TMI Blog2021 (12) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-12, the present Tax Appeal is preferred raising the following questions of law for the determination of this Court:- Whether in the facts and circumstances of the case and in law, the Appellate Tribunal is right in deleting the addition of ₹ 4,00,00,000/- made on account of unexplained Credit under section 68 of the Act by ignoring the overwhelming and strong evidences discussed by the Assessing Officer in the assessment order relating to the unexplained transactions? 2. The assessee had filed the return of income on 12.07.2012 declaring its total income of ₹ 6,54,22,430/-. Its case was selected for scrutiny and income of ₹ 6,67,58,012/- was assessed on scrutiny assessment under Section 143(3) of the Income Tax Act (the IT Act hereinafter). 2.1. The case was transferred to the DCIT, CC-1 under Section 127 of the IT Act and it was reopened under Section 147 of the IT Act after dully recording the reasons on getting the sanction of the CIT (Central), Ahmedabad under Section 151 of the Act. 2.2. A notice under Section 148 was issued on 27.03.2017. The information had been received from the office of the CIT in connection with the search and seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were seized from the premise of the Venus Group and not from the premise of the assessee. 2.7. After considering the detailed factual submissions made by both the sides as also in extenso considering the legal submissions of the parties, it has chosen not to endorse the additions made by the Assessing Officer. In the detailed reasoning given by the CIT Appeals, it has held that if the jotting on the seized loose papers are assumed to be a material, the burden would be always on the Assessing Officer as an assessing authority to bring it on record independent clinching evidence. It is also of the opinion that under the law, the Assessing Officer will need to consider his duty to bring on record such material information which is available outside the assessee s control which the assessee asserts is existing and it is within the power of the Assessing Officer to call for. 2.8. He has extensively also considered the allegations of the Assessing Officer of accommodation entry transaction to hold that the Assessing Officer in assessment order has not identified any of the statements of main persons of the Venus Group namely Shri Ashok Vaswani, Shri Deepak Vaswani and Shri Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant company is squarely covered by the decision of the CBI vs. V.C.Shukla and Others [(1998) 3 SCC 410], where loose paper vouchers or pages found and seized from the third party were not considered as the evidence in the case of the appellant company. It further held that following the decision in case of Prarthna Construction Pvt. Ltd., the ITAT had decided the matter which had been upheld by this Court. Accordingly, addition by way of unexplained cash credit under Section 68 of the IT Act was not held justifiable. 3. This had been challenged by the Revenue before the ITAT which has upheld the findings and observations made by the CIT Appeals. It recognized that the challenge to the additions towards the unexplained cash credit under Section 68, on merit, has been dealt with by the CIT elaborately. It has also concurred with the CIT Appeals that the unaccounted cash transactions of the Venus Groups which were detected from the premises of the searched person were stated to be first recorded by the searched person on a loose papers in encrypted form and then on the basis of the recording made on these cash vouchers, the entries were recorded on a Day Cash Book not formi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established. Naturally, propriety demanded the cross examination thereon in the event any culpable statement roping the assessee somewhere. The Assessing Officer has conveniently implicated the assessee without any cogent premise on the basis of some aimless examinations. No doubt, the documents found possessed from the custody of a searched person may possibly operate as an estoppel against that searched person, if the circumstances so warrant, but it is unconceivable to bind a third party for such entries/diary without demonstrating cogent nexus. The whole action is in the realm of conjectures and surmises mainly on the basis of some scanty and sketchy statement yeilded from the accountant of the searched person. The revenue has alleged underhand cash transactions. Hence, the primary onus in the instant case, squarely lied upon the Revenue and that to justify it with direct or circumstantial evidences. The onus rested upon the revenue has not been discharged at all and thus did not shift on to assessee. Consequently, in the absence of any credible proof of receipt of cash from assessee, the apparent has to be taken as real i.e. Sunderdeep Builders have repaid ₹ 4 Cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epaid back the temporary loan in part to the respondent company to the tune of ₹ 7 Crores. The balance of ₹ 4 Crores which remained as outstanding was receivable by the respondent as on 31.03.2009. The Tribunal also has noted that the loan of ₹ 7 Crores was squared of by way of repayment in the financial year 2008-09. 6. Section 68 of the Income Tax Act was brought into picture for making addition of ₹ 4 Crores which deserves to be reproduced at this stage:- 68. Cash credits:- Where any sum is found credited in the books of an assessee maintained for any previous year, and assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [1][Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Provided that where the assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shal ..... 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