K.S.Sampathkumar, Erode V. ITO, Erode

ITA 1651/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0913 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-01-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: S SRIDHAR ERODE
• Keywords: Gift; Corroborative evidences
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO. 1651/MDS/2012 ASSESSMENT YEAR : 2009-10 SHRI K.S.SAMPATHKUMAR C/O SHRI S. SRIDHAR, ADVOCATE 112/1, PERIYAR STREET ERODE VS THE INCOME TAX OFFICER WARD II(4) ERODE [PAN APEPS 3013M] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE,ERODE RESPONDENT BY : DR. S. MOHARANA, CIT/DR DATE OF HEARING : 29-01-2013 DATE OF PRONOUNCEMENT : 31-01-2013 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(A)-I, COIMBATORE, DATED 19.7.2012. 2. GROUND NO.1, 2 & 3 ARE GENERAL NATURE HENCE, REQUIR ES NO SPECIFIC ADJUDICATION BY US. I.T.A.NO. 1651/12 :- 2 -: 3. GROUND NO.4 OF THE APPEAL IS DIRECTED AGAINST THE A DDITION OF ` 52,02,069/- MADE ON ACCOUNT OF TRADE CREDITORS, AD VANCES AND UNSECURED LOAN. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE A.R OF THE ASSESSEE, DURING THE COURSE OF HEARING ON 27.12.2011, HAS FILED THE FOLLOWING DETAILS: I ADVANCES (LIABILITY) ` 71,05,825 LESS: ADDRESSES GIVEN BY THE A.R ` 48,71,332 BALANCE( WRITE OFF FOR THE FY 2009-10) ` 22,34,493 II SUNDRY CREDITORS ` 1,43,75,711 LESS: ADDRESSES GIVEN BY THE A.R ` 1,12,27,759 LESS: (WRITE OFF FOR THE FY 2009-10) ` 31,47,954 BALANCE ` 3,13,911 III UNSECURED LOAN ` 17,37,620 LESS: ADDRESSES GIVEN BY THE A.R ` 16,04,087 BALANCE WRITE OFF ` 1,33,533 IV SECURED LOANS ` 1,00,73,034 5. THE ASSESSEE WAS ASKED TO PRODUCE LEDGER COPIES, B OOKS OF ACCOUNT, BANK STATEMENT, INCOME TAX ASSESSMENT DETA ILS FOR ASSESSMENT YEAR 2010-11 ALONGWITH THE BILLS AND VOU CHERS, PROFIT & LOSS ACCOUNT, BALANCE SHEET, ANY OTHER EVIDENCE TO SUBSTANTIATE THE I.T.A.NO. 1651/12 :- 3 -: CLAIM OF WRITE OFF OF ADVANCES, SUNDRY CREDITORS AN D UNSECURED LOANS. THE ASSESSING OFFICER FURTHER NOTED THAT THE A.R O F THE ASSESSEE REQUESTED FOR 10 DAYS TIME TO PRODUCE THE DAY BOOK, LEDGER FOR THE FINANCIAL YEAR 2009-10 AND OTHER DETAILS FOR THE AS SESSMENT YEAR 2009- 10 AS CALLED FOR. THE ASSESSING OFFICER OBSERVED T HAT OUT OF THE FIVE CONCERNS, THREE ARE SITUATED IN TAMIL NADU AND ONLY TWO CONCERNS ARE LOCATED IN KERALA. THE ASSESSEES REQUEST TO GET FURTHER MATERIALS FROM KERALA BY CITING THE INTER-STATE PROBLEM WAS N OT ACCEPTABLE SINCE ALL THE MODES OF TRANSPORT FACILITIES ARE AVAILABLE . HE, THEREFORE, MADE ADDITION OF ` 52,02,069/- ON THE GROUND THAT THE ASSESSEE HAS N OT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 -11 AND ALSO PRODUCED THE BOOKS OF ACCOUNT, BILLS/VOUCHERS AND O THER SUPPORTING EVIDENCES FOR THE CLAIM MADE, AS UNDER: I) ADVANCES(LIABILITY) (WRITE OFF FOR THE F.Y 2009- 10) ` 22,34,493 II) SUNDRY CREDITORS (WRITE UP/OFF FOR THE F.Y 2 009-10) ` 28,34,043 III) UNSECURED LOAN(WRITE OFF FOR THE F.Y 2009-10) ` 1,33,533 TOTAL ` 52,02,069 6. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBS ERVING THAT SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE T O FILE THE REQUIRED DETAILS. WITH REGARD TO THE SUBMISSION THAT THE AD DITIONS MADE IN THE YEAR UNDER APPEAL HAVE ALREADY BEEN OFFERED AS INCO ME IN THE I.T.A.NO. 1651/12 :- 4 -: ASSESSMENT YEAR 2010-11, THE CIT(A) OBSERVED THAT T HE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 WAS COMPELETED ON 29.12 .2011 AND TILL THAT POINT OF TIME THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11. HE NOTED THAT THE AP PEAL AGAINST THE ASSESSMENT ORDER DATED 29.12.2011 PASSED U/S 143(3 ) WAS FILED ON 23.1.2012 AND THE RETURN OF INCOME FOR ASSESSMENT Y EAR 2010-11 WAS FILED IN FEBRUARY, 2012. THESE FACTS CLEARLY SHOW THAT TO AVOID INTEREST WITH RESPECT TO THE ADDITIONS MADE FOR THE ASSESSME NT YEAR 2009-10 THE ASSESSEE TOOK THE PLEA THAT THE AMOUNTS WERE O FFERED TO TAX IN ASSESSMENT YEAR 2010-11, ONLY AFTER THE ADDITIONS W ERE MADE ON ACCOUNT OF CREDITORS, ADVANCES, ETC. HENCE, THE A SSESSEE HAS NO VALID GROUND TO SHOW THAT THERE IS DOUBLE TAXATION AND CO NFIRMED THE ACTION OF THE ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER MADE ADDITION OF ` 52,02,069/- ON ACCOUNT OF CREDITORS, ADVANCES AND UNSECURED LOANS WRITTEN OFF BY THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE AMOUNTS WERE WRITTEN OFF IN THE FINANCIAL YEAR 2009-10 RELEVANT TO THE ASSES SMENT YEAR 2010-11 AND HAS BEEN DULY DISCLOSED IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER REQ UIRED THE I.T.A.NO. 1651/12 :- 5 -: ASSESSEE TO PRODUCE THE RELEVANT BOOKS OF ACCOUNT, BILLS, VOUCHERS IN SUPPORT OF HIS CONTENTION AND THE ASSESSEE REQUEST ED FOR TIME OF 10 DAYS AS THE DETAILS WERE TO BE COLLECTED FROM KERAL A AND DUE TO INTER- STATE PROBLEMS IT WAS NOT POSSIBLE FOR HIM TO DO SO IMMEDIATELY. THE ASSESSING OFFICER MADE ADDITION TO THE INCOME OF TH E ASSESSEE WITHOUT GRANTING TIME AS PRAYED FOR BY THE ASSESSEE ON THE GROUND THAT ALL MODES OF TRANSPORT ARE AVAILABLE TO THE ASSESSEE. 8. THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESS ING OFFICER OBSERVING THAT THE RETURN FOR ASSESSMENT YE AR 2010-11 WAS FILED ONLY IN FEBRUARY 2012 AND THAT AT THE TIME OF FILING OF APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3) DATED 29.12.2011 ON 23.1.2012 NO RETURN FOR ASSESSMENT YE AR 2010-11 WAS FILED AND THAT THE RETURN FOR ASSESSMENT YEAR 2010- 11 WAS FILED AFTER THE ADDITION WAS MADE IN ASSESSMENT YEAR 2009-10 FO R THE AMOUNTS WRITTEN OFF IN ORDER TO AVOID INTEREST IN RESPECT O F THE ADDITION MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2009-10. 9. WE FIND THAT ` 52,02,069/- COMPRISES OF ` 28,34,043/- ON ACCOUNT OF SUNDRY CREDITORS, ` 22,34,493/- ON ACCOUNT OF ADVANCES AND ` 1,33,533/- ON ACCOUNT OF UNSECURED LOANS. FURTHER THE ASSESSEE SUBMITTED THAT OUT OF SUNDRY CREDITORS OF ` 28,34,043/- ONLY ` 4680/- I.T.A.NO. 1651/12 :- 6 -: RELATES TO THE TRANSACTION OF THE YEAR UNDER CONSID ERATION AND REMAINING AMOUNTS ARE OPENING BALANCES OF EARLIER Y EARS. SIMILARLY, IN RESPECT OF ADVANCES, OUT OF ` 22,34,493/-, ` 1,78,000/- RELATES TO THE ADVANCES RECEIVED DURING THE YEAR UNDER APPEAL AND REMAINING AMOUNTS ARE OPENING BALANCES RELATING TO THE EARLIE R YEARS. SIMILARLY, IN RESPECT OF UNSECURED LOANS OR ` 1,33,533/- THE ASSESSEE CONTENDED THAT THE ENTIRE AMOUNT IS OPENING BALANCE AND NO PA RT OF THE SAME RELATES TO ANY TRANSACTION OF THE YEAR UNDER APPEAL . THE ASSESSEE CONTENDED THAT NO MATERIAL HAS BEEN BROUGHT ON REC ORD BY THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION WAS WRI TTEN OFF BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. FURT HER, IN RESPECT OF THE AMOUNTS OF ` 4680/- AND ` 1,78,000/-, RELATING TO THE YEAR UNDER CONSIDERATION, NO MATERIAL HAS BEEN BROUGHT ON RECO RD BY THE REVENUE TO SHOW THAT THE SAME WAS NOT GENUINE. 10. ON THE OTHER HAND, THE CIT/DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 11. WE ARE OF THE CONSIDERED OPINION, THAT ADDITION U/ S 41 CAN BE MADE IN THE YEAR IN WHICH ACTUAL BENEFIT IS RECE IVED BY THE ASSESSEE OR IN THE YEAR IN WHICH THE ASSESSEE WRIT ES OFF THE LIABILITY IN ITS ACCOUNTS. IN THE INSTANT CASE, NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE ASSESSEE HA S ACTUALLY WRITTEN I.T.A.NO. 1651/12 :- 7 -: OFF ` 52,02,069/- DURING THE YEAR UNDER APPEAL OR THE A SSESSEE ACTUALLY RECEIVED ANY BENEFIT IN RESPECT OF THE AMO UNT IN QUESTION. 12. FURTHER, AS PER THE PROVISIONS OF SECTION 68 OF TH E ACT , ADDITION OF AN AMOUNT CAN BE MADE ONLY IN THE YEAR IN WHICH SUCH AMOUNT APPEARS AS CREDIT FOR THE FIRST TIME IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, IT SHALL BE FAIR AND IN THE INTEREST OF JUSTICE, TO RE STORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFI CATION AND THEREAFTER READJUDICATE THE ISSUE IN THE LIGHT OF THE DISCUSSI ON MADE HEREIN ABOVE AS PER LAW. WE ORDER ACCORDINGLY. NEEDLESS TO MEN TION THAT THE ASSESSING OFFICER SHALL ALLOW REASONABLE OPPORTUNIT Y OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE AFRESH. THU S, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. GROUND NO.5 & 6 ARE DIRECTED AGAINST THE ORDER OF T HE CIT(A) IN CONFIRMING THE ADDITION OF ` 2,90,000/- ON ACCOUNT OF AGRICULTURAL INCOME AND ` 13,20,000/- ON ACCOUNT OF GIFT FROM WIFE. 14. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD SH OWN AGRICULTURAL INCOME OF ` 2,90,000/- IN THE RETURN OF INCOME FILED. THE ASSESSING OFFICER CALLED FOR PROOF OF AGRICULTURAL INCOME. THE ASSESSEE HAS ALSO SHOWN GIFT FROM WIFE OF ` 13,20,000/- AND THE ASSESSING I.T.A.NO. 1651/12 :- 8 -: OFFICER CALLED FOR PROOF OF GIFT RECEIVED FROM HIS WIFE. THE ASSESSEE ASKED FOR TIME OF 10 DAYS TO SUBMIT THE SAME DUE TO INTER-STATE DISTURBANCE BETWEEN TAMIL NADU AND KERALA. MEANWHI LE, THE ASSESSING OFFICER DEPUTED AN INSPECTOR TO SUBMIT TH E REPORT TO THE ASSESSING OFFICER. THE ASSESSING OFFICER MADE ADDI TION TOWARDS AGRICULTURAL INCOME OF ` 2,90,000/- AND GIFT OF ` 13,20,000/- RECEIVED FROM HIS WIFE TO THE INCOME OF THE ASSESSEE BASED ON THE REPORT OF THE INSPECTOR. 15. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE A SSESSING OFFICER. 16. BOTH THE PARTIES BEFORE US SUBMITTED THAT THE INSP ECTORS REPORT WAS NOT GIVEN TO THE ASSESSEE TO MAKE HIS S UBMISSIONS THEREON AND THEREFORE, THE MATTER MAY BE RESTORED BACK TO T HE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION OF THE ISS UE. IN OUR CONSIDERED OPINION, BEFORE ANY MATERIAL IS USED AGAINST THE ASSESSEE FOR MAKING ADDITION TO HIS INCOME THE SAME SHOULD BE CONFRONTE D TO THE ASSESSEE AND ALLOW AN OPPORTUNITY TO MAKE HIS SUBMISSION ON THE SAME. HENCE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AN D RESTORE THE ISSUE OF AGRICULTURAL INCOME AND GIFT FROM WIFE TO THE FI LE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AFTER GIVING COPY O F THE INSPECTORS REPORT TO THE ASSESSEE AND AFTER ALLOWING REASONAB LE OPPORTUNITY OF I.T.A.NO. 1651/12 :- 9 -: HEARING TO THE ASSESSEE. THUS, THE GROUNDS OF APP EAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 17. GROUND NO.7 OF THE APPEAL IS DIRECTED AGAINST DISAL LOWANCE OF ` 28,890/- RELATING TO VEHICLE EXPENSES. 18. BEFORE US, THE A.R SUBMITTED THAT HE IS NOT PRESSIN G THIS GROUND OF APPEAL AND MADE AN ENDORSEMENT TO THIS EF FECT IN THE GROUNDS OF APPEAL APPENDED TO THE APPEAL MEMO. HEN CE, THIS GROUND OF APPEAL IS DISMISSED AS NOT PRESSED. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 31 ST OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 31 ST JANUARY, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR