SHRI RONAK MOTWANI, Neemuch V. THE ITO, Neemuch

ITA 688/IND/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5624 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 28-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: S N AGARWAL; PANKAJ MOGRA CAS
• Keywords: Unexplained cash credit; Gift; Question of law; Onus to prove
• Section: 44AD; 143(3); 234B; 131; 68

Judgement Text

I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 1 OF 14 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI RONAK MOTWANI, 91 SINDHI COLONY NEEMUCH PAN:BDJPM3879C VS. INCOME TAX OFFICER, WARD NEEMUCH / APPELLANT / RESPONDENT / APPELLANT BY SHRI S N AGARWAL & SHRI PANKAJ MOGRA CA`S / RESPONDENT BY SHRI K G GOYAL SR. (DR) / DATE OF HEARING 14.09.2016 / DATE OF PRONOUNCEMENT 2 6 .10 .2016 / O R D E R PER O. P. MEENA, ACCOUTANT MEMEBR. 1. THIS APPEAL BY THE ASSESSEE FILED AGAINST THE ORDER DTD.14.07.2015 OF LEARNED COMMISSIONER OF INCOME-TA X- UJJAIN [HEREINAFTER REFERRED TO AS THE LEARNED CIT]. THIS APPEAL RELATES TO ASSESSMENT YEAR 2012-13 AS AGAINST ASSESSMENT ORDER DTD. . . ./ I.T.A. NO.688/IND/2015 %' ' / ASSESSMENT YEAR: 2012-13 I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 2 OF 14 27.02.2015 PASSED U/S. 143(3) OF INCOME TAX ACT, 19 61(HEREIN AFTER REFERRED TO AS 'THE ACT) BY THE ITO NEEMUCH [HEREINAFTER REFERRED TO AS THE AO]. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LEARNED CIT (A) ERRED IN APPROVING THE ACTION OF TH E ASSESSING OFFICER ERRED IN ADDING AN AMOUNT OF RS.19,50,000/- TO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF INCOME TAX ACT,1961. EVEN WHEN THE CASE OF TH E ASSESSEE WAS SELECTED UNDER CASS. IT IS SETTLED POS ITION OF LAW THAT ADDITION IS TO BE RESTRICTED TO THE POINT FOR WHICH CASE WAS SELECTED FOR SCRUTINY. 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LEARNED CIT (A) ERRED IN ADDING AN AMOUNT OF RS. 19,50,000/- TO THE INCOME OF THE ASSESSEE U/S. 68 O F THE INCOME TAX ACT EVEN WHEN THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM. 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT (A) ERRED IN APPROVING THE CHARGING OF INTEREST U/S. 234B OF INCOME TAX ACT EVEN WHEN THE ASSESSEE WAS NOT LIABLE TO PAY INTEREST ON THE INCOME AS RETURNE D. I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 3 OF 14 2. GROUND NO.1 & 2: RELATES TO ADDITION OF RS. 19,50,0 00/- UNDER SECTION 68 OF THE ACT. 3. SUCCINCTLY, THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUTHORITIES ARE THAT THE ASSESSEE IS INDIVIDUAL, DE ALS IN TRADING OF FOOD GRAINS IN MANDI. RETURN OF INCOME WAS FILED ON 27.07.2012, DECLARING TOTAL INCOME AT RS.2,11,830/- UNDER THE P ROVISIONS OF SECTION 44AD OF THE ACT. THE ASSESSEE HAS SHOWN NET PROFIT AT RS. 1,75,580/- ON TOTAL CASH SALES OF RS.10,58,700/- DI SCLOSING NET PROFIT @16.58% INSTEAD OF NET PROFIT@ 8% AS PER PRO VISIONS OF SECTION 44AD. BESIDES, THE ASSESSEE HAS ALSO SHOWN INCOME OF RS. 36,250/- UNDER THE HEAD INCOME FROM OTHER SOURC ES. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER CAS S. THE ASSESSEE HAS PURCHASED TWO PLOT OF LAND AT GOMABAI NETRALAYA ROAD, NEEMUCH ON 17.11 2011 IN CASH FOR RS. 28,50,0 00/- . TO MAKE THE PAYMENT FOR THIS PURCHASE, THE ASSESSEE HA S OPENED BANK ACCOUNT NO. 993020110000157 ON 17.11.2011 IN W HICH AMOUNT OF RS. 28,50,000/- WAS DEPOSITED BY CHEQUES BY WAY OF LOANS TAKEN FROM 6 PERSONS OUT OF WHICH FOLLOWING C REDITORS WERE NOT FOUND GENUINE HENCE ADDED UNDER SECTION 68 OF T HE ACT WHICH ARE AS FOLLOW : S. NO. NAME OF THE LOAN CREDITOR AMOUNTS [RS.] I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 4 OF 14 1 SMT. NAGINA BANTHIA 2,00,000 2 SMT. DEEPIKA GANDHI 3,00,000 3 SHRI SURESH CHAND BAPULAL HUF 5,00,000 4 SHRI DEEPAK HINGAD 5,00,000 5 SHRI NANKRAM JIGHASHI 8,50,000 TOTAL 19,50,000 4. THE AO EXAMINED THE ABOVE PERSON AND FOUND THAT THE SMT. NAGINA BANTHIA IS GUEST FACULTY TEACHER AND EARNING INCOME OF RS. 4,000/- P.M. WHO DEPOSITED CASH OF RS. 3 LAKH I N HER BANK ACCOUNT ON 22.12.2011 AND ISSUED CHEQUE TO ASSESSEE OF EQUAL AMOUNT ON THE SAME DATE. SHE FAILED TO ESTABLISH TH E SOURCE OF CASH DEPOSIT IN HER BANK ACCOUNT. SMT. DEEPIKA GAND HI HAD DONE SAREE BUSINESS AND NOW DISCONTINUED THE SAME. SHE DEPOSITED CASH OF RS. 3.50 LAKH IN THE BANK ACCOUNT ON 15.12.2011 AND ISSUED THE CHEQUE OF EQUAL AMOUNT TO THE ASSESSEE ON SAME DATE. SHE FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HER BANK ACCOUNT. SHRI SURESH CHAND BAPU LAL HUF IS DERIVING INCOME FROM TRADING AND INTEREST. WHO DEPO SITED CASH OF RS. 5 LAKH IN THE HIS BANK ACCOUNT ON 15.12.2011 AN D ISSUED CHEQUE TO THE ASSESSEE OF EQUAL AMOUNT ON SAME DATE . HE FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT. SHRI DEEPAK HINGAD IS DERIVING INCOME FROM LABOUR SUPPLY . HE DEPOSITED CASH OF RS. 2 LAKHS IN THE HIS BANK ACCOU NT ON 23.12.2011 AND ISSUED CHEQUE TO THE ASSESSEE OF EQU AL AMOUNT I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 5 OF 14 ON SAME DATE. HE FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT. SHRI NANKRAM JIGHASHI IS DERIVING INCOME FROM TAILORING BUSINESS WHO DEPOSITED CASH OF RS. 1 ,83,180/-IN HIS BANK ACCOUNT ON 10.01.2012 AND ADVANCED LOAN OF RS. 6 LAKH ON 11.01.2012. HE FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE AO EXAMINED THE ABOVE MENTIONED PE RSON ON OATH AND RECORDED THE STATEMENT FROM THEM. THE AO F OUND THAT THE ASSESSEE HAS TAKEN LOANS BY CHEQUE IMMEDIATELY AFTER DEPOSITING THE CASH IN THE BANK ACCOUNT OF ABOVE PE RSONS. THE AO FOUND THAT THE ABOVE PERSON HAVE NO CREDIT WORTH INESS AND DOES NOT HAVE SUFFICIENT SOURCE OF INCOME BY WHICH THEY CAN HAVE SAVING AND AFFORD TO GIVE LOANS TO THE ASSESSEE. TH EREFORE, THE ASSESSEE HAS FAILED TO ESTABLISH CREDIT WORTHINESS OF THE ABOVE PERSONS AND FAILED TO EXPLAIN SOURCE OF CASH DEPOSI TS IN THE BANK ACCOUNT IMMEDIATELY BEFORE ISSUING CHEQUES. ACCORDI NGLY, THE AO TREATED THE SAME AS UNEXPLAINED CASH CREDIT UNDER S ECTION 68 OF THE ACT. 5. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE LD. CIT (A). THE LD. CIT (A) OBSERVED THAT IT IS SETTLED LA W WHETHER LOAN TRANSACTIONS ARE GENUINE, THE ONUS IS ALWAYS ON THE APPELLANT, I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 6 OF 14 AND IF NO EXPLANATION IS OFFERED OR EXPLANATION IS NOT FOUND SATISFACTORY, THE AO CAN DISBELIEVE THE ALLEGED TRA NSACTIONS OF LOANS. IF INITIAL BURDEN IS DISCHARGED THEN ONUS SH IFTS ON THE AO. ACCORDINGLY, THE LD. CIT (A) HELD THAT THE APPELLAN T FAILED TO DISCHARGE THE BURDEN OF PROOF BY NOT ESTABLISHING T HE GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS O F THESE PARTIES, ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE AO. 6. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THIS TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE AO ADDED FOLLOWING AMOUNTS OF UNSECURED LOAN TO THE IN COME OF THE ASSESSEE: S. NO. NAME OF THE LOAN CREDITOR AMOUNTS [RS.] 1 SMT. NAGINA BANTHIA AOKPB6350F 2,00,000 2 SMT. DEEPIKA GANDHI AJTPG8676Q 3,00,000 3 SHRI SURESH CHAND BAPULAL HUF AAMHS4733E 5,00,000 4 SHRI DEEPAK HINGAD ACUPOH6803Q 5,00,000 5 SHRI NANKRAM JIGHASHI AAOPJ2890H 8,50,000 TOTAL 19,50,000 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON PAGE 6 OF ASSESSMENT ORDER, THE AO MENTIONED THAT SHRI RONAK MOTWANI HAS DEPOSITED HIS UNDISCLOSED INCOME IN FORM OF LOA N FROM THE VARIOUS LOAN CREDITORS. THE ASSESSEE IS JUST PASSED OUT CHARTERED ACCOUNTANT HENCE HAVE NO MAJOR SOURCE OF INCOME AS OBSERVED BY I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 7 OF 14 THE AO . THE LEARNED COUNSEL FOR THE ASSESSEE FUR THER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED CONFIRMATION OF ALL UNSECURED LOAN CREDIT ORS. THE STATEMENT OF ALL THE UNSECURED LOAN CREDITORS WERE RECORDED BY THE AO WHEREIN THEY HAVE ALSO ACCEPTED THAT LOANS W AS ADVANCED BY THEM TO THE ASSESSEE. THE ASSESSEE HAS RECEIVED ENTIRE AMOUNT OF LOANS THROUGH AN ACCOUNT PAYEE CHEQUES. H ENCE, THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS LYING ON T HE ASSESSEE. THE AO HAS UTTERLY FAILED TO PROVE THAT THE AMOUNT AS SHOWN BY THE ASSESSEE WAS INCOME OF THE ASSESSEE. HENCE THE ADDITION IS PURELY BASED ON PRESUMPTION IS NOT JUSTIFIABLE. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE IN T HE CASE OF CIT VS. METACHEM INDUSTRIES (2000) 245 ITR 160 MP)/ 161 CTR 444(MP)/ 116 TAXMAN 572(MP) WHEREIN IT WAS LAID DOW N THAT ONCE THE FIRM HAS SATISFACTORY EXPLAINED THAT THE C REDIT ENTRIES IN THE NAME OF PARTNERS REPRESENT THE AMOUNT INVESTED BY THEM THE BURDEN OF PROOF STOOD DISCHARGED AND THE AMOUNT CAN NOT BE TREATED AS INCOME OF THE FIRM U/S. 68. THE LD. A. R . ALSO STATED THAT THE AO WAS GROSSLY ERRED IN STATING THAT SOURC E OF LOAN WAS NOT EXPLAINED BY THE CREDITORS. THE LD. A. R. FILED A CHART SHOWING DETAILS OF SUCH OF CREDITORS AS UNDER : I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 8 OF 14 S . N O . NAME OF THE LOAN CREDITOR WITH PAN AMOUNTS [RS.] STATE MENT ON PAGE NO. SOURCE OF AMOUNT 1 SMT. NAGINA BANTHIA AOKPB6350F 2,00,000 25-26 NO SOURCE ASKED BY THE AO 2 SMT. DEEPIKA GANDHI AJTPG8676Q 3,00,000 27-28 CASH WAS DEPOSITED OUT OF CASH WITHDRAWAL OF RS. 3.65 LAKH ON 23.11.11 3 SHRI SURESH CHAND BAPULAL HUF AAMHS4733E 5,00,000 37-38 RS. 3.71 LAKH ON ACCOUNT OF SALE OF STOCK BALANCE FROM RLSTN FROM DEBTORS RS. 5.75 OUT OF CASH WITHDRAWAL 4 SHRI DEEPAK HINGAD ACUPOH6803Q 5,00,000 39-40 NO SOURCE WAS ASKED 5 SHRI NANKRAM JIGHASHI AAOPJ2890H 8,50,000 41-42 NO SOURCE WAS ASKED TOTAL 19,50,000 8. THE LD. A. R. SUBMITTED THAT FROM THE ABOVE TABLE I T IS CLEAR THAT SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT WAS PRO PERLY EXPLAINED BY THE LOAN CREDITORS. IT IS SETTLED POSI TION OF LAW THAT THE AO CAN ONLY ASKED SOURCE OF LOAN AS RECEIVED BY THE ASSESSEE, THE ASSESSEE HAS PROPERLY EXPLAINED THE SOURCE OF L OAN FROM THESE FIVE LOAN CREDITORS AND THEY HAVE ACCEPTED THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE AO F OR WANT OF SOURCE OF SOURCE ADDED THE LOAN TO THE INCOME OF TH E ASSESSEE, WHICH IS NOT PERMISSIBLE. THE LD. A. R. RELIED FOR THIS PROPOSITION ON FOLLOWING CASE LAW VIZ: ACIT VS. INDIA TYRE HOUS E 72 TTJ 316( GUHATI), RAM MANOHAR SINGH VS. ACIT 9 DTR 270( JABA LPUR), S K JAIN VS. I T O 2 SOT 579(AGRA), NEMICHNAD KOTHARI V S. CIT 264 I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 9 OF 14 ITR ( GAUHATI), ORBITAL COMMUNICATION (P) LTD. 327 ITR 560 (DELHI), DWARKESH INVESTMENT (P) LTD. 330 ITR 298 ( DELHI). 9. THE LD. A. R. FURTHER SUBMITTED THAT WHEN CONFIRMAT ION FILED, LOAN CREDITORS APPEARED IN RESPONSE TO SUMMON ISSUED U/S . 131 AND THEIR STATEMENT RECORDED, WHEREIN THEY HAVE ADMITTE D HAVING GIVEN LOAN TO THE ASSESSEE, THEY HAVE GIVEN THEIR P AN NUMBER , THE PRIMARY ONUS HAS BEEN DISCHARGED, HENCE THE AO CANNOT PROCEED AGAINST THE ASSESSEE, IF NOT SATISFIED THE AO CAN PROCEED AGAINST INDIVIDUALS WHO HAVE GIVEN LOANS TO THE ASS ESSEE. IN SUPPORT OF THIS PROPOSITION THE LD. A. R. PLACED RE LIANCE IN THE CASE OF CIT VS. METACHEM INDUSTRIES 245 ITR 160(MP) (2000) 161 CTR 444/ 245 ITR 160/(2001) 116 TAXMAN 572(MP). 10. THE LD. SENIOR (DR) SUPPORTED THE ORDERS OF LOWER A UTHORITIES AND SUBMITTED THAT THE SUNDRY CREDITORS WERE NOT THE PE RSON WERE NOT OF ANY MEANS. THE PERSON WHO GIVE LOAN TO THE ASSES SEE HAVE DEPOSITED THE CASH ON SAME DAY WHEN THE CHEQUE WAS ISSUED TO THE ASSESSEE. THEREFORE, THERE CREDIT WORTHINESS IS NOT PROVED. THE LD. SENIOR (DR) ALSO RELIED IN THE CASE OF UMESH KR ISHNANI VS. ITO (2013) 217 TAXMAN 13(GUJ)/35 TAXMANN.COM 598(GUJ) W HEREIN ADDITION US 68 OF THE ACT WAS CONFIRMED IN RESPECT OF ON THE FACTS THAT YEARLY EARNING OF LENDERS WERE ALMOST LS OF SI MILAR TO WHAT I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 10 OF 14 THEY LOANED TO THE ASSESSEE AND SUBSTANTIAL AMOUNT OF CASH DEPOSITED IN BANK ACCOUNT OF THE LENDERS SHORTLY PR IOR TO ISSUANCE OF CHEQUES BY THEM TO THE ASSESSEE. HENCE, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ADDITION SO MADE. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, HAVE GONE THRO UGH THE ORDERS OF THE LOWER AUTHORITIES, AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO HAS EXAMINED THE PE RSON BY WAY OF ISSUE OF SUMMON TO THE ENTIRE PREVIOUSLY MENTION ED PERSON. SMT. NAGINA BANTHIA IS GUEST FACULTY TEACHER AND EA RNING INCOME OF RS. 4,000/- P.M. WHO DEPOSITED CASH OF RS. 3 LAK H IN HER BANK ACCOUNT ON 22.12.2011 AND ISSUED CHEQUE TO ASSESSEE OF EQUAL AMOUNT ON THE SAME DATE. SHE FAILED TO ESTABLISH TH E SOURCE OF CASH DEPOSIT IN HER BANK ACCOUNT. SMT. DEEPIKA GAND HI HAD DONE SAREE BUSINESS AND NOW DISCONTINUED THE SAME. SHE D EPOSITED CASH OF RS. 3.50 LAKH IN THE BANK ACCOUNT ON 15.12. 2011 AND ISSUED THE CHEQUE OF EQUAL AMOUNT TO THE ASSESSEE O N SAME DATE. SHE FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HER BANK ACCOUNT. SHRI SURESH CHAND BAPULAL HUF IS DERIVING INCOME FROM TRADING AND INTEREST. WHO DEPOSITED CASH OF RS. 5 L AKH IN THE HIS BANK ACCOUNT ON 15.12.2011 AND ISSUED CHEQUE TO THE ASSESSEE OF EQUAL AMOUNT ON SAME DATE. HE FAILED TO ESTABLISH T HE SOURCE OF I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 11 OF 14 CASH DEPOSIT IN HIS BANK ACCOUNT. SHRI DEEPAK HINGA D IS DERIVING INCOME FROM LABOUR SUPPLY. HE DEPOSITED CASH OF RS. 2 LAKHS IN THE HIS BANK ACCOUNT ON 23.12.2011 AND ISSUED CHEQU E TO THE ASSESSEE OF EQUAL AMOUNT ON SAME DATE. HE FAILED TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT. SHRI NA NKRAM JIGHASHI IS DERIVING INCOME FROM TAILORING BUSINESS WHO DEPOSITED CASH OF RS. 1,83,180/-IN HIS BANK ACCOUNT ON 10.01. 2012 AND ADVANCED LOAN OF RS. 6 LAKH ON 11.01.2012. HE FAILE D TO ESTABLISH THE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT. IN VIEW OF ABOVE FACTS AND THE ADDITION OF RS.19.50 LAKH MADE BY TH E AO IS CONFIRMED AS THE CREDITWORTHINESS IS NOT PROVED NOR THE ABOVE CASH CREDITOR HAD SUBSTANTIAL BALANCES IN THEIR BAN K ACCOUNT TO ADVANCE SUCH LOAN TO THE ASSESSEE. OUR VIEW IS ALSO FORTIFIED WITH DECISION IN THE CASE OF UMESH KRISHNANI VS. ITO (20 13) 217 TAXMAN 13 (GUJ)/ 35 TAXMANN.COM 598(GUJ), OF WHICH RELEVANT EXTRACT IS REPRODUCED BELOW: 17.1 IT MAY BE THAT IDENTITY OF THE LENDERS/CREDITO RS WAS DULY PROVED. VITAL DEFECT NOTICED BY ALL THE THREE REVENUE AUTHORITIES WAS TH E CREDITWORTHINESS OF THESE LENDERS. ON INQUIRY, IT WAS BROUGHT ON RECORD THAT THEIR YEARLY EARNINGS WERE EITHER LESS OR ALMOST SIMILAR TO WHAT THEY GIFTED TO THE A SSESSEE. AND AGAIN, ASSESSEE HAVING HIS EARNING THROUGH AGENCY COMMISSION HAD NO REASON TO BORROW SUCH AMOUNT AT A HIGH RATE OF INTEREST OF 24% PER ANNUM. CUMULATIVELY, THIS LED THESE REVENUE AUTHORITIES AND THE TRIBUNAL TO CONCURRENTL Y CONCLUDE THAT THE TRANSACTION WAS NOTHING, BUT, A DESIGN TO BRING BACK IN A CIRCU ITOUS ROUTE HIS OWN MONEY BY PAYING THE HIGHER RATE OF INTEREST AND THEREBY SAVI NG THE TAX AS WELL. 18. THREE BASIC INGREDIENTS VIZ., (A) IDENTITY; (B) CREDITWORTHINESS AND (C) GENUINENESS OF THE TRANSACTION, WHEN ARE CONSIDERED , IT CANNOT BE DISPUTED THAT ALL THE THREE OF THEM REQUIRE INDEPENDENT CONSIDERATION AND YET THEY ARE NOT MUTUALLY I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 12 OF 14 EXCLUSIVE OR CAN BE CONSIDERED IN ISOLATION. IT HAR DLY NEEDS TO BE SPECIFIED THAT THE WELL RECOGNIZED PRINCIPLE OF NOT INSISTING UPON SOU RCE OF THE SOURCE NEEDS NO ELABORATION. UPON APPRECIATION OF MATERIALS ON RECO RD AND TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE REVENUE AUTHORITIES AND THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ENTIRE TRANSACTION WAS A CIRCUI TOUS ROUTE TO BRING ON BOOKS THE ASSESSEE'S OWN ACCOUNTED MONEY. THE FACTOR THAT THE DONORS DID NOT POSSESS INDEPENDENT SOURCE TO MAKE SUCH DEPOSITS MUST BE VI EWED IN LIGHT OF THE FINDINGS THAT THE ASSESSEE HAD NO JUSTIFICATION FOR BORROWIN G SUCH AMOUNTS AT SUCH HIGH RATE OF INTEREST. THESE ASPECTS WOULD HAVE A BEARING ON THE GENUINENESS OF THE TRANSACTION AND THE CREDIT WORTHINESS OF THE DONORS AND CANNOT BE SEEN AS AN ATTEMPT TO THROW THE BURDEN TO PROVE SOURCE OF THE SOURCE ON THE ASSESSEE. 19. AS IS VERY ELOQUENT FROM THE RECORD ITSELF, SUB STANTIAL AMOUNT OF CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF ALL THE CREDITORS SHORTLY PRIOR TO ISSUANCE OF CHEQUES AND INSUFFICIENCY OF THE FUND WITH THE CRED ITORS WHEN COULD BE DULY ESTABLISHED FROM THE OVERALL FACTS AND CIRCUMSTANCE S OF THE CASE AND WHEN IT IS FURTHER FOUND AS A MATTER OF FACT THAT THE ASSESSEE HAD NO JUSTIFICATION FOR BORROWING SUCH AMOUNTS AT HIGH RATE OF INTEREST, EVEN WITHOUT DISTURBING THE WELL ESTABLISHED PRINCIPLE OF NOT INSISTING ON THE ASSESSEE PROVING SOURCE OF THE SOURCE, ON THE ROBUST FACTS OF THE REVENUE AUTHORITIES HAVE RIGHTLY NOT C ONCLUDED IN FAVOUR OF THE ASSESSEE. ALL ISSUES ARE ESSENTIALLY IN THE REALM OF APPRECIA TION OF FACTS. 20. NO ERROR IS COMMITTED BY ANY OF THESE AUTHORITI ES TO TERM THE FINDINGS AS PERVERSE LEADING TO RAISE QUESTION OF LAW. 12. IN THE PRESENT CASE THE YEARLY EARNING OF LENDERS W ERE ALMOST WAS OF SIMILAR TO WHAT THEY LOANED TO THE ASSESSEE AND SUBSTANTIAL AMOUNT OF CASH DEPOSITED IN BANK ACCOUNT OF THE LEN DERS SHORTLY PRIOR TO ISSUANCE OF CHEQUES BY THEM TO THE ASSESSE E. THUS THE FACTS IN THE CASE IN HAND ARE SQUARELY COVERED BY A BOVE DECISION. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DEC ISION OF HONBLE GUJARAT HIGH COURT. 13. FURTHER RELIANCE IS FURTHER PLACED IN THE CASE OF GUJARAT FERTILISERS VS. CIT 293 ITR 70/210 CTR 594 (GUJ)WHE REIN IT WAS HAD THAT ALLEGED CREDITOR HAD NO MONEY AND WAS HARD LY ABLE TO SUSTAIN HIMSELF FROM AGRICULTURAL OPERATIONS CARRIE D ON BY HIM AND SAID TO HAVE GIVEN MONEY WHICH WAS IN FACT GIVE N BY THE A I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 13 OF 14 PARTNER OF THE ASSESSEE FIRM. SUCH CASH CREDIT C ANNOT BE HELD TO BE GENUINE. 14. THE DECISION IN CASE OF CIT VS. METACHEM INDUSTRIE S 245 ITR 160(MP), RELIED BY THE ASSESSEE IS DISTINGUISHABLE AS THERE WAS CONCURRENT FINDING OF CIT (A) AS WELL AS TRIBUNAL T HAT FIRM HAS SATISFACTORILY EXPLAINED THE SOURCE OF ENTRIES OF P ERSON FROM WHOM ADVANCES OR LOAN WAS TAKEN BUT IN THE PRESENT CASE , THE SOURCE OF ENTRY PROVIDER IS NOT PROVED UP TO THE LEV OF TRIBU NAL , HENCE SAID DECISION IS DISTINGUISHABLE ON FACTS AND CIRCUMSTAN CES, OF THE CASE. SIMILARLY OTHER CASE LAWS RELIED BY THE ASSES SEE ARE DIFFERENT FROM THE FACTS OF THE CASE. 15. IN VIEW OF ABOVE, THE FINDING OF THE A.O. IS UPHEL D, ACCORDINGLY THIS GROUND NO. 1 AND 2 OF APPEAL IS DISMISSED. 16. SO FAR AS GROUND NO. 3 REGARDING CHARGING OF INTERE ST U/S. 234B IS CONCERNED, IT IS MANDATORY IN VIEW OF DECISION IN THE CASE OF ANJUM M.H. GHASWALA, 252 ITR 1 (SC) OF HONBLE APEX COURT , HOWEVER, THE AO WILL ALLOW CONSEQUENTIAL RELIEF IF ANY AFTER ALLOWI NG APPEAL EFFECT OF THIS ORDER. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. 18. THE ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCT.,2016. I.T.A. NO.688/IND/2015/A.Y:12-13/SHRI RONAK MOTWANI PAGE 14 OF 14 SD/- ( . . ) (D.T.GARASIA) JUDICIAL MEMBER SD/- ( . . ) (O.P.MEENA) ACCOUNTANT MEMBER & / DATED : 26TH OCTOBER, 2016.OPM