M. Saravana Kumar, Coimbatore V. ITO, Coimbatore

ITA 2806/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4461 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 28-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NETHERPAL IRS
• Assessee Lawyers: S SATHYARAJ
• Keywords: Unexplained investment; Peak credit
• Section: 69; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO. 2806/MDS/2016 / ASSESSMENT YEAR : 2008-2009 M. SARAVANA KUMAR, NO.11A, NEW NO.16, SRI KRISHNA, NAGAR, BRINDHA LAYOUT, CHOKKAMPUDUR ROAD, COIMBATORE 641 001. [PAN AVMPS 8371H] VS. THE INCOME TAX OFFICER, WARD III(3) COIMBATORE. ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. S. SATHYARAJ, ADVOCATE /RESPONDENT BY : SHRI.S. NETHERPAL, IRS, JCIT. /DATE OF HEARING : 30-05-2017 ! /DATE OF PRONOUNCEMENT : 31-05-2017 % / O R D E R ASSESSEE IN THIS APPEAL IS AGGRIEVED ON AN ADDITIO N OF C21,04,000/- MADE BY THE LD. ASSESSING OFFICER UNDE R SECTION 69 OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT). ITA NO. 2806/MDS/2016. :- 2 -: 2. FACTS APROPOS ARE THAT ORIGINAL ASSESSMENT ON THE A SSESSEE WAS COMPLETED U/S. 144 OF THE ACT ON 15.12.2010, A SSESSING AN INCOME OF C25,76,370/-. RELEVANT PORTION OF THIS A SSESSMENT ORDER DEALING WITH THE ADDITIONS MADE BY THE LD. ASSESSI NG OFFICER, IS REPRODUCED HEREUNDER:- IN THE ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE AND ALSO SUPPORTING DOCUMENTS FOR EXAMINATION AND NON-CO-OPERATION OF THE ASSESSEE, - THE CREDIT CARD BILL OF 2,99,860/- IS ADDED TO THE RETURNED INCOME U/S-68 OF THE INCOME-TAX ACT, AND INVESTMENT FOR ACQUIRING BONDS/DEBENTURES AT 21,04,000/- SHOWN IN THE INDIVIDUAL TRANSACTION STATEMENT REPORTED THROUGH AIR IS ADDED TO THE TOTA L INCOME RETURNED BY THE ASSESSEE AS UNEXPLAINED INVESTMENT U/S-69 OF THE INCOME-TAX ACT, 1961. FURTHER THE ASSESSEE HAD CLAIMED DEDUCTION UNDER CHAPTER VIA DEDUCTION. IN THE ABSENCE OF ANY EVIDENCE, THE ASSESSEE'S CLAIM WAS REJECTED.' THOUGH ASSESSEE FILED AN APPEAL BEFORE LD. COMMISSI ONER OF INCOME TAX (APPEALS), HE WAS NOT SUCCESSFUL . THE MATTER WAS CARRIED BY THE ASSESSEE IN FURTHER APPEAL BEFORE THIS TRIBUNAL. THIS TRIBUNAL IN AN ORDER DATED 25.09.2012 IN ITA NO.626/MDS/2012 REMIT TED THE ISSUE BACK TO THE FILE OF THE LD. ASSESSING OFFICER, DIRE CTING HIM TO CONSIDER THE EVIDENCE FILED BY THE ASSESSEE AND TO DECIDE TH E MATTER AFRESH. IN THE FRESH PROCEEDINGS, BASED ON THE DIRECTIONS OF T HE TRIBUNAL, ASSESSEE WAS REQUIRED TO EXPLAIN THE INVESTMENTS IN BONDS DONE THROUGH M/S. KOTAK MAHINDRA BANK. ASSESSEE STATED BEFORE THE LD. ITA NO. 2806/MDS/2016. :- 3 -: ASSESSING OFFICER THAT HE HAD MADE NO SUCH INVESTME NTS. THEREUPON, LD. ASSESSING OFFICER ADDRESSED A LETTER TO THE BRA NCH MANAGER, M/S. KOTAK MAHINDRA BANK, COIMBATORE SEEKING CONFIRMATIO N. THE MANAGER INFORMED THE LD. ASSESSING OFFICER THAT ASSESSEE HA D NOT MADE ANY INVESTMENTS IN BONDS/DEBENTURES THROUGH THEIR BANK BUT HAD CASH DEPOSITS AGGREGATING C21,04,000/- IN HIS ACCOUNT DU RING THE RELEVANT PREVIOUS YEAR. LD. ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE DEPOSITS. THEREUPON, THE ASSESSE E MADE THE FOLLOWING SUBMISSIONS. 'WITH REFERENCE TO THE ABOVE ASSESSMENT YEAR, I WAS ASSESSED WITH AN INCOME OF 21,04,000 U/S-69 AS INVESTMENT FOR ACQUIRING BONDS/DEBENTURES IN KOTAK MAHINDRA BANK. I AM HAVING AN SB A/C WITH KOTAK MAHINDRA BANK AND I HAVE NOT INVESTED IN ANY BONDS/DEBENTURES IN THE SAID BANK. I WAS ENGAGED IN TRADING OF OLD TELEVISION SETS ON COMMISSION BASIS AND THE SAID AMOUNT OF 21,04,000 WAS REMITTED INTO MY SAVINGS BANK ACCOUNT AS SALE PROCEEDS. I HAVE ALSO WITHDRAWN 20,12,650 FROM THE SAME BANK ACCOUNT FOR THE PURCHA SES EFFECTED BY ME. I REQUEST YOU TO ADOPT A REASONALE PROFIT MARGIN FOR THE CASH REMITTANCE OF 21,04,000/- TO ESTIMATE MY INCOME AND COMPLETE THE ASSESSMENT. HOWEVER, IT SEEMS ASSESSEE WAS NOT ABLE TO PRODUCE EVIDENCE IN SUPPORT OF ITS CLAIM OF BUSINESS OF OLD TELEVISION SETS. LD. ASSESSING OFFICER THEREAFTER, COMPLETED THE ASSESSMENT ASSES SING THE INCOME AT WHICH AS DONE IN THE ORIGINAL ASSESSMENT. ITA NO. 2806/MDS/2016. :- 4 -: 3. ASSESSEES APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS), IN THE SECOND ROUND ALSO DID NOT MEET WI TH ANY SUCCESS. AS PER THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN TRADING IN OLD TV SETS. 4. NOW BEFORE ME, LD. AUTHORISED REPRESENTATIVE STRONG LY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) SUBMITTED THAT ASSESSEE WAS HAVING EVIDENCE IN THE NATURE OF PURCHASE BILLS AND SALES BILLS FOR PROVING THE EXI STENCE OF BUSINESS OF OLD TV SETS. FURTHER, ACCORDING TO HIM, THERE WERE WITHDRAWALS OF C20,12,650/- FROM THE VERY SAME BANK ACCOUNT, BUT THE ADDITION WAS MADE CONSIDERING ONLY THE DEPOSITS. 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT AS SESSEE COULD NOT PRODUCE ANY EVIDENCE FOR THE BUSINESS OF TRADING I N OLD TV SETS CLAIMED TO HAVE BEEN CONDUCTED BY HIM. ASSESSEE WA S GIVEN MORE THAN ENOUGH OPPORTUNITIES BY THE LOWER AUTHORITIES TO PRODUCE EVIDENCE FOR SUCH BUSINESS THAT TOO IN TWO ROUNDS O F PROCEEDINGS. ASSESSEE HAVING FAILED TO UTILIZE ANY OF THESE OPPO RTUNITIES, I AM NOT INCLINED TO ACCEPT THE CONTENTION OF THE LD. AUTHOR ISED REPRESENTATIVE, ITA NO. 2806/MDS/2016. :- 5 -: THAT ASSESSEE WAS HAVING EVIDENCE TO PROVE EXISTENC E OF A BUSINESS AT THIS STAGE OF THE PROCEEDINGS. HOWEVER, WHEN CASH DEPOSITED IN A BANK ACCOUNT IS CONSIDERED FOR ADDITION, IT IS ONLY FAIR THAT WITHDRAWALS ARE ALSO TAKEN INTO ACCOUNT FOR SET OFF. IN OTHE R WORDS, LD. ASSESSING OFFICER SHOULD HAVE CONSIDERED ONLY THE PEAK CRED IT IN THE BANK ACCOUNT FOR MAKING AN ADDITION. SINCE THE PEAK CRE DIT HAS NOT BEEN WORKED OUT BY ANY OF THE LOWER AUTHORITIES, I REMIT THE ISSUE BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR WORKING OUT THE PEAK CREDIT. THE LD. ASSESSING OFFICER SHALL CONSIDER FOR ADDIT ION ONLY THE PEAK CREDIT IN THE BANK ACCOUNT OF THE ASSESSEE WITH M/ S. KOTAK MAHINDRA BANK, COIMBATORE FOR THE RELEVANT PREVIOUS YEAR. OR DERED ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 31 ST DAY OF MAY, 2017, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:31ST MAY, 2017 KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF