TaxTMI 
TaxTMI 
2025 (9) TMI 1837
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the Assessing Officer in the assessment order?" 2 "Whether, on the facts and in the circumstances of the case and in law, the Ed. CIT(A) erred in not appreciating that the Assessing Officer rightly disallowed 22,18,98,416/- on account of unexplained and non-genuine expenditure towards payments made by the assessee company to Sent Mayaben V. Parmar for manpower services?" 3. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIF(A) erred in failing to properly consider the findings recorded in Para 7.5 of the assessment order, wherein the assessee failed to substantiate the transaction by adducing evidence to establish the genuineness of manpower services provided to the assessee company?" Grounds of C.O On the facts and in the circumstances of the case, the learned AO has: General Objection to Department's Appeal 1. erred in objecting the order of Ld. CIT(A) deleting addition in respect of unexplained and non-genuine labour charges of INR 2,18,98,416 made in the order under section 147 of the Act without appreciating the facts of the case, Validity of Reopening proceedings under section 147....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A) gave substantial relief to the assessee. The appeal filed by the Department against the order of the CIT(A) is currently pending before the Tribunal. In the mean time the assessee's case was reopened by issue of notice under section 148 dated 29.03.2019 for the reason that payments made by the assessee to one of the contractors i.e. Smt. Mayaben Vijay Parmar for manpower / labour services are unexplained and non-genuine. In response to the said notice the assessee filed the return of income and also filed the objection for reopening. The AO disposed of the objections vide order dated 01.10.2019. The assessee subsequently filed various details such as ledger copy of Smt. Mayaben Vijay Parmar's account in assessee's books containing details of the projects for which the payments are made along with copies of invoices, bank statements, TDS Certificate, etc. After considering the details submitted by the assessee, the AO proceeded to treat the payments made to Smt. Mayaben Vijay Parmar as unexplained by holding that "7.5 The submission of the assessee has been considered the same is found to be not acceptable. For the year under consideration, the assessee had m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany as per their claim through banking channel. It is also pertinent to mention here that the cash withdrawn by the parties immediately after funds are received from the assessee company. Further, the parties have also failed to substantiate transaction with adducing evidences to establish the transaction to provide manpower services to the assessee company. 7.6 In view of these facts of the case, it is construed that the transaction of the assessee company with Sent. Mayaben V. Parmar and Shri Vijay G. Parmar (HUF) is non-genuine expenditure. For the year under consideration, the assessee has claimed to have made payment to Smt. Mayaben V. Parmar to the tune of Rs.2,18,98,416/- which is not substantiated and therefore, the same is treated as non-genuine expenditure. Therefore, the same is hereby added back to the total income of the assessee for the year under consideration." 3. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) gave relief to the assessee on merits on the ground that the payments towards labour charges are paid by the assessee through proper banking channel after deduction TDS and that the investigation report itself mentions....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... drew our attention to the various details furnished before the CIT(A) and argued that there is no infirmity in the order of the CIT(A) who was examined the issue on merits while allowing the appeal. The ld. AR placed reliance on the decision of the Hon'ble Bombay High Court in assessee's own case wherein an identical issue regarding alleged unexplained payments by the assessee and held that "19. We are in agreement with the views expressed by the Tribunal. Merely on suspicion based on information received from another authority, the assessing officer ought not to have made the additions without carrying out independent enquiry and without affording due opportunity to the respondent assessee to controvert the statements made by the sellers before the other authority. Accordingly, we do not find any good ground to entertain this question for consideration as well." 5. The ld. DR on the other hand argued that there was information received from DDIT(Inv.) regarding the cash withdrawals by Smt. Mayaben Vijay Parmar immediately after the receipt of payments from the assessee and therefore the AO had a reason to belief that the payment made are not genuine. The ld. D....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../2019 and the remaining details to be submitted by 05/02/2019. On 30/01/2019 company and stated that the company involved in construction activities i.e. commercial & residential. During the construction activities companies has required skilled & unskilled manpower, hire machinery, construction material and services. Mayaben V. Parmar and Vijay G. parmar were working with the company and providing manpower services in its different projects. Company has submitted the sub-contract work order details with the Mayaben V. Parmar and Vijay G. Parmar which were verified and kept on record. On 04/02/2019 company has submitted details of ledger copies, payment details and TDS certificates which were verified." 7. From the perusal of the order of the CIT(A), we notice that the CIT(A) has considered the above observations to hold that rendering of services by Smt. Mayaben Vijay Parmar and that the payments are properly evidenced are not doubted by Investigation wing. We also notice that in Para 7 of the investigation report it is stated that the assessee failed to provide evidence that Smt. Mayaben Vijay Parmar has withdrawn the amount paid by the assessee to make labour payment....