A.G.Balasubramanian, Coimbatore V. ITO, Coimbatore

ITA 1080/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64324 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K SUBRAMANIAM
• Keywords: Gift; Business income; Condonation of delay
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT A ND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1080/MDS/2012 (ASSESSMENT YEAR: 2008-09) MR. A.G.BALASUBRAMANIAN, A-1, SHAKTHINAGAR, KAUNDAMPALAYAM, COIMBATORE-641 029. PAN:AHHPB1479J. VS. INCOME TAX OFFICER, WARD-II(3), COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. K.SUBRAMANIAM, ADVOC ATE RESPONDENT BY : MR. GURU BASHYAM, JCIT DATE OF HEARING : 1 ST OCTOBER, 2012 DATE OF PRONOUNCEMENT : 1 ST OCTOBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNI NG THE ORDER OF THE CIT(A)I, COIMBATORE DATED 21.09. 2011. 2. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSE E WITH THE DELAY OF 171 DAYS. THE PETITION FOR CONDONATION OF DELAY SUPPORTED BY AN AFFIDAVIT OF THE ASSESSEE HAS BEEN FILED. THE ASSESSEE HAS STATED IN THE AFFIDAVIT THAT THE DELAY HAS OCCURRED ON ACCOUNT OF HIS ILLNESS. TO SUPPORT HIS CONTENTIONS THE ASSESSEE HAS FILED A MEDICAL CERTIFICATE DATED 8.5.2012 ITA NO.1080/MDS/2012 2 FROM ASSISTANT PROFESSOR OF SURGERY, COIMBATORE MED ICAL COLLEGE AND HOSPITAL, COIMBATORE. THE D.R. HAS ALSO NOT RAISED ANY SERIOUS OBJECTION IN CONDONING THE DELAY IN FILING OF THE APPEAL. THE HONBLE SUPREME COURT OF INDIA HAS HELD IN VARIOUS CASES THAT WHILE DEALING WITH THE APPLICAT ION FOR CONDONATION OF DELAY ACCEPTANCE OF EXPLANATION FURN ISHED SHOULD BE THE RULE AND REFUSAL AN EXCEPTION MORE S O WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONAFIDE CAN BE I MPUTED TO THE DEFAULTING PARTY. WHEN STAKES ARE HIGH AND /OR ARGUABLE POINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE , CAUSING ENORMOUS LOSS AND IRREPARABLE INJURY TO THE PARTY A GAINST WHOM THE LIS TERMINATES EITHER BY DEFAULT OR INACTI ON AND DEFEATING VALUABLE RIGHT OF SUCH A PARTY TO HAVE T HE DECISION ON MERITS, THE DELAY SHOULD BE CONDONED WITHOUT TA KING A PEDANTIC AND HYPER-TECHNICAL VIEW OF THE MATTER AND EXPLANATION FURNISHED. IN VIEW OF THE SUFFICIENT CAUSE EXPLAINED BY THE ASSESSEE FOR THE DELAY IN FILING O F THE APPEAL, WE DEEM IT APPROPRIATE TO CONDONE THE DELAY AND ADM IT THE APPEAL FOR DISPOSAL ON MERITS. ITA NO.1080/MDS/2012 3 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN TRADING AND MANUFACTURING OF NAILS UNDER THE NA ME & STYLE OF M/S.SRI AMMAN INDUSTRIES. THE ASSESSEE FILED RE TURN OF INCOME ON 11.9.2009 RELEVANT TO THE ASSESSMENT YEAR 2008- 09 ADMITTING HIS BUSINESS INCOME AS ` 1,38,750/-. THE RETURN OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) AND THEREAFTER SELECTED FOR SCRUTINY. NOTICE UNDER SECT ION 143(2) DATED 3.9.2010 WAS ISSUED TO THE ASSESSEE. AS PER T HE BANK TRANSACTIONS OF THE ASSESSEE, THE ASSESSEE HAD RECE IVED CASH ON VARIOUS DATES TO THE TUNE OF ` 21,69,700/-. WHEN THE EXPLANATION WAS SOUGHT FROM THE ASSESSEE BY THE ASS ESSING OFFICER, THE ASSESSEE SUBMITTED THAT THE AMOUNTS RE CEIVED BY THE ASSESSEE IN CASH FROM HIS FRIENDS WHO HAD AGRI CULTURAL INCOME AND A GIFT OF ` 6,05,000/- WAS RECEIVED FROM HIS MOTHER ON VARIOUS DATES. IN ORDER TO SUPPORT HIS CONTENTIO NS, THE ASSESSEE PRODUCED PROOF OF LANDS HELD BY HIS FRIEND S FROM WHOM HE HAD TAKEN LOAN. HOWEVER, HE ADMITTED THAT N ONE OF HIS FRIENDS WHO HAD ADVANCED LOAN HAD PAN AND BANK ACCOUNTS. HE FURTHER SUBMITTED THAT THE AMOUNT WHI CH HE RECEIVED FROM HIS MOTHER, SHE HAD GOT AS RETIREMENT BENEFIT OF ITA NO.1080/MDS/2012 4 HER LATE HUSBAND. NOT SATISFIED WITH THE SUBMISSION S AND EXPLANATIONS FURNISHED BY THE ASSESSEE, THE ASSESSI NG OFFICER MADE ASSESSMENT UNDER SECTION 144 OF THE IN COME TAX ACT. AGGRIEVED AGAINST THE ASSESSMENT ORDER, TH E ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). TH E CIT(A) HELD THAT THE APPELLANT COULD NOT FURNISH SATISFACT ORY DETAILS REGARDING AMOUNT RECEIVED EITHER FROM HIS FRIENDS O R MOTHER. HE FURTHER HELD THAT MERE FILING OF AFFIDAVITS DO N OT ABSOLVE THE ASSESSEE OF PROVING CREDITWORTHINESS OF THE CREDITO RS AND ALSO GENUINENESS OF THE TRANSACTION. THE ASSESSEE COULD NOT PRODUCE THE REGULAR CASH BOOK TO SHOW THE REGULAR D AY-TO-DAY TRANSACTIONS. ACCORDINGLY, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE ORDER OF THE ASSESSI NG OFFICER. NOW THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE T HE TRIBUNAL ASSAILING THE ORDER OF THE CIT(A). 4. SHRI K.SUBRAMANIAM, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FURNISHED DETAILS OF THE AMOUNTS RECEIVED FROM HIS VARIOUS FRIENDS AS INTEREST FREE LOANS AS WELL THE AMOUNT RECEIVED FROM HIS MOT HER. THE REMITTANCES MADE BY HIS FRIENDS HAD BEEN DULY ACKNO WLEDGED ITA NO.1080/MDS/2012 5 BY ALL OF THEM AND EVEN THEY HAVE TENDERED THEIR AF FIDAVITS IN RESPECT OF THE LOAN ADVANCED TO THE ASSESSEE. HOWEV ER, THE ASSESSING OFFICER IN AN UNJUSTIFIED MANNER HAS COMP LETED THE ASSESSMENT UNDER SECTION 144. FURTHER, THE CIT(A) H AS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R TO THE TUNE OF ` 21,69,700/- BY BRUSHING ASIDE THE EVIDENCES FURNISHED BY THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS NOT TAKEN IN TO CONSIDERATION THE FACT THAT THE AMOUNT RECEIVED BY THE ASSESSEE WAS DULY UTILIZED BY THE ASSESSEE DURING THE COURSE OF HIS BUSINESS IN MAKING PAYMENTS THROUGH C HEQUE TO THE SUPPLIERS OF THE RAW MATERIALS. . THE LEARNED C OUNSEL CONTENDED THAT THE CIT(A) HAS NOT APPRECIATED THE F ACT THAT VARIOUS DEPOSITS RECEIVED BY THE ASSESSEE WERE UTI LIZED IN BUSINESS PURPOSES ONLY AND HAD REJECTED THE APPEAL IN A MECHANICAL MANNER. 5. ON THE OTHER HAND, SHRI GURU BASHYAM, APPEARING ON BEHALF OF THE DEPARTMENT, SUPPORTING THE ORDER OF T HE CIT(A), SUBMITTED THAT THE ASSESSEE HAS MISERABLY FAILED TO EXPLAIN THE SOURCE OF REMITTANCES. THE ASSESSEE COULD NOT PRODUCE ITA NO.1080/MDS/2012 6 REGULAR CASH BOOK TO SHOW THE CASH TRANSACTIONS AN D NO RELIANCE CAN BE PLACED ON THE AFFIDAVITS TENDERED B Y THE PERSONS WHO HAVE ALLEGED TO HAVE ADVANCED MONEY TO THE ASSESSEE AS THE AFFIDAVITS DO NOT GIVE VITAL DETAIL S OF INCOME AND EXPENDITURE. THE ASSESSEE HAS NOT BEEN ABLE TO GIVE DETAILS OF THE EXACT AMOUNT RECEIVED BY HIS MOTHER ON ACCOUNT OF DEATH OF HIS FATHER WAY BACK IN THE YEAR 1996. I N NONE OF THE CASH TRANSACTIONS, THE ASSESSEE COULD PROVE THE GENUINENESS OF THE TRANSACTIONS BEYOND ANY SHADOW O F DOUBT AND THE CREDITWORTHINESS OF THE CREDITORS. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE PARTIE S AND HAVE ALSO PERUSED THE ORDERS PASSED BY THE AUTH ORITIES BELOW. A PERUSAL OF THE ORDER PASSED BY THE CIT(A) SHOWS THAT THE ASSESSEE HAS FILED AFFIDAVITS OF THE PERSO NS WHO HAD ADVANCED VARIOUS AMOUNTS ON DIFFERENT DATES. AS PER THE CONTENTIONS OF THE ASSESSEE, THE AMOUNT HAS BEEN UT ILIZED BY THE ASSESSEE IN MAKING PAYMENTS THROUGH CHEQUE TO T HE SUPPLIERS OF THE RAW MATERIALS. A PERUSAL OF THE ORDERS SHOW THAT THE AUTHORITIES BELOW HAVE NOT VERIFIED THE FA CT THAT WHETHER THE AMOUNT HAS BEEN UTILIZED, AS PER THE SU BMISSIONS ITA NO.1080/MDS/2012 7 MADE BY THE ASSESSEE, FOR PAYMENT MADE TO THE SUPP LIERS OF THE RAW MATERIALS FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THE COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE ASSESSEE CAN EXPLAIN THE ENTIRE AMOUNTS RECEIVED AL ONG WITH THE PROOF/EVIDENCE. IN THE INTEREST OF JUSTICE, WE DEEM IT APPROPRIATE TO REMIT THE MATTER BACK TO THE ASSESSI NG OFFICER. 7. THE IMPUGNED ORDER IS SET ASIDE, THE MATTER IS REMITTED BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE A FRESH AFTER TAKING INTO CONSIDERATION THE EVIDENCE SUBMITTED BY THE ASSESSEE TO EXPLAIN THE SOURCE OF REMITTANCES AND T HE CREDITWORTHINESS OF THE CREDITORS. ORDERED ACCORDIN GLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 1 ST DAY OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (DR. O.K.NARAYANAN ) (V IKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 1 ST OCTOBER, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.