DCIT, Tiruppur V. N.Sundararaj, Tiruppur

ITA 261/CHNY/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1071 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: T BANUSEKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.261/CHNY/2016 ' (' / ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2, 121, SIXTY FEET ROAD, TIRUPUR 641 602. V. SHRI N. SUNDARARAJ, PROP: M/S RAJ ASSOCIATES, NO.3, MANJU COMPLEX, SIVASAKTHI NAGAR 2 ND STREET, PARAPALAYAM, TIRUPUR-641 604. PAN : ALMPS 1563 K (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL.CIT ,-*+ . / / RESPONDENT BY : SH. T. BANUSEKAR, CA 0 . 1$ / DATE OF HEARING : 13.08.2018 2!( . 1$ / DATE OF PRONOUNCEMENT : 12.09.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -3, COIMBATORE , DATED 28.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2 I.T.A. NO.261/CHNY/16 2. THERE WAS A DELAY OF 21 DAYS IN FILING THIS APPE AL BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR CONDONATION OF DELAY. WE HAVE HEARD THE LD. D.R. AND THE LD. REPRESENTATIVE FOR T HE ASSESSEE. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY A ND ADMIT THE APPEAL. 3. SHRI R. CLEMENT RAMESH KUMAR, THE LD. DEPARTMENT AL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R DISALLOWED A SUM OF 30,93,005/-, WHICH WAS CREDITED INTO THE CURRENT AC COUNT OF SHRI N. SUNDARARAJ. A SUM OF 35,68,663/- WAS ALSO DISALLOWED BEING UNACCOUNTED CONTRACT RECEIPTS. THE ASSESSING OFFIC ER HAS ALSO DISALLOWED 5,09,888/- BEING THE BUILDING MAINTENANCE AND ANOTH ER SUM OF 82,604/- BEING THE TRAVEL EXPENSES. ACCORDING TO T HE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS TRANS FERRED THE ENTIRE CONTRACT BUSINESS TO A FIRM KNOWN AS M/S RAJ ASSOCI ATES IN WHICH THE ASSESSEE IS ALSO ONE OF THE PARTNERS. ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT A DMITTED SOME OF THE RECEIPTS EITHER IN THE INDIVIDUAL BOOKS OR IN THE B OOKS OF THE FIRM. THEREFORE, ACCORDING TO THE LD. D.R., THE MATTER NE EDS TO BE RE- EXAMINED. 4. WE HEARD SH. T. BANUSEKAR, THE LD. REPRESENTATIV E FOR THE ASSESSEE ALSO. ACCORDING TO THE LD. REPRESENTATIVE , THE CIT(APPEALS) 3 I.T.A. NO.261/CHNY/16 ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THA T THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING. ACCORDING TO THE LD. REPRESENTATIVE, THE CREDIT IN THE BOOKS M/S RAJ ASS OCIATES ARE THE ADVANCES RECEIVED BY THE ASSESSEE FROM VARIOUS PART IES TOWARDS CONSTRUCTION OF BUILDING. THE CONSTRUCTION WAS ALS O COMPLETED AND THE ENTIRE RECEIPTS WERE BROUGHT TO TAX BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2012-13. ACCORDING TO THE LD. REPRESENTATIVE , THE ASSESSING OFFICER WITHOUT VERIFYING THESE FACTS, DISALLOWED THE CLAIM OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT ADVANCES RECEIVED FROM CONSTRUCTION ACTIVITY W ERE ACCOUNTED IN THE BOOKS OF M/S RAJ ASSOCIATES, THE PARTNERSHIP FIRM I N WHICH THE ASSESSEE IS ALSO A PARTNER. IN THIS CASE, THE METHOD OF ACC OUNTING REGULARLY FOLLOWED BY THE ASSESSEE NEEDS TO BE VERIFIED. THE REFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE VERIFIED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE RE VENUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RE- EXAMINE THE MATTER IN THE LIGHT OF THE MATERIAL THA T MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESS EE. 4 I.T.A. NO.261/CHNY/16 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 12 TH SEPTEMBER, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 12 TH SEPTEMBER, 2018. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-3, COIMBATORE 4. PRINCIPAL CIT-3, COIMBATORE 5. 69 ,1 /DR 6. :' ; /GF.