R.Munusamy, Kalpakkam V. ITO Non Corporate Circle 5(5), CHENNAI

ITA 208/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7448 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 16-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN IRS
• Assessee Lawyers: P RANGA RAMANUJAM
• Keywords: Unexplained investment

Judgement Text

, (SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL, C (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO. 208/CHNY/2018 / ASSESSMENT YEAR : 2012-2013. R. MUNUSAMY, NO.834A, METTU STREET, AYAPAKKAM VILLAGE (POST) KALPAKKAM 603 102. [PAN AVPPM 5917N] VS. THE INCOME TAX OFFICER, NON CORPORATE CIRCLE 5(5), CHENNAI ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. P. RANGA RAMANUJAM, C.A. /RESPONDENT BY : SHRI. B. SAGADEVAN, IRS, JCIT. /DATE OF HEARING : 27-06-2018 ! /DATE OF PRONOUNCEMENT : 02-07-2018 % / O R D E R IN THIS APPEAL FILED BY THE ASSESSEE, WHICH IS DI RECTED AGAINST AN ORDER DATED 20.11.2017 OF COMMISSION ER OF INCOME-TAX (APPEALS)-5, CHENNAI, IT IS AGGRIEVED ON AN ADDITIO N OF D4,00,000/- CONSIDERED AS UNEXPLAINED INVESTMENTS WHICH WAS CO NFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ITA NO.208 /CHNY/2018 :- 2 -: 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSE E HAS CLAIMED A SUM OF D4,00,000/- UTILIZED BY IT FOR CO NSTRUCTION OF A HOUSE AT NO.150, A M GARDEN, VICHOOR VILLAGE, PONNERI, TH IRUVOTTIYUR, AS COMING OUT OF CASH BALANCE OF D5,63,762/- AVAILABL E WITH THE ASSESSEE, COMMISSION AND OTHER RECEIPTS RECORDED I N THE CASH BOOK. AS PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE WAS HAVING INCOME FROM RENTALS, COMMISSION AND AGRICULTURE. LD. AUTHO RISED REPRESENTATIVE SUBMITTED THAT IN THE BALANCE SHEET FILED BY THE ASSESSEE ALONGWITH ITS RETURN FOR IMPUGNED ASSESSME NT YEAR, CLOSING CASH BALANCE OF D5,59,608/- WAS SHOWN. CONTNETION O F THE LD. AUTHORISED REPRESENTATIVE WAS THAT THIS CLAIM WAS DISBELIEVED BY THE LOWER AUTHORITIES FOR NO REASON. AS PER THE LD. AUTHORISED REPRESENTATIVE, THE SAID CLOSING BALANCE, IF CONSI DERED, THE INVESTMENT IN CONSTRUCTION OF THE HOUSE STOOD EXPL AINED. 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. REASON WHY LD. ASS ESSING OFFICER MADE AN ADDITION OF D4,00,000/- APPEARS AT PARE (E) OF HIS ORDER WHICH IS REPRODUCED HEREUNDER:- ITA NO.208 /CHNY/2018 :- 3 -: ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASS ESSEE THAT IT WAS FOUND THAT HE HAS CONSTRUCTED A HOUSE CONSISTING OF GROUND FLOOR (SHOP) AND PT FLOOR (RESIDENTIAL HOUSE) AT NO.150, A M GARDEN, VICHOOR VILLAGE, PONN ERI, THIRUVOTTIYUR IN SURVEY NO.270/2 WITH AN AREA OF 456 SQ. FT.. ASSESSEE HAS ADMITTED IN HIS ANSWER 6(3) TO Q.NO.6 OF STATEMENT RECORDED ON 11.03.2016 THAT '/ HAVE CONSTRUCTED A HOUSE DUING THE F. Y.2011-12 CONSISTING OF GROUND FLOOR (SHOP) AND T' FLOOR (RESIDENTIAL HOUSE) AT NO. 150, A M GARDEN, VICHOOR VILLAGE, PONNERI, THIRUVOTTIYUR IN SURVEY NO.27012 WITH AN AREA OF 456 SQ.F [T., THE APPROXIMATE CONSTRUCTION COST WORKED OUT TO RS.4,OO,OOO/-. THE SOURCES FOR THIS CONSTRUCTION EXPENSES WERE MET OUT OF MY COMMISSION RECEIPTS. AT PRESENT, I AM NOT ABLE TO FURNISH THE DOCUMENTARY EVIDENCES FOR THE SOURCE S FOR THE CONSTRUCTION MADE . SINCE, THE ASSESSEE COULD NOT ABLE TO FURNISH THE DOCUMENTARY EVIDENCES FOR THE SOURCES OF CONSTRUCTI ON OUT OF COMMISSION RECEIPTS. THE ENTIRE AMOUNT INVESTED IN CONSTRUCTION OF RS.4,OO,OOO/- IS TREATED AS UNEXPLAINED INVESTMENT AND ADDED TO THE TOTAL INCOME. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD CONFIR MED THE ABOVE DISALLOWANCE CITING A REASON THAT ASSESSEE HAD FAIL ED TO FURNISH EVIDENCE FOR OPENING CASH BALANCE, COMMISSION REC EIVED AND OTHER RECEIPTS RECORDED IN THE CASH BOOK. RELEVANT PARA 9.4 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS REPRODUCED HEREUNDER:- HOWEVER THE A.R DID NOT FURNISH THE EVIDENCES FOR (I) OPENING CASH BALANCE OF 5,63,762/- CLAIMED AS ON 01.04.2011 (II) THE COMMISSION CLAIMED AS RECEIVED IN THE CASH BOOK AND (III) OTHER RECEIPTS AND PAYMENTS SHOWN IN THE CASH BOOK. ITA NO.208 /CHNY/2018 :- 4 -: ASSESSEE HAS PLACED BEFORE ME, COPY OF THE PROFIT A ND LOSS ACCOUNT AND BALANCE SHEET FILED BY IT, ALONG WITH ITS RETUR N FOR THE IMPUGNED ASSESSMENT YEAR. SAID BALANCE SHEET CLEARLY SHOW TH AT ASSESSEE HAD FOLLOWING AMOUNTS IN ITS CURRENT ASSET. CLOSING STOCK 5,59,664.00 CASH-IN-HAND 5,59,608.00 BANK ACCOUNTS 56.00 IT IS CLEAR FROM THE ABOVE THAT ASSESSEE HAD CASH S HOWN A BALANCE OF D5,59,608/- AS ON 31.03.2012. ASSESSEES INVESTMEN T OF D4,00,000/- FOR CONSTRUCTION OF THE BUILDING ONLY INDICATE THAT THE ACTUAL CASH BALANCE WAS D1,59,608/- ONLY AND NOT D5,59,608/-. IT CAN AT THE BEST BE CONSIDERED AS OVERSTATEMENT OF CASH BALANCE. IN MY OPINION, ASSESSEE WAS HAVING SUFFICIENT SOURCE FOR CONSTRUC TION OF A HOUSE AT VICHOOR VILLAGE, PONNERI, THIRUVOTTIYUR. I DO NOT FIND ANY REASON TO SUSTAIN THE ADDITION MADE BY THE LOWER AUTHORITIES. ADDITION STANDS DELETED. 5. THOUGH THERE IS A GROUND ASSAILING THE VALIDITY OF THE REOPENING, LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT HE WAS NOT ITA NO.208 /CHNY/2018 :- 5 -: PRESSING SUCH GROUND. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED ON MONDAY, THE 2 ND DAY OF JULY, 2018, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:2ND JULY, 2018 KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF