M/s. Jai Sai Udyog, SILVASSA V. The Income tax Officer,Vapi Ward-2, Vapi

CO 260/AHD/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8619 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-04-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 16-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH AGARWAL
• Assessee Lawyers: SHELLY JINDAL
• Keywords: Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD ( BEFORE SHRI D. K. TYAGI, JM AND SHRI A. MOHAN ALANK AMONY, AM) IT A NO. 2246/AHD/2010 A. Y.: 2005-06 THE INCOME TAX OFFICER, VAPI WARD-2, VAPI , SHIVAM COMPLEX, N. H. NO.8, VAPI VS M/S. JAI SAI UDYOG, PLOT NO.66, KHADOLI INDUSTRIAL ESTATE, SILVASA P. A. NO. AACFJ 0352 L (APPELLANT) (RESPONDENT) C. O. NO.260/AHD/2010 (IN IT A NO. 2246/AHD/2010: 2005-06) M/S. JAI SAI UDYOG, PLOT NO.66, KHADOLI INDUSTRIAL ESTATE, SILVASA P. A. NO. AACFJ 0352 L VS THE INCOME TAX OFFICER, VAPI WARD-2, VAPI , SHIVAM COMPLEX, N. H. NO.8, VAPI (CROSS OBJECTION) (RESPONDENT) DEPARTMENT BY SHRI SHELLY JINDAL, CIT DR RESPONDENT BY SHRI PRAKASH AGARWAL, AR DATE OF HEARING: 12-04-2013 DATE OF PRONOUNCEMENT: 10-07-2013 O R D E R PER A. MOHAN ALANKAMONY: THE APPEAL IN ITA NO. 2246/AHD/2010 IS PREFERRED BY THE REVENUE AND THE C ROSS OBJECTION NO.260/AHD/2010 BY THE ASSESSEE ARE FILED AGAINST T HE ORDER OF THE CIT(A), VALSAD DATED 26-03-2010 IN APPEAL NO. CIT(A )/VLS/107/09- 10, FOR THE ASSESSMENT YEAR 2005-06 PASSED U/S 250 READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. THE REVENUE IN ITS APPEAL HAS RAISED FOUR GROUND S WHEREIN GROUND NO.4 IS GENERAL IN NATURE AND DOES NOT SURVI VE FOR ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 2 ADJUDICATION. SURVIVING GROUNDS NO.1, 2 AND 3 ARE R EPRODUCED HEREIN UNDER FOR REFERENCE:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F PAYMENT TO SUNDRY CREDITORS OUT OF UNEXPLAINED SOURCES RS.1,76 ,08,739/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F UNEXPLAINED SUNDRY CREDITORS RS.25,97,993/- 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.14,24,520/- MADE OUT OF INTEREST EXPENSES. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN MANUFACTURE OF MS INGOTS AND TRADING IN FERROUS AND NON-FERROUS METALS FILED ITS RETURN FOR THE ASSESSMENT YEAR 2 005-06 ON 31 ST OCTOBER, 2005 DECLARING TOTAL INCOME OF RS.11,10,49 7/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. D URING THE SCRUTINY PROCEEDINGS THE LEARNED AO CARRIED OUT CROSS VERIFI CATION IN RESPECT OF THE CREDITORS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. FROM THE CONFIRMATIONS FURNISHED BY THE SUNDRY CREDITOR S, THE LEARNED AO NOTICED THAT IN MOST CASES, THE PURCHASES SHOWN BY THE ASSESSEE TALLIED WITH SALES MADE BY THE SUNDRY CREDITORS BUT IN THE SAID CONFIRMATIONS THE PAYMENT RECEIVED BY THESE PARTIES WERE NOT REFLECTING IN THEIR LEDGER ACCOUNT MAINTAINED BY TH E ASSESSEE FIRM. WHEN THE ASSESSEE WAS ASKED FOR RECONCILIATION STAT EMENT IN THIS RESPECT, THE ASSESSEE FURNISHED THE SAME FOR ONLY F OUR PARTIES AS AGAINST TEN PARTIES. DUE TO THE ABOVE SAID REASON, THE LEARNED AO MADE ADDITION OF RS.1,76,08,739/- ON ACCOUNT OF PAY MENTS MADE TO SUNDRY CREDITORS FROM UNEXPLAINED SOURCES. THE LEAR NED AO HAD ALSO ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 3 MADE FURTHER ADDITION OF RS.25,97,993/- ON ACCOUNT OF SUNDRY CREDITORS SINCE, THE ASSESSEE COULD NOT EXPLAIN THE REASON FOR REMAINING THE SAME OUTSTANDING FOR LONG PERIOD. THE LEARNED AO HAD ALSO MADE AN ADDITION OF RS.14,24,520/- ON ACCOUNT OF INTEREST FREE ADVANCE MADE BY THE ASSESSEE TO ITS SISTER CONCERN RELYING ON THE DECISION OF THE HONBLE ORISSA HIGH COURT IN THE CA SE OF M/S. INDIAN METALS AND FERRO ALLOY LTD. VS CIT (1992) 193 ITR 3 44 AND THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF TRIVEDI ENGINEERING WORKS LTD. VS CIT REPORTED IN 167 ITR 7 42 AND OTHER VARIOUS JUDGMENTS. THUS, THE LEARNED AO PASSED THE ASSESSMENT ORDER ON 28-12-2007 U/S 143(3) OF THE ACT DETERMINI NG THE TOTAL INCOME OF THE ASSESSEE AT RS.2,27,41,750/-. 4. WHEN THE MATTER WAS CARRIED BEFORE THE LEARNED C IT(A), THE LEARNED CIT(A) WITH RESPECT TO GROUND NO.1 DELETED THE ADDITION OF RS.176,08,739/- MADE BY THE LEARNED AO BY OBSERVIN G IN PARA 8 (E) ON PAGE 20 TO 23 OF HIS ORDER AS UNDER: FINDING: I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A. O. AND THE SUBMISSIONS MADE BY THE APPELLANT. I HAVE ALSO PERUSED THE REMAND REPORT SUBMITTED BY THE AO. THE MATTER IN DI SPUTE WAS THAT THE AO FOUND THAT THE APPELLANT HAD PAID CERTAIN SU M TO THE CREDITORS BUT NOT REFLECTED IN THE APPELLANTS A/C. THE MAIN ALLEGATION WAS THAT THE APPELLANT HAD MADE THE PAYMENTS TO THE CREDITORS FROM UNDISCLOSED SOURCE SINCE THE CREDITORS CONFIRMED HA T NO AMOUNTS ARE RECEIVABLE FROM THE APPELLANT. IN THE SUBMISSIONS T HE LD. AR WANTED TO JUSTIFY THAT ITS BOOKS OF ACCOUNTS ARE IN ORDER AND THE CREDITORS CONFIRMATIONS CAN NOT BE HELD AGAINST THE APPELLANT WITHOUT THE INDEPENDENT EVIDENCES BROUGHT BY THE AO ON RECORD. HE ALSO HARPED ON NOT PROVIDING CROSS-EXAMINATION BY THE AO OF THO SE CREDITORS. FURTHER THE LD. AR CONTENDED THAT THE ACCOUNTS OF T HOSE CREDITORS CANNOT BE RELIED UPON AS GOSPEL TRUTH BECAUSE THE A PPELLANT PAID TO M/S. PRIYA BLUE INDUSTRIES PVT. LTD. AN AMOUNT OF RS.1,50,000/- BY CHEQUES, HAS NOT BEEN ACCOUNTED IN THE BOOKS OF THE SAID PARTY. THIS ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 4 SHOWS THAT THERE ARE DISCREPANCIES IN THE ACCOUNTS OF THESE PARTIES. IN MY OPINION BOTH THE APPELLANT AND THESE PARTIES ARE SUSPECTS. THE AO WAS ASKED FOR REMAND REPORT TWICE. THE CONTE NT AND THE SUBSTANCES ARE BY AND LARGE SAME IN BOTH THE REMAND REPORTS. THE MAIN ISSUE OF PAYMENTS MADE BY THE APPELLANT FROM U NDISCLOSED SOURCE HAS BEEN INADEQUATELY DEALT BY THE AO IN THE REMAND REPORT. ALTHOUGH HE HAD THE BENEFIT OF THE NAME OF BANK, CH EQUES DETAILS, HE FAILED TO CARRY OUT THE INVESTIGATION TO THE LOGICA L END. THE APPELLANT HAD TAKEN STAND ALL THROUGH THE ASSESSMENT PROCEEDI NG THAT IT HAD NOT PAID THE AMOUNTS TO THOSE CREDITORS. NOW THE ON US IS ON THE DEPARTMENT TO PROVE THAT THE PAYMENTS MADE BY OR ON BEHALF OF THE APPELLANT ARE FROM UNDISCLOSED INCOME. CROSS-EXAMIN ATION OF THOSE PARTIES ARE SOUGHT BY THE APPELLANT WHICH COULD NOT BE GIVEN, MAYBE DUE TO VALID REASON, BY THE AO. HE COULD HAVE COMPL ETED THE INVESTIGATION CONNECTED WITH THE BANKS THROUGH WHIC H THE FUNDS ARE ROUTED FOR MAKING PAYMENTS TO THE CREDITORS. THE AP PELLANT HAS SUBMITTED THAT SCRAP MARKET IS AN UNORGANIZED SECTO R WHERE THE CASH DEALING AND PAYMENT THROUGH THE BENAMI TRANSACTIONS/ACCOUNTS ARE RAMPANT. AT THE SAME TIME THE STAND TAKEN BY THE APPELLANT IS ALSO NOT TOTALLY CONVINCI NG. THERE IS NO DOUBT ABOUT THE EXISTENCE OF THE CREDITORS. THE TRA NSACTIONS EFFECTED BY THE APPELLANT WERE NOT ONE TIME TRANSACTION. THE TRANSACTIONS ARE EFFECTED SOMETIMES THROUGH AGENTS/BROKERS. THE AMOU NT INVOLVED IN THE PROCESS IS HUGE. HOW CAN THOSE PARTIES SIMPLY W RITE OFF WITHOUT CONTEST EVEN IF THE QUALITY OF MATERIAL SUPPLIED AR E DISPUTED BY THE APPELLANT. IN THE SCRAP MARKET 100% QUALITY CANNOT BE ENSURED. IN THE SCRAP MARKETS GOODS ARE EXCHANGED WITH PROMPT P AYMENTS IF THE PARTIES ARE NEW/UNRELATED. AT THE SAME TIME THE SAL ES ARE MADE ON SHORT TERM CREDIT BASIS IF THE PARTIES ARE KNOWN TO EACH OTHER. THE SELLER ALSO NEEDS MONEY TO LIFT THE GOODS FROM HIS SELLERS. IT IS IMPORTANT TO NOTE THAT THESE SCRAPS ARE FROM THE SH IP-BREAKING SCRAPS AND IMMEDIATE CASH IS NECESSARY INGREDIENTS FOR BETTER BARGAIN OF RATE AND QUALITY OF THE SCRAPS. TWO OCCA SIONS THE REMAND REPORTS WERE CALLED BUT THE ISSUES ARE NOT TAKEN TO LOGICAL END. FURTHER REMANDING BACK TO THE AO WOULD BE SEEN BY T HE APPELLANT AS HARASSMENT. IN THIS BACK GROUND AND THIS BEING A HIGH DEMAND CASE I AM CONSTRAINED TO DECIDE THE MATTER ON THE B ASIS OF THE FACTS AND MATERIALS ON RECORDS. ALTHOUGH THE REASONS GIVEN BY THE APPELLANT WITH RE GARD TO THE WRITE BACK OF THE AMOUNT IN THE F. Y. 2007-08 (A. Y. 2008 -09) WAS NOT COMPLETELY CONVINCING BUT THE WRITTEN BACK AMOUNTS ENHANCES THE INCOME OF THAT YEAR. I AM NOT GOING TO SEEK MERITS OF SUCH WRITE BACK. THE LD. AR ALSO SUBMITTED THAT SCRUTINY ASSESSMENTS WERE ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 5 COMPLETED FOR THE A. Y.S 2006-07 AND 2007-08 WHERE NO SUCH ISSUES WERE DISCUSSED BY THE AO. THE ADDITIONS MADE IN THO SE ASSESSMENTS WERE NOMINAL. THE APPELLANT ALSO HEAVIL Y RELIED UPON THE DECISION OF THE FOLLOWING CASES:- A. DECISION OF SUPREME COURT IN THE CASE OF CENTRAL BUREAU OF INVESTIGATION V. V. C. SHUKLA (1998) 3 SSC 410 W HEREIN IT IS HELD THAT ENTRIES IN BOOKS OF ACCOUNT SHALL NOT AL ONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABI LITY. ENTRIES EVEN IF RELEVANT ARE ONLY CORROBORATIVE EVIDENCE. I NDEPENDENT EVIDENCE AS TO TRUSTWORTHINESS OF THOSE ENTRIES ARE NECESSARY TO FASTEN LIABILITY. IT HAS FURTHER SUBMITTED THAT BURDEN IS ON THE REVENUE TO PROVE THAT THE APPELLANT HAS MADE UN EXPLAINED EXPENDITURE RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF KISHINCHAND CH ELLARAM V. CIT [1980] 125 ITR 713 AND THE DECISION OF THE C ALCUTTA HIGH COURT IN THE CASE OF BIMAL KUMAR DAMANI V. CIT [2003] 261 ITR 635. B. DECISION OF HIGH COURT OF GUJARAT IN THE CASE OF KRISHNA TEXTILES V. COMMISSIONER OF INCOME TAX (2008) TAXMA N 372 (GUJ). IT WAS OBSERVED BY THE HONOURABLE COURT THAT THE BURDEN IS ON THE DEPARTMENT TO SHOW THAT THE AMOUNT OF DEMAND DRAFTS FOUND TO BE CREDITED IN THE APPELLANT S ACCOUNT FROM THE BOOKS OF ACCOUNT OF GMDC, BELONGED TO THE APPELLANT, BY BRINGING PROPER EVIDENCE ON RECORD AND THE APPEL LANT COULD NOT BE EXPECTED TO EXPLAIN THE SOURCE OF INCOME OR TO CALL RESPONSIBLE OFFICERS OF GMDC OR BANK TO DISCHARGE THE BURDEN THAT LAY UPON THE DEPARTMENT. IT WAS HELD THAT ASSE SSING OFFICER HAS FAILED TO DISCHARGE HIS BURDEN TO PROVE THAT THE AMOUNT IN QUESTION IS THE INCOME OF THE APPELLANT A ND THE CASE WAS DECIDED IN FAVOUR OF THE APPELLANT. THUS IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE I AM CONSTRAINED TO FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL H C WHICH IS SQUARL8Y APPLICABLE ION THIS CASE. IN THAT CASE ALTHOUGH ONE OF THE PARTIES INVOLVED WAS A GOVT. UNDERTAKING, THE HONBLE COURT HELD THAT IT IS THE REVENUE TO DISCHARGE THE ONUS NOT THE APPELLANT . FURTHER IT WAS HELD THAT ASSESSING OFFICER HAS FAILED TO DISCHARGE HIS BURDEN TO PROVE THAT THE AMOUNT IN QUESTION WAS THE INCOME OF THE APPELLANT AND THE CASE WAS DECIDED IN FAVOUR OF THE APPELLANT . IN THE INSTANT CASE SIMILAR SITUATION EXIST THAT THE AO FAILED TO DISCHARGE HIS BURDEN TO PROVE THAT THE AMOUNT IN QUESTION WAS INC OME OF THE APPELLANT GENERATED OUTSIDE THE BOOKS OF A/C. THERE FORE, THE APPELLANT GETS RELIEF IN THIS GROUND OF APPEAL. ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 6 5. WITH REGARD TO GROUND NO.2 FOR DELETING THE ADDI TION MADE BY THE LEARNED AO ON ACCOUNT OF UNEXPLAINED SUNDRY CRE DITORS FOR RS.25,97,993/-, THE LEARNED CIT(A) HELD AS UNDER IN PARA 9 (C) OF HIS ORDER WHICH IS REPRODUCED HEREIN UNDER FOR REFERENC E:- 9 I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A . O. AND THE SUBMISSION MADE BY THE APPELLANT. I FIND THAT T HE EXPLANATION OFFERED BY THE APPELLANT CAN BE ACCEPTED. IT IS SEE N THAT THE A. O. HAS MADE THE DISALLOWANCE OF SUNDRY CREDITORS STATI NG THAT BALANCES OUTSTANDING AS ON 1.04.2004 IN THE ACCOUNT OF M/S. TRUE VALUE ENGG. LTD. AND M/S. VINAYAK METALS. THE A. O. HAS F URTHER STATED THAT THE APPELLANT HAS FAILED TO PROVE THAT HT SUND RY CREDITORS WERE IN EXISTENCE. ON THE OTHER HAND THE APPELLANT HAS V EHEMENTLY ARGUED THAT THE SAID CREDITORS HAVE ARISEN ON ACCOU NT OF PURCHASES MADE IN EARLIER YEARS AND THE SAME WERE ACCEPTED TO BE GENUINE BY THE DEPARTMENT. THE APPELLANT DEMONSTRATED THAT THE CREDITORS ARE GENUINE. THE APPELLANT HAS ALSO STATED THAT THE SAI D AMOUNT WAS WRITTEN BACK DURING THE F. Y. 2007-08. IN THIS CIRC UMSTANCES, I AM CONVINCED THAT THE DISALLOWANCE MADE BY THE AO IS N OT SUSTAINABLE BEFORE THE LAW. THEREFORE, AO IS DIRECTED TO DELETE THE ADDITION AND THIS GROUND OF APPEAL IS ALLOWED. 6 FURTHER, WITH REGARD TO GROUND NO.3 FOR DELETING THE ADDITIO N MADE BY THE LEARNED AO ON ACCOUNT OF INTEREST EXPEN SES FOR RS.14,24,520/-, THE LEARNED CIT(A) OBSERVED IN PARA 7 (C) OF HIS ORDER WHICH IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 7. DECISION: - I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A O AN D THE SUBMISSION MADE BY THE APPELLANT. I FIND THAT THE CONTENTION O F THE APPELLANT CAN BE ACCEPTED. IT IS SEEN THAT THE APPELLANT HAS BEEN ABLE TO ESTABLISH THAT THE INTEREST BEARING LOANS WERE NOT USED FOR G IVING INTEREST FREE LOANS. THE APPELLANT HAS FURTHER EXPLAINED THAT THE INTEREST WAS PAID TO THE BANK FOR SPECIFIC LOAN TAKEN IN THE EAR LIER YEAR FOR INVESTMENT IN STOCK IN TRADE AND TERM LOAN FOR U-GR ADATION OF PLANT WHICH IS AN ALLOWABLE DEDUCTION. IN VIEW OF THE ABO VE DISALLOWANCE MADE BY THE A. O. ON ACCOUNT OF INTEREST PAYMENT IS UNWARRANTED AND NEEDS TO BE DELETED. THIS GROUND OF APPEAL IS T HEREFORE, ALLOWED. ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 7 7. AGAINST THE ABOVE FINDINGS OF THE LEARNED CIT (A ), THE REVENUE IS IN APPEAL BEFORE US. 8. THE LEARNED DR ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED AO AND PRAYED THAT THE SAME MAY BE SUSTAINED. THE L EARNED AR REITERATED HIS SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. 9. AFTER PERUSING THE ORDERS OF THE LEARNED AO AND THE LEARNED CIT(A) AND CONSIDERING THE MATERIALS ON RECORD ALON G WITH THE PAPER BOOK FURNISHED BY THE ASSESSEE, WE FIND THAT GROUND NO.1 RELATES TO ADDITION OF RS.1,76,08,739/- WHEREIN THE ISSUE RELA TES TO THE PAYMENT MADE TO SUNDRY CREDITORS BY THE ASSESSEE WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, HOWEVER, THE SAME WAS REFLECTED IN THE BOOKS OF THE SUNDRY CREDITORS, THE REBY BEING EVIDENT THAT THE ASSESSEE HAD MADE PAYMENTS TO THE CREDITOR S FROM ITS UNDISCLOSED SOURCES. THE ASSESSEES CONSTANT CONTEN TIONS HAVE BEEN THAT BOOKS OF ACCOUNT MAINTAINED BY IT ARE IN ORDER AND THE CREDITORS CONFIRMATIONS CANNOT BE HELD AGAINST THE ASSESSEE WITHOUT INDEPENDENT EVIDENCES BEING BROUGHT ON RECORD BY TH E LEARNED AO. THE ASSESSEE ALSO WAS ALSO AGGRIEVED BY THE FACT TH AT NO OPPORTUNITY FOR CROSS-EXAMINATION OF THE CREDITORS WAS GIVEN BY THE LEARNED AO. DURING THE APPELLATE PROCEEDINGS, THE LEARNED AO WA S ASKED FOR REMAND REPORT TWICE, HOWEVER, THE LEARNED AO FAILED TO CARRY OUT THE INVESTIGATIONS TO REBUT THE CONTENTIONS OF THE ASSE SSEE THAT IT HAD PAID THE AMOUNTS TO THE CREDITORS AS ALLEGED BY THE SE CREDITORS DESPITE THE FACT THE LEARNED AO HAD THE BENEFIT OF THE NAME OF BANK AND CHEQUE DETAILS THROUGH WHICH THE PAYMENTS HAVE BEEN MADE. ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 8 THUS, THE LEARNED AO FAILED TO ESTABLISH WITH CORRO BORATIVE EVIDENCE THAT THE PAYMENTS WERE MADE BY THE ASSESSEE TO THE CREDITORS FROM ITS UNDISCLOSED INCOME. FOR THE ABOVE SAID REASONS, THE LEARNED CIT(A) WAS OF THE VIEW THAT THE LEARNED AO FAILED TO DISCHARGE HIS BURDEN TO PROVE THAT THE AMOUNTS IN QUESTION WAS TH E INCOME OF THE ASSESSEE GENERATED OUTSIDE THE BOOKS OF ACCOUNT. W HILE HOLDING SO, HE PLACED RELIANCE ON THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF CBI VS V.C. SHUKLA (1998) 3 SCC 410 AND THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF KR ISHNA TEXTILES VS CIT (2008) TAXMAN 372 (GUJ). WE, THEREFORE, ARE NOT INCLINED TO INTERFERE IN THE ORDER PASSED BY THE LEARNED CIT(A) . THIS GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 10. WITH REGARD TO GROUND NO.2 OF THE APPEAL, SINCE RELIEF HAS BEEN GIVEN BY THE LEARNED CIT(A) AS THE ASSESSEE OFFERED THIS AMOUNT DURING THE ASSESSMENT YEAR 2007-08, ADDITION MADE D URING THIS YEAR IS NOT SUSTAINABLE IN LAW, AS IT WOULD AMOUNT TO DO UBLE TAXATION. HENCE, WE ARE OF THE OPINION THAT THE LEARNED CIT(A ) HAS RIGHTLY DELETED THE ADDITION OF RS.25,97,993/- MADE BY THE LEARNED AO. WE UPHOLD HIS ORDER AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 11. WITH REGARD TO GROUND NO.3, THE LEARNED CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE SINCE THE ASSESSEE WAS ABLE TO ESTA BLISH BEFORE HIM THAT THE INTEREST BEARING LOANS WERE NOT EXTENDED F OR INTEREST-FREE ADVANCES. THIS FINDING OF THE LEARNED CIT(A) COULD NOT BE CONTROVERTED BY THE REVENUE BEFORE US. THEREFORE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) ON ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 9 THIS ISSUE ALSO. ACCORDINGLY, THIS GROUND RAISED BY THE REVENUE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 13 ON GOING THROUGH THE GROUNDS OF THE CROSS OBJECT ION FILED BY THE ASSESSEE, WE FIND THAT THE SAME IS IN SUPPORT OF TH E ORDER OF THE LEARNED CIT(A). SINCE, WE HAVE DISMISSED THE REVENU ES APPEAL, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE CROSS OB JECTION OF THE ASSESSEE AND ACCORDINGLY, IT IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E CROSS OBJECTION FILED BY THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10-07-2013 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA/ DEKA/ DEKA/ DEKA/ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO.2246/AHD/2010 (AY 2005-06) CO NO.260/AHD/2010 (AY- 2005-06) M/S. JAI SAI UDYOG 10 1. DATE OF DICTATION: 02-07-2013/08-07-2013 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 03-07-2013/08-07-2013OTHER MEMBE R: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: