Telangana HC Sets Aside Section 68 Additions on Explained Rs.5.25 Crore Cash Credits

Agarwal Industries Pvt Ltd Vs DCIT (Telangana High Court)

Summary: The Telangana High Court allowed the appeal under Section 260A of the Income Tax Act, 1961 against the Income Tax Appellate Tribunal, Hyderabad Bench ‘A’, Hyderabad order in ITA.No.60/Hyd/2018 decided on 19.01.2023. The ITAT had dismissed the appellant’s appeal against additions under Section 68 of the Act for assessment year 2010-11. The additions comprised Rs.5,25,00,000/- received from Smt. Hema Kedia, Rs.10,00,000/- concerning Smt. Ranjana Agarwal, and Rs.23,18,298/- towards difference in interest as per Form 26AS. The appellant contended that the amounts received from Smt. Hema Kedia and Smt. Ranjana Agarwal had been verified, that the funds belonged to the respective persons, and that their creditworthiness had been accepted. The Revenue contended that the two amounts represented bogus entries introduced to infuse the appellant’s own funds and relied upon CIT vs. P. Mohanakala on the requirements of Section 68. The High Court held that Section 68 requires the assessee to satisfactorily explain the identity of the creditor, creditworthiness or financial capacity, and genuineness of the transaction. For the Rs.5,25,00,000/- received from Smt. Hema Kedia, the Court found that the appellant had furnished confirmation, PAN, bank statement and income-tax returns, and that the amount was received by account-payee cheque. The Court held that her non-appearance in response to summons did not by itself defeat the explanation. Regarding Rs.10,00,000/- concerning Smt. Ranjana Agarwal, the Court found that the amount represented repayment of an unsecured loan earlier advanced by the appellant. The Court also rejected the ITAT’s invocation of the doctrine of real income and approbate and reprobate theory. It held that the assessee had discharged the initial burden under Section 68 and that the Revenue had not produced independent cogent material establishing that the sums represented the appellant’s own unaccounted income. The High Court consequently answered the substantial question of law in favour of the appellant and against the Revenue, set aside the ITAT order dated 19.01.2023 to the extent it sustained the three additions, and allowed the appeal.

Background of the Appeal

The appellant filed the instant appeal under Section 260A of the Income Tax Act, 1961 challenging the order passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘A’, Hyderabad in ITA.No.60/Hyd/2018, decided on 19.01.2023.

The ITAT had dismissed the appellant’s appeal against additions of unexplained cash credits under Section 68 of the Act for assessment year 2010-11.

The appellant-company had filed its return of income on 03.02.2011, admitting income of Rs.43,10,278/- under the regular provisions of the Act and income of Rs.3,47,58,664/- under Section 115JB of the Act. The return was processed under Section 143(1) and the case was subsequently selected for scrutiny through Computer-Assisted Scrutiny Selection (CASS).

In response to notices issued under Sections 143(2) and 142(1), the authorised representatives of the appellant appeared from time to time and furnished the information called for. After hearing the authorised representatives and verifying the information filed, the Assessing Officer completed the assessment under Section 143(3) by order dated 28.03.2013, making various additions.

Additions Sustained by the Lower Authorities

The appellant challenged the assessment before the Commissioner of Income Tax (Appeals) through Appeal No.0078/CIT(A)-1, Hyd/2013-14/2017-18. The CIT(A) did not grant the relief sought by the appellant.

The three additions referred to in the judgment were:

1. Rs.5,25,00,000/- under Section 68: The amount was received from Smt. Hema Kedia by way of cheque. The cheque had been specifically instructed not to be cashed because Smt. Kedia did not have adequate amount in her bank.

2. Rs.10,00,000/- under Section 68: The amount concerned Smt. Ranjana Agarwal and was stated to be a return of the amount paid back to the appellant towards an unsecured loan.

3. Rs.23,18,298/- under Section 68: The amount represented the difference in interest as reflected in Form 26AS and the interest receipts recorded by the appellant.

The ITAT held that the arguments submitted by the appellant were not satisfactory and that the reasons put forth were devoid of merit. It therefore did not interfere with the findings and order of the CIT(A) and dismissed the appeal.

Appellant’s Submissions Before the High Court

Learned Senior Counsel for the appellant submitted that the sums received from Smt. Hema Kedia and Smt. Ranjana Agarwal, amounting to Rs.5,25,00,000/- and Rs.10,00,000/- respectively, had been duly verified.

It was submitted that there was no dispute regarding the fact that the funds belonged to the two persons and that their creditworthiness had been accepted by the assessing authorities.

The appellant further contended that, despite tracing and declaring the origin of the amounts received, the assessing authorities had made the additions under Section 68.

The appellant also challenged the ITAT’s invocation of the doctrine of real income, submitting that the appellant had proved that the funds belonged to Smt. Hema Kedia and that this was confirmed by the statement given by her before the authority concerned during assessment proceedings.

The appellant further contended that the ITAT had invoked the approbate and reprobate theory, which, according to the appellant, did not apply to the facts of the case.

Revenue’s Submissions Before the High Court

Learned Senior Standing Counsel for the Income Tax Department contended that the sums of Rs.5,25,00,000/- and Rs.10,00,000/- were bogus entries intended to infuse the appellant’s own funds into the company.

The Revenue submitted that, during the assessment proceedings, no share application money was found in the appellant’s balance sheet, which raised doubts regarding the origin and legality of the amounts.

It was further submitted that, despite summons issued by the Revenue, Smt. Hema Kedia had refused to appear and depose regarding the creditworthiness and genuineness of the transactions.

On that basis, the Revenue defended the additions made under Section 68.

Section 68 and the Burden of Proof

The Revenue relied upon CIT vs. P. Mohanakala, reported in 291 ITR 278 (SC), regarding the conditions necessary for a transaction to fall within Section 68.

The High Court considered the statutory provision governing cash credits. Section 68 provides that where a sum is found credited in the books of an assessee and the assessee offers no explanation regarding its nature and source, or the explanation offered is not satisfactory in the opinion of the Assessing Officer, the sum may be charged to income tax as the income of the assessee of that previous year.

The Court held that a plain reading of Section 68 casts a burden on the assessee, once a credit entry appears in its books, to satisfactorily explain three cumulative facets:

1. The identity of the creditor or investor;

2. The creditworthiness or financial capacity of the creditor; and

3. The genuineness of the transaction.

The Court held that it is only when the assessee fails to discharge this initial onus, or where the explanation furnished is found unsatisfactory by the Assessing Officer on cogent material, that the credited sum may be treated as unexplained income and brought to tax.

The Court further held that Section 68 does not give the Assessing Officer an unfettered discretion to reject an explanation merely on suspicion, surmise or conjecture. The rejection must be founded on objective material and must survive scrutiny on the three-fold test identified by the Court.

Rs.5.25 Crore Credit from Smt. Hema Kedia

In respect of the addition of Rs.5,25,00,000/- received from Smt. Hema Kedia, the High Court noted that the appellant had furnished:

• Confirmation letter of the creditor;
• Her permanent account number;
• Her bank statement reflecting the source of funds; and
• Her income-tax returns demonstrating her financial standing.

The amount was received by way of an account-payee cheque. The Court observed that this mode of transaction was a recognised indicator of genuineness and left a clear trail capable of verification.

The Court held that the fact that the appellant, out of abundant caution and on the specific instructions of Smt. Kedia, did not immediately present the cheque for encashment because she had informed the appellant that she did not have sufficient clear balance at that point of time, could not by itself be elevated into a ground for doubting the genuineness of the transaction or the bona fides of the appellant.

Non-Appearance of the Creditor

The High Court acknowledged that Smt. Kedia did not personally appear before the Assessing Officer in response to the summons issued to her.

However, the Court held that non-appearance of a creditor could not be treated as fatal to the assessee’s case once the assessee had placed on record cogent documentary material establishing the identity of the creditor, her creditworthiness and the genuineness of the transaction.

The Court held that the assessee’s obligation under Section 68 was to satisfactorily explain the credit through material available to and within the power of the assessee to produce. It did not extend to compelling the physical presence of an independent third party over whom the assessee had no control.

The Court noted that the creditor had independently confirmed the transaction in writing and that the transaction was reflected in her disclosed bank account and tax filings. The failure of the creditor to personally depose, for reasons stated to be entirely her own, could not be attributed to the assessee so as to convert an otherwise explained credit into unexplained income.

Doctrine of Real Income and Approbate and Reprobate

The High Court did not sustain the ITAT’s reasoning insofar as it invoked the doctrine of real income and the theory of approbate and reprobate against the appellant.

The Court held that the doctrine of real income had no application to the fact situation, where the dispute was confined to whether a credit entry had been satisfactorily explained under Section 68.

Regarding the principle that a party cannot approbate and reprobate, the Court observed that the principle presupposes that the assessee has taken inconsistent stands at different points in the proceedings so as to take advantage of one position while disowning another.

The Court found that no such inconsistency had been demonstrated by the Revenue. According to the Court, the appellant had consistently maintained from the assessment stage through the appeal under Section 260A that the sum was received from Smt. Hema Kedia and belonged to her.

The Court held that the invocation of these two doctrines by the ITAT was misconceived and had resulted in a perverse appreciation of the factual matrix.

Rs.10 Lakh Received from Smt. Ranjana Agarwal

As regards the addition of Rs.10,00,000/- concerning Smt. Ranjana Agarwal, the Court found that the material on record disclosed that the amount represented repayment of an unsecured loan earlier advanced by the appellant to her.

The Court held that once it was shown, and was not seriously disputed, that the amount had originally been advanced by the appellant to the borrower and merely came back into the appellant’s books as repayment, the character of the receipt was self-evident.

The Court therefore held that the amount could not be treated as an unexplained cash credit within the meaning of Section 68.

The Court further observed that subjecting the same amount to tax for a second time, once as a loan advanced out of already taxed or explained funds and again as an unexplained credit upon its repayment, would result in an incongruous and unintended consequence that Section 68 was never designed to bring about.

Initial Burden Under Section 68 and Revenue’s Evidence

The High Court reiterated that the burden under Section 68 lies upon the assessee in the first instance but is not unlimited or unending.

Once the assessee places on record material sufficient to establish identity, creditworthiness and genuineness, the Court held that, prima facie, the onus shifts to the Assessing Officer to dislodge that material by bringing independent and cogent evidence on record.

The Court held that it was not open to the Assessing Officer, much less to the appellate authorities, to reject such material on mere suspicion, however strong, or on the basis of surmise unsupported by any positive finding.

In the present case, the Court found that the appellant had placed on record confirmations, bank statements, income-tax particulars of the creditors and books of account reflecting the underlying transactions, thereby discharging the initial burden cast upon it.

The Court further found that the Revenue had not brought on record any material independently establishing that the sums represented the appellant’s own unaccounted income routed back into its books in the guise of credits.

Observation Regarding Share Application Money

The Court also considered the observation that no share application money was reflected in the balance sheet.

It held that this observation did not by itself establish that the funds were bogus, particularly when the transactions in question were admittedly not share application money but unsecured loans and their repayment.

High Court’s Findings on the Three Additions

For the reasons recorded in the judgment, the High Court answered the substantial question of law in favour of the appellant and against the Revenue.

The Court held that the appellant had duly and satisfactorily discharged the burden of proof cast upon it under Section 68 with respect to all three additions.

The Court further held that the approach adopted by the CIT(A) and the ITAT in sustaining the additions, without properly appreciating the material placed on record and by importing considerations extraneous to Section 68, was erroneous both on facts and in law.

The findings of the ITAT were held to be founded on a misapplication of the doctrine of real income and the principle of approbate and reprobate and rendered without due regard to the documentary evidence establishing the bona fides of the appellant. The Court accordingly held that those findings could not be sustained.

Final Decision

The Telangana High Court allowed the appeal.

The order passed by the ITAT dated 19.01.2023, to the extent that it sustained the additions of:

• Rs.5,25,00,000/-;
• Rs.10,00,000/-; and
• Rs.23,18,298/-

under Section 68 of the Income Tax Act, 1961, was set aside.

The Court also directed that miscellaneous petitions pending, if any, would stand closed. There was no order as to costs.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

Heard Mr. Vedula Srinivas, learned Senior counsel representing Ms. Vedula Chitralekha, learned counsel for the appellant; and Ms. B. Sapna Reddy, learned Senior Standing Counsel for Income Tax Department appearing on behalf of the respondent.

2. The instant appeal under Section 260A of the Income Tax Act, 1961 (for short the ‘Act’) has been filed by the appellant challenging the order passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘A’, Hyderabad (for short the ‘ITAT’) in ITA.No.60/Hyd/2018, decided on 19.01.2023.

3. Vide the impugned order; the ITAT dismissed the appeal preferred by appellant who appealed against the unwarranted addition of unexplained cash credits received by appellant under Section 68 of the Act, for the assessment year 2010-11.

4. The brief facts of the case are that the appellant is a company which filed its return of income on 03.02.2011, admitting an income of Rs.43,10,278/- under regular provisions of the Act and income of Rs.3,47,58,664/ under the provisions of section 115JB of the Act. The return was processed under Section 143(1) of the Act. Subsequently, the case was converted to scrutiny through Computer-Assisted Scrutiny Selection (for short, ‘CASS’). In response to the notices issued under Section 143(2) and 142(1) of the Act, the authorized representatives of the appellant appeared from time to time and furnished the information called for. After hearing the authorized representatives and after verifying the information filed, the Assessing Officer completed the assessment order by making various additions and passed an order under Section 143(3) of the Act, dated 28.03.2013.

5. Being aggrieved by the order passed by the Assessing Officer, the appellant filed an appeal before the Commissioner of Income Tax (Appeals) (for short ‘CIT(A)’) vide Appeal No.0078/CIT(A)-1, Hyd/2013-14/2017-18. However, the CIT(A) also did not grant the relief sought for by the appellant. The reasons and the findings of the CIT(A) while disposing of the appeal was based on the three observations which are enumerated below:

a. First addition of Rs.5,25,00,000/- under Section 68 of the Act towards unexplained cash credits to the appellant by one, Smt. Hema Kedia by way of cheque, which was categorically instructed not to cash-in owing to the fact that Smt. Kedia was not having adequate amount in her bank.

b. Second addition of Rs.10,00,000/- under Section 68 of the Act towards unexplained cash credits which was a return of payback amount to the appellant for an unsecured loan by a borrower namely, Smt. Ranjana Agarwal.

c) Third addition of Rs. 23,18,298/- under Section 68 of the Act towards difference in interest as per Form 26AS, whereas during the assessment proceedings, the Assessing Officer had noticed that there is a difference of interest receipts held by the appellant and the amounts mentioned did not tally and led to a difference to the tune of Rs.23,18,298/- which was added by the CIT(A).

6. On appeal before the ITAT, it was held that the arguments submitted by the appellant were not satisfactory and the reasons put forth were also devoid of merit, and hence, the ITAT did not interfere with the findings and order of the CIT(A) and dismissed the appeal preferred by the appellant.

7. It is this impugned order of the ITAT which is under challenge in this instant appeal.

8. Learned Senior Counsel for the appellant submitted that the sums received from Smt. Hema Kedia and Smt. Ranjana Agarwal, amounting to Rs.5,25,00,000/- and Rs.10,00,000/- respectively, were duly verified and that there was no dispute raised against the fact that the funds belonged to the above-named persons. The credit worthiness of the two persons was duly accepted by the assessing authorities. Despite tracing and declaring the origin of the amounts received by the appellants, the assessing authorities made the addition against the appellant under Section 68 of the Act, which is an unwarranted and unreasonable action by the respondent.

9. Learned Senior Counsel for the appellant further contended that the invocation of ‘doctrine of real income’ by the ITAT was unwarranted, since the appellant proved that the funds belonged to Smt. Hema Kedia which was also held confirmed by the statement given by Smt. Hema Kedia before the authority concerned during the assessment proceedings, that the ITAT went into the ‘approbate and reprobate theory’ against the appellant which did not apply to facts of the case at hand.

10. Au contraire, learned Senior Standing Counsel for Income Tax Department contended that the sums received by the appellant i.e. Rs.5,25,00,000/- and Rs.10,00,000/- were nothing but bogus entries to infuse its own funds into its company. During the assessment proceedings, the respondent did not find any share application money in the balance sheet of the appellant which further raised doubts of its origin and legality. Further, upon summons by the respondent, Smt. Hema Kedia refused to appear and depose as to the creditworthiness and genuineness of the transactions made by her against the appellant. Based on the above findings, the respondent made the above mentioned amounts under addition under Section 68 of the Act.

11. Learned Senior Standing Counsel for Income Tax Department placed reliance on the case of CIT vs. P. Mohanakala¹ wherein the conditions which are necessary for a transaction to fall within Section 68 of the Act were extensively discussed. The relevant paragraphs are reproduced hereunder for ready reference, viz.,

“A bare reading of section 68 of the Income-tax Act, 1961, suggests that (i) there has to be credit of amounts in the books maintained by the assessee;(ii) such credit has to be a Sum of money during the previous year; and (iii) either (a) the assessee offers no explanation about the nature and source of such credits found in the books or (b) the explanation offered by the assessee, in the opinion ofthe Assessing Officer, is not, satisfactory. It is only then that-the sum so credited may be charged to income tax as the income of the assesseeof that previous year. The expression “the assessee offers no explanation” means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee.”

12. Having heard the contentions put forth on either side and on perusal of records, the question of law that falls for consideration in the instant appeal is “whether the appellant had discharged the burden cast upon it under Section 68 of the Act with respect to the three additions in issue, and if so, whether the CIT(A) and the ITAT were justified in nonetheless sustaining the said additions?”

13. It would be relevant at this juncture to take note of the provisions of Section 68 of the Act which deals ‘Cash Credit’. For ready reference, Section 68 of the Act is reproduced hereunder:

“Cash credits.

68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year:

Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,—

(a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and

(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided further that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—

(a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and

(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided also that nothing contained in the first proviso or second proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.

A plain reading of the aforesaid provision discloses that it casts a burden on the assessee, once a credit entry appears in its books of account, to satisfactorily explain three cumulative facets, namely (i) the identity of the creditor / investor (ii) the creditworthiness or financial capacity of such creditor to advance the sum in question and (iii) the genuineness of the transaction itself. It is only when the assessee fails to discharge this initial onus, or where the explanation furnished is found unsatisfactory by the Assessing Officer on cogent material, that the credited sum may be treated as unexplained income and brought to tax. The provision does not clothe the Assessing Officer with an unfettered discretion to reject an explanation merely on suspicion, surmise or conjecture; the rejection must be founded on objective material and must survive scrutiny on the touchstone of the three-fold test noticed above, as has also been amplified by the Hon’ble Supreme Court in the case of P. Mohanakala (supra).

14. In so far as the addition of Rs.5,25,00,000/- received from Smt. Hema Kedia is concerned, the record shows that the appellant had furnished the confirmation letter of the creditor, her permanent account number, her bank statement reflecting the source of funds, and her income-tax returns demonstrating her financial standing. The amount was admittedly received by way of an account-payee cheque, a mode of transaction which is itself a recognised indicator of genuineness and which leaves a clear trail capable of verification. The mere fact that the appellant, out of abundant caution and on the specific instructions of Smt. Kedia who candidly informed the appellant that she did not have sufficient clear balance in her account at that point of time did not present the cheque for encashment immediately, cannot by itself be elevated into a ground for doubting the genuineness of the transaction or the bona fides of the appellant and its endeavour to ensure that the transaction remained visible.

15. It is no doubt true that Smt. Kedia did not personally appear before the Assessing Officer in response to the summons issued to her. However, non-appearance of a creditor cannot be treated as fatal to the assessee’s case once the assessee has placed on record cogent documentary material establishing the identity of the creditor, her creditworthiness, and the genuineness of the transaction. The obligation of the assessee under Section 68 of the Act is to satisfactorily explain the credit through material that is available to and within the power of the assessee to produce. It does not extend to compelling the physical presence of an independent third party over whom the assessee has no control. Whereas, in the present case, the creditor has independently confirmed the transaction in writing and the transaction is duly reflected in her disclosed bank account and tax filings. The failure of the creditor to personally depose, for reasons entirely her own, cannot be attributed to the assessee so as to convert an otherwise explained credit into unexplained income.

16. We are also unable to sustain the reasoning of the ITAT insofar as it proceeded to invoke the doctrine of real income and the theory of approbate and reprobate against the appellant. The doctrine of real income has no application whatsoever to a fact situation such as the present, where the dispute is confined to whether a credit entry has been satisfactorily explained under Section 68 of the Act. Equally, the principle that a party cannot approbate and reprobate presupposes that the assessee has taken inconsistent stands at different points in the proceedings so as to take advantage of one position while disowning the other. No such inconsistency has been demonstrated by the Revenue against the appellant in the present case. The appellant has from the stage of assessment, right up to the instant appeal under Section 260A of the Act, maintained a consistent stand that the sum was received from Smt. Hema Kedia and belonged to her. The invocation of these two doctrines by the ITAT was misconceived and has resulted in a perverse appreciation of an otherwise straightforward factual matrix.

17. As regards the addition of Rs.10,00,000/- concerning Smt. Ranjana Agarwal, the material on record also discloses that this amount represented nothing more than the repayment of an unsecured loan earlier advanced by the appellant to her. Once it is shown, and it is not seriously disputed that the amount in question was originally advanced by the appellant to the borrower and merely came back into the appellant’s books as a repayment, the character of the receipt is self-evident and cannot be treated as an unexplained cash credit within the meaning of Section 68 of the Act. To subject the very same amount to tax for the second time, once as a loan advanced out of already taxed or explained funds, and again as an unexplained credit upon its repayment, would result in an incongruous and unintended consequence that the provision was never designed to bring about. The addition on this count, in our view, proceeds on a misapprehension of the true nature of the entry and cannot be sustained.

18. It requires to be reiterated that the burden under Section 68 of the Act, though lies upon the assessee in the first instance, is not an unlimited or unending one. Once the assessee places on record material sufficient to establish identity, creditworthiness and genuineness, prima facie the onus shifts on the Assessing Officer to dislodge that material by bringing independent and cogent evidence on record. It is not open to the Assessing Officer, much less to the appellate authorities, to reject such material on mere suspicion, however strong, or on the basis of surmise unsupported by any positive finding. In the present case, we find that the appellant did place on record confirmations, bank statements, income-tax particulars of the creditors, and books of account reflecting the underlying transactions, thereby discharging the initial burden cast upon it. The Revenue, on the other hand, has not brought on record any material to independently establish that the sums in question represented the appellant’s own unaccounted income routed back into its books in the guise of credits.

19. The observation that no share application money was reflected in the balance sheet does not by itself establish that the funds were bogus, particularly when the transactions in question were admittedly not share application money but unsecured loans and their repayment.

20. For all the reasons aforesaid, the substantial question of law involved in this appeal is answered in favour of the appellant and against the Revenue and it is held that the appellant had duly and satisfactorily discharged the burden of proof cast upon it under Section 68 of the Act with respect to all the three additions in issue, and the approach adopted by the CIT(A) as well as the ITAT in sustaining the said additions without properly appreciating the material placed on record and by importing considerations extraneous to Section 68 of the Act, was erroneous both on facts and in law. The findings of the ITAT, being founded on a misapplication of the doctrine of real income and the principle of approbate and reprobate, and being rendered without due regard to the documentary evidence establishing the bona fides of the appellant, cannot be sustained and are accordingly set aside.

21. In the result, the instant appeal stands allowed. The order passed by the ITAT, dated 19.01.2023, to the extent that sustains the additions of Rs.5,25,00,000/-, Rs.10,00,000/- and Rs.23,18,298/-under Section 68 of the Act is set aside.

22. As a sequel, miscellaneous petitions pending if any, shall stand closed. However, there shall be no order as to costs.

Notes: 

¹ 291 ITR 278 (SC) / [2007] 210 CTR 20 (SC)