DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5(1), MUMBAI , MUMBAI vs. CEC-ITD CEM-TPL JOINT VENTURE , MUMBAI

It has been pointed out by the ld. Counsel for the assessee that the amount of Rs.97.11 lakhs which has been mentioned in the notice is without any basis and is incorrect figure. In response to the said notice, assessee had specifically in its reply dated 30/08/2022 has mentioned that it does not have any break-up of the referred sum of Rs.97.11 lakhs and therefore, assessee could not comment on the quantum of the expense. The copy of detail reply filed by the assessee in response to notice u/s. 148A(b) is appearing at pages 3-12 of the paper book. In the reply assessee had specifically stated that it does not have a detailed break-up of the amount and also had given detailed submissions with regard to nature of various expenses. However, the ld. AO in his order passed u/s. 148A(d) dated 30/08/2022 without providing any break-up has passed the order. The important contentions which has been raised are that the order u/s.148A(d) has been passed, firstly, without considering the submissions of the assessee; secondly- the order makes reference to various statements recorded during the course of survey and other details which had no mention in the notice issued and others CEC-LTD CEM TPL JOINT VENTURE u/s.148A(b) of the Act; and lastly, order also mentions some other issues like SOP has not been followed while booking expenses in relation to certain parties which was not part of the show-cause notice. Based on the aforesaid infirmities and the order passed u/s.148A(d), following propositions have been made before us by the ld. Counsel which was argued and also reiterated in the written submission filed before us which are as under:- II. Proposition 1. Notice issued u/s. 148A(b) of the Act is without any supporting material or correct information:

Notice issued u/s. 148A (b) of the Act mentioned sum of Rs. 97.11 Lakhs towards Contingency expenses. However, the assessee was not supplied with the information in the possession of the ld.AO in relation to the sum of Rs. 97.11 Lakhs. Further, the said information of Rs. 97.11 Lakhs of the ld.AO was without any material as same is an incorrect figure. Admittedly such material in the form of seized CTC report do exists, albeit containing different figures, which could have been supplied to the assessee.

Thus, it was pointed out that in the case of the assessee no material was provided along with notice issued u/s. 148A(b) of the Act and in fact the information in relation to sum of Rs. 97.11 Lacs provided in the referred notice was incorrect. III. Proposition 2: Submission filed by the assessee in response to notice u/s, 148A(b) of the Act was not considered while passing order u/s. 148A(d) of the Act 9. The Ld. AR submitted that the assessee in its submission filed in response to notice u/s 148A(b) of the Act had stated that it does not have a detailed breakup of the amount under consideration (i.e., Rs. 97.11 Lacs). However, the order was passed u/s 148A(d) of the Act without providing the assessee with the required break up in order to enable assessee to provide its rebuttal Section 148A(c) of the Act requires the ld.AO to consider the submission of the assessee before proceeding to pass order u/s 148A(d) of the Act. The relevant extract of the section is reproduced below for ready reference "148A. The Assessing Officer shall, before issuing any notice under section 148,- (a)……………. (b)……………. (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b);" and others CEC-LTD CEM TPL JOINT VENTURE 10. It was thus submitted that such order passed u/s. 148A(d) of the Act in case of an assessee without considering submission made by the assessee is bad in law. The Ld. AR relied upon the judgement of the Hon'ble Jharkhand High Court in the case of Ratan Bej v. PCIT (467 ITR 288) wherein it was held that non- consideration of the reply or objection furnished by the assessee not only amounts to violation of principles of natural justice but is also contravention of mandatory modalities which are to be followed during the course of enquiry proceedings under Section 148A of the Act (Para 8 and 8.1 of the referred order). Also, the assessing officer ought to have considered the objections raised by the petitioner and should have disposed of the same in terms of the judgement rendered by the Hon'ble SC in case of GKN Driveshafts (India) Ltd. V. IΠΟ [2003] 259 ITR 19 (SC) wherein the Hon'ble SC has laid down an elaborate procedure as to the manner of dealing with objections raised against a notice under Section 148 of the Act (Para 8.3 of the referred order). Further, the Hon'ble Jharkhand HC has also pointed out that Section 148 and 148A of the Act which were introduced by way of Finance Act, 2021 has been codified following the judgement rendered by Hon'ble SC in case of GKN Driveshafts (India) Ltd. V ITO (Para 9 of the referred order).

The Ld. AR has also placed reliance on the instructions issued by CBDT vide letter F. No. 299/10/2022- Dir(Inv.III)/647 dated 22.08.2022 which emphasized that: i. Personal hearing, if requested by the assessee, may be dealt with following the principle of natural justice by giving a and others CEC-LTD CEM TPL JOINT VENTURE reasonable period for compliance of notice specifying date of hearing. (point (viii)) ii. the ld. AO has to consider the reply of the assessee furnished, if any in response to the show cause notice referred to in Section 148A(b) of the Act before passing the order u/s 148A(d) of the Act (point (xi)).

Therefore, the order passed u/s. 148A (d) of the Act in case of an assessee is bad in law and deserves to be quashed. IV. Proposition 3. The AO has raised fresh issues and referred to new material in the order passed u/s 148A(d) of the Act.

Before us, it has been pointed out that the ld. AO has raised fresh issues at the time passing order u/s 148A(d) of the Act which were not stated by the ld. AO in its show cause notice issued u/s. 148A(b) of the Act for assessee to furnish its rebutted. The fresh issues raised by the ld.AO in the order passed u/s. 148A (d) of the Act are tabulated as below: Sr. Para Page Page No Contents as per Order No. No. No of of the The PB Order 1 4.1 24 12 Evidence found in the survey (4th discovered the term "Contingency" used line) to denote those expenses which are not recorded in the books of account and are spend in cash for non-business purpose. and others CEC-LTD CEM TPL JOINT VENTURE 2 5.1 24 12 The SOP is explained by two employees of the Organisation- Shri Dyandeep Bhandare' (AGM Commercial) and Shri Madhusoodanan (DGM Commercial) 3 5.4 26 14 When the assessee has been asked to give the breakup of contingency expenses during the survey and post survey proceeding, there was no forthright answer given by any of the employees in the JV entity. The assessee has only informed that no such breakup is maintained and that each expense and voucher has to be individually examined to find out if it was under the category of a "contingency" expense. 4 5.5 26 14 Very obvious anomalies were noticed in the tendering process with respect to expenses claimed in the head contingency expenses, while the tender was awarded to one of the parties, the other parties who had applied for the tender ironically belonged to the same group – for example, in a case where M/s. Sancheet Construction was offered the tender, the competing bids were placed by M/s. Sheth Infrastructure. However, fact is that both Sancheet Construction and Sheth Infrastructure were both shell entities that belonged to the same Tushar Munoat group of entities. 5 27 15 Statement of Sandeep Acharya 5.7 29 17 Statement of Vivek Agarwal

In support, of the contention that if AO brings out new issues or material which was not part of the show cause notice issued u/s 148A (b), then notice issued u/s 148A is bad in law, ld. AR relied upon the Judgement of the Hon'ble Delhi High Court in case of Tosca Master v. DCIT in W.P.(C) 10507/2023 & CM App. 40707/2023 wherein it has been held that the noticee or the assessee should not be prejudiced or taken by surprise. Further, the Hon'ble Delhi High Court has also relied on its own judgment in case of Banyan Real Estate Fund Mauritius Vs. ACIT W.P.(C) 10485/2023, wherein it was held that the decision to reopen or reassess cannot be based or sought to be justified either on additional reasons or those which may be supplied subsequently while disposing of objections preferred by an assessee. Accordingly, Hon'ble High Court has held that the foundational material alone would be relevant for the purpose of evaluating whether reassessment is justified. Department cannot take fresh ground while passing order u/s. 148A (d) of the Act.

Accordingly, it has been submitted before us that order the passed u/s: 148A (d) of the Act is bad in law as it is based on new issues for which the assessee was not allowed opportunity to file its rebuttal and others CEC-LTD CEM TPL JOINT VENTURE V. Proposition 4: Non-application of mind by AO while passing order u/s. 148A(d) of the Act 15. The Ld. AR further argued that the ld.AO has not applied his mind while passing order u/s. 148A (d) of the Act as if he would have applied his mind he would have noticed that: i. As per para 4.1 of the said order, the ld.AO has stated that "Evidence found in the survey discovered the term "Contingency used to denote those expenses which are not recorded in the books of account and are spend in cash for non- business purpose" However, in same para the ld.AO has made a contradictory statement stating that the figure of "Total Costs" incurred as per the CTC report matches the "total cost" figure as per the books of account (also prepared for each project). Both these sentences are in absolute contradiction to each other wherein at one place ld.AO has mentioned that these expenses are not recorded in the books of accounts and at other place he has mentioned that total figure of CTC report matches with the total cost figure of the books of accounts. ii. In para 5.4, it is stated that when the assessee has been asked to give breakup of contingency during the survey and post survey proceeding no forthright answer was given by any of the employees of the Assessee. However, the same is not the fact in case of the Assessee as the party wise breakup has been submitted by the employees in their statement recorded on oath during the survey proceedings. and others CEC-LTD CEM TPL JOINT VENTURE iii. Also, in the notices issued u/s 148A(b) of the Act, the ld. AO has alleged that the income amounting to Rs. 97.11 Lakhs chargeable to tax, which is represented in the form of entries in the books of account has escaped assessment. However, no breakup of Rs. 97.11 Lakhs or supporting material was provided by the ld.AO to the assessee. Subsequently, the AO passed an order u/s 148A (d) of the Act wherein breakup of Rs. 96.54 Crores for all the assessment years under consideration was provided by the ld.AO. However, no reference is drawn/reconciliation is provided by the ld.AO with the breakup of Rs. 96.54 Crores towards the alleged income amounting to Rs. 97.11 Lakhs which has escaped assessment.

On the other hand ld. DR submitted that in the first show- cause notice, ld. AO has mentioned about the survey and post survey enquiries wherein it was found that assessee group was involved in debiting bogus expenditure by taking non-genuine purchases and sub-contract expenses. Further CTC reports and books of accounts were also examined which did not match with the total expenditure shown in the CTS report and the books of accounts. It was in response to the explanation given by the assessee, ld. AO in his order u/s. 148A (d) has explained the details and the findings of the survey including various statements of the employees to draw adverse inference thus, there is no infirmity in the order passed u/s.148A(d). Further, all these aspects have been dealt by the ld. CIT (A) from para 6.

Assessee has further given manual of CPWD and the SOP described under CPWD Works Manual 2019 wherein there is a specific guideline and method for provisioning that contingencies and its utilization alongwith various Appendix and various illustrations. Based on that it was contended as under:-

Further, this principle has been further reiterated by the Hon'ble Bombay High Court in the case of Anurag Gupta v. ITO and Ors (454 ITR 326) wherein it has been held as under:- “It was urged that the procedure as prescribed under section 148A (b) of the Act as also the principles of natural justice had been violated, in as-much as while the petitioner was given the information in terms of section 148A(b) of the Act, the material which ought to have been provided to the petitioner was not so furnished, in the and others CEC-LTD CEM TPL JOINT VENTURE absence whereof the petitioner was precluded from filing an effective reply to the show-cause notice.” “In the present case admittedly, no material had been supplied to the petitioner, notwithstanding the fact that there was material available with the Assessing Officer as can be seen from the order passed by the Assessing Officer under section 148A (d) of the Act.” “It goes without saying that providing information to the petitioner, without furnishing the material based upon which the information is provided, would render an assessee handicapped in submitting an effective reply to the show-cause notice, thereby rendering the purpose and spirit of Section 148A(b) of the Act totally illusive and ephemeral. The fact that the material also was required to be supplied can very well be gauged from the clear directions issued by the Supreme Court in the case of Union of India v. Ashish Agarwal [2022] 444 ITR 1 (SC).” “Be that as it may, we hold that the reassessment proceedings initiated are unsustainable on the ground of violation of the procedure prescribed under section 148A(b) of the Act on account of failure of the Assessing Officer to provide the requisite material which ought to have been supplied along with the information in terms of the said section." Thus, the Courts have held that that without providing the information to the assessee and without furnishing the material based upon which the information is provided, the assessee cannot make effective reply and thereby the whole purpose and spirit of Section 148A( b) gets defeated and on this ground alone the entire re-assessment proceedings was held to be invalid and unsustainable. and others CEC-LTD CEM TPL JOINT VENTURE 22. Here in this case also as is evident from the show-cause notice, no such material was provided and even the ld. AO did not provide the information and the working of expenses of Rs.97.11 lakhs which was the basis for reopening the assessment. If the AO has not provided the information and material in his notice under Section 148A( b) which forms his basis for reopening, then entire proceedings and notice u/s 148A gets vitiated.

As incorporated above, the assessee has filed the detailed reply in response to show-cause notice which was without any material or information as what led to formation of belief for reopening the assessment, has been rejected by the ld. AO. This rejection is based on certain new information and statements recorded during the course of survey which was even confronted to the assessee if assessee was not provided while issuing notice u/s 148A (b) which are contained in the order u/s.148A(d), there was no way assessee could have responded or given its rebuttal. As pointed out before us and also noticed from the order passed u/s. 148A (d), the ld. AO has raised certain fresh issues which were not part of the show-cause notice u/s. 148A(b). It is incumbent for the ld. AO to provide all necessary information and material in his show-cause notice to seek assessee‟s rebuttal and explanation. He cannot raise some different issues and different material in his order u/s.148A(d) which was not part of the notices issued earlier u/s148A(b) which has been pointed out by the ld. Counsel in the manner noted above. From the bare perusal of the order u/s. 148A(d), it is seen that the ld. AO has and others CEC-LTD CEM TPL JOINT VENTURE referred to various statements recorded during the course of survey to show that these expenses were non-genuine. If ld. AO had these evidences / material before the issuance of show- cause notice u/s. 148A(d) then same should have been confronted and sought assessee‟s explanation. Once the legislature has provided the mechanism that ld. AO will issue a show-cause notice confronting all the material and information and if there is any violation of the procedure prescribed, the same amounts to violation of that procedure which is not merely a formality but a condition precedent to acquire jurisdiction to issue notice u/s.148A. The Hon’ble Delhi High Court in the case of Tosca Master v. DCIT (supra) has clearly held that assessee should not be prejudiced or taken by surprise in the order passed u/s.148A(d) when no such information or material was given to the assessee at the time of show-cause notice. The Hon’ble Delhi High Court has referred and relied upon the decision of Banyan Real Estate Fund Mauritius vs. ACIT (supra) wherein the Hon‟ble High Court had made following observations:- “28. Before concluding, and in our considered opinion, the impugned action is liable to be faulted since it clearly suffers from the following foundational illegality. As was rightly contended by Mr. Singh, the reasons which weigh upon an Assessing Officer proposing to reopen an assessment and form the bedrock of a notice under Section 148A(b) of the Act alone are germane for the purposes of evaluating the validity of that action. It is those set of reasons and which form the basis for the Assessing Officer forming an opinion that income liable to tax has escaped assessment alone which would merit examination and evaluation. A decision to reopen or reassess cannot be based or sought to be justified either on additional reasons or those which may be and others CEC-LTD CEM TPL JOINT VENTURE supplied subsequently while disposing of objections preferred by an assessee. The statutory scheme of reassessment neither sanctions vacillation nor can a decision to trigger reassessment be sustained based upon an attempted supplementation aimed at bolstering or buttressing the original opinion. The reasons on the basis of which a reassessment is proposed to be initiated is not a field of shifting sand and which authorises the AO to continually alter the basis on which the action is sought to be initiated.

These fundamental precepts assume added significance when viewed in light of the right to object which stands statutorily conferred upon an assessee. If the ultimate decision to justify initiation of reassessment be based on entirely new or previously undisclosed material or reasoning, it would clearly result in deprivation of a right to effectively object to the proposed action. It is these aspects which constrain us to come to the conclusion that the impugned action is rendered wholly unsustainable.

The aforenoted imperatives were duly highlighted by us in our recent decision in ATS Infrastructure Limited Vs. Assistant Commissioner of Income Tax Circle 1(1) Delhi &Ors.10 and where we had an occasion to deal with a similar challenge. While ruling on these aspects, we in ATS Infrastructure Limited had observed as follows:- "6. Our Court in Commissioner of Income Tax-II Vs. Living Media India Ltd. had pertinently observed that additional reasons cannot be provided or recorded by the Assessing Officer4 subsequent to the issuance of a notice under Section 148 of the Act. We deem it apposite to quote the following passage from that decision:- "13. With regard to the additional reasons which were recorded subsequent to the issuance of notice under section 148 of the said Act, we have already observed that this could not have been done by the Assessing Officer. The validity of the proceedings initiated upon a notice under section 148 of the said Act would have to be judged from the stand point of the reasons which existed at the point of time when the section 148 notice was issued. The additional reasons cannot be provided or recorded subsequent to the issuance of notice under section 148. It is, and others CEC-LTD CEM TPL JOINT VENTURE of course, open to the Assessing Officer, if some other information comes within his knowledge to issue another notice under section 148 for different reasons. But that is not the case here. On the basis of the very same notice issued under section 148, the Assessing Officer has recorded additional reasons subsequent to the issuance of notice and this is impermissible in law."

It becomes pertinent to observe that the validity of the proceedings initiated upon a notice under Section 148 of the Act would have to be adjudged from the stand point of the reasons which formed the basis for the formation of opinion with respect to escapement of income. That opinion cannot be one of changing hues or sought to be shored upon fresh reasoning or a felt need to make further enquiries or undertake an exercise of verification. Ultimately, the Court would be primarily concerned with whether the reasons which formed the bedrock for formation of the requisite opinion are tenable and sufficient to warrant invocation of Section 148 of the Act.

Thus, if we follow the aforesaid principle laid down by the Hon‟ble Delhi High Court, it becomes manifest that foundational material alone would be relevant for the purpose of evaluating whether re-assessment powers were justifiably invoked. The ld. AO cannot take fresh ground while passing the order u/s. 148A(d). Thus, on this ground alone, the notices issued u/s.148 by the ld. AO deserves to be quashed. Accordingly, on the aforesaid grounds, the entire proceedings u/s.148A is quashed on the ground that firstly, no material or information was supplied to the assessee alongwith the notices u/s.148A(b) and there was no break-up given as to how the expenses of Rs.97.11 lakhs was alleged to be escaping assessment; and secondly, the order u/s.148A(d) has made reference to various other information /material in the form of statement which was never confronted to the assessee at the time of issuance of show-cause and others CEC-LTD CEM TPL JOINT VENTURE notice and has come up for the first time if the order passed u/s.148A(d). Thus, respectfully following the ratio laid down by the Hon‟ble Supreme Court and in the aforesaid judgments of the Hon‟ble High Court notice u/s.148 is held to be invalid.

In A.Y.2018-19 also in the show-cause notice u/s.148A(b) is reference to sum of Rs.5516.78 lakhs and again the said figure and information is without any material and was incorrect figure. In response to the show-cause notice assessee had stated similarly that he does not have any detailed break-up of the said amount under consideration and requested the ld. AO to provide the said information. However, the ld. AO in his order passed u/s. 148A(d) without providing the break-up so as to enable the assessee to provide this rebuttal has passed the order. Apart from that it is seen that ld. AO has raised fresh issues and referred to a new material in his order passed u/s.148(d) which is exactly similar to the order passed in A.Y.2017-18. Here also notice u/s.148A(b) is similarly worded except for the figure mentioned was Rs.5516.78 Lakhs and FTS expenses of Rs.4471.31 Lakhs which again no detailed break-up was given nor it has been stated how this figure has been raised based on any particular material or information. It is in the order u/s. 148A(d), ld. AO has referred to some statements of various persons recorded during the survey which was not part of the show-cause notice. Thus, our finding given in A.Y.2017-18 will apply in this year also. Accordingly, in view of our reasoning given in the aforesaid appeal, the notice u/s.148 for the A.Y.2018-19 is also quashed. and others CEC-LTD CEM TPL JOINT VENTURE 26. In A.Y.2019-20 also ld. AO has issued exactly the same show-cause notice except in the change of figure of the amount which is Rs.2854.47 lakhs and FTS expenses of Rs.3077.81 lakhs. In this show-cause notice, no details of these expenses have been given and from where this figure has been arrived when assessee has specifically challenged the figure that same is incorrect. Again here in this year also ld. AO in his order u/s. 148A(d) has referred to altogether a different material including the same statement and the order passed u/s.148A(d) is pari- materia with the order passed u/s.148A(d) for the A.Y.2017-18 and 2018-19. Accordingly, in view of our finding given for the A.Y.2017-18, the notice u/s.148 for the A.Y.2019-20 is also quashed.

The assessee has also raised other grounds on account of non-mentioning of DIN and challenging the approval u/s.151. The same is not adjudicated as we have already quashed notices u/s.148 on the aforementioned reasons.

In so far as merits of the additions are concerned, it is seen that in all the assessment years i.e. A.Y.2017-18, 2018-19, 2019- 20, 2020-21 and 2022-23, they are exactly same wherein department has challenged the deletion of 95% of the expenses under the head „contingency expenses‟ and assessee has challenged sustaining of 5% of expenses confirmed by the ld. CIT (A). Apart from that in Revenue‟s appeal, the department has challenged the deletion of amount of fees for technical services. The quantum of addition challenged by the assessee as well as and others CEC-LTD CEM TPL JOINT VENTURE by the department has already been quantified in the earlier part of the order.

As the issue is common for all the years, the facts of the case for A.Y.2017-18 has been discussed here under which would apply mutatis mutandis to all other assessment years.

The brief facts are that the assessee is a Joint Venture consisting of three JV partners, namely, Continental Engineering Corporation, ITD Cementation India Limited and Tata Projects Limited. The assessee is engaged in the business of development of infrastructure projects. During the years under consideration, the assessee has carried out the construction of package 4 of Mumbai Metro Line 3 (Colaba-Bandra-SEEPZ) project known as Contract MM3-CBS-UGC-04 which was awarded to assessee JV by the Mumbai Metro Rail Corporation Limited.

The business premise of the assessee was surveyed u/s 133A of the Income Tax Act on 26.10.2021. During the course of the survey, the Department found certain records stored in the laptop of Shri Madhusoodanan, Deputy General Manager, Commercial, which were in respect of infrastructure project of Mumbai Metro Railway Project being carried out by the assessee. The relevant document which has been retrieved from the laptop of Shri Madhusoodanan and which has been relied upon by the Assessing Officer has been placed on page nos. 69 to 74 of and others CEC-LTD CEM TPL JOINT VENTURE the paper book for A.Y. 2017-18. The said paper, more particularly page no. 70 and 71 of the paper book, contains the budgeted cost estimated at the inception of the project, actual expenditure incurred till date and estimated cost to be incurred on the above project in future. The details of expenditure are recorded under different heads of expenditure. One of head of expenditure is 'contingency and design risk' containing the figure of Rs. 31,544.66 lacs incurred till date.

The ld. AO has noted that during the course of the survey operation, it is found that the assessee is using a unique method of accounting and the same is followed by the assessee group entities to record unaccounted "cash" expenses which are deployed to secure work contracts from the contractee organizations. Evidence found in the survey discovered the term "Contingency used to denote those expenses which are not recorded in the books of account and are spent in cash for non- business purposes. The assessee prepares CTC reports which stand for Cost to Completion (CTC). The CTC reports provide a pen picture of the actual costs incurred for the project under each expense head both Estimated costs (under the FTS column) and also the actual costs (under the "PTD" column, which is the "Paid Till Date figure). The figure of "Total Costs" incurred as per the CTC report matches the "total cost" figure as per the books of account (also prepared for each project). The contingency expenses are part of the "Contingency & Design Risk portion of the Cost to Completion (CTC) Report. and others CEC-LTD CEM TPL JOINT VENTURE 36. AO further observed that, although the total cost figure in the CTC report matches the total cost figure of the books of account, the cost booked under each head is different in the CTC report and the books of account. The reason for this was that there is a head of expense by the name "contingency expenses (Contingency & Design Risk and such other names) shown in the CTC report which are not present in the books of account. The contingency expenses shown in the Cost to Completion (CTC) reports are adjusted in various costing heads of the books of account by passing "adjustment" entries. Adjustment entries are of two types 1) booking of artificial expenditure from shell entities; & 2) booking of over-invoiced expenditure from regular vendors. Under the Contingency and Design Risk' heading of the Cost to Completion Reports.

Further, on examination of the information available, ld. AO informed that, the assessee has booked various bogus expenses in order to generate cash for meeting 'contingency' expenses. The evidences in relation to one of the sister concern of the assessee le CEC ITD CEM TPL JV were found in possession of Sri Madhusoodanan PM, DGM, Commercial of CEC ITD CEM TPL JV As per the details found with the Sri Madhusoodanan PM, it was observed that for the contingency expenses SOP for issuing WO and PO was not followed. This leads to conclusion that contingency expenses are bogus expenses and generated through taking entries from various vendors. and others CEC-LTD CEM TPL JOINT VENTURE 38. Further, ld. AO incorporated statement of Sri Madhusoodanan who was DGM, Commercial and statement of Sri Jayanta Basu wherein from certain answers to the questions, the ld. AO deduced that contingency expenses are not recorded in the books of accounts and these are application of unaccounted cash generated from the books / non-bogus orders and purchase orders ld. AO has also further noted that these statements were later on retracted. Thus, according to ld. AO, the said amount of Rs. 31,544.66 lacs of contingency and design risk is nothing but the expenditure incurred outside the books of account. The A.O. has concluded that the assessee has incurred bogus expenditure which has been booked in the regular books of account. By booking this bogus expenditure in the books of account, the assessee has generated cash which has been spent by the assessee outside the books of account and the same is not allowable. Accordingly, the A.O. has made disallowance of expenditure based on the chart prepared at the time of survey wherein the above figures have been bifurcated assessment year- wise. This chart is to be found on page no. 86 of the paper book. However, while disallowing the expenditure, the Assessing Officer has excluded following expenditure as the same has not been considered as bogus expenditure by the Assessing Officer. Particulars Amount (in Lakhs) Total contingency expenditure 31,544.66 Less: Expenses allowed by the 2,465.71 A.O. himself in the assessment proceedings

The party wise break-up of the above expenditure was provided by the assessee according to which the above expenditure consists of; (i) purchase of material and sub-contract charges paid to outside parties; and (ii) fees for technical services paid to JV partners and related entities. The Assessing Officer has held the above expenses to be bogus and disallowed purchases and sub-contract charges under the head contingency expenses and disallowed fees for technical services under the head FTS expenses.

The detailed reasons given by the A.O. for disallowance of contingency expenses are as follows. The A.O. has relied upon the statement of Shri Madhusoodanan, Deputy General Manager, Commercial, dated 27.10.2021. Shri Madhusoodanan was not able to properly explain the nature of expenditure reflected under the head 'contingency expenses'. The A.O. has also relied upon another statement of Shri Madhusoodanan dated 28.10.2021. AO has stated that during the survey and post-survey proceedings the assessee could not submit the break-up of the contingency expenses. The A.O. has also discussed the retraction of Shri Madhusoodanan and he was of the view that the retraction is not tenable and he has accordingly rejected it. The A.O. has also relied upon the statement of Shri Jayanta Basu recorded during the course of survey.

With these observations, the Assessing Officer disallowed the contingency expenditure. and others CEC-LTD CEM TPL JOINT VENTURE 43. Before the ld. CIT (A) the assessee has submitted the detailed background of the assessee JV and also the credentials of the JV partners. It was submitted that Continental Engineering Corporation is a Taiwan based multinational construction company. ITD Cementation India is part of Italian Taiwan Development Public Co. Ltd. Taiwan which is one of the largest civil engineering contractors in Southeast Asia. Tata Project Limited is one of India's leading EPC Co. and part of Tata group. It was submitted that the assessee has not booked any bogus expenditure nor generated any cash. It was further submitted that the seized document is merely an estimate of cost to be incurred on the project. Merely because an amount has been stated against contingency or contingency expenses, it does not mean that the same is bogus. The assessee vehemently argued that provision of contingency expenses is the norm and in any such infrastructure project, the contingency expenditure has to be provided.

In support of genuineness of expenses the assessee has submitted exhaustive documents like invoice, measurement sheet, work completion certificate, employee details, ledger account, running account bills etc. before the Assessing Officer. It was pointed out that the Assessing Officer has not found any fault with such documents. As regards non compliance to the notice issued by the Assessing Officer u/s 133(6) of the Act, it was submitted that few of the parties have in fact replied to the Assessing Officer and has given complete particulars and documents in support of genuineness of the transactions. The and others CEC-LTD CEM TPL JOINT VENTURE copies of such replies were also furnished with the ld. CIT (A). As regards balance parties, it was submitted that all relevant and necessary documents were submitted by the assessee and non- compliance on account of such parties cannot be held against assessee in light of documents submitted.

As regards not following the Standard Operating Procedure (SOP) in respect of some of the purchases/sub-contracts, it was submitted that there could be various reasons for not following SOP. The SOP may not have been followed where the work is of an urgent nature and the immediate decision is required to be taken. Further, in case of temporary work, no vendor approval is required and, hence, SOP may not be followed. In any case, the assessee has all the details like PAN, details of statutory registration etc. and, hence, it cannot be said that SOP has not been followed. The assessee submitted complete details of the expenditure which has been disallowed by the ld. A.O. and such details included measurement sheet, work completion certificate, employee details, ledger account, running account bills etc. It was submitted that all the payments have been made through cheque and the accounts are audited by the reputed Chartered Accountant firm. The assessee has also made a detailed submission in respect of the retraction made by the employees.

The ld. CIT (A) has considered the assessment order and the detailed submissions made by the assessee. According to the ld. CIT (A), the assessee has not fully explained the genuineness of the expenditure. The CIT (A) has also found certain shortcomings and others CEC-LTD CEM TPL JOINT VENTURE in the documents of the purchase/sub contract parties furnished by the assessee. According to the CIT (A), the complete documents of the parties have not been filed. The CIT (A), therefore, was unable to agree with the contention of the assessee that the entire expenses were genuine. However, he has also not agreed with the stand of the A.O. that the entire expenses are to be disallowed. According to the CIT (A), some of the expenses still passed the test of business expediency. The extent of disallowance would depend on the nature and quantum of evidence in each case. Considering these facts, the CIT (A) held that the disallowance of 5% would suffice as against 100% made by the A.O.

We have heard both the parties at length and also perused the relevant finding given in the impugned order as well as material referred to before us. Here in this case, the expenses have been held to be bogus by the ld. AO for the reason that same has been classified under the nomenclature “contingency and design risk” in the seized report. Before us it has been argued that merely because the figure of Rs. 31,544.66 lacs is written against the contingency and design risk in the seized report, it would not be correct to hold it to be bogus expenditure. Ld. AR submitted that as per the same seized report, Rs. 37,951.64 lacs were budgeted by the assessee at the beginning of the project. Ostensibly, such non-genuine or bogus expenditure could not have been budgeted at the beginning of the project. Further, Rs. 1,437.34 lacs has been mentioned in the seized material as contingency expenditure to be incurred in future. and others CEC-LTD CEM TPL JOINT VENTURE However, this is improbable to be bogus as bogus expenditure could not have been planned for future.

Before us reliance was placed upon the answer given by Shri Madhusoodanan. In answer to Q. no. 18 wherein, Shri Madhusoodanan had stated that the contingency expenses are essential expenses that could not have been foreseen when filing the tender bid. He further stated that these expenses like buying technical knowhow about the technical issue that have not been foreseen etc. are booked under this head.

It has been further submitted that the contingency expenses also include fees for technical services which have been paid to JV member or their related party. It was also pointed out that in the CTC report there is column named FTS (Final Tender Summary) which contains expenses budgeted at the beginning of the project on 18.07.2016. Contingency & Design expenses are also estimated at the beginning of the project. The contracts for technical services were awarded on 19.05.2017, 02.12.2019 and 04.12.2019 which are subsequent to the date of preparation of FTS column.

On the other hand ld. DR stated that once there was statement wherein under the head „contingency expenses‟ certain bogus expenses are also booked which were also found during the course of survey as there was mismatch between CTC report and expenses booked in the books of accounts. The ld. AO has correctly inferred that the expenses under the head „contingency and others CEC-LTD CEM TPL JOINT VENTURE expenses are bogus. Finally, he strongly relied upon the order of the ld. AO.

On perusal of the facts and material brought on record, we find merits in the contention raised by the ld. Counsel for the assessee, because here in this case as per the seized report substantial amount of Rs.379.52 Crores were budgeted by the assessee at the beginning of the project and amount of Rs.14.37 Crores have been mentioned as contingency expenditure to be incurred in future. Any contingency expenses which is likely to be incurred in future or if budget is prepared for a particular project for which any contingency expenses are estimated at the beginning of the project, same cannot be held to be a bogus expenditure already incurred. Even from the statement of Shri Madhusoodanan which has been heavily replied upon by the ld. AO, he has categorically stated that these contingency expenses are essential expenses that could not have been foreseen while filing the tender bid because there are certain expenses which come at the time of implementing the project. In the CTC report there is a column of filing tender summary which contains expenses budgeted at the beginning of the project and contingency and design expenses are also estimated at beginning of the project. The ld. AR has also pointed out that contract for technical services were awarded on different dates which are subsequent to the date of furnishing of final tender summary column. and others CEC-LTD CEM TPL JOINT VENTURE 52. Another important fact is that ld. AO himself has not doubted the entire Rs.31,544.66 lacs as bogus expenditure. He has also held that out of said expenditure, amount of Rs.2465.71 lakhs is genuine expenses out of the above amount and this amount has been allowed by the ld. AO as it represents the payment made to JV partners / related entities, therefore, the entire premise that amount mentioned as contingency expenses as bogus is self-contradictory.

It has been further brought on record that the statement of employees which had been heavily relied upon by the AO were retracted. The ld. AO had called these employees for cross examination and has re-examined these employees during the course of the assessment proceedings. Ld. AO himself has noted that during the course of such cross examination / re- examination, when employees have stood by their retraction, but thereafter, no further questions have been asked during or after the re-examination. All these retractions were made immediately after the date of statements and submitted that the statement of Shri Montra was recorded on 27/10/2021 and 28/10/2021. A copy of the statement was requested on 02/11/2021 which was provided on 08/11/2021. The retraction was made immediately thereafter on 12/11/2021. These dates have been made available to the A.O. also during the course of re-examination of Shri Montra on 15/12/2022. The facts in respect of the retraction of Shri Madhusoodanan are also similar. Thus, once the statements which have been retracted cannot be used against the assessee. and others CEC-LTD CEM TPL JOINT VENTURE 54. Here the entire substratum of the addition built by the ld. AO stands on the statement given by the employees which has been retracted, therefore, same cannot be used against assessee and is no longer remains the basis for drawing any adverse inference. The reason being ld. AO himself has cross examined / re-examined these employees after retraction and nothing adverse has been brought on record by the ld. AO. Accordingly, he cannot rely upon original submission which stands retracted and further re-examined by the ld. AO.

Before the authorities below and also before us various evidences have been produced by the assessee in support of genuineness of the expenditure which are being in several volumes before us in the paper book. These documents are in support of the purchase/sub-contract includes quotation received from the party, comparison of quotations, work order, approval note, invoice along with summary of work done etc., Further, it is also a matter of record that some of the parties have replied to the notice issued by the ld. AO u/s. 133(6) and the copies of said replies were also placed in the paper book on which our attention was drawn.

From the perusal of these replies it has been stated that they have confirmed about the work done and also the amount paid. As regards non compliance by the other parties to the notice issued by the Assessing Officer u/s 133(6) of the Act, the same cannot be held against assessee when assessee has submitted complete details in connection with such parties. and others CEC-LTD CEM TPL JOINT VENTURE 57. Ld. Counsel had also submitted that one of the allegation that SOP has not been followed in case of some expenses, the same has been stated to be on account of various reasons because at times the nature of work demands immediate decision which leads to such non-compliance. We agree with such contention because looking to the nature of the project and huge contract work, certain urgent expenses are incurred on immediate basis for which there could be the cases where SOP may not be or could not be followed. Further, as far as temporary work is concerned, SOP is not required to be followed as vendor approval is not required in such cases. The assessee has duly maintained details like PAN, statutory registration etc. in all cases which was submitted to ld. AO also. Non-compliance of SOP is merely an internal procedure to ensure internal controls and the same cannot be held against assessee by concluding that such expenses are non-genuine in nature. Therefore, conclusion drawn by the ld. AO on the basis of his observation of not following the SOP with respect to certain expanses cannot be upheld.

Another important thing which has to be kept in mind that all these expenses and the payments and the details are subject to audit by Chartered Accountant firms and no discrepancies have been pointed out by the Auditors. Further all these payments have been incurred through account payee cheques and not a single payment has been made in cash or by way of any other mode of payment.

In Ground No.3 in the grounds of appeal in A.Y.2018-19, the Revenue has challenged the deletion by the ld. CIT(A) of disallowance of Rs.44,71,31,287/- being fee for technical services made by the ld. AO.

Partner Fee - ITD 1905.71 Allowed by the AO himself in the assessment 3. Partner Fee - TPL 560.00 proceedings. Total 21,890.29 Quantum of Fees for Technical Services as per seized material Rs. 194,24,57,853 (Rs. 19,424.58 Lakhs) and additionally Rs. 2,68,98,620/- (pertaining to post seized material period) has been added by AO in A.Y. 2022-23, aggregating to total disallowance of Rs. 196,93,56,473/-.

The break-up of disallowance made by the ld. AO in AY 2018-19, 2019-20, 2021-22 and 2022-23 are as under: AY Fees for technical services 2018-19 44,71,31,287 2019-20 33,79,21,470 2021-22 68,83,36,085

The ld. CIT(A) had decided this issue in favour of the assessee in all the years and has deleted the entire disallowance made by the ld. AO and accordingly, Revenue has preferred an appeal against the order of the ld. CIT(A).

The brief facts qua the issue are that the assessee was awarded metro project by MMRCL for a contract value of Rs. 2,830 10 crores. As per the MMRCL contract, the life of the civil engineering structure of the project should be 120 years. The contract is the first underground metro line in Mumbai connecting the business district of Cuffe Parade in the extreme south to SEEPZ in the north central. This railway line connects key locations like Nariman Point, CSMT, Dadar, Worli and domestic and international terminal of Airport. The contract was of sizeable magnitude which required specialised technical expertise related to designing, drawing, tunneling work, architectural work, station construction, mechanical, electrical and plumbing work (MEP), quality assurance, methodology and other related work. The assessee was awarded Mumbai Metro Line 3 package 4, running through the neighbourhood of Siddhi Vinayak temple, Dadar station and Mahim.

In order to ensure that the structure do not impact or damage the existing buildings, existing structures, etc. which if it were to happen would lead to loss of lives and dent on the and others CEC-LTD CEM TPL JOINT VENTURE goodwill or reputation of the assessee and its JV partners, the assessee recognize the need to entail additional expertise advice for the purpose of executing the project in a timely and efficient manner. Accordingly, the assessee entered into technical service agreement/work contracts with its JV partners and its related entities as they had relevant expertise viz i) Continental Engineering Corporation, ii) Tata Projects Limited iii) ITD Cem India Joint Venture, iv) ITD ITD Cem Joint Venture and v) CCECC-TPL JV. The assessee paid fees for technical services to them, the details of which are given at page no. 86 of the paper book for AY 2017-18.

The ld. AO based on the statement of Mr. Arbind Kumar Rai, has alleged that the Assessee has entered into various internal arrangements termed as Technical Service Agreements' with its JV partners to divert its own profit, although supposedly no technical services of any kind were rendered to the assessee JV. Based on the same, the AO has alleged that the Assessee has entered into a technical service agreement with Continental Engineering Corporation ('CEC) which has retired from the active partnership of the Assessee JV and amount paid to CEC by way of Technical Service Fees are claimed as allowable revenue expenses by the Assessee.

Further, the ld. AO has relied upon the statement of Shri Madhusoodanan P.M, Deputy General Manager, Commercial, recorded on 28.10.2021, wherein he has stated that although employees of the organisation prepares the work orders and he and others CEC-LTD CEM TPL JOINT VENTURE signs these work orders in the "checked by" category but he is not aware about the nature of services being provided by the JV partners or related entities. The ld.AO has relied on statement of Shri Montra Ngamsa Ngar dated 27/10/2021 and 28.10.2021 wherein he has stated that he is unaware about the services rendered by the CEC.

The ld.AO has also relied on the statement of Shri Arbind Kumar Rai recorded on 28/10/2021 wherein Shri Arbind Kumar Rai has claimed that the "Technical Services" were provided by CEC as part of their interaction during the quarterly board meeting and has also submitted a copy of the minutes of the said board meetings. However, the AO has observed that the issues discussed in the said minutes of the board meetings were mostly around financial matters, tax and GST, approval of financial statements etc. The ld. AO has also alleged that the RA bill is not signed or checked by any member of the design team.

The ld. AO has therefore concluded that the payments for FTS are nothing but mere diversion of income. The ld.AO has stated in the assessment order that the Assessee has failed to produce the following details: "6.7 The submission filed by the assessee has been considered but not found tenable due to following reasons (a). The assessee has not submitted documentary evidence of communication in respect of technical services. The communication details filed by the assessee is related to general work.

The ld.AO has further stated that notices u/s 133(6) were issued to parties to which payments for FTS has been made and the parties have replied. The ld. AO has pointed out that certain details were not submitted by these parties in their replies. The ld. AO has also disregarded the retraction filed by Shri Madhusoodanan P.M and Shri Montra Ngamsa Ngar.

The final show cause notice was issued by ld.AO on 24.03.2022 which was duly replied by the Assessee submitting all the necessary documents and details relating to FTS payments.

In his conclusion paragraph, he has reiterated that the Assessee has not submitted the necessary documents and details related to FTS payment and that the complete details are and others CEC-LTD CEM TPL JOINT VENTURE not submitted by the parties in response to notices issued u/s 133(6) of the Act Accordingly, he has disallowed the entire expenses claimed towards fees for technical services.

Before the ld. CIT (A) assessee submitted that all the necessary documents and details relating to FTS expenses were submitted before the AO during assessment proceedings and also before ld. CIT (A). Reference was made, to the following details and documents: i. Service agreement between Assessee and Technical Service providers; ii. Summary of bills for FTS, iii. Work Orders; iv. Invoice copies on sample basis; v. Scope of service with each Technical Service providers; vi. Name of key persons involved; vii. Minutes of meetings and correspondence between Assessee and Technical Service Providers; viii. Detailed summary of design which were reviewed and approved by the Technical Service Providers; ix. Affidavit of persons of each entity stating work done by them and role played on behalf of Technical Service Providers.

It was also submitted before the Ld. CIT(A) that all the technical service providers have responded to the notice issued u/s 133(6) to them. Further, the discrepancies pointed out by and others CEC-LTD CEM TPL JOINT VENTURE the ld.AO in the show cause notice were incorrect with regards to non-submission of details as the parties have submitted all the details. Most of these details were also submitted by the assessee in its reply during the assessment proceeding dated 14/12/2022.

It was also submitted to the CIT (A) that work orders were issued to each of the parties and they executed work in accordance with the scope defined in the respective agreement and further detailed in the work order. Bills were raised on a regular basis in accordance with the work order. Every tax invoice raised is accompanied by the supporting, demonstrating services rendered by each of them, which are all part of impounded documents found during survey proceedings. Each technical service provider is a leading expert, and its personnel have knowledge which is highly specialised and not otherwise available with the Assessee. Technical consultancy is important at every level and more so, at design level, thereby resulting in minimum review points/rejections by the relevant approving authority. This also ensures timely execution of project.

After considering submission made by the assessee and observations made by the assessing officer in the assessment order, the CIT(A) has decided the issue in favour of the assessee offering following reasoning: i. Mr. Montra in his statement has clearly delineated role of each JV partner in answer to question no 10. In his replies to question no. 16 to 23 dated 27/10/2021, he has professed ignorance and others CEC-LTD CEM TPL JOINT VENTURE about the presence of documents or other evidences, but has not made any averment that the services were not rendered at all. ii. The assessee has been awarded Mumbai Metro Line 3 package 4, running through the neighbourhood of Siddhivinayak temple, Dadar station and Mahım under a competitive bidding process by the Mumbai Metro Rail Corporation Limited for contract value of Rs 2,830 crores. A huge infrastructure project is being executed by the assessee for which 3 reputed entities have come together to form a Joint Venture It is evident that they have pooled in their expertise for execution of this project. iii. The assessee has also furnished exhaustive documentation including 1) agreements ii) process flow of design i) summary of bills iv) work orders v) sample invoices vi) sample minutes of meeting with each of these parties and vii) correspondences exchanged with the technical service providers on sample basis iv. The assessee has therefore furnished adequate evidences in support of payments to its own joint venture parties and the balance of convenience therefore lies in favour of the assessee for allowability of these expenses. Accordingly, entire expenses claimed towards FTS payment is allowed by the CIT (A).

Before us ld. Counsel submitted that all the necessary documentary evidences in support of fees for technical services paid to JV Partners and related entities were submitted both before the ld. AO and ld. CIT(A) and also before us in the paper book Volume 2,3 & 4 for A.Y.2018-19. From the perusal of these and others CEC-LTD CEM TPL JOINT VENTURE documents it can be seen that these are evidences relating to; (i) service agreement between assessee and technical service provider (ii) details of fees paid (iii) work order on sample basis (iv) invoices along with RA bills (v) affidavits of employees (vi) correspondence with CEC on sample basis (vii) minutes of the meetings held between representatives of the assessee and technical service provider (viii) extracts of designs reviewed by the technical service provider on sample basis (ix) Form 3CEB filed wherein assessee has reported international transaction (FTS payment) carried out with CEC for which no T. P. adjustment has been made and (x) responses filed by the technical service provider along with all supporting documents in response to notice issued u/s. 133(6) of the Act.

In so far as allegation raised by the ld. AO in the assessment order, the ld. Counsel submitted that same are incorrect and he has given his point wise rebuttal to various allegations made by the ld. AO which are as under:- i. The allegation of AO: Statement of Mr. Arbind Kumar Rai relied upon by the AO stating that FTS payment is made only for diversion of income. ii. Rebuttal: Mr. Arbind Kumar Rai's statement relied upon by the Ld AO is infact in favour of appellant wherein he has confirmed the role of all parties to whom fees are paid. The Ld. AO has misconstrued the statement. and others CEC-LTD CEM TPL JOINT VENTURE iii. The allegation of AO: The R.A bill raised for 'Professional fees for Technical Services" for MM3-CBS-UGC-04 was not signed or checked by any member of the design team. iv. Rebuttal: The AO has failed to appreciate the fact that the technical team is not responsible for preparing and checking the R.A bills and none of R A bills are signed by technical team members. iii. The allegation of AO: Failed to provide supporting documents for actual services taken and delivery of services pertaining to the said professional services. Rebuttal: All documentary evidence were submitted before the Ld. AO during the assessment proceedings. iv. The allegation of AO: The communication filed by the assessee is related to general work. Rebuttal: The communications submitted by Appellant pertains specifically to design and are not generic in nature. v. The allegation of AO: Non-submission of documentary evidence in respect of actual services taken and actual delivery of work related to technical services. Rebuttal: Details such are drawings, communication containing inputs, discussion in minutes of meetings etc were duly submitted to the Ld AO. vi. The allegation of AO: The assessee has failed to produce any communication between assessee and parties of technical services to ascertain the actual delivery of work and others CEC-LTD CEM TPL JOINT VENTURE Rebuttal: Correspondence and minutes of the meetings were submitted. The Ld. AO has not found out any defect documents submitted but has only stated that documents are not submitted which is incorrect. vii. The allegation of AO: Non-submission of details to ascertain the actual manpower involved in performing services and nature of services provided by them. Rebuttal: Details of manpower and affidavits of key employees were duly submitted to the AO. viii. The allegation of AO: Non-submissions of details about the personnel of the assessee with whom they have interacted for providing services. Rebuttal: Minutes of the meeting contains all details of representatives from the side of appellant as well as technical service provider.

As regards various shortcomings pointed out by the ld. AO in the reply to notice u/s. 133(6) filed by the parties to whom fees for technical services have been paid by the assessee, ld. Counsel submitted that these so called short comings pointed out by the ld. AO are non-existing looking to the overall documentary evidences submitted by the parties.

On the other hand ld. DR after referring to the various observations of the ld. AO as noted above strongly relied upon his various findings and reasoning given in the impugned order. and others CEC-LTD CEM TPL JOINT VENTURE 85. We have heard rival submissions and also perused the relevant finding given in the impugned orders. One of the basis for drawing adverse inference by the ld. AO is based on statement of Shri Arbind Kumar Rai, wherein the ld. AO has alleged that assessee has entered into various internal arrangements termed as technical service agreements with its JV partners to divert its own profit and in fact no technical services of any kind were rendered to the assessee JV. First of all from the perusal of the statements it is seen that, in fact it supports the case of the assessee, because he has confirmed the role of all the parties to whom these are paid. In the kind of project undertaken by the assessee, the technical services are very much essential for the purpose of execution of the Metro Railway project. It cannot be presumed as done by the ld. AO that assessee has not availed such technical services and the assessee has not incurred any expenditure. While incurring the expenditure, assessee has also paid substantial service tax @15% and GST @18% on the invoice amount. Ld.AO cannot ignore this fact.

Apart from that, ld. AO has also held that the RA bill raised for professional fees for technical services for a particular project was not signed or checked by any member of the design team which has been explained by the ld. Counsel that technical team is not responsible for preparing and checking the RA bills and none of the RA bills are signed by the technical team members. In fact assessee had filed voluminous documents in support of rendering of the technical services like service agreement and others CEC-LTD CEM TPL JOINT VENTURE between assessee and technical service providers; summary of bills for FTS; work orders executed; invoice copies on central basis, scope of service for each technical service providers alongwith name of the key persons involved; Minutes of Meeting and correspondence between assessee and technical service providers; detailed summary of business which were resumed and approved by the technical service provider. All these documents and evidences goes to prove rendering of technical services and payment thereof cannot be brushed aside. In so far as various allegations, same has been rebutted with proper explanation backed with documentary evidences and therefore, the allegations of the ld. AO cannot be sustained because none of these allegations has any substance in line of the documents and other evidences which have been filed. If assessee has undertaken huge project of Mumbai Metro lines for the contract value of Rs.2830 Crores and if such huge project is being executed by the assessee for which three reputed entities have come together to form a joint venture only to pull their expertise for the execution of this project, then it cannot be held that no FTS might have been paid at all as held by the AO. Thus, the payment to the JV projects on account of technical services cannot be disallowed merely on the grounds stated by the ld. AO. Once the assessee has furnished exhaustive documents as noted above, which has been duly noted and appreciated by the ld. CIT (A) based on which he has deleted the addition, the same cannot be tinkered with. Thus, we uphold the order of the ld CIT (A) in deleting the addition of the expenditure on account of fees for and others CEC-LTD CEM TPL JOINT VENTURE technical services and accordingly, the grounds raised