M/s M.G.Oil, Khandwa V. ACIT(Centra)-2, Indore

CO 12/Ind/2022

AI Insights

The case involves a series of appeals and cross objections related to the assessment years 2015-16 to 2018-19 concerning the firm M/s. M. G. Oils, Khandwa. The appeals were directed against the order passed by the CIT(A) which had deleted various additions made by the Assessing Officer under sections 68 and 143(3) of the Income Tax Act, 1961. The additions pertained to unexplained cash credits and unexplained capital introduced by partners, which the Assessing Officer treated as unexplained cash credits. The Tribunal examined the legality of the additions made by the Assessing Officer and the merits of the CIT(A)'s decision to delete these additions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129953 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-09-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 12-05-2022
• Other Referred Cases: Pr. CIT v. Meeta Gutgutia, CIT v. Kabul Chawla, CIT v. Gurinder Singh Bawa, Pr. CIT-4 v. Saumya Construction (P.) Ltd., All Cargo Global Logistics Ltd. v. DCIT, ACIT v. Sunshine Infraestate (P.) Ltd., PCIT v. Gaurav Arora, PCIT v. Param Dairy Ltd, E.N. Gopakumar vs. CIT, Smt Dayawanti, M/s Canara Housing Development Company, Madugala Venu v. Director of Income tax, CIT-VII v. Chetan Das Lachman Das, CIT v. Anil Kumar Bhatia, Rajat Tradecom India (P.) Ltd. V. DCIT, 2(1), Indore, Shivnath Rai Harnarain (India) Ltd. V. DCIT, CC-14, New Delhi, Ms. Shyam Lata Kaushik v. ACIT, Harvey Heart Hospitals Ltd. V. ACIT, Dr. Mansukh Kanjibhai Shah v. ACIT, Central Circle-2, Pr. CIT Vs. Gahoi Dal & Oil Mills, Jai Steel (India), Jodhpur v. ACIT, PCIT-4 v. Saumya Construction (P.) Ltd., CIT (Central)-III v. Kabul Chawla, ACIT 1(1), Ujjain Vs Dewas Soya Limited, ACIT v. Inlay Marketing (P.) Ltd., Eland International (P.) Ltd. v. DCIT, J.M. Wire Inds. v. CIT
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit; Rejection of books of accounts; Business income; Income from undisclosed sources; Search and seizure; Peak credit; Source of fund; Additional evidence; TDS; Bogus
• Section: 68; 132; 143(3); 153A; 205; 143(2); 158BC; 43; 48; 145(3); 153C

Judgement Text

MG Oils 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE Ms. MADHUMITA ROY, JUDICIAL MEMBER & SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER I T( S S) A N os .1 53 t o 1 5 6 /I nd /2 02 1 ( A . Ys . 2 0 15 -1 6 to 2 0 18 - 19 ) AC I T , Ce nt ra l -2 In d or e V s. M/ s . M. G. O il s , K h an dw a PA N No . AA X F M 4 4 97 L (Appellant) .. (Respondent) C.O. Nos.12 to 14/Ind/2022 (Arising out of IT(SS)A Nos.153 to 155/Ind/2021) (A.Ys. 2015-16 to 2017-18) M/ s. M. G . O il s, Kh an d w a V s. A C I T , C e nt r al - 2 I nd o r e (Appellant) .. (Respondent) Assessee by : Shri S.N. Agrawal, CA Revenue by : Shri P. K. Mitra, CIT.DR Date of Hearing 19.12.2022 Date of Pronouncement 27.02.2023 O R D E R PER BENCH This bunch of departmental appeals and COs filed by the present assessee is directed against the common order passed by Learned CIT(A)-3, Bhopal on 26.08.2021 in the common assessment order passed by Ld. DCIT-Central-2, Indore on 30.12.2019. MG Oils 2 2. The instant appeals filed by the Revenue pertaining to Assessment Years (hereinafter referred to as ‘A.Y.’) 2015-16 to 2018-19 are directed against the order dated 26.08.2021 passed by the Ld. CIT(A)-3, Bhopal (M.P.) (hereinafter referred to as ‘Ld. CIT(A)’) arising out of the order dated 30.12.2019 passed by the DCIT (Central)- 2, Indore (hereinafter referred to as ‘Ld. AO’) under Section 143(3) r.w.s. 153A of the Income-Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the A.Y. 2015-16 to 2017-18 and under Section 143(3) of the Act for the A.Y. 2018-19. Upon receipt of the notice of Revenue’s appeal, the assessee also filed Cross Objections for the A.Y. 2015- 16 to 2017-18. The Revenue has raised the following grounds of appeal in IT(SS)A 153/Ind/2021 for A.Y. 2015-16: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 3,33,75,000/- made by the assessing officer on account of unexplained capital introduced by partners by treating the same as unexplained cash credit u/s 68 of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 1,90,14,674/- made by the assessing officer on account of unsecured loan and interest paid thereon u/s 68 of the I.T. Act, 1961.” The Revenue has raised the following grounds of appeal in IT(SS)A 154/Ind/2021 for A.Y. 2016-17: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 62,78,04,718/- made by the assessing officer u/s 68 of the I.T. Act, 1961 by treating sales as non-genuine and amount received against such sales as unexplained cash credit. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 7,02,93,414/- made by the assessing officer on account of unsecured loan and interest paid thereon u/s 68 of the I.T. Act, 1961.” The Revenue has raised the following grounds of appeal in IT(SS)A 155/Ind/2021 for A.Y. 2017-18: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 115,62,08,851/- made by the assessing officer u/s 68 of the I.T. Act, 1961 MG Oils 3 by treating sales as non-genuine and amount received against such sales as unexplained cash credit. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 8,70,50,489/- made by the assessing officer on account of unsecured loan and interest paid thereon u/s 68 of the I.T. Act, 1961. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 2,84,00,000/- made by the assessing officer on account of unexplained capital introduced by partners by treating the same as unexplained cash credit u/s 68 of the I.T. Act, 1961. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 5,24,00,000/- made by the assessing officer on account of unaccounted cash deposited in the bank account during demonetization period.” The Revenue has raised the following grounds of appeal in IT(SS)A 156/Ind/2021 for A.Y. 2018-19: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 18,36,76,000/- made by the Assessing officer u/s 68 of the I.T. Act, 1961 by treating sales as non-genuine and amount received against such sales as unexplained cash credit. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 11,67,99,955/- made by the Assessing officer on account of unsecured loan and interest paid thereon u/s 68 of the I.T. Act, 1961. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 2,02,91,900/- made by the Assessing officer on account of unexplained capital introduced by partners by treating the same as unexplained cash credit u/s 68 of the I.T. Act, 1961.” The assessee has raised the following ground in cross objection CO 12/Ind/2022 for A.Y. 2015-16: “1. That on the facts and in the circumstances of the case and in law, the Assessing officer was not justified in making addition of Rs. 3,33,75,000/- and Rs. 1,90,14,674/- to the total income of the respondent on account of capital introduced by partners and on account of unsecured loans received and interest credited thereon respectively in case of non-abate assessment and that too in absence of any incriminating documents found and seized during the course of search which is neither legal nor proper.” The assessee has raised the following ground in cross objection CO 13/Ind/2022 for A.Y. 2016-17: MG Oils 4 “1. That on the facts and in the circumstances of the case and in law, the Ld Assessing Officer erred in making addition of Rs. 62,78,04,718/- and Rs. 7,02,93,414/- to the total income of the respondent on account of sales treated as non-genuine and amount received against such sale treated as unexplained cash credit and also on account of unsecured loans received and interest credited thereon respectively in case of non-abate assessment and that too in absence of any incriminating documents found and seized during the course of search which is neither legal nor proper.” The assessee has raised the following ground in cross objection CO 14/Ind/2022 for A.Y. 2017-18: “1. That on the facts and in the circumstances of the case and in law, the Ld Assessing Officer erred in making additions of Rs. 115,62,08,851/-, Rs. 2,84,00,000/-, Rs. 8,70,50,489/- and Rs. 5,24,00,000/- to the total income of the respondent on account of sales treated as non-genuine and amount received against such sale treated as unexplained cash credit, on account of capital introduced by partners, on account of unsecured loans received and interest credited thereon and also on account of cash deposited in the bank account during the demonetization period respectively in case of non-abate assessment and that too in absence of any incriminating documents found and seized during the course of search.” 3. As the issues raised in all these appeals and cross objections are mostly common and relate to same assessee, these appeals were heard together and are being disposed of by this common order for the sake of convenience and brevity. 4. Brief facts as culled out from the records are that the assessee is a partnership firm engaged in the business of running of a refinery. The search and seizure operation under Section 132 of the Act was carried out at the business premises as well as residential premises of MG Oils Group of Khandwa including the assessee and other concerns/ business associates on 23.01.2018. The case of the assessee was centralised with the office of the Ld. AO vide order dated 29.11.2018 passed under Section 127 of the Act. Thereafter, notices under Section 153A of the Act were issued for the A.Y. 2012-13 to 2017-18 on 28.01.2019 and notice under Section 143(2) of the Act was issued for the A.Y. 2018-19 on 30.01.2019. Various details were called for by the Ld. AO during the course of assessment proceedings which were replied to by the assessee. Subsequently, the Ld. AO completed the assessment and passed assessment order under Section 143(3) r.w.s. 153A of the Act for the A.Y. 2012-13 to 2017-18 and under Section 143(3) of the Act for the A.Y. 2018-19 after making the following additions: MG Oils 5 S. No Nature of additions made Amount (in Rs.) A.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 Total 1 On account of capital introduced by partners by treating it as unexplained cash credit under section 68 of the Act 3,33,75,000 - 2,84,00,000 2,02,91,900 8,20,66,900 2 On account of unsecured loans received and interest credited thereon by treating it as unexplained cash credit under section 68 of the Act 1,90,14,674 7,02,93,414 8,70,50,489 11,67,99,955 29,31,58,532 3 On account of disbelieving the sales and treating the amount received against such sales as unexplained cash credit/ deposit under section 68 of the Act - 62,78,04,718 115,62,08,851 18,36,76,000 196,76,89,569 4 On account of cash deposited in the bank account during the demonetization period by treating it as unaccounted cash credit under section 68 of the Income-Tax Act, 1961 - - 5,24,00,000 - 5,24,00,000 Total 5,23,89,674 69,80,98,132 132,40,59,340 32,07,67,855 239,53,15,001 Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) deleted all the additions made by the Ld. AO in the assessment order on merits but dismissed the legal ground raised by the assessee. Hence, the instant appeals have been filed before us by the Revenue and cross objections have been filed before us by the assessee. MG Oils 6 Assessee’s cross objections in CO 12/Ind/2022, CO 13/Ind/2022 and CO 14/Ind/2022: (A.Ys. 2015-16 to 2017-18) 5. We shall first take up all the three assessee’s cross objections for adjudication since the assessee through the common ground raised in these cross objections has challenged the legality/ validity of various additions made in the assessment order on the ground that no addition could have been made in case of non-abate assessments in absence of any incriminating documents found and seized during the course of search. Since the assessee has challenged the legality/ validity of various additions made in the assessment order, at the threshold of the matter, we would like to address the same. 6. The brief facts leading to the case are that search and seizure operation under Section 132 of the Act was carried out in the case of the assessee on 23.01.2018. The assessee demonstrated before the Ld. AO and Ld. CIT(A) that assessment years till A.Y. 2016-17 shall be non-abate assessment years and addition, if any, can be made to the total income of the assessee in these years only on the basis of incriminating documents found and seized during the course of search. However, the Ld. CIT(A) did not accede to the aforesaid contention of the assessee and observed that notices issued under Section 153A of the Act could not have been challenged once the assessee had filed its return of income in response to such notices and had also attended the assessment proceedings. Therefore, the Ld. CIT(A) dismissed the said legal ground raised by the assessee. Hence, the instant cross objections have been filed before us. 7. The Ld. Counsel for the assessee submitted that an assessment year shall be non-abate assessment year if either no notice is issued under section 143(2) of the Act within the prescribed time limit and search is carried out under section 132 of the Act or if notice is issued under section 143(2) of the Acct within the prescribed time limit but the assessment order is passed prior to the date on which search is carried out under section 132 of the Act. The Ld. Counsel with the help of the following table MG Oils 7 demonstrated that assessment years till A.Y. 2017-18 shall be non-abate assessment years: S. No Assessment Years Date of filing of income-tax return Time limit for issuance of notice under section 143(2) of the Act Date of search Remarks 1 2015-16 15-03-2017 30-09-2017 23-01-2018 Non-abate (Assessment order was passed on 27-12-2017 under section 143(3) of the Act prior to the date of search) 2 2016-17 15-03-2017 30-09-2017 23-01-2018 Non-abate 3 2017-18 31-10-2017 30-09-2018 23-01-2018 Non-abate since the case was centralized only on 29-11-2018 i.e. after the time limit for issuance of notice under section 143(2) of the Act had already expired 8. The Ld. Counsel referred to the second proviso of sub-section (1) of section 153A of the Act and also sub-section (2) of section 153A of the Act to substantiate the fact that A.Y. 2017-18 was a non-abate assessment year. He submitted that as per the second proviso to sub-section (1) of section 153A of the Act, any proceeding which is pending as on the date of initiation of search shall abate. However, no notice was issued under section 143(2) of the Act for the A.Y. 2017-18 till the date of initiation of search and accordingly, proceedings for the A.Y. 2017-18 could not be treated as abate as per the second proviso to sub-section (1) of section 153A of the Act. The Ld. Counsel further submitted that as per sub-section (2) of section 153A of the Act, if any proceeding initiated under section 153A of the Act is challenged and it is resultantly quashed, in that case, the assessments which were abated as a consequence of search shall stand revived. However, in the case in hand, no notice was issued under section 143(2) of the Act for the A.Y. 2016-17 till the date of initiation of search or even till the date of centralization of the case of the assessee. Hence, if the proceeding initiated MG Oils 8 section 153A of the Act in the case in hand is challenged and is resultantly quashed, in that case, the assessment for the A.Y. 2017-18 shall not stand revived since no notice was issued under section 143(2) of the Act for the A.Y. 2017-18 till the date of initiation of search or even till the date of centralization of the case of the assessee and accordingly, the proceedings for the A.Y. 2017-18 shall not be considered as ‘pending’ as on the date of initiation of search. Accordingly, the Ld. Counsel on a conjoint reading of the second proviso to sub-section (1) of section 153A of the Act and sub- section (2) of section 153A of the Act demonstrated that A.Y. 2017-18 shall also be considered as a non-abate assessment year. 9. After demonstrating that assessment years till A.Y. 2017-18 shall be considered as non-abate assessment years, the Ld. Counsel submitted that the Ld. AO did not refer to any incriminating documents found and seized during the course of search while making various additions to the total income of the assessee. The Ld. Counsel further submitted that additions on account of capital introduced by partners, unsecured loans received and interest credited thereon and cash deposited in the bank account during the demonetization period were made merely on the basis of audited final accounts and various other details provided during the course of search assessment proceedings which were duly recorded in the regular books of accounts of the assessee. He also submitted that the Ld. AO did not refer to any document, leave apart any incriminating document, found and seized during the course of search while making the aforesaid additions to the total income of the assessee. As regards the addition on account of disbelieving the sales and treating the amount received against such sales as unexplained cash credit/ deposit was concerned, the Ld. Counsel submitted that the Ld. AO while making the aforesaid addition placed reliance on Page No. 1-18 of LPS-3 found and seized during the course of search from the premises of the assessee which contained partnership deed and rent agreement of M/s Welcome Overseas, PAN and voter ID of the partners of M/s Welcome Overseas, miscellaneous receipt and copy of license provided by Municipal Corporation of Khandwa to M/s Welcome Overseas in MG Oils 9 respect of which Shri Sunil Bansal, partner of the assessee firm, in his statement recorded under section 132(4) of the Act duly explained that these documents were taken for the purpose of KYC of customers. Apart from the documents mentioned hereinabove which were taken for the purpose of KYC, no other documents were found during the course of search warranting the aforesaid addition. He further submitted that the Ld. AO herself while passing the assessment order stated in Para 4.2 and 4.3 that some suspicious firms from where cheques were deposited in the bank accounts of M/s MG Oils were found on observation of the books of accounts and bank statements produced/ filed during the course of search assessment proceedings. In this regard, the Ld. Counsel contended that books of accounts and bank statements produced/ filed during the course of assessment proceedings did not constitute any incriminating document/ material found and seized during the course of search thereby warranting such addition to the total income of the assessee. Accordingly, the Ld. Counsel submitted that no incriminating documents/ material was found and seized during the course of search so as to justify the various additions made to the total income of the assessee. 10. The Ld. Counsel vehemently argued that it is a well settled proposition of law that in case of non-abate assessment, addition can be made only on the basis of incriminating documents/ material found and seized during the course of search. The Ld. Counsel relied on the following judicial precedents in support of his contentions: S. No Reference of the case law Citation Authority passing the order 1 Pr. CIT v. Meeta Gutgutia [2018] 257 Taxman 441 (SC) Hon’ble Supreme Court of India (SLP Dismissed) 2 Pr. CIT v. Meeta Gutgutia [2017] 395 ITR 526 (Delhi) Hon’ble Delhi High Court 3 CIT v. Kabul Chawla [2016] 380 ITR 573 (Delhi) Hon’ble Delhi High Court 4 CIT v. Gurinder Singh Bawa [2016] 386 ITR 483 (Bombay) Hon’ble Bombay High Court 5 Pr. CIT-4 v. Saumya Construction (P.) Ltd. [2016] 387 ITR 529 (Gujarat) Hon’ble Gujarat High Court MG Oils 10 6 All Cargo Global Logistics Ltd. v. DCIT [2012] 18 ITR(T) 106 (Mumbai)(SB) Hon’ble ITAT Mumbai Bench (Special Bench) 11. Per contra, the Ld. DR vehemently argued that unearthing of incriminating material was not a pre-condition for invoking the provisions of section 153A of the Act. The Ld. DR filed a 21 page submission before us during the course of hearing in the case of group concern, M/s Vinod Industries in support of his contentions wherein he discussed the legislative intent behind introduction of sections 153A to 153C of the Act in place of the erstwhile sections 158B to 158BH of the Act at length and also placed reliance on a catena of judicial precedents in support of his contentions. The crux of the arguments of the Ld. DR was as under: • With the introduction of the provisions of section 153A, 153B and 153C of the Act by Finance Act, 2003, the concept of ‘undisclosed income’ as envisaged in the provisions of section 158B to 158BH was given a go-by. • The provisions of section 153A of the Act provide that the AO shall assess or reassess ‘total income’ of six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted. Thus, the scope of assessment or re-assessment to be made u/s 153A is to determine ‘total income’ which includes both regular and undisclosed income. • It may be pertinent to note here that the legislature has not referred to any concept of ‘undisclosed income’ in sections 153A to 153C. • The scope of assessment u/s 153A is totally different from the scope of ‘undisclosed income’ in section 158BC of Chapter XIV-B. Unlike Chapter XIV-B which provided for assessment of ‘undisclosed income’ of the block period for assessment of the search cases, section 153A provides for assessment of ‘total income’. • Furthermore, the same expression employed in sec 153A that “the assessing officer shall assess or re-assess the ‘total income’ of six assessment years’ cannot have different interpretation for abated assessments and other assessments falling within the period of such six assessment years. • The legislature intentionally has not used the expressions ‘undisclosed income’ or ‘income escaped from assessment’ in the new sections 153A to 153C and consciously provided for assessment of ‘total income’ as defined in section 2(45) of the Act. The legislature has also not provided in these new sections 153A to 153C that the total income to be assessed has to be on the basis of evidence found during the course of search or material gathered in relation to such evidence found as was earlier provided in Chapter XIV-B of the Act. 12. The various judicial precedents relied upon by the Ld. DR are listed as under: (i) ACIT v. Sunshine Infraestate (P.) Ltd. [2022] 139 taxmann.com 60 (Allahabad- Trib.)(TM) MG Oils 11 (ii) PCIT v. Gaurav Arora [2021] 133 taxmann.com 293 (SC) – SLP admitted (iii) PCIT v. Param Dairy Ltd [2021] 133 taxmann.com 148 (SC) – SLP admitted (iv) E.N. Gopakumar vs. CIT 75 taxmann.com 215 (v) Smt Dayawanti [2016] 75 taxmann.com 308 (Delhi) (vi) M/s Canara Housing Development Company [2014] 49 taxmann.com 98 (Karnataka) (vii) Madugala Venu v. Director of Income tax [2013] 29 taxmann.com 200 (Delhi) (viii) CIT-VII v. Chetan Das Lachman Das [2010] 25 taxmann.com 227 (Delhi) (ix) CIT v. Anil Kumar Bhatia [2012] 24 taxmann.com 98 (Delhi) (x) Rajat Tradecom India (P.) Ltd. V. DCIT, 2(1), Indore [2009] 120 ITD 48 (Indore) (xi) Shivnath Rai Harnarain (India) Ltd. V. DCIT, CC-14, New Delhi [2009] 117 ITD 74 (Delhi) (xii) Ms. Shyam Lata Kaushik v. ACIT [2008] 306 ITR (A.T.) 0117 [Delhi] (xiii) Harvey Heart Hospitals Ltd. V. ACIT [2010] 130 TTJ 700 (Chennai) (xiv) Dr. Mansukh Kanjibhai Shah v. ACIT, Central Circle-2 [2011] 129 ITD 376 (Ahd.) 13. The Ld. Counsel for the assessee submitted that Section 153A bears the heading "Assessment in case of search or requisition" and that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Further, the Ld. Counsel submitted that section 153A of the Act which talks about "Assessment in case of search or requisition" should not be read in isolation but it should be read in conjunction with section 132 of the Act and that the very purpose for initiation of search is to unearth income which otherwise would not be MG Oils 12 disclosed by the assessee and consequently, addition, if any, made to the total income of an assessee should necessarily be based on some incriminating material unearthed during the course of search and that too in case of non-abate/ completed assessments as otherwise it would defeat the very purpose of carrying out search under section 132 of the Act. The Ld. Counsel also submitted that although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material and obviously an assessment has to be made under this Section only on the basis of seized material. In support of his arguments, the Ld. Counsel relied upon a plethora of judicial precedents including the judgments of the Hon’ble Jurisdictional High Court in the case of Pr. CIT Vs. Gahoi Dal & Oil Mills [I.T.A. No. 21/2019, 31/2019 and 32/2019], Hon’ble Rajasthan High Court in the case of Jai Steel (India), Jodhpur v. ACIT [2013] 259 CTR 281 (Rajasthan), Hon’ble Gujarat High Court in the case of PCIT-4 v. Saumya Construction (P.) Ltd. [2016] 387 ITR 529 (Gujarat) and Hon’ble Delhi High Court in the case of CIT (Central)-III v. Kabul Chawla [2016] 380 ITR 573 (Delhi). The Ld. Counsel also provided a list of the judicial precedents which had categorically discussed and distinguished the decisions of various Hon’ble High Courts and Coordinate Benches relied upon by the Ld. DR. 14. The Ld. Counsel for the assessee also relied upon the following written submission during the course of hearing in the case of group concern, M/s Vinod Industries, which reads as under: - “1. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes MG Oils 13 without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. ... 7. In view of the above discussion duly corroborated with the findings laid down in the landmark judicial precedents cited (supra), it can be satisfactorily concluded that the arguments of the Ld. CIT-DR that unearthing of incriminating material is not a pre- condition for invoking the provisions of section 153A of the Act do not hold water and are devoid of any merits. It is rather a well settled proposition of law that unearthing of incriminating material is a pre-requisite for making any addition to the total income of an assessee in case of a non-abate/ complete assessment. In the facts of the present case, various additions were made by the Assessing Officer to the total income of the assessee firm in case of non-abate/ completed assessment and that too in absence of any incriminating material unearthed during the course of search which therefore undermines the legality/ validity of all such additions and hence, all such addition deserve to be deleted in entirety on this legal ground itself.” 15. Accordingly, the Ld. Counsel submitted that there was no rationale behind making any addition to the total income of the assessee in case of non-abate assessments in absence of any incriminating documents found and seized during the course of search. 16. We have heard the respective parties, perused the relevant material available on record and have carefully gone through the submissions made and case laws relied upon by both the sides. We have further considered the judgments relied by the Ld. AR passed by different judicial forums. 17. In order to decide the issue as to whether the assessment years in question are abate/ non-abate and also to decide the issue that whether in the absence of any incriminating material, the completed assessment can be reiterated, we find that the identical issue has been deliberated upon in the connected group appeals in case of Vinod Industries in IT(SS)A Nos.147 to 152/Ind/2021 and CO Nos.7 to 11/Ind/2022wherein we have observed as under: - MG Oils 14 “22. On going through the findings of the Hon’ble jurisdictional High Court and various other High Courts cited supra, we have no hesitation in holding that if in relation to a non- abated assessment, no incriminating material is found during the course of search, then, in such a case, no addition or disallowance can be made in respect to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. Further, as correctly pointed out by the Ld. Counsel, the various judicial precedents relied upon by the Ld. DR are distinguishable on facts and shall not be applicable in the present case since few of those judicial precedents merely upheld the validity of proceedings initiated under section 153A of the Act and did not comment on whether any addition could be made in absence of any incriminating material in case of non-abated assessment whereas the remaining judicial precedents had been categorically discussed and distinguished in a plethora of judicial precedents cited by the Ld. Counsel. Thus, considering the entire aspect of the matter and following the binding decision of the Hon’ble jurisdictional High Court in the case of Pr. CIT Vs. Gahoi Dal & Oil Mills [I.T.A. No. 21/2019, 31/2019 and 32/2019] as well as the decisions of various other High Courts in the case of Jai Steel (India), Jodhpur v. ACIT [2013] 259 CTR 281 (Rajasthan), PCIT-4 v. Saumya Construction (P.) Ltd. [2016] 387 ITR 529 (Gujarat) and CIT (Central)-III v. Kabul Chawla [2016] 380 ITR 573 (Delhi) cited supra, we are of the considered opinion that since the A.Y. 2013-14 to A.Y. 2017-18 were non-abated assessment years, additions, if any, could have been made to the total income of the assessee in these years only on the basis of incriminating documents/ material unearthed during the course of search which is not the fact in the instant case. Thus, all the additions made by the Ld. AO in A.Y. 2013-14 to A.Y. 2017-18 deserve to be deleted and set-aside in view of the observations made hereinabove. Accordingly, we delete all the additions made by the Ld. AO in A.Y. 2013-14 to A.Y. 2017-18 on this legal ground itself. Hence, ground raised by the assessee in all the five cross objections vide CO 7/Ind/2022 for A.Y. 2013-14, CO 8/Ind/2022 for A.Y. 2014-15, CO 9/Ind/2022 for A.Y. 2015-16, CO 10/Ind/2022 for A.Y. 2016-17 and CO 11/Ind/2022 for A.Y. 2017-18 are allowed.” 18. Upon consideration of above and following the binding decision of the Hon’ble jurisdictional High Court in the case of Pr. CIT Vs. Gahoi Dal & Oil Mills [I.T.A. No. 21/2019, 31/2019 and 32/2019] as well as the decisions of various other High Courts in the case of Jai Steel (India), Jodhpur v. ACIT [2013] 259 CTR 281 (Rajasthan), PCIT- 4 v. Saumya Construction (P.) Ltd. [2016] 387 ITR 529 (Gujarat) and CIT (Central)-III v. Kabul Chawla [2016] 380 ITR 573 (Delhi) (supra), we are of the considered opinion that since the A.Y. 2015-16 to A.Y. 2016-17 were non-abate assessment years, additions, if any, could have been made to the total income of the assessee in these years only on the basis of incriminating documents/ material unearthed during the course of search. However, as discussed supra, all the additions in A.Y. 2015-16 to A.Y. 2016-17 were made by the Ld. AO in absence of any incriminating documents/material unearthed during the course of search. Therefore, we are of the MG Oils 15 considered opinion that all the additions made by the Ld. AO in A.Y. 2015-16 to A.Y. 2017-18 deserve to be deleted in view of the observations made hereinabove. Accordingly, we delete all the additions made by the Ld. AO in A.Y. 2015-16 to A.Y. 2017-18 on this legal ground itself. Hence, ground raised by the assessee in all the three cross objections vide CO 12/Ind/2022 for A.Y. 2015-16, CO 13/Ind/2022 for A.Y. 2016-17 and CO 14/Ind/2022 for A.Y. 2016-17 are allowed. So far as A.Y. 2017-18 is concerned, we do not find any substance in the argument advanced by the Ld. AR. The same cannot be treated as unabated assessment. Thus, the CO No. 14/Ind/2022 is rejected. Revenue’s Appeal in IT(SS)A 155/Ind/2021 for A.Y. 2017-18: 19. We have taken up the present appeal for adjudication first since the grounds of appeal taken in revenue’s appeals for all the other years’ are similar to the grounds of appeal taken in the present appeal i.e. IT(SS)A 155/Ind/2021. 20. The Revenue has raised the following grounds in the present appeal: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 115,62,08,851/- made by the assessing officer u/s 68 of the I.T. Act, 1961 by treating sales as non-genuine and amount received against such sales as unexplained cash credit. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 8,70,50,489/- made by the assessing officer on account of unsecured loan and interest paid thereon u/s 68 of the I.T. Act, 1961. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 2,84,00,000/- made by the assessing officer on account of unexplained capital introduced by partners by treating the same as unexplained cash credit u/s 68 of the I.T. Act, 1961. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition amounting to Rs. 5,24,00,000/- made by the assessing officer on account of unaccounted cash deposited in the bank account during demonetization period.” Ground No. 1:- 21. The Revenue through this ground of appeal has challenged the deletion of addition of Rs. 115,62,08,851/- made by the Ld. AO on account of disbelieving the MG Oils 16 sales and treating the amount received against such sales as unexplained cash credit/ deposit under section 68 of the Act. 22. The brief facts leading to the case are that the assessee made sales to various firms which were duly accounted for in its books of accounts. However, it appeared to the Ld. AO that few of the firms to whom sales were made by the assessee were suspicious firms since cash was deposited in the bank accounts of those firms and funds were thereafter transferred to the bank account of the assessee. The Ld. AO on the basis of various other findings noted in the assessment order reached to a conclusion that those firms were actually bogus firms and that the entire amount of cash deposited in the bank accounts of such firms actually pertained to the assessee who introduced cash of undisclosed means in its books of accounts through sales shown to such bogus firms. Accordingly, the Ld. AO made addition of Rs. 115,62,08,851/- to the total income of the assessee on account of disbelieving the sales and treating the amount received against such sales as unexplained cash credit/ deposit. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) deleted the addition of Rs. 115,62,08,851/- made by the Ld. AO. Hence, the instant appeal has been filed before us by the Revenue. 23. At the outset, the Ld. Counsel for the assessee pointed out to the fact that correct amount of addition in dispute should have been Rs. 101,29,78,913/- and not of Rs. 115,62,08,851/- as contended by the Revenue. The Ld. Counsel thereafter submitted that there was no rationale for making separate addition to the total income of the assessee on account of disbelieving the sales and treating the amount received against such sales as unexplained cash credit/ deposit since the assessee had already accounted for the sales made to these firms in its regular books of accounts and the profit earned thereon had already been offered for tax in the income-tax return of the assessee. The Ld. Counsel further emphasized on the fact that the amount of cash which was deposited in the bank accounts of these firms was thereafter transferred to the bank MG Oils 17 account of the assessee and was adjusted against the amount of sales shown by the assessee to these firms. Accordingly, the Ld. Counsel submitted that there was no justification for making separate addition to the total income of the assessee on account of amount received from these firms since such amount was adjusted against sales shown by the assessee which had already been credited in the profit and loss account. He further submitted that the action of the Ld. AO in taxing the amount received against sales made to these firms led to double taxation of the same amount since it ultimately led to taxing the figure of sales as well as taxing the amount received against such sales which was wholly unwarranted. The Ld. Counsel also vehemently argued that the Ld. AO did not dispute the amount of ‘cash sales’ shown by the assessee and as a corollary, there was no justification for doubting the amount of cash deposited in the bank account of alleged suspicious firms which was thereafter transferred to the bank account of the assessee and was adjusted against the sales shown by the assessee since such transaction should have been treated at par with the transaction of cash sales. 24. The Ld. Counsel for the assessee challenged the addition made by the Ld. AO on multiple grounds which are listed hereunder: (i) Sales and production shown by the assessee were duly accepted by the assessing officer herself as well as by the Sales Tax Department and Excise Department (ii) The amount of cash deposited in the bank accounts of these alleged suspicious firms was thereafter transferred to the assessee and was adjusted against the amount of sales which were already credited in the Profit & Loss Account of the assessee and the profit earned thereon was already offered for tax in the income-tax return (iii) Quantitative records of opening stock, purchases, production, sales and closing stock were maintained on a day-to-day basis and such quantitative records were never disputed by the assessing officer (iv) Purchases and stock tally maintained by the assessee were never doubted by the assessing officer (v) The amount realized from sale of finished goods was utilized towards making payment for purchase of raw material which was never doubted by the assessing officer (vi) The entire amount of alleged bogus sales could not have been added to the total income of the assessee and only the element of net profit embedded in such alleged bogus sales could have been subject to tax MG Oils 18 (vii) No undisclosed assets were found either at the premises of the assessee or at the premises of any of its partners’ during the course of search more so when it is a settled position of law that income-tax is a tax on ‘real income’ only (viii) The entire amount of alleged bogus sales could not have been added to the total income of the assessee and only the peak balance could have been subject to tax 25. The Ld. Counsel also filed various documentary evidences such as ledger account of these firms in the books of the assessee, sales invoices along with transportation bilties and sell patty (wherever available) and relevant extract of the bank statement of these firms so as to substantiate the genuineness of sales made by the assessee to these firms. The Ld. Counsel relied upon a plethora of judicial precedents in support of his aforesaid contentions. The Ld. Counsel also provided detailed explanation/ justification with respect to each and every adverse finding of the Ld. AO noted in the assessment order on the basis of which the aforesaid addition was made to the total income of the assessee. We have further considered inter alia the following submission made by the assessee in the synopsis submitted before us: “8.1.1] The Department in these grounds of appeal has challenged the action of Ld CIT(A) of deleting additions of Rs. 62,78,04,718/-, Rs. 115,62,08,851/- and Rs. 18,36,76,000/- made to the total income of the respondent for Assessment Years 2016-17 to 2018-19 respectively by treating the sales as non-genuine and amount received against such sales as unexplained cash credit/ deposit under section 68 of the Income-Tax Act, 1961 on the following counts: S. No Assessment Year Addition on account of treating sales as non-genuine [in Rs.] Correct amount of sales [in Rs.] 1. 2016-17 62,78,04,718 62,86,25,326 2. 2017-18 115,62,08,851 101,29,78,913 3. 2018-19 18,36,76,000 18,54,31,835 ... ...” 26. Accordingly, the Ld. Counsel submitted that there was no rationale for making addition to the total income of the assessee on account of disbelieving the sales and MG Oils 19 treating the amount received against such sales as unexplained credit/ deposit under section 68 of the Act. 27. Per contra the Ld. DR supported the findings of the Ld. AO. 28. We have heard the respective parties, perused the relevant material available on record and have carefully gone through the submissions made and case laws relied upon by both the sides. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 115,62,08,851/- made on account of disbelieving the sales and treating the amount received against such sales as unexplained credit/ deposit under section 68 of the Act. We find that the Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: “4.5.13. On perusal of the assessment order as passed by the assessing officer, submissions put forth and supporting documents as filed by the appellant and decisions as referred, it appears that these are the undisputed facts in the present case. The purchases as shown by the appellant was never disputed by the assessing officer. The cash deposited in the bank account of the alleged firm were then transferred in the bank account of the appellant firm and was adjusted against the sales as shown by the appellant firm. Cash sales as shown by the appellant firm was duly accepted by the assessing officer. The amount of sales as shown was duly credited in the trading account of the appellant firm. The total amount of cash deposited in the bank account of the alleged parties was added to the total income of the appellant. The said amount was added in addition to the sales which has already been shown by the appellant and duly credited the same in the trading account. The amount as received by the appellant firm from these parties were utilised towards purchase of raw material. 4.5.14. The assessing officer merely on the basis of cash deposited in the bank account of the alleged parties doubted the genuineness of the sales as shown by the appellant firm. The assessing officer has accepted cash sales as shown by the appellant firm as genuine and no adverse view was taken for the same. In the statement of the proprietor as recorded by the assessing officer and reproduced in the assessment order, no one named the appellant firm and its partners. The appellant firm has no concerned who so ever opened the bank account and used the same but facts remain that goods were sold by the appellant on receipt of amount from these parties and proceed of the same was duly credited in the Trading account as sales. The assessing officer not doubted the genuineness of the purchases as shown by the appellant, in that case there was no justification for doubting the sales. If the assessing officer added the amount received from these parties as income in that case sales as shown MG Oils 20 by the appellant requires to be reduced by that amount but the assessing officer did not reduce the amount of sales as shown by the appellant firm. The amount as received by the partners from these parties through Pandit Ji/Sharmaji was deposited in their bank account through the staff of the appellant firm. Thus, it appears that addition was made by the assessing officer merely on the basis of presumption. The assessing officer was also grossly erred in adding the entire amount to the total income. If the said amount of cheques not found recorded in the books of account of the appellant in that case also only net profit can be added to the total income of the appellant firm. However, in the present case, the cheque as received were duly adjusted against the sales as shown by the appellant firm and therefore profit earned on the sales have already been offered for tax. Thus, even net profit cannot be added in the case of the appellant firm. The assessing officer also grossly erred in adding the entire amount of cash deposited in the bank account of these parties as income more so when cash was not deposited in a particular date but the cash was deposited from time to time for making the payment against the sales of the appellant firm. The appellant firm sold goods to these parties and in turn received cheques from these parties, the amount as received was used towards purchase of Crude oil as raw material and after refine the same , the same was again sold and cheques were received. Hence, the assessing officer was not justified in adding the entire amount of cash deposited in different dates in the year to the total income of the appellant firm. That even if the said transaction were not recorded in the books of account in that case also only net profit can be added to the total income of the appellant. However, in the present case in hand, the amount received from these parties were properly recorded in the regular books of account and adjusted the same against the sales as shown by the appellant firm which was duly accepted by the assessing officer herself and also by the sales tax department. Thus, there was no reason for doubting the genuineness of the sales as shown by the appellant firm. As stated, in the present case in hand, the appellant firm has duly shown the amount as received from these parties as its sales and the same was duly credited in the Profit & Loss account. 4.5.15. Considering all the above observation and detailed submissions put forth, supporting documents of the appellant and decisions as referred and it is held that the assessing officer is not justified in making the additions. Therefore, the additions made by the AO amounting to Rs: 62,78,04,718/- for A.Y. 2016-17, Rs: 115,62,08,851/- for A.Y. 2017-18 and Rs: 18,36,76,000/- for the A.Y. 2018-19 on account of unexplained cash deposit u/s 68 of the I.T. Act, 1961 is Deleted. Therefore, the appeal on these grounds is Allowed. Since the additions as made by the assessing officer on account of unexplained cash deposit u/s 68 of the I.T. Act, 1961 have already been deleted on merit. Therefore, the charging of tax liability as per amended provisions of section 115BBE on these grounds of appeal is academic in nature and having no impact on the fate of these grounds.” 29. The above findings of the Ld. CIT(A) have not been controverted by the Ld. DR. The facts discussed above squarely reveal that the assessee made sales to various MG Oils 21 firms which were duly accounted for in its regular books of accounts and profit earned thereon was duly offered for tax in its income-tax returns. We find that the genuineness of sales made by the assessee was doubted by the Ld. AO merely for the reason that cash deposited in the bank accounts of the alleged suspicious firms was thereafter transferred to the bank account of the assessee and also for the reason that the proprietors/ partners of the those firms in their statements recorded on oath and in the affidavits categorically denied the fact of entering into any business transaction with the assessee. In this regard, we find strong force in the contentions of the Ld. Counsel that when the Ld. AO herself did not dispute the amount of cash sales shown by the assessee, there was no occasion for her to dispute the sales made by the assessee to these firms wherein cash was deposited in the bank accounts of these firms and thereafter transferred to the bank account of the assessee since such transactions were actually at par with the transaction of cash sales made by the assessee. Further, we also observe that genuineness of sales made by the assessee could not have been doubted merely for the reason that the proprietors/ partners of those firms in their statements recorded on oath and in the affidavits categorically denied the fact of entering into any business transaction with the assessee since the proprietors/ partners of the those firms categorically admitted the fact that they rented out the firms for use to Shri Narayandas Hablani and various other persons in lieu of some money and it was for this reason that they were unaware about the transactions made by those firms. The proprietors/ partners of those firms in their statements recorded on oath never stated that their firms were being used by the assessee or by any of its partners. The proprietors/ partners of those firms signed the papers of KYC of banks and other documents on the directions of Narayandas Hablani which further substantiated the fact that those firms were actually operated by Shri Narayandas Hablani, CA Sanjay Sodani and various other persons. Hence, we are of the considered opinion that there was no justification for drawing any adverse inference in the case of the assessee on the basis of statements/ affidavits of the proprietors/ partners of those firms. We further observe that the MG Oils 22 various other adverse findings of the Ld. AO noted in the assessment order could not have been relied upon to draw any adverse inference in the case of the assessee since the Ld. Counsel duly controverted and provided satisfactory explanation regarding each and every adverse finding of the Ld. AO noted in the assessment order. 30. The Ld. Counsel also relied upon the following documentary evidences to substantiate the genuineness of sales made by the assessee to those firms:- Assessment Year 2016-17 S. No Description of documents Page No. of Paper Book 1 M/s Akhilesh Enterprises – Addition of Rs. 28,59,11,401/- 1.1 Ledger account in the books of the respondent 170-175 1.2 Sale invoices along with transportation bilties 176-569 1.3 Relevant extract of the bank statement 570-602 2 M/s Vinayak Traders – Addition of Rs. 11,58,20,863/- 2.1 Ledger account in the books of the respondent 603-605 2.2 Sale invoices along with transportation bilties and sell patty 606-860 2.3 Relevant extract of the bank statement 861-876 3 M/s Welcome Overseas – Addition of Rs. 7,65,41,112/- 3.1 Ledger account in the books of the respondent 877-878 3.2 Sale invoices along with transportation bilties 879-978 3.3 Relevant extract of the bank statement 979-985 4 M/s Universal Trading Company – Addition of Rs. 15,03,51,950/- 4.1 Ledger account in the books of the respondent 986-988 4.2 Sale invoices along with transportation bilties 989-1200 MG Oils 23 4.3 Relevant extract of the bank statement 1201-1214 Assessment Year 2017-18 S. No Description of documents Page No. of Paper Book 5 M/s Akhilesh Enterprises – Addition of Rs. 1,40,21,853/- 5.1 Ledger account in the books of the respondent 215 5.2 Sale invoices along with transportation bilties 216-231 5.3 Relevant extract of the bank statement 232-234 6 M/s Salasar Enterprises – Addition of Rs. 9,19,24,496/- 6.1 Ledger account in the books of the respondent 235-238 6.2 Sale invoices along with transportation bilties and sell patty (wherever available) 239-356 7 M/s Abhishek Enterprises – Addition of Rs. 15,73,06,066/- 7.1 Ledger account in the books of the respondent 357-362 7.2 Sale invoices along with transportation bilties and sell patty (wherever available) 363-618 7.3 Relevant extract of the bank statement 619-636 8 M/s Shyam Enterprises – Addition of Rs. 9,51,14,357/- 8.1 Ledger account in the books of the respondent 637-640 8.2 Sale invoices along with transportation bilties and sell patty 641-795 8.3 Relevant extract of the bank statement 796-809 9 M/s Santosh Enterprises – Addition of Rs. 9,54,21,203/- MG Oils 24 9.1 Ledger account in the books of the respondent 810-813 9.2 Sale invoices along with transportation bilties and sell patty 814-972 9.3 Relevant extract of the bank statement 973-986 10 M/s Sandeep Enterprises – Addition of Rs. 18,19,94,576/- 10.1 Ledger account in the books of the respondent 987-993 10.2 Sale invoices along with transportation bilties and sell patty 994-1313 10.3 Relevant extract of the bank statement 1314-1334 11 M/s Nath Enterprises – Addition of Rs. 18,06,22,653/- 11.1 Ledger account in the books of the respondent 1335-1341 11.2 Sale invoices along with transportation bilties 1342-1553 11.3 Relevant extract of the bank statement 1554-1571 12 M/s Welcome Overseas – Addition of Rs. 19,65,73,709/- 12.1 Ledger account in the books of the respondent 1572-1579 12.2 Sale invoices along with transportation bilties 1580-1813 12.3 Relevant extract of the bank statement 1814-1831 Assessment Year 2018-19 S. No Description of documents Page No. of Paper Book 13 M/s Salasar Enterprises – Addition of Rs. 18,36,76,000/- 13.1 Ledger account in the books of the respondent 170-177 13.2 Sale invoices along with transportation bilties 178-369 13.3 Relevant extract of the bank statement 370-389 MG Oils 25 31. On perusal of the documentary evidences mentioned hereinabove, we are of the considered opinion that the assessee satisfactorily discharged the primary onus cast upon it to substantiate the genuineness of sales made by it to those firms. 32. We also find strong force in the various contentions of the Ld. Counsel challenging the addition made by the Ld. AO on account of disbelieving the sales and treating the amount received against such sales as unexplained credit/deposit. We observe that sales shown by the assessee were duly accepted by the Ld. AO since no adjustment was made to the figure of sales despite the fact that the Ld. AO herself alleged that the sales made to the suspicious firms were bogus sales. We also find that sales and production shown by the assessee were duly accepted by the Sales Tax Department and Excise Department respectively and accordingly, there was no occasion for disbelieving the sales shown by the assessee. 33. We observe that the assessee made cash sales of Rs. 18,42,83,942/-, Rs. 24,45,54,024/- and Rs. 53,98,44,964/- during the Financial Years 2015-16 to 2017-18 respectively which was not doubted by the Ld. AO and hence, there was no occasion for doubting the sales made by the assessee to those firms since sales shown by the assessee, whether made to those firms or to some other party in cash, were already credited in its Profit & Loss account and the only difference in the present case was that instead of directly depositing the amount of cash in the bank account of the assessee, the amount of cash was deposited in the bank accounts of those firms and was thereafter transferred to the bank account of the assessee which did not make any difference when the transaction was looked at in totality. Accordingly, we are of the considered opinion that there was no justification for doubting the sales shown by the assessee to those firms when the Ld. AO herself accepted the amount of cash sales shown by the assessee. We also agree with the contentions of the Ld. Counsel that if the Ld. AO did not accept the receipt of the aforesaid amount as sale proceeds and MG Oils 26 treated it as income from undisclosed sources, sales figure to that extent should have been reduced to avoid double taxation of the same amount. 34. Further, we find that cash deposited in the bank accounts of those firms was subsequently transferred to the bank account of the assessee and was adjusted against the amount of sales which were already credited in the Profit & Loss Account of the assessee. Hence, addition of the amount of cash deposited in the bank accounts of those firms led to double taxation of the same amount i.e. taxation of sales as well as taxation of amount received against sales which in our considered opinion, was not correct. 35. It is also an uncontroverted finding that the assessee maintained its day-to-day quantitative records of opening stock, purchases, production, sales and closing stock which were never disputed by the Ld. AO. The assessee was also subject to tax audit and quantitative details maintained by the assessee in respect of raw material and finished goods were also certified by an independent chartered accountant in the tax audit reports filed in Form 3CB-3CD. Accordingly, we are of the opinion that there was no justification for disbelieving the sales shown by the assessee since it is a well settled proposition of law that sales shown by an assessee cannot be doubted or considered as non-genuine until and unless it is established that the assessee has either not maintained day-to-day quantitative records of purchases, sales and stock or purchases as shown by the assessee are non-genuine. 36. Further, it is an undisputed fact that purchases and stock tally maintained by the assessee were never doubted by the Ld. AO. Accordingly, we are of the opinion that there was no occasion for disbelieving the sales shown by the assessee since it is a well settled position of law that the transaction of purchases and sales are two limbs of a single transaction and if the assessing officer does not doubt the genuineness of purchases and stock tally is also accepted by the assessing officer, then, there arises absolutely no question for doubting the sales made by the assessee. It is also MG Oils 27 undisputed that the entire amount realized from sale of finished goods was utilized towards making payment for purchase of raw material which was never doubted by the Ld. AO. The purchases made by the assessee were not doubted and entire payment towards such purchases was made through banking channels. Therefore, we are of the considered opinion that there was no rationale for disbelieving the sales shown by the assessee since the amount realized from sale of refined oil was utilized towards making payment for purchase of crude oil and if the transaction of purchase of crude oil was accepted as correct and genuine wherein entire payment was made out of amount realized from sale of refined oil, then, there remained no scope for disbelieving the corresponding sales shown by the assessee. 37. We further agree with the contentions of the Ld. Counsel that even if the sales made to those firms is considered as bogus/ non-genuine, the entire amount received against such sales could not have been taxed as it would lead to taxation of turnover instead of taxation of profits which is not justifiable. The Ld. Counsel submitted that even if sales are made out of the books, total sales cannot be regarded as profit of the assessee and only the element of net profit embedded in such sales could be subject to tax. The reliance placed in this regard on various judicial precedents including the judgments of the Hon’ble jurisdictional High Court in the case of CIT v. Balchand Ajit Kumar - [2003] 263 ITR 610 (Madhya Pradesh) and Man Mohan Sadani v. CIT - [2010] 188 Taxman 277 (Madhya Pradesh) seems appropriate. Hence, we concur with the contentions of the Ld. Counsel that no addition was justified in the present case since the amount received by the assessee from those firms was against sales made to those firms which were duly credited in the profit and loss account and net profit earned thereon had already been offered for tax in the income-tax return of the assessee thereby leaving no scope for the Ld. AO to make any further addition to the total income of the assessee. MG Oils 28 38. Last but not the least, it seems on perusal of the order passed by the Ld. CIT(A) that he concluded that rejection of books of accounts by the Ld. AO was not justified in light of the detailed submission made by the assessee during the course of appellate proceedings. We further observe that the Ld. CIT(A) had given detailed reasons in his order for concluding that rejection of books of accounts under section 145(3) of the Act was high-handed and legally unjustifiable. It is also an undisputed fact that the Ld. AO has not taken the said ground of appeal regarding rejection of books of accounts in the instant appeal filed before us. Hence, we are of the opinion that issue of rejection of books of accounts has attained finality in favour of the assessee and we are in agreement with the findings of the Ld. CIT(A) on this count. In view of the detailed observations made hereinabove, we have no hesitation in holding that there was no justification for the Ld. AO to make addition on account of disbelieving the sales and treating the amount received against such sales as unexplained credit/ deposit. 39. While holding so, we have considered the judgment of the Hon’ble jurisdictional Bench of ITAT in the case of ACIT 1(1), Ujjain Vs Dewas Soya Limited [ITA No. 336/Ind/2012] wherein the Hon’ble ITAT was pleased to observe as follows: “4..................In view of the above uncontroverted finding more specifically when the Assessing Officer has not doubted the genuineness of the purchases and when the stocks tally has been accepted by the Assessing Officer then there is no reason to doubt the sales. The broker from Gwalior who arranged the sales with the said party also confirmed in his statement recorded by the department confirming that he made the dealing with M/s A.K. Impex and consequently the assessee recorded the sales in its regular books of accounts. Even otherwise, the goods were supplied to the parties after receiving the advance payments which were credited through cheques/DDs/RTGs, etc. Therefore, we hold that the CIT(A) has rightly come to the conclusion that the addition made by the Assessing Officer u/s 68 of the Act by considering the sale proceeds as cash credits cannot be sustained. Likewise, the learned CIT(A) very elaborately dealt with the issue with regard to other parties like M/s Pravin Trading Co., M/s Mohan Traders and Maa Bhagwati Traders, etc. wherein the goods were delivered on the same day and sale invoices were issued quoting cross numbers evidencing that such receipts were sale proceeds credited to the profit and loss account of the assessee. The entries were made in the stock register regarding sales which were in the nature of counter sales to these parties and such counter sales were doubted by the Assessing Officer without bringing any evidence on record. MG Oils 29 Uncontrovertedly, the brokers to whom brokerage was paid after deduction of TDS have also confirmed sale effected to these parties while recording their statement before the department. There is a further finding in the impugned order that the assessee effected sales of oil in tankers 279 dealers showing turnover to the tune of Rs. 67.63 crores out of which 6 dealers were out of the State of Madhya Pradesh. The transaction of cash deposit was in the nature of counter sale and delivery was given on the same day whereas DD/RTGS were received in advance either directly or through brokers against supplies which were effected within a week’s time. Uncontrovertedly the assessee was maintaining sale/stock register on day to day basis containing details of whole year which were placed before the learned CIT(A). It has been specifically observed by the learned first appellate authority that the assessee was maintaining complete quantitative records relating to purchase, production and sale which were properly accounted for. So far as cancellation of TIN by the Commercial Tax Authority is concerned, it was neither informed by the authorities to the assessee nor by the purchaser himself, therefore, at the later stage, the assessee cannot be punished for the deeds of somebody. Likewise, C-forms were issued and given to the assessee. The sale of such magnitude is normally possible through brokers and even otherwise so far as doing the business is concerned, it is up to the assessee. It is pertinent to mention here that evidence is furnished during first appellate stage by the assessee was forwarded to the Assessing Officer along with the written submissions and the copies of the comments of the Assessing Officer were given to the assessee, therefore, it cannot be said that the Assessing Officer was not provided any opportunity. Only after calling remand report the CIT(A) has decided the issue on merits. Under these circumstances there is no merit in the ground taken by Revenue with regard to violation of Rule 46A. If the purchasing dealers did not account for the transaction in their books, the assessee cannot be penalised. The learned CIT(A) has already dealt with the issue by following various pronouncements which are available at page 10 of the impugned order which has been reproduced above. The Hon’ble Apex Court in the case of Laxmichand Baijnath v. CIT; 35 ITR 416 held that amount credited in business books can normally be presumed as business receipts. The Hon’ble Patna High Court in Bahri Brothers (154 ITR 244) held that identity of creditors is not relevant for cheque transactions. In such a situation, if part payment through cheque/RTGS from the same party is accepted, how the cash sale which has been duly recorded can be doubted unless and until contrary material is brought on record. So far as the meaning of expression “books” with respect to section 68 is concerned, the Hon’ble Punjab & Haryana High Court in the case of Smt. Shantadevi; 171 ITR 532 held that such books denotes books of assessee himself and not of other assessee, therefore, the assessee is responsible for his books only and not of the books of other parties. Detailed findings recorded by CIT(A) is as per material on record, therefore, do not warrant any interference. In this view of the matter, we find no infirmity in the order of the learned CIT(A) and accordingly affirm the same. In the result, the appeal of the Revenue stands dismissed. 40. We have further considered the judgment of the Hon’ble ITAT Delhi Bench ‘C’ in the case of ACIT v. Inlay Marketing (P.) Ltd. [2015] 60 taxmann.com 431 (Delhi - Trib.) wherein the Hon’ble ITAT was pleased to observe as follows: “50. Learned Authorised Representative contended that when the Revenue has accepted the amount of opening stock and the purchases made by the assessee during the year, then the sales cannot be doubted. The Authorised Representative further contended that the AO was not justified in observing that the entire sales of the assessee represented its income from undisclosed sources. The Authorised Representative supported the impugned order and MG Oils 30 submitted that the AO made addition without any justified and cogent reason which was rightly deleted by the CIT(A). 51. On careful consideration of impugned order in the light of contention and submissions of both the parties, we observe that since from the earlier part of this order, we have upheld the deletion of additions made by the AO on account of rejection of purchases made by the assessee during the year, therefore, when a major part of the sales was made against the opening stock and the purchases made during the year, then the sales is nothing but the conversion of stock into liquidity and that too when the profit earned from these purchases and sales activities has been already offered to tax, then it cannot be inferred that the sale proceeds represent income from undisclosed sales of the assessee. In this situation, we can easily infer that the AO made additions on the basis of conjectures and surmises which was rightly deleted by the CIT(A). We have no reason to interfere with the findings of the CIT(A) in the impugned order in this regard. Accordingly, ground No. 2 of the Revenue being devoid of merits is dismissed.” 41. We have considered the judgment of the Hon’ble ITAT Delhi Bench ‘C’ in the case of Eland International (P.) Ltd. v. DCIT [2009] 124 TTJ 554 (Delhi) wherein the Hon’ble ITAT has been pleased to observe as follows: “5.1. Detailed submissions were made before the learned CIT(A) and evidence was produced to show that the goods purchased from these parties were sold. The sale could not have taken place unless the goods were purchased. After analyzing the details furnished by the assessee, the learned CIT(A) mentioned that the AO had accepted the trading results of the assessee. In view thereof, addition in respect of purchases and sales could not have been made under section 68 of the Act. His findings are contained in para 5 of his order, which are reproduced below: "5. I have considered the submissions made by the learned Authorised Representative. As stated above, there is no doubt that the AO made the addition of Rs. 6,10,95,391 on account of sale and purchase relating to M/s Allure Creations, M/s Shashi Sales & Marketing (P) Ltd., M/s M.V. Marketing (P) Ltd. and M/s Ganesh Textile for the reason that the appellant has failed to furnish the documentary proof regarding the genuineness of the transaction entered into with these parties. The Authorised Representative also referred to the fact that sale and purchase were duly reflected in the sales-tax returns filed by the appellant and which has been duly accepted by the STO. On merits, I have tried to analyze and co-relate the purchases and sales effected by the appellant vis-a-vis various parties. It is observed that the AO has treated M/s Allure Creations as a non-genuine party and addition has been made for sales of Rs. 89,82,262 and purchases of Rs. 90,06,627 effected by the appellant with this party. If the AO's contention is accepted then it creates a paradoxical situation as it can be seen that the material purchased from M/s Allure Creations has been sold at a profit to M/s Ethenic Creations (P) Ltd., M/s Shashi Sales Marketing (P) Ltd., M/s M.V. Marketing (P) Ltd., M/s Ganesh Textiles and M/s Rabik Exports (P) Ltd. If all the purchases are taken as bogus purchases then it is beyond comprehension as to how some of the sales are taken as genuine and others are taken as non-genuine. Similar is the case with M/s Ganesh Textiles from whom the appellant has purchased total material worth Rs. 63,59,225.10 and out of which sales have been made to M/s Akshay Sales (P) Ltd., M/s Rabik Exports Ltd., M/s Ethenic Creations (P) Ltd. and M/s Allure Creations. First three parties are considered as genuine parties by the AO and if this is the case then how the total amount of the sales can be added to the total income MG Oils 31 of the appellant. Similar is the case with M/s M.V. Marketing (P) Ltd. and M/s Shashi Sales & Marketing (P) Ltd. from whom the appellant purchased dress material worth Rs. 51,86,313 and Rs. 1,00,61,076.35 respectively and the sales have been made to parties like Akshay Sales (P) Ltd., M/s Allure Creations, M/s Rabik Exports Ltd. and M/s Ethenic Creations (P) Ltd. out of which three of the above-mentioned parties are taken as genuine by the AO. It has also been noticed that on all these transactions the appellant has shown profit and paid taxes accordingly. It can never be a case where the purchases/sales can be taken as bogus for the reasons that if purchases are bogus then there cannot be any sales and vice versa and in that eventuality there cannot be any profit which can be offered to tax. In view of these circumstances, I agree with the learned Authorised Representative that the AO has not marshalled the facts in proper perspective and the addition has been made without any basis. The copy of accounts of all the parties in question have been looked into and it is seen that there is no cash/cheques transaction and/or there are no cash credit/credit entries in the books of the appellant for which s. 68 of IT Act, 1961 can be invoked. In the case of Sona Electric Company v. CIT[1984] 43 CTR (Delhi) 287 the jurisdictional Delhi High Court held that section 68 of the IT Act, 1961 makes it clear that a cash credit entry in the assessee's books of account can be rejected by the ITO on cogent grounds. When such grounds are themselves based on no evidence, the question of raising a presumption against the assessee does not arise'. In the case of Annamaria Travels & Tours (P) Ltd. v. Dy. CIT [2005] 95 TTJ (Delhi) 71, the Hon'ble jurisdictional Tribunal held that 'the assessee has not received any moneys from the airline companies. The credit represents amount due to them for purchase of tickets, section 68 comes into play only where any sum is found credited in the account of the third person and the assessee unable to give satisfactory explanation in respect of the nature and source of the sum. The section cannot apply where goods or services are acquired by the assessee on credit and an entry is made crediting the liability on the account of the person from whom the goods and services are acquired' and the conclusion drawn is that 'when payment to creditors were not doubted and commission income in respect of those very tickets has been assessed as income of the agent, amounts standing to the credit of airlines towards purchase of tickets could not be added under section 68'. Similar is the case with CIT v . Pancham Dass Jain [2006] 205 CTR (All.) 444 the headnotes of which says as follows: 'Income—Cash credit—Credit purchase-Provisions of section 68 are not attracted to amounts representing purchases made on credit-Tribunal has recorded a categorical finding of fact based on appreciation of materials and evidence on record that the AO has accepted the purchases, sales as also the trading result disclosed by the assessee—It has also recorded a finding that the two amounts in question represented the purchases made by the assessee on credit—Therefore, addition of said amounts could not be made under rule 68.' In view of the decisions mentioned above along with the facts and circumstances of the case, especially when the AO has accepted the trading results of the appellant, then there cannot be any addition on account of sale/purchase under section 68 of the Act. I am inclined to grant relief to the appellant on this point well as on the basis that there cannot be any sales/purchases in absence of the purchases/sales which have been held by the AO as bogus but on which the appellant has shown profit and paid taxes. Accordingly, I direct the AO to delete the addition made under section 68 of the Act. The appellant shall get relief on this point." MG Oils 32 5.4. We have considered the facts of the case and rival submissions. From the submissions made before us, it is clear that the transactions of purchase and sale were recorded in the books of account and these transactions led to profit to the assessee, which was brought to tax. If sales have been effected out of purchases made from these parties, then, it cannot be said that the purchases were bogus. The finding of bogus sale can only lead to the inference that the corresponding amount should be deleted from the turnover of the assessee. The AO has also not rejected the books of account to estimate profit on these transactions in case it was a firm finding that purchases and sales were bogus..............In absence of displacing the finding of the learned CIT(A) and the fact that the assessee showed profit from these transactions, it is held that there is no such error in the order of the learned CIT(A) which requires correction from us. Thus, this ground is dismissed.” 42. We have also considered the judgment of the Hon’ble Delhi High Court in the case of J.M. Wire Inds. v. CIT [2012] 18 taxmann.com 297 (Delhi) wherein the Hon’ble Court categorically held that if the receipt of amount as sale proceeds is not accepted by the Assessing Officer and it is treated as income from undisclosed sources of the assessee, then, sales figure to that extent should be reduced. The relevant portion of the judgment is as follows: “3. Mr. Aggarwal, learned counsel for the assessee, has proceeded on the premise that the order of the Assessing Officer be treated aforesaid receipt as income from undisclosed sources may be considered as correct. He has, however, made a neat submission before us viz. once the Assessing Officer had not accepted the receipt of the aforesaid amount as sale proceeds and treated it as income from undisclosed sources, sale figures to that extent should have been reduced. He contends that once the receipt is treated as income of Rs. 3 lacs from undisclosed sources and the Assessing Officer has not treated to it be the receipt qua sale proceeds, then the necessary consequence would be that the sale figures shown by the assessee for the relevant year would be reduced by this amount. He points out that whether the aforesaid amount is shown as receipt against sale proceeds or income from undisclosed sources, it would not make any difference as the income chargeable to tax would remain the same.........This submission of Mr. Aggarwal is not without substance. Once the Assessing Officer took the view that M/s Sandeep Wire Industries is not traceable and a non-existing entity, therefore, no sale was made to the said firm. No doubt, the Assessing Officer could consider the aforesaid receipt as income from undisclosed sources. It was also necessary for the Assessing Officer to reduce the total sale figure. This is more so, when there is no dispute about the figures of opening balance and closing balance disclosed by the assessee as those figures are accepted by the AO. 4. We may also note in this behalf that the assessee had taken this specific plea, in the alternative i.e. without prejudice to his contention that the sales were actually made and the receipt should not have been received as income from undisclosed sources before the CIT(A) as well as Income Tax Appellate Tribunal. However, the said plea was rejected by both these authorities observing that in order to accept this plea further evidence was required to be produced which was in the knowledge of the assessee. We fail to understand any rationale behind such a reasoning, it is stated at the cost of repetition that when there is no dispute about the opening balance and closing balance, there is no further evidence which could be produced MG Oils 33 by the assessee. This is moreso when it is the Assessing Officer who disbelieved the version of the assessee, though the assessee was maintaining that it had actually made the sales. Moreover, the Assessing Officer did not deal with the issue from this angle at all and such a reasoning adopted by the CIT(A) and ITAT was based on surmises and imagination. 5. As a result, we answer this Reference in favour of the assessee and against the Revenue.” 43. In light of the facts re-iterated above and after going through the findings of the Hon’ble High Court and Coordinate Benches cited supra, we have no hesitation in holding that the addition made on account of disbelieving the sales and treating the amount received against such sales as unexplained credit/ deposit was devoid of any merits for various reasons discussed hereinabove such as amount received from those firms was adjusted against sales made by the assessee which had already been credited in the profit and loss account, the amount of cash sales was not doubted by the Ld. AO herself thereby leaving no scope for doubting the sales made to those firms, sales and production shown by the assessee were duly accepted by the Sales Tax Department and Excise Department respectively, quantitative records of opening stock, purchases, production, sales and closing stock were maintained on a day-to-day basis which were never disputed by the Ld. AO and even the purchases and stock tally maintained by the assessee were never doubted by the Ld. AO. 44. Thus, considering the entire aspect of the matter and in light of the findings re- iterated in the judicial precedents cited supra including the judgment of the Hon’ble jurisdictional bench of ITAT in the case of ACIT 1(1), Ujjain Vs Dewas Soya Limited [ITA No. 336/Ind/2012], we are of the considered opinion that there was no justification for making addition of Rs. 115,62,08,851/- to the total income of the assessee on account of disbelieving the sales and treating the amount received against such sales as unexplained credit/ deposit under section 68 of the Act. The addition of Rs. 115,62,08,851/- made by the Ld. AO cannot be said to be justified in view of the observations made hereinabove. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) and accordingly, the deletion of addition of Rs. 115,62,08,851/- made MG Oils 34 by the Ld. CIT(A) is just and proper so as to warrant no interference. Hence, Ground No. 1 of the appeal preferred by Revenue is found to be devoid of any merit and, thus, dismissed. Ground No. 2:- 45. The Revenue through this ground of appeal has challenged the deletion of addition of Rs. 8,70,50,489/- made by the Ld. AO on account of unsecured loan received and interest paid thereon by treating it as unexplained cash credit under section 68 of the Act. 46. The brief facts leading to the case are that the assessee received unsecured loan from various parties and paid interest thereon. However, the Ld. AO during the course of assessment proceedings observed that the assessee did not furnish supporting documentary evidences to establish the identity and creditworthiness of the unsecured loan parties and genuineness of transactions entered into with them. Accordingly, the Ld. AO made addition to the total income of the assessee on account of unsecured loan received and interest paid thereon. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The assessee filed all the supporting documentary evidences before the Ld. CIT(A) during the course of appellate proceedings so as to justify the identity and creditworthiness of the unsecured loan parties and genuineness of transactions entered into with them. The Ld. CIT(A) forwarded all the documents submitted by the assessee during the course of appellate proceedings to the Ld. AO for his comments. The Ld. AO in the remand report challenged the legality of acceptance of additional evidence as per Rule 46A of the Income-Tax Rules, 1962 (hereinafter referred to as ‘the Rules’) but failed to comment on merits of the documentary evidences furnished by the assessee. The Ld. CIT(A) after considering the assessment order, submission filed by the assessee during the course of appellate proceedings, remand report received from the Ld. AO and MG Oils 35 submission filed by the assessee in response to the remand report deleted the addition of Rs. 8,70,50,489/- made by the Ld. AO on account of unsecured loan received and interest paid thereon. Hence, the instant appeal has been filed before us by the Revenue. 47. The Ld. Counsel for the assessee submitted that detail of unsecured loans was filed during the course of assessment proceedings but the supporting documentary evidences could not be filed since they were in the process of being collected from the unsecured loan parties. However, the Ld. Counsel submitted that all the supporting documentary evidences such as confirmations of accounts, acknowledgement of income-tax returns and bank statements of the unsecured loan parties were filed before the Ld. CIT(A) during the course of first appellate proceedings so as to establish the identity and creditworthiness of the unsecured loan parties and genuineness of the transactions entered into with them. The Ld. Counsel further submitted that the Ld. CIT(A) accepted the additional evidences furnished by the assessee as per Rule 46A of the Rules and forwarded all the documents submitted by the assessee during the course of appellate proceedings to the Ld. AO for his comments but the Ld. AO in the remand report challenged the legality of acceptance of additional evidence as per Rule 46A of the Rules and failed to comment on merits of the documentary evidences furnished by the assessee. Accordingly, the Ld. Counsel contended that addition made by the Ld. AO on account of unsecured loan received and interest paid thereon was rightly deleted by the Ld. CIT(A) after going through all the supporting documentary evidences furnished before him since the assessee had duly established the identity and creditworthiness of the unsecured loan parties and genuineness of the transactions entered into with them and accordingly, the assessee had satisfactorily discharged the primary onus cast upon it under section 68 of the Act. Alternatively, the Ld. Counsel also contended that the Ld. AO made addition of the entire amount of unsecured loans received without allowing set-off of the amount of unsecured loan repaid by the assessee which was not justifiable. MG Oils 36 48. Per contra the Ld. DR supported the findings of the Ld. AO. 49. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 8,70,50,489/- made on account of unsecured loan received and interest credited thereon. We find that the Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: “4.4.1. During the course of appellate proceeding the appellant firm had filed confirmation letter duly signed with copy of acknowledgment of income tax return filed along with Bank statement of the loan creditors. The documents as filed by the appellant was forwarded to the assessing officer for his comments. The assessing officer submitted his remand report and objected to accept the additional evidences in light of Rule 46A of the Income Tax Rules. The appellant also filed rejoinder for the same. In the interest of substantial justice, the documents as filed by the appellant as additional evidences are accepted and considered while adjudicating the grounds of appeal as taken by the appellant. 4.4.2. It is undisputed facts that the case of the appellant for the Assessment year 2015-16 was selected in scrutiny and the entire amount of loan as received in that year was accepted as genuine. It is also correct that the assessing officer added entire amount of loan received in particular years and credit of amount repaid was not allowed. The peak amount of loan was calculated comes to Rs 2,47,03,644/- but the assessing officer added an amount of Rs 29,31,58,532/- to the total income. If the assessing officer considered the entire amount of loan as non- genuine, in that case only peak amount of loan can be added to the total income but in the present case the assessing officer has added the entire amount of loan received to the total income without allowing credit of the amount of loan repaid by the appellant firm which is factually and legally not correct. The appellant firm filed complete details which includes Name of the loan creditors, PA No , Addresses, Confirmation letter duly signed, Bank statement of the loan creditors and Acknowledgment of Income tax return as filed. From the documents as filed it is evident that all the loan creditors are regularly assessed to tax , the assessing officer on the basis of PA No can collect information from his counterpart which was not done by him. From the documents, Identity and creditworthiness of the loan creditors and genuineness of the transactions are proved. Considering the overall facts of the case and submission and documents as filed by the appellant and decisions as relied, the assessing officer was not justified in adding the entire amount of loan and interest paid thereon to the total income of the appellant firm. Therefore, the additions made by the AO Amounting to Rs: 1,90,14,674/- for A.Y. 2015-16, Rs: 7,02,93,414/- for A.Y. 2016-17, Rs: 8,70,50,489/- for A.Y. 2017-18 and Rs: 11,67,99,955/- for the A.Y. 2018-19 on account of unsecured loan and interest paid thereupon u/s 68 of the I.T. Act, 1961 is hereby Deleted. Therefore, the appeal on these grounds is Allowed.” 50. The above findings of the Ld. CIT(A) have not been controverted by the Ld. DR. The facts discussed above squarely reveal that though the supporting documentary MG Oils 37 evidences relating to unsecured loan received by the assessee could not be filed before the Ld. AO, yet, all the documentary evidences such as confirmations of accounts, acknowledgement of income-tax returns and bank statements of the unsecured loan parties were filed before the Ld. CIT(A) during the course of first appellate proceedings so as to establish the identity and creditworthiness of the unsecured loan parties and genuineness of the transactions entered into with them. It is uncontroverted finding that the Ld. CIT(A) accepted the additional evidences furnished by the assessee as per Rule 46A of the Rules and forwarded all the documents submitted by the assessee during the course of appellate proceedings to the Ld. AO for his comments but the Ld. AO in the remand report challenged the legality of acceptance of additional evidence as per Rule 46A of the Rules and failed to comment on merits of the documentary evidences furnished by the assessee. We observe that the assessee duly provided the PAN and address of the unsecured loan parties and also filed ample corroborative documentary evidences such as confirmations of accounts, acknowledgement of income-tax returns and bank statements of the unsecured loan parties to establish the identity and creditworthiness of the unsecured loan parties and genuineness of the transactions entered into with them. Therefore, we are of the considered opinion that the assessee satisfactorily discharged the primary onus cast upon it under section 68 of the Act and accordingly, we find no reason to interfere with the findings of the Ld. CIT(A) in deleting the addition made on account of unsecured loan received and interest credited thereon. 51. Thus, considering the entire aspect of the matter, we are of the considered opinion that there was no justification for making addition of Rs. 8,70,50,489/- to the total income of the assessee on account of unsecured loan received and interest paid thereon by treating it as unexplained cash credit under Section 68 of the Act. The addition made by the Ld. AO on account of unsecured loan received and interest paid thereon cannot be said to be justified in view of the observations made hereinabove. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) and accordingly, MG Oils 38 the deletion of addition of Rs. 8,70,50,489/- made by the Ld. CIT(A) is just and proper so as to warrant no interference. Hence, Ground No. 2 of the appeal preferred by Revenue is found to be devoid of any merit and, thus, dismissed. Ground No. 3:- 52. The Revenue through this ground of appeal has challenged the deletion of addition of Rs. 2,84,00,000/- made by the Ld. AO on account of capital introduced by partners by treating it as unexplained cash credit under section 68 of the Act. 53. The brief facts leading to the case are that the Ld. AO during the course of assessment proceedings observed that the partners had introduced capital in the assessee firm during the year under consideration but no documents had been submitted to justify the source of capital introduced in the firm. The Ld. AO further observed that the books of accounts of the assessee were not found to be reliable and were rejected by invoking the provisions of section 145(3) of the Act and accordingly, the books of accounts could not be treated as maintained in such a manner to treat the credit in partners account as genuine. Accordingly, in light of these findings, the Ld. AO added the amount of capital introduced by partners of Rs. 2,84,00,000/- to the total income of the assessee. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The assessee filed all the supporting documentary evidences before the Ld. CIT(A) during the course of appellate proceedings so as to justify the source of capital introduced by the partners in the assessee firm. The Ld. CIT(A) forwarded all the documents submitted by the assessee during the course of appellate proceedings to the Ld. AO for his comments. The Ld. AO in the remand report challenged the legality of acceptance of additional evidence as per Rule 46A of the Income-Tax Rules, 1962 (hereinafter referred to as ‘the Rules’) but failed to comment on merits of the documentary evidences furnished by the assessee. The Ld. CIT(A) after considering the assessment order, submission filed by the assessee during MG Oils 39 the course of appellate proceedings, remand report received from the Ld. AO and submission filed by the assessee in response to the remand report deleted the addition of Rs. 2,84,00,000/- made by the Ld. AO on account of capital introduced by partners. Hence, the instant appeal has been filed before us by the Revenue. 54. The Ld. Counsel for the assessee submitted that the Ld. AO during the course of assessment proceedings never required the assessee to furnish the details with respect to source of capital introduced by the partners as a result of which the assessee was deprived of an effective opportunity to justify the source of capital introduced by its partners. The Ld. Counsel further submitted it was for the aforesaid reason that the assessee could file ample corroborative documentary evidences during the course of appellate proceedings including confirmation of accounts, bank statements and income-tax returns of the partners so as to justify the identity and creditworthiness of the partners as well as genuineness of the transactions entered into with them. The assessee also filed copy of ledger account of the partners in the books of the group concern, M/s Vinod Industries from where funds were transferred directly to the bank account of the assessee so as to justify the source of source of funds introduced by the partners in the assessee firm. Hence, the Ld. Counsel contended that the assessee properly discharged the primary onus cast upon it under section 68 of the Act and accordingly, there was no justification for making addition to the total income of the assessee on account of capital introduced by its partners. We have further considered inter alia the following submission made by the assessee in the synopsis submitted before us: “2.1] The Department in the grounds of appeal has challenged the action of Ld CIT(A) of deleting the additions of Rs. 3,33,75,000/-, Rs. 2,84,00,000/- and Rs. 2,02,91,900/- made to the total income of the respondent for Assessment Years 2015-16, 2017-18 and 2018-19 respectively on account of capital introduced by partners by treating it as unexplained cash credit under section 68 of the Income-Tax Act, 1961. 2.2] The assessing officer while passing the assessment order opined as per her own sweet will that books of accounts of the respondent were not maintained in such a manner to treat the credit made in the partners account as genuine. Accordingly, the assessing officer reached to a conclusion that MG Oils 40 funds in the form of credit in the partners account were doubtful which created suspicion over the increase in capital and therefore, credits appearing in the partners account were treated as unexplained by stating that source of such credits was not supported by documentary evidence. The assessing officer also cited few case laws to support her contention that cash credits in the names of partners ought to be deemed as income of the firm if no satisfactorily explanation is offered. ... 2.6.3.1] On perusal of the cogent documentary evidences as filed as to substantiate the source of capital introduced by the partners in the firm during the Previous Years 2014-15 and 2016-17 relevant to the Assessment Years 2015-16 and 2017-18, it shall be crystal clear that capital introduced by the partners through banking channels was out of funds transferred directly from the bank account of the group concern, M/s Vinod Industries which was also assessed by the same assessing officer and source of funds transferred to the respondent were duly accepted during the course of assessment proceedings in the case of M/s Vinod Industries. Further, the amount of capital of Rs. 30,00,000/- introduced by the partners namely Smt. Anjali Devi Bansal, Smt. Jayshree Bansal and Smt. Santosh Devi Bansal in cash was out of income offered by them in their respective income-tax returns for the Assessment Year 2015-16 which was duly accepted by the assessing officer herself during the course of their individual assessment proceedings and the amount of capital of Rs. 20,00,000/- each as introduced by the said partners during the Assessment Year 2017- 18 was out of funds transferred directly from the bank account of Smt. Geetadevi Ganeshlal. 2.6.3.2] Further, on perusal of the cogent documentary evidences filed for Assessment Year 2018- 19 so as to substantiate the source of capital introduced by the partners in the firm during the previous year 2017-18 relevant to the Assessment Year 2018-19, it shall be crystal clear that almost entire amount of capital introduced by the partners during the previous year 2017-18 was out of funds transferred directly from the bank account of Shri Varun Agrawal [Prop. of M/s Vasudeo Enterprises]. 2.6.4] In view of the above discussion, it can be satisfactorily held that source of capital of Rs. 3,33,75,000/-, Rs. 2,84,00,000/- and Rs. 2,02,91,900/- introduced by the partners in the firm during the Previous Years 2014-15, 2016-17 and 2017-18 relevant to the Assessment Years 2015-16, 2017- 18 and 2018-19 respectively stands duly explained with cogent documentary evidences and requires to be accepted as such. Hence, additions of Rs. 3,33,75,000/-, Rs. 2,84,00,000/- and Rs. 2,02,91,900/- as made to the total income of the respondent for Assessment Years 2015-16, 2017-18 and 2018-19 respectively on account of capital introduced by partners by treating it as unexplained cash credit under section 68 of the Income-Tax Act, 1961 is neither legal nor proper and therefore Ld CIT(A) was correct in deleting the aforesaid additions as made to the total income of the respondent. Henceforth, Hon’ble Bench is thereby kindly requested to affirm the findings of Ld CIT(A).” 55. The Ld. Counsel further submitted that the same Assessing Officer completed the assessment in the case of the group concern, M/s Vinod Industries from where the funds were transferred directly to the bank account of the assessee and that no adverse view was taken in the case of M/s Vinod Industries in respect of the amount transferred directly to the bank account of the assessee which in itself justified that the Ld. AO was MG Oils 41 satisfied with the source of capital introduced by the partners in the assessee firm. Further, the Ld. Counsel submitted that assessment in the case of all the partners of the assessee firm was also completed by the same Assessing Officer wherein the Assessing Officer did not take any adverse view in respect of the amount of capital introduced by the partners in the assessee firm which in itself justified that the Ld. AO was satisfied with the source of capital introduced in the assessee firm. Accordingly, the Ld. Counsel vehemently argued that there was no justification for making addition to the total income of the assessee on account of capital introduced by partners. 56. The Ld. Counsel contended that it is a well settled proposition of law that it is for the partners of a firm to explain the source of capital introduced and if they fail to discharge the onus, then, capital introduced by the partners can be taxed in the hands of the partners only and not in the hands of the firm. He relied upon the following judicial precedents in support of his contentions: (i) CIT-I, Patna v. Anurag Rice Mills [2016] 282 CTR 200 (Patna) (ii) CIT, Bikaner vs. M/s Kewal Krishan & Partners [D.B. Income Tax Appeal No. 185/08] (iii) Sarjan Corporation v. ACIT [2012] 25 taxmann.com 426 (Ahmedabad - Trib.) (iv) M/s Jaylaxmi Land Developers Vs. ITO, Ward 1, Anand [ITA No. 2226/AHD/2016] 57. Accordingly, the Ld. Counsel contended that there was no rationale for making any addition to the total income of the assessee on account of capital introduced by its partners. 58. Per contra the Ld. DR supported the findings of the Ld. AO. MG Oils 42 59. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 2,84,00,000/- made on account of capital introduced by partners. We find that the Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: “4.3.3. Considering the overall facts of the case, submission put forth and supporting documents as filed by the appellant and decisions as relied, it is held that addition was made by the assessing officer simply for the reason that necessary documents to justify the source of capital introduced was not filed during the course of scrutiny assessment. It was contended by the appellant that no specific documents were required by the assessing officer. It is undisputed facts that all the partners were assessed by the same assessing officer and no adverse view was taken by the assessing officer in the individual assessment proceeding of the partners. The documents as filed by the appellant during the appellate proceeding which were also forwarded to the assessing officer duly justified the source of capital as introduced by the partners. Therefore, the assessing authority is not justified in making additions. Therefore, the additions made by the AO amounting to Rs: 3,33,75,000/- for the A.Y. 2015-16, Rs: 2,84,00,000/- for the A.Y. 2017-18 and Rs: 2,02,91,900/- for the A.Y. 2018-19 on account of capital introduced by partners by treating as unexplained cash credit u/s 68 of the I.T. Act, 1961 is hereby Deleted. Thus, the appeal on these grounds is Allowed. Since the additions as made by the assessing officer in these grounds on account of unexplained cash deposit u/s 68 of the I.T. Act, 1961 have already been deleted on merit. Therefore, the charging of tax liability as per amended provisions of section 115BBE on these grounds of appeal is academic in nature and having no impact on the fate of these grounds.” 60. The above findings of the Ld. CIT(A) have not been controverted by the Ld. DR. The facts discussed above squarely reveal that the Ld. AO made addition on account of capital introduced by the partners simply for the reason that the assessee did not furnish any documentary evidence during the course of assessment proceedings to justify the source of capital introduced by the partners. However, at the same time, it is equally correct that the Ld. AO during the course of assessment proceedings never required the assessee to furnish the details of source of capital introduced by the partners. Hence, we are of the considered opinion that the Ld. CIT(A) rightly admitted the additional evidences furnished by the assessee during the course of appellate proceedings. Further, on perusal of the remand report annexed with the Paper Book, we MG Oils 43 find that the Ld. AO in the remand report merely challenged the acceptance of additional evidence as per Rule 46A but he utterly failed to comment on merits of the documentary evidences furnished by the assessee during the course of appellate proceedings to justify the identity and creditworthiness of the partners as well as genuineness of the transactions as entered into with them. Hence, we observe that there were no adverse remarks of the Ld. AO regarding source of capital introduced by the partners in the assessee firm except for the fact that no documentary evidences were furnished by the assessee during the course of assessment proceedings to justify the source of capital introduced by the partners. 61. On merits, we find that the assessee filed ample corroborative documentary evidences such as confirmation of accounts, bank statements and income-tax returns of the partners, ledger account of the partners in the books of the group concern, M/s Vinod Industries and confirmation of accounts and bank statement of Shri Varun Agrawal [Prop. of M/s Vasudeo Enterprises] and thus, the assessee satisfactorily discharged the primary onus cast upon it under section 68 of the Act. Accordingly, we of the considered opinion that there was no justification for making addition to the total income of the assessee on account of capital introduced by its partners since the assessee duly justified the identity and creditworthiness of the partners as well as genuineness of the transactions entered into with them. 62. We also find force in the contentions of the Ld. Counsel that assessment in the case of all the partners of the assessee firm as well as assessment in the case of group concern, M/s Vinod Industries was also completed by the same Assessing Officer wherein the Assessing Officer did not take any adverse view in respect of the amount of capital introduced in the assessee firm which in itself justified that the Assessing Officer was satisfied with the source of capital introduced in the assessee firm. Hence, we are of the opinion that there was no scope whatsoever for making addition to the total income of the assessee on account of capital introduced by partners since all the MG Oils 44 partners of the assessee firm were assessed by the same Assessing Officer and source of capital introduced by such partners stood duly explained. 63. Thus, considering the entire aspect of the matter, we are of the considered opinion that there was no justification for making addition of Rs. 2,84,00,000/- to the total income of the assessee on account of capital introduced by partners by treating it as unexplained cash credit under Section 68 of the Act. The addition made by the Ld. AO on account of capital introduced by partners cannot be said to be justified in view of the observations made hereinabove. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) and accordingly, the deletion of addition of Rs. 2,84,00,000/- made by the Ld. CIT(A) is just and proper so as to warrant no interference. Hence, Ground No. 3 of the appeal preferred by Revenue is found to be devoid of any merit and, thus, dismissed. Ground No. 4:- 64. The Revenue through this ground of appeal has challenged the deletion of addition of Rs. 5,24,00,000/- made by the Ld. AO on account of cash deposited in the bank account during the demonetization period by treating it as unaccounted cash credit under section 68 of the Act. 65. The brief facts leading to the case are that the assessee deposited cash of Rs. 5,24,00,000/- in its bank accounts during the demonetization period. However, the Ld. AO observed that cash deposited during the demonetization period was abruptly higher than average cash deposit before that period. The Ld. AO further observed that cash sales of the assessee had been totally manipulated. The Ld. AO on the basis of various other findings noted in the assessment order reached to a conclusion that cash book of the assessee was also manipulated. Accordingly, the Ld. AO made addition of Rs. 5,24,00,000/- to the total income of the assessee on account of cash deposited in the bank account during the demonetization period. Aggrieved by the order of the Ld. AO, MG Oils 45 the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) deleted the addition of Rs. 5,24,00,000/- made by the Ld. AO. Hence, the instant appeal has been filed before us by the Revenue. 66. At the outset, the Ld. Counsel for the assessee vehemently argued that addition of Rs. 5,24,00,000/- made by the Ld. AO was totally unacceptable since out of cash of Rs. 5,24,00,000/- deposited in the bank account of the assessee during the demonetization period, cash of Rs. 35,00,000/- was deposited in Specified Bank Notes (SBNs) on 17.11.2016 whereas the remaining amount of cash of Rs. 4,89,00,000/- was deposited in legal and valid tender currency. Hence, the Ld. Counsel submitted that the actual amount of addition in dispute should have been Rs. 35,00,000/- and not of Rs. 5,24,00,000/-. The Ld. Counsel thereafter submitted that cash was deposited in the bank account of the assessee out of cash sales and out of cash available in the regular books of accounts. The Ld. Counsel also relied upon the copy of cash book of the assessee for the period from 09.11.2016 to 31.12.2016 which had been filed on Page No. 1995-2013 of the Paper Book to justify the source of cash deposited in the bank account during the demonetization period. The Ld. Counsel also provided detailed explanation/ justification with respect to each and every adverse finding of the Ld. AO noted in the assessment order on the basis of which the aforesaid addition was made to the total income of the assessee. 67. The Ld. Counsel further submitted that sales credited in the Profit and Loss account of the assessee included the figure of cash sales as well as credit sales from where cash was realized and subsequently deposited in the bank account of the assessee and therefore, addition of Rs. 5,24,00,000/- made to the total income of the assessee on account of cash deposited in the bank account during the demonetization period resulted in double taxation of the same amount since the amount of sales through which cash was generated had already been credited in the Profit and Loss account of the assessee. The Ld. Counsel also submitted that the assessee deposited MG Oils 46 cash of Rs. 22,43,10,000/- in its bank account during the Financial Year 2016-17 and if the Ld. AO opined that cash book maintained by the assessee was not reliable, in that case, entire amount of cash deposited in the bank account of the assessee throughout the year should have been added to the total income of the assessee and not merely the amount of cash deposited in the bank account during the demonetization period. He submitted that it was beyond understanding as to how the cash book of the assessee was considered to be properly maintained prior to and subsequent to the demonetization period and it became manipulative and unreliable only during the demonetization period. Accordingly, the Ld. Counsel submitted that the approach of the Ld. AO was in itself contradictory and it clearly pointed out to the fact that the Ld. AO sat with a biased mindset during the course of assessment proceedings to add the amount of cash deposited in the bank account during the demonetization period to the total income of the assessee which was wholly unwarranted. We have further considered inter alia the following submission made by the assessee in the synopsis submitted before us: “9.1] The Department in these ground of appeal has challenged the action of Ld CIT(A) of deleting the addition of Rs. 5,24,00,000/- as made to the total income on account of cash deposited in the bank account during the demonetization period by treating it as unaccounted cash credit under section 68 of the Income-Tax Act, 1961 and consequential charging of tax at the rates prescribed under section 115BBE of the Income-Tax Act, 1961. ... 9.5.4] It is also pertinent to note that the respondent deposited cash of Rs. 22,43,10,000/- in its bank account during the Financial Year 2016-17. Hence, if the assessing officer opined that cash book maintained by the respondent was not reliable, in that case, entire amount of cash deposited in the bank account of the respondent throughout the year should have been added to the total income of the respondent and not merely the amount of cash deposited in the bank account during the demonetization period. It is beyond understanding as to how the cash book of the respondent was considered to be properly maintained prior to and subsequent to the demonetization period and it became manipulative and unreliable only during the demonetization period. The aforesaid approach of the assessing officer is in itself contradictory and it clearly points out to the fact that the assessing officer sat with a biased mindset during the course of search assessment proceedings to add the amount of cash deposited in the bank account during the demonetization period to the total income of the respondent which is grossly unjustifiable and wholly unwarranted.” MG Oils 47 68 Accordingly, the Ld. Counsel submitted that there was no rationale for making addition to the total income of the assessee on account of cash deposited in the bank account during the demonetization period by treating it as unaccounted cash credit under section 68 of the Act. 69. Per contra the Ld. DR supported the findings of the Ld. AO. 70. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 5,24,00,000/- made on account of cash deposited in the bank account during the demonetization period. We find that the Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: “4.6. Ground Nos 23 to 27 for the A.Y. 2017-18:- Through these grounds of appeal the appellant has challenged the addition made by the AO amounting to Rs: 5,24,00,000/- on account of unexplained cash deposited u/s 68 of the I.T. Act, 1961 during demonetisation period and charging of tax under the amended provisions of section 115BBE of the I.T. Act, 1961. During the course of appellate proceedings, the appellant has submitted that Specified Bank Notes deposited during the demonetisation period was of Rs 35,00,000/- only and balance amount of cash as deposited was legal tendered money. It was also explained before the assessing officer that the appellant is engaged in the manufacturing and sale of Refine edible oil which is consumable items and used on day-to-day basis in every home and restaurant. The appellant firm having good sales even during demonetisation period. The appellant firm also filed a chart of cash deposited pre and post demonetisation period, on perusal of the same, it is evident that cash of Rs 2,62,00,000/- was deposited in the Month of July, 2016, Rs 2,23,50,000/- was deposited in the Month of August, 2016 and Rs 3,35,50,000/- were deposited in the Month of March, 2017. The assessing officer doubted the cash deposited during 09-11-2016 to 30-11-2016 of Rs 2,63,00,000/- and cash of Rs 2,61,00,000/- deposited in the Month of December, 2016. It was explained by the appellant that cash as deposited in the bank account was out of cash sales, cash as received from the debtors and cash as withdrawn from the bank. The assessing officer accepted cash sales as shown by the appellant in its books of account and the amount of cash as deposited in the Month of November and December are similar to the cash as deposited in the Month of July 2016, August, 2016 and cash as deposited in the month of March, 2017. The SBNs deposited during the demonetisation period was of Rs 35,00,000/- only out of Rs 5,24,00,000/-. The cash as deposited by the appellant in the bank account was used by it towards purchase of crude oil as its raw material and consumed the same for production of the refined oil. The assessing officer herself accepted the purchases as shown by the appellant as genuine. The sales as shown by the appellant was also accepted by the assessing officer as genuine and no adjustment MG Oils 48 in sales was made by her in the assessment order. In that case there was no justification for the assessing officer to add the entire amount of cash deposited during the period from 09-11-2016 to 31-12-2016 to the total income of the appellant. The Specified Bank Notes as deposited was of Rs 35,00,000/- only and not of Rs 5,24,00,000/- as added to the total income of the appellant by the assessing officer. The said amount of cash was received against the cash sales which has already been credited by the appellant in its books of account. Thus, the said amount of cash again added to the total income tantamount to double addition, one as a sale and other in form of cash deposited in the bank account which is not justifiable. Considering the above observation and submissions as filed by the appellant firm, I am of the view that the assessing officer was not justified in making the addition on account of cash deposited during demonetisation period. Therefore, the addition made by the assessing officer on account of cash deposited in the bank account amounting to Rs 5,24,00,000/- is hereby Deleted. Therefore, the appeal on these grounds is Allowed.” 71. The above findings of the Ld. CIT(A) have not been controverted by the Ld. DR. The facts discussed above squarely reveal that out of cash of Rs. 5,24,00,000/- deposited in the bank account of the assessee during the demonetization period, cash of Rs. 35,00,000/- only was deposited in Specified Bank Notes (SBNs) on 17.11.2016 whereas the remaining amount of cash of Rs. 4,89,00,000/- was deposited in legal and valid tender currency. Hence, we are of the considered opinion that the addition in dispute before us should have only been with respect to the amount of Rs. 35,00,000/- and not with respect to the amount of Rs. 5,24,00,000/- as challenged by the Revenue. We have also gone through the cash book of the assessee filed on Page No. 1995-2013 of the Paper Book to justify the source of cash deposited in the bank account during the demonetization period. On perusal of the cash book of the assessee, we find that cash was deposited in the bank account of the assessee out of cash sales and also out of cash available in the regular books of accounts. The Ld. AO while passing the assessment order doubted the amount of cash deposited in the bank account during the demonetization period but did not doubt the source of such cash deposited in the bank account i.e. cash sales. Hence, we are of the opinion that source of cash deposited in the bank account of the assessee during the demonetization period stands duly explained with supporting documentary evidences and accordingly, we observe that MG Oils 49 there was no justification for making addition to the total income of the assessee on account of cash deposited in the bank account during the demonetization period. 72. We also find strong force in the contentions of the Ld. Counsel that addition made on account of cash deposited in the bank account led to double taxation of the same amount which was not justifiable since the amount of sales from where cash was realized and subsequently deposited in the bank account of the assessee had already been credited in the Profit and Loss account of the assessee. We further observe that the various adverse findings of the Ld. AO noted in the assessment order could not have been relied upon to draw any adverse inference in the case of the assessee since the Ld. Counsel duly controverted and provided satisfactory explanation regarding each and every adverse finding of the Ld. AO noted in the assessment order. 73. Thus, considering the entire aspect of the matter, we are of the considered opinion that there was no justification for making addition of Rs. 5,24,00,000/- to the total income of the assessee on account of cash deposited in the bank account during the demonetization period by treating it as unaccounted cash credit under section 68 of the Act. The addition made by the Ld. AO on account of cash deposited in the bank account during the demonetization period cannot be said to be justified in view of the observations made hereinabove. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) and accordingly, the deletion of addition of Rs. 5,24,00,000/- made by the Ld. CIT(A) is just and proper so as to warrant no interference. Hence, Ground No. 4 of the appeal preferred by Revenue is also found to be devoid of any merit and, thus, dismissed. 74. In the result, appeal filed by the Revenue vide IT(SS)A 155/Ind/2021 for A.Y. 2017-18 is dismissed. MG Oils 50 75. Since, appeals of the Revenue vide IT(SS)A 153/Ind/2021 for A.Y. 2015-16, IT(SS)A 154/Ind/2021 for A.Y. 2016-17 and IT(SS)A 156/Ind/2021 for A.Y. 2018-19 contain similar grounds of appeal, these appeals of the Revenue are not adjudicated separately and are also dismissed. 76. In the result, all the appeals filed by the Revenue are dismissed and all the cross objections filed by the assessee for A.Ys. 2015-16 & 2016-17 are allowed. Cross Objection for A.Y. 2017-18 is dismissed. This Order pronounced on 27/02/2023 Sd/- Sd/- (BHAGIRATH MAL BIYANI) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore; Dated 27/02/2023 S. K. Sinha, Sr. PS True Copy आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. स ं ब ं िधत आयकर आय ु / Concerned CIT 4. आयकर आय ु (अपील) / The CIT(A)- 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Indore 6. गाड फाईल / Guard file. आदेशान ु सार/ BY ORDER, (Sr.PS) ITAT, Indore