Akriti International Inc., New Delhi V. DCIT, New Delhi

ITA 1741/DEL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53409 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 29-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANNA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Onus to prove; Bogus loan
• Section: 68

Judgement Text

ITA NOS. 292 & 11741/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 292/DEL/2009 A.Y. : 2004-05 A STT. COMMISSIONER OF INCOME TAX, CIRCLE 20(1), ROOM NO. F-308, VIKAS BHAVAN, NEW DELHI VS. M/S AKRITI INTERNATIONAL INC., C/O VINAY SUMAN & CO., 13-B, 3 RD FLOOR, N.S. MARG, DARYA GANJ, NEW DELHI 110 002 (PAN/GIR NO. : AAIFA 0387N) AND ITA NO. 1741/ DEL/2009 A.Y. 2004-05 M/S AKRITI INTERNATIONAL INC., VS. DCIT, CIRCLE 20 (1), C/O RAJIV SAXENA & CO., NEW DELHI (ADVOCATES & SOLICITORS), 318, POCKET-D, MAYUR VIHAR-II, DELHI 110 091 (PAN/GIR NO. : AAIFA 0387N) (APPELLANTS ) (APPELLANTS ) (APPELLANTS ) (APPELLANTS ) (RESPONDENTS ) (RESPONDENTS ) (RESPONDENTS ) (RESPONDENTS ) ASSEESSEE BY : SH. RAJEEV SAXENA, ADVOCATE DEPARTMENT BY : MRS. ANUSHA KHURANNA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA : AM PER SHAMIM YAHYA : AM PER SHAMIM YAHYA : AM PER SHAMIM YAHYA : AM THESE CROSS APPEALS BY THE REVENUE AND THE ASSESSE E EMANATE OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) DATED 18.11.2008 AND PERTAIN TO ASSESSMENT YEAR 2004-05. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- ITA NOS. 292 & 11741/DEL/2009 2 (I) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 68,50,00 0/- AS UNEXPLAINED UNSECURED LOANS OUT OF ADDITIONS MADE OF ` 74,50,000/-. (II) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 45,32,30 8/- AS INTEREST ON UNSECURED LOANS OUT OF DISALLOWANCE OF ` 52,20,493/-. (III) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND ADD ANY OTHER G ROUND OF APPEAL. 3. THE GROUNDS RAISED IN THE ASSESSEES APPEAL READ AS UNDER:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ADDITION OF ` 6,00,000/- RECEIVED AS LOAN FROM GAR G FINVEST PVT. LTD. AND IN DISALLOWING THE INTEREST AMOUNTING TO ` 6,88,185/- PAID TO FOLLOWING PARTIES: - BIC CONSULTANTS PVT. LTD., DELHI ` 42,903/- DIVISION TRADING PVT. LTD., DELHI ` 1,71,581/- GANGA INFIN PVT. LTD., DELHI ` 1,04,596/- GARG FINVEST PVT. LTD.,DELHI ` 2,77,596/- NEW GENERATION FINVEST PVT. LTD. ` 91,912/- ` 6,88,185/- ITA NOS. 292 & 11741/DEL/2009 3 (A) BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE AND IGNORED THAT MAHESH GARG, ONE OF THE DIRECTOR OF THE ABOVESAID COMPANIES, HAS CONFIRMED ABOUT THESE LOANS DURING STATEMENT RECORDED BEFORE THE ASSESSING OFFICER HIMSELF WHICH WAS MUCH AFTER THE STATEMENT RECORDED BEFORE INVESTIGATION WING WHICH WAS RELIED UPON. (B) BECAUSE EACH YEAR IS SEPARATE ASSTT. YEAR AND INFERENCE CANNOT BE DRAWN MERELY BY FOLLOWING REASONS ASSIGNED IN EARLIER YEAR. (C) BECAUSE NO FRESH EFFORT WERE MADE TO CALL UPON THE PERSON DESPITE THIS FACT THAT NO OPPORTUNITY WAS PROVIDED TO CROSS EXAMINE THE PERSONS WHOSE STATEMENT WAS RELIED UPON. (D) BECAUSE BOTH THE LOWER AUTHORITIES HAVE FAILED TO APPRECIATE THAT INTEREST WAS DULY BEEN ACCOUNTED F EE BY THESE COMPANIES AND DECLARED AS INCOME ON WHICH TDS WAS DEDUCTED BY THE APPELLANT. IT IS THEREFORE, PRAYED THAT THE ADDITION/ DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE DELETED. 4. IN THIS CASE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF EXPORT AND TRADING OF PERFUMERY COMPOUND, AROMATIC OILS, OTHER E SSENTIAL OILS AND CUTLERY ITEMS. ASSESSING OFFICER OBSERVED THAT IT HAS COME TO HIS NOTICE THAT ASSESSEE HAS SHOWN LOAN CREDITORS AMOUNT ING TO ` 8,63,84,942/- AS ON 31.3.2004. ASSESSING OFFICER OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESS MENT YEAR 2003- ITA NOS. 292 & 11741/DEL/2009 4 04, AS SOME OF THE LOAN CREDITORS AMOUNTING TO ` 7,3 7,96,894/- REMAINED UNEXPLAINED AND HIS PREDECESSOR AFTER DETA ILED DISCUSSION IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003-04 HAD HELD THESE CREDITORS AS BOGUS LOAN CREDITORS. ASSESSING OFFIC ER FURTHER OBSERVED THAT ON EXAMINING THE DETAILS OF THE LOAN ACCEPTED AND REPAID ANNEXED ALONGWITH THE RETURN OF INCOME, IT WAS REVEALED TH AT THE ASSESSEE HAS ALSO RAISED FOLLOWING NEW LOANS FROM NEW CREDITORS AND ALSO FROM THE OLD CREDITORS DURING THE YEAR UNDER CONSIDERATION. S.NO. NAME OF CREDITOR NEW / OLD CREDITOR AMOUNT OF LOAN 1 CHANGIA STEELS PVT. LTD. OLD 5,00,000 2 GARG FINVEST PVT. LTD. OLD 6,00,000 3 KAILASH NATH CHATURVEDI OLD 1,50,000 4 KUBER CO. SALES PVT. LTD. OLD 3,50,000 5 SUNITA CHATURVEDI OLD 6,00,000 6 TRANSPEN FINANCIAL SERVICES PVT. LTD. OLD 14,00,000 7 JOGINDER SINGH NEW 3,50,000 8 POOJA JAIN (OLD PARTNER) NEW 31,73,627 9 SANJEEV KR. JAIN & CO. NEW 10,00,000 10 SEKHAWATI FINANCE PVT. LTD. NEW 21,00,000 11 SHARANJEET SINGH NEW 3,50,000 12 STELLAR INVESTMENT LTD. NEW 8,00,000 TOTAL TOTAL TOTAL TOTAL 1,13,73,627 1,13,73,627 1,13,73,627 1,13,73,627 ITA NOS. 292 & 11741/DEL/2009 5 4.1 ASSESSEE WAS ASKED TO FURNISH THE CONFIRMATION OF THE UNSECURED LOAN ALONGWITH THEIR PAN, ACKNOWLEDGEMENT RECEIPT OF THEIR RETURN OF INCOME. ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS ONLY FURNISHED CONFIRMATIONS FROM THE FOLLOWING PARTIES. 1 POOJA JAIN 2 SHARANJEET SINGH 3 SANJEEV KR. JAIN & CO. 4 SEKHAWATI FINANCE PVT. LTD. 5 STELLAR INVESTMENT LTD. 4.2 ASSESSING OFFICER FURTHER OBSERVED THAT NO BA NK STATEMENT FROM WHERE THE LOANS HAVE BEEN RECEIVED AND NO EXPLANATI ONS ABOUT THEIR CREDITWORTHINESS HAVE BEEN FURNISHED AND NO CONFIRMA TION FROM SHRI JOGINDER SINGH HAS BEEN FILED. THEREFORE, ASSESSI NG OFFICER HELD THAT THE LOAN REMAINED UNEXPLAINED EXCEPT IN THE CASES O F POOJA JAIN WHERE AMOUNT OF LOAN HAS BEEN TRANSFERRED FROM HER CAPITAL ACCOUNT WITH THE ASSESSEE FIRM, SHRI KAILASH NATH CHATURVEDI AND SUN ITA CHATURVEDI AS THESE WERE FOUND EXPLAINED IN THE ASSESSMENT YEAR 2 003-04. SO ASSESSING OFFICER DISALLOWED A SUM OF 74,50,000/- ( ` 1,13,73,627 - ` 39,23,627) TREATING THE SAME AS INCOME FROM UNDISCLOS ED SOURCES. 4.3 ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSE E HAS CLAIMED INTEREST PAYMENT OF ` 54,94,751/- ON UNSECURED LOANS . THE INTEREST CLAIMED INCLUDES THE INTEREST PAID TO POOJA JAIN AMOUN TING TO ` 1,58,240/-, ATUL JAIN ` 3,197/-, KAILASH NATH CHA TURVEDI ` 55,064/- AND SUNITA CHATURVEDI ` 57,757/-. THE AMOUNT OF INTER EST PAID TO THESE FOUR PARTIES IS ALLOWED AND THE BALANCE AMOUNT OF ` 52,20,493/- IS DISALLOWED AS THESE CREDITORS HAVE BEEN HELD AS UNE XPLAINED. ITA NOS. 292 & 11741/DEL/2009 6 5. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE LOAN CAN BE CATEGORIZE D INTO TWO - (A) FRESH LOANS FROM OLD CREDITORS AND (B) FRESH LOANS FROM NEW CREDITORS. (A) FRESH LOANS FROM OLD CREDITORS ARE AS FOLLOWS:- (IN `) 1 CHANGIA STEELS PVT. LTD. 5,00,000 2 GARG FINVEST PVT. LTD. 6,00,000 3 KAILASH NATH CHATURVEDI 1,50,000 4 KUBER CO. SALES PVT. LTD. 3,50,000 5 SUNITA CHATURVEDI 6,00,000 6 TRANSPEN FINANCIAL SERVICES PVT. LTD. 14,00,000 36,00,000/- (B) FRESH LOANS FROM NEW CREDITORS ARE AS FOLLOWS:- (IN `) 1 JOGINDER SINGH 3,50,000 2 POOJA JAIN (OLD PARTNER) 31,73,627 3 SANJEEV KR. JAIN & CO. 10,00,000 4 SEKHAWATI FINANCE PVT. LTD. 21,00,000 5 SHARANJEET SINGH 3,50,000 6 STELLAR INVESTMENT LTD. 8,00,000 77,37,627/ 77,37,627/ 77,37,627/ 77,37,627/- -- - ITA NOS. 292 & 11741/DEL/2009 7 5.1 LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT OUT OF THE TOTAL LOANS OF ` 1,13,73,627/-, THE LOA NS OF THE FOLLOWING THREE CREDITORS AMOUNTING TO ` 39,23,627/- WERE FOUN D TO HAVE SATISFACTORILY EXPLAINED BY THE ASSESSING OFFICER. 1 SH. KAILASH CHAND CHATURVEDI ` 1,50,000 2 SMT. SUNITA CHATURVEDI ` 6,00,000 3 MS. POOJA JAIN ` 31,73,627 ` 39,23,627 THE BALANCE SUM OF ` 74,50,000/- WAS TREATED AS IN COME FROM UNDISCLOSED SOURCES. 5.2 LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT ON PERUSAL OF THE ORDER OF THE LD. COMMISSIONER OF I NCOME TAX (APPEALS)- XXVII, DELHI IN THE ASSESSEES CASE FOR A SSESSMENT YEAR 2003-04 REVEALS THAT THE LD. COMMISSIONER OF INCOME T AX (APPEALS) HAS HELD THE LOANS FROM THE FOLLOWING PARTIES AS GEN UINE:- 1 CHANGIA STEELS PVT. LTD. ` 5,00,000 2 KUBER CO. SALES PVT. LTD. ` 3,50,000 3 TRANSPEN FINANCIAL SERVICES PVT. LTD. ` 14,00,000 ` 22,50,000 5.3 LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRE D TO THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVII, DELHI IN THIS REGARD FOR THE ASSESSMENT YEAR 2003-04. HE OBSERV ED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN A CLE AR FINDING THAT ITA NOS. 292 & 11741/DEL/2009 8 THE ASSESSEE HAS DULY DISCHARGED ITS ONUS OF PROV ING THE IDENTITY AND CREDITWORTHINESS OF THE PERSONS AND GENUINENESS OF THE TRANSACTIONS BY FURNISHING IN RESPECT OF EACH, THE CONFIRMATION LETT ER, ASSESSMENT PARTICULARS INCLUDING PAN AND COPY OF IT RETURN, BAL ANCE SHEET AND P&L ACCOUNT, BANK STATEMENT TO SHOW THAT THE PAYMENTS HA VE BEEN MADE THROUGH BANKING CHANNEL. IT WAS NOTED THAT THE ID ENTITY OF THE CREDITORS HAS BEEN ESTABLISHED BY SUBMITTING THEIR PA N AND INCOME TAX RETURNS, GENUINENESS HAS BEEN PROVED BY THE FACT TH AT THE CREDITWORTHINESS HAS BEEN ESTABLISHED THROUGH SUBMIS SION OF THE THEIR BALANCE SHEET AND P&L ACCOUNT. IN VIEW OF THE ABO VE FINDING BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN ASSESSEE S OWN CASE, ADDITION ON ACCOUNT OF LOAN FROM CHANGIA STEELS PVT. LD, KUBER CO. SALES PVT. LTD AND TRANSPEN FINANCIAL SERVICES TOTALI NG TO ` 22,50,000/- WAS DELETED. 5.4 LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVE D THAT HIS PREDECESSOR HAS CONFIRMED THE ADDITION ON ACCOUNT OF LOAN OF ` 17,01,677/- FROM GARG FINVEST PVT. LTD. IN ASSESS MENT YEAR 2003- 04. DURING THE YEAR UNDER APPEAL, FRESH LOAN OF ` 6, 00,000/- HAS BEEN CLAIMED TO HAVE BEEN TAKEN FROM GARG FINVEST PVT. LTD. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT A DMITTEDLY THE PRIMARY ONUS WAS DISCHARGED BY THE ASSESSEE BY FURN ISHING CONFIRMATORY LETTER, THE INCOME TAX DETAILS AND BALA NCE SHEET ETC. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVE D THAT HOWEVER, IF THE ASSESSING OFFICER BRINGS TO THE KNOWLEDGE O F THE ASSESSEE MORE FACTS WHICH DO NOT SUBSTANTIATE THE PRIMARY DETAILS CONFIRMING THE LOAN TRANSACTIONS, THEN HEAVY BURDEN LIES UPON THE ASSESSEE TO PROVE THE LOAN TRANSACTIONS TO THE SATISFACTION OF THE AS SESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT ONUS SHIFTS BACK ITA NOS. 292 & 11741/DEL/2009 9 TO THE ASSESSEE WHICH HAS TO BE DISCHARGED FULLY IN ORDER TO MAKE THE LOAN TRANSACTION AS ACCEPTABLE. LD. COMMISSIONER O F INCOME TAX (APPEALS) OBSERVED THAT THE STATEMENT OF SHRI MAHESH GARG RECORDED BEFORE THE ASSESSING OFFICER CANNOT BE RELIED UPON THE BACKDROP OF THE FACT THAT HIS STATEMENT WAS RECORDED ON DIFFEREN T DATES BEFORE THE INVESTIGATION WING, DELHI AND THAT HE FILED AN AFFI DAVIT DATED 6.2.2004 CONFIRMING THEM AGAIN. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT GARG FINVEST PVT. LTD IS A COMPANY UNDE R THE CONTROL OF SH. MAHESH GARG. IN VIEW OF THE AFORESAID, THE ADD ITION ON ACCOUNT OF FRESH LOANS OF ` 6,00,000/- FROM GARG FINVEST PVT. LTD . WAS CONFIRMED. 5.5 LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER HELD AS UNDER:- IT IS SEEN THAT THE FRESH LOANS OF RS. 77,73,627/- HAS BEEN TAKEN FROM 6 (SIX) NEW CREDITORS DURING THE YEAR UN DER APPEAL. THE A.O. HAS GIVEN A FINDING THAT THE ASSES SEE FURNISHED CONFIRMATION FROM THE FOLLOWING PARTIES:- I. POOJA JAIN 2. SHARANJEET SINGH 3. SANJEEV KUMAR JAIN & CO. 4. SHEKHAWATI FINANCE PVT. LTD. 5. STELLAR INVESTMENT LTD. THE A.O. FURTHER OBSERVED THAT NO CONFIRMATION FROM S H. JOGINDER SINGH HAS BEEN FILED. IN THIS CONTEXT, IT HAS BEEN ITA NOS. 292 & 11741/DEL/2009 10 SUBMITTED BY THE A/R OF THE APPELLANT THAT THE LOAN S FROM JOGINDER SINGH, SANJEEV KUMAR JAIN & CO. & SHARANJE ET SINGH HAVE BEEN REPAID DURING THE YEAR ITSELF, THE DETAILS OF WHICH WERE FILED ALONGWITH THE AUDIT REPORT WHICH W AS ENCLOSED WITH THE RETURN OF INCOME FOR A.Y. 2004-05 . THERE IS NO INDICATION IN THE ASSESSMENT ORDER THAT THE A .O. HAS MADE ANY ENQUIRY FOR THE VERIFICATION OF THE LOANS B EFORE ARRIVING AT THE CONCLUSION THAT THEY REMAINED UNEXP LAINED. IT IS OBSERVED THAT THE A.O HAS MADE THE ADDITION O NLY ON THE GROUND THAT THE BANK STATEMENTS OF THE LOAN CRE DITORS WERE NOT FURNISHED BY THE ASSESSEE. IT APPEARS THAT HE WAS PRIMARILY GUIDED BY THE ASSESSMENT ORDER PASSED IN T HE APPELLANT'S OWN CASE IN THE PRECEDING ASSESSMENT YE AR I.E. A.Y. 2003-04. WHEN THE ASSESSEE HAD FILED THE CONFIRMATION LETTE RS GIVING THE DETAILS SUCH AS PERMANENT ACCOUNT NUMBER, COPY OF INCOME TAX RETURN, BALANCE SHEET AND PROFIT & LOS S ACCOUNT, THE PRIMARY ONUS OF PROOF HAS BEEN DISCHAR GED BY IT. HOWEVER, THE A.O. CANNOT BE PRECLUDED FROM FUR THER INVESTIGATION FOR THE PURPOSE OF FINDING THE GENUIN ENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS. IN THE ITA NOS. 292 & 11741/DEL/2009 11 INSTANT CASE, NOTHING OF THAT SORT HAS BEEN UNDERTA KEN BY THE ASSESSING OFFICER. IT IS ALSO OBSERVED THAT T DS HAS BEEN DEDUCTED FROM THE INTEREST PAYMENTS THEREON. A S REGARDS THE NON PRODUCTION OF THE BANK STATEMENTS OF THE LOAN CREDITORS, IT IS OBSERVED THAT THE DETAILS OF THE CHEQUES THROUGH WHICH THE LOANS WERE RECEIVED WERE FURNISHE D IN THE CONFIRMATORY LETTERS GIVEN BY THEM AND THE ASSES SING OFFICER COULD HAVE VERY WELL GATHERED THE INFORMAT ION THROUGH INDEPENDENT ENQUIRIES FROM THE BANKS WHICH ISSUED THE CHEQUES AS WELL AS FROM THOSE WHICH CLEA RED THE CHEQUES. SINCE THE ADDITION HAS BEEN MADE AS UNEXPLAINED CASH CREDIT, IT IS CONSIDERED NECESSARY TO EXAMINE T HE CASE IN THE LIGHT OF THE PROVISIONS OF SECTION 68 OF THE ACT. UNDER SECTION 68 OF THE ACT IF ANY SUM IS FOUND CREDITED I N THE BOOKS OF ACCOUNTS OF THE APPELLANT & THE APPELLANT OFFERS NO EXPLANATION ABOUT THE NATURE & SOURCE THEREOF OR TH E EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY IN TH E OPINION OF THE ASSESSING OFFICER, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THE RELEVANT PREVIOUS YEAR. THEREFORE, WHAT HAS TO BE E NQUIRED ITA NOS. 292 & 11741/DEL/2009 12 INTO BY THE ASSESSING OFFICER IS THE NATURE & SOURC E OF THE SUM OR DEPOSIT. IF THE EXPLANATION WITH REGARD TO NA TURE & SOURCE IS NOT FOUND SATISFACTORY, ONLY THEN THE AMO UNT SO CREDITED MAY BE TREATED AS INCOME. IT HAS BEEN HELD BY THE VARIOUS HIGH COURTS THAT THE ASSESSEE HAS TO PROVE THREE CONDITIONS (I) IDENTITY OF THE CREDITOR (II) CAPACI TY OF SUCH CREDITOR TO ADVANCE MONEY & (III) GENUINENESS OF THE TRANSACTION. IF ALL THE AFORESAID CONDITIONS ARE PR OVED THE BURDEN SHIFTS ON THE REVENUE TO PROVE THAT THE AMOUN T BELONGED TO THE ASSESSEE. IT HAS ALSO BEEN HELD BY THE VARIOUS HIGH COURTS THAT THE ASSESSEE CANNOT BE ASK ED TO PROVE THE SOURCE OF SOURCE OR THE ORIGIN OF DEPOSIT . REFERENCE MAY ALSO BE MADE TO THE DECISION OF THE AP EX COURT IN THE CASES OF CIT VS. ORISSA CORPN. (P) LTD. (1986) 159 ITR 78 (SC) & KISHAN CHAND CHELLARAM VS. CIT 125 ITR 713 (SC). IN THIS REGARD, IT IS IMPORTANT TO TAKE NO TE OF THE JUDGMENT IN THE CASE OF KISHAN CHAND CHELLARAM (SUPR A) HOLDING THAT THE BURDEN IS ON THE DEPARTMENT TO SHO W THAT THE MONEY BELONGED TO THE ASSESSEE BY BRINGING PROPE R EVIDENCE ON RECORD & THE ASSESSEE COULD NOT BE EXPE CTED TO PUT EVIDENCE TO HELP THE DEPARTMENT TO DISCHARGE THE ITA NOS. 292 & 11741/DEL/2009 13 BURDEN THAT LAY UPON IT. THAT THERE IS NO EVIDENCE ON THE BASIS OF WHICH ASSESSING OFFICER WOULD COME TO A FI NDING THAT SUM CREDITED IN BOOKS OF THE ASSESSEE REPRESENT ED THE UNDISCLOSED INCOME OF THE ASSESSEE. THE CASE LAWS RE LIED UPON BY THE AR OF THE APPELLANT ALSO FORTIFY THE AB OVE PROPOSITION. IN VIEW OF THE DISCUSSION MADE ABOVE, I AM OF THE CONSIDERED OPINION THAT THE A.O. WAS NOT JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF UNSECURED LOANS TO THE EXTEN T OF RS.46,00,000/-. THEREFORE, THE ADDITION OF RS. 46,0 0,000/- MADE ON ACCOUNT OF UNSECURED LOANS FROM THE NEW CREDI TORS IS DELETED. THEREFORE, THE TOTAL RELIEF WORKS OUT T O RS.68,50,000/.(RS.22,00,000/- IN RESPECT OF FRESH L OANS FROM OLD CREDITORS AS PER PARA 6.2 ABOVE PLUS RS.46,00,0 00/- IN RESPECT OF FRESH LOANS FROM NEW CREDITORS) AS ALSO D ISCUSSED WITH THE FORGOING PARAS, THE ADDITION OF. RS. 6,00, 000/- ON ACCOUNT OF UNSECURED LOANS FROM GARG FINVEST PVT. LTD . IS CONFIRMED. AS A RESULT, GROUND NO.2, IS PARTLY ALLOW ED. 5.6 APROPOS DISALLOWANCE OUT OF PAYMENT OF INTERES T TO THE EXTENT OF ` 52,20,493/- ON UNSECURED LOANS. ITA NOS. 292 & 11741/DEL/2009 14 IN THIS REGARD LD. COMMISSIONER OF INCOME TAX (APPEA LS) HAS HELD AS UNDER:- OUT OF THE TOTAL CLAIM OF RS. 54,94,751/- THE-A.O. H AD ALLOWED THE INTEREST PAYMENT TO THE FOLLOWING PARTIES:- 1. POOJA JAIN ` 1,58,240/- 2. ATUL JAIN ` 3,197/- 3. KAILASH NATH CHATURVEDI ` 55,064/- 4. SUNITA CHATURVEDI ` 57,757/- ` 2,71,061/- IN VIEW OF THE FINDINGS OF THE LD. (A)-XXVII IN TH E APPELLANT'S OWN CASE FOR A.Y. 2003-04 THE INTEREST PAID TO THE EXTENT OF RS. 45,32,308/- TO THE LOAN CREDITORS IS HELD TO BE ALL OWABLE ON THE GROUND THAT THE LD. CIT(A) HAS HELD THE LOANS FROM THESE PARTIES TO BE GENUINE. THE LD. CIT(A)-XXVII IN A.Y. 2003-04 HAS DISALLOWED THE INTEREST PAYMENT ON ACCOUNT OF UNSECURED LOANS 'FRO M THE FOLLOWING PARTIES (REFERENCE MAY BE MADE TO PARA 1 2 OF THE SAID ORDER OF CIT(A):- (I) SIC CONSULTANTS PVT. LTD., DELHI ITA NOS. 292 & 11741/DEL/2009 15 (II) DIVISION TRADING PVT. LTD., DELHI (III) GANGA INFTN PVT. LTD., DELHI, (IV) GARG FIN-VEST PVT. LTD., DELHI (V) NEW GENERATION FINVEST PVT. LTD., DELHI. THEREFORE THE CLAIM OF INTEREST PAID TO THE AFOREMENT IONED PARTIES TO THE EXTENT OF RS. 6,88,185/- DURING THE YEAR UNDER APPEAL IS DISALLOWED, THE BREAK-UP OF WHICH IS AS U NDER:- (I) BIC CONSULTANTS PVT. LTD., DELHI ` 42,903/ - (II) DIVISION TRADING PVT. LTD., DELHI ` 1,71,5 81/- (III) GANGA INFTN PVT. LTD., DELHI ` 1,04,193/ - (IV) GARG FINVEST PVT. LTD., DELHI ` 2,77,596/- (V) NEW GENERATION FINVEST PVT. LTD., DELHI ` 91,912 /- ` 6,88,185/- AS A RESULT, GROUND NO. 3 IS PARTLY ALLOWED. 6. AGAINST THE ABOVE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE AND ASSESSEE ARE IN CROSS AP PEALS BEFORE US. ITA NOS. 292 & 11741/DEL/2009 16 7. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT L OANS HAVE BEEN CATEGORIZED INTO TWO CATEGORY BY THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) (A) FRESH LOAN FROM OLD CREDITORS AND (B) FRESH LOAN FROM NEW CREDITORS AS FOLLOWS:- (A) FRESH LOANS FROM OLD CREDITORS ARE AS FOLLOWS:- (IN `) 1 CHANGIA STEELS PVT. LTD. 5,00,000 2 GARG FINVEST PVT. LTD. 6,00,000 3 KAILASH NATH CHATURVEDI 1,50,000 4 KUBER CO. SALES PVT. LTD. 3,50,000 5 SUNITA CHATURVEDI 6,00,000 6 TRANSPEN FINANCIAL SERVICES PVT. LTD. 14,00,000 36,00,000/- (B) FRESH LOANS FROM NEW CREDITORS ARE AS FOLLOWS:- (IN `) 1 JOGINDER SINGH 3,50,000 2 POOJA JAIN (OLD PARTNER) 31,73,627 3 SANJEEV KR. JAIN & CO. 10,00,000 4 SEKHAWATI FINANCE PVT. LTD. 21,00,000 5 SHARANJEET SINGH 3,50,000 ITA NOS. 292 & 11741/DEL/2009 17 6 STELLAR INVESTMENT LTD. 8,00,000 77,37,627/ 77,37,627/ 77,37,627/ 77,37,627/- -- - OUT OF TOTAL LOANS OF ` 1,13,73,627/- THE LOANS O F THREE CREDITORS AMOUNTING TO ` 39,23,627/- WERE FOUND TO HAVE SATISF ACTORILY EXPLAINED BY THE ASSESSING OFFICER. THE BALANCE SUM OF ` 74,5 0,000/- WAS TREATED AS INCOME FROM UNDISCLOSED SOURCES. REFER RING TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER OF AS SESSMENT YEAR 2003-04, LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S DELETED THE ADDITION WITH RESPECT TO THE FOLLOWING PARTIES:- 1 CHANGIA STEELS PVT. LTD. ` 5,00,000 2 KUBER CO. SALES PVT. LTD. ` 3,50,000 3 TRANSPEN FINANCIAL SERVICES PVT. LTD. ` 14,00,000 ` 22,50,000 7.1 IN VIEW OF THE FINDING OF THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) IN THE PREVIOUS ASSESSMENT ORDER THE ADD ITION PERTAINING TO THESE PARTIES HAVE BEEN DELETED BY THE LD. COMMISSIO NER OF INCOME TAX (APPEALS). IN THIS REGARD, WE NOTE THAT THE PR EVIOUS ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEAR 2003- 04 WAS SET ASIDE BY THE ITAT AND THE MATTER RESTORE D TO THE FILE OF THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, WE ARE INCLINED TO REMIT THE PRESENT ISSUE ALSO WITH RESPECT TO THESE PARTI ES TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH AFTE R ADJUDICATION ON THESE PARTIES, SET ASIDE BY THE ITAT FOR EARLIER YE AR. ITA NOS. 292 & 11741/DEL/2009 18 7.2 COMMISSIONER OF INCOME TAX (APPEALS) HAS FURT HER NOTED THAT IN THE PREVIOUS ASSESSMENT YEAR ADDITION ON ACCOUNT OF LOAN OF ` 17,01,677/- FROM M/S GARG FINVEST PVT. LTD. WAS CONFIR MED. DURING THE YEAR UNDER APPEAL, FRESH LOAN OF ` 6,00,000/- H AS BEEN CLAIMED. IN THIS REGARD ASSESSEE HAS DISCHARGED THE PRIMARY ONU S. ASSESSEE HAS FURNISHED CONFIRMATORY LETTERS, INCOME TAX DETAILS A ND BALANCE SHEET. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS PROCEED ED TO CONFIRM THE ADDITION ON THIS ACCOUNT, DESPITE THE ABOVE DOC UMENTARY EVIDENCE. IN OUR CONSIDERED OPINION, THIS ADDITION CANNOT BE SUSTAINED. IN THE PRESENT CASE, ASSESSEE FURNISHED THE CONFIRMATORY LE TTERS, INCOME TAX DETAILS, AND BALANCE SHEET, HENCE, THE ADDITION WI TH RESPECT TO M/S GARG FINVEST PVT. LTD. CANNOT BE MADE. 7.3 REGARDING THE REST OF ` 46,00,000/-, LD. COMMI SSIONER OF INCOME TAX (APPEALS) HAS FOUND THAT ASSESSEE HAS FILED THE CONFIRMATION LETTERS, GIVING THE DETAILS SUCH AS PAN, COPY OF INC OME TAX RETURN, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. THUS TH E PRIMARY ONUS OF PROOF HAS BEEN DISCHARGED. ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY PARTICULAR TO DISPROVE THE DOCUMENTARY E VIDENCE SUBMITTED BY THE ASSESSEE. IT IS ALSO BEEN NOTED THAT THE T DS HAS ALSO BEEN DEDUCTED FROM THE PAYMENT MADE THEREON. AS REGARDS THE NON PRODUCTION OF BANK STATEMENT OF THE LOAN CREDITORS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT T HE DETAILS OF THE CHEQUES THROUGH WHICH THE LOANS WERE RECEIVED WERE FURNISHED IN THE CONFIRMATORY LETTERS GIVEN BY THEM AND THE ASSESSING OFFICER COULD HAVE VERY WELL GATHERED THE INFORMATION THROUGH IN DEPENDENT ENQUIRIES FROM THE BANKS WHICH ISSUED THE CHEQUES AS WELL AS FROM THOSE WHICH CLEARED THE CHEQUES. IN OUR CONSIDER ED OPINION, THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) IN DELETING ITA NOS. 292 & 11741/DEL/2009 19 THE ADDITION WITH RESPECT TO THE PARTIES IS COGENT ENOUGH. IN THIS REGARD, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE FOLLOWING CASE LAWS:- (I) HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C.I. T. VS. DWARKADHISH INVESTMENT P LTD. IN ITA NO. 911/2010 VIDE ORDER DA TED 02.8.2010 330 ITR 298. THE RELEVANT PARAS OF THIS JUDGEMENT OF HONBLE DELHI HIGH COURT I.E. PARA NO. 6, 7 & 8 ARE REPRODUCED HE REIN BELOW:- 6. IN OUR OPINION, AS SECTION 68 OF THE ACT, 1961 H AS BEEN INTERPRETED AS RECENTLY AS 2008 BY A DIVISION BENCH OF THIS COURT IN DIVINE LEASING AND FINANCE LTD. (SUPRA) AFTER CON SIDERING ALL THE RELEVANT JUDGEMENTS, WE DO NOT HAVE TO RECONSIDE R ALL THE JUDGEMENTS REFERRED TO BY MR. SAHNI WHICH ARE PRIOR IN DATE AND TIME TO THE AFORESAID JUDGEMENT. IN FACT, A SPECIAL LEAVE PETITION FILED AGAINST THE SAID DIVISION BENCH JUDGEMENT WAS DIS MISSED BY THE SUPREME COURT BY WAY OF SPEAKING ORDER IN C.I .T. VS. LOVELY EXPORTS (P) LTD. 216 CTR 195 (SC). THE SUPRE ME COURT IN LOVELY EXPORTS PVT. LTD. (SUPRA) HAS HELD AS UNDER:- CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE INCOME TA X ACT, 1961. WE FIND NO MERIT IN THIS SPECIAL LEAVE P ETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MO NEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGEMENT. 7. CONSEQUENTLY, THE DOCTRINE OF MERGER WOULD APPLY AND THE JUDGEMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. ITA NOS. 292 & 11741/DEL/2009 20 (SUPRA) WOULD COVER THE FIELD WITH REGARD TO INTERP RETATION OF SECTION 68 OF THE ACT. 8. IN ANY MANNER, THE ONUS OF PROOF IS NOT A STATIC ON E. THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF L IES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CREDITOR S/ SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRANSACTIO N BY SHOWING MONEY / HIS BOOKS EITHER BY ACCOUNT PAYEE C HEQUE OR BY DRAFT OR BY ANY OTHER MODE, THEN THE ONUS OF PRO OF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS /SHA RE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68. O NE MUST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HA S ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVE R, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE SOUR CE OF SOURCE. (II) HONBLE JURISDICTIONAL HIGH COURT DECISION IN TH E CASE OF C.I.T. VS. OASIS HOSPITALITIES P LTD. 333 ITR 119 AS UNDER:- 27. THE ORDER OF ASSESSING OFFICER WOULD REVEAL THAT IT HAD RECEIVED AN INFORMATION FROM THE INVESTIGATION WING WHICH HAD MADE VARIOUS ENQUIRIES / INVESTIGATIONS ON THE BASIS OF WHICH IT WAS FOUND THAT THESE SIX INVESTORS BELONG TO O NE MAHESH GARG GROUP WHO WERE NOT CARRYING ON ANY REAL BUSINESS ACTIVITY AND WERE RATHER ENGAGED IN THE BUSINE SS OF PROVIDING ACCOMMODATIONS ENTRIES. THEY WERE, THUS, ENTRY OPERATORS OF WHICH THE APPELLANT WAS THE BENEFI CIARY. ACCORDING TO THE ASSESSING OFFICER, THE MODUS OPERANDI INVOLVED IN SUCH TYPE OF ACTIVITY WAS LIKE THIS: AN EN TRY OPERATOR OPERATES A NUMBER OF ACCOUNTS IN THE SAME ITA NOS. 292 & 11741/DEL/2009 21 BANK/BRANCH OR IN DIFFERENT BRANCHES IN THE NAME OF COMPANIES, FIRMS, PROPRIETARY CONCERNS AND INDIVIDUALS AND FOR THE OPERATION OF THESE BANK ACCOUNTS, FILING INCO ME TAX RETURNS ETC. PERSONS ARE HIRED. MOST OF THESE PERSONS W ORK ON PART-TIME BASIS AND ARE CALLED UPON TO SIGN DOCUMEN TS, CHEQUE BOOKS, ETC. WHENEVER REQUIRED. WHENEVER ANY BENEFICIARY IS INTERESTED IN TAKING AN ENTRY, HE WOUL D APPROACH THE ENTRY OPERATOR AND HANDOVER THE CASH ALONGWITH COMMISSION AND TAKE CHEQUES, DEMAND DRAFT, POSTAL ORDER. THE CASH IS DEPOSITED BY THE ENTRY OPER ATOR IN A BANK ACCOUNT EITHER IN HIS NAME OR IN THE NAME OF RELATIVE/ FRIENDS OR OTHER PERSON HIRED BY HIM FOR TH E PURPOSES OF OPENING THE BANK ACCOUNT. AFTER THE DEPO SIT OF CASH WHEN THERE IS SUFFICIENT BALANCE, THE ENTRY OPERA TOR ISSUES DEMAND DRAFT, POSTAL ORDERS, CHEQUES IN THE NAME O F BENEFICIARY. MOST OF THESE CONCERNS / INDIVIDUALS ALSO HAVE OBTAINED PAN FROM THE DEPARTMENT AND ARE FILING IN COME TAX RETURNS, BUT WHAT IS SHOWN IN THE RETURN IS NOT AC TUAL STATE OF AFFAIRS. 28. THE APPELLANT FILED COPIES OF PAN, ACKNOWLEDGEME NT OF FILING OF INCOME TAX RETURNS OF THE COMPANIES, THEIR BANK ACCOUNT STATEMENTS FOR THE RELEVANT PERIOD, I.E. FOR THE PERIOD WHEN THE CHEQUES WERE CLEARED. HOWEVER, TH E PARTIES WERE NOT PRODUCED IN SPITE OF SPECIFIC DIRECTI ON OF THE ASSESSING OFFICER INSTEAD OF TAKING OPPORTUNITIES I N THIS BEHALF. SINCE THE SOCALLED DIRECTORS OF THESE COMPANIES WERE NOT PRODUCED ON THIS GROUND COUPLED WI TH THE OUTCOME OF THE DETAILED INQUIRY MADE BY THE INVESTIGATION WING OF THE DEPARTMENT, THE ASSESSING OFFI CER MADE THE ADDITION. THIS ADDITION COULD NOT BE SUSTAI NED ITA NOS. 292 & 11741/DEL/2009 22 AS THE PRIMARY ONUS WAS DISCHARGED BY THE APPELLANT BY PRODUCING PAN NUMBER, BANK ACCOUNT, COPIES OF INCOME TAX RETURNS OF THE SHARE APPLICANTS, ETC. WE ALSO FIN D THAT THE ASSESSING OFFICER WAS INFLUENCED BY THE INFORMATION RECEIVED BY THE INVESTIGATING WING AND ON THAT BASIS GENERALLY MODUS OPERANDI BY SUCH ENTRY OPERATORS IS DISCUSSED IN DETAIL. HOWEVER, WHETHER SUCH MODUS OPERANDI EXISTED IN THE PRESENT CASE OR NOT WAS NOT INVESTIGATED BY THE ASSESSING OFFICER. THE APPELLANT WAS NOT CONFRONTED WIT THE INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OR WAS GIVEN AN OPPORTUNITY TO CRO SS EXAMINE THE PERSONS WHOSE STATEMENTS WERE RECORDED BY THE INVESTIGATION WING. 29. AS REGARDS DISCREPANCIES FOUND BY THE ASSESSING OFFICER IN THE BANK STATEMENT, SUFFICE IS TO MENTION THAT THE BAN K STATEMENTS THAT WERE FILED BY THE APPELLANT WERE PR OVIDED BY THE SHARE HOLDERS AND WERE COMPUTER PRINTED ON TH E BANK STATIONERY. THE SAME WERE FILED BY THE APPELLA NT DURING THE ASSESSMENT PROCEEDING WITHOUT ANY SUSPICION O F THEIR BEING INCORRECT. DURING THE ASSESSMENT PROCEEDI NGS, THE APPELLANT WAS NEVER CONFRONTED BY THE ASSESSING OFFICER THAT THERE ARE DISCREPANCIES BETWEEN THE BAN K STATEMENTS FILED AND THE STATEMENTS DIRECTLY CALLED BY THE ASSESSING OFFICER . HOWEVER, EVEN AFTER CONSIDERING TH E ALLEGED DISCREPANCIES, IT DOES NOT FOLLOW THAT THE AMO UNT OF SHARE CAPITAL WAS THE UNDISCLOSED INCOME OF THE APPELLA NT. EVEN THE CORRECT BANK STATEMENTS AS CLAIMED BY THE ASSESSING OFFICER REVEAL THAT THE APPELLANT HAS RECEIVE D CHEQUES FROM THE SHAREHOLDERS. IN THIS BACKDROP, THE FOLLOWING OBSERVATIONS OF THE COURT IN THE CASE OF C.I .T. VS. ITA NOS. 292 & 11741/DEL/2009 23 K.C. FIBRES LTD. 92010) 187 TAXMAN 53 (DEL) ARE REPRODUCED: IT IS STRANGE THAT WHEN THE ASSESSING OFFICER IS QUESTIONING THE BONA FIDES OF M/S DIAMOND PROTEIN LTD. FOR COLLECTING MONEY TO SUBSCRIBE TO THE SHARE T O THE CAPITAL OF THE APPELLANT, BUT IT IS THE APPELLAN T WHO IS FASTENED WITH THE LIABILITY. THE ASSESSING OFFICER DID D NOT QUESTION M/S DIAMOND PROTEIN LTD. IN THIS BEHALF. INSOFAR AS ASSESSING OFFICER IS CONCERNED, IT IS NOT DISPUTED THAT MONEY WAS PAID TO ITS TOWARDS THE AFORESAID SHARE APPLICATION MONEY, BY MEANS OF CHEQUES. IT IS NOT FOR THE ASSESSING OFFICER TO PROBE AS TO THE SOURCE FROM WHERE M/S DIAMOND PROTEIN LTD. COLLECTED THE AFORESAID MONEY. IT WAS FOR THE ASSESSING OFFICER, IN THESE CIRCUMSTANCES TO INQUIRE INTO THE AFFAIRS OF M/S DIAMOND PROTEIN LTD. WHICH IS AN INDEPENDENT COMPANY INASMUCH AS NO FINDING IS ARRIVED AT BY THE ASSESSING OFFICER THAT THE TWO COMPANIES ARE UMBRELLA COMPANIES OR HAVE ANY RELATIONSHIP WITH EACH OTHER. 30. WE ARE, THEREFORE, OF THE OPINION, THAT THERE I S NO MERIT IN THESE TWO APPEALS, WHICH ARE ACCORDINGLY DISMISSED AT TH E ADMISSION STAGE ITSELF. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AN D PRECEDENTS RELIED UPON, IN OUR CONSIDERED OPINION, LD. COMMISSI ONER OF INCOME TAX (APPEALS) HAS BEEN CORRECT IN DELETING THE ADD ITION WITH RESPECT TO THE LOAN OF ` 46,00,000/-. ITA NOS. 292 & 11741/DEL/2009 24 9. AS REGARDS INTEREST PAYMENT ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAS CLAIMED INTEREST PAYMENT OF ` 54,94,751/ -. ON UNSECURED LOAN. THE INTEREST AMOUNT INCLUDED INTERES T PAID TO PUJA JAIN ` 1,58,240/-; ATUL JAIN ` 3,197/-; KAILASH NATH CHA TURVEDI ` 55,064/- AND SUNITA CHATURVEDI ` 57,757/-, THE ASSESSING OFFICE R HAS ALLOWED THE INTEREST PAID TO THESE PARTIES AND THE BALANCE AMOUN T OF ` 52,20,493/- WAS DISALLOWED AS THESE CREDITORS WERE FOUND TO BE UNEXPLAINED BY THE ASSESSING OFFICER. LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAS REFERRED TO THE PREVIOUS ASSESSMEN T ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND ON THAT BAS IS PLACING RELIANCE UPON THE PREVIOUS ORDER OF THE LD. COMMISS IONER OF INCOME TAX (APPEALS), HE HAS GIVEN A RELIEF TO THE EXTENT OF ` 45,32,308/-. HE HAS HELD THAT THE INTEREST PAID OF ` 45,32,308/- T O THE LOAN CREDITORS IS ALLOWABLE ON THE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS HELD THE LOANS FROM THESE PARTIES TO B E GENUINE. FURTHER REFERRING TO THE LD. COMMISSIONER OF INCOME TA X (APPEALS)S EARLIER ORDER, THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) HAS DISALLOWED THE INTEREST PAID ON UNSECURED LOAN FROM THE PARTIES TO THE EXTENT OF ` 6,88,185/-. 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION AND PERUSED THE RECORDS. WE FIND THAT THE PREVIOUS ORDER OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS) WAS THE SUBJECT MATTER OF APPEAL BEFORE THE ITAT AND THE ITAT HAS REMITTED THE MATTER PERTAINING TO TH E LOAN CREDITORS TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDI CATION. WE FIND THAT THE ADJUDICATION OF INTEREST PAYABLE IS CONSEQUENT IAL TO THE ADJUDICATION ON THE PRINCIPAL LOAN AMOUNT. WE FIN D THAT THE ASSESSMENT YEAR 2003-04 THE MATTER WAS REMITTED BY TH E ITAT TO THE FILE OF THE ASSESSING OFFICER. IN THE PRESENT YEAR , WE HAD ALREADY ITA NOS. 292 & 11741/DEL/2009 25 ADJUDICATED UPON THE PRINCIPAL LOAN AMOUNTS. HENCE, THIS ISSUE OF ALLOWABILITY OF INTEREST IS REMITTED TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL COMPUTE THE SAME ON TH E BASIS OF ADJUDICATION ON THE PRINCIPAL AMOUNT OF LOAN. 11. IN THE RESULT, BOTH THE APPEAL FILED BY THE R EVENUE AND ASSESSEE STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/12/2011. SD/- SD/- [ [[ [R.P. TOLANI] R.P. TOLANI] R.P. TOLANI] R.P. TOLANI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 23/12/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES