DCIT Corporate Circle 3(2), CHENNAI V. Chakrapani Shanker, CHENNAI

ITA 2184/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6946 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 23-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D. KUMUDHA
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 68; 40A(3); 143(3); 133(6); 143(2)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.2184/CHNY/2018 / ASSESSMENT YEAR: 2015-16 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(2), CHENNAI-600 034. VS. SHRI CHAKRAPANI SHANKER, NO. 65, ALWARPET STREET, ALWARPET, CHENNAI-600 018. [PAN: AAKPS4107N] ( /APPELLANT) ( /RESPONDENT) DEPARTMENT BY : DR. D. KUMUDHA, JCIT ASSESSEE BY : NONE / DATE OF HEARING : 01.01.2019 /DATE OF PRONOUNCEMENT : 08.01.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI DATED 12.04.2018 RELEVANT TO THE ASSESSMENT YEAR 2015-16. THE GROUND RAISED BY THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE VARIOUS ADDITIONS MADE UNDER SECTION 68 AS WELL AS SECTION 40A(3) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. 2. THE APPEAL FILED BY THE REVENUE IS DELAYED BY ONE DAY, FOR WHICH, THE REVENUE HAS FILED PETITION FOR CONDONATION OF THE DELAY, TO WHICH; THE LD. I.T.A. NO. 2184/CHNY/18 2 COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY SERIOUS OBJECTION. CONSEQUENTLY, THE DELAY OF ONE DAY IN FILING OF THE APPEAL STANDS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2015-16 ON [WRONGLY MENTIONED ON 31.09.2015] ADMITTING INCOME OF .10,40,400/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] DATED 04.08.2016 WAS DULY SERVED ON THE ASSESSEE ON 10.08.2016. AFTER VERIFICATION OF DETAILS FURNISHED BY THE ASSESSEE AND CONSIDERING THE SUBMISSIONS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT .1,15,73,193/- AFTER MAKING VARIOUS ADDITIONS. 3.1 WITH REGARD TO THE DISALLOWANCE OF .7,54,598/- UNDER SECTION 40A(3) OF THE ACT, FROM THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED THE ABOVE EXPENSES UNDER THE HEAD TAMBARAM PROJECT EXPENSES AND THE ENTIRE EXPENSES WERE INCURRED IN CASH. THUS, THE ASSESSING OFFICER DISALLOWED THE ABOVE EXPENSES AND BROUGHT TO TAX. 3.2 WITH REGARD TO THE ADDITIONS UNDER SECTION 68 OF THE ACT, FROM THE BALANCE SHEET, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS TAKEN I.T.A. NO. 2184/CHNY/18 3 HUGE LOANS TO THE TUNE OF .5,60,40,681/-. FOR THE PURPOSE OF CONFIRMATION OF LOANS, AGAINST THE NOTICES UNDER SECTION 133(6) OF THE ACT, THE LOAN LENDER SHRI R.S. SENTHIL KUMAR AGAINST WHOM A LOAN AMOUNT OF .38,11,180/- WAS SHOWN AS PAYABLE HAS NOT GIVEN ANY CONFIRMATION. SIMILARLY, UNDER THE HEAD SUNDRY CREDITORS, .57,50,000/- WAS SHOWN AS PAYABLE TO ONE SHRI HARISH. AGAINST THE NOTICE, SHRI HARISH HAS CONFIRMED THAT THERE WERE NO TRANSACTIONS WITH SUCH INDIVIDUAL DURING THE YEAR. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER CALLED FOR BANK ACCOUNT STATEMENT SHOWING RECEIPT OF LOANS FROM SHRI HARISH. ON SCRUTINY OF THE BANK ACCOUNT STATEMENT, THE ASSESSING OFFICER FOUND THAT THERE WAS NO CREDIT IN THE ACCOUNT OF SHRI C. SHANKAR BY NAME OF SHRI HARISH. BEFORE THE ASSESSING OFFICER, THE AR OF THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT WAS RECEIVED IN THE BANK ACCOUNT FROM THE RELATIVES OF SHRI HARISH AND SINCE IT WAS ROUTED THROUGH HIM, IT WAS ACCOUNTED IN HIS NAME. HOWEVER, SINCE SHRI HARISH HAS DENIED THE GIVING OF ANY SUCH LOAN TO THE ASSESSEE, THE ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED CASH CREDIT AND BROUGHT TO TAX. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BY CONSIDERING THE SUBMISSIONS, LEDGER EXTRACTS, CONFIRMATION FROM THE LOAN CREDITOR, ETC. THE LD. CIT(A) DELETED BOTH THE ADDITIONS MADE UNDER SECTION 40A(3) AS WELL AS UNDER SECTION 68 OF THE ACT. I.T.A. NO. 2184/CHNY/18 4 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE, RPAD ON RECORD. HENCE, WE PROCEED TO DECIDE THE APPEAL AFTER HEARING THE LD. DR. 6. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE HAS CLAIMED THE ABOVE EXPENSES AND SINCE THE ENTIRE EXPENSES UNDER THE HEAD TAMBARAM PROJECT EXPENSES WERE INCURRED IN CASH, THE ASSESSING OFFICER DISALLOWED THE SAME. FROM THE LEDGER EXTRACTS FILED BY THE ASSESSEE, THE LD. CIT(A) HAS OBSERVED THAT THERE IS NO SPECIFIC TRUTH TO HOLD THAT WAGES HAVE BEEN PAID IN EXCESS OF .20,000/- ON ONE OCCASION AND ACCORDINGLY, HE DELETED THE ADDITION MADE UNDER SECTION 40A(3) OF THE ACT. WHILE DOING SO, WE FIND THAT THE LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER, WHICH IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES. 6.1 WITH REGARD TO THE ADDITIONS UNDER SECTION 68 OF THE ACT, SINCE THE ASSESSEE COULD NOT FILE CONFIRMATION OF LOAN RECEIVED FROM SHRI SENTHIL KUMAR, THE ASSESSING OFFICER MADE ADDITION OF .38,11,180/- UNDER SECTION 40A(3) OF THE ACT. DURING THE COURSE OF APPELLATE PROCEEDINGS, AS THE ASSESSEE FILED CONFIRMATION LETTER FURNISHED BY SHRI SENTHIL KUMAR, THE LD. CIT(A) DELETED THE ADDITION OF .38,11,180/-. WHILE DOING SO, WE FIND THAT THE I.T.A. NO. 2184/CHNY/18 5 LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER, WHICH IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES. 6.2 WITH REGARD TO THE ADDITION OF .57,50,000/-, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THE RECEIPT OF .35,00,000/- FROM SHRI BHARAT M. SHAH [PAN: AALPS3098M] ON 03.02.2015 AND OF .22,50,000/- FROM PRIYANKA H. SHAH [PAN: BUZPP3409G] ON 05.02.2015. THE LD. CIT(A) OBSERVED THAT THE AMOUNTS RECEIVED FROM THESE TWO PARTIES HAVE BEEN RECORDED IN THE NAME OF SHRI HARISH SHAH, A MONEY LENDER SYNDICATE HEAD, FOR .57,50,000/- IN THE BOOKS OF THE ASSESSEE. SINCE THE AMOUNTS HAVE BEEN RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE ON RESPECTIVE DATES THROUGH RTGS, THE LD. CIT(A) DELETED THE ADDITIONS MADE UNDER SECTION 68 OF THE ACT. WHILE DOING SO, WE FIND THAT THE LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER, WHICH IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ABOVE ISSUES AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER AS WELL AS AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FOR REBUTTAL. ALL THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 2184/CHNY/18 6 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 08 TH JANUARY, 2019 IN CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 08.01.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.