2021 (1) TMI 888

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....Y.2001­02. 2. The revenue has proposed a solitary question of law for the consideration of this Court. Whether the Appellate Tribunal had erred in law and on facts in upholding the order of the CIT(A) deleting the addition of Rs. 9,33,00,000/­ made u/s.68 of the Act without appreciating the facts of the case? 3. We have heard Ms. Mauna Bhatt, the learned senior standing counsel appearing for the revenue. We take notice of the following findings recorded by the CIT(A) in its order dated 30/03/2004 partly allowing the appeal filed by the assessee. The findings read as under:­ I have carefully considered all the facts on record and various submissions. It is noted that there is no dispute that both purchase and sa....

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....e Skylid Telecommunications Limited appellant and Gap Corporate Services Pvt. Ltd./Maxim Info System Ltd. through bank accounts maintained with Vijaya Bank. For this purpose the funds were first brought in by Skylid Telecommunications Ltd. then such funds were transferred to appellant's bank account, then to the bank account of Corporate Services Pvt.Ltd/Maxim Info Systems and then from the bank account to Skylid Telecommunications Ltd. Such rotation of fund is clearly evidence from the table on page 28 to 32 of the paper book. It is noted that the appellant has furnished information with regard to circulation of funds in the bank account between the parties brought in the books as suppliers and buyers of software which were not in exis....

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....7500/­ by Trance Techno Foods Ltd. for the appellant and therefore, these sums cannot be taxed under section 68 as unexplained credit as contra accounts, PAN and confirmations have been furnished. However, it is noted that the appellant had not been able to establish the payment of Rs. 1,11,50,000/­ and Rs. 33,50,000/­ which are claimed to have been made to A&A Software and Carrier Information Technology as part of circulation of funds in the guise of software business as neither confirmation have been furnished nor the bank account of both the forms have been given so that the claim of the appellant regarding onward movement of funds to Trance Techno Group could be established. It is therefore, clear that the appellant has reta....

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....mately a cheque of Rs. 1.25 crores was received from Trance Techno Foods Ltd. in HDFC Bank, Vejalpur Branch on 19.2.2011 and out of that amount, a sum of Rs. 1,11,50,000/­ was paid to A&A Software, and Rs. 13.5 lakhs paid to Carrier Information Technology. Thus, the ld. CIT(A) found a reconciliation of fund flow, and thereafter observed that addition under section 68 was not required to be made in the hands of the assessee. In other words the ld. CIT(A) has recorded a finding of fact that nothing has been retained by the assessee, which has been considered as unexplained cash credit. The assessee has explained fund flow i.e. demonstrating transactions were back to back, and were in the nature of accommodation entries. Similarly, the ld.....