M/s Unitech Cables, Solan V. ITO, Baddi

ITA 68/CHANDI/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9813 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Question of law; Accommodation entries; Onus to prove
• Section: 260A; 6; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 68/CHD/2014 ASSESSMENT YEAR: 2010-11 M/S UNITECH CABLES, VS. THE ITO, BADDI VILL MANPURA, H.P. DISTT. SOLAN (H.P.) PAN NO. AABFU9616M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 23.06.2015 DATE OF PRONOUNCEMENT : 03/07/2015 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.10.2013 OF CIT(A), SHIMLA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- THE LD. CIT(A) IS WRONG IN CONFIRMING THE ADDITIONS OF RS. 5,00,000/- U/S 68 ON ACCOUNT OF UNSECURED LOAN TAK EN FROM SH. CHAMPA LAL BAID AS THE ASSESSEE HAD SUBMITTED THE C OMPLETE DETAILS WHICH SHOW THE GENUINENESS OF SH. CHAMPA LA L BAID. 2. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ADDITI ONS OF RS. 2,50,000 U/S 68 ON ACCOUNT OF UNSECURED LOAN TAKEN FROM SH. PARKASH JOSHI AS THE ASSESSEE HAD SUBMITTED THE COM PLETE DETAILS WHICH SHOW THE GENUINENESS OF SH. PARKASH J OSHI. 3. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ADDITI ONS OF RS. 2,50,000 U/S 68 ON ACCOUNT OF UNSECURED LOAN TAKEN FROM SMT. CHANDRA KANTA JOSHI AS THE ASSESSEE HAD SUBMITTED T HE 2 COMPLETE DETAILS WHICH SHOW THE GENUINENESS OF SMT. CHANDRA KANTA JOSHI. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS TAK EN UNSECURED LOANS FROM VARIOUS PARTIES. THE ASSESSEE WAS REQUESTED TO FILE THE CON FIRMATION ETC. WHICH WAS DULY FILED. THE ASSESSING OFFICER ULTIMATELY MADE ADDITI ON IN RESPECT OF THREE PARTIES WHICH ARE AS UNDER:- S.NO. NAME OF THE PERSON FROM WHOM UNSECURED LOAN RAISED DURING THE YEAR AMOUNT OF LOAN RAISED 1. SH. CHAMPA LAL BAID RS. 5,00,000/- 2. SMT. CHANDRA KANTA JOSHI RS. 2,50,000/- 3. SH. PRAKASH JOSHI RS. 2,50,000/- 4. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANA TION JUSTIFYING THE ABOVE LOANS AND OBSERVED AS UNDER:- ALTHOUGH THE ASSESSEE HAS FURNISHED THE DOCUMENTS RELATING TO THE IDENTITY OF THE CREDITORS BUT FAILED TO PROVE T HE GENUINENESS OF THE TRANSACTION AND ALSO THE MEANS OF THE PERSON S WHO CAN ADVANCE LOANS. MERELY PROVING THE GENUINENESS, PAYM ENT BY CHEQUE DOES NOT PROVE THAT THE PERSON WHO HAS ADVAN CED LOAN IS A MAN OF MEANS AS IN MOST OF THE CASES THE PERUSAL OF THE DOCUMENTS SUBMITTED REVEALS THAT EITHER CASH HAS BE EN DEPOSITED BEFORE ISSUE OF CHEQUE OR THERE IS A TRANSFER CREDI T ENTRY IN THE BANK ACCOUNT BEFORE ISSUE OF CHEQUE TO THE ASSESSEE FIRM. IN SOME CASES, THE ASSESSEE HAS ALSO SUBMITTED FINAL A CCOUNTS OF THE PERSONS FROM WHOM UNSECURED LOANS HAVE BEEN TAK EN. THE PERUSAL OF THESE ACCOUNTS ALSO REVEALS THAT A PERSO N OF MERELY SALARY OF RS. 48,000/- PER ANNUM HAS ADVANCED A LOA N OF RS. 5,00,000/- TO THE ASSESSEE FIRM. ALTHOUGH THE ASSES SE FIRM HAS CREDITED INTEREST ON THE UNSECURED LOANS BUT HAS NO T DEDUCTED TAX AT SOURCE BY EXPLAINING THAT THE FIRM WAS IN RE CEIPT OF DECLARATION UNDER SECTION 197A OF THE INCOME-TAX AC T, 1961 IN FORM NO. 15G/15H, WHICH CLEARLY MEANS THAT THE PERS ONS THOSE WHO HAVE ADVANCED LOAN ARE NOT HAVING TAXABLE INCOM E THAT IS WHY THEY HAVE FURNISHED DECLARATION UNDER SECTION 1 97A, WHICH CLEARLY MEANS THAT THEY ARE NOT IN THE CAPACITY TO ADVANCE HUGE UNSECURED LOANS. THIS VIEW IS FURTHER STRENGTHENED WITH THE FACT 3 THAT IN SPITE OF REPEATED REQUESTS, SHOW-CAUSE ISSU ED, THE ASSESSEE FAILED TO PROVE THE CREDITWORTHINESS OF TH E CREDITORS AND ALSO TO PRODUCE THEM FOR VERIFICATION OF GENUIN ENESS OF THE TRANSACTION. FROM THE ABOVE DISCUSSION, IT IS HELD THAT IT IS NOTHING BUT ASSESSEEES OWN MONEY INTRODUCED IN THE BOOKS OF ACCOUNTS IN THE SHAPE OF BOGUS UNSECURED LOANS RAIS ED THROUGH THESE PERSONS UNDER SECTION 68 OF THE INCOME-TAX AC T. 1961. THE AMOUNT OF RS. 10,00,000/-(RS. TEN LAKH) SHOWN AS UN SECURED LOANS ARE TREATED AS BOGUS CREDITORS UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 AND ADDED BACK TO THE TOTAL IN COME OF THE ASSESSEE BY TREATING THE SAME AS UNEXPLAINED CASH C REDITORS ON WHICH NO DEDUCTION UNDER SECTION 80IC OF THE INCOME -TAX ACT, 1961 SHALL BE ALLOWED, SINCE THE ASSESSEE HAS FAILE D TO DISCHARGE HIS DUTY TO PROVE THE GENUINENESS, CREDIT WORTHINESS OF THE CREDITORS. THE ONUS IS UPON THE ASSESSEE TO PRO VE THE GENUINENESS OF THE TRANSACTION / CREDITWORTHINESS. RELIANCE IS PLACE ON THE FOLLOWING CASE LAWS: 1) BANARSI PRASAD VS. CIT (2008) 304-ITR-239 (ALL) 2) SHIV RICE AND GENERAL MILLS VS. CIT (2008)301-ITR-1 9 (PB.&HAR.) 3) CIT VS. BIJU PATNAIK 160-ITR-674 (SC) 4) CIT VS. UNITED COMMERCIAL AND INDL . CO. (P) LTD. 1 87-ITR- 596(CAL) 5) INDUS VALLEY PROMOTERS (P) LTD. VS. CIT (2008)305-I TR-202 5. BEFORE CIT(A), IT WAS MAINLY CONTENDED THAT COPY OF THE RETURN, BANK ACCOUNT, STATEMENT AND AFFIDAVITS OF THE CONCERNED PERSONS WERE FILED BEFORE THE ASSESSING OFFICER. THESE DOCUMENTS CLEARLY PROVE TH AT ASSESSEE HAS PROVED THE IDENTITY OF HIS CREDITORS, GENUINENESS OF TRANSACTI ONS AND CREDITWORTHINESS OF THE CREDITORS. RELIANCE WAS ALSO PLACED ON THE FOLLOWIN G CASE LAWS:- I) NEMI CHAND KOTHARI V CIT (2003) 24 ITR 254 (GAU. ) II) JALAN TIMBERS V CIT (1997) 223 ITR 1 AND III) CIT V SAHIBGANJ ELECTRIC CABLES (P) LTD (1978) 115 ITR 408 (CAL.) 4 6. THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS D ID NOT FIND FORCE IN THE SAME. ACCORDING TO HIM, MERELY PROVING THE IDENTITY AND PAYMENT BY CHEQUE DOES NOT PROVE THAT PERSON WHO ADVANCED THE LOANS IS A M AN OF MEANS THEREAFTER, HE HAS REPEATED OBSERVATIONS OF THE ASSESSING OFFICER AND CONFIRMED THE ADDITION. 7. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT ALL THE PERSONS FROM WHOM LOANS WERE TAKEN ARE REGULAR INCOME-TAX ASSESS EES AND COPIES OF THEIR RETURNS, PAN NUMBERS, COPIES OF BANK STATEMENTS WER E FILED BEFORE THE ASSESSING OFFICER FURTHER, LOANS HAVE BEEN RETURNED LATER ON THROUGH ACCOUNT PAYEE CHEQUE. THE ASSESSEE HAS ALSO DEDUCTED THE TAX WHEREVER IT WAS APPLICABLE. ONCE THE DEPOSITORS ARE REGULAR INCOME TAX ASSESSES AND ASS ESSEE HAS PROVED THE INITIAL SOURCE THEN REVENUE CANNOT ASK THE SOURCE OF SOURCE AND IN THIS REGARD HE RELIED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF CIT V LAUL TRANSPORT CORPORATION IN IT APPEAL NO. 251 OF 2008 (2009) 180 TAXMAN 185 8. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. IN THE CASE OF LOAN FROM CHAMPA LAL BAID , THE ASSESSEE HAS FILED A COPY OF THE ACKNOWLEDGMEN T OF RETURN, COPY OF THE BANK STATEMENT OF ASSESSEE AS W ELL AS AFFIDAVIT. THE TDS ON INTEREST HAS ALSO BEEN DEDUCTED. THIS PERSON HAS IS SUED A CHEQUE FROM THE BANK ACCOUNT. THE IMMEDIATE SOURCE OF CHEQUE IS RECEIPT OF CHEQUES AMOUNTING TO RS. 7,91,679/- STATED TO BE RECEIPT OF LOAN FROM ANOTH ER PARTY. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V LAUL TRANSPORT CORPORATION (SUPRA) HELD AS UNDER;- INCOME CASH CREDIT GENUINENESS FINDING RECOR DED BY CIT(A) AND THE TRIBUNAL THAT THE ASSESSEE HAS DISCH ARGED ITS ONUS TO PROVE THE GENUINENESS OF CASH CREDITS BY PL ACING ON RECORD SUFFICIENT MATERIAL / EVIDENCE NOT ONLY TH E IDENTITY OF THE CREDITORS HAS BEEN ESTABLISHED, ASSSESSEE HAS A LSO DISCHARGED ITS ONUS OF EXPLAINING THE NATURE OF THE SOURCE OF THE CASH CREDITS FINDING RECORDED BY THE CIT(A) AS WELL AS THE TRI BUNAL AFTER 5 TAKING INTO CONSIDERATION THE MATERIAL AND DOCUMENT S AND APPRECIATING THE EVIDENCE ON RECORD IS A PURE FINDI NG OF FACT WHICH CANNOT BE INTERFERED IN APPEAL UNDER S. 260A - APPELLANT HAVING NOT POINTED OUT ANY ILLEGALITY OR PERVERSITY IN THE SAID FINDING OF FACT THERE IS NO GROUND TO INTERFERE N O QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION OF LAW, ARISE S FROM THE ORDER OF THE TRIBUNAL. 10. IN OUR OPINION, THIS SUM CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE BECAUSE THE DEPOSITOR IS A REGULAR INCOME-TAX ASSES SEE. THE MONEY WAS DEPOSITED IN CHEQUES IN HIS BANK AND THE REVENUE CANNOT INVES TIGATE THE SOURCE OF SOURCE. 11. THE SECOND LOAN WAS TAKEN FROM SHRI PARKASH JOS HI AMOUNTING TO RS. 2,50,000/-. THIS PERSON IS ALSO REGULAR INCOME TAX ASSESSEE, THE OTHER PARTICULARS REMAIN THE SAME AS IN THE CASE OF SHRI CHAMPA LAL B AID . THE RELEVANT PORTION OF THE BANK STATEMENT IS NOT FILED AND THE FIRST ENTRY SHOWS IN THE BANK STATEMENT RELATES TO DEBIT ENTRY IN RESPECT OF CHEQEUS ISSUED TO THE ASSESSEE. WHEN LD. COUNSEL WAS CONFRONTED WITH THIS SITUATION, HE ADMI TTED THAT THIS CHEQUE WAS ISSUED AFTER DEPOSITING CASH. THE RATIO OF DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V LAUL TRANSPORT CORP ORATION (SUPRA) CANNOT BE APPLIED WHERE CHEQUES HAS BEEN ISSUED AFTER DEPOSIT ING THE CASH. THIS ASPECT HAS BEEN DISCUSSED BY US IN DETAIL IN THE CASE OF ACIT VS. EKTA CONSTRUCTION CO. IN ITA NO. 885/CHD/2010 ORDER DATED 23.6.2015. PARAS 3 2 TO 33 AND 38 TO 39 OF THAT ORDER WHICH READS AS UNDER:- 32. THEREFORE, IT IS CLEAR THAT CASE WAS DECIDED O N PECULIAR FACTS BECAUSE REVENUE DID NOT PERUSE THOSE CREDITORS DESPITE THEI R STATEMENT THAT THEY WERE ONLY LENDING THE NAMES PARTICULARLY WHEN THE N AME OF THE ASSESSEE WAS NOT IN THE LIST WHOM THESE PERSONS HAD LENT THEIR N AMES. THE REVENUE DID NOT EXAMINE THE SOURCES OF THOSE CREDITORS. THE FACTS I N THE CASE BEFORE US ARE DIFFERENT WHICH WE WILL SEE LITTLE LATER. IN ANY CA SE WE WOULD LIKE TO OBSERVE THAT LAW IS NOT STATIC AND LOT OF DEVELOPMENTS HAVE TAKEN PLACE IN RESPECT OF INTERPRETATION SECTION 68. THE ISSUE REGARDING SEC TION 68 WAS DISCUSSED IN DETAIL BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT V P. MOHANKALA 291 ITR 278 WHEREIN IT WAS OBSERVED THAT HUMAN PROBABI LITIES HAVE TO BE KEPT IN VIEW BEFORE ACCEPTING THE EXPLANATION IN RESPECT OF CASH CREDITORS U/S 68. 6 THE RELEVANT OBSERVATIONS HAVE BEEN MADE AT PARAS 1 5 TO 18, WHICH ARE AS UNDER:- 15. IN ORDER TO APPRECIATE THE CONTENTIONS URGED B EFORE US IT WOULD BE APPROPRIATE TO NOTICE SECTION 68 OF THE AC T WHICH IS RE-PRODUCED : '68. CASH CREDITS.WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOU S YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER , SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME- TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR.' 16. THE QUESTION IS WHAT IS THE TRUE NATURE AND SCO PE OF SECTION 68 OF THE ACT? WHEN AND IN WHAT CIRCUMSTANCES WOULD SECTION 68 OF THE ACT COME INTO PLAY ? A BARE READING OF SE CTION 68 SUGGESTS THAT THERE HAS TO BE CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY AN ASSESSEE ; SUCH CREDIT HAS TO BE O F A SUM DURING THE PREVIOUS YEAR ; AND THE ASSESSEES OFFER NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CRE DIT FOUND IN THE BOOKS ; OR THE EXPLANATION OFFERED BY THE AS SESSEES IN THE OPINION OF THE ASSESSING OFFICER IS NOT SATISFA CTORY, IT IS ONLY THEN THE SUM SO CREDITED MAY BE CHARGED TO INC OME-TAX AS THE INCOME OF THE ASSESSEES OF THAT PREVIOUS YEAR. THE EXPRESSION 'THE ASSESSEES OFFER NO EXPLANATION' MEA NS WHERE THE ASSESSEES OFFER NO PROPER, REASONABLE AND ACCEP TABLE EXPLANATION AS REGARDS THE SUMS FOUND CREDITED IN T HE BOOKS MAINTAINED BY THE ASSESSEES. IT IS TRUE THE OPINION OF THE ASSESSING OFFICER FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEES AS NOT SATISFACTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABLE ON RECORD. THE OPINION OF T HE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIV ELY WITH REFERENCE TO THE MATERIAL AVAILABLE ON RECORD. APPL ICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. 17. IN SUMATI DAYAL V. CIT [1995] 214 ITR 801 (SC) ; [1995] SUPP 2 SCC 453 THIS COURT HELD : 'IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TA XED AS INCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PRO VIDED BY THE ACT LIES UPON THE ASSESSEE. BUT, IN VIEW OF SEC TION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR THE SAME MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF 7 THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY TH E ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH A CASE THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, AND IF HE FAI LS TO REBUT, THE SAID EVIDENCE BEING UNREBUTTED, CAN BE U SED AGAINST HIM BY HOLDING THAT IT WAS A RECEIPT OF AN INCOME NATURE.' 18. IN THAT CASE THE AMOUNT WAS CREDITED IN THE CAP ITAL ACCOUNT IN THE BOOKS AND THE ASSESSEE OFFERED HER EXPLANATI ON ABOUT THE SAID RECEIPT BEING HER WINNINGS FROM HORSE RACES. T HE EXPLANATION WAS NOT ACCEPTED. THERE WAS NO DISPUTE THAT THE AMOUNT WAS RECEIVED BY THE ASSESSEE FROM VARIOUS RA CE CLUBS ON THE BASIS OF WINNING TICKETS PRESENTED BY HER. T HIS COURT BASED ON THE MATERIAL AVAILABLE ON RECORD FOUND THA T AN INFERENCE ABOUT SUCH A PURCHASE HAS TO BE DRAWN ON THE BASIS OF THE CIRCUMSTANCES AVAILABLE ON RECORD INASMUCH A S NO DIRECT EVIDENCE ABOUT SUCH PURCHASE WOULD BE RARELY AVAILA BLE. THIS COURT ACCORDINGLY UPHELD THE MAJORITY OPINION OF TH E SETTLEMENT COMMISSION BASED ON SURROUNDING CIRCUMST ANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES. THIS AUTHORITATIVE PRONOUNCEMENT IN OUR CONSIDERED OPINI ON IS THE COMPLETE ANSWER TO REJECT THE SUBMISSIONS MADE BY T HE LEARNED SENIOR COUNSEL ON BEHALF OF THE RESPONDENTS. 33. THEREFORE, IT IS CLEAR THAT WHEREVER THE ASSESSEE HAS FURNISHED AN EXPLANATION THEN ASSESSING OFFICER HAS TO GIVE REA SON FOR NOT ACCEPTING THE SAME. 38. IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFOR E HON'BLE GUJARAT HIGH COURT IN THE CASE OF BLESSING CONSTRUCTION V I TO 32 TAXMAN. COM 366 (GUJRAT). IN THIS CASE ALSO A LOAN OF RS. 1 LAKH WA S GIVEN AFTER DEPOSITING THE SAME IN CASH. IN THAT CASE ALSO, IT WAS MAINLY CONT ENDED THAT REVENUE HAS NO AUTHORITY TO EXAMINE THE SOURCE OF SOURCE. THE HON' BLE COURT AFTER CONSIDERING THESE SUBMISSIONS AT PARA 7 OBSERVED AS UNDER:- 7. WITH RESPECT TO THE LEGAL CONTENTION THAT THE R EVENUE CANNOT INSIST ON ASSESSEE SUPPLYING THE SOURCE OF S OURCE IS IMPECCABLE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE VASTLY DIFFERENT. IT IS OF-COURSE TRUE THAT SOME OF THE OB SERVATIONS MADE BY THE TRIBUNAL MAY SUGGEST THAT THE TRIBUNAL DID CONCERN ITSELF WITH THE SOURCE OF THE SOURCE. HOWEVER, SUCH OBSERVATIONS CANNOT BE PICKED IN ISOLATION AS TO TREAT THAT AS T HE CONCLUSION OF THE TRIBUNAL. WHEN ONE READS THE_ ORDER OF THE A SSESSING OFFICER THAT THE COMMISSIONER (APPEALS)) AND ALSO O F THE TRIBUNAL INESCAPABLE CONCLUSION ONE ARRIVES AT IS T HAT THE REVENUE AUTHORITIES AS WELL AS THE TRIBUNAL FOUND T HE ENTIRE TRANSACTION NOT GENUINE. THERE WAS SUFFICIENT EVID ENCE ON 8 RECORD TO SUGGEST THAT IN CASE OF ALL THE DEPOSITOR S, THEIR BANK ACCOUNTS CONTAINED MEAGER BALANCE SHORTLY BEFORE SI ZABLE AMOUNT OF RS. 1 LAKH AND UPWARD WERE GIVEN TO THE A SSESSEE THROUGH SUCH ACCOUNT. IN SUCH BANK ACCOUNTS CASH A MOUNTS WERE CREDITED AND IMMEDIATELY ENTIRE AMOUNTS WERE W ITHDRAWN THROUGH ISSUANCE OF SUCH CHEQUES IN FAVOUR OF THE A SSESSEE. IT WAS NOTICED THAT SUCH CREDITORS DID NOT MAINTAIN AN Y BOOKS OF ACCOUNT. NOWHERE THEIR CAPACITY TO RAISE SUCH AMOU NT FOR DRAWING CHEQUE OF SIZABLE AMOUNTS WAS ESTABLISHED. IN SHORT, THEREFORE, THE V VERY GENUINENESS OF THE TRANSACTIO N WAS NOT ESTABLISHED. THIS, THEREFORE, IS NOT A CASE WHERE T HE REVENUE MAKES ADDITION ON THE ASSESSEE FAILING TO ESTABLISH SOURCE OF THE SOURCE. ALL ISSUES ARE ESSENTIALLY BASED ON FACTS A ND APPRECIATION OF EVIDENCE ON RECORD. NO QUESTION OF LAW ARISES. TAX APPEAL IS DISMISSED. 39. SIMILAR ISSUE AROSE IN THE CASE OF SMT. SUMAN G UPTA V CIT (ITA NO. 680 OF 2012). IN THAT CASE ALSO THE DECISION OF CI T VS. ORISSA CORPORATION P. LTD CIT V ORRISA (SUPRA) WAS RELIED ON. THE HON 'BLE COURT MADE THE FOLLOWING OBSERVATIONS AT PAGE 6 TO 8 WHICH ARE AS UNDER:- 6. IN THE PRESENT CASE, WE FIND THAT AFTER THE INI TIAL BURDEN WAS DISCHARGED BY THE APPELLANT-ASSESSEE, THE AO DID NO T ACCEPT THE APPLICATION TO SUMMON THE CREDITORS AND PROCEEDED T O EXAMINE THE RECORDS NAMELY THE BANK ACCOUNTS TO FIND OUT WH ETHER THE UNSECURED LOAN TRANSACTIONS WERE GENUINE. HE CONSID ERED EACH AND EVERY LOAN TRANSACTION AND FOUND THAT NONE OF T HE INDIVIDUAL UNSECURED CREDITORS COULD BE SAID TO BE CREDITWORTH Y TO ADVANCE LOANS FOR SUCH AMOUNTS. THE OBSERVATIONS MADE BY TH E AO DISCUSSED BY THE ITAT ARE RE-PRODUCED AS FOLLOWS:- '9.1 THE AO DISCUSSED EACH AND EVERY CREDITOR IN TH E ASSESSMENT ORDER AND THE CRUX OF THE FINDINGS OF TH E AO HAD BEEN THAT THERE WERE VERY SMALL BANK BALANCES I N THE BANK ACCOUNTS OF THE CREDITORS AND THEY WERE HAVING MEAGER INCOME AND AS SUCH, THEY WERE NOT MEN OF MEA NS TO ADVANCE ANY LOAN TO THE ASSESSEE. IN THE CASE OF AB HAY MAHESHWARI, THERE WAS VERY SMALL BALANCE OF RS. 352 8/- IN HIS BANK ACCOUNT. HE WAS EXAMINED ON OATH AND HE WA S NOT ABLE TO GIVE SOURCE OF CASH DEPOSIT TO THE SATISFAC TION OF THE AO. HE WAS EARNING HARDLY ONE LAC RUPEES AND SP ENT 40,000/- TO 50, 000/- FOR HOUSEHOLD PURPOSES. DURIN G HIS EXAMINATION ON OATH, HE WAS NOT ABLE TO SATISFACTOR ILY EXPLAIN THE AVAILABILITY OF FUNDS WITH HIM FOR GIVI NG LOAN TO THE ASSESSEE. IN HIS CASE, HE HAS FILED RETURN OF I NCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS. 1, 02, 850/ - (PB- 60). IN THE CASE OF SHRI AMIT MAHESHWARI, HE WAS AL SO HAVING SMALL BANK BALANCE OF RS. 2429/- BEFORE ISSU E OF CHEQUE TO THE ASSESSEE AND EQUAL AMOUNT OF THE CASH CREDIT 9 WAS DEPOSITED IN THE BANK ACCOUNT. HE HAS FILED RET URN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS. 44972/- (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 AMOU NT OF CASH CREDIT WAS DEPOSITED FOR THE PURPOSE OF ISSUE OF CHEQUE IN FAVOUR OF THE ASSESSEE. FOR THE ASSESSMEN T YEAR UNDER APPEAL, SHE HAS FILED RETURN OF INCOME AT RS. 1, 01,000/- ONLY. IN THE CASE OF SMT. MITHLESH MAHESHW ARI, THE BANK BALANCE BEFORE ISSUE OF CHEQUE WAS RS. 10, 794/- AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED IN HER BANK ACCOUNT FOR ISSUE OF CHEQUE IN FAVOUR OF ASSES SEE. FOR ASSESSMENT YEAR UNDER APPEAL, SHE FILED RETURN OF I NCOME AT RS. 1, 02, 476/- ONLY. IN THE CASE OF SH. RAMPAL SI NGH, IT IS ALREADY NOTED ABOVE THAT THE DEPOSIT ENTRY IN HIS C ASE IS NOT EXPLAINED AND PRIOR TO ISSUE OF CHEQUE, THERE W AS BANK BALANCE OF RS. 3708/- ONLY. HE HAS FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AT LOSS WITH AGRICULTURAL INCOME (PB-102). IN THE CASE OF SHRI S HARIQ ALI KHAN, THE BANK BALANCE IN HIS ACCOUNT WAS RS. 1 055/- PRIOR TO ISSUE OF CHEQUE AND EQUIVALENT CASH AMOUNT WAS DEPOSITED FOR ISSUING CHEQUE IN FAVOUR OF THE ASSES SEE. HE HAS FILED RETURN OF INCOME AT RS. 70,373/- PLUS AGR ICULTURAL INCOME (PB-116). THESE DETAILS NOTED IN THE ASSESSM ENT ORDER AND THE DETAILS VERIFIED FROM THE PAPER BOOK WOULD CLEARLY SUPPORT THE FINDINGS OF THE AO THAT NONE OF THE CREDITORS WERE PERSONS OF SUFFICIENT MEANS TO ADVAN CE ANY LOAN TO THE ASSESSEE. FILING OF BALANCE SHEETS, CASH FLOW STATEMENTS, CASH BOOKS ETC. HAVE NO EVIDENTIARY VALUE BECAUSE ACCORDING TO THE REMAND R EPORT FILED BY THE AO, THOSE DOCUMENTS WERE NOT FILED WIT H THE RETURN OF INCOME. MOREOVER, NO REGULAR BOOKS OF ACC OUNT HAVE BEEN MAINTAINED BY ANY OF THE CREDITORS AND MA JORITY OF THEM HAVE SHOWN ESTIMATED INCOME IN THEIR RETURN S OF INCOME. THEREFORE, SUCH BALANCE SHEET, CASH FLOW STATEMENTS ETC. WOULD NOT SUPPORT THE CONTENTION OF THE ASSESSEE THAT GENINE CREDITS HAVE BEEN RECEIVED. TH E ORDER SHEET NOTED BY THE AO WOULD ALSO SHOW THAT THE ASSE SSEE HAS MADE NO EFFORTS TO PRODUCE THE REMAINING CREDIT ORS BEFORE THE AO. EVEN IN THE STATEMENT OF ONE OF THE CREDITORS RECORDED BY THE AO, SHRI AMBHAY MAHESHWARI, HE WAS NOT ABLE TO EXPLAIN HIS SOURCE OF DEPOSIT OR ADVANCING LOAN TO THE ASSESSEE THROUGH GENUINE SOURCE. IT IS WELL SET TLED LAW THAT BURDEN IS UPON THE ASSESSEE TO PROVE INGREDIEN TS OF SECTION 68 OF THE ACT BY PROVING IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTIONS. THE ASSESSEE HAS, HOWEVER, FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVI NG ONLY MEAGER INCOME. NO DETAILS OF THEIR SAVINGS HAVE BEE N FILED. 10 THE ASSESSEE HAS NEVER SHOWN HIS WILLINGNESS TO PRO DUCE THE REMAINING CREDITORS FOR EXAMINATION BEFORE THE AO. THEREFORE, THE GENUINENESS OF THE TRANSACTION COULD NOT HAVE BEEN EXAMINED BY THE AO. THE SMALLNESS OF THE BANK BALANCE IN THE BANK ACCOUNTS OF THE CREDITORS PRIOR TO ISSUE OF CHEQUES WOULD CLEARLY REVEAL THAT THEY WERE NOT HAVING ANY SOURCE AND IT WAS THE MONEY OF THE ASSESSEE WHI CH WAS ROUTED THROUGH THE BANK ACCOUNTS OF THE CREDITORS F OR THE PURPOSE OF GIVING CREDITS TO THE ASSESSEE. THESE WE RE, THEREFORE, ACCOMMODATION ENTRIES ONLY AND AS SUCH, COULD NOT BE CONSIDERED AS GENUINE TRANSACTIONS. MERELY B ECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKING CHANNE L, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GENUINE TRANSACTION.' 7. WE DO NOT FIND THAT THE AO FAILED TO EXERCISE HI S JURISDICTION IN REFUSING TO SUMMON THE FILE OF UNSECURED CREDITORS OTHER THAN SHRI ABHAY MAHESHWARI, WHO HAD APPEARED AND WAS EXA MINED. WE ALSO DO NOT FIND THAT THE AO HAS COMMITTED ANY E RROR IN EXAMINING THE ACCOUNT BOOKS. NONE OF THE CREDITORS UNDER EXAMINATION COULD PROVE THEIR CREDITWORTHINESS. EAC H ONE OF THEM HAD A VERY SMALL BANK BALANCE OF A FEW THOUSAN D RUPEES ONLY AND THAT IN ALL THE CASES THE ENTIRE SUM GIVEN AS UNSECURED LOAN WAS DEPOSITED ON THE SAME DAY, WHEN IT WAS ADV ANCED TO THE ASSESSEE-APPELLANT. 8. WE DO NOT FIND THAT ANY OF THE SUBSTANTIAL QUEST IONS OF LAW FRAMED BY THE APPELLANT ARISES FOR CONSIDERATION OF THE COURT. THE FINDINGS RECORDED BY THE AO ABOUT THE CREDITWOR THINESS OF THE UNSECURED LOANS OF RS. 13, 00, 000/- AS AGAINST THE TOTAL UNSECURED LOANS OF RS. 78, 75, 249/-, DOES NOT SUFF ER FROM ANY ERROR OF LAW. 9. THE INCOME TAX APPEAL IS DISMISSED. THEREFORE, ONUS WAS ON THE ASSESSEE TO PROVE THE CR EDITWORTHINESS OF THE DEPOSITOR WHICH HAS NOT BEEN DISCHARGED. THE ASSESS ING OFFICER AFTER HAVING POINTED OUT THAT CASH WAS DEPOSITED BEFORE GIVING L OANS TO THE ASSESSEE BY ALMOST ALL DEPOSITORS, STILL THE LD. CIT(A) DID NOT SCRUTINIZE THE BANK ACCOUNT OR BOTHERED TO ASK THE ASSESSEE TO PRESENT THESE CREDITORS AND ALLOWED THE RELIEF WHICH, IN OUR OPINION, IS NOT CO RRECT. AS WE HAVE DISCUSSED ONLY FEW ACCOUNTS ABOVE, WHILE GIVING EXA MPLE BUT WE HAVE PERUSED THE BANK ACCOUNT OF ALL THE PARTIES AND WE FIND MERIT IN ONE CASE I.E IN THE CASE OF JATINDER SHAH FROM WHOM LOAN OF RS. 1 LAKH WAS TAKEN. IN THAT CASE A SUM OF RS. 68,645/- IS STATED TO HAVE B EEN RECEIVED FROM M/S D.K BROTHERS, DHURI AND ONLY AN AMOUNT OF RS. 31,50 0/- WAS DEPOSITED, THEREFORE, CREDITWORTHINESS IN THIS CASE CAN BE SA ID TO HAVE BEEN PROVED. IN THE LIGHT OF THE ABOVE DISCUSSION WE CONFIRM THE ORDER OF LD. CIT(A) FOR DELETING THE ADDITION ONLY IN THE CASE OF SHRI JITE NDER SHAH FOR RS. 1 LAKH. HIS ORDER FOR DELETING CREDITS IN THE NAME OF OTHER NINE PARTIES TO THE EXTENT 11 OF RS. 24 LAKHS IS SET ASIDE AND THE ORDER OF THE A SSESSING OFFICER IS RESTORED TO THIS EXTENT. THEREFORE, CLEARLY THE ONUS TO PROVE THE CREDITWORT HINESS OF DEPOSITOR WAS ON THE ASSESSEE WHICH HAS NOT BEEN PROPERLY DISCHARGED. IN THIS BACKGROUND, IN OUR OPINION, THE LOAN FROM SHRI PARKASH JOSHI CANNOT B E ACCEPTED. 12. SIMILARLY IN RESPECT OF LOAN FROM SHRI CHANDRA KANTA JOSHI, A SUM OF RS. 40,000/- WAS DEPOSITED BY HIM IN CASH IMMEDIATELY B EFORE GIVING OF LOAN. THERE IS ANOTHER ENTRY OF RS. 2,40,000/- FOR WHICH NO EXPLAN ATION WAS GIVEN BEFORE US DESPITE OUR QUERIES. THEREFORE, IN OUR OPINION CRED ITWORTHINESS IN THIS CASE IS ALSO NOT BEEN PROVED AND, THEREFORE, THIS LOAN IS ALSO N OT ACCEPTED. IN CONCLUSION, IN OUR OPINION, IF THE LOAN OF RS. 5 LAKHS FROM SHRI CHAMPA LAL BAID SHOULD HAVE BEEN ACCEPTED AND OTHER TWO LOANS ARE REQUIRED TO BE ADDED TO THE INCOME OF THE ASSESSEE. IN THIS BACKGROUND, WE UPHOLD THE ORDER O F LD. CIT(A) IN RESPECT OF PARKASH JOSHI AND SHRI CHANDRA KANTA JOSHI AND CONFIRM THE ADDITI ON ON ACCOUNT OF LOAN FOR RS. 2,50,000/- EACH. HOWEVER, WE SET A SIDE THE ORDER OF LD. CIT(A) PARTLY BY DELEING THE ADDITION OF RS. 5 LAKHS IN TH E CASE OF CHAMPA LAL BAID. 13. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/07/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3 RD JULY, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR