The DCIT, Circle-9, Surat V. Shri Balubhai S.Sojitra, Surat

ITA 2642/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9511 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2642/AHD/2011 (ASSESSMENT YEAR: 2008-09) THE DEPUTY COMMISIONER OF INCOME-TAX, CIRCLE-9, SURAT. V/S SHRI BALUBHAI S. SOJITRA A- 43, SAIFEE SOCIETY, L.H. ROAD, SURAT (APPELLANT) (RESPONDENT) PAN: ABEPP7403P APPELLANT BY : SHRI DHARMVIR D. YADAV, SR . D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 09 -01-201 7 DATE OF PRONOUNCEMENT : 12 -01-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE REVENUE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-V, SURAT DATED 17.06.2011 PERTAIN ING TO A.Y. 2008-09. 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS U NDER:- ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN ACCEPTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE WHI CH HAVE BEEN REJECTED BY THE A.O. U/S. 145(3) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF UNEXPLAINED CASH CREDIT MA DE BY THE A.O, OF RS.41,96,716/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COU LD NOT PROVED THE CREDIT WORTHINESS AND GENUINENESS IN RESPECT OF UNSECURED LOANS OBTAI NED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF SUPPRESSED LABOUR RECEIPTS OF RS.15,78,740/- WITHOUT APPRECIATING THE FACT THAT THE A.O. AHS WORKED OUT THE USE OF ELECTRICITY IN POLISHING ROUGH DIAMOND. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SHARE TR ADING AND RUNNING A PROPRIETARY BUSINESS IN THE NAME OF M/S. JITESH DIA MONDS DOING POLISHING OF DIAMONDS ON JOB WORK BASIS. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS. AS P ER THE AUDIT REPORT, THE A.O. NOTICED THAT THE ASSESSEE HAS PAID LABOUR CHAR GES TO THE TUNE OF RS. 24,28,165/-. THE A.O. ALSO FOUND THAT TOTAL ELECTRI CITY EXPENSES WERE CLAIMED AT RS. 1,29,265/- FOR THE ENTIRE YEAR. 5. ON VERIFICATION OF THE PRODUCED LABOUR REGISTER, TH E A.O. NOTICED THAT IT WAS DEVOID OF QUALITY AND QUANTITY DATA OF THE ROUGH DI AMONDS RECEIVED FOR POLISHING. THE ASSESSEE WAS GIVEN A SHOW CAUSE TO E XPLAIN IN THE ABSENCE OF QUALITY AND QUANTITY-WISE RECORDS OF DIAMOND POLISH ING WHY THE BOOKS OF ACCOUNTS SHOULD NOT BE REJECTED. ON RECEIVING NO P LAUSIBLE REPLY, THE A.O. PROCEEDED BY REJECTING THE BOOKS OF ACCOUNTS MERELY BECAUSE THE ASSESSEE ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 3 COULD NOT PRODUCE DETAILS OF QUALITY/QUANTITY-WISE POLISHING OF ROUGH DIAMONDS RECEIVED FOR LABOUR JOB WORK. 6. PROCEEDING FURTHER, THE A.O. FOUND THAT NO LABOUR I NCOME HAS BEEN SHOWN IN THE MONTH OF MAY, SEPTEMBER, NOVEMBER AND FEBRUA RY THOUGH ELECTRICITY EXPENSES HAVE BEEN SHOWN TO BE INCURRED . THE A.O. FOUND THAT THE ASSESSEE HAS DISCLOSED THE TOTAL POLISHING OF R OUGH DIAMONDS WEIGHING 8979.65 CRTS AND POWER CONSUMPTION HAS BEEN SHOWN A T RS. 1,29,265/- GIVING A PER CRT. POWER CONSUMPTION AT RS. 14. 7. WHEN THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM, T HE ASSESSEE VIDE SUBMISSION DATED 16.12.2010 EXPLAINED THAT THE BILL S ARE RAISED ONLY AFTER THE PRINCIPAL ACCEPT THE POLISHED DIAMONDS WHICH IN VOLVES CHECKING /RE- MAKING THE POLISHED DIAMONDS. IT WAS EXPLAINED THAT THE BILL PREPARED IN THE MONTH OF OCTOBER, 2007 REPRESENTS THE WORK DONE IN THE MONTHS OF AUGUST, SEPTEMBER AND OCTOBER. IT WAS STRONGLY CONT ENDED THAT NO ADVERSE INFERENCE SHOULD BE DRAWN. THE SUBMISSIONS OF THE A SSESSEE DID NOT IMPRESS THE A.O. WHO WAS OF THE FIRM BELIEF THAT SI NCE THE BOOKS OF ACCOUNTS HAVE ALREADY BEEN REJECTED, THE ASSESSEE M UST HAVE SUPPRESSED LABOUR RECEIPTS. EXTRAPOLATING THE QUANTITY OF DIAM ONDS POLISHED DURING THE YEAR, THE A.O. ESTIMATED A FIGURE OF SUPPRESSED ROU GH POLISHING AT 3946.85 CRTS. AND MADE THE ADDITION OF RS. 15,78,740/- AS S UPPRESSED LABOUR JOB WORK. PROCEEDING FURTHER, THE A.O. NOTICED THAT THE ASSESSEE HAS SHOWN TOTAL UNSECURED LOANS AT RS. 41,96,716/-. THE ASSES SEE WAS ASKED TO EXPLAIN THE UNSECURED LOANS IN THE LIGHT OF THE PROVISIONS OF SECTION 68 OF THE ACT. ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 4 THE ASSESSEE FILED CONFIRMATIONS OF ALL THE PERSONS WHO HAD GIVEN LOANS TO HIM ALONG WITH THEIR COPIES OF RETURN OF INCOME, CA PITAL ACCOUNT AND BANK STATEMENTS. THE DETAILS CAN BE SUMMARIZED AS UNDER: - SR. NO. NAME & ADDRESS LOANS RETURNED INCOME C APITAL AS PER BALANCE SHEET 1 JIVRAJBHAI VALLABHBHAI DHADUK B-23, AKSHARDHAM SOC., KAPODARA, VARACHHA ROAD, SURAT 3.50.000 1,08,748 3,593,47 2 SMT. SEJALBEN SHAILESHBHAI SANGHVI 303 PARAS APT., KATARGAM, SURAT 5,08,383 1,30,370 2,23,637 3 SUSHILABEN N MEHTA 5,08,383 1,40,534 7,50,049 4 NITABEN D SANGHVI 203 PARAS APT., KATARGAM SURAT 5,08,383 1,31,390 2,25,460 5 JIGNABEN VIPULKURNAR DOSHI BAJRANG APT., KATARGAM, SURAT 4,06,706 1,34,634 6,38,259 6 SMT. KOKILABEN PRAKASHBHAI VOHRA 306 KESHAV KIRAN APT., KATARQAM, SURAT 4,06,706 1,34,730 6,38,259 7 RASIKBHAI P MARADIA 2,01,874 1,11,661 2,52,876 8 SHRI AKSHAY NAVINCHANDRA PATEL 6/711 MOTI SHETI GALEMANDI, SURAT 4,03,353 1,11,716 2,13,983 9 SHRI JAYANTILAL T. MEHTA (HUF) 404 OMKAR DARSHAN APT., DAIRY FALIYA, KATARGAM, SURAT 4,03,353 1,11,560 4,51,404 10 MILAN P. MEHTA 5,03,945 1,12,112 3,66,307 8. ON PERUSING THE AFOREMENTIONED DETAILS, THE A.O. WA S OF THE OPINION THAT ALL THE PERSONS WERE HAVING MEAGER RETURNED INCOME AND, THEREFORE, WERE NOT IN A POSITION TO GIVEN THE IMPUGNED LOANS TO TH E ASSESSEE. THE A.O. ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 5 FURTHER FOUND THAT IN RESPECT OF TWO PERSONS, THE C ASH HAS BEEN DEPOSITED PRIOR TO THE ISSUE OF CHEQUES BY THE RESPECTIVE PER SONS. THE A.O. ACCORDINGLY ISSUED NOTICE U/S. 131 TO ALL THE PERSO NS TO VERIFY THEIR CREDITWORTHINESS. HOWEVER, NO BODY ATTENDED TO THE NOTICE. THE A.O. CONCLUDED BY HOLDING THAT THE ASSESSEE HAD FAILED T O DISCHARGE THE ONUS CAST UPON HIM BY THE PROVISIONS OF SECTION 68 OF TH E ACT AND ACCORDINGLY MADE THE ADDITION OF RS. 41,96,716/- AS UNEXPLAINED CASH CREDIT. 9. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND GOT RELIEF ON ALL COUNTS. 10. THE RELEVANT FINDINGS OF THE FIRST APPELLATE AUTHOR ITY ON EACH COUNT READS AS UNDER:- 4.3. I HAVE .CONSIDERED THE ASSESSMENT ORDER AS WEL L AS THE SUBMISSION OF APPELLANT. IN MY OPINION THE ASSESSING OFFICER SHOULD NOT HAVE RE JECTED THE BOOKS OF ACCOUNT MERELY ON THE GROUNDS THAT QUALITY WISE STOCK REGISTER HAS NOT BEEN MAINTAINED BY THE APPELLANT AND THE INCREASE IN LABOUR PAYMENT WAS NOT EXPLAINE D SATISFACTORILY, IN ASSESSEE'S OWN CASE THE BOOKS OF ACCOUNT WERE ACCEPTED IN EARLIER YEARS. THE GROSS PROFIT IS 27.50% IN A.Y. 2008/09 AND 12.64% IN A.Y. 2007/08. THERE IS N O FAIL IN GROSS PROFIT. THE A.O HAS NOT FOUND ANY DEFECT IN THE BOOKS OF ACCOUNTS. WITHOUT FINDING OUT MAJOR DEFECTS IN THE BOOKS OF ACCOUNT (DUE TO WHICH TRUE AND CORRECT INC OME CANNOT DE COMPUTED) BOOKS OF ACCOUNTS CANNOT BE REJECTED, ACCORDINGLY, I ACCEPT THE BOOKS OF ACCOUNTS. EVEN IF, IT IS PRESUMED THAT ASSESSING OFFICER IS CORRECT IN REJEC TING THE BOOKS OF ACCOUNTS, NO ADDITION CAN STILL BE MADE AS THE GROSS PROFIT EXCLUDING EXC HANGE DIFFERENCE, DURING THE YEAR IS HIGHER THAN IDENTICAL GROSS PROFIT OF A.Y. 2007/08. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 5.3, I HAVE CONSIDERED THE ASSESSMENT ORDER AS W ELL AS THE SUBMISSION OF APPELLANT. I FIND THAT THE APPELLANT HAD ACCEPTED THE LOAN OF RS . 41,96,71(57-FROM 10 PARTIES BY ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 6 ACCOUNT PAYEE CHEQUES. ALL THE 10 DEPOSITORS ARE AS SESSED TO TAX. THE LOANS WERE REPAID IN A.Y. 2009/10 AND A.Y. 2010/11. AS PER THE DIRECT IONS OF THE ASSESSING OFFICER THE APPELLANT FURNISHED CONFIRMATORY LETTERS, COPIES OF ACKNOWLEDGEMENT OF RETURNS OF CREDITORS, BANK STATEMENT, CAPITAL A/C. BALANCE SHEET AND PROFIT & LOSS A/C. OF DEPOSITORS. THE IDENTITY OF CREDITORS AND GENUI NENESS OF TRANSACTIONS WAS ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT MA KE ANY INQUIRY AT THE ADDRESSES OF DEPOSITORS GIVEN BY APPELLANT. THE ASSESSING OFFICE R HAD ISSUED THE SUMMONS U/S. 131 OF THE ACT ON ALL THE 10 DEPOSITORS WHO DID NOT APP EAR BEFORE THE ASSESSING OFFICER, THE APPELLANT VIDE LETTER DTD. 23,12.2010 EXPLA INED TO ASSESSING OFFICER, THE REASON FOR NON APPEARANCE OF DEPOSITORS WHICH IS THE REPAYMENT OF LOAN TO THEM IN A.Y. 2009/10 AND A.Y. 2010/11. HOWEVER, THE APPELLANT HAD PROD UCED 4 DEPOSITORS NAMELY, 1) JIVARAJBHAI V. DHADUK, 2) MILAN MEHTA, 3) AKSHAY PA TEL, 4) JIGNABEN DOSHI. FROM THE VERIFICATION OF BANK STATEMENT I FIND THAT I THE DE POSITORS ARE HAVING INVESTMENT IN FIXED DEPOSITS WITH BANK AND PRIVATE PARTIES. THEY HAD AD VANCED LOAN TO THE APPELLANT OUT OF RECEIPT OF THEIR DEPOSITS WITH BANKS AND PRIVATE PA RTIES. I ALSO FOUND THAT AGAINST THE LOAN OF RS. 41,96,716/- ONLY CASH OF RS. 8,50, 000/- WAS DEPOSITED BY THEM. THE ASSESSING OFFICER HAD NOT VERIFIED THIS ISSUE WHILE THE APPELLANT PRODUCED 4 DEPOSITORS OR DID NOT INFORM THE ASSESSING OFFICER OF 4 DEPOSITOR S TO VERIFY THE TAXABILITY OF CASH DEPOSITED U/S. 69 OF THE ACT IN CASE OF DEPOSITORS. IN CASE OF THE REMAINING 4 DEPOSITORS THEIR STATEMENT OF ACCOUNTS REVEAL THE SUFFICIENT I NCOME AND FUND FOR GIVING THE LOAN TO THE APPELLANT. ONCE THE ASSESSEE HAS REPAID THE LOA N THE ASSESSEE CANNOT BE EXPECTED TO KEEP TRACK OF CREDITORS. THE ASSESSING OFFICER HAD OUT RIGHT REJECTED THE EVIDENCES WITHOUT POINTING OUT ANY DEFECTS THEREIN. THE ONUS LYING ON APPELLANT CANNOT BE UNENDING. ONCE THE ASSESSEE PRODUCED THE BASIC RECO RDS OF THE CREDITORS WHICH SHOW THE IDENTITY OF THE CREDITORS, CAPITAL ACCOUNTS OF THE CREDITORS AND BANK ACCOUNTS THROUGH WHICH MONEY WAS TRANSFERRED THROUGH CHEQUES TO THE ASSESSEE AND EVIDENCE THAT ALL OF THEM ARE INCOME-TAX ASSESSEES THEN IT CANNOT BE SAI D THAT ASSESSEE HAS STILL TO DISCHARGE THE ONUS. HENCE, THESE CREDITS STAND EXPLAINED AND THE ADDITION OF RS. 41,96,716/- IS THEREFORE, HEREBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 6.3. I HAVE, CAREFULLY GONE THROUGH THE ASSESSMEN T ORDER AS WELL AS SUBMISSION OF APPELLANT. I FIND THAT THE ASSESSING OFFICER HAD PR ESUMED THAT THE RATE OF DUNE' 200'4 IS RS, 24 PER CTS. FOR ELECTRICITY CONSUMPTION AND RS. 2.9 FOR THE MONTH OF OCT. 2004. THE ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 7 TOTAL EXPENSES OF RS. 1,29,265/- ON ELECTRICITY DU RING THE ENTIRE YEAR HAS BEEN ACCEPTED BY - ASSESSING OFFICER BECAUSE HE HAD DIVIDED THIS FIGURE BY RS. 10 PER CTS. FOR ESTIMATING THE PRODUCTION. THE ASSESSING OFFICER HAD THUS, WOR KED OUT 12926.5 CTS. AS THE TOTAL WORK CARRIED OUT AGAINST THE JOB WORK OF 8979.65 CT S. SHOWN IN THE BOOKS OF ACCOUNT. THERE IS NO EVIDENCE THAT THE APPELLANT HAD RECEIVE D THE DIFFERENTIAL 3946.85 CTS. FROM ANY PARTY FOR WHOM THE APPELLANT HAD DONE THE JOB W ORK. IF, THE JOB WORK RECEIPT FOR 3946.85 CTS. IS TAXABLE IN THE CASE OF APPELLANT T HEN, THE COST OF ROUGH DIAMONDS OF 3946.85 CTS. BECOMES TAXABLE IN THE CASE OF R. VIPU L & CO. V. N. EXPORTS AND M, KANTILAL EXPORTS. THE APPELLANT HAD PRODUCED THE COPY OF ASS ESSMENT ORDER OF R, VIPUL & CO. AND M. KANTILAL EXPORTS WHICH ARE ASSESSED AT-SURAT IN WHICH THEIR ASSESSING OFFICERS DID NOT FIND ANY UNACCOUNTED WORK DONE BY THEM. IN THE ABSE NCE OF ANY UACCOUNTED RAW MATERIAL AVAILABLE WITH ASSESSEE, NO JOB WORK OF LABOUR CAN BE CARRIED OUT. THUS, THE ASSESSING OFFICER HAS COMPLETELY FAILED ON THIS ISS UE. FURTHER AS PER THE SYSTEM ADOPTED BY APPELLANT THE BILLS OF AUG., 2007, SEPT. 2007 AN D OCT. 2007 FOR 3095.65 CTS. WAS PREPARED IN OCT. 2007 FOR 3095.65 CTS. THE APPELLAN T HAD ALSO PRODUCED THIS BILL BEFORE ASSESSING OFFICER AND BEFORE ME. THE TOTAL ELECTRIC ITY EXPENSES PAID FOR 3 MONTH ARE RS. 29,675/- FOR 3095.65 CTS. WHICH GIVES THE AVERAGE R ATE OF RS: 1C) PER CTS. INSTEAD OF RS. 3 PER CTS. WORKED OUT BY ASSESSING OFFICER. IN VARIOU S DECISIONS RELIED ON BY APPELLANT IT HAS BEEN HELD THAT PRODUCTION CANNOT BE ESTIMATED BASED ON ELECTRICITY CONSUMPTION. I HAVE ALSO ACCEPTED THE BOOKS OF ACCOUNTS OF APPELLANT. T HE ASSESSING OFFICER HAS FURTHER ADDED THE ENTIRE ESTIMATED LABOUR RECEIPTS INSTEAD OF NET PROFIT OF 3% ON RS. 15,78 ; 740/- . THE HON'BLE ITAT, AHMEDABAD IN THE CASE OF THRE E STAR GEMS VS. ACIT IN ITA NO. 2587/A/2008 ESTIMATED 3% NET PROFIT. THE HON'BLE GU JARAT HIGH COURT IN THE CASE OF CIT VS. PRESIDENT INDUSTRIES, REPORTED IN 258 ITR 654 H ELD THAT ONLY NET PROFIT IS TO BE TAXED ON UNACCOUNTED SALES OR JOB RECEIPTS. EVEN IF, THE APPELLANT HAD DONE ANY UNACCOUNTED LABOUR WORK, THE ESTIMATED INCOME WORKS OUT TO RS. 47,362/- ONLY. THIS IS ALSO NOT SUPPORTED BY ANY EVIDENCE FOUND BY ASSESSING-OFFICE R FROM ASSESSEE OR HIS 3 PRINCIPALS WHO ARE OWNERS OF DIAMONDS. THE ASSESSING OFFICER H AS NOT MADE ANY DISALLOWANCE OF ELECTRICITY EXPENSES AND APPELLANT HAD NO CAPAC ITY TO CARRY OUT THE ADDITIONAL POLICING ON 3946.85 CTS. CONSIDERING THE MACHINERY AND OTHER ASSETS OF APPELLANT. ACCORDINGLY, THE ADDITION OF RS. 15,78,740/- IS HEREBY DELETED A ND THE THIRD GROUND OF APPEAL IS ALLOWED AND THE FOURTH GROUND OF APPEAL B ECOMES INFRUCTUOUS. ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 8 11. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. NONE A TTENDED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE; WE DECIDED TO PROCEED EX-PARTE. LD. D.R. WAS HEARD AT LENGTH WHO PLACED STRONG RELIANCE ON THE A SSESSMENT ORDER. 12. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. THE UNDISPUTED FACT IS THAT THE A.O. HAS REJECTED THE B OOKS OF ACCOUNTS MERELY BECAUSE THE ASSESSEE COULD NOT FURNISH QUALITY-WISE /QUANTITY-WISE POLISHING OF ROUGH DIAMONDS. THE ASSESSEE IS ONLY DOING JOB W ORK AND IS NOT TRADING IN DIAMONDS. IT IS ALSO NOT IN DISPUTE THAT THE AS SESSING OFFICER WAS WELL AWARE OF THE NAMES AND THE ADDRESSES OF THE PERSONS WHO HAVE GIVEN THE JOB WORK TO THE ASSESSEE. THESE PERSONS ARE (I) M/S . R. VIPUL &CO. (II) V. N. EXPORTS AND (III) M. KANTILAL EXPORTS, WE FIND THAT THE A.O. HAS NOT MADE ANY ENQUIRY FROM THESE PERSONS INSOFAR AS JOB WORK DONE BY THE ASSESSEE IS CONCERNED. IT IS ALSO TRUE THAT THE ASSESSEE HAD PR ODUCED AUDITED BOOKS OF ACCOUNTS BEFORE THE A.O. AS MENTIONED ELSEWHERE, TH E ONLY REASON FOR REJECTING THE BOOKS OF ACCOUNTS AND MAKING THE IMPU GNED ADDITION ON ACCOUNT OF SUPPRESSED SALE WAS BECAUSE THE ASSESSEE COULD NOT FURNISH QUALITY-WISE /QUANTITY-WISE POLISHING OF DIAMONDS. WITHOUT MAKING ANY ENQUIRY FROM THE PRINCIPALS, THE ASSESSING OFFICER FELL INTO AN ERROR WHICH DID NOT FIND ANY FAVOUR WITH THE FIRST APPELLATE AU THORITY AND WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF T HE FIRST APPELLATE AUTHORITY. GROUND NOS. 1 & 3 ARE ACCORDINGLY DISMIS SED. 13. BEFORE CLOSING, WE FIND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN GROSS PROFIT AT 27.50% WHICH WAS 12.64% IN THE ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 9 IMMEDIATELY PRECEDING ASSESSMENT YEAR. THIS ITSELF SHOWS THAT THE ASSESSEE HAS SHOWN HIGHER PROFITS DURING THE YEAR. 14. GROUND NO. 2 RELATES TO THE DELETION OF THE ADDITIO N OF RS. 41,96,716/- MADE BY THE A.O. U/S. 68 OF THE ACT. WE FIND THAT THE AS SESSEE HAD FURNISHED COMPLETE DETAILS OF THE PERSONS FROM WHOM HE HAS TA KEN THE LOAN DURING THE YEAR UNDER CONSIDERATION. THE EXPLANATION OF TH E ASSESSEE CAN BE APPRECIATED FROM THE FOLLOWING CHART:- NAME & ADDRESS OF DEPOSITOR PAN AMOUNT OF LOAN ADDITION DURING THE YEAR EVIDENCE FOR IDENTITY AND SOURCE OF DEPOSITORS DATE OF REPAYMENT JIVARAJBHAI VALLABHBHAI DHADUK B-23, AKSHARDHAM SOCIETY, VARACHHA ROAD, SURAT (PAGE 8 TO 16) ABWPD2698E 350000 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 16.02. 2009 SMT. SEJALBEN SAILSESHBHAI GANGHAVI 303, PARAS APT., KATARGAM, SURAT. (PATE 17 TO 20) BIIPS2396L 508383 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 21.12.2010 SUSHILABEN N. MEHTA 204, OMKARDARSHAN APT, KATARGAM, SURAT. (PATE 21 TO 24) AEIPM199J 508383 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 24.12.2010 NEEETABEN D. SAGHAVI 203, PARAS APT., KATARGAM, SURAT (PATE 25 TO 28) B IAPS6925F 508383 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK 24.12.2010 ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 10 STATEMENT JIGNABEN VIPULKUMAR DOSHI 204, BAJARANG APTL, KATARGAM, SURAT (PATE 29 TO 32) AFYPD0698M 406706 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 20.12.2010 KOKILABEN PRAKASHBHAI VOHRA 306, KESHAV KIRAN APT., KATARGAM, SURAT (PAGE 33 TO 37) AALPV207H 406706 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 20.12.2010 RASIKBHAI P. MARADIYA 32/201, BAJRANG APT., KATARGAM, SURAT (PAGE 38 TO 42) APKPM1883N 201874 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 20.12.2010 AKSHAV NAVINCHANDRA PATEL 6/711, MOTI SHETI GALEMANDI, SURAT (PAGE 43 TO 47) AANPP3252C 403353 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 20.12.2010 JYANTILAL T. MEHTA (HUF) 404, OMKARDARSAN APT.,KATARGAM, SURAT (PAGE 48 TO 52) AABHJ2245P 403353 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 21.12.2010 MILAN P. MEHTA 18, GAUTTAM APT. II, OPP. AGAR JAIN TEMPLE, GOPIPURA, SURAT (PAGE 53 TO 57) AFPPM3844J 503945 CONFIRMATION, ACKNOWLEDGEMENT, COMPUTATION OF INCOME, PROFIT & LOSS A/C; BALANCE SHEET AND BANK STATEMENT 24.12.2010. ITA NO. 2642 /AHD/2011 . A.Y. 2008-0 9 11 15. A PERUSAL OF THE ABOVE SHOW THAT NOT ONLY PAN DETAI LS WERE AVAILABLE BUT ALSO THE DATE OF REPAYMENT OF THE LOAN WAS MADE AVA ILABLE. SINCE THE LOANS WERE REPAID TO ALL THE 10 DEPOSITORS THEY DID NOT R ESPOND TO THE SUMMONS ISSUED BY THE A.O. U/S. 131 OF THE ACT. THE LD. CIT (A) FOUND THAT FOUR OF THE DEPOSITORS WERE PRODUCED BEFORE THE A.O. THE LD. CI T(A) ALSO FOUND THAT THE DEPOSITORS WERE HAVING INVESTMENT IN FIXED DEPOSITS WITH BANK AND PRIVATE PARTIES FROM WHICH THEY HAD ADVANCED LOAN TO THE AS SESSEE. IT IS A SETTLED PROPOSITION OF LAW THAT ONCE THE ASSESSEE HAS FURNI SHED PAN DETAILS OF THE PERSONS FROM WHOM HE HAS TAKEN LOANS, THE BURDEN CA ST UPON HIM BY THE PROVISIONS OF SECTION 68 STANDS DISCHARGED. SINCE T HE ASSESSEE IS FOUND TO HAVE DISCHARGED THE ONUS, WE DECLINE TO INTERFERE W ITH THE FINDINGS OF THE LD. CIT(A). 16. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 12 - 01- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 12 /01/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD