Rakesh Modi, Keonjhar V. DCIT, Circle-1(1), Sambalpur

ITA 45/CTK/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3812 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KUNAL SINGH
• Assessee Lawyers: B PANDA; B R PANDA AR S
• Keywords: Revision of order
• Section: 143(3); 263; 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ( CUTTACK BENCH, CUTTACK ) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH , JUDICIAL MEMBER I TA N O . 4 5 / CTK/2016 (ASSESSMENT YEAR : 20 0 8 - 0 9 ) SHRI RAKESH MODI, VS. DCIT, CIRCLE 1 (1), COLLEGE ROAD, SAMBALPUR. KEONJHAR 758 001. ( PAN : AFUPM6151R ) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/ SHRI B. PANDA & B.R. PANDA , AR S REVENUE BY : SHRI KUNAL SINGH , CIT DR D ATE OF HEARING : 2 8 . 0 4 .2017 DATE OF PRONOUNCEMENT : 29 . 0 5 .2017 O R D E R PE R KULDIP SINGH , JUDICIAL MEMBER : THE APPELLANT, SHRI RAKESH MODI (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 2 0 . 11 .201 5 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS), CUTTAC K QUA THE ASSESSMENT YEAR 200 8 - 0 9 ON THE GROUNDS INTER ALIA THAT : - A. FOR THAT THE ORDERS OF FORUMS BELOW ARE UNJUST, ILLEGAL, IMPROPER, CAPRICIOUS IN THE FACTS OF THE CASE, HENCE SHOULD BE QUASHED AND DELETED SINCE HAVE FAILED TO APPRECIATE THE POINTS OF LAW DECIDED BY THE HON'BLE COURTS. ITA NO . 4 5 / CTK ./2016 2 B. FOR THAT THE APPELLANT IN URGING THE ADDITIONAL GROUNDS FILED THE APPEAL DT. 13.11.2015 STATED INTERALIA THAT RS.47,06,198 ADDED HAVING BEEN BORROWED FROM DIFFERENT GENUINE AND WORTHY CREDITORS AMOUNTING TO RS.2, 50,000/ - , RS. 1,50,000/ - , RS. 1,00,000/ - , RS.2,00,000/ - AND RS.40,06,981/ - FURNISHED SPECIFICALLY IN THE ADDITIONAL GROUNDS OF APPEAL, THE COPY OF WHICH IS ENCLOSED SHOULD HAVE BEEN DELETED. C. FOR THAT THE CONFIRMATION LETTERS AND OTHER DETAILS FURNISH ED EXPLAINING THEIR CAPACITY, VERACITY AND THE GENUINENESS OF THE TRANSACTIONS MADE SHOULD NOT HAVE BEEN DISCARDED WITHOUT ADEQUATE CONFRONTATION. THUS THE ADDITIONS MADE ON THE FLIMSY GROUNDS SHOULD BE QUASHED AND DELETED AND THE ERRATIC ORDERS PASSED LAC KED JUDICIAL SANCTITY. D. FOR THAT IN THE ORDERS PASSED WITHOUT THE PRINCIPLES OF LAW, NOT RELYING THE OBSERVATIONS OF THE APEX COURT AND OTHER HON'BLE COURTS ARE TOTALLY WRONG AND MIS - PLAYED THE MATTERS BEYOND ITS JURISDICTION. HENCE THE ORDERS SHOULD BE QUASHED AND VACATED. E. FOR THAT THE APPELLANT HAVING EXPLAINED AND SUBMITTED THAT IN CASE THE ADDITIONS FOUND TO BE DOUBTFUL OR AMBIGUITY THERE WERE, THE SUBMISSIONS MADE TO ADD THE AMOUNTS IN THE CREDITORS ACCOUNT FOLLOWING THE PRINCIPLES OF LAW H ELD. F. FOR THAT THE DETERMINATION OF THE TOTAL INCOME WITHOUT CONFRONTATION AND WITHOUT CONSIDERING THE ADDITIONAL GROUNDS OF APPEAL AND OTHER DOCUMENTS, BANKING DOCUMENTS, ETC. PLACED FOR APPRECIATION, CAUSED ILLEGALITY, ETC. HENCE THE ORDERS PASSED S HOULD BE DELETED IN TOTO. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ORIGINALLY ASSESSMENT WAS COMPLETED ITA NO . 4 5 / CTK ./2016 3 UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT) AT RS.93,42,449/ - BY REJECTING T HE BOOKS OF ACCOUNT U/S 144 OF THE ACT AND ESTIMATING THE NET PROFIT AT 3.75% OF THE GROSS TRANSPORT CHARGES RECEIVED. HOWEVER, LD. COMMISSIONER BY INVOLVING THE PROVISIONS CONTAINED U/S 263 OF THE ACT HELD THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER AS ERRONEOUS INSOFAR AS THE SAME IS PREJUDICIAL TO THE INTEREST OF REVENUE ON THE GROUND THAT AO DID NOT EXAMINE PROPERLY THE UNSECURED LOAN CREDITORS DETAILED AS UNDER: - I. SMT. USHA AGARWAL RS.2,50,000/ - II. ELLORA MOHANTY RS.1,50,000/ - III. ASHUTOSH MOHAPATRA RS.1,00,000/ - IV. SMT. URMILA MODI RS.2,00,000/ - V. M/S. KHOOBSURANT LTD. KOLKATA RS.40,06,198/ - 3. DURING ASSESSMENT PROCEEDINGS, AO CALLED INFORMATION U/S 133 (6) OF THE ACT FROM THE AFORESAID CREDITORS, NAMELY, SMT. USHA AGARWAL, ELLORA MOHANTY, ASHUTOSH MOHAPATRA & SMT. URMILA MODI WHO HAVE LENT AMOUNT OF RS.2,50,000/ - , RS.1,50,000/ - , RS.1,00,000/ - & RS.2,00,000/ - RESPECTIVELY AND CAME TO THE CONCLUSION THAT IMMEDIATELY PRIOR TO THE ISSUANCE OF THE CHEQUE BY AFORESAID LENDERS TO THE ASSE SSEE, CASH WAS DEPOSITED IN THEIR BANK ACCOUNT AND THERE WAS NEGLIGIBLE BALANCE IN THEIR BANK ACCOUNTS. ITA NO . 4 5 / CTK ./2016 4 CONSEQUENTLY, AO CAME TO THE CONCLUSION THAT THE AFORESAID LENDERS WERE PERSONS OF LIMITED MEANS HAVING NO CAPACITY TO PROVIDE UNSECURED LOAN TO THE AS SESSEE AND AS SUCH, THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE AFORESAID CREDITORS, NAMELY, SMT. USHA AGARWAL, ELLORA MOHANTY, ASHUTOSH MOHAPATRA & SMT. URMILA MODI AND MADE AN ADDITION OF RS.7,00,000/ - AGAINST THE AFORESAID FOUR CREDITOR S. 4. AO RECEIVED INVESTIGATION REPORT FROM ADIT, UNIT 3 (1) DATED 03.02.2014 SEEKING AN ENQUIRY IN RESPECT OF M/S. KHOOBSURAT LTD. HAVING THEIR OFFICE IN KOLKATA AT 1, RN MUKHERJEE ROAD, MEZANINE FLOOR, ROOM NO.12, KOLKATA - 1 SO AS TO VERIFY ITS GENUINENES S, CREDITWORTHINESS AND IDENTITY. ASSESSEE HAS RECEIVED UNSECURED LOAN OF RS.40,06,198/ - FROM M/S. KHOOBSURAT LIMITED . AN INSPECTOR OF DIRECTORATE OF INCOME - TAX (INV.), KOLKATA WAS DE PU TED TO SERVE SUMMONS U/ 131 OF THE ACT ON M/S. KHOOBSURAT LTD. BUT TH E PREMISES REPORTED TO BE LOCKED AND AS PER INFORMATION GATHERED FROM THE LOCAL PEOPLE, THE PREMISES WAS LYING LOCKED FOR FEW MONTHS AND CONSEQUENTLY, AO CAME TO THE CONCLUSION THAT M/S. KHOOBSURANT LTD. IS A NON - EXISTENT COMPANY RUNNING ON PAPER ONLY AND CREATED BY UNSCRUPULOUS ENTRY OPERATOR AND CONSEQUENTLY, MADE AN ADDITION OF RS.40,06,198/ - AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,39,48,700/ - . ITA NO . 4 5 / CTK ./2016 5 5 . ASSESSEE CARRIED THE MATTER BY WAY OF FILING AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRM ED THE ORDER OF THE AO. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY FILING THE PRESENT APPEAL. 6 . WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS PASSE D BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7 . UNDISPUTEDLY, THE ASSESSEE IS INTO THE BUSINESS OF TRANSPORTATION OF ORES/MINERALS ETC. AND HAS RECEIVED UNSECURED LOAN OF RS.47,06,198/ - FROM DIFFERENT PERSONS DURING THE YEAR UNDER ASSESSMENT. IT IS ALSO NOT IN DISPUTE THAT SMT. USHA AGARWAL, ELLORA MOHANTY, ASHUTOSH MOHAPATRA & SMT. URMILA MODI, UNSECURED LOAN CREDITORS, HAVE FURNISHED ALL THE REQUISITE DOCUMENTS BEFORE AO IN COMPLIANCE TO THE PROVISIONS CONTA INED U/S 133 (6) OF THE ACT. 8 . IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, FIRSTLY, WE WOULD EXAMINE THE UNSECURED ADVANCE MADE BY SMT. USHA AGARWAL, ELLORA MOHANTY, ASHUTOSH MOHAPATRA & SMT. URMILA MODI TO THE ASSESSEE . 9 . UND ISPUTEDLY , SMT. USHA AGARWAL, ELLORA MOHANTY, ASHUTOSH MOHAPATRA & SMT. URMILA MODI ADVANCED UNSECURED ITA NO . 4 5 / CTK ./2016 6 LOAN OF RS.2,50,000/ - , RS.1,50,000/ - , RS.1,00,000/ - & RS.2,00,000/ - RESPECTIVELY TO THE ASSESSEE DURING THE YEAR UNDER ASSESSMENT THROUGH BANKING CHANNEL . AO AS WELL AS CIT (A) DISPUTED THEIR CREDITWORTHINESS ON THE SOLE GROUND THAT FEW DAYS PRIOR TO THE GRANT OF SUCH UNSECURED LOAN, CASH DEPOSITS WERE MADE IN THE BANK ACCOUNTS OF THE AFORESAID LOAN CREDITORS AND AFTER GRANT OF THE AFORESAID LOAN, MEAGER AMOUNT REMAINED IN THEIR BANK ACCOUNT. 10 . TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION OF RS.2,50,000/ - MADE BY SMT. USHA AGARWAL, ASSESSEE BROUGHT ON RECORD COPY OF PAN, RETURN OF INCOME ALONG WITH COMPUT ATION OF INCOME FOR AY 2007 - 08 AND BALANCE SHEET AS ON 31.03.2007 AND 31.03.2008, AVAILABLE AT PAGES 52 TO 60 OF THE PAPER BOOK. PERUSAL OF THE BALANCE SHEET AS ON 31.03.2008 PERTAINING TO USHA AGARWAL GOES TO PROVE THAT SHE WAS HAVING BALANCE OF RS.10,15 ,684.53 AS ON 31.03.2008 AT HER DISPOSAL OUT OF WHICH SHE HAS CATEGORICALLY SHOWN TO HAVE ADVANCED A SUM OF RS.2,50,000/ - TO M/S. RASHMI TRANSPORT OWNED BY ASSESSEE. SO, WHEN THE ASSESSEE HAS DULY PROVED THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR A ND GENUINENESS OF THE TRANSACTION, NO QUESTION ARISES TO MAKE AN ADDITION OF RS.2,50,000/ - U/S 68 OF THE ACT TO THE TOTAL INCOME OF THE ASSESSEE. SO, AO AS WELL AS CIT ITA NO . 4 5 / CTK ./2016 7 (A) HAVE ERRED IN MAKING AN ADDITION OF RS.2,50,000/ - IN CASE OF SMT. USHA AGARWAL WHIC H IS ORDERED TO BE DELETED. 11 . UNDISPUTEDLY, ASSESSEE AVAILED A LOAN OF RS.1,50,000/ - FROM ELLORA MOHANTY AND TO PROVE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION BROUGHT ON RECORD COPY OF PAN, RETURN OF INCOME ALONG W ITH COMPUTATION OF INCOME FOR AY 2007 - 08, BALANCE SHEET AS ON 31.03.2007 AND 31.03.2008, AVAILABLE AT PAGES 61 TO 70 OF THE PAPER BOOK. PERUSAL OF THE BALANCE SHEET AS ON 31.03.2008, IT IS CATEGORICALLY PROVED THAT ELLORA MOHANTY WAS HAVING BALANCE OF RS. 4,78,834/ - AS ON 31.03.2008 OUT OF WHICH AMOUNT OF RS.1,50,000/ - IS SHOWN TO HAVE BEEN LENT TO M/S. RASHMI TRANSPORT OWNED BY THE ASSESSEE. SO, AGAIN THERE IS NO QUESTION OF MAKING ADDITION OF RS.1,50,000/ - RECEIVED AS UNSECURED LOAN BY THE ASSESSEE FROM ELLORA MOHANTY. IN CASE , THE INCOME IN THE HANDS OF CREDITORS GOES UNTAXED, THE TAX AUTHORITIES ARE AT LIBERTY TO BRING THEM TO TAX. SO, AO AS WELL AS CIT (A) HAVE ERRED IN MAKING ADDITION THEREOF WHICH IS ORDERED TO BE DELETED. 1 2 . NEXT ADDITION OF RS.1 ,00,000/ - MADE BY THE AO/CIT (A) U/S 68 OF THE ACT ON ACCOUNT OF LOAN TRANSACTION WITH SHRI ASHUTOSH MOHAPATRA. ASSESSEE IN ORDER TO PROVE IDENTITY AND CREDITWORTHINESS OF THE AFORESAID CREDITOR AND GENUINENESS OF THE ITA NO . 4 5 / CTK ./2016 8 TRANSACTION BROUGHT ON RECORD COPY OF PAN, COPY OF RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME FOR AY 2007 - 08, BALANCE SHEET AS ON 31.03.2007 AND 31.03.2008, AVAILABLE AT PAGES 71 TO 79 OF THE PAPER BOOK. PERUSAL OF THE BALANCE SHEET APPARENTLY GOES TO PROVE THAT AS ON 31.03.2008, ASHU TOSH MOHAPATRA WAS HAVING BALANCE OF RS.4,07,596.88 AFTER LENDING AN AMOUNT OF RS.1,00,000/ - TO M/S. RASHMI TRANSPORT OWNED BY THE ASSESSEE. SO WHEN ASSESSEE HAS DULY PROVED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LENDERS, THE TAX AUTHORITIE S MAY BRING THE LENDERS TO TAX, IF NEED BE. AO AS WELL AS CIT (A) HAVE ERRED IN MAKING ADDITION THEREOF WHICH IS ORDERED TO BE DELETED. 1 3 . NEXT ADDITION OF RS.2,00,000/ - ON ACCOUNT OF CREDIT OF UNSECURED LOAN MADE BY SMT. URMIL A MODI TO THE ASSESSEE. LD . AR FOR THE ASSESSEE CONTENDED THAT THIS CREDIT ADVANCE OF RS.2,00,000/ - PERTAINS TO AY 2007 - 08 AND HAS NO CONCERN WITH THE YEAR UNDER ASSESSMENT AND THIS FACT HAS ALSO BEEN OBSERVE D BY CIT (A) IN HIS ORDER PASSED U/S 263 OF THE ACT. ON P ERUSAL OF THE CO PY OF PAN, RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME AND BALANCE SHEET AS ON 31.03.2007 AND BANK CERTIFICATE ISSUED BY BANK OF INDIA DATED 09.11.2013, AVAILABLE AT PAGES 80 TO 87 OF THE PAPER BOOK, IT BECOMES APPARENTLY CLEAR THAT THE SAID UNSECURE D LOAN OF RS.2,00,000/ - WAS GIVEN BY WAY OF CHEQUE NO.183173 OUT OF ITA NO . 4 5 / CTK ./2016 9 ACCOUNT NO.6270 OF URMILA MODI TO THE ASSESSEE ON 04.05.2006 AND AS SUCH HAS NO CONCERN WITH THE YEAR UNDER ASSESSMENT. SO, THE AO / CIT(A) HA VE ERRED IN MAKING /AFFIRMING OF AN ADDITION OF RS.2,00,000/ - U/S 68 OF THE ACT TO THE TOTAL INCOME OF THE ASSESSEE DURING THE YEAR UNDER ASSESSMENT. 1 4 . ASSESSEE RECEIVED UNSECURED LOAN OF RS.40,06,198/ - FROM M/S. KHOOBSURAT LIMITED, IRN MUKHERJEE ROAD, MEZANINE FLOOR, ROOM NO.12, KOLKATA. AO/CIT (A) MADE AN ADDITION THEREOF U/S 68 OF THE ACT BY DECLARING THE SAME TO BE A SHAM TRANSACTION. LD. AR FOR THE ASSESSEE CONTENDED THAT M/S. KHOOBSURAT LIMITED HAS PRODUCED ALL THE EVIDENCES IN RESPONSE TO THE NOTICE U/S 133 (6) OF THE ACT TO PROVE THE IDENTIT Y AND CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION BUT AO PROCEEDED ON THE BASIS OF REPORT OF INSPECTOR WHICH IS NOT SUSTAINABLE. 1 5 . UNDISPUTEDLY , AO GOT THE MATTER INSPECTED THROUGH INVESTIGATION WING, KOLKATA ABOUT THE GENUINENES S OF THE TRANSACTION AND CREDITWORTHINESS AND IDENTITY OF THE UNSECURED LOAN CREDITOR, WHICH HAS REPORTED THAT AS PER CIRCUMSTANTIAL EVIDENCE, M/S. KHOOBSURAT LIMITED IS NOT IN EXISTENT. AO ALSO RELIED UPON THE STATEMENT OF ASSESSEE , THAT HE APPROACH ED T HE COMPANY THROUGH ONE OF HIS FRIEND AT KOLKATA AND HE HAS NO KNOWLEDGE HOW THE COMPANY WAS NOT LOCATED B Y THE DEPARTMENT, EVEN AFTER ITA NO . 4 5 / CTK ./2016 10 PHYSICAL VERIFICATION MADE BY THE INSPECTOR OF INVESTIGATION WING OF INCOME - TAX. 1 6 . ASSESSEE TO PROVE THE IDENTITY AND C REDITWORTHINESS OF M/S. KHOOBSURAT LIMITED BROUGHT ON RECORD COP IES OF RETURN OF INCOME FOR AYS 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, 2011 - 12, 2012 - 13, 2013 - 14 AND 2014 - 15 , BALANCE CONFIRMATION, BANK STATEMENT, AUDITORS REPORT, AVAILABLE AT PAGES 88 TO 125 OF THE PAPER BOOK, COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION , AVAILABLE AT PAGES 126 TO 137 OF THE PAPER BOOK, COPY OF ANNUAL RETURN FOR FY 2015 - 16, AVAILABLE AT PAGES 138 TO 152 OF THE PAPER BOOK, COPY OF FINANCIAL STATEMENT, COPY OF LOWER DEDUCTION CERTIFICATE AND COPY OF COMPANY MASTER DATE EXECUTED FROM MCA PORTAL OF M/S. KHOOBSURANT LIMITED, AVAILABLE AT PAVES 153 TO 162 OF THE PAPER BOOK. 1 7 . PERUSAL OF THE RETURN OF INCOME FOR AY 2007 - 08 APPARENTLY SHOWS THAT M/S. KHOOBSURAT LIMITED WAS HAVING G ROSS TOTAL INCOME OF RS.1,45,339/ - AND HAS PAID SELF ASSESSMENT TAX OF RS.3,040/ - . SIMILARLY, IN AY 2008 - 09, M/S. KHOOBSURAT LIMITED FILED RETURN OF INCOME AND TOTAL TAX PAID OF RS.2,570/ - . THE LD. AR FOR THE ASSESSEE RELIED UPON BALANCE SHEET AS ON 31.0 3.2008, AVAILABLE AT PAGE 108 OF THE PAPER BOOK, SHOWING NET WORTH OF THE COMPANY AT RS.23.16 CRORES WHICH ARE MERELY FIXED ASSETS. WHEN THE BALANCE ITA NO . 4 5 / CTK ./2016 11 SHEET IS EXAMINED IN THE LIGHT OF THE RETURN OF INCOME FILED BY THE ASSESSEE, IT LEADS TO THE IRRESISTIBLE CONCLUSION THAT WHEN THE ASSESSEE COMPANY HAS NOT SHOWN ANY INCOME THEN HOW IT WAS IN A POSITION TO ADVANCE HUGE LOAN OF RS.40,06,198/ - . 1 8 . NOT ONLY THIS, IT IS CATEGORICALLY BROUGHT ON RECORD BY THE REVENUE BY RECORDING THE STATEMENT OF ASSESSEE HIMSELF THAT THROUGH ONE OF HIS FRIEND , THE ASSESSEE CAME INTO CONTACT OF M/S. KHOOBSURAT LIMITED. IT IS OTHERWISE IMPROBABLE TO BELIEVE THAT AT THE INSTANCE OF ONE FRIEND WHOSE ANTECEDENTS HAVE NOT COME ON RECORD, A COMPANY M/S. KHOOBSURAT LIMITED SITUATED AT KOLKATA, HAS ADVANCED A HUGE LOAN OF RS.40,06,198/ - TO THE ASSESSEE. 1 9 . FURTHERMORE, WHEN ALL THESE FACTS ARE EXAMINED IN THE LIGHT OF THE FACT THAT THE ASSESSEE HAS MISERABLY FAILED TO PROVE THE PHYSICAL EXISTENCE OF M/S. KHOOBSURAT LIMITED BY PRODUCING ANY OF ITS DIRECTOR DURING ASSESSMENT PROCEEDINGS AND AS PER CIRCUMSTANTIAL EVIDENCE COLLECTED BY THE REVENUE, M/S. KHOOBSURAT LIMITED FOUND TO BE CLOSED FOR SO MANY MONTHS , THE DOCUMENTARY EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE DOES NOT INSPIRE CONFI DENCE TO BELIEVE THE ASSESSEES STORY. 20. MERELY BECAUSE OF THE FACT THAT THE PAYMENT WAS RECEIVED BY CHEQUE OR THAT THE LENDER COMPANY APPEARS ON THE FILE OF REGISTRAR OF COMPANIES, REGISTERED WITH THE STOCK EXCHANGE OF THE COMPANY, ITA NO . 4 5 / CTK ./2016 12 IT IS NOT PROVED TH AT THE TRANSACTION IS GENUINE UNLESS CREDITWORTHINESS OF THE LENDER COMPANY IS PROVED. EVEN DURING THE ASSESSMENT PROCEEDINGS AS WELL AS FIRST APPELLATE PROCEEDINGS BEFORE THE LD. CIT (A), THE ASSESSEE HAS NOT OPTED TO GET THE PHYSICAL EXISTENCE OF M/S. K HOOBSURAT LIMITED ESTABLISHED BY MOVING ANY APPLICATION. 2 1. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE JUDGMENT RELIED UPON BY LD. AR FOR THE ASSESSEE, VIZ., CIT VS. DWARKADHIS INVESTMENT (P) LTD. 330 ITR 298 (DEL.), CIT, ORISSA VS. ORISSA CORPORATIO N P. LTD. 159 ITR 78 (SC), CIT VS. TANIA INVESTMENT (P) LTD. 322 ITR 394 (BOM.), CIT VS. METACHEM INDUSTRIES 245 ITR 160 (MP) AND CIT VS. P.K. NOORJAHAN 237 ITR 570 (SC) ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 22. SO AO/CIT (A) HAVE RIGHTLY REACHED AT THE CONCLUSION THAT M/S. KHOOBSURAT LIMITED IS A COMPANY EXISTING ON PAPER ONLY AND ITS PHYSICAL EXISTENCE HAS NEVER BEEN ESTABLISHED AND IT ALSO REMAINED UNEXPLAINED ON THE FILE AS TO WHY A COMPANY IN KOLKATA WOULD ADVANCE UNSE CURED LOAN OF MORE THAN RS.40,00,000/ - TO A PROPRIETORSHIP CONCERN OF TRANSPORT CONTRACT SITUATED IN ORISSA. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED IN THE IMPUGNED ORDER PASSED BY THE CIT (A) SO FAR AS ADDITION OF ITA NO . 4 5 / CTK ./2016 13 RS.40,06,198/ - IS CONCERNED. SO, THE FINDINGS RETURNED BY THE LD. CIT (A) IN THIS REGARD ARE HEREBY AFFIRMED. 23 . IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE ADDITION MADE BY AO/AFFIRMED BY LD. CIT (A) TO THE TUNE OF RS.7,00,000/ - ( IN CASE OF SMT. USHA AGARWAL, ELLOR A MOHANTY, ASHUTOSH MOHAPATRA & SMT. URMILA MODI OF RS.2,50,000/ - , RS.1,50,000/ - , RS.1,00,000/ - & RS.2,00,000/ - RESPECTIVELY) IS HEREBY ORDERED TO BE DELETED, HOWEVER APPEAL OF THE ASSESSEE QUA THE REMAINING ADDITION OF RS.40,06,198/ - MADE ON ACCOUNT OF UN SECURED LOAN FROM M/S. KHOOBSURAT LIMITED IS HEREBY DISMISSED. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. O RDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF MAY , 201 7 . SD/ - SD/ - ( N.S. SAINI ) ( KULDIP SINGH ) ACCOUNTANT MEM BER JUDICIAL MEMBER DATED THE 29 TH DAY OF MAY , 201 7 / TS COPY OF THE ORDER FORWARDED TO: 1.APPELLANT - SHRI RAKESH MODI, COLLEGE ROAD, KEONJHAR 758 001. 2.RESPONDENT - DCIT, CIRCLE 1 (1), SAMBALPUR. 3.CIT 4.CIT (A) , CUTTACK . 5.DR (ITAT), CUTTACK . 6. GUARD FILE //TRUE COPY// BY ORDER SR. PRIVATE SECRETARY , ITAT , CUTTACK