PRINCIPAL COMMISSIONER OF INCOME TAX 2 vs. GUJARAT CRAFT INDUSTRIES PVT LTD

C/TAXAP/511/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 511 of 2018 ======================================================================= PRINCIPAL COMMISSIONER OF INCOME TAX 2 Versus GUJARAT CRAFT INDUSTRIES PVT LTD ======================================================================= Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 MR B S SOPARKAR(6851) for the RESPONDENT(s) No. 1 ======================================================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE

Date : 10/07/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Feeling aggrieved and dissatisfied with the impugned order passed by the learned ITAT dated 10.10.2017 passed in ITA No.2348/Ahd/2015 for Assessment Year 2012-13, by which the learned Tribunal has dismissed the said appeal preferred by the Revenue by upholding the order of the learned CIT (Appeals) deleting the addition of Rs.6,87,47,490/- under Section 68 of the Income Tax Act, 1961, the Revenue has preferred the present Tax Appeal with the following proposed question of law:- “[A] Whether the Appellate Tribunal has erred in law and on facts in upholding the order of the CIT(A) deleting the addition of Rs.6,87,47,490/- u/s.68 of the Act without appreciating the ratio as rendered by the Hon’ble Supreme Court in the case of P.Mohanakala Vs. CIT (supra)? [B] Whether the Appellate Tribunal erred in law and on facts by not appreciating that Page 1 of 3

C/TAXAP/511/2018 ORDER asking the assessee to establish the creditworthiness of the lenders and genuineness of transaction was not the same thing as seeking of source of source and the Tribunal failed to appreciate that ratio rendered by this Hon’ble Court in the case of Blessing Construction (supra)? [C] Whether the decision of the Appellate Tribunal is perverse as it has ignored relevant facts, more particularly the fact that the assessee has failed to discharge the burden of proof as it had failed to produce the parties when the AO had directed the assessee to produce the loan givers for verification especially when most of these had the address of the assessee company and the Tribunal failed to appreciate the ratio rendered by this Court in the case of Pawankumar Sanghvi Vs. ITO (supra).” 2. Heard Mrs.Bhatt, learned Advocate appearing on behalf of the appellant-Revenue and Shri B.S.Soparkar, learned Advocate appearing on behalf of the respondent- assessee. 3. At the outset, it is required to be noted and it is not in dispute that for the earlier Assessment Year, when similar addition was made under Section 68 of the Act, the same came to be deleted by the learned CIT (Appeals), which came to be confirmed by the learned ITAT and the same has been further confirmed by the Division Page 2 of 3

C/TAXAP/511/2018 ORDER Bench of this Court by order dated 14.03.2018 in Tax Appeal No.175 of 2018. It is required to be noted that in the Assessment Year 2010-11, 9 out of 13 parties advancing unsecured loans were the same as they were in the present Assessment Year. The creditworthiness of those very depositors was doubted in the earlier year and in the earlier year, it has been held that the assessee has discharged initial burden of establishing neecessary ingredients

including

creditworthiness

such depositors. It is not in dispute that 9 out of 13 parties were the same in the earlier assessment year. With respect to rest, learned ITAT is satisfied with creditworthiness of the remaining depositors. Under the circumstances, it cannot be said that the learned Tribunal has committed any error in upholding the order of the learned CIT (Appeals) deleting the addition of Rs.61,87,47,490/- under Section 68 of the Act. 4. No substantial question of law arises in the present appeal. Under the circumstances, present appeal deserves to be dismissed and it is accordingly dismissed. (M.R. SHAH, J) (A.Y. KOGJE, J) SHITOLE Page 3 of 3