ACIT, CHENNAI V. Shri A.M.M.Musthafa, CHENNAI

ITA 264/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64228 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K RAJAGOPA
• Assessee Lawyers: M NARAYANAN ITP
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER .. ITA NO. 264/MDS/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-XI, CHENNAI. V. SHRI A.M.M. MUSTHAFA, NO. 122/91, RAMANAICKEN ST., ROYAPURAM, CHENNAI-600 013. (PAN : AFWPM6918G) (APPELLANT) (RESPONDENT) AN D C.O. NO. 35/MDS/2012 (IN ITA NO. 264/MDS/2012) ASSESSMENT YEAR 2008-09 SHRI A.M.M. MUSTHAFA, V. T HE ASST. COMMISSIONER OF NO. 122/91, INCOME TAX, RAMANAICKEN ST., ROYAPURAM, BUSINES S CIRCLE-XI CHENNAI-600 013. CHENNAI. (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI K. RAJAGOPA, JCIT ASSESSEE BY : SHRI M. NARAYANAN, ITP DATE OF HEARING : 28.0 8.2012 DATE OF PRONOUNCEMENT : 30.08.201 2 ITA NO. 264 & CO NO.35/MDS/2012 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-IV, CHENNAI DATED 15- 11-2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE PROFESSION AS PRACTICING ACCOUNTANT. THE ASSESSEE HAD FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF ` 10,28,320/-. INITIALLY IT WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX AC T, 1961 ('THE ACT' FOR SHORT). SUBSEQUENTLY, SCRUTINY ASSESSMENT WAS MADE BY ISSUING NOTICE U/S 143(2) OF THE ACT. DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERV ED THAT ACCORDING TO THE AIR INFORMATION IT IS SEEN THAT TH E ASSESSEE HAD DEPOSITED ` 47,02,600/- BY WAY OF CASH IN M/S. KARUR VYSYA BANK LTD. IN THIS REGARD THE ASSESSEE WAS ASKED TO FURNISH TH E BANK BOOK, BANK STATEMENT AND CASH BOOK AND THE SAME WAS VERIFIED A ND TEST CHECKED. ACCORDING TO THE AIR INFORMATION THE DETA ILS FURNISHED BY THE ASSESSEE WERE NOT TALLIED. ACCORDINGLY, THE AS SESSING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE AT ` 57,30,920/-. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ). IT WAS SUBMITTED BEFORE THE LEARNED CIT(APPEALS) THAT THE ASSESSING OFFICER ITA NO. 264 & CO NO.35/MDS/2012 3 HAS NOT GIVEN OPPORTUNITY TO EXPLAIN THE CASH DEPOS ITS AND SUBMITTED THAT AS PER THE LETTERS ISSUED FROM KARUR VYSYA BANK THE TOTAL CASH DEPOSITS IN BOTH THE BANK ACCOUNTS OF THE ASSESSEE COMES TO ` 25,58,630/- AND THE FIGURE GIVEN BY THE BANK IN THE AIR TO THE I.T. DEPARTMENT IS NOT CORRECT. HENCE M/S. KARUR VYSYA BANK LTD. WAS FILING A REVISED AIR. HE FURTHER SUBMITTED THAT TH E ASSESSEE HAS SUBMITTED THE PROFESSIONAL INCOME AT ` 10,28,320/- NET AND THE GROSS PROFESSIONAL RECEIPTS WAS ` 24,99,911/-. OUT OF THIS CASH RECEIVED FROM THE CLIENTS AS FEES WAS TO THE TUNE OF ` 12,60,119/-. THE BALANCE AMOUNTS WERE EXPLAINED AS BY WAY OF LOANS T HAT WERE TAKEN FROM M/S. MARGADARSI CHITS P. LTD. AND OTHER BANKS. THE LEARNED CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE HAS OBSERVED THAT HE WAS CONVINCED THAT THE ASSESSEE HA D TO EXPLAIN CASH DEPOSITS OF ` 25.58 LAKHS ONLY BUT NOT ` 47.02 AS ADDED BY THE ASSESSING OFFICER OUT OF THIS AMOUNT OF ` 25.58 LAKHS CASH DEPOSITS, THE ASSESSEE HAD ADMITTED GROSS PROFESSIONAL RECEIP TS OF ` 12.6 LAKHS BY WAY OF CASH IN HIS RETURN OF INCOME (THE TOTAL G ROSS PROFESSIONAL RECEIPTS WERE ` 24.99 LAKHS). APART FROM THIS, IT COULD BE SEEN T HAT THE ASSESSEE HAS TAKEN CERTAIN LOANS FROM M/S. MARG ADARSI CHITS P. LTD. AND REPAID THE CHITS BY WAY OF CASH. WHILE RE PAYING THE CHIT TO M/S. MARGADARSI CHITS P. LTD. OR BY WHILE REPAYING THE LOANS TO THE ITA NO. 264 & CO NO.35/MDS/2012 4 BANKS, THE ASSESSEE HAS RE-DEPOSITED THE CASH INTO THE BANK. DURING THIS PERIOD THE ASSESSEE HAS ALSO SOLD CERTAIN LAND S AND THE SALE PROCEEDS WERE DEPOSITS INTO THE BANK ACCOUNT (6 PRO PERTY TRANSACTIONS RESULTED IN A SMALL LOSS OF ` 19,221/-). SINCE THE ASSESSEE HAS FULLY EXPLAINED ALL THE CASH DEPOSITS INTO HIS BANK ACCOUNT THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LEARNED CIT(APPEALS). 4. ON BEING AGGRIEVED, THE REVENUE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED DR SUBMITTED THAT THE LE ARNED CIT(APPEALS) ADMITTED ADDITIONAL EVIDENCE WHICH IS A LETTER FROM KARUR VYSYA BANK LTD. WHICH STATES THAT THE TOTAL CA SH DEPOSITS IN BOTH THE BANK ACCOUNTS OF THE ASSESSEE COMES TO ` 25,58,630/- AND THE FIGURE GIVEN TO THE INCOME TAX DEPARTMENT IN TH E AIR IS NOT CORRECT. M/S. KARUR VYSYA BANK LTD. HAS FILED A REV ISED AIR. THESE FACTS WERE NOT AVAILABLE BEFORE THE ASSESSING OFFIC ER. THE ASSESSEE HAS FILED THE SAME FOR THE FIRST TIME BEFORE THE LE ARNED CIT(APPEALS) AND THE LEARNED CIT(APPEALS) WITHOUT CALLING FOR A REMAND REPORT FROM THE ASSESSING OFFICER CONSIDERED THE LETTER RE CEIVED FROM KARUR VYSYA BANK LTD. AND ALLOWED THE APPEAL OF THE ASSESS EE. THERE IS VIOLATION OF RULE 46A. ITA NO. 264 & CO NO.35/MDS/2012 5 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO EXPLAIN HIS CASE. S IMPLY BASED ON THE AIR INFORMATION THE ADDITION WAS MADE, WITHOUT ASKI NG FOR THE EXPLANATION FROM THE ASSESSEE. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED U/S 143(1). SUB SEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM AIR ACC ORDING TO WHICH THE ASSESSEE HAD DEPOSITED ` 47,02,600/- IN KARUR VYSYA BANK LTD. HE CALLED FOR THE EXPLANATION AND DETAILS FROM THE ASSESSEE. THE ASSESSEE HAS SUBMITTED ALL THE DETAILS. AFTER VERI FYING THE SAME THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE D ETAILS FURNISHED BY THE ASSESSEE WERE NOT TALLYING WITH THE AIR INFORMA TION. ACCORDINGLY, BASED ON THE AIR INFORMATION, THE ADDITION WAS MADE . ON APPEAL THE LEARNED CIT(APPEALS) EXAMINED THE LETTER ISSUED BY KARUR VYSYA BANK LTD. AND ACCEPTED THE SUBMISSIONS OF THE ASSESSEE A ND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THE ONLY C ASE OF THE REVENUE BEFORE US IS THAT THE LEARNED CIT(APPEALS) OUGHT TO HAVE CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFF ICER WITH REGARD TO THE LETTER SUBMITTED BY THE ASSESSEE FROM KARUR VYSYA BANK LTD. ITA NO. 264 & CO NO.35/MDS/2012 6 WHICH WAS NOT SUBMITTED BEFORE THE ASSESSING OFFICE R AND HENCE THERE IS VIOLATION OF RULE 46A. WE FIND FORCE IN T HE CONTENTION OF THE LEARNED DR. ACCORDINGLY, WE ARE OF THE OPINION THA T THE ISSUE HAS TO GO BACK TO THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH. WE THEREFORE DIRECT THE ASSESSING OFFICER TO CONSIDER THE LETTER ISSUED BY KARUR VYSYA BANK LTD. AND DECIDE THE ISSUE AFRESH AF TER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEA RD. IN THE CIRCUMSTANCES, THE APPEAL FILED BY THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. 7. INSOFAR AS THE CROSS OBJECTION IS CONCERNED, SIN CE THE MAIN APPEAL IS REMITTED BACK TO THE FILE OF THE ASSESSIN G OFFICER, NO SEPARATE ADJUDICATION IS REQUIRED. THEREFORE, THE CROSS OBJECTION IS DISMISSED AS INFRUCTUOUS. 8. ORDER PRONOUNCED ON THURSDAY, THE 30 TH DAY OF AUGUST, 2012 AT CHENNAI. SD/- SD/- (N. S. SAINI) ( V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 30 TH AUGUST, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE