V.K.Sasikala, CHENNAI V. ACIT Central Circle II(2), CHENNAI

ITA 1069/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2636 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARV SREENIVASAN JCIT
• Assessee Lawyers: T VASUDEVAN
• Keywords: Unexplained cash credit; Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . , . , BEFORE SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.1068 & 1069/CHNY/2018 /ASSESSMENT YEARS: 2003-04 & 2004-05 SMT.V.K.SASIKALA, C/O.K.SOUNDARAVELAN, FCA FLAT NO.16, GYAN APARTMENTS, NEW NO.38, VENKATRAMAN STREET, T.NAGAR, CHENNAI-600 017. VS. THE ASST. COMMISSIONER- OF INCOME TAX, CENTRAL CIRCLE-II(2), CHENNAI. [PAN: AMNPS 6598 J] ( # /APPELLANT) ( $%# /RESPONDENT) # & / APPELLANT BY : MR. T.VASUDEVAN, ADV. $%# & /RESPONDENT BY : MR. AR.V.SREENIVASAN, JCIT & /DATE OF HEARING : 08.07.2019 & /DT. OF PRONOUNCEMENT : 26.08.2019 / O R D E R PER SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER : THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-18, CHENNAI, I N ITA NO.123/09-10 AND IN ITA NO.116/07-08 DATED 31.01.2018 FOR THE AY S 2003-04 & 2004- 05 RESPECTIVELY. 2. THE ONLY GRIEVANCE OF THE ASSESSEES CASE IS THAT THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,31,435/- AS UNEX PLAINED CREDITS IN THE ITA NOS.1068 & 1069/CHNY/2018 :- 2 -: CURRENT ACCOUNT OF M/S.METAL KING. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: FOR THE AY 2003-04 : 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) IN SO FAR AS IT IS AGAINST THE ASSESSEE IS CONTRARY TO LAW, ERRONEOUS AND UNSUSTAI NABLE ON THE FACTS OF THE CASE. 2. THE CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS.5,31,435/- AS UNEXPLAINED CREDITS IN THE CURRENT ACCOUNT OF M/S.ME TAL KING. 3. THE CIT(A) FAILED TO APPRECIATE THAT THE ADDITION ON THE PREMISE THAT THE DIFFERENCE BETWEEN THE TOTAL CREDITS OF RS.16,25,925/- IN THE CURRENT A/C OF IOB AND THE SALES AS PER P & L A/C OF RS.10,94,490/- REPRESENTS THE UNE XPLAINED CREDITS IS FALLACIOUS AND HENCE CONFIRMING THE ADDITION WAS WHOLLY UNSUSTAINABLE ON FACTS. 4. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE ENT IRE CREDITS IN THE BANK ACCOUNT HAD DULY EXPLAINED WITH REFERENCE TO THE REGULARLY MAIN TAINED BOOKS OF ACCOUNTS AND HENCE CONFIRMING THE ADDITION AS UNEXPLAINED CREDITS WAS WHOLLY UNJUSTIFIED AND UNSUSTAINABLE ON FACTS OF THE CASE. 5. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE DEP OSITS IN THE BANK ACCOUNT CONSISTED OF REALIZATION OF VARIOUS PARTIES OF RS.7,30,922/-, CASH DEPOSITS OF RS.1,60,000/-, CHEQUE FROM NAMATHU MGR OF RS.7,00,000/- (ANOTHER S OLE PROPRIETRIX CONCERN OF THE APPELLANT) AND ANOTHER CHEQUE DEPOSIT FOR RS.35,000/ - FROM ONE MR.MUTHUKUMARAN AND DULY CONSIDERING THE EXPLANATION OF ASSESSEE, THE A DDITION NEEDS TO BE DELETED. 6. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE ASS ESSEE HAVING DISCHARGED THE ONUS CAST UPON HER OF EXPLAINING THE CREDITS, SUSTAINING THE CREDITS AS UNEXPLAINED WAS UNJUSTIFIED. 7. THE CIT(A), IN ANY VIEW OF THE MATTER, OUGHT TO HAV E DULY CONSIDERED THE CONTENTIONS OF ASSESSEE IN THE PROPER PERSPECTIVE AND DELETED THE ADDITION OF THE AMOUNT. FOR THE AY 2004-05 : 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) IN SO FAR AS IT IS AGAINST THE ASSESSEE IS CONTRARY TO LAW, ERRONEOUS AND UNSUSTAI NABLE ON THE FACTS OF THE CASE. 2. THE CIT(A) ERRED IN CONFIRMING THE ADDITION AS UNEXP LAINED CREDITS OF RS.29,60,000/- IN JAYA PRINTERS AND RS.22,50,000/- IN METALKING BEING THE CREDITS IN THE RESPECTIVE CAPITAL ACCOUNTS. 3. THE CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE H AD DISCHARGED THE ONUS OF PROVING THE CREDITS IN THE CAPITAL ACCOUNTS OF THE TWO CONC ERNS I.E M/S.JAYA PRINTERS AND M/S.METALKING IN WHICH SHE IS A SOLE PROPRIETRIX BY WAY OF FURNISHING THE ACCOUNT COPIES OF THE FIRM KODANAD ESTATE, AND HENCE CONFIRMING TH E ADDITION WAS WHOLLY UNSUSTAINABLE ON THE FACTS OF THE CASE. 4. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT AS A PA RTNER IN KODANAD ESTATE, THE ASSESSEE HAD WITHDRAWN AMOUNTS ON VARIOUS DATES AND CREDITED THE SAME IN THE CAPITAL ACCOUNT OF HER TWO SOLE PROPRIETRIX CONCERNS, WHICH IS EVIDENT FROM THE ENTRIES IN THE RESPECTIVE ACCOUNT COPIES AND THEREFORE CONFIRMING THE ADDITION AS UNEXPLAINED CREDITS IS WITHOUT APPRECIATION OF THE FACTS ON RECORD. 5. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE TOT AL WITHDRAWAL FROM KODANAD ESTATE IN THE YEAR WAS RS.50,25,000 AND THE ENTIRE AMOUNT ALO NG WITH RS.3,00,000/- TRANSFERRED FROM CANARA BANK SB A/C HAD BEEN CREDITED IN THE CAP ITAL ACCOUNTS OF ASSESSEE IN JAYA PRINTERS AND METALKING AND ON A DUE CONSIDERATION O F THE SAME, THE ADDITION NEEDS TO ITA NOS.1068 & 1069/CHNY/2018 :- 3 -: BE DELETED. FURTHER M/S.KODANAD ESTATE (PAN NO.AABFT9 733C) ASSESSED TO INCOME TAX BY THE SAME ASSESSING OFFICER, FILED THE RETURN OF I NCOME ON 01.11.2004 (DUE DATE OF FILING THE RETURN OF INCOME 31.10.2004 SUNDAY) WHERE THE PARTNER'S ACCOUNT COPIES ARE FILED WHICH SHOWS THAT THERE IS A WITHDRAWAL OF RS. 50,25,000/-. 6. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE REJ ECTION OF THE EXPLANATIONS OF THE CREDITS IN THE CAPITAL ACCOUNTS OF HER TWO SOLE PRO PRIETRIX CONCERNS WAS ONLY ON SURMISES AND IN THE ABSENCE OF ANY MATERIAL TO DISPROVE THE ACCOUNT ENTRIES REGULARLY MAINTAINED, THE ADDITION OF THE AMOUNTS AS UNEXPLAI NED WAS UNJUSTIFIED AND CANNOT BE UPHELD. 7. THE CIT(A), IN ANY VIEW OF THE MATTER, HAVING DUE R EGARD TO THE EXPLANATIONS AND EVIDENCES FURNISHED, HELD THAT THE ASSESSEE HAD DIS CHARGED THE ONUS OF PROVING THE CREDITS IN THE CAPITAL ACCOUNTS OF THE TWO SOLE PRO PRIETRIX CONCERNS AND THUS DELETED THE ADDITIONS. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESS EE DID NOT FILE RETURN OF INCOME FOR THE AY 2003-04, HENCE NOTICE U/S.142( 1) HAS BEEN ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSEE FILED HER RETURN OF INCOME ON 01.03.2004 DECLARING TOTAL TAXABLE INCOME OF RS.1,7 8,07,240/- AND AGRICULTURAL INCOME OF RS.2,45,400/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES ISSUED U/S.143(2) & U/S.142(1) CALLING FOR CERTAIN INFORMATION. AFTER CONSIDERING THE DETAILS FILED BY THE ASSESSEE , THE AO MADE ADDITION OF RS.5,31,435/- ON THE GROUND THAT THE DIFFERENCE BETWEEN THE GROSS RECEIPTS OF RS.16,25,925/- AND RS.10,94,490/- WHICH WAS REFLECTED IN THE P&L A/C OF M/S.METAL KING, WAS NOT DULY RECONCILED. 4. ON AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE LD.CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE AO SAY ING THAT NO RECONCILIATION WAS MADE EITHER BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR BEFORE THE FIRST APPELLAT E PROCEEDINGS. ON BEING AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL B EFORE THE TRIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE H AD ALREADY FILED ITA NOS.1068 & 1069/CHNY/2018 :- 4 -: DETAILS AND RECONCILIATION BEFORE THE AO AS WELL AS THE FIRST APPELLATE AUTHORITY. HE FURTHER SUBMITTED THAT HE FILED THE RECONCILIATION ALONG WITH THE APPEAL PAPERS. HE FURTHER SUBMITTED THAT THE H ONBLE BENCH MAY BE PLEASED TO REMIT THIS ISSUE TO THE FILE OF THE AO T O EXAMINE THIS ISSUE AFRESH. 5. PER CONTRA, ON THE OTHER HAND, THE LD.DR HAS SUBMI TTED THAT THE ASSESSEE DID NOT FILE THESE DETAILS BEFORE THE LOWE R AUTHORITIES AND THEREFORE THE ORDERS PASSED BY THE LD.CIT(A) BE CON FIRMED. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERI ALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE LD.AR FILED CERTAIN DETAILS RELATING TO THE CASH CREDITS BEFORE US. UNDISPUTEDLY, THE AUTHORITIES BELOW HAVE NOT LOOKED INTO THE DETA ILS FILED BY THE ASSESSEE. THEREFORE, WE ARE OF THE FIRM VIEW THAT IN ORDER TO MEET PRINCIPLES OF NATURAL JUSTICE, WE FEEL THAT IT IS A FIT CASE TO REMIT BACK TO THE FILE OF THE AO TO DECIDE THIS ISSUE AFRESH AFTER CO NSIDERING THE DETAILS FILED BY THE ASSESSEE AFTER GIVING ADEQUATE OPPORTUNITY T O THE ASSESSEE OF BEING HEARD. 7. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 26 TH DAY OF AUGUST, 2019, IN CHENNAI. SD/- SD/- ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER ( - . . . / ) (DUVVURU R.L. REDDY) /JUDICIAL MEMBER ITA NOS.1068 & 1069/CHNY/2018 :- 5 -: /CHENNAI, 1 /DATED: 26 TH AUGUST, 2019. TLN & $23 43 /COPY TO: 1. # /APPELLANT 4. 5 /CIT 2. $%# /RESPONDENT 5. 3 $ /DR 3. 5 ( ) /CIT(A) 6. /GF