JUDGMENT :

(P.S. Dinesh Kumar, J.)

This appeal by the Revenue challenging the order dated 28.09.2018 in ITA No.1363/BANG/2017 passed by the ITAT1, "C" Bench, Bangalore, has been admitted to consider the following questions of law:

"1. Whether on the facts and in the circumstances of the case, the CIT and Tribunal are right in law in deleting the additions made on account of cash payments of Rs. 3,45,00,000/- made to M/s.T.V.Aleyas Engineering Pvt.Ltd., by erroneously holding that the CIT(A) has rightly deleted the said additional by a detailed analysis of the entries found in the seized material and the entries recorded in the books of accounts without considering the seized materials which contained cash payments amounting to Rs. 5,00,00,000/- made to M/s.T.V.Aleyas Engineers Pvt.LTd., and assessee had not satisfactorily explained the said payments and as such assessee failed to discharge burden of proof?

ii. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the addition made under Section 69C of the Act for Rs. 1,09,05,000/- as interest by erroneously holding that the materials relied upon by assessing authority for making such addition is not reliable piece of evidence and entries found with regard to the payment through cheque do not co-relate with the entries found in the books of account even though the seized document contains information that the assessee was paid interest @ 24% on account of delay in payment of non refundable deposit amounting to Rs. 1,09,05,000/- and further statement recorded on 4.2.2013 also establishes the same?

iii. Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as the Tribunal has not considered the seized materials in proper prospective which clearly establishes that assessing authority rightly made additions on the basis of seized materials?"

2. Heard Shri.K.V.Aravind, learned Senior Standing Counsel for the Revenue and Shri.K.Mallahar Rao, learned Advocate for the Assessee.

3. Brief facts of the case are, the Assessee has filed its return for AY 2011-12 disclosing a taxable income of Rs. 5,93,32,960/-. A search under Section 132 of the INCOME TAX ACT , 1961 (for short 'IT Act') was conducted in Assessee's premises. A notice under Section 153 was issued and Assessee filed its return disclosing the same taxable income. The AO3 completed assessment and added a sum of Rs. 3,45,00,000/- and Rs. 1,09,05,000/-. The CIT(A) 4 allowed the appeal and deleted both the additions made by the AO. Revenue preferred an appeal before the ITAT5 and the same has been dismissed by the impugned order.

4. Shri.Aravind adverting to para 4.11 and 4.12 of the assessment order submitted that the Assessee has contended that a sum of Rs. 5 crores was agreed to be paid in cash. The same is corroborated by the seized material which is at page 9 and e-mail page No.11 of the assessment order. In substance, he submitted that the books of accounts reflected payment of Rs. 19.30 crores, whereas in the explanation given by Assessee, a payment of Rs. 22.30 crores has been shown. According to him, the explanation also suggests that initial proposal was to pay Rs. 17.30 crores by way of cheque and balance sum of Rs. 5 crores by cash. Therefore, based on Assessee's statement and the seized material on record, AO was justified in adding the aforementioned amounts. Assailing the order passed by CIT(A), he submitted that CIT(A) has merely tabulated the payments made through cheques and recorded a finding that the amount of Rs. 22.35 crores has been made to M/s.TVAEPL. He argued that in addition to the amounts reflecting in the tabular form relied upon by CIT(A), there could be additional payment of Rs. 5 crores as the same has been admitted by Assessee itself. He submitted that ITAT has also failed to appreciate this crucial fact and therefore, both the orders passed by CIT(A) and ITAT are unsustainable in law.

5. Shri.Ma