KAWARILAL, CHENNAI V. ACIT,DC/AC,CENTRAL -1(2)CIRCLE, CHENNAI

ITA 100/CHNY/2023

AI Insights

The case involves Shri Kawarilal, a resident individual engaged in the pawn broking business under the proprietorship of M/s K. Madanlal, who appealed against the orders of the Commissioner of Income Tax (Appeals)-18, Chennai. The appeals arose from separate assessments for the Assessment Years 2017-18 to 2019-20, following a search action under section 132 of the Income Tax Act in the case of Lotus-G Square group. The search led to incriminating material, including a recorded statement from the assessee admitting to collecting interest at 24% but accounting it at only 16%. The Assessing Officer made additions based on this admission and loose sheets, which were contested by the assessee. The Tribunal's decision partly allowed the appeals, adjusting the interest rate for the assessments and rejecting the claim of double addition for AY 2018-19.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134382 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 05-07-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 29-01-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132; 153C

Judgement Text

आयकर अपीलीय अिधकरण “सी” ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI माननीय ी महावीर िसंह, उपा एवं माननीय ी मनोज कु मार अ%वाल ,लेखा सद( के सम । BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.99/Chn y/2023 (िनधा)रण वष) / As sessment Year: 2017-18) & आयकरअपील सं./ ITA No.100/Chny/2023 (िनधा)रण वष) / As sessment Year: 2018-19) & आयकरअपील सं./ ITA No.101/Chny/2023 (िनधा)रण वष) / As sessment Year: 2019-20) Shri Kawarilal 56, Ammayappa Mudali Street, Royapettah, Chennai-600 014. बनाम / V s . ACIT Central Circle-1(2), Chennai. थायीलेखासं./जीआइआरसं./PAN/GIR No. A LSP K - 7370- A (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri P.M.Kathir, (Advocate)- Ld.AR थ कीओरसे/Respondent by : Shri P.Sajit Kumar (JCIT)- Ld. DR सुनवाईकीतारीख/Date of Hearing : 06-07-2023 घोषणाकीतारीख /Date of Pronouncement : 06-07-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for captioned Assessment Years (AY) arises out of the impugned common order passed by learned Commissioner of Income Tax (Appeals)-18, Chennai, [CIT(A)] dated 14- 12-2022 in the matter of separate assessments framed by Ld. AO. 2 ITA Nos.99 to 101/Chny/2023 Having heard rival submissions and after perusal of case records, the appeals are adjudicated as under. 2. The assessee being resident individual is stated to be engaged in pawn broking business under proprietorship concern namely M/s K. Madanlal. An assessment was framed for AY 2017-18 u/s 153C consequent to search action u/s 132 in the case of Lotus-G Square group on 29.01.2019. The search action led to certain incriminating material. The statement of the assessee was also recorded. Based on the same, impugned additions were made. 3. In the recorded statement, the assessee admitted that it was collecting interest @24% from its customers but it was accounting interest @16% only. Based on admission as well as loose sheets, Ld. AO computed additional unaccounted interest @8% and made aggregate additions of Rs.40.84 Lacs for AYs 2017-18 to 2019-20. The same has been tabulated in para 4.2 of the assessment order. During assessment proceedings, the assessee assailed the same on the ground that normal interest charged was only 16% and only in few cases, interest of 24% was charged based on securities offered. However, rejecting the same, Ld. AO made impugned additions in the hands of the assessee in all the three years. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 4. From the facts, it emerges that the impugned additions have been made on the basis of loose sheets as well as the admission made by the assessee during the course of search proceedings. Even during the course of assessment proceedings, this fact has been admitted by the assessee. However, it is another fact that the assessee has not earned 3 ITA Nos.99 to 101/Chny/2023 uniform interest rate on all the debtors. It was submitted by the assessee that only in few cases rate of 24% was charged based on securities offered. Considering the facts of the case, we direct Ld. AO to estimate the interest rate @20% and re-compute the impugned additions, in all the three years. The corresponding grounds raised stand partly allowed. The appeals for AYs 2017-18 and 2019-20 stands partly allowed. 5. In AY 2018-19, the assessee has one more grievance. It is the submission of the assessee that the excess cash of Rs.2.11 Lacs and excess debtors for Rs.27.72 Lacs were already offered in the return of income and therefore, adding the same again to the returned income would amount to double addition. However, upon perusal of computation of income, we find that the submissions are factually incorrect. The Ld. AO has not enhanced the income of the income rather it has accepted the returned income of the assessee and made further addition of unaccounted interest only. Therefore, we do not find any force in these submissions. The appeal for AY 2018-19 stands partly allowed. 6. All the appeals stand partly allowed. Order pronounced on 6 th July, 2023. Sd/- Sd/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा34 / VICE PRESIDENT लेखा सद6 / ACCOUNTANT MEMBER चे8ई Chennai; िदनांक Dated :06-07-2023 DS आदेश की Aितिलिप अ %ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकर आयु@/CIT 4. िवभागीय ितिनिध/DR 5. गाडE फाईल/GF