AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 251
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....ay be set aside and that of the Assessing Officer may be restored to the above extent 2. Briefly stated facts as culled out from the records are that the assessee is a limited company which has filed its return of income for Asst. Year 1997-98 on 30.11.1997 declaring total loss of Rs. 6,23,260/- and assessment was framed u/s 143(3) of the Act on 29.3.2000 determining taxable income at Rs. 54,61,740/- after making addition of Rs. 60,85,000/- as unexplained cash credit received from M/s Pappillion Exports Ltd. 3. Aggrieved, assessee went in appeal before ld. CIT(A) but it did not bring any relief to the assessee. Ld. CIT(A) upheld the addition vide his order dated 21.3.2001. Thereafter the assessee went in appeal before the Tribunal wherein the issue was examined and the co-ordinate bench set aside the issue to the file of Assessing Officer for verification of bank account of M/s Pappillion Exports Ltd. maintained with Shri Sarvodaya Co-op. Bank Ltd., vide its order dated 29.1.2010. 4. Accordingly notice was issued on 26.5.2010 to the assessee asking various information but on enquiry, the Assessing Officer found that the bank is in liquidation since 15th April, 1999 and no furthe....
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....ure of credit in real terms was only a repayment/return of loan of Rs. 73,50,000/- advanced by the appellant company and its associated concerns earlier and the appellant has submitted the contra entry of the associated concerns for advancement of money to the sister concern of Pappilon Export Ltd. for squaring up this advances. These contra entries contain PAN and Ward Circle where they are assessed. The A.Q. has never doubted this factual aspect of the matter as no comment is offered on this count. This further strengthens the appellant's contention that it was a re-payment of money advanced earlier by those concerns. Though the said payment did constitute a loan of the said amount in so far as the book of accounts of the appellant company was concerned. Even if the said amount of Rs. 60,85,000/- was considered as a loan, the appellant company had discharged its onus of proving the identity of the party, the genuineness of the credit entry through banking channel and source of source. Since all the ingredients as required by law appear fully satisfied, the explanation submitted on record does not suffer from any apparent or factual error, so far as the ambit of Section 68 is ....
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....both the parties which is obtained by the A.O. from the liquidator leaving no scope of invoking section 68 of the Act. The AO is, therefore, directed to delete the addition of Rs. 60,85,0007- made on account of cash credit in the name of the aforesaid creditor. 10. Since all other grounds of appeals i.e. ground No. 1 to 6 are connected to this effective ground No.7 and I have already decided the same as aforesaid, they are not being adjudicated separately. 11. In the result, the appeal is allowed. 7. Aggrieved, the Revenue is now in appeal before the Tribunal. 8. The ld. DR relied on the order of Assessing Officer. 9. Whereas ld. AR of the assessee submitted that during the Asst. Year 1997-98 loan was taken by assessee from M/s Pappilion Export Ltd. through a/c payee cheque. All details supporting the genuineness and creditworthiness of M/s Pappilion Export Ltd. have been regularly filed before the lower authorities and Hon. Tribunal has categorically mentioned in its order to be satisfied about the identity, creditworthiness and genuineness of loan transaction of Rs. 60,85,000/- received from M/s Pappilion Export Ltd. through bank account held with Shree Sarvodaya Co-op. B....
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....mation letter filed by Shri Bhagwandas Premchandani. In such circumstances, the verification of the bank account at Ahmedabad should have been made either by I.T.O. Erode or by Assessing Officer himself at Ahmedabad. The assessee admittedly filed confirmation letter signed by Shri Bhagwandas Premchandani one of the Director/Authorised signatory of M/s. Pappilon Exports Ltd. from whom amount was received in which he has admitted to have given the amount in question to the assessee company. Copy of the bank certificate is also filed, which is reproduced in the impugned order and copy of the same is also filed at PB-12. The said bank certificate is issued by Shri Sarvodaya Co.op. Bank Ltd. to Shri Bhagwandas Premchandani Director of M/s. Pappilon Exports Ltd. and copy of the same was also given to the assessee in which bank has certified that cheque no.133279 dated 01.01.1997 of Rs. 60,85,000/- has been issued in favour of M/s.Hiralal Pharma Ltd. i.e. the assessee's company. It was also certified that M/s. Pappilon Exports Ltd. maintained bank account with this bank and has been granted Temporary Overdraft facility. The confirmation filed by the assessee company have not been examined....
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....sts the Assessing Officer to issue summons, to enforce attendance of the creditors to establish the genuineness and capacity of the creditors, it is duty of the Assessing Officer to enforce attendance of creditors by issuing summons. If the Assessing Officer does not choose to issue summons and examine the creditors, he cannot subsequently treat the loans standing in the name of such creditors as nongenuine, nor add the amount thereof to the assessee's Income vide the decision of the Allahabad high Court in (1963 49 ITR 561 Nathu Ram Premchand vs. Commissioner of Income Tax U.P. and decision of this Court in 1971 Tax LR 355- R.S. Seth Gopikisan Agrawal Vs.Assistant Commissioner of S.T." Hon'ble Delhi High Court in the case of CIT Vs. SMC Share Brokers Ltd. 288 ITR 345 held "there is no doubt that the statement of Manoj Agarwal had evidentiary value but weight could not be given to it in proceedings against the assessee without it being tested under cross examination. In the absence of the statement being tested, it cannot be said that it should be believed completely to the prejudice of the assessee." Considering the above discussion, it is clear that the statement of Shri K. ....
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....d the identity and existence of M/s. Pappilon Exports Ltd. at Tamilnadu. Shri Bhagwandas Premchandani being one of the Director of M/s. Pappilon Exports Ltd. issued cheque in favour of the assessee company out of its bank account with Sarvodaya Co. Op. Bank Ltd. Ahmedabad. As noted above, the Assessing Officer did not examine Shri Bhagwandas Premchandani and the bank account of M/s. Pappilon Exports Ltd. with Sarvodaya Co. Op. Bank Ltd. at Ahmedabad. The details filed for the bank account had not been disputed by the Assessing Officer. The Bank certificate filed on record and reproduced in the impugned order proved that M/s. Pappilon Exports Ltd. maintained bank account with Sarvodaya Co. Op. Bank Ltd. Ahmedabad through its Director Shri Bhagwandas Premchandani. It is also not disputed that Shri Bhagwandas Premchandani was also one of the Director and Chairman of the creditor company. The transaction in question is therefore, not disputed. The source of issue of the cheque is explained to be overdraft facility granted to M/s. Pappilon Exports Ltd. by the Sarvodaya Co. Op. Bank Ltd. Thus, the assessee has been prima facie able to prove the creditworthiness of the creditor in issuing....