The ACIT,(OSD), Circle-8, Ahmedabad V. M/s. SBJ Von Compounders Pvt.Ltd., Ahmedabad

ITA 2781/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1953 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R GHOSH SRDR
• Assessee Lawyers: MAHUL K PATEL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.2781/AHD/2010 ASSESSMENT YEAR:2006-07 DATE OF HEARING:4.3.11 DRAFTED:8.3.11 ACIT (OSD),CIRCLE-8, AHMEDABAD V/S. SBJ VON COMPOUNDERS PVT. LTD., D/11-12, SILVER ARC, KAVI NANALAL MARG, ELLISBRIDGE, AHMEDABAD PAN NO. AADCS0470Q (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI P.R. GHOSH, SR-DR RESPONDENT BY:- SHRI MAHUL K PATEL, AR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME- TAX(APPEALS)-XIV, AHMEDABAD IN APPEAL NO. CIT(A) XI V/AC CIR.(OSD)/243/08-09 DATED 08-07-2010 FOR THE ASSESS MENT YEAR 2006-07. 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L. 1) THE LD. COMMISSIONER OF INCOME-TAX (A)-XIV, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 10,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPAP0LAINED CASH CREDIT U/S.68 OF THE ACT. 2) THE LD. COMMISSIONER OF INCOME-TAX(A)-XIV, AHMED ABAD HAS ERRED IN LAW AND ON FACTS IN ADMITTING ADDITIONAL EVIDENC ES IN VIOLATION OF RULE 46A WHICH WAS NOT PRODUCED FOR EXAMINATION BEFORE T HE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 2 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX (A)-XIV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD . COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABAD MAYBE SET-ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, WE FIND THAT WHILE MAKING THE ADDITION OF RS.10 LAKH ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE IT ACT, THE ASSESSING OFFICER HAS OBS ERVED AS UNDER:- ADDITION ON ACCOUNT OF UNSECURED LOAN: DURING THE YEAR UNDER ACCOUNT THE ASSESSEE HAS ACCO UNTED FOR NEW UNSECURED LOAN STATED TO HAVE BEEN RECEIVED FROM TH E BELOW MENTIONED PARTY: (1) NEWGRANGE GROUP LLC. RS.10,00,000/- THE ASSESSEE HAS BEEN ASKED TO FURNISH THE EVIDENCE S AND SOURCES AND BANK STATEMENT OF THE PARTIES WITH CONFIRMATION . DURING THE COURSE OF HEARING ON 22/10/2008 THE ASSESSEE COULD NOT FUR NISH THE EVIDENCES OF THE ABOVE PARTY BUT THE ASSESSEE VIDE ITS LETTER DATED: 10 TH NOVEMBER, 2008 HAS FURNISHED A LETTER BEING A CONFIRMATION FR OM NEW GRANGE GROUP LLC VIDE ITS LETTER DATED: 27-10-2008 IN THAT IT HAS BEEN STATED AS UNDER: WE HEREBY CONFIRM THAT WE HAVE PAID RS.10,00,000/- TO INDUSTRIAL DEVELOPMENT BANK OF INDIA, AHMEDABAD BY TELEGRAPHIC TRANSFER IN THE MONTH OF APRIL 2004 ON BEHALF OF SB JVON COM POUNDERS PRIVATE LIMITED AGAINST OUTSTANDING OF THEIR LOAN A CCOUNT ROUTED THROUGH SINGHANIA AND PARTNERS NEW DELHI. FROM THE ABOVE, IT IS SEEN THAT NEWGRANGE GROUP HAS PAID RS.10 LACS TO INDUSTRIAL DEVELOPMENT BANK OF INDIA AHMEDABAD T O MEET WITH THE LOAN IN APRIL 2004 WHICH IS PERTAINING TO ASSESSMEN T YEAR 2005-06. WHEREAS, THE ASSESSEE HAS SHOWN NEW UNSECURED LOAN OF RS.10 LACS FROM THE SAID PARTY AND SHOWN CREDITED IN ITS BOOKS OF ACCOUNTS OF THE YEAR UNDER CONSIDERATION. FOR THIS NEW UNSECURED LO AN THE ASSESSEE HAS NO EXPLANATION TO OFFER AND THE ASSESSEE HAS NO T PRODUCED ANY CONFIRMATION FOR THE SAID NEW LOAN OR ANY BANK ACCO UNT TO SHOW THE ENTRIES ETC. THEREFORE, THE UNSECURED LOAN OF THE A BOVE PARTY TAKEN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS IS NOT AT ALL PROVED AND THEREFORE, THE SAME REQUIRES TO BE ADDED TO THE TOTAL INCOME O F THE ASSESSEE COMPANY AS UNEXPLAINED CASH CREDIT FOR THE REASONS THAT IF ANY SUM IS FOUND CREDITED DIN THE BOOKS OF AN ASSESSEE THE ONU S IS ON HIM TO EXPLAIN AWAY THE SAID ENTRY. (126 ITR 663 ( P & H) MUNSHIRAM V/S CIT. ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 3 IT IS NECESSARY FOR THE ASSESSEE TO PROVE THE PRIMA FACIE THE TRANSACTION WHICH RESULTS IN A CASH CREDIT IN HIS BOOKS OF ACCO UNTS, SUCH PROOF INCLUDES PROOF OF IDENTITY OF HIS CREDITORS, THE CA PACITY OF THE CREDITOR TO ADVANCE THE MONEY AND LASTLY GENUINENESS OF THE TRA NSACTION. WHERE THE ASSESSEE ESTABLISHES ONLY IDENTITY IT IS AN UND ISCLOSED INCOME (114 ITR 689 CAL). GENUINENESS OF LOANS MEANS SOURCE OF LOAN, CAPACITY OF PERSON TO ADVANCE LOAN AND EVIDENCE OF THE FACT THA T THE LOAN WAS IN FACT GIVEN BY THE PERSON ON THAT DATE. LOAN RECEIVE D BUT SOURCES AND CAPACITY NOT PROVED IT IS TO BE ADDED (131 ITR 688 (CAL)). THEREFORE, THE ONUS ON ASSESSEE TO PROVE THE IDENTITY OF CREDITOR, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION WHICH IS SUPPORTED THE D ECISION REPORTED IN198 ITR 147 (KER) WHICH IS AFFIRMED BY THE HON SU PREME COURT REPORTED IN 201 ITR 23 (ST.). THUS THE ASSESSEE HAS FAILED TO FURNISH THE GENUINENESS OF THE ENTRIES WHICH HE MADE IN HIS BOO KS OF ACCOUNTS IN THE NAME OF NEWGRANGE. I AM THEREFORE SATISFIED THA T THE SUM OF RS.10,00,000/- WHICH IS THE SUM FOUND CREDITED IN T HE BOOKS MAINTAINED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AN D THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION OFFERED IS NOT FOUND SATISFACTORY, THE SUM SO CREDITED OF RS.10,00,000/- IS CHARGED TO INCOME TAX AS THE INCO ME OF THE ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEA R 2006-07 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNDER SEC TION 68 OF THE INCOME TAX ACT. PENALTY PROCEEDINGS UNDER SECTION 2 71(1)(C) ARE SEPARATELY INITIATED FOR CONCEALING THE PARTICULARS OF HIS INCOME AND/OR FURNISHING INACCURATE PARTICULARS OF HIS INCOME AGGRIEVED BY THIS ORDER ASSESSEE WENT IN APPEAL BEF ORE FIRST APPELLATE AUTHORITY, WHERE THE ASSESSEE FILED FOLLOWING ADDIT IONAL EVIDENCE:- 2. THE ONLY GROUND OF APPEAL IS IN RESPECT OF RS.1 0 LACS BROUGHT BY NEW GRANGE GROUP LLC (NGLLC), USA BEING FINANCIAL A ND TECHNICAL COLLABORATORS GROUP COMPANY, DEPOSITED WITH IDBI DU RING APRIL, 2004. IDBI WAS APPOINTED AS OPERATING AGENCY BY BIFR ADJU DICATING THE APPELLANT AS A SICK INDUSTRIAL UNIT UNDER SICA ACT, 1985 WITH EFFECT FROM 31 ST MARCH, 2001. THE SAID FOREIGN REMITTANCE WAS BROUG HT BY NGLLC WITH IDBI AS MANDATED BY BIFR AND DEPOSITED CHEQUES OF RS.10 LACS WITH IDBI AS OTS PROPOSAL EARNEST MONEY DEPOSIT. TH E SAID PROPOSAL WAS LATER ON REFUSED BY IDBI BY ITS LETTER DATED 7 TH APRIL, 2005 . IDBI THEREUPON UNILATERALLY APPROPRIATED THE SAID DEPOSI T RECEIVED FROM OVERSEAS GROUP COMPANY TOWARDS REPAYMENT OF ITS OVE RDUE LOAN OUTSTANDING FROM THE APPELLANT. THE APPELLANT PASSE D A JOUARNAL (ADJUSTMENT) ENTRY IN ITS BOOKS DURING THE PREVIOUS YEAR RECOGNIZING THE SAID APPROPRIATION OF DEPOSIT BY REDUCING IDBI LOAN OUTSTANDING AND CREDITING NGLLC AS A LOAN CREDITED FOR RS.10 LACS. THE APPELLANT HAD NOT RECEIVED THE SAID SUM DIRECTLY FROM ITS FOREIGN COLLABORATOR, BUT THE SAID LOAN WAS RECOGNIZED BY THE APPELLANT DURING TH E PREVIOUS YEAR AS ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 4 IDBI APPLIED OTS EARNEST MONEY DEPOSIT FROM NGLLC D URING APRIL, 2005 IN PART REPAYMENT OF OVERDUE TERM LOAN IDBI HA D GRANTED TO THE APPELLANT. IN HUMBLE OPINION OF THE APPELLANT, THE LEARNED AO HAS MADE THIS ADDITION AS UNEXPLAINED CREDIT UNDER SECTION 6 8 IS HIGHLY UNREASONABLE, HIGH-HANDED, PRIMARILY ON MISAPPRAISA L OF FACTS AND EVIDENCES ON RECORD AND WITHOUT AFFORDING REASONABL E FOLLOW-UP OPPORTUNITY TO THE APPELLANT OR ENQUIRY WITH THE LO AN CREDITOR AFTER LAST SUBMISSIONS FILED ON 10 TH NOVEMBER, 2008 AND THE ASSESSMENT ORDER PASSED ON11TH DECEMBER,2008. 3. WE ARE ENCLOSING PAPER BOOK NO. II IN DUPLICATE WHICH INCLUDES (A) FURTHER CERTIFICATE DATED 12 TH JANUARY, 2009 SINCE OBTAINED FROM NGLLC EXPRESSLY CONFIRMING ONLY ONE LOAN TRANSACTION AND ALSO OUTSTANDING BALANCE CONFIRMATION AS AT THE PREVIOUS YEAR END (B ) IDBI LETTER DATED 7 TH APRIL, 2008 EVIDENCING STATUS OF RS.10 LACS AS EARN EST MONEY DEPOSIT HELD BY IDBI AT LEAST UPTO 7 TH APRIL,2005 AND (C) JOURNAL VOUCHER PASSED BY THE APPELLANT EVIDENCING RECOGNITION OF THIS LOA N LIABILITY UNDER CONSIDERATION BY THE APPELLANT ON 31 ST MARCH,2006. 4. AS TO PRODUCTION OF ADDITIONAL EVIDENCE YOUR HON OURS KIND ATTENTION IS DRAWN TO RULE 46A IN RELATION TO PRODUCTION OF A DDITIONAL EVIDENCE BEFORE COMMISSIONER OF INCOME TAX (APPEALS) WHICH R EADS AS UNDER: SECTION 46A (1) THE APPELLANT SHALL NOT BE ENTITLE D TO PRODUCE BEFORE THE COMMISSIONER (APPEALS) ANY EVIDENCE WHET HER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HI M DURING THE COURSE OF PROCEEDINGS BEFORE THE ASSESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES VIZ. (A) WHERE THE AO HAS REFUSED TO ADMIT EVIDENCE WHIC H OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE AO; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEV ANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINS T WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO A DDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 5 (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE COMMISSIONER OF INCOME TAX (APPEALS) RECORDS IN WRI TING THE REASONS FOR ITS ADMISSION. (3) THE COMMISSIONER OF INCOME TAX (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UN LESS THE AO HAS BEEN ALLOWED A REASONABLE OPPORTUNITY. (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS - EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITN ESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT (4) NOTHING CONTAINED IN THIS RULE SHALL EFFECT THE POWER OF THE COMMISSIONER OF INCOME TAX (APPEALS) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS TO ENABLE HIM TO DISPOSE OF THE APPEAL OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THEISM OR PENALTY (WHETHER ON HI S OWN MOTION OR ON THE REQUEST OF THE AO UNDER CLAUSE (A) OF SUB- SECTION (1) OF SECTION 251 OF THE IMPOSITION OF PEN ALTY UNDER SECTION 271 SIMILARLY, ALMOST IDENTICAL RULE 29 OF THE INCOME -TAX APPELLATE TRIBUNAL RULES, 1963 FRAMED WHICH READS AS UNDER: RULE 29: THE PARTIES TO THE APPEAL SHALL NOT BE EN TITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENT ARY BEFORE THE TRIBUNAL, BUT IF THE TRIBUNAL REQUIRES A NY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMIN ED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDE RS OR FOR ANY OTHER SUBSTANTIAL CAUSE, OR IF THE INCOME TAX AUTHO RITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPP ORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRI BUNAL FOR REASONS TO BE RECORDED, MAY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. (D) REGARDING INTERPRETATION OF RULE 29 OF APPELLAT E TRIBUNAL RULES, WHICH IS EQUALLY APPLICABLE TO RULE 46A OF I NCOME TAX RULES, LANDMARK DECISION OF GUJART HIGH COURT RENDE RED IN THE CASE OF PARI MANGALDAS GIRDHARDAS REPORTED IN (1977) CTR (GUJ) 647 MAY KINDLY BE TAKEN INTO ACCOUNT FOR READ Y REFERENCE. SEVEN PRINCIPLES ENUMERATED BY THE HON. HIGH COURT OF GUJARAT IN ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 6 THE SAID JUDGMENT ARE REPRODUCED IN PARA 48 OF THIS JUDGMENT WHICH IS STATED AS FOLLOWS FOR READY REFERENCE: PARA A 48: THE PRINCIPLES, WHICH EMERGE FROM THE D ECIDED CASES ARE, AS EARLIER SATED, APPLICABLE EVEN IN REL ATION TO THE EXERCISE OF POWER UNDER THE FIRST PART OF RULE 29 AND ACCORDINGLY, IN THE CONTEXT OF EXERCISE OF SUCH POW ER THE FOLLOWING PRINCIPLES SHOULD BE BORNE IN MIND: (1) THE DISCRETION GIVEN TO THE TRIBUNAL TO RECEIVE AND ADM IT ADDITIONAL EVIDENCE IS NOT AN ARBITRARY ONE BUT IS A JUDICIAL ONE CIRCUMSCRIBED BY THE LIMITATIONS SPECIFIED IN R ULE 29; (2) . THE TRIBUNAL HAS THE POWER TO ALLOW ADDITIONAL EVIDENCE IF IT REQUIRES SUCH EVIDENCE TO ENABLE IT TO PASS ORDERS, THAT IS TO SAY, WHEN IT FINDS THAT THEE IS ANY LACUNA OR DEFECT WHICH NEEDS TO BE FILLED UP SO THAT IT CO ULD PRONOUNCE AN ORDER; (3) THE TRIBUNAL HAS POWER TO ALLOW ADDITIONAL, EVIDENCE ALSO IF IT REQUIRES SUCH EVIDE NCE FOR ANY OTHER SUBSTANTIAL CAUSE, THAT IS TO SAY, EVEN IN CA SES WHERE THE TRIBUNAL FINDS THAT IT IS ABLE TO PRONOUNCE JUD GEMENT ON THE SATE OF THE RECORD AS IT IS, IT MAY STILL ALLOW ADDITION\AL EVIDENCE TO BE BROUGHT ON RECORD IF IT CONSIDERS TH AT IN THE INTEREST OF JUSTICE SOMETHING WHICH REMAINS OBSCURE SHOULD BE FILED UP SO THAT IT CAN PRONOUNCE ITS ORDER IN A MORE SATISFACTORY MANNER; (4) SUCH REQUIREMENT IN EITHER CASE MUST BE OF THE TRIBUNAL AND IT WILL NOT ARISE ORDIN ARILY UNLESS SOME INHERENT LACUNA OR DEFECT BECOMES APPARENT ON A EXAMINATION OF THE EVIDENCE AND THEREFORE, THE LEGI TIMATE OCCASION FOR THE EXERCISE OF DISCRETION UNDER RULE 29 IS NOT BEFORE THE APPEAL IS HEARD BUT WHEN ON AN EXAMINATI ON OF EVIDENCE AS IT STANDS, SOME INHERENT LACUNA OR DEFE CT BECOMES APPARENT; (5) SUCH DEFECT MAY BE POINTED OUT BY A PARTY OR A PARTY MY MOVE THE TRIBUNAL TO SUPPLY THE DEFECT MAY BE POINTED OUT BY A PARTY OR A PARTY MAY MOVE T HE TRIBUNAL TO SUPPLY THE DEFECT OR THE TRIBUNAL ITSEL F MAY ACT SUO MOTTO IN THE MATTER (6) IF THE ADDITIONAL EVIDENCE IS ALLOWED TO BE ADDUCED CONTRARY TO THE PRINCIPLES GO VERNING THE RECEPTION OF EVIDENCE, IT WOULD BE A CASES OF I MPROPER EXERCISE OF DISCRETION AND THE ADDITIONAL EVIDENCE SO BROUGHT ON RECORD WILL HAVE TO BE IGNORED AND (7) A FORTIORI, IF THE DECISION NOT TO ALLOW ADDITION\AL EVIDENCE I S ARRIVED AT UNREASONABLY OR CAPRICIOUS OR BY IGNORING RELEVANT FACTS AND ADOPTING AN UNJUDICIAL APPROACH, THEN THE EXERC ISE OF DISCRETION WOULD, IN LAW, BE WRONGFUL AND IMPROPER (E) THUS, THE SAID PAPER BOOK NO. II IS FILED WITH A VIEW TO FILL IN ANY LACUNA OR DEFECT; OR ANY OTHER SUBSTANTIAL CAUS E TO ENABLE TO ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 7 ASSESSEE CORRECT TOTAL INCOME, THE SAME MAY BE ALLO WED TO BE PRODUCED IN THE COURSE OF APPELLATE PROCEEDINGS. LD. CIT(APPEALS) AFTER GIVING OPPORTUNITY TO ASSESS ING OFFICER ADMITTED THIS ADDITIONAL EVIDENCE AND FORWARDED THE SAME FOR AO'S COMMENT AND AFTER OBTAINING THE REMAND REPORT FROM AO DELETED THIS AD DITION BY OBSERVING AS UNDER:- 5. I HAVE GONE THROUGH THE FACTS OF THE CASE AND T HE SUBMISSION MADE BY THE APPELLANT FILED THE ADDITIONAL EVIDENCE FOR ADMISSION BUT CONSIDERING THE FACTS OF THE CASE AND THE ISSUE IN VOLVED, SUCH EVIDENCES ARE IN THE AND AS PER SUBMISSION MADE BY APPELLANT, THERE IS NO DISPUTE ABOUT THE FACT THAT THE APPELLANT COMPAN Y BEING A BIFR COMPANY ON ACCOUNT OF RESTRUCTURING PROPOSAL BY THE COORDINATING AUTHORITY IDBI WAS IN RECEIPT OF RS.10 LACS AS JV C OLLABORATES FROM NEW GRANGE GROUP LLC(USA). THIS, RS.10 LACS WAS WENT TH ROUGH BANKING CHANNEL AND AFTER RBI APPROVAL VIDE A/C. PAYEE CHEQ UE DATED 28/04/2004 DRAWN ON AABN AMRO BANK. BUT ON ACCOUNT OF REFUSAL OF RESTRUCTURING PROPOSAL BY IDBI, THIS EARNEST MONEY WAS ADJUSTED BY IDBI AGAINST THE DUES FROM APPELLANT AND FOR THIS NECESS ARY CERTIFICATION AND CONFIRMATION WERE SUBMITTED BY RELEVANT PARTIES. SI NCE, THE REFUSAL OF SUCH PROPOSAL WAS DATED 07/04/2005, THE APPELLANT P ASSED NECESSARY ENTRY TREATING THE SAME AS LOAN DURING THE PREVIOUS YEAR RELEVANT TO AY 2005-06. THE AO TREATED THIS JOURNAL VOUCHER ENTRY AS CREDITED IN THE BOOKS OF ACCOUNT AND REJECTED THE APPELLANTS EXPLA NATION THAT THE SAME WAS EARNEST DEPOSIT SENT BY JV COLLABORATOR ON 24/0 4/2004, ADJUSTED BY IDBI AGAINST APPELLANTS DUE AND DISALLOWED THE SAM E U/S. 68 OF THE ACT AS UNEXPLAINED CREDIT. HOWEVER, NOW THE FACTS AND E VIDENCES ARE CRYSTAL CLEAR SUPPORTED BY VARIOUS CONFIRMATION FRO M ALL THE PARTIES THAT SUCH AMOUNT WAS RECEIVED THROUGH BANKING CHANNEL AS EARNEST MONEY IN RESPECT OF RESTRUCTURING PROPOSAL AND IDBI AFTER REJECTION OF SUCH PROPOSAL ADJUSTED THIS AMOUNT AGAINST DUES OF APPEL LANT FOR WHICH APPELLANT PASSED AN ENTRY IN ITS BOOKS TREATING THE SAME AS LOAN, HENCE THE NAMES AS WELL AS LINK FOR SOURCE OF RS.10 LAC L OAN IS EXPLAINED AND ESTABLISHED. THE AO THEREFORE IS NOT JUSTIFIED IN M AKING SUCH ADDITION U/S.68 OF THE ACT. EVEN OTHERWISE ALSO CONSIDERING THE FACTS AND EXPLANATION SUBMITTED BY THE APPELLANT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, SUCH ADDITION CANNOT BE MADE U/S.68 OF THE ACT WHEN NAME, ADDRESS, BANK DETAILS ETC., OF THE CREDITOR I S GIVEN BY THE APPELLANT AS PER ESTABLISHED LEGAL PROPOSITION U/S. 68 OF THE ACT. THE AO IS DIRECTED TO DELETE SUCH ADDITION. THE GROUND OF APPEAL OF THE APPELLANT IS ALLOWED. THE APPELLANT GETS RELIEF OF RS.10 LAC. ITA NO.2781/AHD/2010 A.Y. 2006- 07 ACIT (OSD) CIR-8, ABD V. SBJ VON COMPOUNDERS PVT. LTD . PAGE 8 SINCE THE LD. CIT(APPEALS) HAS OBTAINED THE COMMENT S OF ASSESSING OFFICER ON THE ADDITIONAL EVIDENCE FILED BEFORE HIM BY THE ASSESSEE THERE IS NO VIOLATION OF RULE 46A OF THE IT RULES IN THIS CASE. WE FURTHER FIND THAT NEITHER THE ASSESSING OFFICER HAS GIVEN ANY ADVERSE COMMENT ON THE ADDITIONAL EVIDENCE RELIED BY THE ASSESSEE BEFORE THE LD. CIT( A) NOR THE REVENUE HAS REBUTTED THE ABOVE FINDING OF THE LD. CIT(APPEALS) AT THE TIME OF HEARING BEFORE US. THEREFORE, WE ARE NOT INCLINED TO INTERF ERE WITH THE ORDER PASSED BY LD. CIT(APPEALS) AND THE SAME IS HEREBY UPHELD. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11/03/2011 SD/- SD/- (A.N.PHAUJA) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 11/03/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XIV, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD