9911796707
TMI Blog2024 (6) TMI 1416X X X X Extracts X X X X X X X X Extracts X X X X ..... arranted in the facts and circumstances of the present case. We are not inclined to interfere with the order passed by CIT(A) restricting the disallowance to 15% of payments made to sub-contractors. There is nothing on record to persuade us to take a view that disallowance at a higher rate was warranted in the facts and circumstances of the present case. We have already rejected the contention of the Revenue to restore the disallowance at the rate of 100% of payments made to sub-contractors. We also concur with the CIT(A) that in absence of any material to substantiate the allegation that Assessee had paid commission at the rate of 1%, the addition made in respect of commission expenses cannot be sustained merely on assumptions and guess work - Decided against revenue. - SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER For the Appellant : Shri Ajay Chandra For the Respondent : Shri Madhur Agrawal, S0hri Mayur Kisnadwala ORDER Per Rahul Chaudhary, Judicial Member 1. The present batch of appeals preferred by Revenue and cross-objections preferred by the Assessee pertain to Assessment Years 2011-12 and 2012-13. Since identical grounds/cross-objections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accommodation entries after noting that assessee failed to negate the information based on enquiry conducted by DDIT(Inv.), Unit-4(3), Mumbai that they were nongenuine dealers and providing bogus accommodation entries? 4 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that the burden of proof cast on the assessee was of a very high degree and assessee failed to discharge this burden? 5 Whether on the facts and circumstances of the case and in law the Ld CIT(A) is justified in holding that there is no documentary evidence to substantiate the allegation of the AO regarding payment of 1% commission expenses to the subcontractors and estimated the commission payment on the basis of assumptions? 5.1. The Assessee has raised following grounds of cross objection in CO No.71/Mum/2024: 1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in upholding the validity of the reassessment proceedings under section 147 of the Income Tax Act, 1961. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in upholding addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 115JB of the Act was more than tax payable as computed under normal provisions of the Act (even after the additions), the income of the Assessee was assessed on the basis of Book Profits computed under Section 115JB of the Act. 6.4. In appeal preferred before the CIT(A) in respect of initiation of reassessment proceedings and the above additions, the CIT(A) granted partial relief by restricting the addition on account of accommodation entries to 15% of the sub-contracting expenses (aggregating to INR.8,81,30,000) and deleting the addition of INR 8,81,300/- in respect of commission for the aforesaid accommodation entries. However, the CIT(A) rejected Appellants challenge to the validity of the reassessment proceedings. 7. Being aggrieved by the partial relief granted by the CIT(A), the Revenue has preferred the present appeal before the Tribunal on the grounds reproduced in paragraph 5 above, while the Assessee has preferred cross objections reproduced in paragraph 5.1 above. Since all the grounds raised in the appeal and cross objections are connected, the same were taken up together hereinafter. 8. We have heard both the sides. 8.1. The primary contention of the Revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The withdrawal of cash was routine given the nature of industry since the sub-contractors would be required to make payments of labour charges and daily wages. Appreciating the aforesaid, the CIT(A) granted relief to the Assessee by restricting the disallowance to 15% of payments made the sub-contractors. It was vehemently contended that even the Assessing Officer had itself not doubted the actual performance of work and therefore, entire amount of payment made to the sub-contractors cannot be added in the hands of the Appellant. The CIT(A) had reduced the addition to 15% and in order to avoid protracted litigation the Assessee had decided not to challenge the order of CIT(A). However, since the Revenue has preferred the present appeal, the Assessee has filed the cross-objections. 9. We have considered the rival submissions and perused the material on record in relation to grounds of appeal raised by the Revenue. The primary grievance of the Revenue is that the CIT(A) has reduced the amount of disallowance from 100% of payments made to the sub-contractors to 15% of such payments. According to the Revenue the disallowance made in the hands of the appellant should be restored to 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is alleged bogus entry provider therefore if the work has been completed by the assessee company it is not a certain as to how and from whom the work was completed. The completion of work itself prove that the assessee has got were completed either on its own or from some other agencies whose sources of payments have not been disclosed. The above inference are drawn after considering the fact that M/s Kumar Enterprises and M/s Shivam Enterprises are shell companies engaged in providing accommodation entry only. Therefore, (Emphasis Supplied) 9.2. Further, nothing has been brought on record by the Assessing Officer to challenge the veracity of the documents (including completion certificates) placed on record by the Assessee. The CIT(A) has taken into consideration the fact that the notices issued under Section 133(6) of the Act to the two parties could not be served at the office address provided by the Appellant while restricting the disallowance to 15% of payments made to sub-contractors. There is nothing on record to support that the contention advance of the Revenue that 100% of payments made to sub-contractors should be disallowed. In our view, the CIT(A) has rightly rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue [ITA No. 1149/Mum/2024] and Cross-Objection filed by the Assessee [CO No. 72/Mum/2024] pertaining to Assessment Year 2012-13 arising from the order of the CIT(A) passed on 31/01/2024, which in turn arose from the Assessment Order, dated 31/12/2018, passed under Section 143(3) read with Section 147 of the Act. 12. For the Assessment Year 2012-13 the Assessing Officer made disallowance of INR 4,79,34,733/- in respect of payments made to sub-contractors and addition of INR 4,79,347/- in respect of commission for accommodation entries. In appeal CIT(A) restricted the disallowance respect of payments made to subcontractors to 15% of the payments and deleted the aforesaid addition in respect of commission for accommodation entries. Now the Revenue is in appeal before the Tribunal while the Assessee has filed cross-objections. 13. During the course of hearing both the sides agreed that grounds raised in appeal and the cross objection for the Assessment Year 2012-13 are identical to those raised in appeal for the Assessment Year 2011-12. Since there is no change in the facts and circumstances in the case in comparison to Assessment Year 2011-12, both the sides adopted the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
