Shri Nirmalkumar Devidutt Jain, Ahmedabad V. The Dy.CIT.,Circle-12, Ahmedabad

ITA 3496/AHD/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50937 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 30-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P D SHAH
• Keywords: Unexplained cash credit; Source of fund; Deemed to accrue or arise in india; Additional evidence; Onus to prove
• Section: 68

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI D.K.TYAGI, JM AND A. MOHAN ALANKAMONY , AM. SHRI NIRMALKUMAR DEVIDUTT JAIN, A-15, MATANGI APARTMENTS, GORDHANWADI CHAR RASTA, AHMEDABAD. VS. DY. CIT, CIR-12, AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI P. D. SHAH, AR RESPONDENT BY:- SHRI SAMIR TEKRIWAL, SR.DR DATE OF HEARING : 21/10/2011. DATE OF PRONOUNCEMENT : 18.11.11. O R D E R PER D. K. TYAGI, JUDICIAL MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) DATED 11/10/2010 FOR ASST. YEAR 2007-08. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL :- (1) THAT THE ORDER PASSED BY THE LD. CIT(A)-XX, IS BAD BOTH IN LAW AS WELL AS IN THE FACTS IN CONFIRMING ADDITION OF R S.20,00,000/- MADE BY THE AO U/S 68 OF THE ACT AS UNEXPLAINED CAS H CREDIT. (2) THAT THE LD. CIT(A)-XX HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ADHOC AND ESTIMATED ADDITION OF RS.8 3,337/- MADE BY AO ON ACCOUNT OF LOW HOUSEHOLD EXPENSES AS SAME IS ITA NO.3496/AHD/2010 ASST. YEAR :2007-08 ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 2 MERELY ON PRESUMPTION BASIS AND WITHOUT ISSUING ANY SHOW CAUSE NOTICE. 2. AT THE TIME OF HEARING THE LD. COUNSEL OF THE AS SESSEE DID NOT PRESS GROUND NO.2 HENCE THE SAME IS DISMISSED AS NOT PRES SED. 3. GROUND NO.1 RELATES TO CONFIRMATION OF ADDITION OF RS.20,00,000/- OUT OF RS.1,10,00,000/- U/S 68 MADE BY THE AO. THE FACTS OF THE CASE ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS ON GOI NG THROUGH THE CAPITAL ACCOUNT OF THE ASSESSEE THE AO NOTED THAT DURING TH E YEAR THE ASSESSEE HAD INTRODUCED FRESH FUNDS OF RS.1,08,77,130/- IN H IS CAPITAL ACCOUNT. THE AO MADE THE ADDITION BY OBSERVING AS UNDER: ON GOING TO THE CAPITAL ACCOUNT OF THE ASSESSEE IT IS SEEN THAT DURING THE YEAR THE ASSESSEE HAS INTRODUCED FRESH FUNDS OF RS .1,08,77,130/- IN HIS CAPITAL ACCOUNT. ON SCRUTINY IT IS FOUND THAT THE A SSESSEE HAS TAKEN LOANS FROM 19 PERSONS AND ALL THE LOANS TAKEN ARE NON-INT EREST BEARING. THE DETAILS OF THE LOANS APPEARING IN HIS CAPITAL ACCOU NT ARE AS UNDER :- SL.NO. NAME AMOUNT 1. COSMOS SYNTHETICS 500000 2 JAWALA TEXTILES 1000000 3 N. K. TEXTILES 1000000 4 RAHUL TEXTILES TRADERS 500000 5 VIVEK AGENCY 500000 6 RAVIRAJ INTERNATIONAL 500000 7 NARESH TRADING CO. 1000000 8 M. J. INTERNATIONAL 500000 9 KRISHNA TRADING CO. 500000 10 S.M. TEXTILES 1000000 11 BANSAL CHEMICALS 300000 12 PUSHPADEVI JAIN 300000 13 MEENA SHAH 200000 14 P.R. SHAH 200000 15 SARLA TEXTILES 300000 16 ANIL BHARATIYA 200000 17 JAY AMBE SELECTION 1000000 18 BHAVSAR TRADING CO. 500000 ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 3 19 SARITA TEXTILES 1000000 20 TOTAL 11000000 IN SUPPORT OF THE ABOVE LOANS THE ASSESSEE HAS FILE D COPY OF INCOME-TAX ACKNOWLEDGEMENT RECEIPT FOR ASST. YEAR 2007-08 OF T HE DEPOSITOR AND A COPY OF THE ACCOUNT OF THE DEPOSITOR AS APPEARING I N HIS BOOKS COUNTER SIGNED BY THE DEPOSITOR. NO FURTHER INFORMATION HAS BEEN FILED. AFTER GOING THROUGH THE PAPERS SUBMITTED BY THE ASSESSEE THE FOLLOWING PICTURE EMERGES: SL. NO. NAME AMOUNT TOTAL INCOME DECLARED BY DEPOSITOR IN ASST. YEAR 07- 08 TAX PAID 1 COSMOS SYNTHETICS 500000 119652 0 2 JAWALA TEXTILES 1000000 159304 0 3 N. K. TEXTILES 1000000 112658 0 4 RAHUL TEXTILES TRADERS 500000 NOT FILED 0 5 VIVEK AGENCY 500000 104933 0 6 RAVIRAJ INTERNATIONAL 500000 104216 0 7 NARESH TRADING CO. 1000000 107816 0 8 M. J. INTERNATIONAL 500000 101217 0 9 KRISHNA TRADING CO. 500000 NOT FILED 10 S. M. TEXTILES 1000000 110254 0 11 BANSAL CHEMICALS 300000 127440 0 12 PUSHPADEVI JAIN 300000 110125 0 13 MEENA SHAH 200000 113732 0 14 P.R. SHAH 200000 103732 0 15 SARLA TEXTILES 300000 110254 0 16 ANIL BHARATIYA 200000 NOT FILED 17 JAY AMBE SELECTION 1000000 NOT FILED 18 BHAVSAR TRADING CO. 500000 NOT FILED 19 SARITA TEXTILES 1000000 NOT TILED 20 TOTAL 11000000 AS PER THE ABOVE CHART SUBMITTED BY THE ASSESSEE IT IS NOTED THAT THE ASSESSEE HAS ACCEPTED DEPOSITS FROM 19 DIFFERENT PA RTIES. THE DEPOSITS TOTAL RS.1,10,00,000/- AND NO INTEREST HAS BEEN PAI D ON THESE DEPOSITS. THE ASSESSEE HAS TOTAL CONTROL AND SWAY OVER THE DEPOSI T AMOUNTS. THE UTILIZATION OF THESE FUNDS BY THE ASSESSEE IS ABSOL UTE AND THERE IS NO DOUBT ABOUT IT. INITIALLY THE ASSESSEE ONLY FILED COPIES OF ACCOUNTS OF THE PARTIES AS APPEARING IN HIS BOOKS OF ACCOUNTS. THE ASSESSEE FILED EVIDENCES IN RESPECT OF 13 PARTIES IN THE FORM OF COPY OF ACKNOW LEDGEMENT OF INCOME- ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 4 TAX RETURN FILED BY THE DEPOSITORS. IN RESPECT OF O THER 6 PERSONS NO EVIDENCES WHATSOEVER HAS BEEN FILED BY THE ASSESSEE . ON EXAMINATION OF THESE EVIDENCES IT WAS NOTICED THAT THE INCOME RETU RNED BY THESE DEPOSITORS IS BELOW TAXABLE LIMIT AND NO TAXES HAVE BEEN PAID BY ANY OF THE DEPOSITORS. NO BANK STATEMENT WHEREIN THE TRANS ACTION UNDER VERIFICATION IS RECORDED HAS BEEN FILED BY ANY OF T HE DEPOSITORS. THE SOURCES OF THE FUNDS FROM WHICH THESE DEPOSITS HAVE BEEN MADE HAVE NOT BEEN DECLARED BY THE DEPOSITOR AS THE BANK STATEMEN T HAS NOT BEEN FILED. IT IS VERY MUCH LIKELY THAT THE BANK ACCOUNTS OF TH ESE DEPOSITORS MAY HAVE BEEN USED AS A COVER TO EXPLAIN THE UNSECURED LOANS RECEIVED BY THE BENEFICIARIES OF THESE DEPOSITS. THE PALTRY INCOME DECLARED BY THE ALLEGED CREDITORS CLEARLY SIGNIFIES THAT THEY WERE NOT CAP ABLE OF MAKING THE HUGE ADVANCES, IT HAS TO BE ESTABLISHED THAT THAT DEPOSI TOR IS NOT A MAN OF STRAW AND HE HAS THE CAPACITY TO GIVE THE MONEY AND FOR T HAT HE HAS AMPLE RESOURCES AT HIS COMMAND. NONE OF THE DEPOSITOR HAS REVEALED THEIR SOURCES OF INCOME, THEIR CAPITAL BASE AND ASSETS OW NED BY THEM. IT MAY APPEAR AT FIRST GLANCE THAT SOURCE OF SOURCE WAS BE ING ENQUIRED INTO, BUT THIS WAS A CASE WHERE SUCH AN INQUIRY WAS AN ABSOLU TE NECESSITY. THE SOURCE OF THE FUNDS HAVE TO BE FOUND AND FERRETED O UT AND FOR SUCH PURPOSE THE HON'BLE SUPREME COURT HAS ALSO IN 160 ITR 674(SC) CLARIFIED THAT IN APPROPRIATE CASES THE APPELLATE A UTHORITY CAN EXAMINE THE SOURCE OF SOURCE. TO ASCERTAIN THE VERACITY AND GEN UINENESS OF THE EVIDENCES FILED BY THE ASSESSEE, LETTERS U/S. 133(6 ) WERE ISSUED TO ALL THE DEPOSITORS TO CONFIRM THE TRANSACTIONS MADE BY THEM AND ALSO ESTABLISH THEIR IDENTITIES, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. THEIR RESPONSES WERE STILL AWAITED. SINCE THE MATTE R WAS A TIME BARRING MATTER THE SAME WAS DECIDED ON THE BASIS OF MATERIA L PLACED ON RECORD BY THE ASSESSEE. THEIR DECLARED NON TAXABLE INCOME I S A STRONG POINTER TO THE FACT THAT EITHER THEY ARE PURE AND SIMPLE NAME LEND ERS OR THE ASSESSEE HAS DOCTORED HIS BOOKS TO GIVE AN APPEARANCE OF BOR ROWINGS BEING MADE BY HIM FROM THE ALLEGED CREDITORS/DEPOSITOR S. UNDER THE CIRCUMSTANCES IT IS IMPERATIVE TO IDENTIFY THE SOURCE OF THE FUNDS. IT WAS ALSO OBSERVED THAT ALL THE RELEVANT FACTS ARE W ITHIN THE EXCLUSIVE KNOWLEDGE OF THE ASSESSEE AND HE IS TOTALLY AWARE O F WHAT HE HAS DONE. THE FACTUAL MATRIX AS IT HAS OCCURRED CAN ONLY BE D ISPLAYED AND EXPLAINED BY THE ASSESSEE AND NO ONE ELSE. THE FACT THAT T HE ASSESSEE HAS NOT FILED ALL THE VITAL RELEVANT EVIDENCES COULD LEAD TO ON LY ONE IRRESISTIBLE CONCLUSION THAT ALL IS NOT WELL WITH THE FACTS OF T HE CASE AND THE CREDIT ENTRIES RECORDED IN THE BOOKS OF THE ACCOUNTS OF TH E ASSESSEE ARE NOT PROPERLY EXPLAINABLE. THE NAMES APPEARING IN THE BO OKS OF ACCOUNTS ARE ONLY A FACADE OR FRONT TO GIVE A LEGITIMATE APPEA RANCE TO THE BALANCE SHEET CREATED BY THE ASSESSEE. THESE NAMES ARE JU ST NAME LENDERS AND THEY DO NOT HAVE THE FUNDS TO ADVANCE NOR DO THEY O WN THE FUNDS. THE ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 5 BORROWINGS HAVE BEEN GIVEN A NAME BY THE ASSESSEE B UT THAT BY IT SELF DOES NOT CONVERT THESE BORROWINGS INTO GENUINE BORR OWINGS OF THE ASSESSEE. THE ASSESSEE HAS FILED THE EVIDENCES TO P RIMA FACIE PROVE THAT THESE BORROWINGS ARE HIS GENUINE BORROWINGS. BUT TH E ANALYSIS OF THESE EVIDENCES SHOWED THAT EVEN PRIMA FACIE ALL THE THRE E CONDITIONS HAVE NOT BEEN SATISFIED BY THE ASSESSEE SO AS TO THROW OR SH IFT THE BURDEN OF PROOF ON THE DEPARTMENT. THE ASSESSEE HAS CREATED A MIRAG E WHICH IS A DECEPTION. IT IS NOT THE REAL PICTURE WHICH THE ASS ESSEE HAS BARED. HE HAS CONCEALED THE REAL FACTS BENEATH THE SCREENS WHICH HE HAS BUILT. NO EVIDENCE IS FORTH COMING FROM HIS SIDE TO ESTABLISH HIS CASE. THE DEPARTMENT CAN NOT BE SADDLED WITH THE RESPONSIBILI TY AND DUTY OF PROVING THESE CASH CREDITS TO BE NON GENUINE UNLESS THE ASS ESSEE FULFILLS HIS PART OF THE OBLIGATIONS DULY LAID UPON HIM BY THE ACT U/S. 68. IT IS SETTLED LAW THAT THE ASSESSEE HAS A LEGAL OBLIGATION TO EXPLAIN THE NATURE AND SOURCE OF THE CREDIT ENTRY AND THE HON'BLE SUPREME COURT HAS IN A S EARLY AS 50 ITR 1 (SC) HELD THAT 'IF THE ASSESSEE OFFERS AN EXPLANATI ON ABOUT THE CASH CREDIT, THE INCOME-TAX DEPARTMENT CAN PUT THE ASSESSEE TO P ROOF OF HIS EXPLANATION, AND IF THE ASSESSEE FAILS TO TENDER EV IDENCE OR BURKES AN ENQUIRY, THEN THE ASSESSING OFFICER IS JUSTIFIED IN REJECTING THE EXPLANATION AND HOLDING THAT THE INCOME IS FROM AN UNDISCLOSED SOURCE. THE ASSESSING OFFICE IS NOT REQUIRED TO SPECIFY OR PROVE WHAT THAT SOURCE IS, WHICH FROM THE NATURE OF THE CASE MUST BE KNOWN ONLY TO THE ASSESSEE'. IT IS FOR THE ASSESSEE TO PROVE BY COGEN T AND PROPER EVIDENCE THAT THERE WERE GENUINE BORROWINGS AS THE FACTS WER E EXCLUSIVELY WITHIN ASSESSEE'S KNOWLEDGE. THE ENTRIES OF THE CASH CREDI TS ARE NOT IN ACCORDANCE WITH THE FACTS AS STATED BY THE ASSESSEE . THE HON'BLE MADRAS HIGH COURT IN THE CASE OF KRISHNAVENI AMMAL, 158 IT R 826 (MAD) HAS HELD THAT 'THE LAW OF EVIDENCE MANDATES THAT IF THE BEST EVIDENCE IS NOT PLACED BEFORE THE COURT, AN ADVERSE INFERENCE CAN B E DRAWN AS AGAINST THE PERSON WHO OUGHT TO HAVE PRODUCED IT'. HERE IN THE INSTANT CASE THE TIME FACTOR WAS ALSO NOT A NEGATIVE OR DISABLING FACTOR. THE CREDIT ENTRIES WERE ALL RECENT/CURRENT ENTRIES AND HENCE THERE SHOULD N O DIFFICULTY ON THE PART OF THE ASSESSEE TO COME OUT WITH THE TRUE AND ACTUA L STATE OF AFFAIRS OF HIS CASE. IT IS INCUMBENT ON HIM TO LEAD ALL THE EVIDEN CE IN THIS REGARD. ON A TOTAL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS CLEAR THAT THE EVIDENCES PLACED BY THE ASSESSEE DO NOT SU PPORT THE CASH CREDIT ENTRIES APPEARING IN THE BOOKS OF ACCOUNTS OF THE A SSESSEE AND THE EVIDENCES ARE ALL MAKE BELIEVE DATA AND THEY DO NOT REPRESENT THE TRUTH AND CORRECT STATE OF AFFAIRS. THE EVIDENCES FILED B Y THE ASSESSEE ARE NOT CORROBORATED BY ANY OTHER CIRCUMSTANTIAL EVIDENCES. THE PAPERS FILED INDICATE THAT THESE DEPOSITORS DO NOT HAVE THE CRED IT WORTHINESS TO ADVANCE THE LOANS OR MAKE THE DEPOSITS. THE ASSESSEE WAS TI ME AND AGAIN IN THE QUESTIONNAIRE DATED 6/2/2009, 7/8/2009 AND 30/10/20 09 REMINDED THAT IN ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 6 RESPECT OF UNSECURED LOANS, SQUARED UP LOAN ACCOUNT S AND CREDITS APPEARING IN HIS CAPITAL ACCOUNT HE WAS TO FILE ALL RELEVANT EVIDENCES THAT WOULD CUMULATIVELY SATISFY ALL THE THREE CONDITIONS OF SECTION 68 VIZ. IDENTITY OF THE DEPOSITOR, CREDITWORTHINESS OF THE DEPOSITOR AND GENUINENESS OF THE TRANSACTION. NO EVIDENCES WHAT SO EVER WHICH WOULD CUMULATIVELY PROVE ALL THE THREE ESSENTIAL INGREDIENTS OF SECTION 68 VIZ. I) IDENTIT Y OF DEPOSITOR II) CREDIT WORTHINESS OF THE DEPOSITOR AND III) GENUINENESS OF THE TRANSACTIONS HAS BEEN FILED BY THE ASSESSEE. IN ABSENCE OF THE ABOVE PARTICULARS THE CREDITS CAN NOT BE ACCEPTED AS GENUINE BORROWINGS OF THE AS SESSEE AND THE SAME ARE SQUARELY COVERED BY THE PROVISIONS OF THE SECTI ON 68 OF THE ACT. THE ONUS TO SATISFY THE ASSESSING OFFICER AND THUS MEET THE BURDEN TO PROVE AS CAST U/S 68 IS SQUARELY ON THE ASSESSEE, WHO IS EVE N OTHERWISE OBLIGED TO PROVE ITS RETURN OF INCOME OR THE CLAIMS PREFERRED THEREBY. THE THREE PARAMETERS ARE 'IDENTITY' AND 'CAPACITY' OF THE CRE DITOR AND GENUINENESS OF THE CREDIT TRANSACTION, EACH OF WHICH IS A SEPAR ATE AND DISTINCT REQUIREMENT QUA WHICH THE 'SATISFACTION' IS TO BE A RRIVED AT, SO THAT IF THERE IS A FAILURE ON EVEN ONE SCORE, THE NON-SATIS FACTION WOULD STAND TO BE CONFIRMED. [291 ITR 278 (SC)]. CONSIDERING THE FACT S AND CIRCUMSTANCES OF THE CASE; AND APPLYING THE TEST OF HUMAN PROBABI LITIES AS ENUNCIATED IN 82 ITR 540 (SC) AND 214 ITR 801 (SC) IT CAN NOT BE HELD THAT THE ASSESSEE HAS TAKEN GENUINE LOANS. IN OTHER WORDS TH E LOANS TAKEN BY THE ASSESSEE ARE NOT GENUINE LOANS AND THEY ARE SQUAREL Y HIT BY THE PROVISIONS OF SECTION 68 OF THE I.T.ACT. ADDITION U/S. 68 OF THE ACT OF RS. 1,10,00,000/-IS THEREFORE MADE IN THE TOTAL INCOME COMPUTATION OF THE ASSESSEE. ON FURTHER SCRUTINY OF THE AUDIT REPORT IT IS SEEN THAT THE AUDITORS HAVE REPORTED THAT FRESH FUNDS HAVE BEEN TAKEN BY THE AS SESSEE FROM THE FOLLOWING PARTIES TO WHOM INTEREST HAS ALSO BEEN PA ID BY THE ASSESSEE. SR.NO. NAME AMOUNT INTEREST PAID 1 KARUNA CORPORATION 8268857 227784 2. COSMOS SYNTHETICS 250000 12877 3. GANESH NARAYAN AGRAWAL 538000 28912 4. ANURAG NIRMAL JAIN 1812000 4485 5. MANOJKUMAR AGARWAL 200000 4916 ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 7 6. NIRMAL JAIN AND SON'S HUF 65000 29308 7. ABHINANDAN METALS 200000 0 8. DHANAVAT METALS 1399000 0 9. S.M. TEXTIELS 650000 19576 10. S. R. TRADING CO, 250000 11507 11. _S_SJJDING_CO. 250000 11028 12. SARLA JAIN 2223000 20206 13. SARSA ENTERPRISE 300000 6411 14. SHRI KHODIYAR TEXTILES 500000 35070 15. SMT. SITADEYAGARWAL 300000 4836 16. SURAJ TRADING CO 300000 6411 17. VIJAY S AGARWAL 500000 1343 18. TOTAL 1800585T 424670 IN SUPPORT OF THE ABOVE LOANS THE ASSESSEE HAS FILE D COPY OF INCOME TAX ACKNOWLEDGEMENT RECEIPT FOR A.Y. 2007-08 OF THE DEP OSITOR AND A COPY OF THE ACCOUNT OF THE DEPOSITOR AS APPEARING IN HIS BO OKS COUNTERSIGNED BY THE DEPOSITOR. NO FURTHER INFORMATION HAS BEEN FILE D. AFTER GOING THROUGH THE PAPERS SUBMITTED BY THE ASSESSEE THE FOLLOWING PICTURE EMERGES. SR.NO. NAME AMOUNT TOTAL INCOME DECLARED BY DEPOSITOR IN A.Y. 07-08 TAX PAID 1. KARUNA CORPORATION 8268857 0 0 2. COSMOS SYNTHETICS 250000 119652 0 ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 8 3. GANESH NARAYAN AGRAWAL 538000 98528 0 4. ANURAG NIRMAL JAIN 1812000 94570 0 5. MANOJKUMAR AGARWAL 200000 0 0 6. NIRMAL JAIN AND SON'S HUF 65000 0 0 7. ABHINANDAN METALS 200000 0 0 8. DHANAVAT METALS 1399000 0 0 9. S.M. TEXTIELS 650000 110250 0 10. S. R. TRADING CO, 250000 135958 3664 11. SS TRADING CO. 250000 0 0 12. SARLA JAIN 2223000 106203 0 13. SARSA ENTERPRISE 300000 0 0 14 SHRI KHODIYAR TEXTILES 500000 0 1613 15 SMT. SITADEVI AGARWAL 300000 0 0 16 SURAJ TRADING CO. 300000 0 2799 17 VIJAY S AGARWAL 500000 0 0 18 TOTAL 18005857 THE ABOVE CHART INDICATES THAT 6 OF THE PARTIES HAV E FILED RETURN OF INCOME DECLARING INCOME BELOW TAXABLE LIMITS THUS PAYING N O INCOME TAX. IN RESPECT OF THE OTHER PARTIES NO EVIDENCES HAVE BEEN FILED. THE REASONS GIVEN IN THE PRECEDING PARAGRAPHS FOR APPLICATION O F SECTION 68 WERE ALSO VALID FOR INVOKING THE PROVISION OF SECTION 68 IN R ESPECT OF THESE DEPOSITS TOTALING RS. 1,80,05,857/-. ADDITION U/S. 68 OF THE ACT OF RS. 1,80,05,857/- IS THEREFORE MADE IN THE TOTAL INCOME COMPUTATION OF THE ASSESSEE. SINCE THE ABOVE AMOUNT IS TAXED U/S. 68 A S THE DEEMED INCOME OF THE ASSESSEE, THE INTEREST CLAIM OF RS. 4,24,670 /-MADE BY THE ASSESSEE CAN NOT ALSO BE ACCEPTED. THE CLAIM OF INTEREST PAY MENT OF RS. 4,24,670/- WAS THEREFORE REJECTED AND DISALLOWED. 4. THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APP ELLATE AUTHORITY WHEREIN HE MADE DETAILED SUBMISSIONS WHICH ARE MENT IONED FROM PAGES 7 ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 9 TO PAGE 38 OF LD. CIT(A)S ORDER. BESIDES, THE ASSE SSEE RELIED ON THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUILDERS (2002) 256 ITR 360 (GUJ) AND HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION (P) LTD. (1986) 159 ITR 78 (SC). 5. AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE LD. CIT(A) REDUCED THE ADDITION FROM RS.1, 10,00,000/- TO RS.20,00,000/- BY OBSERVING AS UNDER :- (C) IN THE FOLLOWING THREE CASES NO AFFIDAVIT OR A NY OTHER EVIDENCE OF IDENTITY HAS BEEN FURNISHED. IT HAS BEEN STATED IN THE REMAND REPORT THAT CONFIRMATORY LETTERS HAVE NOT BEEN FILED BY THE APPELLANT IN THESE CASES. IT IS ALSO SEEN TH AT THESE PERSONS HAVE NOT FILED A RETURN OF INCOME FOR ASST. YEAR 2007-08. COPIES OF THE BANK A CCOUNTS HAVE ALSO NOT BEEN FILED. DURING THE COURSE OF APPELLATE PROCEEDINGS A COPY OF THE R EMAND REPORT OF THE AO WAS HANDED OVER TO THE AR OF THE APPELLANT. VIDE ORDER SHEET ENTRY DATED 27/9/2010 THE AR OF THE APPELLANT STATED THAT HE DID NOT WISH TO FILE ANY FURTHER SUB MISSIONS ON THE REMAND REPORT. THE AR ALSO COULD NOT JUSTIFY WHY THESE DETAILS COULD NOT BE FI LED IN RESPECT OF THE FOLLOWING PERSONS. IN VIEW OF THE FACT THAT NO RETURN OF INCOME IN THESE CASES HAS BEEN FILED IT IS CLEAR THAT THE CREDITWORTHINESS OF THESE PERSONS IS NOT ESTABLISHE D. IN VIEW OF THE ABOVE THE AO WAS JUSTIFIED IN MAKING THE ADDITION UNDER SECTION 68 OF THE IT A CT, 1961 IN RESPECT OF AMOUNTS ALLEGEDLY ADVANCED BY THESE PERSONS : 9. KRISHNA TRADING CO. RS.5,00,000/- 18. BHAVSAR TRADING CO. RS.5,00,000/- 19. SARITA TEXTILES - RS.10,00,000/- IN VIEW OF THE ABOVE THE ADDITION OF RS.1,10,00,000 /- IS REDUCED TO RS.20,00,000/-. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US THE LD. COUNSEL OF THE ASSESSEE HAS FI LED WRITTEN SUBMISSION WHICH READS AS UNDER:- THAT THE LEARNED C1T(A) HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ADDITION OF RS. 20,00,000/- MADE BY THE AO U/S 68 O F THE ACT AS UNEXPLAINED CASH CREDIT. DURING THE YEAR UNDER CONS IDERATION THE APPELLANT HAS TAKEN THE FOLLOWING AMOUNT AS LOAN FR OM THREE PARTIES- ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 10 A) KRISHNA TRADING CO. RS. 5,00,000/- B) BHAVSAR TRADING CO. RS. 5,00,000/- C) SARITA TEXTILES. RS. 10,00,000/- DUE TO SHORTAGE OF TIME ON ACCOUNT OF TIME BARRING ASSESSMENT, FULL DETAILS COULD NOT BE FURNISHED BEFORE THE LEARNED A O. HOWEVER DETAILS GIVEN IN THE TABLE HERE UNDER HAVE BEEN SUBMITTED B EFORE THE LEARNED CIT(A). ACCORDINGLY CONSIDERING THE SAID DETAILS IT IS VERY CLEAR THAT (A) THE DEPOSITOR ARE ASSESSED TO INCOME TAX AND ARE PA N HOLDER (B) ADDRESS OF THE DEPOSITORS ARE AVAILABLE (C) CONFIRMATIONS H AVE BEEN FILED (D) AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQ UES (E) THE AMOUNT HAS BEEN REPAID THROUGH ACCOUNT PAYEE CHEQUES ALSO AND IN VIEW OF THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF DCIT VS. ROHINI BUILDERS (2002) 256 ITR 360 (GUJ), (THE SLP OF THE DEPARTMENT HAS BEEN DISMISSED BY THE HON'BLE APEX COURT), WHER EIN IT WAS HELD THAT 'ONCE ADDRESS, PERMANENT ACCOUNT NUMBER AND COPIES OF RETURN OF THE CREDITORS ARE FILED, THE ASSESSEE HAS DISCHARGED TH E INITIAL ONUS WHICH IS ON HIM IN TERMS OF SECTION 68 OF THE ACT', THE ADDITIO N MADE BY THE LEARNED AO IS REQUIRED TO BE DELETED. THE DETAILS SUBMITTED BEFORE THE LEARNED CIT (A), D ULY CERTIFIED AS TRUE COPY ARE SUBMITTED HEREWITH:- PARTICULARS/NAME OF DEPOSITOR DETAILS SUBMITTED PAGE NO. OF ADDITIONAL EVIDENCES PAGE NO. OF PAPER BOOK (A) INDEX OF ADDITIONAL EVIDENCES ALONG WITH ITS FOLLOWING RELEVANT ANNEXURE 1 (B) DETAILS OF PAN OF THE DEPOSITORS. 2 (C)KRISHNA TRADING CO (PROP. RITA VINODKUMAR SHARMA) CONFIRMATION FOR LOAN TAKEN, LOAN REPAID AND COPY OF ACKNOWLEDGEMENT FOR A.Y. 2008-09 372-374 3-5 (D) BHAVSAR TRADING CO (PROP. SURESH KANTILAL BHAVSAR) AS ABOVE 375377 6-8 (E) SARITA TEXTILE (PROP. RAMESH AMRUTLAL JAIN AS ABOVE 378-380 9-11 (F) REMAND REPORT SENT BY THE LEARNED AO TO THE LEARNED CIT(A) 15-22 ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 11 IN SUPPORT OF THE TRANSACTIONS THROUGH ACCOUNT PAYE E CHEQUES, THE COPIES OF THE RELEVANT AVAILABLE CHEQUES ARE SUBMITTED HER EWITH AS PAGE NO.12- 14 OF THE PAPER BOOK. HE SUBMITTED, THEREFORE, ONE MORE OPPORTUNITY BE GI VEN TO THE ASSESSEE FOR PRODUCING ALL THE MATERIAL EVIDENCES BEFORE THE LOWER AUTHORITIES. 7. ON THE OTHER HAND THE LD. DR SUPPORTED THE ORDER S OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE FAILED TO PRO DUCE EVIDENCES AS PER LAW IN RESPECT OF THE LOANS OBTAINED FROM THE CREDI TORS ALTHOUGH SUFFICIENT OPPORTUNITIES WERE GIVEN BY THE LOWER AUTHORITIES. ACCORDINGLY, THE AO WAS JUSTIFIED IN MAKING THE ADDITION AND LD. CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION OF RS.20,00,000/- THE ORDER OF LD. CIT (A) MAY KINDLY BE CONFIRMED. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RECORD, WE FIND THAT THE ASSESSEE COULD NOT FILE FULL DETAILS REGARDING THE CASH DEPOSIT OF RS.20,00,000/- FROM M/S KRISHNA TRADING CO. RS.5 ,00,000/-, BHAVSAR TRADING CO. RS.5,00,000, AND SARITA TEXTILES RS.10 ,00,000/- DUE TO SHORTAGE OF TIME ON ACCOUNT OF TIME BARRING ASSESSM ENT. HOWEVER, ALL THE NECESSARY DETAILS IN RESPECT OF THESE CREDITS WERE FILED BEFORE THE LD. CIT(A) TO SHOW THAT THE DEPOSITORS WERE ASSESSED TO INCOME-TAX AND WERE PAN HOLDERS, THE ADDRESSES OF THE DEPOSITORS AND CO NFIRMATION FROM THE PARTIES WERE ALSO FILED. THE AMOUNTS WERE RECEIVED THROUGH ACCOUNT PAYEE ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 12 CHEQUES AND WERE ALSO REPAID THROUGH ACCOUNT PAYEE CHEQUES ONLY. HOWEVER, WE FEEL THAT THESE DETAILS REQUIRE VERIFIC ATION AT THE END OF THE AO AND FOR THIS PURPOSE THE MATTER IS RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION. THE ASSESSEE IS DIRECTED TO PRO DUCE ALL THE MATERIAL EVIDENCES BEFORE THE AO. THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 18.11.2011. SD/- SD/- (A. MOHAN ALANKAMONY) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NO.3496/AHD/2010 ASST. YEAR 2007-08 13 1.DATE OF DICTATION 21/10/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER.OTHER MEMBER 24/10/2011 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..