DeputyCommissioner of Income tax, Bangalore V. M/s Indian brewery & distillery P Ltd, Bangalore

ITA 1286/BANG/2014

• Counselvise Citation: 128621114 RSA 2014
• Duration Of Justice: 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-07-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD K JT
• Assessee Lawyers: V SRINIVASAN
• Keywords: Depreciation; Source of fund
• Section: 143(3); 133(6); 32; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.1286/BANG/2014 ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(4), BANGALORE. VS. M/S. INDIAN BREWERY & DISTILLERY PVT. LTD., NO.24, 1 ST FLOOR, REST HOUSE CRESCENT, BANGALORE 560 001. PAN : AABCI 0341L APPELLANT RESPONDENT APPELLANT BY : DR. SHANKAR PRASAD, K., JT. CIT(DR) RESPONDENT BY : SHRI V. SRINIVASAN, CA DATE OF HEARING : 07.07.2015 DATE OF PRONOUNCEMENT : 30.07.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER D ATED 30.6.2014 OF THE CIT(APPEALS)-I, BANGALORE RELATING TO ASSESSMEN T YEAR 2011-12. 2. GROUND NO.1 IS GENERAL IN NATURE AND CALLS FOR N O ADJUDICATION. 3. GROUNDS NO.2 & 3 READ AS FOLLOWS:- 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALL OWANCE OF DEPRECIATION OF RS.20,46,677 ON ENERGY SAVING DEVIC ES WITHOUT ITA NO.1286/BANG/2014 PAGE 2 OF 12 CONSIDERING THAT THE ASSESSEE WAS NOT ABLE TO PROVE THAT THE PLANTS FORMED PART OF ENERGY SAVING PLANT UNDER RULE 5(1) OF I.T. RULES. 3. THE LEARNED CIT(A) ERRED IN DELEING THE DISALLOW ANCE OF DEPRECIATION ON ENERGY SAVING DEVICES BY MERELY ACC EPTING THE ASSESSEES ALTERNATIVE CONTENTION THAT THE SAID PLA NTS CAN BE CLASSIFIED AS SEWAGE TREATMENT PLANT WITHOUT THE AS SESSEE FURNISHING ANY EVIDENCE/DOCUMENTS ETC. 4. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING SPIRITS USED IN MAKING OF LIQUORS. W HILE CONCLUDING THE ASSESSMENT FOR A.Y. 2011-12 U/S. 143(3) OF THE ACT, THE AO DID NOT ALLOW THE CLAIM OF ASSESSEE FOR DEPRECIATION @ 80% OF ENE RGY SAVING DEVICES OF THE VALUE OF RS.20,46,677. 5. BEFORE THE CIT(APPEALS), THE ASSESSEE POINTED OU T THAT IN THE BUSINESS OF MANUFACTURE OF SPIRIT USED IN MAKING OF LIQUORS THE ASSESSEE ALSO RUNS A LIQUOR BOTTLING PLANT. THE MANUFACTURI NG UNIT WAS LOCATED IN BIDAR DISTRICT OF KARNATAKA. AS PER THE REQUIREMEN TS OF KARNATAKA POLLUTION CONTROL BOARD (KPCB), IT WAS MANDATORY FOR THE ASSE SSEE TO INSTALL WATER TREATMENT PLANT/SEWEAGE TREATMENT PLANT. ACCORDING LY THE SEWAGE TREATMENT PLANT WAS INSTALLED BY THE ASSESSEE IN TH E FINANCIAL YEAR 2008-09. AS PER SECTION 32 OF THE ACT, THE RATE OF DEPRECIAT ION ON SUCH PLANT IS 80%. IT WAS POINTED OUT THAT THE ASSESSEE HAS BEEN CLAIM ING DEPRECIATION RIGHTFULLY @ 80% FROM AY 2009-10 AND IN THIS REGARD THE FINANCIAL STATEMENTS, RETURN FILED AND DEPRECIATION SCHEDULED WERE FILED BEFORE THE CIT(A). IT WAS SUBMITTED THAT IN THE FIRST YEAR O F CLAIM OF SUCH DEPRECIATION ITA NO.1286/BANG/2014 PAGE 3 OF 12 AT 80% IN A.Y. 2009-10, DEPRECIATION HAS BEEN ALLOW ED BY THE DEPARTMENT AT 80%. COPY OF THE ASSESSMENT ORDER WAS ALSO FILE D BEFORE THE CIT(A). THE ASSESSEE POINTED OUT THAT FOR THE YEAR UNDER AP PEAL, THE AO MADE THE DISALLOWANCE OF DEPRECIATION IN THE ABSENCE OF DOCU MENTARY EVIDENCE WITHOUT APPRECIATING THE FACT THAT DEPRECIATION ON SEWAGE TREATMENT PLANT HAS BEEN CLAIMED ON THE BASIS OF WRITTEN DOWN VALUE AS ON 1.4.2010 AND NO FRESH ADDITION TO THE ASSET HAS BEEN MADE. COPY OF DEPRECIATION SCHEDULE FOR A.Y. 2011012 WAS FILED. THE ASSESSEE RELIED ON DECISIONS OF CIT V. TAJMAHAL HOTEL (1971) 82 ITR 44 (SC) , CIT V. MADRAS CEMENTS LTD., 110 ITR 281 (MAD) AND R.C. CHEMICALS INDUSTRIES V. CIT (1982) 134 ITR 380 (DEL) WHEREIN IT WAS HELD THAT DEPRECIATION ON PLANT & MACHINERY WILL HAVE TO BE ALLOWED IN THE CONTEXT OF BUSINESS CARRI ED OUT BY THE ASSESSEE. IT WAS CONTENDED THAT THE ASSESSEE COULD NOT HAVE O PERATED WITHOUT INSTALLING THE EFFLUENT TREATMENT PLANT AND HENCE T HE CLAIM OF DEPRECIATION BY THE ASSESSEE WAS IN ORDER. 6. THE CIT(APPEALS) ON CONSIDERATION OF THE ABOVE S UBMISSIONS HELD AS FOLLOWS:- 3.3 I HAVE CAREFULLY CONSIDERED THE APPELLANTS S UBMISSIONS AND ALSO GONE THROUGH THE ASSESSMENT ORDER. THE AO DISALLOWED OF RS.20,46,677/- BEING 80% DEPRECIATION CLAIMED ON EFFLUENT TREATMENT PLANT ON THE GROUND THAT THE APPELLANT F AILED TO EXPLAIN THE HIGHER RATE OF DEPRECIATION ON THE ITEM S WITH DOCUMENTARY EVIDENCE. ON THE OTHER HAND THE APPELLA NT SUBMITTED THAT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSE SSMENT YEAR 2009-10 THE APPELLANT COMPANY HAD INSTALLED SEWERAG E TREATMENT PLANT AND AS PER THE PROVISIONS OF SECTIO N 32 OF THE ACT ITA NO.1286/BANG/2014 PAGE 4 OF 12 THE RATE OF DEPRECIATION ON SUCH SEWERAGE TREATMENT PLANT CLAIMED AT 80%. FURTHER IT IS ALSO SUBMITTED THAT A SSESSMENT FOR THE ASSESSMENT YEAR 2009-10 WAS COMPLETED U/S 143(3 ) AND THE APPELLANT CLAIM OF DEPRECIATION AT THE RATE OF 80% HAS BEEN ACCEPTED. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION NO ADDITION WAS MADE AND 8 0% DEPRECIATION WAS CLAIMED ON WRITTEN DOWN VALUE AS O N 01/04/2010. THUS THE AO WAS NOT JUSTIFIED IN DISALL OWING DEPRECIATION OF RS.20,46,677/-. 3.4 IN ORDER TO VERIFY THE APPELLANTS CLAIM, I HA VE VERIFIED THE FINANCIAL STATEMENT FOR THE FINANCIAL YEARS 2008-09 AND 2009-10 AND FROM IT REVEALS THAT THE APPELLANT INSTALLED E FFLUENT TREATMENT PLANT, WITH A COST OF RS.1,27,91,731/- D URING THE FINANCIAL YEAR 2008-09 AND IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 DEPRECIATION CLAIMED AT THE RATE OF 80% WHICH IS ACCEPTED BY THE AO IN THE ASSESSMENT ORDER U/S 143(3) DATED 28/12/2011. DURING THE FINANCIAL YEAR 2009-10 NO ADDITION WAS MADE AND 80% DEPRECIATION WAS CLAIMED ON W.D.V. OF RS.25,58,346/-. IN VIEW OF THE FACTS A REPORT WAS C ALLED FOR FROM THE AO AND IN THE REMAND REPORT THE AOS OPINION IS THAT THE PERCENTAGE OF DEPRECIATION IS GOVERNED BY RULE 5(1) OF INCOME TAX RULES 1962. ALL THE ASSETS WHERE DEPRECIATION O F 80% CAN BE CLAIMED ARE SPECIFICALLY MENTIONED IN APPENDIX-I OF THE RULES. THE SEWERAGE TREATMENT PLANT IS NOT AVAILABLE IN 80 % BLOCK HENCE THE CLAIM OF THE APPELLANT COMPANY IS NOT ACC EPTABLE. AS EXPLAINED BY THE APPELLANT THAT PLANT SO INSTALLED RELATED TO SEWERAGE TREATMENT DEVICE WHICH COULD BE CLASSIFIED UNDER WATER POLLUTION CONTROL EQUIPMENT AND THE SAME IS E NUMERATED III (IX) OF PART-A IN NEW APPENDIX-1, WHEREIN RATE OF DEPRECIATION IS MORE THAN 80%. ON THE CONTRARY, THE APPELLANT CL AIMED 80% DEPRECIATION OF TOTAL COST OF SUCH PLANT. HOWEVER, SINCE THE GENUINENESS OF INSTALLATION OF PLANT AND APPLICABIL ITY OF HIGHER RATE THEREON HAS BEEN ACCEPTED, THERE IS NO REASON TO DENYING THE SAME, IN VIEW OF FACT THAT NO ADDITION WAS MADE UND ER THIS BLOCK OF ASSET DURING THE YEAR AND DEPRECIATION CLAIMED O N WRITTEN DOWN VALUE ONLY. THEREFORE, DISALLOWANCE OF DEPRECI ATION OF RS.20,46,677/- IS DELETED. ITA NO.1286/BANG/2014 PAGE 5 OF 12 7. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WHO REITERATED THE STAND OF THE REVENUE AS REFLECTED IN THE GROUNDS OF APPEAL. IN OUR VIEW, THE CONTENTIONS RAISED BY THE REVENUE IN THE GROUND S OF APPEAL ARE TOTALLY WITHOUT ANY BASIS. THE CIT(APPEALS) HAS NOT GIVEN ANY FINDING AS TO WHETHER THE PLANT IN QUESTION FORMED PART OF ENERGY SAVING PLANT. HE HAS GIVEN RELIEF ONLY ON THE BASIS THAT THE EFFLUENT TR EATMENT PLANT WAS INSTALLED DURING THE F.Y. 2008-09 RELEVANT TO A.Y. 2009-10 AN D THE AO IN THE ASSESSMENT ORDER DATED 28.3.2011 HAS ACCEPTED THE F ACT THAT EFFLUENT TREATMENT PLANT WAS TO BE TREATED AS ENERGY SAVING PLANT ON WHICH HIGHER RATE OF DEPRECIATION AT 80% HAS TO BE ALLOWED. THE CIT(A) ALLOWED RELIEF ONLY ON THE REASONING THAT IN THE YEAR OF INSTALLAT ION; CLASSIFICATION OF AN ASSET FALLING WITHIN A PARTICULAR BLOCK AND BEING E LIGIBLE FOR DEPRECIATION AT A PARTICULAR RATE; HAS TO BE ASCERTAINED. ONCE THAT IS DONE, IN A SUBSEQUENT YEAR IT IS NOT POSSIBLE FOR THE AO TO REVIEW THE CO RRECTNESS OF GRANT OF DEPRECIATION IN AN EARLIER YEAR. IN OTHER WORDS, A FTER THE INTRODUCTION OF CONCEPT OF BLOCK OF ASSETS, THE ASSETS LOOSE IDEN TITY THE MOMENT THEY ENTER THE BLOCK AND THEREFORE THE RATE OF DEPRECIAT ION OF A PARTICULAR ITEM OF DEPRECIABLE ASSET CANNOT BE TAMPERED WITH IN A SUBS EQUENT ASSESSMENT YEAR. IN OUR VIEW, THE REASONING ADOPTED BY THE CI T(APPEALS) IS JUST AND PROPER AND CALLS FOR NO INTERFERENCE. CONSEQUENTLY , GROUNDS NO.2 & 3 ARE DISMISSED. ITA NO.1286/BANG/2014 PAGE 6 OF 12 9. GROUND NOS. 4 & 5 READ AS FOLLOWS:- 4. THE LEARNED CIT(A) ERRED IN DELETING THE DISALL OWANCE OF PURCHASES OF RS.84,48,518 MERELY ON THE GROUND THAT THE AO SHOULD HAVE CROSS VERIFIED FROM THE OTHER PARTIES B Y ISSUE OF NOTICE U/S. 133( 6) WITHOUT APPRECIATING THAT IT WA S THE DUTY OF THE ASSESSEE TO FURNISH THE REQUIRED EVIDENCE BY WAY OF BILLS ETC. 5. THE LEARNED CIT(A) ERRED IN DELETING THE DISALL OWANCE OF PURCHASES WITHOUT APPRECIATING THAT THE ASSESSEE FA ILED TO PROVE THE GENUINENESS OF THE PURCHASES AND FURTHER NO DOC UMENT EVIDENCE WAS ALSO PRODUCED BEFORE THE CIT(A) AND DU RING THE REMAND PROCEEDINGS ALSO, THE ASSESSEE DID NOT FURNI SH ANY DETAILS BEFORE THE AO. 10. THE AO ON A SCRUTINY OF TRADING, PROFIT & LOSS ACCOUNT NOTICED THAT THE ASSESSEE HAD CLAIMED EXPENSES ON PURCHASE OF RA W MATERIAL AND COAL TOTALING RS.3,37,94,070 (2,08,49,432 + 1,29,44,538) . SINCE THE ASSESSEE DID NOT PRODUCE INVOICES OR OTHER DOCUMENTS IN SUPP ORT OF THE AFORESAID EXPENSES, THE AO DISALLOWED 25% OF THOSE EXPENSES W HICH RESULTED IN AN ADDITION OF RS.84,48,518 TO THE TOTAL INCOME OF THE ASSESSEE. 11. BEFORE THE CIT(APPEALS), THE ASSESSEE CONTENDED THAT ITS PURCHASES WERE SUPPORTED BY DOCUMENTARY EVIDENCE AND THAT THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED ONLY SAMPLE VOUCHER S AND COMPLETE LEDGER OF PURCHASES, WHICH WERE PROVIDED BY THE ASS ESSEE. THE ASSESSEE POINTED OUT THAT ITS BOOKS OF ACCOUNTS WERE AUDITED AND THE SAME CANNOT BE HELD TO BE INCORRECT. THE ASSESSEE ALSO SUBMITT ED THAT EVEN IN THE ABSENCE OF PRODUCTION OF SUPPORTING VOUCHERS OR BIL LS, THE AO HAS TO MAKE NECESSARY ENQUIRIES BEFORE HE MAKES A DISALLOWANCE. THE ASSESSEE RELIED ITA NO.1286/BANG/2014 PAGE 7 OF 12 ON DECISION OF ITAT DELHI BENCH IN TSL DEFENCE TECHNOLOGIES P. LTD., ITA NO.942/DEL/2011 DATED 22.3.2013, WHEREIN IT WAS HELD THAT MERELY BECAUSE THE EXPENDITURE ARE EXPENSIVE, THAT CANNOT BE A GRO UND FOR DISALLOWANCE. IF IT DONE SO, THEN THAT WOULD BE A DISALLOWANCE MEREL Y ON SUSPICION AND PRESUMPTION. WITHOUT PREJUDICE TO THE ABOVE CONTEN TIONS, THE ASSESSEE FILED BEFORE THE CIT(A) COMPLETE LIST OF PURCHASES ALONG WITH COPIES OF PURCHASE BILLS. 12. THE EVIDENCE FILED BY THE ASSESSEE WAS FORWARDE D BY THE CIT(APPEALS) CALLING FOR A REMAND REPORT FROM THE A O. IN THE REMAND REPORT DATED 23.6.2014, THE AO OBSERVED THAT THE BILLS WER E NOT PRODUCED BEFORE HIM DESPITE ENOUGH OPPORTUNITIES. THE CIT(APPEALS) , ON A CONSIDERATION OF EVIDENCE BEFORE HIM, THE REMAND REPORT AND CONTENTI ONS OF THE ASSESSEE, WAS OF THE VIEW THAT SINCE THE ASSESSEE FURNISHED N AMES & ADDRESSES OF THE PARTIES FROM WHOM PURCHASES WERE MADE, IF THE A O ENTERTAINED DOUBTS ON THE GENUINENESS OF THOSE PURCHASES, HE OUGHT TO HAVE CROSS VERIFIED FROM THE PARTIES BY ISSUE OF NOTICE U/S. 133(6) OF THE ACT. THE AO CANNOT MERELY FOR ABSENCE OF BILLS AND INVOICES, MAKE DISA LLOWANCE. IN COMING TO THE AFORESAID CONCLUSION, THE CIT(A) PLACED RELIANC E ON TSL DEFENCE TECHNOLOGIES P. LTD . HE ACCORDINGLY DELETED THE ADDITION MADE BY THE AO. 13. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REV ENUE HAS RAISED GROUNDS NO.4 & 5 BEFORE THE TRIBUNAL. ITA NO.1286/BANG/2014 PAGE 8 OF 12 14. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WH O RELIED ON THE GROUNDS OF APPEAL. 15. WE HAVE CONSIDERED HIS SUBMISSION AND ARE OF TH E VIEW THAT THERE IS NO MERIT IN GROUNDS NO.4 & 5 RAISED BY THE REVENUE. IT IS NO DOUBT TRUE THAT IT IS THE DUTY OF ASSESSEE TO FURNISH EVIDENCE TO SUBSTANTIATE EXPENSES IN THE TRADING, PROFIT & LOSS ACCOUNT. ACCORDING T O THE ASSESSEE, THE AO ONLY CALLED FOR SAMPLE VOUCHERS AND LEDGER OF PURCH ASES AND THEREFORE PURCHASE BILLS WERE NOT PRODUCED. THIS FACT HAS NO T BEEN DENIED IN THE REMAND REPORT FILED BY THE AO BEFORE THE CIT(APPEAL S). THEREFORE, THERE WAS SUFFICIENT REASON FOR THE ASSESSEE TO FILE PURC HASE BILLS EVIDENCING PURCHASE OF RAW MATERIALS AND COAL BEFORE THE CIT(A ). IN THE REMAND REPORT, THERE IS NO COMPLAINT BY THE AO THAT THE PU RCHASE BILLS WERE NOT BELIEVABLE OR THE AO DID NOT THINK IT FIT TO MAKE A NY FURTHER ENQUIRY ON THE SUPPORTING BILLS FILED BY THE ASSESSEE BEFORE THE C IT(A). IN THESE CIRCUMSTANCES, THE VERY BASIS ON WHICH DISALLOWANCE WAS MADE BY THE AO NO LONGER SURVIVES. EVEN ON THAT BASIS, THE CIT(A) COULD HAVE ALLOWED RELIEF. NEVERTHELESS, THE CIT(A)S CONCLUSION WAS ON THE BASIS THAT THE AO SHOULD HAVE CROSS-VERIFIED FROM THE PARTIES FROM WH OM THE ASSESSEE CLAIMED TO HAVE MADE PURCHASES. IN OUR VIEW, THE U LTIMATE CONCLUSIONS OF THE CIT(APPEALS) THAT DISALLOWANCE CANNOT BE SUSTAI NED IS JUST AND PROPER AND CALLS FOR NO INTERFERENCE. ACCORDINGLY GROUNDS NO.4 & 5 ARE DISMISSED. 16. GROUND NO.6 READS AS FOLLOWS:- ITA NO.1286/BANG/2014 PAGE 9 OF 12 6. THE LEARNED CIT(A) ERRED IN DELETING THE ADDI TION OF RS.1,83,09,432 ON ACCOUNT OF SHARE APPLICATION MONE Y U/S. 68 OF I.T. ACT BY MERELY ACCEPTING THE LETTER OF ONE MR. JITENDERA VIRWANI WHO IS SUPPOSED TO HAVE LENT RS.1,35,00,000 /- TO SRI MALKANI ONE OF THE SHARE APPLICANT WITHOUT APPRECIA TING THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE TRA NSACTION EVEN DURING THE REMAND PROCEEDINGS BEFORE THE AO. 17. DURING THE PREVIOUS YEAR, THE ASSESSEE HAD RECE IVED SHARE APPLICATION MONEY TO THE TUNE OF RS.1,83,09,432. A CCORDING TO AO, THE ASSESSEE FAILED TO FURNISH DETAILS TO PROVE THE IDE NTITY OF INVESTOR, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE AO THEREFORE MADE AN ADDITION OF RS.1,83,09,432 TO THE TOTAL INC OME OF THE ASSESSEE U/S. 68 OF THE ACT. 18. BEFORE THE CIT(APPEALS), THE ASSESSEE FILED CON FIRMATION LETTER FROM ONE MR. BALAKRISHNA MALKANI, DIRECTOR OF ASSESSEE W HO CLAIMED THAT HE HAD GIVEN THE AFORESAID AMOUNT AS SHARE APPLICATION MON EY TO THE ASSESSEE. THE CONFIRMATION TOGETHER WITH DETAILS OF SOURCES F ROM WHICH BALKRISHNA MALKANI RECEIVED FUNDS WHICH WERE GIVEN AS SHARE AP PLICATION MONEY WERE FURNISHED. THIS IS IN THE FORM OF CONFIRMATION LET TER FROM ONE JITENDRA VIRWANI WHO CLAIMED TO HAVE PAID A SUM OF RS.1,35,0 0,000 TO BALKRISHNA MALKANI IN THE FOLLOWING MANNER:- CHEQUE NO. DATE AMOUNT REMARKS 092862 12/08/2010 RS.1,00,00,000 DRAWN ON CITI BANK 029651 21/09/2010 RS. 35,000 - DO - TOTAL RS.1,35,00,000 ITA NO.1286/BANG/2014 PAGE 10 OF 12 19. THE DOCUMENTS WERE FORWARDED TO THE AO. IN THE REMAND REPORT, THE AO DID NOT RAISE ANY OBJECTION EXCEPT STATING THAT ASSESSEE WAS GIVEN OPPORTUNITY TO FURNISH NECESSARY PROOF IN THE ASSES SMENT PROCEEDINGS, BUT HAS NOT FILED ANY SUCH EVIDENCE. THE CIT(A) ON A C ONSIDERATION OF THE EVIDENCE AND THE REMAND REPORT OF THE AO, WAS OF TH E VIEW THAT EVEN BEFORE THE AO, PAN, BANK STATEMENT, COPY OF INCOME TAX RETURNS IN RESPECT OF BALKRISHNA MALKANI HAD BEEN FILED. ACCORDING TO THE CIT(A), THE EVIDENCE FILED BEFORE HIM ESTABLISHED THE SOURCE OF FUNDS OF BALKRISHNA MALKANI TO THE EXTENT OF RS.1,35,00,000 AS IT WAS E VIDENCED BY A BORROWING FROM JITENDERA VIRWANI THROUGH BANKING CHANNELS. W ITH REGARD TO SOURCE OF FUNDS IN RESPECT OF REMAINING SHARE APPLICATION MON EY OF RS.48,09,432, THE CIT(APPEALS) WAS OF THE VIEW THAT NO EVIDENCE WAS F URNISHED BY THE ASSESSEE TO PROVE THE SOURCE OF INVESTMENT IN SHARE APPLICATION MONEY OF BALKRISHNA MALKANI. HE THEREFORE CONFIRMED THE ADD ITION TO THE EXTENT OF RS.48,09,432 AND DELETED THE ADDITION TO THE EXTENT OF RS.1.35 CRORES. 20. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS RAISED GROUND NO.6 BEFORE THE TRIBUNAL. 21. THE LD. DR REITERATED THE STAND OF REVENUE AS R EFLECTED IN THE GROUNDS OF APPEAL RAISED BEFORE THE TRIBUNAL. 22. WE HAVE CONSIDERED HIS SUBMISSION AND ARE OF TH E VIEW THAT THE SAME IS WITHOUT ANY MERIT. IT IS CLEAR FROM A READ ING OF THE GROUNDS OF APPEAL OF THE REVENUE THAT, REVENUE IS SATISFIED WI TH REGARD TO IDENTITY AND ITA NO.1286/BANG/2014 PAGE 11 OF 12 CREDITWORTHINESS OF THE TRANSACTION. ON THIS ASPEC T, IN THE REMAND REPORT FILED BY THE AO BEFORE THE CIT(APPEALS), NO FACTS H AVE BEEN STATED AS TO WHY THE CLAIM OF THE ASSESSEE AND GENUINENESS OF TH E TRANSACTION SHOULD BE DOUBTED. AS WE HAVE ALREADY SEEN, A SUM OF RS.1 .35 CRORES WAS RECEIVED BY BALKRISHNA MALKANI FROM JITENDRA VIRWAN I BY CHEQUES AND THE SAME HAVE BEEN REFLECTED IN THE INCOME TAX RETURNS OF BALKRISHNA MALKANI AS LOANS AND THE CORRESPONDING INVESTMENT IN THE SH ARE APPLICATION MONEY OF THE ASSESSEE IS ALSO REFLECTED. IN SUCH CIRCUMS TANCES, THERE IS NO MERIT IN GROUND NO.6 RAISED BY THE REVENUE AND THE SAME I S DISMISSED. 23. IN THE RESULT, THE APPEAL BY THE REVENUE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JULY, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 30 TH JULY, 2015. /D S/ ITA NO.1286/BANG/2014 PAGE 12 OF 12 COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.