Ganapathy Media Pvt Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1706/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96274 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 24-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Condonation of delay
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.1706/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) M/S. GANAPATHY MEDIA PVT.LTD. 3/6, M.G.R. ROAD, VIJAYA RAGHAVAPURAM, CHENNAI-600 093. VS THE DEPUTY COMMISSIONER OF INCOME TAX, MEDIA CIRCLE-I, CHENNAI. PAN: AACCG8591M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. V.S.JAYAKUMAR, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 30 TH SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 30 TH OCTOBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-14, CHENN AI DATED 24.02.2015 FOR THE ASSESSMENT YEAR 2010-11. T HE GRIEVANCE OF THE ASSESSEE IN ITS APPEAL IS THAT COM MISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DIS ALLOWANCE OF ` 26,42,500/- REPRESENTING UNSECURED LOANS AND INTE REST PAID THEREON OF ` 75,000/- UNDER SECTION 68 OF THE ACT. 2. THE APPEAL OF THE ASSESSEE IS BARRED BY LIMITA TION OF THIRTY ONE DAYS. THE ASSESSEE FILED A AN AFFIDAVIT EXPLAINING 2 ITA NO.1706/MDS/2015 THE REASON FOR THE DELAY IN FILING OF APPEAL THAT T HE ORIGINAL APPELLATE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS) WAS MIXED UP WITH OTHER FILES AND WAS IRRETRIEVABLY LOST. IT WAS TRACED ONLY ON 22.7.2015 WHEN ALL CUPBOARD WERE CL EARED AND SORTED OUT. THE APPEAL PAPERS WAS IMMEDIATELY PREPARED AND FILED. THIS RESULTED IN DELAY OF FILIN G OF APPEAL BY 31 DAYS. THEREFORE THE DELAY IS NOT DELIBERATE OR WANTON AND PRAYS FOR CONDONATION OF DELAY. WE HAVE PERUSED TH E REASONS AND ARE SATISFIED THAT THERE IS A REASONABL E CAUSE FOR THE DELAY IN FILING OF THE APPEAL. IN THE INTEREST OF JUSTICE, WE CONDONE THE DELAY IN FILING OF THE APPEAL. THE PETI TION FOR CONDONATION OF DELAY IS ALLOWED AND THE APPEAL IS A DMITTED. 3. BRIEF FACTS ARE THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT NOTICED THAT THE ASSESSEE HAS SHOWN UNSECURED LOAN AMOUNT OF ` 10,27,000/- FROM MR.AKILAN AND ` 15,40,500/- FROM MR. P.SUNDARA PARIPOORNAM. THE ASSESSEE WAS ASKED TO SUBMIT BREAK-UP WITH DETA ILS, LOAN TAKEN AND PARTICULARS OF THE CREDITORS ETC. TH E ASSESSEE SUBMITTED THAT IT HAS BORROWED LOANS FROM THESE TWO PERSONS AND RETURNED THE LOAN AMOUNTS WITH INTEREST TO THEM AND IT COULD NOT FIND THE CREDITORS. IT WAS THE SUBMISSION OF THE 3 ITA NO.1706/MDS/2015 ASSESSEE THAT TRANSACTIONS OF AMOUNTS RECEIVED ARE ALL MADE BY CHEQUES AND THE PAYMENTS ARE MADE THROUGH BANK ING CHANNELS AND THUS TRANSACTIONS ARE GENUINE. SINCE NO EVIDENCE WAS FILED BEFORE THE ASSESSING AUTHORITY, THE ASSESSING OFFICER MADE ADDITION STATING THAT THE AS SESSEE HAS NOT PROVED THE GENUINENESS AND SOURCES OF FUNDS RECEIVED FROM THE CREDITORS. ON APPEAL THE COMMISS IONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION AS THE ASSESSEE FAILED TO PROVE THE GENUINENESS, IDENTITY AND CREDI TWORTHINESS OF THE CREDITORS. 4. COUNSEL FOR THE ASSESSEE REITERATES THE SUBMISSI ONS MADE BEFORE THE LOWER AUTHORITIES AND HE SUBMITS T HAT TRANSACTIONS WERE MADE ONLY THROUGH BANKING CHANNEL S I.E. LOANS RECEIVED THROUGH CHEQUES AND MONEY REPAID THROUGH ACCOUNT PAYEE CHEQUES AND THE AMOUNTS WERE RECEIVED TO MAKE PAYMENTS TOWARDS TDS TO THE GOVERNMENT ACCOUNT . THE CREDITORS ARE IDENTIFIABLE AND TRANSACTIONS ARE GENUINE AND THEREFORE, NO ADDITION CAN BE MADE UNDER SECTIO N 68 OF THE ACT. 4 ITA NO.1706/MDS/2015 5. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDERS OF THE LOWER AUTHORITIES IN MAKING ADDITION TREATING THE LOAN CREDITORS AS NOT GENUINE IN THE ABSENCE OF PRO PER EXPLANATION BY THE ASSESSEE IN PROVING THE IDENTITY AND GENUINENESS OF THE TRANSACTIONS. 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES. BEFORE US, THE ASSESSEE SUBMITS IN BRIEF AS UNDER:- ADDITION UNDER SEC.68 OF RS.26,42,500/- + INT. PAID OFRS.75.000/- I)MR.P.SUNDARA PARIPOORNAM: RS.15.40,000/- 1.HE IS NOT RELATED TO THE COMPANY. 2. HE IS KNOWN THROUGH A FRIEND WHO IS AN EMPLOYEE AT P. SUNDARA PARIPOORNAM OFFICE. 3. WE HAD CHANGED OUR AUDITOR MR.MURUGESAN AS WE WERE NOT SATISFIED WITH HIS SERVICE AND FELT HIS FE ES WERE NOT VIABLE FOR US. 4. THE PURPOSE OF TAKING THE LOAN ON 29 TH SEPTEMBER 2009 OF RS.40,00,000/- DATED 29/9/2009 VIA CROSSED CHEQUE - AMOUNT WAS USED TO MAKE THE TDS PAYMENT TO THE GOVERNMENT. 5. HE IS NOT AN ASSESSEE - PAN NO: ARXPM2358P 6. ADDRESS : GREEN SIGNAL, NO.5, CIRCULAR ROAD, UNITED INDIA COLONY, KODAMBAKKAM, CHENNAI - 600 024. 7.LOAN PAYMENT IS THROUGH ONE SINGLE CHEQUE BANK STATEMENT FILED BEFORE THE AO. 8.WE DO NOT KNOW HIS SOURCE OF THE PAYMENT TO US. 5 ITA NO.1706/MDS/2015 9. WE HAVE MADE THIS ENTIRE PAYMENT TO TOWARDS OUR COMPANY'S TDS PAYMENT. 10. REPAYMENT SCHEDULE: PAYMENT MADE TO MR.P. SUNDARA PARIPOORNAM RS.25 LACS ON 6/10/2009 VIA CHEQUE NO.543954 ORIENTAL BANK OF COMMERCE, KILAPUK BRANCH FROM M/S.GANAPATHY MEDIA PVT LTD. 11. THE SOURCE TO RETURN THIS PAYMENT OF RS. 25 LACS IS BY WAY OF ANOTHER BORROWING FROM MR.VIJAY WADHWA AND VARIOUS ASSOCIATES OF HIS COMPANY, WHICH WAS TAKEN ON 1/10/2009. 12. INTEREST WAS CALCULATED AT 0.5 % FOR 6 MONTHS FOR T HE BALANCE PAYABLE OF RS.15 LACS WHICH IS RS.45,000/- 13. THE BALANCE RS.15 LACS WAS PAID BY M/S.GANAPATHY MEDIA PVT LTD., VIA CHEQUE NO.901261, ORIENTAL BANK OF COMMERCE KILPAUK BRANCH DATED 7 TH AUGUST 2010 AND THE INTEREST OF RS.45000 WAS MADE BY WAY OF CASH. 14. THE SOURCE FOR THE PAYMENT OF RS.15 LACS WAS FROM THE SALE OF FILMS WHICH WE HAD MADE TO M/S.CPT HOLDINGS (SONY TV- SUNDRY DEBTOR). II) MR. AKILAN : RS.L0.27.000/- 1. HE IS NOT RELATED TO THE COMPANY IN ANY WAY. 2. HE IS KNOWN THROUGH OUR EX-AUDITOR MR.P.MURUGESAN 3. WE HAD BORROWED RS.10 LACS ON 29/9/2009 VIA CHEQUE NO.24206 THROUGH INDIAN OVERSEAS BANK 6 ITA NO.1706/MDS/2015 4. WE HAD TAKEN THIS LOAN TO MAKE TDS PAYMENT OF RS.50 LACS ON 29/9 /2009 VIA CHEQUE NO.543994 5. THIS AMOUNT OF RS. 10 LACS WAS RETURNED TO MR.AKILAN ON 7 TH AUGUST 2010 VIA CHEQUE NO.901260, ORIENTAL BANK OF COMMERCE. 6. WE DO NOT KNOW HIS PAN NUM. 7. THE SOURCE TO MAKE THE LOAN RE- PAYMENT WAS BY THE PAYMENT WHICH WE RECEIVED FROM CPT HOLDINGS (SONY TV) THROUGH THE SALE OF FILMS. OUR SUNDRY DEBTOR. 8. INTEREST WAS CALCULATED AT 0.5% FOR 6 MONTHS RS.30,000/- WHICH WAS MADE BY WAY OF CASH. 9. ALL BANK STATEMENTS WERE FILED BEFORE THE AO. 7. IT IS THE CASE OF THE ASSESSEE THAT TRANSACTIONS WERE ALL MADE THROUGH ACCOUNT PAYEE CHEQUES THROUGH BANKING CHANNELS AND CREDITORS ARE IDENTIFIABLE AND THE LOA NS WERE MAINLY OBTAINED FROM THEM TO DEPOSIT THE TDS AMOUNT INTO GOVERNMENT ACCOUNT IN THE COURSE OF CARRYING ON THE BUSINESS. THE LOANS WERE REPAID THROUGH BANKING CH ANNELS. COUNSEL SUBMITS THAT AT THAT POINT OF TIME THE ASS ESSEE COULD NOT PRODUCE CREDITORS CONFIRMATIONS BEFORE THE ASSE SSING OFFICER . HE PLEADS FOR ONE MORE OPPORTUNITY FOR SU BMISSION OF CONFIRMATIONS BEFORE THE ASSESSING OFFICER. TAKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE INTO CON SIDERATION, 7 ITA NO.1706/MDS/2015 WE ARE OF THE VIEW THAT SINCE THE TRANSACTIONS ARE MADE THROUGH ACCOUNT PAYEE CHEQUES, THE IDENTITY OF THE CREDITORS CANNOT BE DOUBTED. HOWEVER, THE BURDEN IS ON THE A SSESSEE TO PRODUCE CREDITORS CONFIRMATIONS AND TO EXPLAIN THE SOURCES OF LOANS. IN THE INTEREST OF JUSTICE, WE ARE INCLIN ED TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH THE I DENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO NS. THUS, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISS UE BACK TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESS EE SHALL PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE TRANSACTIONS TO THE SATISFACTION OF THE ASSESSING O FFICER, WHO SHALL DECIDE THE ISSUE AFTER PROVIDING ADEQUATE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2015. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 30 TH OCTOBER, 2015 SOMU 8 ITA NO.1706/MDS/2015 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .