M/s. L.M.S. Thamby & Co., CHENNAI V. ITO, CHENNAI

ITA 2731/CHNY/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9740 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2731/CHNY/2016 ( )( / ASSESSMENT YEAR : 2008-09 M/S L.M.S. THAMBY & CO., NO.5/3, NACFER LANE, 1 ST FLOOR, PERIAMET, CHENNAI - 600 003. PAN : AAAFL 1896 M V. THE INCOME TAX OFFICER, WARD XI (2), CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : NONE -.+, / 0 / RESPONDENT BY : SHRI V. NANDAKUMAR, JCIT 1 / 2% / DATE OF HEARING : 27.11.2018 3') / 2% / DATE OF PRONOUNCEMENT : 03.12.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE WAS DISPOSED OF EARLI ER BY AN ORDER DATED 27.12.2016. HOWEVER, ON THE APPLICATIO N FILED BY THE REVENUE IN M.P. NO. 176/CHNY/2017, THE ORDER DATED 27.12.2016 WAS RECALLED AND THE APPEAL WAS RESTORED ON FILE. ACCORDINGLY, THE APPEAL IS POSTED FOR HEARING FOR FINAL DISPOSAL. 2 I.T.A. NO.2731/CHNY/16 2. THE NOTICE OF HEARING WAS SERVED ON THE ASSESSEE BY RPAD AND THE REGISTRY HAS PLACED THE POSTAL ACKNOWLEDGEM ENT AS PROOF FOR THE SERVICE OF NOTICE ON THE ASSESSEE. EVEN AF TER THE RECEIPT OF NOTICE, THE ASSESSEE DID NOT APPEAR BEFORE THIS TRI BUNAL WHEN THE APPEAL WAS TAKEN UP FOR HEARING. THERE MAY BE VARI OUS REASONS FOR THE ASSESSEE FOR NOT APPEARING BEFORE THIS TRIBUNAL WHEN THE APPEAL WAS TAKEN UP FOR HEARING. ONE OF THE REASONS MAY P RESUMABLY BE THAT THE ASSESSEE MAY NOT BE INTERESTED IN PROSECUT ION. WHATEVER MAY BE THE REASON FOR NON-APPEARANCE OF THE ASSESSE E, THIS TRIBUNAL IS EXPECTED TO DISPOSE THE APPEAL ON MERIT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. ACCORDINGLY, WE HEAR D SHRI V. NANDAKUMAR, THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOSE THE APPEAL ON MERIT. 3. SHRI V. NANDAKUMAR, THE LD. D.R. SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF 7,80,000/-. ACCORDING TO THE LD. D.R., A SUM OF 5,00,000/- WAS ADDED FROM AND OUT OF CAPITAL INTRODUCED BY SMT. L. KATHEEJA. A SUM OF 2,80,000/- WAS ADDED IN THE HANDS OF SHRI L.T. ILYAS. SINCE THE ASSESSEE-F IRM COULD NOT EXPLAIN THE SOURCE FOR CAPITAL INTRODUCED BY SMT. L . KATHEEJA AND SHRI L.T. ILYAS, AN ADDITION OF 7,80,000/- WAS MADE. THEREFORE, 3 I.T.A. NO.2731/CHNY/16 ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS CON FIRMED THE ADDITION. 4. HAVING HEARD THE LD. D.R., WE PERUSED THE MATERI AL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE ORDE RS OF BOTH THE AUTHORITIES BELOW. A SUM OF 7,80,000/- WAS INTRODUCED AS CAPITAL IN THE FIRMS ACCOUNT. THE ASSESSING OFFICER FOUND TH AT A SUM OF 14,50,000/- WAS INTRODUCED AS CAPITAL IN THE NAME O F SMT. L. KATHEEJA AND ANOTHER SUM OF 7,80,000/- IN THE NAME OF SHRI L.T. ILYAS. SMT. KATHEEJA APPEARS TO HAVE RECEIVED A GI FT OF 5,00,000/- FROM SHRI L.T. BAZUL ASHAB, WHO IS NONE OTHER THAN HER BROTHER AND THE SAME WAS GIVEN IN THE FORM OF CHEQUE. ANOTHER SUM OF 4,50,000/- WAS RECEIVED AS GIFT FROM SHRI A.R. SADI Q, WHO IS NONE OTHER THAN THE SON OF SMT. KATHEEJA. THE ASSESSING OFFICER FOUND THAT OUT OF 14,50,000/-, THE ASSESSEE HAS EXPLAINED THE SOURCE FOR 9,50,000/-. THEREFORE, HE MADE ADDITION OF 5,00,000/- IN THE HANDS OF THE FIRM. 5. IN RESPECT OF SHRI L.T. ILYAS, THE ASSESSING OFF ICER FOUND THAT A SUM OF 7,80,000/- WAS INTRODUCED AS ADDITIONAL CAPITAL. E VEN THOUGH THERE WAS CLAIM OF GIFT TO THE EXTENT OF 5,00,000/- FROM SHRI L.T. BAZUL ASHAB, THE ASSESSING OFFICER FOUND THAT THE CHEQUE WAS 4 I.T.A. NO.2731/CHNY/16 NOT DEPOSITED IN THE BANK. THE ASSESSEE CLAIMED BE FORE THE ASSESSING OFFICER THAT THE AMOUNT WAS WITHDRAWN BY CASH AND IT WAS INTRODUCED IN THE FIRMS ACCOUNT ON 10.01.2008. IN RESPECT OF 2,80,000/-, THERE WAS NO EXPLANATION. THEREFORE, T HE ASSESSING OFFICER FOUND THAT THE ENTIRE EXPLANATION OF THE AS SESSEE FOR SOURCE OF 7,80,000/- IS NOT SATISFACTORY. ACCORDINGLY, THE S AME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. OUT OF 14,50,000/-, THE ASSESSEE EXPLAINED ONLY 9,50,000/-. IN RESPECT OF SMT. KATHEEJA, THERE WAS NO EXPLANATION FOR 5,00,000/-. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION OF 5,00,000/- WHICH WAS SAID TO BE INTRODUCED BY SMT. KATHEEJA TO THE CAPITAL ACCOUNT OF THE FIRM. 6. IN RESPECT OF SHRI L.T. ILYAS, THE CLAIM OF THE ASSESSEE WAS THAT A GIFT WAS RECEIVED FROM SHRI L.T. BAZUL ASHAB . BUT, SHRI L.T. ILYAS DID NOT USE THE CHEQUE FOR DRAWAL OF CASH AND BUT CASH WAS DEPOSITED IN THE CAPITAL ACCOUNT OF THE FIRM. THIS FACTUAL CLAIM OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. THER EFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT OUT OF 7,80,000/-, THE ASSESSEE HAS EXPLAINED THE SOURCE FOR 5,00,000/-. SO, WHAT REMAINS TO BE EXPLAINED IS 2,80,000/-. IN RESPECT OF 2,80,000/-, 5 I.T.A. NO.2731/CHNY/16 NO EXPLANATION IS FORTHCOMING. THEREFORE, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE SUM OF 2,80,000/- WAS SAID TO BE INTRODUCED BY SHRI L.T. ILYAS IS CONFIRMED. AS A R ESULT, THE ADDITION OF 7,80,000/- IS CONFIRMED AS FOLLOWS:- IN THE HANDS OF SMT. L. KATHEEJA : 5,00,000/- IN THE HANDS OF SHRI L.T. ILYAS : 2,80,000/-. 7. THE CIT(APPEALS), IN FACT, UPHELD THE ORDER OF T HE ASSESSING OFFICER ONLY TO THE EXTENT OF 7,80,000/-. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 3 RD DECEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 3 RD DECEMBER, 2018. KRI. 6 I.T.A. NO.2731/CHNY/16 / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.