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TMI Blog2021 (10) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... vant Asst Year in line with the direction of the Income Tax Settlement Commission in assessee s group company cases. See M/S. BHALCHANDRA TRADING P. LTD. VERSUS DY. CIT, CENTRAL CIRCLE-6 (2) MUMBAI [ 2021 (2) TMI 1095 - ITAT MUMBAI] - Grounds raised by the assessee are partly allowed. Unexplained cash u/s 69 - as reflected in the seized material that cheque was received back in lieu of which cash was paid by the assessee company - Asst Year 2014-15 -HELD THAT:- As version of the assessee deserves to be believed that it had not received any sum of ₹ 7,84,932/- by cheque. In any case, the case of the revenue is only that the assessee had received cheque for ₹ 7,84,932/- and for which the assessee had in turn paid cash from its unexplained sources. It is not in dispute that there is abundance of cash balance in the assessee group reflected in the parallel books of accounts which were subject matter of seizure in the course of search and huge addition on peak credit basis of ₹ 26 crores was indeed offered by the group. Hence in any case, the meagre alleged cash payment of ₹ 7,84,932/- stands explained by the said income itself. Hence there is no need to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a group company, was issued notice u/s 153C of the Act for the A.Y. 2012-13 on 24/03/2017 after recording satisfaction note and duly served upon the assessee. The assessee then filed a return in response to notice u/s 153C of the Act on 10/04/2017 for the A.Y. 2012-13 declaring Nil income. We find that the ld AO had mentioned in the assessment order that parallel books of accounts maintained by the assessee evidenced booking of expenses in the form of cheque payment and receiving back cash for the same. The ld AO even tabulated year wise inflation of expenses where cheque payments were made and cash was received back as under:- Sr. No. AY Amount 1 2010-11 86,33,500 2 2011-12 51,50,000 3 2012-13 64,35,000 4 2013-14 57,42,679 3.1. The inflation of expenses for the A.Y. 2012-13 was accepted by the assessee group in principle subject to the actual claim of expenses in the sum of ₹ 28,76,106/-. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Income Tax Settlement Commission are identical. There is no dispute on this aspect. It is not in dispute that assessee had resorted to inflation of expenses by making certain cheque payments and receiving back cash in return. It is not in dispute that the said cash had already also been utilised for the purpose of meeting business related expenses by the assessee. In t his background, what is to be taxed is only the left over portion of the cash remaining with the assessee on this subject mentioned transaction, being the profit element, which has been already accepted by the Income Tax Settlement Commission at 12% vide its order dated 28/06/2018 in assessee s group company cases. We hold that the lower authorities ought to have followed the same in view of identical facts in the assessee herein also. Accordingly, we direct the ld AO to make an addition @ 12% of inflation of expenses of ₹ 28,76,106/- for the relevant Asst Year in line with the direction of the Income Tax Settlement Commission in assessee s group company cases. 3.4. We also find that similar view was taken by the co-ordinate bench of this tribunal in assessee s group company cases emanating out of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /06/2015 and certain loose papers and digital forms were found and seized. Pursuant to the said search, the assessee was issued notice u/s 153A of the Act for the A.Y. 2014-15 and duly served upon the assessee. The assessee then filed a return in response to notice u/s 153A of the Act on 28/09/2016 for the A.Y. 2014-15 declaring income of ₹ 59,62,783/- being the income declared in the original return of income filed on 25/11/2014. We find that the ld AO had mentioned in the assessment order that parallel books of accounts maintained by the assessee evidenced booking of expenses in the form of cheque payment and receiving back cash for the same. This inflation of expenses was determined by the ld AO at ₹ 7,84,932/-. We find that the ld AO had observed in page 4 of his order that this figure is reflected in the seized material that cheque of ₹ 7,84,932/ -was received back in lieu of which cash of ₹ 7,84,932/- was paid by the assessee company (emphasis supplied by us). We find that the assessee company had categorically denied the transaction of inflation of expenses before the ld AO for the year under consideration. The ld AO however did not heed to the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CITA with specific reference to any seized material pointing out the receipt of ₹ 7,84,932/- by cheque by the assessee. Both the ld AO as well as the ld CITA had not given any seized document reference to prove the fact that this assessee before us had received a cheque for ₹ 7,84,932/-. In these facts and circumstances, the version of the assessee deserves to be believed that it had not received any sum of ₹ 7,84,932/- by cheque. In any case, the case of the revenue is only that the assessee had received cheque for ₹ 7,84,932/- and for which the assessee had in turn paid cash from its unexplained sources. It is not in dispute that there is abundance of cash balance in the assessee group reflected in the parallel books of accounts which were subject matter of seizure in the course of search and huge addition on peak credit basis of ₹ 26 crores was indeed offered by the group. Hence in any case, the meagre alleged cash payment of ₹ 7,84,932/- stands explained by the said income itself. Hence there is no need to make any addition on account of unexplained cash u/s 69 of the Act in the instant case. Accordingly, the grounds raised by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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