Muthukumarasamy Durai, CHENNAI V. ITO Non Corporate Ward 7(4), CHENNAI

ITA 2491/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8901 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 28-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANATH KUMAR RAHA
• Assessee Lawyers: K MEENAKSHISUNDARAM ITP
• Keywords: Set aside
• Section: 44AD

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL D SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NO.2491/CHNY/2018 # $%# / ASSESSMENT YEAR : 2011-12 SHRI MUTHUKUMARASAMY DURAI, NO.4, KODIMALAR KUDIL, CHURCH CROSS STREET, THANGAM COLONY, ANNA NAGAR, CHENNAI - 600 040. PAN : AOLPM 5072 K V. THE INCOME TAX OFFICER, NON CORPORATE WARD 7(4), CHENNAI. ('(/ APPELLANT) ()*'(/ RESPONDENT) '( + , / APPELLANT BY : SHRI K. MEENAKSHISUNDARAM, ITP )*'( + , / RESPONDENT BY : SHRI SANATH KUMAR RAHA, JCIT - $ + ./ / DATE OF HEARING :03.07.2019 01% + ./ / DATE OF PRONOUNCEMENT : 09.07.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -7, CHENNAI, D ATED 29.06.2018 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI K. MEENAKSHISUNDARAM, THE LD. REPRESENTATIV E FOR THE ASSESSEE, SUBMITTED THAT THERE WAS A CASH DEPOSIT I N THE ACCOUNTS OF THE ASSESSEE WITH INDIAN BANK AND AXIS BANK. ACCORDING TO THE LD. 2 I.T.A. NO.2491/CHNY/18 REPRESENTATIVE, THE ASSESSEE EXPLAINED BEFORE THE A SSESSING OFFICER THAT THE ASSESSEE RECEIVED FUNDS FROM GOKULAM CHIT FUNDS BEING A SUCCESSFUL BIDDER IN THE CHIT GROUP. THE ASSESSEE HAS CLAIMED THAT SOME OF THE ADVANCES RECEIVED FROM TRADERS FOR PURCHASE OF TILES WAS ALSO DEPOSITED IN THE BANK ACCOUNTS. ACCORDING TO THE L D. REPRESENTATIVE, THE ASSESSING OFFICER AFTER EXAMINING THE EXPLANATION O F THE ASSESSEE FOUND THAT A SUM OF 14,75,973/- WAS UNEXPLAINED. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE WAS A SUBSCRIBER TO FI VE HIGH VALUE CHITS OF 1,25,000/- FOR 20 MONTHS TOTALLING TO 25 LAKHS. THE CHIT GROUP COMMENCED FROM 08.03.2010. THE FIRST INSTALMENT FO R FIRST GROUP WAS MADE ON 08.03.2010. ACCORDING TO THE LD. REPRESENT ATIVE, THE ASSESSEE ALSO JOINED FOUR MORE GROUPS IN QUICK SUCCESSION. TOTALLY THE ASSESSEE HAS PAID 24,51,250/- FOR FIVE CHITS BEFORE PARTICIPATING IN THE AUCTION. THE ASSESSING OFFICER REDUCED THE PAYMENT OF 24,51,250/- FROM THE TOTAL AUCTION AMOUNT RECEIVED AND FOUND THAT A SUM OF 68,77,000/- ALONE WAS AVAILABLE FOR MAKING CASH DEPOSITS INTO THE BAN K ACCOUNTS. IN FACT, THE DEPOSIT WAS MORE THAN 82 LAKHS. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER OVERLOOKED TH E FACT THAT 6,82,500/- WAS PAID EVEN BEFORE THE COMMENCEMENT OF THE FIRST CHIT ITSELF, HENCE, THE SAME SHOULD NOT HAVE BEEN TAKEN AS AMOUNT SPENT OUT OF THE AMOUNT RECEIVED IN CHIT AUCTION. 3 I.T.A. NO.2491/CHNY/18 3. SHRI K. MEENAKSHISUNDARAM, THE LD. REPRESENTATIV E FOR THE ASSESSEE FURTHER SUBMITTED THAT AN INCOME OF 6,63,013/- WAS SHOWN UNDER THE HEAD BUSINESS UNDER SECTION 44AD OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IN RETAIL TRADING IN TILE S. THEREFORE, THE ABOVE SAID SUM OF 6,82,500/- HAS NOT BEEN INVESTED OUT OF CHIT AUCTIO N AMOUNT, BUT, OUT OF THE OWN FUNDS AND ADVANCES RECEIVED FROM TRA DERS. ACCORDING TO THE LD. REPRESENTATIVE, THESE FACT WERE NOT CONSIDE RED BY BOTH THE AUTHORITIES BELOW. 4. I HEARD SHRI SANATH KUMAR RAHA, THE LD. DEPARTME NTAL REPRESENTATIVE ALSO. THE ASSESSEE CLAIMS THAT THE CHIT AMOUNT RECEIVED WAS USED AS SOURCE FOR DEPOSITS IN THE BANK ACCOUNT S. IT IS NOT KNOWN WHETHER GOKULAM CHIT FUND, THE FINANCE COMPANY PAID THE AMOUNT BY CASH TO THE ASSESSEE OR THROUGH BANKING CHANNEL. M ORE THAN 82 LAKHS WERE SAID TO BE DEPOSITED IN THE BANK ACCOUNTS AND THE ASSESSEE CLAIMS THAT 68,77,000/- WAS RECEIVED FROM GOKULAM CHIT FUND. I T IS NOT KNOWN HOW GOKULAM CHIT FUND PAID 68,77,000/- BY CASH TO THE ASSESSEE. THESE FACTS WERE NOT BROUGHT ON RECORD EITHER BY TH E ASSESSING OFFICER OR BY THE CIT(APPEALS). THEREFORE, THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSE SSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER ON TH E BASIS OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE. THE ASSESSING O FFICER SHALL BRING ON 4 I.T.A. NO.2491/CHNY/18 RECORD HOW THE ASSESSEE PAID THE SUBSCRIPTION TO FI VE CHITS. IT IS ALSO TO BE BROUGHT ON RECORD HOW GOKULAM CHIT FUND PAID THE CHIT AMOUNT TO THE ASSESSEE EITHER BY CASH OR THROUGH BANKING CHANNEL AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFT ER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 9 TH JULY, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 6! /DATED, THE 9 TH JULY, 2019 KRI. + ).78 98%. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - :. () /CIT(A)-7, CHENNAI 4. PRINCIPAL CIT-2, CHENNAI 5. 8$; ). /DR 6. # < /GF.