MITTAL ROLLAR & FLOOR MILLS, Jaipur V. ITO, BHARATPUR

ITA 784/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2238 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA CIT DHK
• Keywords: Rejection of books of accounts
• Section: 143(3); 234B; 68; 145; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 784/JP/2016 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 M/S MITTAL ROLLAR & FLOOR MILLS, RIICO INDUSTRIAL AREA, DHOLPUR (RAJ). CUKE VS. INCOME TAX OFFICER, WARD-3, BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAJFM 7663 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. JAIN (ADV) & SHRI ASHOK KUMAR GUPTA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 09/01/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A), ALWAR DATED 21/06/2016 FOR THE A.Y. 2 011-12. 2. THE RETURN OF INCOME WAS E-FILED ON 30/09/2011 DEC LARING TOTAL INCOME OF RS.3,84,850/-.THE ASSESSMENT WAS FINALIZED U/S 143(3) OF THE INCOME TAX ACT,1961 (IN SHORT THE ACT) AT AN INCOME OF RS. 24,59,157/- MAKING ADDITIONS OF RS.20,74,307/-. THE ASSESSING OF FICER MADE ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 2 ADDITION OF RS. 10,46,807/- AFTER REJECTING THE BOO KS OF ACCOUNT AND THEN ESTIMATED THE TURNOVER AND G.P. THEREON. THE OTHER A DDITIONS MADE BY THE ASSESSING OFFICER WAS OF RS. 10,27,500/- BY INVO KING THE PROVISIONS OF SECTION 68 OF THE ACT. 3. THE LD. CIT(A) SUSTAINED THE REJECTION OF BOOKS OF ACCOUNT. HOWEVER, HE ACCEPTED THE TURNOVER DECLARED BY THE AS SESSEE BY HOLDING THAT THE ASSESSING OFFICER HAS FAILED TO BRING ON R ECORD ANY ADVERSE MATERIAL TO JUSTIFY THE QUANTIFICATION OF UNDISCLOS ED TURNOVER AND HE ALSO REDUCED THE G.P. RATE FROM 8.5% AND ADOPTED BY ASSE SSING OFFICER TO 8% ON THE DECLARED TURNOVER AND SUSTAINED THE ADDIT ION OF RS. 7,34,784/- ON ACCOUNT OF G.P. AND THE LD. CIT(A) ALS O SUSTAINED THE ADDITION OF RS. 10,27,500/- MADE U/S 68 OF THE ACT. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LD. CIT(A) ALWAR HAS GROSSLY ERRED IN LAW AND FACTS IN UPHOLDI NG BEST JUDGMENT ASSESSMENT U/S 144 BASED ON PURE GUESS WITHOUT REFERENCE TO ANY EVIDENCE OR MATERIAL AT ALL, SUCH ASSESSMENT IS LIABLE TO BE QUASHED. ESTIMATE OF INCOME MUST BE FA IR, REASONABLE AND INTELLIGENT WELL- GROUNDED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) ALWAR HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRM ING TRADING ADDITIONS OF RS.7,34,983/- BY APPLYING GP 8% ON DEC LARED TURNOVER WITHOUT ANY MATERIAL FACTS ON RECORD AND THEREFORE ADDITIONS IS WITHOUT JUSTIFICATION. ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 3 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) ALWAR HAS GROSSLY ERRED IN LAW AND FACTS IN REJECTI NG AUDITED BOOKS OF ACCOUNTS MAINTAINED IN REGULAR COURSE OF BUSINESS. THE BOOKS OF ACCOUNTS ARE AUDITED BY CA SIMULTANEOUSLY IT IS JUDICIOUSLY OBLIGATORY ON THE PART OF THE DEPARTMENT ALSO TO AC CEPT THE AUDITED ACCOUNTS FOR TAX PURPOSES AND INVOKING PROV ISION OF SECTION 145(3) WITHOUT VALID REASONS AND THUS AND T HEREFORE REJECTION OF BOOKS OF ACCOUNTS IS WITHOUT ANY EVIDE NCE / MATERIAL ON RECORD. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) ALWAR HAS GROSSLY ERRED IN LAW AND FACTS IN NOT ISS UING PROPER & VALID SHOW CAUSE NOTICE BEFORE MAKING BEST JUDGMENT ASSESSMENT ORDER ADDITIONS / DISALLOWANCE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) ALWAR HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRM ING ADDITION OF UNSECURED LOAN RS. 10,27,500/- U/S 68 OF THE IT ACT AND FURTHER ERRED IN NOT ACCEPTING AFFIDAVIT OF SURESH CHAND DU LLY ATTESTED BY NOTARY PUBLIC. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) ALWAR HAS GROSSLY ERRED IN LAW AND FACTS IN CHARGIN G U/S 234B RS.2,42,620/- & 234C RS. 4,402/-. 5. IN THE GROUNDS NO. 1 TO 4 OF THE APPEAL, THE ASS ESSEE HAS CHALLENGED THE ESTIMATING THE INCOME AFTER REJECTIN G THE BOOKS OF ACCOUNT, WHICH HAS BEEN REDUCED BY THE LD. CIT(A). WH ILE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS SUBMITTED THA T THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT, WHICH ARE DULY AUDITED BY THE AUDITORS. THE ASSESSEE IS ALSO MAINTAINING BILLS, VOUCHERS AND DSO REGISTER, WHICH WAS PRODUCED BEFORE THE ASSESSING OFFICER AND THE SA ME WERE TEST EXAMINED. SINCE THE BOOKS OF ACCOUNT WERE DULY AUDIT ED BY A QUALIFIED ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 4 C.A. AND WITHOUT SPECIFYING ANY SPECIFIC DEFECTS, TH E REJECTION OF BOOKS OF ACCOUNT WAS WITHOUT ANY REASONS. FURTHER THE LD. A R HAS SUBMITTED THAT THE LD. CIT(A) HIMSELF HAS ACCEPTED THE DECLA RED TURNOVER OF THE ASSESSEE IN ABSENCE OF ANY MATERIAL CONTRARY TO THE DECLARED TURNOVER, THEREFORE, THE ESTIMATION @ 8% IS ALSO ARBITRARY AND WITHOUT ANY BASIS. THE LD AR FURTHER SUBMITTED THAT THE ASSESSEES CASE FALLS U/S 44AB OF THE ACT AND THE RETURN OF INCOME WAS FILED WITHIN DUE DATE ALONGWITH AUDITED ACCOUNTS. THE LD. CIT(A) HAS CATEGORICALLY S TATED IN HIS ORDER THAT THE ASSESSING OFFICER HAS FAILED TO BRING ON R ECORD ANY ADVERSE MATERIAL TO JUSTIFY THE QUANTIFICATION OF UNDISCLOS ED TURNOVER. ONCE THE TURNOVER HAS BEEN ACCEPTED AS PER BOOKS OF ACCOUNT AND NO SPECIFIC DEFECT HAS BEEN POINTED OUT IN EXPENSES CLAIMED IN P&L ACCOUNT THEN THE DECLARED G.P. OF THE ASSESSEE DESERVE TO BE ACC EPTED. HE PLEADED THAT IN ABSENCE OF ANY SPECIFIC DEFECTS IN THE VARI OUS EXPENSES CLAIMED BY THE ASSESSEE, THE REVENUE AUTHORITIES WERE NOT JU STIFIED IN ESTIMATING THE G.P. WITHOUT ANY BASIS. HE ALSO RELIED ON THE DE CISION OF HONBLE ITAT DELHI G BENCH IN THE CASE OF ITO VS. SAI INTE RNATIONAL IN ITA NO. 1406 (DELHI) OF 2012 FOR THE PROPOSITION THAT WHEN THE ASSESSEE IS MAINTAINING PROPER BOOKS OF ACCOUNT WITH FULLY VOUCH ED VOUCHERS AND NO DEFECT HAS BEEN POINTED OUT NOR ANY ADVERSE MATERIA L ON RECORD ON THE BASIS OF WHICH THE G.P. CAN BE ENHANCED, IN SUCH A S ITUATION, THE G.P. ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 5 CANNOT BE VARIED OR BE COMPARED FROM THE PRECEDING YEARS AND THE HONBLE ITAT HELD THAT SUCH ADDITION TO THE GROSS PR OFIT IS ERRONEOUS. IT WAS ALSO HELD THAT PROVISIONS OF SECTION 145(2) CANN OT BE INVOKED WHERE COMPLETE BOOKS OF ACCOUNT ARE MAINTAINED AND MOST O F THE VOUCHERS ARE EXTERNAL VOUCHERS AS HELD IN THE CASE OF SMT. P.K. JAIN ITO (1999) 22 TAX WORLD 498. IN ABSENCE OF ANY SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT WHEN THE BOOKS OF ACCOUNT ARE PROPERLY AUDI TED BY THE QUALIFIED C.A. U/S 44AB OF THE ACT AND THE AUDIT REPORT WAS SU BMITTED ALONGWITH THE RETURN OF INCOME THEN REJECTION OF BOOKS OF ACC OUNT WAS COMPLETELY UNJUSTIFIED. RELIANCE WAS PLACED ON THE FOLLOWING CAS E LAWS:- 1. NAMASI VAYAM CHATTIOR VS. CIT, (1960) 39 ITR 579 SC 2. (1954) 26 ITR 159 (PUNJ.) 3. (1960) 38 ITR 152 (KER.) 4. (1975) 101 ITR 721 (J&K) 5. SIMILAR VIEW HAS BEEN TAKEN IN FOLLOWING CASES A. (HC), 80 TAXMAN 184 (GAU,) 6. (HC) [2010], 325 ITR 13 (DEL,). IN THIS CASE, T HE HON'BLE DELHI HIGH COURT HAS HELD AS UNDER: THE ACCOUNTS WHICH ARE REGULARLY MAINTAINED IN THE COURSE OF BUSINESS AND ARE DULY AUDITED, FREE FROM ANY QUALIFICATION B Y THE AUDITORS, SHOULD NORMALLY BE TAKEN AS CORRECT UNLESS THERE ARE ADEQU ATE REASONS TO INDICATE THAT THEY ARE INCORRECT OR UNRELIABLE. THE ONUS IS UPON THE REVENUE TO SHOW THAT EITHER THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE INCORRECT OR ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 6 INCOMPLETE OR THAT THE METHOD OF ACCOUNTING ADOPTED BY HIM WAS SUCH THAT TRUE PROFITS OF THE ASSESSEE CANNOT BE DEDUCTED THE RE FROM. THE ASSESSEE HAS FURTHER RELIED UPON THE FOLLOWING DECISIONS: THE HON'BLE JODHPUR IT AT IN THE CASE OF GANESH FO UNDRY VS INCOME- TAX OFFICER. IT HAS HELD THAT CORRECTNESS OF BOOK R ESULTS CANNOT BE CHALLENGED WITHOUT POINTING OUT ANY SPECIFIC MISTAKE OR DEFICI ENCY IN THE BOOKS OF ACCOUNT OR WITHOUT RECORDING A FIRM FINDING THAT THE PROFIT S AND GAINS CANNOT BE PROPERLY DEDUCED FROM SUCH BOOKS OF ACCOUNTS AND TH E AO CANNOT INVOKE THE PROVISO TO SECTION 145 (1) OR 145 (2) ON THAT BASIS ALONE. IN THE CASE OF M/S. QUALITY CHEMICALS REPORTED AT 6 1 TTJ 395, WHEREIN IT HAS BEEN OBSERVED THAT 'THE VERY FUNDAMENTAL PRINCIPLE UNDER THE IT ACT HAS TO BE APPRECIATED, THAT INCOME HAS TO BE DETERMINED AS PE R BOOKS OF ACCOUNT. IF THE BOOKS ARE SUCH FROM WHICH CORRECT INCOME CANNOT BE DETERMINED, OR IF THERE ARE SUFFICIENT REASONS IN THE FORM OF SOME MATERIAL WHICH POINT TOWARDS SUPPRESSION OF PRODUCTION, THEN IN ADDITION, THE AO SHOULD SUPPORT HIS FINDING BY AN OPINION OF THE EXPERT.' ONCE THE BOOKS OF ACCOUNT OF AN ASSESSEE ARE REJECT ED, THEN, PROFIT HAS TO BE ESTIMATED ON THE BASIS OF PROPER MATERIAL AVAILABLE (SEE, DABROS INDUSTRIAL CO. P. LTD. V, CIT (1977) 108 ITR 424 (CAL)]. AN AO IS NOT FLATTERED BY TECHNICAL RULES OF EVIDENCE AND PLEASING AND HE IS ENTITLED T O ACT ON MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN A COURT OF LAW. NEVE RTHELESS, THE AO IS NOT ENTITLED TO MAKE A PURE GUESS AND MAKE AN ASSESSMEN T WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. THERE MUST BE SOMETHING MORE THAN BARE SUSPICION TO SUPPORT AN ASSESSMENT U/S 143 (3). THE RULE OF LAW ON THIS SUBJECT HAS BEEN FAIRLY AND RIGHTLY STATED BY THE L AHORE HIGH COURT IN CASE OF SETH GURMUKH SINGH V. CIT (1944), 12 ITR 393 (LAH) [ SEC, DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 775, 782(SC) ]. ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 7 AO MENTIONED IN HIS ORDER THAT STOCK REGISTER AND C ONFIRMATION OF CREDITORS FOR GOODS IS NOT PRODUCED DURING THE ASSESSMENT, IT IS NOT THE JUSTIFIABLE GROUND THAT TO REJECT THE BOOKS OF ACCOUNTS. MERE NON MAINTENANCE OF STOCK CANNOT BE THE VALID G ROUND FOR REJECTION OF BOOKS OF ACCOUNTS AS HELD IN THE CASE OF TIVENI PHA RMA (2004) 85 TTJ 950 (ITAT, JAIPUR BENCH THIRD MEMBER BENCH) ITA NO. 133 /JP/2001 - 'WHERE VERIFIABLE RECORDS OF OPENING STOCK, PURCHASES, AND CLOSING STOCK WERE AVAILABLE THERE WAS NO JUSTIFICATION TO REJECT BOOK S AND APPLY SECTION 145 (3), MERELY ON GROUND THAT STOCK REGISTER WAS NOT MAINTA INED. 6. ON THE OTHER HAND, THE LD SR. DR HAS RELIED ON T HE ORDERS OF THE AUTHORITIES BELOW. 7. THE BENCH HAVE HEARD BOTH THE SIDES. THE ASSESSEE IS A MANUFACTURER, TRADER AND COMMISSION AGENT OF OIL SE ED, FOOD GRAIN AND FLOOR. THE ASSESSEE FILED RETURN OF INCOME ALONGWITH AUDITED ACCOUNTS. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE GROSS PROFIT. THE LD. CIT(A) ACCEPTED THE TURNOVER D ECLARED BY THE ASSESSEE BY HOLDING THAT THE ASSESSING OFFICER HAS FAILED TO BRING ON RECORD ANY ADVERSE MATERIAL TO JUSTIFY THE QUANTIFI CATION OF UNDISCLOSED TURNOVER. HOWEVER, HE REDUCED THE G.P. ESTIMATION FR OM 8.5% TO 8% ON THE DECLARED TURNOVER. THE FACTS ON RECORD SHOWS THAT THIS ESTIMATE OF G.P. @ 8% WAS NOT BASED ON ANY SPECIFIC DEFECTS NOTED BY THE ASSESSING OFFICER OR BY THE LD. CIT(A) IN THE EXPENS ES CLAIMED IN THE P&L ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 8 ACCOUNT. ONCE THE LD. CIT(A) HAS ACCEPTED THE DECLAR ED TURNOVER OF THE ASSESSEE IN ABSENCE OF ANY SPECIFIC DEFECTS AND WITH OUT SPECIFYING ANY DEFECTS IN THE BOOKS OF ACCOUNT IN ESTIMATING THE G .P. @ 8% IS ALSO NOT JUSTIFIED. KEEPING IN VIEW THE VARIOUS DECISIONS REL YING UPON BY THE LD AR, THE BENCH IS OF THE VIEW THAT THE ASSESSEE WAS M AINTAINING BOOKS OF ACCOUNT, WHICH WERE DULY VOUCHED. NO SPECIFIC DEFECT HAS BEEN POINTED OUT BY ANY OF THE AUTHORITIES BELOW. IN ABSENCE OF ANY CONTRARY MATERIAL ON RECORD TO THE DECLARED GROSS PROFIT ON THE DECLA RED TURNOVER, THE ENHANCEMENT OF THE G.P. IS UNJUSTIFIED. THEREFORE, THE ADDITION SUSTAINED BY THE LD. CIT(A) IS DELETED. 8. IN THE GROUND NO. 5 OF THE APPEAL, THE ISSUE INV OLVED IS SUSTAINING THE ADDITION OF RS. 10,27,500/- MADE U/S 68 OF THE ACT. DURING THE YEAR, THE ASSESSEE HAS TAKEN LOAN OF RS. 10.00 LACS FROM SHRI SURESH CHAND ON 13/5/2010 BY ACCOUNT PAYEE CHEQUE. THE ASSESSEE F ILED AN AFFIDAVIT OF SHRI SURESH CHAND DULY ATTESTED BY A NOTARY PUBL IC WHEREIN HE HAS CONFIRMED THE LOAN AMOUNT GIVEN TO THE ASSESSEE. SH RI SURESH CHAND ALSO SUBMITTED THAT HE WAS MAINTAINING BANK ACCOUNT WITH DHOLPUR URBAN COOPERATIVE BANK LTD. AND ON THE MATURITY OF AN FDR, AMOUNT OF RS. 11,31,452/- WAS RECEIVED IN HIS BANK ACCOUNT AND FROM THERE, CHEQUE WAS ISSUED TO THE ASSESSEE AS LOAN. THUS, THE SOURCE OF THE ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 9 SOURCE WAS ALSO EXPLAINED. HE ALSO SUBMITTED THAT TH E ASSESSEE SUBMITTED AN APPLICATION UNDER RULE 46A OF THE INCO ME TAX RULES, 1962 (IN SHORT THE RULES) TO ADMIT THE ADDITIONAL EVIDEN CES. THESE EVIDENCES WERE REMANDED TO THE ASSESSING OFFICER FOR EXAMINATI ON. THE REMAND REPORT OBTAINED BY THE LD. CIT(A) WAS CONFRONTED TO T HE ASSESSEE AND THE ASSESSEE HAS FILED COUNTER COMMENTS ON THE SAME . THE ASSESSING OFFICER DURING THE REMAND REPORTS HEARING HAS MENTI ONED FOLLOWING DOCUMENTS, WHICH WAS SUBMITTED BY THE ASSESSEE BEFO RE HIM: A. BANK ACCOUNT STATEMENT OF DOCUMENT/ EVIDENCES S UBMITTED OF ASSESSEE IN WHICH LOAN CHEQUE WAS DEPOSITED. B. BANK A/C STATEMENT OF SURESH CHAND CHOUDHARY - URBAN COOPERATIVE BANK OUT OF WHICH LOAN WAS GIVEN FOR CRED ITWORTHINESS WITH ID FOR IDENTIFICATION. C. PHOTO COPY OF THE BANKER'S CHEQUE. D. SELF CONFIRMATION BY ASSESSEE ON LEDGER OF UNSE CURED LOAN. E. FINANCIAL STATEMENTS AND ACCOUNTS OF ASSESSEE. F. AFFIDAVIT OF CREDITOR SARESH CHARED ACCOUNTS. G. CONFIRMATION OF CREDITORS THE LD AR ALSO SUBMITTED THAT THE ASSESSEE WAS ABLE T O DISCHARGE THE ONUS OF PROVING THE IDENTITY, CREDITWORTHINESS AND G ENUINENESS OF THE TRANSACTIONS AS REQUIRED U/S 68 OF THE ACT. THE ASSE SSEE HAS SUBMITTED ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 10 DOCUMENTS, WHICH ARE CONCLUSIVE TO EXPLAIN THE SOUR CE IN THE HANDS OF THE ASSESSEE. HE ALSO RELIED ON THE FOLLOWING DECISI ONS: (A) FILLING OF CONFIRMATION, MENTIONING THEREIN PAN AND DISCLOSURE OF AMOUNT ADVANCED IN THE INCOME TAX RET URN BY THE CREDITOR CAN BE TREATED AS SUFFICIENT COMPLIANC E FOR EXPLAINING THE GENUINENESS OF CASH CREDIT. [PRADEEP KUMAR HIMMATRAMKA VS. ITO (2002) XXVII TAX WORLD 392 (JP)] (B) ASSESSEE ESTABLISHING IDENTITY OF THE CREDITORS AND AMOUNT RECEIVED BY HIM BY WAY OF CHEQUES. ASSESSEE MUST BE TAKEN TO HAVE PROVIDE THAT THE CREDITOR HAD CREDITWORTHINE SS. AMOUNT NOT INCLUDIBLE IN HANDS OF ASSESSEE AS INCOM E FROM UNDISCLOSED SOURCES ON MERE FAILURE ON PAT OF THE C REDITORS TO SHOW THEIR SUB-CREDITORS HAD CREDITWORTHINESS. [ KOTHARI VS CIT (2003) 264 ITR 234 (GAUHATI) (C) IDENTITY OF CREDITORS PROVED RETURN OF CREDITOR S SHOWING LOANS ACCEPTED AND ASSESSED AS INCOME OF THE ASSESSEE. [JALAN TIMBER VS. CIT (1997) 233 ITR II (GUAHATI)] (D) CREDITOR IDENTIFIABLE, INCOME TAX ASSESSEE, HAV ING FILED CONFIRMATION LETTER AND AFFIDAVIT CONFIRMING THE AD VANCING LOAN TO ASSESSEE AND HAVING SHOWN LOAN ENTRIES IN T HEIR RESPECTIVE BALANCE SHEETS FILED WITH THE RETURN, ADD ITION CANNOT BE MADE ON GROUND THAT LOAN CREDITOR WERE NOT PRODUCED BEFORE AO. [ACIT VS. INDIA TYRE HOUSE (2001) 72 ITJ (GAUHATI) 31 6] ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 11 (E) ASSESSEE IS NOT SUPPOSED TO PROVE THE SOURCE OF THE SOURCE OF CREDIT OF THE CREDITOR. [ SIDEWAYS INVESTMENTS PVT. LTD. VS. DCIT (2000) XXIV TAX WORLD 146 (JP)] (F) SOURCE OF SOURCE CANNOT BE ENQUIRED FOR CASH CR EDIT WHERE AMOUNT IS TAKEN BY A/C PAYEE CHEQUE AND CONFIRMATIO N IS FILED. [SUBHASH DAL MILL VS. ACIT(2000) 124 TAXMAN 162 (CHAD.)] (G) ASSESSEE IS UNDER NO OBLIGATION TO EXPLAIN THE SOURCE OF SOURCE OF ORIGIN OR ORIGIN OR MONEYS. [S.P. SHARMA VS. ADDL. CIT (2003) XXX TAX WORLD 19 8(JP)] (H) FINDING OF THE TRIBUNAL THAT IDENTITY OF CREDITO R HAD BEEN ESTABLISHED AMOUNT REPRESENTING CASH CREDIT NOT INC LUDIBLE IN TOTAL INCOME OF THE ASSESSEE. (HERE IN CASE OF THE ASSESSEE THE IDENTITY OF THE CREDITOR IS ESTABLISHED THROUGH THEIR PAN MENTIONED IN THEIR CONFIRMATIONS. [CIT VS. HEERALA CHHAGAN LAI (2002) 257 ITR 281 ( RAJ.)] (I) CASH CREDITS BEING INCOME TAX ASSESSEE CANNOT ADDED BUT CREDITORS HAVING NO CAPACITY TO ADVANCE AMOUNT HAVE TO BE TREATED AS UNEXPLAINED. [KAMAL MOTORS VS. CIT (2003) 180 CTR (RAJ.) 166. ] IT WAS HELD THAT THE FACT, THAT AS ASSESSEE WAS NO T ABLE TO SATISFY AUTHORITY AS TO SOURCE OF THE SOURCE. FROM WHICH THE CREDITOR OF A; DERIVE THE MONEY WOULD NOT JUSTI FY THE ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 12 ADDITION BEING MADE IN RES SUCH CREDIT IN THE HANDS OF ASSESSEE IN THE CASE OF * 57 ITR 532 (SC) P. SECTHARAMAMMA * 87 ITR 349 (SC) DAULAT RAM RAWATMULL * 103 ITR 344 (PATNA) SAROGI CREDIT CORPN. * 59 ITR 632 (ASM) TOLARMA DAGA. 9. ON THE OTHER HAND, THE LD SR.DR HAS RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW. 10. BOTH THE SIDES WERE HEARD ON THIS ISSUE AND ALSO PERUSED THE RELEVANT DOCUMENTS PLACED ON THE RECORDS. THE CASE L AWS RELIED UPON ARE ALSO GONE THROUGH. AFTER CONSIDERING THE RELEVA NT DOCUMENTS SUBMITTED BY THE ASSESSEE, THE BENCH IS OF THE VIEW THAT THE ASSESSEE WAS ABLE TO DISCHARGE THE ONUS AS CASTED UPON BY SEC TION 68 OF THE ACT FOR ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. IT IS ALSO A FACT THAT THE ASSESSEE H AS RECEIVED THE AMOUNT BY CHEQUE FROM SHRI SURESH CHAND. SHRI SURESH CHAND HAS ALSO EXPLAINED THE SOURCE OF SOURCE FROM WHERE THE AMOUNT WAS RECEIVED BY HIM IN HIS BANK ACCOUNT ON THE MATURITY OF FDR MAIN TAINED WITH DHOLPUR URBAN COOPERATIVE BANK LTD. AGAINST WHICH HE GOT BAN KERS CHEQUE WHICH WAS DEPOSITED IN HIS ACCOUNT AND THE SAME WAS SO URCE OF RS. 10 LACS GIVEN BY HIM TO ASSESSEE. CONSIDERING ALL THES E FACTS AND ITA 784/JP/2016_ MITTAL ROLLAR & FLOOR MILLS VS ITO 13 CIRCUMSTANCES, THE ADDITION TO THE EXTENT OF RS. 10 .00 LACS IS DELETED. NO PLEADINGS WERE MADE FOR THE BALANCE ADDITION U/S 68 OF THE ACT OF RS. 27,500/-, THEREFORE, ADDITION TO THAT EXTENT IS CON FIRMED. 11. IN THE GROUND OF 6 OF THE APPEAL, THE ISSUE INV OLVED IS CHARGING INTEREST U/S 234B AND 234C RESPECTIVELY. THE CHARGIN G OF INTEREST IS CONSEQUENTIAL AND MANDATORY, HENCE THIS GROUND OF A PPEAL IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/01/2018. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 TH JANUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S MITTAL ROLLAR & FLOOR MILLS, DHOL PUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-3, BHARATPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 784/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR