Shri Agrawal Helth & Education Society, Sagar Plaza, Bhopal V. Deputy Commissioner of Income Tax (Central-1), Bhopal

ITSSA 271/Ind/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2810 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-09-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 22-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers; Benefit of exemption; TDS
• Section: 11; 143(3); 153A; 234B; 12A; 250; 143(2); 13

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER (Conducted through Virtual Court) IT(SS)A No.271 to 273/Ind/2017 (AY: 2009-10 to 2011-12) ITA No. 677/Ind/2017 (AY: 2012-13) Shri Agrawal Health & Education Society, Sagar Plaza, Bhopal-462016 बनाम/ Vs. DCIT-Central-1 Bhopal (Appellant / Assessee) (Respondent / Revenue) PAN: AADAS0337G Assessee by Shri S.S. Deshpande, AR Revenue by Shri P. K. Mitra, CIT-DR Date of Hearing 06.09.2022 Date of Pronouncement 15.09.2022 आदेश / O R D E R Per Bench: Feeling aggrieved by a consolidated appeal-order dated 16.08.2017 of learned Commissioner of Income-Tax (Appeals)-3, Indore [“Ld. CIT(A)”], which in turn arises out of a consolidated assessment-order dated 28.03.2014 passed by learned DCIT, Central, Bhopal [“Ld. AO”], to the extent it concerns to Assessment-Year [“AY”] 2009-10 to 2011-12 framed u/s 153A read with section 143(3) of Income-tax Act, 1961 [“the act”] and AY 2012-13 framed u/s 143(3) of the act, the assessee has filed these four appeals. Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 2 of 14 2. The assessee has submitted revised grounds in all four appeals with the reasoning that certain mistakes in figures had crept into the grounds originally filed in Form No. 36. The revised grounds are admitted, taken on record and being adjudicated upon. 3. The grounds raised by assessee in different appeals are as under: A.Y. 2009-10 / IT(SS)A 271/Ind/2017: “1. That on the facts & in the circumstances of the case and in law, the assessment is bad in law and without jurisdiction hence be cancelled. 2. That on the facts & in the circumstances of the case and in law, the impugned assessment year is a non-abated assessment year & in absence of incriminating arterials, the assessment is bad in law and the additions sustained by the learned CIT(A) at Rs. 92 , 940.00 is unjustified and unsustainable in law and, therefore, the assessment be cancelled and the addition made be deleted. 3. That on the facts & in the circumstances of the case and in law, it be held that all the expenses claimed in the profit & loss account are genuine expenditure and no part of the expenditure is bogus expenditure as held by the learned lower authorities. The findings of the learned lower authorities that the appellant has claimed bogus sub- contractors expenses are wholly unjustified and unlawful hence such findings be quashed and the appellant be provided the relief for Rs. 92,940.00 (Rs. 40,928.00 + 52,012.00). 4. That on the facts & in the circumstances of the case and in law, the appellant had furnished return in the status of "AOP (Trusts) assessment made in the status of "SOCIETY II I which status do not find place in section 2(31) of the IT Act. The assessment thus made is invalid and without jurisdiction hence be cancelled. 5. That on the facts & in the circumstances of the case and in law, the levy of interest u/s.234A, 234B & 234C are unlawful and without jurisdiction and, therefore, be cancelled.” A.Y. 2010-11 / IT(SS)A 272/Ind/2017: “1. That on the facts & in the circumstances of the case and in law, the assessment is bad in law and without jurisdiction hence be cancelled. 2. That on the facts & in the circumstances of the case and in law, the impugned assessment year is a non-abated assessment year & in Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 3 of 14 absence of incriminating arterials, the assessment is bad in law and the additions sustained by the learned CIT(A) at Rs. 1,63,011.00 is unjustified and unsustainable in law and, therefore, the assessment be cancelled and the addition made be deleted. 3. That on the facts & in the circumstances of the case and in law, it be held that all the expenses claimed in the profit & loss account are genuine expenditure and no part of the expenditure is bogus expenditure as held by the learned lower authorities. The findings of the learned lower authorities that the appellant has claimed bogus sub- contractors expenses are wholly unjustified and unlawful hence such findings be quashed and the appellant be provided the relief for Rs. 1,63,011.00. 4. That on the facts & in the circumstances of the case and in law, the appellant had furnished return in the status of "AOP (Trusts) assessment made in the status of "SOCIETY II I which status do not find place in section 2(31) of the IT Act. The assessment thus made is invalid and without jurisdiction hence be cancelled. 5. That on the facts & in the circumstances of the case and in law, the levy of interest u/s.234A, 234B & 234C are unlawful and without jurisdiction and, therefore, be cancelled.” A.Y. 2011-12 / ITA(SS)A 273/Ind/2017: “1. That on the facts & in the circumstances of the case and in law, the assessment is bad in law and without jurisdiction hence be cancelled. 2. That on the facts & in the circumstances of the case and in law, the impugned assessment year is a non-abated assessment year & in absence of incriminating arterials, the assessment is bad in law and the additions sustained by the learned CIT (A) at Rs. 20,97,600.00 is unjustified and unsustainable in law and, therefore, the assessment be cancelled and the addition made be deleted. 3. That on the facts & in the circumstances of the case and in law, it be held that all the expenses claimed in the profit & loss account are genuine expenditure and no part of the expenditure is bogus expenditure as held by the learned lower authorities. The findings of the learned lower authorities that the appellant has claimed bogus sub- contractors expenses are wholly unjustified and unlawful hence such findings be quashed and the appellant be provided the relief for Rs. 20,97,600 (18,55,200 + 1,17,400 + 1,25,000/-. 4. That on the facts & in the circumstances of the case and in law, the appellant had furnished return in the status of "AOP (Trusts) assessment made in the status of "SOCIETY II I which status do not find Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 4 of 14 place in section 2(31) of the IT Act. The assessment thus made is invalid and without jurisdiction hence be cancelled. 5. That on the facts & in the circumstances of the case and in law, the levy of interest u/s.234A, 234B & 234C are unlawful and without jurisdiction and, therefore, be cancelled.” A.Y. 2012-13 / ITA 677/Ind/2017: “1. That on the facts & in the circumstances of the case and in law, the assessment is bad in law and without jurisdiction hence be cancelled. 2. That on the facts & in the circumstances of the case and in law, it be held that all the expenses claimed in the profit & loss account are genuine expenditure and no part of the expenditure is bogus expenditure as held by the learned lower authorities. The findings of the learned lower authorities that the appellant has claimed bogus sub- contractors expenses are wholly unjustified and unlawful hence such findings be quashed and the appellant be provided the relief for Rs. 30,34,498.00 (Rs. 29,81,973.00 + 52,525.00). 3. That on the facts & in the circumstances of the case and in law, the appellant had furnished return in the status of "AOP (Trusts) assessment made in the status of "SOCIETY II I which status do not find place in section 2(31) of the IT Act. The assessment thus made is invalid and without jurisdiction hence be cancelled. 4. That on the facts & in the circumstances of the case and in law, the levy of interest u/s.234A, 234B & 234C are unlawful and without jurisdiction and, therefore, be cancelled.” 4. Briefly stated the facts are such that the assessee is an educational society, registered by Registrar of Societies as well as by Commissioner of Income-tax u/s 12A of the act. The assessee submitted returns of all years after claiming exemption u/s 11 to 13 of the act. A search was conducted at one “Sagar Group” of Bhopal on 21.10.2011. The group is engaged in the business of builders and developers and also running various educational- societies and the assessee-society is also said to be a part of this “Sagar Group”. The flagship companies of the group are Agarwal Construction Co. and Agarwal Builders and different educational societies including assessee are inter-connected by management and have offices in the same premise at Bhopal. Therefore, all entities have been clubbed as “Sagar Group” and Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 5 of 14 assessments u/s 153A / 143(3) have been made on the basis of common findings during search. In the process, assessments of assessee of six years i.e. AY 2006-07 to 2011-12 were framed u/s 143A and of search-year i.e. AY 2012-13 was framed u/s 143(3) through a consolidated-order dated 28.03.2014. Aggrieved by such order, the assessee filed appeals to Ld. CIT(A) and got part-relief. Still aggrieved, the assessee has come in appeal before us for four years i.e. AY 2009-10 to 2012-13. 5. Ld. CIT-DR, Mr. P.K. Mitra appearing for the revenue, logged-in virtual hearing belatedly claiming that the internet connectivity in his office-room is not good enough. Further, in the virtual hearing, he could not switch on the video and presented the case through audio mode only for the reason of low bandwith of internet. This problem is explained by Ld. CIT-DR even in many earlier occasions. Therefore, we direct the department that Ld. CIT-DR be provided with proper and adequate infrastructures with good internet speed and electronic communication facility for effective conducting of virtual hearing by the DR office. Apart from this, Ld. DR filed an adjournment- application dated 05.09.2022 in this case and pressed the same during hearing. The reason advanced by Ld. CIT-DR is that due to paucity of time, the case could not be prepared. But, however, Ld. AR pointed out that the issues are well-covered by the order of ITAT, Indore Bench in IT(SS)A No. 83 to 89/Ind/2020 of AY 2006-07 to 2012-13 dated 17.01.2022 in the case of M/s Agarwal Technical Education Society, Bhopal, one of the group-entity and, therefore, these appeals can be disposed of following the same order without much efforts. In view of this, the adjournment-request filed by Ld. DR is turned down and the appeals were proceeded for hearing. 6. Referring to the Grounds of appeal raised in appeal-memos of different-years, Ld. AR briefly apprised that during search-proceeding, bill- books and other documents of the contractors engaged for construction- activity were found and statements of certain persons were recorded on the basis of which it was inferred that the payments shown to those contractors recorded as expenditure / investment/ application of income in books of Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 6 of 14 account, were bogus. Therefore revenue made disallowances / additions in the hands of flagship companies as well as different educational bodies run by the Group including assessee-society. Ld. AR submitted that analogous reasons/findings have been mentioned/copy-pasted by lower authorities in the orders of all assessees for the reason that the contractors engaged by flagship companies for construction-activity as also by other entities including assessee-society for construction of buildings, were same. On perusal of order of ITAT, Indore Bench in the case of M/s Agarwal Technical Education Society, Bhopal (supra), it is observed that the case was represented by Mr. S.S. Deshpande, same counsel on behalf of assessee, as in the present-appeals, who is well-versed with the facts and issues and his submissions deserve full acceptance without digging more. Taking into account these, we proceed to decide appeals of different years in the light of order of ITAT in M/s Agarwal Technical Education Society, Bhopal (supra). A.Y. 2009-10 and AY 2010-11: 7. Ground No. 4 is legal but Ld. AR admitted for not pressing. Ground No. 5 relating to levy of interest u/s 234A, 234B and 234C is consequential and no specific-submissions are made. Hence these Grounds do not require any adjudication by us. What remains now are Ground No. 1, 2 and 3 only. 8. The grievance raised in Ground No. 1 and 2 is such that the AY 2009- 10 and 2010-11 were non-abated assessment-years and in absence of any incriminating materials, the assessment-orders were bad, without jurisdiction, unjustified and unsustainable and therefore be cancelled. 9. Ld. AR invited our attention to following paragraphs in the aforesaid order of ITAT, Indore in M/s Agarwal Technical Education Society (supra) where identical issue has been resolved in favour of assessee: “10. We have considered rival contentions and gone through the material available on record. We find that the assessee is an educational Institute running five technical colleges at Bhopal. It is a Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 7 of 14 society registered with Registrar of firms and Societies, and also registered with the Commissioner of Income Tax u/s. 12A of the Act. For the years under consideration the Society had filed the returns of income before the due dates and claimed the exemption u/s. 11 to 13 of the I.T. Act. The accounts are audited and the necessary audit reports were filed. A search was conducted in the Sagar group on 21/10/2011 which is engaged in the business of builders and developers. The group is also running various educational institutions at Bhopal under the management of various societies. The main companies of the group are Agrawal Construction Co and Agrawal Builders. The Agrawal Construction Co. is situated at plot number 250 Zone II, MP Nagar, Bhopal. The office of the assessee society is also situated in the same building. However the colleges are situated at the outskirts of Bhopal city. Loose papers were found at the premises of Agrawal Construction Co. On the basis of those papers and statements recorded, the Ld. AO made various additions in the case of Agrawal Construction Co. and the same reasons were copy pasted in the assessment order of the assessee Society. Since the company is in the construction line, the contractors were common for their building construction and the buildings of the assessee Society. During the course of search, the statement of one of the persons was recorded who stated that he is merely a chowkidar and has not done any contract work. The statement of the manager and the material purchase in-charge were also recorded who stated that they don’t know every contractor. During the course of the search the letter-head and the bill books of various contractors were found along with the application of Permanent Account Number. During the course of the assessment proceedings, the Ld. AO has made various additions on account of disallowance of expenses and on account of additions u/s. 69. For the expenses the Ld. AO observed that the contractors are bogus and he disallowed the whole payment made to the contractors. During the course of assessment proceedings, the assessee submitted complete details about the work executed by various contractors. The PAN of the subcontractors along with the addresses were also furnished. The confirmations of some of the contractors who did the petty jobs could not be filed since they left the site and could not be traced. These petty contractors payments amounted to Rs. 24,21,850/- as is evident from page no.51 of the impugned order. The Ld. AO relied on the statements of Shri Khalak Singh and on the basis of the same, he disallowed the total payment made to the contractors. The Ld. AO further disallowed partly the salary payment to the guards whose statements were recorded. Further the Ld. AO disallowed partly the salary payment to Smt Kiran Agrawal who is looking after the day to day administrative work of all the colleges. She has been provided the free services of the driver. The Ld. AO observed that the Society’s funds have been utilized for the benefit of the driver and on this ground he applied for the provision section 13 of the Act. Further on the ground of the excess payment to Kiran Agrawal the Ld. AO has denied the benefit of exemptions with the observation Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 8 of 14 that the provisions of section 13 are applicable. Before the Ld. CIT(A) the additions were challenged on various grounds. It was submitted that no additions can be made in non-abated assessment years i.e. in A.Y. 2006-07 to 2010-11 without finding any incriminating material. However, learned CIT(A) did not agree with the submission of the assessee on the ground as reproduced hereinabove. However, having gone through the material available on record, we find that on the date of search i.e. on 21.10.2011, no assessments or re-assessments were pending. The time limit for issuing of notice u/s. 143(2) had also expired on the date of search. Further, we find that the search commenced on 21/10/2011 and concluded on 24/10/2011 and the papers found at the premises of Agrawal Construction regarding the payments to the contractors were all recorded in books of accounts and as such, the same could not be said as incriminating documents. We find that on the day of search/survey, the assessment proceeding were pending only for two assessment years i.e. 2011-12 & 2012-13. No assessment proceeding for other assessment years i.e. 2006-07 to 2010-11 were pending on the said date, hence the five assessment years fall in the category of non-abated assessment and the additions were made on the basis of unrelated papers and on the statements of unrelated persons as in the assessment order, the A.O. has not referred to any incriminating material found at the office premises of the various institutions found in the survey suggesting any suppressed income. The A.O. has made the allegation of the bogus payments solely on the basis of unrelated papers found at the business premises of Agarwal Construction Co. and not on the basis of any incriminating materials found. All the said papers and the statements of persons are related to Agarwal Construction Co. and have been adjudicated and discussed by the A.O. in the assessment of Agarwal Construction Co. and the same conclusion has been copy pasted of the assessment order of the assessee. Under these circumstances, the additions made in the non- abated assessments i.e. A.Y. 2006-07 to 2010-11 are bad in law and deserve to be deleted. Our view is supported by the ratio laid down by the Hon’ble Delhi High Court in case of CIT v. Kabul Chawla, (2016) 2 ITJ Online 869 (Delhi) : (2016) 380 ITR 573 : (2015) 281 CTR 45 : (2015) 234 Taxman 300 and also decision of Pr. CIT v. Meeta Gutgutia, (2020) 8 ITJ Online 273 (Delhi) : (2017) 395 ITR 526. Therefore, totality of facts in view of the relevant judicial pronouncements clearly suggests that that the proceedings initiated u/s 153A of the Act for the A.Y. 2006-07 to 2010-11 being non-abated and completed assessments deserve to be quashed. We, therefore, set aside the findings of Ld. CIT(A) on this ground and hold that proceedings initiated in the case of the assessee for A.Y. 2006-07 to 2010-11 are without jurisdiction and consequently, assessments framed for these years are quashed and set aside. Accordingly, ground nos. 1 & 2 raised in all the present appeals filed by the assessee are allowed. Since we have quashed the assessments for the A.Y. 2006-07 to 2010-11 as above, the other grounds raised in the appeals of the assessee for the A.Y. 2006-07 to Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 9 of 14 2010-11 have now become infructuous being academic whereas all the grounds raised in the appeal of the Revenue for the A.Y. 2009-10 is dismissed. Accordingly, assessee’s appeals bearing IT(SS)A Nos.83 to 87/Ind/2020 are allowed whereas appeal filed by the Revenue bearing IT(SS)A No.81/Ind/2020 is dismissed.” 10. We do not find any reason to deviate from the above decision of Hon’ble Co-ordinate Bench which is stated to be on identical facts and involving identical issues. Respectfully following the same, we are inclined to hold that the assessments made by Ld. AO are bad, without jurisdiction, unjustified and unsustainable. Resultantly, we quash the assessment- orders passed by Ld. AO. This way, Ground No. 1 and 2 of assessee are allowed. 11. In Ground No. 3, the assessee claims that the findings of the learned lower authorities that the assessee has claimed bogus expenses are wholly unjustified and unlawful, hence such findings be quashed and the appellant be provided the relief in the matter of additions made by lower authorities. This Ground is on merit. Since we have already quashed the assessment- orders, this Ground becomes infructuous and therefore dismissed being so. A.Y. 2011-12 and AY 2012-13: 12. Ground No. 1, 2 and 4 of AY 2011-12 and Ground No. 1 and 3 of AY 2012-13 are not pressed. Ground No. 5 of AY 2011-12 and Ground No. 4 of AY 2012-13 relating to levy of interest u/s 234A, 234B and 234C are consequential and no specific-submissions are made. Hence, all these Grounds do not require any adjudication by us. What remains now are Ground No. 3 of AY 2011-12 and Ground No. 2 of AY 2012-13. 13. In Ground No. 3 of AY 2011-12 and Ground No. 2 of AY 2012-13, the assessee claims that the findings of the learned lower authorities that the assessee has claimed bogus expenses are wholly unjustified and unlawful, hence such findings be quashed and the appellant be provided the relief in the matter of additions made by lower authorities. This Ground is on merit. Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 10 of 14 14. Ld. AR invited our attention to following paragraphs in the aforesaid order of ITAT, Indore in M/s Agarwal Technical Education Society (supra) where identical issue has been resolved in favour of assessee: “12. Ground no.3 is with regard to confirmation of additions of Rs.2,49,92,539/- A & 29,98,146/- for the Assessment Years 2011-12 & 2012-13, respectively, for payments made to sub-contractors. Facts, in brief, are that the Assessing Officer during the course of assessment proceedings required the assessee to furnish complete details of sub- contractor debited in P/L account along with complete name, address, copy of ITR, Identity poof and bank statement. The assessee in reply on 15.12.2013 submitted relevant details of the sub-contractors and contended that the society is running a college imparting engineering education and for this purpose, it has constructed the building of college, hostel mess etc. for which the assessee had to purchase material and construct the building with the help of various contractors and sub-contractors. However, the Assessing Officer after considering reply of the assessee did not find the same acceptable and disallowed all the expenses/payments made to sub-contractors on the ground that few of the cash memo/voucher were found to be blank and were debited in P& L account. 13. Being aggrieved, the assesse approached the learned CIT(A) who allowed the ground partly. Learned CIT(A) bifurcated the payments under three different heads. Firstly, the petty contractors who were paid Rs.24,51,850/- and who were not having a PAN and the addresses were not given. Secondly, the subcontractors who were paid Rs.2,96,00,038/- in whose name blank bills/ cash memos/ vouchers were seized. Thirdly, the subcontractors who were paid Rs.2,75,28,903/- who have got their respective PAN and other details. The Ld. CIT(A) disallowed the claim of the assessee in respect of the first category on the ground that there is no material evidence and other details like addresses, identity proof and bank statements. In respect of the second category, the Ld. CIT(A) upheld the addition relying on the statement of Shri Rupesh Gorkhe and Shri Khalak Singh and observed that various important papers were seized from the premises regarding bank opening form, application for PAN allotment and blank bills. These contactors were not produced for examination. The Ld. CIT(A) observed that the bank account of the sub-contractors shows that the amounts credited include the payments from the assessee society also, as such the payments to the sub-contractors cannot be treated as genuine. However, the ld. CIT(A) allowed the payment to the subcontractors whose PAN and other details were available on the ground that no construction work would be completed without the cost of labour and material. Accordingly, for the Assessment Years 2011-12 & 2012-13, the learned CIT(A) confirmed the additions of Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 11 of 14 Rs.2,49,92,539/- & Rs.29,98,146/- and deleted the additions of Rs.84,35,482/- & Rs.51,81,140/-, respectively. 14. Being aggrieved, the assessee is in appeals before this Tribunal challenging the confirmation of additions of Rs.2,49,92,539/- and Rs.29,98,146/-, respectively. Before us, the learned Counsel for the assessee reiterated that the addition made by the A.O is not in order as the society is running a college imparting engineering education and for this purpose it has constructed the building of college, hostel mess etc. for which the assessee had purchased material and constructed the building with the help of various contractors and sub-contractors. The direct cost for construction comprises of mainly of two things i.e. material cost and labour cost. Therefore, learned CIT(A) was not justified in granting part relief. 15. On the other hand, ld. CIT-DR vehemently argued and relied on the order of the learned CIT(A). 16. We have considered rival contentions and gone through the material available on record. We find that it was explained that every contractors worked for the construction of the building of the Society. We find that the papers were found from the business premises of Agrawal Construction Co and not from the office premises of the assessee society. However, the A.O. referred to the statements of various persons and several documents of various sub-contractors found from the business premises of Agarwal Construction Co., 250, Sagar Plaza, M.P. Nagar, Bhopal. We find that the Assessing Officer failed to appreciate the fact that the said premises do not belong to assessee and no part of its activities were functioning at that place as each of the educational institution has its own accounts and finance department at the place of concerned educational institution and all the financial transactions are done independently by each educational institution. The accounts of the educational institution are maintained at the place where the concerned educational institution is located. Therefore, the additions made on the basis of unrelated papers and on the statements of unrelated persons were not justified. Further, the A.O. did not refer to any incriminating materials found at the office premises of the various institutions found in the survey suggesting any suppressed income. The A.O. made the allegation of the bogus payments merely on the basis of unrelated papers found at the business premises of Agarwal Construction Co. and not on the basis of any incriminating materials found. It is pertinent to mention here that all the aforesaid papers and the statements of persons are related to Agarwal Construction Co. and have been adjudicated and discussed by the A.O. in the assessment of Agarwal Construction Co. and the same conclusion has been copy pasted of the assessment order of the assessee. It was also explained that the persons whose statements were recoded and referred in para 15 of the assessment order were not the employees of the assessee Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 12 of 14 Society but they are employees of Agrawal Construction Co. Therefore, in our view, the additions made on the basis of unrelated papers and unrelated persons were not justified as while framing the assessment, the Assessing Officer did not refer to any of the papers found at the business premises of the assessee. Under these circumstances, we are of the view that no additions can be made in the hands of the assessee. We further find that all the information regarding the contractors and the respective work done by them were submitted before the Ld. Assessing Officer and the ld. Assessing Officer failed to consider the fact that without the labour charges, no construction work can be completed and also the explanation of the assessee that the papers found in the shape of the letter-heads and the bill books have been kept by the contractors for their convenience in the premises of Agrawal Construction Co. Therefore, looking to the aforesaid explanations by the assessee and discussion hereinabove, we find that the expenditure incurred in respect of payments made to sub-contractors was reasonable and comparable to the total cost of the building. Learned CIT(A) granted part relief but failed to consider the fact that normally the percentage of labour cost to the total construction cost is between 20% to 30% and in the instant case it is 16.4 % as is evident from the page 39 of impugned order. A certificate from a Chartered Engineer to this effect was also filed. Thus, we find that the labour percentage is less than the normal prescribed percentage. We further find that it was explained that the petty contractors who had done the small work had been paid by the cheque and after completion of the work they left the site and were not approachable/traceable and as such could not be produced. However, their work cannot be denied since the work for which the payment has been made is in existence. Under these circumstances the addition cannot be sustained. So far as the disallowance of payments to the sub-contractors whose bill book were found at the premises of M/s Agrawal Construction is concerned, we find that the same cannot be disallowed, firstly, the bill book, bank statements and the PAN application copies were found at the premises of M/s Agrawal Construction Co and they were kept in the office for the sake of convenience of the contractors, since bills could be raised immediately after completion of a particular work. The bank statements were kept to ascertain the bank balances for withdrawal of money for incurring the expenditure. The PAN was necessary because of quoting them for TDS. It is undisputed fact that all payments to these contractors were made through banking channel and the necessary TDS was made wherever necessary. Thus, totality of facts clearly suggests that the addition confirmed by the learned CIT(A) was also not justified. Therefore, we set the order of the learned CIT(A) on this point. Accordingly, we delete the additions of Rs.2,49,92,539/- & Rs.29,98,146/- for the Assessment Year 2011-12 & 2012-13, respectively.” Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 13 of 14 15. We do not find any reason to deviate from the decision of Hon’ble Co- ordinate Bench which is stated to be on identical facts and involving identical issues. Respectfully following the same, we are inclined to delete the additions made by Ld. AO. This way, Ground No. 3 of AY 2011-12 and Ground No. 2 of AY 2012-13 of assessee are allowed. 16. In the final result, all these four appeals of assessee are allowed. Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on 15/09/2022. Sd/- Sd/- (T.R. SENTHIL KUMAR) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore दनांक /Dated : 15.09..2022 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Shri Agrawal Health & Education Society, ITA(SS) No.271 to 273/Ind/2017 and ITA No. 677/Ind/2017 Assessment year 2009-10 to 2012-13 Page 14 of 14 1. Date of taking dictation 8.9.22 2. Date of typing & draft order placed before the Dictating Member 8.9.22 3. Date on which the approved draft comes to the Sr. P.S./P.S. 12.09.22 4. Date on which the fair order is placed before the Dictating Member for pronouncement 5. Date on which the file goes to the Bench Clerk 6. Date on which the file goes to the Head Clerk 7. Date on which the file goes to the Assistant Registrar for signature on the order 8. Date of dispatch of the Order