Vedanta Copper Extrusion Pvt.Ltd., Baroda v. The Income tax Officer,Ward-4(4),, Baroda

ITA 2838/AHD/2011 | 2008-2009
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 283820514 RSA 2011
Assessee PAN AACCV2760M
Bench Ahmedabad
Appeal Number ITA 2838/AHD/2011
Duration Of Justice 4 month(s) 12 day(s)
Appellant Vedanta Copper Extrusion Pvt.Ltd., Baroda
Respondent The Income tax Officer,Ward-4(4),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 30-03-2012
Date Of Final Hearing 12-03-2012
Next Hearing Date 12-03-2012
Assessment Year 2008-2009
Appeal Filed On 17-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI A. K. GARODIA ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER I.T.A. NO. 2838/ AHD/2011 (ASSESSMENT YEAR 2008-09) VEDANTA COPPER EXTRUSION P.LTD. 509 GIDC INDL. ESTATE WAGHODIA VADODARA-390001 VS. ITO WARD 4(4) BARODA PAN/GIR NO. : AACCV2760M (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI MUKUND BAKSHI AR RESPONDENT BY: SHRI S K GUPTA CIT DR DATE OF HEARING: 12.03.2012 DATE OF PRONOUNCEMENT: 30.03.2012 O R D E R PER SHRI A. K. GARODIA AM:- THIS IS THE ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A) III BARODA DATED 27.09.2011 FOR THE ASSESSM ENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (A)-II1 BAR ODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING AN ADDITION OF RS.2 46 98 000/- REPRESENTING THE AMOUNT RECEIVED AS UNSECURED LOAN FROM THE DIRECTOR. SHRI DINESH KOTHARI AS UNEXPLAINED CREDITS. THE IMPUGNED ADDITION BEING IN COMPLETE DISREGARD OF THE AVAILABLE MATERIAL AND LAW IS PRAY ED TO BE DELETED. 2. THE LD. CIT(A)-III BARODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE . . LD. A.O. IN DISREG ARDING THE FACT THAT SHRI DINESH KOTHARI IS INDEPENDENTLY ASSESSED TO TAX AND THAT THE AMOUNT OF UNSECURED LOAN ADVANCED TO THE COMPAN Y AMOUNTING TO RS.2 46 98 000/- IS REFLECTED IN THE A CCOUNTS MAINTAINED AND FILED WITH THE INCOME-TAX RETURN. IN THE CIRCUMSTANCES THE ONUS OF EXPLAINING THE CASH CRED IT WAS TO BE I.T.A.NO.2838/AHD/2011 2 HELD AS DISCHARGED AND THAT THE ADDITION MAY KINDLY BE DIRECTED TO BE DELETED. 3. THE LD. CIT(A)-III BARODA HAS ERRED IN LAW AN D IN FACTS IN CONFIRMING THE ACTION OF THE LD. A.O. IN HOLDING TH AT THE APPELLANT OUGHT TO HAVE EXPLAINED THE SOURCE OF SOURCE IN THE CONFIRMATION OF THE AMOUNT OF RS.2 46 98 000/- AS ABOVE. THE APPELL ANT PLEADS THAT SUCH ACTION OF THE LD. CIT(A) IS IN DEFIANCE OF THE ESTABLISHED PRINCIPLES AND THAT THE ADDITION OF RS.2 46 98 000/ - MAY KINDLY BE DIRECTED TO BE DELETED. 4. YOUR APPELLANT CRAVES LIBERTY TO ADD ALTER DE LETE OR SUBSTITUTE ANY OF THE GROUND(S) OF APPEAL HEREIN ABOVE CONTAIN ED. 3. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT DURING THIS YEAR THE ASSESSE E COMPANY HAD CLAIMED TO OBTAIN UNSECURED LOAN OF RS.246.98 LACS FROM SHR I DINESH D. KOTHARI WHO HAPPEN TO BE ONE OF THE DIRECTORS OF THE COMPAN Y. THE A.O. ASKED THE ASSESSEE TO EXPLAIN THE GENUINENESS OF UNSECURE D LOAN. HE FURTHER NOTED THAT WHENEVER THE A.O. ASKED THE ASSESSEE TO EXPLAIN THE GENUINENESS OF LOAN EVERY TIME ONE AND THE SAME R EPLY WAS GIVEN THAT THE LOAN IN QUESTION HAD BEEN GIVEN OUT OF THE OD B ANK ACCOUNT OF SHRI VEER TRADING A PROPRIETORSHIP CONCERN OF THE DIREC TOR SHRI DINESH D. KOTHARI. THE A.O. FURTHER NOTED THAT THE ASSESSEE COMPANY WAS INCORPORATED ON 24.02.2006 AND IN THE SAME FINANCIA L YEAR SHRI DINESH D KOTHARI ALSO STARTED HIS PROPRIETORSHIP CONCERN SHR I VEER TRADING WITH THE INITIAL CAPITAL OF RS.6 10 187/-. HE FURTHER OBSER VED THAT FROM THE PERUSAL OF AUDITED BALANCE SHEET OF SHRI VEER TRADING IT I S OBSERVED THAT ACCUMULATED CAPITAL BALANCE OF SHRI DINESH D KOTHAR I AS ON 31.3.2006 31.3.2007 AND 31.3.2008 WERE RS.10.51 LACS RS.9.6 9 LACS AND RS.13.61 LACS RESPECTIVELY. THE A.O. ALSO REPRODUCED AUDITE D BALANCE SHEET OF SHRI VEER TRADING AS ON 31.3.2008 IN WHICH IT IS SEEN TH AT THE OPENING BALANCE OF CAPITAL ACCOUNT OF SHRI VEER TRADING WAS RS.9.69 LACS AND CLOSING BALANCE WAS RS.13.61 LACS. THERE ARE SOME SECURED LOANS SUCH AS BANK I.T.A.NO.2838/AHD/2011 3 OD ACCOUNT HOUSING LOAN OF ICICI BANK CAR LOAN AN D THERE ARE UNSECURED LOANS ALSO. IN ADDITION TO THIS THERE I S OUTSTANDING CREDITORS OF RS.299.45 LACS. APART FROM VARIOUS CURRENT ASSETS SHOWN IN THE ASSETS SIDE OF THE BALANCE SHEET IT IS ALSO SHOWN IN THE BALANCE SHEET OF SHRI VEER TRADING THAT THERE IS INVESTMENT OF RS.307.46 LACS. THE A.O. ALSO OBSERVED THAT THE ENTIRE INVESTMENT SHOWN IN THE BA LANCE SHEET OF SHRI VEER TRADING IS IN THE ASSESSEE COMPANY BY WAY OF S HARE CAPITAL OR UNSECURED LOAN AND IT IS MAINLY OUT OF CREDITORS SH OWN IN THE BALANCE SHEET OF SHRI VEER TRADING. HE FURTHER OBSERVED TH AT A MAN HAVING MEAGER CAPITAL OF S.13.61 LACS CANNOT EXPECT TO HAV E CREDIT OF RS.299.45 LACS THAT TOO OUT OF TOTAL EXPENSES OF RS.368.77 LA CS COMPRISING OF PURCHASES AND ALL OTHER EXPENSES AS SHOWN IN THE AU DITED P & L ACCOUNT OF SHRI VEER TRADING OF THE PRESENT YEAR. REGARDIN G UNSECURED LOANS IT IS OBSERVED BY HIM THAT THERE ARE UNSECURED LOANS OF R S.76.36 LACS AND THE SAME ARE INTEREST FREE. THE A.O. WAS NOT SATISFIED ABOUT THE GENUINENESS OF THIS LOAN TRANSACTION SHOWN BY THE ASSESSEE COMP ANY AND HE MADE ADDITION OF THIS AMOUNT BY INVOKING THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT 1961. HE HAS ALSO PLACED RELIANCE ON THE JUDGEMENT OF VARIOUS HONBLE HIGH COURTS WHEREIN IT WAS HELD THA T THE ASSESSEE HAD TO ESTABLISH THEE INGREDIENTS I.E. IDENTITY CREDITWOR THINESS OF THE CREDITORS AS WELL AS GENUINENESS OF THE TRANSACTION AND IF THESE THREE INGREDIENTS ARE ESTABLISHED THE ONUS OF THE ASSESSEE IS DISCHARGED AND THE ONUS SHIFTS ON THE DEPARTMENT. HE MADE ADDITION OF THIS AMOUNT BY INVOKING THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT 196 1. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD . CIT(A) BUT WITHOUT SUCCESS AND NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT IS SUBMITTED BY THE LD. A.R. THAT THE JUDGMENT O F HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF TOBY CONSULTANTS (P) LTD. VS CIT AS REPORTED IN 324 ITR 338 (DEL.) FOLLOWED BY LD. CIT( A) IS NOT APPLICABLE I.T.A.NO.2838/AHD/2011 4 IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT . HE PLACED RELIANCE ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF DCIT VS ROHINI BUILDERS AS REPORTED IN 256 ITR 360. HE ALSO PLACED RELIANCE ON THE FOLLOWING OTHER JUDGMENTS OF HONBL E GUJARAT HIGH COURT: A. MURLIDHAR LAHORIMAL VS CIT 280 ITR 512 B. CIT VS AMBUJA GINNING PRESSING & OIL CO. P.LTD. 33 2 ITR 434 C. CIT VS UJHALA DYEING & PRINTING MILLS P. LTD. 328 I TR 437 D. CIT VS PRAGATI COOPERATIVE BANK LTD. 278 ITR 170 E. CIT VS JAGDISH B AGARWAL 45 DTR 197. 5. AS AGAINST THIS LD. D.R. OF THE REVENUE SUPPORT ED THE ORDERS OF AUTHORITIES BELOW. HE ALSO SUBMITTED THAT THERE IS NO CREDITWORTHINESS OF LOAN CREDITOR I.E. SHRI DINESH D KOTHARI DIRECTOR OF THE ASSESSEE COMPANY AND THERE IS NO DISPUTE ABOUT THE DISCHARGE OF ONUS. HE STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENT CITED BY THE LD. A.R. OF THE ASSESSEE. W E FIND THAT LD. CIT(A) HAS MAINLY FOLLOWED THE JUDGMENT OF HONBLE DELHI H IGH COURT RENDERED IN THE CASE OF TOBY CONSULTANTS (P) LTD. (SUPRA). WE FIRST EXAMINE AS TO WHETHER THIS JUDGMENT IS APPLICABLE IN THE PRESENT CASE OR NOT. FROM THE FACTS NOTED IN THE CASE OF TOBY CONSULTANTS (SUPRA) WE FIND THAT IN THAT CASE THE ASSESSEE COMPANY HAS SHOWN UNSECURED LOAN OFRS.267.83 LACS FROM ITS DIRECTOR SHRI P N JAIN AND RS.245.04 LACS FORM MS. URVASHI JAIN. IT IS ALSO NOTED IN THAT CASE THAT LD. CIT(A) RECOR DED THE STATEMENT OF SHRI P N JAIN U/S 131OF THE INCOME TAX ACT 1961 AND THE MAIN CONTENTIONS ARE NOTED BY HONBLE GUJARAT HIGH COURT WHICH INCLUDES THAT IT WAS STATED BY SHRI P N JAIN IN HIS STATEMENT THAT THE AMOUNTS ADV ANCED TO THE ASSESSEE COMPANY DID NOT BELONG TO HIM OR HIS DAUGHTER AND T HAT THE SAME WERE ROUTED TO THEIR ACCOUNT FROM M/S. ASSOCIATED TECHNO PLASTIC PVT. LTD. I.T.A.NO.2838/AHD/2011 5 (ATP IN SHORT). IT WAS ALSO STATED BY MR. JAIN IN THAT CASE THAT SINCE THE MONEY DID NOT BELONG TO HIM THE SAME WAS NOT SHOWN IN THE RETURN OF INCOME FILED BY HIM AND THAT HIS DAUGHTER MS. URVA SHI JAIN IS NOT ASSESSED TO TAX. HE FURTHER STATED THAT THE BANK A CCOUNT WITH IDBI BANK IN HIS NAME OR IN THE NAME OF HIS DAUGHTER WERE EXC LUSIVELY OPERATED BY THE APPELLANT AND THAT SIGNED CHEQUE BOOK OF THESE ACCOUNTS WERE HANDED OVER TO THE STAFF OF ATP. IT WAS ALSO STATED THAT THOUGH SHARES OF THE VALUE OF RS.49 900/- WERE ALLOTTED TO HIM AND HIS DAUGHTE R BUT PHYSICAL DELIVERY OF THE SAME WERE NOT GIVEN TO THEM. IN THE LIGHT O F THESE FACTS IT WAS HELD BY HONBLE DELHI HIGH COURT THAT THE ASSESSEE HAS N OT SATISFIED THE THREE INGREDIENTS OF SECTION 68 OF THE INCOME TAX ACT 19 61. IN THE PRESENT CASE THE FACTS ARE NOT SIMILAR AND HENCE THIS JUD GMENT IS NOT APPLICABLE IN THE PRESENT CASE. IN THE PRESENT CASE THIS IS NOT THE ALLEGATION OF THE A.O. THAT THE SIGNED CHEQUE BOOKS WERE HANDED OVER TO ANY PERSON. IN THE PRESENT CASE THE A.O. IS MAINLY DOUBTING CREDI TORS SHOWN BY SHRI VEER TRADING AS ON 31.03.2008. 7. NOW WE EXAMINE THE APPLICABILITY OF VARIOUS JUD GMENTS CITED BY LD. A.R. FIRST WE EXAMINE THE APPLICABILITY OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF ROHINI BUILDERS 2 56 ITR 360. IN THAT CASE IT WAS HELD BY THE TRIBUNAL THAT THE ASSESSEE HAS PROVED CAPACITY OF CREDITORS BY SHOWING THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY A/C PAYEE CHEQUES DRAWN FROM THE BANK ACCOUNT OF TH E CREDITORS AND THE ASSESSEE IS NOT EXPECTED TO PROVE THE GENUINENESS O F CASH DEPOSITED IN THE BANK ACCOUNT OF THOSE CREDITORS IN THE BANK BECAUSE THE ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF SOURCE AS HELD BY HONB LE BOMBAY HIGH COURT IN THE CASE OF ORIENT DAIRY VS CIT AS REPORTE D IN 49 ITR 743. IN THAT CASE SUMMONS ISSUED TO SOME OF THE CREDITORS COULD NOT BE SERVED AND THEY FAILED TO ATTEND BEFORE THE A.O. BUT STILL IT WAS HELD BY THE TRIBUNAL THAT IT CANNOT BE CONCLUDED THAT LOANS TAK EN BY THE ASSESSEE FROM I.T.A.NO.2838/AHD/2011 6 THOSE CREDITORS ARE NON GENUINE IN VIEW OF THE PRIN CIPLES LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF ORISSA CORPORATIO N AS REPORTED IN 159 ITR 78. IT WAS NOTED BY THE TRIBUNAL THAT IN THAT CASE THAT IT WAS OBSERVED BY THE HONBLE APEX COURT THAT WHEN THE ASSESSEE FU RNISHES NAMES AND ADDRESSES OF THE INDIVIDUAL CREDITORS THEIR GIR NU MBERS THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUES CASE A ND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON COMPLIANCE OF SUMMONS ISSUED BY THE A.O. U/S 131 BY THE ALLEGED CREDITOR WILL NOT B E SUFFICIENT TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE PRE SENT CASE ALSO THE IDENTITY OF LOAN CREDITORS CANNOT BE DOUBTED BECAUS E LOAN CREDITOR IS ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY. HE ALSO EXPLAINED THE SOURCE OF THE CREDIT BY SHOWING THAT THE SAME WAS GIVEN FORM HIS PROPRIETORSHIP CONCERN M/S. SHRI VEER TRADING AND IN THE BALANCE S HEET OF SHRI VEER TRADING THE AMOUNT IS APPEARING IN THE ASSETS SIDE . THE A.O. IS MAINLY DOUBTING THE CREDITORS SHOWN BY SHRI VEER TRADING I N THE BALANCE SHEET AS ON 31.3.2008 WHICH HAS BEEN REPRODUCED BY THE A.O. IN THE ASSESSMENT ORDER. BUT THERE IS NO BASIS TO DOUBT THE EXISTENC E OF THE CREDITORS IN THE BALANCE SHEET OF SHRI VEER TRADING AND THE BASIS OF ALLEGATION OF THE A.O. IS ONLY THIS THAT A MAN HAVING MEAGER CAPITAL OF RS .13.61 LACS CANNOT EXPECT TO HAVE CREDITORS OF RS.299.45 LACS. THIS C AN BE A REASON TO DOUBT THE VERACITY OF CLAIM REGARDING CREDITORS BUT THIS CANNOT BE A CONCLUSIVE EVIDENCE TO REJECT THE CLAIM REGARDING EXISTENCE OF CREDITORS. AS PER THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF ORISS A CORPORATION (SUPRA) IN ORDER TO SUSTAIN THE ADDITION THE REVE NUE HAS TO PURSUE ENQUIRY AND TO ESTABLISH LACK OF CREDITWORTHINESS AND MERE NON COMPLIANCE OF SUMMONS ISSUED BY THE A.O. U/S 131 BY THE ALLEGED C REDITORS WILL NOT BE SUFFICIENT TO DRAW ADVERSE INFERENCE AGAINST THE AS SESSEE. IN THE PRESENT CASE ALSO THE A.O. HAS DRAWN ADVERSE INFERENCE AGA INST THE ASSESSEE BY I.T.A.NO.2838/AHD/2011 7 DOUBTING EXISTENCE OF CREDITORS IN THE HANDS OF SHR I VEER TRADING WITHOUT MAKING ANY FURTHER INQUIRY BY OBTAINING NAMES AND A DDRESSES OF THOSE CREDITORS ETC. THIS JUDGMENT OF THE TRIBUNAL IN TH E CASE OF ROHINI BUILDERS (SUPRA) WAS UPHELD BY THE HONBLE GUJARAT HIGH COURT. IN OUR CONSIDERED OPINION IN THE FACTS OF THE PRESENT CAS E ALSO THIS JUDGMENT IS APPLICABLE BECAUSE IN THE PRESENT CASE ALSO THE A. O. HAS REJECTED THE EXPLANATION OF THE ASSESSEE ON THE BASIS OF MERE SU SPICION AND DOUBT WITHOUT BRINGING ANY CLINCHING EVIDENCE ON RECORD R EGARDING NON GENUINENESS OF CREDITORS SHOWN IN THE BALANCE SHEET OF SHRI VEER TRADING AS ON 31.3.2008. 8. NOW WE EXAMINE THE APPLICABILITY OF THE 2 ND JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS U JHALA DYEING AND PRINTING MILLS PVT. LTD. (SUPRA). AS PER THE FACTS NOTED IN THAT CASE THE A.O. FOUND IN THAT CASE THAT THE ASSESSEE COMPANY H AD RECEIVED RS.50 LACS FROM 5 PARTIES ON ACCOUNT OF SHARE APPLICATION MONEY. THERE WAS NO DUE COMPLIANCE FROM THESE CREDITORS FOR THE NOTICES ISSUED U/S 133(6) OF THE INCOME TAX ACT 1961. BUT AT THE TIME OF ASSES SMENT PROCEEDINGS ALL THESE FIVE PARTIES FILED THEIR CONFIRMATION ALONG W ITH THEIR BANK STATEMENTS. AN ENQUIRY WAS ALSO CONDUCTED BY THE A .O. AND AFTER THE INQUIRY THE A.O. PASSED THE ORDER AND MADE ADDITIO N OF RS.50 LACS U/S 68 OF THE INCOME TAX ACT 1961. THE LD. CIT(A) HAS UP HELD THE ADDITION IN THAT CASE. THE ASSESSEE CARRIED THE MATTER IN FURT HER APPEAL BEFORE THE TRIBUNAL IN THAT CASE. IT IS OBSERVED BY THE HONB LE GUJARAT HIGH COURT ON PAGE 441 THAT ON THIS VERY MATERIAL THE TRIBUNAL H AS COME TO A FINDING THAT THE ASSESSEE HAS CLEARLY DISCHARGED ITS ONUS O F PROVING IDENTITY OF THE PARTIES GENUINENESS OF TRANSACTION AND CREDITWORTH INESS OF THE SHARE APPLICANTS IN SO MUCH SO BY PLACING ON RECORD THEIR RETURN OF INCOME ASSESSMENT ORDER BALANCE SHEET SHOWING INVESTMENT AND HOW THEY RAISED FUNDS HAVING SUBMITTED BEFORE THE AUTHORITIES BELO W. THE TRIBUNAL FOUND I.T.A.NO.2838/AHD/2011 8 IN THAT CASE THAT ADVERSE INFERENCE DRAWN BY THE A. O. IS MISPLACED AS THEIR EXPECTATIONS FORM THE ASSESSEE TRAVELED BEYOND THE INGREDIE4NTS OF ONUS AS PRESCRIBED BY SECTION 68 OF THE ACT. AFTER GIVI NG THIS FACTUAL FINDING THE TRIBUNAL HAS REFERRED TO THE DECISION OF HONBL E GUJARAT HIGH COURT RENDERED IN THE CASE OF CI VS PRAGATI COOPERATIVE B ANK LTD. AS REPORTED IN 278 ITR 170 AND HELD THAT THE A.O. HAS GONE BEYO ND THE SAME ON ASSUMPTION AND ALSO OBSERVED THAT THOUGH ALL ASSESS MENTS WERE FINALIZED THE A.O. HAS DOUBTED CERTAIN SALE OF SHARES MADE BY THESE PARTIES. THE HONBLE GUJARAT HIGH COURT HAS UPHELD THE TRIBUNAL ORDER IN THAT CASE. IN THE PRESENT CASE ALSO WE FIND THAT ADVERSE INFEREN CE DRAWN BY THE A.O. IS MAINLY BECAUSE OF SUSPICION AND HENCE THE A.O. HAS TRAVELED BEYOND THE INGREDIENT OF ONUS AS PRESCRIBED BY SECTION 68 OF T HE INCOME TAX ACT 1961. IN THE PRESENT CASE ALSO IDENTITY OF THE CR EDITORS IS NOT IN DOUBT SINCE HE IS THE DIRECTOR OF THE ASSESSEE COMPANY IT SELF. REGARDING GENUINENESS OF TRANSACTION ALSO WE FIND THAT THIS IS THE CLAIM OF THE ASSESSEE THAT ALL THE MONEY HAS COME BY WAY OF A/C PAYEE CHEQUES FROM THE OD ACCOUNT OF SHRI VEER TRADING AND THIS SUBMIS SION OF THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE AND THEREFORE THE GENUINENESS IS ALSO NOT IN DOUBT. REGARDING THE CREDITWORTHINESS WE FIND THAT ALL THE MONEY RECEIVED BY THE ASSESSEE IS BEING SHOWN BY SHRI VEE R TRADING AS INVESTMENT IN ITS BALANCE SHEET AS ON 31.03.2008 W HICH IS REPRODUCED BY THE A.O. IN ASSESSMENT ORDER. THE A.O.S ACTION IS ON THIS BASIS THAT THE CREDITS SHOWN IN THE BALANCE SHEET OF SHRI VEER TRA DING IS NOT ACCEPTABLE BUT THIS IS MERELY ON THE BASIS OF ASSUMPTION AND P RESUMPTION WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD. THE BASIS ADOPTED BY THE A.O. IS THIS THAT A MAN OF VERY SMALL CAPITAL CANNOT GET SO MUCH CREDIT CAN BE VALID TO CREATE DOUBT IN THE MIND OF THE A.O. FOR M AKING FURTHER INQUIRY BUT THIS IS NOT SUFFICIENT TO HOLD CONCLUSIVELY THA T THE CREDITS SHOWN BY SHRI VEER TRADING WHO IS BOGUS. HENCE IT IS SEEN THAT THE ADDITION IN THE I.T.A.NO.2838/AHD/2011 9 PRESENT CASE WAS MADE BY HE A.O. ON THE BASIS OF H IS DOUBT ONLY ABOUT THE EXISTENCE OF CREDITORS IN THE HANDS OF SHRI VEE R TRADING WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD AND HENCE THE SAME CANNOT BE SUSTAINED. BY RESPECTFULLY FOLLOWING THE ABOVE DIS CUSSED JUDGMENTS OF HONBLE GUJARAT HIGH COURT WE HOLD THAT HIS ADDITI ON MADE BY THE A.O. AND UPHELD BY LD. CIT(A) IS NOT SUSTAINABLE BECAUSE THE ASSESSEE HAS ESTABLISHED ALL THE THREE INGREDIENTS OF SECTION 68 AND THE A.O.S ACTION IS ONLY ON THE BASIS OF DOUBT WITHOUT BRINGING ANY ADV ERSE MATERIAL ON RECORD. 9. REGARDING OTHER JUDGMENTS CITED BY LD. A.R. AND REGARDING VARIOUS JUDGMENTS REFERRED TO BY THE A.O. AND LD. CIT(A) W E FIND THAT NO FURTHER DISCUSSION IS REQUIRED IN VIEW OF OUR FINDING THAT THE ISSUE IN THE PRESENT CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE DISCUSSED JUDGMENTS OF HONBLE GUJARAT HIGH COURT. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE STAND S ALLOWED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD I.T.A.NO.2838/AHD/2011 10 1. DATE OF DICTATION 27/3 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/3/12.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/3 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/3/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER.