E.Mohan, CHENNAI V. ITO, CHENNAI

ITA 294/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3990 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 12-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N VIJAYAKUMAR
• Assessee Lawyers: A V SREEKANTH
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.294/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) MR. E.MOHAN, NO.14, OLD NO.31, OFFICERS COLONY, 4 TH CROSS STREET, MOGAPPAIR, CHENNAI-600 050. VS THE INCOME TAX OFFICER, WARD-XIII(4), CHENNAI. PAN: AAGPM9228C ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.V.SREEKANTH, JCIT /RESPONDENT BY : MR. N.VIJAYAKUMAR, C.A. /DATE OF HEARING : 31 ST AUGUST,2016 /DATE OF PRONOUNCEMENT : 23 RD NOVEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)- 7, CHENNAI DATED 30.11.2015 IN ITA NO.29/CIT(A)-7/ 2014-15 PASSED UNDER SECTION 143(3) R.W.S. 250(6) OF THE AC T. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPEAL; HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ORDER OF THE LEARNED ASSESSING OFFICE R WHO HAD MADE ADDITION OF RS.17,27,327/- ON ESTIMATE BASIS. 2 ITA NO.294/MDS/2016 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF GRANITE EXPOR T, LODGING AND FINANCE IN THE NAME OF M/S. SRI MARUTHI EXPORTS , M/S MARUTHI RESIDENCY, AND M/S. SREE MARUTHI FINANCE RESPECTIVELY, FILED HIS RETURN OF INCOME FOR THE AS SESSMENT YEAR 2011-12 ON 30.09.2011. THE CASE WAS SELECTED F OR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED ON 01.08.2012. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLE TED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 143( 3) OF THE ACT ON 11.03.2014 WHEREIN HE MADE CERTAIN ADDITIONS AMONGST WHICH ONE OF THE ADDITION WAS RELATED TO FI NANCE BUSINESS AMOUNTING TO RS.17,27,327/-. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT, IT WAS OBSERVED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD NOT MAINTAINED PROPER BOOKS OF ACCOUNTS IN RESP ECT OF FINANCE BUSINESS, HOWEVER HAD ADMITTED INCOME OF RS.3,74,540/- DURING THE RELEVANT ASSESSMENT YEAR. ON PERUSING THE BANK ACCOUNT MAINTAINED BY THE ASSESSE E IN AXIS BANK, SHENOY NAGAR, IT WAS OBSERVED THAT THE A SSESSEE HAD CREDITS & DEBITS AMOUNTING TO RS.2,16,03,665/-. THE 3 ITA NO.294/MDS/2016 LEARNED ASSESSING OFFICER OPINED THAT THE INCOME OF THE ASSESSEE OUGHT TO BE AT LEAST 15% OF RS.2,16,03,665 /- AND AFTER PROVIDING FOR EXPENDITURE 10% AND ACCORDINGLY ARRIVED AT THE PROFIT OF RS.21,02,867/-. SINCE THE ASSESSEE HAD ALREADY DECLARED PROFIT OF RS.3,75,540/-, THE LEARN ED ASSESSING OFFICER MADE AN ADDITION OF RS. 17,27,327 /- (21,02,867 3,75,540). 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) ACCEPTED THE VIEW OF THE LEARNED ASSESSIN G OFFICER AND CONFIRMED HIS ORDER. 6. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE PROFIT ESTIMATED BY THE LEARNED ASSESSING OFFICER IS ON THE HIGHER SIDE AND PRAYED FOR FURTHE R RELIEF. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, ARGUED IN SUPPORT OF THE ORDERS OF THE REVENU E. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT NEITHER THE REVENUE HAD WORKED OUT THE IDLE 4 ITA NO.294/MDS/2016 PERIOD IN DEPLOYING THE FUNDS NOR THE ASSESSEE HAS FURNISHED THE DETAILS OF THE SAME. IN THIS SITUATION, WE ARE OF THE CONSIDERED VIEW THAT 30% OF THE ADDITION SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SHOULD BE DISCOUNTED CONSIDERING THE IDLE PERIOD IN DEPLOYING THE FUNDS IN THE BUSINESS OF FINANCE. ACCORDINGLY, WE HEREBY DIRECT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO GRA NT RELIEF OF RS.5,00,000/- AND THEREBY SUSTAIN THE ADDITION O F RS.12,27,327/- (RS.17,27,327 RS.5,00,000). 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD NOVEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 23 RD NOVEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF