Dy. Commr. Of Income Tax, Morbi Circle, , Morbi V. M/s Lexus Ceramic Pvt. Ltd., Morbi

ITA 471/RJT/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5487 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Keywords: Unexplained cash credit
• Section: 68; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , !'#,!$! %& BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.471/RJT/2017 2. ./ I.T.A. NO.414/RJT/2017 ( / ASSESSMENT YEAR : 2013-14) 1. THE DCIT MORBI CIRCLE, MORBI 2. M/S.LEXUS CERAMIC PVT.LTD., MORBI / VS. 1.M/S.LEXUS CERAMIC PVT.LTD. SURVEY NO.793/P AT GHUNTU LAKHDIRPUR ROAD, MORBI 2. THE DCIT MORBI CIRCLE, MORBI )!$ ./ ./ PAN/GIR NO. AABCL 3030 F ( )+ / APPELLANT ) .. ( ,)+ / RESPONDENT ) )+-! / APPELLANT BY : SHRI PRAVEEN VERMA, SR.DR ,)+.-! / RESPONDENT BY : SHRI D.M. RINDANI, AR /0.1$ / DATE OF HEARING 09/05/2019 23 .1$ / DATE OF PRONOUNCEMENT 27 /05/2019 !/ O R D E R PER PRADIP KUMAR KEDIA - AM : THE CAPTIONED CROSS-APPEALS HAVE BEEN FILED AT THE INSTANCE OF THE REVENUE AS WELL AS ASSESSEE AGAINST THE COMMON ORDE R OF THE ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 2 - COMMISSIONER OF INCOME TAX(APPEALS)-3, RAJKOT [CIT( A) IN SHORT] DATED 09/10/2017 IN THE MATTER OF ASSESSMENT ORDER UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S 'THE ACT') DATED 10/02/2016 RELEVANT TO ASSESSMENT YEAR (AY) 2013- 14. THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF A COMMON ORDER. 2. FIRST, WE SHALL TAKE UP THE REVENUES APPEAL IN ITA NO.471/RJT/2017 FOR AY 2013-14. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE RE AD AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 86,00,000/- MADE U/S.68 OF THE I.T.ACT, 1961 ON ACCOUNT OF UNEXPLAIN ED CASH CREDIT. 2. ANY OTHER GROUND THAT THE REVENUE MAY RAISE BEFORE OR DURING THE PROCEEDINGS BEFORE THE HONBLE ITAT. 4. AS PER ITS GROUNDS OF APPEAL, THE REVENUE HAS CHALLENGED THE ACTION OF THE CIT(A) IN DELETING THE ADDITION OF RS.86,00, 000/- MADE BY ASSESSING OFFICER UNDER S.68 OF THE ACT. 5. BRIEFLY STATED, IN THE COURSE OF THE SCRUTINY AS SESSMENT, THE ASSESSING OFFICER INTER ALIA NOTICED THAT THE ASSESSEE HAS RECEIVED CERTAIN UNSECURED LOANS FROM VARIOUS PARTIES DURING THE YEA RS AS UNDER: ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 3 - SR. NO. NAME OF THE PARTY AMOUNT OF LOANS ACCEPTED DURING THE YEAR (IN RS.) 1. ROYAL ENTERPRISE 36,00,000/- 2. S.B. ENTERPRISE 50,00,000/- 3. PRABHUBHAI DALSANIYA 2,00,000/- TOTAL 88,00,000/- THE ASSESSING OFFICER ALLEGED THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE PRIMARY ONUS WHICH LAYS UPON IT COULD NOT SUBST ANTIATE OF THE VERACITY OF THE UNSECURED LOANS. THE ASSESSING OFFICER ACCO RDINGLY INVOKED SECTION 68 OF THE ACT AND ADDED THE SAME TO THE TOT AL INCOME OF THE ASSESSEE. 6. AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL BEF ORE THE CIT(A). THE CIT(A) REVISITED THE FACTS AND CIRCUMSTANCES OF THE CASE AND FOUND THE EXPLANATION OF THE ASSESSEE TOWARDS SUCH LOANS TO BE SATISFACTORY AND BACKED BY ADEQUATE DOCUMENTARY EVIDENCES AND SURROU NDING CIRCUMSTANCES. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER: 10.3. GROUND NO.1 TO 3 ARE IN RESPECT OF ADDITION MADE U/S.68. THE UNDISPUTED FACT OF THE CASE IS THAT THE APPELLANT HAS RECEIVED AND SHOWN LOANS OF RS.50,00,000/- FROM S B ENTERPRISE AND RS.36,00,000/- FROM M/S.ROYAL EN TERPRISES, BOTH PROPRIETORSHIP CONCERN OF ONE RAJNIKANT M VAGHELA. ANOTHER LOAN O F RS.2,00,000/- HAS BEEN RECEIVED FROM PRABHUBHAI DALSANIA. ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 4 - 10.4. THE LOAN OF RS.50,00,000/- AND RS.36,00,000/ - RECEIVED FROM THE PROPRIETORSHIPS OF MR. RAJNIKANT VAGHELA WILL BE CONSIDERED FIRST. THE APPELLANT FOR ESTABLISHING IDENTITY, CREDITWORTHINESS AND GENUINENESS, HAD SUB MITTED PAN CARD, CONFIRMATION LETTER & IT RETURNS ACKNOWLEDGEMENT. HOWEVER THE BA NK STATEMENT OF THE LENDERS WAS NOT SUBMITTED AND HENCE THE AO RULED THAT THE ASSES SEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF SAID PERSON. HOWEVER THE APPELL ANT HAD SHOWN ITS BANK STATEMENTS SHOWING RECEIPT OF THE LOANS FROM SUCH P ARTIES. THIS BANK STATEMENT OF THE APPELLANT IS THE SIMPLE TOOL TO FIND OUT THE ORIGIN ATING BANK A/C OF THE LENDER. IT HAS BEEN SUBMITTED THAT M/S. ROYAL ENTERPRISES HAS GIVE N LOAN OUT OF HIS BANK OF BARODA CC A/C. NO.03630500000664 FOR RS.36,00,000/-. THIS PARTY HAS ALSO SIGNED CONTRA LEDGER A/C. OF THE APPELLANT. SIMILARLY M/S. S B EN TERPRISES HAS ALSO CONFIRMED THE LOAN GIVEN TO THE APPELLANT AND HAS SUBMITTED SIGNE D CONTRA LEDGER A/C. OF THE APPELLANT IN ITS BOOK. THIS LEDGER A/C. IS SHOWING OPENING BALANCE OF RS.24088000/- AND FURTHER TWO AMOUNTS OF RS.3760000/- AND RS.L240 000/-WERE ADVANCED DURING THE COURSE OF THE YEAR FROM ITS BANK OF BARODA BANK A/C . THE COPY OF IT RETURN FILED BY THE PROPRIETOR OF THESE CONCERNS HAS ALSO BEEN SUBM ITTED. IT IS TRUE THAT THE BANK A/C STATEMENT OF THE PROPRIETOR OR HIS PROPRIETORSHIPS HAVE NOT BEEN SUBMITTED BUT ONLY ON THIS BASIS IT CANNOT BE HELD THAT THE LOAN HAS N OT ORIGINATED FROM THE BANK A/C OF THE LENDER ESPECIALLY WHEN THE APPELLANT'S BANK STA TEMENT IS CLEARLY SHOWING AMOUNT RECEIVED FROM THE LENDERS. THE APPELLANT AS WELL AS AO COULD HAVE FOUND OUT DETAILS OF THE ORIGINATING BANK ACCOUNT FROM THE APPELLANT' S BANKER AND THEN THEY COULD HAVE REQUESTED THE BANKER OF THE LENDER TO FURNISH COPY OF LENDER'S STATEMENT IN ORDER TO VERIFY THE CREDITWORTHINESS OF THE SAID LENDER AND GENUINENESS OF TRANSACTION I.E. WHETHER THE AMOUNT HAS ACTUALLY ORIGINATED FROM LEN DER'S BANK A/C AND HAD LANDED IN THE APPELLANT'S BANK A/C AND HAD AGAIN BEEN RETURNE D TO THE LENDER (IN HIS BANK A/C). THE AO HAS NOT DONE THIS EXERCISE AND SIMPLY TREATE D THE WHOLE TRANSACTION AS NON- GENUINE, MERELY BECAUSE APPELLANT COULD NOT SUBMIT BANK STATEMENT OF THE LENDER. IDENTITY OF THE DONOR IS NOT IN DOUBT EVEN TO THE A O. ROUTING OF THE SAID LOAN THROUGH BANKING CHANNEL IS ALSO NOT IN DOUBT. THE LOAN CONF IRMATION LETTER ALONGWITH THE PAN NO. OF THE LENDER IS THERE ON THE RECORD. THE COPY OF RETURN OF LENDER IS ALSO THERE ON RECORD SUGGESTING THAT A RETURN WITH TOTAL INCOME O F RS. 6,53,280/- FOR ASSESSMENT YEAR 2013-14 HAD BEEN FILED BY THE SAID LENDER SHRI RAJNIKANT N VAGHELA WITH ITO WD-L(4) RAJKOT. THUS AO OF THE APPELLANT HAD ALL TH E INFORMATION FOR MAKING FURTHER INQUIRIES INTO THE CREDITWORTHINESS OF THE LENDER. IT IS A SETTLED LAW THAT ONCE THE TAX PAYER PROVIDES THE PRIMARY EVIDENCES IN SUPPORT OF THE CLAIMED LOAN IN THE FORM OF ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 5 - ESTABLISHING IDENTITY, GENUINENESS AND CREDITWORTHI NESS OF THE LOAN LENDER AND CONCERNED TRANSACTION; IT IS TO BE HELD THAT HE HAS DISCHARGED HIS BURDEN/ONUS AND NOW IT IS UNTO THE AO TO DISPROVE SUCH EVIDENCES I. E. TO PROVE THEM FALSE IF HE WANTS TO MAKE ADDITION U/S 68. IN OTHER WORDS IT WAS ONUS ON AO TO MAKE FURTHER INQUIRIES TO ESTABLISH THAT THE IDENTITY, CREDITWORTHINESS AND G ENUINENESS OF THE SAID TRANSACTION AS SUBMITTED ARE FALSE, FABRICATED AND BOGUS. HE HA S NOT DONE ANY SUCH EXERCISE EVEN THOUGH HE WAS IN POSSESSION FOR ALL THE RELEVANT IN FORMATIONS. THE HON'BLE IT AT AGRA BENCH HAS RULED IN THE CASE OF S K JAIN VS ITO (2004) 2 SOT 579 (AGRA) AS UNDER: (QUOTE) 'ONCE IT IS ESTABLISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR PERSON, BE HE IS A FAMILY MEMBER OR CLOSE RELATIVE THEN THE RESPONSIBILITY OF THE ASSESSEE IS OVER. THE ASSESSEE CANNOT ASK THAT PERS ON, -WHO ADVANCED THE LOAN, WHETHER MONEY ADVANCED IS PROPERLY TAXED OR NOF.'(U NQUOTE). 10.5 ITAT AHMEDABAD HAS CLEARLY HELD IN THE CASE OF ROHINI BUILDERS VS. ACIT 76 TTJ AHMEDABAD 521 THAT: (QUOTE) '3. WE HAVE HEARD LEARNED COUNSEL FOR THE P ARTIES. SEC. 68 OF THE ACT OF 1961 SAYS THAT WHERE ANY SUM IS FOUND CREDITED IN THE BO OKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLA NATION ABOUT THE NATURE AND SOURCE, THEREOF OR THE EXPLANATION OFFERED BY HIM I S NOT, IN THE OPINION OF THE ITO, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME- TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THEREFORE, ACCORD ING TO S. 68, THE FIRST BURDEN IS ON THE ASSESSEE TO SATISFACTORILY EXPLAIN THE CREDIT E NTRY IN THE BOOKS OF ACCOUNT OF THE PREVIOUS YEAR. IF THE EXPLANATION GIVEN BY THE ASSE SSEE IS SATISFACTORY, THEN THAT ENTRY WILL NOT BE CHARGED WITH THE INCOME OF THE PREVIOUS YEAR OF THE ASSESSEE. IN CASE THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFAC TORY OR THE SOURCE OFFERED BY THE ASSESSEE-FIRM IS NOT SATISFACTORY, THEN IN THAT CAS E, THE AMOUNT SHOULD BE TAKEN INCOME OF THE ASSESSEE. IN THE PRESENT CASE, THE AC DID NOT FEEL SATISFIED WITH THE ION GIVEN BY THE ASSESSEE AND ACCORDINGLY ASSESSED ALL THE THREE CREDIT ENTRIES TO THE ACCOUNT OF THE ASSESSEE AS THE INCOME. 4. OR APPEAL, THE CIT(A) EXAMINED THE MATTER IN DET AIL AND FOUND THAT SHRI S.K GUPTA WAS THE REAL OWNER OF THE BUSINESS. THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND TO BE SATISFACTORY AND HE DELETED THE AFORESAID THR EE ENTRIES. THE SAME FINDING OF FACT HAS BEEN AFFIRMED BY THE TRIBUNAL. ONCE IT IS ESTAB LISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR PERSON, BE HE A PARTNER OR AN INDIVIDUAL, THEN THE RESPONSIBILITY OF THE ASSESSEE-FIRM IS OVER. THE ASSESSEE-FIRM CANNOT ASK THAT PERSON ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 6 - WHO MAKES INVESTMENT WHETHER THE MONEY INVESTED IS PROPERTY TAXED OR NOT. THE ASSESSEE IS ONLY TO EXPLAIN THAT THIS INVESTMENT HA S BEEN MADE BY THE PARTICULAR INDIVIDUAL AND IT IS RESPONSIBILITY OF THAT INDIVID UAL TO ACCOUNT FOR THE INVESTMENT MADE BY HIM. IF THAT PERSON OWNS THAT ENTRY, THEN, THE BURDEN OF THE ASSESSEE-FIRM IS DISCHARGED. IT IS OPEN FOR THE AO TO UNDERTAKE FURTHER INVESTIG ATION WITH REGARD TO THAT INDIVIDUAL WHO HAS DEPOSITED THIS AMOUNT. 5. SO FAR AS THE RESPONSIBILITY OF THE ASSESSEE IS CONCERNED, IT IS SATISFACTORILY DISCHARGED. WHETHER THAT PERSON IS INCOME-TAX PAYER OR NOT OR FROM WHERE HE HAS BROUGHT THIS MONEY IS NOT THE RESPONSIBILITY OF THE FIRM. THE MOMENT THE FIRM GIVES SATISFACTORY EXPLANATION AND PRODUCES THE PERSON WH O HAS DEPOSITED THE AMOUNT, THEN THE BURDEN OF THE FIRM IS DISCHARGED AND IN THAT CA SE THAT CREDIT ENTRY CANNOT BE TREATED TO BE INCOME OF THE FIRM FOR THE PURPOSES O F INCOME-TAX. IT IS PEN FOR THE AC TO TAKE APPROPRIATE ACTION UNDER S. 69 OF THE ACT AGAI NST THE PERSON WHO HAS NOT BEEN ABLE TO EXPLAIN THE INVESTMENT. IN THE PRESENT CASE , THERE IN THE CONCURRENT FINDING OF BOTH THE CJT(A) AS WELL AS OF THE TRIBUNAL TNAT THE FIRM HAS SATISFACTORILY EXPLAINED THE AFORESAID ENTRIES. '(UNQUOTE) 10.6 I FULLY AGREE WITH THE LD. AR THAT HON'BLE KOLKATTA HIGH COURT IN THE CASE OF CIT VS. PRECISION FINANCE PVT. LTD.(1994) 208 ITR 4 65, HAD CLEARLY HELD THAT THE ASSESSEE IS EXPECTED TO ESTABLISH IN RESPECT OF ANY SUM WHICH IS FOUND TO BE CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED :- 1. IDENTITY OF HIS CREDITORS; 2. CAPACITY OF CREDITORS TO ADVANCE MONEY; AND 3. GENUINENESS OF TRANSACTION. HON'BLE COURT HAD FURTHER HELD THAT: (QUOTE) 'THE BASIC PRECONDITION FOR THE SECTION 68 IS THAT THE ASSESSEE SHOULD FILE A VALID' CONFIRMATION. VALID CONFIRMATION HAS NO SPEC IFIC FORMAT BUT IT MUST CONTAIN NAME, COMPLETE ADDRESS OF THE LENDER. IT IS BETTER IF PAN OF THE LENDER IS ALSO OBTAINED AS, IF NO PAN GIVEN THEN AMBIT OF DOUBT IS FAR MORE FOR THE AO. WITH THE CONFIRMATION THE AO MUST INSIST ON SOME IDENTITY PROOF LIKE COPY OF DRIVING LICENSE, COPY OF PASSPORT, COPY OF RATION CARD OR ELECTION ID CARD E TC. THE CONFIRMATION SO FILED MUST INDICATE COMPLETE DETAILS OF TRANSACTIONS (LIKE MOD E-CASH OR CHEQUE, WITH NUMBER DATE OF CHEQUE WITH BANK DETAILS). ' ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 7 - 1.4 DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE APPELLANT HAS PROVIDED ALL THE ABOVE MATERIAL FACT TO ESTABLISH THE IDENTITY, CAPACITY OF CREDITORS AND GENUINENESS OF TRANSACTION. HENCE, THE APPELLANT H AS SATISFACTORILY DISCHARGED THE ONUS CASE UPON HIM. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN ANY RECOGNITION TO THE AFOREMENTIONED CORROBORATIVE EVIDENCE AND TREAT ED THE ENTIRE AMOUNT OF UNSECURED LOAN OF RS. 1,10,00,000/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE IT ACT AND ADDED TO THE RETURNED INCOME. 1.5 IDENTITY OF THE CREDITORS: THE AUTHORITY TO SAT ISFY THEM WOULD DELVE INTO THE TRANSACTION AND DEMAND THE SOURCE OF THE CREDITOR F ROM WHOM THE ASSESSEE HAS RECEIVED THE AMOUNT OR IN OTHER WORD, THE SOURCE OF THE SOURCE. THE ASSESSEE'S BURDEN IS CONFINED TO PROVE IDENTITY OF THE CREDITORS, CRE DITWORTHINESS OF CREDITOR AND THE GENUINENESS OF THE TRANSACTION WITH REFERENCE TO TR ANSACTION BETWEEN ASSESSEE AND CREDITOR AND THE SAME CANNOT BE EXTENDED TO INCLUDE SOURCE OF SUCH CREDITOR FOR THE PURPOSE OF SECTION 68 OF THE ACT. A HARMONIOUS CONS TRUCTION OF SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF THE INCOME-TAX ACT W ILL BE THAT THOUGH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSE SSEE MUST ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF HIS CREDITOR. THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIO NS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFINED TO THE TRANSAC TIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR. WHAT FOLLOWS , AS A COROLLARY, IS THAT IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND 'SUB-CREDITORS' NOR IS IT THE BURDEN O F THE ASSESSEE TO PROVE THAT THE SUB- CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE THE CA SH CREDIT TO THE CREDITOR FROM WHOM THE CASH CREDIT HAS BEEN, EVENTUALLY, RECEIVED BY THE ASSESSEE. IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CREDITOR OR OF THE GENUINENESS OF THE TRANSACTION, WHICH TOOK PLACE BE TWEEN THE CREDITOR AND SUB- CREDITOR, SINCE, THESE ASPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE AS OBSERVED BY HON'BLE COURT IN THE CASE OF NEMI CH AND KOTHARI V.CIT [2004] 136 TAXMAN 213 (GAU.). THIS CONCEPT OF SOURCE OF SOURCE HAS BEEN NEGATED BY VARIOUS JURISDICTIONAL COURTS. THOSE INCLUDE A) CIT VS DAUL AT RAM RAWATMULL 87 ITR 349 (SC) B) ANIL RICE MILLS VERSUS COMMISSIONER OF INCO ME TAX, (2006) 282 TTR 0236 C) DCIT VS ROHIM BUILDERS 256 ITR 360.' (UNQUOTE) 10.7 NOW IF WE SEE THE INSTANT CASE THERE REMAINS N O DOUBT THAT APPELLANT HAD DISCHARGED THE PRIMARY ONUS OF ESTABLISHING THE IDE NTITY OF LENDER (PAN CARD, CONFIRMATION & IT RETURNS), GENUINENESS OF TRANSACT ION (BANK STATEMENT OF THE APPELLANT SHOWING INWARD CREDIT ENTRIES FROM DEPOSI TORS) AS WELL AS CREDITWORTHINESS (IT RETURNS). THE AO HAD NOT DONE ANY EXERCISE TO D ISPROVE APPELLANT'S VERSION EXCEPT ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 8 - SHOWING THE INABILITY OF THE APPELLANTS TO SUBMIT L ENDER'S BANK STATEMENT. IF APPELLANT, FOR ANY REASON, IS NOT ABLE TO SUBMIT LENDERS BANK STATEMENT THEN AO INSTEAD OF INSTANTLY RULING THE TRANSACTION AS BOGUS, SHOULD H AVE CONTACTED THE LENDER OR LENDER'S BANK (WHICH COULD HAVE BEEN EASILY ASCERTA INED BY THE APPELLANTS BANKERS) OR LENDER'S AO (FROM THE IT RETURNS COPY OF WHICH W AS FILED). INSTEAD OF DISCHARGING HIS BURDEN (WHICH HAD SHIFTED ON HIM ONCE APPELLANT HAD SUBMITTED PRIMARY EVIDENCES DISCHARGING HIS BURDEN); THE AO HAD INCOR RECTLY BRANDED THE ENTIRE LOAN TRANSACTION AS NON-GENUINE WITHOUT DOING ANY FURTHE R INVESTIGATION. THIS ACTION IS NOT CORRECT AND CANNOT BE SUSTAINED. THE ADDITION SO MA DE HAS TO BE DELETED. MORE SO EVER THE AO IS NOT WITHOUT A REMEDY AS HE CAN PASS ON THE RELEVANT INFORMATION PERTAINING TO LOAN ADVANCED BY THE LENDER TO THE RE SPECTIVE AO IF HE THINKS THAT INVESTIGATION NEEDS TO BE CONDUCTED IN THE LENDER'S CASE. AS SUCH THE ADDITIONS OF RS.50,00,000/- AND RS.36,00,000/- MADE BY AO IN RES PECT OF LOANS RECEIVED FROM PROPRIETORSHIP CONCERNS OF MR. RAJNIKANT VAGHELA AR E DELETED. 10.8 SO FAR AS THE ADDITION OF RS.2,00,000/- ALLEGE DLY RECEIVED FROM MR. PRABHUBHAI DALSANIA IS CONCERNED THE APPELLANT HAS NOT SUBMITT ED PAN CARD OR IT RETURN OF THE LENDER AND THEREFORE IT CANNOT BE SAID THAT THE APP ELLANT HAS DISCHARGED ITS ONUS OF ESTABLISHING THE IDENTITY, GENUINENESS AND CREDITWO RTHINESS OF THE DEPOSITOR. HENCE THE ADDITION U/S.68 OF RS.2,00,000/-IS CONFIRMED. 10.9 THUS GROUND 1 AND 2 ARE PARTLY ALLOWED WH EREAS GROUND 3 IS FULLY ALLOWED. GROUND 4 IS CONSEQUENTIAL IN NATURE AND GROUND 5 HA S BEEN PRE-MATURELY RAISED; HENCE NO SEPARATE ADJUDICATION IS NEEDED. 11, FOR STATISTICAL PURPOSE THE APPEAL IS TO BE TRE ATED AS PARTLY ALLOWED. IN TERMS OF THE FINDINGS NOTED ABOVE, THE CIT(A) RE VERSED THE ADDITIONS OF RS.50 LAKHS AND RS.36 LAKHS MADE BY THE ASSESSING O FFICER IN RESPECT OF LOAN RECEIVED FROM ROYAL ENTERPRISE AND SB ENTERPRISE BO TH PROPRIETARY-SHIP CONCERNS OF MR. RAJNIKANT M. VAGHELA. THE CIT(A), HOWEVER, DID NOT FIND THE EXPLANATION OF THE ASSESSEE IN RESPECT OF LOANS OF RS.2 LAKHS RECEIVED FROM MR. ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 9 - PRABHUBHAI DALSANIYA AND ACCORDINGLY DECLINED TO IN TERFERE WITH THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THIS REGARD. 7. AGGRIEVED BY THE PARTIAL RELIEF GRANTED BY THE CIT(A), BOTH THE REVENUE AS WELL AS THE ASSESSEE ARE IN APPEALS BEFO RE THE TRIBUNAL. 8. AFTER TAKING INTO ACCOUNT THE RIVAL SUBMISSIONS MADE AS WELL AS THE MATERIAL FACTS REFERRED TO IN THE COURSE OF HEARING , WE FIND OURSELVES IN COMPLETE AGREEMENT WITH THE CONCLUSIONS DRAWN BY TH E CIT(A). THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER ONLY O N ACCOUNT OF ABSENCE OF THE LENDERS BANK STATEMENT WHICH OUGHT TO HAVE R EQUISITIONED, IF SO REQUIRED FROM THE LENDERS DIRECTLY. IT IS NOT UNCO MMON FOR A LENDER TO REFUSE TO SHARE HIS BANK STATEMENT WITH ITS CREDITO RS. THUS, COMMERCIAL REALITY WAS REQUIRED TO BE BORNE IN MIND WHILE TAKI NG A DECISION ADVERSE TO THE ASSESSEE. THE CIT(A), IN OUR VIEW, HAS CORR ECTLY APPROACHED THE ISSUE AND DELETED THE ADDITION TOWARDS UNEXPLAINED CREDIT IN RESPECT OF TWO PARTIES. THE CIT(A) HAS ALSO RIGHTLY SUSTAINED THE ADDITION TOWARDS ANOTHER IN THE AMOUNTING TO RS.2 LAKHS DUE TO LACK OF COGENT EVIDENCES FURNISHED BY THE ASSESSEE AS NOTED IN ITS ORDER. THEREFORE, WE DO NOT SEE ANY WARRANT TO INTERFERE WITH THE FINDINGS OF THE C IT(A). THE ORDER OF CIT(A) IS ENDORSED IN TOTO. ITA NO.471 /RJT/2017 ( BY REVENUE) & ITA NO.414/RJT/2017 (BY ASSESSEE) DCIT VS. LEXUS CERAMIC P.LTD. ASST.YEAR 2013-14 - 10 - 9. IN THE RESULT, THE CROSS-APPEALS OF THE REVENUE AND ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 27/05/2019 AT AHMEDABAD. SD/- SD/- () ( !'#) !$ (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD ; DATED 27/05/2019 ../,./../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,)+ / THE RESPONDENT. 3. 7 1 81 / CONCERNED CIT 4. 81 ( ) / THE CIT(A)-3, RAJKOT 5. :;<1/ , , /DR,ITAT,RAJKOT 6. <#G0 / GUARD FILE. / BY ORDER, ,:11 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %&, / ITAT, RAJKOT 1. DATE OF DICTATION .. 105.5.19 (DICTATION-PAD 10- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 15.5.19 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 27.5.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.5.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER