The ITO, Ward-3(4), Petlad V. Smt. Rupalben Hitulbhai Patel, Borsad

ITA 3110/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9035 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B T THAKKAR HEARING CONCLUDED
• Keywords: Unexplained investment; Income from undisclosed sources; Assessment record
• Section: 44AD; 143(3); 131; 68; 69

Judgement Text

ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 3110 /AHD/201 3 ASSESSMENT Y EAR : 20 0 9 - 10 INCOME TAX OFFICER , WARD 3(4), PETLAD (BARODA) .. .APPELLANT VS. R UPALBEN HITULBHAI PATEL .. .. . RESPONDENT POST FALIA, SARDAR CHOWK, BORSAD 388 540. [PAN: A KNPP 5263 D ] APPEARANCES BY PRASOON KABRA FOR THE A PPELLANT B.T. THAKKAR FOR THE R E SPONDENT HEARING CONCLUDED ON: 0 9 / 12 / 20 1 6 ORDER PRONOUNCED O N : 03 / 0 3 / 20 1 7 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING O FFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 9 TH OCTOBER 2013, PASSED BY THE LEARNED C IT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, FOR THE ASSESSMENT YEAR 20 0 9 - 10 . 2. I N THE FIRST AND SECOND GROUND S OF APPEAL, THE A SSESS ING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE : - 1 (A) . WHETHER THE ORDER OF THE LD. CIT (A ) IS PERVERSE IN LAW AND IN FACT IN HOLDING T HAT BANK A/C. NO.02980200000703 WAS A DISCLOSED ACCOUNT WHEN THIS ACCOUNT WAS NOT INCLUDED IN BALANCE SHEET. ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 2 OF 9 1(B) THE LD. CIT(A) ERRED IN LAW AND IN F ACT IN NOT HOLDING THAT TH E WHOLE CONSTRUCTION BUSINESS WAS OUTSIDE BOOKS WHEN TRANSACTION RELATED TO T H E BUSINESS WAS NOT DISCLOSED IN PART A - BS OF ITR - 4 FOUND OUT BY AO. 2. THE LD. CIT( A ) ERRED IN LAW IN NOT APPRECIATING THAT THE ASSESSEE WAS REQUIRED UNDER LAW TO OFFER INCOME ON PERCENTAGE COMPLETION METHOD, HAD BUSINESS BEEN A DISCLOSED BUSINESS. 3 . BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS ENGAGED IN THE CIVIL CONST RUCTION BUSINESS. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSING O FFICER NOTED THAT BANK OF BARODA A/C. NO.02980200000703 WAS NOT SHOWN IN THE BALANCE SHEET, AND WAS , AS SUCH, UNDISCLOSED. THE CREDITS SHOWN IN THIS ACCOUNT AGGREGATED TO RS. 41,05,100/ - . THE ASSESSING OFFICER TRE A TED THE SAME AS UNDISCLOSED INCOME. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A ) WH O DELETED THE SAID ADDITION BY OBSERVING AS FOLLOWS : - 4.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL. 4.3.1 FIRST OF ALL, COMING TO THE FINDING OF THE AO THAT THE BANK ACCOUNT NO .02980200000703 WITH THE BANK OF BARODA WAS UNDISCLOSED ACCOUNT OF THE APPELLANT, THIS CONTENTION OF THE AO SEEMS TO BE INCORRECT. THE APPELLANT HAS EXPLAINED THAT SHE WAS CARRYING OUT DEVELOPMENT ACTIVITY ON COMPLETED CONTRACT METHOD. SINCE THERE WAS NO I NCOME DURING THE YEAR, SHE HAS NOT SUBMITTED THE RELATED DETAILS LIKE P & L A/C, BALANCE SHEET WITH THE RETURN OF INCOME. JUST NON - FILING OF RELATED DETAILS WITH THE RETURN OF INCOME DOES NOT MAKE THE TRANSACTIONS UNACCOUNTED, PARTICULARLY, IN VIEW OF THE FACT THAT ALL THE TRANSACTIONS IN THE ABOVE STATED BANK ACCOUNT ARE BY CHEQUES. THERE ARE NO HUGE CASH DEPOSITS IN THIS BANK ACCOUNT, THE SOURCES OF WHICH COULD NOT BE EXPLAINED BY THE APPELLANT. THE SOURCES OF ALL DEPOSITS IN THIS BANK ACCOUNT HAVE BEEN P ROPERLY EXPLAINED BY THE APPELLANT AS DISCUSSED IN THE LATER PART OF THIS ORDER. THEREFORE, IT IS HELD THAT BANK ACCOUNT NO.02980200000703 WITH THE BANK OF BARODA IN THE NAME OF APPELLANT WAS NOT AN UNDISCLOSED BANK ACCOUNT. 4.3.2 NOW COMING TO THE SOURCE S OF CREDITS IN THIS BANK ACCOUNT, THERE ARE DEPOSITS FROM TOTAL SEVEN PARTIES DURING THE YEAR. THE APPELLANT HAS GIVEN CONFIRMATION LETTERS WITH PAN NOS. FROM SHUSHILABEN G. PATEL, DIPAK K. PATEL, JAYESH R. PATEL AND GUNVANTBHAI J. PATEL AND S ANGEETABEN P. PATEL. THE APPELLANT HAS RECEIVED CHEQUES OF RS.3,00,000/ - EACH FROM ALL THESE FIVE PARTIES ON 23 - 04 - 2008. THE COPIES OF BANK STATEMENTS OF THESE PARTIES ARE ON RECORD. ALL THESE PARTIES H AVE WITHDRAWN RS.3,00,000 / - EACH FROM THEIR FUNDS WI TH M/ S SHREE AMBICA SHROFF AND THE SAME FUNDS WERE INVESTED WITH THE APPELLANT. THEREFORE, THE SOURCES OF DEPOSITS ARE ALSO EXPLAINED AND ALL THE TRANSACTIONS ARE BY ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 3 OF 9 CHEQUES. THE APPELLANT HAS ALREADY GIVEN ADDRESSES, CONFIRMATION AND PAN NOS. OF ALL THE F IVE PARTIES. 4.3.3 THE SIXTH PARTY NAMED SHRI NITESH S. MISTRY HAS GIVEN RS.10,00,000 / - TO APPELLANT ON 03 - 10 - 2008. THE APPELLANT HAS SUBMITTED A COPY OF CONFIRMATION LETTER WITH PAN NO. FROM THIS PARTY. IT HAS BEEN INFORMED THAT SHRI NITESH S. MISTRY HA S TAKEN HOUSING LOAN OF RS. 15,00,000 / - FROM HDFC BANK AND THE FIRST INSTALLMENT OF RS.10 LAKHS WAS DISBURSED BY THE BANK ON 30 - 09 - 2008 WHICH WAS DEPOSITED BY HIM WITH THE APPELLANT ON 03 - 10 - 2008. AS AN EVIDENCE, THE LOAN SANCTION LETTER OF HDFC BANK AND COP Y OF CHEQUE ISSUED BY THE BANK HAS ALSO BEEN PLACED ON RECORD. THEREFORE, THE SOURCES OF DEPOSITS AND GENUINENESS AND CAPACITY OF CREDITOR HAVE BEEN SUFFICIENTLY EXPLAINED IN THIS CASE. 4.3.4 LASTLY, THE APPELLANT HAS SHOWN DEPOSITS OF RS.16 LAKHS FROM SHRI JITENDRABHAI P. PATEL. THE APPELLANT HAS GIVEN CONFIRMATION LETTER, ADDRESS, PAN NO. OF THIS PARTY. RS.16 LAKHS WAS RECEIVED FROM THIS PARTY AS BOOKING ADVANCE. 4.3.5 FROM THE ABOVE, IT IS SEEN THAT ALL THE TRANSACTIONS IN THIS BANK ACCOUNT ARE TH ROUGH CHEQUES, THE SOURCES OF WHICH HAVE BEEN EXPLAINED BY THE APPELLANT. THE AO MADE THE ADDITION U/S 69 OF THE ACT ON ABOVE AMOUNTS AS UNACCOUNTED INVESTMENT. HOWEVER, THESE CREDITS IN THE BANKS ACCOUNT CANNOT BE SAID TO BE IN THE NATURE OF INVESTMENTS. THESE ARE CREDITS APPEARING IN THE BANK ACCOUNT OF THE APPELLANT WHICH ARE REQUIRED TO BE EXAMINED IN VIEW OF THE PROVISION OF SECTION 68 OF THE ACT . T HERE ARE NUMBER OF JUDICIAL PRONOUNCEMENTS HOLDING THAT IF ASSESSES FURNISHES NAME, ADDRESS, PAN, BANK S TATEMENT OF CREDITOR WITH CONFIRMATION AND TRANSACTIONS ARE BY CHEQUE, THEN IT SHOULD BE PRESUMED THAT ASSESSEE HAS DISCHARGED THE BURDEN CAST UPON HIM. IN SUCH CASES, NO ADDITION CAN BE MADE TREATING THE DEPOSITS/CREDITS AS NON - GENUINE. VARIOUS JUDGEMENTS IN SUPPORT OF ABOVE FINDINGS ARE DISCUSSED IN SUBSEQUENT PARA - 5 OF THIS ORDER. THE SAME ARE APPLICABLE TO THIS ISSUE ALSO. 4.3.6 IN VIEW OF ABOVE FACTUAL AND LEGAL MATRIX, IT IS HELD THAT ALL THE TRANSACTIONS RELATED TO DEVELOPMENT ACTIVITY OF THE APPEL LANT ARE THROUGH CHEQUES AND THE SAME CANNOT BE SAID TO BE UNACCOUNTED TRANSACTIONS. THE APPELLANT HAS SUFFICIENTLY EXPLAINED THE SOURCES OF ALL THE CREDITS IN HER BANK ACCOUNT NO.02980200000703 WITH THE BANK OF BARODA BY FILING NAME, ADDRESS, PAN NO., CON FIRMATION LETTER AND SOURCES OF CREDITS IN CASE OF ALL THE DEPOSITORS. ACCORDINGLY, THE ADDITION MADE BY THE AO OF RS.41,05,1 00/ - IS HEREBY DELETED. 4. THE ASSESSING O FFICER IS AGGRIEVED OF THE RELIEF SO GRANTED BY THE LEARNED CIT(A) AND IS IN APPEAL B EFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 4 OF 9 6. WE FIND THAT THE CREDIT ENTRIES IN THE BANK ACCOUNT STAND DULY EXPLAINED, AND THERE IS NOTHING BEFORE US TO CONTROVERT THE VERY WELL REASONED FINDINGS BY THE LEARNED C I T(A) IN THIS REGARD. THE EVIDENCES IN SUPPORT OF EXPLANATIONS HAVE ALSO BEEN FILED BEFORE US. ONCE THESE CREDITS STAND EXPLAINED, EVEN IF THE ACCOUNT W A S INDEED UNDISCLOSE D BY THE ASSESSEE, NO ADDITIONS CAN BE MADE IN RESPECT OF CREDITS IN THE SAID ACCOUNT. LEARNED CIT(A) WAS THUS INDEED JUSTIFIED IN DELETING THE IMPUGNED ADDITION. AS REGARDS THE CONTENTION THAT THE ASSESSEE OUGHT TO HAVE OFFERED INCOME ON PERCENTAGE COMP LETION METHOD, WE FIND IT WHOLLY MISPLACED AS THERE IS NO ADDITION IN THIS REGARD. THE FACT THAT THE ASSESSEE HAS OFFERED IT AS TAX UNDER SECTION 44AD WOULD NOT, IN OUR VIEW, AFFECT IN THIS YEAR, PARTICULARLY WHEN NO ADDITION HAS BEEN MADE BY THE ASSESSIN G O FFICER ANYWAY . IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE APPROVE LEARNED C I T(A) S STAND AND DECLINE TO INTERFERE IN THE MATTER. 7. GROUND NOS.1 & 2 ARE THUS DISMISSED. 8. IN GROUND NO.3, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE : - 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN LAW AS WELL AS IN FACTS BY DELETING ADDITION OF RS.1678409/ - U/S. 69 R.W.S. 68 OF THE ACT TR E ATING THE SAME AS GENUINE WITHOUT APPRECIATING THAT BALANCE SHEET OF THE ASSESSEE DID NOT DISCLOSE THE TRANSACTIONS UNDER DISPUTE AND THAT BUSINESS OF THE CONSTRUCTION WAS DONE OUTSIDE BOOKS AND THE SAME DISCLOSED ONLY WHEN SCRUTINY WAS UNDERTAKEN AND ALSO ACCEPTING THE BUSIN ESS TRANSACTI ONS OF M/S SHREE AMBICA SHROFF AS GENUINE, WITHOUT APPRECIATING RELEVANT FACTS. 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD SHOWN A LIABILITY OF RS.41,70,280/ - PAYABLE TO ONE AMBICA SHROFF. IT W A S ALSO NOTICED TH AT THE OPENING BALANCE IN THIS ACCOUNT WAS RS.24,91,875/ - . IN EFFECT THUS RS.16,78,409/ - WERE SHOWN TO HAVE BEEN RECEIVED FROM AMBIICA SHROFF. HOWEVER, AS NOTED BY THE ASSESSING O FFICER, THE DOCUMENTS FIL E D BY THE ASSESSEE DO NOT EVIDENCE OR ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 5 OF 9 REFLECT THES E TRANSACTIONS . THIS AMOUNT WAS SAID TO BE USED FOR DEVELOPMENT ACTIVITY LEADING TO WORK IN PROGRESS BUT THE RELATED BALANCE SHEET FOR CIVIL CONSTRUCTION ACTIVITY W A S NOT FILED BEFORE THE ASSESSING O FFICER. ON THESE FACTS, THE ASSESSING OFFICER PROCEED ED TO TREAT RS.16,78,409/ - AS ADDITION UNDER SECTION 69 R.W.S. 68 . AGGRIEVED BY THI S STAND, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) WHO DELETED T H E SAID ANALYSIS BY OBSERVING AS FOLLOWS : - 5. REGARDING ADDITION OF RS.16,78,409 - IN THE CASE OF M/S SHREE AMBICA SHROFF, IT IS A FACT THAT THERE WAS AN OPENING BALANCE OF RS.24,91,875 / - IN THE NAME OF THIS PARTY AS ON 01 - 04 - 2008. DURING THE YEAR, THE LIABILITY HAS INCREASED TO RS.41,70,284 / - AS APPELLANT HAS FURTHER BORROWED RS. 16,78 ,4097 - FROM THIS PARTY. AS STATED IN THE ABOVE PARAGRAPH, MERE NON - FILING OF BALANCE SHEET OF DEVELOPMENT ACTIVITY ALONG WITH RETURN OF INCOME DOES NOT MAKE THE ACTIVITY AN UNDISCLOSED BUSINESS VENTURE OF THE APPELLANT. REGARDING THIS PARTY NAMED M/S SHREE AMBICA SHROFF, IT IS INFORMED THAT THIS CASE WAS ALSO ASSESSED BY THE SAME AO AND THE ASSESSMENT ORDER WAS PASSED IN THIS CASE ON THE SAME DATE I.E. 29 - 12 - 2011. A COPY OF THE ASSESSMENT ORDER HAS BEEN PLACED ON RECORD ARE VERIFIED. IN THIS ASSESSMENT ORDE R ADDITION OF RS.3,25,85,682 / - WAS MADE U/S 68 BY GIVING FOLLOWING FINDING : 'IN THE INSTANT CASE, DURING THE YEAR UNDER ASSESSMEN T TOTAL AMOUNTS RS.32585682 [RS.3 0447991 REPRESENTING THE NON - GENUINE DEPOSITS FROM THE ALLEGED 27 PARTIES AND RS.2137691 BEI NG INTEREST CLAIMED TO HAVE BEEN PAID TO THE SAID 27 PARTIES] ARE FOUND CREDITED IN THE BOOKS OF THE ASSESSEE BUT IT DID NOT OFFER PROPER, REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SAME. IN VIEW OF THE ABOVE FACTS AND FINDINGS, I HAVE NO OPTION EXCEPT TO TREAT THE SO - CALLED LOANS OF RS.32585682 AS NON - GENUINE LOANS AND TREAT THE SAME AS THE INCOME OF THE ASSESSEE APPLYING SECTION 68 OF THE INCOME TAX ACT, 1961. THEREFORE, I MAKE AN ADDITION OF RS.32585682 U/S 68 OF THE INCOME TAX ACT, 196 1. PENAL TY PROCEEDINGS U/S 271(1 )(C) ARE ALSO INITIATED ON THIS POINT FOR FILING INACCURATE PARTICULARS OF INCOME.' 5.1 AGAINST THE ABOVE ASSESSMENT ORDER, APPEAL WAS FILED AND MY PREDECESSOR VIDE ORDER DTD.19 - 11 - 2012 HAS DELETED THE ENTIRE ADDITION WITH THE FOL LOWING OBSERVATIONS : '6.5 IN THE LIGHT OF THE ABOVE LEGAL POSITION, IT IS TO BE CONSIDERED AS TO WHETHER BY SUBMITTING THE NECESSARY DOCUMENTS BEFORE THE AO, THE APPELLANT HAS DISCHARGED ITS INITIAL ONUS SO FAR AS SECTION 68 OF THE ACT IS CONCERNED. IN T HE PRESENT CASE, THE APPELLANT HAS DULY SUBMITTED THE COPY OF LEDGER ACCOUNT WITH CONFIRMATION, FULL ADDRESS, COPY OF P.A. NO., INCOME TAX ACKNOWLEDGEMENT RECEIPT ETC. AND THE DETAILS OF CHEQUE NO., NAME OF BANKS ETC. HAVE ALSO BEEN INDICATED IN THE COPIES OF ACCOUNTS. IT IS A MATTER OF RECORD THAT NO FURTHER INQUIRY HAS BEEN MADE BY THE AO. JUST ON ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 6 OF 9 THE BASIS OF DOCUMENTS SUBMITTED BY THE APPELLANT, THE AO HAS COME TO CONCLUSION THAT THE CREDITORS HAVE NO FINANCIAL CAPACITY TO MAKE DEPOSITS WITH THE APPELLA NT WITHOUT CONSIDERING THE FACT THAT CURRENT ACCOUNTS MAINTAINED WITH THE APPELLANT BY THE CREDITORS HAVE HUGE OPENING DEPOSIT / BALANCE IN RESPECT OF EACH OF THE CREDITORS AND SUCH OPENING BALANCE OF DEPOSIT IS HELD TO BE GENUINE IN THE ASSESSMENT ORDER P ASSED U/S 143(3) OF THE ACT IN THE EARLIER ASSESSMENT YEAR. IF THE AO HAD ANY DOUBT REGARDING THE MATERIAL PLACED ON RECORD BY THE APPELLANT INCLUDING THEIR RETURNS OF INCOME, COPIES OF ACCOUNT ETC, THE AO SHOULD HAVE MADE FURTHER INQUIRY FROM THE AO OF TH E CONCERNED CREDITORS OR COULD HAVE CALLED THOSE CREDITORS FOR FURTHER VERIFICATION OF THE TRANSACTIONS OF THE APPELLANT. NO SUCH EXERCISE HAS BEEN CONDUCTED BY THE AO AS IS EVIDENT FROM THE RECORDS. THE AO COULD HAVE ISSUED SUMMONS U/S 131 OF THE IT ACT T O THE CREDITORS OR INQUIRIES COULD HAVE BEEN MADE FROM THE ASSESSMENT RECORDS OF THESE CREDITORS AS WELL AS SPOT INQUIRIES COULD HAVE BEEN MADE ON THE GIVEN ADDRESSES OF THE CREDITORS. ONCE THE APPELLANT HAS FURNISHED ALL THE NECESSARY DETAILS AND DOCUMENT S, AS IN THE PRESENT CASE, IT HAS DISCHARGED THE INITIAL BURDEN WHICH LAY ON HIM U/S 68 OF THE ACT. ONCE THE APPELLANT PRODUCES THE BASIC RECORDS OF THE CREDITORS WHICH SHOW THE IDENTITY OF THE CREDITORS, COPY OF ACCOUNTS OF THE CREDITORS, DETAILS OF CHEQU E NOS., BANK ACCOUNTS THROUGH WHICH MONEY WAS TRANSFERRED TO THE APPELLANT AND EVIDENCE THAT ALL OF THEM ARE INCOME TAX ASSESSEES, IT CANNOT BE SAID THAT ASSESSEE HAS STILL TO DISCHARGE THE ONUS. ONCE THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS, ADDITION U/S 68 CANNOT BE MADE UNLESS EXPLANATION AND EVIDENCE FURNISHED BY THE APPELLANT ARE FOUND TO BE UNTRUE. FROM THE MATERIALS AVAILABLE ON RECORD, IT IS CLEARLY ESTABLISHED THAT THE APPELLANT HAS PROVED ALL THE INGREDIENTS SUCH AS GENUINENESS OF THE TRANSACT IONS, IDENTITY OF THE DEPOSITORS, CREDITWORTHINESS AND CAPACITY OF THE DEPOSITORS BY PROVIDING THE COPY OF P.A. NO. AND COMPLETE INCOME TAX DETAILS COUPLED WITH THE FACT THAT ALL THE TRANSACTIONS WERE THROUGH A/C PAYEE CHEQUES. THE ONUS NOW SHIFTS TO THE A O FOR DISPUTING THE APPELLANT'S CLAIM, EXPLANATION AND EVIDENCES. ONCE THE AO FAILS TO DISCHARGE THE ONUS LYING ON HIM, THE ADDITION MADE U/S 68 CANNOT BE JUSTIFIED. IN ORDER TO SUBSTANTIATE THE ISSUE UNDER CONSIDERATION, IT WOULD BE RELEVANT TO REFER TO A FEW JUDICIAL DECISIONS IN THE MATTER : (I) IN THE CASE OF CIT VS. ORISSA CORPN (P) LTD. [1986] 159 ITR 78 (SC), IT HAS BEEN HELD BY THE HON'BLE SUPREME COURT AS UNDER : 'IN THIS CASE THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITO RS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE THE INCOME - TAX ASSESSEES. THEIR INDEX NUMBER WAS IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER SECTION 131 AT THE INSTANCE OF THE. ASSESSEE, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDIT - WORTHY OR WERE SUCH WHO COULD ADVANCE THE ALLEGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO - CALLED ALLEGED CREDIT ORS. IN THOSE CIRCUMSTANCES, THE ASSESSEE COULD NOT DO ANY FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAD DISCHARGED THE BURDEN THAT LAY ON HIM, THEN IT COULD ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 7 OF 9 NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PE RVERSE OR BASED ON NO EVIDENCE. ' (II) IN THE CASE OF DCIT VS. ROHINI BUILDERS [2002] 256 ITR 360 (GUI) THE HON'BLE HIGH COURT OF GUJARAT HAS HELD THAT THE ASSESSEE FURNISHED COMPLETE ADDRESSES OF ALL THE CREDITORS ALONG WITH GIR NUMBERS / PAN AS WELL AS CONFIRMATIONS ALONG WITH COPIES OF ASSESSMENT ORDERS PASSED IN THE CASES OF INDIVIDUAL CREDITORS, WHEREVER AVAILABLE, AND COPIES OF RETURNS FILED BY THE CREDITORS IN THE REMAINING CASES. ALL LOANS WERE RECEIVED AND REPAID BY ASSESSEE BY ACCOUNT PAYEE CHEQ UES ALONG WITH INTEREST. THUS, ASSESSEE HAS DISCHARGED THE INITIAL ONUS WHICH LAY ON IT IN TERMS OF SEC. 68. ASSESSEE IS NOT FURTHER EXPECTED TO PROVE THE GENUINENESS OF CASH DEPOSITED IN THE BANK ACCOUNTS OF THE CREDITORS. MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDITORS COULD NOT BE SERVED OR THEY FAILED TO APPEAR BEFORE THE AO, THE LOANS TAKEN FROM THOSE CREDITORS COULD NOT BE TREATED AS NON GENUINE. (III) IN THE CASE OF PRAGATI CO - OPERATIVE BANK LTD. [2005] 278 ITR 170 (GUJ.) THE HON'BLE HIGH CO URT OF GUJARAT HAS HELD THAT - 'ASSESSING OFFICER MADE ADDITION IN ASSESSEE'S HAND AS INCOME FROM UNDISCLOSED SOURCES ON GROUND THAT THERE WERE VARIOUS DISCREPANCIES IN RECORDS MAINTAINED BY ASSESSEE, REGARDING ISSUANCE OF VARIOUS FIXED DEPOSIT RECEIPTS. SINCE ASSESSEE HAD DISCHARGED PRIMARY ONUS WHICH WAS ON IT BY OFFERING EXPLANATION THAT DEPOSITS WERE MADE BY THIRD PARTIES, VIZ., CUSTOMERS OF BANK, AND SAID EXPLANATION HAD NOT BEEN FOUND TO BE INCORRECT OR FALSE IN ANY MANN ER, ADDITION WAS TO BE DELETED . ' (IV) IN THE CASE OF CIT VS. RANCHOD JIVABHAI NAKHAVA IN TAX APPEAL NO.50 OF 2011THE HON'BLE HIGH COURT OF GUJARAT HAS HELD AS UNDER : 'ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY BY WAY OF ACCOUNTS PAYEE CHEQUES FROM THE LENDERS WHO ARE ALL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, THE INITIAL BURDEN UNDER SECTION 68 OF THE ACT WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THOSE ORDERS. ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSESSING OFFICER OF THOSE LENDERS, WHETHER IN THEIR RESPECTIVE RETURN THEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AND HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HAD BEEN LENT TO THE ASSESSEE. IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER OF THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECIDES TO EXAMINE THE LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDI TW ORTHINESS OF THE TRANSACTION, IN OU R OPINION, THE ASSESSING OFFICER DID NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SE CTION 68 OF THE INCOME TAX ACT. ' 6.6 SO FAR AS THE ASSERTION OF THE AO THAT THE CREDITORS ARE NOT FINANCIALLY CAPABLE FOR MAKING DEPOSITS WITH THE APPELLANT IS CONCERNED, IT I S TO BE NOTED THAT THE OPENING BALANCE / DEPOSIT IN RESPECT OF THE SAME ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 8 OF 9 CREDITORS HAS ALREADY BEEN ACCEPTED AS GENUINE IN EARLIER YEARS. FURTHER, THE AMOUNT OF INCOME DISCLOSED BY THE CREDITORS AS PER THEIR INCOME TAX RETURNS 4URING THE YEAR UNDER CONSIDER ATION IS NOT THE EXHAUSTIVE YARDSTICK TO CONCLUDE THAT CREDITORS HAVE NO FINANCIAL CAPACITY TO MAKE DEPOSITS SINCE DEPOSITS CAN BE MADE NOT NECESSARILY OUT OF THE INCOME OF THE YEAR UNDER CONSIDERATION BUT OUT OF THE ACCUMULATED CAPITAL OF THE CREDITORS OR LOAN TAKEN FROM SUB - CREDITORS. IN RESPECT OF MAJORITY OF THE CREDITORS, IT IS NOTED THAT THEY HAVE RECEIVED HUGE FUNDS BY ACCOUNT PAYEE CHEQUES FROM THE FIRM M/S R. M. TOBACCO CO. DURING THE YEAR UNDER CONSIDERATION. ONCE A CREDITOR IS A REGULAR INCOME - TA X ASSESSEE SINCE LONG, IT CANNOT BE SAID THAT HE IS NOT A MAN OF MEANS. MOREOVER, THE FACT THAT ALL THE CREDITORS ARE FILING THEIR RETURNS OF INCOME THROUGH ONE CA FIRM ONLY, ALSO DOES NOT PROVE THE NON - GENUINENESS OF TRANSACTIONS UNLESS ADVERSE EVIDENCE I S BROUGHT ON RECORD. 6.8 IN VIEW OF THE ABOVE, IT IS QUITE OBVIOUS THAT THE FACTS OF ALL THE JUDICIAL DECISIONS RELIED UPON BY THE APPELLANT ARE DISTINCTLY DIFFERENT FROM THE FACTS OF THE PRESENT CASE AND, THEREFORE, THESE DECISIONS ARE NOT RELEVANT FOR THE PRESENT CASE. IN THE PRESENT CASE, THE APPELLANT HAS DISCHARGED ITS INITIAL ONUS BY PRODUCING THE RELEVANT DOCUMENTS IN RESPECT OF ALL I THE CREDITORS WHO ARE MAINTAINING CURRENT ACCOUNTS WITH THE APPELLANT. THE AO HAS NOT MADE/ ANY FURTHER INQUIR Y OR VERIFICATION SUBSEQUENT TO THE DISCHARGE OF INITIAL ONUS BY THE APPELLANT. THE OPENING DEPOSIT AVAILABLE WITH THE APPELLANT IN RESPECT OF THE CREDITORS IS DULY ACCEPTE D AS GENUINE IN EARLIER YEARS.' 5.2 IN VIEW OF ABOVE, IT IS CLEAR THAT ALL THE BU SINESS TRANSACTIONS OF M/S SHREE AMBICA SHROFF HAS BEEN HELD AS GENUINE BY CIT (APPEAL) IN THAT CASE. IN VIEW OF THIS AND IN VIEW OF THE FACT THAT AL L THE TRANSACTIONS WERE BY CHEQUES, IT IS HELD THAT THE LIABILITY SHOWN BY THE APPELLANT IN THE NAME OF M /S SHREE AMBICA SHROFF WAS GENUINE AND THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.16,78,409/ - AND THE SAME IS ACCORDINGLY, DELETED. AS A RESULT, GROUND NO . 1 & 2 ARE HEREBY ALLOWED. 10. AGGRIEVED BY THE RELIEF SO GRANTED BY THE LEARNED CIT(A), THE ASSESSING O FFICER IS IN APPEAL BEFORE US. 11. WE HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 12. AS LEARNED CIT(A) RIGHTLY INDICATES , MERELY NON FILING OF BALANCE SHEET OF DEVELOPMENTAL ACTIVITY WOULD NOT MEAN THAT THE RELATED TRANSACTIONS CAN BE TREATED AS UNDISCLOSED INCOME AND WORK IN PROGRESS AS UNDISCLOSED ASSET. THE S E ISSUES ARE REQUIRED TO BE CONSIDERED ON MERITS, AND SIMPLY BECAUSE RELEVAN T INFORMATION WAS NOT ITA NO. 3 110 / AHD/201 3 ASSESSMENT Y EAR: 20 0 9 - 10 PAGE 9 OF 9 FILED ALONG WITH THE INCOME TAX RETURN, IT CANNOT BE INFERRED THAT THERE WAS NO BONAFIDE BUSINESS A T ALL AND ALL THESE TRANSACTIONS ARE BOGUS. IN ANY EVENT, THE RELATED TRANSACTIONS HAVE BEEN ACCEPTED IN APPEAL IN THE HANDS OF AMBICA SHROFF, AND THERE IS NOTHING TO SHOW THAT THIS APPELLATE ORD ER IS REVERSED. LEARNED CIT(A ) WAS THUS QUITE JUSTIFIED IN DELETING THIS ADDITION AS WELL. 13. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE APPROVE THE CONC LUSIONS ARRIVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 14. GROUND NO.3 IS ALSO DISMISSED. 1 5 . IN THE RESULT, THE APPEAL IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF MARCH , 2017 . SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 3 RD DAY OF MARCH , 201 7 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD