ACIT Central , Ujjain V. M/s Raaj Medisafe India Ltd, DHAR

ITA 317/Ind/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9296 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 26-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Opportunity of cross examination; Earning of tax free income; Source of fund; Non compliance; Onus to prove; Bogus loan; TDS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 153A; 14A; 115JB; 133(6)

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING IT(SS)A No.117/Ind/2020 Assessment Year:2012-13 ACIT (Central), Ujjain बनाम/ Vs. Mangala Bangur Ujjain (Appellant) (Respondent ) P.A. No.ABSPB5501C Revenue by Shri P.K. Mitra, CIT-DR Assessee by S/Shri Anil Kamal Garg & Arpit Gaur, CAs ITA No.317 & 318/Ind/2020 Assessment Year:2012-13 & 2017-18 ACIT (Central), Ujjain बनाम/ Vs. M/S Raj Medisafe India Ltd., Dhar (Appellant) (Respondent ) P.A. No.AABCM1901C Revenue by Shri Amit Soni, Sr.DR Assessee by S/Shri Anil Kamal Garg & Arpit Gaur, CAs Date of Hearing: 03.01.2022 Date of Pronouncement: 07.02.2022 आदेश / O R D E R PER MANISH BORAD, A.M: The above captioned appeals filed at the instance of the Revenue for Assessment Year 2012-13 & 2017-18 are directed against the separate orders of Ld. Commissioner of Income Tax M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 2 (Appeals) (in short ‘Ld.CIT]-3, Bhopal evenly dated 16.03.2020 which are arising out of the order u/s 147 r.w.s 143(3) of the Income Tax Act 1961(In short the ‘Act’) dated 27.12.2019 & u/s 143(3) of the Act dated 25.12.2019 resp. framed by ACIT(Central)-2, Indore. The revenue has raised following grounds of appeal in IT(SS)ANo.117/Ind/2020 in the case of Mangala Bangur for A.Y. 2012-13: “1.On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the additions for A.Y. 2012-13 of Rs.1,64,54,950/- made u/s 68 as unexplained cash credits and of Rs.2,68,779/- as non-genuine expenditure. The CIT(A) has deleted these additions:- i.On the grounds of cross-examination without appreciating the fact that the reasons whose statements were relied upon in the assessment order are the very persons who own, control, manage, operate & run the assessee-group and therefore in the name of natural justice, the assessee-group cannot claim to cross examine itself. ii.Without appreciating the fact that copies of all such statements were provided to the assessee-group well in advance, however, the assesse has not been able to put forward any cogent rebuttal in the matter. iii.While completely ignoring para 7.0 of the assessment order wherein it is elaborated that the assessee –group suo moto produced the directors of the dummy companies, whose statement on oath were recorded, however, the statements were found to be tutored & parroted and crafted as an after thought. iv.While wrongfully deducting in page 57 of the appellate order that the AO questioned Shri Kailash Garg’s capacity to advance loan to the assessee whereas, the AO in the assessment order has only established that Shri Kailash Garg, was a dummy director of a dummy company, and the said dummy company had advanced alleged loan to the assessee. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the aforesaid additions, while insisting that since the lender party was making some paper formalities, it is not M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 3 a dummy concern without appreciating that all the dummy/shell/bogus/paper/briefcase entries used to be perfect in papers, otherwise, how will they achieve their desired purpose. Therefore, genuineness of an entity cannot be judged by the heap of papers it has created, but only through its activities. 3. On the facts and i the circumstances of the case, the ld. CIT(A) has erred in deleting the aforesaid additions, while stating that the additions were made on the basis of goes work, assumption and presumption and on mere suspicion and that has ignored that the very content of the assessment order establishes beyond doubt that the lender company was a dummy/shell/bogus/paper/briefcase entity, and the assessee’s claimed transactions with it were merely an eye-wash. 4. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions, by making factually incurred conclusion that the same AO has made assessment u/s 147/143(3) and 143(3) in the cases of these dummy concerns, and has drawn no negative inference. Whereas, the said AO has made the similar observations/conclusions(i.e. negative inference) –as made in the case of the assesse –in the cases of all such dummy concerns. 5. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions, while stating that noting incriminating was found in the course of search and survey action in the assessee-group, which could warrant such an addition. He has ignored that incriminating material/information were indeed found during such actions, and the same are elaborately discuss in the body of the assessment order while making the addition. 6. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions while not appreciating that merely making transaction through banking channels, payment of interest on alleged loanst & making TDS thereon and repayment of the alleged loasn cannot make the transactions as genuine, when the activities of the entire group had been carried out in such a fashion to route and rotate the unaccounted cash. 7. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions in dismissing the reliance placed by the AO on various case-laws while ignoring the facts and circumstances of the case in its entirety. 8. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions u/s 14A of Rs.46,18,401/- for A.Y. 2012-13, while observing that the assessee had not used borrowed funds for making investment in M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 4 shares. The ld. CIT(A) has ignored that the assessee did incure interest expenses for the relevant year and had the assessee not borrowed the amount for its business, there would have been no need to incur interest expenses. The ld. CIT(A) has also not appreciated that the assessee cannot claim that so & so amount was its own money which was invested, and so & so amount was borrowed money which was utilized for business. He has also not appreciated that this type of artificial divisions has not basis and is arbitrary, and the money cannot be compartmentalized in this way. 9.On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions u/s 14A while incorrectly observing that the assesse had not claimed any exempt income on the investment made, since it is not necessary to earn exemption income during the year for working of 14A disallowance as is clarified by the CBDT’s Circular No.5/2014 dated 11 th February, 2014. 10. The appellant reserves the right to add, amend or alter the grounds of appeal on or before the date the appeal is finally heard for disposal. The revenue has raised following grounds of appeal in ITANo.317/Ind/2020 in the case of Raj Medisafe India Ltd. for A.Y. 2012-13: “1.On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the additions of Rs.2,39,04,519/- made u/s 68 as unexplained cash credits. i. On the grounds of cross-examination without appreciating the fact that the reasons whose statements were relied upon in the assessment order are the very persons who own, control, manage, operate & run the assessee-group and therefore in the name of natural justice, the assessee-group cannot claim to cross examine itself. ii. Without appreciating the fact that copies of all such statements were provided to the assessee-group well in advance, however, the assesse has not been able to put forward any cogent rebuttal in the matter. iii. While completely ignoring para 7.0 of the assessment order wherein it is elaborated that the assessee –group suo moto produced the directors of the dummy companies, whose statement on oath were recorded, however, the statements were found to be tutored & parroted and crafted as an after thought. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 5 iv. While wrongfully deducting in page 57 of the appellate order that the AO questioned Shri Kailash Garg’s capacity to advance loan to the assessee whereas, the AO in the assessment order has only established that Shri Kailash Garg, was a dummy director of a dummy company, and the said dummy company had advanced alleged loan to the assessee. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the aforesaid additions, while insisting that since the lender party was making some paper formalities, it is not a dummy concern without appreciating that all the dummy/shell/bogus/paper/briefcase entries used to be perfect in papers, otherwise, how will they achieve their desired purpose. Therefore, genuineness of an entity cannot be judged by the heap of papers it has created, but only through its activities. 3. On the facts and i the circumstances of the case, the ld. CIT(A) has erred in deleting the aforesaid additions, while stating that the additions were made on the basis of goes work, assumption and presumption and on mere suspicion and that has ignored that the very content of the assessment order establishes beyond doubt that the lender company was a dummy/shell/bogus/paper/briefcase entity, and the assessee’s claimed transactions with it were merely an eye-wash. 4. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions, by making factually incurred conclusion that the same AO has made assessment u/s 147/143(3) and 143(3) in the cases of these dummy concerns, and has drawn no negative inference. Whereas, the said AO has made the similar observations/conclusions(i.e. negative inference) –as made in the case of the assesse –in the cases of all such dummy concerns. 5. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions, while stating that noting incriminating was found in the course of search and survey action in the assessee-group, which could warrant such an addition. He has ignored that incriminating material/information were indeed found during such actions, and the same are elaborately discuss in the body of the assessment order while making the addition. 6. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions while not appreciating that merely making transaction through banking channels, payment of interest on alleged loanst & making TDS thereon and repayment of the alleged loasn cannot make the transactions as genuine, when the activities of the entire group M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 6 had been carried out in such a fashion to route and rotate the unaccounted cash. 7. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions in dismissing the reliance placed by the AO on various case-laws while ignoring the facts and circumstances of the case in its entirety. 8. The appellant reserves the right to add, amend or alter the grounds of appeal on or before the date the appeal is finally heard for disposal. The revenue has raised following grounds of appeal in ITANo.318/Ind/2020 in the case of Raj Medisafe India Ltd for A.Y.2017-18: “1.On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the additions of Rs.79,00,000/- made u/s 68 as unexplained cash credits and of Rs.17,41,432/- as non- genuine expenditure . i.On the grounds of cross-examination without appreciating the fact that the reasons whose statements were relied upon in the assessment order are the very persons who own, control, manage, operate & run the assessee-group and therefore in the name of natural justice, the assessee-group cannot claim to cross examine itself. ii.Without appreciating the fact that copies of all such statements were provided to the assessee-group well in advance, however, the assesse has not been able to put forward any cogent rebuttal in the matter. iii.While completely ignoring para 7.0 of the assessment order wherein it is elaborated that the assessee –group suo moto produced the directors of the dummy companies, whose statement on oath were recorded, however, the statements were found to be tutored & parroted and crafted as an after thought. iv.While wrongfully deducting in page 57 of the appellate order that the AO questioned Shri Kailash Garg’s capacity to advance loan to the assessee whereas, the AO in the assessment order has only established that Shri Kailash Garg, was a dummy director of a dummy company, and the said dummy company had advanced alleged loan to the assessee. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the aforesaid additions, while insisting that since the lender party was making some paper formalities, it is not a dummy concern without appreciating that all the M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 7 dummy/shell/bogus/paper/briefcase entries used to be perfect in papers, otherwise, how will they achieve their desired purpose. Therefore, genuineness of an entity cannot be judged by the heap of papers it has created, but only through its activities. 3. On the facts and i the circumstances of the case, the ld. CIT(A) has erred in deleting the aforesaid additions, while stating that the additions were made on the basis of goes work, assumption and presumption and on mere suspicion and that has ignored that the very content of the assessment order establishes beyond doubt that the lender company was a dummy/shell/bogus/paper/briefcase entity, and the assessee’s claimed transactions with it were merely an eye-wash. 4. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions, by making factually incurred conclusion that the same AO has made assessment u/s 147/143(3) and 143(3) in the cases of these dummy concerns, and has drawn no negative inference. Whereas, the said AO has made the similar observations/conclusions(i.e. negative inference) –as made in the case of the assesse –in the cases of all such dummy concerns. 5. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions, while stating that noting incriminating was found in the course of search and survey action in the assessee-group, which could warrant such an addition. He has ignored that incriminating material/information were indeed found during such actions, and the same are elaborately discuss in the body of the assessment order while making the addition. 6. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions while not appreciating that merely making transaction through banking channels, payment of interest on alleged loanst & making TDS thereon and repayment of the alleged loasn cannot make the transactions as genuine, when the activities of the entire group had been carried out in such a fashion to route and rotate the unaccounted cash. 7. On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in deleting the aforesaid additions in dismissing the reliance placed by the AO on various case-laws while ignoring the facts and circumstances of the case in its entirety. 8. The appellant reserves the right to add, amend or alter the grounds of appeal on or before the date the appeal is finally heard for disposal. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 8 2. Registry has informed that these appeals filed on 22.10.2020 & 27.10.2020 are time-barred by 46 & 51 days. Ld. CIT-DR submitted that due to current pandemic Covid-19, the delay occurred which may be condoned in view of guidelines of Govt. of India and Hon’ble Supreme Court. On the other hand, Ld. counsel for the assessee submitted that delay should not be condoned. We find that vide Gazette “CG-DL-E-29092020- 222110 No.63 New Delhi, 29/2020 issued by Secretary to Govt. of India, it has been directed that in computing the period of limitation for any appeal, the period for 20.3.2020 till 31.12.2020 or 31.3.202, as the case may be, shall stand excluded. Further, the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020 dated 08.3.2021 has issued directions that in computing the period of limitation for any suit/appeal, the period for 15.3.2020 till 14.3.2021 shall stand excluded. Considering the same, we condone the delay in filing the revenue’s appeal and admit the same for hearing. 3. As the issues raised in all these appeals are mostly common and relates to same group of assessee, at the request of all the parties, these appeals were heard together and the same are being disposed of by this common order for sake of convenience and brevity. 4. From perusal of the grounds we find that the issue in dispute raised by the revenue relates to the finding of Ld. CIT(A) deleting the additions made by the Ld. AO u/s 68 of the Act for M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 9 unexplained cash credit from alleged accommodation entry provider/bogus companies and interest paid thereon. 5. Facts in brief common to both the assessees are that a search action was carried out u/s 132 of the Act on 27.07.2017 at Shriji Polymers (India) Ltd. (Bangur) Group as well as connected individuals/concerns including the assessee(s) in the instant appeal before us. Assessment u/s 153A r.ws. 143(3) of the Act were completed after serving of notice u/s 153A of the Act and assessee(s) filed the return of income in compliance thereto and made submissions and filed of details as called for by the ld. AO. As for as, the instant years under appeal are concerned details of the additions made by the ld. AO for unexplained credit u/s 68 of the Act and interest disallowance are that: a) In the case of the assessee Mangala Bangur during A.Y. 2012-13 unsecured loan of Rs.1,64,54,950/- was received from following companies were held to be unexplained u/s 68 of the Act by ld. AO:- Name of Company Amount(Rs.) i. Navyug Vyapaar Pvt. Ltd.(in short NVPL) Rs.29,00,000/- ii.M/s Famour Vanijya Pvt. Ltd. (in short FVPL) Rs.1,10,54,950/- iii. M/s Dwarkesh Finance Ltd. (in short DFL) Rs.25,00,000/- Total Rs.1,64,54,950/- Ld. AO also disallowed the interest paid to following companies: i.M/s Famour Vanijya Pvt. Ltd. (in short FVPL) Rs.89,167/- M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 10 ii. M/s Dwarkesh Finance Ltd. (in short DFL) Rs.1,01,712/- iii. M/s Patni Industries Ltd. (in short PIL) Rs.77,900/- Total Rs.2,68,779/- Ld. AO also made disallowance u/s 14A of the Act at Rs.46,18,401/- on account of investments held by assessee. b). As regards another assessee namely Raj Medisafe India Ltd. ld. AO made addition for unexplained cash credit u/s 68 of the Act for A.Y. 2012-13 and A.Y. 2017-18 for unsecured loan of Rs.2,39,04,519/- and Rs.79,00,000/- respectively, received from Navyug Vyapaar Pvt. Ltd. and also disallowed interest of Rs. 17,41,432/- paid on the unsecured loan taken from Navyug Vyapaar Pvt. Ltd. during A.Y. 2017-18. 6. The common observation of the Ld. AO while making aforesaid additions u/s 68 of the Act in case of both the assessee(s) is that the alleged cash creditors are accommodation entry providers and bogus companies and assessee failed to prove the identity and creditworthiness of the cash creditors and the genuineness of the transaction of loan taken from these companies. Ld. AO has also taken the basis of statement of third person recorded in some other cases to hold that the assessee(s) that the assessee(s) have routed therein unaccounted income in the form of unsecured loan from alleged cash creditors and since the loans are held to be bogus and non-genuine the interest expenditure claimed thereon was also disallowed. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 11 7. The assessee(s) carried the matter before the Ld. CIT(A) who deleted the addition made u/s 68 of the Act and also allowed interest expenditure observing that: i) the assessee has placed sufficient material to explain the alleged cash credits, ii) Ld. AO has not provided opportunity of cross examination to the assessee(s) with the person whose statements were relied by the Ld. AO, iii) impugned additions are made merely on the basis of guess work, assumption and presumption, iv) the alleged cash creditors are not stranger to the assessee(s) and they are part of the same group and the assessments of the alleged cash creditors have been carried out u/s 147 r.w.s. 143(3) of the Act by the same Ld. AO who has made the addition in the case of assessees in the instant appeal, v) Ld. AO erred in making additions without appreciating that transaction of loans and interest expenditure have been carried out through banking channel and tax has been deducted at source on the interest and the alleged loans have been repaid during the year/subsequent year. 8. Aggrieved revenue is now in appeal before this Tribunal raising various grounds of appeal as mentioned in the preceding paras in case of both the assessee(s) challenging the finding of Ld. CIT(A) deleting the additions for unexplained cash credit u/s 68 of the Act made by the Ld. AO deleting the disallowance of interest expenditure and disallowance u/s 14A of the Act. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 12 9. Ld. DR vehemently argued supporting the order of ld. AO and also filed a paper book dated 12.01.2022 in the case of Raj Medisafe India ltd for A.Y. 2012-13 and 2017-18 and contended that the alleged cash creditors are accommodation entry providers and loans taken are bogus and liable for addition u/s 68 of the Act and interest expenditure is disallowable and disallowance u/s 14A of the Act was rightly called for. 10. Per contra Ld. counsel for the assessee apart from heavily relying the detailed finding of fact and judicial precedents observed by ld. CIT(A) also referred to the synopsis filed in case of all the assessees. In the case of assessee Mangala Bangur assessee has filed complete details with the documentary evidences in support of the identity and genuineness of the cash creditors running in four volumes of the paper books containing 1219 pages also includes decisions relied in support of the contentions that the addition u/s 68 of the Act was uncalled for and interest expenditure was allowable. Similarly in the case of Raj Medisafe India Ltd Ld. counsel for the assessee apart from relying on the finding of Ld. CIT(A) also referred to the paper book dated 18.11.2021 containing 371 pages for A.Y. 2012-13 and paper book containing 464 pages for A.Y. 2017-18. 11. Further Ld. counsel for the assessee also submitted that the issue of unexplained cash credit received from alleged cash M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 13 creditors Navyug Vyapaar Pvt. Ltd, M/s Famour Vanijya Pvt. Ltd. & M/s Dwarkesh Finance Ltd. has already been adjudicated and held in favour of the assessee by the Hon'ble Tribunal, Indore Bench in the case of group concern M/s Ariba foods Pvt. Ltd. & Ors. Vs. ACIT (2021) 40 ITJ 101, I.T.A.T., Indore and this decision is squarely applicable on the facts of the instant appeals as same cash creditors have been examined by Hon'ble Tribunal and it has been held that they are not accommodation entry provider and unsecured loan taken from there companies are genuine and duly explained. 12. We have heard rival contentions, perused the records placed before us. In the case of the assessee namely Mangala Bangur revenue is in appeal for A.Y. 2012-13 raised ground no.1 to 7 challenging the finding of Ld. CIT(A) deleting the addition for unexplained cash credit made u/s 68 of the Act by the Ld. AO for the unsecured loan taken and disallowing the interest paid thereon during A.Y. 2012-13 to following companies:- Name of company Amount (Rs.) i. Navyug Vyapaar Pvt. Ltd.(in short NVPL) Rs.29,00,000/- ii. M/s Famour Vanijya Pvt. Ltd. (in short FVPL) Rs.1,10,54,950/- iii. M/s Dwarkesh Finance Ltd. (in short DFL) Rs.25,00,000/- Total Rs.1,64,54,950/- Interest Expenditure Disallowance Name of Companies Amount (Rs) M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 14 i. Navyug Vyapaar Pvt. Ltd.(in short NVPL) Rs.89,167/- ii. M/s Famour Vanijya Pvt. Ltd. (in short FVPL) Rs.1,01,712/- iii. M/s Dwarkesh Finance Ltd. (in short DFL) Rs.77,900/- Total Rs.2,68,779/- 13. We find that the issues raised by the revenue are common and the revolve around the alleged cash creditors so as to examine that whether the assessee has been able to prove that the provisions of section 68 of the Act are not applicable on the loans taken from the alleged cash creditors which are namely Navyug Vyapaar Pvt. Ltd.(in short NVPL), M/s Famour Vanijya Pvt. Ltd. (in short FVPL), M/s Dwarkesh Finance Ltd. (in short DFL). We find that the assessee has filed voluminous paper books with various documents in order to prove that the alleged three cash creditors namely Navyug Vyapaar Pvt. Ltd.(in short NVPL), M/s Famour Vanijya Pvt. Ltd. (in short FVPL), M/s Dwarkesh Finance Ltd. (in short DFL) are neither accommodation entry provider not they are bogus or dummy company and the alleged cash creditors are regularly assessed to tax for past many years and for few year have been assessed by the same Assessing Officer who has made the addition in the hands of the assessee(s) in the instant appeal. Documents are also filed to prove that the transactions have been carried out through banking channels and TDS deducted on interest payments and loans have been repaid subsequently. Documents are also filed to prove that Ld. AO has made the addition merely on the basis of statement of third person M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 15 without providing any opportunity of cross examination to the assessee. 14. Since the issue remains only to examine the identity and creditworthiness of the cash creditors namely Navyug Vyapaar Pvt. Ltd.(in short NVPL), M/s Famour Vanijya Pvt. Ltd. (in short FVPL), M/s Dwarkesh Finance Ltd. (in short DFL) and genuineness of the transactions between the assessee and cash creditors, we find that this Tribunal in the case of Ariba Foods Pvt. Ltd. & Ors. (supra) has elaborately dealt this issue and decided in favour of the assessee by confirming the finding of ld. CIT(A) deleting the addition made by the ld. AO. In case of Mangala Bangur alleged unsecured loan was taken from Navyug Vyapaar Pvt. Ltd.(in short NVPL), M/s Famour Vanijya Pvt. Ltd. (in short FVPL), M/s Dwarkesh Finance Ltd. (in short DFL), and we find that issue of unexplained cash credit u/s 68 of the Act in the case of all these three company Navyug Vyapaar Pvt. Ltd.(in short NVPL), M/s Famour Vanijya Pvt. Ltd. (in short FVPL), M/s Dwarkesh Finance Ltd. (in short DFL) have been discussed in detail in the order of this Tribunal holding that they are genuine companies and are not bogus /accommodation entry providers. Relevant observations are extracted below: 15. We have heard rival contentions and perused the records produced before us and carefully gone through the judgments referred to by both the parties. In the instant case of M/s. Ariba Foods Pvt. Ltd, Revenue has challenged the finding of Ld. CIT(A) by way of 7 grounds of appeal but the grievance challenging the finding of Ld. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 16 CIT(A) deleting the addition of Rs.12,44,12,690/- is on two grounds firstly Ld. CIT(A) erred in deleting the addition observing that assessee was not given the opportunity to cross examine which thus denied the opportunity of natural justice and secondly Ld. CIT(A) erred on merits in accepting the identity, genuineness and creditworthiness of the three cash creditors namely M/s DFL, M/s FVPL and M/s NVPL. 16. We observe that the assessee was subjected to survey u/s 133A of the Act on 27.7.2017. In the assessment proceedings carried out through CASS assessee was directed to explain the fresh unsecured loan taken during the year. Detalied replies were filed by the assessee which could partly satisfied the Ld. A.O and he was of the view that unsecured loan taken from following 3 companies could not be explained by the Ld. A.O and thus provision of Section 68 of the Act are applicable. Name of Company Amount (Rs.) i) M/s.Dwarkesh Finance Ltd.[(In short) ‘DFL’] 15,26,111/- ii) M/s. Famous Vanijya Pvt. Ltd.[ .[(In short) ‘FVPL’] 2,15,03,302/- iii) M/s. Navyug Vyapar Pvt. Ltd. [(In short) ‘NVPL’] 10,13,83,277/- Total 12,44,12,690/- 17. Against the addition assessee preferred appeal before Ld. CIT(A) and succeeded who deleted the addition on the basis of the following 4 observations:- (a) The AO erred in making additions merely on the basis of statements of third parties recorded by the Investigation Wing and without providing opportunity of their cross examination before making the impugned addition; (b) The AO erred in converting case selected for limited scrutiny to complete scrutiny; (c) The AO erred in making additions on suspicion, surmise and conjecture basis and without having any incriminating material on record found from the residential premises of the appellant relating to the year in which additions have been made; (d) The AO erred in 'considering the documentary evidences filed in support of creditworthiness of the lender and genuineness of the transaction including explaining source of source. 18. Through Ground No. 1, the Revenue has challenged the finding of the Ld. CIT(A) in deleting the addition of Rs. 12,44,12,690/- made M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 17 u/s. 68 of the Act on the ground of cross examination, without appreciating the fact that the persons whose statements were relied upon in the assessment order are the persons who own, control, manage, operate and run the assessee group, including the assessee company and therefore, in the name of natural justice, the assessee group could not have claimed to cross examine itself. 19. We observe that the Ld. CIT(A) has dealt with the issue of cross examination at para 4.3.2 (a) of his order. We find that the Ld. CIT(A) has given a categorical finding that despite having on record the correct new address of one of the lender companies namely, M/s. Navyug Vyapar Pvt. Ltd. being at Shop No. 126, Dawa Bazar, Madhav Club Road, Ujjain, the AO had sent commission for the old address to DDIT(Inv.) – Kolkata. The Ld. CIT(A) further observed that the AO has made reference of the salaries drawn by the directors of the lender companies for adjudging the capacity of lending by the lender companies, but, the AO failed to appreciate that the loans were given by the lender companies and not by its directors in their individual capacity. The Ld. CIT(A) also observed that the AO has concentrated his findings on the basis of various statements given by Shri Amit Kumar Kedia, Shri Kailash Kumar Garg, Shri Amit Jhavar, Shri Rajesh Gupta, Shri Abizer Pithewan, Shri Amrish Parmar, Smt. Chhaya Parmar, Shri Avinash Parasram Bapuskar, but, the AO did not mention about these statements in Notices or questionnaire issued time to time. The AO has completely drawn his findings on the basis of these statements which were recorded behind the back of the assessee and no opportunity of cross examination of these persons were provided to the assessee. Then the Ld. CIT(A) relied upon the decision of the Hon’ble Supreme Court in the case of Andaman Timber Industries vs. Commission of Central Excise Kolkata, in Civil Appeal No. 248 of 2006 for the proposition that in absence of cross examination of parties, the assessment proceedings are required to be quashed. The Ld. CIT(A) further relied upon the decision of the Hon’ble High Court of Gujarat in the case of Praful Chunnilal Patel vs. M.J. Makwana [236 ITR 832 (Guj.)] and JCIT & Ors. vs. George Williamson (Assam) Ltd. 258 ITR 126 (Guj.) for holding that the statement of third party cannot be relied upon without having any corroborative evidence. The CIT(A) also relied upon the decision of the Hon’ble Supreme Court in the case of Kishanchand Chellaram vs. CIT 125 ITR 713 (SC) in which the Apex Court held that adverse inference cannot be drawn against the assessee from the statement of third parties. The Ld. CIT(A) further relied upon the decision of Hon’ble High Court of Gujarat in the case of CIT vs. Indrajeet Singh Suri (2013) 33 Taxmann 281 (Guj.) in which the Hon’ble Court held that where additions have been made on the basis of statements of persons who are not allowed to be cross examined by the assessee, M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 18 additions were not sustainable. The Ld. CIT(A) further held that non providing the opportunity of cross examination was a serious flaw on principles of natural justice which renders the order a nullity. 20. We find that during the course of the search/survey operations carried out in the various entities of the Shriji Polymer Group, including the case of the assessee company, no incriminating material or loose paper was found from which it could have been inferred that the loan transactions carried out by the appellant company with the subject three lender companies were not genuine and that the lender companies were merely paper companies. In the entire body of the assessment order, there is no mention of any independent inquiry conducted by the AO himself and the Ld. AO has made reference of some statements of various persons recorded either during the course of the search/survey in the Shriji Polymer Group or even prior to that. The Ld. AO has made reference of some statement of Amit Kumar Kedia recorded by the DDIT (Inv.) – Kolkata, u/s. 131, on 26.08.2014. As the previous year relevant to the instant case is F.Y. 2015-16 and the statement of Shri Amit Kumar Kedia has no direct nexus with the loan transactions carried out by the assessee company during the year. Even from the statements of various persons recorded during the course of search/survey in the various business premises of Shriji Polymers Group, we could not find any adversity in the statements of Directors of the lender companies to support the assumption of the Ld. AO that the loan transactions carried out by the assessee company with them were not genuine. Rather the whole case of the Ld. AO is hinging upon the statement of various persons and during the entire course of the assessment proceedings, not even once in any notice or questionnaire, the Ld. AO whispered about recording of such statements or his proposal to rely upon such statements. In our considered view, merely because the persons whose statements were recorded were associates or employees of the assessee company, the statutory requirement of confronting the assessee with such statements could not have been dispensed with and the Ld. AO was duty bound to provide an opportunity to the assessee to comment upon the statement of such persons and to cross examination of them, if requested by the assessee. We find that during the course of the assessment proceedings, the assessee had specifically requested the AO to issue summons/letters u/s. 131/133(6) to the loan creditor companies, but, the AO remained silent and did not even apprise the assessee that the statements of the directors of these companies had already been recorded by the Investigation Wing. Thus, the AO, placed absolute reliance upon the statements/ material gathered behind the back of the assessee without confronting the same to the assessee at any stage which is impermissible in view of the judicial pronouncements made by the Hon’ble Apex Court in the cases of M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 19 Kishanchand Chellaram vs. CIT (1980) 125 ITR 0713 (SC); and again in the case of Andaman Timber Industries vs. Commission of Central Excise Kolkata (2016) 15 SCC 785 (SC) and by Hon’ble High Court of Rajasthan in the case of CIT vs. Sunita Dhadda & Ors. (2018) 406 ITR 0220 (Raj.). 21. We find that recently the Coordinate ‘D’ Bench of ITAT Ahmedabad in the case of ACIT vs. E I Dorado Biotech Pvt. Ltd. (2020) 60 CCH 0233 (Ahm. Trib), at para (33) has held that if AO intends to rely, for the purpose of making addition to the total income of an assessee, on the basis of statement of third party as a witness, then he has to summon such witness, record his statement, offer that witness to the assessee for cross examination. The Coordinate Bench, Ahmedabad at para (36) has held as under: “ In other words where AO wants to rely on the statement of a witness (such as statement of entry operator recorded by investigation wing) to hold that share application money received by the assessee is not genuine but is only an accommodation entry then he has to provide copy of such statement to the assessee. Where the AO does not provide the copy of the statement of the witness then it is violation of principle of natural justice, and entire addition solely based on such statement is likely to be deleted.” 22. Respectfully relying upon the recent decision of the Coordinate Bench of Ahmedabad Tribunal in the case of ACIT vs. E I Dorado Biotech Pvt. Ltd (supra) and as also various judicial pronouncements, referred to hereinabove, we find no infirmity in the findings given by the Ld. CIT(A) on the issue of cross examination. However, from the appellate order, we find that the Ld. CIT(A) has not deleted the addition merely on the legal issue of cross examination, but, the Ld.CIT(A) has also dealt with the entire addition on merits also which will be dealt by us in the subsequent paras while examining the facts of the case and the documentary evidences placed before us and also before the lower authorities in order to prove the identity and creditworthiness of the cash creditors and genuineness of the transaction. Thus we find no infirmity in the finding of Ld. CIT(A) deleting the addition for unexplained cash credit of Rs.12,44,12,690/- based on his observation that the Ld. A.O failed to follow the principles of natural justice as no opportunity to cross examination was provided to the assessee. Thus Ground No.1 of the Revenue’s appeal stands dismissed. 23. Now we take up issues in Ground No.2 to 7 in respect M/s Ariba Foods Pvt. Ltd through which the Revenue has agitated the M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 20 action of the Ld. CIT(A) in deleting the addition of Rs. 12,44,12,690/- made u/s. 68 of the IT Act, 1961, contending it that all the dummy/shell/bogus/paper/briefcase entities used to be perfect in papers and therefore, merely for the reason that such companies were making paper formalities or merely for the reason that the transactions were made through banking channels, payment of interest was made on alleged loans and repayment of the alleged loans were also made, the genuineness of the transactions cannot be accepted. The Revenue also agitated that in the case of the lender companies, while framing assessment orders in their hands, negative inference was also drawn and has lastly agitated that the CIT(A) was not justified in dismissing the reliance placed by the AO on various case laws. The Ld. CIT(A) has dealt with this issue from para (4.3) on page no. 69 to para (4.3.5) at page nos. 96 of his appellate order. At para (4.3), the Ld. CIT(A) has narrated the background of the issue. At para (4.3.1), the Ld. CIT(A) has reproduced the chart containing the findings of the AO and rebuttal of the assessee thereon. The ld. CIT(A) has further acknowledged the filing of various documentary evidences by the assessee in support of identity of lenders, creditworthiness of lenders and genuineness of the transactions. At para (4.3.2), the ld. CIT(A) has stated that the assessee has challenged the arbitrary approach of the AO mainly on four major counts i.e. (a) the AO made additions merely on the basis of statements of third parties recorded by Investigation Wing and without providing opportunity of cross examination; (b) the AO erred in converting the limited scrutiny case into complete; (c) the AO erred in making additions on suspicion, surmise and conjecture without having any incriminating material on record found from premises of the assessee; and (d) the AO erred in not considering the documentary evidences filed by the assessee. Further, from page no. 74 to 91, the ld. CIT(A) has discussed in detail the assessee’s contentions made before him on the aforesaid four counts. At page nos. 81 to 91, the ld. CIT(A) has also discussed and described each and every documentary evidence filed by the assessee in support of establishing the identity of the loan creditor companies, creditworthiness of the lender companies and genuineness of the loan transactions. At page no. 91 & 92, the ld. CIT(A) has relied upon the decision of the ITAT Agra Bench in the case of Umesh Electricals vs. ACIT (supra) and the decision of the ITAT Indore Bench in the case of Aseem Singh vs. ACIT (supra). Thereafter, on the same page, the ld. CIT(A) has stated that the assessee has furnished all the required details in order to provide the identity of lenders, genuineness of transactions and creditworthiness of creditors. The ld. CIT(A) has also relied upon the decision of the Hon’ble MP High Court in the case of Metachem Industries (supra) to the effect that the law M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 21 does not cast any obligation on the assessee to explain the source of the source for the amount borrowed. At para (4.3.3) on page no. 93 to 95, the ld. CIT(A) has referred to the case laws relied upon by the AO and has stated that none of these case laws are applicable to the case of the assessee. At para (4.3.4), the ld. CIT(A) has stated that the AO except relying upon the findings of Investigation Wing, could not bring any cogent material to establish that the lender companies were non-existent or bogus or paper companies. According to the ld. CIT(A), the assessee has fully discharged its onus of proving the genuineness of loan transactions and the identity & creditworthiness of the loan creditors have also been established beyond all doubts. The Ld. CIT(A) held that the identity of the lender companies is self proven from the fact the assessments in the case of the lender companies have been framed either by the AO himself or by some other officer. The Ld. CIT(A) observed that non compliance of the commission issued at a wrong address cannot be viewed adversely for adjudging the identity of the lender companies specially in a situation where the statements of the directors of lender companies were duly recorded by the Investigation Wing itself. The Ld. CIT(A) also observed that the genuineness of the transactions also gets fully established as the transactions have taken place through banking channels and these have been confirmed by the lender companies. The Ld. CIT(A) held that the lender companies were having sufficient net owned funds for making advances to the appellant or anyone also. The Ld. CIT(A) further observed that the assessee had been able to establish even the source of the sources in the hands of the lender companies and all the lender companies are also assessed to Income Tax. Further, the ld. CIT(A) also stated that in none of the transaction, cash has been found deposited in bank account of lenders. Furthermore, during the survey proceeding, no incriminating material or any other evidence was found from which it could have been inferred that the assessee had provided any fund to the lender companies before obtaining loans. Finally, at para (4.3.5), the ld. CIT(A), keeping in view the facts of the case, the documentary evidences filed and the case laws relied upon by the assessee, held that the AO was not justified in making addition of Rs.12,44,12,690/- on account of unsecured loans taken by the assessee from the lender companies. 24. We observe that Ld. CIT(A) has thoroughly examined various documentary evidences filed by the assessee to prove the identity and creditworthiness of the lenders and genuineness of the transaction. Relevant extract of Ld. CIT(A) finding examining the 3 cash creditors namely M/s DFL, M/s FVPL and M/s NVPL is mentioned below:- (d) The AO erred in considering the documentary evidences filed M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 22 in support of creditworthiness of the lender and genuineness of the transaction including explaining source of source:- Appellant before the AO as well as before me has filed copies of PAN, bank account statement of lenders, audited balance sheet, profit and loss statement, certificate of incorporation, copy of MOA, details collected from website of Ministry of Corporate Affairs, and confirmations of lenders. The brief details of these lender companies are as under :- M/s Dwarkesh Finances Ltd PAN-AABCD7162N in short DFL :- Regarding the identity of the company the app e1l ant submitted that originally, the DFL was incorporated in the name of "Richmore Finance and Leasing Limited", as a public limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Gujarat, on 09-06-1992 vide registration No.04-17790 of 1992-1993. Presently, the company is having Unique Corporate Identification Number i.e. CIN as U6910GJ1992PLC017790. The DFL was incorporated with the main object of carrying out the business of finance, hire purchasing and leasing as per the objects contained in its Memorandum of Association, under which it has got incorporated. The DFL was also granted Certificate for Commencement of Business by the concerning Registrar of Companies on 24-06-1992. The original name of company got subsequently changed to Dwarkesh Finance Limited vide Certificate of Change of Name granted by the concerning Registrar of Companies on 23-06-1995. Initially, the registered office of the DFL was situated at 201, Laxmi Gopal Building, 2 nd Floor, Dandiya Bazar, Baroda, Gujarat-390001, but subsequently, w.e.f. 29-09-2017, the registered office of the company got shifted to a new place situated at 415-416, 4th Floor, pushpam Mall, Opp. Seema Ha1l, Anand Nagar Road, Satellite, Ahmedabad. Besides holding the registered office at Ahmedabad, the DFL is also holding one administrative office at 126, Dawa Bazar, Ujjain which was also confirmed by the AO. The DFL was listed with Vadodara stock Exchange Limited. The DFL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA) , Government of India. Further, DFL for AY 2011-12 has been reassessed by the ITO-1(1)(2), Vadodara by determining the total income at Rs.16,20,690/- Regarding the genuineness of the transaction the appellant submitted that all the transactions by the appellant with DFL had taken place through account payee cheques/ banking M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 23 channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of DFL. Further, copy of ledger account of the appellant in the books of DFL and copy of loan confirmation has also been filed. The appellant had duly credited a sum of Rs.4,95,678/- in the unsecured loan account of DFL on account of interest and in respect of such interest, the appellant company has also paid TDS of Rs.49,567/-. Further, the DFL had duly offered the receipt of interest income of Rs.4,95,678/made by them from the appellant company, in respect of loan transactions, in their return of income for the year under consideration and in respect of such income, the DFL has not only got duly assessed but has also availed credit of TDS on such income. The appellant has also submitted that it has borrowed sum aggregating to Rs.83,00,000/- from DFL in earlier years and the genuineness of such borrowing have never been doubted in any of the assessment proceedings carried out in earlier years. In support of his claim appellant has placed reliance on the decision of Hon'ble ITAT, Lucknow Bench, in the case of Dwarikadhish Sugar Industries Vs. ITO (2012) 149 TTJ 0401 (Luk), wherein it has been held that part acceptance of loan indicates identity and genuineness of the creditors and, therefore, no adverse inference in respect of such creditor can be drawn. In order to prove credit worthiness of the creditor, the appellant has filed copies of audited financial statements of DFL along with Auditors' Report, in respect of the financial year ended 31 5t March 2016. On perusal of the sane it was found that DFL has duly shown an amount of Rs. 83,00,000/- and Rs. 15,26,111/- in the name of appellant company as on 31.03.2015 and 31.03.2016 respectively. Further, DFL as on 31.03.2015 has net owned fund of Rs. 14.34 crores by way of share capital and reserves & surplus. Likewise, as on 31-03-2016, DFL have net owned funds to the tune of Rs.14.39 crores by way of share capital and reserves. & surplus. The share capital of the company DFL were held from long back and therefore cannot be doubted on source of share capital as held by Hon'ble High Court of Delhi, in the case of CIT Vs. Gangaur Investment Ltd. (2011) 335 ITR 0359 (Del). On perusal of balance sheet of DFL it was observed that DFL has also made investment in the shares of the appellant company to the extent of Rs.2,34,OO,OOO/-- and the AO has already accepted the same. The AO cannot judge two similar things with different view. On one hand the AO is doubting the genuineness and source of unsecured loan and on other hand has accepted the share capital investment by the same company in same previous year. Further, DFL has surplus funds to advance the same M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 24 to appellant company in relevant assessment year. M/s Famous Vaniiya Pvt ltd (PAN-AABCF1483G) [in short FVPL]:- Regarding the identity of FVPL the appellant submitted that the FVPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal, on 25-10-2007, vide registration No.U51109WB2007PTC120050 of 2007-2008. Presently, the company IS having Unique Corporate Identification Number i.e, CIN as U 511 09MP2007PTC031640. The FVPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. Initially, the registered office of the F VPL was situated at 67-B, Metcalfe Street, Kolkata, W.B., but subsequently, w.e.f. 17-09-2013, the registered office of the- company got shifted to a new place situated at 125, Dawa Bazar, Madhav Club Road, Ujjain (M.P.) which is also accepted by the AO. The FVPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In the case of FVPL for AY 2011-12 and for AY 2016-17 order u/s 147 rws 143(3) and u/s 143(3) has been passed by the same as of the appellant. Thus, from the above it is very clear that identity of the company FVPL has been duly proved by the appellant with supportive evidences. Regarding the genuineness of the transaction the appellant submitted that all the transactions have taken place through account payee cheques. Appellant in support has filed copies of bank account statement of FVPL. Appellant has also filed copy of ledger account of appellant in the books of FVPL showing each and every transaction relating to unsecured loan. A copy of confirmation letter duly signed by director of FVPL has also been filed by the appellant. The appellant further has brought some other facts to light and stated that the AO has made addition of Rs. 2,15,03,302/- on account of unsecured loan, however, the appellant has availed loan of Rs. 2,08,00,000/- only and balance amount represents interest i.e. of Rs. 7,03,302/-. The appellant has duly credited a sum of Rs.7,81,447/- in the unsecured loan account of FVPL on account of interest and in respect of such interest TDS of Rs. 78,145/- was also deducted. Apart from the above, the company FVPL had duly offered the receipt of interest income of Rs.7,81,447/- made by them from the appellant company, in respect of loan transactions, in their return of income for the year under consideration and in respect of such income M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 25 and has also availed TDS credit on such income. The loan taken by the appellant has been fully repaid through banking channels. From the above it is very clear that all the transactions have been executed through banking channels and the AO has simply doubted the genuineness of the transaction without having any incriminating material on record. Regarding the creditworthiness of FVPL the appellant has filed copies of audited financial statements of FVPL along with Auditors' Report, for FY 2014-15 (AY 2015-16). On perusal of audited balance sheet it was observed that the company FVPL has owned funds of Rs. 10.26 crores by way of share capital and reserves & surplus and has net owned funds of Rs. 16.28 crores by way of share capital and reserves & surplus as on 31.03.2016 (AY 2016-17). FVPL is a regular income tax payer which can also seen from copies of return of income filed by the appellant. On perusal of balance sheet of FVPL it was further observed that FVPL has also made investment in the shares of the appellant company for Rs.1 ,58,00,000/- and the AO has already accepted the same. The AO cannot judge two similar things with different view. On one hand the AO is doubting the genuineness and source of unsecured loan and on other hand has accepted the share capital investment by the same company in same previous year. Appellant has also explained source of source and submitted that a sum Rs.2,08,00,000/- was provided to the appellant company, through banking channel, immediately before providing the loan to the company, the FVPL had recovered loans aggregating to a sum of Rs.2,05,00,000/- from its four creditors (i) M/s. Vyanktesh Corrugators, (ii) M/s. Shree Packers (MP) Pvt. Ltd, (iii) Shri Sujit Lodha and (iv) Shri Nikhilesh G. Rathi, HOP. Further, FVPL long back has issued its 5,16,000 equity shares of face value of Rs.10/- each for a total consideration of Rs.51 ,60,0001- by charging total share premium of Rs.9,61,40,000/- during the financial year 2007-08 relevant to A.Y. 2008-09 which has also been accepted by the ITO Ward- 5(4), Kolkata who framed assessment order under s. 143(3)/147 of the Act in the case of FVPL for A.Y. 2008-09 on 30- 04-2010. However, a fresh assessment was done in pursuant to order u/s 263 of the Act and a fresh assessment under s. 143(3)/263/143(3)/147 of the Act has been framed in the case of FVPL for A.Y. 2008-09 by the ITO-5(4), Kolkata on 26-03-2014 by making an addition of Rs.10,12,00,000/- in the hands of the FVPL, on account of acceptance of fresh share capital and share premium and thereby, framing the assessment at Rs.1 0, 12,22,570/-. Thus, FVPL has surplus funds to advance the same M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 26 to appellant company in relevant assessment year. •M/s Navyug Vayapar Pvt Ltd PAN-AACCNl168M in short NVPL :- Regarding the identity of NVPL the appellant before AO as well as before me submitted that NVPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal, on 09-11-2004 vide registration No. U51909 WB2004PTC100365. Presently, the company is having Unique Corporate Identification Number i.e. CIN as U51909MP2004PTC031641. The NVPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. Initially, the registered office of the NVPL was situated at B-18, Shanti Niketan, 8, Abanindra Nath Thakur Road, Sarani, Kolkata, W.B., but subsequently, w.e.f. 17-09- 2013, the registered office of the company got shifted to a new place situated at 126, Dawa Bazar, Madhav Club Road, Ujjain (M.P.). The NVPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. The identity can also be proved by the fact that assessments order pertaining to the assessment year A.Y. 2011- 12 and A.Y. 2016-17 have been passed by the same AO as of the appellant. Thus, from the above it is very clear that identity of the company NVPL has been duly proved by the appellant with supportive evidences. Regarding the genuineness of the transaction the appellant submitted that all the transactions have taken place through account payee cheques. Appellant in support has filed copies of bank account statement of NVPL. Appellant has also filed copy of ledger account of appellant in the books of NVPL showing each and every transaction relating to unsecured loan. A copy of confirmation letter duly signed by directors of NVPL has also been filed by the appellant. The appellant further has brought some other facts to light and stated that the AO has made addition of Rs. 10,13,83,277/- on account of unsecured loan, however, the appellant has availed loan of Rs. 10,09,00,000/- only and balance amount represents interest i.e. of Rs. 4,83,277/-. The appellant has duly credited a sum of Rs, 5,36,975/- in the unsecured loan account of FVPL on account of interest and in respect of such interest TDS of Rs. 53,698/- was also deducted. Apart from the above, the company NVPL had duly offered the receipt of interest income of Rs.5,36,975/- made by them from the appellant company, in respect of loan transactions, in their return of income for M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 27 the year under consideration and in respect of such income and has also availed TDS credit on such income. The loan taken by the appellant has been fully repaid through banking channels. From the above it is very clear that all the transactions have been executed through banking channels and the AO has simply doubted the genuineness of the transaction without having any incriminating material on record. Regarding the creditworthiness of NVPL the appellant has filed copies of audited financial statements of NVPL along with Auditors' Report, for AY 2015-16 & 2016-17. On perusal of audited balance sheet for AY 2015- 16, it was observed that the company NVPL has owned funds of Rs. 15.77 crores by way of share capital and reserves & surplus and for AY 2016-17 has net owned funds of Rs. 25.56 crores by way of share capital and reserves & surplus. NVPL is a regular income tax payer which can also be seen from copies of return of income filed by the appellant. The NVPL had shown taxable income, under s. 115JB of the Act at Rs.92,02,584/- and had paid tax amounting to Rs.17,78,752/-, for A.Y. 2016-17. Further, NVPL for the A.Y. 2018-19 has shown a taxable income of Rs.2,25,20,162/- and on such income has also paid a substantial amount of tax of Rs.47,09,735/-. On perusal of balance sheet of NVPL it was further observed that NVPL has also made investment in the shares of the appellant company to the extent of Rs.2,45,00,000/- and the AO has already accepted the same. The AO cannot judge two similar things with different view. On one hand the AO is doubting the genuineness and source of unsecured loan and on other hand has accepted the share capital investment by the same company in same previous year. Appellant has also explained source of source and submitted that a sum Rs.10,09,00,000/- was provided to the appellant company, through banking channel, immediately before providing the loan to the company, NVPL had procured the funds by way of (i) receiving a dividend income of Rs.3,69,783/- from M/s. Shriji Polymers India Ltd., (ii) making recovery of unsecured loans of Rs.1,15,00,000/- given on earlier occasions to various group companies of the appellant, (iii) obtaining refund of loan of Rs.4,60,OO,OOO/- from the appellant company itself; and (iv) obtaining share capital money aggregating to Rs.6,00,00,000/- from various persons. It is also submitted that dividend income so received by the NVPL has duly been shown by it in its return of income for A.Y. 2016-17. Further, the genuineness of receipt of share capital money aggregating to Rs.6,OO,OO,OOO/- has duly been accepted by the AO who framed an assessment under s. 143(3) in the case of NVPL for A.Y. 2016-17. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 28 Furthermore, the factum of refund of loan by the appellant to NVPL is evident from the copy of ledger account of NVPL in the books of account of appellant for the relevant year. It was further submitted that receipt of refund of loan of Rs.1,15,00,000/-- from the various entities as made by the NVPL can be verified from Note-8 of the audited financial statements of NVPL for the financial year 2015-16 in which under the column of previous year, the making of loans and advances by NVPL to various persons at Rs.5,31,40,967/- has been clearly reflected. Thus, NVPL has surplus funds to advance the same to appellant company in relevant assessment year Further, interest income earned by the lender companies on the loans given by them has been accepted and assessed by the same AO in their assessments. All the three lenders are sister associated companies of the appellant company taking loan from the company which is having surplus funds is one of the features of the group. The funds transfer is taking place from one company to other company. 26. After referring the relevant paper documents which included the loan confirmations, copy of bank accounts, proof of filing Income Tax Returns, financial statements, copies of the assessment orders of preceding years Ld. CIT(A) has held that the assessee had duly explained the source of cash credits from the alleged three companies in the books of account and the relevant observation of Ld. CIT(A) in this regard reads as follows:- i. Identity of the creditors - the creditors are income tax payer and filed the loan confirmations and two of them are assessed by the same AO. ii. Genuineness of the transaction- the appellant has taken the loan through banking channel. The appellant is in the receipt of loan by cheque. Copies of bank statements of lender companies are placed on record and perused. There has been repayment of loan by the appellant to FVPL through banking channel. From perusing the bank statements of the lender companies as furnished in the paper book, it is found that no cash was deposited in the bank account prior to issuance of cheque to the assessee for the loan given. Moreover, there are few cash transactions of meager amount in the bank statements and it is found that all the amounts are received and paid through account payee cheques. Appellant has made repayments of the loan taken per his convenience of fund availability as is evident from loan confirmation letters and ledger statements of the lender companies duly accompanied by bank statements. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 29 Appellant has also paid interest to the lender companies on the loans borrowed and the same have been offered to tax by the respective lender companies in their regular income tax return and have been accepted as well as assessed by the same Assessing Officer in their assessment made under section 147 rws 143(3) and uls 143(3) w.r.t two lenders i.e. FVPL and NVPL. The appellant has also deducted TDS on interest and the TDS credit has also been availed by respective lender company. iii. Creditworthiness of the creditors - the creditors are income tax payer and filing the income tax return. The companies have not only given the loan to the appellant but to other parties also. DFL is a Public Limited Company and has been duly registered with Ministry of Corporate Affairs. FVPL and NVPL are duly registered private limited company which can also be verified from web site of Ministry of Corporate Affairs. The lender companies has sufficient surplus and share application money which was received far long back and has already been accepted by their concerned Assessing Officer. The AO on the contrary has held that these lender companies are non-existent, non-functional and a shell/paper/briefcase company. The AO has drawn his belief on the basis of investigation carried out by DDIT(Inv), Kolkata, who was unable to trace the lender companies. In the case of DFL it was explained that the company has been planning to shift its office to Ahmadabad and therefore, the said company was not traceable at Vadodara. In the case of FVPL and NVPL both the companies has changed their address from Kolkata to Ujjain and this fact is also duly addressed by the AO while framing the assessment order. Thus, there is no case for the AO to hold it as non-existent, non-functional and a shell/paper company. From the above it is clear that the appellant has satisfied all the three conditions required for genuineness of the transaction. The same view has been upheld by Honb'le ITAT in the following cases:- 1.Umesh Electricals v/s Asst. CIT(2011) 18 ITJ 635 (Trib.Agra): (2011) 131 ITD 127 : (2011) 141 TTJ Establishment of identity and credit-worthiness proved- Assessee produced the bank account of creditor in his bank account on the same day on which loan was given- Assessee furnished the cash flow statement of creditor-Based on inquiry, AO noted that creditor was engaged in providing accommodation entries-HELD- In group cases, it has been held that there was no M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 30 evidence against the creditor to prove that he was providing accommodation entries-Further, mere deposit of money by the creditor on the same day, does not establish that the loan is not genuine-Assessee has proved the source of credit and also the source of source -Addition cannot be made. 11.Aseem Singh v/s Asst. CIT (2012) 19 ITJ 52 (Trib.-Indore) Identity and credit-worthiness proved-Assessee took loan of Rs.1,00,0001- confirmation of creditor was filed-Lower authorities made addition uls 68 holding that amount was deposited in cash in the bank account of lender immediately prior to date of loan - HELD- Assessee has established the identity- The party has confirmed the transaction-If AO doubted the transaction, AO should have called creditor u/s 131-Addition cannot be made. Thus, appellant has furnished all the required details in order to prove identity of lenders, genuineness of the transaction and creditworthiness of the creditor. Hon'ble jurisdictional MP High Court in the case of Metachem Industries (2001) 245 ITR 160 (MP) has held that law does not cast any obligation on the assessee to explain the source of source for the amount borrowed. However, appellant has explained the source of source in the case of two major lenders FVPL and NVPL. It is most important to mention here that both the lender companies i.e. FVPL and NVPL were assessed with the same assessing officer under section 147 rws 143(3) and u/s 143(3). Even the directors of these lender companies were covered under the search operation and were assessed by the same AO under section 147 rws 143(3) and u/s 143(3). Hence, the AO had before him all the records and documents of the lender companies including those of the directors for verification of the facts and documents presented in support of his contention. Thus, the AO has erred totally, in overlooking the key facts and documents on record and in continuously stressing merely on the statements of third parties recorded behind the back of the appellant. 27. We are also in conformity with the finding of Ld. CIT(A) dealing with various case laws relied by Ld. A.O and distinguishing the same being not applicable to the assessee on the basis of observation that the assessee has duly proved the genuineness of the transaction and creditworthiness of the cash creditors which support the evidence. The crux of the finding of Ld. CIT(A) after thoroughly examining the facts in the light of settled judicial position is mentioned in para 4.3.4 and 4.3.5 of the impugned order which reads as follows; M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 31 4.3.4 In my considered view, the AO except relying upon the findings of the Investigation Wing could not bring on record any cogent material to establish that the lender companies from whom appellant had claimed to have received loans were non-existent or bogus or paper companies. In my view, the appellant could be 'able to fully discharge its onus of proving the genuineness of the loan transaction beyond all doubts. The identity of the lender companies is self proven from the fact that the assessments in the case of the lender companies have been framed either by the AO himself or by some other assessing officer. Non compliance of the commission issued at a wrong address cannot be viewed adversely for adjudging the identity of such lender companies, especially in a situation when the statements of the directors of the lender companies was duly recorded by the Investigation . The genuineness of the transactions also gets fully established as the transactions have been taken place through banking channels and these have been confirmed by the lender companies. Also find that the lender companies were having sufficient net owned funds for making advances to the appellant or anyone also. The appellant has been able to establish even the source of the source in the hands of the lender companies. The lender companies are assessed to Income Tax. In none of the loan transaction any cash has been found deposited in the bank account of the lenders. During the course of the search/survey no incriminating material or any other evidence was found from which it could have been inferred that the appellant had provided any fund to the lender companies before obtaining loans. 4.3.5 Therefore, in view of the above discussion, the AO was not justified m making addition of Rs. 12,44,12,690/- on account of unsecured loan from DFL, FVPL and NVPL. In fact the appellant has availed unsecured loan of Rs. 10,80,000/- from DFL, Rs.· 2,08,00,000/- from FVPL and Rs. 10,09,00,000/- from NVPL and the balance addition made the AO is on account of interest paid by the appellant. Thus, keeping in view facts of the case, the documentary evidences filed by the appellant and the case laws cited above, the addition made by the AO amounting to Rs.12,44,12,690/- is deleted. Therefore, appeal on these grounds are allowed. 28. We observe that in the instant case, the assessee had taken loans through banking channels from its own group entities in whose cases too, simultaneous survey proceedings were carried out u/s. 133A of the Act and during the course of such survey proceedings, the lender companies and their directors were duly found in existence. During the course of the search/survey operations, no incriminating M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 32 material or evidence was found. In the entire body of the assessment order, as also, in the paper book filed by the Revenue before us, there is no reference of any incriminating document. In the Paper Book filed before us, the Revenue has merely filed the copies of assessment orders passed in the cases of lender companies and in our considered view, such assessment orders on the contrary strengthen the case of the assessee inasmuch it establishes beyond all doubts that the lender companies were in existence and were assessed to Income- Tax. 29. We find that the entire assessment order is based upon some statements recorded by the Investigation Wing or by some other authorities on some earlier occasions, and the AO has not conducted any independent inquiry at his own from the lender companies, despite the assessee’s making a specific request to him to issue summons u/s. 131 or letters u/s. 133(6) to the lender companies. Recently, the Coordinate Bench of Mumbai in the case of Smt. Kalpana Mukesh Ruia vs. DCIT 2021 (1) TMI 93 – ITAT Mumbai in its order pronounced on 31/12/2020 has deleted the addition made u/s. 68 by holding as under: “56. As regards the addition of unsecured loans is concerned, we note that assessing officer has accepted that assessee had submitted the confirmation, ITR, Bank Statement of parties. However, he rejected by simply observing that investigation wing at Kolkata has reported that some of the entry operators are providing bogus loans at Kolkata. The assessing officer did not make any enquiry of his own and only referred to the date of the confirmation of the unsecured loan and give adverse inference.... 57. We find that by simply referring to the general findings of the Investigation Wing at Kolkata entry operators providing bogus loans, the revenue authorities cannot fasten liability of unsecured loans upon the assessee, unless the assessing officer makes enquiries of his own and rebut the documentary evidences submitted by the assessee. The assessee has duly discharged its onus of submitting the loan confirmation, Income Tax Returns and Bank Statements and Financial Statements of the loan creditors. Without making inquiry of his own, the assessing officer has rejected them which is totally unsustainable.” 30. We observe that the Ld. AO issued the commission in respect of one of the lender companies at the old address whereas, in the body of the assessment order itself, he has brought on record the copy of the Notice of the Extra Ordinary General Meeting held by one of the lender companies for changing its address from Kolkata to Ujjain. In the similar circumstances, their lordships of the Hon’ble Bombay High Court in the case of PCIT vs. Shree Rajlaxmi Textile Park Pvt. Ltd. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 33 (2020) 268 TAXMAN 0405 (Bom.) was pleased to upheld the order of the Tribunal deleting the addition u/s. 68 of the Act where the AO despite having correct address on his record sent notice to the creditor at a wrong address which came back unserved. 31. Further we observe that during the course of the assessment proceedings, the assessee had furnished all the necessary documentary evidences such as copy of certificate of incorporation, copy of Memorandum and Articles of Association, copy of Acknowledgement of Income Tax Return, copy of Master data downloaded from the official website of the MCA, particulars of directors of all the lender companies for establishing the identity of the lender companies. For establishing the genuineness of the transactions, the assessee had also furnished the copies of ledger accounts of the lender companies in the books of the assessee company and vice versa, copies of confirmation letters duly given by the lender companies, copies of the relevant bank statements of the lender companies and as also of the assessee company demonstrating that all the transactions had taken place through banking channels only. Further, in order to establish the creditworthiness of the loan creditors before the AO, the assessee had furnished copies of the audited financial statements of the lender companies, copies of assessment orders passed in the cases of the lender companies and as also statement showing details of the taxable income and tax paid by the lender companies in the last eight years. Although, the transactions being loan transactions and not the transactions relating to the share capital, the assessee was not required to establish the source of the source as contemplated under proviso to Section 68 of the Act, but, despite such fact, the assessee had not only furnished the details regarding availability of funds in the hands of the lender companies immediately before providing loans to the assessee company but has also furnished the necessary documentary evidences such as the copies of bank accounts, financial statements and Income-Tax Returns of the sub-creditors. We find that all the aforesaid documentary evidences have also been furnished by the assessee before us in Paper Books filed in two volumes and the relevant aforesaid documents are placed at Page No. 170 to 676 of the Paper Book. 32. We also observe that in the instant case, although the AO has disputed the identity and genuineness of the loan transaction carried out by the assessee with the Dwarkesh Finance Ltd., Famous Vanijya Pvt. Ltd. and Navyug Vyapar Pvt. Ltd., but, in respect of the share capital transactions aggregating to a sum of Rs. 6,37,00,000/- carried out by the same three companies with the assessee company in the same financial year, the same AO has accepted the M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 34 genuineness of the transactions and as also the identity of these companies. Thus, the AO has adopted two different approaches for two different kind of transactions carried out by the assessee in the same companies in the same financial year which in our view is not permissible. 33. We further observe that one of the lender companies namely, Navyug Vyapar Pvt. Ltd. had provided loans to the assessee company for an aggregate sum of Rs. 10,13,83,277/- and before providing loan to the assessee company, the lender company had raised substantial amount of Rs. 9,00,45,000/- by way of issuance of Share Capital and the Shareholders subscribing the shares in such lender companies were having taxable income of more than Rs. 20 Crores as per their personal income tax returns for A.Y. 2016-17 and this fact strongly goes in favour of the assessee and its cash creditor company about the source of funds received by the assessee. 34. It is also observed that Dwarkesh Finance Ltd. was a Public Limited Company duly listed on Vadodra Stock Exchange and therefore, its identity cannot be disputed. Further such company provided funds to the assessee company out of the funds received by it from other group companies namely, Vyankatesh Plastics and Packaging Pvt. Ltd. and Shree Niwas Polyfabrics and Packwell Pvt. Ltd. 35. We further observe that the other lender company namely, M/s. Famous Vanijya Pvt. Ltd. had also provided funds to the assessee company out of funds procured by it from other group companies namely, M/s. Vyankatesh Corrugators, Shree Packers M.P. Private Limited, etc. Thus, by any stretch of imagination, the trail of the funds in the hands of the assessee company emanated from the lender companies cannot be disputed or doubted. The Ld. AO could not rebut the genuineness of the various documentary evidences furnished by the assessee before him for establishing the genuineness of the loan transactions. Thus, the assessee had discharged its onus of proving the genuineness of the sum credited in its books of accounts as contemplated u/s. 68 of the Act and since, no inquiry was conducted by the AO, the addition was not sustainable as held by the Hon’ble Karnataka High Court in the case of M/s. Kumar Nirman and Nivesh Pvt. Ltd. vs. the Assistant Commissioner of Income Tax Bangalore 2020 (3) TMI 340 (Karn. HC). Their Lordships at para (7) of the Order were pleased to hold as under: “In the background of aforesaid well settled legal principles, the facts of the case may be seen. In the instant case, the assessee in support of identity, genuineness of transaction and credit worthiness of M/s. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 35 Bhuawania Bros. Pvt. Ltd. had supplied a copy of the balance sheet and profit and loss account to the Assessing Officer. The appellant had also filed the copy of the return of income of M/s. Bhuwania Bros Pvt. Ltd. as well as copy of information letter. The appellant having proved the identity and creditworthiness of the party as well as the genuineness of the transaction had discharged its burden and it was for the revenue to conduct an enquiry and to prove that the transaction in question was not genuine and the identity of the creditor was not established and it had no credit worthiness. In the instant case, the revenue has not conducted any enquiry and has failed to discharge its burden. In view of preceding analysis, we answer the substantial question of law Nos. (i), (ii) and (iii) in the negative and in favour of the assessee and against the revenue.” 36. We also observe that the various screenshots and cash trail pointed out by the CIT(DR), from the findings given by the AO in respect of one of the lenders namely, Navyug Vyapar Pvt. Ltd. pertain to the year 2010 only and therefore, they cannot be said to be having any nexus with the loan transactions carried out by the assessee during the year under consideration. From the Paper Book filed by the assessee, it is appearing that the case of aforesaid lender company, an assessment u/s. 143(3) r.w.s. 147 of the Act was framed post survey event in the assessee’s group on 24.12.2018 for A.Y. 2011-12 and the AO framing such assessment has not found any irregularity or infirmity in the transactions pointed out by the present AO. 37. It is also not disputed that all the lender companies are assessed to tax and they have duly shown the interest income earned by them on the loans provided to the assessee company in their returns of income for the concerning assessment year and have also claimed the TDS made by the assessee company on such interest payment which has duly been allowed. The assessee company has made substantial repayment of the loans again through banking channels. The Ld. CIT in his order has very elaborately dealt with loan transactions carried out by each of the lender companies with the assessee company. Before us, the ld. DR could not point out any discrepancy in the findings given by the ld. CIT(A) on the merits of the loan transactions. 38. Further we do not find any substance in the ground of the revenue that no consideration is required to be given to the various documentary evidences but the facts should be on the groups of the assessee and group companies working as dummy paper companies. It is a trite law that a suspicion howsoever strong it may be cannot substitute the legal proof especially when such legal proof remains uncontroverted. The addition made by the Ld. A.O are more on the basis of the theory adopted on the basis of some investigation carried M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 36 out in the preceding years which either may had its fate by way of additions in the hands of the respective companies in those years. Had there been additions in the hands of those companies in the preceding years then there remains no reason to make any additions in the hands of other assessee(s) in the subsequent years and in case in the preceding years if no addition could be made by the revenue authorities in other lender companies or assessee company that could not be a basis with the revenue authorities to tax such untaxed income in the hands of the in the subsequent assessment years because it is well established rule that each assessment year is to be treated separately and the assessee should be taxed for the income earned during the year to which it pertains. 39. We therefore in the given facts and circumstances of the case, respectfully following the judgments and decisions referred herein above and being satisfied with the documentary evidences filed before us are of the view that the assessee has successfully discharged its onus to prove the identity and creditworthiness of the three cash creditors i.e. M/s DFL, M/s FVPL and M/s NVPL and the genuineness of transaction of unsecured loan taken by the assessee company from these three companies. Thus there remains no reason to interfere in the detailed finding of Ld. CIT(A) deleting the impugned addition of Rs.12,44,12,690/- made by the Ld. A.O invoking provisions of Section 68 of the Act for unexplained cash credit. Ground No.2 to 7 of the Revenue stands dismissed. 40. Accordingly appeal of the revenue in the case of M/s Ariba Foods Pvt. Ltd raised vide ITA No.736/Ind/2019 for Assessment Year 2016-17 stands dismissed. 15. From perusal of the finding of this Tribunal in the case of Ariba Foods Pvt. Ltd. & others (supra) which is also a group concern of the assessee(s) in the instant appeals we find that this tribunal has extensively dealt with the issue of unexplained cash credit received from various companies alleged to be accommodation entry provider/bogus companies including the cash creditors in question namely Navyug Vyapaar Pvt. Ltd, M/s Famour Vanijya Pvt. Ltd. & M/s Dwarkesh Finance Ltd. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 37 This tribunal after examining facts of the case came to a conclusion that the alleged companies are neither accommodation entry provider nor bogus and they are genuine companies engaged in the business having sufficient credibility and are part of the same Bangur group as in same cases directors/shareholders of these companies are mostly common and have been assessed by the same ld. AO who made the addition for alleged unsecured loans in the hands of assessee. Therefore, taking a consistent view as taken by this Tribunal in case of Ariba Foods Pvt. Ltd. & others (supra), we are inclined to hold that the ld. CIT(A) had rightly appreciated the facts and deleted the addition for unexplained cash credit made by the Ld.AO u/s 68 of the Act holding that the alleged three cash creditors are genuine and creditworthy and their identity is not in dispute. Therefore, Ld. CIT(A) has rightly deleted the addition of Rs. 1,64,54,950/- made u/s 68 of the Act and thus relevant grounds raised by the revenue in the instant appeal in the case of Mangla Bangur on this issue are dismissed. 16. As far as the interest expenditure of Rs.2,68,779/- held by the Ld. AO as non-genuine but thereafter deleted by Ld. CIT(A), we find no infirmity in the finding of Ld. CIT(A), since the interest of Rs.89167/- and Rs.1,01,712/- has been paid after deduction of TDS to M/s Famour Vanijya Pvt. Ltd. & M/s Dwarkesh Finance Ltd.. Since we have already held the transaction of unsecured loan entered into between the assessee and these two companies as genuine while dealing M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 38 with the issue of unexplained cash credit u/s 68 of the Act in the preceding paras, we hold that the interest paid to these two companies is genuine and allowable as an expenditure. 17. As regards the interest of Rs.77900/- paid to M/s Patni Industries Ltd. we on examination of the fact find that this company is in inception since 24.02.1994 carrying on the business weaving & spinner. The company is an active company on the portal of Ministry of Corporate Affairs. The directors of this company are closely associated with the assessee and other group concerns. All directors are income tax payers. Scrutiny assessment of this company has been completed u/s 143(3) of the Act for A.Y. 2008-09 and similarly for A.Y. 2011-12 this company has been assessed u/s 147 r.w.s 143(3) of the Act . Transactions carried out are through banking channel and tax had been deducted at source on the interest of expenditure. Looking to all these facts we find no reason to doubt the genuineness of interest expenditure of Rs. 77900/- paid to M/s Patni Industries Ltd. and the same has been rightly deleted by the ld. CIT(A). 18. In the result ground no.1 to 7 raised by the revenue in case of Mangala Bangur for A.Y. 2012-13 are dismissed. 19. As far as ground no. 8 & 9 raised by the revenue are concerned the same relates to disallowance u/s 14A of the Act made by the ld. AO disallowing the interest expenditure. However, Ld. CIT(A) on considering the fact that no exempt M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 39 income has been earned by the assessee deleted the disallowance after relying on various decisions. Before us also ld. DR failed to controvert this fact that the assessee has not earned any excess income during the year and the alleged investments for which disallowance has been made are held with unlisted companies, partnership firm and agricultural land. The another undisputed fact remains is that the assesse had sufficient interest free funds in the form of capital which is sufficient to cover the alleged investments and therefore, in view of the judgment of Hon'ble Bombay High Court in the case of CIT vs. Reliance Utility and Power Ltd. 2009 313 ITR 340 (Bom) and judgment of Hon'ble Gujarat High Court in the case of CIT vs. Torrent Power Ltd. (2014) 363 ITR 474 (Guj), no disallowance of interest expenditure was called for u/s 14A of the Act. 20. Since the assessee has not earned any exempt income no disallowance u/s 14A of the Act is called for in view of the ratio laid down by Hon'ble Delhi High Court in the case of Cheminvest Ltd. vs. CIT (2014) 378 ITR 33 (Delhi) and the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Curtex Co. (2014) 229 taxmann.com 130. We, therefore, find no infirmity in the finding of Ld. CIT(A) deleting the disallowance of Rs.46,18,401/- made by the Ld. AO u/s 14A of the act. Therefore, ground No. 8& 9 of the revenue’s appeal are dismissed and ground no.10 is general in nature which needs no adjudication. M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 40 21. Now coming to the appeal of Revenue in case of another assesse namely Raj Medisafe India ltd. for A.Y. 2012-13 and 2017-18, as discussed above that the issue in these two appeal only relates to addition for unexplained cash credit u/s 68 of the Act for the unsecured loan received from Navyug Vyapaar Pvt. Ltd, at Rs, 2,39,04,519/ and Rs.79,00,000/- for A.Y. 2012- 13 & 2017-18 respectively and also the disallowance of interest paid to Navyug Vyapaar Pvt. Ltd, during A.Y. 2017-18 at Rs.17,41,432/-. We find that while adjudicating the grounds raised in the Revenue’s appeal in case of the assessee namely Mangala Bangur in preceding paras, we in view of the decision of this tribunal in the case of Ariba Foods Ltd. and others (supra) have held that M/s Navyug Vyapaar Pvt. Ltd, is a genuine company and is not an accommodation entry provider/ bogus company and the assessee has successfully proved the identity and creditworthiness of this company and the genuineness of the transactions of unsecured loan and interest expenditure with this company. We, therefore, applying our decision mutatis mudandis on this issue raised in the grounds of appeal of Raj Medisafe India ltd. for A.Y. 2012-13 and 2017- 18 hold that the Ld. CIT(A) has rightly deleted the addition made by the Ld. AO u/s 68 of the Act at Rs. 2,39,04,519/ for Rs. 2012-13 and Rs.79,00,000/- for A.Y. 2017-18 and has rightly held that the interest expenditure of Rs. 17,41,432/- is allowable as a genuine expenditure after considering the facts of the case, transaction being entered through banking M/s Raaj Medisafe India Limited, Dhar & Mangala Bangur IT(SS)ANo.117/Ind/2020 & others 41 channel, tax deducted at source on the interest payment, documentary evidences in the form of audited balance sheet, income tax return, assessment orders u/s 143(3)/147 of the Act of the alleged cash creditor and the assessee having proved the genuineness of the transactions and having sufficient fund appearing in the balance sheet under the head of share capital and accumulated reserves to prove the creditworthiness of the transaction. Therefore, all the grounds raised by the revenue for A.Y. 2012-13 & 2017-18 in the case of Raj Medisafe India Ltd. are dismissed. 22. In the result, appeals of the Revenue IT(SS)ANo.117/Ind/2020 in the case of Mangala Bangur & ITANos.317 & 318/Ind/2020 in the case of Raj Medisafe India Ltd. are dismissed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 07.02.2022. Sd/- Sd/- (MAHAVIR PRASAD) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated :07.02.2022 Patel/Sr. PS Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore