- (1.) This appeal has been filed under section 260A of the Income-tax Act, 1961, against order dated November 13, 2013, passed by the learned Income-tax Appellate Tribunal, "A" Bench, Kolkata, in I.T.A. No. 235/Kol/2012 relating to the assessment year 2005-06 on the following questions: "1. Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal erred on fact as well in law in deleting the addition of Rs. 96,34,237 made as undisclosed income on account of loans pertaining to five alleged creditors and interest thereon, without appreciating that the addition was sustained by the learned Commissioner of Income-tax (Appeals) for the detailed reasons given in her order highlighting that the creditworthiness of the creditors and genuineness of transactions were not proved at all and even in some cases the identity of the creditors remained unestablished and for that matter, the learned Income-tax Appellate Tribunal's order is perverse? 2. Whether the order of the Income-tax Appellate Tribunal is sustainable inasmuch as per the Rules of Stock Exchange, shares can be delivered strictly against payment and further the transaction was of Rs. 49 lakhs no evidence forward before the Commissioner of Income-tax (Appeals) showing the payment made to sundry creditors even after the expiry of the year and as such the order of the Income-tax Appellate Tribunal deleting the addition treating the same is in accordance with law is perverse?" On the first question, relying on the judgment in Hindusthan Tea Trading Co. Ltd. v. CIT, 2003 263 ITR 289it is submitted by Mr. S.N. Dutta, learned advocate appearing on behalf of the Revenue-appellant, that since the creditors could not be found and/or located and did not turn up to produce the books of account in spite of summons being issued under section 131 of the Act the identity, genuineness and creditworthiness could not be satisfied by the assessee and the addition made by the Assessing Officer was correctly made.
(2.) Mr. J.P. Khaitan, learned senior advocate appearing on behalf of the respondent-assessee, has submitted that as the facts would reveal, proper explanation was furnished by the assessee inasmuch as every transaction of loan was made through bank, particulars of the creditors' income-tax file furnished and as such the assessee had done everything in its power to do in offering such explanation. The Revenue could not contradict such explanation and sought something further which was not in the hands of the assessee to ensure and as such the deletion made by the Tribunal was unjustified. He relied on two judgments, one of the hon'ble Supreme Court in the case of CIT v. Daulat Ram Rawatmull, 1973 87 ITR 349and the other of the Allahabad High Court in CIT v. Jauharimal Goel,2005 147 Taxman 448in support of his submission.
(3.) From the judgment in Daulat Ram Rawatmull we find the hon'ble Supreme Court had held that a person can still be held to be the owner of a sum of money even though the explanation furnished by him regarding the source of that money is found to be not correct and from the simple fact that the explanation regarding the source of money furnished by him, in whose name the money is lying in deposit, has been found to be false, it would be a remote and farfetched conclusion to hold that the money belongs to some other person. In the context of the present case, if no further explanation could be obtained by the Revenue upon the creditors failure to present themselves in enquiry, from such simple fact of omission on the part of the creditors, it would be remote and farfetched conclusion that the creditors lack identity.;