Income Tax Officer Ward-2(3), RAIPUR V. SHRI Rakesh Pande, RAIPUR

ITA 93/BIL/2011

• Counselvise Citation: 9324714 RSA 2011
• Duration Of Justice: 3 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 12-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAINSR
• Assessee Lawyers: G S AGARWAL
• Keywords: Unexplained cash credit
• Section: 68; 80IB

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , ! ! ! !, ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO.93/BLPR/2011- # # # # / // / ASSESSMENT YEAR -2005-06 INCOME TAX OFFICER 2(3), RAIPUR V/S. SHRI RAKESH PANDEY, ANUPAM NAGAR, SHANKAR NAGAR ROAD, RAIPUR. PAN: AJGPB8660A ( ) / // / APPELLANT ) ( *+) / RESPONDENT ) ASSESSEE/REVENUE BY : SH.D.K. JAIN,SR. DR REVENUE/ASSESSEE BY : SH.G.S.AGARWAL, C.A. - /DATE OF HEARING : 23-12-2014 - /DATE OF PRONOUNCEMENT :23.12.2014 # # # # , 1961 1961 1961 1961- - - - 254 254254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM < << < = = = =, ,, , ! ! ! ! : CHALLENGING THE ORDER,DATED 30.01.2011,OF THE CIT(A ),RAIPUR,THE ASSESSING OFFICER(AO)HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.21,37,558/- MADE BY THE AO U/S. 80IB(10) OF THE I.T. ACT, 1961. 2. WHETHER IN LAW AND FACTS & CIRCUMSTANCES OF THE CAS E, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.9,00,000/- MADE BY THE AO ON ACC OUNT OF UNEXPLAINED CASH CREDITS. ASSESSEE,AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF C ONSTRUCTION AND SALE OF FLATS,FILED HIS RETURN OF INCOME ON 08.03.2006,DECLARING TOTAL INCOME OF RS.7 4,030/-.THE AO FINALISED THE ASSESSMENT U/S.143(3) OF THE ACT,DETERMINING THE TOTAL INCOME AT RS.31,11,590/-. 2. FIRST GROUND OF APPEAL IS DIRECTED ABOUT THE ADDITI ON OF RS.21.37 LAKHS,MADE BY THE AO U/S. 80IB(10)OF THE ACT AND DELETED BY THE FIRST APPELLA TE AUTHORITY(FAA).DURING THE ASSESSME-NT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD CLAI MED A DEDUCTION U/S.80IB IN RESPECT OF A HOUSING PROJECT.HE HELD THAT THE ASSESSEE HAD NOT F ULFILLED THE REQUISITE CONDITIONS FOR CLAIMING DEDUCTION,THAT PROJECT WAS NOT APPROVED BY THE COMP ETENT AUTHORITY,THAT SIZE OF FLAT WAS MORE THAN 1500 SQ.FEET,IN RESPECT OF SOME HOUSES,THAT THE ASS ESSEE HAD SOLD PARTLY CONSTRUCTED RESIDENTIAL UNITS,THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM T HE DEDUCTION. 2.1. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA. BEFORE HIM THE ASSESSEE SUBMITTED THAT THE PROJECT WAS APP ROVED BY TOWN & PLANNING AUTHORITY INITIALLY AND SUBSEQUENTLY BY THE MUNICIPAL CORPORATION RAIPU R,THAT IT COULD BE HELD THAT PROJECT WAS APPROVED BY THE AUTHORITITY,THAT EACH AND EVERY OWN ER HAD PURCHASED THE FLATS AFTER FINANCING THE LOAN FROM SCHEDULE BANKS,THAT AS PER THE OBLIGATORY REQUIREMENT THE FLAT WERE SOLD IN HALF CONSTRUCTION CONDITION,THAT THE ASSESSEE HAD GIVEN POSSESSION OF THE FLAT ONLY AFTER COMPLETION OF CONSTRUCTION,THAT THE COMPLETION CERTIFICATE WAS OB TAINED WITHIN FOUR YEARS,THAT SALEABLE AREA INCLUDED COMMON AREA,THAT AFTER EXCLUDING COMMON AR EA THE NEXT AREA WAS LESS THAN 1500 SQ.FEET. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND THE ASSESSMENT ORDER,THE FAA HELD THAT PROJECT WAS APPROVED BY THE MUNICIPAL CORPORATION O F RAIPUR,THAT THERE WAS NO DISPUTE REGARDING 2 ITA NO. THE APPROVAL,THAT SECTION 80IB(10)REQUIRED APPROVAL BY A LOCAL AUTHORITY AND NOT BY TOWN AND PLANNING DEPARTMENT,THAT APPROVAL BY CORPORATION FU LFILLED THE LEGAL REQUIREMENT, THAT DEDUCTION CANNOT BE DENIED ON THE GROUND THAT PROPERTY WAS SO LD IN HALF CONSTRUCTED STAGE,THAT HOUSES WERE ULTIMATELY SOLD TO SAME PARTIES.WITH REGARD TO THE FLAT HAVING AREA MORE THAN 1500 SQ.FT.,THE FAA HELD THAT THE AO SHOULD RESTRICT THE DISALLOWANCE U /S.80IB TO THE EXTENT OF PROFIT EARNED FROM THE UNITS WHICH EXCEEDED BUILT UP AREA OF 1500 SQ.FT. 2.2. BEFORE US,THE DEPARTMENTAL REPRESENTATIVE(DR)SUPPOR TED THE ORDER OF THE AO AND STATED THAT DEDUCTION WAS ALLOWABLE IF THE CONDITIONS WERE FULF ILLED CUMULATIVELY,THAT THERE SHOULD BE STRICT ADHERENCE OF THE PROVISIONS OF SECTION 80IB OF THE ACT.AUTHORISED REPRESENTATIVE REFERRED TO THE PERMISSION GRANTED BY TOWN AND COUNTRY PLANNING AS WELL AS BY CORPORATION (PG.57-62 OF THE PAPER BOOK) AND STATED THAT PERMISSION OF LOCAL AUT HORITY WAS THERE.HE ALSO REFERRED TO THE COMPLETION CERTIFICATE ISSUED BY THE CORPORATION(PG .64 OF THE PAPER BOOK).HE RELIED UPON THE JUDGMENTS OF RAGHUVENDRA COSNTRUCTION(354ITR194)AND R R PATEL ESTATE PRIVATE LTD.(ITA/24/NAG/2009/DATED15.09.2009)AND STATED THA T AFTER DEDUCTING THE COMMON AREA THE SIZE OF FLATS WAS LESS THAN 1500 SQ.FEET. 2.3. WE HAVE CONSIDERED THE MATERIAL AVAILABLE ON RECORD .WE FIND THAT THE ASSESSEE HAD CONSTRUCTED A HOUSING PROJECT AND HAD CLAIMED DEDUCTION U/S.80I B(10)OF THE ACT,THAT THE AO DENIED HIM THE BENEFIT BECAUSE OF THREE REASONS,THAT THE FAA ALLOW ED THE APPEAL FILED BY THE ASSESSEE AS HE FOUND THAT THE ASSESSEE HAD FULFILLED ALL THE CONDITIONS. AS FAR AS PERMISSION OF LOCAL AUTHORITY IS CONCERNED IT IS EVIDENT FROM THE PAPER BOOK(PGS.57T O64)THAT THE ASSESSEE HAD INITIALLY APPROACHED THE TOWN AND COUNTRY PLANNING AUTHORITY AND LATER O N THE MUNICIPAL CORPORATION OF RAIPUR. NOT ONLY THIS COMPLETION CERTIFICATE ISSUED ON 17.03.20 08 IS AVAILABLE ON RECORD.AS PER THE PROVISIONS OF SECTION 80IB(10) THE ASSESSEE HAD TO OBTAIN THE CERTIFICATE BEFORE 31.03.2008.WE DO NOT FIND THAT THERE IS ANY PRECONDITION THAT FLAT CANNOT BE SOLD AT HALF BUILT STAGE.THE ASSESSEE HAD EXPLAINED THE BACKGROUND OF THE SALE OF THOSE FLATS,IT WAS SU BMITTED THAT FOR OBTAINING FINANCE THE BUYERS HAD TO PURCHASE THE FLATS AT THAT STAGE ONLY.IT IS TO R EMEMBERED THAT FINALLY THE FLAT WERE TRANSFERRED IN THE NAMES OF THOSE FLAT OWNERS ONLY.COMING TO THEOR Y OF PROPORTIONATE DISALLOWANCE WE WOULD LIKE TO MENTION THAT THE ASSESSEE IS ENTITLED TO SP ECIAL DEDUCTION UNDER SECTION 80-IB,IF SOME RESIDENTIAL UNITS EXCEEDING 1500 SQUARE FEET.IT IS TO BE REMEMBERED THAT THE PROVISIONS OF SECTION 80IB ARE PART OF A BENEVOLENT LEGISLATION.WE WOULD LIKE TO MENTION A DECISION OF CHENNAI BENCH OF TRIBUNAL DELIVERED IN THE MATTER OF SREEVATSA RE AL ESTATES P. LTD.(9ITR-TRIB.808)AND THE DECISION READS AS UNDER: THE KOLKATA BENCH OF THIS TRIBUNAL IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. V. DEPUTY CIT IN PARAGRAPH 22 HAS HELD AS UNDER : '22. IT IS APPARENT FROM THE PERUSAL OF SECTION 80 -IB(10) THAT THIS SECTION HAS BEEN ENACTED WITH A VIEW TO PROVIDE INCENTIVE FOR BUSINESSMEN TO UNDERT AKE CONSTRUCTION OF RESIDENTIAL ACCOMMODATION FOR SMALLER RESIDENTIAL UNITS AND THE DEDUCTION IS INTENDED TO BE RESTRICTED TO THE PROFIT DERIVED FROM THE CONSTRUCTION OF SMALLER UNITS AND NOT FROM LARGER RESIDENTIAL UNITS. THOUGH THE ASSESSING OFFICER HAS DENIED THE CLAIM OF THE ASSESSEE OBSERV ING THAT LARGER UNITS WERE ALSO CON-STRUCTED BY THE ASSESSEE, AT THE SAME TIME, IT IS ALSO A FACT O N RECORD THAT THE ASSESSEE HAD CLAIMED DEDUCTION ONLY ON ACCOUNT OF SMALLER RESIDENTIAL UNITS WHICH WERE FULFILLING ALL THE CONDITIONS AS CONTAINED IN SECTION 80-IB(10) AND THE SAME HAS NOT BEEN DISPUTE D BY THE ASSESSING OFFICER ALSO. WE HAVE ALSO NOTED DOWN THE FACT THAT EVEN THE PROVISION AS LAID DOWN IN SECTION 80-IB(10) DOES NOT SPEAK REGARDING SUCH DENIAL OF DEDUCTION IN CASE OF PROFI T FROM A HOUSING COMPLEX CONTAINING BOTH THE SMALLER AND LARGE RESIDENTIAL UNITS AND SINCE THE A SSESSEE HAS ONLY CLAIMED DEDUCTION ON ACCOUNT OF SMALLER QUALIFYING UNITS BY FULFILLING ALL THE C ONDITIONS AS LAID DOWN UNDER SECTION 80-IB(10), THE DENIAL OF CLAIM BY THE ASSESSEE IS ON ACCOUNT OF RA THER RESTRICTED AND NARROW INTERPRETATION OF THE PROVISIONS OF CLAUSE (C) OF SECTION 80-IB(10) WHILE COMING TO SUCH CONCLUSION, WE ALSO FIND SUPPORT FROM THE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. V. CIT [1992] 196 ITR 188 (SC), WHEREIN IT WAS HELD THAT THE PROVISIO NS SHOULD BE INTERPRETED LIBERALLY AND SINCE IN THE PRESENT CASE ALSO, THE ASSESSEE BY CLAIMING PRO RATA INCOME ON QUALI-FYING UNITS HAS COMPLIED WITH ALL THE PROVISIONS AS CONTAINED IN THE SAID SE CTION, IN OUR CONSIDERED OPINION, SUCH CLAIM OF THE ASSESSEE WAS RIGHTLY ALLOWED BY THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS) BY 3 ITA NO. REVERSING THE ORDER OF THE ASSESSING OFFICER.' WE FURTHER NOTE THAT THE BANGALORE BENCH OF THIS T RIBUNAL IN THE CASE OF SJR BUILDERS V. ASST. CIT [2010] 3 ITR (TRIB) 569 (BANG) HAVE DULY CONSIDERED THE DECISION OF THIS TRIBUNAL IN THE CASE OF ASST. CIT V. CHITRA CONSTRUCTIONS P. LTD. AS WELL A S DECISION OF THE KOLKATA BENCH OF THIS TRIBUNAL IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LT D. V. DEPUTY CIT AND HELD IN PARAGRAPH 16 AS UNDER (PAGE 579 OF 3 ITR (TRIB)) : 'CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE APPEAL BY THE ASSESSEE IS TO BE ALLOWED TO THE EXTENT OF THE FLATS THE BUILT-UP ARE A OF THE FLAT IS NOT MORE THAN 1500 SQ. FT. WE AGRE E WITH SUBMISSION OF THE LEARNED REPRESENTATIVE FOR T HE ASSESSEE THAT WHILE CONSIDERING THE BUILT-UP AREA OF 1500 SQ. FT. FOR THE PURPOSE OF EXEMPTION U NDER SECTION 80-IB(10) THE MEZZANINE FLOOR AND COMMONARE AS ARE TO BE EXCLUDED. THE ASSESSING OFFI CER IS DIRECTED ACCORD-INGLY. WE HOLD THAT IN RESPECT OF THE PENTHOUSES THE BUILT-UP AREA OFWHICH IS MORE THAN 1500 SQ. FT., THEY MAY BE EXCLUDED FOR EXEMPTION.HOWEVER, IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH IN THE CASEOF BRAHMA ASSOCIATES V. JOINT CIT (OSD) [2009] 315 ITR (AT) 2 68(PUNE), MERELY BECAUSE SOME FLATS ARE LARGER THAN 1500 SQ. FT., THE ASSESSEE WILL NOT LOS E THE BENEFIT IN ITS ENTIRETY.ONLY WITH REFERENCE T O THE FLATS WHICH HAVE MORE THAN THE PRESCRIBED AREA, THE ASSESSEE WILL LOSE THE BENEFIT. APART FROM THIS, THE HONBLE KOLKATA HIGH COURT, VI DE ITS JUDGMENTDATED JANUARY 5, 2007 IN I. T. A. NO. 458 OF 2006 HAS CONFIRMED THE ORDER OFTHE KO LKATA BENCH OF THIS TRIBUNAL IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. V. DEPUTY CI T AND THE APPEAL FILED BY THE REVENUE WAS DISMISSED. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPIN ION THAT THE ASSESSEEWAS ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 80-IB(10), PRO RATA FOR THE HOUSING UNITS HAVING LESS THAN 1500 SQ. FT. FOR BOTH THE YEAR. BESIDES,THE HONBLE KARNATAKA HIGH COURT HAS,IN THE MATTER OF RAGHUVENDRA COSNTRUCTION (SUPRA),HELD AS UNDER: CIRCULAR NO. 5 OF 2010, DATED JUNE 3, 2010*, ISSUE D BY THE CENTRAL BOARD OF DIRECT TAXES EXPLAINS THE PROVISIONS OF SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961. THE PRINCIPAL OBJECT BEHIND THIS PROVISION IS TO PROVIDE FOR 100 PER CEN T. DEDUCTION OF THE PROFITS DERIVED BY AN UNDERTAKING FROM DEVELOPING AND BUILDING HOUSING PR OJECTS. IN ORDER TO BE ELIGIBLE FOR THE BENEFIT, THE ASSESSEE SHOULD SATISFY THE FOLLOWING CONDITION S : (A) THE PROJECT HAS TO BE APPROVED BY THE LOCAL AUTHORITY BEFORE MARCH 31, 2007 ; (B) THE PRO JECT HAS TO BE CONSTRUCTED ON A PLOT OF LAND HAVING A MINIMUM AREA OF ONE ACRE ; (C) THE BUILT-U P AREA OF EACH RESIDENTIAL UNIT SHOULD NOT EXCEED 1,000 SQ. FT IN THE CITIES OF DELHI AND MUMB AI (INCLUDING AREAS FALLING WITHIN 25 KMS OF THE MUNICIPAL LIMITS OF THESE CITIES) AND 1,500 SQ. FT IN OTHER PLACES ; (D) THE BUILT-UP AREA OF THE SHOP S AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT SHOULD NOT EXCEED 5 PER CENT. OF THE TOTAL BUILT-UP AREA OF THE HOUSING PROJECT O R 2,000 SQ. FT, WHICHEVER IS LESS ; AND (E) THE PROJECT HAS TO BE COMPLETED WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROJECT IS APPROVED BY THE LOCAL AUTHORITY. THE DEF INITION OF 'BUILT-UP AREA' IS GIVEN IN SUB-SECTION (14)(A). IN CALCULATING THE BUILT-UP AREA IT IS ONL Y THE INNER MEASUREMENTS OF THE RESIDENTIAL UNIT ON THE FLOOR LEVEL, WHICH HAVE TO BE TAKEN INTO CONSID ERATION. IF THERE ARE ANY PROJECTIONS AND BALCONIES AND IF IT EXCLUSIVELY BELONGS TO THE RESI DENTIAL UNITS, THEN, THAT ALSO HAS TO BE TAKEN INTO CONSIDERATION FOR DECIDING THE BUILT UP AREA. HOWEV ER, IF THE RESIDENTIAL UNIT IS PROVIDED WITH THE FACILITY OF COMMON AREA SHARED WITH OTHER RESIDENTI AL UNITS SUCH COMMON AREAS HAVE TO BE EXCLUDED WHILE COMPUTING THE BUILT UP AREA. THE LAN GUAGE EMPLOYED IN DEFINING BUILT UP AREA AS THE COMMON AREA SHARED WITH OTHER RESIDENTIAL UNITS , DOES NOT MEAN THAT EVERY COMMON AREA SHOULD BE SHARED WITH OTHER RESIDENTIAL UNITS. IF T HAT AREA DOES NOT EXCLUSIVELY BELONG TO THE OWNER OF THE RESIDENTIAL UNIT AND IF HE HAS TO SHARE THAT COMMON AREA WITH THE OWNER OF ANOTHER RESIDENTIAL UNIT, THEN THAT COMMON AREA HAS TO BE E XCLUDED FROM THE BUILT UP AREA. AFTER CONSIDERING THE ABOVE WE ARE OF THE OPINION T HAT THE FAA HAD RIGHTLY DIRECTED THE AO TO MAKE PROPORTIONATE DISALLOWANCE.HERE WE WOULD LIKE TO MENTION THAT EVEN FOR MAKING SUCH DISALLOWANCE ABOVE REFERRED JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT HAS TO BE KEPT IN MIND.CONSIDERING THE FACT THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY, WE DECIDE GROUND NO.1 AGAINST THE AO. 3 .NEXT GROUND OF APPEAL DEALS WITH ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT TO THE TUNE OF RS.9 LAKHS.DURING THE ASSESSMENT PROCEEDING S,THE AO FOUND THAT THE ASSESSEE HAD ACCEPTED DEPOSITS FROM V K KABRA,(RS.6 LAKHS),PAWAN JADWANI AND MAHESH JADWANI(RS.1.25 4 ITA NO. LAKHS EACH)AND DEEPAK JADWANI(RS.1.50 LAKHS).THE AO HELD THAT V K KABRA DID NOT MAINTAIN BOOKS OF ACCOUNTS,THAT HE WAS NOT PRODUCED FOR EXAM INATION,THAT OTHER PERSONS FAILED TO ESTABLISH SOURCES OF DEPOSIT,THAT THE BANK ACCOUNT SHOWED DEP OSIT OF CASH IMMEDIATELY BEFORE THE ISSUE OF CHEQUES BY THE DEPOSITORS,THAT THE ASSESSEE DID NOT PROVE CREDITWORTHINESS OF THE DEPOSITORS AS WELL AS THE GENUINENESS OF THE TRANSACTION. 3.1. IN THE APPELLATE PROCEEDINGS BEFORE THE FAA,THE ASS ESSEE CONTENDED THAT THE DEPOSITORS WERE REGULARLY ASSESSED TO TAX,THEY HAD CONFIRMED THE DE POSITS,THAT COPIES OF THEIR RETURNS OF INCOME WERE FILED ALONG WITH BANK ACCOUNTS BEFORE THE AO,T HAT THE AO DID NOT MAKE ANY INQUIRY WITH THE DEPOSITORS. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , THE FAA HELD THAT THE CREDITORS WERE ASSESSED TO TAX AT RAIPUR,THAT THE AO COULD HAVE CONDUCTED I NQUIRIES BEFORE RUSHING TO ANY ADVERSE INFERENCE,THAT THE DATE OF CASH DEPOSIT WAS NOT IMM EDIATE,THAT SOME OF THE CREDITORS HAD ALSO ADVANCED MONEY TO OTHER PERSONS DURING THE PERIOD,T HAT THE AO HAD NO RESERVATION WITH RESPECT TO THOSE TRANSACTIONS.THE FAA DELETED THE ADDITION MAD E BY THE AO. 3.2. BEFORE US,THE DR SUPPORTED THE ORDER OF THE AO.THE AR STATED THE ALL THE CREDITORS WERE ASSESSED TO TAX AND HAD ISSUED CONFIRMATION LETTES. AFTE HEARING THE RIVAL SUBMISSIONS WE ARE OF THE OPINION THAT THE ASSESSEE HAD DISCHARGED THE INITIA L ONUS CAST UPON HIM.HE HAD FURNISHED ALL THE DOCUMENTARY EVIDENCES PROVING THE IDENTITY OF THE C REDITORS AND GENUINENESS AND CREDITWORTHINESS OF THE DEPOSITORS.IF THE AO WAS NOT SATISFIED ABOUT THEIR CREDITOWORTHI -NESS HE SHOULD HAVE BROUGHT SOME POSITIVE MATERIAL ON RECORD TO MAKE T HE ADDITION U/S.68 OF THE ACT.WITHOUT REBUTTING THE EVIDENCES PRODUCED BY THE ASSESSEE,TH E AO HAD ADDED A SUM OF RS.9 LAKHS TO THE INCOME OF THE ASSESSEE.IN OUR OPINION WHERE AMOUNTS SHOWN AS LOANS FROM EXISTING TAX PAYER ASSESSEESS,IT IS A SIMPLE QUESTION OF WHETHER THE A SSESSEE HAS DISCHARGED THE BURDEN PLACED UPON IT UNDER SECTION 68 OF THE ACT AND IN SUCH CASES, TH E AO CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN I TS POSSESSION AND THEN MERELY REJECT IT, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE M ATERIAL PLACED BEFORE HIM. WE FIND THAT IN THE CASE OF MOD CREATIONS PVT. LTD. THE HONBLE DELHI HIGH COURT(354ITR 282)HAS DEALT THE ISSUE OF CASH CREDIT AND THE DUTY OF THE AO IN FOLLOWING MANNER: A BALD ASSERTION BY THE ASSESSING OFFICER THAT THE CREDITS WERE A CIRCULAR ROUTE ADOPTED BY THE ASSESSEE TO PLOUGH BACK ITS OWN UNDISCLOSED INCOME INTO ITS ACCOUNTS, COULD BE OF NO AVAIL. THE REVENUE WAS REQUIRED TO PROVE THIS ALLEGATION. AN A LLEGATION BY ITSELF WHICH IS BASED ON ASSUMPTION WILL NOT PASS MUSTER IN LAW. THE REVENUE WOULD BE REQUIRED TO BRIDGE THE GAP BETWEEN THE SUSPICIONS AND PROOF IN ORDER TO BRING HOME THI S ALLEGATION..IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE MATERIAL PLACED ON RECORD, WHICH WA S LARGELY BANK STATEMENTS OF THE CREDITORS AND THEIR INCOME-TAX RETURNS, IT COULD GATHER THE NECES SARY INFORMATION FROM THE SOURCES TO WHICH THE INFORMATION WAS ATTRIBUTABLE. NO SUCH EXERCISE HAD BEEN CONDUCTED BY THE ASSESSING OFFICER. WE FIND THAT IN THE MATTER BEFORE US,THE AO HAS NOT DISCHARGED THE BURDEN CASE UPON HIM AND THE FAA HAD CONSIDERED ALL THE RELEVANT MATERIAL BEFORE DECIDING THE APPEAL.WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE FAA.THEREFORE,CONFIRM ING THE SAME WE DECIDE GROUND NO.2 AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSE D. > #>< @ A - ORDER PRONOUNCED IN THE OPEN COURT ON 23 ,DECE MBER,2014. - E 23 F ,2014 - . SD/- SD/- (H.L.KARWA/ . .. . . .. . ) ( ! ! ! ! / RAJENDRA) PRESIDENT/ = = = = /ACCOUNTANT MEMBER /RAIPUR. F DATE: 23.12.2014 5 ITA NO. - -- - *#GH *#GH *#GH *#GH IH IH IH IH / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / ) 2. RESPONDENT / *+) 3. THE CONCERNED CIT(A)/ J K , 4. THE CONCERNED CIT / J K 5. DR ITAT,RAIPUR BENCH/ H *## , . . . , 6. GUARD FILE/ . +H *# //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, RAIPUR