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2009 (1) TMI 343 - ITAT AGRA (LB)Revision u/s 263 - Creditworthiness of cash credits - assessment order - erroneous and prejudicial to the interest of Revenue - assessee is an individual and derives income from manufacture and export of shoes - 100% EU - claimed relief u/s 80HHC - Third Member order - CIT acting u/s 263 considered the order passed by the AO as erroneous and also prejudicial to the interest of the Revenue as no query about the sources of amount of loan in the hands of the creditors and creditworthiness of the creditors and also the source of the cash deposit immediately before the clearance of the cheque of the creditor as also the nature of the transfer entry has not been enquired into by the AO - Ld JM did not find favour with the order of the ld CIT and according to her, there was no error in the impugned assessment order, let alone causing prejudice to the interest of the Revenue - ld AM, on the other hand, supported the order of the CIT. HELD THAT:- Following the decision in the case of CIT v. Gabriel India Ltd.1993 (4) TMI 55 - BOMBAY HIGH COURT], I am entirely in agreement with the order of Id. JM, who has come to a correct conclusion that in the light of the decision of the Supreme Court in the case of Malabar Industrial Co. Ltd.[2000 (2) TMI 10 - SUPREME COURT], the order of CIT u/s 263 cannot be sustained. She has correctly vacated the order and I agree with her finding on the first issue. The cash creditors are identified. They have also furnished the proof of source from which they have offered the credits to the assessee and most of the cases they were all assessed to tax. In a situation like this, it is for the AO to choose what he wants from out of such details. If he is not satisfied with the creditworthiness of any of the creditors, he could have made an addition in their hands. So far as the assessee is concerned, it has come from known source which has been properly explained. Moreover, in all these cases, the transactions have been conducted through regular banking channels. From the perusal of the records that were there before the AO, it cannot be said that the AO did not make any enquiry. It can only be said he did not reach the same conclusion as the CIT has done. Having regard to the facts and details that were there before him, he would have left with no other alternative but to definite conclusion that the cash credits deserve to be accepted. I, therefore, agree with the findings of the Id. JM. The matter will now go back to the Division Bench. The ld Third Member has agreed with the view taken by the ld JM. Thus, in the light of the majority view, the appeal of the assessee stands allowed.
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