ACIT, Meerut V. M/s Meerut Rubber Factory, Meerut

ITA 5114/DEL/2010

• Counselvise Citation: 511420114 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 09-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 19-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: O P SAPRA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A.NO.5114/DEL/2010 ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME-TAX, M/S. MEERUT RU BBER FACTORY, CIRCLE-1, MEERUT. VS. 158, VILL. ACHRONDA, PARTAPUR, MEERUT, U.P. PAN: AABFM7311B. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.S. NEGI, SR. DR. RESPONDENT BY : SHRI O.P. SAPRA, A DVOCATE. O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2006 -07 ARISES OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS ), MEERUT. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED AS UND ER:- 1. WHETHER THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.4,50,818/- IGNORING THE FACT THAT THE SUMS IN PA RTNERS CAPITAL ACCOUNT WERE ADVANCED BY THE ASSESSEE FIRM WITHOUT INTEREST WAS NOT RELATED TO THE BUSINESS ACTIVITY OF THE ASS ESSEE FIRM (RELIANCE IS PLACED IN THE CASE OF CIT VS. H.R. SUG AR FACTORY (P) LTD. (ALL.) 187 ITR 363. 2. WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE U/S 40A(IA) OF IT ACT IGNORING THE FACT THAT THE ASSESS EE HAD NOT 2 RECEIVED ANY FORM NO. 15H/15G IN TIME FROM THE PERS ONS TO WHOM THE INTEREST HAS BEEN PAID/CREDITED? 3. WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,47,907/- IGNORING THAT THE SAME HAS BEEN HELD TO BE THE BOGUS CREDITOR BY THE AO AS THE ASSESSEE FAILED TO PROVE THE IDENTITY, GENUINENESS AND THE CREDITWORTHINESS OF T HESE CREDITORS? 4. IN THE FACTS & CIRCUMSTANCES OF THE CASE, THE OR DER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASI DE AND THAT OF THE AO RESTORED. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.4,50,818/- BEING THE INTEREST DISALLOWED ON DEBI T BALANCES OF THE PARTNERS CAPITAL ACCOUNT. DURING THE YEAR UNDER CONSIDERATI ON THE ASSESSEE HAD NOT CARRIED OUT ANY BUSINESS ACTIVITY. IN EARLIER YEAR S IT WAS ENGAGED IN THE BUSINESS OF PRODUCTION OF CYCLES AND RICKSHAW TUBES AND TRADING THEREOF BUT THIS BUSINESS WAS STOPPED IN 2004. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD NEITHER PURCHASED NOR SOLD ANY ITEM NO R ENGAGED IN MANUFACTURING ACTIVITIES. THE OPENING STOCK DECLAR ED AT RS.34,13,030/- WAS SHOWN AS CLOSING STOCK AT THE SAME VALUE. THE ASSE SSEE HAD SHOWN TO HAVE RECEIVED INTEREST ON LOAN AMOUNTING TO RS.4,41,819/ - AGAINST WHICH THE ASSESSEE HAD SHOWN EXPENSES ON INTEREST AND FINANCI AL COMMISSION AMOUNTING TO RS.14,11,896/-. THE ASSESSEE HAD SHOW N SOME OTHER EXPENSES AND NET LOSS HAS BEEN RETURNED AT RS.9,77,706/-. T HE AO ASKED THE ASSESSEE 3 TO GIVE THE DETAILS OF INTEREST PAID. FROM THE DET AILS SUBMITTED IT WAS NOTICED THAT OUT OF LOAN AMOUNT OF RS.1,86,19,956/- THE ASS ESSEE HAD GIVEN INTEREST BEARING LOAN ONLY TO THE EXTENT OF RS.52,33,267/- A ND AMOUNT OF RS.32,55,670/- WAS OUTSTANDING AS SUNDRY DEBTORS. BESIDES THERE WAS DEBIT BALANCE IN THE ACCOUNT OF PARTNERS TOTALING TO RS.5 9,46,974/- ON WHICH NO INTEREST WAS CHARGED BY THE ASSESSEE THOUGH IT WAS PAYING INTEREST ON LOAN. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY INTERES T HAS NOT BEEN CHARGED FROM THE PARTNERS. IT WAS EXPLAINED BY THE ASSESSE E THAT PARTNERS HAD DECIDED NOT TO CHARGE INTEREST ON THEIR CAPITAL ACCOUNT. T HIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO ON THE GROUND T HAT THE ASSESSEE HAD PAID INTEREST ON LOANS WHICH HAVE NOT BEEN UTILIZED FOR THE PURPOSE OF BUSINESS OR FOR PURPOSE OF EARNING INTEREST TO THE EXTENT OF DEBIT BALANCES OUTSTANDING IN THE ACCOUNT OF FOUR PARTNERS. THE T OTAL LOAN TAKEN BY THE ASSESSEE AS PER BALANCE-SHEET WAS RS.1,86,19,956/- OUT OF WHICH THERE IS DEBIT BALANCE IN THE NAME OF PARTNERS AMOUNTING TO RS.59,46,947/- ON WHICH INTEREST HAS NOT BEEN CHARGED. THE AMOUNT GIVEN TO THE PARTNERS WORKED OUT TO 31.93% OF THE TOTAL LOAN. THE AO THEREFORE, DIS ALLOWED 31.93% OF INTEREST OF RS.14,11,890/- WHICH WAS DETERMINED AT RS.4,50,818/-. 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THAT ASS ESSEE INCURRED LOSSES IN ASSESSMENT YEAR 2003-04, 2004-05, 2005-06 AND 20 06-07 TOTALLING TO 4 RS.83,19,086/-. THE PARTNERS OF THE ASSESSEE FIRM INTRODUCED FRESH CAPITAL OF RS.9,726/- DURING THE YEAR ENDING 31 ST MARCH, 2004 AND RS.33,39,922/- DURING THE YEAR ENDING 31 ST MARCH, 2005. OUT OF FRESH INTRODUCTION THE PARTNERS OF THE ASSESSEE FIRM WITHDREW A SUM OF RS. 10,01,000/- DURING THE YEAR UNDER CONSIDERATION. THE CREDIT BALANCE OF PA RTNERS AS ON 31 ST MARCH, 2006 WAS RS.23,72,111.69. THE RESULTANT DEBIT BALA NCE AFTER CONSIDERING THE CREDIT BALANCE OF THE PARTNERS WAS AT RS.59,46,974. 68. THE DEBIT BALANCE WAS NOT ON ACCOUNT OF WITHDRAWALS MADE BY THE PARTNERS BUT IT WAS ON ACCOUNT OF INCURRENCE OF RECURRING LOSSES BY THE ASSESSEE FIRM . THE AO WAS THEREFORE, NOT JUSTIFIED IN DISALLOWING THE INTEREST OF RS.4,5 0,818/- OUT OF INTEREST PAYMENT TO THE CREDITORS. THE LEARNED CIT(A) DELET ED THE ADDITION ON THE GROUND THAT DEBIT BALANCE IN THE ACCOUNT OF PARTNER S WAS AT RS.59,48,974/- ON ACCOUNT OF LOSSES SUFFERED BY THE ASSESSEE. THE AM OUNT OF RS.59,48,974/- DID NOT REPRESENT THE WITHDRAWAL MADE BY THE PARTNE RS. THEREFORE, THE LEARNED CIT(A) CAME TO THE CONCLUSION THAT NO DISAL LOWANCE OF INTEREST COULD BE MADE ON ACCOUNT OF DEBIT BALANCES OF THE PARTNER S. HE ACCORDINGLY DELETED THE ADDITION. 4. BEFORE US THE LEARNED SR. DR SUPPORTED THE ORDER OF THE AO BY STATING THAT THE AO HAS RIGHTLY CHARGED INTEREST ON DEBIT B ALANCE STANDING IN THE NAMES OF THE PARTNERS. ON THE OTHER HAND, THE LEAR NED AR OF THE ASSESSEE 5 SUBMITTED THAT LOSSES SUFFERED BY THE ASSESSEE FIRM HAD NOT BEEN DEBITED IN THE ACCOUNT OF THE PARTNERS BUT SHOWN SEPARATELY. THERE WAS CREDIT BALANCE OF RS.33,73,111/- AS ON 31 ST MARCH, 2005 WHICH IS EVIDENT FROM THE BALANCE- SHEET. CREDIT BALANCE AS ON 31 ST MARCH, 2006 IN THE PARTNERS ACCOUNT WAS RS.23,72,111/-. THE DEBIT BALANCE AFTER ADJUSTING THE CREDIT BALANCE IN PARTNERS ACCOUNT WAS RS.59,46,974/-. SINCE THE PA RTNERS HAVE NOT WITHDRAWN ANY AMOUNT, INTEREST CANNOT BE CHARGED ON THE DEBIT BALANCE RESULTED BECAUSE OF LOSSES SUFFERED BY THE ASSESSEE FIRM. HE ACCORDINGLY PLEADED THAT THE LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITION. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAD SUFFERED LOSSES OF RS.83,19,086.27 IN ASSESSMENT YE AR 2003-04 TO ASSESSMENT YEAR 2006-07. THERE IS ALSO NO DISPUTE ABOUT THE FACT THAT AS ON 31 ST MARCH,2006, THERE WAS CREDIT BALANCE IN THE PARTNE RS ACCOUNT AT RS.23,72,111.69. AGAIN THE PARTNERS OF THE ASSESSE E FIRM HAVE INTRODUCED ABOUT RS.33.47 LAKHS IN ASSESSMENT YEAR 2004-05 AND 2005-06 OUT OF WHICH RS.10 LAKHS WERE WITHDRAWN IN THE YEAR UNDER CONSID ERATION. FROM THESE FACTS IT IS CLEAR THAT THE OUTSTANDING DEBIT BALANC E IN THE NAMES OF THE PARTNERS AT RS.59,46,974/- IS ON ACCOUNT OF LOSSES SUFFERED BY THE FIRM AND NOT BECAUSE OF WITHDRAWAL OF BORROWED FUNDS. THE AO HA D ALSO NOT SHOWN ANY 6 NEXUS BETWEEN THE FUNDS BORROWED AND THE DEBIT BALA NCE WHICH IN FACT IS THE OUTCOME OF LOSSES SUFFERED BY THE ASSESSEE. THEREF ORE, INTEREST CANNOT BE DISALLOWED. ACCORDINGLY, WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A) DELETING THE ADDITION OF INTEREST CHARGED ON DEBIT BALANCES OF THE PARTNERS. 6. NEXT ISSUE FOR CONSIDERATION RELATES TO DELETING THE ADDITION MADE UNDER SEC. 40(A)(IA) OF THE ACT. THE AO NOTED THAT THE ASSESSEE HAD PAID INTEREST OF RS.5,31,386/-. THE ASSESSEE WAS REQUIR ED TO DEDUCT TAX AT SOURCE U/S 194A OF THE ACT. SINCE THE ASSESSEE DID NOT DE DUCT TAX AT SOURCE, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE AMOUNT OF RS.5,31,386/- SHOULD NOT BE DISALLOWED U/S 40(A)(IA) OF THE ACT. IT WAS SUBMITTED BY THE ASSESSEE THAT PERSONS HAD FILED FORM NO.15G AND 15H ON THE B ASIS OF WHICH TAX WAS NOT DEDUCTED ON INTEREST PAYMENT. THE ASSESSEE WA S ASKED TO FURNISH FORM NO.15G & 15H CLAIMED TO HAVE BEEN FURNISHED BY THE PERSONS TO WHOM THE INTEREST WAS PAID. THE AO FOUND THAT THE INTEREST WAS PAID EITHER ON 31 ST MARCH, 2006 OR PRIOR TO THAT DURING F.Y. 2006-07 WH EREAS FORM 15G & 15H WERE FILED IN THE MONTH OF APRIL, 2006. SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE, THE AO DISALLOWED INTEREST UNDER SEC. 40 (A)(IA) OF THE ACT. 7. BEFORE THE CIT(A) IT WAS SUBMITTED THAT INTEREST IN THE ACCOUNT OF UNSECURED DEPOSITS WAS CREDITED ON 31 ST MARCH, 2006. TAX WAS NOT DEDUCTED 7 AT SOURCE ON AN UNDERSTANDING THAT FORM 15G/15H FOR NON-DEDUCTION OF TDS WAS SUBMITTED FROM VARIOUS UNSECURED DEPOSITORS REC EIVED BY THE FIRM ON 4.4.2006, 5.04.2006 AND 6.04.206 AND SAME WERE DULY FILED BEFORE THE COMMISSIONER OF INCOME-TAX, MEERUT. ONLY ON THE ST RENGTH OF THESE FORMS NO TDS WAS DEDUCTED BY THE ASSESSEE. IT WAS ALSO S UBMITTED THAT FILING OF FROM NO.15G/15H WAS A TECHNICAL MISTAKE NOT TO BE C ONCLUSIVE IN ORDER TO DECIDE THAT THE SAME WERE EITHER NOT RECEIVED IN TI ME OR THE LIABILITY FOR MAKING TDS FROM THE SAID PAYEES HAD ALREADY ARISEN BEFORE THAT DATE. IN ANY CASE EXCEPT THE TECHNICAL MISTAKE NO LOSS WHATS OEVER EITHER PROCEDURAL OR FACTUAL HAS BEEN CAUSED TO THE DEPARTMENT BY OBT AINING THE FORMS NO.15G/15H ON 4 TH , 5 TH AND 6 TH APRIL, 2006 INSTEAD OF OBTAINING THE SAME ON OR BEFORE 31 ST MARCH, BECAUSE THE DUE DATE FOR FILING THEREOF WAS 7 TH APRIL, BEFORE WHICH DATE THE SAME WERE ACTUALLY FILED BEFO RE THE CIT, MEERUT. THE LEARNED CIT(A) ON CONSIDERATION OF THE ABOVE SUBMIS SIONS MADE BY THE ASSESSEE OBSERVED THAT THE ADDITION U/S 40(A)(IA) H AS BEEN ONLY ON TECHNICAL GROUND OF ACCEPTING FORM NO.15G/15H AFTER THE CLOSE OF THE FINANCIAL YEAR. NO LOSS EITHER PROCEDURAL OR FACTUAL WAS CAUSED TO THE DEPARTMENT BY ACCEPTANCE OF SUCH FORMS AT A LATER DATE BY 4 TO 6 DAY FROM CLOSE OF THE FINANCIAL YEAR. THE SAID FORMS WERE FILED WITH APPR OPRIATE AUTHORITY WITHIN TIME. THE LEARNED CIT(A) THEREFORE, DELETED THE AD DITION. 8 8. BEFORE US THE LEARNED SR. DR SUBMITTED THAT THE ASSESSEE HAD PAID INTEREST WITHOUT DEDUCTING TAX AT SOURCE. THEREFOR E, PROVISIONS OF SEC. 40(A)(IA) ARE ATTRACTED AND THE AO HAS RIGHTLY DISA LLOWED THE INTEREST. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE HAS SUBM ITTED THAT IT WAS A TECHNICAL DEFAULT AND THE ASSESSEE CANNOT BE PENALI ZED FOR THE SAME. FORM NO.15G/15H WERE FILED BEFORE THE COMMISSIONER OF IN COME-TAX WITHIN THE TIME ALLOWED UNDER THE ACT. THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE U/S 194A OF THE AC T. UNDER SECTION 40(A)(IA) ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALT Y, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR, BEING RE SIDENT, FOR CARRYING OUT ANY WORK ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHA PTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SEC.(1) OF SEC. 139 O F THE ACT, SHALL NOT BE DEDUCTED IN COMPUTING TOTAL INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE ON THE GROUND THAT THE DEPOSITORS INTENDED T O FILE FORM NO.15G/15H 9 IN TIME BUT FORM NO.15G/15H WERE NOT FILED BY THE D ATE ON WHICH THE INTEREST WAS CREDITED/PAID TO THE DEPOSITORS. IN S ECTION 40 THE WORD SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEADS PROFITS AND GAINS OF BUSINESS OR PROFESSION HAVE BEEN EMPLOYED. IT IS A SETTLED LAW THAT WHERE THE WORD SHALL IS USED, IT IS MANDATORY. THEREFORE, FOR ALLOWANCE OF DEDUCTION U/S 40(A)(IA) THE ASSESS EE SHOULD HAVE EITHER OBTAINED FORM NO.15G/15H ON OR BEFORE THE 31 ST MARCH, 2006 OR SHOULD HAVE DEDUCTED TAX AT SOURCE. THE PROVISIONS OF SEC . 40(A)(IA) ARE MANDATORY IN NATURE AND WHERE THE ASSESSEE HAD NOT DEDUCTED T AX AT SOURCE, THE DEDUCTION WILL NOT BE ALLOWABLE. THERE IS NO DISCR ETION WITH THE CIT(A) TO EXTEND THE TIME OF FILING OF FORM NO1.5G/15H BEYOND THE LAST DATE OF ACCOUNTING YEAR. THEREFORE, IN OUR CONSIDERED OPIN ION, THE LEARNED CIT(A) WAS NOT RIGHT IN DIRECTING THE AO TO ALLOW THE DEDU CTION ON THE GROUND THAT NO LOSS OF REVENUE HAS OCCURRED AND DELAY IN FILING WAS TECHNICAL IN NATURE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AN D RESTORE THE ORDER OF THE ASSESSING OFFICER ON THIS GROUND. 10. THE LAST ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.4,47,907/- U/S 68 FOR ALLEGED UNEXPLAINED UNSECU RED LOANS. THE FACTS OF THE CASE RELATING TO THIS GROUND ARE THAT THE AO AD DED THE AMOUNT OF RS.3,97,907/- BEING THE AMOUNT OF FRESH UNSECURED L OAN IN THE FORM OF 10 DEPOSITS RECEIVED FROM 55 PERSONS ON THE GROUND THA T THE ASSESSEE DID NOT FILE COPY OF ACCOUNT OF SAID DEPOSITORS EVEN AFTER ACQUIRING THE SAME DURING THE ASSESSMENT PROCEEDINGS. THE AO HAS ADDED TOTAL OF ALL FRESH DEPOSITS BELOW RS.50,000/-. THE FRESH EVIDENCES SUBMITTED B Y THE ASSESSEE DURING APPELLATE PROCEEDINGS IN THE FORM OF COPIES OF ACCO UNTS WERE CONFRONTED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD NO T COMMENTED UPON IN REMAND PROCEEDINGS ON THE GROUND THAT THE SAME WAS NOT BE ADMITTED AT APPEAL STAGE. THE AO DID NOT CONSIDER THE EVIDENCE S FILED BY THE ASSESSEE AT ALL IN THE REMAND REPORT. BESIDES THIS AMOUNT HE H AS FURTHER ADDED A SUM OF RS.50,000/- RECEIVED AS DEPOSIT IN THE NAME OF ONE SHRI MANOJ KUMAR HOLDING THAT THE DEPOSITOR WAS NOT ASSESSED TO TAX AND THAT BEFORE GIVING CHEQUE OF RS.50,000/- TO THE ASSESSEE, CASH OF RS.5 0,000/- WAS DEPOSITED ON THE SAME DATE IN HIS BANK ACCOUNT. 11. DURING THE APPEAL PROCEEDINGS THE ASSESSEE FILE D CONFIRMED COPIES OF ACCOUNTS FROM ALL DEPOSITORS AS FRESH EVIDENCE REQU ESTING THAT THE SAME TO BE ADMITTED UNDER RULE 46A OF THE INCOME-TAX RULES, 19 62. IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAID EVIDENCES COULD NOT B E FILED DURING THE ASSESSMENT PROCEEDINGS FOR THE REASON THAT THE COUN SEL OF THE ASSESSEE MET WITH SEVERE ACCIDENT AND THE PERSON REPRESENTING TH E ASSESSMENT PROCEEDINGS COULD NOT TAKE NOTE OF THE REQUIREMENT OF THE AO TO SUBMIT CONFIRMED COPIES 11 OF ACCOUNT OF THE DEPOSITORS MAKING DEPOSIT OF LESS THAN RS.50,000/- EACH. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD FULLY C OOPERATED IN ASSESSMENT PROCEEDINGS AND HAD FILED ALL CONFIRMED COPIES OF A CCOUNTS AND OTHER REQUISITE DETAILS WITH REFERENCE TO ALL DEPOSITORS WHETHER NEW OR OLD. REGARDING THE DEPOSIT OF RS.50,000/- FROM SHRI MANO J KUMAR IT WAS SUBMITTED THAT THERE WAS NO CASH DEPOSIT ON THE DAT E OF ISSUANCE OF CHEQUE TO THE ASSESSEE WHICH WAS ISSUED ON 8.4.2005 AND CLEAR ED FROM THE DEPOSITORS BANK ACCOUNT ON 11.04.2005. IT WAS ALSO SUBMITTED THAT THERE WERE BANK DEPOSITS OF RS.90,000/- AND RS.1,00,000/- ON 4.04.2 005 AND 5.04.2005 IN THE BANK ACCOUNT OF THE DEPOSITOR. HE FURTHER SUBMITTED THAT TO ASSUME THAT FOR GETTING A DEPOSIT OF RS.50,000/- FROM THE SAID DEPO SITOR, THE ASSESSEE HAD DEPOSITED THE SUM OF RS.1,90,000/- IN HIS BANK ACCO UNT WAS BEYOND IMAGINATION. HE THEREFORE, SUBMITTED THAT THE DEPO SITOR WAS A MAN OF MEANS AND DURING A PERIOD OF 37 DAYS DURING 13.03.2005 TO 19.04.2005 THERE WERE VARIOUS BANK DEPOSITS TOTALING TO RS.3,22,000/-. 12. THE LEARNED CIT(A) CONSIDERED THE SUBMISSIONS M ADE BY THE ASSESSEE IN RESPECT OF DEPOSIT OF RS.50,000/- BY SHRI MANOJ KUMAR. HE OBSERVED THAT THERE WAS DEPOSIT OF RS.3,22,000/- WITHIN A PERIOD OF 37 DAYS. THEREFORE, SHRI MANOJ KUMAR WAS A MAN OF MEANS. THE LEARNED C IT(A) HAS DELETED THE ADDITION. AS REGARDS OTHER ADDITIONS OF RS.3,97,90 7/- THE LEARNED CIT(A) 12 OBSERVED THAT ADDITIONAL EVIDENCE WAS CONFRONTED TO THE AO BUT SHE DID NOT COMMENT THEREUPON. THE LEARNED CIT(A) THEREFORE, T REATED THE DEPOSITS BY 55 PERSONS AT RS.3,97,907/- AS GENUINE AND DELETED THE ADDITION. 13. BEFORE US, THE LEARNED SR. DR SUBMITTED THAT TH E ASSESSEE HAD NOT FILED CONFIRMATION BEFORE THE AO AND THE AO HAS OBJECTED TO ADMISSION OF ADDITIONAL EVIDENCE. THE AO HAS NOT EXAMINED THE C REDITORS. HE ALSO SUBMITTED THAT THE LEARNED CIT(A) HAS ALSO NOT EXAM INED THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LOAN DEPOS ITS. THEREFORE, THE LEARNED CIT(A) WAS NOT CORRECT IN DELETING THE ADDI TION. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAD PRODUCED BEFORE THE CIT(A) THE DETAILS OF DEPOSITS IN THE NA MES OF DEPOSITORS, AMOUNTS DEPOSITED BY THEM WITH SUPPORTING DOCUMENTS TO PROV E THEIR IDENTITY ETC. BESIDES SPECIFICALLY MENTIONED THEREIN THAT SUCH DE POSITS INCLUDED RS.84,010/- RENEWAL OF OLD DEPOSITS. AS REGARDS D EPOSITS OF RS.50,000/- MADE BY SHRI MANOJ KUMAR, IT WAS SUBMITTED THAT HE HAD FILED CONFIRMATION. IT WAS ALSO SUBMITTED THAT IT WAS AN OLD ACCOUNT WI TH OPENING CREDIT BALANCE OF RS.4,345/-. HE HAS FURTHER ADVANCED RS.50,000/- BY CHEQUE. THEREFORE, NO ADDITION WAS TO BE MADE. HE THEREFORE, SUBMITTE D THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. 13 14. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE DETAILS ABOVE, IT IS CLEAR THAT SHRI MANOJ KUMAR HAS DEPOSITED RS.50,000/- DURING THE YEAR UND ER CONSIDERATION. THE LEARNED AR OF THE ASSESSEE HAS ALSO SUBMITTED THAT RS.84,010/- REPRESENTED THE RENEWAL OF OLD DEPOSITS. THE AO HAD NOT GIVEN ANY COMMENTS ON THE GROUND THAT SHE OBJECTED TO THE ADMISSION OF ADDITI ONAL EVIDENCE. IN OUR CONSIDERED OPINION THE ISSUE REQUIRED TO BE EXAMINE D BY THE ASSESSING OFFICER AFRESH WITH REFERENCE TO IDENTITY, CREDITWO RTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION AS THE LEARNED C IT(A) WHILE DELETING THE ADDITION HAS NOT MENTIONED ANYTHING IN THE ORDER. WE, THEREFORE, SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE CREDITORS AND DECIDE THE ISSUE AFRESH AFTER AFF ORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 16. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 13 TH JULY, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACOUNTANT MEMBER DATED: 13 TH JULY, 2012. 14 ITA NO.5114/DEL/2010 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.