TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1841
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....identical issue is involved in both these appeals and as both the parties have advanced similar arguments, we have heard them together and are disposing of the same by this consolidated order for the sake of convenience and uniformity. With the consent of both the parties, the appeal in ITA No. 1657/CHNY/2025, in the case of M/s. Hariway Lines Private Limited, has been taken as a lead case for the purpose of factual analysis, as it has been confirmed by both the parties that the issue involved as well as the orders of the authorities below are identical in both the cases, except for the variation in the quantum of addition made. Accordingly, the findings and adjudication rendered by us in the case of M/s. Hariway Lines Private Limited in ITA No. 1657/CHNY/2025 shall apply mutatis mutandis to the appeal in ITA No. 1662/CHNY/2025, in the case of M/s. Rishi Enterprises. 2.1 At the outset, we find that there is a delay of 05 days in filing the appeal filed by the revenue in ITA No. 1657/Chny/2025 and 06 days in ITA No. 1662/Chny/2025 and the revenue explained the reasons for delay in filing the appeals. The revenue has filed affidavits stating the reasons for delay in filing the app....
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....ings, pavement markings, crash barriers, overhead gantry boards, roller barrier guardrail systems, and other allied items. 6. For the impugned assessment year, the assessee filed its return of income u/s.139(5) of the Act on 31.12.2022 declaring a total income of Rs. 22,53,46,606/-. The said return was selected for compulsory scrutiny, and accordingly, a notice u/s.143(2) of the Act was issued on 17.06.2023, consequent to the search and seizure action conducted u/s.132 of the Act. 7. A search and seizure action u/s.132 of the Act was carried out on 12.10.2022 in the case of the assessee and its group concerns, including M/s. Rishi Enterprises. During the course of the said search conducted at the business premises of the assessee situated at No. 254, Periyar Nagar, Rajagopalapuram Post, Pudukkottai - 622 003, certain books of account and documents were found and seized vide Annexures ANN/MK/HW/B&D/F&S/1 and 2. 8. The said materials were found in the possession of one Shri Balasekhar, from whom a statement was recorded u/s.132(4) of the Act. In the course of the said statement, Shri Balasekhar admitted that he being the author of the seized notebooks and further stated that....
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.... the supervision of Shri Stanley Jones, Manager (Accounts). She further stated that her responsibilities included entering details relating to purchases, bank transactions, loan accounts, and divisional expense vouchers in Tally software, as well as assisting in the day-to-day accounting functions of the office. She also deposed that the divisional expense entries were made based on the details furnished by Shri Stanley Jones, and that no supporting documentary evidence was available with her for verification of such entries. 13. Further, Shri Stanley Jones, Manager (Accounts), in his statement recorded during the search proceedings, deposed that the wages were paid in cash and accounted for under the head labour wage expenses. He admitted that such wage payments were supported only by self-prepared vouchers and that no independent supporting documents were available to substantiate such wage expenditure. 14. Upon detailed examination of the seized notebooks, the AO noted that the cash payments/debit entries marked "MD Personal" aggregated to Rs. 34,68,28,000/- during the previous year relevant to the A.Y.2022-23. The AO formed the opinion that these debit entries, though acc....
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.... to Shri Balasekhar for safe custody in the locker. 17. It was further contended that the nature of the assessee's business is inherently labour-intensive, involving substantial expenditure on labour and wages. The manufacturing of road safety products and their installation over extensive stretches of road require the deployment of a large local workforce available nearby the work sites to ensure hassle free execution of contracts. Consequently, wage costs constitute a major component of the assessee's operational expenditure. The assessee explained that the accounting entries are not passed on a day-to-day basis, as the available accounting personnel are primarily engaged in banking and project-related activities throughout the year. The books of account are generally updated and finalized only at the close of the statutory period for filing returns of income. 18. It was also explained that maintenance of vouchers at the site level is both impracticable and unsafe, as such decentralized documentation may lead to defalcations. Hence, vouchers are maintained centrally at the head office, and self-made vouchers are prepared only for statutory compliance, including obligations ....
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....ing inflation or booking of fictitious wage expenses. 22. On the basis of the above submissions, the assessee requested the AO to drop the proposed disallowance of Rs. 34,68,28,000/- towards alleged bogus wage payments. 23. The AO not being satisfied with the explanation tendered by the assessee, proceeded to make an addition towards bogus wage payments in the hands of the assessee. The AO observed that the cash scroll book maintained by Shri Balasekar represented the de facto control record of the actual inflow and outflow of cash. The AO further observed that the cash payment/debit entries bearing the narration "MD Personal" signified cash withdrawals made by Shri M.Pandithurai for his personal purposes. 24. The AO acknowledged that the assessee's business operations necessitated engagement of a substantial workforce; however, the authenticity of the amounts claimed as deduction towards wages required detailed scrutiny. During the course of assessment proceedings, the statements of Ms.Ramya and Shri Stanley Jones, Accounts Manager of the assessee company, were recorded, wherein it was deposed that the wage payments were made based on lists of workers provided, but that n....
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....the AO made a net addition of Rs. 15,80,14,988/- towards bogus wage disallowance in the hands of the assessee. 29. It was further observed that the AO had made other additions on account of unaccounted scrap sales and bogus sub-contract expenses. However, since these issues are not the subject matter of dispute before us, we refrain from discussing the same. 30. Consequently, the assessment was completed u/s.143(3) of the Act vide order dated 28.03.2024, determining the total income of the assessee at Rs. 41,00,78,594/-, which included, inter alia, an addition of Rs. 15,80,14,988/- towards bogus wage payments. 31. Aggrieved of the above assessment order, assessee carried the matter before the Ld.CIT(A) who vide impugned order dated 26.03.2025 deleted the addition of Rs. 15,80,14,988/- made by the AO towards bogus wage payments. 32. The assessee, in the course of appellate proceedings before the Ld.CIT(A) submitted that the assessee was engaged in the execution of contract works at several hundred sites located across the State of Tamil Nadu. It was contended that the said business activity was highly labour-intensive in nature, being carried out with the assistance of l....
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.... maintenance of vouchers. It was, therefore, submitted that, in the facts of the present case, the voluntary disallowance already offered by the assessee adequately covers any possible irregularities in documentation, and hence, any further disallowance on account of wage payments is unwarranted. The assessee submitted that it has offered a Net Profit ratio of about 12% in all the years, whereas the comparable industry margins are in between 6% to 8%, hence the assessee urged that there cannot be any scope for making an addition of whopping sum of Rs. 15.80 Crores in the assessment. 36. In view of the aforesaid submissions, the assessee prayed that the addition made by the AO towards alleged bogus wage payments be deleted in entirety. 37. Upon considering the submissions of the assessee, the Ld.CIT(A) deleted the addition of Rs. 15,80,14,988/- made by the AO towards bogus wage payments holding as under: - "6.2.15 The undersigned has carefully examined the issue under consideration. The AO in the assessment order has primarily relied upon the cash scroll books maintained Shri Balasekhar, close relative of Shri. M. Pandithurai, Managing Director of the appellant compan....
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.... of wages to laborers and workers on various construction sites, as well as other operational expenses necessary for the day-to-day running of the company. The relevant summary of such sworn statement recorded from Shri M Pandithurai during the completion of search proceedings is extracted here as under: * Shri. Balasekar was the person-in-charge for the cash locker at our office at Pudukkottai and he was acting as a Cash keeper and trusted custodian for the cash handed over to him for safe custody. * That the source for receipts in the cashbook is from bank withdrawals made of the appellant's group concerns. [Deposition to Q.No. 6 of the sworn statement dated 05-12 2022] * That huge sum of money is handed over to Shri. Balasekar for safe keeping purposes only as the accounts team is not capable of handling such a large sum of money. [Deposition to Q.No. 7 of the sworn statement dated 05-12-2022 * That the end use of the disbursements remarked as 'MD personal' in the cash book is known only to Shri. M. Pandithurai and not to Shri. Balasekar. [Deposition to Q.No. 8 of the sworn statement dated 05-12-2022] * That the amounts paid with a re....
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....practice of using cash withdrawals for such business payments is common in industries dealing with a large labour force and cash-intensive operations. The appellant asserted that this practice is aligned with industry norms and that there is no wrongdoing in using cash for such business purposes, which is often necessary for operations that cannot always be handled through bank transfers or cheque payments due to the nature of the workforce. 6.2.21 The undersigned is of the view that the appellant's business model involves the manufacture, supply, and installation of road safety products, including road signs, reflectors, markings, and crash barriers. Additionally, it encompasses other labour-intensive activities such as digging pits, installing poles, conducting metallic fabrication on-site, and performing painting work. These works are supervised by the company's Director, M. Pandithurai himself, who frequently visits the sites to ensure quality and timely completion. The MD in order to execute the works draws the cash from the custodian Shri. Balasekhar to incur the various expenses at numerous work sites which involves the engaging of local labourers. Hence, th....
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....ns. It is important to note that the absence of formal documentary evidence such as third-party invoices for all such payments does not automatically render the expenditures nonbusiness related. In industries such as the appellant's, especially those involving large numbers of workers at construction sites, self-made vouchers and informal cash records are a common practice. These self made vouchers were generated in the field when paying wages and were backed by the labour records and the workforce list provided by the appellant, which were duly maintained for regulatory purposes. 6.2.24 The AO has failed to present any concrete evidence or documentation revealing that the cash withdrawals marked as "MD Personal" were actually diverted for personal use. No additional evidence has been furnished that links these withdrawals to personal investments or expenditures of the MD. On the contrary, the appellant has provided a reasonable explanation, including statements from the MD and staff members, supporting the legitimacy of the expenditures related to the business operations. Moreover, it is pertinent to note that the appellant has already voluntarily disallowed a portion of ....
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.... has also observed that they fail to understand as to why the Revenue has filed these Appeals to drag cases further in the High Court incurring the loss of man hours and cost of litigation. Such unnecessary litigation on the part of the Revenue Authorities deserves to be strongly deprecated, but, the Revenue Authorities do not seem to be seeing the sense behind this and keep on filing Appeals under Section 260A of the Act, as a matter of routine exercise. (ii) The Hon'ble jurisdictional Chennai Tribunal in the case of Shri Irulandi Thevar Vetrivel vs The ACIT, Central Circle-2, in ITA Nos. 131 to 136/Chny/2024, has held that estimated profit at the rate of 10% of the contractual receipts from infrastructure projects would be reasonable enough and there is no further need to make any further disallowances. 6.2.27 In the case at hand, the appellant company is engaged in the business executing contracts pertaining to road furniture and allied infrastructure. Generally, in contract business, the Act recognises 8 % profit margin in small business. The AR specifically brought to the attention of the undersigned that the net margin of the appellant would reach 22.88% aft....
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....ingly all the ground raised by the appellant upon this issue are hereby treated as allowed and the AO is directed to delete disallowance of Rs. 15,80,14,988/- made for the AY 2022-23." 38. Aggrieved by the above order of the Ld.CIT(A), Revenue is in appeal before us. 39. The Ld.DR, appearing on behalf of the Revenue, vehemently supported the findings and conclusions drawn by the AO. It was contended that the debit entries recorded in the seized note books under the narration "MD Personal" clearly represent cash withdrawals utilized by Shri M.Pandithurai for his personal purposes, and therefore, the said amounts cannot be regarded as business expenditure. 40. The Ld.DR further submitted that the wage expenses are supported merely by self-made vouchers and are not corroborated by any independent or third-party evidence. This, according to the Ld.DR, establishes that the wage payments recorded by the assessee are not genuine but are, in fact, bogus entries introduced to inflate the expenditure and suppress the taxable income. 41. In light of the above submissions, the Ld.DR contended that the Ld.CIT(A) erred in deleting the addition made by the AO on account of bogus wage ....
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....he Ld.AR also invited our attention to the fact that, after the impugned addition on account of alleged bogus wages on proportionate method without any concrete basis, the resultant net profit ratio of the assessee stands at an abnormal level of 22.88%, which is wholly unrealistic and unachievable in the line of business in which the assessee is engaged. This, according to the Ld.AR demonstrates the arbitrary nature of the addition made by the AO. The Ld.AR further submitted that the assessee had voluntarily disallowed an amount of Rs. 1,68,27,540/- which includes 10% of the total wages of Rs. 9.84 crores to cover up any anomalies of the search findings and other factors, hence further disallowance is unwarranted. It was also brought to our attention that the assessee was offering net profit in the range of 12% in all the years is more than the net profit offered by the peers in the industry. According to the Ld.AR, considering the offer of higher net profit ratio by the assessee, any further addition on presumption without any concrete basis is unwarranted. 45. It was further submitted that the total amount of wages debited to the Profit and Loss Account during the relevant ass....
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....ting as a trusted custodian of the cash belonging to the assessee and its group entities. In his statement recorded u/s.132(4) of the Act, Shri Balasekhar categorically deposed that entries bearing the narration "MD Personal" denote cash handed over to Shri M. Pandithurai. In his initial statement dated 14.10.2022, Shri M.Pandithurai admitted that the cash found at his premises represented withdrawals from the bank accounts of M/s. Hariway Lines Private Limited and was intended for his personal use. However, in his subsequent statement recorded u/s.132(4) of the Act dated 05.12.2022, he retracted the earlier version, explaining that the cash received from the custody of Shri Balasekhar was utilized exclusively for the business requirements of the assessee concern. 50. The AO, however, rejected the subsequent explanation and concluded that the debit entries in the seized notebooks bearing the narration "MD Personal" represented cash utilized by Shri M. Pandithurai for his personal purposes. Since the cash payments were sourced from the bank withdrawals of the assessee and M/s. Rishi Enterprises which had been recorded as wage payments in their regular books of account the AO held....
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.... himself, which indicated that the payments were made towards legitimate business activities. Moreover, the assessee had already made a voluntary disallowance of Rs. 1,68,27,540/- in its return of income as a prudential measure to cover any possible discrepancies. 55. In view of the above, the Ld.CIT(A) held that the AO's conclusion was based on mere presumption and surmise, without any substantive material to establish diversion of funds for non-business purposes, and accordingly deleted the addition. Being aggrieved by the relief granted by the Ld.CIT(A), the Revenue is in appeal before us. The solitary issue for adjudication, therefore, is whether the Ld.CIT(A) was justified in deleting the addition of Rs. 15,80,14,988/- made by the AO on account of alleged bogus wage expenditure. 56. We have carefully perused the assessment order, the findings of the Ld.CIT(A) and the material placed on record. The primary issue under consideration pertains to the addition of Rs. 15,80,14,988/- made by the AO on account of alleged bogus wage expenditure. The said addition was premised on certain debit / cash payment entries reflected in the seized notebooks recovered during the course of ....
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....at additions cannot be sustained merely on the basis of suspicion, conjecture, or surmise. The Revenue bears the burden of establishing, through credible and corroborative evidence, that the expenditure claimed by the assessee is not genuine or has been incurred for non-business purposes. Mere notings such as "MD Personal", without further substantiation, do not ipso facto lead to the inference of personal expenditure. We also note that Shri M.Pandithurai, Managing Director in his sworn statement recorded u/s.132(4) of the Act on 05.12.2022 had clarified that the noting made by Shri Balasekhar as "MD Personal" was for his own identification to the effect that the cash was handed over to MD personally. 61. As held consistently by various judicial fora, any notings in a diary or scroll book not forming part of the regular books of account, unless duly corroborated by material evidence, cannot form a valid basis for making additions under the Act. Suspicion, however strong, cannot replace proof; nor can mere nomenclature in an unverified document be deemed conclusive evidence of diversion of funds. In the light of the foregoing discussion, we find that the AO's inference of persona....
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....e was engaged in the practice of inflating or fabricating wage expenses. Moreover, the mere fact that debit vouchers were obtained by Shri Balasekhar when cash was disbursed to staff, and not directly from Shri M.Pandithurai, at the time of disbursement of cash by him, cannot, in isolation, constitute conclusive proof that the debit entries or cash payments bearing the narration "MD Personal" represented personal expenditure of Shri M.Pandithurai. Thus, we do not countenance the conclusion drawn by the AO that merely for not obtaining debit vouchers from Shri M.Pandithruai by Shri Balasekhar when money was handed over to him, represent that the same were utilized for non business purpose. In the absence of corroborative evidence linking such entries to personal use, the presumption drawn by the AO remains unsubstantiated and cannot be sustained in law. 63. We observe that during the course of search proceedings conducted at the residential premises of Shri M. Pandithurai, a sum of Rs. 5,44,190/- in cash was found and seized. In the course of the statement recorded u/s.132(4) of the Act on 14.10.2022, Shri M.Pandithurai deposed that the said cash represented withdrawals made from....
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.... present case, apart from the statement of Shri M.Pandithurai, no corroborative evidence whatsoever has been brought on record by the Department to substantiate that the alleged sum of Rs. 26,26,28,000/- was in fact withdrawn or utilised by him for his personal benefit. 66. In light of the foregoing discussion, we are of the considered opinion that the statement recorded from Shri M.Pandithurai on 12.10.2022 and 14.10.2022, having been made under circumstances indicative of impaired physical and mental condition, is devoid of evidentiary value and cannot be made the basis for drawing any adverse inference against the assessee. Accordingly, such statement deserves to be disregarded for all practical purposes. 67. We further observe that on 05.12.2022, Shri M.Pandithurai, in a subsequent sworn statement recorded u/s.132(4) of the Act, retracted his earlier statement regarding the utilization of cash for personal purposes. He clarified therein that the amounts recorded in the cash book with the remark "MD Personal" were, in fact, utilized towards the payment of wages and for site maintenance expenses incurred at various locations pertaining to the assessee's group concerns. The ....
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.... at various locations for Hariway Lines Pvt Ltd and Rishi Enterprises. However as stated earlier, I will reconcile and furnish the details within two weeks' time." 68. It is evident from the above that Shri M.Pandithurai had categorically retracted his earlier statement concerning the alleged utilization of cash disbursed to him by Shri Balasekhar. Notwithstanding such a categorical retraction, the AO, while framing the assessment, chose to place reliance upon the initial statement recorded during the course of investigation, completely disregarding the subsequent retraction in the sworn statement recorded u/s.132(4) of the Act. The AO has neither brought on record any corroborative evidence nor made any independent verification to substantiate that the retraction was an afterthought or otherwise incorrect. We observe that the Revenue has failed to place any cogent material or evidence to demonstrate that the retraction dated 05.12.2022 was false, fabricated, or made with any ulterior motive. It is a settled position in law that a statement which has been retracted cannot, by itself, form the sole basis for an adverse inference unless such retracted statement is duly supported b....
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....the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act." 4.5 From a bare reading of the aforesaid provision, it is noted that Section 132(4) of the Act empowers the authorized officer to examine on oath any person who is found to be in possession or control of any books of account, documents, money etc. Such a statement made by that person may thereafter be used in evidence in any proceedings under the Act. Evidence is a mode or means to prove a fact-in-issue. Statement is an oral testimony of relevant fact; and an admission of a fact-in-issue is an important piece of evidence, provided it has been voluntarily given without any inducement, promise, threat or coercion. Once a statement recorded of a person who is in possession of any valuable thing or control of books found during search then it can be used as evidence in any proceedings under the Act and the presumption would be that it has been given by that person voluntarily. The burden to prove that the statement was incorrect based on mistake of fact or that it was not voluntarily ....
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.... information on what has not been disclosed or is not likely to be disclosed before the Income Tax Department. Similarly, while recording statement during the course of search and seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income . Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, Assessing Officers should rely upon the evidences/materials gathered during the course of search/survey operations of thereafter while framing the relevant assessment orders. " 4.6 This view was again reiterated by the CBDT in their Circular No. F.NO. 286/98/2013-IT (INV.II)], dtd 18-12-2014 which read as follows: "Instances/complaints of undue influence /coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in ....
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....ho could lend such a huge sum to the assessee. Hence, the testimony of the assessee is noted to have come into doubt. The assessee had further shown that, he had not acquired any such land parcels during the said period in his personal capacity and that the admission made in original statement was false and obtained under stress and pressure. The assessee, instead showed that, the details of land mentioned in his statement related to M/s JFIPL which were acquired in earlier years and not the relevant AY 2013-14. We thus find merit in the assessee's contention that, the statement relied upon by the AO to justify the addition impugned, was neither backed by any cogent evidence nor was corroborated, and also suffered from factual- inconsistency. 4.8 It was brought to our notice that, the assessee had also furnished his retraction letter to this effect within a month before the authorities on 13.01.2015, copy of which has been placed at Pages 28 to 38 of Paper Book. We find that, another retraction letter along with affidavit was submitted on 10.03.2015 which is found placed at Pages 39 to 46 of paper Book. It is noted that, neither the Investigating Officer nor the Assessing ....
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....btained under duress. The AO, however, by placing reliance on this statement made addition in the hands of the assessee firm. On appeal both the Ld. CIT(A) and this Tribunal deleted the addition as it was made merely on the basis of the statement which had been retracted and there was no corroborative material or evidence brought on record by the AO to justify the addition. The Hon'ble High Court is noted to have upheld the orders of the lower appellate authorities by observing as follows: "11. The ratio of this decision is that there is a statement recorded in the course of the search proceedings and such statement is retracted and the burden is on the maker of the statement to establish that the admission in his statement was wrong and that such statement was recorded under duress and coercion. It is further brought to our notice that the decision of the Rajasthan High Court was carried in appeal by the assessee before the Supreme Court and the Supreme Court has dismissed the SLP. There need not be any debate with the proposition of law as laid down in the decision of the Rajasthan High Court, but a close look at the decision of the Rajasthan High Court would indicate th....
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....a ground for addition of income . There must be a some material substance either in the form of documents or the like to arrive at a ground for addition of income. Considering the ratio laid down in the above decision and in the facts of the present case, we are of the view that the issue raised in this Appeal is required to be answered in favour of the assessee and against the Department." 4.11 Somewhat similar issue was also considered by Hon'ble Punjab & Haryana High Court in the case of CIT Vs S.S.R.D Somany Sikshan Sansthan (201 Taxman 313). In the decided case, an employee of the assessee had admitted in his statemen t u/s 132(4) of the Act that the salary expenses of assessee were inflated as the employees were required to refund portion of their salaries back to the assessee in cash. The said employee also later on retracted his statement by filing an affidavit. The AO however went by the original statement of the employee and disallowed salary expenses holding that assessee had inflated the same. On appeal the Ld. CIT(A) deleted the addition which was affirmed by the Hon'ble High Court by holding as follows: "7. The Tribunal while affirming the findin....
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....ent order on the basis of statement of one such employee, he has ignored the statement of other 11 similar employees . If the statements of all these 11 persons are considered, the adverse inference drawn by the Assessing Officer against the appellant is not sustainable. In addition to the above evidence, the Assessing Officer has himself mentioned that he was making addition on the basis of certain circumstantial evidence . Circumstantial evidence may be important for deciding an issue in the assessment proceedings in a normal case . However, in my opinion, when an assessee is subjected to search and all the important premises are covered, there could not be any scope for making such huge additions on the basis of circumstantial evidence. Finding of blank signed cheques books of the employees have been considered for adverse inference by the Assessing Officer. However, as brought out in para 10.2 of the assessment order itself, in the statement recorded during the course of search itself, Mr. Anil Sharma Accountant of SITM has duly explained the reasons for the same. What has been stated by Mr. Anil Sharma is the consistent stand on the appellant right from the date of se....
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.... counsel was to reappreciate the evidence so as to pursuade this Court to take a different view, which is not permissible." 4.12 Therefore, following the decisions and the Board Instructions (supra), we find ourselves in agreement with the findings of the Ld. CIT(A), that it was improper for the AO to make the impugned addition on the basis of the retracted testimony of the assessee. For the various reasons set out above, we therefore do not see any reason to interfere with order of the Ld. CIT(A) and accordingly dismiss this ground." 69. We further observe that the assessee's declared net profit ratio for the impugned assessment year works out to 12.04%, which is found to be consistent with the results shown in the preceding assessment years. The Revenue has not placed on record any cogent material or industry benchmark to substantiate that the line of business in which the assessee is engaged ordinarily yields a higher net profit ratio. 70. It is further noticed that, as assailed by the ld.AR consequent to the addition of Rs. 15,80,14,988/- made by the AO towards alleged bogus wages, the resultant net profit ratio would escalate to 22.88%, which, in our considered ....
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....ht of the foregoing discussion and guided by the judicial precedent cited supra, we hold that the further disallowance of Rs. 15,80,14,988/- made by the AO is unsustainable in law as well as on facts. The Ld.CIT(A), in deleting the said addition, has rightly appreciated the factual matrix and legal principles applicable to the case. 75. Before parting, we deem it appropriate to record our concurrence with the findings arrived at by the Ld.CIT(A). The Ld.CIT(A), after a careful appreciation of the material available on record, has rightly observed that the narrations appearing in the scroll book maintained by Shri Balasekhar under the heading "MD Personal" cannot, by themselves, be construed as indicative of any personal expenditure of the Managing Director. The Ld.CIT(A) has judiciously interpreted the said notings to signify that the amounts so withdrawn or disbursed in cash were intended for, and indeed utilized towards, the business exigencies of the assessee company, albeit through the Managing Director in his representative capacity. 76. The Ld.CIT(A) has further recorded a categorical finding that there is no cogent, credible, or corroborative evidence brought on record....