Dy. Commissioner of Income Tax, Lucknow V. M/s Maa Raktdantika Contractors and Suppliers (P) Ltd., Lucknow

ITA 170/LKW/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2543 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Assessee Lawyers: YOGESH AGARWAL
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 170/LKW/2017 ASSESSMENT YEAR: 2012 - 13 DY. CIT RANGE 4 LUCKNOW V. M/S MAA RAKTDANT IKA CONTRACTORS AND SUPPLIERS (P) LTD. 19/843, INDIRA NAGAR LUCKNOW T AN /PAN : AANFM5702C (APP ELLA NT) (RESPONDENT) APP ELL ANT BY: SHRI C. K. SINGH, D.R. RESPONDENT BY: SHRI YOGESH AGARWAL, ADVOCATE DATE OF HEARING: 24 10 201 8 DATE OF PRONOUNCEMENT: 3 1 10 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF LD. CIT(A) - 2, LUCKNOW DATED 21/12/2016 AS PER FOLLOWING GROUNDS OF APPEAL: - 1 . THE COMMISSIONER OF INCOME - TAX (APPEALS), LUCKNOW HAS ERR ED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.1,39,60,000/ - MADE ON ACCOUNT OF UNVERIFIABLE UNSECURED LOANS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS UNABLE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE LENDERS AS WELL AS GENUINENESS OF THE TRANSACTION. 2 . THE COMMISSIONER OF INCOME - TAX (APPEALS), LUCKNOW HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,77,703/ - ON ACCOUNT OF VARIOUS OTHER EXPENSES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF EXPENDITURE INCURRED. ITA NO.170/LKW/2017 PAGE 2 OF 37 3 . THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUNDS OF APPEALS, AS STATED ABOVE, AS AND WHEN NEED TO DOING SO ARISES WITH THE PRIOR PERMISSION OF THE COURT. 2 . THE BRIEF FACTS IN THIS CASE ARE THAT FOR ASSESSMENT YEAR 2012 - 13 ASSESSEE FILED RETURN OF INCOME SHOWING TOTAL INCOME OF RS.15,50,380/ - . ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER A T AN INCOME OF RS.1,59,88,080/ - VIDE ORDER PASSED UNDER SECTION 143(3) OF THE ACT BY MAKING VAR IOUS ADDITIONS/DISALLOWANCES AS APPEARING IN THE ASSESSMENT ORDER. 3 . FIRST GROUND OF APPEAL BY THE REVENUE RELATES TO DELETION OF ADDITION OF RS.1,39,60,000/ - MADE ON ACCOUNT OF UNSECURED LOANS. ASSESSING OFFICER IN THE ASSESSMENT ORDER EXAMINED UNSECURED L OANS OF RS.1,39,60,000/ - AND THE FINDINGS IN THE ASSESSING OFFICERS ORDER IS AS UNDER: - IN VIEW OF THE ABOVE CIRCUMSTANCES I HAVE NO HESITATION IN HOLDING THAT THE ESSENTIAL CONDITIONS I.E. THE IDENTITY AND CREDITWORTHINESS OF THE LENDER AS WELL AS THE G ENUINENESS OF TRANSACTION IS NOT ESTABLISHED BY THE ASSESSEE IN THE CASE OF ANY OF THE 37 PERSONS FROM WHOM THE ASSESSEE HAS RECEIVED UNSECURED LOANS. ACCOR DINGLY THIS TOTAL AMOUNT OF RS. 1,39,60, 000 / - IS TREATED AS UNEXPLAINED DEPOSIT AND IS ADDED TO THE T OTAL INCOME OF ASSESSEE AS THE EXPLANATION AND EVIDENCES PRODUCED BY THE ASSESSEE IN THIS REGARD ARE CONSIDERED UNSATISFACTORY AND INSUFFICIENT. 4 . BEFORE THE LD. CIT(A) , ASSESSEE HAD FILED DETAILED WRITTEN SUBMISSION, WHICH IS AS UNDER: - THE APPELLANT HAS FILED WRITTEN SUBMISSIONS GIST OF WHICH IS AS UNDER: - ITA NO.170/LKW/2017 PAGE 3 OF 37 THE LEARNED AO HAS STATED THE ABOVE LOANS TO BE BOGUS AND THE LENDERS CREDITWORTHINESS AND IDENTITY WERE NOT ESTABLISHED. HENCE THE SAME HAS BEEN ADDED TO THE INCOME TO THE PARTICULAR YEAR. IN THE ORDER PASSED BY THE AO THE FOLLOWING HAVE B EEN GENERALLY MENTIONED REPEATEDLY FOR THE LENDERS: - FEW PERSONS WERE PRODUCED FOR EXAMINATION ON 10TH MARCH, 2015. HOWEVER ONLY 6 OF THEM HAD ORIGINAL DOCUMENTATION FOR IDENTIFICATION TO ESTABLISH THE IDENTITY. DIFFER ENCE BETWEEN THE DATE OF DEMAND DRAFT AND THE DATE THE SAME IS CREDITED IN THE BOOKS OF ACCOUNTS. THE LAND IN THE NAME OF THE PERSON WAS NOT ADEQUATE TO PRODUCE SUCH AMOUNT OF YIELD TO ENABLE THE LENDER TO FORWARD THE QUANTUM OF LOAN. COPY OF THE BANK STAT EMENTS OF THE LENDERS WERE NOT PROVIDED. WITH REGARD TO THE ABOVE ALLEGED IRREGULARITIES POINTED OUT IN THE ORDER WE WOULD LIKE TO SUBMIT BEFORE YOU THAT: - THE AO HAD ASKED ALL THE PERSONS WHO HAD GIVEN THE LOAN TO APPEAR BEFORE HIM ON 10TH OF MARCH, 2015. MOST OF THE PERSONS WHO HAD GIVEN THE LOAN WERE PRODUCED BEFORE THE AO. THEREAFTER THE AO DEMANDED THE ORIGINAL IDENTITY PROOF OF THE CONCERNED PERSONS WHICH THERE WERE NOT CARRYING SINCE IT WAS NOT INFORMED PRIOR. HOWEVER, ALL THE PERSONS WERE CARRYING P HOTOCOPIES OF THEIR IDENTITY PROOF WHICH HAS ALSO BEEN ACKNOWLEDGED BY THE AO IN HIS ORDER IN PARA 5. FURTHER IN CASE THERE WAS ANY IOTA OF DOUBT IN THE MIND OF THE AO THAT THE PERSON'S IDENTITY WAS DOUBTFUL THE SAME SHOULD HAVE BEEN CHECKED AND VERIFIED B Y THE COUNSEL PRESENT THERE AT THE TIME OF HEARING. THE MONTH OF MARCH IN ANY YEAR IS THE PRIME CULTIVATION SEASON FOR MOST PERSONS IN RURAL INDIA. SINCE PREDOMINANTLY THE LENDERS ITA NO.170/LKW/2017 PAGE 4 OF 37 WERE FROM VILLAGES HENCE MOST OF THEM COULD NOT BE ABLE TO MAKE IT FOR EXA MINATION IN DUE COURSE. IN THOSE CASES WE HAD PROVIDED THE AFFIDAVIT FOR DISCHARGE OF OUR ONUS. WE HAD ALSO NEARLY ALL OUR REPLIES SUBMITTED DURING THE PROCEEDINGS ALSO REQUESTED THE AO TO ISSUE NOTICES UNDER SEC 131 AND SEEK INFORMATION FROM THEIR END ON THE ADDRESSES PROVIDED BY US. HOWEVER, THE AO IN HIS WISDOM CHOSE NOT TO SEND THEM NOTICE FOR VERIFICATION AND CALLED THEM UPON FOR PERSONAL HEARING. AS WAS INFORMED EARLIER DUE TO ONGOING PEAK CULTIVATION SEASON IT WAS NOT POSSIBLE FOR ALL TO APPEAR IN P ERSON. THE DIFFERENCE BETWEEN THE DEMAND DRAFT DATES AS MENTIONED IN THE AFFIDAVITS SUBMITTED BY THE LENDERS AND THE ACTUAL ENTRY INTO THE BOOKS HAS ALSO BEEN HIGHLIGHTED, BY THE AO TO BE ONE OF THE REASONS FOR ADDING THE RECEIVED AMOUNTS AS INCOME. WE, WO ULD LIKE TO HIGHLIGHT THE FACT THAT IT IS QUITE POSSIBLE THAT THE DEMAND DRAFTS WERE ISSUED FROM THE BANKS EARLIER AND WERE HANDED OVER TO THE COMPANY. HOWEVER, THE SAME WERE BANKED BY THE COMPANY AS AND WHEN THE NEED FOR THE SAME AROSE. THE DIFFERENCE BET WEEN THE TWO DATES IS THUS QUITE EXPLAINABLE AND WARRANTS NO REASON OF SUSPICION. FURTHER AS HIGHLIGHTED IN ALL THE CASES THE DEMAND DRAFT DATES WERE BEFORE THE DATES OF THEM BEING CREDITED IN THE BOOKS OF ACCOUNTS. THE AO HAS DONE A VERY DETAILED ANALYSIS OF THE LAND HOLDINGS OF THE LENDERS AND HAS TRIED TO DERIVE THE YIELD OF THE LAND MERELY ON THE BASIS OF THE SIZE OF THE HOLDING. HOWEVER, THE YIELD OF ANY AGRICULTURE LAND DEPENDS UPON THE QUALITY OF SEEDS, SOIL AND CULTIVATION SKILLS. SECONDLY, THE QUAN TUM OF SALES IS ALSO DEPENDENT ON THE CROP WHICH HAS BEEN SOWED. IN ALL THE PARAGRAPHS HIGHLIGHTING SHORT YIELD THE AO HAS NOT PAID COGNIZANCE TO ANY OF THE ABOVE FACTORS WHICH HAVE A DIRECT BEARING ON THE PRODUCTION OF THE PRODUCE. HENCE BY MERELY ASSUMI NG THAT CERTAIN PORTION OF LAND WOULD BE INADEQUATE TO PRODUCE THE AMOUNT LENT IS ABSOLUTELY BASELESS. ITA NO.170/LKW/2017 PAGE 5 OF 37 SECONDLY THE AO HAS ALSO NOT CONSIDERED THE POSSIBILITY OF THE LENDERS HAVING INCOME FROM OTHER SOURCES AND NOT ONLY UPON AGRICULTURAL INCOME. ALSO IT CO ULD BE POSSIBLE THAT THE OTHER FAMILY MEMBERS OF THE LENDERS WOULD HAVE SEPARATE SOURCE OF INCOME. THE FARMERS ARE ALL ILLITERATE AND HENCE DO NOT MAINTAIN ANY RECORDS FOR THE PRODUCE. HENCE, THE OBSERVATION OF THE AO THAT NO SUCH RECORDS WERE PRODUCED IS BASELESS SINCE THE MATTER IS RELATED TO 3 YEARS AGO AND NO FARMER IN PRACTICE MAINTAIN ANY SUCH RECORDS FOR VERIFICATION. THUS ALL THE ABOVE FACTORS HIGHLIGHT THE FACT THAT THE ADDITIONS DONE ARE PURELY ADHOC IN NATURE AND ARE REQUIRED. IT HAS ALSO BEEN AL LEGED IN THE ORDER THAT THE BANK ACCOUNT STATEMENTS OF ALL THE LENDERS WERE NOT PROVIDED. IN THIS RESPECT WE WOULD LIKE TO SUBMIT THAT LENDERS BEING IN THE RURAL PART OF INDIA WERE NOT FULLY CONVERSANT WITH THE BANKING FACILITIES. MOREOVER WE ARE ATTACHING A CERTIFICATE FROM ALLAHABAD UP GRAMIN BANK DATED 06.04.2015 STATING THAT ALL THE DD'S WHICH WERE GIVEN TO THE ASSESSEE COMPANY AS LOAN WERE OBTAINED FROM THEM. IT ALSO SPECIFIES THE ACCOUNT NUMBERS FROM WHERE THE DD WERE MADE WHICH CLEARLY DEMONSTRATES T HAT THEY WERE MADE FROM BANKING CHANNELS AND NOT IN CASH AS ALLEGED IN THE ORDER. HON'BLE SIR IT IS AN ESTABLISHED PRINCIPLE OF LAW THAT IN ORDER TO INVOKE SEC 68 OF THE INCOME TAX ACT, 1961 IT NEEDS TO BE BROUGHT ON RECORD EMPHATICALLY THAT THERE ROUND TR IPPING OF FUNDS AND MERE NON PRODUCTION OF LENDER/SHAREHOLDER ETC CANNOT BY ITSELF BE A GROUND FOR MAKING ADDITION U/S 68. HELD IN A) JODH ITAT IN 100 TTJ 644 B) DHC IN DIVINE LEASING ETC 299 ITR 268 C) CAT HC IN 168 ITR 493 D) GUJ HC IN ROHINI BUILDERS (S UPRA) ITA NO.170/LKW/2017 PAGE 6 OF 37 E) SCORISSA CORPORATION (SUPRA) F) SC IN ANIS AHMED 297 ITR 441 G) BHC IN 90 ITR 396 H) PATNA HC IN 151 ITR 150 I) DHC IN RUNGTA IRRIGATION IN OUR INSTANT CASE ALL THE LENDERS WERE VERIFIABLE (MANY WERE PHYSICALLY PRESENT ON 10TH MARCH HEARING) THOUG H THE AO DID NOT GIVE THEM AN OPPORTUNITY BASED ON WHIMSICAL REASON OF CARRYING PHOTOCOPIES OF THE PROOFS. FURTHER THE AO ALSO DID NOT EXHAUST ALL THE REMEDIES OF ENSURING THEIR IDENTITY BY ISSUING NOTICES UNDER SEC 131 AND CALLING FOR INFORMATION. AN ASSE SSEE CANNOT BE HELD RESPONSIBLE FOR FAILURE ON PART OF AO TO NOT DO THEIR DUTY IN ENTIRETY. THE AO IN ITS ORDER MENTIONS THAT ON 25.02.2015 SEVERAL RECORDS SUCH AS IDENTITY PROOF AND AFFIDAVITS OF THE LENDERS WERE PRODUCED BEFORE HIM FOR VERIFICATION. IT I S TO BE NOTED THAT FEW OF THE LENDERS ALSO POSSESS PAN WHICH WAS ALSO HIGHLIGHTED TO HIM DURING THE COURSE OF THE PROCEEDINGS. WE ARE ATTACHING A DETAILED CHART OF THE LENDERS ALONG WITH THE DETAILS AS FILED WITH THE DEPARTMENT DURING THE COURSE OF THE HEA RING. 5 . THE LD. CIT(A) AFTER CONSIDERING THE FACTS OF CASE, ASSESSMENT ORDER AND THE WRITTEN SUBMISSIONS OF THE ASSESSEE , HELD AS FOLLOWS: - 5(4) I HAVE EXAMINED THE FACTS AND CIRCUMSTANCES OF THE CASE. I HAVE CONSIDERED THE FINDINGS OF THE ASSESSING OFFIC ER IN THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. I FIND THAT THE APPELLANT ACCEPTED UNSECURED LOANS OF RS.1,39,60,000/ - FROM AS MANY AS 37 PERSONS. THE APPELLANT FILED CONFIRMATIONS AND ITA NO.170/LKW/2017 PAGE 7 OF 37 OTHER DETAILS AND ALSO PRODUCED THEM DURING THE ASSESS MENT PROCEEDINGS BUT THE AO RECORDED STATEMENTS OF 6 OF THEM ONLY AND DID NOT EXAMINE THE OTHER PERSONS. AFTER EXAMINATION THE AO MADE THE ADDITION OF RS.1,39,60,000/ - FOR REASONS MENTIONED IN RESPECT OF EACH PERSON. THE ISSUE INVOLVED IS THEREFORE THE ADD ITION MADE UNDER SECTION 68 OF THE ACT. NOW IT IS WELL ESTABLISHED THAT THE APPELLANT IS EXPECTED UNDER SECTION 68 OF THE AC TO SATISFACTORILY EXPLAIN TO THE AO A CREDIT APPEARING IN ITS BOOKS OF ACCOUNTS BY HAVING CONSIDERATION OF THREE ASPECTS, VIZ., A . ID ENTITY OF THE CREDITOR IN WHOSE NAME THE CREDIT IS REFLECTED IN THE BOOKS OF THE APPELLANT. B . CREDITWORTHINESS OF THE PERSON IN WHOSE NAME THE CREDIT IS REFLECTED IN THE BOOKS OF THE APPELLANT. C . GENUINENESS OF THE TRANSACTION RESULTING IN THE CREDIT IN THE BO OKS OF THE APPELLANT. I THEREFORE PROCEED TO EXAMINE EACH UNSECURED LOAN TO EXAMINE WHETHER THE CREDIT RELATING THERETO IS SATISFACTORILY EXPLAINED FOR THE PURPOSE OF SECTION 68 OF THE ACT. 5(5)(A)THE LIST OF 37 PERSONS AND THE AMOUNT OF LOANS ADVANCED B Y THEM TO THE APPELLANT IS AS UNDER - SI. NO. NAME OF THE PARTIES LOAN AMT. BANK STATEMENT DD DATE PAN 1 MAJEED KHAN 4,00,000 YES 20/05/11 2 ISTIFA KHAN 4,00,000 YES 20/05/11 3 AZHAR BEG 5,00,000 YES 20/05/11 AITPB7757N 4 NAF EES BEG 3,00 ,000 YES 20/05/11 5 RUAAB KHAN 2,00,000 YES 20/05/11 ANKPK2665C 6 YASIR BEG 5,00,000 YES 14/06/11 7 MAROOF BEG 6,00,000 YES 14/06/11 ARPPB6615A 8 SHEELA DEVI W/O GOVING SINGH SAIDNAGAR 4,00,000 YES 06/09/11 9 HAR NARAYAN S/O DEENE 3,00,000 YES 01/09/11 10 SHYAM BIHARI SAIDNAGAR 2,50,000 YES 29/09/11 ITA NO.170/LKW/2017 PAGE 8 OF 37 11 BHAGWAT SINGH S/O ARJUN 3,00,000 YES 06/09/11 \ 2 SEWARAM S/O BHAIYALAL 3;00,000 YES 06/09/11 13 SANDESHANDEEN S/O 2,00,000 YES 06/09/11 14 KRISHNA GOPAL S/O SUNNALAL SAIDNAGAR 4,70,000 YES 01/09/11 15 BABULAL NISHAD S/O MUNNA 4,50,000 YES 06/09/11 AEGPN7914N 16 ISRAEL 2,00,000 NO AKNPK9449G 17 LILAWATI W/O RADHEYLAL 3,50,000 YES 06/09/11 18 ASHOK SINGH S/O GOVIND SINGH SAIDNAGAR 3,30,000 YES 01/09/11 19 BHANU PRATAP SINGH S/O DANGAL SINGH SAIDNAGAR 3,00,000 YES 01/09/11 20 ASHIF ALI 3,00,000 NO BEJPA7083K 21 UMA SHANKAR 2,50,000 YES 19/09/11 AICPG6543L 22 SHIVAKANT (UNSEC. LOAN) 2,50,000 YES 29/09/11 2 3 MANIKRAM GUPTA S/O GAJHADHAR DARNARGANJ 4,50,000 YES 01/09/11 ABBPG1008L 24 AWADH BIHARI 2,50,000 YES 19/09/11 25 JAMEL KHAN (PROP. O F HAMMAZ TRADERS) 3,80,000 YES 26/07/11 ARWPK7220R 26 HAROON KHAN 3,00,000 NO BRPPK5940J 27 RAMKUMAR S/O RAD HEY LAL SAIDNAGAR NA 2,00,000 YES 01/09/11 2 8 BALRAM S/O SUNNALAL 3,50,000 YES 06/09/11 29 JAIPRAKASH S/O PARMOLE 3,50,000 YES 01/09/11 30 BHAGIRATH 5,00,000 NO AKDPY7743F 31 DHARMENDRA SINGH 5,00,000 YES 02/06/11 32 HASIB BEG 3,00,000 NO & RADHEYLAL S/O SUNNALAL 4,30,000 YE S 01/09/11 34 VISHNU NARAYAN (SAIDNAGAR) 1,00,000 YES 29/09/11 35 GOVIND SINGH S/O BHICHURA SINGH SAIDNAGAR 4,50,000 YES 06/09/11 36 RAHMAN BHAI 15,00,000 NO ABBPR7702C 37 R.K. GUPTA S/O RAMDAS 3,50,000 YES 06/09/11 TOTAL 1,39,60,000 5(5)(B)EXAMINATION OF THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND THE GIST OF EVIDENCES FILED BY THE APPELLANT REVEALS THE FOLLOWING IN RESPECT OF THE 37 PERSONS FROM WHOM THE LOANS WERE RECEIVED BY THE APPELLANT - 1. ISRAEL ITA NO.170/LKW/2017 PAGE 9 OF 37 OBSERVATIONS OF THE AO - A. RS. 2,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON C OULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A . VOTER ID AND PAN CARD COPY AVAILABLE TO ESTABLISHED THE IDENTITY B . B. SUMMON U/S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDE D FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. 2. ASHIF ALI OBSERVATION OF THE AO - A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. CREDIT WORTHINESS OF THE PERSON COU LDN'T BE ESTABLISHED. C. STATEMENT RECORDED ON 10 - 03 - 2015. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT A. VOTER ID AND PAN CARD COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN STILL BEEN PRODUCED FOR PERSONAL VERIFICATIO N. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. IN THE STATEMENT RECORDED MR. ISRAEL HAS SPECIFICALLY MENTIONED ABOUT HIS INCOME AND HOW THE SAME IS GENERATED. 3. HAROON KHAN OBSERVATIONS OF THE AO - ITA NO.170/LKW/2017 PAGE 10 OF 37 A. RS.3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT A. VOTER ID AND PAN CARD COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U/S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOA N OUT OF OWN INCOME. 4. BHAGIRATH OBSERVATIONS OF THE AO - A. RS. 5,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CRE DIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U/S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVI T HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. 5. HAISB BEG OBSERVATIONS OF THE AO - A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION ITA NO.170/LKW/2017 PAGE 11 OF 37 C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U/S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. 6. MAJEED KHAN OBSERVATIONS OF THE AO - A. RS. 4,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTAB LISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D . BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 7. HAR NARAYAN OBSERVATIONS OF THE AO - A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 01.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. STATEMENT RECORDED ON 10.03.2015 C. CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. ITA NO.170/LKW/2017 PAGE 12 OF 37 EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U/S 131 WAS NOT GIVEN STILL BEEN PRODUCED FOR PERSONAL VERIFICATIO N. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. E. ALLAHABAD GRAMIN BANK HAS GIVEN A CER TIFICATE AND MENTIONED ON RECORD THAT THEY CAN'T PROVIDE THE BANK STATEMENT FROM WHICH THE LOAN WAS GIVEN. F. IN THE STATEMENT RECORDED MR. HAR NARAYAN HAS SPECIFICALLY MENTIONED ABOUT HIS INCOME AND HOW THE SAME IS GENERATED. 8. BABULAL NISHAD OBSERVATIONS OF THE AO - A. RS. 4,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. STATEMENT RECORDED ON 10.03.2015 C. CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES F ILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID, PAN, KISANBAHI, COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN STILL BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LO AN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. E. ALLAHABAD GRAMIN BANK HAS GIVEN A CERTIFICATE AND MENTIONED ON RECORD THAT THEY CAN'T PROVIDE THE BANK S TATEMENT FROM WHICH THE LOAN WAS GIVEN. ITA NO.170/LKW/2017 PAGE 13 OF 37 F. IN THE STATEMENT RECORDED MR. BABULALNISHAD HAS SPECIFICALLY MENTIONED ABOUT HIS INCOME AND HOW THE SAME IS GENERATED. 9. AZHAR BEE OBSERVATIONS OF THE AO A. RS. 5,00,000 RECEIVED, MENTIONED IN AFFID AVIT THAT GIVEN ON 20.5.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. STATEMENT RECORDED ON 10.03.2015 C. CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID, PAN, COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN STILL BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. E. IN THE STATEMENT RECORDED MR. AZHAR BEG HAS SPECIFICALLY MENTIONED ABOUT HIS INCOME AND HOW THE SAME IS GENERATED. 10. RAHMAN BHAI (HIFZUL REHMAN) OBSERVATIONS OF THE AO - A. RS. 15,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 26.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. STATEMENT RECORDED ON 10.03.2015 C. CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPE LLANT - A. PAN ITR, COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN STILL BEEN PRODUCED FOR PERSONAL VERIFICATION. ITA NO.170/LKW/2017 PAGE 14 OF 37 C. IN THE STATEMENT RECORDED MR. HIZFUL REHMAN HAS SPECIFICALLY MENTIONED ABOUT HIS INCOME AND HOW THE SAME I S GENERATED. 11. ISTIFA KHAN OBSERVATIONS OF THE AO A. RS. 4,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID AND KISHAN BAHI COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 12. NAFEES BEG OBSERVATIONS OF THE AO A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCE S FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID AND KISHANBAHI COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. ITA NO.170/LKW/2017 PAGE 15 OF 37 C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING T HE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 13. RUAAB KHAN OBSERVATIONS OF THE AO A. RS. 2,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 20.05.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID A ND PAN COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTA BLISH THAT THE LOAN GIVEN IS SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 14. YASIR BEG OBSERVATIONS OF THE AO - A. RS. 5,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 14.6.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011 . B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID AND KISHAN BAHI COPY AVAILABLE TO ESTABLISHED THE IDENTITY ITA NO.170/LKW/2017 PAGE 16 OF 37 B. SUMM ON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CAS H WAS NOT DEPOSITED IN THE BANK. 15. MAROOF BEG OBSERVATIONS OF THE AO - A. RS. 6,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 14.06.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A . VOTER ID AND PAN COPY AVAILABLE TO ESTABLISHED THE IDENTITY B . SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFIC ATION. C . AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D . BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 16. SHEELA DEVI OBSERVATIONS OF THE AO - A. RS. 6,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDE NCES FILED AND CONTENTIONS OF THE APPELLANT - ITA NO.170/LKW/2017 PAGE 17 OF 37 A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 17. SHYAM BIHARI OBSERVATIONS OF THE AO - A. RS. 2,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 2 9.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 12.10.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABL E TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 18. BHAGWAT SINGH OBSERVATIONS OF THE AO - A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEE N PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. ITA NO.170/LKW/2017 PAGE 18 OF 37 EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BAN K. 19. SEWARAM OBSERVATIONS OF THE AO - A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 29.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVI DED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. ALLAHABAD GRAMIN BANK HAS GIVEN A CERTIFICATE AND MENTIONED ON RECORD THAT THE DRAFT HAS BEEN GIVEN THROUGH BANKING CHANNEL. 20. SEWARAM OBSERVATIONS OF THE AO - A . RS.2,00,000 RECEIVED, ME NTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER CREDITED IN THE BOOKS ON 27.09.2011. B . NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C . IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCE AND CONTENTIONS OF THE APPELLANT - ITA NO.170/LKW/2017 PAGE 19 OF 37 A. V OTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. ALLAHABAD GRAMIN BANK HAS GIVEN A CERTIFICATE AND MENTIONED ON RECORD THAT THE DRAFT HAS BEEN GIVEN THROUGH BANKING CHANNEL. 21. KRISHNA GOPAL OBSERVATIONS OF THE AO - A. RS. 4,70,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 01.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID, RATION CARD COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS B EE N PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. ALLAHABAD GRAMIN BANK HAS GIVEN A CERTIFICATE AND MENTIONED ON RECORD THAT THEY CAN' T PROVIDE THE BANK STATEMENT FROM WHICH THE LOAN WAS GIVEN. 22. LILAWATI OBSERVATIONS OF THE AO - A. RS. 3,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PE RSONAL VERIFICATION ITA NO.170/LKW/2017 PAGE 20 OF 37 C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. BANK PASSBOOK COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN P RODUCED FOR PERSONAL VERIFICATION PLUS LILAWATIJI IS NO MORE. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. ALLAHABAD GRAMIN BANK HAS GIVEN A CERTIFICATE AND MENTIONED ON RECORD THAT THEY CAN'T PROVIDE THE BANK ST ATEMENT FROM WHICH THE LOAN WAS GIVEN. 23. ASHOK SINGH OBSERVATIONS OF THE AO - A. RS. 3,30,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 01.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATI ON C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. BANK STATEMENT COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERS ONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 24. BHANU PRATAP SI NGH OBSERVATIONS OF THE AO - A. RS. 3,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 01.09.2011. ITA NO.170/LKW/2017 PAGE 21 OF 37 HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULD N'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. BANK STATEMENT COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DEC LARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOR DEPOSITED IN THE BANK. 25. UMA SHANKAR OBSERVATIONS OF THE AO - A. RS. 2,50,000 RECEIVED, MENTIONE D IN AFFIDAVIT THAT GIVEN ON 19.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELL ANT - A. VOTER ID, PAN ITR COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMEN T AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 26. SHIVAKANT OBSERVATIONS OF THE AO - ITA NO.170/LKW/2017 PAGE 22 OF 37 A. RS. 2,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 29.09.2011. HOWEVER, CREDITED IN T HE BOOKS ON 12.10.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. RATION CARD, KISHANBAHI AND BANK STATEMENT COPY AVAIL ABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE L OAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 27. MANIKRAM GUPTA OBSERVATIONS OF THE AO - A. RS. 4,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 01.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. PAN & KISHAN BAHI COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NO T GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITE D IN THE BANK. ITA NO.170/LKW/2017 PAGE 23 OF 37 28. AWADH BIHARI OBSERVATIONS OF THE ASSESSING OFFICER A. RS. 2,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 19.9.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICA TION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID &RATION CARD COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 29. 29. J AMEEL KHAN OBSERVATIONS OF THE AO - A. RS. 3,80,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 26.07.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERS ON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A . VOTER ID & PAN COPY AVAILABLE TO ESTABLISHED THE IDENTITY B . SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C . AFFIDAVIT HAS BEEN PROVIDED FOR DECLARA TION OF GIVING THE LOAN OUT OF OWN INCOME. D . BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 30. ITA NO.170/LKW/2017 PAGE 24 OF 37 30.RAM KUMAR OBSERVATIONS OF THE AO - A. RS. 2,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 26.07.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID & PAN COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILA BLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 31. BALRAM OBSERVATIONS O F THE AO - A. RS. 3,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 2 7.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. ITA NO.170/LKW/2017 PAGE 25 OF 37 D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS N OT DEPOSITED IN THE BANK. 32. JAIPRAKASH OBSERVATIONS OF THE AO - A. RS. 3,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 01.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 33. DHARMENDRA SINGH OBSERVATIONS OF THE AO - A. RS. 5,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 02.06.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVID ENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN O UT OF OWN INCOME. ITA NO.170/LKW/2017 PAGE 26 OF 37 D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 34. RADHEY LAL OBSERVATIONS OF THE AO - A. RS. 4,30,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN O N 01.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT. A. VOTER ID COPY AVAILAB LE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 35. 35. VISHNU NARAYAN OBSERVATIONS OF THE AO - A. RS. 1,00,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 29.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 12.10.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HE NCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. ITA NO.170/LKW/2017 PAGE 27 OF 37 D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 36. GOVIND SINGH OBSERVATIONS OF THE AO - A. RS. 4,50,000 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTH INESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIONS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. C. AFFIDAVIT HAS BEE N PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN INCOME. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 37. R K GUPTA OBSERVATIONS OF THE AO - A. RS. 3,50,875 RECEIVED, MENTIONED IN AFFIDAVIT THAT GIVEN ON 06.09.2011. HOWEVER, CREDITED IN THE BOOKS ON 27.09.2011. B. NOT BEEN PRODUCED FOR PERSONAL VERIFICATION C. IDENTITY AND CREDIT WORTHINESS OF THE PERSON COULDN'T BE ESTABLISHED. EVIDENCES FILED AND CONTENTIO NS OF THE APPELLANT - A. VOTER ID COPY AVAILABLE TO ESTABLISHED THE IDENTITY B. SUMMON U \ S 131 WAS NOT GIVEN HENCE NOT BEEN PRODUCED FOR PERSONAL VERIFICATION. ITA NO.170/LKW/2017 PAGE 28 OF 37 C. AFFIDAVIT HAS BEEN PROVIDED FOR DECLARATION OF GIVING THE LOAN OUT OF OWN VERIFICATION. D. BANK STATEMENT AVAILABLE AND ESTABLISH THAT THE LOAN GIVEN IS OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. 5(6) IN THE INSTANT CASE, AS IS EVIDENT FROM THE EXAMINATION ABOVE, THE APPELLANT HAS FILED NECESSARY DETAILS TO PROVE THE IDENTITY , CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. THE APPELLANT FILED COPIES OF VOTERS ID CARD/DRIVING LICENSE/RATION CARD/PAN CARD WHEREVER POSSIBLE TO ESTABLISH THE IDENTITY OF THE LENDERS. THE APPELLANT FILED AFFIDAVITS OF THE LENDERS WHO HAVE ACC EPTED ADVANCING LOAN TO THE APPELLANT. THE APPELLANT HAS ALSO FILED COPIES OF BANK STATEMENTS TO SHOW THAT THE BANK DRAFTS WERE ROUTED THROUGH THE BANK ACCOUNTS OF THE LENDERS. THESE EVIDENCES PROVE THE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. IN 'SAROGI CREDIT CORPORATION VS. CIT, 103 ITR 344 (PATNA), IT HAS BEEN HELD THAT IT IS NOT FOR THE ASSESSEE TO EXPLAIN FURTHER AS TO HOW THE OR IN WHAT CIRCUMSTANCES THE DEPOSITOR OBTAINED THE MONEY, OR HOW HE CAME TO MAKE AN ADVANCE OF THE MONEY AS A LO AN TO THE ASSESSEE; THAT ONCE SUCH IDENTITY IS ESTABLISHED AND THE CREDITORS, HAVE PLEDGED THEIR OATH THAT THEY HAVE ADVANCED THE AMOUNTS IN QUESTION TO THE ASSESSEE, THE BURDEN IMMEDIATELY SHIFTS ON TO THE DEPARTMENT TO SHOW AS TO WHY THE ASSESSEE'S CASE CANNOT BE ACCEPTED AND WHY SUCH DEPOSIT TO BE ASSESSED AS THE INCOME FROM A SUPPRESSED SOURCE. 5(7) IT IS ALSO NEEDS CONSIDERATION THAT THE AFFIDAVITS FILED BY THE APPELLANT IN RESPECT OF THE LENDERS HAVE NOT BEEN ADVERSELY COMMENTED BY THE AO BY EXAMINATI ON. IN THE CASE OF MEHTA PAREKH AND CO. VS CIT 30 ITR 181 (SC), IT WAS LAID DOWN THAT THE CONTENTS OF THE AFFIDAVIT CANNOT BE DISBELIEVED WITHOUT REJECTING THE SAME. THE HON'BLE COURT LAID DOWN THAT THE PERSONS WHO GAVE THE AFFIDAVITS WERE NOT CROSS - EXAMIN ED, IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE THE CORRECTNESS OF THE CASH BOOK ENTRIES OR THE STATEMENTS MADE IN THE AFFIDAVITS. THE DECISION OF THE SUPREME COURT LAYS DOWN 'THAT IF THERE IS NO MATERIAL WHATSOEVER ITA NO.170/LKW/2017 PAGE 29 OF 37 ON RECORD FOR DOUBTING THE VERACITY OF T HE STATEMENTS MADE IN THE AFFIDAVITS AND IF THE DEPONENTS HAVE ALSO NOT BEEN SUBJECTED TO CROSS - EXAMINATION FOR BRINGING OUT THE VALIDITY OF THEIR STATEMENTS, THEN THE TRIBUNAL WOULD NOT BE JUSTIFIED IN DOUBTING THE CORRECTNESS OF THE STATEMENT MADE BY THE DEPONENTS IN THE AFFIDAVITS.' THUS THE AFFIDAVITS NEED NOT BE ACCEPTED AS RELIABLE WHEN THERE IS ENOUGH MATERIAL ON RECORD TO DOUBT THE VERACITY OF THE TRANSACTION. IN THE INSTANT CASE THERE IS NO MATERIAL WITH THE AO TO DISCARD THE EVIDENCE FILED IN THE FORM OF AFFIDAVITS. 5(8) THE AO HAS ALSO NOTED AT PARAGRAPH 5 OF THE ASSESSMENT ORDER THAT THE APPELLANT PRODUCED THE LENDERS FOR EXAMINATION BUT STATEMENTS OF ONLY 6 PERSONS WERE RECORDED. THE REMAINING PERSONS WERE NOT EXAMINED AS THE OTHER LENDERS DID NOT SHOW THEIR IDENTITY TO THE AO. I FIND THAT IN CASE THE AO HAD ANY DOUBTS THAT THE PERSON PRODUCED FOR EXAMINATION IS NOT THE SAME PERSON AS THE ONE WHO ADVANCED THE LOAN; ADEQUATE INQUIRIES SHOULD HAVE BEEN CONDUCTED BY THE AO IN FORM OF ISSUE OF SUMMO NS UNDER SECTION 131 OF T HE ACT. THE AO CHOSE TO IGNORE THE AFFIDAVITS WITHOUT EXAMINATION OF THE LENDERS BY ISSUE OF THE NOTICES. WHEN THE ASSESSEE HAS FILED AFFIDAVITS OF THE CASH CREDITORS, THE INITIAL BURDEN PLACED UPON THE ASSESSEE CAN BE SAID TO HAVE BEEN DISCHARGED AND IF THERE IS ANY DOUBT WITH REGARD TO THE CREDITWORTHINESS, THE ASSESSING OFFICER SHOULD EXAMINED THE CREDITORS DIRECTLY AND IN THE ABSENCE OF TAKING SUCH RECOURSE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TAKING AN ADVERSE INFERENCE WITH REGARD TO THE CREDITWORTHINESS OF THE CREDITORS. 5(9) A REFERENCE IN THIS CONNECTION MAY BE MADE TO THE DECISION OF HON'BLE THIRD MEMBER ITAT, LUCKNOW BENCH IN THE CASE OF VISHNU JAISWAL VS ITO IN ITA NO. 336 (LKW.) OF 2011 DATED MAY 1, 2012 WHEREIN IT WAS LAID DOWN AS UNDER THE ASSESSING OFFICER SHOULD NOT HAVE COME TO ANY CONCLUSION WITHOUT EXAMINING THE CASH CREDITORS. THE ITA NO.170/LKW/2017 PAGE 30 OF 37 ASSESSEE CANNOT BE AWARE OF THE SOURCE OF CREDITORS, WHICH WOULD BE WITHIN THE PERSONAL KNOWLEDGE OF THE CREDITORS. MERE DOU BT WITH REGARD TO THE CREDITWORTHINESS SHOULD NOT AUTOMATICALLY REFLECT IN DISBELIEVING THE CASE OF THE ASSESSEE TO MAKE ADDITION UNDER SECTION 68 WITHOUT SHOWING THAT THE ASSESSEE WOULD HAVE EARNED MORE INCOME FROM ANY SPECIFIC SOURCE, IN THE LIGHT OF THE EXPRESSION 'MAY' USED IN SECTION 68. THE PROVISIONS OF SECTION 68 SHOULD BE READ IN CONJUNCTION WITH SECTION 106 OF THE EVIDENCE ACT. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN OF PROVING IDENTITY, GENUINENESS OF TRANSACTIONS AND ALSO CREDITWORTHINESS OF THE THREE CREDITORS BY PRODUCING THEIR RESPECTIVE BANK ACCOUNTS. ENTRY IN THE PASS BOOK OF A THIRD PARTY CAN BE TAKEN AS PRIMARY EVIDENCE IN PROOF OF THE FACT THAT LOAN WAS ADVANCED BY THIRD PARTY. THUS, THE INITIAL ONUS SHIFTS ONTO THE REVENUE TO PROVE THAT THE CREDITORS LACK CREDITWORTHINESS AND TO COME TO SUCH CONCLUSION, THE ASSESSEE CANNOT BE ASKED TO PRODUCE ANY EVIDENCE WHICH IS WITHIN THE PERSONAL KNOWLEDGE OF THE THIRD PARTY. IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT EXAMINE THE PARTIES AND PROCEEDED ON THE ASSUMPTION THAT CREDITORS WOULD NOT HAVE SAVED ANY MONEY TO ADVANCE THE LOAN. IN THE CIRCUMSTANCES OF THE CASE, THE VIEW TAKEN BY THE ACCOUNTANT MEMBER IS IN ACCORDANCE WITH LAW. IN OTHER WORDS, IT IS NOT A FIT CASE TO MAKE ADDITION UNDER SECTION 68. 5(10) THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION IS THEREFORE ESTABLISHED. THE TRANSACTIONS WITH THE CREDITORS ARE THROUGH BANK DRAFTS ROUTED THROUGH BANK ACCO UNTS. THE CREDITORS WHO HAVE ADVANCED LOANS TO THE APPELLANT HAVE GIVEN THEIR AFFIDAVITS WHICH WERE ITA NO.170/LKW/2017 PAGE 31 OF 37 FILED WITH THE AO. I AM THEREFORE OF THE OPINION THAT THE ASSESSEE HAS DISCHARGED THE ONUS. THERE IS NO FINDING OF THE AO IN ASSESSMENT ORDER TO THE CONTRAR Y. UNDER THE CIRCUMSTANCES, I FIND THAT THERE WAS NO JUSTIFICATION WITH THE AO TO MAKE AN ADDITION FOR LOANS RAISED BY APPELLANT FROM LENDERS WHO HAVE NOT EVEN BEEN EXAMINED AND IN RESPECT OF WHOM NOTHING ADVERSE HAS BEEN FOUND BY THE AO. THE AO HAS RAISED PRESUMPTIONS AGAINST THE CREDITS WITHOUT EXAMINATION OF THE CREDITORS. IN THE PRESENT CASE, THE APPELLANT HAS SUCCESSFULLY DISCHARGED HIS ONUS BUT THE AO HAS NOT BEEN ABLE TO GATHER ANY ADEQUATE MATERIAL, TO CONCLUDE THAT THE ENTRY IN QUESTION REPRESENTED THE INCOME OF THE ASSESSEE FROM SUPPRESSED SOURCE. ON THE CONTRARY THE APPELLANT HAS FILED ALL RELEVANT EVIDENCES TO PROVE THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION, WHICH HAVE NOT BEEN DOUBTED BY THE AO. IN VIEW THEREOF AND RELYI NG ON CASE AUTHORITIES DISCUSSED SUPRA THE UNSECURED LOAN OF RS. 1,39,60,000/ - IS SATISFACTORILY EXPLAINED AND THEREFORE THE ADDITION OF RS. 1,39,60,000/ - IS DELETED. 6 . AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AN D AT THE TIME OF HEARING, LD. D.R. VEHEMENTLY ARGUED THAT ONE OF THE ESSENTIAL INGREDIENT ENSHRINED IN SECTION 68 OF THE ACT I.E. CREDITWORTHINESS OF THE PERSONS COULD NOT BE ESTABLISHED AND, THEREFORE, IN SUPPORT OF ASSESSING OFFICERS FINDING , LD. D.R. S UBMITTED THAT T HE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE SUSTAINED. 7 . THE LD. A.R. OF THE ASSESSEE, ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT POWER OF THE LD. CIT(A) BEING CO - TERMINUS WITH THAT OF THE ASSE SSING OFFICER HAS ITA NO.170/LKW/2017 PAGE 32 OF 37 EXAMINED EVERY FACTS OF THE CASE AND GIVEN A DETAILED FINDING AND HAS SPECIFICALLY DEALT WITH EACH OF THE 37 PERSONS AND AMOUNT OF LOAN ADVANCED BY THEM AND DETAILS OF EVIDENCES FILED ALONG WITH CONTENTIONS OF THE ASSESSEE. LD. A.R. OF T HE ASSESSEE VEHEMENTLY ARGUED THAT ALL THE THREE INGREDIENTS OF SECTION 68 I.E. IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS HAVE BEEN WELL ESTABLISHED IN THE INSTANT CASE SINCE VOTER ID COPY ALONG WITH PAN CARD ESTABLISHES IDENTITY OF THE PE RSON, AFFIDAVIT HAS BEEN PROVIDE D FOR DECLARING OF GIVING LOAN OUT OF OWN INCOME AND EVEN LD. CIT(A) HAS RECORDED IN HIS ORDER THAT BANK STATEMENT FILED WITH THE DEPARTMENT ESTABLISHES THAT LOAN IS GIVEN OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN B ANK. IT IS FURTHER ESTABLISHED REGARDING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION SINCE BANK STATEMENT FILED SHOWS THAT BANK DRAFTS WERE ROUTED THROUGH BANK ACCOUNTS OF THE LENDERS. THESE EVIDENCES PROVE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. LD. A.R. OF THE ASSESSEE PLACED RELIANCE ON THE DECISION S OF HON'BLE PATNA HIGH COURT IN THE CASE OF SAROGI CREDIT CORPORATION VS. CIT, 103 ITR 344 (PATNA) AND HON'BLE SUPREME COURT IN THE CASE OF MEHTA PAREKH AND CO. VS CIT, 30 ITR 18 1 (SC) . LD. A.R. OF THE ASSESSEE ON THE BASIS OF HIS ARGUMENTS PRAYED THAT RELIEF GRANTED BY THE LD. CIT(A) SHOULD BE SUSTAINED. 8 . WE HAVE PERUSED THE CASE RECORD AND HEARD THE RIVAL CONTENTIONS. IN THIS CASE PERTINENT QUESTION WITH REGARD TO INTERPRETATIO N OF SECTION 68 IS TO BE CONSIDERED BUT THOSE HAVE TO BE CONSIDERED IN THE LIGHT O F FACTS AND CIRCUMSTANCES IN THIS CASE. IT IS THE CASE OF THE REVENUE THAT INGREDIENTS REQUIRED UNDER SECTION 68 OF THE ACT I.E. IDENTITY, CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTION HAVE NOT BEEN PROVED SO FAR AS ASSESSEE IS CONCERNED AND EVEN THE LD. D.R. HAS RAISED OBJECTION REGARDING CREDITWORTHINESS IN EACH OF THE PERSON WHO HA S ADVANCED LOAN. FACTS AND CIRCUMSTANCES WHEN ITA NO.170/LKW/2017 PAGE 33 OF 37 ANALYSED , IT COMES OUT FROM RECORD ITSEL F, ESPECIALLY IN THE ORDER OF THE LD. CIT(A) THAT THERE ARE 37 PERSONS FROM WHOM LOANS WERE TAKEN BY THE ASSESSEE. REGARDING IDENTITY OF ALL THESE PERSONS , VOTER ID CARD AND ALSO IN SOME CASES PAN CARD HAVE BEEN FILED ON RECORD. THE LD. CIT(A) HAS EXAMIN ED EACH OF THE 37 PERSONS AND EVIDENCES FILED WITH REGARD TO THEM AND HAS FO UND OUT THAT ENTIRE TRANSACTIONS WERE DONE THROUGH BANK DRAFTS RO U TED THROUGH BANK ACCOUNTS OF THE LENDERS AND THE BANK STATEMENTS WERE FILED BEFORE THE REVENUE. THESE EVIDENCES PROVE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. IN THE CASE OF SAROGI CREDIT CORPORATION VS. CIT (SUPRA) , IT HAS BEEN HELD THAT IT IS NOT FOR THE ASSESSEE TO EXPLAIN FURTHER AS TO HOW OR IN WHAT CIRCUMSTANCES THE DEPOSITOR OBTAINED THE MONEY, OR HO W HE CAME TO MAKE AN ADVANCE OF THE MONEY AS A LOAN TO THE ASSESSEE; THAT ONCE SUCH IDENTITY I S ESTABLISHED AND THE CREDITORS HAVE PLEDGED ON OATH THAT THEY HAVE ADVANCED THE AMOUNTS IN QUESTION TO THE ASSESSEE, THE BURDEN IMMEDIATELY SHIFTS ON TO THE D EPA RTMENT TO SHOW AS TO WHY THE ASSESSEE'S CASE CANNOT BE ACCEPTED AND WHY SUCH DEPOSIT TO BE ASSESSED AS THE INCOME FROM A SUPPRESSED SOURCE. 9 . IN THE INSTANT CASE OF THE PERSONS , WHO HAVE ADVANCED LOAN HAVE FILED AFFIDAVITS AFFIRMING THAT THEY HAVE GIVEN LOAN TO THE ASSESSEE. THE ASSESSING OFFICER HAS NOT MADE ANY ADVERSE COMMENT ON THESE AFFIDAVITS FILED. 10 . HON'BLE APEX COURT I N THE CASE OF MEHTA PAREKH AND CO. VS CIT 30 ITR 181 (SC), IT WAS HELD THAT THE CONTENTS OF THE AFFIDAVIT CANNOT BE DISBELIEVED WITHO UT REJECTING THE SAME. P ERSONS WHO HAVE GIVEN THE AFFIDAVITS WERE NOT CROSS - EXAMINED, I N SUCH CIRCUMSTANCES IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE THE CORRECTNESS OF THE CASH BOOK ENTRIES OR THE STATEMENTS MADE IN THE AFFIDAVITS. THE APEX COURT FURTH ER OPINED THAT IF THERE IS NO MATERIAL WHATSOEVER ON RECORD FOR ITA NO.170/LKW/2017 PAGE 34 OF 37 DOUBTING THE VERACITY OF THE STATEMENTS MADE IN THE AFFIDAVITS AND IF THE DEPONENTS HAVE ALSO NOT BEEN SUBJECTED TO CROSS - EXAMINATION FOR BRINGING OUT THE VALIDITY OF THEIR STATEMENTS, THEN TH E TRIBUNAL WOULD NOT BE JUSTIFIED IN DOUBTING THE CORRECTNESS OF THE STATEMENT MADE BY THE DEPONENTS IN THE AFFIDAVITS. 11 . AS FACTS ON RECORD IN PARA 5 OF THE ASSESSING OFFICERS ORDER, ASSESSEE PRODUCED LENDERS FOR EXAMINATION BUT STATEMENTS OF ONLY SIX PE RSONS WERE RECORDED. ASSESSING OFFICER WITHOUT CONDUCTING ADEQUATE ENQUIRY IN THE FORM OF ISSUING SUMMONS OR OTHER VERIFICATION CANNOT DISBELIEVE THE CONTENTS IN THE AFFIDAVIT. FURTHERMORE , WE HAVE EXAMINED FROM THE FACTS ON RECORD AS APPEARING IN THE OR DER OF LD. CIT(A) T HAT BANK STATEMENTS ESTABLISH ES LOAN WAS GIVEN OUT OF OWN SOURCE, SINCE CASH WAS NOT DEPOSITED IN THE BANK. IN PARA 5(6) OF THE ORDER OF THE LD. CIT(A) , IT IS EVIDENT THAT ASSESSEE ALSO FILED COPIES OF BANK STATEMENTS TO SHOW THAT BANK DRAFTS WERE ROUTED THROUGH BANK ACCOUNTS OF THE LENDERS. THESE EVIDENCES PROVE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION, AS WE HAVE ALREADY EXAMINED IDENTITY OF EACH OF THE PERSON THROUGH VOTER ID CARD AND PAN CARD WAS ALSO SUBMITTED BEFORE THE REVENUE. IN ITS ENTIRETY OF THE FACTS AND CIRCUMSTANCES, AS EXAMINED AND RECORDS AS COMING OUT FROM THE ORDER OF THE LD. CIT(A), ALL THE INGREDIENTS OF SECTION 68 IS , THEREFORE , SATISFIED. THE LD. D.R. COULD NOT CONTRAVENT ANY OF THE FINDINGS OF THE LD. CIT(A) NOR COULD PLACE ANY CASE LAW OR FACTS IN CONTRA TO SUPPORT THE CASE OF THE REVENUE. IN SUCH CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE REASONED ORDER OF THE LD. CIT(A) AND THE RELIEF PROVIDED BY THE LD. CIT(A) IS , THEREFORE , SU STAINED. THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 12 . NEXT GROUND RELATES TO THE DELETION OF ADDITION OF RS. 4,77,703/ - ON ACCOUNT OF VARIOUS OTHER EXPENSES. ITA NO.170/LKW/2017 PAGE 35 OF 37 13 . ASSESSEE HAS FILED DETAILED WRITTEN SUBMISSIONS BEFORE THE LD. CIT(A) WITH REGARD TO THIS GR OUND AND RELEVANT PORTION IS AS UNDER: - WE WOULD LIKE TO REITERATE THAT THE ASSESSEE WORKS AS A CONTRACTOR FOR VARIOUS ENTITIES IN REMOTE PLACES WHERE BANKING FACILITIES ARE GENERALLY NOT AVAILABLE. BY NATURE THE WORK OF A CONTRACTOR REQUIRES VERY IMPROMP TU EXPENSES ON SITE. MOST OF THESE EXPENSES ARE MET AT THE SITE THROUGH IMPREST SO MAINTAINED THERE. THE STAFF POSTED AT VERY FAR FLUNG PLACES IS NOT CONVERSANT WITH THE ACCOUNTING PRINCIPLES AND HENCE DOES NOT STRICTLY FOLLOW THE MAINTENANCE OF THE RECORD S. NEEDLESS TO SAY THOUGH THE ASSESSEE ENSURES THE MAINTENANCE OF AT LEAST AS MANY DOCUMENTARY EVIDENCE AS POSSIBLE AND THE SAME WERE PRODUCED BEFORE THE AO DURING THE COURSE OF OUR ASSESSMENT PROCEEDINGS. THE ASSESSEE IS A COMPANY AND IS MANDATED UNDER TH E PROVISIONS OF COMPANIES ACT, 2013 TO MAINTAIN REGULAR BOOKS OF ACCOUNTS WHICH ARE TO BE AUDITED BY A CHARTERED ACCOUNTANT. ALL THE RELEVANT RECORDS WERE PRODUCED BEFORE THE AO TO ESTABLISH THE BONAFIDE NATURE OF THESE EXPENSES. HOWEVER, THE AO HAS CHOSEN TO DISALLOW 10% OF THESE EXPENSES ON AN ADHOC BASIS WITHOUT INFORMING ANY REASON OR ASSIGNING EXACT QUANTUM. FURTHER, ALL THESE EXPENSES HAVE BEEN ALLOWED FULLY IN THE PRECEDING ASSESSMENT YEARS WITHOUT ANY ADHOC ADDITIONS. CAR AND TELEPHONE PERSONAL USE CANNOT BE THERE SINCE THE ASSESSEE IS A COMPANY. 14 . THE LD. CIT(A), AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, ASSESSMENT ORDER AND THE SUBMISSIONS OF THE ASSESSEE, HELD THAT NOTH ING SPECIFIC HAS BEEN MENTIONED BY THE ASSESSING OFFICER WITH R EGARD TO MISSING VOUCHERS OR EXPENSES NOT FOUND TO BE VERIFIABLE. ASSESSING OFFICER HAS NOT POINTED OUT ANY S PECIFIC DEFECTS IN THE BOOKS/RECORDS. IF THE ASSESSING OFFICER IS NOT CONVINCED WITH A PARTICULAR ITA NO.170/LKW/2017 PAGE 36 OF 37 NATURE OF EXPENSES, HE COULD HAVE MADE NECESSARY VERIFICATION BEFORE MAKING THE DISALLOWANCE, BUT THE ASSESSING OFFICER HAS DISALLOWED THIS EXPENSE ON AD HOC BASIS, WHICH IS NOT PERMISSIBLE UNDER THE LAW. MOREOVER THE BOOKS OF ACC OUNTS HAVE BEEN DULY AUDITED. T HE DETAILS WERE SUBMITTED BEFORE THE ASSESS ING OFFICER. THE ASSESSING OFFICER HAS NOT INVOKED SECTION 145(3) OF THE ACT AND HE HAS NOT REJECTED THE BOOKS OF ACCOUNT. RELIANCE PLACED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. WOODWARD GOVERNOR PVT. LTD., 312 ITR 254. FURTHE R THERE IS NO PERSONAL USE OF ASSETS LIKE CAR, ETC. IN THE CASE OF COMPANY , AS HELD BY GUJRAT HIGH COURT IN THE CASE OF SAYAJI IRON & ENGG. CO. VS. CIT, 172 CTR 339. 15 . WE HAVE PERUSED THE CASE RECORD AND HEARD THE RIVAL CONTENTIONS AND ANALYSED THE FACTS OF THE CASE AND WE FIND THAT CASE RECORDS SPELLS OUT THAT THESE ADDITIONS MADE BY THE ASSESSING OFFICER DOES NOT HAVE ANY BASIS OR REASONING BEHIND SUCH AD DITIONS . LD. CIT(A) HAS OBSERVED THAT ASSESSING OFFICER WAS NOT ABLE TO SHOW ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE NOR HE HAS RESORTED TO SECTION 145(3) OF THE ACT I.E. REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE; MEANING THEREBY THAT THE ASSESSING OFFICER WAS SATISFIED WITH THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN THE ABSENCE OF ANY SPECIFIC ENQUIRY AND VERIFICATION, THESE DISALLOWANCES MADE CERTAINLY ACQUIRES THE CHARACTER OF BEING AD - HOC IN NATURE WHICH IS NOT PERMISSIBLE WITHIN THE PURVIEW OF TAXATION LAWS. THE ASSESSING OFFICER IS THE FIRST QUASI JUDICIAL AUTHORITY TRYING TO SPEARHEAD BALANCE BETWEEN THE ASSESSEE AND THE REVENUE SO THAT NEITHER ASSESSEES RIGHTS ARE JEOPARDIZED NOR REVENUE SHOULD SUFFER ANY LOSS. IN ORDER TO UNDERTAKE SUCH EXERCISE , THE ORDER PASSED BY THE ASSESSING OFFICER SHOULD ALWAYS BE BACKED BY REASON. IN THE INSTANT CASE , WHATEVER DISALLOWANCES ARE MADE BY THE ASSESSING OFFICER IN THE ABSENCE OF REASONING, WE AGREE WITH THE FINDINGS OF THE LD. ITA NO.170/LKW/2017 PAGE 37 OF 37 CIT(A) IN DELETING THE SUCH AD - HOC DISALLOWANCES MADE BY THE ASSESSING OFFICER. THE RELIEF PROVIDED BY THE LD . CIT(A) ON THIS GROUND ALSO IS SUSTAINED. THIS GROUND OF APPEAL BY THE REVENUE IS DISMISSED. 16 . NEXT GROUND IS GENERAL IN NATURE WHICH REQUIRES NO ADJUDICATION. 17 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 / 10 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST OCTO BER , 201 8 JJ: 2510 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR