The DCIT, Agra V. M/s Padamshree Developers Pvt. Ltd., Agra

ITA 210/AGR/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2452 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: K C AGARWAL
• Keywords: Unexplained cash credit; Loose papers; Charitable institution; Assessment record; Onus to prove; TDS; Set aside
• Section: 264; 131; 68; 69; 132; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 210 & 209/AGRA/2009 ASSTT. YEAR : 2005-06 & 2006-07 DY. C.I.T., CENTRAL CIRCLE, VS. M/S. PADAMSHREE D EVELOPERS PVT. LTD., AGRA. 18, GOPAL KUNJ, NEW AGRA. (PAN : AADCP 4343 D) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI HOMI RAJVANSH, CIT, DR FOR RESPONDENT : SHRI K.C. AGARWAL, ADVOCATE. ORDER PER BENCH : THESE TWO APPEALS RELATE TO THE SAME ASSESSEE. THE REFORE, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. I N THE ASSESSMENT YEARS 2005-06 AND 2006-07 THE REVENUE HAS TAKEN FOLLOWING EFFECTIVE GROUNDS O F APPEAL : GROUNDS FOR A.Y. 2005-06: 1. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE A DDITION OF RS.1,07,46,530/- MADE ON ACCOUNT OF UNEXPLAINED LOANS AND INTEREST THEREO N AMOUNTING TO RS.4,63,685/-, WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO. 1(I). THAT IN DOING SO, THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS)-II, AGRA HAS NOT APPRECIATED THE FACT THA T THE BURDEN OF PROOF LAY ON THE ASSESSEE TO PROVE THE IDENTITY OF THE LENDERS, THEI R CREDITWORTHINESS AND GENUINENESS OF THE LOANS RECEIVED FROM THEM, WHICH THE ASSESSEE FAILED TO DISCHARGE INSPITE OF BEING ESPECIALLY REQUIRED BY T HE AO TO DO SO. GROUNDS FOR A.Y. 2006-07: 1. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE A DDITION OF RS.35,00,000/- MADE ON ACCOUNT OF UNEXPLAINED LOANS AND DISALLOWANCE OF INTEREST AMOUNTING TO RS.905466/- ON SUCH LOANS AS WELL AS ON LOANS HELD AS UNEXPLAINED IN A.Y. 2005- 06, WITHOUT APPRECIATING THE FACTS BROUGHT ON RECOR D BY THE AO. 2 2. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE A DDITION OF RS.41,00,000/- MADE ON ACCOUNT OF UNEXPLAINED BOOKING AMOUNT WITHOUT AP PRECIATING THE FACTS BROUGHT ON RECORD BY THE AO. 2(I). THAT IN DOING SO, THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS)-II, AGRA HAS NOT APPRECIATED THE FACT THA T THE BURDEN OF PROOF LAY ON THE ASSESSEE TO PROVE THE IDENTITY OF THE PERSONS FROM WHOM RECEIPT OF ADVANCES WAS SHOWN, THEIR CREDITWORTHINESS AND GENUINENESS OF TH E BOOKING MONEY RECEIVED FROM THEM, WHICH THE ASSESSEE FAILED TO DISCHARGE I NSPITE OF BEING ESPECIALLY REQUIRED BY THE AO TO DO SO. 3. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE A DDITION OF RS.88,92,380/- BEING UNDISCLOSED INVESTMENT IN PURCHASE OF PROPERTY AT K HASARA NO.168, MAYAPUR, FATEHABAD ROAD, AGRA WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO. 3(I). THAT IN DOING SO, THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS)-II, AGRA FAILED TO APPRECIATE THAT DOCUME NTS MARKED AS LP-7, PAGE NO. 42, 44 & 45 SEIZED FROM RESIDENCE OF SHRI ANIL AGAR WAL, MAINPURI WHO IS CLOSELY ASSOCIATED WITH ASSESSEE IN THE VARIOUS PROPERTY TR ANSACTIONS CLEARLY SHOWED THAT PURCHASE PRICE WAS UNDERSTATED BY THE ASSESSEE AND THE ADDITION U/S. 69 WAS JUSTIFIED. 3(II). THAT IN DOING SO, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-II, AGRA HAS WRONGLY REFERRED TO SECTION 132(4A). THE ISSUE WAS NOT ABOUT THE OWNERSHIP OF THE PAPERS FOUND FROM THE RE SIDENCE OF SHRI ANIL KUMAR AGARWAL BUT THAT THE TRANSACTIONS NOTED THEREIN CON STITUTED INFORMATION AND EVIDENCE THAT THE PURCHASE PRICE WAS UNDERSTATED. 2. GROUND NO.1 IN BOTH THE YEARS IS COMMON RELATING TO THE ADDITION MADE U/S. 68 IN RESPECT OF LOAN TAKEN BY THE ASSESSEE. THE BRIEF FACTS RELA TING TO THIS GROUND ARE THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN UNSECURED LOAN FROM 23 PARTIES DURING THE ASSESSMENT YEAR 2005-06 AND FROM THREE PARTIES DURING THE ASSE SSMENT YEAR 2006-07, AS PER THE DETAILS GIVEN AT PAGE 1 OF THE ASSESSMENT ORDER AS WELL AS PAGE 1 OF CIT(A) ORDER. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE COMPLETE ADDRESS OF THE PERSONS FROM WHOM UNSECURED LOANS HAVE BEEN TAKEN, THEIR COPY OF ACCOUNT, COPY OF BALANCE SHEET OF THE LENDERS, THE DATE AND MODE OF RECEIPT OF LOAN, CONFIRMATIONS AND ALSO ASKED FOR T HE JUSTIFICATION OF THE LOANS IN TERMS OF IDENTITY 3 OF THE CREDITORS, THEIR CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTION. THE ASSESSEE SUBMITTED THE COPY OF THE ACCOUNT OF DEPOSITORS ALO NGWITH THEIR PERMANENT ACCOUNT NUMBERS, ADDRESSES, THEIR CONFIRMATIONS AND IN SOME CASES CO PY OF BANK STATEMENTS. THE ASSESSING OFFICER WAS NOT SATISFIED AND TREATED THE LOAN AND INTEREST THEREON AS UNEXPLAINED AND ADDED THE SAME TO THE INCOME OF ASSESSEE U/S. 68 OF THE INCOME-TAX AC T. THE AMOUNT OF LOAN AND INTEREST DISALLOWED IN THE A.Y. 2005-06 IS RS.1,07,46,530/- AND RS.4,63 ,685/- AND THE AMOUNT OF LOAN AND INTEREST IN A.Y. 2006-07 IS RS. 35,00,000/- AND RS.9,05,466/- R ESPECTIVELY. 3. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). B EFORE THE CIT(A) ALSO, THE ASSESSEE FILED ALL THE DETAILS AND POINTED OUT THAT THE LOANS WERE TAKEN FROM DIRECTORS AND SHAREHOLDERS. THE ASSESSEE HAS FURNISHED THE DETAILS OF THE DEPOSITOR S GIVING THEIR COMPLETE ADDRESSES AND PERMANENT ACCOUNT NUMBERS ALONGWITH CONFIRMATIONS, PROOF OF FILING OF THE RETURN IN THE SHAPE OF ACKNOWLEDGEMENT, COPY OF BANK ACCOUNTS AND OTHER EV IDENCES IN RESPECT OF IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS. IT WAS ALSO SUB MITTED THAT THE TDS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 194A OF THE INCOME-TAX ACT HA S BEEN DEDUCTED ON THE INTEREST PAID TO THE DEPOSITORS AND THE SAME HAS DULY BEEN DEPOSITED. OU T OF ALL THE DEPOSITORS, SOME OF THE DEPOSITORS WERE SUMMONED U/S. 131 BY THE ASSESSING OFFICER, WHO APPEARED BEFORE THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER OPTED EITHER IN NOT ENTERTAINING THEM OR NOT TO EXAMINE THEM FOR THE REASONS BEST KNOWN TO HIM. THE ADDITION WAS MADE BY THE ASSESSING OFFICER IN A SUMMARY MANNER WITHOUT APPRECIATING TH E DOCUMENTS AND EVIDENCE FILED BY THE ASSESSEE. RELIANCE WAS PLACED ON THE FOLLOWING DECI SIONS : (I). CIT VS. ORISSA CORPORATION PRIVATE LTD., 159 I TR 78 (SC) (II). DEPUTY CIT VS. ROHINI BUILDERS 256 ITR 360 (G UJ). (III). ORIENT TRADING CO. LTD. VS. CIT (1963) 49 IT R 723 (IV). NEMI CHAND KOTHARI VS. CIT, 264 ITR 254 (GAUH ATI) (V). KHANDELWAL CONSTRUCTIONS VS. CIT, 227 ITR 900 (GAU.). 4 4. THE LEARNED CIT(A) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER, WHICH WAS SUBMITTED BY THE ASSESSING OFFICER. AFTER CONSIDERI NG THE REMAND REPORT OF THE ASSESSING OFFICER AS WELL AS THE REPLY OF THE ASSESSEE ON THE REMAND REPORT, THE CIT(A) DELETED THE ADDITION FOR A.Y. 2005-06 BY OBSERVING AS UNDER : I HAVE PERUSED AND CONSIDERED THE ASSESSMENT RECOR DS, ASSESSMENT ORDER, REMAND REPORT OF THE ASSESSING OFFICER, WHEREIN HE HAS NOT SUBMITTED ANY NEW THING EXCEPT GENERAL SUBMISSIONS, REPLY OF THE APPE LLANT, LAW CITED THEREIN AND THE PAPERS SUBMITTED THEREWITH, WHICH ARE PLACED ON REC ORD. I FIND THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF LENDERS, THEIR CO MPLETE NAME AND ADDRESS, ALL ARE ASSESSED TO INCOME-TAX, AND TO SUBSTANTIATE THE IDENTITY, CREDITWORTHINESS, GENUINENESS, THE ASSESSEE HAS PLACED ON RECORD THE ACKNOWLEDGEMENT RECEIPT FOR FILING OF INCOME-TAX RETURN, PERMANENT ACCOUNT NUMB ER OF EACH CREDITOR, THEIR CONFIRMATION OF HAVING GIVEN LOAN TO THE ASSESSEE, THEIR STATEMENT OF BANK ACCOUNT AS WELL AS HAS ALSO PROVED THE SOURCE OF THE SOURCE . THE DECISION OF CIT VS. DURGA PRASAD MORE 82 ITR 540 CITED BY THE A.O. DOES NOT A PPLY TO THIS CASE AS IT HAS BEEN RENDERED ON DIFFERENT FACTS. HE HAS FURNISHED ALL THE PAPERS WHICH ARE REQUISITIONED FOR PROVING THE GENUINENESS OF THE LO ANS. I DO NOT UNDERSTAND AS TO WHAT MORE EVIDENCE COULD BE PLACED ON RECORD BY AN APPELLANT FOR PROVING THE GENUINENESS OF THE LOANS. HOWEVER, IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE GENUINENESS OF THE LOAN, HE COULD HAVE SUMMONED AND ENQUIRED THE LENDER BY VIRTUE OF POWERS VESTED IN HIM U/S. 131, FOR WHICH THE ASSESSEE SPECIFICALLY REQUESTED, AND THE SAME HAS NOT BEEN DONE. THE ASSE SSING OFFICER COULD HAVE ALSO VERIFIED THE LOANS FROM THE FILES OF INVESTIGATION WING WHERE THE STATEMENTS ON OATH OF CREDITORS HAVE BEEN CLAIMED TO HAVE BEEN RE CORDED. THE ASSESSING OFFICER HAS NOT PLACED ANY EVIDENCE ON RECORD AGAINST EVIDE NCE PLACED BY THE APPELLANT. IN THIS CASE, THE APPELLANT HAS SUBMITTED ALL THE P APERS AND DOCUMENTS, WHICH CLEARLY PROVE THE GENUINENESS OF THE LOANS. I HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY THE APPELLANT AND THE ASSESSING OFFI CER, I FIND THAT THE DECISIONS RELIED UPON BY THE ASSESSING OFFICER IS NOT APPLICA BLE TO THE FACTS OF APPELLANTS CASE. THE APPELLANTS CASE IS COVERED BY VARIOUS DE CISIONS CITED BY HIM. ON PERUSAL AND CONSIDERING ALL THE PAPERS PLACED O N RECORD, I HOLD THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING TH E LOANS RAISED BY THE ASSESSEE. I HEREBY DELETE THE SAID ADDITION OF RS.1,07,46,530/- . SINCE THE ADDITION IN RESPECT OF THE LOANS RAISED BY THE ASSESSEE HAS BEEN DELETE D, AS SUCH, THE INTEREST OF RS.4,63,685/- PAID BY THE APPELLANT THEREON, IS FUL LY ALLOWABLE. HENCE THE ENTIRE ADDITION OF RS.1,12,10,215/- (I.E. RS.1,07,46,530 + RS.4,63,685) IS HEREBY DELETED. 5. IN THE SIMILAR MANNER, THE ADDITION OF RS.35,00, 000/- ALONGWITH INTEREST OF RS.9,05,466/- WAS DELETED BY THE CIT(A) IN A.Y. 2006-07 BY OBSERV ING AS UNDER : 5 I HAVE PERUSED THE RECORDS, ASSESSMENT ORDER FOR T HIS YEAR AND THE EARLIER YEAR, APPELLANTS REPLY AND REMAND REPORT OF THE AS SESSING OFFICER, WHEREIN HE HAS NOT SUBMITTED ANY NEW THING EXCEPT GENERAL SUBM ISSIONS, REPLY OF THE APPELLANT, LAW CITED THERE IN AND THE PAPERS SUBMIT TED THEREWITH, WHICH ARE PLACED ON RECORD. I FIND THAT THE ASSESSEE HAS FURNISHED C OMPLETE DETAILS OF LENDERS, THEIR COMPLETE NAMES AND ADDRESSES, ALL ARE ASSESSED TO I NCOME-TAX AND TO SUBSTANTIATE THE IDENTITY, CREDIT WORTHINESS, GENUINENESS, THE A SSESSEE HAS PLACED ON RECORD THE ACKNOWLEDGMENT RECEIPT FOR FILING OF INCOME-TAX RET URNS, PERMANENT ACCOUNT NUMBER OF EACH CREDITOR, THEIR CONFIRMATION OF HAVI NG GIVEN LOAN TO THE APPELLANT, THEIR STATEMENT OF BANK ACCOUNT AS WELL HAS ALSO PR OVED THE SOURCE OF THE SOURCE. THE DECISION OF CIT VS. DURGA PRASAD MORE 82 ITR 54 0 CITED BY THE AO DOES NOT APPLY TO THIS CASE AS IT HAS BEEN RENDERED ON DIFFE RENT FACTS. HOWEVER, AFTER PERUSAL AND CONSIDERING ALL THE PAP ERS PLACED ON RECORD, THE ADDITION OF LOAN TO THE TUNE OF RS.1,07,46,530/ - ADDED BY THE ASSESSING OFFICER IN THE EARLIER YEARS ASSESSMENT ORDER HAS ALREADY BEEN DELETED BY ME VIDE MY APPELLATE ORDER. THE FINDINGS GIVEN IN THAT ORDER M AY ALSO BE READ HERE FOR THE PURPOSE OF REASONING. SINCE THE ADDITION IN RESPECT OF THE LOAN HAS ALREADY BEEN DELETED, I AM OF THE VIEW THAT THE ASSESSING OFFICE R IS NOT JUSTIFIED IN DISALLOWING PAYMENT OF INTEREST ON THE SAID LOANS TO THE TUNE O F RS.9,05,466/- IN THIS YEAR. KEEPING IN VIEW ALL THE RELEVANT FACTORS OF THE CAS E, LAW CITED ON THE ISSUE I HEREBY DELETE THE ADDITION OF RS.9,05,466/-. 6. THE LEARNED DR BEFORE US VEHEMENTLY CONTENDED TH AT THE ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE PARTIES FROM WHOM THE MONEY HAS BEEN RECEIVED BY HIM. ACCORDING TO HIM, SOME OF THE CREDITORS HAVE DEPOSITED CASH IN T HEIR ACCOUNTS PRIOR TO THE ISSUE OF CHEQUES TO THE ASSESSEE. THE ONUS IS ON THE ASSESSEE TO PROVE THE CASH CREDIT TO THE SATISFACTION OF THE ASSESSING OFFICER. HE RELIED ON THE ORDER OF THE AS SESSING OFFICER IN RESPECT OF EACH OF THE CASH CREDITOR. HE SPECIFICALLY REFERRED TO THE AMOUNT RE CEIVED FROM SHRI ROHIT BANSAL AND POINTED OUT THAT HE HAS DEPOSITED CASH OF RS.2,00,000/- ON 13.1 0.2004, WHICH WAS ULTIMATELY TRANSFERRED AS LOAN TO THE ACCOUNT OF THE ASSESSEE. IN HIS ACCOUNT , THE AMOUNT OF RS.2,00,000/- WAS NEVER AVAILABLE EXCEPT BY DEPOSIT OF CASH. SIMILAR POSITI ON WAS EXPLAINED IN RESPECT OF USHA BANSAL WHERE THE CASH OF RS.1,90,000/- WAS DEPOSITED ON 01 .11.2004. REFERRING TO THE CREDITOR MR. DINESH CHAND, IT WAS POINTED OUT THAT IN HIS BANK A CCOUNT, CASH OF RS.1,00,000/- AND 3,01,100/- WERE DEPOSITED ON 18.10.2004 AND 29.10.2004, OUT OF WHICH RS.3,00,000/- WERE TRANSFERRED TO THE ASSESSEE ON 04.11.2004. THE BALANCE IN THE ACCOUNT NEVER EXCEEDED TO RS.10,000/-. SIMILARLY, IN 6 THE CASE OF MR. GHANSHYAM DAS, IT WAS POINTED OUT T HAT CASH OF RS.3,01,000/- WAS DEPOSITED ON 29.10.2004 IN HIS BANK ACCOUNT, OUT OF WHICH A SUM OF RS.3,00,000/- WAS GIVEN TO THE ASSESSEE THROUGH CHEQUE. IN THE CASE OF VIKAS BOOK DEPOT, CA SH OF RS.10,00,000/- WAS DEPOSITED ON 17.09.2004 AND ON 18.09.2004, THE SAME WAS TRANSFER RED TO THE ASSESSEE AS LOAN THROUGH CHEQUE. SIMILAR WAS THE POSITION IN THE CASE OF VANDANA AGA RWAL, MATHURA IN WHOSE BANK ACCOUNT, A SUM OF RS.4,00,000/- WAS DEPOSITED ON 01.11.2004 AND ON 04.11.2004, THE ASSESSEE HAS RECEIVED LOAN THROUGH CHEQUE. SIMILAR WAS THE POSITION IN THE CAS E OF PRAVEEN KUMAR SINGHAL, RADHA SHARMA, ANURADHA SINGHAL, JAGDISH PRASAD BANSAL, SUBHASH CH AND MAHESHWARI AND OTHER CREDITORS. RELIANCE WAS PLACED ON THE DECISION OF SUMATI DAYAL VS. CIT, 214 ITR 801 (SC), CIT VS. DIVINE LEASING & FINANCE LTD. AND OTHERS, 299 ITR 268 (DEL .) AND CIT VS. P. MOHANKALA 291 ITR 278 (SC). THE ASSESSING OFFICER SUMMONED THE CREDITORS U/S. 131. SOME OF THEM APPEARED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER IN THE ABS ENCE OF NON-APPEARANCE OF OTHER CREDITORS COULD NOT MAKE PROPER ENQUIRY AND, THEREFORE, THE M ATTER MAY BE SET ASIDE AND RESTORED TO THE FILE OF THE ASSESSING OFFICER. 7. THE LEARNED AR, ON THE OTHER HAND, VEHEMENTLY CO NTENDED THAT THE ASSESSEE HAS SUBMITTED EVIDENCE IN RESPECT OF EACH OF THE CREDITORS GIVING HIS NAME, COMPLETE ADDRESS, PERMANENT ACCOUNT NUMBER, CONFIRMATIONS, PROOF OF FILING OF I NCOME-TAX RETURN IN THE SHAPE OF ACKNOWLEDGEMENT, COPY OF BANK ACCOUNT AND OTHER EVI DENCES TO PROVE THE IDENTITY AND CREDITWORTHINESS OF CREDITORS AND GENUINENESS OF TH E TRANSACTIONS. THE ASSESSEE HAS DEDUCTED TDS ON THE INTEREST PAID TO THESE DEPOSITORS IN ACC ORDANCE WITH THE PROVISIONS OF SECTION 194A OF THE ACT. THE ASSESSEE HAS, THUS, DULY DISCHARGED HI S ONUS. THE ASSESSEE HAD REQUESTED THE ASSESSING OFFICER THAT IN CASE HE IS NOT SATISFIED, HE MAY SUMMON THE PARTIES U/S. 131. RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION 7 PVT. LIMITED, 159 ITR 78 (SC). IT WAS ALSO POINTED OUT THAT THE ASSESSEE IS NOT SUPPOSED TO PROVE THE SOURCE OF SOURCES. IN THIS REGARD RELIANCE WAS PLACED ON THE DECISION OF DCIT VS. ROHINI BUILDERS, 256 ITR 360 (GUJ). OUR ATTENTION WAS DRAW N TOWARDS THE PAPERS FILED BEFORE THE ASSESSING OFFICER ALONGWITH CHART APPEARING AT PAGE 13 OF THE PAPER BOOK SO FAR IT RELATE TO THE ASSESSMENT YEAR 2005-06 AND AT PAGE 10 SO FAR IT RE LATES TO ASSESSMENT YEAR 2006-07. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE ALLAHABA D HIGH COURT IN THE CASE OF CIT VS. JOHRI MAL GOYAL, 147 TAXMAN 448 (ALL.) AND IT WAS VEHEMEN TLY CONTENDED THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DECISION OF JURISDICTIONAL H IGH COURT. IN THIS CASE, THE JURISDICTIONAL HIGH COURT HAS HELD THAT WHEN THE AMOUNT IS FOUND DEPOSI TED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE ONLY THEN SECTION 68 APPLIES AND NOT WHEN THE AMOUN T IS FOUND DEPOSITED IN THE BOOKS OF THIRD PARTY. THE ASSESSEE CANNOT BE ASKED TO PROVE THE SO URCE OF SOURCES OR THE ORIGIN OF THE DEPOSITS. REFERRING TO THE DECISIONS RELIED BY THE LEARNED DR , IT WAS POINTED OUT THAT THE DECISION IN THE CASE OF SAMATI DAYAL (SUPRA) IS NOT APPLICABLE TO T HE FATS OF THE CASE AS IT DOES NOT RELATE TO THE ADDITION MADE U/S. 68, BUT IT RELATES TO THE INCOME SHOWN BY THE ASSESSEE. RELATING TO THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. DIVINE L EASING AND FINANCE LTD.(SUPRA), IT WAS POINTED OUT THAT THIS DECISION RELATES TO THE APPLI CABILITY OF SECTION 68 IN CASE OF SHARE CAPITAL RECEIVED BY THE COMPANY. IN THIS CASE, THE HONBLE HIGH COURT HAS LAID DOWN THAT NO ADVERSE INFERENCE IS TO BE DRAWN IF THE SHARE HOLDER FAILED TO RESPOND THE NOTICE ISSUED BY THE ASSESSING OFFICER. IT IS THE DUTY OF THE ASSESSING OFFICER TO INVESTIGATE THE CREDITWORTHINESS OF THE SHARE HOLDER. THUS, IT WAS CONTENDED THAT THIS DECISION, IN FACT, SUPPORTS THE CASE OF THE ASSESSEE. REFERRING TO THE DECISION IN THE CASE OF CIT VS. P. MOHANKALA (SUPRA), IT WAS POINTED OUT THAT THE HONBLE SUPREME COURT IN THAT CASE CLEARLY LAID DOW N THAT ON THE EXPLANATION OF THE ASSESSEE THE ASSESSING OFFICER SHOULD FORM THE OPINION OBJECTIVE LY ON PROPER APPRECIATION OF THE MATERIAL. EVEN IF THE EXPLANATION OF THE ASSESSEE IS NOT SATI SFACTORY, THE MATERIAL CANNOT LEAD TO CONCLUSION 8 THAT THE RECEIPT IS OF THE INCOME NATURE. THE BURDE N IS ON THE ASSESSEE TO PROVE THE CASH CREDIT. THE ASSESSEE HAS DULY DISCHARGED HIS BURDEN BY ADDU CING ALL THE EVIDENCES. OUR ATTENTION WAS DRAWN TO PAGE 184 OF THE PAPER BOOK AND IT WAS POIN TED OUT THAT THE ASSESSEE VIDE HIS LETTER DATED 26.11.2007 HAS SPECIFICALLY ASKED THE ASSESSING OFF ICER THAT IN CASE THE ASSESSING OFFICER HAS ANY DOUBT, HE MAY SUMMON THE DEPOSITORS U/S. 131 OF THE INCOME-TAX ACT. IN CASE, THE ASSESSING OFFICER FAILED TO SUMMON THE CREDITORS, THE ADDITIO N CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. THE CIT(A) HAS DULY ASKED FOR THE REMAND REPORT FRO M THE ASSESSING OFFICER AND IN THE REMAND REPORT, THE ASSESSING OFFICER HAS ACCEPTED THAT ALL THESE EVIDENCES WERE FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NO FRESH MATERIAL OR EVIDENCE IS FILED. RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISIONS : I) KALYAN MEMORIAL & CHARITABLE TRUST VS. ACIT 124 TTJ 883 II) CIT VS. DAYA CHAND JAIN VAIDYA (1975) 98 ITR 280 (A LL.) III) DCIT VS. ROHINI BULDERS 256 ITR 360 (GUJ.) IV) NEMI CHAND KOTHARI VS. CIT, 264 ITR 254 V) CIT VS. DAULAT RAM RAWATMULL, 87 ITR 349 (SC) VI) CIT VS. REAL TIME MARKETING P. LTD., 306 ITR 35 (DE L.) VII) CIT VS. LAUL TRANSPORT CORPORATION, 180 TAXMAN 185 (P&H) VIII) CIT VS. JOHRI MAL GOYAL, 147 TAXMAN 448 (ALL.) IX) CIT VS. ASHOK KUMAR KAKKAR HUF 171 TAXMAN 354 (DEL. ) X) NATHU RAM PREM CHAND VS. CIT, 49 ITR 561 (DEL.). 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH VARIOUS CASE LAWS CITED BEFORE US FROM BOTH THE SIDES. THIS IS THE FA CT ON RECORD THAT THE ASSESSEE HAS SUBMITTED THE NAMES, ADDRESSES, PERMANENT ACCOUNT NUMBERS, CONFIR MATIONS, PROOF FOR FILING OF RETURN ALONGWITH COPY OF BANK ACCOUNTS OF VARIOUS PARTIES FROM WHOM THE LOAN HAS BEEN RECEIVED BY THE ASSESSEE DURING THE YEAR. THE ASSESSEE HAS ALSO PAI D INTEREST, ON WHICH THE TDS HAS BEEN DEDUCTED IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 194A OF THE INCOME TAX ACT. WHEN THE 9 ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE C ASH CREDIT, THE ASSESSEE HAS SUBMITTED ALL THESE EVIDENCES. EVEN THE ASSESSING OFFICER HAS SPECIFICA LLY REQUESTED THE ASSESSEE TO ISSUE SUMMON U/S. 131 IN CASE THE ASSESSEE IS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. EVEN THOUGH, THE DEPOSITORS WERE EXAMINED BY THE DEPARTMENT, I.E ., ADI (INV.) IMMEDIATELY AFTER THE SEARCH AND THE DEPOSITORS HAVE CONFIRMED AND OWNED THE DEP OSITS MADE WITH THE ASSESSEE. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLAN ATION OF THE ASSESSEE, WHO MADE THE ADDITION MERELY ON THE BASIS THAT THE ASSESSEE COULD NOT PRO VE THE SOURCE OF THE DEPOSITORS. NOW, THE QUESTION ARISES WHETHER UNDER THE FACTS AND CIRCUMS TANCES OF THIS CASE, THE ADDITION CAN BE SUSTAINED IN THE CASE OF THE ASSESSEE MERELY ON THE BASIS THAT THE ASSESSEE COULD NOT PROVE THE SOURCE OF SOURCES. IN ORDER TO APPRECIATE THE CONTR OVERSY, IT WOULD BE APPROPRIATE TO REPRODUCE THE PROVISIONS OF SECTION 68 OF THE ACT HEREIN BELO W: 68. CASH CREDITS WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 9. BEFORE CHARGING THE CREDIT AS THE INCOME OF THE ASSESSEE, THE AO HAS TO FORM AN OPINION. THIS OPINION IS SUBJECTIVE, BUT IT HAS TO BE JUDICI OUS AND BASED ON MATERIAL ON RECORD. AN OPINION IS AN INFERENCE OF FACTS FROM OBSERVED FACTS. IT I S NOT AN IMPRESSION. IT IS A CONVICTION BASED ON APPRAISAL OF EVIDENCE ON RECORD. IN V.L.S. FINANCE LTD. V CIT (2000) 246 ITR 707, THE HONBLE DELHI HIGH COURT OBSERVED AS UNDER: OPINION MEANS SOMETHING MORE THAN MORE RETAILIN G OF GOSSIP OR HEARSAY; IT MEANS JUDGMENT OR BELIEF, THAT IS, A BELIEF OR A CO NVICTION RESULTING FROM WHAT ONE THINKS ON A PARTICULAR QUESTION. IT MEANS: JUDGMENT OR BELIEF BASED ON GROUNDS SHORT OF PROOF. IF A MAN IS TO FORM AN OPINION AND HIS OPINION IS TO GOVERN, HE MUST FORM IT HIMSELF ON SUCH REASONS AND GROUNDS AS SEEM GOOD TO HIM. 10 THUS, BEFORE THE AO FORMS AN OPINION, HE MUST CONSI DER THE MATERIAL BEFORE HIM. HE HAS BEFORE HIM THE MATERIAL SUBMITTED BY THE ASSESSEE WHILE GI VING AN EXPLANATION, THEN HE MUST COLLECT HIS OWN MATERIAL AS AN ENQUIRY OFFICER, WEIGH THE TWO M ATERIALS AND AS A QUASI-JUDICIAL AUTHORITY FORM AN OPINION AS TO WHETHER EXPLANATION FURNISHED BY THE ASSESSEE IS SATISFACTORY OR NOT. IF THE AO DOES NOT APPLY HIS MIND IN EXAMINING THE DOCUMEN TS FURNISHED BY THE ASSESSEE AND DOES NOT FIND ANY SUBSTANTIVE ERROR IN THEM NOR HE COLLECTS ANY MATERIAL BY EXERCISING POWERS UNDER INCOME-TAX ACT, THEN THE CLAIM OF THE ASSESSEE CAN NOT BE STRAIGHTWAY REJECTED. IF HE DOES, IT WOULD BE A VIOLATION OF PRINCIPLES OF NATURAL JUSTI CE AND PROVISIONS OF SECTION 68. 10. THE EXPRESSION THE ASSESSEE OFFERS NO EXPLANAT ION MEANS WHERE THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABLE EXPLANATION AS RE GARDS THE SUM FOUND CREDITED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE OPINION OF THE AO FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFACTORY MUST BE BASED ON PROPER APPRECIATION OF THE MATERIAL AND OTHER SURROUNDING CIRCUMSTANCES AVAILABLE ON RE CORD. THE OPINION OF THE AO IS TO BE BASED ON APPRECIATION OF THE MATERIAL ON RECORD. 11. THE WORD MAY USED IN SECTION 68 PROVIDES DISC RETION TO THE AO. IN GENERAL THE WORD MAY IS AN AUXILIARY VERB CLARIFYING THE MEANING O F ANOTHER VERB OF EXPRESSING AN ABILITY, CONTINGENCY, POSSIBILITY OR PROBABILITY. WHEN USED IN A STATUTE IN ITS ORDINARY SENSE THE WORD IS PERMISSIVE AND NOT MANDATORY. BUT WHERE CERTAIN CON DITIONS ARE PROVIDED IN THE STATUTE AND ON THE FULFILLMENT THEREOF A DUTY IS CAST ON THE AUTHO RITY CONCERNED TO TAKE AN ACTION, THEN ON FULFILLMENT OF THOSE CONDITIONS THE WORD MAY TAKE THE CHARACTER OF SHALL AND THEN IT BECOMES MANDATORY. IN SECTION 68, WE FIND THAT THERE ARE N O SUCH CONDITIONS ON THE FULFILLMENT OF WHICH THE AO IS DUTY BOUND TO MAKE THE ADDITION. THE WORD MAY DENOTES THE DISCRETION OF THE AO THAT HE CAN MAKE AN ADDITION OR CANNOT MAKE AN ADDI TION. THE HON'BLE SUPREME COURT IN THE CASE 11 OF CIT V SMT. P K NOORJAHAN 237 ITR 570 (SC) WHILE DEALING WITH THE WORD MAY IN SECTION 69 OBSERVED, AS UNDER: 'IN THE CORRESPONDING CLAUSE OF THE BILL WHICH WAS INTRODUCED IN PARLIAMENT, WHILE INSERTING SECTION 69 IN THE INCOME-TAX ACT, 1 961, THE WORD 'SHALL' HAD BEEN USED BUT DURING THE COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMITTEE, THE SAID WO RD WAS SUBSTITUTED BY THE WORD 'MAY'. THIS CLEARLY INDICATES THAT THE INTENTI ON OF PARLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON THE INCOME -TAX OFFICER IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEE N SATISFACTORILY EXPLAINED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE AND THE INCOME-TAX OFFICER IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOM E IN EVERY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. THE QUESTION WHETHER THE SOURCE OF THE INVESTMENT SHOULD BE TREA TED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER WORDS, A DISCRETION HAS BEEN CONFERRED ON THE INCOM E-TAX OFFICER UNDER SECTION 69 OF THE ACT TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSESSEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SA TISFACTORY AND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE.' 12. IN THE INSTANT CASE, WE NOTED THAT THE ASSESSEE HAS SUBMITTED THE NAMES, ADDRESSES, CONFIRMATIONS, PERMANENT ACCOUNT NUMBERS, PROOF OF FILING THE RETURN BY EACH OF THE CREDITORS AS WELL AS XEROX COPY OF THE BANK ACCOUNT OF THE LENDE RS. THE ASSESSING OFFICER NOTED THAT IN MOST OF THE CASES, THE LENDER HAS DEPOSITED THE CASH IN THEIR RESPECTIVE ACCOUNTS BEFORE ADVANCING MONEY TO THE ASSESSEE AND ON THAT BASIS, HE TOOK TH E VIEW THAT THE ASSESSEE COULD NOT PROVE THE CASH CREDITS AND FOR THAT THE RELIANCE WAS PLACED B Y THE LD. DR MAINLY ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT ( SUPRA). WE HAVE GONE THROUGH THIS DECISION AND WE NOTED THAT IN THIS CASE, THE HONBLE SUPREME COURT HAS HELD THAT IN VIEW OF SECTION 68 OF THE INCOME-TAX ACT, 1961, WHERE ANY SUM IS FOUND CR EDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR IT MAY BE CHARGED TO INCOME-TAX AS TH E INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT TH E NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH A CASE THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE 12 ASSESSEE, VIZ., THE RECEIPT OF MONEY, AND IF HE FAI LS TO REBUT THE SAID EVIDENCE, IT CAN BE USED AGAINST HIM BY HOLDING THAT IT WAS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE DEPARTMENT CANNOT, HOWEVER, ACT UNREASONABLY. IN THIS CASE, DURING THE ASSESSMENT YEAR 1971-72, THE ASSESSEE CL AIMED THAT SHE RECEIVED A TOTAL AMOUNT OF RS.3,11,831/- BY WAY OF RACE WINNINGS IN JACKPOTS A ND TREBLE EVENTS IN RACES AT TURF CLUBS IN BANGALORE, MADRAS AND HYDERABAD. THE SAID AMOUNT WA S SHOWN BY THE ASSESSEE IN THE CAPITAL ACCOUNT IN HER BOOKS. FOR THE ASSESSMENT YEAR 1972- 73, SHE CLAIMED RECEIPTS OF RS.93500/- AS RACE WINNINGS IN TWO JACKPOTS AT BANGALORE AND MADR AS AND THE SAID AMOUNT WAS CREDITED IN THE CAPITAL ACCOUNT IN THE BOOKS. THE ASSESSING OFFICER INCLUDED THESE AMOUNTS AS INCOME FROM OTHER SOURCES AND ASSESSED THEM. THE AAC CONFIRMED THE ADDITION. THE MATTER WENT TO SETTLEMENT COMMISSION WHO BY A MAJORITY HELD THAT T HE EXPLANATION OF THE ASSESSEE WAS NOT GENUINE DUE TO THE REASONS (I) THAT THE ASSESSEES KNOWLEDGE OF RACING WAS VERY MEAGER, (II) THAT A JACKPOT IS A STAKE OF FIVE EVENTS IN A SINGLE DAY A ND ONE CAN BELIEVE A REGULAR AND EXPERIENCED PUNTER CLEARING A JACKPOT OCCASIONALLY BUT THE CLAI M OF THE ASSESSEE OF HAVING WON A NUMBER OF JACKPOTS IN THREE OR FOUR SEASONS NOT MERELY AT ONE PLACE BUT AT THREE DIFFERENT CENTRES, NAMELY MADRAS, BANGALORE AND HYDERABAD APPEARED, PRIM FACI E, TO BE WILD AND CONTRARY TO STATISTICAL THEORIES AND EXPERIENCE OF FREQUENCIES AND PROBABIL ITIES, (III) THE ASSESSEES BOOKS DID NOT SHOW ANY DRAWINGS ON RACE DAYS OR ON THE IMMEDIATELY REC EDING DAYS FOR THE PURCHASE OF JACKPOT COMBINATION TICKETS, WHICH ENTAILED SIZABLE AMOUNTS VARYING GENERALLY BETWEEN RS.2,000/- AND RS.3,000/-, (IV) THE ASSESSEES CAPITAL ACCOUNT WAS CREDITED WITH THE GROSS AMOUNT WITHOUT SHOWING ANY EXPENSES AND PURCHASES OF TICKETS OR FO R LOSSES, (V) IN VIEW OF THE EXCEPTIONAL LUCK CLAIMED TO HAVE BEEN ENJOYED BY THE ASSESSEE, HER L OSS OF INTEREST IN RACES FROM 1972 WAS VERY SIGNIFICANT. THE SETTLEMENT COMMISSION TOOK THE VIE W THAT ONE WOULD NOT LOSE INTEREST IN RACE FROM 1972 AND INCOME YIELDING ACTIVITIES MERELY BEC AUSE THE INCOME FROM THAT SOURCE BECOMES 13 CHARGEABLE TO TAX. WHEN THE MATTER WENT BEFORE THE SUPREME COURT, IT DISMISSED THE APPEAL OF THE ASSESSEE. FROM THE FACTS OF THIS CASE, IT IS APPARE NT THAT THIS CASE DOES NOT RELATE TO THE CASE WHERE THE ASSESSEE HAS TAKEN LOAN FROM ANY PARTIES BUT IT IS A CASE WHERE THE ASSESSEE HIMSELF HAS SHOWN THE INCOME FROM A PARTICULAR SOURCE AND INCOME SHOW N BY THE ASSESSEE WAS NOT FOUND TO BE GENUINE. THIS CASE, IN OUR OPINION, WILL NOT ASSIST THE REVENUE. 13. THE LEARNED DR ALSO RELIED ON THE DECISION OF T HE SUPREME COURT IN THE CASE OF CIT VS. P. MOHANKALA (SUPRA). WE HAVE GONE THROUGH THIS DECISI ON. WE NOTED FROM THIS DECISION THAT THIS DECISION SPEAKS OF THAT IN THE CASE OF SECTION 68, THE BURDEN IS ON THE ASSESSEE TO PROVE THE CASH CREDITS. THIS FACT, IN OUR OPINION, IS NOT DENIED. THE BURDEN IS ON THE ASSESSEE TO PROVE THE CASH CREDIT BY ADDUCING THE EVIDENCE ABOUT THE NATURE AN D SOURCES OF THE CASH CREDIT. THIS JUDGMENT ALSO STATES THAT ONCE THE ASSESSEE OFFERED THE EXPL ANATION, THE OPINION OF THE ASSESSING OFFICER OF NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESS EE AS NOT SATISFACTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTEND ING CIRCUMSTANCES AVAILABLE ON RECORD. THE OPINION OF THE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL ON RECORD. THE APPLICATION OF MIND IS SINE QUA NON FOR FORMING THE OPINION. THE ASSESSEE IN THE CASE BEFORE US HAS SUBMITTED ALL THE EVIDENC ES WHAT CAN BE EXPECTED FROM THE PERSON UNDER THESE FACTS. THEREFORE, ON THE FACTS, THIS DECISION , IN OUR OPINION, WILL NOT ASSIST THE REVENUE. 14. WE HAVE ALSO GONE THROUGH THE DECISION IN THE C ASE OF CIT VS. DIVINE LEASING AND FINANCE LTD. AND OTHERS (SUPRA). THIS DECISION, IN OUR OPINION, WILL ALSO NOT BE APPLICABLE TO THE FACTS OF THE CASE BEFORE US, RATHER, WE ARE OF THE OPINION THAT THIS DECISION WILL HELP THE ASSESSEE. THIS DECISION CLEARLY STATES THAT IT IS THE DUTY OF THE ASSESSING OFFICER TO INVESTIGATE THE CREDITWORTHINESS OF THE SHARE HOLDERS AND IN CASE S HARE HOLDERS FAIL TO RESPOND TO THE NOTICE ISSUED 14 BY THE ASSESSING OFFICER, THE ASSESSING OFFICER SHO ULD NOT TAKE AN ADVERSE INFERENCE ON THE BASIS OF THE NON-RESPONSE OF THE NOTICE. THE FACTS OF THE CASE BEFORE US ARE SIMILAR TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LIMITED (SUPRA). IN THIS CASE, THE INCOME-TAX OFFICER DID NOT ACCEPT THE ASS ESSEES ACCOUNTS SHOWING CASH CREDITS WHICH WERE SHOWN TO HAVE BEEN RECEIVED BY WAY OF LOANS FR OM THREE INDIVIDUAL CREDITORS. THE INCOME- TAX OFFICER TREATED THE ENTIRE AMOUNT AS UNPROVED C ASH CREDIT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE TRIBUNAL TOOK THE V IEW THAT THE ASSESSEE COULD NOT PRODUCE THOSE PERSONS ALLEGED TO BE CREDITORS, BUT IT DID NOT FOL LOW AUTOMATICALLY THAT AN ADVERSE INFERENCE SHOULD BE DRAWN THAT THE AMOUNT REPRESENTED UNDISCL OSED INCOME OF THE ASSESSEE. THE CREDITORS THEMSELVES WERE INCOME-TAX ASSESSEES. IN THESE CIRC UMSTANCES, THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAD DISCHARGED THE BUR DEN THAT LAY ON HIM. IN THESE CIRCUMSTANCES, THE HONBLE COURT HELD THAT THE TRIBUNALS CONCLUSI ON WAS NOT UNREASONABLE OR PERVERSE. THIS DECISION OF HONBLE SUPREME COURT IS FOUND APPLICAB LE TO THE CASE BEFORE US. 15. IN THE CASE OF DCIT VS. ROHINI BUILDERS 256 ITR 360 (GUJ.), THE FACTS ARE THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE H AD TAKEN LOANS FROM VARIOUS PARTIES AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE HAD FURNISHED THE LOAN CONFIRMATIONS GIVING FULL ADDRESSES, GIR NUMBERS/PERMANENT ACCOUN T NUMBERS ETC. OF ALL THE DEPOSITORS. THE ASSESSING OFFICER ISSUED SUMMONS TO SOME OF THE CRE DITORS AND ALSO CONDUCTED INQUIRIES INTO THE GENUINENESS OR OTHERWISE OF THE LOANS TAKEN BY THE ASSESSEE. ULTIMATELY, THE ASSESSING OFFICER MADE AN ADDITION OF RS.12,85,000/- TO THE RETURNED INCOME OF THE ASSESSEE, WHICH WAS CONFIRMED BY THE CIT(A). ON FURTHER APPEAL, THE TRIBUNAL HELD THAT THE PHRASEOLOGY OF SECTION 68 OF THE ACT WAS CLEAR THAT THE LEGISLATURE HAS LAID DOWN THAT I N THE ABSENCE OF A SATISFACTORY EXPLANATION, THE UNEXPLAINED CASH CREDIT MAY BE CHARGED TO INCOME-TA X AS THE INCOME OF THE ASSESSEE OF THAT 15 PREVIOUS YEAR, THAT THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS SHALL BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEARS, THAT THE UNSATISFACTORINESS OF THE EXPLANATION DOES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS INCOME OF THE ASSESSEE. THE TRIBUNAL FOUND THAT THE ASSESSEE HAD DISCHARGED THE INITIAL ONUS WHICH LAY ON IT IN TERMS OF SECTION 68 BY PROV ING THE IDENTITY OF THE CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, GIR NUMBERS/PERMANENT ACCOUNT N UMBERS AND THE COPIES OF ASSESSMENT ORDERS WHEREVER READILY AVAILABLE, THAT IT HAD ALSO PROVED THE CAPACITY OF THE CREDITORS BY SHOWING THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY A CCOUNT PAYEE CHEQUES DRAWN FROM BANK ACCOUNTS OF THE CREDITORS AND THE ASSESSEE WAS NOT EXPECTED TO PROVE THE GENUINENESS OF THE CASH DEPOSITED IN THE BANK ACCOUNTS OF THOSE CREDITORS B ECAUSE UNDER LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF THE CREDITS IN ITS BOOKS OF ACC OUNT BUT NOT THE SOURCE OF THE SOURCE. THUS, TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND, IN PARTICULAR THE FACT THAT THE ASSESSING OFFICER HAD NOT DISALLO WED THE INTEREST CLAIMED/PAID IN RELATION TO THESE CREDITS IN THE ASSESSMENT YEAR UNDER CONSIDER ATION OR EVEN IN THE SUBSEQUENT YEARS, AND TAX HAD BEEN DEDUCTED AT SOURCE OUT OF THE INTEREST PAI D/CREDITED TO THE CREDITORS, THE TRIBUNAL HELD THAT THE DEPARTMENTAL AUTHORITIES WERE NOT JUSTIFIE D IN MAKING THE ADDITION OF RS.12,85,000/-. THE HONBLE HIGH COURT DISMISSED THE APPEAL OF THE DEPA RTMENT. HONBLE SUPREME COURT ALSO DISMISSED THE SPECIAL LEAVE PETITION. THIS DECISION CLEARLY LAYS DOWN THE PROPOSITION THAT THE ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF SOU RCE. THE ASSESSEE CAN BE ASKED ONLY TO PROVE THE SOURCE OF THE CREDIT. THIS DECISION, IN OUR OPI NION, IS CLEARLY APPLICABLE TO THE FACTS OF THE CAS E BEFORE US. THE ASSESSEE IN THE CASE BEFORE US HAS D ULY DISCHARGED HIS ONUS BY FILING THE CONFIRMATION, ADDRESS, PERMANENT ACCOUNT NUMBER AND THE COPY OF BANK ACCOUNT OF THE CREDITOR, COPIES OF ACKNOWLEDGEMENT FOR FILING THE RETURNS OF INCOME ETC. 16 16. WE HAVE ALSO GONE THROUGH THE DECISION IN THE C ASE OF CIT VS. JOHRIMAL GOEL, 147 TAXMAN 448 (ALL.) IN THIS CASE, THE ASSESSING OFFIC ER FOUND TWO DEPOSITS IN THE BOOKS OF ACCOUNT OF ASSESSEE IN THE NAME OF HIS DAUGHTERS. THE ASSES SING OFFICER ASKED THE ASSESSEE TO EXPLAIN THESE DEPOSITS. THE ASSESSEE EXPLAINED THAT THE AMO UNTS WERE PAID BY THE TWO LADIES THROUGH CHEQUE AND THAT BOTH OF THEM HAD BEEN ASSESSED TO T AX UNDER THE AMNESTY SCHEME. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD INTRODUCED HIS BLACK MONEY BY FILING VOLUNTARY RETURNS OF HIS DAUGHTERS AND, THEREFORE, ADDED THE AMOUNTS AS HIS INCOME UNDER SECTION 68. THE CIT(A) TOOK THE VIEW THAT THE TWO LADIES CR EDITED THE AMOUNT IN THEIR BANK ACCOUNT IN MARCH, 1986. THEREFORE, IF THE ASSESSING OFFICER WA S OF THE VIEW THAT THE LADIES DID NOT HAVE ANY INDEPENDENT SOURCE OF INCOME AND THE TWO BANK ACCOU NTS ACTUALLY BELONGED TO THE ASSESSEE THEN PROPER COURSE FOR THE ASSESSING OFFICER WAS TO ADD ENTIRE AMOUNTS OF DEPOSITS IN THEIR BANK ACCOUNTS IN THE HANDS OF THE ASSESSEE AND THE PROVI SIONS OF SECTION 69 WOULD HAVE BEEN ATTRACTED AND THE CORRECT ASSESSMENT YEAR WOULD HAVE BEEN 198 6-87 AND NOT THE RELEVANT ASSESSMENT YEAR 1987-88. THE TRIBUNAL CONFIRMED THE ORDER OF CIT(A) . WHEN THE MATTER WENT BEFORE THE HIGH COURT, THE HIGH COURT HELD AS UNDER :- UNDER SECTION 68 IF ANY SUM IS FOUND CREDITED IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THERE FORE, WHAT HAS TO BE ENQUIRED INTO BY THE ASSESSING AUTHORITY IS ABOUT THE NATURE AND SOURCE OF THE DEPOSIT. IF THE EXPLANATION WITH REGARD TO NATURE AND SOURCE IS FOU ND UNSATISFACTORY, ONLY THEN THE AMOUNT SO CREDITED MAY BE TREATED AS INCOME. IN THE INSTANT CASE, THE ASSESSEE OFFERED THE EXPLANATION BOTH ABOUT THE NATURE AND S OURCE OF THE MONEY. IT WAS EXPLAINED THAT THE MONEY WAS DEPOSITED BY THE TWO L ADIES, WHICH THEY HAD DEPOSITED AFTER WITHDRAWING FROM THEIR BANK ACCOUNT . THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAD FOUND THAT THE ASSES SEE HAD DISCHARGED HIS BURDEN IN PROVING THE SOURCE OF THE MONEY, WHICH HAD FLEW FROM THE BANK ACCOUNT. IT WAS FURTHER HELD THAT IN ADDITION TO THE SOURCE OF MONE Y FROM THE BANK ACCOUNT, BOTH THE LADIES WERE THE INCOME-TAX ASSESSEES AND ASSESS ED TO TAX UNDER THE AMNESTY SCHEME AND THE AMOUNT DEPOSITED IN THEIR BANK ACCOU NT WAS AS A RESULT OF THEIR DISCLOSURE OF INCOME UNDER THE AMNESTY SCHEME. THE COMMISSIONER (APPEALS) 17 AND THE TRIBUNAL FOUND THE EXPLANATION SATISFACTORY AND, ACCORDINGLY, DELETED THE ADDITION. IT WAS NOT A CASE WHERE THE ASSESSEE CLAIMED ANY IMMUNITY FROM TAX ON ACCOUNT OF THE DISCLOSURE OF INCOME BY THE TWO L ADIES. IT WAS A CASE WHERE THE ASSESSEE WAS ASKED TO EXPLAIN THE DEPOSITS IN HIS B OOKS OF ACCOUNT ABOUT THE NATURE AND SOURCE, WHICH THE ASSESSEE HAD EXPLAINED . THE ASSESSING AUTHORITY HAD NOT ACCEPTED THE EXPLANATION BUT THE COMMISSIONER(A PPEALS) AND THE TRIBUNAL HAD ACCEPTED THE EXPLANATION. THE FINDING OF THE TR IBUNAL WAS A FINDING OF FACT IN THAT REGARD AND IT WAS NOT SHOWN THAT THE FINDING R ECORDED BY THE TRIBUNAL WAS PERVERSE. VARIOUS COURTS HAVE HELD THAT THE ASSESSEE HAS TO PROVE THREE CONDITIONS : (1) IDENTITY OF THE CREDITOR (2)CAPACITY OF SUCH CR EDITOR TO ADVANCE MONEY, AND (3) GENUINENESS OF THE TRANSACTIONS. IF ALL THE AFORESA ID THREE CONDITIONS ARE PROVED, THE BURDEN WOULD SHIFT ON THE REVENUE TO PROVE THAT THE AMOUNT BELONGED TO THE ASSESSEE. IT HAS BEEN HELD BY THE VARIOUS HIGH COUR TS THAT THE ASSESSEE CANNOT BE ASKED TO PROVE THE SOURCE OF SOURCE OR THE ORIGIN O F DEPOSIT. UNDER THE AMNESTY SCHEME, THE NEW TAX PAYERS WERE ALLOWED TO DECLARE THEIR INCOME FOR VARIOUS YEARS AND THEIR RETURNS WE RE ALLOWED TO BE ACCEPTED WITHOUT ANY CHARGE OF PENALTY AND INTEREST. IT APPE ARED THAT BOTH THE LADIES HAD FILED RETURNS UNDER THE AMNESTY SCHEME DECLARING CE RTAIN INCOME AND AS A RESULT OF SUCH DECLARATION, SAVINGS HAD BEEN DEPOSITED IN THE BANK ACCOUNT WHICH HAD BEEN SUBSEQUENTLY PAID TO THE ASSESSEE. THERE WAS N O DISPUTE THAT THE INCOME-TAX RETURNS UNDER THE AMNESTY SCHEME IN THE CASE OF BOT H THE LADIES HAD BEEN ACCEPTED. FURTHER, THERE WAS NO ERROR IN THE ORDER OF THE TR IBUNAL WHERE THE TRIBUNAL HELD THAT IN CASE THE AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THOSE TWO LADIES WERE TO BE TREATED AS THE AMOUNT BELONGING T O THE ASSESSEE AND THE DEPOSITS MADE BY THE ASSESSEE, THEN IT WOULD BE A CASE OF IN VESTMENT MADE BY THE ASSESSEE IN THE NAME OF THOSE TWO LADIES AND THE PROVISION O F SECTION 69 WOULD APPLY AND NOT SECTION 68 AND FOR THAT PURPOSE THE FINANCIAL Y EAR WOULD BE RELEVANT AND THEN SUCH INVESTMENT MIGHT BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR WHICH WOULD FALL IN THE ASSESSMENT Y EAR 1986-87 AND NOT 1987-88. SECTION 68 APPLIES WHEN THE AMOUNT IS FOUND DEPOSIT ED IN THE BOOKS OF ACCOUNT OF AN ASSESSEE AND NOT IN THIRD PARTY. DEPOSIT IN THE ACCOUNT OF BANK WOULD AMOUNT TO INVESTMENT AND SECTION 69 WOULD APPLY AND NOT SE CTION 68. IN OUR OPINION, THE CASE OF THE ASSESSEE IS DULY CO VERED BY THE DECISION OF JURISDICTIONAL HIGH COURT WHICH WE ARE BOUND TO FOLLOW AND ON THE BASIS OF THIS DECISION ITSELF, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A) DELETING THE ADDITION MADE IN RESPECT OF CASH CREDIT BY THE ASSESSING OFFICER IN EACH OF THE ASSESSMENT YEAR 2005-06 AND 2006-07 AND SIMILARLY, NO INTERFERENCE IS CALLED FOR IN DELETIO N OF DISALLOWANCE MADE OUT OF THE INTEREST PAID 18 ON THESE DEPOSITS. THE DECISION GIVEN BY THE CIT(A) IS DULY SUPPORTED BY THE DECISION OF JURISDICTIONAL HIGH COURT, DECISION IN THE CASE OF ROHINI BUILDERS (SUPRA) AS WELL AS THAT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LTD. (SUPRA). WE ACCORDINGLY, DISMISS GROUND NO. 1 TAKEN BY THE REVE NUE IN BOTH THE YEARS. IN THE ASSESSMENT YEAR 2005-06, SINCE THERE IS NOT OTHER GROUND, THER EFORE, THE APPEAL RELATING TO ASSESSMENT YEAR 2005-06 STANDS DISMISSED. 17. GROUND NO.2 IN APPEAL FOR THE ASSESSMENT YEAR 2 006-07 RELATES TO THE DELETION OF ADDITION OF RS.41,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOOKING AMOUNT. THE FACTS RELATING TO THIS ADDITION ARE THAT THE AS SESSING OFFICER NOTED THAT THE ASSESSEE HAD RECEIVED BOOKING AMOUNT FROM 8 PARTIES AMOUNTING TO RS.72,50,000 DETAILED AS UNDER : SL. NO. NAME OF CUSTOMER DATE AMOUNT 1. ANIL KUMAR JOHAR 10.07.2005 25.10.2005 5,00,000/- 5,00,000/- 2. GITA KHANNA 10.07.2005 31.08.2005 2,00,000/- 4,00,000/- 3. KALPANA JAIN 29.12.2005 6,00,000/- 4. LATA 10.07.2005 3,00,000/- 5. MAHENDRA JAIN 19.10.2005 8,00,000/- 6. RAMA SHANKER AGARWAL 24.05.2005 11,50,000/- 7. RANJU CHOPRA 15.12.2005 8,00,000/- 8. RAVI SHANKER 30.11.2005/1.12.2005 20,00,000/- TOTAL 72,50,000/- THE ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF THE RECEIPT OF BOOKING AMOUNT. THE ASSESSING OFFICER, NOT BEING SATISFIED, MADE THE AD DITION U/S. 68. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT A SUM OF RS.31,50,000/- IS THE SAME WHICH HAD ALREADY BEEN ADDED U/S. 68 OF THE AC T AS LOAN AND ADVANCES FOR WHICH THE ASSESSEE HAS GIVEN COMPLETE DETAILS. IN RESPECT OF BALANCE AMOUNT, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE AMOUNT AS ADVANCE FROM VA RIOUS PARTIES FOR PURCHASE OF THE LAND. THE 19 COMPLETE DETAILS ALONGWITH CONFIRMATION, PERMANENT ACCOUNT NUMBER, ACKNOWLEDGEMENT FOR FILING THE RETURN AND COPIES OF BANK PASSBOOK AND O THER DETAILS WERE DULY FILED. ALL THE PARTIES ARE REGULAR ASSESSEES. THEIR IDENTITY AND CREDITWORTHIN ESS IS DULY PROVED. IN SOME CASES, THE ADVANCE MONEY WAS ADJUSTED AGAINST THE PURCHASE CONSIDERATI ON FOR THE LAND PURCHASED BY THEM. IN THE CASE OF RANJU CHOPRA, THE SUM OF RS.8,00,000/- WAS RECEIVED BY THE ASSESSEE, WHICH WAS DULY ADJUSTED AGAINST THE SALE CONSIDERATION OF THE LAND PURCHASED BY HER FROM THE ASSESSEE VIDE SALE DEED DULY EXECUTED AND REGISTERED. THE ADDITION HAS BEEN MADE IN A GENERAL MANNER BY OBSERVING THAT THE MONEY HAS BEEN DEPOSITED IN THE BANK AND T HEN ADVANCED TO THE ASSESSEE WITHOUT OBJECTING TO THE IDENTITY AND GENUINENESS OF THE TR ANSACTIONS. IT WAS CONTENDED THAT THE ASSESSEE HAS DULY DISCHARGED HIS ONUS. RELIANCE WAS PLACED O N THE VARIOUS DECISIONS AND IT WAS ALSO POINTED OUT THAT ALL THE DEPOSITORS WERE DULY EXAMI NED BY THE ACIT (INV.) IMMEDIATELY AFTER THE SEARCH CONDUCTED BY THE DEPARTMENT AND ALL THE DEPO SITORS HAVE OWNED THE DEPOSITS AND CONFIRMED THEM. THE ASSESSEE ASKED THE ASSESSING OF FICER TO ISSUE SUMMONS IN CASE THE ASSESSING OFFICER IS NOT SATISFIED ABOUT THE NATURE AND SOURCE OF THE DEPOSITS. RELIANCE WAS ALSO PLACED IN THIS REGARD ON THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LTD., 159 ITR 78 (SC). THE CIT(A) AFTER CALLING FOR THE REMAND REPORT OF THE ASSESSING OFFICER DELETED THE ADDITION BY OBSERVING AS UNDER : 2(V). I HAVE PERUSED AND CONSIDERED THE ASSESSMENT RECORDS, ASSESSMENT ORDER, REMAND REPORT OF THE ASSESSING OFFICER, WHER EIN HE HAS NOT SUBMITTED ANY NEW THING EXCEPT GENERAL SUBMISSIONS, REPLY OF THE APPELLANT, LAW CITED THEREIN AND THE PAPERS SUBMITTED THEREWITH, WHICH ARE PLACE D ON RECORD. I FIND THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF LENDERS, BOOKING ADVANCES, THEIR COMPLETE NAME AND ADDRESS, ALL ARE ASSESSED TO INCO ME-TAX, AND TO SUBSTANTIATE THE IDENTITY, CREDITWORTHINESS, GENUINENESS, THE AS SESSEE HAS PLACED ON RECORD THE ACKNOWLEDGEMENT RECEIPT FOR FILING OF INCOME-TAX RE TURN, PERMANENT ACCOUNT NUMBER OF EACH CREDITOR, THEIR CONFIRMATION OF HAVI NG GIVEN LOAN TO THE ASSESSEE, THEIR STATEMENT OF BANK ACCOUNT AS WELL AS HAS ALSO PROVED THE SOURCE OF THE SOURCE. 20 2(VI). I ALSO FIND THAT ADDITION OF RS.1,15,000/- IN THE ACCOUNT OF RAMA SHANKER AND RS.20 LAKH IN THE ACCOUNT OF RAM SHANKE R ARE DOUBLE ADDITION FIRSTLY UNDER THE HEAD LOAN/CASH CREDITS AND OTHER IN THE HEAD OF BOOKING ADVANCES. 2(VII). THE DECISION OF CIT VS. DURGA PRASAD MORE 82 ITR 540 CITED BY THE A.O. DOES NOT APPLY TO THIS CASE AS IT HAS BEEN RENDERED ON DIFFERENT FACTS. HE HAS FURNISHED ALL THE PAPERS WHICH ARE REQUISITIONE D FOR PROVING THE GENUINENESS OF THE LOANS. I DO NOT UNDERSTAND AS WHAT MORE EVID ENCE COULD BE PLACED ON RECORD BY AN APPELLANT FOR PROVING THE GENUINENESS OF THE LOANS. HOWEVER, IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE GENUINENE SS OF THE LOAN AND BOOKING ADVANCES, HE COULD HAVE SUMMONED AND ENQUIRED THE L ENDER BY VIRTUE OF POWERS VESTED IN HIM U/S. 131, FOR WHICH THE ASSESSEE SPEC IFICALLY REQUESTED AND THE SAME HAS NOT BEEN DONE. THE ASSESSING OFFICER COULD HAVE ALSO VERIFIED THE LOANS FROM THE FILES OF INVESTIGATION WING WHERE THE STATEMENT S ON OATH OF CREDITORS HAVE BEEN CLAIMED TO HAVE BEEN RECORDED. THE ASSESSING O FFICER HAS NOT PLACED ANY EVIDENCE ON RECORD AGAINST EVIDENCE PLACED BY THE A PPELLANT. IN THIS CASE, THE APPELLANT HAS SUBMITTED ALL THE PAPERS AND DOCUMENT S, WHICH CLEARLY PROVE THE GENUINENESS OF THE LOANS. I HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY THE APPELLANT AND THE ASSESSING OFFICER, I FIND THA T THE DECISION RELIED UPON BY THE ASSESSING OFFICER IS NOT APPLICABLE TO THE FACTS OF THE APPELLANTS CASE. THE APPELLANTS CASE IS COVERED BY VARIOUS DECISIONS CI TED BY HIM. 2(VIII). ON PERUSAL AND CONSIDERING ALL THE PAPERS PLACED ON RECORD, I HOLD THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDI NG THE LOANS RAISED BY THE ASSESSEE. I HEREBY DELETE THE SAID ADDITION OF RS.3 5,00,000/- AND RS.72,50,000/-. 18. THE LEARNED DR BEFORE US RELIED ON THE ORDER OF THE ASSESSING OFFICER WHILE THE LEARNED AR REITERATED THE SUBMISSIONS AS MADE BEFORE THE CI T(A) AND ALSO AS MADE IN RESPECT OF GROUND NO. 1. OUR ATTENTION WAS DRAWN TOWARDS PAGE 21 TO 5 8 OF THE PAPER BOOK TO PROVE THAT MONEY HAS BEEN RECEIVED AS ADVANCE AGAINST THE SALE OF LAND A ND IT WAS ULTIMATELY ADJUSTED AGAINST THE SALE OF LAND. AT PAGE 21, NAME AND ADDRESSES, PERMANENT ACCOUNT NUMBER, CONFIRMATIONS, BANK STATEMENTS IN RESPECT OF EACH OF THE PARTIES ARE AV AILABLE. 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS, PERUSED THE MATERIAL ON RECORD AND ALSO GONE THROUGH THE ORDER OF THE TAX AUTHORITIES BELOW. IN OUR OPINION, OUR FINDING GIVEN IN RESPECT OF GROUND NO. 1 EQUALLY APPLIES TO THIS GRO UND ALSO. THE ASSESSEE HAD DULY DISCHARGED HIS 21 ONUS BY FILING THE NECESSARY EVIDENCES PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE DECISIONS WHICH ARE APPLICABLE TO THE GROUND NO. 1 ARE EQUALLY APPLICABLE TO THIS GROUND AND, THEREFORE, IN OUR OPINION, NO INTE RFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE CIT(A) HAS DELETED THE ADDITION AFTER CONSIDERI NG ALL THE FACTS AND THE CASE LAWS. THUS, THIS GROUND STANDS DISMISSED. 20. GROUND NO. 3 RELATE TO THE DELETION OF ADDITION OF RS.88,92,380/-. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THIS ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE PAPER FOUND DURING THE COURSE OF SEARCH FROM THE PR EMISES OF SHRI ANIL AGARWAL, MAINPURI IN RESPECT OF THE PAYMENTS MADE OUTSIDE THE BOOKS OF A CCOUNT. THE ASSESSEE HAS PURCHASED LAND MEASURING 0.9608 HECTARE AT KHASARA NO. 168, MAYAPU R, FATEHABAD ROAD, AGRA FROM SHRI VIMAL GUPTA AND SHRI SHASHANK GUPTA ON 28.05.2005. THE CO NSIDERATION WAS SHOWN AT RS.32,00,000/- DURING THE COURSE OF SEARCH AT THE PREMISES OF SHRI ANIL AGARWAL, MAINPURI. A LARGE NUMBER OF PAPERS WERE FOUND. THESE PAPERS AT LP-7 PAGE 42, 44 & 45 OF THE MATERIAL FOUND FROM THE PREMISES OF SHRI ANIL AGARWAL, IN THE OPINION OF TH E ASSESSING OFFICER, ESTABLISH THAT THE LAND WAS ACTUALLY PURCHASED BY THE ASSESSEE FOR RS.1,20, 92,380/- INCLUDING DALALI AND OTHER EXPENSES. HE, THEREFORE, MADE ADDITION ON ACCOUNT OF UNDISCLO SED INVESTMENT OF RS.88,92,380/- BY INVOKING THE PROVISION OF SECTION 69 OF THE INCOME- TAX ACT. 21. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), HE CONTENDED THAT THE SAID LAND WAS IN DISPUTE AND SEVERAL LITIGATIONS BE TWEEN THE ORIGINAL SELLER AND SUBSEQUENT SELLER WERE IN EXISTENCE. THE DOCUMENTS IN RESPECT OF THE LITIGATION IN THE SHAPE OF FIR FILED BY ORIGINAL SELLER SHRI RAM DAYAL UNDER THE NEGOTIABLE INSTRUME NT ACT AS WELL AS U/S. 420, 504 & 506 OF THE I.P.C, ARREST WARRANT AND BAIL PAPERS, COPY OF THE SUIT FILED BEFORE THE CIVIL JUDGE AGAINST VIMAL 22 GUPTA AND SHASHANK GUPTA WERE FILED BEFORE THE ASSE SSING OFFICER. DUE TO THE LITIGATION BETWEEN THE ORIGINAL VENDOR AND HIS VENDOR, THE LAND WAS SO LD BY VIMAL GUPTA AND SHASHANK GUPTA TO THE ASSESSEE FOR A CONSIDERATION OF RS.32 LACS AND THE POSSESSION COULD NOT BE TAKEN TILL DATE BY THE ASSESSEE. THE ASSESSEE HAS NO CONNECTION WITH SHRI ANIL KUMAR AGARWAL, MAINPURI. SHRI ANIL KUMAR AGARWAL IS NEITHER A DIRECTOR NOR SHARE HOLDE R IN ASSESSEES COMPANY NOR HAVING ANY JOINT DEALINGS WITH THE ASSESSEE. THE ASSESSEE WAS PROVID ED COPY OF THE PAPERS WHICH WERE RECOVERED FROM THE POSSESSION OF ANIL KUMAR AGARWAL. THE PRES UMPTION U/S. 132(4A) IS AVAILABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION, THE PAPER S WERE FOUND. THE CIT(A) AFTER CALLING FOR THE REMAND REPORT OF THE ASSESSING OFFICER DELETED THE ADDITION BY OBSERVING AS UNDER : 4(IV). I HAVE PERUSED AND CONSIDERED THE ASSESSMEN T RECORDS, ASSESSMENT ORDER, REMAND REPORT OF THE ASSESSING OFFICER, WHER EIN HE HAS NOT SUBMITTED ANY NEW THING EXCEPT GENERAL PERCEPTION, REPLY AND REJO INDER FILED BY THE APPELLANT, WHICH ARE PLACED ON RECORD. FROM THE PERUSAL OF THE SAME I FIND THAT THE ASSESSEE HAS PLACED DOCUMENTARY PROOF IN SHAPE OF PURCHASE D EED DATED 26.05.2005 OF THE LAND SITUATED AT MAYAPUR, FATEHABAD ROAD, AGRA EXEC UTED BY THE SELLER S/SHRI VIMAL GUPTA AND SHASHANK GUPTA IN FAVOUR OF THE APP ELLANT COMPANY ALONE FOR RS.32,00,000/- ONLY. FROM THE SUBMISSIONS AND RELEV ANT DOCUMENTARY EVIDENCES SUBMITTED BY THE APPELLANT, I ALSO FIND THAT THIS W AS THE DISPUTED LAND FOR WHICH LITIGATIONS ARE STILL CONTINUING IN THE VARIOUS COU RTS, HENCE POSSIBILITY OF SELLING THE DISPUTED TITLED LAND AT LESSER RATES JUST WITH A VIEW TO REALIZE MONEY AS MUCH AS COULD BE POSSIBLE CANNOT BE RULED OUT. AS REGARD S THE OBSERVATIONS OF THE ASSESSING OFFICER WITH REGARD TO PAPERS FOUND FROM THE PREMISES OF ANIL AGARWAL, MAINPURI, I DO NOT FIND ANY INVOLVEMENT OF THE APPE LLANT WITH THOSE PAPERS AND WITH ANY DEALS CARRIED ON BY HIM AS THERE IS NO MEN TION OF APPELLANT COMPANY IN THOSE PAPERS. IT SHOULD BE UPON ANIL AGARWAL TO PRO VE THE PAPERS, INVOLVEMENT OF THE APPELLANT WITH THE PAPERS FOUND FROM HIS PREMIS ES AND IF ANY ADDITION WAS TO BE MADE ON THE BASIS OF THOSE PAPERS, IT SHOULD HAV E BEEN MADE IN THE HANDS OF ANIL KUMAR AGARWAL ON THE BASIS OF PRESUMPTIONS U/S . 132(4A), IF NOT REBUTTED. THUS, THE RELATION OF THE APPELLANT WITH THOSE PAPE RS IS UNJUSTIFIED. FROM THE PERUSAL OF RECORDS PLACED ON RECORD, I FIND THAT TH E SAID ANIL KUMAR AGARWAL IS NEITHER THE DIRECTOR OR SHARE HOLDER OF THE APPELLA NT COMPANY NOR THE ASSESSING OFFICER HAS PLACED ANY OTHER CORROBORATIVE EVIDENCE TO JUSTIFY THE ADDITION IN THIS CASE. 4(V). LOOKING TO THE FACTUAL POSITION OF THE CASE IN ENTIRETY AND AFTER CONSIDERATION OF THE PAPERS AND DOCUMENTS PLACED ON RECORD, I AM OF THE VIEW THAT THE ASSESSING OFFICER IS UNJUSTIFIED IN MAKING ADDITION OF RS.88,92,380/- U/S. 23 69 OF THE INCOME-TAX ACT. THEREFORE, I HEREBY DELET E THE SAID ADDITION OF RS.88,92,380/-. 22. THE LEARNED DR RELIED ON THE ORDER OF THE ASSES SING OFFICER WHILE THE LEARNED AR RELIED ON THE ORDER OF CIT(A). 23. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS, PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE CIT(A) HAS GIVEN CLEAR CUT FINDING OF THE FACT AFTER APPRECIATING THE PAPERS F OUND FROM THE PREMISES OF SHRI ANIL KUMAR AGARWAL THAT HE DID NOT FIND ANY INVOLVEMENT OF THE ASSESSEE WITH THESE PAPERS AND WITH ANY DEALS CARRIED ON BY THE ASSESSEE AS THERE IS NO MEN TION OF THE ASSESSEE COMPANY IN THESE PAPERS. THE REVENUE IS IN APPEAL AND, THEREFORE, THE ONUS I S ON THE REVENUE IN CASE THEY CHALLENGE THE FINDING OF THE CIT(A) TO PRODUCE THE RELEVANT PAPER S, BUT THE COPIES OF THESE PAPERS WERE NOT PRODUCED BEFORE US. THEREFORE, IN OUR OPINION, THE FINDING GIVEN BY THE CIT(A) IS FINAL AND WE CANNOT INTERFERE IN THE FINDING IN ABSENCE OF ANY C ONTRARY MATERIAL BEING BROUGHT ON RECORD BY THE REVENUE. THE PRESUMPTION U/S. 132(4A) IS AVAILABLE ONLY AGAINST THE PERSON AGAINST WHOM THE PROCEEDINGS U/S. 132 HAVE BEEN CARRIED OUT. SIMILAR IS THE POSITION IN RESPECT TO THE PRESUMPTION AVAILABLE U/S. 292C. THE PRESUMPTION U/S. 292C IS A LSO AVAILABLE AGAINST THE PERSON SEARCHED OR SURVEYED NOT AGAINST THE THIRD PARTY. IN THE CASE B EFORE US, THE ALLEGATION OF THE REVENUE IS THAT CERTAIN PAPERS WERE FOUND DURING THE COURSE OF SEAR CH CARRIED OUT AT THE PREMISES OF SHRI ANIL KUMAR AGARWAL. SHRI ANIL AGARWAL IS NEITHER THE SHA RE HOLDER NOR DIRECTOR OF THE ASSESSEE- COMPANY AND FOR ASSESSEE, HE IS A THIRD PARTY. THER EFORE, IN OUR OPINION, ON THE BASIS OF THE PAPER FOUND DURING THE COURSE OF SEARCH AT THE PREMISES O F ANIL KUMAR AGARWAL, THE PRESUMPTION WILL NOT BE AVAILABLE TO THE REVENUE AGAINST THE ASSESSE E. IT MAY BE AVAILABLE ONLY AGAINST SHRI ANIL AGARWAL. THEREFORE, THE ONUS IS ON THE REVENUE TO P ROVE THAT THE LOOSE PAPERS FOUND FROM THE 24 PREMISES OF THE THIRD PARTY RELATE TO THE ASSESSEE AND CONTAIN THE TRANSACTION BEING CARRIED OUT BY THE ASSESSEE. NO SUCH COGENT MATERIAL OR EVIDENCE W AS PRODUCED BEFORE US WHICH MAY PROVE THAT THE TRANSACTION CONTAINED IN THE LOOSE PAPERS BELON G TO THE ASSESSEE AND RELATE TO THE INVESTMENT MADE BY THE ASSESSEE IN THE PURCHASE OF THE PROPERT Y OUTSIDE THE BOOKS OF ACCOUNT. IN VIEW OF THESE FACTS, IN OUR OPINION, THIS IS NOT A FIT CASE WHICH WARRANTS OUR INTERFERENCE IN THE ORDER OF TH E CIT(A). IN OUR OPINION, THE CIT(A) HAS RIGHTLY DELE TED THE ADDITION. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A). 24. IN THE RESULT, THE APPEALS FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.3.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18 TH MARCH, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY