The DCIT, Circle-11, Ahmedabad V. M/s. Mukeshkumar & Co., Ahmedabad

ITA 607/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0653 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Additional evidence; Onus to prove
• Section: 143(3); 133A; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.607/AHD/2013 ( / ASSESSMENT YEAR : 2009-10) THE DCIT CIRCLE-11 AHMEDABAD / VS. M/S.MUKESHKUMAR & CO. 277, NEW CLOTH MARKET O/S. RAIPUR GATE RAIUPUR AHMEDABAD $ ./ ./ PAN/GIR NO. : AADFM 0592 Q ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $&) / APPELLANT BY : SHRI JAMES KURIAN, SR.DR '($&*) / RESPONDENT BY : SHRI S.N. DIVATIA, AR +* / DATE OF HEARING 28/07/2016 ,-./* / DATE OF PRONOUNCEMENT 29/08/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XVI, AHMEDABAD DATED 18/12/2012 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 2 - 2.1. ASSESSEE IS A PARTNERSHIP-FIRM STATED TO BE EN GAGED IN THE BUSINESS OF CLOTH. ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2009-10 ON 28/09/2009 DECLARING INCOME OF RS.5,88,290/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) VIDE ORDER DATED 19/12/2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,11,74,650/-. AGGRIEVED BY THE ORDER OF THE A SSESSING OFFICER (AO), ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), W HO DECIDED THE ISSUE IN FAVOUR OF ASSESSEE VIDE ORDER DATED 18/12/2012 (IN APPEAL NO.CIT(A)- XVI/ITO/WD.11(4)/516/11-12). AGGRIEVED BY THE ORD ER OF LD.CIT(A), NOW THE REVENUE IS IN APPEAL BEFORE US AND HAS RAIS ED THE FOLLOWING GROUNDS:- (1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.91,50,000/- MADE ON ACCOUNT OF UNEXPLAINED CA SH CREDITS U/S.68 OF THE ACT. (2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14,36,361/- MADE BY DISALLOWING THE INTEREST PAID ON UNSECURED LOANS. 2.2. SINCE BOTH THE GROUNDS RAISED BY REVENUE BEIN G INTER-CONNECTED, THE SAME ARE CONSIDERED TOGETHER. 2.3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A O NOTICED THAT SURVEY ACTION IN THE CASE OF SHRI LALITKUMAR SHARMA & OTHERS WERE CONDUCTED ON 31/08/2009, WHEREIN STATEMENT OF SHRI RAMDINESH SHARMA WAS RECORDED WHEREIN HE ADMITTED THAT HE WAS MANAGI NG BUSINESS ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 3 - AFFAIRS/BANK ACCOUNTS OF 61 PERSONS. DURING THE AS SESSMENT PROCEEDINGS, IT WAS NOTICED THAT ASSESSEE HAD RECEIVED LOANS FRO M VARIOUS PERSONS LISTED AT PAGE NO.4 AND HAD ALSO PAID INTEREST AND THE NAMES OF THESE PERSONS HAD APPEARED IN THE STATEMENT OF SHRI RAMDI NESH SHARMA THAT WERE RECORDED AT THE TIME OF SURVEY. ASSESSEE WAS THEREFORE ASKED TO PROVE IDENTITY, CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTIONS AND PRODUCE THOSE 14 PERSONS. AO NOTICED THAT ASSESSEE ONLY FILED CONFIRMATIONS OF THE PERSONS BUT DID NOT PRODUCE TH E PERSONS BEFORE THE AO. AO THEREFORE CONCLUDED THAT THE CREDITS WERE N OT GENUINE AND HAD REMAINED UNEXPLAINED. HE THEREFORE TREATED THE AGG REGATE AMOUNT OF RS.91,50,000/- AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. SINCE THE CASH CREDIT WAS TREATED AS UNEXPLAINED, THE INTERES T PAID BY THE ASSESSEE TO THOSE PARTIES AGGREGATING TO RS.14,36,361/- WAS ALS O DISALLOWED BY THE AO. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE THE LD.CIT(A), LD.CIT(A) BY FOLLOWING THE DECISION IN THE CASE OF M/S.PURANMAL SHAH HUF PASSED FOR AY 2009-10 (ORDER DATED 16/07/2012), DELETED THE ADDITION MADE BY THE AO BY HOLDING AS UNDER:- 3.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS MADE BY THE APPELLANT AND THE MATERIAL AVAILABLE ON RECORDS. IN THIS REGARD, IT IS SEEN THAT ON IDENTICAL FACTS IN THE CASE OF ONE M/S. PURANMAL SHAH, HUF VIDE APPEAL ORDER NO CIT(A)-XVL/LTO/WD.11 (4)/396/11-12 DATED IN VIEW OF THE FACTS OF THE CASE, ADDITION U/S. 68 CANNOT BE SUSTAINED.RELEVANT PORTION OF THE APPELLATE ORDER MENTIONED SUPRA, IS REPRODUCED HEREUNDER :- '.......IN THIS REGARD, IT IS SEEN THAT, ON IDENTIC AL FACTS AN APPELLATE ORDER FOR A Y 2008-09 IN THE CASE OF ONE M/S. MUKESHKUMAR & CO VIDE APPEAL NO ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 4 - CIT(A)XVI/ITO/WD.11(4)/580/10-11 DATED 14-10-2011 A ND FOR A Y 2008-09 IN THE CASE OF ONE M/S. SYNWAVE INDUSTRIES VIDE APP EAL NO CIT(A)XVI/ITO/WD. 11(4)/402/10-11 DATED 17-11-2011 HAS BEEN PASSED BY MY LD PREDECESSOR. IN THE CASE OF M/S. SYNWAVE INDU STRIES ABOVE, MY LD. PREDECESSOR HAS OBSERVED AS UNDER :- '.......I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND ALSO GONE THROUGH THE FINDING RECORDED BY THE ASSESSING OFFICER IN PARA-4 OF THE ASSESSMENT ORDER. IT IS EVIDENT FROM RECORD THAT TH E ASSESSEE HAD RAISED LOAN FROM TEN PERSONS DURING THE YEAR UNDER CONSIDERATIO N AS SHOWN IN THE TABLE IN PARA-3.0 ABOVE. THE DEPOSITS WERE FOUND RECORDED IN THE BOOKS OF ACCOUNT OF THE APPELLANT. ALL OF THE DEPOSITS WERE TAKEN BY A/ C PAYEE CHEQUES AND CREDITED TO THE BANK ACCOUNT OF THE ASSESSEE. DETAI LED CONFIRMATIONS OF THE DEPOSITORS WERE FILED DURING THE COURSE OF ASSESSME NT PROCEEDINGS CONTAINING NAME AND COMPLETE ADDRESS, PAN, AMOUNT OF LOAN, DAT E OF GIVING LOAN, THE CHEQUE NUMBERS, NAME OF BANK, DATE OF REPAYMENTS OF LOAN ETC. ETC. ALL THE DEPOSITORS ARE INCOME-TAX ASSESSEE AND REGULARLY FI LING THEIR RETURNS OF INCOME. EACH OF THE DEPOSITORS HAD CERTIFIED IN THE CONFIRMATIONS THAT THEY HAD NEITHER RECEIVED ANY CASH FROM THE PARTY AT THE TIME OF GRANTING OF LOAN NOR GIVEN ANY CASH TO THE PARTY AT THE TIME OF RECE IPT OF LOAN. THE ASSESSEE HAD THUS PRIMA FACIE ESTABLISHED THE GENUINENESS OF THE CASH CREDITS. THE ASSESSING OFFICER HAD NOT BROUGHT ANY ADVERSE MATER IAL ON RECORD TO SUGGEST THAT ANY CASH WAS GIVEN BY THE ASSESSEE TO THE DEPO SITORS OR TO SHRI RAMDINESH SHARMA AND THE SAID CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF THE DEPOSITORS. THE ASSESSING OFFICER HAD ALSO NOT GIVEN ANY JUSTIFICATION AS TO WHAT WAS REQUIRED TO BE VERIFIED AFTER FILING OF DE TAILED CONFIRMATIONS FOR WHICH THE PRESENCE OF THE DEPOSITORS WAS NECESSARY. IT IS EVIDENT FROM RECORD THAT THE LOAN WAS REPAID IN THE F.Y.2009-10 AND THU S IT WAS NOT POSSIBLE FOR THE ASSESSEE TO PRODUCE THE DEPOSITORS. EVEN IF ANY SPECIFIC VERIFICATION WAS REQUIRED FROM THE DEPOSITORS, THE ASSESSING OFFICER COULD HAVE SUMMONED THOSE DEPOSITORS WHICH WAS NOT DONE BY THE ASSESSIN G OFFICER. THIS SHOWS THAT NOTHING SPECIFIC WAS REQUIRED TO BE VERIFIED. 3.7 THE PROVISIONS OF SEC. 68 SAY THAT 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YE AR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSI NG] OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR.' THOUGH, THERE ARE NUMBER OF DECISIONS OF THE HON'BLE SUPREME COURT, THE HIGH COURTS AND THE VARIOUS TRIB UNALS FOR AND AGAINST ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 5 - THE ASSESSEE ON THE ISSUE OF CASH CREDITS BUT THE S ETTLED POSITION OF LAW IS THAT IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FAC IE THE TRANSACTIONS WHICH RESULTS IN A CASH CREDIT IN HIS BOOKS OF ACCOUNT. S UCH PROOF INCLUDES PROOF OF THE IDENTITY OF HIS CREDITOR, THE CAPACITY OF SUCH CREDITOR TO ADVANCE THE MONEY AND, LASTLY, THE GENUINENESS OF THE TRANSACTION. TH ESE THINGS MUST BE PROVED PRIMA FACIE BY THE ASSESSEE AND ONLY AFTER THE ASSE SSEE HAS ADDUCED EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORESAID, THE ONUS SH IFTS ON THE DEPARTMENT. THE HON'BLE DELHI HIGH COURT IN A RECENT DECISION (RELA TING TO SHARE CAPITAL) IN THE CASE OF CIT VS. OASIS HOSPITALITIES (P.) LTD. [ 2011] 333 ITR 119 (DELHI) HAS OBSERVED THAT: 'THE PLAIN LANGUAGE OF SECTION 68 SUGGESTS THAT WHE N THE ASSESSEE IS TO GIVE SATISFACTORY EXPLANATION ABOUT RECEIPTS, BURDEN OF PROOF IS ON THE ASSESSEE TO PROVIDE NATURE AND SOURCE OF THOSE RECEIPTS. [PARA 5] IN ORDER TO DISCHARGE THIS BURDEN, THE ASSESSEE IS REQUIRED TO PROVE : (A )IDENTITY OF THE SHAREHOLDER; (B )GENUINENESS OF THE TRANSACTION; AND (C )CREDITWORTHINESS OF THE SHAREHOLDERS. [PARA 11] IN CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDUAL, SOME DOCUMENTS WILL HAVE TO BE FILED OR THE SAID SHAREHOLDER WILL HAVE TO BE PR ODUCED BEFORE THE ASSESSING OFFICER TO PROVE HIS IDENTITY. IF THE CREDITOR/SUBS CRIBER IS A COMPANY, THEN THE DETAILS IN THE FORM OF ITS REGISTERED ADDRESS OR PA N IDENTITY, ETC., CAN BE FURNISHED. [PARA 12] GENUINENESS OF THE TRANSACTION IS TO BE DEMONSTRATE D BY SHOWING THAT THE ASSESSEE HAD, IN FACT, RECEIVED MONEY FROM THE SAID SHAREHOLDER AND IT HAD COME FROM THE COFFERS OF THAT VERY SHAREHOLDER. WHE N THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS, GENUINENESS OF THE TRANSACTION WOULD BE PROVED. OTH ER DOCUMENTS SHOWING THE GENUINENESS OF THE TRANSACTION CAN BE THE COPIE S OF THE SHAREHOLDERS' REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER R EGISTER, ETC. [PARA 13] AS FAR AS THE CREDITWORTHINESS OR FINANCIAL STRENGT H OF THE CREDITOR/SUBSCRIBER IS CONCERNED, THAT CAN BE PROVED BY PRODUCING THE B ANK STATEMENT OF THE CREDITORS/SUBSCRIBERS SHOWING THAT IT HAD SUFFICIEN T BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. ONCE T HESE DOCUMENTS ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DI SCHARGED THE ONUS CAST ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 6 - UPON HIM. THEREAFTER, IT IS FOR THE ASSESSING OFFIC ER TO SCRUTINIZE THE SAME AND IN CASE HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THESE DOCUMENTS, TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUM ENTS PRODUCED BY THE ASSESSEE ON THE AFORESAID ASPECTS, THERE HAS TO BE SOME COGENT REASONS AND MATERIALS FOR THE ASSESSING OFFICER AND HE CANNOT G O INTO THE REALM OF SUSPICION.' IF THE CASE OF THE ASSESSEE IS EXAMINED IN THE LIGH T OF THE PROVISIONS OF SEC. 68 OF THE ACT, THE SETTLED POSITION OF LAW AS AFORESA ID AND IN VIEW OF THE ABOVE OBSERVATIONS OF THE DECISION OF THE HON'BLE DELHI H IGH COURT, IT WILL BE SEEN THAT THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF A LL THE CREDITORS BY FILING DETAILED CONFIRMATIONS. THE ASSESSEE HAD ESTABLISHE D THE GENUINENESS OF THE TRANSACTIONS AS ALL THE CREDITS WERE RECEIVED BY AC COUNT PAYEE CHEQUES AND THIS FACT WAS NOT DISPUTED BY THE ASSESSING OFFICER . THE CHEQUES WERE DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE AND W ERE CLEARED THROUGH THE BANKING CHANNEL. THE CREDITWORTHINESS OF ALL THE CR EDITORS WAS ALSO ESTABLISHED BY DECLARING THAT ALL THE DEPOSITORS AR E INCOME-TAX ASSESSES AND REGULARLY FILING THEIR RETURNS OF INCOME AND THE AM OUNT OF DEPOSITS WERE BY ACCOUNT PAYEE CHEQUES. THE COPIES OF BANK ACCOUNTS OF THE DEPOSITORS WERE CALLED FOR FROM THE LD. COUNSEL FOR VERIFICATION AN D IT WAS NOTICED THAT NO CASH WAS DEPOSITED IN THE ACCOUNTS IMMEDIATELY BEFO RE THE ISSUE OF CHEQUES FOR LOAN. THE BANK ACCOUNT NUMBERS, THE COMPLETE AD DRESSES OF THE ACCOUNT HOLDERS AND THE CLEARING DETAILS OF THE CHEQUES BY WHICH THE DEPOSITS WERE GIVEN ARE AVAILABLE IN THE COPIES OF SUCH BANK ACCO UNTS. THE COPIES OF BANK ACCOUNTS WERE NECESSARILY REQUIRED TO ASCERTAIN THE RELEVANT ENTRIES AND THESE CANNOT BE TREATED AS AN ADDITIONAL EVIDENCE AS PER PROVISIONS OF RULE-46A(4) OF THE INCOME-TAX RULES, 1962. 3.9 CONSIDERING THE FACTS OF THE CASE AND THE SUBMI SSION OF THE ASSESSEE FILED BEFORE THE ASSESSING OFFICER, I AGREE WITH THE CONT ENTION OF THE LD. COUNSEL THAT THE ASSESSING OFFICER HAD HEAVILY RELIED UPON THE MATERIAL AVAILABLE WITH HIM AS COLLECTED DURING THE COURSE OF SURVEY IN CAS E OF SHRI LALIT SHARMA BUT UNLESS THE SAID MATERIAL WAS MADE AVAILABLE TO THE APPELLANT AND ALLOWED TO CROSS-EXAMINE THE PARTIES, THE SAME CANNOT BE USED AGAINST THE APPELLANT OR NO ADVERSE INFERENCES COULD BE DRAWN AGAINST THE AS SESSEE. LIKEWISE, THE ASSESSING OFFICER HAD RELIED UPON THE STATEMENT OF SHRI RAM DINESH SHARMA WITHOUT ALLOWING THE APPELLANT THE OPPORTUNITY TO C ROSS-EXAMINE HIM. THE APPELLANT VIDE PARA-5 OF ITS LETTER DATED 19.12.201 0 HAD BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE STATEMENT OF SHRI RAMDINESH SHARMA IS SUMMON SHRI RAMDINESH SHARMA U/S.131 OF THE INCOME- TAX ACT 1961 FOR ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 7 - CROSS-EXAMINATION BY FIRMS AUTHORIZED REPRESENTATI VE. HOWEVER, NO ANY OPPORTUNITY TO CROSS EXAMINE SHRI RAMDINESH SHARMA WAS ALLOWED TO THE ASSESSEE BY THE ASSESSING OFFICER FOR THE REASONS BEST KNOWN TO HIM. IT IS THE SETTLED POSITION OF LAW THAT THE MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE UNLESS HE/SHE I S CONFRONTED WITH THE MATERIAL SO COLLECTED. APART FROM IT, THE LD. COUNS EL HAD RELIED UPON AND BROUGHT ON RECORD THE APPELLATE ORDER OF MY PREDECE SSOR IN THE CASE OF BABULAL RAMPRASAD AGARWAL, HUF, IN WHICH THE SAME A SSESSING OFFICER HAD MADE AN ADDITION OF RS. 15 LAKHS ON SIMILAR REASONI NG AND THAT APPELLANT HAD ASKED THE ASSESSING OFFICER AN OPPORTUNITY TO CROSS EXAMINE SHRI. RAMDINESH SHARMA BUT NO OPPORTUNITY WAS GIVEN BY THE ASSESSIN G OFFICER. THE CIT (APPEALS) XVI, AHMEDABAD HAD ALLOWED THE APPEAL OF THAT ASSESSEE AND DELETED THE ADDITION. THE RELEVANT FINDING GIVEN VI DE PARA-2.3.1 OF APPELLATE ORDER DATED 08.11.2010 IN APPEAL NO. CIT(A)-XVI/WD. 11(4)/156/09-10 IS AS UNDER: 'I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPEL LANT AND OBSERVATION OF THE AO. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE APPELLANT HAS FILED COPIES OF CONFIRMATIONS GIVING NAMES, ADDRESSES, PA N NUMBER, INCOME-TAX RETURN COPIES OF THESE PARTIES AND INITIALLY DISCHA RGED ITS ONUS. FROM THE REMAND REPORT, IT IS ALSO CLEAR THAT THE AO HAS FAI LED TO GIVE CROSS EXAMINATION TO THE APPELLANT. AND HENCE THE STATEME NT RELIED UPON BY THE AO CANNOT BE MADE FOR THE ADDITION. THE PAPER ON WHI CH THE AO HAS RELIED ALSO DOES NOT SPEAK ABOUT THE LOAN BEING BOGUS OR ONLY AN ARRANGEMENT OR ACCOMMODATION ENTRY. IN VIEW OF THIS REASON, I AGRE E WITH THE APPELLANT AND THE ADDITION OF THE LOAN, AS WELL AS DISALLOWANCE O F CONSEQUENT INTEREST IS DELETED. THESE GROUNDS OF APPEAL ARE ALLOWED.' 3.10 SINCE THE FACTS OF THE CASE DECIDED BY MY PRE DECESSOR ARE EXACTLY SIMILAR TO THE APPELLANT'S CASE, I HAVE NO HESITATION IN FO LLOWING THE ORDER OF MY PREDECESSOR. APART FROM IT, IN VARIOUS SUCH CASES, THE ADDITIONS MADE U/S 68 OF THE ACT ON THE BASIS OF THE STATEMENT OF SHRI RAMDI NESH SHARMA WERE DELETED BY ME WHERE THE THREE BASIC INGREDIENTS I.E. IDENTI TY OF THE CREDITORS, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S WERE ESTABLISHED. IN THOSE CASES, I HAVE RELIED UPON THE DECISIONS OF TH E HON'BLE GUJRAT HIGH COURT IN THE CASE OF DY.CIT VS. ROHINI BUILDERS [2003] 25 6 ITR 360 (GUJ.) AND THE HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF DIMCO SIL K MILLS VS. 770 107 TAXMAN 41 (AHD.) ALONGWITH VARIOUS OTHER DECISIONS. THOUGH, THE LD. COUNSEL HAD NOT RELIED UPON SUCH DECISIONS BUT THE SAME ARE CLEARLY APPLICABLE IN THIS CASE ALSO. THE HON'BLE GUJARAT HIGH COURT IN THE CA SE OF DY.CIT VS. ROHINI ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 8 - BUILDERS [2003] 256 ITR 360 (GUJ.) HAD EVEN HELD TH AT MERELY BECAUSE SUMMONS ISSUED TO SOME OF CREDITORS COULD NOT BE SE RVED OR THEY FAILED TO APPEAR BEFORE ASSESSING OFFICER, COULD NOT BE GROUN D TO TREAT THOSE CREDITS AS NON-GENUINE. THE HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF DIMCO SILK MILLS VS. ITO 107 TAXMAN 41 (AHD.)(MAG.) HAD HELD T HAT WHERE ASSESSEE RECEIVED AMOUNTS APPEARING AS DEPOSITS IN ACCOUNTS OF THIRD PARTIES THROUGH ACCOUNT PAYEE CHEQUES AND FILED CONFIRMATION AND OT HER MATERIALS TO SUPPORT GENUINENESS OF THOSE PARTIES, ADDITION MADE ON ACCO UNT OF UNEXPLAINED CASH CREDITS IN THOSE ACCOUNTS COULD NOT BE SUSTAINED. I T HAD ALSO BEEN HELD BY THE HON'BLE GUJARAT HIGH COURT, BY THE HON'BLE GAUHATI HIGH COURT AND BY THE HON'BLE RAJASTHAN HIGH COURT THAT THE ASSESSEE CAN BE ASKED TO PROVE SOURCE OF CREDITS IN ITS BOOKS OF ACCOUNT BUT NOT SOURCE O F SOURCE. THE DECISIONS OF THE ABOVE HIGH COURTS ARE EQUALLY APPLICABLE IN THIS CA SE ALSO. 3.11 CONSIDERING THE DISCUSSION IN PARA-3.6 TO PA RA-3.10 AS ABOVE AND RELYING UPON THE LAW LAID DOWN BY VARIOUS HIGH C OURTS INCLUDING THE HON'BLE GUJARAT HIGH COURT, THE AHMEDABAD TRIBUNAL AND ALSO FOLLOWING THE APPELLATE ORDER OF MY PREDECESSOR, I AM OF THE OPIN ION THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE CASH CRED IT OF RS. 53,25,000/- AS UNEXPLAINED. THE ADDITION SO MADE FOR RS. 53,25,0 00/- IS HEREBY DELETED. THE SECOND, THIRD FOURTH AND SEVENTH GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWED. 4.0 THE FIFTH GROUND OF APPEAL IS REGARDING THE ADD ITION OF RS. 2,07,390/- MADE BY DISALLOWING THE INTEREST PAID TO THE 8 DEPO SITORS ON UNSECURED LOANS. THE ASSESSING OFFICER HAD DISCUSSED THIS ISSUE IN P ARA-4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER WAS OF THE VIEW THAT S INCE THERE WERE NO GENUINE CASH CREDITS, THE ENTIRE INTEREST TOTALING TO RS. 2 ,07,390/- IS DISALLOWED AND ADDED TO TOTAL INCOME OF THE ASSESSEE. 4.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE LD. COUNSEL AND ALSO GONE THROUGH THE FINDING IN PARA-4 OF THE ASSESSMEN T ORDER. THE DISALLOWANCE OF INTEREST ON THE DEPOSITS OF RS. 25,00,000/- TAKE N DURING THE YEAR UNDER CONSIDERATION CANNOT BE DISALLOWED AS THE DEPOSITS HAVE BEEN CONSIDERED AS GENUINE AND ADDITION HAS BEEN DELETED. THE DISALLO WANCE SO MADE FOR RS. 2,07,90/- IS HEREBY DELETED. THE FIFTH GROUND O F APPEAL IS ACCORDINGLY ALLOWED.....' SIMILARLY, IN THE CASE OF M/S. MUKESHKUMAR & CO. S UPRA, A/SO MY LD. PREDECESSOR HAS GIVEN SIMILAR ARGUMENTS TO DELETE T HE ADDITIONS MADE ON ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 9 - ACCOUNT OF CASH CREDITS AS WELL AS DISALLOWANCE OF CORRESPONDING INTEREST THEREIN. 2.6 AFTER CAREFULLY CONSIDERING THE FACTS OF THE PRESENT CASE, WITH THE DECISIONS ARRIVED AT BY MY LD. PREDECESSORS IN THE CASES MENTIONED SUPRA, IT IS NOTED THAT FACTS OF THE PRESENT CASE ARE IDENTIC AL. SINCE, THE FACTS OF THE CASE DECIDED BY MY LD. PREDECESSORS ARE EXACTLY SIMILAR TO THE APPELLANTS CASE, I HAVE NO HESITATION IN FOLLOWING THE ORDER OF MY PRE DECESSOR. ACCORDINGLY, THE ACTION OF THE AO IN MAKING THE ADDITION OF RS. 33,5 0,000/- AS CASH CREDITS U/S. 68 OF THE ACT AND OF RS. 1,87,763/- ON ACCOUNT OF INTEREST PAYMENTS ON ABOVE CASH CREDITS CANNOT BE SUSTAINED. THE GROUNDS OF T HE APPEAL RAISED BY THE APPELLANT ARE A//OWED.....' THE FACTS OF PRESENT APPEAL ARE IDENTICAL TO THE FA CTS EXISTING IN THE CASE OF PURANMAL SHAH, HUF SUPRA. CONSEQUENTLY, IN VIEW OF ABOVE DECISION INCLUDING THAT OF HON'BLE JURISDICTIONAL TRIBUNAL D ATED 24-8-2012 SUPRA, IT IS HELD THAT THE ACTION OF THE A O IN MAKING THE ADDIT ION OF RS. 91,50,000/- AS CASH CREDITS U/S. 68 OF THE ACT AND OF RS. 14,36,36 1/- ON ACCOUNT OF INTEREST PAYMENTS ON ABOVE CASH CREDITS CANNOT BE SUSTAINED. THE GROUNDS OF THE APPEAL RAISED BY THE APPELLANT ARE ALLOWED. 3. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 3.1. BEFORE US, LD.DR SUPPORTED THE ORDER OF AO. L D.AR, ON THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEFORE THE AO & LD.CIT(A) AND FURTHER SUBMITTED THAT ON IDENTICAL FACTS IN ASSESS EES OWN CASE, THE APPEAL OF THE REVENUE FOR AY 2008-09 WAS DISMISSED BY THE TRIBUNAL. HE PLACED ON RECORD THE COPY OF THE TRIBUNAL ORDER DATED 24/08/2012 PASSED IN ITA NO.3270/AHD/2012 FOR AY 2008-09. T HE LD.AR FURTHER SUBMITTED THAT ON IDENTICAL FACTS FOR AY 2008-09 IN THE CASE OF ITO VS. M/S.SYNWAVE INDUSTRIES AND IN THE CASE OF ITO VS. M/S.SINHAL BROTHERS ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 10 - IN ITA NO.368/AHD/2012 & 369/AHD/2012 RESPECTIVELY ORDER DATED 16/02/2016, THE COORDINATE BENCH OF TRIBUNAL (ITAT D BENCH AHMEDABAD) DISMISSED THE APPEAL OF THE REVENUE. HE PLACED ON RECORD THE COPIES OF AFORESAID ORDERS. HE THUS SUPPORTED THE ORDER OF LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITI ON U/S.68 OF THE ACT AND THE INTEREST ON THE AMOUNT OF ADDITION MADE TO UNSE CURED LOANS. WE FIND THAT LD.CIT(A) WHILE DELETING THE ADDITION HAD RELI ED ON THE DECISION OF M/S.PURANMAL SHAH HUF PASSED FOR AY 2009-10 (ORDER DATED 16/07/2012) WHEREIN RELIANCE WAS PLACED IN THE CASE OF M/S.SYNWAVE INDUSTRIES. WE FIND THAT AGAINST THE ORDER OF LD.C IT(A) REVENUE IN THE CASE OF SYNWAVE INDUSTRIES HAD CARRIED THE MATTER B EFORE THE COORDINATE BENCH OF TRIBUNAL. THE COORDINATE BENCH OF TRIBUNA L VIDE ORDER DATED 16/02/16 HAD DISMISSED THE APPEAL OF THE REVENUE BY HOLDING AS UNDER:- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPE CT TO ADDITION MADE U/S 68 OF THE ACT. WE FIND THAT THE ADDITION HAS B EEN MADE BY THE A.O. BY MAINLY RELYING ON THE STATEMENT OF SHRI RAMDINE SH SHARMA WHICH WAS RECORDED DURING THE COURSE OF SURVEY CONDUCTED IN THE CASE OF LALITKUMAR SHARMA AND ORS. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT MATERIAL COLLECTED AT THE T IME OF SURVEY IN CASE OF LALITKUMAR SHARMA WAS NOT MADE AVAILABLE TO ASSE SSEE, ASSESSEE WAS NOT ALLOWED TO BE CROSS EXAMINE THE PARTIES AND ASSESSEE WAS ALSO NOT GRANTED ANY OPPORTUNITY TO CROSS EXAMINE SHRI R AMDINESH SHARMA. ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 11 - WE FURTHER FIND THAT SIMILAR ADDITION ON IDENTICAL FACTS WAS MADE IN CASE OF BABULAL RAMPRASAD AGARWAL (HUF) (SUPRA) WHEREIN THE CO-ORDINATE BENCH OF TRIBUNAL DELETED THE ADDITION BY HOLDING A S UNDER:- 6. WE HAVE HEARD BOTH THE SIDES. WE HAVE NOTED THA T THE MAIN REASON OF THE IMPUGNED ADDITION IN THE HANDS OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 68 WAS A STATEME NT OF ONE SHRI RAMDINESH RANJIT SHARMA. UNDISPUTEDLY THAT STATEMEN T WAS RECORDED DURING THE SURVEY PROCEEDINGS WHICH WERE CONDUCTED U/S. 133A ON 31.08.2009 ON ONE SRI LALIT S. SHARMA. DURING THE S URVEY PROCEEDINGS, STATEMENT OF SRI RAMDINESH RANJIT SHAR MA WAS RECORDED WHO HAS GIVEN A LONG LIST OF THE PARTIES AND INFORM ED THAT THE ACCOUNTS OF THOSE PARTIES HAVE BEEN MANAGED AND THE LOAN ENT RIES WERE PROVIDED BY HIM. IN THAT LIST, THERE WERE NAMES OF THE FIVE DEPOSITORS WHO HAVE ADVANCED LOAN TO THE ASSESSEE; THE AMOUNTS AS LISTED ABOVE. SO, THE QUESTION WAS THAT THE IMPUGNED ADDITION U/S .68 WAS CORRECTLY MADE IN THE HANDS OF THE ASSESSEE BY PLACING RELIAN CE ON A STATEMENT WHICH WAS RECORDED OF A PERSON DURING THE SURVEY PR OCEEDINGS HELD IN THE CASE OF AN ANOTHER PERSON. THIS QUESTION WAS DU LY ADDRESSED BY THE RESPECTED CO-ORDINATE BENCH IN THE CASE OF SRI AMIT KUMAR S. AGARWAL, RELEVANT PARAGRAPHS REPRODUCED SUPRA. AT T HIS JUNCTURE, IT IS WORTH TO MENTION THAT IN THE CASE OF AMIT KUMAR S. AGARWAL (SUPRA) ALMOST ON IDENTICAL SITUATION THE PROVISIONS OF SEC TION 68 WERE INVOKED AND THE AO HAD MADE THE ADDITION. IN THAT CASE AS W ELL THE PROCEEDINGS WERE INITIATED ON THE BASIS OF THE STAT EMENT OF SRI RAMDINESH RANJIT SHARMA. THAT STATEMENT WAS RECORDE D CONSEQUENCES UPON A SURVEY CONDUCTED ON SRI LALIT S. SHARMA, AS DISCUSSED BY THE AO IN THE APPEAL IN HAND. IN SHORT, WE CAN CONCLUDE THAT ON IDENTICAL FACTS AND CIRCUMSTANCES WHEN A VIEW HAS BEEN TAKEN IN ASSESSEE'S FAVOUR THEN THERE IS NO OCCASION TO DEPART FROM THA T VIEW BUT TO FOLLOW THE SAME. MOREOVER, WE HAVE NOTED THAT THE ASSESSEE HAS DULY DISCHARGED HIS PRIMARY ONUS OF PLACING ON RECORD TH E CONFIRMATION LETTERS, PAN DETAILS, CHEQUE DETAILS, BANK TRANSACT IONS THROUGH WHICH THE LOANS TAKEN. THE ASSESSEE HAS INFORMED THAT THO SE PARTIES WERE EXISTING TAX PAYERS. IMPORTANTLY, IT HAS ALSO BEEN INFORMED THAT THE INTEREST WAS PAID TO THOSE PARTIES BY THE ASSESSEE AND THE TDS WAS DEDUCTED. FURTHER THE LOANS WERE REPAID IN A SUBSEQ UENT YEARS THROUGH CITY BANK TRANSACTION. UNDER THE TOTALITY O F THE FACTS AND CIRCUMSTANCES OF THE CASE, WE THEREFORE UPHOLD THE VIEW OF LEARNED CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 12 - 5.1 BEFORE US, REVENUE HAS NOT POINTED OUT ANY DIST INGUISHING FEATURE IN THE FACTS OF THE PRESENT CASE AND THAT O F BABULAL RAMPRASAD AGRAWAL (HUF) (SUPRA) NOR HAS POINT OUT ANY FALLAC Y IN THE FINDINGS OF LD. CIT(A) . IN VIEW OF THE AFORESAID FACTS, WE FI ND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THI S GROUND OF REVENUE IS DISMISSED. 5. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL O N RECORD TO POINT OUT ANY DISTINCTIVE FEATURE IN THE PRESENT CASE AND THAT OF SYNWAVE INDUSTRIES NOR HAS PLACED ANY MATERIAL ON RECORD TO SHOW THAT THE DECISION IN THE CASE OF SYNWAVE INDUSTRIES WHERE THE ISSUE W AS IDENTICAL, HAS BEEN SET ASIDE BY HIGHER JUDICIAL FORUM. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CI T(A). FURTHER SINCE THE QUANTUM ITSELF HAS BEEN DECIDING IN FAVOUR OF THE A SSESSEE THE QUESTION OF DISALLOWANCE OF INTEREST ON THE AFORESAID LOAN DOES NOT ARISE. THUS, BOTH THE GROUNDS OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29/08/2016 SD/- SD/- () () (RAJPAL YADAV) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 29/ 08 /2016 3..,.../ T.C. NAIR, SR. PS ITA NO.607/AHD/ 2013 DCIT VS. M/S.MUKESHKUMAR & CO. ASST.YEAR 2009-10 - 13 - !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-XVI, AHMEDABAD 5. 89:'56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<=+ / GUARD FILE. / BY ORDER, (8' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 4/8.8.16 (DICTATION-PAD 8 -PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.8.16/18.8.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.29.8.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.8.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER