The ITO, Ward-5(1), Ahmedabad V. M/s. Nilsin Ultrachem Ltd., Ahmedabad

ITA 3794/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5733 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 03-10-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: URVASHI SHODHAN ARS; S N SOPARKAR
• Keywords: Unexplained cash credit; Capital asset; Depreciation; TDS; Set aside
• Section: 142(1); 143(1); 250; 143(2); 68; 6; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' [BEFORE SHRI MAHAVIR SINGH,JM & SHRI A N PAHUJA,AM] ITA NO.3794/AHD/2007 (ASSESSMENT YEAR:-2002-03) INCOME-TAX OFFICER, WARD- 5(1), AHMEDABAD V/S M/S NILSIN ULTRACHEM LIMITED, TRASAD ROAD, DHOLKA, AHMEDABAD [PAN: AABCN 1520 C] [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI K M MAHESH, DR ASSESSEE BY:- SHRI S N SOPARKAR & MS. URVASHI SHODHAN,ARS O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 18- 07-2007 OF THE LD.CIT(APPEALS)-XI, AHMEDABAD, RAISE S THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDABA D HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.55,83,737/-ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON FIXED AS SETS. 2. THE LD, COMMISSIONER OF INCOME TAX (A)-XI, AHMED ABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.26,23,050/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS UNDER SECTION 6 8 OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDABAD MAY BE SET ASIDE AND T HAT OF THE ASSESSING OFFICER BE RESTORED. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.27,470/- FILED ON 31-10-2002 BY THE AS SESSEE, MANUFACTURING ULTRAMARINE BLUE (NEEL)., AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT,1961[HEREINAFTER REFER RED TO AS THE ACT], WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF NOTICE U/S 143(2) ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 2 OF THE ACT ON 23-10-2003 FOR A HEARING ON 12.11.200 3. THE ASSESSEE DID NOT RESPOND TO THIS NOTICE NOR TO THE SUBSEQUEN T NOTICE U/S. 142(1) OF THE ACT AND A DETAILED QUESTIONNAIRE DATE D 21-6-2004 OR EVEN NOTICES DATED 25-8-2004 AND 29.11.2004 U/S. 143(2) OF THE ACT. THEREAFTER, THE ASSESSEE FILED A LETTER ON 24- 11-2004 INFORMING THAT ONE OF THE DIRECTORS, SHRI D.N.DHABALIA EXPIRE D ON 8-11-2004. HOWEVER, EVEN SUBSEQUENT LETTERS DATED 24-12-2004 A ND 2-2-2005 ALONG WITH NOTICE U/S. 142(1) OF THE ACT WENT UNRES PONDED. THE AO, THEREFORE, COMPLETED THE ASSESSMENT U/S 144 OF THE ACT WITH THE DISALLOWANCE OF DEPRECIATION-RS.55,83,737/- AND ADD ITION OF RS. 26,23,050 U/S 68 OF THE ACT, APART FROM FEW OTHER D ISALLOWANCES, DETERMINING TOTAL INCOME OF RS.83,84,250/-. 2.1. AS REGARDS DEPRECIATION, THE AO NOTICED THA T THE ASSESSEE CLAIMED FOLLOWING AMOUNT OF DEPRECIATION ON THE ADD ITION TO THEIR FIXED ASSETS:- PLANT & MACHINERY RS.13,32,555 COMPUTER RS. 1,463 OFFICE BLDG. RS. 47,600 EPABX RS. 1,025 POLLUTION CONTROL PLANT RS.38,62,000 FACTORY SHED RS. 3,39,094 ---------------- TOTAL RS.55,83,737/- SINCE THE ASSESSEE DID NOT SUBMIT BILLS FOR THE PUR CHASE OF AFORESAID ASSETS NOR REVEALED THE DATE OF PUT-TO-USE IN SUPPORT OF THE IR CLAIM, THE AO DISALLOWED THE CLAIM FOR THE DEPRECIATION OF RS.55,83,737/- . 2.2. MOREOVER, SINCE THE ASSESSEE DID NOT FURNISH C ONFIRMATION FOR THE NEW UNSECURED LOANS/DEPOSITS OF RS.26,23,050/- NOR ESTABLISHED THE IDENTITY OF THE CREDITORS AND GENUINENESS OF T HE TRANSACTIONS, THE AO ADDED THE SAID AMOUNT U/S.68 OF THE ACT. ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 3 3. ON APPEAL, THE LD. CIT(A) ON PERUSAL OF DETAI LS SUBMITTED ON BEHALF OF THE ASSESSEE OBSERVED IN HIS ORDER DATED 16-03-2006 THAT THOUGH THE ASSESSEE ACQUIRED THE VARIOUS FIXED ASSE TS FROM THE SISTER CONCERNS, IT WAS NOT CLEAR FROM THE DETAILS AS TO AT WHICH ST AGE THESE ASSETS WERE ACQUIRED BY THE ASSESSEE NOR THEIR WRITTEN DOWN VALUE IN THE HANDS OF SELLER COMPANY WAS KNOWN. THEREFORE, THE LD. CIT(A) DIRECTED THE AO TO EXAMINE THE DETAILS OF THE FIXED ASSETS CLAIMED TO HAVE BEEN ADDED FOR THE Y EAR UNDER CONSIDERATION AS ALSO THE AUTHENTICITY OF THE TRANSACTIONS AND THERE AFTER, DEPRECIATION MAY BE ALLOWED IN ACCORDANCE WITH LAW. 3.1 REGARDING ADDITION OF RS.26,23,050/- U/S 68 OF THE ACT , THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.42,93,635/ - AS ON 31.3.2002 UNDER THE HEAD UNSECURED LOANS, INCLUDED RS.5,52,104/- ON ACCOUNT OF UNSECURED LOAN FROM BANK FOR CHEQUES OVERDRAWN WHILE RS.2,41,531/- WAS ON ACCOUNT OF BALANCE CAR LOAN OUT OF OPENING BALANCE OF RS.3,54,974/- F ROM CITY CORP MARUTI FINANCE LTD. TAKEN IN FY 2000-01. THE REMAINING AMOUNT OF R S.35,00,000/- WAS TOWARDS UNSECURED LOAN RECEIVED FROM SANSKRUT ENERGY PVT LT D. BY CHEQUE. IN THESE CIRCUMSTANCES, THE LD. CIT(A) OBSERVED THAT THE AM OUNT OF RS.35,00,000/- HAVING BEEN RECEIVED BY AN ACCOUNT PAYEE CHEQUE AND THE SAID PARTY BEING ASSESSED TO INCOME-TAX VIDE PAN:AACCS 0966J WITH TH E ASSESSING OFFICER (CIRCLE-8) ,WHERE THE ABOVESAID COMPANY WAS ASSESSE D TO TAX, THE ADDITION MADE U/S 68 OF THE ACT WAS UNWARRANTED. HOWEVER, THE LD . CIT(A) FURTHER OBSERVED THAT THE AO WAS AT LIBERTY TO VERIFY THE SAME. SUBJECT TO THE VERIFICATION, THE ADDITION WAS DELETED . 4. ON APPEAL BY THE REVENUE, THE ITAT UPHELD THE CO NCLUSIONS OF THE LD. CIT(A) VIDE THEIR ORDER DATED 31.3.2009 IN ITA NO.1434/AHD./2006. ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 4 5. MEANWHILE, IN PURSUANCE TO DIRECTIONS OF THE LD. CIT(A), THE AO ADDRESSED A LETTER DATED 21-04-2006 TO THE ASSESSEE , WHICH READS AS UNDER: 2 VIDE PARA 4.1 AND 4.2 OF THE APPELLATE ORDER, TH E LD. CIT(A)-XI, AHMEDABAD HAS DIRECTED THE UNDERSIGNED TO VERIFY TH E DETAILS OF THE CLAIM OF DEPRECIATION MADE IN RESPECT OF NEW ASSETS ACQUI RED DURING THE YEAR UNDER CONSIDERATION INCLUDING THOSE ASSETS PURCHASE D FROM THE SISTER CONCERNS. IN THIS CONNECTION, YOU ARE REQUESTED TO FURNISH THE FOLLOWING DETAILS FOR VERIFICATION:- I. IN RESPECT OF CLAIM OF DEPRECIATION:- 1) ORIGINAL BILLS FOR PURCHASE TO BE PRODUCED WITH XEROX COPIES OF THE BILLS TO BE FURNISHED. 2) MODE OF PAYMENT AGAINST THESE BILLS. 3) EXPENSES INCURRED FOR BRINGING THE ASSETS TO THE SITE WHERE THEY ARE INSTALLED. 4) ASSET REGISTER TO BE PRODUCED FOR VERIFICATION. 5) ASSET REGISTER OF THE SISTER CONCERNS FROM WHOM THE ASSETS ARE CLAIMED TO HAVE BEEN ACQUIRED. 6) BALANCE-SHEET OF THE SISTER CONCERN WITH CHART O F DEPRECIATION IN RESPECT OF THE SISTER CONCERNS FROM WHOM THE ASSETS ARE PURCHASED DURING THE YEAR UNDER CONSIDERATION. 7) EVIDENCES TO ESTABLISH THAT THE SAME ARE PUT TO USE BY THE COMPANY. 8) DISSOLUTION DEED OF THE PARTNERSHIP AND AGREEMEN T FOR TRANSFER OF LAND TO THE NAME OF THE COMPANY. II. IN RESPECT OF CASH CREDIT:- 1) COPY OF ACCOUNT OF LOAN TAKEN FROM SANSKRUT ENER GY PVT. LTD. AS APPEARING IN THE BOOKS OF COMPANY AS WELL AS IN THE BOOKS OF SANSKRUT ENERGY PVT. LTD. DULY CONFIRMED. 2) COPY OF BALANCE SHEET WITH SCHEDULE OF LOANS AND ADVANCES GIVEN BY SANSKRUT ENERGY PVT. LTD. AS FILED WITH THE RETU RN OF INCOME FOR AY 2002-03 IN THE CASE OF SANSKRUT ENERGY PVT. LTD. 3) DETAILS OF REPAYMENT OF THIS LOAN AS ON TODAY. 4) COPY OF BANK ACCOUNTS IN WHICH THE CHEQUES HAVE BEEN DEPOSITED AND ALSO THE DETAILS OF BANK ACCOUNTS THROUGH WHICH SUCH LOAN IS REPAID, IF ANY. 5) DETAILS OF INTEREST PAID ON THIS LOAN ALONG WITH THE DETAILS OF TDS. 6) COPY OF TDS RETURN FILED BY YOUR COMPANY. 3. THE HEARING IN YOUR CASE IS FIXED ON 8-5-2006 AT 3.00 PM WHICH MAY PLEASE BE ATTENDED SO THAT THE EFFECT TO THE AP PELLATE ORDER IS GIVEN PROMPTLY IN YOUR CASE. ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 5 5.1 IN RESPONSE, THE ASSESSEE, VIDE HIS LETTER DA TED 8-5-2006, SOUGHT ADJOURNMENT FOR 10 DAYS TO FURNISH THE DETAI LS. DESPITE SEEKING FURTHER TIME, THE ASSESSEE DID NOT FURNISH THE RELEVANT DETAILS SOUGHT BY THE AO UNTIL 15.5.2006.ACCORDINGL Y, THE AO DID NOT ALLOW ANY RELIEF FOR WANT OF VERIFICATION, AS DIRECTED BY LD. CIT(A) AND MAINTAINED THE DISALLOWANCE OF DEPRECIATION OF RS.55,83,737/- AND ADDITION OF RS.26,23,050/- U/S 68 OF THE ACT. 6. ON APPEAL, IT WAS CONTENDED THAT PROPER OPPORT UNITY WAS NOT ALLOWED TO THE ASSESSEE BY THE AO. THE LD. AR ON BE HALF OF THE ASSESSEE WHILE SUBMITTING THE RELEVANT DETAILS IN S UPPORT OF THEIR CLAIM OF DEPRECIATION CONTENDED THAT THE AUDITORS HAVE CE RTIFIED THEIR CLAIM OF DEPRECIATION IN ANNEXURE-AK TO FORM 3CD. WHILE ENC LOSING DETAILS OF ADDITIONS TO FIXED ASSETS AND XEROX COPIES OF SUPPORTING BILL S, THE ASSESSEE POINTED OUT THAT ADDITIONS TO COMPUTER- RS.11,700 AND EPABX S YSTEM- RS.20,499/- AS PER BILLS SPEAKS OF THEIR USAGE AS SOON AS INST ALLED. AS REGARDS ADDITION OF POLLUTION CONTROL PLANT - RS.38.62.000/- , THE ASSE SSEE REFERRED TO THE CERTIFICATE OF GUJARAT POLLUTION CONTROL BOARD FOR USAGE WHILE FOR ADDITIONS TO PLANT & MACHINERIES AGGREGATING TO RS.54,38,936/-, THE ASSE SSEE PLEADED THAT A PRUDENT BUSINESSMAN WILL INVEST IN PLANT & MACHINERIES ONLY FOR ITS REQUIREMENT OF THE BUSINESS. FOR THE ADDITION OF RS.13.36.900/- TO FAC TORY SHEDS, COMPRISING: CONSTRUCTED INDUSTRIAL SHED FROM M/S. NILSIN IND, A PARTNERSHIP FIRM. RS.6,30,000/- CONSTRUCTED INDUSTRIAL SHED FROM M/S. NILSIN CARLONIC MFG. CO. P. LTD. RS.2,31,900/ - CONSTRUCTED INDUSTRIAL SHED FROM M/S. NILSIN DYES & CHEMICALS. RS. 49,500/- ----------------- RS.13,56,900/- ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 6 THE ASSESSEE POINTED OUT THAT THE ABOVE COMPANIES SOLD THEIR SHEDS ON CLOSURE OF THEIR BUSINESS AND THESE CONTINUE TO BE IN THE SAME PLACE WHERE THE RESPECTIVE COMPANIES / ENTITIES WERE CARRYING ON BU SINESS. LIKEWISE THE ASSESSEE PLEADED FOR AN ADDITION OF RS.9,52,000/- ON ACCOUNT OF OFFICE BUILDING AS PER BILL OF NILSIN CARBONIK MFG. CO, PVT. LTD. WHILE ENCLOSIN G A COPY OF ACCOUNTS FOR THE FY 2000-01 AND 2001-02 IN RESPECT OF ASSOCIATE CONCERN S FROM WHOM ASSETS WERE PURCHASED AND RELYING UPON THE JUDGMENT OF HONBL E DELHI HIGH COURT IN THE CASE OF CAPITAL BUS SERVICES (P) LTD VS. CIT, 123 I TR 404, THE ASSESSEE ADDED THAT ASSETS HAVING BEEN PURCHASED IN THE MIDDLE OF THE YEAR AND NOT AT THE FAG END , THERE SHOULD BE NO DOUBTS OVER THEIR ERECTIO N, INSTALLATION ETC. OR EVEN USER. IN THE LIGHT OF THESE SUBMISSIONS AND AFTER HAVING A REPORT OF THE AO ON THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE DISALLOWANCE IN THE FOLLOWING TERMS: 4.2. THE SUBMISSIONS OF THE A. R. OF THE APPELLAN T HAVE BEEN PERUSED. THE DETAILS, WITH REGARD TO THE APPELLANT' S CLAIM ON ACCOUNT OF DEPRECIATION, PRODUCED BEFORE ME BY THE A. R. AS WE LL AS THE DECISION, REFERRED AS ABOVE, WHICH IS RELIED UPON BY THE A. R . AND THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ORDER U/S. 250 HAVE ALSO BEEN EXAMINED. 4.2.1. HAVING VERIFIED THE DETAILS FURNISHED WITH R EGARD TO MACHINERIES, FACTORY SHED AND OFFICE BUILDING, I FIND THAT THE A O HAS NOT APPRECIATED THE FACT THAT THE APPELLANT DID ACQUIRE THE ABOVE FIXED ASSETS DURING THE RELEVANT PREVIOUS YEARS AND ALSO PUT INTO USE. THER EFORE, I AM OF THE OPINION THAT THE DENIAL OF THE DEPRECIATION WITHOUT MAKING PROPER VERIFICATION IS UNWARRANTED. HENCE, THE A0 IS DIREC TED TO ALLOW THE DEPRECIATION CLAIM MADE BY THE APPELLANT IN RESPECT OF MACHINERIES, FACTORY SHED AND OFFICE BUILDING. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. 7. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR WHILE CARRYING THROUGH THE IMPUGNED ORDERS AND PAGES 34 TO 36,39 TO 41 ,75-76 & 105-106 OF THE PAPER BOO K CONTENDED THAT THERE WAS NO PALPABLE INCREASE IN PRODUCTION WITH THE ADDITI ON OF VARIOUS ASSETS DURING THE YEAR NOR THERE WAS ANY EVIDENCE OF USE OF ASSETS ,I NCLUDING POLLUTION CONTROL EQUIPMENTS FOR THE PURPOSE OF BUSINESS OF THE ASSES SEE . THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE DEPRECIATI ON. ON THE OTHER HAND, THE LD. AR ON BEHALF OF THE ASSESSEE WHILE REFERRING US TO COPIES OF VARIOUS BILLS FOR ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 7 PURCHASE OF THE ASSETS PLACED IN THE PAPERBOOK CONT ENDED THAT THERE WAS INCREASE IN EXPENSES ON ACCOUNT OF PURCHASE OF RAW MATERIAL, PACKING MATERIAL AND OTHER MANUFACTURING EXPENSES .EVEN THOUGH SALES OF SODA ASH, SULPHUR, CHINA CLAY, SILICA AND COAL PITCH TRADED BY THEM DE CLINED, LOCAL TURNOVER IN ULTRAMARINE BLUE MANUFACTURED BY THEM INCREASED. HE ADDED THAT POLLUTION CONTROL EQUIPMENTS WERE ADDED DUE TO STRICTER NORMS LAID BY THE POLLUTION CONTROL BOARD. WHILE RELYING UPON DECISION IN THE CASE OF C APITAL BUS SERVICES (P) LTD VS. CIT, 123 ITR 404(DEL.), THE LD. AR ADDED THAT THE L D. CIT(A) RIGHTLY ALLOWED THEIR CLAIM. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THR OUGH THE FACTS OF THE CASE. THE RELEVANT PROVISIONS OF SEC.32 OF THE ACT PROVID E FOR DEDUCTION ON ACCOUNT OF DEPRECIATION FROM THE TOTAL INCOME OF ASSESSEE. THE TWO BASIC REQUIREMENTS TO BE FULFILLED IN TERMS OF THE SAID PROVISIONS FOR CLAI MING DEPRECIATION ARE OWNERSHIP OF ASSET AND 'USE OF ASSET FOR THE PURPOSE OF BUSINESS '. WHAT AMOUNTS TO 'USE' OF AN ASSET FOR THE PURPOSE OF BUSINESS HAS BEEN A MOOT P OINT IN NUMEROUS CASES AS IS IN THE INSTANT CASE. FOR ALLOWANCE OF DEDUCTION FO R DEPRECIATION, THE ASSET MUST NOT ONLY BE OWNED BY THE ASSESSEE BUT IT MUST ALSO BE USED FOR THE PURPOSES OF BUSINESS OR PROFESSION OF THE ASSESSEE. IN THE CASE UNDER CONSIDERATION, THE AO INITIALLY DISALLOWED THE AFORESAID CLAIM OF DEPRECI ATION FOR WANT OF BILLS AND DATE OF USE OF VARIOUS ASSETS. ON APPEAL, THE MATTER WAS RESTORED TO THE AO FOR EXAMINATION OF VARIOUS DETAILS FILED BEFORE THE LD. CIT(A). IN THE SECOND ROUND, THE ASSESSEE DID NOT SUBMIT ANY DETAILS BEFORE THE AO. BUT THE LD. CIT(A) ON VERIFICATION OF DETAILS OF MACHINERIES, FACTORY SHE D AND OFFICE BUILDING AND AFTER HAVING A REPORT OF THE AO CONCLUDED THAT THE ASSESS EE DID ACQUIRE THESE ASSETS DURING THE YEAR UNDER CONSIDERATION AND THESE WERE PUT TO USE. WE FIND THAT THE AO DID NOT BRING ANY MATERIAL ON RECORD THROUGH ENQ UIRIES OR OTHERWISE THAT THE ASSETS PURCHASED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION WERE NOT PUT TO USE. EVEN BEFORE US. THE REVENUE HAVE NOT PLACE D ANY MATERIAL IN ORDER TO CONTROVERT THE AFORESAID FINDINGS OF FACTS RECORDE D BY THE LD. CIT(A) .IN THE ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 8 ABSENCE OF ANY BASIS SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO .1 IN THE APPEAL IS DISMISSED. 9. AS REGARDS THE ADDITION OF RS.26,23,050/- U/S 68 OF THE ACT, THE ASSESSEE REITERATED THEIR EARLIER SUBMISSIONS AND WHILE RECONCILING THE AMOUNT AND FURTHER CONTENDED THAT AN AMOUNT OF RS. 35 LACS WAS RECEIVED BY WAY OF UNSECURED LOANS FROM M/S SANSKR UT ENERGY PVT. LTD. BY CHEQUE. THE ASSESSEE ALSO SUBMITTED A CONTR A COPY OF ACCOUNT OF THE ASSESSEE COMPANY FROM THE BOOKS OF SANSK RUT ENERGY PVT. LTD. BESIDES BALANCE SHEET ALONG WITH SCHEDULE OF LOANS AND ADVA NCES OF M/S. SANSKRUT ENERGY PVT. LTD. FOR THE FY 2001-02 AS ALSO THEIR PAN WITH JURISDICTION OF AO. ACCORDINGLY, IT WAS ARGUED THAT ADDITION OF RS. 35, 00,000/- WAS NOT JUSTIFIED. IN THE LIGHT OF THESE SUBMISSIONS, THE LD. CIT(A) DELETED THE ADDITION ,HOLDING AS UNDER: 5.2.1. AS IT COULD BE SEEN FROM THE AR'S SUBMISSIO N AND DETAILS FURNISHED IT APPEARS TO ME THAT THE CREDITS STATED TO HAVE BE EN BORROWED FROM M/S SANSKRUT ENERGY (P) LTD. ARE CONFIRMED BY THE LENDE R AND THE SAID AMOUNT IS ALSO STATED TO HAVE BEEN RECEIVED THROUGH THE BA NK ACCOUNT FOR WHICH THE COPY OF THE BANK ACCOUNTS HAVE BEEN PRODUCED FO R MY VERIFICATION, THEREFORE, FIE A. 0 SHOULD HAVE APPRECIATED THE FAC T THAT THE CREDITS TAKEN FROM M/S. SANSKRUT ENERGY LTD, IS NOT A BOGUS CREDI T TO MAKE ADDITION U/S. 68 OF F. T. ACT. SINCE THE CREDITS TAKEN BY THE APP ELLANT IS NOT PROVED AS A BOGUS CREDIT, HENCE, THE ADDITION MADE IS WITHOUT E STABLISHING ANY FACT TO WHAT IS CLAIMED BY THE APPELLANT, HENCE, THIS GROUN D OF APPEAL IS ALLOWED. 10 THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LEARNED DR SUPPORTE D THE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE RELIE D ON THE ORDER OF THE LD. CIT(A) IN THE LIGHT OF DECISION IN THE CASE OF MURL IDHAR LAHORIMAL VS. CIT,280 ITR 512(GUJ) . 11. WE HAVE HEARD BOTH THE PARTIES AND GONE THRO UGH THE FACTS OF THE CASE. UNDISPUTEDLY, AN AMOUNT OF RS. 35 LACS WA S BORROWED BY THE ASSESSEE FROM M/S SANSKRUT ENERGY (P) LTD. THROUG H CHEQUE AND APPEARED IN THE BALANCESHEET OF THE LENDER AS ON 31.3.2002. THE Y ALSO CONFIRMED HAVING ITA NO.3794/AHD/2007 FOR AY 2002-03 NILSIN ULTRACHEM LTD. 9 ADVANCED THE AMOUNT . IN THESE CIRCUMSTANCES , THE LD. CIT(A) AFTER VERIFICATION OF THE RELEVANT DOCUMENTS DELETED THE ADDITION. SIN CE THE IDENTITY OF THE DEPOSITOR IS ESTABLISHED THROUGH THEIR PAN WHILE THE AMOUNT R ECEIVED THROUGH THE BANK HAS BEEN CONFIRMED BY THE LENDER AND APPEARED IN THEIR AUDITED BALANCESHEET AS ON 31.3.2002, APPARENTLY, ONUS LAID DOWN UPON THE ASSE SSEE U/S 68 OF THE ACT IN RESPECT OF NATURE AND SOURCE OF THE AMOUNT OF RS. 3 5 LACS IS DISCHARGED. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD FOR DOUBTING THE GENUINENESS OF THE TRANSACTION. IN THESE CIRCUMSTANCES, ESPECIALLY WHE N THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE , GROUND NO.2 IN THE APPEAL IS ALSO DISMISSED. 12. GROUND NOS. 3 & 4 BEING GENERAL IN NATURE, DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE, THEREFORE, DISMISSED . 13. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 16-07-2010 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 16-07-2010 COPY OF THE ORDER FORWARDED TO: 1. NILSIN ULTRACHEM LIMITED, TRASAD ROAD, DHOLKA 2. ITO, WARD-5(1), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XI, AHMEDABAD 5. DR, BENCH-B, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY RE GISTRAR/ASSISTANT REGISTRAR ITAT, AHMEDABAD