Senthil Kumar Angamuthu, CHENNAI V. ITO, CHENNAI

ITA 1268/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8693 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 09-05-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: S VIDYA
• Keywords: Business income; Peak credit
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I T.A. NO. 126 8 /MDS/201 6 / ASSESSMENT YEAR :20 11 - 12 SHRI SENTHIL KUMAR ANGAMUTHU, C/O AKBER RIFA & CO., AP - 122, 6 TH STREET, 11 TH MAIN ROAD, AF - BLOCK, ANNA NAGAR, CHENNAI 600 0 4 0 . [PAN:A FIPA6241C ] VS. T HE INCOME TAX OFFICER , BUSINESS WARD V ( 1 ) , CHENNAI . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS. S. VIDYA , C.A. / RESPONDENT BY : SHRI SHIVA SRINIVAS , JCIT / DATE OF HEARING : 13 . 0 7 .201 6 / DATE OF P RONOUNCEMENT : 29 . 0 7 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) 1 4 , CHENNAI , DATED 2 9 . 02 .20 1 6 RELEVANT TO THE ASSESSMENT YEAR 20 11 - 12 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF .10,21,180/ - AS UNEXPLAINED INCOME . 2. BRIEF FACTS OF TH E CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL , DEALING WITH THE BUSINESS OF REAL ESTATE AND FILED HIS RETURN OF INCOME FOR THE I.T.A. NO . 1268 /M/ 16 2 ASSESSMENT YEAR 20 11 - 12 ON 08 .0 8 .20 11 ADMITTING TOTAL INCOME OF . 3,99,609 / - . AS PER THE STATEMENT OF TOTAL INCOME, THE ASSESSEE HA S RECEIV ED SALARY FROM TRI - TECH SOLUTIONS PVT. LTD. AND ALSO RECEIV ED BUSINESS INCOME FROM V. SOFTWARE SOLUTIONS AND T RI TECH PROMOTERS. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 3 1.0 7 .20 12 . A QUESTIONNAIRE ALONG WITH NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO SENT TO THE ASSESSEE ON 04.04.2013 CALLING MAINLY CASH BOOK, BANK BOOK AND BANK ACCOUNT STATEMENTS. SINCE THERE WAS NO RESPONSE FROM ASSESSEE S SIDE, A LETTER WAS ISSUED TO THE AS SESSEE ON 26.06.2013 REQUIRING HIM TO SHOW - CAUSE AS TO WHY PENALTY PROCEEDINGS UNDER SECTION 271(1)(B) SHOULD NOT BE INITIATED AS HE WAS NOT RESPONDED TO THE NOTICE UNDER SECTION 142(1) OF THE ACT AND FAILED TO PRODUCE DETAILS CALLED FOR THEREIN. FOR THIS LETTER ALSO, THERE WAS NO RESPONSE FROM ASSESSEE S SIDE. HENCE, A SHOW - CAUSE NOTICE UNDER SECTION 271 READ WITH SECTION 274 WAS ISSUED TO THE ASSESSEE ON 23.07.2013 AND SERVED ON THE ASSESSEE ON 24.07.2013. SINCE THERE WAS NO RESPONSE FROM ASSESSEE S SIDE, THE ASSESSING OFFICER PASSED A PENALTY ORDER UNDER SECTION 271(1)(B) ON 07.08.2013 LEVYING PENALTY OF .10,000/ - AND SERVED THE ORDER ON THE ASSESSEE ON 07.08.2013. AFTERWARDS ALSO, THERE WAS NO RESPONSE FROM THE ASSESSEE. A LETTER WAS ISSUED ON 25.10.201 3 & 06.12.2013 TO FURNISH THE SOURCE FOR CASH DEPOSIT IN SB ACCOUNT OF HDFC BANK LTD. THEREAFTER, THE ASSESSEE APPEARED AND FURNISHED RETURN OF INCOME FOR THE ASSESSMENT YEAR I.T.A. NO . 1268 /M/ 16 3 2011 - 12 , P & L ACCOUNT, BALANCE SHEET, SAVINGS BANK ACCOUNT STATEMENT IN HDFC BAN K, ICICI BANK AND CURRENT ACCOUNT STATEMENT FROM HDFC BANK. THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE WAS DOING REAL ESTATE BUSINESS DURING THE YEAR, SOLD LANDS AND RECEIVED ADVANCE FOR SALE OF LAND AT ERKADU & K.K. NAGAR, WHICH WERE DEPOSITED IN HIS BANK ACCOUNTS WHICH IN TURN WAS HANDED OVER TO THE OWNER OF PLOTS MRS. ISHWARYA, WHO WAS APPOINTED BY MR. SUBRAMANI AS POWER AGENT, AFTER TAKING HIS COMMISSION. THE ASSESSEE WAS ASKED TO PRODUCE THE DOCUMENTS, PARTY - WISE DETAILS, DATE AND MODE OF RECEIPT, BUT , THE ASSESSEE HAS NOT PRODUCED COMPLETE DETAILS AS CALLED FOR SUCH AS PAN AND CONFIRMATION FROM THE PARTIES. HENCE, A DRAFT ASSESSMENT ORDER WAS SENT ON 03.03.2014 PROPOSING TO BRING TO TAX THE TOTAL CRE DITS OF .1,08,31,488/ - AFTER REDUCING TRANSFER ENTRIES AND INCOME OF .58,28,865/ - AS ADMITTED IN THE PROFIT AND LOSS ACCOUNT OF V. SOFTWARE SOLUTIONS. IN RESPONSE TO THIS DRAFT ASSESSMENT ORDER , THE ASSESSEE FILED PROPERTY DOCUMENTS, BANK ACCOUNT DETAILS ON 10.03.2014. THE LD. AR OF THE ASSESSEE FILED STATEMENT OF TOTAL CREDITS IN ASSESSEE S 7 BANK ACCOUNTS, WHICH APPEARS TO BE .2,22,03,289/ - . HE FURNISHED DOCUMENTARY EVIDENCE, PAN AND CONFIRMATION WHEREVER NECESSARY. AS REGARDS CASH DEPOSITS, THE LD. AR PLEADED BEFORE THE ASSESSING OFFICER THAT THERE WERE CASH WITHDRAWALS FROM THE BANK ACCOUNTS WHICH WERE WITHDRAWN FOR THE BUSINESS PURPOSE AND WHEN THERE WAS NO SUCH USE, IT WERE DEPOSITED BACK IN THE BANK ACCOUNTS ITSELF. THE LD. AR FILED CASH BOOK OF V. SOFTWARE I.T.A. NO . 1268 /M/ 16 4 SOLUTIONS AND TRITECH PROMOTERS. SINCE THE LD. AR PLEADED THAT THERE ARE EQUALLY CASH WITHDRAWALS IN ASSESSEE S BANK ACCOUNT, AN EFFORT WAS MADE TO FIND THE HIGHEST NEGATIVE CASH BALANCE ON A PARTICULAR DAY IN A YEAR WHICH IS NOT AVAILABLE IN HIS HAND FOR REDEPOSIT IN THE BANK ACCOUNT, BUT REDEPOSITED BY THE ASSESSEE FROM UNKNOWN SOURCE OF INCOME I.E., PEAK CREDIT. THIS EXERCISE HAS RESULTED IN THE FOLLOWING FIGURES: V. SOFTWARE SOLUTIONS - . 35,406 TRITECH PROMOTERS - . 9,85,774 TOTAL - . 1 0,21,180 ACCORDINGLY, THE ASSESSING OFFICER TREATED THE SUM OF .10,21,180/ - AS UNEXPLAINED CASH IN THE HANDS OF THE ASSESSEE FOR DEPOSITING IT IN THE BANK AND COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY ASSESSING TOTAL INCOME OF THE ASSE SSEE AT .14,20,789/ - . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING COPY OF THE DAY BOOK CONTAINING DEPOSITS AND WITHDRAWALS DURING THE FINANCIAL YEAR 2010 - 11 RELEVANT TO THE ASSESSMENT YEAR 2011 - 12 CONSISTING 52 PAGES, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE DEPOSIT S AND WITHDRAWALS ARE GENUINE . SINCE THE ASSESSEE HAS PRODUCED NECESSARY EVIDENCES WITH REGARD TO THE CASH DEPOSITS, CONFIRMATION LETTERS, DETAILS OF I.T.A. NO . 1268 /M/ 16 5 PURCHASES, DETAILS OF ADVANCE RECEIVED FROM THE CUSTOMERS BEFORE THE ASSESSING OFFICER, THE LD. C OUNSEL FOR THE ASSESSEE HAS PLEADED THAT THE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. 5. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS O N RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. AFTER VERIFICATION OF DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT LARGE SCALE OF DEPOSITS AND WITHDRAWALS FROM THE BANK ACCOUNTS WERE DONE BY THE ASSESSEE. THE CONTENTION OF THE ASSESSEE IS THAT THE DEPOSITS PERTAINS TO ADVANCES RECEIVED TOWARDS SALE OF LAND AND THE WITHDRAWALS WERE PAYMENTS MADE TO THE OWNERS OF PLOT OF LAND AFTER RETAINING HIS COMMISSION. SINCE THE ASSESSEE FAILED TO FURNISH THE REQUIRED EVIDENCE, THE ASSESSING OFFICER COMPUTED THE PEAK CREDIT AVAILABLE IN THE BANK ACCOUNT OF THE ASSESSEE AT .10,21,180/ - AS UNEXPLAINED CASH IN THE HANDS OF THE ASSESSEE. EVEN BEFORE THE LD. CIT(A), THE ASSESSEE HAS FURNISHED EVIDENCE OR EXPLANATION FOR THE PEAK CREDIT AVAILABLE IN THE BANK ACCOUNT OF THE ASSESSEE, HE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. WE FIND FROM THE ORDERS OF THE AUTHORITIES BELOW THAT IN THE ASSESSMENT ORDER, THE NATURE OF THE BUSINESS OF THE ASSESSEE APPEARS TO BE REAL ESTATE BUSINESS AND A S PER THE STATEMENT OF INCOME, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS RECEIVING I.T.A. NO . 1268 /M/ 16 6 SALARY FROM TRI - TECH SOLUTIONS PVT. LTD AND RECEIVING BUSINESS INCOME FROM V. SOFTWARE SOLUTIONS AND TRITECH PROMOTERS. HOWEVER, BEFORE THE LD. CIT(A), THE ASSESS EE HAS SUBMITTED THAT HE WAS DOING BUSINESS IN SOFTWARE, DRAWING SALARY FROM A COMPANY AND IN ADDITION TO THIS, HE WAS A PARTNER IN AN UNREGISTERED PARTNERSHIP, WHICH IS CARRYING ON REAL ESTATE COMMISSION BUSINESS AND THE BANK ACCOUNT WAS MAINTAINED IN HIS NAME FOR CONVENIENCE SAKE. THIS FACT REQUIRES TO BE VERIFIED BY THE ASSESSING OFFICER. FURTHER, THE ASSESSEE HAS FILED COPY OF THE DAY BOOK CONTAINING DATE - WISE DEPOSITS AND WITHDRAWALS DURING THE FINANCIAL YEAR 2010 - 11 RELEVANT TO THE ASSESSMENT YEAR 20 11 - 12 CONSISTING 52 PAGES FOR THE FIRST TIME BEFORE THE TRIBUNAL. THUS, WE DIRECT THE ASSESSING OFFICER TO VERIFY THE DETAILS FURNISHED BEFORE THE TRIBUNAL AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 29 TH JU LY , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDI CIAL MEMBER CHENNAI, DATED, THE 29 . 0 7 .201 6 VM/ - I.T.A. NO . 1268 /M/ 16 7 / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.