ITO, CHENNAI V. Radhakrishnan Gangadharan, CHENNAI

ITA 384/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68691 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE DR.O.K. NARAYANAN, VICE-PRESIDENT & SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 384/MDS/2013 ASSESSMENT YEAR 2008-09 THE INCOME TAX OFFICER, BUSINESS WARD XIII(2), ROOM NO.606, NEW BLOCK, VI FLOOR, AAYAKAR BHAVAN, 121, UTHAMAR GANDHI SALAI, NUNGAMBAKKAMM, CHENNAI 600 034. VS. SRI RADHAKRISHNAN GANGADHARAN, NO.2, STRINGER STREET, BROADWAY, CHENNAI 600 108. [PAN : AEEPG6655B] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. MADHAVAN, JCIT RESPONDENT BY : NONE DATE OF HEARING : 10.09.2013 DATE OF PRONOUNCEMENT : 10.09.2013 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) XII, CHENN AI DATED 19.11.2012 RELEVANT TO THE ASSESSMENT 2008-09. 2. THE FIRST GROUND OF APPEAL RELATING TO ADDITION IN RESPECT OF RECOVERY OF LOAN FROM SHRI ABDUL RASHEED OF ` .3,67,580/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS NOT FILED ANY I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 38 88 84 44 4/M/ /M/ /M/ /M/13 1313 13 2 DETAILS IN RESPECT OF THE RECOVERY OF LOAN FROM SHR I ABDUL RASHEED. HOWEVER, THE ASSESSEE HAS FILED THE DETAILS BEFORE THE LD. CIT(APPEALS) AND THE LD. CIT(APPEALS) HAS FORWARDED THE DETAILS TO THE ASSESSING OFFICER AND CALLED FOR REMAND REPORT. THE ASSESSING OFFICER, DURING THE COURSE OF REMAND REPORT PROCEEDINGS, HAS OBSERVED T HAT THE ASSESSEE, DURING THE FINANCIAL YEAR 2006-07, HAD GIVEN AN AMO UNT OF ` .3,67,580/- ON VARIOUS DATES AS LOANS TO ONE SHRI ABDUL RASHEED AND WAS ALSO DISCLOSED IN THE FINANCIAL STATEMENT/RETURN FILED F OR THE ASSESSMENT YEAR 2007-08. HE FURTHER STATED THAT THIS AMOUNT WAS REA LIZED DURING THE ASSESSMENT YEAR 2008-09 IN CASH AND AN AMOUNT OF ` .2,80,000/- WAS DEPOSITED IN HSBC BANK ON 23.10.2007. FURTHER, THE ASSESSEE COULD NOT PROVIDE THE ADDRESS OF THE PARTY AND ONLY STATE D THAT HE HAD DISCONTINUED HIS BUSINESS WITH THE ASSESSEE AND CLO SED ITS OPERATION AND LOST CONTRACT. AS NO EVIDENCES FOR THE TRANSACT ION COULD BE FURNISHED INCLUDING THE ADDRESS OF THE PARTY, THE G ENUINENESS OF ASSESSEES ASSERTION IN THIS REGARD IS NOT ESTABLIS HED BEYOND DOUBT AND HENCE THE SUM NEEDS TO BE TREATED AS ASSESSEES UNDISCLOSED INCOME. 3. ON APPEAL, THE LD. CIT(APPEALS) HAS OBSERVED TH AT AS PER THE RECORDS OF THE ASSESSEE FOR THE FINANCIAL YEAR 2006 -07, AN AMOUNT OF I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 38 88 84 44 4/M/ /M/ /M/ /M/13 1313 13 3 RS.3,67,580/- WAS DUE FROM SHRI ABDUL RASHEED. DURI NG THE CURRENT FINANCIAL YEAR, THE ASSESSEE HAS REALIZED THE SAID AMOUNT. OUT OF THIS AMOUNT, THE ASSESSEE HAS DEPOSITED A SUM OF ` .2,80,000/- IN HSBC BANK ON 23.10.2007. FURTHER THE BOOKS OF THE ASSESS EE FOR THE FINANCIAL YEAR 2007-08 DO NOT CONTAIN THE SAID AMOU NT IN THE ASSETS SIDE OF THE BALANCE SHEET, INDICATING THAT THE AMOU NT FROM SHRI RASHEED HAD BEEN REALIZED DURING THE YEAR. IN THE A BSENCE OF ANY CONTRARY INFORMATION/EVIDENCES, THE LD. CIT(APPEALS ) HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DIRECTED THE ASSESS ING OFFICER TO ALLOW ASSESSEES CLAIM OF RECOVERY OF LOAN OF ` .3,67,580/- AS GENUINE SOURCE FOR THE PURPOSE OF DEPOSITING INTO HSBC ACCO UNT. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BE FORE THE TRIBUNAL. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. 6. THE LD. DR HAS SUBMITTED THAT THE LD. CIT(APPEA LS), BY CONSIDERING THE EXPLANATION OF THE ASSESSEE, TREATE D THE LOAN AS GENUINE WITHOUT CONSIDERING THE MATERIAL FACT I.E. THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH THE ADDRESS OF THE PARTY AND T HEREFORE, BASED ON THE ENTRY IN ASSESSEES ACCOUNT, IT CANNOT BE SAID THAT THE TRANSACTION I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 38 88 84 44 4/M/ /M/ /M/ /M/13 1313 13 4 IS GENUINE AND THE ISSUE MAY BE REMITTED BACK TO TH E ASSESSING OFFICER TO EXAMINE AFRESH. 7. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. THE ONLY DISPUTE INVOLVED IN THI S ISSUE IS WHETHER THE RECOVERY OF LOAN FROM SHRI ABDUL RASHEED OF ` .3,67,580/- IS GENUINE OR NOT. THE ASSESSEE HAS NOT FILED ANY DETAILS BEFORE THE ASSESSING OFFICER INITIALLY AND ONLY BEFORE THE LD. CIT(APPEA LS), THE ASSESSEE HAS FILED THE DETAILS AND SUBMITTED THE EXPLANATION. TH E ASSESSEE HAS NOT GIVEN ANY EXPLANATION AS TO WHY HE HAS NOT FILED TH E DETAILS BEFORE THE ASSESSING OFFICER INITIALLY. HOWEVER, THE LD. CIT(A PPEALS) HAS REMANDED THE ISSUE TO THE ASSESSING OFFICER AND CAL LED FOR REMAND REPORT. THE LD. CIT(APPEALS) HAS OBSERVED FROM THE REMAND REPORT THAT FROM THE RECORDS OF THE ASSESSEE, IT BECOME CLEAR T HAT THE ASSESSEE HAD GIVEN AN ADVANCE TO SHRI ABDUL RASHEED AND ALSO RECOVERED THE SAME IN SUBSEQUENT YEARS AND THERE WAS NO EVIDENCE OR CONTRARY INFORMATION. WE ARE UNABLE TO UNDERSTAND THAT ON WH AT EVIDENCE IS CONTRARY TO THE ABOVE INFORMATION IS REQUIRED. IN T HIS CASE, THE ASSESSEE WAS NOT IN A POSITION TO FURNISH THE ADDRE SS OF THE PARTY, TO WHOM HE HAS ADVANCED THE DEPOSITS. IN OUR OPINION, THE ASSESSEE HAS NOT DISCHARGED HIS BURDEN TO FURNISH THE ADDRESS OF THE PARTY. HOWEVER, I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 38 88 84 44 4/M/ /M/ /M/ /M/13 1313 13 5 THE LD. DR HAS FAIRLY REQUESTED THAT THE ISSUE MAY BE REMITTED BACK TO THE ASSESSING OFFICER. IN VIEW OF THE FACTS AND CIR CUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND REMIT T HE MATTER BACK TO THE ASSESSING OFFICER TO GIVE ONE MORE OPPORTUNITY TO T HE ASSESSEE FOR FURNISHING FURTHER DETAILS AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 8. THE SECOND GROUND OF APPEAL RELATES TO DELETION OF ADDITION OF UNEXPLAINED CASH OF LOAN OF ` .15.00 LAKHS AND ` .1,60,000/- FROM SHRI RAMDESH BABU AND M/S. MRIDULA PAINTS RESPECTIVELY. THE ASSESSEE HAS NOT FILED ANY DETAILS INITIALLY BEFORE THE ASSE SSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE H AS FILED THE DETAILS AND SUBMITTED THAT HE HAS RECEIVED LOAN FROM SHRI R AMESH BABU AND ALSO FROM M/S. MRIDULA PAINTS. THE LD. CIT(APPEALS) HAS CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. DURING TH E COURSE OF REMAND REPORT PROCEEDINGS, THE ASSESSING OFFICER HAS OBSER VED THAT IN RESPECT OF LOAN TRANSACTIONS WITH SHRI RAMESH BABU [ ` .15.00 LAKHS] AND M/S. MRIDULA PAINTS [ ` .1,60,000/-], ONLY A CONFIRMATION OF LEDGER ACCOUNT WAS FURNISHED AND NO OTHER EVIDENCE TO ESTABLISH THE GE NUINENESS OF THE LOAN TRANSACTIONS WERE PROVIDED. HENCE, THESE LOAN TRANSACTIONS WERE NOT PROVED BEYOND DOUBT. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 38 88 84 44 4/M/ /M/ /M/ /M/13 1313 13 6 9. ON APPEAL, THE LD. CIT(APPEALS) HAS OBSERVED TH AT THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED LOANS OF ` .15.00 LAKHS FROM SHRI RAMESH BABU AND ` .1,60,000/- FROM M/S. MRIDULA PAINTS. SHRI RAMESH B ABU IS THE CO-BROTHER OF THE ASSESSEE AND WORKING AS GENER AL MANAGER IN IDBI BANK AND M/S. MRIDULA PAINTS IS THE BUSINESS C ONCERN OF ASSESSEES BROTHER. BOTH OF THE LOANS WERE RECEIVED BY WAY OF CHEQUES ONLY AND WERE CONFIRMED BY THE LENDERS. THEREFORE, THE LD. CIT(APPEALS) HAS OBSERVED THAT THE ASSESSING OFFICE R WAS NOT JUSTIFIED IN REJECTING THE SAME AND DIRECTED THE ASSESSING OF FICER TO ALLOW THE SAME AS GENUINE LOAN. 10. THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT SUBMITTED THE DETAILS OF PARTIES AND CREDITWORTHINESS OF THE PARTIES. HE FURTHER SUBMITTED THAT SIMPLY BECAUSE THE AMOUNTS RECEIVED BY WAY OF CHEQUES, IT CANNOT BE SAID THAT THE TRANSACTIONS AR E GENUINE. 11. WE HAVE HEAD THE LD. DR AND GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. FROM THE FACTS, WE FIND THAT THE ASSESSEE HAS BORROWED LOANS OF ` .15.00 LAKHS AND ` .1,60,000/- FROM SHRI RAMESH BABU AND M/S. MRIDULA PAINTS RESPECTIVELY BY WAY OF CHEQUES. BUT THE ASSESSEE HAS NOT FILED ANY DETAILS IN RESPECT OF TH E CREDITORS AND HE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 38 88 84 44 4/M/ /M/ /M/ /M/13 1313 13 7 HAS ALSO NOT FILED THE ADDRESS AND CONTACT NUMBER O F THE PARTIES. SIMPLY BECAUSE THE PAYMENTS ARE RECEIVED IN CHEQUES , IT CANNOT BE SAID THAT THE TRANSACTIONS ARE GENUINE. TO MEET THE ENDS OF JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND REM IT THE MATTER BACK TO THE ASSESSING OFFICER TO EXAMINE ALL THE DETAILS AN D DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFIC IENT OPPORTUNITY OF HEARING TO THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 10 TH OF SEPTEMBER, 2013 AT CHENNAI. SD/ - SD/ - (DR. O.K. NARAYANAN) VICE-PRESIDENT (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 10.09.2013 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.