DEPUTY COMISSIONER OF INCOME TAX, CIRCLE-3(1), VISAKHAPATNAM vs. BLACKBURN FUELS PRIVATE LIMITED, VIZIANAGARAM

Succinctly stated, the assessee company, which is engaged in the business of trading of coal and other consumables procured through import/domestic sources, had e-filed its return of income for A.Y. 2017- 18 on 07.11.2017, declaring nil income.

Subsequently, the A.O. based on information shared by the ACIT, Central Circle – 1, Coimbatore that as per the statement of Shri Alwyn Stephen C/o 6/1, Nattu Subbarayan Stree, Mylapore, Chennai recorded u/s 131(1A) of the Act on 17.03.2017, demonetized cash aggregating to Rs. 11.78 crores (approx.) was deposited by him through his friends Shri Kulasekaran and Shri Suresh in the current account of 4 Blackburn Fuels Private Limited M/s. Infant Jesus Foundation Trust held with Lakshmi Vilas Bank, Adyar, Chennai, out of which an amount of Rs. 4.45 crores was transferred to the bank account of M/s. Maheswari Brothers Coal Ltd. (erstwhile name of the assessee company), initiated proceedings as per “Explanation 2(b)” of Section 147 of the Act. Notice u/s 148 of the Act dated 06.03.2020 was issued to the assessee company. However, the assessee company failed to file its return of income in compliance to the aforesaid notice.

Thereafter, the A.O. vide his notice issued u/s 142(1) of the Act dated 17.12.2020, called upon the assessee company to furnish certain details, viz. (i). the nature of transactions it had undertaken with M/s. Infant Jesus Foundation Trust during the subject year; (ii). to produce corroborative evidence substantiating the nature of transactions that it had undertaken with M/s. Infant Jesus Foundation Trust; and (iii). to explain for what purpose the money was received from M/s. Infant Jesus Foundation Trust. As the assessee company failed to furnish any reply in compliance to the aforesaid notice, therefore, the A.O. issued another notice u/s 142(1) of the Act dated 11.02.2021, wherein it was once again queried on the aforesaid issue and was called upon to furnish the copies of its computation of income along with financials 5 Blackburn Fuels Private Limited and audit report for the subject year. Apart from that, the A.O. called upon the assessee company to explain that as it was one of the beneficiaries of an accommodation entry received from M/s. Infant Jesus Foundation amounting during the subject year, therefore, why the same may not be treated as its unaccounted income for the subject year. Also, the assessee company was directed to furnish a copy of the ledger account of Shri Alwyn Stephen and M/s. Infant Jesus Foundation Trust appearing in its Books of Accounts for the relevant period, i.e., 01.04.2016 to 31.03.2017.

In reply, the assessee company submitted before the A.O. that it had received the payment of Rs. 4.45 crores (supra) from M/s. Infant Jesus Foundation Trust on 05.01.2017 against the payment that was outstanding from M/s. Shakti Sugars Limited. Elaborating further, it was the claim of the assessee company that it had supplied coal to M/s. Shakti Sugars Limited (supra), and the payment in question was received from M/s. Infant Jesus Foundation Trust on behalf of its aforesaid customer, i.e. M/s. Shakti Sugars Limited. The assessee company, to support its aforesaid claim filed before the A.O. its correspondence with M/s. Shakti Sugars Limited.

However, the aforesaid claim of the assessee company did not find favour with the A.O. as it was not corroborated by any documentary evidence. The A.O. observed that the assessee company had failed to furnish a copy of the ledger account of M/s. Shakti Sugars Limited. The A.O. further observed that Shri Alwyn Stephen, who was the sole trustee of M/s. Infant Jesus Foundation Trust had in his statement recorded u/s 131(1A) of the Act on 17.03.2017, inter alia, stated that the amount of Rs. 4.45 crore (supra) was transferred to the account of the assessee company out of the cash deposits (in SBN’s) of Rs. 11.78 crore (supra) made in the bank account of M/s. Infant Jesus Foundation on 30.12.2016. The A.O. observed that Shri Alwyn Stephen had nowhere stated that the amount of Rs. 4.45 crores (supra) was deposited in the assessee’s bank account on behalf of M/s. Shakti Sugars Limited. Also, it was observed by him that the assessee company had not placed on record any documentary evidence to prove that the amount of Rs. 4.45 crores (supra) was received by the assessee company against the payment that was outstanding from M/s. Shakti Sugars Limited. The A.O. observed that as the amount of Rs. 4.45 crores (supra) was received by the assessee company from M/s. Infant Jesus Foundation out of the cash deposited in the latter’s bank account, it was, thus, evident that the it had failed to explain both the “nature” and “source” of the amount 7 Blackburn Fuels Private Limited that was credited in its bank account on 05.01.2017. Further, the A.O. observed that a perusal of the bank account No.044136000000904 of M/s. Infant Jesus Foundation Trust with Lakshmi Vikas Bank, Branch: Adyar, Chennai, revealed that immediately before the transfer of an amount of Rs. 4.45 crores (supra) to the assessee company on 05.01.2017, there were cash deposits of Rs. 11.78 crores (supra) made in the bank account of M/s. Infant Jesus Foundation Trust on 30.12.2016. Also, the A.O. took cognisance of the fact that before the aforesaid cash was deposited in the bank account of M/s. Infant Jesus Foundation on 30.12.2016, there was a meagre balance of only Rs. 10,000/- in the said bank account. The A.O. observed that a perusal of the bank account of M/s. Infant Jesus Foundation revealed that the total cash deposit of Rs. 11.78 crores (supra) was transferred to three parties, viz, (i). M/s Arumuga Holdings Pvt. Ltd: Rs. 6.50 crores; (ii) M/s Maheshwari Coal Pvt. Ltd. (i.e assessee company): Rs. 4.45 crores; and (iii). M/s. Chennai Raj Chits: Rs. 23 lacs on 18.01.2017. Apart from that, the A.O. observed that Shri. Alwyn Stephen had admitted that the balance amount of Rs. 60 lac was received by him for facilitating the money transfer to the aforesaid entities.

The A.O. observed that Shri Alwyn Stephen (supra), had in his statement recorded u/s 131(1A) of the Act on 17.03.2017, disclosed that the cash totalling Rs. 11.78 crores (supra) was deposited through his friends Shri Kulasekaran and Shri Suresh in the current account of M/s. Infant Jesus Foundation with Lakshmi Vials Bank, Branch: Adyar, Chennai, and he had only signed the duly filled pay-in-slip. It was further stated by him that he had approached his friend Shri Kulasekaran to settle the outstanding loan of Rs. 15 crore of M/s. Infant Jesus Foundation that was due towards ICICI Bank Ltd. Elaborating further, Shri Alwyn Stephen (supra) had stated that Shri Kulasekaran, i.e., his friend, had introduced Shri Suresh to him. Shri. Alwyn Stephen (supra) had stated that, as per a mutual verbal agreement, Shri Suresh (supra) had agreed to deposit an amount of Rs. 11.78 crores in the bank account of M/s. Infant Jesus Foundation to settle the latter’s outstanding loan of ICICI Bank Limited. Further, it was agreed that Shri. Alwyn Stephen (supra) would subsequently repay the amount to Shri. Suresh (supra). The A.O. referring to the contents of the statement of Shri Alwyn Stephen recorded u/s 131(1A) of the Act on 17.03.2017, had, inter alia, observed that he had stated that the cash amounting to Rs. 11.78 crores in the denomination of Rs.1000/- (SBN’s) were deposited in the Current Account of M/s Infant Jesus Foundation Trust 9 Blackburn Fuels Private Limited through his friends Shri Kulasekaran, Proprietor of M/s. Jaya Bharatham Marketing, i.e., a furniture firm and Shri Suresh (supra), and the said money did not belong to him. Elaborating further, it was stated by him that M/s. Infant Jesus Foundation had taken loans from ICICI Bank, Cenetoph Road, Chennai in November 2016, and the same was outstanding at an amount of Rs. 15 crores (approx.). It was further stated by him that as he wanted to settle the loan, he had approached his friend Shri Kulasekaran, who had in turn introduced him to Shri Suresh, whom he had met for the first time on around 23rd or 24th of December, 2016 in Raoyapettaha. Shri Alwyn Stephen (supra) had further stated that Shri Suresh (supra) had promised to help him in settling the loan, wherein he would deposit Rs. 11.78 crores in cash in the bank account of M/s. Infant Jesus Foundation to facilitate settling the outstanding loan. Also, it was stated by him that it was agreed between them that the aforesaid amount would thereafter be repaid by him later on.

The A.O. observed that, as per the information shared by the ACIT, Central Circle-1, Coimbatore, Shri. Alwyn Stephen (supra), on being queried that though the aforementioned amount was stated to have been deposited by Shri Kulasekaran and Shri Suresh in the bank 10 Blackburn Fuels Private Limited account of M/s. Infant Jesus Foundation to facilitate settling of the latter’s outstanding bank loan, but on going through the bank statement, it was revealed that the aforementioned amount of Rs. 11.78 crores (supra) was transferred to three parties through RTGS, viz., (i) M/s. Maheswari Brothers Coal Ltd (assessee company) Chennai in their account with Lakshmi Vilas Bank, Main Branch, Chennai on 05.01.2017: Rs. 4.45 crores; (ii). M/s. Arumug Holdings Private Limited in their account with Axis Bank, Trichy Road, Coimbatore on 11.01.2017: Rs. 6.5 crores; and (iii) the balance amount transferred to others: Rs. 83 lacs, had submitted that though he had allowed the aforementioned persons to deposit their cash in the bank account of M/s. Infant Jesus Foundation Trust, but immediately after depositing the amount, they started pressurising him to transfer the said amount to the accounts mentioned by them. It was further stated by him that the said persons had assured him that they would definitely help him in settling the outstanding bank loan, and thus, on the said pretext, had taken his signature on five blank cheques. The A.O. further observed that Shri Alwyn Stephen (supra), on being queried as to how much commission he had received for allowing the bank account of M/s. Infant Jesus Foundation to be used for facilitating the aforesaid money transfer, had stated that though he had initially retained the 11 Blackburn Fuels Private Limited balance amount of Rs. 83 lacs as his commission, but at the request of Shri Suresh (supra), he had further transferred Rs. 23 lacs to the bank account of M/s. Chennai Raj Chits (Rs. 10 lacs on 13.01.2017 and Rs. 13 lacs on 18.01.2017). Accordingly, it was stated by him that he had received Rs. 60 lacs as commission that was utilized by him for partly settling his financial liabilities through the banking channel.

The A.O. based on the aforesaid facts, issued to the assessee company a “Show-Cause Notice” (SCN) dated 23.09.2021, along with the “draft assessment order” (DAO), wherein it was called upon to explain along with documentary evidence, as to why the amount of Rs. 4.45 crores (supra) may not be added to its returned income. In reply, the assessee company reiterated that it had received the amount of Rs. 4.45 crores (supra) in part discharge of the outstanding trading liability from M/s. Shakti Sugars Limited. The assessee company to substantiate its aforesaid claim, had filed before the A.O., viz. (i). copy of the ledger account of M/s. Shakti Sugars Limited as appearing in its books of accounts; (ii). copy of the ledger account of the assessee company as appearing in the books of accounts of M/s. Shakti Sugars Limited; and (iii). confirmation letter of M/s. Shakti Sugars Limited. Accordingly, it was the claim of the assessee company that as it had 12 Blackburn Fuels Private Limited credited the account of M/s. Shakti Sugars Limited in its books of accounts, therefore, the same evidenced that the amount so received was in part discharge of the outstanding trading liability by M/s. Shakti Sugars Limited.

Also, the assessee company had drawn support from the confirmation letter of M/s. Shakti Sugars Limited, wherein the latter had accepted that the payment was made by M/s. Infant Jesus Foundation Trust to the assessee company on their behalf. Apart from that, the assessee company had drawn support from the fact that M/s. Shakti Sugars Limited had debited its account in their books of account for the subject payment made to the assessee company. Accordingly, the assessee company had stated that as it had no connection with M/s. Infant Jesus Foundation Trust, and had accepted the subject payment only at the behest of M/s. Shakti Sugars Limited (in its running account), therefore, the said amount could not be treated as an unexplained credit

The A.O., after necessary deliberations, did not find favour with the explanation of the assessee company. The A.O. observed that the letter/confirmation of M/s. Shakti Sugars Limited, confirming the contention of the assessee company was a unilateral assertion without 13 Blackburn Fuels Private Limited any corroborating evidence/confirmation from M/s. Infant Jesus Foundation Trust, from whom it had received the amount of Rs. 4.45 crores (supra). The A.O. observed that the amount of Rs. 4.45 crores (supra) was not received in the assessee’s bank account from the bank account of M/s. Shakti Sugars Limited, but was transferred on 05.01.2017 from the bank account of M/s. Infant Jesus Foundation Trust out of the cash deposit (SBNs) of Rs. 11.78 crores (supra) that was made in the latter’s bank account on 30.12.2016. The A.O. observed that Shri Alwyn Stephen, (supra) had in his statement recorded u/s 131(1A) of the Act, dated 17.03.2017, on specifically being queried regarding the cash deposit of Rs. 11.78 crores (supra) in the bank account of M/s Infant Jesus Foundation Trust, had nowhere stated that the amount of Rs. 4.45 crores (out of Rs. 11.78 crores) was made on behalf of M/s. Shakti Sugars Limited. Accordingly, the A.O., based on his aforesaid observations, held a firm conviction that there was no evidence which would corroborate the assessee’s claim that the amount of Rs. 4.45 crores (supra) received from M/s. Infant Jesus Foundation Trust was transferred in its bank account on behalf of its business transactions with M/s. Shakti Sugars Limited. Rather, the A.O. observed that Shri Alwyn Stephen (supra) in his statement recorded u/s 131(1A) of the Act, dated 17.03.2017, had stated that the amount of Rs. 14 Blackburn Fuels Private Limited 4.45 crores (supra) was transferred to the assessee company on 05.01.2017 out of the demonetized cash deposit of Rs. 11.78 crores (supra) made in the bank account of M/s Infant Jesus Foundation Trust on 30.12.2016. Accordingly, the A.O. holding a conviction that the assessee company had failed to discharge the onus that was cast upon it for proving the “nature” and “source” of the amount of Rs. 4.45 crores (supra) deposited in its bank account on 05.01.2017, thus held the same as an unexplained cash credit under Section 68 of the Act in the hands of the assessee company.

Aggrieved, the assessee company carried the matter in appeal before the CIT(A). The CIT(A), after deliberating on the contentions advanced by the assessee company, found favour with the same and vacated the addition of Rs. 4.45 crores (supra), observing as under:

The Revenue, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

We have heard the learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements 19 Blackburn Fuels Private Limited that have been pressed into service by them to drive home their respective contentions.

Admittedly, it is a matter of fact discernible from the record that, as stated by Shri Alwyn Stephen, the sole trustee of M/s. Infant Jesus Foundation, the cash deposit of Rs. 11.78 crores (supra) was made by S/sh. Kulasekaran and Suresh (supra) in Specified Bank Notes (SBNs) in the bank account No.044136000000904 of M/s. Infant Jesus Foundation with Laxmi Vilsas Bank, Adyar, Chennai on 30.12.2016. Thereafter, the aforesaid amount of Rs. 11.78 crores (supra) was transferred to three parties, viz. (i). M/s Arumuga Holdings Pvt. Ltd: Rs. 6.50 crores; (ii) M/s Maheshwari Coal Pvt. Ltd. (i.e the assessee company): Rs. 4.45 crores; and (iii). M/s Chennai Raj Chits: Rs. 23 lacs. Further, we find that Shri. Alwyn Stephen (supra) had in his statement recorded u/s 131(1A) of the Act, dated 17.01.2017, admitted that he had received a commission of Rs. 60 lacs for facilitating the aforesaid money transfer transactions using the bank account of M/s. Infant Jesus Foundation.

On being queried, it has been the claim of the assessee company that it had received the subject amount of Rs. 4.45 crores (supra) in the normal course of its business against the amount outstanding from 20 Blackburn Fuels Private Limited M/s. Shakti Sugars Limited, i.e., its customer. Also, it is a fact discernible from the record that the assessee company, to substantiate its aforesaid claim, had placed on record a copy of the ledger account of M/s. Shakti Sugars Limited in its books of accounts, the copy of the ledger account of the assessee company appearing in the books of account of M/s. Shakti Sugars Limited, and the confirmation letter of M/s. Shakti Sugars Limited, wherein it had accepted that the payment of the subject amount of Rs. 4.45 crore (supra) was made by M/s. Infant Jesus Foundation to the assessee company on their behalf.

We find that the CIT(A), being of the view that the assessee company by placing on record the supporting documentary evidence, had discharged the onus that was cast upon it for proving the “nature” and “source” of the aforementioned amount of Rs. 4.45 crores (supra) that was credited in its bank account thus, had vacated the addition of Rs. 4.45 crores (supra) made by the A.O. under Section 68 of the Act.

We have given our thoughtful consideration to the view taken by the CIT(A) and are unable to persuade ourselves to concur with the same. We say so, for the reason that the CIT(A) had lost sight of certain material aspects while concluding that the assessee company had 21 Blackburn Fuels Private Limited discharged the onus that was cast upon it as per the mandate of Section 68 of the Act.

Admittedly, it is a matter of fact discernible from the record that the assessee company had, during the subject year, received an amount of Rs. 4.45 crores (supra) in its bank account by way of transfer through RTGS from the bank account No.044136000000904 of M/s. Infant Jesus Foundation held with Lakshmi Vilas Bank, Adyar, Chennai. As is discernible from the record, the assessee company had claimed that the subject amount of Rs. 4.45 crore (supra) was received by it against the part discharge of the outstanding liability from M/s. Shakti Sugars Limited, and that M/s. Infant Jesus Foundation Trust had made the said payment on behalf of M/s. Shakti Sugars Limited. Further, the assessee company, to corroborate its aforesaid claim, had placed on record supporting documentary evidence, viz. (i). copy of the ledger account of M/s. Shakti Sugars Limited in its books of accounts; (ii) the copy of the assessee’s ledger account in the books of account of M/s. Shakti Sugars Limited; and (iii). confirmation letter from M/s. Shakti Sugars Limited, wherein it had confirmed that the payment of Rs. 4.45 crores (supra) to the assessee company was made by M/s. Infant Jesus Foundation Trust on their behalf.

We are afraid that the facts involved in the present case are not as simple as projected by the assessee company. We say so, for the reason that this is a case where Specified Bank Notes, i.e. (demonetized currency) amounting to Rs. 11.78 crores were deposited in the bank account No.044136000000904 of M/s. Infant Jesus Foundation Trust maintained with Lakshmi Vilas Bank, Adyar, Chennai, which thereafter had found its way to the pockets of four parties, viz. (i). M/s Arumuga Holdings Pvt. Ltd: Rs. 6.50 crores; (ii) M/s Maheshwari Coal Pvt. Ltd. (i.e the erstwhile name of the assessee company): Rs. 4.45 crores; (iii). M/s Chennai Raj Chits: Rs. 23 lacs; and (iv). Shri. Alwyn Stephen (retained by him as commission for facilitating the transfer of the money through the bank account of M/s Infant Jesus Foundation Trust – as admitted by him in his statement recorded on oath u/s 131(1A) on 17.03.2017: Rs. 60 lacs).

Although it is the claim of M/s. Shakti Sugars Limited, that the payment of Rs. 4.45 crores (supra) was made to the assessee company by M/s. Infant Jesus Foundation Trust, on their behalf, however, the facts available on record speak otherwise. Shri Alwyn Stephen (supra) in his statement recorded under Section 131(1A) of the Act on 17.03.2017, had nowhere stated that the amount of Rs. 4.45 crores 23 Blackburn Fuels Private Limited (supra) transferred to M/s. Maheshwari Coal Pvt. Ltd., i.e., the assessee company, was as per the directions/on behalf of M/s. Shakti Sugars Limited. On the contrary, we find that Shri Alwyn Stephen (supra) in his statement recorded under Section 131(1A) of the Act, had stated that the cash (SBN’s) amounting to Rs. 11.78 crores (supra) was deposited in the current account of M/s. Infant Jesus Foundation with Lakshmi Vilas Bank, Adayar, Chennai by S/Shri Kulasekaran (supra) and Suresh (supra), and that he had only signed the duly filled pay-in- slips. Shri Alwyn Stephen (supra) in his statement dated 17.03.2017 had further deposed that he had approached his friend Shri Kulasekaran to settle the loan of Rs. 15 crores of M/s. Infant Jesus Foundation Trust outstanding towards ICICI Bank. Shri Alwyn Stephen (supra) had further stated that his friend, i.e., Shri Kulasekaran (supra), had introduced him to Shri Suresh (supra) for the necessary help, who had thereafter agreed to deposit an amount of Rs. 11.78 crores in the bank account of M/s. Infant Jesus Foundation Trust to facilitate settling the latter’s outstanding loan. Shri Alwyn Stephen had nowhere in his statement recorded under Section 131(1A) of the Act, dated 17.03.2017, ever stated that the amount of Rs. 11.78 crores or any part thereof was deposited in the bank account of M/s Infant Jesus Foundation Trust on behalf of M/s. Shakti Sugars Limited. In fact, the 24 Blackburn Fuels Private Limited entire statement of Shri Alwyn Stephen (supra), nowhere makes any mention of M/s. Shakti Sugars Limited, or the claim of the assessee company that the amount of Rs. 4.45 crores (supra) was transferred from the bank account of M/s Infant Jesus Foundation Trust to the account of the assessee company on behalf or as per the dictates of M/s Shakti Sugars Limited.

We are of the firm conviction that the CIT(A) had lost sight of the material fact that it was a case where a substantial amount of cash deposit of demonetized currency of Rs. 11.78 crores, i.e., (specified bank notes) was routed through the bank account of M/s. Infant Jesus Foundation Trust to the pockets of certain concerns/entities i.e., the beneficiaries (including the assessee company), which, thus, required thorough investigation. Although the CIT(A) had summarily accepted the claim of M/s. Shakti Sugars Limited that M/s Infant Jesus Foundation Trust had made the payment of Rs. 4.45 crores (supra) to the assessee company on their behalf, but there is nothing available on record from where it could be gathered that M/s. Shakti Sugars Limited (supra) had owned any part of the specified bank notes/demonetized currency that was deposited in the Current bank account No. 04413600000000904 of M/s. Infant Jesus Foundation on 30.12.2016, 25 Blackburn Fuels Private Limited and was thereafter routed through RTGS transfer to the bank account of the assessee company. Also, there is nothing available on record from where it can be gathered that Shri Kulasekaran (supra) and Shri Suresh (supra), who had made the cash deposit amounting to Rs. 11.78 crores in the bank account of M/s. Infant Jesus Foundation Trust had ever stated/admitted that they were the representatives of M/s. Shakti Sugars Limited or had made such cash deposit on its behalf. We, thus, find that though M/s. Shakti Sugars Limited had claimed that the payment to the assessee company was made by M/s. Infant Jesus Foundation Trust on their behalf, but it had nowhere owned the cash deposits (SBNs) made in the bank account of M/s. Infant Jesus Foundation, which, as observed by us hereinabove, was transferred through RTGS to the bank account of the assessee company.

We find that it is a case where the transaction of payment of Rs. 4.45 crores (supra) that M/s. Shakti Sugars Limited had claimed to have made to the assessee company (through M/s. Infant Jesus Foundation) had been projected as a simple business transaction, but we are afraid that nobody had come forward to own the demonetized currency (SBNs) that was deposited in the bank account of M/s. Infant Jesus Foundation Trust. We are of the view that the probability that the 26 Blackburn Fuels Private Limited cash deposits made in the demonetized currency/SBN’s in the bank account of M/s. Infant Jesus Foundation Trust, which, thereafter, was utilized for making payments to the aforementioned beneficiaries, viz. (i). M/s Arumuga Holdings Pvt. Ltd: Rs. 6.50 crores; (ii) M/s Maheshwari Coal Pvt. Ltd. (i.e the erstwhile name of the assessee company): Rs. 4.45 crores; and (iii). M/s Chennai Raj Chits: Rs. 23 lacs belonged to the said respective beneficiary concerns, and have been laundered and routed back to them using the bank account of M/s Infant Jesus Foundation Trust, cannot be ruled out. Our aforesaid conviction is fortified by the fact that Shri. Alwyn Stephen, sole trustee of said M/s. Infant Jesus Foundation Trust, had in his reply to Questions No. 11 and 12 of his statement recorded under Section 131(1A) of the Act on 17.03.2017, stated that he had received a commission of Rs. 60 lacs for facilitating the aforesaid accommodation entries.

We are of the view that the CIT(A) had grossly erred in summarily accepting the claim of the assessee company that the payment of Rs. 4.45 crores (supra) was made by M/s. Infant Jesus Foundation on behalf of M/s. Shakti Sugars Limited. We are of a firm conviction that to arrive at the correct factual position, it is necessary that the 27 Blackburn Fuels Private Limited statements of the persons involved in the present case, viz. (i). Shri Alwyn Stephen (supra); (ii). M/s. Shakti Sugars Limited; (iii). Shri Kulasekaran (supra); (iv). Shri Suresh; (v) M/s Arumug Holdings Pvt. Ltd. (one of the parties to whom an amount of Rs. 6.50 crores was transferred); (vi). M/s Maheshwari Coal Pvt. Ltd., i.e., the assessee company (to whom an amount of Rs. 4.45 crores was transferred); and (vii). M/s Chennai Raj Chits (one of the parties to whom an amount of Rs. 23 lacs was transferred) requires to be recorded. We thus, in terms of our aforesaid observations, set aside the order of the CIT(A) and direct the A.O. to summon the aforementioned parties and record their statements on oath under Section 131(1A) of the Act. Apart from that, the A.O. shall, in the course of the set aside proceedings, remain at liberty to carry out such other enquiries and verifications as he may deem fit.

Resultantly, the order passed by the CIT(Appeals) is set aside and the matter is restored to the file of the A.O. for fresh adjudication in terms of our aforesaid observations.

In the result, the appeal filed by the Revenue is allowed for statistical purposes, in terms of our aforesaid observations.