ITO - 4(2)(2), MUMBAI v. Smt. TRILOCHANA K. DOSHI, MUMBAI

ITA 937/MUM/2007 | 1992-1993
Pronouncement Date: 18-11-2011 | Result: Dismissed

Appeal Details

RSA Number 93719914 RSA 2007
Assessee PAN AJIPD2154K
Bench Mumbai
Appeal Number ITA 937/MUM/2007
Duration Of Justice 4 year(s) 9 month(s) 16 day(s)
Appellant ITO - 4(2)(2), MUMBAI
Respondent Smt. TRILOCHANA K. DOSHI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 18-11-2011
Date Of Final Hearing 03-11-2011
Next Hearing Date 03-11-2011
Assessment Year 1992-1993
Appeal Filed On 01-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH MUMBAI BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 937/MUM/2007 (ASSESSMENT YEAR: 1992-93) ITO 4(2)2 VS MISS TRILOCHANA K. DOSHI ROOM NO.644 6 TH FLOOR C/O SHEELA A. SHAH AAYKAR BHAVAN SARVODAYANAGAR G-15 MK ROAD MUMBAI 400020 GR.FLOOR CP TANK MUMBAI 400004 PAN AJIPD 2154 K APPELLANT RESPONDENT APPELLANT BY: MR. G.P. TRIVEDI DR RESPONDENT BY: MR. VIPUL B. JOSHI DATE OF HEARING: 03/11/2011 DATE OF PRONOUNCEMENT: /11/2011 O R D E R PER B. RAMAKOTAIAH A.M. THIS REVENUE APPEAL IS AGAINST THE ORDERS OF THE CI T-IV MUMBAI DATED 29.11.2006. THE REVENUE HAS RAISED THE FOLLOWING TW O GROUNDS IN ITS APPEAL: 1 A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE CIT (A) ERRED IN DELETING THE IMPROVED LOAN OF ` 26 00 000/- FROM M/S SUVIJAY COMMERCIAL & FINANCIAL CO. LTD AND INTEREST THEREON OF ` 4 23 400/- WITHOUT APPRECIATING THE FACT THAT ASSES SEE HAD FAILED TO ESTABLISH THE CAPACITY/CREDITWORTHINESS OF THE L OAN CREDITOR AS WELL AS THE GENUINENESS OF THE LOAN TRANSACTION. B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN RELYING ON THE W.T. ORDER OF ITAT IN THE CASE OF TH E ASSESSEE FOR ASSESSMENT YEAR 1992-93 WHEREIN THE DECISION WAS GI VEN ON THE BASIS OF DECISION IN THE EARLIER YEARS CASE AND NO T THE CURRENT YEARS FINDINGS. C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) FAILED TO APPRECIATE THAT THE W.T. ORDER OF ITAT IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1992-93 WAS PASSED MUCH BEFORE THE ORDER OF ITAT WHEREIN THE DIRECTION TO INVESTIGATE THE LOAN AFRESH WAS GIVEN. ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 2 D) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN IGNORING THE FINDINGS ARRIVED DURING THE COURSE OF SET ASIDE ASSESSMENT PROCEEDINGS. (2) (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS FAILED TO APPRECIATE FINDINGS OF FRESH ENQUIRY CARR IED OUT DURING THE COURSE OF SET ASIDE ASSESSMENT PROCEEDINGS. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS FAILED TO APPRECIATE THAT THE ITAT DIRECTED THE ASS ESSING OFFICER TO MAKE FRESH ENQUIRY AND ACCORDINGLY THE ASSESSING OF FICER MADE FRESH ENQUIRY WHEREIN ASSESSEE HAS FAILED TO PRODUC E ANY EVIDENCE TO SUBSTANTIATE THE RECEIPT OF SERVICES AN D GENUINENESS OF SUB-BROKERAGE PAID. (C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) FAILED TO APPRECIATE THAT THE STATEMENT GIVEN BY MR.SINGHEE W AS NOT RELIED UPON IN THE SET ASIDE ASSESSMENT AND THEREFORE THER E WAS NO NEED TO PROVIDE CROSS EXAMINATION OF MR.SINGHEE TO THE A SSESSEE. (D) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) FAILED TO APPRECIATE THAT THE AFFIDAVIT GIVEN BY MR.SINGHEE W AS ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE AND THEREFORE THE O ONUS WAS ON THE ASSESSEE TO PRODUCE MR.SINGHEE BEFORE THE AS SESSING OFFICER FOR EXAMINATION WHICH THE ASSESSEE FAILED T O DO. (E) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN OPINING THAT MR.SINGHEE WAS IN A POSITION TO INTROD UCE MANY CLIENTS TO THE ASSESSEE WHEREAS THERE IS NO EVIDENC E ON RECORD THAT THE CLIENTS WERE ACTUALLY INTRODUCED BY MR.SINGHEE . 2. THE ISSUES IN THE APPEAL ARE WITH REFERENCE TO THE TRANSACTIONS WITH M/S SURVIJAY COMMERCIAL & FINANCIAL CO. LTD. AN AMO UNT OF ` .26 00 000/- WAS RECEIVED AS A LOAN FROM THE SAID COMPANY BY THE ASSESSEE AND AN AMOUNT OF ` .4 23 400/- WAS PAID AS INTEREST. FURTHER THE SUB-B ROKERAGE PAYMENT WAS ALSO PAID TO M/S SURVIJAY COMMERCIAL & FINANCIAL CO. LTD. CONSEQUENT TO THE PROCEEDINGS BEFORE THE VARIOUS AU THORITIES PARTICULARLY CBI THE SAID COMPANY DIRECTOR HAS GIVEN A STATEMEN T TO THE ASSESSING OFFICER THAT IT WAS ONLY A HAWALA OPERATION AND THE MONEYS WERE REFUNDED TO THE ASSESSEE. BASED ON THE ABOVE STATEMENT PROCEED INGS WERE INITIATED IN THIS ASSESSMENT YEAR ALONG WITH THE EARLIER ASSESSM ENT YEARS AND ALSO LATER YEAR TO DISALLOW THE AMOUNTS PAID TO THE SAID COMPA NY AND FURTHER TO TREAT THE LOAN RECEIVED AS UNEXPLAINED CASH CREDIT. IN TH E ORIGINAL ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 THE MATTER WAS CAR RIED TO THE ITAT BY THE ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 3 REVENUE AND ITAT VIDE ORDER ITA NO.2635/MUM/1999 DA TED 15/12/2004 SET ASIDE THE ORDERS WITH A DIRECTION TO TAKE A FRE SH DECISION IN ACCORDANCE WITH THE LAW AND REMITTED THE MATTER BACK TO THE AS SESSING OFFICER WITH CERTAIN DIRECTIONS. PURSUANT TO THE ORDERS OF THE I TAT THE ASSESSMENT WAS REDONE BUT THE SAME ADDITIONS WERE REPEATED BY THE ASSESSING OFFICER. THE MATTER WAS CARRIED TO THE CIT (A) AND THE CIT (A) A FTER CONSIDERING THE ORDER OF THE ASSESSING OFFICER AND SUBMISSIONS MADE BY TH E ASSESSEE GAVE RELIEF ON ALL THE ISSUES AND ACCORDINGLY THE REVENUE HAS RAISED ABOVE GROUNDS. 3. THE ISSUE IN GROUND NO.1 IS AGAINST THE ADDITION OF ` .26.00 LAKHS ON ACCOUNT OF LOAN TAKEN FROM M/S SURVIJAY COMMERCIAL & FINANCIAL CO. LTD AND INTEREST OF ` 4 23 400/- PAID THEREIN. BRIEFLY STATED THE ASSESS EE EXPLAINED THAT LOANS OF ` .26.00 LAKHS FROM M/S SURVIJAY COMMERCIAL & FINANCIAL CO. LTD (SURVIJAY HEREAFTER) WAS A GENUIN E LOAN TRANSACTION ON THE FOLLOWING GROUNDS: (A) THE LOAN WAS RECEIVED BY CHEQUE (B) INTEREST WAS PAID BY CHEQUE (C) THE ENTIRE LOAN WAS REPAID BY CHEQUE (D) THE LENDER HAD NOT ONLY GIVEN CONFIRMATION BUT ALSO ADMITTED BEFORE THE ASSESSING OFFICER IN HIS STATEMENT THAT HE HAD GIVEN THE LOAN. (E) THE LENDER HAD ALSO EXPLAINED THE SOURCE OF LOANS. (F) THE COPIES OF BANK ACCOUNTS OF THE LENDER WERE ALSO SUBMITTED TO THE DEPARTMENT. (G) THE LENDER WAS A LIMITED COMPANY. (H) THERE WERE NO CASH DEPOSITS OF THE EVEN AMOUNTS IN THE BANK ACCOUNT OF THE LENDER PRIOR TO GIVING THE LOAN NOR WERE THERE CASH WITHDRAWALS IMMEDIATELY AFTER THE CHEQUES PERTAININ G TO INTEREST AND REPAYMENT WERE DEPOSITED IN THE LENDERS BANK A CCOUNT. (I) THERE IS NO PROVISION UNDER THE INCOME TAX ACT NOR IS THERE ASSESSMENT YEAR LEGAL PROPOSITION THAT ADDITION ON ACCOUNT OF LOAN WAS TO BE MADE IF THE PARTY DOES NOT HAVE INCOME TA X NUMBER. THE ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE E XPLANATION OF THE ASSESSEE FOR THE FOLLOWING REASONS: ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 4 A) THERE WAS NO DISPUTE ABOUT THE FACT THAT THE PURPOR TED LOAN WAS TAKEN BY CHEQUE AND REPAID BY CHEQUE. THE DISPUTE W AS ABOUT THE SOURCE OF THE FUNDS CAPACITY OF THE LOAN CREDITOR AS WELL AS GENUINENESS OF THE LOAN TRANSACTION. B) FURTHER THE LOAN CREDITOR HAD NOT MAINTAINED ANY BO OKS OF ACCOUNT. THE LOAN CREDITOR HAD JUST CLAIMED TO HAVE KEPT SOME LOOSE SHEETS. THE LOOSE SHEETS COULD NOT BE TREATED AS BOOKS OF ACCOUNTS. FURTHER IT DID NOT PROVE THE CAPACITY OF THE LOAN CREDITOR TO ADVANCE THE LOAN. C) THE ASSESSEES FURTHER CONTENTION THAT THERE WERE T RANSACTIONS WORTH CRORES OF RUPEES IN THE BANK ACCOUNT OF THE A SSESSEE AND IT PROVED THE CAPACITY OF THE LOAN CREDITOR WAS ALSO NOT ACCEPTABLE AS TRANSACTIONS WORTH CRORES OF RUPEES IN THE BANK ACC OUNT OF THE ASSESSEE WERE NOTHING BUT CREDITS OF CRORES OF RUPE ES. IN SUCH CIRCUMSTANCES ONLY THE FINANCIAL STATEMENTS AND BO OKS OF ACCOUNTS SHOULD PROVE THE CREDITWORTHINESS OF THE L OAN CREDITOR. SINCE NO RETURN OF INCOME AS WELL AS FINANCIAL STAT EMENT HAD BEEN FILED TO REFLECT THE CAPACITY OF THE LENDER THE RE LIANCE ON BOOKS OF ACCOUNTS OF THE LENDER WAS VERY IMPORTANT IN THIS P ARTICULAR CASE. SINCE BOOKS OF ACCOUNTS HAD NOT BEEN MAINTAINED AN D HAD NOT BEEN PRODUCED THE CAPACITY OF THE LOAN CREDITOR WA S NOT PROVED. D) AN ACTION HAD BEEN TAKEN BY THE CBI AGAINST MR.MANI KLAL SINGHEE WHO CLAIMED TO BE AUTHORISED PERSON OF M/S SURVIJAY IN CONNECTION WITH FALSE AND FORGED DOCUMENTS SHOWING PURCHASE OF MATERIAL UNDER LETTER OF CREDIT FROM M/S SURVIJAY AND DEFRAU DING THE BANK. IT SHOWED THAT THE NATURE COLOUR AND OWNERSHIP OF FUNDS IN HIS BANK ACCOUNT WERE DOUBTFUL. E) THE ONUS WAS ON THE ASSESSEE TO PROVE THE CAPACITY OF THE LOAN CREDITOR AS WELL AS GENUINENESS OF THE LOAN CREDITO R. F) THE ITAT IN ITS ORDER OBSERVED THAT THE FINANCIAL C APACITY OF THE CREDITOR WAS A MATTER OF EVIDENCE TO BE PROVED WHEN EVER A LOAN IS ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 5 SHOWN IN HIS NAME. THE CAPACITY OF THE LOAN CREDITO R AND GENUINENESS OF TRANSACTION REMAINED TO BE PROVED BY THE ASSESSEE. G) THE FACT THAT WHEN LOAN WAS TAKEN THERE WAS SUFFIC IENT BALANCE WITH THE ASSESSEE RUNNING INTO LACS OF THE RUPEES SHOWS THAT THERE WAS NO NEED OF TAKING LOAN BY THE ASSESSEE AND IT A LSO GAVE INDICATION THAT THE ASSESSEE ROUTED HER UNEXPLAINED MONEY IN THE BOOKS IN GUISE OF LOANS. IN VIEW OF THE ABOVE DISCUSSION THE ASSESSING OFFI CER HELD THE LOAN AS NON- GENUINE AND MADE ADDITION OF ` .26.00 LAKHS U/S 68 OF THE ACT AND DISALLOWED THE INTEREST PAYMENT CLAIMED OF `.4 23 4 00/- 4. IT WAS THE ASSESSEES SUBMISSION BEFORE THE CIT(A) THAT IN ITS APPELLATE ORDER IN THE ASSESSEES APPEAL UNDER WEAL TH TAX ACT IN WTA NO.355/M/1997 DATED 21 ST APRIL 2003 FOR ASSESSMENT YEAR 1992-93 HON'BLE ITAT HAS DECIDED THE MATTER OF CASH CREDIT FROM SURVIJAY AS GENUINE. IT WAS FURTHER CONTENDED THAT ALL THE THRE E CONDITIONS OF A GENUINE CASH CREDIT NAMELY I) IDENTITY OF THE CREDITOR I I) CREDITWORTHINESS OF THE CREDITOR; AND III) GENUINENESS OF THE TRANSACTION S TOOD SATISFIED IN THE ASSESSEES CASE. IT WAS ON THE BASIS OF THESE FACTS THAT CIT (A) EARLIER HAD TREATED THE LOANS AS GENUINE. THE ASSESSING OFFICER FAILED TO MEET THE DIRECTION OF HON'BLE ITAT AND COMPLETED THE ASSESS MENT ON THE BASIS OF THE ORIGINAL ASSESSMENT ORDER. HENCE THERE WAS NO CHANG E IN FACTS AND CIRCUMSTANCES OF THE CASE AND REMAIN AS THESE WERE BEFORE THE CIT (A) AT THE TIME OF ORIGINAL ASSESSMENT. THEREFORE THE CASH CR EDIT REQUIRES TO BE ACCEPTED AS GENUINE. 5. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS THE L EARNED CIT (A) DELETED THE ADDITIONS BY GIVING THE FOLLOWING FIND INGS: I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPE LLANT AND GONE THROUGH THE ASSESSMENT ORDER. I HAVE ALSO PERU SED THE APPELLATE ORDERS OF HON'BLE ITAT AND CIT (A). IN IT S APPELLATE ORDER THE TRIBUNAL SET ASIDE THE ASSESSMENT ON THE ISSUES OF ADDITIONS ON ACCOUNT OF CASH CREDIT AND PAYMENT OF SUB- BROKERAGE BY ISSUING DIRECTIONS TO THE ASSESSING OF FICER AND MAKING FOLLOWING OBSERVATIONS: ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 6 SO FAR AS THE CREDIT IN THE NAME OF SURVIJAY IS CON CERNED AND THE INTEREST PAID THEREON IT IS SEEN THAT SURVIJAY HAS CONFIRMED THE LOAN IN WRITING AND ALSO CONFIRMED IT IN THE CO URSE OF SINGHEES STATEMENT GIVEN ON 05.12.1996 UNDER SECTI ON 131. THE ASSESSING OFFICER HAS RELIED ON THE PROCEEDINGS FOR THE ASSESSMENT YEARS 1990-91 AND 1991-92 BOTH INCOME T AX AND WEALTH TAX FOR MAKING THE ADDITION. HE HAS NOT VER IFIED THE ASSESSEES CLAIM FOR THE PRESENT YEAR PROPERLY. SO FAR AS THE CASH CREDIT IS CONCERNED EACH YEAR MUST BE VIEWED AS AN INDEPENDENT YEAR AND MERELY BECAUSE THE LOAN FROM AN ENTITY HAS BEEN ACCEPTED IN AN EARLIER YEAR IT DOES NOT F OLLOW THAT ANY LOANS TAKEN FROM THE SAME ENTITY IN ALL THE SUBSEQU ENT YEARS SHOULD BE ACCEPTED AS GENUINE. THE ASSESSING OFFICE R HAS TO ENQUIRE INTO THE MATTER AFRESH IN EVERY YEAR WHENEV ER LOANS ARE SHOWS IN THE NAMES OF THE PARTY THOUGH SIMILAR LOA NS HAS BEEN ACCEPTED FROM THE SAME PARTY IN THE EARLIER YEARS.. . WE THEREFORE SET ASIDE THIS ISSUE AND RESTORE THE MAT TER TO THE FILE OF THE ASSESSING OFFICER WHO WILL NOW ENQUIRE INTO LO AN TRANSACTION AFRESH AND TAKE AFRESH DECISION IN ACCORDANCE WITH LAW AND AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF B EING HEARD. THE ASSESSING OFFICER CALLED FOR THE SAME INFORMATION DURING THE ASSESSMENT PROCEEDINGS AND REACHED THE S AME CONCLUSION AS IN THE ORIGINAL ASSESSMENT ORDER. THE OBSERVATION HON'BLE ITAT THAT THE FACT THAT IN EARL IER YEARS CASH CREDIT FROM A PARTICULAR ENTITY HAS BEEN ACCEPTED A S GENUINE DOES NOT MEAN THAT IN EVERY SUBSEQUENT YEAR ANY CRE DIT FROM THAT ENTITY WOULD NECESSARILY BE GENUINE APPLIES C ONVERSELY ALSO. THAT IS IF THE CASH CREDIT OF A PARTICULAR E NTITY IS NOT ACCEPTED AS GENUINE IN ONE YEAR THAT DOES NOT MEAN THAT IT SHOULD BE HELD AS NON-GENUINE IN ALL THE SUBSEQUENT YEARS. IN THE APPELLANTS CASE IN THE WEALTH TAX ASSESSMENT ORDER FOR THE YEAR UNDER CONSIDERATION THE ASSESSING OFFICER DIS ALLOWED THE DEBT OF ` .26 00 000/- AND ADDED THE SAME TO THE NET WEALTH O F THE ASSESSEE. IN ITS APPELLATE ORDER THE HON'BLE I TAT WHILE DISMISSING THE DEPARTMENTAL APPEAL HELD AS UNDER: SO FAR AS THE WEALTH-TAX APPEAL FOR ASSESSMENT YEAR 1992-93 IS CONCERNED IT IS CONSEQUENTIAL TO THE ADDITIONS MAD E IN THE INCOME-TAX ASSESSMENTS. THE ADDITION HAS BEEN MADE ON THE BASIS THAT THE LOANS TAKEN FROM M/S SURVIJAY COMMER CIAL & ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 7 FINANCIAL CO. LTD ARE GENUINE. IN VIEW OF OUR SPECI FIC FINDINGS THAT THE LOANS TAKEN FROM M/S SURVIJAY COMMERCIAL & FINANCIAL CO. LTD ARE GENUINE THE ADDITION MADE IN WEALTH-TA X ASSESSMENT OF THE ASSESSEE BECOMES INFRUCTUOUS. THUS FOR THE YEAR UNDER CONSIDERATION THE ITAT ITS ELF ACCEPTED THE LOAN OF SURVIJAY AS GENUINE AND DELETED THE ADD ITION IN THE WEALTH TAX APPEAL. HOWEVER IN THE INCOME TAX APPEL LATE ORDER DATED 15 TH DECEMBER 2004 WHILE REFERENCES TO INCOME TAX AND WEALTH TAX APPEALS FOR ASSESSMENT YEARS 1990-91 AND 1991-92 HAVE BEEN MADE IT PERHAPS DUE TO OVERSIGHT DID N OT TAKE INTO CONSIDERATION ITS WEALTH TAX APPELLATE ORDER DATED 21 ST APRIL 2003. KEEPING IN VIEW THE WEALTH TAX APPELLATE ORDE R OF THE ITAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS WELL AS THE OBSERVATIONS OF THE CIT (A) IN HER APPELLATE OR DER DATED 01.03.1999 IN RESPECT OF THE ORIGINAL ASSESSMENT OR DER AND ALSO THE FACTS AND CASE-LAWS RELIED UPON BY THE APP ELLANT I HOLD THAT THE CASH CREDIT FROM SURVIJAY AMOUNTING T O ` .26 00 000/- WAS GENUINE. CONSEQUENTLY THE INTERES T PAID THEREON WAS ALSO GENUINE. THE ADDITIONS OF ` .26 00 000/- AND ` .4 23 400/- ARE THEREFORE DELETED. 7. THE ISSUE IN GROUND NO.2 PERTAINS TO SUB-BROKERA GE PAID TO M/S SURVIJAY COMMERCIAL & FINANCIAL CO. LTD AND M/S EVE READY FINANCIAL & MERCANTILE CO. LTD TOTALLING TO ` 22 09 200/-. HOWEVER THE REVENUE CONTESTED THE BROKERAGE PAYMENT OF ` 15 24 650/- BEFORE THE ITAT IN THE ASSESSEES PROCEEDINGS AND CONSEQUENTLY THE CIT (A) CONSIDERED THE AMOUNT OF ` 15 24 650/-. BRIEF FACTS ARE THAT THE ASSESSEE EXPL AINED THAT PAYMENTS MADE WERE GENUINE CONTENDING THAT: (A) ALL THE PAYMENTS WERE EFFECTED BY ACCOUNT PAYEE CHE QUES. (B) THE PARTIES I.E. M/S SURVIJAY AND EVEREADY HAD INTR ODUCED NUMBER OF CLIENTS TO ASSESSEES BROKERING FIRM AND WHICH I N TURN BROUGHT VALUABLE BUSINESS. ALL THESE CLIENTS WERE INTRODUCE D BY SINGHEE GROUP. ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 8 (C) NO PRUDENT PERSON WOULD EVER PAY LACS OF RUPEES FOR NO SERVICES BEING RENDERED. (D) SIMILAR PAYMENT OF BROKERAGE TO MR.KANTILAL SINGHEE DIRECTOR OF M/S. SURVIJAY IN ASSESSMENT YEAR 1991-92 WAS ACCEPT ED BY THEN ASSESSING OFFICER. (E) MR. MANIKLAL SINGHEE FILED AFFIDAVIT SUBSEQUENTLY C ONFIRMING THE TRANSACTION. (F) MR.MANIK LAL SINGHEE HAD GOOD RELATIONS WITH SOME O FFICIALS OF CANBANK AND BANK OF INDIA MUTUAL FUNDS. HE PREPARED AN APPLICATION FOR EMPANELMENT AND GOT HER ON THEIR PA NEL. HE USED TO CONTACT THE DEALING OFFICERS OF THE FUNDS TO GET TH E ORDERS AND WOULD CONFIRM THE ORDERS WITH THEM AFTER EXECUTION OF THE SAME. FOR ALL PRACTICAL PURPOSES HE WAS HANDLING THE AFF AIRS WITH BOTH THE MUTUAL FUNDS. HOWEVER BANK RECORDS ONLY REFLEC TED THE NAME OF THE BROKER MEMBER AND NOT SUB BROKERS. (G) THOUGH THE INSTITUTION DOES NOT RECOGNIZE SUB BROKE R THEY ARE STILL PAID BY THE BROKERS. (H) THE CROSS EXAMINATION OF SHRI S.R. RAMRAJ SENIOR VI CE PRESIDENT CANBANK INVESTMENT MANAGEMENT SERVICES LTD. ON 22.2 .2006 DID NOT PROVE THAT THERE WAS NO SUB BROKERAGE IN THE TR ANSACTION BETWEEN THE BROKER AND THE BANK. (I) THE CROSS EXAMINATION OF SHRI V.K.CHETIWAL OF BANK OF INDIA WAS NOT DONE IN FAIR MANNER. EVEN OTHERWISE HE WAS NOT AWARE WHETHER THERE COULD BE INTERMEDIARY BETWEEN BROKER AND THE BANK. HENCE NO ADVERSE INFERENCE COULD BE DRAWN FROM HIS TESTIMONY. THE AO REJECTED THE EXPLANATION FOR THE REASONS GIV EN IN THE ASSESSMENT ORDER INCLUDING THE FOLLOWING: (I) MERE FACT THAT THE PAYMENT WAS EFFECTED BY CHEQ UE DID NOT PROVE THE GENUINENESS OF THE EXPENSES INCURRED. THE ONUS WAS ON THE ASSESSEE TO PROVE THAT THE PAYMENT WAS WHOLLY AND E XCLUSIVELY FOR THE BUSINESS OF THE ASSESSEE WHICH SHE FAILED TO DISCHARGE. (II) FURTHER IF A CLIENT WAS INTRODUCED BY MR. MANIKLAL SINGHEE THEY WHY THE ASSESSEE PAID BROKERAGE TO THE COMPANIES. F URTHER THE BROKERAGE WAS CLAIMED TO BE PAID TO TWO COMPANIES WITHOUT THERE BEING ANY EXPLANATION FOR THE BIFURCATION. TH E ASSESSEE ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 9 FAILED TO EXPLAIN IN WHAT CIRCUMSTANCES THE ASSESS EE PAID BROKERAGE TO COMPANIES INSTEAD OF MR.MANIKLAL SINGH EE. THE ASSESSING OFFICER HELD THAT THE ASSESSEE MADE A DJUSTMENT ENTRIES OF SUB BROKERAGE IN HER BOOKS TO REDUCE THE NET BROKERAGE OFFERED FOR TAXATION AS THE OFFICIALS OF CANBANK MUTUAL FUNDS AND BOI MUTUA L FUNDS HAD STATED THAT THERE WAS NO SUB BROKER INVOLVED IN THE TRANSA CTION BETWEEN THEM AND THE ASSESSEE. HE THEREFORE RETAINED THE DISALLOWA NCE OF SUB BROKERAGE PAID TO M/S SURVIJAY AND EVEREADY CLAIMED AT ` .22 09 200/- AND ADDED THE SAME BACK TO THE INCOME OF THE ASSESSEE. 8. THE ASSESSEE SUBMITTED BEFORE THE CIT (A) THAT A S PER THE DIRECTION OF THE HON'BLE ITAT THE ASSESSING OFFICER WAS REQUIR ED TO PROVIDE THE ASSESSEE AN OPPORTUNITY FOR EXAMINING SHRI SINGHEE ON THE BA SIS OF WHOSE STATEMENT THE SUB-BROKERAGE WAS DISALLOWED AND WHO HAD ADMITT ED BEFORE THE ITAT IN AN AFFIDAVIT THAT THE COMPANY HAD RECEIVED SUB-BROK ERAGE IN QUESTION. NO PROPER AND EFFECTIVE OPPORTUNITY FOR CROSS EXAMINAT ION WAS GIVEN DURING RECORDING OF STATEMENTS OF THE BANK OFFICIALS AS TH E ASSESSING OFFICER HIMSELF DICTATED THE ANSWERS TO QUESTIONS PUT BY THE ASSESS EE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. MOREOVER AT THE TIME OF AP POINTING SUB BROKERS THE THEN INCUMBENT BANK OFFICIALS WERE DIFFERENT FR OM THE ONES WHOSE STATEMENTS WERE RECORDED. HENCE THE OFFICIALS QUEST IONED BY THE ASSESSING OFFICER WERE AWARE OF THE FACTS AND THE ASSESSING O FFICER DID NOT ALLOW THE ASSESSEE TO CLARIFY THE POSITION. OTHER DETAILS REQ UIRED BY THE ASSESSING OFFICER COULD NOT BE PRODUCED AS THE SAID DETAILS R ELATED TO A PERIOD OF 14 YEARS AGO AND IT WAS NOT POSSIBLE IN VIEW OF THE FA CT THAT THE ASSESSEE HAD BEEN OUT OF BUSINESS SINCE LAST 10 YEARS. DURING TH E ORIGINAL ASSESSMENT PROCEEDINGS NO DETAILS REGARDING THE INCOME EMPLO YEES RELATIONS WITH THE SUB-BROKERS AND CLIENTS WERE CALLED FOR. THEN ONLY RELIANCE WAS PLACED BY THE ASSESSING OFFICER ON THE STATEMENT OF MR.SINGHE E. EVEN THEN WHEN THE ASSESSEE WAS GRANTED OPPORTUNITY TO CROSS EXAMINE M R.SINGHEE THE ASSESSING OFFICER STOPPED THE RECORDING OF CROSS EX AMINATION ABRUPTLY WHEN SHRI SINGHEE WAS ABOUT THE CONTRADICT HIMSELF AND A DJOURNED THE PROCEEDINGS. THUS THE CROSS EXAMINATION REMAINED IN CONCLUSIVE AND NO ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 10 FURTHER TIME WAS FIXED INSPITE OF REPEATED REMINDER S. COPY OF ALLEGED LETTER WRITTEN BY SHI SINGHEE WAS ALSO NOT SUPPLIED TO THE ASSESSEE. THE ASSESSEE EXTENDED FULL COMPLIANCE AND COOPERATION AND ALL TH E DETAILS AS ASKED FOR SUBMITTED. NO FURTHER INDEPENDENT VERIFICATION OR I NVESTIGATION WAS CARRIED OUT BY THE ASSESSING OFFICER. THE ASSESSEE POINTED OUT ANOMALIES/IN- CONSISTENCIES IN THE BANK STATEMENTS OF SHRI SINGHE E. THERE WERE NO CASH WITHDRAWALS IN THE BANK STATEMENT EXCEPT ` 6 00 000/- AS HAS BEEN MENTIONED IN THE CIT (A)S ORDER ALSO. NO PERSON IN DULGING IN HAWALA/ENTRY BUSINESS WOULD GIVE BACK ENTIRE AMOUNT WITHOUT ANY COMMISSION/ COMPENSATION. PAYMENT OF SUB-BROKERAGE WAS A REGULA R AND NORMAL FEATURE OF THE ASSESSEES BUSINESS. NO DISALLOWANCE WAS MAD E IN THE PAST. 9. THE CIT (A) CONSIDERED THE SUBMISSIONS OF THE AS SESSEE AND EVIDENCE ON RECORD AND DELETED THE ADDITIONS BY STATING AS UNDER: 3.6 AS REGARDS THE PAYMENTS OF SUB-BROKERAGE HON' BLE ITAT IN ITS ORDER HAS OBSERVED THAT THOUGH THE ASSESSING OFFICER DISALLOWED THE SUB-BROKERAGE OF ` 22 09 200/- THE GROUND TAKEN BEFORE IT BY THE DEPARTMENT REFERRED ONLY TO ` 15 24 650/-. THEREFORE IT ADOPTED THE FIGURE OF SU B- BROKERAGE AT ` .15 24 650/- AND SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HOW EVER HAS AGAIN ADDED ` 20 09 200/- INSTEAD OF ` 15 24 650/-. WHILE SETTING ASIDE THIS ISSUE THE HON'BLE TRIBUNAL ISS UED DIRECTIONS TO THE ASSESSING OFFICER AS UNDER: THE AFFIDAVIT DATED 2 ND JANUARY 2001 IN RELATION TO THE STATEMENT MADE BY SINGHEE ON 17.3.1997 HAS BEEN SWO RN TO AROUND THE SAME TIME WHEN THE APPLICATION FOR COMPO SITION OF THE COMPLAINT WAS BEING PROCESSED AND THEREFORE TH ERE IS NO GROUND TO DOUBT THE VERACITY OF THE AVERMENTS MADE THEREIN WITHOUT A DETAILED PROBE. CERTAINLY AT THIS STAGE T HE AFFIDAVIT NEED NOT BE SHUT OUT. A PERUSAL OF THE MATERIAL ON RECORD THUS GIVES AN IMPRESSION THAT THE RULES OF NATURAL JUSTI CE HAVE NOT BEEN PROPERLY COMPLIED WITH IN THE COURSE OF THE A SSESSMENT PROCEEDINGS. THE CIT(A) ERRED IN OUR VIEW IN DELETI NG THE DISALLOWANCE OF THE SUB-BROKERAGE ON THE GROUND THA T THE ASSESSEE HAS NOT BEEN GIVEN THE OPPORTUNITY TO COMP LETE THE CROSS EXAMINATION AND THAT THE ASSESSING OFFICER HA S CONDUCTED THE ASSESSMENT PROCEEDINGS IN HAPHAZARD MANNER ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 11 IGNORING THE FUNDAMENTAL PRINCIPLES OF QUASI-JUDICI AL PROCEEDINGS. HE OUGHT TO HAVE SET ASIDE THE ASSESS MENT PROCEEDINGS AND DIRECTED THE ASSESSING OFFICER TO G IVE FULL OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SINGHE E. IN THESE CIRCUMSTANCES WE ARE UNABLE TO UPHOLD THE ORDER OF THE CIT (A) DELETING THE ADDITION OF CASH CREDIT AND THE DISALL OWANCE OF THE SUB-BROKER5AGE. IN OUR VIEW EVEN WITH REGARD TO TH E ISSUE OF SUB-BROKERAGE PAYMENT THE MATTER HAS TO RECEIVE A FRESH CONSIDERATION IN THE HANDS OF THE ASSESSING OFFICER . WE DIRECT HIM TO CONDUCT A PROPER ENQUIRY INTO THE MATTER AND AFFORD AN OPPORTUNITY TO THE ASSESSEE OF CROSS EXAMINATION SI NGHEE FULLY. IT WOULD ALSO BE OPEN TO THE ASSESSING OFFICER AND THE ASSESSEE TO BRING ALL SUCH EVIDENCE ON RECORD INCLUDING THO SE RELATING TO THE RECORDS SEIZED BY THE CBI IN SUPPORT OF THEIR RIVAL STANDS. THE ASSESSING OFFICER SHALL TAKE A FRESH DECISION I N ACCORDANCE WITH LAW AFTER COMPLYING WITH OUT DIRECTIONS. HOWEVER THE PERUSAL OF THE ASSESSMENT ORDER REVEAL S THAT THE DIRECTIONS GIVEN BY HON'BLE ITAT HAVE NOT BEEN COM PLIED WITH. HE RATHER PUT THE ONUS OF PRODUCING MR.SINGHEE ALSO ON THE ASSESSEE. THE ASSESSEE EXPRESSED INABILITY TO PRODU CE SINGHEE UNDER THE PLEA THAT SHE HAD NO CONTROL OVER HIM. TH E ASSESSING OFFICER WAS CALLED TO MY OFFICE DURING TH E APPELLATE PROCEEDINGS AND ENQUIRED ABOUT THE OPPORTUNITY PROV IDED TO THE ASSESSEE FOR CROSS EXAMINATION OF SINGHEE AS PE R THE ITATS DIRECTIONS. HE STATED THAT NOTICE U/S 131 WA S ISSUED TO SINGHEE BUT HE DID NOT TURN UP. THEREFORE THE ADDI TION WAS AGAIN MADE ON THE BASIS OF HIS ORIGINAL STATEMENT THUS TOTALLY IGNORING THE AFFIDAVIT FURNISHED BY HIM BEFORE THE ITAT TO THE CONTRARY. UNDER THE CIRCUMSTANCES I AM LEFT WITH N O ALTERNATIVE BUT TO REVERT TO THE ORDER OF CIT (A) W HO AFTER DETAILED DISCUSSION DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE. IT IS ALSO PERTINENT TO NOTE THAT SUB-BRO KERS TO ANY MUTUAL FUNDS CERTIFICATES OR BONDS ETC. ARE NEVER APPOINTED WITH THE APPROVAL OF THE BANKS OR THE POST OFFICES OR INSURANCE COMPANIES. AS IS THE GENERAL PRACTICE WIT H THE BROKERS/AGENTS THEY WOULD GIVE A DISCOUNT/SUB-BROK ERAGE OUT OF THEIR COMMISSIONS/BROKERAGE IN ORDER TO INCR EASE THEIR BUSINESS AND GET OTHER INCENTIVES FROM THE PRINCIPA LS. THEREFORE IF THE BANK OFFICIAL DENIED KNOWLEDGE AB OUT ANY SUB-BROKERS IN THE CASE OF THE ASSESSEE THAT DOES N OT MEAN THAT THE ASSESSEE DID NOT MAKE PAYMENTS TO PERSONS BRINGING BUSINESS TO HER. IN THE EARLIER YEARS ALSO SUCH PAY MENTS WERE MADE TO THE SAME PARTIES AND THE SAME WERE ACCEPTED AS GENUINE BY THE DEPARTMENT. SINCE SINGHEE HAD CONTAC TS WITH POTENTIAL CLIENTS IT WAS NATURAL FOR THE ASSESSEE TO APPROACH HIM FOR INTRODUCING SUCH PEOPLE TO HER FOR HER BUSI NESS. IT WAS ONLY FOR SINGHEE TO ASSIGN ANY PERSON TO WHOM THE A SSESSEE ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 12 HAD TO MAKE PAYMENTS OF SUB-BROKERAGE. SINGHEE NEVE R DENIED THE RECEIPTS OF SUCH SUB-BROKERAGE. HE SIMPL Y STATED THAT THE AMOUNTS RECEIVED BY CHEQUES WERE IMMEDIATE LY RETURNED TO THE ASSESSEE IN CASH AFTER WITHDRAWING THE SAME FROM THE BANKS. HOWEVER THE ASSESSING OFFICER NEVE R BOTHERED TO VERIFY THE CONTENTION OF THE ASSESSEE THAT THE B ANK STATEMENTS DID NOT SHOW ANY CASH WITHDRAWALS IMMEDI ATELY AFTER PRESENTING THE CHEQUES TO THE BANKS. IN FACT IT WAS CONTENDED THAT APART FROM AN AMOUNT OF ` .6 00 000/- NO AMOUNT WAS WITHDRAWN IN CASH. THE ASSESSING OFFICER SIMPLY FOLLOWED THE ORIGINAL ASSESSMENT ORDER AND AGAIN DI SALLOWED THE SUB-BROKERAGE. IN VIEW OF THE ABOVE DISCUSSION AND THE OBSERVATIONS OF THE CIT (A) IN THE ORIGINAL APPELLA TE ORDER AS WELL AS THE FACT THAT NO OPPORTUNITY WAS GRANTED TO THE APPELLANT FOR CROSS EXAMINATION OF SINGHEE AS DIREC TED BY ITAT AND ALSO TAKING INTO CONSIDERATION THE FACT THAT SI NGHEE BY A SWORN AFFIDAVIT BEFORE THE ITAT CONTRADICTED HIS ST ATEMENT GIVEN BEFORE THE ASSESSING OFFICER I HOLD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN RETAINING THE DISALLOW ANCE OF ` 22 09 200/- AS AGAINST THE AMOUNT OF ` 15 24 615/- ADOPTED BY THE HON'BLE ITAT IN THE REASSESSMENT PROCEEDING S. ACCORDINGLY THE ADDITION OF ` 22 09 200/- IS DELETED. 10. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRES ENTATIVE AND THE LEARNED COUNSEL SHRI VIPUL JOSHI AND PURSUED THE PA PER BOOK FILED IN THIS REGARD RUNNING TO PAGES 291 AND SUBMISSIONS IN WRIT ING IN THIS REGARD. WE HAVE ALSO CONSIDERED THE ARGUMENTS OF THE RIVAL PAR TIES AND ALSO ORDERS OF THE ITAT IN EARLIER YEARS AND IN WEALTH TAX PROCEED INGS FOR THE SAME YEAR AND ALSO THE ORDER OF THE ITAT IN THE ASSESSEES CA SE FOR ASSESSMENT YEAR 1993-94 IN ITAT NO.5223/MUM/2007. AFTER CONSIDERIN G THE RECORD WE ARE OF THE OPINION THAT THERE IS NO CASE FOR DIFFERING FROM THE FINDINGS OF THE CIT (A). IN FACT THE ENTIRE CASE OF THE REVENUE STANDS ON THE ORIGINAL STATEMENT GIVEN BY SHRI SINGHEE THAT HE WAS A HAWALA OPERATOR . THIS ISSUE WAS CONSIDERED BY THE CIT (A) IN THE YEAR 1993-94 MORE ELABORATELY AND WAS CONSIDERED BY THE ITAT IN THAT ASSESSMENT YEAR IN I TA NO.5223/MUM/2007 DATED 13.2.2009 VIDE PARA NO.4 AS UNDER: 4. THE FIRST APPELLATE AUTHORITY IN OUR CONSIDERE D OPINION HAS RIGHTLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE . ON THE ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 13 FACTS AND IN THE CIRCUMSTANCES OF THE CASE HE HAS RIGHTLY HELD THAT (A) THE ASSESSEE HAS DISCHARGED HER PRIMARY ON US OF FILING CONFIRMATIONS. THE ASSESSING OFFICER HAD SOLELY REL IED ON THE STATEMENT OF SHRI SINGHEE THAT THE ASSESSEE HAD PAI D CASH TO HIM AND CONSEQUENTLY HE HAD ISSUED CHEQUE TO THE AS SESSEE WITHOUT MAKING ANY FURTHER ENQUIRY OR BRINGING ON R ECORD ANY EVIDENCE; (B) THE STATEMENT OF SHRI SINGHEE WAS TAK EN BEHIND THE BACK OF THE ASSESSEE AND NO OPPORTUNITY TO CROS S EXAMINE SHRI SINGHEE WAS PROVIDED; (C) THE STATEMENT OF SHR I SINGHEE DOES NOT INSPIRE ANY CONFIDENCE AS TO ITS CORRECTNE SS FOR THE REASON THAT HE HAD ACCEPTED OTHER TRANSACTIONS OF T HE ASSESSEE AS GENUINE AND NO EVIDENCE IN SUPPORT OF THE STATEM ENT HAS BEEN PRODUCED; (D) SHRI SINGHEE IS UNDER INVESTIGAT ION FROM VARIOUS GOVERNMENTAL AUTHORITIES INCLUDING CBI FOR FRAUDS AND HE IS RUNNING MANY CONCERNS HAVING FACTORIES AND AL SO LARGE TURNOVER OF SHARE DEALINGS. HIS BANK STATEMENTS SHO W CRORES OF RUPEES OF TRANSACTIONS AND HE HAS NOT FILED ANY RETURNS OF INCOME NOR WAS ANY AUDIT DONE. AS COMPARED TO THIS THE ASSESSEE IS A MODEST PERSON LIVING IN A MIDDLE LOWE R CLASS LOCALITY AND ONE WHO FILES REGULAR RETURNS OF INCOM E AND GETS HER ACCOUNTS AUDITED. SUCH STATEMENT OF SHRI SINGHE E WITHOUT ANY CORROBORATIVE EVIDENCE CANNOT BE RELIED UPON FO R MAKING THE ADDITION; (E) THE ASSESSING OFFICER HAD NOT FUR NISHED THE COPIES OF STATEMENTS OF SHRI SINGHEE TO THE ASSESSE E. THE ASSESSEE HAD FILED A CRIMINAL CASE AGAINST SHRI SIN GHEE FOR GIVING A FALSE STATEMENT AND SHRI SINGHEE ADMITTED TO SUCH WRONG DOING BY WAY OF FILING AN AFFIDAVIT BEFORE TH E MAGISTRATE AND THIS TESTIMONY HAS NOT BEEN DISPROVED BY THE RE VENUE AUTHORITIES; (F) DE HORS THE STATEMENT THERE IS AB SOLUTELY NOTHING ON RECORD IN SUPPORT OF THE ADDITION. THESE FINDINGS OF THE FIRST APPELLATE AUTHORITY IN OUR CONSIDERED OP INION ARE CORRECT AND NEED TO BE UPHELD. MOREOVER THE METROP OLITAN MAGISTRATE 14 TH COURT IN CASE NO.56/S/1997 ORDER DATED 04- 01-2001 AT PARAGRAPH E) ON PAGE 5 OBSERVED AS FOLLO WS: E) THE ACCUSED IS AWARE THAT HE HAD GIVEN CERTAIN STATEMENTS ORAL AS WELL AS WRITTEN TO THE INCOME-TAX DEPARTMEN T WHEREBY HE HAD ALLEGED THAT IN SOME OF THE TRANSACTIONS ABO VE CASH ELEMENT WAS INVOLVED AND THE SAME WERE NOT GENUINE. THE ACCUSED NOW ACCEPTS THAT THESE STATEMENTS WERE GIVE N TO THE DEPARTMENT WHEN HE WAS NOT IN PROPER STATE OF MIND AND WAS UNDER PRESSURE AND ON ILL ADVICE. THEY ARE CONTRARY TO THE FACTS AS STATED ABOVE. THE ACCUSED ALSO NOW ADMITS THAT A LL OTHER AVERMENTS MADE BY HIM WRITTEN OR ORAL BEFORE ANY A UTHORITY AGAINST THE COMPLAINANT ARE NOW REPUDIATED. THE ACC USED ALSO UNDERTAKES TO GIVE AND SUBMIT SUCH STATEMENTS UNDERTAKINGS AFFIDAVITS DEPOSITIONS ETC. WRITTEN AS WELL AS ORAL WHICH MAY BE CALLED UPON BY THE COMPLAINANT T O BE GIVEN ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 14 OR SUBMITTED BEFORE THE INCOME-TAX DEPARTMENT OR AN Y OTHER AUTHORITY TO PUT THESE FACTS ON RECORD AND TO CLARI FY THE ENTIRE ISSUE. AT PARAGRAPH H) IT IS RECORDED THAT THE ACCUSED UND ERTOOK THAT HE WILL NOT MAKE ANY STATEMENT BEFORE ANY AUTHORITY CONTRARY TO THE FACTS ADMITTED BEFORE THE METROPOLITAN MAGIS TRATE. AN UNCONDITIONAL APOLOGY WAS ALSO RENDERED. THESE FIND INGS HAVE NOT BEEN REBUTTED BY THE ASSESSING OFFICER BY WAY O F ANY EVIDENCE. ON THESE FACTUAL MATRIX WE ARE OF THE CO NSIDERED OPINION THAT THE ORDER OF THE FIRST APPELLATE AUTHO RITY HAS TO BE UPHELD. ACCORDINGLY WE UPHOLD THE ORDER OF THE FIR ST APPELLATE AUTHORITY. 11. SINCE THE SAID PERSON HAS WITHDRAWN THE STATEME NT BEFORE THE METROPOLITAN MAGISTRATE AND THESE FACTS WERE ALREAD Y ON RECORD THERE IS NO BASIS FOR THE REVENUE TO CONTEST THE ADDITION ON TH E BASIS OF THE STATEMENT ALONE. THE REVENUE FAILED TO SUBSTANTIATE ITS CLAIM THAT THE AMOUNTS ARE BOGUS AND ARE INCOME OF THE ASSESSEE. AS RIGHTLY CO NSIDERED BY THE CIT (A) THE ASSESSING OFFICER NOT ONLY FAILED IN FOLLOWING THE ITAT DIRECTIONS BUT ALSO IN GIVING PROPER CROSS EXAMINATION TO THE ASSESSEE. IN THE WEALTH TAX PROCEEDINGS THE ITAT ON THE BASIS OF THE EVIDENCE ON RECORD HELD THAT THE LOANS OF THE SAID COMPANY WERE GENUINE AND ALLOWED THE SAME. SINCE THE CIT (A) FOLLOWED THE ORDERS OF THE ITAT IN THE WEAL TH TAX PROCEEDINGS WHILE DELETING THE ADDITIONS ON ACCOUNT OF CASH CREDITS WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDERS OF THE CIT (A). CONSEQ UENTLY THE INTEREST AMOUNT ALSO HAS TO BE ALLOWED AS THE INTEREST WAS PAID ON THE LOAN TAKEN. IN VIEW OF THE FACTS ON RECORD THE GROUND NO.1 DESERVED TO BE DISMISSED. 12. WITH REFERENCE TO THE SUB-BROKERAGE CONTESTED I N GROUND 2 ALSO THERE IS EVIDENCE THAT THE AMOUNTS WERE BEING PAID AT TH E NORMAL RATES ALONG WITH OTHER SUB-BROKERS AND THESE AMOUNTS WERE ALLOWED IN EARLIER YEARS. THE REVENUE DID NOT SUBSTANTIATE ITS CONTENTIONS EXCEPT RELYING ON THE STATEMENT WHICH WAS WITHDRAWN SUBSEQUENTLY. IN VIEW OF THIS WE UPHOLD THE ORDER OF THE CIT (A) AND REJECT THE GROUND 2. ITA NO 937 OF 2007 OF MS.TRILOCHANA K. DOSHI MUMBAI 15 13. IN THE COURSE OF THE ARGUMENTS THE LEARNED COUN SEL RELIED UPON VARIOUS PROPOSITIONS REGARDING THE GENUINENESS OF T HE STATEMENT NOT GIVING OPPORTUNITY IN CROSS EXAMINATION NATURAL JUSTICE PREPONDERANCE OF PROBABILITIES ETC WHICH WE DO NOT INTEND TO DISCUS S HERE. SUFFICE TO SAY THAT WE HAVE CONSIDERED ALL THE ARGUMENTS EXAMINED THE DETAILS PLACED IN THE PAPER BOOK AND NOTED THAT THE FINDINGS OF THE CIT ( A) ARE IN CONSONANCE WITH FINDINGS OF THE ITAT IN OTHER PROCEEDINGS. 14. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER 2011. SD/- SD/- ( VIJAY PAL RAO) (B . RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED:18 TH NOVEMBER 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR E BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI VNODAN/SPS