ACIT, Agra V. Shri Dinesh kumar Jain Prop, Agra

ITA 262/AGR/2009

• Counselvise Citation: 26220314 RSA 2009
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-04-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 17-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C JAIN
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Deemed to accrue or arise in india; Onus to prove; Bogus loan

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 262/AGRA/2009 ASSTT. YEAR : 2001-02 A.C.I.T., CIRCLE-1, VS. SHRI DINESH KUMAR JAIN, AGRA. PROP. M/S. S.S. SALES CORPORATION, 36, MAHAVEER MARKET, CHHIPITOLA, AGRA. (PAN : ACSPJ 8090 P) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI K.C. JAIN, ADVOCATE. DATE OF HEARING : 02.04.2012 DATE OF PRONOUNCEMENT OF ORDER : 04.04.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DATED 28.03.2009 FOR THE ASSESSMENT YEAR 2001- 02 ON THE FOLLOWING GROUNDS : 1. THAT THE CIT(APPEALS)-I, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.47,50,000/- (I.E. CR EDIT ENTRIES OF RS.2,00,000/-, RS.4,00,000/-, RS.2,50,000/-, RS.13, 00,000/-, RS.18,00,000/- AND RS.4,00,000/- BEING LOAN TAKEN F ROM M/S. NAVEEN KR. AGARWAL & CO. PROP. NAVEEN KR. AGARWAL (INDL), M/S. NITIN & CO., M/S. VINOD KUMAR AGARWAL & CO., M/S. AMIT KUMA R AGARWAL & CO., M/S. BAIJ NATH AGRAWAL & CO. AND M/S. DEVI SAH AI BAIJ NATH RESPECTIVELY, ASSOCIATES OF M/S. GANGA RAM GROUP OF CASES) MADE U/S. 68 OF I.T. ACT, 1961 ON ACCOUNT OF UNEXPLAINED CRED IT ENTRIES WITHOUT APPRECIATING THE FACTS DISCUSSED IN THE ASSESSMENT ORDER. IN FACT, THESE CREDIT ENTRIES REPRESENTED THE ASSESSEES OWN CASH INTRODUCED IN THE BUSINESS THROUGH GANGA RAM GROUP OF CASES WHO HAVE ALREADY ITA NO. 262/AGRA/2009 2 ADMITTED THAT THEY ARE ENGAGED IN BUSINESS OF PROVI DING ENTRIES AND EARNING INCOME THEREFROM. 2. THAT THE CIT(APPEALS)-I, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.10,54,199/- OF I NTEREST CLAIMED TO HAVE BEEN PAID TO THE ABOVE NAMED CREDITORS ON UNEX PLAINED CREDIT ENTRIES. 3. THAT THE CIT(APPEALS)-I, AGRA HAS ERRED IN LAW AND ON FACTS IN OBSERVING THAT IT HAS NOT BEEN SHOWN THAT THE DE POSITORS HAVE EVER ADMITTED THAT THEY WERE ENGAGED IN THE BUSINESS OF GIVING BOGUS ENTRIES OR THAT THEY HAD GIVEN BOGUS ENTRIES TO THE ASSESSEE, IGNORING THE FACT THAT THE ASSESSMENTS OF THE DEPOSITORS HAV E BEEN COMPLETED HOLDING THAT THEY WERE ENGAGED IN ENTRY BUSINESS. T HEY HAVE ADMITTED THIS FACT AND NO APPEAL ORDER HAS BEEN FILED BY THE M AGAINST THE ASSESSMENT. 4. THAT THE ORDER OF THE CIT(APPEALS)-1, AGRA IS B AD IN LAW AND ON FACT BECAUSE IN ALLOWING THE ASSESSEES APPEAL H E HAS COMPLETELY IGNORED THE FACT THAT IT HAS VEHEMENTLY BEEN PROVED THAT THE AMOUNTS INTRODUCED AS CREDIT ENTRIES WERE ASSESSEES OWN UN ACCOUNTED MONEY ROUTED THROUGH THE LOAN ENTRIES. 2. THE FACTS OF THE CASE, AS NOTED IN THE ASSESSMEN T ORDER, ARE THAT THE AO HAS DISCUSSED IN DETAIL THE MODUS OPERANDI OF MONEY LAU NDERING ADOPTED BY GANGA RAM AGARWAL GROUP WHICH WAS DETECTED AS A RESULT OF SEARCH AND SEIZURE OPERATIONS CONDUCTED IN THE SAID GROUP. DURING THE SEARCH OPERATION, IT WAS FOUND THAT VARIOUS ENTITIES BELONGING TO THE SAID GROUP H AD PROVIDED CHEQUES DENOTING LOANS TO VARIOUS PERSONS IN LIEU OF CASH RECEIPTS F ROM THEM. IT WAS ALSO FOUND THAT WHEN THE SAID DEBTORS WERE NO LONGER IN NEED OF THE LOANS, THE ENTRIES WERE REVERSED BY SHOWING RETURN OF LOAN BY CHEQUE BY THE CONCERNED DEBTOR AND RETURN OF CASH BY SELF WITHDRAWAL. IN THE PRESENT CASE, TH E AO FOUND THAT THE ASSESSEE IS ITA NO. 262/AGRA/2009 3 ONE SUCH DEBTOR WHO HAS SHOWN RECEIPT OF RS.47,50,0 00/- AS LOANS FROM VARIOUS CONCERNS OF THE GANGA RAM GROUP, AS MENTIONED BY TH E LD. CIT(A) IN PARA 3 OF THE IMPUGNED ORDER AS UNDER :- M/S. NAVEEN KUMAR AGARWAL & COMPANY PROP. NAVEEN KUMAR AGARWAL (IND.) RS.200000/- 25 .09.2000 M/S. NITIN & COMPANY RS.400000/- 25.09.2000 M/S. VINOD KUMAR AGARWAL & CO. RS.250000/- 28.09 .2000 M/S. AMIT KUMAR AGARWAL & CO. RS.500000/- 05.04. 2000 RS.400000/- 10.07.2000 RS.300000/- 11.07.2000 RS.100000/- 14.07.2000 M/S. BAIJ NATH AGARWAL & CO. RS.400000/- 05.04. 2000 RS.500000/- 01.06.2000 RS.400000/- 11.07.2000 RS.500000/- 27.09.2000 M/S. DEVI SAHAI BAIJ NATH RS.100000/- 07.04.2000 RS.300000/- 11.07.2000 THE ASSESSEE, IN SUPPORT OF HIS CLAIM OF GENUINE LO ANS, FURNISHED BEFORE THE AO (I) COPY OF ASSESSEES ACCOUNT IN THE BOOKS OF THE VARI OUS CREDITORS OF THE GANGA RAM GROUP, (II) COPY OF THE RELEVANT BANK STATEMENTS OF THE CREDITORS REFLECTING THE DEBITS ON ACCOUNT OF THE IMPUGNED ADVANCES TO THE A SSESSEE AND (III) CONFIRMATION LETTERS OF THE CREDITORS CONTAINING COMPLETE DETAIL S OF THE SOURCES OF THE CREDITS IN THEIR BANK ACCOUNTS PRIOR TO THE IMPUGNED ADVANCES TO THE ASSESSEE. HOWEVER, THE AO DID NOT ACCEPT THE PLEAS OF THE ASSESSEE AND TRE ATED THE LOANS AS UNEXPLAINED CASH CREDITS IN TERMS OF SECTION 68 OF THE ACT AND ADDED THE SAME TO THE RETURNED INCOME OF THE ASSESSEE AS ASSESSEES DEEMED INCOME. THE AO ALSO DISALLOWED CORRESPONDING INTEREST OF RS.10,54,199/- DEBITED BY THE ASSESSEE IN RESPECT OF THE ITA NO. 262/AGRA/2009 4 SAID LOANS. THE AO ALSO ADDED RS.71,250/- @ 1.5% OF THE IMPUGNED LOANS AS UNEXPLAINED EXPENDITURE PRESUMABLY INCURRED BY THE ASSESSEE FOR OBTAINING THE IMPUGNED LOAN ENTRIES. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE DEPOSITS HAVE BEEN RECEIVED BY ACCOUNT PAY EES CHEQUES, THE DEPOSITORS ARE ALL ASSESSED TO INCOME-TAX. THE DEPOSITORS HAVE CON FIRMED GIVING OF THE LOANS TO ASSESSEE AND HAVE ALSO MENTIONED THE SOURCE OF MONE Y ADVANCED AS LOAN IN THEIR CONFIRMATION LETTERS. IT WAS ALSO SUBMITTED THAT TH ERE IS NO CONCRETE EVIDENCE ON RECORD WITH THE AO TO PROVE THAT IT WAS THE ASSESSE ES UNACCOUNTED MONEY WHICH WAS ROUTED THROUGH THE DEPOSITORS AND THEREFORE, TH E ADDITION MADE U/S. 68 OF THE IT ACT IS NOT JUSTIFIED. SINCE IDENTITY & CREDITWOR THINESS OF THE DEPOSITORS AND THE GENUINENESS OF THE TRANSACTIONS STAND PROVED, THERE FORE, THE DEPOSITS IN QUESTION CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE ASSESS EE IN ABSENCE OF ANY EVIDENCE THAT THE CASH OF THE ASSESSEE HAS TRAVELED AND REAC HED THE CREDITORS. THE ASSESSEE ALSO SUBMITTED THAT THE AO HAS NOWHERE SHOWN THAT T HE DEPOSITORS HAVE EVER ADMITTED THAT THEY WERE ENGAGED IN THE BUSINESS OF GIVING BOGUS ENTRIES. RELIANCE WAS ALSO PLACED ON THE ORDER OF ITAT AGRA BENCH IN THE CASES OF ACIT -1, AGRA VS. DINESH KUMAR JAIN, PROP. M/S. S.S. SALES CORPN. (ITA NO. 314 & 315/AGR/05 A.Y. 1997-98 & 1999-2000) AND ITO 1(2) AGRA VS. MUK ESH KUMAR JAIN PROP. M/S. SHRADHA TRADING CO., AGRA (ITA NO. 478/AGR/04 & 364/AGR/05 A.Y. 2001-02 ITA NO. 262/AGRA/2009 5 & 1999-2000), WHEREBY THE ITAT, AFTER DISCUSSING TH E DECISIONS OF HONBLE SUPREME COURT AND VARIOUS HIGH COURTS, HAS DISMISSE D THE DEPARTMENTAL APPEALS. THE ASSESSEE ALSO RELIED UPON THE ORDER DATED 30.09 .2008 OF ITAT, AGRA IN ITA NO. 314, 315/AGR/2005 IN THE CASE OF SHRI DINESH KU MAR JAIN FOR A.Y. 1997-98 & 1999-2000 AND ITA NOS. 478 & 364/AGRA/2005 IN THE C ASE OF MUKESH KUMAR JAIN FOR A.Y. 2001-02 AND 1999-2000 WHEREIN THE ORDERS O F THE CIT(A) DELETING THE ADDITIONS ON SIMILAR GROUNDS WERE UPHELD. 3.1 THE LD. CIT(A) CONSIDERING THE EXPLANATION OF T HE ASSESSEE AND THE MATERIAL ON RECORD DELETED THE ADDITION ON ACCOUNT OF UNEXPL AINED CASH CREDIT AND RESULTANTLY DELETED THE ADDITION ON ACCOUNT OF INTE REST PAID ON THE SAID LOANS. THE FINDINGS OF THE LD. CIT(A) IN PARA 5 & 5.1 OF THE I MPUGNED ORDER READ AS UNDER:- 5. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE AND THE ARGUMENTS OF THE LD. AR OF THE APPELLANT. I N THE ORDER DATED 15.02.2007 OF THE HONBLE ITAT, AGRA BENCH, AGRA IN ITO 1(1), AGRA VS. SRI ADITYA AGARWAL ITA NO. 262/AGR/2006, AY 199 8-99, IT HAS BEEN HELD AS UNDER : WE HAVE CAREFULLY CONSIDERED THE ENTIRE MATERIAL O N RECORD AND CONCUR WITH THE FINDING OF THE LEARNED FIRST AP PELLATE AUTHORITY. IN OUR OPINION, THE AO WAS NOT JUSTIFIED IN HOLDING THE TRANSACTION AS BOGUS MERELY ON THE BASIS OF GENERAL OBSERVATIONS. IT MAY BE TRUE THAT THE TRANSACTIONS OF LENDER PARTY MIGHT HAVE BEEN FOUND TO BE FALSE BUT FOR MAKING AD DITION IN THE HANDS OF THE ASSESSEE, THE NATURE OF PARTICULAR TRA NSACTION IN DISPUTE IS TO BE EXAMINED. IT HAS NOT BEEN ESTABLIS HED THAT THE TRANSACTION OF RS.1,00,000/- RELATING TO LOAN GIVEN BY DEVI SAHAI VINOD KUMAR WAS HELD TO BE BOGUS IN THEIR CASE. BEF ORE THE CIT(A), IT WAS ALSO CLARIFIED THAT THE SAID LOAN WA S GIVEN BY THE SAID PARTY TO THE ASSESSEE OUT OF RS.1,71,000/- HAV ING BEEN ITA NO. 262/AGRA/2009 6 RECEIVED FROM M/S. CR FOODS INDIA PVT. LTD. THROUGH CHEQUE NO.320629 DATED 19.01.1998. THUS, EVEN THE SOURCE O F THE SOURCE WAS EXPLAINED. IN ANY CASE, THE ASSESSEE HAD DISCHA RGED THE BURDEN TO PROVE THE IDENTITY OF THE CREDITOR, THE G ENUINENESS OF THE TRANSACTION WHICH WAS CARRIED OUT THROUGH BANKI NG CHANNEL AND THE CREDIT WORTHINESS OF THE CREDITOR. AFTER TH E ASSESSEE HAD DISCHARGED THE BURDEN, IT WAS FOR THE DEPARTMENT TO HAVE DISPROVED THESE FACTS. THE AO DID NOT EXAMINE THE A SSESSEE NOR BROUGHT ANY MATERIAL ON RECORD TO PROVE SPECIFICALL Y THAT THE LOAN TRANSACTION OF RS.1,00,000/- WAS FAKE OR BOGUS . THE AMOUNT OF LOAN WAS SUBSEQUENTLY REPAID AGAIN THROUGH BANKI NG CHANNEL. IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY, THE TRANSACTIONS CARRIED OUT IN REGULAR COURSE AND THROUGH BANKING C HANNEL HAVE TO BE ACCEPTED AS GENUINE. TO REPEAT, THE DEPARTMEN T HAS NOT BEEN ABLE TO SHOW BY CONCRETE PROOF THAT THE TRANSA CTION OF LOAN WAS NOT GENUINE. ON THE BASIS OF THE ABOVE, WE DO N OT FIND ANY SCOPE TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). THE GROUNDS RAISED BY THE REVENUE ARE, THEREFORE, REJEC TED. 5.1. AS IN THE ABOVE CITED CASE, IN THE PRESENT CAS E ALSO, THERE DO NOT APPEAR ANY CASH DEPOSITS IN THE CONCERNED BA NK ACCOUNTS OF THE LENDERS PRIOR TO THE ADVANCE OF THE IMPUGNED LO ANS TO THE APPELLANT. ON THE CONTRARY, IN PARA 6 ON PAGE 7 OF THE ASSESSMENT ORDER, THE AO HAS HERSELF OBSERVED AND DISCUSSED IN DETAIL THE FACT OF INSUFFICIENT BALANCES IN THE BANK ACCOUNT OF THE IM PUGNED CREDITORS AND THE DEPOSITS THEREIN, ENABLING THEM TO MAKE THE IMPUGNED ADVANCES TO THE APPELLANT. IN THAT CONTEXT, THE AO HAS OBSERVED THAT THE DEPOSITS IN THE ACCOUNTS OF THE LENDERS/CREDITO RS ARE BY TRANSFER OF FUNDS FROM THE ACCOUNTS OF OTHER ENTITIES OF THE GA NGA RAM GROUP IN THE SAME BANK. THE AO HAS NOT GIVEN ANY COGENT REAS ONS OR EVIDENCE OR MATERIAL FOR DOUBTING THE SOURCE OF THE FUNDS DE POSITED IN THE ACCOUNTS OF THE CREDITORS. IT IS AN ADMITTED POSITI ON THAT THE DEPOSITS HAVE BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES, THE DE POSITORS ARE ASSESSED T TAX AND HAVE CONFIRMED THE DEPOSITS HAVI NG BEEN GIVEN BY THEM. REFERENCE TO THE SEARCH IN M/S. GANGA RAM AGA RWAL & COMPANY GROUP OF CASES AND THE FINDINGS GIVEN BY TH E AO ARE OF NO HELP IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IT HAS NOT BEEN SHOWN THAT THE DEPOSITORS HAVE EVER ADMITTED THAT THEY WE RE ENGAGED IN THE BUSINESS OF GIVING BOGUS ENTRIES. THIS BEING THE CA SE UNLESS IT IS PROVED BY THE AO WITH SOME CONCRETE EVIDENCE THAT I T WAS THE ITA NO. 262/AGRA/2009 7 ASSESSEES UNACCOUNTED MONEY WHICH WAS ROUTED THROU GH THE DEPOSITORS, THE DEPOSITS IN REFERENCE CANNOT BE BRO UGHT TO TAX UNDER SECTION 68 OF THE I.T. ACT, 1961. UNDER THE FACTS A ND CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS.47,50,000/- MADE BY TH E AO UNDER SECTION 68 OF THE ACT AND THE DISALLOWANCE OF CORRESPONDING INTEREST IN RESPECT OF THESE CASH CREDITS CANNOT BE SUSTAINED. HENCE, THE ADDITIONS OF RS.47,50,000/- AND RS.10,54,199/- MADE BY THE A. O. ARE DIRECTED TO BE DELETED. 4. THE LD. DR RELIED UPON THE ORDER OF THE AO AND S UBMITTED THAT SEARCH WAS CONDUCTED IN GANGA RAM GROUP OF CASES IN WHICH IT W AS FOUND THAT THEY ARE CONNECTED WITH PROVIDING BOGUS ENTRIES OF LOANS AGA INST CONSIDERATION WHICH WAS ADMITTED IN THEIR CASES. IT IS, THEREFORE, A CASE O F SYSTEMATIC TRANSFER OF MONEY TRANSACTION FOR CONSIDERATION. THE SOURCES OF CREDI TS HAVE NOT BEEN EXPLAINED AND THE ASSESSEE USED A CONDUIT OF GANGA RAM AGARWAL FO R TRANSFER OF LOANS TO THE ASSESSEE. THEREFORE, LD. CIT(A) SHOULD NOT HAVE DEL ETED THE ADDITION. HE HAS SUBMITTED THAT SINCE THE RECIPIENT, I.E., GANGA RAM AGARWAL GROUP HAD ADMITTED THE AFORESAID MODUS OPERANDI OF TRANSFER OF MONEY, THER EFORE, THE ORDER OF THE LD. CIT(A) SHOULD BE REVERSED. THE LD. DR RELIED UPON T HE ORDER OF ITAT, JABALPUR BENCH IN THE CASE OF VISHWANATH PRASAD GUPTA, 129 I TD 95. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT ALL T HE DEPOSITORS HAVE EXPLAINED THEIR SOURCE OF GIVING LOAN TO THE ASSESSEE. NO CAS H HAVE BEEN DEPOSITED IN THEIR ACCOUNTS AND SUFFICIENT BALANCES ARE AVAILABLE WITH THEM TO GIVE LOAN TO THE ITA NO. 262/AGRA/2009 8 ASSESSEE. THE CONFIRMATIONS OF ALL THE PARTIES WERE FILED ALONGWITH THEIR BANK STATEMENTS. THE DEPOSITORS ARE SUBJECTED TO TAX AND HAVE ALSO CONFIRMED GIVING OF LOAN TO THE ASSESSEE. THE ASSESSEE MADE REQUEST BEF ORE THE AO VIDE LETTER DATED 17.11.2008 (PB-9) AND 01.12.08 (PB-7) TO SUMMON ALL THE CREDITORS AT THE EXPENSES OF THE ASSESSEE FOR PROVING THE GENUINENESS OF THE TRANSACTIONS IN THE MATTER. HOWEVER, THE AO HAS NOT SUMMONED ANY OF THE CREDITO RS DESPITE REQUESTS MADE BY THE ASSESSEE. HE HAS SUBMITTED THAT IN THE CASE OF SAME ASSESSEE FOR THE ASSESSMENT YEAR 1997-98 & 1999-2000, THE ITAT, AGRA BENCH VIDE ORDER DATED 30.09.2008 (SUPRA) DISMISSED THE DEPARTMENTAL APPEALS ON IDENT ICAL FACTS AND THE SAID ORDER HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE CASE OF ASSESS EE IN PRECEDING ASSESSMENT YEARS 2000-2001 IN ITA NO. 138/AGRA/2008 DATED 23.0 4.2009 AND DEPARTMENTAL APPEAL ON IDENTICAL GROUND HAS BEEN DISMISSED. COPI ES OF ORDERS ARE FILED AT PAGE 41 & 58 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW T HAT THE DEPOSITORS HAVE EVER ADMITTED THAT THEY WERE ENGAGED IN GIVING THE BOGUS ENTRIES TO ASSESSEE OR OTHERS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. IT IS NOT IN DISPUTE THAT ALL THE DEPOSITORS ARE ASSESSED TO TAX AND HAVE CONFIRMED GIVING OF LOANS TO THE ASSESSEE. COPIES OF THEIR BANK ACCOUNT S ARE FILED IN PAPER BOOK TO SHOW THAT THE CREDITORS WERE HAVING SUFFICIENT BANK BALA NCES TO GIVE LOANS TO THE ASSESSEE. INTEREST IS ALSO CHARGED ON THE LOANS AS PER COPY OF THE LEDGER ACCOUNTS. ITA NO. 262/AGRA/2009 9 THERE WERE TRANSFER ENTRIES NOTED IN THE BANK ACCOU NTS OF THE CREDITORS TO SHOW THAT NO HUGE CASH HAS BEEN DEPOSITED TO GIVE LOANS TO TH E ASSESSEE. THUS, THE IDENTITY OF THE CREDITORS HAS BEEN ESTABLISHED ALONG WITH THEIR CREDITWORTHINESS. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE CREDITORS HAVE EVER ADMITTED TO HAVE GIVEN ANY BOGUS LOANS TO THE ASSESSEE. THE ASSESSEE REQUESTED BEFORE THE AO TO SUMMON ALL THE CREDITORS VIDE TWO SEPARATE WR ITTEN REQUESTS, NOTED ABOVE, TO SATISFY HIMSELF ABOUT THE GENUINE CREDITS IN THE MA TTER. COPIES OF WRITTEN REQUESTS ARE FILED AT PAGES 7 & 9 OF THE PAPER BOOK. HOWEVER , THE AO DID NOT SUMMON ANY OF THE CREDITORS FOR EXAMINING THEM ON OATH TO FIND OUT THE TRUTH IN THE MATTER. HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. RAME SH CHAND SHUKLA, MAIT NO. 71 OF 2003 DECIDED ON 01.04.2005 (10 ITJ-286) HELD THAT IT IS NOW WELL SETTLED THAT WHERE ASSESSEE REQUESTS THE AO TO ISSUE SUMMON S TO ENFORCE ATTENDANCE OF THE CREDITORS TO ESTABLISH THE GENUINENESS AND CAPACITY OF THE CREDITORS, IT IS DUTY OF THE AO TO ENFORCE ATTENDANCE OF THE CREDITORS BY ISSUIN G SUMMONS. IF THE AO DOES NOT CHOOSE TO ISSUE SUMMONS AND EXAMINE THE CREDITORS, HE CANNOT SUBSEQUENTLY TREAT THE LOANS STANDING IN THE NAME OF SUCH CREDITORS AS NON-GENUINE NOR ADD THE AMOUNT THEREOF TO THE ASSESSEES INCOME . SINCE THE ASSESSEE PRODUCED SUFFICIENT EVIDENCE BEFORE THE AO TO PROVE THE GENUINENESS OF THE LOANS IN THE MATTER AND THE AO DID NOT ENFORCE ATTENDANCE OF THE CREDITORS FOR THEIR EXAMINATION ON THE REQUEST OF THE ASSESSEE, THEREFORE, THE AO CANNOT TREAT THE CREDITS AS NON-GENUINE IN THE MATTER. THE ITAT, AGRA BENCH IN THE CASE OF SAME AS SESSEE IN THE IDENTICAL FACTS IN ITA NO. 262/AGRA/2009 10 ASSESSMENT YEAR 1997-98 AND 1999-2000 DISMISSED THE DEPARTMENTAL APPEALS VIDE ORDERS REFERRED TO ABOVE. NO CHANGES IN THE FACTS A ND CIRCUMSTANCES OF THE CASE HAVE BEEN BROUGHT TO OUR NOTICE. CONSIDERING THE AB OVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE WITH REGARD TO GIVING OF LOANS TO THE ASSESSEE. THE INTEREST PAID ON THE LOANS HAVE, THER EFORE, BEEN RIGHTLY ALLOWED AS DEDUCTION BY THE LD. CIT(A). THERE IS NO MERIT IN T HE DEPARTMENTAL APPEAL ON ANY OF THE GROUNDS. SAME IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE APPEAL IS DISMISSED, THE ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY