R.Krishnamoorthy, Coimbatore V. JCIT, Tiruppur

ITA 1599/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8107 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 13-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANKARALINGAM IRSCIT
• Assessee Lawyers: T BANUSEKAR
• Keywords: Unexplained cash credit; Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , !' . #$#% , & '' ( [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./ I.T.A. NO.1599/MDS/2015 / ASSESSMENT YEAR : 2011-2012 R.KRISHNAMOORTHY, 69, KARUMARAMPALAYAM, UTHUKULI MAIN ROAD, MANNARAI. P.O. TIRUPUR 641 607. VS. THE JOINT COMMISSIONER OF INCOME TAX, TIRUPUR RANGE, TIRUPUR. ./ I.T.A. NO. 2005/MDS/2015 / ASSESSMENT YEAR : 2011-2012 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -1, TIRUPUR. VS. R.KRISHNAMOORTHY, 69, KARUMARAMPALAYAM, UTHUKULI MAIN ROAD, MANNARAI. P.O. TIRUPUR 641 607. [PAN AGEPR 2757B] ( )* / APPELLANT) ( +,)* /RESPONDENT) ASSESSEE BY : SHRI. T. BANUSEKAR, C.A. DEPARTMENT BY : SHRI. SANKARALINGAM, IRS,CIT. / DATE OF HEARING : 13.10.2016 / DATE OF PRONOUNCEMENT : 09.11.2016 ITA NO.1599 &2005/2015. :- 2 -: / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AN D REVENUE RESPECTIVELY DIRECTED AGAINST AN ORDER DATE D 31.03.2015 OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, CHENNAI. 2. FACTS APROPOS ARE THAT ASSESSEE ENGAGED IN THE BUSI NESS OF REAL ESTATE, IRON AND SCRAP, HAD FILED RETURN OF IN COME FOR THE IMPUGNED ASSESSMENT YEAR DISCLOSING INCOME OF ?7,04 ,16,930/-. ASSESSEE HAD FILED ITS RETURN OF INCOME ALONGWITH AUDITED PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND AUDIT REPORTS IN FO RM NO.3CB, 3CD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSING OFFICER THAT ASSESSEE HAD SHOWN UNSECURED LOAN OF ?3,00,00,000/- AS DUE TO ONE SHRI. S. MARTIN. THE RE ALSO APPEARED IN THE ACCOUNTS OF THE ASSESSEE, SUM OF ?9,21,58,106/ - AS ADVANCE RECEIVED FROM ONE MARTIN S.CBE. THE AGGREGATE OF T HESE TWO AMOUNTS CAME TO ?12,21,58,106/-. ASSESSING OFFICER OBTAINE D A COPY OF THE ASSESSEES ACCOUNT IN THE BOOKS OF SHRI. S. MARTIN BY ISSUING SUMMONS U/S.133(6) OF THE ACT. CONFIRMATION WAS RECEIVED ONLY FOR ?7,85,00,000/-. LD. ASSESSING OFFICER REQUIRED TH E ASSESSEE TO EXPLAIN THE DIFFERENCE OF ?4,36,58,106/-. IN REPLY, ASSESSE E STATED THAT A SUM OF ?1,36,58,106/- WAS TRANSFERRED FROM THE ACCOUNT ONE M/S. KOTHARI ITA NO.1599 &2005/2015. :- 3 -: INDUSTRIAL CORPORATION, IN THE BOOKS OF THE ASSESS EE, TO THE ACCOUNT OF SHRI. S. MARTIN, THROUGH A JOURNAL ENTRY DATED 04. 05.2010. AS PER ASSESSEE, THE SAID ENTRY WAS NOT REFLECTED IN THE B OOKS OF SHRI. S. MARTIN. FURTHER AS PER ASSESSEE A SUM OF ?3,00,00, 000/- WAS RECEIVED SHRI. S. MARTIN ON 19.06.2006 BUT THIS WA S NOT APPEARING IN THE BOOKS OF SHRI. S. MARTIN. HOWEVER, THE ASSESSIN G OFFICER WAS NOT SATISFIED WITH THE ABOVE REPLY. ACCORDING TO HIM, ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE DIFFERENCE OF ?4,36,58,106 /-. AN ADDITION WAS MADE ACCORDINGLY. 3. ASSESSING OFFICER ALSO FOUND THAT THERE WERE CASH PAYMENTS EXCEEDING ?20,000/- IN A SINGLE DAY, AGGREGATING T O ?3,39,578/- DURING THE RELEVANT PREVIOUS YEAR. EXPLANATION OF T HE ASSESSEE WAS THAT SUCH PAYMENTS WERE MADE TO DEALERS SUPPLYING D IESEL. AS PER ASSESSEE SUCH PAYMENTS HAD TO BE DONE IN CASH SINC E THE TRANSACTIONS WERE AFTER BANKING HOURS. HOWEVER, ASSESSING OFFI CER DID NOT ACCEPT THIS REPLY. HE APPLIED SEC.40A(3) OF THE ACT AND D ISALLOWED A SUM OF ?3,39,578/-. 4. ASSESSING OFFICER ALSO NOTED FROM THE BOOKS OF THE ASSESSEE, THAT THERE WERE CERTAIN CASH CREDITS, AS GIVEN HERE UNDER:- DATE AMOUNT 04.4.2010 27,33,000 12.01.2011 37,84,000 ITA NO.1599 &2005/2015. :- 4 -: 13.01.2011 7,21,000 31.03.2011 29,05,000 TOTAL 1,01,43,000 EXPLANATION OF THE ASSESSEE WAS SOUGHT FOR THE SOUR CE OF THE ABOVE CREDITS. ASSESSEE STATED THAT SUM OF ?27,33,000/- W AS SALE PROCEEDS OF ONE HITACHI EXCAVATOR RECEIVED ON 04.04.2010. FOR ?29,05,000/- REMITTED ON 31.03.2011, EXPLANATION OF THE ASSESS EE WAS THAT IT WAS NOT A CASH RECEIPT BUT A CASH PAYMENT. AS PER THE ASSESSEE SUCH PAYMENTS REFLECTED REFUND OF EARLIER ADVANCES RECEI VED FROM VARIOUS PARTIES, FOR PURCHASE OF LAND. FOR THE SUM OF ?37,8 4,000/- DATED 12.01.2011 AND ?7,21,000/- DATED 13.01.2011 EXPLANA TION OF THE ASSESSEE WAS THAT AGGREGATE OF THESE TWO AMOUNTS AFTER DEDUCTING ?29,05,000/- REFUNDED ON 31.03.2011, WAS OFFERED BY IT AS INCOME. 5. ASSESSING OFFICER AFTER GOING THROUGH THE REPLY OF THE ASSESSEE ACCEPTED ITS EXPLANATION, IN SO FAR AS CRE DIT OF ?27,33,000/- DATED 4.04.2010 WAS CONCERNED. HE ALSO ACCEPTED TH E EXPLANATION OF THE ASSESSEE THAT ENTRY OF ?29,05,000/- DATED 31.03 .2011 WAS NOT A RECEIPT BUT A PAYMENT. HOWEVER, FOR ?37,84,000/-, CREDITED ON 12.01.2011 AND ?7,21,000/- CREDITED ON 13.01.2011, ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE COULD NOT GIVE ANY REASONABLE EXPLANATION FOR THE SOURCE. AN ADDITION OF ?45,05,0 00/- WAS MADE. ITA NO.1599 &2005/2015. :- 5 -: 6. ASSESSING OFFICER ALSO FOUND FROM THE BOOKS OF ACCO UNT OF THE ASSESSEE THAT FOLLOWING ADVANCES WERE SHOWN AS RECEIVED FROM ITS CUSTOMERS. 1. M/S. SRI CHAKRA BUILDERS : ?25,00,000/- 2. SHRI. K.K. MANI : ?25,00,000/- 3. M/S. LANSON VENTURES : ?10,00,000/- 4. MURUGAN ENTERPRISES : ?37,00,000/- ---------------- TOTAL : ?97,00,000/- ---------------- ASSESSING OFFICER SENT LETTERS TO THESE PERSONS W HICH IT SEEMS WERE RETURNED UNSERVED WITH THE REMARKS NO SUCH ADDR ESSEE. WHEN EXPLANATION OF THE ASSESSEE WAS SOUGHT, IT WAS STAT ED THAT THESE AMOUNTS WERE STILL DUE AND WERE ARISING FROM TRANSA CTIONS OF EARLIER YEARS. ASSESSING OFFICER DID NOT ACCEPT THESE CONTE NTIONS. HE MADE AN ADDITION OF ?97,00,000/-. 7. AGGRIEVED BY THE ABOVE, ASSESSEE MOVED IN APPEAL BE FORE LD. COMMISSIONER OF INCOME TAX (APPEALS). VIZ-A-VIZ ADD ITION OF ?4,36,58,106/-, SUBMISSION OF THE ASSESSEE BEFORE L D. COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT ?3,00,00,000/- WAS R ECEIVED BY ASSESSEE FROM A PROPRIETORY CONCERN CALLED M/S. BE ST & CO. OWNED BY SHRI. S.MARTIN. AS PER ASSESSEE THIS WAS PAID BY T HEM FOR MEETING THE COST OF A PROPERTY OWNED BY M/S. MADURA COATS. AS SESSEE ALSO STATED THAT THE TRANSACTION WAS REFLECTED IN THE BOOKS OF M/S. BEST & CO. ITA NO.1599 &2005/2015. :- 6 -: THROUGH A ENTRY DATED 19.06.2006. AS PER ASSESSEE, ON 15.07.2008, A DEMAND DRAFT FOR ?3,00,00,000/- WAS PROVIDED BY ONE SHRI. P.K. GANESHWAR, BASED ON AN MOU ENTERED WITH ASSESSEE. SUBMISSION OF THE ASSESSEE WAS THAT HE HAD LODGED THE ORIGINAL D OCUMENTS OF THE SAID PROPERTY WITH SHRI. S. MARTIN, WHEN THE SUM OF ?3,00,00,000/- WAS RECEIVED ON 19.06.2006. SHRI. P.K. GANESHWAR AS PE R ASSESSEE HAD MADE DIRECT PAYMENT OF ?3,00,00,000/- THROUGH A DEM AND DRAFT, TO M/S. BEST AND CO. FOR RELEASING THE ABOVE DOCUMEN T. AS PER THE ASSESSEE, IT HAD STRAINED ITS RELATIONSHIP WITH S HRI. P.K. GANESHWAR AND THEREFORE THE ENTRY THAT SHOULD HAVE BEEN PASSE D IN THE BOOKS OF ACCOUNTS, WHEN THE PAYMENT OF ?3,00,00,000/- WAS MADE BY SHRI. P.K. GANESHWAR TO M/S. BEST AND CO. WAS NOT DONE. HOWEVER, AS PER THE ASSESSEE, IN THE BOOKS OF M/S. BEST AND CO., A SSESSEES ACCOUNT WAS CREDITED WITH SAID AMOUNT ON 15.07.2008. ASSES SEE ALSO POINTED OUT THAT SHRI. P.K. GANESHWAR HAD FILED A CRIMINAL COMPLAINT AGAINST THE ASSESSEE FOR GETTING BACK THE SUM OF ?3,00,00, 000/- PAID BY HIM TO SHRI. S. MARTIN ON 15.07.2008. IN SO FAR AS BALA NCE OF ?1,36,58,106/- WAS CONCERNED, CONTENTION OF THE ASS ESSEE WAS THAT THERE WAS A JOURNAL ENTRY PASSED ON 04.05.2010, T HROUGH WHICH ACCOUNT OF M/S. KOTHARI INDUSTRIAL CORPORATION WAS DEBITED AND ACCOUNT OF SHRI. S. MARTIN WAS CREDITED. AS PER ASSESSEE, THIS JOURNAL ENTRY THROUGH WHICH M/S. KOTHARI INDUSTRIAL CORPORA TION WAS DEBITED ITA NO.1599 &2005/2015. :- 7 -: AND SHRI. S. MARTIN WAS CREDITED BY A SUM OF ?1,36 ,58,106/- DID NOT APPEAR IN THE BOOKS OF S. MARTIN. ARGUMENT OF THE A SSESSEE WAS THAT THE DIFFERENCE OF ?4,36,58,106/- THUS STOOD FULLY E XPLAINED. 8. AS FOR THE ADDITION OF ?3,39,578/- SUBMISSION OF T HE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT CIRCUMSTANCES UNDER WHICH THE PAYMENTS WERE E FFECTED IN CASH WAS EXPLAINED IN THE CONFIRMATION LETTERS RECEIVED FROM THE RECIPIENTS. AS PER THE ASSESSEE, THE PAYMENTS IN CASH WERE FOR PURCHASE OF DIESEL FROM PUMPS AND SECTION 40A (3) COULD NOT BE APPLIE D. 9. COMING TO THE DISALLOWANCES OF ?45,05,000/- CONSIDE RED AS UNEXPLAINED CASH CREDITS, SUBMISSION OF THE ASSESS EE BEFORE LD.CIT(A) WAS THAT OUT OF THE SAID SUMS, A SUM OF ?16,00,000/ - WAS OFFERED BY ITSELF IN HIS PROFIT AND LOSS ACCOUNT AS INCOME. A S PER THE ASSESSEE BALANCE AMOUNTS WERE REFUNDED TO THE CONCERNED PA RTIES. 10. WITH REFERENCE TO THE DISALLOWANCE OF ?97,00,000/- DISBELIEVING THE CLAIM OF ADVANCE RECEIVED FROM C USTOMERS, ARGUMENT OF THE ASSESSEE BEFORE LD. COMMISSIONER OF INCOME T AX (APPEALS) WAS THAT THESE AMOUNTS WERE BROUGHT FORWARD FROM EARLI ER YEARS AND WERE NOT OF THE RELEVANT PREVIOUS YEAR. ITA NO.1599 &2005/2015. :- 8 -: 11. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING SUBMISSIONS OF THE ASSESSEE HELD AS UND ER:- (I) ?3,00,00,000/- OUT OF ?4,36,58,106/- ADDED BY THE ASSESSING OFFICER FOR DIFFERENCE IN ACCOUNTS OF SH RI. S. MARTIN, STOOD EXPLAINED BY THE ASSESSEE THROUGH PAYMENT OF DEMAND DRAFT FOR ? 3,00,00,000/- BY SHRI. P.K. GANESHWAR TO SHRI. S. MARTIN. (II) SUM OF ?1,36,58,106/- OUT OF ADDITION ?4,36,58,106/- STATED BY THE ASSESSEE AS THROUGH JOURNAL ENTRY, COULD NOT BE ACCEPTED SINCE M/S. KOTHARI INDUSTRIAL CORPORATION HAD NOT RECORDED THE TRANSACTION IN THEIR BOOKS. (III) DISALLOWANCE OF ?3,39,578/- U/S.40A(3) OF THE ACT WAS RIGHTLY MADE BY THE ASSESSING OFFICER SINCE ASSESSEE HAD PAID FOR DIESEL THROUGH CHEQUES ON MANY DAYS AND HAD MADE CASH PAYMENTS WITHOUT ANY REASONABLE CAUSE. (IV) OUT OF ? 45,05,000/- ADDED AS UNEXPLAINED CASH CREDIT ?16,00,000/- WAS SHOWN BY THE ASSESSEE ITSELF IN PROFIT AND LOSS ACCOUNT AND ONLY THE BALANCE OF ?29,05,000/- STOOD UNEXPLAINED. (V) ADDITION OF ?97,00,000/- DISBELIEVING THE CLAIM OF ADVANCE RECEIVED FROM FOUR CUSTOMERS WAS RIGHTLY DONE BY THE ASSESSING OFFICER. 12. EFFECTIVELY, LD. COMMISSIONER OF INCOME TAX (APPEAL S) DELETED THE ADDITION OF ?3,00,00,000/- OUT OF ?4,3 6,58,106/- CONSIDERED BY THE ASSESSING OFFICER AS DIFFERENCE I N ACCOUNTS OF SHRI. S. MARTIN, WHILE CONFIRMING THE ADDITION OF ?1,36, 58,106/-. ITA NO.1599 &2005/2015. :- 9 -: DISALLOWANCE OF ?3,39,578/- MADE BY THE LD. ASSESSI NG OFFICER U/S.40A OF THE ACT WAS CONFIRMED. RELIEF OF ?16,00,000/- W AS GIVEN OUT OF THE ADDITION OF ?45,05,000/- FOR CASH CREDIT. ADDITION DISBELIEVING THE CLAIM OF ADVANCE OF ?97,00,000/- RECEIVED FROM FO UR CUSTOMERS WAS CONFIRMED. 13. NOW, BEFORE US, THE LD. AUTHORISED REPRESENTATIVE, STRONGLY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS), CONFIRMING THE ADDITION OF ?1,36,58,106/- SUBMITTED THAT FINDINGS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THI S REGARD WAS WRONG. ACCORDING TO HIM, THE SAID AMOUNT WAS DEBIT ED IN THE ACCOUNTS OF M/S. KOTHARI INDUSTRIAL CORPORATION IN THE BOOKS OF THE ASSESSEE ON 04.05.2010 AND CORRESPONDING CREDIT GIV EN IN THE ACCOUNTS OF SHRI. S. MARTIN. AS PER LD. AUTHORISED REPRESENTATIVE, IF THIS ENTRY WAS NOT CONSIDERED, THEN THE CLOSING CRE DIT BALANCE OF SHRI. S. MARTIN IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE WOULD BE REDUCED BY AN EQUIVALENT SUM. ACCORDING TO HIM, THE ADDITI ON COULD NOT HAVE MADE BASED ON A JOURNAL ENTRY, SINCE THERE WAS NO A CTUAL CASH RECEIPT FROM SHRI. S. MARTIN. JUSTIFYING THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN SO FAR AS HE DELETED THE AD DITION OF ?3,00,00,000/- OUT OF ?4,36,58,106/-, LD. AUTHORISE D REPRESENTATIVE SUBMITTED THAT ASSESSEE HAD FURNISHED COPY OF THE DEMAND DRAFT ITA NO.1599 &2005/2015. :- 10 -: GIVEN BY SHRI.P.K. GANESHWAR TO M/S. BEST & CO. A S PER LD. AUTHORISED REPRESENTATIVE ASSESSEES ACCOUNT IN THE BOOKS OF M/S. BEST & CO. CLEARLY REFLECTED THE CREDIT OF ?3,00,00 ,000/- DATED 15.07.2008, WITH A NARRATION THAT DEMAND DRAFT WAS RECEIVED FROM SHRI. R. KRISHNAMOORTHY. 14. COMING TO THE ADDITION OF ? 3,39,578/- MADE BY LD. ASSESSING OFFICER WHICH WAS CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THESE CASH PAYMENTS WERE MADE IN A PETROL PUMP WHICH WAS NOT A CCEPTING CHEQUES. 15. AS FOR THE ADDITION OF ? 29,05,000/- SUSTAINED OUT OF A CASH CREDIT ADDITION OF ?45,05,000/-, LD. AUTHORISED REP RESENTATIVE SUBMITTED THAT THIS WAS REPAYMENT OF MONEY FOR EA RLIER RECEIVED BY THE ASSESSEE AND NOT A CASH CREDIT. 16. COMING TO THE LAST ADDITION OF ?97,00,000/- ON ADV ANCE RECEIVED FROM CUSTOMERS FOR WANT OF CONFIRMATION, L D. AUTHORISED REPRESENTATIVE SUBMITTED THAT THIS PERTAINED TO EA RLIER YEARS AND OUGHT NOT HAVE BEEN CONSIDERED FOR THE IMPUGNED ASS ESSMENT YEAR. 17. PER CONTRA, AND IN SUPPORT OF ITS OWN APPEAL, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT LD. COMM ISSIONER OF ITA NO.1599 &2005/2015. :- 11 -: INCOME TAX (APPEALS) HAD GIVEN A RELIEF OF ? 3,00,0 0,000/- OUT OF TOTAL ADDITION OF ? 4,36,58,106/- BASED ON EVIDENCE WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE ASSESSING OFFICER. IN SO FA R AS ADDITIONS SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS), LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 18. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES BELOW. COMING TO TH E FIRST ADDITION OF ?4,36,58,106/- MADE BY THE LD. ASSESSING OFFICER, FOR DIFFERENCE IN THE ACCOUNT OF SHRI. S. MARTIN, LD. CIT(A) HAD DELE TED ?3,00,00,000/-, CONSIDERING A PAYMENT OF ?3,00,00,000/- MADE BY SHR I. P.K. GANESHWAR TO M/S. BEST & CO., THROUGH A DEMAND DRA FT ON 14.07.2008, AS GENUINE. CONTENTION OF THE ASSESSE E WAS THAT SHRI. P.K. GANESHWAR HAD PAID THE SUM DIRECTLY TO M/S. BEST AND CO., A PROPRIETORY CONCERN OF SHRI. S. MARTIN, FOR RELEAS E OF DOCUMENTS IN RELATION TO A PROPERTY CALLED MADURA COATS PROPERTY . AS PER THE ASSESSEE SAID SUM WAS EARLIER RECEIVED FROM SHRI. S . MARTIN ON 19 TH JUNE, 2006. IT MAY BE TRUE THAT SHRI. P.K. GANESHWA R HAD PAID A SUM OF ?3,00,00,000/- THROUGH DEMAND DRAFT TO M/S. BEST & CO. ON 14.07.2008. HOWEVER, THE REASONS WHY SHRI. P.K. GA NESHWAR MADE SUCH A PAYMENT ON BEHALF OF ASSESSEE TO M/S. BEST & CO HAS NOT BEEN ITA NO.1599 &2005/2015. :- 12 -: VERIFIED BY ANY OF THE LOWER AUTHORITIES. IF SHRI . P.K. GANESHWAR HAD INDEED PAID THE SUM ON BEHALF OF THE ASSESSEE TO M/ S. BEST & CO., ASSESSEE SHOULD HAVE SHOWN THE ENTRY IN THE BOOKS O F ACCOUNTS BY CREDITING THE ACCOUNT OF SHRI. S. MARTIN AND DEBITI NG THE ACCOUNTS OF M/S. BEST & CO., THIS ASPECT ALSO HAS NOT BEEN VER IFIED. THUS, IN SO FAR AS DELETION OF ADDITION OF ? 3,00,00,000/- IS C ONCERNED, WE ARE OF THE OPINION THAT THE MATTER REQUIRES FRESH LOOK BY THE LD. ASSESSING OFFICER. WE, THEREFORE SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD AND REMIT THE ISSUE REGARDING ADDITION OF ?3,00,00,000/- OUT OF T ?4,36,58,106/- FOR DIFFERENCE IN THE ACCOUNT OF SHRI. S. MARTIN, BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR CONSIDERATION AFRESH, IN ACCORDANCE WIT H LAW. 19. IN SO FAR AS ?1,36,58,106/- IS CONCERNED, LD. COMMI SSIONER OF INCOME TAX (APPEALS) HAD GIVEN CLEAR FINDING THAT M /S. KOTHARI INDUSTRIAL CORPORATION HAD NOT GIVEN CONFIRMATION FOR ANY SUCH JOURNAL ENTRY PASSED BY THE ASSESSEE. WE CANNOT AC CEPT THE CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE THA T JOURNAL ENTRIES HAD TO BE IGNORED WHILE CALCULATING DIFFERENCE IN C REDIT BALANCE. WE ARE THEREFORE OF THE OPINION THAT THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN CONFIRMING ADDITION OF ? 1,36,58,106/- OUT OF ITA NO.1599 &2005/2015. :- 13 -: THE TOTAL SUM OF ?4,36,58,106/-. ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS CONFIRMED TO THIS EXTENT. 20. COMING TO THE ADDITION OF ?3,39,578/- U/S.40A(3) O F THE ACT, IT WAS NOT DENIED BY LD. AUTHORISED REPRESENTATIVE THAT THE PAYMENTS WERE EFFECTED BY CASH AND EACH OF THE PAYMENT EXCEE DED ?20,000/-. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD GI VEN A CLEAR FINDING THAT ASSESSEE HAD EFFECTED PAYMENTS THROUGH CHEQUES TO THE VERY SAME VENDOR AND THERE WAS NO COMPELLING REASON TO EFFECT PAYMENTS IN CASH. WE DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) IN THIS REGARD. THE ADDITION IS THEREFORE CONFIRMED. 21. COMING TO THE ADDITION OF ?29,05,000/- SUSTAINED B Y THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OUT OF TOTAL A DDITION OF ? 45,05,000/-, TOTAL CASH CREDITS CONSIDERED BY THE L D. ASSESSING OFFICER AGGREGATED TO ?1,01,43,000/-. ASSESSING OFFICER HA D ACCEPTED THE CREDIT OF ?27,33,000/- ON 04.04.2010. HE ALSO ACCE PTED THE CONTENTION OF THE ASSESSEE THAT THE ENTRY OF ?29,05,000/- ON 3 1.03.2011 WAS NOT A PAYMENT BUT A CASH RECEIPT. FOR THE OTHERS TWO CA SH CREDITS, VIZ ?37,84,000/- ON 12.01.2011 AND ?7,21,000/- ON 13.01 .2011, ASSESSING OFFICER HAD GIVEN A CLEAR FINDING THAT AS SESSEE HAD NOT ITA NO.1599 &2005/2015. :- 14 -: PRODUCED ANY EVIDENCE IN SUPPORT. LD. COMMISSIONE R OF INCOME TAX (APPEALS) HAD GIVEN RELIEF OF ?16,00,000/-, FOR A R EASON THAT ASSESSEE HAD CREDITED A SUM OF ?16,00,000/- IN ITS PROFIT AN D LOSS ACCOUNT AS INCOME. HOWEVER, THE FACT REMAINS THAT ASSESSEE WAS NOT ABLE TO SHOW THE SOURCE OF THESE TWO CREDITS. LD. COMMISSIONER O F INCOME TAX (APPEALS) HAD GIVEN RELIEF OF ?16,00,000/- FINDING THAT CREDIT OF ? 16,00,000/- WAS OFFERED BY THE ASSESSEE IN ITS PROF IT AND LOSS ACCOUNT SUO-MOTU. HENCE, THE ADDITION TO THE EXTENT OF ? 29 ,05,000/- WAS RIGHTLY SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). SINCE ASSESSEE HAD MADE AN ENTRY IN PROFIT AND LOSS ACCOUNT PRESUMING WE DO NOT FIND ANY REASON TO INTERFERE WITH THE O RDER OF THE LD.CIT(A) IN THIS REGARD. 22. COMING TO THE ADDITION OF ?97,00,000/- FOR UNCONFI RMED ADVANCES RECEIVED FROM THE CUSTOMERS, IT IS NOT DIS PUTED THAT THE AMOUNTS WERE BROUGHT FORWARD FROM EARLIER YEARS. ASSESSEE HAS ALSO PRODUCED COPY OF LEDGER WHICH CLEARLY INDICATE THA T THESE WERE BROUGHT FORWARD BALANCE FROM EARLIER YEARS. LD. C OMMISSIONER OF INCOME TAX (APPEALS) HAD TAKEN A STAND AN ADDITION COULD BE MADE EVEN FOR EARLIER YEARS BALANCES, IF NO CONFIRMATION S WERE FILED. WE ARE NOT ABLE TO ACCEPT THIS VIEW OF THE LD. COMM ISSIONER OF INCOME TAX (APPEALS). WHEN THE AMOUNTS WERE BROUGHT FORWAR D FROM EARLIER ITA NO.1599 &2005/2015. :- 15 -: YEARS, THE ADDITION IF AT ALL IT WAS TO BE MADE OU GHT HAVE BEEN MADE IN THOSE YEARS WHERE THE CREDIT WAS FIRST SHOWN BY THE ASSESSEE. WE THEREFORE, DELETE THE ADDITION OF ?97,00,000/-. 23. IN VIEW OF THE ABOVE DISCUSSION, GROUND NOS.1 TO 4 IN ASSESSEES APPEAL ARE DISMISSED, WHEREAS ITS GRO UND NOS. 5 & 6 ARE ALLOWED. COMING TO THE APPEAL OF THE REVENUE ITS G ROUNDS 2 & 3 TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ALL OT HER GROUNDS RAISED BY BOTH THE PARTIES ARE GENERAL IN NATURE. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED WHEREAS THAT OF THE REVENUE IS ALLOWED FOR STATIST ICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 9TH DAY OF NO VEMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( !' . #$#% ) (ABRAHAM P. GEORGE) & / ACCOUNTANT MEMBER / CHENNAI ! / DATED:9TH NOVEMBER, 2016 KV !' # $% &% / COPY TO: 1 . '( / APPELLANT 3. ) () / CIT(A) 5. %+, # - / DR 2. #.'( / RESPONDENT 4. ) / CIT 6. ,/ 0 / GF