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TMI Blog2024 (10) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... and sustained by us. Thus, the total addition as estimated by us would be Rs.5,65,08,558/-. The assessee has already offered additional income of Rs.5,53,25,652/-. Therefore, the balance addition as sustained by us would be Rs.11,82,906/-. No relief could be granted against GST component. The Ld. AO is directed to restrict the impugned additions to the extent of Rs.11,82,906/-. Disallowance of sub-contractor s expenses - We find that such expenses have been quantified at Rs.157 Lacs whereas the assessee has admitted partial income to the extent of Rs.140.18 Lacs only. The remaining component is GST component which also could not be allowed to the assessee on the ground that expense itself is bogus. The bogus GST component so paid has been adjusted from output GST liability.The assessee has avoided GST payment to that extent. Therefore, no interference is required in the orders of lower authorities, on this issue. The grounds raised by the assessee stand dismissed. Addition of unexplained investment u/s 69 - addition has been made solely on the basis of loose excel sheet found during search and statements record therein - HELD THAT:- As in Kranti Impex Pvt. Ltd. [ 2018 (3) TMI 424 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 5. The CIT (Appeals) - 20, Chennai erred in confirming the addition of Rs.4,93,51,199/- being purchases claimed in books of account maintained by the appellant based on excel sheet found at the time of search without assigning proper reasons and justification. 6. The CIT (Appeals) failed to appreciate that the disputed purchases were genuine and further ought to have appreciated that the confirmations were furnished from all the parties pertaining to the disputed purchases establishing its genuineness there by vitiating the related findings in the impugned order. 7. The CIT (Appeals) failed to appreciate that the disputed purchases were made through proper banking channels and further ought to have appreciated that in the absence of any conclusive evidence with respect to the flow of money returned to the Appellant, the presumption of bogus purchases is wholly unjustified and not sustainable both on facts and in law. 8. The CIT (Appeals) failed to appreciate that the Appellant had suo-moto disallowed the purchases pertaining to the seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) - 20, Chennai failed to appreciate that there was no independent examination carried out by the Revenue to examine the said parties to test the stand of the Appellant and ought to have appreciated that there was no unaccounted financial transaction which could be deduced from the disputed seized material for making the addition. 17. The CIT (Appeals) - 20, Chennai failed to appreciate that financial transactions entered into by the Appellant during the financial year relevant to the assessment year under consideration were duly recorded in the books of accounts forming part of the return of income filed and hence ought to have appreciated that the addition made based on the invalid evidence backed by the Revenue's suspicion and surmises should he reckoned as nullity in law. 18. The CIT (Appeals) - 20, Chennai failed to appreciate that the explanation offered by the Appellant was not considered in proper perspective while dealing with the grounds raised and further ought to have appreciated that the factual position was further clarified by the Partner of the Appellant firm during the post search proceedings there by vitiating the related findings in the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.9190 Lacs. The subject matter of revenue's appeal is relief granted by Ld. CIT(A) on account of bogus purchases for Rs.209.82 Lacs. 1.4 The Ld. AR advanced arguments and referred to various documents as placed on record. The Ld. CIT-DR also advanced arguments and supported the orders of lower authorities. This appeal was heard along with other appeals of the assessee for several assessment years. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 1.5 The assessee being resident firm filed return of income for this year u/s 139(1). The assessee was subjected to search action u/s 132 on 2810-2020. Accordingly, an assessment was framed u/s 143(3) r.w.s. 153A on 04-05-2022 making certain additions in the hands of the assessee. Post search-proceedings, notice u/s 153A was issued to the assessee on 30-04-2021. The assessee filed return of income and disclosed certain additional income. The details of the same could be tabulated as under: - X A.Y. Date of filing of return u/s 139(1) Income returned u/s 139(1) Income assessed u/s.143(3) Returned Income u/s.153A Rs. Additional Income disclosed Rs. A B C D E F (F-D) 1 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were bogus purchases. After examining the factual position vis-à-vis seized material and explanation furnished by the assessee, Ld. CIT(A) reached a conclusion that out of impugned addition, the party-wise break up with respect to purchases for Rs.209.82 Lacs was not provided by Ld. AO to the assessee. The same was simply categorized as 'others'. No reasons have been given by Ld. AO for not disclosing party-wise details of such purchases. Therefore, the addition, to that extent, could not be sustained. With respect to remaining purchases of Rs.493.51 Lacs, the assessee did not furnish evidences to prove the genuineness of the purchases and therefore, the addition to that extent was sustained. The same has led to cross-appeals before us. 2.3 We find that during the course of search proceedings, adequate evidences were found that the assessee booked bogus purchases from certain parties. The purchases so made lacked supporting documents and the money as paid through banking channels were received back by the assessee. The list of such parties totalling 20 in number has been extracted on para 3.4 of the assessment order. The Ld. AR has placed on record the complete details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) confirmed the same. Aggrieved, the assessee is in further appeal before us. 3.2 We find that such expenses have been quantified at Rs.157 Lacs whereas the assessee has admitted partial income to the extent of Rs.140.18 Lacs only. The remaining component is GST component which also could not be allowed to the assessee on the ground that expense itself is bogus. The bogus GST component so paid has been adjusted from output GST liability. In other words, the assessee has avoided GST payment to that extent. Therefore, no interference is required in the orders of lower authorities, on this issue. The grounds raised by the assessee stand dismissed. 4. Addition of unexplained investment u/s 69 for Rs.9190 Lacs. 4.1 This addition is based on excel sheet titled '15.04.2019' and 'sheet1' as found during search and the same was seized vide Annexure ANN/KKM/VSCO/LS/S-2 (page nos. 39 to 43). The same contained details of accounted and unaccounted loan transactions. Shri Vinoth stated that the entries made as 'Ac' were accounted loans advances by the assessee and its related concerns. 4.2 The Ld. AO noted that loans were advanced to various parties and interest was charged at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee' submissions, Ld. AO added the sum of Rs.91.90 Crores as unexplained investment u/s 69. Aggrieved, the assessee assailed the same before first appellate authority. 4.4 The Ld. CIT(A) noted that with respect of seized excel sheets, sworn statements were recorded from Sri Vinoth, GM and Shri Anandavadivel, on 30-10-2020 and 30-04-2021 respectively. They explained the nature of transactions as well as meaning of certain letters as mentioned against such transactions in seized material. Shri Vinoth identified the accounted as well as unaccounted loan transactions. The unaccounted loans were for Rs.63.75 Crores whereas Rs.28.15 Crores was unaccounted loans received from others and advanced to various related parties. Shri Anandavadivel agreed the aforesaid loans were outstanding for this year and the same was sourced out of inflation of expenses, unaccounted interest earned on unaccounted loans, amounts received back. The AO verified and found that the transactions bearing abbreviation 'Ac' was appearing in regular books. The assessee contended that these were nothing but referred loans only. Another contention was that seized sheets had no evidentiary value. Further. Ld. AO d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,75,000.00 18 3 G.F. 12,00,00,000.00 1.25 15,00,000.00 15 4 PPR 4,50,00,000.00 1.40 6,30,000.00 16 5 ALEV 3,50,00,000.00 1.404 4,90,000.00 16 6 NSS 50,00,000.00 1.25 62,500.00 15 8 FOODS 35,00,000.00 1.00 35,000.00 12 7 Venkat 10,00,00,000.00 1.00 10,00,000.00 12 9 Karthi (ED) 75,00,000.00 1.60 1,20,000.00 19 10 Mani (ED) 50,00,000.00 1.50 75,000.00 18 11 RJM 15,00,000.00 1.50 22,500.00 18 TOTAL 63,75,00,000.00 86,60,000.00 1 NMS 7,65,00,000.00 1.00 7,65,000.00 12 2 FOODS 1,00,00,000.00 1.00 1.00,000.00 12 3 FOODS 30,00,000.00 1.00 30,000.00 12 4 Mohan 1,00,00,000.00 1.00 1,00,000.00 12 5 Mohan 20,00,000.00 1.00 20,000.00 12 6 Rent 8,00,00,000.00 1.25 10,00,000.00 16 7 Venkat 10,00,00,000.00 1.00 10,00,000.00 12 TOTAL 28,15,00,000.00 30,15,000.00 1 Vanika 10,00,000.00 2 Sathyam 1,50,00,000.00 3 Yugan 1,50,00,000.00 Total 3,10,00,000.00 Ac 32,90,00,000.00 38,20,000.00 U.Ac 63,75,00,000.00 86,60,000.00 Others 28,15,00,000.00 30,15,000.00 Inv 3,10,00,000.00 Total 1,27,90,00,000.00 1,54,95,000.00 Upon perusal of the same, it could be seen that the sheet has i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof. The same lead to double taxation which is impermissible. All these factors lend credence to the arguments of Ld. AR. 8. During proceedings before lower authorities, the assessee has challenged the evidentiary value of the disputed loose sheet / excel sheet especially in the absence of any direct corroborative evidence for movement of funds. It was stated that there was no reference to any date in the disputed single page excel sheet and hence the assessment of the disputed sums was without any basis. On the closer scrutiny of the disputed sheet, it could be seen that there are different disputed segments including "Ac", "U.Ac" and "Others". Insofar as the segment relating to "Others" aggregating to Rs.28.15 Crores is concerned, it has clearly been brought out that these amounts were not transacted by the assessee but the same represent amounts lent by various parties to various persons having no tax implication in the hands of the assessee. There are no primary records in the form of pro-note / security documents / other collaterals forming part of the search records in corroboration of suspicion of the revenue. Similar is the situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-08-2024 which is reported as 165 Taxmann.com 846. We are of the opinion that aforesaid principle as laid down by Hon'ble Court would apply to the facts of the present case before us and the same strengthens the arguments of Ld. AR. Similarly, Mumbai Tribunal, in the case of ITO vs. Kranti Impex Pvt. Ltd. (ITA No.1229/Mum/2013) held that when the seized papers were undated having no acceptable narration and did not bear the signature of any party, they are in the nature of dumb documents having no evidentiary value and could not be taken to be the sole basis for determination of undisclosed income of the assessee. The onus would be on revenue to collect cogent evidences to corroborate the nothings therein. The ratio of other decisions as cited by the assessee during first appeal also supports the case of the assessee. 10. Upon cumulative consideration of aforesaid facts and reasoning, we would hold that impugned additions as made by Ld. AO merely on the basis of loose sheets without any corroboration thereof, was not adequate enough to draw adverse inference of unaccounted loans by the assessee-firm. Therefore, we delete the same and allow the corresponding grounds as raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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