Alagappa Chettiar Periyakaruppan, Coimbatore V. ITO, Coimbatore

ITA 1739/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7584 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: G BASKAR
• Keywords: Peak credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO.1739/MDS/2016 / ASSESSMENT YEAR : 2011-2012. M/S. ALAGAPPA CHETTIAR PERIYAKARUPPAN, PROP: RAAGHAVENDHRA STEELS, 458, SANGANUR ROAD, GANAPATHY, COIMBATORE [PAN AEJPP 0814Q] VS THE INCOME TAX OFFICER, WARD II (2) COIMBATORE. ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. G. BASKAR, ADVOCATE /RESPONDENT BY : SHRI. R. CLEMENT RAMESH KUMAR, ADVOCATE /DATE OF HEARING : 28-02-2017 !' /DATE OF PRONOUNCEMENT : 03-03-2017 % / O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER DATED 30.03.2016 OF LD. COMMISSIONER OF INCOM E TAX (APPEALS)- 2, COIMBATORE, FOR THE IMPUGNED ASSESSMENT YEAR. ITA NO. 1739/MDS/2016 :- 2 -: 2. ASSESSEE HAS TAKEN ALTOGETHER SIX GROUNDS OF WHICH GROUNDS NO.1, 5 & 6 ARE GENERAL IN NATURE NEEDING NO SPECIF IC ADJUDICATION. THROUGH ITS GROUNDS 2 & 3 ASSESSEE ASSAILS AN ADDI TION OF E32,33,017 AND IN ITS GROUND NO.4, ASSESSEE ASSAILS DISALLOWAN CE OF CLAIM OF LOSS E14,74,969/- INCURRED BY IT IN SHARE TRADING BUSINE SS. ACCORDING TO ASSESSEE, THE ADDITION/DISALLOWANCE WERE MADE BY TH E LD. ASSESSING OFFICER WITHOUT PROPER APPLICATION OF MIND AND WITH OUT GIVING PROPER OPPORTUNITY FOR REPRESENTING ITS CASE. 3. FACTS APROPOS ARE THAT ASSESSEE IS A DEALER IN IRON & STEEL HAD FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSM ENT YEAR DISCLOSING INCOME OF E 6,75,606/-. LD. ASSESSING OF FICER WAS HAVING INFORMATION FROM AIR THAT ASSESSEE WAS HAVING AN AC COUNT WITH ICICI BANK LTD, PERSONAL BANKING BRANCH, RAMNAGAR, COIMBA TORE. THIS ACCOUNT NO. 615201137916 WAS OPENED BY THE ASS ESSEE ON 09.05.2010. AS PER LD. ASSESSING OFFICER IT REPRES ENTED TRANSACTIONS REFLECTING SHARE TRADING DONE BY THE ASSESSEE THROU GH M/S. ICICI SECURITIES LTD. LD. ASSESSING OFFICER ALSO OBTAINED FROM M/S. ICICI SECURITIES LTD STATEMENT OF ACCOUNTS OF THE ASSESS EE, BY ISSUING NOTICE U/S.133(6) OF THE ACT. PEAK CASH CREDIT DEPOSITED IN THIS ACCOUNT E32,33,017/-. AS PER LD. ASSESSING OFFICER ASSESSE E HAD OFFERED THE ITA NO. 1739/MDS/2016 :- 3 -: SAID AMOUNT FOR ASSESSMENT. LD. ASSESSING OFFICER MADE AN ADDITION OF E39,08,623/- AND COMPLETED ASSESSMENT. 4. AGGRIEVED, THE ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). AS PER ASSE SSEE, THE FACTS AND CIRCUMSTANCES OF THE CASE WERE NOT PROPERLY CON SIDERED AND HIS LOSS FROM SHARE TRADING BUSINESS, EXPENDITURE ON BR OKERAGE, SERVICE TAX, SECURITIES TRANSACTIONS TAX WERE NOT ALLOWED. CONTENTION OF THE ASSESSEE WAS THAT IT HAD INCURRED A LOSS OF E14,74 ,969/- WHICH WAS REQUIRED TO BE SET OFF. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT APPRECIATIVE OF THE ABOVE CONTEN TION. ACCORDING TO HIM, ASSESSEE NEVER MADE ANY CLAIM ON LOSS BEFORE LD. ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (APPEALS) N OTED THAT PROFIT AND LOSS ACCOUNT SHOWING THE LOSS OF E14,71,969/- W AS FILED FIRST TIME BEFORE HIM. AS PER LD. COMMISSIONER OF INCOME TAX (APPEALS) SHARE TRADING TURNOVER OF THE ASSESSEE AS PER THE PROFIT AND LOSS ACCOUNT EXCEEDED E60,00,000/-, BUT THERE WAS NO AUDIT U/S.4 4AB OF THE ACT CONDUCTED NOR A REPORT FILED. HE THEREFORE DISMISSE D THE APPEAL AND CONFIRMED THE ADDITION. 5. NOW BEFORE ME, LD. AUTHORISED REPRESENTATIVE STATED THAT PEAK CASH EVEN IF IT WAS TO BE CONSIDERED FOR ADDIT ION, WAS COMPUTED ITA NO. 1739/MDS/2016 :- 4 -: INCORRECTLY. ACCORDING TO LD. AUTHORISED REPRESENT ATIVE, ASSESSEE WAS HAVING MORE THAN ONE BANK ACCOUNT AND DRAWINGS FRO M ONE OF THE BANK WAS NOT CONSIDERED IN WORKING OUT PEAK CREDIT. FURTHER, ACCORDING TO HIM, LOSS IN SHARE TRADING BUSINESS WA S REJECTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THOUGH IT WAS A GENUINE CLAIM. 6. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. FIRST TAKING UP, T HE CLAIM OF THE ASSESSEE TO SET OFF OF LOSS SUFFERED ON SHARE TRA DING BUSINESS, I AM OF THE OPINION THAT ASSESSEE HAD NEVER FILED A PROF IT AND LOSS ACCOUNT BEFORE THE LD. ASSESSING OFFICER. ASSESSEE HAD NEVE R MADE ANY SUCH CLAIM BEFORE LD. ASSESSING OFFICER. THOUGH ASSESSEE HAD SHOWN TURNOVER IN EXCESS OF E60,00,000/- IN SUCH PROFIT AND LOSS ACCOUNT, NEITHER ANY BOOKS OF ACCOUNTS WERE MAINTAINED OR NO R AUDIT CONDUCTED AS MANDATED U/S.44AB OF THE ACT. THEREFORE, I AM OF THE OPINION THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIF IED IN NOT ACCEDING TO SUCH CLAIM. HOWEVER, WITH REGARD TO TH E CLAIM OF THE ASSESSEE THAT PEAK CREDIT IN HIS ACCOUNT WITH ICICI BANK WAS WORKED OUT WITHOUT CONSIDERING WITHDRAWAL FROM CERTAIN OTH ER BANK ACCOUNTS HE HAD, I AM OF THE OPINION THAT RULES OF JUSTICE DEMAND A FRESH ITA NO. 1739/MDS/2016 :- 5 -: CONSIDERATION. I, THEREFORE SET ASIDE THE ORDER OF THE LD. ASSESSING OFFICER IN SO FAR AS IT RELATES THE ADDITION OF PEA K CREDIT IN THE ACCOUNT OF THE ASSESSEE WITH M/S.ICICI BANK BACK TO THE FIL E OF THE LD. ASSESSING OFFICER FOR CONSIDERATION AFRESH IN ACCOR DANCE WITH LAW. ASSESSEE SHALL BE GIVEN ONE MORE OPPORTUNITY TO FIL E A CASH FLOW STATEMENT AND EXPLAIN THE PEAK CASH CREDIT. HOWEV ER, I SUSTAIN THE ORDER OF THE LOWER AUTHORITIES IN SO FAR AS IT RELA TES TO DISALLOWANCE OF CLAIM OF LOSS OF E14,74,969/-. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 3 RD DAY OF MARCH , 2017, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 3RD MARCH, 2017 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,- / CIT(A) 5. )./ 0 / DR 2. / RESPONDENT 4. + / CIT 6. /12 / GF