DCIT, CHENNAI V. L.S.Abhinesha Babu, CHENNAI

ITA 1553/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64234 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SHUKLA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Unexplained cash credit; Income from undisclosed sources; Assessment record
• Section: 68; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1553/MDS/2011 (ASSESSMENT YEAR : 2006-07) THE DEPUTY COMMISSIONER OF INCOME TAX, SALARY CIRCLE IV, CHENNAI - 600 034. (APPELLANT) V. SHRI L.S. ABHINESHA BABU, NO.32, NATHAMUNI STREET, NADUVANKARAI, ANNA NAGAR, CHENNAI - 600 034 . PAN : AAIPA9610J (RESPONDENT) APPELLANT BY : SMT. ANUPAMA SHUKLA, CIT RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE DATE OF HEARING : 30.08.2012 DATE OF PRONOUNCEMENT : 30.08.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E IS THAT CIT(APPEALS) HELD THE ADDITION MADE UNDER SECTION 6 8 OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR UNEXPLAINED CASH CREDIT, TO BE NOT WARRANTED. 2 I.T.A. NO. 1553/MDS/11 2. FACTS APROPOS ARE THAT ASSESSEE HAD FILED A RETU RN OF INCOME FOR IMPUGNED ASSESSMENT YEAR ON 18.6.2007 DECLARING INC OME OF ` 5,80,000/-. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, IT WAS NOTED THAT ASSESSEE HAD BORROWED A SUM OF ` 8,41,56,200/- FROM ONE SHRI R.R. GOVINDARAJU FOR PURCHASE OF AN IMMOVABLE PROPERTY. ASSESSEE PRODUCED BEFORE THE A.O. THE SAID SHRI R.R. GOVINDA RAJU AND ALSO FILED A CONFIRMATION IN THE FORM OF AN AFFIDAVIT FROM THE S AID PERSON. THE ASSESSMENT WAS ORIGINALLY COMPLETED ACCEPTING SUCH EXPLANATION. DURING THE COURSE OF SUCH ASSESSMENT PROCEEDINGS, A SSESSING OFFICER HAD WRITTEN A LETTER TO THE ASSESSING OFFICER OF CR EDITOR SHRI R.R. GOVINDARAJU, INTIMATING THE FACTUM OF THE LOAN ALLE GED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM THE SAID PERSON. WHE N THE ORIGINAL ASSESSMENT WAS COMPLETED, THE A.O. OF THE ASSESSEE WAS STILL TO RECEIVE ANY REPLY FROM THE ASSESSING OFFICER OF SHRI R.R. G OVINDARAJU. IT SEEMS THEREAFTER ON 29.7.2009, ASSESSING OFFICER RECEIVED A LETTER FROM THE ASSESSING OFFICER OF SHRI R.R. GOVINDARAJU, WHEREIN IT WAS STATED THAT ASSESSEES NAME DID NOT APPEAR IN THE CREDITORS LI ST FURNISHED BY SHRI R.R. GOVINDARAJU. ASSESSING OFFICER, TAKING A VIEW THAT THE CLAIM OF CREDIT WAS SUSPECT, INITIATED PROCEEDINGS FOR REOPE NING, AND A NOTICE WAS ISSUED UNDER SECTION 148 TO THE ASSESSEE ON 5.8.200 9. SHRI R.R. GOVINDARAJU WAS SUMMONED DURING THE RE-ASSESSMENT P ROCEEDINGS AND 3 I.T.A. NO. 1553/MDS/11 A STATEMENT WAS TAKEN FROM HIM. IN THE SWORN STATE MENT, SHRI R.R. GOVINDARAJU CONFIRMED THE FACTUM OF LOAN GIVEN BY H IM TO THE ASSESSEE. THEREAFTER, THE ASSESSING OFFICER OF THE ASSESSEE P ASSED ON THE STATEMENT GIVEN BY SHRI R.R. GOVINDARAJU, TO THE AS SESSING OFFICER OF SHRI R.R. GOVINDARAJU, INTER ALIA SEEKING FURTHER I NFORMATION FROM THE LATTER WITH REGARD TO THE CLAIM OF THE ASSESSEE THA T LOAN WAS TAKEN FROM SHRI R.R. GOVINDARAJU. ASSESSING OFFICER OF THE AS SESSEE ALSO REQUIRED THE ASSESSING OFFICER OF SHRI R.R. GOVINDARAJU TO F URNISH HIM A COPY OF THE SCRUTINY ASSESSMENT ORDER OF SHRI R.R. GOVINDAR AJU. HOWEVER, IT SEEMS ON SUCH COMMUNICATION, NO REPLY WAS RECEIVED FROM THE ASSESSING OFFICER OF SHRI R.R. GOVINDARAJU. BASED ON THESE, ASSESSING OFFICER OF THE ASSESSEE, IN THE RE-ASSESSMENT PROCE EDINGS, CAME TO A CONCLUSION THAT LOAN STATED TO HAVE BEEN RECEIVED B Y THE ASSESSEE FROM SHRI R.R. GOVINDARAJU COULD NOT BE BELIEVED. SUCH SUM WAS THEREFORE BROUGHT TO TAX UNDER SECTION 68 AS HIS INCOME FROM UNDISCLOSED SOURCES. 3. ASSESSEE MOVED IN APPEAL BEFORE CIT(APPEALS) WHE RE, IN ADDITION TO QUESTIONING THE REOPENING DONE BY THE ASSESSING OFFICER, ALSO ASSAILED THE ADDITION OF THE LOAN AMOUNT AS HIS INC OME. AS PER THE ASSESSEE, THE STATEMENT GIVEN BY THE LOAN CREDITOR, WHICH CONFIRMED THE LOAN, WAS NEVER REBUTTED BY THE REVENUE. LOAN CRED ITOR WAS 4 I.T.A. NO. 1553/MDS/11 IDENTIFIABLE. ONLY REASON FOR THE ADDITION WAS THA T THE ASSESSING OFFICER OF SHRI R.R. GOVINDARAJU HAD NOT RESPONDED TO THE C OMMUNICATION OF ASSESSEES ASSESSING OFFICER. THIS COULD NOT BE A REASON FOR ADDITION UNDER SECTION 68 OF THE ACT. PROOF OF LOAN WAS FUR NISHED AND THE TRANSACTIONS WERE BY CHEQUE ONLY. CIT(APPEALS), TH OUGH HE DID NOT ACCEPT THE CLAIM OF THE ASSESSEE THAT RE-ASSESSMENT WAS NOT VALIDLY INITIATED, HELD IN FAVOUR OF ASSESSEE INSOFAR AS AD DITION UNDER SECTION 68 WAS CONCERNED. ACCORDING TO HIM, ASSESSEE HAD PROD UCED SUFFICIENT EVIDENCE TO PROVE THE CREDIT, AND THE ADDITION WAS NOT WARRANTED. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT THOUGH SHRI R.R. GOVIN DARAJU HAD ACCEPTED GIVING A LOAN OF ` 8,41,56,200/- TO THE ASSESSEE, THE LOAN CREDITORS LIST GIVEN BY THE SAID PERSON TO HIS ASS ESSING OFFICER DID NOT SHOW SUCH CREDIT. WHETHER SHRI R.R. GOVINDARAJU WA S HAVING SUFFICIENT SOURCE FOR GIVING SUCH A LOAN COULD BE ASCERTAINED ONLY IF THE ASSESSMENT ORDER OF THE SAID PERSON WAS RECEIVED. ASSESSING OFFICER HAD TAKEN EVERY EFFORT TO GET SUCH ASSESSMENT ORDER , BUT, IT WAS STILL NOT RECEIVED BY HIM. DUE TO CONSTRAINTS OF TIME, ASSES SING OFFICER HAD TO COMPLETE THE ASSESSMENT BEFORE GETTING SUCH REPLY. 5. PER CONTRA, LEARNED A.R. STRONGLY SUPPORTED THE ORDER OF CIT(APPEALS). 5 I.T.A. NO. 1553/MDS/11 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT THE ASSESSEE HAD PRODUCED CONFIRMATION IN THE FORM OF AFFIDAVIT FROM SHRI R.R. GOVINDARAJU FOR TH E ALLEGED CREDIT. THERE IS ALSO NO DISPUTE THAT DURING THE RE-ASSESSMENT PR OCEEDINGS, SHRI R.R. GOVINDARAJU WAS SUMMONED AND A STATEMENT ON OATH WA S TAKEN FROM HIM. IN SUCH STATEMENT, HE HAD CONFIRMED THE LOAN GIVEN TO THE ASSESSEE. HOWEVER, AT THE SAME TIME, IT IS TO BE N OTED THAT ASSESSING OFFICER OF SHRI R.R. GOVINDARAJU, VIDE HIS COMMUNIC ATION DATED 29.7.2009, HAD INFORMED THAT ASSESSEES NAME DID NO T APPEAR IN THE CREDITORS LIST FURNISHED BY SHRI R.R. GOVINDARAJU. ASSESSING OFFICER OF THE ASSESSEE THEREUPON PASSED ON THE SWORN STATEMEN T GIVEN BY SHRI R.R. GOVINDARAJU TO THE ASSESSING OFFICER OF SHRI R .R. GOVINDARAJU. NEVERTHELESS, IT APPEARS A COORDINATED EFFORT WAS M ISSING FROM BOTH THE ASSESSING OFFICERS TO VERIFY CORRECTNESS OF THE CLA IM OF THE ASSESSEE. ASSESSING OFFICER OF SHRI R.R. GOVINDARAJU DID NOT SUPPLY COPY OF THE SCRUTINY ASSESSMENT ORDER MADE ON SHRI R.R. GOVINDA RAJU. SUM OF LOAN AMOUNT WAS SUBSTANTIAL COMING TO ` 8,41,56,200/-. THEREFORE, THE RIGOURS OF PROOF REQUIRED TO PROVE THE SOURCE ALSO IN OUR OPINION STOOD ON A HIGHER PEDESTAL. IN OUR VIEW, THE MATTER REQUIRE S A FRESH LOOK ON THE PART OF ASSESSING OFFICER. THE ASSESSING OFFICER H AS TO GET THE ASSESSMENT RECORDS OF SHRI R.R. GOVINDARAJU AND THE REAFTER CONFIRM 6 I.T.A. NO. 1553/MDS/11 WHETHER THE LOAN AMOUNT WAS PROPERLY REFLECTED IN T HE ASSESSMENT ORDER OF SHRI R.R. GOVINDARAJU AND WHETHER HE HAD SUFFICI ENT SOURCE TO GIVE SUCH LOAN TO THE ASSESSEE. IF THESE ARE SUBSTANTIA TED, THE LOAN CAN BE ACCEPTED AS GENUINE. WITH THESE DIRECTIONS, THE MA TTER IS SENT BACK TO A.O. FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LA W. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 30 TH OF AUGUST, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH AUGUST, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-VI, CHENNAI (4) CIT-V, CHENNAI (5) D.R. (6) GUARD FILE