ITO Ward 2 , Virudhunagar V. A.Jayasankar , Sattur

ITA 1835/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4922 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-01-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 27-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Keywords: Unexplained cash credit
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! ' . #$ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.1835/CHNY/2017 ( / ASSESSMENT YEAR: 2012-13) THE INCOME TAX OFFICER, WARD-2, VIRUDHUNAGAR, VS SHRI A JAYASANKAR, NO.77, RAILWAY FEEDER ROAD, SATTUR 626 203 PAN: AFBPJ3414M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI SANAT KUMAR RAHA, JCIT / RESPONDENT BY : NONE /DATE OF HEARING : 03.01.2018 !' /DATE OF PRONOUNCEMENT : 09.02.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)- 3, CHENNAI DATED 05.05.2017 IN ITA NO.0037/2015-16 FOR THE ASSESSMENT YEAR 2012-13 PASSED U/S.250(6) R.W.S. 14 3(3) OF THE ACT. AT THE TIME OF HEARING THE LD.AR WAS NOT PRESENT BE FORE THE BENCH, HOWEVER ON PERUSING THE FILE AND THE SUBMISSION OF THE LD.DR THE BENCH DECIDED TO HEAR THE APPEAL EX-PARTE. 2 ITA NO.1835/CHNY/201 7 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE LD.AO AMOUNTING T O RS.53,71,000/- AS UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT, WITH OUT CONSIDERING THE REMAND REPORT IN ITS ENTIRETY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF CHILLY, FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-1 3 ON 04.10.2012 ADMITTING TOTAL INCOME OF RS.2,66,520/-. THE CASE WAS SELECTED FOR SCRUTINY AND FINALLY ASSESSMENT ORDER WAS PASSED ON 31.03.2015 U/S.143(3) OF THE ACT, WHEREIN THE LD.AO TREATED TH E UNSECURED LOAN RECEIVED BY THE ASSESSEE AMOUNTING TO RS.58,14,300/ - AS UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT, SINCE T HE ASSESSEE HAD NOT PRODUCED THE LOAN CREDITORS BEFORE THE REVENUE FOR EXAMINATION IN SPITE OF SUFFICIENT OPPORTUNITIES PROVIDED TO TH E ASSESSEE. THE LD.AO FURTHER WAS OF THE VIEW THAT THE ASSESSEE HAS NOT PROVED THE IDENTITY, SOURCE AND GENUINENESS OF THE LOAN TRANSA CTION. 4. ON APPEAL THE LD.CIT(A) OBTAINED REMAND REPORT DATED 29.03.2017 FROM THE LD.AO AND ARRIVED AT THE CONCLU SION THAT THE 3 ITA NO.1835/CHNY/201 7 ASSESSEE HAD ESTABLISHED THE GENUINENESS OF THE LOA N TO THE EXTENT OF RS.53,71000(58,14,300 4,43,300). ACCORDINGLY H E ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS.53,71000/- BY OBSERVING AS UNDER: 3.4. THE ASSESSING OFFICER SUBMITTED REMAND REPORT DATED 29.03.2017. A COPY OF THE REMAND REPORT WAS SUPPLIED TO THE REPRESENTA TIVE AND THE CASE WAS DISCUSSED WITH HIM. IN THE ABOVE REMAND REPORT, THE ASSESSING OFFICER HAS REPORTED THAT THE CREDITORS NAMELY SHRI D. INBASEKA RAN AND SHRI I. SUDHAKAR HAD FILED CONFIRMATION REGARDING GRANT OF UNSECURED LOAN AND REPAYMENT DETAILS. IT IS ALSO STATED THAT THE UNSECURED LOANS RECEIVED BY THE APPELLANT DURING THIS YEAR WERE REPAID IN THE NEXT FINANCIAL YEAR TO THE CREDITORS. IT IS ALSO REPORTED THAT SINCE THE CREDITORS HAD NOT ADMI TTED THE LOANS GIVEN TO THE APPELLANT, ACTION IS TAKEN U/S 148 IN RESPECT OF BO TH THE CREDITORS. . 3.5. AT THE TIME OF HEARING THE REPRESENTATIVE SUBM ITTED THAT SINCE THE ASSESSING OFFICER ACCEPTED THE GENUINENESS OF LOANS RECEIVED FROM SHRI I. SUDHAKAR AND SHRI D. INBASEKARAN, THE ADDITION SHOULD BE DELETED . HOWEVER, HE HAS NO OBJECTION FOR CONFIRMING THE ADDITION OF LOAN CREDI TS IN THE NAME OF THE FOLLOWING PARTIES: B, CHANDRASEKARAN,SATTUR RS,1,87,000/- A. ANAND, SATTUR RS.1,87,000/- I. PADMAVATHI, SATTUR RS. 69,300/- TOTAL RS.4,43,000 /- 3.6. I HAVE CONSIDERED THE SUBMISSIONS OF THE REPRE SENTATIVE. THE ASSESSING OFFICER IN THE REMAND REPORT ACCEPTED THE GENUINENE SS OF LOANS AND IRRESPECTIVE OF THE FACT THAT NOTICES U/S 148 ARE I SSUED IN THE CASES OF THE CREDITORS, THE ADDITION IN THE HANDS OF THE APPELLA NT IS DELETED IN RESPECT OF CREDITS IN THE NAME SHRI I. SUDHAKAR AND SHRI D. IN BASEKARAN. HOWEVER, THE CREDITS IN THE NAMES OF OTHER THREE CREDITORS TOTAL LING TO RS.4,43,300/- IS CONFIRMED, AS THE APPELLANT'S REPRESENTATIVE ACCEPT ED THE SAME. ACCORDINGLY, THE ADDITION OF RS.58,14,300/- IS RESTRICTED TO RS. 4,43,300/- 5. THE LD.DR PRODUCED THE REMAND REPORT OF THE LD. AO BEFORE US AND ARGUED THAT THE LD.CIT(A) HAS NOT CON SIDERED THE 4 ITA NO.1835/CHNY/201 7 REPORT IN ITS ENTIRETY WHILE ALLOWING THE APPEAL OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE LD.AO IN HIS REMAND REPO RT HAD ONLY STATED CERTAIN FACTS BUT HAD NOT ARRIVED AT A CONCLUSION F OR TREATING THE LOAN TRANSACTION TO BE GENUINE. HE FURTHER PLEADED THAT THE GENUINENESS OF THE LOAN TRANSACTION IS NOT ESTABLISHED AND THEREFO RE THE ORDER OF THE LD.AO MAY BE UPHELD. 6. AFTER PERUSING THE FACTS OF THE CASE AND THE MA TERIALS PRODUCED BEFORE US AND HEARING THE ARGUMENTS ADVANC ED BY THE LD.DR, WE ARE OF THE CONSIDERED VIEW THAT THERE IS MERIT IN THE ORDER OF THE LD.CIT(A). THE LD.CIT(A) AFTER EXAMINING THE REMAND REPORT HAS RIGHTLY ARRIVED AT THE CONCLUSION THAT THE TRA NSACTIONS ARE GENUINE AND THE IDENTITY OF THE LENDERS ARE ALSO ESTABLISHE D. THOUGH THE LD.AO IN HIS REMAND REPORT DID NOT EXPRESS ANY FIND ING AGAINST THE ASSESSEE OTHER THAN STATING THE FACTS HE DID NOT PR OCEEDED FURTHER TO INVESTIGATE ON THE ISSUE. IF THERE WAS ANY DOUBT IN THE MIND OF THE LD.AO, HE WOULD HAVE PROCEEDED TO INVESTIGATE FURTH ER WHICH HE DID NOT. THEREFORE IT CAN BE PRESUMED THAT THE LD.AO WA S ALSO SATISFIED WITH THE GENUINENESS OF THE TRANSACTION AND THE IDE NTITY OF THE LENDERS. IN THESE CIRCUMSTANCES WE DO NOT FIND ANY FAULT IN THE ORDER 5 ITA NO.1835/CHNY/201 7 OF THE LD.CIT(A) AND THEREFORE WE DO NOT FIND IT NE CESSARY TO INTERFERE IN HIS ORDER. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THE 9 TH FEBRUARY, 2018 AT CHENNAI. SD/- SD/- ( ! ' . #$ ) ( . ) ( DUVVURU RL REDDY ) (A. MOHAN ALANKAMONY) # $% /JUDICIAL MEMBER $% / ACCOUNTANT MEMBER &# /CHENNAI, '$ /DATED 9 TH FEBRUARY, 2018 RSR $ )* +* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. . ( )/CIT(A) 4. . /CIT 5. */0 1 /DR 6. 02 /GF