ITO-15(3)(3), MUMBAI v. SATYAM ROLLER FLOUR MILLS PVT. LTD., MUMBAI

ITA 373/MUM/2019 | 2013-2014
Pronouncement Date: 17-03-2021 | Result: Dismissed

Appeal Details

RSA Number 37319914 RSA 2019
Assessee PAN AAACS4131R
Bench Mumbai
Appeal Number ITA 373/MUM/2019
Duration Of Justice 2 year(s) 1 month(s) 18 day(s)
Appellant ITO-15(3)(3), MUMBAI
Respondent SATYAM ROLLER FLOUR MILLS PVT. LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 17-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 17-03-2021
Last Hearing Date 08-12-2020
First Hearing Date 08-12-2020
Assessment Year 2013-2014
Appeal Filed On 28-01-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUM BAI BEFORE SHRI SHAMIM YAHYA AM AND SHRI AMARJIT SINGH JM / I.T.A. NO. 373/MUM/2019 ( / ASSESSMENT YEAR: 2013-14) ITO 15(3)(3) R. NO.452 AAYAKAR BHAVAN MUMBAI-400020. / VS. SATYAM ROLLER FLOUR MILLS PVT. LTD. R-12 TTC INDUSTRIAL AREA MIDC NEAR RABALE TELEPHONE EXCHANGE NAVI MUMBAI-400701. ./ ./PAN/GIR NO. : AAACS4131R ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 04/02/2021 /DATE OF PRONOUNCEMENT: 17/03/2021 / O R D E R PER AMARJIT SINGH JM: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 05.10.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) -24 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE A.Y.2013- 14. 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - ' 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ENTIRE DISALLOWANCE ON ACCOUNT OF BOGUS LOAN WITHOUT CONSIDERING THE FINDINGS OF THE DGIT(INV.) DURING T HE SEARCH THAT THE ASSESSEE HAD DELIBERATELY MADE REVENUE BY: SHRI T. S. KHALSA (SR. AR) ASSESSEE BY: SHRI SUCHEK ANCHALIYA ITA NO.373/M/2019 A.Y.2013-14 2 ACCOMMODATION ENTRY IN THE PROFIT & LOSS ACCOUNT AN D BALANCE SHEET. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN PRESUMING THAT LOANS H AVE BEEN RECEIVED FROM UNKNOWN SOURCES BY THE ASSESSEE AND TAKING IT INTO CONSIDERATION FOR COMPUTING PROFIT A ND GAINS OF THE BUSINESS FOR THE PURPOSE OF SECTION 28 OF TH E ACT? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE BOGUS LOA N OF THE ASSESSEE WITHOUT TAKING THE RATIO OF JUDGEMENT OF T HE HON'BLE SUPREME COURT IN CASE OF M/S NAVODAYA CASTL E (P) LTD. VS CIT(2015) 56 TAXMANN.COM18(18)230 TAXMANN 268(SC) WHERE IN IT WAS HELD THAT CERTIFICATE OF INCORPORATION PAN ETC WERE NOT SUFFICIENT FOR THE PURPOSE OF IDENTIFICATION OF SUBSCRIBER COMPANY WHEN THERE WAS MATERIAL TO SHOW THE SUBSCRIBER WAS A PAPER COMPANY AND NOT A GENUINE COMPANY. 4. THE APPLICANT CRAVES LEAVE TO ADD AMEND OR ALTE R ANY GROUNDS OR ADD NEW GROUND WHICH MAY BE NECESSARY . ' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.09.2013 DECLARING TOTAL INCOME TO THE TUNE OF RS.17 76 890/- FOR THE A.Y.2013-14. THEREAFTER THE CASE WAS SELEC TED FOR SCRUTINY AND NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE COMPANY IS ENGAGED IN THE BU SINESS OF MANUFACTURING OF WHEAT PRODUCTS INTO MAIDA RAVA S UJI ATTA ETC. A SEARCH AND SEIZURE ACTION WAS CONDUCTED IN THE CASE OF SHR I BHANWARLAL JAIN GROUP ON 03.10.2013 BY DGIT(INV.) MUMBAI. THE INVESTIGAT ION WING MUMBAI COVERED CERTAIN NAME SAKE/DUMMY DIRECTORS/PARTNERS/ PROPRIETORS OF VARIOUS CONCERNS THAT WERE BEING ACTUALLY MANAGED CONTROLL ED AND OPERATED BY SHRI BHANWARLAL JAIN GROUP U/S 132 AND 131 OF THE I. T. ACT 1961. DURING THE COURSE OF SEARCH IT WAS FOUND THAT ALL THE NAME SA KE/DUMMY ITA NO.373/M/2019 A.Y.2013-14 3 DIRECTORS/PARTNERS/PROPRIETORS OF VARIOUS CONCERNS BELONG TO THE NATIVE PLACE OF SHRI BHANWARLAL JAIN GROUP IN RAJASTHAN AND HAVE EITHER KNOWN SHRI BHANWARLAL JAIN GROUP PERSONALLY OR THROUGH THEIR F AMILIES. AN INFORMATION WAS RECEIVED FROM THE DGIT(INV.) MUMBAI THAT THE A SSESSEE HAS TAKEN THE ACCOMMODATION ENTRIES OF UNSECURED LOANS FROM THE F OLLOWING PARTIES WHICH IS HEREBY REPRODUCED AS UNDER.: S. NO. NAME OF THE HAWALA PARTIES AMOUNT 1 LOOK AT ME RETALL PVT. LTD. 9073233 2 SANKHALA EXPORTS PVT. LTD. 9073233 3 KOTHARI & CO. 2569164 20715630 THE AO RAISED THE SAID ADDITION. ON PERUSAL OF THE COMPUTATION OF INCOME IT WAS SEEN THAT THE ASSESSEE HAS SHOWN IN SUM OF R S.30 800/- AS DIVIDEND INCOME AND CLAIMED THE SAME AS EXEMPT U/S 10 OF THE I. T. ACT. THEREAFTER THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED IN SU M OF RS.2 24 95 760/-. FEELING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEF ORE THE CIT(APPEALS) WHO ALLOWED THE APPEAL OF THE ASSESSEE THEREFORE THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LD. REP RESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. BEFORE GOING FU RTHER WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RE CORD.: - 5. I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS MATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. GROUND NO. 1 IS RAISED AGAINST THE ADDITION MADE OF RS. 2 07 15 630/- UNEXPLAINED CASH CREDIT U/S 68 OF I T ACT 1961. ITA NO.373/M/2019 A.Y.2013-14 4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AP PELLANT HAS FILED SEVERAL DETAILS REQUIRED THE PROVE THE IDENTI TY AND CREDITWORTHINESS OF THE PERSONS AND THE GENUINENES S OF THE TRANSACTION IN THE: FORM OF PAN CARDS IT RETURN CO PIES BANK STATEMENTS CONFIRMATIONS AFFIDAVITS AUDITED ACCO UNTS ETC. AS IS EVIDENT FROM THE RECORDS AND CLAIMED THAT IT HAS DI SCHARGED ITS ONUS. THE LD.AR HAS FURTHER ARGUED THAT THE TRANSAC TION HAS TAKEN PLACE THROUGH BANKING CHANNELS THEREFORE THE GENUI NENESS OF LOAN NEED NOT BE DOUBTED. THE EXCESSIVE RELIANCE ON THE STATEMENTS GIVEN BY A THIRD-PARTY I.E. KEY PERSONS OF BHANWARL AL JAIN GROUP WHO THE APPELLANT DOES NOT KNOW IS NOT PROPER EVEN WITHOUT GIVING THE APPELLANT A CHANCE TO CROSS-EXAMINE THEM WHO HA VE GIVEN SUCH ADVERSE STATEMENTS. HE FURTHER ARGUED THAT THE ADDI TION WAS MADE WITHOUT PROVIDING THE APPELLANT THE CORROBORATIVE E VIDENCE IN THE POSSESSION OF THE AO TO PROVE THAT THE APPELLANT HA S PAID CASH AS ALLEGED AGAINST THE RECEIPT OF CHEQUE. ON THE OTHE R HAND THE AO HAS BELIEVED THAT THESE DOCUMENTS SUBMITTED BEFORE HIM WERE ENGINEERED TO EXPLAIN BOGUS LOANS SINCE THOSE WHO I NVOLVED IN BOGUS TRANSACTIONS IN AN ORGANISED WAY ARE METICULO US IN ARRANGING THESE MAKE-BELIEVE DOCUMENTS. HE FURTHER BELIEVED THAT THE OFFICE BEARERS/KEY PERSONS OF BHANWARLAL JAIN G ROUP HAVE GIVEN CATEGORICAL AND UNEQUIVOCAL STATEMENTS STATIN G THAT THEY HAVE INVOLVED ONLY IN BOGUS TRANSACTIONS BY GIVING LOAN BY CHEQUE FOR EXCHANGE OF CASH THROUGH THE COMPANIES/FIRMS FL OATED BY THEM. 5.1.1 NO DOUBT THAT THERE IS SOME FORCE IN THE ARGU MENTS OF THE AQ- FIRSTLY THE STATEMENTS WERE GIVEN BY THE VERY AUTH ORS OF THE FICTITIOUS FIRMS/COMPANIES UNDER OATH UNDER SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH AND SEIZURE OPERATI ONS AND IN SUBSEQUENT STATEMENTS ADMITTING THE ACTIVITY OF GI VING ACCOMMODATION ENTRIES FOR PURCHASES LOANS AND INVE STMENT AND SHARE APPLICATION MONEY TO VARIOUS PARTIES SEEKING SUCH ACCOMMODATION BY FOLLOWING UNETHICAL PRACTICES TO D EFRAUD THE REVENUE. SECONDLY THE APPELLANT IS ONE OF SUCH COM PANIES WHO HAVE TAKEN SUCH ACCOMMODATION ENTRIES SINCE SOME OF THE CONCERNS FLOATED BY ENTRY OPERATORS (ABOUT 70 SUCH CONCERN) ARE VERY MUCH APPEARING IN THE BOOKS OF THE APPELLANT C OMPASS ITA NO.373/M/2019 A.Y.2013-14 5 UNETHICAL PRACTICES ARE NOT UNCOMMON IN THE BUSINES S COMMUNITY AS IS EVIDENT FROM A SERIES OF OPERATIONS CONDUCTE D BY INVESTIGATING AGENCIES REVEALING SIMILAR PRACTICES. 5.1.2 AS FAR AS THE QUESTION OF VALIDITY OF THE TRA NSACTIONS ARE CONCERNED EVEN IF SOME OF THE TRANSACTIONS ENTERED INTO BY THE ABOVE PARTIES ARE FOUND TO BE NET GENUINE IT DOES NOT LEAD TO THE CONCLUSION THAT ALL THE TRANSACTIONS ENTERED INTO BY THE SAID PARTIES WERE BOGUS OR NON-GENUINE INCLUDING THE TRA NSACTION RELATED TO THE APPELLANT. THE INFORMATION RECEIVED BY THE LD. AO COULD BE SAID TO BE SUFFICIENT TO RAISE A DOUBT ABO UT GENUINENESS OF THE TRANSACTIONS. HOWEVER FURTHER ENQUIRY WAS REQU IRED TO BE CONDUCTED TO FORM AN OPINION OR BELIEF AS TO THE TR ANSACTIONS BEING NON-GENUINE. A TRANSACTION WHICH IS SUPPORTED BY DO CUMENTARY EVIDENCES COULD NOT BE TREATED AS BOGUS OR NON-GENU INE MERELY ON THE BASIS OF DOUBTS RAISED REGARDING THE SAME. THE LD. AO DID ISSUE NOTICES U/S 133(6) OF THE ACT TO THE LOAN PAR TIES ALL OF WHOM DULY REPLIED AND CONFIRMED THE GENUINENESS OF THE T RANSACTIONS WITH THE APPELLANT THERE IS NO FURTHER EVIDENCE BR OUGHT IN THE ASSESSMENT ORDER TO PROVE THE ABOVE CONCLUSION DRAW N BY THE LD. AO. THE ASSESSMENT PROCEEDINGS WERE WIDE OPEN AND T HE LD.AO COULD HAVE CARRIED OUT INDEPENDENT INVESTIGATION TO PROVE HIS ARGUMENT REGARDING THE TRANSACTIONS BEING NON-GENUI NE. NO SUCH INVESTIGATION HAS BEEN CARRIED OUT BY THE LD.AO. TH E OUTCOME OF INVESTIGATION CARRIED OUT IN THE CASE OF BHANWARIAL JAIN AND THE CONCLUSIONS DRAWN THEREIN CANNOT BE APPLIED IPSO FA CTO AND IN A SWEEPING MANNER TO ALL OTHER CASES WHO HAVE ENTERED INTO TRANSACTIONS DURING THAT PERIOD WITHOUT MAKING ANY ENQUIRY OR INVESTIGATION TO EXAMINE THE GENUINENESS OF THE PAR TICULAR TRANSACTION WHICH IS UNDER SUSPICION. SIMPLY RELYIN G ON THE REPORT OF THE INVESTIGATION WING MUMBAI AND STATEMENTS RE CORDED DURING THE COURSE OF SEARCHES IN THE BHANWARLAL JAIN GROUP THE LD. AO CANNOT CONCLUDE THAT ALL TRANSACTIONS ARE BOGUS OR HAVE NO CREDENTIAL VALUE. 5.1.3 IN THE INSTANT CASE AS SEEN FROM THE DETAILS FILED BEFORE THE AO A SET OF WHICH WERE ALSO FILED BEFORE ME DO NO T FIND ANY INCONSISTENCY OR INCOHERENCE IN THE RECEIPT OF LOAN S FROM THE ITA NO.373/M/2019 A.Y.2013-14 6 PARTIES. FIRSTLY AS REGARDS THE TRANSACTION THE S AME HAS ROUTED THROUGH THE BANKING CHANNELS A SOURCE CANNOT BE DOU BTED. SECONDLY AS WAS HELD IN SEVER WHATEVER MAYBE THE STRENGTH OF PRESUMPTION IT CANNOT REPLACE EVIDENCE. EVEN THOUGH THE TRANSACTION IS FROM A TAINTED GROUP THE AO HAS NOT GATHERED ANY ADDITIONAL/INDEPENDENT EVIDENCE TO SHOW THAT THE TR ANSACTION WITH THE APPELLANT COMPANY WAS SHAM FICTITIOUS OR ARTIF ICIAL EXCEPT BELIEVING THE STATEMENTS GIVEN BY THE ENTRY OPERATO RS. HE HAS FAILED TO GATHER EVIDENCE TO SHOW THAT THE UNACCOUNTED CAS H OF THE APPELLANT HAD CHANGED HANDS SUBSEQUENTLY REPLACING THE CHEQUE PAYMENTS. THIRDLY HE HAS ALSO NOT ANSWERED SEVERAL VALID POINTS RAISED BY THE APPELLANT NOR PROVED HOW THE DETAILS LIKE PAN THE IT RETURNS CONFIRMATION LETTERS BANK STATEMENTS OF T HE CREDITORS AUDITED BALANCE SHEET OF THE CREDITORS CANNOT BE TA KEN NOTE OF. FOURTHLY THE ITAT MUMBAI IN THE CASE OF ANANT SHEL TERS P LTD. (2012) 20 TAXMANN.COM 153 HAS LAID DOWN CERTAIN PRI NCIPLES WITH REGARD TO SECTION 68 WHICH THE AO IS BOUND TO FOLLO W. THEY ARE REPRODUCED AS UNDER (PARA-7) SECTION 68 CAN BE INVO KED WHEN FOLLOWING THREE CONDITIONS ARE SATISFIED (A) WHEN T HERE IS CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY THE ASSESSEE (B) SUCH CREDIT HAS TO BE A SUM OF MONEY DURING THE PREVIOUS YEAR ( C) EITHER THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDITS FOUND IN THE BOOKS OR THE EXPLANATION OFFER ED BY THE ASSESSEE IN THE OPINION OF THE AO IS NOT SATISFAC TORY. IT IS ONLY THEN THAT THE SUM SO CREDITED MAY BE CHARGED TO INC OME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. (I) T HE EXPRESSION THE ASSESSEE OFFERS NE EXPLANATION MEANS THE ASSESSEE O FFERS NO PROPER REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS TH E SUMS FOUND CREDITED IN THE BOOKS MAINTAINED BY THE ASSESSEE. T HE OPINION OF THE AO FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFACTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABL E ON THE RECORD. THE OPINION OF THE AO LS REQUIRED TO BE FOR MED OBJECTIVELY WITH REFERENCE TO THE MATERIAL ON RECORD FILE ONCE THE EXPLANATION OF THE ASSESSEE IS FOUND UNBELIEVABLE OR FALSE THE 40 IS NOT REQUIRED TO BRING POSITIVE EVIDENCE ON RECORD TO TREAT AMOUN T IN WESTON AS INCOME OF THE ASSESSEE WHILE CONSIDERING THE EXPLA NATION OF THE ITA NO.373/M/2019 A.Y.2013-14 7 ASSESSEE THE AO HAS TO ACT REASONABLY APPLICATION OF MIND APPLICATION OF MIND IS SINE QUA NON FOR FORMING TH E OPINION. (III) PHRASE APPEARING IN THE SECTION - NATURE AND SOURCES OF SUCH CREDITS - SHOULD BE UNDERSTOOD IN RIGHT PERSPECTIVE SO THAT GENUINENESS OF THE TRANSACTION CAN BE DECIDED ON ME RITS AND NOT ON PREJUDICES. COURTS ARE OF THE FIRM VIEW THAT THE EV IDENCE PRODUCED BY THE ASSESSEE CANNOT BE BRUSHED ASIDE IN A CAUSAL MANNER. ASSESSEE CANNOT BE ASKED TO PROVE IMPOSSIBLE. EXPLA NATION ABOUT SOURCE OF SOURCE OR ORIGINS OF THE ORIGIN CANNO T AND SHOULD NOT BE CALLED FOR WHILE MAKING INQUIRY UNDER SECTION. (IV) IN THE MATTERS RELATED TO SECTION 68 BURDEN OF PROOF CANNOT BE DISCHARGED TO THE HILT -SUCH MATTERS ARE DECIDED ON THE PARTICULAR FACTS OF THE CASE AS WELL AS ON THE BASIS OF PREPO NDERANCE OF PROBABILITIES. CREDIBILITY OF THE EXPLANATION NOT THE MATERIALITY OF EVIDENCES IS THE BASIS FOR DECIDING THE CASES FALL ING UNDER SECTION 68. (V) CONFIRMATORY LETTERS OR A/C PAYEE CHEQUES DO NO T PROVE THAT THE AMOUNT IN QUESTION IS PROPERLY EXPLAINED FOR THE PU RPOSE OF SECTION 68. ASSESSEE HAS TO ESTABLISH IDENTITY AND CREDITWO RTHINESS OF THE CREDITOR AS WELL AS THE GENUINENESS OF THE TRANSACT ION. ALL THE THREE INGREDIENTS ARE CUMULATIVE AND NOT EXCLUSIVE. (VI) IN MATTERS REGARDING CASH CREDIT THE ONUS OF P ROOF IS NOT A STATIC ONE. AS PER THE PROVISIONS OF THE SECTION TH E INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE. AMOUNT APPEARING IN THE BOOKS OF A/CS. OF THE ASSESSEE IS CONSIDERED A PROOF AGAINST HIM. HE CAN PROVE THE IDENTITY OF THE CREDITORS BY EITHER FURNISHING THEI R PANS OR ASSESSMENT ORDERS. SIMILARLY GENUINENESS OF THE TR ANSACTION CAN BE PROVED BY SHOWING THAT THE MONEY WAS RECEIVED BY AN ACCOUNT PAYEE CHEQUE OR BY DRAFT. CREDIT WORTHINESS OF THE LENDER CAN BE ESTABLISHED BY ATTENDING CIRCUMSTANCES. ONCE THE AS SESSEE PRODUCES EVIDENCES ABOUT IDENTITY GENUINENESS AND CREDIT WORTHINESS OF THE LENDER ONUS OF PROOF SHIFTS TO T HE REVENUE. ITA NO.373/M/2019 A.Y.2013-14 8 FIFTHLY THE HONORABLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PRIVATE LIMITED (2008) 216 CTR 195 (SC) H AS STATED THAT THE AO IS AT LIBERTY TO BRING TO TAX THE AMOUNTS IN THEIR RESPECTIVE HANDS OF THE CREDITORS IF THEIR IDENTITY GENUINENE SS AND CREDITWORTHINESS IS NOT PROVED. THE AO SHOULD HAVE MADE EFFORTS TO ASSESS THE AMOUNTS IN THE HANDS OF THE CREDITORS GY LEAST ON PROTECTIVE BASIS. LASTLY EVEN IF THE CREDITWORTHIN ESS OF THE ADDITIONS IN THE HAND OF THE ASSESSES U/A 68 UNLESS IT IS PROVED THAT IT IS THE UNEXPLAINED MONEY OF THE ASSESSEE WHICH H AS BEEN INTRODUCED IN ITS BOOKS OF ACCOUNT IN THE NAMES OF BOGUS/NON- EXISTENT ENTITIES. IN THE INSTANT CASE THE AO HAS N OT MADE ANY DENT IN THESE LINES. ON THE OTHER HAND THE APPELLANT HAS FILED THE FOLLOWING DETAILS IN THE CASE OF ALL THE THREE CRED ITORS TO ROVE THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE C REDITORS. I) CONFIRMATION OF LEDGER II) COPY OF LOAN CONFIRMATION III) COPY OF ACKNOWLEDGEMENT OF ITR FOR A.Y. 2013-1 4 IV) COPY OF FINANCIALS STATEMENTS FOR A.Y. 2013-14 V) COPY EF BANK STATEMENT VI) COPY OF PAN VI) COPY OF AFFIDAVIT FURTHER THE HONOURABLE INCOM E TAX APPELLATE TRIBUNAL MUMBAI HAS IN NUMEROUS CASES D ECIDED ON THE ISSUE AT HAND BEARING IDENTICAL FACTS AS IN T HE PRESENT CASE. I FIND THE ISSUE HAS BEEN ADJUDICATED AS UNDER: DCIT 25(1) VS. MS. YRV INTERNATIONAL ITA. NO.1414/M UM/2017 12. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORD. WE NOTICE THAT THE AO HAS MADE THE IMPUGNED ADDITION U /S 68 OF THE ACT. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT THE INITIAL ONUS TO PROVE THE GENUINENESS OF THE CASH CREDIT IS PLACED UPON THE ASSESSEE AND IN ORDER TO DISCHARGE THE INITIAL ONUS THE ASSESSEE IS REQUIRED TO PROVE THREE MAIN INGREDIENTS VIZ. THE IDENTITY OF THE CREDITOR THE CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS ITA NO.373/M/2019 A.Y.2013-14 9 OF TRANSACTIONS ONCE THE ASSESSEE DISCHARGES THE I NITIAL ANUS THEN THE ONUS TO DISPROVE THE SAME IS SHIFTED UPON THE S HOULDERS OF THE ASSESSING OFFICER. 13. IN THE INSTANT CASE THE ASSESSEE HAS TAKEN LOA NS FROM M/S A2 JEWELS AND M/S DAKSH DIAMONDS ALL THE LOAN TRANSAC TIONS HAVE TAKEN PLACE THROUGH THE BANKING CHANNELS AND HENCE THE GENUINENESS OF TRANSACTIONS IS NOT IN DOUBT BOTH T HE ABOVE SAID CREDITORS ARE ASSESSED TO INCOME TAX AND FURTHER T HE NOTICES ISSUED BY THE AO U/S 133(6) OF THE ACT WERE DULY SERVED UP ON THEM AND FURTHER THEY HAVE ALSO REPLIED TA THE SAME. HENCE T HE IDENTITY OF THE CREDITORS IS ALSO STAND PROVED. IN ORDER TO PROVE T HE CREDITWORTHINESS TH ASSESSEE HAS FURNISHED THE FI NANCIAL STATEMENTS OF THESE TWO EDITORS. CONTENTION OF THE REVENUE IS THAT THE CAPITAL BALANCE AND THE DISCLOSED BY THEM ARE L OW. ACCORDINGLY IT WAS CONTENDED THAT THESE TWO CONCERNS COULD NOT HAVE GIVEN SUCH KIND OF HUGE AMOUNTS AS LOAN. HOWEVER IN OUR VIEW BOTH OF THEM ARE NOT DETERMINATIVE FACTORS. WHAT IS REQUIRE D TO BE SEEN IS WHETHER THE CREDITOR COULD PROVE THE AVAILABILITY O F FUNDS WITH IT OR NOT. A PERUSAL OF THE FINANCIAL STATEMENTS FURNISHE D BY BOTH THE CREDITORS WOULD SHOW THAT THE LOANS GIVEN TO THE AS SESSEE HAVE BEEN DULY DISCLOSED AND FURTHER THESE CREDITORS WER E HAVING SOURCES BY WAY OF LOANS TAKEN BY THEM FROM OTHERS. FURTHER BOTH THE CONCERNS WERE CARRYING OF BUSINESS HAVING HUGE TURNOVER. HENCE THE MOVEMENT OF FUNDS IN THEIR ACCOUNTS AND A LSO THE AVAILABILITY OF FUNDS WITH THEM CANNOT BE DOUBTED. HENCE WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN HOL DING THAT THE CREDITWORTHINESS OF THESE TWO CREDITORS ALSO STAND PROVED. 14. WE ALSO NOTICE THAT THE ASSESSING OFFICER HAS A LSO MADE INDEPENDENT ENQUIRY WITH THESE TWO CREDITORS BY ISS UING NOTICES U/S 133(6) OF THE ACT AND IN RESPONSE TO THE SAME BOTH THESE CREDITORS HAVE CONFIRMED THE LOAN TRANSACTIONS. WE ALSO NOTIC E THAT THE AO DID NOT FIND FAULT WITH THE FINANCIAL STATEMENTS OF THESE TWO CREDITORS. WE ALSO NOTICE THAT THE AO HAS PROCEEDED TO MAKE THE ADDITION U/S 68 OF THE ACT ONLY FOR THE REASON THAT SHRI RITESH SIROYAHAS ADMITTED THAT HIS GROUP HAS PROVIDED BOGU S SALES BILLS. AS OBSERVED BY LD CIT(A) SHRI RITESH SIROYA HAS NO T IMPLICATED ITA NO.373/M/2019 A.Y.2013-14 10 THE ASSESSEE NOR DID NOT HE MENTION THAT THE LOANS GIVEN TO THE ASSESSEE WERE BOGUS. ON THE CONTRARY THE VERY SAME SHRI RITESH SIROYA HAS FURNISHED AFFIDAVITS DURING THE COURSE OF ASSESSMENT PROCEEDINGS CONFIRMING THE LOAN TRANSACTIONS. WE N OTICE THAT THE AO COULD NOT PROVE THAT THESE FINANCIAL STATEMENTS CONFIRMATION LETTERS AND AFFIDAVITS FILED BY SHRI RITESH SIROYA ARE WRONG. THUS THE LD CIT(A) HAS RIGHTLY POINTED OUT THAT THE AO H AS IGNORED THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. TH US THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS PLACED UPO N U/S 68 OF THE ACT. ON THE CONTRARY IT IS SEEN THAT THE AO HAS FA ILED TO DISCHARGE THE ONUS SHIFTED UPON ITS SHOULDERS. 15. WE NOTICE THAT THE LD CIT(A) HAS FOLLOWED THE P RINCIPLES LAID DOWN IN VARIOUS CASE LAWS EXTRACTED ABOVE. BEFORE U S NONE OF THE CASE LAWS WAG CONTROVERTED. THE FOREGOING DISCUSSIO NS ALSO SHOW THAT THE AO HAS BRUSHED ASIDE VARIOUS DOCUMENTS FUR NISHED BY THE ASSESSEE AND PROCEEDING TO MAKE THE ADDITION ONLY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING AN D THE STATEMENT GIVEN BY SHRI RITESH SIROYA. THE LD CIT(A) HAS RIGH TLY POINTED OUT THESE FACTS END ACOORDINGLY CONCLUDED THAT THE ADDI TION MACE BY THE AO WAS NOT JUSTIFIED. IN VIEW OF THE FOREGOING DISCUSSIONS WE ARE OF THE VIEW THAT THE DECISION RENDERED BY LD CI T(A) DOES NOT CALL FOR ANY INTERFERENCE SINCE THE FIRST APPELLAT E AUTHORITY HAS RENDERED HIS DECISION BY CONSIDERING THE LEGAL PRIN CIPLES ENUNCIATED IN VARIOUS CASE LAWS RELIED UPON BY HIM AND FURTHER APPLYING THE SAME TO THE FACTS OF THE PRESENT CASE. THUS WE NOTICE THAT THE LD CIT(A) HAS REACHED HIS DECISION IN @ SY STEMATIC MANNER. ACCORDINGLY WE AFFIRM THE DECISION RENDERED BY LD CIT(A). 16. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT THE ASSESSEE AN INDIVIDUAL ENGAGED IN THE BUSINESS OF B UILDER AND DEVELOPER DECLARED LOSS OF RS. 1 29 68 736 IN HIS R ETURN ON ITA NO.373/M/2019 A.Y.2013-14 11 15.09.2009. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 30.11.2011 ASSESSING THE LOSS AT RS. 1 13 73 44 8. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT (A) WHEREIN VIDE ORDER DATED 03.02.2014 PART RELIEF WAS GRANTE D TO THE ASSESSEE. LATER ON THE CASE OF THE ASSESSEE WAS RE -OPENED U/S 147 ON THE BASIS OF INFORMATION THAT THE ASSESSEE HAS R ECEIVED ACCOMMODATION ENTRY OF UNSECURED LOAN FROM M/S. LAX MI TRADING COMPANY M/S. MOULI GEMS M/S. MINAL GEMS M/S. NAM AN EXPORTS AND M/S. PRIME STAR PERTAINING TO BHAWARLA L JAIN GROUP. AS PER THE ASSESSEE DURING THE ASSESSMENT PROCEEDI NGS DOCUMENTARY EVIDENCES PERTAINING TO LOAN FROM AFORE MENTIONED PARTIES LIKE CONFIRMATION BANK STATEMENT AND ACKNO WLEDGMENT OF RETURN OF INCOME OF LOAN BANK STATEMENT OF THE ASS ESSEE REFLECTING THE AMOUNTS AND GENUINENESS OF TRANSACTIONS WERE FI LED. HOWEVER THE LEAMED ASSESSING OFFICER TREATED THE LOAN AS UN EXPLAINED CASH CREDIT ON THE PLEA THAT THE ASSESSEE COULD NOT PROD UCE THE PARTIES. THEREAFTER THE LEARNED ASSESSING OFFICER COMPUTED THE PEAK OF UNSECURE LOAN AMOUNTING TO RS. 1 91 00 000/- AND MA DE ADDITION OF RS. 40 00 000/- U/S 68 OF THE ACT. ON APPEAL BE FORE THE LEARNED CIT(A) THE ADDITION SO MADE WAS DIRECTED TO BE DEL ETED IN APPEAL BEFORE THE TRIBUNAL. IF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER LE ADING TO THE ADDITION AND THE CONCLUSION ARRIVED AT IN THE IMPUG NED ORDER IF KEPT IN JUXTAPOSITION AND ANALYSED THERE IS A FACT UAL FINDING IN PARA-5.3 THAT THE ASSESSEE DISCHARGED THE PRIMARY O NUS AS THE LENDER HAD RESPONDED TO NOTICES ISSUED U/S 133(6) O F THE ACT CONFIRMING THE TRANSACTION. THE LEARNED ASSESSING O FFICER DID NOT CONTROVERT THE CLAIM OF THE ASSESSEE. THE LOANS WER E TAKEN THROUGH BANKING CHANNEL AND THE RECEIPT OF TAKING THE LOAN HAS BEEN DULY EXAMINED IN PARA-5.3 (PAGE-13) OF THE IMPUGNED ORDE R. THE LOANS WERE DULY REFLECTED IN THE LOANS AND ADVANCES COLUM N IN THE BALANCE SHEET AND THERE IS FURTHER FACTUAL RECORDIN G THAT THERE WAS NEITHER ANY CASH DEPOSIT NOR ANY WITHDRAWAL IN ANY BANK ACCOUNT CASTIGATING THE SAME AS ACCOMMODATION ENTRIES. IT I S FURTHER NOTED THAT THE ASSESSEE DULY PAID THE INTEREST ON THE LOA N AMOUNT AND DEDUCTED. COPY OF FORM NO.16A WAS ALSO FILED AND TH E LEARNED ITA NO.373/M/2019 A.Y.2013-14 12 ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVI DENCE / REASON TO DISBELIEVE THE EVIDENCE FILED BY THE ASSESSEE. | AM SATISFIED WITH THE REASONING OF THE LEARNED CIT(A) THAT THE ADDITI ON WAS MERELY MADE ON THE BASIS OF PRESUMPTION THAT ALL THE FIVE CONCERNS FROM WHOM LOAN WAS TAKEN WERE MANAGED AND CONTROLLED BY SHRI BHAWARLAL JAIN. THE STATEMENT WAS ALSO RECORDED WHE REIN THERE IS NO MENTION THAT ANY ACCOMMODATION ENTRY WAS OBTAINE D. RATHER THE CASE OF THE ASSESSEE IS FORTIFIED BY THE REPLY TO QUESTION NO.40 AND 41 WHEREIN IT HAS BEEN TENDERED THAT THE LOAN W AS ADVANCED AND INTEREST @ 9% P.A. WAS CHARGED. THE NAME OF THE ASSESSEE IS NOWHERE MENTIONED IN THE LIST OF SUSPICIOUS DEALER / PERSON. THUS | FIND NO INFIRMITY IN THE CONCLUSION OF THE LEARNED CIT(A) RESULTING INTO DISMISSAL OF THE IMPUGNED GROUND RAISED BY THE REVENUE. 5. THE NEXT GROUND PERTAINED TO DELETION OF ADDITIO N OF RS. 5 78 278 MADE ON ACCOUNT OF INTEREST EXPENDITURE O N ALLEGED BOGUS LOANS. THE LEARNED D.R. DEFENDED THE ADDITION WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE INVITED MY ATTENTI ON TO THE FINDING RECORDED IN PARA-6.1 OF THE IMPUGNED ORDER. ON A PE RUSAL OF RECORD AND THE ASSERTIONS MADE BY THE RESPECTIVE CO UNSELS. THERE IS A FINDING IN THE IMPUGNED ORDER THAT THE ASSESSE E DULY PRODUCED THE BANK STATEMENT FROM WHERE INTERESTS WERE PAID A LSO COPIES OF FORM NO.16A EVIDENCING THE TDS MADE AND DEPOSITED I NTO THE GOVERNMENT ACCOUNT WITH RESPECT TO PAYMENT OF INTER EST. SINCE IN EARLIER ORDER SINCE I HAVE UPHELD THE ORDER OF THE LEARNED CIT(A) THEREFORE THE ISSUE OF INTEREST IS CONSEQUENTIAL I N NATURE THEREFORE THE CONCLUSION DRAWN IN THE IMPUGNED ORDER IS UPHEL D. FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. 22. UPON CAREFUL CONSIDERATION WE NOTE THAT IN SUP PORT OF THE EXPLANATION OF THE UNSECURED LOANS THE ASSESSEE HA S SUBMITTED FOLLOWING DETAILS BEFORE THE ASSESSING OFFICER: !. PAN DETAILS OF CREDITORS LL. CONSTITUTION AND ADDRESS OF THE CREDITORS ITA NO.373/M/2019 A.Y.2013-14 13 III PARTICULARS OF INCOME-TAX RETURNS FILED BY THE CREDITORS. THESE SHOW THAT THE CREDITORS ARE LEGITIMATE BUSINESS ENT ITIES HAVING THE ABILITY TO ADVANCE THE IMPUGNED LOANS TO THE APPELL ANT IV. CONFIRMATORY LETTERS GIVEN BY THE CREDITORS V. AUDITED FINANCIAL ACCOUNTS (INCLUDING BALANCE SH EETS) OF THE CREDITORS {THESE SHOW THAT THE LOANS ARE DULY REFLE CTED IN THE BOOKS OF ACCOUNT OF THE CREDITORS. VI. RELEVANT BANK STATEMENTS OF THE CREDITORS [THES E SHOW THAT THE LOAN AMOUNTS WERE PAID THROUGH LEGITIMATE BANKING C HANNELS. FURTHER THESE BANK STATEMENTS DO NOT REFLECT ANY MO VEMENT OF CASH ESSENTIAL TO HAWALA TRANSACTIONS 23. THE ASSESSING OFFICER HAS MADE NO ENQUIRY WITH REFERENCE TO THE ABOVE. HE DID NOT SEEK ANY FURTHER EXPLANATION OR D ETAIL FROM THE ASSESSEE. HE SOLELY RELIED UPON THE INVESTIGATION W ING ENQUIRY REGARDING THE BHANWARLAL GROUP. THE ID. COMMISSIONE R OF INCOME TAX (APPEALS) IN THIS REGARD HAS CORRECTLY MADE THE OBSERVATION THAT THE ASSESSEE HAVING GIVEN ALL THE NECESSARY DE TAILS AND HAS DISCHARGED ITS ONUS IT WAS INCUMBENT UPON THE ASSE SSING OFFICER TO MAKE FURTHER ENQUIRY IF HE WAS NOT CONVINCED BY TH SUBMISSIONS OF THE ASSESSEE. WE FIND THAT ASSESSING OFFICER HAS DI SPLAYED LACK OF APPLICATION OF MIND BY NOT EVEN ISSUING A NOTICE TO THE LOAN CREDITORS. 24. WE FIND THAT IT IS SETTLED LAW THAT WHILE MAKIN G ANY DISALLOWANCE/ADDITION THE ASSESSING OFFICER NEEDS TO MAKE DUE ENQUIRY. IN THIS CASE THE ASSESSING OFFICER HAS NO T MADE ANY ENQUIRY WHATSOEVER. AS NOTED HEREINABOVE THE ASSES SEE HAS GIVEN ALL THE DOCUMENTARY EVIDENCES INCLUDING CONFIRMATOR Y LETTERS BANK STATEMENTS AND FINANCIAL STATEMENT OF THE CREDITORS . THE ASSESSING OFFICER HAS NOT FOUND ANY ERROR THEREIN. IT HAS BEE N HELD IN NUMBER OF CASES THAT WHEN THE ASSESSEE HAS GIVEN ALL THE L OAN CREDITORS INCLUDING THE IDENTITY NECESSARY DETAILS OF THE CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION THE ONUS UPON T HE ASSESSEE IS DISCHARGED. IN THESE CIRCUMSTANCES IN OUR CONSIDER ED OPINION THE ASSESSEE HAS DISCHARGED ITS ONUS. THE ASSESSING OFF ICER HAS NOT ITA NO.373/M/2019 A.Y.2013-14 14 REBUTTED ANY OF THE SUBMISSION OF THE ASSESSEE AND THE DOCUMENTARY EVIDENCE IN THIS REGARD. HENCE IN OUR CONSIDERED OPINION THERE IS NO INFIRMITY IN THE ORDER OF THE ID. COMMISSIONER OF INCOME TAX (APPEALS). THE VARIOUS CASE LAWS REFE RRED BY THE ID. COMMISSIONER OF INCOME TAX (APPEALS) ARE GERMANE AN D DULY SUPPORTS THE CASE OF THE ASSESSEE. IN THE BACKGROUN D OF THE AFORESAID DISCUSSION AND PRECEDENT WE UPHOLD THE O RDER OF THE ID. COMMISSIONER OF INCOME TAX (APPEALS). 25. IN THE RESULT THIS APPEAL BY THE REVENUE STAND S DISMISSED. IV. SHRI NARESH HIRAN VS. ITO 30 (2)(4) I.T.A. NO 1236/MUM/2017 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSING OFFICER HAS MADE IMPUGNED ADDITION U/ S. 68 OF THE ACT ON THE GROUND THAT LOAN OF 25 LAKHS TAKEN FROM ROSE IMPEX WAS BOGUS SINCE ROSE IMPLEX BELONGED TO MR. BHANWARLAL JAIN GROUP AND MR. BHANWARIAL JAIN HAS ACCEPTED THAT HIS GROUP WAS PROVIDING ONLY ACCOMMODATION ENTRIES. ON THE CONTRA RY WE NOTICED THAT THE ASSESSEE HAS FURNISHED ALL DOCUMEN TS NECESSARY TO DISCHARGE BURDEN OF PROVE PLACED UPON IT U/S.68 OF THE ACT. IT IS WELL SETTLED PROPOSITION OF LAW THAT THE ASSESSEE H AS TO PROVE THREE MAIN INGREDIENTS IN ORDER TO DISCHARGE BURDEN OF PR OOF PLACED UPON HIM U/S. 68 OF THE ACT IE. THE ASSESSEE HAS T O PROVE THE IDENTITY OF CREDITOR CREDITWORTHINESS OF THE CREDI TOR AND GENUINENESS OF THE TRANSACTIONS. IN THE INSTANT CAS E THE ASSESSEE HAS FURNISHED CONFIRMATION OBTAINED FROM ROSE IMPEX WHICH CONTAINED PAN AND ADDRESS OF THE CREDITOR. THE ASSE SSEE HAS DOCUMENTS PROVE THE IDENTITY OF CREDITOR. THE ASSES SEE HAS ALSO FURNISHED BANK ACCOUNT OF ROSE IMPEX AND ALSO IT'S OWN BANK ACCOUNT IN ORDER TO SHOW THAT THE LOAN TRANSACTION HAS BEEN CARRIED OUT THROUGH BANKING CHANNEL. THOUGH THE LE ARNED CITA) HAS OBSERVED THAT THERE WAS HUGE TRANSFER OF FUND B EFORE GIVING LOAN TO THE ASSESSEE PERUSAL OF THE BANK ACCOUNT O F ROSE IMPEX WOULD SHOW THAT THE: FUNDS HAVE BEEN TRANSFERRED WE RE THROUGH BANKING CHANNELS ONLY AND NOT BY WAY OF DEPOSITING CASH. THE ITA NO.373/M/2019 A.Y.2013-14 15 ASSESSEE HAG ALSO FURNISHED BANK STATEMENT TO HOW T HAT THE ABOVE SAID LOANS HAVE BEEN REPAID ON 25.3.2013. SINCE TRA NSACTIONS OF TAKING LOAN AND REPAYMENT OF LOAN HAVE TAKEN PLACE THROUGH BANKING CHANNEL IN OUR VIEW THE GENUINENESS OF TR ANSACTION ALSO STANDS PROVED. THE ASSESSEE HAS FURNISHED FINANCIAL STATEMENT OF ROSE IMPEX PERUSAL OF THE BALANCE SHEET WOULD SHOW THAT THE LOAN OF RS. 25 LAKHS GIVEN TO THE ASSESSEE IS DULY REFLE CTED IN THE BALANCE SHEET OF THE ASSESSEE. FURTHER IT CAN BE NOTICED T HAT ROSE IMPEX HAS TAKEN LOANS FROM VARIOUS PERSONS WHICH FORMED SOURCE FOR GIVING LOAN TO THE SHRI NARESH HIRAN ASSESSEE. HENC E IT CANNOT BE SAID THE ROSE IMPEX WAS NOT HAVING FUNDS FOR GIVING LOAN TO THE ASSESSEE MEANING THEREBY CREDITWORTHINESS OF THE CREDITOR ALSO STANDS PROVED. HENCE THERE IS MERIT IN THE CONTENT ION OF THE LEARNED AR THAT THE ASSESSEE HAS DISCHARGED PRIMARY ONUS PLACED UPON IT U/S 68 OF THE ACT. THE HON'BLE GUJARAT HIG H COURT HAS HELD IN THE CASE OF SACHITAL COMMUNICATIONS (2014) 227 TAXMAN 219 THAT IF IDENTITY OF CREDITOR AND CAPACITY OF T HE CREDITOR IS PROVED AND THE TRANSACTIONS HAVE BEEN CARRIED OUT T HROUGH BANKING CHANNEL THEN NO ADDITION COULD BE MADE ON ACCOUNT OF UNSECURED LOAN. IDENTICAL VIEW WAS EXPRESSED BY HON 'BLE GUJARAT HIGH COURT IN THE CASE OF PATEL RAMNIKLALHIRJI (200 4) 222 TAXAMN 15. 8. WE NOTICED THAT THE ASSESSING OFFICER DID NOT EX AMINE VARIOUS DOCUMENTS FURNISHED BY THE ASSESSEE AND DID NOT SHO W THAT THE SAID DOCUMENTS ARE NOT RELIABLE. INSTEAD THE ASSESSING O FFICER HAS TOTALLY PLACED RELIANCE ON THE STATEMENT GIVEN BY M R. BHANWARLEL JAIN WHICH IS CLAIMED TO HAVE BEEN RETRACTED. SINC E THE ADDITION HAS BEEN MADE U/S 68 OF THE ACT AND SINCE WE HAVE NOTICED THAT THE ASSESSEE HAS DISCHARGED BURDEN OF PROOF PLACED UPON SHOULDERS U/S. 68 OF THE ACT WE ARE OF THE VIEW THAT THE LEA RNED CIT(A) HOT JUSTIFIED IN CONFIRMING THE ADDITION BY SIMPLY PLAC ING RELIANCE ON THE STATEMENT GIVEN BY MR. BHANWARLAL JAIN. THE VAR IOUS DOCUMENTS FURNISHED BY THE ASSESSEE IN FACT MILIT ATE AGAINST THE STATEMENT GIVEN BY SHRI BHANWARLAL JAIN. ACCORDINGL Y WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) AND DI RECT THE ITA NO.373/M/2019 A.Y.2013-14 16 ASSESSING OFFICER TO DELETE THE ADDITION OF RE. 25 LAKHS AND ALSO DISALLOWANCE OF INTEREST OF RS. 22 192/-. V. DCIT(CC)-1(3) VS M/S. JAINAM INVESTMENTS ITA. NO.6099/MUM/2016 . 23. WE NOTICE THAT THE ASSESSEE HAS SPECIFICALLY A SKED THE AO TO ISSUE SUMMONS TO THE LOAN CREDITORS BUT THE ASSESS ING OFFICER HAS FAILED TO DO THE SAME. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS SO REQUESTED THE AO EVEN AFTER DISCHARGING THE INITIA L BURDEN OF PROOF BY FURNISHING ALL THE RELEVANT DETAILS AVAILA BLE WITH IT. IN THE CASE OF ORISSA CORPORATION P. LTD (SUPRA) THE ASSE SSEE FURNISHED AVAILABLE DETAILS AND THEN REQUESTED THE AO TO ISSU E SUMMONS TO THE CREDITORS SINCE IT COULD NOT COLLECT FURTHER D ETAILS FROM THEM. THE AO FAILED TO DO SO AND HENCE THE HON'BLE SUPREM E COURT HELD THAT THE ADDITION MADE U/S 68 IS NOT JUSTIFIED. THE ASSESSEE HEREIN IN OUR VIEW STAND ON A STRONGER FOOTING. THE ASSES SEE HAS FURNISHED ALL THE RELEVANT DETAILS WHICH HAS BEEN SUMMARIZED BY THE LD CIT(A) IN PARAGRAPH 6.3.31 OF HIS ORDER AS U NDER: 6.3.31 IN THE CASE BEFORE ME THE RECORD ALSO SHOW S THAT TO PROVE THE GENUINENESS OF THE IMPUGNED LOAN ENTRIES FROM T HE 17CREDITORS THE APPELLANT HAS FURNISHED TO THE ASSESSING OFFICE R THE FOLLOWING DETAILS COPIES OF WHICH WERE ALSO FURNISHED IN THE PRESENT PROCEEDINGS: I. PAN DETAILS OF CREDITORS II. CONSTITUTION AND ADDRESS OF THE CREDITORS III. PARTICULARS OF INCOME-TAX RETURNS FILED BY THE CREDITORS THESE SHOW THAT THE CREDITORS ARE LEGITIMATE BUSINE SS ENTITIES HAVING THE ABILITY TO ADVANCE THE IMPUGNED LOANS TO THE APPELLANT. LV. CONFIRMATORY LETTERS GIVEN BY THE CREDITORS ITA NO.373/M/2019 A.Y.2013-14 17 V. AUDITED FINANCIAL ACCOUNTS (INCLUDING BALANCE SH EETS) OF THE CREDITORS [THESE SHOW THAT THE LOANS ARE DULY REFLE CTED IN THE BOOKS OF ACCOUNT OF THE CREDITORS.] VI. RELEVANT BANK STATEMENTS OF THE CREDITORS [THES E SHOW THAT THE LOAN AMOUNTS WERE PAID THROUGH LEGITIMATE BANKING C HANNELS. FURTHER STATEMENT DO NOT REFLECT ANY MOVEMENT OF CA SH ESSENTIAL TO HAWALA TRANSACTIONS.) VII. DETAILS OF INTEREST PAID TO THE CREDITORS VIII. DETAILS OF TDS DEDUCTED END PAID. EVEN THOUGH THE ASSESSING OFFICER DID NOT FIND ANY FAULT WITH THESE DOCUMENTS STILL THE ASSESSEE HAS REQUESTED THE AO TO ISSUE SUMMONS TO THESE PARTIES. AS STATED EARLIER THE AS SESSING OFFICER DID NOT ISSUE SUMMONS AND INSTEAD RELIED UPON THE I NFERENCES DRAWN BY THE SEARCH OFFICIALS. HENCE IN OUR VIEW THE DECISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF OR ISSA CORPORATION (P) LID (SUPRA) WILL ALSO COME TO THE S UPPORT OF THE ASSESSEE. 24. WE NOTICE FROM THE OPERATIVE PORTION OF THE ORD ER PASSED BY LD CIT(A) THAT THE FIRST APPELLATE AUTHORITY HAS PLACE D RELIANCE ON VARIOUS OTHER CASE LAWS ALSO. IN EFFECT THE LD CIT (A) HAS EXAMINED THE DOCUMENTS FURNISHED BY THE ASSESSEE AND HAS HEL D THAT THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN OF PROOF PLACED UPON IT U/S 68 OF THE ACT. HE HAS ALSO HELD THAT THE NON-FU RNISHING OF DOCUMENTS RELIED UPON BY THE AO AND NON-PROVIDING O F OPPORTUNITY TO CROSS EXAMINE THE SHRI BHANWARLAL JA IN AND OTHERS WOULD MAKE THE ADDITION TO FAIL. EVEN IN RESPECT OF DOCUMENTS RELIED UPON BY THE AO THE LD CIT(A) HAS FOUND THE SAME TO BE INADEQUATE TO WARRANT THE ADDITIONS MADE U/S 68 OF THE ACT. HENCE WE ARE OF THE VIEW THAT THE LD CIT(A) HAS PA SSED A REASONED ORDER BY CONSIDERING THE FACTS OF THE CASE APPLICABLE CASE LAWS AND HAS TAKEN A JUSTIFIABLE VIEW IN THIS MATTER. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD CIT(A). ITA NO.373/M/2019 A.Y.2013-14 18 ACCORDINGLY WE CONFIRM THE ORDER PASSED BY LD CIT(A ) IN DELETING THE ADDITION OF RS.24 75 CRORES MADE U/S 68 OF THE ACT. 25. SINCE WE HAVE CONFIRMED THE ORDER OF LD CIT(A) IN DELETING THE ADDITION MADE U/S 68 OF THE ACT THE INTEREST DISAL LOWANCE IS ALSO LIABLE TO BE DELETED. ACCORDINGLY WE CONFIRM THE ORDER PASSED BY LD CIT( A) IN RESPECT OF INTEREST DISALLOWANCE ALSO. 26. THE ADDITION MADE TOWARDS COMMISSION EXPANSES | S ALSO OFF SHOOT OF THE ADDITION MADE U/S 68 OF THE ACT. FOR T HE REASONS STATED IN THE PRECEDING PARAGRAPH WE CONFIRM THE ORDER PA SSED BY LD CIT(A) ON THIS ISSUE ALSO. 27 IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ACIT-19 3 VS. RAJESH M. SHAH (HUF) ITA. NO. 7105/MU M2016. AFTER HAVING GONE THROUGH: THE FACTS OF THE PRESEN T CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIE S JUDGMENTS CITED AND SUBMISSIONS MADE BY BOTH THE PARTIES WE FIND THAT LD. CIT(A) CONSIDERED THE RECORDS WHICH THE ASSESSEE H AD PLACED ON RECORD TO PROVE THE GENUINENESS OF THE LOAN ENTRIES FROM THE SIX CREDITORS IN THE SHAPE OF I) PAN DETAILS OF CREDITO RS II) CONSTITUTION AND ADDRESS OF THE CREDITORS {L)PARTI CULAR OF INCOME- TAX RETURNS FILED BY THE CREDITORS [THESE SHOW THAT THE CREDITORS ARE LEGITIMATE BUSINESS ENTITIES HAVING THE ABILITY TO ADVANCE THE IMPUGNED LOANS TO THE APPELLANT.] IV)CONFIRMATORY LETTERS GIVEN BY THE CREDITORS V) AUDITED FINANCIAL ACCOUNTS (INCLU DING BALANCE SHEETS) OF THE CREDITORS [THESE SHOW THAT THE LOANS ARE DULY REFLECTED IN THE BOOKS OF ACCOUNT OF THE CREDITORS. ] VI) RELEVANT BANK STATEMENTS OF THE CREDITORS [THESE SHOW THAT T HE LOAN AMOUNTS WERE PAID THROUGH LEGITIMATE BANKING CHANNELS. FURT HER THESE BANK STATEMENTS DO NOT REFLECT ANY MOVEMENT OF CASH ESSENTIAL TO HAWALA TRANSACTIONS.] VII) DETAILS OF INTEREST PAI D TO THE CREDITORS AND VIII) DETAILS OF TDS DEDUCTED AND PAID. 8. IN T HIS WAY THE ASSESSEE HAS PROVIDED ALL POSSIBLE DOCUMENTARY EVID ENCE TO PROVE ITA NO.373/M/2019 A.Y.2013-14 19 THE IDENTITY OF THE CREDITORS FROM WHOM THE IMPUGNE D LOAN WAS OBTAINED. 9. ANOTHER IMPORTANT ASPECT OF THIS CASE IS THAT T HAT ALL THE LOANS AS WERE OBTAINED WERE ALSO REPAID THROUGH THE BANKI NG CHANNEL REGARDING THIS A DULY NOTORISED AFFIDAVIT WAS FILE D BY THE ASSESSEE AND THE DETAILS OF WHICH ARE ALREADY CONTAINED IN P ARA NO. 6.3.12 OF THE ORDER OF LD. CIT(A). EVEN OTHERWISE IT IS A SETTLED LAW THAT ONCE THE ASSESSEE DISCHARGES ITS ONUS BY PROVING TH E SATISFACTORY NATURE OF THE LOAN TRANSACTIONS THEN THE ONUS SHIF T UPON THE AO AND IN HIS WISDOM THE AO HAS OPTION OF MAKING INQU IRIES FROM THE ALLEGED LENDERS. 10. EVEN THE COORDINATE BENCHES OF ITAT IN SERIES O F DECISIONS HAVE DELETED THE ADDITIONS UNDER THE SIMILAR CIRCUM STANCES. IN THIS RESPECT WE REFER CASE TILED ITO VRS. M/S VIKRAM MU KTILAL VORA IN ITA NOS. 842/MUM/2017 ITO VRS. GUJRAT CONSTRUCTION IN ITA NO. 7040/MUM/2016 ACIT VRS. SHRI DILIP CHIMANLAL GANDH I IN ITA NO. 7079/MUM/2016 MARAEH HIRAN VRS. ITO IN ITA NO. 1236/MUM/2017 ACIT VRS. BHAGNENI IN ITA NO. 5648/M UM/201 6 AND ACIT VRS. SHRI SUMIT J. JAIN IN ITA NO. 145/MUM /2017 17. MOREOVER HO NEW FACTS OR CONTRARY JUDGMENTS HA VE BEEN BROUGHT ON RECORD BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS $0 RECORDED BY ' LD. CIT(A). THEREFORE WE SEE NO REASONS TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECO RDED BY THE LD. CIT(A) HENCE CONSIDERING THE FACTS OF THE CASE AS WELL AS FOLLOWING THE DECISION OF THE COORDINATE BENCHES AN D IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY WE ARE OF THE CONSID ERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUD ICIOUS AND ARE WELL REASONED. RESULTANTLY THESE GROUNDS RAISED BY THE REVENUE STANDS DISMISSED. 5.1.5 ACCORDINGLY THE ISSUE AT HAND STANDS ADJUDIC ATED AS ABOVE AT MULTIPLE FOR A AND IS NO LONGER RES INTEGRA. 5.1.6 AS SEEN FROM THE ABOVE FACTS AND JUDICIAL PRE CEDENTS THE APPELLANT HAS FURNISHED ALL THE DETAILS PROVING CON CLUSIVELY THE ITA NO.373/M/2019 A.Y.2013-14 20 THREE INGREDIENTS OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTION. THE AMOUNTS WERE PAID BY THE CREDITORS FROM THEIR R UNNING BANK ACCOUNTS WHICH WERE ACCOUNTED IN THE BOOKS OF THE A PPELLANT AS WELL AS THE CREDITORS AS SEEN FROM THE AUDITED ACCO UNTS FILED. THE TRANSACTIONS WERE ALSO CONFIRMED BY ALL THE CREDITO RS WHO ARE ASSESSED TO TAX. FURTHER THE APPELLANT HAS PAID IN TEREST THROUGH BANKS TO THE CREDITORS BY DULY SUBJECTING THE INTER EST AMOUNT TO TDS. I FIND THAT THE AO WAS IN POSSESSION OF GOOD I NFORMATION IN THE FORM OF INVESTIGATION REPORT TO BEGIN WITH BU T HE COULD NEITHER SUCCEED TO. REPUDIATE THE EVIDENCES FILED BY THE AP PELLANT NOR HE COULD GATHER INDEPENDENT EVIDENCE EVEN TO ESTABLISH THE SURROUNDING CIRCUMSTANCES NOT TO SPEAK OF LEADING E VIDENCE TO PROVE HIS HYPOTHESIS. IN VIEW OF THE ABOVE DISCUSSI ON | HOLD THAT THE LOAN TAKEN BY THE APPELLANT FROM THE ABOVE THREE PA RTIES CANNOT BE DOUBTED AND THE ADDITION MADE BY THE AO U/S 68 OF T HE ACT CANNOT SURVIVE THE TEST OF APPEAL. 5.1.7 WITH REGARD TO ADDITION OF RS. 2 16 630/- ON ACCOUNT OF INTEREST EXPENSES U/S 88 OF THE ACT. THE AO HAS NOT ICED PAYMENT OF INTEREST TO THE CREDITORS FROM WHOM LOAN WAS TAKEN. AS THE CREDITS WERE DISBELIEVED BY THE AO SINCE THE CREDITS WERE GIVEN BY THE BOGUS CONCERNS FLOATED BY BHANWARLAL GROUP WHO THE ONLY ENTRY OPERATORS THE AO HAS ALSO DISALLOWED INTEREST HAVE BEEN PAID TO THESE CREDITORS U/S 68 OF THE ACT. THE APPELLANT HA S OBJECTED FOR THE DISALLOWANCE OF INTEREST TRULY BEEN PAID TO THE CRE DITORS FROM WHOM LOANS WERE TAKEN. HE HAS FURTHER SUBMITTED THAT THE PAYMENTS WERE MADE THROUGH BANKING CHANNEL AFTER MAKING TDS APPLI CABLE. I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBMISSIONS OF THE ID.AR. SINCE THE LOAN GIVEN BY THE ABOVE PARTIES WERE TREA TED AS GENUINE IN THIS ORDER IN EARLIER PARAGRAPHS THE INTEREST P AID TO THOSE PARTIES IS ALSO TREATED AS GENUINE. ACCORDINGLY TH E INTEREST PAID IS ALLOWED AS EXPENDITURE AND AO IS DIRECTED TO WITHDR AW THE ADDITION MADE U/S 68 OF THE ACT. I THEREFORE DIREC T THE AO TO WITHDRAW THE ADDITION. THEREFORE GROUND NO. 1 IS A LLOWED. IN THE RESULT THE APPEAL FOR THE AY 2013-14 IS ALL OWED. ITA NO.373/M/2019 A.Y.2013-14 21 5. ON APPRAISAL OF THE ABOVE MENTIONED FINDING WE FIN D THAT THE CIT(APPEALS) HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. (2008) 216 CTR 195 (SC) ANANT SHELTERS PVT. L TD. (2012) 20 TAXMANN.COM 153 AND VARIOUS DECISION OF THE HONBLE COURTS MENTIONE D ABOVE. MOREOVER NO LAW CONTRARY TO THE LAW RELIED BY THE CIT(A) HAS BEEN PRODUCED BEFORE US. THE FACTS ARE NOT DISTINGUISHAB LE AT THIS STAGE. CIT(A) HAS CONSIDERED THE EACH AND EVERY ASPECTS OF THE FA CTS OF THE CASE.TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES WE A RE OF THE VIEW THAT THE FINDING OF THE CIT(A) HAS DECIDED THE MATTER OF CON TROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY WE AFFIRM THE FINDING OF THE CIT(A) ON THIS ISSUE AND DECIDE THESE ISSUES IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 6 . IN THE RESULT THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 /03/202 1 SD/- SD/- (SHAMIM YAHYA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 17 /03/2021 VIJAY PAL SINGH (SR. P.S.) ITA NO.373/M/2019 A.Y.2013-14 22 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' ( ) / THE CIT(A)- 4. ' / CIT 5. * * / DR ITAT MUMBAI 6. ) + / GUARD FILE. / BY ORDER % % //TRUE COPY// / /(DY./ASSTT. REGISTRAR) / ITAT MUMBAI