ASST. COMMISSIONER OF INCOME TAX- 14(1)(2), MUMBAI, AAKAR BHAVAN V. FOODLINK SERVICES INDIA PVT LTD, MUMBAI

ITA 4851/MUM/2024

AI Insights

The case involves appeals by the Revenue against the orders of the Commissioner of Income-tax (Appeals) which deleted the additions made by the Assessing Officer under section 68 of the Income-tax Act, 1961. The additions were initially made on the grounds that the cash deposits in the assessee's bank accounts during the demonetization period were unexplained. The Tribunal examined the submissions, evidences, and the legal provisions, and found that the additions were not justified as the cash deposits were from genuine business activities and were recorded in the books of account.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32097 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Other Referred Cases: Lalchand Bhagat Ambica Ram v. Commissioner of Income-tax, Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar, Ramlal Jewellers (P.) Ltd. v. ACIT, Alchemist Touchnology Vs ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ SINGH MEEL
• Assessee Lawyers: RAVIKANT PATHAK
• Keywords: Set aside; Business income; Opportunity of being heard; Additional evidence; Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Bogus purchase; Onus to prove; Principle of natural justice; TDS; Rectification of order; Bogus
• Section: 143(3); 68; 133(6); 153C; 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA Nos. 4851, 4863 & 4854/MUM/2024 Assessment Years: 2017-18 & 2018-19 Asst. CIT-14(1)(2), Room No. 455, 4th floor, Aayakar Bhavan, Churchgate, Mumbai-400020. Vs. Foodlink Services India Pvt. Ltd., 301, 3rd floor, Safal Pride Sion Trombay Road, Deonar, Mumbai-400088. PAN NO. AAACF 7690 L Appellant Respondent Assessee by : Mr. Ravikant Pathak Revenue by : Mr. Raj Singh Meel, Sr. DR Date of Hearing : 21/11/2024 Date of pronouncement : 30/01/2025 ORDER PER OM PRAKASH KANT, AM The captioned appeals by the Revenue for assessment years 2017-18 and 2018-19 are directed against separate orders passed by the Commissioner of Income-tax (Appeal)-National Faceless Appeal Centre(NFAC), Delhi [in short the Ld. CIT(A)] . The appeals for assessment year 2017-18 are arising from scrutiny assessment order under section 143(3) of the Income-tax Act, 1961 ( in short the Act) and subsequent rectification order p 154 of the Act, whereas the appeal for assessment year 2018 arising from scrutiny assessment order Act. As common issues and therefore same were heard together and disposed off this common order for sake of convenience. 2. Firstly, we take up the appeal for as arising from assessment order u/s 143(3) of the Act. The grounds raised by the Revenue 1.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 2,58,78,235/ of the Act of the Income 2 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee failed to discharge the onus to prove the source of the cash deposit in its account. 3 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in holding that once the book results are accepted by the AO, the sale reflected in those book results cannot be doubted otherwise it amounts to double taxation while there is no such provision as per Income 196l to reject the books of account while making certain addition(s)/disallowance(s). 4 The appellant prays that the order of the grounds be set aside and that of the Assessing Officer be restored. 3. The learned departmental representative (DR) submitted that this appeal is filed with referred to the application of the Assess Foodlink Services India Pvt. Ltd. the Act) and subsequent rectification order passed under section ct, whereas the appeal for assessment year 2018 arising from scrutiny assessment order under section 143( . As common issues-in-dispute are involved in these appeals and therefore same were heard together and disposed off this common order for sake of convenience. we take up the appeal for assessment year 2017 m assessment order u/s 143(3) of the Act. The grounds Revenue reproduced as under: Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 2,58,78,235/- made by the AO on account of cash credit u/s 68 of the Act of the Income-tax Act, 1961. 2 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee failed to discharge the onus to prove the genuineness of source of the cash deposit in its account. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in holding that once the book results are accepted by the AO, the sale reflected in those book esults cannot be doubted otherwise it amounts to double taxation while there is no such provision as per Income 196l to reject the books of account while making certain addition(s)/disallowance(s). 4 The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be The learned departmental representative (DR) submitted that this appeal is filed with a delay of seven days. The learned DR referred to the application of the Assessing Officer for condoning the Foodlink Services India Pvt. Ltd. 2 ITA Nos. 4851, 4863 & 4854/MUM/2024 assed under section ct, whereas the appeal for assessment year 2018-19 is under section 143(3) of the dispute are involved in these appeals and therefore same were heard together and disposed off by way of sessment year 2017-18 m assessment order u/s 143(3) of the Act. The grounds Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. he AO on account of cash credit u/s 68 2 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the genuineness of Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in holding that once the book results are accepted by the AO, the sale reflected in those book esults cannot be doubted otherwise it amounts to double taxation while there is no such provision as per Income-tax Act, 196l to reject the books of account while making certain CIT(A) on the above grounds be set aside and that of the Assessing Officer be The learned departmental representative (DR) submitted that delay of seven days. The learned DR ing Officer for condoning the delay in filing the appeal and submitted that due to time barring matters, gazetted holidays and shortage of staff, there was short delay of seven days in filing the appeal. We have heard rival submission of the parties on the delay in filing the appeal. In our opinion there is a sufficient and bonafide reason for delay in filing the appeal, accordingly, we condone the delay in the filing the appeal and admit the same for adjudication. 4. Briefly stated facts of the case are that the assessee, a private limited company, was incorporated in the year 1998 and since engaged in the business of restaurants, banquets and outdoor catering and food parcels. During the year under consideration, tw companies namely M/s Foodlink Restaurant India Private Limited and M/s Foodlink Banquet and Catering India Private Limited got merged with the assessee. For the captioned assessment year, the assessee filed return of income on 30/10/2017 declaring total income at ₹1,64,23,340/ revised its return of income on 08/02/2019 declaring the total income at ₹80,83,490/ was selected for scrutiny assessment a the Act were issued and complied with. During scrutiny proceedings, the Assessing Officer observed cash deposit of ₹3,86,99,991/- during the period from 08/11/2016 to 31/12/2016 ( i.e. the demonetization period) in its bank accounts, out of which Foodlink Services India Pvt. Ltd. delay in filing the appeal and submitted that due to time barring matters, gazetted holidays and shortage of staff, there was short delay of seven days in filing the appeal. We have heard rival submission of the parties on the application for condonation of the delay in filing the appeal. In our opinion there is a sufficient and bonafide reason for delay in filing the appeal, accordingly, we condone the delay in the filing the appeal and admit the same for efly stated facts of the case are that the assessee, a private was incorporated in the year 1998 and since engaged in the business of restaurants, banquets and outdoor catering and food parcels. During the year under consideration, tw companies namely M/s Foodlink Restaurant India Private Limited and M/s Foodlink Banquet and Catering India Private Limited got merged with the assessee. For the captioned assessment year, the assessee filed return of income on 30/10/2017 declaring total 340/-. Subsequent to the merger, the assessee revised its return of income on 08/02/2019 declaring the total 490/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices un ct were issued and complied with. During scrutiny proceedings, the Assessing Officer observed cash deposit of during the period from 08/11/2016 to 31/12/2016 ( i.e. the demonetization period) in its bank accounts, out of which Foodlink Services India Pvt. Ltd. 3 ITA Nos. 4851, 4863 & 4854/MUM/2024 delay in filing the appeal and submitted that due to time barring matters, gazetted holidays and shortage of staff, there was short delay of seven days in filing the appeal. We have heard rival application for condonation of the delay in filing the appeal. In our opinion there is a sufficient and bonafide reason for delay in filing the appeal, accordingly, we condone the delay in the filing the appeal and admit the same for efly stated facts of the case are that the assessee, a private was incorporated in the year 1998 and since then engaged in the business of restaurants, banquets and outdoor catering and food parcels. During the year under consideration, two companies namely M/s Foodlink Restaurant India Private Limited and M/s Foodlink Banquet and Catering India Private Limited got merged with the assessee. For the captioned assessment year, the assessee filed return of income on 30/10/2017 declaring total . Subsequent to the merger, the assessee revised its return of income on 08/02/2019 declaring the total . The return of income filed by the assessee nd statutory notices under ct were issued and complied with. During scrutiny proceedings, the Assessing Officer observed cash deposit of during the period from 08/11/2016 to 31/12/2016 ( i.e. the demonetization period) in its bank accounts, out of which ₹3,23,84,000/- were was legal tender notes. The assessee was asked to explain source of the cash deposited including SBN. The assessee explained that cash deposited was generated out of its business activities. The ass explained that on 08/11/2016, cash balance of appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books of accounts. But the Assessing Officer rejected the co assessee and in the assessment order passed under section 143(3) of the made addition of under section 68 of the A considering the submission and analysing deleted the addition made by the Ass Revenue is on appeal before the Income short the ‘Tribunal’) by way of raising grounds 5. The learned counsel for the a containing pages 1 to 44. 6. In the grounds raised by the R regarding the cash deposits of the Assessing Officer as unexplained cash credit, but same has been deleted by the Ld. CIT(A). The brief facts qua the issue in dispute are that in the instant case the assessee was engaged in the business of providing restaurant service Foodlink Services India Pvt. Ltd. were in specified banknotes (SBN) and remaining was legal tender notes. The assessee was asked to explain source of the cash deposited including SBN. The assessee explained that cash deposited was generated out of its business activities. The ass explained that on 08/11/2016, cash balance of ₹3,44,11, appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books of accounts. But the Assessing Officer rejected the co assessee and in the assessment order passed under section 143(3) ade addition of ₹2,58,78,235/- as unexplained cash under section 68 of the Act. On further appeal, the Ld. CIT(A) after considering the submission and analysing facts and evidence deleted the addition made by the Assessing Officer. Aggrieved, the evenue is on appeal before the Income-Tax Appellate Tribunal short the ‘Tribunal’) by way of raising grounds as reproduced above. The learned counsel for the assessee filed a paper book containing pages 1 to 44. In the grounds raised by the Revenue, the sole issue is regarding the cash deposits of ₹ 2,58,78,235/- which was held by the Assessing Officer as unexplained cash credit, but same has been deleted by the Ld. CIT(A). The brief facts qua the issue in dispute are that in the instant case the assessee was engaged in the business of providing restaurant services, outdoor catering and Foodlink Services India Pvt. Ltd. 4 ITA Nos. 4851, 4863 & 4854/MUM/2024 specified banknotes (SBN) and remaining was legal tender notes. The assessee was asked to explain source of the cash deposited including SBN. The assessee explained that cash deposited was generated out of its business activities. The assessee 3,44,11,199/- was appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books of accounts. But the Assessing Officer rejected the contention of the assessee and in the assessment order passed under section 143(3) as unexplained cash credit ct. On further appeal, the Ld. CIT(A) after facts and evidences, essing Officer. Aggrieved, the Tax Appellate Tribunal (in reproduced above. ssessee filed a paper book the sole issue is which was held by the Assessing Officer as unexplained cash credit, but same has been deleted by the Ld. CIT(A). The brief facts qua the issue in dispute are that in the instant case the assessee was engaged in the s, outdoor catering and management of food and beverages. The assessee had made total cash deposit of ₹3,23,84, during the demonetization period. The assessee explained that cash deposited was generated out of its busine explained that on 08/11/2016, cash balance of appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books of accounts. But the Assessing O explanation of the assessee due to following reasons: (i) by way of late filing of VAT and service tax returns for the period from April 2016 to September 2016, the assessee had sufficient time to manipulate its sales and therefore rooted it is unaccounted money in the bank account by exaggerating its sales. (ii) late payment of VAT and service tax liability for the period from April 2016 to September 2016 (iii) huge cash balance of of accounts as on 08/11/2016 i demonetization (iv) Variation in cash flows compared to the previous years 6.1 The assessee was having cash in hand of 01/04/2016, therefore the Assessing Officer allowed benefit of the Foodlink Services India Pvt. Ltd. management of food and beverages. The assessee had made total 3,23,84,000/- in a specified banknotes (SBN) during the demonetization period. The assessee explained that cash deposited was generated out of its business activities. The assessee explained that on 08/11/2016, cash balance of ₹3,44,11, appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books of accounts. But the Assessing Officer did not explanation of the assessee due to following reasons: by way of late filing of VAT and service tax returns for the period from April 2016 to September 2016, the assessee had sufficient time to manipulate its sales and therefore oted it is unaccounted money in the bank account by exaggerating its sales. late payment of VAT and service tax liability for the period from April 2016 to September 2016 huge cash balance of ₹3,44,11,199/-shown in the books of accounts as on 08/11/2016 i demonetization. Variation in cash flows compared to the previous years assessee was having cash in hand of ₹43,24, 01/04/2016, therefore the Assessing Officer allowed benefit of the Foodlink Services India Pvt. Ltd. 5 ITA Nos. 4851, 4863 & 4854/MUM/2024 management of food and beverages. The assessee had made total in a specified banknotes (SBN) during the demonetization period. The assessee explained that cash ss activities. The assessee 3,44,11,199/- was appearing in its books of accounts and cash has been deposited during the demonetization period out of the cash available in books fficer did not accept the explanation of the assessee due to following reasons: by way of late filing of VAT and service tax returns for the period from April 2016 to September 2016, the assessee had sufficient time to manipulate its sales and therefore oted it is unaccounted money in the bank account by late payment of VAT and service tax liability for the period from April 2016 to September 2016 shown in the books of accounts as on 08/11/2016 i.e. prior to Variation in cash flows compared to the previous years 43,24,459/-as on 01/04/2016, therefore the Assessing Officer allowed benefit of the said amount of opening cash in hand and mad remaining amount of 6.2 The Assessing Officer noted that service tax challan of 93911/- for month of was deposited on 28/04/2017 after a delay of 357 the service tax challan for June 2016 for 258/- which was due on 06/07/2016 28/04/2017 after a delay of 296 days. Similarly August, 2016 for amount of 06/09/2016, was deposited on 28/04/ 2017 234 days. The assessee explained that service tax returns for the period from April to September 2016 of amalgamating companies and amalgamated company were filed late due to huge quantum o data and lack of sufficient manpower to compile the same. Similarly the Gujarat VAT returns of M/s Foodlink banquet and catering India Private Limited for the period from September to February 2016 and Karnataka and Telegna VAT returns of Fodlink restaurants India Private Limited were filed late due to huge quantum of data and lack of sufficient manpower to compile the same. The service tax, and while computing the net tax liability. The error was pointed out by the statutory auditor and accordingly the liability was paid along with interest for the mon contentions of the assessee were Foodlink Services India Pvt. Ltd. said amount of opening cash in hand and made addition for the remaining amount of ₹2,58,78,235/- [ = 3,23,84,000 The Assessing Officer noted that service tax challan of of April, 2016 which was due on 06/05/2016 was deposited on 28/04/2017 after a delay of 357 the service tax challan for June 2016 for an amount of which was due on 06/07/2016 but was deposited on 28/04/2017 after a delay of 296 days. Similarly, the service tax, for amount of ₹2,34,173/- which was due 06/09/2016, was deposited on 28/04/ 2017 i.e. after a delay of 234 days. The assessee explained that service tax returns for the period from April to September 2016 of amalgamating companies and amalgamated company were filed late due to huge quantum o data and lack of sufficient manpower to compile the same. Similarly the Gujarat VAT returns of M/s Foodlink banquet and catering India Private Limited for the period from September to February 2016 and Karnataka and Telegna VAT returns of Fodlink ants India Private Limited were filed late due to huge quantum of data and lack of sufficient manpower to compile the same. The service tax, and VAT paid late due to typographical error while computing the net tax liability. The error was pointed out by e statutory auditor and accordingly the liability was paid along with interest for the months from June 2016 to August contentions of the assessee were rejected mainly on the ground that Foodlink Services India Pvt. Ltd. 6 ITA Nos. 4851, 4863 & 4854/MUM/2024 e addition for the [ = 3,23,84,000 – 43,24,459]. The Assessing Officer noted that service tax challan of ₹ , 2016 which was due on 06/05/2016 was deposited on 28/04/2017 after a delay of 357 days. Similarly amount of ₹ 1,55, was deposited on the service tax, for which was due on after a delay of 234 days. The assessee explained that service tax returns for the period from April to September 2016 of amalgamating companies and amalgamated company were filed late due to huge quantum of data and lack of sufficient manpower to compile the same. Similarly the Gujarat VAT returns of M/s Foodlink banquet and catering India Private Limited for the period from September to February 2016 and Karnataka and Telegna VAT returns of Fodlink ants India Private Limited were filed late due to huge quantum of data and lack of sufficient manpower to compile the paid late due to typographical error while computing the net tax liability. The error was pointed out by e statutory auditor and accordingly the liability was paid along from June 2016 to August, 2016. The rejected mainly on the ground that assessee failed to furnish service tax and VAT returns of relevant period along with challan payments. 6.3 Further, the Assessing Officer asked the assessee to justify keeping of huge cash in hand as compared to very less cash expenses or cash purchases. The Assessing Officer also noticed high cash sales to total sales ratio during the period from October 2016 (i.e. 35.85%) revenue is received in cash therefore its high in and around month of November. The assessee provided cash balance for the month of November for preceding three years and sales in the month of October preceding three years as under: “7.6 Further, the appellant had claimed that the business of the appellant is that its revenue is in cash and its cash balance is always high has provided the details of Cash balance in the month of November in preceding three years and sales in the month of October of preceding three years as under: Date 08-Nov-13 08-Nov-14 08-Nov-15 6.4 Similarly, the assessee explained average cash sales to total sales for preceding and Foodlink Services India Pvt. Ltd. assessee failed to furnish service tax and VAT returns of relevant period along with challan payments. Further, the Assessing Officer asked the assessee to justify keeping of huge cash in hand as compared to very less cash expenses or cash purchases. The Assessing Officer also noticed total sales ratio during the period from ber 2016 (i.e. 35.85%). But the assessee explained in cash therefore its cash balance was always high in and around month of November. The assessee provided the month of November for preceding three years sales in the month of October preceding three years as under: 7.6 Further, the appellant had claimed that the business of the appellant is that its revenue is in cash and its cash balance is in and around November months. The appellant has provided the details of Cash balance in the month of November in preceding three years and sales in the month of October of preceding three years as under: Sales in the Cash % of cash Month of Oct Balance balance 1,95,97,165 78,24,967 40% 2.26.06,011 2,12.32.249 94% 3,67,73,840 3,03,72,738 83% Similarly, the assessee explained average cash sales to total and subsequent years as under : Foodlink Services India Pvt. Ltd. 7 ITA Nos. 4851, 4863 & 4854/MUM/2024 assessee failed to furnish service tax and VAT returns of the Further, the Assessing Officer asked the assessee to justify keeping of huge cash in hand as compared to very less cash expenses or cash purchases. The Assessing Officer also noticed total sales ratio during the period from April to . But the assessee explained that its cash balance was always high in and around month of November. The assessee provided the month of November for preceding three years sales in the month of October preceding three years as under: 7.6 Further, the appellant had claimed that the business of the appellant is that its revenue is in cash and its cash balance is in and around November months. The appellant has provided the details of Cash balance in the month of November in preceding three years and sales in the month of Similarly, the assessee explained average cash sales to total 7.7 The Appellant has furnished the average cash sales of previous and subsequent years as under: FY Total sales 2013-14 35,23,12,513 2014-15 46,89,67,475 2015-16 76,93,45,659 2016-17 1.03.98,84,240 2017-18 1,25,26,32,473 2018-19 1,84,33,02,952 2019-20 1,37.04,93,850 6.5 After considering submission of the deleted the addition of observing as under: “8. The details available in assessment order and the written submission of the appellant filed during the appellate proceedings has been carefully verified. 8.1 It is found that the addition related to the cash deposit made during the demonetization period treating it as unexplained cash credit by AO u/s 68 of the Act has no correlations with the delay in filing VAT and Service Tax results and delay in payment liability of VAT and service tax. The period for which VAT and ST returns have been filed belatedly are from April, 2016 to September, 2016. Further, no one in the country has knowledge about the demonetization which happened on the evening of 08/11/2016. Therefore, it cannot be said that the Appellant delayed filing of VAT and service tax return to manipulate sales and show it higher. Further, the average month wise service tax payment remains similar for most of the months. 8.2 It is seen that it is cash balance. Considering the business of the Appellant, it Foodlink Services India Pvt. Ltd. 7.7 The Appellant has furnished the average cash sales of previous and subsequent years as under: Total sales Cash Sales % 35,23,12,513 6,90,95,830 20% 46,89,67,475 12,54,19,364 27% 76,93,45,659 15,32,17,841 20% 1.03.98,84,240 24.89,84,302 24% 1,25,26,32,473 27,55,07,891 22% 1,84,33,02,952 18,92,54,346 10% 1,37.04,93,850 20,26,84,883 15% considering submission of the assessee the Ld. CIT(A) deleted the addition of observing as under: 8. The details available in assessment order and the written submission of the appellant filed during the appellate proceedings has been carefully verified. 8.1 It is found that the addition related to the cash deposit made during the demonetization period treating it as unexplained cash credit by AO u/s 68 of the Act has no correlations with the delay in filing VAT and Service Tax results and delay in payment liability of VAT and service tax. The period for which VAT and ST returns have been filed belatedly are from April, 2016 to September, 2016. Further, no one in the country has knowledge about the demonetization which happened on the evening of 16. Therefore, it cannot be said that the Appellant delayed filing of VAT and service tax return to manipulate sales and show it higher. Further, the average month wise service tax payment remains similar for most of the months. 8.2 It is seen that it is not the first time the appellant was having cash balance. Considering the business of the Appellant, it Foodlink Services India Pvt. Ltd. 8 ITA Nos. 4851, 4863 & 4854/MUM/2024 7.7 The Appellant has furnished the average cash sales of assessee the Ld. CIT(A) 8. The details available in assessment order and the written submission of the appellant filed during the appellate 8.1 It is found that the addition related to the cash deposit made during the demonetization period treating it as unexplained cash credit by AO u/s 68 of the Act has no correlations with the delay in filing VAT and Service Tax results and delay in payment of liability of VAT and service tax. The period for which VAT and ST returns have been filed belatedly are from April, 2016 to September, 2016. Further, no one in the country has knowledge about the demonetization which happened on the evening of 16. Therefore, it cannot be said that the Appellant delayed filing of VAT and service tax return to manipulate sales and show it higher. Further, the average month wise service tax not the first time the appellant was having cash balance. Considering the business of the Appellant, it always had cash balance. Looking at the nature of business of the appellant, it has more business activity in the month of November, therefore, the Appe balance. 8.3 From the details provided by the appellant the cash sales during the year under consideration is more or less in line with cash sale in all preceding years. Therefore the reason provided by AO that the cash sa year is not found tenable. 8.4 From the details provided by the appellant it is ascertained that the appellant was regularly depositing the huge cash in its bank account in previous years as well as subsequent year substantiates that the cash is having a major role in sales of the business of the Appellant which is deposited regularly in bank account: 8.5 The cash sales as on 08.11.2013 has been shown at Rs.1,95,97,165/ Rs.78,24,967/ sales as on 08.11.2014 has been shown at Rs.2,26,06,011/ and cash balance has been shown at Rs.2,12,32,249/ works out to 94% cash balance. The cash sales as on 08.11.2015 has been shown at Rs shown at Rs.3,03,72,738/ balance. The book results of earlier years have not been doubted by the Department. The judicial decisions relied upon by the appellant lay that where the books contention of the appellant have not been rejected based on enquiry or any valid reason, the partially disbelieving the contention of the appellant was not permissible and the same context, disbelieving the cash held in the cash books o appellant before the demonetization would amount to double taxation. 8.6 It is a fact that the auditor has not pointed out any discrepancy in the accounts of the appellant. Further, the books of account have not been rejected by the AO u/s.145(3) of Act, 1961. The purchases and the stock position depicted in the books have thus been accepted by the AO and the cash sales Foodlink Services India Pvt. Ltd. always had cash balance. Looking at the nature of business of the appellant, it has more business activity in the month of November, therefore, the Appellant needs to maintain the cash 8.3 From the details provided by the appellant the cash sales during the year under consideration is more or less in line with cash sale in all preceding years. Therefore the reason provided by AO that the cash sales has increased drastically during the year is not found tenable. 8.4 From the details provided by the appellant it is ascertained that the appellant was regularly depositing the huge cash in its bank account in previous years as well as subsequent year substantiates that the cash is having a major role in sales of the business of the Appellant which is deposited regularly in bank 8.5 The cash sales as on 08.11.2013 has been shown at Rs.1,95,97,165/- and cash balance has been shown at 8,24,967/- which works out to 40% cash balance. The cash sales as on 08.11.2014 has been shown at Rs.2,26,06,011/ and cash balance has been shown at Rs.2,12,32,249/ works out to 94% cash balance. The cash sales as on 08.11.2015 has been shown at Rs.3,67,73,840/- and cash balance has been shown at Rs.3,03,72,738/- which works out to 83% cash balance. The book results of earlier years have not been doubted by the Department. The judicial decisions relied upon by the appellant lay that where the books of accounts and the contention of the appellant have not been rejected based on enquiry or any valid reason, the partially disbelieving the contention of the appellant was not permissible and the same context, disbelieving the cash held in the cash books o appellant before the demonetization would amount to double 8.6 It is a fact that the auditor has not pointed out any discrepancy in the accounts of the appellant. Further, the books of account have not been rejected by the AO u/s.145(3) of Act, 1961. The purchases and the stock position depicted in the books have thus been accepted by the AO and the cash sales Foodlink Services India Pvt. Ltd. 9 ITA Nos. 4851, 4863 & 4854/MUM/2024 always had cash balance. Looking at the nature of business of the appellant, it has more business activity in the month of llant needs to maintain the cash 8.3 From the details provided by the appellant the cash sales during the year under consideration is more or less in line with cash sale in all preceding years. Therefore the reason provided les has increased drastically during the 8.4 From the details provided by the appellant it is ascertained that the appellant was regularly depositing the huge cash in its bank account in previous years as well as subsequent years. It substantiates that the cash is having a major role in sales of the business of the Appellant which is deposited regularly in bank 8.5 The cash sales as on 08.11.2013 has been shown at and cash balance has been shown at which works out to 40% cash balance. The cash sales as on 08.11.2014 has been shown at Rs.2,26,06,011/- and cash balance has been shown at Rs.2,12,32,249/- which works out to 94% cash balance. The cash sales as on 08.11.2015 and cash balance has been which works out to 83% cash balance. The book results of earlier years have not been doubted by the Department. The judicial decisions relied upon by the of accounts and the contention of the appellant have not been rejected based on enquiry or any valid reason, the partially disbelieving the contention of the appellant was not permissible and the same context, disbelieving the cash held in the cash books of the appellant before the demonetization would amount to double 8.6 It is a fact that the auditor has not pointed out any discrepancy in the accounts of the appellant. Further, the books of account have not been rejected by the AO u/s.145(3) of the IT Act, 1961. The purchases and the stock position depicted in the books have thus been accepted by the AO and the cash sales were made out of accounted stock. The sales recorded in the books of accounts having been accepted by the AO, the corresponding cash deposit made out of such cash sales cannot be rejected. There is merit in the submission of the appellant that the entries in the books of accounts depict a true state of affairs unless some contrary evidence is found and the books are rejected by the AO. In the instant case, there is no such finding regarding any evidence about bogus sales or bogus purchase by the appellant. The AO has made the addition by not accepting the cash balance available in the regular books of accounts. Thus making an add accounted for in the books of accounts without rejecting the books of accounts, is totally unwarranted. In the instant case, the cash deposited was duly recorded in the books of account of the appellant and nature & source being the cash sales. In the present case, the money was duly recorded and accounted in the books of accounts and the source was also explained as cash sales. It cannot be said that the ap explanation about the nature & source of cash deposit. The fact that the appellant deposited many times more cash in the bank account in the earlier year, shows that it was a regular feature of its business to deposit th period prior to the announcement of demonetization on 08.11.2016 and these facts have not been negated by the AO. It is also a fact that the appellant’s business is of restaurant, banquets & catering and parcel sales wher in abundance. Thus the track records of deposit of cash in immediate preceding year justify the genuineness of the cash deposit during the demonetization period. Further, the approach of the AO have resulted in double addition becaus have already been accounted for while arriving at gross profit in the trading account and then adding them separately also as unaccounted cash. This means that sales of Rs.2,58,78,235/ have once been credited in the trading account forming p gross profit and then also adding them separately treating as unaccounted cash of Rs.2,58,78,235/ then it has to be shown that these are bogus sales and there is either no corresponding purchases with the appellant or th were no such purchases against these sales. Foodlink Services India Pvt. Ltd. were made out of accounted stock. The sales recorded in the books of accounts having been accepted by the AO, the ng cash deposit made out of such cash sales cannot be rejected. There is merit in the submission of the appellant that the entries in the books of accounts depict a true state of affairs unless some contrary evidence is found and the books are the AO. In the instant case, there is no such finding regarding any evidence about bogus sales or bogus purchase by the appellant. The AO has made the addition by not accepting the cash balance available in the regular books of accounts. Thus making an addition on account of deposit of cash which is duly accounted for in the books of accounts without rejecting the books of accounts, is totally unwarranted. In the instant case, the cash deposited was duly recorded in the books of account of the appellant and the appellant offered an explanation regarding the nature & source being the cash sales. In the present case, the money was duly recorded and accounted in the books of accounts and the source was also explained as cash sales. It cannot be said that the appellant failed to give satisfactory explanation about the nature & source of cash deposit. The fact that the appellant deposited many times more cash in the bank account in the earlier year, shows that it was a regular feature of its business to deposit the cash in the bank even during the period prior to the announcement of demonetization on 08.11.2016 and these facts have not been negated by the AO. It is also a fact that the appellant’s business is of restaurant, banquets & catering and parcel sales where there are cash sales in abundance. Thus the track records of deposit of cash in immediate preceding year justify the genuineness of the cash deposit during the demonetization period. Further, the approach of the AO have resulted in double addition because these sales have already been accounted for while arriving at gross profit in the trading account and then adding them separately also as unaccounted cash. This means that sales of Rs.2,58,78,235/ have once been credited in the trading account forming p gross profit and then also adding them separately treating as unaccounted cash of Rs.2,58,78,235/-. If sales are to be doubted then it has to be shown that these are bogus sales and there is either no corresponding purchases with the appellant or th were no such purchases against these sales. Foodlink Services India Pvt. Ltd. 10 ITA Nos. 4851, 4863 & 4854/MUM/2024 were made out of accounted stock. The sales recorded in the books of accounts having been accepted by the AO, the ng cash deposit made out of such cash sales cannot be rejected. There is merit in the submission of the appellant that the entries in the books of accounts depict a true state of affairs unless some contrary evidence is found and the books are the AO. In the instant case, there is no such finding regarding any evidence about bogus sales or bogus purchase by the appellant. The AO has made the addition by not accepting the cash balance available in the regular books of accounts. Thus ition on account of deposit of cash which is duly accounted for in the books of accounts without rejecting the books of accounts, is totally unwarranted. In the instant case, the cash deposited was duly recorded in the books of account of the the appellant offered an explanation regarding the nature & source being the cash sales. In the present case, the money was duly recorded and accounted in the books of accounts and the source was also explained as cash sales. It pellant failed to give satisfactory explanation about the nature & source of cash deposit. The fact that the appellant deposited many times more cash in the bank account in the earlier year, shows that it was a regular feature of e cash in the bank even during the period prior to the announcement of demonetization on 08.11.2016 and these facts have not been negated by the AO. It is also a fact that the appellant’s business is of restaurant, e there are cash sales in abundance. Thus the track records of deposit of cash in immediate preceding year justify the genuineness of the cash deposit during the demonetization period. Further, the approach e these sales have already been accounted for while arriving at gross profit in the trading account and then adding them separately also as unaccounted cash. This means that sales of Rs.2,58,78,235/- have once been credited in the trading account forming part of gross profit and then also adding them separately treating as . If sales are to be doubted then it has to be shown that these are bogus sales and there is either no corresponding purchases with the appellant or there 8.7 The Hon’ble Supreme Court of India in the case of Lalchand Bhagat Ambica Ram v. Commissioner of Income ITR 288 (SC) has held as under: “Section 143 of the Income to income - Assessment year 1946 extensive business in grain as merchant and commission agent Assessee maintained its books of account according to mercantile system and there were maintained in its cash books two accounts: one showing cash balances from day to day and other known as \"Almirah account\" wherein were kept large balances which were not required for day filed its return showing loss in business that assessee had encashed high denomination notes of value of Rs. 2.91 lakhs on 19 notes formed part of its cash balances including cash balances in Almirah account was rejected by ITO who took into account several surrounding circumstances and included said sum in its total income - accounts to effect that money's had been received in high denomination notes were subsequent interpolations Tribunal assessee nervousness after coming into force of High Denomination Bank Notes (Demonetization) Ordinance, 1946 on 12 not know it had specific proof in its possession of having high denomination notes as part o accepted assessee's explanation in respect of said interpolations and held that there was no other reason to suspect genuineness of account books cash balance on 12 - However, examining cash book and taking into account all circumstances adverted to by ITO, Tribunal held that assessee might be expected to have possessed as part of its business cash balance of at least Rs. 1.5 lakhs in shap notes on date when said ordinance was promulgated but nature of source from which it derived remaining high denomination notes remained unexplained addition - Whether when entries in books of account i cash balances were held to be genuine, there was no escape from conclusion that assessee had offered reasonable Foodlink Services India Pvt. Ltd. 8.7 The Hon’ble Supreme Court of India in the case of Lalchand Bhagat Ambica Ram v. Commissioner of Income-tax, [1959] 37 ITR 288 (SC) has held as under: - “Section 143 of the Income-tax Act, 1961 - Assessment Assessment year 1946-47 - Assessee carried on extensive business in grain as merchant and commission agent Assessee maintained its books of account according to mercantile system and there were maintained in its cash books two accounts: one showing cash balances from day to day and other known as \"Almirah account\" wherein were kept large balances which were not required for day-to-day working of business filed its return showing loss in business - However, ITO noticed assessee had encashed high denomination notes of value of Rs. 2.91 lakhs on 19-1-1946 - Assessee's explanation that those notes formed part of its cash balances including cash balances in Almirah account was rejected by ITO who took into account rrounding circumstances and included said sum in its ITO also found that portions of entries in assessee's accounts to effect that money's had been received in high denomination notes were subsequent interpolations Tribunal assessee stated that said entries were made in nervousness after coming into force of High Denomination Bank Notes (Demonetization) Ordinance, 1946 on 12-1-1946, as it did not know it had specific proof in its possession of having high denomination notes as part of its cash balances accepted assessee's explanation in respect of said interpolations and held that there was no other reason to suspect genuineness of account books - It was also found that as per book entries cash balance on 12-1-1946 aggregated to more than Rs. 3.1 lakh However, examining cash book and taking into account all circumstances adverted to by ITO, Tribunal held that assessee might be expected to have possessed as part of its business cash balance of at least Rs. 1.5 lakhs in shape of high denomination notes on date when said ordinance was promulgated but nature of source from which it derived remaining high denomination notes remained unexplained - Accordingly, Tribunal reduced Whether when entries in books of account i cash balances were held to be genuine, there was no escape from conclusion that assessee had offered reasonable Foodlink Services India Pvt. Ltd. 11 ITA Nos. 4851, 4863 & 4854/MUM/2024 8.7 The Hon’ble Supreme Court of India in the case of Lalchand tax, [1959] 37 ent - Addition Assessee carried on extensive business in grain as merchant and commission agent - Assessee maintained its books of account according to mercantile system and there were maintained in its cash books two accounts: one showing cash balances from day to day and other known as \"Almirah account\" wherein were kept large balances day working of business - It However, ITO noticed assessee had encashed high denomination notes of value of Assessee's explanation that those notes formed part of its cash balances including cash balances in Almirah account was rejected by ITO who took into account rrounding circumstances and included said sum in its ITO also found that portions of entries in assessee's accounts to effect that money's had been received in high denomination notes were subsequent interpolations - Before stated that said entries were made in nervousness after coming into force of High Denomination Bank 1946, as it did not know it had specific proof in its possession of having high f its cash balances - Tribunal accepted assessee's explanation in respect of said interpolations and held that there was no other reason to suspect genuineness It was also found that as per book entries ed to more than Rs. 3.1 lakh However, examining cash book and taking into account all circumstances adverted to by ITO, Tribunal held that assessee might be expected to have possessed as part of its business cash e of high denomination notes on date when said ordinance was promulgated but nature of source from which it derived remaining high denomination Accordingly, Tribunal reduced Whether when entries in books of account in regard to cash balances were held to be genuine, there was no escape from conclusion that assessee had offered reasonable explanation as to source of all high denomination notes which it encashed on 19 genuineness of those books and accept assessee's explanation in part and reject same in regard to balance sum Whether, therefore, it was clear that Tribunal in arriving at its conclusion indulged in suspicions, conjectures and surmises and acted without any evidence or upon a view of facts which could not reasonably be entertained or finding was perverse which could not be sustained and Supreme Court was entitled to interfere with such finding addition made was l 8.8 The Hon’ble High Court of Delhi in the case of Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar IT Appeal 348 of 2019, [2021] 124 taxmann.com 123 (Delhi) has held as under: “Section 56, read with sect Act, 1961 - Income from other sources (Sale of opening stock) Assessment year 2014 of textiles - All sales undertaken by assessee were in cash only Noting such peculiarities, Reve place from where assessee purportedly carried on business Survey revealed that business premises was abandoned and that there was no proof of any business undertaken by assessee - Based on survey report, Assessing Off cash deposit found in assessee's bank account was unexplained income and not sale proceeds towards unexplained income assessee had closed business in July, 2015 and s carried out in November, 2016 opening stock, sales and closing stock of assessee was accepted during scrutiny assessment of previous year findings, Tribunal deleted additions made quantum figure and opening stock was accepted in previous years during scrutiny assessments, receipt from sales made by assessee proprietary concern out of its opening stock could not be treated as unexplained income to be taxed as 'income from other sources' - Held, yes [Para 11] [In favour of assessee]” Foodlink Services India Pvt. Ltd. explanation as to source of all high denomination notes which it encashed on 19-1-1946 and it was not open to Tribunal to accept uineness of those books and accept assessee's explanation in part and reject same in regard to balance sum - Held, yes Whether, therefore, it was clear that Tribunal in arriving at its conclusion indulged in suspicions, conjectures and surmises and without any evidence or upon a view of facts which could not reasonably be entertained or finding was perverse which could not be sustained and Supreme Court was entitled to interfere with such finding - Held, yes - Whether, therefore, addition made was liable to be deleted - Held, yes” 8.8 The Hon’ble High Court of Delhi in the case of Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar IT Appeal 348 of 2019, [2021] 124 taxmann.com 123 (Delhi) has held as under: - “Section 56, read with sections 68 and 133, of the Income Income from other sources (Sale of opening stock) Assessment year 2014-15 - Assessee was engaged in business All sales undertaken by assessee were in cash only Noting such peculiarities, Revenue decided for spot verification at place from where assessee purportedly carried on business Survey revealed that business premises was abandoned and that there was no proof of any business undertaken by assessee Based on survey report, Assessing Officer concluded that entire cash deposit found in assessee's bank account was unexplained income and not sale proceeds - Additions were thus made towards unexplained income - On appeal, Tribunal recorded that assessee had closed business in July, 2015 and s carried out in November, 2016 - It was also noted that entire opening stock, sales and closing stock of assessee was accepted during scrutiny assessment of previous year - Based on such findings, Tribunal deleted additions made - Whether where antum figure and opening stock was accepted in previous years during scrutiny assessments, receipt from sales made by assessee proprietary concern out of its opening stock could not be treated as unexplained income to be taxed as 'income from other Held, yes [Para 11] [In favour of assessee]” Foodlink Services India Pvt. Ltd. 12 ITA Nos. 4851, 4863 & 4854/MUM/2024 explanation as to source of all high denomination notes which it 1946 and it was not open to Tribunal to accept uineness of those books and accept assessee's explanation in Held, yes - Whether, therefore, it was clear that Tribunal in arriving at its conclusion indulged in suspicions, conjectures and surmises and without any evidence or upon a view of facts which could not reasonably be entertained or finding was perverse which could not be sustained and Supreme Court was entitled to Whether, therefore, 8.8 The Hon’ble High Court of Delhi in the case of Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar IT Appeal 348 of 2019, [2021] 124 taxmann.com 123 (Delhi) has ions 68 and 133, of the Income-tax Income from other sources (Sale of opening stock) - Assessee was engaged in business All sales undertaken by assessee were in cash only - nue decided for spot verification at place from where assessee purportedly carried on business - Survey revealed that business premises was abandoned and that there was no proof of any business undertaken by assessee icer concluded that entire cash deposit found in assessee's bank account was unexplained Additions were thus made On appeal, Tribunal recorded that assessee had closed business in July, 2015 and survey was It was also noted that entire opening stock, sales and closing stock of assessee was accepted Based on such Whether where antum figure and opening stock was accepted in previous years during scrutiny assessments, receipt from sales made by assessee proprietary concern out of its opening stock could not be treated as unexplained income to be taxed as 'income from other 8.9 The appellant has relied on the decision rendered in the case of Ramlal Jewellers (P.) Ltd. IT Appeal No. 1600 (MUM.) of 2023, [2023] 154 taxmann.com 584 (Mumbai Tribunal has held “Section 68 of the Income deposit in bank) was engaged in jewellery business proceedings, Assessing Officer noted that immediately after demonetization assessee had shown inflated cash sales and also made deposits in bank account which was completely abnormal as compared to earlier year and also subsequent year He, therefore, taxed cash deposits under section 68 that assessee had m was subject to audit and had produced entire sale bills, stock register and purchases and also quantitative tally of sales and corresponding stock cash deposits could not be demonetization period, cash deposits vis was higher - representing outflow of stocks was duly accounted in books of account and there was no abnormal was no justification to treat deposits made in bank account out of cash sales to be income from undisclosed sources Whether, therefore addition made under section 68 was to be deleted - Held, yes [Para 14] [In 8.10 The AO while not considering the cash in hand of the appellant has pointed out that though the appellant had claimed huge cash as on 08.11.2016 it has deposited cash regularly during the demonetization period i.e. the cash was de in one go but deposited during whole demonetization period regularly. In the early years also the cash sales have been made by the appellant. There is nothing on record to indicate that the books of accounts have been disturbed in the earlier y Therefore, the same have been accepted year after year. The opening stock, purchases, sales and closing stock have been accepted and no addition has been made on these grounds in the F.Y.2013-14 to 2015 books of account for F.Y.2016 u/s.145(3) of the IT Act, 1961. Hence, once the book results are Foodlink Services India Pvt. Ltd. 8.9 The appellant has relied on the decision rendered in the case of Ramlal Jewellers (P.) Ltd. IT Appeal No. 1600 (MUM.) of 2023, [2023] 154 taxmann.com 584 (Mumbai - Trib.). The Hon’ble Tribunal has held as under: - “Section 68 of the Income-tax Act, 1961 - Cash credit (Cash deposit in bank) - Assessment year 2016-17 - Assessee was engaged in jewellery business - During assessment proceedings, Assessing Officer noted that immediately after ization assessee had shown inflated cash sales and also made deposits in bank account which was completely abnormal as compared to earlier year and also subsequent year He, therefore, taxed cash deposits under section 68 - It was seen that assessee had maintained regular books of account which was subject to audit and had produced entire sale bills, stock register and purchases and also quantitative tally of sales and corresponding stock - Addition under section 68 on account of cash deposits could not be made simply on reason that during demonetization period, cash deposits vis-a-vis cash sales ratio Whether once, it had been established that sales representing outflow of stocks was duly accounted in books of account and there was no abnormal profit during year, then there was no justification to treat deposits made in bank account out of cash sales to be income from undisclosed sources - Held, yes Whether, therefore addition made under section 68 was to be Held, yes [Para 14] [In favour of assessee]” 8.10 The AO while not considering the cash in hand of the appellant has pointed out that though the appellant had claimed huge cash as on 08.11.2016 it has deposited cash regularly during the demonetization period i.e. the cash was de in one go but deposited during whole demonetization period regularly. In the early years also the cash sales have been made by the appellant. There is nothing on record to indicate that the books of accounts have been disturbed in the earlier y Therefore, the same have been accepted year after year. The opening stock, purchases, sales and closing stock have been accepted and no addition has been made on these grounds in the 14 to 2015-16. The AO has not rejected the audited f account for F.Y.2016-17 relevant to A.Y.2017 u/s.145(3) of the IT Act, 1961. Hence, once the book results are Foodlink Services India Pvt. Ltd. 13 ITA Nos. 4851, 4863 & 4854/MUM/2024 8.9 The appellant has relied on the decision rendered in the case of Ramlal Jewellers (P.) Ltd. IT Appeal No. 1600 (MUM.) of 2023, Trib.). The Hon’ble Cash credit (Cash Assessee-company During assessment proceedings, Assessing Officer noted that immediately after ization assessee had shown inflated cash sales and also made deposits in bank account which was completely abnormal as compared to earlier year and also subsequent year - It was seen aintained regular books of account which was subject to audit and had produced entire sale bills, stock register and purchases and also quantitative tally of sales and Addition under section 68 on account of made simply on reason that during vis cash sales ratio Whether once, it had been established that sales representing outflow of stocks was duly accounted in books of profit during year, then there was no justification to treat deposits made in bank account out of Held, yes - Whether, therefore addition made under section 68 was to be 8.10 The AO while not considering the cash in hand of the appellant has pointed out that though the appellant had claimed huge cash as on 08.11.2016 it has deposited cash regularly during the demonetization period i.e. the cash was deposited not in one go but deposited during whole demonetization period regularly. In the early years also the cash sales have been made by the appellant. There is nothing on record to indicate that the books of accounts have been disturbed in the earlier years. Therefore, the same have been accepted year after year. The opening stock, purchases, sales and closing stock have been accepted and no addition has been made on these grounds in the 16. The AO has not rejected the audited 17 relevant to A.Y.2017-18 u/s.145(3) of the IT Act, 1961. Hence, once the book results are accepted by the AO, the sale reflected in those book results cannot be doubted otherwise it amounts to double taxation. Therefore the cash ba deposits thereof in the bank account cannot be doubted. From the above facts, it is seen that the cash has been deposited by the Appellant out of the cash balance available with it which has been earned during regular c has not pointed out any discrepancy in the books of accounts. The AO has not brought out anything on record to indicate deficiency if any in the opening stock, purchases, sales, etc. 8.11 In view of the discussion in the of the case it is apparent that the AO has accepted the book results with the purchases, stock as well as the sales of the appellant. The AO failed to notice that the appellant had consistently high cash sales in all the years proportionate. The books of accounts were not rejected by the Assessing Officer and he has just concluded and conjectures that the cash sales have been inflated to cover the cash deposits during the demonetization period. In fact this ha double taxation of the amount of Rs.2,58,78,235/ sales having part of the book result. 8.12 In view of the above discussion and decision relied upon by the appellant the addition of Rs. 2,58,78,235/ account of unex 1,2,3 of appeal are allowed. 6.6 We have heard rival submissions of the parties and perused the relevant material on record. The issue in dispute is whether the amount of Rs. 2,58,78,235/ for the period from April 2016 to October 2016 assessee or not. According to the Assessing Officer the assessee has manipulated its cash sales figures for the period from April 2016 to 8/11/2016 without correspondi accounts and therefore the cash deposited of Foodlink Services India Pvt. Ltd. accepted by the AO, the sale reflected in those book results cannot be doubted otherwise it amounts to double taxation. Therefore the cash balance available as on 08/11/2016 and deposits thereof in the bank account cannot be doubted. From the above facts, it is seen that the cash has been deposited by the Appellant out of the cash balance available with it which has been earned during regular course of business. Further, the AO has not pointed out any discrepancy in the books of accounts. The AO has not brought out anything on record to indicate deficiency if any in the opening stock, purchases, sales, etc. 8.11 In view of the discussion in the preceding para and the facts of the case it is apparent that the AO has accepted the book results with the purchases, stock as well as the sales of the appellant. The AO failed to notice that the appellant had consistently high cash sales in all the years which were almost proportionate. The books of accounts were not rejected by the Assessing Officer and he has just concluded and conjectures that the cash sales have been inflated to cover the cash deposits during the demonetization period. In fact this has resulted in double taxation of the amount of Rs.2,58,78,235/-, since the sales having part of the book result. 8.12 In view of the above discussion and decision relied upon by the appellant the addition of Rs. 2,58,78,235/- made by AO on account of unexplained cash credit is hereby deleted. Ground no. 1,2,3 of appeal are allowed.” We have heard rival submissions of the parties and perused the relevant material on record. The issue in dispute is whether the 2,58,78,235/- is received in cash against the sales for the period from April 2016 to October 2016 as claimed by the ccording to the Assessing Officer the assessee has manipulated its cash sales figures for the period from April 2016 to 8/11/2016 without corresponding purchases in the books of accounts and therefore the cash deposited of ₹2,58, Foodlink Services India Pvt. Ltd. 14 ITA Nos. 4851, 4863 & 4854/MUM/2024 accepted by the AO, the sale reflected in those book results cannot be doubted otherwise it amounts to double taxation. lance available as on 08/11/2016 and deposits thereof in the bank account cannot be doubted. From the above facts, it is seen that the cash has been deposited by the Appellant out of the cash balance available with it which has ourse of business. Further, the AO has not pointed out any discrepancy in the books of accounts. The AO has not brought out anything on record to indicate deficiency if any in the opening stock, purchases, sales, etc. preceding para and the facts of the case it is apparent that the AO has accepted the book results with the purchases, stock as well as the sales of the appellant. The AO failed to notice that the appellant had which were almost proportionate. The books of accounts were not rejected by the Assessing Officer and he has just concluded and conjectures that the cash sales have been inflated to cover the cash deposits s resulted in , since the 8.12 In view of the above discussion and decision relied upon by made by AO on plained cash credit is hereby deleted. Ground no. We have heard rival submissions of the parties and perused the relevant material on record. The issue in dispute is whether the cash against the sales as claimed by the ccording to the Assessing Officer the assessee has manipulated its cash sales figures for the period from April 2016 to ng purchases in the books of 2,58,78,235/- was unexplained and undisclosed money of the assessee, liable to be taxed under section 68 of the A we find that the Ld. CIT(A) has Assessing Officer in relation to holding the cash deposit as unexplained cash credit. The finding of the learned Assessing Officer that assessee manipulated the cash sales by way of delayed filing of VAT and service tax retu rejected by the Ld. CIT(A) observing that no one in the country had knowledge about the demonetisation which happened on the evening of 08/11/2016 and therefore it could not be said that the assessee delayed filing of the VAT and manipulate the sales. Further the learned CIT(A) observed that every month the service tax payment remains similar for most of the months of the financial year 2016 year. The Ld. CIT(A) has further ex activity of the assessee was such that it was having more volume in the month of the November and therefore the assessee needed to maintain the cash balance. The Ld. CIT(A) the cash sales during the year und in line with the cash sales of the preceding assessment years, therefore he rejected the finding of the Assessing Officer that cash sales of the assessee had increased drastically during the year under consideration. The L accounts of the assessee for a year under consideration Foodlink Services India Pvt. Ltd. unexplained and undisclosed money of the assessee, liable to be taxed under section 68 of the Act as unexplained cash credit. But we find that the Ld. CIT(A) has rebutted all the finding of the Assessing Officer in relation to holding the cash deposit as unexplained cash credit. The finding of the learned Assessing Officer that assessee manipulated the cash sales by way of delayed filing of VAT and service tax returns and payments, has been rejected by the Ld. CIT(A) observing that no one in the country had knowledge about the demonetisation which happened on the evening of 08/11/2016 and therefore it could not be said that the assessee delayed filing of the VAT and service tax returns to the sales. Further the learned CIT(A) observed that service tax payment remains similar for most of the months of the financial year 2016-17 i.e. the current assessment year. The Ld. CIT(A) has further explained that the business activity of the assessee was such that it was having more volume in the month of the November and therefore the assessee needed to maintain the cash balance. The Ld. CIT(A) has further noted that the cash sales during the year under consideration, is more or less in line with the cash sales of the preceding assessment years, therefore he rejected the finding of the Assessing Officer that cash sales of the assessee had increased drastically during the year under consideration. The Ld. CIT(A) has further noted that books of accounts of the assessee for a year under consideration Foodlink Services India Pvt. Ltd. 15 ITA Nos. 4851, 4863 & 4854/MUM/2024 unexplained and undisclosed money of the assessee, liable to be ct as unexplained cash credit. But all the finding of the Assessing Officer in relation to holding the cash deposit as unexplained cash credit. The finding of the learned Assessing Officer that assessee manipulated the cash sales by way of delayed rns and payments, has been rejected by the Ld. CIT(A) observing that no one in the country had knowledge about the demonetisation which happened on the evening of 08/11/2016 and therefore it could not be said that the service tax returns to the sales. Further the learned CIT(A) observed that service tax payment remains similar for most of the 17 i.e. the current assessment plained that the business activity of the assessee was such that it was having more volume in the month of the November and therefore the assessee needed to further noted that er consideration, is more or less in line with the cash sales of the preceding assessment years, therefore he rejected the finding of the Assessing Officer that cash sales of the assessee had increased drastically during the year further noted that books of accounts of the assessee for a year under consideration has not been rejected by the Assessing Officer and the cash sales and a stock registers have been accepted by the Assessing Officer and held that in such circ is accepting the cash sales recorded in the books of accounts, but on the other hand making addition for the same as unexplained cash credit is not justified. We agree with the contention of the Ld. CIT(A) that this approach of the Assessing Officer has resulted into double addition in the hands of the assessee. The learned counsel for the assessee relied on the decision of the coordinate bench of the tribunal in the case of 737/Mum/2014 for AY 2017 under: 6. The explanation in relation to the cash deposit of of the assessee has not been found to be satisfactory by the Assessing Officer and therefore he treated the credit in boo corresponding to cash deposit of credit in terms of section 68 of the Act. Therefore, the issue in dispute precipitated before us is whether the cash sales shown by the assessee in its books of accounts on 28 34,50,000/-to explain the source of the cash deposits are genuine or not. 7. We find that firstly, the Assessing Officer held the cash sales as source of cash deposits as unexplained for the reason that all the cash sales of ₹ 34,50,000/ 28/10/2016 i.e. one date and no other cash sales are appearing in the books of accounts either prior or after this date, which according to the Assessing Officer was not believable in normal course of con business. The learned counsel for assessee however has explained that the firm was constituted only in the preceding assessment year, having sales of ₹ 136.19 lakhs and no long history of sales for comparison with the sales for the year under consi explained that those cash sales of 28/10/2016 in view of the ‘Diwali’ festival. He also explained that said cash sales of Rs. 34,50, 000/ Foodlink Services India Pvt. Ltd. been rejected by the Assessing Officer and the cash sales and a stock registers have been accepted by the Assessing Officer and in such circumstances, on one side the Assessing Officer is accepting the cash sales recorded in the books of accounts, but on the other hand making addition for the same as unexplained cash credit is not justified. We agree with the contention of the Ld. this approach of the Assessing Officer has resulted into double addition in the hands of the assessee. The learned counsel for the assessee relied on the decision of the coordinate bench of the tribunal in the case of Bina Goenka The Jewellers LLP in ITA N 737/Mum/2014 for AY 2017-18, wherein the Tribunal held as The explanation in relation to the cash deposit of ₹ 34,50,000/ of the assessee has not been found to be satisfactory by the Assessing Officer and therefore he treated the credit in books of accounts corresponding to cash deposit of ₹ 34,50,000/-as unexplained cash credit in terms of section 68 of the Act. Therefore, the issue in dispute precipitated before us is whether the cash sales shown by the assessee in its books of accounts on 28/10/2016, amounting to to explain the source of the cash deposits are genuine or We find that firstly, the Assessing Officer held the cash sales as source of cash deposits as unexplained for the reason that all the cash 50,000/-has been booked in the books of accounts on 28/10/2016 i.e. one date and no other cash sales are appearing in the books of accounts either prior or after this date, which according to the Assessing Officer was not believable in normal course of con business. The learned counsel for assessee however has explained that the firm was constituted only in the preceding assessment year, ₹ 136.19 lakhs and no long history of sales for comparison with the sales for the year under consideration. He further explained that those cash sales of ₹ 34,50,000/-was made on 28/10/2016 in view of the ‘Diwali’ festival. He also explained that said cash sales of Rs. 34,50, 000/-constituted 1.74% of the total Foodlink Services India Pvt. Ltd. 16 ITA Nos. 4851, 4863 & 4854/MUM/2024 been rejected by the Assessing Officer and the cash sales and a stock registers have been accepted by the Assessing Officer and umstances, on one side the Assessing Officer is accepting the cash sales recorded in the books of accounts, but on the other hand making addition for the same as unexplained cash credit is not justified. We agree with the contention of the Ld. this approach of the Assessing Officer has resulted into double addition in the hands of the assessee. The learned counsel for the assessee relied on the decision of the coordinate bench of the Bina Goenka The Jewellers LLP in ITA No. ribunal held as 34,50,000/- of the assessee has not been found to be satisfactory by the Assessing ks of accounts as unexplained cash credit in terms of section 68 of the Act. Therefore, the issue in dispute precipitated before us is whether the cash sales shown by the /10/2016, amounting to ₹ to explain the source of the cash deposits are genuine or We find that firstly, the Assessing Officer held the cash sales as source of cash deposits as unexplained for the reason that all the cash has been booked in the books of accounts on 28/10/2016 i.e. one date and no other cash sales are appearing in the books of accounts either prior or after this date, which according to the Assessing Officer was not believable in normal course of conduct of business. The learned counsel for assessee however has explained that the firm was constituted only in the preceding assessment year, ₹ 136.19 lakhs and no long history of sales for deration. He further was made on 28/10/2016 in view of the ‘Diwali’ festival. He also explained that constituted 1.74% of the total turnover of ₹ 1978.87 lakhs during the ye counsel for assessee cash sales being included in the total turnover of the assessee for the year under consideration, sales offered to value added tax (VAT) as per the invoices issued and the assessee paid tax liability and no loss has been caused to the coffers of the revenue either VAT or Income 34,50,000/- stands explained. 7.1 Secondly, the Assessing Officer noticed that all the cash sales were below ₹ 2 lakhs but aggregate of whi lakhs, the assessee has not complied to Rule 114E of Income 1962, according to which the assessee was required to report cash transactions exceeding the specified sum of goods or services. However Direct Taxes (CBDT), circular dated 22/12/2016 and submitted that said limit was applicable for each transaction and not on aggregate cash sales, and therefore, there was no requirement for reporting such cash sales under rule 115E of Income tax rules,1962. 7.2 Thirdly, the learned counsel for the assessee submitted that all the comparative details of cash deposit and cash sales, copy of cash memo in respect of cash sales, ledger account of purchases corresponding to the cash sales, stock of finished goods for the entire previous year corresponding to the assessment year under consideration, copy of cash book was filed before the lower authorities, but the Ld. CIT(A) recorded incorrectly that no cash book for the was filed and he sustained the addition for this reason. 7.3 In view of observation of the facts in the case of the assessee, we are of the opinion that the only basis for treating the cash deposit as unexplained cash credit by the Assessing Office recorded in the books of accounts immediately prior to the demonetization period as compared to no cash sales either before or after that period. Therefore the addition has been mainly on the suspicion that cash sales are bogus or non because no other cash sales were recorded in the previous year, it cannot be presumed that such cash sales made in the year under consideration are bogus. The Assessing Officer has ignored the fact that cash sales are out of stock g assessee through purchase invoices, which were duly produced before the Assessing Officer, but same were not doubted by him. The learned DR also could not controvert the copy of purchases corresponding to the sales and stock register, filed by the assessee in the paper book. Probably, the Assessing Officer suspected on the cash sales for the reason that same are below however in our opinion in view of the festival season of ‘Diwali’, suc cash sales cannot be ruled out unless proved to be otherwise. It is for Foodlink Services India Pvt. Ltd. ₹ 1978.87 lakhs during the year. According to the learned counsel for assessee cash sales being included in the total turnover of the assessee for the year under consideration, sales offered to value added tax (VAT) as per the invoices issued and the assessee paid tax loss has been caused to the coffers of the revenue either VAT or Income-tax, hence, the source of the deposit of stands explained. Secondly, the Assessing Officer noticed that all the cash sales ₹ 2 lakhs but aggregate of which being more than lakhs, the assessee has not complied to Rule 114E of Income- 1962, according to which the assessee was required to report cash transactions exceeding the specified sum of ₹ 2 lakh for sale of the goods or services. However the assessee referred to Central Board of Direct Taxes (CBDT), circular dated 22/12/2016 and submitted that said limit was applicable for each transaction and not on aggregate cash sales, and therefore, there was no requirement for reporting such s under rule 115E of Income tax rules,1962. Thirdly, the learned counsel for the assessee submitted that all the comparative details of cash deposit and cash sales, copy of cash memo in respect of cash sales, ledger account of purchases g to the cash sales, stock of finished goods for the entire previous year corresponding to the assessment year under consideration, copy of cash book was filed before the lower authorities, but the Ld. CIT(A) recorded incorrectly that no cash book for the was filed and he sustained the addition for this reason. In view of observation of the facts in the case of the assessee, we are of the opinion that the only basis for treating the cash deposit as unexplained cash credit by the Assessing Officer is cash sales recorded in the books of accounts immediately prior to the demonetization period as compared to no cash sales either before or after that period. Therefore the addition has been mainly on the suspicion that cash sales are bogus or non-genuine. In our opinion just because no other cash sales were recorded in the previous year, it cannot be presumed that such cash sales made in the year under consideration are bogus. The Assessing Officer has ignored the fact that cash sales are out of stock genuinely held and acquired by the assessee through purchase invoices, which were duly produced before the Assessing Officer, but same were not doubted by him. The learned DR also could not controvert the copy of purchases corresponding to ck register, filed by the assessee in the paper book. Probably, the Assessing Officer suspected on the cash sales for the reason that same are below ₹ 2 lakhs and made on the same date, however in our opinion in view of the festival season of ‘Diwali’, suc cash sales cannot be ruled out unless proved to be otherwise. It is for Foodlink Services India Pvt. Ltd. 17 ITA Nos. 4851, 4863 & 4854/MUM/2024 ar. According to the learned counsel for assessee cash sales being included in the total turnover of the assessee for the year under consideration, sales offered to value- added tax (VAT) as per the invoices issued and the assessee paid tax loss has been caused to the coffers of the revenue tax, hence, the source of the deposit of ₹ Secondly, the Assessing Officer noticed that all the cash sales ch being more than ₹ 2 lakhs, the assessee has not complied to Rule 114E of Income-tax rules, 1962, according to which the assessee was required to report cash ₹ 2 lakh for sale of the the assessee referred to Central Board of Direct Taxes (CBDT), circular dated 22/12/2016 and submitted that said limit was applicable for each transaction and not on aggregate cash sales, and therefore, there was no requirement for reporting such Thirdly, the learned counsel for the assessee submitted that all the comparative details of cash deposit and cash sales, copy of cash memo in respect of cash sales, ledger account of purchases g to the cash sales, stock of finished goods for the entire previous year corresponding to the assessment year under consideration, copy of cash book was filed before the lower authorities, but the Ld. CIT(A) recorded incorrectly that no cash book for the period In view of observation of the facts in the case of the assessee, we are of the opinion that the only basis for treating the cash deposit r is cash sales recorded in the books of accounts immediately prior to the demonetization period as compared to no cash sales either before or after that period. Therefore the addition has been mainly on the ne. In our opinion just because no other cash sales were recorded in the previous year, it cannot be presumed that such cash sales made in the year under consideration are bogus. The Assessing Officer has ignored the fact enuinely held and acquired by the assessee through purchase invoices, which were duly produced before the Assessing Officer, but same were not doubted by him. The learned DR also could not controvert the copy of purchases corresponding to ck register, filed by the assessee in the paper book. Probably, the Assessing Officer suspected on the cash sales for the ₹ 2 lakhs and made on the same date, however in our opinion in view of the festival season of ‘Diwali’, such cash sales cannot be ruled out unless proved to be otherwise. It is for the Assessing Officer to bring on record evidences to support his allegations. The finding of the Assessing Officer is based on the merely suspicion and no documentary evidence have by the Assessing Officer to establish that such cash sales were not genuine. In our opinion, suspicion, howsoever strong, cannot take place of the evidences. Similar finding has been given by the Coordinate Bench of Tribunal in the c ACIT in .ITA No. 1689/Del/2022, which is reproduced as under: “10. We find that from perusal of the records, there is no evidence to prove that the „amounts sent actually amounts sent by assessee company in hawala route which had ultimately found its way in the form of share capital and share premium under FDI route. The revenue had completely addressed this issue and made an addition pur and surmise without any basis thereby making the addition totally unsustainable in the eyes of law. On the contrary, the assessee had stated that LGF had sent 19500000 USD from Cyprus and after deduction of LC charges and other overseas bank charges , the assessee could ultimately receive only 18621973.93 USD equivalent to Rs 100 crores in India under FDI route as share capital and share premium. In support of this, the assessee had duly provided all the necessary documents as listed above. the stand that it had not sent any monies abroad in hawala route. The assessee cannot be asked to prove the negative. It is for the revenue to prove the same with cogent evidences, which is not done in the proceeded to make the addition on suspicion. It is trite law that suspicion howsoever strong would not partake the character of legal evidence and hence a greater onus is casted on the revenue to bring on record cogent evidences to justify its suspicion, which is conspicuously absent in the instant case. The only material that is relied upon by the revenue is the hard disk seized during search which only contained Page | 9 the details of „amounts sent the said material even suggested that the amounts were sent by assessee company in illegal route which in turn had surfaced back in the form of share capital and premium under FDI route from Cyprus. Though t would go in favour of the revenue, it cannot be brushed aside that the said presumption is a rebuttable presumption and assessee had duly discharged its onus on the sa the present assessee herein is an assessee proceeded 153C of the Act and hence it is all the more necessary for the revenue to arrive at the satisfaction that income or materials or Foodlink Services India Pvt. Ltd. the Assessing Officer to bring on record evidences to support his allegations. The finding of the Assessing Officer is based on the merely suspicion and no documentary evidence have been brought on record by the Assessing Officer to establish that such cash sales were not genuine. In our opinion, suspicion, howsoever strong, cannot take place of the evidences. Similar finding has been given by the Coordinate Bench of Tribunal in the case of Alchemist Touchnology Vs ACIT in .ITA No. 1689/Del/2022, which is reproduced as under: 10. We find that from perusal of the records, there is no evidence to prove that the „amounts sent‟ shown in the hard disk is actually amounts sent by assessee company in hawala route which had ultimately found its way in the form of share capital and share premium under FDI route. The revenue had completely addressed this issue and made an addition purely on suspicion and surmise without any basis thereby making the addition totally unsustainable in the eyes of law. On the contrary, the assessee had stated that LGF had sent 19500000 USD from Cyprus and after deduction of LC charges and other overseas nk charges , the assessee could ultimately receive only 18621973.93 USD equivalent to Rs 100 crores in India under FDI route as share capital and share premium. In support of this, the assessee had duly provided all the necessary documents as The assessee from the inception had always taken the stand that it had not sent any monies abroad in hawala route. The assessee cannot be asked to prove the negative. It is for the revenue to prove the same with cogent evidences, which is not done in the instant case. We find that the revenue had merely proceeded to make the addition on suspicion. It is trite law that suspicion howsoever strong would not partake the character of legal evidence and hence a greater onus is casted on the revenue ecord cogent evidences to justify its suspicion, which is conspicuously absent in the instant case. The only material that is relied upon by the revenue is the hard disk seized during search which only contained Page | 9 Alchemist Touchnology f „amounts sent‟ and „amounts received the said material even suggested that the amounts were sent by assessee company in illegal route which in turn had surfaced back in the form of share capital and premium under FDI route from Cyprus. Though the presumption u/s 292C would go in favour of the revenue, it cannot be brushed aside that the said presumption is a rebuttable presumption and assessee had duly discharged its onus on the same. Moreover, the present assessee herein is an assessee proceeded of the Act and hence it is all the more necessary for the revenue to arrive at the satisfaction that income or materials or Foodlink Services India Pvt. Ltd. 18 ITA Nos. 4851, 4863 & 4854/MUM/2024 the Assessing Officer to bring on record evidences to support his allegations. The finding of the Assessing Officer is based on the merely been brought on record by the Assessing Officer to establish that such cash sales were not genuine. In our opinion, suspicion, howsoever strong, cannot take place of the evidences. Similar finding has been given by the ase of Alchemist Touchnology Vs ACIT in .ITA No. 1689/Del/2022, which is reproduced as under: 10. We find that from perusal of the records, there is no evidence shown in the hard disk is actually amounts sent by assessee company in hawala route which had ultimately found its way in the form of share capital and share premium under FDI route. The revenue had completely ely on suspicion and surmise without any basis thereby making the addition totally unsustainable in the eyes of law. On the contrary, the assessee had stated that LGF had sent 19500000 USD from Cyprus and after deduction of LC charges and other overseas nk charges , the assessee could ultimately receive only 18621973.93 USD equivalent to Rs 100 crores in India under FDI route as share capital and share premium. In support of this, the assessee had duly provided all the necessary documents as The assessee from the inception had always taken the stand that it had not sent any monies abroad in hawala route. The assessee cannot be asked to prove the negative. It is for the revenue to prove the same with cogent evidences, which is instant case. We find that the revenue had merely proceeded to make the addition on suspicion. It is trite law that suspicion howsoever strong would not partake the character of legal evidence and hence a greater onus is casted on the revenue ecord cogent evidences to justify its suspicion, which is conspicuously absent in the instant case. The only material that is relied upon by the revenue is the hard disk seized during Alchemist Touchnology and „amounts received‟. Nowhere the said material even suggested that the amounts were sent by assessee company in illegal route which in turn had surfaced back in the form of share capital and premium under FDI route of the Act would go in favour of the revenue, it cannot be brushed aside that the said presumption is a rebuttable presumption and me. Moreover, the present assessee herein is an assessee proceeded u/s of the Act and hence it is all the more necessary for the revenue to arrive at the satisfaction that income or materials or documents does not belong or pertain to the searched person and indeed belongs to third person (i.e 153C assessee). Viewed from this angle, it could be safely concluded that presumption 292C of the Ac 153A of the Act and not for the assessee 7.4 In view of facts of instant case, coordinate bench (supra), we reject the finding of the lower authorities that cash sales of the assessee are not genuine. Once the cash sales are accepted to be genuine, the cash received thereon and later deposited into bank ac bank account satisfactorily explain the credit entry in the books of accounts and therefore no addition in terms of section 68 of the Act is warranted for corresponding cash deposit of of the assessee. The ground Nos. 2 to 4 of the appeal of the assessee accordingly allowed. 6.7 In view of the aforesaid discussion, we are of considered opinion that the order of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find accordingly, we uphold the same. The grounds of the appeal of the revenue are accordingly dismissed. 7. Now, we take up, the appeal of the year 2017-18 arising from rectification Assessing Officer rectifying the quantum of additio section 68 of the Act while passing the assessment order under section 143(3) of the reproduced as under: 1. Whether on the facts and in the circumstances in law, the La, CIT(A) failed to appreciate that an addition of Rs. 2,58,78,235/ dated 30.12.2019 u/s 68 of the Act, 1961 for the reasons discussed in the said order, whereas the addition was the tune of Rs. 2,58,78,235/ being assessed lower by Rs. 21,81,306/ Foodlink Services India Pvt. Ltd. cuments does not belong or pertain to the searched person and indeed belongs to third person (i.e 153C assessee). Viewed from this angle, it could be safely concluded that presumption of the Act would apply only to the person proceeded of the Act and not for the assessee u/s 153C of the Act. In view of facts of instant case, respectfully, following the coordinate bench (supra), we reject the finding of the lower authorities that cash sales of the assessee are not genuine. Once the cash sales are accepted to be genuine, the cash received thereon and later deposited into bank account by crediting the cash and debiting the bank account satisfactorily explain the credit entry in the books of accounts and therefore no addition in terms of section 68 of the Act is warranted for corresponding cash deposit of ₹ 34,50,000/-in the case f the assessee. The ground Nos. 2 to 4 of the appeal of the assessee accordingly allowed.” In view of the aforesaid discussion, we are of considered opinion that the order of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any infirmity in the same, we uphold the same. The grounds of the appeal of the accordingly dismissed. we take up, the appeal of the Revenue 18 arising from rectification order passed by the ing Officer rectifying the quantum of additio ct while passing the assessment order under section 143(3) of the Act. The grounds raised by the reproduced as under: 1. Whether on the facts and in the circumstances of the case and in law, the La, CIT(A) failed to appreciate that an addition of Rs. 2,58,78,235/- was required to be made in the order u/s 143(3) dated 30.12.2019 u/s 68 of the Act, 1961 for the reasons discussed in the said order, whereas the addition was the tune of Rs. 2,58,78,235/- only resulting in the total income being assessed lower by Rs. 21,81,306/-? Foodlink Services India Pvt. Ltd. 19 ITA Nos. 4851, 4863 & 4854/MUM/2024 cuments does not belong or pertain to the searched person and indeed belongs to third person (i.e 153C assessee). Viewed from this angle, it could be safely concluded that presumption u/s t would apply only to the person proceeded u/s of the Act.” respectfully, following the coordinate bench (supra), we reject the finding of the lower authorities that cash sales of the assessee are not genuine. Once the cash sales are accepted to be genuine, the cash received thereon and later count by crediting the cash and debiting the bank account satisfactorily explain the credit entry in the books of accounts and therefore no addition in terms of section 68 of the Act is in the case f the assessee. The ground Nos. 2 to 4 of the appeal of the assessee In view of the aforesaid discussion, we are of considered opinion that the order of the Ld. CIT(A) on the issue in dispute is any infirmity in the same, we uphold the same. The grounds of the appeal of the Revenue for assessment passed by the ing Officer rectifying the quantum of addition made under ct while passing the assessment order under . The grounds raised by the Revenue are of the case and in law, the La, CIT(A) failed to appreciate that an addition of Rs. was required to be made in the order u/s 143(3) dated 30.12.2019 u/s 68 of the Act, 1961 for the reasons discussed in the said order, whereas the addition was made to only resulting in the total income 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was correct in law in holding that the addition of Rs. 21,81,306/- made vide order u/s 154 dated 26.03.2024 also stands deleted on the ground that the additions made u/s 68 in the order u/s 143(3) dated 30.12.2019 has been directed to be deleted for detailed reasons in the appellate order against the order u/s 143(3)P 3. Whether on the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) 16.07.2024 in the appeal against the order u/s 143(3), deleting the addition made u/s 68 of Rs. 2,58,78,235/ discharge the onus to prove the genuineness of the source of the cash deposit in its accounts and, consequently, the addition of Rs. 21,86,306/ made u/s 68 is also required to be confirmed? 7.1 We have heard riv relevant material on record. the Assessing Officer has merely rectified the and increased the amount of addition under s amount of Rs.21,81, enhancement of the addition in view of the additi 143(3) of the Act deleted by him. The relevant finding of the Ld. CIT(A) is reproduced as under: “12. The appellant has filed appeal vide 17/10361725 on 20.04.2024 against order u/s 154 of the Act dated 26.03.2024 for A.Y. 2017 the addition of Rs. 2,58,78,235/ of the Act dated 30.12.2019 on acco The AO has enhanced the addition of Rs. 2,58,78,235/ 21,81,306/- vide order u/s 154 of the Act dated 26.03.2024 stating that there is a mistake apparent on record while calculating the total cash deposit made by appe The cash deposited by the appellant in specified bank notes was of Rs. 3,23,84,000/ cash in hand balance of Rs. 43,24,459/ Foodlink Services India Pvt. Ltd. 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was correct in law in holding that the addition of Rs. made vide order u/s 154 dated 26.03.2024 also stands deleted on the ground that the additions made u/s 68 in the order u/s 143(3) dated 30.12.2019 has been directed to be deleted for detailed reasons in the appellate order against the order u/s 143(3)P 3. Whether on the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) 16.07.2024 in the appeal against the order u/s 143(3), deleting the addition made u/s 68 of Rs. 2,58,78,235/- is erroneous as the assessee has failed to scharge the onus to prove the genuineness of the source of the cash deposit in its accounts and, consequently, the addition of Rs. 21,86,306/- being the computation mistake in the addition made u/s 68 is also required to be confirmed? have heard rival submission of the parties and perused the relevant material on record. We find that in the rectification the Assessing Officer has merely rectified the arithmetical the amount of addition under sections 68 by the Rs.21,81,306/-. The Ld. CIT(A) has deleted the said enhancement of the addition in view of the addition under section ct deleted by him. The relevant finding of the Ld. CIT(A) is reproduced as under: 12. The appellant has filed appeal vide appeal no. NFAC/2016 17/10361725 on 20.04.2024 against order u/s 154 of the Act dated 26.03.2024 for A.Y. 2017-18. The issue in this appeal is related to the addition of Rs. 2,58,78,235/- made by AO vide order u/s 143(3) of the Act dated 30.12.2019 on account of unexplained cash credit. The AO has enhanced the addition of Rs. 2,58,78,235/ vide order u/s 154 of the Act dated 26.03.2024 stating that there is a mistake apparent on record while calculating the total cash deposit made by appellant during the demonetization period. The cash deposited by the appellant in specified bank notes was of Rs. 3,23,84,000/- and as on 01.04.2016 the appellant was having cash in hand balance of Rs. 43,24,459/-. The AO while giving credit Foodlink Services India Pvt. Ltd. 20 ITA Nos. 4851, 4863 & 4854/MUM/2024 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was correct in law in holding that the addition of Rs. made vide order u/s 154 dated 26.03.2024 also stands deleted on the ground that the additions made u/s 68 in the order u/s 143(3) dated 30.12.2019 has been directed to be deleted for detailed reasons in the appellate order against the 3. Whether on the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) 16.07.2024 in the appeal against the order u/s 143(3), deleting the addition made u/s 68 is erroneous as the assessee has failed to scharge the onus to prove the genuineness of the source of the cash deposit in its accounts and, consequently, the addition of being the computation mistake in the addition al submission of the parties and perused the find that in the rectification order, arithmetical mistake ections 68 by the . The Ld. CIT(A) has deleted the said on under section ct deleted by him. The relevant finding of the Ld. appeal no. NFAC/2016- 17/10361725 on 20.04.2024 against order u/s 154 of the Act dated 18. The issue in this appeal is related to made by AO vide order u/s 143(3) unt of unexplained cash credit. The AO has enhanced the addition of Rs. 2,58,78,235/- by Rs. vide order u/s 154 of the Act dated 26.03.2024 stating that there is a mistake apparent on record while calculating the total llant during the demonetization period. The cash deposited by the appellant in specified bank notes was of and as on 01.04.2016 the appellant was having . The AO while giving credit to the cash in ha Rs. 2,58,78,235/ held that incorrect addition was made. Therefore, the mistake in apparent on record was rectified u/s.154 of the IT Act and addition of Rs.21,81,306/ 13. The rectification order, submission of the appellant and the facts of the case have been carefully considered. The addition made by AO in order u/s 154 of the Act dated 26.03.2024 is part of the addition of Rs.2,58,78,235/ 30.12.2019. The facts of the case being the same as quantum addition made in the order dated 30.12.2019 for A.Y.2017 appeal is taken up along with the quantum addition. After detailed discussion in the foregoing par u/s 68 of the Act on account of unexplained cash credit has been deleted vide para no. 8.12. In view of the detailed discussion made in the above order, addition made vide order u/s 154 of the Act 26.03.2024 of Rs. 21,8 1,2 and 3 of appeal filed in appeal no. NFAC/2016 allowed.” 7.2 We are of the opinion that since the main addition made in the assessment order under section 143(3) of the A by the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A) in deleting the rectified addition for the cash deposits. Th grounds of the appeal of the R 8. Now, we take up the appeal of the R year 2018-19. The grounds raised by the reproduced as under: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,44,64,764/ the Act of the Income Foodlink Services India Pvt. Ltd. to the cash in hand balance of Rs. 43,24,459/- made the addition of Rs. 2,58,78,235/- instead of Rs. 2,80,59,541/-. Therefore, the AO held that incorrect addition was made. Therefore, the mistake in apparent on record was rectified u/s.154 of the IT Act and addition 21,81,306/- was made. 13. The rectification order, submission of the appellant and the facts of the case have been carefully considered. The addition made by AO in order u/s 154 of the Act dated 26.03.2024 is part of the addition of Rs.2,58,78,235/- made in A.Y.2017-18 vide order dated 30.12.2019. The facts of the case being the same as quantum addition made in the order dated 30.12.2019 for A.Y.2017 appeal is taken up along with the quantum addition. After detailed discussion in the foregoing paras, the addition of Rs.2,58,78,235/ u/s 68 of the Act on account of unexplained cash credit has been deleted vide para no. 8.12. In view of the detailed discussion made in the above order, addition made vide order u/s 154 of the Act 26.03.2024 of Rs. 21,81,306/- also stands deleted. The ground no. 1,2 and 3 of appeal filed in appeal no. NFAC/2016-17/10361725 are are of the opinion that since the main addition made in the er under section 143(3) of the Act has been deleted the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A) in deleting the rectified addition for the cash deposits. Th grounds of the appeal of the Revenue are accordingly dismissed. up the appeal of the Revenue for asse 19. The grounds raised by the Revenue in its appeal are reproduced as under: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,44,64,764/ - made by the AO on account of cash credit u/s 68 of the Act of the Income-tax Act, 1961. Foodlink Services India Pvt. Ltd. 21 ITA Nos. 4851, 4863 & 4854/MUM/2024 made the addition of . Therefore, the AO held that incorrect addition was made. Therefore, the mistake in apparent on record was rectified u/s.154 of the IT Act and addition 13. The rectification order, submission of the appellant and the facts of the case have been carefully considered. The addition made by AO in order u/s 154 of the Act dated 26.03.2024 is part of the addition 18 vide order dated 30.12.2019. The facts of the case being the same as quantum addition made in the order dated 30.12.2019 for A.Y.2017-18, this appeal is taken up along with the quantum addition. After detailed as, the addition of Rs.2,58,78,235/- u/s 68 of the Act on account of unexplained cash credit has been deleted vide para no. 8.12. In view of the detailed discussion made in the above order, addition made vide order u/s 154 of the Act also stands deleted. The ground no. 17/10361725 are are of the opinion that since the main addition made in the ct has been deleted the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A) in deleting the rectified addition for the cash deposits. The accordingly dismissed. evenue for assessment in its appeal are 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. AO on account of cash credit u/s 68 of 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee failed to discharge the onus to prove the g Share Premium received from 10 parties who did not comply to the notices issued u/s 133(6) of the Act. 3. Whether on the facts and in the circumstances of the case and in law, the Id CIT(A) has erred in deleting the disallowance 54,63,632/- made on account of disallowance of rent expenses u/s 40(a)(ia) on the basis of additional evidences which were not submitted before the assessing officer during the assessment proceedings despite multiple opportunities given to the asse 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the additional evidences ignoring the fact that the assessee has not claimed any sufficient cause that may have prevented him from filing the assessment procedure. 5. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 8.1 The ground No. ₹10,44,64,764/-deleted by the Ld. CIT(A) which was made by the Assessing Officer treating the share capital including share premium received from 14 parties as unexplained cash credit in terms of section 68 of the 8.2 Briefly stated facts qua the issue in dispu the year under consi equity shares to 67 shareholders and received aggregate amount of ₹79,10,06,636/- (₹ ₹78,85,26,46/- towards security premium). The shar received through a Portfolio Management Company (PMC) named as Foodlink Services India Pvt. Ltd. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee failed to discharge the onus to prove the genuineness of source of the Share Premium received from 10 parties who did not comply to the notices issued u/s 133(6) of the Act. 3. Whether on the facts and in the circumstances of the case and in law, the Id CIT(A) has erred in deleting the disallowance made on account of disallowance of rent expenses u/s 40(a)(ia) on the basis of additional evidences which were not submitted before the assessing officer during the assessment proceedings despite multiple opportunities given to the asse 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the additional evidences ignoring the fact that the assessee has not claimed any sufficient cause that may have prevented him from filing the evidence during the assessment procedure. 5. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. No. 1 and 2 of the appeal relate deleted by the Ld. CIT(A) which was made by the Assessing Officer treating the share capital including share premium received from 14 parties as unexplained cash credit in terms of section 68 of the Act. Briefly stated facts qua the issue in dispute are that during the year under consideration the assessee issued 2,43, equity shares to 67 shareholders and received aggregate amount of 24,73,790/- towards share capital and towards security premium). The shar received through a Portfolio Management Company (PMC) named as Foodlink Services India Pvt. Ltd. 22 ITA Nos. 4851, 4863 & 4854/MUM/2024 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee enuineness of source of the Share Premium received from 10 parties who did not comply to the 3. Whether on the facts and in the circumstances of the case and in law, the Id CIT(A) has erred in deleting the disallowance of Rs. made on account of disallowance of rent expenses u/s 40(a)(ia) on the basis of additional evidences which were not submitted before the assessing officer during the assessment proceedings despite multiple opportunities given to the assessee. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the additional evidences ignoring the fact that the assessee has not claimed any sufficient the evidence during 5. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. and 2 of the appeal relate to addition of deleted by the Ld. CIT(A) which was made by the Assessing Officer treating the share capital including share premium received from 14 parties as unexplained cash credit in te are that during deration the assessee issued 2,43,379 No. of equity shares to 67 shareholders and received aggregate amount of towards share capital and towards security premium). The share capital was received through a Portfolio Management Company (PMC) named as Alpha Capital Advisors Private Limited wherein the shareholders had given the irrevocable manage their investment. Accordingly, the PMC en agreement dated 09/06/2017 with the assessee on behalf of all the 67 shareholders and pursuant to 67 shareholders transferred their money from their account to the PMC’s bank account assessee’s bank accou assessee filed details of shareholders along with their documents supporting the three ingredients under section 68 of the A reproduced on page 17 para 3.1.3 of the order of ld CIT(A). ready reference, said list is reproduced as under: 3.1.3 In addition to the above, the Appellant filed following documents on also:  Confirmation from the book]  ITR Financial statement of few shareholders (refer page 289 369 of paper book]  Copy of PAS 3 filed with Ministry of Corporate Affairs towards issue of Share Capital [r  Copy of Board Resolutions of issue of share capital [refer page 415  PMS Registration Certificate of Alpha Capital Advisors Pvt. Ltd and Certificate of incorporation change in name refer page 437-439 of paper book]  Submission of Disclosu wherein it has been categorically stated that the PMC is making investment in Appellant Company. The said disclosure Foodlink Services India Pvt. Ltd. Alpha Capital Advisors Private Limited wherein the shareholders irrevocable power of attorney to the PMC to make and manage their investment. Accordingly, the PMC en agreement dated 09/06/2017 with the assessee on behalf of all the 67 shareholders and pursuant to which shares were issued. All the 67 shareholders transferred their money from their account to the PMC’s bank account, who in turn transferred the funds to the assessee’s bank account. During the assessment proce assessee filed details of shareholders along with their documents supporting the three ingredients required for discharging onus under section 68 of the Act. A list of said documents have been reproduced on page 17 para 3.1.3 of the order of ld CIT(A). said list is reproduced as under: 3.1.3 In addition to the above, the Appellant filed following documents on also: Confirmation from the 11 shareholders [refer point 14 of paper ITR Financial statement of few shareholders (refer page 289 369 of paper book] Copy of PAS 3 filed with Ministry of Corporate Affairs towards issue of Share Capital [refer page 370-414 of paper book] Copy of Board Resolutions of the Appellant company towards issue of share capital [refer page 415-436 of paper book| PMS Registration Certificate of Alpha Capital Advisors Pvt. Ltd and Certificate of incorporation change in name refer page 439 of paper book] Submission of Disclosure Report filed by PMC with SEBI wherein it has been categorically stated that the PMC is making investment in Appellant Company. The said disclosure Foodlink Services India Pvt. Ltd. 23 ITA Nos. 4851, 4863 & 4854/MUM/2024 Alpha Capital Advisors Private Limited wherein the shareholders power of attorney to the PMC to make and manage their investment. Accordingly, the PMC entered into agreement dated 09/06/2017 with the assessee on behalf of all the were issued. All the 67 shareholders transferred their money from their account to the the funds to the nt. During the assessment proceeding, the assessee filed details of shareholders along with their documents required for discharging onus cuments have been reproduced on page 17 para 3.1.3 of the order of ld CIT(A). For 3.1.3 In addition to the above, the Appellant filed following er point 14 of paper ITR Financial statement of few shareholders (refer page 289- Copy of PAS 3 filed with Ministry of Corporate Affairs towards 414 of paper book] the Appellant company towards 436 of paper book| PMS Registration Certificate of Alpha Capital Advisors Pvt. Ltd and Certificate of incorporation change in name refer page re Report filed by PMC with SEBI wherein it has been categorically stated that the PMC is making investment in Appellant Company. The said disclosure given at page no. 1121 of the disclosure document [refer page 440-485 of paper book] 8.3 The AO issued no 67 shareholders for verification of their identity and creditworthiness but only 53 shareholders complied with said notices and remaining 14 shareholders having share capital amounting to Rs. 10,44,64,764/ issued under section 133(6) of the A the said sum as unexplained cash received from the shareholders credit is reproduced as “8.3.1 The AO made addition u/s.68 of the IT Act in respect of the following parties Sr. No. Name 1. BHATIA SLIRESH 2. GAWANDE CONSULTANTS PVT LTD 3. FALCON MARINE EXPORTS LTD 4. ASHISH HARESH JAGTIANI 5 AMIN WAHID GOPALANI SUNEETA WAHIDGOPALANI 6. SUMEET BALDEV CHOPRA 7. WELSPUN GROUP MASTER TRUST 8. SAVE POWER LLP 9. PINK Ginger ARTS LLP 10. PROTOS ENGINEERING CO PRIVATE LIMITED Foodlink Services India Pvt. Ltd. given at page no. 1121 of the disclosure document [refer page 485 of paper book] The AO issued notice under section 133(6) of the A 67 shareholders for verification of their identity and creditworthiness but only 53 shareholders complied with said notices and remaining 14 shareholders having share capital amounting to Rs. 10,44,64,764/- did not respond to the notice ed under section 133(6) of the Act. The AO accordingly added the said sum as unexplained cash credit u/s 68 of the shareholders which was held as unexplained cash credit is reproduced as under: 8.3.1 The AO made addition u/s.68 of the IT Act in respect of the following parties Name Amount BHATIA SLIRESH 2381081 GAWANDE CONSULTANTS PVT LTD 2381081 FALCON MARINE EXPORTS LTD 4758975 ASHISH HARESH JAGTIANI 1906140 AMIN WAHID GOPALANI & SUNEETA WAHIDGOPALANI 1906140 SUMEET BALDEV CHOPRA 4758975 WELSPUN GROUP MASTER TRUST 428 SAVE POWER LLP 9521138 PINK Ginger ARTS LLP 9521138 PROTOS ENGINEERING CO PRIVATE LIMITED Foodlink Services India Pvt. Ltd. 24 ITA Nos. 4851, 4863 & 4854/MUM/2024 given at page no. 1121 of the disclosure document [refer page ce under section 133(6) of the Act to all the 67 shareholders for verification of their identity and creditworthiness but only 53 shareholders complied with said notices and remaining 14 shareholders having share capital did not respond to the notice accordingly added u/s 68 of the Act. The sum held as unexplained cash 8.3.1 The AO made addition u/s.68 of the IT Act in respect of 2381081 2381081 4758975 1906140 1906140 4758975 42840341 9521138 9521138 953070 11. JAYABEN JITENDRAJHAVERI 12 PRASHANT SUBHASH PRATAP 13 VIVEK MADANLAL HINDUJA 14 DALMIA ENTERPRISE HOLDINGS TOTAL 8.4 Before the ld CIT(A), was carried out during could not respond to the notice u/s 133(6) of the Act. AO, the assessee requested who failed to comply notice u/s 133(6) of the reminders, list of shareholders was not provided order was passed. Therefore, the assessee obtained reply from those shareholders and submitted before the ld C evidences. The Ld CIT(A) called for remand report from the AO but the AO didn’t give any adverse remark on the additional evidences. The ld CIT(A) after taking into consideration comparison of the documents in respect of 53 shareholder assessment proceeding and documents in respect of 14 shareholders filed during appellate proceedings as additional evidences, deleted the addition observing as under: “9.11 Perusal of the assessment order reveals that the AO has mentioned anything about any information available with him to arrive at the conclusion that the parties did not have creditworthiness. No inquiries were conducted to bring on records, Foodlink Services India Pvt. Ltd. JAYABEN JITENDRAJHAVERI 30663 PRASHANT SUBHASH PRATAP 9517950 VIVEK MADANLAL HINDUJA 4762162 DALMIA ENTERPRISE HOLDINGS 6190174 TOTAL 104464764 Before the ld CIT(A), the assessee submitted that assess was carried out during Covid period, therefore few shareholders could not respond to the notice u/s 133(6) of the Act. he assessee requested for providing list of the who failed to comply notice u/s 133(6) of the Act but despite three , list of shareholders was not provided and assessment . Therefore, the assessee obtained reply from those shareholders and submitted before the ld CIT(A) as additional evidences. The Ld CIT(A) called for remand report from the AO but the AO didn’t give any adverse remark on the additional evidences. The ld CIT(A) after taking into consideration comparison of the documents in respect of 53 shareholders which were assessment proceeding and documents in respect of 14 shareholders filed during appellate proceedings as additional evidences, deleted the addition observing as under: 9.11 Perusal of the assessment order reveals that the AO has mentioned anything about any information available with him to arrive at the conclusion that the parties did not have creditworthiness. No inquiries were conducted to bring on records, Foodlink Services India Pvt. Ltd. 25 ITA Nos. 4851, 4863 & 4854/MUM/2024 3066399 9517950 4762162 6190174 104464764 the assessee submitted that assessment therefore few shareholders could not respond to the notice u/s 133(6) of the Act. Before the of the shareholders Act but despite three and assessment . Therefore, the assessee obtained reply from those IT(A) as additional evidences. The Ld CIT(A) called for remand report from the AO but the AO didn’t give any adverse remark on the additional evidences. The ld CIT(A) after taking into consideration comparison of the which were accepted in assessment proceeding and documents in respect of 14 shareholders filed during appellate proceedings as additional 9.11 Perusal of the assessment order reveals that the AO has not mentioned anything about any information available with him to arrive at the conclusion that the parties did not have creditworthiness. No inquiries were conducted to bring on records, any material to arrive at the conclusion of holding that the transactions were not genuine. The AO has not mentioned anything in the body of order to suggest whether he had any information or any incriminating evidences in his possession to come to the conclusion that the investment in shares were ungenuine. In thi positive evidence of flow of cash or cash exchanged between the appellant and/or the final beneficiary. Further, the AO has nowhere discussed the issue or the modus operandi alleged to be carried out by the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No evidences ha investment in shares was not a genuine transaction. On the other hand the appellant has furnished all the documentary evidences during the assessment proceedings as well as appellate proceedings to support genuine transactions where various investors have applied for shares and the have been duly allotted these shares. Further, as laid down by the Hon’ble High Court as well as Supreme Court the addition u/s.68 o proper inquiries and bringing on records any adverse findings in respect of the parties. Mere non not sufficient ground for making the addition. 9.12 In view of the facts of various courts on this issue, the addition of Rs. 10,44,64,764/ u/s.68 of the IT Act made by AO on account of share premium unconfirmed by the parties is hereby deleted. Ground no.3(a) & 3(b) of appeal are allowed 8.5 We have heard rival submission of parties and perused the relevant material on record. The issue in dispute is regarding share capital received from 14 shareholders out of the 67 shareholders treated by the Assessing Officer as unexplained cash cred reason that those 14 shareholders did not respond to the notice Foodlink Services India Pvt. Ltd. any material to arrive at the conclusion of holding that the ansactions were not genuine. The AO has not mentioned anything in the body of order to suggest whether he had any information or any incriminating evidences in his possession to come to the conclusion that the investment in shares were ungenuine. In this regards, the AO failed to bring on records, any positive evidence of flow of cash or cash exchanged between the appellant and/or the final beneficiary. Further, the AO has nowhere discussed the issue or the modus operandi alleged to be carried out by the appellant. The AO has also not zeroed down on the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No evidences have been brought on record to indicate that the investment in shares was not a genuine transaction. On the other hand the appellant has furnished all the documentary evidences during the assessment proceedings as well as appellate proceedings to support its contention to substantiate that it is a genuine transactions where various investors have applied for shares and the have been duly allotted these shares. Further, as laid down by the Hon’ble High Court as well as Supreme Court the addition u/s.68 of the IT Act was not justified, without making proper inquiries and bringing on records any adverse findings in respect of the parties. Mere non-receipt of reply u/s.133(6) was not sufficient ground for making the addition. 9.12 In view of the facts of the case and decisions rendered by various courts on this issue, the addition of Rs. 10,44,64,764/ u/s.68 of the IT Act made by AO on account of share premium unconfirmed by the parties is hereby deleted. Ground no.3(a) & 3(b) of appeal are allowed.” We have heard rival submission of parties and perused the relevant material on record. The issue in dispute is regarding share capital received from 14 shareholders out of the 67 shareholders treated by the Assessing Officer as unexplained cash cred reason that those 14 shareholders did not respond to the notice Foodlink Services India Pvt. Ltd. 26 ITA Nos. 4851, 4863 & 4854/MUM/2024 any material to arrive at the conclusion of holding that the ansactions were not genuine. The AO has not mentioned anything in the body of order to suggest whether he had any information or any incriminating evidences in his possession to come to the conclusion that the investment in shares were s regards, the AO failed to bring on records, any positive evidence of flow of cash or cash exchanged between the appellant and/or the final beneficiary. Further, the AO has nowhere discussed the issue or the modus operandi alleged to be the appellant. The AO has also not zeroed down on the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No ve been brought on record to indicate that the investment in shares was not a genuine transaction. On the other hand the appellant has furnished all the documentary evidences during the assessment proceedings as well as appellate its contention to substantiate that it is a genuine transactions where various investors have applied for shares and the have been duly allotted these shares. Further, as laid down by the Hon’ble High Court as well as Supreme Court f the IT Act was not justified, without making proper inquiries and bringing on records any adverse findings in receipt of reply u/s.133(6) was the case and decisions rendered by various courts on this issue, the addition of Rs. 10,44,64,764/- u/s.68 of the IT Act made by AO on account of share premium unconfirmed by the parties is hereby deleted. Ground no.3(a) & We have heard rival submission of parties and perused the relevant material on record. The issue in dispute is regarding share capital received from 14 shareholders out of the 67 shareholders treated by the Assessing Officer as unexplained cash credit for the reason that those 14 shareholders did not respond to the notice issued under section 133(6 proceedings, the assessee filed documents in respect of the 14 shareholders, identical to the documents which were filed in of 53 shareholders out of the 67 shareholders. The share capital received from those 53 Assessing Officer as genuine and no addition was made in respect of share capital received from those shareholders in order. The assessee has all the shareholders before us 486 to 553 of the paperbook. We are of the opinion that when the Assessing Officer has accepted share capital re shareholders on the basis of a set of documents, then identical documents filed in respect of remaining 14 shareholders CIT(A) is justified in deleting the addition made by the Assessing Officer. In view of the above facts and find any error in the order of the Ld. CIT(A) on the issue in dispute. The ground Nos. 1 and 2 of the appeal of the R accordingly dismissed. 9. In ground No. thr mainly objected for admitting the additional evidence in respect of the disallowance of rent expenses amounting to 9.1 The brief facts qua the issue in dispute are that the assessee incurred ₹13,37,04,073/ Foodlink Services India Pvt. Ltd. issued under section 133(6) of the Act. During the remand proceedings, the assessee filed documents in respect of the 14 shareholders, identical to the documents which were filed in of 53 shareholders out of the 67 shareholders. The share capital received from those 53 shareholders was already accepted Assessing Officer as genuine and no addition was made in respect of share capital received from those shareholders in order. The assessee has filed copy of the documents in respect of all the shareholders before us also, which are available on pages 486 to 553 of the paperbook. We are of the opinion that when the Assessing Officer has accepted share capital received from the 53 shareholders on the basis of a set of documents, then identical documents filed in respect of remaining 14 shareholders justified in deleting the addition made by the Assessing Officer. In view of the above facts and circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute. 1 and 2 of the appeal of the R accordingly dismissed. In ground No. three and four of the appeal, the R mainly objected for admitting the additional evidence in respect of the disallowance of rent expenses amounting to ₹ 54, 63, 632/ The brief facts qua the issue in dispute are that the assessee 073/- towards rent and conducting ch Foodlink Services India Pvt. Ltd. 27 ITA Nos. 4851, 4863 & 4854/MUM/2024 ct. During the remand proceedings, the assessee filed documents in respect of the 14 shareholders, identical to the documents which were filed in respect of 53 shareholders out of the 67 shareholders. The share capital shareholders was already accepted by the Assessing Officer as genuine and no addition was made in respect of share capital received from those shareholders in assessment of the documents in respect of which are available on pages 486 to 553 of the paperbook. We are of the opinion that when the ceived from the 53 shareholders on the basis of a set of documents, then identical documents filed in respect of remaining 14 shareholders, the Ld. justified in deleting the addition made by the Assessing circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute. 1 and 2 of the appeal of the Revenue are ee and four of the appeal, the Revenue has mainly objected for admitting the additional evidence in respect of 54, 63, 632/-. The brief facts qua the issue in dispute are that the assessee towards rent and conducting charges. As no tax was deducted on the rent payment, the Assessing Officer in draft assessment order proposed as why the 30% of ₹13,37,04,073/- i.e. 4,01,11,222/ invoking the provisio the assessee claimed to have on rent for the staff and Permanent Account Number (PAN) of the owners to whom rent was paid. The Assessing Officer into consideration of expenses amounting to Rs. disallowance under section 40(a)(ia) of the A the assessee filed additional evidence found satisfactory by the Assessing Officer and he opposed t admission of the additional evidences. The Ld. CIT(A) has summarized the facts in relation to the issue in dispute , which reproduced as under: 10. Ground no. 4 of appeal is related to the disallowance of rent expenses to the tune of Rs. 54,63,632/ disallowance of rent expenses the appellant has raised the following issues: (a) The AO erred in making the disallowance of Rs. 54,63,632/ being rent paid for accommodation of employees on the ground the Appellant allegedly failed to providing the addresses of premises and Permanent Account Number (PAN) of owner of premises taken on rent. The Appellant claimed that it has duly substantiated that the rent expenses have been incurred wholly and exclusively f therefore, the disallowance made by the AO shall be deleted. Foodlink Services India Pvt. Ltd. no tax was deducted on the rent payment, the Assessing Officer in draft assessment order proposed as why the 30% of i.e. 4,01,11,222/- might not be disallowed invoking the provisions of section 40(a)(ia) of the A claimed to have filed detail in respect of rooms taken on rent for the staff and Permanent Account Number (PAN) of the owners to whom rent was paid. The Assessing Officer into consideration of the submissions of assessee, expenses amounting to Rs. 54,63,632/- instead of making under section 40(a)(ia) of the Act. Before the Ld. CIT(A) the assessee filed additional evidences, however same were not found satisfactory by the Assessing Officer and he opposed t admission of the additional evidences. The Ld. CIT(A) has the facts in relation to the issue in dispute , which reproduced as under: 10. Ground no. 4 of appeal is related to the disallowance of rent expenses to the tune of Rs. 54,63,632/-. In respect of the disallowance of rent expenses the appellant has raised the following issues: (a) The AO erred in making the disallowance of Rs. 54,63,632/ being rent paid for accommodation of employees on the ground the Appellant allegedly failed to substantiate the expenses by providing the addresses of premises and Permanent Account Number (PAN) of owner of premises taken on rent. The Appellant claimed that it has duly substantiated that the rent expenses have been incurred wholly and exclusively for the business purposes, therefore, the disallowance made by the AO shall be deleted. Foodlink Services India Pvt. Ltd. 28 ITA Nos. 4851, 4863 & 4854/MUM/2024 no tax was deducted on the rent payment, the Assessing Officer in draft assessment order proposed as why the 30% of might not be disallowed ns of section 40(a)(ia) of the Act. In response etail in respect of rooms taken on rent for the staff and Permanent Account Number (PAN) of the owners to whom rent was paid. The Assessing Officer after taking disallowed rent instead of making ct. Before the Ld. CIT(A) , however same were not found satisfactory by the Assessing Officer and he opposed the admission of the additional evidences. The Ld. CIT(A) has the facts in relation to the issue in dispute , which are 10. Ground no. 4 of appeal is related to the disallowance of rent . In respect of the disallowance of rent expenses the appellant has raised the (a) The AO erred in making the disallowance of Rs. 54,63,632/- being rent paid for accommodation of employees on the ground the substantiate the expenses by providing the addresses of premises and Permanent Account Number (PAN) of owner of premises taken on rent. The Appellant claimed that it has duly substantiated that the rent expenses have or the business purposes, therefore, the disallowance made by the AO shall be deleted. (b) The AO erred in making the disallowance of Rs. 54,63,632/ without providing an opportunity of being heard to the Appellant. 10.1 During the year under consideration incurred expenses of Rs.13,37,04,073/ charges. The appellant had made the payment of rent without deducting any TDS. Therefore the AO in para 10 of draft assessment order proposed the disallowance u/s 40(a)(ia 30% of Rs. 13,37,04,073/ to deduct TDS on the payment of Rs. 13,37,04,073/ the appellant furnished particulars of staff rooms taken for rent and the PAN number of the owner to whom the rent wa AO after considering the reply of the appellant made the disallowance of rent expenses by Rs. 54,63,632/ making the disallowance u/s 40(a)(ia) of the Act as the draft assessment order. The main reason of making disallowance of rent expenses of Rs. 54,63,632/ is as under: “As per draft assessment order vide para No.10 it is proposed for addition of Rs.4,01,11,222 for failure of deduction of TDS on rent & conducting charges. This addition was proposed @30% on total claim of expenditure. This proposal was communicated to the assessee vide draft assessment order dated.30/04/2021. In response to this show cause the assessee furnished the information, after going through the information, it was noticed that the assessee failed to furnish the particulars of staff rooms taken for rent and the pan number of the owner to whom the rent was paid. Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the assessee failed to substantiate the claim of payment by providing the particulars of address of the staff rooms and PAN number of owner, it is construed that the claim is not genuine. Hence it resulted as addition of Rs. 54,63,632/ Foodlink Services India Pvt. Ltd. (b) The AO erred in making the disallowance of Rs. 54,63,632/ without providing an opportunity of being heard to the Appellant. 10.1 During the year under consideration, the Appellant has incurred expenses of Rs.13,37,04,073/- being rent and conducting charges. The appellant had made the payment of rent without deducting any TDS. Therefore the AO in para 10 of draft assessment order proposed the disallowance u/s 40(a)(ia 30% of Rs. 13,37,04,073/- i.e. Rs. 4,01,11,222/- as it had failed to deduct TDS on the payment of Rs. 13,37,04,073/-. In response, the appellant furnished particulars of staff rooms taken for rent and the PAN number of the owner to whom the rent wa AO after considering the reply of the appellant made the disallowance of rent expenses by Rs. 54,63,632/- making the disallowance u/s 40(a)(ia) of the Act as the draft assessment order. The main reason of making nce of rent expenses of Rs. 54,63,632/- provided by AO “As per draft assessment order vide para No.10 it is proposed for addition of Rs.4,01,11,222 for failure of deduction of TDS on rent & conducting charges. This addition was proposed @30% on total claim of expenditure. This proposal was communicated to the assessee vide draft assessment order dated.30/04/2021. In response to this show cause the assessee furnished the information, after going through the information, it s noticed that the assessee failed to furnish the particulars of staff rooms taken for rent and the pan number of the owner to whom the rent was paid. Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the ssessee failed to substantiate the claim of payment by providing the particulars of address of the staff rooms and PAN number of owner, it is construed that the claim is not genuine. Hence it resulted as addition of Rs. 54,63,632/- as under- Foodlink Services India Pvt. Ltd. 29 ITA Nos. 4851, 4863 & 4854/MUM/2024 (b) The AO erred in making the disallowance of Rs. 54,63,632/- without providing an opportunity of being heard to the Appellant. , the Appellant has being rent and conducting charges. The appellant had made the payment of rent without deducting any TDS. Therefore the AO in para 10 of draft assessment order proposed the disallowance u/s 40(a)(ia) being as it had failed . In response, the appellant furnished particulars of staff rooms taken for rent and the PAN number of the owner to whom the rent was paid. The AO after considering the reply of the appellant made the - instead of proposed in the draft assessment order. The main reason of making provided by AO “As per draft assessment order vide para No.10 it is proposed for addition of Rs.4,01,11,222 for failure of deduction of TDS on rent & conducting charges. This addition was proposed U/s.40(a)(ia) @30% on total claim of expenditure. This proposal was communicated to the assessee vide draft assessment order dated.30/04/2021. In response to this show cause the assessee furnished the information, after going through the information, it s noticed that the assessee failed to furnish the particulars of staff rooms taken for rent and the pan number of the owner to whom the rent was paid. Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the ssessee failed to substantiate the claim of payment by providing the particulars of address of the staff rooms and PAN number of owner, it is construed that the claim is not genuine. Hence it Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 30 ITA Nos. 4851, 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 31 ITA Nos. 4851, 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 32 ITA Nos. 4851, 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 33 ITA Nos. 4851, 4863 & 4854/MUM/2024 Foodlink Services India Pvt. Ltd. Foodlink Services India Pvt. Ltd. 34 ITA Nos. 4851, 4863 & 4854/MUM/2024 10.2 During the appellate proceedings, the appellant had submitted that it had incurred rent expenses of Rs. 13,37,04,073/ assessment proceeding through draft assessment order, proposed to make the disallowance u/ the ground that the Appellant has not deducted the TDS on rent. The Appellant claimed that it had filed complete details related to rent expenses on 02/05/2021, explaining the AO that the TDS have been deducted by it wherever of the submission of the Appellant, the AO made a disallowance of Rs. 54,63,632/ stating that the PAN of the landlord or the premises address are not given by the Appellant. The claimed that these amounts represents the rent which is below threshold limit as prescribed in section 194I of the Act 9.2 After considering the remand report of the Assessing Officer and rejoinder of the assessee, the Ld. observing as under: “10.3 During the appellate proceedings the appellant has submitted that the running restaurants, outdoor catering, The Appellant has clai the country. It also takes the contract of outdoor catering across the country throughout the year. Therefore, the Appellant needs various staff (i.e. serving staff, Foodlink Services India Pvt. Ltd. 10.2 During the appellate proceedings, the appellant had submitted that it had incurred rent expenses of Rs. 13,37,04,073/- for the subjected year. The AO, in the assessment proceeding through draft assessment order, proposed to make the disallowance u/s 40(a)(ia) of the Act on the ground that the Appellant has not deducted the TDS on rent. The Appellant claimed that it had filed complete details related to rent expenses on 02/05/2021, explaining the AO that the TDS have been deducted by it wherever applicable. On consideration of the submission of the Appellant, the AO made a disallowance of Rs. 54,63,632/- out of the total rent of Rs. 13,37,04,073/ stating that the PAN of the landlord or the premises address are not given by the Appellant. The appellant further claimed that claimed that these amounts represents the rent which is below threshold limit as prescribed in section 194I of the Act.” considering the remand report of the Assessing Officer and rejoinder of the assessee, the Ld. CIT(A) deleted the addition 10.3 During the appellate proceedings the appellant has submitted that the business of the appellant company is that of running restaurants, outdoor catering, and management services. The Appellant has claimed that it has hotels / restaurants the country. It also takes the contract of outdoor catering across throughout the year. Therefore, the Appellant needs various staff (i.e. serving staff, cook, attendant etc) who are hired Foodlink Services India Pvt. Ltd. 35 ITA Nos. 4851, 4863 & 4854/MUM/2024 10.2 During the appellate proceedings, the appellant had submitted that it had incurred rent expenses of Rs. for the subjected year. The AO, in the assessment proceeding through draft assessment order, s 40(a)(ia) of the Act on the ground that the Appellant has not deducted the TDS on rent. The Appellant claimed that it had filed complete details related to rent expenses on 02/05/2021, explaining the AO that the TDS applicable. On consideration of the submission of the Appellant, the AO made a disallowance out of the total rent of Rs. 13,37,04,073/- stating that the PAN of the landlord or the premises address are appellant further claimed that claimed that these amounts represents the rent which is below .” considering the remand report of the Assessing Officer CIT(A) deleted the addition 10.3 During the appellate proceedings the appellant has business of the appellant company is that of and management services. med that it has hotels / restaurants across the country. It also takes the contract of outdoor catering across throughout the year. Therefore, the Appellant needs cook, attendant etc) who are hired by the Appellant. The Appellant provides staff in addition to salary. The appellant has submitted details rent paid along with the Name of the parties, PAN and premises for which rent has sample rent ag i) Sangita Raj Bhagat ii) Charushila Patil iii) Rosy Paul Chettiar iv) Jagdish Talreja v) Savio Vareed vi) Shevanta Bhavku vii) Sunanda Tatoba More viii) Kamalakar Takale ix) Raju Jaiswal x) Arun Kisan Londhe xi) K Shanakriah xii) K Vanaja xiii) K Raghavender xiv) K Edu Kondalu xv) K Narsamma xvi) K Venkata Ramana xvii) Sharda Sanjay Parte xviii) Surekha Nagesh Sakpal xix) P Lakshmi 10.4 As these were the additional evidences filed by the appellant before the appellate authority in respect to the addition of disallowance of rent expenses of Rs. 54,63,632/ report was called for from the AO for the examination of the above details provided by the appellant. The AO in reply to the remand report has submitted that the veracity of the claim of the appellant cannot be ascertained from just the sample rent Foodlink Services India Pvt. Ltd. llant. The Appellant provides accommodation to the staff in addition to salary. The appellant has submitted details rent paid along with the Name of the parties, PAN and premises for which rent has been paid and amount paid along with the sample rent agreement of following parties: i) Sangita Raj Bhagat ii) Charushila Patil iii) Rosy Paul Chettiar iv) Jagdish Talreja v) Savio Vareed vi) Shevanta Bhavku vii) Sunanda Tatoba More viii) Kamalakar Takale ix) Raju Jaiswal x) Arun Kisan Londhe xi) K Shanakriah xiii) K Raghavender xiv) K Edu Kondalu xv) K Narsamma xvi) K Venkata Ramana xvii) Sharda Sanjay Parte xviii) Surekha Nagesh Sakpal xix) P Lakshmi 10.4 As these were the additional evidences filed by the appellant before the appellate authority in respect to the addition of disallowance of rent expenses of Rs. 54,63,632/- report was called for from the AO for the examination of the details provided by the appellant. The AO in reply to the remand report has submitted that the veracity of the claim of the appellant cannot be ascertained from just the sample rent Foodlink Services India Pvt. Ltd. 36 ITA Nos. 4851, 4863 & 4854/MUM/2024 accommodation to the staff in addition to salary. The appellant has submitted details of rent paid along with the Name of the parties, PAN and premises been paid and amount paid along with the 10.4 As these were the additional evidences filed by the appellant before the appellate authority in respect to the addition -, a remand report was called for from the AO for the examination of the details provided by the appellant. The AO in reply to the remand report has submitted that the veracity of the claim of the appellant cannot be ascertained from just the sample rent agreement and the additional evidence submitted by the appellant does assessment order. 10.5 The report submitted by the AO has been considered however, the AO has not brought out any deficiency or discrepancy in respect to the documents or additional evidences submitted by th which the AO made addition of Rs. 54,63,632/ “Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the assessee failed to substantiate the claim address of the staff rooms and PAN number of owner.” The appellant following the reason which led the AO for making disallowance of rent expenses of Rs. 54,63,632/ the details and documentary evi 10.6 Further, as per the draft assessment order issued to the appellant the AO proposed to make the disallowance u/s 40(a)(ia) of the Act on the ground that the Appellant has not deducted the TDS on rent. However, the addi making disallowance of rent expenses to the tune of Rs. 54,63,632/-. If such addition was required to be made, the AO ought to have been given an opportunity of being heard before making such disallowance to the appellant. 10.7 In view of the above discussion and the details, documentary evidences submitted by the appellant the addition of Rs. 54,63,632/ expenses of Rs. 54,63,632/ appeal is allowed. 9.3 We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is in respect of the genuineness of the rent expenses claimed by the assessee. The Assessing Officer in the remand report the landlord or the addresses of the premises were not given by the assessee in the additional evidence and therefore the claim of the assessee of the genuineness of the expenses could not be verified. Foodlink Services India Pvt. Ltd. agreement and the additional evidence submitted by the appellant does not answer the issue raised by the AO in the assessment order. 10.5 The report submitted by the AO has been considered however, the AO has not brought out any deficiency or discrepancy in respect to the documents or additional evidences submitted by the appellant. The main reason on the basis of which the AO made addition of Rs. 54,63,632/- is as under: “Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the assessee failed to substantiate the claim of payment by providing the particulars of address of the staff rooms and PAN number of owner.” The appellant following the reason which led the AO for making disallowance of rent expenses of Rs. 54,63,632/- has submitted the details and documentary evidences to justify its stand. 10.6 Further, as per the draft assessment order issued to the appellant the AO proposed to make the disallowance u/s 40(a)(ia) of the Act on the ground that the Appellant has not deducted the TDS on rent. However, the addition was finalized making disallowance of rent expenses to the tune of Rs. . If such addition was required to be made, the AO ought to have been given an opportunity of being heard before making such disallowance to the appellant. iew of the above discussion and the details, documentary evidences submitted by the appellant the addition of Rs. 54,63,632/- made on account of disallowance of rent expenses of Rs. 54,63,632/- is hereby deleted. Ground no. 4 of appeal is allowed.” We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is in respect of the genuineness of the rent expenses claimed by the assessee. The Assessing Officer in the remand report has submitted that the landlord or the addresses of the premises were not given by the assessee in the additional evidence and therefore the claim of the assessee of the genuineness of the expenses could not be verified. Foodlink Services India Pvt. Ltd. 37 ITA Nos. 4851, 4863 & 4854/MUM/2024 agreement and the additional evidence submitted by the not answer the issue raised by the AO in the 10.5 The report submitted by the AO has been considered however, the AO has not brought out any deficiency or discrepancy in respect to the documents or additional evidences e appellant. The main reason on the basis of is as under: “Even though the claim for these staff rooms is less than the ceiling limit for collection of TDS as the assessee failed to of payment by providing the particulars of address of the staff rooms and PAN number of owner.” The appellant following the reason which led the AO for making has submitted dences to justify its stand. 10.6 Further, as per the draft assessment order issued to the appellant the AO proposed to make the disallowance u/s 40(a)(ia) of the Act on the ground that the Appellant has not tion was finalized making disallowance of rent expenses to the tune of Rs. . If such addition was required to be made, the AO ought to have been given an opportunity of being heard before iew of the above discussion and the details, documentary evidences submitted by the appellant the addition made on account of disallowance of rent is hereby deleted. Ground no. 4 of We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is in respect of the genuineness of the rent expenses claimed by the assessee. The ld submitted that PAN of the landlord or the addresses of the premises were not given by the assessee in the additional evidence and therefore the claim of the assessee of the genuineness of the expenses could not be verified. The Ld. CIT(A) however deleted the addition of natural justice. The Ld. CIT(A) noted that in the draft assessment order the Assessing Officer proposed disallowance inv 40(a)(ia) of the Act whereas in the final assessment order disallowance for lacking genu CIT(A) held that addition made the assessee, as not sustainable. However finding of the Ld. CIT(A) on the issue in dispute. We note remand preceding th address of the rooms available and therefore said expenses could not to verify. In such circumstances, the Ld. CIT(A) should have called for such information from the assessee or should have directed the assessee to file such information before the AO in remand proceeding. Since the Ld. CIT(A) has deleted the addition without verifying the said information finding of the Ld. CIT(A) on the issue in dispute and restore the matter back to the file of the Assessing Officer, with the direction to the assessee to file the details of complete address of the properties/rooms which were taken on lease for staffs address of the owner of those properties for verification by the Assessing Officer. The ground accordingly, allowed for the statistical purposes. Foodlink Services India Pvt. Ltd. The Ld. CIT(A) however deleted the addition for violation of natural justice. The Ld. CIT(A) noted that in the draft assessment order the Assessing Officer proposed disallowance inv ct whereas in the final assessment order disallowance for lacking genuineness of the rental expenses. The ld addition made by the AO without opportunity to not sustainable. However, we disagree with the finding of the Ld. CIT(A) on the issue in dispute. We note e Assessing Officer specifically pointed out that address of the rooms leased for staff and PAN of the owners was not available and therefore said expenses could not have been possible n such circumstances, the Ld. CIT(A) should have called such information from the assessee or should have directed the assessee to file such information before the AO in remand proceeding. Since the Ld. CIT(A) has deleted the addition without verifying the said information, we feel it appropriate to set aside finding of the Ld. CIT(A) on the issue in dispute and restore the matter back to the file of the Assessing Officer, with the direction to the assessee to file the details of complete address of the properties/rooms which were taken on lease for staffs address of the owner of those properties for verification by the sing Officer. The ground No. three and four of the appeal are accordingly, allowed for the statistical purposes. Foodlink Services India Pvt. Ltd. 38 ITA Nos. 4851, 4863 & 4854/MUM/2024 r violation of principle of natural justice. The Ld. CIT(A) noted that in the draft assessment order the Assessing Officer proposed disallowance invoking section ct whereas in the final assessment order made neness of the rental expenses. The ld without opportunity to we disagree with the finding of the Ld. CIT(A) on the issue in dispute. We note that in the e Assessing Officer specifically pointed out that staff and PAN of the owners was not have been possible n such circumstances, the Ld. CIT(A) should have called such information from the assessee or should have directed the assessee to file such information before the AO in remand proceeding. Since the Ld. CIT(A) has deleted the addition without we feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue in dispute and restore the matter back to the file of the Assessing Officer, with the direction to the assessee to file the details of complete address of the properties/rooms which were taken on lease for staffs and PAN and address of the owner of those properties for verification by the No. three and four of the appeal are 10. In the result, the appeals of the 2017-18 are dismissed 2018-19 is partly allowed for statistical purposes. Order pronounced in the open Court on Sd/ (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 30/01/2025 Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Foodlink Services India Pvt. Ltd. In the result, the appeals of the Revenue for assessment year dismissed whereas appeal for the assessment year 19 is partly allowed for statistical purposes. nounced in the open Court on 30/01/2025. d/- Sd/ (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Foodlink Services India Pvt. Ltd. 39 ITA Nos. 4851, 4863 & 4854/MUM/2024 for assessment year whereas appeal for the assessment year /01/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "