Shri Manoj C. Brahmbhatt, Ahmedabad V. The ACIT., Circle-7, Ahmedabad

CO 74/AHD/2004

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7278 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 3 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 26-06-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 15-03-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Keywords: Unexplained cash credit; Depreciation; Business expenditure; Rectification of order; Source of fund; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 1565/AHD/2003 ASSESSMENT YEARS :1998-99 & C.O. NO. 74/AHD/2004 ASSESSMENT YEAR : 1998-99 ACIT, CIRCLE-7, AHMEDABAD SHRI MANOJ C. BRAHMBHATT, 17/201, AMI. APPTT., GUJARAT HOUSING BOARD. OPP: NARANPURA TELEPHONE EXCHANGE, NARANPURA, AHMEDABAD V/S . V/S . SHRI MANOJ C. BRAHMBHATT, 17/201, AMI. APPTT., GUJARAT HOUSING BOARD. OPP: NARANPURA TELEPHONE EXCHANGE, NARANPURA, AHMEDABAD ACIT, CIRCLE-7, AHMEDABAD PAN NO. NOT FOUND (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI S.K.GUPTA, CIT D.R. /BY ASSESSEE SHRI ASEEM THAKKAR, A.R. /DATE OF HEARING 26.06.2012 /DATE OF PRONOUNCEMENT 13.07.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE AND THE C.O. OF THE ASSE SSEE, EMANATED FROM THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (A PPEALS)-XIII, AHMEDABAD, ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 2 DATED 27.01.2003 FOR THE ASSESSMENT YEAR 1998-99. THE ISSUES AND ARGUMENTS IN REVENUES APPEAL AND ASSESSEES C.O. A RE SAME. THEREFORE, WE ARE DECIDING BOTH IN A CONSOLIDATE ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XII I, AHMEDABAD, ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,74,00,000/- MADE BY THE A.O. BEING UNEXPLAINED CASH DEPOSITS. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE FA CTUAL ASPECT THAT NO PROOF REGARDING CREDIT WORTHINESS OF THE CREDITOR, SHRI DILIPKUMAR ATMARAM, CONTRA ACCOUNT ETC., FURNISHED BEFORE THE A.O. SIMILARLY, SHRI HEMENDRA L. SHAH ADMITTED IN HIS STATEMENT ON 11-3- 2002 THAT HIS BOOKS OF ACCOUNTS ARE NOT COMPLETED AND RETURNS FOR THE YEAR UNDER CONSIDERATION HAD NOT BEEN FILED. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN REDUCING THE ADDITION MADE U/S. 68 OF THE I.T. ACT FROM RS. 116,28,25,838/- TO RS. 1,22,545/- . 4. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE FA CTUAL ASPECTS DISCUSSED BY THE A.O. IN THE ASSESSMENT ORDER IN PA RAS 18,19,20 AND 21 IN THIS RESPECT. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,72,17,951/- BEING ADDED AS UNPROVED BANK CHARGES AND COMMISSION . 6. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT EVEN AFTER AFFORDING NUMBER OF OPPORTUNITIES THE ASSESSEE COULD NOT PROD UCE ANY EVIDENCE BEFORE THE A.O. TO ARRIVE AT A CONCLUSION THAT THE TRANSACTIONS DONE THROUGH THE BANK HAVE BEEN PROPERLY ACCOUNTED IN HI S REGULAR BOOKS OF ACCOUNTS. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 3 7. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE HOLDING THAT THE ASSESSEE HAS FURNISHED BANK STATEMENT SHOWING THAT THE EXPENDITURE CLAIMED WERE INCURRED. WHEREAS THE ISSUE WAS NOT T HE SAME. 8. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.19,24,117/- MADE BY THE A.O. BEING UNPROVED CLAIM OF BILLS DISCOUNTI NG CHARGES. 9. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XIII , AHMEDABAD, ERRED IN LAW AND ON FACTS IN HOLDING THAT THE SAID EXPENDITURE IS REVENUE IN NATURE AND ALLOWABLE U/S.37 OF THE I.T. ACT. WH EREAS THE ISSUE INVOLVED WAS NOT THE SAME. 10. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-XII I, AHMEDABAD, ERRED IN LAW AND ON FACTS IN OVERLOOKING THE ISSUE THAT THE ASSESSEE NEVER PROVED THAT THE ENTIRE TRANSACTIONS ON WHICH THE BILL DISCOUNTING CHARGES CLAIMED HAVE BEEN ACCOUNTED FOR IN HIS REGU LAR BOOKS OF ACCOUNTS. IN THIS REGARD, THE CIT(A) HELD THAT THE CLAIM IS ALLOWABLE U/S.37 OF THE I.T. ACT. 2. THE ASSESSEE HAS MAINTAINED THREE SET OF BOOKS I N THE NAME OF MANOJ C. BRAHMBHATT, M/S. PARTH MERCANTILE INC. AND ATLAS JEWELLERS. PARTH MERCANTILE INC. AND ATLAS JEWELLERS ARE THE PROPRIE TY CONCERN OF THE ASSESSEE. 3. THE FIRST AND SECOND GROUNDS OF APPEAL ARE AGAIN ST THE DELETION OF ADDITION OF RS.1,74,00,000/- ON ACCOUNT OF UNEXPLAI NED CASH DEPOSITS. THE A.O. OBSERVED THAT THE ASSESSEE DEPOSITED CASH RS.1 ,74,00,000/- IN THE BANK ACCOUNT OF ASSESSEE MAINTAINED WITH INDUSLND BANK W HICH WAS RECEIVED FROM RELIEF MERCHANTILE BANK AND IN RELIEF MERCANTILE BA NK, IT WAS RECEIVED FROM SHRI HEMENDRA L. SHAH AND FROM SHRI PRAFUL L. SHAH. THE SOURCE OF HEMENDRA L. SHAH WAS FOUND FROM PARTH MERCANTILE IN C. AND THE SOURCE OF PRAFUL L. SHAH WAS FROM DILIP ATMARAM MODI, HUF. T HE ASSESSEES ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 4 SUBMISSION DATED 14.03.2002 WAS CONSIDERED BY THE A .O. AND THE ASSESSEE CLAIMED THAT HE HAD EXPLAINED THE SOURCE OF CASH DE POSITS UP TO THREE STAGES. THE ULTIMATE SOURCE SHOWN BY THE ASSESSEE WAS FROM PARTH MERCANTILE INC. AND SHRI DILIPKUMAR ATMARAM MODI, HUF. PARTH MERCA NTILE INC. IS THE PROPRIETY CONCERN OF THE ASSESSEE. THE LD. A.O. HA D ASKED TO PRODUCE SHRI DILIPKUMAR ATMARAM MODI, HUF, FOR CROSS VERIFICATIO N BUT HE WENT TO AMERICA. AS PER A.OS. FINDING NO PROOF REGARDING CREDIT OF THESE PARTIES HAD BEEN PRODUCED, NEITHER CONTRA ACCOUNT NOR SOURCE OF DEPO SITS BY THESE PARTIES HAD BEEN FURNISHED. THUS, THE ULTIMATE SOURCE HAD NOT BEEN EXPLAINED. THEREFORE, THE A.O. MADE THE ADDITION OF RS.1,74,00 ,000/- IN THE INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE FILED FIRST APPEAL BEFORE LD. CIT (A) WHO HAS GIVEN DETAILED FINDINGS ON PARAGRAPH NOS. 3, 3.1 & 3.2 OF HIS ORDER DATED 27.01.2003 AT PAGE NO.4 AND DELETED THE ADDITION. THE FINDING OF THE CIT(A) IS REPRODUCED AS UNDER:- 3.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHO RISED REPRESENTATIVE CAREFULLY AND HAVE GONE THROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. I FIND THAT THE APPELLANT HAS EXPLAINED THE SOURCE OF CASH CREDITS OF RS.1,74,00, 000/- AND THE SAME HAS BEEN MADE OUT OF WITHDRAWALS FROM THE BANK ACCO UNTS AND THE APPELLANT HAS ALSO EXPLAINED THE SOURCE FROM WHICH THE FUNDS WERE DEPOSITED IN THE SAID BANK ACCOUNTS BEFORE THE ASSE SSING OFFICER. THE APPELLANT HAS EXPLAINED THE SOURCE OF SUCH DEPOSITS AND THE APPELLANT HAD FURNISHED XEROX COPIES OF ACKNOWLEDGEMENTS OF R ETURN OF INCOME OF THE PERSONS FROM WHOM THE MONEY WAS BORROWED PRIOR TO THE CASH ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 5 DEPOSIT IN THE BANK. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND SAME IS HEREBY DELETED . 5. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD. D.R. SHRI S.K. GUPTA, CIT D.R. FILED THE WRITTEN REPLY DATED 26.06.2012 A LONG WITH COPY OF CONFIDENTIAL INQUIRY REPORT MADE BY DDIT (INVESTIGA TION) DATED 24.10.2000 ALONG WITH LIST OF BANK ACCOUNTS WHERE REFUNDS HAVE BEEN CREDITED. LIST OF BANK ACCOUNTS WITH NO RETURN OF INCOME HAVE BEEN FI LED, THE LIST OF BANK ACCOUNTS TO WHICH RETURN OF INCOME HAVE BEEN FILED, LIST OF BANK ACCOUNTS NOT BELONG TO THE ANAND GROUP, LAND DEBITED IN THE BOOK S OF STATE BANK PROPERTY LTD., LAND DEBITED IN THE BOOKS OF SHRI RAMESH M. S HAH, LEGAL POSITION ON SECTION 68. THE LD. D.R. CONTENDED THAT THE ASSESS EE WAS MAINTAINING BANK ACCOUNT IN THE NAME OF PROPRIETY CONCERN, NAMELY, P ARTH MERCANTILE INC. IN INDUSLND BANK IN WHICH CASH AMOUNT OF RS.1,74,00,0 00/- WAS DEPOSITED. THE SOURCE OF THIS CASH WAS EXPLAINED AS WITHDRAWAL MAD E FROM THE ASSESSEES OWN ACCOUNT WITH RELIEF MERCANTILE BANK. THE SOURC E OF DEPOSIT IN BANK ACCOUNT WITH RELIEF MERCANTILE BANK WAS FROM SHRI H EMENDRA L. SHAH FOR RS. 45 LACS AND FROM SHRI PRAFUL L. SHAH FOR RS.1.59 CR ORE. THE SOURCE OF PRAFUL L. SHAH IN HIS BANK ACCOUNT WHICH WAS MAINTAINED WI TH SAME BANK I.E. RELIEF MERCANTILE BANK WAS FROM SHRI DILIPKUMAR ATMARAM M ODI, HUF AND IN CASE OF HEMENDRA L. SHAH, IT WAS RS.25 LACS FROM SHRI DI LIPKUMAR ATMARAM MODI, HUF & RS. 20 LAKH FROM PARTH MERCANTILE INC. THERE FORE, IT WAS VEHEMENTLY ARGUED THAT THE SOURCE OF THE FUND IN THE HANDS OF HEMENDRA L. SHAH TO THE EXTENT OF RS.20 LACS HAS NOT EXPLAINED TOTALLY AS R ECEIPT HAS BEEN SHOWN FROM THE ASSESSEE HIMSELF BY SHRI HMENDRA L. SHAH (CASH CREDITOR). THEREFORE, ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 6 THIS AMOUNT IS LIABLE TO BE CONFIRMED AS UNDISCLOSE D CASH CREDIT IN THE HANDS OF THE ASSESSEE. THE REMAINING AMOUNT OF RS.1.59 C RORE IN CASE OF PRAFUL L. SHAH AND RS.25 LACS IN CASE OF HEMENDRA L. SHAH, TH E ASSESSEE HAD NOT PRODUCED SHRI DILIPKUMAR ATMARAM MODI, HUF FOR VERI FICATION BEFORE THE A.O. THEREFORE, THE ASSESSEE HAS NOT DISCHARGED HIS ONUS TO PROVE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF THE C ASH CREDITORS. THEREFORE, HE PRAYED TO CONFIRM THE ADDITION. THE REPLY FILED BY THE CIT D.R. IS REPRODUCED AS UNDER:- THESE GROUNDS ARE RELATED TO EACH OTHER AND THEREF ORE THEY ARE TAKEN TOGETHER. GROUND NO.1 IS REGARDING DELETION OF ADDITION OF RS.1,74,00,000/- BEING UNEXPLAINED CASH DEPOSITED I N THE BANK. GROUND NO.3 IS REGARDING REDUCING THE ADDITION MADE U/S. 68 OF RS.116,28,25,838/- TO RS. 1,22,545/-. GROUND NO.2 & 4 ARE ARGUMENTS RELATED TO THESE TWO GROUNDS. IN RESPECT OF ADDITI ON OF RS. 116,28,25,838/- THE CIT(A) HAS STATED IN PARA 6.3 O N PAGE 18 ON HIS ORDER THAT THIS ADDITION WAS RECTIFIED BY THE A.O. BEING A TYPOGRAPHICAL MISTAKE IN RESPECT OF ADDITION OF AMOUNT CONCERNING SONU EXIM WHICH ACCORDING TO CIT(A) THE CORRECT AMOUNT WAS RS. 2,96 ,00,000/- BUT WAS WRONGLY TAKEN BY THE A.O. AT RS.29,60,00,000/-. IN THIS REGARD IT IS STATED THAT THE MATTER WAS TAKEN UP THE ASSESSING O FFICER BUT HE HAS NOT BE ABLE TO VERIFY THE SAME. IT APPEARS THAT AP PELLANT ALSO DOES NOT HAVE ANY SUCH RECTIFICATION ORDER. 2. IN VIEW OF THE ABOVE THESE GROUNDS ARE DISCUSSED IN THE PARAS HEREUNDER: ADDITION OF RS.1,74,00,000/- BEING CASH DEPOSIT IN INDUSLAND BANK LTD. (PARA 22 & PAGE 14 OF ASSESSMENT ORDER). THE A.O. HAS STATED THAT THE VERIFICATION OF CASE RECORDS SHOW THE FOLLOWING CASE DEPOSITS:- SR. NO. AMOUNT (IN RS. LACS) DATE ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 7 1. 35 09.03.1998 2. 50 09.03.1998 3. 45 09.03.1998 4. 44 09.03.1998 TOTAL 174 3. FROM PARA 22 OF THE ASSESSMENT ORDER IT IS SEEN THAT BEFORE THE A.O. IT WAS EXPLAINED THAT THE CASH DEPOSITS IN THE INDUSLND BANK WAS RECEIVED FROM RELIEF MERCHANTILE BANK AND IN RELIEF MERCANTILE BANK IT WAS RECEIVED FROM SHRI HEMENDRA L. SHAH AS WELL AS FROM SHRI PRAFUL L. SHAH. IT HAS BEEN STATED BY THE ASSESSEE THAT THE SOURCE OF SHRI HEMENDRA L. SHAH IS FROM PARTH MERCANTILE INC. AND ALSO FROM DILIP ATMARAM MODI (HUF). IT IS FURTHER SEEN THAT THE SO URCE OF SHRI PRAFUL L. SHAH IS ALSO FROM DILIP ATMARAM MODI (HUF). THE A. O. HAS STATED THAT THIS IS AS PER WRITTEN SUBMISSION GIVEN BY THE ASSE SSEE ON 14.03.2002. THE ASSESSEE HAS CLAIMED TO HAVE EXPLAINED THE SOUR CE OF CASH DEPOSIT UPTO 3 STAGES IN VIEW OF THE ABOVE SUBMISSION. HOW EVER, IT IS CLEAR THAT THE ULTIMATE SOURCE SHOWN BY THE ASSESSEE IS FROM P ARTH MERCANTILE AND SHRI DILIPKUMAR ATMARAM MODI (HUF). IT IS INTEREST ING TO SEE THAT PARTH MERCANTILE IS PROPRIETY CONCERN OF THE ASSESSEE AND THEREFORE ASSESSEE CANNOT EXPLAIN THE SOURCE FORM HIS OWN CONCERN WITH OUT EXPLAINING THE SOURCE FROM WHERE IS PROPRIETY CONCERN GOT THE CASH . THE ASSESSEE WAS ALSO ASKED TO PRODUCE DILIPKUMAR ATMARAM MODI ( HUF) BEFORE THE A.O. BUT IT WAS STATE BY THE ASSESSEE SHRI DILIPKUM AR HAD GONE TO AMERICA AND HENCE HE CANNOT BE PRODUCED. SINCE THE ASSESSEE DID NOT PRODUCE THESE PARTIES NOR FILED CONTRA ACCOUNT OR P ROVED CREDITWORTHINESS OF THESE PARTIES, THEREFORE, THE A .O. MADE THE ADDITION OF RS.1,74,00,000/- AS UNEXPLAINED CASH CREDIT. 4. THE CIT(A) HAS DEALT THIS ISSUE IN PARA 3 ON PAG E 2 OF HIS ORDER. IN PARA 3.2 ON PAGE 4 THE CIT(A) HAS SIMPLY ACCEPTE D THE SUBMISSION OF THE ASSESSEE SAYING THAT THE APPELLANT EXPLAINED TH E SOURCE OF CASH ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 8 CREDIT OF RS.1,74,00,000/- AND THE SAME IS EXPLAINE D OUT OF WITHDRAWAL FROM THE BANK ACCOUNT AND THE APPELLANT HAS ALSO EX PLAINED THE SOURCE OF FUNDS DEPOSITED IN THE BANK ACCOUNT BEFORE THE A SSESSING OFFICER. FROM PARA 3.1 OF THE ORDER OF THE CIT(A) IT IS SEEN THAT NO SUCH DETAILS HAVE BEEN GIVEN OR ATLEAST DISCUSSED BY THE CIT(A) IN PARA 3.1 WHERE HE HAS QUOTED THE SUBMISSION OF THE ASSESSEE. 5. IN VIEW OF THE ABOVE IT IS VERY CLEAR THAT THE C IT(A) HAS WITHOUT GOING INTO THE DETAILS HAS ACCEPTED THE SUBMISSION OF THE ASSESSEE. AS DISCUSSED BY THE A.O. IN PARA 22 OF THE ASSESSMENT ORDER THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSIT IN HIS OWN ACCOUNT OF INDUSLND BANK FROM THE WITHDRAWALS OF CASH FROM HIS OWN ACCO UNT IN HIS PROPRIETARY CONCERN VIZ. PARTH MERCANTILE AND DILIP KUMAR ATMARAM MODI (HUF). SHRI DILIPKUMAR ATMARAM MODI (HUF) HAS NOT BEEN PRODUCED AND NO CONTRA ACCOUNT HAS BEEN FILED. THE SOURCE O F DEPOSIT IN HIS PROPRIETARY CONCERN VIZ. PARTH MERCANTILE HAS NOT B EEN EXPLAINED BY THE ASSESSEE BEFORE THE A.O. THEREFORE THE ORDER OF CI T(A) IS NOT CORRECT AS THE FINDINGS GIVEN BY THE CIT(A) IS NOT BASED ON DOCUMENTS. THEREFORE THE ADDITION MADE BY THE A.O. SHOULD BE C ONFIRMED AND THE ORDER OF CIT (A) SHOULD BE SET-ASIDE ON THIS GROUND . 6. FROM THE SIDE OF ASSESSEE, SHRI ASEEM L. THAKKAR , SENIOR COUNSEL APPEARED, WHO HAS ALSO FILED WRITTEN SUBMISSION DAT ED 25.06.2012 AND COPY OF THE ORDER OF CIT(A)-XIII, AHMEDABAD, DATED 30.01 .2004 FOR A.Y. 1997-98 IN THE CASE OF ASSESSEE. THE SUBMISSION OF LD. COUNSE L IS REPRODUCED AS UNDER:- 4. THE FIRST GROUND OF APPEAL RELATES DELETION OF RS. 1.74 LAC BY WAY OF UNEXPLAINED CASH DEPOSITS. THE RELEVANT DISCUSS ION HAS BEEN MADE IN PARA 22 AND PAGE 14 OF THE ASSESSMENT ORDER. TH E LD. CIT(A) HAS ADJUDICATED THE ISSUE IN PARA 3 TO 3.2 & PG.2 TO 4 OF HIS ORDER. THE A.O. HAS STATED THAT THE FOLLOWING CASH CREDITS WERE MAD E BY THE RESPONDENT. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 9 DATE AMOUNT 09-03-1998 35,00.000 09-03-1998 50,00,000 09-03-1998 45,00,000 09-03-1998 44,00,000 TOTAL... 1, 74,00,000 4.1 IT HAS BEEN STATED BY THE A.O THAT THE R ESPONDENT HAD EXPLAINED THAT HE WAS OPERATING 2 BANK .ACCOUNTS, ONE WITH IN DU SIND BANK LTD. AND THE SECOND WITH RELIEF MERCANTILE CO-OPERATIVE BANK LTD. IT WAS EXPLAINED THAT THE DEPOSIT IN INDU SIND BANK LTD. W AS ON ACCOUNT OF WITHDRAWALS OF FUNDS FROM RELIEF MERCANTILE CO-OPER ATIVE BANK. FURTHERMORE, IN RELIEF MERCANTILE CO-OPERATIVE BANK LTD. THE AMOUNT WAS RECEIVED FROM HEMENDRA L. SHAH AND PRAFUL L. SH AH. IT HAS ALSO BEEN STATED BY THE A.O THAT THE SOURCE OF FUNDS IN CASE OF HEMENDRA L. SHAH WAS PARTH MERCANTILE INC AND DILIP ATMARAM MOD I HUF, WHEREAS THE SOURCE OF FUNDS IN THE CASE OF PRAFUL L. SHAH W AS DILIP ATMARAM MODI HUF. THUS, UPTO EARLIER THREE STAGES THE SOURC E OF CASH DEPOSITED IN THE BANK ACCOUNT HAD BEEN EXPLAINED. THE A.O HAS FURTHER STATED THAT THE RESPONDENT WAS ASKED TO PRODUCE SHRI DILIP ATMA RAM MODI BEFORE HIM AND HAS ALSO ACCEPTED THAT THE RESPONDENT HAD C LARIFIED THAT ON ACCOUNT OF HIM HAVING GONE TO USA THE SAME WAS NOT POSSIBLE. THE A.O. HAS STATED THAT SINCE NO PROOF REGARDING CREDI T OF THESE PARTIES WAS FURNISHED, NOR CONTRA ACCOUNT OR SOURCE OF DEPOSIT HAVING BEEN FURNISHED AND THE ULTIMATE SOURCE NOT B EING EXPLAINED THE ADDITION HAS BEEN MADE. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 10 4.2 THE LD. CIT (A) HAS DISCUSSED THE ISSUE I N PARA 3 AND PAGE 2 OF THE ORDER. THE LD. CIT (A) IN PARA 3.2 HAS DELETED THE ADDITION ON THE GROUND THAT THE RESPONDENT HAD EXPLAINED THE SOURCE OF CASH CREDIT OF RS.174 LAC WHICH HAD BEEN MADE OUT OF THE WITHDRAWA L FROM HIS BANK ACCOUNTS. THE RESPONDENT HAD ALSO EXPLAINED THE SOU RCE FROM WHICH THE FUNDS WERE DEPOSITED IN THE SAID BANK ACCOUNT PRIOR TO THE MAKING OF THE WITHDRAWALS BEFORE THE A.O. THE RESPONDENT HAD ALSO FURNISHED THE ACKNOWLEDGEMENT AND RETURN OF INCOME OF THE PERSONS FROM WHOM MONEY WAS BORROWED PRIOR TO THE CASH DEPOSIT IN THE BANK I.E. HEMENDRA L. SHAH & PRAFUL L. SHAH. THE ENTIRE TRAIL OF FUNDS HAS BEEN PLACED ON PG-114 & 115 OF THE PAPER BOOK. THE APPELLANT HAVIN G EXPLAINED THE SOURCE OF SOURCE & ORIGIN OF ORIGIN OF SUCH DEPOSITS RELIED UPON THE FOLLOWING JUDICIAL PRONOUNCEMENTS IN SUPPO RT OF HIS CONTENTION: 1) MURLIDHAR LAHORIMAL V CIT (2006) 280 TTR 512 (GU J.) 2) SAROGI CREDIT CORPORATION V. CIT (1976) 103 ITR 344 (PATNA). 2) CIT V RAMNARAYAN GOYAL (1997) 244 ITR 180 (P&H) 3) THOLARAM DADA V. CIT (1966) 59 ITR 638 (ASSAM). 4) CIT V DOLATRAM RAVATMAL (1973) 87 ITR 349 (SC). 4.3 IT IS AN ACCEPTED FACT BY THE A.O THAT THE RESPONDENT HAD FURNISHED COMPLETE INFORMATION AND DETAILS REGARDIN G THE SOURCE OF THE DEPOSITS, THE PARTIES FROM WHOM CASH CREDITS HAD BE EN ACCEPTED. THEIR NAMES, ADDRESSES, CONFIRMATION AND INCOME TAX PARTI CULARS ETC. WERE FURNISHED. NOT ONLY COMPLETE IDENTIFICATION OF THOS E PARTIES WAS FURNISHED BUT ALSO OF SUCH PARTIES/ENTITIES WHO IN TURN HAD A DVANCED MONEY TO THE CASH CREDITORS OF THE APPELLANT. THEREFORE, THE RES PONDENT HAD FURNISHED COMPLETE DETAILS REGARDING HIS OWN DEPOSITOR AS WEL L AS THE DEPOSITOR OF SUCH CASH CREDITORS. THE A.O WHILE REJECTING THE EXPLANATION HAS RELIED UPON THE NON PRODUCTION OF THE DEPOSITOR OF DEPOSITOR WHICH IS IN CONTRAVENTION TO THE SETTLED POSITION OF LAW AS REFERRED SUPRA. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 11 THE LD. CIT (A) HAS THEREFORE RIGHTLY DELETED THE A DDITION MADE SINCE THE A.O HAS NOT DOUBTED EITHER THE IDENTITY, CAPACITY O R THE GENUINENESS OF THESE CASH CREDITS IN THE HANDS OF THE RESPONDENT. IN VIEW OF THE SETTLED LEGAL POSITION THAT THE RESPONDENTS IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE OR THE ORIGIN OF ORIGIN THE ADDITION HAS BEE N RIGHTLY DELETED. 7. WE HAVE GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW AND CONSIDERED THE REPLY OF BOTH SIDES. THE ASSESSEE HAS RECEIVED RS.1.59 CRORE FROM PRAFUL L. SHAH FOR WHICH WRITTEN SUBMISSION MADE BY THE AS SESSEE ON 14.03.2002 AND EXPLAIN THE SOURCE. THE ASSESSEE FILED A COPY OF INCOME TAX RETURN FOR A.Y. 98-99 BEFORE CIT(A) AT PAGE NOS. 47 TO 50 OF P APER BOOK. SHRI PRAFUL L. SHAH WAS CASH CREDITOR IN THE BOOK OF ACCOUNT OF TH E ASSESSEE WHO IS ASSESSED TO TAX WITH ITO WARD 1 (6), PALANPUR. THE REFORE, LD. CIT(A) RIGHTLY DELETED THE ADDITION. SHRI HEMENDRA L. SHAH HAS GI VEN CASH TO ASSESSEE RS.45 LAKH BUT SOURCE OF CASH IN THE HAND OF CASH C REDITOR WAS RS.20 LAKH FROM PARTH MERCANTILE INC. AND RS.25 LAKH FROM SHRI DILIP ATMARAM MODI HUF. THE CASH CREDITOR IS THE BOOK ACCOUNT OF THE ASSESS EE IS HEMENDRA L. SHAH WHO HAD EXPLAINED CASH DEPOSITED UP TO RS.25 LAKH R EMAINING AMOUNT HAD BEEN SHOWN FROM PARTH MERCANTILE INC. IT MEANS FRO M THE ASSESSEE. THEREFORE, CASH CREDIT TO THE TUNE OF RS.20 LAKH HA S NOT EXPLAINED. THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION O F RS.20 LAKH. WE HAVE CONSIDERED VIEW THAT GENUINENESS AND SOURCE OF CASH CREDITOR HAS NOT PROVED BY THE ASSESSEE IN CASE OF HEMENDRA L. SHAH. ACCOR DINGLY, WE CONFIRM THE ADDITION OF RS.20 LAKH. 8. GROUND NOS.3 & 4 ARE AGAINST DELETION OF ADDITIO N U/S 68 FROM RS. 116,28,25,838/- TO RS. 1,22,545/-. IT IS OBSERVED FROM THE ORDER OF A.O. THAT ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 12 THE ASSESSEE HAD NOT PROVED THE IDENTITY OF THE PAR TY, GENUINENESS OF THE TRANSACTION AND SOURCE OF THE DEPOSIT IN CASE OF R. A. CORPORATION FOR RS. 1.5 CRORE AS THE ASSESSEE HAD FURNISHED THE COPY OF ACC OUNT FROM HIS BOOKS OF ACCOUNT AND NO DETAILS WERE FURNISHED TO EXPLAIN TH E SOURCE OF THE CASH CREDIT. IN CASE OF FOLLOWING PERSONS, THE ASSESSEES PARTIC ULARS WERE FOUND INCOMPLETE. (II) IN THE FOLLOWING CASES DETAILS HAVE BEEN FURN ISHED BUT THE SAME IS INCOMPLETE. FROM MANOJ C BRAHMBHATT'S SET : ALKA J BAROT RS. 5,000/- THE COPY OF ACCOUNT AND ACKNOWLEDGEMENT OF RETURN FILED ARE ENCLOSED. BUT PROOF REGARDING SOURCE, COPY OF CONTRA ACCOUNT, ETC., ARE NOT FILED. HEMNDRA L SHAH RS. 2,00,000/- THE ISSUE IS DISCUSSED LATER ON. H NYALCHAND FIN.CO. RS. 21,397/- THE COPY OF ACCOUNT FROM ASSESSEE'S BOOKS IS FURNISHED ONLY. FROM PARTH MERCANTILE INC. SET: ANAND JEWELLERS RS. 1.40.00.000/- & INTEREST RS. 27,616/- COPY OF CONTRA ACCOUNT AND COPY OF ACKNOWLEDGEMENT OF PROOF FOR FILING RETURN HAVE BEEN FURNISHED, BUT SOURCE IS NOT EXPLA INED NOR INTEREST ACCOUNT IS GIVEN. ANAND PROPERTY FIN. LTD. 12,00,000/- & INTEREST RS . 2,367/- COPY OF CONTRA ACCOUNT, COPY OF ACKNOWLEDGEMENT OF PROOF FOR FILING RETURN, HAVE BEEN FURNISHED, BUT THE SOURCE IS NOT EXPLAINED NOR INTEREST ACCOUNT IS GIVEN. GALAXY IMPEX: RS. 1,14,00,000/- & INT EREST RS. 4,62,615 /- ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 13 COPY OF CONTRA ACCOUNT, COPY OF ACKNOWLEDGEMENT OF PROOF FOR FIFING RETURN, ETC ARE FILED, BUT NO FURTHER DETAILS HAVE BEEN FURNISHED. HEMENDRA L SHAH RS.73,54,30,900/- & INTERES T RS. 3,99,50,101/- THE ISSUE IS DISCUSSED LATER ON. SONU EXIM RS.29,60,00,000/- & INEREST RS. 23,35,5 61/- COPY OF CONTRA ACCOUNT, COPY OF ACKNOWLEDGEMENT OF PROOF FOR FILING RETURN SHOWING LOSS OF RS. 62.033/- HAVE BEEN FURNI SHED, BUT NO OTHER DETAILS HAVE BEEN SUBMITTED. THE A.O. OBSERVED THAT THE COPY OF ACCOUNTS FILED O N COMPUTER SHEET AND IN SAME RUBBER STAMP AND SIGNATURES WERE NOT VERIFIABL E. THE ASSESSEE HAS NOT FILED ANY EVIDENCE OTHER THAN COMPUTER SHEET, COPY OF ACCOUNT FROM THE PARTY EVEN 18 DATES OF HEARING WERE GIVEN TO THE ASSESSEE . THEREFORE, HE ADDED RS.1,11,60,42,954/- U/S 68 ALONG WITH INTEREST IN T HE INCOME OF THE ASSESSEE. IT IS FURTHER OBSERVED BY THE A.O. THAT WHATEVER IN FORMATION FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING HAD BEEN FORWARDED TO THE CONCERN ASSESSING OFFICER. THE REPLY OF THE AS SESSING OFFICER WAS AS UNDER:- (I) SHRI K.J. SHAH DCIT CIR. 9, AHMEDABAD : THE CA SE OF SHRI HEMENDRA L SHAH IS WITH HIM. ON INQUIRY IT IS LEAR NT FROM HIM THAT THE ASSESSEE SHRI HEMENDRA L SHAH HAS NOT FILED THE RETURN FOR A.Y.1998-99 TILL DATE. (II) SMT. SMITI SAMANT DCIT CIR. 8, AHMEDABAD. : IN SHOW CAUSE NOTICE DATED 11.3.2002 AT PARA NO.9 IT IS MENTIONED THAT RS. 70,000/- HAS BEEN RECEIVED AS DEPOSIT FROM SPEEDWEL L PROPERTIES LTD. BY SHRI MANOJ C BRAHMBHATT PROP. OF ATLAS JEWE LLERS. THE CASE OF SPEEDWELL PROPERTIES LTD IS ASSESSED BY THE DCIT, CIR.8, ABAD. A LETTER WAS WRITTEN TO THE AO REGARDING IN QUIRY OF ENTRY OF RS.70,000/-. THE DCIT CIR. 8 HAS CONVEYED THAT THE AMOUNT OF RS.70000/- HAS NOT BEEN REFLECTED IN THE BOOKS OF A CCOUNTS OF ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 14 SPEEDWELL PROPERTIES LTD. IT IS FURTHER STATED THA T RS.6,50,000/- CREDIT BALANCE APPEARS IN THE BOOKS OF SPEEDWELL PR OPERTIES LTD IN THE NAME OF MANOJ C. BRAHMBHATT. THEREFORE, THE ADDITION OF RS. 6,50,000/- IS REQUIRED TO BE MADE HERE. THIS L ETTER HAS BEEN SHOWN TO SHRI RAJU MAVADIA AND SHRI J.G. DHRUVE, BU T THEY HAVE NOT PROPERLY EXPLAINED THE AMOUNT OF RS.6,50,000/-. THEREFORE, THE ADDITION OF RS.6,50,000/- IS REQUIRED TO BE MAD E ON THIS ISSUE. ON THE BASIS OF ABOVE REPLY, THE A.O. MADE ADDITION OF RS. 6,50,000/-. FURTHER, THE ASSESSEE HAS SHOWN RS. 99,18,000/- FRO M SHRI HEMENDRA L SHAH, RS. 1,05,00,000/- FROM TUSHAR K SHAH, RS.70,0 00/- FROM SPEEDWELL PROPERTIES, RS.84,00,000/- FROM PINKY CORPORATION, RS. 50,00,000/- FROM PINCKY CORPORATION, RS.50,00,000/- FROM VIDHI CORPO RATION (PROP. HEMENDRA L SHAH) & RS.50,00,000/- FROM SHRI PRAFUL L SHAH. TH E ASSESSEE FILED CONTRA ACCOUNT, COPY OF ACKNOWLEDGEMENT OF PROOF FOR FILIN G RETURN WITH COMPUTATION OF TOTAL INCOME SHOWING LOSS OF RS. 31,17,965/- CLA IMING REFUND OF RS.1,64,427/- HAD BEEN FILED. SOURCE HAS NOT BEEN EXPLAINED AND COPY OF INTEREST OF ACCOUNT WAS NOT GIVEN. THEREFORE, THE ADDITION OF RS.4,61,02,392/- WAS MADE ALONG WITH INTEREST OF RS. 22,14,392/- IN THE INCOME OF THE ASSESSEE. BESIDES THIS, THERE WAS AN ADDITION OF R S.30,492/- ON ACCOUNT OF INTEREST ON CASH CREDITOR RECEIVED IN A.Y.97-98 WHI CH WERE ADDED IN THE TOTAL INCOME FOR A.Y. 97-98. THUS, TOTAL ADDITION OF RS. 1,16,28,25,838/- WAS MADE IN THE INCOME OF THE ASSESSEE. THE A.O. HAD GIVEN DETAILED FINDING ON PAGE NOS. 11 TO 16 OF THE ASSESSMENT ORDER. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 15 9. BEING AGGRIEVED BY THIS ORDER, THE ASSESSEE FILE D FIRST APPEAL BEFORE CIT(A), WHO HAS DISCUSSED THIS ISSUE ON PAGE NOS. 4 TO 22 AND DELETED MOST OF ADDITIONS EXCEPT RS.1,22,545/- BY DISCUSSING IND IVIDUAL CASH CREDITOR IN PARAGRAPH NOS. 6.1 TO 6.13 AND THE FINDINGS OF THE CIT(A) IN PARAGRAPH NO. 6.13 IS REPRODUCED AS UNDER:- 6.13 AS DISCUSSED ABOVE I FIND THAT ALL THE ABO VE DEPOSITS EXCEPT THE DEPOSIT OF RS.2L,397/- FROM H. NYALCHAND FINANCE CO . AND RS.70,656/- FROM SPEEDWELL PROPERTIES LTD. HAVE BEEN RECEIVED T HROUGH BANK CHEQUES AND ALL THESE DEPOSITORS HAVE GOT PANOS. OR GIR NOS. AND THEY HAVE FILED RETURNS OF INCOME AND THE SAID ADVA NCES HAVE BEEN REFLECTED IN THEIR BALANCE-SHEETS. J ALSO FIND THAT THE DEPOSIT OF RS. 2,00,000/- FROM HEMENDRA SHAH HAS BEEN RECEIVED BY ACCOUNT PAYEE CHEQUE. THUS ALL THE ABOVE DEPOSITS HAVE BEEN RECEI VED THROUGH CHEQUES. FOR THE DEPOSIT FROM H. NYALCHAND FINANCE CO. THE APPELLANT HAS NOT FILED ANY DETAILS NOR CONFIRMATION LETTER, THUS THE APPELLANT HAS NOT PROVED THE GENUINENESS OF THE SAID CREDIT. THER EFORE, THE ADDITIONS MADE TOWARDS UNEXPLAINED CREDITS IN RESPECT OF ABOV E DEPOSITORS EXCEPT THE DEPOSIT FROM H.NYALCHAND FINANCE CO. AND RS. 70,656A FROM SPEEDWELL PROPERTIES LTD ARE NOT JUSTIFIED. TH E HON'BLE GUJARAT HIGH COURT IN THE CASE OF DCIT V/S. ROHINI BUILDERS REPORTED IN 256ITR 360 WHILE DELETING THE ADDITION OF CASH CREDITS HAS HELD THAT, 'THE TRIBUNAL FOUND THAT THE ASSESSES HAD DISCHARGE D THE INITIAL ONUS WHICH LAY ON IT IN TERMS OF SECTION 68 BY PROV ING THE IDENTITY OF THE CREDITORS BY GIVING THEIR COMPLETE ADDRESSES , GIR NUMBERS/PERMANENT ACCOUNT NUMBERS AND THE COPIES OF ASSESSMENT ORDERS WHEREVER READILY AVAILABLE, THAT IT HAD ALSO PROVED THE CAPACITY OF THE CREDITORS BY SHOWING THA T THE AMOUNTS WERE RECEIVED BY THE ASSESSES BY ACCOUNT PAYEE CHEQ UES DRAWN FROM BANK ACCOUNTS OF THE CREDITORS AND THE ASSESSE E WAS NOT ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 16 EXPECTED TO PROVE THE GENUINENESS OF THE CASH DEPOS ITED IN THE BANK ACCOUNTS OF THOSE CREDITORS BECAUSE UNDER LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF THE CR EDITS IN ITS BOOKS OF ACCOUNT BUT NOT THE SOURCE OF THE SOURCE. ' I FIND THAT IN THE CASE OF THE APPELLANT THE SOURCE OF ABOVE DEPOSITS HAS BEEN EXPLAINED AND AS THE CREDITS HAVE BEEN RECEIVE D BY ACCOUNT PAYEE CHEQUES AND THE APPELLANT HAS FURNISHED THE G IRNO.S AND PANO.S AND FILED COPIES OF RETURNS OF INCOME FILED BY THE DEPOSITORS AND ALSO COPIES OF THEIR BALANCE SHEETS , RELYING ON TH E DECISION OF GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUILDERS CITED SUPRA AND RELYING ON THE RATIO OF THE CASES: CITED BY THE AUT HORISED REPRESENTATIVE, I AM INCLINED TO HOLD THAT THE APPELLANT HAS ESTABL ISHED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS F OR THE CREDITS OF RS.1,16,28,25,838/- EXCEPT THE DEPOSIT OF RS.21,397 /- FROM H. NYALCHAND FINANCE CO. AND RS.70,656/- FROM SPEEDWEL L PROPERTIES LTD. AND RS. 30.492/- WHICH REPRESENTS DISALLOWANCE OF I NTEREST RELATING TO THE CASH CREDITS INTRODUCED DURING THE EARLIER YEAR AS DISCUSSED IN PARA 21 OF THE ASSESSMENT ORDER AND THAT THESE CREDITS A RE ALL GENUINE, HENCE I REDUCE THE ADDITION OF RS. 1,16,28,25,838/- TO RS. 1,22,545/- AND DELETE THE BALANCE AMOUNT OF RS.1,16,27,03,293 /-. AS REGARDS THE DISALLOWANCE OF RS. 30,492/- REPRESENTING INTEREST PAID ON THE CASH CREDITS ADDED IN A.Y. 1997-98, I FIND THAT IN THE ASSESSMENT OF A.Y. 1997-98, CERTAIN CASH CREDITS HAVE BEEN TREATED AS UNEXPLAINED CASH CREDITS AND ADDITION HAS BEEN MADE. ACCORDINGLY, TH E ASSESSING OFFICER HAS NOT ALLOWED INTEREST ON THE SAID DEPOSITS. IF I S FOUND THAT THE FIRST APPEAL OF THAT YEAR IS PENDING FOR DECISION. DEPEND ING ON THE DECISION OF CIT(A) FOR THE ;A.Y. 1997-98 REGARDING THE GENUI NENESS OF THE SAID CASH CREDITS, THE INTEREST DISALLOWANCE NEEDS TO BE REVISED. THE ASSESSING OFFICER IS DIRECTED TO ALLOW INTEREST LAT ER ON THOSE DEPOSITS WHICH WOULD BE HELD TO BE GENUINE BY THE CIT(A) FOR THE A.Y. 1997-98. AS REGARDS THE DEPOSIT OF RS.70,656/- FROM SPEEDWEL L PROPERTIES LTD. IT ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 17 IS FOUND THAT THE SAID AMOUNT IS NOT APPEARING AS L OAN ADVANCED IN THE BALANCE-SHEET OF SPEEDWELL PROPERTIES LTD. AS ON 31 .3.1998, HENCE I DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE BOO KS OF ACCOUNTS OF SPEEDWELL PROPERTIES LTD WHETHER THE SAME HAS BEEN REFLECTED IN THEIR BOOKS OF ACCOUNTS AND IF THE SAME IS REFLECTED IN T HE BOOKS OF ACCOUNTS OF SPEEDWELL PROPERTIES LTD., THE ASSESSING OFFICER IS DIRECTED TO ACCEPT THE SAME AS GENUINE. 10. NOW THE REVENUE IS BEFORE US. THE LD. CIT DR C ONTENDED THAT IT HAS TO BE EXAMINED PARTICULARS OF INDIVIDUAL CASH CREDITOR S EVIDENCE WHETHER THE APPELLANT HAD DISCHARGED ONUS TO PROVE THE IDENTITY OF THE PERSON, CREDITWORTHINESS OF THE ASSESSEE AND GENUINENESS OF THE TRANSACTION. HE SUBMITTED A DETAILED CHART WHICH IS REPRODUCED AS U NDER:- SR. NO. NAME OF THE CREDITOR PAG E NO. IN PAPE R BOOK AMT. OF DEPOSI T AS PER ASST. ORDER INTER EST TOTAL WHETH ER AMT. MATCH ES PAN / WHET HER VERIFI ABLE COPY OF RETURN CONF IRMAT ION WHE TER ENQU IRY REMARKS 1. ALKA BAROT (PAGE 11 OF ASSESS MENT ORDER) 19, 20 5000 0 5000 MATCH ES WITH COPY OF A/C NO PAN YES NO YES 1. IN THE RETURN, THE NAME IS MENTIONED AS ALKABEN J. BRAHMBHATT 2. NO PAN 3. NO CONFIRMATION 4. SIGNATURE NOT VERIFIABLE 5. ADDRESS NOT VERIFIABLE 6. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 7. SOURCE IS NOT PROPERLY EXPLAINED. 2. ANAND JEWELLE RS (PAGE 21 TO 25, 166 14000 000 2761 6 1402 7616 MATCH ES WITH COPY GIR NO. YES NO YES 1. ADDRESS NOT VERIFIABLE. 2. NO PAN 3. NO ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 18 11 OF ASSESS MENT ORDER) OF A/C CONFIRMATION FILED 4. SIGNATURE IS NOT VERIFIABLE 5. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 6. SOURCE IS NOT PROPERLY EXPLAINED. 7. BALANCE SHEET UNSINGED 3. ANAND PROPERT Y FINANC E LTD. (PAGE 11 OF ASSESS MENT ORDER) 26 TO 31, 153 TO 160 12000 00 2367 1202 367 MATCH ES WITH COPY OF A/C NO PAN YES NO YES 1. ADDRESS IS OF SAME APARTMENT AS IN S. NO. 3, 5, 7, 12 & 13. 2. NO PAN 3. NO CONFIRMATION FILED 4. SIGNATURE IS NOT VERIFIABLE 5. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 6. SOURCE IS NOT PROPERLY EXPLAINED. 4. GALAXY IMPEX (PAGE 11 OF ASSESS MENT ORDER) 32 & 33, 161 11400 000 4626 15 1186 2615 MATCH ES WITH COPY OF A/C GIR NO. YES YES (ONLY PRINC IPAL AMT.) YES 1. ADDRESS NOT VERIFIABLE 2. GIR NO. IS GIVEN NOT PAN. BALANCE SHEET IS UNSIGNED. 3. CONFIRMATION IS ONLY FOR PRINCIPAL AMOUNT. 4. RETURN IN THE NAME OF RAMESHBHAI P. SHAH 5. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 6. SOURCE IS NOT PROPERLY EXPLAINED. 5. SONU EXIM 34 TO 36, 29600 0000 2335 561 2983 3556 MATCH ES NO PAN YES YES (ONLY YES 1. ADDRESS IS OF SAME ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 19 (PAGE 11 OF ASSESS MENT ORDER) 44 TO 46, 162 1 WITH COPY OF A/C PRINC IPAL AMT.) APARTMENT AS IN S. NO. 3, 5, 7, 12 & 13. 2. NO PAN 3. CONFIRMATION GIVEN FOR PRINCIPAL AMOUNT ONLY. 4. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 5. SOURCE IS NOT PROPERLY EXPLAINED. 6 TUSHAR BHAI K. SHAH (PAGE 13, PARA 20(II) OF ASSESS MENT ORDER) 37 TO 39, 163 10500 000 8595 62 1135 9562 MATCH ES WITH COPY OF A/C YES YES YES (ONLY PRINC IPAL AMT.) YES 1. ADDRESS GIVEN IN THE RETURN IS INCOMPLETE. 2. CONFIRMATION GIVEN FOR PRINCIPAL AMOUNT ONLY. 3. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 5. SOURCE IS NOT PROPERLY EXPLAINED AS BALANCE SHEET IS UNSIGNED. 7 & 15. SPEED WELL PROPERTI ES LTD. (PAGE 13, PARA 19 (II) OF ASSESS MENT ORDER) 40 TO 43 AND 172 TO 185 70000 65000 0 656 0 7065 6 6500 00 MATCH ES WITH COPY OF A/C YES YES YES (ONLY PRINC IPAL AMT.) YES 1. ADDRESS IS OF SAME APARTMENT AS IN S. NO. 3, 5, 7, 12 & 13. 2. CONFIRMATION GIVEN FOR PRINCIPAL AMOUNT ONLY. 3.THE SIGNATURE ON RETURN AND CONFIRMATION ARE DIFFERENT. 4. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 5. SOURCE IS NOT PROPERLY EXPLAINED. 8 PRAFUL L. SHAH 47 TO 50 50000 00 1775 34 5177 534 MATCH ES GIR NO. YES YES YES 1. NO RESPONSE TO THE ENQUIRY ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 20 (PAGE 13, PARA 20(IV & V) OF ASSESS MENT ORDER) WITH COPY OF A/C CONDUCTED BY A.O. 2. SOURCE IS NOT PROPERLY EXPLAINED. 3. THERE IS NO PAN ON THE INCOME-TAX RETURN AND ADDRESS ON THE RETURN IS NOT VERIFIABLE FROM THE RETURN 9, 10 & 11 HEMEN DRA L. SHAH (PAGE 15, PARA 23 OF ASSESS MENT ORDER) 54 TO 57, 60 TO 64, 66 TO 92, 116 TO 118, 167 TO 169 20000 0 73543 0900 99180 00 0 3995 0101 3625 48 2000 00 7753 8100 1 1028 0548 YES YES YES YES PARA 23 PAGE 15 OF ASSESSMENT ORDER. PROPRIETARY OF VIDHI CORPORATION IN A STATEMENT RECORDED ON 11.03.2002 ADMITTED THAT RETURN OF A.Y. 1998-99 NOT FILED TILL THE COMPLETION OF THIS ASSESSMENT ORDER I.E. 20.03.2002 BECAUSE HE STATED THAT BOOKS WERE STILL UNDER PREPARATION. DID NOT PRODUCE ANY EVIDENCE OR BOOKS OF ACCOUNTS. 12 & 13 PINKY CORPOR ATION (PAGE 13, PARA 20(IV & V) OF ASSESS MENT ORDER) 53, 54, 170 84000 00 50000 00 4639 56 1750 68 8863 956 5175 068 MATCH ES WITH COPY OF A/C YES YES NO YES 1. NO CONFIRMATION IS GIVEN AS BALANCE SHEET AND CONFIRMATION ARE UNSIGNED. 2. SIGNATURE NOT VERIFIABLE 3. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 4. SOURCE IS NOT ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 21 PROPERLY EXPLAINED. 14 VIDHI CORPOR ATION, PROPRIET ARY CONCER N OF SHRI HEMEN DRA L. SHAH (PAGE 15, PARA 23 OF ASSESS MENT ORDER) 58,5 9, 93 TO 96 50000 00 1750 68 5175 068 NO PAN NO NO YES 1. NO ADDRESS IS GIVEN. 2. NO PAN IS GIVEN. 3. NO RETURN IS FILED. 4. SIGNATURE NOT VERIFIABLE 5. NO RESPONSE TO THE ENQUIRY CONDUCTED BY A.O. 6. SOURCE IS NOT PROPERLY EXPLAINED. 16 INT. PAID TO DEPOSIT ORS 3049 2 3049 2 17 R.A. CORPOR ATION (PAGE 11 OF ASSESS MENT ORDER) 6F5 15000 000 7397 1500 7397 MATCH ES WITH COPY OF A/C YES/ NOT VERIFI ABLE NO YES YES 1. NO ADDRESS IS GIVEN. 2. PAN NOT VERIFIABLE. 3. NO RETURN IS FILED. 4. NO CONFIRMATION IS FILED. 5. ONLY LEDGER ACCOUNT FILED WHICH IS ALSO UNSIGNED. 18. H. NYALCH AND FIN. CO. (PAGE 11 OF ASSESS MENT ORDER) 21397 0 2139 7 TOTAL 1162 8258 38 ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 22 11. FROM THE SIDE OF ASSESSEE, LD. COUNSEL FOR THE ASSESSEE AGAIN RELIED UPON WHATEVER SUBMISSION FILED BEFORE THE CIT(A), H E DRAW OUR ATTENTION TO THE PAPER BOOK SUBMITTED DURING THE COURSE OF HEARING W HICH IS BEING CONSIDERED FOR DECIDING THE INDIVIDUAL CASH CREDITOR. (I) ALKA BAROT - THE ASSESSEE HAS SHOWN LOAN FROM ALKA BAROT AT RS . 5000/- FOR WHICH HE HAS DRAWN OUR ATTENTION ON PAGE NOS. 1 9 & 20. THE PAGE NO.19 IS A LEDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 3 1/03/98 A LOAN FROM ALKA BAROT OF RS. 5000/- THROUGH CHEQUE NO. 45644 IN ASS ESSEES ACCOUNT MAINTAINED WITH THE CATHOLIC SYRIAN BANK LTD. PAGE NO.20 IS A COPY OF RETURN FOR A.Y. 98-99 IN CASE OF ALKABEN JASHVANTLAL BRAHM BHATT. LD. A.R. CLAIMED THAT HE HAS DISCHARGED HIS ONUS AND PROVED THE CASE CREDITOR AS GENUINE. (II) ANAND JEWELLERS - THE ASSESSEE HAS SHOWN LOAN AT RS. 1,40,00,000/- FROM ANAND JEWELLERS. THE A.R. SUBMITTED CONFIRMAT ION AT PAGE NOS. 21 TO 25 AND 166 OF THE PAPER BOOK. PAGE NO. 21 IS THE COPY OF ACCOUNT FROM THE ASSESSEES BOOK OF ANAND JEWELLERS FOR THE PERIOD O F 01/04/97 TO 31/03/98 WHERE THIS LOAN INCLUDING INTEREST HAS BEEN REFLECT ED AT RS. 1,40,27,616/-. PAGE 22 IS A COPY OF RETURN OF M/S. ANAND JEWELLERS FOR A.Y. 98-99. PAGE 23 IS A COPY OF COMPUTATION OF INCOME. PAGE 24 IS A C OPY OF LIST OF DOCUMENTS ATTACHED AND DEPRECIATION CHART AND PAGE 25 AGAIN L EDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98. PAGE166 IS A COPY OF BALANCE SHEET AS ON 31.03.98 IN WHICH LOAN OF RS.1,40,27,616/- HAS BEEN SHOWN. (III) ANAND PROPERTY FINANCE LTD . - THE ASSESSEE HAS SHOWN LOAN AT RS.12,00,000/- FOR WHICH THE APPELLANT SUBMITTED TH E CONFIRMATION FROM PAGE ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 23 NOS. 26 TO 31 AND 153 TO 160 OF THE PAPER BOOK WHIC H REVEALS THAT ON PAGE 26 THERE IS UNSIGNED LEDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN WHICH RS. 12,00,000/- WITH INTEREST HAS BEEN SHOWN. PAGE 27 IS A COPY OF RETURN OF ANAND PROPERTY FINANCE LTD. FOR A.Y. 98-9 9 ON WHICH PAN HAS BEEN SHOWN APPLIED FOR. PAGE 28 TO 30 IS A COMPUTATION OF INCOME FOR A.Y. 98-99 AND PAGE 31 IS ANOTHER UNSIGNED RUNNING ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98. PAGE 153 TO 160 ARE COPIES OF BALANCE SH EET OF ANAND PROPERTY FINANCE LTD. FOR A.Y. 98-99 IN WHICH RS. 12,02,367/ - HAS BEEN SHOWN OUTSTANDING. (IV) GALAXY IMPEX - THE ASSESSEE HAS SHOWN A LOAN FROM GALAXY IMPEX A T RS. 1,14,00,000/-. THE APPELLANT HAS FILED THE CONFIRM ATION IN PAPER BOOK FROM PAGE NOS. 32 & 33 AND 161. PAGE 32 IS A SIGNED COP Y OF LEDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN WHICH CLOSING BALANCE HAS BEEN SHOWN AT RS. 1,14,40,000/-. PAGE 33 IS A COPY OF RETURN FOR A.Y. 98-99 OF SHRI RAMESH BHAI POPAT LAL SHAH. GALAXY IMPEX IS THE PR OPRIETY CONCERN OF SHRI SHAH RAMESHBHAI POPAT LAL WITH GIR NO. AND NO PAN N O. PAGE 161 OF PAPER BOOK IS A COPY OF BALANCE SHEET OF GALAXY IMP EX FOR THE F.Y. 97-98 IN WHICH LOANS OF RS.1,14,40,000/- GIVEN TO PARTH MER CANTILE INC (PROPRIETY CONCERN TO THE ASSESSEE) HAS BEEN SHOWN. (V) SONU EXIM (PARTNERSHIP FIRM) THE ASSESSEE HAS SHOWN LOAN FROM SONU EXIM AT RS. 29,60,00,000/- (WHICH WAS TYPOGRAP HICAL MISTAKE AND LOAN WAS ACTUALLY RS.2.96 CRORE) FOR WHICH ASSESSEE HAS FILED THE CONFIRMATION AT PAGE NOS. 34 TO 36, 44 TO 46 AND 162. PAGE 34 IS A SIGNED COPY OF LEDGER ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 24 ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN W HICH LOAN OF RS.2,96,00,000/- HAS BEEN SHOWN IN THE NAME OF PART H MERCANTILE INC. AND THE SAME AMOUNT HAS BEEN CARRIED FORWARD IN CLOSING BAL ANCE AS ON 31.03.98. PAGE 35 IS A COPY OF RETURN FOR A.Y. 98-99 WITHOUT PAN. PAGE NO.36 IS A COPY OF COMPUTATION OF INCOME FOR A.Y. 98-99. PAGE NO.1 62 IS UNSIGNED BALANCE SHEET OF SONY EXIM FOR A.Y. 98-99 AS ON 31.03.98 IN WHICH PARTH MERCANTILE INC. HAS SHOWN THE LIABILITY SIDE OF BALANCE SHEET RS. (-)2,96,00,000/-. (VI) TUSHARBHAI K. SHAH - THE ASSESSEE HAS SHOWN A LOAN AT RS. 1,05,00,000/- FOR WHICH THE APPELLANT HAS FILED THE CONFIRMATION IN PAPER BOOK AT PAGE NOS. 37 TO 39. PAGE 37 IS UNSIGNED COPY OF ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN WHICH LOAN AT RS. 1,05,00,0 00/- HAS BEEN SHOWN TO ATLAS JEWELLERS (PROPRIETY CONCERN TO THE ASSESSEE) WHICH HAS SHOWN OUTSTANDING AS ON 31.03.98. PAGE 38 IS COPY OF RET URN OF SHRI TUSHARBHAI K. SHAH FOR A.Y. 98-99. (VII & XV) SPEEDWELL PROPERTIES LTD . - THE ASSESSEE HAS SHOWN THE LOANS OF RS. 75,000/- & RS. 6,55,000/- FROM SPEEDWELL PROPER TIES LTD. FOR WHICH THE ASSESSEE HAS FILED EVIDENCE OF CONFIRMATION AT PAGE NOS. 40 TO 43 AND 172 TO 185. PAGE 40 IS A SIGNED COPY OF LEDGER ACCOUNT FO R THE PERIOD OF 01/04/97 TO 31/03/98 IN WHICH RS. 70,000/- HAS BEEN GIVEN TO AT LAS JEWELLERS (PROPRIETY CONCERN TO THE ASSESSEE) AND THE SAME AMOUNT HAS BE EN SHOWN OUTSTANDING AS ON 31.03.98. PAGE NO.41 IS A COPY OF RETURN FIL ED BY THE CASH CREDITOR FOR A.Y. 98-99 ON WHICH PAN APPLIED FOR MENTIONED. PAG E NOS. 42 & 43 ARE THE COMPUTATION OF INCOME FOR A.Y. 98-99. PAGE NOS. 17 2 TO 185 ARE COPIES OF ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 25 BALANCE SHEET ALONG WITH ANNEXURES ON PAGE 176 IN S CHEDULE-8. THE CURRENT ASSETS LOAN AND ADVANCES RECEIVABLE IN SCHEDULE 8 A T PAGE 181 HAS BEEN SHOWN AT RS.1,40,86,648/- BY SPEEDWELL PROPERTIES L TD. IN WHICH THE ASSESSEES NAME HAS NOT BEEN REFLECTED WHEREAS PAGE 40 SHOWS THE OUTSTANDING BALANCE AS ON 31.03.98 IN THE NAME OF A TLAS JEWELLERS (PROPRIETY CONCERN TO THE ASSESSEE) AT RS.70,000/-. RS. 6.5 L AKH WAS NOT LOAN TAKEN BY THE ASSESSEE BUT LOAN ADVANCED BY HIM WHICH HAS BEE N ACCEPTED BY THE A.O. OF M/S. SPEEDWELL PROPERTIES LTD. (VIII) PRAFUL L. SHAH THE ASSESSEE HAS SHOWN A LOAN FROM PRAFUL L. SHA H AT RS. 50,00,000/- FOR WHICH THE ASSESSEE HAS FILED CO NFIRMATION AT PAGE NO.47 TO 50. PAGE 47 IS A COPY OF RETURN FOR A.Y. 98-99 ON WHICH GIR NO. MENTIONED NOT PAN NO. PAGE 48 TO 49 ARE COPIES OF COMPUTATIO N OF INCOME AND PAGE NO. 50 IS A SIGNED LEDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN WHICH LOAN OF RS. 50 LACS HAS BEEN SHOWN IN THE NAM E OF ATLAS JEWELLERS AND CLOSING BALANCE AS ON 31.03.98 AT RS. 51,77,534/- H AS BEEN SHOWN ALONGWITH INTEREST. (IX, X & XI) HEMENDRA L. SHAH THE ASSESSEE HAS SHOWN LOANS AT RS. 2 LACS, RS. 73,54,30,900/- & RS. 99,18,000/-. THE AP PELLANT FILED THE CONFIRMATION AT PAGE NOS. 54 TO 57, 60 TO 64, 66 TO 92, 116 TO 118 & 167 TO 169. PAGE 54 IS A COPY OF RETURN FOR A.Y. 98-99 IN WHICH PAN IS MENTIONED. PAGE NOS. 55 TO 57 ARE COPIES OF COMPUTATION OF INC OME. PAGE 60 TO 64 ARE SIGNED RUNNING COPY OF LEDGER ACCOUNT OF INTEREST A CCOUNT OF SHRI HEMENDRA L. SHAH FOR THE PERIOD OF 01/04/97 TO 31/03/98. PAGE 6 6 TO 89 ARE COPIES OF ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 26 UNSIGNED RUNNING LEDGER ACCOUNT FOR THE PERIOD OF 0 1/04/97 TO 31/03/98 IN THE NAME OF PARTH MERCANTILE INC IN WHICH CLOSING BALAN CE HAS SHOWN RS.77,53,81,001/- AS ON 31-03-98. PAGE 90 IS A COPY OF UNSIGNED LEDGER ACCOUNT IN THE NAME OF MANOJ C. BRAHMBHATT IN WHICH LOAN OF RS. 2 LACS HAS BEEN SHOWN AND CLOSING BALANCE HAS BEEN SHOWN NIL. PAGE 91 AND 92 ARE COPIES OF RUNNING LEDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN THE NAME OF ATLAS JEWELLERS IN WHICH OUTSTANDING BALANC E HAS BEEN SHOWN AT RS. 99,18,000/-. PAGES 116 TO 118 ARE COPIES OF SCRUTI NY ASSESSMENT ORDER IN CASE OF SHRI HEMENDRA L. SHAH FOR A.Y. 98-99. PAGE NOS. 167 TO 169 ARE COPIES OF BALANCE SHEET OF SHRI HEMENDRA L. SHAH AS ON 31.03.98 IN WHICH THE OUTSTANDING LOAN BY SHRI HEMENDRA L. SHAH HAS S HOWN IN THE NAME OF ATLAS JEWELLERS AT RS.99,18,000/- WHEREAS IN THE NA ME OF PARTH MERCANTILE INC. AT RS. 77,53,81,001/- WHICH INCLUDES INTEREST OF RS.3,99,50,101/-. (XII & XIII) PINKY CORPORATION (PROPRIETORY CONCERN OF SHRI HEMENDRA L. SHAH) THE ASSESSEE HAS SHOWN LOAN OF RS. 84 LACS AND RS. 50 LACS FROM PINKY CORPORATION FOR WHICH THE CONFIRMATION A T PAGE NOS. 51 TO 53 & 170 OF PAPER BOOK HAVE BEEN GIVEN BY THE ASSESSEE. PAG E NO.53 IS A COPY OF UNSIGNED LEDGER ACCOUNT IN THE NAME OF PINKY CORPOR ATION FOR THE PERIOD OF 01/04/97 TO 31/03/98 IN WHICH THE LOAN OF RS.84 LAC S HAS BEEN SHOWN IN THE NAME OF ATLAS JEWELLERS. HE REFLECTED LOAN OF RS. 84 LACS AND RS. 50 LACS IN THE NAME OF ATLAS JEWELLERS AND CLOSING BALANCE AS ON 31.03.98 HAS BEEN SHOWN AT RS. 1,34,00,000/- AT PAGE 170. PAGE 51 IS A COPY OF RETURN OF SHRI RAMESHCHANDRA L. SHAH FOR A.Y. 98-99 ON WHICH PAN H AS BEEN MENTIONED. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 27 (XIV) VIDHI CORPORATION THE ASSESSEE HAS SHOWN LOAN OF RS.50 LACS FROM VIDHI CORPORATION (PROPRIETY CONCERN OF SHRI HEMEND RA L. SHAH) FOR WHICH CONFIRMATION IN PAGE NOS. 58 & 59 AND 93 TO 96 HAVE BEEN SUBMITTED BY THE ASSESSEE. PAGE 58 & 59 ARE COPIES OF INTEREST RUNN ING LEDGER ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98. PAGE 93 TO 96 ARE A RUNNING COPIES OF ACCOUNT FOR THE PERIOD OF 01/04/97 TO 31/03/98 OF PARTH MER CANTILE INC. WHERE TOTAL OUTSTANDING LOAN OF RS.21,59,23,912/- HAS BEEN SHOW N. THE ASSESSEE HAS NOT VERIFIED ON WHAT DATE OF LOAN OF RS. 50 LAKHS H AD BEEN ACCEPTED. THEREFORE, THE A.O. IS DIRECTED TO VERIFY THE LOAN WITH REFERENCE TO ADDITION MADE IN ASSESSMENT ORDER. (XVI) INTEREST PAID TO DEPOSITORS:- ON PAGE 14 PARA 21 OF THE ASSESSMENT ORDER, THE A.O. HAS DISALLOWED THE INTEREST ON TEN CASH CREDITORS WHICH WERE FOUND NON GENUINE IN A.Y. 97-98. THE ASSESSEE FILE D APPEAL FOR A.Y. 97-98 BEFORE THE CIT(A) WHO HAS DELETED THE ADDITION VIDE HIS ORDER DATED 18.04.2002 AND CONFIRMED THE ADDITION IN CASE OF JI GAR B. DESAI AND VINOD PRAJAPATI. THEREFORE, THE CIT(A) HAS CONFIRMED THE INTEREST DISALLOWANCE TO THE TUNE OF RS.3304/- FOR THE ABOVE TWO CASH CREDIT ORS. THE REMAINING INTEREST AMOUNT HAS BEEN ALREADY BEEN ALLOWED BY THE CIT(A) IN THE ABOVE CITED ORDER. (XVII) R.A. CORPORATION (PROPRIETORY CONCERN OF SHRI HMENDRA L. SHAH)- THE ASSESSEE HAS TAKEN LOAN OF RS.1.5 CRORES FROM R.A. CORPORATION FOR WHICH THE ASSESSEE HAS FILED THE CONFIRMATION AT PAGE 65 OF T HE PAPER BOOK WITH PAN NO. AND 1.5 CRORE LOAN HAS BEEN REFLECTED IN THE NA ME OF PARTH MERCANTILE INC. ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 28 WHICH HAS BEEN REPAID DURING THE YEAR AND BALANCE S HOWN NIL. BUT INTEREST AMOUNT HAS NOT REFLECTED. (XVIII) H. NYALCHAND FIN. CO .- THE ASSESSEE HAS SHOWN A LOAN OF RS. 21,397/- FROM H. NYALCHAND FIN. CO. FOR WHICH NO CO NFIRMATION HAS BEEN FILED. 12. WE HAVE GONE THROUGH THE ORDER OF THE AUTHORITI ES BELOW AS WELL AS SUBMISSION MADE BY THE LD. C.I.T D.R. AS WELL AS AS SESSEES REPLY DATE 25.06.2012 WITH REGARD TO LOAN TAKEN FROM ALKA BARO T, ANAND JEWELLERS, ANAND PROPERTY, GALAXY IMPEX, SONU EXIM, TUSHAR K. SHAH, PRAFUL L. SHAH, HEMENDRA L. SHAH, PINKY CORPORATION (PROPRIETY OF H EMENDRA L. SHAH), R.A. CORPORATION, THE ASSESSEE HAD SUBMITTED THE CONFIRM ATION AND PAYMENTS ARE ACCOUNT PAYEE CHEQUES, THEREFORE, THE ASSESSEE HAS DISCHARGED HIS PRIMARY ONUS TO PROVE THE GENUINENESS OF TRANSACTION, IDENT ITY OF PERSON IN ABOVE CASH CREDITORS. THEREFORE, THE CIT(A) WAS RIGHT IN DELE TING ADDITION IN ABOVE CASH CREDITORS. IN CASE OF SPEEDWELL PROPERTIES LTD. TH E LOAN OF RS. 6.5 LACS WAS ACTUAL ADVANCE FROM THE ASSESSEE TO THE COMPANY NOT LOAN WHICH HAS BEEN CONFIRMED BY THE CONCERNED A.O. OF COMPANY AND THE SAME HAS BEEN REFLECTED AS A LIABILITY IN THE BALANCE SHEET IN TH E COMPANY FOR A.Y. 98-99. REGARDING LOAN OF RS.70,000/- INCLUDING INTEREST, T HERE IS A CONFIRMATION AT PAGE 40 BY THE COMPANY WHICH HAS BEEN SHOWN OUTSTAN DING LIABILITY OF THE COMPANY FOR A.Y. 98-99. BUT, THIS AMOUNT HAS NOT B EEN SHOWN AS DEBTORS BY THE COMPANY. CASH CREDIT OF RS.70000/- IN CASE OF SPEEDWELL PROPERTIES LTD. INCLUDING INTEREST HAS NOT BEEN DISCLOSED BY THE CA SH CREDITOR IN ITS BALANCE SHEET. NO CONFIRMATION IN CASE OF H. NYALCHAND FIN ANCE COMPANY OF ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 29 RS.21,397/-. THEREFORE, (70000 + 21397) ADDITION O F RS. 91397/- IS CONFIRMED BY THE CIT (A), IS JUSTIFIED. BUT INTEREST AMOUNT IN CASE OF GALAXY IMPEX OF RS.462615/-, IN CASE OF SONU EXIM OF RS.2335561/-, IN CASE OF TUSHARBHAI K. SHAH OF RS.859562/-, IN CASE OF HEMENDRA L. SHAH OF RS.362548/-, IN CASE OF PINKY CORPORATION OF RS.463956/- & RS.175068/-, IN CASE OF VIDHI CORPORATION RS.175068/- IN CASE OF R.A. CORPORATION RS.7397/-. THE EXPLANATIONS ARE NOT VERIFIED FROM THE COPY OF ACCOUNTS. THEREFORE, THE A.O. IS DIRECTED TO VERIFY THE ABOVE INTEREST, WHICH ARE CLAIMED BY THE ASSESSEE A S EXPENSES. THE LOAN SHOWN FROM VIDHI CORPORATION IS ALSO REQUIRED TO VE RIFY AS PER FINDINGS ON PAGE 27. 13. GROUND NOS. 5, 6 & 7 ARE AGAINST DELETION OF R S.1,72,17,951/- ON ACCOUNT OF BANK CHARGES AND COMMISSION. THE A.O. OBSERVED AT PAGE 16 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS DEBITED COMM ISSION OF BANK CHARGES OF RS.1,72,17,951/-. THE JUSTIFICATION OF THIS EXP ENSE WAS ASKED FOR BY THE A.O. BUT NO REPLY WAS FILED DURING THE COURSE OF AS SESSMENT PROCEEDING. HE, THEREFORE, MADE THE ADDITION OF RS.1,72,17,951/-. 14. BEING AGGRIEVED BY THE ORDER OF A.O., THE ASSES SEE WAS BEFORE CIT(A). THE CIT(A) OBSERVED ON PAGE 23 IN PARAGRAPH 7.2 WHI CH IS REPRODUCED AS UNDER:- 7.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHO RISED REPRESENTATIVE CAREFULLY AND HAVE GONE THROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. I FIND THAT THE APPELLANT HAS FURNISHED THE BANK STATEMENT AND THE BANK ADVICE FR OM INDUSLND BANK TO WHOM SUCH BANK CHARGES HAVE BEEN PAID. THE APPE LLANT HAS FILED DETAILS OF BANK CHARGES AND COMMISSION AS PER PAGES 78-79 OF PAPER ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 30 BOOK FILED. THE SAME HAS BEEN PAID TO INDU SIND BA NK LTD., MADHUPURA MERCANTILE CO.OP.BANK, RELIEF MERCANTILE CO.OP.BANK LTD. AND MAJOR AMOUNTS PAID TO INDU SIND BANK LTD. OF RS.1,60,70,6 58/- AND RS.33,68,637/-. THE APPELLANT HAS FILED TRANSACTIO N HISTORY SUMMARY FOR PAYMENT OF RS.1,60,70,658/- AND A COPY OF DEBIT ADV ICE FOR RS.33,68,637/- FROM INDU SIND BANK LTD. AS PER PAGE S 78-82 OF PAPER BOOK. I FIND THAT THE APPELLANT WAS DOING FINANCIN G BUSINESS IN THE NAME OF PARTH MERCANTILE INC. AND AS PER THE PROFIT & LO SS ACCOUNT OF PARTH MERCANTILE INC. FILED BY THE APPELLANT ALONGWITH TH E RETURN OF INCOME AS AGAINST THE ABOVE PAYMENT OF BANK CHARGES AND COMMI SSION, THE APPELLANT HAS SHOWN INTEREST INCOME OF RS.5,71,56,9 57/- AND NET PROFIT FROM PARTH MERCANTILE INC. HAS BEEN SHOWN AS RS.71, 562/-. AS THE APPELLANT HAS FURNISHED BANK STATEMENTS AND HAS PRO VED INCURRING OF THE SAID EXPENDITURE AND CORRESPONDING INTEREST REC EIPTS HAVE BEEN ADMITTED, THE SAME IS ALLOWED AS BUSINESS EXPENDITU RE AND THE ADDITION OF RS. 1,72,17,951/- IS DELETED. 15. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD . CIT D.R. CONTENDED THAT THE ASSESSEE HAS NOT JUSTIFIED THE PURPOSE OF EXPENSES WITH EVIDENCE BEFORE THE A.O. FROM THE ASSESSEE SIDE, SHRI ASEEM THAKKAR (CA) RELIED UPON THE ORDER OF THE CIT(A) AND REQUESTED TO CONFI RM THE ORDER OF CIT(A). HE HAS ALSO DRAWN OUR ATTENTION ON PAGE 18 OF HIS REPL Y AT PARAGRAPH NO.22.2 WHICH IS REPRODUCED AS UNDER:- 22.2 THE LD. CIT(A) WHILE DELETING THE ADDITION HA S MADE RELEVANT DISCUSSION IN PARA 7 AND PAGE 22 OF HIS ORDER. IT WAS POINTED OUT THAT THE RESPONDENT VIDE HIS LETTER DATED 14-03-2002 HAD FURNISHED THE COPIES OF THE BANK STATEMENTS AND BANK ADVICE FROM INDUSIND BANK TO WHOM SUCH BANK CHARGES /COMMISSION HAD BEEN PAID. VARIOUS DOCUMENTS IN SUPPORT OF THE EXPENDITURES CLAIMED WE RE FURNISHED WHICH ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 31 HAVE ALSO BEEN PLACED ON PAGE 97 TO 101 OF THE PAPE R BOOK. THE COPY OF ACCOUNTS, TRANSACTION HISTORY, THE VOUCHERS OF T HE BANK ETC. ARE ENCLOSED THEREIN. THE LD. CIT(A) HAS ALSO IN PARA 7.2 AND PAGE 23 OF THE ORDER GIVEN A CATEGORICAL FINDING THAT THE APPE LLANT WAS DOING FINANCIAL BUSINESS IN THE NAME OF PARTH MERCANTILE INC. THE RESPONDENT HAD SHOWN INTEREST INCOME OF RS.5,71,56,957/-. THE RE IS A NET PROFIT OF RS.71,562 WHICH HAS BEEN DULY ASSESSED BY THE A.O. THE EXPENDITURE BEING COMPLETELY RELATED TO THE BUSINESS ACTIVITIES THE DISALLOWANCE SO MADE HAS BEEN DELETED. LD. CIT(A) HAD ALLOWED THE BANK CHARGES AND COMMISS ION AS PER PAGES 78 TO 82 AND BANK CHARGES PAYMENTS WERE TO INDUSLND BANK BUT ON VERIFICATION OF PAPER BOOK SUBMITTED BEFORE US THE PAGE NOS. 78 & 7 9 ARE THE COPY OF RUNNING LEDGER ACCOUNT OF SHRI HEMENDRA L. SHAH WITH INDUSL ND BANK FOR THE PERIOD OF 29.11.97 TO 04.12.97 IN WHICH NO COMMISSION / BANK CHARGES DEBITED AND NOT PERTAINED TO THE ASSESSEE. BUT, AS PER REPLY OF AS SESSEE PAGE NOS. 97 AND 98 ARE THE COPY OF BANK CHARGES IN THE NAME OF PARTH M ERCANTILE INC. ON VERIFICATION OF THIS ACCOUNT RS.3368637.65 IS DEBI TED BY INDUSLND BANK ON ACCOUNT OF INTEREST VIDE LETTER DATED 14.03.2012 AT PAGE NO.101 OF PAPER BOOK. RS.16070658.85/- IS DEBITED INTEREST IN CURRENT ACC OUNT NO. 0009-353315-050 IN THE NAME OF PARTH MERCANTILE INC. IN INDUSLND BA NK WHICH HAS BEEN DEBITED IN THE BANK CHARGES AND COMMISSION ACCOUNT. BOTH T HE DEBIT ENTRIES AS MENTIONED ABOVE PERTAINED TO INTEREST NOT BANK CHAR GES AND COMMISSION. THERE ARE CREDIT ENTRIES IN THIS ACCOUNT OF RS.2235 61.64/- AND RS.2011257.11/-. THUS, HARDLY RS.13474/- HAS SHOWN ON ACCOUNT OF BANK CHARGES AND COMMISSION. THE CIT(A) HAS NOT GIVEN A NY OPPORTUNITY TO THE ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 32 A.O. BEFORE ADMITTING THE EVIDENCE. THEREFORE, THE CIT(A) WAS NOT JUSTIFIED IN ALLOWING EXPENSES. ACCORDINGLY THIS ISSUE IS SET A SIDE TO THE A.O. 16. GROUND NOS. 8, 9 & 10 ARE AGAINST THE DELETION OF ADDITION OF RS.19,24,117/- MADE ON ACCOUNT OF BILLS DISCOUNTING CHARGES. THE A.O. FOUND BILLS DISCOUNTING CHARGES OF RS.19,24,117/- PAID TO BANK BUT WHICH HAS NOT BEEN EXPLAINED BY THE ASSESSEE WITH EVIDENCE AT THE TIME OF ASSESSMENT . THEREFORE, HE MADE THE ADDITION OF RS.19,24,117/- I N THE INCOME OF THE ASSESSEE. 17. THE ASSESSEE WAS IN APPEAL ON THIS ISSUE BEFORE LD. CIT(A) WHO HAS CONSIDERED THIS ISSUE AND ALLOWED THE APPEAL IN FAV OUR OF THE ASSESSEE ON PAGE 24 OF THE APPEAL ORDER IN PARAGRAPH 8.2, WHICH IS REPRODUCED AS UNDER:- 8.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHO RISED REPRESENTATIVE CAREFULLY AND HAVE GONE THROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE DIS COUNTING CHARGES HAVE BEEN PAID TO VISNAGAR NAGRIK SAHAKARI BANK LTD . I FIND THAT THE DISCOUNTING CHARGES WERE RELATED TO PROPRIETARY CON CERN M/S. ATLAS JEWELLERS WHO WAS DOING BUSINESS OF BULLION AND JEW ELLERY AND THE APPELLANT HAD ALREADY SHOWN SALES OF RS.12,07,25,00 0/- FROM BUSINESS OF BULLION. THEREFORE, AS THE PROFIT HAS BEEN EARN ED BY THE APPELLANT FROM THE JEWELLERY, THE BANK CHARGES AND COMMISSION PAYMENT SHOULD BE HELD AS BUSINESS EXPENDITURE. I FIND THAT BILL DISCOUNTING CHARGES OF RS.19,24,117/-, ARE REVENUE BUSINESS EXPENSES AND H AVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS: I FIND FROM T HE PROFIT & LOSS ACCOUNT OF M/S. ATLAS JEWELLERS FILED ALONGWITH THE RETURN OF INCOME THAT THE APPELLANT HAS SHOWN GROSS PROFIT FROM TRADING O F T.T. GOLD BARS AS RS.25,24,780/- AGAINST WHICH THE APPELLANT HAS CLAI MED THE ABOVE BILL DISCOUNTING CHARGES AND L.C. OPENING CHARGES OF 5,9 3,331/- AND NET ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 33 PROFIT OF ATLAS JEWELERS HAS BEEN SHOWN AS RS.65,86 0/- WHICH HAS BEEN INCLUDED IN THE INCOME RETURNED BY THE APPELLANT. THEREFORE, THE SAID EXPENDITURE OF DISCOUNTING CHARGES IS HELD TO BE RE VENUE EXPENDITURE ALLOWABLE U/S.37 OF THE I.T. ACT. AS CORRESPONDING INCOME HAS BEEN REFLECTED IN THE P&L ACCOUNT. ACCORDINGLY, THE ADD ITION OF RS.19,24,117/- MADE BY THE ASSESSING OFFICER IS HER EBY DELETED. 18. NOW THE REVENUE IS BEFORE US. THE CIT D.R. VEH EMENTLY RELIED UPON THE ORDER OF THE A.O. AND THE COUNSEL FOR THE ASSES SEE IS RELIED ON THE ORDER OF THE CIT(A). HE ALSO FILED WRITTEN REPLY ON THIS IS SUE, WHICH IS REPRODUCED AS UNDER:- 23 GROUND NO.8 RELATES TO THE ADDITION OF RS.19,24 ,117/- TOWARDS ALLEGED CLAIM OF BILL DISCOUNTING CHARGES. THE REL EVANT DISCUSSION HAS BEEN MADE IN PARA 27 AND PAGE 16 OF THE ASSESSMENT ORDER. THE A.O. STATED THAT ON ENQUIRY WITH THE RESPONDENT AND VERI FICATION OF HIS RETURN, IT IS NOT PROVED AS TO WHY THE DISCOUNTING CHARGES WERE PAID TO THE BANK AND WHAT WAS THE INCOME EARNED BY THE APPELLANT. I T HAS ALSO BEEN STATED INSPITE OF REPEATED REQUESTS ONLY THE COPY O F ACCOUNT AND NO OTHER EVIDENCES HAS BEEN FURNISHED. 23.1 THE LD. CIT(A) IN PARA 8 AND PAGE 23 OF THE OR DER HAS REFERRED TO SUBMISSION MADE BY THE RESPONDENT. THE VARIOUS EVI DENCES WHICH HAVE BEEN FURNISHED IN SUPPORT IF THE CLAIM MADE AR E PLACED ON PAGE 102 TO 113 OF THE PAPER BOOK. THE DOCUMENTS IN SUP PORT OF THE CLAIM OF EXPENDITURE MADE ARE IN THE NATURE OF XEROX COPY OF THE INVOICES, XEROX COPY OF THE LETTER ISSUED BY THE BANK, XEROX COPY O F THE LETTER OF CREDIT ISSUED BY THE BANK AND XEROX COPY OF THE BANK STATE MENTS WHERE LCS HAVE DISCOUNTED. 23.2 THE LD CIT IN PARA 8.2 OF HIS ORDER HAS GIVEN CATEGORICAL FINDING WITH DISCOUNTING CHARGES RELATED TO THE PROPRIETORY CONCERNS OF M/S ATLAS JEWELLERS. THE AFORESAID WAS DOING BUSINESS OF BULLION JEWELLERY ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 34 AND TURNOVER OF RS.12.07 CRORE (APROX.) HAD BEEN SH OWN. IN FACT, THE A.O. HAS ALSO CLEARLY STATED THAT THE APPELLANT HAS SHOWN GROSS PROFIT OF RS.25.25 LACS AGAINST WHICH THESE EXPENSES HAVE CLA IMED. THE A.O. IN PAGE 1 ON THE ASSESSMENT ORDER HIMSELF HAS ACCEPTED THAT THE G/P DISCLOSED AT THE RATE OF 2.092% IN THE CASE OF ATLA S JEWELLERY, PROPRIETORY CONCERNS OF THE RESPONDENT IS REASONABL E IN THIS LINE OF BUSINESS. THIS WAS THE EXPENDITURE OF BUSINESS AND PROFITABILITY IS ALSO FOUND TO BE ACCEPTABLE THE LD. CIT(A) HAS RIGHTLY D ELETED THE ADDITION. THE ASSESSEE HAS DRAWN OUR ATTENTION ON PAGE NOS. 1 02 TO 113 WHICH ARE THE COPIES OF ACCOUNT OF DISCOUNTING CHARGES FOR RS.19, 24,117/-. ON PAGE 102, THE ASSESSEE HAS GIVEN DETAILS OF DISCOUNTING CHARG ES AND CLAIMED THAT TOTAL TURN OVER WAS RS. 12.07 CRORE AND GROSS PROFIT WAS AT RS.25.25LACS. THE BILLS DISCOUNTING CHARGES WERE PERTAINED TO BANKS. THE L D. CIT(A) HAS NOT GIVEN ANY OPPORTUNITY TO THE A.O. BEFORE ALLOWING THE EXP ENSES. THEREFORE, HE WAS NOT JUSTIFIED IN ALLOWING THE EXPENSES. THE MATTER IS SET ASIDE TO THE A.O. C.O. NO. 74/AHD/2004 19. THE ASSESSEE HAS FILED C.O. FOR THE SAME ASSESS MENT YEAR AGAINST THE CONFIRMATION OF ADDITION OF RS.21,397/- CASH CREDIT RECEIVED FROM H. NYALCHAND FINANCE COMPANY, RS.70,656/- FROM SPEEDWELL PROPERT IES LTD. AND RS.30,492/- BEING INTEREST PAID ON THESE TWO DEPOSI TS. THE RELEVANT FINDINGS FOR LOANS IN THE NAME OF H. NYALCHAND FINANCE COMPA NY AND SPEEDWELL PROPERTIES LTD. HAVE BEEN GIVEN IN PRECEDING PARAS IN APPEAL FILED BY THE REVENUE. IN BOTH THE CASES, THE ADDITION HAS BEEN CONFIRMED BY THE CIT(A) WHICH IS NOT PERVERSE. RS.30,492/- IS INTEREST ON TEN CASH CREDITORS WHICH ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 35 WERE HELD NON GENUINE FOR A.Y.97-98. THE DETAILED FINDINGS HAVE BEEN GIVEN IN PRECEDING PARAS IN WHICH APPEAL IS PARTLY ALLOWE D. 19. IN THE COMBINED RESULT, THE REVENUES APPEAL I S PARTLY ALLOWED AND THE ASSESSEES C.O. IS ALSO PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * < STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 04, 05, 06 & 09.07.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 10.07.2012 4) DATE OF CORRECTION ,, ,, 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 13.07.2012 7) ORDER UPLOADED ON 13.07.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 13.07.2012 ITA NO. 565/AHD/03 & C.O.NO.74/AHD/04 & A.Y.98-99 PAGE 36