M/s T.C.V. Engineering Limited, CHENNAI V. DCIT, CHENNAI

ITSSA 128/CHNY/2003

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1661 (ITAT-CHENNAI)
• Duration Of Justice: 16 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 30-06-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SENTHIL KUMAR SR
• Assessee Lawyers: SRINIRANJANI
• Keywords: Income from undisclosed sources; Search and seizure; Additional evidence; Block assessment; Set aside
• Section: 250; 158BC; 72; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , ! , '#$ # % BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.S.S. NO. 128/CHNY/2003 BLOCK PERIOD : 1990-2000 TCV ENGINEERING LIMITED, 25, PARAMESHWARI NAGAR, 1 ST CROSS STREET, ADAYAR, CHENNAI 600 020. [PAN: AAACT 2709E] VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II. CHENNAI. ( / APPELLANT) ( / RESPONDENT) &'() / APPELLANT BY : MS. SRINIRANJANI, ADVOCATE +,&'() / RESPONDENT BY : SHRI. T. SENTHIL KUMAR, SR. STANDING COUNSEL (-$ /DATE OF HEARING : 16.09.2019 ./0 (-$ /DATE OF PRONOUNCEMENT : 11.12.2019 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-II, CHENNAI IN ITA N O. 123/2002-03 DATED 26.02.2003 FOR THE BLOCK PERIOD 1.4.1989 TO 22.3.20 00. 2. M/S. TCV ENGINEERING LIMITED, THE ASSESSEE, IS E NGAGED IN THE BUSINESS OF EARTH MOVING. SEARCH AND SEIZURE OPERATIONS, U/S. 132 , WERE CONDUCTED IN THE ASSESSEES BUSINESS PREMISES ON 22.03.2000AND IT WA S CONCLUDED ON :-2-: ITSS NO.128/CHNY/2003 26.06.2000. IN RESPONSE TO THE NOTICE ISSUED U/S. 158BC , THE ASSESSEE FILED ITS BLOCK RETURN ON 4.10.2001 DECLARING AN UNDISCLOSED AT RS. NIL. THE BLOCK ASSESSMENT PROCEEDINGS WERE FINALISED ON 28.6.2002 BY DETERMINING THE TOTAL UNDISCLOSED INCOME AT RS. 1,22,89,0201-. AGGRIEVED ON CERTAIN ADDITIONS , THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), OUT OF WHICH THE LD CIT(A) UPHELD THE DISALLOWANCE OF PAYMENTS MADE TO S/SHRI JAYASEELAN, LNBARAJ AND SELVAM AGGREGATING TO RS. 35,28,192/-. AGGRIEVED AGAINST T HAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD AR SUBMITTED THAT THE SUBCONTRACT WORK OF EARTH FILLING FOR NALAMBUR SITE WAS GIVEN TO M/S. JS AGENCY. INITIALL Y, THE WORK WAS ENTRUSTED ONLY TO J.S. AGENCY. THE J.S. AGENCY SUBCONTRACTED THE WORK TO M/S. INBARAJ AND SELVAM IN THEIR INDIVIDUAL CAPACITY. THE THREE PAR TIES HAVE ARRIVED AT A SETTLEMENT BETWEEN THEM AND AGREED THAT THEY SHALL DO THE WORK SEPARATELY IN THEIR INDIVIDUAL CAPACITY AND MR. JAYASEELAN SHALL BE DOING THE SAME IN THE NAME OF J.S. AGENCY. ACCORDING TO THEIR REQUEST, THE AS SESSEE MADE THE IMPUGNED PAYMENTS INDIVIDUALLY AND THEY EXECUTED THE WORK IN DIVIDUALLY. ALL THE THREE PARTIES WERE PRODUCED. THE PARTIES CONFIRMED THAT THEY HAVE RECEIVED THE PAYMENT AND HAVE DONE WORK FOR THE ASSESSEE COMPANY INDIVIDUALLY. THE TOTAL PAYMENTS MADE TO THEM ARE RS. 1,00,12,023. HOWEVER , THE ASSESSING OFFICER CONTENDED THAT, SINCE SOME OF THE VOUCHERS OF J.S. AGENCY WAS SIGNED BY MR. SLEVAM AND INBARAJ THE TRANSACTION HAS TO BE VIEWED AS ONE. THE ASSESSING OFFICER ON HIS OWN HAS RESTRICTED THE EXPENSES (PUT TING ALL THE THREE TO TOGETHER) :-3-: ITSS NO.128/CHNY/2003 ONLY TO THE EXTENT OF THE PART BILLS RAISED BY J.S. AGENCY AMOUNTING TO RS. 64,83,831/- AND HAS ADDED THE BALANCE RS. 35,28,19 2/- AS UNDISCLOSED INCOME. THE LD.AR PLEADED THAT THE LD.CIT(A) ERRED IN UPHOL DING THE ACTION OF THE AO WITHOUT APPRECIATING THE FACT AND THE LAW THAT THE DISALLOWANCE OF EXPENSES CANNOT BE TREATED AS ASSESSMENT OF AN UNDISCLOSED INCOME WITHIN THE SCOPE OF SECTION 158 BA, AND IN THIS REGARD RELIED ON THE C ASE LAWS CIT VS. RAVIKANTH JAIN 250 ITR 141, D.A. PATEL VS. DCIT 72 ITD 340, ESTEEM INTRA PART SERVICES PVT. LTD. VS.ACIT 72 ITD 228, CHANDER MOHAN METHA VS. DC IT 65 TTJ 327, SUNDAR AGENCIES VS. DCIT 63 ITD 245 AND SMT. SHEELA AGARWA L VS. DCIT 106 TAXMAN 227. THEREFORE, IT WAS PRAYED THAT THE ASSESSMENT S HOULD BE SET ASIDE AS THE SAME IS ULTRA VIRES THE ACT AND BEYOND THE JURISDIC TION OF THE BLOCK ASSESSMENT PROCEEDINGS. FURTHER, THE LD.AR SUBMITTED THAT THE AO IS WRONG IN ASSESSING THE GENUINE PAYMENT AS AN UNDISCLOSED INCOME. IN ORDER TO SUBSTANTIATE THE ASSESSEES CLAIM, THE LD AR PLEADED THAT THE INVOLV ED PARTIES WERE PRODUCED AND WERE EXAMINED ON OATH. THE PARTIES INDIVIDUALLY HA VE ACCEPTED THE TRANSACTION AND HAVE CONFIRMED THAT THEY HAVE DONE THE WORK FOR THE ASSESSEE. THEREFORE, THE AO ERRED IN DISALLOWING THE PART BILL, WRONGLY CLUBBED THE TRANSACTION OF THREE PARTIES AS ONE AND THE ENTIRE ASSESSMENT IS DONE BA SED ON SURMISE. IN VIEW OF THE ABOVE, THE LD AR PLEADED THAT THE ASSESSEES AP PEAL BE ALLOWED. 4. PER CONTRA, THE SR. STANDING COUNSEL SUBMITTED T HAT DURING THE SEARCH AND SEIZURE OPERATIONS, CERTAIN CASH VOUCHERS WERE FOUN D AND SEIZED , WHICH DID NOT BEAR THE SIGNATURE OF THE PAYEE. WHEN THEY WERE SHOW N TO THE DIRECTOR OF THE ASSESSE COMPANY, MR MOHAN, AND QUESTIONED ABOUT THE IR GENUINENESS , HE :-4-: ITSS NO.128/CHNY/2003 DEPOSED ON 22.3.2000 THAT THE EXPENSES RELATING TO THESE VOUCHERS WERE DEBITED IN THE COMPANY ACCOUNTS, AMOUNTS WERE WITHD RAWN BY CASH , SUCH CASH WAS TAKEN BY HIM AND UTILISED BY HIM FOR SOME OTHER PAYMENTS. IN THIS REGARD, HE HAS OFFERED RS. 87 LAKHSAS AN UNDISCLOSED INCOME . HOWEVER, LATER, ON 06.12.2001, HE HAS RETRACTED FROM THE ABOVE ADMISSI ON. THEREFORE, DURING THE ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSE E , INTER ALIA, TO PROVE THE GENUINENESS OF THE EXPENDITURE RECORDED IN THE UNSI GNED VOUCHERS. WITH REGARD TO THE ISSUE UNDER CONSIDERATION IN THIS APPEAL, FR OM THE SEIZED BOOKS OF ACCOUNT AND CASH VOUCHERS, THE AO NOTICED THAT FOLLOWING TRANSACTIONS WERE RECORDED IN RESPECT OF THE 3 PARTIES FOR THE YEAR 1996-97 . NAME BILL RAISED PAYMENT CLAIMED UNSIGNED VOUCHERS VOUCHERS PRODUCED J.S. AGENCY 34,57,206 32,83,308 1,19630 SELVAM 35,56,275 35,56,275 34,31,875 33,21,927 INBARAJ 29,20,000 31,72,440 31,51,940 12,01,874 99,33,481 1,00,12,023 67,03,445 45,23,801 DURING THE SEARCH, IT WAS NOTICED THAT THE VOUCHERS IN THE NAME OF THE FOLLOWING PERSONS WERE NOT SIGNED. INBARAJ RS. 31,72,440/- SELVAM RS. 33,25,875/- 4.1 WHEN THE ASSESSEE WAS ASKED TO EXPLAIN, THE DIR ECTOR OF THE ASSESSEE, MR. MOHAN IN HIS SWORN DEPOSITION, AT THE TIME OF SEARC H OPERATIONS ON 22.3.2000, DEPOSED THAT THESE EXPENSES WERE DEBITED IN THE COM PANY ACCOUNTS, DRAWN BY CASH AND SUCH CASH WITHDRAWALS WERE TAKEN BY HIM TO MAKE SOME OTHER :-5-: ITSS NO.128/CHNY/2003 PAYMENTS. THE ASSESSEE HAS CLAIMED RS. 34,57,206/- AS AN EXPENDITURE IN THE NAME OF J. S. AGENCY IN THE BOOKS OF ACCOUNT. ON T HE SAME DATE, THE PROPRIETOR OF M/S J.S. AGENCY, MR. JAYASEELAN, WAS ALSO EXAMIN ED ON OATH. HE HAS DEPOSED THAT HE HAS DONE WORK FOR T.C.V. ENGINEERING LTD AT THE NOLAMBUR SITE AND RAISED BILL OF RS. 64,82,051/- AND HAS RECEIVED THE COMPLE TE PAYMENT. HE HAS PRODUCED THE COPIES OF THE BILLS AND FURTHER DEPOSED THAT HE ALONG WITH ONE SELVARAJ ALIAS SELVAM JOINTLY EXECUTED THE WORK, AND THAT SELVAM D ID NOT UNDERTAKE OR WORK SEPARATELY FOR THE T.C.V. ENGINEERING LTD. ONE INBA RAJ ALIAS INBARAJAN ALSO WORKED AS HIS SUPERVISOR DURING THE WORK AT NOLAMBU R. DURING THE SEARCH , IT WAS PUT TO MR. MOHAN, THAT THE COMPANY HAS RAISED CREDI T NOTES IN THE NAME OF J.S. AGENCY FOR ONLY RS. 34,57,206/- WHEREAS M/S J. S, A GENCY HAS RAISED BILLS FOR RS. 64,82,051/-. WHEN HIS EXPLANATION WAS CALLED FOR, MR. MOHAN DEPOSED THAT THE EXCESS AMOUNT OF RS. 30,25,000/- WAS PAID OUT OF TH E CASH WITHDRAWALS MADE BY HIM. 4.2 FROM THE DEPOSITION OF JEYASEELAN AND LNBARAJ R ECORDED AT THE TIME OF SEARCH OPERATIONS , IT COULD BE SEEN THE TOTAL WORK EXECUTED BY THEM WAS FOR RS.64,83,831 FOR WHICH BILLS WERE SUBMITTED. HOWEVE R, AT THE TIME OF THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSES SEE HAS CLAIMED PAYMENTSOF RS.1,00,12,029IN ITS BOOKS OF ACCOUNT. THEREFORE , THE A O PROPOSED TO ASSESS THE DIFFERENCE OF RS.35,28,192 ( 1,00,12,023 - 64,83,831 ) AS AN UNDISCLOSED INCOME OF THE ASSESSEE. ON 11-06 -2002, THE ASSESSEE PRODUCED ADDITIONAL EVIDENCE IN THE FORM OF VOUCHE RS FOR RS,45,23,801 ( RS.33,21,927 TO SELVAM AND RS.12,01,874 TO INBARAJ ) AND HAS RELIED ON THE :-6-: ITSS NO.128/CHNY/2003 STATEMENT OF THE PARTIES RECORDED ON 07.6.2002. THE AO AFTER EXAMINING THE STATEMENTS RECORDED AT THE TIME OF SEARCH , THE SEI ZED MATERIAL AND THE SUBSEQUENT STATEMENTS RECORDED FROM THE PARTIES ON 07.6.2002 AND ON EXAMINATION OF THE VOUCHERS PRODUCED AS AN ADDITI ONAL EVIDENCE IN SUPPORT OF THE ASSESSEES CLAIM ETC HELD , INTER ALIA , THAT THE GENUINENESS OF THESE VOUCHERS ARE IN DOUBT, THE ASSESSEE CONTENDED THAT THESE BI LLS WERE ONLY PART BILL BUT IT HAS NOT PRODUCED ANY EVIDENCE OF BILLS FOR THE BALA NCE AMOUNT CLAIMED AS AN EXPENDITURE IN THE BOOKS OF ACCOUNT, THE CONTENTION THAT THE NAME OF M/S. J.S. AGENCY WAS RECORDED ONLY FOR REFERENCE HAS NO MERIT S BECAUSE THE SEIZED VOUCHERS ARE IN THE NAME OF MR. LNBARAJ AND MR. SEL VAM BUT THEY DO NOT HAVE THEIR SIGNATURE .THUS, THE ASSESSEE FAILED TO PROVE THAT THE PAYMENTS MADE TO SELVAM AND INBARAJ AT RS RS.45,23,801 . THE ORAL EVIDENCE ADDUCED BY THESE PARTIES HAS BEEN VARIED SUBSEQUENTLY. HENCE,THE AO HELD THAT CREDENCE COULD BE GIVEN TO THE EXTENT THAT THEY ARE CORROBORATED BY O THER EVIDENCE UNEARTHED AT THE TIME OF SEARCH OPERATIONS ETC. THEREAFTER, TH E AO EVALUATED THE CONTEMPORANEOUS EVIDENCES IN THE FORM OF BILLS, RA ISED TO THE TUNE OF RS. 64,83,831, AND FOUND THAT THEY BORNE THE STAMP OF TCV ENGINEERING LTD WITH THE NOTE THAT THE BILL HAS BEEN PASSED AND THEY WER E WITH THE SIGNATURE OF THE SITE ENGINEERAND HENCE CONCLUDED THAT ALL OF THEM RENDER CREDENCE TO SUCH BILLS, THE STATEMENT OF MR. JAYASEELAN AND MR. INBARAJ ALS O CORROBORATED SUCH CONCLUSION AND THESE BILLS ALSO SHOWN THAT THE STAT EMENT OF MR. SELVAM IS NOT RELIABLE. THEREFORE, OUT OF THE CLAIM OF PAYMENT OF RS.1,00,12,023,THE AO INFERRED THAT ONLY RS. 64,83,831 WAS PAID AND THE B ALANCE SUM OF :-7-: ITSS NO.128/CHNY/2003 RS.35,28,192WAS AN INFLATION OF EXPENDITURE, WHICH HE DISALLOWED AND ASSESSED AS AN UNDISCLOSED INCOME OF THE ASSESSEE FOR THE A. Y 97-98. AGGRIEVED , THE ASSESSEE FILED AN APPEAL AND THE LD CIT(A) HELD THA T EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEES COUNSEL COULD NOT LEAD ANY FURTHER EVIDENCE TO SUBSTANTIATE THE CLAIMS OF PAYMENT OF R S. 35,28,182/- AND HENCE, UPHELD THE ACTION OF THE ASSESSING OFFICER IN ASSES SING THE SAME AS AN UNDISCLOSED INCOME . THE LD SR COUNSEL INVITING OU R ATTENTION TO THE COPIES OF THE SWORN STATEMENTS IN THE PAPER BOOK AND RELEVAN T PORTION OF THE ORDERS OF THE LOWER AUTHORITIES SUPPORTED THEM. FURTHER, HE SUBMITTED THAT THE ASSESSEE HAS NOT LAID ANY MATERIAL TO DISLODGE THE FINDINGS RECORDED BY THE AO AS WELL AS THE LD CIT(A) BEFORE THIS HONBLE TRIBUNAL ALSO,THE REFORE, THE LD SR COUNSEL PLEADED TO DISMISS THE APPEAL ON THE QUANTUM. WITH R EGARD TO THE ASSESSEES CHALLENGE THAT THE IMPUGNED ITEMS DO NOT FALL U NDER UNDISCLOSED INCOME WITHIN THE SCOPE OF S 158 BA , THE LD SR COUNSEL IN VITED OUR ATTENTION TO THE MANNER AND METHOD IN WHICH THE UNACCOUNTED INCOME W AS DETECTED BY THE REVENUE AND ADMITTED BY THE ASSESSEE AT THE TIME O F SEARCH OPERATIONS, SUPRA. THOUGH, THE ASSESSEE SUBSEQUENTLY RETRACTED, BUT W HEN THE AO SOUGHT THE ASSESSEE TO PROVE GENUINENESS OF CERTAIN EXPENDITUR E, THE ASSESSEE ADMITTED RS. 47,67,030 AS AN UNDISCLOSED INCOME BY ITS LETT ER DATED 27-06-2002 AND IT REQUESTED THE AO THAT THE CASH AVAILABLE OF RS.47, 67,030 ARISING OUT OF SUCH ADMITTED UNDISCLOSED INCOME, BE TELESCOPED FOR THE EXPENDITURE NOTICED IN THE CASE OF MR.MOHAN (DIRECTOR OF THE ASSESSEE COMPANY) OF RS.38,68,337, AND INVESTMENTS IN THE NAME OF GEETHALAKSHMI, (W/O MOHA N) OF RS.4,67,216 AND :-8-: ITSS NO.128/CHNY/2003 SANJAY MOHAN (S/O MOHAN) OF RS.4,31,469/-. IN THE BLOCK ASSESSMENT, THE AO MADE THE CORRESPONDING ADDITIONS, WHICH WERE NOT DI SPUTED BY THE ASSESSSEE BEFORE THE LD.CIT(A), THEREFORE, THEY HAVE ATTAINE D FINALITY. THUS, IT IS CLEAR THAT BASED ON THE MATERIAL UNEARTHED BY THE REVENUE DUR ING SEARCH OPERATIONS IT WAS FOUND THAT CERTAIN EXPENSES OR DEDUCTION OR ALL OWANCE CLAIMED BY THE ASSESSSEE WAS FOUND TO BE FALSE AND PART OF THE COR RESPONDING EXPENSES OR DEDUCTION OR ALLOWANCE WERE ADMITTED TO BE SOURCES FOR THE EXPENDITURE UNEARTHED IN THE CASE OF MR. MOHAN (DIRECTOR OF TH E ASSESSEE COMPANY) OF RS.38,68,337, AND INVESTMENTS IN THE NAME OF GEETH ALAKSHMI, (W/O MOHAN) OF RS.4,67,216 AND SANJAY MOHAN (S/O MOHAN) OF RS.4,31 ,469/- FROM THE SAME SEARCH OPERATIONS. THEREFORE, THESE MATERIAL FALL W ITHIN THE SCOPE OF UNDISCLOSED INCOME U/S.158BA VIZ ANY INCOME BASED ON ANY ENTR Y IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHERE SUCH THIN G, ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSACTION REPRESENTS WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSES OF THIS ACT OR ANY EXPENSE, DEDUCTION OR ALLOWANCE CLAIMED UNDER THIS ACT WHICH IS FOUND TO BE FALSE. THEREFORE, THE ASSESSEES P LEA THAT THE IMPUGNED TRANSACTIONS CANNOT FALL UNDER UNDISCLOSED INCOME U/S.158BA IS NOT TENABLE. SINCE THE ASSESSEE HAS NOT PROVED THAT THE IMPUGNED PAYMENTS WERE GENUINE PAYMENTS, THE DISALLOWANCE MADE IS JUSTIFIED AND HE NCE THE LD. SR. STANDING COUNSEL PLEADED TO DISMISS THE ASSESSEES APPEAL. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. IT IS CLEAR FROM THE ABOVE, THAT DURING THE SEARCH AND SEIZURE :-9-: ITSS NO.128/CHNY/2003 OPERATIONS, CERTAIN CASH VOUCHERS FOR EXPENSES WERE FOUND AND SEIZED WHICH DID NOT BEAR THE SIGNATURE OF THE PAYEE. WHEN THEY WERE SHOWN TO THE DIRECTOR OF THE ASSESSE COMPANY, MR MOHAN, AND QUESTIONED ABOU T THEIR GENUINENESS, HE DEPOSED ON 22.3.2000 THAT THE EXPENSES RELATING T O THESE VOUCHERS WERE DEBITED IN THE COMPANY ACCOUNTS, AMOUNTS WERE WITH DRAWN BY CASH , SUCH CASH WAS TAKEN BY HIM AND UTILISED BY HIM FOR SOME OTHER PAYMENTS. IN THIS REGARD, HE HAS OFFERED RS. 87 LAKHS AS AN UNDISCLOSED INCOM E. THOUGH, THE ASSESSEE SUBSEQUENTLY RETRACTED, BUT WHEN THE AO SOUGHT THE ASSESSEE TO PROVE GENUINENESS OF CERTAIN EXPENDITURE DURING THE ASSES SMENT PROCEEDINGS , THE ASSESSEE BY ITS LETTER DATED 27-06-2002 ADMITTED RS. 47,67,030/- AS AN UNDISCLOSED INCOME AND IT REQUESTED THE A O THAT THE CASH AVAILABLE OUT OF SUCH ADMITTED UNDISCLOSED INCOME OF RS.47,67,030/- , BE TELESCOPED TOWARDS THE EXPENDITURE UNEARTHED BY THE SEARCH OPERATIONS IN T HE CASE OF MR.MOHAN (DIRECTOR OF THE ASSESSEE COMPANY) OF RS.38,68,337, AND INVESTMENTS IN THE NAME OF GEETHALAKSHMI, (W/O MOHAN) OF RS.4,67,216 A ND SANJAY MOHAN (S/O MOHAN) OF RS.4,31,469/-. IN THE BLOCK ASSESSMENT M ADE, THE A O ASSESSED THE CORRESPONDING SUMS AS AN UNDISCLOSED INCOME , WHICH WERE NOT DISPUTED BY THE ASSESSSEE BEFORE THE LD. CIT(A). THEREFORE, THEY HAVE ATTAINED FINALITY AT THE ASSESSMENT STAGE ITSELF. THUS, IT IS CLEAR THAT BASED ON THE MATERIAL UNEARTHED BY THE REVENUE DURING THE SEARCH OPERATIONS, IT W AS FOUND THAT CERTAIN EXPENSES OR DEDUCTION OR ALLOWANCES CLAIMED BY THE ASSESSSEE WAS FOUND TO BE FALSE AND A PART OF SUCH EXPENSES OR DEDUCTION OR ALLOWANCES WERE ALSO ADMITTED TO BE SOURCES FOR THE EXPENDITURE UNEA RTHED FROM THE SAME SEARCH :-10-: ITSS NO.128/CHNY/2003 OPERATIONS IN THE CASES OF MR. MOHAN, MRS GEETHALAK SHMI, (W/O MOHAN) AND SANJAY MOHAN (S/O MOHAN). THEREFORE, THESE MATERIAL FALL WITHIN THE SCOPE OF UNDISCLOSED INCOME U/S.158BA VIZ ANY INCOME BASE D ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHER E SUCH THING, ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSACTION R EPRESENTS WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSES OF THIS ACT OR ANY EXPENSE, DEDUCTION OR A LLOWANCE CLAIMED UNDER THIS ACT WHICH IS FOUND TO BE FALSE. WHEN THE ASSESSEE ITSELF ADMITTED AN UNDISCLOSED INCOME BASED ON PART OF THE SEIZED MATE RIAL , WHICH HAD ATTAINED FINALITY, THEN , IT CAN NOT PLEAD THAT THE A DDITION MADE BASED ON THE OTHER PART OF THE SEIZED MATERIAL, WHICH WERE UNEARTHED IN THE SAME SEARCH AND SEIZURE OPERATIONS, WOULD NOT FALL AS AN UNDISCLOS ED INCOME WITHIN THE SCOPE OF SECTION 158 BA. IN VIEW OF THE ABOVE FACTS, THE CA SE LAWS RELIED ON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THIS CA SE. WITH REGARD TO THE GENUINENESS OF THE TRANSACTION WITH M/S. J S AGENCY , AS PLEADED BY THE LD. SR. STANDING COUNSEL, SUPRA, THE AO AFTER DUE CONSIDERA TION OF THE SEIZED MATERIAL, THE STATEMENTS RECORDED AT THE TIME OF SEARCH, THE STATEMENT RECORDED FROM THE PARTIES SUBSEQUENTLY AND ON DUE ANALYSIS OF THE ADD ITIONAL EVIDENCE PRODUCED BY THE ASSESSEE HAS CLEARLY RECORDED THE REASON AS TO WHY SUCH CLAIM CANNOT BE ACCEPTED AND HOW THE ASSESSEE HAS FAILED TO PROVE THAT THE IMPUGNED PAYMENT WAS MADE TO MR.SELVAM AND MR. INBARAJ. IT IS CLEAR FROM THE ORDER OF THE LD. CIT(A) THAT THE ASSESSEE HAS NOT LAID ANY MATERIAL ASSAILING THE FINDINGS RECORDED BY THE LD.AO AND HENCE, THE LD CIT(A) CONFIRMED THE IMPUGNED ADDITIONS. BEFORE :-11-: ITSS NO.128/CHNY/2003 US ALSO, THE ASSESSEE HAS NOT FILED ANY MATERIAL A SSAILING THE FINDINGS RECORDED BY THE LOWER AUTHORITIES. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES ON THE QUANTUM. THEREFORE, THE ASSESSEES CONTENTION THAT THE DISALLOWANCE OF EXPENSES MAD E BY THE AO CANNOT BE TREATED AS AN ASSESSMENT OF AN UNDISCLOSED INCOM E WITHIN THE SCOPE OF SECTION 158 BA, IS HELD AS UNTENABLE. THUS, ALL THE GROUNDS OF THE ASSESSE FAIL AND THEREFORE THE ASSESSEES APPEAL IS DISMISSED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED ON 11 TH DECEMBER, 2019 AT CHENNAI. SD/ - ( . ) (DUVVURU RL REDDY) ! /JUDICIAL MEMBER SD/ - ( '#$ ) (S. JAYARAMAN) %! /ACCOUNTANT MEMBER /CHENNAI, 1! /DATED: 11 TH DECEMBER, 2019 JPV 2(+-34540- /COPY TO: 1. &'/ APPELLANT 2. +,&' /RESPONDENT 3. 6- ) (/CIT(A) 4. 6- /CIT 5. 478+- /DR 6. 89: /GF