Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. M/S.bhawani Oil Mills P.ltd., Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. O R D E R D.B. INCOME TAX APPEAL NO.107/2010. Commissioner of Income Tax, Jaipur-II, Jaipur. Vs. M/s.Bhawani Oil Mills P.Ltd., Jaipur. Date of order : 20/10/2010. HON'BLE Mr.JUSTICE ARUN MISHRAHON'BLE Mr.JUSTICE MOHAMMAD RAFIQ Shri R.B. Mathur for the revenue-appellant. ****** (Per Hon'ble Mr.Justice Mohammad Rafiq) This income tax appeal has been filed by theRevenue against the judgment of the learned IncomeTax Appellate Tribunal (for short, "ITAT") dated22/5/2009 by which, appeal filed by the assesseeagainst the order of Commissioner of Income Tax(Appeal) (for short, "CIT(A)") was partly allowed andthe cash credit of Rs.24,86,866/- claimed by theassessee, which was disallowed by the AssessingOfficer, was allowed and the Assessing Officer wasdirected to delete the addition of the said amountmade under Section 68 of the Income-tax Act. Shri R.B. Mathur, learned counsel appearingfor the appellant has argued that the ITAT was whollyunjustified in reversing the order of the AssessingOfficer, which was reasoned and based on correct appreciation of documents and material on record.While ITAT has not given any good reason to take adifferent view, Assessing Officer has given detailedreasons for assessment by disallowing the cash creditamounting to Rs.24,86,866/- alleged to have beentaken from eight different persons as 'unsecuredloan'. Claim made by the assessee in his Return tothat effect was rightly disallowed by the AssessingOfficer because when notice was given to such eightpersons, only one of them, namely, K.K. Sharmaappeared in response to the notice under Section 131and made statement on 27/2/2002. Explanation wasunsatisfactory raising doubt about number of facts asto how and in what manner he secured the said money.Explanation that was given was that he received Rs.2lacs from his grand-father out of which, Rs.1 lac wastaken back by his grand-father and his grand-fatherreceived this money from sale of the property but hefailed to prove as to whom this property was sold. Nodetails of property was furnished. Although, otherpersons did not appear in response to the noticebefore the Assessing Officer but they filedconfirmations by way of affidavits admittingadvancement of loan to assessee. Unless, it wasproved that those persons, were capable of earningsuch money from known sources and could advance theloan, claim made by the assessee could not beaccepted on its mere ipse-dixit. CIT (Appeals)rightly upheld the order passed by the AssessingOfficer. ITAT however erred in law in allowing the appeal to that extent on ground No.2. We have heard learned counsel for therevenue and perused the material available on record. On perusal of the order passed by the ITAT,we find that mere non-appearance of eight otherpersons in response to the notice given of theAssessing Officer, by itself cannot be a reason todiscard their version particularly when one of themhad appeared and admitted advancement of loan. Evenif others have subsequently filed their confirmationssupported by their affidavits, it cannot be assumedthat they would not have made same statements, ifthey had appeared in response to the notice issued bythe Assessing Officer. Assessing Officer was requiredto have examined those confirmations and the contentsof the affidavits on their merits treating as if theywere statements given to him. Their version containedin the affidavits could not be treated as of a lesserimportance than the statement given by one of thecreditors i.e. Shri K.K. Sharma before the AssessingOfficer. Although, it is another matter that theAssessing Officer would be entitled to evaluatereability of such version on its own merit. Even otherwise, we find that quantum ofamount of Rs.24,86,866/- found to have been borrowedfrom eight different creditors by way of 'unsecuredloan' to the tune of Rs.3,25,000/- each from twocreditors, Rs.3,00,000/- from one creditor,Rs.1,00,000/- each from four creditors and anil/- 4 Rs.11,36,866/- from one creditor. Maximum amount thathas been borrowed by assessee, was Rs.11,36,866/-from Shri K.K. Sharma, Director of the Company. ITATin paras 7 and 8 of its judgment, which is runninginto four pages, has in detailed discussion dealtwith the confirmations given by those creditors andobserved that there was no reason to doubtcorrectness of the claimed cash credit amounting toRs.24,86,866/- taken from the abovenamed creditors. In our view, the matter therefore touchesupon appreication and evaluation of evidence and doesnot raise any question of law, muchless anysubstantial of law, so as to justify interference bythis Court in the matter. Appeal being devoid of merit is accordinglydismissed in limine. (MOHAMMAD RAFIQ), J. (ARUN MISHRA), J.