Sri R.Murugesan, Salem V. ITO, Tiruppur

ITA 1892/CHNY/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68628 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 25-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: T S LAKSHMIVENKATARAMAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 1892/MDS/2012 ASSESSMENT YEAR : 2007-08 SRI R. MURUGESAN, NO. 38, ANNA STREET, 15, VELAMPALAYAM POST, TIRUPUR 641 652. [PAN: AJMPM 3225 A] VS INCOME TAX OFFICER, WARD 1(1), TIRUPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.S.LAKSHMI VENKATARAMAN, FCA RESPONDENT BY : SHRI T.N. BETGIRI, JCIT DATE OF HEARING : 19-08-2013 DATE OF PRONOUNCEMENT : 19-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COI MBATORE DATED 22-05-2012 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2007-08. I.T.A. NO. 1892/MDS/2012 2 2. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY. 2007-08 ON 02-11-2007 DECLARING HIS INCOME AS ` 4,12,680/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U /S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 08-09-2008. DURING THE C OURSE OF ASSESSMENT, ASSESSING OFFICER MADE ADDITION OF ` 12,29,050/- ON ACCOUNT OF UN-ACCOUNTED SALE AND ` 12,06,890/- ON ACCOUNT OF DIFFERENCE IN SUNDRY CREDITORS BALANCE. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) VIDE ORDER DATED 22-05-2012, PARTLY ALLOWED THE APP EAL OF THE ASSESSEE ON THE GROUND OF UN-ACCOUNTED SALES. THE ASSESSING OFFICER HAD MADE ADDITION OF THE ENTIRE UN-ACCOUNTE D SALES. THE CIT(APPEALS) REDUCED THE AMOUNT OF UN-ACCOUNTED SAL ES TO ` 3,09,475/- ON THE BASIS OF GROSS PROFIT. ON THE GR OUND OF DIFFERENCE IN SUNDRY CREDITORS BALANCE, THE CIT(APP EALS) DISMISSED THE GROUND AS THE ASSESSEE COULD NOT OFFER VALID EX PLANATION FOR THE DIFFERENCE. AGGRIEVED AGAINST THE ORDER OF CIT(APPEALS), THE AS SESSEE HAS COME IN SECOND APPEAL BEFORE US. I.T.A. NO. 1892/MDS/2012 3 3. SHRI T.S. LAKSHMI VENKATARAMAN, FCA APPEARING O N BEHALF OF THE ASSESSEE SUBMITTED THAT CIT(APPEALS) HAS MAD E ADDITION ON THE BASIS OF GROSS PROFIT PERCENTAGE WHEREAS THE AD DITION SHOULD HAVE BEEN MADE ON NET SALES. ON THE ISSUE OF DIFFE RENCE IN SUNDRY CREDITORS, THE LD. AR SUBMITTED THAT A SET-O FF SHOULD HAVE BEEN GIVEN FOR THE OPENING CREDIT BALANCE IN RESPEC T OF SUNDRY CREDITORS M/S. MUGHIL IMPEX AND M/S. SRI SURYA SA LES CORPORATION. THE LD. AR SUBMITTED THAT IF GIVEN A CHANCE, THE ASSESSEE CAN GIVE VALID EXPLANATION FOR THE DIFFERE NCE IN SUNDRY CREDITORS BALANCE. ON THE OTHER HAND, SHRI T.N. BETGIRI APPEARING ON B EHALF OF THE REVENUE STRONGLY SUPPORTED THE ORDER OF CIT(APP EALS) AND PRAYED FOR THE DISMISSAL OF THE ASSESSEES APPEAL. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ADDITIONS HAVE BEEN MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF UN-ACCOUNTED SALES AMOUNTING TO ` 12,29,047/- AS WELL AS DIFFERENCE IN SUNDRY CREDITO RS BALANCE IN THE CASE OF M/S. MUGHIL IMPEX AND M/S. SRI SURYA SA LES CORPORATION. AS REGARDS UN-ACCOUNTED SALE, THE ASS ESSING OFFICER I.T.A. NO. 1892/MDS/2012 4 HAS MADE ADDITION OF THE ENTIRE UN-ACCOUNTED SALES. IN APPEAL, THE CIT(APPEALS) HAS REDUCED THE ADDITION ON THE BASIS OF GROSS PROFIT RATIO. WE FIND THAT THE CIT(APPEALS) HAS TAKEN A R EASONABLE VIEW IN MAKING ADDITION ON THE BASIS OF GROSS PROFIT RAT IO. WE DO NOT DEEM IT APPROPRIATE TO INTERFERE WITH THE FINDINGS OF THE CIT(APPEALS) ON THIS GROUND. THIS GROUND OF APPEAL IS THUS DISMISSED. 5. ON THE ISSUE OF DIFFERENCE IN SUNDRY CREDITORS, ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE CIT(APPEALS) AS THE ASSESSEE COULD NOT OFFER VALID EXPLANATION F OR THE DIFFERENCE DURING THE COURSE OF ASSESSMENT. THE LD. AR OF T HE ASSESSEE HAS STATED THAT IF GIVEN A CHANCE, HE CAN FURNISH VALID EXPLANATION ALONG WITH DOCUMENTARY EVIDENCE SHOWING REASONS FOR DIFFERENCE IN SUNDRY CREDITORS BALANCE. IN THE INTEREST OF JU STICE, WE REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE ISSUE AFRESH, AFTER TAKING INTO CONSIDERATION THE EXPLANA TION FURNISHED BY THE ASSESSEE FOR THE DIFFERENCE IN SUNDRY CREDITORS BALANCE. THE ASSESSING OFFICER SHALL GRANT AN OPPORTUNITY OF HEA RING TO THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. I.T.A. NO. 1892/MDS/2012 5 THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES IN THE AFORESAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 19 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 19 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR