DCIT 8(3), MUMBAI vs. SAR ENGINEERING LTD, MUMBAI

This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-18, Mumbai, dated 15.09.2014 for A.Y. 2010-11 on following grounds:

“i. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in restricting the disallowance of the purchases of Rs.33,35,357/- made from M/s. Newzone Multritrade Pvt. Ltd. to 25% i.e. Rs.8,33,839/- thereby granting a relief of Rs.25,01,518/- ignoring the following facts:-

That crucial documentary evidences in the (a) form of quantity details / stock register were not produced by the assessee during the course of assessment proceedings. That no original invoice, delivery challans, (b) octroi / sales tax receipts, balance sheets, bank statements, income tax returns were furnished to prove the genuineness of the purchases?" The Ld.CIT(A) has failed to appreciate that (c) M/s. Newzone Multritrade Pvt. Ltd. was a proven accommodation entry provider as per the findings made by the Sales Tax authorities in consequence to the investigation carried out. ii. “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying on the Judgement of the Bombay High Court in the case of M/s Nikunj Exim Enterprises Pvt Ltd (25 Taxman 384) without appreciating the fact that in that case the assessee had filed all the details including the quantity details, stock reconciliation, whereas in the case under consideration, the stock statement, stock register were never produced hence the ratio the said Judgement was not applicable?".

A.Y. 10-11 [DCIT vs. M/s. Sar Engineering Ltd.] Page 3 iii. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in relying on the judgement of Gujarat High Court in the case of CIT vs. Bholanath Poly Fab (Pvt) Ltd. (355 ITR 290) without appreciating the fact that in that case the quantity details i.e stock details, octroi receipts were submitted therefore the underlying presumption in that case was that the entire receipts were not unaccounted and therefore only the profit embedded therein can be brought to tax whereas in the case of the assessee as there were no actual purchases made from the above party, the entire expenses claimed in this regard by the assessee were bogus / non-genuine?" iv. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that only the profit element of bogus purchases earned from M/s. Newzone Multritrade Pvt, Ltd. can be added to the total income of the assessee ignoring the decision by the Hon'ble Punjab & Haryana High Court in the case of J.R. Solvent Industries (Pvt.) Ltd. (2012) (22 taxmann.com 115) wherein it was held that where purchases were made from a non-existing seller, same would be held to be bogus even if complete quantitative details of purchase were available in the assessee's books of account?" v. "Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in not appreciating the fact that the Director of the assessee-company, Shri Anil Raghavan, had admitted in the statement recorded u/s 131 of Income Tax Act during the course of survey proceedings u/s 133A that the purchases made from M/s. Newzone Multitrade Pvt. Ltd. Were not genuine but merely in the nature of accommodation entry?”