Hem Deep Organics Pvt.Ltd., Ahmedabad V. The Dy.CIT.,Bharuch Circle, Bharuch

ITA 4057/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6118 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 31-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 16-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: U S BHATI
• Keywords: Unexplained cash credit; Gift; Business income; Salary income; Source of fund; Question of law; Assessment record
• Section: 260A; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING: 31.05.2010 DRAFTED ON:31.05.2 010 ITA NO.4057/AHD/2008 ASSESSMENT YEAR : 2005-2006 HEM DEEP ORGANICS PRIVATE LIMITED, PLOT NO.3801/2, GIDC, ANKLESHWAR. C/O. M/S. RAVI & DEV, CHARTERED ACCOUNTANTS, 201, ARTH, BEHIND A.K.PATEL HOUSE, MITHAKALIJ SIX ROADS, AHMEDABAD-380 009. VS. DY. COMMISSIONER OF INCOME TAX, BHARUCH CIRCLE, BHARUCH. PAN/GIR NO. : AAACH4734K (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI U.S.BHATI, A.R. RESPONDENT BY: SHRI C.K.MISHRA, SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-VI, BAR ODA, DATED 10.10.2008. 2. GROUNDS OF THE APPEAL READS AS UNDER:- 1.0. THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS TO THE EXT ENT OF RS.37,08,344/- OUT OF TOTAL ADDITIONS OF RS.50,72,1 36/- MADE BY THE ASSESSING OFFICER U/S.68 OF THE INCOME TAX ACT, 196 1. 2.0. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) FURTHER ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT TH AT THE APPELLANT COMPANY HAD FURNISHED ALL THE NECESSARY PARTICULARS FOR DISCHARGING THE ONUS OF PROVING THE GENUINENESS OF ALL THE CRED ITORS BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE LD. CIT(APPEA LS) AND THAT - 2 - THE ONUS HAD THEN SHIFTED TO THE ASSESSING OFFICER TO SHOW WITH EVIDENCE THAT CASH CREDITORS WERE NOT IN POSITION T O DEPOSIT THE AMOUNTS. 3.0. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) HAD THEREFORE, ERRED IN CONFIRMING THE PART OF THE ADDITIONS MADE BY THE ASSESSING OFFICER. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS HELD AS UNDER:- 4. THE ONLY EFFECTIVE GROUND OF APPEAL IS AGAINST ADDITION OF RS.50,72,136/- U/S 68. 4.1. ON VERIFICATION OF THE BALANCE SHEET, THE ASSE SSEE WAS ASKED TO ESTABLISH THE GENUINENESS OF THE FOLLOWING CASH CRE DITORS; SR. NO. NAME DEPOSIT AMOUNT 1. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 BHADRESHBHAI D PATEL PRAVINABEN B PATEL DINESHBHAI K PATEL NAYNA/NIMUBEN D PATEL GAGARAMBHAI D PATEL JYOSTANABEN S PATEL KARAMSHIBHAI D PATEL NARENDRABHAI R PATEL MAHESHBHAI B PATEL MAGANBHAI K PATEL MAHENDRABHAI M PATEL SAROJBEN M. PATEL PRAKASH M. PATEL DAMYANTIBEN P. PATEL ATULBHAI M. JANI 177632 177632 251632 282632 192632 342632 664264 371632 192632 367632 534640 584140 412964 419440 100000 TOTAL 5072136 4.1.1. IN RESPONSE THERETO THE ASSESSEE SUBMITTED T HE BANK STATEMENTS OF THE CREDITORS AND IN SOME CASES THE C OPY OF RETURN OF INCOME. FURTHER, IT IS NOTICED BY THE A.O. THAT THE MOST OF DEPOSITORS ARE AGRICULTURISTS AND IN RESPECT OF THE M THE DETAILS OF AGRICULTURAL INCOME, EXPENSES, HOUSEHOLD EXPENSES, SAVINGS ETC. WERE CALLED FOR. IT IS ALSO NOTED BY THE A.O. THAT IN THE BANK ACCOUNT OF THE DEPOSITORS THERE WERE CASH DEPOSITS PRIOR TO ISSUANCE OF CHEQUE TO THE ASSESSEE FIRM; THESE DETAILS ARE TABU LATED ON PAGES-6 TO 8 OF THE ASSESSMENT ORDER. SINCE THE COMPLETE IN FORMATION WAS NOT PROVIDED, THE A.O. AFTER DETAILED ANALYSIS INDI CATED AT PAGES 8 TO 18 OF THE ASSESSMENT ORDER CONCLUDED THAT THE CA SH CREDITS WERE - 3 - NOT GENUINE AND ADDED RS.5072136/- IN RESPECT TO TH E 15 CASH CREDITORS U/S 68. 4.2. IN APPEAL, IT IS STATED THAT THE APPELLANT COM PANY WAS INCORPORATED AS A PRIVATE LIMITED COMPANY IN THE YE AR 1997 UNDER THE COMPANIES ACT, 1956 AND LATER ON IN THE YEAR 20 04 THE SAME WAS ACQUIRED BY THE PRESENT GROUP OF DIRECTORS AND THEIR FRIENDS AND RELATIVES AFTER BUYING THE 96000 SHARES FROM TH E PROMOTERS. TILL THAT TIME, THE BUSINESS OF THE COMPANY DID NOT COMM ENCE. SHRI PRAKASH M. PATEL AND SHRI MAHENDRA M. PATEL ARE PRE SENTLY MANAGING THE AFFAIRS OF THE APPELLANT COMPANY IN TH E CAPACITY OF THE DIRECTORS. IMMEDIATELY, AFTER ACQUISITION OF TH E COMPANY, THE PRESENT MANAGEMENT IN ORDER TO COMMENCE BUSINESS OF THE APPELLANT COMPANY, RAISED LOANS FROM THE THEN SHARE HOLDERS OF THE COMPANY DURING THE FINANCIAL YEAR 2004-05 I.E. PERI OD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. AT THE REQ UEST OF THE MANAGEMENT OF THE APPELLANT COMPANY, FIFTEEN SHAREH OLDERS INCLUDING DIRECTORS HAD ADVANCED INTEREST FREE LOAN S AMOUNTING TO RS.50,72,136/- TO THE COMPANY. 4.2.1. IT IS SUBMITTED THAT DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS, THE ID. A.O. HAD ASKED FOR DETAILS OF THESE LOANS AND THE APPELLANT COMPANY HAD FURNISHED ALL NECESSARY D ETAILS TO THE ID. A.O. CONSISTING OF NAMES, ADDRESSES, PAN (OUT OF FI FTEEN, IN ELEVEN CASES WHERE PERMANENT ACCOUNT NUMBERS WERE OBTAINED BY THE SHAREHOLDERS, THE SAME WERE FURNISHED), CONFIRMATIO NS, SOURCES OF INCOME ALONG WITH COPIES OF INCOME TAX RETURNS (WHE RE EVER THE SAME WERE FILED) OTHERWISE COPIES OF FORM NO. 6,7/1 2 AND 8A ETC ALONG-WITH BILLS OF AGRICULTURE-PRODUCE SOLD ETC. 4.2.2. IT WAS ALSO SUBMITTED THAT ALL LOANS WERE RE CEIVED BY THE APPELLANT COMPANY THROUGH ACCOUNT PAYEE CHEQUES AND IN THIS CONNECTION COPIES OF BOTH CREDITORS AND COMPANY'S B ANK ACCOUNT WERE FURNISHED BEFORE THE ID. A,O. MOREOVER, IN FEW CASES, EVEN DETAILS OF HOUSE HOLD EXPENSES AND DEPENDENTS OF CR EDITORS WERE ALSO FURNISHED. 4.2.3. IT IS EMPHASIZED THAT THE APPELLANT COMPANY HAS FURNISHED ALL THE POSSIBLE DETAILS AS DISCUSSED ABOVE, BEFORE THE ID. A.O. AS THE TRANSACTIONS WERE THROUGH ACCOUNT PAYEE CHEQUES AND COPIES OF BANK STATEMENTS OF SHAREHOLDERS/CREDITORS WERE FURN ISHED, THE IDENTITY OF CREDITORS, WHO ARE SHAREHOLDERS OF THE APPELLANT COMPANY, ARE ESTABLISHED. FURTHER, OUT OF FIFTEEN C REDITORS, ELEVEN CREDITORS HAVE SUBMITTED THEIR PAN, WHICH ALSO CONF IRMS THE FACT THAT THEY ARE NOT BOGUS PERSONS. IT IS ADDED THAT T HE AMOUNTS OF LOAN RECEIVED BY THE APPELLANT COMPANY ARE REFLECTED IN ITS ANNUAL ACCOUNTS HAVE BEEN DULY CERTIFIED BY THE STATUTORY AUDITORS OF THE - 4 - COMPANY. THEREFORE, THE GENUINENESS OF THE ABOVE LO AN TRANSACTIONS ARE ESTABLISHED. THE APPELLANT FURTHER CONTENDS THAT AS REGARDS THE CREDIT WORTHINESS OF THE CREDITORS, THE APPELLANT COMPANY HAD FURNISHED COPIES OF BANK ACCOUNTS OF TH E CREDITORS BESIDES SOURCES OF THEIR INCOME ETC. AND ALSO FURNI SHED COPIES OF THEIR INCOME TAX RETURNS, DETAILS OF LOANS RAISED B Y THEM, DETAILS OF GIFTS RECEIVED, COPIES OF FORM NO. 6, 7/12 AND 8A E TC. INDICATING THE LAND HOLDINGS BESIDES THE QUALITY OF THE LAND, CROPS CULTIVATED ETC. AS ALSO THE DETAILS ABOUT THEIR HOUSE HOLD EXP ENSES AND NUMBER OF DEPENDENTS ETC. WERE ALSO FILED. 4.2.4. IT IS THUS COMMENTED THAT THE APPELLANT COMP ANY HAD DISCHARGED THE ONUS LAID ON IT UNDER THE DEEMING PR OVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961, BY FURNISHI NG ALL THE DETAILS AND THE BURDEN SHIFTED TO THE A.O. TO ESTAB LISH, IN ORDER TO INVOKE PROVISIONS OF SECTION 68, THAT EITHER THE DE TAILS/EVIDENCE SUBMITTED BY THE APPELLANT COMPANY WERE FALSE OR BR ING ON RECORD SOME EVIDENCE TO THE EFFECT THAT THE APPELLANT COMP ANY HAD ROUTED ITS OWN MONEY THROUGH THESE CREDITORS. IT IS ARGUED THAT IF THE A.O HAD ANY DOUBT ABOUT THEIR CREDITWORTHINESS HE COULD HAVE ASKED THE APPELLANT COMPANY TO PRODUCE THESE CREDITORS, FAILI NG WHICH THE ADDITION U/S 68 IS NOT JUSTIFIED. 4.3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. I HAVE ALSO EXAMINED THE ASSESSMENT RECORDS. MY CONCLUSION IN RESPECT TO EACH OF THE CA SH CREDIT IS DETAILED BELOW: (1) SHRI BHADRESHBHAI D. PATEL (RS.1,77,632/-): REASONS FOR ADDITION BY A.P.: THE CREDITOR HAS DEPOSITED CASH OF RS.40,000/- ON 0 6/12/2004 AND GAVE LOAN OF RS.55,000/- ON 08/12/2004. THE DEPOSIT OR IS HAVING INCOME FROM LIC COMMISSION AND INTEREST & SALARY AN D IS ASSESSED TO TAX AND HIS HOUSEHOLD EXPENSES OF RS.30,000/- P. A. WHICH IS INADEQUATE. SUBMISSIONS OF THE APPELLANT : SHRI BHADRESHBHAI D. PATEL, WHO HAD SUBSCRIBED 2300 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.1,77,632/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH THREE CHEQUES ON DIFFERENT DATES. HIS ADDRESS, PAN, CONFIRMATION AND A COPY OF INCOME TAX RETURN FOR THE A.YR. 2005- 06 WERE ALSO SUBMITTED TO THE A.O. HE DREW INCOME FROM SALARY AN D COMMISSION - 5 - FROM LIC. HIS GROSS RECEIPTS FOR THE FINANCIAL YEAR 2004-05 WERE RS.2,14,789/- AS PER RETURN OF INCOME. HE GOT ONLY TWO DEPENDENTS. THE CASH WAS DEPOSITED IN HIS BANK ACCOUNT OUT OF S ALARY AND PAST SAVINGS. DECISION: FOR A.Y. 2005-06, THE DEPOSITOR HAS RETURNED TOTAL INCOME OF RS.1,84,789/- AND CONSIDERING HIS SOURCE OF INCOME AND FAMILY SIZE IN MY VIEW THE CREDITWORTHINESS IS ESTABLISHED AND THE ADDITION OF RS.1,77,632/- IS DELETED. (2) SMT. PRAVINABEN B. PATEL (RS.1,77,632/-): REASONS FOR ADDITION BY A.O. IN THE ABSENCE OF SOURCE OF INCOME AND DETAILS OF H OUSEHOLD WITHDRAWALS, THE CREDITWORTHINESS IS NOT PROVED. SUBMISSIONS OF THE APPELLANT SMT. PRAVINABEN B PATEL, WHO HAD SUBSCRIBED TO 400 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.1,77,632/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH THREE CHEQUES ON DIFFERENT DATES, HER ADDRESS, PAN, CONFIRMATION AND COPIES OF HER INCOME TAX RETURNS FOR THE A.YRS. 2004-05 AND 2005-06 WERE ALSO SUBMITTED TO THE A.O. SHE DREW IN COME FROM BUSINESS AND HER GROSS RECEIPTS FOR THE FINANCIAL Y EAR 2004-05 WERE RS.1,24,722/-AS PER RETURN OF INCOME FOR THE A.YR. 2005-06. THE CASH WAS DEPOSITED IN HER BANK ACCOUNT OUT OF HER B USINESS RECEIPTS. DECISION: CONSIDERING THE DECLARED SOURCE OF INCOME IN A.YS. 2004-05 AND 2005-06, THE CREDITWORTHINESS STANDS ESTABLISHED AN D THE ADDITION OF RS.1,77,632/- IS DELETED. (3) SHRI DINESHBHAI K. PATEL ( RS.2,51,632/-) : REASONS FOR ADDITION BY A.O. PRIOR TO ISSUANCE OF CHEQUES OF RS.2,51,632/- ON VA RIOUS DATES, THERE WAS CASH DEPOSITS OF RS.2,54,700/- THE DETAIL S REGARDING SALE OF AGRICULTURAL PRODUCE, EXPENSES ETC. WERE NOT PRO DUCED. SUBMISSIONS OF THE APPELLANT SHRI DINESHBHAI K. PATEL, WHO HAD SUBSCRIBED TO 480 0 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.2,51,632/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH - 6 - THREE CHEQUES ON DIFFERENT DATES. HIS ADDRESS, PAN, CONFIRMATION AND COPIES OF INCOME TAX RETURNS FROM THE A.YRS. 20 02-03 TO 2005- 06 WERE ALSO SUBMITTED TO THE A.O. ALONG WITH INCOM E & EXPENDITURE ACCOUNTS AND BALANCE SHEETS. IT MAY BE APPRECIATED THAT INVESTMENT MADE WITH THE APPELLANT COMPANY HAD BEEN DULY REFLECTED IN HIS BALANCE SHEETS. HE DREW INCOME FRO M SALARY AND BUSINESS BESIDES AGRICULTURE. IN HIS RETURN FOR THE A.Y. 2005-06 HE HAD DECLARED NET AGRICULTURAL INCOME OF RS.1,42,913 /-. DECISION: THE DEPOSITOR HAS BEEN DERIVING INCOME AS SHARE OF PROFIT, SALARY AND INTEREST FROM THE FIRM M/S JACKSON CHEMICAL IND USTRIES AND HAS ALSO BEEN DISCLOSING AGRICULTURAL INCOME FOR PAST F EW YEARS FOR A.Y. 2005-06. IN VIEW THEREOF THE CREDITWORTHINESS IS SU BSTANTIATED AND THE ADDITION OF RS.2,51,632/- IS DIRECTED TO BE DEL ETED. (4) SMT. NAYNABEN ALIAS NIMUBEN D. PATEL (RS.2,82,632/- ): REASONS FOR ADDITION BY A.O. THE DEPOSITOR IS SHOWING STICHING INCOME OF RS.40-5 0,000 AND SHE CLAIMED TO HAVE TAKEN LOAN FROM SHRI R.K. RATAL, AG RICULTURIST FOR WHICH NO EVIDENCE WAS FILED. SUBMISSION OF THE APPELLANT SMT. NAYNABEN D. PATEL, WHO HAD SUBSCRIBED TO 4800 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.2,82,632/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH THREE CHEQUES ON DIFFERENT DATES. HER ADDRESS, PAN, CONFIRMATION AND COPIES OF HER INCOME TAX RETURNS FOR THE A.YRS. 2004-05 & 2005-06 WERE ALSO SUBMITTED TO THE A.O. SHE DREW IN COME FROM STITCHING BUSINESS, INTEREST AND HAD RECEIVED GIFTS AND LOANS FROM OTHER PERSONS AS EVIDENT FROM THE BALANCE SHEET AND INCOME EXPENDITURE A/C FILED ALONG-WITH INCOME TAX RETURNS . SHE HAD TAKEN A LOAN OF RS.1,40,000/- FROM HER FATHER, WHO IS HAV ING INCOME FROM AGRICULTURE BESIDES ANOTHER LOAN OF RS.15,000/- FRO M SHRI MANISH J. PATEL. DECISION: I AM IN AGREEMENT WITH THE A.O. THAT IT APPEARS TO BE THE CASE OF CAPITAL FORMATION AND THE SOURCE OF INCOME/LOAN HAV E REMAINED UNSUBSTANTIATED THE ADDITION OF RS.2,82,632/- IS CO NFIRMED. - 7 - (5) SHRI GANGARAMBHAI P. PATEL (RS.1,92,632/-): REASONS FOR ADDITION BY A.O. THE DEPOSITOR IS NOT ASSESSED TO TAX AND IN THE ABS ENCE OF DETAILS OF AGRICULTURAL EXPENSES AND HOUSEHOLD EXPENSES, THE C REDITWORTHINESS IS NOT ESTABLISHED. SUBMISSIONS OF THE APPELLANT SHRI GANGARAMBHAI D. PATEL, AGED 50 YEARS, WHO HAD SUBSCRIBED 4800 SHARES IN THE COMPANY, ON THE REQUEST OF THE C OMPANY HAD ADVANCED A SUM OF RS.1,92,632/- AS A LOAN DURING TH E FINANCIAL YEAR 2004-05 THROUGH THREE CHEQUES ON DIFFERENT DATES. H IS ADDRESS, PAN, CONFIRMATION, HAKKA PATRA IN FORM NO. 6, FORM NO. 7/12 ALONG WITH BILLS OF SALE OF AGRICULTURE-PRODUCE TO THE EXTENT OF RS.2,37,150/- WERE SUBMITTED TO THE A.O. HE EARNED AGRICULTURAL INCOME TO THE EXTENT OF RS.3,50,000/- BESIDES INCOM E FROM SALE OF MILK AMOUNTING TO RS.47,000/- IN RESPECT OF WHICH A CERTIFICATE WAS ALSO PLACED ON RECORD. AS HE IS HAVING ONLY AGRICUL TURAL INCOME THEREFORE HE IS NEITHER REQUIRED TO MAINTAIN ANY RE CORDS NOR REQUIRED TO FILE ANY RETURN OF INCOME. DUE TO ABOVE , HE COULD NOT PRESERVE AND FURNISH ALL BILLS FOR SALE OF AGRICULT URE-PRODUCE. DECISION: BEFORE THE A.O., THE GROSS AGRICULTURAL INCOME WAS SHOWN AT RS.2,36,705/-. THE SAME HAS NOT BEEN CHALLENGED BY THE A.O. CONSIDERING THE ASSURED SOURCE AND EVEN DISCOUNTING FOR EXPENSES, THE CREDITWORTHINESS STANDS ESTABLISHED AND THE ADD ITION OF RS.1,92,632/-IS DIRECTED TO BE DELETED. (5) SMT. JYOSTANABEN S. PATEL (RS.3,42,632/-): REASONS FOR ADDITION BY A.O. RETURNED INCOME FOR A.Y. 2003-04 WAS RS.39,666/- AN D IN THE ABSENCE OF OTHER DETAILS, THE CREDITWORTHINESS IS N OT PROVED. SUBMISSIONS OF THE APPELLANT SMT. JYOSTANABEN S. PATEL, WHO HAD SUBSCRIBED 4800 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.3,42,632/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH FIVE CHEQUES ON DIFFERENT DATES. HER ADDRESS, PAN, CONFIRMATION AND COPY OF HER INCOME TAX RETURN FOR THE A.YR. 200 4-05 WERE ALSO SUBMITTED TO THE A.O. HER RECEIPTS WERE FROM BUSINE SS BESIDES GIFTS RECEIVED BY HER FROM HER FATHER IN LAW AND HUSBAND. - 8 - DECISION: FOR A.Y. 2004-05 AGAIN MEAGRE INCOME OF RS.50,166/- WAS DISCLOSED AND IN THE ABSENCE OF ANY DETAILS OF GIFT S AND THE LOANS NOW CLAIMED IN THE APPELLATE PROCEEDINGS, THE CREDI TWORTHINESS IS NOT SUBSTANTIATED. THE ADDITION OF RS.3,42,632/- IS CONFIRMED. (6) SHRI KARMSHIBHAI D. PATEL (RS.6,64,264/-): REASONS FOR ADDITION BY A.O. NO DETAILS REGARDING THE SOURCE OF DEPOSIT WERE FIL ED. THE SALE BILL OF AGRICULTURAL PRODUCE REFLECTED GROSS INCOME OF R S.1,45,000/- AND OUT OF THESE BILLS, SOME WERE PERTAINING TO EARLIER YEARS. SUBMISSIONS OF THE APPELLANT SHRI KARMSHIBHAI D. PATEL, AGED 65 YEARS, WHO HAD S UBSCRIBED 9600 SHARES IN THE COMPANY, ON THE REQUEST OF THE C OMPANY HAD ADVANCED A SUM OF RS.6,64,264/- AS A LOAN DURING TH E FINANCIAL YEAR 2004-05 THROUGH FIVE CHEQUES ON DIFFERENT DATES. HI S ADDRESS, CONFIRMATION, FORM NO. 7/12 ALONG WITH BILLS OF SAL E OF AGRICULTURE- PRODUCE TO THE EXTENT OF RS.3,68,336/- WERE SUBMITT ED TO THE A.O. HE EARNED AGRICULTURAL INCOME TO THE EXTENT OF RS.8 ,00,000/- AS HE HOLDS AGRICULTURAL LAND TO THE EXTENT OF 7H-40R-59S M AND CULTIVATED CASH CROPS. AS HE IS ENGAGED IN THE AGRI CULTURAL ACTIVITIES AND AGRICULTURAL INCOME IS TAX-FREE, HE IS NOT MAIN TAINING ANY BOOKS OF ACCOUNTS AND ALSO NOT FILING INCOME TAX RETURN. IN VIEW OF THIS, HE COULD NOT PRODUCE ALL THE SALE BILLS OF AGRICULTURE -PRODUCE AS THE SAME WERE NOT PRESERVED METICULOUSLY/SYSTEMATICALLY . DECISION: DURING ASSESSMENT PROCEEDINGS, SALE BILLS OF RS.1,4 5,000/- COULD BE PRODUCED AND SOME OF THEM DID NOT RELATE TO A.Y. 20 05-06. NONE OF THE SALE BILLS PRODUCED DURING APPELLATE PROCEED ING PERTAINS TO A.Y. 2005-06, THE CLAIM OF AGRICULTURAL INCOME OF R S.8 LAKH IS NOT ESTABLISHED. FURTHER, IN THE ABSENCE OF DETAILS OF CASH CROPS GROWN, SALE PROCEEDS, PAST SAVINGS, HOUSEHOLD AND SOCIAL E XPENSES, THE SOURCE OF INVESTMENT IS UNSUBSTANTIATED AND THE ADD ITION OF RS.6,64,264/- IS CONFIRMED. - 9 - (8) SHRI NARENDRABHI R. PATEL (RS.3,71,632/-): REASONS FOR ADDITION BY A.O. THE SALE BILL OF AGRICULTURAL PRODUCE AMOUNTED TO R S.1,60,000/- AND THE INCOME FROM SALE OF MILK IS SHOWN AT RS.88,000/ - AND IN THE ABSENCE OF DETAILS OF CORRESPONDING EXPENSES, THE C REDITWORTHINESS IS NOT PROVED. SUBMISSIONS OF THE APPELLANT SHRI NARENDRABHAI R. PATEL, AGED 42 YEARS, WHO HAD SUBSCRIBED 4300 SHARES IN THE COMPANY, ON THE REQUEST OF THE C OMPANY HAD ADVANCED A SUM OF RS.3,71,632/- AS A LOAN DURING TH E FINANCIAL YEAR 2004-05 THROUGH FOUR CHEQUES ON DIFFERENT DATES. HI S ADDRESS, PAN, CONFIRMATION, HAKKA PATRA IN FORM NO. 6, FORM NO. 7/12 ALONG WITH BILLS OF SALE OF AGRICULTURE-PRODUCE TO THE EXTENT OF RS.4,39,913/- WERE SUBMITTED TO THE A.O. HE EARNED AGRICULTURAL INCOME TO THE EXTENT OF RS.4,50,000/- BESIDES INCOM E FROM SALE OF MILK AMOUNTING TO RS.88,000/- IN RESPECT OF WHICH A CERTIFICATE WAS ALSO PLACED ON RECORD. DECISION: SALE BILL TO THE EXTENT OF RS.3,77,615/- FOR A.Y. 2 005-06 WERE PRODUCED DURING APPELLATE PROCEEDINGS BESIDES SALE BILL FOR MILK OF RS.88,000/-. CONSIDERING THE EVIDENCES FURNISHED, T HE CREDITWORTHINESS IS ESTABLISHED AND THE ADDITION OF RS.3,71,632/- IS DIRECTED TO BE DELETED. (9) SHRI MAHESHBHAI B. PATEL (1,92,632/-): REASONS FOR ADDITION BY A.O. IN THE ABSENCE OF COMPLETE DETAILS REGARDING AGRICU LTURAL LAND HOLDING, AGRICULTURAL EXPENSES, PAST SAVINGS, THE G ENUINENESS AND CREDITWORTHINESS IS NOT ESTABLISHED. SUBMISSIONS OF THE APPELLANT SHRI MAHESHBHAI B. PATEL, AGED 35 YEARS, WHO HAD SU BSCRIBED 4800 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPAN Y HAD ADVANCED A SUM OF RS.1,92,632/- AS A LOAN DURING TH E FINANCIAL YEAR 2004-05 THROUGH THREE CHEQUES ON DIFFERENT DATES. H IS ADDRESS, CONFIRMATION, HAKKA PATRAK IN FORM NO. 6, FORM NO. 7/12 AND FORM NO. 8A ALONG WITH BILLS OF SALE OF AGRICULTURE - PRODUCE TO THE EXTENT OF RS.3,93,187/-WERE SUBMITTED TO THE A.O. H E EARNED - 10 - AGRICULTURAL INCOME TO THE EXTENT OF RS.4,50,000/- AS HE HOLDS AGRICULTURAL LAND TO THE EXTENT OF 3H-13R-64SM AND CULTIVATED CASH CROPS. AS HE IS ENGAGED IN AGRICULTURAL ACTIVITIES AND AGRICULTURAL INCOME IS TAX-FREE, HE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND ALSO NOT FILING INCOME TAX RETURN. IN VIEW OF THIS, HE COULD NOT FURNISH ALL THE SALE BILLS OF AGRICULTURE-PRODUCE A S THE SAME WERE - NOT PRESERVED METICULOUSLY/ SYSTEMATICALLY. DECISION: BASED ON THE SALE BILL PRODUCED AND AFTER DISCOUNTI NG AGRICULTURAL EXPENSES, THE CREDITWORTHINESS IS ESTABLISHED AND T HE ADDITION OF RS.1,92,632/- IS DIRECTED TO BE DELETED. (10) SHRI MAGANBHAI K. PATEL (3.67,632/-): REASONS FOR ADDITION BY A.O. THE SALE BILL PRODUCED DID NOT PERTAIN TO THE YEAR UNDER CONTENTION. FURTHER, DETAILS OF AGRICULTURAL EXPENSE WERE ALSO NOT FURNISHED. SO, THE CASH CREDIT WAS HELD TO NOT GENUINE. SUBMISSIONS OF THE APPELLANT SHRI MAGANBHAI K. PATEL, AGED 63 YEARS, WHO HAD SUB SCRIBED 1600 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPAN Y HAD ADVANCED A SUM OF RS.3,67,632/- AS A LOAN DURING TH E FINANCIAL YEAR 2004-05 THROUGH SIX CHEQUES ON DIFFERENT DATES. HIS ADDRESS, CONFIRMATION, HAKKA PATRAK IN FORM NO. 6, FORM NO. 7/12 AND FORM NO. 8A ALONG WITH BILLS OF SALE OF AGRICULTURE -PRODUCE TO THE EXTENT OF RS.4,73,296/-WERE SUBMITTED TO THE A.O. H E EARNED AGRICULTURAL INCOME TO THE EXTENT OF RS.5,50,000/- AS HE HOLDS AGRICULTURAL LAND TO THE EXTENT OF 4H-73R-49SM AND CULTIVATED CASH CROPS. AS HE IS ENGAGED IN AGRICULTURAL ACTIVITIES AND AGRICULTURAL INCOME IS TAX-FREE, HE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND ALSO NOT FILING INCOME TAX RETURN. IN VIEW OF THIS, HE COULD NOT PRODUCE ALL THE SALE BILLS OF AGRICULTURE-PRODUCE A S THE SAME WERE NOT PRESERVED (OR REQUIRED TO BE PRESERVED). DECISION: EXCEPT ONE SALE BILL OF RS.29,886/-, THE REST OF TH E SALE BILLS PRODUCED DURING APPELLATE PROCEEDINGS DID NOT PERTA IN TO THE RELEVANT ASSESSMENT YEAR. IN THE ABSENCE OF PAST SA VINGS, HOUSEHOLD EXPENSES AND AFTER ACCOUNTING FOR THE AGRICULTURAL EXPENSES, THE - 11 - CREDITWORTHINESS REMAINED UNSUBSTANTIATED. THE ADDI TION OF RS.3,67,632/- IS CONFIRMED. (11) SHRI MAHENDRABHAI M. PATEL (RS.5,34,640/-): REASONS FOR ADDITION BY A.O. THE DEPOSITOR HAD DEPOSITED 1,50,000/- ON 11/06/200 4 AND RS.50,000/- ON 07/12/2004 WITH THE APPELLANT FIRM. ON VERIFICATION OF THE BANK ACCOUNT OF THE CREDITOR, NO DEBITS WERE OBSERVED. FURTHER, IN THE ABSENCE OF COMPLETE DETAILS REGARDI NG AGRICULTURAL LAND HOLDING, AGRICULTURAL EXPENSES, PAST SAVINGS, THE GENUINENESS AND CREDITWORTHINESS IS NOT ESTABLISHED. SUBMISSIONS OF THE APPELLANT SHRI MAHENDRABHAI M. PATE!, WHO HAD SUBSCRIBED 4600 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVA NCED A SUM OF RS.5,34,640/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH FIVE CHEQUES ON DIFFERENT DATES. HIS ADDRESS, PAN, CONFIRMATION, FORM NO. 7/12 AND FORM NO. 8A WERE SUBMITTED TO THE A.O. HE EARNED INCOME FROM BUSINESS AND ALSO RECEIVED SALE PROCEEDS OF AGRICULTURAL PLOT SOLD FOR RS.4,00,000/- BESIDES AG RICULTURAL INCOME FROM AGRICULTURAL LAND HOLING TO THE EXTENT OF 3H-8 1R-27SM AND CULTIVATED CASH CROPS. AS HE IS ENGAGED IN AGRICULT URAL ACTIVITIES AND AGRICULTURAL INCOME IS TAX-FREE, HE IS NOT MAINTAIN ING ANY BOOKS OF ACCOUNTS AND ALSO NOT FILING INCOME TAX RETURN. IN VIEW OF THIS, HE COULD NOT PRODUCE ALL THE SALE BILLS OF AGRICULTURE -PRODUCE AS THE SAME WERE NOT PRESERVED METICULOUSLY/SYSTEMATICALLY . THE CASH WAS DEPOSITED IN HIS BANK ACCOUNT OUT OF AGRICULTUR AL INCOME AND PAST SAVINGS. DECISION: THE CREDITOR IS ASSESSED TO TAX AND THE RETURN FOR A.Y. 2005-06, BUSINESS INCOME OF RS.99,114/- AND AGRICULTURAL INC OME OF RS.90,000/-WAS DISCLOSED. THE SALE BILLS FURNISHED DURING APPELLATE PROCEEDINGS DO NOT PERTAIN TO A.Y. 2005-06. NO EVID ENCE IS PRODUCED REGARDING RECEIPT OF RS.4,00,000 FROM SALE OF AGRICULTURAL LAND. IN THE ABSENCE OF DETAILS OF PAST SAVINGS, HO USEHOLD EXPENSES AND AFTER ACCOUNTING FOR THE AGRICULTURAL EXPENSES, THE CREDITWORTHINESS REMAINED UNSUBSTANTIATED. THE ADDI TION OF RS.5,34,640/- IS CONFIRMED. - 12 - (12) SMT. SAROJBEN M. PATEL (RS.5,84,140/-) REASONS FOR ADDITION BY A.O. THE DEPOSITOR CLAIMED TO HAVE RAISED THE MONEY OUT OF LOAN AND OUT OF HER BUSINESS INCOME BUT IN THE ABSENCE OF DETAIL S THE CASH CREDIT WAS ADDED. SUBMISSIONS OF THE APPELLANT SMT. SAROJBEN M. PATEL, WHO HAD SUBSCRIBED 9600 SHA RES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.5,84,140/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH FIVE CHEQUES ON DIFFERENT DATES. HER ADDRESS, PAN, CONFIRMATION AND COPY OF HER INCOME TAX RETURN FOR THE A.YR. 200 5-06 WERE ALSO SUBMITTED TO THE A.O. SHE EARNED INCOME FROM BUSINE SS. SOURCES OF LOAN GIVEN BY HER WERE EXPLAINED AS FOLLOWS:- DATE AMOUNT ( IN RS.) SOURCE 07.04.2004 70,000 LOAN 12.04.2004 1,00,000 LOAN 17.04.2004 1,00,000 LOAN 26.04.2004 1,60,000 LOAN 03.11.2004 20,000 OUT OF BUSINESS 03.12.2004 50,000 OUT OF BUSINESS TOTAL 5,00,000 DECISION: FOR A.Y. 2005-06, THE BUSINESS INCOME WAS RS.62,208 /-. NO DETAILS OF THE SOURCES OF LOANS RAISED AND POTENTIAL SAVING OUT OF BUSINESS INCOME WAS FURNISHED. ACCORDINGLY, THE ADDITION OF RS.5,84,140/- IS CONFIRMED. (13) SHRI PRAKASHBHAI M. PATEL (RS.4,12.964/-): REASONS FOR ADDITION BY A.O. IN THE BANK ACCOUNT, NO DEBITS WERE OBSERVED FOR IN VESTING IN THE APPELLANT FIRM. FURTHER, THE DETAILS OF AGRICULTURA L INCOME AND EXPENSES WERE NOT FILED. ACCORDINGLY, RS.4,12,964/- WAS ADDED. - 13 - SUBMISSIONS OF THE APPELLANT SHRI PRAKASH M. PATEL, WHO HAD SUBSCRIBED 5000 SHAR ES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.4,12,964/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH SIX CHEQUES ON DIFFERENT DATES. HIS ADDRESS, PAN, C ONFIRMATION AND A COPY OF INCOME TAX RETURN FOR THE A.Y, 2005-06 WE RE ALSO SUBMITTED TO THE A.O. HE DREW INCOME FROM SALARY, B USINESS BESIDES AGRICULTURE. LOANS WERE GIVEN OUT OF AGRICU LTURAL INCOME AND PAST SAVINGS. DECISION: DURING THE A.Y. 2005-06, THE CREDITOR HAS DECLARED INCOME OF RS.57,053/- AND AGRICULTURAL INCOME OF RS.62,356/-. IN. THE ABSENCE OF DETAILS OF PAST SAVINGS, HOUSEHOLD EXPENSES AND AFTER ACCOUNTING FOR THE AGRICULTURAL EXPENSES, THE CREDITWORTHINESS REMAINED UNSUBSTANTIATED. THE ADDITION OF RS.4,12,964/- IS C ONFIRMED (14) DAMVANTIBEN P. PATEL (RS.4,19.440/-): REASONS FOR ADDITION BY A.O. THE DEPOSIT WAS CLAIMED TO OUT OF HER BUSINESS INCO ME AND LOANS RAISED BUT NO DETAILS OF THE LOANS WERE FURNISHED. ACCORDINGLY, THE CREDIT WAS TREATED AS NOT GENUINE. SUBMISSIONS OF THE APPELLANT SMT. DAMYANTIBEN P. PATEL, WHO HAD SUBSCRIBED 9600 SHARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.4,19,440/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH FIVE CHEQUES ON DIFFERENT DATES. HER ADDRESS, PAN, CONFIRMATION AND COPY OF HER INCOME TAX RETURN FOR THE A.Y. 2005 -06 WERE ALSO SUBMITTED TO THE A.O. SHE EARNED INCOME FROM BUSINE SS. AMOUNTS WERE DEPOSITED IN BANK ACCOUNT OUT OF BUSINESS INCO ME AND PAST SAVINGS. DECISION: SHE HAS RETURNED INCOME OF RS.75,650/- FOR A.Y. 200 5-06. THE RETURN WAS FILED ON 28/02/2007. THE APPELLANT CASE WAS SELECTED FOR SCRUTINY ON 16/10/2006, IN THE ABSENCE OF DETAILS O F LOANS RAISED AND PAST SAVINGS, THE ADDITION OF RS.4,19,440/- IS CONFIRMED. (15) ATULBHAI M. JANI (1,00,000): REASONS FOR ADDITION BY A.O. NO CONFIRMATION WAS FILED NEITHER ANY DETAILS WERE FURNISHED TO ESTABLISH THE GENUINENESS AND CREDITWORTHINESS. - 14 - SUBMISSIONS OF THE APPELLANT SHRI ATULBHAI M. JANI, WHO HAD SUBSCRIBED TO 4800 S HARES IN THE COMPANY, ON THE REQUEST OF THE COMPANY HAD ADVANCED A SUM OF RS.1,00,000/- AS A LOAN DURING THE FINANCIAL YEAR 2 004-05 THROUGH A CHEQUE ON 14 TH JUNE, 2004. HIS ADDRESS, CONFIRMATION WERE ALSO SUBMITTED TO THE A.O. HE HAD SERVED AS A TECHNICAL PERSON WITH 'CADILA' FOR NUMBER OF YEARS DRAWING HANDSOME SALAR Y. DECISION NO SALARY CERTIFICATE, OR CONFIRMATION FROM THE CRE DITOR WAS FILED TO JUSTIFY THE CREDITWORTHINESS. THE ADDITION OF RS.1, 00,000 IS THEREFORE CONFIRMED. 4. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE DURING THE COURSE OF THE HEARING ARGUED THAT THE ASSESSEE FILE D BEFORE THE LEARNED ASSESSING OFFICER CONFIRMATION OF DEPOSITORS, BANK STATEMENT, COPY OF INCOME TAX RETURN AND BALANCE SHEET. THUS, THE INITIAL ONUS OF PROVIN G THE DEPOSITORS AS GENUINE WAS DISCHARGED BY THE ASSESSEE. THEREAFTER, IT WAS FOR THE LEARNED ASSESSING OFFICER TO HAVE ISSUED NOTICE TO THE DEPOSITORS AND SHOULD HAVE EXAMINED THEM IF HE WAS NOT SATISFIED WITH THE EVIDENCES AND EXPLANATION FI LED BY THE ASSESSEE. THE LEARNED ASSESSING OFFICER HAS NOT DONE SO AND THERE FORE, WITHOUT EXAMINING THE DEPOSITORS, THE LEARNED ASSESSING OFFICER WAS NOT J USTIFIED IN TREATING THE DEPOSITS AS UNEXPLAINED CREDITS AND MAKING ADDITION THEREOF UNDER SECTION 68 OF THE ACT. FOR THIS HE RELIED ON THE DECISION OF HON' BLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUILDERS (2002) 256 ITR 360 (GUJ) AND THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LTD. (1986) 159 ITR 78(SC). THE LEARNED AUTHORISED REPRE SENTATIVE OF THE ASSESSEE FURTHER SUBMITTED THAT THE LEARNED ASSESSING OFFICE R REQUIRES THE ASSESSEE TO PROVE THE SOURCE OF THE SOURCE OF DEPOSIT, WHICH I S LAW HE CANNOT DO IN VIEW OF DECISION OF HON'BLE SUPREME COURT IN CASE OF ORISSA CORPORATION PVT. LTD(SUPRA). HE ALSO SUBMITTED THAT IF DEPOSITORS HA S CONFIRMED THE DEPOSITS MADE WITH THE ASSESSEE AND THE DEPOSITORS CANNOT ESTABLI SH THE SOURCE OF DEPOSIT WITH THE ASSESSEE THEN ACTION CAN BE TAKEN AGAINST THE D EPOSITORS AND NOT AGAINST THE ASSESSEE. - 15 - 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. DURING THE YEAR UNDER CONSIDER ATION, THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED DEPOSITS OF RS.50,72,136/- FROM 15 PERSONS. THE DETAILS ARE WHICH ARE AS FOLLOWS. SR. NO. NAME DEPOSIT AMOUNT 1. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 BHADRESHBHAI D PATEL PRAVINABEN B PATEL DINESHBHAI K PATEL NAYNA/NIMUBEN D PATEL GAGARAMBHAI D PATEL JYOSTANABEN S PATEL KARAMSHIBHAI D PATEL NARENDRABHAI R PATEL MAHESHBHAI B PATEL MAGANBHAI K PATEL MAHENDRABHAI M PATEL SAROJBEN M. PATEL PRAKASH M. PATEL DAMYANTIBEN P. PATEL ATULBHAI M. JANI 177632 177632 251632 282632 192632 342632 664264 371632 192632 367632 534640 584140 412964 419440 100000 TOTAL 5072136 THE LEARNED ASSESSING OFFICER NOTICED THAT MOST OF THE DEPOSITORS ARE AGRICULTURIST AND IN RESPECT OF THAT DETAILS OF AGR ICULTURE INCOME, EXPENSES, HOUSEHOLD EXPENSES WERE CALLED FOR. THESE DETAILS W ERE NOT FURNISHED BY THE ASSESSEE. THE LEARNED ASSESSING OFFICER FURTHER OB SERVED THAT IN THE BANK ACCOUNT OF THE DEPOSITORS, THERE WERE CASH DEPOSITS PRIOR TO ISSUANCE OF CHEQUE TO THE ASSESSEE FIRM. IN ABSENCE OF COMPLETE INFORMATI ON AND KEEPING IN VIEW THE FACT THAT THERE WERE CASH DEPOSITS IN THE BANK ACCO UNT OF THE DEPOSITORS BEFORE ISSUANCE OF THE CHEQUES TO THE ASSESSEE FIRM, THE L EARNED ASSESSING OFFICER CONCLUDED THAT THE CASH DEPOSITS WERE NOT GENUINE A ND ADDED RS.50,72,136/- IN RESPECT OF THE 15 CASH CREDITORS UNDER SECTION 68 O F THE ACT TO THE INCOME OF THE ASSESSEE. - 16 - 7. ON AN APPEAL FILED BY THE ASSESSEE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOUND THAT THE DEPOSITORS APPEA RING AT SR. NO.1, 2, 3, 5, 8 AND 9, THE CREDITWORTHINESS OF THE DEPOSITORS WAS E STABLISHED BY THE ASSESSEE BY FURNISHING THEIR COPY OF RETURN OF INCOME AND CONFI RMATION OF ACCOUNT DELETED THE ADDITIONS MADE IN THOSE CASES AND NOT BEING SATISFI ED ABOUT THE CREDITWORTHINESS OF THE BALANCE DEPOSITORS CONFIRMED THE ADDITION ON ACCOUNT OF DEPOSITS RECEIVED FROM THE 9 DEPOSITORS OF RS.37,08,344/-. BEING AGG RIEVED BY THIS ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE AS SESSEE IS IN APPEAL BEFORE US. 8. THE ASSESSEE HAS FILED PAPER BOOK WHEREIN AT P AGES 1 TO 128 ARE PLACED COPIES OF EVIDENCE PLACED BEFORE THE LOWER A UTHORITIES IN RESPECT OF CREDITORS ALONG WITH FREE ENGLISH TRANSLATION. OUT OF THE 9 DEPOSITORS IN WHOSE CASE ADDITION WAS CONFIRMED BY THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS), WE FIND THAT THE ASSESSEE IN THE PAPE R BOOK HAS FILED CONFIRMATION OF ACCOUNT IN THE CASE OF NAYANA/NIMUBEN D. PATEL T OGETHER WITH COPY OF INCOME TAX RETURN FILED FOR ASSESSMENT YEAR 2003-04 AND 20 05-06 INCLUDING COPY OF BALANCE SHEET, WHEREIN THE DEPOSITS MADE TO THE ASS ESSEE FIRM IS REFLECTED AS RS.5,82,632/- WHICH INCLUDES OPENING BALANCE OF RS. 3 LACS AND RS.2,82,632/- RECEIVED BY THE ASSESSEE DURING THE YEAR AND COPY O F BANK STATEMENT OF VIJYA BANK, ANKLESHWAR BRANCH, WHEREIN THE CHEQUES ISSUED TO THE ASSESSEE FIRM FOR RS.69,000/-, RS.73,632/- AND RS.1,40,000/- ARE REFL ECTED. THE ASSESSEE HAS FILED CONFIRMATION OF ACCOUNT OF SMT.JYOTSANABEN S. PATEL CONFIRMING DEPOSIT OF RS.5,94,632/- ON 31.03.2005 WHICH INCLUDES OPENING BALANCE OF RS.3,52,000/- AND DEPOSIT DURING THE YEAR OF RS.2,42,632/- TOGETH ER WITH COPY OF INCOME TAX RETURN FILED FOR ASSESSMENT YEAR 2004-05. COPY OF B ANK STATEMENT AND I.T. RETURN OF THE DEPOSITOR FOR ASSESSMENT YEAR 2005-06 HAS NOT BEEN FILED. IN THE CASE OF SAROJBEN M. PATEL, THE ASSESSEE HAS FILED C ONFIRMATION OF ACCOUNT, CONFIRMING DEPOSIT OF RS.8,37,940/- WHICH INCLUDES OPENING BALANCE OF RS.2,53,800/- AND DEPOSIT OF RS.5,84,140/- DURING T HE YEAR, COPY OF INCOME TAX RETURN FILED FOR ASSESSMENT YEAR 2005-06 TOGETHER W ITH BANK STATEMENT OF - 17 - BARODA BANK, HIMMATNAGAR BRANCH, WHEREIN CHEQUES GI VEN TO THE ASSESSEE AS DEPOSIT FOR RS.69,860/-, 99,800/- 99,800/-, 1,59,68 0/- AND 50,000/- ARE REFLECTED. THE BALANCE CHEQUES OF RS.65,000/- AND 40,000/- ISS UED ON 4.06.2004 AND 6.12.2004 RESPECTIVELY ARE NOT REFLECTED. THE ASSES SEE HAS FILED COPY OF INCOME TAX RETURN FOR ASSESSMENT YEAR 2005-06 OF PRAKASHKU MAR M. PATEL, CONFIRMATION OF ACCOUNT CONFIRMING DEPOSIT OF RS.8,68,964/- WHIC H INCLUDES OPENING BALANCE OF RS.4,56,000/- AND DEPOSIT OF RS.4,12,964/- DURIN G THE YEAR, WITH COPY OF BANK STATEMENT OF ORIENTAL BANK OF COMMERCE, HIMMATNAGAR BRANCH, WHEREIN CHEQUE OF RS.48,000/-, 1,49,700/-, 13,000/-, 50,000/- AND 30,000/- ARE REFLECTED, BUT CHEQUES OF RS.50,000/- AND 50,254/- BOTH ISSUED ON 4.06.2004 ARE NOT REFLECTED. THE ASSESSEE HAS FILED CONFIRMATION OF ACCOUNT OF D AMYANTIBEN P. PATEL, COPY OF BANK ACCOUNT OF BANK OF BARODA, HIMMATNAGAR BRANCH, WHEREIN RS.1,95,700/-, 1,29,740/-, 50,000/- AND 40,000/- ARE REFLECTED AND COPY OF INCOME TAX RETURN FOR ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS ALSO FIL ED CONFIRMATION OF ACCOUNT OF ATULBHAI M. JANI CONFIRMING DEPOSIT OF RS.2,02,0 00/- WHICH COMPRISES OF OPENING BALANCE OF RS.1,02,000/- AND DEPOSIT DURING THE YEAR IS RS.1,00,000/- BUT NO COPY OF BANK STATEMENT AND INCOME TAX RETURN IS FILED. 9. FURTHER, THE ASSESSEE HAS FILED CONFIRMATION OF ACCOUNT OF KARAMSHIBHAI D. PATEL SHOWING DEPOSIT OF RS.6,64,26 4/- WITH THE ASSESSEE DURING THE YEAR. NO COPY OF BANK STATEMENT AND INCOME TAX RETURN OF THE DEPOSITOR HAS BEEN FILED. THE ASSESSEE HAS ALSO FILED CONFIRMATIO N OF ACCOUNT OF MAGANBHAI K. PATEL SHOWING DEPOSIT OF RS.3,67,632/- AND COPY OF BANK STATEMENT WITH HIMMATNAGAR NAGRIK SAHAKARI BANK LTD. SHOWING ISSUE OF CHEQUE TO THE ASSESSEE OF RS.1,00,000/-, 40,000/-, 75,000/- AND RS.50,000/ -. CHEQUES FOR RS.50,000/- AND 52,632/- ARE NOT REFLECTED IN THE BANK STATEMEN T. NO COPY OF INCOME TAX RETURN OF THE DEPOSITOR HAS BEEN FILED. 10. IN THE CASE OF ROHINI BUILDERS (SUPRA), THE H ON'BLE GUJARAT HIGH COURT HAS HELD THAT TRIBUNAL HAVING DELETED THE ADD ITION UNDER S. 68 ACCEPTING THE GENUINENESS OF LOANS WHICH WERE RECEIVED AND REPAID BY ASSESSEE BY ACCOUNT - 18 - PAYEE CHEQUES, ASSESSEE HAVING ESTABLISHED THE IDEN TITY OF THE CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, GIR NUMBERS/PAN AS WELL A S CONFIRMATIONS ALONG WITH THE COPIES OF THEIR ASSESSMENT ORDERS WHEREVER READ ILY AVAILABLE, NO SUBSTANTIAL QUESTION OF LAW ARISES; APPEAL UNDER S. 260A DISMIS SED. 11. FURTHER, THE HON'BLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION PVT. LTD. (SUPRA) HAS HELD AS UNDER:- 13. IN THIS CASE, THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF T HE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER S. 131 AT THE INSTANCE OF THE ASSESSE E, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WH ETHER THEY WERE CREDITWORTHY OR WERE SUCH WHO COULD ADVANCE THE ALL EGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED AL LEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE ASSESSEE COULD NOT DO A NYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLU SION THAT THE ASSESSEE HAS DISCHARGED THE BURDEN THAT LAY ON HIM, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION IS BASED ON SOME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUEST ION OF LAW AS SUCH ARISES. 12. KEEPING IN VIEW THE ABOVE, WE FIND THAT IN THE CASE OF NAYNA/NIMUBEN D. PATEL, THE ASSESSEE HAS FURNISHED COPY OF THE BALANCE SHEET AND INCOME TAX RETURN OF THE DEPOSITOR WHEREIN ADVA NCE TO THE ASSESSEE WAS DULY DISCLOSED. FURTHER THE ASSESSEE HAS ALSO FILED COPY OF BANK ACCOUNT OF THE SAID DEPOSITOR WHICH EVIDENCES THAT FROM HER BANK ACCOUN T, CHEQUES WERE ISSUED TO THE ASSESSEE. THUS, WE FIND THAT THE INITIAL BURDEN WHICH WAS ON THE ASSESSEE UNDER SECTION 68 OF THE ACT WAS DULY DISCHARGED BY THE ASSESSEE IN THE CASE OF NAYNA/NIMUBEN D. PATEL AND NO MATERIAL WAS BROUGHT ON RECORD BY THE LOWER AUTHORITIES TO SHOW THAT WHY THE SAID AMOUNT CAN ST ILL BE TREATED AS UNEXPLAINED MONEY OF THE ASSESSEE. WE THEREFORE, DELETE THE ADD ITION OF RS.2,82,632/- IN RESPECT OF THE SAID DEPOSIT. - 19 - 13. IN RESPECT OF THE REMAINING 8 DEPOSITORS, WE F IND THAT THE ASSESSEE HAS CLAIMED TO HAVE FURNISHED COPY OF CONFIRMATION, BANK STATEMENT, COPY OF INCOME TAX RETURN AND BALANCE SHEET. HOWEVER, WE FI ND THAT EXCEPT CONFIRMATION AND INCOMPLETE BANK ACCOUNT IN RESPECT OF CERTAIN D EPOSITORS OTHER DETAILS AND DOCUMENTS LIKE COPY OF BALANCE SHEET AND INCOME TAX RETURN WERE NOT FURNISHED. THUS, IN ABSENCE OF COMPLETE BANK ACCOUNT OF THE DE POSITORS, THEIR BALANCE SHEET AND COPY OF INCOME TAX RETURN, WE FIND THAT THE CON TENTION OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE THAT THE CREDITWORTHINESS OF ALL THE DEPOSITORS WERE ESTABLISHED BY THE ASSESSEE CANNOT BE ACCEPTED. HOWEVER, IT IS OBSERVED THAT THE ASSESSEE HAS FILED CONFIRMATION O F ALL THE DEPOSITORS AND IT IS NOT THE CASE OF THE REVENUE THAT THE NAMES AND ADDRESSE S OF THE DEPOSITORS WERE NOT FILED BEFORE THEM. IN THE ABOVE CIRCUMSTANCES, IN O UR CONSIDERED VIEW, REVENUE COULD HAVE EXAMINED THE CREDITORS BEFORE DRAWING AN Y ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE CIRCUMSTANCES, IN OUR CONSIDER ED OPINION, IT SHALL BE IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE BACK TO TH E FILE OF THE LEARNED ASSESSING OFFICER FOR PROPER VERIFICATION AND EXAMINATION OF THE DEPOSITORS. WE ORDER ACCORDINGLY, AND DIRECT THE LEARNED ASSESSING OFFIC ER TO REFRAME THE ASSESSMENT AFRESH AFTER PROPER VERIFICATION AND KEEPING IN VIE W THE LAW AS ENUNCIATED BY THE HON'BLE SUPREME COURT IN THE CASE OF ORISSA CORPORA TION PVT. LTD. (SUPRA) AND IN THE CASE OF ROHINI BUILDERS(SUPRA). NEEDLESS TO MEN TION THAT PROPER OPPORTUNITY OF HEARING SHALL BE ALLOWED TO THE ASSESSEE BEFORE REFRAMING THE ASSESSMENT. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED AS ABOV E. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON THIS 4 TH DAY OF JUNE, 2010. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 4 TH DAY OF JUNE, 2010 PARAS - 20 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XII, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 31.05.2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 02.06.2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 02.06.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 02.06.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 03.06.2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON 04.06.2010 --------- ----------- 7. FILE SENT TO THE BENCH CLERK 04.06.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------