TMI Blog2019 (5) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... i Y.V.S.T. Sai For The Assessee : Shri V. Raghavendra Rao ORDER PER S. RIFAUR RAHMAN, AM: Both these appeals filed by the revenue are directed against the orders of CIT(A) 2, Hyderabad, for the AYs 2011-12 and 2012-13. As identical issue is involved in both these appeals they were clubbed and heard together and therefore, a common order is passed for the sake of convenience. 2. Brief facts as taken from AY 2011-12 are, during the course of survey u/s 133A at the premises of the assessee on 08/02/2011, blank letter heads in the name of various concerns apparently located at Delhi were found. Upon questioning, the assessee could not provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed through the sub-contractors as listed in para 10 above may be dealt by the Department in the manner, whatever the department may thing quite appropriate and reasonable, since, we are not in a position to produce the sub-contractors in view of the details as explained above. We further submits that, even in the event of disallowance of the said subcontractors amount, we will abide by the department stand for giving a quietus to prolonged litigation and to buy peace subject to not to levy the penalty proceedings . 2.3 The AO noted that the above submissions clearly show that the assessee is unable to justify the work/ purchases from the alleged parties and escaping all through by stating that the work was done long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Whether, on the facts and circumstances of the case, the CIT(A) is correct in law in holding that the disallowance should be restricted to 15% even when the AO had conclusively proved during the assessment proceedings that all entities are bogus in nature? 3. Whether, on the facts and circumstances of the case, the CIT(A) is correct in law in restricting the disallowance to 15% even when the assessee was not able to produce any of the entities before the AO during assessment proceedings despite availing reasonable opportunity? 4. Any other ground that may be urged at the time of hearing. 6. Before us, the ld. DR apart from relying on the assessment orders for A.Y. 2011-12 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided, all possible enquiries were conducted and the outcome is against the case of the assessee. More importantly, the incriminating evidences clearly show the bogus nature of the transactions involved. In view of the above, the transactions / payments are not genuine and the assessee cannot escape taxation by making mere statements without any substance. Accordingly, it is submitted that restricting the disallowance to 15%, as done by the CIT(A), based on the decision of the Hon'ble ITAT, is not correct and reasonable. The disallowance in its entirety needs to be upheld. 6.1 Further, the ld. DR relied on the following cases: 1. NK Industries Vs. DCIT, [2016] 72 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Company all along. However, in this case the inflating of expenditure by the assessee cannot be ruled out. Considering the entire facts and circumstance of the case and chances of inflating the expenses by the assessee, to meet the ends of justice, we are inclined to disallow 15% of this payment. As the issue under consideration is materially identical to that of AY 2008-09, following the decision therein, we uphold the order of the CIT(A) in directing the AO to disallow the expenditure to the extent of 15% out of the total expenditure of ₹ 21,66,90,608/- and dismiss the grounds raised by the revenue on this issue. 9. As the facts and grounds are materially identical in AY 2012-13 to that of AY ..... X X X X Extracts X X X X X X X X Extracts X X X X
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