RANJAN D. PARIKH, MUMBAI V. ITO 21(1)(4), MUMBAI

ITA 4390/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1448 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 1997-1998
• Appeal Filed On: 21-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S PHADKAR SHRI T T JACOB
• Keywords: Unexplained cash credit; Opportunity of being heard; Source of fund; Additional evidence
• Section: 143(3); 133(6); 131; 68

Judgement Text

ITA NO. 4390/MUM/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI J SUDHAKAR REDDY, AM & SHRI R S PADVEKA R, JM ITA NO. 4390/MUM/2009 (ASST YEAR 1997-98 ) SMT RANJAN D PARIKH 21 RUBY GOLD ASHOK NAGAR KANDIVALI (E) MUMBAI 101 VS THE INCOME TAX O FFICER WARD 21(1)(4), MUMBAI (APPELLANT) (RESPONDENT) PAN AABPP6832C ASSESSEE BY: SHRI S S PHADKAR REVENUE BY: SHRI T T JACOB O R D E R PER R S PADVEKAR IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IM PUGNED ORDER OF THE LD CIT(A) -21 MUMBAI FOR THE ASSESSMENT YEAR 19 97-98 DATED 20.4.2009. 2 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: I ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 35 L ACS AS UNEXPLAINED CASH CREDITS U/S 68 OF THE I T ACT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) FAILED TO APPRECIATE THE EVIDENCE PLACED ON RECORD BOTH IN THE COURSE OF ORIGINAL PROCEEDINGS UNDER THE ACT AS WEL L AS IN THE PROCEEDINGS AS PER THE ITATS ORDER SETTING ASIDE T HE ORIGINAL ASSESSMENT ORDER AND THEREBY EARED IN CONFIRMING TH E ADDITION OF RS. 35 LACS U/S 68 OF THE ACT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) OUGHT TO HAVE HELD THAT THE APPELLANT HAD DI SCHARGED THE PRELIMINARY ONUS IN PROVING THE CASH CREDITS OF RS. 35 LACS. ITA NO. 4390/MUM/2010 2 3 THIS IS A SECOND ROUND OF APPEAL BEFORE THE TRIBU NAL. THE ASSESSEE IS IN THE BUSINESS OF IMPORTING METAL SCRAPS FROM 1 00% EOU. THE ASSESSEE FILED HER RETURN OF INCOME ON 29.10.1997 AND THE OR IGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. THE AO HAD MADE T HE ADDITION OF RS. 35 LACS U/S 68 OF THE ACT IN RESPECT OF THE FOLLOWING LOAN CREDITORS: I) PRABHADEVI RS. 5 LACS II) M/S H P S INTERNATIONAL RS 5 LACS III)M/S JAYSHREE COMM. CORPN. RS 5 LACS IV) M/S MIERCO ASSOCIATES RS. 5 LACS V)M/S SANJAY TRADING CORPN RS. 5 LA CS VI) M/S VARDHMAN ENTERPRISES RS. 5 LACS VII) M/S RAJ ENTERPRISES RS. 5 LACS TOTAL RS. 35 LACS 3.1 THE ASSESSEE APPROACHED THE TRIBUNAL AS IN THE FIRST ROUND OF APPEAL THE ADDITION WAS CONFIRMED BY THE LD CIT(A). THE ASSESSEE CHALLENGED THE ORDER OF THE LD CIT(A) BEFORE THE TRIBUNAL IN I TA NO.1382/MUM/2002 AND THE TRIBUNAL AFTER ADMITTING THE ADDITIONAL EVI DENCES FILED BY THE ASSESSEE SET ASIDE THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUE OF ADDITION IN ACCORDANCE WITH LAW AFTER GIVING OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. THE OPERATIVE PART OF THE ORDER OF TH E TRIBUNAL IS AS UNDER; WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND HAVE GONE THROUGH THE RECORD AND ARE OF THE OPINION THAT THE ASSESSEE DESERVES AN OPPORTUNITY FOR SUBSTANTIATING HER CASE BEFORE THE A.O. ALL THE CREDITORS ARE STATED TO BE INCOME TAX ASSESSEES AND HAVE REGU LAR AND EXPLAINABLE SOURCES OF INCOME. DUE TO CERTAIN DISPU TES, THE ASSESSEE WAS PREVENTED FROM FILING THE NECESSARY CONFIRMATIO N LETTERS AS REQUIRED BY LAW. NOW IT IS STATED THAT ALL THOSE DISPUTES AR E OVER AND THE CREDITORS ARE READY TO COOPERATE IN ESTABLISHING TH E CREDITWORTHINESS OF THESE TRANSACTIONS. WE, THEREFORE, IN THE INTEREST OF JUSTICE ADMIT THESE ADDITIONAL EVIDENCE AND SET ASIDE THE IMPUGNED ORDE R AND DIRECT THE AO TO RE-DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A FAIR AND REASONABLE OPPORTUNITY OF BEING HEARD. T HE ASSESSEE SHALL FILE THE CONFIRMATION LETTERS BEFORE THE AO AND SHA LL COOPERATE WITH THE ITA NO. 4390/MUM/2010 3 DEPARTMENT AND PRODUCE FURTHER EVIDENCE, IF ANY, IN SUPPORT OF THE CASH CREDITS. 3.2 AS PER THE DIRECTIONS GIVEN BY THE TRIBUNAL, TH E AO GAVE THE OPPORTUNITY TO THE ASSESSEE TO FURNISH THE ADDRESSE S OF ALL THE PARTIES FROM WHOM THE LOANS WERE TAKEN. THE AO ISSUED SUMMONS U/ S 131 TO ALL THE LOAN CREDITORS AT THE ADDRESSES FURNISHED BY THE AS SESSEE. THE AO HAS NOTED THAT THE SUMMONS ISSUED THE LOAN CREDITORS WE RE RETURNED UN-SERVED. THE AO FURTHER NOTED THAT THE ASSESSEE COULD PRODUC E NEITHER THE PARTIES NOR ANY CONFIRMATION LETTERS FROM THEM. THE AO GAV E FINAL OPPORTUNITY TO THE ASSESSEE BY ISSUING SHOW-CAUSE NOTICE DATED 19. 12.2006 TO PRODUCE ALL THE LOAN CREDITORS ON 21.12.2006. THE ASSESSEE COUL D NOT PRODUCE THE LOAN CREDITORS AS DIRECTED BY THE AO ON 21.12.2006. THE REAFTER, THE AO PASSED THE ASSESSMENT ORDER AND AGAIN MADE THE ADDITION OF RS. 35 LACS U/S 68 IN RESPECT OF THE SEVEN LOAN CREDITORS SHOWN BY THE AS SESSEE. THE ASSESSEE THE CHALLENGED THE SAID ASSESSMENT BEFORE THE LD CIT(A) IN THE SECOND ROUND OF APPEAL. 4 THE ASSESSEE PLEADED BEFORE THE LD CIT(A) THAT SH E WAS GIVEN ONLY TWO DAYS TIME TO PRODUCE THE LOAN CREDITORS AND NO PROP ER OPPORTUNITY WAS GIVEN TO THE ASSESSEE. THE LD CIT(A) CALLED FOR THE REMAN D REPORT FROM THE AO AND AS PER THE DIRECTIONS OF THE LD CIT(A), THE AO FURN ISHED THE REMAND REPORT ON 25.2.2009. THE LD CIT(A) HAS REPRODUCED THE PART O F THE REMAND REPORT AT PAGES 4 & 5 HIS ORDER. 4.1 IN THE REMAND REPORT, THE AO INFORMED THAT ONE OF THE LOAN CREDITORS WAS VERY MUCH STAYING AT THE ADDRESS PROVIDED BY TH E ASSESSEE. HE ALSO TOOK THE HELP OF THE LOCAL POLICE TO ENFORCE THE ATTENDA NCE OF THE SAID LOAN CREDITOR. IN THE REMAND REPORT, THE AO STATED THAT THOUGH WIFE AND SON OF THE SAID LOAN CREDITOR WERE STAYING AT THE ADDRESS GIVEN BY THE ASSESSEE; BUT THE WHEREABOUTS OF THE SAID PERSON WAS NOT KNOWN. ITA NO. 4390/MUM/2010 4 4.2 THE AO FURTHER STATED IN THE REMAND REPORT THA T ALL THE LOAN CREDITORS HAVE FILED THE NOTARIZED AFFIDAVITS AND THE INSPECT OR WAS DEPUTED TO MAKE ENQUIRES WITH THE CONCERNED NOTARY. THE INSPECTOR R EPORTED THAT THE NOTARY HAS CONFIRMED THAT FIVE LOAN CREDITORS HAD APPEARED BEFORE HIM FOR EXECUTION OF SAID AFFIDAVITS. 4.3 IN RESPECT OF ONE OF THE LOAN CREDITORS NAMELY SHRI DEEPAK BHATT PARTNER IN M/S JAYSHREE COMMERCIAL CORPORATION, THE AFFIDAVIT WAS EXECUTED BEFORE ANOTHER NOTARY SHRI GULAB SINGH HONEY, WHO H AS EXPIRED. THE ASSESSEE PLEADED BEFORE THE LD CIT(A) THAT ALL THE LOAN CREDITORS HAVE APPEARED BEFORE THE NOTARY AND HENCE, IDENTIFY OF T HE LOAN CREDITORS AND GENUINENESS OF THE TRANSACTIONS HAVE BEEN PROVED. 4.4 THE ASSESSEE ALSO PLEADED THAT SO FAR AS ONE OF THE LOAN CREDITORS M/S RAJ ENTERPRISES IS CONCERNED, THE ASSESSEE HAD REPA ID THE FULL LOAN AMOUNT. THE ASSESSEE ALSO PRODUCED THE CONFIRMATION LETTER OBTAINED FROM THE SAID LOAN CREDITOR. IT WAS PLEADED THAT SINCE THE LOAN WAS REPAID IN FULL TO THE RAJ ENTERPRISES, NO SEPARATE AFFIDAVIT WAS OBTAINED. 4.5 THE LD CIT(A) WAS NOT IMPRESSED WITH THE EXPLAN ATION OF THE ASSESSEE AND HE CONFIRMED THE ACTION OF THE AO BY CONFIRMIN G THE ADDITION. THE OPERATIVE PART OF THE REASONS GIVEN BY THE LD CIT(A ) ARE AS UNDER: 8.1 CONTRARY TO THE SPIRIT OF THE DIRECTIONS BY THE HONBLE ITAT, THE APPELLANT NEVER FILED ANY CONFIRMATION LETTER BEFOR E THE A.O. IN THE APPELLATE PROCEEDINGS, THE LD A.R OF THE APPELLANT MADE A CLAIM TO THE EFFECT THAT THE APPELLANT WAS NOT GIVEN REASONABLE OPPORTUNITY SINCE HE WAS ASKED TO PRODUCE CREDITORS ON 21.12.2006 BY A L ETTER DATED 19.12.2006 TO ALLOW THE APPELLANT FULLEST OPPORTUN ITY, THE AO WAS ASKED TO EXAMINE ALL THE EVIDENCES UNDER THE REMAND PROCEEDINGS. THE PROMISES THAT WERE MADE BY THE APPELLANT BEFORE THE ITAT THAT ALL THE CREDITORS ARE READY TO COOPERATE NOW WAS ONCE AGAIN MISSING. WHAT THE APPELLANT HAS OBTAINED IN AFFIDAVITS FROM THE CREDI TORS THAT THEIR LOANS HAVE BEEN SETTLED. THE WARD INSPECTOR COULD ONLY GE T A CONFIRMATION FROM THE NOTARY THAT THE DEPONENTS HAVE APPEARED BE FORE HIM, AN EXERCISE WHICH HAS NO IMPACT ON THE EVIDENTIARY VAL UE OF THE AFFIDAVIT. THE VERY FACT THAT A DOCUMENT IS NOTARIZED, THE DEP ONENTS ARE SUPPOSED ITA NO. 4390/MUM/2010 5 TO BE SIGNING THE DOCUMENT IN THE PRESENCE OF THE N OTARY. THE APPELLANT WAS NOT ABLE TO PRODUCE EVEN A SINGLE PARTY BEFORE THE AO SO THAT HE COULD EXAMINE THE CREDITWORTHINESS AND THE GENUINEN ESS OF THE LOANS. THE FACT OF THE MATTER IS THAT IF THESE HAD BEEN GE NUINE LOANS, THE APPELLANT COULD HAVE OBTAINED THE REQUISITE DOCUMEN TS FROM THE CREDITORS TO PROVE THEIR CAPACITY AND THE GENUINENE SS OF THE TRANSACTIONS. THERE IS NOT ONE CREDIBLE EVIDENCE, W HICH HAS BEEN BROUGHT ON RECORD BY THE APPELLANT AFTER THE FIRST ROUND OF ASSESSMENT TO PROVE THAT THESE LOANS ARE GENUINE. AN AFFIDAVIT CA NNOT SUBSTITUTE FOR A CLINCHING EVIDENCE SUCH AS COPIES OF BANK ACCOUNT O F THE CREDITORS, THEIR STATEMENTS, THEIR RETURNS OF INCOME ETC. IF THE LOA NS WERE SETTLED, THERE WAS NO REASON FOR THE CREDITORS NOT TO COOPERATE WI TH THE APPELLANT OR THE DEPARTMENT. THE HONBLE ITATS ORDER HAS CLEARL Y CAST THE ONUS OF PRODUCING THE PARTIES AND PRODUCING OTHER EVIDENCES INCLUDING LOAN CONFIRMATIONS ON THE APPELLANT FOR THE SIMPLE REASO N THAT THE APPELLANT FAILED TO DO SO RIGHT THROUGH THE FIRST ROUND OF AS SESSMENT AND APPELLATE PROCEEDINGS. THE APPELLANT HAS NOT DISCHARGED HER O NUS VERY SUBSTANTIALLY IN THE MATTER AND, THEREFORE, IT CANN OT BE SAID THAT SHE HAS BEEN ABLE TO PROVE THE CREDITWORTHINESS OF THE CRED ITORS AND THE GENUINENESS OF THE TRANSACTIONS 5 THE LD COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE LOANS WERE ARRANGED BY THE ASSESSEE THROUGH ONE BROKER. IT IS ARGUED THAT THE ASSESSEE WAS PAYING INTEREST ON THE SAID LOANS AND THE INTER EST WAS PAID BY ACCOUNT PAYEE CHEQUE. THE FINANCIAL POSITION OF THE ASSESSE E WAS DETERIORATING AND THE ASSESSEE COULD NOT MAKE THE PAYMENT TO THOSE LO AN CREDITORS AND HENCE, THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE LOAN CREDITORS BECOME SORE. THE LOAN CREDITORS INITIATED LEGAL ACTION AGAINST T HE ASSESSEE. THE LD COUNSEL FOR THE ASSESSEE REFERRED TO THE COPIES OF THE NOTI CES ISSUED BY M/S VINOD MISTRY & CO, ADVOCATES & SOLICITOR, HIGH COURT, MUM BAI ON BEHALF OF THE LOAN CREDITORS (PAGE 71 TO 76 OF THE PAPER BOOK). THE LD COUNSEL FURTHER ARGUED THAT ONE OF THE LOAN CREDITORS I.E. DEEPAK J AYANTILAL DESAI OF M/S VARDAMAN ENTERPRISES HAD FILED A CIVIL SUIT IN BOMB AY HIGH COURT AGAINST THE ASSESSEE. THE LD COUNSEL FOR THE ASSESSEE REFE RRED TO THE COPY OF THE SUMMONS ISSUED IN CIVIL SUIT NO.1842 OF 2002 (PAGE S 77 TO 79 OF THE PAPER BOOK) AND SUBMITTED THAT MERELY BECAUSE OF THE LOAN CREDITORS DID NOT ITA NO. 4390/MUM/2010 6 COOPERATE AND AVOIDED TO APPEAR BEFORE THE AO THAT CANNOT BE THE REASON TO MAKE ADDITION U/S 68 OF THE ACT AS THE ASSESSEE HAS PROVED THE IDENTITY OF THE LOAN CREDITORS AS THE NOTARIZED AFFIDAVITS WERE FILED AND ALSO THE GENUINENESS OF THE LOAN CREDITORS AS THE CONFIRMATI ON LETTERS FROM THE RESPECTIVE LOAN CREDITORS AS WELL AS NOTICES ISSUE D BY THE ADVOCATE ON BEHALF OF THE LOAN CREDITORS TO THE ASSESSEE TO SUPPORT TH E CASE OF THE ASSESSEE. 5.3 IT IS FURTHER ARGUED THAT ALL LOAN CREDITORS AR E HAVING PERMANENT ACCOUNT NUMBERS (PAN) AS WELL AS G.I.R. NOS. AND TH E SAME WERE MENTIONED IN CONFIRMATION LETTERS GIVEN BY THEM. THE LD COUN SEL FURTHER ARGUED THAT THE AO DID NOT MAKE ANY ADVERSE REMARKS ON THE PAN NUMBERS MENTIONED IN THE CONFIRMATION LETTERS AND IT CANNOT BE SAID THAT THE CREDITWORTHINESS OF THE LOAN CREDITORS WERE NOT PROVED. HE, THEREFORE, PLEADED FOR DELETING THE ENTIRE ADDITION. WE ALSO HEARD THE LD DR. 6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERU SED ALL THE RELEVANT MATERIAL BEFORE US. THE CONTROVERSY IS IN RESPECT O F THE ADDITION MADE BY THE AO U/S 68 OF THE ACT. IN THE 1 ST ROUND OF APPEAL, THE TRIBUNAL DO NOT EXAMINE THE ISSUE ON MERIT AND SET ASIDE TO THE FIL E OF THE A.O. BY ADMITTING ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. ON THE P ERUSAL OF THE RECORDS BEFORE US, IT IS SEEN THAT THE ASSESSEE ARRANGED TH E LOANS FROM SEVEN PARTIES THROUGH ONE BROKER NAMELY SHRI CHANDRESH PARIKH. A S PER THE RECORDS, THE ASSESSEE WAS PAYING THE INTEREST TO ALL THE SEVEN L OAN CREDITORS ON THE AMOUNT OF THE LOANS BORROWED. AS THE ASSESSEE DID NOT PAY THE AGREED AMOUNT OF INTEREST AS WELL AS PRINCIPLE TO THE LOAN CREDITORS, THE RELATIONSHIP BETWEEN THEM BECOME SOUR. THE ASSESSEE PROVIDED TO THE A.O. THE NAME, ADDRESS AND TELEPHONE NUMBER OF THE BROKER, WHO INT RODUCED THE ASSESSEE TO ONE SHRI BIPINBHAI KHANDHAR. THE ASSESSEE HAS A LSO FILED THE DOCUMENTARY EVIDENCE BEFORE THE AO TO SHOW THAT SHE HAS SETTLED THE ACCOUNT OF ALL THE SEVEN LOAN CREDITORS AS THE ENTI RE PAYMENT WAS ROUTED ITA NO. 4390/MUM/2010 7 THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAS FIL ED THE DETAILS OF REPAYMENT TO THE AO, COPIES OF WHICH ARE PLACED AT PAGES 36 & 37 OF THE PAPER BOOK AS WELL AS THE COPY OF THE BANK ACCOUNT. 6.1 THE ASSESSEE HAS ALSO FILED THE DETAILS IN RESP ECT OF THE NAME AND ADDRESS, PAN/GIR OF THE LOAN CREDITORS AS WELL AS T HE DETAILS OF THE IN RESPECT OF THE AMOUNT RECEIVED FROM THOSE LOAN CRED ITORS (PAGE 41 OF THE PAPER BOOK). THE ASSESSEE HAS ALSO FILED CONFIRMAT ION LETTERS FROM THE LOAN CREDITORS, COPIES OF THE SAME ARE PLACED AT PAGE 42 TO 57 OF THE PAPER BOOK. ON THE PERUSAL OF THE CONFIRMATION LETTERS, IT IS S EEN THAT THE PAN OF THE RESPECTIVE LOAN CREDITORS ARE MENTIONED AND NOWHERE IT IS STATED BY THE AO THAT THE PAN OR GIR MENTIONED IN THE CONFIRMATION L ETTERS ARE NOT CORRECT OR BOGUS. 6.2 THE ASSESSEE HAS ALSO FILED NOTARIZED AFFIDAVIT S FROM THE RESPECTIVE LOAN CREDITORS, COPIES OF WHICH ARE PLACED AT PAGES 58 TO 70 OF THE PAPER BOOK. ON THE PERUSAL OF THE NOTARIZED AFFIDAVITS, T HOUGH FORMAT IS IDENTICAL, IT IS CATEGORICALLY DECLARED ON OATH THAT LOAN OF R S. 5 LACS EACH WAS GIVEN TO THE ASSESSEE BY SAID LOAN CREDITORS. AS PER THE MUT UAL UNDERSTANDING THEY HAD AGREED TO ACCEPT RS. 5 LACS AS ANOUNT TOWARDS F ULL AND FINAL PAYMENTS OF OUTSTANDING PRINCIPAL & INTEREST. 6.3 FROM THE NOTICE ISSUED M/S VINOD MISTRY & CO, ADVOCATES &SOLICITORS (PAGE NOS. 71 TO 79 OF THE PAPER BOOK) ON BEHALF OF THE 7 LOAN CREDITORS, IT CANNOT BE SAID THAT THE LOANS WERE BOGUS. MOREOVER, ONE OF THE LOAN CREDITORS SHRI DEEPAK JAYANTILAL DESAI OF M/S VARDH AMAN ENTERPRISES (SL. 6) HAS FILED A CIVIL SUIT AGAINST THE ASSESSEE FOR REC OVERY OF THE AMOUNT OF LOAN ADVANCED AND THE COPY OF THE SUMMONS ISSUED BY THE COURT TO THE ASSESSEE SUPPORT HER CASE THAT LOAN WAS GENUINE. THE COPY O F THE SUMMONS ISSUED BY THE COURT IN THE CIVIL SUIT NO.1842 OF 2000 (PAG E NOS. 77 TO 79 OF THE PAPER BOOK). 6.4 THE ASSESSEE FILED A COPY OF THE REMAND REPORT IN THE SECOND ROUND (PAGE NOS. 84 TO 85 OF THE PAPER BOOK). ON THE PERU SAL OF THE REMAND REPORT ITA NO. 4390/MUM/2010 8 WHICH IS A TWO PAGES REPORT AND VERY CRYPTIC, IT A PPEARS THAT THE LETTERS WERE SENT U/S 133(6) OF THE ACT TO THE LOAN CREDITORS BU T THE SAME WERE RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS NOT KNO WN OR INCOMPLETE ADDRESSES. NOWHERE, IT IS MENTIONED IN THE REMAND REPORT THAT SUMMONS WERE ISSUED TO THE LOAN CREDITORS U/S 131. IN THE SAID REMAND REPORT, THE A.O. STATES THAT EVEN HELP OF THE LOCAL POLICE WAS TAKEN TO PRODUCE THE ONE OF THE LOAN CREDITOR AND THOUGH THE WIFE AND SON OF THE SAID LOAN CREDITORS WAS STAYING AT THE GIVEN ADDRESS BUT STATED THAT WH EREABOUTS OF THE SAID PERSON WAS NOT KNOWN. THE A.O. IS SILENT ON THE IDE NTITY WHO WAS SAID LOAN CREDITOR TO WHOM HE SENT POLICE TO PRODUCE BEFORE H IM. MOREOVER, THE AO DEPUTED THE INSPECTOR TO THE OFFICE OF THE AN ADVOC ATE & NOTARY, BEFORE WHOM FIVE LOAN CREDITORS HAD EXECUTED THE NOTARIZED AFFI DAVITS (PAGE NOS. 58 TO 70 OF THE PAPER BOOK) AND THE SAID NOTARY CONFIRMED TH AT THE PARTIES/ LOAN CREDITORS HAD APPEARED BEFORE HIM. 6.5 SECTION 68 OF THE ACT IS A DEEMING PROVISIONS A ND IT IS RULE OF EVIDENCE. AS PER THE SETTLED PRINCIPLE, THE BURDEN IS ON THE ASSESSEE TO PROVE THE IDENTITY OF THE LOAN CREDITORS AND GENUINENESS OF T HE TRANSACTIONS AND ALSO CREDITWORTHINESS OF THE LOAN CREDITORS. IN THIS CAS E, THE ASSESSEE COULD NOT PRODUCE ANY LOAN CREDITOR BEFORE THE AO BUT MERELY NON-PRODUCTION OF THE LOAN CREDITORS CAN GO AGAINST THE ASSESSEE? FROM TH E RECORDS, WE FIND THAT EVEN THE A.O. OBTAINED THE ADDRESSES OF THE LOAN CR EDITORS FROM THE BANK AND ISSUED NOTICES TO THEM BUT THE SAME WERE RETURN ED UN-SERVED. 7 ON THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE LOAN CREDITORS WAS SOUR. AS THE FINANCIAL ARRANGEMENTS WERE MADE THROUGH A BROK ER, THE ASSESSEE COULD NOT DO ANY THING TO PRODUCE THE LOAN CREDITORS BE FORE THE A.O. AS PER THE EVIDENCES BEFORE US, IN OUR OPINION, THE ASSESSEE H AS ESTABLISHED THE IDENTITY OF THE LOAN CREDITORS AS WELL AS THE GENUI NENESS OF THE LOAN TRANSACTIONS. THE ASSESSEE ALSO ENTERED INTO A SETT LEMENT AND REPAID THE LOANS AND RELEVANT EVIDENCES IN RESPECT OF REPAYME NT MADE TO THE LOAN CREDITORS ARE FILED BEFORE US. ITA NO. 4390/MUM/2010 9 7.1 SO FAR AS THE CREDITWORTHINESS IS CONCERNED, IN ALL THE CONFIRMATION LETTERS, PAN/GIR OF THE LOAN CREDITORS IS MENTIONED . BUT NOWHERE IT IS A CASE OF THE REVENUE THAT PAN/GIR ARE BOGUS. ON THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE ASSESSEE HAS DISCHARGED THE ONUS PUT ON HER U/S 68 OF THE ACT. WE FIND NO REASON TO SUSTAIN THE ADDITION MADE BY THE AO U/S 68; ACCORDI NGLY, WE DELETE THE ENTIRE ADDITION MADE BY THE AO. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED,. ORDER PRONOUNCED ON THE 18 TH DAY OF JUNE 2010. SD/- SD/- ( J SUDHAKAR REDDY ) ACCOUNTANT MEMBER (R S PADVEKAR ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 18 TH JUNE 2010 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI