ACIT, CHENNAI V. A.Chelladurai, CHENNAI

ITA 378/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8253 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 17-10-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 18-02-2016
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN
• Keywords: Unexplained cash credit; Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , . !' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.378/MDS./2016 / ASSESSMENT YEAR : 2003-04 ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 7(1), 121 M G ROAD,CHENNAI-34. VS. SHRI A.CHELLADURAI, 102,4 TH MAIN ROAD, ANNA NAGAR WEST, CHENNAI -40. [PAN ADRPC 3699 R ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : MR.CLEMENT RAMESH KUMAR, JCIT DR /RESPONDENT BY : MR.T.VASUDEVAN,ADVOCATE / DATE OF HEARING : 17 - 1 0 - 201 6 !' / DATE OF PRONOUNCEMENT : 26 - 10 - 2016 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-7, CHENNA I DATED 04.12.2015 PERTAINING TO THE ASSESSMENT YEAR 2003- 04 . ITA NO. 378/MDS./2016 :- 2 -: 2. THE REVENUE HAS RAISED THE FOLLOWED GROUNDS FOR OUR ADJUDICATION. (A) LD.CIT(A) OUGHT NOT TO HAVE PARTLY ALLOWED T HE ADDITION MADE ON UNEXPLAINED CREDIT OF ` 96,33,228/-. (B) LD. CIT(A) ERRED IN ADOPTING GROSS PROFIT METHOD RELYING UPON ITO VS.SHRI VISHANLAL (ITA NO.634/LKW/W14) WHI CH IS NOT APPLICABLE TO THIS CASE AS THERE WERE CHEQUE DEPOSI TS FOR ` 77,73,740/- AND CASH DEPOSIT OF ` 18,59,488/- ONLY. (C) LD.CIT(A) OUGHT TO HAVE AFFORDED AN OPPORTU NITY TO THE AO UNDER RULE 46A WHILE ADMITTING FRESH EVIDENCES LIKE VOUCHERS/BILLS BEFORE ALLOWING THE APPEAL OF THE ASSESSEE WHICH WE RE NOT PRODUCED BEFORE THE AO. 3. THE FACTS OF THE ISSUE ARE THAT THE AO IN THE A SSESSMENT ORDER MADE AN ADDITION OF ` 1,19,98,680/- U/S.69 OF THE ACT IN VIEW OF UNDISCLOSED BANK ACCOUNT NO.CA2397 WITH INDIAN BANK ,ASHOK NAGAR BRANCH, CHENNAI. HOWEVER, THE LD.CIT(A) OBSERVED TH AT THE DEPOSIT IN THE BANK ACCOUNT IS IN BUSINESS RECEIPTS. HENCE, HE ESTIMATED THE INCOME OF ASSESSEE AT 8% OF THE TOTAL RECEIPTS TO ` 7,70,660/- AND ITA NO. 378/MDS./2016 :- 3 -: DELETED THE BALANCE ADDITION OF ` 1,19,98,680/-. AGAINST THIS THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, IT IS AN UNDISCLOSED AMOUNT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THERE IS A HEAVY BURDEN ON THE PART OF THE ASSESSEE TO SHOW THAT IT IS A BUSINESS RECEIPT, AND THERE IS A CORRESPONDING EXPENDITURE TOWARDS EARNING THAT RECE IPT. OTHERWISE IT IS TO BE DEEMED THAT ALL EXPENDITURE ALREADY TAKEN CAR E OF BY REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND EN TIRE DEPOSIT IN THE BANK ACCOUNT TO BE CONSIDERED AS UNEXPLAINED IN COME OF ASSESSEE. IN THIS BACKGROUND, WE ARE OF THE OPINION THAT LD.C IT(A) IS NOT JUSTIFIED IN ESTIMATING THE INCOME OF ASSESSEE AT 8% OF THE G ROSS DEPOSITS MADE BY THE ASSESSEE IN BANK ACCOUNT. ACCORDINGLY, WE REMIT THE ISSUE TO THE FILE OF AO TO EXAMINE THE ISSUE AFRESH AND DECIDE IN ACCORDANCE WITH LAW. WE MAKE IT CLEAR THAT THERE IS NO QUESTION OF ESTIMATION OF INCOME ON THIS BUSINESS RECEIPTS. IF THE ASSESSEE FAILED TO SHOW THE CORRESPONDING EXPENDITURE INCURRED FOR EAR NING OF INCOME, THE ENTIRE AMOUNT TO BE CONSIDERED AS TAXABLE INCOM E OF ASSESSEE. WITH THIS OBSERVATION, WE REMIT THE ISSUE TO THE FI LE OF AO FOR FRESH CONSIDERATION. ITA NO. 378/MDS./2016 :- 4 -: 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26 TH OCTOBER, 2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 26 TH OCTOBER, 2016. K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF