ACIT, Coimbatore V. Shri J.K.Govindarajulu, Coimbatore

ITA 1831/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1108 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 08-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR
• Keywords: Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE , ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1831/MDS/2012 (ASSESSMENT YEAR : 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-II,, RACE COURSE ROAD, COIMBATORE-641 018. VS. SHRI J.K.GOVINDARAJULU, 306, JVK TOWERS, CROSS CUT ROAD, GANDHIPURAM COIMBATORE-641 012. PAN: AIVPG8500A (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SHAJI P.JACOB, ADDL. CIT RESPONDENT BY : MR . G.BASKAR, ADVOCATE DATE OF HEARING : 19 TH FEBRUARY, 2013 DATE OF PRONOUNCEMENT : 12 TH MARCH, 2013 O R D E R PER VIKAS AWASTHY, JM: THE APPEAL HAS BEEN FILED BY THE REVENUE IMPUGNING THE ORDER OF THE CIT(A) DATED 24.07.2012. 2. THE ASSESSEE IS A PROPRIETOR OF M/S. MATRIX CORP RX. BESIDES THE INCOME FROM PROPRIETORSHIP FIRM, THE A SSESSEE IS A PARTNER IN M/S. K & N TRADE, COIMBATORE AND IS D RAWING REMUNERATION AND INTEREST ON CAPITAL THEREFROM. FO R THE ASSESSMENT YEAR 2007-08 THE ASSESSEE FILED HIS R ETURN OF INCOME ON 22.11.2008 ADMITTING TOTAL INCOME OF ` 5,10,530/-. ITA NO.1831/MDS/2012 2 THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSE SSEE ON 10.9.2009. THE ASSESSING OFFICER VIDE ASSESSMENT OR DER DATED 30.12.2010 MADE ADDITIONS INTER-ALIA ON ACCOUNT OF UNEXPLAINED CAPITAL INVESTMENT TO THE TUNE OF ` 70,30,000/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE FILED WRITTEN SUBMISSIONS ALONG WITH THE D ETAILS OF ALL BANK ACCOUNTS AND CONFIRMATIONS FROM CREDITORS WITH RESPECT TO ADDITIONS MADE BY THE ASSESSING OFFICER. THE CIT(A) HAS FORWARDED THE DOCUMENTS SUBMITTED BY THE ASSESSEE TO THE ASSESSING OFFICER AND SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER A FTER EXAMINING THE DOCUMENTS SUBMITTED BY THE ASSESSEE I N HIS REMAND REPORT DATED 20.3.2012 CONCLUDED THAT THE F OLLOWING AMOUNTS RECEIVED BY THE ASSESSEE WERE GENUINE:- 1. GOVINDARAJ CHITS ` 2,01,000/- 2 BARCLAYS LOAN ` 14,57,000/- 3. ICICI PERSONAL LOAN ` 5,00,000/ - 4. CHOLA PERSONAL LOAN ` 6,00,000/ - 5 MORTGAGE LOAN ` 10,00,000/- ITA NO.1831/MDS/2012 3 REGARDING LOANS FROM VARIOUS OTHER PARTIES, THE ASS ESSING OFFICER ACCEPTED THE AMOUNT OF ` 2,00,000/- RECEIVED BY THE ASSESSEE DURING THE MONTH OF APRIL. WITH RESPECT T O REMAINING AMOUNT OF LOANS FROM VARIOUS PARTIES TOTA LING TO ` 26,99,000/-, THE ASSESSING OFFICER HELD THAT NO CON CRETE PROOF WAS PRODUCED BY THE ASSESSEE AND THEREFORE GENUINEN ESS OF THE TRANSACTIONS COULD NOT BE ASCERTAINED. THE CIT( A) AFTER PERUSING THE SUBMISSIONS MADE BY THE ASSESSEE AND T HE REMAND REPORT OBSERVED THAT THE ASSESSING OFFICER H AS NOT VERIFIED ANY OF THE CONFIRMATION LETTERS RECEIVED F ROM THE CREDITORS AND CURRENT ACCOUNT LEDGER OF M/S. MATRIX CORPX. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON RECORD TO DISPROVE THE SUBMISSI ONS OF THE ASSESSEE OR CONFIRMATION LETTERS REGARDING CREDITOR S TO THE TUNE OF ` 13,68,515/-. THE CIT(A) DIRECTED THE ASSESSING OFFICER TO DELETE THE SAID ADDITION. THE CIT(A) FUR THER HELD THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF FUNDS TO THE TUNE OF ( ` 5,68,330 + ` 5,14,400/- ) = ` 10,82,730/- THE CIT(A) CONFIRMED THE ADDITION OF THE SAID AMOUNT. AGGRIEV ED AGAINST ITA NO.1831/MDS/2012 4 THE ORDER OF THE CIT(A), THE REVENUE HAS COME IN SE COND APPEAL BEFORE THE TRIBUNAL. 3. THE DR SUBMITTED THAT THE CIT(A) HAS ERRED IN DE LETING THE ADDITION MADE ON DIFFERENCE IN CREDIT BALANCE. THE DR FURTHER CONTENDED THAT THE REMAND REPORT CLEARLY ME NTIONS THAT THE ASSESSEE HAS NOT SUBMITTED CONFIRMATION LETTERS FROM ALL THE CREDITORS YET, THE CIT(A) WENT ON TO DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER. 4. ON THE OTHER HAND, SHRI G.BASKAR APPEARING ON BE HALF OF THE ASSESSEE SUBMITTED THAT THE ORDER OF THE CIT (A) IS A WELL-REASONED AND DETAILED ORDER. THE CIT(A) HAS CATEGORICALLY STATED THAT THE ASSESSING OFFICER HAS NOT CONSIDERED ALL THE CONFIRMATION LETTERS FILED BY TH E ASSESSEE. FURTHER, THE ASSESSING OFFICER HAS NOT BROUGHT ANYT HING ON RECORD CONTRARY TO DISPROVE THE SUBMISSIONS MADE BY THE ASSESSEE. THE COUNSEL STRONGLY SUPPORTED THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORIT IES BELOW. ITA NO.1831/MDS/2012 5 THE ONLY GROUND OF THE REVENUE IS WITH REGARD TO DE LETING OF ADDITIONS MADE BY THE ASSESSING OFFICER IN RESPECT OF SUNDRY CREDITORS BALANCE. THE ASSESSING OFFICER HAD MADE A DDITIONS TO THE TUNE OF ` 70,30,000/- ON ACCOUNT OF UNEXPLAINED CAPITAL INVESTMENTS. THE DETAILS WHICH ARE AS FOLLOWS:- 1. GOVINDARAJ CHITS ` 2,01,000/- 2 BARCLAYS LOAN ` 14,57,000/- 3. ICICI PERSONAL LOAN ` 5,00,000/ - 4. CHOLA PERSONAL LOAN ` 6,00,000/- 5 MORTGAGE LOAN ` 10,00,000/- 6 LOANS FROM VARIOUS PARTIES `26,99 ,000/ - TOTAL ` 70,30,000/ - IN THE REMAND REPORT, THE ASSESSING OFFICER WHILE ACCEPTING THE SUBMISSIONS OF THE ASSESSEE HELD THAT THE AMOUN T RECEIVED FROM GOVINDARAJ CHITS, BARCLAYS BANK PERSO NAL LOAN, ICICI PERSONAL LOAN, CHOLA DBS PERSONAL LOAN, MORTG AGE LOAN WERE FOUND TO BE GENUINE. THE ASSESSING OFFICER ALS O ACCEPTED THE EXPLANATION FURNISHED BY THE ASSESSEE IN RESPECT OF CASH LOAN FROM LOAN CREDITORS TO THE TUN E OF ` 2,00,000/- . HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE WITH REGARD TO LOANS FROM VARIOUS PARTIES TO THE TUNE OF ` 24,99,000/-. THE CIT(A) DELETED THE ADDITION TO THE TUNE OF ` 13,68,515/- FROM ITA NO.1831/MDS/2012 6 THE SAID LOAN AMOUNT. THE AMOUNT WAS SHOWN AS DIRE CT CASH CREDIT IN THE ASSESSEES ACCOUNT OF M/S.MATRIX CORP X. THE ASSESSEE HAD FILED CONFIRMATION LETTERS FROM CREDIT ORS AND CURRENT ACCOUNT LEDGER OF M/S. MATRIX CORPX. THE C IT(A) IN HIS ORDER HAS CATEGORICALLY STATED THAT THE ASSESSI NG OFFICER WITHOUT VERIFYING CONFIRMATION LETTERS FILED BY THE ASSESSEE REGARDING THE CREDITORS FOR THE SAID AMOUNT HAS STA TED THAT THERE IS NO MATERIAL EVIDENCE TO PROVE GENUINENESS OF THESE INTEREST FREE HAND LOAN TRANSACTION. THE CIT(A) CON FIRMED THE ADDITION OF ` 10,82,730/- BEING UNEXPLAINED AMOUNT AS THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENT TO VERIFY T HE GENUINENESS OF THE TRANSACTIONS. 6. THE D.R. COULD NOT CONTROVERT THE FINDINGS IN T HE ORDER OF THE CIT(A) AND THE REASONS GIVEN BY CIT(A) IN DE LETING THE ADDITION MADE BY THE ASSESSING OFFICER. WE, THEREFO RE, DO NOT DEEM IT APPROPRIATE TO INTERFERE WITH THE ORDER OF THE CIT(A) AND UPHOLD THE SAME. THE ORDER OF THE CIT(A) IS CON FIRMED AND THE APPEAL OF THE REVENUE IS DISMISSED AS IT IS DEVOID OF MERIT. ITA NO.1831/MDS/2012 7 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY , T HE 12 TH DAY OF MARCH, 2013 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 12 TH MARCH, 2013. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.