S.Eswari, CHENNAI V. DCIT, Salem

ITA 2210/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9767 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1997-1998
• Appeal Filed On: 01-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Onus to prove

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2210/MDS/2015 ( )( / ASSESSMENT YEAR : 1997-98 SMT. S. EASWARI, C/O SHRI S. SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. PAN : AACPE 7185 N V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, SALEM. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI SASIKUMAR, JCIT 1 / 2% / DATE OF HEARING : 23.02.2016 3') / 2% / DATE OF PRONOUNCEMENT : 01.04.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-18, CHENNA I, DATED 28.09.2015 AND PERTAINS TO ASSESSMENT YEAR 1997-98. 2 I.T.A. NO.2210/MDS/15 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS WIT H REGARD TO ADDITION OF ` 3,00,000/-. ACCORDING TO THE LD. COUNSEL, THE ASSE SSEE HAS FILED NECESSARY CONFIRMATION LETTERS FROM THE CREDITORS. THE ASSESSEE HAS BORROWED A SUM OF ` 1,50,000/- FROM HIS FATHER SHRI S. EKAMBARAM AND ANOTHER SUM OF ` 1,50,000/- FROM A CLOSE RELATIVE SHRI S. SUKUMARAN. THE NECESSARY SOURCE FOR ADVANC ING THE MONEY BY THE RESPECTIVE CREDITORS WAS FILED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER, HOWEVER, FAILED TO CONSIDER THE MATERIAL FILED BEFORE HIM. ACCORDING TO THE LD. CO UNSEL, THE CIT(APPEALS) IN THE FIRST ROUND OF LITIGATION DIREC TED THE ASSESSING OFFICER TO CROSS-EXAMINE THE LOAN CREDITORS. HOWEV ER, THE ASSESSING OFFICER UNDERSTOOD THE ORDER OF THE CIT(A PPEALS) THAT THERE WAS NO DIRECTION FROM THE CIT(APPEALS) TO RE- EXAMINE THE ASSESSEES CLAIM WITH REGARD TO SOURCE. ACCORDING TO THE LD. COUNSEL, IT IS FOR THE ASSESSING OFFICER TO EXAMINE THE SOURCE OF THE CREDITORS, IDENTITY OF CREDITORS, THEIR CREDITWORTH INESS AND GENUINENESS OF THE TRANSACTION. SINCE SUCH AN EXER CISE WAS NOT DONE BY THE ASSESSING OFFICER, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) COMMITTED AN ERROR BY CONFIRMING THE A DDITION MADE BY THE ASSESSING OFFICER. 3 I.T.A. NO.2210/MDS/15 3. ON THE CONTRARY, SHRI SASIKUMAR, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT IN THE EARLIER ROUND OF LITIGATION, THE CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO PROV IDE AN OPPORTUNITY TO CROSS-EXAMINE THE CREDITORS BY THE A SSESSEE. INSPITE OF THE OPPORTUNITY GIVEN BY THE ASSESSING OFFICER, THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITY FOR CROSS-EXAMINATION O F THE CREDITORS. SINCE THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITY, THE ASSESSING OFFICER HAS RIGHTLY FOUND THAT THE SOURCE OF CREDIT ORS COULD NOT BE EXAMINED. THEREFORE, THE ASSESSING OFFICER RIGHTLY CONFIRMED THE ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN RESPECT OF THE CREDITS, IT IS MANDATORY ON THE PART OF THE ASSESSI NG OFFICER TO EXAMINE AND IDENTIFY THE CREDITORS, THEIR CREDITWOR THINESS AND GENUINENESS OF THE TRANSACTION. IN THE EARLIER ROU ND OF LITIGATION, THE CIT(APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE FOR CROSS-EXAMINATION O F CREDITORS. IT DOES NOT MEAN THAT THE ASSESSING OFFICER SHALL NOT RE-EXAMINE THE SOURCE OF CREDITORS FOR ADVANCING MONEY TO THE ASSE SSEE. WHAT WAS ADVANCED BY SHRI S. EKAMBARAM IS ONLY ` 1,50,000/- AND 4 I.T.A. NO.2210/MDS/15 ANOTHER SUM OF ` 1,50,000/- BY SHRI S. SUKUMARAN. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSING OFFICER HAS TO EXAMINE THE CREDITWORTHINESS OF THE CREDITORS FO R ADVANCING MONEY TO THE ASSESSEE. UNFORTUNATELY, THE ASSESSIN G OFFICER FAILED TO DO SO. UNDER NORMAL CIRCUMSTANCES, THIS TRIBUNA L WOULD DIRECT THE ASSESSING OFFICER TO RE-EXAMINE THE MATTER. HO WEVER, THIS TRIBUNAL IS NOT DOING SO IN THIS CASE, SINCE THE AS SESSMENT YEAR UNDER CONSIDERATION IS 1997-98 AND THIS BEING SECON D ROUND OF LITIGATION. MOREOVER, IN VIEW OF SMALLNESS OF THE AMOUNT INVOLVED IN THIS APPEAL, REMITTING BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER MAY NOT BE NECESSARY. THEREFORE, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT SINCE THE CREDITWORTHINESS OF THE CREDITORS WAS NOT EXAMINED BY THE ASSESSING OFFICER INSPITE O F THE FACT THAT THE ASSESSEE HAS FURNISHED THE CONFIRMATION LETTERS FROM THE RESPECTIVE CREDITORS, THE BURDEN OF PROOF LIES ON T HE SHOULDER OF THE ASSESSING OFFICER. SINCE THE ASSESSING OFFICER HAS NOT EXAMINED THE CONFIRMATION LETTERS FILED BY THE ASSESSEE, THE ADDITION CANNOT BE SUSTAINED IN THE HANDS OF THE ASSESSEE. ACCORDINGL Y, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ADDITIO N OF ` 3,00,000/- MADE BY THE ASSESSING OFFICER IS DELETED. 5 I.T.A. NO.2210/MDS/15 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 1 ST APRIL, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 1 ST APRIL, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-18, CHENNAI-34 4. PRINCIPAL CIT (CENTRAL) 2, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.