N.Sakthivel, Erode V. ITO, Erode

ITA 2152/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90341 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: S SRIDHAR
• Section: 142(1); 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO. 2152/MDS/2014 ( / ASSESSMENT YEAR: 2005-06) MR. N.SAKTHIVEL, PROP.M/S. SRI AMMAN TIMBER DEPOT, 39, JEEVANANTHAM STREET, KOLLAMPALAYAM, ERODE-638 002. VS INCOME TAX OFFICER, WARD-I(4), ERODE. PAN: ANSPS7844R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. N.MADHAVAN, JCIT /DATE OF HEARING : 26 TH MARCH, 2015 /DATE OF PRONOUNCEMENT : 20 TH MAY, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBAT ORE DATED 27.06.2014 FOR THE ASSESSMENT YEAR 2005-06. 2. THE FIRST ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SIMPL Y ACCEPTING THE ASSESSMENT ORDER WITHOUT GIVING SUFF ICIENT OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THAT SU PPRESSED SALE INCLUDES SALES ALREADY ADMITTED, CREDITS ON A CCOUNT OF CLOSURE OF DEPOSITS ETC. THE ASSESSING OFFICER WHI LE 2 ITA NO.2152/MDS/2014 COMPLETING THE ASSESSMENT UNDER SECTION 144 OF THE ACT ON 31.03.2013 MADE ADDITION OF ` 3,83,325/- BEING 6% OF DEPOSITS OF ` 63,88,766/- APPEARING IN TAMILNAD MERCANTILE BANK LTD. STATING THAT THESE DEPOSITS ESTABLISH AND CONFIRM THAT THESE ARE NOTHING BUT SALES SUPPRESSION AS THE ASSESSEE IN THE AFFIDAVIT STATED THAT NOW AND THEN SALE PRO CEEDS FROM HIS RETAIL BUSINESS OF TIMBER WAS DEPOSITED IN TAMI LNAD MERCANTILE BANK. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION STATING THAT ASSES SEE HAS NOT SUBMITTED ANY DETAILS REGARDING SUPPRESSED SALE S AND ASSESSING OFFICER ELABORATELY DISCUSSED IN THE ORDE R. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT ADDITION M ADE ON ACCOUNT OF SUPPRESSED SALES WERE BASED ON THE DE POSITS MADE IN THE TAMILNAD MERCANTILE BANK. COUNSEL SUBMI TS THAT THE SALES INCLUDE SALES ALREADY ADMITTED AND CREDIT S ON ACCOUNT OF CLOSURE OF DEPOSITS ETC. HE SUBMITS THA T COMMISSIONER OF INCOME TAX (APPEALS) SIMPLY ACCEPTE D THE ASSESSMENT ORDER AND THE ASSESSING OFFICER PASSED O RDER UNDER SECTION 144 OF THE ACT WITHOUT MUCH DISCUSSIO N AND IN THE ABSENCE OF ANY DETAILS BEFORE HIM. 3 ITA NO.2152/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES. 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. WE FIND THAT THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER AS THE ASSESSMENT ORDER WAS PASSED UNDER SECTION 144 OF THE ACT. THE COMMISSIONER OF I NCOME TAX (APPEALS) ALSO FAILED TO ADDRESS THIS ISSUE. TH US, IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE BACK TO TH E FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE I SSUE AFRESH IN ACCORDANCE WITH LAW, AFTER PROVIDING ADEQUATE OP PORTUNITY TO THE ASSESSEE. 6. THE NEXT ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT G IVING SET OFF FOR THE SOURCE FOR DEPOSITS BEING LOANS RE CEIVED BY THE ASSESSEE WHICH LOANS HAVE BEEN ACCEPTED BY THE ASSE SSING OFFICER. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT MADE ADDITION OF ` 36,83,041/- AS UNEXPLAINED DEPOSITS. ON APPEAL, COMMISSIONER OF INCOME TAX (AP PEALS) DIRECTED THE ASSESSING OFFICER TO DELETE ` 13,00,000/- OUT OF ` 36,83,041/- OBSERVING THAT THESE DEPOSITS RELATE TO 4 ITA NO.2152/MDS/2014 ASSESSMENT YEAR 2004-05 AND NOT TO THE ASSESSMENT Y EAR UNDER CONSIDERATION I.E. 2005-06. HE FURTHER DIRECT ED THE ASSESSING OFFICER TO EXAMINE THE DUPLICATION OF DEP OSITS ADDED DURING THIS ASSESSMENT YEAR IN RESPECT OF ` 7,35,686/-. IT WAS THE SUBMISSION BEFORE COMMISSIONER OF INCOME TAX (APPEALS) THAT LOANS TO THE EXTENT OF ` 21,70,000/- WERE OBTAINED AND THEY WERE DEPOSITED IN THE BANK ACCOUN T AND THIS FACT WAS ALSO RECORDED BY THE ASSESSING OFFICE R AND ACCEPTED IN THE ASSESSMENT ORDER. BUT COUNSEL SUBMI TS THAT SUCH LOAN WAS NOT ALLOWED TO CONSIDER AS SOURCE FOR THE DEPOSITS IN THE BANK FOR THE REASON THAT THESE AMOU NTS WERE NOT ACCOUNTED IN THE BOOKS OF ACCOUNT. THEREFORE, C OUNSEL SUBMITS THAT THE LOAN AMOUNT SHOULD BE CONSIDERED A S SOURCE FOR DEPOSITS MADE IN THE BANK ACCOUNT AND SHOULD BE ALLOWED SET OFF. 7. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDERS OF LOWER AUTHORITIES. 8. WE FIND THAT THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE ACT. IT IS A FINDING OF THE ASSE SSING OFFICER THAT ASSESSEE HAS FAILED TO PRODUCE BOOKS OF ACCOUN T AND DOCUMENTS CALLED FOR IN THE NOTICE ISSUED UNDER SEC TION 5 ITA NO.2152/MDS/2014 142(1) AND THEREFORE ASSESSMENT WAS MADE UNDER SEC TION 144 OF THE ACT. IN SUCH CIRCUMSTANCES, IN THE ABSEN CE OF VERIFICATION OF BOOKS OF ACCOUNT, WE ARE NOT ABLE T O UNDERSTAND AS TO HOW THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THESE LOANS WERE NOT RECORDED IN TH E BOOKS OF ACCOUNT BY THE ASSESSEE. IN OUR VIEW, THESE ASPECTS HAVE TO BE EXAMINED BY THE ASSESSING OFFICER AFRESH. THUS, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER WITH A DIRECTION TO EXAMINE THIS ISSUE AFRESH IN ACCORDANC E WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSE E. 9. THE LAST ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT G IVING SET OFF FOR INTEREST OF ` 77,686/- ON THE LOANS UTILIZED FOR IN BANK DEPOSITS, SOURCE FOR WHICH THE ASSESSING OFFIC ER HAS BEEN ACCEPTED. THIS ISSUE ALSO, IN OUR VIEW, HAS NOT BEEN EXAMINED BY THE LOWER AUTHORITIES AND THEREFORE, WE DIRECT THE ASSESSING OFFICER TO DECIDE THIS ISSUE ALSO AFRESH IN ACCORDANCE WITH LAW I.E. WHETHER THE ASSESSEE IS EL IGIBLE FOR SET OFF OR NOT, AFTER PROVIDING ADEQUATE OPPORTUNIT Y TO THE ASSESSEE. 6 ITA NO.2152/MDS/2014 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DAY OF MAY, 2015 . SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 20 TH MAY, 2015 SOMU ./ 0/ / COPY TO: 1. APPELLANT 2. RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .