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TMI Blog2024 (10) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... ication / enquiries from alleged bogus sub-contractors. AO could not proceed merely on the basis of findings of earlier years. The search has happened in the middle of the year and there are not adequate evidences to hold that the expenditure as incurred throughout the year is bogus. Considering the nature of assessee s business, the assessee would require services of sub-contractors. In the light of all these facts and to plug the leakage of revenue, we estimate addition of 25% against this item. The same comes to Rs. 32,80,189/-. The impugned addition stands restricted to that extent. The corresponding grounds stands partly allowed. Addition of undisclosed interest income - alleged by Ld. AO that the assessee advanced undisclosed loans - HELD THAT:- We find that the quantum addition as made by Ld. AO for alleged loans in AY 2020-21 has been deleted by us in [ 2024 (10) TMI 1148 - ITAT CHENNAI] . This is consequential addition. Since the basis of the addition goes, the consequential addition would not have any legs to stand. Therefore, this addition stands deleted. The grounds raised by the assessee stand allowed. - Hon ble Shri Aby T. Varkey, JM And Hon ble Shri Manoj Kumar Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in law. 7. The CIT (Appeals) failed to appreciate that the Appellant had placed on record the relevant documents establishing the actual purchases made from the disputed parties and further ought to have appreciated that having not disputed the turnover reported by the Appellant, the denial of claim of purchases relatable to such sale should be reckoned as nullity in law. 8. The CIT (Appeals) failed to appreciate that in any event the assessment of disputed purchases in its entirety is wholly unjustified and further ought to have appreciated that in any event the profit embedded on such purchases alone can be subjected to tax there by vitiating the partial addition sustained in this regard. 9. The CIT (Appeals) erred in sustaining the disallowance of Rs. 1,31,20,755/- being the payments made to sub-contractors as bogus without assigning proper reasons and justification. 10. The CIT (Appeals) failed to appreciate that the having taken on record the relevant documents for establishing the genuineness of the subcontracts at every stage of the proceedings of assessment as well as the appellate proceedings, the findings recorded for sustaining the disputed sum as bogus payments was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be reckoned as nullity in law. 19. 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. 20. The CIT (Appeals) - 20, Chennai failed to appreciate that in any event the assessment of such presumed unexplained investment in the hands of the Appellant firm there by negating the addition made in this regard. 21. The CIT (Appeals) - 20, Chennai failed to appreciate that the entire re computation of the taxable total income on various facets was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 22. The CIT (Appeals)-20, Chennai failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as tabulated in para 3.4 of the assessment order. 2.2 The assessee denied having made any bogus purchases and submitted that such inference was on mere presumption. However, Ld. AO noted that Shri Vinoth admitted that some of the parties were 100% bogus parties whereas some parties provided few bogus invoices. Therefore, Ld. AO added the amount of Rs. 1168.34 Lacs to the income of the assessee. 2.3 During appellate proceedings, the assessee submitted that it furnished complete details of inward in this year and Ld. AO made addition without any verification. The Ld. AO did not identify any party as bogus supplier and did not examine any of the suppliers to support its allegations. 2.4 The Ld. CIT(A) noted that Ld. AO could make one-to-one link in one or two cases between bogus purchases recorded in seized loose sheets in names of few parties and purchase bills raised in their names without supporting documents. Shri Vinoth identified 100% bogus purchases from few of the parties. Shri Anandavadivel, in sworn statement, accepted that those bills with either signature of respective site-in-charge or seal of respective sites were genuine invoices and the remaining invoices having no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tractors expenses also. Though the payment was made through banking channels, cash was received subsequently. Shri Senthil, Accounts Head, admitted that bogus expenses were booked to reduce the profit of the firm. Going by the search findings, Ld. AO made addition of Rs. 131.20 Lacs. 3.2 During appellate proceedings, the assessee submitted that it furnished complete details of expenditure and Ld. AO made addition without any verification. The Ld. AO did not identify any party as bogus contractor and did not examine any of the suppliers to support its allegations. Upon further appeal, Ld. CIT(A), considering the factual position as well as sworn statements, confirmed the same. Aggrieved, the assessee is in further appeal before us. 3.3 We are of the opinion that our adjudication for alleged bogus purchases would have an equal application for this addition also. It could be seen that this year is on a slightly different footing since the search has happened on the assessee on 28-10-2020 and complete evidence of alleged bogus expenditure is not on record. We also observe that the findings of Ld. AO are primarily based on findings given for AY 2020-21 wherein the assessment has been fr ..... 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