M/s. R. Kantilal & Co., Ahmedabad V. The ACIT, Central Circle-1, Surat

ITA 1335/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9164 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Source of fund; Question of law
• Section: 234B; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 1335/AHD/2014 (ASSESSMENT YEAR: 2011-12) M/S. R KANTILAL & CO. 105, 1 ST FLOOR, VRUJSWAMI COMPLEX, DOSHIWADANI POLE, ZAVERIWAD, AHMEDABAD-380002 V/S ACIT, CENTRAL CIRCLE-1, SURAT (APPELLANT) (RESPONDENT) PAN: AAIFR2867E APPELLANT BY : URVASHI SODHAN, A.R. RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. ( )/ ORDER DATE OF HEARING : 10 -02-201 7 DATE OF PRONOUNCEMENT : 16 -02-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A)-II, AHMEDABAD DATED 11.02.2014 PE RTAINING TO A.Y. 2011- 12. ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 2 2. THE GRIEVANCE OF THE ASSESSEE IS TWOFOLD. FIRSTLY, THE ASSESSEE IS AGGRIEVED BY THE ADDITION MADE BY THE A.O. AND CONFIRMED BY T HE LD. CIT(A) AMOUNTING TO RS. 42.20 LACS ON ALLEGED UNEXPLAINED CASH CREDITS OF RS. 48.18 LACS MADE U/S. 68 OF THE ACT. SECONDLY, THE ASSESSE E IS FURTHER AGGRIEVED BY THE DISALLOWANCE OF INTEREST PAID TO THE CASH CREDI TORS TO THE EXTENT OF RS. 1,83,878/- ON THE GROUND THAT THE CASH CREDITS WERE HELD AS NON GENUINE. 3. THE ASSESSEE DERIVES INCOME FROM BUSINESS OF COURIE R IN RESPECT OF POST PARCEL, PACKET AND CASH ETC. A SEARCH ACTION U/S. 1 32A OF THE ACT WAS CARRIED OUT IN THE CASE OF SHRI JAGDISH R. PATEL ON 16.04.2010. SOME UNACCOUNTED CASH WAS FOUND AND SEIZED WHICH WAS OFF ERED FOR TAXATION BY THE ASSESSEE FOR THE A.Y. 2011-12. 4. SUBSEQUENTLY, THE ASSESSEE WAS SERVED WITH A NOTICE IN REPLY TO WHICH THE ASSESSEE STATED THAT THE RETURN FILED ON 27.08.2011 MAY BE TREATED IN RESPONSE TO THE SAID NOTICE. 5. STATUTORY NOTICE U/S. 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF THE SCRUTINY ASSESSM ENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS INTRODUCED FRESH LOANS OF RS. 48.18 LACS FROM 19 CASH CREDITORS. THE ASSESSEE WAS ASKED TO J USTIFY THE GENUINENESS OF THE LOAN TRANSACTIONS AND THE CREDITWORTHINESS O F THE CASH CREDITORS. ASSESSEE FILED CONFIRMATIONS ALONG WITH THE COPIES OF THE INCOME TAX RETURNS IN RESPECT OF ALL 19 CASH CREDITORS. IN ORD ER TO CHECK THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE CAS H CREDITORS, SUMMONS ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 3 U/S. 131 OF THE ACT WERE ISSUED TO THE CASH CREDITO RS AND THEIR STATEMENTS WERE RECORDED ON OATH. 6. PURSUANT TO THE STATEMENTS OF ALL THE 19 CASH CREDI TORS, THE A.O. WAS OF THE OPINION THAT ALL THE CASH CREDITORS ARE NOT GENUINE . THE A.O. ACCORDINGLY ISSUED A SHOW CAUSE TO THE ASSESSEE ASKING IT TO SH OW CAUSE WHY ADDITION OF RS. 48.18 LACS SHOULD BE MADE ON ACCOUNT OF UNEXPLA INED CASH CREDITORS. THE ASSESSEE WAS ALSO PROVIDED WITH CERTIFIED PHOTO COPIES OF THE STATEMENTS OF ALL THE CASH CREDITORS AND ACCORDINGL Y WAS ALLOWED AN OPPORTUNITY FOR CROSS-EXAMINATION OF THE CREDITORS. 7. IN RESPONSE, THE ASSESSEE FILED A DETAILED REPLY AS UNDER:- (I) HE STATED THAT YOUR OFFICE HAS ISSUED NINETEEN SUMM ONS TO THE 'ALLEGED CASH CREDITORS' WHO ARE UNEDUCATED AND WERE ATTENDI NG BEFORE ANY INCOME-TAX AUTHORITIES FOR THE FIRST TIME IN THEIR LIFE AND WERE AFRAID OF GIVING TRUE AND CORRECT PICTURE OF FACTS. FURTHER, MOST OF THEM WERE ACQUAINTED WITH ONLY GUJARATI LANGUAGE AND BY EXPER IENCE ONLY, THEY WERE HAVING WORKING KNOWLEDGE OF SPOKEN HINDI (NOT HAVING KNOWLEDGE OF WRITING OR READING HINDI). YOUR HONOUR IS VERY M UCH FLUENT AND PERFECT IN HINDI AND PERHAPS, THESE NINETEEN 'ALLEGED CASH CREDITORS' WERE UNABLE TO UNDERSTAND YOUR QUESTION IN THE VERY FIRST ATTEM PT AND IN SUCH CIRCUMSTANCES, WE ARE AFRAID THAT THE STATEMENT REC ORDED BY YOUR HONOUR MAY NOT BE DEPICTING THE CORRECT AND REAL PICTURE O F FACTS. (II) FURTHER, ALL THESE NINETEEN 'ALLEGED CASH CREDITORS ' ARE FROM VILLAGES HAVING AGRICULTURAL ACTIVITIES AS THEIR MAIN BREAD AND BUTTER AND EVERY AGRICULTURIST FATHER WOULD WISH AND TRY TO SUPPORT' AND PUSH HIS SON OR YOUNG FAMILY MEMBERS TO PROGRESS IN SOME OTHER BUSI NESS ACTIVITIES AND FOR THIS PURPOSE, HE WOULD DEFINITELY TRY TO HELP H IM BY GIVING FINANCIAL SUPPORT BY APPLYING HIS LIFE TIME SAVING AND/OR EVE N BY PROVIDING FINANCE BY BEG-BORROW OR STEAL IF YOU ANALYSES ALL THESE NINETEEN 'ALLEGED CASH CREDITORS', TWELVE 'ALLEGED CASH CR EDITORS' AMOUNTING TO RS.35.20 LACS ARE TAKEN UP AS PARTNERS IN THE SUBSE QUENT YEAR. THEY WERE ALSO MOST EFFICIENT EMPLOYEES OF THE FIRM AND SINCE , DURING MOST CRITICAL PERIOD, AND (WHEN THE CAPITAL WAS BLOCKED IN SEIZUR E BY POLICE) WHEN THE FIRM WAS IN NEED OF INSTANT FINANCE SUPPORT, THEY H AD WHOLE HEARTEDLY ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 4 SUPPORTED THE FIRM BY ARRANGING FINANCE TOWARDS WOR KING CAPITAL REQUIREMENT AND IN TOKEN OF APPRECIATION, THE SENIO R PARTNERS INVITED THEM TO BECOME PARTNER IN THE FIRM. IT WOULD NOT BE OUT OF PLACE TO INVITE YOUR KIND ATTENTION TO THE FACT THAT OUT OF THESE T WELVE DEPOSITORS, SIX DEPOSITORS HAVE JUST CONTRIBUTED ONE OR TWO LACS IN ACCORDANCE WITH THEIR CAPACITY AND ABILITY. EVEN THE INCOME-TAX DEPARTMEN T DOES NOT TAX ANYTHING ON BASIC INCOME OF RS.2 LACS AND THEREFORE, IN OUR HUMBLE SUBMISSIONS, CONTRIBUTIONS OF RS.L LACS OR R S.2 LACS IS NOT A BIG ALARMING SUM SUCH THAT YOUR OFFICE DOES NOT BELIEVE SUCH PEETY SUM AS SAVINGS OF PAST YEARS OF THE FAMILY OR OF THE DEPOS ITORS. IN TODAY'S ERA AND FASTLY GROWING ECONOMY, SUM OF RS.L LACS OR RS .2 LACS WOULD BE AVAILABLE WITH SMALL BUSINESSMAN OR AGRICULTURIST AND FOR SUCH INCOME OR SAVINGS, THE AGRICULTURIST WOULD NOT CARE OR FEEL I T NECESSARY TO KEEP AND MAINTAIN RECORDS OF PURCHASE OR SALE OR OF EXPENSES INCURRED FOR EARNING THAT INCOME AND FOR THIS REASON ONLY, YOUR HONOUR H AS PROPOSED TO REJECT OR DISBELIEVE HIS IDENTITY, CAPACITY, CREDITWORTHIN ESS AND EVEN THE GENUINENESS. GENUINENESS OF TRANSACTIONS IS OUT OF QUESTION CONSIDERING THE PRESENCE AND FINAL REPLY GIVEN BY THEM. YOUR HO NOUR HAS ALSO NOTED THAT YOURSELF ARE FROM THE SAME AGRO BASED FIELD BU T, WITH DUE RESPECT, WE STATE THAT AGRICULTURAL INCOME DEPENDS NOT ONLY ON THE AREA OF THE LAND BUT ALSO ON THE LOCATION OF LAND, ENVIRONMENT AND A TMOSPHERE OF THE AREA, RAINFALL, AVAILABILITY OF WATER, TYPE OF IRRIGATION , TYPE OF CROP, METHOD OF AGRICULTURE, TYPE OF SEEDS, THE TYPE OF FERTILIZERS APPLIED, ETC. ETC. AND THEREFORE, IT WOULD BE VERY DIFFICULT TO APPLY A GE NERAL RATE OF INCOME PER BIGHAS OF LAND HOLDING. (III) FURTHER, NONE OF THE 'ALLEGED CASH CREDITORS' HAVE DENIED OF GIVING FUND TO THE FIRM AND ALMOST ALL HAVE NOT ONLY GIVEN DETAILS OF FIRST SOURCE OF FUNDS BUT THEY HAVE ALSO PROVIDED SECOND SOURCE OF FUND A ND ACCORDINGLY, WE HUMBLY STATE THAT NONE OF THEM ARE BOGUS AND IN GEN UINE. THE LOANS ARE GIVEN THROUGH CHEQUES. (IV) FURTHER, IN VILLAGES OF GUJARAT, INCOME OF INDIVIDU AL PERSON IS NOT IMPORTANT OR IS NOT RECOGNIZED BUT, THE FAMILY INCO ME MATTERS MORE WHICH MEANS, FAMILY FUND AND FAMILY INCOME IS CONSIDERED TO BE EVERYONE'S OWN INCOME AND OWN FUND AND THEREFORE, YOUR HONOUR WOUL D OBSERVE AT SOME POINT OF TIME THAT, SOME DEPOSITORS ARE UNABLE TO D ISTINGUISH AND/OR IDENTITY, INDIVIDUAL INCOME AND/OR FAMILY INCOME. T HE COLLECTIVENESS AND UNITY ARE THE BASIC PRINCIPLES ON WHICH, THE VILLAG ERS' ECONOMY IS DEPENDENT. (V) OF COURSE, GOING THROUGH THE STATEMENTS, THERE ARE CERTAIN LOOSE ENDS BUT, THESE LOOSE ENDS SHOULD NOT TO BE READ AND CONSIDER ED AS MOST NEGATIVE POINTS, BUT, THE SAME BE READ WITH REFERENCE TO THE ABOVE NOTED MAIN WEAKNESSES AND EXPLANATIONS. ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 5 IN NUT SHELL, ALL THE 'ALLEGED CASH CREDITORS' FULFI LL THE THREE PRINCIPLES NAMELY, CAPACITY TO LAND, CREDITWORTHINESS OF THE DEPOSITOR S AND GENUINELY OF THE TRANSACTIONS. 8. THE A.O. CONSIDERED THE DETAILED SUBMISSIONS MADE B Y THE ASSESSEE IN THE LIGHT OF THE STATEMENTS OF ALL THE 19 CASH CREDITOR S AND CAME TO THE CONCLUSION THAT THE ASSESSEE COULD NOT SATISFY ALL THE TWO CONDITIONS TO PROVE THE GENUINENESS OF CASH CREDITORS, THEIR CRED ITWORTHINESS, THOUGH ONLY ONE CONDITION THAT IS IDENTITIES HAVE BEEN EST ABLISHED. THE A.O. ACCORDINGLY ADDED RS. 48.18 LACS AS UNEXPLAINED CAS H CREDITS APPEARING IN THE NAME OF THE FOLLOWING PERSONS:- SR.NO NAME OF THE CASH CREDITORS AMOUNT OF CASH CREDIT 1 SHRI ASHISH S PATEL RS.1.00 LACS 2 SHRI ASHISH P PATE L RS.2.00 LACS 3 SHRI BHAVESH R PATE L RS.1.00 LACS 4 SHRI CHETANKUMAR R PATE L RS.5.20 LACS 5 SHRI CHANDRESH M PATEL RS.1.00 LACS 6 SHRI DHAVALKUMAR M PATEL RS.2.00 LACS 7 SHRI DINESH K PATEL RS.4.00 LACS 8 SHRI HASMUKH A PATEL RS.2.00 LACS 9 SHRI JAGDISHKUMAR R PATEL RS.2.00 LACS 10 S HRI J IGNESH N PATEL RS.98,000/ - 11 SHRI KALESH B PATEL RS.5.00 LACS 12 SHRI NIRAJ D PATEL RS.2.00 LACS 13 SHRI PARESH PRAJAPATI RS.1.00 LACS 14 SHRI RAMESH A PATEL RS.2.00 LACS ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 6 15 SHRI ANIL H PATEL RS.1.00 LACS 16 SHRI RAMESH A PATE L RS.4.00 LACS 17 SHRI RAKESH B PATEL RS.4.00 LACS 18 SHRI SANJAY B PATEL RS.4.00 LACS 19 SHRI SATISH K PATEL RS.4.00 LACS TOTAL CASH CREDITORS 48,18,000 / - 9. THE A.O. FURTHER DISALLOWED THE CLAIM OF INTEREST P AID TO THE AFOREMENTIONED UNEXPLAINED CASH CREDITORS AND MADE AN ADDITION OF RS. 2,00,775/-. 10. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND ASSAILED THE ASSESSMENT ORDER. 11. THE ASSESSEE STRONGLY CONTENDED THAT IT HAS DISCHAR GED THE INITIAL ONUS BY ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GEN UINENESS OF THE TRANSACTION. THEREFORE, THE ADDITION MADE BY THE A. O. IS UNWARRANTED AND UNCALLED FOR AND THE SAME SHOULD BE DELETED. 12. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE MATERIAL EVIDENCE BROUGHT ON RECORD, THE LD. CIT(A) WAS CONVINCED WIT H THE GENUINENESS OF THE CASH CREDITS AMOUNTING TO RS. 3.98 LACS AND AL LOWED THE RELIEF TO THAT EXTENT AND CONFIRMED THE BALANCE. 13. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT THE ASSESSEE HAS CO MPLETELY DISCHARGED ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 7 THE INITIAL ONUS. IT IS THE SAY OF THE LD. COUNSEL THAT NOT ONLY THE IDENTITIES WERE ESTABLISHED BUT GENUINENESS OF THE TRANSACTION S AND THE CREDITWORTHINESS OF THE CASH CREDITORS HAVE BEEN FU LLY ESTABLISHED. REFERRING TO THE RELEVANT DOCUMENTARY EVIDENCES BRO UGHT ON RECORD IN THE FORM A PAPER BOOK, THE LD. COUNSEL DREW OUR ATTENTI ON TO THE COPIES OF THE INCOME TAX RETURNS OF ALL THE CASH CREDITORS WHICH WERE DULY SUPPORTED BY THE COPIES OF THE RESPECTIVE BANK STATEMENTS. THE L D. COUNSEL ALSO POINTED OUT THAT ALL THE CASH CREDITORS HAVE CONFIRMED THE LOAN TRANSACTIONS IN THEIR RESPECTIVE STATEMENTS RECORDED BY THE A.O. 14. THE LD. COUNSEL HEAVILY RELIED UPON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF RANCHHOD JIVABHAI NAKHAVA 208 TAXMANN.COM 35 AND ON ANOTHER DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF ROHINI BUILDERS 256 ITR 360. THE LD. COUNSEL CONCLUDED BY SAYING THAT SINCE THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE INITIAL ONUS; NO ADDITI ON CAN BE MADE U/S. 68 OF THE ACT. 15. PER CONTRA, THE LD. D.R. STRONGLY RELIED UPON THE F INDINGS OF THE LOWER AUTHORITIES. IT IS THE SAY OF THE LD. D.R. THAT TH E ASSESSEE FAILED TO PROVE THE CREDITWORTHINESS OF ALL THE CASH CREDITORS. 16. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW QUA THE RIVAL CONTENTIONS. WE HAVE ALSO CAREF ULLY PERUSED THE ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 8 RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER BOOK IN THE LIGHT OF RULE 18(6) OF THE ITAT RULES. 17. THE UNDISPUTED FACT IS THAT ALL THE CASH CREDITORS IN RESPONSE TO THE SUMMONS ISSUED TO THEM BY THE A.O. U/S. 131 OF THE ACT APPEARED BEFORE THE A.O. IT IS ALSO AN UNDISPUTED FACT THAT IN THEI R RESPECTIVE STATEMENTS RECORDED BY THE A.O., ALL THE CASH CREDITORS HAVE A CCEPTED THE LOAN TRANSACTIONS. WE ALSO FIND THAT ALL THE CASH CREDIT ORS HAVE FURNISHED THE DETAILS OF THEIR SOURCES OF INCOME. 18. THE HONBLE HIGH COURT OF GUJARAT IN A BINDING JUDG MENT IN THE CASE OF RANCHHOD JIVABHAI NAKHAVA (SUPRA) HAS OBSERVED AS U NDER:- ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSESSING OFFICER OF THOSE LENDE RS, WHETHER IN THEIR RESPECTIVE RETURN THEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF M ONEY AND HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HAD BEEN LENT TO T HE ASSESSEE. IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER O F THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECIDES TO EXAMINE THE LENDER S AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, IN OUR OPINION, THE ASSESSING OFFICER DID NOT FOLLOW THE P RINCIPLE FOLD DOWN UNDER SECTION 68 OF THE INCOME TAX ACT. IF ON VERIFICATION, IF WAS FOUND THAT THOSE LENDERS DID NOT DISCLOSE IN THEIR INCOME TAX RETURN THE TRANSACTION OR THAT THEY HAD NOT DIS CLOSED THE AFORESAID AMOUNT, THE ASSESSING OFFICER COULD CALL FOR FURTHER EXPLAN ATION FROM THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION OR CREDITWORTHIN ESS OF THE SAME. HOWEVER, WITHOUT VERIFYING SUCH FACT FROM THE INCOME TAX RET URN OF THE CREDITORS, THE ACTION TAKEN BY THE ASSESSING OFFICER IN EXAMINING THE LENDERS OF THE ASSESSEE ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 9 WAS A WRONG APPROACH. MOREOVER, WE FIND THAT THOSE LENDERS HAVE MADE INCONSISTENT STATEMENT AS POINTED OUT BY THE COMMIS SIONER OF INCOME TAX (APPEALS) AND IN SUCH CIRCUMSTANCES, WE FIND THAT B OTH THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL WERE JUSTIFIE D IN SETTING ASIDE THE DELETION AS THE ASSESSING OFFICER, WITHOUT TAKING STEP FOR V ERIFICATION OF THE INCOME TAX RETURN OF THE CREDITORS, TOOK UNNECESSARY STEP OF F URTHER EXAMINING THOSE CREDITORS. IF THE ASSESSING OFFICERS OF THOSE CREDI TORS ARE SATISFIED WITH THE EXPLANATION GIVEN BY THE CREDITORS AS REGARDS THOSE TRANSACTIONS, THE ASSESSING OFFICER IN QUESTION HAS NO JUSTIFICATION TO DISBELI EVE THE TRANSACTIONS REFLECTED IN THE ACCOUNT OF THE CREDITORS. IN OTHER WORDS, THE A SSESSING OFFICER HAD NO AUTHORITY TO DISPUTE THE CORRECTNESS OF ASSESSMENTS OF THE CREDITORS OF THE ASSESSEE WHEN A CO-ORDINATE ASSESSING OFFICER IS SA TISFIED WITH THE TRANSACTION. 19. THE HONBLE SUPREME COURT IN THE CASE OF ORISSA COR PORATION LTD. 159 ITR 78, ON SIMILAR FACTS, HAS HELD AS UNDER:- HELD, THAT IN THIS CASE THE RESPONDENT HAD GIVEN T HE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE R EVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER SECTI ON 131 AT THE INSTANCE OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO F IND OUT WHETHER THEY WERE CREDITWORTHY. THERE WAS NO EFFORT MADE TO PURSUE TH E SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION TH AT THE RESPONDENT HAD DISCHARGED THE BURDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVIDENCE ON WHICH A CO NCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH AROSE. THE HIGH COUR T WAS RIGHT IN REFUSING TO STATE A CASE. ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 10 20. IF THE FACTS OF THE CASE IN HAND, AS MENTIONED HERE INABOVE ARE CONSIDERED IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE SUP REME COURT AND THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT, WE HA VE NO HESITATION IN HOLDING THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARG ED THE INITIAL ONUS CAST UPON IT BY THE PROVISIONS OF SECTION 68 OF THE ACT. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE IMPUGNED ADDITIONS MADE BY TH E A.O. WE, ACCORDINGLY, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 42.20 LACS. GROUND NO. 1 IS ALLOWED . 21. THE NEXT GROUND RELATES TO THE DISALLOWANCE OF INTE REST PAID TO THE CASH CREDITORS AS THE CASE CASH CREDITS WERE HELD AS NON GENUINE. 22. SINCE, WE HAVE DIRECTED THE A.O. TO DELETE THE ADDI TIONS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS, THERE REMAINS NO REASO N WHY THE INTEREST PAID ON SUCH CASH CREDITS SHOULD BE DISALLOWED. WE, THER EFORE, DIRECT THE A.O. TO ALLOW THE CLAIM OF INTEREST PAID TO SUCH CASH CREDI TORS. THIS GROUND IS ALSO ALLOWED. 23. THE NEXT GRIEVANCE RELATES TO THE LEVY OF INTEREST U/S. 234A, 234B & 234C OF THE ACT. THE CHARGE OF INTEREST IS MANDATORY, THOUG H CONSEQUENTIAL. THEREFORE, THE A.O. IS DIRECTED TO LEVY INTEREST AS PER THE PROVISIONS OF LAW. 24. THE NEXT GRIEVANCE RELATES TO THE INITIATION OF PEN ALTY U/S. 271(1)(C) OF THE ACT. THIS GRIEVANCE IS PREMATURE AND, THEREFORE, NO T ENTERTAINED. ITA NO. 1335 /AHD/2014 . A.Y. 2011-1 2 11 25. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 16- 02- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 16/02/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD