S.N.Damani Holdings Pvt Ltd., CHENNAI V. ACIT Central Circle 1(3), CHENNAI

ITA 2140/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4267 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 16-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Keywords: Set aside
• Section: 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2140/CHNY/2018 ( )( / ASSESSMENT YEAR : 2015-16 M/S S.N. DAMANI HOLDINGS PVT. LTD., C/O SHRI T.N. SEETHARAMAN, ADVOCATE, #384 (OLD NO.196), LLOYDS ROAD, CHENNAI - 600 086. PAN : AALCS 8356 H V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(3), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI SAILENDRA MAMIDI, PCIT 1 / 2$ / DATE OF HEARING : 08.04.2019 34) / 2$ / DATE OF PRONOUNCEMENT : 10.05.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -18, CHENN AI, DATED 04.06.2018 AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2. SHRI T.N. SEETHARAMAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THERE WAS A SEARCH CONDUCTED IN THE PREMISES OF THE 2 I.T.A. NO.2140/CHNY/18 ASSESSEE ON 20.11.2014. DURING THE COURSE OF SEARC H, ACCORDING TO THE LD. COUNSEL, THE REVENUE AUTHORITIES FOUND 37,31,540/- IN THE OFFICE PREMISES OF THE ASSESSEE-COMPANY. SMT. S. K ALYANI, ONE OF THE DIRECTORS OF THE ASSESSEE-COMPANY WAS EXAMINED AND SHE EXPLAINED ENTIRE SOURCE FOR THE CASH FOUND IN THE P REMISES OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE ASSESS ING OFFICER WITHOUT CONSIDERING THE STATEMENT RECORDED FROM SMT . S. KALYANI, MADE ADDITION OF 37,00,000/-. ON APPEAL BY THE ASSESSEE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) ACCE PTED THE EXPLANATION OF THE ASSESSEE TO THE EXTENT OF 20,63,348/- WHEREVER THE RETURN WAS FILED AND THE BALANCE AMOUNT OF 16,36,652/- WAS CONFIRMED BY THE CIT(APPEALS). REFERRING TO THE OR DER OF THE CIT(APPEALS), THE LD.COUNSEL SUBMITTED THAT EVEN TH OUGH THE CIT(APPEALS) FOUND THAT THE AVAILABILITY OF CASH WA S EXPLAINED, HE FAILED TO ACCEPT THE CLAIM OF THE ASSESSEE IN ENTIR ETY WITHOUT ANY REASON. THE LD.COUNSEL INVITED OUR ATTENTION TO TH E STATEMENT RECORDED FROM SMT. S. KALYANI, DIRECTOR OF THE ASSE SSEE-COMPANY AND ALSO THE STATEMENT FILED TO ESTABLISH THE CASH AVAILABILITY WITH VARIOUS PERSONS ON THE DATE OF SEARCH. 3 I.T.A. NO.2140/CHNY/18 3. ON THE CONTRARY, SHRI SAILENDRA MAMIDI, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ASSESSE E COULD NOT ESTABLISH THE AVAILABILITY OF CASH ON THE DATE OF S EARCH AS CLAIMED BY SMT. KALYANI IN HER STATEMENT. SINCE THE ASSESSEE CLAIMED THAT THE AVAILABILITY OF FUNDS WAS RECORDED IN THE BOOKS OF VARIOUS PERSONS, ACCORDING TO THE LD. D.R., THE MATTER MAY BE REMITT ED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 4. BY WAY OF REJOINDER, THE LD.COUNSEL FOR THE ASSE SSEE SUBMITTED THAT HE MAY NOT HAVE ANY OBJECTION TO REM IT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON. ON A QUERY FROM THE BENCH WHETHER THE ASSESSEE IS FILING ANY R ECONCILIATION STATEMENT TO SUPPORT THE AVAILABILITY OF FUNDS ON T HE BASIS OF THE BOOKS OF ACCOUNT? THE LD.COUNSEL VERY FAIRLY SUBMIT TED THAT THE MATTER CAN BE RE-EXAMINED BY THE ASSESSING OFFICER. 5. HAVING HEARD THE LD.COUNSEL FOR THE ASSESSEE AND THE LD. D.R., THIS TRIBUNAL FINDS THAT SMT. S. KALYANI, ONE OF THE DIRECTORS OF THE ASSESSEE-COMPANY EXPLAINED BEFORE THE DEPUTY DI RECTOR OF INCOME TAX (INVESTIGATION) THE AVAILABILITY OF CASH TO THE EXTENT OF 36,37,794/- AND SHE ALSO APPEARS TO HAVE EXPLAINED THAT THE DIFFERENCE WAS ONLY 93,746/-. FOR THE PURPOSE OF CONVENIENCE, WE 4 I.T.A. NO.2140/CHNY/18 ARE REPRODUCING QUESTION NO.7 PUT TO SMT. KALYANI, THE DIRECTOR AND HER ANSWER AVAILABLE ON PAGE 6 OF THE PAPER-BOOK, A S FOLLOWS:- 7. IN THE ABSENCE OF PROPER CASH BOOK WHY THE ENTIRE CASH AMOUNT OF 37,31,540/- SHOULD NOT BE SEIZED FOR THE FOLLOWING REASONS? (1) MAINTAINING THE INDIVIDUAL ACCOUNTS AT OFFICE PREMI SES (2) KEEPING 15 LAKHS IN THE ACCOUNTS OF M/S S.N. DAMAN INFRA PVT. LTD., AS DORMANT FOR MORE THAN TWO YEARS. (3) ABSENCE OF PROPER BOOKS OF ACCOUNTS TO JUSTIFY THE CASH ( 37,31,540/-) AND AN EXCESS CASH OF 93,746/- FOUND. ANS . SIR, AS I REPLIED TO THE QUESTION NO.5 & 6, I MAINT AIN ALL THE IT RELATED PARTICULARS IN RESPECT OF INDIVIDUALS AN D COMPANIES IN OFFICE ONLY. EVERYTHING IS MAINTAINED AND UPDATED IN TALLY FOR IT PURPOSES. AS PER OUR CASH BALANCE IN TALLY FOR ALL OUR ASSESSEES PUT TOGETHER COMING TO 36,37,794/- AND THERE WAS ONLY A DIFFERENCE OF 93,746/- WHICH TO BE PAID FOR THE EXPENDITURE INCURRED TOWARDS OUR BUSINESS. 6. THE ASSESSEE HAS ALSO GIVEN THE DETAILS OF CASH AVAILABILITY AS ON 01.04.2014 FROM VARIOUS PERSONS. THE DETAILS FURNISHED BY THE ASSESSEE, WHICH IS AVAILABLE AT PAGE 10 OF THE PAPER-BOOK, READ AS FOLLOWS:- NAME OPENING CASH AS ON 01.04.2014 CASH SEIZED TRANSFER DATE TRANSFERRED TO HOLDINGS RECEIPT CASH CLOSING BALANCE AS ON 31/03/2015 CASH DEPOSITED INTO BANK ON 01/03/2016 CASH AS ON 31/03/2016 R N DAMANI 4,38,317.00 20/11/2014 4,38,317.00 1,68,000.00 1,68 ,000.00 1,68,000.00 - KALAPANA R DAMANI 2,11,170.48 20/11/2014 2,11,170.48 1,18,600.00 1,18 ,600.00 1,18,600.00 - G N DAMANI 4,04,475.60 20/11/2014 3,08,475.60 - 96,000.00 96,0 00.00 - 5 I.T.A. NO.2140/CHNY/18 MITA G DAMANI 4,82,328.00 20/11/2014 4,22,328.00 1,32,000.00 1,92 ,000.00 1,92,000.00 - AMI 7,578.00 20/11/2014 7,578.00 - - - - NITESH 1,63,557.43 20/11/2014 1,45,557.43 18,000.00 36,000.00 36,000.00 - NITESH DRAWINGS - 20/11/2014 97,078.00 - - - - MITUL 13,727.74 20/11/2014 13,727.74 66,000.00 66,0 00.00 66,000.00 - GND HUF 4,52,627.00 20/11/2014 4,52,627.00 - - - - RND HUF 1,05,040.99 20/11/2014 1,05,040.99 - - - - S N DAMANI INFRA P. LTD. 15,29,742.00 20/11/2014 14,98,103.00 - 31,639.00 31 ,639.00 - TOTAL 38,08,564.24 37,00,003.24 5,02,600.00 7,08,2 39.00 7,08,239.00 - 7. FROM THE ABOVE, IT IS NOT KNOWN HOW MUCH FUNDS W ERE AVAILABLE AS PER THE BOOKS OF ACCOUNT AS ON 20.11.2 014. THE LD.COUNSEL FOR THE ASSESSEE CLARIFIED THAT THE ASSE SSING OFFICER COULD NOT VERIFY THE AVAILABILITY OF FUNDS ON THE D ATE OF SEARCH AS PER THE BOOKS. IN VIEW OF THE ABOVE, ORDERS OF BOTH TH E AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTE D BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SH ALL RE-EXAMINE THE MATTER IN THE LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND FIND OUT THE AVAILABILITY OF FUNDS IN THE BOOKS OF VARIOUS PERSONS AS CLAIMED BY THE ASSESSEE AS ON 20 .11.2014. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 I.T.A. NO.2140/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 10 TH MAY, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 10 TH MAY, 2019. KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A)-18, CHENNAI-34 4. PRINCIPAL CIT, CENTRAL-1, CHENNAI 5. 8; -2 /DR 6. <( = /GF.