ITO, CHENNAI V. M/s. Victory Impex, CHENNAI

ITA 1083/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64203 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA IRS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER .. ITA NO. 1083/MDS/2012 ASSESSMENT YEAR: 2007-08 THE INCOME TAX OFFICER, BUSINESS WARD-V(4), CHENNAI. V. M/S. VICTORY IMPEX (MR. N.V. BABU) NO. 194, O-BLOCK, GANAPATHY COLONY, ANNA NAGAR (E), CHENNAI-600 101. (PAN : AADFV9325Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. DAS GUPTA, IRS, JCIT. RESPONDENT BY : NONE DATE OF HEARING : 21.0 8.2012 DATE OF PRONOUNCEMENT : 21.08.201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(APPEAL S)-VIII, CHENNAI DATED 17-02-2012 FOR THE ASSESSMENT YEAR 2007-08. 2. FACTS IN BRIEF ARE THAT THE REVENUE HAS RAISED M ANY GROUNDS IN THE APPEAL. THE MAIN GROUND OF APPEAL RELATES TO T HE ACTION OF THE ITA NO.1083/MDS/2012 2 LEARNED CIT(APPEALS) IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT FOLLOWING RULE 46A AND BY MERELY BA SING ON THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE. IN THE A SSESSMENT ORDER THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSE E HAD FILED COMPUTER BOOKS OF ACCOUNTS AND THE INCOME & EXPENDI TURE STATEMENT FILED ALONG WITH THE RETURN OF INCOME REV EALED THE FOLLOWING: SALES ` 6,81,44,820/- AND PURCHASES 6,68,71,168.20. PARA: 1 THE COMPUTER BOOK REVEALING THE DETAILS OF THE ASSESSEES TRADING ACTIVITY CONSISTING OF 309 P AGES. SALES REGISTER CONTAINING PAGES 024 TO 086 REVEALS THAT TRANSACTION COMMENCING FROM 23.10.2006 TO 31.03.200 7 AMOUNTING TO ` 6,95,50,599.90 AS AGAINST THE ADMITTED FIGURE ALONG WITH RETURN OF INCOME REVEALS ONLY ` 6,.81,44,820/-. DIFFERENCE OF ` 14,05,779 NOT RECORDED IN THE RETURN OF INCOME FOR WHICH ASSESSEE HAS NOT OFFERED ANY EXPLANATION AND ADDED TO THE INCOME RETURNED AS UNDISCLOSED INCOME TREATED AS INCOME FR OM OTHER SOURCES. ACCORDINGLY, AN ADDITION OF ` 14,05,779/- WAS MADE. 3. THE ASSESSING OFFICER FURTHER OBSERVED THAT : PURCHASES AS ENTERED IN THE COMPUTER BOOK FROM PAG E NO. 87 COMMENCING FROM 23-10-2006 TO PAGE 103 DT. 29-03 - 2007 TOTAL PURCHASES COMES TO ` 6,87,14,457.48 WILL BE TREATED AS PURCHASES TAKEN INTO ACCOUNT BY UTILIZIN G THE ITA NO.1083/MDS/2012 3 CASH NOT ACCOUNTED FOR IN ACCOUNTS FOR PURCHASE OF SCRAPS AND THE DIFFERENCE WILL BE CONSIDERED AS9 INCOME UNDISCLOSED UNDER THE HEAD OTHER SOURCES. ACCORDINGLY AN ADDITION OF RS 18,43,289/- WAS MADE. 4. THE ASSESSING OFFICER FURTHER NOTICED THAT THE C APITAL ACCOUNT OF THE PARTNER, SHRI N.V. BABU REVEALED THAT A SUM OF ` 16,70,000/- IN CASH WAS BROUGHT IN AND THAT NO EXPLANATION WAS OFF ERED FOR THE SOURCES EXCEPT ADMITTING THAT SHRI N. V. BABU, PARTN ER OF THE FIRM WAS A MANAGING DIRECTOR OF M/S. SHRI KANCHI STEEL P VT. LTD. AND M/S. KANCHI STEEL PVT. LTD. HAD OBTAINED FINANCIAL ASSIS TANCE FROM TAMILNADU MERCANTILE BANK. HENCE SHRI N.V. BABU AS M ANAGING DIRECTOR OF THE COMPANY HAD INTRODUCED CASH OF RS 1 6.70 LAKHS FROM PERSONAL INCOME AND SALE OF AGRICULTURAL LANDS TO T HE ASSESSEE AND OUT OF THAT AN AMOUNT OF ` 15 LAKHS WAS REPAID TO TAMILNADU MERCANTILE BANK ON VARIOUS DATES ON ACCOUNT OF M/S. SHRI KANCHI STEEL PVT. LTD. FURTHER AN AMOUNT OF ` 1,96,754/- WAS PAID TOWARDS PERSONAL LOAN OF SHRI N.V. BABU. THE ASSESSING OFFI CER OBSERVED THAT HE HAD NOT FURNISHED ANY EVIDENCE FOR THE SOURCE IN TRODUCED FROM PERSONAL INCOME AND SALE OF AGRICULTURAL LANDS. TH E ASSESSING OFFICER FOUND THAT TILL DATE NO EXPLANATION OR EVIDENCE HAD BEEN OFFERED OR PRODUCED. ACCORDINGLY, THE ENTIRE AMOUNT WAS CONSI DERED AS INCOME EARNED BUT NOT DISCLOSED TO THE DEPARTMENT DURING T HE PREVIOUS YEAR ITA NO.1083/MDS/2012 4 AND ADDED THE SAME AS UNDER THE HEAD OTHER SOURCES . ACCORDINGLY AN ADDITION OF ` 16,70,000/- WAS MADE. 5. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE THE CIT(A). THE LEARNED CIT(APPEALS) BY CON SIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE DELETED ALL THE ADDITIONS MADE BY THE ASSESSING OFFICER. 6. ON BEING AGGRIEVED, THE REVENUE CARRIED THE MATT ER BEFORE THE TRIBUNAL. THE LEARNED DR SUBMITTED THAT THE LEARNE D CIT(APPEALS) HAS DELETED ALL THE ADDITIONS ONLY ON THE BASIS OF THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE WITHOUT CALLING FO R THE REMAND REPORT FROM THE ASSESSING OFFICER. 7. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING. 8. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN TH E ASSESSMENT ORDER THE ASSESSING OFFICER HAS MADE ADDITIONS IN RESPECT OF SALES AND PURCHASES AND CAPITAL INTRODUCED BY ONE OF THE PART NERS. WHEN THE ASSESSING OFFICER SPECIFICALLY ASKED FOR DETAILS IN RESPECT OF DIFFERENCES IN SALE AND PURCHASE, NO EXPLANATION WA S OFFERED BY THE ASSESSEE. INSOFAR AS THE CAPITAL INTRODUCED BY THE PARTNER SHRI N.V. BABU IS CONCERNED, NEITHER ANY EVIDENCE WAS PRODUCED NOR ANY ITA NO.1083/MDS/2012 5 EXPLANATION WAS GIVEN BEFORE THE ASSESSING OFFICER. IT IS ONLY BEFORE THE LEARNED CIT(APPEALS) THAT THE ASSESSEE HAS GIVE N AN EXPLANATION ABOUT THE DIFFERENCE. IN OUR CONSIDERED OPINION, T HE CIT(A) OUGHT TO HAVE CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER AND DECIDED THE ISSUE. THEREFORE, WE FIND THAT THE ORD ER PASSED BY THE LEARNED CIT(APPEALS) WITHOUT CONSIDERING RULE 46A C ANNOT SURVIVE. WE, THEREFORE, SET ASIDE THE ORDER PASSED BY THE LE ARNED CIT(APPEALS) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE MATTER AFRESH IN ACCORDANC E WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE OF B EING HEARD. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON TUESDAY, THE 21 ST OF AUGUST, 2012 AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) ( V.DURGA RAO ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 21 ST AUGUST, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE