Savitaben Mangaldas Trust, Ahmedabad V. Income Tax Officer, Ahmedabad

ITA 3066/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7893 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D R THAKKAR
• Keywords: Unexplained cash credit; Proportionate interest; Additional evidence; Assessment record
• Section: 133(6); 68

Judgement Text

ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 1 OF 14 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.3066/AHD/2015 ASSESSMENT YEAR: 2007-08 SAVITABEN MANGALDAS TRUST, VS. INCOME TAX OFF ICER, AMOLA CHAMBERS, WARD 10(4), AHMEDABAD. NR. NAVRANGPURA TELEPHONE EXCHANGE, C.G. ROAD, AHMEDABAD 380 009. [PAN AABTS 1322 E] ITA NO.3067/AHD/2015 ASSESSMENT YEAR: 2007-08 SURENDRA MANGALDAS SHAH (HUF), VS. INCOME TAX OFFICER, G-7, AMOLA CHAMBERS, WARD 10(4), AHMEDABAD. NR. NAVRANGPURA TELEPHONE EXCHANGE, C.G. ROAD, AHMEDABAD 380 009. [PAN AACHS 6590 R] (APPELLANTS) (RESPONDENTS) APPELLANTS BY : SHRI D.R. THAKKAR, A.R. RESPONDENT BY : SHRI PRASOON KABRA, D.R. DATE OF HEARING : 28.12.2017 DATE OF PRONOUNCEMENT : 29.12.2017 O R D E R PER S.S. GODARA, J.M. THESE TWO ASSESSEES HAVE FILED THEIR RESPECTIVE INS TANT APPEALS; BOTH FOR ASSESSMENT YEAR 2007-08 AGAINST THE CIT(A)-5 AHMEDA BADS SEPARATE ORDERS DATED 24.08.2015 IN CASE NO. CIT(A)-5/ITO.WD.10(4)/461/20 14-15 & CIT(A)5/ITO.WD.10 (4)/454/2014-15 CONFIRMING ASSESSING OFFICERS ACTI ON IMPOSING PENALTIES OF RS.4,11,430/- AND RS.4,87,686/-; RESPECTIVELY IMPOS ED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961; IN SHORT THE ACT. 1.1 HEARD BOTH THE PARTIES. CASE FILE PERUSED. ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 2 OF 14 2. IT EMERGES AT THE OUTSET THAT THE ABOVE IMPUGNED PENALTIES PERTAIN TO QUANTUM ADDITIONS OF UNEXPLAINED UNSECURED LOANS AD DED UNDER SECTION 68 OF THE ACT AMOUNTING TO RS.89,93,000/- AND RS.1,59,51,199/ - FOLLOWED BY DISALLOWANCE OF CONSEQUENTIAL INTEREST PAID AMOUNTING TO RS.3,46,65 6/- AND RS.18,45,588/-; RESPECTIVELY MADE IN THE RELEVANT QUANTUM ASSESSMEN TS FRAMED ON 24.12.2009 IN THESE TWO CASES BEFORE US. THE ASSESSING OFFICER IN ITIATED THE IMPUGNED PENALTY PROCEEDINGS ALLEGING FURNISHING OF INACCURATE PARTI CULARS UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEES PREFERRED THEIR RESPECTIVE SEPARATE APPEALS. THE CIT(A)S SEPARATE ORDERS DATED 24.12.2009 AND 21.03.2013 DEL ETED MAJOR PORTIONS OF THE ABOVE TWO QUANTUM ISSUES IN BOTH ASSESSMENT YEARS. HE GRANTED RELIEF OF RS.77,87,425/- AND RS.1,47,45,512/- QUA FORMER ISSU E AND THAT OF RS.16,08,589/- AND RS.1,63,230/- QUA LATTER INTEREST IN HIS SEPARA TE QUANTUM LOWER APPELLATE ORDER. THE ASSESSING OFFICER THEREAFTER FINALISED THE IMPU GNED PENALTY PROCEEDINGS HOLDING IN BOTH THE CASES THAT THE ABOVE TWO ISSUES INVOLVE AN INSTANCE OF INTENTIONAL FURNISHING OF INACCURATE PARTICULARS OF INCOME AS T HESE ASSESSEES HAD FAILED TO PROVE ALL THE RELEVANT PARAMETERS OF IDENTITY, GENUINENES S AND CREDIT WORTHINESS OF THE UNSECURED LOANS AS WELL AS CONSEQUENTIAL INTEREST P AYMENT IN QUESTION. THE CIT(A) UPHOLDS THE SAME IN BOTH THE IMPUGNED ORDERS UNDER CHALLENGE. 2.1 WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL SUBMISSIONS. IT IS EVIDENT THAT THIS TRIBUNALS CO-ORDINATE BENCH HAS FIRST OF ALL DECLINED REVENUES APPEAL AGAINST THE CIT(A)S QUANTUM LOWER APPELLATE ORDER DELETING MAJOR PORTION OF SECTION 68 ADDITION IN QUESTION ON 16.06.2017 AS FOLLOWS :- 11. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE RECORD PLACED BEFORE US AND GONE THROUGH THE JUDGEMENTS REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. ISSUE RAISED BY REVEN UE IN THIS APPEAL FOR A.Y.2007-08 IN ITA NO.1529/AHD/2013 CENTRED AROUN D THE RELIEF GIVEN BY LD.CIT(A) BY WAY OF DELETING ADDITION U/S.68 OF THE ACT, MADE FOR UNEXPLAINED CASH CREDIT OF RS.1,47,45,512/- AND ALS O DELETING DISALLOWANCE OF PROPORTIONATE INTEREST PAID BY THE ASSESSE ON THIS CASH CREDIT. 12. FROM PERUSAL OF THE RECORD WE OBSERVE THAT ASSE SSE IS ENGAGED IN THE SARAFI BUSINESS UNDER TWO SOLE PROPRIETORSHIP C ONCERNED NAMELY MANGALDAS SERVICES AND SURRENDRA MANGALDAS HUF. LD. AO IN ORDER TO SATISFY HIMSELF WITH IDENTITY, GENUINENESS AND CRED ITWORTHINESS OF THE ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 3 OF 14 UNSECURED LOANS TAKEN DURING THE YEAR CALLED FOR NE CESSARY INFORMATION FROM THE ASSESSEE. IN COMPLIANCE THERETO ASSESSEE S UBMITTED COPY OF LEDGER ACCOUNT OF EACH CASH CREDITORS IN ITS BOOKS OF ACCOUNTS AND ALSO SUPPLIED THE COPIES OF BANK STATEMENT. INFORMATION WERE DIRECTLY CALLED FOR BY THE ASSESSING OFFICER FROM BOTH THE BANKS AN D AS PER THE INFORMATION GIVEN BY THESE TWO BANKS ALL THE IMPUGN ED LOANS AND ADVANCES WERE ACCEPTED BY ACCOUNT PAYEE CHEQUE. CON FIRMATION LETTERS ALONG WITH PAN NUMBER WERE ALSO SUBMITTED TO THE AS SESSING OFFICER. HOWEVER LD.AO FURTHER DEMANDED THE COPIES OF INCOME TAX RETURN OF EACH CASH CREDITORS ALONG WITH THEIR BANK ACCOUNT I N ORDER TO EXAMINE THE GENUINENESS AND CREDITWORTHINESS OF THE ALLEGED CASH CREDITS. ASSSESSEE WAS UNABLE TO FILE THESE DOCUMENTS FOR TH E REASON THAT ALL THESE CASH CREDITS WERE REPAID BACK IN SUBSEQUENT Y EARS AND ASSESSE LOST CONNECTION WITH THESE PARTIES AND THEREFORE WHATEVE R DOCUMENTS WHICH WERE COLLECTED AT THE TIME OF TAKING AND REAPAYING THE LOANS WERE FORWARDED TO THE ASSESSING AUTHORTIES. EVEN THEN AD DITION WAS MADE BY THE ASSESSING OFFICER AND MATTER TRAVELLED TO THE F IRST APPELLATE AUTHORITY. 13. LD.CIT(A) AFTER GOING THROUGH THE DOCUMENTS FIL ED BY THE ASSESSEE AS WELL AS ADMITTING ADDITIONAL EVIDENCE UNDER RULE 45A OF THE INCOME TAX RULE BY ACCEPTING ASSESSEES PLEA OF SOME MEDIC AL PROBLEM FACED BY ONE OF THE PERSON WHO WAS AT THE HELM OF AFFAIRS OF BUSINESS CONCERNS RESTRAINING TO FILE DETAILS BEFORE THE ASSESSING A UTHORITY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. LD.CIT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING AUTHORITY ALONG WITH A DIRECTION TO GATHER DETAILS FROM THE PAN DATA AND ALSO EXAMINE SOME OF THE INC OME TAX RETURN OF THE ALLEGED CASH CREDITORS ON TEST CHECK BASIS TO V ERIFY AS TO WHETHER ASSESSEES NAME APPEAR UNDER THE LIST OF LOANS AND ADVANCES GIVEN BY SUCH CASH CREDITORS. ASSESSING OFFICER CARRIED OUT REMAND PROCEEDINGS AND EXCEPT FEW IN ALL OTHER CASES, IT WAS ESTABLISH ED THAT PAN NUMBER ARE CORRECT AND MOST OF THE CASH CREDITORS (AS ON TEST CHECK BASIS) HAVE FILED RETURN OF INCOME. INFORMATION RECEIVED FROM BANKER OF THE ASSESSEE ALSO CERTIFIED THAT TRANSACTION OF LOANS TAKEN HAVE BEEN CARRIED OUT THROUGH ACCOUNT PAYEE CHEQUE. LD.CIT(A) AFTER EXAMINING REM AND REPORT AND DOCUMENTS FILED BY THE ASSESSE CONCLUDED THAT ASSES SEE HAS BEEN SUCCESSFUL IN ESTABLISHING THE IDENTITY, GENUINENES S AND CREDITWORTHINESS OF THE CASH CREDITORS AMOUNTING TO RS.1,47,45,512/- OUT OF THE TOTAL ADDITION U/S.68 OF THE ACT OF RS.1,59,51,199/- AND ALSO DELETED DISALLOWANCE OF PROPORTIONATE INTEREST PAID THEREON OF RS.16,08,589/- BY GIVING A DETAILED FINDINGS OBSERVING AS FOLLOWS:- ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 4 OF 14 2.4 I HAVE CAREFULLY CONSIDERED THE REQUEST OF APPE LLANT FOR ADMISSION OF ADDITIONAL EVIDENCES IN THE LIGHT OF FACTS OF THE CASE AND SUB MISSIONS MADE BY THE APPELLANT. IN PARA 5.1 ON PAGE-2 OF THE ASSESSMENT ORDER THE AO R ECORDS THAT THE APPELLANT HAD GIVEN CERTAIN SUBMISSIONS ON 04-09-2009 & 24-09-09. ON 7-12-2009, THE AO ISSUED ANOTHER SHOW CAUSE FOR FILING OF CONFIRMATION WHICH REMAINED UN-COMPLIED. THE ASSESSMENT ORDER WAS FINALLY PASSED BY THE AO ON 24 -12-2009. NO DOUBT AO HAD ACCORDED OPPORTUNITIES TO THE APPELLANT FOR FILING FOR OF CONFIRMATIONS, THE FACT HOWEVER REMAIN THAT ONE OF THE MANAGING TRUSTEE WAS SUFFERING FROM SOME HEART PROBLEM FOR WHICH HE WAS OPERATED SUBSEQUENTLY. THE AO HAS GIVEN FEW OPPORTUNITIES TO THE APPELLANT BETWEEN THE PERIOD 2 4-11-2009 TO 10-12-2009 AND HAS CONCLUDED IN THE ASSESSMENT ORDER THAT 'NUMEROU S OPPORTUNITIES' AND IN THE REMAND REPORT THAT 'SUFFICIENT OPPORTUNITIES' WERE GIVEN TO THE APPELLANT. RULE 46A STIPULATES ADMISSION OF ADDITIONAL EVIDENCES IN CAS ES WHERE A PARTICULAR EVIDENCE WAS REQUESTED BY THE A O, WHICH COULD NOT BE PRODUCED O N ACCOUNT OF SOME GENUINE CAUSE WITH THE APPELLANT, PROVIDED AN OPPORTUNITY O F BEING HEARD IS GIVEN TO THE AO BEFORE ADMISSION OF SUCH EVIDENCE AS ADDITIONAL EVI DENCE IN THE APPELLATE STAGE. AS MENTIONED SUPRA, THE ARGUMENTS OF THE A 0 AGAINST A DMISSION OF IMPUGNED EVIDENCES AS ADDITIONAL EVIDENCES ARE UNTENABLE SINCE THE SAM E ARE NOT SUPPORTED BY FACTS ON RECORDS. IT IS FURTHER SEEN THAT AS REPORTEDLY ONE OF THE MANAGING TRUSTEES WAS SUFFERING FROM COMPELLING MEDICAL PROBLEMS , THE AP PELLANT WAS PREVENTED BY SUFFICIENT CAUSE TO PROVIDE EVIDENCES IN SUPPORT TH EREOF. ACCORDINGLY, IT IS HELD THAT IN THIS CASE THERE EXIST SUFFICIENT MERITS IN THE REQU EST OF THE APPELLANT FOR ADMISSION OF ADDITIONAL EVIDENCES. IT IS FURTHER SEEN THAT THE I MPUGNED ADDITIONAL EVIDENCES HAVE AN IMPORTANT BEARING IN DECIDING THE CORRECTNESS OF ADDITIONS MADE BY THE ID A O. THE ADDITIONAL EVIDENCES ARE THEREFORE DIRECTED TO BE ADMITTED FOR THE PURPOSE OF ADJUDICATION OF RELEVANT GROUNDS OF APPEAL. 3.0 THE FIRST EFFECTIVE GROUNDS OF APPEAL IS REGARDING AN ADDITION OF RS. 1,59,51,199/- U/S.68 OF THE ACT TREATING CASH CREDITS AS BOGUS AN D THE SECOND EFFECTIVE GROUND OF APPEAL IS REGARDING THE ADDITION OF INTEREST OF RS. 18,45,588/- IN RESPECT OF SAID DEPOSITS. THE TWO GROUNDS BEING INTER CONNECTED, FO R THE PURPOSES OF BREVITY ARE TAKEN TOGETHER. THE FACTS OF THE CASE HAVE BEEN DIS CUSSED BY THE A O IN PARA-5 FROM PAGE-2 TO PARA-6.1 ON PAGE-9 OF THE ASSESSMENT ORDE R. ACCORDING TO A O, THE APPELLANT IS DOING BUSINESS IN THE NAMES OF SUREDRA MANGALDAS HUF AND MANGALDAS SERVICES. FROM THE BALANCE SHEET OF THESE TWO CONCE RNS, IT WAS NOTED THAT APPELLANT HAD SHOWN DEPOSITS OF RS. 1,42,08,968/- AND RS. 98, 75,743/-( PARA 4 , PG 2) IN THE CASE OF MANGALDAS SERVICES AND SURENDRA MANGALDAS H UF RESPECTIVELY. ON COMPARING BALANCE SHEET OF THE APPELLANT FOR TWO EN TITIES, BETWEEN A Y 2006-07 AND 2007-08, THE A O NOTED RECEIPT OF LOANS AS PER FOLL OWING DETAILS :- MANGALDAS SERVICES A Y 2007-08 - UNSECURED LOANS NO. NAME AS ON 31-3- 2007 AS ON 31-3-2006 1. ARITAR PLASTIC IND 677212 353735 ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 5 OF 14 2. ASHWIN P SHAH 1163096 - 3 JAYESH A SHAH 1345459 27632 4 KAILSAH TEXTILE 469431 416802 5 MAHENDRA RAVJI & CO 1003547 134763 6 MANEK MOTI TEXTILE 779550 414027 7 VLANISH TEXTILE 374997 297250 8 NIKHIL G SHAH 1080293 0 9 NIRAQNJAN CHANDRAVEDAN 1283545 41898 10 NIRANJAN RAVAL 971755 39810 11 OMKAR PLASTIC 619930 188400 12 PAVAL INDUSTRIES 833414 361250 13 PRAVINKUMAR & CO 723765 479780 14 R K FURNITURE 710023 464518 15 SHAILESH SHETH 1470983 41197 16 S K PLASTIC 701968 388988 TOTAL 14208968 3650050 ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 6 OF 14 SURENDRA MANGALDAS HUF NO NAME AS ON 31-3- 2007 AS ON 31-3-2006 1 ASHOKKUMAR POPATLAL 436503 331623 2 BINDI H PARIKH 10000 0 3 DIPAK J SHETH 901474 839023 4 DINESH 0 PATEL 325944 283430 5 DINESH P KANTAWALA 723589 629208 6 GAUTAM N PATEL 486647 423172 7 HEMANT N SHAH 310099 645340 8 KIRAN P SHAH 398051 346132 9 KIRTI M SHAH 210450 183000 10 MAHENDRA R SHAH 527079 202450 ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 7 OF 14 11 NIRANJAN CHANDRAVADAN 442395 384692 12 OMPRAKASH G SHARMA 541509 199500 13 PANKAJ A JAIN 754297 639235 14 REKHA D SHAH 247250 215000 15 SHARADBSHAH 310907 402844 16 -4INI S PADSHAH 334148 290564 17 '-VFTIBD DESAI 271717 236276 18 'VIRVODG SHAH 183684 209350 TOTAL J 7415743 6460839 IN VIEW OF ABOVE, THE A O CONCLUDED THAT NEW LOANS RECEIVED FROM THE ABOVE PARTIES AMOUNTING TO RS. 1,33,90,000/- IN THE CASE OF MANGA LDAS SERVICES AND RS. 25,61, 199/-( PARA 5.5 PG 6 ) IN THE CASE OF SURENDRA MANG ALDAS HUF AGGREGATING TO RS. 1,59,51,199/- AND CORRESPONDING INTEREST OF RS. 8,5 7,022/- AND RS. 9,88,566/- IN THE TWO ENTITIES RESPECTIVELY AGGREGATING TO RS. 18,35, 588/- ARE BOGUS AND IN-GENUINE AND ARE LIABLE FOR ADDITION U/S. 68 SINCE THE APPEL LANT HAD FAILED TO FILE CONFIRMATION, PROVE GENUINENESS OF TRANSACTION AND IDENTITY OF TH E LENDERS. HE ACCORDINGLY MADE THE ADDITION OF IMPUGNED AMOUNTS. 3.1 IT IS THE CASE OF APPELLANT THAT THE ID A O HAS ERR ED IN MAKING THE IMPUGNED ADDITION. IT HAS BEEN SUBMITTED THAT IT WAS PREVENT ED BY SUFFICIENT CAUSE BEING HEALTH PROBLEM OF ONE OF THE MANAGING TRUSTEES TO FILE THE CONFIRMATIONS, WHICH WERE FILED DURING THE COURSE OF THE REMAND PROCEEDINGS ALONGWI TH P A NOS OF THE DEPOSITORS. THE APPELLANT HAS ALSO ARGUED THAT DURING THE REMAN D PROCEEDINGS, THE A O HAS ALSO DONE A TEST CHECK IN RESPECT OF DEPOSITORS AND HAVE NOTED THAT THE DEPOSITORS HAVE DISCLOSED THE IMPUGNED DEPOSITS AND THE INTEREST IN COME EARNED THEREUPON IN THEIR RETURNS OF INCOME. THE APPELLANT HAS SUBMITTED THAT SINCE THE DURING F Y 2007-08 RELEVANT TO AY 2008-09, IT HAS ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 8 OF 14 LOST CONTACT WITH THE LENDERS AND HENCE COULD NOT P RODUCE THEM BEFORE THE LD A O FOR DEPOSITION. THE APPELLANT HAS ALSO ARGUED THAT IN R ESPECT OF ASSESSMENT PROCEEDINGS FOR A Y 2008-09 AND 2006-07 U/S. 143(2), THE ID A O HAS COLLECTED INFORMATION FROM HIS BANKERS WHICH INDICATES THAT ALL THE LOAN TRANS ACTIONS FOR ACCEPTANCE AND REPAYMENT OF IMPUGNED DEPOSITS WERE MADE THROUGH AC COUNT PAYEE CHEQUES. THE APPELLANT HAS ACCORDINGLY SUBMITTED THAT THE IDENTI TY OF THE DEPOSITORS, GENUINENESS IF TRANSACTION AND THE CREDITWORTHINESS OF THE CRED ITORS STANDS ESTABLISHED U/S.68 AND HENCE THE ADDITION OF RS.1,59,51,199/- AND THE COR RESPONDING INTEREST OF RS.18,45,588/- DESERVE TO BE DELETED. 3.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF T HE CASE AND THE SUBMISSIONS MADE BY THE APPELLANT. AT THE OUTSET, IT IS SEEN THAT THE FIGURE OF ADDITION OF RS. 1 ,59,51 ,199/- PER SE MADE BY THE A O IS BASED UPON SOME IN CORRECT UNDERSTANDING OF THE FACTS AND FIGURES. A PERUSAL OF THE TABLE EXTRACTED FROM THE ASSESSMENT ORDER, SHOWS THAT THE TOTAL DEPOSITS SHOWN BY THE APPELLANT IN R ESPECT OF IMPUGNED 34 DEPOSITORS AS ON 31-3-2007 COMES TO RS. 2,16,24,7117/- ONLY. T HE CORRESPONDING FIGURE AS ON 31- 3-2006 WAS RS. 1 ,01 ,10,8897-. THE ARGUMENT OF THE AO IS MAKING THE ADDITION OF RS. 1,59, 51, 1997- BEING THE DIFFERENCES IN VALUES OF LOAN FROM 31-3-2006 TO 31-3-2007 IS INCORRECT. THE DIFFERENCE BETWEEN THE FIGURES AS ON 31-3-2006 AND 31-3-2007 COMES TO RS. 1,15,13,822/- (2,16,24,711/- MINUS 1,01,10,8 89/-) THUS THE MAXIMUM ADDITION THAT COULD HAVE BEEN MADE IN THE CASE OF THE PLEA O F NEW LOANS HAVE BEEN RECEIVED COMES TO RS. 1,15,13,822/- ONLY. ACCORDINGLY, THE A DDITION MADE BY THE A O TO THE EXTENT OF RS. 44,37,377/- (1,59,51,199 MINUS 1,15,1 3,822 ) IS EXCESSIVE AND UNWARRANTED AND DESERVES TO BE DELETED. 3.3 COMING TO THE MERITS OF THE ADDITION, IT IS SEE N THAT IN THIS CASE UPON RECEIPT OF A OS REMAND REPORT DATED 7-03-2011, MY PREDECESSOR VI DE HIS LETTER DATED CIT(A)XVI/REMAND/2011-12 DATED 30-6-2011 ADDRESSED TO THE A O HAD CONVEYED THAT IN VIEW OF THE FACT THAT THE DEPOSITS WERE TAK EN BY ACCOUNT PAYEE CHEQUES, BANK INQUIRIES INDICATED ROUTING OF ACCEPTANCE AND REPAY MENT OF DEPOSITS THROUGH BANK OF THE APPELLANT, AND ONLY IN VIEW OF THE FACT THAT AP PELLANT WAS UNABLE TO PRODUCE THE DEPOSITORS / PROVIDE THEIR ADDRESSES, THE IMPUGNED DEPOSITS CANNOT BE CONSIDERED AS UNEXPLAINED. HE ACCORDINGLY DIRECTED THE A O TO EXP LORE OTHER METHOD OF VERIFICATION LIKE ASCERTAINING ADDRESS FROM THE P A NOS., ACCESS ING BANK ACCOUNT OF DEPOSITORS THROUGH DETAILS AVAILABLE FROM CHEQUES OF REPAYMENT . THE A O WAS ACCORDINGLY DIRECTED TO DO A TEST CHECK IN RESPECT OF FEW DEPOS ITORS FROM THE ITD DATA BASE. THE SAID LETTER DATED 30-6-2011, IS REPRODUCED HEREUNDE R :- '..... PLEASE REFER TO YOUR REMAND REPORT DATED 07- 03-2011 RECEIVED IN THIS OFFICE ON 09-03-2011 THROUGH THE JTCIT, RANGE-10, AHMEDABAD. A COPY OF THE REMAND REPORT WAS MADE AVAILABLE TO THE COUNSEL OF THE APPELLANT FOR HIS COMMENTS. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD. COUNSEL THAT ALL THE DEPOSITORS ARE INCOME TAX PAYERS AND THEY HAVE CONFIRMED THE DEPOSITS GIVEN B Y THEM IN THE CONFIRMATIONS FILED. THE COPIES OF CONFIRMATIONS OF ACCOUNT FOR T HE RELEVANT PERIOD HAVE BEEN FILED BEFORE YOU IN THE REMAND PROUCEEDINGS. IT WAS NOTIC ED THAT THE CONFIRMATIONS WERE FOUND SIGNED BOTH BY THE ASSESSEE AS WELL AS BY THE DEPOSITORS. THE PAN WAS ALSO MENTIONED IN EACH OF SUCH CONFIRMATIONS. 2. I HAVE GONE THROUGH THE CONFIRMATIONS, COPIES OF WHICH WERE FILED DURING THE CAUSE OF APPELLATE PROCEEDINGS, AND NOTICED THAT IN MOST OF THE CASES, THE DEPOSITS ARE IN LAKHS OF RUPEES WHICH INDICATE THAT THE DEPOSITORS ARE NOT THE PERSONS OF NO MEANS OR PUPPETS. ALL THE DEPOSITS HAVE BEEN TAKEN BY ACCOUN T PAYEE CHEQUES AND THE DEPOSITS WERE ALSO REPAID BY ACCOUNT PAYEE CHEQUES. IT WAS BROUGHT TO MY NOTICE ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 9 OF 14 THAT YOU HAVE MADE NECESSARY INQUIRIES FROM THE RES PECTIVE BANKS AND FOUND THAT THE DEPOSITS WERE TAKEN BY ACCOUNT PAYEE CHEQUES AND AL SO REPAID BY ACCOUNT PAYEE CHEQUES. IF IT IS CORRECT THEN THE DEPOSITS CANNOT SAID TO ' ARRANGED. THOUGH, THE APPELLANT WAS UNABLE TO PRODUCE THE DEPOSITORS BEFO RE THE LEER FOR EXAMINATIONS, THE DEPOSITS CANNOT BE CONSIDERED AS UNEXPLAINED ONLY A CCOUNTS OF THE FACT THAT THE DEPOSITORS WERE NOT PRODUCED FOR EXAMINATION. THERE WERE OTHER METHOD OF EXAMINATION OF THE DEPOSITORS. THE ADDRESS CAN BE A SCERTAINED FROM PAN. THE BANK ACCOUNTS OF THE DEPOSITORS ARE ACCESSABLE ON THE BA SIS OF REPAYMENT BY ACCOUNT PAYEE CHEQUES. IF THE ASSESSEE HAD FILED THE CONFIR MATIONS AND THE PAN ARE AVAILABLE, THE INITIAL BURDEN IS ESTABLISHED AS ACCEPTED BY TH E HON'B/E GUJARAT HIGH COURT IN THE CASE OF ROHINI BUILDERS. THE HON'BLE GUJARAT HIGH C OURT AND THE HON'BLE AHMEDABAD TRIBUNAL HAVE ADMITTED THE DEPOSITS AS EXPLAINED IN VARIOUS CASES WHERE THE DEPOSITORS WERE NOT PRODUCED AND THE DEPOSITS WERE TAKEN AND REPAID BY ACCOUNT PAYEE CHEQUES. SINCE THE DEPOSITS HAVE BEEN REPAID TO THE DEPOSITORS, IT IS ACTUALLY DIFFICULT FOR THE APPELLANT TO TRACE OUT THE DEPOSI TORS AND PRODUCE THEM BEFORE THE ASSESSING OFFICER. FROM THE CONFIRMATION FILED, IT WAS NOTICED THAT SUBSTANTIAL AMOUNT OF INTEREST WAS PAID TO THE DEPOSITORS AND I F THEY ARE ASSESSED TO TAX, THEY WOULD HAVE DISCLOSED THE INTEREST IN THEIR RETURNS OF INCOME FILED FOR THE A.Y. 2006-07 TO A.Y. 2008-09. 3. CONSIDERING THESE FACTS, IT IS ADVISAVLE NOT TO PRESS THE APPELLANT FOR PRODUCING THE DEPOSITORS. FOR VERIFICATION OF THE CREDITWORTHINES S, YOU ARE REQUESTED TO PLEASE ENSURE WHETHER THE 34 DEPOSITORS, WHOSE PANS ARE AV AILABLE ON RECORD, ARE ASSESSED TO INCOME TAX. IF THEY ARE ASSESSED TO TAX, THE DET AILS OF FILING OF INCOME TAX RETURNS FOR THE A.Y. 2006-07 TO A.Y. 2008-09 CAN BE VERIFIE D FROM THE DEPARTMENTAL COMPUTER SYSTEM AND IF REQUIRED THE ASSESSMENT RECORDS CAN B E EXAMINED FROM THE RESPECTIVE ASSESSING OFFICERS ON TEST CHECK. 4. YOU ARE THEREFORE, REQUESTED TO PLEASE COLLECT T HE ASSESSMENT DETAILS OF THESE DEPOSITORS FROM THE COMPUTER SYSTEM OF THE DEPARTME NT AND TRY TO EXAMINE AT RANDOM, THE ASSESSMENT RECORDS OF 5-6 DEPOSITORS. I F ON TEST CHECK, IT IS FOUND THAT THE DEPOSITORS HAD DISCLOSED THE INTEREST INCOME IN THEIR RETURNS OF INCOME FOR THE A.YS. 2006-07 TO A.Y. 2008-09 THE CASH CREDITS CAN BE TREATED AS EXPLAINED. A FURTHER REPORT THEREFORE, IS REQUIRED TO BE SENT BY YOU LAT EST BY 14-07-2011 IF POSSIBLE. IF REQUIRED, FURTHER TIME MAY BE TAKEN. 5. SIMILAR EXERCISE MAY BE DONE IN THE CASE OF APPE AL FILED BY M/S. SAVITABEN MANGALDAS TRUST.....' IN RESPONSE, THE A O SUBMITTED A REMAND REPORT BEAR ING NO ITO/WD.10(4)/ABD/APPEAL-CORRES/2010-11 DATED 20-9-2 011 CONVEYING AS UNDER MANGALDAS SERVICES A Y 2007- 08 - UNSECURED LOANS NO NAME PAN AO REMARKS 1 JAYESH A SHAH ACJPS9026K 12(4) DEPOSITS ARE REFLECTED IN B/S. ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 10 OF 14 2 MAHENDRA RAVJI & CO ADSPP7244C 14(4) RECORDS NOT AVAILABLE, WEDED OUT 3 NIRANJAN RAVAL AAQPR466R 15(4) RECORDS NOT AVAILABLE, WEDED OUT 4 PAYAL INDUSTRIES AADFP8528R 11(2) NO REPLY REED FROM AO 5 SHAILESH SHETH ACAPS6902P 15(4) RECORDS NOT AVAILABLE, WEDED OUT SURENDRA MANGALDAS HUF NO NAME PAN AO REMARKS 1 ASHOKKUMAR POPATLAL ADFPS9860G 11(1) DEPOSITS ARE REFLECTED IN B/S. 2 PANKAJ A JAIN ABTPJ5493Q 11(2) NO REPLY REED FROM AO 3 REKHA D SHAH AKGPS8914H 1514) RECORDS NOT AVAILABLE, WEDED OUT 4 VINOD DESAI AAPPD7626L 15(4) RECORDS NOT AVAILABLE, WEDED OUT THE A O THUS INFORMED THAT TOTAL VERIFICATION OF TH E DEPOSITORS COULD NOT BE MADE ON ACCOUNT OF UNAVAILABILITY OF ASSESSMENT RECORDS / C O-OPERATION FROM RESPECTIVE AOS. ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 11 OF 14 AGAIN, MY PREDECESSOR VIDE HIS LETTER NO CIT(A)XVI/ REMAND/2011-12 DATED 19-12- 2011 DIRECTED THE A O TO ONCE AGAIN ASCERTAIN WHETH ER ALL THE 34 DEPOSITORS ARE ASSESSED TO TAX OR NOT. THE A O REPLIED BY LETTER N O LTO/WD.10(4)/ABD/APPEAL- CORRES/2010-11 DATED 16-12-2011 THAT OUT OF TOTAL 3 4 DEPOSITORS, THE P A NO OF ONE SHRI GAUTAM N PATEL, AND KIRAN P SHAH WAS FOUND INV ALID AND PAN OF NIKHIL G SHAH AND SMT BINDI H PARIKH WAS NOT AVAILABLE ON RECORDS AND THEREFORE NO VERIFICATION COULD BE CONDUCTED, THE BALANCE DEPOSITORS WERE FOU ND TO BE ASSESSED TO TAX. DURING THE COURSE OF CURRENT APPELLANT PROCEEDINGS, THE CA SE RECORDS OF THE IMPUGNED DEPOSITORS WAS CALLED FROM RESPECTIVE AOS TO CONDUC T A TEST CHECK. IT WAS NOTED THAT THE DEPOSITS AND THE CORRESPONDING INTEREST STOOD D ISCLOSED IN THE RESPECTIVE RETURNS. A PERUSAL OF THE ABOVE SHOWS THAT OUT OF THE IMPUGN ED 34 DEPOSITOR IN RESPECT OF WHICH ADDITION WAS MADE BY THE ID AO VERIFICATIONS COULD NOT BE DONE IN RESPECT OF SHRI GAUTAM N PATEL,(LOAN OF 63745/-) KIRAN P SHAH( LOAN OF RS. 51919/-), NIKHIL G SHAH(LOAN OF RS. 10,80,293/-) AND SMT BINDI H PARIK H.(RS.10,000/-) FRESH DEPOSITS RECEIVED FROM THESE FOUR DEPOSITORS CUMULATIVELY AG GREGATE TO RS. 12,05,687/- . TEST CHECK CONDUCTED BY THE ID A O ALSO INDICATED THAT T HE DEPOSITS RECEIVED FROM BALANCE DEPOSITORS WERE DISCLOSED IN THEIR RETURNS OF INCOM E. IN THE CASE OF ROHINI BUILDERS, HON'BLE GUJARAT HIGH COURT HAS HELD THAT IF THE CON FIRMATIONS ARE FILED AND THE PA NOS ARE AVAILABLE, THE INITIAL BURDEN U/S.68 STANDS DIS CHARGED BY AN APPELLANT. IN SEVERAL OTHER CASES, BOTH HONBLE GUJARAT HIGH COURT AS WEL L AS ITAT AHMEDABAD HAVE HELD THAT DEPOSITS WHICH WERE TAKEN AND REPAID BY WAY OF ACCOUNT PAYEE CHEQUES ARE TO BE ACCEPTED AND HELD AS GENUINE, EVEN IF THE APPELL ANT FAILS TO PRODUCE THE DEPOSITORS. ACCORDINGLY, IN VIEW OF THE FACTS OF TH E CASE DISCUSSED ABOVE, IT IS HELD THAT THE ADDITION MADE BY THE LD AO OF RS.1,59,51,1 99/- CANNOT BE SUSTAINED IN ITS ENTIRELY. AS DISCUSSED ABOVE, THE UNSECURED LOAN IN RESPECT OF SHRI GAUTAM N PATEL,( LOAN OF 63745/-) KIRAN P AN OF RS. 51919/-), NIK HIL G SHAH(LOAN OF RS. 10,80,293/-) AND SMT BINDI H PARIKH !(RS.10,000/-) COULD NOT BE VERIFIED ON ACCOUNT OF THEIR PA NO'S BEING INVALID ETC. THE TOTAL OF THESE LOANS COMES TO RS. 12,05,687/-. THER EFORE OUT OF TOTAL ADDITION OF RS 1,89,91,199/- , AN AMOU NT OF RS 12,05,687/- IS CONFIRMED AND THE BALANCE IS DELETED. THE FIRST EFFECTIVE GRO UND OF APPEAL IS THEREFORE PARTLY ALLOWED. FURTHER THE ADDITION ON ACCOUNT OF INTERES T OF RS. 18,45,588/- PAID BY THE APPELLANT IN RESPECT OF IMPUGNED CASH CREDITS WAS A LSO ADDED BY THE A 0 ON THE PLEA THAT THE LOANS WERE BOGUS. AS HELD IN THE PRECEDING PARAS THAT EXCEPT FOR FOUR, ALL THE OTHER 34 LOANS HAVE BEEN FOUND TO BE GENUINE AND TH E ADDITION THEREIN HAS BEEN DELETED. CONSEQUENTLY, THE ADDITION ON ACCOUNT OF I NTEREST OF RS.18.45.5887- ALSO CANNOT BE SUSTAINED IN ITS ENTIRETY. THE RATE OF IN TEREST PAID BY THE APPELLANT IN RESPECT OF THESE LOANS IS NOT AVAILABLE ON RECORDS. THE SAME IS KEEPING IN VIEW THE PREVALENT MARKET RATES IS ESTIMATED AT 12%. THE AMO UNT OF UNEXPLAINED LOAN IN RESPECT OF ABOVE 4 PARTIES AS 31/03/2007 ON WHICH I NTEREST WAS PAID BY THE APPELLANT APPEARS AT RS19,74.991/- . CORRESPONDING INTEREST IN RESPECT OF SAID LOAN AT THE RATE OF 12% COMES TO RS2,36,999/-. ACCORDINGLY, THE ADDITION IN RESPECT OF INTEREST IS CONFIRMED TO THE EXTENT OF RS.2,36,999/ - AND THE BALANCE IS DELETED. THE SECOND EFFECTIVE GROUND OF APPEAL IS ALSO THEREFORE PARTLY ALLOWED. 14. WE OBSERVE THAT LD.COUNSEL HAS RELIED UPON VAR IOUS JUDGMENTS AND DECISIONS DEALING WITH SIMILAR ISSUES AND WE WI LL LIKE TO TAKE NOTE OF FEW OF THEM. WE OBSERVE THAT THE CO-ORDINATE BENCH, AHMEDABAD I N ITA NOS.1263 & 1572/AHD/2014 IN CASE OF INCOME TAX OFFICER V/S MA HENDRA KATARIA HAS HELD AS UNDER ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 12 OF 14 6. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES . THERE IS NO DISPUTE THAT WE ARE NOW LEFT WITH FOUR CREDITORS. FIRST ONE SHRI DINESH ARVIND RAVAL INVOKES A SUM OF RS.75,000/-. PAGE 118 OF THE PAPER BOOK REVEALS THA T THE ASSESSEE HAD FILED HIS BANK STATEMENT, RETURN OF INCOME WITH ACKNOWLEDGEMENT AN D HIS LEDGER COPY STATING OPENING BALANCE OF RS.21ACS TO PROVE GENUINENESS. T HIS FOLLOWS A CONFIRMATION FROM THE SAID CREDITORS AND AT PAGE 125 OF THE PAPER BOO K. WE TAKE INTO ACCOUNT ALL THESE DETAILS AS WELL AS THIS TRIBUNAL'S DECISION IN ITA NO.L335/AHD/2014 M/S. R. KANTILAL & CO. VS. CIT FOLLOWING HON'BLE APEX COURT'S DECISION IN ORISSA STILL CORPORATION CASE 159 ITR 78 AS WELL AS THAT OF HON'BLE JURISDICTIONAL HI GH COURT'S JUDGMENT IN RANCHHOD JIVABHAI NAKHAVA 208 TAXMANN.COM 35 TO CONCLUDE THA T THE ASSESSEE HAS DISCHARGED HIS ONUS WHEREAS THERE IS NO SPECIFIC EVIDENCE FOR DISBELIEVING THE SAID EXPLANATION. COMING TO NEXT CASE OF M/S. S. K. DEVELOPERS, IT IS EVIDENT FROM PAGES 135 IN THE PAPER BOOK THAT ITS TAX CONSULTANT HAD SENT ALL DET AILS I.E. LOAN CONFIRMATION LETTER, LOAN LEDGER, BALANCE SHEET COPY AS ON 31.03.2009 SH OWING THE LOAN TRANSACTION IN QUESTION, PAN CARD, INCOME TAX RETURN ACKNOWLEDGEME NT AS WELL AS BANK STATEMENT. IT FURTHER CLARIFIED THE FACT THAT THE POSTAL AUTHO RITY'S REMARK IN NOT SERVING SECTION 133(6) NOTICE WAS NOT CORRECT. WE FIND HEREIN AS WE LL THAT THE AUTHORITIES BELOW NOWHERE REBUT THE SAID EXPLANATION WITH CONCRETE EV IDENCE. WE THEREFORE ADOPT OUR PRECEDING REASONING IN THIS CASE AS WELL. THE THIRD CREDITOR IS M/S. KESAR AGENCY QUA THE SUM IN QUESTION OF RS.L.5LACS. THE ASSESSEE CLA IMED THAT THIS AMOUNT WAS DEPOSITED IN HIS FIRM MS. PADMAVATI INFRACON PVT. L TD. WHICH WAS LATER ON TRANSFERRED BY WAY OF A JOURNAL ENTRY. THE ASSESSING OFFICER IS SUED SECTION 133(6) NOTICE. ONE SHRI DINESH B. KATARIA FILED REPLY ALONGWITH COPY OF BAL ANCE SHEET, THE ABOVE ENTITIES' LEDGER ACCOUNT AND OTHER DETAILS. THE ASSESSING OFF ICER OBSERVES AT PAGE 111 OF THE PAPER BOOK CONTAINING IN HIS REMAND REPORT THAT M/S . PADMAVATI INFRACON'S BOOKS DULY SHOW THESE ACCOUNTS AN AMOUNT OF RS.L.5LACS IN QUESTION. WE THEREFORE OBSERVE THAT THE ASSESSEE HAS PROVED HIS CASE BY DISCHARGIN G THE PRIMARY ONUS AS NOT REBUTTED BY THE LOWER AUTHORITIES. THE LAST CREDITO R M/S. RAJ MOTOR INVOLVES A SUM OF RS.31ACS. THE ASSESSING OFFICER HIMSELF OBSERVES IN HIS REMAND REPORT AT PAGE 133 OF THE PAPER BOOK THAT THIS ASSESSEE'S CLAIM REGARDING THE SAID ENTITY IS VERY MUCH ACCEPTABLE. WE THEREFORE FIND NO REASON TO AGGRIEVE WITH THE IMPUGNED ADDITION. THE ASSESSING OFFICER IS DIRECTED TO DELETE SECTION 68 ADDITION IN QUESTION OF RS.L6.251ACS. THIS FIRST SUBSTANTIVE GROUND IS PART LY ALLOWED. FURTHER HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DCIT V. ROHINI BUILDERS (2002) 256 ITR 360 (GUJ) HELD THAT IF IDENTITY OF CREDITORS IS PROVED AND AMOUNTS IS RECEIVED BY ACCOUNT PAYEES CH EQUE THAN INITIAL BURDEN OF PROVING CREDITS STANDS DISCHARGED AND SUC H SOURCE OF CREDITS WOULD NOT AUTOMATICALLY RESULT IN DEEMING AMOUNTS A S INCOME INCLUDIBLE IN TOTAL INCOME OF ASSESSEE. WE FURTHER OBSERVE THAT HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT V. MICRO METAL (P) LTD. (2010) 327 ITR70(GUJ) H AS HELD THAT IN CASE OF CASH CREDIT IF TRANSACTIONS ARE GENUINE AND IDE NTITY OF DEPOSITORS IS ESTABLISHED THEN AMOUNT REPRESENTING CASH CREDITS C OULD NOT BE ADDED TO INCOME OF ASSESSEE. FURTHER HONBLE JURISDICTIONAL HIGH COURT OF RAJAST HAN IN THE CASE OF LABH CHAND BOHRA V. ITO (2008) 219 CTR 571 (RAJ.), HAS HELD THAT 'IF THE ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 13 OF 14 EXPLANATION IS NOT SUPPORTED BY ANY DOCUMENTARY OR OTHER EVIDENCE, THEN THE DEEMING FICTION CREATED BY S. 68 CAN BE INVOKED. IN THE PRESENT CAS E, SO FAR AS THIS REQUIREMENT IS CONCERNED, IT IS VERY MUCH THERE IN EXISTENCE, INASMUCH AS THE AMOUNT HAS BEEN ADVANCED BY ACCOUNTS PAYEE CHEQUES, THROUGH BANK, AND IS DULY SUPPORTED BY DOCUMENTARY EVIDENCE AS WELL AS THE TWO LENDERS, AND THAT ALSO SATISFIES THE REQUIREMEN T ABOUT THE DISCHARGE OF BURDEN ON THE PART OF THE ASSESSEE, TO PROVE IDENTITY AND GENUINE NESS OF THE TRANSACTION. SO FAR AS CAPACITY OF THE LENDER IS CONCERNED, CAPACITY OF THE LENDER TO ADVANCE MONEY TO THE ASSESEE WAS NOT A MATTER WHICH COULD BE REQUIRED OF THE ASSESSEE TO B E ESTABLISHED, AS THAT WOULD AMOUNT TO CALLING UPON HIM TO ESTABLISH SOURCE OF THE SOURCE OF THE SOURCE. THE ADDITION WITH RESPECT TO THE ENTRIES OF V AND D, FOR THE AMOUNTS OF' 50.000/ - EACH RESPECTIVELY MADE IN THE INCOME OF ASSESSEE, ARE ORDERED TO BE DELETED. CIT VS DAULAT RAM RAWAT MULL 1972 CTR (SC) 411: (1973) 87 ITR 349 (SC) AND LATE MANGILAL AGARWAL TH ROUGH LRS VS. ASSTT. CIT (2007) 208 CIR(RAJ) FOLLOWED; CIT VS KISHORILAL SANTOSHILAL (1 995) 129 CTR (RAJ) 450 1995, 216 ITR 9 (RAJ) NOT FOLLOWED. 15. RESPECTFULLY FOLLOWING THE JUDGMENTS OF HONBLE JURISDICTIONAL HIGH COURT AND OTHER HONBLE HIGH COURT AS WELL AS DECI SION OF CO-ORDINATE BENCH AND AFTER EXAMINING THE FACTS OF THE CASE IN LIGHT THEREOF, WE ARE OF THE VIEW THAT ASSESSEE HAS SUCCESSFULLY PROVED T HE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE IMPUGNED CA SH CREDIT OF RS.1,47,45,512/- BY PROVIDING DETAILS OF NAME, ADDR ESS, CONFIRMATION LETTERS, BANK STATEMENT, PAN NUMBER AND ALSO PROVIN G THAT IMPUGNED TRANSACTIONS WERE CARRIED OUT THROUGH BANKING CHANN EL WHICH HAVE BEEN FOUND TO BE CORRECT BY THE ASSESSING AUTHORITY IN T HE REMAND PROCEEDINGS. FURTHER THERE WAS NO ESTOPPEL WITH THE REVENUE AUTHORITIES TO CALL INFORMATION AS REQUIRED BY THEM FROM THESE ALLEGED CASH CREDITORS U/S.133(6) OF THE ACT. IT SEEMS THAT REVENUE RESTR AINED FROM CARRYING OUT THIS ACTIVITY FOR THE REASONS BEST KNOWN TO THEM. W E THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A), DE LETING THE ADDITION U/S.68 OF THE ACT AT RS.1,47,45,512/- AND ALSO DELE TING DISALLOWANCE OF INTEREST OF RS.16,08,589/-. IN THE RESULT GROUND NO . 1 AND 2 RAISED BY REVENUE ARE DISMISSED. 3. THE NET RESULT THAT FLOWS FROM THE ABOVE DETAILE D DISCUSSIONS IS THAT THESE TWO ASSESSEES HAD SUCCESSFULLY PROVED IDENTITY, CAPACIT Y AS WELL AS REPAYMENT THROUGH BANKING CHANNEL IN THE QUANTUM ISSUE OF UNSECURED L OANS. IT HAS COME ON RECORD THAT SOME OF THE PAN DETAILS TURNED OUT TO BE INVAL ID. IT WAS HOWEVER NOT THE REVENUES CASE THAT THE SAID PANS WERE ALTOGETHER I NCORRECT AS PERTAINING TO SOME OTHER PERSONS THAN THE CREDITORS IN QUESTION. IT I S THEREFORE AN INSTANCE THEREIN THESE ASSESSEES PROVED ALMOST 90 PERCENT OF THE IMPUGNED CREDITS TO BE GENUINE IN QUANTUM LOWER APPELLATE PROCEEDINGS AS UPHELD BY TH IS TRIBUNAL. WE ACCORDINGLY KEEP IN MIND THE FINE DISTINCTION BETWEEN QUANTUM A ND PENALTY PROCEEDINGS AS PER HONBLE APEX COURTS LANDMARK JUDGEMENT IN CIT VS. RELIANCE PETROPRODUCTS 322 ITR ITA NOS.3066 & 3067/AHD/2015 A.Y. 2007-08 PAGE 14 OF 14 158 (SC) THAT EACH AND EVERY ADDITION MADE IN CASE OF FORMER DOES NOT IPSO FACTO ATTRACT LATTER PENAL PROVISION TO CONCLUDE THAT BOT H THE LOWER AUTHORITIES HAVE ERRED IN LAW AS WELL AS IN FACTS IN IMPOSING THE PENALTIES I N QUESTION IN THESE TWO CASES. THE SAME ARE ACCORDINGLY DIRECTED TO BE DELETED. 4. THESE TWO ASSESSEES APPEALS ARE ACCORDINGLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF DECEMBER, 2017. SD/- SD/- MANISH BORAD S.S. GODARA (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 29 TH DAY OF DECEMBER, 2017 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDEN T (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER UE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD