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Whether the Tribunal was correct in restricting the disallowance to 10% of expenditure of Rs. 4,41,08,210/- incurred towards subcontractors even though the assessee had failed to prove the identity, credibility and genuineness of the sub contractors?

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Sec. 260A of Income Tax Act, 1961 - Rejection of Account - The 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 Assessing Authority made an addition of Rs. 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 Assessee/ Contractor were not produced before the Assessing Authority upon summons being issued to them and thereupon, disbelieving their existence and the sub contract work carried out by them, the entire payments made to them were disallowed and they were added back to the income of the Assessee. CIT(A) restricted the said addition to 10% of the total sum of Rs. 4,41,08,210/- on the agreement of the Assessee and thus, relief to the extent of 90% was granted by CIT(A), which order was upheld by the ITAT. High Court dismissed the appeal of the revenue held that ”though the provisions of Section 260A of the Act are intended only to settle the substantial questions of law arising from the order of the Tribunal, such appeals, against the pure findings of facts, are also filed in an absolutely reckless manner. We strongly deprecate this practice of the Revenue Authorities, as there seems to be no application of mind by the higher Authorities in sanctioning filing of these appeals before the High Court“. CIT Vs. Spl infrastructure pvt. ltd. [2020] 427 ITR 213 (MAD)