The ITO, Ward-1(3), Surat V. M/s. Jai Matadi Dyeing & Printing Mills Pvt.Ltd., Surat

ITA 3697/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6445 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 14-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH OJHA SRDR
• Keywords: Unexplained cash credit; Source of fund; Question of law; Assessment record
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH BEFORE SHRI G.D. AGARWAL, HONBLE VICE-PRESIDENT (AZ) AND SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER ITA NO.3697/AHD/2008 ASSESSMENT YEAR:2005-06 DATE OF HEARING:13.4.11 DRAFTED: 24.5.11 INCOME TAX OFFICER, WARD-1(3), ROOM NO.113, AAYAKAR BHAVAN, MAJRQA GATE, SURAT V/S . JAI MATADI DYEING & PRINTING MILLS PVT. LTD., PLOT NO.3, OPP. DAYABHAISARPANCH-NI- WADI, TATHITHAYA, BARDOLI ROAD, KADODARA, SURAT PAN NO.AAACJ6135A (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI RAJESH OJHA, SR-DR RESPONDENT BY:- SHRI HARDIK VORA, AR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME- TAX (APPEALS)-I, SURAT IN APPEAL NO.CAS-I/311/07-08 FOR THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE HAS TAKEN FOLLOWING EFFECTIVE GROUND S:- 1. THE FACTS OF THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION TO RS.7,76,145/- ON ACCOUNT OF LOW G.P. DISCLOSED. 2. THE FACTS OF THE CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.28,60,000/ - ON ACCOUNT OF UNEXPLAINED AND INGENUINE CASH CREDITS U/S.68 OF TH E I.T. ACT. ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 2 3. THE GROUND NO.1 RELATES TO ADDITION OF RS.7,76,1 45/- BY ESTIMATING HIGHER GROSS PROFIT MARGIN. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE- COMPANY IS ENGAGED IN THE BUSINESS OF DYEING ON JOB WORK BASIS OF ART SILK CLOTH. THE ASSESSEE HAS SHOWN TURNOVER OF RS.3.59 C RORES AND GP RATE AT 15.57% AS COMPARED TO TURNOVER OF RS.3.92 CRORES AN D GP RATE AT 16.22%. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT U/S.145 OF THE I.T. ACT, 1961 FOR THE FOLLOWING REASONS:- (I) THE ASSESSEE DID NOT FILE ANY QUANTITATIVE DET AILS SAYING THAT THE ASSESSEE WAS NOT MAINTAINING DAY-[TO-DAY STOCK REGI STER AND HENCE THE QUANTITATIVE DETAILS GIVEN BY THE ASSESSEE REMAINED UNVERIFIED. ACCORDING TO THE A.O, THE ASSESSEE DID NOT GIVE DAY -TO-DAY CONSUMPTION DETAILS OF COLOUR & CHEMICALS, COAL & L IGNITE, DIESEL, GAS, SPARES AND OTHER CONSUMABLES FORMING PART OF MANUFA CTURING ACTIVITY. (II) NOTICES U/S.133(6) WERE ISSUED TO FOUR COMPANI ES FROM WHOM THE NOTICES WERE RETURNED UNSERVED AND HAD BEING CONFRO NTED THE ASSESSEE COULD NOT GIVE CONFIRMATION FROM THESE PARTIES AND ALSO COULD NOT FILE COPY OF ACCOUNT FROM THE BOOKS OF THOSE PARTIES. (II) THE CONSUMPTION OF POWER PER METER OF PRODUCTI ON VARIED CONSIDERABLY AS LOW AS 3.48% PER METER IN SEPTEMBER 2004 TO AS HIGH AS 5.13% IN JANUARY 2005. THE APPELLANT COULD NOT E XPLAIN SUCH HUGE VARIATION. AFTER REJECTING THE BOOKS OF ACCOUNT, ASSESSING OFF ICER NOTED THAT IN THE ASSESSMENT YEAR 2004-05 THE GP RATE ADOPTED WAS 17. 96% BY HIM AS AGAINST GP THE ASSESSEE HAD SHOWN AT 16.22% IN THE LAST YEA R. THE AO THEREFORE ASKED AS TO WHY THE GP WAS NOT ENHANCED. SINCE THE ASSESSEE COULD NOT EXPLAIN FALL IN GP RATE AND SIMPLY STATED THAT HON BLE ITAT HAS GIVEN SUBSTANTIAL RELIEF WITHOUT EVEN MENTIONING AS TO IN WHICH YEAR THE RELIEF WAS GIVEN, THE AO ADOPTED THE GP RATE OF 17.96% AS IN T HE LAST YEAR AND MADE ADDITION OF RS.7,76,145/-. BEFORE LD. CIT(APPEALS) ASSESSEE PLACED RELIANCE ON THE ITAT ORDER FOR ASSESSMENT YEAR 2004-05, WHER EIN THE ADDITION ON ACCOUNT OF GP WAS RESTRICTED TO RS.5 LAKH BY OBSERV ING AS UNDER:- 5. WE HAVE HEARD RIVAL SUBMISSION AND PERUSED MATE RIAL AVAILABLE ON RECORD. AS THE FACTS EMERGE, A PERUSAL OF THE EXPLA NATIONS GIVEN BY THE ASSESSEE INDICATES THAT EXPLANATION WAS PROPERLY FU RNISHED TO THE AO, ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 3 WHICH HAS NOT BEEN CONSIDERED IN ENTIRETY. INCREASE IN THE RATE OF GEB POWER TARIFF HAS NOT BEEN DISPUTED. IN OUR VIEW ASS ESSEE COULD NOT EXPLAIN PROPERLY VALUATION OF CLOSING STOCK OF COLO URS AND CHEMICALS AND CONSUMPTION THEREOF. IN OUR CONSIDERED VIEW, ENDS O F JUSTICE WILL BE MET IF ADDITION ON ACCOUNT OF REDUCTION IN GP IS RESTRI CTED TO RS.5 LAKHS WHICH SHALL BE ADDED TO THE INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE LD. CIT(APPEALS) PARTLY ALLOWE D THE APPEAL FILED BY ASSESSEE BY OBSERVING AS UNDER:- SINCE THE TURNOVER DURING THE YEAR IS SIMILAR TO L AT YEAR, IT WOULD BE JUSTIFIED IF THE GP RATE BY ADDING RS.5 LACS SUSTAI NED BY THE HONBLE I.T.A.T IS CALCULATED. THE A.O IS, THEREFORE, DIREC TED TO WORK OUT THE G.P RATE BY MAKING ADDITION OF RS.5 LACS AS STATED BY T HE HONBLE I.T.A.T INSTEAD OF RS.14,59,470/- MADE IN THE ASSESSMENT OR DER. ACCORDING TO THE APPEAL, THIS G.P RATE BECOMES 15.42% IN THE LAT YEAR AND IT HAS ALREADY DISCLOSED G.P RATE OF 15.57% IN THE CURRENT YEAR. THE A.O IS DIRECTED TO WORK OUT THE G.P RATE OF LAST YEAR AS P ER THE ADDITION SUSTAINED BY THE HONBLE I.T.A.T AND IF THE G.P RAT E LAST YEAR IS HIGHER THAN THE G.P RATE OF CURRENT YEAR THEN THE ADDITION SHOULD BE MADE BY ADOPTING THE G.P RATE AS IN THE LAST YEAR AFTER THE ADDITION SUSTAINED BY THE HONBLE I.T.A.T. IF THIS G.P RATE IS LESS THAN THE CURRENT YEAR G.P RATE, THEN NO ADDITION WILL BE MADE. IN VIEW OF THI S REASON, THIS GROUND OF APPEAL IS PARTLY ALLOWED AND DECIDED WITH THE ABOVE DIRECTION. SINCE THE LD. CIT(A) HAS DECIDED THE ISSUE BY FOLLO WING ORDER OF HONBLE ITAT FOR ASSESSMENT YEAR 2004-05, WE FEEL NO NEED TO INT ERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND SAME IS HEREBY CONFIRMED. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 4. SECOND GROUND RELATES TO ADDITION OF RS.28.60 LA KH AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. DURING THE ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER FOUND THAT ASSESSEE HAS ACCEPTED UNSECURED LOAN DURING THE YEAR TO THE EXTENT OF RS.49.30 LAKH. THE DETAILS AND CONFIR MATIONS WERE FILED BY ASSESSEE IN RESPECT OF LOAN. THE AO, AFTER EXAMININ G THE DETAILS FILED BY THE ASSESSEE WAS OF THE VIEW THAT LOAN TO THE EXTENT OF RS.28.60 LAKH WERE UNEXPLAINED. THE AO FURTHER MENTIONED IN HIS ORDER THAT MEMBERS OF ADNANI FAMILY HAVE ADVANCED RS.28.60 LAKH IN THE MONTH OF MAR05 BY DEPOSITING CASH IN THE NAME OF VARIOUS ENTITLES. MOST OF THE B ANK STATEMENTS PERTAINING TO ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 4 VARIOUS FAMILY MEMBERS HAD ONLY 2/3 TRANSACTIONS DU RING THE ENTIRE YEAR. THOUGH THE RETURN OF INCOME HAD BEEN FILED IN THEIR NAMES BUT THE SOURCE OF CASH WAS DOUBTFUL AND THE CREDITWORTHINESS OF THE P ERSONS WERE DOUBTFUL. THE AO THEREFORE ADDED THE AMOUNT OF RS.28.60 LAKH U/S 68 OF THE ACT. 5. BEFORE LD. CIT(APPEALS) ASSESSEES CONTENTION WA S THAT ALL THE PARTIES HAD ENOUGH CAPITAL BALANCE WITH THEM AND THEREFORE CREDITWORTHINESS IS PROVED. THE ASSESSEE ALSO FILED FOLLOWING CHART BEF ORE LD. CIT(A):- SR. NO. NAME OF THE PERSON OP. BALANCE OF CAPITAL AS ON 01.04.2004 AMOUNT OF DEPOSIT GIVEN DURING THE YEAR 1 DEEPAK ADNANI 6,06,352 50,000 2 GIRISH ADNANI 4,28,744 1,00,000 3 SMT. JYOTIDEVI ADNANI 15,48,044 1,00,000 4 SMT. KANCHAN DEVI ADNANI 3,31,967 50,000 5 SMT. KAVITADEVI ADNANI 15,75,801 1,00,000 6 MANOJ KUMAR ADNANI 7,06,930 1,50,000 7 MAYADEVI ADNANI 15,36,656 AND ALSO LOAN OF 28.50,000 TAKEN FROM BANK 10,00,000 8 NARESH KUMR ADNANI 8,57,100 1,00,000 9 NEELAM DEVI ADNANI 10,91,474 1,00,000 10 RAJANI DEVI ADNANI 6,74,880 1,00,000 11 REKHA DEVI ADNANI 12,66,937 1,00,000 12 RAMCHANDRA ADNANI 9,52,389 1,00,000 13 RAMESH KUMAR ADNANI HUF 8,42,219 1,00,000 14 SANJAY ADNANI 4,68,670 1,00,000 15 SARDA DEVI ADNANI 9,98,651 50,000 16 SUSHIKUMAR ADNANI 2,37,332 50,000 17 VARSHA DEVI ADNANI 4,02,901 60,000 18 MOHINI DEVI ADNANI 26,11,125 4,50,000 THIS SUBMISSION OF THE ASSESSEE WAS SENT TO ASSESSI NG OFFICER FOR HIS COMMENTS. IN THE REMAND REPORT, AO STATED THAT ASSE SSEE-COMPANY WAS ASKED TO MAKE AVAILABLE DEPOSITORS PERSONALLY FOR V ERIFICATION OF CLAIM IN THEIR NAMES ALONG WITH REQUIRED DOCUMENTS, SUCH AS, PHOTO IDENTITY, PERSONAL BOOKS OF ACCOUNT, BANK STATEMENT AND EVIDENCE IN SU PPORT OF SOURCE OF FUNDS. ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 5 THE ASSESSEE-COMPANY NEITHER PRODUCED ANY ACCOUNTS OF ENTRIES OF UNSECURED LOAN RAISED DURING THE YEAR UNDER CONSIDE RATION NOR PRODUCED BOOKS OF ACCOUNT INCLUDING CASH BOOK OF THOSE PERSO NS AND OTHER EVIDENCE OF SOURCE OF FUNDS IN THEIR HANDS. THE AO STATED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE-COMPANY HAD STATED THAT T HESE PARTIES COULD NOT BE PRODUCED FOR SHORTAGE OF TIME AS THEY WERE RESID ING AT JABALPUR. BUT THIS TIME THE PERSONAL PRESENCE WAS DENIED SAYING THAT I T WAS NOT PRACTICAL APPROACH. IN VIEW OF THE ABOVE, THE AO STATED THAT PERSONS FROM WHOM UNSECURED LOANS HAVE BEEN TAKEN WERE NOT HAVING CRE DITWORTHINESS TO GIVE LOAN TO THE ASSESSEE-COMPANY. THE AO FURTHER STATED THAT IN THE CASE OF MAYADEVI ADNANI AND MOHINIDEVI KHATGRI THE CORRESPONDING ENTRY WERE THROUGH CHEQUE BUT THE SOURCE OF SUCH ENTRY COULD N OT BE EXPLAINED BY THE ASSESSEE. THE AO NOTED AS TO WHY SMT. MOHINIDEVI AD NANI GET ENTRY FROM KOLKATA BASED COMPANY FOR ADVANCING LOAN TO THE ASS ESSEE. THE AO THEREFORE SUPPORTED THE ADDITION MADE U/S 68 BY HIM DURING TH E ASSESSMENT PROCEEDINGS. THE ASSESSEE WAS ASKED TO GIVE HIS COM MENTS ON THE REMAND REPORT SUBMITTED BY AO. THE ASSESSEE MADE FOLLOWING SUBMISSION:- (I) ALL THESE DEPOSITORS ARE RESIDING AT JABALPUR AND STILL THE A.O HAS PRESSURIZED FOR THE PERSONAL PRESENCE OF THEM WITHI N A PERIOD OF THREE DAYS TO VERIFY THE CREDITWORTHINESS. THE APPELLANT ARGUED THAT THE NOTICE DATED 24.06.2008 WAS RECEIVED BY THE APPELLANT ON 0 5.07.2008 FOR PRODUCING THE PARTIES ON 08.07.2008. THE APPELLANT REQUESTED 10 DAYS TIME BUT ONLY THREE DAYS TIME WAS GIVEN AND CASE W AS FIXED FOR HEARING ON 121.07.2008. (II) THE ARGUMENT OF THE A.O THAT SINCE PERSONAL PR ESENCE OF THE DEPOSITORS HAS NOT BEEN MADE, THEREFORE, THEY HAD N O CREDITWORTHINESS, WHICH IS WRONG BECAUSE PERSONAL PRESENCE IS REQUIRE D FOR IDENTITY AND NOT FOR PROVING CREDITWORTHINESS. THE APPELLANT HAS PROVIDED ALL THE DETAILS LIKE, NAME, PAN, CONFIRMATION LETTER, COPY OF RETURN O INCOME FILED BY THEM, COPY OF THEIR BANK ACCOUNT AND HENCE IT HAS DISCHARGED ITS ONUS. (III) THE A.O HAS STATED THAT THOUGH THE RETURN OF INCOME HAS BEEN FILED IN THEIR NAMES BUT THE SOURCE OF CASH DEPOSIT IS ST ILL DOUBTFUL. THE APPELLANT STATED THAT THE A.O MADE NO EFFORT TO VER IFY THE DEPOSITS BY ISSUING NOTICE TO THE DEPOSITORS SINCE IT HAD DISCH ARGED ITS ONUS. ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 6 (IV) THE DEPOSITORS HAVE HELPED THE COMPANY BY EXTE NDING FINANCIAL SUPPORT AND IT IS PRACTICALLY NOT POSSIBLE FOR THE ASSESSEE TO INSIST UPON THE DEPOSITORS TO COME TO SURAT FOR VERIFICATION. (V) ALL THE DEPOSITORS ARE REGULAR INCOME-TAX ASSES SEES FOR LAST MANY YEARS AND HAD SUFFICIENT NET WORK EVEN AT THE BEGIN NING OF THE YEAR. (VI) IN THE CASE OF SMT.MOHINIDEVI KHATRI, THERE WA S A DEPOSIT OF RS.20,50,000/- IN HER BANK ACCOUNT ON THE DAY MENTI ONED BY THE A.O. SMT. MAYADEVI ADNANI WAS GRANTED A HOUSING LOAN OF RS.28,50,000/P BY ICICI BANK AND THE SAID AMOUNT WAS DISBURSED BY THE ICICI BANK ON30.09.2004 AND IT WAS DEPOSITED IN HER BANK ACCOU NT. OUT OF THE SAID FUNDS THE AMOUNT OF RS.10 LACS WAS ADVANCED TO THE APPELLANT COMPANY BY WAY OF UNSECURED LOANS. (VII) IN RESPECT OF SMT. MOHINI DEVI KHATRI, THE DE POSIT OF RS.12,11,080/- IN HER BANK ACCOUNT CAME FROM CLEARING CHEQES AND N OT BY CASH. OUT OF THIS SMT. MOHINIDEVI KHATRI HAS ADVANCED A SUM OF R S.4.50,00/- TO THE ASSESSEE COMPANY. IN VIEW OF THE ABOVE, THE APPELLANT SATED THAT NO A DDITION SHOULD BE MADE AS IT HAD DISCHARGED ITS ONUS BY SUBMITTING TH E FOLLOWING:- (I) COMPLETE DETAILS LIKE, NAME AND ADDRESS FOR ALL THE DEPOSITORS. (II) COPY OF LEDGER ACCOUNT AND COUNTER CONFIRMATIO N OF THE DEPOSITORS. (III) PAN OF ALL THE DEPOSITORS. (IV) COPIES OF BANK ACCOUNT OF THE DEPOSITORS FOR T HE F.Y ENDING ON 31.03.2004 AND 31.03.2005. (V) COPY OF BANK STATEMENT OF THE DEPOSITORS AS WEL L AS THE APPELLANT REFLECTING THE TRANSACTIONS HELD BETWEEN THE COMPAN Y AND THE DEPOSITORS. (VI) COPY OF THE INCOME-TAX RETURNS OF THE DEPOSITO RS THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF CIT V. ORISSA CORPORATION P. LTD. (1986) 159 ITR 78 (SC) AND THE DECISION OF HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF DCIT V. ROHINI BUILDERS (2002) 256 ITR 360 (GUJ). ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 7 6. TAKING INTO CONSIDERATION THIS SUBMISSIONS OF AS SESSEE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPEL LANT AND THE OBSERVATION OF THE A.O. FROM THE ASSESSMENT ORDER A S WELL AS REMAND REPORT, IT IS SEEN THAT THE A.O HAS MADE THE ADDITI ON ONLY BECAUSE THE FOLLOWING REASONS:- (I) THE ASSESSEE COMPANY DID NOT PRODUCE ANY OF THE SE PERSONS FROM WHOM THE UNSECURED LOAN WAS RAISED. (II) THE BOOKS OF ACCOUNT, INCLUDING THE CASH BOOK OF THE DEPOSITORS HAVE NOT BEEN PRODUCED. (III) THERE ARE CASH DEPOSITS IN THE BANK ACCOUNT O F THE DEPOSITORS AND, THEREFORE, THE SOURCES OF FUNDS WERE NOT PROVE D. (IV) HOW THE DEPOSITORS HAVE SHOWN INCOME BELOW TAX ABLE LIMIT AND STILL DEPOSITED CASH FOR ADVANCING LOAN TO THE ASSE SSEE IS NOT EXPLAINED. 3.3.2 ON PAGE-14 & 15, THE A.O HAS REPRODUCED COPY OF LETTER DATED 03.12.2007 WHICH AS PER THE FOOTNOTE BELOW THE TABL E SAYS THAT THE CONFIRMATION, COPY OF ACKNOWLEDGMENT OF RETURN AND COPY OF BANK STATEMENT HAS NOT BEEN FURNISHED IN THE CASE OF RAJ ANIDEVI ADNANI. HENCE, THE A.O ADMITTED THAT THE CONFIRMATION, COPY OF ACKNOWLEDGMENT OF RETURN AND COPY OF BANK STATEMENT HAS BEEN FURNISHED IN THE RESPECTIVE 217 DEPOSITORS. FURTHER, IT IS SEEN THAT THE ANNEXURE-9 OF THE TAX AUDIT REPORT CLEARLY MENTIONE D PAN OF ALL THE PARTIES, EXCEPT MOHINIDEVI KHATRI, RAMCHANDRA ADNAN I, RAMESH KUMAR ADNANI HUF AND SUSHILKUMAR ADANI. IT IS NSOT THE CASE OF THE A.O THAT THE CONFIRMATIONS HAVE NOT BEEN SUBMITTED. IT IS NS OT THE CASE OF THE A.O. THAT PANS WERE NOT GIVEN. ACCORDING TO THE A.O ACKNOWLEDGMENT OF RETURN WAS ALSO FILED EXCEPT IN T HE CASE OF RAJNIDEVI ADNANI. 3.3.3 FROM THE ABOVE, IT IS CLEAR THAT THE APPELLAN T HAD DISCHARGED ITS ONUS BECAUSE IT HAD SUBMITTED TO THE A.O. THE FOLLO WING DETAILS:- (I) COMPLETE DETAILS LIKE, NAME AND ADDRESS OF ALL THE DEPOSITORS. (II) COPY OF LEDGER ACCOUNT AND COUNTER CONFIRMATIO N OF THE DEPOSITORS. (III) PAN OF ALL THE DEPOSITORS. (IV) COPIES OF BANK ACCOUNT OF THE DEPOSITORS FOR T HE F.Y ENDING ON 31.03.2004 AND 31.03.2005. (V) COPY OF BANK STATEMENT OF THE DEPOSITORS AS WEL L AS THE APPELLANT REFLECTING THE TRANSACTIONS HELD BETWEEN THE COMPAN Y AND THE DEPOSITORS. (VI) COPY OF THE INCOME-TAX RETURNS OF THE DEPOSITO RS. ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 8 3.3.4 IN THE REMAND REPORT, THE A.O WAS CLEARLY ASK ED TO SEND HIS COMMENTS ON THE SUBMISSION MADE BY THE APPELLANT AF TER MAKING DETAILED INQUIRIES WITH RESPECT TO THE SUBMISSION. IT WAS ALSO STATED IN THE LETTER THAT IF REQUIRED THE A.O COULD ISSUE SUM MONS TO THE ASSESSEE OR TO ANY PARTY FOR PREPARING THE REPORT. STILL THE REMAND REPORT DOES NOT SHOW THAT THE A.O ISSUED ANY INQUIRY LETTERS TO ANY OF THE DEPOSITORS. THE A.O NEITHER ISSUED INQUIRY LETTERS NO ISSUED CO MMISSION TO THE OFFICERS AT JABALPUR AND INSTEAD ASKED THE ASSESSEE TO PRODUCE THE DEPOSITORS EVEN WHEN THE APPELLANT HAD DISCHARGED I TS ONUS FOR CASH CREDIT. IN THE CASE OF ORISSA CORPORATION (SUPRA), THE HONBLE SUPREME COURT HAS VERY CLEARLY SATED THAT IF THE ASSESSEE H AS DISCHARGED ITS ONUS THEN THE ONUS LIES ON THE A.O TO ESTABLISH BY BRINGING MATERIAL ON RECORD THAT THE DETAILS PROVIDED BY THE ASSESSEE WA S WRONG OR THAT THE IDENTITY WAS NOT PROVED OR THERE WAS NO CREDITWORTH INESS OR THE TRANSACTION WAS NOT GENUINE. IN THE PRESENT CASE, I T IS CLEAR FROM THE ABOVE THAT THE APPELLANT HAS DISCHARGED ITS ONUS. I HAVE GONE THROUGH THE ASSESSMENT RECORD AND IT IS SEEN THAT THE APPEL LANT HAS GIVEN TO THE A.O. FOLLOWING DOCUMENTS IN RESPECT OF VARIOUS DEPO SITORS:- (I) COMPLETE DETAILS LIKE, NAME AND ADDRESS OF ALL THE DEPOSITORS. (II) COPY OF LEDGER ACCOUNT AND COUNTER CONFIRMATIO N OF THE DEPOSITORS. (III) PAN OF ALL THE DEPOSITORS. (IV) COPIES OF BANK ACCOUNT OF THE DEPOSITORS FOR T HE F.Y ENDING ON 31.03.2005. (V) COPY OF BANK STATEMENT OF THE DEPOSITORS AS WEL L AS THE APPELLANT REFLECTING THE TRANSACTIONS HELD BETWEEN THE COMPAN Y AND THE DEPOSITORS. (VI) COPY OF THE INCOME-TAX RETURNS OF THE DEPOSITO RS. 3.3.5 IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE AP PELLANT HAD DISCHARGED ITS ONUS OF EXPLAINING THE CASH CREDIT. THE A.O HAS BROUGHT NO MATERIAL ON RECORD EVEN AT THE REMAND PROCEEDING STAGE TO SH OW THAT THE SUBMISSION MADE WAS WRONG OR THE APPELLANT WAS IN S UCH A POSITION THAT THEY COULD NOT HAVE ADVANCED THE ABOVE MENTION ED AMOUNTS. ALL THESE DEPOSITORS ARE ASSESSED TO TAX AND THEY HAVE BALANCE AS PER THEIR BALANCE SHEETS. ACCORDING TO THE A.O, THEY ARE RELA TED TO THE DIRECTORS. UNDER THESE CIRCUMSTANCES, IF THE DEPOSITORS HAVE D EPOSITED CASH IN THEIR BANK ACCOUNTS THEN THE A.O OF THESE DEPOSITOR S HAVE TO TAKE ACTION IN THE HANDS OF THESE DEPOSITORS AS PER LAW. ONCE THE ONUS HAS BEEN DISCHARGED BY THE APPELLANT AND IF THE A.O IS UNABLE TO BRING ANY MATERIAL ON RECORD TO SHOW THAT THE TRANSACTION WAS BOGUS OR THE CREDITWORTHINESS DID NOT EXIST NO ADDITION CAN BE M ADE IN THE HANDS OF THE DEPOSITORS. IN VIEW OF THE ABOVE, THE ADDITION OF RS.28,60,000/P IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 9 SINCE THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESS EE BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION P. LTD. (SUPRA), WHEREIN FOLLOWING WAS HELD:- THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NAM ES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF T HE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEE. THEIR INDE X NUMBERS WERE IN THE FILE OF THE REVENUE. THE REV, APART FROM ISSUIN G NOTICES UNDER SECTION 131 AT THE INSTANCE OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CRE DITWORTHY. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CRED ITORS. IN THOSE CIRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION TH AT THE RESPONDENT HAD DISCHARGED THE BURDEN THAT LAY ON IT, THEN IT C OULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR B ASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVIDE NCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH AROSE. THE HIGH COURT WAS RIGHT IN REFUSING TO STATE A CASE. AND THE DECISION OF JURISDICTIONAL HIGH COURT IN TH E CASE OF ROHINI BUILDERS (SUPRA), WHEREIN FOLLOWING WAS HELD:- APPEAL TO HIGH COURT CASH CREDITS IDENTITY OF CREDITORS PROVIDED AMOUNTS RECEIVED BY ACCOUNT PAYEE CHEQUES INITIAL BURDEN OF PROVING CREDITS DISCHARGED SOURCE OF CREDITS NEED NOT BE P ROVED FACT THAT EXPLANATION WAS NOT SATISFACTORY WOULD NOT AUTOMATI CALLY RESULT IN DEEMING AMOUNTS AS INCOME OF ASSESSEE TRIBUNAL HO LDING AMOUNT REPRESENTING CASH CREDITS NOT INCLUDIBLE IN TOTAL I NCOME OR ASSESSEE JUSTIFIED NO SUBSTANTIAL QUESTION OF LAW INCOME-TA X ACT, 1961,SS. 68, 260A. WE FIND NO INFIRMITY IN THE ORDER PASSED BY LD. CIT (A) AND THE SAME IS HEREBY UPHELD. THIS ISSUE OF REVENUES APPEAL IS DISMISSED . 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS DAY OF 10 TH JUNE, 2011 SD/- SD/- ( G.D.AGARWAL ) ( D.K. TYAGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 10/06/2011 ITA NO.3697/AHD/2008 A.Y. 205-06 ITO WD-1(3), SRT V. JAI MATADI DYEING & PRIN TING MILLS P.LTD. PAGE 10 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- I, SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD