ACIT, Agra V. M/s Rhizome Engineers P.Ltd, Auraiya

ITA 518/AGR/2008

• Counselvise Citation: 51820314 RSA 2008
• Duration Of Justice: 3 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-05-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 11-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A R OJHA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Source of fund; Question of law; Corroborative evidences; Accommodation entries; Assessment record
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.518/AGR/2008 ASSESSMENT YEAR: 2004-05 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S RHIZOME ENGINEERS PVT. LTD., CIRCLE-1, AGRA. DIVIYAPUR, AURIYA. (PAN: AABCR 7319 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI A.R. OJHA, C.A. DATE OF HEARING : 30.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 22.06.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 29.04.2008 PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEAR 2004-05. 2. THE REVENUE HAS RAISED AS MANY AS 14 GROUNDS OF APPEAL WHEREIN EFFECTIVE GROUND IS IN RESPECT OF DELETION OF ADDITION OF RS. 43,80,000/- BEING UNEXPLAINED CASH CREDIT OF 12 PERSONS. ITA NO.518/AGR/2008 A.Y. 2004-05 . 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM CONSTRUCTION AND ENGINEERING WORK ON CONTRACT BASIS . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS TAKEN APPROXIMATELY LOANS FROM100 DIFFERENT PERSONS. SOM E OF THE LOANS WERE TAKEN IN CASH AND SQUARED UP DURING THE YEAR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE LOANS. THE ASSESSING OFFICER NOTICED THAT SOME OF THE CREDITOR S HAVE GIVEN CONTRADICTORY STATEMENTS. THE ASSESSING OFFICER FOUND THAT THE L OANS WERE FICTITIOUS AND THE ASSESSEES OWN UNACCOUNTED MONEY. IN VIEW OF THE F ACTS, THE ASSESSING OFFICER MADE TOTAL ADDITION OF RS.45,19,249/-. THE DETAILS OF THE SAID AMOUNT ARE AS UNDER:- I) SHRI GOPAL MAHESHWARI RS. 5,00,000/- II) SHRI GOPI SHYAM PATHAK RS. 3,35,000/- III) M/S SHARDA TRADERS RS. 2,50,000/- IV) SHRI ANAND KUMAR RS. 1,00,000/- V) SHRI ASHOK KUMAR RS. 1,00,000/- VI) SHRI DHARMENDRA PATHAK RS. 3,35,000/- VII) M/S. R.G. FINLEASE (P) LTD., ETAWAH RS.20,00,0 00/- OTHER LOANS: A) SHRI MAHENDRA PRATAP SINGH RS.1,39,249/- B) SHRI K.K. DUBEY RS. 60,000/- C) SHRI LALOO PRASAD RS.2,00,000/- D) M/S MISHRA ARMS RS.2,00,000/- E) SHRI RAJESH KUMAR RS.1,00,000/- F) SMT. KUSUM LATA RS.2,00,000/- ----------------- TOTAL RS.45,19,249/- ------------------ ITA NO.518/AGR/2008 A.Y. 2004-05 . 3 4. THE CIT(A) CONFIRMED THE ADDITION OF RS.1,39,249 /- IN THE NAME OF SHRI MAHENDRA PRATAP SINGH AND DELETED THE ADDITION ON A CCOUNT OF OTHER PARTIES AS UNDER :- (CIT(A) PAGE NOS.4 TO 11) ( I) SHRI GOPAL MAHESWARI - RS.5,00,000/- IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS STATED THAT THE APPELLANT PRODUCED THE CREDITOR GOPAL MAHESHWAR I WHOSE STATEMENT WAS RECORDED. THE SAID WITNESS STATED TH AT HE HAD GIVEN A LOAN OF RS.5,00,000/-TO THE APPELLANT FOR WHICH HE IS GETTING INTEREST @ 12% I.E. HE HAS GOT RS.60,000/-. ON BEING QUESTIO NED, AS TO WHETHER HE HAS RECEIVED INTEREST BY CASH OR CHEQUE, THE CREDITOR STATED THAT HE HAS NOT YET RECEIVED ANY INTEREST FROM THE APPELLANT. THE ASSESSING OFFICER ALSO OBSERVED THAT SRI GOPAL MAHE SHWARI HAS FILED A RETURN SHOWING RS.1,15,310/- AS INCOME FROM OTHE R SOURCES. HENCE, THE ASSESSING OFFICER HELD THAT IT IS NOT PR ACTICALLY POSSIBLE FOR A PERSON EARNING RS.1,15,310/-TO GIVE A LOAN OF RS. 5,00,000/-. HENCE THE ASSESSING OFFICER HELD THAT THE LOAN IS FICTITI OUS AND THE APPELLANTS OWN UNACCOUNTED MONEY AND ACCORDINGLY A DDED RS.5,00,000/-TO THE APPELLANTS INCOME. IN THE COURSE OF APPELLATE PROCEEDINGS, THE APPELL ANT FILED DETAILED WRITTEN SUBMISSIONS STATING THEREIN AS UND ER:- (A) THE LOAN WAS RECEIVED ON 2 DATES I.E. 12.03.2004 RS.2,50,000/- 27.03.2004 RS.2,50,000/- RS.5,00,000/- THUS, THE LOAN WAS HELD BY THE APPELLANT FOR LESS T HAN 1 MONTH DURING THE RELEVANT ACCOUNTING YEAR. THEREFORE, TH ERE WAS NO REASON FOR GIVING INTEREST FOR THE WHOSE YEAR. HOWEVER, I NTEREST HAS BEEN PAID IN THE SUBSEQUENT YEAR. (B) SRI GOPAL MAHESHWARI IS DOING MONEY LENDING BUS INESS. HIS CASH-IN-HAND IS HIS STOCK-IN-TRADE. HE HAD SUFFICI ENT BALANCE IN HIS ITA NO.518/AGR/2008 A.Y. 2004-05 . 4 A/C WITH STATE BANK OF INDIA FROM WHICH THE IMPUGNE D LOAN HAS BEEN RECEIVED THROUGH A/C PAYEE CHEQUES. (C) SRI GOPAL MASHESWARI HAS FURTHER EXPLAINED THE SOURCE OF DEPOSITS IN HIS BANK A/C AS UNDER:- CH.NO.139118 DT.12.3.04 RS.2,50,000 FROM M/S NAND KISHORE ARVIND KUMAR (DALL MILL AND COMMISSION AGENT) CH. NO. 143768 DT.27.3.04 RS.1,00,000 BALMUKAND BHAGWAN DAS (DALL MILL & COMMISSION AGENT) CH. NO. 139129 DT.27.3.04 RS.1,50,000 FROM M/S NA ND KISHORE ARVIND KUMAR PAN OF BOTH M/S NAND KISHORE ARVIND KUMAR AND BAL M UKAND BHAGWAN DAS HAS BEEN FURNISHED. LEDGER ACCOUNT OF SRI GOPAL MAHESHWARI IN THE BOOKS OF M/S BALMUKAND BHAGWAN DA S AND M/S NAND KISHORE ARVIND KUMAR AS UNDER:- M/S BAL MUKAND BHAGWAN DAS 1.4.2001 - 31.3.2002 1.4.2002 - 31.3.2003 1.4.2003 - 31.3.2004 M/S NAND KISHORE ARVIND KUMAR DO I HAVE CONSIDERED THE ARGUMENTS OF THE APPELLANT A ND PERUSED THE AFORESAID DOCUMENTS. IT IS ALSO OBSERVED FROM T HE ASSESSMENT RECORDS THAT THE ASSESSING OFFICER HAS NOT CALLED F OR THE CREDITORS BANK STATEMENT NOR QUESTIONED HIM AS TO THE SOURCE OF HIS FUNDS. THE ASSESSING OFFICER HAS ALSO OVERLOOKED THE FACT THAT THE LOAN WAS RECEIVED BY THE APPELLANT IN 2 TRENCHES OF RS.2,50, 000/- EACH ON 12.3.2004 AND 27.3.2004 AND THEREFORE OBVIOUSLY THE CREDITOR WAS NOT ENTITLED FOR INTEREST OF RS.60,000, FOR THE ENTIRE YEAR, THE LOAN HAVING BEEN GIVEN TO THE APPELLANT ONLY FOR 19 DAYS AND 4 RESPECTIVELY. IN VIEW OF THE FOREGOING FACTS, THE LOAN OF RS.5,0 0,000/- IS FOUND TO BE DULY EXPLAINED BY THE APPELLANT. HENCE, THE ADDITION OF RS.5,00,000/-IS DELETED. ITA NO.518/AGR/2008 A.Y. 2004-05 . 5 (II) SRI GOPY SHYAM PATHAK - RS.3,35,000/- & SRI DH ARMENDRA PATHAK, S/O SRI GOPY SHYAM PATHANK - RS.3,35,000/- THE ASSESSING OFFICER RECORDED THE STATEMENT OF THI S CREDITOR WHO CONFIRMED GIVING THE LOAN FOR INTEREST @12% P.A . AND STATED THAT HE HAS RECEIVED INTEREST OF RS.40,000/-. SUBSEQUEN TLY, THE SAID CREDITOR DENIED RECEIVING ANY INTEREST FROM THE APP ELLANT. THE CREDITOR IS A RETIRED SENIOR STENO OF LOKMANYA RURA L INTER COLLEGE, MAHEVA DISTT., ETAWAH. HE IS RECEIVING RS.46,800/- AS PENSION AND HAS RS.1 LAKH AGRICULTURAL INCOME. HE DOES NOT FIL E ANY RETURN OF INCOME. THE ASSESSING OFFICER HELD THE LOAN AS FIC TITIOUS AND THE APPELLANTS OWN UNACCOUNTED MONEY AND ACCORDINGLY A DDED RS.3,35,000/- TO THE APPELLANTS INCOME. THIS CREDITOR IS THE SON OF SRI. GOPY SHYAM PATHAK . IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS STATED T HAT THE RETURN OF INCOME AND BANK STATEMENT OF THIS CREDITOR WAS NOT PRODUCED BY THE APPELLANT. HENCE, THE ASSESSING OFFICER TREATED TH E LOAN AS AN UNEXPLAINED CASH CREDIT AND ADDED IT TO THE APPELLA NTS INCOME. IN THE COURSE OF APPELLATE PROCEEDINGS, VIDE WRITT EN SUBMISSION FILED ON 7.2.2008 THE APPELLANT STATED THAT THE IMP UGNED LOANS OF RS.3,35,000/- EACH WERE RECEIVED ON 19.3.2004 AND T HEREFORE THERE WAS NO LIABILITY TO PAY INTEREST DURING THE RELEVAN T PREVIOUS YEAR. THE APPELLANT ALSO FURNISHED PHOTOCOPY OF THE RELE VANT JOINT BANK ACCOUNT OF SRI GOPY SHYAM PATHAK AND SRI DHARM ENDRA PATHAK IN STATE BANK OF INDIA, PATA WHICH WAS PRODUCED BEF ORE THE ASSESSING OFFICER AND EXAMINED BY HER AS APPARENT FROM THE ST ATEMENT OF SRI GOPAL SHYAM PATHAK RECORDED BY THE ASSESSING OFFICE R ON 6.12.2006. IT IS OBSERVED THAT THERE ARE DEPOSITS OF RS.6,67, 072/- BY TRANSFER ON 30.1.2004, 5.2.2004 AND 7.2.2004 WHICH ARE STATED BY THE CREDITOR TO BE ENCASHMENT OF FDRS IN THE SAME BANK. THE 2 LOANS OF RS.3,35,000/- EACH HAVE BEEN GIVEN BY CHEQUES AND T RANSFERRED TO THE APPELLANTS A/C IN THE SAME BANK. THE CASH DEPOSIT OF RS.1,00,000/- ON 17.3.2004 IS STATED TO BE THE AMOUNT OF RS.1,00, 000/- WITHDRAWN ON 14.2.2004 WHICH WAS REDEPOSITED. ITA NO.518/AGR/2008 A.Y. 2004-05 . 6 IN VIEW OF THE AFORESAID FACTS AND IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY THE LOANS CANNOT BE TREATE D AS UNEXPLAINED. CONSEQUENTLY, THE ADDITION OF RS.6,70,000/- (RS.3,3 5,000/- + RS.3,35,000/-) IS NOT SUSTAINABLE AND ACCORDINGLY D ELETED. (III) M/S SHARDA TRADERS - RS.2,50,000/- THE ASSESSING OFFICER HAS TREATED THE LOAN AS UNEX PLAINED CASH CREDIT AND THEREFORE THE APPELLANTS INCOME AS THE APPELLANT FAILED TO PRODUCE THE CREDITOR BEFORE THE ASSESSING OFFICER, THEREBY FAILING TO ESTABLISH THE IDENTITY OF THE CREDITOR. IN THE COURSE OF APPELLATE PROCEEDINGS, VIDE WRITTE N SUBMISSIONS FILED ON 7.2.2008, THE APPELLANT STATED AS UNDER:- - THE PROPRIETOR OF M/S SHARDA TRADERS IS SRI RAJ K UMAR CHAUHAN. THE SAID CREDITOR APPEARED BEFORE THE ASSESSING OFFICER ON 29.11.2006 IN PERSON ALONG WI TH OTHER DEPOSITORS, BUT HIS STATEMENT COULD NOT BE RE CORDED. ON THE NEXT HEARING, WHEN HE WAS CALLED UPON TO APP EAR IN PERSON, HE WAS OUT OF STATION AND EXPECTED TO RE TURN ON 26.12.2006. HENCE, A.R. OF THE APPELLANT REQUESTED THE ASSESSING OFFICER TO ISSUE A NOTICE TO THE CREDITOR . THE AFFIDAVIT DATED 6.11.2006 OF THE CREDITOR STANDS FI LED BEFORE THE AO. THE LOAN WAS SQUARED UP ON 29.3.200 4. A DECLARATION DATED 5.7.2005 OF THE SAID CREDITOR H AS BEEN FILED IN WHICH IT IS STATED AS UNDER:- THIS IS TO CERTIFY THAT I HAVE GIVEN THE UNSECURED LOAN TO M/S RHIZOME ENGINEERS PVT. LTD., NEAR GAIL VIHAR, DIBIYAPUR, AURAIYA THROUGH DD NO.0592/006186 DATED 23.09.2003 A SUM OF RS.2,50,000/- (TWO LAC FIFTY THOUSAND ONLY) I HAVE RECEIVED ALL MY OUTSTANDING AMOUNT VIDE DD NO.880005 DATED 29.3.2004 AGAINST MY OUTSTANDING AMOUNT AND SUPPLY OF MATERIAL. A LETTER DATED 12.2.2008 WAS ADDRESSED TO THE APPE LLANT BY THIS OFFICE, AS UNDER:- ITA NO.518/AGR/2008 A.Y. 2004-05 . 7 .. YOU ARE REQUESTED TO FURNISH THE FOLLOWING - 1. BANK STATEMENT OF SHARDA TRADERS REFLECTING ALL TRANSACTIONS PERTAINING TO THE APPELLANT ALONG WITH DETAILS OF SOURCE OF FUNDS PRIOR TO THE PAYMENT OF LOAN TO THE APPELLANT, ALONG WITH SUPPORTING EVIDENCE VIDE LETTER DATED 12.3.2008, THE APPELLANT HAS REPL IED THAT THE UNSECURED LOAN OF RS.2,50,000/- WAS TAKEN ON 23.9.2 003 VIDE DD NO.0592/006186. THE REPAYMENT WAS MADE VIDED NO.88 0005 DATED 29.3.2004 FOR RS.2,60,069, COMPRISING RS.2,50,000/- LOAN AND RS.10,069/- AGAINST SUPPLY OF MATERIAL BY HIM. IT IS ALSO STATED BY THE APPELLANT THAT AS THERE IS NO FURTHER DEALING WITH THE SAID PARTY, THE SAID PARTY IS NOT YIELDING TO REQUEST FOR SUPPLY OF INFORMATION AS TO THE SOURCE OF THE AMOUNT LENT TO THE APPELLANT, RELEVAN T BANK STATEMENT SHOWING THE AMOUNT ADVANCED AND THE CREDIT BALANCE, AGAINST WHICH THE DD FOR THE IMPUGNED LOAN WAS OBTAINED BY THE SA ID CREDITOR. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND TH AT THE SAID CREDITOR HAS GIVEN AND AFFIDAVIT WHICH HAS NOT BEEN REFUTED BY THE AO. THE APPELLANT ALSO APPEARS TO HAVE PURCHASED SOME M ATERIAL FROM THE SAID PERSON. THE REPAYMENT IS STATED TO COMPRISE T HE LOAN AND THE PRICE OF THE MATERIAL. THERE IS NO EVIDENCE ON REC ORD TO SHOW THAT THE CREDITOR DOES NOT EXIST OR THAT HE HAS NOT ENTERED INTO THE ABOVE TRANSACTIONS WITH THE APPELLANT. NO ENQUIRIES IN M AHEWA, ETAWAH OR WITH THE BANK THROUGH WHICH THE DD HAS BEEN OBTAINE D BY M/S SHARDA TRADERS HAS BEEN CARRIED OUT BY THE AO TO DISPROVE THE EXISTENCE AND CREDITWORTHINESS OF M/S SHARDA TRADERS AND THE GENU INENESS OF THE TRANSACTION. THUS, THERE IS NO BASIS TO REACH THE CONCLUSION THAT THE NATURE AND SOURCE OF THE LOAN OF RS.2,50,000/- IN T HE NAME OF SHARDA TRADERS IS UNEXPLAINED. IN THESE CIRCUMSTANCES, TH E ADDITION OF RS.2,50,000/- IS NOT SUSTAINABLE AND HENCE DELETED. (IV) SRI ANAND KUMAR RS.1,00,000/- THE APPELLANT HAS SHOWN A LOAN OF RS.1,00,000/- FRO M ONE SRI ANAND KUMAR R/O DIBIYAPUR. ON PERUSAL OF THE SAID CREDITORS RETURN, THE AO OBSERVED THAT HIS TOTAL RETURNED INCOME IS O NLY RS.82,500/-. HENCE, IT IS NOT CREDIBLE THAT A PERSON WITH SUCH M EAGER INCOME WOULD ITA NO.518/AGR/2008 A.Y. 2004-05 . 8 GIVE A LOAN OF RS.1,00,000/- AND THAT TOO WITHOUT I NTEREST. THE APPELLANT WAS ASKED TO FURNISH THE LENDERS RELEVAN T BANK STATEMENT. ON PERUSAL OF THE BANK STATEMENT, THE AO FOUND THAT ONLY THE DEBIT OF THE ALLEGED LOAN IS REFLECTED THEREIN AND THERE IS NO CREDIT ENTRY PRIOR TO THAT. NO DETAILS OF CREDIT ENTRY IN BANK A/C WE RE FURNISHED EVEN THOUGH THE AO REPEATEDLY ASKED THE APPELLANT TO PRO VE THE CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENES S OF THE LOAN TRANSACTION. HENCE, THE AO TREATED THE SAID LOAN A S UNEXPLAINED AND THE APPELLANTS OWN UNACCOUNTED MONEY AND ACCORDING LY ADDED RS.1,00,000/- TO THE APPELLANTS INCOME. VIDE WRITTEN SUBMISSIONS FILED ON 7.2.2008, THE APP ELLANT CONTENDED THAT THE SAID LENDER IS DOING BUSINESS IN BUILDING MATERIAL. HIS FATHER SRI SUBEDAR GUPTA IS AN AGRICULTURIST HA VING HIS OWN AGRICULTURAL INCOME. HIS INCOME IS RS.88,900/- NOT RS.82,500/- AS OBSERVED BY THE AO SINCE RS.82,500/- IS INCOME AFTE R 80L DEDUCTION. THE LENDERS FAMILY CONSISTS OF HIMSELF, HIS WIFE A ND 2 CHILDREN WHO ARE STUDYING IN GOVT. SCHOOL IN CLASS VIII AND IX R ESPECTIVELY. HIS PERSONAL EXPENSES ARE APPROXIMATELY RS.4000 PER MON TH AS HE DOES NOT HAVE TO PAY HOUSE RENT, VEHICLE MAINTENANCE AND TELEPHONE EXPENSES. VIDE LETTER DATED 12.2.2008 OF THIS OFFICE, THE APP ELLANT WAS ASKED TO COMPLY AS UNDER :- IN RESPECT OF LOANS FROM ANAND KUMAR, ASHOK KUMAR & RAJESH KUMAR IT IS SEEN THAT BANK EXTRACT REFLECTING ONLY THE DEBIT OF LOAN TO THE APPELLANT HAS BEEN FURNISHED. BANK ACCOUNT EXTRACT FOR THE PERIOD PRI OR TO THE IMPUGNED LOAN SHOULD BE FURNISHED WITH EXPLANAT ION AS TO SOURCE OF FUNDS AND SUPPORTING EVIDENCE PRIOR TO THE DEBIT OF THE IMPUGNED LOAN IN RESPONSE TO THE ABOVE, VIDE LETTER DATED 4.3.200 8, THE APPELLANT FURNISHED THE SAVINGS BANK A/C STATEMENT OF THE LENDER WHICH IS AS UNDER :- 07.03.03 BY CASH 60,000 22.3.03 BY CASH 1,00,000 28.4.2003 TRANSFER CHQ. 00892226 1,00,000 ITA NO.518/AGR/2008 A.Y. 2004-05 . 9 THE APPELLANT REFERRED TO THE AFFIDAVIT FILED BEFOR E THE AO IN WHICH THE LENDER HAS STATED TO HAVE ADVANCED THE AM OUNT OUT OF HIS SAVINGS. THE APPELLANT ALSO POINTED OUT THAT THE L OAN WAS ADVANCED THROUGH A BANK DRAFT WHICH WAS ISSUED AFTER A PERIO D OF MORE THAN 1 MONTH AND THAT THIS IS NOT A CASE WHERE CASH IS DEP OSITED IMMEDIATELY PRIOR TO ADVANCE OF LOAN. VIDE WRITTEN SUBMISSIONS DATED 12.3.2008, THE APPEL LANT HAS FURTHER CONTENDED AS UNDER:- - INTEREST AMOUNTING TO RS.8,075 WAS PAID DURING TH E YEAR. TDS OF RS.888 WAS MADE THEREFROM - THE: CLOSING BALANCE OF RS.1,07,187/- WAS REPAID IN THE SUBSEQUENT YEAR ON 31.3.2005 ALONG WITH INTEREST OF RS.12,862/- FROM WHICH TDS OF RS.1,312/- WAS MADE. - THE CREDITOR IS NOT WILLING TO COOPERATE AS THE A PPELLANT DOES NOT HAVE ANY DEALINGS WITH THE SAID PERSON AT PRESENT. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE DOCUMENTS FURNISHED BY THE APPELLANT. AS EVIDENT F ROM THE ASSESSMENT ORDER, THE CREDITOR IS ASSESSED TO INCOME TAX. THE APPELLANT HAS CLAIMED TO HAVE PAID INTEREST TO THE SAID LENDER AN D DONE TDS THEREFROM FOR THE YEAR IN APPEAL AS WELL AS THE SUB SEQUENT YEAR. THE LOAN HAS BEEN RECEIVED BY DD AND REPAID BY CHEQUE. THE LENDER IS STATED TO BE A DEALER OF BUILDING MATERIALS. THUS, IT IS NOT ESTABLISHED THAT THE LENDER IS NON-EXISTENT OR THAT HE LACKS CR EDITWORTHINESS. IT IS ALSO NOT PROVED THAT THE BANK ACCOUNT DOES NOT BELO NG TO THE LENDER OR THAT THE APPELLANTS MONEY WAS ROUTED THROUGH THE S AID ACCOUNT. FOR THESE REASONS, THE ADDITION OF RS.1,00,000/- AS UNE XPLAINED CASH CREDIT IS NOT SUSTAINABLE AND HENCE DELETED. (V) SRI ASHOK KUMAR THE APPELLANT HAS SHOWN A LOAN OF RS.1,00,000/- FRO M ONE SRI ANAND KUMAR R/O. DIBIYAPUR. ON PERUSAL OF THE SAID CREDITOR'S RETURN, THE AO OBSERVED THAT HIS TOTAL RETURNED INC OME IS ONLY RS.73,500/-. HENCE, IT IS NOT CREDIBLE THAT A PERS ON WITH SUCH MEAGER ITA NO.518/AGR/2008 A.Y. 2004-05 . 10 INCOME WOULD GIVE A LOAN OF RS.1,00,000/- AND THAT TOO WITHOUT INTEREST. THE APPELLANT WAS ASKED TO FURNISH THE L ENDER'S RELEVANT BANK STATEMENT. ON PERUSAL OF THE BANK STATEMENT, T HE AO FOUND THAT ONLY THE DEBIT OF THE ALLEGED LOAN IS REFLECTED THE REIN AND THERE IS NO CREDIT ENTRY PRIOR TO THAT. NO DETAILS OF CREDIT EN TRY IN BANK ALE WERE FURNISHED EVEN THOUGH THE A.O. REPEATEDLY ASKED THE APPELLANT TO PROVE THE CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE LOAN TRANSACTION. HENCE, THE A.O. TREATED THE SAID LOAN AS UNEXPLAINED AND THE APPELLANT'S OWN UNACCOUNTED MONEY AND ACCOR DINGLY ADDED RS.1,00,000/- TO THE APPELLANTS INCOME. VIDE WRITTEN SUBMISSIONS DATED 7.2.2008, THE APPELL ANT HAS SUBMITTED THAT THE LENDER IS ABOUT 40 YEARS OLD AND DEALS IN BUILDING MATERIAL. HIS FAMILY CONSISTS OF HIS FATHER SRI RA M IQBAL SINGH, HIMSELF, HIS WIFE AND 2 SONS, STUDYING IN XTH AND X LLTH IN DIBIAPUR. HIS GROSS TOTAL INCOME IS RS.79,900/- AS PER RETURN FILED. HIS FATHER HAS AGRICULTURAL INCOME AND CONTRIBUTES BY WAY OF A GRICULTURAL PRODUCE. VIDE LETTER DATED 12.2.2008 OF THIS OFFICE, THE APP ELLANT WAS ASKED TO COMPLY AS UNDER:- IN RESPECT OF LOANS FROM ANAND KUMAR, ASHOK KUMAR & RAJESH KUMAR IT IS SEEN THAT BANK EXTRACT REFLECTING ONLY THE DEBIT OF LOAN TO THE APPELLANT HAS BEEN FURNISHED. BANK ACCOUNT EXTRACT FOR THE PERIOD PRI OR TO THE IMPUGNED LOAN SHOULD BE FURNISHED WITH EXPLANAT ION AS TO SOURCE OF FUNDS AND SUPPORTING EVIDENCE PRIOR TO THE DEBIT OF THE IMPUGNED LOAN IN RESPONSE TO THE ABOVE VIDE LETTER DATED 4.3.2008 , THE APPELLANT FURNISHED THE SAVINGS BANK A/C STATEMENT OF THE LENDER, WHICH REFLECTS AS UNDER:- MARCH 2003 BY CASH 50,000 22.3.2003 BY CASH 1,00,000 28.4.2003 (TRANSFER) 1,00,000 CH. NO.00891787 ITA NO.518/AGR/2008 A.Y. 2004-05 . 11 THE APPELLANT REFERRED TO THE AFFIDAVIT FILED BEFOR E THE AO IN WHICH THE LENDER HAS STATED TO HAVE ADVANCED THE AM OUNT OUT OF HIS SAVINGS. THE APPELLANT ALSO POINTED OUT THAT THE LO AN WAS ADVANCED THROUGH A BANK DRAFT WHICH WAS ISSUED AFTER A PERIO D OF MORE THAN 1 MONTH AND THAT THIS IS NOT A CASE WHERE CASH IS DEP OSITED IMMEDIATELY PRIOR TO ADVANCE OF LOAN. VIDE WRITTEN SUBMISSIONS DATED 12.3.2008, THE APPEL LANT HAS FURTHER CONTENDED AS UNDER:- - INTEREST AMOUNTING TO RS.8,075 WAS PAID DURING T HE YEAR. TDS OF RS.888 WAS MADE THEREFROM. - THE CLOSING BALANCE OF RS.1,07,187/- WAS REPAID I N THE SUBSEQUENT YEAR ON 31.3.2005 ALONG WITH INTEREST OF RS.12,862/- FROM WHICH TDS OF RS.1,312/- WAS MADE. - THE CREDITOR IS NOT WILLING TO COOPERATE AS THE A PPELLANT DOE NOT HAVE ANY DEALINGS WITH THE SAID PERSON AT PRESENT. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE DOCUMENTS FURNISHED BY THE APPELLANT. AS EVIDENT FR OM THE ASSESSMENT ORDER, THE CREDITOR IS ASSESSED TO INCOME TAX. THE APPELLANT HAS CLAIMED TO HAVE PAID INTEREST TO THE SAID LENDER AN D DONE TDS THEREFROM FOR THE YEAR IN APPEAL AS WELL AS THE SUB SEQUENT YEAR. THE LOAN HAS BEEN RECEIVED BY DD AND REPAID BY CHEQUE. THE LENDER IS STATED TO BE A DEALER OF BUILDING MATERIALS. THUS, IT IS NOT ESTABLISHED THAT THE LENDER IS NON-EXISTENT OR THAT HE LACKS CR EDITWORTHINESS. IT IS ALSO NOT PROVED THAT THE BANK ACCOUNT DOES NOT BELO NG TO THE LENDER OR THAT THE APPELLANT'S MONEY WAS ROUTED THROUGH THE S AID ACCOUNT. FOR THESE REASONS, THE ADDITION OF RS.1,00,000/- AS UNE XPLAINED CASH CREDIT IN THE ASSESSMENT ORDER IS NOT SUSTAINABLE A ND HENCE DELETED. (VI) M/S R.G. FINLEASE (P) LTD. ETAWAH RS.20,00,0 00./- IN THE ASSESSMENT ORDER, THE AO HAS STATED THAT THE APPELLANT HAS TAKEN LOAN OF RS.20,00,000/- FROM THE ABOVE CON CERN. RETURN OF THE SAID LENDER HAS BEEN FILED SHOWING INCOME OF RS .6,060/- ONLY. HENCE, THE AO OBSERVED THAT THE CREDITWORTHINESS OF THE LENDER IS ITA NO.518/AGR/2008 A.Y. 2004-05 . 12 DOUBTFUL. THE AO ALSO OBSERVED THAT IN THE BANK A/ E OF THE LENDER, THERE IS A CREDIT ENTRY OF RS.20,00,000/- ON 6.11.2 003, PRIOR TO THE IMPUGNED LOAN OF LIKE AMOUNT TO THE APPELLANT ON 12 .11.2003. HENCE, THE AO HELD THE LOAN TO BE FICTITIOUS AND THE APPEL LANTS OWN UNACCOUNTED MONEY. VIDE WRITTEN SUBMISSIONS FILED ON 8.2.2008 THE APPE LLANT STATED THAT THE ABOVE NAMED LENDER HAD A FDR NO.000177 BAN K OF INDIA FOR RS.29,14,262 (MATURITY VALUE ON 4.10.2003) WHICH WA S DEPOSITED IN ITS A/C ON 6.11.2003 ON MATURITY. THE BANK CREDIT ED THE TOTAL SUM OF RS.9,18,733/- I.E. RS.9,14,262/- INTEREST + RS.4,47 1/- INTEREST FOR BROKEN PERIOD. THE COPY OF THE FDR AND THE CERTIFIC ATE OF BANK OF INDIA FOR DEPOSIT OF THE MATURED FDR HAVE BEEN FURN ISHED. IT IS STATED BY THE APPELLANT THAT THE CHEQUE DEPOSITED IN THE C OMPANYS BANK A/C. WAS PRODUCED BEFORE THE AO. IT IS CLAIMED BY THE AP PELLANT THAT THE IDENTITY AND CREDITWORTHINESS OF THE LENDER AND THE GENUINENESS OF THE TRANSACTION HAS BEEN DULY ESTABLISHED WITH SUPPORTI NG DOCUMENTARY EVIDENCE. HENCE, THE ADDITION OF RS.20,00,000/- DES ERVES TO BE DELETED. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND TH AT THE AO HAS PERUSED THE BANK STATEMENT OF THE APPELLANT AND NOT ED THE DEPOSIT OF RS.20,00,000/- THEREIN. HOWEVER, SHE HAS NOT QUEST IONED THE APPELLANT IN THAT REGARD NOR HAS SHE CARRIED OUT AN Y INDEPENDENT VERIFICATION AS TO THE SOURCE OF THE SAID DEPOSIT. HENCE, THE IMPUGNED 1OAN OF RS.20,00,000/- IS TREATED AS EXPLAINED AS T O ITS NATURE AND SOURCE. ACCORDINGLY, THE ADDITION OF RS.20,00,000/- IS HEREBY DELETED. OTHER LOANS (A) SRI MAHENDRA PRATAP SINGH RS.1,39,249/-. THE AO HAS ADDED THIS LOAN STATING THAT NO INFORMATION WAS GIVEN BY THE APPELLANT TO ESTABLISH ITS GENUINENESS. IN THE WRITTEN SUBMISSIONS FILED IN THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS STATED THAT THE REAL NAME OF THE SAID PERSON IS JITENDRA PRATAP SINGH. THE AO HAS WRONGLY WRITTEN IT AS MAHENDRA PRATAP SINGH. HE ADVANCED A SUM OF RS.1,3 9,249/- BY DRAFT OUT OF HIS SAVINGS OUT OF AGRICULTURAL INCOME . THE LENDER IS AN INCOME TAX ASSESSEE. HIS PAN IS ANSPS 8070M. THE D O WAS GIVEN ITA NO.518/AGR/2008 A.Y. 2004-05 . 13 BY THE LENDER IN FAVOUR OF A CAR VENDOR FOR PURCHAS E OF A TATA SAFARI JEEP AND THAT HE IS NOT PREPARED TO DIVULGE THE SOU RCES OF THE FUNDS. IN VIEW OF THE VAGUE EXPLANATION GIVEN BY THE APPEL LANT, THE ADDITION OF RS.1,39,249/- IS HEREBY CONFIRMED. (B) SRI K.K. DUBEY RS.60,000/- THE AO HAS ADDED THIS LOAN STATING THAT NO INFORMAT ION WAS GIVEN BY THE APPELLANT TO ESTABLISH ITS GENUINENESS . IN THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLA NT STATED THAT SRI K.K. DUBEY IS AN EMPLOYEE OF STATE BANK OF INDI A, MAHEWA WHO HAS GIVEN LOANS BY DRAFTS AS UNDER:- . 22.1.2004 RS.20,000/- 22.1.2004 RS.40,000/- RS.60,000/- A CONFIRMATION LETTER TO SUCH EFFECT HAS BEEN FILED . ON PERUSAL OF THE ASSESSMENT RECORDS, IT IS SEEN THAT VIDE LET TER DATED 13.12.2006, THE APPELLANT HAS SUBMITTED THE ABOVE FACTS BEFORE THE AO AND FURNISHED THE CONFIRMATION OF THE CREDITOR. THE AP PELLANT ALSO REQUESTED THE AO IN PARA 12 OF THE SAID LETTER TO C ALL THE DEPOSITORS TO APPEAR IN PERSON AND GIVE THEIR CLARIFICATION. HOW EVER, THE AO HAS NOT MADE ANY ENQUIRIES THEREAFTER AND MERELY TREATE D THE LOAN AS UNEXPLAINED. VIDE WRITTEN SUBMISSIONS DATED 12.3.20 08 THE APPELLANT HAS STATED THAT INTEREST OF RS.7,200/- WAS PAID AFT ER DOING TDS OF RS.734/- WHICH WAS DEPOSITED IN APRIL 2005. CONSID ERING THE ABOVE FACTS AND CIRCUMSTANCES, THE LOAN CANNOT BE TREATED AS UNEXPLAINED SINCE FALSITY IN THE DEPOSITOR'S CLAIM HAS NOT BEEN ESTABLISHED. ACCORDINGLY, THE ADDITION OF RS.60,000/- IS HEREBY DELETED. (C) LALLOO PRASAD GUPTA RS.2,00,000/- THE AO HAS ADDED THIS LOAN STATING THAT NO INFORMAT ION WAS GIVEN BY THE APPELLANT TO ESTABLISH ITS GENUINENESS . THE APPELLANT HAS STATED THAT THE LOAN WAS GIVEN BY THE ABOVE LENDER BY DRAFT DATED 12.2.2004. THE LENDER EXPIRED ON 29.1.2005 FOR ITA NO.518/AGR/2008 A.Y. 2004-05 . 14 WHICH DEATH CERTIFICATE HAS BEEN FURNISHED AS PROOF . THE LENDERS SON SHRI ASHOK KUMAR HAS GIVEN AN AFFIDAVIT DATED 6.11. 2006 THAT HIS FATHER HAD GIVEN THE SAID LOAN TO THE APPELLANT WHI CH HAS BEEN TRANSFERRED IN HIS NAME AS HIS FATHER HAS EXPIRED. ON PERUSAL OF THE ASSESSMENT RECORDS, IT IS SEEN TH AT VIDE PARA 7 LETTER DATED 13.12.2006, THE APPELLANT HAD FURNISHE D BEFORE THE AO THE ABOVE EXPLANATION ALONG WITH THE ABOVE MENTIONED DO CUMENTS I.E. DEATH CERTIFICATE AND AFFIDAVIT. THE APPELLANT ALSO REQUESTED THE AO IN PARA 12 OF THE SAID LETTER TO CALL THE DEPOSITORS T O APPEAR IN PERSON AND GIVE THEIR CLARIFICATION. HOWEVER, THE AO HAS NOT BROUGHT ANY MATERIAL EVIDENCE ON RECORD TO CONTROVERT THE STATE MENT OF THE DEPOSITORS SON. HENCE, THE LOAN OF RS.2,00,000/- CANNOT BE TREATED AS UNEXPLAINED. CONSEQUENTLY, THE ADDITION OF RS.2 ,00,000/- IS HEREBY DELETED. (D) M/S MISHRA ARMS - RS.2,00,000/- THE AO HAS ADDED THIS LOAN STATING THAT NO INFORMAT ION WAS GIVEN BY THE APPELLANT TO ESTABLISH ITS GENUINENESS . BEFORE THE AO VIDE PARA 8 OF LETTER DATED 13.12.200 6, THE APPELLANT STATED THAT THE PROPRIETOR OF SAID CONCER N HAS ADVANCED A LOAN OF RS.2,00,000/- OUT OF HIS BANK A/C VIDE CHEQ UE NO. 959920 DATED 27.3.2004 OFT STATE BANK OF INDIA, AURAIYA. AN AFFI DAVIT HAS BEEN GIVEN BY THE SAID CREDITOR AFFIRMING THAT THE LOAN WAS ADVANCED OUT OF THEIR OWN FUNDS IN THE BANK. IN THE WRITTEN SUBMISSIONS FILED ON 8.2.08 AND 4.3. 2008, THE APPELLANT HAS GIVEN DETAILED EXPLANATION, WITH REGA RD TO THE LOAN STATING AS UNDER:- - THE CREDITOR HAS JOINT A/C NO.10093 WITH HIS WIFE IN ALLAHABAD BANK, AURAIYA IN WHICH HE DEPOSITED LOAN OF RS.1,35 ,000/- ON 26.3.2004 RECEIVED FROM THE SAID BANK. HE WITHDREW RS.49,000/- ON 25.3.2004 AND RS.1.20,000/- ON 27.3. 2004 FROM THE SAID BANK AND DEPOSITED THE SAID AMOUNTS ALONG WITH SAVINGS OF RS.31,000/- (2,00,000 1,69,000) IN HIS A/C OF MISHRA ARMS IN STATE BANK OF INDIA AURAIYA AND GAVE A DRAFT OF RS.2,00,000/- ON 27.3.2004 TO THE APPELLANT. PHOTO COPIES OF ITA NO.518/AGR/2008 A.Y. 2004-05 . 15 CERTIFICATE OF LOAN OF RS.1,35,000/- TO THE APPELLA NT BY ALLAHABAD BANK, STATEMENT OF SAVINGS BANK A/C NO.10 093 IN ALLAHABAD BANK AND PHOTOCOPY OF RELEVANT STATEMENT OF A/C IN SBI, AURAIYA HAVE BEEN FILED. AS REGARDS SAVINGS O F RS.31,000/-, THE APPELLANT HAS FILED PHOTOCOPY OF S AVINGS A/C PASS BOOK A/C NO.01190018058 IN SBI AURAIYA OF SMT. MUNNI DEVI MISHRA, MOTHER OF THE DEPOSITOR, FROM WHICH TH E APPELLANT HAS BEEN UTILIZING FUNDS AVAILABLE. SMT. MUNNI DEV I MISHRA HAS GIVEN A DECLARATION ON 22.1.2008, STATING THAT SHE WAS EMPLOYED AS A TEACHER IN JUNIOR HIGH SCHOOL JAMUHI, DIBIYAPUR AND RECEIVED PENSION OF RS4,000/- PER MON TH WHICH IS DEPOSITED IN HER ABOVE SAVINGS BANK A/C JOINTLY HELD BY HER WITH HER SON SHRI AJIT MISHRA, PROP. OF MISHRA ARMS . SHE HAS AUTHORIZED HER SON TO WITHDRAW MONEY THEREFROM AS R EQUIRED AND UTILIZE THE SAME. IN VIEW OF THE FOREGOING, THE LOAN OF RS.2,00,000/- IS TREATED AS EXPLAINED AND THE ADDITION IS ACCORDINGLY DELETED. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE REVENUE AUTHORIT IES. REGARDING THE LOAN OF RS.2,50,000/- FROM M/S. SHARDA TRADERS, WE NOTICE THAT THE LOAN OF RS.2,50,000/- WAS TAKEN VIDE D.D. NO.0061600 DATED 23.09.2003. T HE PARTY SHRI RAJ KUMAR CHAUHAN, PROPRIETOR OF M/S SHARDA TRADERS WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER FOR EXAMINATION. HOWEVER, AN AFF IDAVIT DATED 29.03.2004 HAS BEEN FILED. THE LOAN WAS REPAID BEFORE EXPIRY OF T HE ACCOUNTING YEAR. THE ACCOUNT WAS SQUARED UP BY AMOUNT OF LOAN AS WELL AS SOME BI LLS OF RS.10,069/-. THE ASSESSEE HAS FURNISHED AFFIDAVIT OF SHRI R.K. CHAUH AN, PROPRIETOR OF M/S. SHARDA TRADERS AND A CONFIRMATION OF THE LOAN. FROM THE C ONFIRMATION AND AFFIDAVIT, IT IS ITA NO.518/AGR/2008 A.Y. 2004-05 . 16 NOT ESTABLISHED THAT THE ASSESSEE HAS SUBMITTED SUF FICIENT MATERIAL IN SUPPORT OF CREDITWORTHINESS OF THE CREDITOR. IN THE AFFIDAVIT SIMPLY THE FACT HAS BEEN NARRATED AND IT HAS NOT BEEN POINTED OUT NEITHER IN THE AFFI DAVIT NOR IN THE CONFIRMATION ABOUT THE CREDITWORTHINESS OF THE CREDITOR. THERE IS OVE RWRITING & CORRECTIONS IN THE D.D. NUMBER ALSO IN THE AFFIDAVIT AS WELL AS CONFIRMATIO N. THE CIT (A) DELETED THE ADDITION MERELY ON THE BASIS OF IDENTITY OF THE CRE DITOR. THE CIT(A) SHIFTED THE BURDEN ON THE ASSESSING OFFICER THAT HE DID NOT MAK E ENQUIRY FROM THE BANK THROUGH WHICH THE D.D. HAS BEEN OBTAINED BY M/S. SH ARDA TRADERS TO DISPROVE THE EXISTENCE AND CREDIT WORTHINESS OF THE CREDITOR. B UT WE FIND THAT THE ASSESSEE HAS FAILED TO DISCHARGE BURDEN CASTED IN RESPECT OF SEC TION 68 OF THE ACT REGARDING CREDITWORTHINESS OF CREDITOR. IN THIS CASE, THE CRE DITOR WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. NEITHER COPY OF BANK ACCOUNT HA S BEEN FURNISHED NOR WAS IT AVAILABLE ON RECORD. THEREFORE, WE SET ASIDE THE O RDER OF CIT(A) ON THIS ISSUE AND RESTORE THAT OF ASSESSING OFFICER CONFIRMING THE AD DITION OF RS.2,50,000/- 6. AS REGARDS THE LOAN FROM S/SHRI ANAND KUMAR, ASH OK KUMAR AND RAJESH KUMAR EACH HAS GIVEN LOANS OF RS.1,00,000/-. ON PE RUSAL OF RELEVANT MATERIALS, WE NOTICED THAT SHRI ANAND KUMAR, AGED 45 YEARS, IS DO ING BUSINESS OF BUILDING MATERIAL. HE IS AN INCOME TAX ASSESSEE. HIS FATHE R IS AN AGRICULTURIST HAVING HIS OWN AGRICULTURAL INCOME. SHRI ANAND KUMAR HAS SHOW N GROSS TOTAL INCOME OF ITA NO.518/AGR/2008 A.Y. 2004-05 . 17 RS.88,900/- AS PER RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05. THE LOAN WAS GIVEN THROUGH CHEQUES. 7. SIMILARLY, SHRI ASHOK KUMAR, AGED 40 YEARS IS AL SO A TRADER DEALING IN BUILDING MATERIAL. HIS FATHER IS ALSO AN AGRICULTU RIST. HE IS ALSO FILING INCOME TAX RETURN DECLARING GROSS TOTAL INCOME OF RS.79,900/-. SHRI ANAND KUMAR, BEFORE ISSUING CHEQUE TO THE ASSESSEE OF RS.1,00,000/-, HA S DEPOSITED CASH IN HIS BANK ACCOUNT DATED 22.03.2003. SHRI ASHOK KUMAR HAS ALS O DEPOSITED CASH IN HIS BANK ACCOUNT ON 22.03.2003 BEFORE ISSUING CHEQUE. AFFID AVITS AND CONFIRMATIONS OF BOTH THE PARTIES HAVE BEEN FILED. SHRI RAJESH KUMA R, AGED 42 YEARS IS A TEACHER IN COLLEGE. HIS FATHER IS ALSO AGRICULTURIST. HE HAS SHOWN GROSS TOTAL INCOME OF RS.78,687/- IN HIS RETURN OF INCOME. IT HAS BEEN N OTICED THAT THE AMOUNTS OF ADVANCES OF RS.1,00,000/- EACH BY SHRI ANAND KUMAR, ASHOK KUMAR AND RAJESH KUMAR HAD BEEN STATED TO BE GIVEN ON 28.04.2003 BY WAY OF ACCOUNT PAYEE CHEQUES WHICH WERE DEPOSITED IN ASSESSEES BANK ACC OUNT AND CREDITED ON THE SAME DAY ITSELF AS THE ACCOUNT OF THE LOANER AND LOANEE/ ASSESSEE WAS IN THE SAME BRANCH OF STATE BANK OF INDIA. THE ASSESSEE COMPANY HAS D EPOSITED ALL THE CHEQUES BY SINGLE PAY-IN-SLIP. THEREFORE, A TOTAL AMOUNT OF R S.3,00,000/- HAS BEEN CREDITED IN ASSESSEES BANK ACCOUNT ON 28.04.2003. A COPY OF B ANK ACCOUNT FILED BY THE ASSESSEE HAS BEEN PLACED AT PAGE NO 105 OF THE PAPE R BOOK. ON PERUSAL OF THE SAID ITA NO.518/AGR/2008 A.Y. 2004-05 . 18 BANK STATEMENT, WE NOTICED THAT THERE IS A SINGLE E NTRY OF RS.3,00,000/- DATED 28.04.2003 UNDER THE HEAD TRANSFER. THE BANK DID NOT BIFURCATE ALL THE THREE CHEQUES SEPARATELY WHILE CREDITING THE AMOUNT IN AS SESSEES BANK ACCOUNT. AS PER THE PROCEDURE OF BANK ,NORMALLY THE BANK IS SUPPOS ED TO PASS SEPARATE ENTRIES FOR EACH CHEQUE ON TRANSFER. IT WAS EXPLAINED BY THE A SSESSEE THAT THESE RS.3,00,000/- INCLUDES THE AMOUNTS OF LOAN RECEIVED FROM S/SHRI A SHOK KUMAR, ANAND KUMAR & RAJESH KUMAR BUT RELEVANT PAY-IN-SLIP AND OTHER M ATERIALS HAVE NOT BEEN FILED. RAJESH KUMAR HAS ALSO DEPOSITED CASH OF RS.1,00,000 /- IN HIS BANK ACCOUNT DATED 22.03.2003 BEFORE ISSUING CHEQUE TO THE ASSESSEE. 8. ON PERUSAL OF RELEVANT MATERIALS IN RESPECT OF S /SHRI ANAND KUMAR, ASHOK KUMAR AND RAJESH KUMAR, WE NOTICE THAT THOUGH THE A SSESSEE HAS TRIED TO ESTABLISH ALL THE INGREDIENTS WHICH REQUIRED UNDER SECTION 68 OF THE ACT I.E. IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION BY FI LING AFFIDAVIT, CONFIRMATION AND POINTING OUT THAT THEY ARE ASSESSED TO TAX, BUT IT IS RELEVANT TO STATE THAT LAW OF EVIDENCE MANDATES THAT IF THE BEST EVIDENCE IS NOT PLACED BEFORE THE COURT, AN ADVERSE INFERENCE CAM BE DRAWN AS HELD BY THE HONB LE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. KRISHNAVENI AMMAL, 158 ITR 826 (MADRAS). IN THE SAID CASE THERE WERE CROSSED CHEQUES BUT THEY WERE NOT PRODUC ED BEFORE THE COURT. IN THE CASE UNDER CONSIDERATION, THE CONTENTION OF THE ASS ESSEE THAT THE AMOUNT OF ITA NO.518/AGR/2008 A.Y. 2004-05 . 19 RS.3,00,000/- CREDITED IN THE BANK ACCOUNT REPRESE NTS LOANS FROM THESE THREE PARTIES AND THE ASSESSEE HAS DEPOSITED THESE CHEQUE S BY A SINGLE PAY-IN-SLIP, BUT THE SAID PAY-IN-SLIP HAS NOT BEEN PRODUCED NOR THE SAME IS AVAILABLE ON RECORD. AS REGARDS THE AFFIDAVIT AND CONFIRMATIONS FILED BY TH E ASSESSEE, WE MAY REFER A JUDGEMENT OF APEX COURT IN THE CASE OF CIT VS. DUR GA PRASAD MORE, 82 ITR 540 WHEREIN IT HAS BEEN HELD THAT IT IS TRUE THAT THE A PPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT REAL. THE COURT FURTHER OBSERVED THAT IN SUCH CASES THE PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS, OTHER WISE IT WILL BE VERY EASY TO MAKE SELF- SERVING STATEMENTS IN DOCUMENTS EITHER EXECUT ED OR TAKEN BY A PARTY AND RELY ON THOSE RECITALS. FURTHER IF ALL THAT AN ASSESSEE WHO WANTS TO EVADE TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. THE TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DO CUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIR CUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. A S CITED ABOVE AND ON PERUSAL OF RECORDS, WE NOTICE THAT THE ASSESSEE IN RESPECT OF ALL THE THREE PARTIES DID NOT FURNISH SUFFICIENT MATERIAL TO SHOW CREDITWORTHINESS AND GE NUINENESS OF THEIR TRANSACTIONS. THE COPY OF AFFIDAVITS AND CONFIRMATIONS DO NOT HEL P IN THE LIGHT OF THE LAW LAID DOWN BY THE APEX COURT IN THE CASE OF DURGA PRASAD MORE (SUPRA). ITA NO.518/AGR/2008 A.Y. 2004-05 . 20 9. IN ALL THE THREE CASES CASH WERE DEPOSITED I N BANK ACCOUNT BEFORE ISSUING CHEQUE & D.D. TO THE ASSESSEE. THE I.T.A.T., AGRA BENCH IN THE CASE OF SMT. SUMAN GUPTA, ITA NO. 454/AGRA/2009, ASST. YEAR 2007 -08, ORDER DATED 16.03.2012 ON IDENTICAL SET OF FACTS DECIDED THE I SSUE AS UNDER:- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THER E WERE CASH DEPOSITS OF THE EQUIVALENT AMOUNTS IN THE BANK ACCOUNTS OF T HE CREDITORS JUST BEFORE ADVANCING LOAN TO THE ASSESSEE OR ON THE DAT E OF ISSUING CHEQUES TO THE ASSESSEE. IN THE CASE OF THE CREDITO R, SHRI RAMPAL SINGH, HIS BANK STATEMENT IS FILED AT PAGE 45 OF TH E PAPER BOOK, IN WHICH RS.2,50,000/- HAS BEEN DEPOSITED, BUT NEITHER IT IS MENTIONED THAT IT WAS CASH NOR IT IS MENTIONED HOW THE AMOUNT SIMILAR TO THE CREDIT WAS CREDITED IN HIS BANK ACCOUNT. NO EXPLANA TION IS GIVEN BEFORE THE AUTHORITIES BELOW AND EVEN DURING THE CO URSE OF ARGUMENTS BEFORE US. NOTHING IS CLARIFIED AS TO HOW EQUIVALEN T AMOUNT OF CASH CREDIT WAS DEPOSITED IN HIS BANK ACCOUNT. IN THE CA SE OF REMAINING CREDITORS, IT IS NOT A DENYING FACT THAT EQUIVALENT AMOUNTS OF CASH CREDIT WAS DEPOSITED IN THEIR BANK ACCOUNTS IN CASH FOR ISSUING CHEQUES IN FAVOUR OF THE ASSESSEE. THIS CREATED SER IOUS DOUBT IN THE EXPLANATION OF THE ASSESSEE REGARDING GENUINENESS O F THE TRANSACTION IN THE MATTER. THE AO ASKED THE ASSESSEE TO PRODUCE ALL THE CREDITORS FOR EXAMINATION ON OATH IN ORDER TO FIND OUT TRUTH IN THE MATTER. THE ASSESSEE PRODUCED ONE OF THE CREDITORS BEFORE THE A O FOR EXAMINATION, BUT SHOWED HIS INABILITY TO PRODUCE OTHER CREDITORS , WHICH IS ALSO CLEAR FROM THE ORDER SHEET DATED 18.12.2007 (PB-126 ). PRIOR TO THAT, THE ASSESSEE SOUGHT TIME FROM THE AO TO PRODUCE REM AINING CREDITORS FOR EXAMINATION, BUT LATER ON DID NOT PRODUCE THEM. THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THAT DUE TO ONE OR OTHER PROBLEM OF THE REMAINING CREDITORS ON ACCOUNT OF MEDICAL ADVICE, T HE DEPOSITORS HAVE SHOWN THEIR INABILITY TO APPEAR BEFORE THE AO FOR E XAMINATION, BUT IT IS ADMITTED FACT THAT THE ASSESSEE DID NOT MAKE ANY REQUEST BEFORE THE AO FOR EXAMINATION OF THE REMAINING CREDITORS THROU GH THE COMMISSION AND NO WILLINGNESS WAS SHOWN BEFORE THE CIT(A) FOR PRODUCTION OF THE REMAINING CREDITORS FOR EXAMINATI ON EVEN AT THE REMAND STAGE IN THE APPELLATE PROCEEDINGS. EVEN DUR ING THE COURSE OF ARGUMENTS BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE DID NOT ITA NO.518/AGR/2008 A.Y. 2004-05 . 21 SHOW HIS WILLINGNESS TO PRODUCE REMAINING CREDITORS FOR EXAMINATION BEFORE THE AO. IT IS, THEREFORE, CLEAR THAT THE ASS ESSEE HAS FAILED TO PRODUCE THE REMAINING CREDITORS FOR EXAMINATION BY THE REVENUE DEPARTMENT IN ORDER TO FIND OUT TRUTH IN THE MATTER . 9.1 THE AO DISCUSSED EACH AND EVERY CREDITOR IN THE ASSESSMENT ORDER AND THE CRUX OF THE FINDINGS OF THE AO HAD BE EN THAT THERE WERE VERY SMALL BANK BALANCES IN THE BANK ACCOUNTS OF TH E CREDITORS AND THEY WERE HAVING MEAGER INCOME AND AS SUCH, THEY WE RE NOT MEN OF MEANS TO ADVANCE ANY LOAN TO THE ASSESSEE. IN THE C ASE OF ABHAY MAHESHWARI, THERE WAS VERY SMALL BALANCE OF RS.3528 /- IN HIS BANK ACCOUNT. HE WAS EXAMINED ON OATH AND HE WAS NOT ABL E TO GIVE SOURCE OF CASH DEPOSIT TO THE SATISFACTION OF THE AO. HE W AS EARNING HARDLY ONE LAC RUPEES AND SPENT 40,000/- TO 50,000/- FOR H OUSEHOLD PURPOSES. DURING HIS EXAMINATION ON OATH, HE WAS NOT ABLE TO SATISFACTORILY EXPLAIN THE AVAILABILITY OF FUNDS WITH HIM FOR GIVI NG LOAN TO THE ASSESSEE. IN HIS CASE, HE HAS FILED RETURN OF INCOM E FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.1,02,850/- (PB-60). IN THE CASE OF SHRI AMIT MAHESHWARI, HE WAS ALSO HAVING SMALL BANK BALANCE O F RS.2429/- BEFORE ISSUE OF CHEQUE TO THE ASSESSEE AND EQUAL AM OUNT OF THE CASH CREDIT WAS DEPOSITED IN THE BANK ACCOUNT. HE HAS FI LED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.4 4972/- (PB-71). IN THE CASE OF SMT. KEERTI MAHESHWARI, IN HER BANK ACCOUNT, THERE WAS BALANCE OF RS.4688/- ONLY PRIOR TO ISSUE OF CHEQUE TO THE ASSESSEE AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED FOR THE PURPOSE OF ISSUE OF CHEQUE IN FAVOUR OF THE ASSESSEE. FOR THE ASSESSMENT YEAR UNDER APPEAL, SHE HAS FILED RETURN OF INCOME AT RS. 1,01,000/- ONLY. IN THE CASE OF SMT. MITHLESH MAHESHWARI, THE BANK BALA NCE BEFORE ISSUE OF CHEQUE WAS RS.10,794/- AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED IN HER BANK ACCOUNT FOR ISSUE OF CHEQUE I N FAVOUR OF ASSESSEE. FOR ASSESSMENT YEAR UNDER APPEAL, SHE FIL ED RETURN OF INCOME AT RS.1,02,476/- ONLY. IN THE CASE OF SH. RA MPAL SING, IT IS ALREADY NOTED ABOVE THAT THE DEPOSIT ENTRY IN HIS C ASE IS NOT EXPLAINED AND PRIOR TO ISSUE OF CHEQUE, THERE WAS BANK BALANC E OF RS.3708/- ONLY. HE HAS FILED THE RETURN OF INCOME FOR THE ASS ESSMENT YEAR UNDER APPEAL AT LOSS WITH AGRICULTURAL INCOME (PB-102). I N THE CASE OF SHRI SHARIQ ALI KHAN, THE BANK BALANCE IS HIS ACCOUNT WA S RS.1055/- PRIOR TO ISSUE OF CHEQUE AND EQUIVALENT CASH AMOUNT WAS D EPOSITED FOR ISSUING CHEQUE IN FAVOUR OF THE ASSESSEE. HE HAS FI LED RETURN OF INCOME AT RS.70,373/- PLUS AGRICULTURAL INCOME (PB-116). T HESE DETAILS NOTED ITA NO.518/AGR/2008 A.Y. 2004-05 . 22 IN THE ASSESSMENT ORDER AND THE DETAILS VERIFIED FR OM THE PAPER BOOK WOULD CLEARLY SUPPORT THE FINDINGS OF THE AO THAT N ONE OF THE CREDITORS WERE PERSONS OF SUFFICIENT MEANS TO ADVANCE ANY LOA N TO THE ASSESSEE. FILING OF BALANCE SHEETS, CASH FLOW STATEMENTS, CAS H BOOKS ETC. HAVE NO EVIDENTIARY VALUE BECAUSE ACCORDING TO THE REMAN D REPORT FILED BY THE AO, THOSE DOCUMENTS WERE NOT FILED WITH THE RET URN OF INCOME. MOREOVER, NO REGULAR BOOKS OF ACCOUNT HAVE BEEN MAI NTAINED BY ANY OF THE CREDITORS AND MAJORITY OF THEM HAVE SHOWN ES TIMATED INCOME IN THEIR RETURNS OF INCOME. THEREFORE, SUCH BALANCE SH EET, CASH FLOW STATEMENTS ETC. WOULD NOT SUPPORT THE CONTENTION OF THE ASSESSEE THAT GENUINE CREDITS HAVE BEEN RECEIVED. THE ORDER SHEET NOTED BY THE AO WOULD ALSO SHOW THAT THE ASSESSEE HAS MADE NO EFFOR TS TO PRODUCE THE REMAINING CREDITORS BEFORE THE AO. EVEN IN THE STAT EMENT OF ONE OF THE CREDITORS RECORDED BY THE AO, SHRI AMBHAY MAHESHWAR I, HE WAS NOT ABLE TO EXPLAIN HIS SOURCE OF DEPOSIT OR ADVANCING LOAN TO THE ASSESSEE THROUGH GENUINE SOURCE. IT IS WELL SETTLED LAW THAT BURDEN IS UPON THE ASSESSEE TO PROVE INGREDIENTS OF SECTION 68 OF THE ACT BY PROVING IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS, HOWEVER, FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVING O NLY MEAGER INCOME. NO DETAILS OF THEIR SAVINGS HAVE BEEN FILED . THE ASSESSEE HAS NEVER SHOWN HIS WILLINGNESS TO PRODUCE THE REMAININ G CREDITORS FOR EXAMINATION BEFORE THE AO. THEREFORE, THE GENUINENE SS OF THE TRANSACTION COULD NOT HAVE BEEN EXAMINED BY THE AO. THE SMALLNESS OF THE BANK BALANCE IN THE BANK ACCOUNTS OF THE CRE DITORS PRIOR TO ISSUE OF CHEQUES WOULD CLEARLY REVEAL THAT THEY WER E NOT HAVING ANY SOURCE AND IT WAS THE MONEY OF THE ASSESSEE WHICH W AS ROUTED THROUGH THE BANK ACCOUNTS OF THE CREDITORS FOR THE PURPOSE OF GIVING CREDITS TO THE ASSESSEE. THESE WERE, THEREFORE, ACCOMMODATION ENTRIES ONLY AND AS SUCH, COULD NOT BE CONSIDERED AS GENUINE TRANSAC TIONS. MERELY BECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKIN G CHANNEL, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GEN UINE TRANSACTION. 10. HONBLE CALCUTTA HIGH COURT IN THE CASE OF BHAR ATI PVT. LTD. VS. CIT, 111 ITR 951 HELD AS UNDER : IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE INCOM E-TAX OFFICER FOUND THAT THE ASSESSEE HAD SHOWN RS.20,000 AS LOAN IN ITS BOOKS TAKEN FROM TWO PARTIES. THE ASSESSEE PROD UCED THE ALLEGED CONFIRMATORY LETTERS FROM THOSE PARTIES BEF ORE THE ITA NO.518/AGR/2008 A.Y. 2004-05 . 23 INCOME-TAX OFFICER IN SUPPORT OF THE TWO LOANS. THE INCOME-TAX OFFICER SERVED NOTICES UNDER SECTION 131 OF THE INC OME TAX ACT, 1961, ON THE ALLEGED CREDITORS AND SINCE THOSE NOTI CES CAME BACK UNSERVED, THE INCOME-TAX OFFICER TREATED THE L OAN AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES. THE APP ELLATE ASSISTANT COMMISSIONER DISMISSED THE ASSESSEES APP EAL ON THE GROUND THAT THE ASSESSEE COULD NOT EVEN ESTABLISH T HE IDENTITY OF THE PARTIES. ON FURTHER APPEAL BY THE ASSESSEE, THE APPELLATE TRIBUNAL HELD THAT MERE FILING OF CONFIRMATORY LETT ERS DID NOT DISCHARGE THE ONUS THAT LAY ON THE ASSESSEE AND THE RE WAS NO MATERIAL ON THE RECORD TO ESTABLISH THE IDENTITY OF THE CREDITORS: HELD, THAT THE TRIBUNAL HAD TAKEN ALL THE RELEVANT FACTS INTO CONSIDERATION AND THE CONCLUSION ARRIVED AT BY THE TRIBUNAL THAT THE LOANS REPRESENTED THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES WAS NOT PERVERSE OR UNREASONABL E. 10.1 THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS UNITED COMMERCIAL AND INDUSTRIAL CO. (P) LTD., 187 ITR 596 HELD AS UNDER: THE PRIMARY ONUS LIES ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF CREDITS IN ITS ACCOUNT. IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE IDENTITY OF H IS CREDITORS, THE CAPACITY OF SUCH CREDITORS TO ADVANCE THE MONEY AND LASTLY THE GENUINENESS OF THE TRANSACTIONS. ONLY WHEN THES E THINGS ARE PROVED BY THE ASSESSEE PRIMA FACIE AND ONLY AFTER T HE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH THE AFORESAID FAC TS DOES THE ONUS SHIFT ON TO THE DEPARTMENT. IT IS NOT ENOUGH T O ESTABLISH THE IDENTITY OF THE CREDITORS. MERE PRODUCTION OF THE C ONFIRMATION LETTERS BEFORE THE INCOME-TAX OFFICER WOULD NOT BY ITSELF PROVE THAT THE LOANS HAVE BEEN OBTAINED FROM THOSE LOAN C REDITORS OR THAT THEY HAVE CREDIT-WORTHINESS. HELD, THAT, IN THE INSTANT CASE, THE TRIBUNAL MISDI RECTED ITSELF IN HOLDING THAT THE TRANSACTIONS WERE GENUIN E SIMPLY BECAUSE SOME OF THE TRANSACTIONS WERE MADE BY CHEQU ES. THE ASSESSEE HAD FAILED TO PROVE THE CREDIT-WORTHINESS OF THE ALLEGED LENDERS. A NUMBER OF OTHER ASSESSEES HAD ALSO ADMIT TED THAT LOANS OBTAINED FROM THESE BANKERS AGAINST HUNDIS WE RE NOT ITA NO.518/AGR/2008 A.Y. 2004-05 . 24 GENUINE AND SUCH HUNDI LOANS REALLY REPRESENTED THE IR OWN CONCEALED INCOME. THE ASSESSEE HAD NOT DISCHARGED I TS BURDEN OF PROVING THAT THE LOANS IN QUESTION WERE GENUINE. 10.2 HONBLE CALCUTTA HIGH COURT IN THE CASE OF M /S. PRECISION FINANCE PVT. LTD., 208 ITR 465 HELD THAT EVEN THE LOAN THROUGH BANK CANNOT BE ACCEPTED AS GENUINE UNLESS THE IDENT ITY AND CREDITWORTHINESS OF THE CREDITORS ARE PROVED. MERE PAYMENT OF ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT M AKE A NON- GENUINE TRANSACTION GENUINE. 10.3 THE HONBLE SUPREME COURT IN THE CASE OF DUR GA PRASAD MORE, 82 ITR 540 AND SUMATI DAYAL, 214 ITR 801 HELD THAT THE COURTS AND TRIBUNAL HAVE TO JUDGE THE EVIDENCES BEF ORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES AFTER CONS IDERING THE SURROUNDING CIRCUMSTANCES. 11. ON CONSIDERATION OF THE FACTS OF THE CASE IN TH E LIGHT OF ABOVE DISCUSSION AND DECISION, WE DO NOT FIND ANY JUSTIFI CATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF ALL THE CREDITORS AND NO SOURCE OF THEIR INCOME HAS BEEN FILED. AT THE BEST THE ASSESSEE IS ABLE TO PRO VE IDENTITY OF THE CREDITORS, BUT THE ASSESSEE FAILED TO PROVE THE GEN UINE CREDIT IN THE MATTER. ALL THE CREDITORS HAVE BEEN RIGHTLY FOUND T O BE MEN OF MEAGER MEANS AND NO SOURCE OF INCOME HAVE BEEN FILED TO PR OVE THAT THEY WERE HAVING SUFFICIENT FUNDS OR SAVINGS IN ORDER TO GIVE LOANS TO THE ASSESSEE. ON VERIFICATION OF THE BANK ACCOUNT OF TH E DEPOSITORS, IT WAS SPECIFICALLY FOUND THAT THERE WERE NO SUFFICIENT FU NDS AVAILABLE IN THEIR BANK ACCOUNT AND THEY WERE HAVING ONLY SMALL BANK B ALANCE, WHICH WAS EVEN NOT SUFFICIENT TO MEET OUT THEIR HOUSEHOLD EXPENSES OR DAY- TO-DAY REQUIREMENTS. THEREFORE, IT IS UNBELIEVABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT SAID PERSONS WERE H AVING CREDITWORTHINESS TO ADVANCE ANY LOAN TO THE ASSESSE E. THE DOCUMENTS PRODUCED BY THE LD. COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK MERELY PROVE THE CASE OF ASSESSEE SUPERFICIALLY, WHICH IS FAR FROM REALITY OR TRUTH. WHEN THE TEST OF HUMAN PROBABILITIES AFTER C ONSIDERING THE SURROUNDING CIRCUMSTANCES AS IS PROPOUNDED BY HONB LE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE (SUPRA) AND SUMATI DAYAL VS. CIT (SUPRA), IS APPLIED TO THE FACTS OF THE CAS E, IT IS CLEAR THAT THE ITA NO.518/AGR/2008 A.Y. 2004-05 . 25 LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S. 68 OF THE IT ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ADDU CED ANY SUFFICIENT EVIDENCE BEFORE THE AUTHORITIES BELOW TO PROVE THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS I N THE MATTER. THEREFORE, THE ASSESSEE HAS NOT SATISFIED THE ESSEN TIAL INGREDIENTS OF SECTION 68 OF THE IT ACT. 12. IN THE CASE OF ROHINI BUILDERS AND U.M. SHAH (S UPRA), THE DEPARTMENTAL APPEAL WAS DISMISSED FINDING NO SUBSTA NTIAL QUESTION OF LAW BECAUSE THE FINDINGS OF THE TRIBUNAL WERE BASED ON APPRECIATION OF EVIDENCE. 12.1 IN THE CASE OF CIT VS. ORISSA CORPORATION P. L TD (SUPRA), IT WAS ALSO HELD THAT THE REVENUE DID NOT EXAMINE SOURCE O F INCOME OF THE SAID ALLEGED CREDITORS WHEN THEY WERE ASSESSED TO T AX TO FIND OUT WHETHER THEY WERE CREDITWORTHY. HOWEVER, IN THE PRE SENT CASE, THE AUTHORITIES BELOW HAVE SPECIFICALLY FOUND THAT ALL THE CREDITORS WERE NOT MEN OF MEANS AND AS SUCH, THEIR CREDITWORTHINES S WAS NOT PROVED AT ALL. THEREFORE, THE DECISION CITED BY THE LD. CO UNSEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF FINDINGS OF THE AUTHORITIES BELOW, WE DO NOT FIN D ANY IRREGULARITY OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW. WE CONFIRM THEIR FINDINGS AND DISMISS THE APPEAL OF THE ASSESSEE ON THIS GROUND. CONCISE GROUNDS NOS. 1 & 2 ARE, ACCORDINGLY, DISMIS SED . 10. IN THE CASE UNDER CONSIDERATION WE NOTICED TH AT ALL THE THREE PARTIES HAVE DEPOSITED THE CASH IN THEIR BANK ACCOUNT BEFORE ISS UING CHEQUES TO THE ASSESSEE, WHICH APPARENTLY SHOW THAT THESE WERE ACCOMMODATION ENTRIES, NOT GENUINE AND ALL THE THREE CREDITORS WERE NOT HAVING CREDITWORTHINES S. THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT AND SUFFICIENT MATERIAL IN THI S REGARD. WE FIND THAT THE CIT(A) HAS WRONGLY DELETED THE ADDITION SHIFTING THE BURDE N ON THE ASSESSING OFFICER TO ITA NO.518/AGR/2008 A.Y. 2004-05 . 26 ESTABLISH THE CREDITWORTHINESS OF THE DEPOSITORS. IN THE LIGHT OF THE FACTS, THE ADDITION OF RS.3,00,000/- LOANS TAKEN FROM S/SHRI A NAND KUMAR RS.1,00,000/-, FROM ASHOK KUMAR RS.1,00,000/- AND FROM RAJESH KUMA R RS.1,00,000/- ARE CONFIRMED. 11. IN RESPECT OF LOAN FROM SHRI K.K. DUBEY RS.60,0 00/-, IT WAS STATED THAT SHRI DUBEY IS AN EMPLOYEE OF STATE BANK OF INDIA AND LOA N WAS GIVEN BY DRAFTS FOR RS.20,000/- DATED 22.01.2004 AND RS.40,000/- DATED 22.01.2004 TOTAL RS.60,000/-. THE ASSESSEE HAS FURNISHED CONFIRMATION OF SHRI DUB EY ON A PLAIN PAPER OF WHICH COPY HAS BEEN PLACED AT PAGE NO.71 OF THE PAPER BOO K. IN THE CONFIRMATION, SIMPLY IT HAS BEEN STATED THAT THE LOAN WAS GIVEN BY DRAFT FOR RS.60,000/- DATED 22.01.2004, WHEREAS THE CIT(A) NOTED THAT THE LOAN WAS IN TWO PARTS I.E. OF RS.20,000/- AND OF RS.40,000/-. IT IS IMPORTANT TO NOTE THAT SHRI DUBEY IS A BANK EMPLOYEE AND HE DID NOT FURNISH THE RELEVANT DETAIL S OF THE DRAFT NUMBER AND HIS BANK ACCOUNT ETC. MERELY ON THE BASIS OF CONFIRMAT ION THAT SHRI DUBEY IS A BANK EMPLOYEE THE CREDITWORTHINESS AND GENUINENESS OF TH E TRANSACTION CANNOT BE SAID TO BE PROVED BY THE ASSESSEE. 12. AS REGARDS LOAN FROM SHRI LALOO PRASAD GUPTA RS .2,00,000, HE HAS STATED TO BE EXPIRED ON 29.01.2005. AN AFFIDAVIT HAS BEEN FI LED BY HIS SON CONFIRMING THAT THE LOAN WAS GIVEN BY HIS FATHER. THOUGH IT IS MEN TIONED THAT IT WAS REQUESTED TO ITA NO.518/AGR/2008 A.Y. 2004-05 . 27 THE ASSESSING OFFICER THAT THE DEPOSITOR MAY BE CAL LED FOR EXAMINATION, THERE IS NO MATERIAL ON RECORD TO SHOW THAT SHRI LALOO PRASAD G UPTA WAS HAVING CREDITWORTHINESS OF RS.2,00,000/-. 13. AS REGARDS LOAN FROM M/S. MISHRA ARMS, WHICH IS A PROPRIETARY CONCERN OF SHRI AJIT KUMAR MISHRA, A SUM OF RS.2,00,000/- WAS DEPOSITED IN BANK ACCOUNT ON 27.03.2004 BEFORE ISSUING THE CHEQUE TO THE ASSESSE E. THE EXPLANATION OF THE ASSESSEE WAS THAT A SUM OF RS.49,000/- AND RS.1,20, 000/- WERE WITHDRAWN FROM THE BANK ACCOUNT ON 25.03.2004 AND 27.03.2004 FROM THE JOINT SAVING ACCOUNT OF SHRI AJIT KUMAR MISHRA AND SHOBA MISHRA DOES NOT CONVIN CE TO THE FACT THAT THIS CASH WITHDRAWAL WAS DEPOSITED IN BANK ACCOUNT BEFORE GIV ING LOAN TO THE ASSESSEE. WE, THEREFORE, FIND THAT THE ADDITION TO THE EXTENT OF RS.2,00,000/- IS WARRANTED AS PER DETAILED DISCUSSION MADE ABOVE IN THIS ORDER. THE ADDITION OF RS.2,00,000/- ON ACCOUNT OF M/S. MISHRA ARM IS ACCORDINGLY CONFIRMED . 14. THUS, TOTAL ADDITION OF RS.10,10,000/-, OUT OF TOTAL ADDITION OF RS.43,80,000/, IS CONFIRMED OF WHICH DETAILS ARE AS UNDER :- 1) M/S SHARDA TRADERS RS.2,50,000/- 2) SHRI ANAND KUMAR RS.1,00,000/- 3) SHRI ASHOK KUMAR RS.1,00,000/- 4) SHRI RAJESH KUMAR RS.1,00,000/- 5) SHRI K.K. DUBEY RS. 60,000/- 6) SHRI LALOO PRASAD RS.2,00,000/- ITA NO.518/AGR/2008 A.Y. 2004-05 . 28 7) M/S MISHRA ARMS RS.2,00,000/- ----------------- TOTAL RS.10,10,000/- ---------------- 15. IN RESPECT OF OTHER CREDITORS, WE NOTICE THAT T HE CIT(A) AFTER DETAILED DISCUSSIONS FOUND THAT THE ASSESSEE HAS DISCHARGED THE BURDEN IN RESPECT OF SECTION 68 OF THE ACT BY FURNISHING NECESSARY EVIDENCES TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. IN CASE OF SHRI GOPAL MAHESHWAI FROM WHOM THE ASSESSEE HAS TAKEN LOAN OF RS.5,00,000/-, THE ASSESSEE HAS FURNISHED CREDITORS BANK STATEMENT TO SHOW THE CREDITWORTHINESS OF THE CREDITOR. IN CASE OF GOPI SHYAM PATHAK & SHRI DHAR MENDRA PATHAK, LOAN OF RS.3,35,000/- EACH HAVE BEEN TAKEN BY THE ASSESSEE AND IN SUPPORT OF THE CREDITWORTHINESS THE ASSESSEE HAS FURNISHED RELEVAN T BANK STATEMENT OF THE CREDITORS EXPLAINING THAT THE SOURCE OF LOAN WAS OUT OF ENCAS HMENT OF FDRS. IN RESPECT OF LOAN FROM M/S. R.G. FINLEASE (P) LTD. OF RS.20,00,0 00/-, THE ASSESSEE HAS FURNISHED RELEVANT MATERIALS TO SHOW THE CREDITWORTHINESS THA T M/S R.G. FINLEASE (P) LTD. HAS DEPOSITED THE AMOUNT OUT OF MATURITY AMOUNT OF FIXE D DEPOSIT OF CREDITOR. AS REGARDS LOAN FROM SMT. KUSUM LATA RS.2,00,000/-, WE NOTICE THAT SHE IS ASSESSED TO TAX AND HAVING SOURCE OF INCOME FROM HOUSE PROPERTY AND AGRICULTURE. A SUM OF RS.1,41,300/- WAS DEPOSITED IN BANK ON 05.06.2003 O N ACCOUNT OF MATURITY OF HER L.I.C. POLICY. BEFORE ISSUING THE CHEQUE OF RS.2,0 0,000/- TO THE ASSESSEE SHE WAS HAVING BANK BALANCE OF RS.3,17,498/-. SINCE, IN TH E CASE OF SMT. KUSUM LATA, THE ITA NO.518/AGR/2008 A.Y. 2004-05 . 29 ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION, THEREFORE, WE ARE OF THE VIEW THAT THE ADDITION ON THIS ACCOUNT IS NOT WARRANTED. UNDER THE CIRCUMSTANCES, WE FIND THAT T HE CIT(A) HAS RIGHTLY DELETED THE ADDITION. 16. THUS, TOTAL ADDITION OF RS.33,70,000/- IS DELET ED OUT OF TOTAL ADDITION OF RS.43,80,000/- OF WHICH DETAILS ARE AS UNDER :- 1) SHRI GOPAL MAHESHWARI RS. 5,00,000/- 2) SHRI GOPI SHYAM PATHAK RS. 3,35,000/- 3) SHRI DHARMENDRA PATHAK RS. 3,35,000/- 4) M/S. R.G. FINLEASE (P) LTD., ETAWAH RS.20,00,000 /- 5) SMT. KUSUM LATA RS. 2,00,000/- ----------------- TOTAL RS.33,70,000/- ----------------- 17. IN THE RESULT, APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* ITA NO.518/AGR/2008 A.Y. 2004-05 . 30 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY