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Facts
The Revenue appealed against the CIT(A)'s order which deleted an addition of Rs. 12,70,19,059/- made by the AO on account of unexplained cash entries. The addition was based on cash found during a search operation. The AO had accepted cash generated from bogus purchases for AY 2020-21 and 2021-22 but not for AY 2019-20.
Held
The Tribunal held that the CIT(A)'s order deleting the addition was just and proper. The Tribunal noted that the assessee had engaged in bogus invoicing and received cash back. The CIT(A) had rightly considered the cash generated from RTGS payments made in AY 2019-20 and accepted the explanation for the cash found.
Key Issues
Whether the CIT(A) was justified in deleting the addition of unexplained cash entries by accepting the explanation of cash generated from RTGS payments made in AY 2019-20.
Sections Cited
143(3), 153A, 69A, 132
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, DELHI
Before: MS. MADHUMITA ROY & SHRI NAVEEN CHANDRA
The appeal filed by the Revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals) -30, New Delhi (hereinafter referred to as “CIT(A)”) dated 22.02.2024 arising out of the order of assessment dated 30.03.2022 under Section 143(3) read with section 153A of the Income-Tax Act, 1961 (hereinafter referred to as "the Act") passed by the learned Assessing Officer, DCIT, Central Circle - 30. New Delhi (hereinafter referred to as “AO”), for AY – 2021-22.
The Revenue has filed the appeal with the following grounds:
“1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in partly allowing the appeal of assessee without considering the facts and circumstance of this case.
2. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 12,70,19,059/- on account of unexplained cash entries under section 69A of the Act.
3. The Ld. CIT(A) has ignored the finding of AO during assessment proceedings wherein the assessee falled to establish the creditworthiness and genuineness of the transactions of Rs. 12,70,19,059/-.
4. The order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law.
That the grounds of appeal
are without prejudice to each other.
6. The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.”
We have heard the rival submissions made by the respective parties and we have also considered the materials on record including the orders passed by the authorities below and the judgments relied upon by the respective parties.
The brief facts leading to the case are that there was a search and seizure operation u/s 132 of the Act conducted on 26.10.2020 in the case of assessee along with the other cases of Sanjay Jain and Mehta Group at various residential and business premises. The year of search is financial year 2020-21 relevant to assessment year 2021-22 and is year under consideration before us. The assessee is an engineering, procurement and construction (EPC) contractor and undertakes accommodation projects mainly for Central Government agencies. Assessee has furnished its return of income for the AY 2021-22 on 07.03.2022 declaring total income of Rs. 26,49,11,280/- u/s 139 of the Act. According to learned AO there are evidence that the assessee company was in practice of generating the cash through RTGS on the bogus bills acquired from the Sanjay Jain and his controlled entities. During the course of search at the residential premises of the Director of the company and office premises of the company following cash was found as detailed below:
Sr. Address Name Total Cash Total Cash Cash No. found seized Released i) 5A, 5th Floor, Central Mr. Vikas 59,75,37,500/- 59,65,00,000/- 10,37,500/- Park, Gurgaon Mehta ii) 1402, Tower No. 4, Mr. Amit Gupta 41,82,200/- 40,00,000/- 1,82,000/- Gurgaon iii) House No. 205, Mr. Naveen 34,05,900/- 30,00,000/- 4,05,900/- Chandigarh Mehta iv) Locker No. 35, HDFC Ms Rashmi 35,000/- - 35,000 Bank, Sector 35B, Mehta Wife of Chandigarh Mr. Vikas Mehta v) Locker No. 108, HDFC Mr. Vijay 34,94,500/- 34,94,500/- --- Bank, Sector 35B, Mehta Chandigarh vi) Sarojini Nagar Office GLCPL 3,70,000/- -- 3,70,000/- vii) House No. 410, GLCPL 30,100/- -- 30,100/- Chandigarh viii) House No. 22, GL Mehta 2,52,400/- -- 2,52,400 Chandigarh Total 60,98,07,600/- 60,74,94,500/- 10,37,500/- 4.1 According to order of assessment, during the assessment proceedings Vikas Mehta, Amit Gupta and Naveen Mehta had submitted that the cash found at their residence belongs to Assessee Company and they had submitted the cash lying was same cash which was generated out of the RTGS done to the entities controlled and managed by Sanjay Jain. Learned Assessing Officer further referred to order of assessment for preceding assessment year 2020-21, that assessee has surrendered bogus purchases amounting to Rs. 93,55,94,461/- in assessment year 2019-20 and Rs. 6,13,73,201/- in assessment year 2020-2021, however during the assessment year 2020-21 the assessee has done RTGS amounting to Rs. 51,51,75,913/- against which cash was received by the assessee. Out of that cash, the cash amounting to Rs. 9,55,00,000/- was utilized for paying the cash components of the property bearing no. CS0025, DLF City Centre, Gurgaon, Haryana which was purchased from Krishan Kumar Chaudhary and Savita Chaudhary and registered in the name of assessee company on 27-12-2019, So the balance cash of Rs. 41,96,75,913/- generated in AY 2020-21 may be assumed to be cash which was seized. Likewise during assessment year 2021-22 cash amounting to Rs. 2,26,04,177/- was generated against the RTGS done from the entities controlled and managed by Sanjay Jain. Apart thereof Learned Assessing Officer has also considered the cash in hand held by the assessee company in its proper books of accounts on the date of search at various branches aggregating to Rs.4,05,08,451/-. Thus Learned AO concluded that the evidences with respect to piece-meal generation and application have been found, there was few of the evidence which shows that some part of the cash may be the same cash and has given relief to that extent in following manner:
Sr. Particulars Amount (In Rs.) No. 1 Cash found from various Residential premises, Locker of the 60,98,07,600/- directors and office Premises of GLCPL 2 Less: Cash Balance generated in AY 2020-21 Against RTGS 44,22,80,090/- Done and Cash generated in AY 2021-22 Against RTGS Done(Rs. 41,96,75,913/- + Rs. 2,26,04,177/-) 3 Less: Cash in Hand as per Audited books of accounts of 4,05,08,451/- various branches 4 Unaccounted cash of the assessee company 12,70,19,059/- 4.2. It is pertinent to add here that the learned Assessing Officer in the order of assessment noted that there are NOTE BUNDLE LABLES found which was on the cash seized from the residence of Vikas Mehta. The detailed summary of the same is given below:
Date Bank Name 08.06.2018 HDFC Bank 08.06.2018 HDFC Bank 11.06.2018 HDFC Bank 11.06.2018 HDFC Bank 11.06.2018 HDFC Bank 14.06.2018 HDFC Bank 14.06.2018 HDFC Bank 15.06.2018 HDFC Bank 17.06.2018 HDFC Bank 12.07.2018 HDFC Bank 15.09.2018 HDFC Bank 09.11.2018 HDFC Bank 09.11.2018 HDFC Bank 22.01.2019 HDFC Bank 22.01.2019 HDFC Bank 24.01.2019 HDFC Bank 28.01.2019 HDFC Bank
28.01.2019 HDFC Bank 15.02.2019 Axis Bank 15.02.2019 Axis Bank 15.02.2019 Axis Bank 15.02.2019 Axis Bank 15.02.2019 Axis Bank 15.02.2019 Axis Bank 15.02.2019 Axis Bank 22.02.2019 HDFC Bank 27.02.2019 HDFC Bank 27.02.2019 HDFC Bank 27.02.2019 HDFC Bank 05.03.2019 HDFC Bank 05.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 08.03.2019 HDFC Bank 13.03.2019 HDFC Bank 13.03.2019 HDFC Bank 25.03.2019 HDFC Bank 26.03.2019 Kotak Bank 27.03.2019 HDFC Bank 28.03.2019 HDFC Bank 28.03.2019 HDFC Bank 28.03.2019 HDFC Bank 28.03.2019 HDFC Bank 4.3 Likewise, the screen shots of these NOTE BUNDLE LABLE/NOTE SLIPS is given below: It is pertinent to mention that on these slips the date of bundling of cash is mentioned:
4.4 Thus admittedly cash seized was also pertains to financial year 2018-19 relevant to assessment year 2019-20; however learned Assessing Officer has accepted the cash generated from assessment year 2020-21 and 2021-22 and has made addition of Rs. 12,70,19,059/- being unaccounted cash of the assessee company u/s 69A of the Act.
5. Being aggrieved, assessee preferred the appeal before the Learned CIT(A). He stated that it is not in dispute that the assessee indulged into bogus invoicing through Shri Sanjay Jain from various entities managed and controlled by him to inflate purchases, avail fake GST credits and to generate cash. The modus operandi which was adopted by the assessee for bogus billing (inflation of purchases), payment to various entities of Shri Sanjay Jain through RTGS and the receipt of cash from Shri Sanjay Jain has been elaborately discussed by the AO and the same has been admitted by the appellant. The appellant admitted that all the purchases made by it from the entities managed and controlled by Shri Sanjay Jain were bogus and it had claimed fake input tax credit from such purchases. The appellant also admitted that cash received in lieu of RTGS payments made to the said fake entities after deduction of commission @3% from the entry providers. It is also not in dispute that the appellant reversed purchases made by it through these entities and declared additional income in the return filed u/s 153A for the AYs 2019- 20 and 2020-21 as under:
AY Amount (Rs.) 2019-20 93,55,94,161/-
2020-21 6,13,73,201/- Total 99,69,67,362/- 5.1 Further from order of assessment for assessment year 2019-20 placed before Learned CIT(A) and also before us, CIT(A) observed that the, AO in the assessment order for AY 2019-20 that the assessee has made RTGS payments of Rs. 47,63,99,180/- and generated cash. Even in said order of assessment the AO has mentioned that the assessee company has taken bills of bogus purchases from Sanjay Jain entities amounting to Rs. 93,55,94,161/- and surrendered the same in the return of income filed by it for the AY 2019-20 as under (refer para 79 of the order):
Sl. Party Name F.Y. 18-19 No. 1 Shri Lakshmi Associates (Billing) 20,29,21,397/- 2 Mahaveer Associates (Billing) 23,34,75,280/- 3 Jain Cement Udyog (Billing) 24,63,11,930/- 4 Forever Exim India (P) Ltd. 25,25,87,355/- Grand Total 93,55,95,963/- The Assessing Officer further discussed in detail at para 7.2of the order of assessment for AY 2019-20 that the assessee has made RTGS payment amounting to Rs. 47,63,99,180/- from its bank account maintained at Punjab National Bank as under:
Amount Party Name Month 20,00,000 JAIN CEMENT UDYOG Apr-18 20,00,000 JAIN CEMENT UDYOG May-18 30,00,000 MAHAVEER ASSOCIATES May-18 20,00,000 JAIN CEMENT UDYOG May-18 40,00,000 FOREVER EXIM INDIA PVT. LTD. May-18 25,00,000 FOREVER EXIM INDIA PT. LTD. May-13 15,00,000 FOREVER EXIM INDIA PVT. LTD. May-18 25,00,000 FOREVER EXIM INDIA PT. LTD. Jun-18 22,00,000 FOREVER EXIM INDIA PVT. LTD. Jul-18 43,00,000 FOREVER EXIM INDIA PVT. LTD. Aug-18 40,00,000 JAIN CEMENT UDYOG Aug-18 38,65,600 MAHAVEER ASSOCIATES Aug-18 12,00,000 FOREVER EXIM INDIA PVT. LTD. Aug-18 19,00,000 FOREVER EXIM INDIA PVT. LTD. Aug-18 25,00,000 JAIN CEMENT UDYOG Aug-18 10,00,000 MAHAVEER ASSOCIATES Aug-18 50,00,000 JAIN CEMENT UDYOG Aug-18 13,00,000 FOREVER EXI INDIA, PUT. LTD. Sep-18 40,00,000 FOREVER EXIM INDIA PVT. LTD. Oct-18 30,00,000 MAHAVEER ASSOCIATES Oct-18 30,00,000 SHRI LAKSHMI ASSOCIATES Oct-18 25,00,000 FOREVER EXIM INDIA PUT. LTD. Oct-18 35,00,000 JAIN CEMENT UDYOG Oct-18 20,00,000 MAHAVEER ASSOCIATES Oct-18 20,00,000 SHRI LAKSHMI ASSOCIATES Oct-18 25,00,000 FOREVER EXIM INDIA PVT. LTD. Oct-18 25,00,000 JAIN CEMENT UDYOG Oct-18 30,00,000 MAHAVEER ASSOCIATES Oct-18 20,00,000 SHRI LAKSHMI ASSOCIATES Oct-18 25,00,000 FOREVER EXIM INDIA PVT. LTD. Oct-18 25,00,000 JAIN CEMENT UDYOG Oct-18 25,00,000 MAHAVEER ASSOCIATES Oct-18 25,00,000 SHRI LAKSHMI ASSOCIATES Oct-18 25,00,000 JAIN CEMENT UDYOG Oct-18 25,00,000 SHRI LAKSHMI ASSOCIATES Oct-18 30,00,000 FOREVER EXIM INDIA PVT. LTD Oct-18 20,00,000 MAHAVEER ASSOCIATES Oct-18 25,00,000 SHRI LAKSHMI ASSOCIATES Oct-18 19,00,000 JAIN CEMENT UDYOG Oct-18 20,00,000 MAHAVEER ASSOCIATES Oct-18 30,00,000 FOREVER EXIM INDIA PVT. LTD Oct-18 15,00,000 JAIN CEMENT UDYOG Oct-18 15,00,000 FOREVER EXIM INDIA PVT. LTD. Oct-18 12,00,000 MAHAVEER ASSOCIATES. Oct-18 15,00,000 FOREVER EXIM INDIA PVT.LTD. Oct-18 22,00,000 JAIN CEMENT UDYOG OCt-18 13,50,000 JAIN CEMENT UDYOG 0ct-18 15,00,000 MAHAVEER ASSOCIATES Oct-18 13,00,000 FOREVER EXIM INDIA PVT. LTD. Oct-18 16,00,000 JAIN CEMENT UDYOG Oct-18 20,00,000 MAHAVEER ASSOCIATES Oct-18 15,30,000 JAIN CEMENT UDYOG Oct-18 16,00,206 MAHAVEER ASSOCIATES Oct-18 23,90,000 FOREVER EXIM INDIA PVT. LTD. Oct-18 26,10,000 JAIN CEMENT UDYOG Oct-18 17,00,000 FOREVER EXIMINDIA PVT. LTD. Oct-18 17,00,000 JAIN CEMENT UDYOG Oct-18 16,50,000 FOREVER EXIM INDIA PVT. LTD. Nov-18 14,00,000 MAHAVEER ASSOCIATES Nov-18 19,50,000 JAIN CEMENT UDYOG Nov-18 20,00,000 MAHAVEER ASSOCIATES Nov-18 10,00,000 FOREVER EXIM INDIA PVT. LTD. Nov-18 20,00,000 MAHAVEER ASSOCIATES Nov-18 15,00,000 FOREVER EXIM INDIA PVT. LTD. Nov-18 19,00,000 JAIN CEMENT UDYOG Nov-18 20,00,000 MAHAVEER ASSOCIATES Nov-18 15,00,000 FOREVER EXIM INDIA PVT. LTD. Nov-18 20,00,000 JAIN CEMENT UDYOG Nov-18 15,00,000 MAHAVEER ASSOCIATES Nov-18 20,00,000 JAIN CEMENT UDYOG Nav-18 15,00,000 MAHAVEER ASSOCIATES Nov-18 11,00,000 FOREVER EXIMINDIA PVT. LTD. Nov-18 18,00,000 JAIN CEMENT UDYOG Nov-18 15,00,000 JAIN CEMENT UDYOG Nov-18 25,00,000 MAHAVEER ASSOCIATES Nov-18 12,88,374 FOREVER EXIM INDIA PUT. LTD. Nov-18 14,00,000 JAIN CEMENT UDYOG Nov-18 15,00,000 FOREVER EXIM INDIA PYT. LTD. Nov-18 25,00,000 JAIN CEMENT UDYOG Nov-18 10,00,000 JAIN CEMENT UDYOG Nov-18 25,00,000 MAHAVEER ASSOCIATES Nov-18 27,00,000 JAIN CEMENT UDYOG Nov-18 20,00,000 JAIN CEMENT UDYOG Nov-18 20,00,000 MAHAVEER ASSOCIATES Nov-18 15,00,000 JAIN CEMENT UDYOG Dec-18 19,00,000 MAHAVEER ASSOCIATES Dec-18 16,00,000 FOREVÉR EXIM INDIA PVT. LTD. Dec-18 21,00,000 MAHAVEER ASSOCIATES Dec-18 21,00,000 FOREVER EXIM INDIA PVT. LTD. Dec-18 19,00,000 MAHAVEER ASSOCIATES Dec-18 20,00,000 FOREVER EXIM INDIA PVT. LTD. Dec-18 20,00,000 JAIN CEMENT UDYOG Dec-18 20,00,000 JAIN CEMENT UDYOG Dec-18 25,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 10,00,000 FOREVER EXIM INDIA PVT. LTD. Dec-18 25,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 20,00,000 JAIN CEMENT UDYOG Dec-18 20,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 15,00,000 FOREVER EXIM INDIA PVT. LTD. Dec-18 25,00,000 MAHAVEER ASSOCIATES Dec-18 35,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 25,00,000 JAIN CEMENT UDYOG Dec-18 20,00,000 MAHAVEER ASSOCIATES Dec-18 20,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 10,00,000 JAIN CEMENT UDYOG Dec-18 20,00,000 MAHAVEER ASSOCIATES Dec-18 12,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 15,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 15,00,000 JAIN CEMENT UDYOG Dec-18 20,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 10,00,000 JAIN CEMENT UDYOG Dec-18 15,00,000 SHRI LAKSHMI ASSOCIATES Dec-18 14,00,000 FOREVER EXIM INDIA PVT. LID. Dec-18 11,00,000 MAHAVEER ASSOCIATES Dec-18 10,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 10,00,000 JAIN CEMENT UDYOG Jan-19 10,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 23,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 15,00,000 MAHAVEER ASSOCIATES Jan-19 17,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 15,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 15,00,000 MAHAVEER ASSOCIATES Jan-19 14,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 16,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 20,00 900 MAHAVEER ASSOCIATES Jan-19 25,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 27,00,000 MAHAVEER ASSOCIATES Jan-19 35,00,000 JAIN CEMENT UDYOG Jan -19 10,00,000 MAHAVEER ASSOCIATES Jan-19 20,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 10,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 20,00,000 JAIN CEMENT UDYOG Jan-19 20,00,000 MAHAVEER ASSOCIATES Jan-19 30,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 15,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 8,00,000 MAHAVEER ASSOCIATES Jan-19 15,00,000 JAIN CEMENT UDYOG Jan-19 15,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 20,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 29,75,000 MAHAVEER ASSOCIATES Jan-19 20,00,000 SHRI LAKSHMI ASSOCIATES Jan-19 20,00,000 FOREVER EXIM INDIA PVT. LTD. Jan-19 22,00,000 JAIN CEMENT UDYOG Jan-19 18,00,000 MAHAVEER ASSOCIATES Jan-19 25,00,000 SHRILAKSHMI ASSOCIATES Jan-19 25,00,000 FOREVER EXIM INDIA PVT. LTD. Feb-19 15,00,000 JAIN CEMENT UDYOG Feb 12 15,00,000 MAHAVEER ASSOCIATES Feb-19 30 00,000 SHRI LAKSHMI ASSOCIATES Feb-19 21,00,000 FOREVER EXIM INDIA PVT. LTD: Feb-19 24,00,000 JAIN CEMENT UDYOG Feb-19 20,00,000 MAHAVEER ASSOCIATES Feb-19 29,00,000 SHRI LAKSHMI ASSOCIATES Feb-19 20,00,000 FOREVER EXIM INDIA PVT. LTD. Feb-19 25,00,000 JAIN CEMENT UDYOG Feb-19 25,00,000 MAHAVEER ASSOCIATES Feb-19 30,00,000 SHRI LAKSHIMI ASSOCIATES Feb-19 25,00,000 FOREVER EXIM INDIA PUT. LTD. Feb-19 23,00,000 JAIN CEMENT UDYOG Feb-19 27,00,000 MAHAVEER ASSOCIATES Feb-19 10,00,000 JAIN CEMENT UDYOG Feb-19 15,00,000 SHRI LAKSHMIASSOCIATES Feb-19 20,00,000 FOREVER EXIM INDIA PVT. LTD: Feb-19 15,00,000 SHRI LAKSHMLASSOCIATES Feb-19 17,00,000 FOREVER EXIM INDIA PVT LTD. Feb-19 18,00,000 JAIN CEMENT UDYOG Feb-19 25,00,000 FOREVER EXIM INDIA PVT. LTD. Feb-19 15,00,000 MAHAVEER ASSOCIATES Feb-19 18,00,000 JAIN CEMENT UDYOG Feb-19 12,00,000 SHRI LAKSHMI ASSOCIATES Feb-19 25,00,000 JAIN CEMENT UDYOG Feb-19 21,00,000 MAHAVEER ASSOCIATES Feb-19 15,00,000 FOREVER EXIM INDIA PUT. LTD. Feb-19 18,00,000 JAIN CEMIENT UDYOG Feb-19 30,00,000 MAHAVEER ASSOCIATES Feb-19 20,00,000 SHRI LAKSHMI ASSOCIATES Feb-19 35,00,000 FOREVER EXIM INDIA PUT. LTD. Feb-19 15,00,000 MAHAVEER ASSOCIATES Feb-19 23,00,000 JAIN CEMENT UDYOG Feb-19 22,00,000 SHRI LAKSHMI ASSOCIATES Feb-19 20,00,000 FOREVER EXIM INDIA PVT. LTD. Mar-19 25,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 14,00,000 FOREVER EXIM INDIA PUT. LTD. Mar-19 19,00,000 JAIN CEMENT UDYOG Mar-19 12,00,000 JAIN CEMENT UDYOG Mar-19 15,00,000 MAHAVEER ASSOCIATES Mar-19 17,90,000 FOREVER EXIM INDIA PVT. LTD. Mar-19 15,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 12,00,000 JAIN CEMENT UDYOG Mar-19 10,00,000 MAHAVEER ASSOCIATES Mar-19 21,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 10,00,000 FOREVER EXIM INDIA PVT. LTD. Mar-19 15,00,000 JAIN CEMENT UDYOG Mar-19 10,00,000 MAHAVEER ASSOCIATES Mar-19 15,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 30,00,000 FOREVER EXIM INDIA PVT. LTD. Mar-19 35,00,000 JAIN CEMENT UDYOG Mar-19 37,00,000 MAHAVEER ASSOCIATES Mar-19 40,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 55,00,000 FOREVER EXIM INDIA PT. LTD: Mar-19 45,00,000 JAIN CEMENT UDYOG Mar-19 60,00,000 MAHAVEER ASSOCIATES Mar-19 40,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 72,00,000 FOREVER EXIM INDIA PUT LTD. Mar-19 78,00,000 JAIN CEMENT UDYOG Mar-19 74,00,000 MAHAVEER ASSOCIATES Mar-19 76,00,000 SHRI LAKSHMI ASSOCIATES Mar-19 46,00,000 FOREVER EXIM INDIVI-LTD: Mar-19 48,00,000 JAIN CEMENT UDYOG Mar 19 54,00,000 MAHAVEER ASSOCIATES Mar-19 52,00,000 SHRI LAKSHMI ASSOCIATES Мar-19 5.2 Apart thereof Learned CIT(A) noted from impugned order of assessment that dates of labels on cash bundles found at the assessee’s premises pertains to financial year 2018-19 relevant to assessment year 2019-20. In view of these facts Learned CIT(A) has deleted the addition by holding as under:
“8.9 On perusal above two tables and the labels on cash bundles as cited by the AO in the assessment orders, it is observed that the appellant has made RTGS payments to the entry providing entities in FY 2018-19 amounting to Rs. 47,63,99,180/ - and generated cash. The cash found at the premise also have date labels pertaining to F.Y 2018-19 indicating that the cash was withdrawn from the bank in the FY 2018- 19. The appellant has pointed out that out of 76 bundles which have been quoted by the Assessing Officer in the order, 49 bundles, pertained to FY 2018-19 only. It is further noted that dates in 19 bundles pertain to March, 2019. In these circumstances, it cannot be said that the cash found at the premises corresponded to RTGS made in AY 2020-21 and 2021-22 only and none of the cash pertained to AY 2019-20. The decision of AO limiting the benefits of cash only to RTGS made on or after 01.04.2019 appears to be without any logic and against the evidences referred by himself in the assessment order. I find no pliable reasons to uphold the cutoff date of 01.04.2019 adopted by the AO, when evidences brought on record by the AO show that the cash generated period prior to 01.04.2019 was also available at the premise. Accordingly, I find that the source of excess cash of Rs. 12,70,19,059/- worked out by the AO stands explained by the cash generated by the appellant from RTGS payments made in AY 2019. Therefore addition made by the AO is held to be unsustainable and is deleted.”
6 Having regard to the aforesaid facts, we are of the opinion that it is not in dispute that the assessee was engaged in activities of incurring bogus expenses through entities controlled by one Sh. Sanjay Jain, whereby assessee firstly made RTGS to said entities in lieu of bogus bills and thereafter received cash back after deduction of commission by those entities. Learned AO, for source of cash found during the course of search amounting to Rs. 60,98,07,600, has accepted the generation of cash through bogus billing for assessment year 2020-21 and 2021-22 however has not granted the benefit of cash generated during the assessment year 2019-20. Learned CIT(A) on perusal of order of assessment for assessment year 2019-20, having regard to identical activities generating cash, surrender by reversing the cash purchases for sum of Rs. 93,55,94,161/- for which RTGS of Rs. 47,63,99,180/- was made to entities controlled by Shri Sanjay Jain, has accepted the contention of the appellant that remaining cash aggregating to Rs. 12,70,19,059/- pertains to assessment year 2019-20 and has deleted the addition made by Learned AO. To fortified his decision, Learned CIT(A) further relied upon finding from impugned order of assessment that even dates of labels on some cash bundles found at the assessee’s premises to financial year 2018-19 relevant to assessment year 2019-20. In view of these facts and circumstances we find the order of learned CIT(A) is just and proper, so as not to warrant inference, more particularly once bogus purchases has already been reversed by assessee itself in return of income and has been accepted by the Learned Assessing Officer. Thus, this appeal filed by the revenue is found to be devoid of any merit and thus, dismissed.
The appeal of the revenue is dismissed.
Order pronounced in the open court on 07.11.2025