Shri B.Jayachandran, Coimbatore V. ACIT, Coimbatore

ITA 1769/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51871 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 20-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: T BANUSEKHAR
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1769/MDS/2010 (ASSESSMENT YEAR : 2007-08) SHRI B. JAYACHANDRAN 1057, AVINASHI ROAD COIMBATORE,CHENNAI 641 018. PAN : AGJPJ 0474 A (APPELLANT) VS. THE ASSTT COMMISSIONER OF INCOME TAX, CIRCLE - III, COIMBATORE. (RESPONDENT) APPELLANT BY : SHRI T. BANUSEKHAR RESPONDENT BY : SHRI K.E .B RENGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 05.09.2011 DATE OF PRONOUNCEMENT : O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY ASSESSEE FOR THE ASSESS MENT YEAR 2007-2008 AGAINST THE ORDER DATED 02.08.2010 OF COM MISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE. I.T.A. NO. 1769/MDS/10 2 2. THE ASSESSEE HAS TAKEN 14 GROUNDS OF APPEAL. HO WEVER, THE ONLY ISSUE INVOLVED IN ALL THESE GROUNDS IS THAT TH E LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF RS. 22 LAKHS AS UNEXPLAINED CASH CREDIT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, ADDITION OF RS. 22 LAKHS WAS MADE BY THE ASSESSING OFFICER BY INVOKING PROVISIONS OF SECTION 68 OF THE ACT WHICH WAS CONFIRMED BY THE LD. CIT(A). IT IS OBSERVED THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IS MAINTAINING A BANK ACCOUNT WITH HDFC BA NK IN WHICH RS. 22 LAKHS WAS DEPOSITED IN CASH IN MAY 2006. 4. FURTHER, THE ASSESSEE DID NOT REVEAL THE EXISTEN CE OF THIS ACCOUNT EARLIER TO THE ASSESSING OFFICER AND ONLY O N A LATER DATE, THE SAME WAS ADMITTED. THE ASSESSEE EXPLAINED THE SOURCE OF DEPOSIT OF RS. 22 LAKHS IN THE SAID BANK ACCOUNT A S MONEY RECEIVED FROM M/S JAYA AUTOMOTIVES P. LTD FROM WHOM THE MONE Y WAS DUE TO I.T.A. NO. 1769/MDS/10 3 THE ASSESSEE. THE REVENUE HAS NOT ACCEPTED THE ABO VE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE RETURN OF M/S JAYA AUTOMOTIVES P. LTD WAS NOT FILED EARLIER AND WAS FILED BELATEDLY O N 22.1.2010 FOR ASSESSMENT YEAR 2007-08 AND BOOKS OF ACCOUNT OF THE COMPANY WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER FOR VERIF ICATION. 5. FURTHER, IT WAS ALSO OBSERVED THAT THE SAID M/S JAYA AUTOMOTIVES P. LTD WAS A DEFUNCT COMPANY AND THE ON LY SOURCE OF INCOME OF THAT COMPANY WAS RENTAL INCOME AND THAT C OMPANY HAS ALSO DEFAULTED IN MAKING REPAYMENT OF ITS BANK LOAN . 6. EXPLANATION OF THE ASSESSEE IS THAT THE SAID M/S JAYA AUTOMOTIVES P. LTD RECEIVED MONEY FROM M/S JAYAM AU TOMOTIVES P. LTD AND OUT OF THAT MONEY, IT REPAID THE MONEY WHIC H WAS DUE TO THE ASSESSEE. 7. BOTH THE PARTIES BEFORE US HAVE NOT PRODUCED ANY MATERIAL TO SHOW THE DATE ON WHICH RETURN OF INCOME WAS FILED B Y M/S JAYAM AUTOMOTIVES P. LTD. FURTHER THE ASSESSEE HAS CONTEN DED THAT DURING I.T.A. NO. 1769/MDS/10 4 THE COURSE OF ASSESSMENT HEARING, THE ASSESSING OFF ICER NEVER ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT OF M/S JAYA AUTOMOTIVES P. LTD. THUS THE ADVERSE INFERENCE DRA WN AGAINST THE ASSESSEE FOR NON PRODUCTION OF BOOKS OF ACCOUNT OF M/S JAYA AUTOMOTIVES P. LTD IS UNJUSTIFIED AND PRAYED THAT T HE ASSESSEE MAY BE ALLOWED TO PRODUCE THE BOOKS OF ACCOUNT OF THE S AID M/S JAYA AUTOMOTIVES P. LTD FOR VERIFICATION. 8. THE LD. D.R. COULD NOT PRODUCE ANY MATERIAL TO S HOW THAT THE ASSESSEE WAS REQUIRED TO PRODUCE THE BOOKS OF ACCOU NT OF M/S JAYA AUTOMOTIVES P. LTD BY THE ASSESSING OFFICER BEFORE THE COMPLETION OF ASSESSMENT AND SUBMITTED THAT THE DEPARTMENT HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESS ING OFFICER FOR VERIFICATION. 9. CONSIDERING THE FULL FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED OPINION, IT SHALL BE JUST AND FAIR T O RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIF ICATION OF BOOKS OF ACCOUNT OF M/S JAYA AUTOMOTIVES P. LTD AND TO VERIF Y THE DATE OF I.T.A. NO. 1769/MDS/10 5 FILING OF RETURN BY M/S JAYAM AUTOMOTIVES P. LTD AN D THEREAFTER, READJUDICATE THE ISSUE AFRESH AFTER ALLOWING REASON ABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AS PER LAW. THUS THE GR OUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE S. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 9 TH SEPTEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 9 TH SEPTEMBER, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE