DCIT, New Delhi V. M/s. Minda Investment Ltd., Delhi

ITA 4391/DEL/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6939 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 11-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 30-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Reopening of assessment; Unexplained cash credit; Assessment record
• Section: 14A; 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E: NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL M EMBER ITA NO. 4391/DEL /2010 ASSESSMENT YEAR: 2005-06 THE DY.C.I.T VS. M/S MINDA INVESTMENT LTD CIRCLE 6(1) 36-A, RAJASTHAN UDYOG NAGAR NEW DELHI DELHI PAN : AAACL 1433 F CO NO. 384/DEL/2010 [A/O ITA NO. 4391/DEL /2010 ASSESSMENT YEAR: 2005-06] M/S MINDA INVESTMENT LTD VS. THE DY.C.I.T 36-A, RAJASTHAN UDYOG NAGAR CIRCLE 6(1) DELHI NEW DELHI PAN : AAACL 1433 F [APPELLANT] [RESPONDENT] DATE OF HEARING : 11.07.2016 DATE OF PRONOUNCEMENT: 22.07.2016 ASSESSEE BY : SHRI PRADEEP DIN ODIA, CA SHRI R.K. KAPOOR, CA DEPARTMENT BY : SHRI P. DAM KANUNJN A, SR. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT( A)-VII, NEW 2 2 DELHI, DATED 21/07/2010 FOR A.Y 2005-06 IN FIRST AP PEAL NO. 148/2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITS APPEAL: 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRON EOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS. 50,00,000 /- MADE BY THE A.O U/S 68 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] BEING THE UNEXPLAINED CASH CR EDITS AND RS. 2,58,220/- BEING THE INTEREST PAID ON THESE UNEXPLA INED CASH CREDITS. 2.1. THE LD. CIT (A) IGNORED THE FACT THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS OF PROVING THE CREDITWORTHINESS OF THE CREDITS AND GENUINENESS OF THE TRANSACTIONS. THE LD. CIT(A ) ALSO IGNORED THE FINDINGS RECORDED BY THE A.O THAT THE ASSESSEE RECEIVED THE MONEY IN QUESTION FROM THE COUNTRY OPERATORS. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER , OR AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF T HE HEARING. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS CROSS OBJECTION: 3 3 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX, (A PPEALS) GROSSLY ERRED IN LAW AND ON THE FACTS OF THE APPELL ANT CASE IN CONFIRMING THE ADHOC DISALLOWANCE OF RS. 1 LAKH U/S 14A OF THE INCOME-TAX ACT. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX FU RTHER ERRED IN DIRECTING THE AO TO RECALCULATE THE AMOUNT OF DISAL LOWANCE IN ACCORDANCE WITH RULE 8D OF THE I.T. RULES, 1962. 3. THAT RULER 8D IS NOT APPLICABLE TO THE YEAR UNDER ASSESSMENT. 4.THAT THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE IS BAD IN LAW. REVENUES APPEAL 4. GROUND NOS. 1 AND 3 OF THE REVENUE BEING GENERAL IN NATURE NEED NO ADJUDICATION. HENCE GROUND NOS. 1 AN D 3 OF THE REVENUE STAND DISMISSED. 5. THE LD. DR CONTENDED THAT THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS. 50,00,000/- MADE BY THE A.O U/S 68 OF THE INCOME- TAX ACT, 1961 BEING THE UNEXPLAINED CASH CREDITS A ND RS. 2,58,220/- BEING THE INTEREST PAID ON THESE UNEXPLAINED CASH C REDITS. THE LD. DR FURTHER SUBMITTED THAT THE LD. CIT(A) IGNORED THE F ACT THAT THE LD. CIT (A) IGNORED THE FACT THAT THE ASSESSEE DID NOT DISC HARGE THE ONUS OF PROVING THE CREDITWORTHINESS OF THE CREDITS AND GEN UINENESS OF THE TRANSACTIONS. THE LD. CIT(A) ALSO IGNORED THE FIND INGS RECORDED BY THE 4 4 A.O THAT THE ASSESSEE RECEIVED THE MONEY IN QUESTIO N FROM THE COUNTRY OPERATORS. 6. ON THE OTHER HAND, THE LD. AR SUPPORTED THE ACTI ON OF THE LD. CIT(A) AND CONTENDED THAT ALL THE IMPUGNED MONIES HAVE BEEN RECEIVED AND RETURNED TO THE RESPECTIVE P ARTIES DURING THE RELEVANT FINANCIAL PERIOD AND INTEREST W AS ALSO PAID TO THE CREDITORS THEREON. THE LD. AR, THEREFO RE, CONTENDED THAT THE LD. CIT(A) AFTER OBSERVING THE F ACTS OF THE ISSUE WHICH WERE IGNORED BY THE AO, GRANTED RELIEF TO THE ASSESSEE AND THEREFORE, THE IMPUGNED ORDER MAY BE U PHELD. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD BEFORE US. WE FIND THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY OBSERVING AND RECORDING THE FOLLOWI NG FINDINGS: 4.6 ON THESE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN THE LIGHT OF THE CASE LAWS MENTIONED ABOVE, IT IS OBSERVED TH AT THE ASSESSEE HAS DULY DISCHARGED ITS ONUS OF PROVING THE IDENTIT Y AND CREDITWORTHINESS OF THE PERSONS AND GENUINENESS OF THE TRANSACTIONS BY FURNISHING THE CONFIRMATION LETTERS , ASSESSMENT PARTICULARS INCLUDING PAN AND COPY OF ACKNOWLEDGEME NT OF INCOME 5 5 TAX RETURN OF THE LOAN CREDITORS,|. INSPECTORS REP ORT BALANCE- SHEET & P&L ACCOUNT. BANK STATEMENT TO SHOW THAT TH E PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNELS BY THE LOAN CREDITORS. THE IDENTITY OF THE AFOREMENTIONED LOAN CREDITORS H AS BEEN ESTABLISHED BY SUBMITTING THEIR PERMANENT ACCOUNT N UMBER(PAN) AND INCOME TAX RETURNS. IT IS ALSO OBSERVED THAT AL L THE 8 LOAN CREDITORS OR LENDERS ARE CORPORATE ASSESSEES, INCOR PORATED UNDER INDIAN COMPANIES ACT; GENUINENESS HAS BEEN PROVED B Y THE FACT THAT THE TRANSACTIONS HAVE TAKEN PLACE THROUGH BANK ING CHANNELS WHICH IS REFLECTED IN THE BANK STATEMENTS OF THE BA NK ACCOUNTS OF THE RESPECTIVE LOAN CREDITORS AND THE CREDITWORTHIN ESS HAS BEEN ESTABLISHED THROUGH SUBMISSION OF THEIR BALANCE SHE ET AND PROFIT & LOSS ACCOUNT. NEEDLESS TO MENTION THAT THE CREDITWO RTHINESS IS REFLECTED THROUGH SOURCES OF FUNDS IN THE BALANCE S HEET, THE DETAILS OL WHICH WERE MADE AVAILABLE BY THE ASSESSEE DURING THE ASSESSMENT/ REMAND AND APPELLATE PROCEEDINGS, ON TH E BASIS OF WHICH IT CAN BE CONCLUDED THAT THE LENDERS HAD SUFF ICIENT FUNDS TO MAKE THE INVESTMENT AND TO ADVANCE LOANS AND THOSE INVESTMENTS/ LOANS HAVE BEEN DULY DISCLOSED IN ITS BALANCE SHEET . 4.7 WHEN THE ASSESSEE HAD FILED THE CONFIRMATION LE TTERS AND THE DETAILS SUCH AS PERMANENT ACCOUNT NUMBER (PAN), COPY OF INCOME TAX RETURN, BALANCE SHEET AND PROFIT & LOSS ACCOUNT, A.O. CANNOT BE PRECLUDED FROM FURTHER INVESTIGATION FOR THE PURPOSE OF FINDING THE GENUINENESS OF TRANSACTION A ND CREDITWORTHINESS OF THE CREDITORS. IN THE INSTANT C ASE, NOTHING OF THAT SORT HAS BEEN UNDERTAKEN BY THE A.O. IT IS ALSO OBSERVED THAT THE ASSESSING OFFICER COULD NOT POINT OUT ANY DISCREPANCY 6 6 IN THE EVIDENCES RELIED UPON BY THE ASSESSEE. HE HA S NEITHER BROUGHT OUT ANY DIRECT OR INFERENTIAL EVIDENCE TO C ONTRADICT THE CONTENTION OF THE ASSESSEE. IT IS FURTHER OBSERVED THAT EVEN THOUGH A.O. HAS VAST POWERS U/S 131 AND 133(6) OF T HE ACT, HE HAS NOT USED ANY OF HIS POWERS TO VERIFY THE GENUIN ENESS OF THE CLAIM OF THE ASSESSEE BY VERIFYING THE DOCUMENTS FU RNISHED BY IT. IF A.O. HAD DOUBTED THE IMPUGNED TRANSACTION AF TER RECEIVING THE EVIDENCES WHICH HAD BEEN PRODUCED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM IT WAS VERY MUCH O PEN TO THE A.O. TO DO HIS INDEPENDENT ENQUIRY AND VERIFICATION . THIS HAS NOT BEEN DONE BY THE A.O. FURTHER, WHAT IS THE DESI RED DOCUMENTARY EVIDENCE REQUIRED TO SUPPORT THE CLAIM OF THE ASSESSEE AS REQUIRED BY THE A.O. IS NOT COMING OUT OF THE ORDER OF THE A.O. THOUGH, THE LOAN CREDITORS COULD NOT BE EXAMINED BY THE AO, SINCE THEY WERE EXISTING ON THE FILE OF THE INCOME TAX DEPARTMENT AND THEIR INCOME-TAX DETAILS WERE MA DE AVAILABLE TO THE AO, IT WAS EQUALLY THE DUTY OF THE AO TO HAVE TAKEN STEPS TO VERIFY THEIR ASSESSMENT RECORDS AND IF NECESSARY TO ALSO HAVE THEM EXAMINED BY THE RESPECTIVE AOS HA VING JURISDICTION OVER THEM (LOAN CREDITORS), WHICH HAS NOT BEEN DONE BY HIM. 4.8 IT IS FURTHER OBSERVED THAT TAX HAS BEEN DULY D EDUCTED FROM THE INTEREST PAYMENTS ON THE IMPUGNED LOANS WHICH I S EVIDENT FROM THE TAX AUDIT REPORT FILED ALONGWITH THE RETUR N OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE PERUSAL OF THE TAX AUDIT REPORT ALSO REVEALS THAT THE IMPUGNED LOANS HAVE BEEN REPAID TO THE LOA N CREDITORS DURING THE YEAR UNDER CONSIDERATION ITSELF. 7 7 4.9 IT HAS ALSO BEEN CONTENDED ON BEHALF OF THE AP PELLANT THAT THE ASSESSING OFFICER DID NOT PROVIDE THE COPIES OF THE STATEMENTS OF THE PERSON(S) RECORDED BY THE INVESTI GATION WING OF THE INCOME TAX DEPARTMENT ON THE BASIS OF WHICH ADDITION IN RESPECT OF THE LOANS FOM THE THREE PARTIES, NAMELY, MAESTRO MARKETING AND ADVERTISING PVT. LTD, RAJKAR ELECTRIC AL AND ELECTRONICS LTD AND SRB MERCHANDISE PVT. LTD. HAS B EEN MADE. IT HAS ALSO BEEN CONTENTED THAT NO OPPORTUNITY HAS BEE N PROVIDED TO THE APPELLANT TO CROSS EXAMINE THE PARTIES RENDE RING SUCH STATEMENT. IT IS SETTLED PROPOSITION OF LAW THAT TH E INFORMATION GATHERED BEHIND THE BACK ASSESSEE CANNOT BE USED AG AINST HIM UNLESS UNTIL AN OPPORTUNITY OF REBUTTING THE SAME I S TO THE ASSESSEE. IT IS AGAINST THE PRINCIPLE OF NATURAL JU STICE. RELIANCE IS PLACED ON THE ON OF HONBLE SUPREME COURT IN CAS E OF PRAKASH CHAND NAHTA V. UNION OF INDIA [2001] 247 ITR 274 IN SUPPORT OF THE PROPOSITION THAT CROSS-EXAMINATION OF THE WITNE SS IS MUST, BEFORE THE A.O. RELIES ON THE STATEMENT OF THE WITN ESS FOR MAKING ADDITION. THE ASSESSEE HAS THE RIGHT TO CROS S-EXAMINE IF AN ASSESSING AUTHORITY IS RELYING ON THE TESTIMONY OF A WITNESS. THE ASSESSEE IS TO BE AFFORDED AN OPPORTUNITY TO CR OSS-EXAMINE HIM AS HELD IN THE CASE OF CIT V. EASTERN COMMERCIA L ENTERPRISES, (1994) 210 ITR 103, 111 (CAL), WHEREIN IT WAS OBSERVED BY THE HIGH COURT OF CALCUTTA THAT IT IS T RITE LAW THAT CROSS-EXAMINATION IS THE SINE QUA NON OF DUE PROCES S OF TAKING EVIDENCE AND NO ADVERSE INFERENCE CAN BE DRAWN AGAI NST A PARTY UNLESS THE PARTY IS PUT ON NOTICE OF THE CASE MADE OUT AGAINST HIM. HE MUST BE SUPPLIED THE CONTENTS OF /ALL SUCH EVIDENCE, BOTH ORAL AND DOCUMENTARY, SO THAT HE CAN PREPARE T O MEET THE 8 8 CASE AGAINST HIM. THIS NECESSARILY ALSO POSTULATES THAT HE SHOULD CROSS-EXAMINE THE WITNESS HOSTILE TO HIM. IN C. VAS ANTLAL & CO. V. CIT (1962) 45 ITR 206 (SC), THE SUPREME COURT HE LD THAT IT WAS OPEN TO AN INCOME-TAX OFFICER TO COLLECT MATERI ALS TO FACILITATE ASSESSMENT EVEN BY PRIVATE ENQUIRY. BUT IF HE DESIRES TO USE THE MATERIALS SO COLLECTED, THE ASSESSEE MUS T BE INFORMED OF THE MATERIALS AND MUST BE GIVEN AN ADEQ UATE OPPORTUNITY OF EXPLAINING IT. SIMILAR VIEW WAS EXPR ESSED IN DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 7 75 (SC). RELIANCE IS ALSO PLACED ON THE DECISION OF THE JURI SDICTIONAL HIGH COURT I.E. DELHI HIGH COURT IN COMMISSIONER OF INCO ME-TAX VS. PRADEEP KUMAR GUPTA AND VIJAY GUPTA(2008) 303 ITR 9 5(DELHI) WHEREIN IT WAS HELD THAT REOPENING OF ASSESSMENT IS NOT PERMISSIBLE ON MERE ADVERSE STATEMENTS FROM OTHERS. SUCH STATEMENT BY ITSELF DOES NOT CONSTITUTE INFORMATION , UNLESS THE ASSESSING OFFICER HAS MADE ENQUIRIES THEREON AND IN FERRED UNDERSTATEMENT OF INCOME. I AM THEREFORE INCLINED T O AGREE WITH THE SUBMISSIONS MADE ON BEHALF OF THE APPELLAN T TO THE EFFECT THAT STATEMENT RECORDED BEHIND BACK OF THE A SSESSEE WITHOUT BEING SUBJECTED TO CROSS-EXAMINATION CANNOT BE FULLY ADMITTED AS EVIDENCE AGAINST THE ASSESSEE. 4.10 DURING THE APPELLATE PROCEEDINGS THE APPELLANT WAS SPECIFICALLY DIRECTED IN TERMS OF RULE 46A(4) OF TH E INCOME TAX RULES, 1962 TO PRODUCE BALANCE SHEET FOR THE RELEVA NT ASSESSMENT YEAR AND INCOME-TAX DETAILS AND PAN IN ORDER TO EST ABLISH THE CREDITWORTHINESS OF THE FOLLOWING THREE LOAN CREDIT OR COMPANIES :- 9 9 I) MAESTRO MARKETING AND ADVERTISING PVT.LTD. RS.5,00, 000/- II) RAJKAR ELECTRICAL AND ELECTRONICS LTD. R S.5,00,000/- III) SRB MERCHANDISE PVT. LTD. RS.2,50,000/- IN COMPLIANCE WITH THE ABOVE DIRECTIONS THE COPIES OF THE AUDITED BALANCE SHEET AND PROFIT MOSS ACCOUNT FOR T HE YEAR ENDED 31.03.2006 AND THE ASSESSMENT PARTICULARS INC LUDING PAN AND COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE LOAN CREDITORS IN RESPECT OF MAESTRO MARKETING AND ADVER TISING P VT FURNISHED ON BEHALF OF THE APPELLANT, THE PERUSAL O F WHICH REVEALS THAT (A) THE AFOREMENTIONED COMPANIES ARE H AVING FUNDS CONSISTING OF SHARE CAPITAL AND RESERVE AND SURPLUS TO THE EXTENT OF RS.90.10 LACS AND RS. 1 CRORE RESPECTIVELY DURI NG FINANCIAL YEAR AND (B) THEIR PERMANENT ACCOUNT NUMBER ARE AAC CM 0826H AND AABCR 4897G RESPECTIVELY. IN RESPECT OF SRB MER CHANDISE PVT. LTD THE COPIES OF ASSESSMENT PARTICULARS INCLU DING PAN AND COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE LOAN CREDITORS WERE FURNISHED ON BEHALF OF THE APPELLANT , THE PERUSAL OF WHICH REVEALS THAT (A) ITS PERMANENT ACCOUNT NUM BER IS AABCS 6278E; (B)AN AMOUNT OF RS.250000/- HAS BEEN R ECEIVED VIDE CHEQUE NO.932849 DATED 21.7.2004 DRAWN ON THE FEDERAL BANK LTD.., PADAM SINGH ROAD, KAROL BAGH, NEW DELHI ;&(C) SRB MERCHANDISE PRIVATE LIMITED IS ENGAGED IN REAL ESTA TE BUSINESS AND IT IS HAVING ITS OFFICE AT -416, ANTARIKSH BHAW AN,K.G. MARG,CONNAUGHT PLACE,NEW DELHI 110001. 4.11 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE STATED ABOVE, IT IS HELD THAT THE ADDITION OF RS.50,00,000 /- MADE ON 10 10 ACCOUNT OF UNSECURED LOANS FROM THE LOAN CREDITORS CANNOT BE SUSTAINED AND ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED. THE CONSEQUENTIAL ADDITION ON ACCOUNT OF INTEREST P AID TO THE EXTENT OF RS. 2,58,220/- TO THE LOAN CREDITORS IS A LSO DIRECTED TO BE DELETED. AS A RESULT, GROUND OF APPEAL NO. 2 IS ALLOWED IN VIEW OF THE ABOVE, WHEN WE LOGICALLY ANALYSE THE RIVAL CONTENTIONS OF BOTH THE SIDES, THEN, WE CLEARLY OBS ERVE THAT THE ASSESSEE HAD FILED CONFIRMATION LETTERS AND DET AILS SUCH AS PAN, COPY OF INCOME-TAX RETURN, BALANCE SHEET AN D PROFIT AND LOSS ACCOUNT OF THE ALLEGED CREDITORS AND THE C IT(A), AFTER CONSIDERING THESE DOCUMENTARY EVIDENCES, CONC LUDED THAT THE PRIMARY ONUS OF PROOF HAS BEEN DISCHARGED BY THE ASSESSEE. WE FURTHER OBSERVE THAT THE CIT(A) ALSO NOTED THAT THE AO DID NOT PROVIDE COPIES OF THE STATEMENTS OF THE PERSONS RECORDED BY THE INVESTIGATION WING OF THE I NCOME-TAX DEPARTMENT ON THE BASIS OF WHICH ADDITION IN RESPEC T OF LOANS FROM THREE PARTIES I.E. MAESTRO MARKETING AND ADVER TISING (P) LTD, RAJKUMAR ELECTRICALS AND ELECTRONICS (P) LTD A ND SRB MERCHANDISE (P) LTD HAS BEEN MADE. THE CIT(A) WAS RIGHT IN PLACING RELIANCE ON THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF PRAKASH CHAND NAHTA VS. UOI [2 001] 247 ITR 274 [SC] WHEREIN IT HAS BEEN HELD THAT THE ASSE SSEE HAS 11 11 THE RIGHT TO CROSS EXAMINE IF AN ASSESSING AUTHORIT Y IS RELYING ON THE TESTIMONY OF A WITNESS. THE LD. CIT(A) ALSO INVOKED THE PROVISIONS OF SECTION 46A(4) OF THE I.T. RULES, 1962 AND DIRECTED THE ASSESSEE TO PRODUCE THE BALANCE SHEET FOR THE RELEVANT A.Y. AND THE INCOME-TAX DETAILS AND PAN IN ORDER TO ESTABLISH THE CREDITWORTHINESS OF THE AFOREMENTIONE D THREE LOAN CREDITORS AND THE ASSESSEE COMPLIED WITH THE S AID DIRECTIONS BY FILING THE SAME. 9. IN THIS SITUATION, THE CIT(A) WAS QUITE CORRECT AND JUSTIFIED IN HOLDING THAT THE ADDITION MADE ON ACCO UNT OF UNSECURED LOANS FROM LOAN CREDITORS CANNOT BE SUSTA INED AND THE CONSEQUENTIAL ADDITION ON ACCOUNT OF INTEREST P AID TO THE LOAN CREDITORS IS ALSO NOT SUSTAINABLE. WE MAY POI NT OUT THAT DURING THE ARGUMENTS BEFORE US, THE LD. DR COULD NO T CONTROVERT THIS FACT THAT THE ASSESSEE RECEIVED ALL THE IMPUGNED LOANS AND RETURNED THE SAME DURING THE SAM E F.Y AND INTEREST WAS ALSO PAID THEREON TO THE CREDITORS . IN THIS SITUATION, THE AMOUNT OF LOAN WHICH HAS BEEN RETURN ED TO THE RESPECTIVE CREDITORS AND INTEREST PAID THEREON CANN OT BE TAXED IN THE HANDS OF THE ASSESSEE AS ITS INCOME. THEREFORE, WE HAVE NO REASON TO INTERFERE WITH THE CONCLUSION OF THE 12 12 CIT(A) ON THIS ISSUE AND THUS WE UPHOLD THE SAME. ACCORDINGLY, GROUND NOS. 2 AND 2.1 OF THE REVENUE A RE DISMISSED. CROSS OBJECTION OF THE ASSESSEE 10. THE LD. AR DID NOT PRESS GROUND NO. 1 RELATING TO CONFIRMATION OF THE ADHOC DISALLOWANCE OF RS. 1 LAK H U/S 14A OF THE ACT. HENCE THE SAME IS DISMISSED AS NOT PRESSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22.07. 2016. SD/- SD/- ( J.S. REDDY ) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND JULY, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI