S.Navarathanmal, CHENNAI V. ACIT, Cuddalore

ITA 1898/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4998 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 13-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 23-06-2016
• Court: TRIBUNAL
• Department Lawyers: AWIJIT RAKSHITJCITD R
• Assessee Lawyers: G BASKAR
• Keywords: Right to appeal

Judgement Text

, C/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL C/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO.1898 /MDS./2016 ( / ASSESSMENT YEAR :2008-09) SHRI S.NAVARATHANMAL , 216,KAMARAJAR STREET, VILLUPURAM 605 602. VS. THE ACIT, CIRCLE-II,CUDDALORE. PAN AADPN 0503 A ( / APPELLANT ) ( / RESPONDENT ) ! ' # / APPELLANT BY : MR. G.BASKAR,ADVOCATE $% ! ' # / RESPONDENT BY : MR.AWIJIT RAKSHIT,JCIT,D.R & ' ' ( ) / DATE OF HEARING : 13.03.2017 *+ ' ( ) /DATE OF PRONOUNCEMENT : 12.04.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A), PUDUCHER RY DATED 07.04.2016 PERTAINING TO ASSESSMENT YEAR 2008-09 . ITA NO. 1898/MDS/2016 2 2. THE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO SUSTAINING THE ADDITION OF ` 15,61,300/- TOWARDS UNEXPLAINED ADVANCES IN PAWN BROKING BUSINESS AND INTEREST ON SUCH UNEXPLAINED ADVANCES ESTIMATED AT ` 3,59,099/- WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND ALSO JUDICIA L PRONOUNCEMENTS RELIED ON BY THE ASSESSEE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS CARRYING ON PAWN BROKING BUSINESS AND FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 30.07.2008. THE RETURN OF INCOME WAS PR OCESSED U/S.143(1) ACCEPTING THE INCOME RETURNED. THE ASSES SEE HAD ADMITTED AN AMOUNT OF ` 2 LAKHS UNDER THE HEAD INCOME FROM OTHER SOURCES FOR ASSESSMENT YEAR 2008-09, BEING THE DIF FERENCE IN PAWNBROKING ADVANCES OUTSTANDING AS IN THE BOOKS OF ACCOUNTS AS ACCEPTED TO AT THE TIME OF SURVEY CONDUCTED U/S.133 A IN THE BUSINESS PREMISES OF HIS COUNSEL SHRI R.ASHOK KUMAR ON 14.02 .2008. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY AN D THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 2 9.12.2010 AFTER ADDING OF ` 15,61,300/- TOWARDS UNEXPLAINED ADVANCES IN PAWN ITA NO. 1898/MDS/2016 3 BROKING BUSINESS AND INTEREST ON SUCH UNEXPLAINED ADVANCES ESTIMATED AT ` 3,59,099/-. AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). 3.1 ON APPEAL, LD.CIT(A) OBSERVED THAT THERE WAS A DIFFERENCE IN THE PAWN BROKING ADVANCES ACCOUNT AS PER THE LEDGER FOUND DURING THE SURVEY AND AS PER THE RETURN OF INCOME FILED AN D THERE WAS EXCESS ADVANCE OF ` 17,61,300/- BY THE ASSESSEE AS PER BOOKS. WHEN THE ASSESSEE WAS CALLED UPON TO EXPLAIN, IT WAS SUBMITT ED BY THE ASSESSEE THAT A SUM OF ` 2 LAKHS WAS ALREADY OFFERED AS INCOME IN THE RETURN OF INCOME. FURTHER, IT WAS STATED BY THE AS SESSEE VIDE HIS LETTER DATED 24.12.2010 THAT IT INCLUDES HIS OWN MO NEY AS WELL AS SUM BORROWED FROM VARIOUS OTHER PERSONS AND EXPRESS ED HIS INABILITY TO EXPLAIN THE SOURCE FOR THE SAME AND AGREED TO OF FER THE SAME AS INCOME FOR THE PRESENT ASSESSMENT YEAR UNDER CONSID ERATION. BEING SO, LD.CIT(A) CONFIRMED THE ADDITION. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 1898/MDS/2016 4 4. BEFORE US, LD.A.R SUBMITTED THAT THERE WAS NO E VIDENCE REGARDING SUPPRESSED INCOME OF ASSESSEE AND THE ORD ER OF THE CIT(APPEALS) IS VERY CRYPTIC ON THIS ISSUE AND IT IS TO BE EXAMINED BY THE AO AFRESH. REGARDING OTHER ADDITION OF ` 3,59,099/-, LD.A.R SUBMITTED THAT IT IS AN INTEREST COMPUTED AT 23% ON THE ABOVE ADVANCES OF ` 15,61,300/- AND WITHOUT ANY PRINCIPLE, LD.CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ESTIMATED INTEREST INCOME ON SUCH ADVANCES. LD.A.R PLEADED THAT BOTH THE ISSUES/ADDIT IONS MAY BE REMITTED TO THE FILE OF AO. 5. ON THE OTHER HAND, LD.D.R RELIED ON THE ORDER O F LOWER AUTHORITIES STATING THAT WHEN THE ADDITION WAS ADMI TTED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, HE CANNOT CH ALLENGE THE SAME BEFORE THE TRIBUNAL. FOR THIS PURPOSE, HE RELIED ON THE JUDGEMENT OF KERALA HIGH COURT IN THE CASE OF MAHESH B SHAH VS. ACIT IN 238 ITR 130 AND JURISDICTIONAL HIGH COURT IN THE CASE OF IN DIARA CHEMICAL AGENCY VS. CIT IN 119 ITR 568. ACCORDINGLY, THE AD DITIONS BE SUSTAINED. ITA NO. 1898/MDS/2016 5 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE ASSESSEE ADMITTED BEFORE THE LOWER AUTHORITIES REGARDING THE FACT THAT HE IS NOT IN A POSITION TO EXPLAIN THE SOURCE OF THE ADVANCE OF ` 15,61,300/- SHOWN IN THE BOOKS OF ACCOUNTS. FOR THAT, THE ASSESSEE FILED A LETTER DA TED 24.12.2010. BEFORE US, LD.A.R SUBMITTED THAT IT WAS MISTAKENLY ADMITTED THE ADDITIONS AND THE ASSESSEE WAS NOT WELL VERSED IN T HE INCOME TAX PROCEEDINGS. IN OUR OPINION, EVEN THE ASSESSEE ADM ITTED BEFORE THE ASSESSING AUTHORITY, THE RIGHT OF APPEAL CANNOT BE TAKEN AWAY. ADMITTEDLY, IN THIS CASE ASSESSEE WAS NOT WELL VERS ED IN THE INCOME TAX PROCEEDINGS AND THE AO ISSUED SUMMONS TO THE AS SESSEE ON 22.12.2010 AND IN RESPONSE TO IT, THE ASSESSEE VIDE LETTER DATED 24.12.2010 HAD AGREED TO THE ADDITIONS. IN OUR OPI NION, IT IS NOT APPROPRIATE TO MAKE ADDITIONS BASED ONLY ON THE ADM ISSION MADE BY THE ASSESSEE AT THE TIME OF SURVEY WITHOUT ANY CORR OBORATIVE EVIDENCE. CONSIDERING THIS, WE ARE INCLINED TO REMI T THE ISSUE TO THE FILE OF AO TO MAKE AN ADDITION ONLY ON THE BASIS OF EVIDENCE ON RECORD ADDUCED BY LD. ASSESSING OFFICER. ACCORDINGLY, WE S ET ASIDE THE ORDER ITA NO. 1898/MDS/2016 6 OF LOWER AUTHORITIES AND BOTH THE ISSUES IN DISPUTE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATI ON. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12 TH APRIL, 2017 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 12 TH APRIL, 2017 . K S SUNDARAM. , ' $(-. /.( / COPY TO: 1 . ! / APPELLANT 3. & 0( () / CIT(A) 5. .3 4 $(5 / DR 2. $% ! / RESPONDENT 4. & 0( / CIT 6. 4 6 7 ' / GF