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TMI Blog2012 (10) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated 08.11.2001, the Commissioner of Income Tax (Appeals), Ajmer ['the CIT(A)'] partly allowed the appeal [No. 149/2001-2002] preferred by the assessee and deleted the addition relating to 25 creditors. Then, by the impugned common order dated 18.10.2004, the Tribunal dismissed the appeal filed by the revenue and maintained the order passed by the CIT(A) in relation to the said 25 creditors; and, while partly allowing the appeal filed by the assessee, further deleted the additions as made in relation to 2 of the creditors and remitted the matter to the AO in relation to the remaining 1 creditor. In this appeal, the revenue has assailed the deletions as made by the CIT(A), which have been affirmed by the Tribunal and further deletions as made by the Tribunal while asserting that the Assessing Officer had rightly made the additions on account of unexplained cash credits. This appeal came to be admitted on 03.04.2006 on the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the learned Tribunal is justified in law in deleting the additions as above made by the A.O. on account of unexplained cash credits holding that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer served the questionnaire and sought various details; and also recorded the statements of some of the alleged creditors. 6. In his assessment order dated 30.03.2001, the AO grouped the creditors under different categories. In category (A), the AO considered the matter relating to 3 unsecured creditors namely Shri Suresh Uppadhya [Rs. 40,000/-], Shri Shyam Sunder Jhanwar [Rs. 30,000/-], and Shri Jagdish Chandra Somani [Rs. 75,000/-] who were not borne on income-tax records. While rejecting the explanations furnished, the AO held in relation to each of them that creditworthiness had not been proved; and treated the amount allegedly advanced by them as the income of the assessee and so also disallowed the payment of interest on such credits. The AO considered the cases of 25 other creditors by dividing them into the categories (B), (C), (D) and (E) with reference to the range of the amount said to have been advanced like those in category (B) being the persons said to have advanced the credits of more than Rs. 1,00,000/-; in category (C), the person said to have advanced the amount of Rs.2,00,000/-; in category (D), the persons said to be standing in the credits between Rs. 50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any case were not applicable or shown to be applicable in respect of these creditors, listed at S.No. 1 to 13, as above. The reasons for non-service of the letter u/s. 133(6) had also been explained in the reply dated 23-02-01. In these facts and circumstances, the addition of Rs. 3,18,896 made as per para-E of the AO's order, is not sustainable and is therefore deleted." 9. In relation to category (D), the persons standing in credit between Rs. 50,000/- to Rs. 1,00,000/-, the CIT(A), again, after dealing with all the submissions and considering the entire record in paragraphs 7, 7.1, 7.2 and 7.3 found the AO unjustified in his approach and deleted the additions in the following:- "7.4 On careful consideration of the details/evidence on record, it is seen that the AO has placed undue reliance on the stated non-attestation of the signatures of the creditors in the confirmations filed, particularly in the face of the other corroborating evidence of the IT returns filed/GIR/PAN etc. The confirmations have been signed by the creditor as well as Shri Mohd Ayub, the Director. The confirmations also contained details as the date, particulars of receipts, of interest, GIR/PAN and copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... home, in any case were not applicable or shown to be applicable in respect of these creditors, listed above. In these facts and circumstances, the addition of Rs. 8,00,032/- made by the AO, is not sustainable and is therefore deleted." 11. In relation to the person in category (C), standing in the credit of above Rs. 2,00,000/-, the CIT(A), again, found the AO unjustified and deleted this addition in the following:- "9.2 The details/explanations/facts on record were considered carefully. In his statement recorded on 12-3-2001, Shri Roshan Lal, proprietor confirmed having advanced the amounts of Rs. 75,000/- + Rs. 75,000/- + Rs. 50,000/- (total to Rs. 2,00,000/-) to Mohammed Ayub, the director, whom he knew. He stated that the books of account are being produced but that the copy of bank statement has not been given by the bank, being of old period. He explained the source as out of his regular bank account and stated being an assessee in Ward - 3 Bhilwara, and filing returns for last 12 to 13 years. In the copy of confirmation, the date/cheque number/amount of loan/amount of TDS/PAN has been given. Copy of the computation of income/capital account/TDS certificate had been filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the ground of appeal filed by the department is dismissed." 14. However, the Tribunal deleted the additions made in respect of 2 of the other creditors, Shri Suresh Uppadhya and Shri Jagdish Chand Somani; and restored the matter to the file of AO for further inquiry in relation to the remaining creditor Shri Shyam Sundar Jhanwar in the following:- "31. We have given careful thought to the facts and circumstances and evidence available on record is evident from assessment order that the assessee vide his letter dated 23.01.2001 requested the Assessing Officer to issue summons to all the creditors for examination but the assessee called only 5 creditors out of total 40. He called Suresh Uppadhya, above named, out of 3 creditors who were not assessed to tax. The creditors explained the source of income as well as immediate source of making deposit with the assessee. The statements recorded have been place in the PB of the assessee. He explained that he recovered around Rs. 7,000/- from his debtor Shri Pradeep Jain R/o 7H21, Azad Nagar and Rs. 10,000/- from other debtor Shri Mahender Kothari R/o 7J13 Azad Nagar. He also explained that he had Rs. 17,000/- with him out of savings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into by the Assessing Officer. We, therefore, consider it just and equitable to restore this issue back to the file of the Assessing Officer for considering it afresh." 15. It is at once clear from the perusal of the orders as passed by the CIT(A) and the Tribunal that so far the said 25 creditors already assessed to tax [categories (B) to (E)] were concerned, the CIT(A) perused the entire record; and examined the explanations offered by the assessee and by the creditors in detail before accepting the same; and then, deleted the addition made by the AO with cogent reasons. The Tribunal has taken a holistic view of the matter on all the relevant aspects; and affirmed this part of the order of the CIT(A) after finding that the assessee had submitted the accounts of returns, the computations of income, and the balance-sheets of creditors and also supplied all their particulars; that the money given to the assessee had been shown in the respective balance-sheets of the creditors; and that the creditors who were called by the AO did affirm the fact of giving money and explained the source. 16. In relation to the other three creditors not assessed to tax, the Tribunal has given cogen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain, remains essentially within the realm of appreciation of evidence. Worthwhile it would be to refer to some of the decisions cited by the learned counsel for the assessee where, in relation to acceptance of the explanation of the assessee, the Courts have held that the matter relates to appreciation and evaluation of evidence and does not give rise to any substantial question of law. 19. In the case of Orissa Corpn. (P.) Ltd. (supra), the Hon'ble Supreme Court held as under:- "13. In this case, the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under s. 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any thing further. In the premises, if the Tribunal came to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as to whether explanation offered by assessee and which found acceptance to the CIT(A) and Tribunal is good or bad, or whether it was rightly accepted, or not. It is only when the factual finding recorded had been entirely de hors the subject, or that it had been based on no reasoning, or based on absurd reasoning to the extent that no prudent man of average judicial capacity could ever reach to such conclusion, or that it had been found against any provision of law, then a case for formulation of substantial question of law on such finding can be said to have been made out. 11. In our view, no such error could be noticed by us in the impugned order because as observed supra, the Tribunal did go into the details of explanation offered by assessee and then accepted the explanation by placing reliance on the documents filed by assessee. As a consequence thereof, the additions made by AO came to be deleted." 21. In the case of Bhawani Oil Mills (P.) Ltd. (supra), another co-ordinate Bench found similar nature grounds not leading to substantial question of law in the following:- "4. On perusal of the order passed by the Tribunal, we find that mere non-appearance of eight other per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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