DCIT, New Delhi V. M/s Bansal Credits Ltd., Delhi

ITA 3918/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7163 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 20-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Unexplained cash credit; Retraction
• Section: 133A; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 3918/DEL/2013 3918/DEL/2013 3918/DEL/2013 3918/DEL/2013 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2010 2010 2010 2010 - -- - 11 1111 11 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2(1), 2(1), 2(1), 2(1), NEW DE NEW DE NEW DE NEW DELHI. LHI. LHI. LHI. VS. VS. VS. VS. M/S BANSAL CREDITS LIMITED, M/S BANSAL CREDITS LIMITED, M/S BANSAL CREDITS LIMITED, M/S BANSAL CREDITS LIMITED, NO.1, ANSARI ROAD, 2 NO.1, ANSARI ROAD, 2 NO.1, ANSARI ROAD, 2 NO.1, ANSARI ROAD, 2 ND NDND ND FLOOR, FLOOR, FLOOR, FLOOR, ABOVE ALLAHABAD BANK, ABOVE ALLAHABAD BANK, ABOVE ALLAHABAD BANK, ABOVE ALLAHABAD BANK, DARYA GANJ, DARYA GANJ, DARYA GANJ, DARYA GANJ, DELHI DELHI DELHI DELHI 110 002. 110 002. 110 002. 110 002. PAN : AAACB1312M. PAN : AAACB1312M. PAN : AAACB1312M. PAN : AAACB1312M. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. JAIN, DR. RESPONDENT BY : SHRI AJAY WADHWA, ADVOCAT E. DATE OF HEARING : 17.08.2016 17.08.2016 17.08.2016 17.08.2016 DATE OF PRONOUNCEMENT : 19.09.2016 19.09.2016 19.09.2016 19.09.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-V, NEW DELHI DATED 5 TH APRIL, 2013. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER:- THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING THE ADDITION MADE ON ACCOUNT OF ADDITIONAL INCOME OF RS.3,50,00,000/- DECLARED IN THE COURSE OF SURVEY U /S 133A ON OATH. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMP ANY IS ENGAGED IN THE BUSINESS OF FINANCING OF AUTOMOBILES AND ALL IED THROUGH LOAN CUM HYPOTHECATION MODE. THE COMPANY RAISED FUNDS THROU GH SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES AND FIXED DEP OSITS FROM ITS ITA-3918/DEL/2013 2 INVESTORS. THERE WAS SURVEY U/S 133A OF THE INCOME -TAX ACT, 1961 AT THE ASSESSEES BUSINESS PREMISES ON 5 TH NOVEMBER, 2009. DURING THE COURSE OF SURVEY, SHRI KANWAL AGGARWAL, DIRECTOR OF THE COMPANY WAS SHOWN THE LIST OF SECURED REDEEMABLE NON CONVERTIBL E DEBENTURES AND HE WAS ASKED TO PROVIDE EVIDENCE OF GENUINENESS OF THESE DEBENTURES AND FULL DETAILS CONCERNING THESE TRANSACTIONS. SH RI KANWAL AGGARWAL REPLIED THAT HE IS UNABLE TO PROVIDE NECESSARY EVID ENCE REGARDING GENUINENESS OF DEBENTURES SUBSCRIBED BY CERTAIN PAR TIES. THEREAFTER, HE WAS ASKED TO IDENTIFY THE PARTIES IN RESPECT OF WHOM HE IS UNABLE TO EXPLAIN THE GENUINENESS, IN RESPONSE TO WHICH, SHRI KANWAL AGGARWAL SURRENDERED THE SUM OF `2,85,18,000/-. ANOTHER LIS T WAS SHOWN TO SHRI KANWAL AGGARWAL AND HE ALSO SURRENDERED THE SUM OF `24,66,715/- IN RESPECT OF UNSECURED LOAN IN THE SAID LIST. HE FUR THER SURRENDERED THE SUM OF `40,15,285/- AS ADDITIONAL INCOME. THUS, TH E TOTAL INCOME OF `3,50,00,000/- (`2,85,18,000 + 24,66,715 + 40,15,28 5) WAS SURRENDERED BY HIM. THE ASSESSEE RETRACTED THE SUR RENDER MADE BY HIM VIDE LETTER DATED 7 TH SEPTEMBER, 2010 WHICH WAS SUBMITTED ON 8 TH SEPTEMBER, 2010. SOON THEREAFTER, THE ASSESSEE FIL ED THE RETURN OF INCOME ON 13 TH OCTOBER, 2010 IN WHICH THE INCOME SURRENDERED DURI NG THE COURSE OF SURVEY WAS NOT DISCLOSED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE REPRESENTATIVE OF THE ASSESSEE COMPANY TO PROVIDE N AMES AND DETAILS OF ACCOUNT HOLDERS, IN RESPONSE TO WHICH, THE ASSES SEE PRODUCED VOLUMINOUS DETAILS AND EVIDENCES RUNNING INTO MORE THAN 7,000 PAGES. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SOME OF THE DEBENTURE HOLDERS AND DEPOSITORS. HOWEVER, THE ASS ESSEE COULD NOT PRODUCE ANY OF THEM. IN VIEW OF THE ABOVE, THE ASS ESSING OFFICER MADE THE ADDITION OF `3,50,00,000/- AS UNEXPLAINED CREDI T U/S 68. ON APPEAL, LEARNED CIT(A) NOTICED THAT OUT OF THE CREDIT IN TH E ASSESSEES BOOKS OF ACCOUNT, THE CREDIT TO THE EXTENT OF `1,28,39,715/- WAS NOT RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HE ALSO N OTICED THAT THE ASSESSEE DULY DISCHARGED THE ONUS WHICH LAY UPON IT U/S 68 BY ITA-3918/DEL/2013 3 PRODUCING THE VARIOUS DOCUMENTS WHICH WERE IN THE N ATURE OF APPLICATION FORM, KYC DOCUMENTS, PROOF OF IDENTITY ETC. HE ALSO RECORDED THE FINDING THESE DOCUMENTS CONTAIN FULL EVIDENCE OF EACH AND EVERY DEPOSITOR. AFTER CONSIDERING THESE FACT S AND EVIDENCES, LEARNED CIT(A) FOUND THAT THE ASSESSEE HAS DULY DIS CHARGED THE ONUS OF PROVING THE CASH CREDIT U/S 68. ACCORDINGLY, HE DE LETED THE ADDITION OF `3,50,00,000/-. THE REVENUE, AGGRIEVED WITH THE OR DER OF THE CIT(A), IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED DR THAT THE DATE OF SURVEY WAS 5 TH NOVEMBER, 2009 WHILE THE RETRACTION IS MADE BY THE ASSESSEE ON 7 TH SEPTEMBER, 2010 WHICH WAS ALMOST MORE THAN 10 MONTHS FROM THE DATE OF SURVEY. THAT SUCH A LONG GAP ITSELF PROVES THAT THE RETRACTION WAS AN AFTER-THOU GHT AND SHOULD NOT BE GIVEN UNDUE WEIGHTAGE. HE STATED THAT THE ASSESSEE MADE A VOLUNTARY SURRENDER OF THE INCOME DURING THE COURSE OF SURVEY BECAUSE THE ASSESSEE WAS UNABLE TO PROVE THE HUGE CREDIT LYING IN ITS BOOKS OF ACCOUNT. HE, THEREFORE, SUBMITTED THAT THE ORDER O F LEARNED CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICE R MAY BE RESTORED. 5. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STATED THAT THE SURRENDER WAS MADE BY THE ASSESSEE UNDER COERCI ON AND PRESSURE OF THE DEPARTMENT. HE SUBMITTED THAT THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF MORE THAN 3,000 CREDITORS AT THE TIME OF RECORDING OF THE STATEMENT. IT IS IMPOSSIBLE TO EX PLAIN BY ANYBODY THE GENUINENESS OF CREDIT OF 3,000 PERSONS INSTANTLY DU RING THE COURSE OF RECORDING OF THE STATEMENT. THEREFORE, THE DIRECTO R OF THE ASSESSEE COMPANY STATED THAT HE IS UNABLE TO EXPLAIN THE GEN UINENESS OF CREDIT OF ALL THE PERSONS IMMEDIATELY AND THEN HE WAS FORC ED TO MAKE THE SURRENDER. THEREFORE, THE SURRENDER WAS RETRACTED BY FILING OF LETTER AS WELL AS BY NOT OFFERING THE INCOME IN THE RETURN OF INCOME. HE FURTHER STATED THAT HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. ITA-3918/DEL/2013 4 DHINGRA METAL WORKS [2010] 328 ITR 324 (DELHI) ST ATED THAT THE STATEMENT RECORDED U/S 133A IS NOT CONCLUSIVE AND T HE ADDITION CANNOT BE BASED UPON THE STATEMENT. SIMILAR VIEW WAS EXPR ESSED BY HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. S. KHADER KHAN SON [2008] 300 ITR 157 (MADRAS). THE DECISION OF HONBLE MADR AS HIGH COURT IS APPROVED BY HONBLE APEX COURT IN [2012] 254 CTR 22 8 (SC). HE FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSEE PRODUCED ALL THE EVIDENCES IN SUPPORT OF THE GENUINENESS OF CREDIT. THE EVIDENCES PRODUCED BY THE ASSESSEE WERE MORE THAN 7,000 PAGES. THE ASSESSING OFFICER, THOUGH ACKNOWL EDGED THE PRODUCTION OF EVIDENCES, BUT SIMPLY REJECTED BY MEN TIONING THAT I DO NOT FIND ANY FORCE IN THEM. HE STATED THAT THE AS SESSING OFFICER MADE THE ADDITION OF `3,50,00,000/- FOR UNEXPLAINED CRED IT U/S 68. THAT OBVIOUSLY AS PER STATEMENT ALSO, THE SUM OF `40,15, 285/- WAS NOT IN RESPECT OF ANY CREDIT. MOREOVER, OUT OF THE CREDIT OF `24,66,715/- PLUS `2,85,18,000/-, THE CREDIT OF `1,28,39,715/- WAS NO T PERTAINING TO THE YEAR UNDER CONSIDERATION. THUS, THE ASSESSING OFFI CER HAS MADE THE ADDITION WITHOUT ANY APPLICATION OF MIND SIMPLY ON THE BASIS OF SURRENDER MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY. THAT THE CBDT ALSO IN ITS CIRCULAR DATED 10 TH MARCH, 2003 HAS STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER SHOULD RELY UPON THE EVIDENCES GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATION AND THEN ONLY, THE RELEVANT ASSESSMENT SH OULD BE FRAMED. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE SUSTAINED. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. TH OUGH THE ASSESSING OFFICER HAS MADE THE ADDITION OF `3,50,00 ,000/- AS UNEXPLAINED CREDIT U/S 68, APPARENTLY, HE HAS MADE THE ADDITION BECAUSE OF THE SURRENDER MADE BY THE ASSESSEE DURIN G THE COURSE OF SURVEY U/S 133A. THE ASSESSING OFFICER HIMSELF HAS SUMMARIZED THE ITA-3918/DEL/2013 5 SURRENDER MADE BY THE ASSESSEE AT PAGE 3 OF THE ASS ESSMENT ORDER WHICH IS REPRODUCED BELOW FOR READY REFERENCE :- TO SUMMARIZE THE TOTAL SURRENDER MADE IN RESPECT O F M/S BANSAL CREDITS LTD. IS GIVEN AS BELOW :- S.NO. HEAD AMOUNT F.Y. 1. UNSECURED LOANS (UNEXPLAINED) RS.24,66,715/- 200 9-10 2. UNEXPLAINED DEBENTURES RS.2,85,18,000/- 2009-10 3. BUFFER RS.40,15,285/- 2009-10 7. FROM THE ABOVE, IT IS EVIDENT THAT OBVIOUSLY, TH E SURRENDER OF `40,15,285/- WAS NOT IN RESPECT OF CASH CREDIT AND, THEREFORE, THE SAME COULD NOT HAVE BEEN ADDED U/S 68. MOREOVER, LEARNE D CIT(A) HAS RECORDED THE FINDING THAT CREDIT TO THE EXTENT OF ` 1,28,39,715/- WAS NOT PERTAINING TO THE YEAR UNDER CONSIDERATION AND, THE REFORE, THE SAME COULD NOT HAVE BEEN ADDED U/S 68. THE ASSESSING OF FICER HAS RECORDED THAT THE ASSESSEE HAS FURNISHED VARIOUS LETTERS EXP LAINING THE GENUINENESS OF CREDIT. HOWEVER, WITHOUT DISCUSSING ANY OF THE LETTERS, HE JUST MENTIONED THAT THERE IS NO FORCE IN IT. IF THE ASSESSEE HAS FURNISHED MORE THAN 7,000 PAGES OF VARIOUS DOCUMENT S PROVING THE CASH CREDIT, THERE WAS HARDLY ANY JUSTIFICATION TO REJECT ALL OF THEM WITHOUT DEALING WITH ANY OF THEM. TOTALITY OF THES E FACTS CLEARLY SHOWS THAT THE ASSESSING OFFICER MADE THE ADDITION BECAUS E THE SURRENDER WAS MADE BY THE ASSESSEE DURING THE COURSE OF SURVE Y. WITH THIS, WE COME TO THE LEGAL POSITION WHETHER THE ADDITION CAN BE BASED SOLELY ON THE SURRENDER MADE DURING THE COURSE OF SURVEY. WE FIND THAT HON'BLE JURISDICTIONAL HIGH COURT HAS CONSIDERED THIS ISSUE IN THE CASE OF DHINGRA METAL WORKS (SUPRA) WHEREIN HON'BLE JURISDI CTIONAL HIGH COURT, UPHOLDING THE DECISION OF ITAT, HELD AS UNDER:- HELD, DISMISSING THE APPEAL, THAT FOR A STATEMENT TO HAVE EVIDENTIARY VALUE, THE SURVEY OFFICER SHOULD HAVE B EEN AUTHORISED TO ADMINISTER AN OATH AND TO RECORD A SW ORN STATEMENT. WHILE SECTION 132(4) OF THE ACT SPECIFI CALLY AUTHORIZES AN OFFICER TO EXAMINE A PERSON ON OATH, SECTION 133A DID NOT PERMIT THE SAME. MOREOVER, THE WORD MAY ITA-3918/DEL/2013 6 USED IN SECTION 133A(3)(III) OF THE ACT CLARIFIES B EYOND DOUBT THAT THE MATERIAL COLLECTED AND THE STATEMENT RECORDED DURING THE SURVEY WAS NOT A CONCLUSIVE PIE CE OF EVIDENCE BY ITSELF. IT WAS SETTLED LAW THAT THOUGH AN ADMISSION WAS AN EXTREMELY IMPORTANT PIECE OF EVIDE NCE, IT COULD NOT BE SAID TO BE CONCLUSIVE AND IT WAS OP EN TO THE PERSON WHO HAD MADE THE ADMISSION TO SHOW THAT IT W AS INCORRECT. SINCE THE ASSESSEE HAD BEEN ABLE TO EXP LAIN THE DISCREPANCY IN THE STOCK FOUND DURING THE COURSE OF SURVEY BY PRODUCTION OF RELEVANT RECORD INCLUDING THE EXCI SE REGISTER OF ITS ASSOCIATE COMPANY, THE ASSESSING OF FICER COULD NOT HAVE MADE THE ADDITION SOLELY ON THE BASI S OF THE STATEMENT MADE ON BEHALF OF THE ASSESSEE DURING THE COURSE OF SURVEY. 8. THE RATIO OF THE ABOVE DECISION WOULD BE SQUAREL Y APPLICABLE TO THE FACTS UNDER APPEAL BECAUSE IN THE CASE UNDER AP PEAL BEFORE US ALSO, THE STATEMENT WAS RECORDED U/S 133A AND NOT U /S 132(4) AND MOREOVER, THE ASSESSEE HAS FURNISHED VOLUMINOUS EVI DENCES TO DISCHARGE THE ONUS OF PROVING THE CASH CREDIT U/S 6 8. THE ASSESSING OFFICER HAS NOT SPECIFIED A SINGLE CREDIT WHICH IS TO BE TREATED AS UNEXPLAINED. IN THE CASE OF S. KHADER KHAN SON (SU PRA), HONBLE MADRAS HIGH COURT HELD :- DISMISSING THE APPEAL, THAT IN VIEW OF THE SCOPE A ND AMBIT OF THE MATERIALS COLLECTED DURING THE COURSE OF SURVEY ACTION UNDER SECTION 133A SHALL NOT HAVE ANY EVIDENTIARY VALUE. IT COULD NOT BE SAID SOLELY ON THE BASIS OF THE STATEMENT GIVEN BY ONE OF THE PARTNERS OF TH E ASSESSEE-FIRM THAT THE DISCLOSED INCOME WAS ASSESSA BLE AS LAWFUL INCOME OF THE ASSESSEE. 9. THAT THE ABOVE DECISION OF HONBLE MADRAS HIGH C OURT HAS BEEN APPROVED BY HONBLE APEX COURT IN [2012] 254 CTR 22 8 (SC). THAT CBDT ALSO IN ITS LETTER F.NO.286/2/2003-IT(INV.II) DATED 10 TH MARCH, 2003 PROVIDED AS UNDER :- INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED T O CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE ITA-3918/DEL/2013 7 SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFE SSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETR ACTED BY THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INC OME. IN THESE CIRCUMSTANCES, CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THE RE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENC E OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT B EEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE T HE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEM ENT DURING THE COURSE OF SEARCH, SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDERS. 10. THUS, EVEN AS PER CBDT, THE ADDITION SHOULD BE BASED UPON THE EVIDENCES/MATERIAL GATHERED DURING THE COURSE OF SE ARCH/SURVEY RATHER ON THE BASIS OF STATEMENT RECORDED DURING THE COURS E OF SURVEY. ADMITTEDLY, IN THIS CASE, NO MATERIAL WAS COLLECTED DURING THE COURSE OF SURVEY WHICH COULD ESTABLISH THAT THE CREDIT WAS NO N-GENUINE. LEARNED CIT(A) HAS RECORDED THE FINDING THAT THE ASSESSEE H AS TAKEN THE SMALL CREDITS OF BELOW `20,000/- FROM VARIOUS PERSONS. H OWEVER, AS PER KYC DOCUMENTS PRESCRIBED BY THE RBI, PAN CARD OR RATION CARD OR VOTER ID ETC. WERE OBTAINED IN RESPECT OF EACH AND EVERY DEP OSITOR AND THE SAME WERE FURNISHED BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAS ALSO PRODUCED THE COPY OF DEBENTURE APPLICATION FOR M AS WELL AS DEBENTURE ALLOTMENT LETTER. DEBENTURE TRUST DEED W AS EXECUTED BY THE COMPANY WITH THE DEBENTURE TRUSTEE TO SECURE AND PR OTECT THE INTEREST OF THE DEBENTURE HOLDERS WHO ARE SMALL INVESTORS. HE HAS ALSO PRODUCED THE DEED OF HYPOTHECATION FOR HYPOTHECATIN G MOVABLE ASSETS AND RECEIVABLE THEREON OF THE COMPANY IN FAVOUR OF THE TRUSTEE AS PER DEBENTURE TRUST DEED. LEARNED CIT(A) HAS DISCUSSED ALL THESE DOCUMENTS IN DETAIL FROM PAGES 5 TO 17 OF HIS ORDER AND THEREAFTER ITA-3918/DEL/2013 8 ARRIVED AT THE CONCLUSION FROM ALL THESE DOCUMENTS REQUISITE INGREDIENTS OF SECTION 68 ARE DULY FULFILLED, GENUI NENESS OF THE DEBENTURE AMOUNTS AND FIXED DEPOSIT AMOUNTS IS DULY ESTABLISHED AND IT CAN BE SAID THAT THE ASSESSEE HAS DISCHARGED ITS PRIMARY BURDEN UNDER THE LAW. AFTER CONSIDERING THE FACTS AND AR GUMENTS OF BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ABOVE FI NDING OF LEARNED CIT(A). THERE WAS A CREDIT IN THE ASSESSEES BOOKS OF ACCOUNT OF SMALL AMOUNTS OF BELOW `20,000/- EACH FROM MORE THAN 3,00 0 PERSONS. THE ASSESSEE HAS FURNISHED NECESSARY EVIDENCES IN RESPE CT OF THOSE CREDITORS, WHICH WAS MORE THAN 7,000 PAGES. THE AS SESSING OFFICER ACKNOWLEDGED THE FURNISHING OF THOSE EVIDENCES BUT REJECTED THEM SUMMARILY WITH THE FOLLOWING FINDING :- IN RESPONSE THE ASSESSEE COMPANY HAS FILED VARIOUS LETTERS EXPLAINING THE GENUINENESS OF THE CREDITS. I HAVE GONE THROUGH THE REPLIES BUT DO NOT FIND ANY FORCE IN THEM. 11. THUS, THE ASSESSING OFFICER, WITHOUT DISCUSSING THE CASE OF A SINGLE CREDITOR, REJECTED ALL OF THEM. LEARNED CIT (A) HAS DISCUSSED ALL THOSE DOCUMENTS FROM PAGE 5 TO 17 OF HIS ORDER. TH E ASSESSING OFFICER MADE THE ADDITION OF `3,50,00,000/- AS UNEXPLAINED CREDIT U/S 68 WHEN ADMITTEDLY, THE SUM OF `3,50,00,000/- WAS THE SURRE NDER MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY AND WAS NOT TH E AMOUNT OF CREDIT IN THE ASSESSEES BOOKS OF ACCOUNT. CREDIT IN THE ASSESSEES BOOKS OF ACCOUNT WAS ONLY `3,09,84,715/-. LEARNED CIT(A) HA S ALSO RECORDED THE FINDING THAT THE CREDIT TO THE EXTENT OF `1,28,39,7 15/- WAS NOT PERTAINING TO THE YEAR UNDER CONSIDERATION. THUS, IT IS EVIDENT THAT THE ASSESSING OFFICER MADE THE ADDITION WITHOUT CONSIDE RING ALL THE FACTS AND EVIDENCES ON RECORD MERELY BECAUSE THE ASSESSEE HAS SURRENDERED THE SAME AT THE TIME OF SEARCH. WE HAV E ALREADY DISCUSSED THAT IN VIEW OF THE DECISION OF HON'BLE J URISDICTIONAL HIGH COURT IN THE CASE OF DHINGRA METAL WORKS (SUPRA) AN D OF HONBLE APEX COURT IN THE CASE OF S. KHADER KHAN SON (SUPRA) AS WELL THE CIRCULAR OF ITA-3918/DEL/2013 9 CBDT VIDE LETTER F.NO.286/2/2003-IT(INV.II) DATED 1 0 TH MARCH, 2003, THE ADDITION CANNOT BE MADE ONLY ON THE BASIS OF SURREN DER MADE AT THE TIME OF SURVEY. IN VIEW OF THE ABOVE LEGAL AND FAC TUAL POSITION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT( A). ACCORDINGLY, THE SAME IS UPHELD AND REVENUES APPEAL IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 19.09.2016 . SD/- SD/- (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TA X, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2(1), NEW DELHI. 2(1), NEW DELHI. 2(1), NEW DELHI. 2(1), NEW DELHI. 2. RESPONDENT : M/S BANSAL CREDITS LIMITED, M/S BANSAL CREDITS LIMITED, M/S BANSAL CREDITS LIMITED, M/S BANSAL CREDITS LIMITED, NO.1, ANSARI ROAD, 2 NO.1, ANSARI ROAD, 2 NO.1, ANSARI ROAD, 2 NO.1, ANSARI ROAD, 2 ND NDND ND FLOOR, FLOOR, FLOOR, FLOOR, ABOVE ALLAHABAD BANK, DARYA GANJ, ABOVE ALLAHABAD BANK, DARYA GANJ, ABOVE ALLAHABAD BANK, DARYA GANJ, ABOVE ALLAHABAD BANK, DARYA GANJ, DELHI DELHI DELHI DELHI 110 002. 110 002. 110 002. 110 002. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR