R MUNUSAMY, KANCHEEPURAM V. ITO, NCR WARD 5(5), CHENNAI

ITA 3166/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3281 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: P RANGA RAMANUJAM
• Keywords: Unexplained cash credit
• Section: 68; 143(3); 142(1)

Judgement Text

, ( ) , IN THE INCOME TAX APPELLATE TRIBUNAL , C (SMC) BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.3166/CHNY/2018 / ASSESSMENT YEAR: 2008-09) SHRI R. MUNUSAMY, NO.834/A, AYAPPAKKAM VILLAGE, THIRUKAZHUKUNDRAM VIA, KALPAKKAM, KANCHEEPURAM 603 102 VS THE INCOME TAX OFFICER, NON-COPORATE WARD 5(5), CHENNAI PAN: AVPPM5917N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI P. RANGA RAMANUJAM, CA / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT /DATE OF HEARING : 08.02.2019 /DATE OF PRONOUNCEMENT : 12.02.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI, DATED 17.09.2018 IN ITA NO.89/CIT(A)-5/2016-17 FOR THE ASSESSMENT YEAR 2008-09 PASSED U/S.250(6) R.W.S. 143(3) & 147 OF THE ACT. 2 ITA NO.3166/CHNY/2018 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD.AO WHO HAD MADE ADDITION OF RS.16,60,000/- TOWARDS UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING RENTAL INCOME, COMMISSION AND AGRICULTURAL INCOME. THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09. THE CASE WAS REOPENED U/S.147 OF THE ACT AND NOTICE U/S.148 & 142(1) OF THE ACT WAS ISSUED ON 26.03.2015 & 09.06.2015 RESPECTIVELY. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) R.W.S. 147 OF THE ACT ON 30.03.2016 WHEREIN THE LD.AO MADE SEVERAL ADDITIONS AMONGST WHICH ADDITION OF RS.16,60,000/- WAS MADE TOWARDS UNEXPLAINED CASH CREDITS. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAS INTRODUCED CASH OF RS.16,60,000/- IN HIS BOOKS OF ACCOUNTS. ON QUERY IT WAS EXPLAINED BY THE LD.AR THAT THE ASSESSEE HAD NOT ACTUALLY INTRODUCED CASH BUT THE ASSESSEES ACCOUNTANT HAD WRONGLY PASSED SUCH ENTRIES IN THE BOOKS OF ACCOUNTS. IT WAS FURTHER 3 ITA NO.3166/CHNY/2018 EXPLAINED THAT ASSESSEE HAD BROUGHT IN TO HIS BOOKS OF ACCOUNTS HIS FAMILY JEWELRY, PROPERTY RECEIVED OUT OF FAMILY SETTLEMENT, VACANT LAND PURCHASED IN SRI RAM NAGAR AND THE LAND & BUILDING IN SRI RAM NAGAR WHICH WERE ALL ASSETS NOT ACQUIRED DURING THE RELEVANT ASSESSMENT YEAR. HOWEVER REJECTING THE SUBMISSION OF THE LD.AR, THE LD.AO MADE ADDITION OF RS.16,60,000/- IN THE HANDS OF THE ASSESSEE INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. ON APPEAL THE LD.CIT(A) ALSO CONFIRMED THE ORDER OF THE LD.AO BY AGREEING WITH HIS VIEW. 5. BEFORE US THE LD.AR VIVIDLY EXPLAINED THE MISTAKES COMMITTED BY THE ACCOUNTANT WHILE WRITING THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE LD.AR ALSO PRODUCED THE BOOKS OF ACCOUNTS BEFORE US AND THE RELEVANT DOCUMENTS TO EXPLAIN THE SAME. ON PERUSING THE BOOKS OF ACCOUNTS AND THE RELEVANT DOCUMENTS WE FIND THAT THE ASSESSEES ACCOUNTANT HAD WRONGLY PASSED THE ENTRIES IN THE BOOKS OF ACCOUNTS. THE ASSESSEE HAS BROUGHT INTO HIS BOOKS OF ACCOUNTS THE FOLLOWING ASSETS; 1. AGRICULTURAL LAND RECEIVED ON 31.07.2007 FROM FAMILY SETTLEMENT (PAGE NO.114 TO 126 OF THE PB) RS.1,77,950/- 2. PURCHASE OF LAND IN SRI RAM NAGAR, PLOT NO.53 ON 22.11.2011 RS.2,90,000/- + STAMP & REGISTRATION 4 ITA NO.3166/CHNY/2018 CHARGES (PAGE NO.105 TO 113 OF THE PB) - RS.3,26,280/- 3. PURCHASE OF LAND IN SRI RAM NAGAR, PLOT NO.52 ON 04.12.2002 FOR RS.95,000/- + STAMP & REGISTRATION CHARGES +CONSTRUCTION OF BUILDING. - RS.7,04,537/- HOUSE TAX RECEIPT FROM 2006-07 TO 2008-09 DATED 16.07.2008 (PAGE NO.129 TO 135 OF PB) =========== TOTAL RS.12,08,767/- 4. JEWELRY - RS. 4,77,490/- =========== TOTAL RS.16,86,257/- =========== THE ASSESSEES ACCOUNT INSTEAD OF DEBITING THE ABOVE ASSETS AND CREDITING ASSESSEES CURRENT ACCOUNT HAS WRONGLY PASSED ENTRIES AS IF THE ASSESSEE HAS BROUGHT IN CASH AND PURCHASED THESE ASSETS DURING THE RELEVANT ASSESSMENT YEAR. THE LD.AR ALSO POINTED OUT BEFORE US THAT FOR THE ASSESSMENT YEAR 2012-13 THE LD.CIT(A) IN ITA NO.87/CIT(A)-5/2016-17 VIDE ORDER DATED 20.11.2017 (PB PAGE NO.39 TO 60), HAD CONFIRMED THE ADDITION OF RS.3,26,280/- WITH RESPECT TO PURCHASE OF VACANT LAND IN SRI RAM NAGAR PLOT NO.53 BECAUSE THE LAND WAS PURCHASED DURING THAT ASSESSMENT YEAR, THOUGH THE ASSESSEE HAS RECORDED THE SAME IN HIS BOOKS OF ACCOUNTS FOR THE ASSESSMENT YEAR 2008-09. THE LD.AR FURTHER STATED THAT THE ASSESSEE HAS NOT FILED ANY APPEAL WITH 5 ITA NO.3166/CHNY/2018 RESPECT TO THE ADDITION MADE FOR RS.3,26,280/-. ON PERUSING THE DOCUMENTS PRODUCED BEFORE US WE FIND MERIT IN THE SUBMISSION OF THE LD.AR. IN THIS SITUATION ADDITION OF RS.3,26,280/- ONCE AGAIN IN THE ASSESSMENT YEAR 2008-09 WOULD AMOUNT TO DOUBLE ADDITION. FURTHER CONSIDERING THE FINANCIAL STATUS OF THE FAMILY OF THE ASSESSEE, ADDITION OF RS.4,77,490/- TOWARDS THE JEWELRY OWNED BY THE ASSESSEE IS NOT WARRANTED BECAUSE ANY FAMILY OF THE ASSESSEES FAMILYS STATURE WOULD HAVE ACCUMULATED JEWELRY TO THAT EXTENT DURING THE EARLIER YEARS. THE ADDITION ON ACCOUNT OF THE LAND AND BUILDING AT PLOT NO.52 IN SRI RAM NAGAR IS ALSO NOT WARRANTED BECAUSE THESE ASSETS WERE ACQUIRED BY THE ASSESSEE IN THE EARLIER ASSESSMENT YEAR AND NOT DURING THE RELEVANT ASSESSMENT YEAR. THE ADDITION ON ACCOUNT OF LAND RECEIVED THROUGH FAMILY SETTLEMENT VALUED AT RS.1,77,950/- IS ALSO NOT WARRANTED BECAUSE THESE ASSETS WERE ALSO ACQUIRED BY THE ASSESSEES FAMILY DURING EARLIER ASSESSMENT YEARS AND NOT DURING THE RELEVANT ASSESSMENT YEAR. SINCE THE CASH CREDIT OF RS.16,60,000/- STANDING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE RELATES TO ALL THE ASSETS DISCUSSED HEREIN ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY THELD.AO IS ERRONEOUS AND WARRANTED. FROM THE FACTS OF THE CASE IT ALSO APPEARS THAT THE LD.CIT(A) HAS ALSO NOT CONSIDERED THE ISSUE 6 ITA NO.3166/CHNY/2018 IN THE CORRECT PROSPECTIVE. THEREFORE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF RS.16,60,000/- MADE IN THE HANDS OF THE ASSESSEE BY INVOKING THE PROVISION OF SECTION 68 OF THE ACT BECAUSE THE ASSESSEE HAS NOT ACTUALLY INTRODUCED CASH OF RS.16,60,000/- IN HIS BOOKS OF ACCOUNTS DURING THE RELEVANT ASSESSMENT YEAR BUT IT RELATES TO ALL THE ASSETS OWNED BY THE ASSESSEE EXPLAINED HEREINABOVE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 12 TH FEBRUARY, 2019 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 12 TH FEBRUARY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF