TMI Blog2021 (7) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... o a third-party, would not make the transaction to be bogus. Similarly, in respect of manpower supply charges paid by assessee, except for the allegation by the Ld. AO that the employees who rendered services to assessee were related to the director of assessee would not lead to a conclusion that the necessity of such services were not required by assessee. In any case there is no evidence brought on record by the Ld. AO that assessee was not in requirement of any manpower supply services or that the solar plant machine was not installed by assessee. Application of section 68 - The amount under consideration are expenses in the hands of assessee. Section 68 cannot be applied in the present facts of the case as there is no cash credits in the books of account of assessee. Thus in our view addition made in the hands of assessee by invoking provisions of section 68 are misconceived and has been rightly deleted by the Ld. CIT(A). - Decided against revenue. - ITA 2535/Bang/2019 - - - Dated:- 16-7-2021 - B. R. Baskaran , Member ( A ) And Beena Pillai , Member ( J ) For the Appellant : Kannan Narayanan , JCIT ( DR ) For the Respondents : V. Srinivasan , Advocate OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was concluded that LDC Holdings Pvt. Ltd., has offered the said amount to tax and the confirmation in respect of the same. Assessee thus submitted that the said amount could not be treated as bogus liability. 2.2. The Ld. AO after considering the contentions was of the opinion that the payment made towards solar power plant installation charges and manpower supply charges to LDC Holdings were bogus transaction. He thus made addition under section 68 of the Act in the hands of assessee to an extent of ₹ 1,68,70,000/-. 2.3. Aggrieved by the addition made by the Ld. AO, assessee filed appeal before the Ld. CIT (A). 3. The Ld. CIT(A) after considering the submissions of assessee observed and held as under: 6 I have considered the grounds of appeal, statement of facts and written submissions filed by the appellant, Ground No. 1 and 6 are general in nature and do not require any specific adjudication. 6.1 Ground Nos. 2 and 4 raised by the appellant are with reference to the addition of ₹ 68,70,000/made u/s. 68 of the Act in respect of the amount payable for installation of Solar Power Plant to M/s. LDC Holdings Private Limited. The Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the appellant has made payments to M/s. LDC Holdings Pvt. Ltd., in the subsequent year and the liability outstanding at the end of the year cannot be considered as a bogus liability. The AO has invoked the provisions of section 68 of the Act, to make the addition of ₹ 68,70,000/- in respect of the amount due to M/s. LDC Holdings Pvt. Ltd., for the installation of solar power plant. I am of the considered view that the provisions of section 68 are inapplicable, as the appellant has proved the identity of the creditor, capacity as well as the genuineness of the transactions. Hence, the addition of ₹ 68,70,000/- is hereby deleted. This ground is therefore allowed. 6.2 Ground Nos. 3 and 4 raised by the appellant are related to the disallowance of ₹ 1,00,00,000/in respect of the amount due to M/s. LDC Holdings Pvt. Ltd., towards manpower supply charges. Even in respect of this addition, the AO has held that the appellant has not established the veracity of the liability to M/s. LDC Holdings Pvt. Ltd., for supply of manpower charges. The AO has held that the appellant has not given the details of the persons who were deputed by M/s. LDC Holdings Pvt. Ltd., t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees of M/s. LDC Holdings Pvt. Ltd., vs. relative of the director of the assessee. He submitted that, the payments made to LDC Holding Pvt. Ltd., towards manpower supply charges has no rational since the persons were such whose credentials did not match with the requirement of the job and yet payment made to them was way higher than what assessee paid to their own capable and experienced expert manpower. He submitted that, assessee before the Ld. AO did not provide the attendance register to substantiate its claim. 4.2. He thus vehemently supported the additions made by the Ld. AO under section 68 of the Act. 4.3. On the other hand the Ld. Counsel submitted that the findings recorded by the Ld. AO was purely on suspicion and surmises. He submitted that, assessee had in fact installed the solar power plant system on which depreciation was claimed for the year under consideration. He submitted that the Ld. AO disallowed the said expenses in the hands of assessee simply for the reason that M/s. LDC Holding Pvt. Ltd. had debited a sum of ₹ 32,75,231/- towards solar power plant installation charges in its financials whereas, it had received a sum of ₹ 68,70,000/- f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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