Can the assessing authority charge the assessee (contractor) if his sub-contractors are not produced before the assessing authority after issuing multiple summons?

IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 7.8.2020
CORAM
THE HON'BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY

T.C.A.No.766 of 2017

Commissioner of Income Tax
Chennai. Appellant

vs

M/s.SPL Infrastructure Pvt. Ltd.,
No.15, Kasthuri Rangan Street,
Alwarpet, Chennai-18. Respondent

Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras ‘C’ Bench dated 14.1.2016 in in I.T.A.No.2488/Mds/2014.

For Appellant : Mr.J.Narayanasamy, Senior Standing Counsel
For Respondent : Mr.M.P.Senthilkumar

JUDGMENT
(Delivered by Dr.Vineet Kothari,J)

The Court was held by Video Conference, as per the Resolution of the Full Court dated 3 July 2020, by Judges at their respectiveresidences and the counsel, staff of the Court appearing from their respective residences. 2. The Revenue has preferred this Appealunder Section 260A of the Act, aggrieved by the order dated 14.1.2016 passed by the learned Tribunal for the Assessment Year 2010-11.

3. The Respondent/Assessee is a Contractor, who carried out the work of road laying in the Thermal Power Plant, Rathnagiri, to the tune of Rs.3300 lakhs. The learned Assessing Authority made an addition ofRs.4,41,08,210/- in the hands of the Assessee on the ground that 14 of the Sub Contractors to whom the sub contracts were assigned by the Respondent/Assessee/ Contractor were not produced before theAssessing Authority upon summons being issued to them andthereupon, disbelieving their existence and the sub contract work carried out by them, the entire payments made to them were disallowed by the Assessing Authority and they were added back to the income of the Assessee.

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