SHRI YASHWANT KUMAR MOTWANI HUF, Neemuch v. THE ITO, Neemuch

ITA 687/IND/2015 | 2012-2013
Pronouncement Date: 27-10-2016 | Result: Dismissed

Appeal Details

RSA Number 68722714 RSA 2015
Assessee PAN AAAHY8608Q
Bench Indore
Appeal Number ITA 687/IND/2015
Duration Of Justice 1 year(s) 1 month(s) 5 day(s)
Appellant SHRI YASHWANT KUMAR MOTWANI HUF, Neemuch
Respondent THE ITO, Neemuch
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2016
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 27-10-2016
Assessment Year 2012-2013
Appeal Filed On 22-09-2015
Judgment Text
I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE .. .. % BEFORE SHRI D.T. GARASIA JUDICIAL MEMBER AND SHRI O.P. MEENA ACCOUNTANT MEMBER SHRI YASHWANT KUMAR MOTWANI HUF 91 SINDHI COLONY NEEMUCH PAN:AAAHY8608Q VS. INCOME TAX OFFICER WARD NEEMUCH / APPELLANT / RESPONDENT / APPELLANT BY SHRI S N AGARWAL & SHRI PANKAJ MOGRA CA`S / RESPONDENT BY SHRI K G GOYAL SR. (DR) / DATE OF HEARING 14.09.2016 / DATE OF PRONOUNCEMENT 2 7 .10 .2016 / O R D E R PER O. P. MEENA ACCOUTANT MEMEBR. 1. THIS APPEAL BY THE ASSESSEE FILED AGAINST THE ORDER DTD.14.07.2015 OF LEARNED COMMISSIONER OF INCOME-TA X- UJJAIN [HEREINAFTER REFERRED TO AS THE LEARNED CIT]. THIS APPEAL RELATES TO ASSESSMENT YEAR 2012-13 AS AGAINST ASSESSMENT ORDER DTD. . . ./ I.T.A. NO.687/IND/2015 %' ' / ASSESSMENT YEAR: 2012-13 I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 2 OF 15 27.02.2015 PASSED U/S. 143(3) OF INCOME TAX ACT 19 61(HEREIN AFTER REFERRED TO AS 'THE ACT) BY THE ITO NEEMUCH [HEREINAFTER REFERRED TO AS THE AO]. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LEARNED CIT (A) ERRED IN APPROVING THE ACTION OF TH E ASSESSING OFFICER ERRED IN ADDING AN AMOUNT OF RS. 23 50 000/- TO THE INCOME OF THE ASSESSEE UNDER SEC TION 68 OF INCOME TAX ACT 1961. EVEN WHEN THE CASE OF THE A SSESSEE WAS SELECTED UNDER CASS. IT IS SETTLED POSITION OF LAW THAT ADDITION IS TO BE RESTRICTED TO THE POINT FOR WHICH CASE WAS SELECTED FOR SCRUTINY. 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LEARNED CIT (A) ERRED IN ADDING AN AMOUNT OF RS. 23 50 000/- TO THE INCOME OF THE ASSESSEE U/S. 68 O F THE INCOME TAX ACT EVEN WHEN THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM. 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT (A) ERRED IN APPROVING THE ASSESSMENT O RDER AS PASSED U/S. 143(3) OF INCOME TAX ACT EVEN WHEN THE FIRST I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 3 OF 15 NOTICE WAS ISSUED BY THE ASSESSING OFFICER NOT HAV ING JURISDICTION OVER THE CASE OF THE ASSESSEE. 4] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT (A) ERRED IN APPROVING THE CHARGING OF INTEREST U/S. 234B OF INCOME TAX ACT EVEN WHEN THE ASSESSEE WAS NOT LIABLE TO PAY INTEREST ON THE INCOME AS RETURNE D. 2. GROUND NO.1 & 2: RELATES TO ADDITION OF RS. 23 50 0 00/- UNDER SECTION 68 OF THE ACT. 3. SUCCINCTLY THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUTHORITIES ARE THAT THE ASSESSEE IS HUF DEALS IN TRADING OF FOOD GRAINS IN MANDI. RETURN OF INCOME WAS FILED ON 27.0 7.2012 DECLARING TOTAL INCOME AT RS.2 17 150/- UNDER THE P ROVISIONS OF SECTION 44AD OF THE ACT. THE ASSESSEE HAS SHOWN NET PROFIT AT RS. 1 71 900/- ON TOTAL CASH SALES OF RS. 8 95 800/- DI SCLOSING NET PROFIT @19% INSTEAD OF NET PROFIT@ 8% AS PER PROVIS IONS OF SECTION 44AD. BESIDES THE ASSESSEE HAS ALSO SHOWN INCOME O F RS. 45 250/- UNDER THE HEAD INCOME FROM OTHER SOURCES. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER CASS. TH E ASSESSEE HAS PURCHASED TWO PLOT OF LAND AT GOMABAI NETRALAYA ROAD NEEMUCH ON 17.11 2011 IN CASH FOR RS. 28 62 500/- . TO MAKE THE PAYMENT FOR THIS PURCHASE THE ASSESSEE HAS OPE NED BANK I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 4 OF 15 ACCOUNT NO. 993020110000157 ON 17.11.2011IN WHICH AMOUNT OF RS. 28 50 000/- WAS DEPOSITED BY CHEQUES BY WAY OF LOANS TAKEN FROM 6 PERSONS OUT OF WHICH FOLLOWING NOT FOU ND GENUINE: S. NO. NAME OF THE LOAN CREDITOR AMOUNTS [RS.] 1 SHRI JEEVAN SINGH CHUDAWAT ABIPC0436F 2 00 000 2 SHRI MAHENDRA SINGH CHUDAWAT AGPBC 9777D 3 00 000 3 SMT. GUNBALA JAIN AFXPJ5379M 5 00 000 4 SHRI VINOD JAIN AFDPJ0871C 5 00 000 5 SMT. SEEMA GANDHI AJTPJ 8675P 8 50 000 TOTAL 23 50 000 4. THE AO EXAMINED THE ABOVE PERSON AND FOUND THAT SHR I JEEVAN SINGH CHUDAWAT IS A PENSIONER WHO DEPOSITED CASH O F RS. 2 LAKH IN THE BANK ACCOUNT ON 28.12.2011 AND ISSUED C HEQUE TO THE ASSESSEE OF EQUAL AMOUNT ON THE SAME DATE. SHRI MAHENDRA SINGH CHUDAWAT IS A SALARY PERSON WHO DEPOSITED CA SH OF RS. 3 LAKH IN THE BANK ACCOUNT ON 28.12.2011 AND ISSUED T HE CHEQUE OF EQUAL AMOUNT TO THE ASSESSEE ON SAME DATE. SMT. GUNBALA JAIN W/O VINOD JAIN DERIVES INCOME FROM SALE OF PAP AD GINGER AND PAPDI. SHE DEPOSITED CASH OF RS. 5 LAKH IN THE BANK ACCOUNT ON 14.12.2011 AND ISSUED CHEQUE TO THE ASSESSEE OF EQUAL AMOUNT ON SAME DATE. SHRI VINOD JAIN DERIVES INCOM E FROM SALARY INTEREST AND JOB WORK WHO ALSO DEPOSITED C ASH OF RS. 5 I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 5 OF 15 LAKHS IN THE BANK ACCOUNT ON 14.12.2011 AND ISSUED CHEQUE TO THE ASSESSEE OF EQUAL AMOUNT ON SAME DATE. SMT. SEE MA GANDHI DERIVES INCOME FROM INTEREST. SHE DEPOSITED CASH OF RS. 6 LAKH IN THE BANK ACCOUNT ON 15.12.2011 AND ISSUED CHEQUE TO THE ASSESSEE AMOUNTING TO RS. 8 50 000/- ON THE SAME DA TE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO EXAMIN ED THE PREVIOUSLY MENTIONED PERSON ON OATH AND RECORDED TH E STATEMENT FROM THEM. THE AO FOUND THAT THE ASSESSEE HUF HAS T AKEN LOANS BY CHEQUE IMMEDIATELY AFTER DEPOSITING THE CASH IN THE BANK ACCOUNT OF ABOVE PERSONS. THE AO FOUND THAT THE ABO VE PERSON HAVE NO CREDIT WORTHINESS AND DOES NOT HAVE SUFFICI ENT SOURCE OF INCOME BY WHICH THEY CAN HAVE SAVING AND AFFORD TO GIVE LOANS TO THE ASSESSEE. THEREFORE THE ASSESSEE HAS FAILED TO ESTABLISH CREDIT WORTHINESS OF THE ABOVE PERSONS AND FAILED TO EXPLA IN SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT IMMEDIATELY BEFOR E ISSUING CHEQUES. ACCORDINGLY THE AO TREATED THE SAME AS UN EXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFOR E THE LD. CIT (A). THE LD. CIT (A) OBSERVED THAT IT IS SETTLED LA W WHETHER LOAN TRANSACTIONS ARE GENUINE THE ONUS IS ALWAYS ON THE APPELLANT AND IF NO EXPLANATION IS OFFERED OR EXPLANATION IS NOT FOUND I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 6 OF 15 SATISFACTORY THE AO CAN DISBELIEVE THE ALLEGED TRA NSACTIONS OF LOANS. IF INITIAL BURDEN IS DISCHARGED THEN ONUS SH IFTS ON THE AO. ACCORDINGLY THE LD. CIT (A) HELD THAT THE APPELLAN T FAILED TO DISCHARGE THE BURDEN OF PROOF BY NOT ESTABLISHING T HE GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS O F THESE PARTIES ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE AO. 6. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFOR E THIS TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE AO ADDED FOLLOWING AMOUNTS OF UNSECURED LOAN TO THE IN COME OF THE ASSESSEE S. NO. NAME OF THE LOAN CREDITOR AMOUNTS [RS.] 1 SHRI JEEVAN SINGH CHUDAWAT ABIPC0436F 2 00 000 2 SHRI MAHENDRA SINGH CHUDAWAT AGPBC 9777D 3 00 000 3 SMT. GUNBALA JAIN AFXPJ5379M 5 00 000 4 SHRI VINOD JAIN AFDPJ0871C 5 00 000 5 SMT. SEEMA GANDHI AJTPJ 8675P 8 50 000 TOTAL 23 50 000 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED TH AT ON PAGE 6 OF ASSESSMENT ORDER THE AO MENTIONED THAT SHRI YAS HWANT KUMAR MOTWANI HAS CREATED ONE FILE IN THE NAME OF H IS HUF AND DEPOSITED HIS UNDISCLOSED INCOME IN FORM OF LOAN FR OM THE VARIOUS LOAN CREDITORS. THE AO AT ONE POINT STATED THAT THE LOAN AS RECEIVED BY THE ASSESSEE WAS UNDISCLOSED INCOME OF YASHWANT I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 7 OF 15 KUMAR MOTWANI INDIVIDUAL; IN THAT CASE THE AO WAS GROSSLY ERRED IN ADDING THE ENTIRE AMOUNT OF LOAN TO THE IN COME OF HIS HUF. THE ADDITION SO MADE IN THE CASE OF HUF REQUIR ES TO BE DELETED IN FULL. THE LEARNED COUNSEL FOR THE ASSE SSEE FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROC EEDINGS THE ASSESSEE HAS FILED CONFIRMATION OF ALL UNSECURE D LOAN CREDITORS. THE STATEMENT OF ALL THE UNSECURED LOAN CREDITORS WERE RECORDED BY THE AO WHEREIN THEY HAVE ALSO ACCEPTED THAT LOANS WAS ADVANCED BY THEM TO THE ASSESSEE. THE ASSESSEE HAS RECEIVED ENTIRE AMOUNT OF LOANS THROUGH AN ACCOUNT PAYEE CHE QUES. HENCE THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS LYING ON THE ASSESSEE. THE AO HAS UTTERLY FAILED TO PROVE TH AT THE AMOUNT AS SHOWN BY THE ASSESSEE WAS INCOME OF THE ASSESSEE . HENCE THE ADDITION IS PURELY BASED ON PRESUMPTION IS NOT JUST IFIABLE. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIA NCE IN THE CASE OF CIT VS. METACHEM INDUSTRIES (2000) 245 ITR 160 M P)/ 161 CTR 444(MP)/ 116 TAXMAN 572(MP) WHEREIN IT WAS LAID DOWN THAT ONCE THE FIRM HAS SATISFACTORY EXPLAINED THAT THE CREDIT ENTRIES IN THE NAME OF PARTNERS REPRESENT THE AMOUN T INVESTED BY THEM THE BURDEN OF PROOF STOOD DISCHARGED AND THE A MOUNT CANNOT BE TREATED AS INCOME OF THE FIRM U/S. 68. TH E LD. A. R. ALSO I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 8 OF 15 STATED THAT THE AO WAS GROSSLY ERRED IN STATING THA T SOURCE OF LOAN WAS NOT EXPLAINED BY THE CREDITORS. THE LD. A. R. FILED A CHART SHOWING DETAILS OF SUCH OF CREDITORS AS UNDER : S. NO. NAME OF THE LOAN CREDITOR WITH PAN AMOUNTS [RS.] STATEM ENT ON PAGE NO. SOURCE OF AMOUNT 1 SHRI JEEVAN SINGH CHUDAWAT ABIPC0436F 2 00 000 33-34 NO SOURCE ASKED BY THE AO 2 SHRI MAHENDRA SINGH CHUDAWAT AGPBC 9777D 3 00 000 35-36 CASH WAS DEPOSITED OUT OF CASH WITHDRAWAL OF RS. 3 LAKH ON 29.09.11 3 SMT. GUNBALA JAIN AFXPJ5379M 5 00 000 37-38 NO SOURCE ASKED BUT SHE STATED THAT RS. 2 87 500/- WAS RECEIVED BACK BY HER FROM MARKET 4 SHRI VINOD JAIN AFDPJ0871C 5 00 000 39-40 RS. 1.65 LAKH CASH WITHDRAWN FROM BANK ON 4.4.11 AND RS. 3.50 LAKH OUT OF HIS PAST SAVING 5 SMT. SEEMA GANDHI AJTPJ 8675P 8 50 000 41-42 NO SOURCE ASKED SHE EXPLAINED THAT RS.5 00 000/-WITHDRAWN FROM HER BANK ON 13.12.11 WHICH DEPOSITED BY HER IN BANK ACCOUNT TOTAL 23 50 000 8. THE LD. A. R. SUBMITTED THAT FROM THE ABOVE TABLE I T IS CLEAR THAT SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT WAS PRO PERLY EXPLAINED BY THE LOAN CREDITORS. IT IS SETTLED POSI TION OF LAW THAT THE AO CAN ONLY ASKED SOURCE OF LOAN AS RECEIVED BY THE ASSESSEE THE ASSESSEE HAS PROPERLY EXPLAINED THE SOURCE OF L OAN FROM THESE FIVE LOAN CREDITORS AND THEY HAVE ACCEPTED THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER THE AO F OR WANT OF SOURCE OF SOURCE ADDED THE LOAN TO THE INCOME OF TH E ASSESSEE I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 9 OF 15 WHICH IS NOT PERMISSIBLE. THE LD. A. R. RELIED FOR THIS PROPOSITION ON FOLLOWING CASE LAW VIZ: ACIT VS. INDIA TYRE HOUS E 72 TTJ 316( GUHATI) RAM MANOHAR SINGH VS. ACIT 9 DTR 270( JABA LPUR) S K JAIN VS. I T O 2 SOT 579(AGRA) NEMICHNAD KOTHARI V S. CIT 264 ITR ( GAUHATI) ORBITAL COMMUNICATION (P) LTD. 327 ITR 560 (DELHI) DWARKESH INVESTMENT (P) LTD. 330 ITR 298 ( DELHI). 9. THE LD. A. R. FURTHER SUBMITTED THAT WHEN CONFIRMAT ION FILED LOAN CREDITORS APPEARED IN RESPONSE TO SUMMON ISSUED U/S . 131 AND THEIR STATEMENT RECORDED WHEREIN THEY HAVE ADMITTE D HAVING GIVEN LOAN TO THE ASSESSEE THEY HAVE GIVEN THEIR P AN NUMBER THE PRIMARY ONUS HAS BEEN DISCHARGED HENCE THE AO CANNOT PROCEED AGAINST THE ASSESSEE IF NOT SATISFIED THE AO CAN PROCEED AGAINST INDIVIDUALS WHO HAVE GIVEN LOANS TO THE ASS ESSEE. IN SUPPORT OF THIS PROPOSITION THE LD. A. R. PLACED RE LIANCE IN THE CASE OF CIT VS. METACHEM INDUSTRIES 245 ITR 160(MP) (2000) 161 CTR 444/ 245 ITR 160/(2001) 116 TAXMAN 572(MP). 10. THE LD. SENIOR (DR) SUPPORTED THE ORDERS OF LOWER A UTHORITIES AND SUBMITTED THAT THE SUNDRY CREDITORS WERE NOT THE PE RSON WERE NOT OF ANY MEANS. THE PERSON WHO GIVE LOAN TO THE ASSES SEE HAVE DEPOSITED THE CASH ON SAME DAY WHEN THE CHEQUE WAS ISSUED TO THE ASSESSEE. THEREFORE THERE CREDIT WORTHINESS IS NOT PROVED. THE I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 10 OF 15 LD. SENIOR (DR) ALSO RELIED IN THE CASE OF UMESH KR ISHNANI VS. ITO (2013) 217 TAXMAN 13(GUJ)/35 TAXMANN.COM 598(GUJ) W HEREIN ADDITION US 68 OF THE ACT WAS CONFIRMED IN RESPECT OF ON THE FACTS THAT YEARLY EARNING OF LENDERS WERE ALMOST LS OF SI MILAR TO WHAT THEY LOANED TO THE ASSESSEE AND SUBSTANTIAL AMOUNT OF CASH DEPOSITED IN BANK ACCOUNT OF THE LENDERS SHORTLY PR IOR TO ISSUANCE OF CHEQUES BY THEM TO THE ASSESSEE. HENCE THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ADDITION SO MADE. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS HAVE GONE THRO UGH THE ORDERS OF THE LOWER AUTHORITIES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO HAS EXAMINED THE PE RSON BY WAY OF ISSUE OF SUMMON TO THE ENTIRE PREVIOUSLY MENTION ED PERSON. WE FIND THAT ALL THESE SUNDRY CREDITORS HAVE FIRS DEPO SITED THE AMOUNT IN THEIR BANK ACCOUNT IN CASH AND ON SAME DAY ISSUE D CHEQUES IN FAVOUR OF THE ASSESSEE AS LOAN. WE FIND THAT SHRI J EEVAN SINGH IS A PENSIONER AND DERIVING PENSION ONLY AT RS. 1.09 LAK H YEARLY ISSUED A CHEQUE OF RS. 2 ON 28.12.2011 AFTER DEPOSI NG SAME AMOUNT IN CASH ON SAME DAY HENCE HE IS NOT EXPECTED TO SAVE THAT MUCH MONEY. HENCE ADDITION IN RESPECT OF THIS CRED ITOR IS UPHELD. SIMILARLY SHRI MAHENDRA SINGH ALSO ISSUED CHEQUE OF RS. 3 LAKH AFTER MAKING CASH DEPOSITS OF RS. 3 LAKH IN CASH ON 28.12.2011 I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 11 OF 15 WHO IS SALARIED PERSON DRAWING SALARY OF RS. 500/- P.M. AND HIS BANK BALANCE BEFORE CASH DEPOSITS WAS AT RS. 31 836 /- ONLY. HENCE FINDING OF THE A.O. IS UPHELD. SMT. GUNBALA J AIN IS DOING PAPD TRADING AND EARNING RS. 10-12000/- P.M. SHE AL SO PAID CHEQUE OF RS. 5 LAKH AFTER CASH DEPOSITS OF EQUAL A MOUNT IN HER BANK ACCOUNT. HENCE FINDING OF THE A.O. IS CONFIRME D. IN THE CASE OF SHRI VINOD JAIN DRAWING SALARY INCOME OF RS. 30 0/P.M. IN HIS STATEMENT RECORDED BY THE AO HE STATED THAT HE ISS UED CHEQUE OF RS. 5 LAKH AFTER CASH DEPOSITS OF RS. 5 LAKH ON 14. 12.2011. THUS SOURCE IN THIS CASE IS REMAINED AS UNEXPLAINED HENC E ADDITION IS UPHELD. IN THE CASE OF SMT. SEEMA GANDHI WHO IS EN GAGED IN SAREE BUSINESS AND EARNING INCOME OF 10-15000/- P.M . AND INTEREST INCOME ALSO STATED IN HER STATEMENT THAT HAT SHE HAD ISSUED CHEQUE OF RS. 8.50 LAKHS ON 15.12.2011 AFTER CASH DEPOSITS OF RS. 6 LAKH ON 15.12.2011 AND ALSO A SUM OF RS. 5 LAKHS IN CASH WERE DEPOSITED ON 15.12.11 WHICH IS CLAIMED TO BE O UT OF WITHDRAWAL MADE BY HER ON 13.12.11 FROM HER BANK AC COUNT. SHE ALSO FILED COPY OF HER BANK ACCOUNT. CONSIDERING TH ESE FACTS WE FIND THAT THE CHEQUE OF RS. 8.50 LAKHS HAS BEEN ISS UED OUT OF CASH DEPOSITS ON THE DATE OF CASH DEPOSITS ON SAME DATE. CONSIDERING THESE FACTS THE AMOUNT OF RS. 8.50 LAKH IS REMAINE D AS I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 12 OF 15 UNEXPLAINED; HENCE ADDITION OF RS. 8.50 LAKHS IS CONFIRMED. IN VIEW OF ABOVE FACTS AND THE ADDITION OF RS. 23.50 LAKH MADE BY THE AO IS CONFIRMED AS THE CREDITWORTHINESS IS NOT PROVED NOR THE ABOVE CASH CREDITOR HAD SUBSTANTIAL BALANCES IN THE IR BANK ACCOUNT TO ADVANCE SUCH LOAN TO THE ASSESSEE. OUR V IEW IS ALSO FORTIFIED WITH DECISION IN THE CASE OF UMESH KRISHN ANI VS. ITO (2013) 217 TAXMAN 13 (GUJ)/ 35 TAXMANN.COM 598(GUJ) OF WHICH RELEVANT EXTRACT IS REPRODUCED BELOW: 17.1 IT MAY BE THAT IDENTITY OF THE LENDERS/CREDITO RS WAS DULY PROVED. VITAL DEFECT NOTICED BY ALL THE THREE REVENUE AUTHORITIES WAS TH E CREDITWORTHINESS OF THESE LENDERS. ON INQUIRY IT WAS BROUGHT ON RECORD THAT THEIR YEARLY EARNINGS WERE EITHER LESS OR ALMOST SIMILAR TO WHAT THEY GIFTED TO THE A SSESSEE. AND AGAIN ASSESSEE HAVING HIS EARNING THROUGH AGENCY COMMISSION HAD NO REASON TO BORROW SUCH AMOUNT AT A HIGH RATE OF INTEREST OF 24% PER ANNUM. CUMULATIVELY THIS LED THESE REVENUE AUTHORITIES AND THE TRIBUNAL TO CONCURRENTL Y CONCLUDE THAT THE TRANSACTION WAS NOTHING BUT A DESIGN TO BRING BACK IN A CIRCU ITOUS ROUTE HIS OWN MONEY BY PAYING THE HIGHER RATE OF INTEREST AND THEREBY SAVI NG THE TAX AS WELL. 18. THREE BASIC INGREDIENTS VIZ. (A) IDENTITY; (B) CREDITWORTHINESS AND (C) GENUINENESS OF THE TRANSACTION WHEN ARE CONSIDERED IT CANNOT BE DISPUTED THAT ALL THE THREE OF THEM REQUIRE INDEPENDENT CONSIDERATION AND YET THEY ARE NOT MUTUALLY EXCLUSIVE OR CAN BE CONSIDERED IN ISOLATION. IT HAR DLY NEEDS TO BE SPECIFIED THAT THE WELL RECOGNIZED PRINCIPLE OF NOT INSISTING UPON SOU RCE OF THE SOURCE NEEDS NO ELABORATION. UPON APPRECIATION OF MATERIALS ON RECO RD AND TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE THE REVENUE AUTHORITIES AND THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ENTIRE TRANSACTION WAS A CIRCUI TOUS ROUTE TO BRING ON BOOKS THE ASSESSEE'S OWN ACCOUNTED MONEY. THE FACTOR THAT THE DONORS DID NOT POSSESS INDEPENDENT SOURCE TO MAKE SUCH DEPOSITS MUST BE VI EWED IN LIGHT OF THE FINDINGS THAT THE ASSESSEE HAD NO JUSTIFICATION FOR BORROWIN G SUCH AMOUNTS AT SUCH HIGH RATE OF INTEREST. THESE ASPECTS WOULD HAVE A BEARING ON THE GENUINENESS OF THE TRANSACTION AND THE CREDIT WORTHINESS OF THE DONORS AND CANNOT BE SEEN AS AN ATTEMPT TO THROW THE BURDEN TO PROVE SOURCE OF THE SOURCE ON THE ASSESSEE. 19. AS IS VERY ELOQUENT FROM THE RECORD ITSELF SUB STANTIAL AMOUNT OF CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF ALL THE CREDITORS SHORTLY PRIOR TO ISSUANCE OF CHEQUES AND INSUFFICIENCY OF THE FUND WITH THE CRED ITORS WHEN COULD BE DULY ESTABLISHED FROM THE OVERALL FACTS AND CIRCUMSTANCE S OF THE CASE AND WHEN IT IS FURTHER FOUND AS A MATTER OF FACT THAT THE ASSESSEE HAD NO JUSTIFICATION FOR BORROWING SUCH AMOUNTS AT HIGH RATE OF INTEREST EVEN WITHOUT DISTURBING THE WELL ESTABLISHED PRINCIPLE OF NOT INSISTING ON THE ASSESSEE PROVING SOURCE OF THE SOURCE ON THE ROBUST FACTS OF THE REVENUE AUTHORITIES HAVE RIGHTLY NOT C ONCLUDED IN FAVOUR OF THE ASSESSEE. ALL ISSUES ARE ESSENTIALLY IN THE REALM OF APPRECIA TION OF FACTS. I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 13 OF 15 20. NO ERROR IS COMMITTED BY ANY OF THESE AUTHORITI ES TO TERM THE FINDINGS AS PERVERSE LEADING TO RAISE QUESTION OF LAW. 12. IN THE PRESENT CASE THE YEARLY EARNING OF LENDE RS WERE ALMOST WAS OF SIMILAR TO WHAT THEY LOANED TO THE AS SESSEE AND SUBSTANTIAL AMOUNT OF CASH DEPOSITED IN BANK ACCOUN T OF THE LENDERS SHORTLY PRIOR TO ISSUANCE OF CHEQUES BY THE M TO THE ASSESSEE. THUS THE FACTS IN THE CASE IN HAND ARE S QUARELY COVERED BY ABOVE DECISION. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT ADDITION IS UPHELD 13. FURTHER IN CASE OF GUJARAT FERTILISERS VS. CIT 293 ITR 70 (GUJ) IT WAS HAD THAT ALLEGED CREDITOR HAD NO MONEY AND WAS HARDLY ABLE TO SUSTAIN HIMSELF FROM AGRICULTURAL OP ERATIONS CARRIED ON BY HIM AND SAID TO HAVE GIVEN MONEY WHIC H WAS IN FACT GIVEN BY THE A PARTNER OF THE ASSESSEE FIR M. SUCH CASH CREDIT CANNOT BE HELD TO BE GENUINE. 14. THE DECISION IN CASE OF CIT VS. METACHEM INDUST RIES 245 ITR 160(MP) RELIED BY THE ASSESSEE IS DISTINGUISHABLE AS THERE WAS CONCURRENT FINDING OF CIT (A) AS WELL AS TRIBUNAL T HAT FIRM HAS SATISFACTORILY EXPLAINED THE SOURCE OF ENTRIES OF P ERSON FROM WHOM ADVANCES OR LOAN WAS TAKEN BUT IN THE PRESENT CASE THE SOURCE OF ENTRY PROVIDER IS NOT PROVED UP TO THE LEV OF TR IBUNAL HENCE I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 14 OF 15 SAID DECISION IS DISTINGUISHABLE ON FACTS AND CIRCU MSTANCES OF THE CASE. SIMILARLY OTHER CASE LAWS RELIED BY THE A SSESSEE ARE DIFFERENT FROM THE FACTS OF THE CASE. IN VIEW OF AB OVE THE FINDING OF THE A.O. IS UPHELD ACCORDINGLY THIS GROUND NO. 1 AND 2 OF APPEAL IS DISMISSED. 15. GROUND NO. 3 REGARDING ISSUE OF JURISDICTION IN RES PECT OF FIRST NOTICE IS NOT PRESSED BY THE LEARNED COUNSEL FOR TH E ASSESSEE HENCE SAME IS TREATED AS DISMISSED. 16. SO FAR AS GROUND NO. 4 OF CHARGING OF INTEREST U/S. 234B IS CONCERNED IT IS MANDATORY IN VIEW OF DECISION IN THE CASE OF ANJUM M.H. GHASWALA 252 ITR 1 (SC) OF HONBLE APEX COURT HOWEVER THE AO WILL ALLOW CONSEQUENTIAL RELIEF IF ANY AFTER ALLOWING APPEAL E FFECT OF THIS ORDER. 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMIS SED. 18. THE ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCT. 2016. SD/- ( . . ) (D.T.GARASIA) JUDICIAL MEMBER SD/- ( . . ) (O.P.MEENA) ACCOUNTANT MEMBER I.T.A. NO.687/IND/2015/A.Y:12-13/SHRI YASHWANT KUMA R MOTWANI (HUF) PAGE 15 OF 15 & / DATED : 27TH OCTOBER 2016.OPM