ACIT, Circle - 35, , Kolkata V. M/s. Machinery Agencies India , Kolkata

ITA 2100/KOL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4821 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-09-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 05-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Bogus Share capital; Search and seizure; Principle of natural justice; Opportunity of cross examination; Question of law; Third party statement; Accommodation entries; Assessment record; Tax effect; Bogus loan; Revised return; TDS; Set aside
• Section: 69C; 133(6); 13; 153; 131; 68; 69

Judgement Text

1 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI P. M. JAGTAP, VICE PRESIDENT (KZ) & S HRI A. T. VARKEY, JUDICIAL MEMBER ] I.T.A. NO. 2100/KOL/2018 ASSESSMENT YEAR: 2014-15 ACIT, CIRCLE-35, KOLKATA VS . M/S MACHINERY AGENCIES INDIA (PAN:AAEFM 7603 D) APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 02.09.2021 DATE OF PRONOUNCEMENT 30.09.2021 FOR THE APPELLANT SHRI SUPRIYO PAL, ADDL. CIT FOR THE RESPONDENT SHRI MIRAJ D SHAH, ADVOCATE ORDER PER SHRI A. T. VARKEY, JM: THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINS T THE ORDER OF THE LD. CIT(A)- 10, KOLKATA DATED 30.07.2018 FOR AY 2014-15 . 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DISALLOWING THE ADDITION OF RS. 1,50,10,000/- MADE U/S 68 OF T HE I. T. ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DISALLOWING THE ADDITION RS. 13,34,669/- MADE U/S 69C OF THE I. T. ACT, 1961. 3. THE APPELLANT CRAVES LEAVE TO MAKE ANY ADDITION, ALTERATION, MODIFICATION OF GRONDS AT THE APPELLATE STAGE. 3. FROM A PERUSAL OF THE AFORESAID GROUNDS OF APPEA L RAISED BY THE REVENUE, IT IS DISCERNED THAT THE SOLE ISSUE ON WHICH THE REVENUE IS AGGRIEVED IS AGAINST THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION OF RS.1,50,1 0,000/- U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND RS. 13,34,669/- U/S 69C OF THE ACT WHICH AMOUNT THE ASSESSEE COMPANY HAS SHOWN AS UNSE CURED LOAN FROM TEN (10) PARTIES AND THE INTEREST PAID BY THE ASSESSEE ON IT TO TH E LENDERS RESPECTIVELY. 2 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 4. BRIEF FACTS OF THE CASE AS NOTED BY THE ASSESSIN G OFFICER ARE THAT THE ASSESSEE FIRM FILED ITS ORIGINAL RETURN OF INCOME OF RS. 22,78,40 0/- AND FILED REVISED RETURN ON 22.07.2015 SHOWING TOTAL INCOME OF RS. 22,78,400/-. THEREAFTER THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. IN THE COURSE OF ASSESSM ENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE FIRM HAS TAKEN UNSECURED LOAN FROM THE FOL LOWING PARTIES WHICH ACCORDING TO HIM WERE SHELL COMPANIES: SL. NO. NAME UNSECURED LOANS RECEIVED DURING FY 2013-14 INTEREST PAID 1 A.K. CONSTRUCTION PVT. LTD. 45000001 126477 2 BHIKSU BARTER PVT. LTD. - 120000 3 DIVYA ELECTRONICS PVT. LTD. 10000 119974 4 MAHESWARI MERCHANTS (P) LTD. 1000000 8877 5 PARITOSH ELECTRICALS (P) LTD. 1000000 123616 6 POTENTIAL ELECTRICALS & ELECTRONICS (P) LTD. 1000000 121808 7 RAJSHREE DEVELOPER ENTREPRENEURS (P) LTD. - 120000 8 RANBHUMI MARKETING PVT. LTD. - 185753 9 VIVEK TRACOM PVT. LTD. 7500000 359342 10 ZIGMA ELECTRICALS PVT. LTD. - 48822 TOTAL 15010000 1334669 5. ACCORDING TO HIM, THE DEPARTMENT HAD INFORMATION THAT THESE LENDER COMPANIES ARE SHELL COMPANIES FROM THE STATEMENT RECORDED OF AN ENTRY OPERATOR, SHRI RAJ KUMAR KOTHARI WHO HAS GIVEN STATEMENT U/S 131 OF THE ACT ON 02.03.2016 TO THE INVESTIGATION WING OF THE DEPARTMENT THAT HE IS CONTROLLING CERTA IN NUMBERS OF COMPANIES WHICH ARE ENGAGED ALSO IN PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF SHARE SUBSCRIPTION AND UNSECURED LOAN ETC. THEREAFTER THE AO HAS TAKEN NOT E OF THE FINANCIALS OF M/S VIVEK TRACOM PVT. LTD. AND THAT OF M/S PARITOSH ELECTRICA LS PVT. LTD. (LENDER COMPANIES) WHEREIN HE HAS NOTED THE SHARE CAPITAL ISSUED, SHAR E PREMIUM, NON-CURRENT INVESTMENT, LONG-TERM LOANS AND ADVANCES GIVEN AND TURNOVER. TH EREAFTER THE A.O MADE THE FOLLOWING OBSERVATION ABOUT THE LENDER COMPANIES IN HIS OWN WORDS ALL OF THESE COMPANIES ARE INVOLVED IN PROVIDING ACCOMMODATION E NTRY IN THE FORM OF UNSECURED LOAN IN LIEU OF COMMISSION. THEIR FINANCIAL WORTH D OES NOT SUPPORT THEIR VERY HIGH PARTIES. THESE ENTITIES ARE MERE PAPER COMPANY/BOGU S WHICH HAVE BEEN ESTABLISHED BY THE INVESTIGATION DIRECTORATE, KOLKATA. THEREAFTER HE ISSUED NOTICE TO THE ASSESSEE INFORMING IT ABOUT THE INFORMATION RECEIVED FROM TH E INVESTIGATION DIRECTORATE THAT THE LOAN OBTAINED FROM THE TEN (10) LENDER COMPANIES AR E FROM BOGUS/PAPER COMPANIES AND 3 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 THAT THEY ARE ALL INVOLVED IN GIVING ACCOMMODATION ENTRY IN THE FORM OF UNSECURED LOAN IN LIEU OF COMMISSION AND TO SHOW CAUSE AS TO WHY A N AMOUNT OF RS. 1,50,00,000/- AND INTEREST AMOUNT OF RS.14,42,669/- (INTEREST AMOUNT) SHOULD NOT BE ADDED BACK TO ITS TOTAL INCOME. PURSUANT TO THE SHOW CAUSE NOTICE (SCN) DAT ED 08.12.2016, THE ASSESSEE REPLIED VIDE LETTER DATED 21.12.2016 WHEREIN IT WAS POINTED OUT TO THE AO THAT IN THE STATEMENT RECORDED OF SHRI RAJ KUMAR KOTHARI ON 02.03.2016 TH AT PERSON HAS NOT STATED ANYTHING FROM WHICH IT CAN BE INFERRED THAT ASSESSEE WAS A B ENEFICIARY OF ANY ACCOMMODATION ENTRIES. AND ALSO IT WAS POINTED OUT THAT SINCE TH E STATEMENT OF SHRI RAJ KUMAR KOTHARI HAS BEEN RECORDED BEHIND THE ASSESSEES BACK, IT CA NNOT BE USED AGAINST IT UNLESS THE ASSESSEE HAS BEEN GIVEN AN OPPORTUNITY TO CROSS EXA MINE. MOREOVER, IT WAS POINTED OUT BY THE ASSESSEE THAT FROM THE STATEMENT RECORDED BY AO DURING THE ASSESSMENT PROCEEDING OF THE ASSESSEE, SHRI KOTHARI HAS DENIED THAT HE WAS GIVING ACCOMMODATION ENTRY TO THE ASSESSEE AND EVEN CATEGORICALLY CONFIR MED ABOUT THE LOAN TRANSACTION WITH ASSESSEE AND ALSO ABLE TO SHOW THE SOURCE OF LOAN T O ASSESSEE WHICH WAS FROM REFUND OF LOAN. THE REPLY OF ASSESSEE WHICH HAS BEEN REPRODU CED BY THE AO IS AS UNDER: DURING THE COURSE OF HEARING YOUR HONOUR HAS PROVI DED US WITH THE COPY OF STATEMENT OF SHRI RAJ KUMAR KOTHARI RECORDED BEFORE THE DDIT (INV), U NIT- 2(2), KOLKATA AND BEFORE YOUR HONOUR IN RESPONSE TO NOTICE U/S 131 OF THE INCOME-TAX ACT , 1961. IN THIS REGARD WE WOULD LIKE TO SUBMIT BEFORE YOUR HONOUR THAT IN THE STATEMENT REC ORDED BEFORE THE DDIT (INV) SHRI RAJ KUMAR KOTHARI HAS STATED THAT HE PROVIDES ACCOMMODATION E NTRIES TO VARIOUS BENEFICIARIES. ALSO IT IS FURTHER CLARIFIED FROM RESPONSE TO QUERY NO. 11 AND 12 THAT HE HAS PROVIDED ACCOMMODATION ENTRIES TO ONE BANKTESH GROUP AND NOT THE ASSESSEE FIRM. IT HAS ALSO NOT BEEN MENTIONED IN THE SAID STATEMENT AS TO WHETHER WE WERE ONE OF THE BEN EFICIARY OF SUCH ACCOMMODATION ENTRIES. FROM THE STATEMENT RECORDED BEFORE YOUR HONOUR IT S EEN THAT SHRI RAJ KUMAR KOTHARI HAS NEVER ACCEPTED THAT HE HAS PROVIDED ACCOMMODATION ENTRY T O THE ASSESSEE FIRM. IN RESPONSE TO QUERY NO. 10 IT HAS BEEN CLEARLY MENTIONED THAT THE SOURC E OF LOAN PROVIDED TO THE ASSESSEE FIRM IS REFUND OF LOAN. ALSO IN RESPONSE TO QUERY NO. 9 IT HAS BEEN STATED THAT SHRI RAJ KUMAR KOTHARI KNEW THE PARTNER OF THE ASSESSEE FIRM. ALTHOUGH FOR SOME OF THE QUERIES HE HAS STATED THAT HE DOES NOT REMEMBER. SIR IT IS NOT POSSIBLE TO REMEMB ER ALL THE INFORMATION ASKED FOR DURING COURSE OF RECORDING OF STATEMENT. FROM PLAIN READIN G OF THE STATEMENT OF SHRI RAJ KUMAR KOTHARI, IT APPEARS THAT THE SAID DETAILS/INFORMATI ON COULD BE SUBMITTED AT A LATER DATE. YOUR HONOUR CAN ALSO ASK HIM TO FURNISH THE SAID INFORMA TION/DETAILS NOW. HENCE, NO ADVERSE INFERENCE SHOULD BE DRAWN FROM HIS STATEMENT. SIR, FROM THE STATEMENT PROVIDED BY YOUR HONOUR IT IS SEEN THAT SHRI RAJ KUMAR KOTHARI HAS DEPOSED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODAT ION ENTRIES THROUGH VARIOUS COMPANIES CONTROLLED AND MANAGED BY HIM. IN THIS REGARD WE WO ULD AGAIN LIKE TO MENTION THAT THE STATEMENT OF SHRI RAJ KUMAR KOTHARI WAS RECORDED AT OUR BACK. SO, WE WOULD REQUEST YOUR HONOUR TO PROVIDE US AN OPPORTUNITY TO CROSS EXAMIN E HIM FOR THE SAKE OF NATURAL JUSTICE. 4 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 PURSUANT TO THE REQUEST OF THE ASSESSEE FOR CROSS-E XAMINATION OF SHRI RAJ KUMAR KOTHARI, THE AO ISSUED NOTICE U/S 131 OF THE ACT ON 21.12.2016 FOR HIS PERSONAL APPEARANCE ON 26.12.2016. THE AO NOTED THAT SHRI RA J KUMAR KOTHARI VIDE HIS LETTER DATED 26.12.2016 BROUGHT TO HIS NOTICE THAT HE WILL BE OUT OF KOLKATA, AND IT WILL NOT BE POSSIBLE FOR HIM TO ATTEND SUMMON U/S 131 OF THE AC T. HOWEVER, THE AO ACKNOWLEDGES THAT ON 27.12.2016 THE LD. A.R OF THE ASSESSEE WAS PRESENT BEFORE HIM FOR CROSS- EXAMINATION. HOWEVER SINCE SHRI KOTHARI DID NOT TUR N UP IN SPITE OF SERVING SUMMONS U/S 131, THE CROSS-EXAMINATION COULD NOT BE FACILIT ATED. THEREAFTER THE AO HELD AS UNDER: 6. AFTER GOING THROUGH THE MATERIAL ON RECORD AND EVIDENCES FOUND DURING THE COURSE OF ASSESSMENT AND ANALYZING THE STATEMENT RECORDED U/S 131, THE UNDERSIGNED IS OF FIRM OPINION THAT IT WAS FIRMS OWN MONEY WHICH WAS INTRODUCED I N THE FORM OF UNSECURED LOAN AMOUNTING RS. 1,50,10,000/- AS DISCUSSED ABOVE AND HENCE ADDE D BACK TO THE TOTAL INCOME U/S 68 OF ACT AS UNEXPLAINED CASH CREDIT. THE INTEREST AMOUNTING RS. 13,34,669/- IS ALSO DISALLOWED AS BOGUS EXPENDITURE U/S 69C AND ADDED BACK TO THE TOTAL INC OME. 6. AGGRIEVED BY THE ACTIONS OF THE AO THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE THE SAME BY HO LDING AS UNDER: FINDINGS & DECISION 1. I HAVE EXAMINED THE SUBMISSIONS FILED BY THE LD. A. RS FOR THE APPELLANT AND THE VARIOUS EVIDENCES PLACED ON RECORD, I HAVE ALSO CAREFULLY P ERUSED THE OBSERVATIONS AND FINDINGS RECORDED BY THE LD. AO. I HAVE ALSO EXAMINED THE AS SESSMENT RECORDS AS SENT BY THE LD. A.O. FROM THE FACTS AS RECORDED BY THE ID. A.O, I F IND THAT THAT DURING THE FINANCIAL YEAR 2013-14, RELEVANT FOR THE SUBJECT A.Y 2014-15, THE APPELLANT-ASSESSEE HAD TAKEN LOANS FROM 6 PARTIES - NAMELY M/S A. K CONSTRUCTION PVT. LTD ( RS.45,00,000), M/S DIVYA ELECTRONICS (PVT) LTD (RS. 10,000/-) M/S MAHESHWARI MERCHANTS P VT LTD (RS. 10,00,000/-) M/S PARITOSH ELECTRICALS PVT LTD (RS.10,00,000/-) M/S POTENTIAL ELECTRICALS & ELECTRONICS PVT. LTD ( RS.10,00,000/-) AND M/S VIVEK TRACOM PVT. LTD ( RS. 75,00,000), ALL TOTALLING RS.1,50,10,000/-. THE APPELLANT HAS ALSO PAID INTER EST TO THESE SIX PARTIES AS WELL AS FOUR OTHER PARTIES, WHICH WHOM THERE WERE LOAN TRANSACTI ONS IN EARLIER YEARS. THE TOTAL INTEREST PAID ON SUCH ACCOUNT WORKS OUT TO RS.13,34,669/-. T HE LD. A.O HAS DOUBTED THE GENUINENESS OF THE LOANS TAKEN BY THE APPELLANT, AS WELL AS THE INTEREST PAID ON ACCOUNT OF SUCH LOANS TAKEN DURING THE SUBJECT ASSESSMENT YEAR AS WELL AS THE INTEREST PAID ON ACCOUNT OF SUCH LOANS FOR EARLIER PERIODS, AS BROUGHT FORTH BY THE TABLE AT PARA 4 OF THE IMPUGNED ASSESSMENT ORDER. 2. IN THE COURSE OF ASSESSMENT THE APPELLANT WAS CALL ED UPON TO FURNISH THE DETAILS OF SUCH LOAN RECEIVED, AND IN COMPLIANCE THERETO, THE APPEL LANT FURNISHED THE DETAILS AS CALLED FOR. IN THE IMPUGNED ORDER BY REFERRING TO THE STATEMENT AL LEGEDLY GIVEN BY ONE SHRI RAJ KUMAR KOTHARI IN THE COURSE OF SURVEY CONDUCTED ON 02.03. 2016, BY THE INVESTIGATION WING, THE LD. AO CLAIMED THAT THE LENDER COMPANIES WERE UNDER HIS CONTROL AND ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. BASED ON SUCH STATEMENT OF S HRI RAJ KUMAR KOTHARI, THE LD. AO REJECTED THE DOCUMENTARY EVIDENCES FURNISHED IN SUP PORT OF THE LOAN RECEIVED AND INTEREST PAID AND MADE THE ADDITION OF RS.1,50,10,000/- UNDE R SECTION 68 OF THE ACT. FURTHER, THE LD. A.O ALSO DISALLOWED THE INTEREST PAID OF RS. 13,34, 669/- TREATING THE SAME AS BOGUS EXPENDITURE U/S 69C OF THE INCOME TAX ACT, 1961. 3. AFTER CAREFULLY EXAMINING THE DOCUMENTS AND EVIDENC ES, I FIND THAT THE ONLY GROUND ON WHICH THE LD. AO MADE THE ADDITION U/S 68 IS APPARE NTLY UNSUSTAINABLE. THE LD. AO PRINCIPALLY RELIED ON THE STATEMENT O RECORDED IN THE COURSE OF SURVEY CONDUCTED UPON HIM WHEREIN HE HAD ALLEGEDLY ADMITTED THAT HE WAS PROVIDING ACCOMMODATION ENTRIES. IN THE IMPUGNED ORDER THE LD, AO HAS EXTRACTED THE STATEMENT OF SHRI RAJ K RECEIVED FROM THE LENDER COMPANIES WAS IN THE NATUR E OF BOGUS LOAN ENTRIES AND THAT SUCH LENDER COMPANIES WERE CONTROLLED AND/OR OPERATED BY SHRI RAJ KUMAR KOTHARI. THE LD. A.O HAS ALSO RECORDED A STA EXAMINED HIM, AND THAT IS A PART OF THE RECORDS. TH E LD. A.O HAS NOT REPRODUCED THE CONTENTS OF THE STATEMENT AS RECORDED BY HIM BUT ME RELY OBSERVED THAT THE REPLIES GIVEN BY HIM BEFORE ANOTHER OFFICER, THE ACIT, CIRCLE EVEN WHEN THE LD. A.O HAS SUMMONED SHRI RAJ KUMAR K OTHARI, THE ALLEGED LOAN OPERATOR AND EXAMINED HIM, HE APPEARS TO BE RELYING MORE ON THE STATEMENT GIVEN BY SHRI KOTHARI BEFORE A NOTHER ASSESSING OFFICER OR BEFORE THE INVESTIGATIO N WING. 4. ON THE CONTRARY, HOWEVER I FIND THAT WHEN CALLED UP ON TO EXPLAIN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , THE APPELLANT HAD FURNISHED BEFORE THE LD. AO NUMEROUS DOCUMENTARY EVIDENCES TO ESTABLISH THE THREE LIMBS OF SECTION 68 OF THE ACT. FROM THE DOCUMENTS PLACED BEFORE ME, AND AS AV AILABLE FROM THE ASSESSMENT RECORD, IT WAS FOUND THAT THE APPELLANT HAD FURNISHED CONFI RMATION OF ACCOUNTS FROM BOTH THE LOAN CREDITO RS TOGETHER WITH COPIES OF THEIR FINANCIAL STATEMEN TS, IT ACKNOWLEDGMENTS AND THE BANK STATEMENTS FROM WHICH THE LOAN AMOUNTS WERE PA ID. A SUMMARY OF THE POSITION REGARDING COMPLIANCE TO THE NOTICES OF THE LD. A.O TO THE VARIOUS LOAN CREDITORS AS AVAILABLE IN THE ASSESSMENT RECORD IS AS UNDER: 5 ITA NO. M/S MACHINERY AGENCIES INDIA., AY 2014 AFTER CAREFULLY EXAMINING THE DOCUMENTS AND EVIDENC ES, I FIND THAT THE ONLY GROUND ON WHICH THE LD. AO MADE THE ADDITION U/S 68 IS APPARE NTLY UNSUSTAINABLE. THE LD. AO PRINCIPALLY RELIED ON THE STATEMENT O F SHRI RAJ KUMAR KOTHARI AN ALLEGED ENTRY OPERATOR RECORDED IN THE COURSE OF SURVEY CONDUCTED UPON HIM WHEREIN HE HAD ALLEGEDLY ADMITTED THAT HE WAS PROVIDING ACCOMMODATION ENTRIES. IN THE IMPUGNED ORDER THE LD, AO HAS EXTRACTED THE STATEMENT OF SHRI RAJ K UMAR KOTHARI IN SUPPORT OF HIS CONCLUSION THAT THE LOAN RECEIVED FROM THE LENDER COMPANIES WAS IN THE NATUR E OF BOGUS LOAN ENTRIES AND THAT SUCH LENDER COMPANIES WERE CONTROLLED AND/OR OPERATED BY SHRI RAJ KUMAR KOTHARI. THE LD. A.O HAS ALSO RECORDED A STA TEMENT FROM SHRI RAJ KUMAR KOTHARI HIMSELF AND HAS PERSONALLY EXAMINED HIM, AND THAT IS A PART OF THE RECORDS. TH E LD. A.O HAS NOT REPRODUCED THE CONTENTS OF THE STATEMENT AS RECORDED BY HIM BUT ME RELY OBSERVED THAT THE REPLIES GIVEN BY OFFICER, THE ACIT, CIRCLE - 34 WERE NOT SATISFACTORY. THEREFORE, I FIND THAT EVEN WHEN THE LD. A.O HAS SUMMONED SHRI RAJ KUMAR K OTHARI, THE ALLEGED LOAN OPERATOR AND EXAMINED HIM, HE APPEARS TO BE RELYING MORE ON THE STATEMENT GIVEN BY SHRI KOTHARI NOTHER ASSESSING OFFICER OR BEFORE THE INVESTIGATIO N WING. ON THE CONTRARY, HOWEVER I FIND THAT WHEN CALLED UP ON TO EXPLAIN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , THE APPELLANT HAD FURNISHED BEFORE THE DOCUMENTARY EVIDENCES TO ESTABLISH THE THREE LIMBS OF SECTION 68 OF THE ACT. FROM THE DOCUMENTS PLACED BEFORE ME, AND AS AV AILABLE FROM THE ASSESSMENT RECORD, IT WAS FOUND THAT THE APPELLANT HAD FURNISHED CONFI RMATION OF ACCOUNTS FROM BOTH THE LOAN RS TOGETHER WITH COPIES OF THEIR FINANCIAL STATEMEN TS, IT ACKNOWLEDGMENTS AND THE BANK STATEMENTS FROM WHICH THE LOAN AMOUNTS WERE PA ID. A SUMMARY OF THE POSITION REGARDING COMPLIANCE TO THE NOTICES OF THE LD. A.O TO THE VARIOUS LOAN CREDITORS AS IN THE ASSESSMENT RECORD IS AS UNDER: ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014 -15 AFTER CAREFULLY EXAMINING THE DOCUMENTS AND EVIDENC ES, I FIND THAT THE ONLY GROUND ON WHICH THE LD. AO MADE THE ADDITION U/S 68 IS APPARE NTLY UNSUSTAINABLE. THE LD. AO F SHRI RAJ KUMAR KOTHARI AN ALLEGED ENTRY OPERATOR RECORDED IN THE COURSE OF SURVEY CONDUCTED UPON HIM WHEREIN HE HAD ALLEGEDLY ADMITTED THAT HE WAS PROVIDING ACCOMMODATION ENTRIES. IN THE IMPUGNED ORDER THE LD, AO HAS UMAR KOTHARI IN SUPPORT OF HIS CONCLUSION THAT THE LOAN RECEIVED FROM THE LENDER COMPANIES WAS IN THE NATUR E OF BOGUS LOAN ENTRIES AND THAT SUCH LENDER COMPANIES WERE CONTROLLED AND/OR OPERATED BY SHRI RAJ KUMAR KOTHARI. THE LD. A.O TEMENT FROM SHRI RAJ KUMAR KOTHARI HIMSELF AND HAS PERSONALLY EXAMINED HIM, AND THAT IS A PART OF THE RECORDS. TH E LD. A.O HAS NOT REPRODUCED THE CONTENTS OF THE STATEMENT AS RECORDED BY HIM BUT ME RELY OBSERVED THAT THE REPLIES GIVEN BY 34 WERE NOT SATISFACTORY. THEREFORE, I FIND THAT EVEN WHEN THE LD. A.O HAS SUMMONED SHRI RAJ KUMAR K OTHARI, THE ALLEGED LOAN OPERATOR AND EXAMINED HIM, HE APPEARS TO BE RELYING MORE ON THE STATEMENT GIVEN BY SHRI KOTHARI ON THE CONTRARY, HOWEVER I FIND THAT WHEN CALLED UP ON TO EXPLAIN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , THE APPELLANT HAD FURNISHED BEFORE THE DOCUMENTARY EVIDENCES TO ESTABLISH THE THREE LIMBS OF SECTION 68 OF THE ACT. FROM THE DOCUMENTS PLACED BEFORE ME, AND AS AV AILABLE FROM THE ASSESSMENT RECORD, IT WAS FOUND THAT THE APPELLANT HAD FURNISHED CONFI RMATION OF ACCOUNTS FROM BOTH THE LOAN RS TOGETHER WITH COPIES OF THEIR FINANCIAL STATEMEN TS, IT ACKNOWLEDGMENTS AND THE BANK STATEMENTS FROM WHICH THE LOAN AMOUNTS WERE PA ID. A SUMMARY OF THE POSITION REGARDING COMPLIANCE TO THE NOTICES OF THE LD. A.O TO THE VARIOUS LOAN CREDITORS AS 5. THE RELEVANT ENTRIES IN THE BANK STATEMENT SUPPORTE D THE EXPLANATION FURNISHED REGARDING SOURCE OF THE LOAN AMOUNT. FROM THESE DOCUMENTARY E VIDENCES IT THEREFORE APPEARED THAT THE TRANSACTION BETWEEN THE APPELLANT CHANNELS. I ALSO FIND THAT THE ENTRIES IN THE BANK STATEMENT OF THE LENDER CLEARLY EXPLAINED THE IMMEDIATE SOURCE FOR MAKING PAYMENT OF THE LOAN AMO UNT. EVEN THOUGH THESE MATERIAL EVIDENCES WAS BROUGH THAT THE EXPLANATION FURNISHED BY THE APPELLANT WAS FALSE OR THERE WAS ANY MATERIAL INFIRMITY THEREIN. SINCE THE APPELLANT HAD PROVED THAT THE LO AN TRANSACTION WAS CARRIED OUT THROUGH PRO PER BANKING CHANNEL AND THE IMMEDIATE SOURCE FOR PA YMENT OF LOAN WAS EXPLAINED AND THERE BEING NO CONTRARY MATERIAL BROUGHT ON RECORD BY THE LD. AO, IN MY OPINION IN TERMS OF SECTION 106 OF THE INDIAN EVIDENCE ACT, THE APPELLA NT COULD BE SAID TO HAVE DISCH ONUS CAST ON HIM TO ESTABLISH IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE LOAN TRANSACTION. THE FOREGOING CONCLUSION FINDS SUPPORT IN THE JUDGMENT OF THE HONBLE GAUHATI HIGH COURT IN THE CASE OF SHRI NEMI CHAND KOTHARI V S. CIT (264 ITR 254 HONBLE HIGH COURT HELD AS FOLLOWS: WHEN ONE READS CAREFULLY THE PROVISIONS OF SECTION 68, ONE FINDS NOTHING IN SECTION 68 TO SHOW THAT THE SCOPE OF INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL REMAIN CONFINED TO THE TRANSAC THE CREDITOR NOR DOES THE WORDING OF SECTION 68 IND ICATE THAT SECTION 68 DOES NOT AUTHORISE THE REVENUE DEPARTMENT TO MAKE INQUIRY IN TO THE SOURCE(S) OF THE CREDITOR AND/OR SUB- CREDITOR. THE LANGUAGE E SUCH LIMITATIONS ON THE POWERS OF THE ASSESSING OFF ICER, THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE THAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASSESSING OFFICER TO THE TRAN ASSESSEE AND HIS CREDITOR BUT THE SAME MAY BE EXTEN DED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND HIS SUB IS, UNDER SECTION 68, FREE TO LOOK INTO T CREDITOR, THE BURDEN ON THE ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED. THIS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE INDIAN EVIDENCE ACT. [PARA 12] ON A CAREFUL READING OF SECTION 106 OF THE INDIAN THE SOURCE FROM WHERE AN ASSESSEE HAS OBTAINED THE LOAN CAN BE SAFELY HELD TO BE A FACT SITUATION, WHICH IS ACTUALLY WITHIN THE SPECIAL KNO WLEDGE OF THE ASSESSEE ; HENCE, IT IS THE BURDEN OF THE ASSESSEE TO SHOW THE ONCE THE ASSESSEE DISCLOSES THE SOURCE(S) FROM WHER E HE HAS RECEIVED THE LOANS, HIS BURDEN UNDER SECTION 106 STANDS DISCHARGED AND THE ONUS THEN SHIFTS TO THE ASSESSING OFFICER TO SHOW, IF HE WANTS TO TREAT UNDISCLOSED SOURCES, THAT THE TRANSACTION(S) BETWEE N THE ASSESSEE AND THE CREDITOR IS/ARE NOT GENUINE OR THAT THE CREDITOR HAS NO CREDITWORTH INESS AND/OR THAT THE MONEY, WHICH 6 ITA NO. M/S MACHINERY AGENCIES INDIA., AY 2014 THE RELEVANT ENTRIES IN THE BANK STATEMENT SUPPORTE D THE EXPLANATION FURNISHED REGARDING SOURCE OF THE LOAN AMOUNT. FROM THESE DOCUMENTARY E VIDENCES IT THEREFORE APPEARED THAT THE TRANSACTION BETWEEN THE APPELLANT AND THE LENDER COMPANIES WAS CONDUCTED THROUGH BANK ING CHANNELS. I ALSO FIND THAT THE ENTRIES IN THE BANK STATEMENT OF THE LENDER CLEARLY EXPLAINED THE IMMEDIATE SOURCE FOR MAKING PAYMENT OF THE LOAN AMO UNT. EVEN THOUGH THESE MATERIAL EVIDENCES WAS BROUGH T ON ID. AO'S RECORD, HE DID NOT BRING ANY ADVERSE MATERIAL TO PROVE THAT THE EXPLANATION FURNISHED BY THE APPELLANT WAS FALSE OR THERE WAS ANY MATERIAL INFIRMITY THEREIN. SINCE THE APPELLANT HAD PROVED THAT THE LO AN TRANSACTION WAS CARRIED OUT THROUGH PER BANKING CHANNEL AND THE IMMEDIATE SOURCE FOR PA YMENT OF LOAN WAS EXPLAINED AND THERE BEING NO CONTRARY MATERIAL BROUGHT ON RECORD BY THE LD. AO, IN MY OPINION IN TERMS OF SECTION 106 OF THE INDIAN EVIDENCE ACT, THE APPELLA NT COULD BE SAID TO HAVE DISCH ONUS CAST ON HIM TO ESTABLISH IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE LOAN TRANSACTION. THE FOREGOING CONCLUSION FINDS SUPPORT IN THE JUDGMENT OF THE HONBLE GAUHATI HIGH COURT IN THE CASE OF SHRI NEMI CHAND KOTHARI V S. CIT (264 ITR 254 HONBLE HIGH COURT HELD AS FOLLOWS: WHEN ONE READS CAREFULLY THE PROVISIONS OF SECTION 68, ONE FINDS NOTHING IN SECTION 68 TO SHOW THAT THE SCOPE OF INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL REMAIN CONFINED TO THE TRANSAC TIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR NOR DOES THE WORDING OF SECTION 68 IND ICATE THAT SECTION 68 DOES NOT AUTHORISE THE REVENUE DEPARTMENT TO MAKE INQUIRY IN TO THE SOURCE(S) OF THE CREDITOR CREDITOR. THE LANGUAGE E MPLOYED BY SECTION 68 CANNOT BE READ TO IMPOSE SUCH LIMITATIONS ON THE POWERS OF THE ASSESSING OFF ICER, THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE THAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASSESSING OFFICER TO THE TRAN SACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDITOR BUT THE SAME MAY BE EXTEN DED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND HIS SUB - CREDITOR. THUS, WHILE THE ASSESSING OFFICER IS, UNDER SECTION 68, FREE TO LOOK INTO T HE SOURCE(S) OF THE CREDITOR AND/OR OF THE SUB CREDITOR, THE BURDEN ON THE ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED. THIS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE INDIAN EVIDENCE ACT. [PARA 12] ON A CAREFUL READING OF SECTION 106 OF THE INDIAN EVIDENCE ACT, IT IS NOTICED THAT WHAT IS THE SOURCE FROM WHERE AN ASSESSEE HAS OBTAINED THE LOAN CAN BE SAFELY HELD TO BE A FACT SITUATION, WHICH IS ACTUALLY WITHIN THE SPECIAL KNO WLEDGE OF THE ASSESSEE ; HENCE, IT IS THE BURDEN OF THE ASSESSEE TO SHOW THE SOURCE(S) FROM WHERE HE HAS RECEIVED THE LOANS. ONCE THE ASSESSEE DISCLOSES THE SOURCE(S) FROM WHER E HE HAS RECEIVED THE LOANS, HIS BURDEN UNDER SECTION 106 STANDS DISCHARGED AND THE ONUS THEN SHIFTS TO THE ASSESSING OFFICER TO SHOW, IF HE WANTS TO TREAT THE LOANS AS AN INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES, THAT THE TRANSACTION(S) BETWEE N THE ASSESSEE AND THE CREDITOR IS/ARE NOT GENUINE OR THAT THE CREDITOR HAS NO CREDITWORTH INESS AND/OR THAT THE MONEY, WHICH ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014 -15 THE RELEVANT ENTRIES IN THE BANK STATEMENT SUPPORTE D THE EXPLANATION FURNISHED REGARDING SOURCE OF THE LOAN AMOUNT. FROM THESE DOCUMENTARY E VIDENCES IT THEREFORE APPEARED THAT THE AND THE LENDER COMPANIES WAS CONDUCTED THROUGH BANK ING CHANNELS. I ALSO FIND THAT THE ENTRIES IN THE BANK STATEMENT OF THE LENDER CLEARLY EXPLAINED THE IMMEDIATE SOURCE FOR MAKING PAYMENT OF THE LOAN AMO UNT. EVEN THOUGH THESE MATERIAL T ON ID. AO'S RECORD, HE DID NOT BRING ANY ADVERSE MATERIAL TO PROVE THAT THE EXPLANATION FURNISHED BY THE APPELLANT WAS FALSE OR THERE WAS ANY MATERIAL INFIRMITY THEREIN. SINCE THE APPELLANT HAD PROVED THAT THE LO AN TRANSACTION WAS CARRIED OUT THROUGH PER BANKING CHANNEL AND THE IMMEDIATE SOURCE FOR PA YMENT OF LOAN WAS EXPLAINED AND THERE BEING NO CONTRARY MATERIAL BROUGHT ON RECORD BY THE LD. AO, IN MY OPINION IN TERMS OF SECTION 106 OF THE INDIAN EVIDENCE ACT, THE APPELLA NT COULD BE SAID TO HAVE DISCH ARGED THE ONUS CAST ON HIM TO ESTABLISH IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE LOAN TRANSACTION. THE FOREGOING CONCLUSION FINDS SUPPORT IN THE JUDGMENT OF THE HONBLE GAUHATI HIGH COURT IN THE CASE OF SHRI NEMI CHAND KOTHARI V S. CIT (264 ITR 254 ) WHEREIN THE WHEN ONE READS CAREFULLY THE PROVISIONS OF SECTION 68, ONE FINDS NOTHING IN SECTION 68 TO SHOW THAT THE SCOPE OF INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL TIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR NOR DOES THE WORDING OF SECTION 68 IND ICATE THAT SECTION 68 DOES NOT AUTHORISE THE REVENUE DEPARTMENT TO MAKE INQUIRY IN TO THE SOURCE(S) OF THE CREDITOR MPLOYED BY SECTION 68 CANNOT BE READ TO IMPOSE SUCH LIMITATIONS ON THE POWERS OF THE ASSESSING OFF ICER, THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE THAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT SACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDITOR BUT THE SAME MAY BE EXTEN DED TO THE TRANSACTIONS, WHICH HAVE CREDITOR. THUS, WHILE THE ASSESSING OFFICER HE SOURCE(S) OF THE CREDITOR AND/OR OF THE SUB - CREDITOR, THE BURDEN ON THE ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED. THIS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE INDIAN EVIDENCE ACT. [PARA 12] EVIDENCE ACT, IT IS NOTICED THAT WHAT IS THE SOURCE FROM WHERE AN ASSESSEE HAS OBTAINED THE LOAN CAN BE SAFELY HELD TO BE A FACT - SITUATION, WHICH IS ACTUALLY WITHIN THE SPECIAL KNO WLEDGE OF THE ASSESSEE ; HENCE, IT IS SOURCE(S) FROM WHERE HE HAS RECEIVED THE LOANS. ONCE THE ASSESSEE DISCLOSES THE SOURCE(S) FROM WHER E HE HAS RECEIVED THE LOANS, HIS BURDEN UNDER SECTION 106 STANDS DISCHARGED AND THE ONUS THEN SHIFTS TO THE ASSESSING THE LOANS AS AN INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES, THAT THE TRANSACTION(S) BETWEE N THE ASSESSEE AND THE CREDITOR IS/ARE NOT GENUINE OR THAT THE CREDITOR HAS NO CREDITWORTH INESS AND/OR THAT THE MONEY, WHICH 7 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 HAS BEEN RECEIVED BY THE ASSESSEE IN THE FORM OF LO ANS, ACTUALLY BELONGS TO THE ASSESSEE HIMSELF. [PARA 13] IN ORDER TO ESTABLISH THE RECEIPT OF CASH CREDIT AS REQUIRED UNDER SECTION 68, THE ASSESSEE MUST SATISFY THREE IMPORTANT CONDITIONS, NAMELY, (I ) IDENTITY OF THE CREDITOR, (II) GENUINENESS OF THE TRANSACTION, AND (III) FINANCIAL CAPABILITY OF THE PERSON GIVING THE CASH CREDIT TO THE ASSESSEE, I.E., THE CREDITWORTHI NESS OF THE CREDITOR. [PARA 14] WHILE SECTION 106 OF THE INDIAN EVIDENCE ACT LIMITS THE ONUS OF THE ASSESSEE TO EXTENT TO HIS PROVING THE SOURCE FROM WHERE HE HAS RECEIVED T HE CASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQU IRY NOT ONLY INTO THE SOURCE(S) OF THE CREDITOR, BUT ALSO OF HIS (CREDITOR'S) SUB-CRED ITORS AND PROVE, AS A RESULT OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESSEE, I N THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITORS, ACTUALLY B ELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTHER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUIRE INTO THE SOURCE/SOURCES FROM WHERE THE CRED ITOR HAS RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE ONLY THE SOURCE(S) FROM WHERE HE HAS HIMSELF RECEIVED THE CREDIT AND IT IS NOT THE DUTY OF THE A SSESSEE TO SHOW THE SOURCE(S) OF HIS CREDITOR NOR IS IT THE BURDEN OF THE ASSESSEE TO PR OVE THE CREDITWORTHINESS OF THE SOURCE(S) OF THE SUB-CREDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN THE INTERPRETATION OF SECTION 68 HA S TO BE IN SUCH A WAY THAT IT DOES NOT MAKE SECTION 106 REDUNDANT. HENCE, THE HARMONIOUS C ONSTRUCTION OF SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF THE INCOME-TAX ACT W ILL BE THAT THOUGH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSE SSEE MUST ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF HIS CREDITOR, THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS AS WEL L AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFINED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR. WHAT FOLLOWS, AS A COROL LARY, IS THAT IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIO NS BETWEEN HIS CREDITOR AND SUB- CREDITORS NOR IS IT THE BURDEN OF THE ASSESSEE TO P ROVE THAT THE SUB-CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE THE CASH CREDIT TO THE CREDITOR FROM WHOM THE CASH CREDIT HAS BEEN EVENTUALLY, RECEIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LOGICALLY FOLLOWS THAT THE CREDITOR'S CREDITWORTHINESS HAS TO BE JUDGED, V IS-A-VIS, THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CRE DITOR OR OF THE GENUINENESS OF THE TRANSACTION, WHICH TOOK PLACE BETWEEN THE CREDITOR AND SUB-CREDITOR AND/OR CREDITWORTHINESS OF THE SUB-CREDITORS, FOR, THESE A SPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. [PARA 15] SINCE IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIN D OUT THE SOURCE(S) FROM WHERE THE CREDITOR HAS ACCUMULATED THE AMOUNT, WHICH HE HAS A DVANCED IN THE FORM OF LOAN TO THE ASSESSEE, SECTION 68 CANNOT BE READ TO SHOW THAT IN THE CASE OF FAILURE OF THE SUB CREDITORS TO PROVE THEIR CREDITWORTHINESS, THE AMOU NT ADVANCED AS LOAN TO THE ASSESSEE BY THE CREDITOR SHALL HAVE TO BE TREATED, AS A CORO LLARY, AS THE INCOME FROM UNDISCLOSED SOURCE OF THE ASSESSEE HIMSELF. [PARA 17] (SEE ALSO PARA 18) THOUGH UNDER SECTION 68, AN ASSESSING OFFICER IS FR EE TO SHOW, WITH THE HELP OF THE INQUIRY CONDUCTED BY HIM INTO THE TRANSACTIONS, WHI CH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDITOR, THAT THE TRANSACTION S BETWEEN THE TWO WERE NOT GENUINE AND THE SUB-CREDITOR HAD NO CREDITWORTHINESS, IT WI LL NOT NECESSARILY MEAN THAT THE LOAN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR WAS IN COME OF THE ASSESSEE FROM UNDISCLOSED SOURCES UNLESS THERE IS EVIDENCE, DIREC T OR CIRCUMSTANTIAL, TO SHOW THAT THE AMOUNT, WHICH HAS BEEN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEE. [PA RA 19] 8 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 IN THE INSTANT CASE, THE ASSESSEE HAD ESTABLISHED T HE IDENTITY OF CREDITORS, NAMELY, N AND 'P'. THE ASSESSEE HAD ALSO SHOWN, IN ACCORDANCE WIT H THE BURDEN, WHICH RESTED ON HIM UNDER SECTION 106 OF THE INDIAN EVIDENCE ACT, THAT THE SAID AMOUNTS HAD BEEN RECEIVED BY HIM BY WAY OF CHEQUES FROM THE CREDITORS AFOREME NTIONED, IN FACT, THE FACT THAT THE ASSESSEE HAD RECEIVED THE SAID AMOUNTS BY WAY OF CH EQUES WAS NOT IN DISPUTE. ONCE THE ASSESSEE HAD ESTABLISHED THAT HE HAD RECEIVED THE S AID AMOUNTS FROM W' AND 'P' BY WAY OF CHEQUES, THE ASSESSEE MUST BE TAKEN TO HAVE PROV ED THAT THE CREDITORS HAD THE CREDITWORTHINESS TO ADVANCE THE LOANS. THEREAFTER, THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROVE THE CONTRARY. ON FAILURE ON THE PART OF THE CREDITORS TO SHOW THAT THEIR SUB-CREDITORS HAD CREDITWORTHINESS TO AD VANCE THE SAID AMOUNTS TO THE ASSESSEE, THESE AMOUNTS AS A COROLLARY, COULD NOT H AVE BEEN AND OUGHT NOT TO HAVE BEEN, UNDER THE LAW, TREATED AS THE ASSESSEE'S INCOME FRO M THE UNDISCLOSED SOURCES, WHEN THERE WAS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENC E ON RECORD THAT THE SAID LOAN AMOUNTS ACTUALLY BELONGED TO, OR WERE OWNED BY, THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER HAD FAILED TO SHOW THAT THE AMOUNTS, WHICH HAD COME TO THE HANDS OF THE CREDITORS FROM THE HANDS OF SUB-CREDITORS, HAD ACTU ALLY BEEN RECEIVED BY THE. SUB- CREDITORS FROM THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE ON RECORD, THE ASSESSING OFFICER COULD NOT HAVE TREATED THE SAID A MOUNTS AS INCOME DERIVED BY THE ASSESSEE FROM UNDISCLOSED SOURCES. THE TRIBUNAL SER IOUSLY FELL IN ERROR IN TREATING THE SAID AMOUNTS AS INCOME DERIVED BY THE ASSESSEE FROM UNDISCLOSED SOURCES MERELY ON THE FAILURE OF THE SUB-CREDITORS TO PROVE THEIR CREDITW ORTHINESS. [PARA 20] THEREFORE, THE ORDER PASSED BY THE TRIBUNAL WAS TO BE SET ASIDE AND QUASHED.' 6. I FIND THAT SIMILAR VIEW WAS ALSO TAKEN BY THE H ON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS APEX THERM PACKAGING PVT LTD (P) LTD (222 TAXMAN 125) WHEREIN IT WAS HELD AS FOLLOWS: '5. HEARD SHRI SUDHIR MEHTA, LEARNED ADVOCATE APPEA RING ON BEHALF OF THE REVENUE. AT THE OUTSET, IT IS REQUIRED TO BE NOTED THAT THE ASS ESSING OFFICER DIRECTED TO MAKE THE ADDITION OF RS. 33,55,011/- UNDER SECTION 68 OF THE INCOME TAX ACT WITH RESPECT TO 17 LENDERS. HOWEVER, IT HAS BEEN FOUND THAT WITH RESPE CT TO MOST OF THE LENDERS, EXCEPT TWO, NECESSARY DOCUMENTS, INCLUSIVE OF CONFIRMATION WITH NAME, ADDRESS AND PAN NUMBERS, COPY OF THE IT RETURN AND ACKNOWLEDGMENT, BALANCE S HEET AND PROFIT AND LOSS ACCOUNT AND COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL T HE PARTIES, EXCEPT TWO PARTIES, WERE FURNISHED BEFORE THE ASSESSING OFFICER. EVEN WITH R ESPECT TO THE REMAINING TWO DEPOSITORS THE ASSESSEE FILED THE CONFIRMATION, ADD RESS AND PAN NUMBERS. UNDER THE CIRCUMSTANCES, WHEN IT WAS FOUND THAT THE ASSESSEE ALREADY DISCHARGED THE INITIAL ONUS CAST UPON HIM WITH RESPECT TO ALL THE CREDITORS AND ACCORDINGLY WHEN THE CIT(A) HAS DELETED THE ADDITION OF RS. 33,55,011/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT AND CONSEQUENTLY DELETED THE DISALLOWANCE OF RS. 3, 10,478/-, WHICH WAS MADE WITH RESPECT TO INTEREST AND WHEN THE SAME HAS BEEN CONF IRMED BY THE ITAT, IT CANNOT BE SAID THAT ITAT HAS COMMITTED ANY ERROR AND/OR ILLEGALITY , WHICH CALLS FOR THE INTERFERENCE OF THIS COURT. IN PARAGRAPH 11, ITAT HAS OBSERVED AND HELD AS UNDE R: 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR THE ASSESSEE H AD RECEIVED LOAN FROM 17 PARTIES AGGREGATING TO 33,35,011/-. THE DETAILS OF WHICH AR E LISTED AT PAGE 2 OF ASSESSING OFFICER ORDER. CIT(A) WHILE DELETING THE ADDITION H AS GIVEN A FINDING THAT THE ASSESSEE HAD FILED BEFORE ASSESSING OFFICER THE CONFIRMATION S WITH NAME, ADDRESS, PAN NUMBER, COPY OF LEDGER ACCOUNT, COPY OF BALANCE SHEET AND P ROFIT AND LOSS ACCOUNT, COPY OF INCOME TAX RETURNS AND COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL THE PARTIES EXCEPT 9 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 TWO DEPOSITORS. WITH RESPECT TO THE TWO DEPOSITORS, THE ASSESSEE HAD FILED CONFIRMATION, ADDRESS AND PAN NUMBERS AND HENCE THE ASSESSEE HAD ALSO DISCHARGED THE INITIAL ONUS CAST UPON THE ASSESSEE WITH RESPECT TO THE TWO CRED ITORS. HE HAS FURTHER NOTED THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOAN AC COUNT WERE DULY REFLECTED IN THE BALANCE SHEET OF LENDERS CIT(A) HAS FURTHER HELD ON CE THE ONUS WAS FULFILLED BY THE ASSESSEE, IT WAS FOR THE ASSESSING OFFICER TO EXAMI NE AND BRING ANY MATERIAL ON RECORD WHICH MAY HELP IN REBUTTING THE ONUS OF ASSESSEE. T HE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD IN ITS SUPPORT CIT(A ) WHILE DELETING THE ADDITION HAS ALSO RELIED ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF DY. CIT V. ROHINI BUILDERS [2002] 256 ITR 360 AND THE DECISION OF HON'BLE SUPREME COURT, IN THE CASE OF ORISSA CORPN. LTD. 153 ITR 78. BEFORE US, N OTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO CONTROVERT THE FINDINGS OF CIT(A) . REVENUE HAS RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF N.R. POR TFOLIO (SUPRA) WE HOWEVER FIND THAT THE RATIO OF THE AFORESAID DELHI HIGH COURT DECISIO N ARE DISTINGUISHABLE ON FACTS AND THEREFORE CANNOT BE APPLIED TO THE FACTS OF THE PRE SENT CASE. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDE R OF CIT(A) AND THUS DISMISS THIS GROUND OF REVENUE.' 6. WE ARE IN COMPLETE AGREEMENT WITH THE REASONING GIVEN BY THE CIT(A) AS WELL AS THE ITAT. WHEN FULL PARTICULARS, INCLUSIVE OF TH E CONFIRMATION WITH NAME, ADDRESS AND PAN NUMBER, COPY OF THE INCOME TAX RETURNS, BAL ANCE SHEET, PROFIT AND LOSS ACCOUNTS AND COMPUTATION OF THE TOTAL INCOME IN RES PECT OF ALL THE CREDLTORS/LENDER WERE FURNISHED AND WHEN IT HAS BEEN FOUND THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOAN ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 33,55,011/- , UNDER THE CIRCUMSTANCES, NO QUESTION OF LAW, MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT TAX APPEAL. ACCORDINGLY, THE PRESENT TAX APPEAL DESERVES TO BE DISMISSED AND IS ACCORDINGLY DISMISSED,' 7. FURTHER RELIANCE IS PLACED ON THE DECISION OF HO N'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT-III V DATAWARE PVT. LTD. ITA NO. 263 OF 2011 WH EREIN IT WAS HELD AS UNDER: - IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSIN G OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER G ETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN A CCEPTED BY THE ASSESSING OFFICER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, T HE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMITTE D BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND TH E GENUINENESS OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. 8. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN TH ESE JUDGMENTS AND HAVING REGARD TO THE FACTS DISCUSSED IN THE FOREGOING, I THEREFORE HOLD THAT T HE ADDITION OF RS.1,50,10,000/- MADE U/S 68 WAS NOT TENABLE ON FACTS AND IN LAW AND THE SAME IS DELETED. SIMILAR IS THE TREATMENT TO BE GIVEN TO THE AMOUNTS OF INTEREST PAID BY THE APPELLANT TO THE LOAN CREDITORS, BEING AN AMOUNT OF RS. 13,34,669/-. THIS IMPUGNED AMOUNT IS ALSO DIRECTED TO BE DELETED. IN EFFECT, THE SUBSTANTIAL GROUNDS 1 TO 4 STAND ALLOWED. 10 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 7. AGGRIEVED BY THE AFORESAID ACTION OF THE LD. CIT (A) DELETING THE ADDITION OF RS.1.50 CRORES U/S 68 OF THE ACT AND RS. 13,34,669/ - ADDED U/S 69 OF THE ACT, THE REVENUE HAS PREFERRED THIS APPEAL BEFORE US. 8. ASSAILING THE ACTION OF THE LD. CIT(A), SHRI SUP RIYO PAUL, LD. DR SUBMITTED THAT BASED ON INFORMATION FROM THE INVESTIGATION WING TH AT THE ASSESSEE HAD TAKEN UNSECURED LOAN TO THE TUNE OF RS. 1.50 CRORES FROM TEN (10) S HELL COMPANIES CONTROLLED AND OPERATED BY SHRI RAJ KUMAR KOTHARI WHO HAVE ACCEPTE D BEFORE THE INVESTIGATION WING THAT HE THROUGH HIS LEGAL ENTITIES (PRIVATE LIMITED COMPANIES) IS INDULGING IN PROVIDING BOGUS SHARE CAPITAL AND UNSECURED LOAN IN LIEU OF C OMMISSION, THE AO HAD DRAWN ADVERSE INFERENCE AND MADE ADDITION AGAINST THE ASS ESSEE. THE LD. DR REFERRED TO THE SUBMISSION GIVEN BY SHRI RAJ KUMAR KOTHARI WHICH HA S BEEN REPRODUCED BY THE AO AT PAGE 6 TO 7 OF HIS ORDER. REFERRING TO THE DEPOSITI ON MADE BY SHRI RAJ KUMAR KOTHARI RECORDED U/S 131 OF THE ACT DATED 2.03.2016 ON OATH IN FRONT OF THE DDIT (INV) WHEREIN HE HAS ADMITTED OF DOING THIS ILLEGAL ACT OF PROVID ING ACCOMMODATION ENTRY IN DIFFERENT FORMS TO MANY BENEFICIARIES IN LIEU OF COMMISSION A ND HAS ALSO GIVEN THE NAME OF THE LIST OF 49 COMPANIES OPERATED BY HIM WHICH ARE REP RODUCED BY THE AO AT PAGE 5 OF HIS ORDER. AFTER GETTING THIS INFORMATION THE AO FOUND THAT THE ASSESSEE IN THIS ASSESSMENT YEAR HAS TAKEN UNSECURED LOAN FROM TEN (10) OF THES E COMPANIES WHICH HAS BEEN LISTED (SUPRA) AND FROM WHICH THE ASSESSEE HAS TAKEN LOAN TO THE TUNE OF RS. 1,50,10,000/- AND HAS SUPPOSED TO HAVE GIVEN INTEREST TO THE TUNE OF RS. 13,34,669/- AND THEREFORE THE AO ADDED BOGUS UNSECURED LOAN TO THE TUNE OF RS. 1,50, 10,000/- U/S 68 OF THE ACT AND THE INTEREST AMOUNT TO THE TUNE OF RS. 13,34,669/- U/S 69 OF THE ACT. MOREOVER, ACCORDING TO LD. D.R, THE AO HAS NOT ONLY RELIED ON THE DEPOSITI ON OF SHRI RAJ KUMAR KOTHARI ON 2.3.2016 (SUPRA), THE AO OF THE ASSESSEE HAS HIMSEL F SUMMONED SHRI KOTHARI U/S 131 OF THE ACT AND SHRI KOTHARI APPEARED BEFORE THE AO ON 6.12.2016 WHO ADMITTED THAT HE IS THE DIRECTOR OF ALL THE TEN (10) LENDER COMPANIES WHICH HAVE GIVEN UNSECURED LOAN TO ASSESSEE. AND THE AO REFERRED TO SOME ASSESSMENT PR OCEEDINGS GOING ON IN SOME CASE BEFORE THE ACIT-34, KOLKATA FROM WHERE HE GATHERED THAT SHRI RAJ KUMAR KOTHARI COULD NOT GIVE CREDIBLE REPLIES TO THE QUERIES RAIS ED BY THAT OFFICER IN RESPECT OF CREDITWORTHINESS OF THESE COMPANIES AS WELL AS SOUR CE OF THE FINANCE ADVANCED AS LOAN 11 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 AND DREW OUR ATTENTION TO THESE FACTS STATED IN PAG E 2 OF HIS ASSESSMENT ORDER. ACCORDING TO LD. D.R THE AO HAS ALSO LOOKED INTO THE FINANCE OF M/S VIVEK TRACOM PVT. LTD. AND M/S PARITOSH ELECTRICAL PVT. LTD. AND HAS FOUND THA T THESE ARE NOTHING BUT A BOGUS SHELL COMPANIES. THE LD. D.R HAS POINTED OUT THAT AS PER THE REQUEST OF THE ASSESSEE OPPORTUNITY WAS GRANTED TO THE ASSESSEE FOR CROSS-E XAMINING SHRI RAJ KUMAR KOTHARI HOWEVER THE ASSESSEE DID NOT AVAIL IT AND THEREFORE THE AO HAS RIGHTLY MADE THE ADDITION U/S 68 AND 69 OF THE ACT TO THE TUNE OF RS. 1,50,10 ,000/- AND RS. 13,34,669/- THEREFORE ACCORDING TO LD. D.R, THE LD. CIT(A) ERRED IN DELET ING THE ADDITION WHICH DECISION NEEDS TO BE REVERSED AND THE AOS ORDER BE UPHELD. 9. PER CONTRA, THE LD. A.R. OF THE ASSESSEE SHRI M IRAJ D SHAH AT THE OUTSET POINTED OUT THAT THE CASE OF THE ASSESSEE IS SQUARELY COVER ED BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF M/S OVERTOP MARKETING PVT. LTD. IN ITA NO. 686/KOL/2019 FOR AY 2015-16 DATED 15.03.2021. FURTHER, COMING TO THE MERITS OF THE ADDITION MADE BY THE AO, LD. A.R. CONTENDED THAT THE STATEMENT OF SHRI RAJ KUMAR KOTHARI DATED 02.03.2016 BEFORE THE INVESTIGATION WING CANNOT BE RELIED UPON BECAUS E HE HAS RETRACTED THE SAME WITHIN TEN (10) DAYS OF GIVING THE PURPORTED CONFESSION/AD MISSION. THE LD. A.R. DREW OUR ATTENTION TO PAGE 38 OF THE PB WHEREIN THE SHRI RAJ KUMAR KOTHARI HAS FILED AN AFFIDAVIT WHICH WAS SWORN BEFORE THE FIRST CLASS MA GISTRATE, KOLKATA WHICH IS FOUND PLACED IN PAGES 38 TO 41 OF PB WHEREIN HE SPECIFICA LLY STATED THAT DUE TO THREAT AND COERCION FROM THE OFFICER OF THE INVESTIGATION WING THAT IF HE DOES NOT OBLIGE THE DEPARTMENT BY STATING WHAT THEY WANT TO BE RECORDED , THEY WOULD RUIN HIM BY CONDUCTING MULTIPLES RAIDS AT HIS HOUSE/OFFICE PREM ISES AND ULTIMATELY HIS FAMILY WILL BE ON THE STREET AND THAT THE STATEMENT WAS RECORDED I N THE NIGHT AT 10.30 PM AND THAT HE WAS TREATED AS CRIMINAL; AND SINCE THE FACTS AS REC ORDED BY THE INVESTIGATION WING WAS NOT CORRECT, HE HAD RETRACTED THE SAME WITHIN 10 DA YS. ACCORDING TO LD. A.R. THEREFORE, THE AO ERRED IN RELYING ON THIS RETRACTED STATEMENT WHICH HE HAS REPRODUCED IN THE ASSESSMENT ORDER. MOREOVER, IT WAS POINTED OUT BY T HE LD. A.R. THAT PURSUANT TO THE SUMMONS ISSUED BY THE AO DATED 7.12.2016, SHRI RAJ KUMAR KOTHARI HAD APPEARED BEFORE THE AO OF THE ASSESSEE; AND AO HAS RECORDED HIS STATEMENT WHICH IS FOUND PLACED AT PAGE 31 TO 37 OF THE PB WHEREIN AFTER TAKING OAT H OF SHRI RAJ KUMAR KOTHARI WHEN 12 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 THE AO QUESTIONED HIM, HE HAS CONFIRMED THE GENUINE NESS OF THE LOAN TRANSACTION WITH THE ASSESSEE AND EVEN HE HAS SHOWN THE SOURCE OF LO AN WHICH WAS REFUND OF ANOTHER LOAN; AND NOT ONLY THAT THE LD AR BROUGHT TO OUR NO TICE THAT EVEN IN THE STATEMENT RECORDED BY DDIT(INV) ON 2.3.2016 SHRI KOTHARI HAS ONLY STATED ABOUT PROVIDING CERTAIN WRONG DOINGS/ ACCOMMODATION ENTRY IN RESPECT OF ONE VENKTESH GROUP AND HAS NOT NAMED THE ASSESSEE FIRM IN ANY WRONG DOINGS. FURTHE R ACCORDING TO LD. A.R, THE LD. D.R WAS WRONG TO ASSERT THAT DESPITE THE AO GIVING OPPORTUNITY TO ASSESSEE TO CROSS- EXAMINE SHRI RAJ KUMAR KOTHARI, THE A.R. OF THE ASS ESSEE REPRESENTING THE ASSESSEE DID NOT AVAIL THE OPPORTUNITY IS PATENTLY WRONG BECAUSE THE AO HIMSELF ACKNOWLEDGES IN THE ASSESSMENT ORDER THAT THE LD. A.R. OF THE ASSESSEE APPEARED FOR CROSS-EXAMINATION OF SHRI RAJ KUMAR KOTHARI ON 27.2.2016, HOWEVER SINCE SHRI KOTHARI DID NOT TURN UP, IT COULD NOT BE DONE. THEREFORE, ACCORDING TO THE LD. AR, WITHOUT AN IOTA OF EVIDENCE THE LENDER COMPANIES WERE BRANDED AS BOGUS AND SINCE TH E ASSESSEE HAS FURNISHED THE LENDERS/LEGAL ENTITIES PAN NO. TO SHOW THEIR IDENTI TY AND DOCUMENTS TO SUBSTANTIATE THAT THE ASSESSEE HAD GIVEN INTEREST AFTER DEDUCTING TDS , THE AO ERRED IN CASTING ASPERSIONS ON THE LENDER COMPANIES AS BOGUS; AND THAT THE LD. CIT(A) WHILE GIVING RELIEF TO THE ASSESSEE HAS RIGHTLY TAKEN NOTE OF THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF DATAWARE PVT. LTD. (SUPRA) WHEREIN THE HON BLE CALCUTTA HIGH COURT HAS HELD THAT WHEN THE IDENTITY OF THE LENDER COMPANY ARE CL EAR, THEN IF THE AO STILL DOUBTS THE CREDITWORTHINESS OF THE LENDER COMPANIES, THEN HE S HOULD ENQUIRE FROM THE AO OF THE LENDER COMPANIES AND THEREAFTER ONLY DRAW ANY ADVER SE INFERENCE AGAINST THE LENDER COMPANIES IN RESPECT OF THE CREDITWORTHINESS. THE L D. A.R. SUBMITTED THAT NO SUCH EXERCISE/ENQUIRY WAS CONDUCTED BY THE ASSESSEES AO , THEREFORE, THE LD. CIT(A) RIGHTLY DELETED THE ADDITION AFTER REFERRING TO CATENA OF J UDICIAL PRECEDENT. THEREFORE, HE DOES NOT WANT US TO INTERFERE WITH THE WELL REASONED ORD ER OF THE LD. CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. IT IS NOTED THAT THE ASSESSEE COMPANY HAS AVAILED FOR LOAN THIS YEAR FRO M SIX (6) ENTITIES TO THE TUNE OF RS.1,50,10,000/- AND IT IS NOTED THAT ALL THE LOANS TAKEN ARE INTEREST BEARING; AND THE INTEREST HAVE BEEN PAID BY THE ASSESSEE TO THESE SI X (6) LENDERS OF RS.1,50,10,000/- AS 13 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 WELL AS THAT OF CARRY FORWARD LOAN FROM FOUR (4) OT HER COMPANIES [REFER TO LIST AT PAGE 2] (SUPRA) REGULARLY AFTER DEDUCTING TDS ON THE SAID P AYMENT OF INTEREST OF RS.13,34,669/-. 11. IT IS NOTED THAT PURSUANT TO THE NOTICE ISSUED BY THE A.O U/S 133(6) OF THE ACT, THE TEN (10) LENDER COMPANIES ( WHICH INCLUDES SIX (6) LENDER COMPANIES OF THIS YEA R AND THE CARRY FORWARD LOAN FROM EARLIER YEAR TO WHICH INTE REST HAVE BEEN PAID ) HAVE DIRECTLY REPLIED TO THE AO BY FILING THE FOLLOWING DOCUMENTS OF THEM: (A) COPY OF INCOME-TAX ACKNOWLEDGMENT, (B) COPY OF AUDITED ACCOUNTS FOR FY 2014-15, (C) COPY OF LONG-TERM INVESTMENT, (D) COPY OF BANK STATEMENT ASCERTAINING TRANSACTION, (E) SOURCE OF LOAN AND (F) TDS DEDUCTION STATEMENT. 12. IT IS NOTED THAT THE LENDER COMPANIES HAVE DULY FURNISHED THEIR PAN AND THE REGISTERED ADDRESSES AND ALSO BROUGHT TO THE NOTICE OF THE A.O THAT THEY ARE LEGAL ENTITIES/CORPORATE REGISTERED WITH THE REGISTRAR OF COMPANIES (ROC) AND HAVE THEIR RESPECTIVE REGISTERED ADDRESSES IN THE PUBLIC DOMAI N. THE AMOUNTS IN QUESTION WERE CREDITED THROUGH BANKING CHANNELS. THE NAMES, PANS AND LOAN AMOUNTS AND THE INTERESTS PAID FOR WHICH TDS HAS BEEN DEDUCTED ARE AS UNDER: SL. NO. NAME UNSECURED LOANS RECEIVED DURING FY 2013-14 INTEREST PAID PAN NO. 1 A.K. CONSTRUCTION PVT. LTD. 45000001 126477 AACC A2817L 2 BHIKSU BARTER PVT. LTD. - 120000 AABCB1315M 3 DIVYA ELECTRONICS PVT. LTD. 10000 119974 AAACD97 21C 4 MAHESWARI MERCHANTS (P) LTD. 1000000 8877 AABCM6 860C 5 PARITOSH ELECTRICALS (P) LTD. 1000000 123616 AAB CP5013E 6 POTENTIAL ELECTRICALS & ELECTRONICS (P) LTD. 100 0000 121808 AABCP5014D 7 RAJSHREE DEVELOPER ENTREPRENEURS (P) LTD. - 1200 00 AABCR2000D 8 RANBHUMI MARKETING PVT. LTD. - 185753 AAECR5842G 9 VIVEK TRACOM PVT. LTD. 7500000 359342 AAACV8670J 10 ZIGMA ELECTRICALS PVT. LTD. - 48822 AAACZ0831B TOTAL 15010000 1334669 13. DESPITE THE ASSESSEE FILING ALL THESE DOCUMENTS FROM WHICH IT CAN BE NOTED THAT THE LENDER COMPANIES ARE REGULAR INCOME-TAX ASSESSE ES, STILL THE A.O HAD BRANDED THEM AS SHELL/PAPER COMPANIES ON THE STRENGTH OF THE STA TEMENT OF SHRI RAJ KUMAR KOTHARI WHOSE STATEMENT WAS RECORDED U/S 131 OF THE ACT ON 02.03.2016 BY THE INVESTIGATION WING U/S 131 OF THE ACT IN THIRD PARTY PROCEEDINGS AND OF COURSE BEHIND THE BACK OF ASSESSEE. FURTHER, IT WAS BROUGHT TO OUR NOTICE BY THE LD. AR THAT AO ON THE BASIS OF 14 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 CONFIRMATION/ADMISSION OF SHRI RAJ KUMAR KOTHARI TH AT HE IS AN ENTRY PROVIDER WAS THE BASIS OF BRANDING THE LENDER COMPANIES AS SHELL COM PANIES, HOWEVER IT WAS BROUGHT TO OUR NOTICE THAT SHRI KOTHARI HAD RETRACTED THE SAM E WITHIN TEN (10) DAYS BY SWEARING AN AFFIDAVIT BEFORE THE FIRST CLASS MAGISTRATE OF KOLK ATTA WHICH IS FOUND PLACED AT PAGES 38 TO 41 OF THE PB-II. FROM A PERUSAL OF THE CONTENTS OF THE AFFIDAVIT, IT IS NOTED THAT SHRI RAJ KUMAR KOTHARY HAS ALLEGED THAT HE WAS WHISKED A WAY BY THE OFFICERS OF THE DEPARTMENT ALONG WITH POLICEMEN ON 02.03.2016 AND T HEY KEPT HIM CONFINED IN THEIR OFFICE TILL LATE NIGHT; AND BY EXERTING THREAT AND COERCION HAS EXTRACTED SOME STATEMENTS/CONFESSION/ADMISSION. ELABORATING FURTHE R HE SAYS THAT OFFICERS THREATENED TO CONDUCT SEARCH AND SURVEY IN HIS COMPANIES AND KEPT ON REMINDING HIM THAT THEY WILL RUIN HIM AND HIS FAMILY. IN THE BACK-DROP OF THE AF ORESAID THREAT AND COERCION, HE MADE THE STATEMENT IN ACCORDANCE TO THEIR WISHES, AND WH ICH WAS NOT THE TRUTH OF THE CONTENTS RECORDED. IN THIS CONTEXT, WE NOTE THAT WITHIN TEN (10) DAYS ( AFTER GIVING THE STATEMENT TO INVESTIGATION WING ), HE HAS RETRACTED THE STATEMENT BY SWEARING THE A FFIDAVIT. THEREFORE, ACCORDING TO THE LD. AR, THE STATEMENT OF SHRI RAJ KUMAR KOTHARI WHICH WAS THE ONLY BASIS OF WHICH THE A.O BRANDED THE LENDER COMPANIES AS SHELL/PAPER COMPANIES COULD NOT HAVE BEEN USED AGAINST THE ASSESSEE AND IN ANY CASE DOES NOT HAVE ANY EVIDENTIARY VALUE, SINCE RETRACTED AND COULD NOT HAVE BEEN ACTE D UPON AGAINST THE ASSESSEE. MOREOVER, ACCORDING TO LD.AR, SHRI RAJ KUMAR KOTHAR I WHEN SUMMONED BY THE A.O OF THE ASSESSEE ON 06.12.2016 HAS DENIED TO BE PROVIDI NG ACCOMMODATION ENTRY AND HAS CONFIRMED THE LOAN TRANSACTION WITH THE ASSESSEE AN D EVEN STATED THAT THE SOURCE OF LOAN WAS FROM REFUND OF ANOTHER LOAN (REFER PAGE 17-23 P B). SO, IN THE LIGHT OF DIRECT EVIDENCE OF SHRI RAJ KUMAR KOTHARY, NO ADVERSE INFE RENCE COULD HAVE BEEN DRAWN AGAINST THE LENDER COMPANIES. SO, ACCORDING TO LD. AR, IN ANY CASE THE STATEMENT OF KOTHARI CANNOT BE THE BASIS FOR DRAWING ADVERSE INF ERENCE AGAINST THE ASSESSEE. 14. WE NOTE THAT THE LD. CIT(A) HAS TAKEN NOTE OF T HE FACT THAT ALL THE TEN (10) LENDER COMPANIES ARE INCOME-TAX ASSESSEES, AND THE INTERES T PAID BY THE ASSESSEE ON THE LOAN TAKEN BY IT ARE DULY SUBJECTED TO TDS AND THE LENDE R COMPANIES HAVE SHOWN THE SAID INTEREST INCOME ON WHICH THEY HAVE PAID TAX. WE NOT E THAT ALL THE TEN (10) LENDER COMPANIES ARE CORPORATE ENTITIES WHICH ARE INCORPOR ATED BY THE ROC AND THUS THE 15 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 EXISTENCE AND STATUS OF THEM CAN BE TAKEN NOTE BY T HE A.O FROM THE MASTER DATA AVAILABLE IN THE PUBLIC DOMAIN/WEBSITE OF ROC; AND IT WAS BROUGHT TO OUR NOTICE THAT THESE COMPANIES ARE STILL ACTIVE COMPANIES WHICH ARE DISCERNABLE FROM ROC WEBSITE. FURTHER, WE NOTE THAT ALL THE LENDER COMPANIES HAVE THEIR RESPECTIVE PAN IDENTITY AND THE JURISDICTION UNDER WHOM THEY ARE ASSESSED ARE A VAILABLE IN THE ITR FILED BY THEM DIRECTLY TO THE A.O PURSUANT TO THE SECTION 133(6) NOTICE ISSUED BY THE A.O AND TRANSACTIONS HAVE BEEN MADE THROUGH ACCOUNT PAYEE C HEQUES AND THE HONBLE CALCUTTA HIGH COURT HAS SAID THAT A.O OF THE ASSESSEE WHO BO RROWS OR IS IN RECEIPT OF CREDIT/LOAN ( LIKE ASSESSEE IN THIS CASE ) CANNOT BRAND THE LENDER COMPANY AS LACKING IN CREDITWORTHINESS, UNLESS THE A.O UNDERTAKES THE EXE RCISE OF ENQUIRING FROM THE A.O OF THE LENDER COMPANIES AND IN CASE IF THE A.O OF THE LENDER COMPANIES HAVE ACCEPTED THE TRANSACTIONS SHOWN BY THEM WITH THE ASSESSEE COMPAN Y, THEN THE A.O OF THE ASSESSEE COMPANY CANNOT IMPUTE UN-CREDITWORTHINESS OF THE LE NDER COMPANY AND REFERRED TO THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN CIT VS. M/S DATAWARE PRIVATE LIMITED IN ITAT NO. 263 OF 2011 DATE: 21ST SEPTEMBER, 2011 GA NO.2856 OF 2011 HELD AS UNDER: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESS ING OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER GETTING TH E PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE AS SESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINE NESS' OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFI CER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NO T ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASS ESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENE SS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQUIRED TO B E FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. 15. FURTHER THE LD. CIT(A) HAS NOTED THAT PURSUANT TO THE NOTICE U/S 133(6) OF THE ACT, THE LENDER COMPANIES HAVE DIRECTLY FILED BEFOR E THE A.O., THE BALANCE SHEET, 16 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 RELEVANT BANK STATEMENT ETC. WE NOTE FROM A PERUSAL OF THE BALANCE SHEET OF THE LENDING COMPANIES THE FOLLOWING FACTS WHICH ARE NOTED IN TH E CHART AS UNDER: 16. THUS FROM A PERUSAL OF THE ABOVE DETAILS, IT CA N BE SEEN THAT THE LENDER COMPANIES HAVE SUFFICIENT CREDITWORTHINESS TO GIVE LOAN TO TH E ASSESSEE COMPANY AND CANNOT BE TERMED AS SHELL COMPANIES BY SIMPLY BASING HIS (A.O ) CONCLUSION ON THE STRENGTH OF SELECTED QUESTIONS AND ANSWERS GIVEN BY SHRI RAJ KU MAR KOTHARI AND THAT TOO RECORDED ON THIRD PARTY PROCEEDINGS AND WHICH WERE ADMITTEDL Y RECORDED BEHIND THE BACK OF THE ASSESSEE. MOREOVER, SHRI RAJ KUMAR KOTHARI HAS RETR ACTED THE SAID STATEMENT RECORDED ON 02.03.2016 WITHIN TEN (10) DAYS AS DISCUSSED SUP RA AND HAS ALLEGED THREAT AND COERCION ON THE PART OF OFFICERS WHO ELICITED THE S TATEMENT AS THEY WISHED, SO THE STATEMENT/TRUTH OF THE CONTENTS OF THE STATEMENT CA NNOT BE RELIED UPON BY THE A.O AND DOING SO IS BAD IN LAW; AND THEREFORE ACCORDING TO US, IT COULD NOT HAVE BEEN THE BASIS TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE COMPANY IN RESPECT OF LOAN TAKEN BY IT. MOREOVER, WE NOTE THAT THE A.O HAD SUMMONED SHRI RA J KUMAR KOTHARI AND HIS S.NO NAME RESERVE & SURPLUS TURNOVER UNSECURED LOANS INTERE ST PAID 1 A.K CONSTRUCTION PVT. LTD 12,29,72,034 1,87,65,51 4 4500000 1,26,477 2 BHIKSU BARTER PVT LTD 7,91,73,633 54,70,902 - 1, 20,000 3 DIVYA ELECTRONICS PVT LTD 13,15,03,765 1,48,76,7 14 10000 1,19,974 4 MAHESWARI MERCHANTS PVT LTD 8,11,11,229 63,16,02 3 1000000 8,877 5 PARITOSH ELECTRONICS PVT LTD 11,90,71,929 1,60,8 9,902 1000000 1,23,616 6 POTENTIAL ELECTRICALS & ELECTRONICS. PVT LTD 10,4 7,32,610 1,11,19,141 1000000 1,21,808 7 RAJSHREE DEVELOPER ENTREPRENEURS PVT LTD 10,56,9 5,626 1,11,75,079 - 1,20,000 8 RANBHUMI MARKETING PVT LTD 2,99,43,843 64,86,166 - 1,85,753 9 VIVEK TRACOM PVT LTD 15,71,97,394 15,12,38,564 7 500000 3,59,342 10 ZIGMA ELECTRICALS PVT LTD 7,20,36,614 64,20,930 - 48,822 TOTAL 15010000 1334669 17 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 STATEMENT HAS BEEN RECORDED BY HIM FROM WHICH HE CO ULD NOT ELICIT ANY INCRIMINATING MATERIAL/STATEMENT AGAINST THE ASSESSEE/LOAN TRANSA CTION OR CAN TERM THE ASSESSEE AS A BENEFICIARY. AND NEITHER THE AO HAS CARRIED OUT ANY ENQUIRY REGARDING CREDITWORTHINESS OF THE LENDERS FROM THEIR RESPECTIVE AOS, WITHOUT WHICH AO OF THE ASSESSEE COULD NOT HAVE DRAWN ADVERSE VIEW OF UN-WORTHINESS OF CREDIT IN RESPECT OF LENDERS AS HELD BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S DATA WARE PRIVATE LIMITED (SUPRA), SO THE A.O OF THE ASSESSEE ERRED IN BRANDING THE LENDE R COMPANIES AS LACKING IN CREDITWORTHINESS. 17. THEREFORE, WHEN THE ASSESSEE AS WELL AS THE LEN DERS HAD DISCHARGED THE ONUS UPON THEM TO PROVE THE IDENTITY, CREDITWORTHINESS AND GE NUINENESS OF THE LOAN TRANSACTION, THE AO COULD HAVE DISBELIEVED THE TRANSACTION ONLY ON T HE BASIS OF RELIABLE MATERIAL TO DISPROVE THE SAME. IN THIS CASE THE AO TOOK THE SU PPORT OF THE STATEMENT GIVEN BY SHRI RAJ KUMAR KOTHARI RECORDED IN THIRD PARTY PROCEEDIN GS TO TAKE AN ADVERSE VIEW AGAINST THE ASSESSEE. IN SUCH A SITUATION, THE AO OUGHT TO HAVE CONFRONTED THE ASSESSEE WITH THE ENTIRE STATEMENT OF SHRI RAJ KUMAR KOTHARI OR MATE RIAL AGAINST THE ASSESSEE IF ANY WITH HIM RATHER THAN GIVING ONLY SELECTIVE QUESTION AND ANSWER; AND IF THE AO FELT THAT THIS PERSON, ORAL TESTIMONY IS INCRIMINATING AGAINST THE ASSESSEE, THEN IN ALL SERIOUSNESS HE SHOULD HAVE AFTER SUMMONING HIM BEFORE HIM OUGHT TO HAVE ELICITED, IF ANY, DIRECT ORAL EVIDENCE AGAINST THE ASSESSEE AND AFTER RECORDING T HE SAME HE (AO) SHOULD THEREAFTER GAVE A COPY OF THE RECORDED STATEMENT AND THEN AFFO RDED AN OPPORTUNITY TO ASSESSEE TO CROSS-EXAMINE THE MAKERS OF THE INCRIMINATING ORAL TESTIMONY AND THEREAFTER THE AO WOULD HAVE BEEN JUSTIFIED IN USING THE INCRIMINATIN G MATERIAL/ORAL TESTIMONY AGAINST THE ASSESSEE, WHICH IN THIS CASE, EVEN THOUGH THE AO HA D SUMMONED SHRI RAJ KUMAR KOTHARI AND THOUGH HE ASKED SIXTY (60) NUMBER OF QU ESTIONS (REFER 31-37PB) THE AO COULD NOT SUCCESSFULLY ELICIT INCRIMINATING EVIDENC E AGAINST THE ASSESSEE AND ON THE OTHER HAND, SHRI RAJ KUMAR KOTHARI HAS CONFIRMED THAT LOA N TRANSACTION WITH THE ASSESSEE AS GENUINE AND THE AO AFTER HAVING RECORDED DIRECTLY T HE STATEMENT OF SHRI RAJ KUMAR KOTHARI SHOULD NOT HAVE RELIED ON THE EARLIER STATE MENT RECORDED BY THE INVESTIGATION WING IN THIRD PARTY PROCEEDINGS WHICH HAS BEEN RETR ACTED. MOREOVER THE AO HAS NOT FOUND ANY INFIRMITY WITH THE DOCUMENTS FILED BY THE ASSESSEE TO PROVE THE LOAN 18 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 TRANSACTIONS AS DISCUSSED SUPRA. SO, OTHER THAN TH E THIRD PARTY STATEMENT, WHICH DID NOT INCRIMINATE THE ASSESSEE, AND WHICH WAS RETRACTED, AND WHILE GIVING STATEMENT TO AO SHRI KOTHARI HAVING CONFIRMED THE LOAN TRANSACTION WITH ASSESSEE AND SINCE SHRI KOTHARI HAS CORROBORATED THE TRANSACTION, THE RETRACTED STA TEMENT SHOULD NOT HAVE BEEN USED AS THE BASIS TO DRAW ADVERSE INFERENCE AGAINST THE ASS ESSEE. THEREFORE, NO ADDITION WAS WARRANTED. TO COME TO MY AFORESAID DECISION, WE AL SO RELY ON THE RATIO OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. M/S. ODEON BUILDERS PVT. LTD. IN REVIEW PETITION (C) DIARY NO. 22394 OF 2019 IN CIVI L APPEAL NOS. 9604 & 9605 OF 2018 DATED 21.08.2019 WHEREIN THE HONBLE SUPREME C OURT HAS HELD AS UNDER: WE HAVE PERUSED THE REVIEW PETITION AND FIND THAT THE TAX EFFECT IN THIS CASE IS ABOVE RS.L CRORE, THAT IS, RS.6,59,27,298/-. ORDINARILY, THEREFORE, W E WOULD HAVE RECALLED OUR ORDER DATED 17TH SEPTEMBER, 2018, SINCE THE ORDER WAS PASSED ONLY ON THE BASIS THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS.1 CRORE. HOWEVER, ON GOING THROUGH THE JUDGMENTS OF THE CIT, ITAT AND THE HIGH COURT, WE FIND THAT ON MERITS A DISALLOWANCE OF RS.19,39,60,866/- WAS BASE D SOLELY ON THIRD PARTY INFORMATION, WHICH WAS NOT SUBJECTED TO ANY FURTHER SCRUTINY. THUS, TH E CIT (APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE STATING: 'THUS, THE ENTIRE DISALLOWANCE IN THIS CASE IS BASE D ON THIRD PARTY INFORMATION GATHERED BY THE INVESTIGATION WING OF THE DEPARTMENT, WHICH HAVE NOT BEEN INDEPENDENTLY SUBJECTED TO FURTHER VERIFICATION BY THE AO WHO HAS NOT PROVIDED THE COPY OF SUCH STATEMENTS TO THE APPELLANT, THUS DENYING OPPORTUNI TY OF CROSS EXAMINATION TO THE APPELLANT, WHO HAS PRIMA FACIE DISCHARGED THE INITI AL BURDEN OF SUBSTANTIATING THE PURCHASES THROUGH VARIOUS DOCUMENTATION INCLUDING P URCHASE BILLS, TRANSPORTATION BILLS, CONFIRMED COPY OF ACCOUNTS AND THE FACT OF PAYMENT THROUGH CHEQUES, & VAT REGISTRATION OF THE SELLERS & THEIR INCOME TAX RETU RN. IN VIEW OF THE ABOVE DISCUSSION IN TOTALITY, THE PURCHASES MADE BY THE APPELLANT FR OM M/S PADMESH REALTORS PVT. LTD. IS FOUND TO BE ACCEPTABLE AND THE CONSEQUENT DISALLOWA NCE RESULTING IN ADDITION TO INCOME MADE FOR RS.19,39,60,866/-, IS DIRECTED TO BE DELET ED. ' THE ITAT BY ITS JUDGMENT DATED 16 TH MAY, 2014 RELIED ON THE SELF SAME REASONING AND DI SMISSED THE APPEAL OF THE REVENUE. LIKEWISE, THE HIGH COUR T BY THE IMPUGNED JUDGMENT DATED 5 TH JULY, 2017, AFFIRMED THE JUDGMENTS OF THE CIT AND ITAT AS CONCURRENT FACTUAL FINDINGS, WHICH HAVE NOT BEEN SHOWN TO BE PERVERSE AND, THEREFORE, DISMI SSED THE APPEAL STATING THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FROM THE IMPUGNED ORDER OF T HE ITAT. 18. SO, THE A.O IN THIS CASE, ERRED IN RELYING ON THE STATEMENT OF SHRI RAJ KUMAR KOTHARI WHO HAD RETRACTED THE STATEMENT WITHIN TEN (10) DAYS ALLEGING THREAT AND COERCION ON THE PART OF THE INVESTIGATION WING AND MOREOVER, IN THE STATEMENT RECORDED BY THE AO OF ASSESSEE, SHRI RAJ KUMAR KOTHARI HAS A CCEPTED THE TRANSACTION WITH 19 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 ASSESSEE AS GENUINE AND SINCE THE AO FAILED TO ELIC IT ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE, SO THE AOS RELIANCE ON THIRD PARTY S TATEMENT OF SHRI KOTHARI DOES NOT HAVE ANY EVIDENTIARY VALUE AND THE AO ERRED IN RELYING O N IT. SO FROM ANY ANGLE, ONE LOOKS, THE STATEMENT OF SHRI RAJ KUMAR KOTHARI CANNOT HAVE BEEN USED AGAINST THE ASSESSEE. MOREOVER, SHRI RAJ KUMAR KOTHARI HAS CORROBORATED T HE LOAN TRANSACTION WITH THE ASSESSEE, AND SINCE THERE IS NO OTHER MATERIAL TO C ONTROVERT THE GENUINENESS OF THE LOAN TRANSACTION WITH THE ASSESSEE AND THE AO HAVING FAI LED TO FIND ANY INFIRMITY WITH THE DOCUMENTS FILED BY THE ASSESSEE/LENDERS TO PROVE TH E LOAN TRANSACTIONS AS DISCUSSED SUPRA, NO ADVERSE VIEW WAS LEGALLY TENABLE. AND HAV ING GONE THROUGH THE IMPUGNED ORDER AND THE PAPER BOOK FILED BEFORE US, WE FULLY CONCUR WITH THE FINDING OF FACTS AS RENDERED BY LD CIT(A) IN RESPECT OF IDENTITY, CREDI TWORTHINESS AND GENUINENESS OF THE LENDERS/LOAN TRANSACTION AND FOR THE SAKE OF BREVIT Y AND TO AVOID REPETITION IT IS NOT AGAIN REPEATED. WE AGREE WITH THE JUDICIAL PRECEDENTS REL IED UPON BY THE LD CIT(A) IN SUPPORT OF HIS DECISION. AND WE DONT FIND ANY LEGAL OR FAC TUAL INFIRMITY IN THE IMPUGNED ORDER OF THE LD CIT(A), SO WE DECLINE TO INTERFERE. SO TH E IMPUGNED ACTION OF LD. CIT(A) TO DELETE THE SECTION 68 ADDITION OF RS.1,50,10,000/- AND RS.13,34,669/- U/S. 69 OF THE ACT [THE INTEREST PAID BY ASSESSEE TO LENDERS] IS CONFI RMED. SO, THE REVENUES APPEAL STANDS DISMISSED. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2021. SD/- SD/- (P. M. JAGTAP) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED: 30 TH SEPTEMBER, 2021 SB, SR. PS 20 ITA NO. 2100/KOL/2018, M/S MACHINERY AGENCIES INDIA., AY 2014-15 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- ACIT, CIRCLE-35, KOLKATA 2. RESPONDENT M/S MACHINERY AGENCIES INDIA, 3, MANGO E LANE, DALHOUSIE, KOLKATA-700001 3. CIT(A)-10, KOLKATA (SENT THROUGH E-MAIL) 4. CIT, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY/DDO ITAT, KOLKATA BENCHES, KOLKATA