DCIT, New Delhi V. Shokeen Properties Pvt. Ltd., New Delhi

ITA 2266/DEL/2012

• Counselvise Citation: 226620114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: V MOHAN
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Capital asset; Peak credit; Additional evidence; Fair market value; Accommodation entries; Non compliance; Non passing of speaking order; Onus to prove
• Section: 50C; 133(6); 68; 69; 145; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI S.V. MEHROTRA ITA NO. 2266/DEL/2012 ASSTT. YR: 2008-09 DCIT, CIRCLE 8(1), VS. M/S SHOKEEN PROPERTIES P VT. LTD., NEW DELHI. 707, INDRA PRAKASH BUILDING, 21, BARAKHAMBA ROAD, NEW DELHI. PAN : AACCS 2276 B ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI RAMESH CHANDRA CIT (DR) RESPONDENT BY : SHRI VED JAIN ADV. & SHRI V. MOHAN CA O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL ARISING OUT OF THE ORDER OF CIT(A)-XI, NEW DELHI DATED 6-2-2012 RELATING TO A.Y. 2008-09. FOLL OWING EFFECTIVE GROUNDS OF APPEAL ARE RAISED: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 20,37,05,000/- MADE BY THE AO U/S 68 OF THE ACT. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 4,32,07,394/- MADE BY THE AO ON ACCOUNT OF UNCONFIRMED CREDITORS. 2. BRIEF FACTS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE AND FILED ITS RETURN FOR THE RELEVANT ASSESSMENT YE AR ON 10/10/2008 DECLARING ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 2 AN INCOME OF RS. 64,90,644/- WITH THE AO. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS ISSUED A SHOW CAUSED NOTIC E LETTER DATED 23.12.2010 ON FOLLOWING LINES: 1. YOU ARE REQUESTED TO EXPLAIN AND JUSTIFY AS TO WHY NOT ADDITION BE MADE BY TOTALING THE CREDIT ENTRIES REFLECTED IN YOUR CASH BOOK AND BANK BOOK. IT IS SO BECAUSE WHILE VERIFYING THE CAS H BOOK AND THE BANK BOOK, IT HAS BEEN NOTICED THAT THERE WERE MANY ENTRIES IN THE CREDIT SIDE OF YOUR ACCOUNTS WHERE IN THE MONEY HAS BEEN DEPOSITED EITHER IN CASH OR BY D.D. OR TRANSFER. YOU ARE REQUESTED TO FILE DAY WISE CASH FLOW STATEM ENTS FOR THE PERIOD 1-04-2007 TO 31-03-2008 AND EXPLAIN THE SOUR CE OF DEPOSITS. IN CASE YOU WANT TO CONTEST THE PROPOSED ADDITIONS, YO U ARE REQUIRED TO FILE YOUR EXPLANATION ALONG WITH THE CASH FLOW STAT EMENTS IN THE FOLLOWING FORMATS:- SL.N O DATE A/C-1 A/C-2 A/C-3 NET BALANCE AT THE END OF THE DAY REMARK S 1. 01-04-07 RS. X1 RS. X2 RS. X3 RS. X6. 2. 02-04-07 3. 03-04-07 4. 04-04-07 365 TH DAY UPTO 31- 03-08 2. YOU HAVE SHOWN INVESTMENT /PURCHASE OF LAND DETAILS ARE AS PER YOUR BALANCE SHEET / P & L A/C. YOU ARE REQUIRED TO EXPLAIN AND JUSTIFY THE MARKET RATE/ FAIR MARKET VALUE. PLEASE EXPLAIN THE SAME WITH REFERENCE TO GOVT. RATE/CIRCLE RATE IN THAT AR EA AND PRODUCE THE NECESSARY DETAILS AND EVIDENCE/NOTIFICATIONS. 2.1. IN REPLY ASSESSEE VIDE ITS LETTER DATED 24 TH DEC., 2010 EXPLAINED THAT: ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 3 1) THE COMPLETE DETAILS OF ALL THE ENTRIES IN BANK ACC OUNTS HAVE ALREADY BEEN SUBMITTED, EXPLAINING THE SOURCE/DETAI L OF EACH ENTRY. ALL THE DEMAND DRAFTS AND CHEQUES ARE EITHER ON ACCOUNT OF SALE OF LAND OR ADVANCE RECEIVED FROM PARTIES AS ADVANCE AGAINST SALE OF LAND. THE COMPLETE DOCUMENTARY EVIDENCE FOR THE SAME IN THE F ORM OF REGISTERED SALE DEEDS HAS BEEN FILED. CONFIRMATION FROM PARTIE S FROM WHOM ADVANCES HAVE BEEN RECEIVED ALONG WITH THEIR ASSESS MENT PARTICULARS WITH PAN AND ASSESSING OFFICER HAVE ALSO BEEN SUBMI TTED. THE CASH DEPOSITED IN BANK IS OUT OF CASH BELONGING OF THE ASSESSEE COMPANY AVAILABLE ON THAT DATE. COMPLETE CASH BOOK HAS ALREADY BEEN FILED AND PUT ON RECORD TO CORROBORATE THE FAC T. THE AMOUNT WAS RECEIVED BACK FROM PARTIES TO WHOM ADVANCES WERE MA DE FOR LAND. THE ACCOUNTS ARE AUDITED AND CERTIFIED BY THE DIREC TORS AND AUDITORS UNDER THE COMPANIES ACT AND TAX AUDIT UNDER INCOME TAX ACT AND APPROVED BY SHAREHOLDERS IN ANNUAL GENERAL MEETING. THE COMPLETE DETAIL AS PER THE CASH FLOW STATEMENT IN THE FOLLOWING FORMAT IS ATTACHED HEREWITH. IT IS SUBMITTED THAT T HE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS GOVERNED BY THE COMP ANIES ACT, 1956 AND TAX AUDIT U/S 44AB OF THE INCOME TAX ACT 1961. THE AUDIT REPORT UNDER COMPANIES ACT AS WELL AS INCOME TAX ACT IS GI VEN AFTER COMPLETE VERIFICATION OF ALL DOCUMENTS AND OTHER IN FORMATION REQUIRED. IT IS AGAIN SUBMITTED THAT THERE ARE NO C ASH CREDITS/LOANS AS IS EVIDENT FORM BOOKS OF ACCOUNTS PRODUCED BEFORE Y OUR GOOD SELF AND TAX AUDIT REPORT SUBMITTED. AS EXPLAINED EARLIER THAT SOURCE OF DEPOSITS ARE ON LY SALE OF LAND, RECEIPTS OF ADVANCE AGAINST LAND AND REFUND OF ADVA NCE GIVEN IN THE NORMAL COURSE OF BUSINESS. THERE IS NO CAUSE OF ACT ION U/S 68 AS THERE ARE NO CASH CREDITS OR U/S 69 AS UNEXPLAINED INVEST MENTS. THE COMPLETE SET OF BOOKS OF ACCOUNTS HAVE BEEN SUBMITT ED. IT IS EVIDENT FROM DETAILS SUBMITTED BEFORE YOUR GO OD SELF THAT ADVANCING I.E. THE RECEIPTS/PAYMENTS OF AMOUNTS AS ADVANCE FOR LAND ARE NORMAL ACTIVITY IN ASSESSEES BUSINESS. ADVANCE S ARE RECEIVED AND PAID IN NORMAL COURSE OF BUSINESS AND IF THE DEAL D OES NOT MATERIALIZE, THE MONEY IS REFUNDED. AS EXPLAINED, WE REPRODUCE T HE LETTER SUBMITTED ON 23 RD DECEMBER, 2010. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 4 THE ASSESSEE COMPANY PAID ADVANCES TO AGRICULTURIS TS FOR PURCHASE OF LAND WHICH WAS CONDITIONAL AS TO THE LAND USE. T HE ASSESSEE PROPOSED TO BUILD HOSPITAL AND/OR EDUCATIONAL INSTI TUTION, WHICH WAS DEPENDENT UPON THE CHANGE IN LAND USE UNDER THE MAS TER PAN, AS THE LANDS WERE AGRICULTURAL. THE MASTER PLAN DID NOT CH ANGE THE LAND USE AND THE ADVANCES PAID FOR THE SAME WERE RECEIVED BA CK; OTHERWISE THE SAME WOULD HAVE BEEN FORFEITED. COMPLETE DETAILS OF CASH WITHDRAWN FROM THE BANK FOR THE SAID PURPOSE IN THE SHAPE OF RELEVANT BANK STATEMENT ARE ATTACHED AND CASH BOOK FOR THE RELEVA NT PERIOD IS PRODUCED FOR VERIFICATION. COPY OF BANK STATEMENTS FOR ASSESSMENT YEAR 2008-09 HAVE ALREADY BEEN SUBMITTED. IT IS ONCE AGAIN SUBMITTED THAT THERE WERE NO CASH CREDITS/LOANS RECEIVED BY THE ASSESSEE DURING THE YEAR. 2) THE ASSESSEE IS DOING BUSINESS OF SALE/PURCHASE OF REAL ESTATE. IN REAL ESTATE THE PRICES FLUCTUATE VERY UNPREDICTA BLY AND THERE IS NO STANDARD OF GP/NP RATE. THE ASSESSEE HAD A NET PROF IT RATE OF 2% IN THE PREVIOUS YEAR, I.E. ASSESSMENT YEAR 2007-08, WH EREAS PROFIT IN CURRENT YEAR IS 9.2%. THUS, THE NP RATE IN CURRENT YEAR IS MORE THAN 4.5 TIMES. AS THE ASSESSEE IS IN THE BUSINESS OF SA LE/PURCHASE OF LAND, THEREFORE, SECTION 50C IS NOT APPLICABLE IN OUR CAS E. WE ARE ENCLOSING HEREWITH JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF C.I.T. VS. THIRUVENGADAM INVESTMENTS (P) LTD. (2010) 320 ITR 3 45 (MAD.), WHERE IT HAS BEEN HELD THAT WHEN PROPERTY IS TREATE D AS BUSINESS ASSET AND NOT CAPITAL ASSET, THERE IS NO QUESTION OF SECT ION 50C. WE ARE ALSO ENCLOSING TWO JUDGMENTS OF DELHI HIGH C OURT IN THE CASE OF DEV KUMAR JAIN VS. I.T.O. & ANOTHER (2009) 309 I TR 240, (DELHI) AND CIT VS. SMT. NILOFER I. SINGH (2009) 309 ITR 23 3 (DELHI), WHEREIN IT HAS BEEN HELD THAT CONSIDERATION SPECIFIED IN SA LE DEED IS TO BE CONSIDERED. YOUR ATTENTION IS ALSO INVITED TO THE J UDGMENT OF HONBLE SUPREME COURT IN THE CASE OF K.P. VARGHESE. VS. I.T .O., 131 ITR 597 SUPREME COURT. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 5 3) WE ARE ENCLOSING HEREWITH A COMPLETE SET OF DOCUMEN TS (NUMBER OF PAGES 18) PERTAINING TO CREDITOR M/S TAR AL VINCOM P. LTD. CONTAINING: A) CONFIRMATION OF BALANCE AS ON 31.03.2008 AND COMPLE TE DETAILS OF PAYMENT RECEIVED BY THEM WITH DETAILS OF EACH CH EQUE. B) CERTIFICATE OF REGISTRAR OF COMPANIES, WEST BENGAL, CERTIFYING THE CHEQUE OF NAME OF THE COMPANY FROM TARAL VINCOM P. LTD. TO LINKPOINT INFRASTRUCTURE PVT. LTD. W.E.F. 6.5.2009. C) ACKNOWLEDGEMENT RECEIPT OF INCOME TAX RETURN FOR AS SESSMENT YEAR 2008-09 FILED WITH I.T.O. 3 (1), KOLKATA VIDE RECEIPT NO. 0331000349 DATED 14.10.200. D) AUDIT REPORT, DIRECTORS REPORT AND COMPLETE ACCOUNT S INCLUDING BALANCE SHEET AND PROFIT & LOSS ACCOUNT WITH ALL SC HEDULES. THE AMOUNT OF CONTRACTUAL RECEIPTS IN SCHEDULE 8 ARE RS . 77,74,34,648/-, WHICH INCLUDES OUR AMOUNT OF RS. 4,31,66,881/- AND THE FIGURE OF SUNDRY DEBTORS IN SCHEDULE 3 IS RS. 31,50,60,434/- WHICH ALSO INCLUDES OUR FIGURE. E) THE FIGURE OF T.D.S IN SCHEDULE 5 IS RS. 74,73,019/ -, WHICH INCLUDES T.D.S. DEDUCTED BY USE AND ACCOUNTED FOR I N THEIR ACCOUNTS. F) COPY OF LEDGER A/C OF TARAL VINCOM PVT. LTD. ALONGW ITH COPIES OF CHEQUES ISSUED. WE WERE INFORMED ONLY YESTERDAY ABOUT NON-SERVICE O F NOTICE U/S 133(6) TO THE SAID PARTY I.E. TARAL VINCOM PVT. LTD . WE IMMEDIATELY CONTRACTED THE PARTY AND GOT THE DOCUMENTS ON E-MAI L. THE NON- SERVICE OF NOTICE WAS DUE TO CHANGE IN THE NAME OF THE COMPANY, WHICH WE WERE NOT AWARE OF. THE PARTY IS ALSO SENDI NG THE SET OF DOCUMENTS THROUGH SPEED POST AND WILL REACH YOU IN A DAY OR TWO. WE EXPRESS OUR INABILITY TO PRODUCE THE PARTY AT SU CH A SHORT NOTICE (24 HOURS). HOWEVER, COMPLETE SET OF DOCUMENTS WHIC H ARE VERIFIABLE WITH PAN HAVE BEEN SUBMITTED. 4) BOOKS OF ACCOUNTS ARE PRODUCED. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 6 2.2. AO, HOWEVER, APROPOS FIRST GROUND, WAS NOT SA TISFIED WITH ASSESSEES EXPLANATION AND APROPOS FIRST GROUND MADE AN ADDITI ON OF RS. 20,37,05,000/- U/S 68 TREATING ALL THE BANK DEPOSITS IN ABN AMRO B ANK AND STATE BANK OF INDIA AS UNEXPLAINED, BY FOLLOWING OBSERVATIONS: THE SUBMISSIONS OF THE ASSESSEE HAS BEEN CONSIDERE D AND FOUND NOT TENABLE ON THE BASIS THAT IT HAS ONLY BEE N MENTIONING THAT COMPLETE DETAILS OF ALL ENTRIES IN BANK ACCOUN TS RE SUBMITTED BUT NO SUCH DETAILS HAVE BEEN EVER FURNIS HED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS FAILED TO PROVIDE THE INFORMATION IN THE GIVEN PRO FORMA ALONG WITH E VIDENCES AND FULL NARRATION THERETO AND HAS ALSO FAILED TO P ROVE SOURCES OF DEPOSITS. IT IS ALSO NOTE ABOVE THAT THE ASSESSE E HAS SOLD/PURCHASED PROPERTIES AT THE RATE WHICH IS QUIT E BELOW THAT THE CIRCLE RATE WHICH CANNOT BE A GENUINE CASE. IT IS AN UNDISPUTED FACT THAT MARKET RATES ARE MUCH HIGHER T HAN THE CIRCLE RATE. THE CLAIM OF THE ASSESSEE WITHOUT ANY SUPPORTING DOCUMENTS AND CONVINCING EXPLANATIONS CANNOT BE ACC EPTED JUST ONLY ON FACE VALUE. THE ASSESSEE HAS NOT DISCHARGED ITS ONUS TO PROVE IDENTITY AND CREDITWORTHINESS OF THE LETTERS, AND GENUINENESS OF THE TRANSACTION. BECAUSE OF THIS THE THREE CONDITIONS LAID DOWN U/S 68 OF THE ACT REMAINS NOT COMPLIED WITH IN THIS CASE AND THAT TOO FAILURE IS ON THE PA RT OF THE ASSESSEE. ACCORDINGLY IT IS HELD THAT ALL UNDISCLOS ED INCOME / RECEIPTS HAVE BEEN DEPOSITED IN THE BANK AND THEREF ORE ALL CREDIT ENTRIES APPEARING IN BOTH THE BANK ACCOUNTS, AS DISCLOSED BY THE ASSESSEE, NEEDS TO BE TAXED IN THE HANDS OF THE ASSESSEE. HENCE, THE AMOUNT OF RS. 20,37,05,000/- BEING TOTAL AMOUNT OF RS. 12,47,50,000/- AS CREDITED IN SBI PLUS RS. 7,8 9,55,000/- AS CREDITED IN ABN AMRO BAN IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE UNDERSIGNED IS AWARE THAT IF THE ASSESSEE WOULD HAVE EXPLAINED THE ENTRIES PROPERLY, POSSIBLY PEAK BALANCE THEORY WOULD HAVE BEEN APPLIED HERE. BUT SI NCE THE ASSESSEE NEVER TOOK THAT PLAN AND ALSO THAT THE ASS ESSEE HAS FAILED TO DISCHARGE ITS ONUS THAT THE CREDIT ENTRIE S IN THE BANK ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 7 ACCOUNT WERE SAME AND SAME MONEY/FUND WAS ROTATED D URING THE YEAR. THEREFORE BECAUSE OF FAILURE ON THE PART OF THE ASSESSEE TO DISCHARGE ITS ONUS THE ENTIRE CREDIT EN TRIES ARE BEING ADDED U/S 68 OF THE ACT. 2.3. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL WHE RE CIT(A) DELETED THE ADDITION BY FOLLOWING OBSERVATIONS: I HAVE PERUSED AND EXAMINED ALL THE DOCUMENTS ARE RECORD. IN THIS FIRST INSTANCE THE AO IS MAKING CONTRADICT ORY STATEMENT AT VARIOUS PLACES IN THE ORDER. AT ONE PL ACE SHE HAS STATED THAT PRINT OUT OF ALL ENTRIES IN THE BANK ST ATEMENT, CASH FLOW STATEMENT, LEDGER OF ALL EXPENSES WERE PRODUCE D. IN PARA 4 SHE HAS STATED THAT NO SUCH DETAILS HAVE EVER BEEN FURNISHED DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT HAS SUBMITTED BEFORE ME THAT THE FOL LOWING WERE PRODUCED BEFORE THE AO. 1. COPY OF BANK ACCOUNT 2. DETAILED NARRATION CASH ENTRY. 3. COPIES OF CONVEYANCE DEEDS. 4. DETAILS OF CONFIRMATION, ASSESSMENT DETAILS AND COP IES OF CHEQUES RECEIVED AS ADVANCE FROM PARTNERS AND REFUN D OF ALL ADVANCES RECEIVED ALONG WITH COPIES OF CHEQUES. THE APPELLANT HAS SHOWN THAT IDENTITY OF ALL THE PE RSONS WHO HAD PURCHASED THE LAND AND GIVEN ADVANCE FOR PURCHA SE OF LAND IS PROVED. THEIR CREDIT WORTHINESS HAS BEEN PROVED AND THE GENUINENESS OF THE TRANSACTIONS HAS BEEN PROVED AS ALL PAYMENT ARE THROUGH BANKING CHANNELS. PERUSAL OF THE RECORD SHOWED ORDER SHEET ENTRY DAT ED 24/12/10 HE PRODUCES LEDGER (PRINTED COPY) OF CASH BOOK, BANK BOOK AND OTHER BOOKS OF ACCOUNT WHICH COULD NO T BE VERIFIED IN ABSENCE OF BILLS/ VOUCHERS. IT IS THER EFORE VERY CLEAR THAT BOOKS OF ACCOUNT WERE PRODUCED. HOWEVER IT APP EARS VOUCHERS/BILLS WERE PRODUCED. BUT HERE AGAIN THE AO DID NOT PROVIDE ANY FURTHER OPPORTUNITY TO THE APPELLANT TO PRODUCE THE ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 8 BILLS/VOUCHERS. ALSO NO ADDITIONS HAVE BEEN MADE ON THE GROUND OF NON VERIFICATION OF EXPENSES IN ABSENCE OF BILLS AND VOUCHERS. THE AO HAS STATED THAT THE APPELLANT HAS SOLD/PURC HASED PROPERTIES AT THE RATE WHICH BELOW THE CIRCLE RATE. HOWEVER, NO INSTANCES HAVE BEEN CITED BY THE AO TO SHOW IN WHIC H CASES THIS HAS OCCURRED. THE AO ALSO DID NOT MAKE ANY INQUIRIE S IN THIS REGARD. THE ADDITION ULTIMATELY MADE BY THE AO WAS UNDER SECTION 68. I HAVE FURTHER PERUSED THE RECORD AND SEEN THAT CO PIES OF BANK ACCOUNT LEDGER ACCOUNTS, CASH BOOK AND COPIES OF ALL SALE DEEDS, CONFIRMATION FROM PARTIES FROM WHOM ADVANCES WERE RECEIVED THEIR PAN NO., WARDS/CIRCLE ETC. ARE ALL O N RECORD. THE APPELLANT SUBMITTED THAT THE ASSESSING OFFICER HAS ADDED BACK THE TOTAL DEPOSITS OF RS. 12,47,50,000/- OF STATE BANK OF INDIA DURING THE FULL YEAR BUT ONLY FOR THE PERIOD 1.1.2008 TO 31.3.2008. BALANCE FOR THE REMAINING 9 MONTHS IS RS. 22,67,62,500/-. THE APPELLANT POINTED OUT THAT THE APPELLANT HAS T WO BANK ACCOUNTS I.E. ONE IN STATE BANK OF INDIA AND THE OT HER IN ABN AMRO BANK. THE AO HAS STATED ACCORDINGLY IT IS HELD THAT ALL UNDISCLOSED INCOME / RECEIPTS HAS BEEN DEPOSITED IN THE BANKS A ND THEREFORE ALL CREDIT ENTRIES APPEARING IN BOTH THE BANK ACCOU NTS, AS DISCLOSED BY THE ASSESSEE NEEDS TO BE TAXED IN THE HANDS OF THE ASSESSEE. HENCE, THE AMOUNT OF RS. 20,37,05,000/- B EING THE TOTAL AMOUNT OF RS. 12,47,50,000/- AS CREDITED IN S BI PLUS RS. 7,89,55,000/- AS CREDITED IN ABN AMRO BANK WHICH IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE APPELLANT SUBMITTED THAT IT IS NOT AT ALL UNDE RSTOOD AS TO ON WHAT BASIS THE TOTAL DEPOSITS FOR THREE MONTH S IN ONE BANK AND TOTAL DEPOSITS IN THE OTHER BANK ACCOUNT FOR TH E ENTIRE YEAR CAN BE TREATED AS THE INCOME OF THE APPELLANT AND A DDITION MADE U/S 68 OF THE INCOME TAX ACT, 1961 WHICH DEALS WITH THE CASH CREDITS. THE APPELLANT STATED THAT THIS ADDITI ON HAS BEEN MADE WITHOUT ANY LOGIC, AND THEREFORE IS NOT SUSTAI NABLE, ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 9 THE APPELLANT HAS STATED THAT THE TOTAL ADDITION OF RS. 20,37,05,000/- CONSISTS OF THE FOLLOWING: IN SBI & ABN AMRO BANK 1) ADVANCE GIVEN LAST YEAR RECEIVED BACK IN CURRENT YE AR RS. 9,75,00,000/-. COMPLETE DETAILS OF THE PARTIES WITH COPIES OF THEI R CONFIRMATIONS, COPIES OF ACCOUNTS, PHOTOCOPIES OF T HE CHEQUES AND INCOME TAX ASSESSMENT DETAILS WERE PROVIDED. AMOUNTS OF RS. 4,77,55,000/- WERE GIVEN AS ADVANCE AND RECEIVED BACK DURING THE SAME YEAR I.E. RELEVANT YE AR. HERE ALSO COMPLETE DETAILS OF THE PARTIES, CONFIRMA TION COPIES, COPIES OF CHEQUES AND INCOME TAX DETAILS WERE PROVI DED. 2) AN AMOUNT OF RS. 1,10,00,000/- WAS ADVANCE RECEIVED DURING THE YEAR WHICH REMAINED OUTSTANDING AT THE Y EAR END. HERE ALSO COMPLETE DETAILS OF THE PARTIES, CONFIRMA TION COPIES, COPIES OF CHEQUES AND INCOME TAX DETAILS WERE PROVI DED. 3) AN AMOUNT OF RS. 1,75,00,000/- WAS RECEIVED AS ADVA NCE AND WAS PAID BACK DURING THE YEAR. HERE ALSO COMPLETE DETAILS OF THE PARTIES, CONFIRMA TION COPIES, COPIES OF CHEQUES AND INCOME TAX DETAILS WERE PROVIDED TO THE LD. ASSESSING OFFICER. 4) AN AMOUNT OF RS. 1,75,00,000/- WAS RECEIVED AS ADVA NCE AND WAS PAID BACK DURING THE YEAR. HERE ALSO COMPLETE DETAILS OF THE PARTIES, CONFIRMA TION COPIES, COPIES OF CHEQUES AND INCOME TAX DETAILS WERE PROVI DED TO THE LD. ASSESSING OFFICER. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 10 5) AN AMOUNT OF RS. 1,07,05,000/- WAS RECEIVED ON ACCO UNT OF SALE OF LAND. COPIES OF THE CONVEYANCE DEEDS REL ATING TO EACH SALE WERE SUBMITTED. 6) RS. 27,50,000/- WAS THE AMOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE WHICH WAS ALSO TREATED AS UNEXPLAINED CASH CREDIT. 7) AN AMOUNT OF RS. 1,65,00,000/- WAS DEPOSITED AS ADV ANCE RECEIVED FROM PARTIES AS ON 31.03.2008 AND THE SAME WAS REVERSED ON THE SAME DAY AS THE CHEQUE WAS BOUNCED. THE CHEQUES WHICH BOUNCED CAN NEVER BE CREDITED TO THE PARTYS ACCOUNT AGAIN AND THEREFORE CANNOT BE TREATED AS UN EXPLAINED CASH CREDIT, WHICH IS TOTALLY UNREASONABLE AND WITH OUT ANY LOGIC. IN MY VIEW THE AO SHOULD HAVE GIVEN A FINDING IN RE SPECT OF EACH PERSON WHO HAD GIVEN THE DEPOSIT/ADVANCE / CRE DIT. TO ADD UP ALL WITHOUT MAKING PROPER INQUIRIES IS NOT THE C ORRECT MAY TO PROCEED. THE APPELLANT HAD GIVEN ALL SALE DEEDS IN R/O LAND SOLD ALONGWITH DETAILS OF PAYMENTS MADE AND IDENTITY OF THE PERSONS MAKING THE PAYMENTS AND HAD EXPLAINED THE AMOUNT IN VESTED BY EACH PERSON IN R/O ADVANCES RECEIVED ALONGWITH THE DETAILS OF THE PAN NO., THE WARD / CIRCLE WHERE ASSESSED, THE COPIES OF BANK ACCOUNTS, COPIES OF CHEQUES. THE APPELLANT HAD DISCHARGED ITS ONUS OF PROVING THE IDENTITY OF THE PERSONS, THEIR CREDIT WORTHINESS AND THE GENUINENESS OF THE TRANSA CTION. ON THE OTHER HAND THE AO HAS MADE NO INQUIRY IN RE SPECT OF EACH PERSON TO SHOW THAT THE EVIDENCE SUBMITTED BY THE APPELLANT WAS NOT CORRECT. THE AO HAS NOT MADE ANY INQUIRY IN RESPECT OF THE AMOUNTS WHICH HAVE BEEN ADDED TO THE INCOME OF THE APPELLANT. IT WAS THE DUTY OF THE AO TO UTILIZE THE INFORMATION TO PROVE THAT THE INVESTMENT MADE BY TH E PERSONS WAS NOT GENUINE. ONCE THE APPELLANT HAD DISCHARGED ITS RESPONSIBILITY IT WAS THE DUTY OF THE AO TO MAKE IN QUIRES. NOWHERE HAS THE AO STATED THAT THE DOCUMENTS PRODUC ED BY THE APPELLANT WERE NOT GENUINE. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THIS MONEY WAS THE APPELLANT ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 11 OWN UNDISCLOSED INCOME. THE AO HAS TAKEN THE EASY W AY OUT AND ADDED ALL THE DEPOSITS IN THE APPELLANTS BANK ACCOUNT. HERE TOO THE AO HAS FLOUNDERED AND MADE AN ADDITION OF ONLY PART OF THE DEPOSITS IN ONE BANK ACCOUNT I.E. ABN A MRO BANK. AS DECIDED BY DELHI HIGH COURT IN THE CASE OF CIT VS. KINETIC CAPITAL FINANCE LTD (2011) 14 TAXMAN 150 EV EN WHERE CASH CREDITS ARE PROPOSED TO BE ADDED TO THE INCOME OF THE ASSESSEE EACH TRANSACTION IS TO BE PROVED, VERIFIED AND FINDING IS TO BE ARRIVED AT INDIVIDUALLY. A BUNCH OF TRANSA CTIONS IS TO BE PROVED, VERIFIED AND FINDING IS TO BE ARRIVED AT IN DIVIDUALLY. A BUNCH OF TRANSACTIONS CANNOT BE CLUBBED TOGETHER AD ADDED BACK. IN CASE OF CIT VS GANGAUR INVESTMENT THE DELHI HIG H COURT STATED THAT AN ADDITION CAN BE MADE U/S 68 OF THE APPELLANT IS NOT ABLE TO EXPLAIN THE CREDITS. IN CA SE THE ASSESSING OFFICER WAS NOT SATISFIED ABOUT THE SOURC E OF ANY AMOUNT RECEIVED, AN ENQUIRY IN THOSE PARTICULAR CAS ES SHOULD HAVE BEEN MADE AND IF THE SAME WAS NOT FOUND GENUIN E SECTION 68 WOULD HAVE BEEN ATTRACTED. THIS GROUND OF APPEAL IS RULED IN FAVOUR OF THE APPELLANT . 2.4. APROPOS THE SECOND GROUND OF APPEAL- AO MADE A DDITION OF RS. 4,32,07,394/- HOLDING THAT TOTAL INCREASE IN SUNDR Y CREDITORS WAS UNEXPLAINED BY FOLLOWING OBSERVATIONS: 5. FROM THE RECORDS IT IS SEEN THAT THERE IS HUGE INCREASE IN SUNDRY CREDITORS OF RS. 4,32,63,611/- AS COMPARED T O THE PREVIOUS YEAR OF RS. 56,217/-. THE ASSESSEE HAS SUB MITTED THAT AMOUNT WAS STANDING AGAINST THE PARTY TARAL VINCOM PVT. LTD WHICH WAS PAID BACK SUBSEQUENTLY. TO VERIFY THE CLA IM OF THE ASSESSEE NOTICE U/S 133(6) OF THE ACT BACK SUBSEQUE NTLY. TO VERIFY THE CLAIM OF THE ASSESSEE NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO TARAL VINCOM PVT. LTD., 37A, BENTICK STRE ET, KOLKATA- 700069 ASKING THE PARTY TO FURNISH FOLLOWING INFORM ATION: ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 12 1. CERTIFIED LEDGER COPY OF THE ABOVE NAMED ASSESSEE I N YOUR BOOKS OF ACCOUNT. 2. PROOF OF PAYMENT MADE TO THE ABOVE NAMED ASSESSEE THROUGH BANKING CHANNEL. 3. KINDLY EXPLAIN ON WHAT ACCOUNT THE SAID PAYMENTS WE RE MADE BY YOU. 4. COPY OF BANK STATEMENT, COPY OF ITR AND COPY OF AUD ITED BALANCE SHEET AND AUDIT REPORT BE SUBMITTED FOR AY 2007-08, 2008-09, 2009-10. 5. KINDLY PROVIDE SHARE HOLDING PATTERN FOR THE FINANC IAL YEAR ENDING 2007, 2008 AND 2009. 2.5. THE 133(6) NOTICE WAS RETURNED BACK WITH THE R EMARK NOT KNOWN. THE APPELLANT WAS ASKED TO PRODUCE THE PARTY BUT TH E APPELLANT GAVE COPIES OF ITR AND BALANCE SHEET. THE APPELLANT IN HIS SUBM ISSIONS HAS STATED THAT THE AMOUNT OF RS. 4,32,07,394/- CONSISTS OF AMOUNT OF RS. 4,31,66,181/- DEBITED TO M/S TARA VINCOM PVT. LTD. AND RS. 40,513 /- PAYABLE TO M/S ANIL CHADHA & CO. AUDITORS. ASSESSING OFFICER, HOWEVER WAS NOT SATISFIED WITH THIS EXPLANATION AND MADE THE ADDITION BY FOLLOWING OBSERVATIONS: 5.2. IN VIEW OF THE ABOVE IT IS ESTABLISHED THAT TH E4 ASSESSEE HAS FAILED TO PROVE IDENTITY, CRE3DITWORTHINEWSS OF THE LENDER AND GENUINENESS OF THE TRANSACTIONS AND HAS ALSO FAILED O EXPLAIN THE BUSINESS PURPOSES OF SUCH LIABILITY, THEREFORE IT IS HELD THAT THE AMOUNT OF RS. 4,32,07,394/-(4,32,63,611-56,217 WHICH BELONGS TO EARLIER YEAR) IS ITS OWN UNACCOUNTED MON EY AND IS LIABLE TO BE TAXED IN ITS HANDS. ACCORDINGLY AN AMO UNT OF RS. 4,32,07,394/- IS DISALLOWED AND ADDED BACK TO THE T OTAL INCOME OF THE ASSESSEE. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 13 2.6. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL, CIT (A) DELETED THE ADDITION BY FOLLOWING OBSERVATIONS: I HAVE PERUSED ALL THE DOCUMENTS. THE AO HAS ADDED THE AMOUNT IN RESPECT OF SUNDRY CREDITORS AMOUNTING TO RS. 4,32,07,394/- STATING THAT THE AMOUNT WAS THE APPEL LANTS OWN UNACCOUNTED MONEY. THE AMOUNT HOWEVER AS SUBMITTED BY THE APPELLANT REPRESENTS AMOUNT DUE TO M/S TARAL VINCOM PVT. LTD. FOR THE WORK DONE FOR THE APPELLANT IN THE NORMAL C OURSE OF BUSINESS. THIS WAS A PERSON TO WHOM THE APPELLANT O WED MONEY AND WHO WAS PAID BY THE APPELLANT IN THE NEXT YEAR. THE APPELLANT HAS SUBMITTED ALL DETAILS IN RESPECT OF THE AMOUNT OF RS. 43,26,361/- THE AMOUNT WAS IN RESPECT OF TARAL VINCOM PVT. LTD. A COMPANY WHICH IS HAVING A GENUIN E PAN NO. AND IS ASSESSED IN KOLKATA. THE ITR/ BALANCE SH EET WERE ALL ON RECORD AND THE AMOUNT IN QUESTION WAS REFLECTED IN THE ACCOUNTS OF THE COMPANY. THE IDENTITY OF THE COMPAN Y WAS PROVED, THE CREDITWORTHINESS WAS PROVED AND THE GEN UINENESS OF THE TRANSACTION WERE PROVED BY THE APPELLANT. THE A DDITION OF RS. 4,32,07,394/- IS THEREFORE DELETED. THIS GROUND OF APPEAL IS RULED IN FAVOUR OF THE APPELLANT. THE RATIONALE OF THE JUDGMENT IN THE CASE OF LOVEL Y EXPORTS IS APPLIED HERE. ALTHOUGH THIS IS NOT A CAS E OF SHAREHOLDERS BUT THE SAME LOGIC CAN BE APPLIED IN T HIS CASE AS THE ADDITION HAS BEEN MADE U/S 68. BEFORE CONCLUDING I WOULD LIKE TO STATE THAT THE CONCERNED AO IS DIRECTED TO FORWARD THE DETAILS OF ALL PERSONS WHO HAVE INVESTED IN THE LAND WITH M/S SHOKEEN PROP ERTIES PVT. LTD. TO THEIR RESPECTIVE AOS. THE CONCERNED AOS M AY EXAMINE THE INVESTMENT OF THE INVESTORS MADE. IF ON THE BAS IS OF DETAILS MAY BE GATHERED BY AOS, THE AO OF M/S SHOKEEN PROPE RTIES PVT. LTD. GETS INFORMATION THAT THE AMOUNTS REPRESE NTS THE INCOME OF THE APPELLANT IN TERMS OF THE PROVISION O F THE ACT THE AO MAY INITIATE ACTION UNDER SECTION 148 FOR THE RE LEVANT ASSESSMENT YEAR IN THE CASE OF THE APPELLANT ON THE BASIS OF SUCH INFORMATION. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 14 2.7. AGGRIEVED REVENUE IS BEFORE US. LD. DR CONTENDS THAT: (I) CIT(A) HAS FAILED TO APPRECIATE THAT THERE WAS NON COMPLIANCE ON THE PART OF THE ASSESSEE. THUS, IT INDICATES THAT T HE ASSESSEE FAILED TO DISCHARGE ITS ONUS; (II) THE CONFIRMATIONS ARE FROM UNCONFIRMED CREDITORS AN D VARIOUS DOUBTS ABOUT THE VALUATION OF PROPERTY TRANSACTION S BEING LESS THAN THE MARKET VALUE HAS BEEN POINTED OUT. THUS, ASSESS EE WAS GENERATING UNACCOUNTED MONEY WHICH HAS BEEN INTRODU CED IN THE BANK ACCOUNTS ON VARIOUS DATES. (III) THE NOTICE SENT TO TARAL VINCOM CAME UNSERVED. THER EFORE, THE ASSESSING OFFICER DREW ADVERSE INFERENCE AND MADE T HE ADDITION. (IV) CIT(A) HAS FAILED TO CONSIDER VARIOUS PERTINENT OBS ERVATIONS MADE BY ASSESSING OFFICER WHICH RENDERS HIS ORDER NON SP EAKING AND THE RELIEF HAS BEEN AWARDED BY SUCH NON SPEAKING ORDER . (V) IN THE ALTERNATE IT IS PLEADED THAT THE MATTER MAY BE SET AND RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH VER IFICATION. 4. LD COUNSEL FOR THE ASSESSEE AT THE OUT SET CONTE NDS THAT IT SHOULD BE BORNE IN MIND THAT THE MATTER BEFORE ITAT IS NEITHE R A CASE OF ACCEPTING SHARE CAPITAL NOR THERE IS ANY ALLEGATION OF USING ANY ACCOMMODATION ENTRIES. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 15 THE ISSUES AGITATED ARE ROUTINE BUSINESS TRANSACTIO NS OF CREDITS AND DEBITS EMANATING FROM THE REGULAR AUDITED BOOKS OF ACCOUNT S. THE BANK ACCOUNTS SUNDRY CREDITORS AND VARIOUS OTHER ENTRIES ARE PART OF THE REGULARLY MAINTAINED AUDITED BOOKS OF ACCOUNTS. THE VERACITY OF THE BOOKS OF ACCOUNTS HAS NOT AT ALL BEEN CHALLENGED AND THERE IS NO WHIS PER OF ANY REJECTION OF BOOKS U/S 145 OF THE IT ACT. THERE IS NO MERIT IN T HE CONTENTIONS OF LD. DR AS CIT(A) HAS CONSIDERED EACH AND EVERY OBSERVATION OF ASSESSING OFFICER AND COMMENTED IN CATEGORICAL TERMS ABOUT THE SELF CONTR ADICTIONS AND INFIRMITIES IN HIS OBSERVATIONS. THOUGH A VAGUE REFERENCE HAS B EEN MADE TO THE GENERAL TREND IN THE REAL ESTATE MARKET ABOUT ON MONEY WH ICH IS OF NO RELEVANCE INASMUCH AS NEITHER ANY SPECIFIC TRANSACTION HAS BE EN INDICATED NOR THE EXTENT OF ON MONEY IS SPECIFIED. ON SWEEPING OBSE RVATIONS, CONJECTURES AND SURMISES IT HAS BEEN ASSUMED THAT THE ALLEGED ON MONEY HAS BEEN USED BY THE ASSESSEE TO INTRODUCE IT IN THE BANK ACCOUNT S AND BOOKS OF ACCOUNTS. WHILE MAKING SUCH UNSUBSTANTIATED ALLEGATIONS LD. A SSESSING OFFICER FAILED TO APPRECIATE THAT BOOKS OF A/CS HAVE BEEN ACCEPTED BY HIM AND ASSESSEE HAS EXPLAINED EACH AND EVERY CREDIT ENTRIES IN THE BOOK S AND BANK ACCOUNTS ALONG WITH FULL DESCRIPTIONS THEREOF. THEREFORE, THERE IS NO MERIT IN THE SKETCHY ALLEGATIONS OF ASSESSING OFFICER AND LD. DRS ARGUM ENTS DO NOT CARRY ANY WEIGHTAGE. CIT(A) HAS MADE EVERY EFFORT TO IDENTIFY THE ACTUAL FACTS, BASED ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 16 ON RELEVANT MATERIAL AND GIVE ADEQUATE REASONINGS F OR HIS OBSERVATIONS. THERE IS NO MERIT IN THE ARGUMENT OF LD. DR THAT TH E MATTER MAY BE SET ASIDE INASMUCH AS ASSESSING OFFICER HAS FAILED TO EXERCIS E HIS POWERS IN A DILIGENT AND JUDICIAL MANNER . CIT(A) HAS CORRECTED THE SAME USING HIS APPELLATE POWERS AND AFTER ELABORATE DISCUSSIONS ABOUT FACTS, LAW AND CIRCUMSTANCES HAS BASED HIS OBSERVATIONS AND FINDINGS ON COGENT M ATERIAL AND REASONINGS. 4.1. APROPOS FIRST GROUND I.E. AD HOC ADDITION OF A LL THE CREDIT ENTRIES IN SBI AND ABN AMRO BANK A/CS IT IS PLEADED THAT: (A) THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS RE QUIRED TO MAINTAIN PROPER BOOKS OF ACCOUNT IN ACCORDANCE WITH VARIOUS REGULATORY LAWS. THE ACCOUNTS ARE APPROVED BY THE B OARD OF, SHAREHOLDERS AND ALSO FIELD BEFORE THE REGISTRAR OF COMPANIES. NO ADVERSE COMMENT/ QUALIFICATION HAVE BEEN MADE IN TH E STATUTORY AUDIT REPORT/ TAX AUDIT REPORT. (B) THE COMPLETE CORRESPONDENCE DURING THE COURSE OF AS SESSMENT FILED BY THE ASSESSEE WITH THE ASSESSING OFFICER IS PART OF THE PAPER BOOK. THE GAMUT OF EVIDENCE FILED CORROBORATES ASSE SSEES STAND ABOUT SUFFICIENT DISCHARGE OF ITS PRIMARY ONUS IN THIS BE HALF. (C) IT SHALL BE PERTINENT TO MENTION THAT FOR THE PURPO SE OF DETAILED VERIFICATION, COMPLETE LEDGER WAS RETAINED BY THE L EARNED ASSESSING OFFICER. A FRESH SET OF CASH BOOK AND LEDGER ALONG WITH ALL THE SUPPORTING VOUCHERS/ DOCUMENTS WERE PRODUCED AS MEN TIONED IN LETTER DATED 28 TH DECEMBER, 2010. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 17 (D) AN AFFIDAVIT DULY SWORN BY SH. DHIRAJ WADHWA, FCA S TATING THE FACT OF PRODUCTION OF BOOKS AND SUPPORTING DOCU MENTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS PLACED ON THE P APER BOOK. THUS COMPLETE BOOKS OF ACCOUNT INCLUDING CASH BOOK, BANK BOOK, LEDGERS, BANK STATEMENTS WITH NARRATION AND VOUCHERS AND SUP PORTING DOCUMENTS WERE PRODUCED BEFORE AO AND RELEVANT COPI ES WERE ALSO FILED. THUS THERE IS NO MERIT IN AOS ALLEGATIONS TH AT ASSESSEE DID NOT FULLY COMPLY WITH THE REQUIREMENT. THE RECORD STAND S TESTIMONY TO ASSESSES STAND THAT EVERYTHING ASKED BY AO WAS FILE D WITH AO, WHICH HAS BEEN ALSO VERIFIED BY LD. CIT(A). (E) THE ADDITION OF RS. 20,37,05,000/- U/S 68 OF THE IN COME TAX ACT MADE BY AO IS GROSSLY ERRONEOUS, ILLOGICAL AND UNSUSTAINABLE. THESE AMOUNTS CONSIST OF TOTAL DEPOSITS IN ASSESSEE S TWO BANK ACCOUNTS I.E., RS. 12,47,50,000/- IN SBI AND RS. 7, 89,55,000/- IN ABN AMRO BANK. LEGALLY SPEAKING THE BANK DEPOSITS DO NO T COME IN THE DEFINITION OF CASH CREDITS. (F) AO FAILED TO APPRECIATE THAT THERE ARE A) NO CASH C REDIT, B) TAX AUDIT REPORT U/S 44AB CERTIFIES THAT THERE ARE NO C ASH CREDITS OR SQUARED UP ACCOUNTS, C) THE BALANCE SHEET DOES NOT SHOW ANY LOANS EXCEPT BANK LOANS AGAINST PURCHASE/ HYPOTHECATION O F CARS, D) EACH ENTRY OF DEPOSIT IN THE BANKS HAS BEEN PROPERLY EXP LAINED WITH NECESSARY EVIDENCE WHEREVER REQUIRED. THUS THERE IS NO JUSTIFICATION TO TREAT NORMAL BANKING TRANSACTIONS OF ASSESSES BUSIN ESS AS UNEXPLAINED CASH CREDITS. (G) COMPLETE DETAILS QUA THE ENTRIES IN BANK STATEMENTS WITH NARRATION OF EACH CREDIT ENTRY WITH SUPPORTING EVID ENCE WHEREVER REQUIRED WERE FILED BEFORE THE LEARNED ASSESSING OF FICER . THEY WERE ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 18 PRODUCED BEFORE LD. CIT(A) AS WELL AS IN THE PAPER BOOK FILED BEFORE ITAT. THESE AMOUNTS OF RS. 12,47,50,000/- IN SBI AN D RS. 7,89,55,000/- IN ABN AMRO BANK CONSIST OF AMOUNTS R ECEIVED ON ACCOUNT OF SALE OF LAND, ADVANCES RECEIVED FOR SALE OF LAND TRANSACTED DURING THE COURSE OF ASSESSEE REAL ESTATE BUSINESS. ALL THESE DETAILS AND CONFIRMATIONS ALONG WITH COPIES OF CHEQUES, REFUND OF ADVANCES GIVEN BY THE ASSESSEE AND DEPOSIT OF AVAILABLE CASH IN HA ND WERE FILED AND EXPLAINED BEFORE THE AO. NEITHER THE AO IN ASSESSME NT ORDER NOR LD. DR IN THE COURSE OF HIS ARGUMENTS HAS ADVERTED TO T HIS VOLUMINOUS EVIDENCE FILED BY THE ASSESSEE, WHICH IS VERIFIED F ROM RECORD BY LD. CIT(A). BASED ON SUCH VERIFICATION LD CIT(A) HAS PA SSED A SPEAKING ORDER GIVING ADEQUATE REASONS FOR GRANTING THE RELI EF. (H) IT IS SUBMITTED THAT THE BANK DEPOSITS ARE NOT CRED ITS BUT DEBITS. IT REPRESENTS OUTFLOW OF FUNDS AND NOT INFLOW OF FU NDS. CASH CREDIT NECESSARILY BY DEFINITION INVOLVES FUNDS RECEIVED ( INFLOWS) AND NOT FUNDS GOING OUT (OUTFLOWS). THE LD. ASSESSING OFFIC ER HAS WRONGLY INVOKED SEC. 68 TO ADD EVEN OUTFLOWS WHICH IS NOT A S PER LAW. (I) IN ASSESSEES CASE THE AMOUNTS WERE RECEIVED AGAINS T SALE OF LAND, THE SALE DEEDS OF WHICH WERE FILED WITH THE L D. ASSESSING OFFICER. ADVANCES RECEIVED FROM THE CUSTOMERS AND R EFUND AND ADVANCES RECEIVED BACK WITH ALL THE VOUCHERS/ CONFI RMATIONS AND COPIES OF CHEQUES WERE FILED WITH THE LD. ASSESSING OFFICER. THEREFORE, THERE IS NO JUSTIFICATION IN INSISTING F OR ORIGINAL BILLS/ VOUCHERS RELATING TO EXPENSES WITH THE ADDITIONS MA DE. (J) THERE IS NO LOGIC/BASIS OF ADDITION OF RS. 20,37,05 ,000/- AS THE INCOME OF THE ASSESSEE, WHICH IS AGAINST THE LETTER AND SPIRIT OF THE LAW. ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 19 (K) THE TOTAL CREDITS IN ABN AMRO BANK WERE TAKEN FOR 3 MONTHS PERIOD ONLY. THERE WERE CREDITS FOR THE REMAINING 9 MONTHS OF RS. 22,67,62,500/-. IN SBI THE CREDITS FOR THE ENTIRE 1 2 MONTHS WAS TAKEN. LD COUNSEL RELIED ON HONBLE DELHI HIGH COURT JUDGM ENT IN THE CASE OF CIT VS. KINETIC CAPITAL FINANCE LTD. (SUPRA) FOR THE PROPOSITION THAT FOR ADDITION U/S 68 EACH AND EVERY ENTRY SHOULD BE IDENTIFIED AND A BUNCH OF TRANSACTION WITHOUT SPECIFYING THE INSTANC E AS UNEXPLAINED CANNOT BE ADDED U/S 68. (L) THE MATTER WAS EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE WITH ALL THE NECESSARY EVIDENCE IN SUPPORT OF EACH BANK DEPOSIT WAS SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER AS A VAILABLE IN THE ASSESSMENT FILE. NO DOUBT ON THE GENUINENESS OF DOC UMENTS HAS BEEN RAISED BY THE LEARNED ASSESSING OFFICER. (M) IF THE LEARNED ASSESSING OFFICER WAS NOT SATISFIED WITH THE EVIDENCE SUBMITTED, SHE COULD ALWAYS HAVE GONE FURT HER AND ASKED FOR THE DOCUMENTS, WHICH WAS NOT DONE BY THE LEARNE D ASSESSING OFFICER. THE EVIDENCE AVAILABLE IN THE ASSESSMENT R ECORDS INCLUDES THE SALES DEEDS OF THE LANDS SOLD, CONFIRMATIONS OF PARTIES FROM WHOM ADVANCES WERE RECEIVED, INCLUDING COPIES OF TH EIR ACCOUNTS, CONFIRMATIONS, PAN AND OTHER INCOME TAX DETAILS AND ALSO COPIES OF CHEQUES RECEIVED FROM THEM ARE AVAILABLE IN THE FIL E. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT EMERGES FROM THE RECORD THAT WHATEVER COMPLIANCE WAS ASKED BY AO, ASSESSEE HAS DULY FILED THE SAME. THE CORRESPONDENCE PLACED ON PAPER BACK IS DULY VERIFIE D BY THE CIT(A) FROM ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 20 THE RECORD. LD. DR COULD NOT COUNTER THIS FACT. IN THESE CIRCUMSTANCES WE SEE NO MERIT IN THE ALLEGATION OF LD. AO THAT ASSESSEE FAILED TO COMPLY WITH HER DIRECTIONS. 5.1. IT IS A WELL SETTLED PROPOSITION THAT ONUS CAS T U/S 68 IS PRIMARY IN NATURE. IN THIS CONTEXT WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) THAT AS A PER THE FIRST REQUIREMENT OF SEC 68 ASSESSEE DISCHA RGED ITS PRIMARY ONUS. HAVING DONE SO, NOW THE BOLL WAS IN THE COURT OF AO TO REBUT THE EVIDENCE FILED BY THE ASSESSEE WHICH CONTAINS EXPLANATION OF EACH AND EVERY CREDIT ENTRY IN SBI AND ABN AMRO BANK A/CS. WE HAVE TO EXA MINE WHETHER AO JUDICIOUSLY REBUTTED THE DISCHARGE OF PRIMARY ONUS. IN ORDER TO JUDICIALLY ASCERTAIN FACTS IN THIS BEHALF, AO HAS TO PROPERLY PERUSE THE MATERIAL AND INDICATE WHICH OF THE ENTRIES ARE UNEXPLAINED. WITH OUT THIS BASIC EXERCISE THERE CAN NOT EFFECTIVE REBUTTAL TO DISBELIEVE THE DISCHARGE OF PRIMARY ONUS BY THE ASSESSEE. 5.2. HONBLE DELHI HIGH COURT IN KINETIC CAPITAL FI NANCE LTD. (SUPRA) HAS HELD THAT EACH INSTANCE OF CASH CREDIT IS TO BE IDE NTIFIED AND A BUNCH OF TRANSACTION WITHOUT SPECIFYING THE DETAILS CANNOT B E ADDED U/S 68. THUS, THE ACTION OF ASSESSING OFFICER IS ALSO TO THE CONTRARY TO THE MANDATE OF HONBLE DELHI HIGH COURT. 5.3. KEEPING IN VIEW THESE FACTS, CIRCUMSTANCES AND COMPLIANCE ON RECORD THE DISCHARGE OF INITIAL ONUS IS NOT PROPERLY REBUT TED BY AO. ASSESSEE HAS EXPLAINED EACH CREDIT ENTRY IN BOTH THE BANK A/CS A LONG WITH THE SOURCE THEREOF I.E. CASH AVAILABLE IN BOOKS. BANK A/CS ARE DISCLOSED AND PART OF THE REGULAR RECORDING OF ASSESSES REAL ESTATE BUSINESS. THEY HAVE NOT BEEN REJECTED, THEREFORE, THE BOOKS OF ACCOUNTS AND GENE RATION OF CASH IS THUS IMPLIEDLY ACCEPTED BY AO. HAVING ACCEPTED THE BOOKS OF A/CS IT DOES NOT LIE WITH ASSESSING OFFICER TO ADOPT A PRESUMPTIVE APPRO ACH TO SUMMARILY HOLD ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 21 THAT ALL CREDIT ENTRIES IN BANK AND BOOKS ARE UNEXP LAINED. THERE IS TOTAL LACK OF APPRECIATION OF FACTS AND MATERIAL AVAILABLE ON RECORD AND THE ASSESSING OFFICERS OBSERVATIONS SUFFER FROM SELF CONTRADICTI ONS. CIT(A) HAS DULY VERIFIED THE SAME FROM RECORD, BESIDES IS NO REVENU E GROUND THAT ANY ADDITIONAL EVIDENCE WAS RELIED ON BY CIT(A). POWER OF LD. CIT(A) ARE COTERMINOUS WOTH AO AND INCLUDE THE POWER OF ENHANC EMENT ALSO. CIT(A) AFTER VERIFICATION HAS GIVEN CLEAR FINDINGS OF FACT S THAT AO FAILED TO PROPERLY CONSIDERED THE MATERIAL PRODUCED BY THE ASSESSEE IN DISCHARGE OT ITS PRIMARY ONUS. IT HAS ALSO FURTHER HELD THAT DUE TO NON APPR ECIATION OF ASSESSES EXPLANATION AND EVIDENCE IN A PROPER MANNER, AO HAS MADE CONTRADICTORY OBSERVATIONS WHICH HAVE BEEN CITED. 5.4. IN VIEW OF THE FOREGOINGS WE UPHOLD THE FINDIN G OF LD CIT(A) THAT ASSESSEE DULY DISCHARGED ITS PRIMARY ONUS IN TERMS OF SEC 68 TO EXPLAIN THE ENTRIES IN SBI AND ABN AMRO BANK A/CS. HER VIEW IS SUPPORTED BY THE JUDGMENTS OF HONBLE DELHI HIGH COURT IN THE CASES OF DWARKADHISH INVESTMENTS; GANGESHWARI METALS; AND OASIS HOSPITAL ITIES (SUPRA). THEY HAVE LAID DOWN VARIOUS PARAMETERS IN THIS BEHALF. I N THE LIGHT THEREOF, LD CIT(A) HAS PROPERLY HELD THAT ASSESSES DISCHARGED I TS PRIMARY ONUS WHICH HAS NOT BEEN EFFECTIVELY REBUTTED BY LD AO. BESIDES , AO'S SWEEPING ADDITIONS OF A BUNCH OF TRANSACTIONS U/S 68 CANNOT BE UPHELD IN VIEW OF HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF KI NETIC CAPITAL FINANCE LTD. (SUPRA). IN THE ENTIRETY OF FACTS AND CIRCUMST ANCES WE UPHOLD THE ORDER OF CIT(A) DELETING THE ADDITION AGITATED BY REVENUE IN THE FIRST GROUND. 6. APROPOS THE SECOND REVENUE GROUND, ASSESSEE CONT ENDS THAT: (I) AO HAS ERRED IN GIVING AN OBSERVATION THAT PROP ER COMPLIANCE WAS NOT MADE, IT IS CONTRARY TO MATERIAL AVAILABLE ON RECORD. THE CASE ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 22 RECORD WAS VERIFIED BY THE LD CIT(A) AND IS WAS FOU ND THE ASSESSEE MADE PROPER COMPLIANCE AS REQUIRED. (II) THE NON DELIVERY OF LETTER/ NOTICE U/S 133(6) WAS D UE TO FACT THAT THE NAME OF THE COMPANY WAS CHANGED FROM TARAL VINC OM PVT. LTD. TO LINKPOINT INFRASTRUCTURE PVT. LTD. W.E.F. 06-05-200 9. THE CERTIFICATE RELATING TO CHANGE IN NAME ISSUED BY REGISTRAR OF C OMPANIES, WEST BENGAL WAS PRODUCED BEFORE THE LEARNED ASSESSING OF FICER. ALL THE RELATED DOCUMENTS AS DESCRIBED IN (A) TO (G) BELOW WERE FILED BEFORE AO ARE AVAILABLE ON (PAGE 212 TO 253 AND FILE NO 8 OF PAPER BOOK). (III) THE FOLLOWING SET OF DOCUMENTS WAS INITIALLY SENT B Y THE SAID PARTY I.E. TARAL VINCOM TO THE LEARNED AO: (A) CONFIRMATION OF BALANCE AS ON 31-03-2008 AND COMPLE TE DETAILS OF PAYMENT RECEIVED BY THEM WITH DETAILS OF EACH CH EQUE. (B) ASSESSMENT DETAILS PAN/ ASSESSING OFFICER OF THE SA ID PARTY. (C) ACKNOWLEDGEMENT RECEIPT OF INCOME TAX RETURN FOR ASSESSMENT YEAR 2008-2009 FILED WITH I.T.O. 3(1), K OLKATA VIDE RECEIPT NO. 0331000349 DATED 14-10-2008. (D) CERTIFICATE OF TAX DEDUCTED AT SOURCE. (E) PHOTOCOPIES OF ALL THE CHEQUES ISSUED TO THE SAID P ARTY (M/S TARAL VINCOM PVT. LTD) (F) COPY OF BANK ACCOUNT OF SAID PARTY (M/S TARAL VINCO M PVT. LTD.) WITH AXIS BANK TOWARDS DEPICTING CREDIT OF CH EQUES ISSUED BY US TO THEM. (G) AUDIT REPORT, DIRECTORS REPORT AND COMPLETE ACCOUN TS INCLUDING BALANCE SHEET AND PROFIT AND LOSS ACCOUNT WITH ALL ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 23 SCHEDULES. THE AMOUNT OF CONTRACTUAL RECEIPTS IN SC HEDULE 8 ARE RS. 77,74,34,648/-, WHICH INCLUDES OUR AMOUNT OF RS. 4, 31,66,881/- AND THE FIGURE OF SUNDRY DEBTORS IN SCHEDULE 3 IN RS. 3 1,50,60,434/- WHICH ALSO INCLUDES OUR FIGURE. (H) THE FIGURE OF TDS IN SCHEDULE 5 IS RS. 74,73,019/- WHICH INCLUDES TDS DEDUCTED BY US AND ACCOUNTED FOR IN TH EIR ACCOUNTS. (I) COPY OF LEDGER ACCOUNT OF M/S TARAL VINCOM PVT. LT D. (J) CERTIFICATE OF REGISTRAR OF COMPANIES, WEST BENGAL, CERTIFYING THE CHANGE OF NAME OF THE COMPANY FROM TARAL VINCOM PVT. LTD. TO LINKPOINT INFRASTRUCTURE PVT. LTD W.E.F. 6.5.2009. (IV) THE ARGUMENT OF THE LEARNED ASSESSING OFFICER IN PA RA 5.1. ON PAGE 9 OF THE ASSESSMENT ORDER THAT ONLY PHOTOCOPIE S OF THE DOCUMENTS (I.E. ITR AND BALANCE SHEET) OF THE SAID PARTY HAVE BEEN PRODUCED AND NOT THE ORIGINAL ONES DOES NOT HAVE ANY FORCE AS EA CH PHOTOCOPY IS DULY SIGNED BY THE ASSESSEE WHICH IS THE REQUIREMEN T OF INCOME TAX PROCEEDINGS. IN CASE OF DOUBT CROSS VERIFICATION CO ULD HAVE BEEN MADE BY AO FROM HIS COUNTERPART AT KOLKATA. (V) THE OBSERVATIONS OF LEARNED ASSESSING OFFICER IN PA RA 5.1 THAT IT IS NOTICED THAT THIS COMPANY IS NOT WORTH RS. 4,32 ,63,611/- ITSELF INDICATES THAT ALL THE DOCUMENTS WERE WITH HIM, WHI CH ENABLED HIM TO COMMENT ON THE WORTH. (VI) ASSESSING OFFICER VIDE A LETTER DATED 23-12-2010 RE QUIRED THE ASSESSEE TO PRODUCE THE SAID KOLKATA PARTY BEFORE H ER ON 24-12-2010, WHICH WAS NOT PHYSICALLY POSSIBLE WITHIN ONE DAY. L AW DOES NOT REQUIRE ANY ADVERSE INFERENCE FOR AN IMPOSSIBLE ACT . ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 24 (VII) AS EACH DETAIL OF THE SAID PARTY I.E. PAN, WARD, BA LANCE SHEET, TDS CERTIFICATE ISSUED WAS FILED BEFORE THE ASSESSI NG OFFICER THE PRIMARY ONUS CAST IN TERMS OF SEC 68 IF DULY DISCHA RGED BY THE ASSESSEE. (VIII) THERE IS ABSOLUTELY NO JUSTIFICATION FOR HOLDING AL L SUNDRY CREDITORS AS UNEXPLAINED CASH CREDITS SINCE COMPLET E DETAILS LIKE AGREEMENT WITH THE VENDORS, INVOICE, COPIES OF CHEQ UES ISSUED TO THE VENDOR, CONFIRMATIONS, COPIES OF ACCOUNTS, CHALLAN OF TDS ISSUED WERE ALL FILES AND ARE PLACED ON THE PAPER BOOK. T HE DISCHARGE OF PRIMARY ONUS IS FURTHER CORROBORATED BY THE FACTS T HAT: A) PAYMENTS HAVE BEEN MADE IN SUBSEQUENT YEAR, B) CONFIRMATIONS WITH COMPLETE DETAILS HAVE BEEN FILED C) NO ADVERSE FINDING ABOUT THE PAYMENT TO THE SAID CR EDITORS HAS BEEN MADE BY THE LD. ASSESSING OFFICER. (IX) IT IS CONTENDED THAT THE ASSESSING OFFICER IS NOT C ORRECT IN STATING THAT THE APPELLANT HAS FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION S NO WORTHWHILE REBUTTAL IS MADE BY THE ASSESSING OFFICER SO NO INF IRMITY OR DEFICIENCY ABOUT THE GENUINENESS OF ANY DOCUMENTS/ EVIDENCE. A O CAN NOT ADOPT A COURSE TO IGNORE THE DOCUMENTARY EVIDENCE FILED B Y THE ASSESSEE AND MAKE THE ADDITION U/S 68 BY SWEEPING OBSERVATIONS A ND GENERALIZED COMMENTS. RELIANCE IS PLACED ON HONBLE DELHI HIGH COURT JUDG MENTS IN THE FOLLOWING CASES FOR THE PROPOSITION OF DISCHARGE OF PRIMARY ONUS: DWARKADHISH 330 ITR 298; ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 25 GANGESHWARI METALS 214 TAXMAN 423 OASIS HOSPITALITIES 373 ITR 119 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. ASSESSEE HAS FILED SUFFICI ENT EVIDENCE WHICH ARE DETAILED ABOVE AND CLAIMS TO HAVE DISCHARGED ITS PR IMARY ONUS IN TERMS OF SEC 68. AO HAS REJECTED THE EXPLANATION ON THE GRO UND THAT ORIGINAL DOCUMENTS HAVE NOT BEEN FILED. IN OUR VIEW LD. CIT( A) HAS RIGHTLY HELD THAT IN INCOME TAX PROCEEDINGS ATTESTED PHOTOCOPIES DULY SIGNED ARE ADMISSIBLE AS EVIDENCE IN INCOME TAX PROCEEDINGS. IT IS MORE S O AS TECHNICAL RULES OF EVIDENCE ARE NOT APPLICABLE TO INCOME TAX PROCEEDIN GS AND THIRD PARTIES CAN NOT BE EXPECTED TO HAND OVER THEIR ORIGINAL DOCUMEN TS. IN OUR VIEW THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE THAT DUE TO N AME CHANGE OF TARAL VINCOM TO LINK POINT INFRASTRUCTURE PVT. LTD W.E.F. 6.5.2009, THE NOTICE U/S 133(6) REMAINED UNSERVED. BESIDES ONE DAY TIME GIVE N FOR PHYSICAL PRODUCTION OF PARTY WAS TOO SHORT. AO HAS TO ASCERT AIN THE FACTS AND DISCHARGE OF PRIMARY ONUS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING. HE CANNOT B RUSH ASIDE THE ENTIRE EVIDENCE ON THE PRETEXT THAT PARTY IS NOT PHYSICALL Y PRODUCED MORE SO WHEN IT IS APPARENT THAT IT WAS PHYSICALLY IMPOSSIBLE FOR A SSESSEE TO ENSURE PRODUCTION OF KOLKATA PARTY IN ONE DAYS SHORT TIME . APROPOS OTHER SUNDRY CREDITORS ALSO WE ARE OF THE VIEW THAT ASSESSEE DIS CHARGE ITS PRIMARY ONUS IN TERMS OF SEC. 68 WHICH IS ATTEMPTED TO BE REBUTTED BY AO ON ASSUMPTIONS AND SWEEPING OBSERVATIONS. THEY ARE ALL PARTS OF BO OKS OF ACCOUNTS WHICH ARE ACCEPTED BY AO WITHOUT RAISING IOTA OF DOUBT. T HE DUE CONFIRMATION, EXPLANATION OF ENTRIES AND SOURCE THEREOF EMANATING FROM BOOKS OF ACCOUNTS IS DULY EXPLAINED BY THE ASSESSEE. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES AND KEEPING IN VIEW THE GUIDELINES LAID DOWN BY HON BLE DELHI HIGH COURT ITA 2266/DEL/2012 ACIT VS. SHOKEEN PROPERTIES PVT. LTD. 26 IN VARIOUS JUDGMENTS INCLUDING DWARKADHISH INVESTME NTS; GANGESHWARI METALS; AND OASIS HOSPITALITIES (SUPRA) IT IS HELD THAT ASSESSEE HAS DISCHARGED ITS ONUS IN TERMS OF SEC 68. IN VIEW THEREOF WE FI ND NO INFIRMITY IN THE ORDER OF LD. CIT(A) IN DELETING THE ADDITIONS IN RESPECT OF REVENUES SECOND GROUND, THE ORDER OF CIT(A) IS UPHELD. 8. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28- 01-2014. SD/- SD/- ( S.V. MEHROTRA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28-01-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR