ACIT, Tiruppur V. Shri S.N. Saravanan, Tiruppur

ITA 3112/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7496 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Keywords: Unexplained cash credit; Gift; Peak credit; Additional evidence
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . . , !'. . # $ % , ' () BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.3112/MDS/2016 * +* /ASSESSMENT YEAR: 2013-14 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2, TIRUPUR. VS. SHRI S.N.SARAVANAN, NEW NO.30, KVR LAYOUT, ELEMENTARY SCHOOL STREET, KARUVAMPALAYAM, TIRUPUR-641 604 [PAN: DSTPS 8435 P ] ( ,- /APPELLANT) ( ./,- /RESPONDENT) ,- 0 1 / APPELLANT BY : MR.SUPRIYO PAL, JCIT ./,- 0 1 /RESPONDENT BY : NONE # 0 2' /DATE OF HEARING : 17.01.2017 34+ 0 2' /DATE OF PRONOUNCEMENT : 17.03.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 21.09.2016 OF COMMISSIONER OF INCOME TAX (APPEALS)- 3, CHENNAI, IN ITA NO.75/16-17 FOR THE AY 2013-14 AND RAISED THE FOLLO WING GROUNDS: I. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S. 68? II. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS JUSTIFIED IN ADMITTING FRESH EVIDENCE WITHOUT CALLI NG FOR REMAND REPORT FROM ASSESSING OFFICER CONTRAVENING RULE 46A? ITA NO.3112/MDS/2016 :-2-: III. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS JUSTIFIED IN HOLDING THAT THERE IS NO NECESSITY FOR ADDITION FOR PEAK CREDIT WHILE REPRESENTATIVE OF THE ASSESSEE AGREED FOR MAKING TH E ADDITION OF PEAK CREDITS AS UNEXPLAINED CREDITS U/S.68 DURING THE COURSE OF ASS ESSMENT PROCEEDINGS? IV. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDER OF THE LD. CIT(A) MAY BE CANCELLED AND THAT OF ASSE SSING OFFICER RESTORED. 2.0 ALL THE GROUNDS OF THE APPEAL ARE RELATED TO THE A DDITION MADE U/S.68 OF THE INCOME TAX ACT. THE ASSESSEE FILED RE TURN OF INCOME ADMITTING TOTAL INCOME OF 18,20,030/- AND DURING THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (HERE INAFTER REFERRED TO AS AO) FOUND CASH DEPOSITS IN THE BANK ACCOUNT TO TH E TUNE OF 1.38 CR. THE AO CALLED FOR THE EXPLANATION OF THE ASSESSEE A ND THE ASSESSEE EXPLAINED THAT THE SOURCE WAS ROTATION OF CASH WITH DRAWALS MADE FROM THE BANK ACCOUNT. THE AO EXAMINED THE EXPLANATION OFFE RED BY THE ASSESSEE REGARDING WITHDRAWALS FROM THE BANK ACCOUNT AND CON SEQUENT DEPOSITS AND THE ASSESSEE COULD NOT EXPLAIN THE CIRCULATION OF WITHDRAWALS MADE FROM THE BANK ACCOUNT WITH EVIDENCE. THEREFORE, FRO M THE BANK STATEMENT THE AO WORKED OUT PEAK CREDITS WHICH WORKED OUT TO 42,82,500/- AND CALLED FOR EXPLANATION FROM THE ASSESSEE. AT THE TI ME OF HEARING BEFORE THE AO, THE LEARNED AUTHORIZED REPRESENTATIVE (HERE INAFTER REFERRED TO AS LD.AR) OF THE ASSESSEE AGREED THE PEAK DEPOSITS O F 42,82,500/- NOT ACCOUNTED AND AGREED FOR THE ADDITION AS PER THE ORDER SHEET ENTRY DATED 28.03.2016. ACCORDINGLY, THE AO MADE THE ADD ITION OF 42,82,500/- AND COMPLETED THE ASSESSMENT ON TOTAL I NCOME OF 61,05,533/- . ITA NO.3112/MDS/2016 :-3-: 3.0 AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE WENT ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA L) (HEREINAFTER REFERRED TO AS LD.CIT(A)) AND THE LD.CIT(A) DELET ED THE ADDITION HOLDING THAT THERE WAS ADEQUATE CASH BALANCES AVAILABLE AS PER THE CASH FLOW STATEMENT AND NO ADDITION IS CALLED FOR. AGGRIEVED BY THE ORDER OF THE CIT(A) THE DEPARTMENT FILED APPEAL BEFORE US. 4.0 APPEARING FOR THE REVENUE, THE LEARNED DEPARTMENTA L REPRESENTATIVE (HEREINAFTER REFERRED TO AS LD.DR) ARGUED THAT AT THE TIME OF ASSESSMENT PROCEEDINGS, THE AO FOUND CASH DEPOSI TS OF 1.38 CR. IN THE BANK ACCOUNTS, THOUGH THE SOURCE WAS EXPLAINED AS WITHDRAWALS FROM THE BANK ACCOUNT, THE SAME COULD NOT BE ESTABLISHED BY THE ASSESSEE WITH RELEVANT EVIDENCES. THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE OR PROPER EXPLANATION WITH RESPECT TO SOUR CE OF CASH DEPOSITS AND HENCE THE LD.AR OF THE ASSESSEE AGREED FOR THE ADDITION AND SIGNED THE ORDER SHEET. THIS AMPLY CLEARS THAT NO DETAILS HAVE BEEN FURNISHED AND NO EXPLANATION HAS BEEN FURNISHED BY THE ASSESS EE AT THE TIME OF ASSESSMENT. THOUGH, THE ASSESSEE HAS AGREED FOR TH E ADDITION BEFORE THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT(A ) AND FURNISHED THE CASH BOOK AND CASH FLOW AND PROOF OF GIFT FROM HIS FATHER AND EVIDENCES FOR AGRICULTURAL INCOME OF HIS FATHER WHICH WAS AN AFTERTHOUGHT. ALL THESE EVIDENCES WERE NEVER FILED BEFORE THE AO. THE LD.C IT(A) ACCEPTED THE ADDITIONAL EVIDENCE WITHOUT GIVING OPPORTUNITY TO T HE FILE OF THE AO UNDER RULE 46A OF THE INCOME TAX ACT. THEREFORE, THE LD. DR ARGUED THAT SINCE ITA NO.3112/MDS/2016 :-4-: THE ASSESSEE HAS ACCEPTED THE ADDITION BEFORE THE A O EITHER THE ADDITION SHOULD BE CONFIRMED OR AT BEST THE SAME SHOULD BE R EMITTED BACK TO THE FILE OF THE AO FOR VERIFICATION OF THE GENUINENESS OF THE SOURCE AND TO EXAMINE THE ADDITIONAL EVIDENCES SUBMITTED BEFORE T HE LD.CIT(A). NONE APPEARED ON BEHALF OF THE ASSESSEE. 5.0 WE HEARD THE ARGUMENT OF THE LD.DR AND GONE THROUG H THE ORDERS OF THE LOWER AUTHORITIES. DURING THE ASSESSMENT PROCEEDINGS, IT IS CLEAR FRO M THE ASSESSMENT ORDER THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURC E OF CASH DEPOSITS MADE IN THE BANK. THEREFORE, THE AO HAS ARRIVED AT THE PEAK CREDITS AND ASKED FOR THE EXPLANATION OF THE ASSESSEE. THE ASS ESSEE DID NOT EXPLAIN THE SOURCE OF PEAK CREDITS AND AGREED FOR THE ADDIT ION. THEREFORE, IT IS EVIDENT THAT THE AO HAS CONFRONTED THE UNEXPLAINED DEPOSITS WITH THE ASSESSEE AND THE LD.AR OF THE ASSESSEE ACCEPTED THE ADDITION BY ORDER SHEET NOTING DATED 28.03.2016. THEREFORE, WHATEVER THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE LD.CIT (A), CONSTITUTE AN ADDITIONAL EVIDENCE AND THE LD.CIT(A) REQUIRED TO G IVE AN OPPORTUNITY TO THE AO BY CALLING FOR THE REMAND REPORT. IN THE IN STANT CASE, THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNTS, CASH F LOW STATEMENT, AND CONFIRMATION FROM HIS FATHER AND EXPLAINED THAT APP ELLANTS FATHER HAS AGRICULTURAL INCOME. THE LD.CIT(A) WITHOUT GIVING AN OPPORTUNITY TO THE AO, DELETED THE ADDITION MADE BY THE AO. THEREFORE , WE ARE OF THE CONSIDERED OPINION THAT THE CASE SHOULD BE REMITTED BACK TO THE FILE OF THE ITA NO.3112/MDS/2016 :-5-: AO FOR EXAMINING THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. ACCORDINGLY, THE CASE IS REMITTED BACK TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE SOURCE OF CREDITS AND RE-DO THE ASSE SSMENT AFRESH ON MERITS. THE ASSESSMENT IS SET-ASIDE DE NOVO . 6.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MARCH, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( !' . . # $ % ) (D.S.SUNDER SINGH) ' /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED: 17 TH MARCH, 2017. TLN 0 .2$6 76+2 /COPY TO: 1. ,- /APPELLANT 4. # 82 /CIT 2. ./,- /RESPONDENT 5. 69 .2 /DR 3. # 82 ( ) /CIT(A) 6. '* < /GF