TMI Blog2017 (5) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... igh court’s decision in DCIT vs. Rohini Builders (2001 (3) TMI 9 - GUJARAT High Court) upholding tribunal’s conclusion deleting Section 68 addition in view of identical details; squarely applies here. We take into account all these facts and judicial precedents to affirm CIT(A)’s findings under challenge deleting the impugned addition. - Decided in favour of assessee. Disallowance of additional depreciation - assessee had claimed the same @20% on machinery used for crimping of yarn - Held that:- Hon’ble Bombay high court’s decision in CIT vs. Emptee Poly-Yarn (P) Ltd. (2008 (2) TMI 313 - BOMBAY HIGH COURT) takes note of CBDT Circular dated 22.11.1985 clarifying that crimping of yarn also amount to a manufacturing activity. He thus delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in the nature of accommodation entries taken from the above entity in order to facilitate unaccounted income in business. He further took note of the fact that the above creditor entity had got deposited huge cash amounts from family members of Bhutra Family located in Surat. The Assessing Officer then issued Section 131 process to the said six depositors/family members of above creditor entity s director. 3. The instant case file reveals that the Assessing Officer then considered the above entity s registered office at Kolkata whereas its directors/family members stayed at Surat, its only source of income was interest income, it had been increasing its capital every year by way of new shares to companies having registered offices at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further loan of ₹ 25,00,000 has been taken by the appellant. The interest in respect of all the loan taken is being paid and the corresponding TDS is also being made. In this background, the appellant submitted that non-compliance of Summons u/s 131 of the assessing officer by the lenders, directors or share holders is not a fault on the part of the appellant. 7.4 The appellant also relied on the case laws of (i) Dwarikadhish Sugar Industries v/s ITO dated 07.05.2012 reported in 149 TTJ (Lucknow ) (T.M.) and (ii) Jaikishan Dadlani v/s ITO reported in 4 SOT 138 ( Mumbai ), apart from a large number of other case laws of various courts. The ratios of above two judgments are reproduced herein under :- (i) Jaikishan Dadlani v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 191. d. Radheshyam v/s Safiyabai Ibrahim AIR 1988 Bom 361 : 1987 Mah 725 : 1987 Bank J 552. e. Rohini Builders 182 CTR 373 (Guj) f. Orissa Corporation (P)ltd 159 ITR 78(SC) g. P.K. Noorjahan 273 ITR 570(SC) 8. DECISION :- 8.1 The appellant s contentions and the ratio of various judgments relied upon by the appellant have been examined. The only reason for making this addition of ₹ 1 crore is non -compliance of summons by the share- holders / directors of lender and the reason for that is that there were cash deposits in the bank accounts of the share - holders, before issue of cheque in favour of the company for * share capital / share premium \ This amounts to stretching of onus u/s 68 too far. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if those persons had failed to establish their source of cash deposits, the corresponding addition would have been there in the hands of those persons or M/s Raj Capital Finance Pvt Ltd and not in the hands of appellant. 8.4 As far as the appellant is concerned, it was running a loan account with M/s Raj Capital Finance Pvt Ltd from which, it regularly borrowed funds and paid interest after deduction of TDS. How M/s Raj Capital Finance Pvt Ltd arranges for funds for loan to be given to the appellant is not the concern of the appellant. Considering the same and the ratio of the judgments (supra ) relied upon by the appellant the addition made by the assessing officer is deleted and the ground no. 1 of the appellant is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affirm CIT(A) s findings under challenge deleting the impugned addition. This first substantive ground is accordingly declined. 6. We now come to Revenue s second substantive ground seeking to restore additional depreciation disallowance/addition of ₹ 38,15,241/-. The assessee had claimed the same @20% on machinery used for crimping of yarn. The Assessing Officer quoted Section 32 (1)(iia) to conclude that the said activity did not amount to manufacturing of any new product or article. He thus made the impugned disallowance. Learned CIT(A) concludes that hon ble Bombay high court s decision in CIT vs. Emptee Poly-Yarn (P) Ltd. 218 CTR (Bom.) 657 takes note of CBDT Circular dated 22.11.1985 clarifying that crimping of yarn also amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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