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2021 (2) TMI 1288 - AT - Income TaxAssessment u/s 153A - Addition equal to 20% of the total labour sub contract expenses - Disallowance on the ground that assessee has not maintained any books of accounts - HELD THAT:- The assessee has made payments to these individuals for the further disbursement to these labourers. We note that AO has not pointed out any defect in the books of accounts of the assessee and in these labour contractors bills and just made the disallowance that these are not allowable under section 37(1) of the Act being not wholly and exclusively incurred for the purpose of business of the assessee. We find that Ld. CIT(A) has taken into account all the aspects of the matter and documents while allowing the appeal of the assessee as has been stated hereinabove copies of bills and vouchers, TDS certificates, copies of PF payments and payment through banking channels etc. The case of the assessee also finds support from the decision of TUV India Pvt. Ltd [2019 (8) TMI 1050 - ITAT MUMBAI] wherein it has been held that where the assessee submits complete details of expenses and AO not finding any defects in the books of accounts, the adhoc disallowance of expenses by the AO are not justified. Admittedly no incriminating material qua these sub contract expenses were found during the course of search and it is a trait and settled law that that no addition can be made in the unabated assessment which has attained finality on the date of search without any incriminating material. The case of the assessee is supported by the decision of the Apex Court in the case of PCIT vs. Meeta Gutgutia [2018 (7) TMI 569 - SC ORDER] wherein the Hon’ble Supreme Court has held that invocation of section 153A to reopen the concluded assessment was not justified in absence of any incriminating material found during the course of search - Decided against revenue. Bogus cement purchases - assessee has deviated from SOP which could not be explained during the assessment proceedings - sustaining of addition to the extent of 15% by the ld CIT(A) - HELD THAT:- CIT(A) has observed that AO has declined to examine the gate entry registry, internal transfer challans produced before him. CIT(A) has even noted that AO has not examined the claim of the assessee that bills furnished were in fact invoices cum delivery challans with all details and AO has primarily relied on the statements recorded which had been retracted since then in para 5.14. - CIT(A) has also recorded a finding that there is no evidence brought on record that payments to cement manufacturers have come back to the assessee. Under these facts and circumstances, we are not in agreement with the conclusion drawn by the CIT(A) that a disallowance to the extent of 15% can be sustained. We note that AO has not pointed out any defects in the books of accounts of the assessee. The case of the assessee finds support from the decision of Hon’ble Gujarat High Court in the case of CIT vs. Tejua Rohitkumar Kapadia [2018 (7) TMI 590 - SC ORDER] wherein it has been held that purchases made by the assessee were duly supported by bills and payments and account payee cheques and further confirmed by the seller and the AO not bringing any evidence on record to show that amount is recycled back to the assessee beside accepting the sales out of the purchases , then addition under section 69C was not called for - no disallowance can be made towards bogus purchases and thus the order of Ld. CIT(A) can not be sustained on this. - Decided in favour of assessee.
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