TMI Blog2012 (4) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... and substituted his own personal presumptions to conclude that the creditors did not have adequate sources to make the said deposits - Held that:- AO without conducting local enquiries or collecting material evidence on record proved the statements of the creditors as false - thus, the finding of the CIT(A) that the observation of the A.O. with regard to dissatisfaction was on the basis of surmises and conjectures, is just and proper - the findings recorded by the CIT(A) and affirmed by the I.T.A.T. are based on proper appreciation of facts and are not perverse, being correlated with each and every transaction. Thus, the issue is purely question of facts – appeal dismissed. - I T APPEAL NO. 19 OF 2004 - - - Dated:- 14-2-2012 - SATISH K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order afresh. 3. The revenue preferred an appeal before the I.T.A.T. In the meantime, the Assessing Officer, passed a fresh assessment order on 30.03.1999 in compliance of the order dated 25.03.1997, passed by the CIT under Section 263 of the I.T. Act. The I.T.A.T. quashed the order dated 25.03.1997 passed by the CIT vide order dated 15.10.1999. 4. The revenue preferred an appeal before this Court against the order dated 15.10.1999, passed by the I.T.A.T. This Court vide order dated 08.07.2009, allowed the appeal holding that the impugned order dated 15.10.1999 of the Tribunal, setting aside the well reasoned order of the Commissioner, was not just and, as such, the order dated 15.10.1999 of the Tribunal was quashed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions made by the creditors and substituted his own personal presumptions to conclude that the creditors did not have adequate sources to make the said deposits. The A.O. without conducting local enquiries or collecting material evidence on record proved the statements of the creditors as false. The assessee and the creditors were confronted after a long lapse of 10 years. Thus, the assessee could not have been called upon to explain the origin and source of the sources. All the creditors were villagers and most of them were agriculturists and because they do not maintain bank a/cs., no adverse inference could be drawn against the assessee. The payment of interest had been accepted as genuine without accepting the receipt of loan. The CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT, was quashed by this Court on 08.07.2009 in I.T.A. No. 21/2000. 11. With regard to second question of law, Shri Shrivastava, learned counsel appearing for the appellant submits that the order passed by the I.T.A.T. confirming the order passed by the CIT(A) on the ground that the A.O. has not applied his mind is erroneous and perverse. The method of enquiry with regard to creditworthiness and genuineness of creditors found favour with this Court in the order dated 08.07.2009 passed in I.T.A. No. 21/2000. Thus, the finding of the I.T.A.T. is not sustainable in law under Section 68 of the I.T. Act. If the assessee fails to offer explanation about the nature and source thereof, the credit may not be taken as genuineness and the find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the observation of the A.O. that the explanation offered by the assessee was not satisfactory, was affirmed by the CIT(A) as well as the I.T.A.T. 15. In Rajshree Synthetics (P) Ltd. v. CIT [2002] 256 ITR 331/[2003] 131 Taxman 391 (Raj.) relied on by the appellant, the High Court of Rajasthan, observed that the provisions of Section 68 empowers the A.O. to make enquiry specifically to be satisfied regarding the cash credit. The satisfaction must be derived from the relevant factors on the basis of proper enquiry. 16. In Shiv Shakti Timbers ( supra ), the High Court of Madhya Pradesh observed that provisions of Sections 68 69 of the I.T. Act make it clear where there were entries in the books of accounts, the case shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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