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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
The captioned appeals by the Revenue for assessment years 2017-18 and 2018-19 are directed against separate orders passed by the Commissioner of Income-tax (Appeal)-National Faceless Appeal Centre(NFAC), Delhi [in short the Ld. CIT(A)] . The appeals for assessment year 2017-18 are arising from scrutiny assessment order under section 143(3) of the Income-tax Act, 1961 ( in short Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 2 4863 & 4854/MUM/2024 the Act) and subsequent rectification order p the Act) and subsequent rectification order passed under section assed under section 154 of the Act, whereas the appeal for assessment year 2018 ct, whereas the appeal for assessment year 2018 ct, whereas the appeal for assessment year 2018-19 is arising from scrutiny assessment order arising from scrutiny assessment order under section 143( under section 143(3) of the Act. As common issues . As common issues-in-dispute are involved in these appeals dispute are involved in these appeals and therefore same were heard together and disposed off by way of and therefore same were heard together and disposed off and therefore same were heard together and disposed off this common order for sake of convenience. this common order for sake of convenience.
Firstly, we take up the appeal for as we take up the appeal for assessment year 2017 sessment year 2017-18 arising from assessment order u/s 143(3) of the Act. The grounds m assessment order u/s 143(3) of the Act. The grounds m assessment order u/s 143(3) of the Act. The grounds raised by the Revenue Revenue reproduced as under:
1.Whether on the facts and in the circumstances of the case and Whether on the facts and in the circumstances of the case and Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. in law, the Ld. CIT(A) was justified in deleting the addition of Rs. in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 2,58,78,235/ 2,58,78,235/- made by the AO on account of cash credit u/s 68 he AO on account of cash credit u/s 68 of the Act of the Income of the Act of the Income-tax Act, 1961. 2 Whether on the facts and in the circumstances of the case and 2 Whether on the facts and in the circumstances of the case and 2 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the in law, the Ld. CIT(A) has erred in ignoring the fact that the in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee failed to discharge the onus to prove the assessee failed to discharge the onus to prove the genuineness of genuineness of source of the cash deposit in its account. source of the cash deposit in its account. 3 Whether on the facts and in the circumstances of the case and Whether on the facts and in the circumstances of the case and Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in holding that once the book in law, the Ld. CIT(A) was justified in holding that once the book in law, the Ld. CIT(A) was justified in holding that once the book results are accepted by the AO, the sale reflected in those book results are accepted by the AO, the sale reflected in those book results are accepted by the AO, the sale reflected in those book results cannot be doubted otherwise it amounts to double esults cannot be doubted otherwise it amounts to double esults cannot be doubted otherwise it amounts to double taxation while there is no such provision as per Income taxation while there is no such provision as per Income taxation while there is no such provision as per Income-tax Act, 196l to reject the books of account while making certain 196l to reject the books of account while making certain 196l to reject the books of account while making certain addition(s)/disallowance(s). addition(s)/disallowance(s). 4 The appellant prays that the order of the 4 The appellant prays that the order of the CIT(A) on the above CIT(A) on the above grounds be set aside and that of the Assessing Officer be grounds be set aside and that of the Assessing Officer be grounds be set aside and that of the Assessing Officer be restored.
The learned departmental representative (DR) submitted that The learned departmental representative (DR) submitted that The learned departmental representative (DR) submitted that this appeal is filed with this appeal is filed with a delay of seven days. The learned DR delay of seven days. The learned DR referred to the application of the Assess referred to the application of the Assessing Officer for condoning the ing Officer for condoning the Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 3 4863 & 4854/MUM/2024 delay in filing the appeal and submitted that due to time barring delay in filing the appeal and submitted that due to time barring delay in filing the appeal and submitted that due to time barring matters, gazetted holidays and shortage of staff, there was short matters, gazetted holidays and shortage of staff, there was short matters, gazetted holidays and shortage of staff, there was short delay of seven days in filing the appeal. We have heard rival delay of seven days in filing the appeal. We have heard rival delay of seven days in filing the appeal. We have heard rival submission of the parties on the submission of the parties on the application for condonation of the application for condonation of the delay in filing the appeal. In our opinion there is a sufficient and delay in filing the appeal. In our opinion there is a sufficient and delay in filing the appeal. In our opinion there is a sufficient and bonafide reason for delay in filing the appeal, accordingly, we bonafide reason for delay in filing the appeal, accordingly, we bonafide reason for delay in filing the appeal, accordingly, we condone the delay in the filing the appeal and admit the same for condone the delay in the filing the appeal and admit the same for condone the delay in the filing the appeal and admit the same for adjudication.
Briefly stated facts of the case are that the assessee, a private efly stated facts of the case are that the assessee, a private efly stated facts of the case are that the assessee, a private limited company, was incorporated in the year 1998 and since was incorporated in the year 1998 and since then was incorporated in the year 1998 and since engaged in the business of restaurants, banquets and outdoor engaged in the business of restaurants, banquets and outdoor engaged in the business of restaurants, banquets and outdoor catering and food parcels. During the year under consideration, two catering and food parcels. During the year under consideration, tw catering and food parcels. During the year under consideration, tw companies namely M/s Foodlink Restaurant India Private Limited companies namely M/s Foodlink Restaurant India Private Limited companies namely M/s Foodlink Restaurant India Private Limited and M/s Foodlink Banquet and Catering India Private Limited got and M/s Foodlink Banquet and Catering India Private Limited got and M/s Foodlink Banquet and Catering India Private Limited got merged with the assessee. For the captioned assessment year, the merged with the assessee. For the captioned assessment year, the merged with the assessee. For the captioned assessment year, the assessee filed return of income on 30/10/2017 declaring total assessee filed return of income on 30/10/2017 declaring total assessee filed return of income on 30/10/2017 declaring total income at ₹1,64,23,340/ 340/-. Subsequent to the merger, the assessee . Subsequent to the merger, the assessee revised its return of income on 08/02/2019 declaring the total revised its return of income on 08/02/2019 declaring the total revised its return of income on 08/02/2019 declaring the total income at ₹80,83,490/ 490/-. The return of income filed by the assessee . The return of income filed by the assessee was selected for scrutiny assessment a was selected for scrutiny assessment and statutory notices un nd statutory notices under the Act were issued and complied with. During scrutiny ct were issued and complied with. During scrutiny ct were issued and complied with. During scrutiny proceedings, the Assessing Officer observed cash deposit of proceedings, the Assessing Officer observed cash deposit of proceedings, the Assessing Officer observed cash deposit of ₹3,86,99,991/- during the period from 08/11/2016 to 31/12/2016 during the period from 08/11/2016 to 31/12/2016 during the period from 08/11/2016 to 31/12/2016 ( i.e. the demonetization period) in its bank accounts, out of which ( i.e. the demonetization period) in its bank accounts, out of which ( i.e. the demonetization period) in its bank accounts, out of which Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 4 4863 & 4854/MUM/2024 ₹3,23,84,000/- were were in specified banknotes (SBN) and remaining specified banknotes (SBN) and remaining was legal tender notes. The assessee was asked to explain source of was legal tender notes. The assessee was asked to explain source of was legal tender notes. The assessee was asked to explain source of the cash deposited including SBN. The assessee explained that cash the cash deposited including SBN. The assessee explained that cash the cash deposited including SBN. The assessee explained that cash deposited was generated out of its business activities. The assessee deposited was generated out of its business activities. The ass deposited was generated out of its business activities. The ass explained that on 08/11/2016, cash balance of explained that on 08/11/2016, cash balance of ₹3,44,11, 3,44,11,199/- was appearing in its books of accounts and cash has been deposited appearing in its books of accounts and cash has been deposited appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books during the demonetization period out of the cash available in books during the demonetization period out of the cash available in books of accounts. But the Assessing Officer rejected the contention of the of accounts. But the Assessing Officer rejected the co of accounts. But the Assessing Officer rejected the co assessee and in the assessment order passed under section 143(3) assessee and in the assessment order passed under section 143(3) assessee and in the assessment order passed under section 143(3) ade addition of ₹2,58,78,235/- as unexplained cash of the made addition of as unexplained cash credit under section 68 of the A under section 68 of the Act. On further appeal, the Ld. CIT(A) after ct. On further appeal, the Ld. CIT(A) after considering the submission and analysing considering the submission and analysing facts and evidence facts and evidences, deleted the addition made by the Ass deleted the addition made by the Assessing Officer. Aggrieved, the essing Officer. Aggrieved, the Revenue is on appeal before the Income evenue is on appeal before the Income-Tax Appellate Tribunal Tax Appellate Tribunal (in short the ‘Tribunal’) by way of raising grounds short the ‘Tribunal’) by way of raising grounds as reproduced above. reproduced above.
The learned counsel for the a The learned counsel for the assessee filed a paper book ssessee filed a paper book containing pages 1 to 44. containing pages 1 to 44.
In the grounds raised by the R In the grounds raised by the Revenue, the sole issue is the sole issue is regarding the cash deposits of ₹ 2,58,78,235/- which was held by regarding the cash deposits of which was held by the Assessing Officer as unexplained cash credit, but same has the Assessing Officer as unexplained cash credit, but same has the Assessing Officer as unexplained cash credit, but same has been deleted by the Ld. CIT(A). The brief facts qua the issue in been deleted by the Ld. CIT(A). The brief facts qua the issue in been deleted by the Ld. CIT(A). The brief facts qua the issue in dispute are that in the instant case the assessee was engaged in the dispute are that in the instant case the assessee was engaged in the dispute are that in the instant case the assessee was engaged in the business of providing restaurant service business of providing restaurant services, outdoor catering and s, outdoor catering and Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 5 4863 & 4854/MUM/2024 management of food and beverages. The assessee had made total management of food and beverages. The assessee had made total management of food and beverages. The assessee had made total cash deposit of ₹3,23,84, 3,23,84,000/- in a specified banknotes (SBN) in a specified banknotes (SBN) during the demonetization period. The assessee explained that cash during the demonetization period. The assessee explained that cash during the demonetization period. The assessee explained that cash deposited was generated out of its busine deposited was generated out of its business activities. The assessee ss activities. The assessee explained that on 08/11/2016, cash balance of explained that on 08/11/2016, cash balance of ₹3,44,11, 3,44,11,199/- was appearing in its books of accounts and cash has been deposited appearing in its books of accounts and cash has been deposited appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books during the demonetization period out of the cash available in books during the demonetization period out of the cash available in books of accounts. But the Assessing O of accounts. But the Assessing Officer did not fficer did not accept the explanation of the assessee due to following reasons: explanation of the assessee due to following reasons: explanation of the assessee due to following reasons:
(i) by way of late filing of VAT and service tax returns for the by way of late filing of VAT and service tax returns for the by way of late filing of VAT and service tax returns for the period from April 2016 to September 2016, the assessee period from April 2016 to September 2016, the assessee period from April 2016 to September 2016, the assessee had sufficient time to manipulate its sales and therefore had sufficient time to manipulate its sales and therefore had sufficient time to manipulate its sales and therefore rooted it is unaccounted money in the bank account by oted it is unaccounted money in the bank account by oted it is unaccounted money in the bank account by exaggerating its sales. exaggerating its sales. (ii) late payment of VAT and service tax liability for the late payment of VAT and service tax liability for the late payment of VAT and service tax liability for the period from April 2016 to September 2016 period from April 2016 to September 2016 period from April 2016 to September 2016 huge cash balance of ₹3,44,11,199/-shown in the books (iii) huge cash balance of shown in the books of of of accounts accounts accounts as as as on on on 08/11/2016 08/11/2016 08/11/2016 i.e. i i prior to demonetization demonetization. (iv) Variation in cash flows compared to the previous years Variation in cash flows compared to the previous years Variation in cash flows compared to the previous years assessee was having cash in hand of ₹43,24, 6.1 The assessee was having cash in hand of 43,24,459/-as on 01/04/2016, therefore the Assessing Officer allowed benefit of the 01/04/2016, therefore the Assessing Officer allowed benefit of the 01/04/2016, therefore the Assessing Officer allowed benefit of the Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 6 4863 & 4854/MUM/2024 said amount of opening cash in hand and mad said amount of opening cash in hand and made addition for the e addition for the remaining amount of remaining amount of ₹2,58,78,235/- [ = 3,23,84,000 [ = 3,23,84,000 – 43,24,459].
The Assessing Officer noted that service tax challan of ₹ 6.2 The Assessing Officer noted that service tax challan of The Assessing Officer noted that service tax challan of 93911/- for month of of April, 2016 which was due on 06/05/2016 , 2016 which was due on 06/05/2016 was deposited on 28/04/2017 after a delay of 357 days. Similarly was deposited on 28/04/2017 after a delay of 357 was deposited on 28/04/2017 after a delay of 357 amount of ₹ 1,55, the service tax challan for June 2016 for the service tax challan for June 2016 for an amount of 258/- which was due on 06/07/2016 which was due on 06/07/2016 but was deposited on was deposited on 28/04/2017 after a delay of 296 days. Similarly 28/04/2017 after a delay of 296 days. Similarly, the service tax, the service tax, for for amount of ₹2,34,173/- which was due August, 2016 for amount of which was due on 06/09/2016, was deposited on 28/04/ 2017 06/09/2016, was deposited on 28/04/ 2017 i.e. after a delay of after a delay of 234 days. The assessee explained that service tax returns for the 234 days. The assessee explained that service tax returns for the 234 days. The assessee explained that service tax returns for the period from April to September 2016 of amalgamating companies period from April to September 2016 of amalgamating companies period from April to September 2016 of amalgamating companies and amalgamated company were filed late due to huge quantum of and amalgamated company were filed late due to huge quantum o and amalgamated company were filed late due to huge quantum o data and lack of sufficient manpower to compile the same. Similarly data and lack of sufficient manpower to compile the same. Similarly data and lack of sufficient manpower to compile the same. Similarly the Gujarat VAT returns of M/s Foodlink banquet and catering the Gujarat VAT returns of M/s Foodlink banquet and catering the Gujarat VAT returns of M/s Foodlink banquet and catering India Private Limited for the period from September to February India Private Limited for the period from September to February India Private Limited for the period from September to February 2016 and Karnataka and Telegna VAT returns of Fodlink 2016 and Karnataka and Telegna VAT returns of Fodlink 2016 and Karnataka and Telegna VAT returns of Fodlink restaurants India Private Limited were filed late due to huge ants India Private Limited were filed late due to huge ants India Private Limited were filed late due to huge quantum of data and lack of sufficient manpower to compile the quantum of data and lack of sufficient manpower to compile the quantum of data and lack of sufficient manpower to compile the same. The service tax, and same. The service tax, and VAT paid late due to typographical error paid late due to typographical error while computing the net tax liability. The error was pointed out by while computing the net tax liability. The error was pointed out by while computing the net tax liability. The error was pointed out by the statutory auditor and accordingly the liability was paid along e statutory auditor and accordingly the liability was paid along e statutory auditor and accordingly the liability was paid along with interest for the mon with interest for the months from June 2016 to August from June 2016 to August, 2016. The contentions of the assessee were contentions of the assessee were rejected mainly on the ground that rejected mainly on the ground that Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 7 4863 & 4854/MUM/2024 assessee failed to furnish service tax and VAT returns of the assessee failed to furnish service tax and VAT returns of assessee failed to furnish service tax and VAT returns of relevant period along with challan payments. relevant period along with challan payments.
6.3 Further, the Assessing Officer asked the assessee to justify Further, the Assessing Officer asked the assessee to justify Further, the Assessing Officer asked the assessee to justify keeping of huge cash in hand as compared to very less cash keeping of huge cash in hand as compared to very less cash keeping of huge cash in hand as compared to very less cash expenses or cash purchases. The Assessing Officer also noticed expenses or cash purchases. The Assessing Officer also noticed expenses or cash purchases. The Assessing Officer also noticed high cash sales to total sales ratio during the period from total sales ratio during the period from total sales ratio during the period from April to October 2016 (i.e. 35.85%) ber 2016 (i.e. 35.85%). But the assessee explained . But the assessee explained that its revenue is received in cash therefore its in cash therefore its cash balance was always cash balance was always high in and around month of November. The assessee provided high in and around month of November. The assessee provided high in and around month of November. The assessee provided cash balance for the month of November for preceding three years the month of November for preceding three years the month of November for preceding three years and sales in the month of October preceding three years as under: sales in the month of October preceding three years as under: sales in the month of October preceding three years as under:
“7.6 Further, the appellant had claimed that the business of the 7.6 Further, the appellant had claimed that the business of the 7.6 Further, the appellant had claimed that the business of the appellant is that its revenue is in cash and its cash balance is appellant is that its revenue is in cash and its cash balance is appellant is that its revenue is in cash and its cash balance is always high in and around November months. The appellant in and around November months. The appellant has provided the details of Cash balance in the month of has provided the details of Cash balance in the month of has provided the details of Cash balance in the month of November in preceding three years and sales in the month of November in preceding three years and sales in the month of November in preceding three years and sales in the month of October of preceding three years as under: October of preceding three years as under: Date Sales in the Cash % of cash Month of Oct Balance balance 08-Nov-13 1,95,97,165 78,24,967 40% 08-Nov-14 2.26.06,011 2,12.32.249 94% 08-Nov-15 3,67,73,840 3,03,72,738 83% 6.4 Similarly, the assessee explained average cash sales to total Similarly, the assessee explained average cash sales to total Similarly, the assessee explained average cash sales to total sales for preceding and and subsequent years as under :
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 8 4863 & 4854/MUM/2024 7.7 The Appellant has furnished the average cash sales of 7.7 The Appellant has furnished the average cash sales of 7.7 The Appellant has furnished the average cash sales of previous and subsequent years as under: previous and subsequent years as under: FY Total sales Total sales Cash Sales % 2013-14 35,23,12,513 35,23,12,513 6,90,95,830 20% 2014-15 46,89,67,475 46,89,67,475 12,54,19,364 27% 2015-16 76,93,45,659 76,93,45,659 15,32,17,841 20% 2016-17 1.03.98,84,240 1.03.98,84,240 24.89,84,302 24% 2017-18 1,25,26,32,473 1,25,26,32,473 27,55,07,891 22% 2018-19 1,84,33,02,952 1,84,33,02,952 18,92,54,346 10% 2019-20 1,37.04,93,850 1,37.04,93,850 20,26,84,883 15% 6.5 After considering submission of the considering submission of the assessee the Ld. CIT(A) assessee the Ld. CIT(A) deleted the addition of observing as under: deleted the addition of observing as under:
“8. The details available in assessment order and the written 8. The details available in assessment order and the written 8. The details available in assessment order and the written submission submission submission of of of the the the appellant appellant appellant filed filed filed during during during the the the appellate appellate appellate proceedings has been carefully verified. proceedings has been carefully verified. 8.1 It is found that the addition related to the cash deposit made 8.1 It is found that the addition related to the cash deposit made 8.1 It is found that the addition related to the cash deposit made during the demonetization period treating it as unexplained cash during the demonetization period treating it as unexplained cash during the demonetization period treating it as unexplained cash credit by AO u/s 68 of the Act has no correlations with the delay credit by AO u/s 68 of the Act has no correlations with the delay credit by AO u/s 68 of the Act has no correlations with the delay in filing VAT and Service Tax results and delay in payment in filing VAT and Service Tax results and delay in payment in filing VAT and Service Tax results and delay in payment of liability of VAT and service tax. The period for which VAT and ST liability of VAT and service tax. The period for which VAT and ST liability of VAT and service tax. The period for which VAT and ST returns have been filed belatedly are from April, 2016 to returns have been filed belatedly are from April, 2016 to returns have been filed belatedly are from April, 2016 to September, 2016. Further, no one in the country has knowledge September, 2016. Further, no one in the country has knowledge September, 2016. Further, no one in the country has knowledge about the demonetization which happened on the evening of about the demonetization which happened on the evening of about the demonetization which happened on the evening of 08/11/2016. Therefore, it cannot be said that the Appellant 16. Therefore, it cannot be said that the Appellant 16. Therefore, it cannot be said that the Appellant delayed filing of VAT and service tax return to manipulate sales delayed filing of VAT and service tax return to manipulate sales delayed filing of VAT and service tax return to manipulate sales and show it higher. Further, the average month wise service tax and show it higher. Further, the average month wise service tax and show it higher. Further, the average month wise service tax payment remains similar for most of the months. payment remains similar for most of the months. 8.2 It is seen that it is 8.2 It is seen that it is not the first time the appellant was having not the first time the appellant was having cash balance. Considering the business of the Appellant, it cash balance. Considering the business of the Appellant, it cash balance. Considering the business of the Appellant, it Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 9 4863 & 4854/MUM/2024 always had cash balance. Looking at the nature of business of always had cash balance. Looking at the nature of business of always had cash balance. Looking at the nature of business of the appellant, it has more business activity in the month of the appellant, it has more business activity in the month of the appellant, it has more business activity in the month of November, therefore, the Appe November, therefore, the Appellant needs to maintain the cash llant needs to maintain the cash balance. 8.3 From the details provided by the appellant the cash sales 8.3 From the details provided by the appellant the cash sales 8.3 From the details provided by the appellant the cash sales during the year under consideration is more or less in line with during the year under consideration is more or less in line with during the year under consideration is more or less in line with cash sale in all preceding years. Therefore the reason provided cash sale in all preceding years. Therefore the reason provided cash sale in all preceding years. Therefore the reason provided by AO that the cash sa by AO that the cash sales has increased drastically during the les has increased drastically during the year is not found tenable. year is not found tenable. 8.4 From the details provided by the appellant it is ascertained 8.4 From the details provided by the appellant it is ascertained 8.4 From the details provided by the appellant it is ascertained that the appellant was regularly depositing the huge cash in its that the appellant was regularly depositing the huge cash in its that the appellant was regularly depositing the huge cash in its bank account in previous years as well as subsequent year bank account in previous years as well as subsequent year bank account in previous years as well as subsequent years. It substantiates that the cash is having a major role in sales of the substantiates that the cash is having a major role in sales of the substantiates that the cash is having a major role in sales of the business of the Appellant which is deposited regularly in bank business of the Appellant which is deposited regularly in bank business of the Appellant which is deposited regularly in bank account: 8.5 The cash sales as on 08.11.2013 has been shown at 8.5 The cash sales as on 08.11.2013 has been shown at 8.5 The cash sales as on 08.11.2013 has been shown at Rs.1,95,97,165/ Rs.1,95,97,165/- and cash balance has been shown at and cash balance has been shown at Rs.78,24,967/ 8,24,967/- which works out to 40% cash balance. The cash which works out to 40% cash balance. The cash sales as on 08.11.2014 has been shown at Rs.2,26,06,011/ sales as on 08.11.2014 has been shown at Rs.2,26,06,011/ sales as on 08.11.2014 has been shown at Rs.2,26,06,011/- and cash balance has been shown at Rs.2,12,32,249/ and cash balance has been shown at Rs.2,12,32,249/ and cash balance has been shown at Rs.2,12,32,249/- which works out to 94% cash balance. The cash sales as on 08.11.2015 works out to 94% cash balance. The cash sales as on 08.11.2015 works out to 94% cash balance. The cash sales as on 08.11.2015 has been shown at Rs has been shown at Rs.3,67,73,840/- and cash balance has been and cash balance has been shown at Rs.3,03,72,738/ shown at Rs.3,03,72,738/- which works out to 83% cash which works out to 83% cash balance. The book results of earlier years have not been doubted balance. The book results of earlier years have not been doubted balance. The book results of earlier years have not been doubted by the Department. The judicial decisions relied upon by the by the Department. The judicial decisions relied upon by the by the Department. The judicial decisions relied upon by the appellant lay that where the books appellant lay that where the books of accounts and the of accounts and the contention of the appellant have not been rejected based on contention of the appellant have not been rejected based on contention of the appellant have not been rejected based on enquiry or any valid reason, the partially disbelieving the enquiry or any valid reason, the partially disbelieving the enquiry or any valid reason, the partially disbelieving the contention of the appellant was not permissible and the same contention of the appellant was not permissible and the same contention of the appellant was not permissible and the same context, disbelieving the cash held in the cash books o context, disbelieving the cash held in the cash books o context, disbelieving the cash held in the cash books of the appellant before the demonetization would amount to double appellant before the demonetization would amount to double appellant before the demonetization would amount to double taxation. 8.6 It is a fact that the auditor has not pointed out any 8.6 It is a fact that the auditor has not pointed out any 8.6 It is a fact that the auditor has not pointed out any discrepancy in the accounts of the appellant. Further, the books discrepancy in the accounts of the appellant. Further, the books discrepancy in the accounts of the appellant. Further, the books of account have not been rejected by the AO u/s.145(3) of of account have not been rejected by the AO u/s.145(3) of of account have not been rejected by the AO u/s.145(3) of the IT Act, 1961. The purchases and the stock position depicted in the Act, 1961. The purchases and the stock position depicted in the Act, 1961. The purchases and the stock position depicted in the books have thus been accepted by the AO and the cash sales books have thus been accepted by the AO and the cash sales books have thus been accepted by the AO and the cash sales Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 10 4863 & 4854/MUM/2024 were made out of accounted stock. The sales recorded in the were made out of accounted stock. The sales recorded in the were made out of accounted stock. The sales recorded in the books of accounts having been accepted by the AO, the books of accounts having been accepted by the AO, the books of accounts having been accepted by the AO, the corresponding cash deposit made out of such cash sales cannot ng cash deposit made out of such cash sales cannot ng cash deposit made out of such cash sales cannot be rejected. There is merit in the submission of the appellant that be rejected. There is merit in the submission of the appellant that be rejected. There is merit in the submission of the appellant that the entries in the books of accounts depict a true state of affairs the entries in the books of accounts depict a true state of affairs the entries in the books of accounts depict a true state of affairs unless some contrary evidence is found and the books are unless some contrary evidence is found and the books are unless some contrary evidence is found and the books are rejected by the AO. In the instant case, there is no such finding the AO. In the instant case, there is no such finding the AO. In the instant case, there is no such finding regarding any evidence about bogus sales or bogus purchase by regarding any evidence about bogus sales or bogus purchase by regarding any evidence about bogus sales or bogus purchase by the appellant. The AO has made the addition by not accepting the the appellant. The AO has made the addition by not accepting the the appellant. The AO has made the addition by not accepting the cash balance available in the regular books of accounts. Thus cash balance available in the regular books of accounts. Thus cash balance available in the regular books of accounts. Thus making an add making an addition on account of deposit of cash which is duly ition on account of deposit of cash which is duly accounted for in the books of accounts without rejecting the accounted for in the books of accounts without rejecting the accounted for in the books of accounts without rejecting the books of accounts, is totally unwarranted. In the instant case, the books of accounts, is totally unwarranted. In the instant case, the books of accounts, is totally unwarranted. In the instant case, the cash deposited was duly recorded in the books of account of the cash deposited was duly recorded in the books of account of the cash deposited was duly recorded in the books of account of the appellant and appellant and the appellant offered an explanation regarding the the appellant offered an explanation regarding the nature & source being the cash sales. In the present case, the nature & source being the cash sales. In the present case, the nature & source being the cash sales. In the present case, the money was duly recorded and accounted in the books of money was duly recorded and accounted in the books of money was duly recorded and accounted in the books of accounts and the source was also explained as cash sales. It accounts and the source was also explained as cash sales. It accounts and the source was also explained as cash sales. It cannot be said that the ap cannot be said that the appellant failed to give satisfactory pellant failed to give satisfactory explanation about the nature & source of cash deposit. The fact explanation about the nature & source of cash deposit. The fact explanation about the nature & source of cash deposit. The fact that the appellant deposited many times more cash in the bank that the appellant deposited many times more cash in the bank that the appellant deposited many times more cash in the bank account in the earlier year, shows that it was a regular feature of account in the earlier year, shows that it was a regular feature of account in the earlier year, shows that it was a regular feature of its business to deposit th its business to deposit the cash in the bank even during the e cash in the bank even during the period prior to the announcement of demonetization on period prior to the announcement of demonetization on period prior to the announcement of demonetization on 08.11.2016 and these facts have not been negated by the AO. It 08.11.2016 and these facts have not been negated by the AO. It 08.11.2016 and these facts have not been negated by the AO. It is also a fact that the appellant’s business is of restaurant, is also a fact that the appellant’s business is of restaurant, is also a fact that the appellant’s business is of restaurant, banquets & catering and parcel sales wher banquets & catering and parcel sales where there are cash sales e there are cash sales in abundance. Thus the track records of deposit of cash in in abundance. Thus the track records of deposit of cash in in abundance. Thus the track records of deposit of cash in immediate preceding year justify the genuineness of the cash immediate preceding year justify the genuineness of the cash immediate preceding year justify the genuineness of the cash deposit during the demonetization period. Further, the approach deposit during the demonetization period. Further, the approach deposit during the demonetization period. Further, the approach of the AO have resulted in double addition becaus of the AO have resulted in double addition because these sales e these sales have already been accounted for while arriving at gross profit in have already been accounted for while arriving at gross profit in have already been accounted for while arriving at gross profit in the trading account and then adding them separately also as the trading account and then adding them separately also as the trading account and then adding them separately also as unaccounted cash. This means that sales of Rs.2,58,78,235/ unaccounted cash. This means that sales of Rs.2,58,78,235/ unaccounted cash. This means that sales of Rs.2,58,78,235/- have once been credited in the trading account forming p have once been credited in the trading account forming p have once been credited in the trading account forming part of gross profit and then also adding them separately treating as gross profit and then also adding them separately treating as gross profit and then also adding them separately treating as unaccounted cash of Rs.2,58,78,235/ unaccounted cash of Rs.2,58,78,235/-. If sales are to be doubted . If sales are to be doubted then it has to be shown that these are bogus sales and there is then it has to be shown that these are bogus sales and there is then it has to be shown that these are bogus sales and there is either no corresponding purchases with the appellant or th either no corresponding purchases with the appellant or th either no corresponding purchases with the appellant or there were no such purchases against these sales. were no such purchases against these sales.
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 11 4863 & 4854/MUM/2024 8.7 The Hon’ble Supreme Court of India in the case of Lalchand 8.7 The Hon’ble Supreme Court of India in the case of Lalchand 8.7 The Hon’ble Supreme Court of India in the case of Lalchand Bhagat Ambica Ram v. Commissioner of Income Bhagat Ambica Ram v. Commissioner of Income-tax, [1959] 37 tax, [1959] 37 ITR 288 (SC) has held as under: ITR 288 (SC) has held as under: - “Section 143 of the Income “Section 143 of the Income-tax Act, 1961 - Assessment ent - Addition to income - Assessment year 1946 Assessment year 1946-47 - Assessee carried on Assessee carried on extensive business in grain as merchant and commission agent extensive business in grain as merchant and commission agent extensive business in grain as merchant and commission agent - Assessee maintained its books of account according to mercantile Assessee maintained its books of account according to mercantile Assessee maintained its books of account according to mercantile system and there were maintained in its cash books two system and there were maintained in its cash books two system and there were maintained in its cash books two accounts: one showing cash balances from day to day and other accounts: one showing cash balances from day to day and other accounts: one showing cash balances from day to day and other known as "Almirah account" wherein were kept large balances known as "Almirah account" wherein were kept large balances known as "Almirah account" wherein were kept large balances which were not required for day which were not required for day-to-day working of business day working of business - It filed its return showing loss in business filed its return showing loss in business - However, ITO noticed However, ITO noticed that assessee had encashed high denomination notes of value of assessee had encashed high denomination notes of value of assessee had encashed high denomination notes of value of Rs. 2.91 lakhs on 19 Rs. 2.91 lakhs on 19-1-1946 - Assessee's explanation that those Assessee's explanation that those notes formed part of its cash balances including cash balances in notes formed part of its cash balances including cash balances in notes formed part of its cash balances including cash balances in Almirah account was rejected by ITO who took into account Almirah account was rejected by ITO who took into account Almirah account was rejected by ITO who took into account several surrounding circumstances and included said sum in its rrounding circumstances and included said sum in its rrounding circumstances and included said sum in its total income - ITO also found that portions of entries in assessee's ITO also found that portions of entries in assessee's accounts to effect that money's had been received in high accounts to effect that money's had been received in high accounts to effect that money's had been received in high denomination notes were subsequent interpolations denomination notes were subsequent interpolations denomination notes were subsequent interpolations - Before Tribunal assessee Tribunal assessee stated that said entries were made in stated that said entries were made in nervousness after coming into force of High Denomination Bank nervousness after coming into force of High Denomination Bank nervousness after coming into force of High Denomination Bank Notes (Demonetization) Ordinance, 1946 on 12 Notes (Demonetization) Ordinance, 1946 on 12-1-1946, as it did 1946, as it did not know it had specific proof in its possession of having high not know it had specific proof in its possession of having high not know it had specific proof in its possession of having high denomination notes as part o denomination notes as part of its cash balances f its cash balances - Tribunal accepted assessee's explanation in respect of said interpolations accepted assessee's explanation in respect of said interpolations accepted assessee's explanation in respect of said interpolations and held that there was no other reason to suspect genuineness and held that there was no other reason to suspect genuineness and held that there was no other reason to suspect genuineness of account books of account books - It was also found that as per book entries It was also found that as per book entries cash balance on 12 cash balance on 12-1-1946 aggregated to more than Rs. 3.1 lakh ed to more than Rs. 3.1 lakh - However, examining cash book and taking into account all However, examining cash book and taking into account all However, examining cash book and taking into account all circumstances adverted to by ITO, Tribunal held that assessee circumstances adverted to by ITO, Tribunal held that assessee circumstances adverted to by ITO, Tribunal held that assessee might be expected to have possessed as part of its business cash might be expected to have possessed as part of its business cash might be expected to have possessed as part of its business cash balance of at least Rs. 1.5 lakhs in shap balance of at least Rs. 1.5 lakhs in shape of high denomination e of high denomination notes on date when said ordinance was promulgated but nature notes on date when said ordinance was promulgated but nature notes on date when said ordinance was promulgated but nature of source from which it derived remaining high denomination of source from which it derived remaining high denomination of source from which it derived remaining high denomination notes remained unexplained notes remained unexplained - Accordingly, Tribunal reduced Accordingly, Tribunal reduced addition - Whether when entries in books of account i Whether when entries in books of account i Whether when entries in books of account in regard to cash balances were held to be genuine, there was no escape cash balances were held to be genuine, there was no escape cash balances were held to be genuine, there was no escape from from from conclusion conclusion conclusion that that that assessee assessee assessee had had had offered offered offered reasonable reasonable reasonable Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 12 4863 & 4854/MUM/2024 explanation as to source of all high denomination notes which it explanation as to source of all high denomination notes which it explanation as to source of all high denomination notes which it encashed on 19 encashed on 19-1-1946 and it was not open to Tribunal to accept 1946 and it was not open to Tribunal to accept genuineness of those books and accept assessee's explanation in uineness of those books and accept assessee's explanation in uineness of those books and accept assessee's explanation in part and reject same in regard to balance sum part and reject same in regard to balance sum - Held, yes Held, yes - Whether, therefore, it was clear that Tribunal in arriving at its Whether, therefore, it was clear that Tribunal in arriving at its Whether, therefore, it was clear that Tribunal in arriving at its conclusion indulged in suspicions, conjectures and surmises and conclusion indulged in suspicions, conjectures and surmises and conclusion indulged in suspicions, conjectures and surmises and acted without any evidence or upon a view of facts which could without any evidence or upon a view of facts which could without any evidence or upon a view of facts which could not reasonably be entertained or finding was perverse which not reasonably be entertained or finding was perverse which not reasonably be entertained or finding was perverse which could not be sustained and Supreme Court was entitled to could not be sustained and Supreme Court was entitled to could not be sustained and Supreme Court was entitled to interfere with such finding interfere with such finding - Held, yes - Whether, therefore, Whether, therefore, addition made was l addition made was liable to be deleted - Held, yes” 8.8 The Hon’ble High Court of Delhi in the case of Principal 8.8 The Hon’ble High Court of Delhi in the case of Principal 8.8 The Hon’ble High Court of Delhi in the case of Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar IT Commissioner of Income Tax, 20, Delhi v. Akshit Kumar IT Commissioner of Income Tax, 20, Delhi v. Akshit Kumar IT Appeal 348 of 2019, [2021] 124 taxmann.com 123 (Delhi) has Appeal 348 of 2019, [2021] 124 taxmann.com 123 (Delhi) has Appeal 348 of 2019, [2021] 124 taxmann.com 123 (Delhi) has held as under: held as under: - “Section 56, read with sect “Section 56, read with sections 68 and 133, of the Income ions 68 and 133, of the Income-tax Act, 1961 - Income from other sources (Sale of opening stock) Income from other sources (Sale of opening stock) - Income from other sources (Sale of opening stock) Assessment year 2014 Assessment year 2014-15 - Assessee was engaged in business Assessee was engaged in business of textiles - All sales undertaken by assessee were in cash only All sales undertaken by assessee were in cash only All sales undertaken by assessee were in cash only - Noting such peculiarities, Reve Noting such peculiarities, Revenue decided for spot verification at nue decided for spot verification at place from where assessee purportedly carried on business place from where assessee purportedly carried on business place from where assessee purportedly carried on business - Survey revealed that business premises was abandoned and Survey revealed that business premises was abandoned and Survey revealed that business premises was abandoned and that there was no proof of any business undertaken by assessee that there was no proof of any business undertaken by assessee that there was no proof of any business undertaken by assessee - Based on survey report, Assessing Off Based on survey report, Assessing Officer concluded that entire icer concluded that entire cash deposit found in assessee's bank account was unexplained cash deposit found in assessee's bank account was unexplained cash deposit found in assessee's bank account was unexplained income and not sale proceeds income and not sale proceeds - Additions were thus made Additions were thus made towards unexplained income towards unexplained income - On appeal, Tribunal recorded that On appeal, Tribunal recorded that assessee had closed business in July, 2015 and s assessee had closed business in July, 2015 and s assessee had closed business in July, 2015 and survey was carried out in November, 2016 carried out in November, 2016 - It was also noted that entire It was also noted that entire opening stock, sales and closing stock of assessee was accepted opening stock, sales and closing stock of assessee was accepted opening stock, sales and closing stock of assessee was accepted during scrutiny assessment of previous year during scrutiny assessment of previous year - Based on such Based on such findings, Tribunal deleted additions made findings, Tribunal deleted additions made - Whether where Whether where quantum figure and opening stock was accepted in previous antum figure and opening stock was accepted in previous antum figure and opening stock was accepted in previous years during scrutiny assessments, receipt from sales made by years during scrutiny assessments, receipt from sales made by years during scrutiny assessments, receipt from sales made by assessee proprietary concern out of its opening stock could not be assessee proprietary concern out of its opening stock could not be assessee proprietary concern out of its opening stock could not be treated as unexplained income to be taxed as 'income from other treated as unexplained income to be taxed as 'income from other treated as unexplained income to be taxed as 'income from other sources' - Held, yes [Para 11] [In favour of assessee]” Held, yes [Para 11] [In favour of assessee]”
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 13 4863 & 4854/MUM/2024 8.9 The appellant has relied on the decision rendered in the case 8.9 The appellant has relied on the decision rendered in the case 8.9 The appellant has relied on the decision rendered in the case of Ramlal Jewellers (P.) Ltd. IT Appeal No. 1600 (MUM.) of 2023, of Ramlal Jewellers (P.) Ltd. IT Appeal No. 1600 (MUM.) of 2023, of Ramlal Jewellers (P.) Ltd. IT Appeal No. 1600 (MUM.) of 2023, [2023] 154 taxmann.com 584 (Mumbai [2023] 154 taxmann.com 584 (Mumbai - Trib.). The Hon’ble Trib.). The Hon’ble Tribunal has held Tribunal has held as under: - “Section 68 of the Income “Section 68 of the Income-tax Act, 1961 - Cash credit (Cash Cash credit (Cash deposit in bank) deposit in bank) - Assessment year 2016-17 - Assessee Assessee-company was engaged in jewellery business was engaged in jewellery business - During assessment During assessment proceedings, Assessing Officer noted that immediately after proceedings, Assessing Officer noted that immediately after proceedings, Assessing Officer noted that immediately after demonetization assessee had shown inflated cash sales and ization assessee had shown inflated cash sales and ization assessee had shown inflated cash sales and also made deposits in bank account which was completely also made deposits in bank account which was completely also made deposits in bank account which was completely abnormal as compared to earlier year and also subsequent year abnormal as compared to earlier year and also subsequent year abnormal as compared to earlier year and also subsequent year - He, therefore, taxed cash deposits under section 68 He, therefore, taxed cash deposits under section 68 - It was seen It was seen that assessee had m that assessee had maintained regular books of account which aintained regular books of account which was subject to audit and had produced entire sale bills, stock was subject to audit and had produced entire sale bills, stock was subject to audit and had produced entire sale bills, stock register and purchases and also quantitative tally of sales and register and purchases and also quantitative tally of sales and register and purchases and also quantitative tally of sales and corresponding stock corresponding stock - Addition under section 68 on account of Addition under section 68 on account of cash deposits could not be cash deposits could not be made simply on reason that during made simply on reason that during demonetization period, cash deposits vis demonetization period, cash deposits vis-a-vis cash sales ratio vis cash sales ratio was higher - Whether once, it had been established that sales Whether once, it had been established that sales representing outflow of stocks was duly accounted in books of representing outflow of stocks was duly accounted in books of representing outflow of stocks was duly accounted in books of account and there was no abnormal account and there was no abnormal profit during year, then there profit during year, then there was no justification to treat deposits made in bank account out of was no justification to treat deposits made in bank account out of was no justification to treat deposits made in bank account out of cash sales to be income from undisclosed sources cash sales to be income from undisclosed sources - Held, yes Held, yes - Whether, therefore addition made under section 68 was to be Whether, therefore addition made under section 68 was to be Whether, therefore addition made under section 68 was to be deleted - Held, yes [Para 14] [In Held, yes [Para 14] [In favour of assessee]” 8.10 The AO while not considering the cash in hand of the 8.10 The AO while not considering the cash in hand of the 8.10 The AO while not considering the cash in hand of the appellant has pointed out that though the appellant had claimed appellant has pointed out that though the appellant had claimed appellant has pointed out that though the appellant had claimed huge cash as on 08.11.2016 it has deposited cash regularly huge cash as on 08.11.2016 it has deposited cash regularly huge cash as on 08.11.2016 it has deposited cash regularly during the demonetization period i.e. the cash was de during the demonetization period i.e. the cash was de during the demonetization period i.e. the cash was deposited not in one go but deposited during whole demonetization period in one go but deposited during whole demonetization period in one go but deposited during whole demonetization period regularly. In the early years also the cash sales have been made regularly. In the early years also the cash sales have been made regularly. In the early years also the cash sales have been made by the appellant. There is nothing on record to indicate that the by the appellant. There is nothing on record to indicate that the by the appellant. There is nothing on record to indicate that the books of accounts have been disturbed in the earlier y books of accounts have been disturbed in the earlier y books of accounts have been disturbed in the earlier years. Therefore, the same have been accepted year after year. The Therefore, the same have been accepted year after year. The Therefore, the same have been accepted year after year. The opening stock, purchases, sales and closing stock have been opening stock, purchases, sales and closing stock have been opening stock, purchases, sales and closing stock have been accepted and no addition has been made on these grounds in the accepted and no addition has been made on these grounds in the accepted and no addition has been made on these grounds in the F.Y.2013-14 to 2015 14 to 2015-16. The AO has not rejected the audited 16. The AO has not rejected the audited books of account for F.Y.2016 f account for F.Y.2016-17 relevant to A.Y.2017 17 relevant to A.Y.2017-18 u/s.145(3) of the IT Act, 1961. Hence, once the book results are u/s.145(3) of the IT Act, 1961. Hence, once the book results are u/s.145(3) of the IT Act, 1961. Hence, once the book results are Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 14 4863 & 4854/MUM/2024 accepted by the AO, the sale reflected in those book results accepted by the AO, the sale reflected in those book results accepted by the AO, the sale reflected in those book results cannot be doubted otherwise it amounts to double taxation. cannot be doubted otherwise it amounts to double taxation. cannot be doubted otherwise it amounts to double taxation. Therefore the cash ba Therefore the cash balance available as on 08/11/2016 and lance available as on 08/11/2016 and deposits thereof in the bank account cannot be doubted. From the deposits thereof in the bank account cannot be doubted. From the deposits thereof in the bank account cannot be doubted. From the above facts, it is seen that the cash has been deposited by the above facts, it is seen that the cash has been deposited by the above facts, it is seen that the cash has been deposited by the Appellant out of the cash balance available with it which has Appellant out of the cash balance available with it which has Appellant out of the cash balance available with it which has been earned during regular c been earned during regular course of business. Further, the AO ourse of business. Further, the AO has not pointed out any discrepancy in the books of accounts. has not pointed out any discrepancy in the books of accounts. has not pointed out any discrepancy in the books of accounts. The AO has not brought out anything on record to indicate The AO has not brought out anything on record to indicate The AO has not brought out anything on record to indicate deficiency if any in the opening stock, purchases, sales, etc. deficiency if any in the opening stock, purchases, sales, etc. deficiency if any in the opening stock, purchases, sales, etc. 8.11 In view of the discussion in the 8.11 In view of the discussion in the preceding para and the facts preceding para and the facts of the case it is apparent that the AO has accepted the book of the case it is apparent that the AO has accepted the book of the case it is apparent that the AO has accepted the book results with the purchases, stock as well as the sales of the results with the purchases, stock as well as the sales of the results with the purchases, stock as well as the sales of the appellant. The AO failed to notice that the appellant had appellant. The AO failed to notice that the appellant had appellant. The AO failed to notice that the appellant had consistently high cash sales in all the years consistently high cash sales in all the years which were almost which were almost proportionate. The books of accounts were not rejected by the proportionate. The books of accounts were not rejected by the proportionate. The books of accounts were not rejected by the Assessing Officer and he has just concluded and conjectures that Assessing Officer and he has just concluded and conjectures that Assessing Officer and he has just concluded and conjectures that the cash sales have been inflated to cover the cash deposits the cash sales have been inflated to cover the cash deposits the cash sales have been inflated to cover the cash deposits during the demonetization period. In fact this ha during the demonetization period. In fact this has resulted in s resulted in double taxation of the amount of Rs.2,58,78,235/ double taxation of the amount of Rs.2,58,78,235/-, since the , since the sales having part of the book result. sales having part of the book result. 8.12 In view of the above discussion and decision relied upon by 8.12 In view of the above discussion and decision relied upon by 8.12 In view of the above discussion and decision relied upon by the appellant the addition of Rs. 2,58,78,235/ the appellant the addition of Rs. 2,58,78,235/- made by AO on made by AO on account of unex account of unexplained cash credit is hereby deleted. Ground no. plained cash credit is hereby deleted. Ground no. 1,2,3 of appeal are allowed. 1,2,3 of appeal are allowed.” 6.6 We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant material on record. The issue in dispute is whether the the relevant material on record. The issue in dispute is whether the the relevant material on record. The issue in dispute is whether the amount of Rs. 2,58,78,235/ 2,58,78,235/- is received in cash against the sales cash against the sales for the period from April 2016 to October 2016 for the period from April 2016 to October 2016 as claimed by the as claimed by the assessee or not. According to the Assessing Officer the assessee has ccording to the Assessing Officer the assessee has ccording to the Assessing Officer the assessee has manipulated its cash sales figures for the period from April 2016 to manipulated its cash sales figures for the period from April 2016 to manipulated its cash sales figures for the period from April 2016 to 8/11/2016 without correspondi 8/11/2016 without corresponding purchases in the books of ng purchases in the books of accounts and therefore the cash deposited of ₹2,58, accounts and therefore the cash deposited of 2,58,78,235/- was Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 15 4863 & 4854/MUM/2024 unexplained and undisclosed money of the assessee, liable to be unexplained and undisclosed money of the assessee, liable to be unexplained and undisclosed money of the assessee, liable to be taxed under section 68 of the A taxed under section 68 of the Act as unexplained cash credit. But ct as unexplained cash credit. But we find that the Ld. CIT(A) has we find that the Ld. CIT(A) has rebutted all the finding of the all the finding of the Assessing Officer in relation to holding the cash deposit as Assessing Officer in relation to holding the cash deposit as Assessing Officer in relation to holding the cash deposit as unexplained cash credit. The finding of the learned Assessing unexplained cash credit. The finding of the learned Assessing unexplained cash credit. The finding of the learned Assessing Officer that assessee manipulated the cash sales by way of delayed Officer that assessee manipulated the cash sales by way of delayed Officer that assessee manipulated the cash sales by way of delayed filing of VAT and service tax retu filing of VAT and service tax returns and payments, has been rns and payments, has been rejected by the Ld. CIT(A) observing that no one in the country had rejected by the Ld. CIT(A) observing that no one in the country had rejected by the Ld. CIT(A) observing that no one in the country had knowledge about the demonetisation which happened on the knowledge about the demonetisation which happened on the knowledge about the demonetisation which happened on the evening of 08/11/2016 and therefore it could not be said that the evening of 08/11/2016 and therefore it could not be said that the evening of 08/11/2016 and therefore it could not be said that the assessee delayed filing of the VAT and assessee delayed filing of the VAT and service tax returns to service tax returns to manipulate the sales. Further the learned CIT(A) observed that the sales. Further the learned CIT(A) observed that the sales. Further the learned CIT(A) observed that every month the service tax payment remains similar for most of the service tax payment remains similar for most of the service tax payment remains similar for most of the months of the financial year 2016 months of the financial year 2016-17 i.e. the current assessment 17 i.e. the current assessment year. The Ld. CIT(A) has further ex year. The Ld. CIT(A) has further explained that the business plained that the business activity of the assessee was such that it was having more volume in activity of the assessee was such that it was having more volume in activity of the assessee was such that it was having more volume in the month of the November and therefore the assessee needed to the month of the November and therefore the assessee needed to the month of the November and therefore the assessee needed to maintain the cash balance. The Ld. CIT(A) maintain the cash balance. The Ld. CIT(A) has further noted that further noted that the cash sales during the year und the cash sales during the year under consideration, is more or less er consideration, is more or less in line with the cash sales of the preceding assessment years, in line with the cash sales of the preceding assessment years, in line with the cash sales of the preceding assessment years, therefore he rejected the finding of the Assessing Officer that cash therefore he rejected the finding of the Assessing Officer that cash therefore he rejected the finding of the Assessing Officer that cash sales of the assessee had increased drastically during the year sales of the assessee had increased drastically during the year sales of the assessee had increased drastically during the year under consideration. The L under consideration. The Ld. CIT(A) has further noted that books of further noted that books of accounts of the assessee for a year under consideration has not accounts of the assessee for a year under consideration accounts of the assessee for a year under consideration Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 16 4863 & 4854/MUM/2024 been rejected by the Assessing Officer and the cash sales and a been rejected by the Assessing Officer and the cash sales and a been rejected by the Assessing Officer and the cash sales and a stock registers have been accepted by the Assessing Officer and stock registers have been accepted by the Assessing Officer and stock registers have been accepted by the Assessing Officer and held that in such circ in such circumstances, on one side the Assessing Officer umstances, on one side the Assessing Officer is accepting the cash sales recorded in the books of accounts, but is accepting the cash sales recorded in the books of accounts, but is accepting the cash sales recorded in the books of accounts, but on the other hand making addition for the same as unexplained on the other hand making addition for the same as unexplained on the other hand making addition for the same as unexplained cash credit is not justified. We agree with the contention of the Ld. cash credit is not justified. We agree with the contention of the Ld. cash credit is not justified. We agree with the contention of the Ld. CIT(A) that this approach of the Assessing Officer has resulted into this approach of the Assessing Officer has resulted into this approach of the Assessing Officer has resulted into double addition in the hands of the assessee. The learned counsel double addition in the hands of the assessee. The learned counsel double addition in the hands of the assessee. The learned counsel for the assessee relied on the decision of the coordinate bench of the for the assessee relied on the decision of the coordinate bench of the for the assessee relied on the decision of the coordinate bench of the tribunal in the case of tribunal in the case of Bina Goenka The Jewellers LLP in ITA N Bina Goenka The Jewellers LLP in for AY 2017 737/Mum/2014 for AY 2017-18, wherein the Tribunal held as ribunal held as under:
The explanation in relation to the cash deposit of ₹ 34,50,000/ 6. The explanation in relation to the cash deposit of 34,50,000/- of the assessee has not been found to be satisfactory by the Assessing of the assessee has not been found to be satisfactory by the Assessing of the assessee has not been found to be satisfactory by the Assessing Officer and therefore he treated the credit in boo Officer and therefore he treated the credit in books of accounts ks of accounts corresponding to cash deposit of ₹ 34,50,000/-as unexplained cash corresponding to cash deposit of as unexplained cash credit in terms of section 68 of the Act. Therefore, the issue in dispute credit in terms of section 68 of the Act. Therefore, the issue in dispute credit in terms of section 68 of the Act. Therefore, the issue in dispute precipitated before us is whether the cash sales shown by the precipitated before us is whether the cash sales shown by the precipitated before us is whether the cash sales shown by the assessee in its books of accounts on 28 assessee in its books of accounts on 28/10/2016, amounting to /10/2016, amounting to ₹ 34,50,000/-to explain the source of the cash deposits are genuine or to explain the source of the cash deposits are genuine or to explain the source of the cash deposits are genuine or not.
7. We find that firstly, the Assessing Officer held the cash sales as We find that firstly, the Assessing Officer held the cash sales as We find that firstly, the Assessing Officer held the cash sales as source of cash deposits as unexplained for the reason that all the cash source of cash deposits as unexplained for the reason that all the cash source of cash deposits as unexplained for the reason that all the cash sales of ₹ 34,50,000/ 50,000/-has been booked in the books of accounts on has been booked in the books of accounts on 28/10/2016 i.e. one date and no other cash sales are appearing in the 28/10/2016 i.e. one date and no other cash sales are appearing in the 28/10/2016 i.e. one date and no other cash sales are appearing in the books of accounts either prior or after this date, which according to the books of accounts either prior or after this date, which according to the books of accounts either prior or after this date, which according to the Assessing Officer was not believable in normal course of conduct of Assessing Officer was not believable in normal course of con Assessing Officer was not believable in normal course of con business. The learned counsel for assessee however has explained business. The learned counsel for assessee however has explained business. The learned counsel for assessee however has explained that the firm was constituted only in the preceding assessment year, that the firm was constituted only in the preceding assessment year, that the firm was constituted only in the preceding assessment year, having sales of ₹ 136.19 lakhs and no long history of sales for ₹ 136.19 lakhs and no long history of sales for ₹ 136.19 lakhs and no long history of sales for comparison with the sales for the year under consi comparison with the sales for the year under consideration. He further deration. He further explained that those cash sales of explained that those cash sales of ₹ 34,50,000/-was made on was made on 28/10/2016 in view of the ‘Diwali’ festival. He also explained that 28/10/2016 in view of the ‘Diwali’ festival. He also explained that 28/10/2016 in view of the ‘Diwali’ festival. He also explained that said cash sales of Rs. 34,50, 000/ said cash sales of Rs. 34,50, 000/-constituted 1.74% of the total constituted 1.74% of the total Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 17 4863 & 4854/MUM/2024 turnover of ₹ 1978.87 lakhs during the ye ₹ 1978.87 lakhs during the year. According to the learned ar. According to the learned counsel for assessee cash sales being included in the total turnover of counsel for assessee cash sales being included in the total turnover of counsel for assessee cash sales being included in the total turnover of the assessee for the year under consideration, sales offered to value- the assessee for the year under consideration, sales offered to value the assessee for the year under consideration, sales offered to value added tax (VAT) as per the invoices issued and the assessee paid tax added tax (VAT) as per the invoices issued and the assessee paid tax added tax (VAT) as per the invoices issued and the assessee paid tax liability and no loss has been caused to the coffers of the revenue loss has been caused to the coffers of the revenue loss has been caused to the coffers of the revenue either VAT or Income either VAT or Income-tax, hence, the source of the deposit of tax, hence, the source of the deposit of ₹ 34,50,000/- stands explained. stands explained. 7.1 Secondly, the Assessing Officer noticed that all the cash sales Secondly, the Assessing Officer noticed that all the cash sales Secondly, the Assessing Officer noticed that all the cash sales were below ₹ 2 lakhs but aggregate of whi ₹ 2 lakhs but aggregate of which being more than ch being more than ₹ 2 lakhs, the assessee has not complied to Rule 114E of Income-tax rules, lakhs, the assessee has not complied to Rule 114E of Income lakhs, the assessee has not complied to Rule 114E of Income- 1962, according to which the assessee was required to report cash 1962, according to which the assessee was required to report cash 1962, according to which the assessee was required to report cash transactions exceeding the specified sum of transactions exceeding the specified sum of ₹ 2 lakh for sale of the ₹ 2 lakh for sale of the goods or services. However goods or services. However the assessee referred to Central Board of the assessee referred to Central Board of Direct Taxes (CBDT), circular dated 22/12/2016 and submitted that Direct Taxes (CBDT), circular dated 22/12/2016 and submitted that Direct Taxes (CBDT), circular dated 22/12/2016 and submitted that said limit was applicable for each transaction and not on aggregate said limit was applicable for each transaction and not on aggregate said limit was applicable for each transaction and not on aggregate cash sales, and therefore, there was no requirement for reporting such cash sales, and therefore, there was no requirement for reporting such cash sales, and therefore, there was no requirement for reporting such cash sales under rule 115E of Income tax rules,1962. s under rule 115E of Income tax rules,1962. 7.2 Thirdly, the learned counsel for the assessee submitted that all Thirdly, the learned counsel for the assessee submitted that all Thirdly, the learned counsel for the assessee submitted that all the comparative details of cash deposit and cash sales, copy of cash the comparative details of cash deposit and cash sales, copy of cash the comparative details of cash deposit and cash sales, copy of cash memo in respect of cash sales, ledger account of purchases memo in respect of cash sales, ledger account of purchases memo in respect of cash sales, ledger account of purchases corresponding to the cash sales, stock of finished goods for the entire g to the cash sales, stock of finished goods for the entire g to the cash sales, stock of finished goods for the entire previous previous previous year year year corresponding corresponding corresponding to to to the the the assessment assessment assessment year year year under under under consideration, copy of cash book was filed before the lower authorities, consideration, copy of cash book was filed before the lower authorities, consideration, copy of cash book was filed before the lower authorities, but the Ld. CIT(A) recorded incorrectly that no cash book for the period but the Ld. CIT(A) recorded incorrectly that no cash book for the but the Ld. CIT(A) recorded incorrectly that no cash book for the was filed and he sustained the addition for this reason. was filed and he sustained the addition for this reason. 7.3 In view of observation of the facts in the case of the assessee, In view of observation of the facts in the case of the assessee, In view of observation of the facts in the case of the assessee, we are of the opinion that the only basis for treating the cash deposit we are of the opinion that the only basis for treating the cash deposit we are of the opinion that the only basis for treating the cash deposit as unexplained cash credit by the Assessing Office as unexplained cash credit by the Assessing Officer is cash sales r is cash sales recorded in the books of accounts immediately prior to the recorded in the books of accounts immediately prior to the recorded in the books of accounts immediately prior to the demonetization period as compared to no cash sales either before or demonetization period as compared to no cash sales either before or demonetization period as compared to no cash sales either before or after that period. Therefore the addition has been mainly on the after that period. Therefore the addition has been mainly on the after that period. Therefore the addition has been mainly on the suspicion that cash sales are bogus or non suspicion that cash sales are bogus or non-genuine. In our opinion just ne. In our opinion just because no other cash sales were recorded in the previous year, it because no other cash sales were recorded in the previous year, it because no other cash sales were recorded in the previous year, it cannot be presumed that such cash sales made in the year under cannot be presumed that such cash sales made in the year under cannot be presumed that such cash sales made in the year under consideration are bogus. The Assessing Officer has ignored the fact consideration are bogus. The Assessing Officer has ignored the fact consideration are bogus. The Assessing Officer has ignored the fact that cash sales are out of stock g that cash sales are out of stock genuinely held and acquired by the enuinely held and acquired by the assessee through purchase invoices, which were duly produced before assessee through purchase invoices, which were duly produced before assessee through purchase invoices, which were duly produced before the Assessing Officer, but same were not doubted by him. The learned the Assessing Officer, but same were not doubted by him. The learned the Assessing Officer, but same were not doubted by him. The learned DR also could not controvert the copy of purchases corresponding to DR also could not controvert the copy of purchases corresponding to DR also could not controvert the copy of purchases corresponding to the sales and stock register, filed by the assessee in the paper book. ck register, filed by the assessee in the paper book. ck register, filed by the assessee in the paper book. Probably, the Assessing Officer suspected on the cash sales for the Probably, the Assessing Officer suspected on the cash sales for the Probably, the Assessing Officer suspected on the cash sales for the reason that same are below reason that same are below ₹ 2 lakhs and made on the same date, ₹ 2 lakhs and made on the same date, however in our opinion in view of the festival season of ‘Diwali’, such however in our opinion in view of the festival season of ‘Diwali’, suc however in our opinion in view of the festival season of ‘Diwali’, suc cash sales cannot be ruled out unless proved to be otherwise. It is for cash sales cannot be ruled out unless proved to be otherwise. It is for cash sales cannot be ruled out unless proved to be otherwise. It is for Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 18 4863 & 4854/MUM/2024 the Assessing Officer to bring on record evidences to support his the Assessing Officer to bring on record evidences to support his the Assessing Officer to bring on record evidences to support his allegations. The finding of the Assessing Officer is based on the merely allegations. The finding of the Assessing Officer is based on the merely allegations. The finding of the Assessing Officer is based on the merely suspicion and no documentary evidence have suspicion and no documentary evidence have been brought on record been brought on record by the Assessing Officer to establish that such cash sales were not by the Assessing Officer to establish that such cash sales were not by the Assessing Officer to establish that such cash sales were not genuine. In our opinion, suspicion, howsoever strong, cannot take genuine. In our opinion, suspicion, howsoever strong, cannot take genuine. In our opinion, suspicion, howsoever strong, cannot take place of the evidences. Similar finding has been given by the place of the evidences. Similar finding has been given by the place of the evidences. Similar finding has been given by the Coordinate Bench of Tribunal in the c Coordinate Bench of Tribunal in the case of Alchemist Touchnology Vs ase of Alchemist Touchnology Vs ACIT in .ITA No. 1689/Del/2022, which is reproduced as under: ACIT in .ITA No. 1689/Del/2022, which is reproduced as under: ACIT in .ITA No. 1689/Del/2022, which is reproduced as under: “10. We find that from perusal of the records, there is no evidence 10. We find that from perusal of the records, there is no evidence 10. We find that from perusal of the records, there is no evidence to prove that the „amounts sent‟ shown in the hard disk is to prove that the „amounts sent shown in the hard disk is actually amounts sent by assessee company in hawala route actually amounts sent by assessee company in hawala route actually amounts sent by assessee company in hawala route which had ultimately found its way in the form of share capital which had ultimately found its way in the form of share capital which had ultimately found its way in the form of share capital and share premium under FDI route. The revenue had completely and share premium under FDI route. The revenue had completely and share premium under FDI route. The revenue had completely addressed this issue and made an addition pur addressed this issue and made an addition purely on suspicion ely on suspicion and surmise without any basis thereby making the addition and surmise without any basis thereby making the addition and surmise without any basis thereby making the addition totally unsustainable in the eyes of law. On the contrary, the totally unsustainable in the eyes of law. On the contrary, the totally unsustainable in the eyes of law. On the contrary, the assessee had stated that LGF had sent 19500000 USD from assessee had stated that LGF had sent 19500000 USD from assessee had stated that LGF had sent 19500000 USD from Cyprus and after deduction of LC charges and other overseas Cyprus and after deduction of LC charges and other overseas Cyprus and after deduction of LC charges and other overseas bank charges , the assessee could ultimately receive only nk charges , the assessee could ultimately receive only nk charges , the assessee could ultimately receive only 18621973.93 USD equivalent to Rs 100 crores in India under FDI 18621973.93 USD equivalent to Rs 100 crores in India under FDI 18621973.93 USD equivalent to Rs 100 crores in India under FDI route as share capital and share premium. In support of this, the route as share capital and share premium. In support of this, the route as share capital and share premium. In support of this, the assessee had duly provided all the necessary documents as assessee had duly provided all the necessary documents as assessee had duly provided all the necessary documents as listed above. The assessee from the inception had always taken The assessee from the inception had always taken the stand that it had not sent any monies abroad in hawala the stand that it had not sent any monies abroad in hawala the stand that it had not sent any monies abroad in hawala route. The assessee cannot be asked to prove the negative. It is route. The assessee cannot be asked to prove the negative. It is route. The assessee cannot be asked to prove the negative. It is for the revenue to prove the same with cogent evidences, which is for the revenue to prove the same with cogent evidences, which is for the revenue to prove the same with cogent evidences, which is not done in the not done in the instant case. We find that the revenue had merely instant case. We find that the revenue had merely proceeded to make the addition on suspicion. It is trite law that proceeded to make the addition on suspicion. It is trite law that proceeded to make the addition on suspicion. It is trite law that suspicion howsoever strong would not partake the character of suspicion howsoever strong would not partake the character of suspicion howsoever strong would not partake the character of legal evidence and hence a greater onus is casted on the revenue legal evidence and hence a greater onus is casted on the revenue legal evidence and hence a greater onus is casted on the revenue to bring on record cogent evidences to justify its suspicion, which ecord cogent evidences to justify its suspicion, which ecord cogent evidences to justify its suspicion, which is conspicuously absent in the instant case. The only material is conspicuously absent in the instant case. The only material is conspicuously absent in the instant case. The only material that is relied upon by the revenue is the hard disk seized during that is relied upon by the revenue is the hard disk seized during that is relied upon by the revenue is the hard disk seized during search which only contained Page | 9 search which only contained Page | 9 Alchemist Touchnology Alchemist Touchnology f „amounts sent‟ and „amounts received and „amounts received‟. Nowhere the details of „amounts sent the said material even suggested that the amounts were sent by the said material even suggested that the amounts were sent by the said material even suggested that the amounts were sent by assessee company in illegal route which in turn had surfaced assessee company in illegal route which in turn had surfaced assessee company in illegal route which in turn had surfaced back in the form of share capital and premium under FDI route back in the form of share capital and premium under FDI route back in the form of share capital and premium under FDI route from Cyprus. Though t from Cyprus. Though the presumption u/s 292C of the Act would go in favour of the revenue, it cannot be brushed aside would go in favour of the revenue, it cannot be brushed aside would go in favour of the revenue, it cannot be brushed aside that the said presumption is a rebuttable presumption and that the said presumption is a rebuttable presumption and that the said presumption is a rebuttable presumption and assessee had duly discharged its onus on the sa assessee had duly discharged its onus on the same. Moreover, me. Moreover, the present assessee herein is an assessee proceeded the present assessee herein is an assessee proceeded the present assessee herein is an assessee proceeded u/s 153C of the Act and hence it is all the more necessary for the of the Act and hence it is all the more necessary for the of the Act and hence it is all the more necessary for the revenue to arrive at the satisfaction that income or materials or revenue to arrive at the satisfaction that income or materials or revenue to arrive at the satisfaction that income or materials or Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 19 4863 & 4854/MUM/2024 documents does not belong or pertain to the searched person and cuments does not belong or pertain to the searched person and cuments does not belong or pertain to the searched person and indeed belongs to third person (i.e 153C assessee). Viewed from indeed belongs to third person (i.e 153C assessee). Viewed from indeed belongs to third person (i.e 153C assessee). Viewed from this angle, it could be safely concluded that presumption this angle, it could be safely concluded that presumption this angle, it could be safely concluded that presumption u/s 292C of the Ac of the Act would apply only to the person proceeded t would apply only to the person proceeded u/s 153A of the Act and not for the assessee of the Act and not for the assessee u/s 153C of the Act. of the Act.” 7.4 In view of facts of instant case, In view of facts of instant case, respectfully, following the respectfully, following the coordinate bench (supra), we reject the finding of the lower authorities coordinate bench (supra), we reject the finding of the lower authorities coordinate bench (supra), we reject the finding of the lower authorities that cash sales of the assessee are not genuine. Once the cash sales that cash sales of the assessee are not genuine. Once the cash sales that cash sales of the assessee are not genuine. Once the cash sales are accepted to be genuine, the cash received thereon and later are accepted to be genuine, the cash received thereon and later are accepted to be genuine, the cash received thereon and later deposited into bank ac deposited into bank account by crediting the cash and debiting the count by crediting the cash and debiting the bank account satisfactorily explain the credit entry in the books of bank account satisfactorily explain the credit entry in the books of bank account satisfactorily explain the credit entry in the books of accounts and therefore no addition in terms of section 68 of the Act is accounts and therefore no addition in terms of section 68 of the Act is accounts and therefore no addition in terms of section 68 of the Act is warranted for corresponding cash deposit of warranted for corresponding cash deposit of ₹ 34,50,000/-in the case in the case of the assessee. The ground Nos. 2 to 4 of the appeal of the assessee f the assessee. The ground Nos. 2 to 4 of the appeal of the assessee f the assessee. The ground Nos. 2 to 4 of the appeal of the assessee accordingly allowed. accordingly allowed.” 6.7 In view of the aforesaid discussion, we are of considered In view of the aforesaid discussion, we are of considered In view of the aforesaid discussion, we are of considered opinion that the order of the Ld. CIT(A) on the issue in dispute is opinion that the order of the Ld. CIT(A) on the issue in dispute is opinion that the order of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find well reasoned and we do not find any infirmity in the same, any infirmity in the same, accordingly, we uphold the same. The grounds of the appeal of the we uphold the same. The grounds of the appeal of the we uphold the same. The grounds of the appeal of the revenue are accordingly dismissed. accordingly dismissed.
Now, we take up, the appeal of the we take up, the appeal of the Revenue Revenue for assessment year 2017-18 arising from rectification 18 arising from rectification order passed by the passed by the Assessing Officer rectifying the quantum of additio ing Officer rectifying the quantum of additio ing Officer rectifying the quantum of addition made under section 68 of the Act while passing the assessment order under ct while passing the assessment order under ct while passing the assessment order under section 143(3) of the section 143(3) of the Act. The grounds raised by the . The grounds raised by the Revenue are reproduced as under: reproduced as under:
1. Whether on the facts and in the circumstances 1. Whether on the facts and in the circumstances of the case and of the case and in law, the La, CIT(A) failed to appreciate that an addition of Rs. in law, the La, CIT(A) failed to appreciate that an addition of Rs. in law, the La, CIT(A) failed to appreciate that an addition of Rs. 2,58,78,235/ 2,58,78,235/- was required to be made in the order u/s 143(3) was required to be made in the order u/s 143(3) dated 30.12.2019 u/s 68 of the Act, 1961 for the reasons dated 30.12.2019 u/s 68 of the Act, 1961 for the reasons dated 30.12.2019 u/s 68 of the Act, 1961 for the reasons discussed in the said order, whereas the addition was discussed in the said order, whereas the addition was discussed in the said order, whereas the addition was made to the tune of Rs. 2,58,78,235/ the tune of Rs. 2,58,78,235/- only resulting in the total income only resulting in the total income being assessed lower by Rs. 21,81,306/-? being assessed lower by Rs. 21,81,306/ Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 20 4863 & 4854/MUM/2024
2. Whether on the facts and in the circumstances of the case, the 2. Whether on the facts and in the circumstances of the case, the 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was correct in law in holding that the addition of Rs. Ld. CIT(A) was correct in law in holding that the addition of Rs. Ld. CIT(A) was correct in law in holding that the addition of Rs. 21,81,306/- made vide order u/s 154 dated 26.03.2024 also made vide order u/s 154 dated 26.03.2024 also made vide order u/s 154 dated 26.03.2024 also stands deleted on the ground that the additions made u/s 68 in stands deleted on the ground that the additions made u/s 68 in stands deleted on the ground that the additions made u/s 68 in the order u/s 143(3) dated 30.12.2019 has been directed to be the order u/s 143(3) dated 30.12.2019 has been directed to be the order u/s 143(3) dated 30.12.2019 has been directed to be deleted for detailed reasons in the appellate order against the deleted for detailed reasons in the appellate order against the deleted for detailed reasons in the appellate order against the order u/s 143(3)P order u/s 143(3)P 3. Whether on the facts and in the circumstances of the case and 3. Whether on the facts and in the circumstances of the case and 3. Whether on the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) 16.07.2024 in the appeal in law, the order of the Ld. CIT(A) 16.07.2024 in the appeal in law, the order of the Ld. CIT(A) 16.07.2024 in the appeal against the order u/s 143(3), deleting the addition made u/s 68 against the order u/s 143(3), deleting the addition made u/s 68 against the order u/s 143(3), deleting the addition made u/s 68 of Rs. 2,58,78,235/ of Rs. 2,58,78,235/- is erroneous as the assessee has failed to is erroneous as the assessee has failed to discharge the onus to prove the genuineness of the source of the scharge the onus to prove the genuineness of the source of the scharge the onus to prove the genuineness of the source of the cash deposit in its accounts and, consequently, the addition of cash deposit in its accounts and, consequently, the addition of cash deposit in its accounts and, consequently, the addition of Rs. 21,86,306/ Rs. 21,86,306/- being the computation mistake in the addition being the computation mistake in the addition made u/s 68 is also required to be confirmed? made u/s 68 is also required to be confirmed? 7.1 We have heard riv have heard rival submission of the parties and perused the al submission of the parties and perused the relevant material on record. relevant material on record. We find that in the rectification find that in the rectification order, the Assessing Officer has merely rectified the the Assessing Officer has merely rectified the arithmetical arithmetical mistake and increased the amount of addition under s the amount of addition under sections 68 by the ections 68 by the amount of Rs.21,81, Rs.21,81,306/-. The Ld. CIT(A) has deleted the said . The Ld. CIT(A) has deleted the said enhancement of the addition in view of the additi enhancement of the addition in view of the addition under section on under section 143(3) of the Act deleted by him. The relevant finding of the Ld. ct deleted by him. The relevant finding of the Ld. ct deleted by him. The relevant finding of the Ld. CIT(A) is reproduced as under: CIT(A) is reproduced as under:
“12. The appellant has filed appeal vide 12. The appellant has filed appeal vide appeal no. NFAC/2016 appeal no. NFAC/2016- 17/10361725 on 20.04.2024 against order u/s 154 of the Act dated 17/10361725 on 20.04.2024 against order u/s 154 of the Act dated 17/10361725 on 20.04.2024 against order u/s 154 of the Act dated 26.03.2024 for A.Y. 2017 26.03.2024 for A.Y. 2017-18. The issue in this appeal is related to 18. The issue in this appeal is related to the addition of Rs. 2,58,78,235/ the addition of Rs. 2,58,78,235/- made by AO vide order u/s 143(3) made by AO vide order u/s 143(3) of the Act dated 30.12.2019 on acco of the Act dated 30.12.2019 on account of unexplained cash credit. unt of unexplained cash credit. The AO has enhanced the addition of Rs. 2,58,78,235/ The AO has enhanced the addition of Rs. 2,58,78,235/ The AO has enhanced the addition of Rs. 2,58,78,235/- by Rs. 21,81,306/- vide order u/s 154 of the Act dated 26.03.2024 stating vide order u/s 154 of the Act dated 26.03.2024 stating vide order u/s 154 of the Act dated 26.03.2024 stating that there is a mistake apparent on record while calculating the total that there is a mistake apparent on record while calculating the total that there is a mistake apparent on record while calculating the total cash deposit made by appe cash deposit made by appellant during the demonetization period. llant during the demonetization period. The cash deposited by the appellant in specified bank notes was of The cash deposited by the appellant in specified bank notes was of The cash deposited by the appellant in specified bank notes was of Rs. 3,23,84,000/ Rs. 3,23,84,000/- and as on 01.04.2016 the appellant was having and as on 01.04.2016 the appellant was having cash in hand balance of Rs. 43,24,459/ cash in hand balance of Rs. 43,24,459/-. The AO while giving credit . The AO while giving credit Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 21 4863 & 4854/MUM/2024 to the cash in ha to the cash in hand balance of Rs. 43,24,459/- made the addition of made the addition of Rs. 2,58,78,235/ Rs. 2,58,78,235/- instead of Rs. 2,80,59,541/-. Therefore, the AO . Therefore, the AO held that incorrect addition was made. Therefore, the mistake in held that incorrect addition was made. Therefore, the mistake in held that incorrect addition was made. Therefore, the mistake in apparent on record was rectified u/s.154 of the IT Act and addition apparent on record was rectified u/s.154 of the IT Act and addition apparent on record was rectified u/s.154 of the IT Act and addition of Rs.21,81,306/ 21,81,306/- was made.
The rectification order, submission of the appellant and the facts 13. The rectification order, submission of the appellant and the facts 13. The rectification order, submission of the appellant and the facts of the case have been carefully considered. The addition made by AO of the case have been carefully considered. The addition made by AO of the case have been carefully considered. The addition made by AO in order u/s 154 of the Act dated 26.03.2024 is part of the addition in order u/s 154 of the Act dated 26.03.2024 is part of the addition in order u/s 154 of the Act dated 26.03.2024 is part of the addition of Rs.2,58,78,235/ of Rs.2,58,78,235/- made in A.Y.2017-18 vide order dated 18 vide order dated 30.12.2019. The facts of the case being the same as quantum 30.12.2019. The facts of the case being the same as quantum 30.12.2019. The facts of the case being the same as quantum addition made in the order dated 30.12.2019 for A.Y.2017 addition made in the order dated 30.12.2019 for A.Y.2017 addition made in the order dated 30.12.2019 for A.Y.2017-18, this appeal is taken up along with the quantum addition. After detailed appeal is taken up along with the quantum addition. After detailed appeal is taken up along with the quantum addition. After detailed discussion in the foregoing par discussion in the foregoing paras, the addition of Rs.2,58,78,235/ as, the addition of Rs.2,58,78,235/- u/s 68 of the Act on account of unexplained cash credit has been u/s 68 of the Act on account of unexplained cash credit has been u/s 68 of the Act on account of unexplained cash credit has been deleted vide para no. 8.12. In view of the detailed discussion made in deleted vide para no. 8.12. In view of the detailed discussion made in deleted vide para no. 8.12. In view of the detailed discussion made in the above order, addition made vide order u/s 154 of the Act the above order, addition made vide order u/s 154 of the Act the above order, addition made vide order u/s 154 of the Act 26.03.2024 of Rs. 21,8 26.03.2024 of Rs. 21,81,306/- also stands deleted. The ground no. also stands deleted. The ground no. 1,2 and 3 of appeal filed in appeal no. NFAC/2016 1,2 and 3 of appeal filed in appeal no. NFAC/2016-17/10361725 are 17/10361725 are allowed.” 7.2 We are of the opinion that since the main addition made in the are of the opinion that since the main addition made in the are of the opinion that since the main addition made in the ct has been deleted assessment order under section 143(3) of the A er under section 143(3) of the Act has been deleted by the Ld. CIT(A), we do not find any infirmity in the order of the Ld. the Ld. CIT(A), we do not find any infirmity in the order of the Ld. the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A) in deleting the rectified addition for the cash deposits. The CIT(A) in deleting the rectified addition for the cash deposits. Th CIT(A) in deleting the rectified addition for the cash deposits. Th grounds of the appeal of the R grounds of the appeal of the Revenue are accordingly dismissed. accordingly dismissed.
Now, we take up the appeal of the R up the appeal of the Revenue for asse evenue for assessment year 2018-19. The grounds raised
by the 19. The grounds raised by the Revenue in its appeal are in its appeal are reproduced as under: reproduced as under:
Whether on the facts and in the circumstances of the case and in 1. Whether on the facts and in the circumstances of the case and in 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. law, the Ld. CIT(A) was justified in deleting the addition of Rs. law, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,44,64,764/ 10,44,64,764/ - made by the AO on account of cash credit u/s 68 of AO on account of cash credit u/s 68 of the Act of the Income the Act of the Income-tax Act, 1961.
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 22 4863 & 4854/MUM/2024
2. Whether on the facts and in the circumstances of the case and in 2. Whether on the facts and in the circumstances of the case and in 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee law, the Ld. CIT(A) has erred in ignoring the fact that the assessee law, the Ld. CIT(A) has erred in ignoring the fact that the assessee failed to discharge the onus to prove the g failed to discharge the onus to prove the genuineness of source of the enuineness of source of the Share Premium received from 10 parties who did not comply to the Share Premium received from 10 parties who did not comply to the Share Premium received from 10 parties who did not comply to the notices issued u/s 133(6) of the Act. notices issued u/s 133(6) of the Act.
3. Whether on the facts and in the circumstances of the case and in 3. Whether on the facts and in the circumstances of the case and in 3. Whether on the facts and in the circumstances of the case and in law, the Id CIT(A) has erred in deleting the disallowance law, the Id CIT(A) has erred in deleting the disallowance law, the Id CIT(A) has erred in deleting the disallowance of Rs. 54,63,632/- made on account of disallowance of rent expenses u/s made on account of disallowance of rent expenses u/s made on account of disallowance of rent expenses u/s 40(a)(ia) on the basis of additional evidences which were not 40(a)(ia) on the basis of additional evidences which were not 40(a)(ia) on the basis of additional evidences which were not submitted before the assessing officer during the assessment submitted before the assessing officer during the assessment submitted before the assessing officer during the assessment proceedings despite multiple opportunities given to the asse proceedings despite multiple opportunities given to the asse proceedings despite multiple opportunities given to the assessee.
4. Whether on the facts and in the circumstances of the case and in 4. Whether on the facts and in the circumstances of the case and in 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the additional evidences law, the Ld. CIT(A) has erred in accepting the additional evidences law, the Ld. CIT(A) has erred in accepting the additional evidences ignoring the fact that the assessee has not claimed any sufficient ignoring the fact that the assessee has not claimed any sufficient ignoring the fact that the assessee has not claimed any sufficient cause that may have prevented him from filing cause that may have prevented him from filing the evidence during the evidence during the assessment procedure. the assessment procedure. 5. The appellant prays that the order of the CIT(A) on the above 5. The appellant prays that the order of the CIT(A) on the above 5. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. grounds be set aside and that of the Assessing Officer be restored. grounds be set aside and that of the Assessing Officer be restored. 8.1 The ground No. No. 1 and 2 of the appeal relate and 2 of the appeal relate to addition of ₹10,44,64,764/-deleted by the Ld. CIT(A) which was made by the deleted by the Ld. CIT(A) which was made by the deleted by the Ld. CIT(A) which was made by the Assessing Officer treating the share capital including share Assessing Officer treating the share capital including share Assessing Officer treating the share capital including share premium received from 14 parties as unexplained cash credit in premium received from 14 parties as unexplained cash credit in premium received from 14 parties as unexplained cash credit in terms of section 68 of the terms of section 68 of the Act.
8.2 Briefly stated facts qua the issue in dispu Briefly stated facts qua the issue in dispute are that during te are that during the year under consi the year under consideration the assessee issued 2,43, deration the assessee issued 2,43,379 No. of equity shares to 67 shareholders and received aggregate amount of equity shares to 67 shareholders and received aggregate amount of equity shares to 67 shareholders and received aggregate amount of ₹79,10,06,636/- (₹ 24,73,790/- towards towards share share capital capital and and ₹78,85,26,46/- towards security premium). The shar towards security premium). The shar towards security premium). The share capital was received through a Portfolio Management Company (PMC) named as received through a Portfolio Management Company (PMC) named as received through a Portfolio Management Company (PMC) named as Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 23 4863 & 4854/MUM/2024 Alpha Capital Advisors Private Limited wherein the shareholders Alpha Capital Advisors Private Limited wherein the shareholders Alpha Capital Advisors Private Limited wherein the shareholders had given the irrevocable irrevocable power of attorney to the PMC to make and power of attorney to the PMC to make and manage their investment. Accordingly, the PMC entered into manage their investment. Accordingly, the PMC en manage their investment. Accordingly, the PMC en agreement dated 09/06/2017 with the assessee on behalf of all the agreement dated 09/06/2017 with the assessee on behalf of all the agreement dated 09/06/2017 with the assessee on behalf of all the 67 shareholders and pursuant to 67 shareholders and pursuant to which shares were issued. All the were issued. All the 67 shareholders transferred their money from their account to the 67 shareholders transferred their money from their account to the 67 shareholders transferred their money from their account to the PMC’s bank account PMC’s bank account, who in turn transferred the funds to the the funds to the assessee’s bank accou assessee’s bank account. During the assessment proce nt. During the assessment proceeding, the assessee filed details of shareholders along with their documents assessee filed details of shareholders along with their documents assessee filed details of shareholders along with their documents supporting the three ingredients supporting the three ingredients required for discharging onus required for discharging onus under section 68 of the A under section 68 of the Act. A list of said documents have been cuments have been reproduced on page 17 para 3.1.3 of the order of ld CIT(A). For reproduced on page 17 para 3.1.3 of the order of ld CIT(A). reproduced on page 17 para 3.1.3 of the order of ld CIT(A). ready reference, said list is reproduced as under: said list is reproduced as under:
3.1.3 In addition to the above, the Appellant filed following 3.1.3 In addition to the above, the Appellant filed following 3.1.3 In addition to the above, the Appellant filed following documents on also: documents on also: Confirmation from the Confirmation from the 11 shareholders [refer point 14 of paper er point 14 of paper book] ITR Financial statement of few shareholders (refer page 289 ITR Financial statement of few shareholders (refer page 289- ITR Financial statement of few shareholders (refer page 289 369 of paper book] 369 of paper book] Copy of PAS 3 filed with Ministry of Corporate Affairs towards Copy of PAS 3 filed with Ministry of Corporate Affairs towards Copy of PAS 3 filed with Ministry of Corporate Affairs towards issue of Share Capital [r issue of Share Capital [refer page 370-414 of paper book] 414 of paper book] Copy of Board Resolutions of Copy of Board Resolutions of the Appellant company towards the Appellant company towards issue of share capital [refer page 415 issue of share capital [refer page 415-436 of paper book| 436 of paper book| PMS Registration Certificate of Alpha Capital Advisors Pvt. Ltd PMS Registration Certificate of Alpha Capital Advisors Pvt. Ltd PMS Registration Certificate of Alpha Capital Advisors Pvt. Ltd and Certificate of incorporation change in name refer page and Certificate of incorporation change in name refer page and Certificate of incorporation change in name refer page 437-439 of paper book] 439 of paper book] Submission of Disclosu Submission of Disclosure Report filed by PMC with SEBI re Report filed by PMC with SEBI wherein it has been categorically stated that the PMC is wherein it has been categorically stated that the PMC is wherein it has been categorically stated that the PMC is making investment in Appellant Company. The said disclosure making investment in Appellant Company. The said disclosure making investment in Appellant Company. The said disclosure Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 24 4863 & 4854/MUM/2024 given at page no. 1121 of the disclosure document [refer page given at page no. 1121 of the disclosure document [refer page given at page no. 1121 of the disclosure document [refer page 440-485 of paper book] 485 of paper book] 8.3 The AO issued no The AO issued notice under section 133(6) of the A ce under section 133(6) of the Act to all the 67 67 67 shareholders shareholders shareholders for for for verification verification verification of of of their their their identity identity identity and and and creditworthiness but only 53 shareholders complied with said creditworthiness but only 53 shareholders complied with said creditworthiness but only 53 shareholders complied with said notices and remaining 14 shareholders having share capital notices and remaining 14 shareholders having share capital notices and remaining 14 shareholders having share capital amounting to Rs. 10,44,64,764/ amounting to Rs. 10,44,64,764/- did not respond to the notice did not respond to the notice issued under section 133(6) of the A ed under section 133(6) of the Act. The AO accordingly added accordingly added the said sum as unexplained cash the said sum as unexplained cash credit u/s 68 of the u/s 68 of the Act. The sum received from the shareholders shareholders which was held as unexplained cash held as unexplained cash credit is reproduced as credit is reproduced as under:
“8.3.1 The AO made addition u/s.68 of the IT Act in respect of 8.3.1 The AO made addition u/s.68 of the IT Act in respect of 8.3.1 The AO made addition u/s.68 of the IT Act in respect of the following parties the following parties Sr. No. Name Name Amount 1. BHATIA SLIRESH BHATIA SLIRESH 2381081 2381081 2. GAWANDE CONSULTANTS PVT LTD GAWANDE CONSULTANTS PVT LTD 2381081 2381081 3. FALCON MARINE EXPORTS LTD FALCON MARINE EXPORTS LTD 4758975 4758975 4. ASHISH HARESH JAGTIANI ASHISH HARESH JAGTIANI 1906140 1906140 5 AMIN WAHID GOPALANI & AMIN WAHID GOPALANI 1906140 1906140 SUNEETA WAHIDGOPALANI SUNEETA WAHIDGOPALANI 6. SUMEET BALDEV CHOPRA SUMEET BALDEV CHOPRA 4758975 4758975 7. WELSPUN GROUP MASTER TRUST WELSPUN GROUP MASTER TRUST 42840341 428 8. SAVE POWER LLP SAVE POWER LLP 9521138 9521138 9. PINK Ginger ARTS LLP PINK Ginger ARTS LLP 9521138 9521138 10. PROTOS ENGINEERING CO PRIVATE PROTOS ENGINEERING CO PRIVATE 953070 LIMITED LIMITED Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 25 4863 & 4854/MUM/2024
JAYABEN JITENDRAJHAVERI JAYABEN JITENDRAJHAVERI 30663 3066399 12 PRASHANT SUBHASH PRATAP PRASHANT SUBHASH PRATAP 9517950 9517950 13 VIVEK MADANLAL HINDUJA VIVEK MADANLAL HINDUJA 4762162 4762162 14 DALMIA ENTERPRISE HOLDINGS DALMIA ENTERPRISE HOLDINGS 6190174 6190174 TOTAL TOTAL 104464764 104464764 8.4 Before the ld CIT(A), Before the ld CIT(A), the assessee submitted that assess the assessee submitted that assessment was carried out during was carried out during Covid period, therefore few shareholders therefore few shareholders could not respond to the notice u/s 133(6) of the Act. Before the could not respond to the notice u/s 133(6) of the Act. could not respond to the notice u/s 133(6) of the Act. AO, the assessee requested he assessee requested for providing list of the of the shareholders who failed to comply notice u/s 133(6) of the who failed to comply notice u/s 133(6) of the Act but despite three Act but despite three reminders, list of shareholders was not provided , list of shareholders was not provided and assessment and assessment order was passed. Therefore, the assessee obtained reply from those . Therefore, the assessee obtained reply from those . Therefore, the assessee obtained reply from those shareholders and submitted before the ld C shareholders and submitted before the ld CIT(A) as additional IT(A) as additional evidences. The Ld CIT(A) called for remand report from the AO but evidences. The Ld CIT(A) called for remand report from the AO but evidences. The Ld CIT(A) called for remand report from the AO but the AO didn’t give any adverse remark on the additional evidences. the AO didn’t give any adverse remark on the additional evidences. the AO didn’t give any adverse remark on the additional evidences. The ld CIT(A) after taking into consideration comparison of the The ld CIT(A) after taking into consideration comparison of the The ld CIT(A) after taking into consideration comparison of the documents in respect of 53 shareholder documents in respect of 53 shareholders which were which were accepted in assessment assessment assessment proceeding proceeding proceeding and and and documents documents documents in in in respect respect respect of of of 14 14 14 shareholders filed during appellate proceedings as additional shareholders filed during appellate proceedings as additional shareholders filed during appellate proceedings as additional evidences, deleted the addition observing as under: evidences, deleted the addition observing as under:
9.11 Perusal of the assessment order reveals that the AO has 9.11 Perusal of the assessment order reveals that the AO has 9.11 Perusal of the assessment order reveals that the AO has not mentioned anything about any information available with him to mentioned anything about any information available with him to mentioned anything about any information available with him to arrive at the conclusion that the parties did not have arrive at the conclusion that the parties did not have arrive at the conclusion that the parties did not have creditworthiness. No inquiries were conducted to bring on records, creditworthiness. No inquiries were conducted to bring on records, creditworthiness. No inquiries were conducted to bring on records, Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 26 4863 & 4854/MUM/2024 any material to arrive at the conclusion of holding that the any material to arrive at the conclusion of holding that the any material to arrive at the conclusion of holding that the transactions were not genuine. The AO has not mentioned ansactions were not genuine. The AO has not mentioned ansactions were not genuine. The AO has not mentioned anything in the body of order to suggest whether he had any anything in the body of order to suggest whether he had any anything in the body of order to suggest whether he had any information or any incriminating evidences in his possession to information or any incriminating evidences in his possession to information or any incriminating evidences in his possession to come to the conclusion that the investment in shares were come to the conclusion that the investment in shares were come to the conclusion that the investment in shares were ungenuine. In thi ungenuine. In this regards, the AO failed to bring on records, any s regards, the AO failed to bring on records, any positive evidence of flow of cash or cash exchanged between the positive evidence of flow of cash or cash exchanged between the positive evidence of flow of cash or cash exchanged between the appellant and/or the final beneficiary. Further, the AO has appellant and/or the final beneficiary. Further, the AO has appellant and/or the final beneficiary. Further, the AO has nowhere discussed the issue or the modus operandi alleged to be nowhere discussed the issue or the modus operandi alleged to be nowhere discussed the issue or the modus operandi alleged to be carried out by carried out by the appellant. The AO has also not zeroed down on the appellant. The AO has also not zeroed down on the specific modus operandi employed if any for carrying out the the specific modus operandi employed if any for carrying out the the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to unexplained investment. The AO has not made any inquiries to unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No establish that the investment was from a nonexistent entity. No establish that the investment was from a nonexistent entity. No evidences ha evidences have been brought on record to indicate that the ve been brought on record to indicate that the investment in shares was not a genuine transaction. On the other investment in shares was not a genuine transaction. On the other investment in shares was not a genuine transaction. On the other hand the appellant has furnished all the documentary evidences hand the appellant has furnished all the documentary evidences hand the appellant has furnished all the documentary evidences during the assessment proceedings as well as appellate during the assessment proceedings as well as appellate during the assessment proceedings as well as appellate proceedings to support proceedings to support its contention to substantiate that it is a its contention to substantiate that it is a genuine transactions where various investors have applied for genuine transactions where various investors have applied for genuine transactions where various investors have applied for shares and the have been duly allotted these shares. Further, as shares and the have been duly allotted these shares. Further, as shares and the have been duly allotted these shares. Further, as laid down by the Hon’ble High Court as well as Supreme Court laid down by the Hon’ble High Court as well as Supreme Court laid down by the Hon’ble High Court as well as Supreme Court the addition u/s.68 o the addition u/s.68 of the IT Act was not justified, without making f the IT Act was not justified, without making proper inquiries and bringing on records any adverse findings in proper inquiries and bringing on records any adverse findings in proper inquiries and bringing on records any adverse findings in respect of the parties. Mere non respect of the parties. Mere non-receipt of reply u/s.133(6) was receipt of reply u/s.133(6) was not sufficient ground for making the addition. not sufficient ground for making the addition. 9.12 In view of the facts of 9.12 In view of the facts of the case and decisions rendered by the case and decisions rendered by various courts on this issue, the addition of Rs. 10,44,64,764/ various courts on this issue, the addition of Rs. 10,44,64,764/ various courts on this issue, the addition of Rs. 10,44,64,764/- u/s.68 of the IT Act made by AO on account of share premium u/s.68 of the IT Act made by AO on account of share premium u/s.68 of the IT Act made by AO on account of share premium unconfirmed by the parties is hereby deleted. Ground no.3(a) & unconfirmed by the parties is hereby deleted. Ground no.3(a) & unconfirmed by the parties is hereby deleted. Ground no.3(a) & 3(b) of appeal are allowed 3(b) of appeal are allowed.
We have heard rival submission of parties and perused the 8.5 We have heard rival submission of parties and perused the We have heard rival submission of parties and perused the relevant material on record. The issue in dispute is regarding share relevant material on record. The issue in dispute is regarding share relevant material on record. The issue in dispute is regarding share capital received from 14 shareholders out of the 67 shareholders capital received from 14 shareholders out of the 67 shareholders capital received from 14 shareholders out of the 67 shareholders treated by the Assessing Officer as unexplained cash credit for the treated by the Assessing Officer as unexplained cash cred treated by the Assessing Officer as unexplained cash cred reason that those 14 shareholders did not respond to the notice reason that those 14 shareholders did not respond to the notice reason that those 14 shareholders did not respond to the notice Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 27 4863 & 4854/MUM/2024 issued under section 133(6 issued under section 133(6) of the Act. During the remand ct. During the remand proceedings, the assessee filed documents in respect of the 14 proceedings, the assessee filed documents in respect of the 14 proceedings, the assessee filed documents in respect of the 14 shareholders, identical to the documents which were filed in respect shareholders, identical to the documents which were filed in shareholders, identical to the documents which were filed in of 53 shareholders out of the 67 shareholders. The share capital of 53 shareholders out of the 67 shareholders. The share capital of 53 shareholders out of the 67 shareholders. The share capital received from those 53 received from those 53 shareholders was already accepted shareholders was already accepted by the Assessing Officer as genuine and no addition was made in respect Assessing Officer as genuine and no addition was made in respect Assessing Officer as genuine and no addition was made in respect of share capital received from those shareholders in assessment of share capital received from those shareholders in of share capital received from those shareholders in order. The assessee has order. The assessee has filed copy of the documents in respect of of the documents in respect of all the shareholders before us all the shareholders before us also, which are available on pages which are available on pages 486 to 553 of the paperbook. We are of the opinion that when the 486 to 553 of the paperbook. We are of the opinion that when the 486 to 553 of the paperbook. We are of the opinion that when the Assessing Officer has accepted share capital re Assessing Officer has accepted share capital received from the 53 ceived from the 53 shareholders on the basis of a set of documents, then identical shareholders on the basis of a set of documents, then identical shareholders on the basis of a set of documents, then identical documents filed in respect of remaining 14 shareholders, the Ld. documents filed in respect of remaining 14 shareholders documents filed in respect of remaining 14 shareholders CIT(A) is justified in deleting the addition made by the Assessing justified in deleting the addition made by the Assessing justified in deleting the addition made by the Assessing Officer. In view of the above facts and Officer. In view of the above facts and circumstances, we do not circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute. find any error in the order of the Ld. CIT(A) on the issue in dispute. find any error in the order of the Ld. CIT(A) on the issue in dispute. The ground Nos. 1 and 2 of the appeal of the R 1 and 2 of the appeal of the R 1 and 2 of the appeal of the Revenue are accordingly dismissed. accordingly dismissed.
In ground No. thr In ground No. three and four of the appeal, the R ee and four of the appeal, the Revenue has mainly objected for admitting the additional evidence in respect of mainly objected for admitting the additional evidence in respect of mainly objected for admitting the additional evidence in respect of the disallowance of rent expenses amounting to ₹ 54, 63, 632/ the disallowance of rent expenses amounting to 54, 63, 632/-.
9.1 The brief facts qua the issue in dispute are that the assessee The brief facts qua the issue in dispute are that the assessee The brief facts qua the issue in dispute are that the assessee incurred ₹13,37,04,073/ 073/- towards rent and conducting ch towards rent and conducting charges. As Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 28 4863 & 4854/MUM/2024 no tax was deducted on the rent payment, the Assessing Officer in no tax was deducted on the rent payment, the Assessing Officer in no tax was deducted on the rent payment, the Assessing Officer in draft draft draft assessment assessment assessment order order order proposed proposed proposed as as as why why why the the the 30% 30% 30% of of of ₹13,37,04,073/- i.e. 4,01,11,222/ i.e. 4,01,11,222/- might not be disallowed might not be disallowed invoking the provisio invoking the provisions of section 40(a)(ia) of the A ns of section 40(a)(ia) of the Act. In response the assessee claimed to have claimed to have filed detail in respect of rooms taken etail in respect of rooms taken on rent for the staff and Permanent Account Number (PAN) of the on rent for the staff and Permanent Account Number (PAN) of the on rent for the staff and Permanent Account Number (PAN) of the owners to whom rent was paid. The Assessing Officer after taking owners to whom rent was paid. The Assessing Officer owners to whom rent was paid. The Assessing Officer into consideration of into consideration of the submissions of assessee, disallowed rent expenses amounting to Rs. expenses amounting to Rs. 54,63,632/- instead of making instead of making disallowance under section 40(a)(ia) of the A under section 40(a)(ia) of the Act. Before the Ld. CIT(A) ct. Before the Ld. CIT(A) the assessee filed additional evidence the assessee filed additional evidences, however same were not , however same were not found satisfactory by the Assessing Officer and he opposed the found satisfactory by the Assessing Officer and he opposed t found satisfactory by the Assessing Officer and he opposed t admission of the additional evidences. The Ld. CIT(A) has admission of the additional evidences. The Ld. CIT(A) has admission of the additional evidences. The Ld. CIT(A) has summarized the facts in relation to the issue in dispute , which the facts in relation to the issue in dispute , which are the facts in relation to the issue in dispute , which reproduced as under: reproduced as under:
10. Ground no. 4 of appeal is related to the disallowance of rent 10. Ground no. 4 of appeal is related to the disallowance of rent 10. Ground no. 4 of appeal is related to the disallowance of rent expenses to the tune of Rs. 54,63,632/ expenses to the tune of Rs. 54,63,632/-. In respect of the . In respect of the disallowance of rent expenses the appellant has raised the disallowance of rent expenses the appellant has raised the disallowance of rent expenses the appellant has raised the following issues: following issues: (a) The AO erred in making the disallowance of Rs. 54,63,632/ (a) The AO erred in making the disallowance of Rs. 54,63,632/ (a) The AO erred in making the disallowance of Rs. 54,63,632/- being rent paid for accommodation of employees on the ground the being rent paid for accommodation of employees on the ground the being rent paid for accommodation of employees on the ground the Appellant allegedly failed to Appellant allegedly failed to substantiate the expenses by substantiate the expenses by providing the addresses of premises and Permanent Account providing the addresses of premises and Permanent Account providing the addresses of premises and Permanent Account Number (PAN) of owner of premises taken on rent. The Appellant Number (PAN) of owner of premises taken on rent. The Appellant Number (PAN) of owner of premises taken on rent. The Appellant claimed that it has duly substantiated that the rent expenses have claimed that it has duly substantiated that the rent expenses have claimed that it has duly substantiated that the rent expenses have been incurred wholly and exclusively f been incurred wholly and exclusively for the business purposes, or the business purposes, therefore, the disallowance made by the AO shall be deleted. therefore, the disallowance made by the AO shall be deleted. therefore, the disallowance made by the AO shall be deleted.
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 29 4863 & 4854/MUM/2024 (b) The AO erred in making the disallowance of Rs. 54,63,632/ (b) The AO erred in making the disallowance of Rs. 54,63,632/ (b) The AO erred in making the disallowance of Rs. 54,63,632/- without providing an opportunity of being heard to the Appellant. without providing an opportunity of being heard to the Appellant. without providing an opportunity of being heard to the Appellant. 10.1 During the year under consideration 10.1 During the year under consideration, the Appellant has , the Appellant has incurred expenses of Rs.13,37,04,073/ incurred expenses of Rs.13,37,04,073/- being rent and conducting being rent and conducting charges. The appellant had made the payment of rent without charges. The appellant had made the payment of rent without charges. The appellant had made the payment of rent without deducting any TDS. Therefore the AO in para 10 of draft deducting any TDS. Therefore the AO in para 10 of draft deducting any TDS. Therefore the AO in para 10 of draft assessment order proposed the disallowance u/s 40(a)(ia assessment order proposed the disallowance u/s 40(a)(ia assessment order proposed the disallowance u/s 40(a)(ia) being 30% of Rs. 13,37,04,073/ 30% of Rs. 13,37,04,073/- i.e. Rs. 4,01,11,222/- as it had failed as it had failed to deduct TDS on the payment of Rs. 13,37,04,073/ to deduct TDS on the payment of Rs. 13,37,04,073/-. In response, . In response, the appellant furnished particulars of staff rooms taken for rent the appellant furnished particulars of staff rooms taken for rent the appellant furnished particulars of staff rooms taken for rent and the PAN number of the owner to whom the rent wa and the PAN number of the owner to whom the rent wa and the PAN number of the owner to whom the rent was paid. The AO after considering the reply of the appellant made the AO after considering the reply of the appellant made the AO after considering the reply of the appellant made the disallowance of rent expenses by Rs. 54,63,632/ disallowance of rent expenses by Rs. 54,63,632/- - instead of making the disallowance u/s 40(a)(ia) of the Act as making the disallowance u/s 40(a)(ia) of the Act as proposed in the draft assessment order. The main reason of making the draft assessment order. The main reason of making the draft assessment order. The main reason of making disallowance of rent expenses of Rs. 54,63,632/ nce of rent expenses of Rs. 54,63,632/- provided by AO provided by AO is as under: “As per draft assessment order vide para No.10 it is proposed for “As per draft assessment order vide para No.10 it is proposed for “As per draft assessment order vide para No.10 it is proposed for addition of Rs.4,01,11,222 for failure of deduction of TDS on rent addition of Rs.4,01,11,222 for failure of deduction of TDS on rent addition of Rs.4,01,11,222 for failure of deduction of TDS on rent & conducting charges. This addition was proposed & conducting charges. This addition was proposed & conducting charges. This addition was proposed U/s.40(a)(ia) @30% on total claim of expenditure. This proposal was @30% on total claim of expenditure. This proposal was @30% on total claim of expenditure. This proposal was communicated to the assessee vide draft assessment order communicated to the assessee vide draft assessment order communicated to the assessee vide draft assessment order dated.30/04/2021. In response to this show cause the assessee dated.30/04/2021. In response to this show cause the assessee dated.30/04/2021. In response to this show cause the assessee furnished the information, after going through the information, it furnished the information, after going through the information, it furnished the information, after going through the information, it was noticed that the assessee failed to furnish the particulars of s noticed that the assessee failed to furnish the particulars of s noticed that the assessee failed to furnish the particulars of staff rooms taken for rent and the pan number of the owner to staff rooms taken for rent and the pan number of the owner to staff rooms taken for rent and the pan number of the owner to whom the rent was paid. Even though the claim for these staff whom the rent was paid. Even though the claim for these staff whom the rent was paid. Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the rooms is less than the ceiling limit for collection of TDS as the rooms is less than the ceiling limit for collection of TDS as the assessee failed to substantiate the claim of payment by providing ssessee failed to substantiate the claim of payment by providing ssessee failed to substantiate the claim of payment by providing the particulars of address of the staff rooms and PAN number of the particulars of address of the staff rooms and PAN number of the particulars of address of the staff rooms and PAN number of owner, it is construed that the claim is not genuine. Hence it owner, it is construed that the claim is not genuine. Hence it owner, it is construed that the claim is not genuine. Hence it resulted as addition of Rs. 54,63,632/ resulted as addition of Rs. 54,63,632/- as under- Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 30 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 31 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 32 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 33 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 34 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 35 4863 & 4854/MUM/2024 10.2 During the appellate proceedings, the appellant had 10.2 During the appellate proceedings, the appellant had 10.2 During the appellate proceedings, the appellant had submitted that it had incurred rent expenses of Rs. submitted that it had incurred rent expenses of Rs. submitted that it had incurred rent expenses of Rs. 13,37,04,073/ 13,37,04,073/- for the subjected year. The AO, in the for the subjected year. The AO, in the assessment assessment assessment proceeding proceeding proceeding through through through draft draft draft assessment assessment assessment order, order, order, proposed to make the disallowance u/ proposed to make the disallowance u/s 40(a)(ia) of the Act on s 40(a)(ia) of the Act on the ground that the Appellant has not deducted the TDS on rent. the ground that the Appellant has not deducted the TDS on rent. the ground that the Appellant has not deducted the TDS on rent. The Appellant claimed that it had filed complete details related to The Appellant claimed that it had filed complete details related to The Appellant claimed that it had filed complete details related to rent expenses on 02/05/2021, explaining the AO that the TDS rent expenses on 02/05/2021, explaining the AO that the TDS rent expenses on 02/05/2021, explaining the AO that the TDS have been deducted by it wherever have been deducted by it wherever applicable. On consideration applicable. On consideration of the submission of the Appellant, the AO made a disallowance of the submission of the Appellant, the AO made a disallowance of the submission of the Appellant, the AO made a disallowance of Rs. 54,63,632/ of Rs. 54,63,632/- out of the total rent of Rs. 13,37,04,073/ out of the total rent of Rs. 13,37,04,073/- stating that the PAN of the landlord or the premises address are stating that the PAN of the landlord or the premises address are stating that the PAN of the landlord or the premises address are not given by the Appellant. The not given by the Appellant. The appellant further claimed that appellant further claimed that claimed that these amounts represents the rent which is below claimed that these amounts represents the rent which is below claimed that these amounts represents the rent which is below threshold limit as prescribed in section 194I of the Act threshold limit as prescribed in section 194I of the Act.” .” 9.2 After considering the remand report of the Assessing Officer considering the remand report of the Assessing Officer considering the remand report of the Assessing Officer and rejoinder of the assessee, the Ld. and rejoinder of the assessee, the Ld. CIT(A) deleted the addition CIT(A) deleted the addition observing as under:
10.3 During the appellate proceedings the appellant has 10.3 During the appellate proceedings the appellant has 10.3 During the appellate proceedings the appellant has submitted that the submitted that the business of the appellant company is that of business of the appellant company is that of running restaurants, outdoor catering, running restaurants, outdoor catering, and management services. and management services. The Appellant has clai The Appellant has claimed that it has hotels / restaurants med that it has hotels / restaurants across the country. It also takes the contract of outdoor catering across the country. It also takes the contract of outdoor catering across the country. It also takes the contract of outdoor catering across the country throughout the year. Therefore, the Appellant needs throughout the year. Therefore, the Appellant needs throughout the year. Therefore, the Appellant needs various staff (i.e. serving staff, various staff (i.e. serving staff, cook, attendant etc) who are hired cook, attendant etc) who are hired Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 36 4863 & 4854/MUM/2024 by the Appellant. The Appellant provides llant. The Appellant provides accommodation to the accommodation to the staff in addition to salary. The appellant has submitted details staff in addition to salary. The appellant has submitted details staff in addition to salary. The appellant has submitted details of rent paid along with the Name of the parties, PAN and premises rent paid along with the Name of the parties, PAN and premises rent paid along with the Name of the parties, PAN and premises for which rent has for which rent has been paid and amount paid along with the been paid and amount paid along with the sample rent ag sample rent agreement of following parties: i) Sangita Raj Bhagat i) Sangita Raj Bhagat ii) Charushila Patil ii) Charushila Patil iii) Rosy Paul Chettiar iii) Rosy Paul Chettiar iv) Jagdish Talreja iv) Jagdish Talreja v) Savio Vareed v) Savio Vareed vi) Shevanta Bhavku vi) Shevanta Bhavku vii) Sunanda Tatoba More vii) Sunanda Tatoba More viii) Kamalakar Takale viii) Kamalakar Takale ix) Raju Jaiswal ix) Raju Jaiswal x) Arun Kisan Londhe x) Arun Kisan Londhe xi) K Shanakriah xi) K Shanakriah xii) K Vanaja xiii) K Raghavender xiii) K Raghavender xiv) K Edu Kondalu xiv) K Edu Kondalu xv) K Narsamma xv) K Narsamma xvi) K Venkata Ramana xvi) K Venkata Ramana xvii) Sharda Sanjay Parte xvii) Sharda Sanjay Parte xviii) Surekha Nagesh Sakpal xviii) Surekha Nagesh Sakpal xix) P Lakshmi xix) P Lakshmi 10.4 As these were the additional evidences filed by the 10.4 As these were the additional evidences filed by the 10.4 As these were the additional evidences filed by the appellant before the appellate authority in respect to the addition appellant before the appellate authority in respect to the addition appellant before the appellate authority in respect to the addition of disallowance of rent expenses of Rs. 54,63,632/ of disallowance of rent expenses of Rs. 54,63,632/- -, a remand report was called for from the AO for the examination of the report was called for from the AO for the examination of the report was called for from the AO for the examination of the above details provided by the appellant. The AO in reply to the details provided by the appellant. The AO in reply to the details provided by the appellant. The AO in reply to the remand report has submitted that the veracity of the claim of the remand report has submitted that the veracity of the claim of the remand report has submitted that the veracity of the claim of the appellant cannot be ascertained from just the sample rent appellant cannot be ascertained from just the sample rent appellant cannot be ascertained from just the sample rent Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 37 4863 & 4854/MUM/2024 agreement and the additional evidence submitted by the agreement and the additional evidence submitted by the agreement and the additional evidence submitted by the appellant does appellant does not answer the issue raised by the AO in the not answer the issue raised by the AO in the assessment order. assessment order. 10.5 The report submitted by the AO has been considered 10.5 The report submitted by the AO has been considered 10.5 The report submitted by the AO has been considered however, the AO has not brought out any deficiency or however, the AO has not brought out any deficiency or however, the AO has not brought out any deficiency or discrepancy in respect to the documents or additional evidences discrepancy in respect to the documents or additional evidences discrepancy in respect to the documents or additional evidences submitted by th submitted by the appellant. The main reason on the basis of e appellant. The main reason on the basis of which the AO made addition of Rs. 54,63,632/ which the AO made addition of Rs. 54,63,632/- is as under: is as under: “Even though the claim for these staff rooms is less than the “Even though the claim for these staff rooms is less than the “Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the assessee failed to ceiling limit for collection of TDS as the assessee failed to ceiling limit for collection of TDS as the assessee failed to substantiate the claim substantiate the claim of payment by providing the particulars of of payment by providing the particulars of address of the staff rooms and PAN number of owner. address of the staff rooms and PAN number of owner.” address of the staff rooms and PAN number of owner.” The appellant following the reason which led the AO for making The appellant following the reason which led the AO for making The appellant following the reason which led the AO for making disallowance of rent expenses of Rs. 54,63,632/ disallowance of rent expenses of Rs. 54,63,632/- has submitted has submitted the details and documentary evi the details and documentary evidences to justify its stand. dences to justify its stand. 10.6 Further, as per the draft assessment order issued to the 10.6 Further, as per the draft assessment order issued to the 10.6 Further, as per the draft assessment order issued to the appellant the AO proposed to make the disallowance u/s appellant the AO proposed to make the disallowance u/s appellant the AO proposed to make the disallowance u/s 40(a)(ia) of the Act on the ground that the Appellant has not 40(a)(ia) of the Act on the ground that the Appellant has not 40(a)(ia) of the Act on the ground that the Appellant has not deducted the TDS on rent. However, the addi deducted the TDS on rent. However, the addition was finalized tion was finalized making disallowance of rent expenses to the tune of Rs. making disallowance of rent expenses to the tune of Rs. making disallowance of rent expenses to the tune of Rs. 54,63,632/-. If such addition was required to be made, the AO . If such addition was required to be made, the AO . If such addition was required to be made, the AO ought to have been given an opportunity of being heard before ought to have been given an opportunity of being heard before ought to have been given an opportunity of being heard before making such disallowance to the appellant. making such disallowance to the appellant. 10.7 In view of the above discussion and the details, iew of the above discussion and the details, iew of the above discussion and the details, documentary evidences submitted by the appellant the addition documentary evidences submitted by the appellant the addition documentary evidences submitted by the appellant the addition of Rs. 54,63,632/ of Rs. 54,63,632/- made on account of disallowance of rent made on account of disallowance of rent expenses of Rs. 54,63,632/ expenses of Rs. 54,63,632/- is hereby deleted. Ground no. 4 of is hereby deleted. Ground no. 4 of appeal is allowed. appeal is allowed.” 9.3 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is in respect of the relevant material on record. The issue in dispute is in respect of the relevant material on record. The issue in dispute is in respect of the genuineness of the rent expenses claimed by the assessee. The ld genuineness of the rent expenses claimed by the assessee. The genuineness of the rent expenses claimed by the assessee. The Assessing Officer in the remand report Assessing Officer in the remand report has submitted that submitted that PAN of the landlord or the addresses of the premises were not given by the the landlord or the addresses of the premises were not given by the the landlord or the addresses of the premises were not given by the assessee in the additional evidence and therefore the claim of the assessee in the additional evidence and therefore the claim of the assessee in the additional evidence and therefore the claim of the assessee of the genuineness of the expenses could not be verified. assessee of the genuineness of the expenses could not be verified. assessee of the genuineness of the expenses could not be verified.
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 38 4863 & 4854/MUM/2024 The Ld. CIT(A) however deleted the addition The Ld. CIT(A) however deleted the addition for violation r violation of principle of natural justice. The Ld. CIT(A) noted that in the draft assessment of natural justice. The Ld. CIT(A) noted that in the draft assessment of natural justice. The Ld. CIT(A) noted that in the draft assessment order the Assessing Officer proposed disallowance invoking section order the Assessing Officer proposed disallowance inv order the Assessing Officer proposed disallowance inv 40(a)(ia) of the Act whereas in the final assessment order ct whereas in the final assessment order made ct whereas in the final assessment order disallowance for lacking genu disallowance for lacking genuineness of the rental expenses. The ld neness of the rental expenses. The ld CIT(A) held that addition made addition made by the AO without opportunity to without opportunity to the assessee, as not sustainable. However not sustainable. However, we disagree with the we disagree with the finding of the Ld. CIT(A) on the issue in dispute. We note that in the finding of the Ld. CIT(A) on the issue in dispute. We note finding of the Ld. CIT(A) on the issue in dispute. We note remand preceding th e Assessing Officer specifically pointed out that e Assessing Officer specifically pointed out that address of the rooms address of the rooms leased for staff and PAN of the owners was not staff and PAN of the owners was not available and therefore said expenses could not available and therefore said expenses could not have been possible have been possible to verify. In such circumstances, the Ld. CIT(A) should have called n such circumstances, the Ld. CIT(A) should have called n such circumstances, the Ld. CIT(A) should have called for such information from the assessee or should have directed the such information from the assessee or should have directed the such information from the assessee or should have directed the assessee to file such information before the AO in remand assessee to file such information before the AO in remand assessee to file such information before the AO in remand proceeding. Since the Ld. CIT(A) has deleted the addition without proceeding. Since the Ld. CIT(A) has deleted the addition without proceeding. Since the Ld. CIT(A) has deleted the addition without verifying the said information verifying the said information, we feel it appropriate to set aside we feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue in dispute and restore the finding of the Ld. CIT(A) on the issue in dispute and restore the finding of the Ld. CIT(A) on the issue in dispute and restore the matter back to the file of the Assessing Officer, with the direction to matter back to the file of the Assessing Officer, with the direction to matter back to the file of the Assessing Officer, with the direction to the assessee to file the details of complete address of the the assessee to file the details of complete address of the the assessee to file the details of complete address of the properties/rooms which were taken on lease for staffs and PAN and properties/rooms which were taken on lease for staffs properties/rooms which were taken on lease for staffs address of the owner of those properties for verification by the address of the owner of those properties for verification by the address of the owner of those properties for verification by the Assessing Officer. The ground sing Officer. The ground No. three and four of the appeal are No. three and four of the appeal are accordingly, allowed for the statistical purposes. accordingly, allowed for the statistical purposes.
Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 39 4863 & 4854/MUM/2024
In the result, the appeals of the In the result, the appeals of the Revenue for assessment year for assessment year 2017-18 are dismissed dismissed whereas appeal for the assessment year whereas appeal for the assessment year 2018-19 is partly allowed for statistical purposes. 19 is partly allowed for statistical purposes.
Order pronounced in the open Court on nounced in the open Court on 30/01/2025. /01/2025.