ACIT., CENTRAL CIRCLE-2(4), HYDERABAD vs. R.K.INFRACORP PRIVATE LIMITED, HYDERABAD

As the issues involved in the present cross-appeals are inextricably interlinked and interwoven, therefore, they are being taken up and disposed of together vide this consolidated order.

Succinctly stated, the assessee company, viz., M/s. R.K. Infracorp Private Limited is engaged in the business of executing civil contract works.

Search and seizure operations under section 132 of the Act were carried out in the case of the assessee company, viz., M/s. R.K. Infracorp Private Limited and others on 06/02/2020. Thereafter, the assessee company had filed its return of income for AY 2020-21 on 07/01/2021, declaring an income of Rs. 9,97,04,080/- (after claiming deduction under section 80IA of the Act of Rs. 15,18,20,494/-). The assessee company had disclosed its “book profit” under section 115JB of the Act at Rs. 24,69,59,809/-. Subsequently, the case was selected for scrutiny

During the course of the assessment proceedings, the AO observed that the assessee company had received Rs. 58,40,75,961/- and Rs. 53,18,86,949/- from M/s. Megha Engineering & Infrastructure Limited (for short, “MEIL”), during the Financial Years (F.Ys.) 2018-19 and 2019-20, respectively, for executing works contracts for Kaleswarama project and Purushottapatnam project. The AO observed that the assessee company had sub-contracted the aforesaid works to several entities on a back-to-back basis. The AO, based on the material available before him, recorded his observations with respect to the parties to whom the assessee company had sub-contracted the aforesaid work, as under:

The AO observed that the aforementioned sub-contractor, viz., M/s. Equus Infra Projects Private Limited (for short, “M/s. EIPPL”) had received an amount of Rs. 13,67,45,433/- and Rs. 3,20,86,115/- from the assessee company during the F.Y.2018-19 and F.Y.2019-20, respectively, for the aforementioned projects. It was observed by him that out of the total amount of Rs. 13.67 crores received from the R.K. INFRACORP PRIVATE LIMITED assessee company in March 2019, an amount of Rs. 9.03 crores was paid to different parties by M/s. EIPPL in a short span of time, i.e., from 14/03/2019 to 31/03/2019. Also, it was observed by the AO that the remaining amount was paid to different persons from 01/04/2019 to 10/04/2019, and the same was claimed as sub-contractor expense. Further, the AO observed that an amount of Rs. 3.25 crores, received by M/s. EIPPL from the assessee company, i.e., M/s. R.K. Infracorp Pvt Limited, on 09/04/2019, was immediately majorly withdrawn by the said sub-contractor in two tranches, viz., (i) on 09/04/2019: Rs. 70 lakhs; and (ii) on 10/04/2019: Rs. 1.30 crores. The AO observed that the aforesaid set of transactions between the assessee company and M/s. EIPPL and different persons appeared to be suspicious. Elaborating on his conviction, the AO observed that the persons who had in turn received the amounts from M/s. EIPPL were filing their returns of income under section 44AD of the Act and not maintaining any books of accounts. Apart from that, it was observed by him that the said sub-contractor parties had no significant machinery/stock, etc., to undertake the infrastructure work allocated by M/s. EIPPL. Also, the AO took cognisance of the fact that during the course of the search proceedings conducted at the premises of M/s. EIPPL, a handwritten diary was found which contained the names of the persons as “wages adjustment for R.K. INFRACORP PRIVATE LIMITED cash”, which proved beyond doubt that the cash withdrawals of Rs. 2 crores made by M/s. EIPPL during April 2019 was for non-business purposes.

The AO, based on the aforesaid facts, viz., (i) that no proper documentation was maintained at the premises of M/s. EIPPL regarding its transactions/payments made to the sub-contractor parties; (ii) the cash of Rs. 2 crores withdrawn by M/s. EIPPL, as per the handwritten diary seized in the course of the search proceedings at its premises, revealed that the amount so withdrawn was adjusted against the bogus labour expenses; (iii) that the sub-contractors to whom the payments were made by M/s. EIPPL had filed their returns of income under section 44AD of the Act, and there were no supporting documents to substantiate the fact that they had rendered their services as sub- contractors; and (iv) that no supporting documents evidencing that any work was actually done were found in the possession of M/s. EIPPL in the course of search proceedings, and it seemed that the same was in the nature of accommodation entries provided by M/s. EIPPL.

The AO, on a perusal of the record before him, observed that the assessee company had provided sub-contract work of Rs. 8,22,48,188/-

The AO, based on the material before him, observed that the assessee company had provided sub-contract work of Rs. 5,08,63,687/- during the F.Y. 2019-20 to M/s. Aaria Projects Private Limited (for short, “M/s. APPL”). The AO observed that the search and seizure proceedings that were conducted in the case of M/s. APPL by the Director General of Intelligence (Investigation), Hyderabad on 04/04/2019, revealed that the said entity was primarily involved in providing accommodation entries to major infrastructure companies. Apart from that, it was observed by him that, as per the information received from the GST Department, the aforementioned party, viz., M/s. APPL was involved in generating fake invoices without supplying goods and services. The AO, based on his aforesaid deliberations, concluded that M/s. APPL had not executed any work for the assessee company and was involved in providing accommodation entries to the main contract giving entity, i.e., the assessee company.

The AO based on his aforesaid observations regarding the transactions between the assessee company and the aforementioned sub-contractor entities, viz., (i) M/s. EIPPL; (ii) M/s. SSGI; and (iii) M/s. APPL called upon the assessee company to explain why the respective

Apart from that, we find that the AO in the course of the assessment proceedings relied upon the contents of certain loose sheets that were seized during the course of the search proceedings from the residential premises of Sri R. Srinivas Reddy, Director of the R.K. INFRACORP PRIVATE LIMITED assessee company, at Plot No.110, Road No.72, Navnirman Nagar, Jubilee Hills, Hyderabad, and were marked as, viz. Annexure A-1/Pages 01 to 02, and observed that the same revealed that the assessee company had prior to April, 2019, made certain payments towards purchases, which thereafter it had received back in cash from the said parties and not recorded the same in its books of accounts. On a perusal of the assessment order, we find that the AO had made a specific reference to three such transactions, based on which he held a conviction that cash was received back by the assessee company from the parties to whom payments were made towards purchases, as under:

The AO observed that the assessee company had made a payment of Rs. 25 lacs to Basheer Khan fuel station on 02/04/2019 from its SBI bank account. The AO, referring to the aforesaid noting mentioned in the seized Annexure A-1/Pages 01-02, held a conviction that the assessee company after making a payment of Rs. 25 lakhs to Basheer Khan fuel station through banking channel on 02/04/2019, had thereafter taken back an amount of Rs. 20 lakhs on 09/04/2019 from the said concern and used the same for its non-business purposes. Also, the AO referred to the statement of Sri R. Srinivasa Reddy, Director of the assessee company, recorded under section 132(4) of the Act on R.K. INFRACORP PRIVATE LIMITED 08/02/2020, wherein, on being confronted with the aforesaid noting recorded in the seized Annexure A-1/Pages 01-02 he had failed to explain the same.

The AO referred to the aforesaid notings mentioned in the seized Annexure A-1/Pages 01-02, and observed that, as per the Tally Data of the assessee company for the F.Y. 2018-19, a ledger account in the name of “DHR Quality Fuels” was found. It was observed by him that the assessee company had, in March 2019, made a payment of Rs. 2 crores to “DHR Quality Fuels” towards the purchase of diesel during the said preceding year. Accordingly, the AO, referring to the contents of the seized document, i.e., Annexure A-1/Pages 01-02, observed that the same revealed that the assessee company had first made a payment of Rs. 2 crores to M/s. DHR Quality Fuels during March 2019 and had thereafter taken back cash of Rs. 32 lakhs from the said party on 28/03/2019. The AO pressed into service the statement of Sri R. Srinivasa Reddy, Director of the assessee company, recorded under section 132(4) of the Act on 08/02/2020, wherein he had failed to explain the aforesaid noting in the seized document.

The AO, referring to the aforesaid noting mentioned in the seized document, viz., Annexure A-1/Pages 01-02, observed that the assessee company, as per its Tally Data for the F.Y. 2019-20, had made total payments of Rs. 26,73,528/- to M/s. Vinayaka Fertilisers. The AO, after correlating the aforesaid entry recorded in the tally data with the contents of the aforesaid seized document, observed that the assessee company, against the payment of Rs. 26.73 lakhs made to M/s. Vinayaka Fertilisers had received back from the said concern cash of Rs. 27 lakhs.

The AO, based on his aforesaid observations, called upon the assessee company to explain the entries mentioned in the aforesaid seized documents, viz., Annexure A-1/Pages 01-02. It was submitted by the assessee company that the notings in the seized loose slips were nothing but unsigned scribblings, wherein some names, amounts and dates were mentioned, which were nothing but rough estimates that did not speak anything related to bogus purchases, etc. Elaborating on its contention, it was submitted by the assessee company that the scribblings on the loose slips did not reveal the nature of the transaction, signatures of the persons with whom the transactions were purported to have been entered or even the signatures of the assessee, which, thus, revealed beyond doubt that they were merely rough notings. However,

Thereafter, the AO, based on his aforesaid deliberations, vide his order passed under section 143(3) of the Act, dated 30/03/2022, determined the income of the assessee company at Rs. 30,46,19,302/-.

Aggrieved, the assessee company carried the matter in appeal before the CIT(A).

The assessee company had, in the course of the proceedings before the CIT(A), withdrawn its grounds of appeal qua the addition of R.K. INFRACORP PRIVATE LIMITED commission income of Rs. 13,65,222/- made by the AO. Accordingly, the CIT(A) dismissed the said ground as not pressed.

We have heard the Ld. Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. Authorised Representatives of both parties to drive home their respective contentions.

We find on perusal of the CIT(A) order that the assessee company had assailed the assessment order before him based on its three-fold contentions, viz., (i) that the order passed by the AO under section 143(3) of the Act, dated 30/03/2022 was barred by limitation under section 153B r.w.s 292CC(2) of the Act as the assessment that was to be completed latest by 30/09/2021 was concluded on 30/03/2022; (ii) that the addition made by the AO based on the rough notings/scribblings on the seized loose papers, viz., Annexure A1/Pages 01-02 which were unsigned, partly undated, uncorroborated and unsupported by any tangible evidence in absence of any unaccounted cash or assets could not have been made under section 69A of the Act; and (iii) that the additions made by the AO under section 69A of the Act of Rs.20.35

As is discernible from the record, the CIT(A) did not find favour with the contentions advanced by the assessee company that the order passed by the AO under section 143(3) of the Act, dated 30/03/2022, was barred by limitation as per section 153B r.w.s 292CC of the Act. Although, it was the claim of the assessee company that as the search in the case of the assessee company was concluded based on the last panchnama drawn on 09/02/2020 and the outer limit expired on 30/09/2021 after giving effect to the extensions granted under the Taxation And Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 (for short, “TOLA”), but the CIT(A) held a firm conviction that as the search was conducted jointly in M/s. Prathima Infrastructure Limited (for short, “M/s. PIL”) group of cases and as the date of the last panchnama drawn on the said group was 23/07/2020, therefore, the same would govern the reckoning of the period of limitation and, thus, the assessment completed in the case of the assessee company was within the statutory time limit.

We shall first deal with the observations of the CIT(A), wherein he had, though sustained the additions made by the AO pertaining to three entries viz. (i). Entry of “Basheer Khan Pump Direct RRR”: Rs.

The AO observed that the assessee company had made a payment to M/s. Dwaraka Constructions of Rs. 1.50 crores on 12/04/2019. The AO taking cognisance of the noting/scribbling mentioned in the loose sheets found in the course of the search proceedings, viz., Annexure A-1/Pages 01-02, wherein it was mentioned, viz. “Cement Shop-Dwaraka-RRR”, dated 07/04/2019 for Rs. 30,00,000/-, held a conviction that the amount of Rs. 30 lakhs mentioned in the seized loose sheets, viz., Annexure A-1/Pages 01-02, could have been received by the assessee company from M/s. Dwaraka Constructions on 07/04/2019.

On appeal, the CIT(A) after considering the second “remand report” of the AO and the rejoinder of the assessee company, held a firm conviction that as the subject expenditure of Rs.1.50 crores was incurred by the assessee company on 12/04/2019, i.e., during the year under consideration itself, therefore, the noting/scribbling on the loose sheets seized in the course of the search proceedings, viz., Annexure A1/Pages 01-02 wherein an amount of Rs.30 lakhs was mentioned against the name of the aforementioned party to whom the payment was made during the year under consideration could safely be related to the said

We have given thoughtful consideration to the observations of the authorities below. At the threshold, we may herein observe that the AO in his second “remand report” filed before the CIT(A) had observed that the amount of Rs. 30 lakhs “could have been received from M/s. Dwaraka Constructions by the assessee company”. Accordingly, the very observation of the AO itself evidences that he was himself not confident that the transaction gathered from the contents of the said loose sheet seized, i.e., Annexure A1/Pages 01-02, pertained to the payment that was made by the assessee company to M/s. Dwaraka Constructions of Rs. 1.50 crores on 12/04/2019. Apart from that, as the alleged cash receipt of Rs. 30 lakhs on 07/04/2019 precedes the R.K. INFRACORP PRIVATE LIMITED payment of Rs. 1.50 crores that was made by the assessee company to M/s. Dwaraka Constructions on 12/04/2019, therefore, are unable to comprehend that in case the aforementioned party/concern, viz., M/s. Dwaraka Constructions had provided an accommodation entry to the assessee company, i.e., a beneficiary, then how the payment of Rs. 30 lakhs could have been received by the assessee company prior to the making of the payment of Rs. 1.50 crores on 12/04/2019. Be that as it may, we find that the AO in his attempt to correlate the noting/scribbling on the loose sheets viz., “Cement shop-Dwaraka-RRR” with the transactions carried out by the assessee company with M/s. Dwaraka Constructions had failed to bring on record any grain of evidence which would irrefutably corroborate his view. In fact, we find that the AO had not even carried out any enquiry with M/s. Dwaraka Constructions, before drawing adverse inferences and treating the amount of Rs. 30 lakhs (supra) as mentioned in the seized loose sheet, viz., Annexure A- 1/Pages 01-02, as the amount received by the assessee company from M/s. Dwaraka Constructions. In our view, such unsubstantiated additions merely based on suspicion, however strong, cannot be sustained de hors the absence of any material/evidence supporting the same. Our aforesaid view is supported by the order of the Hon’ble Supreme Court in the case of Common Cause (Registered Society)

As observed by us hereinabove, the AO, referring to the aforesaid noting mentioned in the seized document, viz., Annexure A-1/Pages 01- 02, observed that the assessee company, as per its Tally Data for the F.Y. 2019-20, had made total payments of Rs. 26,73,528/- to M/s. Vinayaka Fertilisers. The AO, after correlating the aforesaid entry recorded in the tally data with the contents of the aforesaid seized document, observed that the assessee company against the payment of Rs. 26.73 lakhs made to M/s. Vinayaka Fertilisers had received back from the said concern cash of Rs. 27 lakhs.

We have given thoughtful consideration to the contentions advanced by the Ld. AR’s of both parties as regards the issue in hand,

At the threshold, we may observe that as the name mentioned in the seized loose sheet is “Venkat Rama Ref-Fertilr”, while for that considered by the AO as recorded in the tally data of the assessee company is “Vinayak Fertilizers”, therefore, the AO, before drawing any inferences in context of the noting recorded in the seized loose sheet was statutorily obligated to have proved that both the above two entities were same. However, we find that the AO had failed to discharge the onus cast upon him and had summarily presumed without any basis that both the said entities were the same. In fact, we find that though the CIT(A) had taken cognisance of the said material fact that the names of the said two entities were not identical, but thereafter had most arbitrarily proceeded on the ground that there was some similarity in the names of the said two entities. We are unable to persuade ourselves to subscribe to the approach adopted by both the lower authorities, who we are pained to observe had put the said material aspect under the carpet and had proceeded to draw adverse inferences in the hands of the assessee company. Apart from that, we find that a reference to the amount of Rs. 27 lakh (dt. 09/04/2019) mentioned in the seized loose sheet as against the payments recorded in the tally data of the assessee company

We have given thoughtful consideration to the aforesaid addition of Rs. 20 lacs made by the AO, which, thereafter, had been approved by the CIT(A). At the threshold, we may observe that it has been the claim of the assessee company from the beginning that the contents of loose sheets were rough estimates and not real transactions. Also, Sri. Srinivasa Reddy, director of the assessee company, had in his statement recorded under section 132(4) of the Act, dated 08.02.2020, inter alia, denied of having received back the amounts paid to the vendors/sub- contractors. In our view, in case the AO intended to disbelieve the claim of the assessee company and act upon the contents of the same for inferring that the same revealed the cash of Rs. 20 lacs that it had received back from the aforesaid party (on 09.04.2019) pursuant to the R.K. INFRACORP PRIVATE LIMITED payment of Rs. 25 lacs made to the latter through banking channel (on 02.04.2019), then considering the claim of the assessee company that the impugned noting was a rough estimate, it was incumbent upon him to have brought on record any material to support his conviction and dislodge the claim of the assessee company. We say so, for the reason that as the assessee company had denied of having made any cash payment to the aforesaid party, therefore, onus was cast upon the AO to prove to the contrary as the assessee company could not have been called upon to prove the negative. Our aforesaid view is fortified by the judgment of the Hon’ble High Court of Andhra Pradesh in Asam Srinivasa Reddy Vs. ITO (2022) 145 taxmann.com 659 (AP), wherein it is held that the negative cannot be proved by the assessee. In our view, the bare minimum that was required on the part of the AO was to examine the aforesaid party, viz. M/s Basheer Khan Fuel Station instead of making the impugned addition in thin air without any supporting material. Although the contents of the subject loose slip read in the backdrop of the payment made by the assessee company to the aforesaid party might have raised some doubt in the mind of the AO regarding the genuineness of its claim of expenditure of Rs. 25 lac paid through banking channel to the said party, but we are afraid that doubts and suspicion, however strong, cannot take the place of evidence. Our

We shall now deal with the next category of 7 entries aggregating to Rs. 3.45 crores, where names appearing in the seized loose sheets,

We find on a perusal of the CIT(A) order that the AO had in his “remand report” referred to the names mentioned against 7 notings as were gathered from the seized documents, viz., Annexure A-1/Pages 01-02, wherein though there was some semblance in the names found in the Tally Data of the assessee company, but transactions in the Tally Data could not be correlated with the entries in the seized documents, which for the sake of clarity are culled out as under:

Ostensibly, the assessee company on being confronted with the aforementioned 7 entries had come forth with multi facet contentions, viz., (i) that the names in the Tally Data of the seized documents were not identical and therefore, it could not be conclusively said that they were the same individuals; (ii) that as the AO had not pointed out whether the assessee company has booked any expenditure which could be regarded as bogus expenditure in respect of the said individual

On appeal, the CIT(A) after considering the “remand reports” of the AO in the backdrop of the rejoinder filed by the assessee company found favour with the claim of the assessee company by observing, viz., (i) that as the names in the Tally Data and the seized documents were not identical, therefore, it could not be conclusively said that they were the same individuals; (ii) that though the AO had drawn some semblance with the names appearing in the Tally Data, however, in absence of the details of transactions and amounts no adverse inferences could have been drawn in the hands of the assessee company; and (iii) that as the AO has not pointed out that the assessee company had booked any expenditure against the names of the subject individuals which could be regarded as bogus expenditure, therefore, in absence of any expenditure having been booked against the names of the R.K. INFRACORP PRIVATE LIMITED aforementioned parties in the books of accounts of the assessee company, the theory of bogus expenditure and receipt of cash could not be proved. Also, the CIT(A) categorically observed that though the particulars for examination were provided to the AO twice for submission of remand report, but no adverse corroborative findings were given by the AO with respect to the aforementioned 7 entries. Accordingly, the CIT(A), based on his aforesaid observations, found no merit in the addition of Rs. 3.45 crores made by the AO with respect to the 7 entries mentioned in the seized loose sheets, viz., Annexure A-1/Pages 01-02 and vacated the same.

We have given thoughtful consideration to the view taken by the lower authorities regarding the addition of Rs. 3.45 crores made by the AO with respect to the 7 entries in the seized documents, viz., Annexure A-1/Pages 01-02, which thereafter had been vacated by the CIT(A).

At the threshold, we concur with the CIT(A) that as the names mentioned in the seized documents, viz., Annexure-A1/Pages 01-02 regarding the aforementioned 7 entries are not identical to those mentioned in the Tally Data, therefore, on the said count itself no adverse inference could have been drawn in the hands of the assessee company. Also, we are of firm conviction that as the AO had neither placed on record any material to correlate the entries mentioned in the R.K. INFRACORP PRIVATE LIMITED seized loose sheets, viz., Annexure A1/Pages 01-02 with the persons mentioned in the Tally Data, i.e., by recording the statements of the said respective persons or otherwise, therefore, the addition so made by him being devoid and bereft of any supporting material cannot be sustained. Our aforesaid view is supported by the order of the Hon’ble Supreme Court in the case of Common Cause (Registered Society) Vs. Union of India (2017) 394 ITR 220 (SC), wherein it is held that loose sheets and random notings without corroborative evidence lack evidentiary value. Apart from that, we find it incomprehensible that now when the assessee company had not booked any expenditure against the names of the subject persons in its books of account, then on what basis any disallowance of an expenditure based on the vague notings/scribblings in the seized loose sheets, viz., Annexure A-1/Pages 01-02 could have been made in the hands of the assessee company. Accordingly, finding no infirmity in the view taken by the CIT(A), who, in our view, had based on his reasoned observations vacated the unsubstantiated addition of Rs. 3.45 crores (supra) made by the AO with respect to the aforementioned 7 entries, uphold his order. The Ground of appeal No. 1 raised by the revenue is dismissed.

As the revenue has assailed the CIT(A) order only to the extent that he had erred in vacating the addition made by the AO in respect of 8 parties (out of 10 parties) aggregating to Rs. 12,86,73,000/-, therefore, we are restricting our adjudication only to the said extent.

The CIT(A), based on his aforementioned observations regarding the abovementioned 8 entries mentioning the nick names of the Director of the assessee company and his brother, which could not be correlated with the books of accounts: Rs. 1286.23 lakhs, had vacated the same.

We have given thoughtful consideration to the observations of the CIT(A) based on which he had vacated the addition of Rs. 1286.23 lakhs (supra) relating to the aforementioned 8 entries. In our view, as the AO had in his second “remand report” admitted that the 8 entries mentioning the nick name of the Director of the assessee company and his brother could not be found in the Tally Data and the books of accounts of the assessee company, therefore, as observed by the CIT(A), and rightly so, there could not have been any justification for the AO after conceding to the aforesaid factual position to have sustained the addition with respect to the aforementioned 8 entries. Also, we concur with the CIT(A) that as the AO had conceded in his “remand report” that the entries bearing nick

Although, we have vacated the impugned addition made by the AO with respect to the 24 entries mentioned in the seized loose sheets/documents, viz., Annexure A-1/Pages 01-02 based on our aforesaid observations, but as the revenue has assailed the view taken by the CIT(A) that the AO could not have made the impugned addition by invoking the provisions of section 69A of the Act, therefore, for the

Before proceeding further, we deem it fit to cull out section 69A of the Act, which reads as under:

Ostensibly, the provisions of section 69A can be pressed into service only in a case where the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article; or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, then the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. Accordingly, the conditions that are R.K. INFRACORP PRIVATE LIMITED required to be cumulatively satisfied for triggering the provisions of section 69A of the Act can be safely dissected, viz., (i) that the assessee is found to be the owner of money, bullion, jewellery or any other valuable article; (ii) that such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by the assessee for any source of income; and (iii) that the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable articles; or the explanation offered by him is not, in the opinion of the AO, satisfactory. Thus, it is only on such cumulative satisfaction of the aforementioned set of conditions that the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for the said financial year under Section 69A of the Act.

As observed by us hereinabove, the very first precondition for invoking section 69A of the Act is that the assessee is found to be the owner of any money, bullion, jewellery or valuable article.

Coming to the facts of the present case, we find that it is the claim of the revenue that they had during the course of the search proceedings conducted on the assessee company seized certain loose sheets, viz., Annexure A-1/Pages 01-02, which revealed that certain expenses that R.K. INFRACORP PRIVATE LIMITED were debited by the assessee company and claimed as a deduction either during the year under consideration or in the immediately preceding year were received back in cash from the concerned parties. However, we concur with the CIT(A) that as during the course of the search proceedings, no corroborative evidence based on the notings of the seized loose sheets, viz. Annexure A-1/Pages 01-02 was found which would reveal that the assessee company was the owner of any unaccounted cash, unaccounted jewellery, unaccounted assets etc., therefore, the basic pre-condition for invoking the provisions of section 69A of the Act, i.e., ownership of money or bullion, jewellery or valuable articles, not recorded in the books of recorded in the books of accounts and failure to satisfactorily explain the nature and source of the same is in itself not met out, as a result whereof the provisions of section 69A of the Act could not have been invoked by the AO. Our aforesaid view that the first condition for applying the provisions of Section 69A is that the assessee should be found to be the owner of any money, bullion, jewellery or other valuable article and, secondly, the same should not be found recorded in the books of account of the assessee, if any, maintained by him is supported by the judgment of the Hon’ble High Court of Punjab & Haryana in CIT Vs. Ravi Kumar (2008) 168 Taxman 150 (P&H). In the case before them, the Hon’ble High Court

Alternatively, the CIT(A) has rightly observed that now, when the AO, while framing the assessment, had himself tried to relate the entries in the seized loose sheets with the duly recorded entries in the books of accounts of the assessee company, i.e., as cash received by the assessee company from its vendors/sub-contractors on account of bogus or inflated expenses that it had booked in its books of account for either the year under consideration or the immediately preceding year, thus, the said aspect itself contradicts the invoking of the provisions of section 69A of the Act.

The Ground of appeal no.4, raised by the revenue being general, is dismissed as not pressed.

Resultantly, the appeal filed by the revenue being devoid and bereft of any substance is dismissed, and the appeal filed by the assessee company is allowed in terms of our aforesaid observations.