INCME TAX OFFICER-15(1)(1), MUMBAI V. M/S.AGRIPURE TRADEWARE PRIVATE LIMITED, MUMBAI

ITA 1690/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5197 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 15-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Assessee Lawyers: PRAKASH JUNJHUNWALA
• Keywords: Unexplained cash credit; Share purchase agreement; Onus to prove; TDS
• Section: 69C; 133(6); 195; 201; 13; 153; 22; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH MUMBAI BEFORE : SHRI MAHAVIR SINGH , VP & SHRI M.BALAGANESH, AM ITA N O. 16 90 /MUM/ 201 8 ( ASSESSMENT YEAR : 20 14 - 15 ) INCOME TAX OFFICER 15( 1)(1), ROOM NO.456, 4 TH FLOOR AAYAKAR BHAVAN M.K .ROAD, MUMBAI - 40002 VS. M/S. AGRIPURE TRADEWARE PRIVATE LIMITED OFF. M.G. COMPLEX SECTOR 14, VASHI, NAVI MUMBAI - 4 00705 PAN /GIR NO. AAKCA8811A (APPELLANT ) .. (RESPONDENT ) RE VENUE BY SHRI BRAJENDRA KUMAR ASSESSEE BY SHRI PRAKASH JUNJHUNWALA DATE O F HEARING 12 / 04 /202 1 DATE OF PRONOUNCEMENT 20 / 04 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 1690/MUM/2018 FOR A.Y. 20 14 - 15 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 24 , MUMBAI IN APPEAL NO. CIT(A) - 24/ITP - 15(1)(1)/IT - 434/2016 - 17 DATED 21/12/2017 (LD. CIT(A) IN SHORT) AGA INST THE ORDER OF ASSESS MENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 27/12/2016 BY THE LD. INCOME TAX OFFICER 15(1)(1) , MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 2 2. THOUGH THE REVENUE HAD RAISED SEVERAL GROUNDS OF APPEAL BEFORE US, WE FIND THAT THE EFFECTIVE ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S 68 OF THE ACT ON ACCOUNT OF UNSECURED LOANS RECEIV ED IN THE SUM OF RS 1,90,00,000/ - IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE INTERCONNECTED ISSUE INVOLVED THEREIN IS WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF INTEREST PAID ON SUCH UNSECURED LOANS IN THE SUM OF RS 13,08,903/ - IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE B USINESS OF TRADING OF AGRICULTURAL COMMODITIES LIKE WHEAT, PULSES ETC. IT HAD FILED ITS RETURN OF INCOME FOR THE ASST YEAR 2014 - 15 ON 29.9.2014 DECLARING TOTAL INCOME AT RS 1,46,880/ - . WE FIND THAT THE LD AO OBSERVED THAT ON PERUSAL OF THE FINANCIAL STAT EMENTS OF THE ASSESSEE, IT HAD RECEIVED UNSECURED L OANS FROM THE FOLLOWING PARTIES AND PAID INTEREST THEREON AS UNDER: - NAME AND ADDRESS OF THE LENDERS LOAN AMT INTEREST SHRESTH BUILDERS PVT LTD, 9/12, LAL BAZAR STREET, MERCANTILE BUILDING , 1 S T FLOOR, BLOCK D, KOLKATA 95,00,000 8 , 01 , 020 HARIDARSHAN PVT LTD, 28, STRAND ROAD, 2 ND FLOOR, KOLKATA 700001 25,00,000 54 , 658 WITHAL COMMERCIAL PVT LTD, 27, BRABOURNE ROAD, 3 RD FLOOR, ROOM NO. 305, KOLKATA 700001 20,00,000 1, 84 , 685 M AHASATI INVESTMENT PVT LTD, 298, RABINDRA SAR A NI, 3 RD FLOOR, KOLKATA 700073 50,00,000 2, 68 , 540 ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 3 3.1. WE FIND THAT THE ASSESSEE FILED ALL THE NECESSARY DOCUMENTS WITH REGARD TO THE AFORESAID LOANS INCLUDING CONFIRMATION OF LOANS FROM THE RESPECTIVE LE N DERS BEFORE THE LD AO, WHICH WERE SOUGHT TO BE CROSS VERIFIED BY THE LD AO BY ISSUING NOTICES U/S 133(6) OF THE ACT. NOTICES SENT U/S 133(6) OF THE ACT TO 2 PARTIES VIZ SHRESTH BUILDERS PVT LTD AND SHRI MAHASATI INVESTMENT PVT LTD WERE RETURNED UNSERVED B Y THE POSTAL AUTHORITIES. THIS WAS CONFRONTED BY THE LD AO THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE. LATER THE REPLIES WERE FILED BY THE ASSESSEE FROM ALL THE 4 PARTIES IN RESPONSE TO NOTICES ISSUED U/S 133(6) OF THE ACT. WE FIND THAT THE LD AO NOT SATISFIED WITH THE SAME, PROCEEDED TO MAKE FURTHER E NQUIRIES BY ISSUING COMMISSION U/S 131(1)(D) OF THE ACT TO LEARNED JOINT DIRECTOR OF INCOME TAX (INV.) KOLKATA ON 25.11.2016, TO CAUSE NECESSARY ENQUIRIES WITH REGARD TO AFORESAID 4 PARTIES. IN RESPONSE T O THE SAME, THE LEARNED DDIT (INV.) KOLKATA VIDE LET TER DATED 7.12.2016 FORWARDED THE ENQUIRY REPORT STATING THAT DURING THE COURSE OF ENQUIRY, IT WAS SEEN THAT AFORESAID 4 COMPANIES DID NOT EXIST ON THE AFORESAID ADDRESSES WHICH WERE PROVIDED BY THE ASSE S SEE AND RELEVANT ENQUIRIES MADE WITH THE LOCAL PEOPL E IN THE VICINITY OF THE COMPANY ALSO REVEALED THAT THEY HAD NOT HEARD ABOUT THE SAID COMPANIES. 3.2. THEREAFTER, WE FIND THAT THE LD AO PROCEEDED TO EXAMINE THE VARIOUS DOCUMENTARY EVIDENCES SUBMITTED BY THE ASSESSEE EARLIER. WE FIND THAT THE LD AO HAD EXAMINED EACH OF THE PARTIES INDEPENDENTLY FROM ITS FINANCIALS AND CONCLUDED THAT THERE WERE FEW PEOPLE WHO WERE COMMON DIRECTORS IN VARIOUS COMPANIES AND ALL THE AFORESAID 4 COMPANIES DID NOT CARRY ON ANY GENUINE BUSINESS. SOME OF THE COMMON OBSERVATI ONS MADE BY THE LD AO WITH REGARD TO AFORESAID 4 COMPANIES ON EXAMINING THEIR INCOME TAX RETURNS, FINANCIAL STATEMENTS , BANK STATEMENTS ETC ARE AS UNDER: - ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 4 A) EACH COMPANY HAD CLAIMED HUGE REFUNDS IN THE I R INCOME TAX RETURNS FILED WITH THE INCOME TAX DEPARTMENT. B) EACH COMPANY IS HAVING HUGE SHARE CAPITAL, HUGE RESERVES AND SURPLUS, HAD GIVEN HUGE LOANS AND ADVANCES AND HAVING HUGE TURNOVER BUT HAD SHOWN NEGLIGIBLE INCOME IN THEIR RESPECTIVE RETURNS. C ) EACH COMPANY IS NOT DOING ANY GENUINE BUSINESS AND IS MERE A PAPER COMPANY. D) FROM THE BANK STATEMENTS OF THE LENDERS THAT BEFORE EACH LOAN ENTRY , THERE WERE IMMEDIATE CREDIT ENTRIES RECEIVED FROM SOME PARTIES GIVING AN IMPRESSION OF CIRCULAR TRANSACT I ONS. E) INFORMATION IS NOT FOUND ANYWHERE ON TH E WEBSITE OF REGISTRAR OF COMPANIES FOR SHRESTH BUILDERS PVT LTD F) THE DIRECTORS WERE ALSO DIRECTORS IN SEVERAL OTHER COMPANIES. 3.3. WE FIND THAT THE LD AO FURTHER RECORDED A STATEMENT ON OATH U/S 131 OF T H E ACT FROM THE DIRECTOR OF THE ASSESSEE COMPANY ON 2.12.2016 WHEREIN THE DIRECTOR DENIED INITIALLY HAVING ANY KNOWLEDGE ABOUT THE AFORESAID 4 LENDER COMPANIES. HOWEVER, THE SAID DIRECTOR STATED THAT ONE SHRI AMULYA BAHETI AND HIS FATHER HAD INTRODUCED THE AFORESAID 4 COMPANIES TO THE ASSESSEE COMPANY V IDE REPLY TO QUESTION NO. 22 IN THE STATEMENT ON OATH RECORDED ON 2.12.2016. LATER THE LD AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 15.12.2016 FIXING THE CASE ON 19.12.2016 STATING AS TO WHY THE AFOR E SAID LOANS SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT BY TREATING THEM AS NON - GENUINE TRANSACTIONS. WE FIND THAT THE ASSESSEE VIDE REPLY DATED 20.12.2016 FILED BEFORE THE LD AO TO PROVE THE GENUINENESS OF INTER CORPORATE DEPOSITS ( ICDS) AND CREDITWORTHINESS OF LENDERS AS UNDER: - A) STATUS OF ROC COMPLIANCE B) COPY OF LEDGER ACCOUNTS ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 5 C) COPY OF BANK STATEMENT D) COPY OF ITR E) CONFIRMATION OF ACCOUNTS F) COPY OF PAN G ) LEDGER COPIES OF TRANSACTIONS IN THE SUBSEQUENT YEARS 3.4. IT W A S ALSO SPECIFICALLY BROUGHT TO THE NOTICE OF TH E LD AO THAT ALL THE LOANS WERE DULY REPAID BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES IN SUBSEQUENT YEARS WITH INTEREST UPTO THE DATE OF REPAYMENT OF LOANS AND INTEREST HAS BEEN DULY SUBJECTED TO DEDUCTION OF T AX AT SOURCE AT THE APPLICABLE RATES THEREON. W E FIND THAT THE ASSESSEE HAD FILED THE BANK STATEMENTS OF BOTH THE SIDES AND LEDGER COPIES BEFORE THE LD AO. IT WAS ALSO SUBMITTED THAT ALL THE QUERIES RAISED BY THE LD AO ON THE DIRECTOR OF THE ASSESSEE CO M PANY WHILE EXAMINING HIM ON OATH U/S 131 OF THE ACT HAD BEEN DULY RESPONDED BY HIM WITHIN THE ALLOTTED TIME. WE FIND THAT THE LD AO NOT SATISFIED WITH THIS REPLY OBSERVED THAT THE ASSESSEE HAD NOT PRODUCED THE DIRECTORS OF THE LENDING COMPANY BEFORE HIM FOR HIS EXAMINATION AND ACCORDINGLY, THE ASSESS EE HAD FAILED TO PROVE THE THREE INGREDIENTS OF SECTION 68 OF THE ACT VIZ, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. IN VIEW OF AFORESAID OBSERVATIONS, THE LD AO PROCEEDED TO TREAT THE ENT I RE RECEIPT OF UNSECURED LOANS FROM 4 PARTIES AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT STATING THAT THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF LENDERS WERE NOT PROVED BY THE ASSESSEE COMPANY. WE FIND THAT THE LD AO ALSO OBSERVED THA T THE NEW ADDRESS OF THE LENDER COMPANIES WERE N OT PROVIDED BY THE ASSESSEE COMPANY FOR VERIFICATION. SINCE THE LOANS WERE ADDED U/S 68 OF THE ACT, THE CORRESPONDING INTEREST EXPENDITURE THEREON IN THE SUM OF RS 13,08,903/ - WAS ALSO DISALLOWED BY THE LD A O U/S 69C OF THE ACT. ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 6 4. WE FIND THAT THE LD CITA DELETED THE ADDITIONS / DISALLOWANCE MADE BY THE LD AO BY OBSERVING AS UNDER: - ( DECISION ) 2 4 I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS PERUSED THE MATERIAL ON RECORD AND DULY C O NSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION . 2 4 1 GROUNDS NO L IS RAISED AGAINST THE AUS ACTION IN TREATING THE UNSECURED LOAN OF RS 1, 90,00 000/ - RECEIVED FROM M/S SHRESTH BUILDERS LTD , M/S HARIDARSHAN PVT L TD , M / S: WITHAL COMMERCIAL PVT LTD AND MIS, MAHASA T I INVESTMENT PVT LTD AS CASH CREDIT U/S 68 OF THE IT ACT . 2 4 2 THE LD AO HAS MENTIONED T HAT THE IDENTITY AND CREDITWORTHINESS OF M / S SH R ESTH BUILDERS LTD (RS . 95 , 00 , 000 / - ) HARIDARSHAN PVT LTD (RS . 25 , 00, 000 / - ) M / S WITHAL COMMERCIAL LTD (RS . 20 , 00 , 000 / - ) AND M/S MAHASATJ INVESTMENT PVT LTD (RS 50 , 00 , 000 ) BEING THE BENAMI CONCERNS ARE NOT PROVED BY THE COMPANY NOR THE GE NUINENESS OF THE TRANSACTIONS IN THE FORM O F UNSECURED LOAN RAISED BY THE COMPA NY F ROM THE RESPECTIVE ENTITIES THE ENTIRE GAMUT SH OW S THAT THE TOTAL FUNDS OF RS 1,90,00,000/ - HAVE BEEN BROUGHT BY OF UNSECURED L O ANS IN THE NAME OF RESPECTIVE ENTITIES, W HOSE VERY EXI STENCE COULD NOT BE ESTABLISHED NOR THE SOURCES OF THESE FUNDS BY THE ASSESSE E COMPANY. 2 4 3 ACCORDINGLY, THE AO HAS TREATED THE AMOUNT BROUGHT IN BY ASSESSEE IN ITS B OOKS AS UNSECURED LOAN OF RS 1 ,90 , 00 , 000/ - AS UNEXPLAINED CREDIT WITHIN THE MEANING O F SEC 68 OF THE ACT AND ADDED TO THE TOTAL INCOME O F THE ASSESSEE . 2 4 4 T HE AR HAS VEHEMENTLY ARGUED THAT THE AO HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . AR, HAS SUBMITTED IN THE GROUNDS THAT THE APPELLANT COMPANY SUBMITTED THAT IT HAS DISCHARGE D ITS ONUS AND SUBMITTED COMP LETE DETAILS / DOCU MENTS IN SUPPOR T OF UNSECURED LOANS THE APPELLANT COMPANY HAS SUBMITTED DETAILS LIKE: A . LOAN CONFIRMATION B . INCOME TAX RETURN OF THE PARTY C . BANK STATEMENTS OF THE PARTY D . BALANCE SHEET OF THE PARTY IN ORDER TO PROVE THE IDENTITY, CAPACITY AND GEN UINENESS OF TH E LOA N TRANSACTI ON . FURTHER, IT IS THE CASE OF THE APPELLANT COMPANY THAT LOANS WERE SQUARED OFF DURING THE SUBSEQUENT YEAR AND TH E APPELLANT COMPANY HAD ALSO ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 7 PAID INTEREST ON THE SAID LOANS . ACCORDINGLY, IT WAS SUBMITTED THAT THE APPELLANT COMPANY HAS PR OVED ALL THE TH R EE INGREDIENTS VIZ., IDENTITY OF T HE LENDER, CREDIT WORTHINESS OF T HE CREDITOR AND THE G EN UINENESS OF THE TRANSACTIONS TO DISCHARGE ITS ON US U/S.6 8. 2. THE APPELLANT SUBMITTED THAT ALL THE THREE INGREDIENTS WERE SATIS FIED IN THE FOLLOWING MANN ER: - A . THE AP PELLANT HAS ESTABLISHED THE IDENTITY OF THE PARTY BY PROVIDI NG ITS NAME, ADDRE SS, PAN AND COPY OF RETURN OF I NCOME FOR A.Y. 2014 - 1 5. B . T HE APPELLANT HAS ESTABLISHED THE CREDITWORTHINESS OF THE PARTIES BY FILING THE FINANCIALS OF ALL THE PARTI ES AS ON 31. 3.20 14 AND THE BANK STATEMENT OF THE PARTIES REF LECTING PAYMEN T MADE TO THE APPELLANT. C . GENUINENESS OF THE TRANSACTION HAS BEEN EST ABLISHED BY THE APPELLANT BY EXPLAINING THE BUSINESS OF THE APPELLANT, REQUIREMENT OF THE LOANS IN THE BU SINESS OF THE APPELLANT, LOAN CONFIRMATION FROM THE PARTIES AND THE L EDGER ACCOUNT OF THE PARTIES WHEREFROM IT WAS SU BSTANTIATED THAT THE LOANS HAD BEEN S QUARED OFF DURING THE Y EAR UNDER CONSIDERATION. 3. THAT APART, IT IS THE CONTENTION OF THE APPELLANT COMPANY T HAT DURING THE A SSESSMENT PROCEEDINGS, THE AO HAD ISS UED SUMMONS TO THE LENDER PARTIES. THE LENDER PARTIES HAVE IN FACT RE PLIED TO THE SUMMONS AND SUBMITTED THE RELEVANT DETAILS TO THE AO. THIS, IN SUBMISSION OF THE APPELLANT COMPANY SHOULD DI SPEL ALL DOU B TS. 4. THE APPE LLANT STARTED TO HAVE RECEIVED ALL THE UN SECURED LOANS THROUGH BANKING CHANNELS. 5. FURTHER, TH E LD. AO HAS RELIED UPON THE ENQUIRY REPORT OF THE DDI T(INVESTIGATION) KOL KATA VIDE LETTER DATED 07.12.201 6 ABOUT THE NON - EXISTENCE OF THE COMPA NIES ON THE SAID ADDRESSES. 2.4. 5. I HA VE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE LD. AR . I HAVE ALSO GONE THROUGH THE DECISION S RELIED ON BY THE AO AND THE LD. AR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT HA S FILED SEVERAL DETAILS REQUIRED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE PERSONS, AND THE GENUINENESS OF THE TRANSACTION IN THE FORM OF PAN CARDS, IT RETURN COPIES, BANK STATEMENTS, CONFIRMATION, AUDITED ACCOUNTS ETC. AS IS EVIDENT FROM THE RECOR DS AND CLAIMED T HAT IT HAS DISCHARGED ITS ON US. T HE LD. AR HAS FURTHER ARGUED THAT THE TRANSACTION HAS TAKEN PLACE THROUGH BANKING CHANNELS, THEREFORE THE GENUINENESS OF LOAN NEED NOT BE DOUBTED. THE EXCESSIVE RELIANCE WAS PL ACED ON THE ENQUIRY REPORT OF D DIT (INVESTIGATI ON), KOLKATA STATING THAT THE COMPANIES DI D NOT EXISTS ON THE SAID ADDRESSES AND THE RELEVANT ENQUIRIES WITH THE LOCAL PEOPLE IN THE VICINITY OF THE COMPAN IES. ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 8 2.4.6. IN THE INSTANT CASE, HOWEVE R , AS SEEN FROM THE D ETAILS FILED BE FORE THE AO, A SET OF WH ICH WERE ALSO FILED BEFORE ME, I DO NOT FIND ANY INCONSISTENCY OR INCOHERENCE IN THE RECEIPT OF LOANS FROM THE PARTIES. IN SUCH CIRCUMSTANCES, TO ALLEGE THAT THE UNSECURED LOANS OF THE APPELLAN T COMPANY ARE NOT GENUINE WOULD REQUIRE STRON G EVIDENCES. THE I MPUGNED TRANSACTIONS ARE OF RS.1,90,0 0 ,000/ - AND THE SAME HAS ROU TED THROUGH THE BANKING CHANNELS AND THE SOURCE CANNOT BE DOUBTED. FURTHER, THE SAID TRANSACTIONS ARE SQ UARED OFF IN T HE SUBSEQUENT YEAR, INTEREST HAS BEEN PAID AND EVEN TAX HA S BEEN DEDUCTED AT SOURCE O N SUCH INTEREST PAYMENT. THUS, TAKING INTO CONSIDERATION THE ENTIRE FACTUM OF THE CASE, IT WOULD BE INDIS PENSABLE ON THE PARTY OF THE AO TO PRODUCE COMPELLING EVIDENCES T O DISTORT THE PI CTURE SHOWN BY THE APPELLANT COMPANY . 2.4. 7. CONSIDERING THE ABOVE , NOW IT WOULD BE PERTINENT TO ANALYZE THE EVIDENCES RELIED UPON BY THE AO. THE AO HAS PRIMARILY RELIED UPON THE ENQUIRY REPORT OF DDIT(INVESTIGATION), KOLKATA AND THE ENQUIRIES MADE WITH THE LOCAL PEOPLE . SUC H STATEMENTS ARE DEFIN ITELY A GOOD ST ARTING POINT AN D CAN ALSO BE USED TO INITIATE A PROCEEDING, HOWEVER, SUCH STATEMENT CANNO T BE TAKEN AS CONCLUDING EVIDENCE TO NAIL ANY P ERSON E SPECIALLY IN THE FACTS OF THE PRESENT CASE. M/ S. SHRESTH BUILD ERS PVT. LTD., M/S. HARIDARSHAN PVT. LTD., M/S. WIT HAL COMMERCIAL PVT. LTD. A ND M/S. MAHASATI INVESTMENT PVT. LTD. HAD GIVEN RS.1,90,00,000/ - AS UNSE CURED LO AN TO THE APPELLANT COMPANY. ALL THE FOUR COMPANIES HAS INDEPENDENT IDENTITY AT THE DIFFERENT ADDRESSES AND BEING CONTROLLED BY DIFFERE NT PERSONS AND THE LD. AO HAS NOT PROVED ANY CONNECTION BETWEEN THE SAID COMPANIES. AS A RESULT, S UCH EVIDENTS AND STATEMENT BECOMES NULL AND VOID ON THE PRINCIPLES OF NATUR A L JUS TICE . THE AO HAS NOT GATHERED ANY A DDITIONAL / INDEPENDENT EVIDENCE TO SHOW T HAT THE TRANSAC TION WITH THE APPELLANT COMPANY WAS SH AM, FICTITIOUS OR ARTIFI CIAL EXCEPT BELIEVING THE ENQUIRY REPORT OF DDIT (INVESTI GATION), KOLKATA ABOUT THE NON - EXISTENCE OF THE COMPANIES ON THE SAID ADDRESSES. 2.4.8. COMING TO T HE OTHER FACTS OF THE CASE, THE APPEL LANT, U/S.68 IS RE QUIRED TO ESTABLISH THE IDENT ITY, CREDITWORTHINESS OF THE PARTIES AND THE GENUINENESS OF THE TRANSACTION TO DEMONSTRATE THAT THE CASH CREDIT IS GENUINE AND THAT THE SAME CANNOT BE ADDED U /S.68. IN TH E PRESENT CASE, FROM THE RECORDS, IT CA N BE SEEN THAT THE APPELLANT HAS ESTABLISHED THE IDENTITY OF THE PARTIES BY GIVING ITS NAME, ADDRESS, PAN AND COPY OF RETURN OF INCOME FOR A.Y.2014 - 15. FURTHER, THE APPELLANT HAS ESTABLISHED THE CREDITWORTHINESS O F THE PARTIES BY FILIN G THE FINANCIALS OF A LL THE PAR TIES AS ON 31/03/2014 AND THE BANK STATEMENT OF THE PARTIES REFLECTING PAYMENT MADE TO T HE APPELLANT. FROM THE SAID FINANCIALS OF THE PARTIES, IT CAN BE SEEN THAT THE PARTIES HAD SUFFICIENT CREDIT WORTHINESS TO LEND RS.1,90,00 ,000/ - TO THE APPELLA NT COMPANY. NEXT GENUINENESS OF THE TRANSACTION WAS DEMONSTRATED BY THE APPELLANT BY EXPLAINING THE B USINESS OF THE APPELLANT, REQ UIREMENT OF THE LOANS IN THE ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 9 BUSINESS OF THE APPELLANT, DETAILS OF DEDUCTION OF TDS ON INTEREST PAYMENT, LOAN C ON FIRMATION FRO M THE PARTIES AND THE LEDG ER ACCOUNT OF THE PARTIES WHEREFORM IT WAS SUBSTANTIATED THAT THE LOANS HAD BEEN SQUARED OF F IN THE SUBSEQUENT YEAR. MORE O VER, THE PARTIES HAVE CONFIRMED THE TRANSACTION TO THE AO, IN REPLY TO SUMMONS ISSUED . TH E A O HAS NOT ANSWE RED SEVERAL VALID POINTS RAISED BY THE APPELLANT NOR PROVED HOW THE DETAILS LIKE PAN, THE IT RERUNS , CONFIRMATION LETTERS, BANK STATEMENTS OF THE CREDITORS, AUDITED BALANCE SHEET OF THE C REDITORS CANNOT BE TAKEN NOTE OF . THUS, FROM THE ABOVE D ISCUSSION, I CONSIDER TH AT THE APPELLANT COMPANY HAD PRODUCED ENOUGH EVIDENCES TO DISCHARGE THE ONUS LAID UPON IT UNDER THE ACT. 2.4.9. IF THE SAID STATEMENTS AND THE EVIDENCES ARE KEPT IN JUXTAPOSITION W ITH THE DOCUMENTS, DETAILS AND RECORDS PRODUCED B Y THE AP PELLANT COMPANY IT CAN BE SEEN THAT T HE APPELLANT COMPANY HAS DISC HARGED , AS STATED ABOVE, THAT THE ONUS LAID UPON IT. IT IS ALSO HELD IN SEVERAL CASES THAT WH ATEVER MAY BE THE S TRENGTH OF PRESUM PTION IT CANNOT REPLACE EVIDENCE AND IN THE PRESENT C ASE THE APPELLA NT HAS PRODUCED OVE RWHELMIN G EVIDENCES TO PROVE ITS CASE. 2.4.10. THE ITAT MUMBAI IN THE CASE OF ANANT SHELTERS P LTD. (2012) 2 TAXMANN.COM 153 HAS LAID DOWN CERTAIN PRINCIPLES WITH REGARD TO SECTION 68 WHI CH THE AO IS BOUND TO F OLLOW . THEY ARE REPRODUCE D AS UNDER (PARA - 7) *(I) SEC TION 68 CAN BE INVOKED WHEN FOLLOWING THREE CONDITIONS ARE SATISFIED: - ( A ) W HEN THERE IS CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY THE ASSESSEE (B) SUCH CREDIT HAS TO BE A SUM OF MONEY DURING THE PREVIOUS YEAR (C) EI THER THE AS SESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDITS FOUND IN THE BOOKS OR THE EXPLANATION OFFERED BY THE ASSESSEE, IN THE OPINION OF THE AO, IS NOT SATISFACTORY . IT IS ONLY THEN THAT THE SUM SO CREDITED M AY BE CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE OF TH AT PREVIOUS YEAR. ( B ) THE EXPRE SSION THE ASSESSEE OFFERS NO EXPLANATION MEANS THE ASSESSEE OFFERS NO PROPER , REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SUMS FOUND CREDITED IN THE BOO KS MAINT AINED BY THE ASSESSEE. THE OPINION OF THE AO FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFACTORY IS RE QUIR ED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABLE ON THE RECORD . THE OPINION OF THE AO IS RE QUIRED TO BE FO RMED OBJECTIVELY WITH REFER ENCE TO THE MATERIAL ON RECORD FILE. ONCE THE EXPLANATION OF THE ASSESSEE IS FOUND UNBELIEVABLE O R FALSE THE AO IS NOT RE QUIRED TO BRING POSITIVE EVIDENCE ON RECORD TO TREAT AMOUNT IN QUE STION AS INCOME OF THE ASSESSEE. WHILE CON SIDERING THE EXP LANATION OF THE ASSESSEE, THE AO HAS TO ACT REASONABLY - APPLICATION OF MIND IS THE S INE QUA NON FOR FORMING THE OPINION. ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 10 (III) PH RASE APPEARING IN THE SECTION - NATURE AND SOURCES OF SUCH CREDITS SHOULD BE UNDERSTOOD IN RIGHT PERS PECTIVE, S O THAT G ENUINENESS OF THE TRANSACTION CAN BE DECIDED ON MERITS AND NOT ON PREJUDICES. COURTS ARE OF THE FIRM VIEW THAT THE EVIDENCE PRODUCED BY THE ASSESSEE CANNOT BE BRUSHED ASIDE IN A CA SUAL MANNER. ASSESSEE CANNOT BE ASKED TO PROVE IMPOSSIBLE. EXPLANATI ON A BOUT SOURCE OF SOURCE OR ORIGINS OF THE ORIGIN CANNOT AND SHOULD NOT BE CALLED FOR WHILE MAKING INQUIRY UNDER SECTION. ( IV) IN THE MATTERS RELATED TO SECTION 68 BURDEN OF PROOF CANNO T BE DISC H ARGED TO THE HI L T - SUCH MATTERS ARE DECIDED ON T HE PARTI CULAR FA CTS OF THE CASE AS WELL AS ON THE BASIS OF PREPONDERANCE OF PRO BABILITIES. CREDIBILITY OF THE E XPLANATION, NOT THE MATER NITY OF EVIDENCES, IS THE BASIS FOR DECIDING THE CASES FALLING UNDER SECTION 68. (V) C ONFIRM ATORY LETTER S OR A/C. PAYEE CHEQUES DO NOT PROVE THAT THE AMOUNT IN QUESTION IS PROPERLY EXPLAINED FOR THE PURPOSE OF SECTION 68. ASSESSEE HAS TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS THE GENUINENESS OF THE TRANSACTION. ALL THE THREE INGREDIENTS ARE CUMULATIVE A ND NOT EX CLUSIVE. (VI) IN MATTERS REGARDING CASH CREDIT THE ONUS OF PRO OF IS NOT A STATIC ONE. AS PER THE PROVISIONS OF SECTION THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE. AMOUNT APPEA RING IN THE BOOKS OF A/CS. O F THE ASSESSEE IS CONSIDERED A PROOF AGAINST HIM. HE CAN PROVE THE IDENTI TY OF THE CREDITORS BY EITHER FURNISHING THEIR PANS OR ASSESSMENT ORDERS. SIMILARLY, GENUINENESS OF THE TRANSACTION CAN BE PROVED BY SOWING THAT THE MONEY WAS RECEIVED BY AN ACCOUNT PA YEE CHEQUE OR BY DRAFT. CREDIT WORTH INESS OF THE LENDER CAN BE ESTABLISHED BY ATTENDING CIRCUMSTANCES. ONCE THE ASSESSEE PRO DUCES EVIDENCES ABOUT IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE LENDER ONU S OF PRO OF SHIFTS TO THE REVENUE. ALSO, THE HON BLE SUPRE ME COURT IN THE CASE OF LO VELY EXPORTS PRIVATE LIMITED (2008) 216 CTR 195 (SC), HAS STATED THAT THE AO IS AT LIBERTY TO BRING TO TAX THE AMOUNTS IN THEIR RESPECTIVE HANDS OF THE CREDITORS IF THEIR IDENTITY, GENUINENESS AND CREDITWORTHINESS IS NOT PROVED. T HE AO SHOULD HAVE MADE EFF ORTS TO ASSESSEE THE AMOUNTS IN THE H ANDS OF THE CREDITORS AT LEAST ON PROTECTIVE BASIS. ON THE OTHER HAND THE APPELLANT HAS FILED THE FOLLOWING DETAILS IN TH E CASE OF THE CREDITORS TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS. 1 . CONFIRMATION OF A/C. BY THE PARTIES. 2 . INCOME TAX RETURNS OF THE PARTIES FOR A.Y.2014 - 15. 3 . BANK ST ATEMENTS OF THE PARTIES SHOWING THE LOAN TRANSACTION S. ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 11 4 . AUDITED BALANCE SHEET & P & L A/C. OF THE CREDITORS ALONG WITH THE SCHE DULE WHEREIN CREDIT IN THE NAME OF THE AP PELLANT IS OUTSTANDING IN THEIR BOOKS. 5 . PAYMENT OF INTEREST TO CREDITORS AFTER SUBJECTING THE AMOUNT TO TDS. 6 . CONFIRMATION F ROM THE LOAN CRE DITO RS. 2.4.11. AS SEEN FROM T HE ABOVE, THE APPELLANT HAS FURNISHED ALL THE DETAILS PROVING CONCLUSIVELY THE THREE INGREDIENTS OF IDENTITY AND CREDIT WORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. THE AMOUNT WAS PAI D BY T HE CREDITORS FROM THEIR RUNNING BANK ACCOUNTS WHICH WAS ACCOUNTED IN THE BOOKS OF THE APPELLANT AS WELL AS THE CREDIT ORS AS SEEN FROM THE AUDITED ACC OUNTS FILED. TH E TRANSACTIONS WERE ALSO CONFIRMED BY THE CREDITOR WH O IS ASSESSED TO TAX. FU RTHER, THE APPELLANT HAS PAID INTEREST TH ROUGH BANKS TO THE CREDI TORS BY DULY SUBJECTING THE INTEREST AMOU NT TO TDS . NOWHERE THE AO HAS CHALLEN GED THE IDENTITY, CREDIT WORTHINESS OF THE LENDERS AND THE GENUINENESS OF THE TRANSACTIONS WITH ANY TANGI BLE MATE RIAL. I FIND THAT THE AO WA S IN POSSESSION OF GOOD INFORMATION IN THE FORM OF ENQUI RY REPORT, TO BEING WITH, BUT HE COULD NEITHER SUCCEED TO REP UDIATE THE EVIDENCES FILED BY THE APPELLANT NOR HE COULD GATHER INDEPENDENT EVIDENCE EVEN TO EST ABLISH THE SURROUNDING CIR CUMSTANCES NOT TO SPEAK OF LEADI N G EVIDENCE TO PROVE HIS HYPOTHESIS. IN VIEW OF THE ABOVE DISCUSSION, I HOLD THAT THE LOAN TAKEN BY TH E APPELLANT FROM THE SAID CONCERN M/S. SHRESTH BUILDERS PVT. LTD., M/ S. HARIDARSHAN PVT. LTD., M/S. WITHAL COMMERCIAL PVT. LTD., AND M/S. MAHASATI INVESTMENT PVT. LTD., CANNOT BE DOUBTED AND THE ADDI TION MADE BY THE AO U/S.68 OF THE ACT CANNOT SURVIVE THE TEST OF APPEAL. I, THEREFORE, DIRECT THE AO TO WITHDRAW THE ADDITION. THIS G ROUND IS ALLOWED. 2.4.12. GROUND NO.2 IS ON ACCOUNT OF DIS ALLOWANCE OF INTERE ST PAID ON UNSECURED LOAN TAKEN. THE AO HAS DIS ALLOWED THE INTERE ST EXPENDITURE AMOUNTING TO RS.13,0 8,903/ - INCURRED ON UNSECURED LOAN FORM THE ABOVE MENTIONED FOUR PARTIES UNDER SECTION 69C OF THE ACT. SINCE , I HAVE ALLOWE D GROUND NO.2, TH IS GROUND IS IN FAVOUR OF THE APPELLANT . I, THEREFORE, DIRECT THE AO TO WITHDRAW THE ADDITION . TH E GROUND IS ALLOWED. 5. WE FIND THAT THE FOLLOWING DOCUMENTS WERE SUBMITTED BY THE ASSESSEE BEFORE THE LD AO WHICH ARE NOT IN DISPUTE : - A) COPY OF INCOME TAX RETURNS (ITRS) OF ALL THE LENDERS B) COPY OF BALANCE SHEET & PROFIT AND LOSS ACCOUNT OF ALL THE LENDERS C) COPY OF R EL EVANT EXTRACTS OF THE BANK STATEMENTS OF ALL THE LENDERS INCLUDING THE DETAILS OF IMMEDIATE SOURCE OF CREDIT ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 12 D) C OPY OF LEDGER ACCOUNT FOR THE ENTIRE PERIOD EVIDENCING THE LOAN OBTAINED BY THE ASSESSEE, INTEREST PAID AND LOAN REPAID TO THE LENDERS IN SUB SE QUENT YEARS. E) COPY OF LEDGER CONFIRMATION FOR ALL THE LOANS OBTAINED FROM LENDERS F) COVERING LETTER OF REPLY F ILED BY ALL THE LENDERS IN RESPONSE TO NOTICE ISSUED U/S 133(6) OF THE ACT BEFORE THE LD AO 5.1. WE FIND THAT THE LD AO HAD OBSERVED THAT TH E NOTICE ISSUED U/S 133(6) OF THE ACT WAS RETURNED UNSERVED BY THE POSTAL AUTHORITIES IN RESPECT OF TWO LENDERS. B UT IT IS NOT IN DISPUTE THAT THE SAID FACT WAS FULLY CONFRONTED BY THE LD AO BEFORE THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COMPANY WHI CH FACT IS MENTIONED IN THE ASSESSMENT ORDER ITSELF. HENCE THE ASSESSEE COMPANY IN O RDER TO COMPLY WITH THE DUE P ROCESS OF LAW, HAD FILED ALL THE DETAILS THAT WERE CALLED FOR BY THE LD AO IN RESPECT OF ALL THE LENDERS BY DULY ANSWERING ALL THE REQUISITE QUESTION S THEREON. NO FAULT COULD BE ATTRIBUTED ON THE PART OF THE ASSESSEE. IT IS N OT IN DISPUTE THAT THE ASSESS EE HAD REPAID ALL THE LOANS TO THE AFORESAID 4 LENDERS IN FEB 2016 RELEVANT TO ASST YEAR 2016 - 17 AND THAT ADMITTEDLY THE ENQUIRIES WERE CARRI ED OUT B Y THE LD AO IN ASST YEAR 2017 - 18. THE ASSESSEE CANNOT BE EXPECTED TO HAVE ALL THE LATEST ADDRESS OF ALL TH E LENDERS WITH WHOM THE TRANSACTIONS HAVE ALREADY BEEN COMPLETED BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS CO NTINUOUS TRANSACTIONS WITH THOSE LENDERS EVEN AFTER ASST YEAR 2016 - 17. HENCE MERELY BECAUSE THE LD AO WAS NOT AB LE TO SERVE THE NOTICE U/S 133(6) OF THE ACT ON THOSE LENDERS AT THE LAST AVAILABLE ADDRESS WITH GIVEN BY THE ASSESSEE , NO FAULT COULD BE A TTRIBUTE D ON THE ASSESSEE FOR THE SAME. 5.2. WE FIND FROM THE BANK STATEMENTS OF THE LENDER COMPANIES, THAT ALL T HE LENDER COMPANIES HAD SUFFICIENT SOURCES IN THE FORM OF AVAILABLE BANK ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 13 BALANCES AND CHEQUE CREDITS IN THEIR RESPECTIVE BANK ACCOUNTS AND AD MITTEDLY THOSE FUNDS WERE UTILISED BY THEM TO ADVANCE INTER CORPORATE DEPOSITS TO THE ASSESSEE COMPANY. IT IS NOT IN DISPUTE THAT THE INTER CORPORATE DEPOSITS ADVANCED BY THE LENDER COMPANIES WERE DULY REFLECTED IN THEIR REGULAR BOOKS OF ACCOUNTS AND IN THEIR FI NAL BALANCE SHEET WHICH ARE ALREADY FORMING PART OF RECORDS. IT IS NOT IN DI SPUTE THAT ALL THE TRANSACTIO NS HAVE BEEN ROUTED THROUGH REGULAR BANKING CHANNELS. IT IS NOT IN DISPUTE THAT THE SAID INTER CORPORATE DEPOSITS DID CARRY INTEREST AND ASS ESSEE HA D DULY PAID THE SAME AFTER DEDUCTION OF DUE TAX AT SOURCE AT THE APPLICABLE RA TES THEREON. IT IS NOT IN DISPUTE THAT THE LOANS WERE FULLY REPAID BY THE ASSESSEE COMPANY TO ALL THE LENDERS IN FEB 2016. 5.3. IT IS NOT IN DISPUTE THAT ALL THE 4 LENDERS HAD SUFFICIENT NET WORTH WITH ADEQUATE SOURCES TO ADVANCE INTER CORPORATE DEP OSITS TO THE ASSESSEE COMPANY WHICH IS EVIDENT FROM THE TABLE BELOW: - SR. NO. PAR TICULARS NET W ORTH (RS. (AS ON 31/03/2013) AMOUNT OF ICDS GIVEN DURING THE YEAR TO THE COMPANY 1. HARIDARSHAN SALES PVT. LTD., 75,89,81,917.00 25,00,000.00 2. SHRESTH BUILDERS PRIVATE LIMITED 22,30,74,892.00 95,00,000.00 3. SHRI MAHASATI INVESTMENT LIMITED 13,47,94,370 .00 50,00,000.00 4. WITHAL COMMERCIAL PRIVATE LIMITED 35,34,65, 022.00 20,00,0 00.00 WE FIND THAT THE LD AO HAD OBSER VED THAT THESE LENDERS HAD SHOWN NEGLIGIBLE INCOME IN THEIR ITRS. THIS IS ABS OLUTELY IRRELEVANT AS THERE I S NO REQUIREMENT IN THE STATUTE THAT INTER CORPORATE DEPOSITS SHOULD BE ADVANCED ONLY OUT OF INCOME O F THE LENDER COMPANIES. IT CAN ALSO BE DONE OUT OF THEIR BORROWINGS OR SHARE CAPITAL OR RESERVES AND SURPLUS OR ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 14 ANY OTHER SOU RCE. WE FIND THAT THE LD AO HIMSELF HAD ADMITTED IN HIS ASSESSMENT ORDER THAT ALL THE 4 LENDER COMPANIES HAD DISCLOSED HUGE TURNO VER IN THEIR PROFIT AND LOSS ACCOUNT. HENCE THE CREDITWORTHINESS OF THE LENDERS IS PROVED BEYOND DOUBT IN THE INSTANT CASE. 5.4. WE FIND THAT ALL THE 4 L ENDER COMPANIES HAVE DULY FILED THEIR INCOME TAX RETURNS FOR THE RELEVANT ASSESSMENT YEAR. WE FIND T HAT THE ASSESSEE HAD FURNISHED THEIR PAN, INCOME TAX RETURN ACKNOWLEDGEMENTS , COPY OF ROC RETURNS, ETC TO PROVE THEIR IDENTIT Y BEYOND DOUBT IN THE INSTANT CASE. 5.5. WE FIND THAT THE RECEIPT OF LOANS FROM 4 LENDER COMPANIES, PAYMENT OF INTEREST THEREON AND REPAYMENT OF LOANS WERE MADE THROUGH REGULA R BANKING CHANNELS BY ACCOUNT PAYEE CHEQUES WHICH IS EVIDENT FROM THE BANK STA TEMENTS ENCLOSED IN THE PAPER BOOK FILED BEFORE US, WHICH ARE ALREADY FORMING PART OF RECORDS. WE ALSO FIND THAT THE LENDER COMPA NIES HAD ALSO DULY DISCLOSED THE FACT OF ADVANCI NG INTER CORPORATE DEPOSITS IN THEIR BALANCE SHEETS AND HAD ALSO DULY CONFIRME D THE LOAN TRANSACTIONS WITH THE ASSESSEE COMPANY BY SIGNING THE LEDGER COPY OF CONFIRMATION WHICH IS ALSO ENCLOSED IN PAPER BOOK FILED BEFORE US. THE REPLIES TO NOTICE U/S 133(6 ) OF THE ACT DULY CONFIRMING THE LOAN TRANSACTIONS WERE ALSO DULY SUBMITTED BE FORE THE LD AO WHICH IS ALSO ACKNOWLEDGED BY THE LD AO IN HIS ASSESSMENT ORDER. HENCE THE GENUINENESS OF TRANSACTIONS HAD BEEN DUL Y PROVED BY THE ASSESSEE BEYOND DOUBT IN THE INS TANT CASE. 5.6. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS ORCHID INDUSTRI ES P LTD REPORTED IN 88 TAXMANN.COM 502 HAD HELD THAT THE ASSESSEE HAD PRODUCED ON RECORD THE DOCUMEN TS TO ESTABLISH THE GENUINENESS OF THE PARTY SUC H AS PAN OF ALL THE CREDITORS ALONG WITH THE CONFIRMATION, THEIR BANK STATEMEN TS SHOWING PAYMENT OF SHARE A PPLICATION ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 15 MONEY. THE ASSESSEE HAD ALSO PRODUCED THE ENTIRE RECORD REGARDING ISSUANCE OF SHARES, I.E. , ALLOTMENT OF SHARES TO THESE PARTIES, THEIR SH ARE APPLICATION FORMS, ALLOTMENT LETTERS AND SHARE CERTIFICATES, SO ALSO THE BOOKS OF ACCOUNT. THE BALANCE - SHEET AND PROFIT AND LOSS ACCOUNT OF THOSE PERSONS DISCLOSED THAT THEY HAD SUFFICIENT FUNDS IN THEIR ACCOUNTS FOR INVESTING IN THE SHARES OF THE ASSE SSEE. IN VIEW OF THESE VOLUMINOUS DOCUMENTARY EVIDENCE, ONLY BECAUSE THOS E PERSONS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER WOULD NOT NEGATE THE CASE OF THE ASSESSEE. THEREFORE, THE ADDITION WAS LIABLE T O BE DELETED. WE FIND THAT THE CASE OF THE ASSE SSEE BEFORE US IS EVEN BETTER IN AS MUCH AS THE PARTIES HAD DIRECTLY RESP ONDED TO THE SUMMONS ISSUED U/S 13 1 OF THE ACT BEFORE THE LD AO BY FURNISHING THE REQUISITE DETAILS. 5.7. WE FIND THAT THE ENTIRE A DDITION HAS BEEN MADE BY THE LD AO OUT OF MERE S USPICION, SURMISE AND CONJECTURE AND BY IGNORING COMPLETELY ALL THE RELEV ANT STATUTORY DOCUMENTS FILED BY T HE ASSESSEE BEFORE HIM. WE FIND THAT THE LD AO HAD NOT FOUND ANY DEFICIENCIES/ DEFECTS IN THE DOCUME NTARY EVIDENCES SUBMITTED BY THE ASSESSEE IN THE INSTANT CASE. WE ALSO FIND THAT THE LD CITA IN PAGE 12 OF HIS ORDER H AD STATED THAT THE LD AO HAD ISSUE D SUMMONS TO THE LENDER COMPANIES IN THE COURSE OF ASSESSMENT PROCEEDINGS TO VERIFY THE LOAN TRANSACT IONS AND THAT ALL THE LENDER PARTIES HAD DULY RE PLIED TO THE SUMMONS BY SUBMITTING THE RELEVANT DETAILS BEFORE THE LD AO . THIS FACTUAL FINDING GIVEN BY T HE LD CITA HAD NOT BEEN CONTROVERTED BY THE LD DR BEFORE US. WE FIND THAT THE LD AO HAD NOT APPRECIAT ED THE FACT THAT WHEN THE LOANS RECEIVED BY THE ASSESSEE WERE BOGUS, THEN THERE IS NO QUESTION OF REPAYMENT OF THE SAME T O THEM BY THE ASSESSEE. IN THE IN STANT CASE, ADMITTEDLY, THE ASSESSEE HAD DULY REPAID THE LOANS TO 4 LENDER COMPANIES. IF THE LOANS R ECEIVED BY ASSESSEE ARE ITS OWN INCOME, THEN THE RE IS NO NEED TO MAKE REPAYMENT OF THE ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 16 SAME TO LENDER COMPANIES. THIS CL INCHING FACTUAL EVIDENCE HAD APPAR ENTLY MISSED THE ATTENTION OF THE LD AO WHILE FRAMING THE ASSESSMENT. HENCE IT COULD BE SAFELY CONC LUDED THAT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS BY PROVING THE THREE NECESSARY INGREDIENTS OF SECTION 68 OF THE ACT IE. IDENTITY OF THE LENDERS, CREDI TWORTHINESS OF THE LENDERS AND GENUINENESS OF TRANSACTIONS IN THE INSTANT CASE. HENCE IN VIEW OF THE AFORESAID OBSERVATIONS AND RESPECTFULLY FOLLOWI NG THE JUDICIAL PRECEDENT RELIED UPON HEREINABOVE, WE HOLD THAT THE ADDIT ION MADE BY THE LD AO HAD BEEN RIG HTLY DELETED BY THE LD CITA U/S 68 OF THE ACT. 5. 8 . SINCE THE LOAN AMOUNT HAS BEEN HELD BY US AS G ENUINE, THE CORRESPONDING INTEREST PAYMENT MADE THEREON AFTER SUBJECTING THE SAME TO TDS COMPLIANCES, DESERVES TO BE ALLO WED. IT IS NOT THE CASE OF THE RE VENUE THAT THE INTER CORPORATE DEPOSITS RECEIVED BY THE ASSESSEE FROM AFORESAID 4 COMPANIES WERE NOT UTILIZED FOR THE PURPOSE OF BUSINESS OF THE ASSE SSEE COMPANY. HENCE THE INTEREST PAID ON SUCH BORROWINGS ARE ALLOWED AS DEDUCTION. 5. 9 . ACCORDINGLY, TH E GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED ON 20 / 04 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI ; DATED 20 / 04 / 2 021 KARUNA , SR.PS ITA NO . 1690/MUM/2018 M/S. AGRIP URE TRADEWARE PVT. LTD., 17 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGIST RAR) ITAT, MUMBAI 1. THE APPELLANT 2 . THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//