9911796707
TMI Blog2020 (1) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... which is hereby confirmed and ground of appeal of the revenue is rejected. - ITA No. 398/CTK/2018 - - - Dated:- 16-1-2020 - Chandra Mohan Garg , Member ( J ) And Laxmi Prasad Sahu , Member ( A ) For the Appellant : Sarita Mishra Kolhe , DR For the Respondents : P.K. Mishra , AR ORDER Chandra Mohan Garg, Member (J) 1. This is an appeal filed by the revenue against the order of the CIT(A),1, Bhubaneswar dated 20.8.2018 for the assessment year 2011-12. 2. The grievance of the revenue is that the ld. CIT(A) was not justified in deleting the addition of ₹ 4,12,30,153/- made by the Assessing officer disallowing the sub-contract expenditure claimed by the assessee in the name of M/s. Makeway Consultancy Pvt. Ltd., a separate entity. 3. The facts in brief are that the assessee, in the relevant assessment year, derives income from erection and commissioning of transmission lines on turnkey basis. During the course of assessment proceedings, the Assessing Officer noticed that the assessee incurs its major expenses as against purchases of raw materials required for the job and carries out the erection and installation job including civil works through va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficates showing supply of materials by the sub-contractor at various sites and certain other documents to show that its transaction with M/s. Makeway Consultancy Pvt. Ltd., were genuine. Keeping in view that some of the documents and evidences filed by the assessee as additional evidences, the ld. CIT(A) called for a remand report from the Assessing Officer for examination and verification of the same. The AO furnished the remand report dated 17.7.2018, which is as follows: In this case assessment proceeding under section 143(3) of the Lt. Act, 1961 was concluded on 31.03.2014 wherein the returned income of ₹ 5,78,14,287/- was enhanced to ₹ 9,90,44,440/-. The sole ground of addition was the bogus sub-contract expense claimed to be incurred by the assessee company in favour of one of the party with name style M/s. Makeway Consultancy Pvt. Ltd. of an amount of ₹ 4,12,30,153/-. During the course of assessment proceeding, it was noted by the AO that the alleged sub-contractor M/s. Makeway Consultancy Pvt. Ltd. has not filed its return of income for the A.Y. 2011-12 and only after the issuance of notice u/s. 148 of the I.T. Act, 1961, this sub-contractor f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assessment order has been passed on 29.9.2015 estimating the income. iv) The documents referred in the remand report are MRNs (certification of materials supplied by the sub-contractor i.e. M/s. Makeway Consultancy Pvt. Ltd. v) Makeway Consultancy was awarded to undertake civil works mainly involving sands, chips, steels cement, etc in the project site (Sterlite Energy Limited Project at Jharsuguda at CPP and IPP under 'construction of Lilo 400 KV DC line from PGCIL to Sterlite Energy Ltd. vi) The assessee has submitted ledger copies of the sub-contractor for relevant assessment years as well as subsequent assessment years and payments have been routed through banking channel. vii) Full proof documentary evidence were available with the assessee. 6. After considering the assessment order, remand report of the Assessing Officer as well as comments/objections thereon by the assessee, the ld. CIT(A) deleted the addition made by the Assessing Officer. Hence, the revenue is in appeal before us. 7. ld. CIT DR appearing on behalf of the revenue relied on the assessment order. 8. On the other hand, ld. counsel for the assessee supported the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consultancy (P) Ltd. had indeed performed any sub-contract work for the assessee-company. Copies of all the documents produced before the AO have been produced before me and I have examined all such documents including the invoices submitted by M/s. Makeway Consultancy (P) Ltd. The documents clearly indicate that M/s. Makeway Consultancy (P) Ltd. had indeed performed works in connection with 'construction of Lilo 400 KV DC Line from PGCIL to Sterelite Energy Ltd.' during the FY 2010-11 and raised bills accordingly. Only because no payments were made to the sub-contractor M/s. Makeway Consultancy (P) Ltd. during the FY 2010-11 and M/s. Makeway Consultancy (P) Ltd. had not made any payments against purchases made for the sub-contract works, it cannot be held that the bills raised by M/s. Makeway Consultancy (P) Ltd. are bogus. It appears that the conclusion of the AO in the assessment order is entirely based on suspicion and not on evidence. It is settled law that suspicion, however, strong cannot take the place of evidence. The AO has also not brought any evidence on record to show that the work for which sub-contract was given to M/s. Makeway Consultancy (P) Ltd. was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epting the receipts disclosed by the company at ₹ 4,23,00,063/- which include ₹ 4,12,30,153/- as receivable from the assessee company. We also find that the AO has not given any finding that M/s. Makeway Consultancy Pvt. Ltd. has not raised bogus bills in the name of the assessee company without doing any work for them. By accepting the contract receipt disclosed by the sub-contractor and by giving credit of tax deducted by the assessee company, the AO has accepted the fact that the sub-contractor do exists and executed the work, for which the payments though could not be made in this assessment year were paid in the subsequent assessment years. Therefore, the assessee company cannot be blamed and its genuine expenses cannot be disallowed on the ground that why the sub-contractor has not filed return of income voluntarily. Before us also no specific error in the order of the CIT(A) could be pointed out by ld. D.R. Therefore, we do not find any good reason to interfere with the order of the CIT(A), which is hereby confirmed and ground of appeal of the revenue is rejected. 11. In the result, appeal of the revenue is dismissed. Order pronounced on 16/01/2020. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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