Late Suryakant Nemchand Shah L/R Kokilaben S. Shah, Ahmedabad V. The Income tax Officer,Ward-3(3), Ahmedabad

ITA 2685/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0485 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 18-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B T THAKKAR
• Keywords: Unexplained cash credit; Salary income
• Section: 131; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2685/AHD/2013 / ASSTT. YEAR: 2006-2007 LATE SURYAKANT NEMCHANND SHAH L/R. KOKILABEN S. SHAH PROP: SHAH HARSHADRAL MAHESHKUMAR & BROS, A-207, PREMIUM HOUSE NR. GANDHIDHAM RAILWAY STATION OFF. ASHRAM ROAD AHMEDABAD 380 009. VS ITO, WARD - 3(3) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI B.T. THAKKAR REVENUE BY : SHRI SATISH SOLANKI, SR.DR / DATE OF HEARING : 08/08/2016 / DATE OF PRONOUNCEMENT: 06 /10/2016 $%/ O R D E R ASSESSEE IS IN APPEAL AGAINST ORDER OF THE LD.CIT(A )-III, AHMEDABAD DATED 20.9.2013 PASSED FOR THE ASTT.YEAR 2006-07. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.25,26,149/- WHICH WAS ADDED BY T HE AO WITH THE AID OF SECTION 68 OF THE INCOME TAX ACT, 1961. 3. IN THE SECOND FOLD OF SUBMISSIONS, THE ASSESSEE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES OF RS.94,466/- IN RESPECT OF ALLEGED CASH CREDIT. SIN CE BOTH THE ISSUES ARE INTER- CONNECTED, THEREFORE, WE TAKE BOTH THE ISSUES TOGET HER. ITA NO.2685/AHD/2013 2 4. BRIEF FACTS OF THE CASE ARE THAT SHRI SURYAKANT NEMCHAND SHAH WAS RUNNING A PROPRIETORSHIP CONCERN IN THE NAME AND ST YLE OF M/S.SHAH HARSHADRAI MAHESHKUMAR & BROS. HE HAS FILED HIS RE TURN OF INCOME ON 7.12.2006 DECLARING TOTAL INCOME OF RS.81,537/-. A T THE RELEVANT TIME, HE WAS DOING SHARAFI BUSINESS I.E. HE USED TO EARN INTEREST ON GIVING P ETTY LOANS ETC. IT APPEARS THAT SHRI NEMCHAND SHAH WAS EXPIRED DURING THE PENDENCY OF THE PROCEEDINGS, AND HE IS BEING REPRESENTED BY HIS WIF E KOKILABEN S. SHAH WHO IS LEGAL REPRESENTATIVE. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) OF THE A CT WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS BORROWED MONEY FROM 15 PERSONS AGGREGA TING TO RS.25,26,149/-. THESE AMOUNTS HAVE BEEN TAKEN DURING THE YEAR ON DI FFERENT DATES BY ACCOUNT PAYEE CHEQUES. THE LD.AO HAS NOTICED DETAILS IN PA RA-4 OF THE ASSESSMENT ORDER. THE AO HAS CONFRONTED THE ASSESSEE TO SHOW AS TO WHY THESE AMOUNTS SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDITS. IN RESPONSE TO THE QUERY OF THE AO, THE ASSESSEE HAS FILED VARIOUS DETAILS, BUT THAT COULD NOT SATISFY THE LD.AO, AND HE ACCORDINGLY, MADE ADDITION. APPEAL T O THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE ME, THE LD.COUNSEL FOR THE ASSESSEE MADE REFERENCE TO THE DETAILS SUBMITTED BY THE ASSESSEE BEFORE THE LD.CIT(A), WHI CH HAVE BEEN REPRODUCED FROM PAGE NO.14 TO 21 OF THE PAPER BOOK. HE ALSO C OMPILED THESE DETAILS IN TABULAR FORM AND SUBMITTED A CHART DURING THE COURS E OF HEARING. I DEEM IT PERTINENT TO TAKE NOTE OF THESE DETAILS. THEY READ AS UNDER: SR.NO. NAME OF THE CREDITOR AMOUNT OF LOAN WI TH COMMENTS OF THE ID. A.O. REPLY OF THE APPELLANT 1. NIRMALA J. DOSHI, MUMBAI RS.50,000/- ASSESSEE FAILED TO PRODUCE DEPOSITOR AND FAILED TO PROVE IDENTITY AND GENUINENESS OF TRANSACTION SUMMONS U/S 131 OF THE INCOME TAX ACT, 1961 WERE ISSUED IN THE NAME OF DECEASED CREDITOR. IN RESPONSE TO SUMMONS HER LEGAL HEIR ASHWIN DOSHI HAS REPLIED VIDE LETTER DATED 17.11.2012, INTER ALIA STATING THAT ITA NO.2685/AHD/2013 3 SMT. NIRMALA DOSHI HAD GIVEN LOAN BEARING INTEREST @12%, NO BOOKS OF ACCOUNT WERE REQUIRED TO BE MAINTAINED BY HER, COPIES OF BANK STATEMENTS FOR THE PERIOD 01.04.2005 TO 31.03.2006 WERE ENCLOSED ALONG- WITH COPY OF LEDGER ACCOUNT OF SURYAKANT SHAH. IN RESPONSE TO SUMMONS, HER LEGAL HEIR VIDE HIS LETTER DT. 21.11.12 HAS FURTHER REPLIED THAT HE COULD NOT GET RESERVATION AND THEREFORE A COMMISSION CAN BE ISSUED AS DISTANCE TO BE COVERED IS MORE THAN 200 KMS. KINDLY SEE PAGE NO. 124 TO 127 OF PAPER BOOK 11) 2. MANHAR P. VORA, BHAVNAGAR RS.3,50,000/- ASSESSEE FAILED TO PRODUCE DEPOSITOR AND FAI LED TO PROVE IDENTITY AND GENUINENESS OF TRANSACTION SUMMONS U/S 131 OF THE INCOME TAX ACT, 1961 WERE ISSUED IN THE NAME OF DECEASED CREDITOR. IN RESPONSE TO THE SUMMONS HIS LEGAL HEIR SMT. USHABEN M. VORA HAS REPLIED VIDE LETTER DATED 23.11.2012 INTER ALIA ENCLOSING THEREWITH EXTRACTS OF ACCOUNTS OF SURYAKANT SHAH , COPY OF RETURN OF INCOME AND COPY OF BANK STATEMENT AND A COPY OF DEATH CERTIFICATE. (KINDLY SEE PAGE NO. 145 TO 155 OF PAPER BOOK-11) 3. MALPA A. DOSHI, MUMBAI RS.50,000/- ASSESSEE FAILED TO PRODUCE DEPOSITOR AND FAILED TO PROVE IDENTITY AND GENUINENESS OF TRANSACTION IN RESPONSE TO SUMMONS-, SHE HAS REPLIED VIDE LETTER DATED 17 11.2012 INTER ALIA STATING THAT THAT SHE HAD GIVEN LOAN BEARING INTEREST @12%, NO BOOKS OF ACCOUNT WERE REQUIRED TO BE MAINTAINED BY HER, COPIES OF BANK STATEMENTS FOR THE PERIOD 01.04.2005 TO 31.03.2006 WERE ENCLOSED ALONG- WITH COPY OF LEDGER ACCOUNT OF SURYAKANT SHAH. IN RESPONSE TO SUMMONS, SHE VIDE HER LETTER DT. 21.11.12 HAS FURTHER REPLIED THAT SHE COULD NOT GET RESERVATION AND THEREFORE A COMMISSION CAN BE ISSUED AS DISTANCE TO BE COVERED IS MORE THAN 200 KMS. ( KINDLY SEE PAGE NO. 160 TO 163 OF PAPER BOOK-II) JAYSUKHLAL A. DOSHI, MUMBAI RS.1,00,000/- ASSESSEE FAILED TO PRODUCE DEPOSITOR AND FAILED TO PROVE IDENTITY AND GENUINENESS OF TRANSACTION IN RESPONSE TO SUMMONS , HE HAS REPLIED VIDE LETTER DATED 17.11.2012 INTER ALIA STATING THAT THAT HE HAD ITA NO.2685/AHD/2013 4 GIVEN LOAN BEARING INTEREST @12%, NO BOOKS OF ACCOUNT WERE REQUIRED TO BE MAINTAINED BY HIM, COPIES OF BANK STATEMENTS FOR THE PERIOD 01.04.2005 TO 31.03.2006 WERE ENCLOSED ALONG- WITH COPY OF LEDGER ACCOUNT OF SURYAKANT SHAH. IN RESPONSE TO SUMMONS, HE VIDE HIS LETTER DT. 21.11.12 HAS FURTHER REPLIED THAT HE COULD NOT GET RESERVATION AND THEREFORE A COMMISSION CAN BE ISSUED AS DISTANCE TO BE COVERED IS MORE THAN 200 KMS. ( KINDLY SEE PAGE NO. 170 TO 173 OF PAPER BOOK-II) 5. ASHWIN J. DOSHI, MUMBAI RS.1,00,000/- ASSESSEE FAILED TO PRODUCE DEPOSITOR AND FAILED TO PROVE IDENTITY AND GENUINENESS OF TRANSACTION IN RESPONSE TO SUMMONS , HE HAS REPLIED VIDE LETTER DATED 17.11.2012 INTER ALIA STATING THAT THAT HE HAD GIVEN LOAN BEARING INTEREST @12%, NO BOOKS OF ACCOUNT WERE REQUIRED TO BE MAINTAINED BY HIM, COPIES OF BANK STATEMENTS FOR THE PERIOD 01.04.2005 TO 31.03.2006 WERE ENCLOSED ALONG- WITH COPY OF LEDGER ACCOUNT OF SURYAKANT SHAH. IN RESPONSE TO SUMMONS, HE VIDE HIS LETTER DT. 21.11.12 HAS FURTHER REPLIED THAT HE COULD NOT GET RESERVATION AND THEREFORE A COMMISSION CAN BE ISSUED AS DISTANCE TO BE COVERED IS MORE THAN 200 KMS. ( KINDLY SEE PAGE NO. 182 TO 185 OF PAPER BOOK-11) 6. DIXIT ARVIND PATEL, A'BAD RS.2,62,097/- AS PER STATEMENT RECORDED AND LOOKING TO THE SOURCE OF INCOME AND EARNING OF RS.15,000/- P.M. PRESENTLY HAS FAILED TO PROVE CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION 7. VIKRAM M. PATEL, RS.1,07,772/- AS PER STATEMENT RECORDED AND LOOKING TO THE SOURCE OF INCOME AND SIZED OF FAMILY HE HAS FAILED TO PROV E CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS: (A) CONFIRMATION (B) COPY OF ACCOUNT (C) COPY OF ACCOUNT OF VIDHI ENTERPRISE (D) COPY OF ACCOUNT OF KDP CASTING (E) COPY OF RETURN OF INCOME AND (F) COPY OF PAN CARD IT WOULD BE EVIDENT FROM THE COPY OF A/C OF KDP CASTING THAT A SUM OF RS.2,41,466/- WAS ADVANCED AS ITA NO.2685/AHD/2013 5 LOAN ON 21.04.2003. MOREOVER, THERE WERE ACCRETIONS TO THE AMOUNT OF LOAN IN FORM OF ADDITION AND INTEREST FROM TIME TO TIME. THE ABOVE LOAN WAS TRANSFERRED FIRST TO VIDHI ENTERPRISE AND LATER ON THE SAME WAS TRANSFERRED TO THE APPELLANT DURING THE YEAR. HE HAS EXPLAINED THAT HE IS A PARTNER IN MANGALMURTI DYE CHEM AND RECEIVING RS.15,000/- P.M. THE ID. A.O. DID NOT ASK HIM ABOUT HIS PROFIT SHARE IN THE ABOVE FIRM. HE HAS CLEARLY STATED THAT HE ALSO DERIVED INCOME FROM RENT AND INTEREST. HE HAS CONFIRMED AGAIN THE DEPOSIT AND ALSO MENTIONED ABOUT THE SOURCE OF DEPOSIT. IN VIEW OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. (KINDLY SEE PAGE NO. 174 TO 177 OF PAPER BOOK-11 8. KANABHAI B. PATEL, ABAD RS.4,90,122/- AS PER STATEMENT RECORDED AND LOOKING TO THE SOURCE OF INCOME AND SIZED OF FAMILY HE HAS FAILED TO PROV E CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS : (A) CONFIRMATION (B) COPY OF ACCOUNT (C) COPY OF BANK STATEMENT (D) COPY OF FORM NO. 8-A (E) COPY OF FORM NO. 7/12 (F) COPY OF ACCOUNT OF VIDHI ENTERPRISE (G) COPY OF ACCOUNT OF BHARAT FOUNDRY IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE CREDITOR HAD ADVANCED THEM MONEY EVEN BEFORE 01.4.2003 AND THE SAME HAD BEEN CARRIED FORWARD FROM YEAR TO YEAR WITH INTEREST. ACCORDINGLY, THERE WERE ACCRETIONS TO THE AMOUNT OF LOAN IN FORM OF INTEREST FROM TIME TO TIME. THE ABOVE LOAN WAS TRANSFERRED FIRST TO VIDHI ENTERPRISE AND LATER ON THE SAME WAS TRANSFERRED TO THE APPELLANT DURING THE YEAR. HE HAS EXPLAINED THAT HE OWNS 10,313 SQ. METER AGRICULTURAL LAND. BESIDES ABOVE, HE IS DRAWING A SALARY OF RS.25,000/- P.M. HE USED ITA NO.2685/AHD/2013 6 TO FILE RETURN OF INCOME REGULARLY. HE HAS CONFIRMED AGAIN DEPOSIT AND ALSO EXPLAINED SOURCE OF DEPOSIT. IN VIEW OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. (KINDLY SEE PAGE NO.140 TO 144 OF THE PAPER BOOK-II) 10. NARESH KANTI PATEL, ABAD RS.1,27,021/- AS PER STATEMENT RECORDED DEPOSITOR IS JOB WORKER A ND EARNED RS.4,500/- PER MONTH. HE HAS FAILED TO PRODU CE CONFIRMATION OF HIS FATHER. LOOKING TO THE SOURCE OF INCOME OF DEPOSITOR AND SIZE OF FAMILY, HE HAS FAIL ED TO PROVE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS : (A) CONFIRMATION (B) COPY OF ACCOUNT (C) COPY OF BANK STATEMENT (D) COPY OF DEATH CERTIFICATE OF HIS FATHER (E) COPY OF FORM NO. 7/12 (F) COPY OF ACCOUNT OF VIDHI ENTERPRISE (G) COPY OF ACCOUNT OF BHARAT FOUNDRY IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE FATHER OF THE CREDITOR HAD ADVANCED THEM MONEY BEFORE 01.4.2003 AND THE SAME HAD BEEN CARRIED FORWARD FROM YEAR TO YEAR WITH INTEREST. ACCORDINGLY, THERE WERE ACCRETIONS TO THE AMOUNT OF LOAN IN FORM OF INTEREST FROM TIME TO TIME. THE ABOVE LOAN WAS TRANSFERRED FIRST TO VIDHI ENTERPRISE DURING THE YEAR AND AFTER DEATH OF HIS FATHER THE AMOUNT WAS DIVIDED AND TRANSFERRED TO THE APPELLANT. HE HAS EXPLAINED THAT THE FAMILY OWNS AGRICULTURAL LAND AND HE IS DRAWING A SALARY OF RS.4,500/- P.M. HE HAS CONFIRMED AGAIN DEPOSIT AND ALSO EXPLAINED SOURCE OF DEPOSIT. WHEN THE FATHER OF THE CREDITOR DIED ON 18.08.2005 (COPY OF DEATH CERTIFICATE WAS ALREADY FILED), HOW HIS CONFIRMATION COULD HAVE BEEN FILED. IN VIEW OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT -ABOUT GENUINENESS OF THE TRANSACTION. ITA NO.2685/AHD/2013 7 ( KINDLY SEE PAGE NO. 132 TO 139 & 180 AND 181 OF PAPER 11. BHIKHA K. PATEL, ABAD RS.1,27,020/- AS PER STATEMENT RECORDED; DEPOSITOR IS JOB WORKER AND EARNED RS.15,200/- PER MONTH. HE HAS FAILED TO PROD UCE CONFIRMATION OF HIS FATHER. LOOKING TO. THE SOURCE OF INCOME OF DEPOSITOR AND SIZE OF FAMILY HE HAS FAILE D TO PROVE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. /- FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS: (A) CONFIRMATION (B) COPY OF ACCOUNT (C) COPY OF BANK STATEMENT (D) COPY OF DEATH CERTIFICATE OF HIS FATHER (E) COPY OF FORM NO. 7/12 (F) COPY OF ACCOUNT OF VIDHI ENTERPRISE (G) COPY OF ACCOUNT OF BHARAT FOUNDRY IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE FATHER OF THE CREDITOR HAD ADVANCED THEM MONEY EVEN BEFORE 01.4.2003 AND THE SAME HAD BEEN CARRIED FORWARD FROM YEAR TO YEAR WITH INTEREST. ACCORDINGLY, THERE WERE ACCRETIONS TO THE AMOUNT OF LOAN IN FORM OF INTEREST FROM TIME TO TIME. THE ABOVE LOAN WAS TRANSFERRED FIRST TO VIDHI ENTERPRISE DURING THE YEAR AND AFTER DEATH OF HIS FATHER THE AMOUNT WAS DIVIDED AND TRANSFERRED TO THE APPELLANT. HE HAS EXPLAINED THAT THE FAMILY OWNS AGRICULTURAL LAND AND HE IS DRAWING A SALARY OF RS.15,200/- P.M. HE HAS CONFIRMED AGAIN DEPOSIT AND ALSO EXPLAINED SOURCE OF DEPOSIT. WHEN THE FATHER OF THE CREDITOR DIED ON 18.08.2005 (COPY OF DEATH CERTIFICATE WAS ALREADY FILED), HOW HIS CONFIRMATION COULD HAVE BEEN FILED. IN VIEW OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. ( KINDLY SEE PAGE NO. 178 TO 179 OF PAPER BOOK-II) 12. SHAILESH K. PATEL, A'BAD RS.2,17,791 AS PER STATEMENT RECORDED DEPOSITOR IS JOB WORKER SINCE 2005 AND EARNED RS.12,500/-PER MONTH. LOOKING TO THE SOURCE OF INCOME OF DEPOSITOR AND SIZE OF FA MILY HE HAS FAILED TO PROVE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE CREDITOR HAD ADVANCED THEM MONEY EVEN BEFORE 01.4.2003. ACCORDINGLY, THERE WERE ACCRETIONS TO THE AMOUNT OF LOAN IN FORM OF INTEREST FROM TIME TO TIME. THE ABOVE LOAN WAS TRANSFERRED FIRST TO NAVDEEP ENTERPRISE AND LATER ON THE SAME WAS TRANSFERRED TO THE ITA NO.2685/AHD/2013 8 APPELLANT DURING THE YEAR. HE HAS EXPLAINED THAT HE IS 38 YEARS OLD PERSON DRAWING A SALARY OF RS.12,500/- P.M. HE HAS CONFIRMED AGAIN DEPOSIT AND ALSO EXPLAINED SOURCE OF DEPOSIT. IN VIEW OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. (KINDLY SEE PAGE NO.113 TO 123 OF PAPER BOOK-II) 13. ASHWIN M. PATEL, A'BAD RS.74,409/- AS PER STATEMENT RECORDED DEPOSITOR IS JOB WORKER AND EARNED RS.20,000/- PER MONTH. LOOKING TO THE SOURCE OF INCOME OF DEPOSITOR AND SIZE OF FAMILY HE HAS FAILED TO PROVE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS : (A) CONFIRMATION (B) COPY OF ACCOUNT (C) COPY OF BANK STATEMENT (D) COPY OF PAN (E) COPY OF ACCOUNT OF VIDHI ENTERPRISE (F) COPY OF ACCOUNT OF BHARAT FOUNDRY IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE CREDITOR HAD ADVANCED THEM MONEY ON 13.07.2004. ACCORDINGLY, THERE WERE ACCRETIONS TO THE AMOUNT OF LOAN IN FORM OF INTEREST FROM TIME TO TIME. THE ABOVE LOAN WAS TRANSFERRED FIRST TO VIDHI ENTERPRISE AND LATER ON THE SAME WAS TRANSFERRED TO THE APPELLANT DURING THE YEAR. HE HAS EXPLAINED THAT HE IS 43 YEARS OLD PERSON AND EARNS RS.20,000/- P.M. HE HAS CONFIRMED AGAIN DEPOSIT AND ALSO EXPLAINED SOURCE OF DEPOSIT. IN VIEW OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. ( KINDLY SEE PAGE NO. 186 TO 194 OF PAPER BOOK-II) 14 NATWARLAL V. PATEL, A'BAD RS.1,83,210/- AS PER STATEMENT RECORDED DEPOSITOR IS WORKING AS FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS : ITA NO.2685/AHD/2013 9 SUPERVISOR AND EARNED RS.6,500/- PER MONTH. LOOKING TO THE SOURCE OF INCOME OF DEPOSITOR HE HAS FAILED TO PROVE CREDIT WORTHINESS AND GENUINENESS O F THE TRANSACTION (A) CONFIRMATION (B) COPY OF PAN (C) COPY OF ACCOUNT (D) COPY OF BANK STATEMENT (E) COPY OF ACCOUNT OF NAVDEEP ENTERPRISE (F) COPY OF ACCOUNT OF BHARAT FOUNDRY IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE CREDITOR HAD ADVANCED THEM MONEY ON 07.01.2005 AND THE SAME HAD BEEN CARRIED FORWARD FROM LAST YEAR TO THIS FINANCIAL YEAR WITH INTEREST. THE ABOVE LOAN WAS FIRST TRANSFERRED FIRST TO NAVDEEP ENTERPRISE AND LATER ON THE SAME WAS TRANSFERRED TO THE APPELLANT DURING THE YEAR. HE HAS EXPLAINED THAT HE IS A GRADUATE AND DRAWS INCOME FROM SALARY AND COMMISSION BESIDES AGRICULTURE. HIS FAMILY OWNS 6 BIGHAS OF LAND. HE USED TO FILE RETURN OF INCOME REGULARLY. THE ID. A.O. DID NOT ASK HIM ABOUT HIS PROFIT SHARE IN THE ABOVE FIRM. HE HAS CONFIRMED AGAIN DEPOSIT AND ALSO EXPLAINED SOURCE OF DEPOSITS. IN VIE OF THE ABOVE, HIS CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. (KINDLY SEE PAGE NO.128 TO 131 OF PAPER BOOK-II) 15. MANGUBEN M. PATEL, ABAD RS.99,811/- AS PER WRITTEN SUBMISSION ENCLOSED MANGUBEN M. PATEL IS HOUSEWIFE. SHE HAS CLAIMED DEPOSIT OF RS.99,811/- WITH HARSHADRAI MAHESHKUMAR & BROS. HIS HUSBAND NAMED MOHANLAL JETHADAS PATEL IS AGRICULTURIST HAVING LAND OF 79 YARD AND 93 SQ. MET ER WITH ANOTHER ONE PARTNER. ON VERIFICATION OF 7/12 ABSTRACTS IT IS NOTICED THAT IT WAS UNSIGNED AND AL SO FOUND THAT NO CROPS GROWN DURING F.Y.2005-06. SHRI VIKRAMBHAI M. PATEL DEPOSITOR AT SR. 7 AND SHRI ASHWINBHAI M. PATEL DEPOSITOR AT SR. 13 ARE SON OF MANGUBEN M. PATEL. SHE HAS NOT SUBMITTED CONFIRMATION OF HIS HUSBAND REGARDING DEPOSIT. IN VIEW OF ABOVE, I THINK THAT SHE HAS NOT PROVED HER CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION. FOLLOWING DOCUMENTS WERE ALREADY ON RECORDS : (H) CONFIRMATION (I) COPY OF A CCOUNT (J) COPY OF BANK STATEMENT (K) COPY OF FORM NO. 8- A (I) COPY OF FORM NO. 7/12 (M) COPY OF ACCOUNT OF VIDHI ENTERPRISE (N) COPY OF ACCOUNT OF BHARAT FOUNDRY IT WOULD BE EVIDENT FROM THE COPIES OF A/C OF BHARAT FOUNDRY THAT THE CREDITOR HAD ADVANCED THEM MONEY ON 23.07.2004 AND THE SAME HAD BEEN CARRIED FORWARD FROM YEAR TO ITA NO.2685/AHD/2013 10 YEAR WITH INTEREST. THE ABOVE LOAN WAS TRANSFERRED FIRST TO VIDHI ENTERPRISE AND LATER ON THE SAME WAS TRANSFERRED TO THE APPELLANT DURING THE YEAR. SHE HAS EXPLAINED THAT SHE OWNS 10,313 SQ. METER AGRICULTURAL LAND AND SHE HAD SAVED OUT OF MONEY GIVEN TO HER BY HER HUSBAND FROM TIME TO TIME. IN VIEW OF THE ABOVE, HER CREDIT WORTHINESS HAS BEEN ESTABLISHED AND AS LOAN TRANSACTION HAD TAKEN PLACE THROUGH CHEQUES, THERE SHOULD NOT BE ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. KINDLY SEE PAGE NO. 156 TO 159 OF PAPER BOOK-11) 6 . ON THE STRENGTH OF THESE DETAILS, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS DISCHARGED THE BURD EN PUTS UPON HER BY SECTION 68 OF THE INCOME TAX ACT, AND THEREFORE, NO ADDITION OUGHT TO HAVE BEEN MADE. ON THE OTHER HAND, THE LD.DR CONTENDED THAT NO DOUBT THE ASSESSEE HAS PRODUCED DOCUMENTARY EVIDENCE DEMONSTR ATING IDENTITY OF THE CREDITORS. THE AMOUNTS HAVE BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE, BUT THE ASSESSEE FAILED TO PROVE CREDIT-WORTHINESS OF THE CREDITORS. HE TOOK ME THROUGH THE FINDING OF THE LD.CIT(A) AVAILABLE ON P AGE NO.22 OF THE IMPUGNED ORDER. HE POINTED OUT THAT THE LD.CIT(A) HAS ANALY SED CASE OF EACH CREDITOR, AND THEREAFTER, RECORDED THAT SUCH CREDITORS WERE M EN OF NO MEANS. THEREFORE, LD.CIT(A) THE LD.CIT(A) HAS CONFIRMED THE ADDITION. 7. I HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY. SECTION 68 OF THE INCOME TAX ACT CONTEM PLATES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE M AINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF, OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF THE AO SATISFACTORY, THEN THE SUM SO CREDITED IN THE AC COUNTS MAY BE TREATED AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. A PER USAL OF THE DETAILS EXTRACTED ITA NO.2685/AHD/2013 11 SUPRA WOULD INDICATE THAT THE CREDITORS AT SR.NO.1, 2, 3, 4, 5, 6, 12, 13 AND 14 ARE ASSESSED TO TAX. THE ASSESSEE HAS PRODUCED THE IR STATEMENT OF ACCOUNTS, CONFIRMATION, BANK STATEMENTS, AND PANS. IN OTHER WORDS, THE ASSESSEE HAS PROVED THEIR IDENTITIES. SHE HAS ALSO PROVED GENU INENESS OF THE TRANSACTIONS, BECAUSE AMOUNTS HAVE BEEN TAKEN THROUGH ACCOUNT PAY EE CHEQUES. THE LD.CIT(A) HAS DOUBTED THE CREDIT-WORTHINESS OF THE CREDITORS, BUT THE ASSESSEE HAS ALLEGED THAT OUT OF 15 CREDITORS, 9 CREDITORS A RE ASSESSED TO TAX. THEREFORE, INQUIRY IN THEIR HANDS COULD BE MADE ABOUT THE SOUR CE OF FUNDS. ONCE THEY ARE ALLEGING THAT THEY HAVE ADVANCED MONEY TO THE ASSES SEE, THEN, MERELY ON SURMISES IT CANNOT BE INFERRED THAT THEY WERE NOT H AVING ANY MEANS. SOME OF THE CREDITORS APPEARED BEFORE THE AO AND HAVE RE-AF FIRMED THE TRANSACTION. THUS, FLAW POINTED OUT BY THE LD.REVENUE AUTHORITIE S IS BASED ON AN INFERENCE DRAWN ACCORDING TO THEIR UNDERSTANDING. THE ASSESS EE HAS SUBMITTED SUFFICIENT EVIDENCES ON THE RECORD WHICH DEMONSTRAT ED THAT THESE AMOUNTS ARE GENUINE LOANS. IN SOME OF THE CASES, AMOUNTS WERE SWOLLEN TO THIS FIGURE ON ACCOUNT OF ACCUMULATION OF INTEREST FROM THE PAST. CONSIDERING ALL THESE FACTS, I ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE A DDITIONS MADE BY THE AO WITH THE AID OF SECTION 68 OF THE ACT. CONSEQUENTL Y, INTEREST WILL BE AN ALLOWABLE EXPENDITURE ON SUCH GENUINE LOAN. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 6 TH OCTOBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 06/10/2016