitted that in the tted that in the remand proceedings, the Assessing Officer has duly examined all remand proceedings, the Assessing Officer has duly examined all remand proceedings, the Assessing Officer has duly examined all the bills and vouchers and running of the trucks along with log the bills and vouchers and running of the trucks along with log the bills and vouchers and running of the trucks along with log book on test basis and basis and he himself was satisfied with the evidence satisfied with the evidences. The only basis for sustaining 10% disallowa he only basis for sustaining 10% disallowance is the statement of the statement of the parties which are not reliable the parties which are not reliable as evidence and therefore, therefore, the Ld. CIT(A) is not justified CIT(A) is not justified in sustaining the same. He further submitted . He further submitted
M/s Ashtech (India) Pvt. Ltd. 10 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. that the decision relied upon that the decision relied upon by the Ld. CIT(A) are factually factually different from the assessee and therefore, same should be ignored. from the assessee and therefore, same should be ignored. from the assessee and therefore, same should be ignored.
6.2 On the contrary, the Ld. DR relied on the finding of the Ld. On the contrary, the Ld. DR relied on the finding of the Ld. On the contrary, the Ld. DR relied on the finding of the Ld. CIT(A) and submitted that in CIT(A) and submitted that in the statements those parties had the statements those parties had clearly stated that against the cheque payment cash was returned clearly stated that against the cheque payment cash was retu clearly stated that against the cheque payment cash was retu back to the employees of the assessee. He submitted that retraction back to the employees of the assessee. He submitted that retraction back to the employees of the assessee. He submitted that retraction affidavits have been submitted after substantial affidavits have been submitted after substantial delay and therefore, delay and therefore, no cognizance should be should be given to those.
6.3 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. and perused the relevant material on record. The dispute is and perused the relevant material on record. regarding the genuineness of the bills of fuel/diesel issued by three regarding the genuineness of the bills of fuel/diesel issued by three regarding the genuineness of the bills of fuel/diesel issued by three parties, which the AO disallowed 100 percentile but the ld CIT(A) parties, which the AO disallowed 100 percentile but the ld parties, which the AO disallowed 100 percentile but the ld restricted to 10 percentile on ad restricted to 10 percentile on ad-hoc basis, relying on the hoc basis, relying on the report of the AO in remand proceedings. the AO in remand proceedings. During survey, statements of three statements of three persons of the assessee company were recorded including Sh persons of the assessee company were recorded including Sh persons of the assessee company were recorded including Sh Mandik Vishal Yashwant ( person claimed to be engaged in Mandik Vishal Yashwant ( person claimed to be engaged in Mandik Vishal Yashwant ( person claimed to be engaged in purchase of diesel); Sh Ram Sajjwan Tiwari ( claimed to be cashier purchase of diesel); Sh Ram Sajjwan Tiwari ( claimed to be cash purchase of diesel); Sh Ram Sajjwan Tiwari ( claimed to be cash of assessee company) and sh mahendra Gangan ( claimed to be of assessee company) and sh mahendra Gangan ( claimed to be of assessee company) and sh mahendra Gangan ( claimed to be engaged in data entry). Those three persons explained their engaged in data entry). Those three persons explained their engaged in data entry). Those three persons explained their individual role in the process of bogus billing. In view of the individual role in the process of bogus billing. In view of the individual role in the process of bogus billing. In view of the statements of those three statements of those three persons, the director of the assessee the director of the assessee company accepted the fact of bogus bills obtained from those three the fact of bogus bills obtained from those three the fact of bogus bills obtained from those three parties. In the period the period post survey at the premises of the assessee, post survey at the premises of the assessee,
M/s Ashtech (India) Pvt. Ltd. 11 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. surveys were also conducted at the premises of those three supplier also conducted at the premises of those three supplier also conducted at the premises of those three supplier parties and their employee also stated about issue of bogus bills to parties and their employee also stated about issue of bog parties and their employee also stated about issue of bog the assessee. However, all those persons retracted their statement the assessee. However, all those persons retracted their statement the assessee. However, all those persons retracted their statement before the Assessing by way affidavit filed but the AO rejected their before the Assessing by way affidavit filed but the AO rejected their before the Assessing by way affidavit filed but the AO rejected their retraction and relied solely on their statements. retraction and relied solely on their statements. We find that in We find that in remand proceedings, , the Assessing Officer has examined all the has examined all the bills and vouchers in respect of fuel/diesel expenses. He has also bills and vouchers in respect of fuel/diesel expenses bills and vouchers in respect of fuel/diesel expenses examined the log book examined the log book of vehicles for the relevant period and the relevant period and corroborated the statement of the sales with the log book. He also corroborated the statement of the sales with the log book corroborated the statement of the sales with the log book examined running of examined running of vehicles for the year and thereafter he and thereafter he concluded that consumption of diesel/fuel cannot be considered as concluded that consumption of diesel/fuel cannot be considered as concluded that consumption of diesel/fuel cannot be considered as excessive. The Ld. CIT(A) has also excessive. The Ld. CIT(A) has also relied upon above finding of the above finding of the Assessing Officer. No other documentary evidence was found during o other documentary evidence was found during o other documentary evidence was found during the survey proceedings which could the survey proceedings which could lead that assessee was engaged lead that assessee was engaged in obtaining bogus bills for the diesel from those three parties bogus bills for the diesel from those three parties bogus bills for the diesel from those three parties except the statement except the statements. The Ld. CIT(A) also concurred with the AO The Ld. CIT(A) also concurred with the AO on the basis of the statement of the persons recorded and sustained on the basis of the statement of the persons recorded and sustained on the basis of the statement of the persons recorded and sustained the disallowance to the extent of 10% of total purchase from three the disallowance to the extent of 10% of total purchase from three the disallowance to the extent of 10% of total purchase from three parties. We don’t find any justification for relying on the statements parties. We don’t find any justification for relying on the statements parties. We don’t find any justification for relying on the statements of those persons for restricting disallowance to the extent of 10%, e persons for restricting disallowance to the extent of 10%, e persons for restricting disallowance to the extent of 10%, when the Assessing officer has verified all the documentary when the Assessing officer has verified all the documentary when the Assessing officer has verified all the documentary evidence in remand proceedings and given clean chit to the evidence in remand proceedings and given clean chit to the evidence in remand proceedings and given clean chit to the assessee. There is no rational assessee. There is no rational behind restricting disallowance to 10% when the complete list of he complete list of bills and delivery location along with delivery location along with M/s Ashtech (India) Pvt. Ltd. 12 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. vehicle numbers used for supplying goods/materials were provided vehicle numbers used for supplying goods/materials vehicle numbers used for supplying goods/materials to the Assessing Officer during the assessment proceedings. In our to the Assessing Officer during the assessment proceedings. In our to the Assessing Officer during the assessment proceedings. In our opinion, the Ld. CIT(A) is not justif n, the Ld. CIT(A) is not justified in sustaining 10% diesel in sustaining 10% diesel/fuel expenses as bogus merely for the reason that 10% disallowance has expenses as bogus merely for the reason that 10% disallowance has expenses as bogus merely for the reason that 10% disallowance has been made in respect of bogus tyre purchases been made in respect of bogus tyre purchases by the Assessing by the Assessing n the case of PCIT Mumbai v. JK Surface Coatings Pvt. Mumbai v. JK Surface Coatings Pvt. officer. In the case of Ltd. in of 2017 Ltd. in ITA No. 1850 of 2017 (Bombay) relied upon by the l relied upon by the ld CIT(A), the bogus purchases were undisputedly confirmed the bogus purchases were undisputedly confirmed the bogus purchases were undisputedly confirmed and only issue was of the percentage of disallowance. In said case delivery of percentage of disallowance. In said case delivery of percentage of disallowance. In said case delivery of material was not established whereas in the instant case the material was not established whereas in the instant case the material was not established whereas in the instant case the Assessing Officer has neither doubted delivery nor doubted Assessing Officer has neither doubted delivery nor doubted Assessing Officer has neither doubted delivery nor doubted consumption of the diesel and therefore, sustaining ad-hoc consumption of the diesel and therefore, sustaining consumption of the diesel and therefore, sustaining disallowance, merely , merely on the basis of the presumption on the basis of the presumption, cannot be upheld and accordingly and accordingly, we set aside the finding of the Ld. CIT(A) on we set aside the finding of the Ld. CIT(A) on the issue in dispute and delete the addition sustained by him. The the issue in dispute and delete the addition sustained by him. the issue in dispute and delete the addition sustained by him. ground No. 1 of the appeal of the assessee is accordingly allowed. ground No. 1 of the appeal of the assessee is accordingly allowed. ground No. 1 of the appeal of the assessee is accordingly allowed.
The ground No. 2 of the appeal relates to disallowance of The ground No. 2 of the appeal relates to disallowance of The ground No. 2 of the appeal relates to disallowance of Rs.29,54,983/- on account of alleged bogus tyre purchase bills on account of alleged bogus tyre purchase bills on account of alleged bogus tyre purchase bills sustained by the Ld. CIT(A). sustained by the Ld. CIT(A).
7.1 Briefly stated facts qua Briefly stated facts qua the issue in dispute are that during the issue in dispute are that during the survey proceedings the survey proceedings, survey party noticed two set of bills for survey party noticed two set of bills for purchase of tyres from from supplier supplier namely namely M/s M/s Om Om Shree Shree Siddhivinayak tyres. The Assessing Officer in the impugned Siddhivinayak tyres. The Assessing Officer in the impugned Siddhivinayak tyres. The Assessing Officer in the impugned
M/s Ashtech (India) Pvt. Ltd. 13 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. assessment order has noted that fictitious bills could be assessment order has noted that fictitious bills could be assessment order has noted that fictitious bills could be differentiated from the genuine once as they did no the genuine once as they did no the genuine once as they did not contain basic information such as description of tyres, tyre number, size etc. He information such as description of tyres, tyre number, size etc. He information such as description of tyres, tyre number, size etc. He further recorded that in view of factual observation during the further recorded that in view of factual observation during the further recorded that in view of factual observation during the course of survey Shri Satish Mandhania, Direc course of survey Shri Satish Mandhania, Director of the assessee or of the assessee company voluntarily offered the entire amount of purchases of company voluntarily offered the entire amount of purchases of company voluntarily offered the entire amount of purchases of Rs.99,09,726/- made from M/s Om Shree Siddhivinayak tyres made from M/s Om Shree Siddhivinayak tyres made from M/s Om Shree Siddhivinayak tyres as his income for financial year 2012 his income for financial year 2012-13 to assessment year 2015 13 to assessment year 2015-16. Further, the Assessing Officer observed that during the course of urther, the Assessing Officer observed that during the course of urther, the Assessing Officer observed that during the course of survey proceedings survey proceedings Shri Ram Sajeevan Tiwari, cashier of the Shri Ram Sajeevan Tiwari, cashier of the assessee company confirmed that some cash was received back on assessee company confirmed that some cash was received back assessee company confirmed that some cash was received back monthly basis from M/s M/s Om Shree Siddhivinayak tyres. monthly basis from M/s M/s Om Shree Siddhivinayak tyres. monthly basis from M/s M/s Om Shree Siddhivinayak tyres. During the course of the assessment proceedings also the assessee course of the assessment proceedings also the assessee course of the assessment proceedings also the assessee failed to provide complete set of all the invoices and supporting failed to provide complete set of all the invoices and supporting failed to provide complete set of all the invoices and supporting documents like delivery challans including description of tyres, documents like delivery challans including description of tyres, documents like delivery challans including description of tyres, tyres numbers and etc. Therefore, the Assessing Officer held 10% of tyres numbers and etc. Therefore, the Assessing Officer held 10% of tyres numbers and etc. Therefore, the Assessing Officer held 10% of the total expenses as bogus and accordingly made addition e total expenses as bogus and accordingly made addition e total expenses as bogus and accordingly made addition amounting to Rs.29,51,983/ amounting to Rs.29,51,983/-.
7.2 On further appeal, the Ld. CIT(A) also upheld the disallowance On further appeal, the Ld. CIT(A) also upheld the disallowance On further appeal, the Ld. CIT(A) also upheld the disallowance observing as under:
“16. I have carefully considered the findings of the AO and the written 16. I have carefully considered the findings of the AO and the written 16. I have carefully considered the findings of the AO and the written submission of the appellant which is reproduced as above. The AO has of the appellant which is reproduced as above. The AO has of the appellant which is reproduced as above. The AO has made the impugned addition of Rs.29,54,983/ made the impugned addition of Rs.29,54,983/- on account of non on account of non-genuine tyre purchased from M/s. 0m Shree Siddhivinayak Tyres during F.Y tyre purchased from M/s. 0m Shree Siddhivinayak Tyres during F.Y tyre purchased from M/s. 0m Shree Siddhivinayak Tyres during F.Y .2012-13 relevant to A.Y.2013 13 relevant to A.Y.2013-14. According to the AO, M/s.Om 14. According to the AO, M/s.Om Shree Siddhivinayak Tyres used to issue both genuine as well as bogus bills Siddhivinayak Tyres used to issue both genuine as well as bogus bills Siddhivinayak Tyres used to issue both genuine as well as bogus bills
M/s Ashtech (India) Pvt. Ltd. 14 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. with respect to tyres sales. The fictitious bills can be differentiated from with respect to tyres sales. The fictitious bills can be differentiated from with respect to tyres sales. The fictitious bills can be differentiated from the genuine ones as they do not contain basic information such as the genuine ones as they do not contain basic information such as the genuine ones as they do not contain basic information such as description of tyres, tyre number, si description of tyres, tyre number, size etc. During the year under ze etc. During the year under consideration the total purchases shown in the books of accounts of the consideration the total purchases shown in the books of accounts of the consideration the total purchases shown in the books of accounts of the appellant from M/S. 0m Shree Siddhivinayak Tyres was Rs.2,95,49,829/ appellant from M/S. 0m Shree Siddhivinayak Tyres was Rs.2,95,49,829/ appellant from M/S. 0m Shree Siddhivinayak Tyres was Rs.2,95,49,829/-. Out of this, 10% purchases has been treated as bogus. It is observed that Out of this, 10% purchases has been treated as bogus. It is observed that Out of this, 10% purchases has been treated as bogus. It is observed that in order to come to this conclusion the AO has relied upon the statement of to come to this conclusion the AO has relied upon the statement of to come to this conclusion the AO has relied upon the statement of Shri Satish Mandhania, Director of the assessee company, Shri Ram Shri Satish Mandhania, Director of the assessee company, Shri Ram Shri Satish Mandhania, Director of the assessee company, Shri Ram Sajeevan Tiwari, Cashier and Shri Mahendra Gangan, Supervisor in Sajeevan Tiwari, Cashier and Shri Mahendra Gangan, Supervisor in Sajeevan Tiwari, Cashier and Shri Mahendra Gangan, Supervisor in M/s.E-fleet systems Pvt Ltd. In reply to Q.No. 17, Shri Ra fleet systems Pvt Ltd. In reply to Q.No. 17, Shri Ram Sajeevan fleet systems Pvt Ltd. In reply to Q.No. 17, Shri Ra Tiwari had stated that he used to collect cash from M/s. Om Shree Tiwari had stated that he used to collect cash from M/s. Om Shree Tiwari had stated that he used to collect cash from M/s. Om Shree Siddhivinayak Tyres. He has also indicated range of cash received per Siddhivinayak Tyres. He has also indicated range of cash received per Siddhivinayak Tyres. He has also indicated range of cash received per month from this vendor. Shri Mahendra Gangan, in his statement has month from this vendor. Shri Mahendra Gangan, in his statement has month from this vendor. Shri Mahendra Gangan, in his statement has stated in reply to Q.No.20 that he did not stated in reply to Q.No.20 that he did not enter the data of some of the enter the data of some of the bills/vouchers/documents of M/s. Om Shree Siddhivinayak Tyres. It is bills/vouchers/documents of M/s. Om Shree Siddhivinayak Tyres. It is bills/vouchers/documents of M/s. Om Shree Siddhivinayak Tyres. It is further stated in para 9 of the assessment order that although this vendor further stated in para 9 of the assessment order that although this vendor further stated in para 9 of the assessment order that although this vendor has submitted a written submission before the AO but did not attend in has submitted a written submission before the AO but did not attend in has submitted a written submission before the AO but did not attend in compliance to summons issued u/s. 131 of the Act. The AO has also stated to summons issued u/s. 131 of the Act. The AO has also stated to summons issued u/s. 131 of the Act. The AO has also stated that the appellant has failed to provide complete set of all the invoices and that the appellant has failed to provide complete set of all the invoices and that the appellant has failed to provide complete set of all the invoices and supporting documents such as delivery challans including description of supporting documents such as delivery challans including description of supporting documents such as delivery challans including description of tyre no. and bills etc. Finally, the AO has tyre no. and bills etc. Finally, the AO has come to the conclusion that 10% come to the conclusion that 10% of the purchases made during the year is certainly non of the purchases made during the year is certainly non of the purchases made during the year is certainly non-genuine and accordingly added to the total income of the appellant. accordingly added to the total income of the appellant. 16.1 In reply, the appellant has stated that M/S. Om Shree Siddhivinayak 16.1 In reply, the appellant has stated that M/S. Om Shree Siddhivinayak 16.1 In reply, the appellant has stated that M/S. Om Shree Siddhivinayak Tyres is a reputed dealer h Tyres is a reputed dealer having distributorship of renowned tyre aving distributorship of renowned tyre manufacturer M/S Birla Tyre Limited. They are the vendors of the manufacturer M/S Birla Tyre Limited. They are the vendors of the manufacturer M/S Birla Tyre Limited. They are the vendors of the company for last 20 years. According to the appellant various details, i.e. company for last 20 years. According to the appellant various details, i.e. company for last 20 years. According to the appellant various details, i.e. Ledger Confirmations, Bank statements, invoice & delivery challans were Ledger Confirmations, Bank statements, invoice & delivery challans were Ledger Confirmations, Bank statements, invoice & delivery challans were submitted to the AO. The notice u/ s. 133(6) was also issued to the itted to the AO. The notice u/ s. 133(6) was also issued to the itted to the AO. The notice u/ s. 133(6) was also issued to the supplier which has been duly responded to. All the payments were made supplier which has been duly responded to. All the payments were made supplier which has been duly responded to. All the payments were made through proper banking channel. According to the appellant when complete through proper banking channel. According to the appellant when complete through proper banking channel. According to the appellant when complete details are filed no disallowance should be made details are filed no disallowance should be made by the AO. by the AO. 16.2 In my considered view, the AO has brought out differentiation 16.2 In my considered view, the AO has brought out differentiation 16.2 In my considered view, the AO has brought out differentiation between the genuine bills as well as bogus bills issued by this vendor between the genuine bills as well as bogus bills issued by this vendor between the genuine bills as well as bogus bills issued by this vendor (M/s. Om Shree Siddhivinayak Tyres). In the bogus bills, there are (M/s. Om Shree Siddhivinayak Tyres). In the bogus bills, there are (M/s. Om Shree Siddhivinayak Tyres). In the bogus bills, there are omission of certain basic details viz, d omission of certain basic details viz, description of tyres, tyre no, size etc escription of tyres, tyre no, size etc which were not recorded by the appellant. which were not recorded by the appellant. It has not been explained It has not been explained during appellate proceedings as to why such lacuna exists while preparing during appellate proceedings as to why such lacuna exists while preparing during appellate proceedings as to why such lacuna exists while preparing some of the bills issued by this vendor. Moreover, not only the Director of some of the bills issued by this vendor. Moreover, not only the Director of some of the bills issued by this vendor. Moreover, not only the Director of the company but other employees have also admitted that some of the the company but other employees have also admitted that some of the the company but other employees have also admitted that some of the purchases from this vendor is non purchases from this vendor is non-genuine. Considering these facts, in my genuine. Considering these facts, in my opinion, the AO has correctly disallowed 10% of purchases which works opinion, the AO has correctly disallowed 10% of purchases which works opinion, the AO has correctly disallowed 10% of purchases which works out to Rs.29,54,983/ out to Rs.29,54,983/-which deserve to be confirmed. The ground of appeal nfirmed. The ground of appeal no.3 is dismissed. no.3 is dismissed.” 7.3 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is regarding material on record. The issue in dispute is regarding material on record. The issue in dispute is regarding
M/s Ashtech (India) Pvt. Ltd. 15 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. disallowance of 10% of expenses out of expenses on purchase of disallowance of 10% of expenses out of expenses on purchase of disallowance of 10% of expenses out of expenses on purchase of tyres shown from M/s Om Shree Siddhivinayak tyres during year om M/s Om Shree Siddhivinayak tyres during year om M/s Om Shree Siddhivinayak tyres during year under consideration. According to the assessee all details like ledger under consideration. According to the assessee all details like ledger under consideration. According to the assessee all details like ledger confirmation, invoices and delivery challans were submitted by the invoices and delivery challans were submitted by the invoices and delivery challans were submitted by the assessee before the Assessing Officer. According to Assessing Officer assessee before the Assessing Officer. According to Assessing Officer assessee before the Assessing Officer. According to Assessing Officer in the course of the survey two in the course of the survey two type of bills issued type of bills issued by M/s Om Shree Siddhivinayak tyres were found. Shree Siddhivinayak tyres were found. Firstly, where tyre numbers where tyre numbers and size etc. were mention mentioned, and secondly, where details of the where details of the tyre numbers of size etc. we tyre numbers of size etc. were not available. In view of tho re not available. In view of those observations during the course of the survey, the director of the observations during the course of the survey, the director of the observations during the course of the survey, the director of the assessee company Shri Satish Mandhania admitted fact of the Shri Satish Mandhania admitted fact of the Shri Satish Mandhania admitted fact of the bogus purchase. The cashier of the assessee company also stated of he cashier of the assessee company also stated of he cashier of the assessee company also stated of receipt of cash back from M/s Om Shree Sid cash back from M/s Om Shree Siddhivinayak tyres. dhivinayak tyres. In view of those statements se statements coupled with failure on the part of the on the part of the assessee in providing complete details of delivery challans of the assessee in providing complete details of delivery challans of the assessee in providing complete details of delivery challans of the bills in respect of M/s Om Shree Siddhivinayak tyres, the Assessing bills in respect of M/s Om Shree Siddhivinayak tyres bills in respect of M/s Om Shree Siddhivinayak tyres Officer held 10% of the purchases as bogus and accord 10% of the purchases as bogus and accord 10% of the purchases as bogus and accordingly disallowed. The assessee also failed to produce details of delivery disallowed. The assessee also failed to produce details of delivery disallowed. The assessee also failed to produce details of delivery challans in respect of purchase bills where tyre numbers and size challans in respect of purchase bills where tyre numbers and size challans in respect of purchase bills where tyre numbers and size were not mentioned in the invoices were not mentioned in the invoices before the ld CIT(A) before the ld CIT(A). Before us, also no such details to support that goods were to support that goods were actually delivered in actually delivered in respect of bills where where tyre numbers and sizes were not mentioned. tyre numbers and sizes were not mentioned. In absence of any such supporting documents In absence of any such supporting documents, the statements get the statements get corroborated that part of the purchases from M/s Om Shree corroborated that part of the purchases from M/s Om Shree corroborated that part of the purchases from M/s Om Shree
M/s Ashtech (India) Pvt. Ltd. 16 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Siddhivinayak tyres are in the nature of bogus Siddhivinayak tyres are in the nature of bogus. In absence of . In absence of complete details provided, provided, the Assessing Officer is justified in the Assessing Officer is justified in making estimated disallowance disallowance @ 10% of total expenses on tyre of total expenses on tyre purchase. Accordingly, we uphold the finding of the Ld. CIT(A) on . Accordingly, we uphold the finding of the Ld. CIT(A) on . Accordingly, we uphold the finding of the Ld. CIT(A) on the issue in dispute and dismiss e issue in dispute and dismiss the ground No. 2 of the appeal of 2 of the appeal of the assessee.
The ground No. 3 of the appeal of the assessee relates to The ground No. 3 of the appeal of the assessee relates to The ground No. 3 of the appeal of the assessee relates to disallowance of Rs.5,31,951/ disallowance of Rs.5,31,951/- sustained by the ld CIT(A), sustained by the ld CIT(A), out of disallowance for unsubstantiated expenses of Rs.53,19,316/ unsubstantiated expenses of Rs.53,19,316/- made unsubstantiated expenses of Rs.53,19,316/ by the Assessing Officer. The by the Assessing Officer. The ground No. 2 of the appeal of the ground No. 2 of the appeal of the Revenue relates to the relief Revenue relates to the relief of Rs.47,87,385/- given to the assessee given to the assessee by the Ld. CIT(A) on this issue on this issue.
8.1 The facts qua the issue in dispute are that during the course The facts qua the issue in dispute are that during the course The facts qua the issue in dispute are that during the course of assessment proceedings, the Assessing Officer shortlisted of assessment proceedings, the Assessing Officer of assessment proceedings, the Assessing Officer expenses claimed in respect of six parties and issued summons for expenses claimed in respect of six parties and issued summons for expenses claimed in respect of six parties and issued summons for verification and genuineness of expenses. Out of six parties, verification and genuineness of expenses. Out of six parties, verification and genuineness of expenses. Out of six parties, summons were not complied by two parties namely S.V. Takwale & summons were not complied by two parties namely S.V. Takwale & summons were not complied by two parties namely S.V. Takwale & Sons for expenses expenses of of Rs.44,15,958/- Rs.44,15,958/ and and Shivaji Shivaji Maruti Maruti Jhambulkar for expenses expenses of of Rs,9,03,358/- Rs,9,03,358/ , totaling to Rs.53,19,660/-. The Assessing Officer observed that S.V. Takwale & The Assessing Officer observed that S.V. Takwale & The Assessing Officer observed that S.V. Takwale & Sons had not filed return of income for AY 2013 Sons had not filed return of income for AY 2013-14 and 2014 14 and 2014-15. Further, he noted that Shivaji Maruti Jhambulkar had not shown Further, he noted that Shivaji Maruti Jhambulkar had not shown Further, he noted that Shivaji Maruti Jhambulkar had not shown the amount received from the assessee as his income in the return nt received from the assessee as his income in the return nt received from the assessee as his income in the return
M/s Ashtech (India) Pvt. Ltd. 17 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. of income. In view of observations, the ld In view of observations, the ld. Assessing Officer Assessing Officer disallowed those expanses expanses as not genuine. The Ld. CIT(A) allowed genuine. The Ld. CIT(A) allowed part relief to the assessee observing as under: part relief to the assessee observing as under:
“20. The Ground of 20. The Ground of appeal
No.4 relates to disallowance of appeal No.4 relates to disallowance of unsubstantiated expenses of Rs.53,19,316/ unsubstantiated expenses of Rs.53,19,316/- and pertaining to six and pertaining to six entities. It is observed that the issue has been discussed in para 10 entities. It is observed that the issue has been discussed in para 10 entities. It is observed that the issue has been discussed in para 10 of the assessment order. The AO in para 10.4 has stated that notice of the assessment order. The AO in para 10.4 has stated that notice of the assessment order. The AO in para 10.4 has stated that notice u/ s. 131 were u/ s. 131 were issued to S V Takwale & Sons and Shivaji Jambulkar issued to S V Takwale & Sons and Shivaji Jambulkar with respect to expenses of Rs.44, 15,958/ with respect to expenses of Rs.44, 15,958/- and Rs.9,03,358/ and Rs.9,03,358/- respectively. In response to summons issued for verification and respectively. In response to summons issued for verification and respectively. In response to summons issued for verification and genuineness of expenses, no compliance/ reply was received. It is genuineness of expenses, no compliance/ reply was received. It is genuineness of expenses, no compliance/ reply was received. It is also noted by the AO that S V Takwale & Sons has not filed return of by the AO that S V Takwale & Sons has not filed return of by the AO that S V Takwale & Sons has not filed return of income for A.Y.2013 income for A.Y.2013-14 and A.Y.2014-15. Further, Shivaji Jambulkar
15. Further, Shivaji Jambulkar is not showing amount received from the appellant company in his is not showing amount received from the appellant company in his is not showing amount received from the appellant company in his return of income and claiming refund from TDS. Accordingly, the return of income and claiming refund from TDS. Accordingly, the return of income and claiming refund from TDS. Accordingly, the impugned disallowances have been made. pugned disallowances have been made. 20.1 In this regard, the appellant during the appeal proceedings, has 20.1 In this regard, the appellant during the appeal proceedings, has 20.1 In this regard, the appellant during the appeal proceedings, has submitted certain additional evidences and stated that Shivaji submitted certain additional evidences and stated that Shivaji submitted certain additional evidences and stated that Shivaji Jarnbulkar is an individual. The appellant company has taken Jarnbulkar is an individual. The appellant company has taken Jarnbulkar is an individual. The appellant company has taken property on rent for RMC property on rent for RMC plant and paid rent of Rs.4,51,670/ plant and paid rent of Rs.4,51,670/- during the year. Ledger Confirmation/ Bank statement and copy of the year. Ledger Confirmation/ Bank statement and copy of the year. Ledger Confirmation/ Bank statement and copy of agreement were submitted for verification by the AO. Also the agreement were submitted for verification by the AO. Also the agreement were submitted for verification by the AO. Also the payments were made through proper banking channels. As far as S payments were made through proper banking channels. As far as S payments were made through proper banking channels. As far as S V Takwale & Sons is concerne V Takwale & Sons is concerned the appellant submitted that this is a d the appellant submitted that this is a proprietorship firm of Shri Mr. Ramesh S. V. proprietorship firm of Shri Mr. Ramesh S. V. Takawale. He was Takawale. He was supplying labour at Pune Project. With respect to this concern too, supplying labour at Pune Project. With respect to this concern too, supplying labour at Pune Project. With respect to this concern too, ledger confirmation/ bank statement and invoice copies were ledger confirmation/ bank statement and invoice copies were ledger confirmation/ bank statement and invoice copies were submitted. It is also cla submitted. It is also claimed that payments were made through imed that payments were made through proper banking channel. proper banking channel. 20.2 The AO in the remand report has stated that he issued notice to 20.2 The AO in the remand report has stated that he issued notice to 20.2 The AO in the remand report has stated that he issued notice to these concerns u/s. 133(6) of the I.T. Act for furnishing of supporting these concerns u/s. 133(6) of the I.T. Act for furnishing of supporting these concerns u/s. 133(6) of the I.T. Act for furnishing of supporting documents in order to verify the payments made to thes documents in order to verify the payments made to thes documents in order to verify the payments made to these two entities. However, no reply was received from these two entities. entities. However, no reply was received from these two entities. entities. However, no reply was received from these two entities. Hence, the AO has stated that the additional evidence filed by the Hence, the AO has stated that the additional evidence filed by the Hence, the AO has stated that the additional evidence filed by the appellant may not be admitted at the appellate stage. In the appellant may not be admitted at the appellate stage. In the appellant may not be admitted at the appellate stage. In the rejoinder the appellant has stated that merely because p rejoinder the appellant has stated that merely because parties are arties are not responding to notice adverse view should not be taken against not responding to notice adverse view should not be taken against not responding to notice adverse view should not be taken against the assessee when it has produced other supporting documents such the assessee when it has produced other supporting documents such the assessee when it has produced other supporting documents such as GST No., certificate from banks. On careful consideration full relief as GST No., certificate from banks. On careful consideration full relief as GST No., certificate from banks. On careful consideration full relief with respect to disallowance of Rs. 53,1 with respect to disallowance of Rs. 53,19,316/- cannot be given as cannot be given as existence of these parties have not been fully established. However, existence of these parties have not been fully established. However, existence of these parties have not been fully established. However, at the same time, the genuineness of the transaction has not been at the same time, the genuineness of the transaction has not been at the same time, the genuineness of the transaction has not been denied. There are sufficient documentary evidences produced by the denied. There are sufficient documentary evidences produced by the denied. There are sufficient documentary evidences produced by the appellant to establish that appellant to establish that payments have been made with respect to payments have been made with respect to M/s Ashtech (India) Pvt. Ltd. 18 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. rent paid for RMC plant and labour supplied at Pune site. Once AO rent paid for RMC plant and labour supplied at Pune site. Once AO rent paid for RMC plant and labour supplied at Pune site. Once AO has not doubted that rent has been paid for RMC plant or labour has has not doubted that rent has been paid for RMC plant or labour has has not doubted that rent has been paid for RMC plant or labour has been supplied at the Pune project, 100% disallowance is not feasible. been supplied at the Pune project, 100% disallowance is not feasible. been supplied at the Pune project, 100% disallowance is not feasible. No lacuna or defect has been found in the documentary evidences r defect has been found in the documentary evidences r defect has been found in the documentary evidences filed during assessment proceedings. Considering the totality of the filed during assessment proceedings. Considering the totality of the filed during assessment proceedings. Considering the totality of the facts and circumstances and keeping a consistent stand, 10% of the facts and circumstances and keeping a consistent stand, 10% of the facts and circumstances and keeping a consistent stand, 10% of the expenses, ie. Rs.5,31,931/ expenses, ie. Rs.5,31,931/-is confirmed while the balance amount of is confirmed while the balance amount of Rs.47,87,385/- - is deleted. The AO is directed accordingly. Thus, is deleted. The AO is directed accordingly. Thus, ground of appeal no. 4 is partly allowed. ground of appeal no. 4 is partly allowed.” 8.2 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. We find that in respect of Shivaji relevant material on record. We find that in respect of relevant material on record. We find that in respect of Maruti Jhambulkar, , before the Assessing Officer before the Assessing Officer, the assessee claimed that rent of Rs.4,51,670/ claimed that rent of Rs.4,51,670/- was paid during the year was paid during the year towards property taken towards property taken on lease for running ready mix concrete ready mix concrete (RMC) Plant. The assessee filed ledger confirmation bank statement Plant. The assessee filed ledger confirmation bank statement Plant. The assessee filed ledger confirmation bank statement and copy of the agree and copy of the agreement with the said party. The bill in respect of ment with the said party. The bill in respect of S.V. Takwale & Sons was in respect of supply of labour at Pune S.V. Takwale & Sons was in respect of supply of labour at Pune S.V. Takwale & Sons was in respect of supply of labour at Pune project. The assessee filed ledger confirmation bank statement and project. The assessee filed ledger confirmation bank statement and project. The assessee filed ledger confirmation bank statement and invoice copies in respect of said party invoice copies in respect of said party. The payment in respect of payment in respect of above parties made made through banking channel has not been disputed. The Assessing Officer . The Assessing Officer proposed disallowance disallowance in remand proceeding merely for the reason that notice merely for the reason that notices u/s 133(6) of the Act u/s 133(6) of the Act issued to those parties for furnishing supporting documents issued to those parties for furnishing supporting documents issued to those parties for furnishing supporting documents remained un-responded from those parties. Accordingly, in the responded from those parties. Accordingly, in the responded from those parties. Accordingly, in the remand proceedings, the Assessing Officer stated that the remand proceedings, the Assessing Officer stated that the remand proceedings, the Assessing Officer stated that the additional evidence might not be admitted. The Ld. CIT(A) has noted additional evidence might not be admitted. The Ld. CI additional evidence might not be admitted. The Ld. CI that genuineness of the transaction has not been denied. We find that genuineness of the transaction has not been denied. that genuineness of the transaction has not been denied. that the sufficient documentary evidence the sufficient documentary evidences have been have been produced by M/s Ashtech (India) Pvt. Ltd. 19 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. the assessee in respect of rent paid for RMC plant and labour the assessee in respect of rent paid for RMC plant the assessee in respect of rent paid for RMC plant supply at Pune before the lower supply at Pune before the lower authorities. In ou In our opinion, once the Ld. CIT(A) is satisfied with the documentary evidences the Ld. CIT(A) is satisfied with the documentary evidence the Ld. CIT(A) is satisfied with the documentary evidence maintained in respect of those expenses maintained in respect of those expenses, particu particularly when he himself mentioned that no lacuna or defect has been that no lacuna or defect has been found in that no lacuna or defect has been documents filed during assessment proceedings, during assessment proceedings, then he is not during assessment proceedings, justified in sustaining justified in sustaining disallowance to the extent of disallowance to the extent of 10% of the expenses for the reason that those parties for the reason that those parties did not respond to the did not respond to the notice u/s 133(6) of the Act. It is not the case that those parties notice u/s 133(6) of the Act. It is not the case that notice u/s 133(6) of the Act. It is not the case that have not been found that their address because, the n not been found that their address because, the n not been found that their address because, the notice issued u/s 133(6) of the Act has not been claimed to be returned un- u/s 133(6) of the Act has not been claimed to be returned un u/s 133(6) of the Act has not been claimed to be returned un served. Once, notice were served it was the duty of the Assessing served. Once, notice were served it was the duty of the Assessing served. Once, notice were served it was the duty of the Assessing Officer to enforce their attendance or carry out inquiry by sending Officer to enforce their attendance or carry out inquiry by sending Officer to enforce their attendance or carry out inquiry by sending Inspector at their site Inspector at their site. In absence of any such evidence of non evidence of non- existence of those parties of those parties, the action of the Ld. CIT(A) in sustaining the action of the Ld. CIT(A) in sustaining addition @ 10% of the total expenses addition @ 10% of the total expenses purely on ad-hoc basis is hoc basis is not justified. The finding of the Ld. CIT(A) on the issue in dispute is justified. The finding of the Ld. CIT(A) on the issue in dispute is justified. The finding of the Ld. CIT(A) on the issue in dispute is accordingly set aside. The ground accordingly set aside. The ground No. 3 of the appeal of the No. 3 of the appeal of the assessee is accordingly allowed and the ground No. 2 of the appeal assessee is accordingly allowed and the ground No. 2 of the appeal assessee is accordingly allowed and the ground No. 2 of the appeal of the Revenue is dismissed. of the Revenue is dismissed.
9. The ground No. 4 of the appeal of the assessee The ground No. 4 of the appeal of the assessee The ground No. 4 of the appeal of the assessee relates to disallowance of Rs.36,79,111/ of Rs.36,79,111/- u/s 40(a)(ia) of the Act ia) of the Act made by the AO, out of which amount of Rs.5,69,535/ out of which amount of Rs.5,69,535/- has been sustained by has been sustained by M/s Ashtech (India) Pvt. Ltd. 20 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
the Ld. CIT(A). This ground of appeal the Ld. CIT(A). This ground of appeal was not pressed not pressed before us and therefore, same dismissed as infructuous. dismissed as infructuous.
10. Now we take up the ground No. Now we take up the ground No. 1 of the appeal of the Revenue, 1 of the appeal of the Revenue, wherein the Revenue herein the Revenue has challenged the deletion of the addition for has challenged the deletion of the addition for the share application money amounting to Rs.11,85,74,000/- u/s the share application money amounting to Rs.11,85,74,000/ the share application money amounting to Rs.11,85,74,000/ 68 of the Act. The facts in brief qua the issue in dispute are that 68 of the Act. The facts in brief qua the issue in dispute are that 68 of the Act. The facts in brief qua the issue in dispute are that during the year unde during the year under consideration the assessee had r consideration the assessee had received share application money of Rs.11,85,74,000/ on money of Rs.11,85,74,000/- from M/s Dhanteras from M/s Dhanteras Agency Pvt. Ltd. The Assessing Officer rejected the contention of the Agency Pvt. Ltd. The Assessing Officer rejected the contention of the Agency Pvt. Ltd. The Assessing Officer rejected the contention of the assessee in support of onus u/s 68 of the Act and made addition in assessee in support of onus u/s 68 of the Act and made addition in assessee in support of onus u/s 68 of the Act and made addition in the hand of the assessee the hand of the assessee treating money received from money received from M/s Dhanteras Agency Pvt. Ltd. ency Pvt. Ltd. as not genuine. In the course of as not genuine. In the course of appellate proceedings before the Ld. CIT(A) the assessee filed certain appellate proceedings before the Ld. CIT(A) the assessee filed certain appellate proceedings before the Ld. CIT(A) the assessee filed certain additional evidences which were forwarded to the Assessing Officer which were forwarded to the Assessing Officer for his comment. The Ld. CIT(A) has reproduced the contents of the for his comment. The Ld. CIT(A) has reproduced the for his comment. The Ld. CIT(A) has reproduced the remand report sent by the Assessing Officer on page 63 of the of the and report sent by the Assessing Officer on page 63 of the of the and report sent by the Assessing Officer on page 63 of the of the impugned order. The Ld. CIT(A) deleted the addition observing as impugned order. The Ld. CIT(A) deleted the addition observing as impugned order. The Ld. CIT(A) deleted the addition observing as under:
“32.4 During the course of present appellate proceedings, the Ld.AR of 32.4 During the course of present appellate proceedings, the Ld.AR of 32.4 During the course of present appellate proceedings, the Ld.AR of the appellant has opposed the action of the AO stating that it has the appellant has opposed the action of the AO stating that it has the appellant has opposed the action of the AO stating that it has submitted sufficient material to establish the identity, creditworthiness submitted sufficient material to establish the identity, creditworthiness submitted sufficient material to establish the identity, creditworthiness and transaction. The transaction was carried and transaction. The transaction was carried out through by authorised out through by authorised banking channel and thus the genuineness of the transaction is proved. banking channel and thus the genuineness of the transaction is proved. banking channel and thus the genuineness of the transaction is proved. No contradictory material has been brought on record by the AO with No contradictory material has been brought on record by the AO with No contradictory material has been brought on record by the AO with respect to documentary evidences submitted. The appellant has also respect to documentary evidences submitted. The appellant has also respect to documentary evidences submitted. The appellant has also relied on the decision i relied on the decision in the case of Pr. CIT v. Chain House International n the case of Pr. CIT v. Chain House International Pvt Ltd (2018) 174 DTR 97 (MP)(HC)where it is held that once Pvt Ltd (2018) 174 DTR 97 (MP)(HC)where it is held that once Pvt Ltd (2018) 174 DTR 97 (MP)(HC)where it is held that once genuineness, creditworthiness and identity of the investors are genuineness, creditworthiness and identity of the investors are genuineness, creditworthiness and identity of the investors are M/s Ashtech (India) Pvt. Ltd. 21 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. established, no addition can be made as cash credit on the ground that established, no addition can be made as cash credit on the ground that established, no addition can be made as cash credit on the ground that shares were issued at excess premium. re issued at excess premium. 32.5 In the remand report the AO has reported that notice was issued to 32.5 In the remand report the AO has reported that notice was issued to 32.5 In the remand report the AO has reported that notice was issued to the appellant as well as the party concerned for detail supporting the appellant as well as the party concerned for detail supporting the appellant as well as the party concerned for detail supporting documents so as to verify the share application money received. The documents so as to verify the share application money received. The documents so as to verify the share application money received. The appellant submitted appellant submitted return of income, confirmation account and bank return of income, confirmation account and bank statement for the share application money received in FY.2012 statement for the share application money received in FY.2012 statement for the share application money received in FY.2012-13. The AO has also reported that the same has been repaid in FY,2013 AO has also reported that the same has been repaid in FY,2013 AO has also reported that the same has been repaid in FY,2013-14 for which confirmation account of repayment and bank statement were which confirmation account of repayment and bank statement were which confirmation account of repayment and bank statement were comm also furnished. According to the AO, on perusal of the financial also furnished. According to the AO, on perusal of the financial also furnished. According to the AO, on perusal of the financial statement, it is found that the M/S Dhanteras Agency Pvt. Ltd. had total statement, it is found that the M/S Dhanteras Agency Pvt. Ltd. had total statement, it is found that the M/S Dhanteras Agency Pvt. Ltd. had total reserve and surplus of Rs. 13,59,22,291/ reserve and surplus of Rs. 13,59,22,291/- while share application while share application money given to the appellant was Rs. 11,85,74,000/-. money given to the appellant was Rs. Since, M/s. Dhanteras Agency Pvt. Ltd. was strike off, no reply was received Dhanteras Agency Pvt. Ltd. was strike off, no reply was received Dhanteras Agency Pvt. Ltd. was strike off, no reply was received against the notice issued u/s 133(6). In the opinion of the AO, in the against the notice issued u/s 133(6). In the opinion of the AO, in the against the notice issued u/s 133(6). In the opinion of the AO, in the remand report, when the reply of the party has not been received and remand report, when the reply of the party has not been received and remand report, when the reply of the party has not been received and the assessee from his own side has fur the assessee from his own side has furnished all such required nished all such required document, acceptance of the additional evidence may be taken on merit document, acceptance of the additional evidence may be taken on merit document, acceptance of the additional evidence may be taken on merit basis. In the rejoinder the appellant has again stated that it has proved basis. In the rejoinder the appellant has again stated that it has proved basis. In the rejoinder the appellant has again stated that it has proved the creditworthiness, identity and genuineness by filing return of the creditworthiness, identity and genuineness by filing return of the creditworthiness, identity and genuineness by filing return of income and bank stat income and bank statement of the parties. Moreover, the appellant has ement of the parties. Moreover, the appellant has returned the share application money in subsequent year due to returned the share application money in subsequent year due to returned the share application money in subsequent year due to dispute. All these transactions have taken place through banking dispute. All these transactions have taken place through banking dispute. All these transactions have taken place through banking channel. It is also stated that the total reserve and surplus of M/s. channel. It is also stated that the total reserve and surplus of M/s. channel. It is also stated that the total reserve and surplus of M/s. Dhanteras Agency Pvt. Ltd. far exceeded the share application money s Agency Pvt. Ltd. far exceeded the share application money s Agency Pvt. Ltd. far exceeded the share application money given to the appellant. Hence merely because no reply is received from given to the appellant. Hence merely because no reply is received from given to the appellant. Hence merely because no reply is received from the company, which is strike off, the assessee cannot be held liable for the company, which is strike off, the assessee cannot be held liable for the company, which is strike off, the assessee cannot be held liable for the same. 32.6 On careful consideration I find that 32.6 On careful consideration I find that no adverse comment has been no adverse comment has been given by the AO in the remand report with respect to evidences given by the AO in the remand report with respect to evidences given by the AO in the remand report with respect to evidences produced at the time of remand proceedings. It is a fact that share produced at the time of remand proceedings. It is a fact that share produced at the time of remand proceedings. It is a fact that share application money received in F.Y.2012 application money received in F.Y.2012-13 was repaid back in F.Y 13 was repaid back in F.Y .2013-14. All these transactions 14. All these transactions reflect in the bank statement furnished reflect in the bank statement furnished during the remand proceedings as well as before the undersigned. The during the remand proceedings as well as before the undersigned. The during the remand proceedings as well as before the undersigned. The AO in the remand proceedings has also examined the financial AO in the remand proceedings has also examined the financial AO in the remand proceedings has also examined the financial statement of M/s. Dhanteras Agency Pvt. Ltd. and found that total statement of M/s. Dhanteras Agency Pvt. Ltd. and found that total statement of M/s. Dhanteras Agency Pvt. Ltd. and found that total reserve and surplus reserve and surplus of Rs. 13,59,22,291/- was much higher than the was much higher than the share application money given to the appellant i.e. Rs. 11,85,74,000/ share application money given to the appellant i.e. Rs. 11,85,74,000/ share application money given to the appellant i.e. Rs. 11,85,74,000/- The AO has also highlighted that since M/s. Dhanteras Agency Pvt. Ltd. The AO has also highlighted that since M/s. Dhanteras Agency Pvt. Ltd. The AO has also highlighted that since M/s. Dhanteras Agency Pvt. Ltd. was strike off by ROC no reply was received from this company and was strike off by ROC no reply was received from this company and was strike off by ROC no reply was received from this company and hence no adverse view should be taken on this count. In this regard, I hence no adverse view should be taken on this count. In this regard, I hence no adverse view should be taken on this count. In this regard, I find merit in the above submission of the appellant. find merit in the above submission of the appellant. 32.7 As far as the argument of the AO that one of the Directors is a non 32.7 As far as the argument of the AO that one of the Directors is a non 32.7 As far as the argument of the AO that one of the Directors is a non- filer and another one files return of income below exemptio filer and another one files return of income below exemption limit cannot n limit cannot be factor for the impugned disallowance where the creditworthiness of be factor for the impugned disallowance where the creditworthiness of be factor for the impugned disallowance where the creditworthiness of the company has been examined during remand proceedings. The the company has been examined during remand proceedings. The the company has been examined during remand proceedings. The company filed last balance sheet on ROC for the year ending company filed last balance sheet on ROC for the year ending company filed last balance sheet on ROC for the year ending
M/s Ashtech (India) Pvt. Ltd. 22 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
31.03.2015. Thereafter it was struck down from ROC 31.03.2015. Thereafter it was struck down from ROC. It appears . It appears that the AO has considered these factors overlooking the fact that the AO has considered these factors overlooking the fact that the AO has considered these factors overlooking the fact that transactions in question happened in F.Y.2012 transactions in question happened in F.Y.2012-13 and 2013 13 and 2013-14. Moreover, the comment of the AO with respect to bank statement that no Moreover, the comment of the AO with respect to bank statement that no Moreover, the comment of the AO with respect to bank statement that no bank balance is maintained in bank account, bank balance is maintained in bank account, cash deposits or transfer cash deposits or transfer of funds to RTGS immediately after the deposit of money has not been of funds to RTGS immediately after the deposit of money has not been of funds to RTGS immediately after the deposit of money has not been further elaborated. The AO has not cited a single instance that the further elaborated. The AO has not cited a single instance that the further elaborated. The AO has not cited a single instance that the present share application money of Rs. 11,85,74,000/ present share application money of Rs. 11,85,74,000/- have come to have come to the appellant through cas the appellant through cash deposit in the bank account of M/s. h deposit in the bank account of M/s. Dhanteras Agency Pvt. Ltd. He has given a general statement Dhanteras Agency Pvt. Ltd. He has given a general statement Dhanteras Agency Pvt. Ltd. He has given a general statement disregarding the bank statement filed by the appellant. disregarding the bank statement filed by the appellant. The AO in the The AO in the assessment order has also not given any adverse finding or found any assessment order has also not given any adverse finding or found any assessment order has also not given any adverse finding or found any defect in the docum defect in the documentary evidences submitted by the appellant which entary evidences submitted by the appellant which cannot be summerly rejected. Similarly, the identity of M/s. Dhanteras cannot be summerly rejected. Similarly, the identity of M/s. Dhanteras cannot be summerly rejected. Similarly, the identity of M/s. Dhanteras Agency Pvt Ltd. has been established by the appellant by filing PAN Agency Pvt Ltd. has been established by the appellant by filing PAN Agency Pvt Ltd. has been established by the appellant by filing PAN No., ITR copy, balance sheet, profit and loss account and other fin No., ITR copy, balance sheet, profit and loss account and other fin No., ITR copy, balance sheet, profit and loss account and other financial statements. Regarding creditworthiness, the AO in the remand report statements. Regarding creditworthiness, the AO in the remand report statements. Regarding creditworthiness, the AO in the remand report has certified that the reserve and surplus far exceeds the share has certified that the reserve and surplus far exceeds the share has certified that the reserve and surplus far exceeds the share application money. Hence, creditworthiness cannot be doubted. As far application money. Hence, creditworthiness cannot be doubted. As far application money. Hence, creditworthiness cannot be doubted. As far as genuineness of the transaction is concerned, genuineness of the transaction is concerned, the same has been the same has been done through banking channels and the share application money has done through banking channels and the share application money has done through banking channels and the share application money has been returned bank in the subsequent year as reported by the AO in the been returned bank in the subsequent year as reported by the AO in the been returned bank in the subsequent year as reported by the AO in the remand report. Thus, all the three limbs of section 68 has been complied remand report. Thus, all the three limbs of section 68 has been complied remand report. Thus, all the three limbs of section 68 has been complied with and no adverse view ha with and no adverse view has been taken by the AO in remand report. s been taken by the AO in remand report. Taking all the factors into account, in my considered view the addition Taking all the factors into account, in my considered view the addition Taking all the factors into account, in my considered view the addition of share application money received from M/s. Dhanteras Agency Pvt. of share application money received from M/s. Dhanteras Agency Pvt. of share application money received from M/s. Dhanteras Agency Pvt. Ltd. is unjustified and deserve to be deleted. Thus, the addition of Rs, Ltd. is unjustified and deserve to be deleted. Thus, the addition of Rs, Ltd. is unjustified and deserve to be deleted. Thus, the addition of Rs, 11,85,74,000/- -is deleted. Hence, ground of appeal No. 7 is allowed. is deleted. Hence, ground of appeal No. 7 is allowed.” 10.1 It is evident th It is evident that in the remand proceedings no at in the remand proceedings no adverse comment has been given by the Assessing Officer in respect of comment has been given by the Assessing Officer in respect of comment has been given by the Assessing Officer in respect of additional evidence produced. The Assessing Officer himself has evidence produced. The Assessing Officer himself has evidence produced. The Assessing Officer himself has noted the creditworthiness of the share subscriber ted the creditworthiness of the share subscriber and commented and commented that total reserve and surplus of Rs.1,35,92,291/ total reserve and surplus of Rs.1,35,92,291/- was much higher was much higher than than than share share share application application application money money money given given given to to to the the the assessee assessee assessee Rs.11,85,74,000/-. The basis for the Assessing Officer in the . The basis for the Assessing Officer in the . The basis for the Assessing Officer in the ssment proceedings for making addition was firstly, original assessment proceedings for making addition ssment proceedings for making addition that M/s M/s Dhanteras Agency Pvt. Ltd. did not respond to the that M/s M/s Dhanteras Agency Pvt. Ltd. did not respond to the that M/s M/s Dhanteras Agency Pvt. Ltd. did not respond to the notices issued u/s 133(6) of the Act. For which the assessee has notices issued u/s 133(6) of the Act. For which the assessee has notices issued u/s 133(6) of the Act. For which the assessee has M/s Ashtech (India) Pvt. Ltd. 23 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. submitted during the appellate proceedings that said company has submitted during the appellate proceedings that said company submitted during the appellate proceedings that said company been stricken off by the en off by the Registrar of Companies (ROC ROC) ,therefore, no reply was received. The Ld. CIT(A) is justified in accepting this reply was received. The Ld. CIT(A) is justified in reply was received. The Ld. CIT(A) is justified in explanation of the assessee and therefore, no adverse view could be explanation of the assessee and therefore, no adverse view could be explanation of the assessee and therefore, no adverse view could be taken on this account. Secondly, the Ld. CIT(A) has further taken on this account. he Ld. CIT(A) has further rejected the argument of the Assessing Officer in the original cted the argument of the Assessing Officer in the original cted the argument of the Assessing Officer in the original assessment order that director of the assessee was a non-filer. In assessment order that director of the assessee was a non assessment order that director of the assessee was a non our opinion the status of our opinion the status of the director of company as the director of company as non-filer is not relevant relevant relevant while while while deciding deciding deciding the the the identity, identity, identity, creditworthiness creditworthiness creditworthiness and and and genuineness of the transaction of a company. enuineness of the transaction of a company. Thirdly, the AO in Thirdly, the AO in assessment order mentioned that cash deposits were made in bank assessment order mentioned that cash deposits were made assessment order mentioned that cash deposits were made account of said party account of said party, however, the ld CIT(A) has pointed out that , however, the ld CIT(A) has pointed out that not a single instance has been brought on record by the AO. Before not a single instance has been brought on record by the AO. Before not a single instance has been brought on record by the AO. Before us also no such instance has been brought by the ld Departmental us also no such instance has been brought by the ld Departmental us also no such instance has been brought by the ld Departmental Representative. In our opinion In our opinion, once the Assessing Officer in the once the Assessing Officer in the remand report has accepted the identity t has accepted the identity and creditworthiness creditworthiness of the share subscriber and and genuineness of the transaction, genuineness of the transaction, then, filing of further appeal before the Tribunal on the said issue appeal before the Tribunal on the said issue, , is not justified. Accordingly, we uphold the finding of the Ld. CIT(A) on the issue in Accordingly, we uphold the finding of the Ld. CIT(A) on the Accordingly, we uphold the finding of the Ld. CIT(A) on the dispute. The ground of appeal of the Revenue is accordingly dispute. The ground of appeal of the Revenue is accordingly dispute. The ground of appeal of the Revenue is accordingly dismissed.
ITA No. 3220/Mum/2023 and No. 3220/Mum/2023 and ITA No. 3027/Mum/2023 3027/Mum/2023
M/s Ashtech (India) Pvt. Ltd. 24 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Now we take up the appeal of the assessee and Revenue for Now we take up the appeal of the assessee and Revenue for Now we take up the appeal of the assessee and Revenue for assessment year 2014 assessment year 2014-15. The grounds raised by the assessee are raised by the assessee are reproduced as under: reproduced as under:
“1. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of Rs.5,57,28,653/ Rs.5,57,28,653/- being alleged bogus purchase of fuel / diesel & the being alleged bogus purchase of fuel / diesel & the learned CIT (Appeal) erred in confirming the disallowance of earned CIT (Appeal) erred in confirming the disallowance of earned CIT (Appeal) erred in confirming the disallowance of Rs.55,72,865/- - being 10 % of Rs. 5,57,28,653/- purchases of alleged purchases of alleged bogus fuel/ diesel. bogus fuel/ diesel. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
2. On the facts and in the circumstances of the case and law he facts and in the circumstances of the case and law he facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of Rs.29,82,429/- - on account of alleged bogus tyre purchase bills & the on account of alleged bogus tyre purchase bills & the learned CIT (Appeal) erred in upholding the learned CIT (Appeal) erred in upholding the addition of Rs.29,82,429/ Rs.29,82,429/- on account of alleged bogus tyre purchase bills on account of alleged bogus tyre purchase bills without without correct appreciation of facts and law on the subject. appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
3. On the facts and in the circ On the facts and in the circumstances of the case and law on the umstances of the case and law on the subject, the learned assessing officer erred in making disallowance of subject, the learned assessing officer erred in making disallowance of subject, the learned assessing officer erred in making disallowance of Rs.32,57,764/- - on account of unsubstantiated expenses & the learned on account of unsubstantiated expenses & the learned CIT (Appeal) erred erred in confirming disallowance of Rs.3,25,776/ disallowance of Rs.3,25,776/-being 10% of Rs.32 10% of Rs.32,57,764/-on account of unsubstantiated expenses of unsubstantiated expenses of without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.” 11.1 The grounds raised by the Revenue are The grounds raised by the Revenue are reproduced as under: reproduced as under:
1. Whether on the facts and in the circumstances of the case and in Whether on the facts and in the circumstances of the case and in Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) is justified in deleting the disallowance of share law, the Ld. CIT (A) is justified in deleting the disallowance of share law, the Ld. CIT (A) is justified in deleting the disallowance of share application money without appreciating the facts that the identity, application money without appreciating the facts that the identity, application money without appreciating the facts that the identity, creditworthiness and genui creditworthiness and genuineness was not established by the assessee neness was not established by the assessee with regard to the alleged parties? with regard to the alleged parties? 2 ii. "Whether on the facts and in the circumstances of the case and in ii. "Whether on the facts and in the circumstances of the case and in ii. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) is justified in deleting the disallowance of law, the Ld. CIT (A) is justified in deleting the disallowance of law, the Ld. CIT (A) is justified in deleting the disallowance of unsubstantiated, expenses without appre unsubstantiated, expenses without appreciating the facts that the ciating the facts that the M/s Ashtech (India) Pvt. Ltd. 25 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
identity, creditworthiness and genuineness was not established by the identity, creditworthiness and genuineness was not established by the identity, creditworthiness and genuineness was not established by the assessee with regard to the alleged parties?" assessee with regard to the alleged parties?"
Whether on the facts and in the circumstances of the case and in Whether on the facts and in the circumstances of the case and in Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) is justified in deleting law, the Ld. CIT (A) is justified in deleting the disallowance of the disallowance of depreciation on unaccounted sales of old vehicles without appreciating depreciation on unaccounted sales of old vehicles without appreciating depreciation on unaccounted sales of old vehicles without appreciating the facts that the genuineness of the purchaser of old vehicles was not the facts that the genuineness of the purchaser of old vehicles was not the facts that the genuineness of the purchaser of old vehicles was not established by the assessee? established by the assessee? 12. The ground No The ground Nos. 1 to 3 of the appeal of the assessee and . 1 to 3 of the appeal of the assessee and ground No. 2 of the appeal of the Revenue ound No. 2 of the appeal of the Revenue is identical to the ground identical to the ground Nos. 1 to 3 raised by the assessee and ground No. 2 by the assessee and ground No. 2 raised by the by the assessee and ground No. 2 Revenue in assessment year 2013 Revenue in assessment year 2013-14 except change of the amount. 14 except change of the amount. Therefore, facts and circumstances being similar the ground Nos. 1 Therefore, facts and circumstances being similar the ground Therefore, facts and circumstances being similar the ground to 3 of the appeal of the assessee and ground No. 2 of the appeal of to 3 of the appeal of the assessee and ground No. 2 of the appeal of to 3 of the appeal of the assessee and ground No. 2 of the appeal of the Revenue are accordingly decided the Revenue are accordingly decided mutatis mutandis mutatis mutandis.
19. The ground No. 1 of the appeal of the Revenue relate to The ground No. 1 of the appeal of the Revenue relate to The ground No. 1 of the appeal of the Revenue relate to deletion by the ld CIT(A) of addition made by the AO in respect of deletion by the ld CIT(A) of addition made by the AO in respect deletion by the ld CIT(A) of addition made by the AO in respect share application money of Rs. 12,11,00,000/ share application money of Rs. 12,11,00,000/- received from M/s received from M/s Kasturi Nagesh Pal & Co P ltd ( in short the ‘Kasturi’). The facts in Kasturi Nagesh Pal & Co P ltd ( in short the ‘Kasturi’). Kasturi Nagesh Pal & Co P ltd ( in short the ‘Kasturi’). brief qua the issue in dispute are that in the financial year brief qua the issue in dispute are that in the financial year brief qua the issue in dispute are that in the financial year corresponding to the assessment year under consideration, the corresponding to the assessment year under consideratio corresponding to the assessment year under consideratio assessee received share application money of Rs.12,11,00,000/- assessee received share application money of Rs.12,11,00,000/ assessee received share application money of Rs.12,11,00,000/ from ‘Kasturi’. According to the Assessing Officer, the . According to the Assessing Officer, the source of . According to the Assessing Officer, the money in the hands of Kasturi was received from 13 companies, money in the hands of Kasturi was received from 13 companies, money in the hands of Kasturi was received from 13 companies, which were controlled and managed by Calcutta based entry controlled and managed by Calcutta based entry controlled and managed by Calcutta based entry operators Mr. Jitendra Mishra operators Mr. Jitendra Mishra, who has stated before the who has stated before the Investigation Wing, Kolkata Investigation Wing, Kolkata on 26.09.2014 that said companies on 26.09.2014 that said companies
M/s Ashtech (India) Pvt. Ltd. 26 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. were shell/paper companies were shell/paper companies. The Assessing Officer further observed . The Assessing Officer further observed that Kasturi has shown has shown nominal rental income in the range of nominal rental income in the range of Rs.4,80,000/- to Rs.9,60,000/ to Rs.9,60,000/- during the various years and during the various years and therefore, the Assessing Officer opined that introduction of share therefore, the Assessing Officer opined that introduction of share therefore, the Assessing Officer opined that introduction of share application money through M/s Kasturi was nothing but a colorable application money through M/s Kasturi was nothing but application money through M/s Kasturi was nothing but device to infuse tax evaded income into the device to infuse tax evaded income into the bank of bank of assessee. Accordingly, he treated the said share application money as y, he treated the said share application money as y, he treated the said share application money as unexplained cash credit and made addition unexplained cash credit and made addition. Before the Ld. CIT(A) efore the Ld. CIT(A) the assessee filed detailed submission along with financial the assessee filed detailed submission along with financial the assessee filed detailed submission along with financial statements, ledger confirmation, bank statement etc of said party. statements, ledger confirmation, bank statement etc statements, ledger confirmation, bank statement etc The Ld. CIT(A) after considering the submission of the assessee after considering the submission of the assessee after considering the submission of the assessee deleted the addition observing as under: deleted the addition observing as under:
“38.2 During the course of appellate proceedings, the appellant has 38.2 During the course of appellate proceedings, the appellant has 38.2 During the course of appellate proceedings, the appellant has submitted that vide letter dated 20.05.2021 it had submitted the financial submitted that vide letter dated 20.05.2021 it had submitted the financial submitted that vide letter dated 20.05.2021 it had submitted the financial statement, ledger conf statement, ledger confirmation, bank statement highlighting the receipts irmation, bank statement highlighting the receipts and payments to justify the genuineness of the share application money and payments to justify the genuineness of the share application money and payments to justify the genuineness of the share application money received during the year under consideration. It has also submitted that received during the year under consideration. It has also submitted that received during the year under consideration. It has also submitted that the appellant had submitted the name of the parties from whic the appellant had submitted the name of the parties from whic the appellant had submitted the name of the parties from which M/s Kasturi Kasturi Kasturi had had had received received received share share share application application application money money money along along along with with with acknowledgement of I.T. return with computation of total income, PAN, acknowledgement of I.T. return with computation of total income, PAN, acknowledgement of I.T. return with computation of total income, PAN, financial statement, ledger highlighting bank transactions along with share financial statement, ledger highlighting bank transactions along with share financial statement, ledger highlighting bank transactions along with share application confirmation of said parties. The ap application confirmation of said parties. The appellant has further pellant has further submitted that Kasturi has been issued the shares against the share submitted that Kasturi has been issued the shares against the share submitted that Kasturi has been issued the shares against the share application money received on 28.03.2023. To satisfy this, Form No. PAS application money received on 28.03.2023. To satisfy this, Form No. PAS application money received on 28.03.2023. To satisfy this, Form No. PAS- 3, list of allottees, valuation report, Form PAS 3, list of allottees, valuation report, Form PAS-5, master data of the 5, master data of the company and copy of resol company and copy of resolution for verification of the undersigned are also ution for verification of the undersigned are also submitted. Thus, it is claimed that not only the identity of the creditor but submitted. Thus, it is claimed that not only the identity of the creditor but submitted. Thus, it is claimed that not only the identity of the creditor but creditworthiness and genuineness have been fully established and hence creditworthiness and genuineness have been fully established and hence creditworthiness and genuineness have been fully established and hence no disallowance is called for. The appellant has also re no disallowance is called for. The appellant has also re no disallowance is called for. The appellant has also relied on certain judicial decisions. judicial decisions. 38.3 On careful consideration of the submission of the appellant as well as 38.3 On careful consideration of the submission of the appellant as well as 38.3 On careful consideration of the submission of the appellant as well as various details brought on record, I find that identity of M/s Kasturi is various details brought on record, I find that identity of M/s Kasturi is various details brought on record, I find that identity of M/s Kasturi is never doubted by the AO. There is no doubt that share application mone never doubted by the AO. There is no doubt that share application mone never doubted by the AO. There is no doubt that share application money has been received through banking channels as copy of bank statements has been received through banking channels as copy of bank statements has been received through banking channels as copy of bank statements have been verified and found in order. Moreover, the shares were also have been verified and found in order. Moreover, the shares were also have been verified and found in order. Moreover, the shares were also M/s Ashtech (India) Pvt. Ltd. 27 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. allotted on 28.03.2022. As far as creditworthiness of M/s Kasturi is allotted on 28.03.2022. As far as creditworthiness of M/s Kasturi is allotted on 28.03.2022. As far as creditworthiness of M/s Kasturi is concerned that is also not doubted by the AO concerned that is also not doubted by the AO as he himself has stated that as he himself has stated that the source of share application money is out of money received from the source of share application money is out of money received from the source of share application money is out of money received from various entities which are listed in Page 61 of the assessment order. various entities which are listed in Page 61 of the assessment order. various entities which are listed in Page 61 of the assessment order. To further establish the creditworthiness, the assessee has submitted the further establish the creditworthiness, the assessee has submitted the further establish the creditworthiness, the assessee has submitted the copy of TR, au copy of TR, audited accounts, balance sheet and P&L a/c. In my dited accounts, balance sheet and P&L a/c. In my considered view what has been doubted is the share application money considered view what has been doubted is the share application money considered view what has been doubted is the share application money received from different entities by M/s received from different entities by M/s Kasturi and not the share and not the share application money received by the appellant application money received by the appellant company from M/s Kasturi. company from M/s Kasturi. Thus, source of source has been challenged. After examining the entire us, source of source has been challenged. After examining the entire us, source of source has been challenged. After examining the entire facts on record, I am of the considered opinion that addition, if any needs facts on record, I am of the considered opinion that addition, if any needs facts on record, I am of the considered opinion that addition, if any needs to be made, it should be made in the hands of M/s.Kasturi Nagesh Pai & to be made, it should be made in the hands of M/s.Kasturi Nagesh Pai & to be made, it should be made in the hands of M/s.Kasturi Nagesh Pai & Co. Pvt. Ltd. and not in the hands of th Co. Pvt. Ltd. and not in the hands of the appellant as the appellant has e appellant as the appellant has established all the three ingredients, ie. identity of the creditor, established all the three ingredients, ie. identity of the creditor, established all the three ingredients, ie. identity of the creditor, creditworthiness and genuineness of the transaction. Hence, the addition creditworthiness and genuineness of the transaction. Hence, the addition creditworthiness and genuineness of the transaction. Hence, the addition of Rs.12,11,00,000/ of Rs.12,11,00,000/- is deleted in the hands of the appellant. However, is deleted in the hands of the appellant. However, the AO is directed to explore taking action in the hands of the lender, ie. directed to explore taking action in the hands of the lender, ie. directed to explore taking action in the hands of the lender, ie. M/s.Kasturi Nagesh Pai & CO. Pvt. Ltd. if the source of money in the hand M/s.Kasturi Nagesh Pai & CO. Pvt. Ltd. if the source of money in the hand M/s.Kasturi Nagesh Pai & CO. Pvt. Ltd. if the source of money in the hand of this company (M/s Kasturi) is in doubt, as per the provisions of the I.T. of this company (M/s Kasturi) is in doubt, as per the provisions of the I.T. of this company (M/s Kasturi) is in doubt, as per the provisions of the I.T. Act. Thus, the ground of appeal no.6 i Act. Thus, the ground of appeal no.6 is allowed.”
20. We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. We find that the Assessing Officer has relevant material on record. We find that the Assessing Officer has relevant material on record. We find that the Assessing Officer has doubted the creditworthiness of M/s Kasturi the creditworthiness of M/s Kasturi only for the reason only for the reason source of money in the hands of said party was source of money in the hands of said party was share application share application money from other 13 companies, whose credential were not verified. money from other 13 companies, whose credential were not verified. money from other 13 companies, whose credential were not verified. The assessee has already filed a copy of ITR The assessee has already filed a copy of ITR and other document and other document in respect of said party. respect of said party. The identity of M/s Kasturi has not been The identity of M/s Kasturi has not been doubted by the AO. Regarding doubted by the AO. Regarding creditworthiness, the ld CIT(A) creditworthiness, the ld CIT(A) observed that the Assessing officer has not mentioned as what observed that the Assessing officer has not mentioned as what observed that the Assessing officer has not mentioned as what happened in the assessment in the case of Kasturi and those 13 happened in the assessment in the case of Kasturi and those 13 happened in the assessment in the case of Kasturi and those 13 parties, which had been termed as shell companies by the parties, which had been termed as shell companies by the parties, which had been termed as shell companies by the investigation wing of Kolkatta. The ld CIT investigation wing of Kolkatta. The ld CIT(A) opined that if source of (A) opined that if source of money is not explained in their hand, then addition warrants in money is not explained in their hand, then addition warrants in money is not explained in their hand, then addition warrants in their case and not in the case of assessee and not in the case of assessee. We are of opinion that if We are of opinion that if M/s Ashtech (India) Pvt. Ltd. 28 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. addition has been already made in the case of Kasturi, then no addition has been already made in the case of Kasturi, then no addition has been already made in the case of Kasturi, then no further addition is required i further addition is required in the case of the assessee. n the case of the assessee. In view of above, in principle w we do not find any error in the order of the Ld. e do not find any error in the order of the Ld. CIT(A) on the issue in dispute CIT(A) on the issue in dispute but for verification of the fact addition but for verification of the fact addition in respect of source of money has been already done in assessment in respect of source of money has been already done in assessment in respect of source of money has been already done in assessment of Kasturi, we restore the matter back to the Assessing Officer. ri, we restore the matter back to the Assessing Officer. The ri, we restore the matter back to the Assessing Officer. ground No. 1 of the appeal of the Revenue is accordingly allowed for ground No. 1 of the appeal of the Revenue is accordingly ground No. 1 of the appeal of the Revenue is accordingly statistical purpose.
13. The ground No. 3 of the appeal of the Revenue The ground No. 3 of the appeal of the Revenue The ground No. 3 of the appeal of the Revenue relates to deletion of disallowance of depreciation disallowance of depreciation of Rs.6,75,000/ of Rs.6,75,000/- by the ld CIT(A) which was made by the AO CIT(A) which was made by the AO with respect to old vehicle sold with respect to old vehicle sold during the year. On the basis of Annexure RM On the basis of Annexure RM-1 found during the 1 found during the course of survey, t course of survey, the Assessing Officer noted that assessee he Assessing Officer noted that assessee company had unaccounted sales of vehicle company had unaccounted sales of vehicles during the assessment s during the assessment year 2018-19. 19. 19. On On On the the the basis basis basis of of of such such such unaccounted unaccounted unaccounted sales sales sales corresponding to assessment year 2018 ing to assessment year 2018-19, the Assessing Officer he Assessing Officer was of the view that in was of the view that in all the probability assessee had all the probability assessee had received unaccounted sale of old unaccounted sale of old vehicles in other years i in other years including the assessment year under consideration. assessment year under consideration. He estimated unaccounted e estimated unaccounted sales of Rs.1,50,000/ sales of Rs.1,50,000/- per vehicle and accordingly accordingly disallowed the depreciation amounting to Rs.6,75,000/ depreciation amounting to Rs.6,75,000/-.
13.1 On further appeal the Ld. CIT(A) deleted the addition observing On further appeal the Ld. CIT(A) deleted the addition observing On further appeal the Ld. CIT(A) deleted the addition observing as under:
M/s Ashtech (India) Pvt. Ltd. 29 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
In ground of appeal
No.5, the appellant is against the disallowance
37. In ground of appeal No.5, the appellant is against the disallowance
37. In ground of appeal No.5, the appellant is against the disallowance of depreciation of Rs.6,75,000/ of depreciation of Rs.6,75,000/- with respect to old vehicles sold during with respect to old vehicles sold during the year. The AO has stated that during the survey proceedings the year. The AO has stated that during the survey proceedings the year. The AO has stated that during the survey proceedings statement of Shri Ravi Shankar statement of Shri Ravi Shankar M. Patel was recorded u/s.131 of the was recorded u/s.131 of the IT. Act wherein he submitted details of old vehicles sold during F. Yrs IT. Act wherein he submitted details of old vehicles sold during F. Yrs IT. Act wherein he submitted details of old vehicles sold during F. Yrs 2017-18 and 2018 18 and 2018-19. According to the AO, on perusal of the statement,
19. According to the AO, on perusal of the statement, it was seen that assessee company had sold old vehicles against it was seen that assessee company had sold old vehicles against it was seen that assessee company had sold old vehicles against which it received proceeds in cash and in cheque. It is further noted in the ceeds in cash and in cheque. It is further noted in the ceeds in cash and in cheque. It is further noted in the assessment order that the Director of the company in his statement assessment order that the Director of the company in his statement assessment order that the Director of the company in his statement offered this amount to tax in respective years. It is further seen by the offered this amount to tax in respective years. It is further seen by the offered this amount to tax in respective years. It is further seen by the AO that during the year AO that during the year under consideration the appellant h under consideration the appellant has sold old vehicles. Accordingly, explanation was called from the appellant. The vehicles. Accordingly, explanation was called from the appellant. The vehicles. Accordingly, explanation was called from the appellant. The appellant strong objection to the extrapolation made with respect to appellant strong objection to the extrapolation made with respect to appellant strong objection to the extrapolation made with respect to statement of sale of vehicles to the present year, before the A.O. statement of sale of vehicles to the present year, before the A.O. statement of sale of vehicles to the present year, before the A.O. However, The AO had issued notices u/s However, The AO had issued notices u/s.133(6) of the I.T. Act to .133(6) of the I.T. Act to different parties for different years to whom old vehicles were sold. But different parties for different years to whom old vehicles were sold. But different parties for different years to whom old vehicles were sold. But none of the parties responded to the AO. The AO has worked out none of the parties responded to the AO. The AO has worked out none of the parties responded to the AO. The AO has worked out average unaccounted sales per vehicle at Rs.1,62,868/ average unaccounted sales per vehicle at Rs.1,62,868/- He has also He has also stated that in A.Y.2014 stated that in A.Y.2014-15 to A.Y.2017-18 accounted sale price of some 18 accounted sale price of some old vehicles were above Rs.1 lac which was mostly below Rs.1 lac in old vehicles were above Rs.1 lac which was mostly below Rs.1 lac in old vehicles were above Rs.1 lac which was mostly below Rs.1 lac in F.Y.2017-18 and F.Y.2018 18 and F.Y.2018-19. The AO has also found that in some
19. The AO has also found that in some A. Yrs assessee has accounted for even cash sales of old vehicles. Also Yrs assessee has accounted for even cash sales of old vehicles. Also Yrs assessee has accounted for even cash sales of old vehicles. Also make, age and mileage of old vehicles which have been sold is not fully age and mileage of old vehicles which have been sold is not fully age and mileage of old vehicles which have been sold is not fully comparable. Considering Considering Considering these these these facts, facts, facts, the the the AO AO AO has has has estimated estimated estimated unaccounted sales of Rs.1,50,000/ unaccounted sales of Rs.1,50,000/-per vehicle, since for the year under per vehicle, since for the year under consideration, the assessee was found to have sold 15 consideration, the assessee was found to have sold 15 consideration, the assessee was found to have sold 15 vehicles. Therefore, total unaccounted sales have been worked out at Therefore, total unaccounted sales have been worked out at Therefore, total unaccounted sales have been worked out at Rs.22,50,000/- -. The AO has also stated that since these are parts of . The AO has also stated that since these are parts of the block of assets under the head "vehicles" and assessee was the block of assets under the head "vehicles" and assessee was the block of assets under the head "vehicles" and assessee was claiming depreciation @30% on this block of asset, unac claiming depreciation @30% on this block of asset, unaccounted sale counted sale from sale of old vehicle is to be reduced from block of assets and from sale of old vehicle is to be reduced from block of assets and from sale of old vehicle is to be reduced from block of assets and accordingly depreciation claimed to that extent was disallowed in the accordingly depreciation claimed to that extent was disallowed in the accordingly depreciation claimed to that extent was disallowed in the assessment order. Accordingly, depreciation worked out at Rs. assessment order. Accordingly, depreciation worked out at Rs. assessment order. Accordingly, depreciation worked out at Rs. 6,75,000/-for A.Y.2014 for A.Y.2014-15 was disallowed by the AO and added back the AO and added back to the total income for the year under consideration. to the total income for the year under consideration. 37.1 During the appellate proceedings, the ld. AR has stated that it has 37.1 During the appellate proceedings, the ld. AR has stated that it has 37.1 During the appellate proceedings, the ld. AR has stated that it has submitted statement containing names of purchaser, PAN, address, submitted statement containing names of purchaser, PAN, address, submitted statement containing names of purchaser, PAN, address, sold vehicle registration number along wit sold vehicle registration number along with mode of payment and h mode of payment and receipt to the AO for verification. receipt to the AO for verification. According to the appellant, it has According to the appellant, it has received sale proceeds of vehicles in cheque and bill record of receipts in received sale proceeds of vehicles in cheque and bill record of receipts in received sale proceeds of vehicles in cheque and bill record of receipts in books of accounts. No lacuna has been found by the AO during the books of accounts. No lacuna has been found by the AO during the books of accounts. No lacuna has been found by the AO during the assessment proceedings assessment proceedings. 37.2 On careful consideration I find that entire work of the AO for the 37.2 On careful consideration I find that entire work of the AO for the 37.2 On careful consideration I find that entire work of the AO for the year under consideration, work and extrapolation of figures related to year under consideration, work and extrapolation of figures related to year under consideration, work and extrapolation of figures related to subsequent years. He has elearly mentioned that subsequent years. He has elearly mentioned that "Assessee has sold vehicle and by extrapolating the findings "Assessee has sold vehicle and by extrapolating the findings "Assessee has sold vehicle and by extrapolating the findings in F.Y.2017 F.Y.2017-18 and 2018-19 in these years, the unaccounted sales 19 in these years, the unaccounted sales
M/s Ashtech (India) Pvt. Ltd. 30 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. on vehicle sold in year under consideration has been on vehicle sold in year under consideration has been on vehicle sold in year under consideration has been determined." determined." 37.3 Thus, it is apparent that no evidence of any unaccounted sales of Thus, it is apparent that no evidence of any unaccounted sales of Thus, it is apparent that no evidence of any unaccounted sales of vehicle has been found for F.Y. 2013 vehicle has been found for F.Y. 2013-14 relevant to A. 14 relevant to A.Y. 2014-15. Moreover, no statement was recorded indicating unaccounted sales Moreover, no statement was recorded indicating unaccounted sales Moreover, no statement was recorded indicating unaccounted sales during the year. Hence, the disallowance of depreciation of sale of old during the year. Hence, the disallowance of depreciation of sale of old during the year. Hence, the disallowance of depreciation of sale of old vehicle is unjustified and deserves to be deleted. Thus, the addition of vehicle is unjustified and deserves to be deleted. Thus, the addition of vehicle is unjustified and deserves to be deleted. Thus, the addition of Rs.6,75,000/- is deleted. The grou is deleted. The ground of appeal no.5 is allowed. nd of appeal no.5 is allowed.” 13.2 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that only evidence of unaccounted sale only evidence of unaccounted sale of old vehicles has has been found in respect of assessment ye respect of assessment year 2018-19 and no documentary evidence 19 and no documentary evidences have been found for the year under consideration. The Assessing have been found for the year under consideration. The Assessing have been found for the year under consideration. The Assessing Officer has merely extrapolated Officer has merely extrapolated such unaccounted sale on the basis such unaccounted sale on the basis of presumption that assessee would have earned unaccounted cash of presumption that assessee would have earned unaccounted cash of presumption that assessee would have earned unaccounted cash on the sale of old vehicle during the year under consideration. The hicle during the year under consideration. The hicle during the year under consideration. The Ld. CIT(A) has rejected this contention of the Assessing Officer and Ld. CIT(A) has rejected this contention of the Assessing Officer and Ld. CIT(A) has rejected this contention of the Assessing Officer and deleted the addition deleted the addition made merely on the basis of the extrapolation merely on the basis of the extrapolation of the figures of the subsequent year. In our opinion, finding of the of the figures of the subsequent year. In our opinion of the figures of the subsequent year. In our opinion Ld. CIT(A) on the issue in dispute is well reasoned and no CIT(A) on the issue in dispute is well reasoned and no CIT(A) on the issue in dispute is well reasoned and no interference is required o interference is required on our part. Accordingly, we upho n our part. Accordingly, we uphold the finding of the Ld. CIT(A) on the issue finding of the Ld. CIT(A) on the issue and ground No.
3. No. 3 of appeal of the Revenue is accordingly dismissed. the Revenue is accordingly dismissed.
ITA No. 3221/Mum/2023 No. 3221/Mum/2023
M/s Ashtech (India) Pvt. Ltd. 31 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Now we take up the appeal ow we take up the appeal of the assessee for assessment year for assessment year 2015-16. The ground 16. The grounds raised by the assessee are reproduced as raised by the assessee are reproduced as under:
1. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making subject, the learned Income Tax officer erred in making subject, the learned Income Tax officer erred in making addition of Rs.5,35,72,977/ Rs.5,35,72,977/- being alleged bogus purchase of fuel / diesel & the being alleged bogus purchase of fuel / diesel & the learned CIT (Appeal) erred in confirming the disallowance of learned CIT (Appeal) erred in confirming the disallowance of learned CIT (Appeal) erred in confirming the disallowance of Rs.53,52,729/- - being 10 % of Rs. 5,35,72,977/-purchases of alleged purchases of alleged bogus fuel/ diesel. bogus fuel/ diesel. In view of the facts and ci In view of the facts and circumstances of the case and law on the rcumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
2. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of Rs.14,58,745/- - on account of alleged bogus tyre purchase bills & the purchase bills & the learned CIT (Appeal) CIT (Appeal) erred in upholding the addition of Rs.14,58,745/ upholding the addition of Rs.14,58,745/- on account of alleged bogus tyre purchase on account of alleged bogus tyre purchase bills without without correct appreciation of facts and law on the subject. appreciation of facts and law on the subject. In view of the facts and circumstances of the case an In view of the facts and circumstances of the case and law on the d law on the subject, the same may be deleted. subject, the same may be deleted. 3. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred subject, the learned assessing officer erred in making disallowance disallowance of Rs.12,20,666/- - on account of unsubstantiated expenses & the learned expenses & the learned CIT (Appeal) erred erred in confirming disallowance of Rs.1,22,066/ confirming disallowance of Rs.1,22,066/- being 10% of Rs.12,20,666/ 10% of Rs.12,20,666/- on account of unsubstantiated expenses of expenses of without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case In view of the facts and circumstances of the case and law on t and law on the subject, the same may be deleted. subject, the same may be deleted. 14.1 The ground No The ground Nos. 1 to 3 of the appeal being identical to . 1 to 3 of the appeal being identical to grounds raised by the assessee in assessment year 2013 raised by the assessee in assessment year 2013 raised by the assessee in assessment year 2013-14 ,therefore, following our find therefore, following our finding in assessment year 2013 ing in assessment year 2013-14, the ground Nos. 1 to 3 of the appeal of the assessee for the year under . 1 to 3 of the appeal of the assessee for the year under . 1 to 3 of the appeal of the assessee for the year under consideration are decided consideration are decided mutatis mutandis.
M/s Ashtech (India) Pvt. Ltd. 32 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Now, we take up the appeal we take up the appeal of the assessee of the assessee for assessment year 2016-17. The ground 17. The grounds raised by the assessee are reproduced raised by the assessee are reproduced as under:
1. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of Rs.9,75,79,573/ Rs.9,75,79,573/- being alleged bogus purchase of fuel / diesel & being alleged bogus purchase of fuel / diesel & the learned CIT (Appeal) erred in confirming the the learned CIT (Appeal) erred in confirming the disallowance of disallowance of Rs.97,57,957/- - being 10 % of Rs. 9,75,79,573/-purchases of purchases of alleged bogus fuel/ diesel. alleged bogus fuel/ diesel. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. same may be deleted.
2. On the facts and in the circumstances On the facts and in the circumstances of the case and law on the and law on the subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of Rs.24,14,200/- - on account of alleged bogus tyre purchase bills & on account of alleged bogus tyre purchase bills & the learned CIT CIT (Appeal) erred in upholding the addition of upholding the addition of Rs.24,14,200/- - on account of alleged bogus tyre purchase purchase bills without correct appreciation of facts and law on the subject. correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted. 3. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred e learned assessing officer erred in making disallowance disallowance of Rs.13,64,000/ Rs.13,64,000/- on account of unsubstantiated expenses.& the expenses.& the learned learned CIT CIT (Appeal) (Appeal) erred in confirming confirming disallowance of disallowance of Rs.1,36,400/- being 10% of Rs.13,64,000/- on account of on account of unsubstantiated unsubstantiated expenses of without correct appreciation of facts s of without correct appreciation of facts and law on the subject. and law on the subject. In view of the facts and circumstances of the case In view of the facts and circumstances of the case and law on the and law on the subject, the same may be deleted. subject, the same may be deleted.” 15.1 The ground No The ground Nos. 1 to 3 of the appeal being identical to . 1 to 3 of the appeal being identical to grounds raised by the asse raised by the assessee in assessment year 2013 see in assessment year 2013-14, therefore, following our find therefore, following our finding in assessment year 2013 ing in assessment year 2013-14, the M/s Ashtech (India) Pvt. Ltd. 33 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
ground Nos. 1 to 3 of the appeal of the assessee for the year under . 1 to 3 of the appeal of the assessee for the year under . 1 to 3 of the appeal of the assessee for the year under consideration are decided consideration are decided mutatis mutandis. ITA No. 3233/Mum/2023
Now, we take up the appeal for assessment year 2017 we take up the appeal for assessment year 2017-18. The we take up the appeal for assessment year 2017 grounds raised by the assessee are reproduced as raised by the assessee are reproduced as under: under:
1. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of Rs.9,74,24,558/ 24,558/- being alleged bogus purchase of fuel / diesel & being alleged bogus purchase of fuel / diesel & the learned CIT (Appeal) erred in confirming the disallowance of the learned CIT (Appeal) erred in confirming the disallowance of the learned CIT (Appeal) erred in confirming the disallowance of Rs.97,42,455/- - being 10 % of Rs. 9,74,24,558/-purchases of purchases of alleged bogus fuel/ diesel. alleged bogus fuel/ diesel. In view of the facts and circumstances of the c In view of the facts and circumstances of the case and law on the ase and law on the subject, the same may be deleted. subject, the same may be deleted.
2. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of Rs.34,16,885/- - on account of alleged bogus tyre purchase bills & on account of alleged bogus tyre purchase bills & the learned CIT (Appeal) CIT (Appeal) erred in upholding the addition of upholding the addition of Rs.34,16,885/- - on account of alleged bogus tyre purchase on account of alleged bogus tyre purchase bills without correct appreciation of facts and law on the subject. correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted. 3. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred subject, the learned assessing officer erred in making disallowance disallowance of Rs.4,84,000/ Rs.4,84,000/- on account of unsubstantiated expenses & the on account of unsubstantiated expenses & the learned learned CIT CIT (Appeal) (Appeal) erred in confirming disallowance of disallowance of Rs.48,400/-being being 10% 10% of of Rs.4,84,000/-on Rs.4,84,000/ account account of unsubstantiated expenses of unsubstantiated expenses of without correct appreciation of facts appreciation of facts and law on the subject. and law on the subject. In view of the facts and circumstances of the case In view of the facts and circumstances of the case and law on the and law on the subject, the sam subject, the same may be deleted.” 16.1 The ground No The ground Nos. 1 to 3 of the appeal being identical to . 1 to 3 of the appeal being identical to grounds raised by the assessee in assessment year 2013 raised by the assessee in assessment year 2013 raised by the assessee in assessment year 2013-14 ,therefore, following our find therefore, following our finding in assessment year 2013 ing in assessment year 2013-14, the M/s Ashtech (India) Pvt. Ltd. 34 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
ground Nos. 1 to 3 of the appeal of the assessee for the year under . 1 to 3 of the appeal of the assessee for the year under . 1 to 3 of the appeal of the assessee for the year under consideration are decided consideration are decided mutatis mutandis.
ITA No. 3232/Mum/2023 and . 3232/Mum/2023 and ITA No. 3028/Mum/2023 . 3232/Mum/2023 and ITA No. 3028/Mum/2023
Now we take up the appeal of the assessee and Revenue for Now we take up the appeal of the assessee and Revenue for Now we take up the appeal of the assessee and Revenue for assessment year 2018 assessment year 2018-19. The grounds of appeal of the assessee eal of the assessee are reproduced as under: are reproduced as under:
1. On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the On the facts and in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of subject, the learned Income Tax officer erred in making addition of Rs.10,02,72,170/ Rs.10,02,72,170/- being alleged bogus purchase of fuel / diesel & the being alleged bogus purchase of fuel / diesel & the learned CIT (Appeal) erred in confirming the disallowance of Rs. ned CIT (Appeal) erred in confirming the disallowance of Rs. ned CIT (Appeal) erred in confirming the disallowance of Rs. 1,00,27,217/- being 10 % of Rs. 10,02,72,170/-purchases of alleged purchases of alleged bogus fuel/ diesel. bogus fuel/ diesel. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted.
2. On the facts and in the circumstances of the case and law on the e facts and in the circumstances of the case and law on the e facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of subject, the learned assessing officer erred in making additions of Rs.34,58,483/- - on account of alleged bogus tyre purchase bills & the on account of alleged bogus tyre purchase bills & the learned CIT (Appeal) erred in upholding the addition of Rs. learned CIT (Appeal) erred in upholding the addition of Rs. learned CIT (Appeal) erred in upholding the addition of Rs.34,58,483/- on account of alleged bogus tyre purchase bills without correct on account of alleged bogus tyre purchase bills without correct on account of alleged bogus tyre purchase bills without correct appreciation of facts and law on the subject. appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the In view of the facts and circumstances of the case and law on the subject, the same may be deleted. subject, the same may be deleted. 17.1 The ground No The ground Nos. 1 to 3 of the appeal of assessee of assessee being identical to grounds s raised by the assessee in assessment year raised by the assessee in assessment year 2013-14 ,therefore, following our finding in assessment year 2013 therefore, following our finding in assessment year 2013 therefore, following our finding in assessment year 2013- 14 , the ground Nos. 1 to 3 of the appeal of the assessee for the year . 1 to 3 of the appeal of the assessee for the year . 1 to 3 of the appeal of the assessee for the year under consideration are decided under consideration are decided mutatis mutandis.
18. The grounds raised by the Revenue in assessment year 2018 raised by the Revenue in assessment year 2018 raised by the Revenue in assessment year 2018- 19 are reproduced as under: 19 are reproduced as under:
M/s Ashtech (India) Pvt. Ltd. 35 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
Whether on the facts and in the circumstances of the case and Whether on the facts and in the circumstances of the case and Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) is justified in deleting the disallowance of bogus law, the Ld. CIT (A) is justified in deleting the disallowance of bogus law, the Ld. CIT (A) is justified in deleting the disallowance of bogus loan without appreciating the facts that the identity, creditworthiness loan without appreciating the facts that the identity, creditworthiness loan without appreciating the facts that the identity, creditworthiness and genuineness was not established by the assessee with regard to and genuineness was not established by the assessee with regard to and genuineness was not established by the assessee with regard to the alleged party . the alleged party .
2. Whether on the fac Whether on the facts and in the circumstances of the case and in ts and in the circumstances of the case and in law, the Ld. CIT (A) is justified in deleting the disallowance of law, the Ld. CIT (A) is justified in deleting the disallowance of law, the Ld. CIT (A) is justified in deleting the disallowance of depreciation on unaccounted sales of old vehicles without appreciating depreciation on unaccounted sales of old vehicles without appreciating depreciation on unaccounted sales of old vehicles without appreciating the facts that the genuineness of the purchaser of old vehicles was not the facts that the genuineness of the purchaser of old vehicles was not the facts that the genuineness of the purchaser of old vehicles was not established by the assessee established by the assessee. 18.1 The ground No. 1 of the appeal of the Revenue relates to The ground No. 1 of the appeal of the Revenue relates to The ground No. 1 of the appeal of the Revenue relates to addition of Rs.4,74,45,000/ addition of Rs.4,74,45,000/- addition of Rs.3,00,82,390/ addition of Rs.3,00,82,390/- on account of bogus loan u/s 68 of the Act. account of bogus loan u/s 68 of the Act.
18.2 Briefly stated facts qua the issue in dispute are that th Briefly stated facts qua the issue in dispute are that th Briefly stated facts qua the issue in dispute are that the Assessing Officer observed credit from two parties namely M/s Assessing Officer observed credit from two parties namely M/s Assessing Officer observed credit from two parties namely M/s Metropolitan Distributors Pvt. Ltd. (Rs.1,35,45,000/- plus interest Metropolitan Distributors Pvt. Ltd. (Rs.1,35,45,000/ Metropolitan Distributors Pvt. Ltd. (Rs.1,35,45,000/ of Rs. 7,83,45,000/ of Rs. 7,83,45,000/-) and M/s Triumph Texim Put. Ltd. ) and M/s Triumph Texim Put. Ltd. (Rs.1,48,00,000/-plus interest of Rs. 9,54,260/ plus interest of Rs. 9,54,260/-). According to the ). According to the Assessing sessing sessing Officer, Officer, Officer, these these these credits credits credits were were were loans loans loans in in in nature nature nature of accommodation entries because both those companies were accommodation entries because both those companies were accommodation entries because both those companies were controlled and operated by entr controlled and operated by entry provider sh Prakash Jajodia, y provider sh Prakash Jajodia, therefore, he asked the assessee to discharge burden u/s 68 of the asked the assessee to discharge burden u/s 68 of the asked the assessee to discharge burden u/s 68 of the Act in respect of those credits under f those credits under reference. In response the . In response the assessee submitted that those two parties were the distributors of assessee submitted that those two parties were the distributors of assessee submitted that those two parties were the distributors of the assessee since 2010 and the amount received was as a security the assessee since 2010 and the amount received was the assessee since 2010 and the amount received was deposit under distribution agreement. The assessee also filed copy deposit under distribution agreement. The assessee also filed copy deposit under distribution agreement. The assessee also filed copy of the distribution agreements. It was explained by the assessee agreements. It was explained by the assessee agreements. It was explained by the assessee that the source of the funds in hands of the distributors was by way that the source of the funds in hands of the distributors was by way that the source of the funds in hands of the distributors was by way
M/s Ashtech (India) Pvt. Ltd. 36 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. of receipt from sale debt receipt from sale debtors. The copies of the sales registers and . The copies of the sales registers and bank statement of of assessee also submitted along with along with other documentary evidence to establish identity documentary evidence to establish identity & creditworthiness creditworthiness of those two concerns and genuineness of the transactions. However, and genuineness of the transactions. However, and genuineness of the transactions. However, the Assessing Officer Assessing Officer was not satisfied with the contention of the was not satisfied with the contention of the assessee. According to him the shareholders of those two co ccording to him the shareholders of those two co ccording to him the shareholders of those two concerns were found to be dummy directors controlled by accommodation dummy directors controlled by accommodation dummy directors controlled by accommodation entry provider Sh Prakash Jajodia Prakash Jajodia. The Assessing Officer referred to . The Assessing Officer referred to the statement of Shri Prakash Jadodia recorded u/s 131 of the Act the statement of Shri Prakash Jadodia recorded u/s 131 of the Act the statement of Shri Prakash Jadodia recorded u/s 131 of the Act dated 26.08.2014, the statement of Shri Diparkar Roy, director of dated 26.08.2014, the statement of Shri Diparkar Roy, dated 26.08.2014, the statement of Shri Diparkar Roy, M/s Metropolitan Distributors Pvt. Ltd. recorded u/s 131 dated M/s Metropolitan Distributors Pvt. Ltd. recorded u/s 131 dated M/s Metropolitan Distributors Pvt. Ltd. recorded u/s 131 dated 07.08.2014 and statement of Shri Dilip Bey, director of M/s 07.08.2014 and statement of Shri Dilip Bey, director of M/s 07.08.2014 and statement of Shri Dilip Bey, director of M/s Triumph Trexim Pvt. Ltd. recorded u/s 131 of the Act dated Triumph Trexim Pvt. Ltd. recorded u/s 131 of the Act dated Triumph Trexim Pvt. Ltd. recorded u/s 131 of the Act dated 07.08.2014. Based on those statements, the Assessing Officer held 07.08.2014. Based on those statements, the Assessing Officer 07.08.2014. Based on those statements, the Assessing Officer that both the concern that both the concerns were accommodation entry providers were accommodation entry providers and accordingly he treated the credit totaling to Rs.2,83,45,000/- accordingly he treated the credit totaling to Rs.2,83,45,000/ accordingly he treated the credit totaling to Rs.2,83,45,000/ received from these two concerns as unexplained cash credit and received from these two concerns as unexplained cash credit and received from these two concerns as unexplained cash credit and further interest paid on loans/deposits amounting to amounting to further interest paid on loans/deposits amounting to amounting further interest paid on loans/deposits amounting to amounting Rs.17,37,390/- was also disallowed. The Ld. CIT(A) however deleted was also disallowed. The Ld. CIT(A) however deleted was also disallowed. The Ld. CIT(A) however deleted the additions observing as under: the additions observing as under:
61.3 During appellate proceedings, the appellant has primarily stated 61.3 During appellate proceedings, the appellant has primarily stated 61.3 During appellate proceedings, the appellant has primarily stated that that that sufficient sufficient sufficient documentary documentary documentary evidences evidences evidences were were were submitted submitted submitted during during during assessment proceedin assessment proceedings to establish identity of the two creditors, their gs to establish identity of the two creditors, their creditworthiness and genuineness of transactions. Further, notices creditworthiness and genuineness of transactions. Further, notices creditworthiness and genuineness of transactions. Further, notices issued u/s 133(6) of the Act to these parties were complied with. issued u/s 133(6) of the Act to these parties were complied with. issued u/s 133(6) of the Act to these parties were complied with. According to the appellant, these amounts are indeed security deposit According to the appellant, these amounts are indeed security deposit According to the appellant, these amounts are indeed security deposit from these two distributors and source of source has been explained from these two distributors and source of source has been explained from these two distributors and source of source has been explained
M/s Ashtech (India) Pvt. Ltd. 37 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. and demonstrated before the AO. According to the appellant, when the and demonstrated before the AO. According to the appellant, when the and demonstrated before the AO. According to the appellant, when the A.O. has accepted the sales credits received by it as genuine, there is A.O. has accepted the sales credits received by it as genuine, there is A.O. has accepted the sales credits received by it as genuine, there is no reason to hold the deposits received from th no reason to hold the deposits received from these parties as bogus or ese parties as bogus or non-genuine. Moreover, the sales register of the distributors indicated genuine. Moreover, the sales register of the distributors indicated genuine. Moreover, the sales register of the distributors indicated that the sales are made to reputed public listed company. that the sales are made to reputed public listed company. The appellant The appellant has also relied on certain judicial decisions. On careful consideration, I has also relied on certain judicial decisions. On careful consideration, I has also relied on certain judicial decisions. On careful consideration, I find merit in the submission of the appellant which is well supported by the submission of the appellant which is well supported by the submission of the appellant which is well supported by documentary evidences. I agree with the A.O. that when sales credit documentary evidences. I agree with the A.O. that when sales credit documentary evidences. I agree with the A.O. that when sales credit undertaken by these two distributors are not disturbed by the A.O., undertaken by these two distributors are not disturbed by the A.O., undertaken by these two distributors are not disturbed by the A.O., there is no reason to doubt the loans/deposits taken from th there is no reason to doubt the loans/deposits taken from th there is no reason to doubt the loans/deposits taken from these two concerns. Moreover, no adverse finding has been given by the A.O. with concerns. Moreover, no adverse finding has been given by the A.O. with concerns. Moreover, no adverse finding has been given by the A.O. with respect to documentary evidences produced to establish identity, respect to documentary evidences produced to establish identity, respect to documentary evidences produced to establish identity, creditworthiness of these two parties and genuineness of the creditworthiness of these two parties and genuineness of the creditworthiness of these two parties and genuineness of the transactions. 61.4 Identical issue of taking loan/d 61.4 Identical issue of taking loan/deposit from M/s Metropolitan eposit from M/s Metropolitan Distributors Pvt. Distributors Pvt. Ltd. came for consideration of the undersigned in Ltd. came for consideration of the undersigned in previous years too. After discussing the merit of the issue in hand, it previous years too. After discussing the merit of the issue in hand, it previous years too. After discussing the merit of the issue in hand, it has been held that the addition of loan/deposit taken from this concern has been held that the addition of loan/deposit taken from this concern has been held that the addition of loan/deposit taken from this concern is unjustified. Accordingly, the addition in the appellant's hand was Accordingly, the addition in the appellant's hand was deleted. Same situation exists for this year too. At the same time, I find deleted. Same situation exists for this year too. At the same time, I find deleted. Same situation exists for this year too. At the same time, I find that loan/deposit taken from M/s Trump Trexim Pvt. Ltd. is also on the that loan/deposit taken from M/s Trump Trexim Pvt. Ltd. is also on the that loan/deposit taken from M/s Trump Trexim Pvt. Ltd. is also on the same footing and the situation, nature of evidences, fi footing and the situation, nature of evidences, findings of the A.O. ndings of the A.O. are also same as that of M/s Metropolitan. Considering totality of facts are also same as that of M/s Metropolitan. Considering totality of facts are also same as that of M/s Metropolitan. Considering totality of facts and circumstances of and circumstances of the issue involved, it is held that addition of issue involved, it is held that addition of unsecured loans/ deposits and interest unsecured loans/ deposits and interest paid of Rs. 3,00,82,390/ paid of Rs. 3,00,82,390/- is uncalled for and hence it i uncalled for and hence it is deleted. However, the AO may explore the s deleted. However, the AO may explore the possibility of reopening of the assessments of M/s Metropolitan possibility of reopening of the assessments of M/s Metropolitan possibility of reopening of the assessments of M/s Metropolitan Distributors Pvt. Ltd. and M/s Triumph Trexim Pvt. Ltd. for the relevant Distributors Pvt. Ltd. and M/s Triumph Trexim Pvt. Ltd. for the relevant Distributors Pvt. Ltd. and M/s Triumph Trexim Pvt. Ltd. for the relevant A. Yrs as the A.O. has expressed his doubt about the genuineness of A. Yrs as the A.O. has expressed his doubt about the genuineness of A. Yrs as the A.O. has expressed his doubt about the genuineness of such shareholders. Thus, the ground of appeal no. 6 is Allowed. reholders. Thus, the ground of appeal no. 6 is Allowed. reholders. Thus, the ground of appeal no. 6 is Allowed.” 18.3 Before Before Before us, us, us, the the the Ld. Ld. Ld. Departmental Departmental Departmental Representative Representative Representative (DR) (DR) (DR) submitted that assessee has failed ted that assessee has failed in discharging its onus u/s 68 of its onus u/s 68 of the Act and therefore, the Ld. Assessing Officer is justified in the Act and therefore, the Ld. Assessing Officer is justified in the Act and therefore, the Ld. Assessing Officer is justified in making additions u/s 68 of the Act in view of the statement dditions u/s 68 of the Act in view of the statements of the dditions u/s 68 of the Act in view of the statement director of the said concerns. director of the said concerns.
18.4 On the other hand, the Ld. the other hand, the Ld. Counsel for the assessee submitted for the assessee submitted that in respect of both the parties that in respect of both the parties, copy of the income tax return, copy of the income tax return, financial statement and confirmation of the account along with the financial statement and confirmation of the account along with the financial statement and confirmation of the account along with the M/s Ashtech (India) Pvt. Ltd. 38 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. bank statement and distribution agreement have already been filed bank statement and distribution agreement have already been filed bank statement and distribution agreement have already been filed before the Assessing Officer. He further submitted notices issued to before the Assessing Officer. He further submitted notices issued to before the Assessing Officer. He further submitted notices issued to the above parties u/s 1 the above parties u/s 133(6) of the Act were already complied by 33(6) of the Act were already complied by those parties and therefore, the assessee has discharged its onus those parties and therefore, the assessee has discharged those parties and therefore, the assessee has discharged u/s 68 of the Act. The Ld. counsel further relied on the decision of u/s 68 of the Act. The Ld. counsel further relied on the decision of u/s 68 of the Act. The Ld. counsel further relied on the decision of the jurisdictional high court in the case of PCIT v. Ami Industries the jurisdictional high court in the case of PCIT v. the jurisdictional high court in the case of PCIT v. (India) Pvt. Ltd. (2020) 424 ITR 219 (Bombay) wherein, the appeal of . Ltd. (2020) 424 ITR 219 (Bombay) wherein, the appeal of . Ltd. (2020) 424 ITR 219 (Bombay) wherein, the appeal of the Revenue was dismissed for the reason that assessee had the Revenue was dismissed for the reason that assessee had the Revenue was dismissed for the reason that assessee had furnished the copy of the income furnished the copy of the income-tax return as well as copies of tax return as well as copies of bank account in which the share application money was deposited bank account in which the share application money bank account in which the share application money in order to prove the genuineness of the transaction. The Ld. the genuineness of the transaction. The Ld. the genuineness of the transaction. The Ld. counsel also relied on the decision of the Hon’ble Jurisdictional counsel also relied on the decision of the Hon’ble Jurisdictional counsel also relied on the decision of the Hon’ble Jurisdictional High Court in the case of PCIT v. Realvalue Realtors Realvalue Realtors Pvt. Ltd. High Court in the case of (2020) 113 taxmann.com 62 (2020) 113 taxmann.com 62.
18.5 We have heard rival submission of the part We have heard rival submission of the parties and perused the ies and perused the relevant material on record. The issue in dispute is in respect of relevant material on record. The issue in dispute is in respect of relevant material on record. The issue in dispute is in respect of deposit received from two parties namely M/s Metropolitan deposit received from two parties namely M/s Metropolitan deposit received from two parties namely M/s Metropolitan Distributors Pvt. Ltd. and Triumph Texim Pvt. Ltd. According to the Distributors Pvt. Ltd. and Triumph Texim Pvt. Ltd. According to the Distributors Pvt. Ltd. and Triumph Texim Pvt. Ltd. According to the assessee these two parties are the distribu wo parties are the distributors of the assessee and of the assessee and sum received are deposits against the distribution agreement. are deposits against the distribution agreement. The are deposits against the distribution agreement. ld counsel for the assessee referred to distributorship agreement ld counsel for the assessee referred to distributorship agreement ld counsel for the assessee referred to distributorship agreement with those two parties alongwith their copy of account in the books with those two parties alongwith their copy of account in the books with those two parties alongwith their copy of account in the books of the assessee, which are avai of the assessee, which are available from page 72 to 132 of the lable from page 72 to 132 of the paperbook. As per the distributorship agreement Metropolitan paperbook. As per the distributorship agreement Metropolitan paperbook. As per the distributorship agreement Metropolitan
M/s Ashtech (India) Pvt. Ltd. 39 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. distributor p ltd was appointed distributor of Fly Ash for the Delhi was appointed distributor of Fly Ash for the Delhi was appointed distributor of Fly Ash for the Delhi region and M/s Triump Trexin p Ltd was appointed distributor of region and M/s Triump Trexin p Ltd was appointed distributor of region and M/s Triump Trexin p Ltd was appointed distributor of Fly Ash for Chennai region. T Fly Ash for Chennai region. The copy of account of those two parties he copy of account of those two parties shows that various transactions of sale shows that various transactions of sale are recorded during the year recorded during the year through those two parties. through those two parties. We find that the sums of money received We find that the sums of money received from those parties against the sales have not been doubted by the parties against the sales have not been doubted by the parties against the sales have not been doubted by the Assessing Officer and therefore, we do not find any reason for cer and therefore, we do not find any reason for cer and therefore, we do not find any reason for specifying the sum received from those two parties against the specifying the sum received from those two parties against the specifying the sum received from those two parties against the deposits for the distribution agreement deposits for the distribution agreement as unexplained cash credit as unexplained cash credit. Both the parties have have filed all the documents to support the filed all the documents to support the identity, creditworthiness and genuineness of the transaction. tworthiness and genuineness of the transaction. tworthiness and genuineness of the transaction. Further, in respect of statement by the director of the respective Further, in respect of statement by the director of the respective Further, in respect of statement by the director of the respective parties the Ld. CIT(A) has recommended parties the Ld. CIT(A) has recommended for taking action for taking action of reassessment in their hand. In our opinion there is no infirmity in reassessment in their hand. In our opinion there is no infirmity in reassessment in their hand. In our opinion there is no infirmity in the finding of the Ld. CIT(A) on the issue in dispute and f the Ld. CIT(A) on the issue in dispute and f the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground No. 1 of the appeal of we uphold the same. The ground No. 1 of the appeal of we uphold the same. The ground No. 1 of the appeal of the Revenue is accordingly dismissed. the Revenue is accordingly dismissed.
18.6 The ground No. 2 of the appeal of the Revenue relates to The ground No. 2 of the appeal of the Revenue relates to The ground No. 2 of the appeal of the Revenue relates to disallowance of depreciation on unaccounted disallowance of depreciation on unaccounted sales of old vehicles in sales of old vehicles in this regard the relevant finding of the Ld. CIT(A) is reproduced as this regard the relevant finding of the Ld. CIT(A) is reproduced as this regard the relevant finding of the Ld. CIT(A) is reproduced as under:
“59. In this ground, disallowance of depreciation on sale of vehicle during 59. In this ground, disallowance of depreciation on sale of vehicle during 59. In this ground, disallowance of depreciation on sale of vehicle during the year under consideration, i.e., Rs.29,30,168/ the year under consideration, i.e., Rs.29,30,168/- has been challenged. has been challenged. During the course of survey proceedings statement of oath of Shri the course of survey proceedings statement of oath of Shri the course of survey proceedings statement of oath of Shri Ravishankar M Patel was recorded. He stated that it relates to sale of old Ravishankar M Patel was recorded. He stated that it relates to sale of old Ravishankar M Patel was recorded. He stated that it relates to sale of old
M/s Ashtech (India) Pvt. Ltd. 40 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos. vehicles where cash was received to the extent of Rs.43,10,002/ vehicles where cash was received to the extent of Rs.43,10,002/ vehicles where cash was received to the extent of Rs.43,10,002/- This amount was not accounted for during the year under c amount was not accounted for during the year under consideration. This onsideration. This statement was further confirmed by Shri Satish Mandhania, Director of the statement was further confirmed by Shri Satish Mandhania, Director of the statement was further confirmed by Shri Satish Mandhania, Director of the company. It is further stated by the AO in para 8.9 that the assessee company. It is further stated by the AO in para 8.9 that the assessee company. It is further stated by the AO in para 8.9 that the assessee company had given details of only 24 vehicles which were sold during the company had given details of only 24 vehicles which were sold during the company had given details of only 24 vehicles which were sold during the year. Hence, accordi Hence, according to the AO even cheque containing sales of ng to the AO even cheque containing sales of remaining 6 vehicles were not accounted for by the assessee company. remaining 6 vehicles were not accounted for by the assessee company. remaining 6 vehicles were not accounted for by the assessee company. Thus, the total consideration of these 6 vehicles in cheque was Thus, the total consideration of these 6 vehicles in cheque was Thus, the total consideration of these 6 vehicles in cheque was Rs.1,50,000/-. Finally, the AO has computed the total . Finally, the AO has computed the total sales receipts from sales receipts from old vehicles which are not accounted for in the books of account at vehicles which are not accounted for in the books of account at vehicles which are not accounted for in the books of account at Rs.44,60,002/- -. The AO has also stated that notice u/s.133(6) issued to . The AO has also stated that notice u/s.133(6) issued to various parties were not complied with. Taking into account these various parties were not complied with. Taking into account these various parties were not complied with. Taking into account these unaccounted sales of old vehicles, the depreciation of unaccounted sales of old vehicles, the depreciation of Rs.29,30,168/ Rs.29,30,168/- has been disallowed and added back to the income of the appellant. been disallowed and added back to the income of the appellant. been disallowed and added back to the income of the appellant. 59.1 During the appellate proceedings the appellant has stated that the 59.1 During the appellate proceedings the appellant has stated that the 59.1 During the appellate proceedings the appellant has stated that the company has sold 24 vehicles only for which various details were given to company has sold 24 vehicles only for which various details were given to company has sold 24 vehicles only for which various details were given to the AO. These sales proceed the AO. These sales proceeds were in cheque and duly recorded in the s were in cheque and duly recorded in the books of accounts. No further submission/details were provided by the books of accounts. No further submission/details were provided by the books of accounts. No further submission/details were provided by the appellant. In my considered view, the AO's action of disallowance of appellant. In my considered view, the AO's action of disallowance of appellant. In my considered view, the AO's action of disallowance of depreciation on sale of old vehicles during F.Y.2017 depreciation on sale of old vehicles during F.Y.2017-18 is fully justified 18 is fully justified as it is based on statement recorded during the course of survey proceedings it is based on statement recorded during the course of survey proceedings it is based on statement recorded during the course of survey proceedings and there is no guess work or extrapolation. Considering these facts, the and there is no guess work or extrapolation. Considering these facts, the and there is no guess work or extrapolation. Considering these facts, the disallowance of depreciation of Rs.29,30,168/ disallowance of depreciation of Rs.29,30,168/- is confirmed. Thus, ground is confirmed. Thus, ground of appeal no. 3 is dismissed. of appeal no. 3 is dismissed.” 18.7 We find that the Ld. CIT(A) We find that the Ld. CIT(A) has already sustained the has already sustained the disallowance of depreciation of Rs.29,30,168/ disallowance of depreciation of Rs.29,30,168/- in respect of sale of in respect of sale of old vehicles during the financial year 2017 old vehicles during the financial year 2017-18 and therefore, there 18 and therefore, there is no reason for the Revenue to challenge his finding for the year is no reason for the Revenue to challenge his finding is no reason for the Revenue to challenge his finding under consideration. A under consideration. As far as depreciation in relation to sale of s far as depreciation in relation to sale of old vehicles in earlier years, w vehicles in earlier years, we have already deleted the depreciation in e have already deleted the depreciation in earlier years and therefore, depreciation in relation to WDV of earlier years and therefore, depreciation in relation to WDV of earlier years and therefore, depreciation in relation to WDV of earlier years also cannot be sustained in t earlier years also cannot be sustained in the year under he year under consideration. Accordingly, disallowance of deprecation in respect of consideration. Accordingly, disallowance of deprecation in respect of consideration. Accordingly, disallowance of deprecation in respect of old vehicles for sale made in earlier years is also deleted. The old vehicles for sale made in earlier years is also deleted. old vehicles for sale made in earlier years is also deleted. ground No. 2 of the appeal of the Revenue is dismissed. ground No. 2 of the appeal of the Revenue is dismissed. ground No. 2 of the appeal of the Revenue is dismissed.
M/s Ashtech (India) Pvt. Ltd. 41 3 3222, 3220, 3221, 3234, 3233 & 3232/M/2023 ITA Nos. 3026 to 3028/M/2023 ITA Nos.
In the result, the appeal In the result, the appeals of the assessee from AY 2013 m AY 2013-14 to AY 2018-19 are partly allowed , where as appeal of the Revenue for 19 are partly allowed , where as appeal of the Revenue for 19 are partly allowed , where as appeal of the Revenue for AY 2013-14 is dismissed, appeal for AY 2014 14 is dismissed, appeal for AY 2014-15 is partly allowed 15 is partly allowed for statistical purpose and appeal for AY 2018 for statistical purpose and appeal for AY 2018-19 is dismissed. 19 is dismissed.