TMI Blog2014 (1) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly. Therefore, we do not hesitate to reverse the order of the CIT(A). - Decided in favour of assessee. - IT(SS)A No.698/Ahd/2010 - - - Dated:- 24-1-2014 - Kul Bharat And T R Meena, JJ. For the Appellant : Shri B R Popat, AR For the Respondent : Shri T P Krishnakumar, CIT-DR ORDER:- PER : T R Meena This is an appeal at the behest of assessee which has emanated from the order of CIT(A)-XX, Ahmedabad, dated 31.08.2010 for block period 1-4-89 to 31-12-2009. The effective grounds of appeal are as under: The Hon ble CIT(A) has erred in- 1. Confirming the addition aggregating to ₹ 54,12,680/- (Inadvertently mentioned at ₹ 54,19,905/- in the Appellate Order) treating the same as undisclosed income of the Appellant in respect of the block period ended on 7th December 1999. 2. Not considering the ratio of various judgments of different Courts and Tribunals, including those of Territorial Gujarat High Court and Ahmadabad Tribunal. 2. In this case originally, assessment was passed u/s. 158BC r.w.s. 158BD on 11.12.2002 in which undisclosed income for block period was ₹ 54,19,905/-. The A.O. observed as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red and whereabouts of Shri Hemant C. Shah is not known. However, it is pertinent to mention here that unlike on earlier occasions when the assessee did not have the facility of inspection of copies of seized material, during the course of present assessment proceedings assessee was given inspection of the seized material. Ld. A.O. gave reasonable opportunity of being heard on finalization the block assessment on the basis of finding already given by the A.O. The assessee filed reply which has been considered by the A.O. It was pointed out by the assessee that in this case block assessment was originally passed few years back and transaction carried out with Madhupuri Group had accounted for. He also referred the case laws relied in first round before the ITAT and at the time of second re-assessment before the A.O. He further relied various case laws before the A.O. and also narrated the facts on account of copy of the seized material, inspection taken by the ld. A. R. on the basis of incriminating documents, no undisclosed income can be determined u/s. 158BD. Mr. Mahendra H Shah of Madhupuri Group had expired and which could not be cross examined. After considering the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying cash for the same. In the instant case the assessee has borrowed money, hence it is for the assessee to prove that the loans are genuine and the creditor had the capacity to advance such loans. In view of the above, the contentions of the AR is not correct that the AO has not followed the decisions of ITAT is not correct. The decisions as pointed out above are distinguishable on facts. 2.9 The search seizure operations carried out in the case of Madhupuri Group clearly established the fact that the creditors of Madhupuri group had no capacity to advance such loans. This was admitted by late Shri Mahendra shah. The fact that his associate Shri Hemant Shah has now absconded also indicates the same. In view of the above, it is clear that the creditors of the appellant viz. the entities of Madhupuri group did not have the capacity to advance loans to the appellant as has been brought out by the findings during search. 2.10 The AO has elaborately discussed in detail this aspect and also the judicial pronouncements which also support the contention that the creditworthiness of the creditor has to be provided by the assessee. Neither during the assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,68,215/- had been claimed in the regular books of account attributable to the above transactions. The ld. A.O. had not provided reasonable opportunity of being heard. The ld. Counsel also challenged the satisfaction recorded by the A.O. of the person searched on various grounds and also relied upon various case laws. The ld. A.O. had not allowed cross examination of Mahendra H Shah. The assessee has drawn our attention on page no.13 of the paper book and demonstrated that loan accepted from Madhupuri Corporation and Madhupuri Metal P. Ltd. of ₹ 10 lacs in both cases. It is further argued that no addition u/s.68 can be made in block assessment by relying upon various decisions of various High Courts as per page no.33 of paper book. He further relied in case of ACIT, Circle-1, Bhavnagar vs. Dhan Steels Pvt. Ltd. in IT(SS)A No.120/Rjt/2003, for no basis in block assessment for the addition. International Steel Corporation vs DCIT in IT (SS) No. 111/Rjt/2003, wherein Hon ble D Bench, Ahmadabad has held that ld. A.O. has not issued any summons to the creditors and no specific material on record showed that the assessee had taken accommodation entry of loan from Shri Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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