ACiT, Non Corporate Circle 10(1), Chennai V. T J Arumugam, Chennai

ITA 226/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6876 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 17-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS S VIJAYA PRABHA
• Keywords: Unexplained cash credit; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 40(a)(ia)

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.226/CHNY/2018 / ASSESSMENT YEAR: 2012-13 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 10(1), 121, MAHATMA GANDHI ROAD, CHENNAI-600 034. VS. SHRI T.J. ARUMUGAM, FLAT NO. 42, INDIAN FLATS, 34, EAST CLUB ROAD, SHENOY NAGAR, CHENNAI 600 030. [PAN: ACDPA5951H] ( /APPELLANT) ( /RESPONDENT) DEPARTMENT BY : MRS. S.VIJAYAPRABHA, JCIT ASSESSEE BY : NONE / DATE OF HEARING : 03.01.2019 /DATE OF PRONOUNCEMENT : 07.01.2019 / 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)-12, CHENNAI DATED 24.10.2017 RELEVANT TO THE ASSESSMENT YEAR 2012-13. THE GROUND RAISED BY THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] AS WELL AS DELETING THE ADDITION MADE ON ACCOUNT OF UNSECURED LOAN. I.T.A. NO. 226/CHNY/18 2 2. THE APPEAL FILED BY THE REVENUE IS DELAYED BY 12 DAYS, FOR WHICH, THE REVENUE HAS FILED PETITION FOR CONDONATION OF THE DELAY, TO WHICH; THE LD. COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY SERIOUS OBJECTION. CONSEQUENTLY, THE DELAY OF 12 DAYS IN FILING OF THE APPEAL STANDS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS A CONTRACTOR, FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 30.09.2012 ADMITTING INCOME OF .1,50,41,892/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE NOTICE UNDER SECTION 143(2) OF THE ACT DATED 23.09.2013 WAS DULY SERVED ON THE ASSESSEE. 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 .2,70,31,642/- AFTER MAKING VARIOUS ADDITIONS. 3.1 WITH REGARD TO THE ADDITION OF .87,61,227/- UNDER SECTION 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER CALLED FOR PARTY-WISE BREAK-UP OF INTEREST PAID BY THE ASSESSEE. HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY DETAILS. ACCORDINGLY, THE INTEREST PAYMENT AMOUNTING TO .87,61,227/- WAS DISALLOWED AND BROUGHT TO TAX. I.T.A. NO. 226/CHNY/18 3 3.2 SIMILARLY, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS TAKEN UNSECURED LOANS FROM VARIOUS INDIVIDUAL TO THE TUNE OF .10,76,763.92. WHEN CALLED FOR, THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING EVIDENCES AND PROOFS FOR THE ABOVE UNSECURED LOANS. ACCORDINGLY, THE ASSESSING OFFICER ADDED THE SAME AS UNEXPLAINED CREDITS. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BY CONSIDERING THE DETAILS OF INTEREST PAYMENT FURNISHED BY THE ASSESSEE, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE TO THE EXTENT OF .5,76,725.33 AND BALANCE WAS DELETED. SIMILARLY, BY CONSIDERING THE DETAILS OF UNSECURED LOANS, FURNISHED BY THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. NONE APPEARED ON BEHALF OF THE ASSESSEE. THE NOTICE SEND BY RPAD WAS RETURNED AS UNCLAIMED. HENCE, WE PROCEED TO DECIDE THE APPEAL ON MERITS 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 DEBITED .87,61,227/- AS INTEREST PAID TO THE FINANCIAL INSTITUTIONS. SINCE THE ASSESSEE COULD NOT FURNISH PARTY-WISE BREAK-UP OF INTEREST PAID, I.T.A. NO. 226/CHNY/18 4 THE ASSESSING OFFICER DISALLOWED THE SAME. HOWEVER, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED THE DETAILED BREAK-UP OF INTEREST PAID TO THE FINANCIAL INSTITUTIONS, ETC. AND BY CONSIDERING THE SAME, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO THE EXTENT OF .5,76,725.33 AND DELETED THE BALANCE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 6.1 WITH REGARD TO THE ADDITION MADE ON ACCOUNT OF UNSECURED LOANS, BY CONSIDERING THE BANK STATEMENT, SUBMISSIONS AND OTHER DETAILS FURNISHED BY THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION OF .10,76,764/-. 6.2 WHILE DELETING/RESTRICTING THE ADDITION(S) AS STATED ABOVE, WE FIND THAT THE LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER, WHICH IS IN CLEAR VIOLATION OF RULE 46A OF THE INCOME TAX RULES SINCE THE ASSESSING OFFICER HAD NO OCCASION TO EXAMINE THE DETAILS FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A). ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON BOTH THE ISSUES AND DIRECT HIM TO OBTAIN THE REMAND REPORT ON THE PARTICULARS FURNISHED BY THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, BOTH THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 226/CHNY/18 5 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 07 TH JANUARY, 2019 IN CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 07.01.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.