C. Francis Anthony, CHENNAI V. ITO, CHENNAI

ITA 3076/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7763 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Assessee Lawyers: J VINIL KUMAR
• Section: 147; 148

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL C / SMC BENCH, CHENNAI . . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO. 3076/MDS/2016 / ASSESSMENT YEAR : 2006-07 SHRI C. FRANCIS ANTHONY, C/O. M/S. V.S. JAGANATHAN & ASSOCIATES, CHARTERED ACCOUNTANTS, F2, NO.97/98, RK MUTT ROAD, CHENNAI 28. PAN : ADQPA7541M V. THE INCOME TAX OFFICER, BUSINESS WARD - 1(2), CHENNAI ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI J. VINIL KUMAR, CA /RESPONDENT BY : SHRI SANAT KUMAR RAHA, JCIT /DATE OF HEARING : 25.01.2017 /DATE OF PRONOUNCEMENT : 23.02.2017 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 10, CHENNAI DATED 14.09.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2006-07. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDITION OF 1,25,000/-. 2. SHRI J. VINIL KUMAR, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE INTRODUCED 1,25,000/- IN THE BALANCE SHEET AS CAPITAL. THE ASSESSEE HAS INCOME FROM BUSINESS. EARNING OF 1,25,000/- CANNOT BE DOUBTED BY THE ASSESSING OFFIC ER. ACCORDING TO 2 I.T.A. NO. 3076/MDS/2016 THE LD. REPRESENTATIVE FOR THE ASSESSEE, THE REOPEN ING ITSELF IS BAD IN LAW. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFIC ER CANNOT BE SUSTAINED. 3. SHRI SANAT KUMAR RAHA, THE LD. DEPARTMENTAL REPR ESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER REOPENED THE A SSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 196 1 (IN SHORT THE ACT) ON 31.03.2011. THE ASSESSEE HAS INTRODUCED 1,50,000/- IN THE BALANCE SHEET AS CAPITAL. THE ASSESSEE COULD NOT EXPLAIN T HE SOURCE FOR INTRODUCTION OF 1,25,000/-. THE ONLY SOURCE OF INCOME FOR THE ASSE SSEE IS THE BUSINESS. THE ASSESSEES WIFE IS NOT THE EA RNING MEMBER OF THE FAMILY. ONE OF THE CHILD IS STUDYING IX STANDARD I N THE SCHOOL. THE ASSESSEE HAS ALSO BORROWED LOAN FROM ICICI BANK TO THE EXTENT OF 31,388/-. IN THOSE CIRCUMSTANCES, THE ASSESSEE COU LD NOT EXPLAIN THE SOURCE FOR INTRODUCTION OF 1,25,000/- AS CAPITAL IN THE BALANCE SHEET. HENCE, THE CIT (APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE CHALLENGING THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF TH E ACT AND ALSO THE ADDITION MADE BY THE ASSESSING OFFICER ON MERIT. A DMITTEDLY, THE ADDITION MADE BY THE ASSESSING OFFICER IS INTRODUCTION OF CA PITAL OF 1,25,000/-. WHILE MAKING ADDITION OF 1,25,000/- THE ASSESSING OFFICER FAILED TO 3 I.T.A. NO. 3076/MDS/2016 APPRECIATE THE ECONOMIC CONDITION WHICH PREVAILS IN THE COUNTRY. THE ASSESSMENT YEAR UNDER SECTION IS 2006-07. THE SALA RY OF A LABOURER WAS 200/- PER DAY. IN A FAMILY OF HUSBAND AND WIFE, BO TH OF THEM GOES FOR COOLIE WORK, THEY CAN EARN 350/- TO 400/- PER DAY. IN THIS CASE THE ASSESSEE ADMITTEDLY DOING BUSINESS. THE ASSESSEE H AS ALSO BORROWED BUSINESS LOAN FROM ICICI BANK. TAKING INTO CONSIDE RATION OF THE ECONOMIC CONDITION WHICH PREVAILS IN OUR COUNTRY AN D ALSO THE FACT THAT THE ASSESSEE WAS ENGAGED HIMSELF IN THE BUSINESS, T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AS SESSING OFFICER TO THE EXTENT OF 1,25,000/- IS NOT JUSTIFIED. ACCORDINGLY THE ORDER S OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION OF RS.1,25,000/- IS DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 23 RD FEBRUARY, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, /DATED, THE 23 RD FEBRUARY, 2017. JR. ! ' ! /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. #$% ( )/CIT(A)-10, CHENNAI 4. #$% /CIT 5. ! /DR 6. &' /GF.