The ITO, Ward-1(1), Surat V. M/s. Apex Therm Packaging Pvt.Ltd., Surat

ITA 253/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76703 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: RAMESH MAL
• Keywords: Unexplained cash credit; Question of law; Onus to prove
• Section: 68

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , . .. . . .. . , , , , '# ' $ '# ' $ '# ' $ '# ' $ BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.253/AHD/2010 ( & ' (' & ' (' & ' (' & ' (' / / / / ASSESSMENT YEAR : 2006-07) THE INCOME TAX OFFICER WARD-1(1) SURAT & & & & / VS. M/S.APEX THERM PACKAGING PVT.LTD. 5006, TRADE HOUSE RING ROAD, SURAT ) '# ./*+ ./ PAN/GIR NO. : AAECA 0982 C ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / ' / APPELLANT BY : SHRI O.P.BATHEJA, SR.DR -.), 0 / ' / RESPONDENT BY : SHRI RAMESH MALPANI, AR &1 0 # / / / / DATE OF HEARING : 23/4/2014 23( 0 # / DATE OF PRONOUNCEMENT : 23/05/2014 '4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, SURAT (CIT(A) FOR SHORT) DATED 26.11.2009 PERTAINING TO ASSESSMENT YEAR (AY) 2006-07. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A)-I, SURAT HAS ERRED IN RESTRICTING TH E ADDITION MADE BY AO OF RS.43,70,000 ON ACCOUNT OF UNEXPLAINED CAS H CREDIT U/S.68 OF THE ACT TO RS.2,00,000. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A)-I, SURAT HAS ERRED IN RESTRICTING TH E DISALLOWANCE OF INTEREST MADE BY THE AO OF RS.1,82,648 CLAIMED TO H AVE BEEN PAID ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 2 - BY THE ASSESSEE ON THE AMOUNT OF UNEXPLAINED CASH C REDIT TO RS.11,770. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. 4) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT. 2. THIS APPEAL IS RESTORED BY THE HONBLE HIGH COUR T OF GUJARAT VIDE ORDER DATED 03/12/2013 PASSED IN TAX APPEAL NO.584 OF 2013. BEFORE THE HONBLE HIGH COURT, THE GRIEVANCE OF THE ASSESS EE WAS THAT NUMBER OF DECISIONS OF THE JURISDICTIONAL HIGH COURT AS WELL AS THE LEARNED TRIBUNAL WERE RELIED UPON AND CITED ON ON BEHALF OF THE ASSE SSEE, HOWEVER, WITHOUT CONSIDERING AND/OR DEALING WITH THE DECISIONS RELIE D UPON BY THE ASSESSEE, THIS TRIBUNAL OBSERVED IN ONE LINE IN PARA-9 THAT DUE TO THESE REASONS, THE CASE LAWS RELIED UPON BY THE ASSESSEE DO NOT COME T O ITS RESCUE. THE HONBLE HIGH COURT HAS DIRECTED TO PASS ORDER AFRES H IN ACCORDANCE WITH LAW AND ON MERITS CONSIDERING AND/OR DEALING WITH T HE DECISIONS WHICH MAY BE RELIED UPON BY EITHER OF THE PARTIES AND PAS S A SPEAKING ORDER. 3. DURING THE COURSE OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT A MISCELLANEOUS APPLICATION NO.36/AH D/2013 WAS ALSO FILED BY THE ASSESSEE AND THIS TRIBUNAL (ITAT A BENCH AHMEDABAD) WAS PLEASED TO RECALL ITS ORDER AND THE ORDER DATED 13/12/2013 WAS PASSED. IN THE ORDER DATED 13/12/2013, THE TRIBUNA L HAD PARTLY ALLOWED THE REVENUES APPEAL AND CROSS OBJECTION OF THE ASS ESSEE WAS ALLOWED FOR STATISTICAL PURPOSES. IT APPEARS THIS FACT WA S NOT BROUGHT TO THE NOTICE OF THE HONBLE HIGH COURT BY THE ASSESSEE WHICH AMO UNTS TO SUPPRESSION AND CONCEALMENT OF FACT. THIS ACT OF THE ASSESSEE IS HIGHLY DEPRECATED, ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 3 - REVENUE AUTHORITY IS AT LIBERTY TO TAKE APPROPRIATE STEP AGAINST THE ASSESSEE AS PER LAW. IN PURSUANCE TO THE DIRECTION OF THE HONBLE HIGH COURT, THIS APPEAL WAS FIXED FOR HEARING ON 23/04/ 2014. 4. GROUND NO.1 IS WITH REGARD TO RESTRICTING THE AD DITION MADE BY THE AO OF RS.43,70,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT TO RS.2,00,000/-. 4.1. THE LD.COUNSEL FOR THE ASSESSEE STRONGLY PLACE D RELIANCE ON THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT ALL RELEV ANT DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER(AO). HE SUB MITTED THAT OUT 17 LENDERS, 8 WERE PRODUCED BEFORE THE AO DURING REMAN D PROCEEDINGS WHO HAVE CONFIRMED THE PAYMENT OF MONEY. HE SUBMITTED THAT THE BALANCE- SHEET AND THE CAPITAL ACCOUNTS OF THE CONCERNED PAR TIES MAKE IT AMPLE CLEAR THAT THE PARTIES WERE HAVING SUFFICIENT CAPIT AL TO ADVANCE LOANS TO THE ASSESSEE. THE LOANS RECEIVED AND REPAID WITH INTEREST WERE THROUGH BANKING CHANNELS BY WAY OF ACCOUNT PAYEE CHEQUES. RELIANCE HAS BEEN PLACED ON THE JUDGEMENT OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. RANCHHOD JIVABHAI NAKHAVA IN T AX APPEAL NO.50 OF 2011 DATED 20/03/2012. HE SUBMITTED THAT THE HONB LE HIGH COURT HAS CATEGORICALLY HELD THAT ONCE THE AO GETS HOLD OF TH E PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE AO OF THOSE L ENDERS, WHETHER IN THEIR RESPECTIVE RETURN THEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AND HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HAD BE EN LENT TO THE ASSESSEE. IF BEFORE VERIFYING OF SUCH FACT FROM TH E AO OF THE LENDERS OF THE ASSESSEE, THE AO DECIDES TO EXAMINE THE LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINE SS OF THE TRANSACTION, ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 4 - IN OUR OPINION, THE AO DID NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTION 68 OF THE INCOME TAX ACT. HE SUBMITTED THA T THE HONBLE HIGH COURT FURTHER HELD THAT IF ON VERIFICATION, IT WAS FOUND THAT THOSE LENDERS DID NOT DISCLOSE IN THEIR INCOME TAX RETURN THE TRA NSACTION OR THAT THEY HAD NOT DISCLOSED THE AFORESAID AMOUNT, THE AO COULD CA LL FOR FURTHER EXPLANATION FROM THE ASSESSEE TO PROVE THE GENUINEN ESS OF THE TRANSACTION OR CREDITWORTHINESS OF THE SAME. HOWEVER, WITHOUT VERIFYING SUCH FACT FROM THE INCOME TAX RETURN OF THE CREDITORS, THE AC TION TAKEN BY THE AO IN EXAMINING THE LENDERS OF THE ASSESSEE WAS A WRONG A PPROACH. HE SUBMITTED THAT THE HONBLE HIGH COURT HAS CATEGORIC ALLY HELD THAT IF THE AO OF THOSE CREDITORS ARE SATISFIED WITH THE EXPLAN ATION GIVEN BY THE CREDITORS AS REGARDS THOSE TRANSACTIONS, THE AO IN QUESTION HAS NO JUSTIFICATION TO DISBELIEVE THE TRANSACTIONS REFLEC TED IN THE ACCOUNT OF THE CREDITORS. HE ALSO PLACED RELIANCE ON THE JUDGEME NT OF HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF ARAVAL I TRADING CO. VS. INCOME TAX OFFICER REPORTED AT (2000) 220 CTR (RAJ) 622. HE SUBMITTED THAT THE HONBLE RAJASTHAN HIGH COURT HAS HELD THAT NEITHER THE PROVISIONS OF SECTION 68 NOR ON GENERAL PRINCIPLE, IT CAN BE SAID THAT ONCE THE EXISTENCE OF PERSONS IN WHOSE NAME CREDITS ARE FOUND IN THE BOOKS OF THE ASSESSEE IS PROVED AND SUCH PERSONS OWN SUCH CR EDITS WITH THE ASSESSEE STILL THE ASSESSEE IS TO FURTHER PROVE THE SOURCE FROM WHICH THE CREDITORS COULD HAVE ACQUIRED MONEY TO BE DEPOSITED WITH HIM. THE LD.COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF DY.CIT VS. ROHIN I BUILDERS REPORTED AT (2002) 256 ITR 360 (GUJ.). THE LD.COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE VIEW OF THE LD.TRIBUNAL HAS BEEN AFFIRMED BY THE HONBLE HIGH ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 5 - COURT OF GUJARAT. HE SUBMITTED THAT THE HONBLE ITAT AHMEDABAD B BENCH IN ITA NO.3860/AHD/1992 IN THE CASE OF ROHINI BUILDERS VS. DY.CIT HAS HELD THAT THE ASSESSEE HAS FURNISHED THE COMPLETE ADDRESSES OF ALL THE CREDITORS ALONG WITH GIR NUMBERS/PAN AS WELL AS CONFIRMATIONS ALONG WITH COPIES OF ASSESSMENT ORDER S PASSED IN THE CASES OF SOME CREDITORS. IT IS HELD BY THE TRIBUNAL THAT IT IS CLEAR THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS WHICH LAY ON IT IN TERMS OF SECTION 68 BY PROVING THE IDENTITY OF THE CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, GIR NUMBERS/PERMANENT ACCOUNT N UMBERS AND THE COPIES OF ASSESSMENT ORDERS WHEREVER READILY AVAILA BLE. IT HAS ALSO PROVED THE CAPACITY OF THE CREDITORS BY SHOWING THA T THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES DRAWN FROM BANK ACCOUNT OF THE CREDITORS AND THE ASSESSEE IS NOT EX PECTED TO PROVE THE GENUINENESS OF THE CASH DEPOSITED IN THE BANK ACCOU NTS OF THOSE CREDITORS BECAUSE UNDER LAW THE ASSESSEE CAN BE ASKED TO PROV E THE SOURCE OF THE CREDITS IN ITS BOOKS OF ACCOUNT BUT NOT THE SOURCE OF THE SOURCE AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ORIENT TRADING CO. VS. CIT (1963) 49 ITR 723(BOM). THE LD.COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE CO-O RDINATE BENCH (ITAT B BENCH AHMEDABAD) RENDERED IN THE CASE OF ACIT V S. SHRI PARESHBHAI CHANDRAKANT JARIWALA IN ITA NO.2425/AHD/2008 FOR A. Y. 2005-06 DATED 25/03/2011. HE SUBMITTED THAT IN THE SAID CASE, T HE TRIBUNAL HAS HELD ONCE THE ASSESSEE PRODUCED THE BASIC RECORDS OF THE CREDITORS WHICH SHOW THE IDENTITY OF THE CREDITORS, CAPITAL ACCOUNTS OF THE CREDITORS AND THE BANK ACCOUNTS THROUGH WHICH MONEY WAS TRANSFERRED THROUG H CHEQUES TO THE ASSESSEE AND EVIDENCE THAT ALL OF THEM ARE INCOME-T AX ASSESSEES THEN IT ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 6 - CANNOT BE SAID THAT ASSESSEE HAS STILL TO DISCHARGE THE ONUS. THE LD.COUNSEL FOR THE ASSESSEE HAS ALSO RELIED ON THE JUDGEMENT OF HONBLE MADYA PRADESH RENDERED IN THE CASE OF CIT VS. BARJA TIYA CHILDREN TRUST REPORTED AT (1997) 225 ITR 640 (M.P.) AND ALSO THE JUDGEMENT OF HONBLE HIGH COURT OF GAUHATI RENDERED IN THE CASE OF P.K. SETHI VS. CIT REPORTED AT (2006) 286 ITR 318 (GAU). IN SUPPORT O F THE CONTENTION THAT THE CREDITORS ARE INCOME-TAX ASSESSEES AND THE TRAN SACTIONS WERE ACCEPTED AS GENUINE IN THE CASES OF CREDITORS. THUS, NO INF ERENCE COULD BE DRAWN THAT THESE ARE FAKE TRANSACTIONS. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE JUDGEMENT(S) OF HONBLE JURISDICTIONA L HIGH COURT RENDERED IN THE CASE OF CIT VS. APEX THEM PACKAGING (P.) LTD. REPORTED AT (2014) 42 TAXMANN.COM 473 (GUJARAT) AND OF CIT V S. AYACHI CHANDRASHEKHAR NARSANGJI REPORTED AT (2014) 42 TAXM ANN.COM 251 (GUJARAT). THE LD.COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE LD.CIT(A) HAS GIVEN A VERY DETAILED FINDING AND NO FAULT CAN BE FOUND IN THE ORDER OF THE LD.CIT(A). 5. ON THE OTHER HAND, LD.SR.DR POINTED OUT THAT THE AO HAS CATEGORICALLY GIVEN A FINDING THAT THE CREDITWORTHI NESS OF THE CREDITORS COULD NOT BE PROVED. HE SUBMITTED THAT THE ENTIRE TRANSACTIONS RAISE SUSPICION ABOUT THE CONDUCT OF THE ASSESSEE. HE SUBMITTED THAT THE CASH WAS DEPOSITED INTO THE BANK ACCOUNTS AND SUBSEQUENT LY, THE CHEQUES WERE ISSUED. HE HAS SUBMITTED A CHART GIVING DETAILS AB OUT THE DEPOSIT OF CASH AND ISSUANCE OF CHEQUES BY THE CREDITORS. HE POIN TED OUT THAT THE CASH WAS DEPOSITED A DAY OR TWO PRIOR TO ISSUANCE OF CHE QUES TO THE ASSESSEE. ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 7 - HE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT RENDERED IN THE CASE OF BLESSING CONSTRU CTION VS. ITO REPORTED A (2013) 32 TAXMANN.COM 366 (GUJARAT). HE SUBMITTE D THAT THE FACTS OF THE PRESENT CASE ARE SQUARELY COVERED BY THE JUDGEM ENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF BLESSING CONSTRUCTION VS. ITO (SUPRA). HE SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WITH RESPECT TO LEGAL CONTENTION THAT THE REVENUE CANNOT INSIST ON ASSESSEE SUPPLYING THE SOURCE OF SOURCE IS IMPECCABLE. HOWE VER, THE FACTS OF THE PRESENT CASE ARE VASTLY DIFFERENT. IT IS OF COURSE TRUE THAT SOME OF THE OBSERVATIONS MADE BY THE TRIBUNAL MAY SUGGEST THAT THE TRIBUNAL DID CONCERN ITSELF WITH THE SOURCE OF THE SOURCE. HOWE VER, SUCH OBSERVATIONS CANNOT BE PICKED IN ISOLATION AS TO TREAT THAT AS T HE CONCLUSION OF THE TRIBUNAL. WHEN ONE READS THE ORDER OF THE ASSESSIN G OFFICER, THAT OF THE COMMISSIONER (APPEALS) AND ALSO OF THE TRIBUNAL, IN ESCAPABLE CONCLUSION ONE ARRIVES AT IS THAT THE REVENUE AUTHO RITIES AS WELL AS THE TRIBUNAL FOUND THE ENTIRE TRANSACTION NOT GENUINE. THERE WAS SUFFICIENT EVIDENCE ON RECORD TO SUGGEST THAT IN CASE OF ALL T HE DEPOSITORS, THEIR BANK ACCOUNTS CONTAINED MEAGER BALANCE SHORTLY BEFORE SI ZABLE AMOUNT OF RS.1 LAKH AND UPWARD WERE GIVEN TO THE ASSESSEE THROUGH SUCH ACCOUNT. IN SUCH BANK ACCOUNTS, CASH AMOUNTS WERE CREDITED AND IMMEDIATELY ENTIRE AMOUNTS WERE WITHDRAWN THROUGH ISSUANCE OF SUCH CHE QUES IN FAVOUR OF THE ASSESSEE. IT WAS NOTICED THAT SUCH CREDITORS D ID NOT MAINTAIN ANY BOOKS OF ACCOUNT. NOWHERE THEIR CAPACITY TO RAISE SUCH AMOUNT FOR DRAWING CHEQUE OF SIZABLE AMOUNTS WAS ESTABLISHED. IN SHORT THEREFORE, THE VERY GENUINENESS OF THE TRANSACTION WAS NOT EST ABLISHED. THIS THEREFORE, IS NOT A CASE WHERE THE REVENUE MAKES AD DITION ON THE ASSESSEE ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 8 - FAILING TO ESTABLISH SOURCE OF THE SOURCE. THE LD. SR.DR ALSO RELIED ON THE JUDGEMENT OF HONBLE HIGH COURT OF GUJARAT RENDERED IN THE CASE OF UMESH KRISHNANI VS. ITO REPORTED AT (2013) 35 TAXMA NN.COM 598 (GUJARAT) DATED 15 TH APRIL-2013. HE SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT THREE BASIC INGREDIENTS; I.E. ( A) IDENTITY, (B) CREDITWORTHINESS AND (C) GENUINENESS OF THE TRANSAC TION, WHEN ARE CONSIDERED, IT CANNOT BE DISPUTED THAT ALL THE THRE E OF THEM REQUIRE INDEPENDENT CONSIDERATION AND YET THEY ARE NOT MUTU ALLY EXCLUSIVE OR CAN BE CONSIDERED IN ISOLATION. IT HARDLY NEEDS TO BE SPECIFIED THAT THE WELL RECOGNIZED PRINCIPLE OF NOT INSISTING UPON SOURCE O F THE SOURCE NEEDS NO ELABORATION. UPON APPRECIATION OF MATERIALS ON REC ORD AND TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE REVENUE AU THORITIES AND THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ENTIRE TRA NSACTION WAS A CIRCUITOUS ROUTE TO BRING ON BOOKS THE ASSESSEES O WN UNACCOUNTED MONEY. THE FACTOR THAT THE DONORS DID NOT POSSESS INDEPENDENT SOURCE TO MAKE SUCH DEPOSITS MUST BE VIEWED IN LIGHT OF THE F INDINGS THAT THE ASSESSEE HAD NO JUSTIFICATION FOR BORROWING SUCH AM OUNTS AT SUCH HIGH RATE OF INTEREST. THESE ASPECTS WOULD HAVE A BEARI NG ON THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE DONORS AND CANNOT BE SEEN AS AN ATTEMPT TO THROW THE BURDEN TO PROVE SOU RCE OF THE SOURCE OF THE ASSESSEE. HE SUBMITTED THAT THE HONBLE HIGH C OURT HAS TAKEN NOTE OF THE FACT THAT SUBSTANTIAL AMOUNT OF CASH WAS DEPOSI TED IN THE BANK ACCOUNTS OF ALL THE CREDITORS SHORTLY PRIOR TO ISSU ANCE OF CHEQUES AND INSUFFICIENCY OF THE FUND WITH THE CREDITORS WHEN C OULD BE DULY ESTABLISHED FROM THE OVERALL FACTS AND CIRCUMSTANCE S OF THE CASE AND WHEN IT IS FURTHER FOUND AS A MATTER OF FACT THAT THE AS SESSEE HAD NO JUSTIFICATION ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 9 - FOR BORROWING SUCH AMOUNTS AT HIGH RATE OF INTEREST , EVEN WITHOUT DISTURBING THE WELL ESTABLISHED PRINCIPLE OF NOT IN SISTING ON THE ASSESSEE PROVING SOURCE OF THE SOURCE, ON THE ROBUST FACTS OF THE REVENUE AUTHORITIES HAVE RIGHTLY NOT CONCLUDED IN FAVOUR OF THE ASSESSEE. THE LD.SR.DR ALSO RELIED ON THE JUDGEMENT OF THE HONBL E SUPREME COURT RENDERED IN THE CASE OF ITO VS. M.PIRAI CHOODI REPO RTED AT (2012) 20 TAXMANN.COM 733 (SC) DATED 19 TH NOVEMBER-2010. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE CASE-LAWS RELIED UPON BY THE RESPECTIVE PARTIES. THE AO MADE ADDITIONS ON THE G ROUND THAT THE CREDITWORTHINESS OF THE LENDERS COULD NOT BE ESTABL ISHED. THE CASE OF THE ASSESSEE IS THAT ALL THE CREDITORS ARE ASSESSED TO INCOME-TAX AND IN SUPPORT OF THIS CONTENTION, ASSESSEE FURNISHED COPY OF PANS , INCOME-TAX RETURNS, ETC. THE LD.COUNSEL FOR THE ASSESSEE PLACED RELIAN CE ON VARIOUS CASE-LAWS AS DISCUSSED IN PARA 4.1 OF THIS ORDER. THE FACTS OF THE PRESENT CASE ARE DISTINGUISHABLE, IN THE PRESENT CASE THERE IS NO DI SPUTE THAT TRANSACTION IS EFFECTED THROUGH BANKING CHANNEL, THE ASSESSEE HAS FURNISHED THE PANS, INCOME-TAX RETURNS AND IN SOME CASES PRODUCED THE C REDITORS WHO HAVE CONFIRMED THE PAYMENT TO THE ASSESSEE. BUT DISPUTE IS WITH REGARD TO CREDITWORTHINESS OF THE CREDITORS. IT IS BROUGHT O N RECORD THAT MONEY WAS DEPOSITED IN BANK ACCOUNT A DAY OR TWO PRIOR TO ISS UANCE OF CHEQUES. THIS FACT IS NOT DISPUTED BY THE LD.COUNSEL FOR THE ASSESSEE. THE EXPLANATION FOR CASH DEPOSIT IN BANK ACCOUNT A DAY OR TWO BEFORE IS THAT THERE WAS CASH IN HAND AND IN SOME CASES THE ASSESS EE HAS SHOWN RECEIVABLES IN THEIR ACCOUNTS. THE LD.CIT(A) HAS DI SCUSSED ELABORATELY ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 10 - THIS ISSUE IN HIS ORDER. IN PARA-5.12 OF HIS ORDER , THE LD.CIT(A) HAS GIVEN A FINDING THAT ALL THE DEPOSITORS HAVE EXPLAINED TH E SOURCE OF AVAILABILITY OF CASH WITH THEM. SOME PORTION OF THEIR CAPITAL W AS IN THE FORM OF OUTSTANDING RECEIVABLES WHICH WERE RECEIVED IN CASH BEFORE DEPOSITING THE SAME IN THEIR RESPECTIVE BANK ACCOUNTS. THE LD .CIT(A) HAS REPRODUCED A CHART IN PARA 5.12 OF HIS ORDER, WHICH IS REPRODUCED HEREINBELOW FOR THE SAKE OF CLARITY. SR.NO. NAME OF DEPOSITORS LOAN GIVEN TO THE APPELLANT (RS.) TOTAL CAPITAL OF DEPOSITORS AS ON 31.03.2006 (RS.) 1. SHRI BHAVANSINGH SEKHAWAT 2,00,000 3,80,470 2. SMT. CHUNKIDEVI SINGHODIA 2,00,000 4,86,883 3. SHRI GOPAL SAINI 2,60,000 3,15,457 4. SHRI GOVIND SESHMA 2,00,000 5,58,311 5. SMT.INDRA PAREKH 2,00,000 4,80,263 6. SMT.KAMAL KISHORE R.PAREEK 2,00,000 3,71,732 7. SHRI MUKESH KUMAR MALWAL 2,00,000 3,38,536 8. SHRI NARPAT SHARMA 2,00,000 4,46,956 9. SHRI OM PRAKASH SHARMA 2,00,000 3,83,523 10. SHRI R.L. AGRAWAL & SONS HUF 12,50,000 6,94,492 LOANS & ADVANCES OF RS.33,29,471 11. SHRI RAMESH BHADU 1,60,000 3,76,988 12. SHRI RAM CHANDER CHAUDHARY 1,60,000 3,72,449 13. SHRI SATYA NARAYAN CHAUDHARY 2,00,000 3,37,335 14. SHRI.SEO NARAYAN CHAUDHARY 1,60,000 3,65,071 ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 11 - 15. SMT. SUMAN OM PRAKASH SHARMA 2,60,000 4,07,853 16. SHRI.SURENDRA KUMAR CHAUDHARY 1,60,000 3,41,155 17. SHRI VIJAY KUMAR CHAUDHARY 1,60,000 3,68,020 6.1 THE REVENUE HAS PLACED RELIANCE ON THE JUDGEMEN T OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF B LESSING CONSTRUCTION VS. ITO REPORTED AT (2013) 32 TAXMANN.COM 366 (GUJA RAT). ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IN ASSESSEES OWN CASE FOR AY 2007-08, THE APPEAL FILED BY THE REVENU E WAS DISMISSED BY THE HONBLE GUJARAT HIGH COURT. WE FIND THAT THE H ONBLE HIGH COURT IN ASSESSEES OWN CASE IN TAX APPEAL NO.1070 OF 2013 F OR AY 2007-08 HAS HELD AS UNDER: WE ARE IN COMPLETE AGREEMENT WITH THE REASONING GI VEN BY THE CIT(A) AS WELL AS THE ITAT. WHEN FULL PARTICULARS, INCLUSIVE OF THE CONFIRMATION WITH NAME, ADDRESS AND PAN NUMBER, COP Y OF THE INCOME TAX RETURNS, BALANCE SHEET, PROFIT AND LOSS ACCOUNTS AND COMPUTATION OF THE TOTAL INCOME IN RESPECT OF ALL T HE CREDITORS/LENDER WERE FURNISHED AND WHEN IT HAS BEE N FOUND THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOA N ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET, THE ASSES SING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.33,55,01 1/-. UNDER THE CIRCUMSTANCES, NO QUESTION OF LAW, MUCH LESS SUBSTA NTIAL QUESTION OF LAW ARISES IN THE PRESENT TAX APPEAL. ACCORDING LY, THE PRESENT TAX APPEAL DESERVES TO BE DISMISSED AND IS ACCORDIN GLY DISMISSED. 6.2. HOWEVER, IN THE PRESENT YEAR, THE EXPLANATION OF THE LENDERS ARE THAT THERE WERE RECEIVABLES IN THE BOOKS OF ACCOUNT S WHICH WERE RECEIVED IN THE BANK ACCOUNTS. WE FIND THAT THE AO HAS GIVE N A FINDING THAT IN ALL THE CASES THE CASH HAS BEEN DEPOSITED ONE OR TWO DA YS BEFORE ISSUING THE ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 12 - CHEQUES AND HAS SUSPECTED ABOUT THE AUTHENTICITY OF THE EXPLANATION GIVEN BY THE ASSESSEE. HOWEVER, LD.CIT(A) HAS GIVEN FIN DING ON FACT THAT OUT OF 17 CREDITORS, EITHER APPEARED BEFORE THE AO IN R EMAND PROCEEDINGS AND CONFIRMED THE LOAN TO THE ASSESSEE. IT IS ALSO OBS ERVED BY THE LD.CIT(A) THAT ALL THE CREDITORS HAVE ENCLOSED THEIR BALANCE- SHEET ALONG WITH RETURN OF INCOME REFLECTING CAPITAL. THE LD.CIT(A) HAS AL SO GIVEN FINDING ON FACT THAT LOAN WAS RECEIVED BY CHEQUE AND HAS ALSO BEEN RETURNED THROUGH BANKING CHANNEL. THESE FINDING OF LD.CIT(A) HAS NO T BEEN CONTROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD. THEREFORE, IN THE LIGHT OF JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF THE ASSESSEE IN TAX APPEAL NO.1070 OF 2013, WE DO NOT F IND ANY INFIRMITY OF THE ORDERS OF LD.CIT(A), SAME IS HEREBY UPHELD. TH US, GROUND NO.1 OF THE REVENUES APPEAL IS DISMISSED. 7. GROUND NO.2 OF REVENUES APPEAL IS CONNECTED WI TH GROUND NO.1 AND, THEREFORE, THIS GROUND IS ALSO DISMISSED. 8. GROUND NOS.3 & 4 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 23/ 05 /2014 ..&, .&../ T.C. NAIR, SR. PS ITA NO.253/AHD/ 2010 THE ITO VS. M/S.APEX THERM PACKAGING P.LTD. ASST.YEAR 2006-07 - 13 - '4 0 -7 8'7( '4 0 -7 8'7( '4 0 -7 8'7( '4 0 -7 8'7(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-I, SURAT 5. 7: -& , , / DR, ITAT, AHMEDABAD 6. :;' <1 / GUARD FILE. '4& '4& '4& '4& / BY ORDER, .7 - //TRUE COPY// = == =/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .13 & 20.5.14(DICTATION-PAD 25- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15.5.14/20.5.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.23.5.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23.5.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER