ACIT 15(2), MUMBAI V. DISHA CONSTRUCTIONS, MUMBAI

ITA 4992/MUM/2012

• Counselvise Citation: 499219914 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 10-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOLL SRINIVAS RAO
• Assessee Lawyers: R C JAIN
• Keywords: Income from undisclosed sources; Onus to prove
• Section: 68; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNALD BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) . . , , ./ I.T .A. NO . 5066 / MUM/20 1 1 AND I.T.A. NO .4992 /MUM/20 12 ( / ASSESSMENT YEAR S : 20 0 8 - 09 & 2009 - 10 ) ASSTT. COMMISSIONER OF INCOME TAX, 15(2), MATRU MANDIR, ROOM NO.113, TARDEO, GRANT ROAD, MUMBAI - 400049 / VS. M/S DISHA CONSTRUCTION, 201, SQUARE ONE, GULMOHAR ROAD - 1, VILE PARLE (W), MUMBAI - 400049 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AADFD9171G / REVENUE BY SHRI GOLL SRINIVAS RAO / ASSESSEE BY SHR I R C JAIN AND SHRI AJAY DAGA / DATE OF HEARING ( I.T.A.NO .5066 /MUM/20 11) : 2 . 3 . . 2015 & ( I.T.A. NO .4992 /MUM/20 12) : 10.3.2015 / DATE OF PRONOUNCEMENT : 31 . 3. 2015 / O R D E R PER B R BASKARAN, AM : BOTH THE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A) - 26, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2008 - 0 9 AND 2009 - 10. SINCE IDENTICAL ISSUE IS URGED IN BOTH THE APPEALS, THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THE YEARS, THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DELETING THE ADDITION OF C ASH CREDITS MADE U/S 68 OF THE ACT. ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 2 3. WE SHALL FIRST TAKE UP THE APPEAL FILED FOR AY 2008 - 09. THE ASSESSEE IS ENGAGED IN THE LINE OF CIVIL CONSTRUCTION ACTIVITY. IN AY 2008 - 09, THE AO NOTICED THAT THE BALANCE IN UNSECURED LOANS STOOD AT RS.24.75 CRORES AS ON 31.3.2008 AS AGAINST RS.18.03 CRORES AS ON 1.4.2007. HENCE THE AO CALLED FOR DETAILS OF FRESH LOANS OBTAINED DURING THE YEAR RELEVANT TO THE AY 2008 - 09. THE ASSESSEE FILED CONFIRMATION LETTERS OBTAINED FROM THE LOAN CREDITORS, THEIR RESPECTIVE INC OME TAX RETURNS AND BANK STATEMENTS RELEVANT TO THE LOAN TRANSACTIONS. THE AO EXAMINED THE INCOME TAX RETURNS FILED BY THE RESPECTIVE CREDITORS A ND NOTICED THAT EACH OF THEM IS DISCLOSING INCOME AT A LOW LEVEL, WHICH IS NO COMMENSURATE WITH THE LOAN GIVEN TO THE ASSESSEE . FURTHER, HE NOTICED THAT THERE WAS ROTATION OF FUNDS BETWEEN THE CREDITORS. FOR EXAMPLE, THE LOAN RECEIVED FROM CHINTAMANI EXPORTS WAS RS.1.20 CRORES AND M/S CHINTAMANI EXPORTS WAS DECLARING AN INCOME OF RS.2,45,272/ - . FURTHER, ACCORDI NG TO THE AO, THE SAID INCOME TAX RETURN WAS ALSO SUFFERING FROM CERTAIN MISTAKES. ACCORDINGLY, THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO PROVE THE CREDIT WORTHINESS OF THE ABOVE SAID CREDITOR. IN THE SIMILAR WAY, THE AO EXAMINED THE INCOME TAX RETURNS AND BANK STATEMENTS OF ALL OTHER CREDITORS AND CAME TO THE IDENTICAL CONCLUSIONS. THE NAMES OF THE CREDITORS, WHOSE INCOME TAX RETURNS WERE EXAMINED BY THE AO, ARE GIVEN BELOW: - (A) CHINTAMANI EXPORTS (B) B.ASHOK KUMAR & CO. (C) Y OGI DIAM (D) VAISHALI GEMS ON EXAMINATION OF THE ABOVE SAID CREDITORS, THE AO NOTICED THAT THERE WERE CERTAIN COMMON FEATURES BETWEEN THEM, I.E., THEY SHARED SAME ADDRESS, THERE WERE ROTATION OF FUNDS BETWEEN THEM, THE LOANS GIVEN WERE DISPROPORTIONATE TO THEIR INCOME DISCLOSED IN THE INCOME TAX RETURNS, ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 3 THERE WERE SUBSTANTIAL TRANSACTIONS IN THEIR BANK ACCOUNTS. ACCORDINGLY, THE AO CAME TO THE FOLLOWING CONCLUSIONS: - 22.10 TO PUT IT SIMPLY, THE CREDITORS ARE PROVIDING ACCOMMODATION FOR BENEFIT AND AS THERE IS SCOPE TO DO SO BECAUSE OF TRADING IN DIAMONDS AND PRECIOUS STONES. WHEN REAL SUBSTANCE OF THE WHOLE GAMUT OF TRANSACTIONS IS LOOKED INTO, IT IS CLEAR THAT TWO PERSONS ARE GETTING BENEFITED IN TWO DIFFERENT WAYS. ON ONE SIDE, THE ASSESSEE CAN BRING BACK HIS INCOME FROM UNDISCLOSED SOURCES IN THE FORM OF LOANS. THE ASSESSEE WILL DEBIT INTEREST AND CLAIM THE SAME AS EXPENDITURE AND ALSO DEDUCT TAX AT SOURCE AND ISSUE A CERTIFICATE ACCORDINGLY. ON THE OTHER SIDE, THE CREDITORS WILL ENABLE UTILIS ATION OF THEIR BANK ACCOUNTS AND INTRODUCE THE MONEY, BELONGING TO THE ASSESSEE, IN THE MIDST OF SEVERAL OTHER MONETARY TRANSACTIONS. ACCORDINGLY, TRANSACTIONS ARE STRUCTURED, CONVENIENTLY, AND FOR MUTUAL BENEFIT. THE BENEFIT FOR THE CREDITORS IS ALL THER E TO BE SEEN. WITHOUT INVESTMENT, TAX FREE INTEREST IS EARNED. 4. BASED ON THE ABOVE CONCLUSIONS, THE AO HELD THAT THE LOANS RECEIVED FROM OTHER CREDITORS ARE ALSO NOT GENUINE. ACCORDINGLY, THE AO ASSESSED LOAN CREDITORS AGGREGATING TO RS.15.14 CRORE S AS INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 5. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) EXAMINED THE FINANCIAL STATEMENTS OF THE CREDITORS AND CAME TO THE CONCLUSION THAT THE SOURCES OF FUNDS GIVEN TO THE ASSESSEE STAND EXPLAINED THROUGH THE FI NANCIAL STATEMENTS. THE LD CIT(A) ALSO CALLED FOR A REMAND REPORT FROM THE AO, BUT THE ASSESSING OFFICER FAILED TO SUBMIT THE REMAND REPORT ON THE FINANCIAL STATEMENTS FILED BY THE ASSESSEE. ACCORDINGLY, THE LD CIT(A) CAME TO THE CONCLUSION THAT THE ASSE SSEE HAS DISCHARGED THE PRIMARY BURDEN PLACED UPON THE ASSESSEE U/S 68 OF THE ACT AND THE ASSESSING OFFICER HAS FAILED TO REBUT THE SAME. ACCORDINGLY, THE LD CIT(A) DELETED THE ASSESSMENT MADE U/S 68 OF THE ACT. 6. IN ASSESSMENT YEAR 2009 - 10 ALSO, TH E ASSESSEE HAD RECEIVED LOANS. BY FOLLOWING THE ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2008 - 09, THE AO ASSESSED THE AGGREGATE AMOUNT OF RS.2.33 CRORES AS INCOME OF THE ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 4 ASSESSEE AND ALSO DISALLOWED INTEREST EXPENDITURE OF RS.2.01 CRORES RELATING TO TH E CREDITORS ASSESSED IN AY 2008 - 09 AND 2009 - 10. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) DELETED THE ASSESSMENT MADE U/S 68 OF THE ACT FOR IDENTICAL REASONS GIVEN BY HIM IN THE APPEAL RELATING TO AY 2008 - 09 AND CONSEQUENTLY DELETED THE INTEREST DISALLO WANCE ALSO. 7. WE HEARD THE PARTIES AND PERUSED THE RECORD. IT IS WELL SETTLED PROPOSITION THAT THE INITIAL BURDEN OF PROOF TO PROVE THE CASH CREDITS IS PLACED UPON THE ASSESSEE, I.E., THE ASSESSEE IS REQUIRED TO DISCHARGE THREE MAIN INGREDIENTS IN RE SPECT OF THE CASH CREDITORS, VIZ., THE IDENTITY OF THE CREDITOR, THE GENUINENESS OF THE TRANSACTIONS AND CREDIT WORTHINESS OF THE CREDITOR. IF THE ASSESSEE DISCHARGES THE INITIAL BURDEN SO PLACED UPON HIM, THEN THE BURDEN OF PROOF GETS SHIFTED UPON THE AS SESSING OFFICER TO DISPROVE THE SUBMISSIONS OF THE ASSESSEE. IN THE INSTANT CASE, THE IDENTITY OF ALL THE CREDITORS IN BOTH THE YEARS STAND ESTABLISHED, SINCE THE ASSESSEE HAS FURNISHED THEIR CONFIRMATION LETTERS, INCOME TAX RETURNS AND FURTHER THE AO HAS ALSO IDENTIFIED THE OWNERS OF ALL THE CONCERNS. THERE IS NO DISPUTE THAT THE LOAN TRANSACTIONS HAVE BEEN ROUTED THROUGH THE BANKING CHANNELS AND HENCE THE GENUINENESS OF THE LOAN TRANSACTIONS ALSO STAND ESTABLISHED. THE AO HAS ONLY DOUBTED ABOUT THE CRE DIT WORTHINESS OF THE CREDITORS. 8. HOWEVER, A PERUSAL OF THE ASSESSMENT ORDER WOULD SHOW THAT THE ASSESSING OFFICER HAS DOUBTED ABOUT THE CREDIT WORTHINESS ONLY ON THE REASONING THAT THE INCOME DECLARED BY EACH OF THE CREDITORS WAS LOWER AND DISPROPORTI ONATE TO THE LOAN AMOUNT GIVEN BY THEM. IT IS PERTINENT TO NOTE THAT THE ASSESSING OFFICER DID NOT EXAMINE THE FINANCIAL STATEMENTS LIKE BALANCE SHEET OF EACH OF THE CREDITOR TO FIND OUT THE SOURCES AVAILABLE WITH THE EACH OF THE CREDITOR IN ORDER TO GIVE LOAN TO THE ASSESSEE. FOLLOWING OBSERVATIONS MADE BY LD CIT(A) IN AY 2008 - 09 BRINGS OUT THIS FACT: - 14 I HAVE CIRCUMSPECTED THE ENTIRE SPECTRUM OF FACTS AND CIRCUMSTANCES OF THE CASE VIS - - VIS CAREFULLY CONSIDERED THE ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 5 EVIDENCES ON RECORD AND VARIOUS JUDICIAL DECISIONS OVER THE ISSUE. I FIND THAT LD AO MERELY DOUBTED THE GENUINENESS OF CREDITS WITHOUT BRINGING ON RECORD ANY SUBSTANTIAL PIECE OF EVIDENCES CONTRARY TO THE CLAIM OF THE APPELLANT. FURTHER, I FIND THAT LD AO HAS WRONGLY PRESUMED THAT APP ELLANT HAS NOT DISCHARGED ITS ONUS CAST UPON IT IN FURNISHING REQUIRED EVIDENCES OF CREDITS APPEARING IN ITS BOOKS OF ACCOUNT. BEFORE COMING TO THE INDIVIDUAL REASONING GIVEN BY THE AO IN THE ASSESSMENT ORDER, HERE IT IS PERTINENT TO MENTION THAT APPELLAN T HAS PRODUCED 4 CASH CREDITORS FOR THEIR EXAMINATION AND LD AO HAS EXAMINED THEM BUT COULD NOT TRACE OUT ANY SUBSTANTIAL EVIDENCES WHICH COULD PROVE THAT CREDITS WERE NOT GENUINE. IT IS ALSO IMPORTANT TO NOTE THAT WHILE EXAMINING THESE 4 CREDITORS VIZ., CHINTHAMANI EXPORTS, B.ASHOK KUMAR & CO., VAISHALI GEMS & YOGI DIAM, AO HAD NOT PUT A SINGLE QUESTION ABOUT THE LOAN APPEARING IN THEIR NAME AND THEREFORE, MERELY ON THE BASIS OF RETURN OF INCOME, GENUINENESS OF CREDITS CANNOT BE DOUBTED UNLESS SUBSTANTIAL CONTRARY EVIDENCES ARE THERE ON RECORD IN HIS POSSESSION. IT IS VERY APPARENT FROM THE FINDING OF THE AO THAT HIS DECISION IS MERELY ON THE BASIS OF PRESUMPTION IGNORING THE FACT THAT SAME ISSUE WAS ALSO UNDER ACTIVE CONSIDERATION BY THE CIT - 15, WHO HAD ISSUED A NOTICE U/S 263 IN RESPECT OF AY 2006 - 07 VIDE NOTICE NO. CIT - 15/263/09 - 10/185 DATED 14.7.2009 AND WHILE ISSUING NOTICES HE HAD CATEGORICALLY MENTIONED ABOUT THE CASH CREDITS, WHICH WAS REMAINED TO BE ENQUIRED BY THE ASSESSING OFFICER, BUT AFTER REC EIPT OF EVIDENCE AND DETAILED WRITTEN SUBMISSION OF THE APPELLANT, LD CIT - 15 HAD DROPPED THE PROCEEDINGS U/S 263 ADMITTING THE EVIDENCE ON RECORD AND SATISFACTORY EXPLANATION OF THE APPELLANT VIDE ORDER DATED 15.3.2010 U/S 263. THEREFORE, THERE IS NO VALI D REASONS WHATSOEVER WITH THE PRESENT ASSESSING OFFICER TO DISCARD THE EVIDENCE ON RECORD AND FINDING OF THE THEN ASSESSING OFFICER AS WELL AS THE CIT, BEING HIS SUPERVISORY AUTHORITY. 9. IN PARAGRAPH 14.1 OF HIS ORDER, THE LD CIT(A) HAS POINTED OUT THAT THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN OF PROOF PLACED UPON IT U/S 68 OF THE ACT. HE HAS FURTHER OBSERVED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE EXPLANATION FURNISHED WAS, IN ANY MANNER, UNSATISFACTORY OR THERE WAS NO RELIABLE EVIDENCE WITH THE ASSESSEE. ACCORDINGLY, THE LD CIT(A) HAS GIVEN A DEFINITE FINDING THAT THE EVIDENCES FILED BY THE ASSESSEE REMAINED UN - REBUTTED. ACCORDINGLY, BY ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 6 PLACING RELIANCE ON THE FOLLOWING CASE LAW, THE LD CIT(A) HELD THA T THE ADDITION MADE U/S 68 OF THE ACT IS LIABLE TO DELETED: - (A) CIT VS. ORISSA CORPORATION (P) LTD (1986)(52 CTR (SC) 138. (B) DY. CIT VS. ROHINI BUILDERS (2003)(182 CTR (GUJ) 273 (C) CIT VS. BARJATIYA CHILDREN TRUST (2007)(7 ITJ 319)(MP). 10. THEN THE LD CIT(A) HAS EXAMINED THE SPECIFIC OBSERVATIONS MADE BY THE AO IN RESPECT OF ALL THE CREDITORS AND MADE FOLLOWING OBSERVATIONS, WHICH VINDICATES HIS EARLIER VIEW: - 14.3 HAVING REGARD TO THE ABOVE FINDINGS OF THE A.O & THE RIVAL SUBMISSIONS OF TH E APPELLANT AS CONTAINED IN THE WRITTEN SUBMISSION VIDE PARA 8 THEREOF PARTYWISE, I FIND CLEAR THAT THE A.O HAS MERELY DISBELIEVED THE CREDIT IGNORING THE FACT OF COMPLETE DISCHARGE OF PRIMARY ONUS WHICH LAY UPON THE APPELLANT. HAVING REGARD TO THE PAPERS PLACED IN THE PAPER BOOK WHICH WAS SUBMITTED IN THE COURSE OF APPEAL HEARING & REFERRED TO BY THE APPELLANT IN THE WRITTEN SUBMISSIONS, I AM CONVINCED THAT THE APPELLANT HAS FULLY DISCHARGED THE PRIMARY ONUS WHICH LAY UPON IT. IN THE COURSE OF APPEAL HEAR ING I HAD DIRECTED THE APPELLANT TO FURNISH BALANCE SHEETS ETC. OF THE LOAN CREDITORS NUMBERING 13 IN ALL. THE APPELLANT COMPLIED WITH THE SAME & SUBMITTED THE BALANCE SHEET ETC, IN RESPECT OF THE 12 CREDITORS, AS THE BALANCE SHEET ETC OF THE REMAINING CR EDITOR WAS ALREADY PLACED IN PAPER BOOK & WAS BEFORE THE A.O HENCE, THERE IS NO POINT OF DISPUTE THAT ADDITIONAL .. IS TAKEN ON RECORD. ON GOING THROUGH THE SAID BALANCE SHEETS IT IS SEEN THAT THE LOANS HAVE BEEN ADVANCED BY THE ABOVE CREDITORS OUT OF TH E CASH FLOW WITH THEM WHICH MAINLY GENERATED FROM REASLISATION OF SUNDRY DEBTORS AND AT THE SAME TIME THEY OBTAINED CREDIT FACILITIES FOR A LONGER PERIOD FROM THEIR SUPPLIERS. THE BALANCE SHEET OF THESE LOAN CREDITORS SPEAK FOR THEMSELVES. MOREOVER, THE AO ERRED IN HOLDING THAT THE CAPACITY TO ADVANCE LOAN EMANATES ONLY FROM THE INCOME THAT IS ULTIMATELY DISCLOSED IN THE RETURN OF INCOME BUT THE SAME ALSO FLOWS FROM THE BUSINESS WHICH IN THE PRESENT CASE IS FROM TRADING OF DIAMONDS & PRECIOUS STONES. IT WILL BE SEEN FROM THE PROFIT & LOSS A/C OF THE LOAN CREDITORS THAT THE TRADING TURNOVER WAS TO THE TUNE OF SEVERAL CRORES.. THE ABOVE SAID OBSERVATIONS MADE BY THE LD CIT(A), AFTER EXAMINING THE FINANCIAL STATEMENTS OF THE CREDITORS, WOULD SHOW THAT THE CREDITORS WERE HAVING ENOUGH SOURCES FOR ADVANCING THE MONEY TO THE ASSESSEE, MEANING ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 7 THEREBY, THE CREDIT WORTHINESS OF THE CREDITORS ALSO STAND ESTABLISHED BY THE ASSESSEE. THE FOLLOWING OBSERVATIONS MADE BY LD CIT(A) WOULD SHOW THAT THE ASSESSING OFFIC ER DID NOT BRING ANY MATERIAL ON RECORD TO REBUT THE EVIDENCES FURNISHED BY THE ASSESSEE: - .ON A PERUSAL OF THE ORDER SHEET (PAGE 4, 5 & 6) WHICH IS ANNEXED TO THE ASSESSMENT ORDER, IT IS SEEN THAT THE A.O HAS DONE NOTHING TO REBUT THE EVIDENCE ALREADY P LACED ON RECORD BY THE APPELLANT. HE HAS NOT EVEN PUT ANY LEADING QUESTIONS TO THESE LOAN CREDITORS WHICH ESTABLISH BEYOND ANY SHADOW OF DOUBT THAT THE A.O WAS SATISFIED ABOUT THE GENUINENESS OF THE LOAN TRANSACTIONS & THEIR CREDIT WORTHINESS. 11. TH E AO, AFTER REACHING CONCLUSIONS ABOUT CERTAIN CREDITORS, HAS APPLIED THE SAME TO THE REMAINING 10 CREDITORS ALSO. THE LD CIT(A) NOTICED THAT THE ASSESSING OFFICER DID NOT AFFORD ENOUGH OPPORTUNITY TO THE ASSESSEE WITH REGARD TO THE REMAINING CREDITORS. THE LD CIT(A) FURTHER NOTICED THAT MOST OF THE REMAINING CREDITORS (7 CREDITORS) WERE EXISTING CREDITORS AND THEIR GENUINENESS WAS EXAMINED BY THE AO IN AY 2006 - 07 & 2007 - 08. FURTHER CERTAIN CREDITORS DID NOT ADVANCE FRESH LOANS DURING THE YEAR UNDER CONS IDERATION. THE LD CIT(A) ALSO NOTICED THAT THE ASSESSEE HAS FURNISHED PRIMARY EVIDENCES IN RESPECT OF THE REMAINING CREDITORS ALSO IN ITS WRITTEN SUBMISSIONS. 12. ACCORDINGLY THE LD CIT(A) CAME TO THE CONCLUSION THAT THE ASSESSEE HAS ESTABLISHED THE GEN UINENESS OF THE TRANSACTIONS AND THE CREDIT WORTHINESS OF ALL THE LOAN CREDITORS. THE AO HAD REACHED CERTAIN CONCLUSIONS IN PARAGRAPH 22 OF THE ASSESSMENT ORDER. HOWEVER, THE LD CIT(A) HELD THAT THE ASSESSING OFFICER HAS SIMPLY GONE ON EXTRANEOUS CONSIDE RATIONS BY MAKING WILD GUESSES UNCONNECTED WITH THE APPLICATION OF SEC. 68. ACCORDINGLY, THE LD CIT(A) DELETED THE ASSESSMENT OF CREDITORS MADE U/S 68 OF THE ACT. ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 8 13. BEFORE US, EVEN THOUGH THE LD D.R SUBMITTED THAT THE LD CIT(A) WAS NOT CORRECT IN DELE TING THE ADDITION, YET HE COULD NOT CONTROVERT ANY OF THE FINDINGS GIVEN BY THE LD CIT(A). AS OBSERVED BY US EARLIER, WE NOTICE THAT THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN OF PROOF PLACED UPON IT U/S 68 OF THE ACT BY PROVING THE CREDIT WORTHINESS OF ALL THE CREDITORS. AS POINTED OUT BY LD CIT(A), THE QUANTUM OF INCOME DECLARED IN THE INCOME TAX RETURNS IS NOT THE SOLE FACTOR THAT DETERMINE THE CREDIT WORTHINESS. ON EXAMINATION OF THE BALANCE SHEET FILED BY THE CREDITORS, THE LD CIT(A) HAS GIVEN A DEFINITE FINDING THAT ALL THE CREDITORS WERE HAVING ENOUGH SOURCES, EITHER RECEIVED THROUGH REALISATION OF SUNDRY DEBTORS OR THROUGH LOANS, FOR GIVING ADVANCE TO THE ASSESSEE. BEFORE US, THE LD D.R COULD NOT CONTROVERT THE ABOVE SAID FINDINGS GIVEN BY L D CIT(A). WE NOTICE THAT HE ASSESSING OFFICER, AS OBSERVED BY THE FIRST APPELLATE AUTHORITY, HAS PROCEEDED TO ASSESS THE CREDITORS U/S 68 OF THE ACT ON SURMISES AND CONJECTURES WITHOUT REBUTTING ANY OF THE EVIDENCES FURNISHED BY THE ASSESSEE. HENCE, WE D O NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD CIT(A) IN AY 2008 - 09. 14. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REVENUE FOR AY 2009 - 10. WE HAVE EARLIER NOTICED THAT THE ASSESSING OFFICER HAS FOLLOWED HIS REASONING GIVEN IN TH E ASSESSMENT ORDER PASSED FOR AY 2008 - 09 TO MAKE THE ADDITION OF CREDITORS U/S 68 OF THE ACT IN THIS YEAR ALSO. HOWEVER, THE LD CIT(A) HAS CONSIDERED THE FINANCIAL STATEMENTS FURNISHED BY THE ASSESSEE IN RESPECT OF EACH OF THE CREDITORS AND HAS GIVEN A DE FINITE FINDING THAT THE CREDITORS HAVE ENOUGH SOURCES TO ADVANCE THE LOAN TO THE ASSESSEE. THUS, THE LD CIT(A) HAS HELD THAT THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN OF PROOF PLACED UPON IT U/S 68 OF THE ACT. HENCE, WE DO NOT FIND ANY REASON TO INT ERFERE WITH HIS ORDER IN AY 2009 - 10 ALSO. SINCE THE CREDITORS ARE HELD TO BE GENUINE, THE DISALLOWANCE OF INTEREST MADE BY ITA. NO . 5 066 /M UM/ 20 1 1 AND 4992 /M/201 2 9 THE AO IS ALSO LIABLE TO BE DELETED. ACCORDINGLY WE CONFIRM THE ORDER OF LD CIT(A) ON THAT ISSUE ALSO. 15. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31ST M AR , 2015 . 31ST MARCH , 2015 SD SD ( / SANJAY GARG ) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 31ST MAR CH , 201 5 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI