K.P.Manish Global Ingredients Pvt Ltd., CHENNAI V. ACIT Company Circle II(4), CHENNAI

ITA 2451/CHNY/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3584 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-04-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 06-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Assessee Lawyers: T BANUSEKAR
• Keywords: Unexplained cash credit; Income from undisclosed sources; Principle of natural justice; Accommodation entries; Assessment record; Sham transactions; Set aside
• Section: 153A; 13; 68; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.2451/CHNY/2017 ( / ASSESSMENT YEAR: 2009-10) M/S. K.P.MANISH GLOBAL INGREDIENTS PVT.LTD. 41, RAGHUNAYAKULU STREET, PARK TOWN, CHENNAI-600 003. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(4), CHENNAI. PAN: AABCL 3843N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. T.BANUSEKAR, C.A /RESPONDENT BY : MS.R.ANITA, JCIT /DATE OF HEARING : 13.04.2021 /DATE OF PRONOUNCEMENT : 09 .06.2021 / O R D E R PER G.MANJUNATHA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED CIT(A)-9, CHENNAI DATED 15.06 .2017 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- 1. FOR THAT THE ORDER OF COMMISSIONER OF INCOME TA X (APPEALS) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANC ES OF THE CASE TO THE EXTENT PREJUDICIAL TO THE INTEREST OF T HE APPELLANT AND AT ANY RATE IS OPPOSED TO THE PRINCIPLES OF EQU ITY, NATURAL JUSTICE AND FAIR PLAY. 2 ITA NO.2451/CHNY/2017 2. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE ORDER OF THE ASSESSING OFFIC ER IS WITHOUT JURISDICTION. 3. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN UPHOLDING THE DISALLOWANCE OF UNSECURED LOANS OF RS.3,26,00,000/- FROM C.K.EXPORTS (PROP PREMA U MEH TA), MEHTA MOTORS & GENERAL FINANCE CO (PROP C UMEDMAL H UF) AND SWASTIK TRADING CORPORATION. 4. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE UNSECURED LOANS ARE GENUINE AND THE DISALLOWANCE OF THE SAME IS NOT WARRANTED IN THE FA CTS AND CIRCUMSTANCES OF THE CASE. 5. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 ARE NOT INVOCABLE IN THE FACTS AND CIRCUMSTANCES OF THE CAS E. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPA NY ENGAGED IN THE BUSINESS OF DEALING IN DRUGS, CHEMIC AL INGREDIENTS ETC. FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29.09.2009 DECLARING TOTAL INCOME O F RS. 36,45,533/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER NOTICED THAT ASSESSEE HAS RECEIVED UNSECURED LOAN TO THE TUNE OF RS.9,90,56,567/- FROM SEVERAL PERSONS. THEREFORE , HE CALLED UPON THE ASSESSEE TO FILE NECESSARY INFORMATION INC LUDING NAME AND ADDRESS OF PERSONS FROM WHOM UNSECURED LOANS WE RE TAKEN. THE ASSESSING OFFICER, THEREAFTER ISSUED LET TERS 3 ITA NO.2451/CHNY/2017 U/S.133(6) TO ALL PERSONS CALLING FOR INFORMATION T O CONFIRM TRANSACTIONS WITH THE ASSESSE, FOR WHICH PARTIES HA VE FILED VARIOUS DETAILS CALLED FOR BY THE ASSESSING OFFICER , INCLUDING CONFIRMATION LETTERS TO CONFIRM LOAN TRANSACTIONS W ITH THE ASSESSEE. THE ASSESSING OFFICER ON PERUSAL OF CONFI RMATION RECEIVED FROM PARTIES NOTICED THAT UNSECURED LOANS SHOWN TO HAVE BEEN RECEIVED FROM MR. UMED MEHTA AND HIS FLOA TED CONCERNS ARE DUBIOUS AS MR. UMED MEHTA HAS STATED D URING THE COURSE OF SURVEY THAT ENTIRE TRANSACTIONS RELATED T O M/S.KAWARLAL GROUP WAS ONLY ACCOMMODATION ENTRIES. THE ASSESSING OFFICER, AFTER ANALYZING ENTIRE TRANSACTIONS OF MR.UMED MEHT A, OBSERVED THAT TRANSACTIONS INVOLVED CIRCULATION OF FUNDS AMO NG GROUP CONCERNS. THEREFORE, HE OPINED THAT UNSECURED LOANS IN THE BOOKS OF ACCOUNT WAS NOTHING BUT A DEVICE ADOPTED TO INTRODUCE ITS OWN UNEXPLAINED MONEY INTO ACCOUNT. T HE ASSESSING OFFICER FURTHER OBSERVED THAT JUST BECAU SE IMPUGNED TRANSACTIONS HAVE BEEN ROUTED THROUGH BANKING CHAN NELS, THE SAME CANNOT BE CONSIDERED AS GENUINE. ACCORDINGLY, HE OPINED THAT ENTIRE TRANSACTIONS ROUTED THROUGH VARIOUS COM PANY ACCOUNTS ARE SHAM TRANSACTIONS AND HENCE, MADE ADD ITIONS 4 ITA NO.2451/CHNY/2017 TOWARDS UNSECURED LOAN RECEIVED FROM THREE COMPANI ES BELONGING TO MR.UMED MEHTA U/S.68 OF THE INCOME TAX ACT, 1961. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A). BEFORE THE LEARNED CIT(A), THE ASSESSEE HAS REITERATED ITS ARGUMENTS M ADE BEFORE THE ASSESSING OFFICER. THE SUM AND SUBSTANCE OF THE ARGUMENTS OF THE ASSESSEE BEFORE LEARNED CIT(A) ARE THAT UNSECURED LOANS RECEIVED FROM M/S. C.K. EXPORTS, M/ S. MEHTA MOTORS & GENERAL FINANCE COMPANY AND M/S. SWASTIC T RADING CORPORATION ARE GENUINE TRANSACTIONS, WHICH ARE ROU TED THROUGH PROPER BANKING CHANNELS. FURTHER, CREDITORS HAVE ES TABLISHED SOURCE OF INCOME TO EXPLAIN LOANS GIVEN TO THE ASS ESSEE. THE ASSESSING OFFICER HAS IGNORED ALL THE EVIDENCES FI LED BY THE ASSESSEE AND MADE ADDITIONS ON SUSPICIOUS GROUND WI THOUT BRINGING ON RECORD ANY EVIDENCE TO PROVE THAT UNSEC URED LOANS RECEIVED FROM ABOVE CONCERNS ARE UNACCOUNTED INCOME OF THE ASSESSEE. 5. THE LEARNED CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO RELIED ON VARI OUS JUDICIAL 5 ITA NO.2451/CHNY/2017 PRECEDENTS INCLUDING THE DECISION OF HON'BLE SUPRE ME COURT IN THE CASE OF M/S. KACHWALA GEMS VS. JCIT (2006) 206 CTR (SC) 585 HELD THAT PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SUFFICIENT TO ESTABLISH GENUINENESS OF TRANSACTION S. WHAT IS RELEVANT TO SEE IS TRANSACTIONS ARE PASSED THE TES T OF GENUINENESS IN REAL SENSE, THAT MEANS THE ASSESSEE SHOULD PROVE BEYOND DOUBT THE NATURE OF CREDITS AND SOURC E FOR SUCH CREDITS. IN THIS CASE, IT IS ADMITTED FACT THAT THE ASSESSEE HAS ROUTED ITS UNACCOUNTED INCOME IN THE FORM OF UNSEC URED LOANS THROUGH VARIOUS GROUP CONCERNS, WHICH IS NOTHING B UT SHAM TRANSACTION. THEREFORE, HE OPINED THAT THERE IS NO ERROR IN THE FINDINGS RECORDED BY THE ASSESSING OFFICER TO DISA LLOW UNSECURED LOAN RECEIVED FROM THREE ENTITIES AS UND ISCLOSED INCOME OF THE ASSESSEE. THE RELEVANT FINDINGS OF TH E LEARNED CIT(A) ARE AS UNDER:- 7. I HAVE CAREFULLY CONSIDERED THE OBSERVATION OF THE AO UNDER PARA 5 AND THE SUBMISSIONS OF THE APPELLANT U NDER PARA 6. THE APPELLANTS SUBMISSION THAT THE ABOVE MENTIO NED SUMS HAVE NOT BEEN ADDED IN THE SEARCH ASSESSMENT U/S 15 3A, THEREFORE THE ADDITION MADE PRIOR TO SEARCH MUST BE DELETED IS NOT ACCEPTABLE. THE ORIGINAL ASSESSMENT WAS MADE PR IOR TO THE SEARCH. IT IS ALTOGETHER A DIFFERENT ISSUE WHETHER THE SUMS ADDED IN ORIGINAL ASSESSMENT MUST BE ONCE AGAIN ADD ED IN 6 ITA NO.2451/CHNY/2017 153A ASSESSMENT OR NOT. NOT ADDING THE SAME AMOUNT IN THE SEARCH ASSESSMENT U/S 153A IS NO REASON TO DELETE T HE ADDITION ALREADY MADE. THE ENTIRE ADDITION HAS BEEN MADE ON THE BASIS OF THE STATEMENT RECORDED FROM SHRI. UMESH MEHTA TH AT THE UNSECURED LOANS TAKEN FROM THE SAID GROUP COMPANIES AS MENTIONED IN THE ASSESSMENT ORDER ARE NOTHING BUT ACCOMMODATION ENTRIES WHICH ARE BOGUS IN NATURE. TH E APPELLANT NEVER CONTENDED THAT THE STATEMENT GIVEN BY SHRI. UMESH MEHTA IS NOT TRUE. THE APPELLANTS SUBMISSION IN THE GROUND THAT THE TRANSACTIONS ARE MADE THROUGH CHEQU E, THEREFORE THE SAME MUST BE GENUINE IS NOT ACCEPTABL E. IT IS HELD IN THE CASE OF M/S. KACHWALA GEMS VS JCIT, ITA NO.134/JP/2002 DATED 10.12.203, WHICH HAS BEEN AFFI RMED BY THE SUPREME COURT IN THE CASE OF M/S. KACHWALA GEMS VS. JCIT (2006) 206 CTR (SC) 585, 288 ITR 10 (SC), THAT PAYM ENT BY ACCOUNT PAYEE CHEQUE IS NOT SUFFICIENT TO ESTABLISH THE GENUINENESS OF PURCHASES. ALSO IN THE CASE OF CIT V S PRECISION FINANCE PVT. LTD. (1994) 121 CTR (CAL.) 20, THE CAL CUTTA HIGH COURT HAS HELD THAT EVEN PAYMENT BY ACCOUNT PAYEE C HEQUE IS NOT SACROSANCT AND IT WOULD NOT MAKE AN OTHERWISE N ON-GENUINE TRANSACTION GENUINE. 8. THE APPELLANT ALSO CONTENDED IN THE GROUND THAT THE BOOK ENTRIES MUST BE ACCEPTED IS NOT AN ACCEPTABLE ARGUM ENT BECAUSE OF THE STATEMENT GIVEN BY SHRI. UMESH MEHTA AS PER WHICH THESE ARE MERE ACCOMMODATION ENTRIES AND NOT GENUINE TRANSACTIONS. IT IS ALSO CONTENDED IN THE GROUNDS T HAT NO OPPORTUNITY WAS GRANTED BY THE AO BEFORE MAKING THE ADDITIONS, BUT THE PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT SHRI. RAJENDRAKUMAR, AR OF THE APPELLANT APPEARED AND IT IS ONLY AFTER DISCUSSING THE ISSUES WITH HIM THAT THE ORDER WAS PASSED. 7 ITA NO.2451/CHNY/2017 EVEN DURING THE APPEAL PROCEEDINGS, THE APPELLANT H AD SUFFICIENT OPPORTUNITY TO EXPLAIN ITS CASE, THEREFO RE THE GROUND REGARDING OPPORTUNITY FOR REBUTTAL WAS NOT GRANTED IS NOT ACCEPTABLE. IN VIEW OF THE ABOVE, THE ADDITION OF RS.3,26,00,000/- IS HEREBY CONFIRMED. 6. THE LEARNED A.R FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITIONS MA DE TOWARDS UNSECURED LOAN RECEIVED FROM M/S. C.K.EXPORTS, M/S . MEHTA MOTORS & GENERAL FINANCE COMPANY AND M/S. SWASTIC T RADING CORPORATION, WITHOUT APPRECIATING THE FACT THAT UNS ECURED LOANS ARE GENUINE WHICH ARE SUPPORTED BY NECESSARY EVIDE NCES. THE AR FOR THE ASSESSEE REFERRING TO PAPER BOOK FILED B Y THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED LEDG ER ACCOUNT COPIES OF LOAN CREDITORS ALONG WITH BANK STATEMENTS AND ESTABLISHED THAT ALL TRANSACTIONS ARE ROUTED THROUG H PROPER BANKING CHANNEL . THE ASSESSEE HAS ALSO EXPLAINED SOURCE OF INCOME FOR UNSECURED LOANS, AS PER WHICH A SUM OF RS.1,75,00,000/- RECEIVED FROM M/S. MEHTA MOTORS & GENERAL FINANCE COMPANY REPRESENTED BY UMED MEHTA HUF WAS OUT OF COMMISSION RECEIVED FROM M/S. KAWARLAL & SONS, A GROUP COMPANY OF THE ASSESSEE BY CHEQUE DATED 03.11.2008. THE 8 ITA NO.2451/CHNY/2017 SAID SUM OF RS.1,75,00,000/- WAS RECEIVED FROM M/S . KAWARLAL & SONS HAS BEEN ROUTED THROUGH UMED INVESTMENTS & MARKETING CO. PVT. LTD. FURTHER, SAID SUM HAS BEEN FINALLY TRANSFERRED TO ASSESSEE COMPANY BY UMED INVESTMENTS & MARKETING CO. PVT.LTD VIDE CHEQUE NO.932791. SIMILA RLY, UNSECURED LOAN RECEIVED FROM M/S. C.K.EXPORTS WAS ONCE AGAIN RECEIVED FROM M/S. KAWARLAL & SONS ROUTED THR OUGH KESARIA MARKETING PVT. LTD. LIKEWISE, UNSECURED LO AN RECEIVED FROM M/S. SWASTIC TRADING CORPORATION WAS ALSO OUT OF COMMISSION INCOME RECEIVED FROM M/S. KAWARLAL & SO NS. ALL THESE EVIDENCES ARE PART OF ASSESSMENT RECORDS. IN FACT, THE ASSESSEE HAS FILED NECESSARY DETAILS INCLUDING INCO ME OFFERED BEFORE SETTLEMENT COMMISSION IN THE NAME OF GROUP COMPANIES AND HAS FURTHER CLARIFIED THAT GROUP COMP ANY HAS PAID COMMISSION TO M/S. KAWARLAL & SONS AND THEREFO RE, SOURCE HAS BEEN SATISFACTORILY EXPLAINED AND HENCE, THERE IS NO REASON FOR THE ASSESSING OFFICER TO DOUBT GENUINENESS OF THE TRANSACTIONS AND CREDIT WORTHINESS OF THE PARTIES. 7. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUPP ORTING THE ORDER OF THE LEARNED CIT(A) SUBMITTED THAT ENTI RE 9 ITA NO.2451/CHNY/2017 TRANSACTIONS OF UNSECURED LOANS AMONGST GROUP COMPA NIES ARE SHAM TRANSACTIONS, WHICH IS EVIDENCED FROM FACTS B ROUGHT OUT BY THE ASSESSING OFFICER THAT ASSESSEE HAS ROUTED ITS UNACCOUNTED INCOME IN FORM OF UNSECURED LOANS THRO UGH GROUP COMPANIES. THIS FACT HAS BEEN FURTHER STRENGTHENED BY SURVEY CONDUCTED IN THE GROUP COMPANIES CASES WHERE MR.UME D MEHTA HAS CATEGORICALLY ADMITTED THAT UNSECURED LOA NS ARE ACCOMMODATION ENTRIES. THEREFORE, THERE IS NO ERROR IN THE FINDINGS RECORDED BY THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) TO MAKE ADDITIONS TOWARDS UNSECURED LOANS R ECEIVED FROM THREE COMPANIES U/S.68 OF THE INCOME TAX ACT, 1961. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIAL S AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER HAS MADE ADDITIONS T OWARDS UNSECURED LOAN RECEIVED FROM THREE FIRMS BELONGS T O ASSESSEE GROUP ON THE GROUND THAT SAID LOAN TRANSACTIONS ARE NOTHING BUT ACCOMMODATION ENTRIES OF ASSESSEE OWN UNACCOUNTED INCOME IN FORM OF UNSECURED LOANS. THEREFORE, IN ORDER TO ASCERTAIN WHETHER TRANSACTIONS OF UNSECURED LOANS RECEIVED FR OM THREE COMPANIES ARE GENUINE TRANSACTIONS WHICH PASS TEST OF 10 ITA NO.2451/CHNY/2017 INGREDIENTS PROVIDED U/S.68 OF THE ACT OR NOT, ONE HAS TO UNDERSTAND PROVISIONS OF SECTION 68 OF THE ACT. THE PROVISIONS OF SECTION 68 OF THE ACT DEALS WITH CASES WHERE AN Y SUM FOUND CREDITED IN BOOKS OF ACCOUNT OF THE ASSESSEE FOR A NY PREVIOUS YEAR FOR WHICH THE ASSESSEE FAILS TO ESTABLISH IDEN TITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF PARTIES, THEN SAID SUM FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE SHALL BE TREATED AS INCOME OF THAT YEAR. THEREFORE, TO COME OUT OF SHADOW OF PROVISIONS OF SECTION 68 OF THE ACT, O NE HAS TO PROVE IDENTITY OF THE CREDITOR, GENUINENESS OF TRAN SACTION AND CREDITWORTHINESS OF PARTIES. ONCE INITIAL BURDEN OF PROVING ALL THREE INGREDIENTS ARE DISCHARGED, THEN BURDEN SHIFT S TO THE REVENUE TO PROVE OTHERWISE THAT THE SAID UNSECURED LOANS ARE UNACCOUNTED INCOME OF THE ASSESSEE. 9. IN THIS LEGAL BACKGROUND, IF YOU EXAMINE FACTS OF THIS CASE, WE FIND THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.1,75,00,000/- FROM M/S. MEHTA MOTORS & GENERAL F INANCE COMPANY, A PROPRIETARY CONCERN OF MR. UMED MEHTA (H UF). THE ASSESSEE HAS FILED VARIOUS DETAILS INCLUDING BA NK STATEMENT AND FINANCIAL STATEMENT OF CREDITOR. FROM THE DETAI LS FILED BY THE 11 ITA NO.2451/CHNY/2017 ASSESSEE, WE FIND THAT A SUM OF RS.1,75,00,000/- W AS RECEIVED FROM UMED INVESTMENTS & MARKETING CO. PVT.LTD. ON 03.11.2008 BY CHEQUE NO.932791. THE SAID SUM WAS RE CEIVED FROM M/S. KAWARLAL & SONS BY UMED INVESTMENTS & MAR KETING CO. PVT. LTD. FURTHER, THE SAID SUM HAS BEEN FINALL Y PAID TO THE ASSESSEE BY UMED INVESTMENTS & MARKETING CO. PVT.LT D. ALL THESE TRANSACTIONS ARE ROUTED THROUGH PROPER BANKI NG CHANNEL. THE ASSESSEE HAS ALSO PROVED SOURCE OF INCOME FOR S AID SUM OF RS.1,75,00,000/-, WHICH IS OUT OF COMMISSION REC EIVED FROM M/S. KAWARLAL & SONS BY UMED INVESTMENTS & MARKETIN G CO. PVT.LTD. THEREFORE, FROM THE ABOVE DETAILS, IT IS V ERY CLEAR THAT THE ASSESSEE HAS PROVED IDENTITY, GENUINENESS OF TR ANSACTION AND CREDITWORTHINESS OF LOAN CREDITORS. COMING TO UNSECURED LOAN RECEIVED FROM M/S. C.K. EXPORTS OF RS. 50,00, 000/-, THE ASSESSEE HAS EXPLAINED THAT A SUM OF RS.50.00 LAKHS WAS RECEIVED FROM M/S. VIM MINES & MINERALS VIDE CHEQ UE NO.336605. FURTHER, SAID SUM WAS ULTIMATELY RECEIVE D FROM KESARIA MARKETING PVT.LTD. OUT OF COMMISSION INCOM E RECEIVED FROM KAWARLAL & SONS. ALL THESE EVIDENCES ARE PART OF PAPER BOOK FILED BY THE ASSESSE. THEREFORE, IT IS INCORRE CT ON THE PART 12 ITA NO.2451/CHNY/2017 OF THE ASSESSING OFFICER TO ALLEGE THAT UNSECURED LOANS RECEIVED FROM M/S. C.K. EXPORTS WAS NOT EXPLAINED WITH NECESSARY EVIDENCES. SIMILARLY, UNSECURED LOAN REC EIVED FROM M/S. SWASTIC TRADING CORPORATION AMOUNTING TO RS.85 ,00,000/- WAS RECEIVED OUT OF COMMISSION INCOME FROM KAWARLAL & SONS AND ROUTED THROUGH M/S. SWASTIC TRADING CORPORATION , A PROPRIETARY CONCERN OF MONICA MEHTA, DAUGHTER OF MR . UMED MEHTA. THE ASSESSEE HAS FILED NECESSARY EVIDENCES I NCLUDING FINANCIAL STATEMENT AND BANK STATEMENT OF M/S. SWAS TIC TRADING CORPORATION. FROM THE DETAILS FILED BY THE ASSESSEE , WE FIND THAT TRANSACTION WAS ROUTED THROUGH KAWARLAL & SONS O UT OF COMMISSION INCOME. FURTHER, THE ASSESSEE HAS ALSO F ILED NECESSARY EVIDENCES TO PROVE THAT KAWARLAL & SONS HAS RECEIVED COMMISSION INCOME FROM VARIOUS GROUP COMPA NIES, WHICH IS PART OF FINDINGS RECORDED BY THE INCOME TA X SETTLEMENT COMMISSION IN THEIR ORDER DATED 31.05.2016 U/S.245 D(4) OF THE ACT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS DISCHARGED ITS BURDEN CASTE UPON U/S. 68 OF THE INCOME TAX ACT, 1961 BY FILING VARIOUS DETAILS INCLUDING FINAN CIAL STATEMENT OF CREDITORS, THEIR BANK STATEMENTS AND CONFIRMATIO N LETTERS TO 13 ITA NO.2451/CHNY/2017 PROVE TRANSACTIONS. ONCE AN ASSESSEE DISCHARGED ITS BURDEN, THEN BURDEN SHIFTS TO ASSESSING OFFICER TO PROVE O THERWISE THAT SAID TRANSACTION WAS NOTHING BUT UNDISCLOSED INCOME OF THE ASSESSEE. IN THIS CASE, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT SAID SUM WAS U NDISCLOSED INCOME OF THE ASSESSEE. THEREFORE, WE ARE OF THE CO NSIDERED VIEW THAT THE ASSESSING OFFICER WAS COMPLETELY ERR ED IN MAKING ADDITIONS TOWARDS UNSECURED LOANS RECEIVED FROM T HREE COMPANIES OF ASSESSEE GROUP. WE FURTHER NOTED THAT THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. LOVEL Y EXPORTS (2008) 216 CTR 198 HAS CLEARLY HELD THAT ONCE INIT IAL BURDEN OF IDENTITY WAS PROVED, THEN THE ASSESSING OFFICER IS AT LIBERTY TO PROCEED ON THE CREDITORS IN ACCORDANCE WITH LAW, BU T SAID SUM CANNOT BE TREATED AS UNEXPLAINED CREDIT OF THE ASSE SSEE. A SIMILAR VIEW HAS BEEN EXPRESSED BY THE HON'BLE SUPR EME COURT IN THE CASE OF M/S. STELLER INVESTMENTS LTD. 115 TA XMANN.COM 99(SC). 10. INSOFAR AS CASE LAW RELIED ON BY THE LEARNED CI T(A) IN THE CASE OF M/S. KACHWALA GEMS VS, JCIT (SUPRA), WE FIN D THAT NO DOUBT MERE PAYMENT BY CHEQUE IS NOT SUFFICIENT ENOU GH TO 14 ITA NO.2451/CHNY/2017 PROVE GENUINENESS OF TRANSACTIONS, BUT WHAT IS RELE VANT IS WHETHER TRANSACTIONS ARE PASSED THE TEST OF THREE I NGREDIENTS PROVIDED U/S.68 OF THE ACT. IN THIS CASE, IT IS N OT ONLY TRANSACTIONS ARE ROUTED THROUGH PROPER BANKING CHAN NELS, BUT ALSO OTHER INGREDIENTS INCLUDING IDENTITY AND CREDI TWORTHINESS OF PARTIES HAS BEEN SATISFACTORILY EXPLAINED. THEREFOR E, WE ARE OF THE CONSIDERED VIEW THAT THE CASE LAW RELIED UPON B Y THE LEARNED CIT(A) IS NOT APPLICABLE TO FACTS OF PRESE NT CASE. 11. IN THIS VIEW OF THE MATTER AND CONSIDERING FACT S AND CIRCUMSTANCES OF THE CASE AND ALSO BY FOLLOWING JUD ICIAL PRECEDENTS DISCUSSED HEREINABOVE, WE ARE OF THE CO NSIDERED VIEW THAT ASSESSEE HAS DISCHARGED BURDEN CASTE UPON U/S. 68 OF THE ACT TO PROVE UNSECURED LOANS RECEIVED FROM M/S.C.K.EXPORTS, M/S. MEHTA MOTORS & GENERAL FINANC E COMPANY AND M/S. SWASTIC TRADING CORPORATION. THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) WITHO UT APPRECIATING THE EVIDENCES FILED BY ASSESSEE HAS SIMPLY MADE ADDITIONS ON SUSPICIOUS GROUND THAT SAID SUM WAS U NDISCLOSED INCOME OF THE ASSESSEE. HENCE, WE SET ASIDE THE OR DER OF LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE 15 ITA NO.2451/CHNY/2017 ADDITIONS MADE TOWARDS UNSECURED LOANS RECEIVED FRO M THREE ENTITIES. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JUNE, 2021 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) (G.MANJUNATHA ) ' % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER ' /CHENNAI, ( / DATED 9 TH JUNE, 2021 DS *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .