TMI Blog2010 (1) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER A. Mohan Alankamony: This appeal of the Revenue is directed against the order of the CIT(A)-V, Bangalore for the assessment year 2006-07 in ITA No.78W 10(1)/CIT(A)-V/08-09 dated 11.5.2009 in the case of the Chenzhi Wei - an individual. 2. The Revenue has raised three grounds of appeal. However, the crux of the issue is that "the CIT(A) erred in deleting the unexplained sales of granite blocks amounting to Rs.7781699/-." 3. The facts of the issue, in brief, are that the assessee - an individual and a citizen of China - was running a proprietary business - R V Exports [RVE] - in exporting of granite blocks. For the assessment year in dispute, the assessee had furnished a ROI, admitting a total income of Rs.4802407-in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no interest was paid for the loan alleged to have been procured; - if the loan were to be genuine, the assessee could have claimed deduction u/s 36(1) (iii) on the said amount; and (v) the assessee had debited all expenses including purchases in the trading account whereas he had accounted a part of sales in the trading account and the remaining against the loan amount only within an ulterior intention to reduce the tax liability. 5. Aggrieved, the assessee took up the issue with the Ld.CIT(A) for relief. After due consideration of the assessee's forceful contentions, the CIT(A) had observed thus- "6................It is observed that the AO disallowed' Rs.7781699/- the loan taken from M/s. Far East Marbles, Thailand as unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.4.05 to 16.3.06 through ABN Amro SB A/c No.103749 amounting to $ 177614.80 which is equivalent to Rs.7781669/-. The loans were received through banking channel and the AO has not doubted the genuineness. The loans were accounted for in the books of the appellant. I am of the opinion that the loan taken was genuine. In view of this, the disallowance made by the AO is not justified......" 6. Disillusioned with the finding of the Ld.CIT(A), the Revenue has come up with the present appeal. The Ld. D R's reiteration was more or less what has been reasoned in the impugned order of the AO. Furtherance to the above, strong reliance was placed on the ruling of the Hon'ble Apex Court in the case of Sumati Dayal vs. CIT reported in 214 ITR 801 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ABN Amro Bank. This has been duly confirmed by FEM in their letter dated 19.12.2008 [ Page 3 of PB]. Further, FEM in its communication dated 15.4.2007 requested the assessee to adjust their dues to the extent of Rs.2350361/- against the loan given to the assessee. The above facts have been duly communicated to the AO vide assessee's letter dated 22.12.2008 along with the Bank remittance certificate, S.B. Account statement, confirmation letter, ledger extract copy of FEM during the year 2007-08, copy of ROI for the AY 2008-09, copy of stock statement. In spite of all the relevant particulars, confirmation letters etc., were at the possession of the AO, the AO went ahead with a theory that the assessee had used a colourable devise to evade t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his alone cannot be a valid reason to imply that to evade tax by showing receipt of sale proceeds as receipt of loan. 7.4. With respects we have perused the ruling of the highest judiciary of the land in the case of Sumati Dayal vs. CIT cited supra wherein, the Hon'ble Court in its wisdom had ruled that, "If explanation of the assessee is not found satisfactory by the assessing officer, acting reasonably, there is a prima facie evidence against the assessee and if assessee fails to rebut the same, such un-rebutted evidence can be used against him....." 7.4.1. With due regards, we would like to point out that the assessee had furnished confirmation letter from the creditor, the name and complete postal address and the identity of the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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