TaxTMI 
TaxTMI 
2024 (10) TMI 1148
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....er Section 153A of the Act and further erred in confirming the search assessment order passed in terms of Section 153A of the Act without assigning proper reasons and justification. 3. The CIT (Appeals) - 20, Chennai failed to appreciate that the search assessment completed by making the disputed addition(s) in the absence of valid incriminating seized material relatable to such addition(s) should be reckoned as nullity in raw and further ought to have appreciated that the judicial trend in this regard was completely over looked and brushed aside in passing the impugned order there by vitiating the related findings. 4. The CIT (Appeals) - 20, Chennai failed to appreciate that the search assessment order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 5. The CIT (Appeals) - 20, Chennai erred in confirming the addition of Rs.4,93,51,199/- being purchases claimed in books of account maintained by the appellant based on excel sheet found at the time of search without assigning proper reasons and justification. 6. The CIT (Appeals) failed to appreciate that the disputed pur....
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....ication. 14. The CIT (Appeals) failed to appreciate that the provisions of Section 69 of the Act had no application to the facts of the present case and further ought to have appreciated that the pre-requisite conditions for attracting the provisions in Section 69 of the Act were not satisfied in the present case there by vitiating the addition made in this regard. 15. The CIT (Appeals) - 20, Chennai failed to appreciate that the excel sheet relied upon by the Assessing Officer should not be construed as 'incriminating seized material' and further ought to have appreciated that the contents of the seized material had no evidentiary value in the absence of any corroborative evidence so as to justify the addition made in this regard. 16. The CIT (Appeals) - 20, Chennai failed to appreciate that there was no independent examination carried out by the Revenue to examine the said parties to test the stand of the Appellant and ought to have appreciated that there was no unaccounted financial transaction which could be deduced from the disputed seized material for making the addition. 17. The CIT (Appeals) - 20, Chennai failed to appreciate that....
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.... failed to appreciate that the details of suppliers from whom the cash was received back is maintained in excel sheet and as per the excel sheet, an amount of Rs.2,09,86,608/- is mentioned as "Others", hence it is part of the excel sheet containing bogus purchases. 2.3 The Ld.CIT(A) failed to appreciate that the assessee did not provide break up of amount of Rs.2,09,86,608/- mentioned as "Others" and the assessee failed to prove that the said purchases are genuine by providing name and address of supplier and corresponding Invoices with supporting documents. As is evident, the issues that fall for our consideration in assessee's appeal are - (i) Addition of Bogus Purchases for Rs.493.51 Lacs; (ii) Disallowance of sub-contractor's expenses for Rs.16.82 Lacs; (iii) Addition of unexplained investment u/s 69 for Rs.9190 Lacs. The subject matter of revenue's appeal is relief granted by Ld. CIT(A) on account of bogus purchases for Rs.209.82 Lacs. 1.4 The Ld. AR advanced arguments and referred to various documents as placed on record. The Ld. CIT-DR also advanced arguments and supported the orders of lower authorities. This appeal was heard along with other appeals of the a....
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....is year were quantified at Rs.1256.59 Lacs as tabulated in para 3.4 of the assessment order. The assessee submitted that it computed bogus purchases of Rs.553.25 Lacs and disallowed the same in the computation of income. The Ld. AO added back the remaining purchases of Rs.703.33 Lacs to the income of the assessee. 2.2 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 only from four parties viz. M/s Sivasakthi Steels, M/s Vinayaga Iron & Steel Corp., Sri Laxmi Traders and Sri Velmurgan Steels to the extent of Rs.522.52 Lacs. 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 supporting documents were bogus purchases. After examining the factual position vis-à-vis seized material and explanation furnished by the assessee, Ld. CIT(A) reached a conclusion that out of impugned addition, the party-wise brea....
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.... income of Rs.5,53,25,652/-. Therefore, the balance addition as sustained by us would be Rs.11,82,906/-. No relief could be granted against GST component. The Ld. AO is directed to restrict the impugned additions to the extent of Rs.11,82,906/-. The assessee's ground stand partly allowed. The revenue's grounds stand dismissed. 3. Disallowance of sub-contractor's expenses for Rs.16.82 Lacs 3.1 The assessee was found booking bogus sub-contractors' expenses also. Though the payment was made through banking channels, cash was received subsequently. The quantum of expenditure for this year was quantified at Rs.157 Lacs. The assessee already admitted additional income of Rs.140.18 Lacs in the return of income and still there was balance of Rs.16.82 Lacs which was not offered to tax which represent GST component on these payments. The Ld. AO added the differential of Rs.16.82 Lacs for want for sufficient details as forthcoming from the assessee. Upon further appeal, Ld. CIT(A) confirmed the same. Aggrieved, the assessee is in further appeal before us. 3.2 We find that such expenses have been quantified at Rs.157 Lacs whereas the assessee has admitted partial income to the extent ....
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....ame on interest. The assessee used to refer the parties who were in possession of funds to the funds-required parties. Only for the sake of reference, these noting were made in excel sheets for the purpose of management information and which has been correctly stated by Shri Vinoth in his sworn statement. The updation was not properly done since the assessee had not done any financial transaction but noted the transactions for the limited purpose of management information regarding references made towards loans referred to friends on both sides. The same was clarified by Shri Anandavadivel in his statement dated 30-04-2021 wherein he deposed that the seized excel sheet had entries with respect to loans advanced and the parties under whose reference the loans are advanced. He confirmed that these loans were referred advances and not the real advances of the firm. It was also stated that the assessee did not earn any interest income out of these transactions. However, rejecting assessee' submissions, Ld. AO added the sum of Rs.91.90 Crores as unexplained investment u/s 69. Aggrieved, the assessee assailed the same before first appellate authority. 4.4 The Ld. CIT(A) noted that wit....
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....re still outstanding for the year under consideration. Finally, the impugned addition was confirmed against which the assessee is in further appeal before us. Our Adjudication on this issue 5. From the fact, it emerges that the impugned addition has been made solely on the basis of loose excel sheet found during search and statements record therein. The copy of the same as placed on Page No.265 of Paper-book Volume-II read as under: - S.No Particulars Value IOR Per Mon % 1 G.F 6,00,00,000.00 1.25 7,50,000.00 15 2 PC 7,00,00,000.00 1.00 7,00,000.00 12 3 PPR 10,00,00,000.00 1.00 10,00,000.00 12 4 CRU 5,00,00,000.00 1.25 6,25,000.00 15 5 Amir Tham 3,50,00,000.00 1.70 5,95,000.00 20 6 PV Inf 1,00,00,000.00 1.00 1,00,000.00 12 7 Muthu M 20,00,000.00 1.00 20,000.00 12 8 Foods 20,00,000.00 1.50 30,000.00 18 Total 32,90,00,000.00 38,20,000.00 1 M.Fine 25,00,00,000.00 1.50 37,50,000.00 18 2 B.Inves 6,50,00,000.00 1.50 9,75,000.00 18 3 ....
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....at the assessee had lent unaccounted loans to various parties. However, the allegations are bereft of any corroborative evidences on record. In our opinion, these sheets were merely dumb document having not much evidentiary value unless the same was supported by corroborative evidences to support the fact that the assessee, in fact, advanced such undisclosed loans during this year. We find that there is no such corroboration on record. 6. So far as the statement of Shri Vinoth (GM) is concerned, it was stated by him that the unaccounted loans were advanced by the Managing Partners (Individuals) to various concerns. Going by this statement alone, the impugned alleged loans could not be added into the hands of the assessee at all since it was stated by him that the loans were advanced by individual partners and not by the assessee-firm. Therefore, this statement, if considered on standalone basis, could not be used to make the impugned addition in the hands of the assessee. 7. So far as the statement of Managing Partner is concerned, the same has been recorded during assessment proceedings on 30-04-2021 wherein he stated that the loans were lent out of unaccounted business inco....
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....ovement of cash towards unaccounted loans alleged to be lent except the sole reliance made on the statements recorded at the time of search. As already noted, whatever incriminating material was found for earlier years, the income with respect to that material was already offered to tax by the assessee as additional income which is evident from our income tabulation in preceding para 1.5 and Ld. AO had made further additions considering the material unearthed during search proceedings. In such a case, no further addition could be made in the hands of the assessee at the time of alleged expansion thereof. 9. The Hon'ble Karnataka High Court in its recent decision titled as CIT vs. Sunil Kumar Sharma (159 Taxmann.com 179; 22.01.2024), rendered in the context of Sec.153C, held that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. The Hon'ble Court referred to the decision of Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla (3 SCC 410) as well as another decision in Common Cause vs. UOI (supra) while arriving at such ....