M/s Life Care International, Indore V. ACIT-3,(1) , Indore, Indore

ITA 336/Ind/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7162 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: S N AGRAWAL; PANKAJ MOGRA A RS
• Keywords: Unexplained cash credit; Capital asset converted into stock in trade; Business expenditure; Principle of natural justice; Opportunity of cross examination; Question of law; Accommodation entries; Onus to prove; TDS; Set aside
• Section: 143(3); 142(1); 133(6); 143(2); 191; 208; 264; 72; 13; 153; 119; 22; 131; 68; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE RAJPAL YADAV, VICE PRESIDENT AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.335 TO 337/IND/2018 ASSESSMENT YEARS: 2011-12 TO 2013-14 M/S. LIFE CARE INTERNATIONAL 37-38 LASUDIA MORI, DEWAS NAKA : APPELLANT PAN: AABFL5181G V/S JCIT-3(1) : RESPONDENT INDORE APPELLANT BY SHRI S. N. AGRAWAL, & PANKAJ MOGRA ARS REVENUE BY SHRI S. S. MANTRI, CIT-DR DATE OF HEARING 10.06.2021 DATE OF PRONOUNCEMENT 01.09.2021 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE OF THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 TO 2013-14 A RE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TA X(APPEALS)- I (IN SHORT LD. CIT], INDORE DATED 23.02.2018 & 26 .03.2018 LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 2 WHICH ARE ARISING OUT OF THE ORDER U/S 143(3) OF TH E INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 07.03.2014, 28.0 1.2015 & 30.11.2015 FRAMED BY CIT-3(1), INDORE. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.335/IND/2018: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN MAINTAINING ADDITION OF RS. 2,70,00,000/- AS MADE BY THE ASSESSING OFFICER ON THE ACCOUNT OF UNS ECURED LOAN U/S 68 OF THE ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS AD MADE BEFORE HIM. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN MAINTAINING THE DISALLOWANC E OF RS.60,61,225/- AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST PAID WITHOUT PROPERLY APPRECIATING THE FAC TS OF THE CASE AND SUBMISSION MADE BEFORE HIM. 3. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.336/IND/2018: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN MAINTAINING DISALLOWANCE OF RS.35,12,470/- AS MADE BY THE ASSESSING OFFICER ON THE ACCOUNT OF INTEREST PAID WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS AD MADE BEFORE HIM. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN MAINTAINING THE DISALLOWANC E OF RS.35,12,470/- AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST PAID EVEN WHEN THE APPELLANT HAS PROPERLY DISCHARGED ONUS LYING ON IT. 3. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.337/IND/2018: LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 3 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN MAINTAINING DISALLOWANCE OF RS.12,00,625/- AS MADE BY THE ASSESSING OFFICER ON THE ACCOUNT OF INTEREST PAID WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS AD MADE BEFORE HIM. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN MAINTAINING THE DISALLOWANC E OF RS.12,00,625/- AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST PAID EVEN WHEN THE APPELLANT HAS PROPERLY DISCHARGED ONUS LYING ON IT. 3. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN. 2. AS THE ISSUES RAISED IN THESE APPEALS ARE MOSTLY COMMON AND RELATE TO SAME ASSESSEE, AT THE REQUEST OF ALL THE PARTIES THESE APPEALS WERE HEARD TOGETHER A ND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR SAKE OF CONVENIENCE AND BREVITY. WE WILL FIRST TAKE UP THE ASSESSEES APPEAL IN ITANO . 335/IND/2018 3. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE T HAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSIN ESS OF CARRYING AND FORWARDING AGENT. INCOME OF RS.22,59,9 26/- DECLARED IN THE RETURN OF INCOME FILED ON 29.09.201 1 FOR A.Y. 2011-12. CASE SELECTED FOR SCRUTINY THROUGH CA SS. NOTICES U/S 143(2) & 142(1) OF THE ACT DULY SERVED UPON THE ASSESSEE. VARIOUS DETAILS WERE CALLED FOR BY TH E LD. ASSESSING OFFICER WHICH WERE REPLIED BY THE ASSESSE E. LD. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 4 ASSESSING OFFICER CALLED SPECIFIC INFORMATION TO PR OVE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE FOLLOWING FIVE PARTIES WHOM GAVE UNSECURED LOANS TO THE ASSESSEE:- S.NO NAME OF THE LOAN CREDITORS AMOUNT [RS ] 1 ADVANTAGE DEALTRADE P LIMITED 50,00,000 2 AXIOM COMMODEAL P LIMITED 45,00,000 3 CONTRA VANIJYA P LIMITED 50,00,000 4 DHANLABH TRADE LINK P LIMITED 75,00,000 5 SPANGLE DEALTRADE P LIMITED 50,00,000 2,70,00,000 4. INFORMATION WAS CALLED FOR LD. AO BY ISSUING NOT ICE U/S 133(6) OF THE ACT, WHICH WERE DULY SERVED UPON THE ALLEGED 5 CREDITORS, BUT THE INFORMATION CALLED FOR WAS NOT RECEIVED. THE ASSESSEE THEREAFTER FILED ALL THE DET AILS IN ORDER TO PROVE IDENTITY & CREDITWORTHINESS OF THE C ASH CREDITORS AND GENUINENESS OF THE TRANSACTIONS BY PL ACING COPY OF PAN, AUDITED BALANCE SHEET, BANK ADVICE FOR THE AMOUNT TRANSFERRED TO THE ASSESSEE COMPANY, CONFIRMATION AND OTHER RELEVANT DETAILS. HOWEVER, L D. ASSESSING OFFICER WAS NOT SATISFIED WITH THE SUBMIS SIONS MADE BY THE ASSESSEE AND DOUBTED THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CASH LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 5 CREDITORS AND ACCORDINGLY MADE THE ADDITION U/S 68 OF THE ACT AT RS. 2,70,00,000/-. 5. LD. ASSESSING OFFICER ALSO CALLED THE INFORMATIO N ABOUT THE DEDUCTION OF PRIOR PERIOD INTEREST OF RS.60,61, 225/- CLAIMED BY THE ASSESSEE TO HAVE BEEN PAID ON TERM L OAN FROM HDFC BANK. THE ASSESSEE CLAIMED THAT THIS SUM OF INTEREST OF RS.60,61,225/- IS ALLOWABLE U/S 43B(D) OF THE ACT. HOWEVER, ASSESSEE FAILED TO FIND ANY FAVOUR FR OM THE LD. ASSESSING OFFICER. AS LD. ASSESSING OFFICER MAK ING DETAILED OBSERVATION AS APPEARING AT 45 TO 52 OF TH E ASSESSMENT ORDER DATED 07.03.2014 DENIED THE CLAIM AND MADE THE ADDITION OF RS.60,61,225/-. LD. ASSESSING OFFICER ALSO DISALLOWED INTEREST CLAIM OF RS.24,47, 865/-, SINCE IT WAS NOT PAID BEFORE DUE DATE OF FILING THE RETURN. AFTER MAKING THE AFORESAID ADDITIONS INCOME ASSESSE D AT RS.3,77,69,020/-. 6. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) AND PARTLY SUCCEEDED AS LD. CIT(A) ALLOWED T HE CLAIM OF INTEREST EXPENDITURE OF RS.24,47,865/- AND CONFIRMED THE REMAINING ADDITION U/S 68 OF THE ACT AT RS.2,70,00,000/- AND DISALLOWANCE OF THE PRIOR PERI OD LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 6 INTEREST OF RS.60,61,225/-. LD. CIT(A) CONFIRMED TH E ADDITION U/S 68 OF THE ACT OBSERVING THAT THE ASSES SEE FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS O F THE ALLEGED LENDERS AND GENUINENESS OF THE TRANSACTIONS AND FOR OBSERVING SO PLACED RELIANCE ON CERTAIN JUDICIA L PRECEDENTS. 7. AS REGARDS THE INTEREST EXPENDITURE OF RS.60,61, 225/- LD. CIT(A) WAS OF THE VIEW THAT SHRI VAIBHAV RAI, W ORKING PARTNER OF THE FIRM HAD TAKEN LOAN OF RS.3.20 CR. F OR THE BUSINESS PURPOSE FROM HDFC BANK BUT SINCE THE ASSESSEE FAILED TO BRING ON RECORD, WHETHER THE SAI D AMOUNT OF LOAN WAS UTILIZED FOR THE PURPOSE OF BUSI NESS OF THE FIRM, THIS CLAIM WAS DENIED. 8. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL CHALLENGING THE FINDING OF LD. CIT(A) CONF IRMING THE ADDITION FOR UNEXPLAINED LOAN U/S 68 OF THE ACT AND DISALLOWANCE OF PRIOR PERIOD INTEREST. 9. AS REGARDS THE ISSUE OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT FOR RS.2.70 CR. LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ALLEGED LOAN OF RS.2.70 CR WAS T AKEN FROM FOLLOWING FIVE COMPANIES: LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 7 S.NO NAME OF THE LOAN CREDITORS PA NO AMOUNT [RS ] 1 ADVANTAGE DEALTRADE P LIMITED AAICA7805Q 50,00,000 2 AXIOM COMMODEAL P LIMITED AAICA5208K 45,00,000 3 CONTRA VANIJYA P LIMITED AADCC9936D 50,00,000 4 DHANLABH TRADE LINK P LIMITED AADCD5263C 75,00,000 5 SPANGLE DEALTRADE P LIMITED AAOCS5475L 50,00,000 2,70,00,000 10. THEREAFTER, LD. COUNSEL FOR THE ASSESSEE REFERR ING TO THE PAPER BOOK STATED THAT THE FOLLOWING DOCUMENTS WERE FILED BEFORE LD. ASSESSING OFFICER TO EXPLAIN THE A LLEGED CASH CREDITS. A. M/S ADVANTAGE DEALTRADE P LIMITED [ LOAN OF RS 50,00,000/-] S.NO PARTICULARS PAGE NO REFERENCE IN THE ASSESSMENT ORDER 1.1 CONFIRMATION OF UNSECURED LOAN 119 INNER PAGE NO 8 OF THE ASSESSMENT ORDER 1.2 ADVICE OF BANK REGARDING TRANSFER OF AMOUNT TO THE BANK ACCOUNT OF THE ASSESSEE 120-121 ---DO--- 1.3 COPY OF PAN CARD ---DO--- 1.4 COPY OF AUDITED BALANCE SHEET OF THE LOAN CREDITOR AS ON 31.03.2011 122-131 ---DO--- 1.5 COPY OF INTIMATION AS PASSED BY THE CPC CLEARLY MENTIONED THE ADDRESS OF THE LENDER 132-135 ---DO--- 1.6 ABSTRACT OF THE MASTER OF THE LENDER COMPANY AS DOWNLOADED FROM THE SITE OF ROC 136-137 ---DO--- B. M/S AXIOM COMMODEAL P LIMITED [ LOAN OF RS 45,00 ,000/-] S.NO PARTICULARS PAGE NO REFERENCE IN THE ASSESSMENT ORDER 1.1 CONFIRMATION OF UNSECURED LOAN 138 INNER PAGE NO 12 OF THE ASSESSMENT ORDER 1.2 ADVICE OF BANK REGARDING TRANSFER OF AMOUNT TO THE BANK ACCOUNT OF THE ASSESSEE 139-140 ---DO--- 1.3 COPY OF PAN CARD 141 ---DO--- 1.4 COPY OF AUDITED BALANCE SHEET OF THE LOAN CREDITOR AS 142-151 ---DO--- LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 8 ON 31.03.2011 1.5 COP[Y OF ACKNOWLEDGMENT OF IT RETURN 152 ---DO--- 1.6 ABSTRACT OF THE MASTER OF THE LENDER COMPANY AS DOWNLOADED FROM THE SITE OF ROC 153-154 ---DO--- C. M/S CONTRA VANJIYA PVT LIMITED [ LOAN OF RS 50,0 0,000/-] S.NO PARTICULARS PAGE NO REFERENCE IN THE ASSESSMENT ORDER 1.1 CONFIRMATION OF UNSECURED LOAN 155 INNER PAGE NO 9 OF THE ASSESSMENT ORDER 1.2 ADVICE OF BANK REGARDING TRANSFER OF AMOUNT TO THE BANK ACCOUNT OF THE ASSESSEE 156-157 ---DO--- 1.3 COPY OF PAN CARD 158 ---DO--- 1.4 COPY OF AUDITED BALANCE SHEET AS ON 31.03.2011 159-167 1.5 COPY OF ITR V GENERATED ONLINE ON SUBMISSION OF ITR -6 ON 30.09.2011 VIDE ACK NO 301049531300911 168 ---DO--- 1.6 ABSTRACT OF THE MASTER OF THE LENDER COMPANY AS DOWNLOADED FROM THE SITE OF ROC 169-170 ---DO--- D.M/S DHANLABH TRADELINK PVT LIMITED [ LOAN OF RS 75,00,000/-] S.NO PARTICULARS PAGE NO REFERENCE IN THE ASSESSMENT ORDER 1.1 CONFIRMATION OF UNSECURED LOAN 171 INNER PAGE NO 10 OF THE ASSESSMENT ORDER 1.2 ADVICE OF BANK REGARDING TRANSFER OF AMOUNT TO THE BANK ACCOUNT OF THE ASSESSEE 172-174 ---DO--- 1.3 COPY OF PAN CARD 175 ---DO--- 1.4 COPY OF AUDITED BALANCE SHEET OF THE LOAN CREDITOR AS ON 31.03.2011 176-185 ---DO--- 1.5 COPY OF ITR V GENERATED ONLINE ON SUBMISSION OF ITR -6 ON 02-11-2011 VIDE ACK NO 311748621021111 BY THE LENDER COMPANY ---DO--- 1.6 ABSTRACT OF THE MASTER OF THE LENDER COMPANY AS DOWNLOADED FROM THE SITE OF ROC 186-187 ---DO--- E. M/S SPANDGLE DEALTRADE PVT LIMITED [ LOAN OF RS 50,00,000/-] S.NO PARTICULARS PAGE NO REFERENCE IN THE ASSESSMENT ORDER 1.1 CONFIRMATION OF UNSECURED LOAN 188 INNER PAGE NO 11 OF THE ASSESSMENT ORDER 1.2 ADVICE OF BANK REGARDING TRANSFER OF AMOUNT TO THE BANK ACCOUNT OF THE ASSESSEE 189-190 ---DO--- LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 9 1.3 COPY OF PAN CARD 191 ---DO--- 1.4 COPY OF AUDITED BALANCE SHEET OF THE LOAN CREDITOR AS ON 31.03.2011 192-201 ---DO--- 1.5 COPY OF ITR V GENERATED ONLINE ON SUBMISSION OF ITR-6 ON 05-11-2011 VIDE ACK NO 312512891021111 BY THE LENDER COMPANY 202 ---DO--- 1.6 ABSTRACT OF THE MASTER OF THE LENDER COMPANY AS DOWNLOADED FROM THE SITE OF ROC 203-204 ---DO--- 11. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THA T IN SUPPORT OF THE GENUINENESS OF THE LOANS TAKEN FROM THESE FIVE COMPANIES FOLLOWING DOCUMENTS WERE FILED BEFOR E THE LOWER AUTHORITIES: S.NO FACTS OF THE CASE 1 THE AMOUNT OF LOANS WAS RECEIVED THROUGH RTGS 2 THE LOAN AS RECEIVED WAS ALSO REPAID IN THE YEAR 20 12 PRIOR TO THE PASSING OF THE ASSESSMENT ORDER OR PRIOR TO START O F INQUIRY BY THE ASSESSING OFFICER 3 INTEREST ON LOANS WAS CREDITED IN THE ACCOUNT OF TH E LOAN CREDITORS 4 TDS ON THE AMOUNT OF INTEREST WAS ALSO DEDUCTED AND DEPOSITED WITH THE INCOME TAX DEPARTMENT. 5 THE SAID AMOUNT OF TDS AS DEDUCTED DULY REFLECTED I N FORM NO 26AS OF THE DEDUCTEE / PAYEE AND CREDIT OF THE SAME OUGHT T O BE CLAIMED BY THE APPELLANT 6 COPY OF ACCOUNT OF THE APPELLANT IN THE BOOK F THE LOAN CREDITOR WAS FILED WHEREIN THE AMOUNT OF LOAN AS TAKEN BY THE APPELLAN T WAS DULY REFLECTED 7 COPY OF PAN NO OF THE LOAN CREDITORS 8 COPY OF BANK STATEMENT OF THE LOAN CREDITORS WHEREI N THE AMOUNT AS ADVANCED TO THE APPELLANT WAS DULY REFLECTED 9 COPY OF INCOME TAX RETURN/ INTIMATION AS PASSED IN THE LOAN CREDITORS WAS FILED 10 COPY OF AUDITED FINANCIAL STATEMENT OF THE LOANS CR EDITORS FOR THE YEAR ENDED ON 31.03.2011 WAS FILED 11 COPY OF MASTER RECORDS AS DOWNLOADED FROM THE SITE OF MCA WAS ALSO FILED LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 10 12. THEREAFTER LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE SUMMARY OF LOANS RECEIVED FROM THE ALLE GED FIVE COMPANIES WHICH WERE REPAID SUBSEQUENTLY AND INTEREST WAS DEBITED AND TAX DEDUCTED AT SOURCE CONSISTENTLY. IT WAS STATED THAT LOAN FROM ADVANTAG E DEAL TRADE P. LTD. AT RS.50,00,000/- REPAID ON 25.08.201 2, LOAN OF RS.45,00,000/- FROM AXIOM COMMODEAL P. LTD. REPAID ON 21.08.2012, LOAN OF RS.50,00,000/- CONTRA VANIJYA P. LTD. REPAID ON 27.08.2012, LOAN OF RS.75,00,000/- TAKEN FROM DHANLABH TRADE LINK P. LT D. REPAID UP TO 21.08.2012 AND LOAN OF RS.50,00,000/- FROM SPANGLE DEALTRADE P. LTD. REPAID ON 06.09.2012. 13. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT TH E APPELLANT HAD RECEIVED THE ENTIRE AMOUNT OF UNSECUR ED LOAN THROUGH BANKING CHANNELS, TDS DEDUCTED ON THE AMOUN T OF INTEREST WHEREVER APPLICABLE AND SUPPORTING DOCUMEN TARY EVIDENCES WERE ALSO FILED SO AS TO JUSTIFY THE UNSE CURED LOANS RECEIVED BY THE APPELLANT AND THEREFORE ONUS AS CAS TED UPON THE APPELLANT UNDER SECTION 68 OF THE ACT STANDS DULY D ISCHARGED AND THEREFORE THE AMOUNT OF UNSECURED LOAN AS RECEI VED DURING THE YEAR SHALL BE TREATED AS GENUINE AND FROM DISCL OSED SOURCES LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 11 AND THE ADDITION SO MADE TO THE TOTAL INCOME OF THE APPELLANT UNDER SECTION 68 OF THE ACT IS GROSSLY UNJUSTIFIED AND REQUIRES TO BE DELETED IN ENTIRETY. 14. THE ASSESSEE HAS REFERRED TO FOLLOWING WRITTEN SUBMISSIONS: 1.9.3] THAT FOLLOWING TWO SITUATION ARISES IN CASE OF INQUIRY: S.NO CIRCUMSTANCES ACTION OF THE ASSESSING OFFICER 1 IF THE LOAN CREDITOR REFUSED TO ADVANCE AMOUNT TO THE APPELLANT THE LOAN AS SHOWN RECEIVED BY THE APPELLANT IS TO BE ADDED TO ITS INCOME 2 IF LOAN CREDITORS FAILED TO EXPLAIN THE PROPER SOURCE OF AMOUNT AS ADVANCED BY THEM TO THE APPELLANT THE SOURCE WHICH WAS NOT PROPERLY EXPLAINED BY THE CREDITORS CAN BE ADDED TO THEIR INCOME BUT IN NO CASE THE SAME WAS TO BE ADDED TO THE TOTAL INCOME OF THE APPELLANT 1.9.4] THAT IN THE PRESENT CASE IN HAND, THE CREDIT OR NEVER REFUSED TO ADVANCE THE AMOUNT TO THE APPELLANT RATHER REPLY TO THE NOTICE AS ISSUED WAS NOT RECEIVED BY THE ASSESSING OFFICER. THE APPE LLANT WITH THE AMPLE DOCUMENTS PROVED NOT ONLY THE IDENTITY BUT ALSO GEN UINENESS AND CREDITWORTHINESS OF THE LOAN CREDITORS. HENCE, THER E WAS NO JUSTIFICATION FOR ADDING THE AMOUNT OF LOANS AS RECEIVED FROM THESE F IVE PARTIES TO THE TOTAL INCOME OF THE APPELLANT. 1.9.5] THE ASSESSING OFFICER HAS ALSO FAILED TO PIN POINT ANY DOCUMENTS WHICH WAS FILED BY THE ASSESSEE WAS NOT C ORRECT OR FABRICATED. THAT ONCE THE DOCUMENTS AS FILED BY THE ASSESSEE SEEMS AS CORRECT. IN THAT CASE THERE WAS NO REASON FOR TH E ASSESSING OFFICER TO DISBELIEVE ON THE SAME. 1.10.1] THE ASSESSING OFFICER SUMMARIZED THE REASON FOR NON- ACCEPTING THE LOANS AS RECEIVED BY THE ASSESSEE AS GENUINE ON INNER PAGE NO 36 OF THE ASSESSMENT ORDER, THE REASON OF THE AS SESSING OFFICER AND ITS REPLY/ EXPLANATION FROM THE SIDE OF THE ASSESSEE IS AS UNDER: - S.NO OBSERVATION OF THE ASSESSING OFFICER EXPLANATION OF THE APPELLANT 1 LETTER AS ISSUED U/S 133[6] OF THE ACT BUT NO REPLY WAS RECEIVED FROM THE CREDITORS. HENCE, THE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION REMAINED UNPROVED. THE ASSESSING OFFICER HIMSELF ACCEPTED THE IDENTITY OF THE LOAN CREDITOR AND DISPUTED ABOUT THE CREDIT WORTHINESS AND GENUINENESS OF THE LOAN TRANSACTIONS. THE ASSESSEE WITH THE HELP OF BANK STATEMENT, BALANCE SHEET AND INCOME TAX RETURN PROVED THE CREDIT WORTHINESS AND GENUINENESS OF THE LOAN TRANSACTIONS WHICH WAS NOT DISBELIEVED BY THE ASSESSING OFFICER HIMSELF. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 12 2 ON THE BASIS OF ADIT [ INV] UNIT- (III), KOLKATA, SINCE THE SUMMON WAS NOT SERVED UPON TO THE LOAN CREDITORS THE ASSESSING OFFICER REACHED TO A CONCLUSION THAT THESE COMPANIES ARE NOT IN EXISTENCE. THAT ALL THE LOAN CREDITORS ARE COMPANIES AND DULY REGISTERED WITH THE REGISTRAR OF THE COMPANIES AND ALSO FILING THEIR INCOME TAX RETURN. THE ASSESSEE HAS PROVIDED COPY OF ACKNOWLEDGMENT, INTIMATION AS RECEIVED FROM CPC, BANK STATEMENT, AUDITED FINAL ACCOUNT AND MASTER RECORDS AS DOWNLOADED FROM THE ROC/ MCA SITE. HENCE IDENTITY OF THE LOAN CREDITORS STANDS PROVED BEYOND DOUBT. 3 THE ASSESSING OFFICER FURTHER OBSERVED THAT MERELY LOAN AMOUNT WAS RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUES NOT DISCHARGED THE ONUS LYING ON IT IN LIGHT OF DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS PRECISION FINANCE LTD AS REPORTED IN 208 ITR 465. THE ASSESSING OFFICER WAS FACTUALLY WRONG, THE ASSESSEE NOT ONLY EXPLAINED THAT ENTIRE AMOUNT OF LOANS WERE RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUES BUT ALSO PROVIDED COPY OF ITS ACCOUNT IN THE BOOK OF LOAN CREDITORS, PA NO, RELEVANT PAGE OF BANK ACCOUNT, BALANCE SHEET AND MASTER RECORDS AS DOWNLOADED FROM MCA. 4 THE ASSESSING OFFICER FURTHER OBSERVED THAT MERE FILING OF THE IT NUMBER IS NOT ENOUGH TO PROVE THE GENUINENESS OF CASH CREDIT. THE ASSESSEE IN THE PRESENT CASE NOT ONLY PROVIDED THE IT NUMBER BUT ALSO FILED COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOK OF THE LOAN CREDITORS ALONG WITH PA NO AND RELEVANT PAGE OF BANK ACCOUNT WITH ACK OF INCOME TAX RETURN AS FILED AND INTIMATION AS RECEIVED FROM CPC. HENCE, THE ASSESSING OFFICER WAS NOT RIGHT IN STATING THAT MERE IT NUMBER WAS PROVIDED BY THE ASSESSEE. THAT FROM THE PA NO , IT IS THE DUTY OF THE ASSESSING OFFICER TO CALLED INFORMATION FROM HIS COUNTERPART WHO IS THE ASSESSING OFFICER OF THE LOAN CREDITORS AND ON RECEIPT OF THE INFORMATION FROM THAT OFFICER THE SA ME WAS PROVIDED TO THE ASSESSEE FOR ITS COMMENTS BUT NOTHING WAS DONE BY THE ASSESSING OFFICER AND SIMPLY REJECTED THE SUBMISSION OF THE ASSESSEE. 5 THE ASSESSING OFFICER ON THE BASIS OF INQUIRY JUMPED TO A CONCLUSION THAT ALL THESE LOAN CREDITORS COMPANIES ARE PAPER COMPANIES. THE SAID OBSERVATION OF THE ASSESSING OFFICER IS ALSO NOT CORRECT MORE SO WHEN THE ASSESSEE HAS PROVIDED THE COMPLETE DETAILS TO THE ASSESSING OFFICER AND NOT ONLY PROVED THE IDENTITY BUT ALSO GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITORS. THESE COMPANIES ARE REGULARLY FILING THE IR INCOME TAX RETURN AND ALSO FILED RETURN WITH THE REGISTRAR OF THE COMPANIES. 6 THE ASSESSING OFFICER REFERRED INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING AND JUMPED TO A CONCLUSION THAT MOST OF THE COMPANIES BASED FROM KOLKATA AND MUMBAI PROVIDED ACCOMMODATION ENTRIES TO THE LOCAL INDORE BASE COMPANIES. THE ASSESSING OFFICER SOME INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING BUT THE SAID INVESTIGATION CARRIED OUT IN WHICH CONTEXT IS NOT KNOWN TO THE ASSESSEE WHETHER THE NAME OF THE ASSESSEE OR LOAN CREDITOR OF THE ASSESSEE WAS FOUND PLACE IN THE SAID INVESTIGATION WAS ALSO NOT KNOWN TO THE ASSESSEE. HENCE, THE ASSESSING OFFICER WAS GROSSLY ERRED IN MAKING THIS TYPE OF CASUAL REMARKS IN THE ASSESSMENT ORDER WHICH SUPPOSED TO BE PASSED ON THE BASIS OF MATERIAL LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 13 AVAILABLE BEFORE HIM. 7 THE ASSESSING OFFICER IGNORED THE JUDICIAL DECISIONS AS REFERRED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING BY STATING THAT THE SAME ARE DISTINGUISHABLE ON THE FACTS OF THE PRESENT CASE. THE ASSESSING OFFICER HAS UTTERLY FAILED TO MENTIONED WHY THE DECISIONS AS REFERRED BY THE ASSESSEE WAS DISTINGUISHABLE ON THE FACTS OF THE PRESENT CASE OF THE ASSESSEE. THAT DECISIONS AS REFERRED BY THE ASSESSEE SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE, AS DISCUSSED BY THE ASSESSEE IN THIS LETTER. 8 THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NO FURNISHED THE COMPLETE DETAILS WHICH INCLUDES CONFIRMATION AND OTHER DOCUMENTS. THE ASSESSING OFFICER GROSSLY ERRED IN STATING THAT THE ASSESSEE HAS NOT FILED CONFIRMATION LETTER EVEN WHEN THE ASSESSEE HAD FILED COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOK OF LOAN CREDITORS ALONG WITH THE PA NO AND COPY OF ACK OF INCOME TAX RETURN AS FILED WITH RELEVANT PAGE OF BANK ACCOUNT AND AUDITED FINAL ACCOUNT OF THE LOAN CREDITORS. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING CASUAL REMARKS. 9 THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAS NOT PAID INTEREST TO THESE PARTIES AND IT SEEMS THAT WHOLE TRANSACTIONS IS A COLORABLE DEVICE AND FABRICATED. THE ASSESSEE HAS TAKEN LOAN FOR LONG TERM PERIOD , IF THE LOAN CREDITORS DEMAND REPAYMENT WITHIN THREE MONTHS NO INTEREST WAS PAYABLE. HOWEVER, THE ASSESSEE HAD PAID INTEREST AND ALSO DEDUCTED TDS ON THE SAME IN THE SUCCEEDING YEARS PRIOR TO THE DATE OF PASSING OF THE ASSESSMENT ORDER FOR THE ASST YEAR 2011-12. HENCE, THE ASSESSING OFFICER WAS NOT CORRECT IN STATING THAT NO INTEREST WAS PAI D BY THE ASSESSEE. 10 THE ASSESSING OFFICER FINALLY REFERRED THE PROVISION OF SECTION 68 AND REACHED TO A CONCLUSION THAT THE ASSESSEE HAS NOT DISCHARGED ONUS LYING ON IT BY PROVING THE IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTIONS. THAT AS PER PROVISION OF SECTION 68 OF THE INCOME TAX ACT, THE ASSESSEE FAIL TO OFFER EXPLANATION OR EXPLANATION AS PROVIDED BY THE ASSESSEE WAS NOT FOUND SATISFACTORY BY THE ASSESSING OFFICER IN THAT CASE NECESSARY ADDITION IS TO BE MADE TO THE INCOME OF THE ASSESSEE. HOWEVER, IN THE PRESENT CASE IN HAND THE ASSESSEE HAS PROPERLY EXPLAINED THAT THE ABOVE SAID AMOUNT OF LOANS WERE RECEIVED FROM PARTICULAR COMPANIES AND IN SUPPORT OF ITS CONTENTION ALSO FILED AMPLE DOCUMENTS, THE ASSESSING OFFICER ALSO FAILED TO PIN POINT WHICH DOCUMENTS FOUND FALSE OR FABRICATED. THAT IN ABSENCE OF ANY DEFECTS IN THE DOCUMENTS AS FILED BY THE ASSESSEE, THERE WAS NO REASON FOR THE ASSESSING OFFICER TO DISBELIEVE ON THE SAME. THUS, THE ASSESSING OFFICER HAS NOT JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF LOAN AS RECEIVED BY THE ASSESSEE. 15. IN SUPPORT OF THE CONTENTION THAT WHERE PAN NO. ARE LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 14 PROVIDED, THE AMOUNT RECEIVED THROUGH ACCOUNT PAYEE CHEQUE, THE IDENTITY OF THE SAME APPLICANT/CREDITORS HAS BE EN TREATED AS EXPLAINED AS HELD IN THE FOLLOWING DECISIONS: S.NO REFERENCE CITATION 1 CIT VS ROCK FORT METAL & MINERALS 198 TAXMANN 497 (DELHI) 2 CIT VS WINSTRAL PETROCHEMICALS (P) LTD 330 ITR 603 (DELHI) 3 CIT VS OASIS HOSPITALITIES (P) LTD 333 ITR 119 DELHI) 4 CIT VS GANGOUR INVESTMENT LTD 335 ITR 359 (DELHI ) 5 CIT VS TULIP FINANCE LTD 015 DTR 185 (DELHI) 16. QUOTING THE ABOVE DECISION LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS A SETTLED POSITION OF LAW THA T ONCE THE ASSESSEE HAS PROVED THE IDENTITY OF THE CREDITORS, IN THAT CASE THERE IS NO JUSTIFICATION FOR MAKING ANY ADDITION T O THE INCOME OF THE ASSESSEE. IF THE ASSESSING OFFICER HAS ANY D OUBT ABOUT THE GENUINENESS OF THE LOAN IN THAT CASE ALSO ADDITION SHOULD BE MADE IN THE CASE OF THAT CREDITOR AND NOT IN THE CA SE OF THE ASSESSEE. HE ALSO SUBMITTED THAT IN CASE WHERE THE AMOUNT RECEIVED BY THE ASSESSEE IS IN THE FORM OF UNSECUR ED LOAN AND LOAN CREDITOR IS REGULARLY ASSESSED TO TAX, THEN, I T IS THE DUTY OF THE ASSESSING OFFICER TO WRITE A LETTER TO THE ASSE SSING OFFICER HAVING JURISDICTION ON THE UNSECURED LOAN CREDITORS . THAT ONCE THE ONUS AS LYING ON THE ASSESSEE IS DISCHARGED IN THAT CASE LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 15 THERE IS NO JUSTIFICATION FOR TAKING ANY ADVERSE VI EW AGAINST THE ASSESSEE. 17. FOR THE PROPOSITION THAT THE YEAR UNDER APPEAL BEING A.Y. 2011-12 THE ASSESSEE IS ONLY REQUIRED TO PROVE THE SOURCE OF LOAN RECEIVED BUT NOT REQUIRED TO PROVE THE SOURCE OF SOURCE, RELIANCE PLACED ON FOLLOWING DECISIONS: S.NO NAME OF THE DECISIONS CITATION 1 ACIT VS INDIA TYRE HOUSE 72 TTJ 316 (GAUHATI BENCH) 2 RAMMANOHAR SINGH VS ACIT 009 DTR 270 (JABALPUR BENCH) 3 S K JAIN VS ITO 002 SOT 579 (AGRA BENCH) 4 NEMICHAND KOTHARI VS CIT 264 254 (GAUHATI) 5 ORBITAL COMMUNICATION (P) LTD 327 ITR 560 (DELHI) 6 DWARKADHISH INVESTMENT (P) LTD 330 ITR 298 (DELHI) 18. LD. COUNSEL FOR THE ASSESSE ALSO REFERRED TO TH E DECISION OF COORDINATE BENCH JAIPUR IN THE CASE OF M/S MOTISONS ENTERTAINMENT (INDIA) P LIMITED [ APPEAL NO ITA NO 386 & 387/ JP/ 2017 DT 09-11-2017 AS PASSED FOR THE ASST YEARS 2011-12 AND 2012-13 IN SUPPORT OF THE CONTENTION THAT THE ASSESSEE HAS SUCCESSFULLY EXPLAINED THE CASH CREDIT AND NO ADDIT ION IS CALLED FOR U/S 68 OF THE ACT. IN THIS CASE ISSUE OF UNEXPL AINED CASH CREDIT U/S 68 OF THE ACT FROM VARIOUS LENDER COMPAN IES INCLUDING THE ALLEGED FIVE CASH CREDITORS OF THE IN STANT APPEALS WERE FOR CONSIDERATION. HONBLE JAIPUR BENCH NOT O NLY ACCEPTED LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 16 THE IDENTITY BUT ALSO OF THE CAPACITY TO LEND THE A MOUNT RECEIVED FROM THESE COMPANIES AND ALSO SATISFIED WITH THE GE NUINENESS OF LOAN TRANSACTION. THAT THE HONBLE HIGH COURT OF RA JASTHAN VIDE ITS ORDER DT. 31-07-2018 HAS APPROVED THE ORDER AS PASSED BY THE HONBLE ITAT, JAIPUR BENCH IN CASE OF M/S. MOTISONS ENTERTAINMENT (INDIA) PVT. LTD. (SUPRA), WHEREIN THE AMOUNT AS RECEIVED FROM THESE PARTIES WERE ACCEPTED AS GENUIN E. COPY OF THE SAID ORDER IS ENCLOSED IN THE PAPER BOOK. 19. THE RELIANCE WAS PLACED ON THE FOLLOWING DECISI ONS: 1 HONBLE JURISDICTIONAL BENCH OF ITAT IN THE CASE OF M/S. INDUSTRIAL FILTERS AND FABRICS PVT. LTD. VS ACIT AS REPORTED I N (2020) 37 ITJ 61 (TRIB. - INDORE) 2. CIT V. DOLPHIN CANPACK LTD. [2006] 283 ITR 190 ( DELHI), 3. CIT V SAHIBGANJ ELECTRIC CABLES (P) LTD. [1978] 1151TR 408 (CAL.) 4.ITO V SURESH KALMADI [1988] 32 TTJ (PUNE) TM 300 5.HON'BLE APEX COURT IN THE CASE OF CIT VS ORISSA C ORPORATION (P) LTD AS REPORTED IN 159 ITR 78 6.HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASHOK PAL DAGA VS CIT REPORTED IN 220 ITR 452 7.HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS BARJATIYA CHILDREN TRUST AS REPORTED IN 225 ITR 640 8. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS METACHEM INDUSTRIES AS REPORTED IN 245 ITR 160 9.HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS RANCHHOD JIVABHAI NAKHAVA AS REPORTED IN 21 TAXMANN.COM 159 10. HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS ROHINI BUILDERS AS REPORTED IN 256 ITR 360 11.HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S H INDUSTAN TEA TRADING CO LIMITED AS REPORTED IN 263 ITR 289 12. THAT HONBLE ITAT MUMBAI BENCH IN THE CASE OF I NCOME TAX OFFICER 9(1)-1 VS ANANT SHELTERS (P) LTD REPORTED I N 20 TAXMANN.COM 153 LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 17 13.HONBLE DELHI HIGH COURT IN THE CASE OF GANGESHW ARI METAL PVT LTD [ITA NO 597/2012] 20. PER CONTRA LD. DR VEHEMENTLY ARGUED SUPPORTING THE FINDING OF BOTH LOWER AUTHORITIES. HE ALSO TOOK US THROUGH THE FINDING OF LD. CIT(A) APPEARING AT PARA 4.2.2 T O 4.2.6 AT PAGE 21 TO 29 OF THE IMPUGNED ORDER WHEREIN LD. CIT(A) HAS ALSO REFERRED TO VARIOUS JUDGEMENTS IN F AVOUR OF THE REVENUE. 21. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH DECISIO NS REFERRED AND RELIED BY BOTH SIDES. THROUGH GROUND NO.1 ASSES SEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION FOR UNEXPLAINED CASH CREDIT OF RS.2,70,00,000/- MADE BY THE LD. ASSESSING OFFICER FOR UNSECURED LOAN RECEIVED FROM FOLLOWING COMPANIES: S.NO NAME OF THE LOAN CREDITORS PA NO 1 ADVANTAGE DEALTRADE P LIMITED AAICA7805Q 2 AXIOM COMMODEAL P LIMITED AAICA5208K 3 CONTRA VANIJYA P LIMITED AADCC9936D 4 DHANLABH TRADE LINK P LIMITED AADCD5263C 5 SPANGLE DEALTRADE P LIMITED AAOCS5475L 22. WE NOTICE THAT DURING THE ASSESSMENT PROCEEDING S LD. ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF T HE ACT LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 18 SEEKING INFORMATION FROM THE ALLEGED CASH CREDITORS . LD. ASSESSING OFFICER HAS ACCEPTED THAT ALL THE NOTICES WERE DULY SERVED UPON THE ALLEGED CASH CREDITORS. HOWEV ER, NO REPLY WAS RECEIVED. WE FURTHER NOTICE THAT THE ASSESSEE HAS FILED ALL NECESSARY DETAILS IN ORDER T O PROVE IDENTITY AND CREDITWORTHINESS OF THE ALLEGED CASH CREDITORS AND GENUINENESS OF THE LOAN TRANSACTIONS. WE ALSO NOTICE THAT ALL THE UNSECURED LOANS WERE RECEI VED THROUGH BANKING CHANNELS, INTEREST HAS BEEN CHARGED DURING THE YEAR, TAX DEDUCTED AT SOURCE AND ALL THE ALLEGED LOANS HAVE BEEN REPAID SUBSEQUENTLY THROUGH BANKING CHANNELS. 23. ON PERUSAL OF RECORDS FILED BEFORE US BY THE LD . COUNSEL FOR THE ASSESSEE, FOLLOWING COMMON DETAILS HAVE BEEN FILED WITH RESPECT TO ALL THE ALLEGED CASH CRE DITORS. S.NO FACTS OF THE CASE 1 THE AMOUNT OF LOANS WAS RECEIVED THROUGH RTGS 2 THE LOAN AS RECEIVED WAS ALSO REPAID IN THE YEAR 20 12 PRIOR TO THE PASSING OF THE ASSESSMENT ORDER OR PRIOR TO START OF INQUIRY B Y THE ASSESSING OFFICER 3 INTEREST ON LOANS WAS CREDITED IN THE ACCOUNT OF TH E LOAN CREDITORS 4 TDS ON THE AMOUNT OF INTEREST WAS ALSO DEDUCTED AND DEPOSITED WITH THE INCOME TAX DEPARTMENT. 5 THE SAID AMOUNT OF TDS AS DEDUCTED DULY REFLECTED I N FORM NO 26AS OF THE DEDUCTEE / PAYEE AND CREDIT OF THE SAME OUGHT TO BE CLAIMED BY THE APPELLANT LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 19 6 COPY OF ACCOUNT OF THE APPELLANT IN THE BOOK F THE LOAN CREDITOR WAS FILED WHEREIN THE AMOUNT OF LOAN AS TAKEN BY THE APPELLAN T WAS DULY REFLECTED 7 COPY OF PAN NO OF THE LOAN CREDITORS 8 COPY OF BANK STATEMENT OF THE LOAN CREDITORS WHEREI N THE AMOUNT AS ADVANCED TO THE APPELLANT WAS DULY REFLECTED 9 COPY OF INCOME TAX RETURN/ INTIMATION AS PASSED IN THE LOAN CREDITORS WAS FILED 10 COPY OF AUDITED FINANCIAL STATEMENT OF THE LOANS CR EDITORS FOR THE YEAR ENDED ON 31.03.2011 WAS FILED 11 COPY OF MASTER RECORDS AS DOWNLOADED FROM THE SITE OF MCA WAS ALSO FILED 24. WE ALSO NOTICE THAT ALL THE DOCUMENTARY EVIDENC ES FILED BY THE ASSESSEE AND CONTENTS APPEARING THERE IN HAVE NOT BEEN FOUND TO BE INCORRECT BY THE LOWER AUTHORITIES AT ANY STAGE. LD. ASSESSING OFFICER HAS TREATED THE ALLEGED CASH CREDITORS AS AN UNEXPLAINE D MERELY ON THE BASIS OF AN INVESTIGATION REPORT WHIC H IS NEVER CONFRONTED TO THE ASSESSEE NOR ANY OPPORTUNIT Y OF CROSS EXAMINATION WAS PROVIDED WHICH IN ITSELF DEFI ES THE PRINCIPLES OF NATURE JUSTICE. 25. PROVISION OF SECTION 68 READS AS FOLLOWS: WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAI NED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABO UT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS N OT, IN THE OPINION OF THE ASSESSING OFFICER, SATISF ACTORY, THE SUM SO CRE DITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF T HAT PREVIOUS YEAR. PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED), AND THE SUM SO CREDI LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 20 TED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPI TAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EX PLANATION OFFERE D BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NO T SATISFACTORY, UNLESS A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDE D IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLA NATION ABOUT THE N ATURE AND SOURCE OF SUCH SUM SO CREDITED; AND (B) SUCH AN EXPLANATION IN THE OPINION OF THE ASSES SING OFFICER AFORES AID HAS BEEN FOUND TO BE SATISFACTORY. PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRS T PROVISO SHALL APPLY IF THE PERSON, IN WHOSE NAME THE SUM REFERRED TO TH EREIN IS RECORDED, I S A VENTURE CAPITAL FUND OR A VENTURE CAPITAL COMPA NY AS REFERRED TO IN CLAUSE (23FB) OF SECTION 10. 26. FROM PERUSAL OF THE ABOVE PROVISION WE FIND THA T A PROVISO WAS INSERTED W.E.F. 01.04.2013 AFTER WHICH IN CASE OF ASSESSEE COMPANY IF ANY SUM CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMI UM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATIO N OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS IT OFFERS AN EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED AND SUCH EXPLANA TION IS FOUND TO BE SATISFACTORY IN THE OPINION OF THE LD. ASSESSING OFFICER. IN SHORT THE ASSESSEE IS REQUIRED TO EXPLA IN THE SOURCE OF SOURCE TO THE SATISFACTION OF THE LD. ASSESSING OFF ICER W.E.F. 01.04.2013. HOWEVER, THIS PROVISO IS NOT APPLICABLE IN THE CASE OF ASSESSEE AS THE ISSUE RELATES TO A.Y. 2011-12. B EFORE THE INSERTION OF THE PROVISO TO SECTION 68 OF THE ACT W .E.F. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 21 01.04.2013, ASSESSEE IS ONLY REQUIRED TO PROVE THE SOURCE OF THE SUM CREDITED DURING THE YEAR IN ITS BOOKS OF ACCOUN T. 27. IN THE INSTANT CASE, THE ASSESSEE RECEIVED LOAN S FROM FIVE COMPANIES AS REFERRED ABOVE. THE COMPANIES BEING PV T. LTD. COMPANY HAVE ALL THE DETAILS OF THEIR IDENTITY INCL UDING ADDRESS AND FINANCIAL DATAS ON THE PORTAL OF MINISTRY OF C ORPORATE AFFAIRS AVAILABLE FOR THE PUBLIC. THE ASSESSEE HAS ALSO FILED COPIES OF BANK INVOICES AND THE INCOME TAX RETURN T O PROVE THE SOURCE. PRIMA FACIE IN OUR VIEW THE ASSESSEE DISCHA RGED ITS ONUS TO PROVE THE SOURCE OF ALLEGED CASH CREDITS BEFORE THE LD. ASSESSING OFFICER. THEREAFTER THE BURDEN SHIFTS ON TO THE REVENUE AUTHORITIES TO DISPROVE SUCH DOCUMENTS OR T O FIND ANY DISCREPANCY IN SUCH DOCUMENTS, WHICH HAS NOT BEEN F OUND BY THE REVENUE AUTHORITIES IN THE INSTANT APPEAL. THE PAN NO. OF THE ALLEGED CASH CREDITORS WAS VERY MUCH AVAILABLE WITH THE LD. ASSESSING OFFICER. NO REPORTS SEEM TO HAVE BEEN CAL LED FROM THE COUNTERPART LD. ASSESSING OFFICER HAVING JURISDICTI ON OVER THE ALLEGED CASH CREDITORS. THE ASSESSEE HAS LIMITED ME ANS TO CALL FOR ELABORATE INFORMATION REQUIRED BY LD. ASSESSING OFFICER. LOOKING TO THE LIST OF DOCUMENTS FILED BY THE ASSES SEE TO EXPLAIN THE CASH CREDIT WE FIND THAT NOTHING MORE COULD HAV E BEEN LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 22 POSSIBLE FOR ASSESSEE TO EXPLAIN THE IDENTITY AND CREDITWORTHINESS OF THE CASH CREDITORS AND GENUINEN ESS OF THE TRANSACTIONS. 28. WE ALSO NOTICE THAT THE ISSUE OF IDENTITY, GENU INENESS AND CREDITWORTHINESS OF THE ALLEGED CASH CREDITORS NAME LY ADVANTAGE DEALTRADE P LIMITED, AXIOM COMMODEAL P LIMITED ,CON TRA VANIJYA P LIMITED ,DHANLABH TRADE LINK P LIMITED ,S PANGLE DEALTRADE P LIMITED. CAME UP BEFORE THE COORDINATE BENCH JAIPUR IN THE CASE OF M/S MOTISONS ENTERTAINMENT (INDIA) PVT. LTD. IN ITANO.386 & 387/JP/2017 DATED 09.11.2017 PERTAINING TO A.Y. 2011-12 & 2012-13 AND COORDINATE BENCH JAIP UR AFTER EXAMINING DOCUMENTARY EVIDENCES FILED BEFORE IT HAS NOT ONLY ACCEPTED THE IDENTITY BUT ALSO CAPACITY OF THE CASH CREDITORS OF HAVING LENT THE LOANS. THE COPY OF THIS ORDER OF TH E TRIBUNAL IS PLACED 42 TO 51 OF THE PAPER BOOK DATED 19.08.2019. IN THIS ORDER OF COORDINATE BENCH JAIPUR IN THE CASE OF M/S MOTISONS ENTERTAINMENT (INDIA) P. LTD. (SUPRA) DECISION OF THE TRIBUNAL IN THE CASE OF MOTISONS BUILTECH VS. ACIT IN ITANO.385/JP/2017 WAS APPLIED MUTATIS MUTANDIS . WE ALSO FIND THAT HONBLE HIGH COURT OF RAJASTHAN VIDE ITS ORDER DATED 31.07.2018 HAS CONFIRMED THE VIEW TAKEN BY COORDINATE BENCH JAIPUR IN THE LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 23 CASE OF M/S MOTISONS ENTERTAINMENT (INDIA) P. LTD. (SUPRA) WHEREIN THE TRIBUNAL WAS SATISFIED WITH THE IDENTIT Y, GENUINENESS AND CREDITWORTHINESS OF THE ALLEGED CAS H CREDITORS IN QUESTION BEFORE US IN THIS APPEAL. 29. WE FURTHER WOULD LIKE TO REFER TO THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF H.R. MEHTA VS. ACI T REPORTED AT 72 TAXMANN.COM 110 WHEREIN HONBLE COURT HELD IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE DEALING WITH I SSUE OF ADDITION U/S 68 OF THE ACT OBSERVING AS FOLLOWS: 11. WE HAVE THEREFORE PROCEEDED TO HEAR AND DECIDE THE MATTER UNASSISTED BY REVENUE IN THE COURSE OF HIS SUBMISSIONS MR. TRALSHAWALA HAD PRESSED INTO SERVIC E INTER ALIA THE DECISION OF THE CALCUTTA HIGH COURT IN MATHER & PLATT (INDIA) LTD. (SUPRA) AND SUBMITTED THAT MERELY BECAUSE A PERSON IS NOT FOUND AT AN ADDRESS AFTER S EVERAL YEARS IT CANNOT BE HELD THAT HE IS NON EXISTENT AND THAT THE ASSESSEE HAD DISCHARGED HIS PRIMARY ONUS BY IDENTIF YING THE SOURCE OF THE AMOUNT PAID. THE COURT OBSERVED T HAT ONCE THE PRIMARY ONUS IS DISCHARGED, THE ONUS SHIFT ED TO THE REVENUE TO VERIFY GENUINENESS OF THE TRANSACTIO N. IN THE PRESENT CASE NO SUCH EFFORT WAS MADE BY THE REVENUE . WE FIND THAT IN S. HASTIMAL (SUPRA) THE MADRAS HIGH COURT OBSERVED THAT AFTER A LAPSE OF SEVERAL YEARS THE AS SESSEE SHOULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPLAIN NOT ONLY MERELY, THE ORIGIN AND SOURCE OF H IS CAPITAL CONTRIBUTION BUT THE ORIGIN OF ORIGIN AND T HE SOURCE OF SOURCE AS WELL. IN YET ANOTHER CASE OF BAHRI BROTHERS (P) LTD. (SUPRA) THE DIVISION BENCH OF PATNA HIGH COURT OBSERVED THAT WHERE THE ASSESSEE UPON WHOM THE INIT IAL BURDEN LIES, PRODUCES BANK CERTIFICATE TO ESTABLISH THAT THE TRANSACTION WAS CARRIED OUT THROUGH ACCOUNT PAYEE CHEQUES THUS IS CLOSING THE IDENTITY OF THE CREDITO RS AS ALSO THE SOURCE OF INCOME, THE BURDEN SHIFTS ON TO THE DEPARTMENT AND THE DEPARTMENT CANNOT ADD THE CASH LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 24 CREDITS TO HIS INCOME FROM UNDISCLOSED SOURCE. 12. THE HON'BLE SUPREME COURT IN NEMI CHAND KOTHARI (SUPRA) OBSERVED THAT IN ORDER TO ESTABLISH THE RECEIPT OF A CASH CREDIT, THE ASSESSEE MUST SATISFY THREE CONDIT IONS I.E. IDENTITY OF THE CREDITOR, GENUINENESS OF THE TRANSA CTION AND CREDITWORTHINESS OF THE CREDITOR. IN THE INSTANT CA SE BY VIRTUE OF THE FACT THAT THE TRANSACTION WAS COMPLET ED BY CHEQUE PAYMENTS, THE APPELLANT HAS CONTENDED THAT I T HAD SATISFIED ALL THE THREE TESTS. 13. IN KISHANCHAND CHELLARAM (SUPRA) WHEREIN THE SUPREME COURT OBSERVED THAT THE REVENUE AUTHORITIES HAD NOT RECORDED THE STATEMENT OF THE MANAGER OF THE BANK A ND IT WAS DIFFICULT TO APPRECIATE AS TO WHY IT WAS NOT DO NE AND WHY THE MATTER WAS NOT PROBED FURTHER BY THE REVENU E. 14. THE DELHI HIGH COURT IN ASHWANI GUPTA (SUPRA)HELD THAT ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATU RAL JUSTICE INASMUCH AS WHEN ITS SEIZED MATERIAL WAS NOT PROVID ED TO AN ASSESSEE NOR WAS HE PERMITTED TO CROSS EXAMINE A PERSON ON WHOSE STATEMENT THE ASSESSING OFFICER REL IED, IT WOULD AMOUNT TO DEFICIENCY, AMOUNTING TO A DENIAL O F OPPORTUNITY AND THEREFORE VIOLATION OF PRINCIPLES O F NATURAL JUSTICE. IN THAT CASE CIT (A) HAD DELETED ADDITION MADE BY THE ASSESSING OFFICER SINCE THE ASSESSING OFFICER H AD FAILED TO PROVIDE COPIES OF SEIZED MATERIAL TO THE ASSESSEE NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-EXAMINE THE PARTY CONCERNED. THE. DIVISION BENCH HELD AT ONCE THERE I S VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SE IZED MATERIAL WAS NOT PROVIDED TO THE ASSESSEE NOR WAS G IVEN OPPORTUNITY OF CROSS EXAMINING THE PERSON WHOSE STA TEMENT WAS BEING USED AGAINST THE ASSESSEE THE ORDER COULD NOT BE SUSTAINED. 15. IN ANDAMAN TIMBER INDUSTRIES (SUPM) THE SUPREME COURT FOUND THAT THE ADJUDICATING AUTHORITY HAD NOT GRANT ED AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE WI TNESSES AND THE TRIBUNAL MERELY OBSERVED THAT THE CROSS EXA MINATION OF THE DEALERS IN THAT CASE, COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT OTHERWISE BE IN POSSESSION OF THE APPELLANT-ASSESSEE. THE SUPREME COURT SET ASIDE THE IMPUGNED ORDER AND OBSERVED THAT IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COU LD BE THE SUCH MATTER OF THE CROSS EXAMINATION AND MAKE THE REMARKS LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 25 SUCH AS WAS DONE IN THAT CASE. 16. IN THE INSTANT CASE ALTHOUGH THE APPELLANT ASSESSEE HAS CALLED UPON US TO DRAW AN INFERENCE THAT THE BURDEN SHIFTED TO THE REVENUE IN THE PRESENT CASE ONCE IT WAS ESTA BLISHED THAT THE PAYMENTS WERE MADE AND REPAID BY CHEQUE WE NEED NOT HASTEN AND ADOPT THAT VIEW AFTER HAVING GI VEN OUR THOUGHT TO VARIOUS ISSUES RAISED AND THE DECISIONS CITED BY MR.TRALSHAWALLA AND FINDING THAT ON A VERY FUNDAMENTAL ASPECT, THE REVENUE WAS NOT JUSTIFIED IN MAKING ADD ITION AT THE TIME OF REASSESSMENT WITHOUT HAVING FIRST GIVEN THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE THE DEPONE NT ON THE STATEMENTS RELIED UPON BY THE ACIT. QUITE APART FROM DENIAL OF AN OPPORTUNITY OF CROSS EXAMINATION, THE REVENUE DID NOT EVEN PROVIDE THE MATERIAL ON THE BASIS OF W HICH THE DEPARTMENT SOUGHT TO CONCLUDE THAT THE LOAN WAS A BOGUS TRANSACTION. '17. IN OUR VIEW IN THE LIGHT OF THE FACT THAT THE MONIES WERE ADVANCED APPARENTLY BY THE ACCOUNT PAYEE CHEQUE AND WAS REPA ID VIDE ACCOUNT PAYEE CHEQUE THE LEAST THAT THE REVENUE SHOULD HAVE DONE WAS TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO MEET THE CA SE AGAINST HIM BY PROVIDING THE MATERIAL SOUGHT TO BE USED AGAINST AS SESSEE IN ARRIVING BEFORE PASSING THE ORDER OF REASSESSMENT. THIS NOT HAVING BEEN DONE, THE DENIAL OF SUCH OPPORTUNITY GOES TO ROOT OF THE MATTER AND STRIKES AT THE VERY FOUNDATION OF THE REASSESSMENT AND THEREFO RE RENDERS THE ORDERS PASSED BY THE CIT (A) AND THE TRIBUNAL VULNE RABLE. IN OUR VIEW THE ASSESSEE WAS BOUND TO BE PROVIDED WITH THE MATE RIAL USED AGAINST HIM APART FROM BEING PERMITTING HIM TO CROS S EXAMINE THE DEPONENTS. DESPITE THE REQUEST DATED 15TH FEBRUARY, 1996 SEEKING AN OPPORTUNITY TO CROSS EXAMINE THE DEPONENT AND FURNI SH THE ASSESSEE WITH COPIES OF STATEMENT AND DISCLOSE MATERIAL, THE SE WERE DENIED TO HIM. IN THIS VIEW OF THE MATTER WE ARE INCLINED TO ALLOW THE APPEAL ON THIS VERY ISSUE. 18. ONCE WE TAKE THIS VIEW IT IS NOT NECESSARY TO C ONSIDER LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 26 THE SECOND QUESTION AS TO WHETHER OR NOT THE TRIBUN AL HAD ERRED IN LAW IN HOLDING THAT THE AMENDMENT TO SECIO N 147(3) WITH EFFECT FROM 1ST APRIL, 1989 WERE APPLICABLE TO REASSESSMENT EDINGS AGAINST THE APPELLANT IN RESPEC T OF ASSESSMENT YEAR 1983-84. THIS ISSUE BE CONSIDERED I N AN APPROPRIATE CASE AND NEED NOT DETAIN US ANY FURTHER . MR. TRALSHAWALA HAD RELIED UPON THE DECISION IN RANCHI HANDLOOM EMPORIUM (SUPRA) WHICH HELD THAT THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 CAME INTO FORCE FROM 1ST APRIL, 1989. THE CASE BEFORE THAT COURT RELATED TO ASSESSM ENT YEAR 1988-89 AND THE RELEVANT ACCOUNTING YEAR BEING 9TH JULY, 1986 TO 27TH JUNE, 1987 AND HENCE THE COURT H ELD THAT THERE WAS NO DOUBT THAT THE ASSESSMENT IN THAT YEAR WOULD BE GOVERNED BY THE UNAMENDED PROVISIONS. THE APPLICABILITY OF THE AMENDED PROVISIONS NEED NOT BE GONE INTO BY US IN THE PRESENT CASE SINCE WE ARE OF THE VIEW THAT ON VERY FIRST QUESTION, 'WE ARE INCLINED TO HOLD AG AINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 30. WE FIND THAT HONBLE JURISDICTIONAL BENCH OF IT AT IN THE CASE OF M/S. INDUSTRIAL FILTERS AND FABRICS PVT. LTD. VS AC IT AS REPORTED IN (2020)37 ITJ 61(TRIB.INDORE) HAS HELD THAT : 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERI ALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE REVENUE HAS NOT DISPUTED WITH REGARD TO THE FACT THAT THE CO-ORDINATE BENCHES OF THIS TRIBUNAL IN RESPECT OF SHARE APPLICATION MONEY RECEIVED FROM JAVDA INDIA IMPEX L TD. FOUND THAT THE PARTY IS GENUINE AND TRANSACTION WAS TREAT ED TO BE GENUINE. THERE IS NO CHANGE IN THE FACTS AND CIRCUM STANCES. HOWEVER, IN RESPECT OF THE OTHER SHARE APPLICANTS, ASSESSEE HAS NOT BROUGHT ANY MATERIAL TO REBUT THE FINDING ARRIV ED BY THE AUTHORITIES BELOW, HENCE WE DIRECT THE AO TO DELETE THE ADDITION OF RS. 25 LAKHS IN RESPECT OF SHARE APPLICATION MONEY RECEIVED FROM JAVDA INDIA IMPEX LTD. THE GROUND RAISED IN THIS AP PEAL IS PARTLY ALLOWED. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 27 31. IN THE CASE OF CIT V. DOLPHIN CANPACK LTD. [2006] 283 ITR 190 (DELHI), IT WAS HELD THAT: 'TRIBUNAL, WHILE OBSERVING THAT COMPLETE DETAILS INCLUDING CONFIRMATION DETAILS OF BANK ACCOUNT, PAN OF SUBSCRIBERS TO THE SHARES WERE FURNISHED BY ASSESSEE AND THE PAYMENTS WERE MADE BY CHEQUES, WAS JUSTIFIE D IN DELETING ADDITION UNDER SECTION 68.' AND IN THE CAS E OF CIT V SAHIBGANJ ELECTRIC CABLES (P) LTD. [1978] 1151TR 40 8 (CAL.) IT WAS HELD THAT WHERE THE AMOUNTS OF LOAN RECEIVED BY CHE QUES AND REPAYMENTS ALSO MADE BY CHEQUES THROUGH ASSESSEE'S BANKERS, THE CREDITORS GAVE CONFIRMATION LETTERS MENTIONING THEREIN THEIR INCOME TAX FILE NUMBERS. ITO WITHOUT MAKING ANY FUR THER ENQUIRY, DISBELIEVING THE EVIDENCE OF THE ASSESSEE MADE ADDITION. ITAT HELD THE ADDITIONS NOT JUSTIFIED AS THE ASSESSEE DISCHARGED THE ONUS. HIGH COURT HELD THAT TRIBUNAL IS JUSTIFIED IN DELETING THE ADDITION AND 32. IN ITO V SURESH KALMADI [1988] 32 TTJ (PUNE) TM 300, IT WAS HELD THAT WHERE IDENTITY OF CREDITOR IS ESTABLISHED AND ENTRY SHOWN TO BE NOT FICTITIOUS, THE BURDEN SHIFTS ON TO THE DEPARTMENT TO SHOW AS TO WHY THE ENTRY STILL REPRES ENTED THE SUPPRESSED INCOME OF THE ASSESSEE. THE ASSESSEE CAN NOT BE LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 28 CALLED UPON TO PROVE THE WORTH OF HIS CREDITOR'S CR EDITOR. THE FACT THAT IN THE BOOKS OF THE CREDITORS THE SAME AMOUNTS HAD BEEN CREDITED IN THE NAME OF OTHER PARTIES AND THAT IMME DIATELY AFTER REPAYMENT, THE CREDITORS WITHDREW THE MONEY COULD N OT LEAD TO ANY ADVERSE INFERENCE WHEN THIS WAS THEIR MODUS OPE RANDI AND ASSESSEE'S CASE WAS NOT THE SOLITARY TRANSACTION. 33. WE FIND THAT HON'BLE APEX COURT IN THE CASE OF CIT VS ORISSA CORPORATION (P) LTD AS REPORTED IN 159 ITR 78 HAS HELD THAT: 13. IN THIS CASE, THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE K NOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASS ESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER S. 131 AT THE INST ANCE OF THE ASSESSEE, DID NOT PURSUE THE MATTER FURTHER. THE RE VENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CR EDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY OR WERE SUCH WHO COULD ADVANCE THE ALLEGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTA NCES, THE ASSESSEE COULD NOT DO ANYTHING FURTHER. IN THE PREM ISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE H AS DISCHARGED THE BURDEN THAT LAY ON HIM, THEN IT COUL D NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION IS BASED ON SOME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH ARISES. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 29 34. WE FURTHER FIND THAT HON'BLE JURISDICTIONAL HIG H COURT IN THE CASE OF ASHOK PAL DAGA VS CIT REPORTED IN 220 ITR 452 HA S HELD [REFER PARA 7]: 7. AS THE APPLICANT SATISFIED THE AUTHORITY AS TO THE IDENTITY OF THE THIRD PARTY AND ALSO SUPPLIED THE RELEVANT EVID ENCE SHOWING PRIMA FACIE THAT THE ENTRIES WERE NOT FICTITIOUS, T HE INITIAL BURDEN CAN BE SAID TO BE DISCHARGED BY THE APPLICANT- ASSE SSEE. IN VIEW OF THE FACTUAL MATRIX AND LEGAL POSITION, WE ARE SA TISFIED THAT THE AFORESAID TWO QUESTIONS ARE QUESTIONS OF LAW ARISIN G OUT OF THE ORDER AND ARE REQUIRED TO BE REFERRED FOR OUR OPINI ON. 35. WE FIND THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS BARJATIYA CHILDREN TRUST AS REPORTED IN 225 ITR 640 HAS HELD THAT: 3. WE FIND THAT THE TRIBUNAL DISMISSED THE APPEAL OF THE DEPARTMENT AND HELD AS UNDER: 'HE FOUND THAT IN THE BALANCE-SHEET THE LOAN OF RS. 20,000 GIVEN TO THE ASSESSEE-TRUST WAS MENTIONED. UNDER THESE CI RCUMSTANCES, THE DEPARTMENT SHOULD NOT HAVE ANY GRIEVANCE AS TO VIOLATION OF R. 46A. THE ITO COULD HAVE TAKEN PAINS TO EXAMINE T HE INCOME-TAX FILE OF SMT. URMILA AGRAWAL BUT INSTEAD HE CHOSE TH E EASIER COURSE OF ORDERING PRODUCTION OF THE CREDITOR WHICH CANNOT BE APPRECIATED. THE ASSESSING OFFICER SHOULD REALISE T HE INCONVENIENCES WHICH AN ASSESSEE FACES IN PRODUCING THE CASH CREDITOR BEFORE HIM. THE PRODUCTION OF THE CASH CRE DITOR IN PERSON SHOULD BE INSISTED UPON ONLY WHEN THE GENUINENESS O F THE TRANSACTIONS CANNOT BE ESTABLISHED WITH THE HELP OF DOCUMENTS AND THE RECORD OF THE IT DEPARTMENT ITSELF. I FIND NO INFIRMITY IN THE ORDER OF THE DEPUTY CIT (A.). IT IS SUSTAINED.' 4. ON APPLICATION UNDER S. 256(1) OF THE ACT, THE T RIBUNAL HELD THAT IT CORRECTLY REACHED THE CONCLUSION THAT THE A DDITION WAS UNWARRANTED AND NO REFERABLE QUESTION OF LAW AROSE OUT OF THE CONCLUSION REACHED ON APPRECIATION OF FACTS PROPERL Y. 5. IN OUR VIEW, THE FINDING ABOUT THE GENUINENESS I S A FINDING OF FACT BASED ON PROPER APPRECIATION OF FACTS AND DOES NOT MANIFEST ANY ILLEGALITY OR PERVERSITY. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 30 36. WE ALSO FIND THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS METACHEM INDUSTRIES AS REPORTED IN 245 ITR 1 60 HAS HELD THAT [REFER PARA 3 TO 6]: 3. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. SEC. 68 OF THE ACT OF 1961 SAYS THAT WHERE ANY SUM IS FOUND CREDIT ED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YE AR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE, THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE ITO, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. THEREFORE, ACCORDING TO S. 68 , THE FIRST BURDEN IS ON THE ASSESSEE TO SATISFACTORILY EXPLAIN THE CREDIT ENTRY IN THE B OOKS OF ACCOUNT OF THE PREVIOUS YEAR. IF THE EXPLANATION GIVEN BY THE ASSESSEE IS SATISFACTORY, THEN THAT ENTRY WILL NOT BE CHARGED W ITH THE INCOME OF THE PREVIOUS YEAR OF THE ASSESSEE. IN CASE THE E XPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY OR THE SOURCE OFFERED BY THE ASSESSEE-FIRM IS NOT SATISFACTORY, THEN IN T HAT CASE, THE AMOUNT SHOULD BE TAKEN TO BE THE INCOME OF THE ASSE SSEE. IN THE PRESENT CASE, THE AO DID NOT FEEL SATISFIED WITH TH E EXPLANATION GIVEN BY THE ASSESSEE AND ACCORDINGLY ASSESSED ALL THE THREE CREDIT ENTRIES TO THE ACCOUNT OF THE ASSESSEE AS TH E INCOME. 4. ON APPEAL, THE CIT(A) EXAMINED THE MATTER IN DET AIL AND FOUND THAT SHRI S.K. GUPTA WAS THE REAL OWNER OF THE BUSI NESS. THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND TO BE S ATISFACTORY AND HE DELETED THE AFORESAID THREE ENTRIES. THE SAM E FINDING OF FACT HAS BEEN AFFIRMED BY THE TRIBUNAL. ONCE IT IS ESTABLISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR P ERSON, BE HE A PARTNER OR AN INDIVIDUAL, THEN THE RESPONSIBILITY OF THE ASSESSEE-FIRM IS OVER. THE ASSESSEE-FIRM CANNOT ASK THAT PERSON WHO MAKES INVESTMENT WHETHER THE MONEY INVESTED IS PROPERLY TAXED OR NOT. THE ASSESSEE IS ONLY TO EXPLAIN THAT THIS INVESTMENT HAS BEEN MADE BY THE PARTICULAR INDIVIDUAL AND IT I S RESPONSIBILITY OF THAT INDIVIDUAL TO ACCOUNT FOR TH E INVESTMENT MADE BY HIM. IF THAT PERSON OWNS THAT ENTRY, THEN, THE BURDEN OF THE ASSESSEE-FIRM IS DISCHARGED. IT IS OPEN FOR THE AO TO UNDERTAKE FURTHER INVESTIGATION WITH REGARD TO THAT INDIVIDUAL WHO HAS DEPOSITED THIS AMOUNT. 5. SO FAR AS THE RESPONSIBILITY OF THE ASSESSEE IS CONCERNED, IT IS SATISFACTORILY DISCHARGED. WHETHER THAT PERSON IS I NCOME-TAX PAYER OR NOT OR FROM WHERE HE HAS BROUGHT THIS MONE Y IS NOT THE RESPONSIBILITY OF THE FIRM. THE MOMENT THE FIRM GIV ES SATISFACTORY EXPLANATION AND PRODUCES THE PERSON WHO HAS DEPOSIT ED THE AMOUNT, THEN THE BURDEN OF THE FIRM IS DISCHARGED A ND IN THAT LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 31 CASE THAT CREDIT ENTRY CANNOT BE TREATED TO BE INCO ME OF THE FIRM FOR THE PURPOSES OF INCOME-TAX. IT IS OPEN FOR THE AO TO TAKE APPROPRIATE ACTION UNDER S. 69 OF THE ACT AGAINST T HE PERSON WHO HAS NOT BEEN ABLE TO EXPLAIN THE INVESTMENT. IN THE PRESENT CASE, THERE IS THE CONCURRENT FINDING OF BOTH THE CIT(A) AS WELL AS OF THE TRIBUNAL THAT THE FIRM HAS SATISFACTORILY EXPLAINED THE AFORESAID ENTRIES. 6. WE ARE, THEREFORE, OF THE OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS CORRECT AND THE AFORESAID QUESTION IS A NSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 37. WE FIND THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS RANCHHOD JIVABHAI NAKHAVA AS REPORTED IN 21 TAXMANN .COM 159 HAS DISCUSSED THE ISSUE OF CASH CREDIT IN DETAIL AND HE LD THAT [REFER PARA 15 TO 18]: 15. IN OUR VIEW, ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY BY WAY OF ACCOUNTS PAYEE CHEQUES FR OM THE LENDERS WHO ARE ALL INCOME TAX ASSESSEE WHOSE P AN HAVE BEEN DISCLOSED, THE INITIAL BURDEN UNDER SECTI ON 68 OF THE ACT WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THO SE LENDERS. 16. ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSE SSING OFFICER OF THOSE LENDERS, WHETHER IN THEIR RESPECTIVE RETURN T HEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AND HAD FURTHER S HOWN THAT THOSE AMOUNTS OF MONEY HAD BEEN LENT TO THE ASSESSE E. IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER O F THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECIDES TO EXAM INE THE LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, IN OUR OPI NION, THE ASSESSING OFFICER DID NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTION 68 OF THE INCOME TAX ACT. 17. IF ON VERIFICATION, IT WAS FOUND THAT THOSE LEN DERS DID NOT DISCLOSE IN THEIR INCOME TAX RETURN THE TRANSACTION OR THAT THEY HAD NOT DISCLOSED THE AFORESAID AMOUNT, THE ASSESSI NG OFFICER COULD CALL FOR FURTHER EXPLANATION FROM THE ASSESSE E TO PROVE THE GENUINENESS OF THE TRANSACTION OR CREDITWORTHINESS OF THE SAME. HOWEVER, WITHOUT VERIFYING SUCH FACT FROM THE INCOM E TAX RETURN OF THE CREDITORS, THE ACTION TAKEN BY THE ASSESSING OFFICER IN EXAMINING THE LENDERS OF THE ASSESSEE WAS A WRONG A PPROACH. MOREOVER, WE FIND THAT THOSE LENDERS HAVE MADE IN-C ONSISTENT LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 32 STATEMENT AS POINTED OUT BY THE COMMISSIONER OF INC OME TAX(APPEALS) AND IN SUCH CIRCUMSTANCES, WE FIND THA T BOTH THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUN AL WERE JUSTIFIED IN SETTING ASIDE THE DELETION AS THE ASSE SSING OFFICER, WITHOUT TAKING STEP FOR VERIFICATION OF THE INCOME TAX RETURN OF THE CREDITORS, TOOK UNNECESSARY STEP OF FURTHER EXA MINING THOSE CREDITORS. IF THE ASSESSING OFFICERS OF THOSE CREDI TORS ARE SATISFIED WITH THE EXPLANATION GIVEN BY THE CREDITORS AS REGA RDS THOSE TRANSACTIONS, THE ASSESSING OFFICER IN QUESTION HAS NO JUSTIFICATION TO DISBELIEVE THE TRANSACTIONS REFLEC TED IN THE ACCOUNT OF THE CREDITORS. IN OTHER WORDS, THE ASSESSING OFF ICER HAD NO AUTHORITY TO DISPUTE THE CORRECTNESS OF ASSESSMENTS OF THE CREDITORS OF THE ASSESSEE WHEN A CO-ORDINATE ASSESS ING OFFICER IS SATISFIED WITH THE TRANSACTION. 18. WE, THUS, FIND THAT IN THE CASE BEFORE US THE T RIBUNAL BELOW RIGHTLY SET-ASIDE THE DELETION MADE BY THE ASSESSIN G OFFICER, BASED ON ERRONEOUS APPROACH BY WRONGLY SHIFTING THE BURDEN AGAIN UPON THE ASSESSEE WITHOUT VERIFYING THE INCOM E TAX RETURN OF THE CREDITORS. THE POSITION, HOWEVER, WOULD HAVE BEEN DIFFERENT IF THOSE CREDITORS WERE NOT INCOME TAX ASSESSEES O R IF THEY HAD NOT DISCLOSED THOSE TRANSACTIONS IN THEIR INCOME TA X RETURNS OR IF SUCH RETURNS WERE NOT ACCEPTED BY THEIR ASSESSING O FFICERS. 38. WE FIND THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS ROHINI BUILDERS AS REPORTED IN 256 ITR 360 HAS HELD THAT: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE ALSO GONE THROUGH THE ORDER PASSED BY THE ASSESSING OFFICER, THE RELEVANT PORTION OF WHICH WE HAVE ALSO EXTRACTED IN PARA. 2 ABOVE. THE COMMISSIONER OF INCOME-TAX (APPEALS) MORE OR LESS C ONFIRMED THE ADDITION ON THE REASONING GIVEN BY THE ASSESSING OF FICER IN THE ASSESSMENT ORDER. A PERUSAL OF THE CHART GIVEN BY U S IN PARA. 3 ABOVE INDICATES THAT OUT OF 21 CREDITORS THE ASSESS ING OFFICER HAS RECORDED THE STATEMENTS OF ONLY SIX CREDITORS, VIZ. , CREDITORS AT SERIAL NOS. 1, 2, 3, 4, 6, AND 7. HOWEVER, IN RESPE CT OF ALL THE 21 CREDITORS THE ASSESSEE HAS FURNISHED THEIR COMPLETE ADDRESSES ALONG WITH GIR NUMBERS/PERMANENT ACCOUNT NUMBERS AS WELL AS CONFIRMATIONS ALONG WITH THE COPIES OF ASSESSMENT O RDERS PASSED IN THE CASES OF CREDITORS AT SERIAL NOS. 1, 2, 4, 5 , 6, 7, 9, 10, 11, 12 AND 16. IN THE REMAINING CASES WHERE THE ASSESSM ENT ORDERS PASSED WERE NOT READILY AVAILABLE, THE ASSESSEE HAS FURNISHED THE COPIES OF RETURNS FILED BY THE CREDITORS WITH T HE DEPARTMENT ALONG WITH THEIR STATEMENT OF INCOME. ALL THE LOANS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES AND THE RE PAYMENTS OF LOANS HAVE ALSO BEEN MADE BY ACCOUNT PAYEE CHEQU ES ALONG LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 33 WITH THE INTEREST IN RELATION TO THOSE LOANS. IT IS RATHER STRANGE THAT ALTHOUGH THE ASSESSING OFFICER HAS TREATED THE CASH CREDITS AS NON-GENUINE, HE HAS NOT MADE ANY ADDITION ON ACC OUNT OF INTEREST CLAIMED/PAID BY THE ASSESSEE IN RELATION T O THOSE CASH CREDITS, WHICH HAS BEEN CLAIMED AS BUSINESS EXPENDI TURE AND HAS BEEN ALLOWED BY THE ASSESSING OFFICER. IT IS AL SO PERTINENT TO NOTE THAT IN RESPECT OF SOME OF THE CREDITORS THE I NTEREST WAS CREDITED TO THEIR ACCOUNTS/PAID TO THEM AFTER DEDUC TION OF TAX AT SOURCE AND INFORMATION TO THIS EFFECT WAS GIVEN IN THE LOAN CONFIRMATION STATEMENTS BY THOSE CREDITORS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THUS IT IS CLEAR THAT THE ASSESSEE HAD DISCHARGED THE INITIAL ONUS WHICH LAYS ON IT IN TERMS OF SECTION 68 BY PROVING THE IDENTITY OF THE CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, GIR NUMBERS/PERMANENT ACCOUNTS NUMBERS AND THE COPIES OF ASSESSMENT ORDERS WHEREVER READIL Y AVAILABLE. IT HAS ALSO PROVED THE CAPACITY OF THE CREDITORS BY SHOWING THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY ACCOUN T PAYEE CHEQUES DRAWN FROM BANK ACCOUNTS OF THE CREDITORS A ND THE ASSESSEE IS NOT EXPECTED TO PROVE THE GENUINENESS O F THE CASH DEPOSITED IN THE BANK ACCOUNTS OF THOSE CREDITORS B ECAUSE UNDER LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE O F THE CREDITS IN ITS BOOKS OF ACCOUNT BUT NOT THE SOURCE OF THE S OURCE AS HELD BY THE BOMBAY HIGH COURT IN THE CASE OF ORIENT TRADING CO. LTD. V. CIT [1963] 49 ITR 723. THE GENUINENESS OF THE TRANSACT ION IS PROVED BY THE FACT THAT THE PAYMENT TO THE ASSESSEE AS WELL AS REPAYMENT OF THE LOAN BY THE ASSESSEE TO THE DEPOSI TORS IS MADE BY ACCOUNT PAYEE CHEQUES AND THE INTEREST IS ALSO P AID BY THE ASSESSEE TO THE CREDITORS BY ACCOUNT PAYEE CHEQUES. MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDITORS COU LD NOT BE SERVED OR THEY FAILED TO ATTEND BEFORE THE ASSESSIN G OFFICER, CANNOT BE A GROUND TO TREAT THE LOANS TAKEN BY THE ASSESSEE -FROM THOSE CREDITORS AS NON-GENUINE IN VIEW OF THE PRINC IPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF ORISSA CORPORAT ION [1986] 159 ITR 78. IN THE SAID DECISION THE SUPREME COURT HAS OBSERVED THAT WHEN THE ASSESSEE FURNISHES NAMES AND ADDRESSE S OF THE ALLEGED CREDITORS AND THE GIR NUMBERS, THE BURDEN S HIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUE'S CASE AND IN O RDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON- COMPLIANCE OF SUMMONS ISSUED BY THE ASSESSING OFFIC ER UNDER SECTION 131, BY THE ALLEGED CREDITORS WILL NOT BE S UFFICIENT TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE C ASE OF SIX CREDITORS WHO APPEARED BEFORE THE ASSESSING OFFICER AND WHOSE STATEMENTS WERE RECORDED BY THE ASSESSING OFFICER, THEY HAVE ADMITTED HAVING ADVANCED LOANS TO THE ASSESSEE BY A CCOUNT PAYEE CHEQUES AND IN CASE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CASH AMOUNT DEPOSITED BY THOSE C REDITORS IN LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 34 THEIR BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE B EEN TO MAKE ASSESSMENTS IN THE CASES OF THOSE CREDITORS BY TREA TING THE CASH DEPOSITS IN THEIR BANK ACCOUNTS AS UNEXPLAINED INVE STMENTS OF THOSE CREDITORS UNDER SECTION 69. 8. FURTHER, WE MAY POINT OUT THAT SECTION 68 UNDER WHICH THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER REA DS AS UNDER : '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR.' 9. THE PHRASEOLOGY OF SECTION 68 IS CLEAR. THE LEGI SLATURE HAS LAID DOWN THAT IN THE ABSENCE OF A SATISFACTORY EXPLANAT ION, THE UNEXPLAINED CASH CREDIT MAY BE CHARGED TO INCOME-TA X AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN TH IS, CASE THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS 'S HALL BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR'. THE SUPREME COURT WHILE INTERPRETING SIMILAR PHRASEOLOGY USED IN SECTION 69 HAS HELD THAT IN CREATING THE LE GAL FICTION THE PHRASEOLOGY EMPLOYS THE WORD 'MAY' AND NOT 'SHALL'. THUS THE UN-SATISFACTORINESS OF THE EXPLANATION DOES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS THE INCOME OF THE ASSESSEE AS HELD BY THE SUPREM E COURT IN THE CASE OF CIT V. SMT. P. K. NOORJAHAN [1999] 237 ITR 570. 10. THUS TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND, IN PARTICULAR, THE FACT, THAT THE ASSESSING OFFICER HAS NOT DISALLOWED THE INTEREST C LAIMED/PAID IN RELATION TO THESE CREDITS IN THE ASSESSMENT YEAR UN DER CONSIDERATION OR EVEN IN THE SUBSEQUENT YEARS, AND TAX DEDUCTED AT SOURCE HAS BEEN DEDUCTED OUT OF THE INTEREST PAI D/CREDITED TO THE CREDITORS, WE ARE OF THE OPINION THAT THE DEPAR TMENTAL AUTHORITIES WERE NOT JUSTIFIED IN MAKING THE ADDITI ON OF RS. 12,85,000 WHICH IS DIRECTED TO BE DELETED. 11. IN THE RESULT, THE APPEAL IS ALLOWED. 39. WE FIND THAT HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S HINDUSTAN TEA TRADING CO LIMITED AS REPORTED IN 263 ITR 289 HAS HELD THAT WHEN THE ASSESSEE HAS PROVIDED THE INCOME TAX FILE NUMBER IT IS THE DUTY OF THE ASSESSING OFFICER TO E XAMINE THE SAME LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 35 FROM THE FILE OF THE CREDITORS. SINCE, IDENTITY OF THE CREDITOR IS PROVIDED FROM THE FILE NUMBER; NO ADDITION CAN BE MADE IN TH E NAME OF THE ASSESSEE AND ALSO REFER THAT HONBLE ITAT MUMBAI BE NCH IN THE CASE OF INCOME TAX OFFICER 9(1)-1 VS ANANT SHELTERS (P) LTD REPORTED IN 20 TAXMANN.COM 153 HAS HELD THAT WHEN THEN ASSESSEE HAD FILED PANS, BANK STATEMENTS AND RETURN ACKNOWLEDGEMENTS OF THE CREDITORS, THE ASSESSEE HAS DISCHARGED HIS BURDEN OF PROOF AND ACC ORDINGLY, ADDITION WAS DELETED. 40. ALSO ON PERUSAL OF THE COMPANY MASTER DATA APPE ARING ON THE PORTAL OF MINISTRY OF CORPORATE AFFAIRS, WE FIN D THAT THE CASH CREDITORS NAMELY ADVANTAGE DEALTRADE P LIMITED, CON TRA VANIJYA P LIMITED ,DHANLABH TRADE LINK P LIMITED & SPANGLE DEALTRADE P LIMITED. ARE ACTIVE COMPANIES AND HAVE DULY FILED THEIR BALANCE SHEET UP TO 31.03.2019 AND ARE MARKED AS ACTIVE COMPANIES. ALSO FOR THE REMAINING COMPANY NAMELY AX IOM COMMODEAL P LIMITED WE FIND THAT THIS COMPANY HAS M ERGED WITH CONTRA VANIJYA P. LTD. UNDER THE ORDER OF HON' BLE HIGH COURT OF DELHI PRONOUNCED ON 16.01.2017. THESE FACT S ALSO SUPPORTS OUR VIEW THAT ALL THE ALLEGED FIVE CASH CR EDITORS ARE GENUINE CASH CREDITORS AS THEIR IDENTITY IS PROVED BEYOND LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 36 DOUBTED, CREDITWORTHINESS IS PROVED WITH THE BANKIN G TRANSACTIONS AND GENUINENESS IS PROVED AS THE LOAN S TAKEN FROM ALL THESE FIVE COMPANIES HAVE BEEN REPAID. WE, THEREFORE, IN THE LIGHT OF THE VARIOUS JUDGMENTS AND DECISIONS REFERRED HEREINABOVE, MORE PARTICULARLY THE DECISION OF COOR DINATE BENCH JAIPUR IN THE CASE OF M/S MOTISONS ENTERTAINMENT (INDIA) PVT. LTD. VS. ACIT(SUPRA) HAVING DEALT WITH VARIOUS CASH CREDITORS INCLUDING THE ALLEGED FIVE CASH CREDITORS REFERRED IN THE INSTANT APPEAL, ARE OF THE CONSIDERED VIEW THAT THE ASSESSE E HAS SUCCESSFULLY DISCHARGED ITS ONUS BY EXPLAINING SOUR CE OF CASH CREDIT OF LOAN OF RS.2.70 CR. RECEIVED DURING THE Y EAR BY PLACING RELEVANT DOCUMENTARY EVIDENCES TO OUR SATISFACTION WHICH HAVE NOT BEEN FOUND TO BE UNTRUE/INCORRECT BY THE REVENU E AUTHORITIES. WE, THUS SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION OF RS.2.70 CR. MADE U/S 68 OF T HE ACT. GROUND NO.1 OF THE ASSESSEE APPEAL IS ALLOWED. 41. AS REGARDS GROUND NO.2 RELATING TO DISALLOWANCE OF PRIOR PERIOD INTEREST OF RS.60,61,225/-, BRIEF FACTS ARE THAT LOAN FROM HDFC BANK OF RS.3.20 CR. WAS TAKEN IN THE NAME OF O NE OF THE PARTNER MR. VAIBHAV RAI. INTEREST PAYABLE ON THIS L OAN FROM LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 37 HDFC BANK WAS CLAIMED AS A BUSINESS EXPENDITURE BY THE ASSESSEE AS THE LOAN WAS UTILIZED FOR BUSINESS PURP OSES. THIS LOAN WAS TAKEN FROM DURING F.Y. 2007-08. IN INITIAL THREE YEARS THE AMOUNT OF INSTALLMENT PAID WAS DIRECTLY DEBITED IN THE LOAN ACCOUNT AND THE INTEREST EXPENDITURE REMAINED TO B E ENTERED IN THE BOOKS UNDER THE HEAD OF EXPENDITURE. THE TOTAL OF INTEREST FOR F.Y. 2007-08 TO 2009-10 WAS CLAIMED AS INTEREST EXPENDITURE DURING THE YEAR AND ALSO THE INTEREST F OR F.Y. 2010- 11 AT RS.24,47,865/- WAS CLAIMED FOR THE CURRENT YE AR. LD. AO DISALLOWED THE INTEREST CLAIMED BY THE ASSESSEE. TH IS ISSUE WAS CHALLENGED BEFORE THE LD. CIT(A) WHO DELETED THE DI SALLOWANCE OF INTEREST OF RS.24,47,865/- PERTAINING TO YEAR UNDER APPEAL TREATING IT AS ALLOWABLE EXPENDITURE INCURRED FOR C ARRYING OUT FOR BUSINESS ACTIVITIES BUT CONFIRMED THE REMAINING DIS ALLOWANCE OF PRIOR PERIOD INTEREST OF RS.60,61,225/-. 42. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL AGAINST THE DISALLOWANCE OF PRIOR PERIOD INTEREST. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED REFERRING TO WRITTEN SUBMISSIONS. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 38 43. PER CONTRA LD. DR SUPPORTED THE ORDER OF THE BO TH LOWER AUTHORITIES. 44. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THROUGH GROUND NO.2 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE DISALLOWAN CE OF PRIOR PERIOD INTEREST OF RS.60,61,225/-. WE NOTE THAT LOA N WAS TAKEN FROM HDFC BANK AT RS.3.20 CR. IN THE NAME OF THE PA RTNER MR. VAIBHAV RAI. THIS LOAN HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE SAME IS SUPPORTED BY AUDITE D BALANCES SHEET AS ON 31.03.2007 TO 31.03.2011 WHICH SHOWS TH AT THE LOAN WAS UTILIZED IN THE BUSINESS ACTIVITIES OF THE FIRM. INADVERTENTLY, THE INSTALLMENT PAID THROUGH HDFC BA NK WHICH INCLUDED THE ELEMENT OF PRINCIPAL AND INTEREST WERE DEBITED TO THE LOAN ACCOUNT AND NO CLAIM OF INTEREST WAS MADE DURING THE F.YS.2007-08 TO 2009-10. WHEN THIS MISTAKE WAS DETE CTED THE INTEREST PAID FOR F.YS. 2007-08 TO 2009-10 AMOUNTIN G TO RS.60,61,225/- WAS CLAIMED AS PRIOR PERIOD EXPENDI TURE. INTEREST OF RS.24,47,865/- FOR CURRENT YEAR I.E. F. Y. 2010-11 WAS ALSO CLAIMED. WE FIND THAT LD. CIT(A) HAS ALLOWED T HE INTEREST CLAIM OF RS.24,47,865/- TREATING IT AS BUSINESS EXP ENDITURE. LD. CIT(A) LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 39 HAS NOT DOUBTED THE UTILIZATION OF LOAN FOR THE BUS INESS PURPOSE. LD. DR FAILED TO CONTROVERT THIS FACT THAT THE LOAN TAKEN FROM HDFC BANK HAS BEEN UTILIZED FOR ANY OTHER PURP OSE OTHER THAN FOR BUSINESS OF THE FIRM. AUDITED BALANCE SHEE T SUPPORTS THE CONTENTION MADE BY THE ASSESSEE AND ALSO THERE IS NO DIFFERENCE IN THE ULTIMATE TAX LIABILITY AS IT WAS SUBJECT TO TAX ON THE SAME RATE IN THE PRECEDING YEARS AS IN THE CURR ENT YEAR. OUR VIEW IS SUPPORTED BY THE JUDGMENT OF HON'BLE APEX C OURT IN THE CASE OF GLAXO SMITHLINE (ASIA) P LIMITED REPORTED IN 226 CT R 133. 45. UNDER THESE GIVEN FACTS AND CIRCUMSTANCES OF TH E CASE, WE ARE OF THE CONSIDERED VIEW THAT THE CLAIM OF PRIOR PERIOD INTEREST OF RS.60,61,225/- NEEDS TO BE ALLOWED. WE THUS SET ASIDE THE FINDING OF LD. CIT(A) AND ALLOW GROUND NO.2 RAISED BY THE ASSESSEE. 46. GROUND NO.3 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 47. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITANO. 335/IND/2018 IS ALLOWED. 48. NOW WE TAKE UP ITANO.336 & 337/IND/2018 WHEREIN THE ASSESSEE HAS COMMONLY RAISED THE ISSUE OF DISALLOWA NCE OF LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 40 INTEREST PAID ON UNSECURED LOAN OF RS.2.70 CR RECEI VED DURING A.Y. 2011-12 AND DISALLOWED BY THE LD. AO AND CONFI RMED BY LD. CIT(A) SINCE THE CASH CREDIT OF RS. 2.70 CR. W AS TREATED AS UNEXPLAINED U/S 68 OF THE ACT. WE, HOWEVER, IN VIEW OF THE DISCUSSION MADE HEREINABOVE FIND THAT WHILE ADJUDIC ATING GROUND NO.1 RAISED IN ITANO.335/IND/2018 WE HAVE DE LETED THE ADDITION FOR UNEXPLAINED CASH CREDIT OF RS.2.70 CR. MADE U/S 68 OF THE ACT AFTER BEING SATISFIED WITH THE DOCUMENTA RY EVIDENCE FILED AND EXPLANATION GIVEN BY THE ASSESSEE. SINCE THE CASH CREDIT ON WHICH THE INTEREST PAYABLE HAS BEEN DISAL LOWED BY BOTH THE LOWER AUTHORITIES HAS BEEN TREATED AS EXPL AINED AND ADDITION HAS BEEN U/S 68 OF THE ACT DELETED THERE R EMAINS NO JUSTIFICATION IN DISALLOWING INTEREST OF RS. 35,12, 470/- FOR A.Y. 2012-13 & RS.12,00,625/- FOR A.Y. 2013-14. WE ACCOR DINGLY DELETE THE DISALLOWANCE OF INTEREST MADE BY THE LD. AO FOR A.Y. 2012-13 AND 2013-14 SET ASIDE THE FINDING OF LD. CI T(A) AND ALLOW GROUNDS RAISED BY THE ASSESSEE IN BOTH THE YE ARS ON THIS ISSUE. ACCORDINGLY APPEALS OF THE ASSESSEE IN ITAN O.336 & 337/IND/2018 FOR A.YS. 2012-13 & 2013-14 ARE ALLOWE D. LIFE CARE INTERNATIONAL ITA NO.335 TO 337/IND/2018 41 50. IN THE RESULT, ASSESSEES APPEALS IN ITANO.335 TO 337/IND/2018 ARE ALLOWED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES, 1963 ON 01.09.2021. SD/- SD/- (RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT ME MBER / DATED : 01.09.2021 PATEL/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