DCIT, Central Circle-1(2), Ahmedabad V. M/s. Sarthav Farms & Resorts, Ahmedabad

ITSSA 353/AHD/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3123 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-06-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Loose papers; Tangible material; Set aside
• Section: 68; 69; 132; 143(3); 153A; 69B; 69A; 153C

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ ‘‘सी’’ अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ] ] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER IT(SS)A No. 353/Ahd/2018 & CO No. 150/Ahd/2019 Assessment Year : 2009-10 DCIT, Central Circle 1(2), Ahmedabad Vs M/s. Sarthav Farms & Resorts, 203-204, Abhishilp Complex, Nr. Vishweshwar Mahadev Temple, Vastrapur, Ahmedabad-380015 PAN : ABNFS 0815 K (Appellant) (Respondent)/ Cross-Objector Assessee by : Ms. Nupur Shah, Advocate Revenue by : Shri Sanjay Punglia, CIT-DR सुनवाई कᳱ तारीख/Date of Hearing : 08/06/2022 घोषणा कᳱ तारीख /Date of Pronouncement: 24/08/2022 आदेश/O R D E R PER WASEEM AHMED, AM : The Revenue is in appeal before the Tribunal against the order of the ld. Commissioner of Income-Tax (Appeals)-11, Ahmedabad [“CIT(A)” in short] dated 04.09.2018 passed for Assessment Year 2009-10. On receipt of notice in the Revenue’s appeal, the assessee has filed Cross-Objection bearing No. 150/Ahd/2019. 2. The Revenue has raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts is not appreciating the provisions of section 153A of the IT Act, 1961 which requires the total income to be brought under tax without any restrictions. 2. On the facts and in the circumstance of the case and in law, the Ld. ClT(A) has erred in law and on facts in holding that such assessment or reassessment u/s. 153A of the IT Act, 1961 is to be restricted only to the incriminating materials found during the search. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.30,02,511/- on account of unexplained money u/s 69. IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 2 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.1,42,40,000/- on account of unexplained money u/s.69. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O.” 3. The issue raised by the Revenue in ground No. 1 and 2 of its appeal is that the learned CIT (A) erred in holding that the assessment and reassessment under section 153A of the Act is restricted to the materials found during the search only. 4. The necessary fact culled out from proceeding before the authorities below are that the assessee a partnership engaged in the business of real estate project of club and resorts, developer and construction, implement scheme, infrastructure project, housing project, commercial projects etc. There was a search and seizure operation under section 132 of the Act, at the premises of “Barter Group” alias Shri Anil Hiralal Shah and Atul Hiralal Shah (main person of Barter group) dated 4 th December 2014. Shri Anil Hiralal and Atul Hiralal Shah (Barter group) was engaged in the business of accommodation entries and stock market manipulation. The barter group also engaged in business of real estate development in association with another family group “Sutharia family” headed by Sanjay M Sutharia and Dharmen M Sutharia. M/s Srathav Infrastructure Pvt. Ltd (SIPL) is the flagship company of the group for real estate business and Shri Anil Hiralal and Atul Hirala are majority shareholder of SIPL whereas as their brother Shri Jignesh Hiralal Shah and family member of Sutharia are the director of SIPL. The group is also carrying real estate business through various firms and proprietaries concern and the appellant firm is one of the concern of Barter-Sutria group. 4.1 During the search an excel sheet marked as ‘ccccc’ was found from the computer of Shri Anil Hiralal Shah and same sheet in e-data was also found from the premises of Shri Sanket Jitendra Bhai (key man of Anil Hiralal and family member of barter group). The impugned excel sheet was containing various financial transactions being receipt of unaccounted cash against various project of IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 3 SIPL and their utilization. The impugned sheet was containing the transactions for the period beginning from 2 nd April 2010 to 27 th August 2010 showing the aggregate cash receipt of ₹ 69,31,41,997/- only and majority of cash was utilized for making unaccounted cash payment against purchases of land, personal expenses and cash deposit aggregating to ₹ 6,49,70,181/- in bank account of different individual and concern of the group. The entries reflected in the excel sheet was duly correlated with the cash deposits in the bank accounts of different individuals/business concern. 4.2 Based on the above the AO drew an inference that it is the modus operandi of the group where the on money received by the M/s SPIL against its different project further layered into bank account of the various individual, firms and other concern of the group. The AO also found that there was, in different assessment years, huge cash deposited in the bank of the individual and firms or other concerns which was nothing but the unaccounted cash income of SPIL layered in the bank accounts of its associates. Similarly, in case of the assessee on hand, cash deposit of Rs. 30,02,511/- was made in the year under consideration i.e. A.Y. 2009-10. Thus the AO initiated proceeding under section 153C and framed the assessment u/s 143(3) read with section 153C after making addition of cash deposits for Rs. 30,02,511/- and other amount for Rs. 1,42,40,000/- credited in the bank account by treating the same as unexplained money under section 69B of the Act. 5. On appeal by the assessee, the learned CIT(A) held that year under consideration is a unabated assessment year, therefore, any addition or disallowances to the returned income can only made on the basis of incriminating materials found during the course of search proceeding pertaining to the year concerned. The relevant observation of CIT(A) reads as under: “The contention of the appellant that during the course of search proceedings, no incriminating material as regards to cash deposits and withdrawals during the year under consideration was found and seized. The MS Excel sheet which the AO is referring to in the entire assessment order is pertaining to a limited period falling under AY 2011-12, hence making it amply clear that there was no incriminating IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 4 material for the year under consideration is also found to be correct. Considering the facts of the appellant’s case and the judicial pronouncements relied upon by the appellant, I hold that the addition made by the AO on account of unexplained cash credit in the hands of the appellant u/s 69A of the Act for an amount of Rs.30,02,511’/- is not justified and the same is hereby deleted.” 6. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 7. The learned DR before us contended that it is not necessary to make addition based on the incriminating documents found during the course of search under section 132 of the Act. The learned DR in support of his contention has vehemently relied on the judgment of Hon’ble Kerala High Court in the case of E.N. Gopakumar reported in 75 taxmann.com 215. 8. On the other hand, the learned AR before us contended that the year under consideration is a completed assessment, hence, any addition or disallowance in the proceeding under section 153A/153C of the Act can only made on basis of incriminating material found during the search. In the absence of any such material, no addition or disallowances can be made. The ld. AR before us vehemently supported the order of the learned CIT(A). 9. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, there was search proceeding under section 132 of the Act dated 4 th December 2014 (i.e. during the financial year 2014-15 corresponding to A.Y. 2015-16) which was carried out in the case of barter group and accordingly proceeding under section 153C of the Act was started for the A.Y. 2009-10 in case of the assessee. The assessment under section 153C r.w.s section 143(3) of the Act for the year under consideration i.e. A.Y. 2009-10 was framed after making the addition of the amount credited in bank through cheques deposit and cash deposit as unexplained money under section 69A of the Act. On appeal by the assessee, the learned CIT(A) deleted the addition made by the AO on both the counts i.e. law as well as on ground of merit. While deleting the addition on the ground of law, the learned CIT(A) found IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 5 that there was no material of incriminating nature was found in the course of the search. Therefore, the year under consideration being unabated/completed assessment year, any addition made in absence of incriminating material is not justified. The learned DR before us vehemently argued that there is no provision under section 153C/153A which restricts the assessment or easement in case of search to the extent of incrementing materials only. 9.1 In this regard we find that it has been settled by various Hon’ble Court including Hon’ble Jurisdictional High Court that the completed assessment cannot be disturbed in the absence of any incriminating materials/ documents found during the search whereas the assessment/ reassessment can be made with respect to abated assessment years. The word 'assess' in Section 153-A of the Act is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to the completed assessment proceedings. The Hon’ble Gujarat High Court in the case of Saumya Construction reported in 387 ITR 529 has held that there cannot be any addition of regular items shown in the books of accounts until and unless there were certain materials of incriminating nature found during the course of search. The word incriminating has not been defined under the Act but it refers to those materials/ documents/ information which were collected during the search proceedings and not produced in the original assessment proceeding. Simultaneously, these documents had bearing on the total income of the assessee. Now coming to the case, we note that there was no incriminating document found during the search which would have made basis for the addition in the assessment order. The case laws referred by the learned DR is not applicable to the case on hand for the reason that there is a direct judgment on the present issue of the Jurisdictional High Court in the case of M/s Saumiya Construction which will prevail. 9.2 At the time of hearing, the learned DR has not brought anything on record contrary to the finding of the learned CIT (A). Accordingly, we hold that there cannot be any addition of the regular items which were disclosed by the assessee in the regular books of accounts. In holding so we draw support and guidance IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 6 from the judgment of Hon’ble Gujarat High Court in case of Saumya Construction (P.) Ltd (supra) wherein it was held as under: Thus, while in view of the mandate of sub-section (1) of section 153A in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, the earlier assessment would have to be reiterated. 9.3 In view of the above we hold that there cannot be any addition to the total income of the assessee of the regular items as made by the AO in the present case. Accordingly, we do not find any infirmity in the order of the learned CIT (A). Hence, we uphold the same. Thus the technical ground of appeal of the Revenue is hereby dismissed. 10. The next issue raised by the Revenue is that the learned CIT (A) erred in deleting the addition made by the AO for ₹ 30,02,511/- by treating the cash deposit as unexplained money under section 69A of the Act. 11. The assessee in the year under consideration has deposited cash of ₹ 30,02,511/- in its bank accounts. During the assessment proceedings, it was explained that the cash deposits were made out of the cash balance available with the assessee on account of cash withdrawal from banks on earlier occasion and cash generated from business which were offered to tax. As per the assessee, it has withdrawn the cash during the year on regular interval. However, on the occasion of excess cash in hand, the same was utilized to re-deposit in the bank account in the year under consideration. 11.1 The assessee, likewise, further submitted that entire basis of allegation is excel sheet found during the search proceeding at the premises of barter group which pertain to different period, but in none of document found in search or statement recorded, its name has been identified. Therefore no, addition can be IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 7 made on the basis of materials found at the premises of third party which has no relevancy to the year under consideration. 11.2 However, the AO during the assessment proceedings also observed that there was regular withdrawal of cash made by the assessee but no corresponding cash expenses was not recorded which implies cash expenses were met out of unaccounted cash receipt. Further, no businessman in normal course of business would withdraw cash from bank and kept the same for redeposit on a later occasion. The excel sheet found during the course of search at the premises of Shri Anil Hirala Shah has relevancy. The sheet contains unaccounted cash receipts against various project of Sarthav Infrastructure Pvt. Ltd (SIPL) which was layered in different bank accounts of individual and other firm of Sutaria Family including in the bank account of the assessee though the same pertain to different period. Thus the excel sheet explains the very modus operandi of the assessee group that the unaccounted cash receipt of SIPL were diverted into the bank account of other firm and individual including assessee via accommodation entry. 11.3 Thus, the AO in view of the above treated the cash deposit as a device of tax evasion adopted by the assessee and therefore treated the entire cash deposit as unexplained money under section 69A of the Act by making the addition to the total income of the assessee. 12. Aggrieved assessee preferred an appeal to the learned CIT(A). 13. The assessee before the learned CIT(A) reiterated that cash was deposited out of cash balance and withdrawal made during the year. All the withdrawals and deposits are duly recorded in the books of accounts and explained during the assessment proceedings. The AO without doubting the cash book and bank book merely treated the deposits as unexplained cash credits on basis of surmises and conjecture. The assessee further submitted that there is no limitation under the Act with regard to cash withdrawal or deposits. There was also no evidence brought on record by the AO that cash withdrawal was invested somewhere else and cash deposited was sourced from any other sources. Therefore, the addition, IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 8 made merely on basis of surmise and conjecture, cannot be sustained and to support the argument, the assessee relied on various case laws which are incorporated in the order of ld. learned CIT(A). 13.1 The learned CIT(A) after considering the submission of the assessee deleted the addition made by the AO by observing as under: “5.2.4. As far as the merits of the issue is concerned from verification of the seized material. That in respect of the MS Excel Sheet ''CCCCC.xls" found and seized from the possession of Shri Anil Hiralal Shah & Shri Sanket Vora, the provisions of section 132(4A) r.w.s. 292C is applicable in their cases and the AO has also not brought on record any statement of Shri Anil Hiralal Shah and Shri Sanket Vora identifying the appellant in respect of the allegation of unexplained cash deposit and hence the provisions of section 132(4A) r.w.s. 292C is applicable in their cases and not in the case of the appellant. The AO has also not discharged the burden casted upon him by making necessary requisite enquiry from Shri Anil Hiralal Shah and Sanket Vora in respect of seized material relied upon by the AO in the case of the appellant for making the addition on account of unexplained cash deposits of Rs.30,02,511/- on the basis of seized MS Excel Sheet "CCCCC.xls"' by recording their statements u/s.131 of the Act during the course of assessment proceedings in the case of appellant to bring on record cogent material and independent clinching evidences that how the notings found in the seized material is relevant in the case of appellant and considering ail the aforesaid facts and circumstances, I agree with the contention of the appellant that the seized material MS excel sheet "CCCCC.xls" found and seized from the possession of Shri Anil Hiralal Shah & Shri Sanket Vora is required to be treated as dumb entry and dumb document in the case of the appellant having no evidential value and no addition can be made in respect of such alleged unexplained cash deposit in the hands of the appellant. Following the decision of Hon'ble Apex Court in the case of C.B.I. Vs. V.C. SHUKLA & Others reported in 3 Supreme Court cases 410 (1998) wherein, it has been held that the loose paper have no evidential value unless and until the authority brings on record any independent clinching material evidence in support of the said dumb document which in the form of unsigned rough paper. Further, the said ratio has been followed by jurisdictional Gujarat High Court in the case of DCIT (Asstt) v. Prarthana Construction Pvt. Ltd. (Tax Appeal No. 79 of 2000) wherein, the principle and ratio laid down by the Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla 1998 (3) SCC 410 that loose paper found from the possession of third party cannot be considered as an evidence in the case of the appellant unless and until the AO brings on record cogent material and /or independent clinching evidences to fasten the liability on the appellant. The Hon'ble ITAT, Ahmedabad in the case of Dr. Keyur Parikh & Others vs. ACIT, Central Circle 2(3), Ahmedabad (IT(SS) A No. 604/Ahd/2011 - A.Y. 2008-09), Nishant Construction Pvt. Ltd vs. ACIT in ITA No. 502/Ahd/2015 reproduced the findings of the Hon'ble Supreme Court in the case of Common Cause (a Registered Society) and Other vs. Union of India and Others in Writ Petition Civil Appeal No. 505 of 2015. These are reproduced as under:- “25. Coming to the evidentiary value of the impounded loose sheet mentioned elsewhere, the Hon'ble Supreme Court in the case of Common Cause (A Registered Society) and Others vs. Union of India and Others in Writ Petition Civil Appeal No. 505 of 2015 has observed as under :- 16. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla's case (supra) has dealt with the matter though at the stage of discharge when investigation had been completed but same is relevant for the purpose of decision of this case also. This Court has considered the IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 9 entries in Jain Hawala diaries, note books and file containing loose sheets of papers not in the form of "Books of Accounts" and has held that such entries in loose papers/sheets are irrelevant and not admissible under Section 34 of the Evidence Act, and that only where the entries are in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible. 17. It has further been laid down in V.C. Shukla (Supra) as to the value of entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. 26. The Hon'ble Supreme Court further observed :- 17. From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book account and that book of account has been regularly kept in the course From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as/ relevant evidence, still,, the statement made therein shall not alone be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfill! the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 27. With respect to evidentiary value of regular account book, the Hon'ble Supreme Court in the case of V.C. Shukla 1998 (3) SCC 410 has laid down :- "37. In Beni v. Bisan Dayal it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hiralal v. Ram Rakha the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been proved, said, that the rule as laid down in Section 34 of Tie Act that entries in the books of account regularly kept in the course of business are relevant whenever they refer to a matter in which the Court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts." The contention of the appellant that during the course of search proceedings, no incriminating material as regards to cash deposits and withdrawals during the year under consideration was found and seized. The MS Excel sheet which the AO is referring to in the entire assessment order is pertaining to a limited period falling under AY 2011-12, hence making it amply clear that there was no incriminating material for the year under IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 10 consideration is also found to be correct. Considering the facts of the appellant’s case and the judicial pronouncements relied upon by the appellant, I hold that the addition made by the AO on account of unexplained cash credit in the hands of the appellant u/s 69A of the Act for an amount of Rs.30,02,511’/- is not justified and the same is hereby deleted.” 14. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 15. The learned DR before us vehemently supported the stand of the AO by reiterating the findings contained in his order which we have already adverted to in the preceding paragraph. Therefore we are not repeating the same for the sake of brevity. 16. On the contrary the learned the AR before us submitted that cash deposits were made out of opening cash balance of Rs. 25 Lakh and cash withdrawal made during the year which is duly verifiable from cash books. The explanation for all the credit entries in bank and in cash book was duly furnished before the AO during the assessment proceedings. The AO merely based on some excel sheet found from the premises of Shri Anil Hiralal Shah made presumption that the cash deposit represent accommodation entry and made addition under 69A of the Act without bringing any corroborative material on record. 17. Both, the ld. DR and AR before us vehemently supported the order of the authorities below as favorable to them. 18. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case, the cash deposited by the assessee was treated as unexplained money under section 69A of the Act. The provision of Section 69A of the Act is reproduced below: 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 11 18.1 On a plain reading of the above provisions, it is revealed that, the following conditions should be fulfilled for attracting the provisions of section 69A of the Act. i. There should be money, bullion, jewelry or other valuable article found which were not recorded in the books of accounts. ii. No explanation was offered by the assessee with respect to such unrecorded money, bullion, jewelry or other valuable article found, or iii. The explanation offered by the assessee was not satisfactory to the AO. 18.2 Admittedly, there were deposits of cash in the bank account. The explanation was offered by the assessee to the AO that the cash was deposited out of the cash withdrawal from the earlier year as well as in the year under consideration. However, the explanation offered by the assessee was not found satisfactory by the AO. As such, the AO was of the view that in normal parlance no business man withdraw money from bank and kept the same for redeposit in the bank on later stage. As per the AO the modus operandi of the assessee was very unusual. Thus the AO treated the amount of cash deposit as unexplained money under section 68 of the Act. However, the learned CIT (A) was pleased to delete the addition made by the AO. 18.3 In the light of the above discussion, we note that, the activity of the assessee i.e. withdrawing the cash and depositing the same in the bank account on regular basis, appears to be very unusual. It is for the reason that no prudent businessman will do so, particularly in a situation where there was already sufficient cash in hand available with the assessee all the time. Indeed, a suspicion arises in the mind for the genuineness of the transaction on hand as discussed above. 18.4 But it is the settled law, a suspicion cannot take the place of the evidence as held by Hon’ble Supreme Court in the case of CIT vs. Daulat Ram Rawatmull reposted in 53 ITR 574, the relevant extract reads as under:- “The circumstances relied upon by Mr. Sastri do raise suspicion, but suspicion cannot take the place of evidence.” IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 12 18.5 In view of the above, there cannot be any addition made to the total income of the assessee based on suspicion. A suspicion/doubt requires to investigate the facts in detailed in order to find out some evidence so as to unearth the income of the assessee. 18.6 For the sake of repetition, we also note that indeed, the activity of withdrawing the cash and redeposit in the same in the bank is very unusual practice but there is no prohibition under any of the law for the time being in force for doing such activity. Thus, merely an unusual activity of the assessee does not give any authority to the revenue to make the addition to the total income of the assessee. 18.7 Coming to case finding of the AO who treated the cash deposit as unexplained money under section 69A of the Act. Firstly the provision of section 69A apply to unaccounted money found. There was no finding of the Revenue authority that any money was found in possession of the assessee which is not recorded in the books of account maintained by the assessee. Indeed, the cash deposit made by the assessee firm in its books of account was very much recorded in the books of account. Therefore the finding of the AO is based on wrong assumption of law. 18.8 In fact the assessee in the given facts and circumstances has explained the source of cash deposit by furnishing the necessary details which have been elaborately discussed in the preceding paragraph. Thus the onus shifted upon the AO to disprove the contention of the assessee based on the tangible materials. But we note that the AO has not brought any iota of evidence suggesting that the amount of cash deposit was not out of the cash withdrawal from the bank. Likewise, there was no information that the assessee has spent the cash withdrawal somewhere else towards the capital or revenue expenses. At this juncture we also find pertinent to refer the order of this tribunal in case of IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 13 Sudhirbhai Pravinkant Thaker vs. ITO reported in 88 taxmann.com 382, where in similar facts and circumstances it was held as under: 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgements relied upon by the ld. counsel for the assessee. There is no dispute with regard to the fact that the assessee had deposited the cash of Rs.11,27,800/- starting from 07/06/2007 to 31/02/2008. The cash withdrawn from the bank was of Rs.4,20,000/- on 01/07/2006, Rs.4,90,000/- on 06/07/2006, Rs.83,000/- on 26/06/2007, Rs.51,000/- on 20/11/2007, Rs.1,28,000/- on 14/12/2007 and Rs.2,00,000/- on 07/01/2008. However, the cash was deposited on 07/06/2007 of Rs.2 lacs, on 08/06/2007 of Rs.2 lacs, on 11/06/2007 of Rs.1,50,000/-, on 12/06/2007 of Rs.2 lacs, on 13/06/2007 of Rs.2,25,000/-. The total deposits till 13/06/2007 was of Rs.9,75,000/- and the amount withdrawn till 06/07/2006 was of Rs.9,10,000/- (Rs.4,20,000 + 4,90,000). Rest of the deposits of the total addition were made on 18/06/2007, 26/06/2007 and 13/02/2008. However, withdrawal after 06/07/2006, the assessee had withdrawn on 26/06/2007 of Rs.83,000/-, on 20/11/2007 of rs.51,000/-, on 14/12/2007 of Rs.1,28,000/- and on 07/01/2008 of Rs.2,00,000/-. From 20/11/2011 to 07/01/2008 the assessee had withdrawn total amount of Rs.3,79,000/-. However, cash was deposited in the bank account after 13/06/2007 of Rs.1,52,800/-. So far as the amount of Rs.83,000/- is concerned, i.e. matching from withdrawals and deposits and rest of the amount, there is a gap between withdrawals and deposits of the amount. In respect of deposit made on 13/02/2008 is also within one month from the withdrawal of amount on 07/01/2008. In respect of other entries, the cash withdrawal is even before one year of deposit of the amount. The contention of the assessee is that the amount was kept as cash in hand. The authorities have doubted about the explanation furnished by the assessee. The authorities below have doubted the source of the cash deposits, however, the contention of the ld. counsel for the assessee is that he had withdrawn the amount from his bank account and there is no finding by the authorities below that the cash withdrawn by the assessee was utilized for any other purpose. In the absence of such finding, addition is not justified. We find merit into the contention of the ld. counsel for the assessee that there is no dispute that the amount which was withdrawn by the assessee on various dates during the year 2006 was available with him for making deposits. In the absence of finding that the amount which was previously withdrawn by the assessee had been utilized for any other purpose merely on the basis of conjecture that the amount might have been utilized for any other purpose and was not available with the assessee for making the deposits, we are unable to accept the reasoning of the authorities below. In our considered view, when the assessee has demonstrated that he had withdrawn cash from the bank and there is no finding by the authorities below that this cash available with the assessee was invested or utilized for any other purpose, in that event, it is not open to the authority to make the addition on the basis that the assessee failed to explain the source of deposits. Moreover, the authorities below have not disputed the fact that the assessee had withdrawn amount of Rs.9,10,000/- before the deposits made on various dates during the FY 2007-08. Therefore, the orders of the authorities below are set aside and the AO is directed to delete the addition. Thus, ground raised in the assessee's appeal is allowed. 18.9 In view of the above, there cannot be any addition to the total income of the assessee on account of cash deposited in the bank unless the AO demonstrate that the amount in question has been used by the assessee for any other purpose. Thus, in our considered view the addition is made on inferences and presumptions which is bad in law. Accordingly, we do not find any infirmity in the order of the IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 14 learned CIT(A). Thus, we direct the AO to delete the addition made by him. Hence the ground of appeal of the Revenue is hereby dismissed. 19. The next issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition made by the AO for Rs. 1,42,40,000/- on account of amount credited in bank treated as unexplained under section 69 of the Act. 20. During the year an aggregate of Rs. 1,42,40,000/- was credited in the bank account of the assessee through cheque. The assessee during the assessment proceeding submitted that the all the transaction in bank account were duly recorded in the books of account therefore no adverse inference can be drawn. 20.1 However, the AO held that the assessee is required to furnish the detail of depositors such as their identity, genuineness of deposit and their creditworthiness. The AO also observed that the cheques were credited from the various concern/ entities which were under the control of Shri Atul Hiralal Shah and shown as loan but the genuineness of the same was not proved by those entities. Further, Shri Atul Hiralala shah and his associate were earning unaccounted income by indulging in share market manipulation. Therefore, for this reason also the amount credited in the bank of the assessee by the entities of Atul Hirala Shah cannot be held genuine. The AO further observed that on money in the form of cash received by SIPL layered in the bank of individual and entities of sutaria family. 20.2 Thus, the AO in view of the above treated the entire amount credited in the bank of the assessee by cheque deposit amounting to Rs. 1,42,40,000/- as unexplained money under section 69A of the Act in the hand of the assessee and added to the total income of the assessee. 21. Aggrieved assessee preferred an appeal to the learned CIT(A). 22. The assessee before learned CIT(A) submitted that bank account was credited on account of unsecured loan from the following parties: IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 15 Sr. No. Name of Person PAN Amount i) Siddham Finance AAQHS 4264 N 94,20,000 ii) Saral Management & consultancy AACHS 8451 H 46,00,000 iii) Atul H. Shah ALHPS 1805 K 2,20,000 Total 1,42,40,000 22.1 The assessee further submitted that the AO made addition under section 69A of the Act which is not applicable in the fact on hand. It was further submitted that the jurisdiction of above parties fall with the same AO and their assessments under section 143(3) r.w.s. 153A of the Act were made by the AO in case of above parties. Therefore it is imperative that the all the details being identity of creditor, their books of account, ITR banks statement must be available with the AO. Hence the finding of the AO that the identity, genuineness of transaction and credit worthiness was not explained is factually wrong. The assessee also claimed that the amount received from first 2 parties namely M/s Sidham Finance and Saral Management & Consultancy has been paid back through banking channel in entirety in the year under consideration itself. As such at the end of the year there was debit balance in the account ledger account of M/s Siddham finance. 22.2 Similarly, the addition of Rs. 2,20,000/- on account of loan from Shri Atul Hiralal shah also was not justifiable for the reason that the ledger of Shri Atul Hiralal was credited by journal entry. As such the assessee firm has purchased land property for an amount of Rs. 2.2 lakh for which the payment was paid by the Shri Atul Hiralal on its behalf. Thus the transaction was carried out in ordinary course of business. 23. The learned CIT(A) after considering the submission of the assessee deleted the addition made by the AO by observing as under: “6.4 On merit, on perusal of the details of unsecured loan party, it is noticed that the AO has made the addition on account of unsecured loan received during the year from Siddham Finance, Prop. Sanjaybhai M. Sutaria – HUF and Saral Management and Consultancy, Prop. Mahendrabhai M. Sutaria-HUF. The identity of the loan parties are getting established as the AO being the Assessing Officer of Sarthav Infrastructure Pvt. Ltd. has duly provided in the assessment order of Sarthav Infrastructure Pvt. Ltd. for AY 2009-10 at Page No. 99 the details with regard to Siddham Finance and Saral Management and Consultancy himself stated the details such as PAN Number, Returned income from AY IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 16 2009-10 till AY 2015-16 and therefore, all the necessary details as regards to the PAN and return of income for all the years were on the record of the AO. The Lender parties Siddham Finance and Saral Management and Consultancy have filed the return of income for A.Y. 2009-10 showing total income of Rs.6,80,960/- and Rs. 2,22,2G,630/- respectively. The AO at Page 19 of the assessment order of Sarthav Infrastructure Pvt.Ltd for A.Y. 2009-10 has provided a chart showing PAN No and return of income details, thus providing the identity and creditworthiness of the parties of Sarthav Group. In respect of Siddharn Finance unsecured loan for an amount of Rs.94,20,000/- has been received during the year under consideration and Rs.95,55,000/- was also repaid during the year under consideration thereby making it as advance from unsecured loan of Rs.135000/- i.e. closing balance and hence the addition of Rs. 94,20,000/- is not justified. Further, the appellant has also submitted that in respect of Saral Management & Consultancy (Prop. Mahendra Sutaria - HUF) unsecured loan for an amount of Rs. 46,00,000/- has been received during the year under consideration and Rs.46,00,000/- was also repaid during the year under consideration and hence the addition of Rs.46,00,000/- is not justified. That apart the AO of the appellant is also the AO of Sara! Management & Consultancy which is of Sarthav Group and was under the assessment proceedings u/s. 143(3) r.w.s.153C before the AO and hence the return of income of the aforesaid lender party as well as bank statement and books of accounts were already available on the record of the AO. The appellant has also placed on record the ledger account of Sarthav Farms & Resorts in the books of lender parties Siddham Finance and Saral Management and Consultancy, ITR as well as bank statements to prove that the transaction has taken place through proper banking channel. The appellant has also relied upon the decision of decision of Hon'ble High Court of Gujarat in the case of DCIT vs. Rohini Builders 256 ITR 360 and various judicial pronouncements of the Hon'ble Gujarat High Court, other High Courts and Tribunals and also made a comparison and similarity between the decision of Rohini Builders (cited supra) and the appellant's case under dispute. On careful consideration of above mentioned material, the identity of the lender parties Siddham Finance, (Prop. Sanjaybhai M. Sutaria-HUF) and Saral Management and Consultancy (Prop. Mahendrabhai M. Sutaria - HUF) and creditworthiness is duly established. It is also seen that appellant has also repaid an amount of Rs.95,55,000/- to Siddham Finance, (Prop. Sanjaybhai M. Sutaria- HUF) and Rs.46,00,000/- to Saral Management and Consultancy (Prop. Mahendrabhai M. Sutaria - HUF) squaring off the loan during the year under consideration. Th the addition made by the AO on account of unsecured loans of Rs. 94,20,000/- and Rs.46,00,000/- received during the year under consideration from Siddham Finance and Saral Management and Consultancy respectively, are not justified and the same is hereby deleted. 6.5 . In respect of addition made in name of Shri Atul Hiralal Shah, the appellant explained the transaction that farmers Arjan Babaji Thakor, Chundaii Sagramji and Kaliben Keshaji purchased land on behalf of M/s. Sarthav Farms and Resorts and sold it to M/s. Sarthav Farms and Resorts in later years and payment for which was made by Shri Atul Hiralai Shah to aforesaid farmers so ledger of Atui Hiralal Shah was credited in books of appellant by passing a Journal Entry in name of aforesaid farmers. The appellant contended that the above transaction being in ordinary course of business cannot be construed as unsecured loan but a mere routine nature of transaction duly recorded in the books of appellant firm by passing a journal entry. Further, the appellant contended that It had not received any actual ' funds from the Atul Hiralai Shah during the year under consideration but by crediting the ledger account of the Atul Hiralal Shah by way of a Journal Entry by the appellant as Atul Hiralal Shah acted as a mediator of providing funds to the farmers on behalf of M/s. Sarthav Farms & Resorts not resulting into actual funds being given by Shri Atul Hiralal Shah to the appellant by unsecured loan, the addition made by the AO for an amount of Rs.2,20,000/- is not justified. Therefore, the addition made by the AO for an amount of Rs.2,20,000/- in respect of credit balance of Shri Atul Hiralal Shah as on 31.03.2009 u/s.68 of the Act is not justified and the same is hereby deleted. Considering the facts of the appellant’s case and the judicial pronouncements relied upon by the appellant, I hold that the addition made by the AO on account of unexplained money in IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 17 the hands of the appellant u/s. 69A of the Act for an amount of Rs.1,42,40,000/- is not justified and the same is hereby deleted. This ground of appeal is allowed.” 24. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 25. The learned DR before us reiterated the finding of the AO contained in the assessment order. 26. On the contrary the learned the AR before us submitted that all the transactions were duly recorded in the books of accounts and therefore no adverse inference can be drawn against the assessee. 27. Both, the ld. DR and AR before us vehemently supported the order of the authorities below as favorable to them. 28. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly the AO treated the amount credited in bank account through banking channel as unexplained money under section 69A of the Act for reason that the assessee has not provided the identity of the creditor, genuineness of the credit and credit worthiness of the creditor. At the outset we find that the provision of section 69A of the Act does not apply in the facts and circumstances on the issue on hand. As such, the provision of section of section 69A of the Act applies where the assessee is found to be owner of any money, bullion, jewelry, or other valuable which is not accounted in the books of account and no explanation is furnished with regard to such unaccounted money, bullion, jewelry or valuables. However, in case on hand, the appellant firm has not been found to be owner of any money, bullion, jewelry or valuable which is not recorded in the books of account of the assessee. 28.1 Coming to the AO allegation that the identity of the creditor, genuineness of credit and creditworthiness of the creditor not established. On this regard we find that the amount has been credited by three parties namely Siddham Finance IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 18 (Prop-Sanay Sutaria), Saral Management & Consultancy (Prop-Mahendra Sutaria) and Atul Hiralal Shah. All these parties were subject to the proceeding under section 153A/153C of the Act before the same AO. Thus it is clear that the AO was having access to every financial detail of these parties. Hence, the allegation that the identity of creditor was not established is factually wrong. Moving to the genuineness of the credit we find that the learned CIT(A) has given categorical finding that in case of M/s Siddham Finance and M/s Saral Management & Consultancy from whom account was credited for Rs. 94.2 Lakh and 46 lakh was repaid through baking channel in the year under consideration itself. Thus in view of the judgment of Hon’ble jurisdictional high court of Gujarat in case of CIT Vs. Rohini builders reported in 256 ITR 360 once the amount received through banking channel and repaid through banking channel, the genuineness of transaction and credit worthiness cannot be doubted. The relevant observation of the Hon’ble court extracted as under: “The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques.” 28.2 Coming to genuineness and creditworthiness of amount of Rs. 2.2 lakh credited from the account of Shri Atul Hiralal Shah, we find the learned CIT(A) has given categorical finding that his ledger account was credited by passing through journal entry in the ordinary course of business. The finding of the learned CIT(A) has not been controverted by the learned DR by placing adverse material evidence. Further, Shri Atul Hirala Shah is regular filer of return showing substantial income being capable of making payment of Rs. 2.2 lakh only on behalf of the assessee. Thus the genuineness and creditworthiness in case of Atul Hiralal Shah also got established. Thus in view of the above elaborated discussion, we do not find any infirmity in the order of Ld. CIT (A). Hence the ground of appeal of the revenue is hereby dismissed. 29. In the result appeal of the Revenue is dismissed. IT(SS)A No. 353/Ahd/2018 & CO No.150/Ahd/2019 Assessee : Sarthav Farms & resorts AY : 2009-10 19 Coming to CO No. 150/Ahd/2019 filed by the assessee 30. At the outset we note that the assessee in the CO filed by it has supported the order of the Ld. CIT(A). Accordingly, we hold that no separate adjudication is required for the CO filed by the assessee. Hence, we dismiss the same as Infructuous. 31. In the result, the CO filed by the assessee is dismissed as infructuous. 32. In the combined result, appeal filed by the Revenue as well as CO by the assessee is hereby dismissed. Order pronounced in the open Court on 24 August 2022 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad, Dated 24/08/2022