IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER &

SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.5600/MUM/2024 (A.Y. 2018-19)

Assessee by : Shri Nikhil Rungat,AR Revenue by : Ms. Kavitha Kaushik, (Sr. DR)

Date of Hearing 06.11.2025 Date of Pronouncement 06.01.2026 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :-

The present appeal arising from the appellate order dated

02.09.2024 is preferred by the Revenue against the order passed by the Learned Commissioner of Income-tax, Appeal CIT(A) 49, Mumbai[hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147 r.w.s.144 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 29.03.2023 for the Assessment Year [A.Y.]

2018-19.

2. The grounds of appeal are as under:-

1. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 1,21,43,554/- made u/s. 69C of the Act.

2. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in stating that there is absolutely no evidence against the Appellant that it has incurred any expenditure outside the book. However, there is a ledger sheet of the assessee seized from the residence of Sri Sanjay Mittal, which clearly reflect the cash payments of Rs. 1,21,43,554/- made to M/s. Hind Unitrade and the said cash payment remained as unexplained expenditure because the assessee failed to furnish any evidences to support the cash payment.".

3. Brief facts of the case are that the assessee company filed return of income for the year declaring Loss of Rs. 2,08,67,179/-. In the course of search on 17.02.2018 incriminating material in the form of ledgers were found and seized from the residence of Sri Vinod Agarwal, one of the main and active directors of M/s. Hind Unitrade Group. The ledger account reflected contemporaneous recordings of details about sale of coal by the group to various parties as per name given in each ledger folio. The ledgers contained details of both kind of transactions i.e. sale of coal through banking channel as well as in cash. The ledgers were self-explanatory in its interpretation and reflecting such record for the F.Y. 2017-18. The Director admitted that the cash transactions were not recorded in the regular books of accounts. The total cash sales as per these ledgers were calculated at Rs. 4.82 cr. and cash receipt against such sale was of Rs. 3.26 cr. It also reflect the addresses of office, factory, director of these companies involved which has one common unique feature i.e. all these are sponge iron or iron ingots manufacturer mainly of Rourkela (Orissa) at Sundargarh district. The modus operandi as transpired on examination & verification is, all these companies are indulged in cash sale of sponge iron, iron ingots for TMT, wire and other iron & steel products at Raigarh, Raipur and other districts of Chattisgarh and when these material is delivered, the transport truck while returning back takes with them such unaccounted cash purchase of coal,. The cash account is adjusted with in Chhattisgarh through hawala i.e. payment of cash by the TMT and steel manufacturers to the seller of coal like M/s. Hind Unitrade, thereby settling the account with in Chhattisgarh itself. Similarly, ledger sheet of M/s. Jay Jagannath Steel and Power Ltd.(the assessee) was also found and seized from the residence of Sri Sanjay Mittal (main person & MD of the Group) which reflected receipt of amount through RTGS both in cheque as well as in cash, the cash receipts of which amounted to Rs. 1,21,43,554/-. Since the assessee company during the year had made cash payments to M/s Hind Unitrade amounting to Rs. 1,21,43,554/- which were not recorded in its books of account of the year, such bogus cash payments to the tune of Rs. 1,21,43,554/- was proposed to be added u/s 69C of the Act.

3.1 In this regard, the assessee contended before the AO that only M/S. Hind Unitrade Private Limited could explain abo