2020 (9) TMI 315

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....r passed u/s.250 on 27.02.2017 for A. Y.2012-13 by C1T(A)-1 . Ahad upholding, the disallowance of sub-contract payments for land development expanses of Rs. 9,48,000/- made by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2 The ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence, produced by the appellant with regard to the impugned additions. The Ld. CIT has grievously erred in law and or on facts in not allowing the opportunity to cross-examine the sub-contractors and relying upon the material gathered by AO behind the back of the appellant. 1.3 The Ld. AO has grievously erred in disallowing the expenses of Rs. 94....

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....s before us, the Id. counsel has contested only the grounds no. 3.1 and 4.1. As common issue is involved in both the grounds of appeal, therefore, for the sake of convenience, these grounds of appeal are adjudicated together in the succeeding para. 4. The fact in brief is that the assessee has filed return of income on 28th Sep, 2012 declaring total income of Rs. 4,200/-. The assessee company was engaged in the business of construction, road contractor etc. The assessing officer received information from the DDIT, Investigation that assessee had undertaken work contracts from PACL Ltd., Gurgaon. As per the information, the PACL Ltd. has claimed bogus development expenditure and assessee has received Rs. 1,02,04,082/- as land development ....

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....4,48,000/- was added to the total income of the assessee. 5. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. The alternative ground of appeal to make addition of only commission income earned on the accommodating transactions was also rejected by the ld. CIT(A). 6. During the course of appellate proceedings before us, the ld. counsel has contended that it is unjustified to disallow the entire sub-contract payment of Rs. 94,48,000/- thereby unreasonably taxed entire contract receipt of Rs. 1,02,04,082/-. The ld. counsel has also submitted that assessee company had furnished copies of confirmation of accounts with income tax returns of the five sub-contractors and copie....

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....ocument from the assessee to verify the genuineness of land development charges received by the assessee from PACL Ltd. along with the details and documents in respect of sub-contract made by the assessee with different sub-contractors for carrying out the development work. On verification of the details, the assessing officer has noticed that assessee has failed to furnish the complete details of location of land, area of land, survey no. of the land, name of the village where the land development work was taken place to prove the genuineness of the land development expenses paid by the assessee to sub-contractors. The assessing officer has issued notices u/s. 133(6) to all the sub-contractors. During the course of assessment, no sub-contr....

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....or the assessee. They have stated that they have only provided accommodation entries. They have stated that the payment received by cheque from the assessee was returned back to the assessee in cash after deducting their commission for providing accommodation entries. During the course of appellate proceedings before the Id. CIT(A), the assessee has also made alternative plea that the entire contract receipt was not chargeable in the hand of the assessee but only the reasonable commission income should be estimated. However, the Id. CIT(A) has sustained the action of the assessing officer of treating the whole amount of payment made to sub-contractors regarding land development charges to the amount of Rs. 94,48,000/- as bogus and added to ....