M/s Mani Square Hospitality Pvt. Ltd., Kolkata V. A.C.I.T.,CC-3(2), Kolkata

ITSSA 35/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3583 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-10-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 17-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM BILASH MEENA
• Assessee Lawyers: S K TULSIYAN
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained investment; Business expenditure; Search and seizure; Principle of natural justice; Opportunity of cross examination; Question of law; Third party statement; Accommodation entries; Commercial expediency; Onus to prove; TDS; Set aside
• Section: 69C; 143(3); 142(1); 153A; 133(6); 143(1); 205; 195; 201; 143(2); 208; 264; 43; 194A; 73; 13; 153; 22; 153C; 147; 131; 68; 69; 132; 139

Judgement Text

IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 1 | P A GE , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI P. M. JAGTAP, VICE-PRESIDENT AND SHRI A. T. VARKEY, JM] I.T.(S.S.)A. NOS. 35 TO 38, 39 & 40/KOL/2020 ASSESSMENT YEARS: 2011-12 TO 2014-15, 2016-17 & 201 7-18 M/S. MANI SQUARE HOSPITALITY PVT. LTD. (PAN: AAACE 7516 J) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 20.10.2020 DATE OF PRONOUNCEMENT 06.11.2020 FOR THE APPELLANT SHRI S. K. TULSIYAN, ADVOCATE FOR THE RESPONDENT SHRI RAM BILASH MEENA, CIT D.R ORDER PER SHRI A.T. VARKEY, JM: THESE APPEALS ARE PREFERRED BY THE APPELLANT AGAINS T THE ORDER OF LD.CIT(A)-21, KOLKATA DATED 08.11.2019 FOR AY 2011-12 TO 2014-15 , AY 2016-17 AND AY 2017-18. SINCE ISSUES INVOLVED WERE COMMON, ALL THE APPEALS WERE HEARD TOGETHER. BOTH THE PARTIES ALSO ARGUED THEM TOGETHER RAISING SIMILAR A RGUMENTS ON THESE ISSUES. ACCORDINGLY, FOR THE SAKE OF BREVITY, WE DISPOSE AL L THE APPEALS BY THIS CONSOLIDATED ORDER. 2. IN ALL THESE APPEALS THE COMMON ISSUE INVOLVED I S, THE ADDITION MADE ON ACCOUNT OF RECEIPT OF UNSECURED LOANS TREATING IT T O BE IN THE NATURE OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT) AND DISALLOWANCE OF THE INTEREST PAID ON SUCH LOANS UNDER SECTION 69C O F THE ACT. BRIEFLY STATED THE FACTS OF THE PRESENT CASE ARE THAT, SEARCH U/S 132 WAS CONDU CTED AGAINST THE MANI GROUP, ON 22-06-2016. THE LD. COUNSEL FOR THE ASSESSEE SHRI S . K. TULSIYAN BROUGHT TO OUR NOTICE THAT PRIOR TO THE DATE OF SEARCH, THE INCOME-TAX AS SESSMENTS U/S 143(3) FOR AYS2011- IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 2 | P A GE 12, 2012-13 & 2013-14 STOOD COMPLETED AND WAS NOT P ENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF SEARCH ON 22.06.2016 AND THE REFORE BY OPERATION OF LAW THESE ASSESSMENT YEARS WERE UNABATED ASSESSMENTS ON THE D ATE OF SEARCH. ACCORDING TO HIM, THE FOLLOWING FACTS ARE UN-DISPUTED . THAT THE ORIG INAL RETURN OF INCOME FOR AY 2014- 15 WAS FILED ON 29.11.2014 AND THE TIME LIMIT FOR I SSUANCE OF NOTICE U/S 143(2) HAD NOT EXPIRED AS ON THE DATE OF SEARCH (22.02.2016) AND THEREFORE THIS WAS AN ABATED ASSESSMENT YEAR. AS REGARDS AYS 2016-17 & 2017-18, IT WAS POINTED OUT THAT THE RETURNS OF INCOME FOR ALL THESE YEARS WERE FILED ON LY AFTER THE DATE OF SEARCH AND HENCE WERE ABATED ASSESSMENTS. THE SUMMARY OF THE ADDITIO NS/DISALLOWANCES IN DISPUTE IN THE APPEALS FOR AYS 2011-12 TO 2014-15, 2016-17 & 2 017-18 ARE AS FOLLOWS: ISSUE 2011-12 2012-13 2013-14 2014-15 2016-17 2017- 18 UNEXPLAINED CASH CREDIT U/S 68 96,00,000 2,96,00,000 5,93,50,000 4,90,00,000 - 20, 77,490 UNEXPLAINED INTEREST EXPENDITURE U/S 69C 20,63,166 7,85,066 75,08,451 1,08,20,449 80,70,492 31,32,216 TOTAL 1,16,63,166 3,03,85,066 6,68,58,451 5,98,20,4 49 80,70,492 52,09,706 3. ACCORDING TO THE LD. COUNSEL, IN THE UNABATED AS SESSMENTS FOR AYS2011-12, 2012-13 & 2013-14, NO ADDITION WAS PERMISSIBLE IN A BSENCE OF ANY INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEARCH. ACCORDING TO HIM THE ADDITIONS MADE IN THESE YEARS BY THE AO AND SUSTAINED BY LD. CIT(A) WERE NO T MADE WITH REFERENCE TO ANY INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEAR CH AND THEREFORE SUCH ADDITIONS WERE UNSUSTAINABLE ON FACTS AND IN LAW. IN THIS REG ARD, HE RELIED ON THE DECISION RENDERED BY THIS TRIBUNAL ON SIMILAR FACTS & CIRCUM STANCES IN THE CASE OF ASSESSEES OWN SISTER CONCERN, M/S MANI SQUARE LTD. VS. ACIT I N IT(SS) A NOS. 58 TO 62/2019 FOR AY 2013-14 TO 2017-18 DATED 06.08.2020 (HEREINA FTER REFERRED TO AS THE CASE OF M/S MANI SQUARE LTD.) WHICH WAS ALSO RE-ASSESSED U /S 153A AFTER THE SIMULTANEOUS SEARCH ON THE SAME DATE, THIS TRIBUNAL UPHELD THIS LEGAL PLEA OF SISTER CONCERN. THEREFORE, THE LD AR SUBMITTED THAT SINCE THERE WAS NO INCRIMINATING MATERIAL UNEARTHED DURING SEARCH QUA THE ASSESSEE QUA THESE UNABATED ASSESSMENTS, NO ADDITION COULD HAVE MADE, SO HE PLEADED THAT THE ADDITION MA Y BE DELETED. PER CONTRA, THE LD. CIT, DR RELYING ON THE ORDER OF THE LD. CIT(A) SUBM ITTED THAT, THE LD. CIT(A) HAD IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 3 | P A GE POINTED OUT THE RELEVANT INCRIMINATING MATERIAL BAS ED ON WHICH THE AO MADE THE IMPUGNED ADDITIONS AND THEREFORE HE URGED THAT THIS GROUND TAKEN BY THE APPELLANT DESERVES TO BE DISMISSED. 4. WITH REGARD TO THE MERITS OF THE ADDITIONS MADE U/S 68 & 69C OF THE ACT IN AYS 2011-12 TO 2014-15, 2016-17 & 2017-18, THE LD. COUN SEL SUBMITTED THAT BEFORE THE LOWER AUTHORITIES, THE APPELLANT HAD SUBMITTED THE FOLLOWING DOCUMENTS TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE U NSECURED LOANS TAKEN. A. THE PAN NO. ADDRESSES AND MCA DETAILS OF ALL THE CR EDITORS IN QUESTION ( FOR IDENTITY) B. THE FINANCIAL STATEMENTS OF ALL THE UNSECURED LOAN CREDITORS ( FOR CREDITWORTHINESS) C. THE LEDGER COPIES IN THE ASSESSEES BOOKS OF ACCOUN TS EVIDENCING THE RECEIPT AND THE REPAYMENT OF THE LOANS AND INTEREST ( FOR GENUINENESS) D. BANK STATEMENT EVIDENCING THAT PAYMENT HAS BEEN MAD E VIA BANKING CHANNELS ( FOR GENUINENESS) E. CONFIRMATION OF LOANS FROM ALL THE PARTIES FROM WHO M THE SAID UNSECURED LOANS STOOD TAKEN DURING THE YEAR ( FOR GENUINENESS ) F. TDS CERTIFICATES SHOWING SUCH TDS DEDUCTION ON THE INTEREST PAID AGAINST SUCH UNSECURED LOAN CREDITORS BY THE ASSESSEE ( FOR GENUINENESS) 5. ACCORDING TO THE LD. AR, THE ENTIRE ADDITIONS WE RE MADE BY THE ASSESSING OFFICER IN RESPECT OF UNSECURED LOAN TAKEN FROM THE LOANS CREDITORS AND THE INTEREST WHICH ASSESSEE PAID TO THESE LENDERS. IT WAS POINTE D OUT BY THE LD. A.R THAT IN ORDER TO PROVE THE IDENTITY OF LENDER WHO GAVE THE LOAN TO T HE ASSESSEE, THE ASSESSEE FURNISHED THE FOLLOWINGS: (A) THE IDENTITY OF LOAN CREDITOR STOOD ESTABLISHED BY THE VERY FACT THAT THE NAMES, ADDRESSES OF THE LENDERS, PAN NUMBERS, B ANK DETAILS AND CONFIRMATORY LETTERS WERE FILED BEFORE BOTH THE LOWER AUTHORITIE S, (B) THE CREDITWORTHINESS STOOD PROVED BY THE FINANCIAL STATEMENTS, BANK DETAILS AN D PAYMENT BY ACCOUNT PAYEE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 4 | P A GE CHEQUES AND (C) THE GENUINENESS OF THE TRANSACTION WAS ESTABLISHED BY THE DETAILS OF INTEREST PAID, TDS DEDUCTED THERE FROM, LOAN CONFIR MATIONS AND ALSO THE MCA DATA EVIDENCING THAT ALL THE LENDERS WERE EXISTING AND A CTIVE COMPANIES. THE LD. AR THUS ARGUED THAT THE APPELLANT HAD PLACED ON AOS RECORD SUFFICIENT MATERIAL AND EVIDENCES TO DISCHARGE ITS ONUS FOR ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITORS AND THE GENUINENESS OF THE TRANSACTION. H E POINTED OUT THAT NONE OF THE DOCUMENTARY EVIDENCES FILED BY THE APPELLANT WERE F OUND DEFECTIVE NOR ANY FALSITY IN THE DOCUMENTS FILED WAS PROVED BY THE AO. THE LD. A R SUBMITTED THAT THE ADDITIONS U/S 68 & 69C OF THE ACT WERE MADE BY THE AO AND SUS TAINED BY THE LD.CIT(A) PRIMARILY ON THE BASIS OF THE STATEMENTS OF ALLEGED ENTRY OPERATORS. THE LD. AR PAINS STAKINGLY TOOK US THROUGH THE STATEMENTS OF THE ENT RY OPERATORS (NOT PROVIDED TO ASSESSEE BEFORE RE-ASSESSMENT U/S 153A WAS FRAMED) AND WHICH WERE PROVIDED BY THE AO ONLY IN THE COURSE OF REMAND PROCEEDINGS BY THE LD. CIT(A). IT WAS BROUGHT TO OUR NOTICE THAT THE AO HIMSELF NEVER PERSONALLY EXAMINE D THESE PERSONS BEFORE FRAMING THE ASSESSMENT ORDER. AND MOST IMPORTANTLY THE LD. AR POINTED OUT TO US THAT THE CONTENTS OF THESE STATEMENTS HAD NO RELATION OR LIN K WITH THE ASSESSEE OR ANYTHING TO DO WITH THE FACTS OF THE APPELLANTS CASE. THE LD. AR SUBMITTED THAT THE ADDITIONS MADE BY ASSESSING OFFICER WAS WRONGLY SUSTAINED BY THE LD. CIT(A). IN SUPPORT OF ITS CASE, THE LD. AR RELIED ON THE DECISION RENDERED BY IN TH E CASE OF ITS SISTER CONCERN, M/S MANI SQUARE LTD., IN WHICH THIS TRIBUNAL DELETED SI MILAR ADDITIONS MADE BY THE AO ON ACCOUNT OF UNSECURED LOANS & INTEREST PAID THEREON U/S 68 & 69C OF THE ACT. PER CONTRA, THE LD. CIT, DR FULLY SUPPORTED THE ORDER O F THE LOWER AUTHORITIES. 6. HAVING HEARD BOTH THE PARTIES AND AFTER GIVING T HOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND UPON EXAMINING THE MATERIAL O N RECORD, WE FIRST DEEM IT FIT TO DECIDE THE PRELIMINARY ISSUE AS TO WHETHER THERE WA S ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH AT THE PREMISES OF THE ASSE SSEE/ APPELLANT BASED ON WHICH THE AO COULD HAVE MADE THE ADDITIONS/DISALLOWANCES AS M ADE IN THE ASSESSMENTS OF AYS 2011-12 TO 2013-14 WHICH REMAINED UNABATED ON THE D ATE OF SEARCH. WE NOTE THAT, IN THE CASE OF M/S MANI SQUARE LTD (SUPRA) (SISTER CON CERN OF THE ASSESSEE), THIS TRIBUNAL IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 5 | P A GE HAS HELD THAT IN THE CASE OF UNABATED ASSESSMENTS, NO ADDITION IS PERMISSIBLE IN THE ORDER U/S 153A UNLESS IT IS BASED ON ANY RELEVANT T ANGIBLE & COGENT INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE REL EVANT EXTRACTS OF THE DECISION ARE AS FOLLOWS: WE NOTE THAT THE PROVISIONS OF SECTION 153A OF THE ACT, FORMS PART OF CHAPTER XIV OF THE ACT CONTAIN SPECIAL PROVISIONS FOR COMPLETING A SSESSMENTS IN CASE OF SEARCH CONDUCTED U/S 132 OF THE ACT OR REQUISITION MADE U/ S 132A OF THE ACT. THESE PROVISIONS CAN BE INVOKED ONLY IN CASES WHERE THE I NCOME-TAX DEPARTMENT HAS EXERCISED ITS EXTRA ORDINARY POWERS OF CONDUCTING S EARCH AND SEIZURE OPERATIONS AFTER COMPLYING WITH STRINGENT PRE-CONDITIONS PRESC RIBED IN SECTION 132 OF THE ACT. WE DO NOT DENY THE LD. CIT, DR'S CONTENTION THAT ON CE A SEARCH U/S 132 IS CONDUCTED AGAINST A PERSON, THEN IRRESPECTIVE WHETHER ANY INC RIMINATING MATERIAL IS FOUND, THE AO IS REQUIRED TO PROCEED AGAINST SUCH PERSON FOR C OMPLETING THE ASSESSMENTS U/S 153A OF THE ACT FOR THE SPECIFIED SIX ASSESSMENT YE ARS. TO THIS EXTENT, THERE IS NO QUARREL. HOWEVER WE FIND THAT SECTION 153A ITSELF C REATES THE FINE DISTINCTION/DIFFERENTIATION AMONGST SPECIFIED SIX A SSESSMENT YEARS DEPENDING WHETHER PRIOR TO THE DATE OF SEARCH, THE ASSESSMENT PROCEED INGS ARE PENDING OR NOT BEFORE THE AO. WE NOTE THAT THE RELEVANT SECTION ITSELF CLARIF IES THAT WHERE AN ASSESSMENT WAS ALREADY COMPLETED AGAINST AN ASSESSEE AND ANY APPEA LS OR FURTHER PROCEEDINGS ARE PENDING, THEN SUCH APPEALS OR OTHER PROCEEDINGS DO NOT ABATE. WE SHOULD KEEP IN MIND THAT MERELY BECAUSE AN ASSESSEE IS SUBJECTED T O SEARCH U/S 132 OF THE ACT, SUCH ACTION BY ITSELF DOES NOT GIVE CARTE BLANCHE TO THE DEPARTMENT TO SUBJECT SUCH AN ASSESSEE TO THE RIGORS OF THE ASSESSMENT AFRESH FOR ALL THE SIX YEARS. IT IS FOR THIS REASON THAT THE PARLIAMENT IN ITS WISDOM HAS CATEGO RICALLY CREATED TWO CLASSES AMONG THE SIX YEARS, (A) UN-ABATED ASSESSMENT AND ( B) ABATED ASSESSMENTS. CONSEQUENT TO A SEARCH CONDUCTED U/S 132 OF THE ACT , THE AO IS REQUIRED TO ISSUE NOTICES U/S 153A OF THE ACT TO ASSESS THE INCOME OF THE ASSESSEE FOR SIX ASSESSMENT YEARS PRECEDING THE DATE OF SEARCH.THESE SIX ASSESS MENT YEARS COMPRISE OF ASSESSMENTS WHICH ARE NOT ABATED ( NON-PENDING ASSE SSMENT BEFORE AO ON THE DATE OF SEARCH ); AND ASSESSMENTS WHICH ARE PENDING BEFORE THE AO ON THE DATE OF SEARCH, WHICH WOULD BE TREATED AS ABATED. IN THE CASE OF AB ATED ASSESSMENTS, THE AO IS FREE TO FRAME THE ASSESSMENT IN REGULAR MANNER AND DETER MINE THE CORRECT TAXABLE INCOME FOR THE RELEVANT YEAR INTER ALIA INCLUDING THE UNDI SCLOSED INCOME UN-EARTHED DURING SEARCH, HAVING REGARD TO THE PROVISIONS OF THE ACT. HOWEVER, IN RELATION TO UNABATED ASSESSMENTS (AYS), WHICH WERE NOT PENDING ON THE DA TE OF SEARCH, THERE IS A RESTRICTION ON THE POWERS OF THE AO. IN CASE OF UNA BATED ASSESSMENTS, THE AO CAN RE- ASSESS THE INCOME ONLY TO THE EXTENT AND WITH REFER ENCE TO ANY INCRIMINATING MATERIAL WHICH THE REVENUE HAS UNEARTHED IN THE COURSE OF SE ARCH. MERELY BECAUSE AN ASSESSEE IS SUBJECTED TO SEARCH, HE CANNOT BE PLACE D ON A DIFFERENT PEDESTAL OR PUT IN A MORE DISADVANTAGEOUS POSITION THAN AN ASSESSEE WH O IS NOT SUBJECTED TO SEARCH IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 6 | P A GE UNLESS IN THE COURSE OF SEARCH SOME INCRIMINATING D OCUMENTS OR EVIDENCE OR INFORMATION OR MATERIAL IS GATHERED BY THE INVESTIG ATING AUTHORITIES SO AS TO VEST THE AO WITH THE NECESSARY POWERS TO MAKE ADDITIONS TO T HE TOTAL INCOME IN RELATION TO ASSESSMENTS WHICH DID NOT ABATE ON ACCOUNT OF SEARC H. CONSIDERING THESE ASPECTS THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS KABU L CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HELD AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE P ERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING T HE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOM E FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE LD AOS AS A FRESH EXERCISE. THE LD AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE LD AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEAR S. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUG HT TO TAX'. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS S HOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH , OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE LD AO WHICH CAN B E RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMP LETE ASSESSMENT PROCEEDINGS. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BR OUGHT ON THE RECORD OF THE LD AO. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE LD AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 7 | P A GE UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURS E OF ORIGINAL ASSESSMENT.' 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 AND 2006-07, ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD CO MPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 14. WE FIND THAT THE HON'BLE DELHI HIGH COURT WHILE ADJUDICATING THE APPEAL IN THE CASE OF CIT VS KABUL CHAWLA (2016) 380 ITR 573 HAD TAKEN JUDICIAL NOTE OF HOST OF THE EARLIER DECISIONS IN THE CASES OF CIT VS ANI L KUMAR BHATIA REPORTED IN (2013) 352 ITR 493 (DEL) ; CIT VS CHETAN DAS LACHMAN DAS R EPORTED IN (2012) 211 TAXMAN 61 (DEL HC) ; MADUGULA VENU VS DIT REPORTED IN (2013) 215 TAXMAN 298 (DEL HC) ; CANARA HOUSING DEVELOPMENT CO. VS DCIT R EPORTED IN (2014) 49 TAXMANN.COM 98 (KAR HC) ; FILATEX INDIA LTD VS CIT REPORTED IN (2014) 229 TAXMAN 555 (DEL HC) ; JAI STEEL (INDIA) VS ACIT REPORTED I N (2013) 219 TAXMAN 223 (DEL HC) ; CIT VS MURLI AGRO PRODUCTS LTD REPORTED IN (2 014) 49 TAXMANN.COM 172 (BOM HC) ; CIT VS CONTINENTAL WAREHOUSING CORPORATION (N HAVA SHEVA) LTD REPORTED IN (2015) 374 ITR 645 (BOM HC) AND ALL CARGO GLOBAL LO GISTICS LTD VS DCIT REPORTED IN (2012) 137 ITD 287 (MUM ITAT) (SB). WE ALSO FIND THAT REVENUES SLP AGAINST THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) WAS DISMISSED BY THE HON'BLE APEX COURT WHICH IS RE PORTED IN 380 ITR (ST.) 4 (SC). 15. WE ALSO FIND THAT THE HON'BLE JURISDICTIONAL HI GH COURT IN THE CASE OF PRINCIPAL CIT VS M/S SALASAR STOCK BROKING LTD IN G .A.NO. 1929 OF 2016 ITAT NO. 264 OF 2016 DATED 24.8.2016 ENDORSED THE AFORESAID VIEW OF HON'BLE DELHI HIGH COURT IN KABUL CHAWLA'S CASE. THE HONBLE HIGH COUR T ALSO PLACED RELIANCE ON THEIR OWN DECISION IN THE CASE OF CIT VS VEERPRABHU MARKE TING LTD REPORTED IN (2016) 73 TAXMANN.COM 149 (CAL HC) AND HELD AS FOLLOWS: SUBJECT MATTER OF CHALLENGE IS A JUDGEMENT AND ORD ER DATED 18TH DECEMBER, 2015 BY WHICH THE LEARNED TRIBUNAL DISMISSED AN APP EAL PREFERRED BY THE REVENUE REGISTERED AS ITA NO.1775/KOL/2012 AND ALLOWED A CR OSS-OBJECTION REGISTERED AS CO-30/KOL/2013 BOTH PERTAINING TO THE ASSESSMENT YE AR 2005-06. THE LEARNED TRIBUNAL WAS OF THE OPINION THAT THE ASSESSING OFFI CER HAD NO JURISDICTION UNDER SECTION 153A OF THE INCOME TAX ACT TO REOPEN THE CO NCLUDED CASES WHEN THE SEARCH AND SEIZURE DID NOT DISCLOSE ANY INCRIMINATI NG MATERIAL. IN TAKING THE AFORESAID VIEW, THE LEARNED TRIBUNAL RELIED UPON A JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CIT[A] VS. KABUL CHAWLA IN ITA NO.70 7/2014 DATED 28TH AUGUST, 2014. THE AGGRIEVED REVENUE HAS COME UP IN APPEAL. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 8 | P A GE MR. BAGARIA, LEARNED ADVOCATE APPEARING FOR THE ASS ESSEE, SUBMITTED THAT MORE OR LESS AN IDENTICAL VIEW WAS TAKEN BY THIS BENCH IN I TA 661/2008 [CIT VS. VEERPRABHU MARKETING LTD.] WHEREIN THE FOLLOWING VI EWS WERE EXPRESSED - 'WE ARE IN AGREEMENT WITH THE VIEWS EXPRESSED BY TH E KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE- REQUISITE BEFORE P OWER COULD HAVE BEEN EXERCISED UNDER SECTION153C READ WITH SECTION 153A. IN THE CASE BEFORE US, THE ASSESSING OFFICER HAS MA DE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREADY DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WERE NOT CONTEMPLATED BY THE PROVISIO NS CONTAINED UNDER SECTION 153C READ WITH SECTION 153A. THE DISALLOWANCES MADE BY THE ASSESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCES.' IN THAT VIEW OF THE MATTER, WE ARE UNABLE TO ADMIT THE APPEAL. THE APPEAL IS, THEREFORE, DISMISSED. 16. CONSIDERING THE JUDICIAL PRECEDENTS (SUPRA) ON THE SUBJECT, PARTICULARLY THE DECISION OF THE THE HON'BLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF PCIT VS SALASAR STOCK BROKING LTD. (SUPRA) WHICH IS BINDING UPON THIS TRIBUNAL AS WELL AS THE HONBLE APEX COURT DECISION, WE HOLD THAT IN THE CA SE OF UNABATED ASSESSMENTS OF AN ASSESSEE, NO ADDITION IS PERMISSIBLE IN THE ORDER U /S 153A OF THE ACT UNLESS IT IS BASED ON ANY TANGIBLE, COGENT AND RELEVANT INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH QUA THE ASSESSEE AND QUA THE AY. 7. HERE, IN THE INSTANT CASE, WE NOTE THAT THE ABOV E LEGAL POSITION IS NOT IN DISPUTE. THE LD. CIT(A) HAS HIMSELF OBSERVED THAT FOR MAKING ADDITION IN THE PROCEEDINGS U/S 153A OF THE ACT FOR UNABATED ASSESSMENTS, THERE HAS TO BE SOME INCRIMINATING MATERIAL FOUND IN RELATION THERETO. THE LD. CIT(A) HAS HOWEV ER POINTED OUT CERTAIN MATERIALS, WHICH IN HIS OPINION, CONSTITUTED INCRIMINATING MA TERIAL TO AID THE ADDITIONS MADE BY THE AO. HENCE, THE LIMITED ISSUE FOR OUR CONSIDERAT ION IS, WHETHER THE ADDITIONS, WHICH THE AO MADE IN THE ASSESSMENT ORDERS, WERE BASED ON OR MADE WITH REFERENCE TO ANY INCRIMINATING DOCUMENT UNEARTHED IN THE COURSE OF S EARCH. THE LD. COUNSEL OF THE ASSESSEE DREW OUR ATTENTION TO PARAS 4.1 & 4.2 OF T HE ORDER OF THE LD. CIT(A) WHEREIN HE HAS LISTED OUT THE PURPORTED INCRIMINATING MATER IAL ON THE BASIS OF WHICH THE ADDITIONS HAD BEEN MADE BY THE AO. THE RELEVANT PAR A 4.1.1 OF THE ORDER OF THE LD. CIT(A) IS EXTRACTED HEREIN BELOW: IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 9 | P A GE PARA 4.1.1. IT NEEDS TO BE DECIDED AS TO WHETHER I N THE APPELLANTS CASE THERE WAS ANY INCRIMINATING MATERIAL PRESENT OR NOT? ON A PER USAL OF THE ASSESSMENT ORDER AND THE APPRAISAL REPORT, IT IS EVIDENT THAT THE BASIS OF THE ADDITION INTER ALIA IS THAT THE DDIT HAS POINTED OUT MANY INCRIMINATING MATERIALS O N THE BASIS OF WHICH THE ASSESSMENT ORDER HAS BEEN FRAMED. SOME OF THESE MAT ERIALS ARE: I) THAT THE MANI GROUP HAS OBTAINED UNSECURED LOANS FROM LARGE NUMBER OF CORPORATE. FIELD ENQUIRED CARRIED OUT BY DDIT ON TE ST CHECK BASIS. IT WAS FOUND THAT 95 SUCH COMPANIES WOULD NOT BE LOCATED AT THEIR REG ISTERED ADDRESS. THE DDIT HAS MENTIONED REPORT OF THE INSPECTOR RELATED TO MORE T HAN 95 SUCH COMPANIES FROM WHERE THE ASSESSEE HAS TAKEN LOAN WHERE THE COMPANIES COU LD NOT BE FOUND AT THE ADDRESS GIVEN. II) FURTHER, THE DDITFOUND PUT THAT VARIOUS COMPANI ES FROM WHICH UNSECURED LOAN WAS TAKEN BY MANI GROUP WHERE FOUND IN THE DAT A BASE OF ENTRY OPERATORS MAINTAINED BY INVESTIGATION DIRECTORATE. III) THE DDIT HAS RECORDED THE STATEMENT OF, ANY EN TRY OPERATORS AND THEY HAVE ADMITTED TO HAVE PROVIDED ACCOMMODATION ENTRY TO MA NI GROUP THROUGH JAMAKHARCHI COMPANIES. IV) IT ALSO SEEN THAT MR. PARAS MAI RAKHAHJA, RAJAT BANERJEE, SUMIT GOENKA, PRAKASH AGARWAL, PRABIR KR. DAS, DEO KR. SAM, PRITH IVI RAJ MUKHERJEE, PRATIK KHARE, SUDARSHAN GANGULI, BINOD KR. KHANDELWAL, EMP LOYEE OF THE MANI GROUP HAVE FILED A DECLARATION THAT THEY ARE DUMMY DIRECTORS O F MANY COMPANIES. THE NAME OF THESE COMPANIES ARE CONTAINED IN THE REPORT OF THE DDIT. V) STATEMENT RECORDED SHRI SANJAY JHUNJHUNWALA DT. 23.06.2016 DISCUSSES NUMBER OF INCRIMINATING MATERIAL SEIZED AS A RESULT OF SEARCH AT ASSESSEES PREMISES. VI) THE INVESTIGATING OFFICER (AO/DDIT) HAS ALSO ST ATED AT MANY PLACES THAT THE PARTIES FROM WHOM LOANS HAVE BEEN TAKEN DID NOT RES POND TO SUMMONS, THE INVESTIGATING OFFICER HAS ALSO MENTIONED THAT THE C OMPANIES FROM WHOM LOANS HAVE BEEN TAKEN ARE IN THE DATA BASE OF LIST OF SHELL CO MPANIES MAINTAINED BY INCOME TAX DEPARTMENT. THEY HAVE ALSO OBSERVED THAT MOST OF TH ESE COMPANIES ARE CONTROLLED BY ENTRY OPERATORS WHOSE STATEMENT WAS RECORDED BY THE DEPARTMENT AND THEY HAVE ADMITTED TO BE WORKING AS AN ENTRY OPERATOR. 8. THE LD. A.R THEREAFTER DREW OUR ATTENTION TO THE FOLLOWING PARA 4.1.2 OF THE LD. CIT(A) WHEREIN HE HAS SET OUT HIS REASONING BASED O N WHICH HE HELD THAT THE ABOVE REFERRED MATERIAL CONSTITUTED INCRIMINATING MATERIA L FOUND IN THE COURSE OF SEARCH. THE INCRIMINATING MATERIAL CAN BE IN ANY FORM SUCH AS EVIDENCE IN THE NATURE OF I) A DOCUMENT, CONTENT OF ANY DOCUMENT, II) AN ENTRY IN THE BOOKS OF ACCOUNT, III) AN ASSET, IV) A STATEMENT GIVEN ON OATH, V) ABSENCE OF ANY FA CT CLAIMED EARLIER BUT COMING TO NOTICE DURING SEARCH, VI) ABSENCE OF BOOKS BEING FO UND DURING SEARCH, OR VII) ABSENCE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 10 | P A GE OF THE OFFICE / BUSINESS PREMISES AS CLAIMED DURING RETURNS FILED OR ANY OTHER DOCUMENTS, ETC. IN SHORT, ANY FACT / EVIDENCE WHICH COULD SUGGEST THAT THE DOCUMENTS/ TRANSACTIONS CLAIMED OR SUBMITTED IN ANY EARLIER PR OCEEDINGS WERE NOT GENUINE, BEING ONLY A DEVICE / MAKE BELIEF ON NON-EXISTENT FACTS O R SUPPRESSED MISREPRESENTED FACTS, WOULD CONSTITUTE INCRIMINATING MATERIAL. 9. BEFORE WE PROCEED TO EXAMINE THE RELEVANT MATERI ALS POINTED OUT BY THE LD. CIT(A), IT IS FIRST IMPERATIVE TO SEE AS TO ON WHA T BASIS DID THE AO JUSTIFY THE IMPUGNED ADDITIONS U/S 68 & 69C OF THE ACT. ON PERU SAL OF THE NOTICES ISSUED U/S 142(1) DATED 23.08.2018, 14.09.2018 & 10.10.2018 [P AGES 205 TO 224 OF PAPER BOOK], WE NOTE THAT THE AO HAD INITIALLY REQUISITIONED SEV ERAL DETAILS & DOCUMENTS FROM THE ASSESSEE, INTER ALIA INCLUDING THE DETAILS OF THE U NSECURED LOANS RAISED DURING THE RELEVANT YEARS. IT IS NOTED THAT IN NONE OF THESE N OTICES ISSUED U/S 142(1) THE ASSESSING OFFICER DID NOT MENTION OF ANY INCRIMINATING MATER IAL, WHICH WAS FOUND IN THE COURSE OF SEARCH, BASED ON WHICH SUCH DETAILS OF UN SECURED LOANS HAD BEEN REQUISITIONED. UPON OBTAINING THE DETAILS OF UNSECU RED LOANS, IT IS NOTED THAT THE AO MADE ENQUIRIES FROM THE LOAN CREDITORS U/S 131 OF T HE ACT, AND SOME OF THE NOTICES WENT UN-SERVED. THE AO ACCORDINGLY ISSUED SHOW CAU SE NOTICE DATED 14.12.2018, WHICH IS AVAILABLE AT PAGE 263 TO 265 OF THE PAPER BOOK, IN WHICH HE INFORMED THE APPELLANT REGARDING THE NON-SERVICE OF SUMMONS TO F IFTEEN (15) LOAN CREDITORS AND REQUIRED THE APPELLANT TO PRODUCE THE DIRECTORS OF SUCH LOAN CREDITORS ALONG WITH RELEVANT DOCUMENTS FOR VERIFICATION OF THE LOAN TRA NSACTIONS. FROM THE CONTENTS OF THE SHOW CAUSE, IT IS NOWHERE DISCERNIBLE AS TO WHAT WA S THE INCRIMINATING MATERIAL UNEARTHED IN THE COURSE OF SEARCH , WHICH LED THE AO TO MAKE THE IMPUGNED ADDITIONS U/S 68 & 69C OF THE ACT. IT IS NOTED FROM THE SHOW CAUSE THAT THE AO ONLY MADE A PASSING REFERENCE TO STATEMENTS OF ALLEGED ENTRY OP ERATORS WHO HAD ADMITTED TO PROVIDING ACCOMMODATION ENTRIES THROUGH THESE LOAN CREDITORS. THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT THESE SO-CALLED STATEMENT S OF ENTRY OPERATORS WERE NEVER PROVIDED TO THE APPELLANT IN THE COURSE OF ASSESSME NT BUT ONLY LATER AT THE APPELLATE STAGE. SO, ACCORDING TO LD. A.R, THE ASSESSING OFFI CER WITHOUT GIVING THE COPY OF ENTRY OPERATORS TO THE ASSESSEE, COULD NOT HAVE RELIED UP ON THE SAME FOR DRAWING ANY ADVERSE INFERENCE AGAINST THE ASSESSEE AND MADE THE ADDITIO NS. SO, THE ADDITIONS MADE BY IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 11 | P A GE ASSESSING OFFICER ITSELF IS BAD IN LAW. ACCORDING T O HIM, EVEN WORSE, THE LD. CIT(A) HAS REFERRED TO THESE THIRD PARTY STATEMENTS AS IN CRIMINATING MATERIAL QUA THE ASSESSEE. WE HAVING EXAMINED THE CONTENTS OF THE ST ATEMENTS, IT IS NOTED THAT NONE OF THEM WERE NEITHER RECORDED IN THE COURSE OF THE SEA RCH CONDUCTED UPON THE APPELLANT NOR BY THE AO ON HIS OWN DURING RE-ASSESSMENT PROCE EDINGS. MOREOVER IT IS NOTED THAT, IN NONE OF THESE STATEMENTS DID THESE PERSONS NAME THE ASSESSEE NOR IN THE SWORN STATEMENTS HAD THE SO-CALLED ENTRY OPERATORS ADMITT ED OF PROVIDING ACCOMMODATION ENTRIES TO THE APPELLANT OR ISSUING CHEQUES IN LIEU OF CASH RECEIVED FROM THE APPELLANT. FOR SUCH REASONS THEREFORE, WE HOLD THAT SUCH THIRD PARTY STATEMENTS COULD NOT BE SAID TO CONSTITUTE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH UPON THE ASSESSEE. 10. WE FIND THAT THESE SAME THIRD PARTY STATEMENTS WERE ALSO REFERRED TO AS INCRIMINATING MATERIAL FOR JUSTIFYING SIMILAR ADD ITIONS MADE U/S 68 & 69C IN THE CASE OF ASSESSEES SISTER CONCERN, M/S MANI SQUARE LTD ( SUPRA). IN THE DECIDED CASE, THIS TRIBUNAL HELD THAT THE THIRD PARTY STATEMENTS REFER RED BY THE AO TO JUSTIFY ADDITIONS MADE U/S 68 & 69C OF THE ACT DID NOT CONSTITUTE INCRIMINATING MATERIAL UNEARTHED IN THE COURSE OF SEARCH CONDUCTED UPON THE ASSESSEE, BY OBSERVING AS UNDE R: 31.COMING NEXT TO THE ADDITIONS MADE U/S 68 & 69C IN THE HANDS OF THE ASSESSEE AND M/S IQCIPL (SINCE MERGED INTO THE APPELLANT COM PANY), THE AO FOR JUSTIFYING THE ADDITION HAD REFERRED TO THE STATEMENTS OF SO-C ALLED ENTRY OPERATORS RECORDED BY DIFFERENT OFFICERS OF INCOME-TAX DEPARTMENT BETWEEN THE YEARS 2013 TO 2015. THE LD. AR POINTED OUT THAT NONE OF THE STATEMENTS REFERRED TO BY THE AO, JUSTIFYING THE ADDITIONS MADE IN THE ASSESSMENT ORDER WERE RECORDE D IN THE COURSE OF SEARCH CONDUCTED AGAINST THE ASSESSEE ON 22.06.2016 OR IN ANY PROCEEDINGS CONNECTED WITH THE SAID SEARCH. IT IS NOTED FROM THE ASSESSMENT OR DER THAT THE AO HAS STATED THAT THESE STATEMENTS AND DATA WERE OBTAINED BY HIM FROM DEPARTMENTAL DATABASE AND PUBLIC DOMAIN ON WHICH HE PLACED RELIANCE TO JUSTIF Y THE ADDITIONS MADE U/S 68 & 69C OF THE ACT. THESE AVERMENTS OF THE AO MAKE IT C LEAR THAT THE ALLEGED STATEMENTS AND DATA FROM PUBLIC DOMAIN WAS NOT COLLECTED OR FO UND IN THE COURSE OF SEARCH CONDUCTED ON 22-06-2016. AND NEITHER THE SO-CALLED ENTRY OPERATORS WERE SUMMONED BY THE AO NOR EXAMINED BY HIM INDEPENDENTLY IN RELA TION TO THEINCOME-TAX ASSESSMENT OF THE ASSESSEE. IT ALSO APPEARED FROM T HE DISCUSSION IN THE ASSESSMENT ORDER THAT EXCEPT, MAKING SELECTIVE REFERENCE TO PA RT OF THE STATEMENTS OF FEW PERSONS, RECORDED BETWEEN YEAR 2013 TO 2015 BY SOME OTHER OF FICERS OF THE DEPARTMENT, THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 12 | P A GE AO HIMSELF NEVER EXAMINED ANY OF THE SO CALLED ENTR Y OPERATORS INDEPENDENTLY DURING THE ASSESSMENT PROCEEDINGS AND ELICITED ANY ANSWERS SO AS TO BRING ON RECORD RELEVANT FACTS WHICH WOULD PROVE THAT ASSESSEE WAS BENEFICIARY OF THE ACCOMMODATION ENTRIES ALLEGEDLY PROVIDED BY ANY OF THEM AND THUS JUSTIFY HIS ADVERSE VIEW. AND MOREOVER, IF THE AO WANTED TO STI LL RELY ON THE STATEMENTS OF THIRD PARTY TO DRAW ANY ADVERSE INFERENCE AGAINST THE ASS ESSEE/IQCIPL/APPELLANT, THEN HE WAS DUTY BOUND TO FURNISH A COPY OF THE THIRD PARTY STATEMENT TO ASSESSEE/IQCIPL/APPELLANT AND THEN SUMMON THE THIRD PARTIES AND EXAMINE THEM HIMSELF AND THEREAFTER ALLOWED THE ASSESSEE/IQCIPL/ APPELLANT AN OPPORTUNITY TO CROSS EXAMINE AND THEREAFTER IF HE IS SATISFIED ABO UT THE VERACITY OF THEIR STATEMENTS THEN HE CAN RELY ON SUCH STATEMENT, WHICH UNFORTUNA TELY THE AO HAS NOT DONE, SO THE THIRD PARTY STATEMENT CANNOT BE RELIED UPON BY THE AO TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE/IQCIPL/APPELLANT. IT HAS TO BE KEPT IN MIND THAT WIDE THOUGH HIS POWER, THE AO MUST ACT IN CONSONANCE WITH THE R ULES OF NATURAL JUSTICE. ONE SUCH RULE IS THAT HE SHALL NOT USE ANY MATERIAL AGAINST THE ASSESSEE WITHOUT GIVING HIM AN OPPORTUNITY TO MEET IT. IN SHORT, THE AO CANNOT ASS ESS KEEPING THE ASSESSEE IN DARK AS TO THE MATERIALS AGAINST HIM. AND EVEN AFTER THE MA TERIAL/STATEMENT IS FURNISHED TO THE ASSESSEE, AND THE ASSESSEE CONTEST THE VERACITY OF THE STATEMENT AGAINST HIM, THEN THE AO IS BOUND TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO TEST THE VERACITY OF THE STATEMENT ON THE TOUCH STONE OF CROSS EXAMINATION A ND THEREAFTER ONLY THE AO CAN RELY ON THE STATEMENT OR ELSE HE CANNOT BE ALLOWED TO RELY ON THE STATEMENT OF THE THIRD PARTY AGAINST THE ASSESSEE. (REFER HONBLE SU PREME COURT DECISION IN ANDAMAN TIMBER INDUSTRIES IN CIVIL APPEAL NO. 4228 OF 2006) . IN THE CIRCUMSTANCES WE FIND MERIT IN THE LD. ARS CLAIM THAT THE THIRD PARTY ST ATEMENTS RELIED UPON BY THE AO WITHOUT EVEN RECORDING THEIR STATEMENT AND ALLOWING THE ASSESSEE TO CROSS EXAMINE, CANNOT JUSTIFY THE ADDITIONS U/S 68 & 69C AND THE S TATEMENTS CANNOT BE SAID TO BE INCRIMINATING MATERIAL OR DOCUMENTS FOUND AND/OR CO LLECTED IN THE COURSE OF SEARCH CONDUCTED AGAINST THE ASSESSEE AND SO, CANNOT BE US ED AGAINST THE ASSESSEE. 32. FOR THE ABOVE FINDING OF OURS, WE RELY ON THE D ECISION RENDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF BA NKATESH SYNTHETIC PVT LTD VS ACIT IN IT(SS) NO. 142/KOL/2018 DATED 24.04.2019. I N THIS DECIDED CASE ALSO THE AO HAD MADE ADDITIONS BY WAY OF UNEXPLAINED SHARE CAPI TAL IN ASSESSMENT FRAMED U/S 153A OF THE ACT. THE BASIS OF THE ADDITION WAS THE THIRD PARTY STATEMENTS OF ALLEGED ENTRY OPERATORS WHO HAD PURPORTEDLY ADMITTED OF PRO VIDING ACCOMMODATION ENTRIES TO THE ASSESSEE. ON APPEAL THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO. BEFORE THIS TRIBUNAL THE QUESTION WHICH CAME UP FOR CONSIDERATI ON WAS WHETHER ADDITION MADE BY THE AO U/S 68 OF THE ACT WAS TENABLE WHEN NO PRO CEEDINGS WERE PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF SEARCH AND NO INCRIMINATING MATERIAL WAS FOUND/UNEARTHED BY THE SEARCH TEAM FROM THE PREMISE S OR POSSESSION OF THE ASSESSEE. THE ASSESSEE HAD CONTENDED THAT THE STATEMENTS OF E NTRY OPERATORS REFERRED TO BY THE AO FOR MAKING THE ADDITION/S U/S 68 DID NOT CONSTIT UTE INCRIMINATING MATERIAL FOUND IN COURSE OF ASSESSEES SEARCH AND THEREFORE THE A DDITION MADE IN THE ASSESSMENT IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 13 | P A GE FRAMED U/S 153A WAS LEGALLY INVALID. ANSWERING THE QUESTION IN FAVOUR OF THE ASSESSEE, THIS TRIBUNAL HELD THAT THE STATEMENTS OF ALLEGED ENTRY OPERATORS RECORDED IN THE ACTIONS CONDUCTED U/S 132/133A IN THEIR RESP ECTIVE SEARCHES CANNOT BE SAID TO CONSTITUTE INCRIMINATING MATERIAL FOUND IN THE COU RSE OF SEARCH UPON THE ASSESSEE AND ACCORDINGLY DELETED THE ADDITIONS MADE IN THE O RDER U/S 153A SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED IN THE COURSE OF SEARCH IN RELATION TO AN UNABATED ASSESSMENT. THE RELEVANT FINDINGS OF THIS TRIBUNAL ARE AS FOLLOWS: 7. BEFORE US, LD COUNSEL FOR THE ASSESSEE BEGINS B Y POINTING OUT THAT DURING BOTH THE SEARCH OPERATIONS CONDUCTED IN THE CASE OF BANK TESH GROUP, NO DOCUMENT OR INCRIMINATING MATERIAL WAS FOUND OR SEIZED PERTAINI NG TO THE ASSESSEE COMPANY. THE ASSESSEE'S ASSESSMENT UNDER SECTION 143(3) OF T HE ACT ALSO STOOD COMPLETED FOR THE RELEVANT ASSESSMENT YEAR AND IN ABSENCE OF ANY INCRIMINATING MATERIAL, FOUND/ UNEARTHED DURING THE COURSE OF SEARCH U/S 13 2 OF THE ACT, THE LD AO HAD NO JURISDICTION TO MAKE SUCH ADDITIONS. THE INCRIMINAT ING MATERIAL IS THE SINE QUA NON FOR MAKING ADDITION U/S L53A OF THE ACT, WHICH IS ABSENT IN THE ASSESSEE`S CASE UNDER CONSIDERATION. THEREFORE, ACCORDING TO THE WE LL SETTLED PRINCIPLES OF LAW, THAT IS, IN ABSENCE OF ANY INCRIMINATING MATERIAL, MAKING ADDITIONS TO THE ASSESSEE'S INCOME ALREADY ASSESSED U/S 143(3)/153A/ 143(1) OF THE ACT FOR UNABATED YEARS, IS NOT ONLY WITHOUT JURISDICTION BU T ALSO ERRONEOUS. THEREFORE, ADDITION MADE BY AO UNDER SECTION 68 OF THE ACT, TO THE TUNE OF RS. 50,00,000/- IS NOT SUSTAINABLE IN LAW AND MAY BE DELETED. 8. ON THE OTHER HAND, LD DR FOR THE REVENUE, FURNIS HED BEFORE THE BENCH, A COPY OF WRITTEN SUBMISSIONS AND PAPER BOOK. THE WRITTEN SUBMISSIONS OF LD DR IS REPRODUCED BELOW: 1.THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN TEXT ILE BUSINESS. IT IS ONE OF THE GROUP COMPANIES OF BANKTESH GROUP. 2.A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN T HE CASE OF BANKTESH GROUP ON 29/05/2012 AND THE ASSESSEE COMPANY WAS COVERED IN THE SEARCH WARRANT. 3.THEREAFTER AGAIN ON 02/03/2016 A SEARCH AND SEIZU RE OPERATION WAS CONDUCTED IN THE CASE OF BANKTESH GROUP AND THE ASSESSEE COMP ANY'S NAME WAS COVERED IN THE SEARCH WARRANT. 4.PURSUANT TO THE SEARCH OPERATION A NOTICE U/S 153 A OF THE ACT WAS ISSUED TO THE ASSESSEE FOR A.Y. 2010-11 AND IN RESPONSE THE ASSES SEE FILED THE RETURN OF INCOME ON 10/12/2016 DECLARING A TOTAL INCOME OF RS.5,98,5 50/- 5.ASSESSMENT U/S 153A/143(3) OF THE ACT WAS COMPLET ED ON 31/12/2017 ASSESSING THE TOTAL INCOME AT RS. 56,23,550/- AND RAISED CONS EQUENTIAL DEMAND OF RS. 28,25,940/-. IN THE ASSESSMENT ORDER THE LD. ACIT, CENTRAL CIRCLE--3(2), KOLKATA (A.O.) MADE THE FOLLOWING ADDITIONS TO THE ASSESSEE 'S INCOME. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 14 | P A GE A. ADDITION U/S 68 OF THE ACT ON ACCOUNT OF SHARE C APITAL- RS. 50,00,000/- B. ADDITION OF ALLEGED EXPENDITURE ON COMMISSION PAID - RS. 25,000/- FOR RAISING THE SHARE CAPITAL U/S 69C. TOTAL RS. 50,25,000/- 6) MR. KESHAV KUMAR BUBNA, THE DIRECTOR OF THE ASSE SSEE COMPANY (BSL) AND IS THE PRIMA DONNA OF THE BUBNA GROUP. HE HAD ADMITTED ON OATH THAT THE ASSESSEE COMPANY WAS NOT HAVING ANY BUSINESS, EARLIER THEY W ERE INTO TEXTILES. (7)COMPANY HAD ISSUED SHARES (F.V.10+30 PREMIUM) TO TWO SHARES SUBSCRIBING COMPANIES (SSCO), THUS THE PREMIUM OF RS. 30 IS NOT BASED ON COMMERCIAL EXPEDIENCY, IN WHICH NO PRUDENT PERSON/ COMPANY WOULD INVEST. AS ON 31/03/2010 BANKTESH SYNTHETIC LIMITED, THE AS SESSEE CO. HAD ALLOTTED SHARES TO TWO (2) SHARE SUBSCRIBING COMPANIES WITH FACE VA LUE OF RS. 10 WITH PREMIUM OF RS. 30 TOTAL RS 40 EACH PER SHARE. IT IS AGAINST THE HUMAN PROBABILITY THAT ANYONE WIL L INVEST AND PAY RS 10/- ALONG WITH SHARE PREMIUM OF RS. 30/- PER SHARE WITHOUT HA VING ANY FUTURE PROSPECT OF THE EARNING BY THE COMPANY. IT WOULD BE PERTINENT T HAT ASSESSEE COMPANY BSL HAD DISCONTINUED ITS EARLIER BUSINESS AS MENTIONED BY T HE DIRECTOR OF ASSESSEE COMPANY MR. KESHAV KUMAR BUBNA (KKB), THE CURRENT D IRECTORS HAVEN'T BEEN ABLE TO JUSTIFY, WHY THE SHARES WERE PRICED AT HIGH PREMIUM OF RS. 30/- PER SHARE, WITHOUT CORRESPONDING VALUATION OF THE COMPANY, WHI CH WAS ALREADY EXPERIENCING DOWN TURN IN BUSINESS PROSPECT. IN THE NORMAL CIRCU MSTANCES IT IS NOT POSSIBLE UNTIL UNLESS ALL THE TWO (2) COMPANIES ARE BEING CO NTROLLED REMOTELY BY ONE PERSON. ALL THE CIRCUMSTANCES MANIFESTS THAT THESE ARE ALL PAPER COMPANIES NOT HAVING SUFFICIENT WORTH AND CREATED FOR PROVIDING E NTRIES OF SHARE APPLICATION MONEY OR SHARE CAPITAL OR LOANS BY WAY OF ACCOMMODA TION ENTRIES. (8) THE ACCOMMODATION ENTRY PROVIDER (AEP) MR. BHAG WAN DAS AGARWAL IN MULTIPLE STATEMENT RECORDED U/S 131, 133(1), 132(4) AND 132(3) READ WITH 132(4). ON 10/012014 HAS REPLIED TO QUESTION NO.8, 'PLEASE STATE THE NAME OF COMPANIES MANAGED / OPERATED BY YOU AND ALSO STATE WHO ARE TH E DIRECTORS IN THESE COMPANIES' : ANS: AS FAR AS MY KNOWLEDGE IS CONCERNED, I AM HAVI NG CONTROL OF FEW COMPANIES, SUCH AS WEST WELL TIE UP PVT. LTD, WELL PLAN TIE UP PVT. LTD, MALINATH TRADECON PVT. LTD, AND ALSO NAMES SHANTANU BOSE (DIN 0111642 8), DINESH KUMAR PATWARI (DIN 00511386), LOKNATH SEN (DIN 01363525). 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD, WE NOTE THAT THE ORIGINAL RETURN OF INCOME UNDER SE CTION 139 (1) OF THE ACT WAS SUBMITTED BY THE ASSESSEE COMPANY ON 12.10.2010. TH E SAID RETURN OF INCOME OF IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 15 | P A GE THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961, ON 14.04.2011. BEFORE US, THE ASSESSEE IS IN APPEAL FO R ASSESSMENT YEAR 2010-11, WHICH WAS COMPLETED ON 14.04.2011. WE NOTE THAT AFTER COMPLETION OF ORIGINAL ASSESSMEN T DATED 14.04.2011, FOR A.Y.2010- 11, A SEARCH AND SEIZURE OPERATION WAS CO NDUCTED IN THE CASE OF BANKTESH GROUP ON 29.05.2012 (FIRST SEARCH) AND THE ASSESSEE COMPANY WAS COVERED IN THE SEARCH WARRANT, THEREFORE, A.Y.2010- 11 IS AN UNABATED ASSESSMENT. CONSEQUENT UPON THE SAID SEARCH OPERATION, ASSESSME NT U/S 153A R/W 143(3) OF THE ACT WAS COMPLETED ON 30.03.2015 AND NO ADVERSE INFERENCE WAS DRAWN IN THE SAID ASSESSMENT ORDER REGARDING THE SHARE CAPITAL R AISED DURING THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2010-11. THEREAFTER, AGAIN ON 02.03.2016, A SEARCH AND SEIZU RE OPERATION (SECOND SEARCH) WAS CONDUCTED IN THE CASE OF BANKTESH GROUP AND THE ASSESSEE COMPANY'S NAME WAS COVERED IN THE SEARCH WARRANT. PURSUANT TO THE SEARCH OPERATION, A NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE FOR A.Y. 2010-11 AND IN RESPONSE, THE ASSESSEE FILED THE RETURN OF INCOME ON 10.12.2016, DECLARING A TOTAL INCOME OF RS. 5,98,550/-. THEREAFTER, AN ASSESSMENT U/S 153A/143( 3) OF THE ACT WAS COMPLETED ON 31.12.2017 ASSESSING THE TOTAL INCOME AT RS. 56, 23,550/-. IN THE ASSESSMENT ORDER, THE LD ACIT, CENTRAL CIRCLE-3(2), KOLKATA (A O) MADE ADDITION U/S 68 OF THE ACT ON ACCOUNT OF SHARE CAPITAL, TO THE TUNE OF RS. 50,00,000/-. WE NOTE THAT ON THE BASIS OF THE SEARCH CONDUCTED O N 29.05.2012, THE ASSESSEE'S ASSESSMENT STOOD COMPLETED U/S 153A/ 143(3) OF THE ACT, ON 30.03.2015. WE NOTE THAT AGAIN, DURING THE COURSE OF SECOND SEARCH OPER ATION CONDUCTED ON 02.03.2016, NO DOCUMENTS PERTAINING TO THE ASSESSEE WAS FOUND AND/OR SEIZED, THAT IS, THERE WERE NO ANY INCRIMINATING MATERIAL F OUND OR UNEARTHED DURING THE SEARCH. THEREFORE, IN ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND IN CONNECTION TO THE ASSESSEE, THE ADDITION OF RS. 50, 00,000/- IN GARB OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT, MADE BY THE LD AO IN THE IMPUGNED ASSESSMENT ORDER IS WHOLLY UNTENABLE IN LAW AND ON FACTS OF THE CASE . THUS, WE NOTE THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL OR DOCUMENT FOUND DUR ING THE COURSE OF SEARCH, THE ASSESSING OFFICER CANNOT MAKE ADDITIONS/DISALLOWANC ES IN THE ASSESSMENTS U/S 153A/143(3) OF THE ACT FOR THE UNABATED ASSESSMENT YEARS. 33. WE ALSO PLACE RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF LOYALKA FARMS PVT LTD VS DCIT IN ITA(SS) NO. 67/KOL /2018 DATED 14.11.2018.IN THE DECIDED CASE ALSO ADDITIONS WERE MADE BY THE AO U/S 68 OF THE ACT REFERRING TO STATEMENTS OF ALLEGED ENTRY OPERATORS IN THE UNABAT ED ASSESSMENTS WHICH WERE COMPLETED U/S 153A OF THE ACT. ON APPEAL THIS TRIBU NAL HELD THAT THE THIRD PARTY STATEMENTS BY THEMSELVES DO NOT CONSTITUTE INCRIMIN ATING MATERIAL FOUND IN THE COURSE OF SEARCH UPON THE ASSESSEE ANDTHEREFORE DELETED TH E ADDITIONS MADE U/S 68 OF THE ACT BY THE AO. THE RELEVANT FINDINGS OF THE TRIBUNAL AR E AS FOLLOWS: IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 16 | P A GE 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND IT WOULD BE NECESSARY TO ADDRESS THE PRELIMINARY ISSUE OF WHETHER THE ADDITI ON COULD BE FRAMED U/S 153A OF THE ACT IN RESPECT OF A CONCLUDED PROCEEDING WITHOU T THE EXISTENCE OF ANY INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEAR CH. AT THE OUTSET, IT IS EVIDENT FROM THE CATEGORICAL FINDINGS OF THE LD CITA THAT T HERE IS ABSOLUTELY NO INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH REGARDING THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED BY THE ASSESSEE COMPANY DURING THE YEAR UNDER APPEAL EXCEPT THE FACT THAT THE MODUS OPERAND I OF RAISING OF SUCH CAPITAL WAS DISCOVERED IN THE SEARCH ACTION. WE FIND THAT T HE LD CITA WAS ONLY HARPING ON THE ADMISSION MADE BY CERTAIN PARTIES AT THE TIME O F SEARCH WITHOUT CORROBORATING THE SAME WITH MATERIAL EVIDENCES FOUND DURING THE C OURSE OF SEARCH. IN THIS REGARD, THE INSTRUCTIONS ISSUED BY THE CENTRAL BOAR D OF DIRECT TAXES (CBDT IN SHORT) IN F.NO.286/2/2003-IT(INV) DATED 10.3.2003 W OULD BE RELEVANT TO BE LOOKED INTO WHEREIN IT IS MENTIONED THAT WHILE RECORDING S TATEMENT DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS, NO ATTEMP T SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. FOR THE SA KE OF CONVENIENCE AND CLARITY, THE RELEVANT INSTRUCTIONS DATED 10.3.2003 ISSUED BY CBDT IS REPRODUCED HEREUNDER:- TO ALL CHIEF COMMISSIONERS OF INCOME TAX (CADRE CON TRA) & ALL DIRECTORS GENERAL OF INCOME TAX INV. SIR, SUB:- CONFESSION OF ADDITIONAL INCOME DURING T HE COURSE OF SEARCH & SEIZUREAND SURVEY OPERATION - REGARDING INSTANCES H AVE COME TO THE NOTICE OF THE BOARD WHERE ASSESSEES HAVE CLAIMED THAT THEY HAVE B EEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CRE DIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING R ETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH& SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON' COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOTLIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATI ONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED D URING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDERS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 17 | P A GE YOURS FAITHFULLY, SD/- (S. R. MAHAPATRA] UNDER SECRETARY (INV. II) WE FIND THAT THERE IS ABSOLUTELY NO CORROBORATIVE E VIDENCE FOUND IN THE COURSE OF SEARCH BY THE SEARCH TEAM OR MATERIAL EVIDENCE BROU GHT ON RECORD BY THE LD AO OR BY THE LD CITA IN ORDER TO GIVE CREDENCE TO THE STA TEMENT RECORDED DURING SEARCH. HENCE WE HOLD THAT NO ADDITION COULD BE MADE MERELY BY PLACING RELIANCE ON THE STATEMENT RECORDED DURING SEARCH. 34. FOLLOWING THE JUDICIAL VIEW ENDORSED BY THE COO RDINATE BENCHES OF THIS TRIBUNAL, WE THEREFORE HOLD THAT THE THIRD PARTY ST ATEMENTS REFERRED BY THE AO TO JUSTIFY ADDITIONS OF RS.41,88,50,000/- [ 39,73,50,0 00 + 2,15,00,000] & RS.3,45,89,682/- [3,20,13,463 + 25,76,219] MADE U/S 68 & 69C OF THE ACT BOTH IN THE CASE OF IQCIPL AND THE APPELLANT DID NOT CONSTITUTE INCRIMINATING MATERIAL UNEARTHED IN THE COURSE OF SEARCH CONDUCTED UPON TH E APPELLANT AND IN THAT VIEW OF THE MATTER THE AFORESAID ADDITIONS MADE BY THE AO W ERE UNSUSTAINABLE IN LAW AND ON FACTS. 11. FOR AFORESAID REASONS CITED IN ASSESSEES SISTE R CONCERN BY US, ALSO APPLIES MUTATIS-MUTATIS IN ASSESSEES CASE, SO WE HOLD THAT SUCH THIRD PARTY STATEMENTS COULD NOT BE SAID TO CONSTITUTE INCRIMINATING MATERIAL F OUND IN THE COURSE OF SEARCH UPON THE ASSESSEE. COMING TO THE NEXT INCRIMINATING MATERIA L AS PER LD CIT(A), WE NOTE THAT THE LD. CIT(A) HAS REFERRED TO THE POST SEARCH INVE STIGATION CONDUCTED BY THE INVESTIGATING AUTHORITIES AND THEIR APPRAISAL REPOR T, WHICH ACCORDING TO HIM ALSO CONSTITUTED INCRIMINATING MATERIAL TO AID THE IMP UGNED ADDITION. THE LD. CIT(A) OBSERVED THAT IN THE SAID REPORTS IT WAS STATED THA T THE INSPECTOR DEPUTED TO VERIFY THE EXISTENCE OF THE LOAN CREDITORS DID NOT FIND MOST O F THEM. THE LD. COUNSEL OF THE APPELLANT HOWEVER POINTED OUT THAT THE LD. CIT(A) N EVER BROUGHT ON RECORD THE SAID APPRAISAL REPORT AND WONDERED AS TO HOW HE CAN SAY AND INTRODUCE IT AS INCRIMINATING EVIDENCE AND HENCE HIS REFERENCE TO THE SAME WAS IM PERMISSIBLE. HE FURTHER CONTENDED THAT THE LD. CIT(A) HAD TRIED TO MAKE OUT A NEW CASE AND INTRODUCE NEW EVIDENCE, WHICH WAS NEVER UTILIZED BY THE AO TO JUS TIFY THE IMPUGNED ADDITION. INVITING OUR ATTENTION TO THE SHOW CAUSE ISSUED IN THE CASE OF SISTER CONCERN, M/S MANI SQUARE LTD [PAGES 321 TO 413 OF PAPER-BOOK] WHERE T HESE REPORTS HAD BEEN SELECTIVELY EXTRACTED, THE LD. AR POINTED OUT THAT THERE WAS NO THING CONTAINED IN THESE REPORTS, IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 18 | P A GE WHICH COULD BE SAID TO CONSTITUTE INCRIMINATING MAT ERIAL FOUND IN THE COURSE OF SEARCH QUA THE APPELLANT. AFTER CAREFULLY ANALYZING THESE FACTS, WE FIND SUBSTANCE IN THE APPELLANTS PRIMARY CONTENTION THAT THE APPRAISAL R EPORT WAS NEVER BROUGHT ON RECORD AND ADMITTED AS INCRIMINATING EVIDENCE BY THE AO AN D THEREFORE THE LD. CIT(A)S RELIANCE ON SUCH REPORT AND TERMING IT AS INCRIMIN ATING MATERIAL WAS UNJUSTIFIABLE AND UNTENABLE IN LAW, UNLESS THE LD CIT(A) GIVES COPY O F APPRAISAL REPORT OR THE RELEVANT EXTRACT WHICH HE USED TO DRAW INFERENCE THAT IT WAS OF INCRIMINATING NATURE AGAINST ASSESSEE QUA THESE AYS. WE ARE OF THE OPINION THAT LD CIT(A) SHOULD NOT HAVE KEPT THE ASSESSEE IN THE DARK ABOUT THE CONTENTS OF THE APPRAISAL REPORT WHICH HE RELIED TO TERM IT AS INCRIMINATING MATERIAL. MOREOVER THE APP RAISAL REPORT PREPARED BY THE DDIT(INV) ARE THE VIEWS/FINDINGS OF THOSE OFFICIAL S BASED ON THE POST-SEARCH INVESTIGATIONS AND HENCE, SUCH REPORT COULD NOT BE SAID TO CONSTITUTE INCRIMINATING MATERIAL UNEARTHED IN THE COURSE OF SEARCH. WE ALS O FIND SUBSTANCE IN THE LD. ARS ARGUMENT THAT HAD THE CONTENTS OF THE APPRAISAL REP ORT INCRIMINATED THE APPELLANT ASSESSEE IN ANY MANNER, THE AO WOULD HAVE REFERRED TO IT LIKE HE DID IN THE CASE OF ASSESSEES SISTER CONCERNS CASE OF M/S MANI SQUARE LTD. WE, WHILE DECIDING THE CASE OF M/S MANI SQUARE LTD. AFTER HAVING PERUSED THE CO NTENTS OF THE SHOW CAUSE ISSUED IN THAT CASE WHERE THE CONTENTS OF THE APPRAISAL REPOR T HAD BEEN SELECTIVELY EXTRACTED BY THE AO, WE DID NOT FIND ANYTHING CONTAINED THEREIN WHICH COULD BE SAID TO CONSTITUTE INCRIMINATING MATERIAL QUA THAT ASSESSEE [M/S MAN I SQUARE LTD.] AND FOUND THAT IT CANNOT BE CONSIDERED AS A BASIS FOR MAKING ANY ADDI TION. FURTHER ACCORDING TO US, THE LD CIT(A) ERRED IN TERMING CERTAIN PORTION OF APPRA ISAL REPORT AS INCRIMINATING MATERIAL WITHOUT BRINGING IT ON RECORD OR WITHOUT F URNISHING THE RELEVANT EXTRACTS, CANNOT BE COUNTENANCED. THE LD. CIT(A) TOOK NOTE OF THE INSPECTOR REPORT MENTIONED IN THE APPRAISAL REPORT THAT NUMBER OF LENDERS COUL D NOT BE FOUND IN THE ADDRESS, SO HE DREW ADVERSE INFERENCE AGAINST THE LENDERS, WHICH A CTION OF LD CIT(A) CANNOT BE ACCEPTED FOR THE FOLLOWING REASON;- 1) IF THE LD. C IT(A) HAD SUSPECTED THE GENUINITY OF ANY LENDER BASED ON THE INSPECTORS REPORT (MENTION ED IN APPRAISAL REPORT) THEN HE SHOULD HAVE IN ALL FAIRNESS CONFRONTED THE ASSESSEE AND SHOULD HAVE FOUND OUT THE TRUTH. 2) IT IS NOT THAT LENDERS OR ANY PERSON CANN OT CHANGE THEIR ADDRESS . AND JUST IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 19 | P A GE BECAUSE A PERSON CHANGES THE ADDRESS, DOES NOT MEAN THAT HIS/ ITS IDENTITY IS LOST. IN SUCH A CASE, IT IS A REASON TO SUSPECT AND CAN BE T HE STARTING POINT OF INVESTIGATION, WHICH THE LD. CIT(A) WHO ENJOYS CO-TERMINUS POWER A S THAT OF ASSESSING OFFICER COULD HAVE EXERCISED, WHICH HE DID NOT BOTHER TO DO . SO, THE APPRAISAL REPORT CANNOT BE TERMED AS INCRIMINATING MATERIAL QUA THE ASSESSEE. FOR THE REASONS AFORESAID, AND TAKING NOTE THAT THE AO NEVER UTILIZED THE SAME AS INCRIMINATING MATERIAL FOR THE PURPOSE OF MAKING ADDITIONS U/S 68 & 69C OF THE ACT , THE OBSERVATION OF LD CIT(A) IN RESPECT OF CONTENTS OF APPRAISAL REPORT CANNOT BE T ERMED AS INCRIMINATING MATERIAL AND LD CIT(A) ERRED IN TERMING IT AS INCRIMINATING MATERIAL. 12. THE LD. CIT(A) HAS FURTHER REFERRED TO THE STAT EMENTS OF THE KEY PERSON OF THE MANI GROUP, MR. SANJAY JHUNJHUNWALA AND THE DECLARA TIONS GIVEN BY HIS EMPLOYEES IN THE COURSE OF SEARCH AS INCRIMINATING MATERIAL . THE ORDER OF THE LD. CIT(A) IS HOWEVER CONSPICUOUSLY SILENT WITH REGARD TO THE CON TENTS OF THESE STATEMENTS RECORDED BY THE INVESTIGATING AUTHORITY AND AS TO WHAT INCRI MINATING MATERIAL WAS CONTAINED THEREIN. THE LD. COUNSEL FOR THE ASSESSEE POINTED O UT THAT NEITHER DID MR. SANJAY JHUNJHUNWALA NOR HIS EMPLOYEES HAD EITHER ADMITTED IN THEIR STATEMENTS THAT THE UNSECURED LOANS RECEIVED BY THE APPELLANT WAS IN TH E NATURE OF ACCOMMODATION ENTRIES OR THAT THE LOAN CREDITORS HAD ISSUED CHEQUES IN LI EU OF CASH RECEIVED FROM THE APPELLANT. WE NOTE THAT THERE WAS IN FACT NOTHING C ONTAINED IN THEIR STATEMENTS WHICH COULD EVEN REMOTELY BE CONSTRUED AS INCRIMINATING TO AID THE ADDITIONS MADE BY THE AO U/S 68 & 69C OF THE ACT. WE THUS FIND THAT THE L D. CIT(A) HAD FACTUALLY ERRED IN REFERRING TO THE STATEMENTS OF MR. SANJAY JHUNJHUNW ALA AND THE EMPLOYEES OF MANI GROUP AS INCRIMINATING MATERIAL TO JUSTIFY THE IM PUGNED ADDITIONS. 13. FURTHER ACCORDING TO LD. CIT(A), IF ON ACCOUNT OF SEARCH, THE ENTRIES APPEARING IN THE REGULAR BOOKS OF THE ASSESSEE OR WHICH HAS B EEN ACCEPTED IN EARLIER ASSESSMENTS BASED ON DOCUMENTS SUBMITTED AT THAT POINT OF TIME ARE NOW FOUND TO BE CAMOUFLAGED BY THE AO UPON CONDUCTING FURTHER INVESTIGATION IN THE COURSE OF PROCEEDINGS U/S 153A OF THE ACT, THEN THE RESULTS OF SUCH INVESTIGA TION CONDUCTED IN THE COURSE OF IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 20 | P A GE ASSESSMENT THAT ARE NOW COMING TO THE FORE WOULD CO NSTITUTE INCRIMINATING MATERIAL. ACCORDING TO LD. CIT(A), THE NON-SERVICE OF SUMMONS U/S 131 THREW FRESH LIGHT ON THE ENTRIES APPEARING THE BOOKS OF ACCOUNTS WHICH WAS T HEN LINKED BY THE AO TO THE POOR FINANCIAL DATA OF LOAN CREDITORS, WHICH FURTHER LED TO THE IMPUGNED ADDITIONS. THUS, ACCORDING TO THE LD. CIT(A) SUCH DETAILED INVESTIGA TION CONDUCTED BY THE AO IN THE COURSE OF ASSESSMENT WAS NOTHING BUT INCRIMINATING MATERIAL. WE HOWEVER DO NOT FIND ANY MERIT IN THESE FINDINGS RECORDED BY THE LD. CIT (A). BY LD. CIT(A)S OWN ADMISSION, THESE LOAN ENTRIES FORMED PART OF THE RE GULAR BOOKS OF THE ASSESSEE AND THEREFORE BY NO STRETCH OF IMAGINATION THE ENTRIES IN THE REGULAR BOOKS OF ACCOUNTS, WHICH WAS TRULY AND FULLY DISCLOSED AT THE TIME OF ORIGINAL ASSESSMENT AS WELL, CAN BE CONSTRUED TO BE INCRIMINATING MATERIAL UNEARTHED I N THE COURSE OF SEARCH IN NATURE. IT WAS BROUGHT TO OUR ATTENTION THAT COMPLETE DETAILS OF THE UNSECURED LOANS WERE DISCLOSED IN THE TAX AUDIT REPORT FURNISHED ALONG W ITH THE RETURN OF INCOME AND THE SCRUTINY ASSESSMENTS FOR AYS 2011-12 TO 2013-14 WER E ALSO COMPLETED U/S 143(3) OF THE ACT IN WHICH NO ADVERSE INFERENCE WAS DRAWN BY THE AO IN RELATION TO THESE LOANS. THE FACTS ON RECORD THUS DEMONSTRATE THAT THE REVEN UE WAS AWARE OF THE UNSECURED LOANS RAISED BY THE APPELLANT IN THE COURSE OF ORIG INAL ASSESSMENT AND ALL MATERIAL FACTS IN RELATION THERETO WERE AVAILABLE ON RECORD PRIOR TO THE SEARCH. THE SUBSEQUENT ENQUIRIES U/S 131 OF THE ACT CONDUCTED BY THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT COULD NOT BE SAID T O BE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH UPON THE ASSESSEE. MOREOVE R IN PARAS 16 TO 22 (INFRA), WE HAVE DISCUSSED AND HELD THAT THE NON-SERVICE OF SUMMONS WAS NOT A DECISIVE FACTOR IN THE PRESENT CASE, AS THE ASSESSEE HAD BROUGHT ON RECORD SUFFICIENT EVIDENCES TO SUBSTANTIATE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF T HE LOAN CREDITORS. IN OUR OPINION IN THE FACTS OF THE PRESENT CASE IN HAND, THEREFORE, T HE FURTHER INVESTIGATION CONDUCTED BY THE AO IN THE PROCEEDINGS U/S 153A OF SUCH UNABATED ASSESSMENTS TO MAKE THE IMPUGNED ADDITIONS, WAS NOTHING BUT A DIFFERENT OPI NION FORMED BY THE AO ON THE SAME SET OF FACTS WHICH WERE ALREADY AVAILABLE ON R ECORD AND IT DID NOT CONSTITUTE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEAR CH UPON THE ASSESSEE. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 21 | P A GE 14. FOR THE REASONS DISCUSSED IN THE PRECEDING PARA GRAPHS, WE HOLD THAT THE MATERIAL REFERRED TO BY THE LOWER AUTHORITIES FOR J USTIFYING THE ADDITIONS MADE IN THE UNABATED ASSESSMENTS FOR AYS 2011-12 TO 2013-14 DID NOT CONSTITUTE INCRIMINATING MATERIAL AND THEREFORE NO ADDITIONS WERE LEGALLY PE RMISSIBLE IN THE ASSESSMENTS FRAMED U/S 153A FOR THE AYS 2011-12 TO 2013-14 FOR WHICH T HE ASSESSMENTS DID NOT ABATE WHEN THE SEARCH WAS CONDUCTED ON 22-06-2016. GROUND NOS. 1 & 2OF THE ASSESSEES APPEAL FOR AYS 2011-12 TO 2013-14 THEREFORE STAND A LLOWED. 15. NOW COMING TO THE MERITS OF THE ADDITIONS MADE U/S 68 & 69C IN AYS 2011-12 TO 2014-15, 2016-17 & 2017-18, WE FIRST DEEM IT FIT TO SET OUT THE DETAILS OF THE LOAN CREDITORS, WHOSE PRINCIPAL SUM AND INTEREST WAS ADD ED BY THE AO U/S 68 & 69C OF THE ACT IN ALL THESE YEARS. SL NO. NAME OF LOAN CREDITOR LOAN INTEREST 1 ARADHANA PLAZA PVT LTD 75,00,000 6,29,420 2 SHITAL PLAZA PVT LTD 26,00,000 4,32,000 3 HIMADRI ENCLAVE PVT LTD 2,27,50,000 53,65,374 4 JAMUNA ENCLAVE PVT LTD 79,50,000 5,46,077 5 KASTURI HOME PVT LTD 1,74,50,000 39,02,181 6 MARIGOLD NIRMAN PVT LTD 1,19,00,000 8,76,569 7 DAMODAR NIKETAN PVT LTD 1,25,50,000 30,59,051 8 LAVANYA NIRMAN PVT LTD 75,00,000 10,27,377 9 SREEDEV COMPUTERS PVT LTD - 2,03,780 10 TISTA NIRMAN PVT LTD 98,50,000 21,17,205 11 NISHU LEASING & FINANCE LTD 1,75,00,000 18,49,560 12 PRAGYA COMMODITIES PVT LTD 20,77,490 62,39,572 13 SAMRAT FINVESTORS PVT LTD 2,00,00,000 35,48,644 14 VICKY FINCON PVT LTD 1,00,00,000 26,88,748 15 SHARMA HIRE PURCHASE LTD - 1,33,115 TOTAL 14,96,27,490 3,26,18,673 16. FROM THE MATERIAL ON RECORD, IT IS NOTED THAT T HE APPELLANT HAD FURNISHED NAME, COMPLETE ADDRESS, PAN DETAILS, ACCOUNT CONFIRMATION , AUDITED FINANCIAL STATEMENTS AND MCA DETAILS OF ALL THE LENDERS. ALL THE LOANS WERE TRANSACTED THROUGH BANK ACCOUNTS OF THE CREDITORS. EACH OF THE LOAN CREDITOR WAS REGULA RLY ASSESSED TO INCOME-TAX. THE FINANCIAL STATEMENTS OF EACH LOAN CREDITOR REVEALED THAT THE TRANSACTION WITH THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 22 | P A GE APPELLANT WAS REFLECTED THEREIN. THE APPELLANT HAD PAID INTEREST TO EACH LOAN CREDITOR AFTER DEDUCTION OF TAX U/S 194A OF THE ACT. THE APP ELLANT HAD ALSO COMPLIED WITH PROVISIONS CONCERNING FILING OF TDS RETURNS. FROM T HE ORDERS OF THE LOWER AUTHORITIES, IT IS NOTED THAT THE AO MADE ENQUIRIES FROM TWENTY- TWO (22) LOAN CREDITORS FROM WHOM THE APPELLANT HAD RAISED UNSECURED LOANS IN DI FFERENT YEARS. ACCORDING TO AO SUMMONS WERE SERVED ON (7) SEVEN PARTIES AND THE SU MMONS ON FIFTEEN (15) PARTIES REMAINED UN-SERVED [MENTIONED IN TABLE ABOVE] AGAIN ST WHICH ADVERSE INFERENCE WAS DRAWN. AT THE OUTSET, THE LD. COUNSEL FOR THE APPEL LANT INVITED OUR ATTENTION TO THE DETAILS OF THE ADDRESSES OF THE FIFTEEN (15) LOAN C REDITORS SET OUT IN THE ASSESSMENT ORDER AND THE ADDRESSES OF THEIR REGISTERED OFFICES AS AVAILABLE IN THE MCA RECORDS. THE LD. COUNSEL POINTED OUT TO US THAT THE AO HAD I SSUED NOTICES TO TWELVE (12) PARTIES ON THE WRONG ADDRESSES, WHICH FACT WAS BROUGHT TO THE NOTICE OF LD. CIT(A), STILL NO ACTION WAS TAKEN AT THE END OF LD. CIT(A) TO FAIRLY CROSS-CHECK THE VERACITY OF THIS FACT, THEREFORE NON-SERVICE OF SUMMONS COULD NOT BE VIEWE D ADVERSELY AGAINST THESE TWELVE LENDERS WHOSE ADDRESS HAS CHANGED AND THAT CANNOT B E A GROUND TO ADVERSELY VIEW AGAINST THESE LENDERS WHO ARE REGULAR TAX PAYERS WH ICH WE WILL DISCUSS IN DETAIL INFRA. AS REGARDS THE REMAINING THREE (3) PARTIES TO WHOM NOTICES REMAINED UN-SERVED, IT WAS URGED THAT WHERE THE ASSESSEE HAD BROUGHT ON RECORD SUFFICIENT EVIDENCES TO SUBSTANTIATE THE IDENTITY, GENUINENESS AND CREDITWO RTHINESS OF THE PARTIES AND THEY ARE ALL TAX PAYERS AND IT IS LIKE KEEPING YOUR EYES CLO SED AND SAY IT IS DARK. SO WHEN ALL THE LENDERS ARE AMENABLE TO TAX JURISDICTION OF THE DEP ARTMENT AND THEIR IDENTITIES AND TRANSACTIONS ARE ALL THROUGH BANKING CHANNEL AND TD S IS DEDUCTED ON INTEREST PAYMENTS, AND ALL DOCUMENTS SOUGHT BY THE ASSESSING OFFICER WAS PRODUCED BY THE ASSESSEE, THE ASSESSEE HAS DISCHARGED ITS ONUS , NO ADDITION WAS PERMISSIBLE U/S 68 & 69C ON THE SOLE PREMISE THAT THE SUMMONS REMAINED U N-SERVED. 17. MOREOVER, IT IS NOTED THAT NOWHERE DOES SECTIO N 68 OF THE ACT PRESCRIBES THAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTION SHOULD BE PROVED BY AN ASSESSEE ONLY BY PRODUCING CONCERNED CREDITORS F OR PERSONAL EXAMINATION BY THE AO. IN THE FACTS OF THE INSTANT CASE, THE APPELLANT HAD FURNISHED THE REQUISITE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 23 | P A GE DOCUMENTARY EVIDENCES; TO SUBSTANTIATE THEIR IDENTI TY & CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. HAVING RECEIVED THESE DOCUMENTS THE AO WAS NOT ABLE TO POINT OUT AS TO WHICH OTHER DOCUMENTARY PROOF WAS R EQUIRED OR EXPECTED BY HIM AND WHICH HAD NOT BEEN SUBMITTED BY THE APPELLANT. IN T HE TRANSACTIONS UNDER ENQUIRY THE APPELLANT HAD DEBTOR-CREDITOR RELATIONSHIP WITH THE PARTIES AND THE APPELLANT WAS A DEBTOR. IT IS COMMON KNOWLEDGE THAT RELATIONSHIP BE TWEEN THE DEBTOR AND CREDITOR, THE DEBTOR ALWAYS OPERATES FROM THE POSITION OF WEAKNES S. THE LOAN CREDITOR BECAUSE OF HIS SUPERIOR FINANCIAL STRENGTH AND STATUS DICTATES THE TERMS OF TRANSACTION. MOREOVER ONCE THE LOAN ALONG WITH INTEREST IS RE-PAID, THE B ORROWER IS NOT EXPECTED TO MAINTAIN CONTINUED RELATIONSHIP WITH THE LOAN CREDITOR. IN T HE CIRCUMSTANCES IT IS NOT LOGICAL TO EXPECT THE BORROWER TO ENFORCE COMPLIANCE WITH THE SUMMONS ISSUED BY THE DEPARTMENT BY THE LENDERS OR BE INFORMED ABOUT THE WHEREABOUTS OF THE CREDITOR. IT IS A CASE OF TWO UNRELATED PARTIES I.E. LENDER AND BORRO WER, BROUGHT TOGETHER BY A FINANCE BROKER, AND THE LOANS WERE GIVEN AND THEREAFTER REP AID ALONG WITH INTEREST. ACCORDINGLY WHEN THERE WAS NO CONTINUING RELATIONSH IP WITH THE LOAN CREDITORS, THENPOST THE CONCLUSION OF SUCH LOAN TRANSACTIONS A ND APPLYING THE TESTS OF HUMAN PROBABILITIES, THE NON-SERVICE OF SUMMONS BY THE LO AN CREDITORS COULD NOT BE VIEWED ADVERSELY BY THE AO. ON THESE FACTS AND IN OUR CONS IDERED VIEW THEREFORE THE ADVERSE INFERENCE DRAWN BY THE AO U/S 68 AND 69C OF THE ACT SOLELY ON THE PREMISE THAT THE SUMMONS WENT UN-SERVED WAS NOT SUSTAINABLE IN THE E YES OF LAW, PARTICULARLY WHEN THE APPELLANT HAD FURNISHED ALL THE RELEVANT DOCUMENTS WHICH IT WAS REQUIRED TO MAINTAIN IN ORDINARY COURSE TO SUBSTANTIATE ITS LOAN TRANSAC TIONS WITH INDEPENDENT THIRD PARTY LOAN PROVIDERS. 18. AT THIS JUNCTURE, WE MAY GAINFULLY REFER TO THE OBSERVATIONS MADE BY THE HONBLE APEX COURT IN THE CASE OF CIT VS ORISSA COP RN (P.) LTD REPORTED IN 159 ITR 78, WHICH ARE REPRODUCED HEREUNDER AS FOLLOWS: IN THIS CASE THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE T HAT THE SAID CREDITORS WERE THE INCOME-TAX ASSESSEES. THEIR INDEX NUMBER WAS IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER SECTION 1 31 AT THE INSTANCE OF THE ASSESSEE, DID NOT PURSUE THE MATTER FURTHER. THE RE VENUE DID NOT EXAMINE THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 24 | P A GE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO F IND OUT WHETHER THEY WERE CREDIT-WORTHY OR WERE SUCH WHO COULD ADVANCE THE AL LEGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITO RS. IN THOSE CIRCUMSTANCES, THE ASSESSEE COULD NOT DO ANY FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAD DISCHARGED THE BUR DEN THAT LAY ON HIM, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREAS ONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH COULD ARISE. 19. IN THE CASE OF NEMI CHAND KOTHARI 136 TAXMAN 21 3, THE HON'BLEGUAHATI HIGH COURT HAS THROWN LIGHT ON ANOTHER ASPECT TOUCHING T HE ISSUE OF ONUS ON ASSESSEE UNDER SECTION 68, BY HOLDING THAT THE SAME SHOULD BE DECI DED BY TAKING INTO CONSIDERATION THE PROVISION OF SECTION 106 OF THE EVIDENCE ACT WH ICH SAYS THAT A PERSON CAN BE REQUIRED TO PROVE ONLY SUCH FACTS WHICH ARE IN HIS KNOWLEDGE. THE HON'BLE COURT IN THE SAID CASE HELD THAT, ONCE IT IS FOUND THAT AN A SSESSEE HAS ACTUALLY TAKEN MONEY FROM DEPOSITOR/LENDER WHO HAS BEEN FULLY IDENTIFIED, THE ASSESSEE/BORROWER CANNOT BE CALLED UPON TO EXPLAIN, MUCH LESS PROVE THE AFFAIRS OF SUC H THIRD PARTY, WHICH HE IS NOT EVEN SUPPOSED TO KNOW OR ABOUT WHICH HE CANNOT BE HELD T O BE ACCREDITED WITH ANY KNOWLEDGE. IN THIS VIEW, THE HON'BLE COURT HAS LAID DOWN THAT SECTION 68 OF INCOME- TAX ACT, SHOULD BE READ ALONG WITH SECTION 106 OF E VIDENCE ACT. THE RELEVANT OBSERVATIONS AT PAGE 260 TO 262, 264 AND 265 OF THE REPORT ARE REPRODUCED HEREIN BELOW:- 'WHILE INTERPRETING THE MEANING AND SCOPE OF SECTIO N 68, ONE HAS TO BEAR IN MIND THAT NORMALLY, INTERPRETATION OF A STATUTE SHALL BE GENERAL, IN NATURE, SUBJECT ONLY TO SUCH EXCEPTIONS AS MAY BE LOGICALLY PERMITTED BY THE STATUTE ITSELF OR BY SOME OTHER LAW CONNECTED THEREWITH OR RELEVANT THERETO. KEEPING IN VIEW THESE FUNDAMENTALS OF INTERPRETATION OF STATUTES, WHEN WE READ CAREFULLY THE PROVISIONS OF SECTION 68, WE NOTICE NOTHING IN SECTION 68 TO S HOW THAT THE SCOPE OF THE INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL RE MAIN CONFINED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE AS SESSEE AND THE CREDITOR NOR DOES THE WORDING OF SECTION 68 INDICATE THAT SECTIO N 68 DOES NOT AUTHORIZE THE REVENUE DEPARTMENT TO MAKE INQUIRY INTO THE SOURCE( S) OF THE CREDIT AND/OR SUB- CREDITOR. THE LANGUAGE EMPLOYED BY SECTION 68 CANNO T BE READ TO IMPOSE SUCH LIMITATIONS ON THE POWERS OF THE ASSESSING OFFICER. THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE, AND WE HOLD THAT AN INQUIRY U NDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASSESSING OFFIC ER WITHIN THE TRANSACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDI TOR, BUT THAT THE SAME MAY BE EXTENDED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLAC E BETWEEN THE CREDITOR AND HIS SUB-CREDITOR. THUS, WHILE THE ASSESSING OFFICER IS UNDER SECTION 68, FREE TO LOOK INTO THE SOURCE(S) OF THE CREDITOR AND/OR OF THE SU B-CREDITOR, THE BURDEN ON THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 25 | P A GE ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED. TH IS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE EVIDENCE ACT WHICH READS AS FOLL OWS: 'BURDEN OF PROVING FACT ESPECIALLY WITHIN KNOWLEDGE.-WHEN ANY FACT IS ESPEC IALLY WITHIN THE KNOWLEDGE OF ANY PERSON, THE BURDEN) OF PROVING THAT FACT IS UPO N HIM. ' ******** WHAT, THUS, TRANSPIRES FROM THE ABOVE DISCUSSION IS THAT WHITE SECTION 106 OF THE EVIDENCE ACT LIMITS THE ONUS OF THE ASSESSEE TO THE EXTENT OF HIS PROVING THE SOURCE FROM WHICH HE HAS RECEIVED THE CASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQUIRY NOT ONLY INTO THE SOURCE(S)OF THE CREDITOR BUT ALSO OF HIS (CREDITOR'S) SUB-CREDITORS AND PROVE, A S A RESULT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESSEE, IN THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITORS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTHER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUIRE INTO THE SOURCE/SOURCE FROM WHERE THE CR EDITOR HAS RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE O NLY THE SOURCE(S) FROM WHERE HE HAS HIMSELF RECEIVED THE CREDIT AND IT IS NOT TH E BURDEN OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THESOURCE(S) OF THE S UB-CREDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN, THE INTERPRETATION OF SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN THE INTERPRETATION OF SECTION 68 HAS TO BE IN SUCH A WAY THAT IT DOES NOT MAKE SECTION 106 REDUNDANT. HENCE, THE HARMONIOUS CONSTRUCTION OF SECTION 106 O F THE EVIDENCE ACT AND SECTION 68 OF THE INCOME- TAX ACT WILL BE THAT THOU GH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSESSEE MUST ESTABLI SH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF HIS CREDITOR, THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIO NS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFIN ED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDI TOR. WHAT FOLLOWS, AS A COROLLARY, IS THAT IT IS NOT THE BURDEN OF THE ASSE SSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND SUB-CREDI TORS NOR IS IT THE BURDEN OF THE ASSESSEE TO PROVE THAT THE SUB- CREDITOR HAD THE CR EDITWORTHINESS TO ADVANCE THE CASH CREDIT TO THE CREDITOR FROM WHOM THE CASH CRED IT HAS BEEN. EVENTUALLY, RECEIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LO GICALLY FOLLOWS THAT THE CREDITOR'S CREDITWORTHINESS HAS TO BE JUDGED VIS-A-VIS THE TRA NSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CRE DITOR OR OF THE GENUINENESS OF THE TRANSACTIONS, WHICH TOOK BETWEEN THE CREDITOR A ND SUB-CREDITOR AND/OR CREDITWORTHINESS OF THE SUB- CREDITORS, FOR, THESE ASPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. ' ********** ' ... IF A CREDITOR HAS, BY ANY UNDISCLOSED SOURCE, A PARTICULAR AMOUNT OF MONEY IN THE BANK, THERE IS NO LIMITATION UNDER THE LAW ON T HE PART OF THE ASSESSEE TO OBTAIN SUCH AMOUNT OF MONEY OR PART THEREOF FROM THE CREDI TOR, BY WAY OF CHEQUE IN THE FORM OF LOAN AND IN SUCH A CASE, IF THE CREDITOR FA ILS TO SATISFY AS TO HOW HE HAD ACTUALLY RECEIVED THE SAID AMOUNT AND HAPPENED TO K EEP THE SAME IN THE BANK, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSE SSEE FROM UNDISCLOSED SOURCE. IN OTHER WORDS, THE GENUINENESS AS WELL AS THE CRED ITWORTHINESS OF A CREDITOR HAVE TO BE ADJUDGED VIS-A-VIS THE TRANSACTIONS, WHICH HE HAS WITH THE ASSESSEE. THE REASON WHY WE HAVE FORMED THE OPINION THAT IT IS NO T THE BUSINESS OF THE ASSESSEE TO FIND OUT THE ACTUAL SOURCE OR SOURCES FROM WHERE THE CREDITOR HAS ACCUMULATED THE AMOUNT, WHICH HE ADVANCES, AS LOAN, TO THE ASSE SSEE IS THAT SO FAR AS AN IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 26 | P A GE ASSESSEE IS CONCERNED, HE HAS TO PROVE THE GENUINEN ESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR VIS-A-VIS THE TRAN SACTIONS WHICH HAD TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR AND NOT BETWE EN THE CREDITOR AND THE SUB- CREDITORS, FOR, IT IS NOT EVEN REQUIRED UNDER THE L AW FOR THE ASSESSEE TO TRY TO FIND OUT AS TO WHAT SOURCES FROM WHERE THE CREDITOR HAD RECEIVED THE AMOUNT, HIS SPECIAL KNOWLEDGE UNDER SECTION 106 OF THE EVIDENCE ACT MAY VERY WELL REMAIN CONFINED ONLY TO THE TRANSACTIONS, WHICH HE HAD' WI TH THE CREDITOR AND HE MAY NOT KNOW WHAT TRANSACTION(S) HAD TAKEN PLACE BETWEEN HI S CREDITOR AND THE SUB- CREDITOR... ' 'IN OTHER WORDS, THOUGH UNDER SECTION 68 AN ASSESSI NG OFFICER IS FREE TO SHOW, WITH THE HELP OF THE INQUIRY CONDUCTED BY HIM INTO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDIT OR, THAT THE TRANSACTION BETWEEN THE TWO WERE NOT GENUINE AND THAT THE SUB-C REDITOR HAD NO CREDITWORTHINESS, IT WILL NOT NECESSARILY MEAN THAT THE LOAN ADVANCED BY THE SUB- CREDITOR TO THE CREDITOR WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE UNLESS THERE IS EVIDENCE, DIRECT OR CIRCUMSTANTIAL, TO SHOW THAT THE AMOUNT WHICH HAS BEEN ADVANCED BY THE SUB-CREDITOR TO THE CREDIT OR, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEE ....' ******* *** 'KEEPING IN VIEW THE ABOVE POSITION OF LAW, WHEN WE TURN TO THE FACTUAL MATRIX OF THE PRESENT CASE, WE FIND THAT SO FAR AS THE APPELL ANT IS CONCERNED, HE HAS ESTABLISHED THE IDENTITY OF THE CREDITORS, NAMELY, NEMICHANDNAHATA AND SONS (HUF) AND PAWAN KUMAR AGARWALLA. THE APPELLANT HAD ALSO SHOWN, IN ACCORDANCE WITH THE BURDEN, WHICH RESTED ON HIM UND ER SECTION 106 OF THE EVIDENCE ACT, THAT THE SAID AMOUNTS HAD BEEN RECEIV ED BY HIM BY WAY OF CHEQUES FROM THE CREDITORS AFOREMENTIONED. IN FACT THE FACT THAT THE ASSESSEE HAD RECEIVED THE SAID AMOUNTS BY WAY OF CHEQUES WAS NOT IN DISPU TE. ONCE THE ASSESSEE HAD ESTABLISHED THAT HE HAD RECEIVED THE SAID AMOUNTS F ROM THE CREDITORS AFOREMENTIONED BY WAY OF CHEQUES, THE ASSESSEE MUST BE TAKEN TO HAVE PROVED THAT THE CREDITOR HAD THE CREDITWORTHINESS TO ADVAN CE THE LOANS. THEREAFTER THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROV E THE CONTRARY. ON MERE FAILURE ON THE PART OF THE CREDITORS TO SHOW THAT THEIR SUB -CREDITORS HAD CREDITWORTHINESS TO ADVANCE THE SAID LOAN AMOUNTS TO THE ASSESSEE, S UCH FAILURE, AS A COROLLARY, COULD NOT HAVE BEEN AND OUGHT NOT TO HAVE BEEN, UND ER THE LAW, TREATED AS THE INCOME FROM THE UNDISCLOSED SOURCES OF THE ASSESSEE HIMSELF, WHEN THERE WAS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENCE ON RECOR D THAT THE SAID LOAN AMOUNTS ACTUALLY BELONGED TO, OR WERE OWNED BY, THE ASSESSE E. VIEWED FROM THIS ANGLE, WE HAVE NO HESITATION IN HOLDING THAT IN THE CASE AT H AND, THE ASSESSING OFFICER HAD FAILED TO SHOW THAT THE AMOUNTS, WHICH HAD COME TO THE HANDS OF THE CREDITORS FROM THE HANDS OF THE SUB-CREDITORS, HAD ACTUALLY B EEN RECEIVED BY THE SUB- CREDITORS FROM THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE ON RECORD, THE ASSESSING OFFICER COULD NOT HAVE TREATED THE SAID A MOUNTS AS INCOME DERIVED BY THE APPELLANT FROM UNDISCLOSED SOURCES. THE LEARNED TRIBUNAL SERIOUSLY FELL INTO ERROR IN TREATING THE SAID AMOUNTS AS INCOME DERIVE D BY THE APPELLANT FROM. UNDISCLOSED SOURCES MERELY ON THE FAILURE OF THE SU B-CREDITORS TO PROVE THEIR CREDITWORTHINESS. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 27 | P A GE 20. FURTHER THE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF S.K. BOTHRA& SONS, HUF V. INCOME-TAX OFFICER, WARD- 46(3), KOLKA TA (347 ITR 347)ALSO HELD AS FOLLOWS: 15. IT IS NOW A SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED LOAN TAKEN BY THE ASSESSEE WAS A GENUINE TR ANSACTION, THE INITIAL ONUS IS ALWAYS UPON THE ASSESSEE AND IF NO EXPLANATION IS G IVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE ASSESSING OFFICER CAN DISBELIEVE THE ALLEGED TRANSACTION OF LOAN. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE ASSESSEE BY PRODUCING SUFFICIE NT MATERIALS IN SUPPORT OF THE LOAN TRANSACTION, THE ONUS SHIFTS UPON THE ASSESSIN G OFFICER AND AFTER VERIFICATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE ASSESS EE AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE ASSESSING OFFICER TO ASSES SEE. 16. IN THE CASE BEFORE US, THE APPELLANT BY PRODUCI NG THE LOAN-CONFIRMATION- CERTIFICATES SIGNED BY THE CREDITORS, DISCLOSING TH EIR PERMANENT ACCOUNT NUMBERS AND ADDRESS AND FURTHER INDICATING THAT THE LOAN WA S TAKEN BY ACCOUNT PAYEE CHEQUES, NO DOUBT, PRIMA FACIE, DISCHARGED THE INIT IAL BURDEN AND THOSE MATERIALS DISCLOSED BY THE ASSESSEE PROMPTED THE ASSESSING OF FICER TO ENQUIRE THROUGH THE INSPECTOR TO VERIFY THE STATEMENTS. 21. FURTHER, THE HON'BLE HIGH COURT AT CALCUTTA IN THE CASE OF CRYSTAL NETWORKS (P.) LTD. V. COMMISSIONER OF INCOME-TAX (353 ITR 171), O N THE ISSUE OF UNEXPLAINED CASH CREDITS, HELD THAT WHEN THE BASIC EVIDENCES ARE ON RECORD THE MERE FAILURE OF THE CREDITOR TO APPEAR CANNOTBE BASIS TO MAKE ADDITION. THE COURT HELD AS FOLLOWS: 8. ASSAILING THE SAID JUDGMENT OF THE LEARNED TRIB UNAL LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT INCOME-TAX OFFICER DID NOT C ONSIDER THE MATERIAL EVIDENCE SHOWING THE CREDITWORTHINESS AND ALSO OTHER DOCUMEN TS, VIZ., CONFIRMATORY STATEMENTS OF THE PERSONS, OF HAVING ADVANCED CASH AMOUNT AS AGAINST THE SUPPLY OF BIDIS. THESE EVIDENCE WERE DULY CONSIDERED BY TH E COMMISSIONER OF INCOME-TAX (APPEALS). THEREFORE, THE FAILURE OF THE PERSON TO TURN UP PURSUANT TO THE SUMMONS ISSUED TO ANY WITNESS IS IMMATERIAL WHEN TH E MATERIAL DOCUMENTS MADE AVAILABLE, SHOULD HAVE BEEN ACCEPTED AND INDEED IN SUBSEQUENT YEAR THE SAME EXPLANATION WAS ACCEPTED BY THE INCOME-TAX OFFICER. HE FURTHER CONTENDED THAT WHEN THE TRIBUNAL HAS RELIED ON THE ENTIRE JUDGMENT OF THE COMMISSIONER OF INCOMETAX (APPEALS), THEREFORE, IT WAS NOT PROPER T O TAKE UP SOME PORTION OF THE JUDGMENT OF THE COMMISSIONER OF INCOME-TAX (APPEALS ) AND TO IGNORE THE OTHER PORTION OF THE SAME. THE JUDICIAL PROPRIETY AND FAI RNESS DEMANDS THAT THE ENTIRE JUDGMENT BOTH FAVOURABLE AND UNFAVOURABLE SHOULD HA VE BEEN CONSIDERED. BY NOT DOING SO THE TRIBUNAL COMMITTED GRAVE ERROR IN LAW IN UPSETTING THE JUDGMENT IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S). 9. IN THIS CONNECTION HE HAS DRAWN OUR ATTENTION TO A DECISION OF THE SUPREME COURT IN THE CASE OF UDHAVDASKEWALRAM V. CIT [19671 66 ITR 462. IN THIS JUDGMENT IT IS NOTICED THAT THE SUPREME COURT AS PR OPOSITION OF LAW HELD THAT THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 28 | P A GE TRIBUNAL MUST IN DECIDING AN APPEAL, CONSIDER WITH DUE CARE, ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER IN THE LIGHT OF THE EVIDENCE AND THE R ELEVANT LAW. 10. WE FIND CONSIDERABLE FORCE OF THE SUBMISSIONS O F THE LEARNED COUNSEL FOR THE APPELLANT THAT THE TRIBUNAL HAS MERELY NOTICED THAT SINCE THE SUMMONS ISSUED BEFORE ASSESSMENT RETURNED UNSERVED AND NO ONE CAME FORWARD TO PROVE. THEREFORE, IT SHALL BE ASSUMED THAT THE ASSESSEE FA ILED TO PROVE THE EXISTENCE OF THE CREDITORS OR FOR THAT MATTER THE CREDITWORTHINE SS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS TAKEN THE TROUBLE OF EXAMINING OF ALL OTHER MATERIALS AND DOC UMENTS, VIZ., CONFIRMATORY STATEMENTS, INVOICES, CHALLANS AND VOUCHERS SHOWING SUPPLY OF BIDIS AS AGAINST THE ADVANCE. THEREFORE, THE ATTENDANCE OF THE WITNE SSES PURSUANT TO THE SUMMONS ISSUED, IN OUR VIEW, IS NOT IMPORTANT. THE IMPORTAN T IS TO PROVE AS TO WHETHER THE SAID CASH CREDIT WAS RECEIVED AS AGAINST THE FUTURE SALE OF THE PRODUCT OF THE ASSESSEE OR NOT. WHEN IT WAS FOUND BY THE COMMISSIO NER OF INCOME- TAX (APPEALS) ON FACTS HAVING EXAMINED THE DOCUMENTS THAT THE ADV ANCE GIVEN BY THE CREDITORS HAVE BEEN ESTABLISHED THE TRIBUNAL SHOULD NOT HAVE IGNORED THIS -FACT FINDING. INDEED THE TRIBUNAL DID NOT REALLY TOUCH THE AFORES AID FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AS RIGHTLY POI NTED OUT BY THE LEARNED COUNSEL. THE SUPREME COURT HAS ALREADY STATED AS TO WHAT SHOULD BE THE DUTY OF THE LEARNED TRIBUNAL TO DECIDE IN THIS SITUATION. I N THE SAID JUDGMENT NOTED BY US AT PAGE 464, THE SUPREME COURT HAS OBSERVED AS FOLL OWS: 'THE INCOME-TAX APPELLATE TRIBUNAL PERFORMS A JUDIC IAL FUNCTION UNDER THE INDIAN INCOME-TAX ACT; IT IS INVESTED WITH AUTHORITY TO DE TERMINE FINALLY ALL QUESTIONS OF FACT. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CON SIDER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CO NTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. ' 11. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSI DER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL CONTEN TIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. IT IS ALSO RULED IN THE SAID JUDGMENT AT PAGE 465 THAT IF THE TRIBUNAL DOES NOT DISCHARGE THE DUTY IN THE MANNER AS ABOVE THEN IT SHALL BE ASSUME D THE JUDGMENT OF THE TRIBUNAL SUFFERS FROM MANIFEST INFIRMITY. 12. TAKING INSPIRA TION FROM THE SUPREME COURT OBSERVATIONS WE ARE CONSTRAINED TO HOLD IN THIS MAT TER THAT THE TRIBUNAL HAS NOT ADJUDICATED UPON THE CASE OF THE ASSESSEE IN THE LI GHT OF THE EVIDENCE AS FOUND BY THE COMMISSIONER OF INCOME-TAX (APPEALS). WE ALSO F OUND NO SINGLE WORD HAS BEEN SPARED TO UP SET THE FACT FINDING OF THE COMMI SSIONER OF INCOME-TAX (APPEALS) THAT THERE ARE MATERIALS TO SHOW THE CASH CREDIT WAS RECEIVED FROM VARIOUS PERSONS AND SUPPLY AS AGAINST CASH CREDIT A LSO MADE. 13. HENCE, THE JUDGMENT AND ORDER OF THE TRIBUNAL I S NOT SUSTAINABLE. ACCORDINGLY, THE SAME IS SET ASIDE. WE RESTORE THE JUDGMENT AND ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). THE APPEAL IS ALLOWED. 22. THE LD. ARS RELIANCE ON THE DECISION OF THE HO NBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS APEX THERM PACKAGING (P) LTD REPORTE D IN 42 TAXMANN.COM 473 IS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 29 | P A GE ALSO FOUND TO BE OF MUCH RELEVANCE. IN THE DECIDED CASE IN THE COURSE OF PROCEEDINGS U/S 143(3), THE ASSESSEE HAD FURNISHED COMPLETE DET AILS OF LOAN CREDITORS ALONG WITH THEIR PAN, FINANCIAL STATEMENTS, LOAN CONFIRMATIONS , BANK STATEMENTS ETC. THE AO HOWEVER ADDED THE ENTIRE LOAN RECEIVED U/S 68 OF TH E ACT AND ALSO DISALLOWED THE INTEREST PAID THEREON. ON APPEAL THE LD. CIT(A) ALL OWED THE ASSESSEES APPEAL WHICH WAS ALSO AFFIRMED BY THIS TRIBUNAL. ON APPEAL BY TH E DEPARTMENT U/S 260A, THE HONBLE HIGH COURT OBSERVED THAT WHEN FULL PARTICUL ARS, INCLUSIVE OF THE CONFIRMATION WITH NAME, ADDRESS, PAN, IT RETURNS, BALANCE SHEET & PROFIT AND LOSS ACCOUNT IN RESPECT OF ALL THE LENDERS WERE FURNISHED AND THAT IT HAS BEEN FOUND THAT THE LOANS WERE RECEIVED THROUGH CHEQUES THEN THE AO WAS NOT JUSTIF IED IN MAKING ADDITION U/S 68 OF THE ACT. ACCORDINGLY THE HONBLE HIGH COURT DISMISS ED THE APPEAL OF THE DEPARTMENT. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT ARE AS FOLLOWS: 5. HEARD SHRI SUDHIR MEHTA, LEARNED ADVOCATE APPEA RING ON BEHALF OF THE REVENUE. AT THE OUTSET, IT IS REQUIRED TO BE NOTED THAT THE ASSESSING OFFICER DIRECTED TO MAKE THE ADDITION OF RS. 33,55,011/- UN DER SECTION 68 OF THE INCOME TAX ACT WITH RESPECT TO 17 LENDERS. HOWEVER, IT HAS BEEN FOUND THAT WITH RESPECT TO MOST OF THE LENDERS, EXCEPT TWO, NECESSARY DOCUM ENTS, INCLUSIVE OF CONFIRMATION WITH NAME, ADDRESS AND PAN NUMBERS, COPY OF THE IT RETURN AND ACKNOWLEDGMENT, BALANCE SHEET AND PROFIT AND LOSS A CCOUNT AND COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL THE PARTIES, EXCEPT TWO PARTIES, WERE FURNISHED BEFORE THE ASSESSING OFFICER. EVEN WITH RESPECT TO THE REMAINING TWO DEPOSITORS THE ASSESSEE FILED THE CONFIRMATION, ADDRESS AND PA N NUMBERS. UNDER THE CIRCUMSTANCES, WHEN IT WAS FOUND THAT THE ASSESSEE ALREADY DISCHARGED THE INITIAL ONUS CAST UPON HIM WITH RESPECT TO ALL THE CREDITOR S AND ACCORDINGLY WHEN THE CIT(A) HAS DELETED THE ADDITION OF RS. 33,55,011/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT AND CONSEQUENTLY DELETED THE DISALLO WANCE OF RS. 3,10,478/-, WHICH WAS MADE WITH RESPECT TO INTEREST AND WHEN TH E SAME HAS BEEN CONFIRMED BY THE ITAT, IT CANNOT BE SAID THAT ITAT HAS COMMIT TED ANY ERROR AND/OR ILLEGALITY, WHICH CALLS FOR THE INTERFERENCE OF THI S COURT. IN PARAGRAPH 11, ITAT HAS OBSERVED AND HELD AS UNDE R: 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR THE ASSESSEE H AD RECEIVED LOAN FROM 17 PARTIES AGGREGATING TO 33,35,011/-. THE DETAILS OF WHICH ARE LISTED AT PAGE 2 OF ASSESSING OFFICER ORDER. CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THAT THE ASSESSEE HAD FILED BEFORE ASSESSING OFFICE R THE CONFIRMATIONS WITH NAME, ADDRESS, PAN NUMBER, COPY OF LEDGER ACCOUNT, COPY O F BALANCE SHEET AND PROFIT AND LOSS ACCOUNT, COPY OF INCOME TAX RETURNS AND CO MPUTATION OF TOTAL INCOME IN RESPECT OF ALL THE PARTIES EXCEPT TWO DEPOSITORS. W ITH RESPECT TO THE TWO DEPOSITORS, THE ASSESSEE HAD FILED CONFIRMATION, AD DRESS AND PAN NUMBERS AND IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 30 | P A GE HENCE THE ASSESSEE HAD ALSO DISCHARGED THE INITIAL ONUS CAST UPON THE ASSESSEE WITH RESPECT TO THE TWO CREDITORS. HE HAS FURTHER N OTED THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOAN ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET OF LENDERS CIT(A) HAS FURTHER HELD ONCE THE O NUS WAS FULFILLED BY THE ASSESSEE, IT WAS FOR THE ASSESSING OFFICER TO EXAMI NE AND BRING ANY MATERIAL ON RECORD WHICH MAY HELP IN REBUTTING THE ONUS OF ASSE SSEE. THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD IN ITS SUPPO RT CIT(A) WHILE DELETING THE ADDITION HAS ALSO RELIED ON THE DECISION OF THE HON 'BLE GUJARAT HIGH COURT IN THE CASE OF DY. CIT V. ROHINI BUILDERS [2002] 256 ITR 360 AND THE DECISION OF HON'BLE SUPREME COURT, IN THE CASE OF ORISSA CORPN. LTD. 153 ITR 78 . BEFORE US, NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE T O CONTROVERT THE FINDINGS OF CIT(A). REVENUE HAS RELIED ON THE DECISION OF HON'B LE DELHI HIGH COURT IN THE CASE OF N.R. PORTFOLIO (SUPRA). WE HOWEVER FIND THA T THE RATIO OF THE AFORESAID DELHI HIGH COURT DECISION ARE DISTINGUISHABLE ON FA CTS AND THEREFORE CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. IN VIEW O F THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND TH US DISMISS THIS GROUND OF REVENUE.' 6. WE ARE IN COMPLETE AGREEMENT WITH THE REASONING GI VEN BY THE CIT(A) AS WELL AS THE ITAT. WHEN FULL PARTICULARS, INCLUSIVE OF TH E CONFIRMATION WITH NAME, ADDRESS AND PAN NUMBER, COPY OF THE INCOME TAX RETU RNS, BALANCE SHEET, PROFIT AND LOSS ACCOUNTS AND COMPUTATION OF THE TOTAL INCO ME IN RESPECT OF ALL THE CREDITORS/LENDER WERE FURNISHED AND WHEN IT HAS BEE N FOUND THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOAN ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN M AKING THE ADDITION OF RS. 33,55,011/-. UNDER THE CIRCUMSTANCES, NO QUESTION O F LAW, MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT TAX APPEAL. A CCORDINGLY, THE PRESENT TAX APPEAL DESERVES TO BE DISMISSED AND IS ACCORDINGLY DISMISSED. 23.IN THE ABOVE JUDGMENT THE HONBLE HIGH COURT REF ERRED TO ITS EARLIER DECISION IN THE CASE OF DCIT VS ROHINI BUILDERS (256 ITR 360). IN T HE DECIDED CASE THE HONBLE COURT HAD OBSERVED THAT THE ASSESSEE HAD DISCHARGED ITS ONUS OF PROVING THE IDENTITY OF CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, PERMA NENT ACCOUNT NUMBERS AND COPIES OF ASSESSMENT ORDERS. IT WAS FURTHER OBSERVED THAT THE ASSESSEE HAD ALSO PROVED CAPACITY OF CREDITORS BY SHOWING THAT AMOUNTS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES. THE HONBLE HIGH COURT HELD THAT ONLY ON T HE GROUND THAT SOME OF THE CREDITORS COULD NOT BE SERVED WITH NOTICE U/S 131 O R THEY FAILED TO APPEAR BEFORE ASSESSING OFFICER THE LOANS COULD NOT BE TREATED AS NON-GENUINE AND THEREFORE UPHELD THE ORDER OF THE TRIBUNAL DELETING THE ADDITION U/S 68 OF THE ACT.THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT ARE AS FOLLOWS: IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 31 | P A GE 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE ALSO GONE THROUGH THE ORDER PASSED BY THE ASSESSING OFFICER, THE RELEVANT PORTION OF WHICH WE HAVE ALSO EXTRACTED IN PARA. 2 ABOVE. THE COMMISSIONER OF INC OME-TAX (APPEALS) MORE OR LESS CONFIRMED THE ADDITION ON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. A PERUSAL OF THE CHART GIVEN BY U S IN PARA. 3 ABOVE INDICATES THAT OUT OF 21 CREDITORS THE ASSESSING OFFICER HAS RECORDED THE STATEMENTS OF ONLY SIX CREDITORS, VIZ., CREDITORS AT SERIAL NOS. 1, 2, 3, 4, 6, AND 7. HOWEVER, IN RESPECT OF ALL THE 21 CREDITORS THE ASSESSEE HAS FURNISHED THEIR COMPLETE ADDRESSES ALONG WITH GIR NUMBERS/PERMANENT ACCOUNT NUMBERS AS WELL AS CONFIRMATIONS ALONG WITH THE COPIES OF ASSESSMENT ORDERS PASSED IN THE CASES OF CREDITORS AT SERIAL NOS. 1, 2, 4, 5, 6, 7, 9, 10, 11, 12 AND 16. IN THE REMAINING CASES WHERE THE ASSESSMENT ORDERS PASSED WERE NOT READILY AVAILABLE , THE ASSESSEE HAS FURNISHED THE COPIES OF RETURNS FILED BY THE CREDITORS WITH T HE DEPARTMENT ALONG WITH THEIR STATEMENT OF INCOME. ALL THE LOANS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES AND THE REPAYMENTS OF LOANS HAVE ALSO BEEN MADE BY ACCOUNT PAYEE CHEQUES ALONG WITH THE INTEREST IN RELATION TO THOS E LOANS. IT IS RATHER STRANGE THAT ALTHOUGH THE ASSESSING OFFICER HAS TREATED THE CASH CREDITS AS NON-GENUINE, HE HAS NOT MADE ANY ADDITION ON ACCOUNT OF INTEREST CL AIMED/PAID BY THE ASSESSEE IN RELATION TO THOSE CASH CREDITS, WHICH HAS BEEN CLAI MED AS BUSINESS EXPENDITURE AND HAS BEEN ALLOWED BY THE ASSESSING OFFICER. IT I S ALSO PERTINENT TO NOTE THAT IN RESPECT OF SOME OF THE CREDITORS THE INTEREST WAS C REDITED TO THEIR ACCOUNTS/PAID TO THEM AFTER DEDUCTION OF TAX AT SOURCE AND INFORMATI ON TO THIS EFFECT WAS GIVEN IN THE LOAN CONFIRMATION STATEMENTS BY THOSE CREDITORS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THUS IT IS CLEAR THAT THE AS SESSEE HAD DISCHARGED THE INITIAL ONUS WHICH LAYS ON IT IN TERMS OF SECTION 68 BY PRO VING THE IDENTITY OF THE CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, GIR N UMBERS/PERMANENT ACCOUNTS NUMBERS AND THE COPIES OF ASSESSMENT ORDERS WHEREVE R READILY AVAILABLE. IT HAS ALSO PROVED THE CAPACITY OF THE CREDITORS BY SHOWIN G THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES D RAWN FROM BANK ACCOUNTS OF THE CREDITORS AND THE ASSESSEE IS NOT EXPECTED TO P ROVE THE GENUINENESS OF THE CASH DEPOSITED IN THE BANK ACCOUNTS OF THOSE CREDITORS B ECAUSE 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 AS HELD BY THE BOMBAY HIGH COU RT IN THE CASE OF ORIENT TRADING CO. LTD. V. CIT [1963] 49 ITR 723. THE GENUINENESS OF THE TRANSACT ION IS PROVED BY THE FACT THAT THE PAYMENT TO THE ASSESSEE AS WELL AS REPAYMENT OF THE LOAN BY THE ASSESSEE TO THE DEPOSITORS IS MADE BY A CCOUNT PAYEE CHEQUES AND THE INTEREST IS ALSO PAID BY THE ASSESSEE TO THE CREDIT ORS BY ACCOUNT PAYEE CHEQUES. MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDIT ORS COULD NOT BE SERVED OR THEY FAILED TO ATTEND BEFORE THE ASSESSING OFFICER, CANNOT BE A GROUND TO TREAT THE LOANS TAKEN BY THE ASSESSEE -FROM THOSE CREDITORS A S NON-GENUINE IN VIEW OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CA SE OF ORISSA CORPORATION [1986] 159 ITR 78. IN THE SAID DECISION THE SUPREME COURT HAS OBSERVED THAT WHEN THE ASSESSEE FURNISHES NAMES AND ADDRESSES OF THE ALLEGED CREDITORS AND THE GIR NUMBERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUE'S CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HA S TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON -COMPLIANCE OF SUMMONS ISSUED BY THE ASSESSING OFFICER UNDER SECTION 131, BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRAW AN ADVERSE INFERENCE AGAI NST THE ASSESSEE. IN THE CASE OF SIX CREDITORS WHO APPEARED BEFORE THE ASSESSING OFF ICER AND WHOSE STATEMENTS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 32 | P A GE WERE RECORDED BY THE ASSESSING OFFICER, THEY HAVE A DMITTED HAVING ADVANCED LOANS TO THE ASSESSEE BY ACCOUNT PAYEE CHEQUES AND IN CASE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CASH AMOUNT DEPOSITED BY THOSE CREDITORS IN THEIR BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE BEEN TO MAKE ASSESSMENTS IN THE CASES OF THOSE CREDITORS BY TREATING THE CASH DEPOSITS IN TH EIR BANK ACCOUNTS AS UNEXPLAINED INVESTMENTS OF THOSE CREDITORS UNDER SE CTION 69. 8. FURTHER, WE MAY POINT OUT THAT SECTION 68 UNDER WHICH THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER READS AS UNDER : '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLA NATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITE D MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR .' 9. THE PHRASEOLOGY OF SECTION 68 IS CLEAR. THE LEGI SLATURE HAS LAID DOWN THAT IN THE ABSENCE OF A SATISFACTORY EXPLANATION, THE UNEX PLAINED CASH CREDIT MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN THIS, CASE THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS 'SHALL BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR'. THE SUPREME COURT WHILE INTERPRETING SIMILAR PHRASEOLOGY USED I N SECTION 69 HAS HELD THAT IN CREATING THE LEGAL FICTION THE PHRASEOLOGY EMPLOYS THE WORD 'MAY' AND NOT 'SHALL'. THUS THE UNSATISFACTORINESS OF THE EXPLANA TION DOES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS THE INCOME OF THE ASSESSEE AS HELD BY THE SUPREME COURT IN THE CA SE OF CIT V. SMT. P. K. NOORJAHAN [1999] 237 ITR 570. 10. THUS TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND, IN PARTICULAR, THE FACT, THAT THE AS SESSING OFFICER HAS NOT DISALLOWED THE INTEREST CLAIMED/PAID IN RELATION TO THESE CRED ITS IN THE ASSESSMENT YEAR UNDER CONSIDERATION OR EVEN IN THE SUBSEQUENT YEARS, AND TAX DEDUCTED AT SOURCE HAS BEEN DEDUCTED OUT OF THE INTEREST PAID/CREDITED TO THE CREDITORS, WE ARE OF THE OPINION THAT THE DEPARTMENTAL AUTHORITIES WERE NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 12,85,000 WHICH IS DIRECTED TO BE D ELETED. 11. IN THE RESULT, THE APPEAL IS ALLOWED. 24. IT IS NOTED THAT SIMILAR VIEW WAS ALSO EXPRESSE D BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS PATEL RAMANIKAL HIRJI ( 41 TAXMANN.COM 493) WHEREIN ON SIMILAR SET OF FACTS AS INVOLVED IN THE APPELLANTS CASE, THE COURT OBSERVED THAT WHEN THE ASSESSEE HAD FURNISHED LOAN CONFIRMATIONS FROM LENDERS, COPIES OF CREDITORS BANK STATEMENTS, IT RETURNS ETC., THESE MATERIALS DULY P ROVED THE GENUINENESS OF THE TRANSACTION OF LOAN AS WELL AS THE IDENTITY & CREDI TWORTHINESS OF THE LENDERS. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 33 | P A GE 25. WE FURTHER RELY ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS SHIV DHOOTI PEARLS & INVESTMENT LTD (64 TAXM ANN.COM 329). IN THE DECIDED CASE THE ASSESSEE HAD RECEIVED UNSECURED LOANS IN T HE YEAR IN QUESTION. IN THE COURSE OF ASSESSMENT, THE AO REQUISITIONED THE DETAILS OF THE LOANS RECEIVED BY THE ASSESSEE. FROM THE DETAILS FURNISHED BY THE ASSESSEE, IT WAS OBSERVED THAT FEW LOAN CREDITORS HAD RETURNED LOSS AND THEIR SOURCE OF ADVANCING LOANS W ERE OTHER BODIES CORPORATE WHO HAD ALSO RETURNED MINISCULE TAXABLE INCOME IN THEIR INC OME-TAX RETURNS. THE AO THEREFORE DOUBTED THE CREDITWORTHINESS OF THE LENDERS. THE AO ACCORDINGLY MADE ADDITION U/S 68 OF THE ACT. ON APPEAL THE HONBLE HIGH COURT HELD T HAT THE ONUS OF THE ASSESSEE IS 'TO THE EXTENT OF HIS PROVING THE SOURCE THROUGH WHICH HE HAS RECEIVED THE CASH CREDIT.' THE HONBLE HIGH COURT HELD THAT THE AO HAS AMPLE 'FREEDOM' TO MAKE INQUIRY 'NOT ONLY INTO THE SOURCE OF THE CREDITOR, BUT ALSO OF I TS SUB-CREDITORS; BUT THE ASSESSEE HAS INDEED DISCHARGED ITS ONUS OF PROVING THE CREDITWOR THINESS AND GENUINENESS OF THE LENDER BY FURNISHING THE DOCUMENTS & DETAILS WHICH IT WAS REQUIRED TO MAINTAIN IN THE NORMAL COURSE AND UNDER LAW AND THEREFORE THE ADDIT ION MADE U/S 68 OF THE ACT WAS DELETED BY THE HONBLE HIGH COURT. THE RELEVANT FIN DINGS OF THE HONBLE HIGH COURT ARE AS FOLLOWS: 12. THE COURT HAS EXAMINED THE DECISION OF THE GAU HATI HIGH COURT IN NEMI CHAND KOTHARI (SUPRA). THEREIN THE GAUHATI HIGH COU RT REFERRED TO SECTION 68 OF THE ACT AND OBSERVED THAT THE ONUS OF THE ASSESSEE 'TO THE EXTENT OF HIS PROVING THE SOURCE WHOM WHICH HE HAS RECEIVED THE CASH CRED IT.' THE HIGH COURT HELD THAT THE AO HAD AMPLE 'FREEDOM' TO MAKE INQUIRY 'NO T ONLY INTO THE SOURCE(S) OF THE CREDITOR, BUT ALSO OF HIS (CREDITOR'S) SUB-CRED ITORS AND PROVE, AS A RESULT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESS EE, IN THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITO RS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF.' THEREAFTER, THE HIGH COU RT, ON A HARMONIOUS CONSTRUCTION OF SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF THE ACT, HELD AS UNDER: 'WHAT, THUS, TRANSPIRES FROM THE ABOVE DISCUSSION I S THAT WHILE SECTION 106 OF THE EVIDENCE ACT LIMITS THE ONUS OF THE ASSESSEE TO THE EXTENT OF HIS PROVING THE SOURCE FROM WHICH HE HAS RECEIVED THE CASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQUIRY NO T ONLY INTO THE SOURCE(S) OF THE CREDITOR, BUT ALSO OF HIS (CREDITOR'S) SUB-CREDITOR S AND PROVE, AS A RESULT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESSEE, I N THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITORS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTHER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUIRE INTO THE SOURCE/SOURCE S FROM WHERE THE CREDITOR HAS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 34 | P A GE RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE ONLY THE SOURCE(S) FROM WHERE HE HAS HIMSELF RECEIVED THE CR EDIT AND IT IS NOT THE BURDEN OF THE ASSESSEE TO SHOW THE SOURCE(S) OF HIS CREDITOR NOR IS IT THE BURDEN OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SOURC E(S) OF THE SUB-CREDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, W HICH THEY MUST, THEN, THE INTERPRETATION OF SECTION 68 HAS TO BE IN SUCH A WA Y THAT IT DOES NOT MAKE SECTION 106 REDUNDANT. HENCE, THE HARMONIOUS CONSTRUCTION O F SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF THE INCOME TAX ACT W ILL BE THAT THOUGH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSE SSEE MUST ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDI TWORTHINESS OF HIS CREDITOR, THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFIN ED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDI TOR. WHAT FOLLOWS, AS A COROLLARY, IS THAT IT IS NOT THE BURDEN OF THE ASSE SSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND SUB-CREDI TORS NOR IS IT THE BURDEN OF THE ASSESSEE TO PROVE THAT THE SUB-CREDITOR HAD THE CRE DITWORTHINESS TO ADVANCE THE CASH CREDIT TO THE CREDITOR FROM WHOM THE CASH CRED IT HAS BEEN, EVENTUALLY, RECEIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LO GICALLY FOLLOWS THAT THE CREDITOR'S CREDITWORTHINESS HAS TO BE JUDGED VIS-A-VIS THE TRA NSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CRE DITOR OR OF THE GENUINENESS OF THE TRANSACTIONS, WHICH TOOK BETWEEN THE CREDITOR A ND SUB-CREDITOR AND/OR CREDITWORTHINESS OF THE SUB-CREDITORS, FOR, THESE A SPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE.' (EMPHASIS SUPPL IED) 13. THE ABOVE OBSERVATIONS, FAR FROM SUPPORTING THE CASE OF THE REVENUE, DOES THE OPPOSITE. IN THE SUBSEQUENT DECISION OF THIS COURT IN MOD. CREATIONS (P.) LTD. V. ITO [2013] 354 ITR 282/[2011] 202 TAXMAN 10 (MAG.)/13 TAXMANN.COM. 114 (DELHI) , THE POSITION WAS CLARIFIED BY THE COURT AND IT WAS HELD: 'IT WILL HAVE TO BE KEPT IN MIND THAT SECTION 68 OF THE I.T. ACT ONLY SETS UP A PRESUMPTION AGAINST THE ASSESSEE WHENEVER UNEXPLAIN ED CREDITS ARE FOUND IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT CANNOT BUT BE GAINSAID THAT THE PRESUMPTION IS REBUTTABLE. IN REFUTING THE PRESUMPTION RAISED, THE INITIAL BURDEN IS ON THE ASSESSEE. THIS BURDEN, WHICH IS PLACED ON THE ASSES SEE, SHIFTS AS SOON AS THE ASSESSEE ESTABLISHES THE AUTHENTICITY OF TRANSACTIO NS AS EXECUTED BETWEEN THE ASSESSEE AND ITS CREDITORS. IT IS NO PART OF THE AS SESSEE'S BURDEN TO PROVE EITHER THE GENUINENESS OF THE TRANSACTIONS EXECUTED BETWEE N THE CREDITORS AND THE SUB- CREDITORS NOR IS IT THE BURDEN OF THE ASSESSEE TO P ROVE THE CREDITWORTHINESS OF THE SUB-CREDITORS.' 14. IN MOD. CREATIONS (P.) LTD. (SUPRA) THIS COURT NEGATIVED THE CASE OF THE REVENUE THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THE SOURCE OF THE SUB- CREDITOR. IT WAS OBSERVED AS UNDER: '14. WITH THIS MATERIAL ON RECORD IN OUR VIEW AS FA R AS THE ASSESSEE WAS CONCERNED, IT HAD DISCHARGED INITIAL ONUS PLACED ON IT. IN THE EVENT THE REVENUE STILL HAD A DOUBT WITH REGARD TO THE GENUINENESS OF THE TRANSACTIONS IN ISSUE, OR AS REGARDS THE CREDITWORTHINESS OF THE CREDITORS, IT W OULD HAVE HAD TO DISCHARGE THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 35 | P A GE ONUS WHICH HAD SHIFTED ON TO IT. A BALD ASSERTION B Y THE A.O. THAT THE CREDITS WERE A CIRCULAR ROUTE ADOPTED BY THE ASSESSEE TO PLOUGH BACK ITS OWN UNDISCLOSED INCOME INTO ITS ACCOUNTS, CAN BE OF NO AVAIL. THE R EVENUE WAS REQUIRED TO PROVE THIS ALLEGATION. AN ALLEGATION BY ITSELF WHICH IS B ASED ON ASSUMPTION WILL NOT PASS MUSTER IN LAW. THE REVENUE WOULD BE REQUIRED TO BRI DGE THE GAP BETWEEN THE SUSPICIONS AND PROOF IN ORDER TO BRING HOME THIS AL LEGATION. THE ITAT, IN OUR VIEW, WITHOUT ADVERTING TO THE AFOREMENTIONED PRINC IPLE LAID STRESS ON THE FACT THAT DESPITE OPPORTUNITIES, THE ASSESSEE AND/OR THE CREDITORS HAD NOT PROVED THE GENUINENESS OF THE TRANSACTION. BASED ON THIS THE I TAT CONSTRUED THE INTENTIONS OF THE ASSESSEE AS BEING MALA FIDE. IN OUR VIEW THE IT AT OUGHT TO HAVE ANALYZED THE MATERIAL RATHER THAN BE BURDENED BY THE FACT THAT S OME OF THE CREDITORS HAD CHOSEN NOT TO MAKE A PERSONAL APPEARANCE BEFORE THE A.O. IF THE A.O. HAD ANY DOUBT ABOUT THE MATERIAL PLACED ON RECORD, WHICH WA S LARGELY BANK STATEMENTS OF THE CREDITORS AND THEIR INCOME TAX RETURNS, IT COUL D GATHER THE NECESSARY INFORMATION FROM THE SOURCES TO WHICH THE SAID INFO RMATION WAS ATTRIBUTABLE TO. NO SUCH EXERCISE HAD BEEN CONDUCTED BY THE A.O. IN ANY EVENT WHAT BOTH THE A.O. AND THE ITAT LOST TRACK OF WAS THAT IT WAS DEALING WITH THE ASSESSMENT OF THE COMPANY, I.E., THE RECIPIENT OF THE LOAN AND NOT TH AT OF ITS DIRECTORS AND SHAREHOLDERS OR THAT OF THE SUB-CREDITORS. IF IT HA D ANY DOUBTS WITH REGARD TO THEIR CREDIT WORTHINESS, THE REVENUE COULD ALWAYS BRING I T TO TAX IN THE HANDS OF THE CREDITORS AND/OR SUB-CREDITORS. [SEE CIT V. DIVINE LEASING & FINANCE LTD. (2008) 299 ITR 268 (DELHI) AND CIT V. LOVELY EXPORTS (P.) LTD. (2008) 216 CTR 195 (SC) ].' 15. IN VIEW OF THE LEGAL POSITION EXPLAINED IN THE ABOVE DECISIONS, THE COURT HOLDS THAT AS FAR AS THE PRESENT CASE IS CONCERNED, THE A SSESSEE HAS INDEED DISCHARGED ITS ONUS OF PROVING THE CREDITWORTHINESS AND GENUIN ENESS OF THE LENDER (TIL). THERE WAS NO REQUIREMENT IN LAW FOR THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE SUB-CREDITOR, WHICH IS IN T HIS CASE WAS TCL. 26. IN THE LIGHT OF THE AFORESAID DECISIONS OF THE HONBLE APEX COURT AND JURISDICTIONAL AND OTHER HIGH COURTS, LET US NOW EX AMINE THE FACTS OF THE CASE. FROM THE ANALYSIS OF THE LOAN CREDITORS WE NOTE THAT, TH E APPELLANT HAD RECEIVED LOANS AGGREGATING TO RS.9,02,00,000/- FROM EIGHT PARTIES SET OUT AT SERIAL NOS. 1 TO 8 FROM WHOM THE LOANS WERE RECEIVED IN THE EARLIER YEARS A S WELL TO WHOM INTEREST OF RS.1,58,38,049/- WAS PAID. BESIDES, THE APPELLANT H AD PAID INTEREST OF RS.2,03,780/- TO ONE PARTY MENTIONED AT SERIAL NO. 9 OF THE TABLE WH OSE LOAN WAS BROUGHT FORWARD FROM THE EARLIER YEARS. WE NOTE THAT NO ADDITION U/ S 68 OF THE ACT IN RESPECT OF THE LOANS BROUGHT FORWARD FROM THE EARLIER YEARS WAS MA DE IN THE PAST ASSESSMENTS. IN THE CIRCUMSTANCES THEREFORE WE FIND THAT IF IN THE PAST ASSESSMENTS, THE REVENUE DID NOT DRAW ADVERSE INFERENCE IN RESPECT OF THE PRINCIPAL LOAN AMOUNTS RECEIVED FROM THESE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 36 | P A GE NINE PARTIES, THEN THERE WAS NO APPARENT REASON FOR THE AO TO DISPUTE AND DISBELIEVE THE GENUINENESS OF THE TRANSACTION INVOLVING ONLY T HE INTEREST PAYMENT. WE ALSO NOTE THAT IN RESPECT OF INTEREST PAID DURING THE RELEVAN T YEAR, THE APPELLANT HAD COMPLIED WITH RELEVANT PROVISIONS OF SECTION 194A OF THE ACT [TDS] AND NECESSARY EVIDENCE IN RESPECT THEREOF WAS ALSO FURNISHED. IN THE CIRCUMST ANCES WE FIND THAT INRESPECT OF PAYMENT OF INTEREST TO THESE NINE PARTIES, PROVISIO NS OF SECTION 69C OF THE ACT HAD NO APPLICATION. ACCORDINGLY THE ADDITION MADE U/S 69C TO THE EXTENT OF RS.1,60,41,829/- WAS NOT WARRANTED. 27. AS NOTED (SUPRA) IN RESPECT OF LOANS OF RS.9,02 ,00,000/- TAKEN FROM EIGHT PARTIES LISTED AT SERIAL NOS. 1 TO 8 OF THE ABOVE T ABLE, THE LOANS WERE TAKEN FROM THESE PARTIES IN THE EARLIER YEARS AND IN THE INCOME-TAX ASSESSMENTS COMPLETED U/S 143(3) FOR THE EARLIER YEARS, THE REVENUE HAD ACCEPTED THE GEN UINENESS OF THE APPELLANTS LOAN TRANSACTIONS WITH THE SAID LOAN CREDITORS. WHEN TH E REVENUE DID NOT DRAW ADVERSE INFERENCE IN RESPECT OF THE PRINCIPAL LOAN AMOUNTS RECEIVED FROM THESE EIGHT PARTIES IN THE SCRUTINY ASSESSMENTS IN THE EARLIER YEARS, THEN WITHOUT THERE BEING ANY CHANGE IN THE FACTUAL MATRIX AND THE NATURE OF DOCUMENTATION PRODUCED IN SUPPORT OF THE LOAN TRANSACTIONS BEING SAME, WE DO NOT SEE ANY REASON T O TAKE CONTRARY VIEW. THEREFORE, THE ADDITION OF RS.9,02,00,000/- MADE UNDER SECTION 68 OF THE ACT IN RESPECT OF THESE LOAN CREDITORS IS HEREBY DELETED. CONSEQUENT TO OUR SAID FINDING, WE ALSO DIRECT THE AO TO DELETE THE DISALLOWANCE U/S 69C OF THE ACT AMOUN TING TO RS.1,58,38,049/- AND RS. 2,03,780/- (TOTAL RS. 1,60,41,829/-) BEING INTEREST PAID BY THE APPELLANT ON THESE LOANS. 28. AS REGARDS REMAINING ADDITIONS U/S 68 AND 69C O F THE ACT, SUM OF RS.8,69,27,490/- IN RELATION TO PRINCIPAL LOAN AMOU NT RECEIVED FROM REMAINING SIX PARTIES AND INTEREST OF RS.1,65,76,844/- PAID TO TH EM AS ALSO THE ABOVE MENTIONED NINE PARTIES FROM WHOM LOANS WERE RECEIVED IN EARLIER YE ARS AS WELL, IT IS NOTED THAT, THE APPELLANT HAD FURNISHED BEFORE THE AO THE REQUISITE DOCUMENTARY EVIDENCES SUBSTANTIATING THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITORS AND GENUINENESS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 37 | P A GE OF THE TRANSACTIONS. REJECTING THE EXPLANATIONS OF THE APPELLANT, THE LD. CIT(A) SOUGHT TO JUSTIFY THE ADDITIONS MADE U/S 68 & 69C BY PRINC IPALLY RELYING ON THE STATEMENTS OF ALLEGED ENTRY OPERATORS, SHRI PANKAJ AGARWAL, SHRI RAMESH PODDAR, SHRI ANUJ BUKEDIWALA & SHRI RAKESH AGARWAL IN WHICH THEY HAD ADMITTED OF BEING ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES TO THE VARIOUS BENEFICIARIES. IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE AP PELLANT HAD SOUGHT FOR COPIES OF THE STATEMENTS WHICH WERE NOT GIVEN TO ASSESSEE BEFORE THE FRAMING OF THE ASSESSMENT ORDER AND ALSO SOUGHT CROSS EXAMINATION OF THESE PE RSONS. ACCEDING TO APPELLANTS REQUEST, THE LD. CIT(A) DIRECTED THE AO TO PROVIDE THE SAME. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT VIDE LETTER DATED 21.10.2 019 THE AO SUPPLIED THE STATEMENTS OF ALLEGED ENTRY OPERATORS BASED ON WHOSE STATEMENT S THE IMPUGNED ADDITIONS WERE BEING JUSTIFIED AND ALSO REQUIRED THE ASSESSEE TO B E PRESENT BEFORE HIM ON 30.10.2019 TO CROSS EXAMINE THESE PERSONS. UPON EXAMINING THE CONTENTS OF THE STATEMENTS, THE APPELLANT HAD OBSERVED THAT NONE OF THEM WERE EITHE R RECORDED IN THE COURSE OF ITS SEARCH NOR BY THE AO ON HIS OWN. AND MOST IMPORTANT AND THE BEST PART WAS THAT NEITHER THE NAME OF THE ASSESSEE WAS MENTIONED BY A NY OF THESE PERSONS NOR IN THESE SWORN STATEMENTS HAD THE SO-CALLED ENTRY OPERATORS ADMITTED OF PROVIDING ACCOMMODATION ENTRIES TO THE APPELLANT. SINCE THE A PPELLANT WAS NOT ACCUSED OF ANY WRONG-DOING IN THESE THIRD PARTY STATEMENTS PROVIDE D BY THE AO, IT WAS CONTENDED BEFORE THE AO BY LETTER DATED 30.10.2019 THAT THE E XERCISE OF THE CROSS-EXAMINATION BEING CONDUCTED BY THE AO WAS A FUTILE EXERCISE HO WEVER, ACCORDING TO THE LOWER AUTHORITIES THIS REPLY OF THE APPELLANT SUGGESTED T HAT IT DID NOT INTEND TO COOPERATE DURING THE CROSS EXAMINATION AND THEREFORE THE LD. CIT(A) HELD THAT THE OPPORTUNITY TO CROSS-EXAMINE HAD BEEN AFFORDED TO THE APPELLANT, W HICH WAS NOT AVAILED BY IT. 29. AFTER CAREFUL ANALYSIS OF THE MATERIAL PLACED B EFORE US AND AFTER EXAMINING THE STATEMENTS OF THE SO-CALLED ENTRY OPERATORS, IT IS NOTED THAT NEITHER IN THE SWORN STATEMENTS THE SO-CALLED ENTRY OPERATORS HAD ADMITT ED OF PROVIDING ACCOMMODATION ENTRIES TO THE APPELLANT NOR THEY HAD ADMITTED OF R ECEIVING ANY CASH FROM THE APPELLANT IN LIEU OF CHEQUES. IN NONE OF THE SPECIFIC INSTANC ES, THE LOWER AUTHORITIES WERE ABLE TO IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 38 | P A GE SHOW ANY CREDIBLE LINK BETWEEN THE PERSON WHOSE STA TEMENT WAS RELIED UPON AND THE COMPANY FROM WHOM THE LOANS WERE RECEIVED BY THE AP PELLANT. THE LD. AR HAS POINTED OUT TO US THAT THE SO-CALLED ENTRY OPERATOR S WERE NOT EVEN SHAREHOLDERS OR DIRECTORS OF THE LOAN CREDITOR COMPANIES. WE ALSO N OTE THAT ALTHOUGH THE AO HAD HEAVILY RELIED UPON THE STATEMENTS OF THE ENTRY OPE RATORS, THE AO HAD NEITHER PERSONALLY NOR INDEPENDENTLY EXAMINED EVEN A SINGLE ENTRY OPERATOR IN THE CAPACITY AS THE ASSESSING OFFICER TO VERIFY THE CORRECTNESS OF THE FACTS OR TO DIG OR PROBE AND UNEARTH THE LINK IF ANY WITH THE APPELLANT. INSTEAD THE UNFORTUNATE PART IS THAT THE AO BLINDLY RELIED ON THE BALD STATEMENTS OF THESE OPER ATORS RECORDED BY SOMEONE ELSE AND IN THE PROCESS FAILED TO BRING OUT ANY LINK TO CONN ECT THEM WITH THE APPELLANT. IF THE AO WANTED TO USE THE STATEMENTS OF THE SO-CALLED EN TRY OPERATORS, THEN THE AO DURING THE ASSESSMENT PROCEEDINGS OUGHT TO HAVE SUMMONED T HESE ENTRY OPERATORS AND EXAMINED THEM THOROUGHLY AND SHOULD HAVE UNEARTHED THE LINKS, MATERIALS OR RELEVANT EVIDENCES, IF ANY, AGAINST THE APPELLANT AND IF HE INTENDED TO USE ANY MATERIAL ADVERSELY AGAINST THE ASSESSEE, THEN IN ALL FAIRNES S, THE ASSESSING OFFICER SHOULD HAVE CALLED THE APPELLANT AND CONFRONTED HIM WITH ANY MA TERIALS OR STATEMENT WHICH HE DISCOVERS AND WHICH MATERIAL HE WISHES TO RELY AGAI NST THE ASSESSEE AND AFTER GIVING AN OPPORTUNITY TO ASSESSEE TO CROSS EXAMINE THE MAKER OF THE STATEMENT ETC. AND IN THE EVENT, THE MAKER OF THE STATEMENT COULD PASS THE CR OSS EXAMINATION, THEN THE STATEMENT OF THE ENTRY PROVIDER COULD HAVE BEEN ACTED UPON BY THE AO AGAINST THE ASSESSEE OR ELSE HE COULD NOT USE IT AGAINST THE ASSESSEE. WE T HUS FIND SUBSTANCE IN THE ARGUMENT OF LD. COUNSEL OF THE ASSESSEE THAT THE EXERCISE OF CR OSS-EXAMINATION AFFORDED BY THE AO WAS A FUTILE EXERCISE, FOR THE SIMPLE REASON THAT I N THE STATEMENTS THESE PERSONS DID NOT ALLEGE ANY WRONG DOING ON THE PART OF THE ASSESSEE OR ITS DIRECTORS, SO WHEN THE ASSESSEE HAD GONE THROUGH THE COPIES OF THE STATEME NT GIVES DURING REMAND PROCEEDINGS, IT REALIZED THAT THESE STATEMENTS DID NOT CONTAIN ANY MATERIAL INCRIMINATING THE APPELLANT SO THERE WAS NOTHING TO EXAMINE LEAVE ALO NE CROSS- EXAMINATION THEM SO, WAS TERMED AS FUTILE AND NUGA TORY . IN THE AFORESAID FACTS WE WONDER AS TO HOW THE LD. CIT(A) HAS SAID THAT ASSES SEE DID NOT AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. IN THE AFORESAID CIRCUMSTANCES, WE ARE OF THE OPINION THAT WHEN THE IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 39 | P A GE MAKER OF A STATEMENT DOES NOT ALLEGE ANY WRONG DOIN GS OR ADMITS TO HAVE DONE ANYTHING WRONG ALONG WITH ASSESSEE, THEN QUESTION O F CROSS-EXAMINATION DOES NOT ARISE AND SO, THE ASSESSEE RIGHTLY DID NOT CROSS-EXAMINE THEM. HERE THE MOST IMPORTANT FACT IS THAT THE STATEMENTS RELIED ON BY LOWER AUTHORITI ES DID NOT ALLEGE ANY WRONG ON THE PART OF ASSESSEE, OS IN THE FIRST PLACE THOSE STATE MENTS WERE WRONGLY RELIED UPON BY LD. CIT(A) AND ASSESSING OFFICER. NEXT LET US EXAMINE H OW THE ASSESSING OFFICER ERRED IN HIS OMISSION TO CARRY OUT PROPER ENQUIRY BY NOT EVEN SUMMONING THESE OPERATORS AN D HOW HIS ERRONEOUS RELIANCE ON THEIR BALD STATEMENTS AFFECTED HIS ACTION, CAN BE SEEN FROM THE FOLLOWING FACTS. (I) THE ASSESSEE RECEIVED LOAN OF RS.1,75,00,000/- FROM M/S NISHU LEASING & FINANCE LTD, WHICH ACCORDING TO AO WAS ALLEGEDLY CO NTROLLED BY SHRI ANUJ BHUKEDIWALA WHOSE STATEMENT WAS RECORDED U/S 131 OF THE ACT ON 16-05-2016 AT 51/1 BONEHARI BOSE ROAD, HOWRAH - 711 101. THUS, IT IS N OTED THAT THE STATEMENT OF SHRI ANUJ BHUKEDIWALA WAS NOT RECORDED IN PURSUANCE OF A NY PROCEEDINGS AGAINST THE ASSESSEE IN CONNECTION WITH SEARCH U/S 132 OF THE A CT CONDUCTED UPON THE APPELLANT/ASSESSEE ON 22-06-2016. FROM THE CONTENTS OF THE STATEMENT, WE NOTE THAT NOWHERE IN HIS STATEMENT SHRI ANUJ BHUKEDIWALA HAD ADMITTED THAT M/S NISHU LEASING & FINANCE LTD WAS CONTROLLED BY HIM. WE FUR THER NOTE THAT IN HIS ANSWER TO Q NO. 15 THOUGH HE IDENTIFIED THE GROUP TO WHOM HE PR OVIDED ACCOMMODATION ENTRIES BUT THE PARTIES IDENTIFIED BY HIM WAS NEITHER SHRI SANJAY JHUNJHUNWALA OR THE APPELLANT COMPANY. WE FIND THAT THE CONTENTS OF THE STATEMENT DID NOT CONTAIN ANY MATERIAL WHATSOEVER ON THE BASIS OF WHICH ANY PRUDE NT PERSON INSTRUCTED IN LAW WOULD HAVE REACHED THE CONCLUSION THAT THE LOANS RECEIVED BY THE APPELLANT FROM M/S NISHU LEASING & FINANCE LTD HAD ANY CONNECTION WITH SHRI ANUJ BHUKEDIWALA. MOREOVER, WHEN THE AO HIMSELF NEVER EXAMINED THE SO-CALLED EN TRY OPERATOR, HE COULD NOT HAVE RELIED ON SUCH STATEMENT. (II) THE ASSESSEE RECEIVED LOANS AGGREGATING TO RS. 10,00,50,000/- FROM M/S DAMODAR NIKETAN PVT LTD, M/S LAVANYA NIRMAN PVT. LTD., M/S KASTURI HOME PVT. LTD., M/S IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 40 | P A GE HIMADRI ENCLAVE PVT. LTD., M/S ARADHANA PLAZA PVT L TD, M/S JAMUNA ENCLAVE PVT LTD, M/S MARIGOLD NIRMAN PVT LTD, M/S SHITAL PLAZA PVT L TD, M/S SREEDEV COMPUTERS PVT LTD AND M/S TISTA NIRMAN PVT. LTD. ACCORDING TO AO ALL THESE LOAN CREDITORS WERE ALLEGEDLY CONTROLLED BY SHRI PANKAJ AGARWAL WHOSE S TATEMENT WAS RECORDED U/S 131 OF THE ACT ON 03-02-2015 AT 138B MANICKTALA MAIN ROAD, KOLKATA 700 054. IT IS THUS NOTED THAT THE STATEMENT OF SHRI PANKAJ AGARWAL WAS NOT RECORDED IN PURSUANCE OF ANY PROCEEDINGS AGAINST THE APPELLANT IN CONNECTION WIT H SEARCH U/S 132 CONDUCTED UPON THE APPELLANT ON 22-06-2016. FURTHER IN HIS ANSWER TO Q NO. 14, HE HAD IDENTIFIED THE NAMES OF SIX COMPANIES WHICH HE ALLEGEDLY CONTROLLE D BUT WE FIND THAT NONE OF FIVE LOAN CREDITORS WHICH PROVIDED LOAN TO ASSESSEE DOES FIGURE IN IT. THUS, WE FIND THAT NOWHERE IN HIS STATEMENT SHRI PANKAJ AGARWAL ADMITT ED THAT M/S DAMODAR NIKETAN PVT LTD, M/S LAVANYA NIRMAN PVT. LTD., M/S KASTURI HOME PVT. LTD., M/S HIMADRI ENCLAVE PVT. LTD., M/S ARADHANA PLAZA PVT LTD, M/S JAMUNA ENCLAVE PVT LTD, M/S MARIGOLD NIRMAN PVT LTD, M/S SHITAL PLAZA PVT LTD, M/S SREEDEV COMPUTERS PVT LTD AND M/STISTA NIRMAN PVT. LTD WERE CONTROLLED OR MAN AGED BY HIM. WE ALSO NOTE THAT EVEN THOUGH IN HIS STATEMENT, HE HAD ADMITTED OF BE ING ENGAGED IN PROVIDING ACCOMMODATION ENTRIES TILL THE YEAR 2011 YET NOWHER E IN HIS STATEMENT SHRI PANKAJ AGARWAL HAD IDENTIFIED EITHER SHRI SANJAY JHUNJHUNW ALA OR MANI SQUARE HOSPITALITY PVT. LIMITED AS BENEFICIARY OF ACCOMMODATION ENTRIE S PROVIDED BY HIM. FURTHER, WE NOTE THAT BEFORE THE AO USED THE STATEMENT OF SHRI PANKAJ AGARWAL AS EVIDENCE AGAINST THE ASSESSEE, HE HIMSELF NEVER ISSUED NOTICE U/S 13 1 OR 133(6) OF THE ACT TO SHRI PANKAJ AGARWAL TO ASCERTAIN THE FACTS OF THE CASE, PARTICULARLY WHEN NO INFORMATION WAS APPEARING FROM HIS STATEMENT WHICH CONNECTED TH E LOAN TRANSACTIONS BETWEEN APPELLANT AND THE LOAN CREDITORS, M/S DAMODAR NIKET AN PVT LTD, M/S LAVANYA NIRMAN PVT. LTD., M/S KASTURI HOME PVT. LTD., M/S HIMADRI ENCLAVE PVT. LTD., M/S ARADHANA PLAZA PVT LTD, M/S JAMUNA ENCLAVE PVT LTD, M/S MARI GOLD NIRMAN PVT LTD, M/S SHITAL PLAZA PVT LTD, M/S SREEDEV COMPUTERS PVT LTD AND M/ STISTA NIRMAN PVT. LTD WE THUS FIND THAT THE STATEMENT OF SHRI PANKAJ AGARWAL ON I TS OWN DID NOT CONTAIN ANY ASSERTION/ADMISSION WHATSOEVER ON THE BASIS OF WHIC H ANY PRUDENT PERSON INSTRUCTED IN IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 41 | P A GE LAW WOULD HAVE REACHED THE CONCLUSION THAT THE LOAN S RECEIVED BY THE APPELLANT FROM FIVE BODIES CORPORATE, ADMITTEDLY HAVE ANY CONNECTI ON WITH SHRI PANKAJ AGARWAL. (III) THE ASSESSEE RECEIVED LOAN OF RS.1,00,00,000/ - FROM M/S VICKY FINCON PVT LTD, WHICH ACCORDING TO AO WAS ALLEGEDLY CONTROLLED BY S HRI RAMESH PODDAR WHOSE STATEMENT WAS ALLEGEDLY RECORDED U/S 131 OF THE ACT ON 12-06-2014 AT P-136, BANGUR AVENUE, 3RD FLOOR, KOLKATA 700 055. IT IS NOTED T HAT EVEN THIS STATEMENT WAS NOT RECORDED IN PURSUANCE OF ANY PROCEEDINGS AGAINST TH E APPELLANT/ASSESSEE IN CONNECTION WITH SEARCH U/S 132 CONDUCTED UPON THE APPELLANT ON 22-06-2016. ON COMBINED READING OF THE PAST DIRECTOR DETAILS AND THE CONTEN TS OF THE STATEMENT, IT IS NOTED THAT SHRI RAMESH PODDAR WAS NEITHER A DIRECTOR NOR SHARE HOLDER OF M/S VICKY FINCON PVT LTD DURING FY 2012-13 IN WHICH IT HAD ADVANCED LOAN TO THE APPELLANT. MOREOVER EVEN THE TWO PERSONS NAMED BY SHRI RAMESH PODDAR, WHO WE RE ALLEGEDLY ACTING UNDER HIS DIRECTIONS AND CONTROL, WERE NOT THE DIRECTORS OF T HE LOAN CREDITOR. IN HIS ENTIRE STATEMENT, SHRI RAMESH PODDAR NEITHER NAMED THE LOA N CREDITOR NOR SUGGESTED THAT THE LOAN CREDITOR WAS CONTROLLED BY HIM. HE HAS ALSO NO T ADMITTED TO BE PROVIDING ACCOMMODATION ENTRIES TO EITHER SHRI SANJAY JHUNJHU NWALA OR MANI SQUARE HOSPITALITY PVT. LIMITED. WE ARE OF THE OPINION THAT THE STATEM ENT OF SHRI RAMESH PODDAR AT BEST COULD HAVE RAISED SUSPICION IN THE MIND OF THE AO A ND IT WOULD HAVE BEEN THE STARTING POINT OF AN ENQUIRY TO DIG OUT FACTS WHICH COULD HA VE UNRAVELED ANY WRONG DOING CONNECTING THE ASSESSEE. HOWEVER, THE STATEMENT ON ITS OWN DID NOT CONTAIN ANY MATERIAL WHATSOEVER ON THE BASIS OF WHICH ANY PRUDE NT PERSON INSTRUCTED IN LAW WOULD HAVE REACHED THE CONCLUSION THAT THE LOANS RECEIVED BY THE APPELLANT/ASSESSEE FROM M/S VICKY FINCON PVT LTD WAS NOT GENUINE. MOREOVER THE AO HIMSELF NEVER EXAMINED THE SO-CALLED ENTRY OPERATOR. WE THEREFORE FIND THA T THE ADDITION MADE BY THE AO BY RELYING ON SUCH STATEMENT WAS UNTENABLE ON FACTS AN D IN LAW. 30. THE FOREGOING WAS THE ILLUSTRATIVE ANALYSIS OF THE STATEMENTS OF ENTRY OPERATORS RELIED UPON BY THE AO FOR JUSTIFYING THE ADDITIONS MADE U/S 68 & 69C OF THE ACT. ON EXAMINATION OF EACH OF THESE STATEMENTS, WE ARE SAT ISFIED THAT IN NONE OF THE STATEMENTS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 42 | P A GE ANY OF THEM HAD ADMITTED OF HAVING ANY TRANSACTIONS OR PROVIDING ACCOMMODATION ENTRIES TO THE APPELLANT NOR THE AO HAS BROUGHT ON RECORD ANY MATERIAL TO LINK THESE ENTRY OPERATORS WITH THE BODIES CORPORATE FROM WHOM THE LOANS WERE RECEIVED BY THE APPELLANT. WE THUS AGREE WITH THE LD. COUNSEL OF TH E APPELLANT THAT, IF THE AO INTENDED TO USE THESE STATEMENTS TO DRAW ADVERSE INFERENCE A GAINST THE APPELLANT, THEN HE HIMSELF FIRST OF ALL OUGHT TO HAVE EXAMINED THESE E NTRY PROVIDERS TO ASCERTAIN THE CORRECT FACTS AND IT IS ONLY ON SUCH EXAMINATION IF IT WAS REVEALED BY THESE ENTRY OPERATORS AS TO ANY ROLE OF THE APPELLANT OR CONNEC TION WITH THE LOAN CREDITORS AS SUSPECTED BY THE AO, THEN HE SHOULD HAVE COLLECTED MATERIAL TO SUBSTANTIATE THE FACTS AND IN ALL FAIRNESS THEREAFTER GIVE A COPY OF SUCH ADMISSION / ALLEGATION AGAINST THE ASSESSEE OR MATERIAL DISCOVERED IN THE PROCESS OF E NQUIRY AND ALLOWED THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE THE MAKERS OF THE STAT EMENT OR PROVIDE AN OPPORTUNITY TO ASSESSEE TO REBUT THE MATERIAL AGAINST IT AND AFTER HEARING THE EXPLANATION OR DEFENSE PUT UP BY THE APPELLANT, THE AO SHOULD HAVE FAIRLY DRAWN HIS CONCLUSION IN A JUST MANNER OR ELSE, THE ACTION OF AO WILL BE HELD TO BE BAD I N THE EYES OF LAW FOR VIOLATION OF NATURAL JUSTICE . FOR THE REASONS AS AFORESAID THEREFORE, WE HOLD T HAT THE AO WAS UNJUSTIFIED IN MAKING ADDITIONS U/S 68 & 69C OF THE ACT BASED ON THE UNSUBSTANTIATED AND IRRELEVANT STATEMENTS OF SO-CALLED ENTRY OPERAT ORS WHEREIN THERE IS NO IMPUTATION AGAINST IT. 31. APART FROM RELYING ON THE IRRELEVANT STATEMENTS OF THE ENTRY OPERATORS, THE AO ALSO DISCREDITED THE ABILITIES OF THE LOAN CREDITOR S TO ADVANCE LOANS TO THE APPELLANT ON THE GROUND THE FINANCIAL POSITIONS REVEALED BY THE AUDITED ACCOUNTS OF THE RESPECTIVE LOAN CREDITORS DID NOT PROVE THEIR CAPACITY AND ABI LITY TO ADVANCE SUCH LOANS. WE HOWEVER FIND THAT BEFORE REJECTING THE FINANCIAL AB ILITY OF THE LOAN CREDITORS, THE AO DID NOT CARRY OUT THE OBJECTIVE ANALYSIS OF THE FIN ANCIAL STRENGTH AND NET WORTH OF THE LOAN CREDITORS FROM THEIR AUDITED ACCOUNTS. ON SCRU TINY OF AUDITED ACCOUNTS OF EACH LOAN CREDITOR, IT IS NOTED THAT EACH LOAN CREDITOR HAD SUBSTANTIAL RESOURCES OF ITS OWN TO ADVANCE LOANS TO THE APPELLANT. THE COMPARATIVE FIN ANCIAL POSITION OF EACH LOAN CREDITOR AND THE LOANS ADVANCED BY THEM ARE NOTED AS UNDER: IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 43 | P A GE SL NO. NAME OF LOAN CREDITOR GROSS INVESTIBLE FUNDS AMOUNT OF LOAN ADVANCED 1 ARADHANA PLAZA PVT LTD 13,98,93,705 75,00,000 2 SHITAL PLAZA PVT LTD 16,30,01,400 26,00,000 3 HIMADRI ENCLAVE PVT LTD 16,20,11,412 2,27,50,000 4 JAMUNA ENCLAVE PVT LTD 14,23,06,025 79,50,000 5 KASTURI HOME PVT LTD 17,18,06,029 1,74,50,000 6 SREEDEV COMPUTERS PVT LTD 8,99,57,222 - 7 MARIGOLD NIRMAN PVT LTD 14,53,93,893 1,19,00,000 8 DAMODAR NIKETAN PVT LTD 17,95,11,076 1,25,50,000 9 LAVANYA NIRMAN PVT LTD 13,84,84,426 75,00,000 10 TISTA NIRMAN PVT LTD 18,04,86,350 98,50,000 11 NISHU LEASING & FINANCE LTD 24,27,70,290 1,75,00 ,000 12 PRAGYA COMMODITIES PVT LTD 78,71,75,610 20,77,49 0 13 SAMRAT FINVESTORS PVT LTD 78,67,69,597 2,00,00,0 00 14 VICKY FINCON PVT LTD 55,04,33,819 1,00,00,000 15 SHARMA HIRE PURCHASE LTD 81,75,78,705 - 32. HAVING REGARD TO THE ABOVE FINANCIAL POSITION O F THE LOAN CREDITORS, WE NOTE THAT THE LOWER AUTHORITIES DID NOT OBJECTIVELY TAKE INTO CONSIDERATION THE FINANCIAL NET WORTH OF THE CREDITORS AND THE FACTS AND FIGURES AVAILABL E IN THE AUDITED ACCOUNTS. ON EXAMINATION OF THE FINANCIAL STATEMENTS OF THE LOAN CREDITORS, WE FIND THAT EACH LOAN CREDITOR POSSESSED SUFFICIENT INVESTIBLE FUNDS OUT OF WHICH THE CREDITORS HAD ADVANCED THE LOANS TO THE ASSESSEE. WE ALSO FIND THAT IN EAC H CASE, THE LOAN CREDITOR HAD REPORTED SUBSTANTIAL INTEREST INCOME AND THEY ARE INCOME TAXPAYEES . FURTHER, COMPARED WITH THE GROSS INTEREST ACCOUNTED IN THE BOOKS OF THE CREDIT OR, THE AMOUNT OF INTEREST PAID BY THE APPELLANT WAS RELATIVELY LOWER. WE ALSO NOTE THAT T HE INTEREST PAID BY THE APPELLANT WAS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 44 | P A GE ACCOUNTED IN THE BOOKS OF THE LOAN CREDITOR AND BEF ORE PAYMENT OF INTEREST, THE TAX WAS DULY DEDUCTED U/S 194A OF THE ACT. HAVING REGARD TO THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE THEREFORE, WE DO NOT FIND MERIT IN THE CONCLUSION OF THE LOWER AUTHORITIES THAT THE LOAN CREDITORS DID NOT H AVE FINANCIAL CREDENTIALS TO ADVANCE LOANS AND ON THAT GROUND JUSTIFY THE ADDITION U/S 6 8 & 69C OF THE ACT. 33. AS FAR AS THE DECISIONS CITED BY THE LD. CIT(A) IN HIS IMPUGNED APPELLATE ORDER FOR UPHOLDING THE ADDITIONS MADE U/S 68 & 69C OF TH E ACT ARE CONCERNED, WE HAVE EXAMINED THE FACTS INVOLVED IN EACH OF THESE JUDGME NTS AND FOUND THEM TO BE MATERIALLY DIFFERENT FROM THE FACTS INVOLVED IN THE PRESENT CASE, FOR THE FOLLOWING REASONS: (A) AS FAR AS THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS PRECISION FINANCE PVT LTD REPORTED IN 208 ITR 465 I S CONCERNED, IT IS NOTED THAT IN THIS DECIDED CASE, THE INCOME TAX FILE NUMBERS OF THE CR EDITORS PROVIDED BY THE ASSESSEE WERE EITHER FOUND TO BE NON-EXISTENT OR DID NOT TAL LY WITH THE DEPARTMENTS RECORDS. IT IS ON THIS FACT THAT THE HONBLE HIGH COURT HELD TH AT THE APPELLANT WAS UNABLE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND THEREFORE UPHELD THE ADDITION MADE U/S 68 OF THE ACT. IN THE FACTS OF THE PRESENT CASE HOWEVER IT IS NEITHER THE AOS CASE THAT THE LOAN CREDITORS ARE NOT INCOME-TAX ASS ESSEES NOR HAS HE ALLEGED THAT THE DOCUMENTS AND EVIDENCES FURNISHED BY THE APPELLANT IN SUPPORT OF LOAN TRANSACTIONS WERE FALSE OR SUFFERED FROM DEFECTS OR DO NOT TALLY WITH THE DEPARTMENTS RECORDS. ACCORDINGLY THE JUDGMENT CITED BY THE LD. CIT(A) FO R UPHOLDING THE ADDITION IS FOUND TO BE FACTUALLY DISTINGUISHABLE. (B) FROM THE FACTS AS NARRATED BY THE HONBLE CALCU TTA HIGH COURT IN THE CASE OF BHARATI PVT LTD VS CIT REPORTED IN 111 ITR 372, IT IS NOTED THAT THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED RS.20,000/- FROM TWO INDIV IDUALS. APART FROM FURNISHING CONFIRMATORY LETTERS, THE ASSESSEE WAS UNABLE TO FU RNISH ANY OTHER DOCUMENT OR EVIDENCE SUCH AS INCOME TAX FILE NUMBER, BANK ACCOU NT DETAILS, THEIR FINANCIALS ETC. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 45 | P A GE WHICH WOULD IN ANY MANNER SUBSTANTIATE THEIR IDENTI TY. ON THESE FACTS THEREFORE THE HONBLE HIGH COURT UPHELD THE ADDITION. THE FACTS O F THIS CASE HAVE NO SIMILARITY WITH THE APPELLANTS CASE, SO THIS CASE LAW IS NOT APPLI CABLE. (C) IN THE DECISION RENDERED IN THE CASE OF BHOLA S HANKAR COLD STORAGE PVT LTD VS JCIT REPORTED IN 270 ITR 487, THE QUESTION BEFORE T HE HONBLE CALCUTTA HIGH COURT WAS WHETHER, IN ABSENCE OF ANY INDEPENDENT VERIFICA TION, THE SHARE APPLICATION MONIES RECEIVED IN CASH FROM SEVERAL INDIVIDUALS, WHO WERE NOT INCOME-TAX ASSESSEES, BUT CLAIMED TO BE FARMERS, WAS RIGHTLY ASSESSED BY THE AO U/S 68 OF THE ACT. WE NOTE THAT THE FACTS AS WELL AS THE QUESTION INVOLVED IN THIS JUDGMENT ARE OF NO RELEVANCE IN THE APPELLANTS CASE. THE LD. CIT(A)S RELIANCE ON THIS JUDGMENT IS THEREFORE, INCORRECT. (D) WE HAVE ALSO GONE THROUGH THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT LTD REPORTE D IN 342 ITR 169, SOPHIA FINANCE LTD REPORTED IN 205 ITR 98, CIT VS MAF ACAD EMY PVT LTD REPORTED IN 361 ITR 258, CIT VS NR. PORTFOLIO PVT LTD REPORTED IN 2 14 TAXMAN 408, CIT VS NIVEDAN VANIJYA NIYOJAN LTD REPORTED IN 263 ITR 623 AND NAV ODAYA CASTLE PVT LTD REPORTED IN 367 ITR 306. IN OUR OPINION THE RATIO LAID DOWN IN THESE DECISIONS CANNOT BE APPLIED TO THE APPELLANTS CASE BECAUSE THE SUMS IN QUESTION ARE NOT SHARE APPLICATION MONIES. IN THE CASES DECIDED BY THE HONBLE HIGH CO URT, THE PRIVATE LIMITED COMPANIES HAD RECEIVED SHARE APPLICATION MONIES ON PRIVATE PLACEMENT. BY ITS VERY NATURE, THE SHARES OF PRIVATE LIMITED COMPANIES ARE TRANSACTED BETWEEN THE SMALL CIRCLE AND THEREFORE THE COURT HELD THAT IT WAS UNNATURAL FOR THE SHAREHOLDERS WHO CONTINUED TO HAVE STAKE IN THE COMPANY DID NOT COOPERATE WITH THE DEPARTMENT AND PROVIDE THE REQUISITE EVIDENCES AS CALLED FOR. IN THE PRESENT C ASE HOWEVER, AS NOTED EARLIER, THE RELATIONSHIP WAS THAT OF THE DEBTOR-CREDITOR AND WH ICH HAD CEASED TO EXIST WHEN THE LOANS WERE FULLY REPAID. WE THEREFORE DO NOT FIND M ERIT IN THE RELIANCE PLACED BY THE LD. CIT(A) ON THESE DECISIONS FOR UPHOLDING THE ADD ITION. IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 46 | P A GE (E) IN THE JUDGMENTS RENDERED IN THE CASE OF CIT VS MAITHAN INTERNATIONAL REPORTED IN 375 ITR 123 AND CIT VS ACTIVE TRADERS PVT LTD IN 214 ITR 583 RELIED UPON BY LD. CIT(A) , THE QUESTION BEFORE THE HIGH COURT WAS THE VALIDITY OF JURISDICTION EXERCISED BY THE CIT U/S 263 OF THE ACT, WHICH HAS NO BEARING WHATSOEVER TO THE ISSUE INVOLVED IN THE FACTS OF THE PRESENT CASE. SIMILARLY, THE DE CISION RENDERED IN THE CASE OF MIMEC (INDIA) PVT LTD REPORTED IN 353 ITR 284 INVOLVED TH E ISSUE OF VALIDITY OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT HAVING NO LINK WITH T HE FACTS AND ISSUE INVOLVED IN THE INSTANT CASE. 34. IN VIEW OF THE ABOVE FACTS AND THE REASONS DISC USSED IN THE FOREGOING THEREFORE, WE HOLD THAT THE AGGREGATE ADDITIONS OF RS.17,71,27 ,490/- BEING PRINCIPAL LOAN AMOUNT RECEIVED BY THE APPELLANT FROM THE FIFTEEN BODIES C ORPORATE DID NOT CONSTITUTE ITS INCOME CHARGEABLE U/S 68 OF THE ACT. CONSEQUENTLY, FOR THE SAME REASON WE ALSO DO NOT FIND ANY JUSTIFICATION IN SUSTAINING THE DISALL OWANCE OF RS.3,26,18,673/- BEING THE INTEREST ON SUCH LOANS U/S 69C OF THE ACT. ACCORDIN GLY, GROUND NOS. 3 TO 8 OF THE APPEALS FOR AYS 2011-12 TO 2013-14 AND GROUND NOS. 1 TO 7 OF THE APPEALS FOR AYS 2014-15, 2016-17 & 2017-18 THEREFORE STANDS ALLOWED . 35. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 06.11.2020 . SD/- SD/- (J(( (P. M. JAGTAP) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED: 06.11.2020 SB, SR. PS IT(SS)A NOS. 35 TO 40/KOL/2020 M/S MANI SQUARE HOSPITALITY PVT. LTD. A.YS. 2011-12 TO 2014-15, 2016-17 & 2017-18 47 | P A GE COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- M/S MANI SQUARE HOSPITALITY PVT. LTD., 164/1, MANIKTALA MAIN ROAD, E. M. BYE PASS, KOLKATA- 700054 2. RESPONDENT- ACIT, CENTRAL CIRCLE-3(2), KOLKATA 3. THE CIT(A)- , KOLKATA (SENT THROUGH E-MAIL) 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES, KOLKATA