AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 356
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctions of various entities with Sh. Sanjay Tibrewal was uploaded on Insight Portal of the Department, from which the Assessing Officer had noticed that the assessee had made transactions totalling Rs. 40,01,107/- with entities of the said Sh. Sanjay Tibrewal. Accordingly, the case of the assessee was reopened by issue of notice under Section 148 of the Act on 19.04.2022. In the course of assessment, the Assessing Officer was not satisfied with the explanation of the assessee regarding the transaction of Rs. 40,01,107/- made by the assessee with the entities of Sh. Sanjay Tibrewal. Accordingly, the Assessing Officer had treated the sum of Rs. 40,01,107/- as unexplained cash credit and made the addition. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was partly allowed. 4. Now the Revenue is in appeal before us. The following grounds have been taken in this appeal: "1) Whether on the facts and on the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition of Rs. 40,01,1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....duly examined in the course of assessment but was not found acceptable. It transpired that the payment of Rs. 40,01,107/- was received from M/s. Ganpati Textiles and M/s. Hanuman Fabrics controlled by Sh. Sanjay Tibrewal, to whom no sales was made by the assessee. The Ld. Sr. DR further submitted that there were certain discrepancies in the ledger accounts and the bank statements provided by the assessee, which was not reconciled. Therefore, the Ld. CIT(A) was not correct in deleting the addition. Accordingly, the Ld. Sr. DR supported the order of the Assessing Officer. 6. Per contra, Shri Vartik Chokshi, Ld. AR of the assessee explained that the assessee was doing wholesale business and the payments received from entities of Sh. Sanjay Tibrewal represented the amounts of sale proceeds made to third parties, the details of which was duly furnished and explained before the Assessing Officer. He submitted that once the sales are declared as income, the receipt for the same could not have been treated as unexplained income of the assessee. He further submitted that the Revenue was unable to bring on record any evidence that the assessee had taken any accommodational entry from the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....da Textile Receipt 1390 2,07,256 23-03-2018 Suresh Tex Fab Receipt 1391 12,444 23-03-2018 Taimur Textile Receipt 1392 13,461 23-03-2018 Tarun Traders Receipt 1393 2,89,269 23-03-2018 Yashvi Textile Receipt 1395 1,50,924 40,01,107 The appellant has submitted that while the sales were made to these listed parties, the payments were received through two entities - Hanuman Fabrics and Ganapat Textiles. The appellant attributes this to "mutual transactions" between their customers and the aforementioned entities, leading to the funds being routed through such parties and claimed not to be the beneficiary to the alleged accommodation entry. It is stated that once sales are declared as income and accepted by the AO, adding the same amount again under a different section would constitute double taxation and relied upon various judicial pronouncements and submitted that such principle applies to the present case as the sales proceeds are already declared in the income tax return. The AO has observed that during the course of search action at Shri Sanjay Tibrewal, it was f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....000/- on 04.08.2017 is reflecting in the bank statement which evidences the claim of the appellant. The relevant screenshot of bank statement reflecting the receipt of Rs. 6,00,000/- on 04.08.2017 is reproduced hereunder: In view of the above, it is observed that the observation of the AO that the entry of Rs. 2,24,840/- is not reflecting in the bank statement of the appellant. However, on perusal of the above screenshot, it is observed that the same is reflected in the bank statement of the appellant hence the observation of AO that the entries in ledger account are not matching with the bank statement is found to be incorrect. 6.4 Further, it is observed that the AO has not brought any clinching evidences to prove that appellant has given cash against cheques received from above referred parties though addition has been made based upon search carried out at the premises of third party who is one of the entry provider. It is found that appellant has made regular sales to various parties listed herein above and AO has doubted sale value of Rs. 40,01,100/- only on the ground that payment towards such sales was received from entities managed by Shri Sanjay Tiberawal....