DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(2), MUMBAI vs. M/S CAPACIT"E INFRAPROJECTS LTD, MUMBAI

PER OM PRAKASH KANT, AM

These appeals by the Revenue are directed against separate order, each dated 03.01.2023, passed by the Ld. Commissioner of Income-tax (Appeals)-47, Mumbai [in short ‘the Ld. CIT(A)’] for assessment years 2017-18 to 2020-21. The common grounds are involved in these appeals and therefore, same were heard together and disposed off by way of this consolidated order for convenience.

M/s Capacit’e Infraprojects Ltd. 2 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

"1. On the facts and circumstances of the case and in law, the CIT(A) "1. On the facts and circumstances of the case and in law, the CIT(A) "1. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of the unverified purchases has erred in deleting the disallowance of the unverified purchases has erred in deleting the disallowance of the unverified purchases amounting to Rs. 4,62,71,849/ amounting to Rs. 4,62,71,849/-made u/s 37(1) of the Income Tax Act, made u/s 37(1) of the Income Tax Act, 1961, without consider 1961, without considering the fact that the onus is on the assessee to ing the fact that the onus is on the assessee to establish the genuineness of the transactions by submitting requisite establish the genuineness of the transactions by submitting requisite establish the genuineness of the transactions by submitting requisite documentary vis documentary vis-à-vis the entries made in the books. 2. On the facts and circumstances of the case and in law, the CIT(A) 2. On the facts and circumstances of the case and in law, the CIT(A) 2. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of the unverified sub deleting the disallowance of the unverified sub-contract deleting the disallowance of the unverified sub expenses amounting to Rs. 9,25,45,300/ expenses amounting to Rs. 9,25,45,300/- made u/s 37(1) of the made u/s 37(1) of the Income Tax Act, 1961, without considering the fact that the onus is on Income Tax Act, 1961, without considering the fact that the onus is on Income Tax Act, 1961, without considering the fact that the onus is on the assessee to establish the genuineness of the transactions by the assessee to establish the genuineness of the transactions by the assessee to establish the genuineness of the transactions by submitting requisite documentary vis ubmitting requisite documentary vis-à-vis the entries made in the vis the entries made in the books. 3. On the facts and circumstances of the case and in law, the CIT(A) 3. On the facts and circumstances of the case and in law, the CIT(A) 3. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of the sub has erred in deleting the disallowance of the sub-contract expenses contract expenses amounting to Rs. 3,18,69,396/ amounting to Rs. 3,18,69,396/- made us 37(1) of the Income Tax Act, f the Income Tax Act, 1961 on protective basis in the hands of the assessee company 1961 on protective basis in the hands of the assessee company 1961 on protective basis in the hands of the assessee company without considering the fact both the assessee company as well as without considering the fact both the assessee company as well as without considering the fact both the assessee company as well as M/s. Bhupati Infrabuild Services Pvt. Ltd. had failed to substantiate M/s. Bhupati Infrabuild Services Pvt. Ltd. had failed to substantiate M/s. Bhupati Infrabuild Services Pvt. Ltd. had failed to substantiate the cash expenses incurred. the cash expenses incurred. 4. On the facts and circumstances of the case and in law, the CIT(A) e facts and circumstances of the case and in law, the CIT(A) e facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of education fees amounting to has erred in deleting the disallowance of education fees amounting to has erred in deleting the disallowance of education fees amounting to Rs. 45,00,896/ Rs. 45,00,896/- made u/s 37(1) of the Income Tax Act, 1961 without made u/s 37(1) of the Income Tax Act, 1961 without considering the fact that the assessee had failed to expla considering the fact that the assessee had failed to explain why the in why the education expenses termed as education expenses termed as 'training' was sponsored only to Shri. Asutosh Katyal and not to any 'training' was sponsored only to Shri. Asutosh Katyal and not to any 'training' was sponsored only to Shri. Asutosh Katyal and not to any other eligible employee of the company and also that link between the other eligible employee of the company and also that link between the other eligible employee of the company and also that link between the primary business of the assessee company and the educational primary business of the assessee company and the educational primary business of the assessee company and the educational course pursued b course pursued by Shri. Asutosh Katyal was not well established to Asutosh Katyal was not well established to prove that the same was for the purpose of the business of the prove that the same was for the purpose of the business of the prove that the same was for the purpose of the business of the assessee company and how was the same going to benefit the assessee company and how was the same going to benefit the assessee company and how was the same going to benefit the company in future. company in future. 5. On the facts and circumstances of the case and in law, the CI 5. On the facts and circumstances of the case and in law, the CI 5. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs. 16,85,000/ has erred in deleting the disallowance of Rs. 16,85,000/- made u/s 40(2)(a) of the Income Tax Act, 1961 towards professional fees paid to 40(2)(a) of the Income Tax Act, 1961 towards professional fees paid to 40(2)(a) of the Income Tax Act, 1961 towards professional fees paid to Shri. Vishwa Mitter Katyal without considering the fact that the Shri. Vishwa Mitter Katyal without considering the fact that the Shri. Vishwa Mitter Katyal without considering the fact that the assessee company has failed to brought out the c assessee company has failed to brought out the contribution of Shri. ontribution of Shri. Vishwa Mitter Katyal, father Vishwa Mitter Katyal, father-in-law of Shri. Subir Malhotra (Director of law of Shri. Subir Malhotra (Director of Capacit' E Infraprojects Ltd.) to the assessee company being a related Capacit' E Infraprojects Ltd.) to the assessee company being a related Capacit' E Infraprojects Ltd.) to the assessee company being a related party.

M/s Capacit’e Infraprojects Ltd. 3 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

M/s Capacit’e Infraprojects Ltd. 4 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

4,62,71,849/-. The party The party-wise disallowance of purchases made is of purchases made is discussed as under: as under:

M/s Relaiable Timber and Plywood (Prop. Haniff Ibrahim M/s Relaiable Timber and Plywood (Prop. Haniff Ibrahim M/s Relaiable Timber and Plywood (Prop. Haniff Ibrahim Nakhwal) Rs. 4,06,59,901/ 4,06,59,901/-

AY Net Tax Gross Gross 2013-14 - - - 2014-2015 81,26,936 10,15,867 91,42,803 91,42,803 2015-2016 3,85,82,022 48,22,753 4,34,04,775 4,34,04,775 2016-2017 4,03,98,772 49,78,281 4,53,77,053 4,53,77,053

M/s Capacit’e Infraprojects Ltd. 5 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

2017-2018 3,59,91,611 46,68,290 4,06,59,901 4,06,59,901 2018-2019 5,27,34,496 93,68,226 6,21,02,722 6,21,02,722 2019-2020 4,00,73,069 72,13,152 4,72,86,221 4,72,86,221 2020-2021 3,34,51,082 60,21,195 3,94,72,277 3,94,72,277 Total 24,93,57,988 3,80,87,764 28,74,45,752 28,74,45,752 Ld. CIT(A) noted that following documents were filed 6.1 The Ld. CIT(A) noted that following documents Ld. CIT(A) noted that following documents during appellate as well as assessment proceedings: as well as assessment proceedings:

a. KYC documents a. KYC documents of M/s Reliable Timber & Plywood (Prop. Hanif of M/s Reliable Timber & Plywood (Prop. Hanif Ibrahim Nakhwa) Ibrahim Nakhwa) b. Ledger account in the appellate books of account. Ledger account in the appellate books of account. c. Few Copies of Invoices. Few Copies of Invoices. d. Details of goods purchased Details of goods purchased - Plywood, Wood, Shuttering material etc. Plywood, Wood, Shuttering material etc. e. GRN i.., Good Received Note Details. GRN i.., Good Received Note Details. f. Bank details of the payments. It is observed from para 12.9 of the Bank details of the payments. It is observed from para 12.9 of the Bank details of the payments. It is observed from para 12.9 of the assessment Order that there is no dispute between the AO and the assessment Order that there is no dispute between the AO and the assessment Order that there is no dispute between the AO and the appellant that the payments were made through banking channel. appellant that the payments were made through banking channel. appellant that the payments were made through banking channel. 6.2 The Ld. CIT(A) has recorded that a survey was also Ld. CIT(A) has recorded that a survey was also carried out Ld. CIT(A) has recorded that a survey was also at the premises of M at the premises of M/s Reliable Timber and plywood under section wood under section 133A of the Act along with ct along with search at premises of the assessee and of the assessee and proceeding under section 153C of the A ding under section 153C of the Act also was was undertaken in the case of above party. the case of above party.

6.3 The learned CIT(A) The learned CIT(A) concluded that Assessing Officer had not concluded that Assessing Officer had not examined the submission of the assessee including quantity the submission of the assessee including quantity -wise the submission of the assessee including quantity details, goods receipt etc and statement of the vendor and said details, goods receipt etc and statement of the vendor and said details, goods receipt etc and statement of the vendor and said party had filed details during 153C proceedings details during 153C proceedings in their case. According to the Ld. CI According to the Ld. CIT(A) unless any lacuna or or deficiencies is

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found in documentary evidence found in documentary evidence filed , no disallowance was called , no disallowance was called for.

6.4 We have heard rival submission of the parties and peruse We have heard rival submission of the parties and peruse We have heard rival submission of the parties and perused the relevant material on record. We find that Ld. CIT(A) has mentioned relevant material on record. We find that Ld. CIT(A) has mentioned relevant material on record. We find that Ld. CIT(A) has mentioned that the details in respect of the party were filed before the that the details in respect of the party were filed before the that the details in respect of the party were filed before the Assessing Officer but Assessing Officer has recorded non- Assessing Officer but Assessing Officer has recorded non Assessing Officer but Assessing Officer has recorded non compliance on the part of the assessee. compliance on the part of the assessee. Therefore, the finding o Therefore, the finding of ld CIT(A) that documents listed in CIT(A) that documents listed in para 4.1 above were filed in para 4.1 above were filed in assessment proceedings, is not correct. assessment proceedings, is not correct. Similarly the Ld. CIT(A) has Similarly the Ld. CIT(A) has noted that in the statement under section 133A he statement under section 133A, the , the proprietor of the concern had admitted of supplying the goods to the assessee, the concern had admitted of supplying the goods to the the concern had admitted of supplying the goods to the but no such statement has either been referred or provided to the but no such statement has either been referred or provided to the but no such statement has either been referred or provided to the Assessing Officer. Similarly the Ld. CIT(A) has noted that notice Assessing Officer. Similarly the Ld. CIT(A) has noted that notice Assessing Officer. Similarly the Ld. CIT(A) has noted that notice under section 133(6) of the under section 133(6) of the Act was complied by the said party, was complied by the said party, however the Assessing Officer however the Assessing Officer has noted that said notice was not complied by the said party. Further the Ld. CIT(A) has noted that complied by the said party. Further the Ld. CIT(A) has noted that complied by the said party. Further the Ld. CIT(A) has noted that said party has already provided all details in proce said party has already provided all details in procee eding u/s 153C but the Ld. CIT(A) did not provide any opportunity but the Ld. CIT(A) did not provide any opportunity to the Assessing to the Assessing Officer for for verifying verifying evidence evidence in in support suppo rt thereof. thereof. In In the the circumstances, we are of the opinion that Ld. CIT(A) has decided circumstances, we are of the opinion that Ld. CIT(A) has decided circumstances, we are of the opinion that Ld. CIT(A) has decided the proceeding in violation of the principle of the natural justice the proceeding in violation of the principle of the natural justice the proceeding in violation of the principle of the natural justice without confronting the evidences to the Assessing Officer which without confronting the evidences to the Assessing Officer which without confronting the evidences to the Assessing Officer which are in the nature of the are in the nature of the additional evidences. In the facts and . In the facts and circumstances of the case, we feel it appropriate to restore this circumstances of the case, we feel it appropriate to restore this circumstances of the case, we feel it appropriate to restore this

M/s Capacit’e Infraprojects Ltd. 7 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

issue back to the file of the Assessing Officer for deciding afresh in issue back to the file of the Assessing Officer for deciding afresh in issue back to the file of the Assessing Officer for deciding afresh in the light of the documentary evidences, which had been filed by the the light of the documentary evidences, which had been filed by the the light of the documentary evidences, which had been filed by the assessee before the Ld. CI assessee before the Ld. CIT(A).

M/s M B enterprise (prop. Meena M/s M B enterprise (prop. Meena Bharat Patil) Rs. 13,97,525/ Bharat Patil) Rs. 13,97,525/-

AY Net Tax Gross Gross 2013-2014 1,20,788 6,040 1,20,788 1,20,788 2014-2015 24,04,534 1,20,231 25,24,765 25,24,765 2015-2016 16,78,233 83,912 17,62,145 17,62,145 2016-2017 22,83,106 1,14,155 23,97,261 23,97,261 2017-2018 13,23,806 73,719 13,97,525 13,97,525 2018-2019 - - - 2019-2020 - - - 2020-2021 - - - Total 76,89,679 3,92,017 80,81,696 80,81,696 7.1 The Ld. CIT(A) noted that following documents in respect of Ld. CIT(A) noted that following documents in respect of Ld. CIT(A) noted that following documents in respect of the party were filed during the the party were filed during the appellate as well as assessment as well as assessment proceedings:

“i. KYC documents of M/s M. B. Enterprises (Prop. Meena Bharat Patil) KYC documents of M/s M. B. Enterprises (Prop. Meena Bharat Patil) KYC documents of M/s M. B. Enterprises (Prop. Meena Bharat Patil) ii. Ledger account in appellant's books of account Ledger account in appellant's books of account iii. Few Copies of Invoices. According to the appellant, the invoices give Few Copies of Invoices. According to the appellant, the invoices give Few Copies of Invoices. According to the appellant, the invoices give the details of Vehicles the details of Vehicles as well through which the goods were delivered. as well through which the goods were delivered. iv. Details of goods purchased Details of goods purchased - Crushed Sand and Metal Aggregates Crushed Sand and Metal Aggregates

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v. Details of GRNs i.e., Goods received note Details of GRNs i.e., Goods received note vi. Copy of ITR filed by the Vendor. Copy of ITR filed by the Vendor. vii. Bank details of the payments. It is observed from the Bank details of the payments. It is observed from the assessment Bank details of the payments. It is observed from the Order that there is no dispute between the AO and the appellant that Order that there is no dispute between the AO and the appellant that Order that there is no dispute between the AO and the appellant that the payments were made through banking channel. the payments were made through banking channel.” 7.2 It was claimed It was claimed before the ld CIT(A) that new address of party that new address of party was provided the Assessing Officer and the said party complie provided the Assessing Officer and the said party complie provided the Assessing Officer and the said party complied to notices issued under section 133(6) of the notices issued under section 133(6) of the Act and the Assessing and the Assessing Officer did not take cognizance of the evidence received from the Officer did not take cognizance of the evidence received from the Officer did not take cognizance of the evidence received from the party and all the details of the transactions were filed by the said party and all the details of the transactions were filed by the said party and all the details of the transactions were filed by the said party in their proceeding under section 153C of the Act. The Ld. party in their proceeding under section 153C of the party in their proceeding under section 153C of the CIT(A) accordingly considering the sub CIT(A) accordingly considering the submission of the assessee, mission of the assessee, deleted the disallowance with finding identical to what has been deleted the disallowance with finding identical to what has been deleted the disallowance with finding identical to what has been given in the case of party namely M/s Reliable Timer and plywood. given in the case of party namely M/s Reliable Timer and plywood. given in the case of party namely M/s Reliable Timer and plywood.

7.3 We have heard rival submission of the parties rd rival submission of the parties and peruse and perused the relevant material record. In resp relevant material record. In respect of above party, also the learned also the learned DR brought to our notice that Assessing Officer notice that Assessing Officer recorded of having recorded of having no documentary evidence no documentary evidence filed in support of supply of the goods in support of supply of the goods, whereas Ld. CIT(A) has noted that all those documents are filed whereas Ld. CIT(A) has noted that all those documents are filed whereas Ld. CIT(A) has noted that all those documents are filed before the Assessing Of before the Assessing Officer. Similarly the Ld. CIT(A) has noted that d. CIT(A) has noted that notice issued under section 133(6) was complied by the said party issued under section 133(6) was complied by the said party issued under section 133(6) was complied by the said party however the Assessing Officer however the Assessing Officer recorded that same was not complied. recorded that same was not complied. Similarly the Ld. CIT(A) taken into consideration submission filed Similarly the Ld. CIT(A) taken into consideration submission filed Similarly the Ld. CIT(A) taken into consideration submission filed by the said party in their procee id party in their proceeding under section 153C of the A ding under section 153C of the Act, but no such details but no such details were provided to the Assessing Officer. In the provided to the Assessing Officer. In the

M/s Capacit’e Infraprojects Ltd. 9 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

facts and circumstances of the case, following facts and circumstances of the case, following our our finding in the case of purchase from M/s Reliable Timber and plywood, the matter case of purchase from M/s Reliable Timber and plywood, the matt case of purchase from M/s Reliable Timber and plywood, the matt is restored back to the file of the Assessing Officer for deciding is restored back to the file of the Assessing Officer for deciding is restored back to the file of the Assessing Officer for deciding afresh.

Regarding the purchases from parties namely Shree vaishnav Shree vaishnav 8. Regarding the purchases from parties namely Alloys P ltd ;Sahil Enter Alloys P ltd ;Sahil Enterprises (prop: Neeta Dyaneshwar Patil) prop: Neeta Dyaneshwar Patil) and Mauli Traders (Prop. Suvarnmal Sunder mhaske), the and Mauli Traders (Prop. Suvarnmal Sunder mhaske), and Mauli Traders (Prop. Suvarnmal Sunder mhaske), Assessing Officer observed that those parties were not regular Assessing Officer observed that those parties were not regular Assessing Officer observed that those parties were not regular return filer or had filed returns with low income as compared to return filer or had filed returns with low income as compared to return filer or had filed returns with low income as compared to their sales turnover and during post search proceeding in inquiries their sales turnover and during post search proceeding in inquiries their sales turnover and during post search proceeding in inquiries by the inspector of the income tax department or of the income tax department, those pa , those parties were not found in existence at their addresses and neighborhood not found in existence at their addresses and not found in existence at their addresses and inquiries did not reveal any whereabouts of those parties. During inquiries did not reveal any whereabouts of those parties. During inquiries did not reveal any whereabouts of those parties. During assessment proceeding noti assessment proceeding notice under section 133(6) of the A ce under section 133(6) of the Act remained non-complied. The assessee also failed to produce complied. The assessee also failed to produce complied. The assessee also failed to produce those parties before the Assessing Officer for verification and also failed to parties before the Assessing Officer for verification and also failed to parties before the Assessing Officer for verification and also failed to submit documentary evidence including stock register, delivery submit documentary evidence including stock register, delivery submit documentary evidence including stock register, delivery challan etc. to prove that actual purchases had been made from to prove that actual purchases had been made from to prove that actual purchases had been made from those parties. The Assessing Officer was of the vie The Assessing Officer was of the vie The Assessing Officer was of the view that merely making payment through banking channel was not sufficient to making payment through banking channel was not sufficient to making payment through banking channel was not sufficient to establish genuineness genuineness of the purchases. In the circumstances, the In the circumstances, the Assessing Officer held the purchases from those parties as non held the purchases from those parties as non held the purchases from those parties as non- genuine and accordingly disallowed. genuine and accordingly disallowed.

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8.1 The finding of the Ld. CIT(A) in resp of the Ld. CIT(A) in respect of these parties is ect of these parties is summarized as under: ed as under:

Shree Vaishnav Alloys P Ltd ( Shree Vaishnav Alloys P Ltd (Rs. 29,27,494/-)

8.2 It was submitted by the assessee was submitted by the assessee that it had never made any never made any purchases from Shree purchases from Shree Vaishnav Alloys P Ltd including Alloys P Ltd including in the year under consideration. In support consideration. In support thereof, the assessee filed copy of assessee filed copy of purchase ledger account of the assessee ledger account of the assessee. It was submitted that . It was submitted that actually purchases were were made from another group company namely made from another group company namely M/s Shree Vaishnav Wire and Rod P Ltd ee Vaishnav Wire and Rod P Ltd. The assessee filed details . The assessee filed details of purchases from M/s Shree Vaishnav Wire and Rod P Ltd as purchases from M/s Shree Vaishnav Wire and Rod P Ltd as purchases from M/s Shree Vaishnav Wire and Rod P Ltd as under:

AY Net Tax Gross Gross 2014-2015 1,54,99,854 7,74,993 1,62,74,847 1,62,74,847 2015-2016 6,87,32,146 34,36,586 7,21,68,732 7,21,68,732 2016-2017 8,21,17,513 41,08,293 8,62,25,806 8,62,25,806 2017-2018 28,35,709 1,41,785 29,77,494 29,77,494 2018-2019 869 43 912 2019-2020 - - - 2020-2021 - - - Total 16,91,86,090 84,61,701 17,76,47,791 17,76,47,791 8.3 Further, the Ld. CIT(A) recorded the Ld. CIT(A) recorded that the assessee filed the assessee filed following documents in respect of Shree Vaishnav Wire and Rod P following documents in respect of Shree Vaishnav Wire and Rod P following documents in respect of Shree Vaishnav Wire and Rod P Ltd in appellate/assessment Ltd in appellate/assessment proceedings:

“a. KYC documents of M/s Shree Vaishnav Wire and Rod Pvt. Ltd. KYC documents of M/s Shree Vaishnav Wire and Rod Pvt. Ltd. KYC documents of M/s Shree Vaishnav Wire and Rod Pvt. Ltd. b. Ledger account in appellant's books of account for Shree Vaishnav Ledger account in appellant's books of account for Shree Vaishnav Ledger account in appellant's books of account for Shree Vaishnav Alloys Pvt Ltd showing NIL purchases and Shree Vaishnav Wire and Alloys Pvt Ltd showing NIL purchases and Shree Vaishnav Wire and Alloys Pvt Ltd showing NIL purchases and Shree Vaishnav Wire and Rod Pvt Ltd showing the purchases. Rod Pvt Ltd showing the purchases.

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c. Sample Copies of Invoices Copies of Invoices d. Details of goods purchased Details of goods purchased - Iron and Steel used in construction Iron and Steel used in construction e. GRN i.e., Goods Received note details. GRN i.e., Goods Received note details. f. Relevant Bank account details which have even been accepted by the Relevant Bank account details which have even been accepted by the Relevant Bank account details which have even been accepted by the AO in Para 11.8 of the Assessment Order. AO in Para 11.8 of the Assessment Order. g. Statement of Statement of Mr. Vipin Agarwal, Director of Shree Vaishnav Wire and Mr. Vipin Agarwal, Director of Shree Vaishnav Wire and Rod Pvt Ltd.” 8.4 The Ld. CIT(A) concluded that the Assessing Officer has not Ld. CIT(A) concluded that the Assessing Officer has not Ld. CIT(A) concluded that the Assessing Officer has not considered the documentary evidence filed by the assessee. He considered the documentary evidence filed by the assessee. He considered the documentary evidence filed by the assessee. He observed that Assessing Officer ignored the details of goods observed that Assessing Officer ignored the details of goods observed that Assessing Officer ignored the details of goods receipts, invoices, confirmation from shree Va receipts, invoices, confirmation from shree Vaishnav wire and Rod P ishnav wire and Rod P ltd etc. He further observed that both M/s vaishnav alloys P ltd and e further observed that both M/s vaishnav alloys P ltd and e further observed that both M/s vaishnav alloys P ltd and Vaishnav wire and Rod P ltd had closed their businesses and were Vaishnav wire and Rod P ltd had closed their businesses and were Vaishnav wire and Rod P ltd had closed their businesses and were under NCLT proceedings and therefore could not comply with the under NCLT proceedings and therefore could not comply under NCLT proceedings and therefore could not comply notices issued by the Income notices issued by the Income-tax department, however during the however during the course of the survey action sh Vipin Agrawal had confirmed details course of the survey action sh Vipin Agrawal had confirmed details course of the survey action sh Vipin Agrawal had confirmed details of transactions with the assessee. Accordingly transactions with the assessee. Accordingly, the Ld. CIT(A) deleted the disallowance of purchases in respect of M/s vaishnav deleted the disallowance of purchases in respect of M deleted the disallowance of purchases in respect of M alloys P ltd.

8.5 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute in respect of M/s dispute in respect of M/s Vaishnav alloys P ltd. We find that the alloys P ltd. We find that the fact of no purchases made from M/s fact of no purchases made from M/s Vaishnav alloys P ltd has been alloys P ltd has been brought for the first time brought for the first time before the Ld. CIT(A), but the Ld. CIT(A) Ld. CIT(A), but the Ld. CIT(A) has recorded that all the documents in respect of M/s Vaishnav has recorded that all the documents in respect of M/s Vaishnav has recorded that all the documents in respect of M/s Vaishnav wire and Rod P ltd were filed before the Assessing Officer. The ld DR wire and Rod P ltd were filed before the Assessing Officer. The ld DR wire and Rod P ltd were filed before the Assessing Officer. The ld DR also strongly objected such observation recorded by the Ld. CIT(A) also strongly objected such observation recorded by the Ld. CIT(A) also strongly objected such observation recorded by the Ld. CIT(A)

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and he submitted that no such details are available on the record of ed that no such details are available on the record of ed that no such details are available on the record of the Assessing Officer, and therefore Ld. CIT(A) has concluded the Assessing Officer, and therefore Ld. CIT(A) the Assessing Officer, and therefore Ld. CIT(A) without providing any opportunity to without providing any opportunity to being heard to the Assessing being heard to the Assessing Officer on those documents. We also find that Ld. CIT(A) has mainly on those documents. We also find that Ld. CIT(A) has mainly on those documents. We also find that Ld. CIT(A) has mainly decided on the basis of observation that assessee ed on the basis of observation that assessee ed on the basis of observation that assessee filed derails of delivery challan or other evidence in support of supply of goods to delivery challan or other evidence in support of supply of goods to delivery challan or other evidence in support of supply of goods to the assessee, which in our opinion is not correct, because no such the assessee, which in our opinion is not correct, because no such the assessee, which in our opinion is not correct, because no such documents were filed before the Assessing Officer. In such facts and documents were filed before the Assessing Officer. In such documents were filed before the Assessing Officer. In such circumstances, we feel it appropriate to restore this issue of circumstances, we feel it appropriate to restore this issue of circumstances, we feel it appropriate to restore this issue of verification of purchases from verification of purchases from above party back to the file of the party back to the file of the Assessing Officer.

M/s Sahil Entyerprises and Mauli Traders M/s Sahil Entyerprises and Mauli Traders

9.1 We have heard rival submission of the parties rd rival submission of the parties and peruse and perused the relevant material on record relevant material on record. Since the disallowance in respect of the . Since the disallowance in respect of the purchases from MB Enterpises purchases from MB Enterpises has been restored back to the file of has been restored back to the file of the Assessing Officer for deciding afresh, the disallowance in the Assessing Officer for deciding afresh, the disallowance in the Assessing Officer for deciding afresh, the disallowance in respect of these two parties respect of these two parties, is also restored back to the file of the is also restored back to the file of the AO for deciding afresh. Accordingly deciding afresh. Accordingly, the ground No. 1 of the appeal und No. 1 of the appeal of the Revenue is allowed for statistical purposes. s allowed for statistical purposes.

M/s Capacit’e Infraprojects Ltd. 13 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

10.1 Brief facts qua the issue in dispute Brief facts qua the issue in dispute are that are that the Assessing Officer disallowed expenses debited by the assessee in its profit and Officer disallowed expenses debited by the assessee in its profit and Officer disallowed expenses debited by the assessee in its profit and loss account in respect of parties, namely M/s Pushpak detectives loss account in respect of parties, namely M/s Pushpak det loss account in respect of parties, namely M/s Pushpak det and guard services (Rs. and guard services (Rs.3,53,27,802/-); Vision Realcon private ); Vision Realcon private limited (Rs. 48,44,600/ limited (Rs. 48,44,600/-) ; Angelina Infratech Private Li ina Infratech Private Limited (Rs. 4,91,68,800/-); Bhola Shah m( ); Bhola Shah m(Rs. 63,52,600/-) and Sunil Kumar ) and Sunil Kumar Gorelal Pandit (Rs. 57,92,300/ Gorelal Pandit (Rs. 57,92,300/-). Disallowance in respect of each allowance in respect of each party is adjudicated as under: party is adjudicated as under:

M/s Pushpak detectives and guard services (Rs. 3,53,27,802/-) M/s Pushpak detectives and guard services (Rs. 3,53,27,802/ M/s Pushpak detectives and guard services (Rs. 3,53,27,802/

M/s Capacit’e Infraprojects Ltd. 14 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

the assessee. Though the assessee. Though, he submitted that his chartered accountant chartered accountant informed him about deduction of tax informed him about deduction of tax at source on his PAN, but in at source on his PAN, but in view of no income liable for tax, he did not file any return of income view of no income liable for tax, he did not file any return of income view of no income liable for tax, he did not file any return of income for claiming said deduction for claiming said deduction of tax at source. During the course of source. During the course of the search proceedings proceedings, sh Rohit Katyal, the director of the assessee , sh Rohit Katyal, the director of the assessee company was shown company was shown the statement of Sh Rajendra Shreeram Gaud Rajendra Shreeram Gaud dated 20/08/2019 and asked to comment however, he submitted dated 20/08/2019 and asked to comment however dated 20/08/2019 and asked to comment however that said entity was providing security guard services to the that said entity was providing security guard services to the that said entity was providing security guard services to the assessee and relevant detail in books of account of the assessee assessee and relevant detail in books of account of the assessee assessee and relevant detail in books of account of the assessee would be provided, but no such details were provided. During would be provided, but no such details were provided. would be provided, but no such details were provided. assessment proceedings, t assessment proceedings, the Assessing Officer issued n issued notice under section 133(6) of the section 133(6) of the Act but no response was received from said but no response was received from said party. During assessment proceeding, the assessee contended that party. During assessment proceeding, the assessee contended that party. During assessment proceeding, the assessee contended that regarding services provided by M/s Pushpak detective and guard regarding services provided by M/s Pushpak detective and guard regarding services provided by M/s Pushpak detective and guard services, the assessee was coordinating with one the assessee was coordinating with one the assessee was coordinating with one ‘Sh Sunny Subhash Shinde’, who had been using licenses/permissions of Mr , who had been using licenses/permissions of Mr , who had been using licenses/permissions of Mr Rajendra Gaud, for for providing security services. The assessee providing security services. The assessee submitted that said license had been used by Mr Shinde after submitted that said license had been used by Mr Shinde after submitted that said license had been used by Mr Shinde after obtaining due permission and NOC from Mr Rajendra Gaud vide obtaining due permission and NOC from Mr Rajendra Gaud vide obtaining due permission and NOC from Mr Rajendra Gaud vide power of attorney executed at Mumbai on 20/04/2015. It was er of attorney executed at Mumbai on 20/04/2015. It was er of attorney executed at Mumbai on 20/04/2015. It was contended that services were provided by the agency and bills were contended that services were provided by the agency and bills contended that services were provided by the agency and bills raised on the assessee by raised on the assessee by M/s Pushapak detective and guard Pushapak detective and guard services, a copy of which for reference was filed before the Assessing services, a copy of which for reference was filed before the Assessing services, a copy of which for reference was filed before the Assessing Officer. It was further submitted that a copy of the letter filed by Mr It was further submitted that a copy of the letter filed by Mr It was further submitted that a copy of the letter filed by Mr Shinde along with copy of his affidavit given to the assessee Shinde along with copy of his affidavit given to the assessee Shinde along with copy of his affidavit given to the assessee

M/s Capacit’e Infraprojects Ltd. 15 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

company was submitted before the Assessing Officer. The assessee company was submitted before the Assessing Officer. company was submitted before the Assessing Officer. filed a copy of ledger account of said firm in its books of copy of ledger account of said firm in its books of accounts, copy of ledger account of said firm in its books of sample copies of invoices raised by said party, sample copy of work sample copies of invoices raised by said party, sample copy of work sample copies of invoices raised by said party, sample copy of work order raised on said party along with letter of order raised on said party along with letter of Sh Shinde Shinde addressed to the investigation wing and affidavit given by him to the assessee. to the investigation wing and affidavit given by him to the to the investigation wing and affidavit given by him to the It was contended that assessee contended that assessee established receipt the services, for the services, for which the assessee had the relevant invoice, which the assessee had the relevant invoice, evidence of evidence of payment made after due deduction of TDS made after due deduction of TDS, and therefore no disallowance is , and therefore no disallowance is called for in the case of the assessee. For non called for in the case of the assessee. For non-filing of the income filing of the income tax return and payment of tax return and payment of tax by the vendor, it was submitted that it was submitted that it is not the responsibility of the assessee company and appropriate is not the responsibility of the assessee company and appropriate is not the responsibility of the assessee company and appropriate action might be taken against the defaulting vendor and not against be taken against the defaulting vendor and not against be taken against the defaulting vendor and not against the assessee. The learned Assessing Officer the assessee. The learned Assessing Officer rejected rejected the contention of the assessee observing that though assessee had regularly of the assessee observing that though assessee had regularly of the assessee observing that though assessee had regularly debited substantial amount on account of so debited substantial amount on account of so- -called services rendered by M/s Pushpak detective and guard services but failed to rendered by M/s Pushpak detective and guard services but failed to rendered by M/s Pushpak detective and guard services but failed to submit documentary evidences to prove tha submit documentary evidences to prove that services t services had been rendered by M/s Pushpak detective and guard services to the M/s Pushpak detective and guard services to the M/s Pushpak detective and guard services to the assessee. The Assessing Officer rejected the explanation that assessee. The Assessing Officer rejected the explanation that assessee. The Assessing Officer rejected the explanation that services were rendered by a third party for the reason that bill has services were rendered by a third party for the reason that bill has services were rendered by a third party for the reason that bill has not been raised by third not been raised by third-party or account has not been m party or account has not been maintained in the name of the third party in the name of the third party, therefore the assessee failed to therefore the assessee failed to substantiate its claim. The Assessing Officer held that said substantiate its claim. The Assessing Officer held that said substantiate its claim. The Assessing Officer held that said explanation was nothing but an afterthought to cover the bogus explanation was nothing but an afterthought to cover the bogus explanation was nothing but an afterthought to cover the bogus expenses claimed in its books of accounts. Before the learned CIT(A) expenses claimed in its books of accounts. Before the lea expenses claimed in its books of accounts. Before the lea

M/s Capacit’e Infraprojects Ltd. 16 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

the assessee submitted that the assessee submitted that statement of Sri Rajendra Gaud of statement of Sri Rajendra Gaud of having not provided in services to the assessee cannot be relied having not provided in services to the assessee cannot be relied having not provided in services to the assessee cannot be relied upon for the reason that same was recorded under survey upon for the reason that same was recorded under survey upon for the reason that same was recorded under survey operations. The assessee submitted that services were duly operations. The assessee submitted that services were duly operations. The assessee submitted that services were duly rendered by Sh Sunnu Shinde through M/s Pushpak detective and ndered by Sh Sunnu Shinde through M/s Pushpak detective and ndered by Sh Sunnu Shinde through M/s Pushpak detective and guard services by using license of Sh Ra guard services by using license of Sh Rajendra Gaud and jendra Gaud and permission by way of a power of attorney. It was further submitted permission by way of a power of attorney. It was further submitted permission by way of a power of attorney. It was further submitted that copies of details viz., sample copy of ledger account, invoices that copies of details viz., sample copy of ledger account, invoices that copies of details viz., sample copy of ledger account, invoices and work order, letter written by Mr Shinde to investigation unit, work order, letter written by Mr Shinde to investigation unit, work order, letter written by Mr Shinde to investigation unit, affidavit of Mr Shinde and copies of bank statement was submitted affidavit of Mr Shinde and copies of bank statement was submitted affidavit of Mr Shinde and copies of bank statement was submitted during the assessment proceeding. It was contended that payments during the assessment proceeding. It was contended that payments during the assessment proceeding. It was contended that payments were made by proper banking channels. The Ld. CIT(A), accepted were made by proper banking channels. The Ld. CIT(A), accepted were made by proper banking channels. The Ld. CIT(A), accepted the contention of the assessee and deleted the disallowance the contention of the assessee and deleted the disallowance the contention of the assessee and deleted the disallowance observing as under:

“10.7.5 According to the appellant, they have discharged the liability to 10.7.5 According to the appellant, they have discharged the liability to 10.7.5 According to the appellant, they have discharged the liability to establish the genuineness of the transaction and the identity of the service establish the genuineness of the transaction and the identity of the service establish the genuineness of the transaction and the identity of the service provider. Further they h provider. Further they have deducted the required TDS as per the ave deducted the required TDS as per the provisions of the law. In my humble opinion, the moot question that arises provisions of the law. In my humble opinion, the moot question that arises provisions of the law. In my humble opinion, the moot question that arises is if M/s Pushpak Detéctive and Guard Services has not provided security is if M/s Pushpak Detéctive and Guard Services has not provided security is if M/s Pushpak Detéctive and Guard Services has not provided security services to the appellant Co., which entity had provided security services at services to the appellant Co., which entity had provided security s services to the appellant Co., which entity had provided security s various sites of the appellant at the relevant period. It cannot be denied that various sites of the appellant at the relevant period. It cannot be denied that various sites of the appellant at the relevant period. It cannot be denied that at various locations, security services are required. During the search, post at various locations, security services are required. During the search, post at various locations, security services are required. During the search, post search and assessment proceedings, no finding of another security agency search and assessment proceedings, no finding of another security agency search and assessment proceedings, no finding of another security agency being engaged by the appellant, came to light notwithstanding the fact that by the appellant, came to light notwithstanding the fact that by the appellant, came to light notwithstanding the fact that the security agency at any premises is the most visible of all service the security agency at any premises is the most visible of all service the security agency at any premises is the most visible of all service providers. In the absence of any contrary findings by the Investigation Wing providers. In the absence of any contrary findings by the Investigation Wing providers. In the absence of any contrary findings by the Investigation Wing or the AO, it can be safely concluded that M/s or the AO, it can be safely concluded that M/s Pushpak Detective and Pushpak Detective and Guard Services had indeed provided the services. Once the services are Guard Services had indeed provided the services. Once the services are Guard Services had indeed provided the services. Once the services are provided, payments were made through banking channel after TDS. provided, payments were made through banking channel after TDS. provided, payments were made through banking channel after TDS. Moreover, who was handling the affairs of the security services whether Mr Moreover, who was handling the affairs of the security services whether Mr Moreover, who was handling the affairs of the security services whether Mr Sunny Shinde or Mr. Raj Sunny Shinde or Mr. Rajendra Shreeram Gaud is not so material as far as endra Shreeram Gaud is not so material as far as the provision of services or payments thereon are concerned. Therefore, in the provision of services or payments thereon are concerned. Therefore, in the provision of services or payments thereon are concerned. Therefore, in my considered view, the claim of expenses cannot be denied to the my considered view, the claim of expenses cannot be denied to the my considered view, the claim of expenses cannot be denied to the appellant. Considering the totality of the facts and circumstances of the appellant. Considering the totality of the facts and circumstances appellant. Considering the totality of the facts and circumstances issue involved disallowances of payment of Rs. 2,63,87,000/- to M/s issue involved disallowances of payment of Rs. 2,63,87,000/ issue involved disallowances of payment of Rs. 2,63,87,000/

M/s Capacit’e Infraprojects Ltd. 17 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

Pushpak Detective and Guard Services (Prop. Rajendra Shreeram Gaud) is Pushpak Detective and Guard Services (Prop. Rajendra Shreeram Gaud) is Pushpak Detective and Guard Services (Prop. Rajendra Shreeram Gaud) is not justified.” 11.1 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the re dispute and perused the relevant material on record. The issue in levant material on record. The issue in dispute is whether the expenditure claimed against bills raised in dispute is whether the expenditure claimed against bills raised in dispute is whether the expenditure claimed against bills raised in the name of M/s Pushpak detective and guard services has been the name of M/s Pushpak detective and guard services has been the name of M/s Pushpak detective and guard services has been incurred wholly and exclusively for the purpose of the business of incurred wholly and exclusively for the purpose of the business of incurred wholly and exclusively for the purpose of the business of the assessee and ser the assessee and services of security and guard were at all received vices of security and guard were at all received from M/s Pushpak detective and guard services. The assessee from M/s Pushpak detective and guard services. The assessee from M/s Pushpak detective and guard services. The assessee contended said services rendered by Mr Shinde on behalf of M/s contended said services rendered by Mr Shinde on behalf of M/s contended said services rendered by Mr Shinde on behalf of M/s Pushpak detective and guard services, b k detective and guard services, but, we find that no evidence we find that no evidence in support of services rendered by Mr Shinde are available on rvices rendered by Mr Shinde are available on rvices rendered by Mr Shinde are available on record. The assessee claim record. The assessee claimed that bill was raised by that bill was raised by Mr Shinde in the name of M/s Pushpak detective and guard services and the name of M/s Pushpak detective and guard services and the name of M/s Pushpak detective and guard services and payment for such services had payment for such services had been made through banking been made through banking channel, however, proprietor of , proprietor of M/s Pushpak detective and guard M/s Pushpak detective and guard service denied of having received any payment from the assessee. service denied of having received any payment from the assessee. service denied of having received any payment from the assessee. The onus is on the assessee to substantiate that services had been The onus is on the assessee to substantiate that services had been The onus is on the assessee to substantiate that services had been received from third party on behalf of received from third party on behalf of M/s Push M/s Pushpak. As the evidences filed by the assessee the assessee do not confirm to the test of actual do not confirm to the test of actual services rendered to the assessee, we feel it appropriate to restore services rendered to the assessee, we feel it appropriate to restore services rendered to the assessee, we feel it appropriate to restore the issue in dispute to the AO for in dispute to the AO for examination examination of evidences substantiating services substantiating services of security corresponding to the expenditure security corresponding to the expenditure claimed by the assess claimed by the assessee to M/s Pushapak detective and guard detective and guard services. The assessee assessee shall produce evidence in support of services shall produce evidence in support of services

M/s Capacit’e Infraprojects Ltd. 18 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

rendered by Sh Sinde including ESI/PF details of security guards , rendered by Sh Sinde including ESI/PF details of security guards , rendered by Sh Sinde including ESI/PF details of security guards , salary payment made and the bank state salary payment made and the bank statement of sh Sinde as well as ment of sh Sinde as well as Sh Rajendra gaud for verification of the fact that payment was made d for verification of the fact that payment was made d for verification of the fact that payment was made by the assessee for such security services. If required, the Assessing by the assessee for such security services. If required, the Assessing by the assessee for such security services. If required, the Assessing Officer may carry out enq Officer may carry out enquiries deemed fit in the facts and deemed fit in the facts and circumstances of the case for verification of the claim the assessee. circumstances of the case for verification of the claim the assessee. circumstances of the case for verification of the claim the assessee.

M/s Vision Realcone P ltd; Angelina Infratech P ltd; Bhola shah M/s Vision Realcone P ltd; Angelina Infratech P ltd; Bhola shah M/s Vision Realcone P ltd; Angelina Infratech P ltd; Bhola shah and Sunil Kumar Gorelal Pandit and Sunil Kumar Gorelal Pandit

M/s Capacit’e Infraprojects Ltd. 19 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

payments (iii) relevant extract of bank statement of assessee (iv) payments (iii) relevant extract of bank statement of assessee (iv) payments (iii) relevant extract of bank statement of assessee (iv) address of the subcontractor (v) copy of letter of intent, work address of the subcontractor (v) copy of letter of intent, work address of the subcontractor (v) copy of letter of intent, work orders, tax invoice raised (vi) copy of income tax returns filed by tax invoice raised (vi) copy of income tax returns filed by tax invoice raised (vi) copy of income tax returns filed by subcontractors (vii) KYC documents of the vendor/subcontractors. subcontractors (vii) KYC documents of the vendor/subcontractors. subcontractors (vii) KYC documents of the vendor/subcontractors. The Ld. CIT(A) has further recorded The Ld. CIT(A) has further recorded the AO ignored the AO ignored submission of the assessee that subcontractor the assessee that subcontractor ‘Sh Bhola Shah’ was not currently was not currently working with assessee. It was submitted that working with assessee. It was submitted that ‘subcontractors subcontractors’ are a small-time labour contractors and do not have a fixed place of time labour contractors and do not have a fixed place of time labour contractors and do not have a fixed place of business and operate from the site of the clients only , however due business and operate from the site of the clients only , however due business and operate from the site of the clients only , however due to pandemic many laborers laborers contractors had moved back to contractors had moved back to their native places and therefore native places and therefore were not available at their addresses. not available at their addresses. The Ld. CIT(A) deleted the disallowance observing as under: The Ld. CIT(A) deleted the disallowance observing as under: The Ld. CIT(A) deleted the disallowance observing as under: “10.8.4 In this regard, I agree with the appellant that various 10.8.4 In this regard, I agree with the appellant that various 10.8.4 In this regard, I agree with the appellant that various documentary evidences were filed before the AO or even dur documentary evidences were filed before the AO or even dur documentary evidences were filed before the AO or even during the current appellate proceedings in order to prove the existence of the current appellate proceedings in order to prove the existence of the current appellate proceedings in order to prove the existence of the vendors/Sub-Contracotrs and Contracotrs and genuineness of the transaction. The AO genuineness of the transaction. The AO has not pointed out any deficiency or lacuna in these evidences. It is has not pointed out any deficiency or lacuna in these evidences. It is has not pointed out any deficiency or lacuna in these evidences. It is also claimed that even the service provid also claimed that even the service providers have filed it's income tax ers have filed it's income tax returns for some years and claimed the TDS deducted by the returns for some years and claimed the TDS deducted by the returns for some years and claimed the TDS deducted by the appellant company, which goes on to prove the genuineness of the appellant company, which goes on to prove the genuineness of the appellant company, which goes on to prove the genuineness of the transactions. It is also noticed that the AO has completely disregarded transactions. It is also noticed that the AO has completely disregarded transactions. It is also noticed that the AO has completely disregarded the submissions and documenta the submissions and documentary evidences filed before him and ry evidences filed before him and drawn his conclusion because the Vendors/Sub drawn his conclusion because the Vendors/Sub-Contractors have not Contractors have not filed their returns of Income or because the Vendor/Sub filed their returns of Income or because the Vendor/Sub-Contractors Contractors were not produced during assessment proceedings. In my considered were not produced during assessment proceedings. In my considered were not produced during assessment proceedings. In my considered view, the appellant ha view, the appellant has provided sufficient evidences to prove the s provided sufficient evidences to prove the existence of the Vendor/Sub existence of the Vendor/Sub-Contractors as well as genuineness of Contractors as well as genuineness of the transactions. Now the onus shifts on the AO to either bring the transactions. Now the onus shifts on the AO to either bring the transactions. Now the onus shifts on the AO to either bring contrary evidences or find defects or deficiencies in the evidences contrary evidences or find defects or deficiencies in the evidences contrary evidences or find defects or deficiencies in the evidences submitted by submitted by the Appellant. Hon'ble Courts are unanimous that the Appellant. Hon'ble Courts are unanimous that impossibilities cannot be thrust on the assessee. For impossibilities cannot be thrust on the assessee. For example, in the instant case, ensuring attendance of the Vendors/Sub example, in the instant case, ensuring attendance of the Vendors/Sub example, in the instant case, ensuring attendance of the Vendors/Sub- Contractors through the appellant or why the Vendors/Subcontractors Contractors through the appellant or why the Vendors/Subcontractors Contractors through the appellant or why the Vendors/Subcontractors have not filed c have not filed corresponding returns of income. At the same time, the orresponding returns of income. At the same time, the decisions of Hon'ble Supreme, Court in the case of CIT vs Odeon decisions of Hon'ble Supreme, Court in the case of CIT vs Odeon decisions of Hon'ble Supreme, Court in the case of CIT vs Odeon Builders (P.) Ltd. (supra) (SC) and Hon'ble Bombay High Court in the Builders (P.) Ltd. (supra) (SC) and Hon'ble Bombay High Court in the Builders (P.) Ltd. (supra) (SC) and Hon'ble Bombay High Court in the case of CIT v. Nikunj Eximp Enterprises (P.) Ltd. (supra) (Bom.) (HC) case of CIT v. Nikunj Eximp Enterprises (P.) Ltd. (supra) (Bom.) (HC) case of CIT v. Nikunj Eximp Enterprises (P.) Ltd. (supra) (Bom.) (HC) are fully applicable to the facts of the present disallowances are fully applicable to the facts of the present disallowances are fully applicable to the facts of the present disallowances attempted by the AO. Considering the totality of the facts and attempted by the AO. Considering the totality of the facts and attempted by the AO. Considering the totality of the facts and

M/s Capacit’e Infraprojects Ltd. 20 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

circumstances of the issues involve, the disallowances made in the circumstances of the issues involve, the disallowances made in the circumstances of the issues involve, the disallowances made in the cases of Mr. Bhola Sah of Rs.63,52,600/ cases of Mr. Bhola Sah of Rs.63,52,600/- Shri Sunil Kumar Gore Shri Sunil Kumar Gorelal Pandit of Rs. 57,92,300/ Pandit of Rs. 57,92,300/-, M/s Vision Realcon Private Limited of , M/s Vision Realcon Private Limited of Rs.48,44,600/- - and M/s Angelina Infratech Pvt Ltd. of Rs. and M/s Angelina Infratech Pvt Ltd. of Rs. 4,91,68,800/- deserved to be deleted. deserved to be deleted.” 12.1 We have heard rival submission of the parties on the issue in have heard rival submission of the parties on the issue in have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute and perused the relevant material on record. The issue in dispute and perused the relevant material on record. The issue in dispute whether the above subcontractor parties are genuine and dispute whether the above subcontractor parties are genuine and dispute whether the above subcontractor parties are genuine and whether they had rendered actual services to the assessee. The whether they had rendered actual services to the assessee. The whether they had rendered actual services to the assessee. The Assessing Officer has noted that neither those parties ssing Officer has noted that neither those parties were located ssing Officer has noted that neither those parties at their addresses nor the assessee had filed any evidence in at their addresses nor the assessee had filed any evidence in at their addresses nor the assessee had filed any evidence in support of the services rendered, but the Ld. CIT(A) has recorded support of the services rendered, but the Ld. CIT(A) has recorded support of the services rendered, but the Ld. CIT(A) has recorded that said parties had filed details of services provided. The Ld. that said parties had filed details of services provided. The Ld that said parties had filed details of services provided. The Ld CIT(A) has not mentioned specifically as which document has been CIT(A) has not mentioned specifically as which document has been CIT(A) has not mentioned specifically as which document has been filed by the assessee to establish the fact of services rendered. filed by the assessee to establish the fact of services rendered. filed by the assessee to establish the fact of services rendered. Further, the current addresses of those contact parties were also Further, the current addresses of those contact parties were also Further, the current addresses of those contact parties were also not provided to the Assessing Officer for verification of their not provided to the Assessing Officer for verification of not provided to the Assessing Officer for verification of existence as those parties were neither found by in post search existence as those parties were neither found by in post search existence as those parties were neither found by in post search proceedings proceedings proceedings or or or during during during assessment assessment assessment proceeding. proceeding. proceeding. In In In such such such circumstances, we feel it appropriate to circumstances, we feel it appropriate to restore this issue back to this issue back to the file of the Assessing Officer the file of the Assessing Officer for verification of the partie for verification of the parties and examining the document in support of the services rendered by examining the document in support of the services rendered by examining the document in support of the services rendered by those parties.

12.2 Accordingly, the ground No.2 Accordingly, the ground No.2 of the appeal of the R of the appeal of the Revenue is allowed for statistical purposes. allowed for statistical purposes.

M/s Capacit’e Infraprojects Ltd. 21 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

M/s Capacit’e Infraprojects Ltd. 22 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

Services private limited failed to explain the urgency of exigency for Services private limited failed to explain the urgency of exigency for Services private limited failed to explain the urgency of exigency for making cash payments to the tune of making cash payments to the tune of Rs. 7.5 crores and also failed 7.5 crores and also failed to substantiate genuineness of the cash expenses incurred for the genuineness of the cash expenses incurred for the genuineness of the cash expenses incurred for the purpose of the business of the assessee usiness of the assessee.The Assessing Officer he Assessing Officer observed that excep observed that except submitting salary register, t submitting salary register,M/s Bhpati Infrabuild Services private limited Infrabuild Services private limited, had not been able to submit any not been able to submit any other detail to prove the genuineness of the cash expenses. The other detail to prove the genuineness of the cash expenses. The other detail to prove the genuineness of the cash expenses. The Assessing Officer also refer to the statement of Shri Saroj Kumat also refer to the statement of Shri Saroj Kumat also refer to the statement of Shri Saroj Kumat Pati, CEO of said part Pati, CEO of said part, wherein he submitted that reason for wherein he submitted that reason for deviation from the standard operating procedure of payment by deviation from the standard operating procedure of payment by deviation from the standard operating procedure of payment by banking channel was due to the reason that M/s Bhpati Infrabuild banking channel was due to the reason that M/s Bhpati Infrabuild banking channel was due to the reason that M/s Bhpati Infrabuild Services private limited provided ited provided services of highly skilled labour at services of highly skilled labour at all site of the assessee. The Assessing Officer found contradiction in all site of the assessee. The Assessing Officer found contradiction in all site of the assessee. The Assessing Officer found contradiction in the claim of the assessee and in statement of the CEO of the said the claim of the assessee and in statement of the CEO of the said the claim of the assessee and in statement of the CEO of the said party. But the Assessing Officer noted that M/s Bhpati Infrabuild party. But the Assessing Officer noted that M/s Bhpati Infrabuild party. But the Assessing Officer noted that M/s Bhpati Infrabuild Services private limited was also under scrutiny and therefore he rvices private limited was also under scrutiny and therefore he rvices private limited was also under scrutiny and therefore he made disallowance in the hands of the assessee company on the made disallowance in the hands of the assessee company on the made disallowance in the hands of the assessee company on the protective basis.

13.2 The Ld. CIT(A), however has deleted the disallowance for the , however has deleted the disallowance for the , however has deleted the disallowance for the reason that the issue of disallowance should reason that the issue of disallowance should be made only in the be made only in the hand of M/s Bhpati Infrabuild Services private limited. The relevant hand of M/s Bhpati Infrabuild Services private limited. The relevant hand of M/s Bhpati Infrabuild Services private limited. The relevant funding of the Ld. CIT(A) is reproduced as under: funding of the Ld. CIT(A) is reproduced as under: “12.3 In my considered view, there is no dispute that the appellant 12.3 In my considered view, there is no dispute that the appellant 12.3 In my considered view, there is no dispute that the appellant has made payment to M/s Bhupati Infrabuild Services Pvt. Ltd. and has made payment to M/s Bhupati Infrabuild Services Pvt. Ltd. and has made payment to M/s Bhupati Infrabuild Services Pvt. Ltd. and M/s Bhupati Infrabuild Services Pvt. Ltd. has also confirmed to have M/s Bhupati Infrabuild Services Pvt. Ltd. has also confirmed to have M/s Bhupati Infrabuild Services Pvt. Ltd. has also confirmed to have

M/s Capacit’e Infraprojects Ltd. 23 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

received the said payment. Hence, providing of service received the said payment. Hence, providing of service received the said payment. Hence, providing of services and genuineness of the same need to be examined in the hands of M/s genuineness of the same need to be examined in the hands of M/s genuineness of the same need to be examined in the hands of M/s Bhupati Infrabuild Services Pvt. Ltd. Disallowance if any need to be Bhupati Infrabuild Services Pvt. Ltd. Disallowance if any need to be Bhupati Infrabuild Services Pvt. Ltd. Disallowance if any need to be resorted to only in the hands of M/s Bhupati Infrabuild Services Pvt. resorted to only in the hands of M/s Bhupati Infrabuild Services Pvt. resorted to only in the hands of M/s Bhupati Infrabuild Services Pvt. Ltd. and not in the case of the appellant. Henc Ltd. and not in the case of the appellant. Hence, there is no occasion e, there is no occasion for any protective addition in the case of the appellant. Thus, the for any protective addition in the case of the appellant. Thus, the for any protective addition in the case of the appellant. Thus, the protective addition of Rs. 3,18,69,396/ protective addition of Rs. 3,18,69,396/- deserved to be deleted. Thus, deserved to be deleted. Thus, ground of appeal no. 4 is allowed. It is further clarified here that this ground of appeal no. 4 is allowed. It is further clarified here that this ground of appeal no. 4 is allowed. It is further clarified here that this decision will not h decision will not have bearing on the issue of genuineness of the ave bearing on the issue of genuineness of the expenses, which will be separately examined in the case of M/s expenses, which will be separately examined in the case of M/s expenses, which will be separately examined in the case of M/s Bhupati Infrabuild Services Pvt. Ltd. for the relevany AYs. Bhupati Infrabuild Services Pvt. Ltd. for the relevany AYs.” 13.3 We have heard rival submission of the parties and perused the have heard rival submission of the parties and perused the have heard rival submission of the parties and perused the relevant material on record. In our opinion the disallowance in the on record. In our opinion the disallowance in the on record. In our opinion the disallowance in the case of the assessee has been considered for the reason that if the case of the assessee has been considered for the reason that if the case of the assessee has been considered for the reason that if the claim of said expenses in the hand of M/s Bhpati Infrabuild d expenses in the hand of M/s Bhpati Infrabuild d expenses in the hand of M/s Bhpati Infrabuild Services private limited is not found genuine, then payment made Services private limited is not found genuine, then payment made Services private limited is not found genuine, then payment made by the assessee for sa ee for said expenses also becomes non d expenses also becomes non-genuine and therefore cannot be allowed therefore cannot be allowed as expenditure incurred wholly and as expenditure incurred wholly and exclusively for the purpose of the business of the assessee. Before exclusively for the purpose of the business of the assessee. exclusively for the purpose of the business of the assessee. us the learned counsel for the assessee has filed a copy of ITAT us the learned counsel for the assessee has filed a copy of ITAT us the learned counsel for the assessee has filed a copy of ITAT order dated 27/07/2023 in the case of M/s Bhupati Infrabuild d 27/07/2023 in the case of M/s Bhupati Infrabuild d 27/07/2023 in the case of M/s Bhupati Infrabuild Services P ltd in ITA No. 897, 898, and 899/Mum/2023 for Services P ltd in ITA No. 897, 898, and 899/Mum/2023 for Services P ltd in ITA No. 897, 898, and 899/Mum/2023 for assessment year 2016 assessment year 2016-17; 2017-18 and 2018-19. On perusal of th 19. On perusal of the said order, we find that the T said order, we find that the Tribunal has deleted the addition made ribunal has deleted the addition made on the ground of no incriminating material seized from the premises f no incriminating material seized from the premises f no incriminating material seized from the premises of the assessee following the finding of the Hon’ble Bombay High of the assessee following the finding of the Hon’ble Bombay High of the assessee following the finding of the Hon’ble Bombay High Court in the case of continental warehousing Court in the case of continental warehousing Corporation(supra). Corporation(supra). Since the issue of genuineness of expenses claimed by M/s M/s Since the issue of genuineness of expenses claimed by M/s M/s Since the issue of genuineness of expenses claimed by M/s M/s Bhpati Infrabuild Services private limited abuild Services private limited, need to be examined and need to be examined and

M/s Capacit’e Infraprojects Ltd. 24 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

the consequent payment claimed by the assessee for the services the consequent payment claimed by the assessee for the services the consequent payment claimed by the assessee for the services availed from M/s Bhpati Infrabuild Services private limited, is also availed from M/s Bhpati Infrabuild Services private limited, availed from M/s Bhpati Infrabuild Services private limited, under cloud and need to be examined in order to establish that said under cloud and need to be examined in order to establish that said under cloud and need to be examined in order to establish that said services had been actually services had been actually rendered by M/s Bhpati Infr by M/s Bhpati Infrabuild Services private limited Services private limited, wholly and exclusively for the purpose of wholly and exclusively for the purpose of the business of the assessee the business of the assessee. Therefore, we restore we restore this issue back to the file of the Assessing Officer, for to the file of the Assessing Officer, for examining whether examining whether M/s Bhpati Infrabuild Services private limited Bhpati Infrabuild Services private limited had actually rendered had actually rendered services to the assessee services to the assessee. The assessee is directed to produce all the The assessee is directed to produce all the necessary evidence in support of the act necessary evidence in support of the actual work carried out for the ual work carried out for the business of the assessee business of the assessee by M/s Bhupati Infrabuild Services private pati Infrabuild Services private limited. The Assessing Officer after verification of the documentary . The Assessing Officer after verification of the documentary . The Assessing Officer after verification of the documentary evidence shall decide the issue in accordance with law. The ground evidence shall decide the issue in accordance with law. evidence shall decide the issue in accordance with law. of the appeal of the R of the appeal of the Revenue is accordingly allowed for statistical evenue is accordingly allowed for statistical purposes.

M/s Capacit’e Infraprojects Ltd. 25 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

consideration. A copy of . A copy of such agreement has been placed on paper agreement has been placed on paper book page 33-36. Under the said agreement, the company 36. Under the said agreement, the company 36. Under the said agreement, the company mentioned that it required service mentioned that it required services of an efficient, qualified of an efficient, qualified, capable and experienced person to undertake the duties as may be required and experienced person to undertake the duties as may be required and experienced person to undertake the duties as may be required with respect to primary business activities of the company and for with respect to primary business activities of the company and for with respect to primary business activities of the company and for this purpose the assessee company this purpose the assessee company agreed to send Sh Asutosh agreed to send Sh Asutosh Katyal to the University of to the University of Illinois, Chikago , USA for undertaking Illinois, Chikago , USA for undertaking training/ courses for a period of four years which shall be training/ courses for a period of four years which shall be training/ courses for a period of four years which shall be important for performing the said duties. Before the Assessing important for performing the said duties. Before the Assessing important for performing the said duties. Before the Assessing Officer it was submitted that Sh Asutosh Katyal afte Officer it was submitted that Sh Asutosh Katyal after completing his r completing his studies at USA, joined , joined the assessee company and has developed a the assessee company and has developed a e-commerece platform known as commerece platform known as ‘E-force’ for connecting general for connecting general contractors/developers with relevant labour contractors and contractors/developers with relevant labour contractors and contractors/developers with relevant labour contractors and specialized vendors, which has helped the assessee company in vendors, which has helped the assessee company in vendors, which has helped the assessee company in conducting its business smoothly. The learned Assessing Officer conducting its business smoothly. The learned Assessing Officer conducting its business smoothly. The learned Assessing Officer disallowed the expenses claimed by the assessee on the ground that disallowed the expenses claimed by the assessee on the ground that disallowed the expenses claimed by the assessee on the ground that firstly, the expenses were , the expenses were incurred for only to the the Son of director t to any other eligible employee of the company, secondly and not to any other eligible employee of the company, t to any other eligible employee of the company, the educational course pursued by Sh Asutosh Katyal was not in the educational course pursued by Sh Asutosh Katyal was not in the educational course pursued by Sh Asutosh Katyal was not in the field of construction industry and it was not certain at the time the field of construction industry and it was not certain at the time the field of construction industry and it was not certain at the time of sponsoring as how the said course would benefit to the assessee. of sponsoring as how the said course would benefit to the assesse of sponsoring as how the said course would benefit to the assesse The Ld. CIT(A) however noted that he was sent for special training The Ld. CIT(A) however noted that he was sent for special training The Ld. CIT(A) however noted that he was sent for special training in advanced computing abroad and after completing his training he in advanced computing abroad and after completing his training he in advanced computing abroad and after completing his training he joined back the company in financial year 2017 joined back the company in financial year 2017-18 and for which 18 and for which he was paid regular salary and other compensation as per he was paid regular salary and other compensation as per he was paid regular salary and other compensation as per

M/s Capacit’e Infraprojects Ltd. 26 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

companies policy and thus the expenses incurred were for the and thus the expenses incurred were for the and thus the expenses incurred were for the business of the assessee. The Ld. CIT(A) relied on the decision of the business of the assessee. The Ld. CIT(A) relied on the decision of the business of the assessee. The Ld. CIT(A) relied on the decision of the Hon’ble Bombay High Court in the case of Satkal Papers P Ltd Vs Hon’ble Bombay High Court in the case of Satkal Papers P Ltd Vs Hon’ble Bombay High Court in the case of Satkal Papers P Ltd Vs CIT (114 ITR 256).

14.2 Before us the learned DR referred Before us the learned DR referred to the age of sh Asutosh to the age of sh Asutosh Katyal mentioned as 21 years at the time of entering agreement for Katyal mentioned as 21 years at the time of entering agreement for Katyal mentioned as 21 years at the time of entering agreement for sponsoring of studies abroad on 28/12/2013 and raised out on his sponsoring of studies abroad on 28/12/2013 and raised out on his sponsoring of studies abroad on 28/12/2013 and raised out on his actual age recorded in the said agreement. actual age recorded in the said agreement. The relevant part of The relevant part of agreement is reproduced as under: agreement is reproduced as under:

AGREEMENT This Agreement (this “ This Agreement (this “Agreement”) dated this zi day of Dec' 2013 between: ) dated this zi day of Dec' 2013 between: CAPACIT'E INFRA PROJECTS PRIVATE LTD. a company incorporated and registered CAPACIT'E INFRA PROJECTS PRIVATE LTD. a company incorporated and registered CAPACIT'E INFRA PROJECTS PRIVATE LTD. a company incorporated and registered under the Companies Act. 1950 and having its registered off under the Companies Act. 1950 and having its registered office at 605 ice at 605-607.Shrikant Chambers Phase-II,6th th floor, Adjacent to R.K. Studios, Sion - Trombay Road, Mumbai Trombay Road, Mumbai- 400071, (the "Company") of the One Part; "Company") of the One Part; AND Mr. ASUTOSH KATYAL, aged 21 years, Indian inhabitant, having permanent residential Mr. ASUTOSH KATYAL, aged 21 years, Indian inhabitant, having permanent Mr. ASUTOSH KATYAL, aged 21 years, Indian inhabitant, having permanent address at B-23, Eden Gardens, Panjra Pole, V.N. Purav 23, Eden Gardens, Panjra Pole, V.N. Purav Marg, Deonar, Mumbai Marg, Deonar, Mumbai- 400098 (“AK”) of the Other Part Other Part. WHEREAS A. The Company is engaged in the business of construction of Highrise and Super A. The Company is engaged in the business of construction of Highrise and Super A. The Company is engaged in the business of construction of Highrise and Super Highrise building. B. The Company requires services of an efficient, qualified, capable and experienced The Company requires services of an efficient, qualified, capable and experienced The Company requires services of an efficient, qualified, capable and experienced person to undertake the duties (" undertake the duties ("Duties") as may be required with respect to primary as may be required with respect to primary business activities of the Company. business activities of the Company. C. Company agrees to send AK to the University of lilinois. Chicago, United States of Company agrees to send AK to the University of lilinois. Chicago, United States of Company agrees to send AK to the University of lilinois. Chicago, United States of America for undertaking training/course for a period of fo America for undertaking training/course for a period of four years (hereinafter referred ur years (hereinafter referred to as said "training/course"), which shall be important for performing the said duties. to as said "training/course"), which shall be important for performing the said duties. to as said "training/course"), which shall be important for performing the said duties. D. The Parties hereto are therefore desirous of recording the terms and conditions of the The Parties hereto are therefore desirous of recording the terms and conditions of the The Parties hereto are therefore desirous of recording the terms and conditions of the contract.

M/s Capacit’e Infraprojects Ltd. 27 M/s Capacit’e Infraprojects Ltd. ITA Nos. 954 to 957/Mum/2023 ITA Nos. 954 to 957/Mum/2023

NOW THEREFORE in consideration of the NOW THEREFORE in consideration of the mutual covenants, promises, representations mutual covenants, promises, representations and warranties contained herein and for other valuable consideration, the adequacy, warranties contained herein and for other valuable consideration, the adequacy, warranties contained herein and for other valuable consideration, the adequacy, sufficiency and receipt of which is hereby acknowledged and agreed, the Parties hereby sufficiency and receipt of which is hereby acknowledged and agreed, the Parties hereby sufficiency and receipt of which is hereby acknowledged and agreed, the Parties hereby agree as follows: 1.1 Interpretation. In this Agreement: this Agreement: 1.1.1 references to statutes or statutory provisions include references to any orders. or references to statutes or statutory provisions include references to any orders. or references to statutes or statutory provisions include references to any orders. or regulations made there under and references to any statute, provision, order or regulations made there under and references to any statute, provision, order or regulations made there under and references to any statute, provision, order or regulation include references to that statute, provision order or regulation as amended, regulation include references to that statute, provision order or reg regulation include references to that statute, provision order or reg modified, re-enacted or replaced from time to time whether before or after the date enacted or replaced from time to time whether before or after the date enacted or replaced from time to time whether before or after the date thereof; 1.1.2 references to Recitals, Articles, and Schedules are recitals to, articles of and 1.1.2 references to Recitals, Articles, and Schedules are recitals to, articles of and 1.1.2 references to Recitals, Articles, and Schedules are recitals to, articles of and schedules to this Agreement. The Recitals and Schedules schedules to this Agreement. The Recitals and Schedules form part of the operative form part of the operative provisions of this Agreement and references to this Agreement shail, unless the context provisions of this Agreement and references to this Agreement shail, unless the context provisions of this Agreement and references to this Agreement shail, unless the context otherwise requires, include references to Recitels and Schedules, otherwise requires, include references to Recitels and Schedules, 1.1.3 headings are for convenience only and shall not affect the interpretation of. the 1.1.3 headings are for convenience only and shall not affect the 1.1.3 headings are for convenience only and shall not affect the covenants hereof, 1.1.4 where a word or phrase is delined, other parts of speech and grammatical forme where a word or phrase is delined, other parts of speech and grammatical forme where a word or phrase is delined, other parts of speech and grammatical forme and” 14.3 The learned counsel for the assessee was directed to produce The learned counsel for the assessee was directed to produce The learned counsel for the assessee was directed to produce evidence in support of date of birth of Sh Asutosh Katyal, but no evidence in support of date of birth of Sh Asutosh Katyal, evidence in support of date of birth of Sh Asutosh Katyal, such evidence was filed before us. Similarly, the learned DR reffered such evidence was filed before us. Similarly, the learned DR such evidence was filed before us. Similarly, the learned DR to the evidence filed by the assessee on Paper Book Page 37-48, to the evidence filed by the assessee on Paper Book Page 37 to the evidence filed by the assessee on Paper Book Page 37 which is a brochure for project developed by sh Asutosh Katyal and which is a brochure for project developed by sh Asutosh Katyal and which is a brochure for project developed by sh Asutosh Katyal and his team. The learned DR submitted that as per his team. The learned DR submitted that as per paper book page 37 paper book page 37 said project was developed by another company namely ‘Captech said project was developed by another company namely said project was developed by another company namely Technology’, thus it was not clear whether this software product , thus it was not clear whether this software product , thus it was not clear whether this software product namely ‘E-force’ was developed by was developed by or for the assessee company . the assessee company . The learned counsel for the assessee was dire The learned counsel for the assessee was directed to produce cted to produce financial statement of the subsequent years for verifying whether financial statement of the subsequent years for verifying whether financial statement of the subsequent years for verifying whether the said software developed by Sh Asutosh was appearing as the said software developed by Sh Asutosh was appearing as the said software developed by Sh Asutosh was appearing as

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intangible asset in the balance sheet ble asset in the balance sheet of the assessee company but of the assessee company but no such evidence was was filed before us to substanti to substantiate that said platform developed by Mr Katyal has benefitted the assessee platform developed by Mr Katyal has benefitted the assessee platform developed by Mr Katyal has benefitted the assessee company without additional consideration or payment. Further, as company without additional consideration or payment. company without additional consideration or payment. mentioned by the Ld. CIT(A) if mentioned by the Ld. CIT(A) if Sh Ashutosh Katyal has been paid Ashutosh Katyal has been paid separately salary and remuneration and compensation salary and remuneration and compensation salary and remuneration and compensation for services rendered then there is no benefit accrue rendered then there is no benefit accrued to the assessee for to the assessee for sponsoring his studies abroad. Further ing his studies abroad. Further, the course studied course studied by Mr. Asutosh Katyal is a regular u Asutosh Katyal is a regular undergraduate course in computer ndergraduate course in computer- science and not advanced training course in the field of science and not advanced training course in the field science and not advanced training course in the field construction, which is the business of the construction, which is the business of the assessee company and assessee company and therefore, how the assessee , how the assessee assumed at the time of entering the time of entering agreement with him that he would perform duties for the company agreement with him that he would perform duties for the company agreement with him that he would perform duties for the company is not understandable is not understandable. Further, the assessee has not filed any . Further, the assessee has not filed any details of any consistent policy of sponsoring candidates or children tails of any consistent policy of sponsoring candidates or children tails of any consistent policy of sponsoring candidates or children of employees of the company for foreign study in past or in of employees of the company for foreign study in past or in of employees of the company for foreign study in past or in succeeding years. In the circumstances, we feel it appropriate to succeeding years. In the circumstances, we feel it appropriate to succeeding years. In the circumstances, we feel it appropriate to restore this issue back to the file of the A restore this issue back to the file of the Assessing Officer f ssessing Officer for deciding afresh after making necessary inquiries and fresh after making necessary inquiries and fresh after making necessary inquiries and verification of documentary evidences. The ground No. 4 of the appeal of the documentary evidences. The ground No. 4 of the appeal of the documentary evidences. The ground No. 4 of the appeal of the Revenue is accordingly allowed for statistical purposes. evenue is accordingly allowed for statistical purposes. evenue is accordingly allowed for statistical purposes.

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15.1 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The Assessing dispute and perused the relevant material on record. The Assessing dispute and perused the relevant material on record. The Assessing Officer has disallowed payment of Rs.16,85,200/ Officer has disallowed payment of Rs.16,85,200/- - made to Shri Vishwamitter Katyal, , who is father-in-law of one of the Director of one of the Director of the the the assessee assessee assessee company. company. company. The assessee submitted The assessee submitted The assessee submitted that that Shri that Shri Shri Vishwamitter Katyal was having experience of four decades in the Vishwamitter Katyal was having experience of four decades in the Vishwamitter Katyal was having experience of four decades in the contracting industry and in view of the previous employment of contracting industry and in view of the previous employment of contracting industry and in view of the previous employment of handling business development, h siness development, he was appointed consultant for e was appointed consultant for business development and additionally he handled purchase business development and additionally he handle business development and additionally he handle department at the North Zone Gurgaon. The Assessing Officer department at the North Zone Gurgaon. The Assessing Officer department at the North Zone Gurgaon. The Assessing Officer though recorded that assessee had hough recorded that assessee had not clearly brought out the not clearly brought out the contribution of Shri Vis contribution of Shri Vishwamitter Katyal to the company hwamitter Katyal to the company, however he disallowed payment made to Shri Vishwamitter Katyal invoking he disallowed payment made to Shri Vishwamitter Katyal invoking he disallowed payment made to Shri Vishwamitter Katyal invoking section 40A(2)(a) of the Act holding the same to be excessive and section 40A(2)(a) of the Act holding the same to be excessive and section 40A(2)(a) of the Act holding the same to be excessive and unreasonable. Before the Ld. CIT(A), the assessee justified that unreasonable. Before the Ld. CIT(A), the assessee justified that unreasonable. Before the Ld. CIT(A), the assessee justified that remuneration for pro remuneration for professional fee of monthly Rs. 1 lakh or 2 lakh 1 lakh or 2 lakh depending on the workload was as per the industry standard and depending on the workload was as per the industry standard and depending on the workload was as per the industry standard and the Assessing Officer has nowhere compared the said payment with the Assessing Officer has nowhere compared the said payment with the Assessing Officer has nowhere compared the said payment with the fair market value. The Ld. CIT(A) accordingly accepted the the fair market value. The Ld. CIT(A) accordingly accepted the the fair market value. The Ld. CIT(A) accordingly accepted the contention of the assessee and following the decision of the Hon’ble ssessee and following the decision of the Hon’ble ssessee and following the decision of the Hon’ble Bombay High Court in the case of Johnson & Johnson Ltd. [2017] Bombay High Court in the case of Johnson & Johnson Ltd. [2017] Bombay High Court in the case of Johnson & Johnson Ltd. [2017] 80 taxmann.com 337 (Bombay), decision of Co 80 taxmann.com 337 (Bombay), decision of Co-ordinate Bench of ordinate Bench of Tribunal in the case of Kimaya Impex (P.) Ltd. v. ITO (2020) 136 Tribunal in the case of Kimaya Impex (P.) Ltd. v. ITO (2020) 136 Tribunal in the case of Kimaya Impex (P.) Ltd. v. ITO (2020) 136 taxmann.com 117 (Mumbai (Mumbai-Trib.) and other decisions Trib.) and other decisions, deleted the disallowance of Rs.12,22,198/ disallowance of Rs.12,22,198/-. We do not find any infirmity in the . We do not find any infirmity in the

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order of the Ld. CIT(A) on the issue in dispute order of the Ld. CIT(A) on the issue in dispute and concur that the and concur that the AO has not held as how the professional fee paid was excessive or held as how the professional fee paid was excessive or held as how the professional fee paid was excessive or unreasonable. Accordingly ccordingly, we uphold the finding of ld CIT(A) on the finding of ld CIT(A) on the issue in dispute. The Ground No. 5 of the appeal of the Revenue is The Ground No. 5 of the appeal of the Revenue is The Ground No. 5 of the appeal of the Revenue is accordingly dismissed. accordingly dismissed.

Order pronounced in the open Court on nounced in the open Court on 29/12/2023. 12/2023. Sd/ Sd/- Sd/ Sd/- (SANDEEP SINGH KARHAIL SANDEEP SINGH KARHAIL) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 29/12/2023 Dragon Legal/Rahul Sharma, Sr. P.S. Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai