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TMI Blog2016 (4) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein name of M/s Pappillion Exports Ltd. is appearing which shows that M/s Pappillion Exports Ltd. was having its banking transactions through Sarvodaya Co-op. Bank Ltd. Thus there occurred a bank transaction between the assessee and M/s Pappillion Exports Ltd. and assessee has duly received loan of ₹ 60,85,000/- from M/s Pappillion Exports Ltd. through bank transfer. Therefore, ld. CIT(A) has made no error in deleting the addition made by the Assessing Officer. - Decided in favour of assessee. - ITA No.103/Ahd/2012 - - - Dated:- 2-3-2016 - Shri Rajpal Yadav, JM, Manish Borad, AM. For The Appellant by Mrs. Anita Hardasani, Sr.DR For The Respondent by Shri Anil Kshatriya, AR ORDER PER Manish Borad, Accountant Member. This appeal of the Revenue is directed against the order of ld. CIT(A) VIII, Ahmedabad, dated 24.10.2011. Assessment was framed u/s 143(3) read with section 254 of the I.T. Act., 1961 (in short the Act) on 30.12.2010 for Asst. Year 1997-98 by ITO, Wd-4(3), Ahmedabad. The following grounds have been raised by the Revenue :- 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition made on account of cash credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble ITAT, Ahmedabad 'D' Bench, the issue was set aside with the specific finding and directions, viz. (a) that the statement of Shri K.B. Sasidharan recorded by the ITO, Erode and his report would not be relevant in the matter in issue as well as cannot be read in evidence against the appellant because appellant was never allowed any cross-examination at the assessment stage, therefore, this statement of Shri Sasidharan and ITO's report to be excluded from consideration and (b) to re-decide the issue by verifying the bank account of M/s. Pappilion Export Ltd. maintained with Shri Sarvodaya Co- Operative Bank Ltd., Ahmedabad with reference to the certificate issued by them on the matter. In nutshell, the AO was under judicial obligation to strictly follow the observation recorded by the highest fact finding authority, i.e. Hon'ble ITAT. Referring to para 17 of the Hon'ble Tribunal's order dated 29.1.2010, it was concluded by the ITAT that the appellant had been prima-facie able to prove the creditworthiness of the creditors in issuing the cheque in question in favour of the appellant company. According to the above findings, the identity, creditwort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions and capacity of the creditor. Appellant's counsel has pointed out that recently, Hon'ble Gujarat High Court in the case of CIT Vs. Micro Melt (P) Ltd., reported in [2010] 327 ITR 70 (Guj) he/d as under :- That the neness of the transaction and the identity of the depositors had been established and nothing had been brought on record to contradict the findings of fact recorded by the Commissioner (Appeals) as noted by the Tribunal. This was a pure question of fact. The deletion of the addition made u/s. 68 of the I.T. Act, 1961 was justified. 9 In view of the above discussion, I am of the view that identity and genuineness of the party and also creditworthiness has been proved and the transactions are through banking channel. The AO has overlooked vital facts without bringing any relevant, cogent and positive material on record. Thus, although the genuineness of the transactions and the identity of the creditor has been fully established and nothing has been brought on record to contradict the findings of the fact noted by the Hon'ble Tribunal as well. The assessment order passed by the AO in the course of second round, reveals that the AO h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- from M/s Pappilion Export Ltd. through its bank account held with Sarbodaya Co-op. Bank Ltd. and the same being received in the bank account of assessee held with Sarbodaya Co-op. Bank Ltd. 11. We find that the issue about genuineness and creditworthiness of the unsecured loan taken from M/s Pappilion Export Ltd. have been duly adjudicated by the co-ordinate bench vide their order dated 29th January, 2010 in ITA No.1255/Ahd/2001 and the relevant portion of the decision is reproduced below for ready reference :- 16. We have considered rival submissions and perused the materials available on record. The Assessing Officer noted that assessee has obtained unsecured loan of ₹ 60,85,000/- in the assessment year in question from M/s. Pappilon Exports Ltd.,Tirupur, Tamilnadu. Assessee was asked to file complete details alongwith confirmation from the above party. Commission was also issued to I.T.O. Erode, (Tamilnadu) to make the inquiry from the concern party regarding giving of the loan. One of the Director of this concern Shri K. B. Sasidharan was examined in which he has denied giving of any cheque of the amount in question to the assessee company. Any transaction wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore him also. Further report of I.T.O. Erode, was confronted to the assessee vide letter dated 21.03.2000 by the Assessing Officer and the assessee vide letter dated 27.03.2000 (PB-11) again explained before him that M/s. Pappilon Exports Ltd. had advanced a sum of ₹ 60,85,000/- through the above cheque no. of Sarvodaya Co.op. Bank Ltd. and again requested the Assessing Officer to issue notice to the banker and get the statement of account of M/s. Pappilon Exports Ltd. and verify the facts. It was also submitted that assessee has already filed bank statement and copy of the bank slip, therefore, it is the responsibility of the department to verify the correctness of the evidence from available sources. The assessee therefore requested to summon the bank for getting the matter verified. The Assessing Officer did not act upon on the request of the assessee and did not summon the banker to verify the above facts and also did not allow any cross examination to the statement of Shri K.B. Sasidharan and passed the assessment order within 2 days on 29.03.2000. The Cross examination of Shri K. B. Sasidharan on behalf of the assessee, examination of Shri Bhagwandas Premchandani and B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, the amount was not repaid by Shri Bhagwandas Premchandani and no effort was made by him to help the assessee. The assessee therefore, pressurised the Bhagwandas Premchandani for repayment of the amount and ultimately Shri Bhagwandas Premchandani Director of M/s. Pappilon Exports Ltd. issued cheque of ₹ 60,85,000/- in favour of the assessee after obtaining overdraft facility from Sarvodaya Co. Op. Bank Ltd. The above submissions of the assessee have not been properly appreciated by the Learned Commissioner of Income Tax (Appeals). The Learned Commissioner of Income Tax (Appeals) did not appreciate that assessee was concerned with the repayment of the amount in question which was given to the group concern through Shri Bhagwandas Premchandani. If another account is maintained by Shir Bhagwandas Premchandani on behalf of M/s. Pappilon Exports Ltd. with Sarvodaya Co. Op. Bank Ltd. Ahmedabad, as Chairman/Director and he has issued cheque in question in favour of assessee company for settlement of the dues, where is a fault of assessee. The assessee in the best interest of the business activity of its company was required to receive back the money. Similarly, if M/s. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be relevant to restore the matter to the file of the Assessing Officer to make verification of the bank account and bank certificate issued by Sarvodaya Co. Op. Bank Ltd. Ahmedabad because the Assessing Officer did not have occasion to examine such bank certificate. 19. Considering the above discussion, we set aside the orders of authorities below and restore this issue to the file of the Assessing Officer to re-decide the issue by verifying the bank account of M/s. Pappilon Exports Ltd. maintained with Shri Sarvodaya Co. Op. Bank Ltd. Ahmedabad and the certificate issued by them on the matter in issue as is reproduced in the order of Learned Commissioner of Income Tax (Appeals) as well as page 7 of this order. The Assessing Officer shall redecide the issue as per observation given in this order by giving reasonable sufficient opportunity of being heard to the assessee within the period of 6 months from the receipt of the order. 20. As a result, appeal of the assessee is allowed for statistical purposes. 12. From going through the above decision of the co-ordinate bench, we find that there is no doubt about the identity, genuineness and creditworthiness of loan taken f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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