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2021 (6) TMI 978 - AT - Income TaxAssessment u/s 153A - assessee has failed to prove the genuineness of the expenditure incurred - HELD THAT:- There are incriminating material found during the course of search coupled with the statement of the entry operators which clearly proved that the assessing officer has rightly assumed the jurisdiction and asked the assessee to prove the identity creditworthiness and genuineness of the subcontractors who perform the work and whose expenditure has been booked by the assessee in the profit and loss account. As the addition has been made u/s 37 (1) of the act as the assessee has failed to prove the genuineness of the expenditure incurred, therefore they have been rightly disallowed by the learned assessing officer and confirmed by the learned and CIT appeal respectfully following the decision of the honourable Delhi High Court in case of Modi stone Ltd [2011 (5) TMI 26 - DELHI HIGH COURT] . As the addition/disallowance has not only been made only on the basis of the statement of Mr Praveen Agarwal but on the part of the failure of the assessee to prove the genuineness of the work carried out - there is no requirement of giving any opportunity of cross-examination of Mr Praveen Agarwal to the assessee’s as the addition is not solely been made on that basis. AO has made the addition in the hence of the assessee on protective basis and the learned CIT – A has confirmed the addition in the hence of the assessee on substantive basis by disallowing the expenditure, we set-aside the whole issue back to the file of AO to verify that if the addition has been made on substantive basis in the hands of PACL Ltd and assessee has already been charged tax on the income, then the addition of disallowance of the expenditure in the hence of the assessee requires to be deleted as it will amount to double addition of the same income. Even otherwise the real beneficiary of this accommodation entry is PACL Ltd. If the substantive addition has not been sustained or made in the hence of the PACL Ltd then the order of the learned CIT – A deserves to be confirmed and addition is required to be made in the hence of the assessee - Appeal filed by the assessee is set-aside to the file of the learned assessing officer with above direction.
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