Shri Vikas Jain, Agra V. I.T.O., Ward-4(4), Agra

ITA 174/AGR/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0782 (ITAT-AGRA)
• Duration Of Justice: 4 year(s) 10 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Source of fund
• Section: 133(6); 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND D R . MITHA LAL MEENA, ACCOUNTANT MEMBER I.T.A NO. 174 /AGRA/201 4 (ASSESSMENT YEAR - 200 9 - 10 ) SHRI VIKAS JAIN 17, GOPAL KUNJ, AGRA. PAN NO. AARPJ3218L (ASSESSEE) V S .. ITO, WARD 4, ( 4 ), AGR A . (R EVENUE ) A SSESSEE BY SHRI ANURAG SINHA, ADV. REVENUE BY SHRI WASEEM ARSHAD, SR. DR. ORDER PER , A. D. JAIN, JUDICIAL MEMBER: THIS IS A SSESSEES APPEAL FOR ASSESSMENT YEAR 200 9 - 10 , TAKING THE FOLLOWING GROUNDS: 1. BECAUSE, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE THE AUTHORITIES BELOW FALLEN IN ERROR IN MAKING AS WELL AS CONFIRMING ADDITION OF RS.8,60,000/ - BY ARBITRARILY TREATING THE GENUINE CREDITS AS UNEXPLAINED CASH CREDITS DATE OF HEARING 0 3 . 0 1 .201 7 DATE OF PRONOUNCEMENT 13 .0 2 .201 7 I.T.A NO. 174 /AGRA/2014 2 PURELY ON CONSIDERATI ON OF SUSPICION AND UNFOUNDED PRESUMPTIONS. 2. BECAUSE, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLANT HAS SUFFICIENTLY DISCHARGED THE BURDEN WHICH LAY UPON HIM IN TERMS OF ALL THREE CONDITIONS AS ENVISAGED UNDER SECTION 68 OF THE I .T. ACT. 3. BECAUSE, CREDITS BEING GENUINE, INTEREST OF RS.1,27,000/ - HAVING BEEN PAID THROUGH ACCOUNT PAYEES CHEQUES, NO VALID CASE CAN BE MADE FOR DISALLOWANCE OF SUCH INTEREST. 4. BECAUSE NO IOTA OF EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AUTHORITIE S BELOW TO SUBSTANTIATE THE ALLEGATION OF THE ASSESSING OFFICER MAKING THE ADDITION THAT LOAN REPRESENTS ASSESS EE S OWN UNACCOUNTED MONEY ALLEGED TO BE CONVERTED INTO WHITE UNDER THE GARB OF COLOURABLE DEVICE I.E. UNSECURED LOAN. 5. BECAUSE WHILE CONFIRMING THE ADDITION THE LD. CIT(A) MADE VARIOUS OBSERVATIONS/ CONCLUSIONS WHICH ARE CONTRARY TO THE FACTS AVAILABLE ON RECORDS AND HAS NO CONNECTION WITH THE CASE UNDER CONSIDERATION. 2. T HE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSI NESS OF REAL ESTATE. HE ALSO DERIVE S INCOME FROM COMMISSION, FROM LAND ACQUISITION CLAIM S . FOR THE YEAR UNDER CONSIDERATION, HE FILED RETURN SHOWING LOSS OF RS.10,16,420/ - , ALONGWITH BALANCE SHEET. THE ASSESSEE SHOWED AGGREGATE LOANS OF RS. 1,22,71498/ - AS FOLLOWS: I.T.A NO. 174 /AGRA/2014 3 UNSECURED LOANS AS ON 31 ST MARCH 2009. SL. NO. PARTICULARS AMOUNT 1. AMIT JAIN 4,00,000.00 2. ANMOL TRUST 1,55,000.00 3. AVDESH SHARMA 6,48,814.00 4. BASANT TRUST 1 ,20,000.00 5. BHAGWATI MATA TRUST 3,25,000.00 6. BHAGWATI TRUST 2,60,000.00 7. BHARAT TRUST 1,545.00 8. GUNJAN MITTAL 3,090.00 9. NAVEEN CHAND PATHAK 6,52,957.00 10. QUALITY ENGINEER WORKS 2,24,000.00 11. RAJESH JAIN HUF 1,68,000.00 12. RAMA RANI 1,545.00 13. RUTUM BANSAL 2,80,000.00 14. SATYA NARAIN JAIN 89,29,407.00 15. USHA RANI JAIN 7,14,500.00 1,22,71,498.00 3. OUT OF THE ABOVE LOANS, WHILE PASSING THE ASSESSMENT ORDER DATED 29.12.2011, THE AO MADE ADDITIONS IN RESPECT OF THE FOLLOWING LOANS: I) ANMOL TRUST RS. 1,55,000/ - II) BASANT TRUST RS. 1 ,20,000/ - III) BHAGWATI TRUST RS. 3,25,000/ - IV) BHAGWATI MATA TRUST RS.2,60,000/ - TOTAL RS. 0 8 ,60,000 / - . I.T.A NO. 174 /AGRA/2014 4 4. CONSEQUENTIAL DISALLOWANCE OF INTEREST PAID AMOUNTING TO RS.1,27,000/ - WAS ALSO MADE. THE LD. CIT(A), BY VIRTUE OF THE IMPUGNED ORDER DATED 27.12.2013, CONFIRMED THE DISALLOWANCE ON BOTH COUNTS. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE L D. CIT(A) HAS ERRED IN CONFIRMING THE ADDITIONS BY ARBITRARILY TREATING THE GENUINE CRE DITS A S UNEXPLAINED CASH CREDITS, ONLY ON THE BASIS OF SUSPICION AND ASSUMPTION AND PRESUMPTION, WHEREAS THE ASSESSEE HAD DULY AND SUFFICIENTLY DISCHARGED HIS ONUS U/S 6 8 OF THE I.T. ACT; THAT THE LD. CIT(A) FAILED TO CONSIDER THAT THOUGH THE AO HAD MADE THE ADDITION BY OBSERVING THAT THE LOAN REPRESENTED THE ASSESSEES OWN UNACCOUNTED MONEY CONVERTED INTO WHITE MONEY UNDER THE GARB OF UNSECURED LOANS, THERE WAS NOTHING O N RECORD TO SUPPORT SUCH A FINDING; THAT ALONGWITH HIS REPLY DATED 30.11.2011 (APB - 8 - 21), THE ASSESSEE HAD ENCLOSED DOCUMENTARY EVIDENCES PROVING ALL THE THREE INGREDIENTS OF SECTION 68 OF THE ACT; THAT AT THE REQUEST OF THE ASSESSEE, THE AO ISSUED SUMMONS TO SHRI GYAN PRAKSH , TRUSTEE IN ALL THE FOUR TRUSTS WHO HAD GIVEN MONEY TO THE ASSESSEE; THAT ON THE DATE FIXED, SHRI GYAN PRAKASH DID NOT APPEAR BEFORE THE AO , SO, THE AO REQUI RED THE ASSESSEE TO PRODUCE HIM, THAT T HE ASSESSEE FILE D REPLY (APB - 22) BEFORE THE AO AND STATED , INTER ALIA, THAT HE HAD MADE H IS BEST EFFORTS AND CONTACT SHRI GYAN PRAKASH, BUT THE ASSESSEE WAS INFORMED THAT HE WAS OUT OF TOWN; THAT THEREAFTER, THE AO ISSUED A NOTICE U/S 133(6) OF THE ACT TO SHRI GYAN PRAKASH ; THAT HOWEVER, THIS NOTICE WAS I.T.A NO. 174 /AGRA/2014 5 RETURNED WITH THE ENDORSEMENT THAT THE CHOWKIDAR FOUND AT THE GIVEN ADDRESS HAD REITERATED THAT SHRI GYAN PRAKASH DID NOT RESIDE THERE AND THAT HE HAD NOT INFORMED OF ANY OTHER ADDRESS; THAT AS PER THE AO, HE MADE INQUIRY FR OM THE BANK, FROM WHERE, HE GATHERED THE INFORMATION THAT SHRI GYAN PRAKASH IS RUNNING MANY TRUSTS AND THE AMOUNT IS TRANSFERRED FROM ONE BANK A/C OF THE TRUST TO ANOTHER AND, THEREAFTER, MONEY IS GIVEN AS LOAN; THAT ACCORDING TO THE AO, THE TRUSTS WERE FI LING RETURNS SHOWING NIL INCOME AND THE AO DEPUTED THE INSPEC TOR OF THE DEPARTMENT, WHO IS SAID TO HAVE CONDUCTED FULL INQUIRY, IN WHICH, IT WAS FOUND THAT THOUGH THE PROPERTY BELONGS TO SHRI GYAN PRAKASH, HE DOES NOT VISIT THE PROPERTY VERY OFTEN AND AC CORDING TO THE INSPECTOR, ON THE ADDRESS MENTIONED, NO SIGN BOARD OR ACTIVITY OF THE TRUST ON THE ADDRESS GIVEN IN THE CONFIRMATION FILED BY THE ASSESSEE, WAS FOUND; THAT IT WAS ON THE BASIS OF THE ABOVE, THAT THE AO CONCLUDED THAT THE ASSESSEE HAD TRIED T O CONVERT HIS UNACCOUNTED MONEY INTO LOANS; THAT BEFORE THE LD. CIT(A), THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS (APB 23 - 27) DATED 11.10.2013 ; THAT THE LD. CIT(A) FORWARDED THE SAID WRITTEN SUBMISSIONS TO THE AO VIDE ORDER (APB 47 - 48) DATED 17.10.2013, R EQUIRING THE AO TO ASCERTAIN THE DETAILS OF FUND S OF THE TRUSTS AND THE MONEY AVAILABLE IN THE CAPITAL ACCOUNTS OF THE BENEFICIARIES OF THE TRUSTS; THAT THE AO FURNISHED REMAND REPORT (APB 49 - 52) DATED 12.11.2013 , TO WHICH, THE ASSESSEE FURNISHED REJOINDER ( APB 50 - 51) DATED 11.11.2013; THAT IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), ON THE ASKING I.T.A NO. 174 /AGRA/2014 6 OF THE LD. CIT(A), THE ASSESSEE PRODUCE D SHRI GYAN PRAKASH; THAT SHRI GYAN PRAKASH WAS EXAMINED BY THE LD. CIT(A); THAT THE LD. CIT(A) CONFIRMED THE ADDIT IONS MADE BY THE AO; THAT THE LD. CIT(A) HELD THAT HE DID NOT AGREE WITH THE ASSESSEES SUBMISSION THAT TO THE GENUINENESS OF THE LOANS, THE CASE IS TO BE EXAMINED IN THE LIGHT OF THE PROVISIONS OF SECTION 68 OF THE ACT; THAT EVEN AFTER HAVING ACCEPTED THA T THE LOANS WERE RECEIVED FROM THE TRUSTS AND SHRI GYAN PRAKASH WAS THE TRUSTEE IN ALL THE FOUR TRUSTS UNDER CONSIDERATION, THE LD. CIT(A) MISDIRECTED HIMSELF IN EXAMINING THE VALIDITY OF THE TRUSTS IN THE CASE OF THE ASSESSEE, WHILE EXAMINING THE ISSUE OF CASH CREDITS; THAT THE LD. CIT(A) OBSERVED THAT IF THE TRUSTS ARE NOT GENUINE, IT WOULD BE TREATED AS A COLOURABLE DEVICE CREATED FOR GIVING ENTRIES; THAT THE LD. CIT(A) OBSERVED THAT THOUGH SHRI GYAN PRAKASH HAD APPEARED AND HAD FILED XEROX COPIES OF TRUST DEED S , HE COULD NOT ESTABLISH THE IDENTITY OF THE SETTLER S OF THE TRUSTS; THAT THE LD. CIT(A) OBSERVED THAT THOUGH SHRI GYAN PRAKASH STATED THAT TH E SETTLER S WERE HIS FRIENDS, NO RELATIONSHIP COULD BE ESTABLISHED AND IT WAS ALSO NOT EXPLAINED AS TO W HERE THE SETTLER S WERE PRESENTLY RESIDING; THAT THE LD. CIT(A) OBSERVED THAT SHRI GYAN PRAKASH SUB MITTED THAT HE WOULD PRODUCE THE S ETTLER S, BUT HE COULD NOT DO SO AND NO TRUST ACTIVITY WAS FOUND AT THE ADDRESSES OF THE TRUSTS, NOR WERE THE TRUSTS FOUND RE GISTERED; THAT THE LD. CIT(A) OBSERVED THAT THOUGH SHRI GYAN PRAKASH EXPLAINED THAT THE FUNDS OF THE TRUSTS HAD BEEN ACCUMULATED ON ACCOUNT OF RECEIVING GIFTS/DONATIONS FROM VARIOUS PERSONS, HE I.T.A NO. 174 /AGRA/2014 7 COULD NOT FURNISH THE NAMES OF SUCH DONORS; THAT ON THE BASIS OF THE ABOVE OBSERVATIONS, THE LD. CIT(A) CONCLUDED THAT ALL THE FOUR TRUSTS WHO HAD ADVANCED THE LOANS TO THE ASSESSEE, EXISTED ONLY ON PAPER AND WERE NOT DOING ANY GENUINE ACTIVITY; THAT THE FINDINGS OF THE LD. CIT(A) ARE TOTALLY AGAINST THE FACTS PROVED ON RECORD; THAT THE ASSESSEE HAD RECEIVED ALL THE LOANS THROUGH ACCOUNT PAYEE CHEQUES; THAT ALL THE FOUR TRUSTS , WHO ADVANCED THE LOANS TO THE ASSESSEE , ARE ASSESSED TO TAX AT AGRA; THAT NO CASH WAS DEPOSITED PRIOR TO ADVANCING THE LOANS TO THE ASSESSEE; THAT ALL THE FOUR TRUSTS HAD CONFIRMED THE FACTUM OF HAVING GIVEN LOANS TO THE ASSESSEE; THAT THIS CONFIRMATION WAS MADE BY FURNISHING REPLY BEFORE THE AO; THAT THE LOANS WERE REAFFIRMED IN THE PERSONAL DEPOSIT ION OF THE TRUSTEE , SHRI GYAN PRAKASH, BEFORE THE LD. CIT(A); THAT ALL THE LOANS WERE SUBJECTED TO INTEREST, WHICH WAS AL SO PAID IN ADVANCE TO THE LENDER TRUSTS, AS IS ALSO VERIFIABLE FROM THEIR BANK ACCOUNT S , DULY SHOWING THE REMITTANCE; THAT ALL THE TRUSTS WHICH ARE INCOME TAX ASSESSEES, HAVE BEEN F ILING RETURN S OF INCOME ON AN YEAR TO YEAR BASIS; THAT NO ACTION WHATSOEVER WAS EITHER CONTEMPLATED , OR TAKEN IN THE HANDS OF ANY OF THE TRUSTS , SO AS TO HOLD THAT ANY OF THE TRUSTS WAS EITHER NON GENUINE, OR BOGUS; THAT THE TRUSTS ARE OLD INCOME TAX ASSES SEES AND THEIR TRUST DEEDS ARE ON RECORD OF THE LD. CIT(A); THAT AS PER THIS RECORD, M/S ANMOL TRUST WAS INCORPORATED ON 15.06.1991, M/S BASANT TRUST WAS INCORPORATED ON 5.07.2004 , M/S BHAGWATI TRUST CAME IN TO EXISTENCE ON 07.05.2004 AND THE DATE OF INCORP ORATION OF M/S BHAGWATI MATA TRUST I.T.A NO. 174 /AGRA/2014 8 WAS 10.06.1991 ; THAT THE AO OF THE TRUSTS ACCEPTED THE RETURNS FILED BY ALL THESE TRUSTS AND, THEREFORE, THE OBSERVATION OF THE LD. CIT(A) IN THE ASSESSEES CASE , THAT ALL THE TRUSTS ARE BOGUS TRUSTS, IS NOT IN ORDER, WITHOUT DIRECTING REOPENING OF THE ASSESSMENTS OF ALL THE TRUSTS; THAT THE LD. CIT(A) HAS FURTHER ERRED IN OBSERVING AGAINST THE ASSESSEE FOR THE REASON THAT THE SETTLERS OF THE TRUSTS WERE NOT IDENTI FIABLE; THAT THE LD. CIT(A) ALSO FAILED TO TAKE INTO CONSIDERATION THE FACT THAT THOUGH HE HAD DIRECTED VERIFICATION OF THE RETURN OF INCOME AND CAPITAL ACCOUNT OF THE BENEFICIARIES OF ALL TH E TRUSTS, FROM THE CONCERNED AO S, NO SUCH EXERCISE WAS CARRIED OU T BY THE AO, DESPITE THE AO OF THE TRUSTS HAVING HIS OFFICE IN THE SAME BUILDING AS THAT OF THE AO OF THE ASSESSEE; AND THAT IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE ORDER UNDER APPEAL IS LIABLE TO BE REVERSED AND THE SAME BE ORDERED TO BE REVERSED WH ILE ALLOWING THE APPEAL OF THE ASSESSEE. 6. ON THE OTHER HAND, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT NONE OF THE REQUIREMENT S OF SECTION 68 OF THE ACT HAS BEEN PROVED BY THE ASSESSEE AND, THEREFORE, THE A SSESSEE HAS UTTERLY FAILED TO DISCHARGE H IS ONUS WITH REGARD THERETO, AS CORRECTLY HELD BY THE LD. CIT(A); THAT ALL THE LOANS WERE SHOWN TO HAVE BEEN TAKEN FROM M/S ANMOL TRUST, M/S BASANT TRUST, M/S BHAGWATI TRUST AND M/S BHAGWATI MATA TRUST; THAT THE GEN UINENESS OF NONE OF THE TRUSTS COULD BE ESTABLISHED BY THE ASSESSEE AND, THEREFORE, THE LD. CIT(A) RIGHTLY HELD THAT THE ASSESSEE HAS REMAINED UNABLE TO ESTABLISH THE IDENTITY OF HIS CREDITORS; I.T.A NO. 174 /AGRA/2014 9 THAT NOT EVEN ONE OF THE TRUST S WAS FOUND TO BE IN EXISTENCE, MUCH LESS DOING ANY GENUINE ACTIVITY AND SO, NO ERROR CAN BE FOUND WITH THE CONCLUSION OF THE LD. CIT(A) TO THE EFFECT THAT SHRI GYAN PRAKASH COULD ONLY BE HELD TO BE AN ENTRY PROVIDER, USING THE NAMES OF THE TRUSTS, WHICH WERE ONLY PAPER TRUSTS; THAT FURT HER, SINCE SHRI GYAN PRAKASH COULD NOT GIVE THE DETAILS OF THE GIFTS/DONATIONS CLAIMED RECEIVED BY ANY OF THE TRUSTS, THE SOURCE OF THE FUNDS DID NOT STAND EXPLAINED AND, THEREFORE, THE CAPACITY OF THE CREDITORS TO ADVANCE THE LOANS IN QUESTION TO THE ASSE SSEE, DID NOT STAND PROVE D ; THAT IN THIS REGARD, THE LD. CIT(A) HAS RIGHTLY RELIED ON CIT VS. BIJU PATNAIK, 160 ITR 674 (SC), ON PARITY OF FACTS; THAT THE ASSESSEE HAS NOT BEEN ABLE TO EFFECTIVELY RE BUT THE FINDINGS OF THE LD. CIT(A) THAT ALL THE FOUR TR USTS WERE SHOWING NIL INCOME AND THE SHARE INCOME WAS SHOWN IN THE NAME S OF BENEFICIARIES , WHICH NAMES WERE FOUND TO BE ONLY FICTITIOUS NAMES AND THE NUMBER OF SUCH BENEFICIARIES WAS SHOWN IN SUCH A MANNER THAT THE SHARE OF INCOME IN THE HANDS OF EACH BE NEFICIARY CAME TO BELOW THE TAX ABLE LIMIT OF INCOME, DISPROVING THE CREDITWORTHINESS OF THE CREDITOR TRUSTS; THAT SINCE NO GENUINE EXISTENCE OF ANY OF THE FOUR TRUSTS WAS EITHER FOUND OR ESTABLISHED, THE GENUINENESS OF THE LOAN TRANSACTIONS ALSO DID NOT ST AND ESTABLISHED; AND THAT THEREFORE, THE ORDER OF THE LD. CIT(A) , BEING A WELL REASONED ELABORATE ORDER, IT REQUIRES NO INTERFERENCE AND THE APPEAL OF THE ASSESSEE, HAVING NO MERIT, IS LIABLE TO BE DISMISSED. I.T.A NO. 174 /AGRA/2014 10 7. WE HAVE HEARD THE PARTIES AND HAVE PERUS ED THE MATERIAL ON RECORD . UNDER SECTION 68 OF THE ACT, THE THREE INGREDIENTS REQUIRED TO BE PROVED ARE THE IDENTITY OF THE CREDITOR, THE CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIONS INVOLVED. UNLESS ALL THESE THREE REQUIREMENTS ARE FULFI LLED, ADDITION IS LIABLE TO BE MADE U/S 68. 8. IN THE PRESENT CASE, SO FAR AS REGARDS THE IDENTITY OF THE CREDITORS, THE LD. CIT(A) HAS HELD ALL THE TRUSTS TO BE INGENUINE AND BOGUS. IT REMAINS UNDISPUTED THAT ALL THE LOANS WERE RECEIVED FROM THE TRUSTS. A LL THE TRUSTS ARE EXISTING TRUSTS, WHICH WERE INCORPORATED LONG AGO. ALL OF THEM ARE ASSESSED TO INCOME TAX AT AGRA. THE LOANS WERE TRANSACTED THROUGH ACCOUNT PAYEE CHEQUES. THERE WAS NO DEPOSIT OF CASH BEFORE THE ADVANCING OF THE LOANS BY ANY OF THE TRUST S TO THE ASSESSEE. ALL THE FOUR TRUSTS HAD CONFIRMED HAVING GIVEN THE LOANS TO THE ASSESSEE. THIS WAS SO STATED BEFORE THE AO. EVEN BEFORE THE LD. CIT(A), SHRI GYAN PRAKASH, WHO IS A TRUSTEE IN ALL OF THESE TRUSTS, HAD CONFIRMED THE TRANSACTIONS. EVEN THE INTEREST ON ALL THESE LOANS WAS PAID IN ADVANCE TO THE TRUSTS AND THE IR BANK ACCOUNT S BEAR WITNESS TO THIS. THEN, THOUGH THE LD. CIT(A) DIRECTED THE AO TO CARRY OUT INQUIRY AND VERIFY THE RETURNS OF INCOME AND CAPITAL ACCOUNT S OF THE BENEFICIARIES OF THE T RUSTS, THE AO DID NOT ATTEMPT ANY SUCH EXERCISE . THE REMAND REPORT FILED BY THE AO DOES NOT STATE ANYTHING TO THE CO NTRARY. REMARKABLY, IT GO ES UNDISPUTED THAT ALL THESE TRUSTS HAVE BEEN FIL ING TH EIR RETURNS OF INCOME WITH THEIR RESPECTIVE AOS AND NO ACTI ON WAS I.T.A NO. 174 /AGRA/2014 11 CONTEMPLATED, MUCH LESS TAKEN, IN THE HANDS OF ANY OF THESE TRUSTS. ON THE OTHER HAND, IT WAS IN THE CASE OF THE ASSESSEE, THAT I S A THIRD PARTY SO FAR AS REGARDS THE ASSESSMENT OF THESE TRUSTS, THAT THE LD. CIT(A) CHOSE TO HOLD ALL THESE TRUSTS TO BE NON - GENUINE, S HAM AND BOGUS. THIS, EVIDENTLY, IS AGAINST THE LAW INASMUCH AS THE VERY EXISTENCE OF A TRUST CAN BE CHALLENGED ONLY IN ITS OWN CASE AND NOT IN THE CASE OF ANY OTHER ASSESSEE, PARTICULARLY WHEN THE ASSESSMENTS OF THE TRUSTS CONTINUE, IRRESPECTIVE . 9. COMING TO THE ASPECT OF THE CREDITWORTHINESS OF THE DEPOSITORS , OTHER THAN THE EXPLANATIONS OFFERED BY THE ASSESSEE BEFORE BOTH THE TAXING AUTHORITIES, IN HIS REJOINDER (APB - 53 - 54) TO THE AOS REMAND REPORT, THE ASSESSEE SUBMITTED THAT BE SIDES THE FACTUM OF ALL THE TRUSTS BEING ASSESSED TO INCOME TAX AT AGRA AND FILING RETURNS OF INCOME, THEIR BANK ACCOUNTS WERE FURNISH ED BEFORE THE AO, PROVING AVAILABILITY OF ENOUGH FUNDS TO ADVANCE T HE LOANS TO THE ASSESSEE. THESE BANK STATEMENTS WERE NO WHERE CALLED IN QUESTION. COPIES OF THESE BANK ACCOUNTS ARE AT PAPER BOOK PAGES 55 TO 58, RESPECTIVELY , AND A PERUSAL THEREOF EVINCES THAT THE CONTENTION OF THE ASSESSEE IN THIS REGARD IS CORRECT. AS STATED, THE FUNDS PRIOR TO THE ADVANCE, HAD COME FROM IN TEREST ON DEPOSITS. NO PART THEREOF HAD BEEN DEPOSITED IN CASH. APROPOS THE OBSERVATION THAT THE INCOME SHOWN BY THE TRUSTS WAS NIL, IT WAS INFORMED THAT THE TRUSTS WERE ENJOYING STATUS AS PRIVATE FAMILY TRUSTS, THE INCOME OF WHICH WAS ASSESSABLE AS PER THE PROVISIONS OF SECTIONS 161/166 OF THE ACT AND THAT I.T.A NO. 174 /AGRA/2014 12 THE INCOME WAS EX EMPT FROM TAX AND THE INCOME DISTRIBUTED TO THE BENEFICIARIES WAS TAXABLE IN THEIR RESPECTIVE HANDS. BE THAT AS IT MAY, THE REQUIREMENT OF THE ASSESSEE IS IN THIS REGARD IS TO ESTABLIS H THE SOURCE OF HIS INCOME AND NOT THE SOURCES OF INCOME OR AFFAIRS OF HIS CREDITORS. 10. COMING TO THE GENUINENESS OF THE LOANS, AS OBSERVED, ALL THE LOANS HAVE COME TO THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES. MOREOVER, ALL THE LOANS WERE SUBJECTED TO INTEREST. THIS INTEREST WAS PAID IN ADVANCE . F URTHER, IT IS NOT THE FINDING OF EITHER OF THE A UTHORITIES BELOW THAT THERE WAS ANY CASH DEPOSITED BY ANY OF THE CREDITOR TRUSTS IN THEIR RESPECTIVE BANK ACCOUNTS BEFORE ADVANCING THE LOANS TO THE ASSESSEE. EVEN THE CREDITS APPEARING IN THE BANK ACCOUNTS OF THE CREDITORS, HAVE NOT BEEN CHALLENGED. 11. THE LD. CIT(A), IN THIS FACTS, CLEARLY ERRED IN RELY ING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF BIJU PATNAIK (SUPRA). 12. IN CIT VS. META CHEM INDUSTRIES, 245 ITR 160 (MP), IT HAS BEEN HELD THAT ONCE IT STANDS ESTABLISHED THAT THE AMOUNT IN QUESTION WAS INVESTED BY A PARTICULAR PERSON, THE RESPONSIBILITY OF THE ASSESSEE IS OVER AND THE SOURCE OF THE ASSESSEES SOURCE IS NOT REQUIRED TO BE EXPLAINED BY THE ASSESSEE. IF THE DEPOSITOR OWNS THE ENTRY, THE BURDEN OF THE ASSESSEE GETS DISCHARGED. NO DOUBT, IT REMAINS FOR THE AO TO UNDERTAKE FURTHER IN VESTIGATION, BUT THAT CAN BE DONE IN THE CASE OF THE DEPOSITOR. IN THE PRESENT CASE, AS DELIBE RATED UPON HEREINABOVE, THE ASSESSEE HAS ADEQUATELY I.T.A NO. 174 /AGRA/2014 13 DISCHARGED HIS ONUS WITH REGARD TO ALL THE INGREDIENTS OF SECTION 68 OF THE ACT, I.E., THE ASSESSEE HAS BEEN ABLE TO EXPLAIN AND PROVE THE IDENTITY OF HIS DONORS, TH EIR CAPACITY TO ADVANCE THE LOANS AND A LSO THE GENUINENESS OF THE LOAN TRANSACTIONS. THEREFORE, THE BURDEN CAST BY THE PROVISIONS OF SECTION 68 ON THE ASSESSEE GETS LIFTED AND NO ADDITION IN THIS REGARD IS REQUIRED TO BE MADE. 13. NO ADDITION OF EITHER THE LOANS AGGREGATING TO RS.8,60,000/ - , O R THE INTEREST PERTAINING THERETO, TOTALING TO RS.1,27,000/ - , CAN THUS BE MADE UNDER THE LAW. 14. ACCORDINGLY, THE GRIEVANCE OF THE ASSESSEE IS ACCEPTED. BOTH THESE ADDITIONS ARE DELETED. THE ORDER UNDER APPEAL IS REVERSED. 15. IN THE RESULT, THE APPEAL IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON 13 /0 2 / 201 7 . SD/ - SD/ - ( DR . MITHA LAL MEENA) (A.D. JAIN) ACCOUTANT MEMBER JUDICIAL MEMBER DATED: 13 /0 2 /2017 *AKV* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR I.T.A NO. 174 /AGRA/2014 14 DATE 1. DRAFT DICTATED (DNS) 03. 0 1 .201 7 PS 2. DRAFT PLACED BEFORE AUTHOR 06 . 0 1 .201 7 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.