TaxTMI 
TaxTMI 
2026 (3) TMI 1665
X X X X Extracts X X X X
X X X X Extracts X X X X
.... sake of convenience and brevity. 2. The assessee has more or less raised common grounds of appeal in all the captioned appeals. Therefore, for the sake of brevity, the grounds of appeal filed by the assessee in ITA.No.1089/Hyd/2025 for the assessment year 2014-15 are reproduced as under: "1. The learned Commissioner of Income Tаx (Appeals) (for short - CIT(A) erred in law and on facts in upholding the additions made by the Assessing Officer. The additions are unjustified in law and liable to be deleted. 2. The learned CIT(A) erred in law and on facts in upholding the validity of the impugned assessment as being completed within the time limit prescribed under Section 153B read with Section 153A of the Income-tax Act, 1961, without appreciating the distinct legal implications arising from the issuance of a joint warrant in which the appellant-company was a separate person. 2.1 The learned CIT(A) failed to appreciate that the search in the case of the appellant-company was independently initiated on 06.02.2020 and conclusively completed on 12.02.2020, as evidenced by the Panchnama drawn on the said date; accordingly, the limitation for completion ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d of any evidentiary value in the absence of the original documents, and were inadmissible in a quasi-judicial proceeding for the purpose of computing income. 3.2 The addition was made without conducting any enquiry or obtaining corroborative evidence from Sri Anil Kumar, despite the appellant's categorical denial of ownership or connection with the impugned transactions; the entire basis of addition being unverified and uncorroborated. 3.3 The learned CIT(A), after analysing the seized material, himself observed that the overwhelming number of entries appearing in Annexure no. A. PIL/ Off/07 were also appearing in the Annexures bearing no. A/PIL/Off/01 and A/PIL/Off/03, yet erroneously upheld the addition in the hands of the appellant without any supporting evidence or presumption permissible in law, especially when neither of the seized documents belong to the Appellant and were also not speaking louder and clear. 3.4 The addition was made on the basis of a non-speaking and uncorroborated document, without establishing the nature, source, or character of the alleged transactions, and without demonstrating any nexus with the business or affairs of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ution of infrastructure projects, filed its return of income for A.Y. 2014-15 on 28.09.2014, admitting total income at Rs. Nil, declaring current year business loss at Rs. 1,84,19,401/-. A search and seizure operation under Section 132 of the Income Tax Act, 1961 was conducted in the case of M/s. Prathima Infrastructure Limited and its associate entities, in the case of Sri B. Srinivasa Rao and Smt. B. Usha Rani on 06.02.2020 on the strength of the joint warrant of authorization and search in the case of the assessee was finally concluded on 12.02.2020. During the course of search and seizure operations, certain incriminating material was found and seized at the business premises of the assessee, including several unused handwritten cash sheets written by Shri P. Anil Kumar, Vice President of the assessee company. The incriminating material found during the course of search was seized as Annexure A-1, A-2, A-3, A-7 and A-8. Further, the above handwritten sheets were also found in the email ID of Shri P. Anil Kumar. During the course of search, back up of the email data of Shri P. Anil Kumar was taken from the email ID of [email protected] and seized as Annexure A-4. The A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Kumar. Therefore, the A.O. observed that, the transactions found in the email of Sri P. Anil Kumar have not been recorded in the books of account and no satisfactory explanation about the nature and source of these cash transactions has been offered. Therefore, the A.O. rejected the explanation of the assessee and made addition of Rs. 3,63,000/- on the basis of email evidence found during the course of search. The A.O. has also made similar additions in respect of cash transactions with Sri Krishna Reddy on the basis of data found in the email on the ground that, the above transactions are also not recorded in the books of account of the assessee and the assessee has not explained the same. A similar addition has been made in respect of cash transactions with Shri Sunil Perala on the basis of email on the very same reasoning. 6. Aggrieved by the assessment order, the assessee preferred appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee challenged validity of assessment order passed by the A.O. under Section 143(3) r.w.s. 153A of the Income Tax Act, 1961 dated 31.03.2022 and claimed that, the assessment passed by the A.O. is barred by limitation in view of the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h the last of the authorisations for search under Section 132 was executed during the financial year commencing on or after the 1st day of April, 2019. If we consider that the last of the authorisations was executed on 23.07.2020, the end of the financial year would be 31.03.2021 and twelve months from the end of the financial year would expire on 31.03.2022. Therefore, the assessment order passed by the A.O. on 31.03.2022 is clearly within the time limit provided under the Act. In this case, the search cannot be said to have been concluded in respect of the persons, including the assessee on 12.02.2020, as prohibitory order in respect of certain persons, including the assessee was still in place. Therefore, the contention of the assessee that search in respect of assessee was concluded on 12.02.2020 is not correct, as search in respect of joint warrant containing the name of the assessee and other entities was still going on and was finally concluded on 23.07.2020 when the prohibitory order was revoked and final panchanama was drawn on 23.07.2020 where it has been clearly stated that the search proceedings were finally concluded on 23.07.2020. Further, the claim of the assessee th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation from ground Nos. 2 to 2.5 of the assessee's appeal is validity of the impugned assessment order as being barred by limitation, as prescribed under Section 153B r.w.s. 153A of the Income Tax Act, 1961. 11. The learned counsel for the assessee, Shri K.C. Devdas and Shri Poorna Chander, C.A. referring to panchanama drawn in the case of the assessee, which is available in the paper book filed by the assessee, submitted that, a search and seizure operation under Section 132 of the Income Tax Act, 1961, was conducted in the case of the assessee by authority of joint warrant of authorization issued in the case of M/s. Prathima Infrastructure Limited, the assessee, Sri B. Srinivasa Rao and Smt. Usha Rani, Directors of the assessee company and the search was initiated on 06.02.2020 and was finally concluded on 12.02.2020 as noted in the panchanama drawn by the Department. As per the provisions of Section 153B of the Act, which is applicable to search conducted on or after 01.04.2019, notwithstanding anything contained in Section 153, the A.O. shall make an order of assessment or reassessment in respect of each assessment year falling within six assessment years referred to in S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pecific person's residential premises cannot extend the limitation in the case of another assessee whose search had concluded earlier. In the case of the assessee, the search was concluded on 12.02.2020 and therefore, limitation must be reckoned with reference to the date of search in the case of the assessee, as explained in sub-section (2) of Section 153B of the Income Tax Act, 1961, and therefore, the A.O. ought to have completed the assessment on or before 30.09.2021. Therefore, they submitted that, the assessment order passed by the A.O. under Section 143(3) r.w.s. 153A of the Income Tax Act on 31.03.2022 is clearly barred by limitation and liable to be quashed. 13. The learned CIT-DR and learned Sr. A.R. for the Revenue, Dr. Narendra Kumar Naik and Dr. Sachin Kumar, on the other hand, supporting the order of the Ld. CIT(A) submitted that, search and seizure operation under Section 132 of the Income Tax Act, 1961 was conducted in the case of the assessee on the basis of joint warrant of authorization issued in the case of assessee, Sri B. Srinivasa Rao and Smt. Usha Rani and the search was finally concluded on 23.07.2020 at the residence of Sri B. Srinivasa Rao and Smt. Ush....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from 15.03.2020 to 28.02.2022 for the purpose of computation of limitation under various Acts and further granted a period of ninety days from 01.03.2022 where the limitation would have expired during the said period and if we consider the order of the Hon'ble Supreme Court, the time limit available for completion of assessment proceedings shall extend up to 31.05.2022. Therefore, even on this count, the assessment order passed by the A.O. on 31.03.2022 is well within the time limit provided under the Act. Therefore, the ground raised by the assessee should be rejected. In this regard, he relied upon the following decisions: 1. Ojjus Medicare (P) Ltd. Vs. PCIT (Central-1) reported in (2024) 161 taxmann.com 100 (Delhi). 2. Indian National Congress Vs. DCIT reported in (2024) 160 taxmann.com 606 (Delhi). 3. K. Krishnamurthy Vs. DCIT reported in (2025) 171 taxmann.com 413 (SC). 4. Smt. Pavithra Sugichandran Vs. DCIT reported in (2024) 168 taxmann.com 413 (Madras). 5. Jankhit Chandulal Prajapati Vs. DCIT (CC-1(3), Ahmedabad) in IT(SS)A Nos. 121 & 122/Ahd/2023 dated 08.08.2025. 6. In Re: Cognizance for Extension of Limitation, Su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mitation as prescribed under Section 153B of the Income Tax Act, because the A.O. has passed the assessment order beyond twelve months from the end of the financial year in which the last of authorization was executed. On the other hand, it was the arguments of the learned Sr.A.R. present for the Revenue that, the last of the authorization executed as referred to under Section 153B(2) of the Act, is the last of the authorization executed as recorded in the case of any person in whose case, the search was conducted, as recorded in the last panchanama drawn and if we go by the above provisions, in the present case, the last of the authorization was executed on 23.07.2020, which is evident from the relevant panchanama drawn on 23.07.2020 where it was clearly stated that the search was finally concluded on 23.07.2020 after revocation of restraint order dated 08.02.2020 issued under Section 132(3) of the Act during the course of search operation at the closet of the guest room at the north-west portion of the first floor situated at the residence of Shri B. Srinivas Rao. The learned Sr. A.R for the revenue, referring to the provisions of Section 292CC of the Act, submitted that, if a jo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Section 153B of the Income Tax Act, but not the last of the authorization executed in the case of any other person in whose case search was also conducted, as recorded in the last panchanama drawn in the case of such other person, merely because the search was conducted on the basis of a joint warrant of authorisation. In our considered view, the provisions of Section 292CC of the Act was specifically inserted in the statute to clarify the position of issuance of joint warrant of authorization and assessment in case of search or requisition and as per Section 292CC of the Act, it shall not be necessary to issue an authorization u/s 132 of the Act, separately in the name of each person and in case, more than one person is mentioned in the authorization, it shall not be deemed to construe that, it was issued in the name of associated persons or body of individuals consisting of such person and notwithstanding that an authorisation under Section 132 of the Act, has been issued mentioning therein the name of more than one person, the assessment or re-assessment shall be made separately in the name of each person mentioned in the name of authorisation or requisition. Therefore, from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut not from the date of conclusion of search in the case of Sri B. Srinivasa Rao and Smt. B. Usha Rani, as recorded in the last panchanama drawn in their case on 23.07.2020 as canvassed by the learned Sr.A.R. for the Revenue. Further, the time limit for completion of assessment proceedings in the case of the assessee falls between 20.03.2020 and 31.03.2021. As per the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the relevant Notification Nos. 10/2021, 38/2021 and 74/2021 issued by the CBDT, the date of completion of proceedings has been extended in view of the COVID outbreak up to 30.09.2021. Therefore, in view of the provisions of Section 153B read with the TOLA Act, 2020 and the relevant notifications issued by the CBDT, the time limit available for the A.O. to complete the assessment in the present case was up to 30.09.2021, whereas the A.O. has passed the assessment order for A.Y. 2014-15 to 2020-21 on 31.03.2022, which is beyond twelve months from the end of the financial year in which the last of the authorisations was executed. Therefore, in our considered view, the assessment order passed by the A.O. is barred by limitation and liab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing to Rs. 3,63,000/-, for A.Y. 2015-16 amounting to Rs. 7,26,100/- and for A.Y. 2016-17 amounting to Rs. 93,73,716/-. 23. The facts with regard to the impugned issue are that, during the course of search proceedings, certain notings in the form of cash sheets were found as attachments to emails in the personal email account of Shri P. Anil Kumar. The A.O., on the basis of such notings, treated the entries appearing therein as unaccounted income of the assessee and made additions for the respective assessment years. The A.O., while framing the assessment, proceeded on the basis that the said entries were not reflected in the books of account of the assessee. However, it is an admitted fact on record that the impugned notings were retrieved from the personal email account of Shri P. Anil Kumar. The assessee had specifically brought to the notice of the A.O. that Shri P. Anil Kumar joined the assessee company only on 01.12.2016 and prior to and even after his association with the assessee, he was independently engaged in execution of civil contract works through his own concern. It was further clarified that the impugned notings belong to Shri P. Anil Kumar in his individual capac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Kumar. The assessee has consistently explained that the said notings do not belong to it and pertain to Shri P. Anil Kumar in his individual capacity. It is also not in dispute that Shri P. Anil Kumar was independently engaged in contract business and had joined the assessee company only on 01.12.2016. The A.O., despite being aware of these facts, has not conducted any independent enquiry to establish that the impugned notings represent income of the assessee. No corroborative material has been brought on record to establish nexus between the entries and the assessee. In our considered view, addition cannot be made merely on the basis of third-party notings without establishing ownership and nexus with the assessee. Accordingly, the additions made for A.Ys. 2014-15, 2015-16 and 2016-17 are deleted. 29. The next issue that came up for our consideration is with respect to addition made by the A.O. towards alleged cash transactions with one Sri Krishna Reddy on the basis of a loose sheet found as an attachment in the email account of Shri P. Anil Kumar for A.Y. 2014-15 amounting to Rs.50,00,000/-, for A.Y. 2015-16 amounting to Rs.11,97,000/-, for A.Y. 2016-17 amounting to Rs.13,00....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 33. The learned counsel for the assessee, referring to the seized material available on record, submitted that the addition made by the A.O. is solely based on a loose sheet downloaded from the email account of Shri P. Anil Kumar, who is a third party and not related to the assessee company at the relevant point of time. The learned counsel further submitted that the said document is a dumb document and does not contain any details to establish that the transactions pertain to the assessee. He further submitted that no independent enquiry has been conducted by the A.O. to verify the authenticity of the transactions or to establish any nexus between the assessee and the alleged cash transactions. The learned counsel further submitted that the A.O. has failed to discharge the burden cast upon him to prove that the transactions reflected in the said document belong to the assessee. Therefore, he submitted that the addition made by the A.O. is without any basis and liable to be deleted. 34. The learned CIT-DR/Sr. A.R. for the Revenue, on the other hand, strongly supporting the order of the Ld. CIT(A), submitted that the impugned addition has been made on the basis of incriminating ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o consider the crucial facts relating to the date of joining of Shri Anil Kumar, the dates mentioned in the loose sheet and the absence of any reference to the assessee in the said document. 36. It is a settled principle of law that additions cannot be made merely on the basis of loose sheets or third-party documents without any corroborative evidence. In the present case, the impugned document was found in the personal e-mail account of a third party and there is no material to demonstrate that the same belongs to or relates to the assessee. The Assessing Officer has not conducted any independent enquiry to ascertain the nature and ownership of the entries nor brought any evidence on record to establish flow of funds or nexus with the assessee. In view of the above facts and circumstances, we are of the considered view that the addition made by the Assessing Officer and confirmed by the learned CIT(A) solely on the basis of the impugned loose sheet, without any corroborative evidence and without establishing nexus with the assessee, is unsustainable in law. Accordingly, we direct the A.O. to delete the additions made towards alleged cash transactions with Sri Krishna Reddy for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther submitted that the Ld. CIT(A) has himself accepted that many of the entries are personal or pertain to the independent business of Shri P. Anil Kumar. The learned counsel submitted that once such a finding is recorded, the addition cannot be sustained without identifying specific entries relatable to the assessee. It was also submitted that the A.O. has adopted an arbitrary method of computation without verifying the transactions and without conducting any independent enquiry. 42. The learned Sr. A.R. for the Revenue, on the other hand, supported the orders of the authorities below and submitted that the documents were found during the course of search and contain details of financial transactions. It was further submitted that certain transactions reflected in the cash scrolls indicate flow of funds and therefore, the A.O. was justified in making additions. The learned Sr. A.R. submitted that the directions given by the Ld. CIT(A) to verify entries are proper and require no interference. 43. We have heard both the parties, perused the material available on record and had gone through the orders of the authorities below. We find that, the additions have been made solely ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n this account for A.Ys. 2015-16 to 2020-21 are deleted. 44. The next issue that came up for our consideration is with respect to addition made by the A.O. towards alleged out of book cash transactions relating to "BC Soil Land" on the basis of an Excel sheet found as an attachment in the email account of Shri P. Anil Kumar for A.Y. 2017-18 amounting to Rs. 29,10,000/-. 45. The facts with regard to the impugned issue are that the addition has been made on the basis of an Excel sheet containing certain notings relating to proposed purchases of black soil lands. The said lands were contemplated for procurement of black soil required for construction of a bund forming part of a water reservoir project. The Excel sheet contained details such as name of the land owner, extent of land, location and a column titled "Cash". The A.O., on the basis of such notings, treated the amounts mentioned under the "Cash" column as unexplained expenditure of the assessee without bringing any material on record to establish that such amounts were actually payable or paid. 46. Aggrieved by the assessment order, the assessee preferred appeal before the Ld. CIT(A). Before the Ld. CIT(A), the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the books. The learned CIT-DR/Sr. A.R. submitted that the assessee has not been able to satisfactorily explain the difference between the entries in the Excel sheet and the transactions recorded in the books and therefore, the A.O. was justified in making the addition. 50. We have heard both the parties and perused the material available on record. We find that, the addition has been made solely on the basis of an Excel sheet which contains preliminary notings and does not establish actual payment of cash. The assessee has demonstrated various inconsistencies between the entries in the sheet and actual transactions recorded in the books. In our considered view, such a document, which is in the nature of a proposal and not acted upon, cannot form the basis for making addition in the absence of corroborative evidence. Accordingly, the addition made for A.Y. 2017-18 is deleted. 51. The next issue that came up for our consideration is with respect to addition made by the A.O. towards alleged cash transactions with one Murali Krishna on the basis of an Excel sheet found as an attachment in the email account of Shri P. Anil Kumar for A.Y. 2018-19 amounting to Rs.9,11,077/- and for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts duplication of amounts already considered under another issue. 56. The learned CIT-DR/Sr. A.R. for the Revenue, on the other hand, submitted that the document contains structured notings relating to commission payments linked to project milestones, which indicates that the entries are not random but represent actual financial dealings. It was further submitted that the assessee has failed to offer any satisfactory explanation regarding the nature of these entries and therefore, the A.O. was justified in treating the same as unexplained expenditure. The learned CIT-DR/Sr. A.R. submitted that the relief granted by the Ld. CIT(A) has already taken care of overlapping entries and no further relief is warranted. 57. We have heard both the parties and perused the material available on record. We find that, the addition has been made solely on the basis of an Excel sheet found in the personal email account of Shri P. Anil Kumar without establishing that the same belongs to the assessee or that the entries represent actual expenditure incurred by it. No corroborative evidence has been brought on record, and no nexus has been established. Further, part of the addition has already ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the said chats. It was submitted that no material has been brought on record to establish that the alleged payment pertains to or was made on behalf of the assessee. The assessee further submitted that no statement was recorded from Shri P. Anil Kumar to ascertain the nature or context of the messages and no evidence has been brought on record to demonstrate actual flow of funds such as withdrawal, transfer or utilisation of Rs.2.15 crores. It was also submitted that WhatsApp messages, in the absence of proper authentication and corroboration, do not constitute reliable evidence. The Ld. CIT(A), after considering the submissions of the assessee and the findings of the A.O., however, was not convinced with the explanation furnished and held that the contents of the WhatsApp messages indicate unaccounted transactions. Accordingly, the Ld. CIT(A) sustained the addition made by the A.O. 61. Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before us. 62. The learned counsel for the assessee, referring to the written submissions, submitted that the addition is based solely on WhatsApp messages exchanged between third parties and there is no reference to the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hing nexus with the assessee and without any supporting evidence. In our considered view, WhatsApp chats are electronic messages and without proper authentication and supporting material cannot constitute admissible evidence for the purpose of making additions under the Act, as held by ITAT, Visakhapatnam in the case of ACIT Vs. Manchukonda Shyam (supra) and also the decision of ITAT, Hyderabad in the case of Gavireddygari Aparna Kalyani Vs. ACIT in ITA No.3/Hyd/2023. The Ld. CIT(A) without appreciating the relevant facts, simply sustained the addition made by the A.O. Accordingly, the addition made for A.Y. 2020-21 is deleted. 65. The next issue that came up for our consideration is with respect to addition made by the A.O. towards alleged 1% commission income by treating sub-contracts as bogus in respect of (i) works awarded to Shantha Constructions (Pkg 10) for A.Ys. 2017-18, 2018-19 and 2019-20, (ii) works awarded by Megha Engineering Ltd and sub-contracted to Ravinder Rao, Avaya Construction Company and Expressway Services Pvt Ltd for A.Ys. 2015-16 to 2018-19, and (iii) works awarded to Expressway Services Pvt Ltd (Pkg 5 and 10) for A.Ys. 2018-19, 2019-20 and 2020-21. 66....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any commission income has actually been earned by the assessee. It was submitted that during the course of search, though certain sub-contractors initially made statements stating that they had not executed the works, subsequently, in response to notices issued under section 133(6) and summons under section 131of the Act, the very same sub-contractors furnished complete details such as work orders, bank statements, bills and income tax returns, clearly evidencing execution of works. 70. The learned counsel submitted that, the A.O. has selectively relied upon initial statements recorded during search while completely ignoring the documentary evidences furnished subsequently. It was further submitted that only a few sub-contractors were examined and their statements were generalized to all contracts, which is factually incorrect. The learned counsel further submitted that the reasons cited by the Revenue such as engagement of employees of group companies as sub-contractors, lack of formal appraisal systems, and filing of returns from common IP address do not render the contracts as bogus. It was submitted that the nature of infrastructure projects requires engagement of multiple ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from sub-contractors, have not been properly controverted by the A.O. Further, no material has been brought on record to establish flow of funds back to the assessee. In the absence of any corroborative evidence, the estimation of 1% commission income is purely based on presumptions and cannot be sustained. In our considered view, addition cannot be made merely on the basis of assumptions and presumptions without any corroborative evidence. 74. We have given our thoughtful consideration to the rival submissions and perused the material available on record. The A.O. has made the addition primarily on the basis of statements recorded during the course of search without bringing any independent corroborative evidence to establish that the sub-contracts are bogus or that any commission income has accrued to the assessee. On the other hand, the assessee has furnished various evidences including work orders, bills, bank statements and confirmations from sub-contractors to demonstrate execution of work. It is further noticed that most of the sub-contractors, in response to notices issued under section 133(6) and summons under section 131 of the Act, have confirmed execution of work and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asis of statements recorded during the course of search, particularly from Shri V. Narasimha Rao, the A.O. formed a view that the subcontract awarded to Shantha Constructions was not genuine and that the amounts paid to the subcontractor were returned back in cash to the management of the assessee. The A.O. further observed that, the arrangement between the assessee and the subcontractor was only accommodative in nature and that the payments made through banking channels were subsequently withdrawn and returned in cash. On the basis of such observations and statements, without bringing any independent corroborative evidence on record to establish actual flow of funds, the A.O. treated the amounts of Rs.11,05,00,000/- for A.Y. 2018-19 and Rs.5,70,00,000/- for A.Y. 2019-20 as unexplained income of the assessee. 78. Aggrieved by the assessment order, the assessee preferred appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee submitted that, the entire addition has been made solely on the basis of statement of Shri V. Narasimha Rao without any corroborative evidence. It was submitted that the works executed through Shantha Constructions pertain to Government contracts, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sh was found. The learned counsel submitted that the entire addition is based on statement of one Shri V. Narasimha Rao, who was not subjected to cross-examination despite specific request and whose statement is uncorroborated. It was further submitted that even the Managing Director of the assessee company denied any such transaction. 82. The learned Sr. A.R. for the Revenue, on the other hand, supported the orders of the authorities below and submitted that the statement of Shri V. Narasimha Rao indicates that cash was received from the subcontractor and returned to the management. It was further submitted that the A.O., based on such statement and surrounding circumstances, has rightly concluded that the payments made to the subcontractor were routed back in cash. 83. We have heard the learned counsel for the assessee and the learned Sr. A.R. for the Revenue, perused the material available on record and had gone through the orders of the authorities below. We find that, the addition has been made primarily on the basis of statement of a third party without any corroborative evidence. The assessee has placed on record documentary evidences establishing execution of work, re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d is genuine and the entire addition has been made solely on the basis of statement of Sri Kurra Jogeshwara Rao without any corroborative evidence. It was submitted that the said person himself has admitted that he was not involved in execution of the contract during the relevant period and therefore, his statement cannot be relied upon to conclude that the work was not executed. The assessee further submitted that the contract relates to Government work, where payments were released only after due inspection and verification by the concerned authorities and the payments made to the subcontractor were through banking channels with due deduction of tax at source. The Ld. CIT(A), after considering the submissions of the assessee and the findings of the A.O., however, was not convinced with the explanation furnished by the assessee and held that the statement of Sri K.J. Rao indicates that the sub-contract was not genuine and the amounts were returned in cash. Accordingly, the Ld. CIT(A) confirmed the addition made by the A.O. 88. Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before us. 89. The learned counsel for the assessee, referring to the written su....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....O., based on such statement and surrounding circumstances, has rightly concluded that the transaction is accommodative in nature. 92. We have heard both parties, perused the material on record and had gone through the orders of the authorities below. We find that, the addition has been made primarily on the basis of statement of Sri K.J. Rao without any corroborative evidence. It is not in dispute that the said person himself has admitted that he was not involved in execution of the contract during the relevant period. The statement is inconsistent and lacks credibility, as he could not identify the project, amounts or the persons involved in the alleged transaction. 93. We further find that, the assessee has placed on record documentary evidences establishing execution of work, receipt of payments through banking channels after Government verification and corresponding payments to the subcontractor with due deduction of tax at source. Both the assessee and the subcontractor maintain audited books of account and no defect has been pointed out. No material has been brought on record to establish any flow of funds back to the assessee. Despite search, no evidence of cash circu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f cash balances belonging to other entities functioning from the said premises. However, in so far as the balance amount of Rs.36,54,156/- is concerned, the Ld. CIT(A) held that the assessee has not satisfactorily explained the same and accordingly sustained the addition to that extent. 97. Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before us. 98. The learned counsel for the assessee, referring to the written submissions, submitted that the premises "Prathima" houses multiple companies and the cash found therein cannot be attributed entirely to the assessee. It was further submitted that details of cash balances of various entities functioning from the premises, along with supporting documents, were furnished before the authorities. The learned counsel submitted that the Ld. CIT(A) has accepted the explanation in respect of other entities but arbitrarily sustained addition in part. 99. The learned counsel for the assessee further submitted that, the Ld. CIT(A) had directed the assessee to obtain a certified copy of cash balance from the seized cash book. However, the A.O. expressed inability to provide such certificate on the ground that the seized....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with only variation in figures. Therefore, the same are being adjudicated issue-wise for the respective assessment years. 104. The first issue that came up for our consideration in the Revenue's appeals is with respect to deletion of additions made by the A.O. towards unexplained income for A.Ys. 2016-17, 2017-18, 2018-19 and 2019-20. 105. We have heard both the parties, perused the material available on record and had gone through the orders of the authorities below. The issue involved in the present appeals of the Revenue is identical to the issues considered by us in the assessee's appeals for the respective assessment years, wherein we have held that additions made on the basis of loose sheets / email data of Shri P. Anil Kumar without any corroborative evidence and nexus with the assessee cannot be sustained. Since the Ld. CIT(A) has deleted the additions on similar lines, we find no error in the findings of the Ld. CIT(A) and accordingly, the grounds raised by the Revenue for the above assessment years are dismissed. 106. The next issue that came up for our consideration in the Revenue's appeals is with respect to deletion of disallowance of deduction claimed under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Hon'ble Delhi High Court in the case of Celebi Delhi Cargo Terminal Management India Pvt. Ltd., Vs. Union of India (2019) 104 taxmann.com 219 (Delhi)., submitted that, when the assessee has not directly entered into an agreement with Central Government/ State Government or local authorities, then it does not satisfy the conditions of provisions of Section 80IA(4) of the Act, and hence, the same is not eligible for deduction u/s 80IA(4) of the Act. Therefore, he submitted that, the Ld. CIT(A) without considering the relevant facts and also by following assessee's own case, has allowed relief, even though, the Revenue has not accepted the decision of the ITAT and further appeal has been filed before the Hon'ble High Court, which is pending for adjudication. Therefore, he submitted that, the additions made by the A.O. should be upheld. 111. The learned counsel for the assessee, on the other hand, submitted that the assessee is engaged in execution of infrastructure development projects and the nature of activities carried out by the assessee clearly falls within the scope of Section 80IA(4) of the Act. He further submitted that, the issue is squarely covered in favour of the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ogether different because, the issue considered by the Coordinate Bench in assessee's own case is whether work awarded to a Joint Venture or Consortium by any of Central Government or State Government or local authority and work was executed by constituent partners of JV and claimed deduction u/s 80IA(4) towards eligible profit for development of infrastructure project. The Coordinate Bench of the Tribunal by considering the above facts, has held that once the assessee, being a constituent partner of a JV, which got awarded the contracts for development of infrastructure project and the assessee has executed the development of infrastructure project according to its share in the JV, then it is as good as the assessee has entered into agreement with Central Government or State Government or local authority for the purpose of Section 80IA(4) of the Act and thus, the profits derived from eligible projects are entitled for deduction under Section 80IA(4) of the Act. Since the facts of the present case and cases relied upon by the ld. CIT-DR are entirely different, in our considered view, the case law relied upon by the Ld. CIT-DR is rejected. 114. In this view of the matter and cons....