ITO, Vellore V. Shri J.Pachaiappan, Vellore

ITA 256/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5237 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: K NIRAIMATHI AZHAGAN
• Keywords: Unexplained cash credit; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NOS. 254, 255 & 256/MDS/2011 ASSESSMENT YEARS : 2000-01, 2001-02 & 2002-03 THE INCOME-TAX OFFICER, WARD-I(3), VELLORE. V. SHRI J. PACHAIAPPAN, 15, SAKTHI VINAYAGAR KOIL ST., THAKKOLAM, ARAKKONAM TALUK, VELLORE DISTRICT. (PAN : AIXPP0325L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.B. SEKARAN RESPONDENT BY : SHRI K. NIRAIMATHI AZHAGAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO. 254/MDS/2011 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN ITA NO. 137/09-10 DATED 30-11-2010 FOR THE ASSESSMENT YEAR 2000-01, ITA NO. 255/MDS/2 011 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(AP PEALS)-IX, CHENNAI IN ITA NO. 138/09-10 DATED 30-11-2010 FOR THE ASSESSMENT Y EAR 2001-02 AND ITA NO. 256/MDS/2011 IS AN APPEAL FILED BY THE REVENUE AGAI NST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN ITA NO. 139/09-10 DATED 30-11-2010 FOR THE ASSESSMENT YEAR 2002-03. AS THERE IS ONLY ONE ISSU E IN ALL THE APPEALS RELATING I.T.A. NOS. 254-256/MDS/2011 2 TO THE ACTION OF THE LEARNED CIT(A) IN DELETING THE ADDITION MADE ON ACCOUNT OF THE UNEXPLAINED DEPOSITS/CREDITS IN THE SAVINGS BAN K ACCOUNT OF THE ASSESSEE, ALL THE THREE APPEALS ARE BEING DISPOSED OF BY THIS COM MON ORDER. 2. SHRI P.B. SEKARAN, LEARNED CIT-DR REPRESENTED ON BEHALF OT THE REVENUE AND SHRI K. NIRAIMATHI AZXHAGAN, CA REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE IS A LORRY OWNER AND IS DOING THE BUSINESS OF LORRY TRANSPORT. IT WAS T HE SUBMISSION THAT THE RETURNS FILED BY THE ASSESSEE FOR THE RELEVANT ASSESSMENT Y EARS WERE TAKEN UP FOR SCRUTINY AND THE ASSESSEE WAS ASKED TO EXPLAIN THE DEPOSITS IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE TO AN EXTENT OF ` 6.63 LAKHS FOR THE ASSESSMENT YEAR 2000-01, ` 4.69 LAKHS FOR THE ASSESSMENT YEAR 2001-02 AND ` 23.13 LAKHS FOR THE ASSESSMENT YEAR 2002-03. IT WAS THE SUBMISSION THA T THE ASSESSEE HAD CLAIMED THAT THE DEPOSIT AND THE WITHDRAWAL IN THE SAVINGS BANK ACCOUNT WAS NOT A SINGLE TRANSACTION BUT WAS MULTIPLE TRANSACTIONS AND IT WA S THE VARIOUS RECEIPTS FROM THE BUSINESS AND THE WITHDRAWALS WERE FOR THE PURPO SE OF THE BUSINESS. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD NOT EXPLAINED EACH OF THE TRANSACTIONS AND CONSEQUENTLY THE SAME WAS ADDED BY THE ASSESSING OF FICER AS UNEXPLAINED CASH CREDITS. IT WAS THE SUBMISSION THAT THE LEARNED CI T(A) OUGHT NOT TO HAVE DELETED THE ADDITION. 4. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE WAS FILING HIS RETURNS BY APPLYING THE PRO VISIONS OF SECTION 44AE OF THE I.T.A. NOS. 254-256/MDS/2011 3 INCOME TAX ACT, 1961. CONSEQUENTLY, THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. IT WAS THE SUBMISSION THAT HOWEVER AS CALLED FOR BY THE ASSESSING OFFICER THE ASSESSEE HAD FILED A DAY-TO-DAY CASH-FL OW STATEMENT AND THE CASH- FLOW STATEMENT HAD NOT BEEN DISLODGED BY THE REVENU E. IT WAS THE FURTHER SUBMISSION THAT THE LORRY TRANSPORT INCOME DISCLOSE D BY APPLYING THE PROVISIONS OF SEC. 44AE HAD ALSO BEEN ACCEPTED BY THE REVENUE. IT WAS THE SUBMISSION THAT THE SAVINGS BANK ACCOUNT AND THE CASH-FLOW STA TEMENT CLEARLY SHOWED THAT THE WITHDRAWALS AND DEPOSITS WERE OUT OF THE LORRY HIRING CHARGES. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WA S LIABLE TO BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUT SET IT IS NOTICED THAT THE ASSESSEES INCOME HAS BEEN ASSESSED BY APPLYING THE PROVISIONS OF SECTION 44AE OF THE ACT. FURTHER IT IS NOTICED THAT THE ASS ESSEE HAS EXPLAINED THE ENTRIES IN HIS BANK ACCOUNT THROUGH THE CASH-FLOW STATEMENT . OBVIOUSLY, WHEN AN ASSESSEE IS DOING THE BUSINESS OF LORRY TRANSPORT, THERE WOULD BE RECEIPTS AND PAYMENTS WHICH THE ASSESSEE HAS ROUTED THROUGH HIS SAVINGS BANK ACCOUNT. NO OTHER BANK ACCOUNT WHERE THERE WERE TRANSACTIONS RE LATING TO THE LORRY TRANSPORT BUSINESS HAS BEEN POINTED OUT. THE CASH-FLOW STATE MENT PREPARED BY THE ASSESSEE HAS ALSO NOT BEEN DISLODGED. FURTHER IT I S NOTICED THAT IN THE ASSESSMENT ORDER ITSELF THE ASSESSING OFFICER HAS R ECOGNISED THAT EACH CREDIT IS PRECEDED BY A WITHDRAWAL. CONSEQUENTLY, IT CANNOT BE SAID THAT EACH AND EVERY DEPOSIT IS THE INCOME OF THE ASSESSEE. FURTHER THE DEPOSITS WHICH HAVE BEEN I.T.A. NOS. 254-256/MDS/2011 4 TREATED AS UNEXPLAINED BY THE REVENUE IS THE TOTAL OF THE DEPOSITS IN THE BANK ACCOUNT WHICH BY NO STRETCH CAN BE HELD TO BE THE I NCOME OF THE ASSESSEE. IN FACT, THE SAID AMOUNTS ARE WELL WITHIN THE RANGE OF THE BUSINESS RECEIPTS IN THE TRANSPORT BUSINESS. IN THE CIRCUMSTANCES, WE ARE O F THE VIEW THAT THE FINDING OF THE LEARNED CIT(A) IS ON A RIGHT FOOTING AND DOES N OT CALL FOR ANY INTERFERENCE. IN THE CIRCUMSTANCES, THE APPEALS OF THE REVENUE ARE D ISMISSED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 19/04/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 19 TH APRIL, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE