The Dy. Commissioner of Income Tax, Circle-1(1)(2), Surat V. M/s. Kejriwal Industries Ltd., Surat

ITA 1509/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2063 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 07-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Not Found
• Assessee Lawyers: Not Found
• Keywords: Unexplained cash credit; Period of limitation; Accommodation entries; Assessment record; Condonation of delay; TDS; Set aside
• Section: 143(3); 201; 251; 43; 48; 73; 13; 22; 131; 68

Judgement Text

DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 1 OF 49 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . .. . . .. . ./ ././ ./ I.T.A NO.1509/AHD/2016 / ASSESSMENT YEAR: 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1) (2), SURAT. VS. M/S. KEJRIWAL INDUSTRIES LTD., 7004, WORLD TRADE CENTRE, RING ROAD, SURAT. [PAN: AACCP 3636 Q] / APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAMESH MALPANI , CA /REVENUE BY SHRI O. P. VAISHNAVA , CIT (D.R.) / DATE OF HEARING: 06 . 02 .20 20 !' /PRONOUNCEMENT ON: 04.05 .20 20 /O R D E R PER O.P.MEENA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, SUR AT (IN SHORT THE CIT (A)) DATED 28.03.2016 PERTAINING TO ASSESSMEN T YEAR 2011-12, WHICH IN TURN HAS ARISEN FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3)/154 DATED 09.04.2014/31.03.2014 OF INCOME TAX ACT,1961 (IN SHORT THE ACT) BY THE DEPUTY COMMISS IONER OF INCOME- TAX, CIRCLE -1, SURAT (IN SHORT THE AO). DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 2 OF 49 2. CONDONATION OF DELAY IN FILING OF APPEAL BEFORE TRI BUNAL: 3. T HE REGISTRY HAS POINTED OUT THAT THERE IS DELAY BY ONE DAY IN FILING OF APPEAL BEFORE TRIBUNAL. THE LD. CIT (DR) SUBMITTED THAT ONE DAY IN FILING OF THE APPEAL HAS OCCURRED DUE TO WRO NGLY COUNTING THE PERIOD OF LIMITATION FOR FILING OF APPEAL. THE LD. CIT (DR) HAD REQUESTED TO CONDONE THE SAME AS IT HAS OCCURRED DU E TO TECHNICAL REASON AND THE DELAY WAS NOT DELIBERATE OR INTENTIO NAL HENCE, DELAY IN FILING OF APPEAL MAY PLEASE BE CONDONED. THE LEA RNED COUNSEL FOR THE ASSESSEE DID NOT OPPOSE THE SMALL DELAY IN FILI NG OF APPEAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SETTLED LAW THAT THE COU RT AND QUASI- JUDICIAL BODIES ARE EMPOWERED TO CONDONE THE DELAY IF THE LI TIGANT SATISFIES THE COURT THAT THERE WERE SUFFICIENT REASONS FOR TH E AVAILING THE REMEDY AFTER THE EXPIRY OF THE LIMITATION. SUCH A R EASONING SHOULD BE TO THE SATISFACTION OF THE COURT. CONSIDERING THE F ACTS OF PRESENT CASE AND SMALL DELAY OF 1 DAY, WE ARE OF THE VIEW THAT THERE WAS NO MALA- FIDE INTENTION FOR DELAY. THE CIT (D.R.) FOR THE RE VENUE HAS BEEN ABLE TO DEMONSTRATE SUFFICIENT REASONS. THEREFORE, WE FI T TO CONDONE THE DELAY IN FILING OF APPEAL AND ALLOW THE APPEAL TO B E PROCEEDED WITH ON MERIT. 5. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 3 OF 49 RS.12,89,25,938/- MADE ON ACCOUNT OF UNEXPLAINED CA SH CREDIT U/S 68 OF THE ACT AS ASSESSEE COULD NOT PROVE GENUI NENESS OF LOANS AND WHEREABOUTS OF LENDERS. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE R ESTORED TO THE ABOVE EXTENT. 6. THE REVENUE HAS TAKEN AS MANY AS THREE GROUNDS OF A PPEAL. HOWEVER, IN SUBSTANCE THESE ARE RELATED TO DELETION OF ADDITION OF RS.12, 89, 25,938/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT, HENCE, THESE ARE BEING CONSIDERED TOGETHER. 7. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIL ED ITS RETURN OF INCOME ON 29.09.2011 DECLARING TOTAL INCOME AT RS.5 , 14, 26,940/- WHICH WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION . THE AO FINALIZED THE ASSESSMENT PROCEEDINGS U/S.143(3) ON 31.03.2014 BY MAKING DISALLOWANCE OF RS.4,83,821/- U/S.14A, DISAL LOWANCE OF PF AND ESIC OF RS.23,20,130/- AND ADDITION OF RS.12,89 ,25,938/- U/S.68 OF THE ACT. HOWEVER, THE ADDITION MADE U/S.68 WAS L EFT OUT TO BE ADDED IN COMPUTATION OF INCOME HENCE, SAME WAS LATE R ADDED BY THE AO VIDE ORDER U/S.154 DATED 09.04.2014 OF THE ACT. THE AO NOTICED THAT THE ASSESSEE HAS TAKEN TOTAL UNSECURED LOAN OF RS.14,76,38,600 FROM 56 PERSONS, OUT OF WHICH 54 ARE BASED AT RANCH I AND REMAINING TWO ARE GROUP CONCERNS OF THE ASSESSEE. THE AO HAD ISSUED DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 4 OF 49 COMMISSIONS TO DCIT, CIRCLE-1, RANCHI AND ACIT-TDS, CIRCLE- RANCHI UNDER SECTION 131 (1)(D) OF THE ACT TO CONDUCT ENQU IRIES IN CASE OF THE LENDERS BASED AT RANCHI. THE SAID OFFICERS HAVE SENT THE ENQUIRY REPORTS, WHICH ARE FRAMING PART OF ASSESSMENT ORDER . THE FINDINGS OF THE AO AS PER CHART IS AS UNDER: S. N. NAME OF THE LENDERS ALLEGED LOAN(INCLUDI NG INTEREST)IN RS. FINDINGS OF ENQUIRY 1 AKSHAY KUMAR SINGH HUF 6,88,738 INCLUDING INTEREST RS. 61,438 THE PERSON HAS NEITHER BEEN FOUND ON ENQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRIES PROVIDER DETECTED FROM BANK STATEMENT 2 AKSHAY KUMAR SINGH 1,51,475 3 ASIM ASHRAF 1,87,141 EMPLOYED IN SAUDI ARABIA, BUT STILL ASSESSEE CLAIMED TO HAVE OBTAINED HIS CONFIRMATION, WHICH CANNOT BE ACCEPTED. ASSESSEE NEVER INTIMATED SUCH EMPLOYMENT. FURTHER, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION ARE NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRIES PROVIDER DETECTED FROM BANK STATEMENT 4 ASHOK KUMAR SARKAR 1,27,326 THE PERSON HAS NEITHER BEEN FOUND ON ENQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRIES PROVIDER DETECTED FROM BANK STATEMENT 5 BI NOD KUMAR JAIN 1,08,521 THE PERSON HAS NEITHER BEEN FOUND ON ENQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRIES PROVIDER DETECTED FROM BANK STATEMENT 6 CHANDAN SARAWGI 1,32,922 - DO - 7 DEEPMALA 5,10,817 - DO - DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 5 OF 49 8 GYAN ENTERPRISE 1,83,90,430 PROPRIETOR CONCERN OF GYANENDRA KUMAR SINGH, WHO HAS BEEN NEITHER PRODUCED AND THE ASSESSEE PROVIDED WRONG NAME AS GYAN SINGH. FUND TRANSFER OUT OF OVERDRAFT. PERSON HAS TENDENCY TO RETURN DEBT FREQUENTLY AND HAS SUBSTANTIAL CASH DEPOSITS. THE ASSESSEE FAILED TO PRODUCED CASH BOOK AND FAILED TO SUBSTANTIATE CREDITWORTHINESS AND GENUINENESS 9 IRSHAD KHAN 3,72,202 THE PERSON HAS NEITHER BEEN FOUND ON ENQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRIES PROVIDER DETECTED FROM BANK STATEMENT 10 IRSHAT JAHAN 4,00,199 - DO - 11 J K DAS HUF 1,53,794 IDENTITY PROVED. HOWEVER, BANK STATEMENT REFLECTS THE SAME TYPOGRAPHICAL CHARACTERISTIC AS ENTRY PROVIDER AND GENUINENESS OF TRANSACTION NOT PROVED 12 JEEVN KUMAR DAS 1,64,780 - DO - 13 JUHI KUMARI 2,19,706 DAUGHTER OF SHRI JEEVAN KUMAR DAS, IDENTITY PROVED BUT CREDITWORTHINESS NOT PROVED. SHE IS FOUND TO BE RECEIVING ENTRIES FROM NONE OTHER THAN SOME OF THE ENTRY PROVIDERS MENTIONED IN THE CURRENT LIST ITSELF. CLAIMED TO BE EARNING TUITION INCOME, BUT NO EVIDENCES SUBMITTED 14 JYOTI VIKAS INDUSTRIES 50,84,329 ASSESSEE NEITHER FOUND NOR PRODUCED. NO CONFIRMATIONS FILED. NOT EVEN PROPER DOCUMENTARY EVIDENCE FILED. CASE AILS ON ALL THE THREE PARAMETERS. 15 KIRAN SINGH 2,52,662 SISTER OF SHRI JEEVAN KUMAR DAS. IDENTITY PROVED BUT CREDITWORTHINESS NOT PROVED. SHE IS FOUND TO BE RECEIVING ENTRIES FROM NONE OTHER THAN SOME OF THE ENTRY PROVIDERS MENTIONED IN THE CURRENT LIST ITSELF. CLAIM TO BE EARNING COMMISSION FROM MR. RAJESH KUMAR PRAHLADKA BUT NO EVIDENCE SUBMITTED. 16 KRISHNA SINGH 1,31,824 SON OF SHRI JEEVAN KUMAR DAS. HOWEVER, BANK ACCOUNTS STATEMENT REFLECTS THE SAME TYPICAL CHARACTERISTICS AS OF ENTRY PROVIDING ENTITIES. GENUINENESS OF TRANSACTIONS ALSO NOT PROVED. 17 MANGAL KUMAR SINGH HUF 3,60,673 THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 6 OF 49 FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT 18 MANGAL KU MAR SINGH 3,23,892 THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STA TEMENT 19 MANJU DEVI 2,19,706 WIFE OF SHRI JEEVAN KUMAR DAS. HOWEVER, BANK ACCOUNTS STATEMENT REFLECTS THE SAME TYPICAL CHARACTERISTICS AS OF ENTRY PROVIDING ENTITIES. GENUINENESS OF TRANSACTION ALSO NOT PROVED. 20 MANJU HEMANI 1,36,108 THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 21 MOHD QASIM 1,42,271 IDE NTITY PROVED. CREDITWORTHINESS NOT PROVED, NOR IS THE GENUINENESS OF TRANSACTION. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT 22 MONA SARKAR 2,92,681 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 23 MOUSAMI SINHA 4,06,128 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 24 MUNNA KUMAR SINGH HUF 1,71,232 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL F EATURES OF ACCOMMODATION ENTRY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 7 OF 49 PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 25 MUNNA SINGH 2,29,407 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 26 NITYA NAND SINGH HUF 2,70,042 THE PERSON WAS NOT TRACEABLE O N INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 27 NITYA NAND SINGH 1 ,51,475 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 28 POONAM DEVI 2,09,650 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 29 PRIYA THATHERA 1 ,65,744 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 8 OF 49 PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 30 PUSHPA DEVI SARAF 1,41,616 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. FURTHER, IT IS ALSO SEEN THAT ON ONE HAND SHE HAS SHOWN HER STATUS AS HOUSE WIFE IN THE BANK PASSBOOK AND ON THE OTHER SHE IS SHOWING INCOME FROM BUSINESS & PROFESSION. THESE CONTRADICTIONS HAVE NOT BEEN RECONCILED BY THE ASSESSEE. 31 R K SINHA HUF 1,44,889 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 32 RAJKUMARI SINHA 1,67,939 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 33 RAJESH BALMIKI HUF 3,45,631 THE PERSON WAS NOT TRACEABLE O N INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 34 RAJESH BALMIKI 1,71,371 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 9 OF 49 RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 35 RAMESH KUMAR SINHA 2,20,626 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 36 ROSHANLAL HUF 6,15, 177 THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 37 RUHI ENTERPRISE 75,03,040 THIS IS A PROPRIETORSHIP CONCERN OF SHRI GAYANENDRA KUMAR SINGH, WHO HAS NEITHER BEEN FOUND NOR PRODUCED BY THE ASSESSEE ON COMMISSION INQUIRY. FIRST THE ASSESSEE PROVIDED WRONG NAME AS GYAN SINGH. HOWEVER, INQUIRY REVEALED THE CORRECT NAME. IT IS SEEN FROM THE BANK ACCOUNT STATEMENT THAT EVEN THOUGH THE FUND TRANSFER IS OUT OF OVER DRAFT, THE PERSON HAS A TENDENCY OF RETURNING THE DEBT BY FREQUENT AND SUBSTANTIAL CASH DEPOSITS. DESPITE A SPECIFIC REQUEST, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. CREDITWORTHINESS AND GENUINENESS NOT PROVED. 38 SHIVAM ENTERPRISES 2,80,83,183 IDENTITY NOT PROVED. NO CONFIRMATIONS FILED. GENUINESS OF THE TRANSACTION NOT PROVED. CREDITWORTHINESS CANNOT BE ESTABLISHED. ON THE CONTRARY, IT IS SEEN THAT THERE ARE CASH DEPOSITS OF NEARLY RS.3,00,00,000/- IN THE SAME BANK ACCOUNT. DESPITE A SPECIFIC REQUEST, THE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 10 OF 49 ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. 39 SHREE GANESH ENTERPRISES 76,47,946 THIS IS A PROPRIETORSHIP CONCERN OF SHRI GAYANENDRA KUMAR SINGH, WHO HAS NEITHER BEEN FOUND NOR PRODUCED BY THE ASSESSEE ON COMMISSION INQUIRY. FIRST THE ASSESSEE PROVIDED WRONG NAME AS GYAN SINGH. HOWEVER, INQUIRY REVEALED THE CORRECT NAME. IT IS SEEN FROM THE BANK ACCOUNT STATEMENT THAT EVEN THOUGH THE FUND TRANSFER IS OUT OF OVER DRAFT, THE PERSON HAS A TENDENCY OF RETURNING THE DEBT BY FREQUENT AND SUBSTANTIAL CASH DEPOSITS. DESPITE A SPECIFIC REQUEST, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. CREDITWORTHINESS AND GENUINENESS NOT PROVED. 40 SUBODH KUMAR SINHA HUF 1,59,159 THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 41 SUBODH KUMAR SINHA 2,91,806 THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 42 SUMITRA DEVI 7,30,367 THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 43 KEJARIWAL DYEING AND PRINTING MILLS PVT. LTD. 16,80,000 A SISTER CONCERN OF THE ASSESSEE. HOWEVER, THERE ARE SUBSTANTIAL CASH DEPOSITS PRIOR TO TRANSFER OF FUNDS TO THE ASSESSEE AND NO EXPLANATION HAS BEEN OFFERED BY THE ASSESSEE TO SUPPORT SUCH CASH DEPOSITS. THE AMOUNT OF CASH DEPOSITS TOTAL OF RS. 15,00,000 AND INTEREST THERE UPON COMES TO RS. 1,80,000. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 11 OF 49 44 KEJRAIWAL INTEGRATED TEXTILE PARK PVT. LTD. 4,89,89,817 A SISTER CONCERN OF THE ASSESSEE WITHOUT ANY BUSINESS ACTIVITY. THERE ARE SUBSTANTIAL CASH DEPOSITS IN RELATION TO THE TRANSFER OF FUNDS TO THE ASSESSEE AND NO EXPLANATION HAS BEEN OFFERED BY THE ASSESSEE TO SUPPORT SUCH CASH DEPOSITS. MOREOVER, IT HAS ALSO BEEN FOUND THAT THE COMPANY HAS BEEN MERELY USED AS CONDUIT AND THE FUNDS HAS BEEN ROUTED THROUGH THE NET WORK OF THE SAME PERSON / CONCERNS. 45 SANDIP KEJRIWAL 1,68,809 UN - SIGNED CONFIRMATIONS. BANK ACCOUNT STATEMENTS AND OTHER DOCUMENT COULD NOT ESTABLISH THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. 46 VISHNU KEJRIWAL 11,91,240 UN - SIGNED CONFIRMATIONS WERE FILED. LATER ON, THE ASSESSEE FILED SOME LETTERS IN THE NAME OF CONFIRMATIONS, WHICH CANNOT BE RELIED UPON IN VIEW OF DISCREPANCIES. BANK ACCOUNT STATEMENT AND OTHER DOCUMENTS COULD NOT ESTABLISHED THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. 47 VISHNU KEJRIWAL HUF 1,32,636 D 48 VIND DEVI KEJRIWAL 3,86,811 CONFIRMATION NOT FILED AT ALL.BK ACCOUNT STATEMENT AND OTHER DOCUMENT COULD NOT ESTABLISHED. THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION TOTAL 12,89,25,93 8 8. THUS, IN THE LIGHT OF ABOVE FACT AND FINDINGS, THE AO MADE ADDITION OF RS.12,89,25,938 UNDER SECTION 68 OF TH E ACT. 9. BEING, AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT (A). THE FINDINGS GIVEN BY THE CIT (A) IN HIS APPELLATE ORDER IS REPRODUCED AS UNDER: 7.1 THE AR SUBMITTED DETAILED SUBMISSIONS' DATED 24. 06. 2015 AND 28.01.2016 AND ALSO PAPER BOOK CONTAINING THE COPIES OF SHOW C AUSE NOTICE AND DETAILS SUBMITTED BY THE APPELLANT DURING ASSES SMENT STAGE. THE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 12 OF 49 RELEVANT PORTION OF SUBMISSIONS ARE DISCUSSED AHEAD , WHEREVER REQUIRED. IN ORDER TO VERIFY THE FACTUAL CORRECTNESS OF SOME OF ASSERTIONS MADE BY ID AO AND THE AR; A JOINT EXAMINATION OF ASSESSMENT RE CORDS WAS DONE ON 20.01.2016 ALONG WITH SHRI VIPUL CHAVDA, IRS, THE ACIT CIRCLE 1 (1)( 2), THE JURISDICTIONAL AO AND THE A~ AND THE SAME IS NOTED IN ORDER SHEET. THE ACIT CIT CIRCLE 1 (1) (2) WAS ASKED TO FURNISH, ATT ESTED COPIES OF FOLLOWING DOCUMENTS FOR DETAILED EXAMINATION AND FOR RECORD P URPOSES, AND THE SAME HAVE BEEN FURNISHED BY THE OFFICER. THE ORDER SHEET NOTINGS DATED 20.01.2016 OF THE JOINT EXAMINATION OF RECORDS IS REPRODUCED B ELOW. DATE 20.01.2016 SHRI. VIPUL CHAVDA ACIT CIRCLE 1 (1)(2) ATTENDED W I TH ASSESSMENT R ECORDS . S H RI M U KES H K HAI TAN C A & AR A L SO PR E S E NT . A S S E SSM E NT RE COR D S JO I NTLY EXAMINED . IT IS FOUND THAT TH E ASSESSMENT REC O RDS H AV E ( I ) LIST OF UNSE C UR E D LOAN CREDI T O R S ALONG WITH CON F I RMA T ION , BANK ACCOUNTS COPIES, I T R COP I ES . ( I I) ADDRESS P ROO F O F NE W ADDRESS OF 8 P ERSO N S MENTIONED I N SHOW CAU SE NOT IC E (III) IN ORDER SHEET NOTI N G, A O H A D ASK ED FOR DETA I LS OF UNS ECURED L OA N S O N 08 . 01 . 2014 . (IV) T H E COMMIS S I O NS W ERE ISSUED TO DCIT CIRCLE 1 , RANCHI A N D A CIT TDS CIRCLE R A N CHI O N 17 . 02 . 2 01 4 AN D 1 4 . 03 . 201 4 RES P ECTI V ELY . THE A N N E X URE S TO C O MMISSION WAS THE CH A RT G I VE N B Y T HE AR G I VING ALL D ETAILS OF LE N D E RS . ( TH ER E IS TY P O ERROR IN CO M M I S SION DA T E D 1 7.02 . 2014 , IT IS WRON G L Y ME N TIONED AS 17 . 02 . 2013) . 5 . T H E A CIT I S REQ UES T ED TO FURNISH ATT E STE D COP I ES OF 1. COMMISSIONS IS S U E D T O DCIT CIRCLE 1 RA N CHI AND TO ACIT TDS RA NCH I 2. SHOW C A USE NO T ICE I S SU E D BY AO TO ASSES SE E P RIOR TO MAKI NG A S SES SM EN T 3. O RDER SHEET 4. LIST OF UNSECURED LOAN CREDITORS IN WHOSE CASE C ONFIRMATIONS AND OTHER DETAILS ARE NOT FURNISHED. 5. DETAILS SUBMITTED BY THE LENDERS AT O/O DCIT CI RCLE 1/RANCHI, DURING ENQUIRY BY DCIT / CIRCLE 1 RANCHI CASE ADJOURNED TO 28.01.2016. SD/- SD/- SD/- ACIT CIRCLE 1(1)(2) CA CIT (A) DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 13 OF 49 7.2 THE I D AO H A S N OT MADE ANY ENTRY FO R R ECEIPT OF DETAIL S O F LE NDERS , NOR H AS HE S IGNED ANY O FF ICE COPY OF THE LE T TER OF APPEL L ANT . BUT , FROM T H E ABOVE, IT I S CLEAR T HA T T HE ID AO HAD AL L THE DE T AI L S OF T HE SAID L ENDERS . MO R EOVER , T HE ID AO IN T H E ASS ESS M E NT O R D ER RE F ERS TO THE BANK ACCOUNT S , ANNUAL I N C OME , AND BALANCE SHEE T S O F THE LENDERS . I N VIEW OF THIS , I T I S APPARENT TH A T THE APPE L LANT H A S FI L ED T HE BASIC D E T AI L S . 8. COMPA R ISON BETWEEN ENQUIRY REPO RT S / S HOW CAUSE NOTICE AND THE C ONC L USIONS MADE I N AS S E S SMENT ORDER 8A . TH E ID AO H AS G I VEN HI S FINDINGS / OBSE R V A T I ON IN T H E CASE OF ALL LENDE R S IN F OR M OF TABLE I N PARA 15 OF HI S ORDER . THE SAME IS REP R ODUCED I N F IR S T 4 COLUMNS O F THE AN N EXURE -1 , HOWEVER, THE 5 T H CO L UMN IS ADDED BY THE UNDE R SI G NED, WH E REIN T HE ACTU A L F IN DINGS OF, SAID E N QUIRY REPORT S ARE GIVEN . ANN E XURE - 1 IS IN TE G RA L PART OF T HIS ORDER . 8(B) ( I) AS EVI D ENT I N COLUMN 4 OF ANNEXURE - 1 , T HE I D AO OB S E R VES I N CASE O F 42 L E NDE R S, NEI THE R FOUND IN ADD R ESS ' NOR PRODUCED BY ASSESSEE ' . HOWE V E R , ON PE R U S A L O F BOT H TH E ENQUIRY REP O RTS (E X HI B ITS 1 & 2 ) T O ASSESSMEN T O RDER) . I T IS E V IDE N T T HAT O NLY 8 PERS O N S {5 A S PER D CI T C I RCL E - 1 , R AN C HI A N D 3 AS PE R A C IT ( T D S ) R A N CH I} WERE NOT F O UND I N TH E S TATED ADDRESS. (II) IT, IS ALSO SEEN THAT, THE TWO INQUIRY REPORTS TOGETHER SPEAK OF ONLY 27 LENDERS OUT OF THE 54 LENDERS BASED IN RANCHI. BUT, STILL THE LD AO HAS GIVEN THE ABOVE FINDING IN CASE OF THE 42 LENDERS W ITHOUT DISCLOSING THE BASIS OF SUCH A FINDING. (III) THE SHOW CAUSE NOTICE DT 24. 03.2014 ISSUED BY THE ID AO, ACKNOWLEDGES THAT ONLY 8 PERSONS WERE NOT FOUND AT THEIR GIVEN ADDRESSES. THERE IS NO DISCUSSION ANYWHERE IN THE A SSESSMENT ORDER ON HOW HE ARRIVED AT THE CONCLUSION THAT NEIT HER FOUND OR PRODUCED BY THE ASSESSEE' IN CASE OF 42 LENDERS. TH E CONCLUSIONS OF THE LD AO ARE CONTRADICTORY TO ENQUIRY REPORTS ( EXHIBIT NO 1 AND 2). IT IS 0150 SEEN FROM BOTH THE ENQUIRY REPORTS THAT THE. LENDER S WERE NOT ASKED TO BE PRODUCED. EVEN IN JOINT EXAMIN ATION MADE OF ASSESSMENT RECORDS NO SUCH SUMMONS OR LETTER WAS FOUND. THE SHOW CAUSE NOTICE, (WHICH IN A WAY NARRATES ALL THE ENQUIRIES DONE), ALSO DOES NOT MENTION ANY SUCH SUMMONS OR RE QUEST FOR PRODUCTION OF THE SAID LENDERS. (IV) THE INQUIRY REPORT FORWARDED BY THE DCLT CIRCL E 1, RANCHI MENTIONS THAT SHRI J K DOS WAS ASKED TO PRODUCE COP IES OF ITR, BANK DETAILS AND COMPUTATION OR INCOME FOR THE LOST 3 ASSESSMENT YEARS AND THE SAID SHRI. J K DOS APPEARE D END PRODUCED THE SAID DOCUMENTS IN CASE OF ALL LENDER E XCEPT M/S JYOTI VIKAS INDUSTRIES. THE ENQUIRY REPORT ENCLOSES THE SAID DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 14 OF 49 DOCUMENTS , BUT THERE IS FINDING GIVEN FROM EXAMINA TION OF THESE DOCUMENTS. V) THE ID AO HAS NOT MENTIONED ANYWHERE WHETHER HE HAS RECEIVED THE DOCUMENTS ALONG WITH SAID ENQUIRY REPO RT OF DCLT CIRCLE -1. RANCHI. THE RECORDS DO NOT INDICATE WHETHER THE ID AO CARRIED OUT ANY EXAMINATION OF THESE DOCUMENTS. NO FINDING HAS BEEN GIVEN BY THE ID AO TO DISCREDIT OR REFUTE THE ABOVE DOCUMENTS. (VI) THE REPORT OF ACIT (TDS) COVERS 13 PERSONS, OF WHICH 3 BELONGING TO SINGLE FAMILY WERE NOT FOUND IN THE GI VEN ADDRESS. THE REPORT GIVES FINDINGS OF GENERAL FINANCIAL CAPA CITY AND BUSINESS PROFESSION OF ALL OTHERS. BUT HE DOES NOT MAKE ANY SPECIFIC FINDING W.R.T. THE SAID LOANS. NO ADVERSE FINDING OR ADVERSE INFERENCE WAS MADE IN THE REPORT. (VII) THE AO DRAWS ADVERSE INFERENCE ON THE BASIS O F FACT (IN HIS PARA 8.2 (I)] THAT A GROUP OF SEVEN LENDERS HAVE SH OWN ONE COMMON ADDRESS AND ANOTHER GROUP OF 10 LENDERS SHOW ANOTHER COMMON ADDRESS. BUT, ON EXAMINATION OF LIST AND ALS O AS EVIDENCED FROM ENQUIRY REPORT. THESE TWO GROUPS CON SISTS OF MEMBERS OF TWO FAMILIES AND HENCE, GIVEN COMMON ADD RESS. (VIII) IN PARA 8.2( II) OF THE ASSESSMENT ORDER. TH E LD AO DRAWS ADVERSE INFERENCE THAT ITR OF 33 PERSONS ARE FILED BY ONE SHRI. N.K. KEJRIWAL, THE AR HAS SUBMITTED EXPLANATION THA T SHRI. N. K. KEJRIWAL IS A TAX CONSULTANT AND CA, IT IS HIS PROF ESSION TO FILE ITRS AND HE IS PROVIDING THIS SERVICE TO MORE THAN 2000 PERSONS. THE ID AO HAS ACKNOWLEDGED TH.AT THE LENDERS CONSIS TS OF (1) SHRI N.K. KEJRIWAL AND HIS FAMILY (2) CLOSE ASSOCIATES O F SHRI N .K. KEJRIWAL AND FAMILY MEMBERS OF THESE CLOSE ASSOCIAT ES. IT IS ALSO STATED IN ASSESSMENT ORDER THAT MANY OF THEM ARE SH AREHOLDERS IN APPELLANT - COMPANY. IT IS COMMON FOR PEOPLE WHO KN OW EACH OTHER TO MAKE COMMON INVESTMENTS AND ALSO TO FLOCK TO SAME TAX CONSULTANT OR LEGAL ADVISOR. MOREOVER, OUT OF SAID 33, ABOUT 12 ARE FAMILY MEMBERS OF SHRI. N.K. KEJRIWAL AND HIS ASSOCIATE SHRI JEEVANKUMAR DASH. ON PORUSOL OF ABOVE FACTS AND CIR CUMSTANCES, THE ADVERSE INFERENCE DRAWN BY ID AO ON THIS REASON IS NOT JUSTIFIED. (IX)) AO' S OBSERVES AS UNDER IN PARA 8.2 (IV) SHRI J K DAS FAMILY MEMBERS HAD NO CLUE REGARDING THE LENDING OF MONEY TO THE APPELLANT - COMPANY. THEY SAID THAT 0/1 THEIR FINANCIAL AFFAIRS ARE LOOKED AFTER BY SHRI. J. K. DOS. THE ID AO TRIES TO DRAW CONCLUSION THAT SINCE THE F AMILY MEMBERS DO NOT KNOW OF THE SAID LOANS, THE LOANS CANNOT BE HELD AS GENUINE. I HAVE EXAMINED THIS ISSUE; IT APPEARS FRO M THE ENQUIRY REPORT, THAT THE ABOVE STATEMENTS WERE MADE VERBALL Y BY FAMILY MEMBERS IN THE ENQUIRY MADE BY THE ITI. NO MENTION OF ANY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 15 OF 49 STATEMENTS RECORDED OF THE SAID FAMILY MEMBERS IS M ADE IN ENQUIRY REPORT OR IN THE ASSESSMENT ORDER. ONLY STA TEMENT RECORDED IS OF SHRI JEEVANKUMAR DOS. HOWEVER, THIS STATEMENT WAS NOT MENTIONED IN THE SAID SHOW CAUSE NOTICE, NO R A COPY OF STATEMENT IS GIVEN TO APPELLANT DURING ASSESSMENT S TAGE. ON PERUSAL OF THE ASSESSMENT RECORDS, IT WAS NOT FOUND IN THE DOCUMENTS RECEIVED FROM RANCHI. THE ID AO HAS ALSO NOT MENTIONED / REPRODUCED ANY PORTION OF THE SAID STAT EMENT, IN THE ASSESSMENT ORDER. HENCE, THE ABOVE ALLEGED STAT EMENT OF FAMILY MEMBERS DO NO CARRY ANY EVIDENTIARY VALUE . IN ANY CASE, AS THE ENQUIRY REPORT STATES, SHRI. JEEVANKUMAR DAS APPEARED BEFORE OFFICERS AT RANCHI AND CONFIRMED THE SAID LO ANS AND PRODUCED THE DOCUMENTS ASKED FOR. EVEN OTHERWISE, NOTHING ADVERSE CAN BE DRAWN FROM T HE STATEMENT OF FAMILY MEMBERS AS IT IS COMMON FOR THE HEAD OF THE FAMILY TO MANAGE FINANCIAL AFFAIRS AND IT IS POSSIB LE THAT ALL THE FAMILY MEMBERS MAY NOT BE KNOWING ABOUT ALL THE TRA NSACTIONS. A. 8C. SIGNIFICANT FINDING OF 2 ND REPORT. (I) THE ID AO DOUBTS THE GENUINENESS OF CONFIRMATIO N OF LOAN BY ONE LENDER SHRI. ASHIM ASHRAF, FILED BY THE APPELLA NT. FOR THE REASON THAT HE WAS WORKING AND STAYING IN SAUDI ARA BIA. THE ID AO APPEARS TO STATE THAT CONFIRMATION COULD NOT HAV E BEEN OBTAINED FROM THE SAID LENDER, AS HE STAYS IN SAUDI ARABIA. THE LD AO HAS NOT ASKED THE APPELLANT HOW THE CONFIRMAT ION WAS RECEIVED. THE AO HAS DRAWN HIS INFERENCE UNILATERAL LY AS IF THE LOCATION OF LENDER IN SAUDI ARABIA MAKES IT IMPOSSI BLE FOR APPELLANT TO OBTAIN CONFIRMATION. THE SAID CONFIRMA TION IS A DOCUMENT / PAPER, WHICH CAN BE OBTAINED BY WAY OF C OURIER, OR AIRMAIL OR THROUGH SOMEBODY VISITING FROM SAUDI ARA BIA. (II) THE AO IN PARA 8.2 (III) (IV) (V) HAS STATED A S UNDER; (III) AS PER THE DETAILS GIVEN BY THE ASSESSEE, THE PROPRIETOR OF M/S GYAN ENTERPRISE AND RUHI EN TERPRISE IS ONE SHRI GYAN KUMAR SINGH ADDRESSED AT BLRAJ NAGAR, LALPUR, RANCHI. HOWEVER, ON INQUIRY IT WAS FOUND THAT ONE SHRI. GYAN SINGH HAS BEEN FOUND WHO IS AN UNEMP LOYED PERSON AND EARLIER USED TO WORK FOR ONE ARYA HOTEL. (IV) ON FURTHER PROBING, IT WAS FOUND THAT THE ASSE SSEE HAD PROVIDED WRONG DETAILS AND THE CORRECT PERSON IS ACTUALLY GYANENDRA KUMAR SINGH AND NOT GYAN KUMAR SINGH AND THE CORRECT PERSON IS A RESIDE NT OF NEAR AKHIL MEMORIAL SCHOOL, SUKHDEO NAGAR, RANCHI -5. IT WAS A LSO FOUND. THAT SHRI GYAN SINGH STANDS AS A PROPRIETOR OF CONCERNS SUCH AS GYAN ENTERPRISE, RUHI ENTERPRISE AND SHREE GANESH ENTERPRISE HAVING OFFIC E ADDRESSED AT 1, NEELKUNI SUKHDEO NAGAR, RAW ROD, RANCHI. IT IS ALSO SEEN THAT THESE CONCERNS ARE SHOWING BUSINESS ACTIVITIES RELATING T O MANUFACTURING AND TRADING OF COKE AND CRUSHING ACTIVITY. THE TOTAL OF UNSECURED LOANS RECEIVED BY OUR ASSESSEE FROM GYAN ENTERPRISE I RUHI ENTERPRISE AND SHREE GANESH ENTERPRISE COMES TO RS. 1, 77, 00, 000, RS 73,00,000/- AND RS. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 16 OF 49 75,00,000/- RESPECTIVELY. (V} ANOTHER ALLEGED LENDER NAMELY SHIVAM ENTERPRISE IS OWNED BY ONE SHRI ADITYA KUMAR DHANUKA. THIS CONCERN IS SHOWN TO BE E NGAGED IN TRANSPORTATION AND TRADING OF COAL. HOWEVER, IT IS SEEN FROM THE REPORT OF THE ACIT ( T DS), RANCHI ,THE SAID SHRI GYANKURNAR SINGH WAS IDENTIFIED AND ITR O F HIS CONCERNS WERE EXAMINED BY THE ACIT ( TDS) . M/S GYAN ENTERPRISES HAS TURNOVER TO THE EXTENT OF RS. 3.27 CRORES AND IT HAS LENT A SUM OF RS. 1.77 CRORES, WHICH HAS ALSO BEEN REPAID BY THE APPELLANT DURING THE YEAR ITSELF. M/S RUHI ENTERPRISES HAS A TURNOVER OF RS. 2.88 CRO RES AND IT HAS LENT RS 75 LAKHS AND THE SAME HAS ALSO BEEN REPAID DURIN G THE YEAR. THE TURNOVER OF M/S GANESH ENTERPRISES (BELONGING TO ON E SHRI. KAILASHCHADRA KEJRIWAL) HAS NOT BEEN MENTIONED IN R EPORT AND THE CONCERN HAS LENT RS 73,00,000/-, WHICH HAS BEEN REPAID BY THE APPELLANT IN THE SAME YEAR. THE ACIT (TDS) HAS NOT GIVEN ANY ADVERSE FINDING IN RESPECT OF CREDITWORTHINESS OR GENUINENE SS OF THE LOANS. EVEN THE ID AO HAS NOT GIVEN ANY ADVERSE FINDINGS F ROM EXAMINATION OF THE FINANCIAL STATEMENTS. THE ID AO HAS ERRED FA CTUALLY HERE IN CONCLUDING THAT M/S GANESH ENTERPRISES BELONGS TO M R. GYANENDRA KUMAR SINGH, WHEREAS IT IS THE PROPRIETARY CONCERN OF SHRI. KAILASHCHANDRA KEJRIWAL AS PER ITR AND TAX AUDIT RE PORT. THE ID AO IS HENCE, NOT JUSTIFIED IN SAYING ASSESSEE HAS PROVIDE D WRONG ADDRESS. 9. OTHER CONCLUSIONS OF THE LD AO 9.1 THE LD AO SAID THAT BANK ACCOUNTS OF FOLLOWING CONCERNS HAVE HUGE CASH DEPOSITS, BUT, HE HAS NOT SPECIFIED THE A CTUAL AMOUNTS. WHEN PERUSED BY THE UNDERSIGNED THE BANK ACCOUNT STATEMENTS, REVEAL THE FOLLOWING CASH DEPOSITS AROUND THE DATES OF ADVANCI NG SAID LOANS. SR.NO. NAME OF THE CONCERN DATE OF LOAN AND AMOUNT OF LOAN CASH DEPOSITS WITHIN 15 DAYS BEFORE THE LOAN CASH DEPOSITS WITHIN 15 DAYS AFTER THE LOAN 1 M/S GANESH ENTERPRISES 16.12.2010 NIL NIL 2 M/S GYAN ENTERPRISES 1,77,00,000 16.12.2010 02.07.2010 NIL NIL 3 M/S RUBI ENTERPRISES (2 BANK ACCOUNTS) 12.06.2010 RS.73,00,000 RS 3,00,000 RS. 8,60,000 4 SHIVAM ENTERPRISES 03.07.2010 RS 1,20,00,000 16.09.2010 1,50,00,000 NIL NIL NIL 13,00,000 NIL NIL 5 KEJRIWAL DYG & PTG MILLS PVT LTD. 05.04.2010 15,00,000 NIL NIL 6 KERIWAL VARIOUS TOTAL CASH DEPOSITS IN THE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 17 OF 49 INTEGRATED TEXTILE PARK P LTD. DATES RS 4.86 CRORES YEAR RS 47.50 LACS AS SEEN ABOVE, THE CASH DEPOSITS ARE EITHER NIL OR NEGLIGIBLE AS COMPARED TO THE QUANTUM OF THE LOAN. IT CAN BE FURTHER SEEN THAT ALL THE ACCOUNTS HAVE SUBSTANTIAL OD LIMITS AS COMPARED TO LOANS GIV EN BY THEM. IN VIEW OF THIS, THE CASH DEPOSITS ARE TOO MEAGER AND IRREL EVANT TO DRAW INFERENCE OF ANY KIND. 9.2 COMMON SOURCE - MOTILAL OSWAL THE ID AO HAS DRAWN CONCLUSION THAT 40 LENDERS HAVE RECEIVED MONEY FROM THE COMMON SOURCE, SINCE THE AMOUNTS HAVE BEEN RECEIVED FROM M/S MOTILAL OSWAL ON ONLINE SHORE BROKING FIRM. THE CON CLUSION OF THE ID AO IS NOT APPRECIABLE AS AMOUNTS TRANSFERRED TO AND FROM M/S MOTILAL OSWAL ARE TOWARDS PURCHASE OR SALE OF SECUR ITIES ALONE THROUGH MOTILAL OSWAL BROKERAGE PORTAL. THE ACTUAL SOURCE O F FUND IS THE BUYER OF THE SHARES. THE ABOVE AMOUNTS ORE NOT LOANS RECE IVED FROM M/S MOTILAL OSWAL TO SAY THAT LENDERS HAVE COMMON SOURC E. THE ID AO HAS FAILED TO APPRECIATE THIS. THERE IS NO FINDING REGA RDING THE PURCHASER OF THE SAID SHARES. FURTHER, THE ID AO ARGUES THAT WHY WOULD ANYBODY SE LL SHARES AT A LOSS AND INVEST AS LOAN IN APPELLANT - COMPANY ? THE QUESTION CAN BE ANSWERED ONLY BY THE SAID SELLER AND THE ID AO HAS NOT ASKED HIM TO CLARIFY THIS. IN THE SHARE MARKET, THERE IS BOUND B E SOME SELLING OF SHARES AT LOSS ON SOME OCCASIONS. PEOPLE MAY SELL AT LOSS TO STOP FURTHER LOSS OR TO SHIFT TO MORE SECURE INVESTMENTS OR WITH BETTER RETURNS. MOREOVER, HERE THE LOANS ARE GIVEN TO THE COMPANY WHEREIN THE LENDERS ARE SHARE - HOLDERS, AND THEY HAVE SOME CONTROL. 9.3 CASES IN WHICH THE LENDERS WERE NOT FOUND IN TH E GIVEN ADDRESSES, AND THE CASE OF M/S JYOTI VIKAS INDUSTRIES. 9 3.1 AS REGARDS THE EIGHT PERSONS NOT FOUND IN THEIR STATED ADDRESS ES, IT CAN BE SEEN THOT THERE IS A CONTRADICTION IN TWO REPORTS IN RESPECT OF (I) MANGAL KUMAR SINGH (II) MANGAL KUMAR SINGH ( HUF). THE EXHIBIT NO. 1 STATES THAT MR. MANGAL KUMAR SINGH IS ASSISTANT OF JEEVAN KUMAR DAS, WHEREAS THE EXHIBIT NO. 2 STATES THAT MR. MONG OL KUMAR SINGH WAS NOT TRACEABLE AT THE GIVEN ADDRESS. REGARDING IRSHAD KHAN AND ISHRAT JAHAN, THE TABLE S AYS ADDRESSEE WAS NOT FOUND ON GIVEN ADDRESS ,HOWEVER, IN THE LAST PA RAGRAPH OF REPORT , IT IS MENTIONED JEEVAN KUMAR DAS HAS TOLD THAT BO TH HAVE SHIFTED AND HAS GIVEN THE NEW ADDRESS IN KARBALA RANCHI. NO ENQUIRY WAS MODE ON NEW ADDRESS. TILE AR CONTENDS THAT IN RESPONSE TO THE SHOW CAUSE NOTICE FROM LD AO, THE ADDRESS PROOFS OF ALL THE ABOVE HAVE BEEN S UBMITTED BEFORE THE AO. THE AR ALSO EXPLAINED THAT IN THE TIME GAP BETWEEN ADVANCING OF LOON TO APPELLANT- COMPANY AND THE DATE OF ENQUI RY, IT IS POSSIBLE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 18 OF 49 THAT A FEW MIGHT HAVE CHANGED THEIR RESIDENCES. THE NEW RESIDENCE ADDRESSES AND ADDRESS PROOFS HAVE BEEN PROVIDED TO THE ID AO AND HE HAS NOT MADE ENQUIRIES TO REFUTE THE SAME. DURING J OINT EXAMINATION OF RECORDS, IT IS FOUND THAT ADDRESS PROOFS ARE AVA ILABLE ON RECORD. IT IS ALSO SEEN THAT, IN ALL THE ABOVE CASES, THE COPI ES OF ITR AND BANK ACCOUNTS HAVE BEEN FILED BY SHRI. JEEVAN KUMAR DOS. IT IS ALSO SEEN THAT 6 OF THE ABOVE 8 ARE ALSO SHAREHOLDERS IN THE APPELLANT - COMPANY. ON CAREFUL CONSIDERATION OF ABOVE FACTS, A ND THE COPIES OF ITR AND BANK ACCOUNT COPIES AND PROOFS OF NEW ADDRE SSES, I FIND THAT THE EVIDENCES ARE OVERWHELMINGLY IN SUPPORT OF AR ' S EXPLANATION. 9.3.2 IN THE CASE OF MIS JYOTI VIKAS INDUSTRIES, PROPRIET ARY CONCERN OF SHRI KAMAL KUMAR DHANUKA, THE IOAN RECEIVED IS RS 50 LACS. THE REQUIRED DETAILS COULD NOT BE GIVEN BY SHRI JEEVAN KUMAR DOS AT RANCHI. THE AR 'S EXPLANATION FOR THE SAME IS THAT SHRI KAMAL DHANUKA WAS IN CUSTODY IN CONNECTION WITH A COAL SCAM AND A LSO THE BANK ACCOUNT HAS BEEN ATTACHED. HOWEVER, THE AR INSISTS THAT THE DETAILS WERE INITIALLY FILED ALONGWITH DETAILS OF OTHER LEN DERS BEFORE THE AO. SINCE AS ALREADY DISCUSSED, IT IS NOT POSSIBLE TO G IVE DEFINITE FINDING ON WHAT WAS FILED BEFORE AO, THE PRESUMPTION GOES I N FAVOUR OF THE APPELLANT. FURTHER, DURING TILE APPEAL PROCEEDINGS, THE AR FUR NISHED COPY OF CONFIRMATION, ITR COPY, BANK A/C AND ALSO FIR COPY. IT IS SEEN THAT LOAN WAS RECEIVED FROM M/S JYOTI VIKAS INDUSTRIES O N 08.07.2010 AND REPAID BY APPELLANT ON 03.09.2010. IT IS ALSO SEEN THAT SHRI KAMAL DHANUKA HAS BEEN NAMED AS ACCUSED IN FIR FOR SOFT C OAL SCAM INVOLVING LOOT OF RS. 8.92 CRORES BY CBI. RANCHI. IRONICALLY, THE FIR SERVES A S EVIDENCE OF IDENTITY AS WELL AS CREDITWORTHINESS OF THE LENDER TO ADVANCE THE SAID LOAN. 10. IDENTITY 10.1 THE 2 ENQUIRY REPORTS GIVE FINDINGS REGARDING 27 ( 14 + 13) NUMBERS OF LENDERS OUT OF 56. IN THAT 27, ONLY EIGH T PERSONS WERE NOT FOUND AT THE GIVEN ADDRESS, WHEREAS REST 19 WER E FOUND LIVING AT .THE STATED ADDRESS. HENCE, THE ADVERSE INFERENC E DRAWN BY THE LD AO REGARDING 49 PERSONS (I.E. 30 + 19) IS PATENTLY WRONG. THE IDENTITY OF THE 49 LENDERS IS BEYOND DOUBT. REGARDING THE REST 8 PERSONS, I HAVE GIVEN MY FINDING IN PARA 9.3.1 (SUP RA). IN ALL THE CASES, THE APPELLANT AND ALSO SHRI. JEVANKUMAR DAS HAVE FURNISHED THE FOLLOWING (I) CONFIRMATION (II) ITR COPY (III) BANK STATEMENTS. IN VIEW OF THE EXTENSIVE DOCUMENTS PROVIDED BY THE APP ELLANT BEFORE THE AO, AND ALSO BY THE LENDERS BEFORE THE DCLT , C IRCLE (1), RANCHL . I HOLD THAT THE IDENTITIES OF THE SAID LENDERS STAND ESTABLISHED AND THE INFERENCES / CONCLUSION DRAWN BY THE ID AO IN THIS ASPECT ARE NOT SUPPORTED BY FACTS. 10.2 CREDITWORTHINESS 10.2.1 THE TWO ENQUIRY REPORTS DO NOT GIVE ANY FINDING REG ARDING DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 19 OF 49 THE CREDITWORTHINESS OF THE LENDERS. THE LD AO ,HOW EVER, IN THE PARA 9.1 HAS MADE COMMON OBSERVATION'. MOST OF THESE PERSONS ARE ACTUALLY SHOWING NOMINAL INCOMES. AS IS TYPICAL OF ENTRY PROVIDER ENTITIES, THESE PERSONS HAVE NEITHER A HEA LTHY BALANCE SHEET NOR A POTENT ENOUGH CAPITAL ACCOUNT WHICH CAN VOUCH FOR THE CLAIMED INVESTMENT IN THE SHARES OF THE APPELLA NT - COMPANY. THE LD AO FOLLOWS IT UP WITH A TABLE IN NEXT PARA W HERE, HE GIVES INCOME OF ALL LENDERS FOR THE RELEVANT ASSESSMENT Y EARS. FROM THIS HE DRAWS CONCLUSION THAT EXCEPT ONE OR TWO STAND AL ONE INSTANCES THE LENDERS ARE NOT CREDITWORTHY IN THE TRUE SENSE. 10.2.2 THE ID AO IN PARAGRAPH IN 9.6 WRITES THAT THE ASSES SEE HAS NOT FILED BALANCE SHEET AND CAPITAL ACCOUNTS OF INDIVID UAL LENDERS. AT THE SAME TIME, HE HAS COMMENTED IN PARA 9.1 THAT' THE LENDERS HAVE NEITHER A HEALTHY BALANCE SHEET NOR A POTENT ENOUGH CAPITAL ACCOUNT. INTERESTINGLY, THE ID AO IN PARAGRAPH 3 OF HIS SHOW CAUSE NOTICE DATED 24. 03. 2014 HAS STATED THAT ' IT IS HOWEVER, NOTED FROM PRIMARY EXAMINATION OF THE BALANCE SHEETS AND OTHER DETAILS OF THE RESPECTIVE PARTIES FILED BY THE ASSESSEE - COMPANY DURING ASSESSMENT. IT APPEARS THAT MOST OF THE CONCERNS DI D NOT POSSESS CREDITWORTHINESS TO ADVANCE ANY SUCH QUANTUM OF MON IES TO' THE ASSESSEE'. THUS, THERE IS A CONTRADICTION ON THE PA RT OF THE ID AO AND IT IS ALSO. NOT CLEAR, WHICH DOCUMENTS HAVE BEE N RELIED ON BY THE ID AO. 10.2.3 THE ID AO HAS NOT GIVEN SPECIFIC FINDINGS FROM EXAM INATION OF ANY BALANCE SHEET/ CAPITAL ACCOUNT. ONCE THE SAI D LOAN TRANSACTION APPEARS IN THE BALANCE SHEET, IT IS PRE SUMED TO HAVE SOURCE AS EVIDENT ON LIABILITY SIDE OF THE BALANCE SHEET, UNLESS THE SAME IS REFUTED BY SPECIFIC ADVERSE FINDING/ DISCRE PANCIES. NO SUCH FINDINGS HAVE BEEN GIVEN BY THE ID A.O. THE CREDIT WORTHINESS TO MAKE INVESTMENT OR TO GIVE LOAN CANNOT BE JUDGED BY CURRENT YEARS INCOME, BUT, BY NET WORTH . THE INVESTMENTS OR LOA NS CAN BE MADE OUT OF ACCUMULATED SAVINGS, FROM BORROWALS OR FROM REALIZATION OF AN EARLIER INVESTMENT / ASSET, EVEN THOUGH INCOME F OR THAT YEARS IS NIL. IN THE INSTANT CASE, THE LD. AO HIMSELF HAS G IVEN A FINDING THAT MANY LENDERS HAVE ADVANCED THE LOANS OUT OF PROCEED S OF SALE OF SHARES THROUGH M/S MOTILAL OSWAL SHARE BROKERS. TH E IMMEDIATE SOURCE OF THE SAID LOANS ARE APPARENT. HENCE, THER E IS NO RELEVANCE OF DISCUSSION ON ANNUAL INCOME OF THE LENDERS. THE AR HAS SUBMITTED THAT EVEN THOUGH THE ANNUAL INCOME WERE TO BE ADOPTED, FOR THE PURPOSE OF FOLLOWING THE CREDITWOR THINESS OF THE PERSONS , THE TOTAL INCOMES ARE NOT SO WEAK AS TO F AIL TO JUSTIFY THE AMOUNTS ADVANCED. THE CHART SHOWING ANNUAL INCOME , CAPITAL, AMOUNT LENT IS FURNISHED BY THE AR AND THE SAME ARE EXAMINED. 10.2.3 ANALYSIS OF BANK ACCOUNTS : THE AO STATES THAT SEVERAL LENDERS SOLD THEIR SHARES / INVESTMENTS AT LOSS THROUGH MOTILAL OSWAL SECURITIES AND ADVANCED THE SAME AS LOAN TO THE APPELLANT. THE ID AO CONCLUDES THAT THE PATT ERN FOLLOWED BY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 20 OF 49 THE LENDERS IS ABNORMALLY IDENTICAL AS THE LENDERS DO NOT HAVE ANY COMMERCIAL CONNECTION AMONG THEMSELVES. THE ID AO F URTHER STATES THAT. THE LENDERS WHO HAVE RECEIVED CREDIT FROM OTH ER THAN MOTILAL OSWAL SECURITIES, IT IS SEEN THAT CHEQUES ARE ISSUE D FROM THE SAME CHEQUE BOOK. ON EXAMINATION OF RECORDS, I FIND THAT EVEN THESE FILE LENDERS HAVE RECEIVED CHEQUES FROM SAME CHEQUE BOOK AND THE CHEQUES ARE IN THE NAME OF MOTILAL OSWAL ONLY. SO, IMMEDIATE SOURCE FOR THE SAID LOAN IN CASE OF 40 LENDERS IS THE AMOUNT RECEIVED THROUGH MOTILAL OSWAL. THE AR SUBMITS AS UNDER ON THIS ISSUE ; I) THE AO HAS NOT QUESTIONED SOURCE OF INVESTMENT' OF LENDERS IN THE SHARES WHICH HAVE BEEN SOLD NOW. II) MOTILA! OSWAL SECURITIES IS NOT A LENDER OR CREDITO R TO THE LENDERS. IT IS A LEADING SHARE BOOKING FIRM WITH ONLINE SHARE BROKING PORTAL ALLOVER INDIA. MILLIONS OF PEOPLE PURCHASE AND SELL SHARES THROUGH IT. III) THE ID AO HIMSELF STATES THAT LENDERS ARE ALL KNOWN TO EACH O THER BY CONNECTION TO EITHER SHRI JEEVAN KUMAR DOS OR SHRI SANDEEP KEJRIWAL WHO ARE ADMITTED ASSOCIATES. FURTHER, AS STATED IN PARA 13.9 OF THE ASSESSMENT ORDER 30 LENDERS ARE ALSO SHARE-HOLDERS IN THE APPELLANT - COMPANY, THIS SHOWS THAT THE SAID LENDERS TAKE COMM ON INVESTMENT DECISIONS. ON PERUSAL OF ABOVE NARRATED FACTS BY ID AO, ONLY I NFERENCE THAT CAN BE SAFELY DRAWN IS THAT, THE ABOVE 40 LENDERS, HAVE INDULGED IN TRADING IN SHARES AND SECURITIES THROUGH ONE SHAREBROKING F IRM AND THAT THEY HAVE TAKEN COMMON DECISION TO SELL SOME OF THEIR SHORES AND TO LEND THE SAME TO APPELLANT. GIVEN THE, FACT THAT ALL OF THEM ORE EITHER SHORE- HOLDERS IN APPELLANT - COMPANY OR FAMILY MEM BERS OR GROUP CONCERNS. THIS DECISION DOES NOT STRIKE AS ABNORMAL OR GLARING ENOUGH TO DRAW ANY CONCLUSION. HENCE, THE CONCLUSIO N DRAWN BY THE AO IS NOT JUSTIFIABLE. 10.3 GENUINENESS AS ALREADY DISCUSSED, THE LENDERS ARE EITHER SHORE -HOLDERS OF APPELLANT - COMPANY OR THEIR FAMILY MEMBERS OR THEI R BUSINESS ASSOCIATES OR GROUP CONCERNS HENCE. THE ADVANCING O F LOAN BY THEM TO APPELLANT CANNOT BE SAID TO LACK GENUINENES S. MOREOVER, THE SAID LOANS ARE INTEREST BEARING (@ 12 %) , WHICH IS MORE THAN BANK RATE. ALL THE TRANSACTIONS ARE MADE THROUGH BA NKING CHANNELS. IT IS ALSO SEEN THAT. IN NINE CASES, THE LOANS HAVE BEEN REPAID BY THE APPELLANT IN THE SAME YEAR. REPAYMENT OF LOAN IN MANY CASES IS ITSELF A EVIDENCE OF THE GENUINENESS OF LOAN, UNLESS THERE IS AN ADVERSE FINDING SUCH AS IMMEDIATE CASH WITHDRAWAL OF THE AMOUNT BY LENDER TO HANDOVER BACK THE SAME TO T HE APPELLANT. HERE, NO SUCH FINDING HAS BEEN MADE. AS ALREADY DIS CUSSED IN PARA 9.1 (SUPRA ), THE BANK STATEMENTS DO NOT SHOW HIGH CASH DEPOSITS DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 21 OF 49 WITHIN 15 DAYS IMMEDIATELY BEFORE OR 15 DAYS AFTER THE SAID LOAN TRANSACTIONS. SEVEN OF THE LENDERS ARE EITHER SISTE R CONCERNS OR FAMILY . MEMBERS OF THE MANAGING DIRECTORS OF THE A PPELLANT - COMPANY. NO SPECIFIC FINDING FROM EXAMINATION OF BA NK ACCOUNTS OR DOCUMENTS FILED BY THE APPELLANT / JEEVAN KUMAR DAS HAS BEEN GIVEN IN VIEW OF . THE ABOVE, THE LOANS APPEAR PRIM A FACIE GENUINE, AND THE LD AO HAS NOT GIVEN ANY SPECIFIC OR SIGNIFI CANT FINDING TO REFUTE SAME. 11 LOANS NOT ADDED 11.1 IT IS SEEN THAT , THE LD AO HAS NOT MADE ADDIT ION OF THE FOLLOWING LOANS. HOWEVER, THERE IS NO DISCUSSION O N THE SAME IN THE ASSESSMENT ORDER. S R N O . NAME PAN OPEN ING BALAN CE PAID / DEBI T RECEI VED / CREDI T INTER EST CREDI TED (NET OF TDS) BALAN CE 4 5 AJAY KEJRIWA L (HUF) AADHA2 805E - 3667 1 0 10500 0 1421 3 - 15588 4 4 6 ANUP KEJRIWA L HUF AADHA3 790G 0 0 15200 0 1484 2 - 16642 4 7 HINDDUS TAN INDUSTRI ES (PROP ANILKU MAR KEJRIWA L ADLPK44 27F - 6536 800 4300 000 13600 000 1286 451 - 17123 251 4 9 SANJAY KEJRIWA L AJLPK38 96Q - 1049 11 0 64350 0 7206 9 - 82048 0 5 0 SANJAY KEJRIWA L (HUF) AAIHS00 93K 0 0 20100 0 1932 9 - 22032 9 5 1 SUMAN KEJRIWA L AJKPK39 01C - 1779 14 0 18500 0 3700 5 - 39991 9 5 2 SUNITA KEJRIWA L AFSPK18 83N (1644 53) 0 13840 00 6854 6 - 12880 93 5 6 INDERLAL KEJRIWA L ADPPK32 66Q 0 0 90000 0 - 90000 0 11.2 THERE IS NO DISCUSSION ON WHY THESE LOANS ARE TREATED AS DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 22 OF 49 'EXPLAINED ' WHEREAS THE OTHER LOANS ARE TREATED AS' UNEXPLAINED LOANS'. ON EXAMINATION OF RE CURDS, IT IS ALSO SEEN THAT THE FACTS AND CIRCUMSTANCES ARE IDENTICAL FOR THESE LOONS TOO. SO ME TYPE OF DOCUMENTS WERE PRODUCED BEFORE THE ID AO AS WELL AS THE OFFICER AT RANCHI, DOING INQUIRY. SINCE, THERE IS NO DISTINGUI SHING FEATURE, POINTED OUT BY THE ID AO, EXPLANATION AND DOCUMENTS FURNISHED IN THESE CASES CARRY THE SAME DEGREE OF CREDIBILITY AS IN THE CASE OF OTHER LENDERS. IT IS ALSO NOT THE CASE OF TILE ID A O THAT THESE LOANS WERE NOT ADDED, BECAUSE LENDERS ARE FAMILY MEMBERS / GROUP CONCERNS OF THE APPELLANT, BECAUSE LOANS FROM OTHER FAMILY MEMBERS AND GROUP CONCERNS (GIVEN IN TABLE BELOW) HAVE BEEN ADDED U/S 68 OF THE ACT, B I THE ID AO. WHEN THE SAME DOCUMENTS HAVE BEEN ACCEPT ED BY THE ID AO, AS PROOF ENOUGH FOR FEW OF THE LOANS, THEN REJECTION OF SAID DOCUMENTS FOR OTHERS ,IS NOT EXPLAINED AT ALL, IN THE ASSESSMENT ORDER. THIS INCONSISTENCY TO VIEWS TAKEN BY THE LD. A.O. LIST OF RELATIVES OF KEJRIWAL GROUP WHOSE LOANS HAS BEEN ADDED NAME PAN ADDITION AMOUNT SUMITRA DEVI, AGQPD0632B 730367 KEJRIWAL DYG. & PRG MILLS.PVT. LTD. AACCT1359G 16,80,000 KEJRIWAL INTEGRATED TEXTILE PARK .PVT LTD. AADCK3490J 4,89,89,817 SANDEEP KEJRIWAL,, ADHPK3865H 168809 VINOD DEVI KEJRIWAL,, ADBPK0510F 386811 VISHNU KEJRIWAL (HUF),, AACHV8541D 132636 VISHNU KEJRIWAL,, AJOPK5598A 1191240 12. LEGAL POSITION 12.1 THE LEARNED AR HAS CITED & RELIED UPON THE FOLLOWING DECISIONS TO SAY THAT ONCE THE ASSESSEE FILES BASIC DETAILS' LIKE, C ONFIRMATION, ITR COPY, BANK ACCOUNT. ETC, THEN THE ONUS IS DISCHARGED BY A PPELLANT. SR NO CASE LAWS RELIED UPON BY THE APPELLANT CITATION NUMBER 1 ORISSA CORPORATION P LTD. 1986 159 ITR 789 (SC) 2 AARAVALI TRADING CO (2008) 220 LTR 622 (RAJ) 3 RANCHHOD J NAKHWA (2012) 21 TAXMANN. 159( GUI) 4 ROHINI BUILDERS (2003)_127TAXMANN. 523 (GUJ) 5 HINGORA INDUSTRIES LTD. ITA N.2109/AHD 2008 6 APEX THEARM PACKAGING P LTD. (2014)42TAXMAN.COM473(GUJ) 7 DHRMDEV FINANCE P LTD. (2014) 43TAXMANN. COM 395 (GUJ) 12.2 ON PERUSAL OF ALL ABOVE CASE LAWS, IT IS SEEN THAT THE RATIO UPHELD IS THAT ; DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 23 OF 49 I) WHEN FULL PARTICULARS INCLUSIVE OF NAME, ADDRESS , CONFIRMATION. ITR, BANK ACCOUNT, BALANCE SHEET IN RESPECT OF ALL CREDI TORS / LENDERS ARE FURNISHED AND WHEN IT HAD BEEN FOUND THAT LOAN ACCO UNTS WERE DULY REFLECTED IN BALANCE SHEET AND LOANS WERE FURNISHED THROUGH CHEQUES, THE AO IS NOT JUSTIFIED IN MAKING ADDITIONS. II) EVEN WHEN THE BANK ACCOUNT OF THE LENDERS SHOW CASH DEPOSITS , IT CANNOT BE AUTOMATICALLY PRESUMED THAT THE CASH BELO NGS TO APPELLANT AND THE AO IS FREE TO EXAMINE SAID CASH DEPOSITS IN THE ASSESSMENTS OF THE SAID LENDERS ( IN INSTANT CASE NO SUBSTANTIAL C ASH DEPOSITS HAVE BEEN FOUND). III) ONCE THE ABOVE DETAILS ARE FILED, IT IS FOR T HE AO TO DO ENQUIRY AND GIVE FINDINGS TO REFUTE THE DOCUMENTS WITH COGE NT REASONS. (IV) THE HON'BLE JURISDICTIONAL HIGH COURT OF GUJAR AT, IN SR NO.3 ABOVE, HAS HELD AS UNDER:- ' ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAK EN MONEY BY WAY OF ACCOUNT PAYEE CHEQUES FROM THE LENDERS WHO ARE ALL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, THE INITIAL BURDEN U NDER SECTION 68 WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HA D ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THOSE LENDERS. [PARA 15] ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSESSING OFFICER OF THO SE LENDERS, WHETHER IN THEIR RESPECTIVE RETURNS THEY HAD SHOWN EXISTENCE O F SUCH AMOUNT OF MONEY AND HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HA D BEEN LENT TO THE ASSESSEE IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER OF THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECI DES TO EXAMINE THE LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, THE ASSESSING OFFICER DOES NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTION 68. [PARA 16] ' 12.3 THE FACTS OF THE APPELLANT S CASE ARE SQUAREL Y COVERED BY THE DECISIONS ABOVE, SINCE THE SAID DECISIONS ARE OF TH E HON'BLE SUPREME COURT AND HON'BLE HIGH COURT OF GUJARAT, THEY ARE BINDING . RESPECTFULLY FOLLOWING THE ABOVE BINDING DECISIONS, I HEREBY DELETE THE AD DITION OF RS.12,89,25,938/- MADE U/S 68 OF THE ACT IN RESPECT OF UNEXPLAINED CASH CREDITS. 10. THUS, AS PER ABOVE FINDINGS OF THE LD. CIT (A), THE CIT (A) HAS EXAMINED THE EACH LENDER AND GIVEN HIS FINDING IN T HE CHART AS ANNEXURE A ATTACHED WITH APPELLATE ORDER. THE CIT (A) WAS OF THE VIEW THAT ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 24 OF 49 BY WAY OF ACCOUNT PAYEE CHEQUES FROM THE LENDERS WH O ARE ALL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, THE IN ITIAL BURDEN UNDER SECTION 68 WAS DISCHARGED. THE CIT (A) FURTHER OBSERVED THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THOSE LENDERS, AS MENTIONED IN PARA 15 OF HIS ORDER AND F ULL PARTICULARS OF NAME AND ADDRESS, PAN, CONFIRMATION, ITR ACKNOWLEDG EMENT, BANK ACCOUNT, AND LOANS ARE BY CHEQUES AND SAME HAVE BEE N REFLECTED IN BOOKS OF ACCOUNTS, THEN THE AO HAS NO JURISDICTION TO MAKE ADDITION UNDER SECTION 68 OF THE ACT. THE LD. CIT (A) HAS A LSO SUPPORTED HIS VIEW BY PLACING RELIANCE ON THE DECISION OF HON`BLE JURISDICTIONAL HIGH COURT OF GUJARAT AND HON`BLE SUPREME COURT AS MENTIONED IN HIS FINDINGS REPRODUCED ABOVE AND ACCORDINGLY, DELE TED THE ADDITION SO MADE BY THE AO. 11. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. CIT (DR) REFERRING PARA NO. 2 OF ASSESSMENT ORDER SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF MANUFACTURING TEXTURIZED YARN DURING THE YEAR UNDE R CONSIDERATION AND SHOWN GROSS PROFIT RATE OF 10.85% TURNOVER OF R S. 236,87,71,991 AGAINST GROSS PROFIT RATE OF 9.05% ON TURNOVER OF R S. 191,83,08,939 SHOWN IN THE IMMEDIATE PRECEDING YEAR. THE LD. CIT (DR) SUBMITTED THAT THE AO HAS OBSERVED THAT THE ASSESSEE HAS TAKE N UNSECURED LOAN OF RS. 14,76,38,600 FROM 56 PERSONS. OUT OF THESE, 54 PERSONS ARE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 25 OF 49 FROM RANCHI, JHARKHAND AND REMAINING TWO NAMELY KEJ RIWAL DYEING & PRINTING MILLS PVT. LTD. AND KEJRIWAL INTEGRATED TE XTILE PARK PVT. LTD. ARE THE SISTER CONCERN OF THE ASSESSEE FROM SURAT. THE LD. CIT (DR) SUBMITTED THAT THE AO HAD ISSUED COMMISSION UNDER S ECTION 131 (1) (D) OF THE ACT TO DCIT- TDS RANCHI TO MAKE ENQUIRIE S WITH REGARD UNEXPLAINED CREDITORS SHOWN BY THE ASSESSEE. THE IN QUIRY REPORT RECEIVED BY THE AO WERE MADE PART OF ASSESSMENT ORD ER AS EXHIBIT EXHIBIT-I AND II. THE AO DISCUSSED THE FINDING OF E NQUIRY REPORT IN PARA NO. 8.2 TO 87 AND SUMMARIZED THE CONCLUSION IN CHAR T FORM IN PARA 8.8 OF HIS ORDER. THE LD. CIT (DR) CONTENDED THAT T HE PATTERN OF DEPOSITS AND ISSUANCE OF CHEQUE ESTABLISHED THAT NO T ONLY THE ALLEGED LENDERS ARE NOT HAVE ANY CREDITWORTHINESS AND MERE ACCOMMODATION ENTRIES THROUGH THEIR BANK ACCOUNT. THE LD. CIT (DR ) CONTENDED THAT THAT MERE FILING OF RETURN OF INCOME OF SUCH LENDER S DOES NOT JUSTIFY THE GENUINENESS OF TRANSACTION. THERE IS NO JUSTIFI ABLE COMMERCIAL CONNECTION AS TO WHY THESE COMPANIES WOULD INVESTME NT WITH THE ASSESSEE COMPANY. THE LD. CIT VEHEMENTLY SUPPORTED THE FINDINGS RECORDED BY THE AO AND CONTENDED THAT THE LD. CIT ( A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE UNDER SECTI ON 68 OF THE ACT BY THE AO. 12. AU CONTRAIRE , THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED PAR A NO. 8.2 (VII) AT PAGE NO. 10 OF ASSESSMENT ORDER AN D SUBMITTED THAT DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 26 OF 49 THE AO HAS OBSERVED THAT THE ACIT-TDS, RANCHI HAS C ATEGORICALLY MENTIONED AS FINDING OF FACT THAT ALL OF THE ALLEGE D LENDERS ARE FAMILY MEMBERS OR ASSOCIATES OF EITHER SHRI N K KEJRIWAL O R SHRI JEEVAN KUMAR DAS, WHO ARE THE PROMOTORS OF THE ASSESSEE CO MPANY. IN PARA 8.2 (VI) THE AO HAS STATED THAT THESE TWO PERSON HA VE CLEARLY STATED BEFORE THE AO THAT PERSONS ARE GENUINE AND CAN PROV IDE DOCUMENT IN THIS REGARD. THE LEARNED COUNSEL FOR THE ASSESSEE F URTHER REFERRED PAGE NO. 22 AT PARA NO.11.1 OF ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE COMPANY HAS DULY PROVIDED COPY OF BANK STATEMENT OF EACH PERSON, WHICH HAS BEEN PREPARED AND DISCUSSED BY THE AO IN TABLE DRAWN AS PARA NO.11.1 OF ASSESSMENT ORDER. TH E LEARNED COUNSEL TOOK US THROUGH THIS TABLE AND REFERRED ITE M NO. 37 IN THE CASE OF RUHI ENTERPRISE AND SUBMITTED THAT LOAN OF RS.73,00,000 HAS BEEN TAKEN FROM CCA BANK ACCOUNT. SIMILARLY, LOAN O F RS.2,70,00,000 IN THE CASE OF M/S. SHIVAM ENTERPRISE (ITEM NO.38), AND LOAN OF RS. 75,00,000 FROM M/S. SHREE GANESH ENTERPRISE (ITEM NO.39) HAVE BEEN TAKEN FROM CCA BANK ACCOUNT. HENCE, THESE LOAN S ARE GENUINE AND SAME HAVE BEEN TAKEN THROUGH BANK BY WAY OF OVE RDRAFT FROM CCA ACCOUNT. SIMILARLY LOAN OF RS.15 00,000 FROM M/ S. KEJRIWAL DYEING AND PRINTING MILLS PVT. LTD. TAKEN IN CASH H AS BEEN ACCEPTED BY THE SAME AO IN ASSESSMENT ORDER PASSED UNDER SEC TION 143 (3) OF THE ACT ON SAME DATE, IN THE CASE OF SAID CONCERN AND NO ADVERSE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 27 OF 49 INFERENCE HAS BEEN DRAWN. THEREFORE, THE LAW DOES N OT ALLOW THE AO TO CONSIDER THE SAID LOAN AS NON-GENUINE TRANSACTIO N, WHEN HE HIMSELF HAS ACCEPTED THE SAME IN ASSESSMENT IN RESPECT OF S AID CONCERN. WITH REFERENCE TO AO`S OBSERVATION`S IN PARA 12.2 AT PAG E NO. 28 OF ASSESSMENT ORDER THAT WHY THESE PERSON HAVING WEAK FINANCIAL CREDENTIAL WOULD ADVANCE UNSECURED LOANS THE ASSES SEE COMPANY WHEN RETURN ON SUCH LOANS DOES NOT JUSTIFY THE ASSO CIATED RISK. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT T HE INTEREST PAID TO THESE ENTITIES ARE @ 12% , HENCE, THE OBSERVATION O F THE AO ARE MERE SUSPICION NOTICE CONJECTURE. WITH REGARD TO AO`S OB SERVATION AT PARA NO. 13.9 IN THE ASSESSMENT ORDER, SEVERAL ALLEGED L ENDERS ARE SHARE APPLICANT IN EARLIER YEARS, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LOAN HAS BEEN GIVEN FROM CCA ACC OUNT AND FROM KEJRIWAL DYEING AND PRINTING MILLS PVT. LTD. WHOSE FINANCIAL HAVE BEEN ACCEPTED BY THE SAME AO IN THE ASSESSMENT ORDER MAD E UNDER SECTION 143 (3) OF THE ACT OF EVEN DATE. 13. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED POINT NO. 9 AT PAGE NO. 3 OF APPELLATE ORDER WHEREIN LD. CIT (A) H AS MENTIONED THE CLAIM OF THE ASSESSEE THAT IT IS SURPRISING THAT CA SH DEPOSITS OF RS. 15, 00,000/- IN THE CASE OF M/S. KEJRIWAL DYEING & PRIN TING MILLS PVT. LTD. HAS BEEN CONSIDERED AS UNEXPLAINED IN THE CASE. WHE REAS THE LD. AO HIMSELF HAS SCRUTINIZED THE SAID ASSESSEE U/S. 143( 3) AND HAVE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 28 OF 49 VERIFIED THE BOOKS OF ACCOUNTS OF M/S. KEJRIWAL DYE ING & PRINTING MILLS PVT. LTD. THIS SHOWS THE PREDETERMINATION OF THE ST ATE OF MIND OF THE LD.AO WHICH SUPERSEDED THE FACTS AVAILABLE ON THE R ECORD WITH THE AO AND LEADED THE AO TO MAKE AN UNJUSTIFIED AND UNL AWFUL DECISION. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED PARA NO. 7.1 OF CIT (A) ORDER AND SUBMITTED THAT THE CIT (A) IN THE PRESENC E OF THE AO, THE ACIT, CIRCLE- 1(1)(2) SURAT AND THE A.R. OF THE AS SESSEE HAS CARRIED OUT JOINT EXAMINATION OF RECORDS AND RECORDED A FIN DING IN HIS ORDER SHEET DATED 20.01.2016 AND FOUND THAT THE ASSESSMEN T RECORD WERE HAVING LIST OF UNSECURED LOAN CREDITORS ALONG WITH CONFIRMATION , BANK ACCOUNT AND ITR`S COPIES ADDRESS PROOF OF NEW CRED ITORS OF 8 PERSONS AND THE COMMISSION ISSUED BY THE AO TO DCIT CIRCLE- 1 RANCHI AND ACIT-TDS, CIRCLE, RANCHI. FURTHER, THE ACIT WAS REQ UESTED TO FURNISH ATTESTED COPIES OF VARIOUS DOCUMENT AS MENTIONED IN THE ORDER SHEET AND MENTIONED IN APPELLATE ORDER. HOWEVER, THE LD. CIT (A) OBSERVED IN PARA NO. 7.2 OF HIS ORDER THAT THE AO HAS NOT MA DE ANY ENTRY FOR RECEIPTS OF DETAILS OF LENDERS NOR HAS SIGNED ANY O FFICE COPY OF LETTER OF THE APPELLANT. HOWEVER, FROM THE ABOVE IT IS CLE AR THAT THE LD.AO HAD ALL DETAILS OF THE LENDERS. MOREOVER, THE LD.AO IN THE ASSESSMENT ORDER REFERS TO BANK ACCOUNT, ANNUAL INCOME AND BAL ANCE SHEET OF THE LENDERS. IN VIEW OF THIS, THE APPELLANT HAS FIL ED THE BASIC DETAILS. THE LEARNED COUNSEL REFERRED THE ANNEXURE-A OF THE APPELLATE ORDER DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 29 OF 49 OF CIT (A) AND SUBMITTED THAT THE LD. CIT (A) HAS V ERIFIED THE FACTUAL DETAILS AND CONFIRMATION BANK ACCOUNT ETC. INCOME-T AX RETURNS, OF EACH LENDERS AND HAS GIVEN HIS FINDINGS AND CONSIDE RING THE ENQUIRY REPORT OF THE AO, IN RESPECT OF EACH CREDITORS AND ARRIVED AT A FINDING THAT CASH CREDITS ARE GENUINE LOAN TRANSACTION. THE CIT (A) OBSERVED THAT IT IS SEEN FROM COLUMN NO. 4 OF ANNEXURE-1 OF ASSESSMENT ORDER AND ENQUIRY REPORT ( EXHIBITS 1&2 TO ASSESSMENT ORD ER) FROM WHICH IT WAS EVIDENT THAT ONLY 8 PERSONS ( 5 AS PER DCIT CIR CLE -1 RANCHI AND 3 AS PER ACIT(TDS) RANCHI WERE NOT FOUND AT THE STA TED ADDRESS. THE SHOW-CAUSE NOTICE OF THE AO DATED 24.03.2014 ALSO A CKNOWLEDGED THAT ONLY 8 PERSON ON THE GIVEN ADDRESS WERE NOT FO UND. THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER AS TO HOW THE AO ARRIVED AT THE CONCLUSION THAT 42 LENDERS WERE NEITHER FOUND NOR PRODUCED BY THE ASSESSEE. THE CONCLUSION OF THE AO ARE CONTRADICTORY TO ENQU IRY REPORTS. IT IS ALSO SEEN FROM THE ENQUIRY REPORTS T HAT LENDERS WERE NOT ASKED TO BE PRODUCED. EVEN JOINT EXAMINATION MADE O F ASSESSMENT RECORD NO SUCH SUMMONS OR LETTERS WERE FOUND. THE E NQUIRY REPORT FORWARDED BY THE DCIT CIRCLE-1, RANCHI MENTIONS THA T SHRI J. K. DAS WAS ASKED TO PRODUCE COPIES OF ITR, BANK DETAILS AN D COMPUTATION OF INCOME FOR LAST 3 ASSESSMENT YEARS AND SAID SHRI J. K. DAS APPEARED AND PRODUCED THE SAID DOCUMENTS IN THE CASE OF ALL LENDERS EXCEPT M/S. JYOTI VIKAS INDUSTRIES. THE ENQUIRY REPORTS EN CLOSES THE SAID DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 30 OF 49 DOCUMENTS BUT THERE IS NO FINDING GIVEN FROM THE EX AMINATION OF SAID DOCUMENTS. THE LEARNED COUNSEL FOR THE ASSESSEE REF ERRED PARA NO. 9 OF APPELLATE ORDER AND SUBMITTED THAT CIT (A) HAS O BSERVED THAT THE ENQUIRY REPORT OF ACIT (TDS) RANCHI REVEALED THAT M /S. GYAN ENTERPRISE WAS HAVING TURNOVER OF RS. 3.27 CRORES A ND WHO HAVE LENT A SUM OF RS. 1.77 CRORES. THIS LOAN WAS REPAID BY T HE APPELLANT DURING THE YEAR ITSELF. M/S. RUHI ENTERPRISE HAD TURNOVER OF RS. 2.88 CRORES, IT HAS LENT RS. 75 LAKHS, AND THE APPELLANT HAS REP AID THE SAME IN THE SAME YEAR. SIMILARLY, M/S. GANESH ENTERPRISE WHO LE NT RS. 73 LAKHS, WHICH HAS BEEN REPAID BY THE APPELLANT IN THE SAME YEAR. THE ACIT (TDS) RANCHI OR THE AO HAS NOT GIVEN ANY ADVERSE FI NDING IN RESPECT OF CREDITWORTHINESS OR GENUINENESS OF TRANSACTION I N RESPECT OF THESE CONCERNS. THE LEARNED COUNSEL FOR THE ASSESSEE FURT HER SUBMITTED THAT THE LENDERS WERE NOT ASKED TO BE PRODUCED BY T HE AO BEFORE HIM. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED PARA NO. 9.3.1 TO 9.3.2 OF APPELLATE ORDER AND SUBMITTED THAT LD. CIT (A) HAS OBSERVED THAT THERE IS CONTRADICTORY REPORTS OF THE AO. IT W AS FURTHER OBSERVED THAT THE ASSESSEE HAD FILED ALL ADDRESS OF THE CRED ITORS BUT DUE TO TIME GAP, IT IS POSSIBLE THAT AT THE TIME OF ENQUIR Y THEY WILL HAVE SHIFTED TO NEW ADDRESS. HOWEVER, COPIES OF INCOME-T AX RETURNS AND COPY OF NEW ADDRESS WAS FILED BEFORE CIT (A) IN RES PECT OF 8 PERSON WHO WERE NOT FOUND AT THE STATED ADDRESS AS PER ENQ UIRY REPORTS. THE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 31 OF 49 LEARNED COUNSEL FOR THE ASSESSEE REFERRED PARA NO. 10 OF APPELLATE ORDER WHEREIN THE CIT (A) HAS EXAMINED AND DISCUSSE D THE ISSUE OF IDENTITY, CREDITWORTHINESS AND ANALYSIS OF BANK ACC OUNT AND GENUINENESS OF TRANSACTION. IT WAS SUBMITTED THAT T HAT AS PER PARA NO. 11 OF ORDER OF CIT (A). THE AO HAS NOT MADE ADD ITION IN RESPECT OF PERSON MENTIONED IN TABLE AT PARA NO. 11.1 IN R ESPECT OF SERIAL NO.45, 46, 47,49,50,51 AND 52 WITHOUT ANY DISCUSSIO N IN THE ASSESSMENT ORDER. THERE IS NO DISCUSSION ABOUT THES E LOANS AS TO WHY THESE WERE TREATED AS EXPLAINED, WHEREAS FACT AND C IRCUMSTANCES OF OTHER CREDITORS ARE ALSO SAME. 14. THE LEARNED COUNSEL VEHEMENTLY SUPPORTED THE FINDIN GS OF LD. CIT (A) AND PLACED RELIANCE IN THE CASE OF CIT V. RANCHHOD JIVABHAI NAKHAVA [2012] 21 TAXMANN.COM 159 (GUJARAT)/[2012] 81 CCH 193 GUJ-HC OF HONBLE GUJARAT HIGH COURT WHEREIN IT WA S HELD THAT WHERE LENDERS OF ASSESSEE ARE INCOME-TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, ASSESSING OFFICER CANNOT ASK ASSESS EE TO FURTHER PROVE GENUINENESS OF TRANSACTIONS WITHOUT FIRST VERIFYING SUCH FACT FROM INCOME-TAX RETURNS OF LENDERS. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER REFERRED AND RELIED IN THE CASE OF DCIT V. ROHINI BUILDERS [2002] 256 ITR 360 (GUJ.)/ [2003] 127 TAXMAN 523 (G UJ) OF HONBLE GUJARAT HIGH COURT WHICH LAID DOWN THAT WHEN THE AS SESSEE HAS PRIMARILY DISCHARGED THE INITIAL ONUS LAID ON HIM I N TERMS OF SECTION DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 32 OF 49 68 BY PROVIDING DETAILS TO ESTABLISH GENUINENESS OF TRANSACTION, IDENTITY AND CREDITWORTHINESS OF DEPOSITORS THEN TH E ASSESSEE IS NOT EXPECTED TO PROVE GENUINENESS OF CASH DEPOSITED IN BANK ACCOUNT OF THOSE CREDITORS BECAUSE UNDER THE LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF CREDITS IN HIS BOOKS OF ACCOUNT S BUT NOT THE SOURCE OF SOURCE. 15. THE LEARNED COUNSEL RELIED IN THE CASE OF IN THE CA SE OF CIT V. APEX THERM PACKAGING (P.) LTD. [2014] 42 TAXMANN.CO M 473 (GUJARAT) WHEREIN IT WAS HELD THAT WHERE NAME, ADDRESS , PA N COPY OF IT RETURNS, BALANCE SHEET , PROFIT & LOSS ACCOUNT OF A LL CREDITORS / LENDERS AS WELL AS THEIR CONFIRMATION HAS BEEN FURN ISHED , ASSESSING OFFICER COULD NOT MAKE ADDITION ON ACCOUNT OF UNSE CURED LOAN AND INTEREST THEREON. 16. THE LEARNED COUNSEL RELIED IN THE CASE OF CIT V. ORISSA CORPORATION (P) LTD. [1986] 159 ITR 78 (SC)/ 25 TAX MAN 80(SC), THE HON`BLE SUPREME COURT OBSERVED THAT WHEN THE ASSESS EE FURNISHES NAMES AND ADDRESSES OF THE ALLEGED CREDITORS AND TH E GIR NUMBERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH TH E REVENUES CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HA S TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINE SS AND MERE NON- COMPLIANCE OF SUMMONS ISSUED BY THE ASSESSING OFFIC ER UNDER SECTION DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 33 OF 49 131 BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE. 17. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T MANY LENDERS, THE LOAN WERE REPAID IN SAME YEAR AND THER EAFTER, THEREFORE, IT WAS SUBMITTED THAT WHERE THE LOAN WERE REPAID IN IMMEDIATE NEXT FINANCIAL YEAR AND DEPARTMENT HAS ACCEPTED THE REPA YMENT OF LOANS WITHOUT PROBING INTO IT. THEN NO ADDITION IS REQUIR ED TO BE MADE IN RESPECT OF SAID LENDERS. IN SUPPORT OF THIS CLAIM , THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED IN THE CASE OF CIT V . AYACHI CHANDRASEKHAR NARSANGJI [2014] 42 TAXMANN.COM 251 ( GUJARAT) WHEREIN IT WAS HELD THAT WHERE DEPARTMENT HAD ACCE PTED REPAYMENT OF LOAN IN SUBSEQUENT YEAR, NO ADDITION WAS TO BE M ADE IN CURRENT YEAR ON ACCOUNT OF CASH CREDIT. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. THE PERUSAL OF CHART AS GIVEN I N ASSESSMENT ORDER SHOWS THAT THE AO OBSERVED THAT IDENTITY WAS ESTABL ISHED IN MOST OF CASES, BUT HE WAS OF THE OPINION THAT CREDITWORTHIN ESS AND GENUINENESS OF TRANSACTION IS NOT ESTABLISHED. THER EFORE, THE AO HAS MADE IMPUGNED ADDITIONS. HOWEVER, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. CIT (A) HAS CONDUCTED JOINT EX AMINATION OF ASSESSMENT RECORD WITH THE AO AND WITH THE LD. AR O F THE ASSESSEE WITH REFERENCE TO AND ENQUIRY REPORTS OBTAINED FROM DCIT CIRCLE -1, DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 34 OF 49 RANCHI AND ACIT (TDS)-RANCHI. THE OUTCOME OF JOINT EXAMINATION WITH THE ACIT CIRCLE 1(1) (2) SURAT HAS BEEN DULY D ISCUSSED BY THE LD. CIT (A) IN PARA NO. 7 TO 10 OF HIS APPELLATE ORDER. THESE FINDINGS AS GIVEN BY THE LD. CIT (A) ARE DULY REPRODUCED IN PAR A NO. 9 ABOVE IN THIS ORDER. WE FIND THAT THE AO HAS OBSERVED THAT T HE ACIT-TDS, RANCHI HAS CATEGORICALLY MENTIONED THE FINDING OF F ACT THAT ALL THE ALLEGED LENDERS ARE FAMILY MEMBERS OR ASSOCIATES OF EITHER SHRI N. K. KEJRIWAL OR SHRI JEEVAN KUMAR DAS, WHO ARE THE PROM OTORS OF THE ASSESSEE COMPANY. IN PARA 8.2 (VI) THE AO HAS STAT ED THAT THESE TWO PERSON HAVE CLEARLY STATED BEFORE THE AO THAT PERSO NS ARE GENUINE AND CAN PROVIDE DOCUMENT IN THIS REGARD. THE LEARNE D COUNSEL FOR THE ASSESSEE FURTHER REFERRED PAGE NO. 22 AT PARA NO.11 .1 OF ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE COMPANY HAS D ULY PROVIDED COPY OF BANK STATEMENT OF EACH PERSON, WHICH HAS BE EN PREPARED AND DISCUSSED BY THE AO IN TABLE DRAWN AS PARA NO.11.1 OF ASSESSMENT ORDER. WE FIND THAT ITEM NO. 37 OF THE TABLE IN THE CASE OF RUHI ENTERPRISE, LOAN OF RS.73,00,000 HAS BEEN TAKEN FRO M CCA BANK ACCOUNT. SIMILARLY, LOAN OF RS.2,70,00,000 IN THE C ASE OF M/S. SHIVAM ENTERPRISE (ITEM NO.38), AND LOAN OF RS. 75,00,000 FROM M/S. SHREE GANESH ENTERPRISE (ITEM NO.39) HAVE BEEN TAKEN FRO M CCA BANK ACCOUNT. HENCE, THESE LOAN ARE CANNOT BE TREATED AS NON-GENUINE AS SOME HAVE BEEN TAKEN THROUGH BANK BY WAY OF OVERDRA FT FROM CCA DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 35 OF 49 ACCOUNT. SIMILARLY, LOAN OF RS.15 00,000 FROM M/S. KEJRIWAL DYEING AND PRINTING MILLS PVT. LTD. TAKEN IN CASH HAS BEEN ACCEPTED BY THE SAME AO IN ASSESSMENT ORDER PASSED UNDER SECTION 14 3 (3) OF THE ACT ON SAME DATE, IN THE CASE OF SAID CONCERN AND NO A DVERSE INFERENCE HAS BEEN DRAWN. THEREFORE, THE LAW DOES NOT ALLOW T HE AO TO CONSIDER THE SAID LOAN AS NON-GENUINE TRANSACTION, WHEN HE H IMSELF HAS ACCEPTED THE SAME IN ASSESSMENT IN RESPECT OF SAID CONCERN. WITH REFERENCE TO AO`S OBSERVATION`S IN PARA 12.2 AT PAG E NO. 28 OF ASSESSMENT ORDER THAT WHY THESE PERSON HAVING WEAK FINANCIAL CREDENTIAL WOULD ADVANCE UNSECURED LOANS THE ASSESS EE COMPANY WHEN RETURN ON SUCH LOANS DOES NOT JUSTIFY THE ASSO CIATED RISK. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT T HE INTEREST PAID TO THESE ENTITIES ARE @ 12% , HENCE, THE OBSERVATION O F THE AO ARE MERE SUSPICION AND CONJECTURE ONLY. WE OBSERVE THAT LD. CIT (A) HAS GIVEN A CATEGORICAL FINDINGS COLUMN NO. 4 OF ANNEXURE-1 O F ASSESSMENT ORDER AND ENQUIRY REPORT (EXHIBITS 1&2 TO ASSESSMENT ORDE R) REVEALED THAT ONLY 8 PERSONS (5 AS PER DCIT CIRCLE -1 RANCHI AND 3 AS PER ACIT(TDS) RANCHI WERE NOT FOUND AT THE STATED ADDRESS. THE SH OW-CAUSE NOTICE OF THE AO DATED 24.03.2014 ALSO ACKNOWLEDGED THAT O NLY 8 PERSON ON THE GIVEN ADDRESS WERE NOT FOUND. WE OBSERVE THAT L D. CIT (A) NOTED THAT THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER AS TO HOW THE AO ARRIVED AT THE CONCLUSION THAT 42 LENDERS WERE NEIT HER FOUND OR DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 36 OF 49 PRODUCED BY THE ASSESSEE. THEREFORE, THE CONCLUSION OF THE AO ARE CONTRADICTORY TO ENQUIRY REPORTS. IT IS ALSO SEEN F ROM THE ENQUIRY REPORTS THAT LENDERS WERE NOT ASKED TO BE PRODUCED. EVEN JOINT EXAMINATION OF ASSESSMENT RECORD, DOES NOT SHOWS TH AT SUCH SUMMONS OR LETTERS WERE FOUND TO HAVE BEEN ISSUED. THE ENQUIRY REPORT FORWARDED BY THE DCIT CIRCLE-1, RANCHI MENTI ONS THAT SHRI J. K. DAS WAS ASKED TO PRODUCE COPIES OF ITR, BANK DET AILS AND COMPUTATION OF INCOME FOR LAST 3 ASSESSMENT YEARS A ND SAID SHRI J.K. DAS APPEARED AND PRODUCED THE SAID DOCUMENTS IN THE CASE OF ALL LENDERS EXCEPT M/S. JYOTI VIKAS INDUSTRIES. THE ENQ UIRY REPORTS ENCLOSES WITH THE SAID DOCUMENTS, BUT THERE IS NO F INDING GIVEN FROM THE EXAMINATION OF SAID DOCUMENTS. WE FIND THAT THA T CIT (A) HAS OBSERVED THAT THE ENQUIRY REPORT OF ACIT (TDS) RANC HI REVEALED THAT M/S. GYAN ENTERPRISE WAS HAVING TURNOVER OF RS. 3.2 7 CRORES AND WHO HAVE LENT A SUM OF RS. 1.77 CRORES. THIS LOAN WAS R EPAID BY THE ASSESSEE COMPANY DURING THE YEAR ITSELF. M/S. RUHI ENTERPRISE HAS TURNOVER OF RS. 2.88 CRORES, IT HAS LENT RS. 75 LAK HS, AND THE ASSESSEE HAS REPAID THE SAME IN THE SAME YEAR. SIMILARLY, M/ S. GANESH ENTERPRISE WHO LENT RS. 73 LAKHS, WHICH HAS BEEN RE PAID BY THE ASSESSEE COMPANY IN THE SAME YEAR. THEREFORE, WHERE LOAN AMOUNT IS REPAID IN SAME YEAR OR IN SUBSEQUENT ASSESSMENT YEAR, NO ADDITION OF THE SAME COULD BE MADE AS HELD BY THE HONBLE GU JARAT HIGH COURT DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 37 OF 49 IN THE CASE OF CIT V. AYACHI CHANDRASEKHAR NARSANGJ I [2014] 42 TAXMANN.COM 251 (GUJARAT) WHEREIN IT WAS HELD THAT WHERE DEPARTMENT HAD ACCEPTED REPAYMENT OF LOAN IN SUBSEQ UENT YEAR, NO ADDITION WAS TO BE MADE IN CURRENT YEAR ON ACCOUNT OF CASH CREDIT. THE ACIT (TDS) RANCHI OR THE AO HAS NOT GIVEN ANY A DVERSE FINDING IN RESPECT OF CREDITWORTHINESS OR GENUINENESS OF TRANS ACTION IN RESPECT OF THESE CONCERNS. THE LEARNED COUNSEL FOR THE ASSE SSEE FURTHER SUBMITTED THAT THE LENDERS WERE NOT ASKED TO BE PRO DUCED BY THE AO BEFORE HIM. WE NOTE THAT LEARNED COUNSEL FOR THE AS SESSEE REFERRED PARA NO. 9.3.1 TO 9.3.2 OF APPELLATE ORDER AND SUBM ITTED THAT LD. CIT (A) HAS OBSERVED THAT THERE IS CONTRADICTORY REPORT S OF THE AO. IT WAS FURTHER OBSERVED THAT THE ASSESSEE HAD FILED ALL AD DRESS OF THE CREDITORS BUT DUE TO TIME GAP, IT IS POSSIBLE THAT AT THE TIME OF ENQUIRY THEY WILL HAVE SHIFTED TO NEW ADDRESS. HOWEVER, COP IES OF INCOME- TAX RETURNS AND COPY OF NEW ADDRESS WAS FILED BEFOR E CIT (A) IN RESPECT OF EIGHT PERSON WHO WERE NOT FOUND AT THE S TATED ADDRESS AS PER ENQUIRY REPORTS. IN VIEW OF THESE FACTS AND CIR CUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT LD. CIT (A) HAS RIGH TLY DELETED THE ADDITION MADE UNDER SECTION 68 OF THE ACT BY THE AO . 19. WE FURTHER OBSERVED THAT THE LD. CIT (A) HAS EXAMIN ED EACH AND EVERY CREDITORS/ LENDERS AND GIVEN HIS FACTUAL FIN DINGS OF ENQUIRY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 38 OF 49 REPORT AS WELL AS FACTS OF EACH LENDERS IN COLUMN 5 OF ANNEXURE-A FORMING PART OF HIS APPELLATE ORDER WHICH IS REPROD UCED AS UNDER: SR. NO. NAME OF LENDER REMARKS STATEMENT MADE BY LD AO WHAT THE INQUIRY REPORT REVEALS 1 AKSHAY SINGH HUF RS.6,88,73R (LOAN- 6,27,300 + INTEREST- 61,438) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. (SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT.) (PARA 94 OF AO). INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 2 AKSHAY SINGH RS.1,51,475 (LOAN- 1,38,000 + INTEREST- 13,475) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REP ORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 3 ASIM ASHRAF RS.1,87,141 (LOAN- 1,71,000 + INTEREST- 16,141) EMPLOYED IN SAUDI ARABIA BUT STILL ASSESSEE CLAIMS TO HAVE OBTAINED HIS CONFIRMATION, WHICH CANNOT BE ACCEPTED. ASSESSEE NEVER INTIMATED THE DEPARTMENT REGARDING SUCH EMPLOYMENT IN SAUDI ARABIA. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 4 ASHOK SARKAR RS.1,27,326 (LOAN-1,16 ,000 + INTEREST- 11,326) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 5 BINOD JAIN RS.1,08,521 (LOON- 1,00,000 + INTEREST- 8,521) THE PERSON H AS NEITHER BEEN FOUND ON 1NQU1RY NOR PRODUCED FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ORE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 6 CHANDAN SARAWGI RS.1,32,922 (LOAN- 1,21,000 + INTEREST- 11,922) THE PERSON HAS NEITHER BEEN FOUND ON 1NQU1RY NOR PRODUCED FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ORE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 7 DEEPMALA RS.5,10,817 (LOAN- THE PERSON NEITHER HAS BEEN FOUND ON 1NQU1RY NOR PRODUCED FURTHER, INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 39 OF 49 4,65,000 + INTEREST- 45,817) CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ORE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 8 GYAN ENTERPRISES RS.5,10,817 (LOAN- 4,65,000 + INTEREST- 45,817) THIS IS A PROPRIETORSHIP CONCERN OF SHRI GAYANENDRA KUMAR SINGH, WHO HAS NEITHER BEEN FOUND NOR PRODUCED BY THE ASSESSEE ON COMMISSION INQUIRY. FIRST THE ASSESSEE PROVIDED WRONG NAME AS GYAN SINGH. HOWEVER, INQUIRY REVEALED THE CORRECT NAME. IT IS SEEN FROM THE BANK ACCOUNT STATEMENT THAT EVEN THOUGH THE FUND TRANSFER IS OUT OF OVER DRAFT, THE PERSON HAS A TENDENCY OF RETURNING THE DEBT BY FREQUENT AND SUBSTANTIAL CASH DEPOSITS. DESPITE A SPECIFIC REQUEST, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. CREDITWORTHINESS AND GENUINENESS NOT PROVED. ALL THESE CONCERNS ARE THE PROPRIETORSHIP CONCERN OF SHRI GYANANEDRA KUMAR SINGH AND NOT GYAN SINGH AS MENTIONED IN THE LETTER. THE OFFICE ADDRESS OF THE CONCERNS IS NEELKUNJ SUKHDEV NAGAR, RATU ROAD, RANCHI AND THE RESIDENTIAL ADDRESS OF THE PROP IS NEAR AKHI MEMORIAL SCHOOL, SUKHDEV NAGAR RANCHI. THE PAN OF GYANDRA KUMAR IS AGJPS4948L. 9 IRSHAD KHAN RS.3,72,202 (LOAN- 3,39,000 + INTEREST- 33,202) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. GYAN ENTERPRISE 3,72,86,490 RUHI INDUSTRIES 2,88,55,785/- 10 ISHRAT JAHAN RS.4,00,199 (LOAN -3,64 ,500 + INTEREST- 35,699) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. AT THE FIRST INSTANCE THE LENDER WAS NOT FOUND AT THE GIVEN ADDRESS. HOWEVER, FRESH ADDRESS OF THE LENDER WAS PROVIDED. NO ADVERSE INFERENCE HAS BEEN DRAWN IN THE REPORT. 11 J K DAS HUF RS.1,53,794 (LOAN- 1,40,000 + INTEREST-13, 794) IDENTITY PROVED. HOWEVER, BANK ACCOUNT STATEMENT REFLECTS THE SAME TYPICAL CHARACTERISTICS AS OF ENTRY PROVIDING ENTITIES. GENUINENESS OF TRANSACTIONS ALSO NOT PROVED. J K DAS (HUF) IS THE SAME PERSON WITH THE NAME JEEVAN KR DAS. HE IS AN ASSOCIATE OF SRI N K KEJRIWAL. HE HAS PRODUCED ITR COPIES, BANK ACCOUNTS, ETC OF ALL THE LENDERS. 12 JEEVAN KUMAR DAS RS.1,64,780 (LOAN 1,50 ,000 + INTEREST- 14,780) IDENTITY PROVED. HOWEVER, BANK ACCOUNT STATEMENT REFLECTS THE SAME TYPICAL CHARACTERISTICS AS OF ENTRY PROVIDING ENTITIES. GENUINENESS OF TRANSACTIONS ALSO NOT PROVED. J K DAS (HUF) IS THE SAME PERSON WITH THE NAME JEEVAN KR DAS. HE IS AN ASSOCIATE OF SRI N K KEJRIWAL. HE HAS PRODUCED ITR COPIES, BANK ACCOUNTS, ETC OF ALL THE LENDERS. 13 JUHI KUMARI RS.2,19,706 (LOAN- 2,00,000 + INTEREST- 19,706) DAUGHTER OF SHRI JEEVAN KUMAR DAS. IDENTITY PROVED BUT CREDITWORTHINESS NOT PROVED. SHE IS FOUND TO BE RECEIVING ENTRIES FROM NONE OTHER THAN SOME OF THE ENTRY PROVIDERS MENTIONED IN THE CURRENT LIST ITSELF. CLAIMS TO BE EARNING TUITION INCOME, BUT NO EVIDENCE SUBMITTED. SHE IS DAUGHTER OF JEEVAN KUMAR DAS. ITR COPY AND BANK ACCOUNT COPY, ITR PRODUCED 14 JYOTI VIKASH INDUSTRIES RS.50,84,329 (LOAN- 50,00,000 + INTEREST-84 ,329) ASSESSEE NEITHER FOUND NOR PRODUCED. NO CONFIRMATIONS FILED. NOT EVEN PROPER DOCUMENTARY EVIDENCES FILED. CASE FAILS ON ALL THE THREE PARAMETERS. HE (KJD) COULD NOT PRODUCE THE DOCUMENT OF JYOTI VIKASH INDUSTRIES (PAN- ACWPD0779M) DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 40 OF 49 PAN BELONGS TO SHRI KAMAL KR DHANUKA AND HIS BANK ACCOUNT HAS BEEN ATTACHED BY THE CBI IN COAL SCAM CASE. THE PAN BELONGS TO KAMLA KR DHANUKA. MOREOVER, THE OFFICE OF M/S JYOTI VIKASH INDUSTRIES WAS NOT FOUND ON THE GIVEN ADDRESS. 15 KIRAN SINGH RS.2,52,662 (LOAN- 2,30,000 + INTEREST- 22,662) SISTER OF SHRI JEEVAN KUMAR DAS. IDENTITY PROVED BUT CREDITWORTHINESS NOT PROVED. SHE IS FOUND TO BE RECEIVING ENTRIES FROM NONE OTHER THAN SOME OF THE ENTRY PROVIDERS MENTIONED IN THE CURRENT LIST ITSELF. CLAIM TO BE EARNING COMMISSION FROM MR RAJESH KUMAR PRAHLADKA BUT NO EVIDENCE SUBMITTED. SHE IS SISTER OF JEEVAN KR DAS. ITR COPY AND COPY OF BANK ACCOUNTS PRODUCED. 16 KRISHNA SINGH RS.1,31,824 (LOAN- 1,20,000 + INTEREST- 11,824) SON OF SHRI JEEVAN KUMAR DAS. HOWEVER, BANK ACCOUNTS STATEMENT REFLECTS THE SAME TYPICAL CHARACTERISTICS AS OF ENTRY PROVIDING ENTITIES. GENUINENESS OF TRANSACTIONS ALSO NOT PROVED. HE IS SON OF JEEVAN KR DAS. ITR COPY AND BANK ACCOUNTS COPY PRODUCED. 17 MANGAL SINGH HUF RS.3,60,673 (LOAN- 3,28,500 + INTEREST- 32,173) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. HE IS ASSISTANT OF JEEVAN KR DAS ITR COPY BANK ACCOUNT PRODUCED. 18 MANGAL SINGH RS.3,23,892 (LOAN- 2,95,000 + INTEREST- 28,892) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. HE IS THE SAME PERSON WITH THE NAME MANGAL KR SINGH (HUF) ITR COPY AND BANK ACCOUNTS COPY PRODUCED. 19 MANJU DEVI RS.2,19,706 (LOAN- 2,00,000 + INTEREST- 19,706) WIFE OF SHRI JEEVAN KUMAR DAS. HOWEVER, BANK ACCOUNTS STATEMENT REFLECTS THE SAME TYPICAL CHARACTERISTICS AS OF ENTRY PROVIDING ENTITIES. GENUINENESS OF TRANSACTION ALSO NOT PROVED. SHE IS WIFE OF JEEVAN KR DAS ITR COPY AND BANK ACCOUNTS COPY PRODUCED. 20 MANJU HEMANI RS.1,36,108 (LOAN- 1,24,000 + INTEREST- 12,108) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. ADDRESSEE NOT FOUND AT THE GIVEN ADDRESS. ITR COPY AND BANK ACCOUNTS COPY PRODUCED BY JEEVANDAS. 21 MOHD. QASIM RS.1,42,271 (LOAN- 1,30,000 + INTEREST- 12,271) IDENTITY PROVED. CREDITWORTHINESS NOT PROVED, NOR IS THE GENUINENESS OF TRANSACTION. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. HIS PAN IS AAAPQ9633 AND IS RESIDENT OF EAST RAHMAT COLONY, DORANDA, RANCHI. THE HOUSE IN WHICH HE IS LEAVING IS HIS OWN PROPERTY. AT PRESENT HIS ANNUAL INCOME IS APPROXIMATELY RS.2 LAC. THERE IS NO OTHER SOURCE OF INCOME. EARLIER, HE RETIRED FROM SWARNREKHA ENTERPRISES. HATIA, RANCHI AND PRESENTLY DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 41 OF 49 PRACTICING IN SALES TAX, INCOME TAX MATTERS. 22 MONA SARKAR RS.2,92,681 (LOAN- 2,67,000 + INTEREST- 25,681) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 23 MOUSAMI SINHA RS.4,06,128 (LOAN- 3,70,000 + INTEREST- 36,128) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. THE ASSESSEE IS NOT TRACEABLE ON THE GIVEN ADDRESS, I.E. JORAR BASTI, NAMKUM, RANCHI. BUT, ITR COPY AND BANK ACCOUNT COPY ARE FILED BY JEEVAN KR DAS. 24 MUNNA SINGH HUF RS.1,71,232 (LOAN- 1,56,000 + INTEREST- 15,232) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. THE KARTA DOES NOT LIVE AT THE GIVEN ADDRESS. BUT, ITR COPY, AND COPY OF BANK ACCOUNT PRODUCED BY J DAS BEFORE THE DCIT CIRCLE-1, RANCHI. 25 MUNNA SINGH RS.2,29,407 (LOAN- 2,09,000 + INTEREST- 20,407) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. SAME AS ABOVE. 26 NITYA NAND SINGH HUF RS.2,70,042 (LOAN- 1,95,000 + INTEREST- 75,042) THE PERSON WAS NOT TRACEAB LE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 27 NITYA NAND SINGH RS.1,51,475 (LOAN- 1,38,000 + INTEREST- 13,475) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 28 POONAM DEVI RS.2,09,650 (LOAN- 1,91,000 + INTEREST- 18,650) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 42 OF 49 CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. 29 PRIYA THATHERA RS.1,65,744 (LOAN- 1,51,000 + INTEREST- 14,744) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 30 PUSHPA DEVI SARAF RS.1,41,616 (LOAN- 1,30,000 + INTEREST- 11,616) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. FURTHER, IT IS ALSO SEEN THAT ON ONE HAND SHE HAS SHOWN HER STATUS AS HOUSE WIFE IN THE BANK PASSBOOK AND ON THE OTHER SHE IS SHOWING INCOME FROM BUSINESS & PROFESSION. THESE CONTRADICTIONS HAVE NOT BEEN RECONCILED BY THE ASSESSEE. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 31 R K SINHA HUF RS.1,44,889 (LOAN- 1,32,000 + INTEREST- 12,889) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 32 RAJKUMARI SINHA RS.1,67,939 (LOAN- 1,53,000 + INTEREST- 14,939) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQ UIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 33 RAJESH BALMIKI HUF RS.3,45,631 (LOAN- 3,14,800 + INTEREST- 30,831) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 43 OF 49 34 RAJESH BALMIKI RS.1,71,371 (LOAN- 1,56,000 + INTEREST- 15,371) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 35 RAMESH KUMAR SINHA RS.2,20,626 (LOAN- 2,01,000 + INTEREST- 19,626) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 36 ROSHANLAL HUF RS.6,15, 771 (LOAN- 5,60,000 + INTEREST- 55,177) THE PERSON WAS NOT TRACEABLE ON INQUIRY NOR PRODUCED BY THE ASSESSEE. IT WAS RATHER FOUND THAT THERE IS AN AUTO- RICKSHAW DRIVER IN THE LOCALITY OF SHRI JEEVAN KUMAR DAS. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT IS SILENT ABOUT THIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 37 RUHI ENTERPRISE RS.75,03,040 (LOAN- 73,00,000 + INTEREST- 2,03,040) THIS IS A PROPRIETORSHIP CONCERN OF SHRI GAYANENDRA KUMAR SINGH, WHO HAS NEITHER BEEN FOUND NOR PRODUCED BY THE ASSESSEE ON COMMISSION INQUIRY. FIRST THE ASSESSEE PROVIDED WRONG NAME AS GYAN SINGH. HOWEVER, INQUIRY REVEALED THE CORRECT NAME. IT IS SEEN FROM THE BANK ACCOUNT STATEMENT THAT EVEN THOUGH THE FUND TRANSFER IS OUT OF OVER DRAFT, THE PERSON HAS A TENDENCY OF RETURNING THE DEBT BY FREQUENT AND SUBSTANTIAL CASH DEPOSITS. DESPITE A SPECIFIC REQUEST, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. CREDITWORTHINESS AND GENUINENESS NOT PROVED. ALL THESE CONCERNS ARE THE PROPRIETORSHIP CONCERN OF SHRI GYANANEDRA KUMAR SINGH AND NOT GYAN SINGH AS MENTIONED IN THE LETTER. THE OFFICE ADDRESS OF THE CONCERNS IS NEELKUNJ SUKHDEV NAGAR, RATU ROAD, RANCHI AND THE RESIDENTIAL ADDRESS OF THE PROP IS NEAR AKHI MEMORIAL SCHOOL, SUKHDEV NAGAR RANCHI. THE PAN OF GYANDRA KUMAR IS AGJPS4948L. THE TURNOVER OF THESE CONCERNS ARE AS UNDER: GYAN ENTERPRISE: 3,72,86,490/- RUHI INDUSTRIES : 2,88,55,785/- 38 SHIVAM ENTERPRISES RS.2,80,83,183 (LOAN- 2,70,00,000 + INTEREST- 10,81,183) IDENTITY NOT PROVED. NO CONFIRMATIONS FILED. GENUINESS OF THE TRANSACTION NOT PROVED. CREDITWORTHINESS CANNOT BE ESTABLISHED. ON THE CONTRARY, IT IS SEEN THAT THERE ARE CASH DEPOSITS OF NEARLY RS.3,00,00,000/- IN THE SAME BANK ACCOUNT. DESPITE A SPECIFIC REQUEST, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. THE PROPRIETOR OF THIS CONCERN IS SHRI ADIYA DHANUKA, S/S. LATE RAJ KUMAR DHANUKA. THE OFFICE ADDRESS OF THIS CONCERN IS 502, PANCHWATI PLAZA, KUTCHERY ROAD, RANCHI. THE PAN OF THE PROPRIETOR IS AKPPD9719E. THE PAN OF THE PROPRIETOR IS AKPPD9719E. THE TURNOVER OF THIS CONCERN AS ON 31-03-2010 IS APPROXIMATELY 20-22 CRORE. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 44 OF 49 20. IN THE LIGHT OF ABOVE FINDINGS OF LD CIT (A) , WE A RE OF THE CONSIDERED OPINION THE LD. CIT (A) HAS EXAMINED THE EACH LENDER AND ARRIVED AT FINDING THAT LOAN CREDITORS ARE GENUINE HENCE, NO ADDITION COULD BE MADE UNDER SECTION 68 OF THE ACT. THEREFO RE, WE ARE IN THE AGREEMENT WITH THE LD. CIT (A). WE FURTHER NOTICE T HAT THE AO 39 SHREE GANESH ENTERPRISES RS.76,47,946 (LOAN- 75,00,000 + INTEREST- 1,47,946) THIS IS A PROPRIETORSHIP CONCERN OF SHRI GAYANENDRA KUMAR SINGH, WHO HAS NEITHER BEEN FOUND NOR PRODUCED BY THE ASSESSEE ON COMMISSION INQUIRY. FIRST THE ASSESSEE PROVIDED WRONG NAME AS GYAN SINGH. HOWEVER, INQUIRY REVEALED THE CORRECT NAME. IT IS SEEN FROM THE BANK ACCOUNT STATEMENT THAT EVEN THOUGH THE FUND TRANSFER IS OUT OF OVER DRAFT, THE PERSON HAS A TENDENCY OF RETURNING THE DEBT BY FREQUENT AND SUBSTANTIAL CASH DEPOSITS. DESPITE A SPECIFIC REQUEST, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK ETC OF THE ALLEGED LENDERS TO SUBSTANTIATE THE SOURCE OF SUCH CASH DEPOSITS. CREDITWORTHINESS AND GENUINENESS NOT PROVED. SHRI GANESH ENTERPRISES IS ENGAGED IN THE BUSINESS OF CRUSHER AT BARAJAMDA. 40 SUBODH SINHA HUF RS.1,59,159 (LOAN- 1,45,000 + INTEREST- 14,159) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT SILENT ABOUT HIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 41 SUBODH SINHA RS.2,91,806 (LOAN- 1,17,000 + INTEREST- 1,74,806) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT SILENT ABOUT HIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. 42 SUMITRA DEVI RS.7,30,367 (LOAN- 6,65,000 + INTEREST- 65,367) THE PERSON HAS NEITHER BEEN FOUND ON INQUIRY NOR PRODUCED BY THE ASSESSEE. FURTHER, CREDITWORTHINESS & GENUINENESS OF TRANSACTIONS ARE ALSO NOT PROVED. SEVERAL FEATURES OF ACCOMMODATION ENTRY PROVIDERS DETECTED FROM THE BANK ACCOUNT STATEMENT. INQUIRY REPORT SILENT ABOUT HIS PERSON. COPIES OF ITR, COMPUTATION AND COPY OF BANK ACCOUNTS GIVEN BEFORE THE INQUIRY OFFICER, AT RANCHI. DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 45 OF 49 OBSERVED PARA NO. 13.9 IN THE ASSESSMENT ORDER, SEV ERAL ALLEGED LENDERS ARE SHARE APPLICANT IN EARLIER YEARS. HOWEV ER, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LOAN HA S BEEN GIVEN FROM CCA ACCOUNT AND FROM KEJRIWAL DYEING AND PRINTING M ILLS PVT. LTD. WHOSE FINANCIAL HAVE BEEN ACCEPTED BY THE SAME AO I N THE ASSESSMENT ORDER MADE UNDER SECTION 143 (3) OF THE ACT OF EVEN DATE. FURTHER PAGE NO. 3 OF APPELLATE ORDER MENTIONED TH AT THE CLAIM OF THE ASSESSEE THAT IT IS SURPRISING THAT CASH DEPOS ITS OF RS. 15,00,000/- IN THE CASE OF M/S. KEJRIWAL DYEING & PRINTING MILL S PVT. LTD. HAS BEEN CONSIDERED AS UNEXPLAINED IN THE CASE. WHEREAS THE LD. AO HIMSELF HAS SCRUTINIZED THE SAID ASSESSEE U/S. 143(3) AND H AVE VERIFIED THE BOOKS OF ACCOUNTS OF M/S. KEJRIWAL DYEING & PRINTIN G MILLS PVT. LTD. THIS SHOWS THE PREDETERMINATION OF THE STATE OF MIN D OF THE LD.AO WHICH SUPERSEDED THE FACTS AVAILABLE ON THE RECORD WITH THE AO AND THE LD.AO TO MAKE AN UNJUSTIFIED AND UNLAWFUL DECIS ION. THE ACIT (TDS) RANCHI OR THE AO HAS NOT GIVEN ANY ADVERSE FI NDING IN RESPECT OF CREDITWORTHINESS OR GENUINENESS OF TRANSACTION I N RESPECT OF THESE LENDERS ARE CONCERNED. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE LENDERS WERE NOT ASKED TO BE PRO DUCED BY THE AO BEFORE HIM. THE LEARNED COUNSEL FOR THE ASSESSEE R EFERRED PARA NO. 9.3.1 TO 9.3.2 OF APPELLATE ORDER AND SUBMITTED THA T LD. CIT (A) HAS OBSERVED THAT THERE IS CONTRADICTORY REPORTS OF THE AO. IT WAS FURTHER DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 46 OF 49 OBSERVED THAT THE ASSESSEE HAD FILED ALL ADDRESS OF THE CREDITORS BUT DUE TO TIME GAP, IT IS POSSIBLE THAT AT THE TIME OF ENQUIRY THEY WILL HAVE SHIFTED TO NEW ADDRESS. HOWEVER, COPIES OF INC OME-TAX RETURNS AND COPY OF NEW ADDRESS WAS FILED BEFORE CIT (A) IN RESPECT OF 8 PERSON WHO WERE NOT FOUND AT THE STATED ADDRESS AS PER ENQUIRY REPORTS. THE LEARNED COUNSEL FOR THE ASSESSEE REFER RED PARA NO. 10 OF APPELLATE ORDER WHEREIN THE CIT (A) HAS EXAMINED AN D DISCUSSED H ISSUE OF IDENTITY, CREDITWORTHINESS AND ANALYSIS OF BANK ACCOUNT AND GENUINENESS OF TRANSACTION. IT WAS SUBMITTED THAT T HAT AS PER PARA NO. 11 OF CIT (A) ORDER THE AO HAS NOT MADE ADDITIO N IN RESPECT OF PERSON MENTIONED IN TABLE AT PARA NO. 11.1 OBSERVE D THAT THE AO HAS NOT MADE ADDITION IN RESPECT OF SERIAL NO. 45,46,47 , 49,50,51 AND 52 WITHOUT ANY DISCUSSION IN THE ASSESSMENT ORDER. THE RE IS NO DISCUSSION AUTHORITY THESE LOANS WERE TREATED AS EXPLAINED, WH EREAS FACT AND CIRCUMSTANCES OF OTHER CREDITORS ARE SAME. 21. THE LEARNED COUNSEL RELIED IN THE CASE OF CIT V. RANCHHOD JIVABHAI NAKHAVA [2012] 21 TAXMANN.COM 159 (GUJARAT )/[2012] 81 CCH 193 GUJ-HC HELD THAT WHERE LENDERS OF ASSESSEE ARE INCOME-TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, ASSESSING OFFICER CANNOT ASK THE ASSESSEE TO FURTHER PROVE GENUINENESS OF TR ANSACTIONS WITHOUT FIRST VERIFYING SUCH FACT FROM INCOME-TAX RETURNS O F LENDERS. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER REFERRED A ND RELIED IN THE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 47 OF 49 CASE OF DCIT V. ROHINI BUILDERS [2002] 256 ITR 360 (GUJ.)/ [2003] 127 TAXMAN 523 (GUJ) OF HONBLE GUJARAT HIGH COURT WHIC H LAID DOWN THAT WHEN THE ASSESSEE HAS PRIMARILY DISCHARGED THE INIT IAL ONUS LAID ON HIM IN TERMS OF SECTION 68 BY PROVIDING DETAILS TO ESTABLISH GENUINENESS OF TRANSACTION, IDENTITY AND CREDITWORT HINESS OF DEPOSITORS THEN THE ASSESSEE IS NOT EXPECTED TO PRO VE GENUINENESS OF CASH DEPOSITED IN BANK ACCOUNT OF THOSE CREDITORS B ECAUSE UNDER THE LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE O F CREDITS IN HIS BOOKS OF ACCOUNTS BUT NOT THE SOURCE OF SOURCE. 22. THE LEARNED COUNSEL RELIED IN THE CASE OF IN THE CA SE OF CIT V. APEX THERM PACKAGING (P.) LTD. [2014] 42 TAXMANN.CO M 473 (GUJARAT) WHEREIN IT WAS HELD THAT WHERE NAME, ADDRESS , PA N COPY OF IT RETURNS , BALANCE SHEET , PROFIT & LOSS ACCOUNT OF ALL CREDITORS / LENDERS AS WELL AS THEIR CONFIRMATION HAS BEEN FURN ISHED , ASSESSING OFFICER COULD NOT MAKE ADDITION ON ACCOUNT OF UNSE CURED LOAN AND INTEREST THEREON. 23. THE LEARNED COUNSEL RELIED IN THE CASE OF CIT V. ORISSA CORPORATION (P) LTD. [1986] 159 ITR 78 (SC)/ 25 TAX MAN 80(SC), THE HON`BLE SUPREME COURT OBSERVED THAT WHEN THE ASSESS EE FURNISHES NAMES AND ADDRESSES OF THE ALLEGED CREDITORS AND TH E GIR NUMBERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH TH E REVENUES CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HA S TO PURSUE THE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 48 OF 49 ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINE SS AND MERE NON- COMPLIANCE OF SUMMONS ISSUED BY THE ASSESSING OFFIC ER UNDER SECTION 131 BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE. 24. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THA T THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS WHICH LAY ON HIM IN THE TERMS OF SECTION 68 OF THE ACT BY PROVIDING IDENTITY OF C REDITORS AND SAME HAS NOT BEEN DOUBTED BY THE AO ALSO. FURTHER, THE A SSESSEE HAS PROVED THE CREDITWORTHINESS BY WAY OF FILING ITR RE TURNS, BANK ACCOUNT, BALANCE SHEET, CONFIRMATION OF THE CREDITO RS. THE ASSESSEE IS NOT EXPECTED TO PROVE THE GENUINENESS OF CASH DE POSITS IN BANK ACCOUNTS OF THOSE E CREDITORS BECAUSE UNDER THE LAW THE ASSESSEE CAN BE ASKED TO PROVE SOURCE OF CREDIT BUT NOT THE SOUR CE OF THE SOURCE AS HELD BY THE HON`BLE BOMBAY HIGH COURT IN THE CAS E OF ORIENT TRADING CO. V. CIT [1963] 49 ITR 723 (BOMBAY). THER EFORE, IN SUCH A SITUATION AND CONSIDERING ABOVE FACT AND FINDING , WE ARE IN COMPLETE AGREEMENT WITH THE REASONING GIVEN BY THE LD. CIT ( A) THAT WHEN FULL PARTICULARS, INCLUSIVE OF THE CONFIRMATION WITH NAM E, PAN, COPY OF INCOME-TAX RETURNS, BALANCE SHEET PROFIT & LOSS ACC OUNT COMPUTATION OF INCOME ARE FURNISHED AND SAME REFLECTED IN THEIR BOOKS OF ACCOUNTS. FURTHER, THE FINDINGS RECORDED BY THE LD. CIT (A) ARE ALSO SUPPORTED BY THE DECISION OF HONBLE GUJARAT HIGH C OURT AND HON`BLE DCIT, CIRCLE-1(1)(2), SURAT VS. KEJRIWAL INDUSTRIES LTD.,/ITA NO.1509/AHD/2016 FOR A.Y. 2011-12 PAGE 49 OF 49 SUPREME COURT AS DISCUSSED ABOVE. THE ADDITION SO M ADE IS RIGHTLY DELETED BY THE LD. CIT (A). IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT (A ), ACCORDINGLY, SAME IS UPHELD. ACCORDINGLY, ALL THE GROUNDS OF APPEAL O F AS TAKEN BY THE REVENUE ARE THEREFORE, DISMISSED. 25. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. 26. THIS ORDER IS PRONOUNCED BY LISTING THE CASE ON THE NOTICE BOARD OF TRIBUNAL UNDER PROVISO TO RULE 34(4) OF INCOME T AX APPELLATE TRIBUNAL RULES 1963. SD/- SD/- (SANDEEP GOSAIN) (O.P.MEENA) JUDICIAL MEMBER ACCOUNT ANT MEMBER SURAT: DATED:4 TH MAY, 2020/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/ GUARD FILE OF ITAT. BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, SURAT