ITO, New Delhi V. M/s. La-Chem Pharmaceuticals Pvt. Ltd., New Delhi

ITA 2256/DEL/2010

• Counselvise Citation: 225620114 RSA 2010
• Duration Of Justice: 4 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-01-2015
• Assessment Year: 1995-1996
• Appeal Filed On: 13-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Keywords: Unexplained cash credit; Bogus Share capital; Depreciation; Additional evidence
• Section: 143(3); 133A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI J.S. REDDY ITA NO. 2256/DEL/2010 ASSESSMENT YEAR : 1995-96 ITA NO.2257/DEL/2010 ASSESSMENT YEAR :1995-96 INCOME-TAX OFFICER, VS. LA-CHEM PHARMACEUTICALS PV T. LTD. WARD 4(3), 10/351, SUNDER NAGAR, NEW DELHI. PASHCHIM VIHAR, NEW DELHI (PAN: AAACL2369N ) (APPELLANT) (RESPONDENT) REVENUE BY: SHRI GAURAV DU DEJA, SR. DR ASSESSEE BY: SHRI MUKESH KOH LI, CA DATE OF HEARING : 07 .01.2015 DATE OF PRONOUNCEMENT: 31.03.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER ITA NO.2256/DEL/2010 : THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONE OUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.9,21,608 MADE BY THE A.O. UNDER SEC. 68 OF THE I NCOME-TAX ACT, 1961 BEING THE UNEXPLAINED LOANS DISCLOSED INC OME. 2.1 THE LEARNED CIT(APPEALS) IGNORED THE FACT TH AT THE ASSESSEE HAS NOT PRODUCED DOCUMENTS/EVIDENCE IN SUPPORT OF HIS C LAIM BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS. 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.2,83,929 MADE BY THE A.O. BEING DEPRECIATION CLA IMED ON ADDITIONS TO FIXED DEPOSITS. 3.1 THE LEARNED CIT(APPEALS) IGNORED THE FACT THAT THE ASSESSEE FAILED TO PRODUCED THE BILLS AND INVOICES IN RESPEC T OF ADDITIONS MADE TO THE FIXED ASSETS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.3,89,936 MADE BY THE A.O. BEING UNEXPLAINED COMM ISSION. 4.1 THE LEARNED CIT(APPEALS) IGNORED THE FACT THAT THE ASSESSEE FAILED TO PRODUCE COPIES OF AGREEMENT WITH CONSIGNE E AGENTS FOR PAYMENT OF COMMISSION. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. 3. GROUND NO.1 IS GENERAL IN NATURE, HENCE, DOES NO T NEED INDEPENDENT ADJUDICATION. 4. GROUND NOS. 2 AND 2.1 : THE BASIC FACTS ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF BASI C DRUGS AND PHARMACEUTICALS. DURING THE YEAR, THE ASSESSEE FILE D ITS RETURN OF INCOME AT RS.6,500. THE SEARCH OPERATION WAS CARRIED OUT AT T HE PREMISES OF THE 3 ASSESSEE BY THE ANTI-EVASION BRANCH OF CENTRAL EXCI SE DEPARTMENT WHICH WAS FOLLOWED BY A SURVEY OPERATION UNDER SEC. 133A OF THE INCOME-TAX ACT, 1961. THE ASSESSEE COMPANY FILED AN APPLICATION UN DER SEC, 245C(1) OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 1995-9 6 AND 1996-97 BEFORE THE LEARNED INCOME-TAX SETTLEMENT COMMISSION ON 20. 02.1997 WHICH WAS ADMITTED. THE LEARNED SETTLEMENT COMMISSION ABATED THE PROCEEDINGS RELATING TO ASSESSMENT YEARS 1995-96 AND 1996-97 ON 31.3.2008. THEREAFTER, THE ASSESSMENT WAS COMPLETED UNDER SEC. 143(3) DETE RMINING THE TOTAL INCOME FOR THE ASSESSMENT YEAR 1995-96 AT RS.29,67, 780. 5. THE RELEVANT FACTS ON THE ISSUE RAISED IN THE GR OUNDS 2 AND 2.1 ARE THAT THE ASSESSING OFFICER MADE ADDITION OF RS.9,21,608 UNDER SEC. 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED (UNSECURED) LOANS. THE LE ARNED CIT(APPEALS) BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSE E AND THE EVIDENCE FILED IN SUPPORT HAS DELETED THE ADDITION. THIS ACTION OF TH E LEARNED CIT(APPEALS) HAS BEEN QUESTIONED IN THE GROUNDS UNDER CONSIDERAT ION. 6. IN SUPPORT OF THE GROUNDS, THE LEARNED SR. DR PL ACED RELIANCE ON THE ASSESSMENT ORDER WITH THIS CONTENTION THAT THE LEAR NED CIT(APPEALS) HAS ADMITTED THE ADDITIONAL EVIDENCE FILED BEFORE IT WI THOUT CALLING FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE LEARNED CIT( APPEALS) HAS ALSO FAILED 4 TO APPRECIATE THAT THE ASSESSEE WAS NOT ABLE TO EST ABLISH THE GENUINENESS OF THE CLAIMED UNSECURED LOANS. 7. THE LEARNED AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER ON THE ISSUE. HE SUBMITTED THAT ALL THE NECES SARY EVIDENCE AS WELL AS DETAILS OF UNSECURED LOANS WERE FILED BEFORE THE AS SESSING OFFICER AND THE ASSESSING OFFICER HAS MADE THE ADDITION ONLY ON THE BASIS THAT THE ASSESSEE COULD NOT PRODUCE BANK STATEMENT WITHOUT EXAMINING THE VERACITY OF THE EVIDENCE. HE ALSO REFERRED PAGE NOS. 3 TO 37 OF THE PAPER BOOK WHICH ARE COPIES OF DETAILS OF UNSECURED LOANS, VDIS DISCLOSU RE MADE BY THE ASSESSEE COMPANY AND ITS DIRECTORS; CONFIRMATIONS OF THE CAS H CREDITORS, ACKNOWLEDGEMENT OF INCOME-TAX RETURNS, COMPUTATION OF INCOME WITH STATEMENT OF AFFAIRS; AND AUDITED BALANCE SHEET AS ON 31.3.1995 AND 31.3.1996. THE LEARNED AR ALSO PLACED RELIANCE ON T HE DECISIONS CITED BEFORE THE AUTHORITIES BELOW INCLUDING THE DECISION S IN THE CASES OF CIT VS. LOVELY EXPORTS (P) LTD. ( ITA NO. 1193 OF 2009 DATE D 11.1.2008 (DELHI HIGH COURT); CIT VS. FAIR FINVEST LTD. (ITA NO.232 OF 2012 DATED 22.11.2012 (DELHI HIGH COURT) ); CIT VS. NOVA PROM OTERS & FINLEASE (P) LTD. (2012) -206 TAXMAN 207(DELHI) AND CIT VS. DWAR KADHESE INVESTMENT (P) LTD. (2010) 194 TAXMANN 43 (DELHI) ETC. 5 8. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THE ASSESSING OFFICER HAD MADE ADDITION OF RS.9,21,608 ON THE BASIS THAT THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS AS REQUIRED UNDER SEC. 68 OF THE ACT TO ESTABLISH THE GENUINENESS OF THE CLAIMED UNSECURED LOANS. THE ASS ESSING OFFICER HAS NOTED THAT THE ASSESSEE COMPANY FILED THE CONFIRMAT ION LETTERS FROM THE CASH CREDITORS. THERE WAS ADDITION IN CASH CREDITORS OF RS.35,94,608 DURING THE YEAR UNDER CONSIDERATION. OUT OF THIS, ADDITION OF RS.21,53,000 WAS DECLARED BOGUS BY THE ASSESSEE COMPANY IN THE VDIS SCHEME 19 97 AND RS.5,20,000 WAS DECLARED ITS INCOME IN VDIS SCHEME 1997 BY MR. BANSI LAL NANDWANA, DIRECTOR OF THE ASSESSEE COMPANY. HE NOTED FURTHER THAT SINCE THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE E.G. BAN K STATEMENT, HE WAS LEFT WITH NO OPTION BUT TO HOLD THESE REMAINING LOA N TRANSACTIONS OF RS.9,21,608 (RS.35,94,608 RS. 21,53,000 RS.5,20 ,000) AS UNEXPLAINED CASH CREDITS UNDER SEC. 68 OF THE ACT. THE LEARNED CIT(APPEALS) AFTER DISCUSSING THE CASE OF THE PARTY IN DETAIL HAS DECI DED THE ISSUE VIDE PARA NOS. 4.1 AND 4.2 OF THE FIRST APPELLATE ORDER. HE MENTIO NED THAT SINCE CERTIFICATE ISSUED BY LEARNED C.I.T. REGARDING THE DECLARATION OF INCOME MADE BY SHRI BANSI LAL NANDWANA AND CONFIRMATORY OF SMT. RAJ KUM ARI WERE MADE AVAILABLE TO THE ASSESSING OFFICER DURING THE COURS E OF ASSESSMENT 6 PROCEEDINGS AND THEREFORE THEY ARE NOT CONSIDERED T O BE ADDITIONAL EVIDENCES IN TERMS OF RULE 46A OF THE I.T. RULES, 1962. FOR A READY REFERENCE, PARA NOS. 4.1 AND 4.2 OF THE FIRST APPELLATE ORDER IS BE ING REPRODUCED HEREUNDER: 4.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS M ADE ON BEHALF OF THE APPELLANT, THE FINDINGS OF THE A.O. AND THE FAC TS ON RECORD. THE ASSESSING OFFICER FOUND THAT THERE WAS ADDITION IN CASH CREDITORS TO THE EXTENT OF RS.35,94,608 DURING THE YEAR UNDER CONSID ERATION. OUT OF THE ABOVE, THE ADDITIONS IN CASH CREDITORS TO THE EXTEN T OF RS.21,53,000 AND RS.5,20,000 WERE ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID AMOUNTS WERE DECLARED BY THE ASSESSEE COMP ANY AND SHRI BANSI LAL NANDWANA, DIRECTOR OF THE COMPANY RESPECT IVELY UNDER THE VDIS SCHEME, 1977. THE BALANCE AMOUNT OF RS.9,21,60 8 WAS DISALLOWED BY ASSESSING OFFICER ON THE GROUND THAT ANY DOCUMENTARY EVIDENCE E.G. BANK STATEMENT WAS NOT PRODUCED BY TH E ASSESSEE COMPANY. DURING THE APPELLATE PROCEEDINGS, IT WAS S UBMITTED ON BEHALF OF THE APPELLANT THAT AN AMOUNT OF RS.5,82,000 WAS ALSO DECLARED BY IT UNDER VDIS SCHEME, 1977 IN ASSESSMENT YEAR 1994-95 ON ACCOUNT OF SHARES IN THE ASSESSEE COMPANY WHICH WERE HELD IN B ENAMI NAMES. IT WAS FURTHER EXPLAINED THAT AN AMOUNT OF RS.1,95,000 WAS ALSO DECLARED UNDER VDIS SCHEME, 1977. IN THIS CONNECTION, THE CE RTIFICATE UNDER SEC. 68(2) OF THE VDIS, 1977 ISSUED BY THE THEN LEA RNED CIT(APPEALS)-II ON 09.02.1998 WAS FURNISHED WHICH I NDICATES THAT AN AMOUNT OF RS.44,55,490 FOR ASSESSMENT YEAR 1994-95 WAS DECLARED BY THE ASSESSEE COMPANY AND THE AMOUNT OF RS.5,82,000 IS INCLUDED IN THE AMOUNT OF RS.44,55,490. IT IS ALSO IMPORTANT TO NOT E THAT THE AMOUNT OF RS.44,54,490 INCLUDES THE AMOUNT OF RS.21,53,000 WH ICH HAS BEEN 7 ACCEPTED BY THE ASSESSING OFFICER AFTER EXAMINING T HAT VERY CERTIFICATE ISSUED BY THE LD. CIT-II ON 09.02.1998. REGARDING T HE DECLARATION OF INCOME MADE BY SHRI BANSI LAL NANDWANA, A CERTIFICA TE ISSUED BY CIT,DELHI-XI ON 08.01.1998 WAS ALSO FURNISHED WHICH INDICATES THAT AN AMOUNT OF RS.85,02,033 WAS DECLARED BY HIM UNDER VDIS SCHEME, 1977 AND THE AMOUNT OF RS.1,96,000 IS ALSO INCLUDED ON ACCOUNT OF EQUITY SHARES IN THE ASSESSEE COMPANY HELD IN THE N AME OF ONE SMT. JAMNA. APART FROM THE ABOVE, A DOCUMENTARY LETTER D ATED 04.12.2008 WAS ALSO SUBMITTED THE PERUSAL OF WHICH REVEALS THA T SMT. RAJ KUMARI, 27-C, LIG FLATS, RAM PURA, DELHI HAS ADVANCED A LOA N OF RS.1,24,000 DURING THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 1995-96. HER PAN IS AAJPK4743M AND SHE IS ASSESSED TO TAX WITH I TO, WARD- 21(3), NEW DELHI. IT IS ALSO PERTINENT TO MENTION T HAT THE AFOREMENTIONED CERTIFICATE AND CONFIRMATORY LETTER OF SMT. RAJ KUMARI WERE AVAILABLE WITH THE ASSESSING OFFICER DURING TH E ASSESSMENT PROCEEDINGS AND THEREFORE, THEY ARE NOT CONSIDERED TO BE ADDITIONAL EVIDENCES IN TERMS OF RULE 46A OF I.T. RULES, 1962. 4.2 IN VIEW OF THE DISCUSSION MADE ABOVE, IT IS HE LD THAT THE AMOUNT OF RS.5,82,000, RS.1,96,000, RS.1,24,000 TOTALLING RS.9,02,000 STAND EXPLAINED IN RESPECT OF WHICH THE ADDITION CANNOT B E SUSTAINED. REGARDING THE BALANCE AMOUNT OF RS.19,608, IT IS SE EN IN THE ACCOUNTS OF THE ASSESSEE COMPANY THAT THERE HAS BEEN INCREAS E OF RS.22,608 ON ACCOUNT OF UNSECURED LOAN FROM SHRI BANSI LAL NANDW ANA DURING THE YEAR UNDER CONSIDERATION WHICH MAY BE TREATED AS TH E AMOUNT INCLUSIVE OF RS.5,20,000 WHICH HAS BEEN DECLARED BY SHRI BANS I LAL NANDWANA AS LOAN TO THE COMPANY IN THE DISCLOSURE MADE UNDER VDIS 1977. 8 HENCE, THE AMOUNT OF RS.19,608 ALSO STANDS EXPLAINE D. IN VIEW OF THE AFORESAID, I AM OF THE CONSIDERED VIEW THAT THE ASS ESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.9,21,608 AND ACCORDINGLY, HE IS DIRECTED TO DELETE THE SAID ADDITION. AS A RESULT, GROUND NO.1 IS ALLOWED. 9. ON PERUSAL OF THE FIRST APPELLATE ORDER ON THE I SSUE, DISCUSSED ABOVE, WE FIND THAT THE CLAIMED UNSECURED LOAN WAS SUPPORT ED WITH SUFFICIENT DOCUMENTS AND THE LEARNED CIT(APPEALS) AFTER DISCUS SING THE EXPLANATION OF THE ASSESSEE IN THIS REGARD HAS DELETED THE ADDITIO N BY PASSING A REASONED ORDER. WE ARE THUS NOT INCLINED TO INTERFERE THEREW ITH. THE SAME IS UPHELD. THE GROUND NOS. 2 AND 2.1 ARE ACCORDINGLY REJECTED. GROUND NOS. 3 AND 3.1 : 10. THE ASSESSING OFFICER DISALLOWED CLAIMED DEPREC IATION OF RS.2,83,929 ON THE BASIS THAT THE ASSESSEE DID NOT PRODUCE ORIG INAL BILLS/CHALLAN FOR VERIFICATION. THE LEARNED CIT(APPEALS) HAS, HOWEVER , DELETED THE DISALLOWANCE. 11. IN SUPPORT OF THE GROUNDS, THE LEARNED DR SUBMI TTED THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE DISAL LOWANCE IN QUESTION SINCE IN RESPONSE TO THE REQUIREMENT ISSUED BY THE ASSESS ING OFFICER FOR FURNISHING 9 DATE-WISE DETAILS OF ADDITION MADE TO FIX ASSETS AN D ORIGINAL BILLS/CHALLAN, THE ASSESSEE COULD NOT PRODUCE ORIGINAL BILLS/CHALLAN F OR VERIFICATION. 12. THE LEARNED AR ON THE OTHER HAND TRIED TO JUSTI FY THE FIRST APPELLATE ORDER ON THE ISSUE. 13. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BEL OW ON THE ISSUE, WE FIND THAT THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM ED DEPRECIATION IN RESPECT OF ADDITION MADE TO THE FIXED ASSETS DURING THE YEA R, ON THE BASIS THAT THE ASSESSEE COULD NOT PRODUCE ORIGINAL BILLS/VOUCHERS IN SUPPORT. THE CONTENTION OF THE ASSESSEE ON THE OTHER HAND REMAINED THAT THE FIXED ASSETS WERE RELATED TO VERY OLD PERIOD AND THE ASSESSEE HAD OTHERWISE F URNISHED BOOKS OF ACCOUNT WHICH WAS AUDITED BY CA WITH THIS SUBMISSION THAT T HERE WAS NO ADVERSE REMARKS. CONSIDERING THESE FACTS OF THE CASE, THE L EARNED CIT(APPEALS) HELD THAT THE CLAIM OF THE ASSESSEE REGARDING DEPRECIATI ON CANNOT BE REJECTED MERELY ON THE GROUND THAT BILLS OF PURCHASE PERTAIN ING TO THE ACQUISITION OF FIXED ASSETS WERE NOT MADE AVAILABLE TO THE ASSESSI NG OFFICER. HE NOTED THAT THE ASSESSING OFFICER HAS NOT GIVEN HIS FINDING TO THE FACT THAT THE MACHINERY AND PLANTS OR OTHER FIXED ASSETS HAVE NOT AT ALL BE EN USED DURING THE ACCOUNTING YEAR UNDER APPEAL OR WERE KEPT IDLE. HE NOTED FURTHER THAT THE 10 AUDITORS HAVE NOT MADE ANY ADVERSE REMARKS IN THE T AX AUDIT REPORT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LEARNED CI T(APPEALS) HAS ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECATION ON THE FIXED ASSETS PURCHASED DURING THE YEAR UNDER CONSIDERATIO N IN ACCORDANCE WITH THE ADMISSIBILITY THEREOF AFTER NECESSARY VERIFICATION. WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUND NOS. 3 AND 3.1 ARE ACCORDINGLY REJECTED. GROUND NOS. 4 AND 4.1 : 14. THE ASSESSING OFFICER DISALLOWED RS.3,89,936 CL AIMED TO HAVE BEEN PAID AS COMMISSION. THE ADDITION HAS BEEN MADE BY T HE ASSESSING OFFICER WITH THIS FINDING THAT HE WAS NOT SATISFIED WITH TH E EXPLANATION FURNISHED BY THE ASSESSEE IN THIS REGARD IN ABSENCE OF WRITTEN A GREEMENT BETWEEN THE ASSESSEE AND CONSIGNMENT AGENTS. THE LEARNED CIT(AP PEALS) HAS DELETED THE ADDITION. 15. IN SUPPORT OF THE GROUNDS, THE LEARNED DR SUBMI TTED THAT THE LEARNED CIT(APPEALS) WHILE DELETING THE ADDITION HAS FAILED TO APPRECIATE THAT THERE WAS NO WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND I TS CONSIGNMENT AGENTS TO SUPPORT THE GENUINENESS OF THE CLAIM. 11 16. THE LEARNED AR ON THE OTHER HAND SUBMITTED THAT THERE WAS VERBAL AGREEMENT FOR PAYMENT OF COMMISSION BETWEEN THE ASS ESSEE AND THE CONSIGNMENT AGENT FOR SO MANY YEARS AND SIMILAR CLA IM WAS ALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENTS FRAMED UNDER S EC. 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2006-07 PASSED ON 30.12.2008, T HE DATE ON WHICH THE ASSESSMENT UNDER SEC. 143(3) OF THE ACT WAS COMPLET ED FOR THE YEAR UNDER CONSIDERATION. 17. WE FIND THAT THE LEARNED CIT(APPEALS) HAS DELET ED THE ADDITION ON THE BASIS THAT IN OTHER ASSESSMENT YEARS, SIMILAR CLAIM WAS ALLOWED AND THE ASSESSING OFFICER OUGHT TO HAVE MAINTAINED CONSISTE NCY IN THIS REGARD EVEN DURING THE YEAR UNDER CONSIDERATION. THE FIRST APPE LLATE ORDER ON THE ISSUE IS REASONED ONE, HENCE, WE ARE NOT INCLINED TO INTE RFERE THEREWITH. THE SAME IS UPHELD. THE GROUNDS ARE ACCORDINGLY REJECTED. 18. IN RESULT, THE APPEAL IS DISMISSED. ITA NO.2257/DEL/2010 : 19. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDE R ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONE OUS & CONTRARY TO FACTS & LAW. 12 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.14,00,000 MADE BY THE A.O. U/S. 68 OF THE INCOME -TAX ACT, 1961 BEING THE UNEXPLAINED SHARE CAPITAL. 2.1 THE LEARNED CIT(APPEALS) IGNORED THE FACT THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS OF PROVING THE EXISTING/ CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDI TION OF RS.3,96,639 MADE BY THE A.O. BEING DEPRECIATION CLA IMED ON ADDITIONS TO FIXED ASSETS. 3.1 THE LEARNED CIT(APPEALS) IGNORED THE FACT THAT THE ASSESSEE FAILED TO PRODUCE THE BILLS AND INVOICES IN RESPECT OF ADDITIONS MADE TO THE FIXED ASSETS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.98,560 MADE BY THE A.O. BEING UNEXPLAINED UNSECU RED LOAN. 4.1 THE LEARNED CIT(APPEALS) IGNORED THE FACT THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS OF PROVING THE EXISTENCE /CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION S. 20. GROUND NO.1 IS GENERAL IN NATURE, HENCE, DOES N OT NEED INDEPENDENT ADJUDICATION. 21. GROUND NOS.2 AND 2.1 : THE ASSESSING OFFICER MADE ADDITION OF RS.14 LACS UNDER SEC. 68 OF THE INCOME-TAX ACT, 1961 ON A CCOUNT OF UNEXPLAINED 13 SHARE CAPITAL. THE ASSESSING OFFICER HAS MADE THE A DDITION IN QUESTION FOR WANT OF BANK STATEMENT. THE LEARNED CIT(APPEALS) HA S DELETED THE ADDITION ON THE BASIS OF EVIDENCE FILED BY THE ASSESSEE WITH THIS OBSERVATION THAT THE ASSESSING OFFICER DID NOT BOTHER TO EXAMINE THE COR RECTNESS OF THOSE EVIDENCES BEFORE MAKING THE ADDITION. 22. IN SUPPORT OF THE GROUNDS, THE LEARNED DR PLACE D RELIANCE ON THE ASSESSMENT ORDER WITH THIS CONTENTION THAT DESPITE HAVING SUFFICIENT OPPORTUNITY, THE ASSESSEE FAILED TO DISCHARGE ITS O NUS TO ESTABLISH THE GENUINENESS OF THE CLAIMED SHARE CAPITAL. 23. THE LEARNED AR TRIED TO JUSTIFY THE FIRST APPEL LATE ORDER ON THE ISSUE. HE REITERATED THE SUBMISSION MADE BEFORE HIM AND PL ACED RELIANCE ON THE DECISIONS CITED BEFORE THE LEARNED CIT(APPEALS). 24. CONSIDERING THE ABOVE SUBMISSION, WE FIND THAT THE ASSESSEE, ABOUT THE NON-FURNISHING OF BANK STATEMENT HAD STATED THAT TH EY HAD APPROACHED TO THE BANK TO GET THE BANK STATEMENT BUT FAILED TO, BECAU SE IT WAS MORE THAN 13 YEARS OLD. THE ASSESSEE HAS, HOWEVER, FURNISHED THE CONFIRMATION LETTERS FROM THE SHAREHOLDER CONTAINING THE DETAILS OF AMOUNT IN VESTED, CHEQUE NO., DATE, 14 BANK PARTICULARS, PAN AND INCOME-TAX PARTICULARS. A LL THESE DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER AS WELL AS LEARN ED CIT(APPEALS). ON THE BASIS OF FURNISHING THESE DOCUMENTS, LEARNED CIT(AP PEALS) HELD THAT INITIAL BURDEN OF THE ASSESSEE WAS DISCHARGED. WE CONCUR WI TH THIS VIEW OF THE LEARNED CIT(APPEALS). IT IS WELL ESTABLISHED PROPOS ITION OF LAW THAT AFTER DISCHARGING OF INITIAL BURDEN BY THE ASSESSEE TO ES TABLISH GENUINENESS OF THE TRANSACTION, THE ONUS SHIFTS UPON THE ASSESSING OFF ICER TO REBUT THOSE EVIDENCES FOR THE DENIAL OF THE GENUINENESS OF THE CLAIMED TRANSACTION. NO SUCH EFFORT HAS BEEN ON THE PART OF THE ASSESSING O FFICER TO EXAMINE THE CORRECTNESS OF ABOVE STATED DOCUMENTS FILED BY THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS IN QUESTION. WE ARE THUS OF THE VIEW THAT THE LEARNED CIT(APPEALS) RESPECTFULLY FOLLOWING THE RAT IOS LAID DOWN IN SEVERAL DECISIONS LIKE CIT VS. LOVELY EXPORTS (P) LTD. (200 8) 206 CTR (S.C) 195, CIT VS. VALUE CAPITAL SERVICES (2008) 307 ITR 334 ( DEL.), BHAV SHAKTI STEEL MINES (P) LTD. VS. CIT (2009) 179 TAXMAN 25 ( DEL.) ETC. HAS RIGHTLY DELETED THE ADDITION. THE SAME IS UPHELD. GROUND NO S. 2 AND 2.1 ARE ACCORDINGLY REJECTED. 25. GROUND NOS. 3 AND 3.1 : THE ASSESSING OFFICER DISALLOWED RS.3,96,639 TOWARDS THE CLAIMED DEPRECIATION IN RESPECT OF THE ADDITIONS MADE TO THE 15 FIXED ASSETS DURING THE YEAR. THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE COULD NOT P RODUCE ORIGINAL BILLS/VOUCHERS IN RESPECT OF THE ADDITION TO FIXED ASSETS. THE LEARNED CIT(APPEALS) HAS DELETED THIS DISALLOWANCE WHICH HA S BEEN QUESTIONED BY THE REVENUE BEFORE US. 26. IN SUPPORT OF THE GROUNDS, THE LEARNED SR.DR SUBMITTED THAT THE LEARNED CIT(APPEALS) HAS DELETED THE DISALLOWANCE O F DEPRECIATION WITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE CLAIM. 27. THE LEARNED AR ON THE OTHER HAND PLACED RELIA NCE ON THE FIRST APPELLATE ORDER. 28. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THE ASSESSING OFFICER HAD DISALLOWED THE CLAIMED DEPRECIATION OF RS.3,96,639 IN RESPECT OF ADDITIONS MADE TO THE FIXED ASSETS DURING THE YEAR IN ABSENCE OF PRODUCTION OF ORIGINAL BILLS/VOUCHERS OF THE ADDITIONS MADE TO THE FIXED ASSETS BY THE ASSESSEE. THE SUBMISSION OF THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) REMAINED THAT THE ADDITION TO FIXED ASSETS RELATES TO VERY OLD PERIOD, HENCE, 16 THE ASSESSEE COULD NOT PRODUCE ORIGINAL BILLS/VOUCH ERS. IT WAS SUBMITTED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY HAVE B EEN AUDITED BY CHARTERED ACCOUNTANT AND THERE IS NO ADVERSE REMARK S IN HIS REPORT. THE COPY OF AUDITED BALANCE SHEET AS ON 31.3.1996 WAS A LSO FURNISHED. THE LEARNED CIT(APPEALS) HAS DELETED THE DISALLOWANCE O F THE DEPRECIATION IN QUESTION ON THE BASIS THAT THE ASSESSING OFFICER HA S NOT GIVEN A FINDING THAT THE MACHINERY AND PLANT OR OTHER FIXED ASSETS HAVE NOT AT BEEN USED DURING THE ACCOUNTING YEAR UNDER APPEAL OR WERE KEPT IDLE AND THAT THE AUDITORS HAVE NOT MADE ANY ADVERSE REMARKS IN THE TAX AUDIT FOR T HE ASSESSMENT YEAR UNDER CONSIDERATION . THE LEARNED CIT(APPEALS) HAS, HOWEVER, DIRECTED TH E ASSESSING OFFICER TO ALLOW THE DEPRECIATION ON THE FIXED ASSETS PURCHASED DURING THE YEAR IN ACCORDANCE WITH THE ADMISSIBILIT Y THEREOF ONLY AFTER NECESSARY VERIFICATION. THE FIRST APPELLATE ORDER I S THUS REASONED ONE, TO WHICH NO INTERFERENCE IS REQUIRED. THE SAME IS UPHE LD. THE GROUND NOS. 3 AND 3.1 ARE ACCORDINGLY REJECTED. 29. GROUND NOS. 4 AND 4.1 : THE ASSESSING OFFICER MADE ADDITION OF RS.98,560 ON ACCOUNT OF UNEXPLAINED LOAN UNDER SEC. 68 OF THE INCOME-TAX ACT, 1961. THE ASSESSING OFFICER WHILE MAKING THE A DDITION HAS HELD THAT THE ASSESSEE HAD NOT FURNISHED ANY DOCUMENTARY EVID ENCE SUCH AS BANK 17 STATEMENT. THE LEARNED CIT(APPEALS) BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE HAS DELETED THE ADDITION. 30. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. 31. WE FIND THAT THE ASSESSING OFFICER HAD MADE THE ADDITION OF RS.98,560 UNDER SEC. 68 OF THE ACT ON ACCOUNT OF UN EXPLAINED LOANS IN ABSENCE OF BANK STATEMENT. THE CONTENTION OF THE AS SESSEE, HOWEVER, REMAINED THAT IT HAD SUBMITTED THE CONFIRMATION AND COPIES OF INCOME-TAX RETURNS BEFORE THE ASSESSING OFFICER WHICH WERE NOT CONSIDERED. IT WAS SUBMITTED THAT SINCE THE MATTER WAS OLD OF AROUND 1 3 YEARS, THE ASSESSEE DESPITE EFFORTS COULD NOT GET THE BANK STATEMENT FR OM THE BANK. THE LEARNED CIT(APPEALS) HAS DELETED THE ADDITION ON THE GROUND THAT THE ASSESSING OFFICER SHOULD HAVE EXAMINED THE VERACITY OF THE CO NFIRMATIONS ISSUED BY THE CREDITORS BEFORE MAKING THE ADDITION. THE LEARNED C IT(APPEALS) HELD THAT BY FURNISHING PRIMARY EVIDENCE THE ASSESSEE HAD DI SCHARGED ITS ONUS AND THE ONUS THEREAFTER WAS SHIFTED UPON THE ASSESSING OFFI CER TO REBUT THOSE EVIDENCES ON VERIFICATION BEFORE SIMPLY DISBELIEVIN G THE SAME. THE LEARNED 18 CIT(APPEALS) HAS ACCORDINGLY DELETED THE ADDITION. THE FIRST APPELLATE ORDER ON THE ISSUE IS REASONED ONE AND THUS DOES NO T NEED INTERFERENCE. THE SAME IS UPHELD. THE GROUNDS ARE ACCORDINGLY REJECTE D. 32. IN RESULT, THE APPEAL IS DISMISSED. 33. IN SUMMARY, BOTH THE APPEALS ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 26 .03.201 5 SD/- SD/- ( J.S. REDDY ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 /03/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 19 DATE DRAFT DICTATED ON COMPUTER 26.03.2015 DRAFT PLACED BEFORE AUTHOR 26.03.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 31.03.2015 KEPT FOR PRONOUNCEMENT ON 31.03.2015 FILE SENT TO THE BENCH CLERK 31.03.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.