Itxa/1860/2011 Of Commissioner Of Income Tax Central- Ii v. M/S Guruprerna Enterprises

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1860 OF 2011WITHINCOME TAX APPEAL NO.1910 OF 2011 Commissioner of Income Tax-Central II..Appellant.V/s.M/s. Guruprerna Enterprises..Respondent. Mr. A. R. Malhotra, for the Appellant.Mr. Sashi Tulsia with Mr. P. C. Tripathi, for the Respondent. P.C:- CORAM: J.P.DEVADHAR & M.S.SANKLECHA,JJ.DATE : 5[th] MARCH, 2013. In this these Appeals by the Revenue for the Assessment Year 2003-04 and 2004-05, several common questions have been raised in the memo of appeal. The basic issue is whether the Tribunal is justified in deleting un-explained credits taxed under Section 68 of the Income Tax Act (the Act). 2The Respondent-Assessee is a partnership firm engaged in the business of a builder and developer. During the Assessment Proceedings, the Respondent-Assessee had shown unsecured loans from the various S.R.JOSHI1 of 3 parties. The Assessing Officer on verification came to a conclusion that loans taken in the Assessment Years i. e. 2003-04 and 2004-05 were not genuine loans. Consequently an addition under Section 68 of the said Act was made. Further, the interest on this amount were also disallowed for the Assessment Years 2003-04 and 2004-05 by the Assessing Officer. In appeal, the CIT(A) granted partial relief to the Respondent-Assessee. 3Both the Revenue and the Respondent-Assessee carried the matter in appeal to the Tribunal. The Tribunal by the impugned order dismissed the Revenue's Appeal and allowed the Assessee's Appeal. The Tribunal held that it was an undisputed fact that loan were received by way of crossed cheques and interest have also been paid to these parties. Moreover, the Assessee has filed confirmation letter from each and every creditor besides furnishing permanent account number of each and every creditor along with copies of the income tax returns for the relevant Assessment Years filed by the Creditors. Further as held that the CIT(A) on receipt of remand report from the Assessing Officer, the CIT(A) without examining the credits item-wise, has confirmed the cash credits on the ground that the capacity of lenders is in doubt. The Tribunal relied upon the decision of this Court in the matter of Oriental Trading Co., v/s. CIT reported in 49 ITR 723 wherein it is held that where amount have been received by the Assessee through account payee cheques drawn from the bank account of the Creditors, the Assessee is not expected to prove the genuineness of the cash deposited in bank accounts of those Creditors. On the aforesaid finding, the Tribunal concluded that there was no material to support the addition. In these circumstances, Tribunal has allowed the appeal of the Respondent-Assessee. 4Since the decision of the Tribunal is essentially based on a finding of fact, we see no reason to entertain the proposed question of law for the Assessment Years 2003-04 and 2004-05. 5Accordingly, appeal is dismissed with no order as to costs. (M.S.SANKLECHA,J.) (J.P.DEVADHAR,J.)