ITA No. 4929/Mum/2017 G IN INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER I.T.A. No.4929/Mum/2017 (Assessment Year: 2011 -12) ITO- 11(3)(4), M/s. Western Imaginary Room no 429, Aayakar Transcon Private Ltd., Bhavan, 4th Floor, v. 101, Shreeji Darshan, M.K. Marg, Dixit Cross Road No. 1, Mumbai-400020 Vile Parle (E), Mumbai-400057 PAN: AAACW8917H (Appellant) .. ( Respondent) Revenue by: Shri. Satyanathan Raju (Sr. AR) Assessee by: Shri. Bhavesh P. Shah Date of Hearing : 17.06.2019 Date of Pronouncement : 20.08.2019 ORDER PER RAMIT KOCHAR, Accountant Member: This appeal filed by Revenue, being ITA No. 4929/Mum/2017, is directed against appellate order dated 08.03.2017 in Appeal No. CIT(A)-18/IT-108/ITO-8(3)(4)/14-15, passed by learned Commissioner of Income Tax (Appeals)-18, Mumbai (hereinafter called CIT(A) ), for assessment year(ay) 2011-12, appellate proceedings had arisen before learned CIT(A) from assessment order dated 27.03.2014 passed by learned Assessing Officer (hereinafter called AO ) u/s 143(3) of Income-tax Act, 1961 (hereinafter called Act ) for ay: 2011-12. 1 ITA No. 4929/Mum/2017 2. grounds of appeal raised by Revenue in memo of appeal filed with Income-Tax Appellate Tribunal, Mumbai (hereinafter called tribunal ) read as under:- 1.a) "Whether on facts and in circumstances of case and in law, Ld.CIT(A) erred in granting relief of Rs. 1,90,95,000/- to assessee by ignoring fact that assessee has not proved nature and source of cash credits within meaning of section 68 of Income-tax Act, 1961?". b) Whether on facts and in circumstances of case and in law, Ld.CIT(A) erred in granting relief of Rs. 1,90,95,000/- to assessee by ignoring fact stated under Rule 46A that appellant shall not be entitled to produce before Ld. CIT(A), any evidence, whether oral or documentary, other than evidence produced by him during course of proceedings before AO, except in circumstances mentioned in Rule 46A(i) (a) to (d)?". 2.a) "Whether on facts and in circumstances of case and in law, Ld.CIT(A) erred in restricting disallowance on bogus purchases to 12.5% i.e. Rs.40,74,835/-thereby granting relief of Rs. 92,54,561/- by ignoring fact that neither party nor confirmation letter was produced during course of assessment proceedings which would prove that purchases alleged to have been made were genuine?" b) "Whether on facts and in circumstances of case and in law, Ld.CIT(A) erred in restricting disallowance of purchases made from various parties who was proven accommodation entry provider as per findings made by Sales Tax authorities in consequence to investigation carried out.? " c) "Whether on facts and in circumstances of case and in law, Ld.CIT(A) erred in appreciating facts that assessee himself had categorically admitted, during course of appellate proceedings , that they were not in position to produce parties for verification about genuineness of purchases, resulting in failure to discharge onus cast upon it to prove genuineness of purchase. In this regard, it is worthwhile to mention here test that has been prescribed by jurisdictional Hon'ble ITAT, 'D' Bench in decision in ITA No 6727/Mum/2012 in case of DCIT Vs Rajeev G. Kalathil as one of indicators to check whether alleged purchase party is genuine?". d) Whether on facts and in circumstances of case and in law, Ld. CIT(A) erred in not considering latest decision of apex court in case of N.K Proteins Ltd., Vs DCIT 2017(1) TMI 1090 Supreme Court, in which 100% of bogus purchases are disallowed? . 3. brief facts of case are that assessee is engaged in business of execution of contracts for transportation of waste, waste management, works contracts and sub-contracts. There are two effective issues in this appeal filed by Revenue, first grievance of Revenue is with respect to additions to income to tune of Rs. 2 ITA No. 4929/Mum/2017 1,90,95,000/- made by AO by invoking provisions of Section 68 of 1961 Act towards cash credits appearing in books of accounts of assessee, which stood later deleted by learned CIT(A) in its appellate order dated 08.03.2017. second grievance of Revenue is with respect to additions to income towards alleged bogus purchases to tune of Rs. 3,25,98,680/- which were added by AO being 100% of alleged bogus purchases which stood later reduced to 12.5% of alleged bogus purchases by Ld. CIT(A), vide its appellate order dated 08.03.2017 . 3.2 case of assessee was selected by Revenue for framing scrutiny assessment u/s 143(2) r.w.s. 143(3) of 1961 Act. During course of aforesaid assessment proceedings, AO observed that assessee has received various receipts which stood credited to bank account of assessee by way of unsecured loans to tune of Rs. 2,88,60,868/- . assessee submitted some details before AO with respect thereto and finally assessee was show caused by AO as to why following unsecured loans totalling to Rs. 1,90,95,000/- be not added as income of assessee as cash credit within provisions of Section 68 of Act, as detailed under:- Sr. Name of parties as Date of Amount credited Remark No. per submission transaction (Rs.) 1. Ambition Plaza Pvt. 21.10.2010 10,00,000 Bank Entry Details: Ltd. RTGS: Ambition Plaza Pvt. Ltd. UTR No. HDFCH102494425365 Sender Bank: HDFC Bank Ltd. Sender Branch: Buraqbazar Kolkata/HDFC0000219 2. Atul Ratilal Shah 19.04.2010 1,00,000 RTGS ATUL RATILAL SHAH BARBH10109828280 3. Big Scale 25.10.2010 40,00,000 RTGS: 3rd floor, KOHIAR Shipping Pvt. Ltd. HOUSE 4 MARINE S UTR NO. PUNBH 10298064724 Sender Bank: PUNJAB NATIONAL BANK SENDER BRANCH; BOMBAY ILACO HOUSE FORT SPJM,/PUNB0006100 3 ITA No. 4929/Mum/2017 4. Roof & Proof 20.10.2010 9,00,000 Rs. 15.00 lacs received on 20.10.2010 and Rs. 6.00 lacs paid on 23.03.2011, 5. Seva Bhavan Pvt. Ltd. 20.10.2010 20,00,000 RTGS: SEVA BHAVAN PRIVATE LIMITED UTR No. HDFCH10298478806 Sender Bank: HDFC Bank Ltd. Sender Branch: Buraqbazar Kolkata/HDFC0000219 6. Shubhlabh Vinimay P. 27.07.2010 67,00,000 Total receipt Rs. 160.00 lacs less Ltd paid Rs. 13.00 & 15.00 lacs on 20.10.2010 and Rs. 65.00 lacs on 26.10.2010 7. Snow Pack Tieup Pvt. 27.07.2010 40,00,000 Bank Entry Details: Ltd. RTGS: KOHIAR HOUSE 4 MARINE S UTR NO. PUNB 10208072087 Sender Bank: PUNJAB NATIONAL BANK SENDER BRANCH; BOMBAY ILACO HOUSE FORT SPM,/PUNB0006100 8 Veenaben Babulal 3,95,000 Out of total receipt of Rs. ' Shah 7,45,000/-, Rs. 3,50,000/- paid during year and Rs. 3,95,000/- remained as unpaid. Total 1,90,95,000 3.3 assessee submitted before AO during course of aforesaid assessment proceedings , as under:- "We had carried out various works of Municipal Corporation of Greater Mumbai and Thane Municipal Corporation in role of subcontractor. We had taken finance from market to carry out said works and expand our business in period. said finance was obtained with vision of Long term venture for carrying out such Government contract work jointly. We also got some contracts but due to some unavoidable circumstances, works were not going towards attaining fruitful bottom Line results. situation Landed us in disapproval of views and non working of terms for future business with finance partners. This also lead to disturbance in managing business and completing works on hand. It was then mutually decided between us and finance partner that we will complete works on hand and repay them investments when we received same for government /sub contractor without any 4 ITA No. 4929/Mum/2017 appreciation or interest on money. finance partner understood situation of business and agreed for same. said money was funded to our company with view of long term merger and tie up, hence, was given as share application money. While filing our returns for said period in September 2011, we were notified by our auditor that said money can not be technically shown as share application money as our company did not have required authorized capital. We had asked investors to give confirmation of accounts and other details which was not give as in their books of account said money was shown as share application money. Thus to this contradiction they did not provide us any further details also. This money which was taken from investors .was further paid by us as additional security deposits for works to Shayona Corporation which they further paid to Muncipal Corporation. said deposit was refunded to us by M/s. Shayona Corp. On receipt of same from corporation as and when refunded. same was paid back to us and we refunded same to investors immediately as per commitments made to them. We have received payment from M/s. Shayona Corporation dated 12/07/2012 vide transfer in our PNB Thane Account which was paid back by us immediately on same day which can be confirmed with our bank statements (attached at Page C-l-Pg. C2). 3.4 AO observed that vide letter dated 20.03.2014, assessee has furnished name and addresses , PAN no. of above eight parties. 3.5 AO observed that confirmations were submitted by assessee in respect of following three parties , detailed as hereunder:- (i) Roof and Proof, Mumbai (ii) Ambition Plaza Private Limited,Kolkatta (iii) Seva Bhavan Private Limited, Kolkata 5 ITA No. 4929/Mum/2017 3.6 AO further observed that with respect to following two parties, assessee has furnished ledger account claiming to be countersigned by these two parties , detailed as hereunder:- (i) Shubh Labh Vinmay Private Limited, West Bengal (ii) Snow Pack Tieup Pvt. Ltd., West Bengal 3.7 AO further observed that assessee has not furnished confirmation of account or ledger account of following three parties, detailed as hereunder:- (i) Atul Ratilal Shah & Sandhya Atul Shah, Mumbai (ii) Big Scale Shipping Private Limited, Mumbai (iii) Veenaben Babulal Shah, Mumbai 3.8 AO further observed that assessee has furnished confirmation of account in respect of following three parties which requires verification , detailed as hereunder:- (i) Roof and Proof, Mumbai (ii) Ambition Plaza Private Limited, Kolkata (iii) Seva Bhavan Private Limited, Kolkata 3.9 AO observed that most of these parties are from outside Mumbai . AO observed that assessee was repeatedly asked to explain nature and source of these cash credits but assessee avoided to comply with several notices and reminders issued by AO and now at fag end when assessment was getting time barred on 31.03.2014, assessee has filed three confirmations as detailed above, only on 22.03.2014 which happened to be Saturday and there is no time for verification of these three confirmations and to make necessary enquiries as to genuineness of these parties and loans, as assessment is getting time barred on 31.03.2014. AO further observed that assessee has failed to file confirmations with respect to remaining five parties. aforesaid factual matrix led AO to make additions to income of assessee to tune of Rs. 6 ITA No. 4929/Mum/2017 1,90,95,000/- as cash credits u/s 68 of 1961 Act, vide assessment order dated 27.03.2014 passed by AO u/s 143(3) of 1961 Act. 4. Aggrieved by assessment framed by AO u/s 143(3) of 1961 Act vide assessment order dated 27.03.2014, assessee filed first appeal before Ld. CIT(A) . assessee claimed before learned CIT(A) that it proved genuineness of loan transactions before AO but assessee s contentions were not considered by AO. assessee claimed that it filed letters on 29.02.2014 , 02.03.2014 and on 20.03.2014 wherein all details were submitted but reply dated 20.03.2014 was not considered by AO while framing assessment order dated 27.03.2014. 4.2 assessee submitted before learned CIT(A) that submissions before AO were delayed due to following reasons:- 1) Loan from Sandhya Ratilal Shah was shown in books of Appellant in name of Atul Ratilal Shah. Likewise loan from Jayesh B. Shah was shown in books of Appellant in name of Veenaben Shah. Thus confirmations were delayed for reconciliation. 2) Now, amount received from Ambition Plaza Private Limited and Seva Bhawan Private Limited was received as share application money for future expansion. Though, subsequently it was found that Appellant was not permitted to issue shares due to restriction of Authorized Share Capital. Thus Appellant had undergone dispute with said parties, precisely - Ambition Plaza Private Limited and Sewa Bhawan Private Limited due to delay in repayment. Other parties, precisely - Shubh Labh Vinimay Private Limited, Snow Pack Tieup Private Limited and Big Scale Shipping Private Limited are same group of companies. Thus, these parties had delayed ledger confirmations. 3) Appellant would highlight fact that even AO had sent notice to known parties u/s 131 read with section 134 of Income Tax Act, 1961 for which AO did not receive any confirmation from said parties. This fact clearly suggests that confirmations were delayed by said parties. And fact has not been mentioned in Assessment Order. Appellant is once again submitting Ledger Confirmations along with PAN number and full address of following 8 parties to prove genuineness of transactions. Sr. No. Name of party Amount involved 1 Roof & Proof 9,00,000/- 7 ITA No. 4929/Mum/2017 2 Ambition Plaza Private Limited 10,00,000/- 3 Seva Bhawan Private Limited 20,00,000/- 4 Shubh Labh Vinimay Private Limited 67,00,000/- 5 Snow Pack Tieup Pvt. Ltd. 40,00,000/- 6 Sandhya Ratilal Shah (In our 1,00,000/- books of Accounts-Atul Rathilal Shah) 7 Jayesh B. Shah (In our books of 3,95,000/- Accounts-Veenaben Babulal Shah) 8 Big Scale Shipping Private Limited 40,00,000/- Total 1,90,95,000/- appellant prays to your honour to cancel contention to add back disputed unsecured loans on grounds of genuineness of above transactions. 4.3 assessee submitted before learned CIT(A) that it had submitted following documents from to time , as under:- 1. Following details were submitted by us on time to time basis. copy of same has been enclosed herewith for your perusal: i. Copy of Covering letter of Submissions dated 30th January, 2013 which was submitted on 13th November, 2013. ii. Copy of covering letter dated 25th November, 2013. iii. Copy of Justification letter submitted on 28th February, 2014. iv. Copy of Covering letter of Submissions dated 20th March, 2014. v. Copy of Covering letter of Submissions dated 21st March, 2014 2. Appellant is submitting Ledger Confirmations duly signed and stamped (wherever required) along with PAN number and full address of following 8 unsecured loan parties to prove genuineness of transactions. 3. Further, Appellant is submitting ledger confirmations and bills of 12 purchase parties. Submission dated 19th February 2016 8 ITA No. 4929/Mum/2017 With reference to above, we have to state that we had received your notice dated 02nd February, 2016 on 5th February, 2016 for Appeal No. CIT(A)-18/IT-108/ITO- 8(3)(4)/ 14-15 regarding submission of documents. documents being submitted are as follows: 1. Copy of Ledger Confirmation of 8 parties as mention in Notice. 2. Copy of Covering Letters of Submissions made to Assessing Officer. 3. Copy of Ledger Confirmations along with bills of Purchase of 12 parties mentioned in notice. 4.4 assessee also claimed before learned CIT(A) that AO has not granted reasonable opportunity and time to produce evidences and passed assessment order making aforesaid additions to income of assessee. assessee submitted additional evidences before learned CIT(A) by invoking Rule 46A of Income-tax Rules, 1962 and prayers were made for admission of these additional evidences, details of which are as under:- 1. Copy of Ledger Confirmation of 8 parties. 2. Copy of ITR Acknowledgement of Parties for A. Y. 2011-12. 3. Bank Statement of Parties showing details of transactions entered during year under Appeal. 4. Copy of Balance Sheet of Parties with detailed loan schedule which shows name of Company for said amount. 4.5 Ld. CIT(A) after considering submissions of assessee and remand report submitted by AO decided issue in favour of assessee vide appellate order dated 08.03.2017, by holding as under:- Ground No. 2 Under this ground of appeal Appellant has agitated addition of Rs.1,90,95,000/- on account of unexplained Cash credit. I peruse assessment order and find that Assessing Officer made addition due to non- 9 ITA No. 4929/Mum/2017 furnishing of confirmation in respect of three parties. Assessing Officer also observed that appellant furnished copies of ledger account in respect of two parties. Assessing Officer further observed that in respect of remaining three parties confirmation were produced. Since assessment was getting time barred Assessing Officer ended same as unexplained cash credit. On other hand appellant submitted that Assessing Officer did not verify confirmation and ledger copies furnished by appellant by holding that same were filed late. appellant also clarified that delay in obtaining confirmation and PAN was due to business dispute between appellants and loan creditors. It was also explained that Assessing Officer disregarded repayment of loans already made. appellant filed additional evidence vide letter dated 14.12.2016. Subsequently remand report was called for from Assessing Officer to verify cash credit amounting to Rs.1,90,95, 000/-. In response to same Assessing Officer vide remand report bearing reference no. ITO 11 (3) (4) /Remand Report/2016-17 dtd 12.01.2017 in which Assessing Officer mentioned as follows: "a) I stick to and rely upon facts of assessment order. Assessment is completed within prescribed time limit by complying Income Tax Act, 1961 and Income Tax rule, 1962, keeping circumstance in mind, giving assessee full opportunity of being heard and submit his reply/ submissions, minutely scrutinizing and verifying facts and so on. b) Any evidence not submitted during course of assessment proceedings may kindly be treated as additional evidence as per Income Tax Act, 1961. Admissibility may kindly be considered as per Income Tax Act 1961 and Income Tax Rule 1962. c) No." said remand report was confronted to appellant and vide letter dated 08.03.2017 stated as follows: "The Assessing Officer has not given us reasonable opportunity and time to produce evidence in loan confirmations and got delayed due to dispute between loan parties and company. reason was known to Assessing Officer though order has been passed disallowing same. confirmation we were unable to submit was due to dispute about either for holding stake in company or for rate of interest. above 10 ITA No. 4929/Mum/2017 additional information goes to root of cause of addition and therefore it is humble request to your honour to admit additional evidence under Rule 46A of Income Tax i.e. confirmation which we could not submit to Assessing Officer before passing order or which were not considered by Assessing Officer at time of Assessment u/s 143(2). I have carefully considered rival submissions and find that Assessing Officer has rejected additional evidence without any verification. On perusal of additional evidence I find that same is sufficient to discharge burden cast upon appellant by way of confirmation, PAN no. etc. Assessing Officer has not brought any further material on record to disprove correctness of additional evidence filed by appellant. I am therefore of opinion that addition made by Assessing Officer deserve to be deleted. I direct Assessing Officer to delete addition of Rs.1,90,95,000/- made by way of cash credit. This ground of appeal succeeds . 5. Being aggrieved by appellate order dated 08.03.2017 passed by learned CIT(A), Revenue has now filed appeal before tribunal . Ld. DR drew our attention to assessment order framed by AO and submitted that additions were made to tune of Rs. 1.90 crores by AO by invoking provisions of Section 68 of 1961 Act. It was submitted by learned DR that Ld. CIT(A) held additional evidences to be sufficient for granting relief to assessee which is not as per mandate of law as laid down u/s. 68 of Act. It was submitted that assessment order passed by AO makings additions be upheld and appellate order passed by learned CIT(A) granting relief to assessee be set aside on this issue. 5.2 Ld. Counsel for assessee drew our attention to paper book filed by assessee containing 277 pages . said paper book is now placed in file. It was submitted that additional evidences were filed before Ld. CIT(A). It was submitted that AO did not carry out verifications . Our attention was drawn by Ld. Counsel for assessee to paper book at page no. 53-54 , wherein copy of acknowledgment of ITR for ay: 2011-12 and Balance Sheet of 11 ITA No. 4929/Mum/2017 Ambition Plaza Private Ltd. as at 31.03.2011 are placed. Our attention was also drawn to page no. 58 and 59 wherein copy of acknowledgment of ITR and Balance Sheet of Seva Bhawan Private Ltd. as at 31.03.2011 are placed. Our attention was drawn to page no. 63 and 65 of paper book wherein Balance Sheet of Shubh Labh Advertising Private Ltd. and Snowpack Tie-Up Private Ltd., both as at 31.03.2011, are placed. 6. We have carefully considered rival contentions and perused material on record . We have observed that assessee is engaged in business of execution of contracts for transportation of waste, waste management, works contracts and sub-contracts. We have observed that assessee had carried out various works of Municipal Corporation of Greater Mumbai and Thane Municipal Corporation as subcontractor. We have observed that assessee has received share application money/unsecured loans to tune of Rs. 1,90,95,000/- from eight parties which stood credited to its bank account which is subject matter of dispute between rival parties as to satisfaction of mandate of Section 68 of 1961 Act. AO while framing assessment u/s 143(3) concluded that assessee had failed to discharge its onus u/s 68 of 1961 Act with respect to these cash credits leading to additions being made in hands of assessee towards income of assessee to tune of Rs. 1,90,95,000/- u/s 68 of 1961 Act as unexplained cash credits, while learned CIT(A) after considering additional evidences as well remand report submitted by AO during course of first appellate proceedings , concluded that assessee has duly discharged its onus as is cast u/s 68 of 1961 Act . details of share application money/ unsecured loans to tune of Rs. 1,90,95,000/- received by assessee from aforesaid eight parties are as under:- Sr. Name of parties as Date of Amount credited Remark No. per submission transaction (Rs.) 12 ITA No. 4929/Mum/2017 1. Ambition Plaza Pvt. 21.10.2010 10,00,000 Bank Entry Details: Ltd. RTGS: Ambition Plaza Pvt. Ltd. UTR No. HDFCH102494425365 Sender Bank: HDFC Bank Ltd. Sender Branch: Buraqbazar Kolkata/HDFC0000219 2. Atul Ratilal Shah 19.04.2010 1,00,000 RTGS ATUL RATILAL SHAH BARBH10109828280 3. Big Scale 25.10.2010 40,00,000 RTGS: 3rd floor, KOHIAR Shipping Pvt. Ltd. HOUSE 4 MARINE S UTR NO. PUNBH 10298064724 Sender Bank: PUNJAB NATIONAL BANK SENDER BRANCH; BOMBAY ILACO HOUSE FORT SPJM,/PUNB0006100 4. Roof & Proof 20.10.2010 9,00,000 Rs. 15.00 lacs received on 20.10.2010 and Rs. 6.00 lacs paid on 23.03.2011, 5. Seva Bhavan Pvt. Ltd. 20.10.2010 20,00,000 RTGS: SEVA BHAVAN PRIVATE LIMITED UTR No. HDFCH10298478806 Sender Bank: HDFC Bank Ltd. Sender Branch: Buraqbazar Kolkata/HDFC0000219 6. Shubhlabh Vinimay P. 27.07.2010 67,00,000 Total receipt Rs. 160.00 lacs less Ltd paid Rs. 13.00 & 15.00 lacs on 20.10.2010 and Rs. 65.00 lacs on 26.10.2010 7. Snow Pack Tieup Pvt. 27.07.2010 40,00,000 Bank Entry Details: Ltd. RTGS: KOHIAR HOUSE 4 MARINE S UTR NO. PUNB 10208072087 Sender Bank: PUNJAB NATIONAL BANK SENDER BRANCH; BOMBAY ILACO HOUSE FORT SPM,/PUNB0006100 8 Veenaben Babulal 3,95,000 Out of total receipt of Rs. ' Shah 7,45,000/-, Rs. 3,50,000/- paid during year and Rs. 3,95,000/- remained as unpaid. Total 1,90,95,000 6.2 We have observed that assessee has claimed that it availed finance from market to carry out its business of executing sub- contracts for performing work of Municipal Corporation of Greater Mumbai/Thane. assessee had also claimed that in two of these 13 ITA No. 4929/Mum/2017 cases namely Ambition Plaza Private Limited and Seva Bhawan Private Limited, investors advanced share application money but later on said share application money were treated as unsecured loans on grounds that assessee s authorised capital was less than said share application money and assessee was not in position to issue share certificates and hence said share application money were treated as unsecured loans unilaterally by assessee. It is claimed that these two parties continue to treat said amounts as share application money in their books of accounts. Further , assessee has claimed that these amounts received by assessee from various lenders were all interest free as no interest is payable by assessee on these unsecured loans/share application money. assessee has submitted additional evidences before learned CIT(A) as detailed in preceding para s of this order which were admitted by learned CIT(A). remand report was submitted by AO during course of appellate proceedings conducted by learned CIT(A) on these additional evidences filed by assessee before learned CIT(A) which was also considered by learned CIT(A) while granting relief to assessee. Be that as it may be , it is now admitted position that assessee has claimed to have submitted all evidences in its possession in order to make effort to discharge its burden u/s 68 of 1961 Act. These evidences either filed before AO during assessment proceedings or during appellate proceedings conducted by learned CIT(A) are now placed in paper book filed by assessee with tribunal. While submitting additional evidences before learned CIT(A), assessee has explained reasons for non submission of these evidences before AO which was accepted by learned CIT(A). In interest of substantial justice , we are inclined to endorse decision of learned CIT(A) in admitting all these additional evidences with view to dispense justice to both parties as we are inclined to prefer cause of justice than technicalities and more-so cause is shown by assessee for its failure to submit these additional evidences during course of assessment proceedings . Now, all evidences which 14 ITA No. 4929/Mum/2017 assessee had submitted either at assessment stage or appellate stage before learned CIT(A) in order to substantiate its contention that it discharged its onus u/s 68 of 1961 Act , are now placed in paper book filed with tribunal and it becomes extremely important for us to evaluate these additional evidences to arrive at conclusions whether assessee infact discharged its onus as is cast u/s 68 of 1961 Act and any additions to income u/s 68 of 1961 Act is warranted or not in hands of assessee. 6.3 assessee has furnished name and addresses , PAN no. of aforesaid eight parties. 6.4 assessee has submitted confirmations were submitted by assessee in respect of following three parties , detailed as hereunder:- (i) Roof and Proof, Mumbai (ii) Ambition Plaza Private Limited,Kolkatta (iii) Seva Bhavan Private Limited, Kolkata 6.5 AO further observed that with respect to following two parties, assessee has furnished ledger account claiming to be countersigned by these two parties , detailed as hereunder:- (i) Shubh Labh Vinmay Private Limited, West Bengal (ii) Snow Pack Tieup Pvt. Ltd., West Bengal 6.6 AO further observed that assessee has not furnished confirmation of account or ledger account of following three parties, detailed as hereunder:- (i) Atul Ratilal Shah & Sandhya Atul Shah, Mumbai (ii) Big Scale Shipping Private Limited, Mumbai (iii) Veenaben Babulal Shah, Mumbai 6.7 AO had grievance that assessee submitted part- documents as above only at fag end on 22.03.2014 when 15 ITA No. 4929/Mum/2017 assessment was getting time barred thereby preventing effective verification and enquiry with respect to these unsecured loans. 6.8 assessee claimed before learned CIT(A) that it is submitting ledger confirmations along with PAN and addresses before learned CIT(A) with respect to all eight parties to prove genuineness of transaction of unsecured loans and claimed that it has submitted all necessary evidences but learned CIT(A) observed from records that none of documents were in-fact submitted, which led learned CIT(A) to issue letter dated 02.02.2016, reproduced hereunder: 16 ITA No. 4929/Mum/2017 6.9 assessee has setup claim that two of parties namely Ambition Plaza Private Ltd and Seva Bhawan Private Limited were participating in share capital by way of subscription of share application money but later said money was converted into interest free unsecured loans as assessee has claimed that it had insufficient authorised share capital to issue share capital. It is also claimed that it led to dispute between assessee and investing parties as these Investing parties are reflecting these amounts advanced to assessee as share application money while assessee is unilaterally reflecting same amount as interest-free unsecured loans received from aforesaid parties. assessee has not submitted any shareholder agreements or terms and conditions for issuance of its shares to these parties . assessee has also not submitted copies of Resolution passed by its Board of Directors and/or Shareholders or of investing company. assessee has also not placed on record any report of due diligence conducted by investing companies or valuation report of its shares. Thus, assessee has not discharged its burden u/s 68 of 1961 Act with respect to share application money received from Ambition Plaza Private Limited and Seva Bhawan Private Limited. This claim set up by assessee to convert unilaterally aforesaid share application money to interest-free unsecured loans is clearly after-thought and is 17 ITA No. 4929/Mum/2017 clearly attempt made by assessee to wriggle out of its onus/burden cast u/s 68 of 1961 Act with respect to these amounts so raised by assessee as share application money during year under consideration. 6.10 We are of considered view that Section 68 of Act creates legal fiction which cast obligation on assessee to explain to satisfaction of AO about nature and source of credit in case any amount is found credited in books of assessee maintained for any previous year. This creates legal fiction and in case assessee did not offer explanation to satisfaction of AO as to nature and source of credit of any amount found credited in books of assessee for any previous year by cumulatively satisfying AO about identity and creditworthiness of creditor and about genuineness of transaction , amount found credited in books of assessee shall be treated to be income of assessee as unexplained income under legal fiction created by Section 68 of Act. Section 68 of Act created legal fiction which does not require that Revenue has to show sources of income before bringing amount to tax since amount is found to be credited in books of assessee in case assessee has not offered explanation to satisfaction of AO. Thus, section 68 of Act cast obligation on assessee where any sum is found credited in books of assessee maintained for any previous year , and assessee offers no explanation about nature and source of credit thereof or explanation offered by assessee is found not satisfactory in opinion of AO, sum so credited may be treated as income and charged to income-tax as income of assessee of that previous year. burden/onus is cast on assessee and assessee is required to explain to satisfaction of AO cumulatively about identity and capacity/creditworthiness of creditors along with genuineness of transaction to satisfaction of AO. All constituents are required to be 18 ITA No. 4929/Mum/2017 cumulatively satisfied. If one or more of them is absent, then AO can make additions u/s 68 of Act as income. There are companies which are widely held companies in which public are substantially interested which comes out with initial public offers wherein shares are listed on stock exchanges and widely traded , wherein members of public make subscriptions in pursuance to Prospectus issued by company . Issue of shares in these cases to general public in India as well abroad are approved, regulated and monitored by various authorities who are engaged in regulating and managing securities market such as Securities and Exchange Board of India(SEBI) , Stock Exchanges, Government of India etc. . These members of public who make subscription are widely scattered all over country or even outside India as any person entitle to apply as per conditions prescribed in prospectus can place application subscribing to shares of company by depositing duly filled in application along with application money with designated authorized recipients of company stipulated in prospectus such as bankers, brokers, under-writers, merchant bankers, company offices etc . These shareholders who are member of public are un-known persons to company issuing shares and company issuing shares have no control/mechanism to verify their creditworthiness etc. and burden of proof in such cases is different, but there is another class of companies which are closely held companies in which public are not substantially interested who are mostly family controlled closely held companies and they raise their share capital from their family members, relatives and friends and in these companies since share capital is received from close knit circles who are mostly known to company/promoters, onus as required u/s 68 of Act is very heavy to prove identity and capacity of shareholders and genuineness of transaction. onus of widely held company could be discharged on submissions of all information contained in statutory share application documents and on not being satisfied AO may proceed against 19 ITA No. 4929/Mum/2017 shareholders u/s 69 of Act instead of proceeding against company, but in closely held companies share capital are mostly raised from family, close relatives and friends and assessee is expected to know share subscribers and burden is very heavy on assessee to satisfy cumulatively ingredients of Section 68 of Act as to identity and establish credit worthiness of creditors and genuineness of transaction to satisfaction of AO , otherwise AO shall be free to proceed against assessee company and make additions u/s 68 of Act as unexplained cash credit. use of word any sum found credited in books in Section 68 indicates that it is widely worded and AO can make enquiries as to nature and source thereof . AO can go to enquire/investigate into truthfulness of assertion of assessee regarding nature and source of credit in its books of accounts and in case AO is not satisfied with explanation of assessee with respect to establishing identity and credit worthiness of creditor and genuineness of transactions, AO is empowered to make additions to income of assessee u/s 68 of Act as unexplained credit in hands of assessee company raising share capital because AO is both investigator and adjudicator. In our considered view, merely submission of name and address of creditor, income tax returns, Balance Sheet/statement of affairs of creditor and bank statement of creditor is not sufficient as AO is to be satisfied as to their identity and creditworthiness as well as to genuineness of transaction entered into. 6.11 It is undisputed that aforesaid amount of Rs. 1,90,95,000/- stood credited in books of accounts of assessee and now onus is on assessee to prove identity and creditworthiness of creditors to advance these amounts to assessee and genuineness of these transactions, be it share application money or unsecured loans. assessee has filed paper book in which it has claimed to 20 ITA No. 4929/Mum/2017 have filed all necessary evidences such as confirmations etc. to claim that its onus u/s 68 stood discharged. Ld. CIT(A) deleted additions by accepting these evidences including additional evidences filed by assessee before learned CIT(A). assessee setup story that some of these receipts are from various investors who subscribed share application money to subscribe towards share capital of assessee but later on said amount was treated as interest-free unsecured loans for reasons that assessee s authorised capital was less than amount received. This story as we have seen above in para 6.9 does not inspire much of confidence as nothing prevented assessee from raising its authorised capital by passing Board Resolution, Shareholders Resolution, altering Memorandum and Articles of Association and complying with requirements as prescribed under Companies Act, 1956. More-over, these companies have shown in their audited balance sheet , these investments as share application money which evidences that story set up by assessee does not inspire confidence and stand rejected. It is well established that merely receipt of money through banking channel is not sufficient to discharge onus u/s 68 of 1961 Act because assessee has to prove genuineness of transaction as well identity and creditworthiness of these parties cumulatively. 6.12 Under these circumstances, it become critical to evaluate evidences submitted by assessee which are placed in paper book filed by assessee with tribunal. Let us see and evaluate these evidences in context of amount raised by assessee be it share application money or unsecured loans. 6.13 Roof N Proof. assessee has claimed to have received Rs. 15 lacs on 20.10.2010 while Rs. 6 lacs was refunded on 23.03.2011, leaving net amount payable by assessee as on 31.03.2011 of Rs. 9 lac. assessee has filed confirmation of account from said Roof N Proof(Mr Pradeep Jain) duly signed by Properietor and its address/PAN is duly given. There was one more transaction reflected 21 ITA No. 4929/Mum/2017 in said confirmation filed by assessee, of Rs. 2,10,000/- paid by said Roof N Proof to assessee on 22.02.2011, which did not found mentioned in orders of authorities below and communication of assessee with lower authorities. Thus, balance shown to be payable to Roof N Proof by assessee as at 31.03.2011 is Rs. 11,10,000/- as per confirmation filed and not Rs. 9,00,000/- as is brought to tax by AO. assessee has neither filed bank statements of said party nor Balance Sheet/Statement of Affairs of said party along with copy of ITR for relevant period is also not filed by assessee. assessee could not explain as to reasons for said creditor to have extended interest free unsecured loans . assessee also did not explained as to when these loans were finally paid off/squared by assessee. learned CIT(A) merely accepted confirmation filed by assessee and did not made any enquiry/verification himself to come to conclusion whether all ingredients of Section 68 were satisfied cumulatively . Needless to say that powers of ld. CIT(A) are co-terminus with powers of AO. In our considered view, assessee has not fully discharged its onus u/s 68 of 1961 Act completely and cumulatively as to all three ingredients and in our considered view , this matter need to be restored to file of AO for fresh adjudication wherein one more opportunity is granted to assessee to adduce evidences to substantiate satisfaction of all three ingredients of Section 68 of 1961 Act. assessee is directed to file necessary evidences before AO in set aside proceedings to discharge its onus/burden as is cast u/s 68 of 1961 Act. AO is directed to give proper and adequate opportunity of being heard to assessee in denovo assessment proceedings. AO shall admit all relevant evidences/explanation filed by assessee in its defence in set aside proceedings, which shall then be adjudicated on merits in accordance with law. We order accordingly. 22 ITA No. 4929/Mum/2017 6.14. Now coming to second lender namely Atul Ratilal Shah, who had stated to have advanced Rs. 1 lac to assessee. We have observed that assessee has filed confirmations of Mrs. Sandhya Atul Shah and submitted address and PAN of said party(page 68/pb). assessee has neither filed bank statements of said party nor Balance Sheet/Statement of Affairs of said party along with copy of ITR for relevant period is also not filed by assessee. assessee could not explain as to reasons for said creditor to have extended interest free unsecured loan of Rs. 1 lacs . assessee also did not explained as to when this loans was finally paid off/squared by assessee. learned CIT(A) merely accepted confirmation filed by assessee and did not made any enquiry/verification himself to come to conclusion whether all ingredients of Section 68 were satisfied cumulatively . Needless to say that powers of ld. CIT(A) are co-terminus with powers of AO. In our considered view, assessee has not fully discharged its onus u/s 68 of 1961 Act completely and cumulatively as to all three ingredients and in our considered view , this matter need to be restored to file of AO for fresh adjudication , wherein one more opportunity is granted to assessee to adduce evidences to substantiate satisfaction of all three ingredients of Section 68 of 1961 Act. assessee is directed to file necessary evidences before AO in set aside proceedings to discharge its onus/burden as is cast u/s 68 of 1961 Act. AO is directed to give proper and adequate opportunity of being heard to assessee in denovo assessment proceedings. AO shall admit all relevant evidences/explanation filed by assessee in its defence in set aside proceedings, which shall then be adjudicated on merits in accordance with law. We order accordingly. 6.15 Similarly in case of Mr. Jayesh B. Shah (Mrs. Veenaben Babulal Shah) , it is observed that assessee has closing balance outstanding of Rs. 3,95,000/- as at 31.03.2011. assessee has filed confirmation along with PAN and Address of Mr Jayesh B. Shah. 23 ITA No. 4929/Mum/2017 It is observed from confirmation filed that there was opening balance as at 01.04.2010 of Rs. 7,45,000/- payable by assessee , while during year assessee has paid Rs. 3,50,000/- through banking channel to said party(page 69/pb). Since, as per this confirmation, no amount is received during year under consideration and in our considered view when no amount is received and found credited during year under consideration, Section 68 has no applicability as it can be applied when any sum is found credited in books of accounts of assessee. If Revenue wants, then it can invoke provisions of Section 68 of 1961 Act for year when said sum was received by assessee and was found credited in its books of accounts of assessee, if law so otherwise permit. Reference is drawn to provisions of Section 68 of 1961 Act as was applicable for ay: 2011-12, which reads as under: Cash credits. 68. Where any sum is found credited in books of assessee maintained for any previous year, and assessee offers no explanation about nature and source thereof or explanation offered by him is not, in opinion of [Assessing] Officer, satisfactory, sum so credited may be charged to income-tax as income of assessee of that previous year. Thus for limited verification of this aspect as to whether any sum was received during year from said party or else balance constitute amount received in earlier years , matter is restored to file of AO. If it is found that balance as at 31.03.2011 amounting to Rs. 3,95,000/- was received in earlier ay s, then no additions are warranted in this year under consideration before us, otherwise our directions in preceding para s 6.13-6.14 of this order shall equally apply . Revenue is, however, free to invoke provisions of 1961 Act to make additions in earlier years in years when said amount was received by assessee, if law so otherwise permit. We order accordingly. 6.16 Now coming to receipts from following five parties which stood credited in books of accounts of assessee for relevant 24 ITA No. 4929/Mum/2017 previous year from five companies , namely (a) Ambition Plaza Private Ltd., Rs. 10 lac, (b) Big Scale Shipping Pvt. Ltd., Rs. 40 Lac, (c) Seva Bhavan Pvt. Ltd, Rs. 20 Lac, (d) Shubh Labh Vinimay Private Ltd.(Shubh Labh Advertising Private Limited), Rs. 67 Lac and (e) Snow Pack Tieup Pvt. Ltd., Rs. 40 Lac, aggregating to Rs. 1,77,00,000/- . 6.16 With respect to amount advanced by Ambition Plaza Private Limited of Rs. 10 lacs to assessee during year under consideration , we have observed that assessee has filed copy of bank statement, copy of Balance Sheet as on 31.03.2011( no P& L, other schedules etc. filed) , copy of acknowledgement of ITR of said party, and letter dated 21.03.2014 issued by Ambition Plaza Private Limited in favour of assessee confirming that this amount is given as share application money to assessee(page 53-56/pb) . We have observed that said company M/s Ambition Plaza Private Limited has shown meager income of Rs. 5250 for ay: 2011-12. said company M/s Ambition Plaza Private Limited has total Balance Sheet size of Rs. 2.19 crores. paid up capital of M/s Ambition Plaza Private Limited is meager Rs. 4.18 lacs while it has huge Reserves and Surplus of Rs. 2.15 crores. total Investments made by said company namely M/s Ambition Plaza Private Limited in various entities is Rs. 1.76 crores as at 31.03.2011. It did not have any fixed assets as at 31.03.2011 and 31.03.2010 . liabilities and provisions are meager Rs. 0.29 lacs as at 31.03.2010. perusal of Bank Statement of said Ambition Plaza Private Limited will reveal that while payment of Rs. 10 lacs was made by it on 21.10.2010 to assessee , which is preceded with deposit of equivalent amount of Rs. 10 lacs on same day in its bank account . balance maintained with bank account with HDFC bank from where payment was made by said M/s Ambition Plaza Private Limited to assessee was meager sum of Rs. 26,000/-. assessee has not submitted any details of shareholder agreements or terms and conditions agreed for 25 ITA No. 4929/Mum/2017 allotment/subscription of its shares by said M/s Ambition Plaza Private Limited . assessee has also not submitted Resolutions passed by its Board of Directors or Shareholders nor Resolutions passed by investing company is filed. There are no due diligence/valuation report for valuing assessee company or its shares at behest of investing company are brought on record. said amount was claimed to be shown as share application money by said M/s Ambition Plaza Private Limited in its audited Balance Sheet while assessee is now claiming said amount as interest-free unsecured loan payable to M/s Ambition Plaza Private Limited . This company Ambition Plaza Private Limited has address at 30 Shivtolla Street, Burrabazar, Kolkatta-700007 , West Bengal while other lender namely Seva Bhawan Private Limited also had same address as that of Ambition Plaza Private Limited at Kolkatta. Directors of M/s Ambition Plaza Private Limited and Seva Bhawan Private Limited as well auditors are also common. said Seva Bhawan Private Limited also showed meager income of Rs. 3630/- for ay: 2011-12. said Seva Bhawan Private Limited also have meager capital of Rs. 3.85 lacs while Reserves and Surplus are to tune of Rs. 1.82 crores, as at 31.03.2011. said Seva Bhawan Private Limited also did not have any fixed assets as at 31.03.2011 and also at 31.03.2010. said Seva Bhawan Private Limited has made investments of Rs. 1.40 crores as at 31.03.2011 in various entities, while liabilities and provisions are meager sum of Rs. 0.16 lacs. It has also advanced share application money to tune of Rs. 20 lacs to assessee company while no terms and conditions /share holder agreement is brought on record nor Resolutions passed by Board of Directors/Shareholders of Investee as well investing company are brought on record. There are no due diligence/valuation report for valuing assessee company or its shares at behest of investing company are brought on record. This company M/s Seva Bhawan Private Limited also have bank account with HDFC Bank, Burra Bazar, Kolkatta and is having meager balance of Rs. 0.40 lacs. 26 ITA No. 4929/Mum/2017 payments of Rs. 10 lacs each has been made to assessee towards share application money by said Seva Bhawan Private Limited on 21.10.2010 and 23.10.2010 aggregating to Rs. 20 lacs ,which is preceded by transfer of equivalent amount on same date in aforesaid bank account. We have observed that assessee has filed copy of bank statement, copy of Balance Sheet as on 31.03.2011( no P& L, other schedules etc. filed) , copy of acknowledgement of ITR and letter dated 21.03.2014 issued by Seva Bhawan Private Limited in favour of assessee confirming that this amount of Rs. 20 lacs is given as share application money to assessee(page 58-62/pb). With Respect to M/s Shubh Labh Advertising Private Limited , merely Balance Sheet and Schedules as at 31.03.2011 are filed( No P& L A/c, no Bank Statement, copy of ITR not filed) (pb/page 63-64). said company has reflected amount of Rs. 67,00,000/- advanced to assessee as Advances for value to be received under head Loans and Advances in its Balance Sheet as at 31.03.2011. copy of ITR, Confirmations and bank statements of lending company are not filed. With Respect to Snowpack Tie-up Private Limited, merely Balance Sheet and Schedules as at 31.03.2011 are filed along with certified ledger account( No P& L A/c, Bank Statement, copy of ITR filed) (pb/page 65-67). said company has reflected amount of Rs. 40,00,000/- advanced to assessee as Advances for value to be received under head Loans and Advances in its Balance Sheet as at 31.03.2011). copy of ITR, Confirmations and bank statements of lending company are not filed. With Respect to M/s Bigscale Shipping Private Limited , merely Balance Sheet and Schedules as at 31.03.2011 are filed along with certified ledger account( No P& L A/c, Bank Statement, copy of ITR filed) (pb/page 70-72). said company has reflected amount of Rs. 40,00,000/- advanced to assessee under head Loans and Advances in its Balance Sheet as at 31.03.2011. said amount of Rs. 40,00,000/ is claimed to be paid back on 10.07.2012 , vide certified ledger account copy. copy of ITR, Confirmations and bank statements of lending company are 27 ITA No. 4929/Mum/2017 not filed. All five investing/lending companies have common auditors. M/s Ambition Plaza Private Limited and M/s Seva Bhawan Private Limited has common Directors. Similarly, M/s Bigscale Shipping Private Limited and Snowpack Tie-up Private Limited have common Director namely Mr. Deepak Patel. It is also admitted by assessee that even Shubh Labh belongs to same group as that of Bigscale and Snowpack. All five companies do not have single fixed assets with them both as at 31.03.2011 and 31.03.2010. assessee is based in Mumbai and is contractor for authorities situated in Greater Mumbai/Thane districts. All investing/lender companies have common thread of having no fixed assets , low capital base, large Reserves and Surplus or large unsecured loan raised by it, large Investments/loans and advances granted by it. These common thread which runs into all these investing/lender company having common addresses in Kolkatta or common Directors/common auditors and common financial parameters and their peculiar features clearly indicates that these investing /lending companies are all merely name lenders/ accommodation entry providers and have merely provided accommodation entries to assessee for aggregate sum of Rs. 1,77,00,000/- . two companies namely Ambition Plaza Private Limited and Seva Bhawan Private Limited had claimed to have advanced share application money to assessee but no shareholder agreements, terms and conditions for issue of shares, Resolutions passed by investor and investee companies are brought on record. Neither due diligence report or valuation report of shares/assessee company conducted at behest of investing company is brought on record. Now , it is claimed by assessee that these share application moneys are unilaterally treated by assessee as interest unsecured loans in its books of accounts as it has low authorized capital and it cannot issue share capital beyond that limit, while those investing companies continued to reflect invested amount as share application money in their books of accounts. Nothing prevented assessee to increase its authorized capital after complying with legal 28 ITA No. 4929/Mum/2017 requirements as mandated by Companies Act. Thus, this contention of assessee that confirmation got delayed due to dispute as to conversion of share application money into loans is merely afterthought. loans received by assessee from these companies are stated by assessee to be unsecured and also free of interest which defies all commercial logics and commercial expediencies as to why these unrelated parties shall advanced these amounts as unsecured loans to assessee and that too without any interest. assessee has filed bank statement in case of Ambition Plaza Private Limited and Seva Bhawan Private Limited which clearly shows that money of equivalent amount comes into bank account of these two companies on same day which are then transferred to bank account of assessee on very same day and average balance maintained by both these investing company was otherwise meagre/minimal. assessee has not filed copies of ITR s in case of Shubh Labh Advertising Private Ltd, Snowpack Tie-up Pvt. Ltd., and Bigscale Shipping Pvt. Ltd. nor their bank statements were filed. Thus taking into account all evidences filed by assessee along with explanations offered , we are of considered view that assessee has not discharge its primary onus as is mandated u/s 68 of 1961 Act with respect to raising of Rs. 1,77,00,000/- as share application money/unsecured loans from aforesaid five parties and transactions for raising Rs. 1.77 crores by assessee from aforesaid five parties during relevant previous year are merely accommodation entries wherein assessee own undisclosed funds are routed/channelized through these companies to bring it back into bank accounts/books of accounts of assessee under garb of share application money/unsecured loans in attempt to give it color of legitimate investments/loans . learned CIT(A) merely accepted contentions/documents filed by assessee without analyzing these documents/evidences/explanations to come to conclusion whether assessee did comply with mandate of provisions of Section 68 of 1961 Act and appellate order 29 ITA No. 4929/Mum/2017 passed by learned CIT(A) cannot be sustained in view of our aforesaid detailed observations. Thus, under these circumstances we hereby confirm additions to tune of Rs. 1,77,00,000/- as were made by Assessing Officer and set aside appellate order passed by Ld. CIT(A) . appeal of Revenue stand allowed on this issue as indicated above. We order accordingly. 7. second effective issue raised by Revenue in its appeal filed with tribunal relates to addition being made on account of 100% of alleged bogus purchases to tune of Rs. 3,25,98,680/- by AO in assessment order dated 27.03.2014 framed u/s 143(3) of 1961 Act , which was later reduced to 12.5% of alleged bogus purchases by learned CIT(A). AO has received specific information from Investigation Wing of Department at Mumbai that assessee is beneficiary of bogus purchases to tune of Rs. 3,25,98,680/- from following twelve parties , as detailed here under:- Sr. No. Name of party Amount involved (Rs.) 1 M/s. Vatsa Enterprises 37,47,358 2 M/s. Excel Industries 28,16,575 3 M/s. Deep Enterprises 12,62,735 4 M/s. Sambhav Traders 11,34,921 5 M/s. R.K. Traders 14,61,625 6 M/s. Amee Enterprises 29,94,221 7 M/s. Gaddhar Trading Co. 21,41,040 8 M/s. Ashar Impex 29,04,959 9 M/s. Vijami Impex 31,25,469 30 ITA No. 4929/Mum/2017 10 M/s. Linion Tradelink 33,35,152 11 M/s. Banjara Enterprises 37,53,249 12 M/s. A. K. Enterprises 39,21,376 TOTAL 3,25,98,680 7.2. AO asked assessee to explain genuineness of these purchases. assessee in response thereof with respect to query raised by AO , submitted as under:- We have made purchase sand metal cement , etc. from Mrs. Vikramsinah J, Solanki having address: 6/1, Durga Villa, Gokhale Road, Vile Parie (E), Mumbai - 57 and contact No.: 8980285985 as per requirement of material at site for construction. order for said material is normally given on phone to agents and they supply to us thru various dealers and normally dealers raised bills with materials send by them: M/S. Vatsa Enterprises M/S.Excel Industries M/S.Deep Enterprises M/S.Sambhav Traders M/S.R.K. Traders M/S.Amee Enterprises M/S.Gaddhar Trading Co. M/S.Ashar Impex M/S.Vijami Impex M/S.Linion Tradelink M/S.Banjara Enterprises M/S.A.K.Enterprises (As per 31 ITA No. 4929/Mum/2017 us A.K. Traders) In connection with purchases from above parties, we are furnishing point wise details asked by you for your perusal: 1. Details of seller such as name and address, PAN details of material/goods purchased. details of seller were given in letter dated 30/01/2013 and again on 13/11/2013 with address and VAT TIN No. of above parties. 2. Datewise purchase of materials by you with details of quantity and rate of goods purchased. We enclosing copy of ledger account of above parties with copies of purchase bills. 3. Correspondence of requisition for purchase of goods/material to seller party, copies of invoices raised by seller party. requisition as explain were on telephone as and when material required at site and copy of bills are enclosed. 4. Copy of delivery challans of goods received by you. normal procedure is to get bills cum invoice and copies of same are enclosed. 5. Details of loading and unloading charges and transportation charges paid by you. Also furnish copies of lorry Receipts. purchase parties get this material at his site and no extra charge or separate charge for transport on unloading requires to be paid as per normal business trend or policy and rates are always including transport. 6. Address of places/godowns to where goods purchased were Loaded and unloaded in your godown/sites. address of goods load were not known to us as same were known to seller party. address at which goods unloaded were at site., address of site are given hereunder; Site address of Neev Infrastructure: At our Andheri (W) and A, C., E and B ward site chowky. Site address of Shayona Corporation: Construction and strengthening of Nalla No. 1 (part), 3W, 7, 9, 11 and 12 under INDP in Thane City. 32 ITA No. 4929/Mum/2017 7. Details of sales tax/VAT, Octroi or duty other tax/levy on purchases made by you of each purchase. As explain above, seller party takes care of every payment of taxes till delivery to our site. 8. Copy of stock register showing receipt of goods by you. Site wise details of stock receipt are enclosed. 9. Details of payments made by you alongwith details of entries showing payment to seller in Bank Statement, etc. If paid in subsequent period, details thereof. he details of payments are shown in copy of Ledger account enclosed of setter parties and copy of banks statements are enclosed to cross verify for payments. 10. Copies of toll payment/Octroi Naka payments if purchase made from outside, Mumbai. All purchases were made in Mumbai and as explain earlier duty for any payments related to any taxes till delivery at our site is of seller. Hope above details and explanations will able your honour for justifying our claim of genuine purchase made by us, and further we are enclosing details of sales corresponding purchases alongwith copies of labour bills. Further to prove our genuine purchase we are enclosing third party confirmations i.e. of our sales parties and also of parties from which they received these contracts i.e. Mumbai Municipal Corporation for completion of said work and also corresponding bills raised by them to Corporation." 7.3. AO observed from assessee s aforesaid reply, as detailed hereunder :- (i) assessee has not furnished confirmations of account of entire above mentioned seller parties. Further, in some cases, it is seen that in some cases, confirmations of account are not countersigned by respective seller party. Hence, furnishing of confirmation of account of some of parties, which are even not cross signed, cannot be relied upon. (ii) It is seen that none of bills of purchases furnished by assessee company have been signed in lieu of receipt of goods by any person except bills of Deep 33 ITA No. 4929/Mum/2017 Enterprises, Sambhab Traders & R.K. Traders. Further, bills does not bear stamp of assessee company in lieu of receipt of goods. Hence, bills cannot be said to be reliable in nature. (iii) Further, it is seen from copies of bills, that bills are computerized typed in same Font and size of alphabets, which is very remote possibility in day to day working. bills also reveal that different supplier of goods, located at different places have used same lorries/trucks for supply of goods to assessee company, which is also not practically remotely possible. Hence, on these aspects, bills cannot be said to be reliable in nature. (iv) Further to above, from copies of certain bills, such as that of Gadadhar Trading which has shown VAT no. 27300803525 allotted on 07.12.2010 and in case of Vatse Enterprises which has shown VAT no. 27870754739 alloted on 08.01.2010, it is seen that VAT no. allotted in case of Vatsa Enterprises on 08.01.2010 is bigger No. in serial order than VAT No. 27300803525 alloted to Gadhadhar Trading on 07/12/2010, which is not possible because VAT Nos. are allotted on first in first served basis. (v) Further, in none of bills produced by assessee company, supplier party has mentioned destination of goods delivered. In all bills only name of assessee has been mentioned. (vi) assessee did not produce stock register maintained by its project supervisor at its site office so as to show that goods/material was received by assessee company. (vii) As regard to assessee s contention that rates of material always includes transportation charges and other charges, such as, loading & unloading etc., however, it is seen that in none of bills, supplier has charged any additional charges, nor it has been mentioned by supplier that rates of material includes all charges and delivery at doorstep of purchaser party. (viii) As regard to stock receipt submitted, as claimed by assessee, it is work completion register maintained by Municipal Officer/Engineer. said register does not endorse delivery of goods/material as stated by assessee. 34 ITA No. 4929/Mum/2017 (ix) As regard to assessee is contention that all material were purchased from Mumbai, it is to mentioned here that major building materials such as bricks & sand is not manufactured or excavated in Mumbai. It is always import from outside Mumbai. While coming by road to Mumbai, many toll naka as well as at entry point of Mumbai & Thane city, octroi naka is always there. receipt of Octroi as well as Toll can be valid proof of transportation of goods. If assessee is not having such proof, it is responsibility of assessee to arrange such receipt from seller party which was not done so. (x) As regards to assessee's contention it has completed construction work at Thane as well as at Andheri sites, it is to be clarified here that assessee has shown total purchase of Rs. 18,30,56,344/- and assessee has procured bogus bills only to amount of Rs.3,25,98,680/-. assessee has not classified/ bifurcated to establish that out of said amount of purchases of material of Rs.3,25,98,680/- also, it has completed construction/ job work, as it has also claimed other purchases of Rs.15,04,57,664/-in addition to above amount of Rs.3,25,98,680/-, which may be genuine in nature. Therefore assessee's contention that it has completed construction work from purchases of Rs.3,25,98,680 of said material is also not convincing and bills of labour does prove that said purchases of Rs.3,25,9,8,680/- is genuine in nature. 7.4. Thus based on above discussion, AO was of view that assessee failed to prove genuineness of purchases. 7.5 AO in order to verify assessee s claim for purchases to tune of Rs. 3,25,98,680/- from above mentioned twelve parties , issued notices dated 27.02.2014 u/s. 133(6) to aforesaid twelve seller parties but all notices dated 27.02.2014 issued u/s. 133(6) of 1961 Act returned un-served by postal authorities which further strengthened view of AO that these parties are non existent and purchases are bogus. 7.6 AO also observed that assessee has not furnished delivery challans with respect to these alleged bogus purchases to tune of Rs. 3,25,98,680/-, which led to additions being made to tune of 100% of alleged bogus purchases by AO vide assessment order 35 ITA No. 4929/Mum/2017 dated 27.03.2014 passed by AO u/s 143(3) of 1961 Act as in opinion of AO , assessee had failed to prove that it made aforesaid purchases to tune of Rs. 3,25,98,680/- and said claim of purchases were disallowed and added to income of assessee by AO . 8. assessee being aggrieved by assessment order dated 27.03.2014 framed by AO u/s 143(3) of 1961 Act filed first appeal with Ld. CIT(A). assessee made submissions before Ld. CIT(A) that assessee company is engaged in business of execution of contracts for transportation of waste, waste management, works contracts and sub-contracts. assessee claimed that it has made genuine purchases to tune of Rs. 3,25,98,680/- which were mainly used for execution of contracts. assessee claimed that it has duly furnished copies of bills and ledger confirmations and payments were made through banking channel. assessee claimed that aforesaid twelve parties from whom these purchases were made have not deposited VAT amount with Sales Tax authorities which was collected from assessee which led to denial of claim for input tax credit to assessee . It was submitted that assessee has forgone said input tax credit in Sales Tax assessment. assessee submitted that it was not aware that said dealers from whom purchases were made will default in payment of VAT with Sales Tax authorities. assessee also submitted before Ld. CIT(A) details of purchases and sales for work contract execution by assessee and it was submitted that it can be verified that all aforesaid materials alleged to be bogus purchases by AO which were purchased by assessee came directly at site of Municipal Corporation of Greater Mumbai and Thane and material were utilised in executing contract and some of material were appearing as stock in hand as at year end. Thus it was submitted that material represented by aforesaid alleged bogus purchases were duly accounted for by assessee. It was submitted that AO has not 36 ITA No. 4929/Mum/2017 verified same for which assessee is not at fault. It was submitted that ledger confirmation from creditor were duly submitted before AO and there is reconciliation wherein sales were backed by purchases. assessee also relied upon certain case laws , detailed hereunder:- (i) CIT v. President Industries (2002) 258 ITR 654 (Guj.) (HC) (655) (ii) CIT v. Balachand Ajit Kumar (2003) 263 ITR 610 (MP) (HC) (612-613) (iii) Sanjeev Woolen Mills v. CIT (2005) 279 ITR 434 (SC) It was also submitted that these purchases were duly accounted for in books of accounts of assessee and payments were made through banking channel. assessee relied upon decision of ITAT, Ahemdabad in case of General Mechanical Works v. ACIT , dated 14.03.2014 wherein profits embedded in these purchases was estimated which stood disallowed and it was submitted that entire purchases cannot be held to be bogus and disallowed as was done by AO in case of assessee. assessee claimed that entire purchases are accounted for in its books of accounts and payments were made through proper banking channels to suppliers. assessee claimed that merely because these suppliers defaulted with Maharashtra VAT authorities in making payment of VAT , these purchases cannot be disallowed. 8.2 Ld. CIT(A) after considering submissions of assessee observed that information was received from Sales Tax Authorities that assessee is beneficiary of bogus purchases from Hawala Dealers who have confessed before Sales Tax Authorities that they were engaged in issuing bogus bills without supplying any material. learned CIT(A) also observed that Investigation Wing of Mumbai had provided list of Hawala bill racketeers who were issuing bogus bills without supplying any material. assessee was stated to be beneficiary of bogus bills to tune of Rs. 3,25,98,680/- issued by 37 ITA No. 4929/Mum/2017 aforesaid twelve hawala operators wherein only bogus invoices were issued without supplying any material. learned CIT(A) also observed that assessee has produced transportation bills and consumption of material purchased but has failed to produce these twelve parties before AO and even assessee failed to produce these parties before learned CIT(A) despite being asked by Ld. CIT(A) to produce said parties for verification. Ld. CIT(A) observed that these suppliers were infact assessee s witnesses and assessee is required to produce these suppliers before authorities which assessee had failed to produce. Ld. CIT(A) considered ratio of decision of following case laws , as detailed hereunder:- (1) CIT v. Durgaprasad More 82 ITR 540 . (2) Sumati Dayal v.CIT 214 ITR 801 (3) Jamnaprasad Kanhaiyalal v. CIT 130 ITR 244 (SC). (4) Sri Meenakshi Mills Ltd., 63 ITR 609 (SC) (5) McDowell & Co. 154 ITR 148 (SC) (6) CIT vs. Daulat Ram Rawatmull (1973) 87 ITR 349 (7) Chuharmal vs. CIT (1998) 172 ITR 250/ 38 Taxman 190 (8) Dhakeswari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775 (9) Nikunj Eximp In ITA no. 5604 of 2010 (Bombay High Court); (10) Balaji Textiles 49 ITD 177 (Bom) (11) Rajeev G. Kalathil in ITA no. 6727/Mum/2012 and CO no. 06/Mum/2014 (12) Nikunj Eximp (2014) 48 Taxmann.com 20 (Bom),. (13) Killick Nixon Ltd., vs DCIT (2012) 20 Taxmann.com 703 (Bom) (14) B.V vs. Union of India (2012) 204 Taxmann.com 408/ 17 Taxamann.com 202 (15) Union of India vs. Azadi Bachao Andolan (2004) 10 SCC 1 (16) Mathuram Agarwal v. State of Madhya Pradesh (1999) 8 SCC 667 (17) Sri Ganesh Rice Mills Vs. CIT (2007) 294 ITR 316 (All.) (18) Khandelwal Trading Co. vs. ACIT (1996) 55 TTJ 261 (JP) (19) Deoria Oxygen Company vs. CIT (2007) 160 Taxman 427 (ALL.) (20) Dhakeswari Cotton Mills Ltd. vs. CIT (1954) 26 ITR 775 (21) Seth Gurmukh Singh vs. CIT (1994) 12 ITR 393 (22) Samurai Software P. Ltd., vs. CIT (2008) 299 ITR 324 (Raj.) (23) CIT vs. La Medica (2001) 250 ITR 575 (24) Indian Woolen Carpet Factory vs. ITAT (2002) 125 Taxman 763 (Raj.) (25) Sanjay Oilcake Industries vs. CIT (2009) 316 ITR 274 (Guj.) 38 ITA No. 4929/Mum/2017 (26) ACIT vs. Tribhovandas Bhimji Zaveri (2000) 74 ITD 92 (Mum). (27) Homi Jehangir Gheesta vs. CIT (1961) 41 ITR 135 (28) T. Devashaya Nadar vs. CIT (1964) 51 ITR 20 (Mad.) (29) R. S Dass vs. Union of India AIR 1967 SC 593. (30) Chairman, Board of Mining Examination vs. Ramjee AIR 1977 SC 965. (31) GTC Industries Ltd., vs ACIT (1998) 65 ITD 380 (Bom.). (32) SBI vs. S.K Sharma AIR 1996 SC 364 (33) Bholanath Polyfab Pvt. Ltd., 355 ITR 290 (Guj.) (34) Sanket Steel Traders vs. ITO (IT Appeal no. 2801 & 2937 (Ahd) of 2008 dated 20.05.2011 (35) Vijay Proteins Ltd., vs. ACIT (1996) 58 ITD 428 (Ahd.) (36) CIT vs. Simit Sheth (2013) 38 Taxmann.com 385 (Guj) (37) Vijay M. Mistry Construciton Ltd., 355 ITR 498 (Guj) 8.3 learned CIT(A) observed that above cases are directly applicable to facts of assessee s case. learned CIT(A) observed that these parties are not existing but however AO had not given any adverse finding as to consumption /sales of goods and as per learned CIT(A) , now issue boils down to finding profits embedded in these purchases , which Ld. CIT(A) to estimate profits embedded in these purchases @ 12.5% as income of assessee which was ordered by learned CIT(A) to be brought to tax vide appellate order dated 08.03.2017 . 9 Aggrieved by decision of learned CIT(A) granting relief to assessee by estimating profits embedded in these purchases @12.5% as income of assessee to be brought to tax vide appellate order dated 08.03.2017 , revenue has come in appeal with tribunal. Ld. DR submitted that AO has made additions to tune of 100% of alleged bogus purchases , while Ld. CIT(A) has restricted same @ 12.5% of alleged bogus purchases. Ld. DR submitted that revenue has filed appeal as it is aggrieved by appellate order dated 08.03.2017 passed by Ld. CIT(A) and our attention was drawn to ground no. 2 filed by Revenue. It was submitted that assessee could not prove genuineness of these purchases and reliance was placed on decision of Hon ble Supreme Court in case of N.K Proteins Ltd. (Supra) and prayers were made to confirm addition to tune of 100% alleged bogus 39 ITA No. 4929/Mum/2017 purchases by relying on assessment order framed by AO. On other hand, Ld. Counsel for assessee prayed that additions as were confirmed by Ld. CIT(A) be upheld . It was submitted that assessee has not filed any appeal against decision of Ld. CIT(A) which stood accepted by assessee and reliance was placed on decision of Ld. CIT(A). Thus, prayers were made by learned counsel for assessee to confirm appellate order passed by Ld. CIT(A). 10. We have heard rival contentions and perused material on record. We have observed that assessee is engaged in business of execution of contracts for transportation of waste, waste management, works contracts and sub-contracts. assessee is working for executing work contracts with Municipal Corporation of Greater Mumbai and Municipal Corporation of Thane as sub- contractor. assessee has made total purchases to tune of Rs. 18,30,56,344/- during year under consideration. Since , assessee is executing work contracts with aforesaid Municipalities albeit as sub-contractor, these materials so purchased are intended to be consumed for executing of work contracts awarded by these Municipalities and onus is on assessee to prove that these materials were duly utilised/consumed in executing of work orders through cogent evidences. Municipalities keep proper consumption records of material wherein every receipt as well consumption of material at site is entered in stock records which requires authentication by officials of Municipalities. Further, said material has to be in accordance with stipulated specification and quantity as provided in work order . Thus, onus is very heavy on assessee to prove consumption/utilisation of aforesaid material so purchased was duly consumed in intended work executed for Municipalities at Greater Mumbai and Thane for which it carried out work as sub-contractor by bringing on record cogent evidences to substantiate its contentions. AO in instant case received incriminating information from Mahrashtra VAT authorities 40 ITA No. 4929/Mum/2017 and Investigation Wing, Mumbai that assessee is beneficiary of bogus purchases from twelve hawala dealers as detailed hereunder to aggregate value of purchases to tune of Rs. 3,25,98,680/- wherein these hawala dealers have merely issued bogus invoices without supplying any material physically and assessee is stated to be beneficiary of these alleged bogus purchases . details of said alleged hawala dealers who have allegedly issued bogus invoices to assessee without supplying any material are as under: Sr. No. Name of party Amount involved (Rs.) 1 M/s. Vatsa Enterprises 37,47,358 2 M/s. Excel Industries 28,16,575 3 M/s. Deep Enterprises 12,62,735 4 M/s. Sambhav Traders 11,34,921 5 M/s. R.K. Traders 14,61,625 6 M/s. Amee Enterprises 29,94,221 7 M/s. Gaddhar Trading Co. 21,41,040 8 M/s. Ashar Impex 29,04,959 9 M/s. Vijami Impex 31,25,469 10 M/s. Linion Tradelink 33,35,152 11 M/s. Banjara Enterprises 37,53,249 12 M/s. A. K. Enterprises 39,21,376 TOTAL 3,25,98,680 41 ITA No. 4929/Mum/2017 AO made additions to tune of 100% of aforesaid alleged bogus purchases to income of assessee. AO had observed many discrepancies in submissions of assessee , such as that assessee did not submit confirmations from some of these parties and in some cases confirmations submitted were not countersigned by these parties. AO also noted that all bills/invoices from these twelve parties were prepared in same font and size of alphabets. said twelve selling parties albeit located at different places have used same lorries/trucks for alleged supplies of goods to assessee. delivery of goods as well consumption of goods cannot be proved. destination of goods has not been mentioned in bills as materials are meant for government contracts and are to be unloaded at work site to be utilised/consumed for executing work orders. AO observed that work completion register maintained by municipality did not endorse delivery of goods as alleged to be made from these twelve parties. assessee did not produced evidences such as octroi receipts to substantiate movement of goods. other discrepancies are also noticed by AO which are mentioned in para 4.3 of AO order at page 8-10 of assessment order. It is admitted position that notices issued u/s 133(6) returned unserved by postal authorities. It is also admitted position that assessee could not produce these parties before AO as well learned CIT(A). AO disallowed 100% of these alleged bogus purchases while learned CIT(A) upheld additions to profits embedded in these purchases which was estimated @12.5% of alleged bogus purchases. Revenue has alleged that material represented by bogus invoices issued by these twelve hawala dealers were never supplied by these parties and is merely attempt by assessee to inflate expenses and to evade taxes.The learned CIT(A) has also held that these purchase invoices are bogus and material has not been supplied under these invoices but on ground that transportation of these material and consumption stood proved, learned CIT(A) upheld additions to tune of 12.5% of alleged bogus purchases as profits embedded in 42 ITA No. 4929/Mum/2017 these alleged bogus purchases. It is admitted position that assessee is executing work contract with Municipalities of Greater Mumbai and Thane as sub-contractor and had these material would have been genuinely supplied which was mainly in nature of cement, sand , metal, bricks etc , it would have been delivered at work site and then consumed for execution of work contract. Under these circumstances , it become relevant to see utilisation/consumption details/evidences of these material as filed by assessee. assessee has filed paper book containing 277 pages with tribunal. evidences with respect to these alleged bogus purchases are filed from page 74-277/paper book. It is important to see these evidences as are filed in paper book with respect to these alleged bogus purchases. Perusal of page 74-82/paper book reveals that these are confirmations filed by assessee with respect to these alleged suppliers. Perusal of page 74/paper book reveals that this is confirmation of Vatsa Enterprises. assessee has made first purchase on 15.11.2010 from this party in year under consideration. total purchases are from 15.11.2010 to 31.01.2011 made by assessee from Vatsa Enterprises aggregating to Rs. 37,47,358/- during financial year 2010-11. balance outstanding to be payable to this party as at 31.03.2011 by assessee is also Rs. 37,47,358/-. Thus, as could be seen from confirmation filed by assessee of this party namely Vatsa Enterprises , assessee has not made any payment to this party against purchases made during financial year 2010-11. purchases has also taken place during November 2010 to January 2011. assessee has stated to have purchased Metal , River Sand and Powder from this party. invoices are placed in paper book/page 83 to 103. In purchases , Lorry Number is not stated to be complete like MH 02K 6019 but is stated to be merely 6019 . This trend is noticed in all invoices submitted by assessee in paper book of all suppliers namely Vatsa Enterprises, Excel Enterprises , Deep Enterprises, Amee Enterprises and so on. It is highly improbable that all these parties will not write fully lorry details but will write only 43 ITA No. 4929/Mum/2017 number of Lorry. second confirmation of account is filed of Excel Enterprises which also reveal same trend that purchases started from 15.11.2010 and ended on 31.03.2011 during year under consideration , aggregating to Rs. 28,16,575/-. It is observed that assessee again did not made any payments to said party during entire financial year. Similar trend and pattern is observed with respect to purchases made from Amee Enterprises which started from 15.11.2010 and ended on 31.03.2011 , aggregating to Rs. 29,94,221/- while no payments are made by assessee for entire year and balance outstanding as on 31.03.2011 is Rs. 29,94,221/-. balance outstanding to be payable by assessee to said party as at 31.03.2011 is Rs. 29,94,221/- . purchases were made in short period from 15.11.2010 to 31.03.2011. With respect to other parties namely Gadadhar Trading Co. , Ashar Impex, Vijami Impex, Linion Tradelink, Banjara Enterprises, A.K.Traders for which assessee filed confirmations , exactly similar trends and patterns are observed. It defies cannon of all commercial logic and expediency that all these supplier parties are supplying material without seeking their payments from assessee as not even single payment has been made by assessee to all these aforesaid suppliers till end of previous year. In rest of cases , assessee has not filed any confirmations. assessee has only filed invoices and no consumption details are filed by assessee. assessee has not filed any delivery proof of material allegedly supplied under these invoices nor evidences from Municipal Corporation of Greater Mumbai and Thane Municipal Corporation are filed by assessee. incriminating information was received from Sales Tax Department as well Investigation Wing, Mumbai that these parties are indulging in issuing bogus purchases invoices without supplying any material physically wherein these parties have deposed before Maharashtra Sales Tax Authorities that they are indulging in issuing bogus invoices and assessee is stated to be beneficiary of these alleged bogus purchases. assessee could not produce these parties before AO as 44 ITA No. 4929/Mum/2017 well learned CIT(A) for verification , enquiry and recording of their statement . notices issued u/s 133(6) by AO to these parties for verification returned unserved. proof of transportation and delivery of material was not filed by assessee. consumption/utilisation details of material is also not filed. In this case, material under these invoices was intended to be utilised for executing contracts with Municipalities of Greater Mumbai / Thane by assessee as sub-contractor. onus was very heavy on assessee to prove consumption/utilisation of material, which it could not discharge as no consumption/utilisation details were furnished. There are several inconsistencies noticed by AO in para 4.3 of assessment order, which also remained un-rebutted by assessee. Thus, under these facts and circumstances taken cumulatively , we are of considered view that appellate order passed by learned CIT(A) cannot be upheld/sustained and we set aside appellate order passed by learned CIT(A) and upheld/sustain assessment order passed by AO as it is fit case for sustaining additions to tune of 100% of alleged bogus purchases . Revenue succeeds on this issue. We order accordingly. 11. In result, appeal of Revenue in ITA No. 4929/Mum/2017 for ay: 2011-12 stand allowed as indicated above. Order pronounced in open court on 20.08.2019. 20.08.2019 Sd/- Sd/- (SANDEEP GOSAIN) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, dated: 20.08.2019 Nishant Verma 45 ITA No. 4929/Mum/2017 Sr. Private Secretary copy to 1. appellant 2. Respondent 3. CIT(A) Concerned, Mumbai 4. CIT- Concerned, Mumbai 5. DR Bench, 6. Master File // Tue copy// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 46 ITO- 11(3)(4), Mumbai v. Western Imaginary Transcon Private Ltd