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03-07-2019, ATC India Tower Corporation, Section 147, 254, Tribunal Mumbai
1.1 Aforesaid appeal by revenue for Assessment Year [AY] 2008-09 contest the order of Ld. Commissioner of Income-Tax (Appeals)-16, Mumbai [CIT(A)], Appeal No. CIT(A)-16/IT-602/DCIT-9(1)(2)/2015-16 dated 27/06/2017 on following Grounds of appeal: -
1. Whether on the facts and circumstances of the case, the order of the Ld. CIT(A) has erred in treating the purchases with M/s Aster infrastructure P. Ltd. and R.N. Infra Communication Pvt. Ltd. as genuine, when these vendors failed to comply with the notices issued u/s 133(6) of the LT. Act.
2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in treating the purchases with M/s Aster infrastructure Pvt. Ltd. and R.N. Infra Communication Pvt. Ltd. as genuine, when the assessee failed to produce these vendors for conformation when asked for by the assessing officers during the assessment proceedings, meaning thereby that the assessee failed to discharge the onus of proving the transactions with the said vendors as genuine.
3. The appellant prays that the order of the CIT(A) on the above ground above set aside and that of the A.O. be restored.”
1.2 This is second round of appeal before Tribunal since the matter in the first round was set-aside to the file of Ld AO for re-adjudication with certain directions vide ITA No.4060/Mum/2012 order dated 19/12/2014.The directions of the Tribunal have already been extracted in the impugned order at para-6, the perusal of which reveal that since Ld. first appellate authority refused to admit the additional evidences filed by the assessee during appellate proceedings, the Tribunal set aside the matter to the file of Ld. AO with a direction to decide the issue afresh after admitting the additional evidences filed by the assessee.
1.3 Brief background is that the assessee being resident corporate assessee was stated to be engaged in providing passive infrastructure services to mobile service providers and other licensed telecom operators. Passive infrastructure is nothing but vertical towers with equipment such as antennas, duplexers, transceivers etc. Towers could be ground based or roof based.
1.4 The return of income was filed by the assessee on 30/09/2009 declaring loss of Rs.29.76 Crores which was later on revised on 22/03/2010 to Rs.26.82 Crores. The loss was finally assessed u/s 143(3) on 29/12/2010 at Rs.25.28 Crores. However, subsequently the case was reopened and an assessment was framed u/s 143(3) read with Section 147 on 25/03/2013 wherein the loss was reduced to Rs.15.22 Crores. In the re-assessment proceedings, the assessee was saddled with disal owance of Rs.10.30 Crores on account of purchases made from certain entities as per following details: -
Since the expenditure was cap talized in the books of accounts, the depreciation claimed agains the same @15% amounting to Rs.1.54 Crores was disallowed whereas the balance Rs.8.75 Crores was reduced from written down value [WDV] of the fixed assets. The assessee contested the stand of Ld. AO before Ld. first appellate authority on the strength of additional evidences to substantiate the purchases. However, the plea to admit additional evidences was rejected and therefore, the matter was further agitated before this Tribunal wherein the matter was remanded back to the file of Ld. AO with certain directions as enumerated by us in preceding para 1.2.
2. The set-aside proceedings pursuant to the directions of the Tribunal got culminated on 29/01/2016 vide order passed by Ld. AO u/s 143(3) read with Section 254 of the Act. During proceedings, the assessee, vide letter dated 11/09/2015, submitted copies of purchase invoices, copies of purchase orders, material receipt notes and copies of bank statements to substantiate the purchases. Notices were sent u/s 133(6) to the aforesaid suppliers at the address provided by the assessee to confirm the stated transactions along with directions to file requisite information / details / documents. Although, the notices were duly served on the suppliers, however no submission was received from any of the said parties. Accordingly, the assessee was show-caused to produce the suppliers or to file fresh confirmation from these parties. However, the assessee failed to do so which led the Ld. AO to treat the aforesaid purchases as bogus purchases and accordingly, the depreciation claimed against the purchases amounting to Rs.1.54 Crores was disallowed whereas the balance amount of Rs.8.75 crores was reduced from WDV of fixed assets as done in the original re-assessment proceedings.
3.1 Aggrieved, the assessee agitated the same with success before Ld. Ld. CIT(A) vide impugned order dated 27/06/2017 wherein the assessee defended the purchases on the strength of following documents: -
(i) Confirmation of Aster Infrastructure Pvt. Ltd. and reconciliation thereto
(ii) Confirmation of Aster Teleservices Pvt. Ltd. and reconciliation thereto
(iii) Confirmation of R.N.Infra and reconciliation thereto
(iv) Copies of sample invoices raised by Aster Infrastructure Pvt. Ltd. providing services of survey site survey, soil testing, design & drawing, liasioning etc.
(v) Copies of sample invoices raised by Aster Teleservices Pvt. Ltd. on account of supply of material & services