TMI Blog2001 (6) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment, the AO found single entry of loan creditor for Rs. 2,00,000, though the loans were taken from four different persons of Rs. 50,000 each. The AO added this amount as unaccounted income of the assessee-firm on the ground that loan creditors were not produced for examinations even after asking the assessee to produce them. The AO came to the conclusion that the onus cast on the assessee to prove the genuineness of these loan creditors, were not discharged. Therefore, the same along with interest thereon was disallowed from expenses. As the books of account were not produced, an amount of Rs. 50,000 was added back to the income of the assessee on estimated basis out of expenditure debited to P L a/c. 4. By the impugned order the CIT(A) deleted the addition of Rs. 2,00,000 on account of cash credit and Rs. 16,362, interest thereon. The CIT(A) also deleted the addition of Rs. 30,000 out of addition of Rs. 50,000 done by the AO on account of verifiable expenses, by observing that the books of accounts could not be produced, the trading results cannot be fully accepted. 5. Against the above order of CIT(A), dt. 16th Nov., 1994, the Revenue came in appeal before us and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arguments of the learned authorised representative that the assessee cannot be asked to do something which is beyond its control. Assessee has got no legal power to enforce the attendance of his creditors before the AO. As such making the addition on the ground that he has not produced the creditors cannot be sustained. We have found that the assessee vide its letter, dt. 15th March, 1994, in reply of AO's letter No. 4625, dt. 3rd March, 1994, asking to produce all the loan creditors, submitted as follows: "Kindly note that we had sent necessary intimation by registered, post to all the creditors. We understand the creditors have not appeared in spite of communication from our side. Of course, we have already filed with your honour details of each creditors, including confirmations, copy of IT returns, xerox of bank a/c, their income-tax file No. (GIR No.), etc. In spite of the aforesaid in case you still feel their personal appearance before you is necessary, we would request you to exercise your power under s. 131 to summon for making inquiry as you deem fit as per law. You will appreciate that we can just intimate the creditors about your requisition, since we do not have an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1997) 137 CTR (Gau) 649 : (1997) 223 ITR 11 (Gau) that: "In the instant case, the amounts were shown in the income-tax return of the assessee. Besides, the creditors had also shown in the returns about giving of the loan to the assessee. Strangely the ITO while making the assessment in respect of three creditors above named accepted the returns. This itself will go to show that the amount received by the assessee was at least prima facie genuine. As the ITO had accepted the returns of the three creditors it should go to mean that the amounts given by those creditors were also genuine." 14. In the instant case also all the creditors have submitted their copy of bank statement filed along with the income-tax returns in which alleged loan was duly reflected. The so-called returns of creditors were also supported by the acknowledgment of receipt by the IT Department and their assessment orders. 15. Hon'ble Patna High Court in the case of Saraogi Credit Corporation vs. CIT 1975 CTR (Pat) 1 : (1976) 103 ITR 344 (Pat): held that: "Once the identity of third party is established before the ITO and other such evidence are prima facie placed before him pointing to the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness of the loan was not proved, is not legally tenable. One more reasons for doubting the loans was that in the bank statement their loans appear as a single credit entry of Rs. 2,00,000 on 6th Sept., 1988, whereas the loans were taken from four different persons of Rs. 50,000 each. In the instant case the loan taken from four different persons through account payee cheques and deposited in assessee's account through a singly pay-in-slip as per normal banking procedure, and a bank certificate to this effect was very much there on the record. We are very much satisfied that as per normal banking procedure a number of cheques can be deposited on the same day in a single entry through a single pay-in-slip and all these will appear in the bank statement as single entry. Therefore, the AO was not justified in doubting their four loans of Rs. 50,000 each on the ground that all the four loans appeared as a single entry of Rs. 2,00,000 in the bank statement. The AO did not summon the parties also for examinations in spite of furnishing the full addresses of the loan creditors, all of whom were residing at Gauhati itself. 19. Considering the facts and circumstances of the case and rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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