ITO, Kollam V. M/s Santhos Financiers, Kollam

ITA 368/COCH/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0845 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 19-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T J VINCENT
• Assessee Lawyers: A S NARAYANAMOORTHYCA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.368/COCH/2009 ASSESSMENT YEAR:2001-02 THE INCOME - TAX OFFICER , WARD-3, KOLLAM. VS. M/S. SANTHOSH FINANCIERS, PLAVILAYIL COMPLEX,ANCHAL. PA NO.AAYPS 0039D (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI T.J.VINCENT, JR.DR RESPONDENT BY SHRI A.S.NARAYANAMOORTHY,CA O R D E R PER N.VIJAYAKUMARAN,J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(APPEALS)-I, TRIVANDRUM. THE ORDER IS DATED 14-01-2009. THE ASSESSMENT YEAR INVOLVED IS 2001- 02. 2. THOUGH THE REVENUE HAS RAISED AS MANY AS FIVE GROUNDS, IT CENTRE AROUND THE ISSUE OF DELETION OF ADDITION OF RS.9 LAKHS MADE U/S.68 (GROUND NO.2) AND VIOLATION OF RULE 46A OF THE I.T.RULES (GROUND NO.4). 3. THE FACTS RELEVANT ARE THAT THE ASSESSEE IS A FI RM ENGAGED IN MONEY LENDING BUSINESS. INITIALLY, THE INTIMATION ITA NO. 368/COCH/2009 M/S. SANTHOSH FINANCIERS. 2 WAS GIVEN BY ACCEPTING THE RETURN. THEREAFTER, TH E ASSESSMENT WAS RE-OPENED ON THE GROUND THAT RS. 9 L AKHS WHICH WAS SHOWN AS SUSPENSE DEPOSIT IN THE SCHEDULE OF FIXED DEPOSITS IN THE LIABILITY SIDE OF THE BALANCE -SHEET FOR THE FINANCIAL YEAR ENDING WITH 31-03-2001 RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEES EXPL ANATION IS THAT THIS IS THE DEPOSIT REPRESENTS FUNDS BROUGH T IN BY THE PARTNERS OF THE FIRM OVER AND ABOVE THEIR CAPITAL A BOUT SEVEN YEARS BACK. THE STAND OF THE ASSESSEE IN THE RE-AS SESSMENT PROCEEDINGS WOULD BE THAT THIS AMOUNT SHOULD HAVE B EEN EXCESS OF INTEREST COLLECTED AND OFFERED YEAR AFTER YEAR, WHICH HAS BEEN DISCLOSED DURING THE EARLIER YEARS. IN OTHER WORDS, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE F OR THE FIRST TIME BEFORE THE LD. CIT(APPEALS) THAT IN EFF ECT THIS AMOUNT WAS THE INCOME OFFERED TO TAX IN THE ASSESSM ENT YEAR 1997-98 AND THE LD. CIT(APPEALS) WAS OF THE VI EW THAT THIS SUM OF RS.9 LAKHS WAS SPECIFICALLY SHOWN ON TH E FACE OF THE BALANCE-SHEET AND THIS WAS OFFERED TO TAX IN TH E ASSESSMENT YEAR 1997-98. BASED ON THIS, AS IT IS ALREADY REFLECTED IN THE EARLIER ASSESSMENT YEAR 1997-98 AN D OFFERED AS INCOME IN THAT YEAR, THE LD. CIT(APPEALS) ALLOWE D THE APPEAL. ITA NO. 368/COCH/2009 M/S. SANTHOSH FINANCIERS. 3 4. BEFORE US THE LD. D.R. WOULD CONTEND THAT THE SUBMISSION OF THE ASSESSEE THAT RS.9 LAKHS WAS OFFE RED IN EARLIER YEARS PARTICULARLY IN THE ASSESSMENT YEAR 1 997-98 WAS NOT AT ALL ADVANCED IN THE ASSESSMENT PROCEEDIN GS. FIRST TIME IT WAS ARGUED BEFORE THE LD. CIT(APPEALS ). THE LD. CIT(APPEALS) HAS NOT CALLED FOR A REMAND REPORT NOR GIVEN OPPORTUNITY TO THE ASSESSING OFFICER TO REPUD IATE THE SAME. THE LD. D.R. FURTHER SUBMITTED THAT THE FIN DING OF THE LD. ASSESSING OFFICER THAT THIS SUM OF RS.9 LAKHS S HOWN ON THE LIABILITY SIDE OF THE ASSESSEES BALANCE-SHEET AS AT THE END OF THE PREVIOUS YEAR AS SUSPENSE DEPOSIT. NO C ONSISTENT STAND HAS BEEN TAKEN BY THE ASSESSEE. THIS FACT H AS NOT BEEN PROPERLY APPRECIATED BY THE LD. CIT(APPEALS)\. IN OTHER WORDS, THE OBJECTION FROM THE SIDE OF THE REV ENUE IS THAT WHEN THE ASSESSEE FAILED TO PROVE SATISFACTORI LY THE SOURCE AND NATURE OF THE DEPOSIT, IT IS NOT NECESSA RY FOR THE DEPARTMENT TO LOCATE ITS EXACT SOURCE. THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE IS ON THE ASSESSEE AN D WHEN IT IS NOT SATISFACTORILY EXPLAINED, IT IS OPEN TO T HE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE IN THE R ELEVANT ASSESSMENT YEAR AND NO FURTHER BURDEN LIES ON THE R EVENUE TO SHOW THAT THE INCOME IS FROM ANY OTHER PARTICULA R SOURCE. ITA NO. 368/COCH/2009 M/S. SANTHOSH FINANCIERS. 4 THEREFORE, THE LD. DR WOULD SUBMIT THAT THE SOURCE OF THE SAID SUM OF RS.9 LAKHS REMAINED UNEXPLAINED. THER EFORE, IT HAS BEEN RIGHTLY BROUGHT AS ASSESSEES INCOME FROM OTHER SOURCE. HENCE, THE DEPAPRPTMENTAL APPEAL HAS TO BE ALLOWED. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE FINDINGS OF THE LD. CIT(APPEALS) AND RELIED ON THE SAME. THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED A PAPER BOOK CONTAINING PAGES 1 TO 31 CERTIFIED AS PA PERS FILED BEFORE THE LD. CIT(APPEALS) IN THE APPELLATE PROCEE DINGS. 6. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION ON MERITS AND IN ACCORDANCE WITH LAW. THE REASON BEING IS T HAT THE ABOVE SUM OF RS.9 LAKHS HAS ALREADY SHOWN IN THE BO OKS. THE ASSESSEE HAS TAKEN IN-CONSISTENT STAND. THE B URDEN IS ON THE ASSESSEE TO PROVE THE SOURCE AND THE NATURE OF ANY RECEIPT TO THE SATISFACTION OF THE ASSESSING OFFICE R. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(AP PEALS) AND REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING O FFICER WHO WILL DECIDE THE ISSUE IN ACCORDANCE WITH LAW, AFTER AFFORDING ITA NO. 368/COCH/2009 M/S. SANTHOSH FINANCIERS. 5 SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE IS AT LIBERTY TO ADDUCE ANY EVIDENCE IN SU PPORT OF ITS CLAIM AND TO DISCHARGE THE BURDEN CAST ON IT. 7. IN THE RESULT, REVENUES APPEAL IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 09 TH MARCH,2011. PM. COPY FORWARDED TO: 1. THE INCOME-TAX OFFICER,WARD-3, KOLLAM. 2. M/S. SANTHOSH FINANCIERS, PLAVILAYIL COMPLEX,ANCHAL . 3. CIT(A)-I, TRIVANDRUM. 4. CIT, TRIVANDRUM. 5. D.R.