2023 (5) TMI 997

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.... a construction company, a firm engaged in the business of executing civil contract work for PWD department and Railways. The partners of the assessee firm were Shri K. Don Alex Raja, Shri P. Janakar and Shri S. Senthilkumar with profit sharing ratio of 10:80:10 respectively. A search under section 132 of the Income Tax Act, 1961 ["Act" in short] was conducted on 22.04.2016 at the residence of Shri C.P. Anbunathan, Karur. Based on the analysis of seized materials from the residence of Shri C.P. Anbunathan, action under section 132 of the Act was initiated in the case of Shri P. Janakar on 10.05.2016. After examination of the information/documents filed, the Assessing Officer has completed the assessment under section 153C r.w.s. 143(3) of t....

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.... the payment was made to a construction company, which is being unaccounted and the assessee has not brought on record any evidence that the cash payment of Rs..10.00 lakhs fall under exemption as enumerated in Rule 6DD of the Income Tax Rules. Therefore, the Assessing Officer has rightly invoked the provisions of section 40A(3) of the Act. 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including paper book filed by the assessee. With regard to the addition of Rs..10,00,000/- towards disallowance of cash payment to third parties under section 40A(3) of the Act, during the course of assessment proceedings, the Assessing Officer has observed that incriminating mat....

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.... P. Janakar, during the course of post search proceeding, the partner had not provided any satisfactory explanation/corresponding evidences. However during the course of search assessment proceeding, when the partner was required to explain about it, he had submitted in the reply dated 12.12.2018 as follows. "I wish to state that M/s. Giant Construction company erected Hot Mix Plant in the Premise of Sri Sakthi Murugan Cruser, Dindigul. For Government Road work, contract. We purchase some portion of raw material requirements such as 1/2" Blue metal stone, 1/4" Blue metal stone, powder etc. During the said period they supplied materials to our plant by operating more than TEN LORRIES for which they raised advance payment for PONGAL ....

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....Sakthi Murugan Crusher in the books of the assessee for the period from 01.01.2015 to 26.01.2015, as was filed before the Assessing Officer, the assessee could not demonstrate that the impugned expenditure was wholly and exclusively incurred for the purpose of its business or filed any corresponding evidences along with vouchers, details of sundry creditors with confirmation and sources for cash introduced were produced by the assessee. 8.1 So far as case law relied on by the ld. Counsel for the assessee in the case of Attar Singh Gurmukh Singh v. ITO (supra) has no application to the facts of the present case for the reason that the assessee has not produced any evidence for the purchase in cash mode with third party or furnished any sa....