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11. Further the statement of Shri. Venkatesulu Devineni was recorded on 25.11.2016 confronting him with the evidences and statements recorded in Ananthpur office of SRC, the signed and unsigned cheque books, statements of Shri. Avinash Choudary, Shri. Ravinder and Shri. Ramarao. He was asked why all the eleven sub-contractor of Ananthapur Office found in the office premise ofSRC should notbe treated as boguscontractorspayments and should not be taxed as undisclosed income in the hands of SRCfor the respective Assessment Years. Shri. Venkatesulu Devineni in his statement dated 25.11.2016 has stated that right now he is not in a position to prove the genuineness of the sub contractors in the absence of suitable documents, he admitted undisclosed income of Rs.5,90,22,934/- and Rs. 9,07,73,475/ - for Assessment Years 2015-16 and 2016-17 respectively in the hands of SRC.

Q18. Do you have anything else to say?

Ans. Sir, we have completely cooperated with the department during the search proceedings and we have also voluntarily declared the undisclosed income as per the chart below. So kindly do not initiate any penalty proceedings.

23. Considering the above statements, paper books filed containing V-1 to V-8 page NO. 01 to 2150, it is seen that from the Anantpur Office of the assesse, a greenbag was found which contained signed and unsigned cheque books. Based on the said green bag found, statement of partner Devineni Venkatesulu was recorded on 24.11.2016. Later statement of the Shri. Rajgopal was also recorded under section 132(4) of the Act on 25.11.2016.From the statement of Devineni Venkatesulu, as per question No. 12,the search team identified list of 11 sub-contractors. As per statement of ITA Nos.636, 637/Bang/2025 ITA Nos.768, 769/Bang/2025 Sri Rajagopal M. s/o M. Seshaiah Naidu at Bangalore Office recorded on 25.11.2016, additional 16 sub-contractors were identified as per Q.10 of his statement. Hence, it is seen that a list of 16 sub-contractors was admitted in the Bangalore Office and 11 sub contractors were admitted in Anantpur Office. From the Anantpur Office and Bangalore Office there was total declaration made by the assessee wasRs.13,93,22,467/-, Rs.20,84,58,868/- and Rs.4,97,63,178 for the Financial Years 2014-15, 2015-16 and 2016-17 respectively.

30. With regard to the ground raised by assessee on this issue, we find that the learned AR's contention that these statements given at the time of search are not backed by any evidence against the assessee. No other evidence similar to the one was found at Ananthpur Office premises in the form of signed or unsigned cheque books of sub contractors and third parties. Only the statements recorded are available. To establish the genuineness of sub- contractor payments the Appellant has filed substantial documentary evidence by way of work orders, RA bills, tax returns, audit reports where applicable, and affidavits from all sub-contractors affirming that works carried out were genuine, and not just confirmation letters. Many of these documents were also found during the search and formed part of the seized materials. These are submitted as paper books Volumes 2-7. None have disputed the entries made in the ledger booksof the assesse neither the Revenue nor the sub-contractor. The AO has also accepted the books and financial statements filed by the ITA Nos.636, 637/Bang/2025 ITA Nos.768, 769/Bang/2025 assesse. The balance shown in the books are not disturbed. While making addition during assessment under section 153A of the Act, the AO has not referred to any incriminating materials except the statements recorded at the time of search, which alone cannot be incriminating material. The AO has also not specified the relevant section of ChapterIV-D which covers sections 28 to 44 of the Act under which the addition has been made. Neither any reference to any provision of Chapter VI or income from other sources has been made. He has accepted the Tax Audit Report and did not reject the books of accounts. Without invoking any of the provisions of the Income Tax Act, the AO has made the addition and completed the assessment. Even in 143(3) r.w.s. 153A proceedings, the AO is required to follow the provisions of the Act and the AO should not make any addition without referring to any specific section/provisio/rules/circular/notifications. Section 153Aof the Act is procedure for completing the assessment in the case of search and seizure action but not for disallowance. There is no corroborative evidence to substantiate additions made except the statements recorded of the partners and third parties u/s 132(4) of the Act. Mere finding of signed and unsigned cheque books of the sub contractors at the assessee premises or voluntary income offered during the course of search to buy peace of mind cannot be a basis to make addition in the hands of the assesseewhen there is no evidence to show that cash is withdrawnand taken away by the assessee. Here it is very important to highlight that the Affidavit of the sub-contractors that has not been disputed by the Revenue authorities.

33. The case law relied on by the learned DR in the case of Roshan Lal Sancheti does not apply to the present facts of case since in that case during the course of search, 7 loose sheets were found and seized on the basis of which assessee agreed to surrender Rs.2,28,44,545/-. But in the case of assessee nothing incriminating was found except the signed and unsigned cheque books based on which the statement was recorded from the partners and third parties. In the judgment of Hon'ble Apex Court relied on by the ld. DR noted supra, the statement was recorded on 27.09.2012 where surrender of aforesaid amount was made by the assessee. Assessee again confirmed the said statement of surrendered amount before ADIT in his statement under section 131 of the Act on 15.10.2012 and further surrender on 17.12.2012. Retraction affidavit was also filed after a delay of 237 days. Under these facts, the Hon'ble Apex Court had upheld the surrender of the income in the statement recorded u/s.132(4) of the Act and post search proceedings.But in the case on hand, there was no incriminating materials found at the time of search to show that payments made to sub-contractors have been ploughed back to the assesse. The reasons for the presence of the signed and unsigned ITA Nos.636, 637/Bang/2025 ITA Nos.768, 769/Bang/2025 cheque books in the premises of the assesse has been explained even at the time of search and this is also corroborated by the sub-contractors in their Affidavits filed. Therefore the judgment relied on by the learned DR is not applicable to the present case.