M/s. Skytech Aviation Ltd., New Delhi V. ITO, New Delhi

ITA 3914/DEL/2010

• Counselvise Citation: 391420114 RSA 2010
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 09-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 20-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH ARORA
• Keywords: Unexplained cash credit; Source of fund; Additional evidence
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.3914/DEL/2010 ASSESSMENT YEAR : 2006-07 M/S SKYTECH AVIATION LTD., DCIT, R-11, NEHRU ENCLAVE, CIRCLE-8(1), KALKAJI, NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAICS AAICS AAICS AAICS- -- -6008 6008 6008 6008- -- -D DD D APPELLANT BY : SHRI RAJESH ARORA, C.A. RESPONDENT BY : SHRI NEERAJ KUMAR, SR. DR. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A) DATED 18.6.2010. THE GROUNDS RAISED BY THE A SSESSEE ARE AS UNDER:- 1. THE LD CIT(A) HAS ERRED IN LAW AND FACTS OF THE CA SE IN CONFIRMING ADDITION AMOUNTING TO RS.34,00,000/- MADE BY LD A.O U/S 68 OF I.T. ACT, TREATING THE SAME UNEXPLAINED UN SECURED LOAN, IGNORING THE SUBMISSIONS AND EVIDENCE FURNISHED BY THE ASSESSEE, WHICH IS ARBITRARY, UNJUSTIFIED AND BAD IN LAW. 2. THE LD CIT(A) HAS ERRED IN LAW AND FACTS OF THE CA SE IN CONFIRMING THE ADDITION OF RS.66,00,000/- MADE BY LD /- A. 0 U/S ITA NO3914/DEL/2010 2 68 OF IT ACT, ALLEGING UNEXPLAINED CASH CREDIT IN TH E FORM OF SHARE APPLICATION MONEY, AND DISREGARDING THE EXPLANATION OF THE ASSESSEE, WHICH IS ARBITRARY, UNJUSTIFIED AND BAD IN LAW. 3. THE LD CIT(A) HAS ERRED IN LAW AND FACTS OF THE CA SE IN CONFIRMING THE ADDITION AMOUNTING TO RS.11,01,500/-M ADE BY THE LD A.O., TREATING THE SAME AS UNEXPLAINED LOSS ON NON E XECUTION OF ORDER WHICH IS ARBITRARY, UNJUSTIFIED, BAD IN LAW AND UNCALLED FOR. 4. THE LD CIT(A) HAS FURTHER ERRED IN LAW AND FACTS O F THE CASE IN ENHANCING THE ADDITION AMOUNTING TO RS. 46,00,000/-, IGNORING THE SUBMISSIONS OF THE ASSESSEE AND TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I. T. ACT, WHI CH IS NOT ONLY ARBITRARY, UNJUSTIFIED, BASELESS AND UNCALLED FOR, BUT ALSO OUTSIDE THE JURISDICTION VESTED WITH THE APPELLATE AUTHORITY. 5. THE LD CIT(A) HAS ERRED IN LAW AND FACTS OF THE CA SE IN ALLEGING NONCOMPLIANCE AND NON- COOPERATION ON THE PART OF THE ASSESSEE, WHICH IS HIGHLY UNJUSTIFIED, ARBITRARY, BAD IN LAW AND UNCALLED FOR. 6. THE LD CIT(A) HAS ERRED IN LAW AND FACTS OF THE CA SE, IN NOT CONSIDERING THE DETAILS FURNISHED BY THE ASSESSEE AND ALSO IN NOT PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO FURNI SH THE DESIRED INFORMATION AND DETAILS, WHICH IS ARBITRARY, U NJUSTIFIED AND BAD IN LAW. 7. THE LD CIT(A) HAS ERRED IN REJECTING THE INFORMA TION AND REPORT SUBMITTED BY THE LD A.O. ON REMAND AND ASSUMING THE P OWERS ITA NO3914/DEL/2010 3 FOR MAKING ADDITIONS, WHICH IS NOT ONLY UNJUSTIFIED, B AD IN LAW BUT ALSO EXCEEDED THE JURISDICTION VESTED WITH THE APPELL ATE AUTHORITY. 8. THE ASSESSEE CRAVES TO HAVE THE RIGHT TO ADD, AMEND O R MODIFY THE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY AND IT FILED ITS RETURN OF INCOME ON 29.11.2 006 DECLARING A LOSS OF ` .35,60,446/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFIC ER OBSERVED THAT ASSESSEE HAD RAISED UNSECURED LOANS OF ` .80 LAKHS FROM THE FOLLOWING THREE PARTIES:- 1. SHRI TEJINDER PAL SINGH CHADHA. 26 LAKHS 2. SHRI SURENDER SINGH BINDRA. 8 LAKHS 3. M/S GATTAPU CHEMICALS (P) LTD. 46 LAKHS. 3. THE ASSESSEE FILED CONFIRMATION FROM PARTY NO.1 & 2. HOWEVER, DID NOT FILE ANY BALANCE SHEET OR BANK STATEMENT OF P ARTIES IN SUPPORT OF ITS CLAIM. SIMILARLY, THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE HAD RAISED SHARE APPLICATION MONEY OF ` .66 LAKHS DURING THE YEAR FROM THE FOLLOWING THREE PERSONS:- 1. SMT. PARMINDER KAUR. 8 LAKHS 2. SHRI SURENDR SINGH BINDRA. 8 LAKHS 3. M/S VINAYAK FIN & INVESTMENT PVT. LTD. 50 LAKHS ------------ 66 LAKHS ------------ ITA NO3914/DEL/2010 4 THE ASSESSEE WAS ASKED TO FILE CONFIRMATIONS AND COPY OF B ANK STATEMENT AND INCOME TAX RETURNS IN RESPECT OF ABOVE P ARTIES AND IN RESPONSE THERETO THE ASSESSEE FILED CONFIRMATIONS IN RESP ECT OF SMT. PARMINDER KAUR AND SHRI SURENDER SINGH BINDRA. HOW EVER, NO SUPPORTING DOCUMENTS LIKE BANK STATEMENT, COPY OF INCO ME TAX RETURN TO PROVE THE GENUINENESS OF TRANSACTION AND CAPACITY A ND CREDITWORTHINESS OF THE PARTY WAS FILED. HOWEVER, IN R ESPECT OF M/S VINAYAK FIN & INVESTMENT (P) LTD. THE ASSESSEE HAD FILE D COPY OF RETURN BUT NO CONFIRMATION WAS FILED. THE ASSESSING OFFICER ALSO OBSERVED THAT ASSESSEE HAD CLAIMED LOSS OF ` .11.01,500/- ON ACCOUNT OF LOSS FOR NON EXECUTION OF AN ORDER AND ASSESSEE HAD NOT FILED DETAIL ED EXPLANATION ALONG WITH THE EXPLANATORY DOCUMENT TO SUPPORT ITS CL AIM. THEREFORE, THE ASSESSING OFFICER PRESUMED THAT ASSESSEE HAD NOTHING TO SAY ON THE MATTER AND SAME WAS THEREFORE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 4. IN RESPECT OF UNSECURED LOAN, THE AMOUNT OF ` .34 LAKHS IN RESPECT OF LOAN FROM SHRI TEJINDER PAL SINGH AND SHRI SUREN DER SINGH BINDRA WERE ADDED BACK IN VIEW OF THE FACT THAT CREDITWORT HINESS AND GENUINENESS OF TRANSACTION WAS NOT PROVED. SIMILARLY, SH ARE APPLICATION MONEY RAISED FROM THREE PERSONS AMOUNTING TO ` .66 LAKHS WAS ADDED BACK TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF THE FA CT THAT GENUINENESS AND CREDITWORTHINESS OF THE PARTIES WAS NOT P ROVED. 5. DISSATISFIED WITH THE ORDER, THE ASSESSEE FILED APPEAL BEFORE LD CIT(A) AND SUBMITTED AS UNDER:- A) THAT LD AR OF THE ASSESSEE HAD FILED CONFIRMATION FROM THE PARTIES RELATING TO SHARE APPLICATION MONEY ON 10.12 .2008 BUT THE SAME WAS NOT CONSIDERED BY THE ASSESSING OFFICER. ITA NO3914/DEL/2010 5 B) THAT COPIES OF BANK ACCOUNT OF THE PARTIES I.E. SMT. PARMINDER KAUR & SHRI SURENDER SINGH BINDRA WERE FILED ON 26. 12.2008 AND THE SAME WERE NOT CONSIDERED. C) THAT NO ADEQUATE OPPORTUNITY WAS GRANTED TO THE ASSESSEE TO FILE EXPLANATION WITH RESPECT TO LOSS OCCURRED ON ACCOUNT O F NON EXECUTION OF ORDER. 6. THE LD AR ALSO FILED APPLICATION UNDER RULE 46A O F THE IT RULES, 1962 FOR FILING ADDITIONAL EVIDENCE AS BELOW:- 1. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF MRS.P ARMINDER KAUR. 2. COPY OF ACCOUNT OF MRS. PARMINDER KAUR IN M/S US TRAD ING CO. 3. COPY OF BANK STATEMENT OF SMT. PARMINDER KAUR. 4. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF SHRI SURENDER SINGH BINDRA. 5. COPY OF BANK STATEMENT OF SHRI SURENDR SINGH BINDRA. 6. CONFIRMATION FROM M/S VINAYAK FIN & INVESTMENT (P) LT D. 7. THE LD AR SUBMITTED THAT THOUGH THESE DOCUMENTS WE RE ALREADY FILED WITH THE ASSESSING OFFICER BUT THE ASSESSING OFFICER DID NOT TOOK NOTE OF THEM IN THE ASSESSMENT ORDER. THEREFORE, THE SA ME WERE BEING FILED AS ADDITIONAL EVIDENCE. IN RESPECT OF LOSS OCCURR ED ON ACCOUNT OF NON EXECUTION OF ORDER, THE LD AR SUBMITTED THAT ASSESSE E WAS NOT GIVEN ADEQUATE OPPORTUNITY TO FILE NECESSARY DOCUMENT S IN SUPPORT OF ITS CLAIM. THEREFORE, FOLLOWING DOCUMENTS WERE ALSO FI LED AS ADDITIONAL EVIDENCE UNDER RULE 46A OF IT RULES. 1. COPY OF ACCOUNT. 2. COPY OF BANK STATEMENT. ITA NO3914/DEL/2010 6 3. COPY OF PURCHASE AGREEMENT. 4. COPY OF CONFIRMATION OF AMOUNT PAID. 8. THE LD CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE SSESSING OFFICER VIDE REMAND REPORT DATED 18.11.2009 SUBMITTED THAT ASSESSEE HAD FILED EVIDENCE WITH RESPECT O F EXISTING ALL PARTIES ALONG WITH CONFIRMATION SO APPLYING THE RATIO OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS, THERE W AS NO NEED TO MAKE ENQUIRY AT OUR END BUT TO FORWARD THE INFORMAT ION TO THE ASSESSING OFFICER OF THEIR JURISDICTIONS. REGARDING ACCEP TANCE OF UNSECURED LOAN FROM TWO PARTIES, THE ASSESSING OFFICER SU BMITTED THAT THESE PERSONS ARE NOT ASSESSED IN NEW DELHI, THEREFORE, HE HAD TO WRITE A LETTER TO THEIR RESPECTIVE ASSESSING OFFICERS. THE LD CIT(A) REJECTED THE REMAND REPORT AND PROCEEDED TO EXAMINE THE CASE AT HIS OWN ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD CI T(A) OBSERVED THAT IN TOTAL THE ASSESSEE HAD ACCEPTED ` .1.34 CRORE FROM FIVE PERSONS IN THE FORM OF UNSECURED LOAN AND SHARE APPLICATION MON EY AS DETAILED BELOW:- NAME OF THE PARTY SHARE APPLICATION MONEY UNSEC URED LOAN SH. TEJINDER PAL SINGH - 26 LAKHS SH. SURENDER SINGH BINDRA 8 LAKHS 8 LAKHS M/S GATTAPPU CHEMICALS. - 46 LAKHS SMT.PARMINDER KAUR. 8 LAKHS NIL M/S VINAYALK FIN & INVEST MENT (P) LTD. 50 LAKHS NIL 9. THE LD CIT(A) ALSO OBSERVED THAT ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAD ACCEPTED THE UNSECURED LOAN ADVANCE D BY M/S GATTAPPU CHEMICALS (P) LTD. WITHOUT GIVING ANY FINDI NG AND THEREFORE ITA NO3914/DEL/2010 7 THE LD CIT(A) BESIDES CONFIRMING ADDITION OF ASSESSING OF FICER INCREASED THE TOTAL INCOME OF ASSESSEE BY ` .46 LAKHS BEING UNSECURED LOANS FROM M/S GATTAPPU CHEMICALS (P)LTD. WHILE COMPL ETING THE APPELLATE PROCEEDINGS, THE LD CIT(A) HIMSELF SENT SUMMO NS TO FOUR PERSONS NAMELY SH. TEJHINDER PAL SINGH, SMT. PARMINDE R KAUR, SHRI SURENDER SINGH BINDRA OF HALDWANI AND SHRI SS BINDR A OF KALKAJI, NEW DELHI, VIDE SUMMON DATED 12.8.2009. THE SUMMON OF SHR I SS BINDRA WAS RETURNED UN-SERVED WITH THE POSTAL REMARKS THAT PA RTY HAD LEFT. NONE OF THE PARTY APPEARED BEFORE LD CIT(A) DESPITE OF THE FACT THAT LD AR WAS ASKED TO BE PRESENT FOR CROSS EXAMINATION OF WIT NESSES VIDE ORDER SHEET ENTRY DATED 12.8.2009. AGAIN LD AR WAS R EQUESTED TO PRODUCE WITNESSES ON 17.9.2009 BUT OF NO AVAIL. THE L D CIT(A) THUS OBSERVED THAT THE GENUINENESS AND CREDITWORTHINESS OF TH E PARTIES FROM WHOM UNSECURED LOAN AND SHARE APPLICATION MONEY WAS ACCEPTED WAS NOT PROVED BEFORE ASSESSING OFFICER AS WELL AS BEFORE HIM. THE LD CIT(A) THEN AFTER DISCUSSING A NUMBER OF CASE LAWS UPHEL D THE ADDITION MADE BY THE ASSESSING OFFICER AND IN FACT INCREASED ADD ITION BY A SUM OF ` .46 LAKHS. 10. AS REGARDS THE CLAIM OF ASSESSEE REGARDING NON EXECUT ION OF ORDER, THE LD CIT(A) NOTED THAT NO DOCUMENTARY EVID ENCE IN SUPPORT OF SUCH CLAIM WAS FILED BEFORE ASSESSING OFFICER. HE HELD TH AT IT IS NOT CLEAR AS TO WHAT PROMPTED THE ASSESSEE NOT TO FURNISH DET AIL BEFORE ASSESSING OFFICER WHEN HE WAS ASKED FOR THE SAME AND THE REFORE HE HELD THAT ASSESSING OFFICER HAD PROPERLY APPLIED HIS MIN D BEFORE MAKING DISALLOWANCE. IN VIEW OF THE ABOVE, THE DISALL OWANCE OF LOSS SUFFERED BY ASSESSEE ON ACCOUNT OF NON EXECUTION OF ORD ER WAS ALSO UPHELD. 11. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THIS TRI BUNAL. ITA NO3914/DEL/2010 8 12. AT THE OUTSET, THE LD AR SUBMITTED THAT LD CIT(A ) HAS STEPPED INTO THE SHOES OF THE ASSESSING OFFICER AND HAS NOT GIVEN ANY COHESIVE REASON FOR ENHANCEMENT OF ADDITION BY ` .46 LAKHS. HE FURTHER ARGUED THAT LD CIT(A) REJECTED THE REMAND REPORT ON THE BA SIS THAT ASSESSING OFFICER DID NOT CARRY OUT REMAND PROCEEDINGS PROPERL Y. HE FURTHER SUBMITTED THAT LD CIT(A) SHOULD HAVE CONSIDERED ALL MA TERIAL I.E. SUBMISSIONS/INFORMATION/DOCUMENT WHICH WERE FILED WITH ASSESSING OFFICER AS WELL AS WITH LD CIT(A) IN THE FORM OF ADDI TIONAL EVIDENCE UNDER RULE 46A OF IT RULES, 1962. LD AR FURTHER ARGU ED THAT LD CIT(A) HAS MENTIONED THAT HE HAD CONSIDERED ALL MATERIAL ON RECORD BUT MATERIAL ON RECORD INCLUDES MY SUBMISSIONS, REMAND REPOR T. DOCUMENTS, INCOME TAX RETURN ETC. BUT ALL THESE HAS N OT BEEN CONSIDERED BY HIM. 13. ON THE OTHER HAND, LD DR ARGUED THAT LD CIT(A) S ORDER IS A DETAILED ORDER AND SUBMITTED TILL 2007-08 THESE UNSECU RED LOANS HAVE NOT BEEN REPAID AND ASSESSEE IS NOT HAVING ANY ADDRESS OF DEPOSITORS WHICH IN VIEW OF HUGE SUMS DOES NOT SEEM TO BE POSSIBLE . HE FURTHER ARGUED THAT CONFIRMATIONS FILED BY LD AR ARE OF IDEN TICAL LANGUAGE AND ALL DEPOSITORS HAD AUTHORIZED ONE SINGLE PERSON SHRI UM ESH CHAND TO DELIVER CONFIRMATIONS TO THE OFFICE OF LD CIT(A). IN THIS RESPECT, HE INVITED OUR ATTENTION TO PAGES 78 & 127 OF PAPER BOO K WHERE COPIES OF CONFIRMATION LETTERS WRITTEN BY SHRI TEJINDER PAL SI NGH AND SHRI SURENDER SINGH BINDRA WERE PLACED. HE FURTHER ARGUE D THAT LD ARS RELIANCE ON THE LOVELY EXPORTS (SUPRA) WAS REBUTTED BY NOVA PROMOTERS & FINLEASE PVT. LTD. WHEREIN THE HON'BLE HIGH COURT HAD HELD THAT SPECIFIC FACTS AND CIRCUMSTANCES HAS TO BE SEEN. IN HIS RE JOINDER THE LD AR SUBMITTED THAT IN ALL CASES IF CONFIRMATIONS WERE ID ENTICAL DOES NOT MATTER AS THE DEPOSITORS WERE ASSOCIATES. HE FURTHER CI TED THE CASE LAW OF EXPO GLOBAL INDIA LTD. AND SUBMITTED THAT IN THE ABOVE CASE BOTH ITA NO3914/DEL/2010 9 CASES OF NOVA PROMOTERS & LOVELY EXPORTS WAS CONSIDERED B Y THE HON'BLE HIGH COURT AND THE CASE LAW OF LOVELY EXPORT S WAS FOLLOWED. HE FURTHER ARGUED THAT ENFORCING ATTENDANCE OF DEPO SITORS WAS NOT THE RESPONSIBILITY OF THE ASSESSEE. HE EVEN SUBMITTED THAT HE IS READY TO WITHDRAW CONFIRMATION AS EVEN WITHOUT CONFIRMATIONS CASE OF THE ASSESSEE WAS A FIT CASE WHEREIN THE RATIO OF LOVELY EXPOR T WAS APPLICABLE. THE LD DR SUBMITTED THAT LD AR IS WITHDR AWING CONFIRMATION ONLY BECAUSE THEY ARE NOT IN FAVOUR OF HIS CLIENT. HE FURTHER ARGUED THAT DEPOSITORS WERE CLAIMED TO BE CLO SE RELATIVE/ASSOCIATES OF ASSESSEE AND STILL THEY DID NOT APPE AR BEFORE ASSESSING OFFICER WHICH PROVES THAT THESE LOANS ARE NOT RE PAYABLE. HE CITED THE CASE OF SHRI TEJINDER PAL SINGH WHO HAD A SMALL INCOME AND ARGUED THAT HOW HE CAN DEPOSIT ` .26 LAKHS AS UNSECURED LOAN. IN THIS RESPECT OUR ATTENTION WAS INVITED TO PAGE 29 TO 32 OF PAPER BOOK WHEREIN COPIES OF RETURNS OF INCOME OF SHRI TEJINDER PAL SINGH WAS PLACED. THE LD AR ARGUED THAT THE MONEY DEPOSITED WI TH THE ASSESSEE IN FACT CAME OUT FROM ASSOCIATION OF PERSONS FORMED BY SHRI TEJINDER PAL SINGH ALONG WITH OTHERS AND IN THIS RESPECT HE TO OK US TO PAGE 37 ONWARDS WHEREIN COPY OF RETURN OF AOP, U.S. TRADING CO. SHOWING HUGE INCOME OF ` .74 LAKHS WAS PLACED. AT PAGE 42, DETAILS OF MEMBER WA S ALSO PLACED WHEREIN THE NAME SHRI TEJHINDER PAL SING H WAS AT PAGE 44 AT SL.NO.120. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE F IND THAT ASSESSMENT ORDER RUNNING INTO TWO PAGES WAS FINALIZED WIT HIN A SHORT PERIOD OF FIVE MONTHS. THE NOTICE U/S 142(1) WAS FIRST ISSUED ON 25.7.2008 AGAINST WHICH REPLY WAS FILED BY THE ASSESSEE O N 23.10.2008 AND ORDER WAS FINALIZED ON 26.12.2008. FROM THE ASSESSME NT ORDER AND FROM THE ORDER OF LD CIT(A) IT APPEARS THAT THE ASSESSE E DID NOT ITA NO3914/DEL/2010 10 COOPERATE WITH THE ASSESSING AUTHORITY AND APPELLATE AU THORITY AND ASSESSING OFFICER ALSO DID NOT CARRY OUT SUFFICIENT INVEST IGATION TO MAKE ADDITION. IN THE REMAND REPORT ALSO, THE ASSESSING OFFIC ER HAS TAKEN VERY CASUALLY AND HAS WRITTEN THAT IN VIEW OF LOVELY EXPORTS ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE AND IN VIEW OF FEW PERSONS LIVING OUTSIDE NEW DELHI NO NOTICE CAN BE ISSUE D TO THEM. THOUGH IN THE PAPER BOOK FILED BEFORE US, THE LD AR HAD FILED IT RETURNS, BANK STATEMENTS FROM WHERE CHEQUES WERE ISSUED A ND ALSO CONFIRMATIONS FROM THE PARTIES. FROM THE PERUSAL OF TH E IT RETURNS OF SHRI TEJINDER PAL SINGH, SHRI SURENDER SINGH BINDRA AND SMT. PARMINDER KAUR, IT IS APPARENT THAT ALL THE THREE PERSONS ARE HA VING VERY SMALL INCOME IN THEIR PERSONAL CAPACITY WHICH IN FACT DO N OT PROVE THE CREDITWORTHINESS. HOWEVER, THE LD AR HAD EXPLAINED TH AT MONEY HAD FLOWED FROM ONE M/S U/.S. TRADING CO. WHICH WAS AN AO P AND ALL THE THREE WERE MEMBERS OF THIS AOP. IN THIS RESPECT, ACCOUN T OF M/S U.S TRADING CO. WERE ALSO FILED IN THE PAPER BOOK ALONG WITH NAMES OF MEMBERS. ALL THESE PERSONS APPEAR TO BE MEMBERS OF AOP W HICH ARE AT SL. NO.85,113 AND 120 OF MEMBERS LIST. THE ACCOUNT OF MR. TEJINDER PAL SINGH, SHRI SURENDER SINGH BINDRA AND SMT. PARMINDER KAUR AS APPEARING IN THE BOOKS OF US TRADING CO. ARE PLACED IN THE PAPER BOOK PAGE 37, 88 & 137. THE DEBIT ENTRY IN THE SAID BOOKS OF ACCOUNT OF M/S US TRADING CO. SHOWS WITHDRAWAL OF ` .26 LAKHS, ` .8 LAKHS AND ` .8 LAKHS RESPECTIVELY WHICH WERE TRANSFERRED TO BANK ACCOUNTS O F THE ABOVE SAID PARTIES PLACED AT PAGE 33, 86 AND 135 OF THE PAPER B OOK FROM WHERE THE AMOUNTS SEEMS TO HAVE BEEN GIVEN TO THE ASSESSEE. SIM ILARLY, IN THE BALANCE SHEET OF M/S VINAYAK FIN & INVESTMENT PVT. LTD. PLACED AT PAGE 162 UNDER THE HEADING INVESTMENT AMOUNT OF 50 L AKHS IS SHOWN TO HAVE BEEN INVESTED IN THE ASSESSEE COMPANY. SAME IS TH E CASE WITH ANOTHER INVESTOR I.E. M/S GATTAPPU CHEMICALS (P) LTD. PLACED AT PAGE 176 TO 182 WHEREIN COPY OF ACCOUNT OF ASSESSEE IN THE B OOKS OF ITA NO3914/DEL/2010 11 INVESTOR AS WELL AS COPIES OF BANK ACCOUNT FROM WHERE MONEY HAD FLOWED INTO BANK ACCOUNT OF THE ASSESSEE ARE PLACED. 15. IN VIEW OF THE ABOVE FACTS, WE HAVE OBSERVED THAT ON THE ONE HAND ASSESSEE HAD NOT EXTENDED FULL COOPERATION TO THE ASSESSING OFFICER AND ASSESSING OFFICER AS WELL AS LD CIT(A) HAD N OT MADE ANY EFFORTS TO CONSIDER THE SUBMISSIONS MADE BY THE ASSESSEE WHER EIN IT HAD TRIED TO EXPLAIN THE SOURCE OF FUNDS. THEREFORE, WE ARE OF THE OPINION THAT KEEPING IN VIEW THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE CASE OF THE ASSESSEE BE RE-ADJUDICATED BY THE ASSESSING OFFICER AFRESH. HE IS DIRECTED TO TAKE NECESSARY STEPS AVAILABLE AS PER LAW TO VERIFY THE ENTRIES AND FIND GENUINENESS AND CREDITWOR THINESS OF INVESTORS TO ARRIVE AT A CORRECT CONCLUSION. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. 17. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DAY OF SEPTEMBER, 2012. SD/- SD/- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 28.9.2012. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER ITA NO3914/DEL/2010 12 (ITAT, NEW DELHI). DATE OF HEARING 9.8.2012 DATE OF DICTATION 24.9.2012 DATE OF TYPING 25.9.2012 DATE OF ORDER SIGNED BY 28.9.2012 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 28.9.2012 & SENT TO THE BENCH CONCERNED.