ACIT, Jaipur V. MACRO TOWNSHIP PVT. LTD., Jaipur

ITA 1057/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2037 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: S R SHARMA; R K BHATRA CA DHK
• Keywords: Unexplained cash credit; Principle of natural justice; Source of fund; Additional evidence; Corroborative evidences
• Section: 142(1); 133A; 68; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHAR AT, JM VK;DJ VIHY LA-@ ITA NO. 1057/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2013-14 THE ACIT CENTRAL CIRCLE-1 JAIPUR CUKE VS. M/S. MACRO TOWNSHIP PVT. LTD 28-289, MAHAVEER NAGAR, DURGAPURA JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAHCM 8947 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY:SHRI VARINDER MEHTA, CIT - DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.R. SHARMA AND SHRI R.K. BHATRA, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/09/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27 /09/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-4, JAIPUR DATED 14-09-2016 FOR THE ASSESSM ENT YEAR 2013-14 RAISING THEREIN FOLLOWING GROUNDS:- (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS RIGHT IN ENTERTAINING ADDITIONAL EV IDENCE U/S 46A OF THE I.T. RULES WHEREIN THE FACT IS THAT DURING THE ASSESSMEN T PROCEEDING SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO PROVE THE GENUINENESS, IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 2 (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF R S. 4,24,29,000/-MADE BY THE AO U/S 68 OF THE I.T. ACT, 1961. 2.1 APROPOS GROUND NO. 1 AND GROUND NO. 2 OF THE RE VENUE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- (GROUND NO. 1 ADDITIONAL EVIDENCE U/R 46A) 2.1.3 I HAVE DULY CONSIDERED AO'S REMAND REPORT, ASSESSEES SUBMISSION AND REJOINDER FILED. IT IS SUBMITTED THAT THE AO IN HURRIED MANNER AS CASE WAS GETTING BARRED BY LIMITATION IN MARCH, 2015, ALLOWED VERY S HORT TIME WHILE REQUIRING ASSESSEE TO PRODUCE SUPPORTING EVIDENCE/DOCUMENTS REGARDING LOANS. IN COMPLIANCE, ASSESSEE FILED CONFIRMATIONS FROM LOAN CREDITORS DU RING ASSESSMENT PROCEEDINGS, HOWEVER COPY OF ITR, BANK STATEMENTS AND COPY OF BALANCE SHEET ETC. OF LOAN C REDITORS WERE NOT BEING RECEIVED FROM LOAN CREDITORS DESPITE REQUESTS BY ASSESSEE. THE ADDITIONAL EVIDENCES SO FILED FOR THE FIRST TIME DURING THE APPELLATE PROCEEDING, ARE VITAL AND OF PRIME IMPORTANCE FOR ADJUDICATION OF THIS APPEAL. IT IS P ERTINENT TO MENTION HERE THAT A.O. ISSUED SHOW CAUSE LETTERS TO LOAN CREDITORS ON 17/3/2015, HOWEVER THEY COULD NOT COMP LY WITHIN STIPULATED DEADLINE, ACCORDINGLY A.O. PASSED THE ORDER ON 31/3/2015. NOW I FIND THAT THERE ARE SUFFICIENT REASONS BEYOND THEIR CONTROL WHICH PREVENTED FROM PLACING T HOSE DOCUMENTARY EVIDENCES BEFORE THE A.O. DURING ASSESS MENT PROCEEDING. AS, A VERY SHORT TIME WAS ALLOWED FOR COMPLIANCE, IT IS ALSO SUBMITTED THAT DURING THE ST IPULATED TIME, THE REQUIRED DOCUMENTS/DETAILS FROM AVAILABLE LOAN CREDITORS COULD NOT BE RECEIVED, BUT NONE OF THE RE MAINING LOAN CREDITORS COULD FILE TO A.O. OR SEND TO THE AS SESSEE COMPANY SAID REQUIRED DOCUMENTS ETC. THEREFORE, ASS ESSEE WAS PREVENTED WITH SUFFICIENT CAUSE TO ADDUCE REQUI RED EVIDENCES BEFORE THE A.O. IN ALLOWED TIME. NOW, VID E ADDITIONAL EVIDENCES UNDER RULE 46A ASSESSEE FILED DOCUMENTARY EVIDENCES PERTAINING TO IMMEDIATE SOURC E OF FUND, IDENTITY OF CREDITORS, CREDITWORTHINESS OF LO AN CREDITORS ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 3 & GENUINENESS OF TRANSACTIONS, THEREFORE, FOR THE S AKE OF ADJUDICATION AND DULY FOLLOWING THE PRINCIPLES OF N ATURAL JUSTICE, THESE EVIDENCES ARE ALLOWED TO BE PLACED O N RECORD U/R 46A OF THE I.T. RULES... GROUND NO. 2 DELETION OF ADDITION OF RS. 4,24,29,000/ MADE BY THE AO U/S 68 OF THE ACT. 3.1.2 I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSION AND CAREFULLY GONE THROUGH ASSESSMENT ORDER. I HAVE ALSO TAKE A NOTE OF FACTUAL MATRIX OF THE CASE AS WELL A S APPLICABLE CASE LAWS RELIED UPON. A.R. OF THE ASSESSEE ALSO RE FERRED ENCLOSED DOCUMENTS FROM THE PAPER BOOK TO SUPPORT H IS CONTENTION THAT BURDEN UPON THE ASSESSEE TO PROVE T HE GENUINE CREDITS HAVE BEEN DISCHARGED. IT IS WELL SE TTLED LAW THAT BURDEN IS UPON THE ASSESSEE U/S 68 OF THE I.T. ACT, 1961 TO PROVE IDENTITY OF THE CREDITORS, THEIR CREDITWOR THINESS AND GENUINENESS OF THE TRANSACTION. HERE I FIND THAT IN THIS CASE, THE ASSESSEE HAS FILED DOCUMENTARY EVIDENCES TO SUP PORT THE GENUINENESS OF THE CREDITS. FURTHER ON CAREFUL PERU SAL OF THE ASSESSMENT ORDER AND REMAND REPORT SUBMITTED BY THE AO, IT IS SEEN THAT THE AO HAS NOT BEEN ABLE TO SHOW THAT THE ASSESSEE HAD MADE NO EFFORTS TO PRODUCE RELEVANT DE TAILS OF LOAN CREDITORS OR CREDITORS BEFORE THE AO. IN THIS CASE, TRANSACTIONS WERE THROUGH CHEQUES WHICH ARE EASILY AVAILABLE FROM THE BANK STATEMENTS PRODUCED IN THE REMAND PROCEEDINGS. THERE ARE SUFFICIENT CAUSES FOR NOT FU RNISHING THE RELEVANT DETAILS BEFORE THE AO DURING THE ASSES SMENT PROCEEDING. THE ADDITIONAL EVIDENCES PRODUCED IN TH E REMAND PROCEEDINGS U/R 46A OF THE I.T. RULES, 1962 HAVE ALREADY BEEN ADMITTED. THE DETAILS SO FURNISHED BY THE ASSESSEE TO PROVE ITS CONTENTIONS ARE AS UNDER:- SHRI DEEPENDRA SINGH (I) PHOTOCOPY OF PAN CARD (II) COPY OF DRIVING LICENSE (III) CONFIRMATION LETTER (IV) COPY OF RETURN OF INCOME AND COMPUTATION OF INCOME ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 4 (V) COPY OF BANK STATEMENT OF THE APPELLANT AS A PROOF OF TRANSACTION (VI) COPY OF BANK STATEMENT OF LOAN CREDITOR HIGHLIGHTIN G IMMEDIATE SOURCE OF FUND REQUIRED FOR ADVANCING, TRANSFER OF FUND AND REPAYMENTS TO APPELLANT COMPAN Y. (VII) COPY OF STATEMENT FUND RECEIVED BY LOAN CREDITORS M/S. GEMINI COMMERCE PVT LTD. (I) PHOTOCOPY OF PAN CARD. (II) CONFIRMATION LETTER (III) COPY OF RETURN OF INCOME, COMPUTATION OF INCOME ALONGWITH AUDITED DOCUMENTS FOR A.Y. 2013-14. (IV) COPY OF BANK STATEMENT OF THE APPELLANT AS A PROOF OF TRANSACTION. (V) COPY OF BANK STATEMENT OF LOAN CREDITOR HIGHLIGHTIN G IMMEDIATE SOURCE OF FUND REQUIRED FOR ADVANCING, TRANSFER OF FUND AND REPAYMENT FROM APPELLANT COMPANY. (VI) COPY OF STATEMENT SHOWING FUND RECD BY LOAN CREDITO R. (VII) COPY OF CHALLAN TO VIEW PUBLIC DOCUMENT ON ROC WEBSITE. FROM THE ABOVE IT IS SEEN THAT THE LOAN CREDITOR M/ S GEMINI COMMERCE PVT. LTD. WHO FILED ITS RESPECTIVE I.T. RETURNS, ARE ASSESSED TO TAX AND HO LDS VALID PAN NO. AND IN CASE OF COMPANY THEY ARE REGISTERED WITH REGISTRAR OF COMPANIES AND THEIR NAME APPEARS IN ROC RECORD. FURTHER, ON CAREFUL PERUSAL OF ITS BALANCE SHEET FOR A.Y. 2013-14, IT I S SEEN THAT THERE WAS SUFFICIENT FUNDS AVAILABLE IN RESERVE & SURPLUS TO ADVANCE OF RS. 15,00,000/- TO THE APPELLANT COMPANY. SAME IS THE CASE OF SH. DEEPENDER SINGH WHO HAS GOT SUFFICIENT FUNDS THROUGH TRANSFER FOR ADVANCING RS. 4,09,29,000/- TO THE APPELLANT. FURTHER, ON CAREFUL PERUSAL OF DOCUMENTARY EVIDENCES, IT IS SEEN THAT THE LOAN CREDITORS HAVE COMPLIED WITH THE NOTICE U/S 133 (6) SENT BY THE A.O. BY SENDING THEIR EXPLANATION ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 5 SUPPORTED WITH EVIDENCE. THE LOAN CREDITORS HAVE ALSO SUBMITTED THE NATURE OF IMMEDIATE SOURCE OF LOAN PROVIDED. BUT THE A.O. HOWEVER, FURTHER DESIRES TO FIND THE VERACITY OF SOURCE STATED FOR L OAN PROVIDED BY LOAN CREDITORS TO ASSESSEE COMPANY OR RAISED QUERRIES SUCH AS WHY IS COMPANY ENGAGED IN THE BUSINESS OF LENDING MONEY TO OTHER PERSONS ? BUT IT IS ALSO A FACT THAT A.O. HAS NOT MADE ANY FURTHER ENQUIRY TO DISPROVE ASSESSEES CONTENTION. MERE RAISING DOUBT WILL NOT SUFFICE. FROM THE ABOVE, IT IS ALSO SEEN THAT ASSESSEE HAS FILED CONFIRMATION FROM CREDITOR, PAN, CHEQUE TRANSACTION SUPPORTED BY COPY OF BANK ACCOUNT AND THAT SIMILAR LOAN WAS TREATED AS GENUINE IN THE AY. HERE IN THIS CASE, A.O. SHOULD HAVE PROVED BEYOND DOUBT THAT THE LOAN CREDITORS WERE NOT ABLE TO EXPLAIN ITS SOURCE OF DEPOSIT OR ADVANCING LOAN TO THE ASSESSEE THROUGH GENUINE SOURCE. IT IS FACT AND REQUIREMENT OF THE LAW THAT THE PRIMARY ONUS ALWAYS LIES ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF CREDITS IN ITS ACCOUNT. IT IS NECESSARY F OR THE ASSESSEE TO PROVE PRIMA FACIE THE IDENTITY OF H IS CREDITORS, THE CAPACITY OF SUCH CREDITORS TO ADVANC E THE MONEY AND LASTLY THE GENUINENESS OF THE TRANSACTIONS. ONLY WHEN THESE THINGS ARE NOT PROVED BY THE ASSESSEE PRIMA FACIE AND ONLY AFTER THE ASSESSEE HAS NOT ADDUCED EVIDENCE TO ESTABLISH THE AFORESAID FACTS DOES THE ONUS SHIFT ON TO THE REVENUE. IT IS WELL SETTLED LAW THAT BURDEN IS UPON THE ASSESSEE TO PROVE INGREDIENTS OF SECTION 68 OF THE ACT BY PROVING IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THEREFORE, ONCE THE ASSESSEE HAS BEEN ABLE TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVING SUFFICIENT INCOME TO ADVANCE MONEY IN FORM OF LOAN TO THE ASSESSEE, A.O. CANNOT MAKE ANY ADDITION U/S 68 OF THE ACT. APART FROM THIS A.O. IN RESPECT TO UNSECURED LOAN OF RS. 86,13,865/- ADVANCED BY IN THE SAME YEAR WHILE SIMULTANEOUSLY ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 6 COMPLETING ASSESSMENT OF SAID COMPANY M/S GEMINI COMMERCE P. LTD. TO M/S HARSH SHARE PORTFOLIO P. LTD ACCEPTED THE UNSECURED LOAN AS EXPLAINED WHILE THE UNSECURED LOAN FROM SAME COMPANY IN SAME ASSESSMENT YEAR AS HELD UNEXPLAINED IN CASE OF ASSESSEE COMPANY, WHICH IS NOT CORRECT PROPOSITION OF LAW. FURTHER, DECISIONS OF HON'BLE RAJASTHAN HIGH COURT IN CASE OF (I) RAO RAJA HANAUT SINGH (SUPRA), (II) KANHAIYALAL JANGID (SUPRA) AND (III) MANGILAL AGARWAL (SUPRA) AND (IV) HON'BLE ITAT BENCH JAIPUR IN CASE OF RAJ KUMAR MEHTA (SUPRA) ARE DIRECTLY IN FAVOUR OF THE ASSESSEE. THE OTHER CASE LAWS RELIED UPON BY THE ASSESSEE, ALSO SUPPORT ASSESSEES CONTENTION. THEREFORE, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, ADDITION OF RS. 4,24,29,000/- MADE U/S 68 OF THE ACT IS HEREBY DELETED. ASSESSEES APPEAL IN GR NO. 1 STANDS ALLOWED. 2.2 DURING THE COURSE OF HEARING, THE LD. DR SUPPOR TED THE ORDER OF THE AO. 2.3 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND FILED THE FOLLOWING WRITTEN SUBMISSIONS ON THE RESPECTIVE GROUNDS RAISED BY THE REVENUE. SUBMISSION OF ASSESSEE THE ASSESSEE COMPANY RELIES ON APPEAL ORDER OF CIT (A). THE GROUNDWISE SUBMISSIONS ARE MADE AS UNDER: - GROUND NO. 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE CIT (A) WAS RIGHT IN ENTERTAINING ADDITIONAL EVIDENCE U/R 46 OF THE I.T. RULES, WHEREIN, THE FACT IS THAT DURING THE ASSESSMENT PROCEEDINGS SUFFICIENT OPPORTUNITY W AS GIVEN TO ASSESSEE TO PROVE THE GENUINENESS, IDENTITY AND CREDITWORTHINESS OF THE D EPOSITORS. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 7 THE ASSESSEE COMPANY DURING THE YEAR TAKEN UNSECURE D LOANS FROM SHRI DEEPENDRA SINGH AMOUNTING TO RS. 4,09,29,000/-, FROM GEMINI C OMMERCE P. LTD. AMOUNTING TO RS. 15,00,000/-. THE ASSESSEE DURING ASSESSMENT PROCEEDINGS FILED CO NFIRMATION IN SUPPORT OF ADVANCING UNSECURED LOANS TO COMPANY FROM THOSE PER SONS BEFORE LD. A.O. THE LD. A.O. MUCH THEREAFTER ISSUED A SHOW CAUSE NOTICE ON 17-03 -2015 (ASSESSMENT COMPLETED ON 31-03- 2015) TO ASSESSEE TO EXPLAIN SATISFACTORILY THE NAT URE & SOURCE OF ALL THE SUMS CREDITED IN ITS BOOKS OF ACCOUNTS IN THE NAME OF ABOVE THREE PERSON S AND TO ESTABLISH CREDIT WORTHINESS OF THESE PERSONS. THE ASSESSEE THEREAFTER ASKED LOAN C REDITORS TO SENT TO ASSESSEE COMPANY OR DIRECT TO A.O. THE SUPPORTING DOCUMENTS SUCH AS COP Y OF PAN, ITR ACKNOWLEDGEMENT, COPY OF BALANCE SHEET AND BANK STATEMENT ETC. BUT DUE TO SH ORT TIME ALLOWED THE REQUIRED DOCUMENTS/DETAILS FROM AVAILABLE LOAN CREDITORS COU LD NOT BE RECEIVED IN TIME BY ASSESSEE AS LOAN CREDITORS WERE HAVING THEIR PRINCIPAL OFFICE A WAY FROM JAIPUR AND SO EXCEPT LOAN CREDITOR PRABHA SAXENA WHO FILED SOME DOCUMENTS DIRECTLY TO A.O. NONE OF THE REMAINING LOAN CREDITORS COULD FILE REQUIRED DETAILS/DOCUMENTS IN TIME TO A.O. OR SEND TO THE ASSESSEE COMPANY SAID REQUIRED DOCUMENTS ETC. THE ASSESSEE C OMPANY FOR FILING THOSE DOCUMENTS WAS WHOLLY DEPENDENT ON LOAN CREDITORS WHO SUPPLIED THE M LATE IT WAS ON THE ABOVE FACTS IT WAS CONTENDED BEFORE C IT (A) THAT ASSESSING COMPANY WAS PREVENTED FROM SUFFICIENT CAUSE TO ADDUCE EVIDE NCES BEFORE LD. A.O. IN ALLOWED TIME AND, THEREFORE IT WAS PRAYED THAT ADDITIONAL EVIDENCES S UBMITTED BY ASSESSEE COMPANY NOW MAY KINDLY BE ADMITTED U/S 46A (1) & ALSO UNDER POWERS VESTED IN YOUR HONOUR U/S 46A (4) OF I. T. RULES, 1962 AND U/S 250 OF I. T. ACT, 1961. THE LD. CIT (A), THEREAFTER FORWARDED A LETTER TO A O (REPRODUCED ON PAGE 2 3 OF APPEAL ORDER) STATING DURING THE ASSESSMENT PROCEEDINGS IN COMPLIANCE TO THE NOTICE ISSUED ON 12.03.2015, ASSESSEE COULD NOT PRODUCED RELEVANT DETAILS/PARTICULARS OF LOAN CREDITORS SO AS TO PROVE THEIR IDENTITY, CREDITWORTHINESS AND GE NUINENESS OF TRANSACTIONS BECAUSE THERE PRINCIPAL OFFICERS WERE AWAY FROM JAIPUR. BECAUSE O F THESE FACTS, ASSESSEE COULD NOT PRODUCE THOSE RELEVANT DOCUMENTS BEFORE THE A.O. I FIND THA T ASSESSEE WAS PREVENTED WITH SUFFICIENT CAUSE TO ADDUCE REQUIRED DOCUMENTARY EVIDENCES BEFO RE THE A.O. WITHIN STIPULATED DEAD LINE. ACCORDINGLY, YOU ARE DIRECTED TO CALL FOR FOLLOWING EVIDENCES AND THEN CARRY OUT NECESSARY INVESTIGATION/INQUIRY SO AS TO PROVE THE IDENTITY, SOURCE OF FUND, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF LOAN CREDITORS NAMELY SH. D IPENDRA SINGH & M/S GEMINI COMMERCE PVT. LTD. A) PROOF OF IDENTITY B) COPY OF PAN C) COPY OF ITR ACKNOWLEDGEMENT D) COPY OF BALANCE SHEET & P & L ACCOUNT FOR THE YEAR RELEVANT TO A.Y. 2013-14. E) COPY OF BANK STATEMENT SHOWING IMMEDIATE SOURCES OF THE FUND MEANT FOR ADVANCING LOAN TO ASSESSEE COMPANY. F) CONFIRMATION OF ACCOUNTS AS MAINTAINED BY LOAN CRED ITOR WHICH IS DULY AUTHENTICATED. [3] FURTHER YOU MAY ALSO FURNISH ADDITIONAL DOCUMEN TARY EVIDENCES TO REBUT ASSESSEE CONTENTION. PLEASE TREAT THIS AS REQUIREMENT OF REM AND REPORT REQUIRED UNDER RULE 46A, ACCORDINGLY, YOU ARE REQUIRED TO CALL FOR AFOREMENT IONED DOCUMENTS, CARRY OUT NECESSARY INVESTIGATION AND SUBMIT YOUR REPORT BY 2 ND AUGUST, 2016 THE CIT (A) ON RECEIVING THE REMAND REPORT AND AFTE R OBTAINING THE REJOINDER THEREON FROM ASSESSEE COMPANY GAVE FOLLOWING FINDING IN PAR A 2.1.3 ON PAGE 7 8 OF APPEAL ORDER WHICH READS AS UNDER: - ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 8 I HAVE DULY CONSIDERED AO'S REMAND REPORT, ASSESSE ES SUBMISSION AND REJOINDER FILED. IT IS SUBMITTED THAT THE AO IN HUR RIED MANNER AS CASE WAS GETTING BARRED BY LIMITATION IN MARCH, 2015, ALLOWED VERY S HORT TIME WHILE REQUIRING ASSESSEE TO PRODUCE SUPPORTING EVIDENCE/DOCUMENTS R EGARDING LOANS. IN COMPLIANCE, ASSESSEE FILED CONFIRMATIONS FROM LOAN CREDITORS DU RING ASSESSMENT PROCEEDINGS, HOWEVER COPY OF ITR, BANK STATEMENTS AND COPY OF BA LANCE SHEET ETC. OF LOAN CREDITORS WERE NOT BEING RECEIVED FROM LOAN CREDITO RS DESPITE REQUESTS BY ASSESSEE. THE ADDITIONAL EVIDENCES SO FILED FOR THE FIRST TIM E DURING THE APPELLATE PROCEEDING, ARE VITAL AND OF PRIME IMPORTANCE FOR ADJUDICATION OF THIS APPEAL. IT IS PERTINENT TO MENTION HERE THAT A.O. ISSUED SHOW CAUSE LETTERS TO LOAN CREDITORS ON 17/3/2015, HOWEVER THEY COULD NOT COMPLY WITHIN STIPULATED DEA DLINE, ACCORDINGLY A.O. PASSED THE ORDER ON 31/3/2015. NOW I FIND THAT THERE ARE S UFFICIENT REASONS BEYOND THEIR CONTROL WHICH PREVENTED FROM PLACING THOSE DOCUMENT ARY EVIDENCES BEFORE THE A.O. DURING ASSESSMENT PROCEEDING. AS, A VERY SHORT TIME WAS ALLOWED FOR COMPLIANCE, IT IS ALSO SUBMITTED THAT DURING THE STIPULATED TIME, THE REQUIRED DOCUMENTS/DETAILS FROM AVAILABLE LOAN CREDITORS COULD NOT BE RECEIVED, BUT NONE OF THE REMAINING LOAN CREDITORS COULD FILE TO A.O. OR SEND TO THE ASSESSE E COMPANY SAID REQUIRED DOCUMENTS ETC. THEREFORE, ASSESSEE WAS PREVENTED WITH SUFFICI ENT CAUSE TO ADDUCE REQUIRED EVIDENCES BEFORE THE A.O. IN ALLOWED TIME. NOW, VID E ADDITIONAL EVIDENCES UNDER RULE 46A ASSESSEE FILED DOCUMENTARY EVIDENCES PERTAINING TO IMMEDIATE SOURCE OF FUND, IDENTITY OF CREDITORS, CREDITWORTHINESS OF LOAN CRE DITORS & GENUINENESS OF TRANSACTIONS, THEREFORE, FOR THE SAKE OF ADJUDICATI ON AND DULY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, THESE EVIDENCES ARE ALLOWED TO BE PLACED ON RECORD U/R 46A OF THE I.T. RULES. THUS LD. CIT (A) ON THE FACTS OF THE CASE IN ACCORD ANCE WITH RULE 46A OF I. T. RULES AND AFTER FOLLOWING PROPER PROCEDURE OF LAW RIGHTLY ALLOWED AND ADMITTED THE ADDITIONAL EVIDENCE. THE POWER OF CIT (A) TO MAKE FURTHER ENQUIRY UNDER SUB SECTION (4) OF SECTION 250 INCLUDES THE POWER TO ADMIT FRESH AND ADDITIONAL EV IDENCE. THAT DISCRETION IS REGULATED BY RULE 46A. THE RULE PROVIDES THAT THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE ANY EVIDENCE WHETHER ORAL OR DOCUMENTARY BEFORE THE CIT (A) WHIC H WAS NOT PRODUCED IN THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE A.O. EXCEPT IN SP ECIFIED CIRCUMSTANCES GIVEN IN RULE 46A. IN THE CASE OF PRABHAWATI VS. CIT 231 ITR 1 AND IN CASE OF CIT VS. K. RAVINDRAN 265 ITR 217 THAT THE IMPLICATIONS OF THE WORD ENTITLED IN RUL E 46A ARE THAT (I) THE APPELLANT HAS A RIGHT TO PRODUCE ADDITIONAL EVIDENCE IN THE CIRCUMSTANCES SP ECIFIED IN THE RULE, AND (II) THE APPELLANT MAY BE PERMITTED TO PRODUCE ADDITIONAL EVIDENCE IN A FIT CASE WHICH FALLS OUTSIDE THE SPECIFIED CIRCUMSTANCES. THE RULE FURTHER PROVIDES THAT THE C IT (A) SHALL NOT ADMIT ADDITIONAL EVIDENCES UNLESS HE HAS RECORDED HIS REASON FOR ADMITTING IT, AND THAT HE SHALL NOT TAKE INTO ACCOUNT SUCH EVIDENCE, UNLESS THE A.O. HAS BEEN ALLOWED A REASON ABLE OPPORTUNITY TO EXAMINE IT AND TO PRODUCE EVIDENCE IN REBUTTAL THEREOF. THE RULE SPEC IFICALLY PROVIDES THAT NOTHING CONTAINED IN IT SHALL AFFECT THE POWER OF THE CIT (A) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOS E OF THE APPEAL; HE SHOULD EXERCISE THIS POWER JUDICIALLY AND SHOULD MAKE ENQUIRY WHERE FACT S SO DEMAND. IT WILL BE NOTICED FROM APPEAL ORDER THAT THE LD. CIT (A) HAS COMPLETELY FO LLOWED THE SAID LAW AND REQUIRED PROCEDURE WHILE ADMITTING ADDITIONAL EVIDENCES FILED BY ASSES SEE COMPANY U/R 46A AND HENCE THE SAME IS CORRECT IN LAW. IT IS THUS SUBMITTED THAT ORDER OF CIT (A) ADMITTIN G THE ADDITIONAL EVIDENCE U/R 46A IS JUST, CORRECT AND IN ACCORDANCE WITH LAW WHICH MAY KINDLY BE UPHELD. THE GROUND OF APPEAL RAISED BY DEPARTMENT HAS NO MERIT WHICH DESERVES TO BE DISMISSED. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 9 GROUND NO. 2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE CIT (A) WAS RIGHT IN DELETING THE ADDITION OF RS. 4,24,29,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME-TAX ACT. IT WAS SUBMITTED BY ASSESSEE TO CIT (A) THAT EXAMIN ATION OF DOCUMENTS SUBMITTED BEFORE HIM COMPLETELY ESTABLISH THE IDENTITY, GENUI NENESS AND CREDIT WORTHYNESS OF THE AMOUNT ADVANCED BY THE SAID UNSECURED LOAN CREDITORS CREDI TED IN THE BOOKS OF ASSESSEE COMPANY. WE MAY SUBMIT THAT THE LD. A.O. IN RESPECT TO UNSECURE D LOAN OF RS. 86,13,865/- ADVANCED BY M/S GEMINI COMMERCE P. LTD. TO HARSH SHARE PORTFOLIO P. LTD. IN THE SAME YEAR AND WHILE SIMULTANEOUSLY COMPLETING ASSESSMENT OF SAID COMPAN Y ACCEPTED THE UNSECURED LOAN AS EXPLAINED WHILE THE UNSECURED LOAN FROM SAME COMPAN Y IN SAME ASSESSMENT YEAR IS HELD UNEXPLAINED IN CASE OF ASSESSEE COMPANY. THE LD. A. O. HAS WRONGLY SOUGHT TO INVOKED PROVISIO TO SECTION 68 OF I.T.ACT, 1961 BUT IT IS S UBMITTED THAT THE SAME IS INAPPLICABLE IN CASE OF ASSESSEE COMPANY AS IT APPLIED ONLY TO THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMO UNT BY WHATEVER NAME CALLED. THUS PROVISIO APPLIES ONLY TO SHARE CAPITAL ETC. AND NOT TO UNSECURED LOANS. THE LD. A.O. HELD THAT INCOME RETURNED BY LOAN CREDITORS ARE LOW AS PER DE TAILS GIVEN IN ASSESSMENT ORDER AND ONLY BY TAKING THE SAID REASON THE A.O. HELD THAT, THEREFOR E CREDITWORTHINESS OF LOAN CREDITORS ARE NOT SATISFACTORILY EXPLAINED. IT IS SUBMITTED THAT IT IS NOT A CORRECT PROPOSITION IN LAW. IT IS SUBMITTED THAT FROM THE REMAND REPORT SENT BY LD. A.O. IT IS EVIDENT THAT THE ASSESSEE FILED CONFIRMATIONS OF CREDITORS, THE LOAN S ARE THROUGH ACCOUNT PAYEE CHEQUES VERIFIABLE FOR BANK STATEMENT OF BOTH THE PARTIES. THE LOAN CREDITORS MAINTAINS BOOKS OF ACCOUNTS WHEREIN TRANSACTION OF LOAN GIVEN APPEARS AND LOAN IS APPEARING THEREIN AND IS VERIFIABLE FROM BALANCE SHEET OF RELEVANT YEAR OF T HE LOAN CREDITORS. THE LOAN CREDITORS HAVE FILED THEIR RESPECTIVE I.T. RETURNS ARE ASSESSED TO TAX AND HOLDS VALID PAN NO. AND IN CASE OF COMPANY THEY ARE REGISTERED WITH REGISTRAR OF COMPA NIES AND THEIR NAME APPEARS IN ROC RECORD. THE LOAN CREDITORS COMPLIED THE NOTICE U/S 133 (6) SENT BY LD. A.O. AND SENT THEIR EXPLANATION SUPPORTED WITH EVIDENCE. THE LOAN CREDI TORS HAVE ALSO SUBMITTED THE NATURE OF IMMEDIATE SOURCE OF LOAN PROVIDED. THE LD. A.O. HOW EVER, FURTHER DESIRES TO FIND THE VERACITY OF SOURCE STATED FOR LOAN PROVIDED BY LOAN CREDITOR S TO ASSESSEE COMPANY OR RAISED QUERRIES SUCH AS WHY IS COMPANY ENGAGED IN THE BUSINESS OF LENDING MONEY TO OTHER PERSONS. IT IS SUBMITTED THAT FOR JUDGING THE IDENTITY, GENUINENES S AND CREDIT WORTHINESS OF LOAN CREDITOR ALL NECESSARY DOCUMENTS WERE FURNISHED BY ASSESSEE AND EXAMINED BY LD. A.O. THE ASSESSEE CANNOT BE REQUIRED TO EXPLAIN OR KNOW THE VERACITY OF SOURCE EXPLAINED BY LOAN CREDITOR FOR JUDGING ITS CREDIT WORTHYNESS WHICH IS NOT NECESSAR Y FOR EXPLAINING THE CREDITS IN TERMS OF SECTION 68 OF I.T. ACT, 1961. THE LD. A.O. IS THERE FORE NOT CORRECT IN LAW TO HOLD THAT CREDIT WORTHYNESS AND GENUINENESS OF THE THREE LOAN CREDIT ORS, SMT. PRABHA SAXENA, M/S GURUKRIPA TRADE MART P. LTD. AND GEMINI COMMERCE P. LTD. REMA INS UNVERIFIED. THE ASSESSEE FIRM SUBMITS THAT IT HAS SUBMITTED CON FIRMATION WITH COMPLETE ADDRESS & P.A. NO. FROM ALL LOAN CREDITORS AND OTHER SUPPOR TING DOCUMENTS SUCH AS COPY OF PAN CARD, ITR ACKNOWLEDGEMENT, COPY OF BALANCE SHEET ETC. AND LOANS WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND SO GENUINENESS OF TRANSACTION ARE PROVED AND THE CREDITS ARE SATISFACTORILY EXPLAINED. HONBLE RAJASTHAN HIGH COURT IN THE CASE OF MANGILAL AGARWAL V/S ACIT 300 ITR 372 HAS HELD THAT ONCE ASSESSEE POINT OUT DEPOSITOR FROM WHOM HE HAS RECEIVED MONEY WHO HAS OWNED ADVANCEMENT OF MONEY TO THE ASSESSEE THEN THE FURTHER ENQUIRY INTO SOURCE CANNOT RESULT IN INVOKING PROVISIONS OF S.68 OF I.T. ACT U NLESS THE EXISTENCE OF THE PERSON IN WHOSE NAME CREDIT ENTRY IS FOUND IS NOT PROVED OR HE DISO WNS HAVING MADE SUCH DEPOSIT. BUT ONCE CREDITOR IS PROVED AND EXISTING AS WELL AS HE ADMIT S HAVING LENT THE MONEY, MONEY CANNOT BE CONSIDERED AS ASSESSEES INCOME UNLESS THE REVENUE ESTABLISHED BY SOME EVIDENCE THAT IT REALLY FOLLOWED DIRECTLY FROM ASSESSEE HIMSELF. SIMILARLY, HONBLE RAJASTHAN HIGH COURT IN ANOTHER CASE OF KANHIYALAL JANGID V/S ACIT 217 CTR 354 HAS HELD THAT WHILE IT WAS ASSESSEES BURDEN TO FURNISH EXPLANATION REGARDING CASH CREDIT BUT TH IS BURDEN DOES NOT EXTEND BEYOND PROVING ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 10 THE EXISTENCE OF THE CREDITOR AND FURTHER PROVING T HAT SUCH CREDITOR OWNS TO HAVE ADVANCED AMOUNT CREDITED IN THE ACCOUNTS OF ASSESSEE. HOWEVE R, BURDEN DOES NOT GO BEYOND TO PUT ASSESSEE UNDER AN OBLIGATION TO FURTHER PROVE THAT WHERE FROM CREDITOR HAS GOT OR PROCURED THE MONEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE. THE FACT THAT EXPLANATION FURNISHED BY CREDITOR ABOUT SOURCE FROM WHERE HE PROCURED THE MO NEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE IS NOT RELEVANT FOR THE PURPOSE OF REJECTI NG EXPLANATION FURNISHED BY ASSESSEE AND TO MAKE ADDITION OF SUCH DEPOSIT AS INCOME FROM UNDISC LOSED SOURCE U/S 68 OF O.T. ACT UNLESS IT CAN BE SHOWN BY DEPARTMENT THAT SOURCE OF SUCH MONE Y COMES FROM ASSESSEE HIMSELF OR SUCH SOURCE COULD BE TREATED OF ASSESSEE HIMSELF. THE FA CT THAT EXPLANATION FURNISHED BY CREDITOR ABOUT SOURCE OF ADVANCING LOAN HAS NOT BEEN ACCEPTE D BY REVENUE AUTHORITY CANNOT LEAD TO ANY PRESUMPTION THAT SOURCE OF SUCH ADVANCE BY CREDITOR EMANATED FROM ASSESSEE. SUCH VIEW HAS ALSO BEEN ACCEPTED BY ITAT JAIPUR BENCH IN THE CASE OF RAJ KUMAR MEHTA V/S ITO WARD 3 SIKAR IN ITA NO. 935/JP/08 DATED 29.08.2008 AND REC ENTLY IN CASE OF I.T.O. VS. RATAN KANWAR ITA NO. 334/JP/2014 ORDER DATED 16-06-2017. IN FOLLOWING CASES THE DIFFERENT HIGH COURTS AND IT AT BENCHES HAS HELD AS UNDER: - CIT V. ANURAG AGARWAL [2015] 54 TAXMANN.COM 75/229 TAXMAN 532 (ALL.) WHERE IN RESPECT OF CREDIT ENTRIES, THE ASSESSEE ESTABLIS HED IDENTITY OF CREDITORS BY BRINGING ON RECORD THEIR PAN AND COMPLETE ADDRESSES AND, MOREOVER, TRA NSACTION WAS MADE THROUGH PROPER BANKING CHANNEL, IMPUGNED ADDITION MADE UNDER SECTI ON 68 WAS TO BE SET ASIDE. ASSTT. CIT V. SANJAY M. JHAVERI [2015] 61 TAXMANN.C OM 28/70 XOT 502/168 TTJ 751 (MUM.) DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICE R FOUND THAT THE ASSESSEE HAD TAKEN UNSECURED LOANS. HE OBSERVED THAT THE ASSESSE E HAD FILED ONLY CONFIRMATION LETTERS AND SAME COULD NOT PROVE CREDITWORTHINESS OF PERSONS AD VANCING LOANS. ACCORDINGLY, ENTIRE LOAN AMOUNT WAS ASSESSED AS HIS UNEXPLAINED CASH CREDIT. THE COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE HAD FURNISHED NECESSARY CONFIRMATIONS FROM ALL PARTIES WHICH WERE DULY SUPPORTED BY THEIR RESPECTIVE BANK ACCOUNT STATEMENTS, COPIES OF ACKNOWLEDGEMENT OF RETURNS OF INCOME FILED, BALANCE SHEETS ETC; ALL TRANSACTIONS WERE FO UND RECORDED IN CONTRA BANK ACCOUNT STATEMENTS OF THE ASSESSEE AS WELL AS OF RESPECTIVE CREDITORS; THAT THE ASSESSEE HAD DULY DISCHARGED HIS BURDEN AS REQUIRED UNDER SECTION 68; CONFIRMATIONS FILED BY THE ASSESSEE WERE NOT DISPROVED BY THE ASSESSING OFFICER, THAT NO CON TRARY EVIDENCES WERE BROUGHT ON RECORD TO PROVE THAT CREDITORS WERE INGENUINE OR BOGUS AND TH AT ALL TRANSACTIONS WERE MADE THROUGH REGULAR BANKING CHANNELS. HELD THAT SAID DOCUMENTS WERE SUFFICIENT TO PROVE GENUIN ENESS OF TRANSACTIONS AS WELL AS CREDITWORTHINESS OF LENDERS . THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING PROVISIONS OF SECTION 68. CIT V. APEX THERM PACKAGING (P.) (LTD.) [2014] 42 T AXMANN.COM 473/222 TAXMAN 125 (MAG.) (GUJ.) WHEN FULL PARTICULARS, INCLUSIVE OF CONFIRMATION WI TH NAME, ADDRESS AND PAN NUMBER, COPY OF INCOME TAX RETURNS, BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL T HE CREDITORS/LENDERS WERE FURNISHED AND WHEN IT HAD BEEN FOUND THAT LOANS WERE FURNISHED TH ROUGH THE CHEQUES AND LOAN ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION. CIT V. RAMA KRISHNA JEWELLERS [2014] 52 TAXMANN.CO M 23/368 ITR 588 (DELHI) VARIOUS ADDITIONS WERE MADE UNDER SECTION 68 FOR RE LEVANT YEARS AS CONFIRMATIONS, BANK ACCOUNT STATEMENTS, AND INCOME-TAX RETURNS OF PERSO NS WHO HAD GIVEN UNSECURED LOANS AND CASH CREDITS TO THE ASSESSEE WERE NOT BROUGHT ON RE CORD. THE ASSESSEE, BEFORE THE COMMISSIONER (APPEALS), HAD FILED SEVERAL DETAILS I NCLUDING THEIR PAN, BANK STATEMENTS AND INCOME-TAX RETURNS. THE COMMISSIONER (APPEALS) HAD DELETED ADDITIONS BEING BASED ON NO MATERIAL. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 11 WE IN SUPPORT OF OUR CONTENTION THAT THE ASSESSEE C OMPANY HAS PROVED GENUINENESS, CREDITWORTHINESS AND SOURCE OF LOAN BY FURNISHING R EQUISITE EVIDENCE IN THE FORM OF I. T. RETURN AND FINANCIAL STATEMENT OF CREDITOR EVIDENCI NG RECEIPT OF LOAN AND CONFIRMATION OF SAID LOAN CREDITORS RELIES ON FOLLOWING JUDICIAL DECISIO NS: - CIT V. TANIA INVESTMENTS (P) LTD. [2010] 322ITR 394 (BOM.) H.C. WHERE IN THE BOOKS OF ACCOUNT PRODUCED BY CREDITORS CORRESPONDIN G ENTRIES OF ALLEGED CASH CREDITS WERE FOUND AND, HENCE, ADDITION ON ACCOUNT OF CASH CREDI TS WAS DELETED; HELD THAT, AS THE BOOKS OF ACCOUNT WERE AVAILABLE TO THE ASSESSING OFFICER, THE BOOKS OF ACCOUNT ITSELF WOULD INDICATE THE CAPACITY OF TH E PARTY TO ADVANCE LOAN AND THERE WAS NO FURTHER NEED ON THE PART OF THE ASSESSEE TO PROVE T HE CAPACITY OF THE CREDITORS. FORT PROJECTS (P) LTD. V. DY. CIT [2013] 29 TAXMANN .COM 84/[2012] 145 TTJ 340 (KOL.) ITAT DURING RELEVANT ASSESSMENT YEAR, THE ASSESSEE COMPA NY RECEIVED CERTAIN SUM AS LOAN FROM COMPANY T. THE ASSESSING OFFICER ALLEGE D THAT THE SAID COMPANY WAS A TYPICAL ENTRY COMPANY AND, THEREFORE, THE LOAN RECEIVED BY ASSESSEE WAS BOGUS. THE ASSESSING OFFICER, THUS, TREATED SAID SUM AS INCOME OF THE AS SESSEE-COMPANY FROM UNDISCLOSED SOURCES. ON APPEAL, THE COMMISSIONER (APPEALS) DELETED THE ADDITION BY OBSERVING THAT ASSESSING OFFICER HAD NOT PROVED THAT T WAS A TYPICAL ENTRY COMPANY WITH SUPPORTING EVIDENCES AND NO SPECIFIC FINDING IN RESPECT OF DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE IN SUPPORT OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTION WAS GIVEN. HELD THAT THE ASSESSEE HAD SUCCESSFULLY PROVED GENUINENE SS AND SOURCE OF LOAN BY FURNISHING THE REQUISITE EVIDENCES IN THE FORM OF I T RETURN AND FINANCIAL STATEMENTS OF CREDITOR EVIDENCING RECEIPT OF LOAN AND ALSO CONFIRMATION OF THE SAID PARTY. THEREFORE, THE COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING TH E ADDITION. CIT V. JAI KUMAR BAKLIWAL [2014] 45 TAXMANN.COM 203 /224 TAXMAN 87 (MAG.)/267 CTR 396/366 ITR 217 (RAJ.) UNSECURED LOAN RAISED BY THE ASSESSEE FROM RELATIVE S WAS ADDED IN INCOME OF THE ASSESSEE ON GROUND THAT NONE OF CREDITORS WAS ABLE TO PROVE SOURCE OF AMOUNT ADVANCED TO THE ASSESSEE AND IMMEDIATELY BEFORE GRANT OF LOAN BY TH EM CASH WAS DEPOSITED IN THEIR ACCOUNTS. HOWEVER, IT WAS ADMITTED BY THE ASSESSING OFFICER T HAT ALL CREDITORS WERE ASSESSED TO INCOME- TAX AND THEY HAD PROVIDED CONFIRMATION AS WELL AS T HEIR PAN. MOREOVER, ALL PAYMENTS WERE THROUGH ACCOUNT PAYEE CHEQUES. HELD THAT SINCE THERE WAS NO CLINCHING EVIDENCE NOR THE ASSESSING OFFICER HAD BEEN ABLE TO PROVE THAT MONEY ACTUALLY BELONGED TO NONE BUT TO THE ASSESSEE HIMSELF, ACTION OF THE ASSESSING OFFICER APPEARED TO BE BASED ON MERE SUSP ICION AND, THUS, ADDITION REQUIRED TO BE DELETED. IT IS, THEREFORE, SUBMITTED THAT LD. CIT (A) HAS RI GHTLY TREATED THE SAID CREDITS APPEARING IN THE BOOKS OF ACCOUNTS OF ASSESSEE AS E XPLAINED IN TERMS OF SECTION 68 OF I. T. ACT, 1961 AND DELETED THE ADDITION SO MADE BY LD. A.O. T HE APPEAL ORDER OF CIT (A) IS JUST AFTER MAKING DETAILED ENQUIRY AND CONSIDERING THE DOCUMEN TS SUBMITTED AND THUS CORRECT IN LAW. THE GROUND RAISED BY DEPARTMENT HAS NO MERIT WHICH DESERVES TO BE DISMISSED. IT IS PRAYED THAT APPEAL ORDER PASSED BY CIT (A) MA Y KINDLY BE CONFIRMED AND APPEAL FILED BY DEPARTMENT DESERVES TO BE DISMISSED. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 12 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE COMPANY IS ENGAGED IN REAL ESTATE BUSINESS. A SURVEY OPERAT ION U/S 133A OF THE ACT WAS CARRIED OUT ON 23-01-2013 AT THE BUSINESS AND R ESIDENTIAL PREMISES (PLOT NO. 8, HARSH TOWER, NEAR GOPAL PURA BYE-PASS, TRIVENI NAGAR, JAIPUR) OF THE ASSESSEE ALONGWITH THE SEARCH AND SE IZURE OPERATION U/S 132 OF THE ACT AT VARIOUS PREMISES OF HARSH GROUP. IT I S NOTED THAT NOTICE U/S 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 19- 12-2013. IN RESPONSE TO NOTICE U/S 142(1) OF THE ACT, THE ASSESSEE FURNI SHED ITS RETURN OF INCOME ON 18-09-2013 DECLARING TOTAL LOSS OF RS. (-) 2,18, 000/-. IT IS NOTED THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDING NOTIC ED THAT THE ASSESSEE HAD TAKEN UNSECURED LOAN FROM SHRI DEEPENDRA SINGH AMOUNTING TO RS. 4,09,29,000/- AND FROM M/S. GEMINEE COMMERCE P VT LTD. AMOUNTING TO RS. 15,00,000/- ALONGWITH OTHER PERSONS AND ENTI TIES. THE AO ASKED THE ASSESSEE TO FURNISH CONFIRMATIONS OF ALL NEW CASH C REDITORS. THE ASSESSEE FURNISHED CONFIRMATIONS OF THE CASH CREDITORS/ UN SECURED LOANS. THE ASSESSEE WAS SHOW CAUSED BY THE AO VIDE LETTER NO. 1037 DATED D12-03- 2015 REQUIRING HIM TO EXPLAIN AS TO WHY THE UNSECUR ED LOANS RECEIVED FROM SHRI DEEPENDRA SINGH AND M/S. GEMINEE COMMERCE PVT. LTD SHOULD NOT BE CONSIDERED AS BOGUS IN VIEW OF THE FINDINGS THAT THE INCOME TAX ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 13 RETURN (ITR) OF SHRI DEEPENDRA SINGH AND M/S. GEMI NEE COMMERCE PVT LTD. IS SHOWING A MEAGER INCOME IN THEIR INCOME TAX RETURNS. THE LD.AR OF THE ASSESSEE REPLIED THE SHOW CAUSE NOTICE VIDE LETTER DATED 17-03-2015 STATING THAT THE COMPANY HAD ALREADY SUBMITTED THE CONFIRMATION LETTERS. THE CONTENTS OF THE SAME AS MENTIONED IN ASSESSMENT ORDER ARE AS UNDER:- THE ASSESSEE COMPANY ALREADY SUBMITTED THE CONFIR MATION LETTERS HAVING COMPLETE ADDRESS, IT PA NOS, CHEQUE NO. ETC ALONGWITH COPY OF RETURN OF INCOME AND BANK ACCOUNTS OF LOAN CREDITORS. IT I S VERIFIABLE THAT ALL THE LOANS HAVE BEEN BORROWED BY ACCOUNT PAYEE CHEQUES O NLY. BY FURNISHING THE ABOVE SAID EVIDENCE/ DETAILS THE ASSESSEE HAD DISCH ARGED HIS ONUS CAST BY THE I.T. ACT, 1961 TO PROVE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN TRANSACTIONS. IN VIEW OF THE ABOVE, NO ADVERSE INFE RENCE DESERVES TO BE DRAWN ON THIS ACCOUNT. THE REPLY OF THE ASSESSEE WAS PERUSED BY THE AO BUT HE DID NOT FIND IT ACCEPTABLE. HENCE, THE AO MADE THE ADDITION OF RS. 4,24,29,000/- (RS. 4,09,29,000 PLUS RS. 15,00,000) U/S 68 OF THE ACT. IN FIRST APPEAL THE LD. CIT(A), HAS ACCEPTED THE ADDITIONAL EVIDENCES PROD UCED BY THE ASSESSEE U/R 46A OF THE INCOME TAX RULES, 1962 AND ALSO DELE TED THE ADDITION OF RS. 4,24,29,000/- MADE BY THE AO U/S 68 OF THE ACT. IN THIS APPEAL, IT IS NOTED THAT THE REVENUE IS BEFORE THIS BENCH ONLY FO R ADJUDICATION OF TWO ISSUE I.E. ENTERTAINING THE ADDITIONAL EVIDENCES U/ R 46 A OF THE I.T. RULES BY THE LD. CIT(A), SUBMITTED BY THE ASSESSEE AND AL SO DELETION OF ADDITION ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 14 OF RS. 4,24,29,000/- MADE BY THE AO. IT IS OBSERVED FROM THE LD. CIT(A)S ORDER THAT HE IN ORDER TO GIVE NATURAL JUSTICE TO T HE ASSESSEE ACCEPTED THE ADDITIONAL EVIDENCES PLACED BEFORE HIM, WITH FOLLO WING OBSERVATION. THE ADDITIONAL EVIDENCES SO FILED FOR THE FIRST T IME DURING THE APPELLATE PROCEEDING, ARE VITAL AND OF PRIME IMPORTANCE FOR ADJUDICATION OF THIS APPEAL. IT IS PERTINENT TO MENTION HERE THAT A.O. ISSUED SHOW CAUSE LETTERS TO LOAN CR EDITORS ON 17/3/2015, HOWEVER THEY COULD NOT COMPLY WITHIN STIPULATED DEADLINE, ACCORDINGLY A.O. PASSED THE ORDER ON 31/3/2015. NOW I FIND THAT THERE ARE SUFFICIENT REASONS BEYOND THEIR CONTROL WHICH PREVENTED FROM PLACING THOSE DOCUMENTARY EVIDENCES BEFORE THE A.O. DURING ASSESS MENT PROCEEDING. AS, A VERY SHORT TIME WAS ALLOWED FOR COMPLIANCE, IT IS ALSO SUBMITTED TH AT DURING THE STIPULATED TIME, THE REQUIRED DOCUMENTS/DETAILS FROM AVAILABLE LOAN CREDITORS COU LD NOT BE RECEIVED, BUT NONE OF THE REMAINING LOAN CREDITORS COULD FILE TO A.O. OR SEND TO THE ASSESSEE COMPANY SAID REQUIRED DOCUMENTS ETC. THEREFORE, ASSESSEE WAS PREVENTED WI TH SUFFICIENT CAUSE TO ADDUCE REQUIRED EVIDENCES BEFORE THE A.O. IN ALLOWED TIME. NOW, VID E ADDITIONAL EVIDENCES UNDER RULE 46A ASSESSEE FILED DOCUMENTARY EVIDENCES PERTAINING TO IMMEDIATE SOURCE OF FUND, IDENTITY OF CREDITORS, CREDITWORTHINESS OF LOAN CREDITORS & GEN UINENESS OF TRANSACTIONS, THEREFORE, FOR THE SAKE OF ADJUDICATION AND DULY FOLLOWING THE PRINCIP LES OF NATURAL JUSTICE, THESE EVIDENCES ARE ALLOWED TO BE PLACED ON RECORD U/R 46A OF THE I.T. RULES... IT IS NOTED THAT THE LD. CIT(A) ADOPTED THE PRINCIP LES OF NATURAL JUSTICE BY TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANC ES OF THE CASE AS TO WHY THE ASSESSEE COULD NOT PRODUCE THE SUPPORTING E VIDENCE / DOCUMENTS CONCERNING THE CASE BEFORE THE AO. IN THIS VIEW OF THE MATTER, WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A) AS TO ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF INCOME TAX RULES, 1962.. THUS GRO UND NO. 1 OF THE REVENUE IS DISMISSED. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 15 2.4.1 AS REGARDS THE ISSUE OF DELETION OF ADDITION OF RS. 4,24,29,000/- U/S 68 OF THE ACT BY THE AO, IT IS NOTED THAT THE BURDE N IS UPON THE ASSESSEE TO PROVE THE IDENTITY OF THE CREDITORS, THEIR CREDITWO RTHINESS AND GENUINENESS OF THE TRANSACTIONS. IN THIS CASE, THE ASSESSEE HAD FILED THE DOCUMENTARY EVIDENCES BEFORE THE LD. CIT(A) TO SUPPORT THE GEN UINENESS OF THE CREDITS. IT IS ALSO NOTED FROM THE ASSESSMENT ORDER AS WELL AS FROM REMAND REPORT THAT THAT THE AO COULD NOT CONTROVERT THE FACT THA T THE ASSESSEE HAD NOT MADE EFFORTS TO PRODUCE RELEVANT DETAILS OF LOAN CREDITORS . IT IS ALSO NOTED THAT THE TRANSACTIONS WERE THROUGH CHEQUES WH ICH IS VERIFIABLE FROM THE BANK STATEMENTS PRODUCED IN REMAND PROCEEDINGS. ONCE THE ASSESSEE HAS BEEN ABLE TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVING SUFFICIENT SOURCE TO ADVANCE MONEY IN FORM OF LOAN TO THE ASSESSEE THEN THE AO CANNOT MAKE ANY ADDITION U/S 6 8 OF THE ACT. IT IS NOTED THAT THE LD. CIT(A) HAS EXPLICITLY DEALT WITH THE ISSUE IN QUESTION AND DECIDED IT TAKING INTO CONSIDERATION ALL THE RE LEVANT FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE JUDICIAL PRO NOUNCEMENT AS MENTIONED IN HIS ORDER. IN THIS VIEW OF THE MATTER, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THE I SSUE OF DELETING THE ADDITION OF RS. 4,24,29,000/- MADE BY THE AO. THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. ITA NO. 1057/JP/2016 THE ACIT, CENT RAL CIRCLE-1, JAIPUR VS M/S. MACRO TOWNSHIP PVT. LT D. 16 3.0 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27-09-201 7. SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 /09/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT,CENTRAL CIRCLE-1, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. MACRO TOWNSHIP PVT. LTD. JAIPUR 3. VK;DJ VK;QDR@ CIT, 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO. 1057/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR