TMI Blog2021 (10) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the assessee could not substantiate the discrepancies but did not mention anything as to what are all the discrepancies found. The mere allegations cannot be treated as evidences. The fundamental principle of justice requires the Assessing Officer to discover and collect evidence and confront the assessee before making any disallowance. In the instant case, there was no mention at all as to which of the expenses is bogus or inflated. In the instant case, we find no primary evidences or secondary evidences or even any probabilities brought out by the revenue to resort to disallowance of 5% expenses over and above 6.77% net profit disclosed by the assessee. Any disallowance made by the revenue without bringing any evidence on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... described in the reasons mentioned. Fourthly, No evidence worth name to link the assessee with Ramendra Singh/ Yadav Singh has been described in the reasons mentioned. 3. That the Ld. CIT (A) has erred in not appreciating that the proceedings initiated u/s 147/148 are invalid and illegal as the reasons recorded do not reflect any live nexus (cause and effect relationship between findings of search and seizure operation on Mr. Ramendra Singh and assessee herein) therefore, satisfaction of the Assessing Officer regarding escapement of income are based upon borrowed satisfaction of the Investigation Wing of the department. 4. That orders passed by Ld AO and Ld CIT-A are bad in law as reasons stated in assessment order was nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by A.O./ CIT(A) are void-ab-initio. 8. That on the facts and in the circumstances of the case and in law, Id CIT(A) erred in sustaining the action of AO in making addition of ₹ 83,09,389/- without appreciating that no opportunity is given to the assessee to be confronted with back material and no opportunity to cross examine the revenue's witness was given despite mandated in revenue office manual which is flouted by the ld. A.O. and CIT(A). 9. That without prejudice to above, addition of ₹ 41,74,789/- as made by the assessing officer u/s 40A(3) and confirmed by CIT(A) is outside the purview of reasons recorded and no subsequent information has come to A.O. within the meaning of Explanation 3 of section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roll. The AO issued show-cause notice why not the profits be estimated @ 8% of the total receipts owing to non-submission of bills. The assessee vide letter dated 28.12.2016 submitted that all financial and necessary documents have been submitted and explained every debit entry of withdrawal and payment from bank account. The AO not satisfied with the reply of the assessee and has disallowed an amount @ 5% of the contract work awarded by NOIDA. 5. The relevant part of the assessment order is reproduced as under for ready reference: Considering the totality of facts of this case as also considering the nature of construction business, also relying on N.P. rate declared by other assessees in similar line of business and also consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be ₹ 1,24,84,178/- which is being disallowed and added to the income of the assessee. 6. The ld. CIT (A) confirmed the addition. While confirming, the ld. CIT (A) assumed that the Assessing Officer has given a finding that 5% of the total turnover must have been paid by the appellant as commission by diverting funds in the guise of various expenses shown in the books majority of which has been incurred in cash. The AO has also given a finding that the appellant had paid ₹ 41,74,789/- in contravention to provisions of Section 40A(3) of the Act. The addition made by the Assessing Officer of ₹ 41,74,789/- is confirmed. However, since this amount is also embedded in the 5% commission made in cash i.e. amount of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old limit. Beyond this, the Assessing Officer has not brought anything on record to disallow 5% of the expenses. He has not determined even the head under which the expenses have been inflated or bogus. Even, in the case of payments made in cash, absolutely no enquiries have been conducted. The Assessing Officer held that the assessee could not substantiate the discrepancies but did not mention anything as to what are all the discrepancies found. The mere allegations cannot be treated as evidences. The fundamental principle of justice requires the Assessing Officer to discover and collect evidence and confront the assessee before making any disallowance. In the instant case, there was no mention at all as to which of the expenses is bogus o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
