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3. In the captioned appeal, we are concerned with the Assessment Year 2002-2003. The assessee has filed this appeal as it is aggrieved by the judgment dated 27.4.2007 passed by the ITAT. As indicated hereinabove the only issue which arises for our consideration is as to whether the ITAT erred, in the given facts & circumstances of the case in sustaining the addition of sum of `8,24,000.00 in the income of the assessee.

4. In order to decide the aforementioned issue the following facts are required to be noticed.

4.8 The assessee being aggrieved by the order of the AO preferred an appeal before the Commissioner of Income Tax (Appeals) {for short „CIT(A)}. The CIT(A), after a detailed examination of the material placed on record as well as pleas of the assessee and the revenue reversed the view taken by the AO.

4.9 The Revenue being aggrieved by the order of the CIT(A) preferred an appeal to the ITAT. The ITAT in turn reversed the view taken by the CIT(A). The necessary consequences of which was the AO‟s order was sustained.

11. In our view, with the findings of fact recorded by the CIT(A), the ITAT ought not to have reversed the said findings unless it come to the conclusion that they were perverse based on tenable reasoning. On the other hand, the ITAT has reversed the order of the CIT(A), as observed in paragraph 18 of the impugned judgment passed by the ITAT, solely on the ground that despite opportunities having been granted to the assessee/ directors/ shareholders, the assessee had done "nothing substantial" to prove the genuineness of the transaction and the credit worthiness of the creditors/ persons, who lent the money to the assessee. This, according to the ITAT, showed "malafide intention" of the assessee. The Tribunal concluded by saying that in view of these two aspects, the assessee had failed to establish that the order of the A.O. was perverse or based on inadmissible findings and, therefore, since there was no illegality, perversity or miscarriage of justice in the order of the A.O., the same has to be sustained.

14. With this material on record in our view as far as the assessee was concerned, it had discharged initial onus placed on it. In the event the revenue still had a doubt with regard to the genuineness of the transactions in issue, or as regards the credit worthiness of the creditors, it would have had to discharge the onus which had shifted on to it. A bald assertion by the A.O. that the credits were a circular route adopted by the assessee to plough back its own undisclosed income into its accounts, can be of no avail. The revenue was required to prove this allegation. An allegation by itself which is based on assumption will not pass muster in law. The revenue would be required to bridge the gap between the suspicions and proof in order to bring home this allegation. The ITAT, in our view, without adverting to the aforementioned principle laid stress on the fact that despite opportunities, the assessee and/or the creditors had not proved the genuineness of the transaction. Based on this the ITAT construed the intentions of the assessee as being malafide. In our view the ITAT ought to have analyzed the material rather than be burdened by the fact that some of the creditors had chosen not to make a personal appearance before the A.O. If the A.O. had any doubt about the material placed on record, which was largely bank statements of the creditors and their income tax returns, it could gather the necessary information from the sources to which the said information was attributable to. No such exercise had been conducted by the A.O. In any event what both the A.O. and the ITAT lost track of was that it was dealing with the assessment of the company, i.e., the recipient of the loan and not that of its directors and shareholders or that of the sub- creditors. If it had any doubts with regard to their credit worthiness, the revenue could always bring it to tax in the hands of the creditors and/or sub-creditors. [See CIT Vs. Divine Leasing & Finance Ltd., (2008) 299 ITR 268 (Delhi) and CIT Vs. M/s. Lovely Exports (P) Ltd. (2008) 216 CTR 195 (SC)].