Shri S.D.V.Chandru, CHENNAI V. ACIT, CHENNAI

ITA 1068/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5243 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-04-2011
• Assessment Year: 1997-1998
• Appeal Filed On: 29-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NOS. 1064 TO 1068/MDS/2010 ASSESSMENT YEARS : 1991-92, 1992-93, 1994-95, 1995-96 & 1997-98 SHRI S.D.V CHANDRU NO.213, DEV DARSHAN APARTMENTS NO.AB-5, SDV ARCADE, 2 ND AVENUE ANNA NAGAR,CHENNAI 600 040 VS THE ACIT COMPANY CIRCLE XV CHENNAI [PAN - ADUPC8093Q] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. VIJAYARAGHAVAN & SHRI SAROJ KUMAR PARIDA RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER BENCH : THIS IS A BUNCH OF FIVE APPEALS FILED BY THE A SSESSEE FOR ASSESSMENT YEARS 1991-92, 1992-93, 1994-95, 1995-9 6 & 1997-98, IN WHICH MAINLY TWO COMMON ISSUES ARE INVOLVED. THERE FORE, FOR THE SAKE OF CONVENIENCE AND BREVITY, WE PROCEED TO DECIDE TH EM BY A COMMON ORDER. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PLYIN G OF LORRIES. THE FIRST COMMON ISSUE RAISED IN THESE APPEALS IS R EGARDING INCOME FROM LORRY BUSINESS. SOME LORRIES ARE OWNED BY TH E ASSESSEE, IN ITA 1064 TO 1068/10 :- 2 -: ADDITION, HE HIRES LORRIES ON COMMISSION BASIS. F ROM THE FOLLOWING CHART, INCOME SHOWN BY THE ASSESSEE FROM LORRY PLY ING BUSINESS; TOTAL CONTRACT RECEIPTS WITH REFERENCE TO TDS CERTIFICATE S; AND ESTIMATED INCOME ARE DEPICTED: A.Y INCOME DECLARED BY THE ASSESSEE TOTAL CONTRACT AS PER TDS CERTIFICTES INCOME ESTIMATED BY THE A.O 1991-92 1,12,000 18,61,423 2,00,000 1992-93 1,85,561 40,28,867 2,50,000 1994-95 2,98,000 68,75,087 3,75,000 1995-96 1,78,000 79,15,484 3,80,000 1997-98 1,18,000 2,13,959 1,00,050 3. THIS IS THE SECOND ROUND BEFORE THE ITAT. IN TH E FIRST ROUND, THE TRIBUNAL RESTORED THE ENTIRE APPEAL TO THE FIL E OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AFRESH IN THE LIGHT OF THE SUBMISSIONS AND EVIDENCES FILED BEFORE THE LD. CIT( A) DURING FIRST APPELLATE PROCEEDINGS. THE ASSESSING OFFICER, IN T HE SECOND ROUND, HAS ESTIMATED THE INCOME IN THE SAME AND SIMILAR MA NNER AT THE SAME AMOUNTS AS THE ASSESSEE COULD NOT PRODUCE BOOKS OF ACCOUNT AND OTHER RELEVANT DETAILS BASED ON WHICH THE ASSESSEE HAD ARRIVED AT THE INCOME DECLARED IN THE YEARS UNDER CONSIDERATION. IN THE SECOND ROUND, THE LD. CIT(A) HAS ADOPTED NET INCOME FROM L ORRY BUSINESS AT THE RATE OF 6.25% OF THE GROSS RECEIPTS WHICH ARE THE TOTAL CONTRACT RECEIPTS IN EACH YEAR. NOW, THE ASSESSEE HAS CHALL ENGED THIS ACTION OF THE LD. CIT(A) MAINLY ON THE REASONING THAT THE ASS ESSEE HAS LESS THAN ITA 1064 TO 1068/10 :- 3 -: 10 LORRIES AND THE INCOME FROM LORRIES ARE TO BE AS SESSED AS PER THE PROVISIONS OF SECTION 44AE OF THE ACT. THE ASSESS ING OFFICER HAS ESTIMATED LORRY INCOME WITHOUT ANY FORMULAE. THE L D. CIT(A) HAS ESTIMATED THIS INCOME @ 6.25% OF THE GROSS RECEIPTS . BUT HE HAS ALSO NOT GIVEN ANY VALID REASON FOR DOING SO. IN THE GI VEN FACTS AND THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ENDS OF JUSTICE WOULD MEET IF WE ADOPT THIS RATE AT 6%. IN FACT, THE LD. CIT(A) HAS ENHANCED THE ESTIMATED INCOME OF ASSESSI NG OFFICER. THEREFORE, BY SLIGHTLY MODIFYING THE RATE OF NET PR OFIT, WE PARTLY ALLOW THIS COMMON ISSUE IN FAVOUR OF THE ASSESSEE TAKEN I N ALL THESE YEARS. 4. THE SECOND COMMON ISSUE RELATES TO ADDITION MADE U /S 68 OF THE ACT. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAD NOT FILED ANY EVIDENCE TO CONFIRM THE CASH CREDITORS, BUT BEFORE THE LD. CIT(A) VARIOUS EVIDENCES AND DETAILS WERE FILED WHICH WERE CHALLENGED BY THE DEPARTMENT AND THE TRIBUNAL VIDE ITS ORDER DATED 11.7.2008, HAD RESTORED THIS ISSUE TO THE FILE OF THE ASSESSING OF FICER TO CONSIDER THE EVIDENCES FILED BEFORE THE LD. CIT(A) AFRESH. BUT DURING FRESH ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUI RED THE ASSESSEE TO AGAIN FILE THE CONFIRMATORY LETTERS TO PROVE TH ESE CREDITS BUT THE ASSESSEE SHOWED HIS INABILITY AS IT WOULD NOT BE P OSSIBLE, TO AGAIN COLLECT THE CONFIRMATION LETTERS FROM THE CREDITORS AND THE LETTERS WHICH HAVE BEEN FILED BEFORE THE LD. CIT(A) CAN BE CONSID ERED AS EVIDENCE TO ITA 1064 TO 1068/10 :- 4 -: DECIDE THIS ISSUE. THE ASSESSING OFFICER DID NOT A GREE AND REPEATED THE SAME ADDITIONS WHICH HAVE ALSO BEEN CONFIRMED B Y THE LD. CIT(A). 5. BEFORE US, IT WAS ARGUED THAT THE TRIBUNAL HAD GIVE N A CLEAR-CUT DIRECTION THAT THE EVIDENCE(S) PRODUCED BEFORE THE LD. CIT(A) HAVE TO BE LOOKED INTO AND THE ISSUE HAS TO BE DECIDED AFRE SH. 6. AFTER HEARING BOTH SIDES, WE ARE IN AGREEMENT WITH THE LD.AR THA THE TRIBUNAL HAD DIRECTED THE ASSESSING OFFICER TO DECIDE THE ISSUE OF CASH CREDITS AFRESH IN THE LIGHT OF THE SUBMISSIONS AND EVIDENCE MADE BEFORE THE LD. CIT(A). THE ASSESSEE WAS GIVEN FURT HER LIBERTY TO RAISE WHATEVER POINTS HE WANTED TO RAISE ON THE ISSUE BEF ORE THE ASSESSING OFFICER AND OPPORTUNITY OF HEARING WAS TO BE GIVEN TO HIM. THE ASSESSING OFFICER GAVE OPPORTUNITY OF HEARING TO TH E ASSESSEE BUT IN THE SECOND ROUND, THE ASSESSEE FAILED TO PRODUCE TH E REQUISITE EVIDENCE. IT SEEMS THAT THE ASSESSEE COULD NOT EVE N FILE THE PHOTOCOPIES OF THE EVIDENCE EARLIER GATHERED IN THE FORM OF CONFIRMATORY LETTERS BECAUSE THEY WOULD NOT AGAIN O BLIGE THE ASSESSEE. IN THE GIVEN FACTS AND THE CIRCUMSTANCES, WE INFER THAT THE ASSESSEE HAS GOT NO EVIDENCE TO PROVE THE CASH CREDIT IN ALL THESE YEARS. CONSEQUENTLY, WE ARE LEFT WITH NO OPTION BUT TO CON FIRM THE IMPUGNED FINDING OF THE LD. CIT(A). THE COMMON GROUNDS RAI SED IN THIS REGARD STAND DISMISSED. ITA 1064 TO 1068/10 :- 5 -: 7. THE OTHER GROUNDS, IF ANY, RAISED, EITHER DOES NOT ARISE FROM THE APPELLATE ORDER OR DOES NOT REQUIRE ANY ADJUDICATIO N AS THESE WERE NOT ARGUED BEFORE US. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 2.4.2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 12 TH APRIL, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR