Income Tax officer 5 (1), Indore V. M/s Satyamitra Infrastructure Pvt. Ltd, Indore, Indore

ITA 451/Ind/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5992 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN
• Assessee Lawyers: S N AGRAWAL
• Keywords: Unexplained cash credit; Rejection of books of accounts; Capital asset converted into stock in trade; Question of law
• Section: 143(3); 133(6); 13; 22; 131; 69; 145; 15; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.451/IND/2017 ASSESSMENT YEAR:2012-13 ITO - 5(1), INDORE / VS. M/S. SATYAMITRA INFRASTRUCTURE P. LTD., INDORE (REVENUE ) (ASSESSEE ) P.A. NO. AANCS 8880 J APPELLANT BY SHRI RAJ I B JAIN , CIT - DR RESPONDENT BY SHRI S.N. AGRAWA L, CA DATE OF HEARING: 07.07.2021 DATE OF PRONOUNCEMENT: 07.09.2021 / O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE REVENUE FOR ASSESSMENT YEAR 2012-13 IS DIRECTED AGA INST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-II (IN SHORT LD. CIT], INDORE DATED 08.03.2017 WHICH IS ARISING OUT OF THE ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT 1961 ( IN S HORT THE ACT) DATED 26.03.2015 FRAMED BY ACIT-5(1) INDORE. BRIEF FACTS ARE THAT SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 2 THE ASSESSEE FILED ITS RETURN OF TOTAL INCOME FOR T HE ASSESSMENT YEAR 2012-13 ON 30-09-2012 DECLARING TOTAL INCOME A T RS NIL. THE ASSESSING OFFICER MADE ADDITIONS OF RS. 2,42,25 ,698/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS, RS.2,84,555/- ON ACCOUNT OF DISALLOWANCE OF LOSS AS CLAIMED AND RS.61,84,343/- ON ACCOUNT OF ESTIMATION OF INCOME UNDER SECTION 145 OF THE ACT. GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) IS JUSTIFIED IN DIRECTING TO DELETE THE ADDITION OF RS. 2,42,25,698/- MADE U/S 68 OF THE ACT WITHOUT APPREC IATING FACTS OF THE CASE IN TOTALITY. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) IS JUSTIFIED IN DIRECTING TO DELETE THE ADDITION MADE U/S 68 OF THE ACT BY SHIFTING THE ONUS ON THE AO IN STEAD OF THE ASSESSEE WHEREAS ITS SETTLED LAW IN VIEW OF THE PROVISIONS LAID DOWN VI] S 68 OF THE IT ACT THAT THE ASSESSEE IS SUPPOSED TO FURNISH ENTIRE DETAILS IN SUPPORT OF CLAIM MADE BY HIM IN ITS BOOKS OF ACCOUNTS AND PARTICULAR LY WITH RESPECT TO THE CREDIT ENTRIES IN ITS BOOKS OF ACCOU NTS FOR ALLEGED LOANS. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) IS JUSTIFIED IN DIRECTING TO DELETE THE ADDITION MADE U/S 68 OF THE ACT, EVEN WHEN THE ASSESSEE HAS UTTER LY FAILED IN ESTABLISHING IDENTITY, CREDITWORTHINESS OF ALLEG ED LENDERS AND GENUINENESS OF THE LOAN TRANSACTIONS. 3.1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) IS JUSTIFIED IN CONSIDERING THE AD DITIONAL EVIDENCES PRODUCED BEFORE CIT(A) FOR LOANS WITHOUT AFFORDING OPPORTUNITY TO AO WHICH IS AGAINST PRINCIPLE OF NAT URAL JUSTICE AND RULE 46A OF IT RULES. 4.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) IS JUSTIFIED IN DIRECTING TO DELETE THE ADDITION OF RS. 61,84,343/- MADE AFTER REJECTION OF BOOKS OF ACCOUN TS WITHOUT APPRECIATING FACTS THAT THE ASSESSEE COULD NOT FURNISH REQUISITE DETAILS AND BILLS & VOUCHERS REGARDING CORRECTNESS OF INCOME AND EXPENDITURE WHICH CAUSED SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 3 REJECTION OF BOOKS OF ACCOUNTS. 5.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) IS JUSTIFIED IN ALLOWING THE CLAIM OF LO SS CLAIMED BY ASSESSEE OF RS. 2,84,555/- WITHOUT CONSIDERING THE FINDINGS OF THE ASSESSING OFFICER. 2. GROUND NOS.1 TO 3.1 RELATE TO DELETION OF ADDITI ON OF RS.2,42,25,698/- ON ACCOUNT OF UNEXPLAINED CASH CRE DITS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE COMPANY U/S 68 OF THE I.T. ACT. BRIEF FACTS AS CULL ED OUT FROM THE RECORDS ARE THAT THE ASSESSING OFFICER ADDED THE FO LLOWING AMOUNTS AS RECEIVED FROM THE DIRECTORS OF THE ASSES SEE COMPANY: S.NO NAME OF THE LOAN CREDITORS PA NO AMOUNT [IN RS] 1 PRAMOD KHANDELWAL ADUPK6514C 74,50,000 2 SATYENDRA BHAWASAR ACIPB0657L 89,20,000 TOTAL 1,63,70,000 THE ASSESSEE WAS ASKED TO JUSTIFY THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE LOAN AND IN REPLY, THE ASSES SEE FILED THE FOLLOWING DETAILS AND DOCUMENTS:- [I] THE ASSESSEE HAS RECEIVED ENTIRE AMOUNT OF LOA N THROUGH ACCOUNT PAYEE CHEQUES. [II] PA NO OF THE LOAN CREDITORS HAVE ALSO BEEN PRO VIDED. [III] CONFIRMATION OF LOAN CREDITORS HAVE ALSO BEEN FILED. [IV] INCOME TAX RETURN ALONG WITH ACKNOWLEDGEMENT. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 4 HOWEVER, THE ASSESSING OFFICER MADE ADDITON OF RS.1 ,63,70,000/- IN THE INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED, THE ASSESSEE CHALLENGED THE AC TION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A). THE LD. CI T(A) HAVING GONE THROUGH THE FACTS, SUBMISSIONS AND JUDICIAL PRONOUNC EMENTS THEREOF DELETED THE ADDITION. THE RELEVANT DISCUSSI ON MADE BY LD. CIT(A) IS REPRODUCED HEREUNDER: GROUND NO.2 & 3 3. BOTH THE GROUNDS OF APPEAL ARE WITH REGARD TO TH E ADDITION OF RS.1,63,70,000/- MADE ON ACCOUNT OF CASH CREDIT U/S 68 OF THE INCOME TAX ACT. I HAVE CAREFULLY GONE THROUGH THE A SSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT IN THIS R EGARD. 3.1 IN THE YEAR UNDER CONSDIERATION THE ASSESSING O FFICER HAS ADDED THE LOAN AS TAKEN BY THE APPELLANT FROM THE FOLLOWI NG DIRECTORS:- S.NO NAME OF THE LOAN CREDITORS PA NO AMOUNT [IN R S] 1 PRAMOD KHANDELWAL ADUPK6514C 74,50,000 2 SATYENDRA BHAWASAR ACIPB0657L 89,20,000 TOTAL 1,63,70,000 3.2 THE APPELLANT HAD TAKEN LOAN FROM ITS DIRECTORS . THE APPELLANT HAS SUBMITTED THAT THE IDENTITY OF THE DIRECTORS OF THE COMPANY WAS BEYOND DOUBT. THE APPELLANT WAS ASKED TO JUSTIFY TH E IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN AND IT FILED THE FOLLOWING DETAILS AND DOCUMENTS:- [I] THE ASSESEE HAS RECEIVED ENTIRE AMOUNT OF LOAN THROUGH AN ACCOUNT PAYEE CHEQUES. [II] PA NO OF THE LOAN CREDITORS HAVE ALSO BEEN PRO VIDED [III] CONFIRMATION OF LOAN CREDITORS HAVE ALSO BEEN FILED [IV] INCOME TAX RETURN ALONG WITH ACKNOWLEDGEMENT SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 5 3.3 THUS, IT APPEARS THAT THE APPELLANT HAD FILED S UFFICIENT DOCUMENTS TO JUSTIFY THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITORS. THE ASSESSING OFFICER IN CAS E OF ANY DOUBT OUGHT TO HAVE MADE INQUIRIES FROM THE ASSESSING OFF ICER WHERE THE LOAN CREDITORS ARE REGULALRY ASSESSED TO TAX. HOWEV ER, IT HAS BEEN ARGUED BY THE APPELLANT THAT THE ASSESSING OFFICER ADOPTED THE SIMPLEST WAY IN ADDING THE ENTIRE AMOUNT OF LOA N TO THE INCOME OF THE APPELLANT MERELY FOR THE REASON THAT BANK ST ATEMENT OF THE DIRECTORS HAVE NOT BEEN FILED BY THE APPELLANT DURI NG THE COURSE OF ASSESSMENT PROCEEDING. 3.4 THE APPELLANT HAS THUS CLAIMED THAT DURING THE COURSE OF ASSESSMENT PROCEEDING, IT HAD PROPERLY DISCHARGED P RIMARY ONUS LYING ON IT AND HENCE, THE S.NO NAME OF THE LOAN CR EDITOR PAN NO RELATION AMOUNT [RS] 1 PRAMOD KHANDELWAL ADUPK6514C DIRECTOR 7450000 2 SATYENDRA BHAWASAR ACIPB0657L DIRECTOR 8920000 16370000 ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING THE L OAN AMOUNT TO THE INCOME OF THE APPELLANT MORE SO WHEN THE LOAN WAS R ECEIVED FROM THE DIRECTORS OF THE COMPANY ITSELF. I FIND MERIT I N THE SUBMISSION OF THE APPELLANT. 3.5 FURTHER, IF THE ASSESSING OFFICER CONSIDERED TH E BANK STATEMENT AS NECESSARY, HE COULD HAVE DIRECTLY CALLED THE SAM E FROM THE LOAN CREDITORS BUT THE ASSESSING OFFICER DID NOT CHOOSE TO DO SO. 3.6 IN PARA {VI} ON PAGE NO 9 OF THE ASSESSMENT ORD ER, THE ASSESSING OFFICER HIMSELF STATED THAT IN CASE OF LOAN FROM OU TSIDE PARTIES THE APPELLANT NEED TO FILE COPY OF CONFIRMATION ONLY AN D IN LAST LINE THE ASSESSSING OFFICER HIMSELF STATED THAT THE ASSESSIN G OFFICER CANNOT ASK THE APPELLANT TO PROVE THE SOURCE OF SOURCE. LAST LINE OF PARA [VI] OF PAGE NO 9 REPRODUCED AS U NDER:- [VI].............................................. ............. ........................... ................... ...... .... .... THIS HAS NOW BEEN JUDICIALLY ESTABLISHED THAT THE A O CAN NOT ASK THE APPELLANT TO PROVE THE SOURCE OF SOURCE. 3.7 IN PARA [VII] ON PAGE NO 9 & 10, THE ASSESSING OFFICER HIMSELF NOTED THE CONTRADICTORY VERSION WHEREIN IT WAS STAT ED THAT THE ASSESSING OFFICER CAN ISSUE SUMMONS AND ASK FROM TH E APPELLANT TO FURNISH SOURCE OF SOURCE AND IF THE ASSESSING OFFIC ER IS NOT SATISFIED SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 6 WITH THE SOURCE OF SOURCE, HE CAN AGAIN ASKED FROM THE APPELLANT TO EXPLAIN THE SOURCE OF CREDIT IN HIS CASE. THE SAID VERSION OF THE ASSESSING OFFICER IS CONTRADICTORY WITH THE VERSION AS RECORDED IN PARA [VI] ON PAGE NO 9 AND AS THE LAW STANDS TODAY, THE SAID VERSION IS ALSO NOT THE CORRECT VERSION. THUS, THE APPELLAN T ARGUED THAT IF THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE SOURCE OF SOURCE, IN THAT CASE HE HAD THE RIGHT TO TRASNFER THE SAID INFORMAT ION TO THE ASSESSING OFFICER OF THE UNSECURED LOAN CREDITORS B UT NO NEGATIVE INFERENCE COULD BE DRAWN IN THE CASE OF THE APPELLA NT. I FIND MERIT IN THE SUBMISSIONS OF THE APPELLANT. THE AO CAN ALWAYS CALL FOR THE BANK ACCOUNTS OF THE CREDITORS DIRECTLY FROM THE BA NK, IF HE FEELS THAT THERE IS SOME AMBIQUITY REGARDING THE SAME. THE AO HAS VAST POWER IN THIS REGARD BOTH UNDER SECTION 133(6) AND 131(1) WHICH THE AO HAS NOT CHOOSEN TO DO IN THE INSTANT CASE. 3.8 THE APPELLANT HAD DURING THE COURSE OF ASSESSME NT PROCEEDING FILED COPY OF CONFIRMATION LETTER DULY SIGNED BY TH E LOAN CREDITORS AND ALSO COPY OF ACKNOWLEDGEMENT AND COMPUTATION OF INC OME OF THE LOAN CREDITORS AND THEREFORE, APPARENTLY, THE APPEL LANT HAD PROPERLY DISCHARGED ONUS LYING ON IT. 3.9 ON RECEIPT OF INCOME TAX ASSESSMENT DETAIL, THE ASSESSING OFFICER COULD FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE S. 68. ONE MUST NOT LOSE SIGHT OF T HE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE APPELL ANT NEED NOT TO PROVE THE SOURCE OF SOURCE. 3.23 THUS, IN VIEW OF THE ABOVE JUDICIAL PRONOUCEME NTS WHEN THE APPELLANT HAS PROPERLY DISCHARGED THE ONUS LYING ON IT BY FURNISHING THE VARIOUS DOCUMENTS MORE SO WHEN THE LOAN RECIEVE D BY THE APPELLANT RELATES TO THE DIRECTORS OF THE APPELLANT COMPANY, I FEEL THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING T HE SAID AMOUNT OF LOAN AS INCOME OF THE APPELLANT. THE ADDITION SO MA DE TO THE INCOME OF THE APPELLANT ON ACCOUNT OF LOAN IS DELET ED AND THESE GROUNDS OF APPEAL ARE ALLOWED. 5. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFOR E THIS TRIBUNAL. LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF THE ASSESSING OFFICE R. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 7 6. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE FINDING OF LD. CIT(A) AND REITERATED THE SUBMISSION S MADE BEFORE THE REVENUE AUTHORITIES. REFERENCE WAS ALSO MADE TO THE PAPER BOOK AND WRITTEN SUBMISSION/JUDICIAL PRONOUNCEMENTS CONTENDING THAT LD. CIT(A) HAVING APPRECIATED THE F ACTS AND MATERIAL ON RECORD IN THE LIGHT OF THE RELEVANT JUD ICIAL PRONOUNCEMENTS RIGHTLY DELETED THE ADDITION. LEARNE D COUNSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING JUDICIAL PRON OUNCEMENTS: MURLIDHAR LAHORIMAL VS CIT, 280 ITR 512 [GUJARAT]; PEOPLE GENERAL HOSPITAL LIMITED, 09 ITJ 481 [INDORE ]; CIT VS DWARKADHISH INVESTMENT [P] LTD, 45 DTR 281 [ DELHI] CIT VS METACHEM INDUSTRIES, 245 ITR 160 (MP) ASHOK PAL DAGA VS CIT, 220 ITR 452 (MP) CIT VS BARJATIYA CHILDREN TRUST 225 ITR 640 (MP) CIT VS ORISSA CORPORATION (P) LTD, 159 ITR 78 (SC) CIT V/S CREATIVE WORLD TELEFILMS LTD, 333 ITR 100 ( 2011) (BOM), SUMER CHAND JAIN VS CIT, 292 ITR 241 (MP) 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DEC ISIONS REFERRED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE FIND TH AT THE ASSESSEE FILED PAN OF THE LOAN CREDITORS, CONFIRMATION OF LO AN CREDITORS TO THE EFFECT THAT ENTIRE AMOUNT OF LOAN WAS TAKEN THR OUGH ACCOUNT PAYEE CHEQUES AND INCOME-TAX RETURN ALONG WITH SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 8 ACKNOWLEDGEMENT. SINCE THE ASSESSEE HAD TAKEN LOAN FROM ITS DIRECTORS, THE IDENTITY OF THE DIRECTORS OF THE ASS ESSEE WAS PROVED BEYOND ANY DOUBT. IT IS EVIDENT FROM THE ABOVE THAT THE ASSESSEE HAD FILED SUFFICIENT DOCUMENTS SO AS TO JUSTIFY THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDIT ORS. THE ASSESSING OFFICER DID NOT MAKE ANY INQUIRY FROM THE ASSESSING OFFICER WHERE THE LOAN CREDITORS ARE REGULALRY ASSE SSED TO TAX AND SIMPLY ADDED THE ENTIRE AMOUNT OF LOAN TO THE TOTAL INCOME OF THE ASSSESSEE MERELY FOR THE REASON THAT BANK STATEMENT OF THE DIRECTORS WERE NOT BEEN FILED BY THE ASSESSEE DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. WE FIND THAT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE DISCHARGED THE PRIMARY ONUS AS CAST UPON IT UNDER SECTION 68 OF THE I.T. A CT BECUASE THE AMOUNT OF LOAN WAS RECEIVED FROM THE DIRECTORS OF T HE ASSESSEE. THE ASSESSING OFFICER FAILED TO CALL THE BANK STATE MENTS FROM THE LOAN CREDITORS AND MERELY ADDED THE AMOUNT OF LOAN TO THE TOTAL INCOME OF THE ASSESSEE. WE FIND TAHT THE ASSESSING OFFICER HIMSELF NOTED THAT IN CASE OF LOAN FROM OUTSIDE PARTIES, TH E ASSESSEE NEED TO FILE COPY OF CONFIRMATION ONLY AND IN LAST LINE OF PAGE 9 OF THE ASSESMENT ORDER, THE ASSESSING OFFICER NOTED THAT T HE ASSESSING OFFICER CANNOT ASK THE ASSESSEE TO PROVE THE SOURCE OF SOURCE. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 9 FURTHER, THE ASSESSING OFFICER AT PAGE NOS 9 & 10 O F THE ASSESSMENT ORDER ALSO NOTED THAT THE ASSESSING OFFI CER CAN ISSUE SUMMONS AND ASK FROM THE ASSESSEE TO FURNISH SOURCE OF SOURCE AND IF THE ASSESSING OFFICER IS NOT SATISIFIED WITH THE SOURCE OF SOURCE, HE CAN AGAIN ASK FROM THE ASSESSEE TO EXPLA IN THE SOURCE OF CREDIT IN HIS CASE. THIS VIEW OF THE ASSESSING O FFICER WAS CONTRADICTORY WITH THE EARLIER VIEW AS NOTED ON LAS T LINE OF PAGE 9 OF THE ASSESSMENT ORDER. IN THIS VIEW OF THE MATTER , WE ARE OF VIEW THAT THE ASSESSING OFFICER FAILED TO APPRECIATE THE FACT THAT IF HE WAS NOT SATISFIED WITH THE SOURCE OF SOURCE, IN THA T CASE, HE HAD THE RIGHT TO TRANSFER THE SAID INFORMATION TO THE A SSESSING OFFICER OF THE UNSECURED LOAN CREDITORS BUT NO NEGATIVE INF ERENCE COULD HAVE BEEN DRAWN IN THE CASE OF THE PRESENT ASSESSEE IN ABSENCE OF ANY COGENT MATERIAL ON RECORD. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD FILED THE AFORESAID DOCU MENTS IN SUPPORT OF ITS CLAIM AND THEREFORE THE ASSESSEE HAD PROPERLY DISCHARGED ONUS LYING ON IT. WE FURTHER FIND THAT T HE ASSESSEE IN ADDITION TO THE AFORESSAID PAPERS ALSO FILED THE FO LLOWING DOCUMENTS: [I] COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE LOAN CREDITORS AND CONTRA ACCOUNT IN THE BOOKS OF T HE APPELLANT. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 10 [II] COPY OF BANK STATEMENT OF SHRI SATYENDRA BHAWS AR WITH STANDARD CHARTERED BANK AND WITH PUNJAB NATION AL BANK DULY HIGHLIGHTING THE ENTRIES RELATED TO THE L OAN AS TAKEN BY THE ASSESSEE FROM THE LOAN CREDITOR. [III] COPY OF BANK STATEMENT OF SHRI PRAMOD KHANDEL WAL WITH AXIS BANK LIMITED AND WITH HDFC BANK DULY HIGHLIGHTING THE ENTRIES RELATED TO THE LOAN AS TAK EN BY THE ASSESSEE FROM THE LOAN CREDITOR. [IV] COPY OF PERSONAL BALANCE SHEET OF THE LOAN CRE DITORS WHEREIN THE AMOUNT AS ADVANCED TO THE ASSESSEE WAS PROPERLY REFLECTED. IN VIEW OF THE ABOVE FACTS, WE FIND THAT IT IS NOT THE CASE THAT LOAN CREDITROS REFUSED TO HAVE ADVANCED THE AMOUNT OF LO AN TO THE ASSESSEE RATHER THE ASSESSEE THROUGH DOCUMENTARY EV IDENCES PROVED THAT THE AMOUNT OF LOAN WAS RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND INCOME-TAX RETURNS OF THE LOAN CR EDITORS WERE ALSO PROVIDED. THUS, SOURCE OF LOAN WAS DULY ESTABL ISHED BY THE ASSESSEE. 8. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS METACHEM INDUSTRIES AS REPORTED IN 245 ITR 160 HAS HELD AS UNDER: 3. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. SEC.68 OF THE ACT OF 1961 SAYS THAT WHERE ANY SUM IS FOUND CREDIT ED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YE AR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE, SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 11 THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE ITO, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. THEREFORE, ACCORDING TO S. 68 , THE FIRST BURDEN IS ON THE ASSESSEE TO SATISFACTORILY EXPLAIN THE CREDIT ENTRY IN THE B OOKS OF ACCOUNT OF THE PREVIOUS YEAR. IF THE EXPLANATION GIVEN BY THE ASSESSEE IS SATISFACTORY, THEN THAT ENTRY WILL NOT BE CHARGED W ITH THE INCOME OF THE PREVIOUS YEAR OF THE ASSESSEE. IN CASE THE E XPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY OR THE SOURCE OFFERED BY THE ASSESSEE-FIRM IS NOT SATISFACTORY, THEN IN T HAT CASE, THE AMOUNT SHOULD BE TAKEN TO BE THE INCOME OF THE ASSE SSEE. IN THE PRESENT CASE, THE AO DID NOT FEEL SATISFIED WITH TH E EXPLANATION GIVEN BY THE ASSESSEE AND ACCORDINGLY ASSESSED ALL THE THREE CREDIT ENTRIES TO THE ACCOUNT OF THE ASSESSEE AS TH E INCOME. 4. ON APPEAL, THE CIT(A) EXAMINED THE MATTER IN DET AIL AND FOUND THAT SHRI S.K. GUPTA WAS THE REAL OWNER OF THE BUSI NESS. THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND TO BE S ATISFACTORY AND HE DELETED THE AFORESAID THREE ENTRIES. THE SAM E FINDING OF FACT HAS BEEN AFFIRMED BY THE TRIBUNAL. ONCE IT IS ESTABLISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR PERSON , BE HE A PARTNER OR AN INDIVIDUAL, THEN THE RESPONSIBILITY O F THE ASSESSEE- FIRM IS OVER. THE ASSESSEE-FIRM CANNOT ASK THAT PER SON WHO MAKES INVESTMENT WHETHER THE MONEY INVESTED IS PROP ERLY TAXED OR NOT. THE ASSESSEE IS ONLY TO EXPLAIN THAT THIS INVESTMENT HA S BEEN MADE BY THE PARTICULAR INDIVIDUAL AND IT IS RE SPONSIBILITY OF THAT INDIVIDUAL TO ACCOUNT FOR THE INVESTMENT MADE BY HIM. IF THAT PERSON OWNS THAT ENTRY, THEN, THE BURDEN OF THE ASS ESSEE-FIRM IS DISCHARGED. IT IS OPEN FOR THE AO TO UNDERTAKE FURT HER INVESTIGATION WITH REGARD TO THAT INDIVIDUAL WHO HA S DEPOSITED THIS AMOUNT. 5. SO FAR AS THE RESPONSIBILITY OF THE ASSESSEE IS CONCERNED, IT IS SATISFACTORILY DISCHARGED. WHETHER THAT PERSON IS I NCOME-TAX PAYER OR NOT OR FROM WHERE HE HAS BROUGHT THIS MONE Y IS NOT THE RESPONSIBILITY OF THE FIRM. THE MOMENT THE FIRM GIV ES SATISFACTORY EXPLANATION AND PRODUCES THE PERSON WHO HAS DEPOSIT ED THE AMOUNT, THEN THE BURDEN OF THE FIRM IS DISCHARGED A ND IN THAT CASE THAT CREDIT ENTRY CANNOT BE TREATED TO BE INCO ME OF THE FIRM FOR THE PURPOSES OF INCOME-TAX. IT IS OPEN FOR THE AO TO TAKE APPROPRIATE ACTION UNDER S. 69 OF THE ACT AGAINST T HE PERSON WHO HAS NOT BEEN ABLE TO EXPLAIN THE INVESTMENT. IN THE PRESENT CASE, THERE IS THE CONCURRENT FINDING OF BOTH THE CIT(A) AS WELL AS OF THE TRIBUNAL THAT THE FIRM HAS SATISFACTORILY EXPLAINED THE AFORESAID ENTRIES. 6. WE ARE, THEREFORE, OF THE OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS CORRECT AND THE AFORESAID QUESTION IS A NSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 12 9. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASHOK PAL DAGA VS CIT AS REPORTED IN 220 ITR 452 HAS HELD AS UNDER: 7. AS THE APPLICANT SATISFIED THE AUTHORITY AS TO THE IDENTITY OF THE THIRD PARTY AND ALSO SUPPLIED THE RELEVANT EVIDENCE SHOWING PRIMA FACIE THAT THE ENTRIES WERE NOT FICTITIOUS, T HE INITIAL BURDEN CAN BE SAID TO BE DISCHARGED BY THE APPLICANT- ASSE SSEE. IN VIEW OF THE FACTUAL MATRIX AND LEGAL POSITION, WE ARE SA TISFIED THAT THE AFORESAID TWO QUESTIONS ARE QUESTIONS OF LAW ARISIN G OUT OF THE ORDER AND ARE REQUIRED TO BE REFERRED FOR OUR OPINI ON. 10. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS BARJATIYA CHILDREN TRUST AS REPORTED IN 225 ITR 640 HELD AS UNDER: 3. WE FIND THAT THE TRIBUNAL DISMISSED THE APPEAL OF THE DEPARTMENT AND HELD AS UNDER: 'HE FOUND THAT IN THE BALANCE-SHEET THE LOAN OF RS. 20,000 GIVEN TO THE ASSESSEE-TRUST WAS MENTIONED. UNDER THESE CI RCUMSTANCES, THE DEPARTMENT SHOULD NOT HAVE ANY GRIEVANCE AS TO VIOLATION OF R. 46A. THE ITO COULD HAVE TAKEN PAINS TO EXAMINE THE INCOME-TAX FILE OF SMT. URMILA AGRAWAL BUT INSTEAD HE CHOSE TH E EASIER COURSE OF ORDERING PRODUCTION OF THE CREDITOR WHICH CANNOT BE APPRECIATED. THE ASSESSING OFFICER SHOULD REALISE T HE INCONVENIENCES WHICH AN ASSESSEE FACES IN PRODUCING THE CASH CREDITOR BEFORE HIM. THE PRODUCTION OF THE CASH CRE DITOR IN PERSON SHOULD BE INSISTED UPON ONLY WHEN THE GENUINENESS O F THE TRANSACTIONS CANNOT BE ESTABLISHED WITH THE HELP OF DOCUMENTS AND THE RECORD OF THE IT DEPARTMENT ITSELF. I FIND NO INFIRMITY IN THE ORDER OF THE DEPUTY CIT (A.). IT IS SUSTAINED.' 4. ON APPLICATION UNDER S. 256(1) OF THE ACT, THE T RIBUNAL HELD THAT IT CORRECTLY REACHED THE CONCLUSION THAT THE ADDITI ON WAS UNWARRANTED AND NO REFERABLE QUESTION OF LAW AROSE OUT OF THE CONCLUSION REACHED ON APPRECIATION OF FACTS PROPERL Y. 5. IN OUR VIEW, THE FINDING ABOUT THE GENUINENESS I S A FINDING OF FACT BASED ON PROPER APPRECIATION OF FACTS AND DOES NOT MANIFEST ANY ILLEGALITY OR PERVERSITY. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 13 11. THE HON'BLE APEX COURT IN THE CASE OF CIT VS OR ISSA CORPORATION (P) LTD AS REPORTED IN 159 ITR 78 HELD AS UNDER: 13. IN THIS CASE, THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE K NOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME -TAX AS SESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER S. 131 AT THE INST ANCE OF THE ASSESSEE, DID NOT PURSUE THE MATTER FURTHER. THE RE VENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CR EDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY OR WERE SUCH WHO COULD ADVANCE THE ALLEGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTA NCES, THE ASSESSEE COULD NOT DO ANYTHING FURTHER. IN THE PREM ISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE H AS DISCHARGED THE BURDEN THAT LAY ON HIM, THEN IT COULD NOT BE SA ID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION IS BASED ON SOME EVIDEN CE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH ARISES. 12. HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/ S CREATIVE WORLD TELEFILMS LTD AS REPORTED IN 333 ITR 100 (201 1) IN AN IDENTICAL CASE HELD AS UNDER: IN THE CASE IN HAND , IT IS NOT DISPUTED THAT THE ASSESSEE HAD GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREH OLDER, THEIR PAN/GIR NUMBER AND HAD ALSO GIVEN THE CHEQUE NUMBER , NAME OF THE BANK. IT WAS EXPECTED ON THE PART OF THE ASS ESSING OFFICER TO MAKE PROPER INVESTIGATION AND REACH THE SHAREHOL DERS. THE ASSESSING OFFICER DID NOTHING EXCEPT ISSUING SUMMON S WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSEMENT NOT TRACEABLE. IN OUR CONSIDERED VIEW, THE ASSESSING O FFICER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BAN K ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SH AREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAILS AND PARTICU LARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER. IN THE AB OVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNO T BE FAULTED. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE A PPEAL. IN THE RESULT, THE APPEAL IS DISMISSED IN LIMINE WITH NO O RDER AS TO COST. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 14 13. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F SUMER CHAND JAIN VS CIT AS REPORTED IN 292 ITR 241 HAS DI SCUSSED THE SAID CASE AND HELD AS UNDER: 12. IN THE CASE OF CIT VS. MEHROTRA BROTHERS (2004 ) 270 ITR 157 (MP) A DIVISION BENCH OF THIS COURT PLACING RELIANC E ON THE DECISIONS RENDERED IN THE CASES OF SHANKAR INDUSTRI ES VS. CIT (1978) 114 ITR 689 (CAL), GEE VEE ENTERPRISES VS. A DDL. CIT 1975 CTR (DEL) 61 : (1975) 99 ITR 375 (DEL), CIT VS. KOH INOOR TOBACCO PRODUCTS (P) LTD. (1998) 148 CTR (MP) 536 : (1998) 234 ITR 557 (MP), NANAK CHANDRA LAXMAN DAS VS. CIT (1982) 28 CT R (ALL) 280 : (1983) 140 ITR 151 (ALL) AND MALABAR INDUSTRI AL CO, LTD. VS. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC), EXPRESSED THE VIEW THAT WHEN THE IDENTITY OF THE PARTIES IS GIVEN THE GENUINENESS OR THE CAPACITY OF THE LENDERS AND TRAN SACTION ARE NOT TO BE DISCARDED ON THE GROUND THAT THE ASSESSEE HAD NOT EXPLAINED SATISFACTORILY THE CASH CREDIT IN THE BOO KS OF ACCOUNT OF THE FIRM AND DISCHARGED THE BURDEN. 14. IN VIEW OF THE ABOVE FACTS IN THE LIGHT OF AFOR ESAID JUDICIAL PRONOUNCEMENTS, IT IS CLEARLY EVIDENT THAT THE ASSE SSEE HAD PROPERLY DISCHARGED THE ONUS LYING ON IT BY FURNISH ING VARIOUS SUPPORTING DOCUMENTS MORESO WHEN THE LOAN AS RECIEV ED BY THE ASSESSEE WAS ONLY RELATED TO THE DIRECTORS OF THE ASSESSEE. THUS, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING TH E SAID AMOUNT OF LOAN TO THE TOTAL INCOME OF THE ASSESSEE. FURTHE R, THE REVENUE COULD NOT BRING ANY CONTRARY MATERIAL ON RECORD TO REBUT THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, THE ADDITI ON ON ACCOUNT OF LOAN TAKEN FROM DIRECTORS WAS RIGHTLY DELETED BY TH E LD. CIT(A). THEREFORE, WE CONFIRM THE ACTION OF THE LD. CIT(A) ON THIS POINT. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 15 15. SO FAR AS THE ADDITION OF RS.78,55,698/- MADE O N ACCOUNT OF LOANS RECEIVED BY THE ASSESSEE FROM SATYAMITRA VYAP ARIK SURAKSHA SAHAKARI SANSTHA MARYADIT IS CONCERNED, TH E FACTS AS CULLED OUT FROM THE RECORD OF REVENUE AUTHORITIES A RE THAT THE ASSESSING OFFICER ADDED THE LOAN AS RECEIVED FROM T HE SAID SOCIETY ON THE GROUND THAT DIRECTORS OF THE ASSESSEE, THEIR FAMILY MEMBERS AND FRIENDS ARE THE OFFICE BEARERS/PROMOTER S OF THE SOCIETY AND FURTHER CONFIRMATION, ITR, BANK STATEME NT AND PAN OF THE LOAN CREDITOR WAS NOT PROVIDED. 16. BEING AGGRIEVED, THE ASSESSEE CHALLENGED THE AC TION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A). THE LD. CI T(A) HAVING GONE THROUGH THE FACTS, SUBMISSIONS AND JUDICIAL PRONOUNC EMENTS THEREOF DELETED THE ADDITION. THE RELEVANT DISCUSSI ON MADE BY LD. CIT(A) IS REPRODUCED HEREUNDER: 4. THIS GROUND OF APPEAL IS WITH REGARD TO THE ADD ITION OF RS.78,55,698/- MADE ON ACCOUNT OF LOANS RECEIVED BY THE APPELLANT FROM SATYAMITRA VYAPARIK SURAKSHA SAHAKARI SANSTHA MARYADIT. THE ASSESSING OFFICER HAS ADDED THE LOAN AS RECEIVE D FROM THE SOCIETY FOR THE FOLLOWING REASONS:- 4.1 THE APPELLANT COMPANY MAINTIANING IS OVERDRAFT ACCOUNT WITH SMVSS [SATYAMITRA VYAPARIK SURAKSHA SAHAKARI SANSTH A MARYADIT ] AND LIMIT OF THE APPELLANT WAS OF RS 80 LACS. THE APPELLANT HAS SUBMITTED THAT IT USED ITS OVERDRAFT ACCOUNT WITH T HE SOCIETY WITH REGULAR INTERVALS , WITHDREW CASH AND ALSO DEPOSITE D AMOUNT IN CASE OF SURPLUS AMOUNT WITH THE APPELLANT COMPANY. THE A PPELLANT HAS CLAIMED THAT THE COPY OF ACCOUNT OF THE APPELLANT I N THE BOOK OF SOCIETY HAS ALREADY BEEN FILED DURING THE COURSE OF ASSESSMENT SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 16 PROCEEDING. THE APPELLANT FURTHER SUBMITTED AS BELO W:- THE ASSESSING OFFICER FOR WANT OF PA NO AND ITR OF THE SOCIETY ADDED THE AMOUNT TO THE INCOME OF THE APPELLANT. TH AT DIRECTORS AND THEIR FAMILY MEMBERS ARE NOT IN THE BOARD OF THE SO CIETY AS ON THE DATE OF TAKING THE LOAN SIMILAR TO THE CASH CREDIT/ MORTGAGE LOAN OF THE BANK. HENCE, AS PER S.NO REASON FOR ADDITION 1 DIRECTORS THEIR FAMILY MEMBERS AND FRIENDS OF THE PRESENT COMPANY I S THE OFFICE BEARERS/ PROMOTORS OF THE SOCIETY 2 CONFIRMATION , ITR, BANK STATEMENT AND PA NO OF THE LOAN CREDITORS WAS NOT P ROVIDED. (1)PARA [VI] ON PAGE NO 9 OF THE ASSESSMENT ORDER, MERE FILING OF THE CONFIRMATION SUFFICE THE ENTIRE PURPOSE AND THE ASS ESSING OFFICER NEED NOT ASKED TO PROVE THE APPELLANT OTHER DETAILS . THAT WHETHER THE SAID SOCEITY IS FILING ITS INCOME TAX RETURN OR NOT IS NOT THE BUSINESS OF THE APPELLANT. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDING FILE COPY OF CONFIRMATION OF AMOUNT AS RECEIVED BY THE APPELLANT FROM THAT SOCIETY. THUS, THERE WAS NO JUSTIFICATION FOR MAKING ADDITION TO THE INCOME OF THE APPELLANT. 4.2 COPY OF INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2011-12 ALONG WITH THE COMPUTATION OF INCOME HAS BEEN SUBMI TTED BY THE APPELLANT. THE APPELLANT HAS SUBMITTED THE FOLLOWIN G IN THIS REGARD:- SINCE, THE SAID RETURN HAS ALREADY BEEN FILED BY T HE SAID SOCIETY WITH THE INCOME TAX DEPARTMENT. HENCE, THE ASSESSIN G OFFICER WOULD HAVE COLLECTED THE SAME FROM HIS COUNTERPART. PAN N O. OF THE SOCIETY IS AADAS2952D. THUS, THE ACKNOWLEDGMENT OF RETURN A S FILED BY THE APPELLANT MAY VERY KINDLY BE ACCEPTED AS PER RULE 4 6 A OF THE INCOME TAX ACT EVEN WHEN THE SAID RETURN WAS IN POS SESSION OF THE DEPARTMENT FROM THE DATE OF FILING OF THE RETURN I. E ON 19-03-2012 PRIOR TO THE DATE OF THE PASSING OF THE ASSESSMENT ORDER. THAT IN CASE OF SOCIETY THERE WAS SO MANY MEMBERS A ND THE SAID SOCIETY IS ENGAGED IN THE BUSINESS OF ACCEPTING DEP OSIT FROM ITS MEMBERS AND ALSO ADVANCED THE AMOUNT. THE APPELLANT HAVING LIMIT WITH SOCIETY FOR RS 80 LACS. THE APPELLANT COMPANY HAS REGULAR BUSINESS TRANSACTIONS WITH THAT SOCIETY. COPY OF AC COUNT OF THE SOCIETY IN THE BOOK OF THE APPELLANT FOR THE YEAR U NDER APPEAL AND ALSO FOR THE SUBSEQUENTS ARE ENCLOSED WHEREIN THE A PPELLANT HAS REPAID ENTIRE AMOUNT OF LOAN AS TAKEN FROM THE SOCI ETY. THE ASSESSING OFFICER WAS NOT CORRECT IN SAYING THAT CO NFIRMAITON WAS NOT FILED BY THE APPELLANT DURING THE COURSE OF ASSESSM ENT PROCEEDING. HOWEVER, THE APPELLANT HAD FILED COPY OF ACCOUNT OF THE APPELLANT IN THE BOOK OF THE SOCIETY AND THE SAME WAS ALSO TALLI ED. THE COPY OF ACCOUNT OF THE APPELLANT IN THE BOOK OF THE SOCIETY IS THE CONFIRMATION WHICH WAS FILED BY THE APPELLANT. THERE WAS NO SET FORMAT FOR THE CONFIRMATION BUT THE ACCOUNT BALANCE OF THE LOAN AC COUNT WAS SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 17 CONFIRMED BY THE LOAN CREDITORS IN ANY MODE CALLED CONFIRMATION. IN THE PRESENT CASE COPY OF ACCOUNT OF THE APPELLANT I N THE SOCIETY IS CALLED CONFIRMATION. 4.3 THE APPELLANT ALSO RELIED THE DECISIONS AS REFE RRED BELOW WHICH WERE ALSO RELIED UPON IN THE GROUND NOS 2 & 3:- MURLIDHAR LAHORIMAL VS CIT 280 ITR 512[ GUJARAT] PEOPLE GENERAL HOSPITAL LIMITED 09 ITJ 481 [ INDORE ] CIT VS DWARKADHISH INVESTMENT[P]LTD 45 DTR 281 [DEL HI] 4.4 THAT IN VIEW OF THE ABOVE, IT WAS SUBMITTED BY THE APPELLANT THAT ADDITION ON ACCOUNT OF OVERDRAFT LOAN AS TAKEN BY THE APPELLANT MADE BY THE ASSESSING OFFICER WAS NEITHER CORRECT N OR PROPER. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLAN T AND ALSO THE FACT THAT THE ACCOUNT BALANCE OF THE LOAN ACCOUNT W AS DULY CONFIRMED AND SUBMITTED DURING THE COURSE OF THE ASSESSMENT P ROCEEDINGS. IT IS CLEAR THAT THE ONUS REQUIRED TO BE DISCHARGED WITH RESPECT TO IDENTITY, GENUINENESS AND CREDITWORTHINESS HAVE BEEN DULY DIS CHARGED BY THE APPELLANT AND MORE SO THE TRANSACTION IS PART OF TH E REGULAR OVERDRAFT ACCOUNT MAINTAINED BY THE APPELLANT COMPANY WITH TH E COOPERATIVE SOCIETY. THUS, THE ADDITION SO MADE IS HEREBY DELET ED AND THIS GROUND OF APPEAL IS ALLOWED. 17. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFO RE THIS TRIBUNAL. LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF THE ASSESSING OFFICE R. 18. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVIL Y RELIED ON THE FINDING OF LD. CIT(A) AND REITERATED THE SUBMISSION S MADE BEFORE THE REVENUE AUTHORITIES. REFERENCE WAS ALSO MADE TO THE PAPER BOOK AND WRITTEN SUBMISSION/JUDICIAL PRONOUNCEMENTS CONTENDING THAT LD. CIT(A) HAVING APPRECIATED THE F ACTS AND MATERIAL ON RECORD IN THE LIGHT OF THE RELEVANT JUD ICIAL SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 18 PRONOUNCEMENTS RIGHTLY DELETED THE ADDITION. LEARNE D COUNSEL FOR THE ASSESSEE RELIED UPON THE JUDICIAL PRONOUNCEMENTS (SUPRA). 19. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DEC ISIONS REFERRED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE FIND TH AT THE ASSESSEE WAS MAINTAINING ITS OVERDRAFT ACCOUNT WITH SMVSSM [ SATYAMITRA VYAPARIK SURAKSHA SAHAKARI SANSTHA MARYADIT] AND LI MIT OF THE ASSESSEE WAS OF RS. 80 LAKHS. THE ASSESSEE USED ITS OVERDRAFT ACCOUNT WITH THE SOCEITY ON REGULAR INTERVALS, WITH DREW AMOUNT AND ALSO DEPOSITED AMOUNT IN CASE OF SURPLUS AMOUNT WITH THE ASSESSEE. COPY OF ACCOUNT OF THE ASSESSEE IN THE BO OKS OF THE SOCIETY WAS FILED DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. HOWEVER, THE ASSESSING OFFICER FOR WANT OF PAN AND ITR OF THE SOCIETY ADDED THE AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE US, IT WAS SUBMITTED BY LD. COUNSEL FOR THE ASSESSEE THAT THE DIRECTORS AND THEIR FAMILY MEMBERS WERE NOT IN THE BOARD OF THE SOCIETY AS ON THE DATE OF TAKING OF LOAN WHICH IS SIMILAR TO THE CASH CREDIT/MORTGAGE LOAN OF THE BANK AND, THEREFOR E, FILING OF THE CONFIRMATION SHOULD HAVE SUFFICED THE ENTIRE PURPOS E BUT THE ASSESSSING OFFICER UNJUSTIFIEDLY ASKED TO FURNISH TH E OTHER DETAILS. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 19 WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE BECAUSE IT IS NOT THE BUSINESS OF THE ASSESSEE THAT THE SOCIETY IS FILING ITS INCOME-TAX RETURN OR NOT. WE ALSO FIND T HAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FILED C OPY OF CONFIRMATION OF ACCOUNTS IN RESPECT OF AMOUNT AS RE CEIVED BY THE ASSESSEE FROM THAT SOCIETY. THUS, THERE WAS NO JUSTI FICATION FOR MAKING ADDITION TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF LOAN TAKEN FROM SATYAMITRA VYAPARIK SURAKSHA SAHAKA RI SANSTHA MARYADIT. WE FURTHER FIND THAT BEFOER THE LD. CIT(A ), THE ASSESSEE ALSO FILED COPY OF INCOME-TAX RETURN ALONG WITH THE COMPUTATION OF INCOME OF THE SAID SOCIETY AS FILED FOR THE ASSESSM ENT YEAR 2011- 12 ON 19-03-2012. SINCE, THE SAID RETURN HAD ALREAD Y BEEN FILED BY THE SAID SOCIETY WITH THE REVENUE, THE ASSESSING OFFICER SHOULD HAVE COLLECTED THE SAME FROM HIS COUNTERPART. FURTH ER, WE FIND THAT THE SOCIETY HAD MANY MEMBERS AND THE SAID SOCI ETY WAS ENGAGED IN THE BUSINESS OF ACCEPTING DEPOSITS FROM ITS MEMBERS AND ALSO ADVANCING FUNDS TO ITS MEMBERS AND THE ASS ESSEE WAS HAVING A LIMIT WITH THE SOCIETY OF RS. 80 LAKHS AND ALSO ENTERED INTO REGULAR BUSINESS TRANSACTIONS WITH THAT SOCIET Y. FROM THE PERUSAL OF THE COPY OF ACCOUNT OF THE SOCIETY IN TH E BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION AND SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 20 VICE-VERSA AND ALSO FOR THE SUBSEQUENT YEAR FILED B Y THE ASSESSEE AT PAGE NO. 122 TO 125 REVEALS THAT THE ASSESSEE HA D REPAID ENTIRE AMOUNT OF LOAN AS TAKEN FROM THE SOCIETY IN THE SUB SEQUENT YEAR. WE FIND THAT THE ASSESSEE HAD DULY FILED ITS COPY O F ACCOUNT IN THE BOOKS OF THE SOCIETY WHICH WAS ALSO TALLIED WITH TH E COPY OF ACCOUNT OF THE SOCIETY IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, THE COPY OF ACCOUNT OF THE ASSESSEE IN T HE BOOKS OF THE SOCIETY IS THE CONFIRMATION ITSELF WHICH WAS FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN OBSERVING TH AT CONFIRMATION WAS NOT FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN VIEW OF THESE FACTS, THE LD. CIT(A) RIGHTLY NOTED THAT THE ADDITION ON ACCOUNT OF OVERDRAFT LOAN AS T AKEN BY THE ASSESSEE MADE BY THE ASSESSING OFFICER WAS NEITHER CORRECT NOR PROPER AS THE ACCOUNT BALANCE OF THE LOAN ACCOUNT W AS DULY CONFIRMED AND FILED DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS. THUS, IT IS CLEAR THAT THE ONUS REQUIR ED TO BE DISCHARGED WITH RESPECT TO IDENTITY, GENUINENESS AN D CREDITWORTHINESS WAS DULY DISCHARGED BY THE ASSESSE E AND MORESO THE TRANSACTION IS PART OF THE REGULAR OVERDRAFT AC COUNT MAINTAINED BY THE ASSESSEE WITH THE SOCIETY. HENCE, WE DO NOT SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 21 FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF T HE LD. CIT(A). WE CONFIRM THE SAME ON THIS POINT. ACCORDINGLY, GROUND NOS. 1 TO 3.1 RAISED IN THE APPEAL OF THE REVENUE ARE DISMISSED. 20. SO FAR AS THE GROUND NO.4 RAISED BY THE REVENUE WITH REGARD TO DELETION OF ADDITION OF RS.61,84,343/- IS CONCER NED, THE FACTS AS CULLED OUT FROM THE ORDERS OF THE REVENUE AUTHOR ITIES ARE THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER NOTIONALLY ADDED AN AMOUNT OF RS. 61,84,343/- TO TH E TOTAL INCOME OF THE ASSESSEE BY ADOPTING A NET PROFIT RAT E OF 8% ON THE AMOUNT OF TOTAL CONSTRUCTION EXPENSES AS INCURRED BY THE ASSESSEE. THE ASSESSEE IN THE YEAR UNDER CONSIDERAT ION RAISED BILLS FOR RS. 1,05,89,210/- AND INCOME IN RESPECT O F SUCH BILLS HAD ALSO BEEN OFFERED FOR TAX BY THE ASSESSEE IN THE YE AR UNDER CONSIDERATION. HOWEVER, REMAINING AMOUNT OF EXPENSE S AS INCURRED BY THE ASSESSEE ON PROJECT UNDERTAKEN BY I T WERE SHOWN AS CLOSING WORK-IN-PROGRESS AND IN RESPECT OF CLOSI NG WIP, BILLS WERE RAISED BY THE ASSESSEE IN THE SUBSEQUENT YEARS AND INCOME RELATED TO THE SAME HAD ALSO BEEN OFFERED FOR TAX I N THOSE YEARS. THE INCOME OFFERED BY THE ASSESSEE WAS ACCEPTED IN THE ASSESSMENT YEAR 2013-14. THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSEE COMPANY HAS BEEN CONTRACTED TO DEVELOP THE COLONY SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 22 CALLED TREASURE FANTASY AT RAU, INDORE BY CONSTRUCT ING MULTI- STORIED BUILDING AND ROW HOUSES. IT WAS ALSO OBSERV ED THAT THE ASSESSEE COMPANY IS ONLY DEVELOPING THE COLONY ON T HE PRE- DETERMINED RATES AND TERMS AND CONDITIONS REACHED B ETWEEN IT AND WANDERLAND REAL ESTATE P. LTD. (IN SHORT WREPL) . IN REPLY, THE ASSESSEE EXPLAINED THAT IT IS ASSIGNED WORK FOR CONSTRUCTION OF MULTISTORIED BUILDING ONLY. THE ASSESSEE IS NEITHER ASSIGNED THE WORK FOR DEVEOPMENT OF COLONY NOR CONSTRUCITON OF R AW HOUESES AS OBSERVED BY THE ASSESSING OFFICER BUT THE ASSESSEE WAS ASSIGNED WORK FOR CONSTRUCTION OF MULTISTORIED FLAT ONLY AT PRE-DEFINED RATE. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASS ESSEE COMPANY ALSO ENGAGED IN ITS OWN CONSTRUCTION ACTIVITIES I.E . DEVELOPMENT OF ANOTHER COLONY IN ITS OWN NAME AND ALSO ENGAGED IN THE CONSTRUCITON OF THE BUILDING AND ROW HOUSES. IN REP LY, THE ASSESSEE SUBMITTED THAT THE ASSESSEE IN THE YEAR UN DER CONSIDERATION HAD PURHCASED LAND FOR RS 3,74,67,770 /- AND INCURRED DEVELOPMENT OF LAND EXPENSES OF RS 22,94,9 96/- AND ENTRY TAX OF RS 80,828/- BUT NO CONSTRUCTION WORK W AS UNDERTAKEN BY THE ASSESSEE IN THE PRESENT YEAR. THE DETAIL OF DEVELOPMENT EXPENSES AS INCURRED BY THE ASSESSEE FO R ITS OWN PROJECT WAS ALSO BEEN PROVIDED TO THE ASSESSING OFF ICER DURING THE SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 23 COURSE OF ASSESSMENT PROCEEDING. THE ASSESSING OFFI CER ALSO OBSERVED THAT SINCE THE ASSESSEE HAS NOT MAINTAINED PROJECT WISE SEPERATE SET OF BOOKS OF ACCOUNT, BOOKS RESULT AS D ECLARED BY THE ASSESSEE WAS LIABLE TO BE REJECTED U/S 145 OF THE A CT. IN REPLY, THE ASSESSEE SUBMITTED THAT IN THE YEAR UNDER CONSDIERA TION, THE ASSESSEE HAD INCURRED MAJOR EXPENSES FOR THE WORK C ONTRACT UNDERTAKEN BY IT ONLY. THE ASSESSEE HAD PURHCASED L AND FOR ITS OWN PROJECT AND ALSO INCURRED SMALL AMOUNT OF DEVEL OPMENT EXPENSES. DETAIL OF THE SAME HAD ALSO BEEN PROVIDE D BY THE ASSESSEE. THUS, THE ASSESSEE EXPLAINED THAT SINCE T HE OWN PROJECT WAS NOT STARTED IN THE YEAR UNDER CONSIDERATION, TH E ENTIRE PROFIT AS DECLARED BY THE ASSESSEE RELATES TO ITS WORK CON TRACT ONLY. IT WAS ALSO OBSERVED BY THE ASSESSING OFFICER THAT CLO SING WORK-IN- PROGRESS IN THIS YEAR HAS INCREASED BY THE AMOUNT O F RS 6,80,56,962/- AND SINCE THERE WAS OPENING WIP AT RS 80700/- AND CLOSING WIP AT RS 6,81,37,662/-, THE AMOUNT OF CLOSING WIP INCREASED BY THE AMOUNT OF RS 6,80,56,962/-. IN REP LY, THE ASSESSEE SUBMITTED THAT THE CALCULATION OF THE INCR EASED IN THE CLOSING WIP FACTUALLY CORRECT AND THE SAME WAS TABU LISED AS UNDER:- SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 24 S.NO DESCRIPTION AMOUNT [RS] 1 OPENING WIP 80,700 2 PURHCASES AND DEVELOPMENT EXPENSES AS INCURRED 7,73,04,298 TOTAL COST INCLUDING OPENING WIP 7,73,84,998 3. COST OF CLOSING WORK IN PROGRESS 6,81,37,662 4 COST OF MATERIAL & LABOUR RELATED TO WHICH BILL RAI SED[2-3] 92,47,336 5 BILL RAISED DURING THE YEAR UNDER APPEAL 1,05,89,210 GROSS PROFIT ON CONSTRUCTION WORK 17,41,874 FROM THE PERUSAL OF THE ABOVE TABLE, THE PROFIT ON CONSTRUCITON WORK AS CALCULATED COMES TO RS 17,41,874/- ON THE B ILLING OF RS 1,05,89,210/- AND REMAINING AMOUNT WAS CONSIDERED A S CLOSING WIP AS OBSERVED BY THE ASSESSING OFFICER. IT WAS FU RTHER OBSERVED BY THE ASSESSING OFFICER THAT IT WAS NOT CLEAR WHET HER EXPENSES OF RS 7,73,04,298/- AS INCURRED BY THE ASSESSEE WAS FO R WORK CONTRACT OR FOR ITS OWN CONTRACT AND IF THE AMOUNT OF EXPENDITURE CLAIMED AT RS. 7,73,04,298/- INCLUDES EXPENDITURE O N SELF PROJECT, THE SAME IS LIABLE TO BE DISALLOWED AND DI RECTED TO BE CAPITALISED. IN REPLY, THE ASSESSEE EXPLAINED THAT THE ASSESSEE COMPANY ITSELF CAPITALISED ENTIRE EXPENSES AS RELAT ED EITHER FOR WORK CONTRACT OR FOR OWN PROJECT BUT BILLING FOR TH E SAME WAS NOT RAISED AND THE ASSESSEE HAS INCURRED COST OF THE MA TERIAL AND SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 25 LABOUR TO THE TUNE OF RS 7,73,04,298/- IN THE YEAR UNDER CONSIDERATION AND AT THE SAME TIME, CLOSING WIP WAS CALCULATED AT RS 6,81,37,662/- AND CLAIMED REVENUE EXPENSES OF RS 92,47,336/- ONLY AGAISNT WHICH BILL OF RS 1,05,89,2 10/- WAS RAISED IN THIS YEAR, THEREFORE, THE OBSERVATION THA T EXPENSES AS INCURRED FOR OWN PROJECT WAS NOT CAPITALISED WAS NO T CORRECT. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE H AS INCURRRED DEVELOPMENT EXPENSES OF RS 7,73,04,298/- AND BILL W AS RAISED FOR RS 1,05,89,210/- ONLY AND THEREFORE SUBSTANTIAL REC EIPT REMAINS TO BE OFFERED AS INCOME EVEN WHEN THE ASSESSEE HAS FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING. IN REPLY, THE ASSE SSEE SUBMITTED THAT DEVELOPMENET EXPESNES OF RS 7,73,04,298/- INCL UDES COST OF LAND AS PURHCASED BY THE ASSESSEE FOR ITS OWN PROJE CT OF RS 3,74,67,770/- AND, THEREFORE, EFFECTIVE DEVELOPMENT EXPENSES AS INCURRED BY THE ASSESSEE WAS OF RS 3,98,36,528/-. T HE SAID AMOUNT INCLUDES AN AMOUNT OF RS 23,75,824/- AS INCU RRED BY THE ASSESSEE FOR ITS OWN PROJECT AND, THEREFORE, AN AMOUNT OF RS 3,74,60,704/- WAS INCURRED BY THE ASSESSEE FOR THE WORK CONTRACT AND FOR WORK OF RS 3,74,60,704/-, THE ASSESSEE HAD RAISED BILL OF RS 1,05,89,210/- AND BALANCCE AMOUNT OF RS 2,82,13, 368/- WAS CAPITALISED AND SHOWN AS CLOSING WIP. THUS, THE ASS ESSING SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 26 OFFICER WAS NOT JUSTIFIED IN CONSIDERING THAT THE AS SESSEE HAS CLAIMED ENTIRE EXPENSES AS INCURRED FOR THE PROJECT AS REVENUE MORE SO WHEN FROM THE FACE OF THE AUDITED ACCOUNT, IT WAS CLEAR THAT DEDUCTION WAS CLAIMED ONLY IN RESPECT OF THOSE EXPENSES FOR WHICH BILL WAS RAISED AND BALANCE AMOUNT SHOWN AS C LOSING WIP. ULTIMATELY, THE ASSESSING OFFICER CALCULATED THE IN COME AT 8% ON THE AMOUNT OF DEVELOPMENT EXPENSES OF RS 7,73,04,29 8/- AS INCURRED BY THE ASSESSEE IN THIS YEAR FOR WHICH THE ASSESSEE EXPLAINED THAT THE TOTAL COST OF RS 7,73,04,298/- A LSO INCLDUES AN AMOUNT OF RS 3,74,67,770/- RELATED TO THE COST OF L AND AS PURCHASED BY THE ASSESSEE FOR ITS OWN PROJECT DETAI LS OF WHICH HAD ALSO BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDING. THE ASSESSEE ALSO INCURRED AN AMOUNT OF RS 23,75,82 4/- RELATED TO THE BOUNDRY WALL AND OTHER EXPENSES RELATED TO T HE ASSESSEE OWN PROJECT. THUS, AN AMOUNT OF RS 3,74,60,704/- O NLY WAS RELATED TO THE WORK CONTRACT AND AGAISNT THE COST O F WORK CONTRACT OF RS 92,47,336/- , BILL OF RS 1,05,89,210/- WAS RA ISED AND BALANCE AMOUNT OF DEVELOPMENT COST OF RS 2,82,13,36 8/- WAS CAPITALISED AS CLOSING WIP. THE ASSESSEE HAD RAISED BILL AS PER THEIR UNDERSTANDING WITH THE WANDERLAND REAL ESTATE P LIMITED. THUS, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN EST IMATING THE SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 27 INCOME ON NOTIONAL BASIS EVEN WHEN THE WORK WAS NOT CERTIFIED BY THE CHARTERED ENGINEER OF THE LAND OWNER AND BILL F OR THE SAME WAS NOT RAISED BY THE ASSESSEE. HOWEVER, THE ASSESS ING OFFICER DID NOT AGREE WITH THE SUBMISSIONS OF THE ASSESSEE AND ADDED RS.61,84,343/- TO THE TOTAL INCOME AT 8% ON THE AMO UNT OF TOTAL COST OF PROJECT AT RS. 7,73,04,298/-. 21. BEING AGGRIEVED, THE ASSESSEE CHALLENGED THE AC TION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A). THE LD. CI T(A) HAVING GONE THROUGH THE FACTS AND SUBMISSIONS THEREOF DELETED T HE ADDITION. 22. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFO RE THIS TRIBUNAL. LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF THE ASSESSING OFFICE R. 23. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVIL Y RELIED ON THE FINDING OF LD. CIT(A) AND REITERATED THE SUBMISSION S MADE BEFORE THE REVENUE AUTHORITIES. REFERENCE WAS ALSO MADE TO THE PAPER BOOK AND WRITTEN SUBMISSION CONTENDING THAT LD. CIT (A) HAVING APPRECIATED THE FACTS AND MATERIAL ON RECORD RIGHTL Y DELETED THE ADDITION. 24. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DEC ISIONS REFERRED SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 28 BY THE LD. CIT(A) IN THE IMPUGNED ORDER. HAVING GON E THROUGH THE AFORESAID OBSERVATIONS OF THE ASSESSING OFFICER AND REPLIES THEREOF BY THE ASSESSEE, A SUMMARY OF EXPENSES AS INCURRED FOR OWN PROJECT OF THE ASSESSEE AND EXPENSES AS INCURRED FO R CONSTRUCTION CONTRACT ARE TABULISED AS UNDER: S.NO DESCRIPTION OWN PROJECT WORK CONTRACT TOTAL [RS] 1 OPENING WIP NIL 80,700 80,700 2 PURHCASES AND DEVELOPMENT EXPENSES AS INCURRED 3,98,43,594 3,74,60,704 7,73,04,298 3 TOTAL COST INCLUDING OPENING WIP 3,98,43,594 3,75,41,404 7,73,84,998 4 COST OF CLOSING WORK IN PROGRESS 3,98,43,594 2,82,94,068 6,81,37,662 5 COST OF MATERIAL & LABOUR RELATED TO WHICH BILL RAISED[2-3] NIL 92,47,336 92,47,336 6 BILL RAISED DURING THE YEAR UNDER APPEAL 1,05,89,210 1,05,89,210 GROSS PROFIT ON CONSTRUCTION WORK 17,41,874 17,41,874 FROM THE PERUSAL OF THE ABOVE DETAILS IN THE LIGHT OF THE ABOVE DETAILED DISCUSSION OF FACTS AND SUBMISSIONS THEREO F, WE FIND THAT THE ASSESSEE HAD RAISED BILLS TO THE LAND OWNERS FR OM TIME TO TIME SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 29 ON THE BASIS OF TERMS OF ITS AGREEMENT AND ON THE B ASIS OF STAGE OF COMPLETION AS AGREED UPON BY THE ASSESSEE WITH THE LAND OWNERS. FURTHER, WE ARE OF THE VIEW THAT THERE WAS NO LAW F OR MAINTIANING PROJECT WISE SEPERATE SETS OF BOOKS OF ACCOUNT BUT WHAT IS NECESSARY IS TO CALCULATE SEPERATE PROJECT-WISE PRO FIT AND THE ASSESSEE HAD PROPERLY MAINTAINED DETAILS OF EXPENSE S AS INCURRED FOR PARTICULAR PROJECT AND THE SAME WAS CONTROLLED T HROUGH COST CENTRE. THUS, THE BOOKS OF ACCOUNT AS REJECTED BY T HE ASSESSING OFFICER FOR THIS GROUND WAS NOT CORRECT. LD. CIT(A) OBSERVED THAT REMAINING AMOUNT OF EXPENSES AS INCURRED BY THE ASS ESSEE ON THE PROJECT WERE SHOWN BY IT AS CLOSING WORK-IN-PROGRES S FOR WHICH BILLS WERE SUBSEQUNTLY RAISED IN THE NEXT YEAR AND THE SAME WERE ALSO OFFERED TO TAX AND AS SUCH, THE LD. CIT(A) DEL ETED THE ADDITION MADE BY THE ASSESING OFFICER. FURTHER, THE LD. CIT- DR COULD NOT CONTROVERT THE FINDINGS OF THE LD. CIT(A) BY BRINGI NG ANY CONTRARY MATERIAL ON RECORD. THEREFORE, THE ASSESSING OFFICE R WAS NOT JUSTIFIED IN ESTIMATING THE INCOME OF RS. 61,84,343/ - AT 8% ON THE AMOUNT OF TOTAL COST OF PROJECT OF RS. 7,73,04,298/ - EVEN WHEN THE SAID AMOUNT INCLUDED AN AMOUNT OF RS. 3,98,43,594/- AS INCURRRED FOR ITS OWN PROJECT IN FORM OF COST OF LA ND AND DEVELOPMENT EXPENSES AS INCURRED. THUS, THE ADDITIO N MADE TO SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 30 THE TOTAL INCOME OF THE ASSESSEE WAS RIGHTLY DELETE D BY THE LD. CIT(A). WE CONFIRM THE ACTION OF THE LD. CIT(A) ON THIS POINT. ACCORDINGLY, GROUND NO.4 RAISED IN THE APPEAL OF TH E REVENUE IS DISMISSED. 25. LAST GROUND I.E. GROUND NO.5 IS WITH REGARD TO ADDITION OF RS.2,84,555/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF DISALLOWANCE OF CLAIM OF LOSS BY THE ASSESSEE. FACT S AS CULLED OUT FROM THE ORDERS OF REVENUE AUTHORITIES ARE THAT THE ASSESSEE HAD SHOWN LOSS OF RS.4,41,259/- IN THE COMPUTATION OF T OTAL INCOME. HOWEVER, THE ASSESSING OFFICER AFTER ADJUSTING THE OTHER INCOME OF RS.1,56,705/- DISALLOWED THE LOSS AT RS.2,84,555/- ON THE GROUND THAT THE BOOKS OF ACCOUNT HAVE BEEN REJECTED AND PR OFIT HAS BEEN ESTIMATED. BEING AGGRIEVED, THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A) AND LD. CIT(A) DELETED THE ADDITION CONSIDERING THE FACTS AND SUBMISSION T HEREOF. 26. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFO RE THIS TRIBUNAL. LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF THE ASSESSING OFFICE R. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 31 27. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVIL Y RELIED ON THE FINDING OF LD. CIT(A) AND REITERATED THE SUBMISSION S MADE BEFORE THE REVENUE AUTHORITIES AND SUBMITTED THAT LD. CIT( A) HAVING APPRECIATED THE FACTS AND MATERIAL ON RECORD RIGHTL Y DELETED THE ADDITION. 28. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORDS PLACED BEFORE US. WE FIND THAT LD. CIT(A) ALLOWED T HE LOSS ON THE GROUND THAT THE ASSESSEE HAD PROPERLY MAINTAINED IT S BOOKS OF ACCOUNTS AND THE SAME WAS ALSO EXAMINED BY THE ASSE SSING OFFICER HIMSELF AS THE ASSESSING OFFICER PASSED DET AILED ORDER AFTER CONSIDERING THE BOOKS OF ACCOUNTS PRODUCED BEFORE H IM. HENCE, THERE WAS NO JUSTIFICATION FOR THE ASSESSING OFFICER TO FURTHER DISALLOW LOSS OF RS. 2,84,555/- AS CLAIMED BY THE A SSESSEE IN ITS RETURN OF TOTAL INCOME. EVEN BEFORE US, THE REVENUE COULD NOT CONTROVERT THE FINDING OF THE LD. CIT(A) BY BRINGIN G ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). WE CONF IRM THE SAME ON THIS ISSUE. ACCORDINGLY, GROUND NO.5 IS ALSO DISMIS SED. SATYAMITRA INFRASTRUCTURE ITANO.451/IND/2017 32 29. IN THE RESULT, THE DEPARTMENTAL APPEAL I.E. ITA NO.451/IND/2017 FOR THE ASSESSMENT YEAR 2012-13 IS DISMISSED. ORDER WAS PRONOUNCED AS PER RULE 34 OF THE I.T.A.T. RULES 1963 ON 7.9.2021. SD/- (RAJPAL YADAV) SD/- (MANISH BORAD) VICE - PRESIDENT A CCOUNTANT MEMBER INDORE; DATED : 7/9/2021 !VYAS! COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE