TaxTMI 
TaxTMI 
2026 (4) TMI 727
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.... 2. For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition of Rs. 49,30,00,000/- made by the A.O. on account of cash deposits by invoking the provisions of sec. 68 of the Act. 3. For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition to the extent of Rs. 1,37,29,000/- out of the total addition of Rs. 2,78,00,000/- made by the A.O. on account of alleged receipt of cash by invoking the provisions of sec. 68 of the Act. 4. For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition of Rs. 3,34, 11,525/- made by the A.O. on account of loan received from Saket Niketan (P) Ltd. by wrongly treating the same as unexplained u/s 68. 5. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing. 4. Brief facts of the case are that the assessee company is engaged in the real estate development business. There was search and seizure action on the assessee group by the Income tax department on 18.06.2015 during which various documents/evid....
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.... 2016 as follows: Rs 56,49,10,000/- between 09.11.2016 to 30.11.2016 and Rs 8.0 crore in December 2016. 8. The AO, during the course of assessment proceedings, questioned the source of these cash deposits of Rs 64.49 crore. The AO accepted the assessee's explanation for cash deposit of Rs 12.41 crore in April 2016, being opening balance from previous year. The AO however, rejected the assessee's explanation for balance cash deposit that the said deposits represent 'On money' received in the year prior to FY 2016-17. The AO finally, held that the source of cash deposit of Rs 41.38 crore in April 2016 in cash book and cash deposit of Rs 8 crore in bank in the month of December 2016 totaling to Rs 49.30 crore, are unexplained and added them as unexplained cash deposits u/s 68 of the Act. 9. The AO further added the following amount u/s 68 of the Act: Sr. No. Description Amount 1 Advance from customers 2,78,00,000 2 Loan from Saket Niketan Pvt Ltd 3,34,11,525 3 Loan from Prominence Impex Pvt Ltd 1,50,00,000 4 Advance from Nihon Impex Pvt Ltd 40,00,00,000 10. On appeal, the ld CIT (A) confirmed the addition of Rs 49.30 crore of cash ....
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....al inference that can be drawn from the factum of quantum leap in turnover. 14. Further, in the case before the Hon'ble Supreme Court [supra], the fact was that cash deficit was unearthed by the Assessing Officer in the cash book in the course of assessment proceedings. As can be seen from para 1 of the Supreme Court decision that the assessee offered various alternative pleas to explain the cash deficit in the cash book, which were all rejected by the Assessing Officer and the plea of telescoping benefit was taken for the first time before the ITAT. In the instant case, the assessee is taking the plea of telescoping of cash received on account of on- money in earlier years against the cash deposits in banks, which are recorded in the regular books, since the stage of assessment. In fact, the assessee has claimed the said adjustments in the books. 15. The ld. counsel for the assessee concluded by saying that the CIT(A)'s contention that the cash was not found in the course of search is also not a reasonable one inasmuch as, it is not necessary that every item/asset will come to the notice of the first party at the time of search. The assessee also relied on the follow....
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....years cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year and there should be overall consideration of peculiar facts and circumstances of the case. In the instant case, the ITAT (supra) has accepted the factum of generation of income in the form of on-money in real estate business in the years prior to AY 2017-18, and has held the same as taxable as unaccounted income at the rate of 20% of total on-money received. In such a peculiar facts and circumstances, we are of the considered view that the claim of the assessee for telescoping benefit has some merit. It is also an uncontroverted fact that the assessee has shown a substantial increase in its sale turnover in the instant year compared to other years which were subject matter of search proceedings which do give some indication that after the search substantial turnover is being recorded in the books. Further, we find that as against the facts of the Anantharam Veerasinghaiah case where the assessee raised the issue of telescoping for the first time before the ITAT, in the instant case the assessee had claimed telescoping of cash received on account of on-money ....
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....ng by Indwell Construction Vs. CIT (1998) 232 ITR 776 (AP). Following the same logic, we hold that the receipts as advance from customer and loan from Saket Niketan are part of the estimated 50% of cash deposit explained by way of the benefit of telescoping of the on-money component. Ground 2 and 3 of assessee's appeal is allowed and ground 6 of the Revenue is dismissed in the aforesaid terms. ITA No. 3068/DEL/2022 (Revenue Appeal) 24. The Revenue has filed an application for condonation of delay of 20 days on the ground that the authorization to file appeal before the ITAT was received late. Having perused the application for condonation of delay, we find that there is sufficient cause for filing the appeal belatedly. We, therefore, condone the delay. 25. The Revenue has taken the following Grounds of Appeal: 1.Whether on the facts and circumstances of the case and in law that the Ld. CIT(A) erred in deleting the addition of Rs. 40 Crores without appreciating the fact that the property advance given by the Nihon Impex Pvt. Ltd. to Gallantt Ispat Limited of Rs. 40 Crores was still outstanding as on 31.03.2017 as per Note 9 of the Balance sheet of Gallantt Ispat Li....
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.... Nihon Impex as a shell company from whom the assessee had taken accommodation entry, and added the same u/s 68. 27. When the assessee went in appeal before the ld. CIT(A), the ld. CIT(A) took cognizance of the documents submitted before the Assessing Officer which, inter alia, included agreement dated 01.09.2017 submitted before the Assessing Officer alongwith form 26AS, (copies of which are placed in the paper book at SI. No. 'B). The ld. CIT(A) came to a conclusion that the source of advance of Rs. 40 crore made by M/s Nihon Impex (P) Ltd was the refund of earlier advance it had made to M/s Gallant Udyog Ltd and thereafter deleted the addition. Aggrieved, the revenue is in appeal before us. 28. The ld. DR relied upon the orders of the Assessing Officer. 29. Per contra, the ld. counsel for the assessee vehemently stated that the CIT(A), from the finding of the Investigation Wing which had summoned a director of Nihon Impex and recorded his statement, drew positive conclusion regarding establishment of identity and genuineness of transaction. It is the say of the Ld AR that with respect to creditworthiness, the CIT(A) has further noted that the assessment of the said ....