Solaisamy Paulraj, CHENNAI V. ITO, CHENNAI

ITA 2732/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96501 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 23-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-11-2014
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: T BANUSEKAR
• Keywords: Unexplained cash credit; Additional evidence; Corroborative evidences
• Section: 142(1); 131; 68; 145

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 2732/MDS/2014 / ASSESSMENT YEAR :20 0 9 - 1 0 SOLAISAMY PAULRAJ, NO. 13A, KALYANI INDUSTRIAL ESTATE, VANAGARAM ROAD, ATHIPET, AMBATTUR, CHENNAI 600 058. [PAN: A HJPP8578Q ] VS. THE INCOME TAX OFFICER , WARD X I V ( 2 ), CHENNAI. ( / APPELLANT ) ( / RESPONDENT ) ./ I.T.A.NO. 2878/MDS/2014 / ASSESSMENT YEAR :2009 - 10 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON - CORPORATE CIRCLE 7, ROOM NO. 608, 6 TH FLOOR, 121, N.H, ROAD, C HENNAI 600 034. VS. SOLAISAMY PAULRAJ, NO. 13A, KALYANI INDUSTRIAL ESTATE, VANAGARAM ROAD, ATHIPET, AMBATTUR, CHENNAI 600 058. ( / APPELLANT ) ( / RESPONDENT ) ASSESSEE BY : SHRI T. BANUSEKAR, C.A. DEPARTMENT BY : SHRI A.V. SREE KANTH, JCIT / DATE OF HEARING : 23 . 11 .201 5 / DATE OF P RONOUNCEMENT : 11 .12 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH E S E CROSS APPEAL S FILED BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AG AINST THE ORDER OF THE LD. CIT (APPEALS) - VII , CHENNAI , DATED I.T.A. NO S . 2732 & 2878 /M/ 14 2 22 . 0 8 . 20 1 4 RELEVANT TO THE ASSESSMENT YEAR 200 9 - 10. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS WITH REGARD TO DELETION OF ADDITION OF .16,27,407/ - MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] AS UNEXPLAINED CASH CREDIT. IN THE REVENUE S APPEAL, THE ONLY EFFECTIVE GROUND RAISED IS WITH REGARD TO DELETION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF STEEL SCRAP, FILED HIS RETURN OF INCOME ADMITTING TOTAL INCOME OF .5,51,330/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON 06.09.2010. SUBSEQUENTLY, NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO SERVED ON THE ASSESSEE CALL FOR DETAILS. ON PERUSAL OF THE B ALANCE SHEET, THE ASSESSING OFFICER HAS OBSERVED THAT A SUM OF .1,80,53,522/ - WAS SHOWN AS PAYABLE TO SUNDRY CREDITORS. WHEN THE ASSESSING OFFICER ASKED THE AR TO FURNISH THE BREAK - UP FOR THE CREDITS ALONG WITH DETAILS, THE AR OF THE ASSESSEE HAS FURNISHE D 14 CREDITORS, THEIR PAN AND ADDRESS. SUMMON UNDER SECTION 131 OF THE ACT WAS ISSUED TO THE FOLLOWING SEVEN CREDITORS: NAME OF THE CREDITORS OUTSTANDING DUES AS SHOWN BY THE ASSESSEE A.P.N. STEELS 3,25,000 BHARAT PRESSING 11,30,942 CHETTRINADU STEEL S CRAP PRODUCTS 17,40,097 METAL FORM P. LTD. 23,77,290 PRIYA STEELS 73,24,662 I.T.A. NO S . 2732 & 2878 /M/ 14 3 SRI BALAMURUGAN TRADERS 4,34,903 SUN METAL IN D US TRIAL SUPPLIERS 39,71,233 AFTER EXAMINING VARIOUS DETAILS FURNISHED BY THE CASH CREDITORS BEFORE THE ASSESSING OFFICER, THE F INAL POSITION WITH REGARD TO THE CONFIRMATION OF CREDIT IN RESPECT OF THE CREDITORS ARE AS UNDER: SL. NO. NAME OF THE CREDITORS CREDIT BALANCE AS CLAIMED BY THE ASSESSEE CONFIRMATION LETTER OBTAINED YES/NO DEBIT BALANCE AS PER CREDITORS 1. A.P.N. STEEL S 3,25,000 YES 3,25,000 2. BHARAT PRESSING 11,30,942 LEDGER ACCOUNT COPY FILED 11,30,942 3. CHETTRINADU STEEL SCRAP PRODUCTS 17,40,097 - DO - 17,40,097 4. METAL FORM P. LTD. 23,77,290 - DO - 23,79,215 5. PRIYA STEELS 73,24,662 NO PROPRIETOR EXPIRED BUSINE SS DEFUNCT 6. SRI S. MALAICHAMY 4,34,903 STATEMENT RECORDED 5,98,303 HOWEVER, THE CREDITORS COULD NOT SUPPORT HIS CLAIM WITH EVIDENCE 7. SRI H. MOHD ALI M/S. SUN METAL INDUSTRIAL SUPPLIERS 39,71,233 LETTER OBTAINED SRI H. MOHD ALI DENIED ANY BALANCE A S ON 312.03.2009 IN HIS BOOKS 3. THE AR OF THE ASSESSEE SHRI SOLAISAMY PAULRAJ CONFIRMED BEFORE THE ASSESSING OFFICER THAT HE DOES NOT WANT TO CROSS EXAMINE SRI H. MOHAMMED ALI, PROPRIETOR OF M/S. SUN METAL INDUSTRIAL SUPPLIERS AND ACCORDINGLY, THE SUM OF .39,71,233/ - WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT. FURTHER, THE CREDITOR M/S. PRIYA STEELS HAS ALSO NOT CONFIRMED BECAUSE THE PROPRIETOR WAS NOT ALIVE AND THE BUSINESS IS DISCONTINUED. ACCORDINGLY, THE SUM OF .73,24,662/ - WAS ALSO ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT. I.T.A. NO S . 2732 & 2878 /M/ 14 4 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. C I T(A) AND FILED A PETITION UNDER RULE 46A ON 10.07.2012 ALONG WITH COPIES OF EVIDENCES STATING THAT THE EVIDENCES R ELATING TO THE IMPUGNED ADDITIONS WERE AVAILABLE WITH HIM AND THE ASSESSING OFFICER DID NOT CALL FOR THEM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ACCORDINGLY, THE ASSESSING OFFICER WAS DIRECTED TO FILE A REMAND REPORT AFTER EXAMINING THE PAPERS. AFTER EXAMINING THE FRESH EVIDENCES DURING THE REMAND PROCEEDINGS, THE ASSESSING OFFICER FILED THE REMAND REPORT BEFORE THE LD. CIT(A) AND ACCORDINGLY, THE COPY OF THE REMAND REPORT WAS GIVEN TO THE ASSESSEE FOR REBUTTAL AND THE ASSESSEE HAS ALSO FILED HIS REPL Y BEFORE THE LD. CIT(A). DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS, THE ASSESSEE HAS FILED A PETITION UNDER RULE 46A FOR ADMISSION OF ADDITIONAL EVIDENCE. AGAIN THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER F OR EXAMINATION AND THE ASSESSING OFFICER HAS ALSO FILED HIS REPORT AFTER EXAMINING THE EVIDENCES . AFTER CONSIDERING THE ASSESSMENT ORDER, TWO REMAND REPORTS OF THE ASSESSING OFFICER AND WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, THE LD. CIT(A) HAS TAKEN ON RECORD THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. AFTER EXAMINING THE FACTS AND SUPPORTING EVIDENCES, WITH REGARD TO THE CREDITS IN THE ACCOUNT OF M/S. PRIYA STEELS, THE LD. CIT(A) HAS DELETED THE ADDITION TO THE EXTENT OF . 64,39,068/ - AND FOR BALANCE ADDITION OF .9,02,459/ - , THE ASSESSING OFFICER WAS DIRECTED TO VERIFY AND ALLOW THE CLAIM OF THE ASSESSEE. I.T.A. NO S . 2732 & 2878 /M/ 14 5 SO FAR AS CREDITS IN THE ACCOUNTS OF M/S. SUN METAL INDUSTRIES, AGAINST THE ADDITION OF .39,71,233/ - , THE LD. CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF .16,27,407/ - AND DELETED THE REMAINING ADDITION TO THE EXTENT OF .23,43,826/ - . AGAINST WHICH, BOTH THE ASSESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMI TTED THE DESPITE FILING ALL DETAILS, THE LD. CIT(A) WAS NOT CORRECT IN CONFIRMING THE ADDITION TO THE EXTENT OF .16,27,407/ - AND PRAYED THAT THE ADDITION CONFIRMED BY THE LD. CIT(A) SHOULD BE DELETED. 6. ON THE OTHER HAND, THE LD. DR HAS STRONGLY CONTE NDED THAT THE ASSESSING OFFICER WAS NOT GIVEN OPPORTUNITY TO EXAMINE THE BILLS PROVIDED BY THE CREDITOR AND SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) . 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHO RITIES BELOW. DURING THE COURSE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS VALIDLY SERVED NOTICE UNDER SECTION 142(1) OF THE ACT CALLING FOR DETAILS IN RESPECT OF THE CLAIM OF THE ASSESSEE. WHEN THE ASSESSEE HAS FURNISHED DETAILS OF 14 CREDITORS AGA INST WHICH WITH REGARD TO DOUBTFUL CREDITS, SUMMON UNDER SECTION 131 WAS ALSO ISSUED. THROUGH A LETTER OF MR. H. MOHAMMED ALI, PROPRIETOR OF M/S. SUN METAL INDUSTRIAL SUPPLIERS DENIED THE CREDIT, THE ASSESSEE HAS SAFELY CONFIRMED I.T.A. NO S . 2732 & 2878 /M/ 14 6 THAT HE DOES NOT WANT TO C ROSS EXAMINE THE PROPRIETOR OF M/S. SUN METAL INDUSTRIAL SUPPLIER. THE LD. COUNSEL FOR THE ASSESSEE HAS NOT GIVEN ANY VALID REASON A GAINST THE SPECIFIC QUERY RAISED BY THE BENCH AS TO WHAT PREVENTED THE ASSESSEE IN FILLING THE EVIDENCES, BILLS, ETC. AS FIL ED BEFORE THE LD. CIT(A), WHICH WERE NOT FILED BEFORE THE ASSESSING OFFICER. ONLY AFTER MAKING ADDITIONS, THE ASSESSEE HAS FILED THE ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS ACCEPTED THE SAME DESPITE SPECIFIC OBJECTIONS FROM THE AS SESSING OFFICER. T HE ASSESSEE HAS NOT FILED COMPLETE DETAILS ALONG WITH THE RETURN OF INCOME BEFORE THE ASSESSING OFFICER , WHICH AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS. THE LD. DR HAS ALSO SPECIFICALLY RAISED A GROUND [GROUND NO. 2.4] THAT THE ASS ESSING OFFICER WAS NOT GIVEN OPPORTUNITY TO EXAMINE THE BILLS IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE ENTIRE CASH CREDIT WITH REGARD TO M/S. SUN METAL INDUSTRIAL SUPPLIERS REQUIRES TO BE EXAMINED AND VERIFIED THE BILLS, ETC. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO EXAMINE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. IN VIEW OF THE ABOVE, THE GROUND RAISED BY THE ASSESSEE AS WELL AS REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO S . 2732 & 2878 /M/ 14 7 8. IN THE RESULT, THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED ON THE 11 TH DECEMBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 11. 1 2 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.