ACIT, Cuddalore V. NST Impex Private Limited, Chidambaram

ITA 1079/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8858 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULOCHANA
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3); 115JB; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.957/MDS/2014 ( / ASSESSMENT YEAR: 2008-09) M/S. NST IMPEX P.LTD., 11, VENUGOPALA PILLAI ROAD, CHIDAMBARAM-608 001. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, CUDDALORE. PAN:AACCN3735G ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NO.1079/MDS/2014 ( / ASSESSMENT YEAR: 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, CUDDALORE. VS M/S. NST IMPEX P.LTD., 11, VENUGOPALA PILLAI ROAD, CHIDAMBARAM-608 001 PAN:AACCN3735G ( /APPELLANT) ( /RESPONDENT) ASSESSEE BY : MR. A.S.SRIRAMAN , ADVOCATE REVENUE BY : MS. SULOCHANA, JCIT /DATE OF HEARING : 9 TH JUNE,, 2016 /DATE OF PRONOUNCEMENT : 17 TH AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND TH E REVENUE RESPECTIVELY AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNAI D ATED 31.01.2014 IN ITA NO.228/13-14/A-VI PASSED UNDER SECTION 143(3)(II) R.W.S 250(6) OF THE ACT. SINCE THE ISS UES INVOLVED IN THESE APPEALS ARE COMMON, THEY ARE HEARD TOGETHE R AND 2 ITA NO.957 & 1079/MDS/2014 DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEALS, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLO WS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER AGGREGATING TO `11,88,933/- TOWARDS CASH DEPOSITS RECEIVED FROM MRS. N.PREMA `3,00,000/- MRS. N.SUMATHI ` 88,933/- MRS. D.BALAYOGINI `1,00,000/-, MRS.D.MALARVISHIDEVI `1,00,000/-, SMT. J.VANAROJA `2,00,000/-, MRS. B.GAYATHRI ` 3,00,000/- & MR. A.N.UNNIRAJAN `1,00,000/- BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT AND BYHOLDING THAT THE LOAN TRANSACTIONS ARE NOT GENUINE SINCE THE IDENTITY OF THE DEPOSITORS ARE NOT PROVED. 3. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS AP PEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY NOT TAKING NOTE OF THE FACT THAT THE UNSECURED LOAN OF 2,14,16,765/- DISCLOSED BY THE ASSESSEE WAS NOT SUBSTANTIATED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 EN GAGED IN THE BUSINESS OF FINANCIAL SERVICES FILED ITS RE TURN OF INCOME ON 29.09.2008 FOR THE ASSESSMENT YEAR 2008-09 ADMIT TING 3 ITA NO.957 & 1079/MDS/2014 INCOME OF ` 52,492/- UNDER SECTION 115JB OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE A SSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 31 .12.2010 WHEREIN THE LEARNED ASSESSING OFFICER MADE ADDITION OF ` 2,82,71,561/- TOWARDS UNSECURED LOANS AS THOSE TRANSACTIONS WERE NOT FOUND TO BE GENUINE AND IDENT ITY OF THE DEPOSITORS WERE NOT PROVED. ACCORDINGLY, THE LEARN ED ASSESSING OFFICER MADE ADDITION OF RS.2,82,71,561/- IN THE HANDS OF THE ASSESSEE. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) DELETED THE ADDITION RS.2,05,16,213/- BEC AUSE IN THE REMAND PROCEEDINGS THE LEARNED AUTHORIZED REPRESENTATIVE OF THE APPELLANT HAD FURNISHED LOAN CONFIRMATION STATEMENT IN RESPECT OF ALL THE CREDIT ORS BEFORE THE ASSESSMENT YEAR 2007-08 WITH DETAILS OF THEIR N AME & ADDRESS AND ALL THOSE LOANS WERE RECEIVED THROUGH B ANKING CHANNELS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALSO OBSERVED THAT THESE LOANS WERE RECEI VED BY THE ASSESSEE DURING THE ASSESSMENT YEAR 2007-08 WHI CH IS THE YEAR PRECEDING TO THE RELEVANT ASSESSMENT YEAR. 4 ITA NO.957 & 1079/MDS/2014 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER GAVE RELIEF TO THE ASSESSEE FOR RS.64,66,42 1/- BECAUSE IN THE REMAND PROCEEDINGS, THE LEARNED ASSE SSING OFFICER HAD ACCEPTED THE GENUINESS OF THE LOAN CRED ITORS FOR THE ABOVE MENTIONED AMOUNT. 7. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER WITH RESPECT TO THE ADDITION OF RS.11,88,93 3/- WITH RESPECT TO THE CREDITORS MRS. N.PREMA `3,00,000/- MRS. N.SUMATHI ` 88,933/- MRS. D.BALAYOGINI `1,00,000/-, MRS.D.MALARVISHIDEVI `1,00,000/-, SMT. J.VANAROJA ` 2,00,000/- , MRS. B.GAYATHRI ` 3,00,000/- & MR. A.N.UNNIRAJAN `1,00,000/- BECAUSE OF THE FOLLOWING FINDINGS OF THE LEARNED AS SESSING OFFICER COULD NOT BE REBUTTED BY THE ASSESSEE / AS SESSEES REPRESENTATIVE:- I) MOST OF THE ABOVE MENTIONED DID NOT HAVE ANY MEA NS FOR ADVANCING SUCH AMOUNT TO THE APPELLANT. II) ALL THE ABOVE STATED PERSONS DID NOT HAVE ANY INDEPENDENT SOURCE OF INCOME. 5 ITA NO.957 & 1079/MDS/2014 III) MOST OF THE ABOVE STATED PERSONS DID NOT FILE RETURN OF INCOME. FOR THE ABOVE MENTIONED REASONS THE LD.CIT(A) OPINE D THAT, THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTH INESS OF THE CREDITORS COULD NOT BE ESTABLISHED. 8. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD ESTABLISHED THE GENUINENESS OF THE CREDITORS SUBSTANTIALLY AND ONLY FEW INDIVIDUALS WHO HAD LEND PETTY AMOUNTS TO THE ASSES SEE THE CONFIRMATION STATEMENTS COULD NOT BE OBTAINED DUE T O GENUINE PRACTICAL DIFFICULTIES AND THAT DOES NOT ME AN THAT THOSE CREDITORS WERE NOT GENUINE. IT WAS THEREFORE PLEADED THAT THOSE CREDITORS NEED NOT BE DISBELIEVED AND AC CORDINGLY RELIEF MAY BE GRANTED. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE. 6 ITA NO.957 & 1079/MDS/2014 10. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE, IT IS APPARENT THAT THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) AFTER OBTAINING REMAND REPORT FROM THE LE ARNED ASSESSING OFFICER AND ELABORATELY CONSIDERING THE I SSUE HAS SUBSTANTIALLY GIVEN RELIEF TO THE ASSESSEE AGAINST THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER TOWARDS CASH CREDIT U/S.68 OF THE ACT TO THE EXTENT OF RS.2,69,82,634/- (2,05,16,213/- + 64,66,421/-) WHICH AMOUNTS TO 96% APPROXIMATELY OF THE ADDITION MADE BY THE LEARNED A SSESSING OFFICER. ONLY TO THE EXTENT OF 4% OF THE TOTAL CRE DITORS THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION. IN THESE CIRCUMSTANCES, WE FIND MERIT IN THE CONTENTION OF THE LEARNED AUTHORIZED REPRESE NTATIVE. THE ASSESSEE HAS PROVED BEYOND DOUBT THE GENUINENES S OF THE LOAN TO THE EXTENT OF 96% OF THE TOTAL CREDITOR S IT HAD DISCLOSED IN ITS BALANCE SHEET. ONLY TO THE EXTENT OF 4% OF CREDITORS THE ASSESSEE WAS NOT ABLE TO FURNISH CONF IRMATION STATEMENT ETC., DUE TO VARIOUS REASONS. IT IS ALSO NOT IN DISPUTE THAT THOSE 4% OF THE CREDITORS HAVE EXTENDE D LOAN TO THE ASSESSEE THROUGH BANKING CHANNELS. THUS, ALL TH E LOAN 7 ITA NO.957 & 1079/MDS/2014 TRANSACTIONS WERE THROUGH BANKING CHANNELS. IN THIS SITUATION, WE DO NOT FIND IT NECESSARY FOR SUSTAINING THE ADDI TION OF RS.11,88,933/- CONFIRMED BY THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS). HENCE, WE HEREBY DELETE THE ADDITION OF RS.11,88,933/- SUSTAINED BY THE LD.CIT(A). 11. SINCE WE HAVE HELD THE ISSUE IN FAVOUR OF THE A SSESSEE AND AGAINST THE REVENUE, THE APPEAL OF THE REVENUE WHICH IS ON THE VERY SAME ISSUE WILL NOT SURVIVE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH AUGUST, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) ! # / JUDICIAL MEMBER # / ACCOUNTANT MEMBER ! /CHENNAI, ' /DATED 17 TH AUGUST, 2016 SOMU )* +* /COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. , () /CIT(A) 4. , /CIT 5. * 0 /DR 6. /GF .