ITO 25(3)(1), MUMBAI V. MECHAN RESORTS LLP, MUMBAI

ITA 6064/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8018 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS JYOTILAKSHMI NAYAK
• Keywords: Unexplained cash credit; Unexplained expenditure; Source of fund; Additional evidence; Onus to prove; Set aside
• Section: 69C; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH MUM BAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBE R ITA NO.6064/MUM/2018 ( ASSESSMENT YEAR: 2013-14 ) ITO-25(3)(1) ROOM NO.603 C-10, 6 TH FLOOR PRATYAKSHKAR BHAWAN BKC COMPLEX, BANDRA(E) MUMBAI-400 051 VS. M/S MECHAN RESORTS LLP B/301, VASTU APARTMENTS, MILITARY ROAD JUHU MUMBAI-400 049 PAN/GIR NO. AA SF M 3421D APPELLANT ) .. RESPONDE NT ) REVENUE BY MRS. JYOTILAKSHMI NAYAK, ADDL.CIT, ( DR ) ASSESSEE BY SHRI. VIJAY MEHTA, AR DATE OF HEARING 0 3 /12 /2019 DATE OF PRONOUNCEME NT 10 / 01 /20 20 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)37, MUM BAI, DATED 14/08/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2013- 14. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 01. 'ON THE FACTS ARID CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T, ACT, 1961 TO THE TUNE OF RS.L,75,00,000/- ,UNEXPLAINED EXPENDITURE U/S 69C OF THE LT. ACT, 19 61 LO THE TUNE OF RS.12,85,151/-, CASH DEPOSITS REFLECTED IN A1R/26AS TO THE TUNE OF RS.56,535/- AND CONTRACT INCOME REFLECTED IN A1R/26 AS OF RS.98,250/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I/T. ACT, 1961.' 02. 'ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID, CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 68 O F THE ACT EVEN THOUGH ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 2 IN THE ASSESSMENT ORDER AS WELL AS IN REMAND REPORT MAJOR DISCREPANCIES ON THE ISSUE OF IDENTITY AND CREDIT WORTHINESS OF T HE LENDER, HAVE BROUGHT IN 03. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) FAILED TO APPRECIATE THE FACT THAT IN THE AS SESSMENT ORDER AS WELL AS IN REMAND REPORT THE AO HAS CLEARLY ESTABLISHED THE UNEXPLAINED CASH CREDIT AND ACCORDINGLY, THE INTEREST EXPENDITURE,' 04. 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 05. 'THE APPELLANT CRAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD NEW GROUNDS, WHICH MAY BE NECESSARY.' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF RUNNING RESORTS, FILED ITS RETURN O F INCOME FOR AY 2013-14 ON 30/09/2013, DECLARING TOTAL INCOME AT RS . NIL. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. AO NOTICED THAT THE ASSESSEE H AS TAKEN UNSECURED LOAN TO THE TUNE OF RS.1,75,00,000/- FROM MR. AJEET N. BARSHIKAR. THEREFORE, HE CALLED UPON THE ASSESSEE T O FILE NECESSARY EVIDENCES, INCLUDING CONFIRMATION LETTER, COPIES OF ITR ETC., OF THE LENDER TO PROVE IDENTITY, GENUINENESS AND CREDITWOR THINESS OF THE LOAN CREDITOR. FURTHER, IN ORDER TO VERIFY THE CLAI M OF THE ASSESEE A NOTICE U/S 133(6) WAS ISSUED TO THE LENDER. IN RESP ONSE, THE ASSESSEE HAS FILED NECESSARY EVIDENCES, INCLUDING D ETAILS OF LOANS TAKEN FROM THE LOAN CREDITOR. THE LD. AO AFTER CONS IDERING RELEVANT SUBMISSIONS OF THE ASSESEE AND ALSO TAKEN NOTE OF D ETAILS FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CAME T O THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO PROVE ID ENTITY OF THE PERSONS, GENUINENESS OF TRANSACTIONS AND CREDITWORT HINESS OF THE PARTIES AND ACCORDINGLY, MADE ADDITIONS OF RS. 1.75 CRORES AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT, 1961. T HE RELEVANT FINDINGS OF THE LD. AO ARE AS UNDER:- ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 3 THEREFORE, IN THE LIGHT OF THE VARIOUS JUDICIAL PR ONOUNCEMENTS AND THE FACTS OF THE CASE, IT IS CLEAR THAT THE CREDITWORTH INESS AND GENUINENESS OF THE SAID LENDER IS NOT ESTABLISHED. THE ASSESSEE HA S NOT BEEN ABLE TO PROVE THE CREDITOR WAS CAPABLE OF GIVING LOANS. ENQ UIRIES CONDUCTED REVEALED THAT THE LENDER HAS NOT FILED EVEN ITR EVE N WHEN RECEIVED TAXABLE INCOME FROM ASSESSEE WHICH IS SURPRISING, A ND IT IMPLIES THAT THE TRANSACTION IS NOT GENUINE. BANK STATEMENT FURNISHE D BY LENDER IS ALSO NOT SHOWING RECEIPT OF FOREIGN REMITTANCES. THEREFORE, IT IS HELD THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF TRANSAC TION AND CREDITWORTHINESS OF THE LENDER TO THE SATISFACTION OF THE ASSESSING OFFICER WITHIN THE MEANING OF SECTION 68 OF THE INCOME TAX ACT. AN AMOUNT OF RS. 1,75,00,000/- LACS RECEIVED FROM SHRI AJIT BHARSHIK AR AS LOAN IS ADDED BACK TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED C ASH CREDIT U/S 68 OF THE ACT. PENALTY PROCEEDINGS U/S.271(1)(C) R.W. EXP LANATION-I ARE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME LEADING TO CONCEALMENT OF INCOME CHARGEABLE TO TAX.. 4. SIMILARLY, THE LD. AO HAS MADE ADDITIONS TOWARDS UNEXPLAINED EXPENDITURE BEING INTEREST PAID ON UNSECURED LOAN S TO MR. AJEET N. BARSHIKAR AT RS. 12,85,151/-, ON THE GROUND THAT SI NCE, THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF TRANSACTIONS, CO NSEQUENT INTEREST PAID ON SAID LOAN CANNOT BE ALLOWED AS DEDUCTION. L IKEWISE, THE LD. AO HAD MADE ADDITIONS TOWARDS, CASH DEPOSITS FOUND IN ICICI BANK ACCOUNT AMOUNTING TO RS. 56,535/-, ON THE BASIS OF AIR/26AS INFORMATION AND ALSO, AN AMOUNT OF RS. 98,250/-, TO WARDS UNEXPLAINED CASH CREDIT U/S 68, IN RESPECT OF AMOUN T RECEIVED FROM M/S. GARTNER INDIA RESEARCH 5. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESEE HAS FILED DETAILED WRITTEN SUBMISSIONS ALONG WITH CERTA IN ADDITIONAL EVIDENCES, WHICH HAS BEEN REPRODUCED AT PARA 4 OF T HE LD. CIT(A) ORDER. THE LD.CIT(A), DURING THE APPELLATE PROCEEDI NGS HAS FORWARDED ADDITIONAL EVIDENCES FILED BY THE ASSESSE E TO THE LD.AO ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 4 FOR EXAMINATION AND VERIFICATION. THE LD. AO VIDE HIS REMAND REPORT DATED 29/06/2018 COMMENTED UPON ADDITIONAL EVIDENCE S FILED BY THE ASSESSEE AND THEIR ADMISSIBILITY. THE LD.CIT(A) AFT ER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO TAKEN NOTE OF REMAND REPORT OF THE LD. AO, ADMITTED ADDITIONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE 46A(1), ON THE GROUND THAT THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ARE CRUCIAL TO THE GROUND RAISED IN APPEAL. FURTHER, THE IMPUGNED ORDER AND R EMAND REPORTS DO NOT CONTAINS ANY DETAILS TO CONTROVERT THE ASSERTIO N OF THE ASSESEE, NOR DO THEY BRING ON RECORD ANYTHING TO ESTABLISH THAT THE ASSESSEE WILLFULLY ABSTAINED FROM ATTENDING DURING THE SCRUT INY PROCEEDINGS. THEREFORE, HE OPINED THAT IT IS NECESSARY TO ADMIT ADDITIONAL EVIDENCES FILED BY THE ASSESEE AND ACCORDINGLY, TAK EN ON RECORD ADDITIONAL EVIDENCES FILED DURING THE COURSE OF APP ELLATE PROCEEDINGS. 6. INSOFAR AS, THE ISSUE INVOLVED ON MERITS REGARDI NG ADDITIONS MADE BY THE LD. AO TOWARDS UNSECURED LOANS TAKEN FR OM MR. AJEET N. BARSHIKAR AND CONSEQUENT INTEREST PAID THEREON, THE LD.CIT(A) HAS RECORDED CATEGORICAL FINDINGS THAT THE ASSESSEE HAS SUBMITTED COMPLETE DETAILS AND EVIDENCES WITH REGARD TO LOAN TRANSACTIONS OF RS. 1.75 CRORES, TAKEN FROM MR. AJEET N. BARSHIKAR. THE ASSESEE HAS ALSO EXPLAINED SOURCE OF FUNDS OF MR. AJEET N. BARS HIKAR. FURTHER, ALTHOUGH THE LD. AO HAS POINTED OUT CERTAIN ERRORS, MISMATCHES AND OTHER DETAILS, IN RESPECT OF EVIDENCES FILED BY THE ASSESSEE, BUT SUCH ERRORS ARE RELATES TO LOAN CREDITORS, BUT NOT TO TH E ASSESSEE. HE, FURTHER, OBSERVED THAT THE LOAN TRANSACTIONS HAVE B EEN ROUTED THROUGH BANKING CHANNELS. ALTHOUGH, THE LD. AO IN H IS REMAND REPORT COMMENTED UPON MISMATCH IN CONFIRMATION LETTER AND LEDGER EXTRACT, ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 5 BUT SUCH MISMATCH HAS BEEN RECONCILED DURING THE AP PELLATE PROCEEDINGS. HE FURTHER OBSERVED THAT OUT OF A SUM OF RS. 1.75 CRORES, A SUM OF RS. RS. 50 LACS WAS RECEIVED DURI NG THE ASSESSMENT YEAR 2012-13 AND ACCORDINGLY, THE SAME C ANNOT BE ADDED U/S 68 OF THE I.T.ACT, 1961, FOR THE YEAR UND ER CONSIDERATION. IN RESPECT OF BALANCE AMOUNT, THE ASSESSEE HAS FI LED COMPLETE DETAILS OF LOAN CREDITORS, INCLUDING HIS SOURCE OF SOURCE. THEREFORE, HE OPINED THAT THE LD. AO WAS ERRED IN MAKING ADDIT IONS TOWARDS UNEXPLAINED LOANS AND CONSEQUENT INTEREST WITHOUT B RINGING ON RECORD, HOW DETAILS FILED BY THE ASSESSEE WAS NOT S UFFICIENT TO ESTABLISH THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. THE RELEVANT FINDI NGS OF THE LD.CIT(A) ARE AS UNDER:- 9.10 THE SECTION 68 CAN BE INVOKED WHEN THERE IS C REDIT OF AMOUNTS IN THE BOOKS MAINLINED BY THE ASSESSEE (B) SUCH CREDIT HAS TO BE A SUM OF MONEY DURING THE PREVIOUS YEAR (C) EITHER THE ASSES SEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CRE DITS FOUND IN THE BOOKS OR THE EXPLANATION OFFERED BY THE ASSESSEE, I N THE OPINION OF THE AO, IS NOT SATISFACTORY. IT IS ONLY THEN THAT THE S UM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE EXPRESSION THE ASSESSEE OFFERS NO EXPLANA TION MEANS THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABL E EXPLANATION AS REGARDS THE SUMS FOUND CREDITED IN THE BOOKS MAINTA INED BY THE ASSESSEE. THE OPINION OF THE AO FOR NOT ACCEPTING T HE EXPLANATION OFFERED BY THE ASSESSES AS NOT SATISFACTORY IS REQU IRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABLE ON THE RECORD. THE OPINION OF THE AO IS R EQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL ON RECOR D FILE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE AO HAS TO ACT REASONABLY- APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. PHRASE APPEARING IN THE SECTION - NATURE AND SOURCES OF SU CH CREDITS - SHOULD BE UNDERSTOOD IN RIGHT PERSPECTIVE, SO THAT GENUINENES S OF THE TRANSACTION CAN BE DECIDED ON MERITS AND NOT ON PREJUDICES. THE EVIDENCE PRODUCED BY THE ASSESSEE CANNOT BE BRUSHED ASIDE IN A CAUSAL MANNER. LN THE MATTERS RELATED TO SECTION 68 BURDEN OF PROOF CANNO T BE DISCHARGED TO THE HILT. SUCH MATTERS ARE DECIDED ON THE PARTICULAR FA CTS OF THE CASE AS WELL AS ON THE BASIS OF .PREPONDERANCE OF PROBABILITIES. CREDIBILITY OF THE EXPLANATION, NOT THE MATERIALITY OF EVIDENCES, IS T HE BASIS FOR DECIDING THE CASES FALLING UNDER SECTION 68 OF THE IT ACT 1961. ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 6 9.11 THE HON'BLE ITAT MUMBAI IN THE CASE OF ITO VS ANAND SHELTERS PVT LTD, (2012) 20 TAXMANN,COM 153 HAS ENUMERATED CERTA IN PRINCIPLES WHICH WOULD BE EXTREMELY USEFUL IN UNDERSTANDING TH E ISSUE IN HAND. IT HAS BEEN STATED IN THE SAID JUDGMENT THAT OVER THE YEARS, LAW REGARDING CASH CREDITS HAVE EVOLVED AND HAS TAKEN A DEFINITE SHAPE. A FEW ASPECTS OF LAW U/S.68 CAN BE ENUMERATED. 1. SEC. 68 CAN BE INVOKED WHEN THERE IS A CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY THE ASSESSEE, SUCH CREDIT I S A SUM OF MONEY DURING THE PREVIOUS YEAR AND EITHER THE ASSES SEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CRE DITS OR THE EXPLANATION BY THE ASSESSEE IN THE OPINION OF THE A O IS NOT SATISFACTORY. 2. THE OPINION OF THE AO FOR NOT ACCEPTING THE EX PLANATION OFFERED BY THE ASSESSEE AS NOT SATISFACTORY IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL ON RECOR D. 3. COURTS ARE OF THE FIRM VIEW THAT THE EVIDENCE PRODUCED BY THE ASSESSEE CANNOT BE BRUSHED ASIDE IN A CASUAL MANNER , 4. THE ONUS OF PROOF IS NOT STATIC. THE INITIAL BURDEN LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY AND THE CREDIT W ORTHINESS OF THE CREDITOR AS WELL AS THE GENUINENESS OF TRANSACTION. 5. THE IDENTITY OF CREDITORS AND BE ESTABLISHED BY EITHER FURNISHING THEIR PANS OR ASSESSMENT ORDERS. THE GEN UINENESS OF THE TRANSACTION CAN BE PROVED IF IT WAS SHOWN THAT THE MONEY WAS RECEIVED BY A/C PAYEE CHEQUE. CREDITWORTHINESS OF T HE LENDER CAN BE ESTABLISHED BY ATTENDING CIRCUMSTANCES. 9.12 DURING THE ASSESSMENT PROCEEDINGS, THE APPELLA NT FURNISHED ALL THE RELEVANT DETAILS DURING THE COURSE OF THE ASSESSMEN T PROCEEDINGS AND ESTABLISH IDENTITY, AND CREDIT WORTHINESS OF THE CR EDITORS. ACCORDINGLY, THE APPELLANT HAD DULY DISCHARGED ITS ONUS BY FURNISHIN G THE IDENTITY AND ADDRESS OF THE PARTIES. FURTHER, THE SOURCE OF RECE IPT THROUGH BANKING CHANNELS TO SUBSTANTIATE THE GENUINENESS OF THE CRE DIT REFLECTED IN ITS BOOKS OF ACCOUNT, AFTER CONSIDERING THE TOTALITY OF FACTS, RIVAL SUBMISSIONS, THE APPLICABLE LAW AND ON THE BASIS OF DISCUSSION M ENTIONED ABOVE, I FIND FORCE IN THE ARGUMENT OF THE APPELLANT AND DRAW STR ENGTH FROM THE JUDICIAL DECISION, I HAVE COME TO THE CONCLUSION THAT NATURE AND SOURCE OF LOAN TRANSACTIONS OF RS.1,75,98,753/- STANDS EXPLAINED. CONSEQUENTLY, ADDITION MADE BY A.O. CANNOT BE SUSTAINED. THEREFOR E, A.O. IS DIRECTED TO DELETE THE ADDITION OF RS,1,75,98,753/-, THIS GROU ND IS ALLOWED. 7. INSOFAR AS, ADDITIONS MADE BY THE LD. AO TOWARDS UNEXPLAINED EXPENDITURE BEING INTEREST PAID ON LOAN TAKEN FROM MR. AJEET N. BARSHIKAR, THE LD.CIT(A) HELD THAT SINCE, THE LOAN TRANSACTION HAS BEEN CONSIDERED AS GENUINE, CONSEQUENT INTEREST PAI D THEREON ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 7 CANNOT BE DISALLOWED AS UNEXPLAINED EXPENDITURE. AC CORDINGLY, DIRECTED THE AO TO DELETE ADDITIONS. INSOFAR AS, AD DITIONS MADE BY THE LD. AO TOWARDS CASH DEPOSITS FOUND IN ICICI BAN K ACCOUNT, THE LD.CIT(A) HELD THAT ALTHOUGH, THE ASSESSEE HAS FILE D NECESSARY DETAILS DURING THE REMAND PROCEEDINGS, BUT THE LD. AO DID NOT FOUND ANY DISCREPANCY IN THE DOCUMENTS. THEREFORE, DIRECT ED THE LD. AO TO DELETE ADDITIONS OF RS. 56,535/-. SIMILARLY, THE LD .CIT(A) HAS DELETED ADDITIONS MADE BY THE LD. AO TOWARDS AMOUNT RECEIVE D FROM GARTNER INDIA RESEARCH FOR RS. 98,250/-, ON THE GRO UND THAT THE ASSESSEE HAS EXPLAINED THE TRANSACTIONS WITH EVIDEN CES. AGGRIEVED BY THE LD.CIT(A) ORDER, THE REVENUE IS IN APPEAL BE FORE US. 8. THE LD. DR SUBMITTED THAT THE LD.CIT(A) WAS ERRE D IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T.ACT, 1961 TO THE TUNE OF RS. 1.75 CRORES, WITH OUT APPRECIATING THE FACT THAT THE LD. AO HAS BROUGHT OUT MAJOR DISCREP ANCIES IN THE ISSUE OF IDENTITY AND CREDITWORTHINESS OF THE LENDE R. THE LD. DR FURTHER SUBMITTED THAT THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT IN THE ASSESSMENT ORDER, AS WELL AS IN REMAND REPORT, THE LD. AO HAS CLEARLY ESTABLISHED THE UNEXPLAINED CASH CRE DIT AND ACCORDINGLY, INTEREST EXPENDITURE HAS BEEN DISALLOW ED. THE LD.CIT(A) WITHOUT CONSIDERING THE FACTS BROUGHT OUT BY THE LD. AO, SIMPLY DELETED ADDITIONS ONLY ON THE BASIS OF ADDIT IONAL EVIDENCES FILED BY THE ASSESSEE, EVEN THOUGH THE LD. AO HAS R EJECTED ADDITIONAL EVIDENCES FILED DURING THE COURSE OF REMAND PROCEED INGS. INSOFAR AS, DISALLOWANCES OF INTEREST EXPENDITURE AND OTHER ADD ITIONS REGARDING CASH DEPOSITS FOUND IN AIR INFORMATION, THE LD. DR SUBMITTED THAT THE LD.CIT(A) WITHOUT ASSIGNING ANY REASONS SIMPLY DELE TED ADDITIONS ON ONE LINE FINDING THAT THE ASSESSEE HAS RECONCILED D IFFERENCE. BUT, FACT ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 8 REMAINS THAT NO EVIDENCE HAS BEEN PLACED ON RECORD BEFORE THE LD. AO TO ESTABLISH THE TRANSACTIONS. THE LD. CIT(A) WI THOUT APPRECIATING THOSE FACTS HAS DELETED ADDITIONS MADE BY THE LD. A O AND HENCE, HIS ORDER SHOULD BE REVERSED. 9. THE LD. AR, FOR THE ASSESEE, ON THE OTHER HAND, STRONGLY SUPPORTING ORDER OF THE LD.CIT(A) SUBMITTED THAT TH E ASSESSEE HAS FILED COMPLETE DETAILS, IN RESPECT OF UNSECURED LOA N TAKEN FROM MR. AJEET N. BARSHIKAR ALONG WITH CONFIRMATION LETTERS, BANK STATEMENT AND INCOME TAX RETURNS FILED FOR AY 2012-13 & 2013- 14 TO ESTABLISH THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDI TWORTHINESS OF THE PARTIES. THE LD. AR, FURTHER SUBMITTED THAT THE ASS ESSEE HAS ALSO FILED A COMPARATIVE CHART EXPLAINING SOURCE FOR AMO UNT GIVEN TO THE ASSESSEE. THE LD.CIT(A) AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITIONS MADE BY THE LD. AO TOWARDS UNSECU RED LOANS AND CONSEQUENT INTEREST U/S 68 OF THE I.T.ACT, 1961. IN SOFAR AS, OTHER ADDITIONS REGARDING CASH DEPOSITS FOUND IN ICICI BA NK ACCOUNT AND AMOUNT RECEIVED FROM GARTNER INDIA RESEARCH, THE AS SESSEE HAS RECONCILED INFORMATION AVAILABLE IN AIR DATA BASE T O RETURN OF INCOME FILED FOR THE YEAR AND ON THE BASIS OF EXPLANATIONS FURNISHED BY THE ASSESSEE, THE LD.CIT(A) HAS DELETED ADDITIONS. THER EFORE, THERE IS NO REASON TO INTERFERE IN THE FINDINGS OF THE LD.CI T(A). 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. WE FIND THAT THE LD.CIT(A) HAD RECORDED CATEGORICAL FINDING S, IN LIGHT OF VARIOUS EVIDENCES FILED BY THE ASSESSEE, INCLUDING CONFIRMATION LETTERS AND CORRESPONDING BANK STATEMENT OF MR. AJE ET N. BARSHIKAR TO COME TO THE CONCLUSION THAT LOAN TRANSACTIONS BE TWEEN THE ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 9 ASSESSEE AND THE LOAN CREDITOR IS GENUINE TRANSACTI ON, WHICH IS SUPPORTED BY NECESSARY EVIDENCES. THE LD.CIT(A) HAS ALSO NEGATED OBSERVATIONS MADE BY THE LD. AO WITH REGARD TO DISC REPANCY IN CERTAIN DOCUMENTS FILED BY THE ASSESSE WITH REGARD TO LOAN CREDITOR AND NOTED THAT SAID DISCREPANCY IN THE DOCUMENTS IS NOTHING TO DO WITH THE TRANSACTIONS WITH THE ASSESSEE. WE FURTHER NOTED THAT THE ASSESSEE HAS FILED A PAPER BOOK EXPLAINING THE TRAN SACTIONS BETWEEN THE ASSESEE AND THE LOAN CREDITOR. WE FIND THAT THE ASSESEE HAS FILED COMPLETE SET OF DOCUMENTS WITH REGARD TO EACH AND EVERY AMOUNT OF LOAN GIVEN TO ASSESSEE RIGHT FROM 03/01/2 012 TO 02/11/2012 AND ALSO EXPLAINED CORRESPONDING SOURCE OF INCOME FOR AMOUNT TRANSFERRED TO THE ASSESSE. WE FURTHER NOTED THAT THE LOAN CREDITOR HAS EXPLAINED THE SOURCE OF INCOME OUT OF ENCASHMENT OF MUTUAL FUNDS INVESTMENTS, SALE OF LISTED EQUITY SHA RES FOR WHICH NECESSARY CONTRACT NOTES FROM BROKERS AND BANK STAT EMENT HAS BEEN FILED. SIMILARLY, IN RESPECT OF AN AMOUNT OF RS. 20 LACS TRANSFERRED ON 16/04/2012, THE SOURCE HAS BEEN EXPLAINED FROM AMOU NT RECEIVED FROM SARITHA BARSHIKAR WIFE OF LENDER, FOR WHICH NE CESSARY BANK STATEMENT HAS BEEN ENCLOSED. THE ASSESSEE HAS ALSO FILED INCOME TAX COPY OF LOAN CREDITORS FOR THE RELEVANT FINANCI AL YEAR. FROM THE ABOVE, IT IS VERY CLEAR THAT THE IDENTITY, GENUINEN ESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LOAN CREDITOR HAS BEEN EXPLAINED WITH NECESSARY EVIDENCES. THE LD.CIT(A) AFTER CONSIDERIN G RELEVANT FACTS HAS RIGHTLY CAME TO THE CONCLUSION THAT THE ASSESSE E HAS DISCHARGED ONUS CAST UPON U/S 68 OF THE I.T.ACT, 1961, IN RESP ECT OF UNSECURED LOANS TAKEN FROM MR. AJEET N. BARSHIKAR. NO CONTRAR Y EVIDENCE HAS BEEN BORUGHT ON RECORD TO PROVE FINDINGS OF FACTS R ECORDED BY THE LD. CIT(A) ARE INCORERCT. HENCE, WE ARE INCLINED TO UPH OLD THE FINDINGS OF THE LD.CIT(A) AND REJECT GROUND TAKEN BY THE REVEN UE. ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 10 11. INSOFAR AS, ADDITIONS TOWARDS INTEREST PAID ON UNSECURED LOANS AS UNEXPLAINED EXPENDITURE, ONCE LOAN TRANSACTIONS BETWEEN THE ASSESEE AND THE CREDITOR HAS BEEN FOUND TO BE GENUI NE TRANSACTIONS, WHICH SATISFIES THE CONDITIONS PRESCRIBED U/S 68, T HEN INTEREST PAID THEREON CANNOT BE CONSIDERED AS UNEXPLAINED EXPENDI TURE. ACCORDINGLY, WE DO NOT FIND ANY ERROR THE FINDINGS OF THE LD.CIT(A). INSOFAR AS, ADDITIONS MADE TOWARDS CASH DEPOSITS IN ICICI BANKS AND AMOUNT RECEIVED FROM GARTNER INDIA RESEARCH, WE FIN D THAT THE LD.CIT(A) HAS RECORDED CATEGORICAL FINDINGS, IN LIG HT OF EVIDENCES FILED BY THE ASSESSE THAT SAID INFORMATION HAS BEEN RECONCILED WITH REFERENCE TO RETURN OF INCOME FILED FOR THE YEAR. HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LD. AO AND R EJECT GROUND TAKEN BY THE REVENUE. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 /01/ 2020 SD/- ( SAKTIJIT DEY ) SD/- ( G. MANJUNATHA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 10 /01/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. ITA NO.6064/MUM/2018 MECHAN RESORTS LLP 11 BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI //TRUE COPY//