A.S.Senthil Kumar, Erode V. ITO, Erode

ITA 2157/CHNY/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4589 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 06-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2015
• Court: TRIBUNAL
• Department Lawyers: M M BHUSARI
• Assessee Lawyers: T VASUDEVAN
• Keywords: Unexplained cash credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . ! '# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.2157/MDS./2015 / ASSESSMENT YEAR : 2010-11 MR.A.S.SENTHIL KUMAR , PROP. SRI SHANMUGHA COMPUTERS, 11, KAMBAR STREET, TEACHERS COLONY, ERODE 638 011. VS. THE INCOME TAX OFFICER, WARD I(4), ERODE. [PAN AGQPS 1150 H ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.T.VASUDEVAN, ADVOCATE /RESPONDENT BY : MR.M M BHUSARI, CIT, D.R / DATE OF HEARING : 11.04 .2017 !' / DATE OF PRONOUNCEMENT : 05 .05 .2017 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-3, COIMBA TORE DATED 30.09.2015 AND PERTAINS TO ASSESSMENT YEAR 2010-1 1. ITA NO.2157 /MDS./2015 :- 2 -: 2. THE ONLY GROUND IS WITH REGARD TO CONFIRMING THE ADDITION OF ` 36,03,750/- U/S.68 OF THE ACT BEING THE CREDIT IN T HE NAME OF ASSESSEE HUF. 3. THE FACTS OF THE CASE ARE THAT THERE WAS A CRED IT IN THE NAME OF A.S.SENTHILKUMART-HUF AT ` 36,03,750/-. THE ASSESSEE EXPLAINED THAT THE SAID AMOUNT HAS BEEN RECEIVED FROM YEAR TO YEAR FROM ASSESSEES HUF AND THE HUF HAVING THE INCOME FROM A GRICULTURAL OPERATIONS OWNED BY IT. THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME FROM PAST SO MANY YEARS. HENCE, THE AO DOUBT ED THE GENUINENESS OF THE TRANSACTIONS AND ADDED THE ENTIR E AMOUNT OF ` 36,03,750/- STANDING IN THE NAME OF ASSESSEE-HUF. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ADDITION OF ` 36,03,750/- AND ALSO OBSERVED THAT AN AMOUNT OF RS.1,15,000/- STATED TO HAVE BEEN PAID TO HUF AS INTEREST IS ALSO DISALLOWED AS HUF AS IT IS NOT GE NUINE. IN ADDITION TO THIS, HE HAS GIVEN A DIRECTION THAT EVEN THE REMIS SION OF LIABILITY U/S.41 OF THE ACT COULD ALSO BE APPLIED. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN PLEA OF THE LD.A.R IS THAT ASSESSE EHUF IS OWNING THE AGRICULTURAL PROPERTY AND INCOME GENERATED FROM AGR ICULTURAL OPERATIONS HAS BEEN ADVANCED TO THE ASSESSEE FROM YEAR TO YEAR. THE ENTIRE BALANCE OUTSTANDING IN THE NAME OF HUF AS CR EDIT BALANCE ITA NO.2157 /MDS./2015 :- 3 -: CANNOT BE ADDED IN THE HANDS OF ASSESSEE. HE SUBMIT TED THAT ONLY THE CREDITS EMERGED IN THE ASSESSMENT YEAR UNDER CONSID ERATION COULD BE TREATED AS UNEXPLAINED CREDIT. FOR THIS PURPOSE, H E PLACED RELIANCE ON THE ORDER OF TRIBUNAL IN CASE OF M/S.SOORAJ LEATHER S IN ITA NO.305/MDS./2016 VIDE ORDER DATED 22.04.2016. FURT HER,HE SUBMITTED THAT THE CIT(A) IS NOT JUSTIFIED IN OBSERVING THAT SEC.41 COULD BE INVOKED ON ACCOUNT OF REMISSION OF LIABILITY. HE S UBMITTED THAT IT IS NOT THE TRADE LIABILITY SO AS TO INVOKE THE PROVISIONS OF THE SECTION 41(1) OF THE ACT AND ALSO THERE IS NO CESSATION OF LIABILITY AND IF THE CREDIT BALANCE IS CONTINUED TO BE EXIST FROM YEAR TO YEAR. 5. LD.D.R STRONGLY SUPPORTED THE ORDER OF LD.CIT(A ) AND SUBMITTED THAT THE ASSESSEE MISERABLY FAILED TO PRO VE THE IDENTITY OF THE PARTIES, GENUINENESS OF THE TRANSACTION AND ALS O CAPACITY OF HUF TO ADVANCE MONEY TO THE ASSESSEE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN ISSUE HEREIN IS THAT WHETHER MR. A .S.SENTHILKUMART- HUF IS OWNING THE AGRICULTURAL PROPERTY SO AS TO EA RN AGRICULTURAL INCOME AND LEND THE SAME TO THE ASSESSEE. THE LOWER AUTHROTIIES HAVE NOT EXAMINED THE OWNING OF THE AGRICULTURAL PROPERT Y FOR ASSESSEES HUF. HENCE, THE ASSESSEE FIRST OF ALL HAS TO PROVE THE EXISTENCE OF HUF AND OWNING OF AGRICULTURAL PROPERTY BY THE SAID HUF AND EARNING OF INCOME FROM AGRICULTURAL OPERATIONS. WITHOUT ESTAB LISHING THESE FACTS, ITA NO.2157 /MDS./2015 :- 4 -: WE ARE NOT IN A POSITION TO APPRECIATE THE ARGUMENT OF LD.A.R THAT THE ASSESSEE HUF IS HAVING LAND. AS THE SAID HUF HAS N O PAN, BANK ACCOUNT OR ANY DOCUMENT TO HOLD THAT SUCH A HUF IS EXISTING AND OWNING AGRICULTURAL PROPERTY. HENCE, IN THE INTERES T OF JUSTICE, WE REMIT THE ENTIRE ISSUE IN DISPUTE TO THE FILE OF AO TO CA RRY OUT THE NECESSARY ENQUIRY AND DECIDE THEREUPON. AS WE HAVE REMITTED T HE ENTIRE ISSUE IN DISPUTE TO THE FILE OF AO, WE ARE NOT COMMENTING AN Y ISUSE WITH REFERENCE IGNORING OF SEC.41(1) AT THIS STAGE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 05 TH MAY, 2017, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) ! / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 05 TH MAY, 2017. K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF