AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 978
X X X X Extracts X X X X
X X X X Extracts X X X X
....rect in holding that related party liability of M/s. LDC Holding Pvt. Ltd. with respect to solar power-installation charge was genuine? 2 Whether in the facts and circumstances of the case the Ld. CIT(A) erred in holding that the liability towards M/s. LDC Holdings Pvt. Ltd. for manpower supply charges as genuine in absence of evidences to support the claim of rendering of service or any contract/agreement entered into for this purpose. Brief facts of the case are as under: 2. The assessee is engaged in running educational institution in providing educational services. It filed its return of income for year under consideration on 29/09/2016 declaring total income at Rs. 4,81,14,710/-. The case was selected for scrutiny to ver....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mitted that the said amount could not be treated as bogus liability. 2.2. The Ld. AO after considering the contentions was of the opinion that the payment made towards solar power plant installation charges and manpower supply charges to LDC Holdings were bogus transaction. He thus made addition under section 68 of the Act in the hands of assessee to an extent of Rs. 1,68,70,000/-. 2.3. Aggrieved by the addition made by the Ld. AO, assessee filed appeal before the Ld. CIT (A). 3. The Ld. CIT(A) after considering the submissions of assessee observed and held as under: "6 I have considered the grounds of appeal, statement of facts and written submissions filed by the appellant, Ground No. 1 and 6 are general in nature and do....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... clearly establishes that the Solar Plant has been installed by the appellant. In course of hearing, the AR of the appellant was asked to furnish the ledger account of M/s. LDC Holdings Pvt. Ltd., in the books of the appellant for the subsequent year to ascertain if the amounts shown as due at the end of the year have been paid or not. The ledger account furnished before me has been perused. It is seen from the ledger account of M/s. LDC Holdings Pvt. Ltd., in the financial year 2016-17 that, the opening outstanding balance of the appellant was Rs. 2,34,55,202/- and in respect of this, the appellant has made payment to M/s. LDC Holdings Pvt. Ltd., of Rs. 7,59,691/- on 29.08.2016, Rs. 50,00,000/- on 10.11.2016, Rs. 1,00,00,000/- on 28.12.201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appellant has not given the details of the persons who were deputed by M/s. LDC Holdings Pvt. Ltd., to carry out work in the premises of the appellant. It is the appellant's case that they have furnished the invoice issued by M/s. LDC Holdings Pvt. Ltd., for supply of manpower during the financial year 2015-16. They have also furnished the confirmation of M/s. LDC Holdings Pvt. Ltd., and the copy of the financials and return of income filed by the said company. They have also given the list of employees, who were sent to the appellant's premises for carrying out works during the year. Here again, I find that the A.O. has invoked the provisions of section 68 of the Act, without appreciating that the liability to M/S. LDC Holdings Pvt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be completed by M/s. LDC Holdings Pvt. Ltd. However M/s. LDC Holdings Pvt. Ltd. had incurred further expenditure for the said job by outsourcing it to a third-party. 4.1. In respect of manpower supply charges the Ld. Sr. DR submitted that, the 3 employees of M/s. LDC Holdings Pvt. Ltd., vs. relative of the director of the assessee. He submitted that, the payments made to LDC Holding Pvt. Ltd., towards manpower supply charges has no rational since the persons were such whose credentials did not match with the requirement of the job and yet payment made to them was way higher than what assessee paid to their own capable and experienced expert manpower. He submitted that, assessee before the Ld. AO did not provide the attendance register to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding of fact that the amount payable for installation of solar plant forms part of opening balance due to M/s. LDC Holding Pvt. Ltd., as on 01/04/2016. The Ld. CIT(A) has returned a finding of fact that, provisions of section 68 are in applicable, as assessee has proved the identity of the creditor capacity as well as the genuineness of the transaction. 5. Now coming to the manpower supply service charges paid by assessee, the Ld. CIT(A) notes that as long as M/s. LDC Holding Pvt. Ltd. is genuine, no addition could be made in the hands of assessee under section 68 of the Act. The assessee had filed ledger accounts showing the payments made to LDC Holdings Pvt. Ltd., in respect of manpower supply service charges and that in the subsequent....