SHM SHIPCARE, MUMBAI V. JCIT RG 17(1), MUMBAI

ITA 3018/MUM/2013

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0243 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 18-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G PANSARILD
• Assessee Lawyers: DINESH SHROFFLD
• Keywords: Unexplained cash credit; Business income; Services rendered outside India; Additional evidence; Permanent establishment; Onus to prove
• Section: 40A(3); 143(3); 40(a)(ia); 68

Judgement Text

ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE HONBLE SHRI JOGINDER SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.3018/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) M/S. SHM SHIPCARE 1 ST LEDGET COTTON PRESS 1 ST MAGAZINE STREET DARUKHANA, MAZGAON MUMBAI-400 010 / VS. JT. COMMISSIONER OF INCOME TAX-RANGE-17(1) ROOM NO.405 PIRAMAL CHAMBERS LOWER PAREL, MUMBAI-400 012 ./ ./PAN/GIR NO. AARFS-8910-L ( /APPELLANT ) : ( / RESPONDENT ) & ./I.T.A. NO.3466/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) JT . COMMISSIONER OF INCOME TAX-RANGE-17(1) ROOM NO.405 PIRAMAL CHAMBERS LOWER PAREL, MUMBAI-400 012 / VS. M/S. SHM SHIPCARE 1 ST LEDGET COTTON PRESS 1 ST MAGAZINE STREET DARUKHANA, MAZGAON MUMBAI-400 010 ./ ./PAN/GIR NO. AARFS-8910-L ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI DINESH SHROFF-LD. AR REVENUE BY : SHRI D.G. PANSARI- LD. DR / DATE OF HEARING : 25/10/2018 / DATE OF PRONOUNCEMENT : 11/12/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 2 1. THESE ARE CROSS-APPEALS FOR ASSESSMENT YEAR [AY] 2009-10 WHICH CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-29, MUMBAI, [CIT(A)], APPEAL NO.CIT(A)-29/RG-17/174 / 11-12 DATED 19/02/2013 ON DIFFERENT GROUNDS OF APPEAL. THE GROUNDS URGED BY ASSESSEE ARE AS FOLLOWS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.6,23,673/- U/S. 40(A)(IA) FOR NON DE DUCTION OF TAX DESPITE THE FACT AND DETAIL ON RECORD WHICH REFLECTS PAYMENTS W ERE MADE TO GOVERNMENT AGENCIES/LOCAL AUTHORITIES. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN COMING TO THE CONCLUSION THAT THE APPELLANT HAS CHANGED ITS STAND , DURING THE ASSESSMENT IT WAS CLAIMED THAT NONE OF THE PAYMENTS WERE ABOVE RS .20000/- TO SINGLE PARTY AND IN APPEAL THE APPELLANT CLAIMED THAT PAYM ENT IS MADE TO GOVERNMENT AGENCIES/LOCAL AUTHORITIES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION DUE TO UNEXPLAINED CREDIT U/S.68 AGGREGATI NG TO RS.22,00,000/- TO TOTAL INCOME FOR WANT OF EVIDENCES TO PROVE IDENTIT Y, CREDIT WORTHINESS AND GENUINENESS OF LOAN TRANSACTIONS. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THE CONTENTION THAT CONFIRMATIONS, PAN CARD IN MOST OF THE CASES. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS.73,725/-ON ACCOUNT OF INTEREST PAID TO THE SAID PARTIES DUE TO GENUINENESS OF THE LOAN TRANSACTIONS COULD NOT BE P ROVED . 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE APPELLANT HAD DEDUCTED TAX DEDUCTED AT SOURCES WHERE-EVER APPLICABLE ON THE INTEREST PAID TO THE SAID PARTIES. THE GROUNDS URGED BY REVENUE READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.51,66,919/ - OUT OF TOTAL ADDITION OF RS.58,20,505/- MADE U/S. 40(A)(IA) ON ACCOUNT OF NO N DEDUCTION OF TDS ON PAYMENT FOR TRAINING FEES, ROYALTY AND SURVEY FEES IGNORING THE DECISION OF HON'BLE ITAT, MUMBAI IN THE CASE OF SATELLITE TELEV ISION ASIA REGION LTD. VS. DCIT (2006) 99 ITD 914 (MUM),WHICH HOLDS THAT SECTI ON 195 OF THE IT ACT LAYS EMPHASIS ON CHARGEABILITY RATHER THAN SOURCE O F PAYMENT.' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,34,75,00 0/- OUT OF TOTAL ADDITION OF RS.2,56,75,000/- MADE U/S 68 AND CORRESPONDING INTE REST OF RS.73,725/- OUT OF TOTAL INTEREST OF RS.10,60,900/- BY ACCEPTING TH E FRESH EVIDENCES IN CONTRAVENTION OF RULE 46A AND DIRECTING AO TO COLLE CT EVIDENCES DIRECTLY FROM THE LENDERS WITHOUT APPRECIATING THE FACT THAT SUFF ICIENT OPPORTUNITY WAS GIVEN DURING ASSESSMENT PROCEEDINGS AND THE LOAN CONFIRMA TIONS PRODUCED BY THE ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 3 ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S BEFORE THE AO WERE HAVING VARIOUS FUNDAMENTAL OMISSION/ MISTAKES SU CH AS INCOMPLETE ADDRESS AND WITHOUT PA /SIGNATURE OF TH E LENDERS AND THE ASSESSEE IN SPITE OF SUFFICIENT OPPORTUNITI ES FAILED TO RECTIFY THE SAME AND ESTABLISH THE GENUINENESS LOANS AND CREDIT WORTHINE SS OF THE LOANEES.' 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DIRECTING TO DELETE THE ADDITION OF RS .19,52,521/- MADE U/S. 40A(3) BY ACCEPTING THE FRESH SUBMISSION IN CONTRAV ENTION OF RULE 46A.' THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. JT. COMMISSIONER OF INCOME TAX-17(1), MUMBAI [AO] U/S. 143(3) ON 29/12/2011 WHEREIN THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS.752. 71 LACS AFTER CERTAIN ADDITIONS AND DISALLOWANCES AS AGAINST RETU RNED INCOME OF RS.412.68 LACS E-FILED BY THE ASSESSEE ON 29/09/2009. THE ASSESSEE BEING RESIDENT FIRM WAS STATED TO BE ENGAGED IN THE BUSINESS OF SUPPLYING & SERVICING OF FIRE FIGHTING AND LIFE SAV ING EQUIPMENTS ON BOARD SHIPS. AS EVIDENT FROM RESPECTIVE GROUNDS OF APPEAL, FOLLO WING ADDITIONS MADE DURING QUANTUM ASSESSMENT PROCEEDINGS ARE THE SUBJECT MATTER OF PRESENT APPEAL BEFORE US:- NO. NATURE OF ADDITION AMOUNT (RS.) 1. ADDITION FOR WANT OF TDS U/S 40(A)(I) 52,20,505/ - 2. UNEXPLAINED CASH CREDIT U/S 68 2,56,75,000/- 3. INTEREST EXPENSES 10,60,900/- 4. ADDITION U/S 40A(3) 19,52,521/- 2.1 FACTS GERMANE TO THE ISSUE ARE THAT DURING ASSE SSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE MADE CE RTAIN PAYMENTS ON ACCOUNT OF TRAINING FEES, SURVEY FEES AND ROYALTY PAYMENTS AS PER THE FOLLOWING DETAILS:- NO. NATURE OF PAYMENT AMOUNT (RS.) 1. TRAINING FEES RS.24.52 LACS 2. SURVEY FEES RS.36.57 LACS 3. ROYALTY PAYMENTS RS.27.13 LACS ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 4 THE ASSESSEE VIDE LETTER DATED 20/12/2011 SUBMITTED THAT OBLIGATION TO DEDUCT TAX ARISES ONLY WHEN THE RECIPIENT HAS A TAX LIABILITY IN INDIA. IT WAS FURTHER SUBMITTED THAT TRAINING FEES WAS PAID T O PERSONS WHO HAD NO BUSINESS ESTABLISHMENT IN INDIA AND THE PAYMENT WAS ON ACCOUNT OF ENGINEERS BEING TRAINED AND APPROVED BY MANUFACTURE RS FOR WHICH THE ASSESSEE WAS AUTHORIZED SERVICE PROVIDER. THE PAYME NT ON ACCOUNT OF SURVEY FEES WERE STATED TO BE MADE ON THE STRENGTH OF NIL RATE CERTIFICATE. REGARDING ROYALTY PAYMENT, IT WAS SUBMITTED THAT FO REIGN PARTY DID NOT HAVE PERMANENT ESTABLISHMENT IN INDIA AND THE AFORE SAID PAYMENT INCLUDED COMMISSION PAID BY THE ASSESSEE TO NON-RES IDENT FOR SERVICES RENDERED OUTSIDE INDIA AND THEREFORE THE INCOME IN THAT RESPECT DID NOT ACCRUE OR ARISE IN INDIA AND THEREFORE, DO NOT WARR ANT DEDUCTION OF TAX AT SOURCE. HOWEVER, NOT CONVINCED, LD. AO AFTER PERUSA L OF STATUTORY PROVISIONS OF SECTION 5 & SECTION 9, AND AFTER RELY ING UPON THE DECISION OF MUMBAI TRIBUNAL IN THE CASE OF SATELLITE TELEVISION ASIA REGION LTD VS. DCIT CONCLUDED THAT THE AFORESAID INCOME ACCRUED / AROS E IN INDIA AND THEREFORE, REQUIRED DEDUCTION OF TAX AT SOURCE. FINALLY, NOT CONVINCED WITH ASSESSEES EXPLANATION, TRAINING FEES OF RS.24 .52 LACS, SURVEY FEES TO THE EXTENT OF RS. 6.53 LACS AND ROYALTY PAY MENTS OF RS.27.13 LACS AGGREGATING IN ALL TO RS.52.20 LACS WERE DISAL LOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 2.2 THE SECOND ADDITION OF CASH CREDIT U/S 68 STEM FROM THE FACT THAT THE ASSESSEE OBTAINED UNSECURED LOANS OF RS.256.75 LACS FROM AS MANY AS 106 PARTIES AND SUBMITTED PARTIAL DOCUMENTARY EV IDENCES TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE S AME AS REQUIRED BY ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 5 LAW. THE COMPLETE DETAIL OF THESE LOANS AND DOCUMEN TARY EVIDENCES SUBMITTED BY THE ASSESSEE TO SUBSTANTIATE THE SAME HAS BEEN EXTRACTED IN PARA-6.4 OF THE QUANTUM ASSESSMENT ORDER. A PERUSAL OF THE S AME REVEAL THAT ALTHOUGH THE ASSESSEE HAD PROVIDED ADDR ESSES AND PERMANENT ACCOUNT NUMBER OF MOST OF THE LENDERS, HO WEVER, LOAN CONFIRMATIONS, FINANCIAL STATEMENTS ETC. WERE NOT F ILED IN LARGE NUMBER OF CASES. IT WAS ALSO NOTED THAT 38 LOAN CONFIRMATIONS PROVIDED BY ASSESSEE WERE NOT EVEN SIGNED BY THE LENDER BUT THE Y WERE STATED TO BE SIGNED ON BEHALF OF THE LENDER WHICH LED THE LD. AO TO CONCLUDE THAT EVEN THE IDENTITY OF SUCH CASES COULD NOT BE PROVED BY THE ASSESSEE. THE LD. AO ALSO NOTED COMMONALITY IN ADDRESSES IN M ANY CASES. DESPITE BEING OFFERED SEVERAL OPPORTUNITIES, THE AS SESSEE FAILED TO SUBSTANTIATE THE SAME CONCLUSIVELY. FINALLY, THE OV ERALL FACTUAL MATRIX LED THE LD. TO DOUBT THE GENUINENESS OF THESE LOAN TRAN SACTIONS AND ACCORDINGLY, THE SAME WERE ADDED TO THE INCOME OF T HE ASSESSEE AS CASH CREDIT U/S 68. CONSEQUENTLY, THE INTEREST OF R S.10.60 LACS PAID AGAINST THESE LOANS WAS ALSO DISALLOWED. 2.3 THE THIRD DISALLOWANCE OF CASH PAYMENT U/S 40A( 3) ARISES FROM THE FACT THAT THE ASSESSEE MADE CASH PAYMENT AGGREGATIN G TO RS.19.52 LACS IN VIOLATION OF SECTION 40A(3). THE DETAILS OF THE PAYMENTS HAVE BEEN EXTRACTED AT PARA-8.2 OF THE QUANTUM ASSESSMENT ORDER. THE SAME HAS BEEN DISALLOWED IN TERMS OF SECTION 40A(3). 3.1 AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDE R DATED 19/02/2013 WHEREIN THE ASSESSEE EXPLAINING THE NATURE OF ROYAL TY PAYMENTS SUBMITTED THAT THE SAME REPRESENTED SERVICE CHARGES / FEES PAID TO ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 6 FOREIGN COMPANY WHO HAD NO PERMANENT ESTABLISHMENT IN INDIA AND THE SERVICES WERE PROVIDED FROM OUTSIDE INDIA. THE AFOR ESAID PAYMENT, AS PER THE SUBMISSIONS, WERE NOT ROYALTY PAYMENTS WITH IN THE MEANING OF EXPLANATION-2 TO SECTION 9(1)(VI) AND THEREFORE, DI D NOT REQUIRE DEDUCTION OF TAX AT SOURCE. WITH REGARD TO TRAINING FEES, IT WAS SUBMITTED THAT THE EXPENDITURE WAS IN THE NATURE OF TRAINING IMPARTED TO THE ASSESSEES PERSONNEL ON THEIR VISIT TO FOREIGN SUPPLIERS FOR U NDERSTANDING THE BASIC FEATURE OF THE PRODUCT SUPPLIED BY THEM WHICH THEN ENABLES THE SKILLED PERSONNEL TO PERFORM THE SERVICES IN INDIA IN A MOR E QUALITATIVE MANNER. THUS THE AFORESAID PAYMENT, AS PER THE SUBMISSIONS, WERE IN THE NATURE OF TRAINING FEES TO COVER THE EXPENSES AND OTHER CH ARGES AND THEREFORE, NOT COVERED U/S 9(1)(VII). REGARDING SURVEY FEES, I T WAS SUBMITTED THAT THE LIFE SAVINGS EQUIPMENTS WERE REQUIRED TO BE SER VICED PERIODICALLY TO ENSURE THE VALIDITY OF THE USE OF THE EQUIPMENT WHI CH WAS MANDATORY REQUIREMENT. ON COMPLETION OF SERVICE A CERTIFICATE WAS TO BE OBTAINED REGARDING THE VALIDITY WHICH WAS TO BE PURCHASED FR OM THE MANUFACTURERS AT A COST. THEREFORE, THE PURCHASE OF CERTIFICATE W AS NOT IN THE NATURE OF FEES FOR TECHNICAL OR PROFESSIONAL SERVICES IN TERM S OF SECTION 9(1)(VII) AND THE CONSTITUTE BUSINESS INCOME FOR THE FOREIGN SUPPLIER, NOT TAXABLE IN INDIA. IT WAS ALSO POINTED OUT THAT EVEN OTHERWI SE THE PAYMENT TO EACH SUPPLIER, BEING LESS THAN THRESHOLD LIMIT OF RS.20, 000/- AS PRESCRIBED BY SECTION 194J, DID NOT REQUIRE DEDUCTION OF TAX AT S OURCE. THE LD. CIT(A), RELYING UPON THE STAND OF ITS PREDECESSOR IN ASSESS EES OWN CASE FOR AY 2008-09, DELETED THE ADDITIONS ON ACCOUNT OF ROYALT Y PAYMENTS AND TRAINING FEES PAID BY THE ASSESSEE. HOWEVER, REGARD ING SURVEY FEES, IT WAS NOTED THAT THE ASSESSEE TOOK DIFFERENT STAND BY INITIALLY SUBMITTING ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 7 THAT THE PAYMENT TO EACH SUPPLIER WAS LESS THAN RS. 20,000/- BUT LATER ON CLAIMED THAT THE AFORESAID PAYMENT WERE MADE TO GOV ERNMENT AND LOCAL AUTHORITIES AND THEREFORE, TAX WAS NOT REQUIRED TO BE DEDUCTED AGAINST THE SAME. THEREFORE, LD. CIT(A), REJECTING THE STAN D OF ASSESSEE, CONFIRMED THE ADDITION OF RS.6.23 LACS ON ACCOUNT O F SURVEY FEES. 3.2 AGAINST ADDITION OF CASH CREDIT, THE ASSESSEE S UBMITTED THAT THE LENDERS WERE RELUCTANT TO PART WITH THE DESIRED INF ORMATION AND RAISED A PLEA THAT SUMMONS BE ISSUED TO THE CONCERNED LENDER TO OBTAIN THE DESIRED INFORMATION. THE ADDITIONAL EVIDENCES WERE ALSO SUBMITTED TO SUBSTANTIATE FEW LOAN CREDITORS. ACCORDINGLY, THE M ATTER WAS REMANDED BACK TO LD. AO TO CONSIDER THE ADDITIONAL EVIDENCES AND CALL FOR NECESSARY DETAILS FROM THE SAID LOAN PARTIES AS PER ASSESSEES REQUEST AND EXAMINE THEIR CREDITWORTHINESS AND GENUINENESS. HOWEVER, LD. AO, WITHOUT EXAMINING A SINGLE PARTY AS DIRECTED, OBJEC TED TO ADMISSION OF ADDITIONAL EVIDENCES WHICH LED THE LD. FIRST APPELL ATE AUTHORITY TO ADMIT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE KEEP ING IN VIEW THE FACT THAT THE ASSESSEE WAS GRANTED INADEQUATE TIME FRAME TO COLLECT THE REQUISITE INFORMATION FROM THE VARIOUS LENDERS. WHI LE DOING SO, THE ASSESSEE WAS DIRECTED TO PROVE THE THREE INGREDIENT S VIZ. IDENTITY, CAPACITY AND CREDITWORTHINESS OF THE LENDERS WITH S UPPORTING DOCUMENTS INCLUDING PAN, CONFIRMATION LETTERS, BANK STATEMENT S AND INCOME TAX RETURNS DETAILS ETC. UPON PERUSAL OF DETAILS FILED BY THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE 20 LOAN CREDITORS AGGREGATING TO RS.22 LACS, THE DETAILS OF WHICH HAV E BEEN EXTRACTED IN PARA 7.11 OF THE IMPUGNED ORDER. HOWEVER, THE ASSESSEE, IN TH E OPINION OF LD. CIT(A), WAS ABLE TO PROVIDE SUFFICIENT DOCUM ENTARY EVIDENCES WITH ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 8 RESPECT TO BALANCE LOAN CREDITORS AND THEREFORE, TH E ADDITION WITH RESPECT TO THOSE CREDITORS DESERVED TO BE DELETED. FINALLY, THE ADDITION TO THE EXTENT OF RS.22 LACS AGAINST 20 CREDITORS AND CORRE SPONDING INTEREST AGAINST THE SAME AMOUNTING TO RS.73,725/- WAS CONFI RMED WHEREAS THE BALANCE ADDITIONS WAS DELETED. 3.3 AGAINST ADDITION U/S 40A(3), THE ASSESSEE POINT ED OUT THAT CONSOLIDATED ENTRIES IN THE LEDGER ACCOUNT WAS MADE FROM PETTY CASH / EXPENSE REGISTERS FOR EXPENDITURE INCURRED ON DIFFE RENT DATES AND THEREFORE, THERE WAS NO VIOLATION OF SECTION 40A(3) . IT WAS ALSO SUBMITTED THAT FEW PAYMENTS WERE MADE THOROUGH BANKING CHANNE LS. THE LD. CIT(A), BY OBSERVING THAT LD. AO FAILED TO CALL FOR FURTHER DETAILS FROM THE ASSESSEE IN THIS REGARD, DELETED THE ADDITIONS. 3.4 AGGRIEVED BY THE AFORESAID STAND OF FIRST APPEL LATE AUTHORITY, THE ASSESSEE AS WELL AS REVENUE IS UNDER APPEAL BEFORE US ON DIFFERENT GROUNDS. THE ASSESSEE IS AGGRIEVED BY CONFIRMATION OF ADDITION AGAINST CASH CREDIT AND CORRESPONDING INTEREST ON THOSE CAS H CREDIT AND ADDITION ON ACCOUNT OF SURVEY FEES WHEREAS THE REVENUE IS AGGRIEVED BY RELIEF PROVIDED BY FIRST APPELLATE AUTHORITY AGAINST VARIO US QUANTUM ADDITIONS AS MADE BY LD. AO. 4.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. SO FAR AS THE ADDITION ON ACCOUNT OF TRAINING FEE & ROYALTY PAYMENT IS CONCERNED, BOTH THE REPRESENTATIVES CONVERGE ON THE POINT THAT THE ISSUE WAS RECURRING IN NATURE AND THE SAME HAS ALREADY BEEN ADJUDICATED IN ASSESSEES FAVOR BY THE TRIBUNAL FOR OTHER AYS, THE DETAILS OF WHICH COULD BE TABULATED IN THE FOLLOWING MANNER :- NO. ITA NO. ORDER DATED AY ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 9 1. ITA NO. 1047/MUM/2013 10/02/2016 2008-09 2. ITA NO. 14/MUM/2015 24/11/2016 2010-11 3. ITA NO. 5001/MUM/2016 14/05/2018 2012-13 THE COPIES OF THE AFORESAID ORDERS HAVE BEEN PLACED ON RECORD. ALL THESE ORDERS ARE SUBSEQUENT TO THE IMPUGNED ORDER. UPON P ERUSAL, WE FIND THAT THE ORDER FOR 2012-13 RELIES UPON THE ORDERS FOR AY 2008-09 & 2010-11 WHEREAS THE ORDER FOR 2010-11 RELIES UPON THE ORDER FOR 2008-09. THE GROUNDS RAISED BY REVENUE IN THOSE YEARS ARE IDENTI CAL TO GROUNDS RAISED BEFORE US. NOTHING ON RECORD SUGGEST THAT THE AFORE SAID DECISIONS HAVE BEEN OVERRULED BY ANY HIGHER JUDICIAL AUTHORITY. NO THING ON RECORD SUGGEST ANY CHANGE IN MATERIAL FACTS AND CIRCUMSTAN CES. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE CONFIRM THE STA ND OF FIRST APPELLATE AUTHORITY IN DELETING THE ADDITION ON ACCOUNT OF TRAINING FEES & ROYALTY PAYMENTS. THE PAYMENT ON ACCOUNT OF SURVEY FEES HAS BEEN CONFIRMED BY THE FIRST APPELLATE AUTHORITY IN THE IMPUGNED AY . HOWEVER, THE AFORESAID PAYMENT MADE BY ASSESSEE IN AY 2008-09 AS WELL AS IN AY 2012-13 IS ALSO COVERED IN THE GROUNDS RAISED BY TH E REVENUE FOR THOSE YEARS WHEREIN THE TRIBUNAL HAS CONFIRMED THE DELETI ON OF QUANTUM ADDITION BY FIRST APPELLATE AUTHORITY. THIS BEING T HE CASE, THE AFORESAID ADDITION ON ACCOUNT OF SURVEY FEES ALSO STANDS DELETED. THE GROUNDS RAISED BY ASSESSEE, IN THIS REGARD, STANDS ALLOWED WHEREAS GROUNDS RAISED BY REVENUE STANDS DISMISSED. 4.2 SO FAR AS THE QUANTUM ADDITION OF CASH CREDIT U /S 68 IS CONCERNED, WE FIND THAT THE ASSESSEE OBTAINED LOAN AGGREGATING TO RS.256.75 LACS FROM AS MANY AS 106 PARTIES AND WAS UNDER AN OBLIGA TION TO PROVE THE IDENTITY, GENUINENESS & CREDITWORTHINESS OF THESE P ARTIES BEFORE THE ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 10 REVENUE AUTHORITIES WITH DOCUMENTARY EVIDENCES. THE ASSESSEE, DURING ASSESSMENT PROCEEDINGS, FAILED TO PROVIDE SUFFICIEN T DOCUMENTARY EVIDENCES TO PROVE THE SAME. FROM THE DETAILS EXTRA CTED IN PARA-6.4 OF THE QUANTUM ASSESSMENT ORDER, IT EMERGES THAT THE A SSESSEE FAILED TO PROVIDE EVEN THE BASIC DETAILS LIKE PAN / ADDRESSES OF FEW LENDERS DESPITE BEING UNDER DEBT AND PAYING INTEREST TO THE M AFTER DEDUCTION OF TAX AT SOURCE. THE LOAN CONFIRMATIONS WITH RESPECT TO AS MANY AS 38 PARTIES WERE NOT EVEN SIGNED BY THE LENDER. FURTHER , FINANCIAL DOCUMENTS LIKE BALANCE SHEET, PROFIT & LOSS ACCOUNT & STATEME NT OF AFFAIRS ETC. WAS NOT FILED BY THE ASSESSEE IN MOST OF THE CASES. EVEN DURING APPELLATE PROCEEDINGS, THE ASSESSEE FAILED TO SUBST ANTIATE THE 20 LOAN CREDITORS WHICH NEGATE THE VERY PROPOSITION THAT AD EQUATE TIME FRAME WAS NOT GRANTED TO THE ASSESSEE TO SUPPLY THE REQUI SITE DOCUMENTARY EVIDENCES. AT THE SAME TIME, A PLEA WAS RAISED BY T HE ASSESSEE THAT THE DETAILS BE CALLED FOR BY LD. AO BY WAY OF ISSUANCE OF SUMMONS TO THE CONCERNED LENDERS, WHICH, UNDER THE CIRCUMSTANCES, COULD NOT BE HELD TO BE JUSTIFIED. WE HAVE ALREADY NOTED THAT THE COMPLE TE ONUS TO PROVE THE FULFILLMENT OF PRIMARY INGREDIENTS OF SECTION 68 VI Z. IDENTITY, CREDITWORTHINESS AND GENUINENESS WAS UPON ASSESSEE AND THE SAME, ON FACTUAL MATRIX HAS REMAINED UN-DISCHARGED TO A GREA T EXTENT. SINCE THE REVENUE HAS AGITATED THE RELIEF PROVIDED BY LD. CIT (A) IN VIOLATION OF RULE-46A, WE DEEM IT PROPER TO SET ASIDE THE FINDIN GS OF APPELLATE AUTHORITY AND RESTORE THE MATTER BACK TO THE FILE O F LD. AO FOR RE- ADJUDICATION AS PER LAW. THE ASSESSEE IS DIRECTED T O SUBSTANTIATE ITS STAND WITH REQUISITE DOCUMENTARY EVIDENCES AND DEMO NSTRATE THE FULFILLMENT OF PRIMARY INGREDIENTS OF SECTION 68. T HE ALLOWANCE OF INTEREST ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 11 PAYMENT IS CONSEQUENTIAL IN NATURE WHICH WOULD BE A DJUDICATED AS PER THE STAND TAKEN BY REVENUE AGAINST LOAN CREDITORS. RESULTANTLY, THE GROUNDS URGED BY REVENUE AS WELL AS BY ASSESSEE, IN THIS REGARD, STANDS ALLOWED FOR STATISTICAL PURPOSES. 4.3 REGARDING QUANTUM ADDITION U/S 40A(3), WE FIND THAT THE SAME HAS, PRIMA FACIE, BEEN DELETED IN VIEW OF THE FACT THE LD. AO FAILED TO CALL FOR FURTHER INFORMATION FROM THE ASSESSEE. HOWEVER, THE SAME, IN OUR OPINION, WAS NOT A VALID GROUND TO DELETE THE ADDIT ION WITHOUT VERIFICATION OF FACTUAL MATRIX. THE COMPLETE ONUS TO SUBSTANTIAT E THE ARGUMENTS ADVANCED BY THE ASSESSEE RESTED UPON HIM AND LD. CI T(A) ERRED IN SHIFTING THE ONUS OF THE SAME ON LD. AO. THEREFORE, THE MATTER STANDS REMITTED BACK TO THE FILE OF LD. AO FOR VERIFICATIO N OF SUBMISSIONS MADE BY THE ASSESSEE BEFORE FIRST APPELLATE AUTHORITY AN D RE-ADJUDICATE THE SAME AS PER LAW WITH A DIRECTION TO THE ASSESSEE TO SUBSTANTIATE THE SAME. GROUND NO.3 OF REVENUES APPEAL STANDS ALLOWE D FOR STATISTICAL PURPOSES. THE OTHER GROUNDS OF REVENUES APPEAL ARE GENERAL IN NATURE. 5. RESULTANTLY, THE CROSS APPEALS STANDS PARTLY ALL OWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DECEMBER, 2018. SD/- SD/- (JOGINDER SINGH) (MAN OJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 11/12/2018 SR.PS:-JAISYVARGHESE / COPY OF THE ORDER FORWARDED TO : ITA.NO.3018 & 3466/MUM/2013 M/S. SHM SHIPCARE ASSESSMENT YEAR-2009-10 12 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ ( ) / THE CIT(A) 4. $ / CIT CONCERNED 5. #% &###' , #' , / DR, ITAT, MUMBAI 6. & ()* / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.