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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 ..... stained 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 - ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 seized excel sheet with respect to parties from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 order. 19. The CIT(Appeals) - 20, Chennai failed to appreciate that in any even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 2015-16 08.09.2015 10,89,38,240 11,02,35,450 12,97,210 2 2016-17 10.02.2017 5,52,28,000 NA 5,72,95,360 20,67,360 3 2017-18 23.01.2018 15,78,68,530 NA 19,07,00,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k 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 alleged bogus purchases as identified by Ld. AO. Upon perusal of the data as furnished by the assessee, we find only 4 parties have been identified by Ld. AO to be entirely bogus suppliers. These are M/s Sivasakthi Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. 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 of 1% to 1.7% depending upon the parties. Shri Vinoth, GM stated that entries with the description U.Ac were cash loans advanced by the Managing Partners of the assessee firm. Similarly, the entries with the description others were cash loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 did not verify loan parties as mentioned in the seized material. The Ld. CIT(A) rejected the same on the ground that these excel sheets contained details of both accounted and unaccounted loans advanced by assessee. The same was explained by Shri Vinoth i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 incomplete details and no date has been mentioned therein against alleged loans given by the assessee. It is also not mentioned who has given the loans and when the loans were given. Nothing could be deciphered on the basis of the same to substantiate the allegation that these are unaccounted loans given by the assessee during this year. None of the parties to whom alleged loans have been given, have not even been identified and no enquiries have been m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 situation with U.Ac segment which is also not supported by any primary record in the form of pro-note / security documents/ other collaterals forming part of the search records. The parties as mentioned in the sheet have nowhere been identified even and there is no independent investigation by Ld. AO to support its conclusion. The impugned addition, in our considered opinion, is based more on suspicion and surmises. Having searched the entire premises of the assessee, the search team could not bring on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue 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 the assessee. The Ld. AO is directed to recompute the income of the assessee in terms of our adjudication. 11. No arguments have been advanced on legal grounds. Further, no defect has been shown in the jurisdiction of Ld. AO. The corresponding grounds raised by the assessee stand dismissed. Conclusion 12. The revenue s appeal ITA No.1547/Chny/2024 stand dismissed. The assessee s appeal ITA No.1024/Chny/2024 stands partly allowed in terms of our above order. Order pronounced on 17th October, 2024 - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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