ORDER
G.S. Pannu, A.M.
These are cross appeals preferred by the assessee and by the revenue against the order of the CIT (A) dated 5-5-1994 pertaining to assessment year 1991-92. They are clubbed together and are being disposed of by way of a consolidated order for the sake of convenience.
2. Brief facts are that the assessee is a firm engaged in the business of construction. The assessee claimed to have purchased shuttering material during the year amounting to Rs. 21,22,267 and claimed depreciation at the rate of 100 per cent on such material. The assessee claimed that it had given the entire material on hire to M/s. Wig Brothers (B&E) Delhi Area Project another sister concern in the similar line of business. The details in relation to the impugned shuttering material is as under:-
Name of the Supplier
Invoice No. Date of Invoice
Date of Invoice
Value of Machinery (Rs.)
Delivery given on
SGB(India) Ltd.
115
23.3.91
2,24,700
23.3.91
”
116
23.3.91
2,24,700
4,49,400
23.3.91
Bajaj Products
206
20.3.91
1,58,860
20.3.91
Bajaj Products
207
22.3.91
1,55,864
22.3.91
Bajaj Products
210
25.3.91
1,61,963
4,76,687
25.3.91
Steel Star Industries
8810
17.3.91
2,42,700
17.3.91
Steel Star Industries
8811
19.3.91
2,75,650
19.3.91
Steel Star Industries
8812
21.3.91
4,54,650
21.3.91
-do-
8813
22.3.91
1,22,450
23.3.91
-do-
8814
26.3.91
1,00,630
11,96,180
26.3.91
21,22,267
3. The assessing officer rejected the claim of the assessee for depreciation on the aforesaid material on noticing the following. That the assessee did not carry out any construction activity except maintenance work during the year; that the assessee was unable to give any evidence regarding the receipt of machinery before the close of the year, that certain vouchers relating to purchase of material contained cutting off dates; that the original date mentioned on the voucher was 6.4.91 which has been cut off and was antedated showing the date prior to 31-3-1991; that no hire charges were found debited in the profit and lossaccount of M/s. Wig Brothers (B&E), Delhi Area Project, the lessee to whom the material was claimed to be given on hire. In this manner, it was concluded by the assessing officer that no material was purchased by the assessee firm before the end of the previous year and neither was it given on hire to M/s. Wig Brothers (B&E), Delhi Area during the year under consideration.
4. On appeal before the CIT (A), assessee submitted that the shuttering material was directly received from the suppliers at the site of M/s. Wig Brothers (B&E) Delhi Area Project; that since the assessee did not have any fresh construction contracts during the year, it chose to give the impugned machinery on hire; that giving of machinery on hire was an accepted precedent as in the earlier years. That during the year, the assessee has credited in the profit and loss account the receipt of hire charges from M/s. Wig Brothers (B&E) towards hiring of the impugned shuttering material; that the cutting of the dates on the vouchers noticed by the assessing officer was a routine mistake which was often found in computerized accounts. That regarding the non-debit of hire charges of Rs. 10,025 in the profit and loss account of Wig Brothers (B&E) Delhi Area Project, it was stated that the same were debited in the total cost of construction shown by the sister concern in its P&L account, details of which were furnished which included such payments to the assessee firm; that impugned machinery was put to use by the hirer bef ore the end of the financial year.
5. In the face of the above submissions, the CIT (A) directed the assessing officer to make inquiries from the three suppliers from whom the shuttering material was claimed to have been purchased by the assessee as also from the Executive Engineer of I.G.A.I., Palam to find out whether a delivery of the shuttering material at the project site of Wig Brothers (B&E) Delhi Area project was made before the expiry of the financial year or not. On the basis of the verification and enquiries conducted by the assessing officer on the direction of the CIT (A), following results were arrived at. Insofar as the inquiry from Executive Engineer, I.G.A.I., Palam was concerned, it was mentioned that they do not have any record of the receipt of shuttering material in the month of March 1991 because the same remained in the custody of the representative of the contractor; that with regard to the two suppliers M/s. S.G.B. (India) Ltd. and M/s. Bajaj Products, CIT (A) accepted that the delivery of the shuttering material had taken place at the site of hirer before the end of the previous year. This was on the basis of invoices, original dispatch notes produced by’ supplier along with the details of transportation available with the suppliers including the freight paid towards transportation etc. In so far as the third supplier was concerned i.e., M/s. Steel Star Industries, in the absence of any evidence of similar nature, the CIT (A) did not accept the pleas of the assessee. Accordingly, for the purpose of depreciation, the CIT (A) accepted the claim of the purchase and delivery of the shuttering material before the end of the financial year at Rs. 9,26,087 only. The CIT (A) also concluded that the hirer of the shuttering material has put to use the same before the end of the previous year.
6. Presently, the revenue is in appeal against the decision of the CIT (A) in accepting the claim of the assessee of depreciation amounting to Rs. 9,26,087 while the assessee, in its appeal, is aggrieved by the action of the CIT (A) in denying the claim of depreciation in relation to the shuttering material of Rs. 11,96,180. Since the rival grievance arises out of a common issue, we proceed to dispose of the same together.
7. Before we proceed further, we extract hereinafter the manner in which the CIT (A) has adjudicated the claim of the assessee with regard to the shuttering material claimed to have been supplied by M/s. Steel Star Industries by reproducing the relevant para as under:-
“Regarding purchase of shuttering material from M/s. Steel Star Industries, I may mention that the records do not support the claim of the appellant firm that the shuttering material purchased from this party was delivered at the project site before the close of the financial year. This is because the copy of agreement purported to have been entered into with this for the supply of shuttering material before the end of the financial year, which was filed in respect of other two parties, was not filed in respect of this party. Secondly, there is no dispatch advice note from this party showing the dispatch of the shuttering material to the work site. Thirdly, on enquiry, the representative of this party failed to furnish any document regarding delivery of the shuttering material on the plea that the firm was closed in the year 1991 itself. Fourthly, voucher No. 109 clearly shows that transfer voucher was prepared on 6-4-1991, which has been cut off and is ante-dated showing the transfer date as 31-3-1991. This voucher shows a number of cutting with regard to the detail of the shuttering material claimed to have been purchased from this party. I will, therefore, not accept the claim of the appellant firm regarding purchase and delivery of the shuttering material from M/s. Steel Star Industries amounting to Rs. 11,94,180 before 31-3-1991. I may add that the claim of filing a letter from this party to the appellant firm regarding supply of Form No. ST-35 will not prove the purchase and delivery of this material before the end of the financial year 1990-91, which is required for our purpose. The only claim of the appellant firm that supports the purchase and delivery of the shuttering material before 31-3-1991 is the stamp of M/s. Wig Brothers (B&E) Delhi Area Project, which is, however, of no use in view of the other supporting, material regarding transportation hire charges which could have been available from the dispatch advise note.”
8. Against the aforesaid background, we have heard the rival parties. The basis argument of the counsel for the assessee is that the date of the delivery of the material was given on the back of the invoice and delivery note which was already filed before the assessing officer and that the said delivery note also makes a mention regarding the mode of transportation along with the stamp of receipt of goods by M/s. Wig Brothers (B&E) Delhi Area Project. According to the counsel, the said piece of evidence has been accepted by the CIT (A) with regard to the two suppliers while similar piece of evidence has not been accepted with regard to the third supplier M/s. Steel Star Industries while evaluating the claim of the assessee of delivery before the 31-3-1991. Our attention was drawn to the paper book to submit that the payment to the supplier has been made by the account payee cheque/drafts and it is not the case of the revenue that no purchases have been made. It was submitted that the bankers had also certified that the machinery financed by them was purchased and received by the assessee before 31-3-1991, a copy of which is placed at page 37 of the paper book filed before us. Our attention was also invited to the copy of invoices issued by the suppliers wherein the hirer had put its stamp of having received the material before 31-3-1991. Our attention was also drawn to the communication from Executive Engineer of I.G.I.A. which is placedon pages 54-58 of the paper book placed before us.
9. On the other hand, the learned Departmental Representative has defended the orders of the assessing officer. The Departmental Representative reiterated the contentions taken by the assessing officer.
10. We have heard the rival submissions and have also perused the orders of the lower authorities and other relevant material, which is placed before us. On the basis of the aforesaid, we proceed to dispose of the issue on the following lines. In so far as the grievance of the revenue against the order of the CIT (A) is concerned, at the outset, we may state that we do not find any merit in the same. The CIT (A) concludes that in so far as the purchase of shuttering material from M/s. S.B.J. India Ltd. and M/s. Bajaj Products is concerned, the same was supported by agreements entered with the respective parties in the months of February and March 1991 and the two parties were also paid advances by cheque against the supply of material; the proof of the delivery having been effected before 31st March was also gathered by the CIT (A) on the basis of the enquiries made with the respective suppliers. Such enquiries demonstrated the original dispatch advice note maintained by the supplier which, inter alia, recorded the truck number of each dispatch and the freight paid towards transportation etc. We find that none of these factual aspects have been rebutted by the department before us. In the absence of any material brought on record by the revenue, contrary to the aforesaid observation of the CIT (A), we do not see any reason to interfere with the conclusions drawn by the first appellate authority on the said issue. Therefore the revenue fails on this aspect.
11. Now, coming to the grievance of the assessee relating to the purchase of shuttering material from M/s. Steel Star Industries. Herein also, at the outset we may state that we do not find any infirmity in the conclusions drawn by the CIT (A) and the assessee has to fail for the reasons discussed hereinafter. From a perusal of the portion of the order of CIT (A) extracted by us in the earlier part of the order, it is clear that the results emerging on account of the enquiries conducted by the assessing officer at the instance of the CIT (A) in relation to the said transaction is on totally different footing vis-a-vis the purchases made from the other two suppliers. That the assessee could not produce any agreement of purchase as was the case with respect to the other parties; the claim of the delivery taken before 31-3-1991 could not be corroborated on the basis of any independent evidence from the supplier; that the transportation of goods could not be verified in the absence of any dispatch note, freight and transportation expenses etc.; that even the vouchers pertaining to the impugned transaction showed cutting of dates implying antedating; that the mere stamp of the hirer on the invoice raised by the supplier, was not enough to discharge the onus cast on the assessee for proving delivery before 31-3-1991.
12. The aforesaid conclusions drawn by the CIT (A), in our view, are fair and proper having regard to the facts and circumstances of the case. We find that during the course of remand proceedings by the assessing officer, it was noticed that the said supplier was found not carrying on the same business and therefore, the books and other material could not be made available for verification. The claim of the assessee that the said party was in existence and the disability to produce the records was because of the matter being old, is not enough to justify the acceptance of the claim that the material was transported and delivered before 31-3-1991. The only conclusion which can be drawn on the basis of the facts and evidence, as available, is that the onus of the assessee for demonstrating the delivery of shuttering of material before 31-3-1991 with regard to the purchases made from Steel Star Industries has not been discharged. Therefore, we sustain the conclusion drawn by the CIT (A) on this count.
13. Before we part, we may discuss the strong reliance placed by the assessee on the communication from Executive Engineer, I.G.I.A., Palam, placed on pages 54-58 of the paper book to argue that the shuttering material was available on the construction site of the hirer. We have carefully perused the same and find that it does not help the assessee in demonstrating receipt of material before 31-3-1991. The said communication merely refers to the existence of shuttering material on the site of the hirer in the month of the April, 1991 and does not indicate the position on 31-3-1991, the date which is critical for our purposes. We may mention here that the dispute is not whether or not the purchases have been effected by the assessee. The dispute revolves around as to whether the material was purchased and put to use before 31-3-1991 so as to make the assessee eligible for depreciation for the impugned year. Hence, we sustain the order of CIT (A) on this issue.
14. In the result, both the appeals, of the revenue as well the assessee stand dismissed.
