SHRI B. SURESH, CHENNAI V. ITO, NCW - 10 (4), CHENNAI

ITA 1849/CHNY/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8047 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 18-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Assessee Lawyers: S SRIDHAR
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 1849/CHNY/2019 / ASSESSMENT YEAR : 2008-09 SHRI. B. SURESH, NO. 7/21, E.TYPE, SIDCO NAGAR, VILLIVAKKAM , CHENNAI 600 049. [PAN: AROPS 7197M] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 10(4), CHENNAI 600 034. ( / APPELLANT) ( / RESPONDENT) ' ( / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE +,' ( / RESPONDENT BY : SHRI. G. JOHNSON, ADDL. CIT ( /DATE OF HEARING : 04.01.2021 ( /DATE OF PRONOUNCEMENT : 06.01.2021 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI, IN ITA NO. 28/CI T(A)-12/2017-18 DATED 26.02.2019 FOR ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE FILED THIS APPEAL BELATEDLY BY 52 DAYS . IT WAS PLEADED THAT THE IMPUGNED ORDER WAS MISPLACED, HOWEVER, DUR ING THE REVIEW OF :-2-: ITA NO.1849/CHNY/2019 INCOME TAX ISSUE BY THE CA, DURING MAY 2019 THIS IS SUE CAME TO NOTICE AND THE ASSESSEE TOOK STEPS IN FILING THE APPEAL. IT WA S PLEADED THAT THE DELAY IN FILING THE APPEAL WAS NEITHER WILFUL NOR DELIBERATE AND MAY BE CONDONED AND DUE DECISION MAY BE RENDERED ON THE MERITS, IN THE INTERESTS OF JUSTICE. 3. WE HEARD THE RIVAL PARTIES AND CONDONE THE DELAY . 4. SHRI. B. SURESH, THE ASSESSEE, IS ENGAGED IN THE BUSINESS OF AUTOMOBILE SPARES. DURING THE ASSESSMENT FOR ASSESSMENT YEAR 2008-09, FROM THE AR INFORMATION, THE AO FOUND THAT THE HUGE DEPOSITS WA S MADE IN THE ASSESSEES BANK ACCOUNT. THE ASSESSEE EXPLAINED THAT THE SOUR CES FOR THE CASH DEPOSIT OF RS. 41,02,625/- WAS OUT OF INTEREST FREE HAND LO AN RECEIVED FROM VARIOUS FRIENDS AND RELATIVES FOR CONDUCTING/EXPANDING THE BUSINESS. THEY WERE SETTLED BEFORE THE CLOSE OF THE FINANCIAL YEAR 2007 -08. THE BALANCE OF RS. 25,12,525/- WAS ON ACCOUNT OF TRADING I.E., AUTOMOB ILE TURNOVER. THE AO CONSIDERED THAT ENTIRE AMOUNT OF RS. 66,15,150/- AS SALE RECEIPTS ON WHICH, HE ESTIMATED THE PROFIT @ 12.67% AND ASSESSED THE I NCOME. AGGRIEVED, THE ASSESSEE FILED AN APPEAL. DURING THE APPEAL PROCEE DINGS, THE LD. CIT(A) PROPOSED TO ADD CASH DEPOSITS AS THE SOURCES OF AN UNEXPLAINED CASH DEPOSITS. THE ASSESSEE RAISED A PLEA TO ADOPT THE PEAK OF THE CASH CREDITS AS INCOME. HOWEVER, THE LD. CIT(A) DISMISSED THE APPEA L WHICH RESULTED IN ENHANCEMENT OF THE ASSESSMENT. AGGRIEVED, THE ASSE SSEE FILED THIS APPEAL. :-3-: ITA NO.1849/CHNY/2019 3. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. THE LD. AR SUBMITTED THAT THE ASSESSEE COULD NOT PRODUCE DOCUMENTARY EVI DENCES BEFORE THE AO WITH REGARD TO THE LOAN TAKEN FROM FRIENDS, RELATIV ES AND WELL WISHERS. THEREFORE, A PLEA WAS TAKEN BEFORE THE LD. CIT(A) T HAT THE PEAK OF CREDITS COULD BE ASSESSED AS INCOME OF THE ASSESSEE. HOWEV ER, THE LD. CIT(A) WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE BANK STATEMENTS MERELY ENHANCED THE ASSESSMENT. THEREFO RE, THE LD. AR PLEADED IN THE FACTS AND CIRCUMSTANCES, THE PEAK OF THE CAS H CREDITS MAY BE ASSESSED AS INCOME. PER CONTRA, THE LD. DR SUBMITTED THAT T HE ASSESSEE COULD NOT PRODUCE NAMES AND ADDRESSES OF THE PERSONS FROM WHO M THE CASH LOANS WAS ALLEGEDLY TAKEN AND HENCE, THE LD. CIT(A) CONFIRMED THE CASH CREDITS AND THUS SUPPORTED THE ORDER OF THE LD. CIT(A). 4. WE HEARD THE RIVAL SUBMISSIONS. THE ASSESSEE OR IGINALLY PLEADED THAT THE CASH DEPOSITS OF RS. 41,02,625/- IS THE INTERES T FREE HAND LOAN FROM VARIOUS FRIENDS AND RELATIVES OBTAINED FOR THE PURP OSE OF CONDUCTING/EXPANDING BUSINESS. HOWEVER, HE IS NOT IN A POSITION TO PROVE THE INGREDIENTS REQUIRED U/S. 68 OF THE INCOME TAX ACT. HOWEVER, A PLEA IS MADE BEFORE THE APPELLATE AUTHORITY THAT ON THE FACTS AN D CIRCUMSTANCES THE PEAK OF THE CASH CREDITS SHOULD BE ASSESSED AS INCOME OF TH E ASSESSEE. WE ARE OF THE VIEW THAT THE CLAIM IS, PRIMA FACIE, IS MERITORIOUS . HOWEVER, IT REQUIRES EXAMINATION OF THE FACTS AND CIRCUMSTANCES AND CONN ECTED MATERIALS VIZ., :-4-: ITA NO.1849/CHNY/2019 BANK STATEMENT ETC. THEREFORE, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH EXAMINATION BEFORE THE AO AND HENCE REMIT THI S ISSUE BACK TO THE AO. THE ASSESSEE SHALL FURNISH THE RELEVANT PARTICULARS /MATERIALS IN SUPPORT OF HIS CONTENTIONS AND COMPLY WITH THE REQUIREMENTS OF TH E AO IN ACCORDANCE WITH THE LAW. THE AO ON DUE EXAMINATION OF THEM AND AFT ER GIVING DUE OPPORTUNITY TO THE ASSESSEE, SHALL DETERMINE THE IS SUE IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 06 TH JANUARY, 2021 AT CHENNAI. SD/- ( . ' ) (DUVVURU RL REDDY) $% /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) % /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 06 TH JANUARY, 2021 JPV (+3454 /COPY TO: 1. ' / APPELLANT 2. +,' /RESPONDENT 3. 6 ) ( /CIT(A) 4. 6 /CIT 5. 4+ /DR 6. 9 /GF