TaxTMI 
TaxTMI 
2026 (6) TMI 1520
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.... the Act dated 29.12.2017 for Assessment Year 2015-16. 2. Brief facts of the case are that the assessee is engaged in the trading of Petroleum Products. The return of income was filed on 23.09.2015 declaring total income of Rs.22,80,490/-. The case of the assessee was selected for scrutiny and notice u/s 143(2) was issued on 26.08.2016 followed by the provisions u/s 142(1) along with questionnaire were issued from time to time. The AO observed that during the year under appeal, assessee has received unsecured loans of Rs. 3,61,95,000/- out of which the loan of Rs. 2,00,00,000/- was received from M/s Nishyam Hotels Pvt. Ltd. for which the assessee submits that during the year under appeal a cheuqe of Rs. 2,00,00,000/- was received fr....
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....ade in the books of accounts on 30.03.2015 of Cheque No.136642 in the ledger account of M/s Nishyant Hotels Pvt. Ltd. ignoring the fact that no real funds were received and the said cheque was remained in the Bank reconciliation statements and receivable. It is further observed that the said entry was reversed on 02.04.2015 and, accordingly, it was the claim of the assessee that actual funds were never received by the assessee as the cheque was never enchased. When no real funds were received which fact is verifiable from the bank account of the assessee. there is no occasion to make any addition of the amount of Rs. 2.00 corers of the said cheque u/s 68 of the Act as unexplained cash credits. Before going further, we refer the provisions o....
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....t is received or credited in the books of account. For invoking the provisions of section 68 of the Act, the AO has to establish that the funds are actually received and credited in the books of accounts of the assessee. In the instant case, though the credit entry of cheque received has been made, however, there was no physical receipts of funds from the bank account of the lender company to the bank account of the assessee company. Once no funds were credited / received by the assessee, the provisions of section 68 of the Act could not be invoked. Identical issued was come up for consideration before the coordinate bench of Delhi benches of Tribunal in the case of DCIT vs. M/s. Glass Tech India in ITA No. 6241/Del/2017 wherein vide order ....
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....arly in case of fictitious entries where there is no actual flow of cash, the Coordinate Bench in ITO Vs Zexus Air Services Pvt. Ltd. (ITAT Delhi) Appeal Number: ITA No. 2608/Del/2018 vide order dated 23/04/2021 has observed; "12.1 We find, the Delhi Bench of the Tribunal in the case of ACIT vs. Shri Suren Goyal (ITA No. 1767/Del/2011, order dated 1st December, 2011; has held that where the assessee has received loan of Rs. 20 lakhs from his father through a journal entry in the books of account and there was no physical transfer of money from the account of his father, addition of the same u/s 68 of the Act is not justified and accordingly the Tribunal dismissed the appeal filed by the Revenue against the order of the CIT(A) delet....
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....f explanation from the assessee actually arises. Where the books of accounts on its own establish that the entry was fictitious and sham for window dressing, then as such the initial burden on the revenue is not discharged to shift onus on the assessee to explain further identity, capacity and genuineness of the source. 8. It can be seen in present case that the Ld. AO had observed from the books of accounts that the entry was fictitious and was reversed immediately in next FY on 1/4/2014, without any actual cash flow. But Ld. AO was carried away by morality of accounting practices by holding that there is no concept like notional entries in the preparation of books of accounts and to which more pragmatic view was taken by the Ld. ....