DCIT Corporate Circle 4(2), CHENNAI V. Srinivasan Venkatasubramanian, CHENNAI

ITA 2900/CHNY/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4193 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 29-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH : CHENNAI . , !' # $! # % . &' , ) + , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] ./I.T.A. NO.2900/CHNY/2017. / ASSESSMENT YEAR : 2013-2014. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(2) CHENNAI 600 034. VS. SRINIVASAN VENKATASUBRAMANIAN, NO.10, SRUSHTISTHAL, 2 ND CROSS STREET, R.A. PURAM, CHENNAI. 600 028. [PAN AADPV 2643M] ( -. / APPELLANT) ( /0-. /RESPONDENT) / APPELLANT BY : SMT. RUBY GEORGE, IRS, CIT. /RESPONDENT BY : SHRI. G.G. PRABHAKARAN, C.A. /DATE OF HEARING : 03-10-2018 ! /DATE OF PRONOUNCEMENT : 03-10-2018 1 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE DEPARTMENT, IT IS AGG RIEVED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED AN ADD ITION OF @72,50,000/- MADE BY THE LD. ASSESSING OFFICER U/S. 68 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). ITA NO.2900 /2017 :- 2 -: 2. FACTS APROPOS ARE THAT ASSESSEE HAD FILED HIS RET URN FOR THE IMPUGNED ASSESSMENT YEAR DISCLOSING INCOME OF @20,4 6,210/-. LD. ASSESSING OFFICER BASED ON INFORMATION PROVIDED BY THE LD. AUTHORISED REPRESENTATIVE DURING THE COURSE OF HEARING, CAME TO A CONCLUSION THAT A SUM OF @78,00,000/- DEPOSITED BY THE ASSESS EE IN CASH, IN AN ACCOUNT IN HIS NAME, MAINTAINED WITH CANARA BANK WA S NOT HAVING EXPLAINABLE SOURCE. THOUGH THE ASSESSEE SUBMITTED THAT SUCH MONEY WAS PAID TO THE ASSESSEE BY A COMPANY CALLED M/S. K GEYEE RESIDENCY P. LTD, IN WHICH HE WAS A DIRECTOR, FOR MAKING PUR CHASES, THIS WAS NOT ACCEPTED BY THE LD. ASSESSING OFFICER. ACCORDING T O THE LD. ASSESSING OFFICER, ASSESSEE COULD NOT PROVE THE NEXUS BETWEEN CASH DEPOSITS MADE IN HIS ACCOUNT AND THE WITHDRAWALS FROM THE BA NK ACCOUNT OF M/S. KGEYEE RESIDENCY P. LTD. HE MADE AN ADDITION OF @78,00,000/- U/S.68 OF THE ACT. 3. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). CONTENTION O F THE ASSESSEE WAS THAT HE WAS IDENTIFYING NEW SUPPLIERS FOR M/S. KGEYEE RESIDENCY P. LTD AND THE MONEY WAS GIVEN BY THE COMPANY TO HIM, FOR EFFECTING PURCHASES ON BEHALF OF THE SAID COMPANY. ASSESSEE SUBMITTED AN UNDERTAKING DATED 24.08.2017 OF M/S. K GEYEE RESIDENCY P. LTD WHICH INTER ALIA STATED AS UNDER:- ITA NO.2900 /2017 :- 3 -: SL.NO WITHDRAWAL AMOUNT WITHDRAWN BAN K NAME CHEQUE NO. 1 02.02.2012 @8,00,0000 SBT, RA PURAM 126053 2 04.01.2012 @1,00,0000 SBT, RA PURAM 126057 3 18.01.2012 @1,00,0000 SBT, RA PURAM 126068 4 02.02.2012 @8,00,0000 SBT, RA PURAM 126080 5 08.02.2012 @1,00,0000 SBT, RA PURAM 126087 6 11.02.2012 @10,00,0000 SBT, RA PURAM 126090 7 29.02.2012 @1,50,0000 SBT, RA PURAM 138622 8 03.03.2012 @11,00,0000 SBT, RA PURAM 138629 9 10.03.2012 @11,00,0000 SBT, RA PURAM 126096 10 21.03.2012 @2,00,0000 SBT, RA PURAM 138634 11 28.03.2014 @2,00,0000 SBT, RA PURAM 138636 12 28.03.2012 @5,00,0000 SBT, RA PURAM 138637 13 31.03.2012 @11,00,0000 SBT, RA PURAM 138640 ASSESSEE ALSO FILED AN AFFIDAVIT STATING THAT MONEY RECEIVED BY HIM FROM THE COMPANY WERE DEPOSITED IN THE BANK ACCOUN T. 4. LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE ABOVE SUBMISSIONS DELETED THE ADDIT ION MADE BY THE LD. ASSESSING OFFICER. OBSERVATIONS OF THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) WERE AS UNDER:- 7. THE OBSERVATION OF THE LD. ASSESSING OFFICER AS WELL AS THE CONTENTIONS OF THE ASSESSEE BEFORE THE UNDERSIGNED ARE VERIFIED. THE ASSESSEE COMPANY CLEARLY WITHDRAWN A N AMOUNT OF @72.50 LAKHS FROM STATE BANK OF TRAVANCORE, R.A. PURAM, CHENNAI BRANCH. THE SAID AMOUNT IS ALSO REFLECTED I N THE FINANCIALS OF THE ASSESSEE COMPANY M/S. KGEYES RES IDENCY PVT. LTD. THE ASSESSEE IS THE MAJORITY SHAREHOLDER AS WELL AS DIRECTOR OF THE COMPANY. IT IS QUIRE POSSIBLE THAT THE AMOUNT OF @72.50 LAKHS IS DEPOSITED IN THE BANK ACCOUNT OF THE DIRECTOR AND SUBSEQUENTLY TRANSFERRED BACK TO THE C OMPANY. HOWEVER, IT IS SEEN THAT THE TOTAL AMOUNT WITHDRAWN BY THE COMPANY IS ONLY AN AMOUNT OF @72,50,000/- AS AGAINS T THE ITA NO.2900 /2017 :- 4 -: AMOUNT OF @78 LAKHS DEPOSITED BY THE DIRECTOR. TO THIS EXTENT, THERE IS A SHORTFALL OF @5,50,000/- FOR WHI CH THE ASSESSEE DOES NOT HAVE ANY EXPLANATION. THIS AMOUN T OF @5,50,000/- IS UPHELD TO BE ADDED U/S.68 OF THE I.T . ACT FOR ASSESSMENT YEAR 2013-14. THE BALANCE AMOUNT OF @72,50,000/- IS HELD AS EXPLAINED ON ACCOUNT OF THE WITHDRAWAL MADE BY THE COMPANY PRIOR TO 23.04.2012. THE ASSESSEE GETS PARTIAL RELIEF. 5. NOW BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE S TRONGLY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) SUBMITTED THAT UNDERTAKING GIVEN BY M/S. KGEYEE RES IDENCY P. LTD AND THE AFFIDAVIT OF THE ASSESSEE WERE NEVER PLACED BEFORE THE LD. ASSESSING OFFICER BY THE ASSESSEE. ACCORDING TO TH E LD. DEPARTMENTAL REPRESENTATIVE, EVEN THE BALANCE SHEET OF THE M/S. KGEYEE RESIDENCY P. LTD WAS NOT EXAMINED BY THE LD. COMMISSIONER O F INCOME TAX (APPEALS) BEFORE ACCEPTING THE CONTENTION OF THE AS SESSEE THAT THE MONEY DEPOSITED IN HIS BANK ACCOUNT CAME FROM M/S. KGEYEE RESIDENCY P. LTD . THUS, ACCORDING TO HER, LD. COM MISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE WITHOU T ANY GOOD REASON. 6. PER CONTRA, LD. AUTHORISED REPRESENTATIVE STRONGLY SUPPORTING THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) SUBMITTED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD G IVEN RELIEF AFTER FINDING THAT ASSESSEE HAD RECEIVED THE MONEY FROM M/S. KGEYEE RESIDENCY P. LTD AND DEPOSITED IT IN HIS BANK ACCOU NT. ITA NO.2900 /2017 :- 5 -: 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT DISPUTE D THAT ASSESSEE HAD DEPOSITED @78,00,000/- IN HIS PERSONAL BANK ACCOUNT WITH CANARA BANK. CONTENTION OF THE ASSESSEE BEFORE LOWER AUTHORITIES WAS THAT THE AMOUNTS SO DEPOSITED IN THE BANK ACCOUNT WERE ADVAN CED TO IT BY M/S. KGEYEE RESIDENCY P. LTD, OF WHICH HE WAS A DIR ECTOR, FOR EFFECTING PURCHASES ON THEIR BEHALF. IF THIS CONTENTION IS TR UE, ASSESSEE SHOULD APPEAR AS A DEBTOR IN THE BALANCE SHEET OF M/S. KGE YEE RESIDENCY P. LTD. WITHDRAWALS MADE BY THE ASSESSEE FROM M/S. KG EYEE RESIDENCY P. LTD HAVE TO BE REFLECTED IN THE ACCOUNT OF THE SAID COMPANY. NONE OF THE LOWER AUTHORITIES HAD VERIFIED THE BOOKS OF ACCOUNTS OF M/S. KGEYEE RESIDENCY P. LTD WITH REGARD TO THE TRANSACT IONS CLAIMED BY THE ASSESSEE TO HAVE ITS ORIGINATING SOURCE AS THE SA ID COMPANY. THAT APART, THE UNDERTAKING DATED 24.08.2017 OF M/S. KGE YEE RESIDENCY P. LTD WAS FIRST TIME PRODUCED BY THE ASSESSEE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). AFFIDAVIT FILED BY THE ASS ESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS ALSO NOT B EFORE LD. ASSESSING OFFICER. CONSIDERING ALL THESE, WE ARE OF THE OPINION THAT THE MATTER REQUIRES A FRESH LOOK BY THE LD. ASSESSING O FFICER. THE QUESTION WHETHER ASSESSEEIS ABLE TO EXPLAIN THE SOURCE OF TH E CASH DEPOSITS IN HIS ACCOUNT WITH CANARA BANK IS REMITTED BACK TO TH E LD. ASSESSING OFFICER FOR CONSIDERATION AFRESH IN ACCORDANCE WIT H LAW. ITA NO.2900 /2017 :- 6 -: 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 3RD DAY OF OCTOBER 2018, AT CHENNA I. SD/- SD/- ( # $! # % . &' ) ( DUVVURU RL REDDY ) ) / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:3 RD OCTOBER, 2018. KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF