The ACIT, 2(1), Indore v. Shri Kapil Mittal, Indore

ITSSA 22/IND/2011 | 2006-2007
Pronouncement Date: 30-12-2011 | Result: Allowed

Appeal Details

RSA Number 2222716 RSA 2011
Assessee PAN AAACN5983C
Bench Indore
Appeal Number ITSSA 22/IND/2011
Duration Of Justice 6 month(s) 21 day(s)
Appellant The ACIT, 2(1), Indore
Respondent Shri Kapil Mittal, Indore
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-12-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 30-12-2011
Assessment Year 2006-2007
Appeal Filed On 09-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JM AND SHRI R.C. SHARMA AM IT(SS)A NOS.3 TO 7/IND/2011 AYS: 2002-03 TO 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. M/S. NARMADA EXTRUSION LTD. INDORE PAN AAACN 5983 C RESPONDENT CO NOS. 25 TO 29/IND/2011 (ARISING OUT OF IT(SS)A NOS.3 TO 7/IND/2011) AYS: 2002-03 TO 2006-07 M/S. NARMADA EXTRUSION LTD. INDORE PAN AAACN 5983 C OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NOS.12 & 14/IND/2011 AYS: 2003-04 & 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. MAHESH MITTAL INDORE PAN ACVPM 4802 B RESPONDENT CO NOS. 21 & 22/IND/2011 (ARISING OUT OF IT(SS)A NOS.12 & 14/IND/2011) AYS: 2003-04 & 2006-07 MAHESH MITTAL INDORE -: 2: - 2 PAN ACVPM 4802 B OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NO.17/IND/2011 AY: 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. MAHESH MITTAL HUF INDORE PAN ACGHM 2046 G RESPONDENT CO NO. 20/IND/2011 (ARISING OUT OF IT(SS)A NO.17/IND/2011) AY: 2006-07 MAHESH MITTAL HUF INDORE PAN ACGHM 2046 G OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NOS.23 24 & 15/IND/2011 AYS: 2003-04 2005-06 & 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. SMT. VANDANA MITTAL INDORE PAN AIWPM 1000 A RESPONDENT CO NOS. 35 34 & 33/IND/2011 -: 3: - 3 (ARISING OUT OF IT(SS)A NOS.23 24 & 15/IND/2011) AYS: 2003-04 2005-06 & 2006-07 SMT. VANDANA MITTAL INDORE PAN AIWPM 1000 A OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NOS.21 & 22/IND/2011 AYS: 2003-04 & 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. KAPIL MITTAL INDORE PAN AFIPM 2508 Q RESPONDENT CO NOS. 13 & 12/IND/2011 (ARISING OUT OF IT(SS)A NOS.21 & 22/IND/2011) AYS: 2003-04 & 2006-07 KAPIL MITTAL INDORE PAN AFIPM 2508 Q OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NO.16/IND/2011 AY: 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT -: 4: - 4 VS. PRAVIN MITTAL INDORE PAN AFDPM 4586 R RESPONDENT CO NO. 31/IND/2011 (ARISING OUT OF IT(SS)A NO.16/IND/2011) AY: 2006-07 PRAVIN MITTAL INDORE PAN AFDPM 4586 R OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NOS.10 & 11/IND/2011 AYS: 2003-04 & 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. SMT. SHARDADEVI MITTAL INDORE PAN ACVPM 4511 B RESPONDENT CO NOS. 14 & 15/IND/2011 (ARISING OUT OF IT(SS)A NOS.10 & 11/IND/2011) AYS: 2003-04 & 2006-07 SMT. SHARDADEVI MITTAL INDORE PAN ACVPM 4511 B OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT -: 5: - 5 IT(SS)A NOS.8 & 9/IND/2011 AYS: 2003-04 & 2005-06 ACIT CIRCLE-2(1) INDORE APPELLANT VS. M/S. MALWA LAMINATORS INDORE PAN AAEFM 9597 L RESPONDENT CO NOS. 23 & 24/IND/2011 (ARISING OUT OF IT(SS)A NOS.8 & 9/IND/2011) AYS: 2003-04 & 2005-06 M/S. MALWA LAMINATORS INDORE PAN AAEFM 9597 L OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NO.25/IND/2011 AY: 2005-06 ACIT CIRCLE-2(1) INDORE APPELLANT VS. OMPRAKASH MITTAL HUF INDORE PAN AAGHM 2046 G RESPONDENT CO NO. 19/IND/2011 (ARISING OUT OF IT(SS)A NO.25/IND/2011) AY: 2005-06 OMPRAKASH MITTAL HUF INDORE -: 6: - 6 PAN AAGHM 2046 G OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT IT(SS)A NOS.27 TO 29/IND/2011 AYS: 2003-04 2005-06 & 2006-07 ACIT CIRCLE-2(1) INDORE APPELLANT VS. SMT. URMILA MITTAL INDORE PAN ABMPM 6200 B RESPONDENT CO NOS. 18 16 & 17/IND/2011 (ARISING OUT OF IT(SS)A NOS.27 TO 29/IND/2011) AYS: 2003-04 2005-06 & 2006-07 SMT. URMILA MITTAL INDORE PAN ABMPM 6200 B OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT ITA NO.79/IND/2011 AY: 2003-04 ACIT CIRCLE-2(1) INDORE APPELLANT -: 7: - 7 VS. PRAVIN MITTAL INDORE PAN AFDPM4586R RESPONDENT CO NO. 32/IND/2011 (ARISING OUT OF ITA NO.79/IND/2011) AY: 2003-04 PRAVIN MITTAL INDORE PAN AFDPM4586R OBJECTOR VS. ACIT CIRCLE-2(1) INDORE RESPONDENT ITA NO.89/IND/2011 AY: 2007-08 ACIT CIRCLE-2(1) INDORE APPELLANT VS. KAPIL MITTAL INDORE PAN ACVPM4802B RESPONDENT ITA NO.90/IND/2011 AY: 2007-08 ACIT CIRCLE-2(1) INDORE APPELLANT VS. NARMADA EXTRUSION LTD. INDORE PAN AAACN5983C RESPONDENT -: 8: - 8 DEPARTMENT BY : SHRI KESHAVE SAXENA CIT(D R) ASSESSEES BY : S/SHRI S.N. AGRAWAL AND RITESH JAIN CAS DATE OF HEARING : 21.10.2011 DATE OF PRONOUNCEMENT : 30.12.2011 O R D E R PER BENCH THESE APPEALS & CROSS-OBJECTIONS ARE FILED BY THE ASSESSEES AND REVENUE AGAINST THE DIFFERENT ORDERS OF LD. CIT(A)-UJJAIN DATED 22.3.2011 FOR THE ASSESSMENT Y EARS AS MENTIONED ABOVE IN THE MATTER OF ORDERS PASSED U/S 153A R.W.S. 143(3) OF THE I.T. ACT 1961. 2. IN DEPARTMENTAL APPEALS THE FOLLOWING COMMON GR OUNDS HAVE BEEN RAISED: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN: - 1. DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNSECURED LOAN U/S 68 OF THE I.T. ACT BY WAY OF ACCOMMODATION ENTRIES OBTAINED BY THE ASSESSEE FROM LUNKAD GROUP. -: 9: - 9 2. DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF INTEREST EXPENSES BEING PAID FOR ACCOMMODATION ENTRIES OBTAINED FROM LUNKAD GROUP WHICH HAS BEEN RECEIVED BACK IN CASH FROM THE OPERATOR. 3. DELETING THE ADDITION MADE U/S 69A OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED SOURCE OF EXPENSES INCURRED FOR THE PAYMENT OF COMMISSION TO LUNKAD GROUP FOR PROVIDING ACCOMMODATION ENTRIES @5% AS OUT OF BOOK EXPENDITURE. 3. WHEREAS IN THE CROSS-OBJECTIONS THE FOLLOWING COMMON GROUNDS HAVE BEEN RAISED: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE ACT OF AO IN ISSUING NOTICE U/S 153A OF THE I.T. ACT FOR THE YEARS UNDER CONSIDERATION EVEN WHEN NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEES DURING THE COURSE OF SEARCH. THUS THE NOTICES AS ISSUED U/S 153A OF THE I.T. ACT AND ASSESSMENTS FRAMED ACCORDINGLY REQUIRE TO BE QUASHED ON THIS ACCOUNT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) ERRED IN CONFIRMING THE ACT OF AO IN MAKING ADDITIONS IN THE CASE OF ASSESSEES IN RESPECT OF CASH CREDIT EVEN WHEN THE ENTIRE AMOUNTS OF CASH CREDIT WERE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEES PRIOR TO THE DAT E OF SEARCH AND NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEES. THUS THE ADDITIONS MADE IN THE CASE OF THE ASSESSEES IN RESPECT OF CASH CREDITS ON THE BAS IS OF INFERENCES AND PRESUMPTIONS AND THAT TOO IN THE 153A PROCEEDINGS ARE WRONG. THE SAME REQUIRE TO BE DELETED IN FULL. -: 10: - 10 4. COMMON GROUNDS RAISED BY THE REVENUE IN ALL THE YEA RS RELATES TO DELETION OF ADDITION ON ACCOUNT OF UNSEC URED LOAN U/S 68 OF THE INCOME-TAX ACT 1961 WHICH WAS ALLE GED TO BE TAKEN BY THE ASSESSEE BY WAY OF ACCOMMODATION ENTRI ES FROM LUNKAD GROUP. 5. FACTS IN BRIEF ARE THAT A SEARCH U/S.132 OF THE INCOME TAX ACT 1961 WAS CONDUCTED AT THE BUSINESS AND OFFICE PREMISES OF ASSESSEE GROUP [KNOWN AS MITTAL GROUP] ON 05.10.2006. DURING THE COURSE OF SEARCH THE ASSESSEE GROUP SURRENDERED ADDITIONAL INCOME OF RS. 2 CRORES AND DISCLOSED THE SAME UNDER VARIOUS HEADS IN THE HANDS OF SHRI MAHESH MITTAL AND SHRI PRAVEEN MITTAL IN A.Y.2007 - 08. THE ADDITIONAL INCOME ON THOSE HEADS SO SURRENDERED WERE ACCEPTED AS IT IS. HOWEVER WHILE COMPLETING THE ASSESSMENT IN PURSUANCE TO NOTICES U/S.153A FOLLOWING THE SEARCH FURTHER ADDITIONS WERE MADE ON ACCOUNT OF LOAN RECEIVED BY THEM THROUGH ACCOMMODATION ENTRIES FROM LUNKAD GROUP OF COMPANIES. THOSE ADDITIONS WERE MADE ON THE -: 11: - 11 BASIS OF A SURVEY U/S. 133A WHICH WAS UNDERTAKEN AT THE BUSINESS PREMISES (13 RACE COURSE ROAD INDORE) OF THE VARIOUS COMPANIES OF THE LUNKAD GROUP ON 02.05.2006 I.E. FEW MONTHS PRIOR TO THE DATE OF SEARCH IN ASSESSEE GROUP [MITTAL GROUP] OF CASES. THE SURVEY HAD REVEALED THE MODUS OPERANDI ADOPTED BY LUNKAD GROUP IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS NEEDY PERSONS I.E. BENEFICIARIES. 6. DURING THE COURSE OF ASSESSMENT U/S 153A FOR ASSESSMENT YEAR 2002-03 IN CASE OF NARMADA EXTRUSIO N LIMITED THE AO OBSERVED THAT UNSECURED LOAN RECEI VED BY THE ASSESSEE WAS AS UNDER :- S.NO. NAME OF THE COMPANY UNSECURED LOANS DURING ASSESSMENT YEAR 2002-03 INTEREST ON IT 1. RAJVIR MARKETING & INVESTMENT PVT.LTD. RS. 22 00 000 16 701 2. RAJVIR BIOTECH (P)LTD. RS. 38 00 000 41 983 TOTAL RS. 60 00 000 58 684 -: 12: - 12 THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSEE VIDE ORDER SHEET ENTRY WAS ASKED TO PRODUC E THE DIRECTORS OF ABOVE COMPANIES FOR ASCERTAINING THE S OURCES OF LOAN TAKEN AND TO PROVE THE GENUINENESS AND CREDITW ORTHINESS OF THE LOAN TRANSACTION/CREDITOR AS PER SECTION 68 OF THE INCOME-TAX ACT 1961. THE ASSESSEE COULD NOT PRODUC E THE CREDITORS AND SUBMITTED AS UNDER :- (I) THAT YOU HAVE ASKED FROM THE ASSESSEE TO PRODUCE TH E DIRECTOR OF RAJVIR MARKETING AND INVESTMENT P.LTD. AND RAJVIR BIOTECH (P) LTD. FROM WHOM UNSECURED LOAN WE RE TAKEN DURING THE YEAR. IN THIS RESPECT WE HAVE TO SUBMIT AS UNDER :- (I) CONFIRMATIONS LETTERS IN RESPECT OF LOAN TAKEN FROM THE ABOVE PARTY IS ENCLOSED. 1. (II) AFFIDAVIT OF THE ABOVE PARTY DULY NOT ARIZED CONFIRMING THE ABOVE/TRANSACTIONS AR E ENCLOSED. (III) THAT THE ASSESSEE HAS RECEIVED TH E ENTIRE AMOUNT OF LOAN THROUGH ACCOUNT PAYEE CHEQUES. THAT WHEN THE AMOUNTS OF LOAN WERE RECEIVED BY THE ASSESSEE -: 13: - 13 THROUGH ACCOUNT PAYEE CHEQUES AND CONFIRMATION LETTERS DULY SIGNED BY THE CREDITORS HAVE BEEN FILE D AND MORE SO WHEN THEY ARE ASSESSED TO TAX THE ASSESSEE HAS DISCHARGED ITS ONUS LYING ON HIM. THAT IF YOU HAVE ANY DOUBT ABOUT THE GENUINENESS OF THE SAID TRANSACTION YOU ARE REQUESTED TO DIRECTLY COLLECT NECESSARY INFORMATION FROM BOTH TH E PARTIES. WITHOUT PREJUDICE TO THE ABOVE (III) THAT HON'BLE JURISDICTIONAL HIGH COURT HAS CONSISTENTLY HELD THAT ONCE THE ASSESSEE HAS FURNISHED CONFIRMAT ION LETTERS DULY SUPPORTED BY AFFIDAVITS AND IDENTITY O F THE CREDITORS STANDS PROVED. IN THAT CASE IF THE A.O. I S NOT SATISFIED ABOUT THE CAPACITY OF THE SAID CREDITORS THE AMOUNT SHOULD BE ADDED TO THE INCOME OF THE CREDITO RS AND NOT IN THE CASE OF THE ASSESSEE. ' THE ASSESSEE HAS FAILED TO PRODUCE THE ABOVE PARTY WHICH IS VERY WELL KNOWN AS LUNKAD GROUP EVEN AFTER SPEC IFIC OPPORTUNITY THUS THE ASSESSEE FAILED TO PROVE THE IDENTITY -: 14: - 14 GENUINENESS AND CREDITWORTHINESS OF PARTIES PROVIDI NG UNSECURED LOANS.-MERELY SUBMITTING CONFIRMATIONS A LONG WITH POSTAL ADDRESS AND PAN DO NOT CONFIRM THE CREDITWOR THINESS AND GENUINENESS OF THE TRANSACTIONS. 7. THE AO FURTHER OBSERVED THAT THE DEPARTMENT ON 2.5.2006 CONDUCTED SURVEY ON THE BUSINESS PREMISES OF LUNKAD GROUP OF THE COMPANIES AND AFTER POST SURVE Y INVESTIGATIONS SEVERAL INCRIMINATING FACTS ABOUT TH E BUSINESS OF LUNKAD GROUP CAME TO THE LIGHT OF THE DEPARTMENT . THE LOANS RECEIVED FROM THE ABOVE PARTIES WERE MERELY ACCOMMODATION ENTRIES AS THEY HAVE GIVEN LOANS AFTE R RECEIVING CASH FROM THE CONCERNED PARTIES. THESE ACCOMMODATI ON ENTRIES CAME TO THE LIGHT OF THE DEPARTMENT ONLY AFTER THE ABOVE SURVEY. DETAIL OF COMPANIES INVOLVED :- 3(A) LUNKADS COMPANIES :- DURING THE SURVEY AND IN POST SURVEY INVESTIGATIO N DETAILS OF SEVERAL COMPANIES WERE FOUND. IN THESE C OMPANIES -: 15: - 15 SHRI VIJAY LUNKAD SHRI SANJEEV LUNKAD SHRI RITESH LUNKAD THEIR FAMILY AND STAFF MEMBERS WERE FOUND TO BE INV OLVED AS DIRECTORS. THESE ALLEGED COMPANIES ARE :- S.NO. NAME OF COMPANY DIRECTORS CORRESPONDENCE/ REGD.OFFICE REMARKS 01. LUNKAD SECURITIES LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE. 02. LUNKAD MEDIA & ENTERTAINMENT LIMITED/LUNKAD REAL ESTATE LIMITED SANJEEV/ LUNKAD/SNEHA LUNKAD/RACHNA LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE. 03 PARKSON SECURITIES LIMITED 04 LAGOON RESORTS (P)LTD. VIJAY LUNKAD/SHARAD DARAK LUNKAD HOUSE 13 RACE COURSE INDORE. 05 PARTH CREDIT & CAPITAL MARKET LIMITED SANJEEV LUNKAD/SANJAY BINDAL 21-AMBER M.G. ROAD INDORE. 06 SAOKAR INVESTMENT & FINANCE LIMITED VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE 13 RACE COURSE INDORE 07 HISTORIC ARTS & EXPORTS (P)LTD. VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE 13 RACE COURSE INDORE 08 RAJVEER MARKETING & INVESTMENT LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE 09 WEST-END MANAGEMENT TECHNOLOGIES (P) LTD. VIJAY LUNKAD/SANJAV BINDAL LUNKAD HOUSE 13 RACE COURSE INDORE 10. RAJVEER BIOTECH (P) LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE 11 PRATEEK REALITY (P) LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE 12. ALPINE EISEN LIMITED SANJEEV/ LUNKAD/SNEHA LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE 13. INDORE BIOSOFT(P)LTD. 14. RITESH INVESTMENT (P) LTD VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE 13 RACE COURSE INDORE 15. CELERITY CAPITAL MARKET & FINVEST (P) LGTD. VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE 13 RACE COURSE INDORE 16 ALPINE AGROTECH LIMITED SANJEEV/ LUNKAD/SNEHA LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE -: 16: - 16 17 ALPINE INFOSYS LTD SANJEEV/ LUNKAD/SNEHA LUNKAD LUNKAD HOUSE 13 RACE COURSE INDORE 18 HIMALYA GRAH NIRMAN SAHAKARI SAMITI MARYADIT THE IMPOUNDED DOCUMENTS SO FOUND AT LUNKAD GROUP WA S REPRODUCED BY ASSESSING OFFICER AS UNDER :- MORE EXAMPLES FROM LUNKAD COMPANIES IMPOUNDED MATERIAL . DATE NAME CASH PAYMENTS CASH RECEIPTS 3/4/2006 SANDEEP 50 000 3/4/2006 TULSI YAN 1 00 000 3/4/2006 RITESH 1 00 000 3/4/2006 BANK 5 10 000 3/4/2006 DARAK 5 00 000 3/4/2006 BANK 3 50 000 3/4/2006 CHOPRAJI 5 00 000 4/4/2006 RITESH 4 000 4/4/2006 BANK 19 000 4/4/2006 TICKET SUNIL 4 700 4/4/2006 DARAK 1 000 000 4/4/ 2006 DARAK 1 000 000 4/4/2006 BANK 150 000 4/4/2006 CHOPRAJI 500 000 4/4/2006 BHABHI 10 000 -: 17: - 17 4/4/2006 BANK 1 000 4/4/2006 BINDAL 19 000 4/4/2006 BANK 99 000 4/4/2006 DADDY 33 500 4/4/2006 PETROL GETZ 1 000 4/4/2006 RECHARGE (1850) 2 000 4/4/2006 DEWAS 10 000 5/4/2006 DARAK 300 000 5/4/2006 BINDAL 650 001 5/4/2006 DARAK 1 400 000 5/4/2006 BANK 975 000 5/4/2006 BANK 775 000 5/4/2006 BANK 12 000 5/4/2006 BANK 1 700 000 5/4/2006 DADDY MANALI 10 000 7/4/2006 MEHTAJI 1 800 00 0 7/4/2006 SUNIL 30 000 7/4/2006 DARAK 1 800 000 7/4/2006 MEHTAJI 3 200 00 7/4/2006 DARAK 7 50 000 7/4/2006 RITESH RETURN 4 000 7/4/2006 RITESH PERSONAL 5 000 7/4/2006 BANTHIAJI 29 800 -: 18: - 18 7/4/2006 BANK 9 75 000 7/4/2006 BANK 9 50 000 7/4/2 006 BANK 5 50 000 7/4/2006 BANK 5 00 000 7/4/2006 P.G. 5 50 000 7/4/2006 ANILJI 2 00 000 8/4/2006 MEHTAJI 2 000 000 8/4/2006 DARAK 500 000 8/4/2006 BANK 2 530 000 8/4/2006 BANK 700 000 8/4/2006 DARAK PACKET RET 10 000 8/4/2006 LAXMINARAY AN 7 000 8/4/2006 ANANYA BUS 5 000 8/4/2006 SANJU PERSONAL 2 000 10/4/2006 MEHTAJI 2 000 000 10/4/2006 DARAK SHORT RE 10 000 10/4/2006 BANK 990 000 10/4/2006 BANK 995 000 10/4/2006 AUDIT 2 000 10/4/2006 AIR CONDITIONER 1 000 10/4/2006 RIT ESH PERSONAL 1 000 10/4/2006 FORM 1 000 -: 19: - 19 10/4/2006 CABLE 500 10/4/2006 BINDAL 2 000 10/4/2006 DHAR 25 000 12/4/2006 MEHTAJI 12/4/2006 BANK 12/4/2006 DARAK CAR 12/4/2006 SUNIL 12/4/2006 SALARY GHAN 12/4/2006 TENNIS RACKET 12/4/200 6 RAJESH 12/4/2006 P.G. 12/4/2006 PETROL GETZ 13/4/2006 DARAK 13/4/2006 ANILJI 13/4/2006 DARAK 13/4/2006 BANK 13/4/2006 CRICKET TICKET 13/4/2006 DADDY 13/4/2006 BANK 14/4/2006 A SHAH 14/4/2006 ANILJI TICKET 14/4/2006 DIE SEL INNOVA 14/4/2006 COROLLA PETROL 14/4/2006 RACHANA -: 20: - 20 TICKET 14/4/2006 HUKUMDAS 14/4/2006 SANJEEV PERSONAL 14/4/2006 HOTEL 14/4/2006 BANTIHIAJI 14/4/2006 SANJAY BINDAL 15/4/2006 BANK 980 000 17/4/2006 DARAK 2 500 000 17/4/2006 ANILJI 1 500 000 17/4/2006 DARAK 500 000 17/4/2006 DARAK 1 500 000 17/4/2006 BANK 3 585 000 17/4/2006 SUNIL 500 000 18/4/2006 DARAK 43 000 18/4/2006 200 PACK REC 10 000 18/4/2006 P.G. 200 000 18/4/2006 DARAK 957 000 18/4/2006 BANK 1 990 0 00 18/4/2006 A.SHAH 300 000 18/4/2006 FARM NANU 2 000 18/4/2006 KUBER 5 100 18/4/2006 BANK 475 000 18/4/2006 BANK 50 000 -: 21: - 21 18/4/2006 P.G. 2 000 000 19/4/2006 TULSIYAN 100 000 19/4/2006 P.G. 1 000 000 19/4/2006 P.G. 5 00 000 19/4/2006 BA NK 17 95 000 19/4/2006 BANK 30 000 19/4/2006 NOTE SHORT PACK MODERN 10 000 19/4/2006 MEHTAJI 5 000 20/4/2006 BANK 500 000.00 21/4/2006 BANK HSBC 25 000 21/4/2006 NARMADA 3 500 000 21/4/2006 DADDY 17 700 21/4/2006 SEEDS 3 000 21/4/2006 PET ROL 2 000 22/4/2006 MEHTAJI 2 000 000 22/4/2006 BANK 995 000 22/4/2006 BANTHIAJI 500 000 22/4/2006 RITESH PERSONAL 2 500 22/4/2006 BRACKET 3 000 24/4/2006 DARAK 1 050 000 24/4/2006 BANK 1 990 000 24/4/2006 SUNIL 250 000 24/4/2006 PLANTS DHAR 10 000 -: 22: - 22 24/4/2006 SANJU DHAR 8 000 24/4/2006 GETZ PET 2 000 25/4/2006 NARMADA 300 000 25/4/2006 BANK 1 795 000 25/4/2006 BANK 50 000 25/4/2006 OPEL REPAIR 2 000 25/4/2006 SUNSHINE SOCIETY 10 000 25/4/2006 ICICI BANK 25 000 25/4 /2006 DHAR 30 000 25/4/2006 P.G. 500 000 25/4/2006 P.G. 1 500 000 25/4/2006 SWATI TICKET 5 000 26/4/2006 AJAY 1 000 000 26/4/2006 DARAK 4 000 000 26/4/2006 BANK 995 000 26/4/2006 ANJLI CHALLAN 2 000 26/4/2006 SANJU 50 000 26/4/2006 BANK 750 000 27/4/2006 BANK 1 990 000 27/4/2006 BANK 10 000 27/4/2006 SANJAY AGRAWAL ON A/C 41 000 27/4/2006 P.G. 354 350 -: 23: - 23 28/4/2006 DARAK 450 000 28/4/2006 MEHTAJI 1000 000 28/4/2006 BANK 2 350 000 28/4/2006 SUNIL 300 000 28/4/2006 DE WAS 200 000 28/4/2006 BANK 250 000 28/4/2006 UNCLE 50 000 29/4/2006 DEWAS GARLIC 41 500 29/4/2006 NARMADA 900 000 29/4/2006 NARMADA 1 100 000 29/4/2006 NARMADA 5 00 000 29/4/2006 UNCLE 50 000 29/4/2006 BANK 950000 29/4/2006 SACHIN 608000 29/4/2006 AMIT 100 000 29/4/2006 SUNIL 300 000 1/5/2006 NARMADA 850 000 1/5/2006 AMIT 100 000 1/5/2006 SANJAY RETURN 26 000 1/5/2006 NARMADA 150 000 1/5/2006 BANK 995 000 1/5/2006 MOBILE RECHARGE 1 100 1/5/2006 P.G. 500 000 -: 24: - 24 1/5/2006 COROLLA PETROL 2 250 1/5/2006 BANK 950 000 1/5/2006 RITESH REL. IPO 26 000 5. LIST OF BANK ACCOUNTS : S.NO. NAME OF COMPANY BANK ACCOUNT NO. 01. LUNKAD SECURITIES LTD. CENTURION BANK HSBC BANK IDBI BANK 02 LUNKAD MEDIA & ENTERTAINMENT LIMITED/LUNKAD REAL ESTATE LIMITED BANK OF RAJASTHAN CENTURION BANK HSC BANK IDBI BANK 03 PARKSON SECURITIES LTD CENTURION BANK 04 LAGOON RESTORTS (P) LTD. BANK OF RAJASTHAN 05 PARTH CREDIT & CAPITAL MARKET LTD. CENTURION BANK 06 SAOKAR INVE STMENT & FINANCE LTD. CENTURION BANK BANK OF RAJASTHAN 07 HISTORIC ARTS & EXPORTS (P) LTD. BANK OF RAJASTHAN 08 RAIVEER MARKETING & INVESTMENT LTD. BANK OF RAJASTHAN 09 WEST - END MANAGEMENT TECHNOLOGIES (P) LTD. CENTURION BANK 10 RAJVEER BIOTE CH (P) LTD. CENTURION BANK 11 PRATEEK REALITY (P) LTD. CENTURION BANK BANK OF RAJASTHAN 13 INDORE BIOSOFT (P) LTD. CENTURION BANK -: 25: - 25 14 RITESH INVESTMENT (P) LTD BANK OF RAJASTHAN 15 CELERITY CA P ITAL MARKET & FINVEST ( P) LTD. BANK OF RAJASTHAN CENTURION BANK 16 ALPINE AGROTECH LIMITED CENTURION BANK 17 ALPINE INFOSYS LIMITED BANK OF RAJASTHAN CENTURION BANK 18 HIMALYA GRAH NIRMAN SAHAKARI SAMITI MARYADIT BANK OF RAJASTHAN CENTURION BANK 8. IN VIEW OF THE ABOVE DISCUSSION THE AO HELD THAT T HE LOAN TRANSACTIONS WITH M/S. RAJVIR MARKETING & INVESTMEN T P.LTD. AND M/S. RAJVIR BIOTECH (P) LTD ARE MERELY ACCOMMO DATION ENTRIES. THE CASH HAS BEEN RECEIVED BY THE SAID COM PANY FROM THE ASSESSEE AND AFTER BEING ROUTED THROUGH VARIOUS COMPANIES THIS AMOUNT WAS GIVEN BY CHEQUES TO THE ASSESSEE. THE ASSESSEES SUBMISSION THAT LOAN RECEIVED IS GEN UINE IS NOT AT ALL ADMISSIBLE. THE NON ATTENDANCE/NON CO-OPERAT ION AND FAILURE TO EXPLAIN THE SOURCE OF THE FUND UTILIZED BY THE LOAN CREDITOR FURTHER CONFIRM THE MENS REA. HENCE THE A MOUNT OF -: 26: - 26 RS. 60 00 000/- RECEIVED FROM THE SAID COMPANIES (C ALCULATED ON THE BASIS OF PEAK CREDIT AS DISCUSSED HERE UNDER ) IS TREATED AS UNEXPLAINED CASH CREDIT AND SHALL BE ADDED TO TH E INCOME OF THE ASSESSEE U/S 68 OF INCOME-TAX ACT. 9. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- 4.2.3 IN THE CONTEXT OF THE FACTS AND FINDINGS AS GIVEN IN THE LUNKAD GROUP OF CASES IT HAS BEEN HELD THAT THE LUNKAD GROUP HAD FAILED IN DISCHARGING ITS ONUS TO EXPLAIN THE SOURCE OF HUGE SHARE CAPITAL INTRODUCED YEAR AFTER YEAR IN THEIR GROUP COMPANIES. THE DOCUMENTS IMPOUNDED DURING THE SURVEY IN THE LUNKAD GROUP OF CASES THOUGH FOR THE LIMITED PERIOD ONLY DO SUGGEST THE MODUS OPERANDI ADOPTED BY THEM IN PROVIDING ENTRIES TO THE BENEFICIARIES. BUT THIS HAS NOT BEEN ACCEPTED BY THE LUNKAD GROUP SO FAR. RATHER THEY (LUNKAD GROUP) HAVE ISSUED CONFIRMATORY LETTERS TO THE VARIOUS BENEFICIARIES IN SUPPORT OF HAVING GIVE N GENUINE LOAN AND SHARE APPLICATION MONEY. HAD -: 27: - 27 THEY ACCEPTED THE MODUS OPERANDI OF PROVIDING ONLY ENTRIES THEN THE REQUIRED COURSE WOULD HAVE BEEN CONFIRMING THE ADDITIONS MADE IN THE HANDS OF BENEFICIARIES. BUT THIS HAS NOT BEEN DONE SO. RATHE R THE LUNKAD GROUP HAD TRIED TO REINFORCE THE STAND O F BENEFICIARIES BY WAY OF ISSUING CONFIRMATORY LETTERS TO THEM BUT IN THEIR OWN CASES THEY HAVE UTTERLY FAILED TO DISCHARGE THE PRIMARY ONUS OF EXPLAINING THE SOURCE. THEREFORE IN THE CIRCUMSTANCES THE ADDITIONS MADE ON THIS ISSUE WERE SUSTAINED ON SUBSTANTIVE BASIS IN THE CASES OF LUNKAD GROUP OF COMPANIES ITSELF. CONFIRMING ADDITION ON THE SAME ISSUE IN THE HANDS OF BENEFICIARIES WOULD I AMOUNT DOUBLE ADDITION [ THOUGH ON DIFFERENT HANDS] . FURTHER IN THE FACTS OF THE CASE THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF METACHEM INDUSTRIES LIMITED SUPPORTS THE GROUNDS OF THE ASSESSEE. ACCORDINGLY KEEPING IN VIEW THE FINDINGS WHICH HAS BEEN GIVEN BY ME IN LUNKAD GROUP OF CASES -: 28: - 28 AND FOLLOWING THE PRINCIPAL OF CONSISTENCY THE ADDITION MADE U/S 68 ON THIS ISSUE CAN NOT BE SUSTAINED IN THE CASES OF BENEFICIARIES. 10. AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A) THE REV ENUE IS IN FURTHER APPEAL BEFORE US AND ASSESSEE HAD ALSO F ILED CROSS OBJECTIONS. 11. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUS ED. FROM THE RECORD WE FOUND THAT THERE WAS SEARCH AT BUSINESS AND OFFICE PREMISES OF ASSESSEE GROUP (KNOWN AS MIT TAL GROUP) ON 5.10.2006. ON THE BASIS OF INCRIMINATING DOCUMEN TS FOUND DURING SEARCH THE ASSESSEE HAS SURRENDERED ADDITIO NAL INCOME OF RS. 2 CRORES AND DISCLOSED THE SAME IN TH E HANDS OF SHRI MAHESH MITTAL AND SHRI PRAVIN MITTAL IN ASSESS MENT YEAR 2007-08. WHILE COMPLETING THE ASSESSMENT U/S 153A THE AO FOUND THAT DURING THE YEARS COVERED BY THE SEARCH THE ASSESSEE HAS TAKEN LOAN FROM VARIOUS COMPANIES OF L UNKAD GROUP. THE AO OBSERVED THAT ON 2.5.2006 THERE WAS SURVEY AT LUNKAD GROUP I.E. FEW MONTHS PRIOR TO THE DATE OF S EARCH IN ASSESSEES GROUP. THE SURVEY HAD REVEALED THAT LUNK AD GROUP WAS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS -: 29: - 29 NEEDY PERSONS I.E. BENEFICIARIES. THE INCRIMINATING DOCUMENTS SO FOUND DURING SURVEY AT LUNKAD GROUP EVEN THOUGH PERTAINING TO ONE MONTH ONLY INDICATED RECEIPT OF C ASH FROM COMPANIES/ PERSONS TO WHOM AMOUNT WAS AGAIN PASSED THROUGH CHEQUES EITHER IN THE FORM OF SHARE CAPITAL OR UNSECURED LOANS OR CAPITAL GAINS. THE AO OBSERVED T HAT THE LUNKAD GROUP DID NOT COOPERATE DURING SURVEY PROCEE DINGS IN EXPLAINING THE ENTRIES FOUND IN INCRIMINATING DOCUM ENTS REGARDING RECEIPT OF CASH AND GIVING OF CHEQUES TO VARIOUS BENEFICIARIES. THE DIRECTORS OF LUNKAD GROUP DID NO T APPEAR TO SUBSTANTIATE THE ENTRY OF LOANS GIVEN TO THE GROUP COMPANIES OF ASSESSEE. THE DOCUMENTS SO FOUND DURING SURVEY C ONDUCTED AT LUNKAD GROUP SHOWS THAT LUNKAD GROUP HAS ACTED A S ACCOMMODATION ENTRY PROVIDER. EVEN DURING COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FILED LOAN CONFIRMATION LETTERS ALONGWITH AFFIDAVIT OF LUNKAD GROUP TO SUBSTANTIATE THE LOAN TAKEN AND REPAID BY IT BUT C OULD NOT PRODUCE THE ALLEGED CREDITORS IN PERSON TO SUBSTANT IATE THE SAME. IT WAS CONTENDED BY THE LD. CIT DR THAT SINCE LUNKAD GROUP COULD NOT BE PRODUCED BEFORE ANY OF THE AUTHO RITIES THE -: 30: - 30 SOURCE OF HUGE CASH DEPOSITS IN THEIR BANK ACCOUNT COULD NOT BE EXPLAINED SO AS TO ESTABLISH THE GENUINENESS AN D CREDITWORTHINESS OF LOANS ADVANCED BY THEM TO ASSES SEE. FROM THE RECORD WE ALSO FOUND THAT THE ASSESSEE MITTAL GROUP IS ENGAGED IN MANUFACTURING OF HDPP/PE BAGS AND ONE OF THE LEADING CONCERNS IN THIS LINE OF BUSINESS. THE LD. CIT DR ALSO DREW OUR ATTENTION TO THE FACT THAT LOOSE PAPERS FO UND DURING SEARCH IN THIS GROUP DATED 5.10.2006 SHOWED HUGE CA SH LOAN OF RS. 1.20 CRORES ADVANCED BY IT. IT WAS ALSO SUBM ITTED THAT HUGE INVESTMENT WAS FOUND IN LAND. THE LD. CIT DR A LSO CONTENDED THAT UNACCOUNTED CASH WAS GIVEN TO THE LU NKAD GROUP AND RECEIVED BACK THROUGH CHEQUES IN VARIOUS GROUPS OF ASSESSEES AS UNSECURED LOANS. LD. CIT DR ALSO HA RPENED ON THE INCOME RETURNED BY THE GROUP CONCERNS OF THE AS SESSEE M/S. NARMADA EXTRUSION PRIVATE LIMITED IN ASSESSMEN T YEAR 2002-03 AT RS. 15 96 958/- IN THE ASSESSMENT YEAR 2006-07 THE RETURNED INCOME OF M/S. NARMADA EXTRUSION PVT. LIMITED WAS RS. 42 16 870/-. ON THE OTHER HAND HE PLACED O N RECORD THE RETURN OF INCOME OF LUNKAD GROUP M/S. LUNKAD ME DIA & ENTERTAINMENT IN ASSESSMENT YEAR IN 2004-05 AT RS. -: 31: - 31 1 22 110/- AND RS. 14 120/- IN THE ASSESSMENT YEAR 2002-03. IN VIEW OF THESE SUBMISSIONS THE LD. CIT DR HIGHLI GHTED THAT THE ASSESSEE GROUP WAS FINANCIALLY VERY SOUND EARN ING AND DECLARING HUGE INCOME WHEREAS LUNKAD GROUP HAS NO SOUND BUSINESS EXISTENCE AND DECLARING ONLY MEAGER INCOME THEREFORE THE ALLEGED LOAN SHOWN TO HAVE BEEN GIVE N BY LUNKAD GROUP WAS MERELY AN ACCOMMODATION ENTRY TO T HE ASSESSEE AFTER ACCEPTING CASH FROM IT. HE FURTHER S UBMITTED THAT EVEN DURING SEARCH THE ASSESSEE GROUP HAS ACC EPTED INCOME OF RS. 2 CRORES AND ALSO PAID TAX THEREON W HEREAS LUNKAD GROUP HAS SURRENDERED NOTHING NOR PAID ANY T AX. OUR ATTENTION WAS ALSO INVITED TO UNSECURED LOAN REMAIN ED STATIC AT RS. 4.82 CRORES IN THE ASSESSMENT YEAR 2010-11 A ND WERE NEVER PAID BACK TO THE LUNKAD GROUP. SIMILARLY SHA RE CAPITAL IN CASE OF NARMADA EXTRUSION PRIVATE LIMITED WAS RS . 3.30 CRORES. HE SUBMITTED THAT IN CASE OF M/S. LUNKAD GR OUP ENTIRE SHARE CAPITAL WAS FOUND TO BE UNEXPLAINED BE CAUSE IT WAS RECEIVED IN CASH AND NO DETAILS OF SHARE APPLIC ANTS WAS EVER FURNISHED BY LUNKAD GROUP AS IS CLEAR FORM ASS ESSMENT ORDER OF M/S. LUNKAD MEDIA AND ENTERTAINMENT LIMITE D FOR -: 32: - 32 THE ASSESSMENT YEAR 2001-02. IN VIEW OF THESE FACTS HE CONTENDED THAT MITTAL GROUP IS A LEADING BUSINESS G ROUP WHEREAS LUNKAD GROUP IS MERELY AN ACCOMMODATION ENT RY PROVIDER EARNING COMMISSION ON SUCH ACCOMMODATION F ROM BENEFICIARIES OUT OF WHICH MITTAL GROUP WAS ONE OF THE BENEFICIARIES. WE FOUND THAT IN VARIOUS DIFFERENT B ANK ACCOUNT OF LUNKAD GROUP IN WHICH CASH WAS DEPOSITED PRIOR T O ISSUE OF CHEQUES TO THE BENEFICIARIES. IN SOME INSTANCES TH E CHEQUES WERE NOT DIRECTLY ISSUED TO THE CONCERNED PARTIES WHO HAS GIVEN CASH BUT WAS ROUTED THROUGH VARIOUS CONCERNS OF LUNKAD GROUP BUT ULTIMATELY CREDITED IN THE ACCOUN T OF BENEFICIARIES. LIST OF BANK ACCOUNT HELD BY THE LUN KAD GROUP WAS ALSO GIVEN IN THE ASSESSMENT ORDER WHERE CASH I S DEPOSITED. 12. THE LD. CIT(A) IN HIS APPELLATE ORDER IN THE CASE O F NARMADA EXTRUSION LIMITED FOR ASSESSMENT YEAR 2002- 03 RELIED ON HIS ORDER PASSED IN THE CASE OF M/S. LUNK AD MEDIA AND ENTERTAINMENT LIMITED FOR THE ASSESSMENT YEAR 2 004-05 WHEREIN ENTIRE ADDITION WAS SUSTAINED BY THE LD. CI T(A) IN THE HANDS OF LUNKAD GROUP ON THE PLEA THAT THEY HAVE FA ILED TO -: 33: - 33 EXPLAIN SOURCE OF HUGE SHARE CAPITAL RECEIVED BY TH EM AND THEY HAVE ISSUED CONFIRMATION LETTERS TO VARIOUS PARTIES TO WHOM LOAN WAS GIVEN. FOLLOWING THIS DECISION THE ADDITI ON OF UNSECURED LOAN TO THE ASSESSEE MITTAL GROUP INCLUDI NG THAT OF NARMADA EXTRUSION LIMITED WERE DELETED BY CIT(A). T HE CIT(A) OBSERVED THAT SINCE ADDITION MADE IN THE HANDS OF L UNKAD GROUP HAS BEEN SUSTAINED ON SUBSTANTIVE BASIS IN TH E CASE OF LUNKAD GROUP OF COMPANIES CONFIRMING THE ADDITION ON SAME ISSUE IN THE HANDS OF BENEFICIARIES WOULD AMOUNT TO DOUBLE ADDITION THOUGH IN DIFFERENT HANDS. ACCORDINGLY HE DELETED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER IN THE H ANDS OF THE ASSESSEE. 13. ON THE OTHER HAND THE CONTENTION OF THE LD. AUTHOR IZED REPRESENTATIVE WAS THAT THE ASSESSEE HAS DISCHARGED ITS OBLIGATION CASTED U/S 68 IT HAS PAID INTEREST ON L OAN AND ALSO DEDUCTED TAX THEREON. OUR ATTENTION WAS DRAWN TO TH E CONFIRMATION OF UNSECURED LOANS CREDITORS AFFIDAVI TS OF DIRECTORS OF THE CREDITOR COMPANIES COPY OF BALANC E SHEET OF LOAN CREDITORS COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF LUNKAD SECURITIES LIMITED. IN VIEW OF THESE DOCUMEN TARY -: 34: - 34 EVIDENCE HE CONTENDED THAT THE ASSESSEE HAS DISCHA RGED ITS ONUS OF PROVING NOT ONLY IDENTITY BUT ALSO GENUINEN ESS AND CREDITWORTHINESS OF LOAN CREDITORS. HE ALSO ARGUED THAT IN VIEW OF THE C.B.D.T. CIRCULAR NO.1493 DATED 18.1.1982 T HE DEPARTMENT SHOULD NOT HAVE FILED THE APPEALS. 14. THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS AS UNDER :- A) THE LD. AO HAS ADDED ENTIRE AMOUNT OF UNSECURED LOANS AS RECEIVED FROM THE LUNKAD GROUP OF COMPANIES ON THE BASIS OF ALLEGED CASH BOOK FOUND AND SEIZED DURING THE COURSE OF SURVEY FROM THE PREMISES OF LUNKAD WHEREAS DURING THE COURSE OF SEARCH CONDUCTED U/S 132 OF THE INCOME-TAX ACT 1961 ON DIFFERENT PREMISES OF THE NARMADA EXTRUSIONS GROUP NOTHING INCRIMINATING WAS FOUND AND SEIZED. -: 35: - 35 B) THE ASSESSEE GROUP DURING THE COURSE OF POST SEARCH INQUIRY. SEARCH ASSESSMENT PROCEEDING AND APPELLATE PROCEEDING EXTENDED ITS FULL COOPERATION WITH INCOME TAX DEPARTMENT AND ALSO PROVIDED THE FOLLOWING INFORMATION :- (I) CONFIRMATION OF LOAN CREDITORS DULY SIGNED BY THEM CONFIRMING THE LOAN ADVANCED TO THEM. (II) AUDITED FINAL ACCOUNTS OF THE UNSECURED LOAN CREDITORS HIGHLIGHTING THE NAME OF THE ASSESSEE. (III) COPY OF AFFIDAVIT OF THE DIRECTOR OF THE LOAN CREDITORS COMPANIES CONFIRMING THE AMOUNT OF LOANS ADVANCED BY THEM. -: 36: - 36 C) THE AO HIMSELF HAS NOT DOUBTED ABOUT THE AMOUNT AS RECEIVED BY THE ASSESSEE HOWEVER THE SEARCH ASSESSMENT ORDER WAS PASSED IN THE CASE OF ASSESSEE GROUP BY THE ASSESSING OFFICER PRIOR TO THE SURVEY ORDER PASSED IN THE CASE OF LUNKAD GROUP. FOR THIS REASON THE AO IN THE CASE OF ASSESSEE GROUP I.E. NARMADA EXTRUSION GROUP HAS ADDED ENTIRE AMOUNT OF LOAN AS INCOME OF THE ASSESSEE BY TREATING THE SAME AS NON- GENUINE. THAT REASON FOR DISBELIEVING THE LOAN AMOUNT WAS THE PRESENCE OF ALLEGED CASH BOOK D) THAT IT IS SETTLED POSITION OF LAW THAT THE ASSESSEE CAN EXPLAIN SOURCE OF ITS CREDIT HOWEVER IT CANNOT BE EXPECTED FROM THE ASSESSEE TO EXPLAIN THE SOURCE OF SOURCE. THE ASSESSEE IN THE -: 37: - 37 PRESENT CASE HAS PROPERLY EXPLAINED THE SOURCE OF CREDIT APPEARING IN ITS BOOKS OF ACCOUNT AND THE SAME WAS ALSO SUBSTANTIATED WITH THE CONFIRMATION LETTERS AND BALANCE SHEET OF THE LOAN CREDITORS. THE ASSESSEE HAS FILED AFFIDAVITS SIMPLY TO RECONFIRM ITS CONTENTION OTHERWISE IT HAS FILED AFFIDAVIT SIMPLY TO RECONFIRM ITS CONTENTION OTHERWISE IT HAS PROPERLY DISCHARGED ITS ONUS BY FILING THE CONFIRMATION LETTER AND BALANCE SHEET OF THE LOAN CREDITORS. THUS THERE IS NO REASON TO TAX THE LOAN AMOUNT AS RECEIVED FROM DIFFERENT COMPANIES OF THE LUNKAD GROUP IN THE CASE OF THE ASSESSEE. E.1) THE AO WHILE PASSING THE ORDER IN THE CASE OF LUNKAD GROUP OF COMPANIES FOR SURVEY YEAR AFTER DETAILED EXAMINATION OF -: 38: - 38 PAPERS IMPOUNDED FORM ITS PREMISES HAS ADDED THE ENTIRE AMOUNT OF CREDIT AS REFLECTED IN THE BALANCE SHEET AND ENTIRE CREDIT AS SHOWN IN THE ALLEGED CASH BOOK AS FOUND FROM ITS PREMISES AS INCOME OF THE LUNKAD SECURITIES LIMITED ON SUBSTANTIVE BASIS. E.2) AS WE UNDERSTAND THE ASSESSMENT ORDER OF THE SURVEY YEAR WAS PASSED WITH THE PRIOR APPROVAL OF THE JCIT/ADDL. CIT. THAT ONCE THE DEPARTMENT HAS TAXED THE ENTIRE CREDIT AS REFLECTED IN THE ALLEGED CASH BOOK IN THAT CASE THERE IS NO REASON TO TAX THE LOANS AS RECEIVED BY THE ASSESSEE GROUP FROM LUNKAD GROUP OF COMPANIES AS ITS INCOME. F) THAT AS EXPLAINED BEFORE THE HON'BLE BENCH AT THE TIME OF HEARING ON 21.10.2011 THAT MR. LUNKAD HAS CHALLENGED THE SURVEY ACTION CONDUCTED BY -: 39: - 39 THE INCOME TAX DEPARTMENT BEFORE THE HON'BLE HIGH COURT IN ITS GROUP. SINCE THE WRIT AS FILED BY LUNKAD GROUP IS PENDING BEFORE THE HON'BLE HIGH COURT IN ITS MATTERS FOR THE REASON HE HAS GRIEVANCE WITH THE INCOME TAX DEPARTMENT AND THEREFORE HE IS NOT APPEARING BEFORE THE CIT-I CHARGE INDORE IN HIS OWN CASES. HOWEVER HE HAS PROVIDED CONFIRMATION AFFIDAVIT DULY NOTARIZED AND BALANCE SHEET OF ITS DIFFERENT COMPANIES AS TO JUSTIFY THE AMOUNT OF LOAN ADVANCED BY HIS VARIOUS COMPANIES TO THE ASSESSEE GROUP. G) THAT CASH BOOK AS FOUND DURING THE COURSE OF SURVEY PROCEEDING WAS FOR LIMITED PERIOD AND IN WHICH THE NAME OF THE PERSON WAS NOT WRITTEN. THE DEPARTMENT HAS CONSIDERED THE SAME IN THE CASE OF LUNKAD SECURITIES LIMITED. COPY OF ORDER AS PASSED IN THE CASE OF LUNKAD SECURITIES LIMITED. -: 40: - 40 HAS ALSO BEEN FILED DURING THE COURSE OF HEARING ON 21.10.2011. THAT WHEN CASH BOOK AS FOUND AND SEIZED DURING THE COURSE OF HEARING ON 21.10.2011. THAT WHEN CASH BOOK AS FOUND AND SEIZED DURING THE COURSE OF SURVEY WAS CONSIDERED IN THE CASE OF LUNKAD SECURITIES LIMITED AND OWNERSHIP OF THE SAID ALLEGED CASH BOOK WAS CONSIDERED IN THE CASE OF LUNKAD SECURITIES LIMITED. IN THAT CASE THERE IS NO JUSTIFICATION FOR MAKING SEPARATE ADDITION IN THE HANDS OF THE PERSON ACTUALLY RECEIVING THE AMOUNT OF LOAN FROM LUNKAD GROUP OF COMPANIES. H) THE LD. CIT(A) SIMULTANEOUSLY DECIDED THE APPEAL AS FILED BY THE LUNKAD GROUP OF ALSO OF THE ASSESSEE. THE LD. CIT(A) CONFIRMED THE ADDITIONS IN THE CASE OF -: 41: - 41 LUNKAD GROUP OF COMPANIES AND DELETED THE ADDITIONS IN THE CASE OF THE ASSESSEE COMPANY AND OTHER MEMBERS OF THE MITTAL GROUP. LIST OF THE APPEAL OF LUNKAD GROUP AS DISCUSSED BY THE LD. CIT(A) IN HIS ORDER AS PASSED FOR THE ASSESSMENT YEAR 202-03 IN PARA 2.2 ON PAGE NO.5 OF THE APPELLATE ORDER. I) THAT IN VIEW OF THE ABOVE AND AS EXPLAINED BY US VIDE OUR EARLIER SUBMISSION IT IS ONCE AGAIN SUBMITTED THAT THE LD. AO IS NOT RIGHT IN ADDING THE AMOUNT OF LOAN AS RECEIVED BY THE ASSESSEE FROM LUNKAD GROUP OF COMPANIES EVEN WHEN THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON IT. J) WE WOULD ALSO LIKE TO DRAW YOUR HONOURS KIND TO THE LAST PARA IN RESPECT OF DECISION OF AGRAWAL COAL CORPN. P.LTD.(I.T.A.NO. 151/IND/2009) AS RELIED UPON BY THE LD. CIT DR IN HIS SUBMISSION DATED -: 42: - 42 21.11.2011 FILED BEFORE THE HON'BLE BENCH. WE RESPECTFULLY LIKE TO SUBMIT THE SAID DECISION IS IN FACT IN FAVOUR OF THE ASSESSEE SINCE THE IDENTITY OF THE LUNKAD GROUP IS BEYOND DOUBT AND DEPARTMENT HAS RATHER CONDUCTED A SURVEY AT ITS PREMISES ON 02.05.2006 WHICH CONFIRMS THE IDENTITY OF LUNKAD GROUP. 15. FIRST WE TAKE UP THE PRELIMINARY OBJECTION RAISED BY THE LD. AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT SI NCE QUESTION OF FACT HAS BEEN DECIDED BY THE CIT(A) THE REVENUE SHOULD NOT HAVE FILED THE APPEAL BEFORE THE TRIBUNAL. FOR THIS PURPOSE HE RELIED ON VARIOUS CIRCULAR OF C.B.D.T. FROM THE ORD ER OF THE CIT(A) IT IS CLEAR THAT HE HAS DELETED THE ADDITIO N IN THE HANDS OF THE ASSESSEE COMPANY ON THE PLEA THAT ADDITION I N THE HANDS OF CREDITOR COMPANY (LUNKAD GROUP) HAS BEEN CONFIRMED ON SUBSTANTIVE BASIS. AS PER CIT(A) IF H E CONFIRMED THE SAME ADDITION IN THE HANDS OF THE ASSESSEE COMP ANY IT WILL AMOUNT TO DOUBLE ADDITION IN RESPECT OF THE SA ME AMOUNT OF INCOME. WE FOUND THAT ADDITIONS HAVE BEEN MADE I N THE -: 43: - 43 HANDS OF LUNKAD GROUP ON THE PLEA THAT THE SOURCE O F SHARE CAPITAL RECEIVED BY THEM COULD NOT BE EXPLAINED. HO WEVER ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE COMPANY ON THE PLEA THAT GENUINENESS OF THE LOAN TRANSACTIO NS HAS NOT BEEN ESTABLISHED IN VIEW OF THE INCRIMINATING DOCUM ENTS FOUND DURING COURSE OF SURVEY AT LUNKAD GROUP. INCRIMINAT ING DOCUMENTS WAS FOUND PERTAINED TO THE MONTH OF APRIL 2006 WHICH INDICATED THAT LUNKAD GROUP WAS IN RECEIPT OF CASH FROM VARIOUS BENEFICIARIES INCLUDING ASSESSEE AND W HICH HAS AGAIN BEEN GIVEN TO THE BENEFICIARIES THROUGH CHEQ UES. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPOSITION THAT IN CASE OF CASH CREDIT ASSESSEE IS NOT ONLY REQUIRED TO PR OVE THE IDENTITY OF THE LOAN CREDITOR BUT ALSO THE GENUINEN ESS OF TRANSACTION OF LOAN AS WELL AS CAPACITY OF THE LOAN CREDITOR TO ADVANCE THE SAID AMOUNT OF LOAN. IN THE INSTANT CAS E THERE IS NO DISPUTE TO THE IDENTITY IN SO FAR AS LUNKAD GROU P IS ALSO ON DEPARTMENTS RECORD AND A SURVEY HAS BEEN CARRIED O UT AT PREMISES OF LUNKAD GROUP. THE GENUINENESS OF TRANSA CTION OF THE LOANS BECOME DOUBTFUL IN VIEW OF THE INCRIMINAT ING DOCUMENTS FOUND DURING SURVEY AT LUNKAD GROUP. EVEN -: 44: - 44 THOUGH THE ASSESSEE HAS FILED LOAN CONFIRMATION ALO NGWITH AFFIDAVIT OF DIRECTOR OF THE CREDITOR COMPANY (LUNK AD GROUP) BUT THEY COULD NOT PRODUCE THE DIRECTOR OF LUNKAD G ROUP TO SUBSTANTIATE THE CONTENTS OF AFFIDAVIT AS WELL AS C ONFIRMATION SO FILED. THE CIT(A) HAS DELETED THE ADDITION ON TH E PLEA OF DOUBLE ADDITION BY STATING THAT CONFIRMING ADDITION IN THE HANDS OF ASSESSEE COMPANY IN RESPECT OF LOANS RECEI VED BY IT AMOUNTS TO DOUBLE ADDITION. IN THIS REGARD THERE I S A DIRECT DECISION OF HONBLE SUPREME COURT IN THE CASE OF IT O VS. CH ATCHAIAH 218 ITR 239 WHEREIN IT WAS OBSERVED THAT NO OPTION HAS BEEN GIVEN UNDER THE 1961 ACT AND IT HAS BEEN SPECIFICALLY PROVIDED THAT TAX HAS TO BE LEVIED ON RIGHT PERSON NOTWITHSTANDING THE FACT THAT THE AMOUNT HAS ALREAD Y BEEN ADDED IN THE HANDS OF SOME OTHER PERSON. MEANING TH EREBY ADDITION SHOULD BE MADE IN THE HANDS OF THE RIGHT P ERSON AND THE SAME CANNOT BE DELETED ONLY ON THE PLEA THAT TH E SAME AMOUNT HAS BEEN ADDED IN THE HANDS OF SOME OTHER PE RSON. IT WAS OBSERVED BY THE SUPREME COURT THAT THERE IS NO OPTION UNDER THE 1961 ACT UNLIKE THE ONE GIVEN UNDER 1922 ACT AND THE AO MUST TAX THE RIGHT PERSON AND RIGHT PERSON O NLY. BY -: 45: - 45 RIGHT PERSON IS MEANT THE PERSON WHO IS LIABLE T O BE TAXED ACCORDING TO THE LAW WITH RESPECT TO A PARTICULAR I NCOME. THE EXPRESSION WRONG PERSON IS OBVIOUSLY USED AS OPPO SITE OF THE EXPRESSION RIGHT PERSON. MERELY BECAUSE A WRONG P ERSON IS TAXED WITH RESPECT TO A PARTICULAR INCOME THE AO I S NOT PRECLUDED FROM TAXING THE RIGHT PERSON WITH RESPECT TO THAT INCOME. THIS IS SO IRRESPECTIVE OF THE FACT WHICH COURSE IS MORE BENEFICIAL TO THE REVENUE. A PERSON LAWFULLY L IABLE TO BE TAXED CAN CLAIM NO IMMUNITY BECAUSE THE ASSESSING O FFICER HAS TAXED THE SAID INCOME IN THE HANDS OF ANOTHER P ERSON CONTRARY TO LAW. SIMILAR PROVISION HAS BEEN LAID DO WN BY THE HON'BLE SUPREME COURT IN THE CASE OF SMT. TARADEVI 88 ITR 323. THE PROPOSITION SO DISCUSSED ABOVE AS LAID DOW N BY THE HON'BLE SUPREME COURT HAS BEEN FOLLOWED BY THE I.T. A.T. SPECIAL BENCH IN THE CASE OF PRADEEP AGENCIES 111 TTJ 346. 16. APPLYING THE ABOVE PROPOSITION OF LAW TO THE FACTS OF THE INSTANT CASE WE CAN SAFELY CONCLUDE THAT THE LD. C IT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION IN THE HANDS OF THE ASSESSEE COMPANY MERELY ON THE PLEA THAT THE SAME A MOUNT HAS BEEN ADDED IN THE HANDS OF THE CREDITOR COMPANY . WE -: 46: - 46 FOUND THAT IN CASE OF LUNKAD GROUP ADDITION WAS MAD E IN RESPECT OF CASH RECEIVED BY IT FROM PERSONS WHOSE NAME ADDRESS AND OTHER PARTICULARS COULD NOT BE FURNISHE D BEFORE ASSESSING OFFICER. THIS ADDITION IS MOTHERING TO DO WITH THE GENUINENESS OF LOAN RECEIVED BY ASSESSEE FROM LUNKA D GROUP. BEFORE REACHING TO THE THIRD CRITERIA OF CREDITWORT HINESS ASSESSEE HAVE TO CROSS THE BARRIER OF GENUINENESS O F LOAN TRANSACTION WHICH HAS BECOME DOUBTFUL IN VIEW OF T HE INCRIMINATING MATERIAL FOUND DURING COURSE OF SURVE Y AT LUNKAD GROUP WITH REGARD TO RECEIPT OF CASH FROM TH E ASSESSEE COMPANY AND ISSUE OF CHEQUE AGAINST SUCH CASH IN FA VOUR OF THE ASSESSEE COMPANY. THUS A LEGALLY WRONG VIEW HA S BEEN TAKEN BY THE LD.CIT(A) WHICH MADE THE DEPARTMENT E NTITLED TO FILE AN APPEAL AGAINST SUCH ORDER OF CIT(A). THUS THERE IS NO MERIT IN THE ARGUMENT OF LD. AUTHORIZED REPRESENTAT IVE TO THE EFFECT THAT THE DEPARTMENT HAD WRONGLY COME IN APPE AL AGAINST THE ORDER OF CIT(A). AS WE HAVE REVERSED THE ORDER OF CIT(A) WITH RESPECT TO DELETION OF ADDITION MADE U/S 68 W E ALSO UPHOLD THE ACTION OF ASSESSING OFFICER FOR DISALLOW ING INTEREST EXPENSES AND FOR MAKING ADDITION ON ACCOUNT OF UNEX PLAINED -: 47: - 47 SOURCE OF EXPENSES INCURRED FOR THE PAYMENT OF COMM ISSION ON SUCH ACCOMMODATION ENTRY. 17. IN VIEW OF THE ABOVE DISCUSSION WE REVERSE THE ORD ER OF CIT(A) AND ALLOW ALL THE APPEALS OF THE REVENUE IN ITS FAVOUR. 18. NOW COMING TO THE CROSS OBJECTIONS RAISED BY THE ASSESSEE WITH REGARD TO CONFIRMING ACT OF THE ASSES SING OFFICER IN MAKING ADDITION IN THE CASE OF THE ASSESSEES IN RESPECT OF CASH CREDIT EVEN WHERE THE ENTIRE AMOUNT OF CASH CR EDITS WERE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT PRIOR TO THE SEARCH AND NO INCRIMINATING DOCUMENTS WERE FOUND AN D SEIZED FROM THE POSSESSION OF THE ASSESSEE. ACCORDINGLY T HE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE IN RESPECT OF THE CASH CREDIT WERE CONTENDED TO BE NOT JUSTIFIED. 19. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM RECORD THAT THE ASSESSEE COMPANY HAS TAKEN LOAN FRO M LUNKAD GROUP SINCE ASSESSMENT YEAR 2002-03 ONWARDS. NOT ON LY LOAN WAS TAKEN BUT IT WAS ALSO REPAID EITHER DURING THE YEAR OR IN SUBSEQUENT YEAR. THE ASSESSEE HAS TAKEN LOAN THROUG H ACCOUNT PAYEE CHEQUES AS PER ITS BUSINESS REQUIREME NT PAID INTEREST THEREON AND ALSO DEDUCTED TDS ON SUCH INTE REST -: 48: - 48 PAYMENT. IN ALL THESE YEARS THE ASSESSEE HAD FILED LOAN CONFIRMATION LETTERS. THESE LOAN TRANSACTIONS HAVE BEEN ACCEPTED BY THE DEPARTMENT EITHER U/S 143(1) OR 143 (3) OF THE INCOME-TAX ACT 1961. THE WHOLE PROBLEM AROSE DUE T O THE SURVEY AT BUSINESS PREMISES OF LUNKAD GROUP ON 2.5. 2006 WHEREIN CERTAIN DOCUMENTS FOR THE MONTH OF APRIL 2 006 WAS FOUND AND IMPOUNDED WHICH INDICATED THAT LUNKAD GR OUP HAD RECEIVED CASH FROM VARIOUS PERSONS INCLUDING AS SESSEE. EVEN THOUGH FULL NAME OF ASSESSEE WAS NOT MENTIONED ON THE PAPERS SO IMPOUNDED BUT THE ASSESSING OFFICER INFER RED THAT NAME OF NARMADA AS RELATING TO ASSESSEE COMPANY NAMELY NARMADA EXTRUSION LIMITED. THE LUNKAD GROUP WAS A SKED TO EXPLAIN THESE INCRIMINATING DOCUMENTS INDICATING RECEIPT OF CASH FROM VARIOUS PARTIES BUT THE LUNKAD GROUP COU LD NOT EXPLAIN THE SAME AND DISPUTE AROSE BETWEEN THE LUNK AD GROUP AND DEPARTMENT WITH REGARD TO SURVEY CONDUCTE D AT LUNKAD GROUP. THE LUNKAD GROUP HAS ALSO FILED A WRI T PETITION IN THE M.P.HIGH COURT AGAINST THE DEPARTME NT FOR THE SURVEY SO CONDUCTED AND THE RECORDS SO IMPOUNDED. THIS WRIT PETITION IS STILL PENDING IN THE COURT. IT WAS ALSO BROUGHT TO OUR -: 49: - 49 NOTICE THAT HIGH COURT HAS DIRECTED FOR ISSUE OF CO PY OF DOCUMENTS SO IMPOUNDED ALONGWITH COPY OF BOOKS OF A CCOUNTS TO LUNKAD GROUP BUT AS PER ASSERTION OF LUNKAD GRO UP THE SAME HAVE STILL NOT BEEN FURNISHED TO IT. WHEN THE ASSESSMENT OF THE ASSESSEE COMPANY WAS FRAMED WITH RESPECT OF THE SEARCH CONDUCTED AT BUSINESS PREMISES U/S 153A ON 5.10.2006 THE DEPARTMENT FOUND THAT THE ASSESSEE G ROUP HAD ALSO TAKEN LOANS FROM LUNKAD GROUP. THE ASSESSEE WA S AGAIN ASKED DURING PROCEEDINGS U/S 153A TO SUBSTANTIATE T HE LOAN TRANSACTION FOR WHICH THE ASSESSEE HAD FURNISHED CO NFIRMATION LETTER AS WELL AS AFFIDAVITS OF CREDITORS. THE DEPA RTMENT ALSO ASKED TO PRODUCE THE DIRECTOR OF LUNKAD GROUP BEFOR E THEM. THE ASSESSEE HAD PRODUCED LOAN CONFIRMATION LETTERS AND AFFIDAVIT OF LUNKAD GROUP TO SUBSTANTIATE THE LOAN TRANSACTION BUT THE ASSESSEE FAILED TO PRODUCE THE DIRECTORS OF LUNKAD GROUP IN PERSON. UNDER THESE CIRCUMSTANCES THE DE PARTMENT HAS TAKEN A VIEW THAT ALL THE TRANSACTION OF LOAN S TARTING FROM FINANCIAL YEAR 2001-02 TILL DATE OF SEARCH WERE NOT GENUINE AND IT WAS ASSESSEES OWN MONEY WHICH HAS BEEN GIVEN B ACK TO THE ASSESSEE IN THE FORM OF LOAN ENTRY. HERE THE CO NTENTION OF -: 50: - 50 THE LD. AUTHORIZED REPRESENTATIVE WAS THAT MR.LUNK AD HAD CHALLENGED THE SURVEY ACTION CONDUCTED BY INCOME TA X DEPARTMENT BEFORE THE HONBLE HIGH COURT. SINCE THE WRIT AS FILED BY LUNKAD GROUP IS PENDING BEFORE THE HONBLE HIGH COURT FOR THE REASONS HE HAS GRIEVANCE WITH THE INC OME TAX DEPARTMENT. DUE TO DISPUTE OF LUNKAD GROUP WITH DEPARTMENT AND PENDENCY OF WRIT PETITION IN THE HON 'BLE HIGH COURT ASSESSEE COULD NOT PERSUADE THE LUNKAD GROUP TO APPEAR IN PERSON BEFORE THE DEPARTMENT. HIS FURTHER CONTENTION WAS THAT IMPOUNDED DOCUMENT FROM LUNKAD GROUP ONLY PERTAINED TO THE MONTH OF APRIL 2006 AND THE RE WAS NO INCRIMINATING MATERIAL FOR ANY PERIOD OTHER THAN MO NTH OF APRIL 2006 INDICATING THAT THE ASSESSEE HAS GIVEN ANY CASH TO LUNKAD GROUP FOR TAKING LOAN ENTRY FROM 1.4.2001 TO 31.3.2007. HE FURTHER CONTENDED THAT AT THE MOST AD DITIONS COULD BE MADE ONLY WITH RESPECT TO THE ENTRIES IN T HE IMPOUNDED DOCUMENTS WHICH INDICATED ANY CASH BEING GIVEN BY THE ASSESSEE TO LUNKAD GROUP AND NOT BEYOND IT. HE FURTHER CONTENDED THAT ASSESSING OFFICER HAD NO WHE RE RELATED THE CASH ENTRIES ON THESE DOCUMENTS AS HAVING BEEN DEPOSITED -: 51: - 51 IN BANK ACCOUNT FOR ISSUE OF CHEQUE TO ASSESSEE NO R MADE ANY EFFORTS TO RELATE SUCH CASH DEPOSIT AS HAVING BEEN UTILIZED FOR ISSUE OF CHEQUE IN ASSESSEES FAVOUR NOR ANYTHING W AS BROUGHT ON RECORD BY ASSESSING OFFICER SUGGESTING RETURN OF CASH TO ASSESSEE WHENEVER ASSESSEE HAD REPAID THE LOAN SO T AKEN FROM LUNKAD GROUP. ON THE OTHER HAND CONTENTION OF THE LD. CIT DR WAS THAT INCRIMINATING DOCUMENTS AS MENTIONED BY ASSESSING OFFICER IN HIS ASSESSMENT ORDER EVEN THOU GH PERTAINED TO ONE MONTH IT INDICATED THE MODUS OPER ANDI OF LUNKAD GROUP FOR ADVANCING LOANS TO THE ASSESSEE THEREFORE THE DEPARTMENT HAS APPLIED THE SAME CONCLUSION EVEN WITH RESPECT TO THE LOANS WHICH WERE TAKEN AND ALSO REP AID IN EARLIER YEARS FOR WHICH NO INCRIMINATING DOCUMENT W AS FOUND EITHER AT THE BUSINESS PREMISES OF THE ASSESSEE OR AT LUNKAD GROUP. 20. AFTER ANALYZING ALL THE DOCUMENTS PLACED ON RECORD WE FOUND THAT ADDITIONS HAVE BEEN MADE BY ASSESSING OF FICER IN RESPECT OF ALL THE LOANS WHICH EVEN THOUGH TAKEN AN D REPAID BY ASSESSEE IN EARLIER YEARS STARTING FROM 1.4.2001. C ONENTION OF ASSESSING OFFICER WAS THAT SINCE THE ASSESSEE COULD NOT -: 52: - 52 PRODUCE THE CREDITOR IN PERSON THEREFORE THE CONF IRMATION AND THE AFFIDAVITS FILED BY THE CREDITORS CANNOT BE REL IED UPON. WE FOUND THAT ALL THE NECESSARY DOCUMENTARY EVIDENCE T O SUBSTANTIATE THE LOAN TRANSACTION HAVE BEEN FILED B Y THE ASSESSEE WHICH INDICATED RECEIPT AND REPAYMENT OF LOAN PAYMENT OF INTEREST THEREON AND DEDUCTION OF TAX AT SOURCE IN RESPECT OF THE INTEREST PAID THEREON. IT APPEARS TH AT DUE TO THE DISPUTE BETWEEN THE DEPARTMENT AND THE LUNKAD GROUP AND THE WRIT PETITION FILED BY LUNKAD GROUP IN THE HIGH COURT ASSESSEE COULD NOT PERSUADE THE LUNKAD GROUP TO APP EAR IN PERSON BEFORE THE DEPARTMENT. IT IS ALSO NOT IN DIS PUTE THAT NO INCRIMINATING DOCUMENT WAS FOUND BY DEPARTMENT IN ASSESSEES PREMISES EITHER DURING COURSE OF SEARCH OR ON SUBSEQUENT INQUIRY SUGGESTING ANY CASH GIVEN BY ASS ESSEE TO LUNKAD GROUP IN CONSIDERATION OF LOANS SO TAKEN NOR RECEIPT OF ANY CASH WHENEVER THERE WAS REPAYMENT OF LOAN BY AS SESSEE TO LUNKAD GROUP. UNDER THESE CIRCUMSTANCES AND IN THE INTEREST OF JUSTICE ONE MORE OPPORTUNITY SHOULD BE GIVEN TO ASSESSEE FOR PRODUCING THE LOAN CREDITOR FOR CONFIRMING THE CONTENTS OF CONFIRMATION AND AFFIDAVITS SO FILED. KEEPING IN VI EW -: 53: - 53 INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SURVEY AT LUNKAD GROUP FOR THE PERIOD 1.4.2006 TO 1.5.2006 PE RTAINING TO THE ASSESSMENT YEAR 2007-08 EVEN THOUGH RELATED TO ONE MONTH ONLY THE DEPARTMENT WAS JUSTIFIED IN MAKING ADDITION IN THE HANDS OF THE ASSESSEE COMPANY IN THE ASSESSM ENT YEAR 2007-08 BY DISBELIEVING THE LOAN TRANSACTIONS. AS P ER OUR CONSIDERED VIEW ADDITION SHOULD BE MADE WITH RESPE CT TO THE AMOUNT OF CASH FOUND TO BE GIVEN BY THE ASSESSEE TO THE LUNKAD GROUP AS PER INCRIMINATING DOCUMENTS SO FOUN D AT LUNKAD GROUP DURING SURVEY AFTER GIVING OPPORTUNITY TO ASSESSEE FOR CROSS EXAMINATION. MERE PRESUMPTIONS W ITHOUT ANY MATERIAL ON RECORD TO THE EFFECT THAT EVEN IN R ESPECT OF ALL THE EARLIER YEARS THE ASSESSEE MIGHT HAVE GIVEN CA SH TO THE LUNKAD GROUP FOR GETTING UNSECURED LOAN IS NOT JUS TIFIED. ALL THE LOANS WERE RECEIVED BY ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES AND ALSO REPAID THROUGH ACCOUNT PAYEE CHEQU ES. ASSESSEE HAD ALSO FILED EVEN CONFIRMATION LETTERS A ND AFFIDAVITS TO SUBSTANTIATE THE LOAN TRANSACTIONS. ONLY BECAUSE OF INCRIMINATING DOCUMENT PERTAINING TO PERIOD 1.4.200 6 TO 1.5.2006 THE DEPARTMENT DOUBTED THE GENUINENESS OF ALL THE -: 54: - 54 LOAN TRANSACTIONS PERTAINING TO PERIOD STARTING FRO M 1.4.2001 TO 31.3.2007. BEFORE MAKING ADDITION OR DISALLOWING THE CASH CREDIT ON THE PLEA OF GENUINENESS THE DEPARTMENT IS REQUIRED TO BRING ON RECORD SOME EVIDENCE TO INDICATE THAT T HE ASSESSEE HAS PAID CASH IN CONSIDERATION OF THE CHEQUES SO IS SUED. WITHOUT ANY EVIDENCE MUCH LESS A COGENT EVIDENCE IT IS NOT LEGALLY JUSTIFIED TO DOUBT THE GENUINENESS OF LOAN TRANSACTION OR MAKE ADDITION IN THE HANDS OF THE ASSESSEE COMPA NY FOR WHICH NO MATERIAL MUCH LESS A COGENT MATERIAL IS IN POSSESSION OF DEPARTMENT. IN THE INTEREST OF JUSTIC E AND FAIR PLAY WE RESTORE THE GROUNDS RAISED BY THE ASSESSEE IN THE CROSS OBJECTION TO THE FILE OF THE ASSESSING OFFICE R FOR DECIDING AFRESH IN TERMS OF OUR ABOVE DISCUSSION AND AS PER LAW. 21. NOTWITHSTANDING THE ABOVE AS PER OUR CONSIDERED OPINION THE ADDITION IN THE HANDS OF ASSESSEE COMP ANY SHOULD BE RESTRICTED WITH RESPECT TO THE PEAK AMOUN T OF LOAN OUTSTANDING DURING THE ENTIRE PERIOD RANGING FROM 1 .4.2001 TO 31.3.2007 RATHER THAN TAKING TOTAL OF THE LOANS RE CEIVED AND PAID BACK. SINCE THE TRANSACTIONS PERTAINS TO TAKIN G THE LOAN AND REPAYING THE SAME AGAIN TAKING THE LOAN AND RE PAYING THE SAME TOTAL OF ALL THESE TRANSACTIONS CANNOT BE SA ID TO BE UNACCOUNTED MONEY OF THE ASSESSEE. FOR EXAMPLE IF THE -: 55: - 55 ASSESSEE HAD UNACCOUNTED MONEY OF RS. 2 LAKHS BY PA YING WHICH HE GETS THE LOAN ENTRY AFTER SOMETIME IF THE ASSESSEE GETS BACK CASH BY REVERSING THE LOAN ENTRY SAME CA SH IS AVAILABLE TO HIM FOR ANY FURTHER TRANSACTION UNLESS THE DEPARTMENT BRINGS ANY MATERIAL ON RECORD TO SAY THA T THE CASH SO AVAILABLE HAS BEEN SPENT SOMEWHERE ELSE AND NOT AVAILABLE WITH ASSESSEE FOR FURTHER ROUTING AS A LOAN TRANSAC TION. IN ALL THESE YEARS THE ASSESSEE HAD TAKEN LOAN AND AGAIN REPAID THE SAME THEREFORE THE ADDITION SHOULD BE MADE ONLY T O THE EXTENT OF PEAK AMOUNT OF LOAN OUTSTANDING AT ANY PO INT OF TIME FALLING DURING THE PERIOD STARTING FROM 1.4.2001 TO 31.3.2007. THE ASSESSING OFFICER HAS PREPARED ANNEXURE I WHIC H IS FORMING PART OF ITS ASSESSMENT ORDER IN CASE OF NAR MADA EXTRUSTION INDICATING PARTY-WISE AND ASSESSMENT-WIS E DETAILS OF PEAK CREDIT IN RESPECT OF LOANS FROM LUNKAD GROU P OF COMPANIES. AS PER ANNEXURE I WE FOUND THAT THE PEA K AMOUNT OF LOAN WAS IN THE ASSESSMENT YEAR 2005-06 AMOUNTIN G TO RS. 2.58 CRORES HOWEVER THE TOTAL ADDITION IN RESPECT OF TOTAL PEAK CREDIT AS MADE BY THE ASSESSING OFFICER AMOUNTS TO RS. 7 59 50 000/- STARTING FROM ASSESSMENT YEAR 2002-03 TO 2007-08. THUS AS PER THIS ANNEXURE THE PEAK AMOUNT OF THE CREDIT WAS RS. 2.58 CRORES. THE PEAK CREDIT OF RS. 2.58 LACS AS MENTIONED BY ASSESSING OFFICER IN ANNEXURE I APPEAR S TO BE WRONG. IN THE PAPER BOOK WE FIND ONE MORE DATE-WIS E STATEMENT OF LOAN TAKEN BY THE ASSESSEE (NARMADA EX TRUSIONS LIMITED) FROM VARIOUS LUNKAD GROUP COMPANIES STARTI NG FROM -: 56: - 56 10 TH JULY 2001 TO 31 ST MARCH 2007. AS PER THIS STATEMENT THE PEAK AMOUNT OF LOAN IS RS. 6 44 37 338/- AS ON 29 TH JUNE 2006. WE THEREFORE DIRECT THE ASSESSING OFFICER T O REVERIFY AND RECOMPUTE THE PEAK AMOUNT OF LOAN AND TO RESTRI CT THE ADDITION TO THE EXTENT OF PEAK AMOUNT OF THE LOAN. WE DIRECT ACCORDINGLY. 22. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE A LLOWED WHEREAS CROSS OBJECTIONS ARE ALLOWED IN PART FOR ST ATISTICAL PURPOSES IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER 2011. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH DECEMBER 2011. CPU* 2912