G.Jayalalitha, CHENNAI V. ITO, CHENNAI

CO 100/CHNY/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9363 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S SANKARANARAY ANAN
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1223/MDS/2013 & C.O. NO. 100/MDS/2013 ( IN ITA NO. 1223/MDS/2013 ) ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD -I(2), CHENNAI VS SMT. G.JAYALALITHA, NO.14, KUTCHERY ROAD, MYLAPORE, CHENNAI-600 004 [PAN: AAGPG 9153 N] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) / APPELLANT BY : SHRI SHAJI P.JACOB, ADDL.CIT / RESPONDENT BY : SHRI S. SANKARANARAYANAN, FCA / DATE OF HEARING : 12-02-2014 / DATE OF PRONOUNCEMENT : 12-02-2014 #% / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNAI DATED 21-12-2012 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 6-07. I.T.A. NO.1223/MDS/13 & C.O. NO. 100/MDS/13 :- 2 -: THE ASSESSEE HAS ALSO FILED CROSS-OBJECTIONS AGAINS T THE ORDER OF THE CIT(APPEALS). 2. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE AY.2006-07 ON 30-11-2006 ADMITTING TOTAL INCOME OF ` 93,560/-. THE SCRUTINY ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 ( HEREIN AFTER REFERRED TO AS THE ACT) WAS COMPLETED. THEREAFTE R, NOTICE U/S.148 WAS ISSUED TO THE ASSESSEE ON 21-01-2011. DURING THE RE-ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MA DE ADDITION OF ` 18,81,076/- ON ACCOUNT OF UN-EXPLAINED CREDITS AND A SUM OF ` 3,06,296/- WAS ADDED AS UN-EXPLAINED EXPENDITURE. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 27-12- 2011 PASSED U/S.143(3) R.W.S.147, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) HELD THA T OUT OF TOTAL SUM OF ` 18,81,076/-, ` 4,77,401/- IS THE LOAN TAKEN FROM ICICI BANK, ` 1,85,653/- IS THE LOAN TAKEN FROM HDFC BANK AND A S UM OF ` 1,00,225/- IS RENTAL INCOME, WHICH CANNOT BE ADDED BACK. HOWEVER, AS FAR AS THE REMAINING AMOUNT OF ` 11,18,427/- WHICH THE ASSESSEE CLAIMED TO BE TRANSPORT RECEIPTS, THE ASSESSEE COULD I.T.A. NO.1223/MDS/13 & C.O. NO. 100/MDS/13 :- 3 -: NOT SUBSTANTIATE THE SAME FROM HER BOOKS OF ACCOUNT . THE CIT(APPEALS) ESTIMATED THE PROFITS @ 8% OF THE BALA NCE AMOUNT. AGGRIEVED AGAINST THIS ORDER OF CIT(APPEALS), THE R EVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI SHAJI P.JACOB, APPEARING ON BEHALF OF THE R EVENUE SUBMITTED THAT THE ASSESSEE WAS NEITHER ABLE TO PRO DUCE BOOKS OF ACCOUNT BEFORE THE AUTHORITIES BELOW, NOR THE ASSES SEE WAS ABLE TO SUBSTANTIATE ITS CLAIM BY PRODUCING NECESSARY RE CEIPTS OR VOUCHERS. THE CIT(APPEALS) ESTIMATED THE PROFIT ON THE BALD ASSERTIONS OF THE ASSESSEE AND RESTRICTED THE ADDIT ION TO 8% OF ` 11,18,427/-. THE ASSESSEE HAD ALREADY CLAIMED SALA RY, VEHICLE FINANCE CHARGES, DEPRECIATION ETC., AS EXPENDITURE FROM THE GROSS RECEIPTS. 4. ON THE OTHER HAND, SHRI S. SANKARANARAYANAN, APP EARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT OUT OF TOT AL RECEIPTS OF ` 18,81,076/-, THE ASSESSEE WAS ABLE TO PRODUCE TDS C ERTIFICATES FOR THE RECEIPTS TO THE TUNE OF ` 9.00 LAKHS. OUT OF THE REMAINING I.T.A. NO.1223/MDS/13 & C.O. NO. 100/MDS/13 :- 4 -: AMOUNT, THE ASSESSEE WAS ABLE TO EXPLAIN, THAT THE RECEIPTS INCLUDED BANK LOANS FROM ICICI BANK, HDFC BANK AND A SUM OF ` 1.00 LAKH WAS THE RENTAL INCOME. THE CIT(APPEALS) HAS ASSESSED THE INCOME OF THE ASSESSEE @ 8% ON THE BAL ANCE AMOUNT. THE ASSESSEE HAD OFFERED A SUM OF ` 9.67 LAKHS AS INCOME FROM THE TRANSPORT BUSINESS WHICH IS CLEARLY EVIDENT FROM THE P&L A/C. DURING THE YEAR, ASSESSEE HAD SOLD TW O LORRIES AND REALIZED A SUM OF ` 1,15,000/- ON 16-09-2005 AND ` 1,30,000/- ON 05-11-2005. THE SALE PROCEEDS OF LORRIES WERE OFFE RED TO TAX. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW. THE MAIN GRIEVANC E OF THE DEPARTMENT IS THAT THE CIT(APPEALS) HAS RESTRICTED THE PROFITS OF THE ASSESSEE TO 8% OF ` 11,18,427/-, WHEREAS THE TAXABLE INCOME OF THE ASSESSEE AFTER DEDUCTING ELIGIBLE EXPENDITUR E IS ` 18,81,076/-. WE FIND THAT THE CIT(APPEALS) HAS GIV EN A SPECIFIC FINDING THAT FROM THE TOTAL AMOUNT OF ` 18,81,076/- (I.E. THE ADDITION MADE), RENTAL INCOME OF ` 1.00 LAKH WHICH HAS BEEN SEPARATELY OFFERED TO TAX AND BANK BORROWINGS TO THE TUNE OF ` 6.62 LAKHS I.T.A. NO.1223/MDS/13 & C.O. NO. 100/MDS/13 :- 5 -: HAVE TO BE EXCLUDED. WE CONCUR WITH THESE OBSERVAT IONS OF THE CIT(APPEALS). THE CIT(APPEALS) HAS FURTHER STATED THAT FOR THE RE MAINING AMOUNT OF ` 11,18,427/-, THE ASSESSEE HAS NOT BEEN ABLE TO BRIN G ANY EVIDENCE TO SUBSTANTIATE ITS CLAIM. THE CIT(APP EALS) DESPITE CATEGORIC FINDINGS HAS RESTRICTED THE PROFIT TO 8% OF THE AFORESAID UN-EXPLAINED AMOUNT. IN OUR CONSIDERED OPINION, TH E LATTER PART OF THE ORDER OF CIT(APPEALS) REQUIRES MODIFICATION. T HE REMAINING UN-EXPLAINED AMOUNT IS LIABLE TO BE TAXED AFTER DED UCTING ACTUAL EXPENDITURE, IF NOT ALREADY DEDUCTED. 6. THE ASSESSEE HAS FILED CROSS-OBJECTIONS IMPUGNIN G THE FINDINGS OF THE CIT(APPEALS) TO TAX 8% OF ` 11.18 LAKHS. IN VIEW OF CATEGORIC FINDINGS OF THE CIT(APPEALS) WITH RESPECT TO AFORESAID AMOUNT AND OUR OBSERVATIONS ABOVE, THE CROSS-OBJECT IONS OF THE ASSESSEE ARE LIABLE TO BE DISMISSED. I.T.A. NO.1223/MDS/13 & C.O. NO. 100/MDS/13 :- 6 -: 7. THE IMPUGNED ORDER IS MODIFIED WITH THE ABOVE OB SERVATION. THE APPEAL OF THE REVENUE IS PARTLY ALLOWED IN THE AFORESAID TERMS AND THE CROSS-OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 12 TH FEBRUARY, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 12 TH FEBRUARY, 2014 TNMM COPY TO: ASSESSEE/AO/CIT(A)/CIT/DR