ITO, Ward-7(1), Hyderabad V. M/s. Sigma Constructions, Hyderabad

ITA 1869/HYD/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69920 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: S RAVI
• Keywords: Income from undisclosed sources; Source of fund
• Section: 133A; 148; 6; 69; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1869/HYD/2011 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WARD 7(1), HYDERABAD. VS. M/S SIGMA CONSTRUCTIONS, HYDERABAD. (PAN ABJFS 4263 R) APPELLANT RESPONDENT APPELLANT BY: SRI B. YADAGIRI RESPONDENT BY: SRI S. RAVI DATE OF HEARING: 18/11/2013 DATE OF PRONOUNCEMENT: 18/11/2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 25/08/2013 FOR ASSESSMENT YEAR 2006-07 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1) THE CIT(A)-VI, HYDERABAD ERRED IN DELETING THE ADDITIONS ON BOTH FACTS AND IN LAW. 2) THE CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THA T THE ASSESSEE FIRM HAD FAILED IN DISCHARGING ITS ONUS BE FORE THE ASSESSING OFFICER TO PROVE THE NECESSARY DETAIL S FOR GENUINENESS AND THE CREDITWORTHINESS OF THE ALLEGED CASH CREDITS. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SURVEY OPERATION U/S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES O F THE ASSESSEE ON 25/02/2010. THE ASSESSEE FILED ITS RETU RN OF INCOME IN RESPONSE TO A NOTICE U/S 148 ON 21/05/201 0 DECLARING NIL INCOME. THE ASSESSING OFFICER ADDED A SUM OF I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 2 RS. 1,50,51,815/- U/S 69 AND A SUM OF RS. 1,97,55,3 62/- U/S 68 TO THE INCOME OF ASSESSEE. 3. AS REGARDS THE ADDITION OF RS. 1,50,51,815/- WIT H REGARD TO THE INVESTMENT IN LAND AT BANJARA HILLS, THE ASS ESSING OFFICER VIDE PARA 5 OF HIS ORDER HAD NOTED THAT THE ASSESSEE HAD NOT EXPLAINED OR DISCLOSED THE SOURCES OF INCOM E FOR MAKING PAYMENT OF RS. 1,50,51,815/- BY WAY OF DEMAN D DRAFT BEARING NO. 268527 DATED 16.05.2005 DRAWN ON DCB BANK, ABIDS, HYDERABAD ISSUED IN FAVOUR OF THE LAND LADY SHANA PAVITHRAN, AND THAT THOUGH THE ASSESSEE FILED THE COPY OF ITS ACCOUNT IN THE DC BANK FROM WHICH PAYME NT OF RS. 1,50,51,815/- HAD BEEN MADE, THIS PAYMENT HAD B EEN PRECEDED BY VARIOUS CASH CREDITS WHICH WERE NOT ROU TED BY CROSS CHEQUES AND THE CREDITS WERE NOT EXPLAINED PR OPERLY WITH RELEVANT SOURCES. THE ASSESSING OFFICER ALSO H ELD THAT THOUGH CONFIRMATION LETTERS OF THE PARTNERS HAD BEE N FILED, THE CAPITAL HAD BEEN REMITTED BY THEM INTO THE FIRM AFTER 16.05.2005, I.E. AFTER THE PAYMENT TO TH E LANDLADY. HE, THEREFORE, MADE THE ADDITION U/S 69 O F THE ACT. 4. ON APPEAL, THE CIT(A) RELYING ON THE DECISION O F THE ITAT, MUMBAI IN RUPEE FINANCE AND MANAGEMENT P. TD. V. ASSISTANT COMMISSIONER OF INCOME-TAX [2009] 310 ITR(AT) 403 (MUM), OBSERVED THAT THE FACT OF THE INVESTMENT HAVING BEEN RECORDED IN THE BOOKS OF THE ASSESSEE IS UNDISPUTED AND INDEED, THE ASSESSING O FFICER HIMSELF HAS NOTED AT PARA 3 THAT THE ASSESSEE HAS DISCLOSED AN AMOUNT OF RS. 2.16 CRORES AS THE VALUE OF THE BANJARA HILLS PROPERTY IN THE BALANCE SHEET UNDER T HE HEAD 'LAND AND BUILDINGS'. HE, THEREFORE, HELD THAT THE INVOCATION I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 3 OF SEC. 69 FOR THIS ADDITION IS MISPLACED AND ACCOR DINGLY, HE DELETED THE ADDITION MADE BY THE ASSESSING OFFIC ER. 5. AS REGARDS THE ADDITION OF RS. 1,97,55,362/- U/ S. 68 OF THE INCOME TAX ACT, IT IS SEEN THAT AS PER THE BALA NCE SHEET OF THE ASSESSEE, THE CAPITAL ACCOUNTS OF THE PARTNE RS SHOW THE FOLLOWING AMOUNTS: (AMOUNTS IN RS.) 1. MANSOOR AHMED ATEEF 27,60,000 2. MRS. NADIRA ANEES 29,10,000 3. ATEEQUR REHEMAN 33,60,000 4. NASEM SULTANA 49,00,362 5. SYED ANESUDDIN 30,75,000 6. SAIRA KHIMANI . TALLIED 7. MALIKA BANU 27,50,000 TOTAL UNDISCLOSED INCOME 1,97,55,362 ========== THE ASSESSING OFFICER ADDED THE ABOVE AMOUNTS U/S 6 8 BY HOLDING THAT THE CREDITWORTHINESS OF THE PARTNERS H AD NOT BEEN ESTABLISHED. 6. ON APPEAL, BEFORE THE CIT(A), THE AR OF THE ASSE SSEE HAD SUBMITTED COPIES OF THE LEDGER ACCOUNT OF THE P ARTNERS IN THE ASSESSEES BOOKS AS WELL AS BANK STATEMENTS OF THE ASSESSEE ITSELF AND OF THE PARTNERS. IT HAS ALSO RE LIED ON VARIOUS DECISIONS, WHICH WERE EXTRACTED BY THE CIT( A) AT PAGE 6 OF THE IMPUGNED ORDER. THE CIT(A) AFTER CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE AS WELL AS CALLING THE REMAND REPORT FROM THE ASSESSING OFFICER, DELETED THE ADDI TION OF RS. 1,97,55,362/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT, OBSERVING AS UNDER: 4.6 I HAVE DULY EXAMINED THE MATERIAL ON RECORD AN D THE SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE HAS FILED COPY OF THE BALANCE SHEET OF THE FIRM AS ON 31.3.2005, I.E. THE PRECEDING PREVIOUS YEAR AS WELL AS THE DETAILS OF INVESTMENT BY THE PARTNERS IN THE FI RM I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 4 WHICH SHOWS THE FOLLOWING CREDITS: 1. ATIF MANSOOR AHMED 10,00,000 2. SYED ANEESUDDIN 10,00,000 3. ATIQ UR REHMAN 10,60,000 4. MRS. NADIRA ANEES 60,000 COPIES OF THE LEDGER ACCOUNT OF THE PARTNERS FOR TH E YEAR UNDER APPEAL HAS ALSO BEEN FILED. IT IS SEEN T HAT CREDITS OF RS.31,20,000 OUT OF THE TOTAL ADDITION OF RS.1,97,55,362 RELATE TO THE AY 2005-06 . EVEN IF THEY WERE TO BE HELD AS UNEXPLAINED, THE ADDITION CAN BE MADE ONLY IN THE AY 2005-06 AND NOT IN THE AY 2006-07. THE ADDITION TO THE EXTENT OF RS.31,20,000 IS, THEREFORE, DELETED. 5.1 THE ASSESSEE'S CLAIMS WITH REGARD TO THE BALANC E 1,66,35,362 ARE NOW EXAMINED. ALL THE PERSONS WHOSE INVESTMENTS HAVE BEEN TREATED AS UNEXPLAINED BY THE AO ARE PARTNERS OF THE ASSESSEE FIRM. THEREFORE, THERE CAN BE NO QUESTION MARKS OVER THEI R IDENTITY. TO THAT EXTENT, NOTHING TURNS ON THE FAIL URE OF THE NON-RESIDENT PARTNERS TO PRODUCE THEIR PASSPORT S FOR EXAMINATION BY THE AO. 5.2 AT THIS POINT, IT IS NECESSARY TO REFER TO THE CASE LAWS CITED BY THE ASSESSEE AND REFERRED TO ABOVE. THE DECISIONS IN THE CITED CASES HAVE BEEN RENDERED ON THE SPECIFIC FACTS AND CIRCUMSTANCES OF THOSE CASES. ON THE OTHER HAND, THE JURISDICTIONAL ITAT I N PARAS COLLINS DISTILLERIES V. INCOME- TAX OFFICER [2011] 7 ITR(TRIB) 614(HYD) HAS HELD AS FOLLOWS: 'UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961, THE ASSESSEE IS REQUIRED TO EXPLAIN THE IDENTITY, CAPACITY AND GENUINENESS OF THE CREDIT ENTRY EXISTING IN THE BOOKS OF ACCOUNT. THE PROVISIONS OF SECTION ARE APPLICABLE TO PARTNERSHIPS ALSO. THERE IS NO DISTINCTION BETWEEN THE CAPITAL CONTRIBUTED BY THE PARTNER OR THIRD PARTY OR UNSECURED LOAN RECEIVED BY THE ASSESSEE. IF THE CASH CREDIT IN THE CAPITAL ACCOUNT OF THE ASSESSEE IS NOT SATISFACTORILY EXPLAINED, THE ASSESSING OFFICER IS JUSTIFIED TO TREAT IT AS INCOME FROM UNDISCLOSED SOURCES. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE SUBSTANTIATING THE EXPLANATION OF THE ASSESSEE, THE DEEMING FICTION CREATED BY SECTION 68 IS I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 5 SQUARELY APPLICABLE. MERELY BECAUSE THE AMOUNT IS CREDITED IN THE BOOKS OF THE FIRM, IT CANNOT BE SAID THAT IT IS NOT THE UNDISCLOSED INCOME OF THE ASSESSEE AND IT HAS TO BE ASSESSED AS INCOME OF THE PARTNERS... IT IS THE ONUS OF THE FIRM TO PROVE THE CAPACITY OF THE PARTNER TO INVEST THE AMOUNT IN THE FIRM AS ITS CAPITAL. IF THE ASSESSEE IS ABLE TO PROVE THE CREDITWORTHINESS OF THE PARTNERS, THE ONUS CAST ON THE ASSESSEE WOULD BE DISCHARGED. 5.3 THEREFORE, IT IS NECESSARY TO EXAMINE THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITORS BEFORE DECIDING T HE ISSUE. THE AO HAS OBSERVED IN HIS ORDER THAT NO EVIDENCE HAD BEEN FILED TO PROVE THAT THE INVESTMENTS HAD BEEN MADE THROUGH BANKING CHANNELS. THE ASSESSEE HAS FILED COPY OF BOTH ITS OWN BANK STATEMENT AS WELL AS OF THE PARTNERS. IT I S SEEN THAT ALL THE INVESTMENTS HAVE BEEN MADE THROUGH CHEQUE BY THE PARTNERS EXCEPT FOR A SUM OF RS.17, 75,000 PAID BY SRI SYED ANEESUDDIN ALLEGEDLY FOR STAMP DUTY. EVEN FOR THIS SUM OF RS.17,75,000, THE WITHDRAWAL OF THE EXACT AMOUNT IS REFLECTED IN HIS BANK STATEMENT. THERE IS NO DOUBT, THEREFORE, THAT ALL THE INVESTMENTS HAVE BEEN MADE EITHER THROUGH BANK INSTRUMENTS OR BY CASH WITHDRAWN FROM THE BANK ACCOUNT OF THE PARTNER CONCERNED. TO THAT EXTENT, T HE CREDITS CANNOT EVEN BE SAID TO BE 'CASH' CREDITS. 5.4 THE AO HAS ALSO HELD IN HIS ORDER THAT THE PARTNERS HAD FAILED TO ESTABLISH THE SOURCES FOR TH E INVESTMENT IN THE FIRM. WITH REGARD TO THE NON- RESIDENT PARTNERS, THE AO HELD THAT THEY HAD NOT FURNISHED ANY INFORMATION REGARDING THEIR OVERSEAS SOURCES OF INCOME. WITH REGARD TO THE RESIDENT PARTNERS, THE AO HAS REFERRED TO THE RETURNS FILED BY THESE PERSONS, WHERE RELATIVELY LOW INCOMES, NOT COMMENSURATE WITH THE LEVEL OF INVESTMENT MADE BY THEM, HAD BEEN CONSISTENTLY RETURNED. WHILE THE FAILURE OF THE ASSESSEE TO FURNISH INFORMATION ABOU T THE SOURCES OF INCOME OF THE PARTNERS MAY HAVE BEEN RELEVANT TILL THE ASSESSMENT STAGE, IT IS NO LONGER SO IN VIEW OF THE ABJECT FAILURE OF THE AO IN AVAILING OF THE OPPORTUNITY AFFORDED BY THE REMAND PROCEEDINGS TO EXAMINE THE SOURCES AND ESTABLISH THE LACK OF CREDIT WORTHINESS WITH INFORMATION AND EVIDENCE. HAVING FAILED TO EVEN EXAMINE THE ISSUE, IT IS NOT OPEN TO THE AO TO SAY THAT THE CREDITWORTHINESS HAD I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 6 NOT BEEN ESTABLISHED BY THE ASSESSEE. 5.5 EVEN OTHERWISE, THE FACT THAT ALL THE INVESTMENTS ARE REFLECTED IN THE BANK STATEMENTS OF THE PARTNER S IS AN IMPORTANT EVIDENCE IN FAVOUR OF THE ASSESSEE. IT IS SEEN FROM THE BANK STATEMENTS OF THE PARTNERS THAT ALL MAJOR CREDITS PRECEDING THE INVESTMENT IN THE FIRM IS THROUGH BANK INSTRUMENTS ONLY, AND THUS, OPEN TO VERIFICATION. THE ASSESSEE HAS ALSO FILED INFORMATI ON ABOUT THE SOURCES OF THESE CREDITS IN THEIR ACCOUNT S. IN VIEW OF THE ABOVE AND IN VIEW OF THE FACT THAT T HE ASSESSING OFFICER NOT ONLY DID NOT BRING ANY ADVERS E EVIDENCE ON RECORD BUT ALSO CHOSE TO FOREGO THE OPPORTUNITY TO EXAMINE THE CLAIMS OF THE ASSESSEE, I AM SATISFIED THAT THE ASSESSEE HAS ADEQUATELY DISCHARGED ITS ONUS TO ESTABLISH THE CREDITWORTHINE SS OF THE PARTNERS. THE ADDITION OF RS.L,97,55,362 U/S 68 IS, THEREFORE, DELETED. 7. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CONTENTION OF THE LEARNED DR IS THAT THE CIT(A) HAS NOT APPRECIATED THE REMAND REPORT SENT B Y THE ASSESSING OFFICER VIDE HIS LETTER DATED 24/06/2011 WHEREIN THE ASSESSING OFFICER OBSERVED, INTER-ALIA THAT THE ASS ESSEE HAS FAILED TO SUBMIT NECESSARY INFORMATION TO PROVE GEN UINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTNER S. ON THE OTHER HAND, THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE NECESSARY DETAILS REGARDING T HE AMOUNTS, WHICH WERE BROUGHT IN BY THE PARTNERS AND THE PARTN ERS HAVE FILED THEIR CONFIRMATION LETTERS THAT THEY HAVE MAD E INVESTMENTS TOWARDS CAPITAL AND ALSO THE LEARNED CO UNSEL SUBMITTED THAT THE TRANSACTIONS DONE THROUGH BANKIN G CHANNEL. AFTER CONSIDERING THE FACTS AND ARGUMENTS OF BOTH T HE PARTIES, WE ARE OF THE VIEW THAT FILING CONFIRMATION LETTERS FROM THE PARTNERS SHOW THE IDENTITY OF THE PARTNERS, HOWEVER , THE I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 7 ASSESSING OFFICER HAS CATEGORICALLY STATED IN THE R EMAND REPORT THAT THE ASSESSEE HAS NOT PLACED NECESSARY E VIDENCE TO ESTABLISH THE CAPACITY OF THE PARTNERS TO INVEST TH E FUNDS IN THE FIRM. THEREFORE, IN OUR CONSIDERED VIEW, THE ASSESS EE IS NOT ONLY REQUIRED TO FURNISH PAN OF THE PARTNERS BUT AL SO FURNISH OTHER DETAILS LIKE RETURNS OF INCOME, BANK ACCOUNT DETAILS OF THE PARTNERS TO PROVE THE CREDITWORTHINESS OF THE P ARTNERS. IN THIS CONNECTION WE REFER TO THE JUDGMENT OF THE HON BLE AP HIGH COURT IN THE CASE OF R.B. MITTAL VS. CIT, 246 ITR 283 WHEREIN THE COURT HELD AS FOLLOWS: SECTION 68 OF THE ACT GIVES STATUTORY RECOGNITION TO THE PRINCIPLE THAT CASH CREDITS, WHICH ARE NOT SATISFAC TORILY EXPLAINED, MAY BE ASSESSED AS INCOME. SECTION 68 SEEKS TO BRING TO TAX ANY CASH CREDITS APPEARING IN THE BOOKS OF ACCOUNTS WHICH ARE NOT SATISFACTORILY EXPL AINED AS THE INCOME OF THE PREVIOUS YEAR. JUDICIAL OPINI ON EVEN PRIOR TO THE ENACTMENT OF SECTION 68 FOR THE FIRST TIME UNDER THE INCOME-TAX ACT, 1961 WAS THAT IN THE EVENT OF CREDIT ENTRY IN THE BOOKS OF ACCOUNT THE ASSESSING OFFICER HAD T O MAKE AN ENQUIRY AND GIVE THE ASSESSEE AN OPPORTUNITY TO EXPLAIN THE CREDIT ENTRY , AND IF THE ASSESSEE DID NOT RENDER THE SATISFACTORY EXPLANATION WITH REGARD TO THE NATURE AND SOURCE O F THE CASH RECEIVED BY HIM, THEN THE ASSESSING OFFICER WA S ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPTS AR E OF AN INCOME NATURE AND SUBJECT TO CHARGE...SECTION 68 CONSTITUTES A CHARGING PROVISION WHICH APPLIES WHEN THE ASSESSEE'S EXPLANATION REGARDING A CASH CREDIT IS REJECTED AS BEING UNSATISFACTORY OR WHEN THE ASSESS EE DOES NOT RENDER ANY EXPLANATION. SECTION 68 PROVID ES THAT THE ASSESSING OFFICER MAY BRING TO CHARGE A SU M AS INCOME OF THE PREVIOUS YEAR IF (I) THE SUM IS FOUN D CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREV IOUS YEAR AND (II) THE ASSESSEE OFFERS NO EXPLANATION AB OUT THE NATURE OF SOURCE OF THAT SUM; OR (III) THE EXPL ANATION IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY, WHETHER THE SUM SO CREDITED MAY BE IN THE ASSESSEE'S NAME OR IN THE NAME OF THE THIRD PARTY. IT IS WELL ESTABLISHED BY THE DECISIONS OF THE SUPREME CO URT AND HIGH COURTS THAT THE BURDEN OF PROVING THAT A C ASH CREDIT ENTRY APPEARING IN THE ASSESSEE'S ACCOUNT BO OKS DOES NOT REPRESENT INCOME OF THE ASSESSEE IS ON THE ASSESSEE. WHERE ANY SUM IS FOUND CREDITED IN THE BO OKS OF THE ASSESSEE THE INITIAL ONUS IS ON THE ASSESSEE TO I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 8 OFFER AN EXPLANATION OF THE NATURE AND SOURCE OF C ASH CREDIT. IF THE EXPLANATION IS NOT FOUND SATISFACTOR Y OR REASONABLE , THE ASSESSING OFFICER CAN TREAT SUCH M ONEY AS THE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCE. I T IS NOT NECESSARY FOR THE ASSESSING OFFICER TO LOCATE T HE EXACT SOURCE OF THE CREDITS. THE ASSESSEE CAN PROVE THE GENUINENESS OF THE CREDITS, THE IDENTITY OF THE CRE DITOR AND HIS CREDITWORTHINESS BY ESTABLISHING SOME PLAUS IBLE EVIDENCE.THE ASSESSEE'S DUTY TO PROVE THAT AN UNEXPLAINED ENTRY IN HIS ACCOUNT BOOKS DOES NOT REPRESENT UNDISCLOSED INCOME IS NOT DISCHARGED BY MERELY SHOWING THAT THE ENTRY APPEARS IN THE ACCOUN T OF THIRD PARTY AND THAT THE PARTY IN WHOSE NAME THE AM OUNT IS CREDITED IS NOT A FICTITIOUS PARTY BUT A REAL PA RTY BUT THE ASSESSEE ALSO HAS TO PROVE FURTHER THAT THE ENTRY M ADE IN THE ACCOUNT BOOK IS A GENUINE ENTRY. IT CAN BE SAID THAT IF THE CREDITORS ARE CLOSE RELA TIVES OF THE ASSESSEE OR HIS EMPLOYEES THE BURDEN OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE CREDI TORS AND GENUINENESS OF THE TRANSACTIONS WILL BE HEAVIER IN RELATIVE TERMS THAN IN A CASE WHERE THE CREDITORS A RE THE OUTSIDERS. THEREFORE, THE CONTENTION OF THE LEARNED COUNSEL FOR THE PETITIONER THAT UNDER SECTION 68 OF THE ACT THE ASSESSEE IS NOT EXPECTED TO ESTABLISH THE CAPACITY OF THE CREDITORS TO ADVANCE MONEY AND GENUINENESS OF THE TRANSACTIONS IS NOT ACCEPTABLE T O US, AND WE HOLD THAT THE ASSESSEE IS EXPECTED TO ESTABL ISH PROOF OF IDENTITY OF HIS CREDITORS, CAPACITY OF HIS CREDITORS TO ADVANCE MONEY AND GENUINENESS OF THE TRANSACTION S IN ORDER TO DISCHARGE THE ONUS IMPOSED ON HIM UNDE R SECTION 68 OF THE ACT. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE THE O RDER OF THE CIT(A) AND REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ENTIRE ISSU E AFRESH IN LIEU OF THE SAID JUDGMENT OF THE HONBLE AP HIGH CO URT IN CASE OF RB MITTAL VS. CIT. THE ASSESSEE IS DIRECTED TO P UT-FORTH ALL THE EVIDENCES, WHICH ARE REQUIRED BY THE ASSESSING OFFICER IN SUPPORT OF ITS CLAIM. I.T.A. NO. 1869/HYD/2011 M/S SIGMA CONSTRUCTIONS ==================== 9 9. IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/11/2013 UP ON CONCLUSION OF HEARING. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 18 TH NOVEMBER, 2013 KV COPY FORWARDED TO: 1. ITO, WARD 7(1), IIND FLOOR, B BLOCK, IT TOWE RS, AC GUARDS, HYDERABAD. 2. M/S SIGMA CONSTRUCTIONS, 12-2-7/2/1, MEHDIPATNAM , HYDERABAD. 3. THE CIT(A)-VI, HYDERABAD 5. THE CIT-VI, HYDERABAD 6. THE DR, ITAT, HYDERABAD