B.Govinda Rajulu, Kotabommali V. THE ITO, Ward - 2, Srikakulam

ITA 687/VIZ/2013

• Counselvise Citation: 68725314 RSA 2013
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Unexplained cash credit; Salary income; Additional evidence; Question of law; Onus to prove
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI SAKTIJIT DEY, JM ITA NO.687/VIZAG/2013 : ASST.YEAR 2009-2010 SRI B.GOVINDARAJULU D/NO.9-07-70, VYSYA STREET KOTAMBOMMALI, SRIKAKULAM DISTRICT PAN : AIFPB8970K. VS. THE INCOME TAX OFFICER WARD 2 SRIKAKULAM. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.V.N.HARI RESPONDENT BY : SHRI R.K.SINGH, ADDL.CIT DATE OF HEARING : 27 .02.2014 DATE OF PRONOUNCEMENT : 03 .0 3 .2014 O R D E R PER J.SUDHAKAR REDDY (AM) : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), VISAKHAPATNAM , DATED 25.10.2013. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN I NDIVIDUAL AND HAS FILED HIS RETURN OF INCOME ON 31.03.2009 ADMITTING TOTAL INCO ME OF RS.4,15,690 COMPRISING OF SALARY INCOME AND INCOME FROM OTHER SOURCES. THE AS SESSING OFFICER ADDED AN AMOUNT OF RS.85,00,000 BEING LOAN TAKEN FROM M/S.WO RTH MULTI TRADE CO. AND AN AMOUNT OF RS.5,00,000 BEING LOAN TAKEN FROM MR.R.V. RADHAKRISHNA, ON THE GROUND THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUI NENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE LENDERS. AGGRIEVED, THE ASS ESSEE CARRIED THE MATTER IN APPEAL 3. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESS EE FILED AN ADDITIONAL EVIDENCE. THE LEARNED CIT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER AND THEREAFTER ADMITTED THE ADDITIONAL EVID ENCE. THIS ADMISSION OF ADDITIONAL EVIDENCE IS NOT CHALLENGED BEFORE US. ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 2 4. THE CIT(A), AFTER CONSIDERING VARIOUS SUBMISSION S OF THE ASSESSEE, AS REGARDS THE LOAN OF RS.85 LAKH, IN PARA 4.6 HELD AS FOLLOWS. 4.1 THE AMOUNT IN QUESTION WAS OBTAINED BY WAY OF T WO SUMS OF RS.16.50 LAKH AND RS.68.50 LAKH ON 31.03.2009 BY WAY OF RTGS AND THAT THE TRANSACTION IS RECORDED IN KOTAK MAHINDRA BANK, WHICH IS THE ACCOU NT OF THE CREDITOR. 4.2 THE IDENTIFY OF THE CREDITOR HAS BEEN PROVED. 4.3 IT IS STRANGE THAT THE COMPANY ADVANCED HUGE AM OUNT OF LOAN TO A NON- RELATED PARTY WITHOUT ANY SECURITY AND WITHOUT ANY INTEREST COMPENSATION. HENCE THE TRANSACTION DOES NOT APPEAR TO BE GENUINE. 4.4 MERELY BECAUSE THE TRANSACTION WAS CARRIED OUT THROUGH BANKING CHANNEL, IT WOULD NOT MEAN THE TRANSACTION IS GENUINE. 4.5 ON THE CASH CREDIT OF RS.5 LAKH, BEING LOAN FRO M SHRI R.V.RADHA KRISHNA, HE CONFIRMED THE ADDITION MADE ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE PERSON FOR EXAMINATION, DESPITE THE A.O. GIVING SUF FICIENT OPPORTUNITY TO THE ASSESSEE AND THAT THE ASSESSEE HAS NOT FILED SUPPOR TING EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE TRANSACTION. 5. AGGRIEVED, THE ASSESSEE IS BEFORE US. 5.1 THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI G.V. N.HARI, RELIED ON THE REMAND REPORT GIVEN BY THE ASSESSING OFFICER AND SU BMITTED THAT THE IDENTITY AND CREDITWORTHINESS OF THE LENDERS HAVE BEEN PROVED. H E SUBMITTED THAT THE BALANCE SHEET AND OTHER FINANCIAL DOCUMENTS WERE FILED BEFO RE THE REVENUE AUTHORITIES AND PERUSAL OF THE SAME DEMONSTRATES THAT M/S.WORTH MUL TI TRADE CO. IS HAVING SUBSTANTIAL NET WORTH AND THAT THE ASSESSEE IS ASSE SSED TO INCOME TAX. HE SUBMITTED THAT THE CONFIRMATION LETTERS WERE FILED AND THE ASSESSEE HAS DISCHARGED ITS BURDEN OF PROOF. HE ARGUED THAT THE ASSESSING O FFICER HAS NOT CONDUCTED ANY ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 3 INQUIRY NOR COLLECTED ANY EVIDENCE TO NEGATE THE EV IDENCE PLACED ON RECORD. ON THE ISSUE OF SECURITY, HE SUBMITTED THAT GRANTING OF IN TEREST FOR SECURITY OR OTHERWISE, DEPENDS ON THE PERSONAL RELATIONSHIP BETWEEN THE PA RTIES AND THE PURPOSE OF THE LOAN AND IT CANNOT BE A CIRCUMSTANCE TO HOLD THAT T HE LOAN ITSELF IS NOT GENUINE. HE POINTED OUT THAT IT IS NOT THE CONTENTION OF THE RE VENUE AUTHORITIES THAT THE ASSESSEES EXCESS MONEY HAS BEEN ROUTED THROUGH M/S .WORTH MULTI TRADE CO. OR THROUGH MR.R.V.RADHA KRISHNA. ON THE REASONS CITED BY THE LEARNED CIT(A), WHILE SUSTAINING THE ADDITION OF RS.85,00,000, AS TO WHY A UNRELATED COMPANY WOULD GIVE INTEREST FREE LOAN, THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT ON THE ISSUE OF NON-PAYMENT OF INTEREST, THAT THE PROMOTERS OF M /S.WORTH MULTI TRADE CO. WERE KNOWN TO THE ASSESSEE THROUGH A COMMON FRIEND AS TH E ASSESSEE WAS INTENDED TO SET UP A POWER PROJECT AND THE ABOVE COMPANY WAS IN TERESTED TO EXTEND ADVANCE TO THE ASSESSEE FOR ONWARD INVESTMENT IN THE POWER PROJECT. THIS IS THE REASON M/S.WORTH MULTI TRADE CO. EVEN IN THEIR CONFIRMATIO N LETTER MENTIONED THAT THE SAID AMOUNT WAS ONLY AN ADVANCE GIVEN. HE FURTHER SUBMIT TED THAT OWING TO THE FACT THAT THE ASSESSEE WAS KNOWN TO THEM THROUGH A COMMON FRI END, THEY HAVE NOT INSISTED FOR INTEREST IN SPITE OF DELAY IN SETTING UP THE PO WER PROJECT. HE SUBMITTED THAT THE ASSESSEE KNOWS THE PROMOTERS OF M/S.WORTH MULTI TRA DE CO. THROUGH A COMMON FRIEND, THIS FACT WAS ALSO RECORDED BY THE LEARNED CIT(A) IN HIS ORDER ON PAGE 8 PARA 4.6. HE PLEADED THAT ALL PLAUSIBLE EVIDENCES HAVE B EEN FILED BEFORE THE REVENUE AUTHORITIES AND THE A.O. IN HIS REMAND REPORT HAS N OT DOUBTED THE GENUINENESS OF THE SAME. HE POINTED OUT THAT THE ONLY OBJECTION OF THE AO WAS ON ADMISSION OF ADDITIONAL EVIDENCE. 5.2 ON THE CREDIT IN THE NAME OF MR.R.V.RADHA KRISH NA, IT WAS SUBMITTED THAT HE WAS A PRACTICING PROFESSIONAL COMPANY SECRETARY WIT H INCOME-TAX ASSESSMENT DETAILS. HE ARGUED THAT THE PRACTICING PROFESSIONAL HAS GIVEN CONFIRMATION LETTER AND HE BEING AN INCOME TAX ASSESSEE, THE AO COULD HAVE EASILY VERIFIED THE TRANSACTION. HE VEHEMENTLY CONTENDED THAT NON-PRODU CTION OF MR.RADHA KRISHNA ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 4 BEFORE THE ASSESSING OFFICER CANNOT BE TAKEN A BASI S THAT THE TRANSACTION IS NOT GENUINE, ESPECIALLY IN VIEW OF THE EVIDENCES FILED BEFORE THE A.O. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI R. K.SINGH, ADDL.CIT, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE ASSESSING O FFICER AND CIT(A) AND SUBMITTED THAT IT IS STRANGE THAT THE COMPANY WHICH HAS NO CO NNECTION WITH THE ASSESSEE ADVANCED HUGE AMOUNT WITHOUT SECURITY AND ALSO WITH OUT COLLECTING ANY INTEREST. THUS, HE SUBMITTED THAT IT WILL LEAD TO A CONCLUSIO N THAT THE TRANSACTION IS NOT GENUINE. HE AGREED THAT THE IDENTITY OF THE CREDITO R HAS BEEN PROVED, BUT AT THE SAME TIME, HE SUBMITTED THAT SUCH UNUSUAL TRANSACTI ON HAVE TO BE LOOKED AT FROM THE POINT OF PREPONDERANCE OF PROBABILITIES. ON THE LOAN FROM MR.R.V.RADHA KRISHNA, HE SUBMITTED THAT SUFFICIENT OPPORTUNITIES WERE GRANTED BY THE AO FOR PRODUCING THE SAID CREDITOR BEFORE HIM FOR EXAMINAT ION AND BY NOT PRODUCING THE PERSON THE ASSESSEE HAS NOT DISCHARGED THE BURDEN O R PROOF LAY ON HIM. HE PRAYED THAT THE ADDITION BE UPHELD. 7. IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE LOANS IN QUESTION FROM M/S.WORTH MULTI TRADE CO. WERE RECEIV ED BY THE ASSESSEE ON 30.03.2009, WHICH IS THE LAST DAY OF THE PREVIOUS Y EAR 2008-2009 RELATABLE TO ASSESSMENT YEAR 2009-2010 AND UNDER THOSE CIRCUMSTA NCES THE QUESTION OF PAYMENT OF INTEREST DURING THE YEAR DOES NOT ARISE. HE RELIED ON THE FOLLOWING CASE LAWS:- (I) MOD CREATIONS (P) LTD. V. ITO [(2013) 354 ITR 282 (DEL.)] TO THE PROPOSITION THAT WHEN THE ASSESSEE DISCHARGES INITI AL ONUS PLACED ON IT AND IN THE EVENT OF THE REVENUE STILL HAVING A DOUBT WI TH REGARD TO THE GENUINENESS OF THE TRANSACTION, CREDITWORTHINESS OF THE CREDITOR, THE ONUS WOULD SHIFT TO IT AND IT IS THE REVENUE WHICH IS RE QUIRED TO PROVE THE ALLEGATION. (II) CIT V. ORISSA CORPORATION (P) LTD. [(1986) 15 9 ITR 78 (SC)] ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 5 8. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERAT ION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLL OWS. 8.1 THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE B EFORE THE LEARNED CIT(A) WAS ADMITTED. THE REVENUE IS NOT IN APPEAL ON THIS ISSUE. THE AO IN HIS REMAND REPORT DATED 29.02.2013, WHICH IS EXTRACTED AT PARA 4.2 PAGE 4 OF THE CIT(A)S ORDER STATED AS FOLLOWS:- WITH REFERENCE TO THE ABOVE, ON MERITS OF THE CASE , IT IS SUBMITTED THAT THE KOTAK MAHINDRA BANK ACCOUNT STATEMENT HAVI NG ACCOUNT NO.09582000009906 OF M/S.WOTH MULTITRADE COMPANY PV T. LTD., H-157, DR.BABASAHEB AMBEDKAR NAGAR, S.M.ROAD, KOKAR I NAGAR, KOLIWADA, MUMBAI 400 037 AND FORM 23AC WHICH ARE FORWARDED TO THIS OFFICE ARE VERIFIED. IT IS SEEN FROM THE SA ID BANK STATEMENT THAT AMOUNTS OF RS.68,50,000/- AND RS.16,50,000/- W ERE DEBITED IN THE SAID BANK ACCOUNT WITH NARRATION OF RTGS PM T 390011009711 ON 31.03.2009. THE BANK ACCOUNT HAVIN G NUMBER 390011009711 IS THE CURRENT BANK ACCOUNT OF THE ASS ESSEE IN ING VYSYA BANK, SRIKAKULAM AND THE COPY OF THIS ACCOUNT STATEMENT WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCE EDINGS. ON VERIFICATION OF THE SAID BANK ACCOUNT WITH THE KOTA K MAHINDRA BANK ACCOUNT OF M/S.WORTH MULTITRADE COMPANY PVT. L TD., MUMBAI IT WAS FOUND THAT RS.68,50,000/- AND RS.16,50,000/- WERE CREDITED TO THE ING VYSYA BANK ACCOUNT OF THE ASSESSEE, HAVI NG ACCOUNT NUMBER 390011009711, WITH NARRATIONS OF KKBH 09090 425012 RTGS TXN KOTAK MAHINDRA BANK AND KKBKH 0909059729 7 RTGS TXN KOTAK MAHINDRA BANK RESPECTIVELY FROM THE ABOV E OBSERVATIONS, IT CAN BE CONCLUDED THAT RS.68,50,000 /- AND RS.16,50,000/- ARE TRANSFERRED FROM KOTAK MAHINDRA BANK ACCOUNT HAVING NO.09582000009906 OF M/S. WORTH MULTITRADE C OMPANY LTD. MUMBAI TO THE ING VYSYA BANK ACCOUNT OF SRI BO YINA GOVINDA RAJULU HAVING ACCOUNT NO.390011009711 ON 31 .03.2009. ON VERIFICATION OF THE FORM 23AC WHICH WAS FORWARD TO THIS OFFICE, IT IS FOUND THAT M/S.WORTH MULTITRADE COMPANY PRIVA TE LIMITED IS HAVING CORPORATE IDENTITY NUMBER (CIN) AS U51109MH 2007PTC176872 AND ADDRESS OF THE REGISTERED OFFICE OF THE COMPANY AS H-157, DR.BABASAHEB AMBEDKAR NAGAR, S.M. ROAD, KAKANI NAGAR, KOLIWADA, MUMBAI 400 037. ON VERIFI CATION OF THE PARTICULARS OF MOBILIZATION OF DEPLOYMENT OF FUNDS, IT IS FOUND THAT ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 6 M/S.WORTH MULTITRADE COMPANY PVT. LTD. HAS LOANS AN D ADVANCES OF RS.15,00,00,000 AS ON 31.03.2009. 8.2 IT CAN BE SEEN FROM THE ABOVE THAT THE ASSESSI NG OFFICER HAS NOT DOUBTED THE GENUINENESS OF THE TRANSACTION. THE IDENTITY OF THE ASSESSEE STANDS PROVED. AS FAR AS THE CREDITWORTHINESS OF THE TRANSACTION IS C ONCERNED, THE ASSESSING OFFICER HAS NOT EXPRESSED ANY RESERVATIONS. THE CREDITORS H AVE ALSO CONFIRMED THE TRANSACTION AND THEY ARE INCOME-TAX ASSESSEES. THE A.O.S ONLY OBJECTION WAS ON THE ADMISSION OF ADDITIONAL EVIDENCE. UNDER THESE C IRCUMSTANCES, WE HAVE TO NECESSARILY COME TO A CONCLUSION THAT THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS ARE PROVED. 8.3 COMING TO THE FINDINGS OF THE FIRST APPELLATE A UTHORITY, THE GENUINENESS OF THE TRANSACTION IS DOUBTED BECAUSE NO SECURITY WAS DEMA NDED BY THE LENDER. THIS CONCLUSION IS DRAWN WITHOUT CONFRONTING THE DOUBT O R HUNCH TO EITHER THE ASSESSEE OR THE CREDITOR. SIMILARLY THE DOUBT EXPRESSED BY T HE LEARNED CIT(A) ON PAYMENT OF INTEREST, IS ALSO NOT CONFRONTED TO THE CREDITOR. A S FAR AS THE QUESTION OF GIVING INTEREST FREE LOAN BY AN UNRELATED COMPANY, THE ASS ESSEE SUBMITS THAT THE PARTY M/S.WORTH MULTI TRADE CO. WAS KNOWN TO THE ASSESSEE THROUGH A COMMON FRIEND. AS THE ASSESSEE INTENDED TO SET UP A POWER PROJECT, THE ABOVE CREDITOR WAS INTERESTED TO EXTEND ADVANCE TO THE ASSESSEE FOR ON WARD INVESTMENT IN THE POWER PROJECT, WHICH FACT WAS MENTIONED IN THE CONFIRMATI ON LETTER. FURTHER, THOUGH THE SETTING UP OF THE POWER PROJECT WAS DELAYED, THE PA RTY HAS NOT INSISTED FOR INTEREST BECAUSE OF ASSESSEES RELATIONSHIP WITH THE SAID PA RTY THROUGH A COMMON FRIEND. INVESTMENT DECISIONS ARE COMPLEX AND DRIVEN BY CONS IDERATIONS OTHER THAN SECURITY OR INTEREST. THE LEARNED CIT(A) WAS WRONG IN HOLDIN G THAT THE TRANSACTION IS NOT GENUINE FOR THE REASON THAT THE INVESTOR / CREDITOR HAD NOT SOUGHT SECURITY OR INTEREST ON THE AMOUNT GIVEN. THUS, IN OUR OPINION, BOTH THE SE CONCLUSIONS ARE MERE SURMISES AND CONJECTURES. THE GENUINENESS OF THE TR ANSACTION CANNOT BE DOUBTED MERELY BECAUSE OF CERTAIN BELIEF OF THE ADJUDICATIN G AUTHORITY THAT AN AMOUNT CANNOT ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 7 BE GIVEN WITHOUT SECURITY OR WITHOUT INTEREST. BUSI NESSMEN HAVE MANY OTHER CONSIDERATIONS WHILE INVOLVING IN CERTAIN TRANSACTI ONS. 8.4 IN THE CASE OF MOD CREATIONS (P) LTD. V. ITO (S UPRA), THE HONBLE DELHI HIGH COURT HELD AS UNDER:- TRIBUNAL HAS ADOPTED AN ERRONEOUS APPROACH ON THE A SPECTS OF GENUINENESS OF THE TRANSACTION IN ISSUE AND THE CRE DITWORTHINESS OF THE PERSONS / CREDITORS WHO LENT MONEY TO ASSESSEE. THE FIRST ASPECT, I.E., IDENTITY OF THE CREDITORS WAS ESTABLI SHED BEFORE ANY OF THE AUTHORITIES BELOW. IT WILL HAVE TO BE KEPT IN M IND THAT S. 68 ONLY SETS UP A PRESUMPTION AGAINST THE ASSESSEE WHENEVER UNEXPLAINED CREDITS ARE FOUND IN THE BOOKS OF ACCOU NTS OF THE ASSESSEE. IT CANNOT BUT BE GAINSAID THAT THE PRESUM PTION IS REBUTTABLE. IN REFUTING THE PRESUMPTION RAISED, THE INITIAL BURDEN IS ON THE ASSESSEE. THIS BURDEN, WHICH IS PLACED ON TH E ASSESSEE, SHIFTS AS SOON AS THE ASSESSEE ESTABLISHES THE AUTH ENTICITY OF TRANSACTIONS AS EXECUTED BETWEEN THE ASSESSEE AND I TS CREDITORS. IT IS NO PART OF THE ASSESSEES BURDEN TO PROVE EITHER THE GENUINENESS OF THE TRANSACTIONS EXECUTED BETWEEN TH E CREDITORS AND THE SUB-CREDITORS NOR IS IT THE BURDEN OF THE A SSESSEE TO PROVE THE CREDITWORTHINESS OF THE SUB-CREDITORS. 8.5 IN THE CASE OF CIT V. ORISSA CORPORATION (P) LT D.(SUPRA) , THE HONBLE SUPREME COURT HELD AS UNDER:- THE ASSESSEE HAS GIVEN THE NAMES AND ADDRESSES OF T HE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE T HAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NU MBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM IS SUING NOTICE UNDER S. 131 AT THE INSTANCE OF THE ASSESSEE, DID N OT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOU RCE OF INCOME OF THE SAID ALLEGED CREDITORS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THE PREMISES, I F THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHA RGED THE BURDEN THAT LAY ON HIM, THEN IT COULD NOT BE SAID T HAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION IS BASED ON WHICH A CON CLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH ARISES. I T CANNOT, THEREFORE, BE SAID THAT ANY QUESTION OF LAW AROSE I N THESE CASES. ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 8 THE HIGH COURT WAS, THEREFORE, RIGHT IN REFUSING TO REFER THE QUESTIONS SOUGHT FOR. 8.6 APPLYING THE PROPOSITIONS LAID DOWN IN THESE CA SE LAWS IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE HOLD THAT THE ASSESSEE HAS DISCHARGED HIS INITIAL BURDEN OF PROOF THAT LAY ON HIM. HE ESTABLI SHED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WITH THE HELP OF CONFIRMATION LETTERS, FINANCIAL STATEMENTS, INCOME-TAX DETAILS ETC. THE ONUS SHIFTE D TO THE REVENUE AND THE ASSESSING OFFICER FAILED TO DISCHARGE THE ONUS THAT LAY ON HIM. UNDER THE CIRCUMSTANCES THIS ADDITION MADE U/S 68 HAS TO BE D ELETED. 8.7 COMING TO THE ADDITION OF RS.5,00,000, WE FIND THAT MR.R.V. RADHA KRISHNA HAS FILED CONFIRMATION LETTERS BEFORE THE ASSESSING OFFICER. HE IS A PRACTICING COMPANY SECRETARY AND INCOME-TAX ASSESSEE. IN OUR V IEW THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN OF PROOF THAT LAY ON HIM BY FILING THESE DOCUMENTS. THE ASSESSING OFFICER WITHOUT VERIFICATION OR INVESTIGA TION, MERELY REJECTED THESE EVIDENCES AND MADE THE ADDITION. IN OUR VIEW SUCH A DDITION CANNOT BE SUSTAINED. THE PROPOSITIONS LAID DOWN IN THE CASE LAWS ARE FUL LY APPLICABLE TO THE FACTS OF THE INSTANT CASE. MERELY BECAUSE THE CREDITOR IS NOT PR ODUCED, THAT TOO FOR VALID REASONS, THE ADDITION CANNOT BE CONFIRMED, BY REJECTING ALL THE EVIDENCES FILED, WITHOUT INVESTIGATION OR VERIFICATION, OR BY GIVING FINDING THAT THE EVIDENCES PRODUCED ARE NOT CORRECT. 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 3 RD DAY OF MARCH, 2014. SD/- SD/- ( SAKTIJIT DEY ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM; DATED : 3 RD MARCH, 2014. DEVDAS* ITA NO.687/VIZAG/2013. SRI B.GOVINDA RAJULU. 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, VISAKHAPATNAM. 4. CIT(A) VISAKHAPATNAM. 5. DR, ITAT, VISAKHAPATNAM. 6. GUARD FILE. BY ORDER, //TRUE COPY// (SENIOR PRIVATE SECRETARY) ITAT, VISAKHAPATNAM