TaxTMI 
TaxTMI 
2025 (10) TMI 223
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.... FAA' for short) in Appeals No.415/19-20/574/14-15 and 414/19-20/58/17-18 arising out of the appeals before it against the order dated 25.02.2015 and 30.03.2017 passed u/s 144 and 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred as 'the Act'), respectively, by the ACIT, Central Circle-18, New Delhi (hereinafter referred to as the Ld. AO). 2. The assessee's return of income was taken up for scrutiny and notices were issued to the assessee seeking explanation of unsecured loans for which the assessee had submitted that no unsecured loans were taken during the year under consideration. The ld.CIT(A) observes in para 2.1 as follows:- "2.1. After considering the submission of the assessee, the AO observed that the assessee....
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....received during the year treating the same as unexplained invoking Section 68 of the Income Tax Act, 1961 ('the Act'). The above action being erroneous unlawful and untenable it is prayed that the same must be quashed with directions for appropriate relief." 4. On hearing both the sides, we find that primarily the case of the assessee is that no cash credit entry is there in the books of the assessee so as to invoke the provisions of section 68 of the Act and there were only journal entries. 4.1 The ld. DR has opposed the same submitting that summons issued to the lenders were not complied with and there was Inspector Report submitting that parties did not exist. It was also submitted that tax authorities have examined the fa....
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....ny expenses for this amount and has also not taken any unsecured loans from this creditor. Further, on perusal of copy of ledger account of assessee-company in the books of M/s IKF Technologies Ltd., it has been clearly seen that the amount was credited to one M/s V & K Softech Ltd. (that too through journal entry) and not to the assessee company." 7. In the context of the credit entry in the name of IKF Technologies Ltd., the Ld. CIT(A) observed as under:- "The AO in his remand report has very clearly stated that IKF Technologies Ltd. in response to notice u/s 133(6) had denied any Banking Transaction, but furnished ledger account showing entry of Rs. 6,29,70,000/- through journal in favour of V & K Softech Ltd. Undisputedly id....
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....ubject case the credit is incontrovertibly arising, not out of cash or of its equivalent, but wholly through a journal entry. Both parts of the journal entry i.e. Dr and Cr conjointly appear in the books of the Assessee-Company. The credit in the account of IKF Technologies Ltd. is clearly traceable to a corresponding debit to the account of V & K Softech Ltd. Being so, the credit entry in IKF Technologies Ltd. arises, not out of the exchange of any cash or its equivalent, but merely out of an adjustment entry of a matching nature passed in its books of accounts by the Assessee-Company. The deeming provision invariably involves a credit out of a transaction of cash or its equivalent culminating in a liability for a credit. Absent such credi....