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TMI Blog2025 (5) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... ,771/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that during the investigation carried-out, it was noticed from the HDFC Bank account of the assessee that, there are deposits to the tune of Rs. 3.63 crores by way of cheque/RTGS and Rs. 1.40 crores by cash during the financial years 2015- 2016 and 2016-2017. The assessee was called-upon to explain the source for the above cash deposits and in response, the assessee submitted that the source for cash deposits are out of it's business income. The Assessing Officer further noted that the impugned material shows that the company M/s. Analogics Tech India has acknowledged receipt of Rs. 43 lakhs in cash from the appellant company on 07.10.2015. The Assessing Officer called-upon the appellant company to explain the transactions and also source. In response, the appellant company submitted that as per the books of accounts, we do not have any such transaction as cash paid to M/s. Analogics Tech India and with respect to the above receipt, the current management is unaware of any cash receipt from M/s. Analogics Tech India. 3. The Assessing Officer after considering r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount recorded in the receipt and accordingly treated as unexplained money and added back to the total income of the appellant company. 4. Being aggrieved by the assessment order, the appellant company preferred an appeal before the learned CIT(A). Before the learned CIT(A), the appellant company has reiterated it's submissions made before the Assessing Officer in respect of source for cash deposit and argued that the bank account held with HDFC Bank is part of regular books of accounts of the assessee and whatever cash deposit into the said bank a/c has been already considered in the books of accounts. Further, the appellant company has received cash towards sale of scrap to local unorganised dealers and the same has been reported under 'Direct Income' and also paid relevant taxes. Therefore, the Assessing Officer is erred in making addition towards cash deposit as unexplained cash credit u/sec.68 of the Act. The assessee further contended that, in respect of addition of Rs. 43 lakhs towards alleged cash payment to M/s. Analogics Tech India, the assessee submitted that, the Assessing Officer does not have any evidence to prove that, assessee has made cash payment. Further, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled position of law that, if any addition is proposed on the basis of third party evidence, the same should be given to the assessee for it's comments and rebuttal. Since the Assessing Officer has made addition without providing reasonable opportunity to the assessee to rebut the case, the same cannot be upheld. Thus, deleted the addition made by the Assessing Officer towards alleged cash payment on the basis of receipt found during the course of survey as unexplained money. 6. Aggrieved by the order of the learned CIT(A), the Revenue is now in appeal before the Tribunal. 7. The first issue that came-up for consideration from ground nos.2 to 4 of Revenue's appeal is deletion of addition of Rs. 1.43 crores made u/sec.68 r.w.s.115BBE of the Act towards cash deposited into HDFC Bank account. 8. Shri Narender Kumar Naik, learned CIT-DR, supporting the order of the Assessing Officer submitted that, the learned CIT(A) was erred in deleting the addition made by the Assessing Officer without appreciating the fact that the appellant company could not furnish relevant evidences of amount received from sale of scrap including TCS collected from the buyer and the relevant quarterly stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made by the Assessing Officer for Rs. 43 lakhs on the basis of alleged signed receipt given by M/s. Analogics Tech India Ltd., has rightly deleted by the learned CIT(A) on the ground that when addition was made without issuing show cause notice, the same cannot be upheld. Further, the Assessing Officer has not shared the information to the assessee with regard to nature of payment. The assessee has explained to the Assessing Officer that no such transaction is taken place between the appellant company and M/s. Analogics Tech India Ltd. The learned CIT(A) after considering relevant facts has rightly deled the addition made by the Assessing Officer and, therefore, the order of the learned CIT(A) should be upheld. 11. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. As regards the legal argument taken by the Learned Counsel for the Assessee on the issue of notice u/sec.148 of the Act and consequent approval required to be obtained as per sec.151 of the Act, in our considered view, the said argument does not hold good for the simple reason that, assessee neither challenged the issue by filing any cross-objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) on the basis of submissions of the appellant company that, the said income is part of regular books of accounts of the appellant company and also reported under the head "Direct Income", is not based on any evidences. Further, the learned CIT(A) has recorded a finding that the appellant company has reported said transactions in it's books of accounts, but, the fact remains that, appellant company neither furnished any details with regard to income reported under the head "Direct Income" and also relevant bank statement for the year under consideration. In absence of any details as to the details of the amounts received towards sale of scrap and the same is part of regular books of accounts of the appellant company, in our considered view, the arguments of the appellant company that it has received amount towards sale of scrap, cannot be accepted, more particularly, when there is no details about from whom the appellant company has received cash on sale of scrap. Since the sale of scrap attracts provision of sec.206C of the Act, the appellant company ought to have collect TCS on sale scrap sale and also report the transactions to the Income Tax Department in Form-27EQ. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the issue in light of variation proposed on the issue of addition towards cash deposit and also towards cash payment to M/s. Analogics Tech India Ltd., and from the above it is undisputedly clear that, Assessing Officer has discussed the issue in light of relevant materials and also gave an opportunity to the appellant company to explain it's case. Therefore, in our considered view, the reasoning given by the learned CIT(A) to delete the addition made by the Assessing Officer towards alleged cash payment is contrary to material on record and cannot be accepted. 14. Be that as it may, when it comes the issue of cash payment, it was explanation of appellant company that, since there was change in the management of the company, there were no details as regards cash payment of Rs. 43 lakhs to above company viz., M/s. Analogics Tech India Ltd. In our considered view, it is for the appellant company to explain it's case with relevant details to prove to the satisfaction of the Assessing Officer that, the said transaction is neither carried-out by the appellant company nor belongs to the appellant company. Since the appellant company could not explain the transactions and merely stated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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