DCIT, Circle-3(2), Ahmedabad V. M/s. Nilkanth Developers, Ahmedabad

ITA 1294/AHD/2018

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Circle-3(2), Ahmedabad as the appellant and M/s. Nilkanth Developers as the respondent. The dispute arose from the assessment order for the Assessment Year 2015-16, where the Assessing Officer added Rs. 2.25 crores as unexplained cash credit under section 68 of the Income Tax Act, 1961, due to doubts about the creditworthiness of the loan creditors. The CIT(A) reversed this addition, leading to the Revenue's appeal to the Tribunal. The Tribunal's decision was based on the adequacy of the evidence provided by the assessee, including the identity, creditworthiness of the creditors, and the compliance with TDS provisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114280 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 17-05-2018
• Other Referred Cases: Rohini Builders vs. CIT, Namision Power Tech Pvt. Ltd vs. ACIT, Aravalli Trading Company Vs. ITO, CIT V/S RANCHHOD JIVABHAI NAKHAVA, PCIT vs. Chartered Speed Pvt. Ltd., CIT vs. Himatsu Bimet Ltd., DCIT vs. Rohini Builders, CIT vs. Ayachi Chandrashekhar Narsangji
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Question of law; TDS; Bogus
• Section: 68; 143(3); 251; 208

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The DCIT, Circle-3(2), Ahmedabad (Appellant) Vs M/s. Nilkanth Developers, A-1, Shivshakti Shopping Centre, Opp. Samrat Nagar, Isanpur Ahmedabad-382443 PAN: AABCT9663N (Respondent) Assessee Represented: Shri S.N. Soparkar, Sr. Adv. Shri Parin Shah, A.R. and Ms. Urvashi Sodhan, A.R. Revenue Represented: Ms. Leena Lal, Sr.D.R. Date of hearing : 18-01-2023 Date of pronouncement : 12-04-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the Appellate order dated 20.03.2018 passed by the Commissioner of Income Tax (Appeals)-3, Ahmedabad, arising out of the Assessment order passed under section 143(3) of the Income Tax Act, 1961 ITA No. 1294/Ahd/2018 Assessment Year 2015-16 I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 2 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2015-16. 2. The brief facts of the case is that the assessee is a partnership firm engaged in the business of civil construction. For the Assessment Year 2015-16, the assessee filed its Return of Income declaring a total income of Rs. 49,88,360/-. During the year, the assessee developed commercial units i.e. shed in the scheme name “Mahadev Estate: situated at Vastral” and declared total turnover of Rs. 9.62 Crores and Gross Profit and Net Profit Ratio declared thereon are @ 16.9% and @ 13.15% respectively. 3. On perusal of the Audit Report by the Assessing Officer, the assessee accepted unsecured loan to the tune of Rs. 3,74,48,720/- from various parties during the year. However creditworthiness of the following parties were not commensurate with the Return of Income: Sr. No. Name of Partners Unsecured loan accepted A.Y. 2015-16 Return Income Remark (i) Shivam Corporation Prop Nanadkunwar Madanlal Maliwal PAN: ACLPM5494R 5500000 529830 For examining of genuineness, creditworthiness of the party, summons were issued upon the specific party and noticed that they have no creditworthiness commensurate with return of income filed. (ii) Mahesh Tex Fab Prop Priyanka D Maliwal PAN: BKPPB0378E 3000000 53210 (iii) Radhe Corporation Prop Deepak Madanlal Maliwal HUF PAN: AAIHD3877L 3000000 259310 (iv) Shree Ram Corporation Prop Rajmal Nanlal Maliwal PAN: ACGPM2788M 2500000 632760 (v) C.R. maliwal & Co. Prop Priyanka Jaimin Mantri 4000000 557720 I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 3 PAN: AVHPM8792R (vi) Yankee Management Service Pvt. Ltd. 4500000 Total 22500000 3.1. Therefore summons were issued by the Assessing Officer for examining genuineness and creditworthiness of the parties. In response, partial replies were given by the parties. Therefore a show cause notice dated 15.12.2017 issued to the assessee to explain as to why the amount introduced under the head “unsecured loan” from various parties should not be added as unexplained income u/s. 68 of the Act. 3.2. In response, the assessee filed detailed reply producing copies of the ledger account, contra account, copy of Income Tax Return filed and Bank Statements of the creditors. The assessee also submitted that necessary TDS on payment of interest to these creditors as per the provisions of the I.T. Act. The assessee also claimed that the loans were repaid during the subsequent year namely Assessment Year 2016-17 and produced ledger account of the same and thereby requested not to make addition made u/s. 68 of the Act. 3.3. However the Assessing Officer is view that the financial strength of the respective creditors are not supporting to lend such sums of money to the assessee and without loan agreement and without any relationship with the assessee. Thus the creditworthiness of the respective parties and the genuineness of the transaction remains unproved and unexplained. Therefore the unsecured loan of Rs. 2.25 crores accepted from various creditors are considered as unexplained cash credit in the hands of the I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 4 assessee u/s. 68 of the Act. The A.O. also disallowed the interest payment of Rs. 3,10,356/- paid to the above creditors as not genuine expenses and disallowed the same and demanded tax thereon. 4. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A). After considering the various submissions of the assessee, the Ld. CIT(A) deleted the additions made by the Assessing Officer u/s. 68 as follows: 3.2. Decision: I have considered the facts mentioned in the assessment order and the submission of the appellant carefully. The assessing officer made addition u/s.68 by raising various arguments. The AO is of the opinion that the identity of creditors and genuineness of the transaction is not proved. The appellant has submitted date-wise trail of incoming of impugned funds and subsequently repayment of the same through banking channel. The appellant has submitted name/address/PAN/copy of ban statement/acknowledgement of ITR/Statement of Income and confirmation of ledge accounts. The appellant has repaid the entire loan alongwith interest in A.Y.2016-17. The appellant has made successful rebuttal of each and every point raised by the appellant. The TDS has been deducted while making payment of interest or repayment of loan and the impugned TDS has been paid to the Government. The appellant has proved that the figures in ITRS for the creditors are correct and necessary explanation has been kept on record. It is not necessary that in all the cases for whole of t amount the creditors would be using their own funds, funds can also be borrowed fur by the creditors. I also find from the bank statements on record that there is no cash deposits in creditors account. There is also no finding by the AO that appellant's own undisclosed money has come indirectly through the bank accounts of the creditors. The appellant has painstakingly submitted adequate information including paper book in 170 pages and the same is concised in table below: Name of Party Bal. as on 31.03.201 5 as per books of Party Bal. as on 31.03.201 5 as per books of appellant Diff. Balance Sheet of Party on Pg No. of Paper Book of B/S details u/s 269SS in TAR on Pg No. of PB. Remarks Shivam Corporation Prop. Nandkunwar Madanlal Mallawal PAN ACLPM5494R 55,87,287 55,87,287 NIL 31-32 165 Confirmation /PAN/TDS /bank statement/ITR copy filed and on record. Creditor's Compliance u/s. 131 issued by AO is noticed. I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 5 Mahesh Tax Fab Prop. Priyanka D. Maliwal PAN: BKPPB0378E 30,52,964 30,52,964 NIL 50-51 165 Confirmation /PAN/TDS /bank statement/ITR copy filed and on record. Creditor's Compliance u/s. 131 issued by AO is noticed. Radhe Corporation Prop. Deepak Madanlal Maliwal HUF PAN AAJHD3877L 30,50,006 30,50,006 NIL 65 165 Confirmation /PAN/TDS /bank statement/ITR copy filed and on record. Creditor's Compliance u/s. 131 issued by AO is noticed. Shree Ram Corporation Prop. Rajmal Nanlal Maliwal PAN: ACGPM2788M 25,28,849 25,28,849 NIL 81-82 165 Confirmation /PAN/TDS /bank statement/ITR copy filed and on record. Creditor's Compliance u/s. 131 issued by AO is noticed. C R Maliwal & Co. Prop. Priyanka Jaimin Mantri PAN : AVHPM8792R 40,50,893 40,50,893 NIL 97 165 Confirmation /PAN/TDS /bank statement/ITR copy filed and on record. Creditor's Compliance u/s. 131 issued by AO is noticed. Yankee Management Services Pvt Ltd 45,09,320 45,09,320 NIL 106 165 Confirmation /PAN/TDS /bank statement/ITR copy filed and on record. Creditor's Compliance u/s. 131 issued by AO is noticed. The information as figuring in table above including compliance u/s. 131 issued by AO is sufficient for the undersigned to take valid decision for addition u/s.68 made by AO The appellant has relied on the ratio of following case laws: Rohini Builders vs. CIT 256 ITR 360 (Guj.). Namision Power Tech Pvt. Ltd -vs.ACIT-167 ITD 483 (Ahd ITAT) (21.09.2017) Aravalli Trading Company Vs.ITO-220 CTR 622 (Raj.) I have examined the ratio laid down in above case laws and find it to be favouring the appellant. I have come across a similar ratio from jurisdictional High Court in the case of CIT V/S RANCHHOD JIVABHAI NAKHAVA reported at 208 Taxmann 35 wherein it is held - "Once the Assessing Officer gets hold of the PAN of the lenders, it was his duty to ascertain from the Assessing Officer of those lenders, whether in their respective retur they had shown existence of such amount of money and had further shown that those amounts of money had been lent to the assessee. If before verifying of such fact from the Assessing Officer of the lenders of the assessee, the Assessing Officer decides to examine the I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 6 lenders and asks the assessee to further prove the genuineness and creditworthiness of the transaction, in our opinion, the Assessing Officer did not follow the principle laid down under Section 68 of the Income Tax Act. If on verification, it was found that those lenders did not disclose in their income tax return the transaction or that they had not disclosed the aforesaid amount, the Assessing Officer could call for further explanation from the assessee to prove the genuineness of the transaction or creditworthiness of the same. However, without verifying such fact from the income tax return of the creditors, the action taken by the Assessing Officer in examining the lenders of the assessee was a wrong approach. Moreover, we find that those lenders have made inconsistent statement as pointed out by the Commissioner of Income Tax (Appeals) and in such circumstances, we find that both the Commissioner of Income Tax (Appeals) and the Tribunal were justified in setting aside the deletion as the Assessing Officer, without taking step for verification of the Income Tax Return of the creditors, took unnecessary step of further examining those creditors. If the Assessing Officers of those creditors are satisfied with the explanation given by the creditors as regards those transactions, the Assessing Officer in question has no justification to disbelieve the transactions reflected in the account of the creditors. In other words, the Assessing Officer had no authority to dispute the correctness of assessments of the creditors of the assessee when a co-ordinate Assessing Officer is satisfied with the transaction. We, thus, find that in the case before us the Tribunal below rightly set- aside the deletion made by the Assessing Officer, based on erroneous approach by wrongly shifting the burden again upon the assessee without verifying the Income Tax return of the creditors. The position, however, would have been different if those creditors were not income tax assessees or if they had not disclosed those transactions in their income tax returns or if such returns were not accepted by their Assessing Officers." The onus has been discharged by the appellant. The confirmations have been filed giving PAN No. of the creditors. The creditworthiness of the creditor(s) cannot be decided by the AO of the appellant. In fact, the AO of appellant can get the matter investigated through the AO of the creditors. The AO of appellant cannot become AO of the creditors. It is not the case of AO that the impugned amount is appellant's own money generated out of books of account and the same is introduced in its books of accounts through bogus creditors. If that is so, what evidences AO has collected to place it on record. Once confirmations have been filed, further action, if any, is required to be taken in case of creditor and not in case of appellant. Explanation about 'source of source' or 'origins of origin' cannot be asked from the appellant while making inquiry under section 68 as per ratio laid down in the case of DCIT v. Rohini Builders (2002) 256 ITR 360 (Guj): "Mere identification of the source of the creditors even without evidence as to the nature of the income could justify acceptance, where the assesseee has given the GIR number /PAN of the creditor and also shows that the amounts were received by account payee cheques. It was further held that it is not necessary, that there should be an explanation as to the source of the money on the part of the creditors in every case." I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 7 Reliance is also placed on another case i.e. CIT vs. Dharamdev Finance Pvt. Ltd. 43 Taxmann 395 (Guj.) wherein it is held, "No addition on account of cash credits could be made, where assessee had given PAN of creditors, their confirmations and their bank statements which established their creditability" There are other case laws supporting the case of the appellant 1) Murlidhar Lahorimal Vs. CIT 280 ITR 512 (Guj.) ii) CIT VS. Pragati Co-op. Bank Ltd. 278 ITR 170 (Guj.) iii) CIT Vs. Orissa Corporation Pvt. Ltd. 159 ITR 78 (SC) iv) CIT vs. Sanjay K. Thakkar Tax Appeal Nos.524 of 2004, 525 and 526 of 2004 and 579 to 583 of 2003 dated 12-9-2005 (Guj. HC) v) ITO VS Kailpar Credit & Mercantile Pvt. Ltd. in ITA No.421/Ahd/2008 (ITAT, Ahd.) I am not inclined to accept the findings of the A.O. Appellant can't be punished for default, if any, of related party as it has been held in CIT VS. CARBO IND HOLD LTD 244 ITR 0422 (Cal) such as "if share broker, even after issue of summons does not appear, for that reason, the claim of assessee should not be denied, especially in the cases when the existence of broker is not in dispute, nor the payment is in dispute. Merely because some broker failed to appear, assessee should not be punished for the default of a broker and on mere suspicion the claim of assessee should not be denied." The plethora of evidences on record cannot be ignored. In view of facts of the case and the ratio laid down by case laws (Supra), the addition made by the AO of Rs.2,25,00,000/- u/s. 68 of the I. T. Act, 1961 is hereby deleted. As regards interest claim of Rs.3,10,356/-, the assessing officer has made addition as per para 5 of assessment order of an amount of Rs.3,10,356/-, the interest claim on the amount which according to him was unproved cash credits. The appellant has submitted as under: "The assessee firm had deducted TDS on payment of Interest to these depositors and TDS has been paid to the credit of Central Government and TDS returns have been filed. The copies of TDs returns have been filed along with Challans and Interest a/c on Pg No. 147 to 151 of Paper Book Therefore, there is no doubt that these deposits are not genuine." I have carefully examined the submission of the appellant and the facts brought on record. The findings of the AO have not been approved and the addition u/s.68 of impugned principle amount has been deleted as per finding contained above in this order. Consequently, the interest claim of Rs.3,10,356/- is also allowed. The addition of Rs.3,10,356/- made by AO is hereby deleted. The ground No. 1 & 2 are allowed. 5. Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal: I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 8 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.2,25,00,000/- made by A.O. on account of unsecured loans u/s 68 of IT Act. 2. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made by A.O. on account of interest expenses amounting to Rs.3,10,356/-. 3. On the facts and circumstances of the case, the ld Commissioner of Income-tax (A) ought to have upheld the order of the Assessing Officer in respect of above issues. 4. It is, therefore, prayed that the order of the Ld. Commissioner of Income-tax (A) may be set-aside and that of the Assessing Officer be restored. 5.1. The Ld. Sr. D.R. appearing for the Revenue supported the order passed by the Assessing Officer and pleaded that the additions to be restored. 6. Per contra, the Ld. Senior Counsel Shri S.N. Soparkar appearing for the Assessee submitted before us a Paper Book containing various details of the creditors namely ledger account, contra account, Income Tax Return copies, Bank Statements, Balance Sheet and Profit and Loss account which were all submitted before the Assessing Officer as well as before Ld. CIT(A). The Ld. Senior Counsel also submitted before us a list of Judgments rendered by Hon’ble Gujarat High Court in support of its arguments namely: (i) CIT vs. Ranchhod Jivabhai Nakhava [2012] 21 taxmann.com 159 held as follows: “Section 68 of the Income-tax Act, 1961 Cash credits - Assessment year 2006-07 - Whether once assessee has established that he has taken money by way of account payee cheques from lenders who are all income tax assessees whose PAN have been disclosed, initial burden under section 68 is discharged and then, it is Assessing Officer's duty to ascertain from Assessing Officer of those lenders, whether in their respective returns they have shown existence of such amount of money and have further shown that those amount of money had been lent to assessee Held, yes Whether if Assessing Officers of those creditors are satisfied with explanation given by creditors as regards those transactions, Assessing Officer in question has no justification to disbelive I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 9 transactions reflected in account of creditors - Held, yes Whether if before verifying such fact from Assessing Officer of lenders of assessee, Assessing Officer decides to examine lenders and asks assessee to further prove genuineness and creditworthiness of transactions, it would be against principles laid down under section 68 - Held, yes [In favour of assessee]” (ii) In the case of PCIT vs. Chartered Speed Pvt. Ltd. in Tax Appeal No. 126 & 127 of 2015 order dated 03/03/2015 held as follows: 6. The attempt made to contend that the burden is upon the assessee to prove the identity of the person, creditworthiness of the person and the genuineness of the transaction are to be examined in context to the existence of the person concerned, the factum of actual money in possession of the person and having paid to the asseessee and the mode of payment. Thereafter, if the person concerned is in existence and has actually paid the amount from his account by cheque, it can be said that the initial burden is discharged so far as explanation to be considered under section 68 of the Act. Thereafter, the burden would be upon the revenue to show that either the person was bogus or there was no financial capacity to make the payment and the arrangement of money was artificial or that the money has not passed over and it was only by way of an eye wash. Such could be proved by the Revenue in the present case through the statement of the persons, but unfortunately, they were not made available for cross-examination and therefore, the statements could be used as an evidence against the asseessee. No other evidence was available with the Revenue. 7. Under these circumstances, if the Tribunal has found that the explanation under section 68 of the Act was acceptable in absence of non-discharge of the burden upon the Revenue, such a finding of fact would not call for interference when the appeal before this Court is limited to the substantial questions of law. The decision upon which the reliance has been placed by Mr. Bhatt in Tax Appeal No.800/12 (supra) is of no help to the Revenue because the facts and circumstances of the present case cannot be equated with the facts of the said case considered by this Court. It is hardly required to be stated that whether the explanation is sufficient or not would essentially depend upon the facts and circumstances of each case. But the principle remains that once the initial burden is discharged by the assessee, it would be for the Revenue to show that the transaction was bogus leading to conclusion for discarding of the explanation. In the present case, as observed by us hereinabove, the burden was not discharged and therefore the Tribunal has held in favour of the assessee. We do not find that any substantial question of law would arise for consideration in the present appeals, as canvassed. I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 10 8. Hence, the appeals are meritless and therefore, dismissed. (iii) In the case of CIT vs. Himatsu Bimet Ltd. [2011] 12 taxmann.com 87 held as follows: “Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1997-98 - Assessee was a company, engaged in manufacturing of beamless strips and bearings at its factory - In assessment proceedings, assessee was asked to give details of unexplained share application money Since assessee was avoiding giving details without reasonable cause, Assessing Officer made addition to assessee's income by way of unexplained share application money - On appeal, Commissioner (Appeals) upheld order of Assessing Officer - On second appeal, Tribunal noticed that assessee had filed confirmations from all share applicants with details of share capital paid which contained details such as full addresses, permanent account numbers and tax jurisdiction of depositors Tribunal further noted that all payments were received by cheques and were credited in bank account of assessee; share application forms contained all details of depositors; their confirmations were clear with all addresses; and that they were on departmental records as taxpayers - In aforesaid factual background, Tribunal was of view that assessee had sufficiently discharged its burden of explaining source of share application money; accordingly, it deleted impugned addition - Whether, on facts, impugned order of Tribunal did not suffer from any legal infirmity so as to warrant interference.” (iv) The Jurisdictional High Court in the case of DCIT vs. Rohini Builders [2003] 127 taxmann.com 523 held as follows: “Section 68 of the Income-tax Act, 1961 - Cash Credits - Assessing Officer made addition of Rs. 12,85,000/- as unexplained cash credits in respect of loans taken by assessee from 21 parties - Assessee had discharged initial onus by providing identity of all creditors by giving their complete addresses, GIR numbers/permanent account numbers and copies of assessment orders wherever readily available Assessee had also proved capacity of creditors by showing that amounts were received by account payee cheques drawn from bank accounts of creditors - Repayment of loans and interest thereon was also made by account payee cheques by assessee and tax also had been deducted at source on interest payments and remitted - Whether assessee was not expected to prove genuineness of cash deposited in bank accounts of creditors, because under law, assessee can be asked to prove source of credits in its books of account but not source of source Held, yes Whether merely because summons issued to some of creditors could not be served or they failed to appear before Assessing Officer, could not be ground to treat those credits as non- genuine Held, yes Whether considering totality of facts and circumstances I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 11 of case, especially fact that Assessing Officer had not disallowed interest claimed/paid in relation to those credits in assessment year under consideration or even in subsequent assessment years, and tax at source had been deducted out of interest paid/credited to creditors, Tribunal was justified in deleting addition made - Held, yes Whether as there was no substance in appeal and no substantial question of law arose, appeal was liable to be dismissed.” (v) In the case of CIT vs. Ayachi Chandrashekhar Narsangji [2014] 42 taxmann.com 251 held as follows: “Section 68, read with section 143, of the Income-tax Act, 1961 - Cash credit [Loans] - Assessment year 2006-07 Assessing Officer framed assessment under section 143(3) wherein he made addition of Rs. 1.45 crore under section 68 on ground that loan taken from one 'IA' was not explained satisfactorily - On appeal, Commissioner (Appeals) was satisfied with respect to genuineness of transaction and creditworthiness of 'IA' and, therefore, deleted addition - It was found that total loan of Rs. 1.60 crore was advanced to assessee, out of which Rs.15 lakh was repaid Therefore, an amount of Rs.1.45 crore remained outstanding to be paid to 'IA' - Balance loan amount was repaid by assessee in immediately next financial year Whether when Department had accepted same, addition made by Assessing Officer was to be deleted - Held, yes [Para 6] [In favour of assessee]” 6.1. Thus Ld. Senior Counsel submitted the additions made by the A.O. u/s. 68 is not sustainable in law and the assessee has repaid the entire unsecured loan during the assessment year 2016-17 and also paid interest thereon with appropriate TDS, then the question of disallowance does not arise. Therefore the findings given by the Ld. CIT(A) does not require any interference and the Revenue appeal is liable to be dismissed. 7. We have given our thoughtful consideration and perused the materials available on record. It is seen from the assessment order and the appellate order that the assessee has given confirmation details namely ledger account, contra account, ITR details and creditors compliance u/s. 131 issued by the A.O. Still not satisfied I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 12 with the information submitted, only on the ground that the Returned income of the creditors are not commensurate to the loans disbursed by them. Therefore the A.O. made the addition u/s. 68 of the Act. The A.O. also has not given due credit to the TDS made by the assessee on the interest payment as well as the repayment of the above loans by the assessee during the assessment year 2016-17. 8. It is well settled principle of law by the Jurisdictional High Court in the case of CIT vs. Ranchhod Jivabhai Nakhava that Where lenders of assessee are income-tax assessees whose PAN have been disclosed, Assessing Officer cannot ask assessee to further prove genuineness of transactions without first verifying such fact from income-tax returns of the lenders. 9. Further when the loan is repaid by the assessee in the subsequent assessment years, the Hon’ble Jurisdictional High Court in the case of CIT vs. Ayachi Chandrashekhar Narsangiji held that where department had accepted repayment of loan in subsequent year, no addition was to be made in current year on account of cash credit. 10. Respectfully following the above Jurisdictional High Court Judgments, we have no hesitation in confirming the order passed by the Ld. CIT(A) deleting the addition made u/s. 68 of the Act as well as disallowance of interest expenses by the Assessing Officer. Thus the grounds raised by the Revenue is devoid of merits and liable to be dismissed. I.T.A No. 1294/Ahd/2018 A.Y. 2015-16 Page No DCIT vs. M/s. Neelkanth Developers 13 11. In the result, the appeal filed by the Revenue is hereby dismissed. Order pronounced in the open court on 12-04-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 12/04/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद