Vikash Agrawal, Sambalpur V. DCIT, Circle-1(1), Sambalpur, Sambalpur

ITSSA 12/CTK/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3255 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 22-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHAPATRA
• Keywords: Unexplained cash credit; Onus to prove
• Section: 142(1); 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER ITA NO.12/CTK/2013 ASSESSMENT YEAR : 2008 - 09 VIKASH AGARWAL, C/O. SRI ANNAPURNA RICE MILLS, GUDKATIKRA, PO: GODBHAGA, SAMBALPUR VS. DCIT, CIRCLE 1(1), SAMBALPUR PAN/GIR NO. AEFPA 1778 J (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PRAJNA RAJ MOHANTYAR/SAMBHULAL AGARWAL, FCA REVENUE BY : SHRI A.K.MOHAPATRA, CIT , DR DATE OF HEARING : 20 /04/ 2017 DATE OF PRONOUNCEMENT : 25 /04/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - BERHAMPUR , DATED 21.12.2012 , FOR THE ASSESSMENT YEAR 2008 - 09 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A ) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.15,00,000/ - MADE U/S.68 OF THE ACT. 2 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DERIVES RENTAL INCOME FROM HOUSE PROPERTY, INTEREST AND SALARY FROM PARTNERSHIP FIRM M/S. ANNAPURNA RICE MILL AND HAS ALSO INCOME FROM OTHER SOURCES. A SEARCH AND SEIZUR E OPERATION WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AND THE BUSINESS PREMISES OF THE ABOVE FIRM ON 20.2.2008. IN RESPONSE TO NOTICE U/S. 142(1) CALLING FOR THE RETURN, THE ASSESSEE FILED RETURN OF INCOME ON 22.9.2009 DISCLOSING INCOME O F RS.6,99,040/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS TAKEN UNSECURED LOAN OF RS.15,00,000/ - FROM THREE PERSONS NAMELY; RANJAN PATNAIK OF RS.2,00,000/ - , SMT SANGITA AGARWAL OF RS.9,00,000/ - AND SMT SUMAT I AGARWAL OF RS.4,00,000/ - . ON EXAMINATION OF THE BANK ACCOUNTS OF THREE LOAN CREDITORS, HE FOUND THAT IN ALL THE THREE CASES, CASH HAS BEEN DEPOSITED IN THE BANK ACCOUNT OF THE CREDITORS AND THEREAFTER ON THE SAME DATE, THE AMOUNT HAS BEEN GIVEN LOAN TO THE ASSESSEE. THEREFORE, HE DID NOT ACCEPT THE CREDITWORTHINESS OF THE LOAN CREDITORS AND ADDED RS.15,00,000/ - AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. 3 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 5. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT NO INCRIMINATING MATERIAL OR DOCUMENT WAS FOUND OR SEIZED IN THE COURSE OF SEARCH U/S 132 OF THE ACT AND AS SUCH SAID ADDITION IN THE ASSESSMENT MADE U/S.153A IS NOT SUSTAINABLE IN LAW. HE PLACED RE LIANCE ON THE DECISION OF DELHI BENCHES OF THE TRIBUNAL IN THE CASE OF ANIL KUMAR BHATIA & OTHERS VS ACIT (2010) 1 IT4R (TRIB) 484 (DELHI). HE ALSO PLACED RELIANCE ON THE DECISION OF CALCUTTA BENCHES OF THE TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL VS DCI T (2008) 119 TTJ 214 AND ARGUED THAT IT HAS BEEN HELD BY THE TRIBUNAL THAT ONLY UNDISCLOSED INCOME UNEARTHED DURING THE SEARCH CAN BE ASSESSED U/S.153A OF THE ACT. FURTHER, RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE JHARKHAND HIGH COURT IN THE C ASE OF ABHAY KUMAR SHROFF VS CIT (2007) 290 ITR 114 (JHAR) AND IT WAS ARGUED THAT THE HONBLE HIGH COURT HAS HELD THAT PROVISIONS OF SECTION 153A PROVIDES FOR ASSESSMENT OF UNDISCLOSED INCOME IN A CASE WHERE SEARCH IS CONDUCTED. 6. FURTHER, THE ASSESSEE A RGUED THAT WHERE THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT OF HIS BUSINESS, PROVISIONS OF SECTION 68 ARE NOT APPLICABLE TO THE ASSESSEE. 7. FURTHER, ON MERITS OF THE ADDITION, THE ASSESSEE SUBMITTED THAT ALL THE LOANS WERE RECEIVED BY ACCOUNT PAYEE CHEQUE I.E. THROUGH BANKING CHANNEL AND ALL THE LOANS CREDITORS ARE ASSESSED TO TAX AND THEIR PAN 4 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 NOS. WERE PROVIDED TO THE ASSESSING OFFICER. ALL THE LOAN CREDITORS IN THEIR STATEMENT RECORDED U/S.131 OF THE ACT BY THE ASSESSING OFFICER HAS STATED THAT THEY HAVE ADVANCED THE MONEY TO THE ASSESSEE AND SAME WAS OUT OF THEIR PAST SAVINGS. 8. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER AND THE ASSESSING OFFICER IN RESPONSE TO SAME, VIDE LETTER NO.8280 DATED 2.3.2012 STATED THAT THE LOAN CREDITORS WERE SUMMONED U/S.131 OF THE ACT AND STATEMENT OF RANJAN PATNAIK AND SANGEETA AGARWAL WERE RECORDED ON 9.12.2009 AND STATEMENT OF SUMATI AGRAWAL COULD NOT BE RECORDED AS SHE EXPRESSED HER INABILITY TO APPEAR ON MEDICAL GROUND. THE TWO LOAN CREDITORS RANJAN PATNAIK AND SANGEETA AGARWAL STATED THAT THEY HAVE GIVEN LOANS TO THE ASSESSEE OUT OF PAST SAVINGS. THE ASSESSING OFFICER OBSERVED THAT THE CREDITOR RANJAN PATNAIK WAS NOT FILING HIS RETURN ON THE GROUND THAT THE INCOME WAS BELOW THE TAX ABLE LIMIT AND SMT SANGEETA AGRAWAL WAS FOUND TO BE ASSESSED BY ITO, WARD 1(1), SAMBALPUR. THE ASSESSING OFFICER FURTHER OBSERVED THAT AS PER THE RECORD AVAILABLE, THE COMMUNICATION WAS MADE WITH ITO, WARD - 1(1), SAMBALPUR ON 10.12.2009 IN ORDER TO ASCE RTAIN THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. IN RESPECT OF TWO LOAN CREDITORS I.E. SANGEETA AG ARWQAL & SUMATI AGRAWAL, IN HIS LETTER DATED 11.12.2009, THE ITO CONFIRMED THAT NO LOANS WERE ADVANCED BY THESE TWO LOAN CREDITORS. 5 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 9. THE COPY OF THE R EMAND REPORT WAS CONFRONTED TO THE ASSESSEE. THE ASSESSEE IN REPLY TO THE SAME SUBMITTED THAT THE REMAND REPORT SIMPLY REITERATED THE FACTS STATED IN THE ASSESSMENT ORDER AND HAS NOT DISPUTED NOR POINTED OUT ANY INFIRMITY IN THE EXHAUSTIVE WRITTEN SUBMISS ION DATED 2.12.2011 SUPPORTED WITH CASE LAWS AND SUBMITTED THAT ADDITION BE DELETED. 10. THE CIT(A) HELD THAT HE AGREED WITH THE ORDER OF THE ASSESSING OFFICER THAT THE CREDITWORTHINESS OF THE CREDITORS WAS NOT PROVED AND CONFIRMED THE ADDITION. 11. BEFORE US, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS RELIED ON THE DECISION OF HONBLE GAUHATI HIGH COURT IN THE CASE OF NEMCHAND KOTHARI VS CIT & ANOTHER, 264 ITR 254 (GAU), WHEREIN, IT WAS HELD THAT THE BURDEN OF THE ASSESSEE TO PROVE THE GENUIN ENESS OF THE TRANSACTIONS AS WELL AS CREDITWORTHINESS OF THE CREDITOR IS CONFINED TO TRANSACTIONS WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND CREDITORS, AND IT IS NOT THE BURDEN OF THE ASSESSEE TO SHOW THE SOURCE(S) OF HIS CREDITOR OR TO PROVE THE CRED ITWORTHINESS OF THE SOURCE(S) OF THE SUB - CREDITORS. 12. FURTHER, HE RELIED ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF SITARAM AGARWAL IN ITA NO.60/CTK/2015 FOR THE ASSESSMENT YEAR 2010 - 2011 ORDER DATED 12.1.2016 AND SUBMITTED THAT THE TRI BUNAL IN PARA 11 OF ITS ORDER HELD THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUILDERS 256 ITR 360 (GUJ) HAS OBSERVED THAT 6 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 THE ASSESSEE WAS NOT EXPECTED TO PROVE THE GENUINENESS OF THE CASH DEPOSITED IN THE BANK ACCOUNTS OF THOSE CREDITORS BECAUSE UNDER LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF THE CREDITS IN ITS BOOKS OF ACCOUNT BUT NOT THE SOURCE OF THE SOURCE. 13. FURTHER, HE RELIED ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF RAJENDRA KUMAR SAHA VS ITO IN ITA NO.161/CTK/2015 ASSESSMENT YEAR: 2008 - 09 ORDER DATED 7.4.2017 AND ARGUED THAT IN PARA 20 OF THE ORDER, THE TRIBUNAL HELD THAT IN SUPPORT OF R ECEIPT OF CASH CREDIT OF RS.12,75,000/ - , THE ASSESSEE FILED BEFORE THE ASSESSING OFFICER LOAN CONFIRMATIONS, COPY OF INCOME TAX RETURNS AND COPY OF BANK ACCOUNT OF THE LOAN CREDITORS AND EXPLAINED THAT ALL THE TRANSACTIONS WERE THROUGH CHEQUE. THEREFORE, THE TRIBUNAL HELD THAT THE ASSESSEE HAS DISCHARGED HIS INITIAL BURDEN, WHICH ESTABLISH THE IDENTITY OF THE LOAN CREDITORS BEYOND ANY SHADOW OF DOUBT. THE TRIBUNAL T HEREAFTER, OBSERVED THAT THE DEPARTMENT COULD NOT BRING ANY POSITIVE MATERIAL ON RECORD TO SHOW THAT EITHER THE LOAN CREDITORS HAVE NOT ACTUALLY ADVANCED THE MONEY IN QUESTION OR THEY COULD NOT HAVE ADVANCED THE SAME . THE ASSESSING OFFICER AS WELL AS CIT(A) HAS DRAWN ADVERSE INFERENCE REGARDING CREDITWORTHINESS OF THE LOAN CREDITORS MERELY ON THE BASIS OF SUSPICION ALONE. IT WAS NOT THE CAS E OF THE ASSESSE THAT THE LOAN CREDITORS HAD ADVANCED THE MONEY OUT OF THE INCOME OF THE YEAR ALONE AND NO POSITIVE MATERIAL HAS BEEN BROUGHT ON RECO RD TO SHOW THAT LOAN CREDITORS COULD NOT HAVE ANY OTHER SO URCE LIKE HIS CAPITAL I.E. SAVING OF EARLIER YEARS OR 7 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 RECEIPT FROM ANY OTHER PERSON FRO M WHICH THE LOAN CREDITORS COULD NOT HAVE ADVANCED THE LOAN. THE OTHER OBSERVATION OF THE ASSESSING OFFICER WHILE MAKING THE ADDITION U/S.68 OF THE ACT IS THAT THE LOAN CREDITORS HAVE DEPOSITED THE AMOUNT IN CASH BEFORE ISSUING CHEQUE TO THE ASSESSEE, THE TRIBUNAL OBSERVED THAT WHERE A BORROWING OR A CREDIT IS SHOWN TO HAVE COME FROM THE PERSON OTHER THAN THE ASSESSEE, THERE IS NO FURTHER RESPONSIBILITY FOR THE ASSESSEE TO SHOW THAT IT HAS COME FROM THE ACCOUNTED SOURCE OF THE LENDER. THE TRIBUNAL RELIED ON THE DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. METACHEM INDUSTRIES, 245 ITR 160 (MP) . THE TRIBUNAL FURTHER RELIED ON THE DECISION OF HONBLE GUJARA T HIGH COURT IN THE CASE OF CIT VS. ROHINI BUILDERS, 256 ITR 360 (GUJ) , WHEREIN, IT WAS HELD THAT MERE IDENTIFICATION OF THE SOURCE OF THE CREDITORS EVEN WITHOUT EVIDENCE AS TO THE NATURE OF INCOME COULD JUSTIFY ACCEPTANCE, WHERE THE ASSESSEE HAS GIVEN GI R NO/PAN NO. OF THE CREDITORS AND ALSO SHOWS THAT THE AMOUNTS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES. THE HONBLE HIGH COURT IN THIS CASE ENDORSED THE FINDINGS OF THE TRIBUNAL THAT IT IS NOT NECESSARY THAT THERE SHOULD BE AN EXPLANATION AS TO THE SOURCE O F THE MONEY ON THE PART OF THE CREDITORS IN EVERY CASE. THE TRIBUNAL PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHIV DHOOTI PEARLS & INVESTMENT IN ITA NO. 429/2003 ORDER DATED 21.12.2015 , WHEREIN, IT HAS BEEN HELD THAT WHERE THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE LENDER, THERE WAS NO 8 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 REQUIREMENT IN LAW FOR THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE SUB - CREDITOR. 14. LD A.R. SUBMITTED THAT THE FACTS IN THE CASE OF THE ASSESSEE ARE IDENTICAL TO THE FACTS OF THE CASE BEFORE THE TRIBUNAL IN THE CASE OF RAJENDRA KUMAR SAHA (SUPRA), THEREFORE, FOLLOWING THE SAME, THE ADDITION SHOULD BE DELETED. 15. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE R ELIED ON ORDERS OF THE LOWER AUTHORITIES. 16. IN THE INSTANT CASE, THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE RECEIVED LOAN OF RS.15,00,000/ - FROM THREE PERSONS, NAMELY ; RANJAN PATNAIK OF RS.2,00,000/ - , SANGITA AGARWAL OF RS.9,00,000/ - AND SUMATI AGARWAL OF RS.4,00,000/ - . IT IS NOT IN DISPUTE THAT THE ABOVE LOANS WERE RECEIVED BY CHEQUE. FURTHER, IT IS ALSO NOT IN DISPUTE THAT IN THE STATEMENT RECORDED U/S.131 OF THE ACT, BY THE ASSESSING OFFICER, TWO LOANS CREDITORS NAMELY; RANJAN PATNAIK AND SANGITA AGRAWAL APPEARED BEFORE THE ASSESSING OFFICER AND ADMITTED TO THE FACT OF HAVING ADVANCED THE LOAN TO THE ASSESSEE AND SOURCE OF THE FUNDS WAS FROM THEIR PAST SAVINGS. FURTHER, THE THIRD LOAN CREDITOR SMT. SUMATI DEVI AGARWAL COULD NOT APPEAR BEFORE THE ASSESSING OFFICER ON MEDICAL GROUND BUT HER LOAN CONFIRMATION AND PAN NUMBER WAS FILED BEFORE THE ASSESSING OFFICER. FURTHER, ALL THE THREE LOAN CREDITORS ARE INCOME TAX ASSESSEE ALSO NOT IN DISPUTE. 9 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 17. IN THE ABOVE BACK GROUND OF THE CASE, W E FIND THIS IS AN ASSESSMENT MADE BY THE ASSESSING OFFICER U/S.143(3) /153A OF THE ACT VIDE ORDER DATED 18.12.2009. THE SEARCH WAS CARRIED OUT AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE ON 20.2.2008. I T IS ALSO NOT IN DISPUTE THAT NO INCRIMINATING MATERIALS WERE FOUND AND SEIZED DURING THE SEARCH OPERATION CARRIED OUT U/S.132 OF THE ACT. THE ARGUMENT OF LD A.R. OF THE ASSESSEE IS THAT IN AN ASSESSMENT MADE UNDER SECTION 153A OF THE ACT, THE ADDITION TO THE INCOME OF THE ASSESSEE CAN BE MADE ONLY ON THE BASIS OF MATERIALS FOUND AND SEIZED DURING THE COURSE OF SEARCH. HE HAS PLACED RELIANCE ON THE DECISION OF DELHI BENCHES OF THE TRIBUNAL IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) AND THE DECISION OF CAL C U TTA BENCHES OF THE TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL (SUPRA) AS WELL AS THE DECISION OF HONBLE JHARKHAND HIGH COURT IN THE CASE OF ABHAY KUMAR SHROFF (SUPRA), WHEREIN, IT HAS BEEN CATEGORICALLY HELD THAT NO ADDITION CAN BE MADE IN THE ABSENCE OF A NY INCRIMINATING MATERIAL FOUND DURING THE SEARCH . WE FIND THAT THE CALCUTTA BENCHES B OF THE TRIBUNAL IN THE CASE OF BISWANATH GANDHI VS DCIT IN ITA NOS.853 & 854/KOL/2016 FOR ASSESSMENT YEAR 2006 - 07 AND ITA NOS.855 & 856/KOL/16 FOR ASSESSMENT YEAR 200 7 - 08 FOLLOWING THE DECISION OF MUMBAI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD VS DCIT, 137 ITD 287 (MUM) HAS HELD THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH TO SUPPORT AND SUBSTANTIATE THE ADDITION IN AN ASSESSMENT MADE U/S.153A OF THE 10 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 ACT. THEREFORE, THE ADDITION WAS DELETED. IN VIEW OF ABOVE THE DECISION OF THE KOLKATA BENCHES OF THE TRIBUNAL AS WELL AS THE DECISION OF HONBLE JHARKHAND HIGH COURT IN THE CASE OF ABHAY KUMAR SHROFF (SUP RA) , WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE OF RS.15,00,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT UN DER SECTION 68 RECEIVING FROM THREE PER SONS CANNOT BE SUSTAINED IN AN ASSESSMENT MADE U/S.153A OF THE ACT IN ABSENCE OF ANY MATERIAL FOU ND DURING THE SEARCH. 18. THE OTHER SUBMISSION OF LD A.R. OF THE ASSESSEE IS THAT AS THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT, THE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE TO THE ASSESSEE AND THAT THE BANK PASS BOOK PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT CANNOT BE TREATED AS BOOKS OF ACCOUNT OF THE ASSESSEE. 19. WE FIND HONBLE P&H HIGH COURT IN THE CASE OF SMT SHANTA DEVI V. CIT [ 1988] 171 ITR 532 (P&H) , HELD THAT WHERE THE ASSESSEE MAINTAINED NO BOOKS OF ACCOUNT, SECTION 68 WOULD NOT BE ATTRACTED. FURTHER, THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX, VS BHAICHAND H. GANDHI , 141 ITR 67 (BOM) HAS HELD THAT W HEN MONEYS ARE DEPOSITED IN A BANK, THE RELATIONSHIP THAT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF DEBTOR AND CREDITOR AND NOT OF TRUSTEE AND BENEFICIARY. APPLYING THIS PRINCIPLE, THE PASS BOOK SUPPLIED BY THE BANK TO ITS CONSTITUENT IS ONLY A COPY OF THE CONSTITUENT'S ACCOUNT IN THE BOOKS MAINTAINED BY THE BANK. IT IS NOT AS 11 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 IF THE PASS BOOK IS MAINTAINED BY THE BANK AS T HE AGENT OF THE CONSTITUENT, NOR CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS O F THE CONSTITUENT AND, THEREFORE, THE PASSBOOK SUPPLIED BY THE BANK TO THE ASSESSEE IN THE PRESENT CASE COULD NOT BE REGARDED AS A BOOK OF THE ASSESSEE, NOR A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS. AS SUCH, THE ADDITION U/S. 68 OF THE AMOUNT ENTERED ONLY IN THE BANK PASSBOOK WAS NOT JUSTIFIED. 20. WE ALSO FIND THAT THE DELHI BENCHES OF THE TRIBUNAL IN THE CASE OF MAWAYATI VS CIT, 113 TTJ 178 (DELI) HAS HELD THAT WHERE THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT, PROVISIONS UNDER SECTION 68 CANNOT BE INVOKED AND BANK PASSBOOK IS NOT A BOOK S OF ACCOUNT MAINTAINED BY THE ASSESSEE WITHIN THE MEANING OF SECTION 68 OF THE ACT. THE ABOVE VIEW HAS BEEN AFFIRMED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MAYAWATI IN ITA NO.43 8/2008 ORDER DATED 3 RD AUGUST, 2011. 20. 1 IN VIEW OF ABOVE DECISION OF HONBLE P&H HIGH COURT IN THE CASE OF SMT SHANTA DEVI (SUPRA) , HONBLE BOMBAY HIGH COURT BHAI CHAND H GANDHI (SUPRA) AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MAWAYATI (SUPRA), AS THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT, WHICH SUBMISSION OF THE LD A.R. DURING THE COURSE OF HEARING REMAINED UNCONTROVERTED BY THE LD D.R., NO ADDITION U/S.68 OF THE ACT C AN BE MADE IN THE HANDS OF THE ASSESSEE. 12 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 21. THE OTHER ARGUMENT OF LD A.R. OF THE ASSESSEE IS THAT THE LOAN FROM ALL THE LOAN CREDITORS HAS BEEN RECEIVED BY CHEQUE THROUGH BANKING CHANNEL. ALL THE THREE LOAN CREDITORS ARE INCOME TAX ASSESSEE. OUT OF THRE E LOAN CREDITORS, TWO LOAN CREDITORS NAMELY, RANJAN PATNAIK AND SANGITA AGRAWAL APPEARED BEFORE THE ASSESSING OFFICER AND IN THEIR STATEMENT RECORDED ON OATH U/S.131 OF THE ACT ADMITTED THE FACT OF HAVING ADVANCED THE SUM OF MONEY TO THE ASSESSEE. THE TH IRD LOAN CREDITOR NAMELY SUMATI DEVI AGRAWAL COULD NOT APPEAR BEFORE THE ASSESSING OFFICER BUT CONFIRMATION OF THE LOAN WAS FILED BEFORE THE ASSESSING OFFICER BY THE SAID LOAN CREDITOR WITH PAN NO. . THE ASSESSING OFFICER HAS DOUBTED THE CREDITWORTHINESS O F THE LOAN CREDITORS ON THE GROUND THAT THEY HAVE DEPOSITED CASH PRIOR TO ISSUE OF CHEQUE TO THE ASSESSEE. THE SUBMISSION OF LD A.R. IS THAT AS PER THE PROVISIONS OF SECTION 68 OF THE ACT, THE ASSESSEE HAS TO PROVE THE IDENTITY OF THE LOAN CREDITORS, GENU INENESS OF TRANSACTION AND THE CREDITWORTHINESS OF THE LOAN CREDITORS. THE ARGUMENT IS THAT IN LAW, THE ASSESSEE IS REQUIRED TO PROVE THE SOURCE OF THE CREDIT IN HIS BOOKS OF ACCOUNT AND NOT THE SOURCE OF SOURCE I.E. THE SOURCE OF THE CREDIT IN THE ACCOUN T OF THE SUB - CREDITOR. WE FIND THAT THE CONFIRMATION OF ALL THE LOAN CREDITORS HAVE BEEN F ILED TOGETHER WITH PAN NO. C OPY OF BANK ACCOUNT OF THE LOAN CREDITORS IS ALSO FILED BY THE ASSESSEE . ALL L THE MONEYS WERE RECEIVED BY CHEQUE. THEREFORE, WE FIND TH AT THE ASSESSEE HAS DISCHARGED HIS INITIAL BURDEN WHICH ESTABLISHED THE IDENTITY OF THE LOAN CREDITORS BEYOND ANY SHADOW 13 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 OF DOUBT. THEREAFTER, THE DEPARTMENT COULD NOT BRING ANY POSITIVE MATERIAL ON RECORD TO SHOW THAT THE EITHER THE LOAN CREDITORS HAVE N OT ACTUALLY ADVANCED THE MONEY IN QUESTION OR THEY COULD NOT HAVE ADVANCED THE SAME . THE ASSESSING OFFICER AS WELL AS CIT(A) HAS DRAWN ADVERSE INFERENCE REGARDING CREDITWORTHINESS OF THE LOAN CREDITORS MERELY ON THE BASIS OF SUSPICION ALONE. IT I S NOT THE CAS E OF THE ASSESSE THAT THE LOAN CREDITORS HAD ADVANCED THE MONEY OUT OF THE INCOME OF THE YEAR ALONE AND NO POSITIVE MATERIAL HAS BEEN BROUGHT ON RECO RD TO SHOW THAT LOAN CREDITORS COULD NOT HAVE ANY OTHER SOURCE LIKE HIS CAPITAL I.E. SAVING OF EARLI ER YEARS OR RECEIPT FROM ANY OTHER PERSON FRO M WHICH THE LOAN CREDITORS COULD NOT HAVE ADVANCED THE LOAN. THE ASSESSING OFFICER OBSERVED THAT THE LOAN CREDITORS HAVE DEPOSITED THE AMOUNT IN CASH BEFORE ISSUING CHEQUE TO THE ASSESSEE. IN OUR VIEW WHERE A BORROWING OR A CREDIT IS SHOWN TO HAVE COME FROM THE PERSON OTHER THAN THE ASSESSEE, THERE IS NO FURTHER RESPONSIBILITY FOR THE ASSESSEE TO SHOW THAT IT HAS COME FROM THE ACCOUNTED SOURCE OF THE LENDER. OUR VIEW FINDS SUPPORT FROM THE DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. METACHEM INDUSTRIES (SUPRA). FURTHER, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. ROHINI BUILDERS(SUPRA) HAS HELD THAT MERE IDENTIFICATION OF THE SOURCE OF THE CREDITORS EVEN WITHOUT EVIDENCE AS TO THE NATU RE OF INCOME COULD JUSTIFY ACCEPTANCE, WHERE THE ASSESSEE HAS GIVEN GIR NO/PAN NO. OF THE CREDITORS AND ALSO SHOWS THAT THE AMOUNTS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES. THE HONBLE HIGH COURT IN THIS 14 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 CASE ENDORSED THE FINDINGS OF THE TRIBUNAL THAT IT I S NOT NECESSARY THAT THERE SHOULD BE AN EXPLANATION AS TO THE SOURCE OF THE MONEY ON THE PART OF THE CREDITORS IN EVERY CASE. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHIV DHOOTI PEARLS & INVESTMENT IN ITA NO.429/2003 ORDER DATED 21.12.2015, HA S HELD THAT WHERE THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE LENDER, THERE WAS NO REQUIREMENT IN LAW FOR THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE SUB - CREDITOR. 22. IN VIEW OF ABOVE D ISCUSSION, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.15,00,000/ - MADE BY THE ASSESSING OFFICER U/S.68 OF THE ACT AS UNEXPLAINED CASH CREDIT. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 23. IN THE RESULT, THE A PPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 25 /04/2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (KULDIP SINGH) ( N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER CUTTACK; DATED 25 /04/2017 B.K.PARIDA, SPS 15 ITA NO.12/CTK/2013 ASSESSMENT YEAR :2008 - 09 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : VIKASH AGARWAL, C/O. SRI ANNAPURNA RICE MILLS, GUDKATIKRA, PO: GODBHAGA, SAMBALPUR 2. THE RESPONDENT. DCIT, CIRCLE 1(1), SAMBALPUR 3. THE CIT(A) BERHAMPUR 4. CIT, SAMBALPUR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//