MANGLAM PHOSPHATE LTD. Vs. I.T.O.

JUDGEMENT

(1.) THIS appeal is filed by the assessee challenging the impugned order of the Ld. CIT(A) -I, Pune dated 01 -04 -2013 for the A.Y. 2005 -06. The assessee has taken following grounds in the appeal:

(2.) UNDER the facts and circumstances of the case the Learned Assessing Officer has erred in making addition of other liabilities of Rs. 77,557/ - and confirming by CIT(A), Pune.

(3.) THE limited issue before us is the amount shown on the name of Smt. Richa Sarda as loan creditor in the books of account of the assessee company. As per the documentary evidence placed before us, it is seen that Smt. Richa Sarda had made the payment to the suppliers of the assessee company from her bank account through Demand Drafts and those amounts are shown as loans on the name of Smt. Richa Sarda. Smt. Richa Sarda is wife of the Director of the assessee company. We also find that the assessee has explained the source of deposit in the bank account of Smt. Richa Sarda from which the demand drafts are issued to those suppliers of the assessee company. Sec. 68, it is deeming provision in the Income Tax Act. As rightly argued by the Ld. AR, the primary burden is on the assessee to establish the identity and genuineness of the transaction. The identity is required from the point of view from the source and genuineness is required to verify whether in fact the money has flown from the said party to the assessee. In the present case as per the identity, the source of the credit is explained. So far as genuineness is concerned admittedly all the amounts are directly paid to the suppliers of the assessee company for the reason that as the bank accounts were made NPA, the assessee company was not allowed to do the transactions by their Banker and hence, ultimately as to meet the business needs, they decided to rout their transaction through Smt. Richa Sarda to maintain the credibility in the market. We also find the source of deposit in the bank account of Smt. Richa Sarda has been well explained. We, therefore, find no justification to sustain the addition of Rs. 30,67,713/ -. We, accordingly, delete the same and Ground No. 1 is allowed.