9911796707
TMI Blog2019 (5) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... no noting of the cash returned were made in the seized material. No addition could be made in respect of the so-called cash payments outside the books of account as unexplained investment. The contentions of Shri Ajit Kumar Rai (Shetty), that no cash payment was received by him from the assessee cannot be brushed aside lightly and his averments have not been controverted by the authorities below. No material has been brought on record to disbelieve / discredit Shri Ajit Kumar Rai s (Shetty) claim; which supports the stand of the assessee that no cash payment was made as stated at the time of search. Therefore, making any addition on the basis of the assessee s statement at the time of search by ignoring the assessee s subsequent explanation / rebuttal, which is corroborated by the statement of Shri Ajit Kumar Rai (Shetty), is clearly not justified. Addition on account of differences in liabilities - HELD THAT:- In the course of hearing before us, the learned AR for the assessee did not file any reconciliation in respect of the difference in creditors balance; as already pointed out by the CIT(A). There is a difference of ₹ 1,14,172/- in the creditor s balances and this fact w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter, we are of the view that no interference is called for in the impugned orders of the CIT(A) on the issue of payments of speed money. Consequently, the grounds raised by Revenue on this issue are dismissed. Unexplained expenditure based on seized material A/HML/18 - HELD THAT:- From the orders of assessment, it is seen that the assessee has put forth the very same explanation before the AO, as was put forth before the CIT(A) and the addition was made as the relevant books of account were not produced at that point of time. Before the CIT(A), in the case of M/s. Indian Shipping Agencies Pvt. Ltd., it appears that the books of account of various group concerns were produced and after due verification, these additions have been deleted. Following the conclusions arrived at and findings rendered by the CIT(A) in the case of M/s. Indian Shipping Agencies Pvt. Ltd., the CIT(A) has deleted the additions made in the hands of the assessee in the case on hand as well. - Revenue grounds are dismissed. Short deduction of TDS on the payments to labour contractors - disallowances made u/s 40(a)(ia) - HELD THAT:- We find that the CIT(A) had rightly deleted these disallowances made u/s 40(a)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(a)(ia) can be made since there was no requirement to deduct TDS in the first place. In this view of the matter and after taking into account the facts and circumstances of the case on this issue, we are of the opinion that the CIT(A) s finding directing deletion of the disallowance made by the AO for any interference and is accordingly upheld. - Shri N. V. Vasudevan, Vice President And Shri Jason P Boaz, Accountant Member For the Assessee : Shri. V. Srinivasan, Advocate For the Revenue : Shri. K. V. Aravind, Advocate Standing Counsel for Department ORDER PER BENCH These are appeals by the assessee for Assessment Years 2003-04 to 2008-09 and cross appeals by Revenue for Assessment Years 2004-05 to 2008-09, directed against separate orders of the CIT(A)-VI, Bangalore, all dated 27.03.2012. Since common issues are involved in all these appeals, they were heard together and we deem it appropriate to dispose them off by way of this consolidated order. 2. Briefly stated, the facts relevant for disposal of these appeals are as under: 2.1 The assessee is a company carrying on the business of clearing and forwarding agents and custom house agents at Mangalore. A search and seizure acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unexplained investment, as well as machinery hire charges; and allowed partial relief in respect of disallowance made under the head tipper mamool. 3.1 Being aggrieved by the orders of CIT(A)-VI, Bangalore dated 27.03.2012 in the case on hand, the assessee has filed appeals for Assessment Years 2003-04 to 2008-09 and Revenue has preferred cross appeals for Assessment Years 2004-05 to 2008-09. We have heard and considered the submissions put forth by the learned AR for the assessee and the standing counsel for Revenue. We have also carefully perused the material placed before us by the learned AR (page 1 to 323), the list of citations, synopsis, written submissions; as well as the paper book filed by Revenue (pages 1 to 70) comprising written submissions, opinions of standing counsel and citations. We now proceed to dispose off these appeals by grouping all common issues raised by the assessee and Revenue in their respective appeals hereunder. Assessee s appeals in ITA Nos. 771 to 776/Bang/2012 for Assessment Years 2003-04 to 2008-09 4.1 The grounds raised in the assessee s appeals before the Tribunal, Assessment Year wise are extracted hereunder: Assessment Year 2003-04 1. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of such lists and further furnishing the same to each one of the assessees including the appellant, if the search were to have been considered as individually initiated against each one of the persons whose names are stated to have been specified in the warrant including the appellant; (v) That the assessment is also bad in law since the warrant is in the joint names of certain persons and not in their individual names and therefore, the assessee against whom the warrant is issued should be considered either as AOP or BOI consisting of such persons and such assessee entity alone could be considered as assessee or person against whom search proceedings are initiated and therefore, the provisions of Section 153A could be invoked only against AOP or BOI and not against the appellant, who is a member of such AOP/B01 to make a valid assessment in its separate status as either as company/individual/firm as the case may be having regard to the ratio of the Hon'ble Karnataka High Court, Circuit Bench, Gulbarga in ITA Nos.6005 Et 6006/2010, which is binding on the authorities below (vi) The learned A.O. has not discharged the burden of proving that there is a valid initiation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Assessment Year 2004-05 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of ₹ 3,22,500/- as unexplained investment in the purchase of property from Sri Ajith Kumar Rai relying on the erroneous initial declaration u/s.132[4] of the Act, made by Sri Mohiuddin, which has been explained by Sri Mohiuddin as incorrect subsequently that no such payment has been made, which has been substantiated by the examination of Sri Ajith Kumar Rai by the learned A.O. himself at the back of the appellant and thus the addition is on the erroneous appreciation of facts and purely on suspicion and surmise and consequently deserves to be deleted. 3. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or material inducing any belief but purely on the suspicion and therefore, the action u/s.132[1] is bad in law [224 ITR 19 (SC)] and consequent assessment U/S.153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. (iii) That the warrant issued in the joint names of the persons said to have been specified in the warrant is bad in law to initiate search in the individual cases of the several persons whose names are specified in the warrant although a joint warrant had to be issued in all the names of the occupants of the premises to seize their records, if warranted, which does not mean that search is initiated against each one of the occupants; (iv) That the search is also bad in law in that separate lists of the items seized belonging to each one of the assessees, which have to be prepared in accordance with the mandatory rule 112[9] of the I.T.Rules enjoining preparation of such lists and further furnishing the same to each one of the assessees including the appellant, if the search were to have been considered as individually initiated against each one of the persons whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to appreciate that a valid search is a sine qua non for making a valid asses sment under section 153A of the Act on the par ity of the ratio of the decision of the Hon ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. 10. The finding of the learned A.O. that the validity of search could not be questioned by relying upon several decisions is erroneous and is contrary to the decision of the jurisdictional High Court in the case of RAMAIH REDDY reported in 339 ITR 210 and therefore, the assessment requires to be cancelled. 11. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s.234A, 234B and 234D of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 12. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Assessment Year 2005-06 1. The orders of the authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, if the search were to have been considered as individually initiated against each one of the persons whose names are stated to have been specified in the warrant including the appellant; (v) That the assessment is also bad in law since the warrant is in the joint names of certain persons and not in their individual names and therefore, the assessee against whom the warrant is issued should be considered either as AOP or BOI consisting of such persons and such assessee entity alone could be considered as assessee or person against whom search proceedings are initiated and therefore, the provisions of Section 153A could be invoked only against AOP or BOI and not against the appellant, who is a member of such AOP/B01 to make a valid assessment in its separate status as either as company/individual/firm as the case may be having regard to the ratio of the Hon'ble Karnataka High Court, Circuit Bench, Gulbarga in ITA Nos.6005 6006/2010, which is binding on the authorities below (vi) The learned A.O. has not discharged the burden of proving that there is a valid initiation of the search u/s.132[1][a], [b] ft [c] of the Act, its execution and its completion in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution fees as part of the costs. Assessment Year 2006-07 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified under the facts and circumstances of the appellant as set out in Annexure-1 annexed, in sustaining a sum of ₹ 3,00,000/- as against a sum of ₹ 29,03,062/- made by the A.O. under explanation to section 37[1] in respect of tipper mamools as these expenses are not in the nature of bribes and are in the nature of customary mamools payable to the crew of the trucks, who bring cargo for loading or unloading from the ships in the port yard. 2.1 The disallowance sustained is only out of suspicion and surmise, assumptions and presumptions, without an iota of evidence and requires to be deleted. Grounds urged and not pressed before CITrA1 and again urged before the Hon'ble ITAT as additional grounds and application for their admission as additional grounds is separately filed. 3. The appellant denies itself liable to be assessed u/s.153A rws 143[3] of the Act under the impugned order on the ground - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search u/s.132[1][a], [b] a [c] of the Act, its execution and its completion in accordance with law to render the proceedings valid and to assume jurisdiction to make an assessment u/s.153A of the Act even when challenged before him and consequently, an adverse inference ought to be drawn and the assessment requires to be annulled. 4. The authorities below are not justified in denying the appellant the copy of the arrant and the materials inducing the belief in the existence of the condition specified in Section 132[1][a], [b] and [c] of the Act to issue the warrant and the satisfaction note recorded therein under the facts and in the circumstances of the appellant's case especially in the light of the decision of the jurisdictional high court in the case of SOUTHERN HERBALS reported in 207 ITR 55 and consequently, the assessment is bad in law and liable to be annulled. 5. The learned A.O. has erred in law in holding the appellant is not entitled to question the validity of the search in the course of the assessment proceedings and failed to appreciate that the search proceedings u/s.132 are in aid of ultimate assessment and a statutory appeal is provided against such asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the appellant's case. 3.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and contrary to the evidence and legal presumptions u/s.292C of the Act. 3.3 Without prejudice to the above, the addition made is excessive and liable to be reduced substantially. Grounds urged and not pressed before CITIA] and again urged before the Hon'ble ITAT as additional grounds and application for their admission as additional grounds is separately filed. 4. The appellant denies itself liable to be assessed u/s.153A rws 143[3] of the Act under the impugned order on the ground - (i) That the search initiated in the case of the appellant is illegal and ultra vires the provisions of Section 132[1][a], [b] and [c] of the Act; (ii) That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action u/s.132[1] is bad in law [224 ITR 19 (SC)] and consequent assessment U/S.153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. (iii) That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act to issue the warrant and the satisfaction note recorded therein under the facts and in the circumstances of the appellant's case especially in the light of the decision of the jurisdictional high court in the case of SOUTHERN HERBALS reported in 207 ITR 55 and consequently, the assessment is bad in law and liable to be annulled. 6. The learned A.O. has erred in law in holding the appellant is not entitled to question the validity of the search in the course of the assessment proceedings and failed to appreciate that the search proceedings u/s.132 are in aid of ultimate assessment and a statutory appeal is provided against such assessment and therefore the issue of validity of search is an adjudicatory and justiciable issue, which had to be adjudicated by the A.O. to assume jurisdiction to make a valid assessment. 7. The learned A.O. failed to appreciate that a valid search is a sine qua non for making a valid assessment u/s.153A of the Act on the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80. 8. The finding of the learned A.O. that the validity of search could not be questioned by relying upon several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act under the facts and in the circumstances of the appellant's case. The addition made is on the erroneous appreciation of facts and purely on suspicion and surmise, assumptions and presumptions and contrary to evidence and consequently deserves to be deleted. 5. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s. 234B and 234C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Revenue s Appeals in ITA Nos. 818 to 822/Bang/2012 for Assessment Years 2004-05 to 2008-09 4.2 The grounds raised in Revenue s appeals before the Tribunal in these Assessment Years are extracted hereunder: Assessment Year 2004-05 1.1 The Ld. C.I.T. (Appeals) erred in deleting the speed money amounting to ₹ 45,00,000 through port labor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he monitory limit and not on principle. 1.5 The Ld. C.I.T (Appeals) failed to appreciate the fact the in the case Sri Maddi Venkataraman and Co. (p) Ltd. v. CIT reported in 229 ITR 534 (1998), the Hon'ble Supreme Court has clearly stated that any payment for infraction of law cannot be allowed. 2. The Ld.CIT(A) erred in law in deleting the disallowance of ₹ 31,59,286/- made u/s. 37(1) of the I.T.Act as the expenditure incurred towards tipper mamool by the assessee was prohibited by law and opposed to public policy. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting the addition made as unexplained expenditure of ₹ 59,67,500/-. 4. For these and such other grounds that may be urged at the time of hearing the orders of Ld. CIT(A) may be set aside and that of assessing officer may be restored. Assessment Year 2006-07 1.1 The Ld. C.I.T. (Appeals) erred in deleting the speed money amounting to ₹ 4,67,17,395/-. 1.2 The Ld. C.I.T. (Appeals), failed to appreciate the fact that, the assessee has failed to prove that whole of such expenditure said to have been incurred in the interest of business expediency. 1.3 The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law cannot be allowed. 2. The Ld.CIT(Appeals) failed appreciate the fact that the declaration made by the assessee ₹ 1,35,00,000 u/s 132(4) of the I T Act was voluntary and binding on the assessee. The Ld.CIT(Appeals) is erred by linking the speed money issue to the voluntary declaration made by the assessee during the search. 3. The Ld.CIT(Appeals) has made factual error by stating that ₹ 40,79,000 added protectively as unexplained investment of the assessee has been substantially confirmed by the CIT(A) in the case of Shri Mohiuddin. But fact is that in the case of shri Mohiuddin also, same income is added protectively. The 0T(A) in the case of Shri Mohiuddin has dismissed his appeal but not stated that the same has to be substantially assessed in his hands.(The income is substantially assessed in the hands of Smt.Shahnaz Mohiuddin and her appeal is pending before CIT(A)-V1,Bangalore.) 4. The Ld.CIT(A) erred in law in deleting the disallowance of expenses ₹ 3,10,000/- made u/s.40(a)(ia) of the I.T.Act. 5. The Ld.CIT(A) erred in law in deleting the disallowance of ₹ 68,70,956/-made u/s.37(1) of the I.T.Act as the expenditure incurred towards tipper mamool ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther grounds that may be urged at the time of hearing the orders of Ld. C.I.T (A) may be set aside and that of assessing officer may be restored. Ground Nos.3 to 6 and Additional Grounds for Assessment Year 2003-04 Assessee s appeals Ground Nos. 6 to 10 and Additional Grounds for Assessment Year 2004-05 Ground Nos. 3 to 7 and Additional Grounds for Assessment Year 2005-06 Ground Nos. 3 to 7 and Additional Grounds for Assessment Year 2006-07 Ground Nos. 4 to 8 and Additional Grounds for Assessment Year 2007-08 5.1 At the outset of the hearings, the learned AR for the assessee submitted at the Bar before the Bench that the assessee is not pressing ground Nos. 3 to 6 and additional grounds raised in its appeal for Assessment Year 2003-04; Ground Nos. 6 to 10 and Additional Grounds raised in its appeal for Assessment Year 2004-05; ground nos. 3 to 7 and additional grounds raised in its appeals for Assessment Years 2005-06 and 2006-07 and ground Nos. 4 to 8 and additional grounds for Assessment Year 2007-08. In view of the assessee not pressing the aforesaid grounds in these appeals, the same are dismissed as not pressed. Assessee s appeals charging of interest under section 234A, 234B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed income. Later, under the letter dated 15/04/2008, Shri Mohiuddin, retracted the aforesaid disclosure and it was contended before the A.O. that an abandoned ledger of Indian Shipping Agency that was used to make certain jottings and notings, which were all not accurate. The A.O. rejected the said contention by observing that the cheque payments made as noted in the seized materials were tallying with the sale deed under which the assessee purchased the property from Ajith Kumar Rai. Hence, the learned A.O. held that the cash payments noted therein would have to be considered as true and invoked the provisions of section 292C of the Act. [d] The assessee contended before the learned C1T[A] that the notings made in page [61] of the seized material A/HML/18 were not accurate and that the Assessing Officer had summoned Ajith Kumar Rai, in course of assessment proceedings and had examined him. Copy of the statement of Ajith Kumar Rao, is placed at pages 83 to 88 of the Paper book. [e] It was contended that Sri Ajith Kumar Rai had denied the receipt of any cash in the statement on oath given before the A.O. Thus, the erroneous entries made in the seized material, which is a abandone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the cash payments are not recorded therein. He referred to the admission of the Managing Director (M.D) of the assessee at the time of search vide statement under section 132(4) of the Act dated 18.01.2018 and contended that the subsequent retraction by the assessee on 15.04.2008 was not based on any evidence to show that there were no cash payments made. The learned Standing Counsel submitted that in view of the above, the additions were rightly made and the CIT(A) has correctly sustained the said additions. 7.3.1 We have considered the rival submissions / contentions put forth and perused the material on record. In the course of search proceedings, a ledger belonging to Indian Shipping Agencies Pvt. Ltd., was found wherein several transactions were recorded on various pages thereof. Page 61 of the said ledger contained the account of Shri Ajit Kumar Shetty (Rai) in which there were recorded several payments made on different dates; both by cash and cheque. It was explained that these payments were made by the assessee company for purchase of a property. At the time of search, the M.D. of the assessee company stated that the cheque payments recorded in the said ledger were recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter cheques were given, but no noting of the cash returned were made in the seized material. Considering the factual matrix of the case, as discussed above, we are of the considered view that no addition could be made in respect of the so-called cash payments outside the books of account as unexplained investment. The contentions of Shri Ajit Kumar Rai (Shetty), that no cash payment was received by him from the assessee cannot be brushed aside lightly and his averments have not been controverted by the authorities below. No material has been brought on record to disbelieve / discredit Shri Ajit Kumar Rai s (Shetty) claim; which supports the stand of the assessee that no cash payment was made as stated at the time of search. Therefore, making any addition on the basis of the assessee s statement at the time of search by ignoring the assessee s subsequent explanation / rebuttal, which is corroborated by the statement of Shri Ajit Kumar Rai (Shetty), is clearly not justified. In this view of the matter, we find that the additions of ₹ 7,50,000/- for Assessment Year 2003-04 and ₹ 3,22,500/- for Assessment Year 2004-05 to be factually unsustainable and accordingly delete the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee s appeal for Assessment Year 2004-05 is dismissed. 9. Ground No.5 and 5.1 (Assessment appeal for Assessment Year 2004-05) Ground No.2 and 2.1 (Assessee s appeal for Assessment Years 2005-06 to 2008-09) Tipper Mamools Ground No.2 (Revenue s appeal for Assessment Years 2004-05 and 2005-06) Ground No.3 (Revenue s appeals for Assessment Year 2006-07) Ground No.5 (Revenue s appeals for Assessment Year 2007-08) Ground No.4 (Revenue s appeals for Assessment Year 2008-09) 9.1 In these grounds in the assesse s appeal (supra) for Assessment Years 2004- 05 to 2008-09, the assessee challenges the CIT(A) s action in partly sustaining the disallowance of expenses claimed as Tipper Mamools. Revenue is also in appeal on this issue, and in the grounds raised (supra) for Assessment Years 2004-05 to 2008-09, against the relief granted by the CIT(A). The addition sustained by the learned CIT(A) challenged by the assessee are ₹ 2,00,000/- (ground Nos.5 and 5.1) for Assessment Year 2004-05; ₹ 3,50,000/-, ₹ 3,00,000/-, ₹ 7,50,000/- and ₹ 21,00,000/- (Ground Nos. 2 and 2.1) for Assessment Years 2005-06 to 2008-09. Revenue has challenged the deletion of ₹ 19,93,623/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pporting evidence given by the assessee and in remand proceedings, the vouchers were examined afresh and a report was rendered for the limited purpose of ascertaining the expenses that related to payments made to government officials. According to the learned Standing Counsel, the assessee had not discharged the burden of proving that these expenses were incurred for the purposes of its business and therefore the disallowances made by the AO from out of Tipper Mamool expenses claimed ought to be restored. 9.4.1 We have heard and considered the rival contentions and perused the material on record. The facts of the matter, as emanate from an appraisal of the record before us, is that in the course of assessment proceedings, the AO noticed that the assessee had claimed expenditure under the head Tipper Mamools in respect of the transportation business carried on by the assessee. The AO noted that the assessee had produced vouchers in respect of these expenses claimed and some of these vouchers were also found and seized in the course of search. The assessee submits that the amounts claimed as Tipper Mamools were small amounts paid in cash to crew members of the trucks for incurring wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat substantial part of the addition / disallowance made out of the expenditure claimed on tipper mamools represents legitimate business expenditure like hotel bills, port pass, crew / driver s batta, labour charges, etc. Some notations with regard to the expenses bearing the CISF, Customs, NMPT, etc., are also found in the vouchers and this is explained to be expenditure incurred at that station and not payments of illegal gratification to government officials. In the factual matrix of the case on this issue, as discussed above, we are of the view that the aforesaid explanations put forth by the assessee are plausible and not farfetched. Revenue has not doubted that the assessee had to make payments to truck drivers and truck crews for incurring wayside expenses and certain reimbursement of expenses incurred by these transportation crews have been claimed. No proof has been brought on record by the AO to establish that the references to expenses incurred by transportation crews at various stations like CISF, Customs, etc., are in respect of illegal gratifications paid to any government officials, in order to come to and take any adverse view against the assessee. Taking into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler truck and ₹ 100 for a Six wheeler truck and these were not recorded in the main cash book of the assessee. [c] In course of assessment proceedings it was explained to the A.O. that these machine hire charges were collected and distributed amongst the workers, who share the collections with the truck drivers, machine operators, etc. The said explanation of the assessee was rejected by the A.O. stating that the assessee did not give any corroborative evidence to support the said plea. Reliance was placed on the statement of Asif and the failure of Sri A.Mohiuddin, the Managing Director of the assessee company, to correct the erroneous statement at the time of search. The learned CIT[A] confirmed the addition stating that no evidence was furnished by the assessee. [d] It is submitted that the authorities below ought to have appreciated that small sums of ₹ 100 and ₹ 160 per vehicle collected at the time of unloading was not the receipts of the assessee company. The said amount was collected and distributed amongst the workers and machine operators, etc. The explanation of the assessee ought to have been considered on the preponderance of probabilities and the rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted towards machinery hire charges as per the seized materials found at the time of search did not belong to it and it was used for distribution amongst the staff and other members of the gang / crew that was carrying out the work. It is also seen that the AO and CIT(A) have relied on the statement of Shri Asif, the assessee s employee, given at the time of search that this shows that these amounts were being collected and recorded as such in the seized materials. Considering the fact that the material found shows the collection of cash, which was not recorded in the assessee s books of account, we are of the considered view that the addition made on this account is justified. In this view of the matter, we find no reason to interfere with the order of the CIT(A) on this issue and consequently dismiss the ground Nos. 3.1 to 3.3 raised by the assessee for Assessment Years 2007-08 and 2008-09. 11. Ground No.4 - Unexplained investment in property (Assessee s appeal for Assessment Year 2008-09) 11.1.1 This ground in the assessee s appeal for Assessment Year 2008-09 is with reference to the addition of ₹ 40,00,000/- made as unexplained investment in property. According to the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registered sale deed. In similar circumstances, in Assessment Years 2003-04 and 2004-05, while dealing with ground No.2 raised by the assessee in those Assessment Years on the issue of unexplained investment in property (supra), we had taken the view that the assessee s contention that no cash was paid for purchase of property, as noted in the seized material, stands corroborated by the statements recorded by the AO from the vendor. In the present instance too the three vendors, in their statements before the AO, have denied receipt of consideration over and above the consideration mentioned in the registered sale deed. The aforesaid statements of these vendors (copies placed at pages 89 to 97 of paper book) cannot be brushed aside lightly and their statements have neither been discredited nor any material brought on record by the authorities below to controvert their statements. In this factual matrix of the case, we hereby delete the addition of ₹ 40,00,000/- made for Assessment Year 2008-09. Consequently, ground No.4 raised by the assessee on this issue for Assessment Year 2008-09 is allowed. 12. In the result, assessee s appeals for Assessment Years 2003-04 to 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etailed examination made of the facts with regard to the genuineness of the payments; as has been done in these assessments pursuant to search conducted in the assessee s case. In the light of the above, it was prayed that the decision of the CIT(A) on this issue be reversed. 12.3 Per contra, the learned AR for the assessee supported the impugned orders of the CIT(A) on this issue and placed reliance upon the order of the Co-ordinate Bench of this Tribunal in the assessee s own case for Assessment Year 2005-06 in ITA No.1209/Bang/2009 dated 30.06.2010. The learned AR further submitted that the similar issue of speed money payments was decided in favour of the assessee Co-ordinate Benches of this Tribunal in the assessee s own case in ITA No.1120/Bang/2016 vide order dated 26.07.2013 for Assessment Year 2009-10 and in ITA No.1439/Bang/2014 vide order dated 08.05.2015 for Assessment Year 2010-1. The learned AR drew the attention of the Bench to the materials adduced before the CIT(A) to show the practice for payment of speed money, which was prevalent in the new Mangalore Port Trust (NMPT). In this regard, it is submitted that the CIT(A) called for a remand report from the AO and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 2009-10 and 2010-11 (supra). In this factual and legal matrix of the case, as discussed above, we are of the view and hold that the CIT(A) was justified in deleting the disallowance of speed money on the ground that it was paid to port labourers who are employees of New Mangalore Port Trust. 12.5.1 We now have to consider the objections raised by the learned Standing Counsel with regard to the genuineness of the expenditure on the ground that the vouchers did not bear the signature of all the persons to whom the payments were made and that some of the port labourers examined at the time of search had denied the receipt of the speed money. We find that, on this aspect, the learned CIT(A) passed an order under section 250(4) of the Act on 18.03.2011 and had called for a remand report on this issue of Speed Money payments from the AO; with the following directions: (i) Ascertain the practice and the rates for making the payment to the port labourers through the Stevedores Association, labour unions and New Mangalore Port Trust for providing various services by the port labourers. (ii) After conducting such enquiries, the Assessing Officer has to verify the evidences seized during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborately discussed in the assessment orders u/s 153A while disallowing the expenses under this head. 12.5.3 Considering the aforesaid findings and the AO s remand report, the CIT held that the assessee has followed the established the practice for payment of speed money prevalent at New Mangalore Port Trust in accordance with the rates fixed in the agreement with the labour unions. The CIT(A) did not give much importance to the denial of certain labourers for having received speed monies; which was termed as understandable. For these reasons, the CIT(A) deleted the disallowances made by the AO in the impugned orders of assessment; which we have carefully examined and find no cause for interference therein or deviation therefrom. Considering the AO s remand report and the enquiries made at the relevant point in time, it is seen that even on facts, the assessee has been able to establish the genuineness of the expenses claimed under this head and we find that there is no adverse material on record to establish that there is any inflation of expenses by the assessee. In this view of the matter, we are of the view that no interference is called for in the impugned orders of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pping Agencies Pvt. Ltd., rendered after examining the books of account of various group concerns was correctly relied upon by the CIT(A) in the case on hand for deleting the additions. It was also submitted by the learned AR that no further appeals were filed by Revenue against the orders of the CIT(A) in the case of M/s. Indian Shipping Agencies Pvt. Ltd., and therefore the matter had attained finality. In this regard, the learned AR took us through the impugned appellate orders of the CIT(A) to point out the findings recorded in respect of each item of addition made in the case of M/s. Indian Shipping Agencies Pvt. Ltd., on substantive basis. 13.4 We have considered the rival submissions / contentions and perused the material on record. In the course of search, a ledger belonging to M/s. Indian Shipping Agencies Pvt. Ltd., was found and seized as item A/HML/18. In this ledger, details of certain payments were noted on several pages for various years and the AO made additions considering these payments as unexplained expenditure incurred by the assessee. Protective additions were also made, in respect of these very same additions, in the case of M/s. Indian Shipping Agencies Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2007-08 and ground No.3 for Assessment Year 2008-09 in respect of deletion of disallowances under section 40(1)(ia) of the Act, amounting to ₹ 3,10,000/- and ₹ 50,969/- respectively, in respect of short deduction of TDS on payments made to contractors. 14.2 On this issue, the learned Standing Counsel for Revenue relied on the finding rendered by the AO in the orders of assessment for Assessment Years 2006-07 to 2008-09, while the learned AR for the assessee supported the orders of the CIT(A) in the impugned orders. 14.3 After having heard and considered the rival contentions / submissions and the material on record, we find that the CIT(A) had rightly deleted these disallowances made under section 40(a)(ia) of the Act, holding that it would amount to duplication. The CIT(A), on examination of the details on record in this regard, found that the said payments made to sub-contractors in these years was in respect of speed money and hence there was no obligation to deduct tax at source thereon. It is however seen that the impugned disallowances were made on the ground that there is short deduction of TDS and it is not a case of failure to deduct tax at source. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased in the name of Shri Mohiuddin and Smt. Shahanaz Mohiuddin and the additions were only made protectively in the hands of the assessee. It was contended that the CIT(A) was not justified in deleting the addition without ascertaining the fate of the substantive addition. 15.3 Per contra, the learned Counsel for the assessee relied upon the finding rendered by the CIT(A) in the impugned order to submit that there is no material on record to connect the aforesaid investment made to the assessee. According to the learned AR, the said property was not purchased by the assessee or from out of the funds of the assessee and therefore, there was no justification to make any addition at all; either on substantive or protective basis. 15.4 We have considered the rival contentions / submissions and perused the material on record. The CIT(A), while deleting the addition of ₹ 40,79,000/- in the case on hand, observed that the substantive addition was sustained in the hands of Shri. A. Mohiuddin, M. D. of the assessee company and therefore, the protective addition made in the case on hand was to be deleted. We are not aware / informed as to the fate or present status of the appeal filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs; i.e., M/s. S. S. Associates and M/s. Divya Enterprises and Vouchers in support were produced before the AO. The AO, however, rejected the same because the seized vouchers were prepared in the names of M/s. S. S. Associates and M/s. Divya Enterprises. In that view of the matter, the AO invoked the provisions of section 40(a)(ia) of the Act to make the disallowances since no TDS has been made on the payments made. 16.2.2 The learned Standing Counsel submitted that the CIT(A) had deleted the disallowances made under section 40(a)(ia) of the Act by recording a finding that the vouchers for payments were produced and each payment made was less than ₹ 20,000/-. It is contended that the CIT(A) erred in accepting the claim of the assessee that these cash payments were not part of the contract payments to M/s. S. S. Associates or M/s. Divya Enterprises. According to the learned Standing Counsel, the entire vouchers produced and the explanations put forth was an after thought by the assessee to extricate itself from the disallowance made by the AO. It is submitted that , in view of the above, the disallowance under section 40(a)(ia) of the Act made by the AO ought to be restored si ..... 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