VEEDHATA TOWER P. LTD, MUMBAI V. ITO 9(3)(3), MUMBAI

ITA 7070/MUM/2014

• Counselvise Citation: 707019914 RSA 2014
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 21-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: R C JAIN; SANJAY BANSAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Principle of natural justice; Opportunity of cross examination; Source of fund; Third party statement
• Section: 131; 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI , BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 7070/MUM/2014 (ASSESSMENT YEAR : 2010-11) VEEDHATA TOWER P LIMITED, S-105, 1 ST FLOOR, RAJIV GANDHI COMMERCIAL COMPLEX, OPP. EKTA NAGAR, KANDIVALI(WEST), MUMBAI -400 067 .: PAN: AACCV 3179 N VS INCOME TAX OFFICER -9(3)(3), R. NO. 227, 2 ND FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 (APPELLANT) !' (RESPONDENT) # $ APPELLANT BY : S/SHRI R C JAIN & SANJAY BANSAL !' # $ RESPONDENT BY : SHRI LOVE KUMAR %& ' () /DATE OF HEARING : 08-01-2015 *+, ' () / DATE OF PRONOUNCEMENT : 21 -01-2015 . / . / . / . / O R D E R PER VIVEK VARMA, JM: THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-20 MUMBAI, DATED 22.08.2014 WHEREIN THE SOLITARY GROUND RAISED, PERTAINS TO ADDITION OF RS. 1,65,00,000/- U/S 68 OF THE ACT. 2. IN THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT A CREDIT IN THE FORM OF LOAN WAS STANDING IN THE BALANCE SHE ET, THE AO CALLED FOR CONFIRMATIONS FROM THE LENDERS ALONG WITH PASSBOOKS. THE ASSESSEE WAS ALSO ASKED TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN TRANSACTION AND ITS SOURCE. THE ASSESSEE EXPLAINED THAT, HE TOOK THE LOAN FROM M/S LORRAINE FINANCE PVT. LTD. (LFPL). ONE OF THE DIRECTORS OF LFPL, SHRI C N TRIVEDI WAS THE PROP OF M/S HI TECH VEEDHATA TOWER P LIMITED ITA 7070/M/2014 2 ENGINEERS, WHICH HAD ADVANCED THE LOAN TO LFPL. IT WAS EXPLAINED THAT HITECH ENGINEER WAS TRADING IN STEEL, WHEREIN HITECH ENGINEERS HAD TRANSACTED BUSINESS TO THE TUNE OF RS. 5.63 CRORES. THE AO FURTHER DUG DEEP INTO THE FACTS AND ULTIMATELY CAME TO THE CONCLUSION THAT LFPL WAS ONLY TH E NAME GIVER AND THAT THERE WAS NO ACTUAL FUND TRANSFER IN REA L SENSE FROM LFPL TO THE ASSESSEE. IN THE ASSESSMENT PROCEEDINGS, THE AO CONCLUDED THAT A SSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF LOAN TRANSACTION STANDING IN THE NAME OF M/S LORRAINE FINANCE PVT LTD, NOR THE ASSESSEE WAS ABLE TO PROVE THE CREDIT WOR THINESS OR REAL SOURCE OF FUNDS. 3. IN THE ASSESSMENT PROCEEDINGS, THE AO CONCLUDED THA T ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF LOAN TRANSACTION STANDING IN THE NAME OF M/S LORRAINE FINANCE PVT LTD, NOR THE ASSESSEE WAS ABLE TO PROVE THE CREDIT WOR THINESS OR REAL SOURCE OF FUNDS. 4. THE ASSESSEE APPROACHED THE CIT(A), BEFORE WHOM IT WAS SUBMITTED, 1. YOUR APPELLANT HAS NOT TAKEN ANY SUM FROM M/S HITECH ENGINEERS BUT HAVE TAKEN ADVANCE FROM LORRAI NE FINANCE PRIVATE LIMITED. HENCE IT IS ABSOLUTELY INC ORRECT TO STATE THAT M/S HITECH ENGINEERS HAVE ADVANCED AN Y SUM TO APPELLANT. 2. AS FAR AS OUR ADVANCE RECEIVED IS CONCERNED, THE SAID M/S LORRAINE FINANCE P LIMITED HAS CONFIRMED THE SA ME THROUGH VARIOUS MEANS SUCH AS CONFIRMATION THROUGH US, CONFIRMATION THROUGH RESPONSE U/S 133(6) AS WELL AS CONFIRMATION THROUGH THEIR PERSONAL APPEARANCE UNDE R SECTION 131. THEY HAVE ALSO DEMONSTRATED THEIR SOUR CE OF FUNDS, EVEN THOUGH THE SAME WAS NOT REQUIRED IN TER MS OF SECTION 68. 3. WITHOUT PREJUDICE TO THE ABOVE, KINDLY NOTE THAT WE RECEIVED A TOTAL ADVANCE OF RS. 1.65,00,000/- FROM LORRAINE FINANCE P LIMITED. HOWEVER, A SUM OF RS. 64,25,000/- HAS ALREADY BEEN REFUNDED TO THEM THROU GH ACCOUNT PAYEE CHEQUES AND BALANCE OUTSTANDING IS ON LY RS. 1,00,75,000/- AND NOT 1,65,00,000/-. 4. IT IS HUMBLY SUBMITTED THAT SECTION 68 WAS AMEND ED VEEDHATA TOWER P LIMITED ITA 7070/M/2014 3 BY FINANCE ACT, 2012 WHEREIN A RESPONSIBILITY HAS B EEN CAST ON ASSESSEE TO SUBMIT DETAILS OF SOURCE OF FUN DS FOR THE PARTY FROM WHOM THE FUNDS HAVE BEEN RECEIVED. E VEN THE AMENDED SECTION 68 DOES NOT ENVISAGE A POSSIBIL ITY WHEREIN ASSESSEE WILL HAVE TO SUBMIT DETAILS FOR SO URCE OF FUNDS OF THE PERSON WHO HAS GIVEN FUNDS TO LENDE R OF ASSESSEE (SOURCE OF SOURCE OF SOURCE). IF THAT WAS THE INTENTION THAN IT IS A NEVER ENDING CHAIN. KINDLY A LSO NOTE THAT EVEN THE AMENDED SECTION 68 COMES INTO FORCE F ROM 01-04-2013, THAT IS, FROM AY 2013-14 ONWARDS, HENCE FOR AY 2010-11, WE WERE NOT EVEN REQUIRED TO EXPLAI N SOURCE OF FUNDS IN LORRAINE FINANCE P LIMITED. STIL L, IN A BID TO COOPERATE WITH DEPARTMENT, WE HAVE MADE ALL EFFORTS TO PERSUADE OUR PARTIES TO SUBMIT THEIR RES PECTIVE RESPONSES AND THEY HAVE ALL DONE SO. 5. WITHOUT PREJUDICE TO THE ABOVE, EVEN FOR ARGUMEN TS SAKE, IF THE SOURCE OF FUNDS IN LORRAINE FINANCE P LIMITED WAS TO BE EXPLAINED, THE SAME HAS BEEN ADEQUATELY DONE PERSONALLY BY DIRECTOR OF LORRAINE FINANCE P L IMITED AND ALSO BY M/S HITECH ENGINEERS. 6. WITHOUT PREJUDICE, WE FAIL TO UNDERSTAND THAT EV EN ASSUMING SOME OF THE TRANSACTIONS OF SAID M/S HITEC H ENGINEERS HAVE NOT BEEN CONFIRMED BY ONE OF THEIR P ARTY, HOW CAN THE SAME MAKE FUNDS GIVEN BY THEM TO LORRAI NE FINANCE P LIMITED AS NON-GENUINE. IF THE LEARNED AO WAS IN POSSESSION OF ANY SUCH INFORMATION, WHY INSTEAD OF SUPPLYING THE SAME TO RESPECTIVE AO OF SAID PARTIES , THE SAME WAS USED AGAINST APPELLANT AS THERE IS NO CONNECTION WHATSOEVER BETWEEN US AND THE DEALINGS O F SAID PARTIES. 7. APPELLANT DID NOT HAVE ANY SALE/PURCHASE TRANSAC TION WITH EITHER SAID CITYBASE MULTITRADE OR HITECH ENGI NEERS. INFECT APPELLANT NOT HAD ANY SALES/PURCHASE OF THES E ITEMS SO FAR. 8. HONBLE CALCUTTA HC HELD IN CIT V. DATAWARE PRIV ATE LIMITED [ITA NO. 263 OF 2011 DATED 02-09-2011] THAT 'IF THE CREDITOR DISCLOSES HIS PAN AND CLAIMS TO BE AN ASSESSEE, THE AO CANNOT HIMSELF EXAMINE THE RETURN AND P&L A/C OF THE CREDITOR AND BRAND THE SAME AS UNWOR THY OF CREDENCE. INSTEAD, HE SHOULD ENQUIRE FROM THE CREDITOR'S AO AS TO THE GENUINENESS OF THE TRANSACT ION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY T HE CREDITOR'S AO. SO LONG IT IS NOT ESTABLISHED THAT T HE RETURN SUBMITTED BY THE CREDITOR HAS BEEN REJECTED BY THE CREDITOR'S AO; THE ASSESSEE'S AO IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR A ND THE GENUINENESS OF THE TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. 9. WHERE THE DEPARTMENT CONTENDED THAT THE ASSESSEE COMPANY WHILE DISCHARGING THE ONUS CAST ON IT HAS N OT ESTABLISHED THE CAPACITY OF THE CREDITOR THE HON. H E HELD THAT THE REVENUE COULD HAVE GONE BACK, IN SO FAR AS THE ASSESSEE WAS CONCERNED, TO DETERMINE WHETHER THE CREDITOR WAS A GENUINE PERSON AND WHETHER IT HAD REQUISITE CREDITWORTHINESS OR NOT. ONCE THAT WAS ESTABLISHED, THERE WAS NO OCCASION FOR THE REVENUE TO GO FURTHER TO FIND OUT WHETHER CREDITOR OF CREDITOR WA S ALSO GENUINE AND CREDITWORTHY. VEEDHATA TOWER P LIMITED ITA 7070/M/2014 4 THAT WOULD BE STRETCHING THE PROVISIONS OF SECTION 68 A LITTLE TOO FAR. CIT V. GLOCOM IMPEX (P) LIMITED [20 06] 299 ITR 571 (DELHI HC). 10. IT IS NOT BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN CREDITORS A ND SUB-CREDITORS NOR IT IS BURDEN OF ASSESSEE TO PROVE THAT SUB-CREDITOR HAD CREDITWORTHINESS TO ADVANCE CREDIT TO CREDITOR FROM WHOM CASH CREDIT HAD BEEN, EVENTUALLY , RECEIVED BY ASSESSEE. NEMI CHAND KOTHARI V. CIT[200 3] 264 ITR 254, (GAUHATI HC). 11. IT CAN NEVER BE WITHIN THE EXCLUSIVE KNOWLEDGE OF THE DEBTOR TO KNOW THE SOURCE OF INCOME OF THE CREDITOR . ONCE HE IS SUPPLIED THE CREDIT HE WANTS, HE IS SATISFIED , ONCE HE HAS FURNISHED THE TRUE IDENTITY, THE CORRECT ADD RESS AND CORRECT GIR NUMBER OF THE CREDITOR HE FULFILLS HIS OBLIGATIONS UNDER THE ACT. THE ASSESSEE IS NOT SUPP OSED TO KNOW THE CAPACITY OF THE MONEY LENDER OR CASH CREDITOR. IT IS WITHIN THE EXCLUSIVE DOMAIN OF THE CREDITOR. ADDL. CIT V. HANUMAN AGARWAL 151 ITR 150 (PATNA HC) . 12. HONBLE SUPREME COURT IN CIT V. LOVELY EXPORTS (P) LIMITED 216 CTR 195 HELD THAT IF THE SHARE APPLICAT ION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO , THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN TH EIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT N O ADDITION CAN BE MADE IN THE HANDS OF COMPANY RECEIV ING SUCH SUMS. 13. WHERE THE ASSESSEE HAD RECEIVED LOANS THROUGH ACCOUNT PAYEE CHEQUES AND THE CREDITORS HAD CONFIRM ED THE LOANS BY MAKING STATEMENT ON OATH, THE HIGH COU RT HELD THAT IN SUCH SITUATION THE ASSESSEE IS NOT REQ UIRED TO ESTABLISH THE CAPACITY OF THE LENDERS TO ADVANCE TH E MONEY AS THAT WOULD AMOUNT TO CALLING UPON THE ASSESSEE TO ESTABLISH THE SOURCE OF SOURCE. LABH CH AND BOHRA V. ITO [2008] 219 CTR 571. (RAJASTHAN HC). 14. WHERE THE ASSESSEE HAD PROVIDED, TO THE AO THE NAME, ADDRESS AND DETAILS OF SHARE APPLICANTS, ADDI TION U/S 68 CANNOT BE MADE. CIT V. STL EXTRUSION P. LIMI TED 333 ITR 269 (MP HIGH COURT). IN OUR CASE WE HAVE GO NE MANY STEPS BEYOND THIS AND PROVIDED MUCH MORE THAN THAT. 15. WHERE ADDITIONS ARE MADE BY THE ASSESSING OFFIC ER UNDER SECTION 68 OF THE ACT BY RELYING SOLELY ON TH E STATEMENT MADE BY A THIRD PERSON AND THE SAID STATEMENT WAS NOT GIVEN TO THE ASSESSEE NOR WAS THE ASSESSEE AFFORDED AN OPPORTUNITY TO CROSS EXAMINE T HE SAID PERSON, ON THESE FACTS, IT WAS HELD THAT THE ADDITIONS MADE BY THE AO WERE LIABLE TO BE DELETED ON THE GROUND THAT THE ADDITIONS WERE MADE IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, HEIRS & L.RS OF LATE LAXMANBHAI S. PATEL V, CIT [2008] 327 ITR 290. (GUJ, HC) 16. ASSESSEE HAVING ESTABLISHED IDENTITY OF SHAREHOLDERS, ADDITIONS U/S 68 CANNOT BE MADE ON TH E GROUND THAT ASSESSEE FAILED TO EXPLAINED SOURCE OF CREDIT. DEPARTMENT WAS FREE TO PROCEED AGAINST PERSONS GIVI NG SUMS IN ACCORDANCE WITH LAW. HINDUSTAN INK & RESINS LTD. V. DCIT [2011] 60 DTR 18 (GUJ. HC). VEEDHATA TOWER P LIMITED ITA 7070/M/2014 5 17. WHEN AN UNEXPLAINED CREDIT IS FOUND IN BOOKS OF ACCOUNT OF AN ASSESSEE INITIAL BURDEN IS PLACED ON ASSESSEE AND ONCE THAT ONUS IS DISCHARGED, IT IS FO R REVENUE TO PROVE THAT CREDIT FOUND IN WITH RESPECT TO DEPOSIT FOUND IN THE BOOKS OF ACCOUNTS OF ASSESSEE IS UNDISCLOSED INCOME OF ASSESSEE. CIT V. KINETIC CAPI TAL FINANCE LIMITED [20111 202 TAXMAN 548. (DELHI HC). 18. GENUINE OF RECEIPT OF SUMS BY ASSESSEE COMPANY HAD BEEN DULY ESTABLISHED BY THE ASSESSEE APART FRO M ESTABLISHING THE IDENTITY OF THE PERSONS AND THEREF ORE ADDITION U/S 68 WAS NOT CALLED FOR CIT V. WINSTRAL PETROCHEMICALS (P) LTD. [2010] 330 ITR 603. (DELHI HC). 19. WHERE CREDITORS ARE INCOME TAX ASSESSES, PAYMEN TS WERE MADE BY ACCOUNT PAYEE CHEQUES AND PAYMENTS WERE MADE FROM BANK ACCOUNT WITH SUFFICIENT FUNDS AVAILABLE, THERE IS NO MATERIAL TO DOUBT GENUINENES S OF TRANSACTIONS AND ADDITION IS NOT JUSTIFIED. P. K. S ETHI V. CIT [2006] 286 ITR 318 (GAUHATI HC). 20. ASSESSEE DISCHARGED ONUS BY PLACING (I) CONFIRM ATION LETTERS OF CASH CREDITORS; (II) THEIR AFFIDAVITS; ( III) THEIR FULL ADDRESS AND GIR NUMBERS AND PAN. IT COULD BE SAID T HAT ASSESSEE HAD DISCHARGED ITS BURDEN AND NO ADDITION TO HIS INCOME ON ACCOUNT OF CASH CREDITS WAS CALLED FO R CIT V. S. KAMALJEET SINGH [2005]147 TAXMAN 18 (ALLAHABA D HC). IN VIEW OF THE ABOVE IT IS APPARENT THAT THE DISALL OWANCE HAS BEEN MADE BY THE LEARNED AO WITHOUT APPRECIATIN G THE FACTS AND DETAILS ON RECORDS AND THE SAME DESER VES TO BE DELETED. 5. THE CIT(A), AFTER TAKING INTO ACCOUNT THE SUBMISSIONS OF THE ASSESSEE, HELD, I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF T HE CASE TOGETHER WITH FINDING OF THE ASSESSING OFFICER , ASSESSMENT PROCEEDINGS AND RIVAL SUBMISSION OF THE APPELLANT/A.R., CAREFULLY. I FIND THAT ASSESSING OF FICER HAS RIGHTLY REACHED TO THE CONCLUSION THAT UNSECURE D LOAN OF RS. 1,65,00,000/- SHOWN BY THE APPELLANT UNDER SCHEDULE 'C' OF THE BALANCE SHEET IS NOT FROM ANY G ENUINE SOURCE. THE UNSECURED LOAN SHOWN IN THE NAME OF M/S . LORRAINE FINANCE PVT. LTD. IS NOT AT ALL FROM GENUI NE SOURCE OF INCOME OR FUND. IT IS VERY OBVIOUS THAT ARRANGEMENT HAS BEEN MADE BY THE APPELLANT COMPANY IN CONNIVANCE WITH OFF THE RECORD PLAYER FLOATING V ARIOUS COMPANIES FOR UTILIZING UNACCOUNTED CASH / INCOME THROUGH SUCH CONCERNS AND ULTIMATELY GIVING WHILE C OLOUR OF TRANSACTION THROUGH BANK AS IF SUCH TRANSACTION IS GENUINE ONE. THE FACT EMERGED FROM THE INVESTIGATIO N AND DURING THE ASSESSMENT PROCEEDINGS REVEAL THAT APPEL LANT HAS UTILIZED ITS OWN UNACCOUNTED MONEY FOR OBTAININ G LOAN IN THE NAME OF M/S. LORRAINE FINANCE PVT. LTD. THE ORIGIN POINT OF THE FACT IS THAT MR. ABHISHEK MORAR KA, DIRECTOR OF CITYBASE MULTITRADE PVT. LTD. HAS ADMIT TED BEFORE THE SALES TAX DEPARTMENT THAT HE HAD ISSUED SALES BILLS THROUGH HIS CONCERN NAMELY CITYBASE MULTITRADE PVT. LTD. WITHOUT DOING ANY ACTUAL PURCH ASE VEEDHATA TOWER P LIMITED ITA 7070/M/2014 6 AND SALE OF GOODS. M/S. HITECH HAS OBTAIN PURCHASE BILLS OF RS. 5,63,05,275/- FROM THIS CONCERN AND AFTER SH OWING SALE PROCEED MERELY ON PAPER, HE HAS INTRODUCED THE UNACCOUNTED MONEY AND HAS GIVEN THE SAME TO M/S. LORRAINE FINANCE PVT. LTD. AND IN SEQUENCE, M/S. LORRAINE FINANCE PVT. LTD. HAS GIVEN UNSECURED LOAN TO THE APPELLANT COMPANY, HENCE IT IS VERY OBVIOUS THA T UNACCOUNTED MONEY HAS BEEN UTILIZED AND THROUGH BANKING CHANNEL SAME MONEY HAS BEEN RECEIVED BACK B Y THE ASSESSEE FOR ITS UTILIZATION. THUS, THE BLACK M ONEY HAS BEEN CHANNELIZED. IT IS VERY IMPORTANT TO POINT OUT THAT BY SHOW CAUSE NOTICE DATED 14.2.2013, ASSESSIN G OFFICER HAS MADE APPELLANT AWARE OF THE FACT NOTICE D BY HIM THAT THE SOURCE OF SUCH UNSECURED LOAN IS M/S. CITYBASE MULTITRADE PVT. LTD. WHO IS INVOLVED IN HA WALA TRANSACTION/ACCOMMODATION IS A BILL PROVIDER. THE DIRECTOR OF THE COMPANY HAS GIVEN CATEGORICAL STATE MENT BEFORE THE SALES TAX / VAT AUTHORITY. THE STATEMENT OF SHRI ABHISHEK MORARKA DATED 06.01.20 10 CONTAINING 1 TO 8 PAGES WERE GIVEN BY THE ASSESSING OFFICER TO T HE APPELLANT FOR ITS EXPLANATION AND FURTHER SUBMISSIO N OF THE EVIDENCES IN ITS SUPPORT. IT IS VERY IMPORTANT TO POINT OUT THAT INCOMPLIANCE OF THE SHOW CAUSE NOTICE DATE D 14.2.2014, APPELLANT HAS SUBMITTED A LETTER DATED 7.3.2013 EXPLAINING NOTHING. THE ONLY REPLY FILED B EFORE THE ASSESSING OFFICER IS THAT BANK BOOK AND BANK STATEMENT CLAIMED TO BE SHOWING ENTRY OF LOAN BY M/ S. LORRAINE FINANCE PVT. LTD. IS ENCLOSED WHEREAS THE BASIC QUESTION OF THE ASSESSING OFFICER WAS THAT ULTIMATE SOURCE OF SUCH LOAN ITSELF WAS BOGUS OR WAS NOT FRO M KNOWN SOURCE. THE ASSESSING OFFICER HAD GIVEN FULL FACTS AND BACKGROUND OF THE CASE TO THE APPELLANT, HENCE IT WAS THE RESPONSIBILITY OF THE APPELLANT TO PROVE BE YOND DOUBT THE GENUINENESS OF UNSECURED LOAN WITH RELIAB LE EVIDENCES. 3.5 APPELLANT HAS MERELY SUBMITTED THE EVIDENCE WHI CH HAS BEEN CREATED IN CONNIVANCE WITH SUCH PARTIES, H ENCE WHEN ASSESSING OFFICER HAS BROUGHT ON RECORD SUBSTANTIAL EVIDENCES AND FACTS PROVE OTHERWISE THA N CLAIM BY THE SUCH PARTIES, IT WAS THE HEAVY RESPONS IBILITY OF THE APPELLANT TO BRING ON RECORD MORE RELIABLE F ACTS AND EVIDENCES INSTEAD OF MERELY REFERRING THE BANK STATEMENT OR CONFIRMATION LETTER OF CREDITOR. OBVIO USLY, APPELLANT HAS FAILED TO ESTABLISH THE CREDITWORTHIN ESS OF THE M/S. LORRAINE FINANCE PVT. LTD. AND GENUINENESS OF TRANSACTION. ASSESSING OFFICER HAS VERY INTELLIGENT LY AND EFFECTIVELY MADE THE INVESTIGATION AND HAS HAD ASKE D THE APPELLANT THROUGH PROPER SHOW CAUSE NOTICE FOR EXPLANATION. APPELLANT HAS NOT BEEN ABLE TO ESTABLI SH ITS CASE OTHERWISE, HENCE IN THE BACKGROUND OF FACTS AN D CIRCUMSTANCES OF THE CASE, THE FINDING OF THE ASSES SING OFFICER DESERVES APPROVAL AND SUSTENANCE. 3.6 IT IS PERTINENT TO MENTION THAT IN THE BACKGROU ND OF SUCH FACTS AND CIRCUMSTANCES OF THE CASE THE HON'BL E ITAT INDORE BENCH IN THE CASE OF M/S. AGARWAL COAL CORPORATION PVT. LTD. VS. ADDL.CIT, RANGE - 5, INDO RE VIDE I.T.A. NOS.151/IND./2009 AND 283/IND/2010, AYRS 2005-06 & 2006-07 DATED 31.10.2011 HAS SUSTAINED M/S.VEEDHOTA TOWER PVT. LTD. A. Y.2010-11 VEEDHATA TOWER P LIMITED ITA 7070/M/2014 7 SUCH ADDITIONS MADE UJS.68 OF THE I.T. ACT. 3.7 PROVISIONS OF LAW U/S. 68 GIVES LEGAL AUTHORITY TO THE ASSESSING OFFICER TO DEEM SUCH INCOME OF THE APPELL ANT VIDE SHREELEKHA BANNERJI VS. CIT (1963) 49 ITR 112( SC) AND GANPATHY MUDALIAR (1964) 53 ITR 623 (SC) AND CI T VS. DURGA PRASAD MORE (1069) 72 ITR 807 (SC). IT IS FURTHER RELEVANT TO MENTION THAT IT IS THE APPELLAN T WHO HAS TO PROVE THE GENUINENESS OF CREDIT APPEARING IN THE BOOKS OF ACCOUNT VIDE SETH KALEKHAN MD. HANIF VS. C IT (1958) 34 ITR 669, 673, 674 (MP). FURTHER, MERE FURNISHING OF THE PARTICULARS IS NOT ENOUGH. MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS ALSO NOT SACROSA NCT NOR CAN IT MAKE A NON-GENUINE TRANSACTION GENUINE O NE. IT IS VERY EVIDENT THAT ATTEMPT HAS BEEN MADE TO TA KE SHELTER OF THE VARIOUS LEGAL PROPOSITIONS THAT THER E IS NO NEED TO SUCH RECIPIENT TO PROVE THE SOURCE OF SOURC ES. SUCH PROPOSITIONS IS NOT APPLICABLE TO THE FACTS OF THE CASE OF THE APPELLANT BECAUSE AFTER RECEIPT OF JUST IFICATORY EVIDENCES, ASSESSING OFFICER HAS MADE THE INVESTIGA TIONS OR UTILIZED THE OUTCOME OF INVESTIGATION IN THE CAS E OF CITYBASE MULTITRADE PVT. LTD., HENCE THE ULTIMATE S OURCE OF SUCH FUND UNDER REFERENCE IS FOUND TO BE CREATED BY UTILIZING BLACK MONEY OR UNACCOUNTED INCOME AND THA T IS WHY IN CONNIVANCE, SUCH ARRANGEMENT HAS BEEN MADE JUST WITH A VIEW TO GIVE WHITE COLOUR TO SUCH TRANS ACTION. WHILE REVIEWING THE FACTS AND CIRCUMSTANCES OF THE CASE, ONE CANNOT IGNORE SUCH VISIBLE OR IMPLIED FACTS. THUS, LD. ASSESSING OFFICER HAS DISCHARGED HIS ONUS AND HAS COMMUNICATED THE FACTS TO THE APPELLANT FOR ITS REBUTTAL AND FURTHER REPRESENTATION OR FOR SUBMISSI ON OF CONTRARY EVIDENCES. BUT, IT IS WORTHWHILE TO MENTIO N THAT APPELLANT HAS FAILED NOT ONLY BEFORE THE ASSESSING OFFICER BUT ALSO DURING THE APPELLATE PROCEEDINGS, APPELLAN T HAS MERELY REFER TO THE EVIDENCES WHICH WERE ALREADY SUBMITTED TO THE ASSESSING OFFICER . THUS IT IS VERY EVIDENT THAT CONTRARY FACTS HAVE NO T BEEN ESTABLISHED IN THE APPELLATE PROCEEDINGS THEREFORE I FIND NO REASON TO IGNORE THE FINDING OF THE ASSESSING OF FICER OR TO ACCEPT THE UNSUBSTANTIATED ARGUMENTS OF THE LD. A.R. THE VARIOUS CASES LAWS RELIED UPON BY THE A.R., IS OF NO AVAIL BECAUSE ULTIMATELY ASSESSING OFFICER HAS PROV ED THAT THERE IS NO GENUINE SOURCE OF FUNDS. THE CLAIM OF THE APPELLANT THAT IT HAS TAKEN UNSECURED LOAN FROM A COMPANY AND WHEN INVESTIGATION WAS MADE IT WAS FOUND THAT ULTIMATE SOURCE ITSELF IS NOT FROM ANY G ENUINE BUSINESS ACTIVITIES BUT WAS DONE THROUGH HAWALA TRANSACTION. WHEN ASSESSING OFFICER HAD COMMUNICATE D THESE MATERIAL FACTS IT WAS THE RESPONSIBILITY OF T HE APPELLANT TO PROVE SOME THIS MORE, BUT IT IS SEEN T HAT APPELLANT HAS FAILED TO ESTABLISH ANY CONTRARY FACT S. AS REGARDS, DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. 216 CTR 19 5 (SC). IT IS PERTINENT TO MENTION THAT WHILE DEALING WITH SUCH SITUATION THE HON'BLE ITAT INDORE IN THE CASE OF M/S. AGARWAL COAL CORPORATION LTD. VS. ADDL.CIT (SU PRA) HAS DISTINGUISHED AND HAS DISCUSSED THE BACKGROUND OF THAT CASE. IT IS YET WORTHWHILE TO MENTION THAT IF UNSECURED LOAN IS FOUND TO BE NOT FROM ANY GENUINE VEEDHATA TOWER P LIMITED ITA 7070/M/2014 8 SOURCES, ASSESSING OFFICER IS WELL WITHIN HIS JURIS DICTION TO TAX IT U/S.68 OF THE I.T. ACT. WHILE REVIEWING T HE FACTS AND CIRCUMSTANCES OF THE CASE, I REACH TO THE CONCL USION THAT ASSESSING OFFICER HAS BEEN ABLE TO ESTABLISH H IS FINDING AND CONTRARY FACTS HAS NOT BEEN PROVED BY T HE APPELLANT EITHER BEFORE THE ASSESSING OFFICER OR DU RING THE APPELLATE PROCEEDINGS. 6. THE CIT(A), THUS SUSTAINED THE ORDER OF THE AO. 7. AGAINST THE ORDER, THE ASSESSEE IS NOW BEFORE THE ITAT. 8. BEFORE US, THE AR SUBMITTED THAT THE ASSESSEE TOOK AN UNSECURED LOAN FROM LORRAINE FINANCE PVT. LTD. (LFPL), WHO H AD SUBMITTED COMPLETE DETAILS AND CONFIRMATIONS BEFORE THE AO IN THE PROCEEDINGS GOING ON FOR THE ASSESSEE. ON THIS FACT, THE ASSESSEE HAS PLACED RELIANCE ON A NUMBER OF DECISIONS, REN DERED BY VARIOUS FORA, WHEREIN THE CRUX OF THE ISSUE IS THAT TH E ASSESSEE HAS TO PROVE THE GENUINENESS OF HIS/ITS CREDIT OR, I.E. THE SOURCE. THE SOURCE OF SOURCE NEED NOT BE PROVED. BUT IN THE INSTANT CASE, THE SOURCE OF SOURCE HAS ALSO BEEN PROVED . THE ASSESSEE HAS PLACED RELIANCE ON THE FOLLOWING DECISION, 9. THE AR, THEREFORE, SUBMITTED THAT THE ADDITION AS MADE , SHOULD BE DELETED. 10. THE DR ON THE OTHER HAND SUBMITTED THAT THE AO H AS GONE AN EXTRA MILE TO STRETCH HIS INVESTIGATION AND TO PROVE T HE EVIDENCES AS PRODUCED AS WRONG. 11. THE DR THEREFORE, SUBMITTED THAT THE REVENUE AUTH ORITIES ORDER BE SUSTAINED. 12. WE HAVE HEARD THE ARGUMENTS AND HAVE PERUSED THE MATERIAL ON RECORD. THE BASIC ISSUE IS THAT WHETHER THE LO AN HAS COME FROM A GENUINE SOURCE. THE FACTS THAT THE LOAN HAS BEEN VEEDHATA TOWER P LIMITED ITA 7070/M/2014 9 RAISED FROM LORRAINE FINANCE PVT. LTD. IS NOT DISPUTED. THE FACT THAT LORRAINE FINANCE PVT. LTD. HAS SUBMITTED THE CONFIRMA TIONS, BANK ACCOUNT DETAILS AND ITS SOURCE OF FUNDS IS ALSO NOT DISPUTED. WHAT IS DISPUTED BY THE AO IS THE SOURCE OF SOU RCE OF SOURCE. BUT WHAT WE ARE CONCERNED WITH IS LOAN RECEIVED FROM M/S LORRAINE FINANCE P LIMITED. THE FACT THAT LFPL HAS CONFIRMED THE SAME THROUGH VARIOUS MEANS SUCH AS CONFIRMATION THROUGH US, CONFIRMATION THROUGH RESPONSE U/S 133(6) AS WELL AS CONFIRMATION THROUGH THEIR PERSONAL APPEARANCE UNDER SECTION 131 IS NOT DISPUTED. THE FACT T HAT THEY HAVE DEMONSTRATED THEIR SOURCE OF FUNDS EVEN IN THE STA TEMENT, THOUGH THE SAME WAS NOT REQUIRED IN TERMS OF SECTION 68 IS ALSO NOT DISPUTED BY THE REVENUE AUTHORITIES. IT IS ALSO A FACT THAT A SUM OF RS. 64,25,000/- HAS ALREADY BEEN REFUNDED TO THEM, THROUGH ACCOUNT PAYEE CHEQUES. THE BALANCE OUTSTANDING , AS OF NOW IS RS. 1,00,75,000/- AND NOT 1,65,00,000/-. 13. THE LINE OF THINKING OF THE REVENUE AUTHORITIES THA T SECTION 68 HAS BEEN AMENDED BY FINANCE ACT, 2012 WHEREIN A RESPONSIBILITY HAS BEEN CAST ON THE ASSESSEE TO SUBMIT D ETAILS OF SOURCE OF FUNDS, I.E., FROM WHOM THE FUNDS HAVE BEEN RECEIV ED DOES NOT CAST THE DUTY ON THE ASSESSEE TO SUBMIT DET AILS OF SOURCE OF FUNDS OF THE PERSON WHO HAS GIVEN FUNDS TO LEN DER OF ASSESSEE I.E., SOURCE OF SOURCE OF SOURCE. IF THAT WAS THE INTENTION THAN IT IS A NEVER ENDING CHAIN. IN ANY CASE, THE AMENDED SECTION 68 COMES INTO FORCE FROM 01-04-2013, THA T IS, FROM ASSESSMENT YEAR 2013-14 ONWARDS, IN THAT SENSE, TRANSACTION PERTAINING TO ASSESSMENT YEAR 2010-11 DOES NOT FALL WITHIN THE MISCHIEF OF AMENDED PROVISION. THE ASSESSEE IN GOO D FAITH COOPERATED WITH REVENUE AUTHORITIES, AND PERSUADED THEIR PARTY TO SUBMIT THEIR RESPECTIVE RESPONSES AND LFPL HA S DONE ALL IT COULD, INCLUDING THE RECORDING OF THE STATEMENT. VEEDHATA TOWER P LIMITED ITA 7070/M/2014 10 14. AS WE HAVE OBSERVED EARLIER THAT IT IS A NEVER EN DING CHAIN, THEN IF SOME OF THE TRANSACTIONS OF M/S HITECH ENGINEERS H AVE NOT BEEN CONFIRMED BY THEIR PARTY, HOW CAN THE BLAME OF FA RCE COME ONTO LFPL, AND TO BE HELD AS NON-GENUINE. IF THE R EVENUE AUTHORITIES HAD ANY INFORMATION THEN, WITHOUT THE KNOWLEDGE OF THE ASSESSEE, THE SAME WAS EXCHANGED BY THE AOS AND CONSEQUENTLY HELD AGAINST THE ASSESSEE. IN THIS PROCEED ING, ASSESSEE WAS NOT EVEN INVOLVED. IT IS A FACT THAT THE A SSESSEE DID NOT HAVE ANY DEALINGS WITH EITHER HITECH OR CITIBASE MULTIME DIA. THIS FACT, EVEN THE REVENUE AUTHORITIES WERE NOT ABLE TO CONTROVERT. IN THE STATEMENT OF MR. N C TRIVEDI, PROPRIETO R OF HITECH, HAD SUBMITTED THE SALES TAX NO., ITS STOCK ACCOUNT S AND THE BANK STATEMENTS AND HE HAD STATED THAT HITECH WH O HAD A TURNOVER OF OVER 5.60 CRORES HAD ADVANCED FUNDS TO LFP L. BUT THE REVENUE AUTHORITIES WENT FURTHER AND QUIZZED THE DIR ECTOR OF CITIBASE MULTITRADE, WHO STATED THAT THEY WERE PROVIDING B OOK ENTRIES. PROBABLY, THIS WAS THE REASON, WHY THE REVENUE AUTHORITIES HAD BEEN USING THE PHARSE, UNHOLY NEXUS. I F THE LEARNED AO WAS IN POSSESSION OF ANY SUCH INFORMATION, WHY INSTEAD OF SUPPLYING THE SAME TO RESPECTIVE AO OF SAID P ARTIES, THE SAME WAS USED AGAINST APPELLANT AS THERE IS NO CONN ECTION WHATSOEVER BETWEEN US AND THE DEALINGS OF SAID PARTIES. 15. WE FIND THAT HONBLE CALCUTTA HIGH COURT IN THE CAS E OF CIT VS DATAWARE PRIVATE LIMITED, IN ITA 263 OF 2011 DAT ED 02- 09-2011, HELD, THAT IF THE CREDITOR DISCLOSES HIS PAN AND CLAIMS TO BE AN ASSESSEE, THE AO CANNOT HIMSELF EXAMINE THE RETURN AND PROFIT & LOSS ACCOUNT OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. INSTEAD, HE SHOULD HAVE ENQUI RED FROM THE CREDITOR'S AO AS TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE CREDITOR'S AO. SO LONG IT IS NOT ES TABLISHED THAT THE RETURN SUBMITTED BY THE CREDITOR HAS BEEN REJECTED BY THE CREDITOR'S AO, THE ASSESSEE'S AO IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDIT OR AND VEEDHATA TOWER P LIMITED ITA 7070/M/2014 11 THE GENUINENESS OF THE TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. THIS, IN THE APPEAL BEFORE US, HAS NOT BEEN SEEN. 16. ONCE THE CREDITOR WAS ESTABLISHED, THERE WAS NO O CCASION FOR THE REVENUE TO GO FURTHER TO FIND OUT WHETHER CREDIT OR OF CREDITOR WAS ALSO GENUINE AND CREDITWORTHY. MEANING WHER EBY, AS IN THE APPEAL BEFORE US, THE AO OF HIGHTECH SHOULD HAV E CORRESPONDED THAT THE TRANSACTION WITH HIGHTECH AND L FPL WAS NOT GENUINE. 17. AS HELD BY HONBLE DELHI HIGH COURT IN THE CASE O F CIT VS GLOCOM IMPEX (P) LTD., REPORTED IN 299 ITR 571, WOULD BE STRETCHING THE PROVISIONS OF SECTION TOO MUCH. 18. IN THE CASE OF NEMI CHAND KOTHARI VS CIT, REPORT ED IN 264 ITR 254, (GAUHATI HC), IT IS NOT BURDEN OF THE ASSESSEE TO PROVE THE GENU INENESS OF THE TRANSACTIONS BETWEEN CREDITORS AND SUB-CREDITOR S NOR IS IT THE BURDEN OF ASSESSEE TO PROVE THAT SUB-CREDITO R HAD CREDITWORTHINESS TO ADVANCE CREDIT TO CREDITOR FROM WHOM CREDIT HAD BEEN EVENTUALLY RECEIVED BY ASSESSEE. 19. IN THE CASE OF ADDL. CIT VS HANUMAN AGARWAL, REPO RTED IN 151 ITR 150 (PATNA HC), IT HAS BEEN HELD, IT CAN NEVER BE WITHIN THE EXCLUSIVE KNOWLEDGE OF THE DEBTOR TO KNOW THE SOURCE OF INCOME OF THE CREDITOR . ONCE HE HAS FURNISHED THE TRUE IDENTITY, THE CORRECT ADDRES S AND CORRECT GIR NUMBER OF THE CREDITOR, HE FULFILLS HIS OBLIGATIONS UNDER THE ACT. THE ASSESSEE IS NOT SUPPOSED TO KNOW THE CAPACITY OF THE MONEY LENDER OR CASH CREDITOR. IT I S WITHIN THE EXCLUSIVE DOMAIN OF THE CREDITOR. 20. EVEN HONBLE SUPREME COURT IN THE CASE OF CIT V S LOVELY EXPORTS (P) LIMITED, REPORTED IN 216 CTR 195 HAS HELD, THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, W HOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS F REE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT NO ADDITION CAN BE MADE IN THE HANDS OF COMPANY RECEIVING SUCH SUMS. VEEDHATA TOWER P LIMITED ITA 7070/M/2014 12 21. IN THE CASE OF LABH CHAND BOHRA VS ITO, REPOR TED IN 219 CTR 571 (RAJASTHAN HC), THE HONBLE HIGH COURT LAYS DOWN THAT WHERE THE ASSESSEE HAD RECEIVED LOANS THROUGH ACCOUN T PAYEE CHEQUES AND THE CREDITORS HAD CONFIRMED THE LOANS BY MAKING STATEMENT ON OATH, IN SUCH A SITUATION, THE ASSESSEE IS NOT REQUIRED TO ESTABLISH THE CAPACITY OF THE LENDERS TO ADVANCE THE MONEY AS THAT WOULD AMOUNT TO CALLING UPON THE ASSESS EE TO ESTABLISH THE SOURCE OF SOURCE. 22. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF CIT VS ST L EXTRUSION P LTD., REPORTED IN 333 ITR 269, THAT WHERE THE ASSESSEE HAD PROVIDED, TO THE AO TH E NAME, ADDRESS AND DETAILS OF SHARE APPLICANTS, ADDI TION U/S 68 CANNOT BE MADE. 23. THE THIRD PARTY STATEMENT TAKEN AT THE BACK OF THE ASSESSEE AND USED AGAINST HIM IS A CLEAR VIOLATION OF NATURAL JUSTICE , ON THIS GROUND ITSELF, THE ADDITION CAN BE DELETED, AS HAS BEEN HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HEIRS & LRS OF LATE LAXMANBHAI S. PATEL VS CIT, REPORTED IN 327 ITR 290 (GUJ, HC). 24. HONBLE GUJARAT HIGH COURT IN THE CASE OF HINDUST AN INK & RESINS LTD. V. DCIT [2011] 60 DTR 18 (GUJ. HC), LAID DOWN THE PROPOSITION THAT ASSESSEE HAVING ESTABLISHED THE IDEN TITY OF SHAREHOLDERS, ADDITIONS U/S 68 CANNOT BE MADE ON THE GR OUND THAT ASSESSEE FAILED TO EXPLAINED SOURCE OF THEIR CREDIT. DEPARTMENT WAS FREE TO PROCEED AGAINST THOSE PERSONS GIVING SUMS, WHICH ACCORDING TO THE REVENUE REMAINED UNEXPLAINE D, IN ACCORDANCE WITH LAW. 25. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KINET IC CAPITAL FINANCE LIMITED, REPORTED IN 202 TAXMAN 548 (DELHI HC), HELD, THAT WHEN A CREDIT IS FOUND IN BOOKS OF ACCOUNT OF AN VEEDHATA TOWER P LIMITED ITA 7070/M/2014 13 ASSESSEE, INITIAL BURDEN IS PLACED ON ASSESSEE, BUT ONCE THAT ONUS IS DISCHARGED, IT IS FOR REVENUE TO PROVE THAT CREDIT FOUND IN WITH RESPECT TO DEPOSIT FOUND IN THE BOOKS OF ACCOUNTS OF ASSESSEE IS UNDISCLOSED INCOME OF ASSES SEE. 26. A GENUINE RECEIPT OF SUM BY THE ASSESSEE COMPANY HAD BEEN DULY ESTABLISHED BY THE ASSESSEE BY ESTABLISHING TH E IDENTITY OF THE PERSON FROM WHOM THE CREDIT CAME. IN THAT CASE, ADDITION U/S 68 WAS NOT CALLED FOR, AS HELD IN THE CASE OF CIT VS WINSTRAL PETROCHEMICALS (P) LTD. REPORTED IN 330 ITR 603 (D ELHI HC). 27. WHERE CREDITORS ARE INCOME TAX ASSESSES, PAYMENT S WERE MADE BY ACCOUNT PAYEE CHEQUES AND PAYMENTS WERE MAD E FROM BANK ACCOUNT WITH SUFFICIENT FUNDS AVAILABLE, THERE IS NO MATERIAL TO DOUBT GENUINENESS OF TRANSACTIONS AND ADDITION IS NOT JUSTIFIED. P.K. SETHI VS CIT, REPORTED IN 286 ITR 318 (G AUHATI HC). 28. ASSESSEE DISCHARGED ONUS BY PLACING (I) CONFIRMATION LETTERS OF CASH CREDITORS; (II) THEIR AFFIDAVITS; (III) THEIR FULL ADDRE SS AND GIR NUMBERS AND PAN. IT COULD BE SAID THAT ASSESSE E HAD DISCHARGED ITS BURDEN AND NO ADDITION TO HIS INCOME ON AC COUNT OF CASH CREDITS WAS CALLED FOR, AS REPORTED IN THE CASE OF CIT VS S. KAMALJEET SINGH, IN 147 TAXMAN 18 (ALLAHABAD HC). 29. THE ISSUE BEFORE US WAS WHETHER THE LOAN TAKEN B Y THE ASSESSEE FROM LFPL WAS GENUINE OR NOT. WE HAVE SEEN TH AT THE AO WENT AN EXTRA MILE, FROM SOURCE TO SOURCE TO SOURCE, WHICH AS PER THE VARIOUS DECISIONS BY THE VARIOUS FORA HAS BEE N HELD TO BE FUTILE EXERCISE. CALLING FOR CREDITORS DETAILS IS UNDERSTANDA BLE, BUT IF THE REVENUE AUTHORITIES GO ON AND ON, THIS EFFECTS T HE REPUTATION OF THE PERSON TAKING LOAN. THE FACT THAT THE A SSESSEE HAS ALREADY RETURNED A PART OF THE LOAN TAKEN, GOES ON TO PROVE THAT NEITHER THE LOAN WAS BOGUS, NOR THE REPAYMENT WAS BOGUS. VEEDHATA TOWER P LIMITED ITA 7070/M/2014 14 30. ON THE OTHER HAND, THE FACT THAT THE DIRECTOR OF THE CREDITOR HAS ACCEPTED THE GIVING OF THE LOAN AND ALSO SUBMITTING IT S BANK STATEMENTS AND OTHER FINANCIALS, PROVE THAT THE LOAN OF R S. 1,65,00,000/- WAS A GENUINE TRANSACTION. 31. KEEPING IN VIEW THE RATIOS OF THE ABOVE DECISION, A ND THE FACTS, AS DETAILED BY THE AO IN HIS ORDER, UPTO THE BANK A CCOUNT OF LFPL, WE ARE OF THE OPINION THAT THE ADDITION HAS BEEN MADE BY THE AO WITHOUT APPRECIATING THE FACTS AND DETAILS ON R ECORDS AND THE SAME DESERVE TO BE DELETED. 32. WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) ON THE IMPUGNED ISSUE AND DIRECT THE AO TO DELETE THE ADDITION O F RS. 1,65,00,000/- AS MADE BY HIM. 33. IN THE RESULT, THE APPEAL, AS FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY, 2015. SD/- SD/- ( ) ( ) . . . . . . . . (R C SHARMA) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 21 ST JANUARY, 2015 !(/ COPY TO:- 1) / THE APPELLANT. 2) !' / THE RESPONDENT. 3) THE CIT(A)-II, THANE. 4) THE CIT -III, THANE. 5) 2&34 !(% , , / THE D.R. H BENCH, MUMBAI. 6) 456 7 VEEDHATA TOWER P LIMITED ITA 7070/M/2014 15 COPY TO GUARD FILE. ./% / BY ORDER / / TRUE COPY / / 8 / 9 : , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * *CHAVAN, SR.PS