D.Kabeerdas, Alappuzha V. DCIT, Kottayam

CO 15/COCH/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8884 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 06-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 20-07-2011
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR; SUSAN GEORGE VARGHESE
• Assessee Lawyers: R KRISHNAN
• Keywords: Search and seizure; Source of fund; Onus to prove
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 357 & 358/COCH/2011 ASSESSMENT YEARS : 2005-06 & 2006-07 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOTTAYAM. VS. SHRI D. KABEERDAS, DHANYA, M.O. WARD, ALLEPPEY. [PAN:ACOPD 0725F] (REVENUE-APPELLANT) (ASSESSEE-R ESPONDENT) C.O. NOS. 15 & 16/COCH/2011 (ARSG. OUT OF I.T.A. NOS. 357 & 358/COCH/2011) ASSESSMENT YEARS : 2005-06 & 2006-07 SHRI D. KABEERDAS, DHANYA, M.O. WARD, ALLEPPEY. [PAN:ACOPD 0725F] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOTTAYAM. (ASSESSEE-APPELLANT) (REVENUE-R ESPONDENT) REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR.DR AND SHRI M. ANIL KUMAR, CIT(DR) ASSESSEE BY SHRI R. KRISHNAN, CA DATE OF HEARING 06/06/2013 DATE OF PRONOUNCEMENT 23/08/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJ ECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD. C IT(A)-I, TRIVANDRUM AND THEY RELATE TO THE ASSESSMENT YEARS 2005-06 AND 2006-07. THE A PPEALS AND THE CROSS OBJECTION WERE HEARD TOGETHER AND HENCE THEY ARE BEING DISPOS ED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 2 2. IN BOTH THE YEARS, THE REVENUE IS AGGRIEVED BY T HE DECISION OF THE LD. CIT(A) IN DELETING THE ADDITIONS MADE U/S. 68 OF THE ACT. I N THE CROSS OBJECTION, THE ASSESSEE IS CONTENDING THAT THE LD. CIT(A) HAS NOT DISPOSED OF THE LEGAL GROUND RAISED BY THE ASSESSEE. THE ASSESSEE HAD CONTENDED THAT THE AO WA S NOT RIGHT IN LAW IN INITIATING ASSESSMENT PROCEEDINGS U/S. 153C OF THE ACT, SINCE THE ASSESSEES PREMISES WAS SUBJECTED TO SEARCH. 3. THE FACTS RELATING TO THE CASE UNDER CONSIDERATI ON ARE DISCUSSED IN BRIEF. THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATION S UNDER SECTION 132 OF THE ACT IN THE ASSESSEES RESIDENCE ON 24-11-2005. DURING THE COURSE OF SEARCH, CERTAIN BOOKS OF ACCOUNTS AND DOCUMENTS RELATING TO THE ASSESSEE WER E SEIZED. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICES U/S. 153C OF THE A CT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED FOR WEALT H STATEMENTS FROM THE ASSESSEE. FROM THE WEALTH STATEMENTS, THE ASSESSING OFFICER N OTICED THAT THE ASSESSEE HAS SHOWN CASH CREDITS IN BOTH THE YEARS UNDER CONSIDERATION. HENCE, THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE CASH CREDITS. THE ASSE SSING OFFICER FELT THAT THE ASSESSEE COULD NOT PROPERLY EXPLAIN THE CASH CREDIT OF RS.10 .00 LAKHS TAKEN FROM SHRI RAJESH OF KERA CREATIONS DURING THE FINANCIAL YEAR RELAVANT T O THE ASSESSMENT YEAR 2005-06. HENCE THE ASSESSING OFFICER ADDED THE SAME TO THE I NCOME RETURNED BY THE ASSESSEE FOR THAT YEAR. 4. SIMILARLY FOR THE ASSESSMENT YEAR, 2006-07, THE ASSESSING OFFICER ADDED THE FOLLOWING CASH CREDITS TO THE INCOME RETURNED BY TH E ASSESSEE, SINCE HE FELT THAT THE ASSESSEE COULD NOT EXPLAIN THEM SATISFACTORILY: (A) GOPALGIRI RS. 5.00 LAK HS (B) SMT. H. NADIRA RS. 2.5 0 LAKHS (C) SHRI T.A. SHAJAHAN RS. 2.50 LAKHS AGGRIEVED BY THE ADDITIONS MADE BY THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BY FILING THE APPEALS BEFORE THE LD. CIT(A) WHO DELETED THE CASH CREDIT ADDITIONS MADE IN BOTH THE YEARS. BEFORE THE LD. CIT(A), THE ASSESSEE, INTER ALIA, HAD RAISED A LEGAL ISSUE ABOUT THE VALIDITY OF INITIATING PROCEE DINGS U/S 153C OF THE ACT, SINCE THE I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 3 ASSESSEES RESIDENCE WAS SUBJECTED TO SEARCH. HOWE VER, SINCE THE LD. CIT(A) DID NOT ADJUDICATE THE SAID LEGAL GROUND. 5. AGGRIEVED BY THE ORDERS PASSED BY LD CIT(A), THE REVENUE HAS FILED THESE APPEALS BEFORE US CHALLENGING THE RELIEF GRANTED BY THE LD. CIT(A). THE ASSESSEE HAS FILED THE CROSS OBJECTIONS URGING THAT THE LEGAL GROUND RAISE D BY HIM BEFORE LD. CIT(A) WAS NOT ADJUDICATED BY THE FIRST APPELLATE AUTHORITY. 6. IN THE CROSS OBJECTIONS FILED FOR BOTH THE YEARS UNDER CONSIDERATION, THE LEGAL GROUND URGED BY THE ASSESSEE RELATES TO THE VALIDIT Y OF THE ASSESSMENTS FRAMED BY THE ASSESSING OFFICER U/S. 153C OF THE ACT. ACCORDING TO THE ASSESSEE, THE DEPARTMENT HAS CARRIED OUT SEARCH IN HIS RESIDENTIAL PREMISES AND HENCE THE ASSESSMENTS SHOULD HAVE BEEN FRAMED U/S. 153A OF THE ACT. FROM THE ORDERS OF LD. CIT(A), WE NOTICE THAT THE FIRST APPELLATE AUTHORITY HAS NOT ADJUDICATED THIS ISSUE. HOWEVER, THE LD. DR SUBMITTED THAT THERE IS NO MERIT IN THE CONTENTIONS RAISED BY THE ASSESSEE AND ACCORDINGLY SUBMITTED THAT THIS LEGAL ISSUE MAY BE DISPOSED OF BY THE TRIBUNAL. 7. THE LD D.R SUBMITTED THAT THE DEPARTMENT DID NOT ISSUE ANY SEARCH WARRANT IN THE NAME OF THE ASSESSEE AND HENCE THE AO WAS RIGHT IN LAW IN FRAMING ASSESSMENTS U/S 153C OF THE ACT. THE LD. DR FURNISHED A COPY OF WA RRANT OF AUTHORISATION DATED 16-11- 2005 ISSUED IN FORM NO. 45 BEFORE US AND SUBMITTED THAT THE SEARCH WARRANT WAS ISSUED TO M/S. B. LAKSHMI KANTHAN, SUDHA KANTHAN AN D M/S. BHIMA & BROTHERS AND SINCE IT WAS SUSPECTED THAT THE BOOKS OF ACCOUNT, O THER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE KE PT IN THE RESIDENTIAL PREMISES OF THE ASSESSEE, THE RESIDENCE OF THE ASSESSEE WAS SUBJECT ED TO SEARCH. THE LD D.R INVITED OUR ATTENTION TO THE SEARCH WARRANT TO SUBSTANTIATE HER CONTENTIONS. ACCORDINGLY, THE LD. DR SUBMITTED THAT THE ASSESSEE WAS NOT SUBJECTE D TO SEARCH, BUT ONLY HIS RESIDENTIAL PREMISES WAS SEARCHED IN CONNECTION WITH THE SEARCH WARRANT ISSUED IN THE NAME OF THE ABOVE SAID PERSONS. ACCORDINGLY, THE LD. DR SUBMIT TED THAT THE ASSESSING OFFICER WAS RIGHT IN LAW IN INITIATING PROCEEDINGS U/S. 153C OF THE ACT. ON THE OTHER HAND, THE LD. I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 4 AR CONTENDED THAT THE ASSESSEE SHOULD BE CONSIDERED AS SUBJECTED TO SEARCH, SINCE HIS RESIDENTIAL PREMISES WAS SEARCHED BY THE DEPARTMENT . 8. HOWEVER, WE FIND FORCE IN THE SUBMISSIONS MA DE BY THE LD. D.R. AS STATED EARLIER, THE WARRANT OF AUTHORISATION U/S. 132 OF THE ACT WA S NOT ISSUED IN THE NAME OF THE ASSESSEE, BUT IT WAS ISSUED IN THE NAME OF THE THRE E PERSONS STATED ABOVE. IN CONNECTION WITH THE SAID WARRANT, THE RESIDENTIAL P REMISE OF THE ASSESSEE WAS SUBJECTED TO SEARCH. IN THE ABSENCE OF A SEARCH WARRANT IN T HE NAME OF THE ASSESSEE, IN OUR VIEW, IT CANNOT BE SAID THAT THE ASSESSEE WAS SUBJECTED T O SEARCH. ACCORDINGLY, IN OUR VIEW, THE ASSESSING OFFICER WAS CORRECT IN LAW IN INITIAT ING PROCEEDINGS U/S. 153C OF THE ACT. ACCORDINGLY, WE REJECT THE CROSS OBJECTIONS FILED B Y THE ASSESSEE IN BOTH THE YEARS. 9. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REV ENUE FOR THE ASSESSMENT YEAR 2005-06, WHERE IN THE ONLY ISSUE URGED RELATES TO T HE DELETION OF CASH CREDIT ADDITION OF RS.10.00 LAKHS RELATING TO THE LOAN OBTAINED FROM S HRI RAJESH OF KERA CREATIONS. BEFORE THE AO, THE ASSESSEE FILED A CONFIRMATION LETTER OB TAINED FROM SHRI RAJESH, REFERRED ABOVE, CONFIRMING THE PAYMENT OF LOAN OF RS.10.00 L AKHS TO THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE SAME ON THE GROUND T HAT THE SOURCE OF THE CREDITOR WAS NOT CLEAR FROM THE SAID CONFIRMATION LETTER. IN TH E APPELLATE PROCEEDINGS, THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE AO, SINCE IT WA S CONTENDED BEFORE HIM BY THE ASSESSEE THAT THE ASSESSING OFFICER DID NOT GIVE SU FFICIENT OPPORTUNITY. IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER APPEARS TO HAVE ISSUED SUMMONS TO SHRI RAJESH BUT HE DID NOT RESPOND TO THE SAME. ON CONDUCTING FURT HER ENQUIRY, IT WAS UNDERSTOOD THAT HE HAS LEFT THE PLACE AND HIS WHEREABOUTS ARE NOT K NOWN. ACCORDINGLY, THE AO GAVE A REPORT EXPLAINING THE RESULT OF REMAND PROCEEDINGS, AS DISCUSSED ABOVE AND SUPPORTING THE ADDITION MADE. THE LD. CIT(A) CONFRONTED THE REMAND REPORT TO THE ASSESSEE. AFTER CONSIDERING THE REMAND REPORT AND REPLY GIVEN BY THE ASSESSEE, THE LD CIT(A) DELETED THE ADDITION OF RS.10.00 LAKHS. THE REPLY GIVEN BY THE ASSESSEE AND THE DECISION TAKEN BY THE LD. CIT(A) ARE EXTRACTED BELO W FOR THE SAKE OF CONVENIENCE: I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 5 7.3 THIS REPORT WAS CHALLENGED BY THE AUTHORISED R EPRESENTATIVE OF THE APPELLANT CONTENDING THAT THE DCIT, VIDE REMAND REP ORT DATED 8.6.2009 HAS STATED THAT AS PER THE DIRECTIONS OF THE CIT(A)-III , KOCHI, SUMMONS WAS ISSUED TO SHRI RAJESH, KERA CREATIONS, TO EXAMINE THE GENUINE NESS OF THE CLAIM OF THE APPELLANT WITH REGARD TO BORROWAL OF RS. 10 LAKHS F ROM HIM. IT IS ALSO STATED THAT THE WHEREABOUTS OF SHRI RAJESH IS NOT KNOWN AND HIS FIRM M/S. KERA CREATIONS IS KEPT CLOSED. THEREFORE, IT IS HER CASE THAT CREDIT WORTHINESS, SOURCE OF FUNDS, ETC. COULD NOT BE PROVED. 7.4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SHRI RAJESH HAD CONFIRMED THE CREDIT, WHICH WAS DISALLOWED BY THE ASSESSING O FFICER ON THE GROUND THAT IT IS NOT CLEAR FROM THE CONFIRMATION AS TO THE SOURCE FO R THE CREDIT. DURING REMAND PROCEEDINGS, IT WAS MENTIONED TO THE ASSESSING OFFI CER THAT THE CREDITOR IS NOW IN DUBAI ON EMPLOYMENT, HAVING WOUND UP HIS BUSINESS I N INDIA. IN FACT, HIS CONTACT DETAILS WERE ALSO GIVEN TO THE ASSESSING OF FICER AND IT IS ALSO UNDERSTOOD THAT SHRI RAJESH THAT A CONFIRMATION WAS SENT ONCE AGAIN FROM DUBAI, BY FAX, WHICH SHOULD BE ON RECORD. 7.5 IT MUST BE APPRECIATED THAT THE APPELLANT CAN NOT STOP SOMEBODY FROM LEAVING THE COUNTRY IN SEARCH OF BETTER PROSPECTS. THE ASSESSING OFFICER ON ENQUIRY HAS ALSO SEEN THAT SHRI RAJESH WAS RUNNING A SHOP HERE AND AT PRESENT IT IS CLOSED. IN THE CONFIRMATION ALSO, IT IS STATED THAT THE SOURCE IS FROM HIS BUSINESS. THEREAFTER, TO DISALLOW THE SUM FOR THE REASON THAT THE CREDITOR HAS NOT MENTIONED THE SOURCE IN THE CONFIRMATION AND TO MAKE AN ENQUIRY AFTER 5 YEARS WITH A FINDING THAT WHEREABOUTS ARE NOT KNOWN IS BASELESS AND FUTILE. AS FAR AS THE APPELLANT IS CONCERNED, HE HAS DISCHARGE D THE ONUS OF PROOF BY PROVIDING THE CONFIRMATION INDICATING SOURCE AND AL SO PROVIDING THE IDENTITY OF THE PARTY. 8. I HAVE CONSIDERED THE ISSUE IN DETAIL AND THE FACTS OF THE CASE AND THE ARGUMENTS OF THE ASSESSING OFFICER AND THE AUTHORIS ED REPRESENTATIVE OF THE APPELLANT. THE ISSUE IS THAT THE ASSESSING OFFICER HAS DISALLOWED THE CREDIT ON THE GROUND THAT IT IS NOT CLEAR FROM THE CONFIRMATI ON AS TO THE SOURCE FOR THE CREDIT. FROM THE FACTS NARRATED BY THE AUTHORISED REPRESENTATIVE AND ALSO FROM THE REPORT OF THE INSPECTOR OF THE ASSESSING OFFICE R IT IS EVIDENT THAT SHRI RAJESH WAS RUNNING A SHOP WHICH WAS CLOSED SUBSEQUENTLY AN D IN THE CONFIRMATION ALSO IT IS MENTIONED THAT THE SOURCE IS FROM HIS BUSINES S. THEREFORE THE DISALLOWANCE OF THE CREDITS ON THE GROUND THAT THE SOURCE IS NOT KNOWN AND THAT THE WHEREABOUTS ARE NOT KNOWN WILL NOT BE CORRECT. IN FACT THE APPELLANT HAS PROVED THE SOURCE AND IDENTITY OF THE CREDITOR. HERE I AM IN AGREEMENT WITH THE ARGUMENT OF THE AUTHORISED REPRESENTATIVE THAT AS F AR AS THE APPELLANT IS CONCERNED HE HAS DISCHARGED ONUS OF THE PROOF BY PR OVIDING THE CONFIRMATION INDICATING THE SOURCE AND ALSO PROVIDING IDENTITY O F THE PARTY. IN THE CIRCUMSTANCES, THERE IS NO JURISDICTION IN DISALLOW ING THE CREDIT BY THE ASSESSING OFFICER. ACCORDINGLY, I DELETE THE ADDITION ON THI S ACCOUNT. I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 6 10. WE HAVE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE H AS FILED CONFIRMATION LETTER OBTAINED FROM SHRI RAJESH DURING THE COURSE OF ASSESSMENT PR OCEEDINGS. IN THE CONFIRMATION LETTER, HE HAS STATED THAT HE HAS GIVEN THE LOAN OF RS.10.00 LAKHS OUT OF HIS BUSINESS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO DID NOT MAKE ANY FURTHER ENQUIRY. HOWEVER, IN THE REMAND PROCEEDINGS, THE ASSESSING O FFICER ISSUED SUMMONS TO SHRI RAJESH, WHICH WAS NOT RESPONDED TO. HENCE, THE AO CONDUCTED FURTHER ENQUIRY AND FOUND THAT SHRI RAJESH HAS LEFT THE STATION AND HIS WHEREABOUTS ARE NOT KNOWN. BEFORE LD CIT(A), THE ASSESSEE HAS SUBMITTED THAT HE GAVE THE DETAILS OF SHRI RAJESH TO THE AO DURING REMAND PROCEEDINGS, I.E., SHRI RAJESH IS NOW EMPLOYED IN DUBAI AND HIS BUSINESS WAS CLOSED. ACCORDING TO THE ASSESSEE, HIS CONTACT DETAILS WERE ALSO GIVEN TO THE AO. IT IS FURTHER STATED THAT AS PER THE INFORMATION AV AILABLE WITH THE ASSESSEE, SHRI RAJESH HAS SENT ANOTHER CONFIRMATION LETTER BY FAX FROM DU BAI. HOWEVER, WE NOTICE THAT THE AO HAS FAILED TO MENTION THESE DETAILS IN HIS REMAN D REPORT. 11. BUT, AS SUBMITTED BY THE ASSESSEE, THE ASSES SING OFFICER HAS FOUND DURING THE COURSE OF REMAND PROCEEDING THAT SHRI RAJESH WAS CA RRYING ON BUSINESS AT THE RELEVANT POINT OF TIME. THE AO HAS ALSO TRIED TO FIND OUT T HE WHEREABOUTS OF SHRI RAJESH AND FOUND THAT HE HAS LEFT THE STATION. HOWEVER, ACCOR DING TO THE ASSESSEE, HE HAS GIVEN THE ADDRESS OF SHRI RAJESH, WHO HAD TAKEN UP EMPLOY MENT AT THAT POINT OF TIME. HOWEVER, THE AO DID NOT PREFER TO CONDUCT ANY FURTH ER ENQUIRY. THUS, IT IS SEEN THAT THE ASSESSEE HAS GIVEN ALL THE DETAILS THAT WERE AV AILABLE WITH HIM WITH REGARD TO THE LOAN OBTAINED FROM SHRI RAJESH. UPON CONDUCTING EX AMINATION, THE AO HAS, IN FACT, FOUND THAT THE DETAILS WERE CORRECT. BUT THE AO HA S SUPPORTED THE VIEW TAKEN BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDING ONLY FOR THE REASON THAT HE COULD NOT LOCATE SHRI RAJESH. IN OUR VIEW, THE AO WAS NOT JUSTIFIED IN TAKING SUCH A VIEW, SINCE HE DID NOT CONDUCT FURTHER ENQUIRIES. ACCORDINGLY, UNDER THE FACTS AND CIRCUMSTANCES PREVAILING IN THIS CASE, IN OUR VIEW, THE ASSESSEE CAN BE CONSIDERED TO HAVE DISCHARGED THE INITIAL BURDEN OF PROOF PLACED UPON HIM U/S 68 OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD CIT(A) IN DELETING THIS ADDITION OF RS.10.00 LAKHS IN ASSESSMENT YEAR 2005-06. I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 7 12. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE RE VENUE FOR THE ASSESSMENT YEAR 2006-07, WHEREIN THE REVENUE IS CONTENDING THE DECI SION OF LD CIT(A) IN DELETING THE FOLLOWING ADDITIONS MADE U/S 68 OF THE ACT. GOPALAGIRI - RS.5,00,000/- H. NADIRA - RS.2,50,000/- T.A.SHAJAHAN - RS.2,50,000/- IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FIL ED CONFIRMATION LETTERS OBTAINED FROM THE ABOVE SAID THREE PERSONS. THE AO FELT THA T THE ABOVE SAID THREE PERSONS WERE MEN OF NO MEANS AND THE CONFIRMATION LETTERS WERE A LSO INCOMPLETE, I.E., IT DID NOT CONTAIN THE PAN AND ALSO WITHOUT SUBSTANCE. ACCORDI NGLY, HE ADDED THE ABOVE SAID CASH CREDITS TO THE TOTAL INCOME OF THE ASSESSEE. 13. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) D IRECTED THE AO TO EXAMINE THESE THREE CREDITORS AND SUBMIT A REMAND REPORT. ACCORD INGLY, THE ASSESSING OFFICER EXAMINED THEM AND SUBMITTED THE REPORT. THE LD CIT (A), AFTER DULY CONSIDERING THE REMAND REPORT DELETED ALL THE THREE CASH CREDIT ADD ITIONS 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, THE AO HAS ADDED THE CASH CREDITS, REFERRED ABOVE, WITHOUT MAKING MUCH DISCUSSION IN THE ASSESSMENT ORDER. ONLY IN THE REMAND PROCEEDINGS, THE AO HAS EXAMINED THE THREE CREDITORS AND SUBMITTED HIS REPORT. WE NOTICE FROM THE REMAND REPORT, A COPY OF WHICH WAS FILED BY THE LD A.R BEFORE US, THAT ALL THE THR EE CREDITORS HAVE APPEARED BEFORE THE AO AND HAVE CONFIRMED THE LOAN TRANSACTIONS. FURTH ER THEY HAVE ALSO EXPLAINED THE SOURCES THAT WERE AVAILABLE WITH THEM FOR GIVING LO AN TO THE ASSESSEE. AFTER DISCUSSING THESE POINTS, THE AO HAS, HOWEVER, STATED THAT THEY COULD NOT FURNISH ANY EVIDENCE TO SUBSTANTIATE THE LOAN TRANSACTION. 15. IT IS A SETTLED PROPOSITION OF LAW THAT THE INI TIAL RESPONSIBILITY TO PROVE THE CASH CREDITS LIES UPON THE ASSESSEE U/S 68 OF THE ACT. THE ASSESSEE IS REQUIRED TO PROVE THE THREE MAIN INGREDIENTS, VIZ., THE IDENTITY OF THE C REDITOR, THE CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTIONS. A P ERUSAL OF THE REMAND REPORT SHOWS I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 8 THAT ALL THE THREE CREDITORS HAVE APPEARED BEFORE T HE ASSESSING OFFICER. THUS, THE IDENTITY OF THE CREDITORS STANDS PROVED. IN THE E XAMINATION, ALL THE THREE PERSONS HAVE CONFIRMED THE LOAN TRANSACTIONS. THUS, BOTH THE AS SESSEE, BEING THE RECEIVER OF THE LOAN AND THE THREE PERSONS, REFERRED ABOVE, BEING T HE LENDERS HAVE CONFIRMED THE TRANSACTION. THUS, THE GENUINENESS OF THE TRANSACT ION ALSO STANDS PROVED. WITH REGARD TO THE SOURCES, SHRI GOPALAGIRI HAS STATED THAT THE LOAN OF RS.5.00 LAKHS WAS PAID OUT OF SALE PROCEEDS RECEIVED ON SALE OF 15 CENTS OF LAND AND BUILDING. THE OTHER TWO PERSONS HAVE STATED THAT THE LOANS WERE GIVEN BY THEM OUT O F CHITTY BID AMOUNT RECEIVED FROM SREE GOKULAM CHIT & FINANCE CO. (P) LTD. ALL THE T HREE PERSONS HAVE PRODUCED THE DOCUMENTS IN SUPPORT OF THE SAID CLAIMS. HOWEVER, THE ONLY DOUBT EXPRESSED BY THE ASSESSING OFFICER IS THAT ALL THE THREE PERSONS COU LD NOT FURNISH EVIDENCE TO SHOW THAT THEY HAVE ACTUALLY LENT THE MONEY TO THE ASSESSEE. 16. DURING THE COURSE OF HEARING, THE LD A.R PO INTED OUT THAT THE AO HAS ADDED THE CASH CREDITS MAINLY ON THE GROUND THAT THE CREDITOR S ARE MEN OF NO MEANS. HE FURTHER SUBMITTED THAT THE AO HAS CHANGED HIS STAND IN THE REMAND PROCEEDINGS, WHEN THESE CREDITORS HAVE EXPLAINED THE SOURCES AND HAS STATED THAT THERE IS NO EVIDENCE TO SHOW THAT THE LOAN TRANSACTION HAS ACTUALLY TAKEN PLACE. ACCORDINGLY, THE LD A.R CONTENDED THAT THE AO WAS NOT JUSTIFIED IN CHANGING HIS STAND DURING REMAND PROCEEDINGS. HE FURTHER SUBMITTED THAT THE ASSESSEE AND THE LENDERS HAVE CONFIRMED THE LOAN TRANSACTIONS AND HENCE THERE IS NO REQUIREMENT OF A NY OTHER EVIDENCE TO SUPPORT THEIR CLAIM. 17. WE FIND FORCE IN THE CONTENTIONS OF LD A.R. IN THE PRECEDING PARAGRAPHS, WE HAVE NOTICED THAT THE ASSESSEE HAS DISCHARGED THE PRIMAR Y RESPONSIBILITY PLACED UPON HIM U/S 68 OF THE ACT, I.E., THE IDENTITY OF THE CREDITOR, GENUINENESS OF TRANSACTION AND THE CREDIT WORTHINESS OF THE CREDITOR HAS BEEN PROVED BY THE A SSESSEE. HOWEVER, NO OTHER MATERIAL WAS BROUGHT ON RECORD BY THE AO TO DISPROV E THE CONTENTIONS OF THE CREDITORS/ASSESSEE. HENCE, IN OUR VIEW, THE LD CIT (A) WAS JUSTIFIED IN DELETING THE CASH CREDIT ADDITIONS MADE DURING THIS YEAR. ACCORDINGL Y, WE CONFIRM HIS ORDER. I.T.A. NOS. 357& 358/COCH/2011 & C.O. NOS. 15&16/COCH.2011 9 18. IN THE RESULT, THE APPEALS OF THE REVENUE A ND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 23 -08-2013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 23 RD AUGUST, 2013 GJ COPY TO: 1. SHRI D. KABEERDAS, DHANYA, M.O. WARD, ALLEPPEY. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, KOTTAYAM 3 THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, TRIVA NDRUM. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN