R.Kishore Kumar, CHENNAI V. ITO, CHENNAI

ITA 389/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4453 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 14-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMATHI VENKATRAMAN
• Assessee Lawyers: PUSHYA SITHARAMAN
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !' .$%$&, ( ') BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO.389/MDS/2017 & +& / ASSESSMENT YEAR : 2011-12 SHRI R. KISHORE KUMAR, RAJKUMARS COTTAGE FLAT NO.7, 4 TH FLOOR, ARCADIA APARTMENTS, AKSHAYA HOMES, DOOR NO.19&21, KAMARAJ AVNUE, 1 ST STREET, KASTURBA NAGAR, ADYAR, CHENNAI - 600 020. PAN : AAKPK 6881 B V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 16(4), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SMT. PUSHYA SITHARAMAN, SR. ADVOCA TE /0-. 1 2 / RESPONDENT BY : SMT. SUMATHI VENKATRAMAN, JCIT 3 1 4( / DATE OF HEARING : 27.03.2017 56+ 1 4( / DATE OF PRONOUNCEMENT : 31.05.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -4, CHENNA I, DATED 15.12.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2 I.T.A. NO.389/MDS/17 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 2,92,88,600/- TOWARDS UNEXPLAINED CASH CREDIT. 3. SMT. PUSHYA SITHARAMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 77,72,867/- AS UNEXPLAINED CASH CREDIT. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS), HOWEVER, ENHANCED THE A SSESSMENT BY MAKING ADDITION OF ` 4,14,18,840/-. ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF CREDITS BEFORE THE ASSESSING OFFICER. THE LD. SR. COUNSEL FURTHER SUBMITTED THAT ONE SHRI NANDLAL POKARDAS ARRANGED FUNDS FROM VARIO US PERSONS. IN FACT, BY LETTER DATED 15.11.2016, SHRI NANDLAL POKA RDAS FURNISHED THE ENTIRE DETAILS TO THE ASSESSEE. IN FACT, THE N AME AND ADDRESS OF THE CREDITORS, PAN NUMBER AND ADDRESS ARE FURNISHED BY SHRI NANDLAL POKARDAS TO THE ASSESSEE. THE SAME WERE SU BMITTED BEFORE THE ASSESSING OFFICER ON 15.11.2016. THE CI T(APPEALS) WITHOUT CONSIDERING THE DETAILS FURNISHED BY THE AS SESSEE WITH REGARD TO NAMES OF THE CREDITORS, PAN NUMBER, ADDRE SS, ETC. CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R. THEREFORE, THE LD. SR. COUNSEL SUBMITTED THAT AN OPPORTUNITY M AY BE GIVEN TO THE ASSESSEE. 3 I.T.A. NO.389/MDS/17 4. ON THE CONTRARY, SMT. SUMATHI VENKATRAMAN, THE L D. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE LET TER OF SHRI NANDLAL POKARDAS ITSELF WAS DATED 15.11.2016. THE ASSESSING OFFICER PASSED THE ORDER ON 29.03.2010. THEREFORE, THESE DETAILS WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER. T HIS WAS APPARENTLY FILED BEFORE THE CIT(APPEALS) ON 15.11.2 016. IN FACT, THE CIT(APPEALS) PASSED THE ORDER ON 15.12.2016. THERE FORE, ACCORDING TO THE LD. D.R., IT MAY NOT BE CORRECT TO SAY THAT THE DETAILS WERE AVAILABLE BEFORE THE LOWER AUTHORITIES . SINCE THE ASSESSEE HAS NOT FILED ANY DETAILS WITH REGARD TO C REDITS, THE CIT(APPEALS) FOUND THAT THE ASSESSEE HAS CREDIT OF ` 2,92,88,600/- AND ADDED THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACC ORDING TO THE LD. D.R., THE CIT(APPEALS) FURTHER FOUND THAT THERE ARE OTHER CREDITS IN THE NAME OF CHRISTO PACKIADURAI AND R. GOPALA KRISH NAN TO THE EXTENT OF ` 30 LAKHS. THERE ARE OTHER UNEXPLAINED CASH DEPOSIT S TO THE EXTENT OF ` 19,50,000/-. THE CIT(APPEALS) ALSO FOUND THAT THER E WAS UNDISCLOSED BANK TRANSACTION TO THE EXTENT OF ` 54 LAKHS. BY TAKING ALL THE TRANSACTIONS, ACCORDING TO THE LD. D .R., THE 4 I.T.A. NO.389/MDS/17 CIT(APPEALS) ENHANCED THE ASSESSMENT TO ` 4,14,18,840/-, THEREFORE, THERE IS NO MERIT IN THE APPEAL OF THE A SSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE LETTER DATED 15.11.2016 SAID TO BE WRITTEN BY SHRI NANDLAL POKARDAS AND THE ASSESSEE FILED THE SAME BE FORE THE CIT(APPEALS) ON 15.11.2016. THIS CONTAINED CERTAIN NAMES OF SO- CALLED CREDITORS, THEIR PAN NUMBER AND ADDRESS. WH EN THE ASSESSEE CLAIMS THAT SHRI NANDLAL POKARDAS ARRANGED FUNDS FROM THESE PEOPLE, THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT THE MATTER NEEDS TO BE EXAMINED BY THE ASSESSING OFFICE R. SINCE THE ASSESSEE HAS FURNISHED NAMES AND PAN NUMBERS OF RES PECTIVE PERSONS, IT IS OBLIGATORY ON THE PART OF THE ASSESS ING OFFICER TO EXAMINE THE RESPECTIVE CREDITORS AND FIND OUT WHETH ER THEY IN FACT ADVANCED MONEY TO THE ASSESSEE. IT IS ALSO NECESSA RY TO EXAMINE WHETHER ANY SPECIAL REASON FOR ADVANCING THE FUNDS TO THE ASSESSEE. SINCE SUCH AN EXERCISE WAS NOT DONE, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ADDITION M ADE BY THE 5 I.T.A. NO.389/MDS/17 ASSESSING OFFICER AND AS ENHANCED BY THE CIT(APPEAL S) IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFRESH AND EXAMINE THE C REDITORS, INCLUDING THE MIDDLEMAN SHRI NANDLAL POKARDAS, AND THEREAFTER DECIDE THE ISSUE AFRESH, IN ACCORDANCE WITH LAW, AF TER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. IT IS MADE CLEAR THAT WHEN THE ASSESSEE CLAIMS C ASH CREDIT OR LOAN, IT IS OBLIGATORY ON THE PART OF THE ASSESSEE TO ESTABLISH THE IDENTITY OF THE CREDITORS, CREDITWORTHINESS OF CRED ITORS AND GENUINENESS OF TRANSACTION. THE ASSESSING OFFICER ALSO NEEDS TO SUMMON THOSE CREDITORS AND EXAMINE THEM IN ORDER TO ESTABLISH THE FACT OF ADVANCING LOAN TO THE ASSESSEE. 7. WITH THE ABOVE OBSERVATION, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 31 ST MAY, 2017 AT CHENNAI. SD/- SD/- ( !' .$%$& ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ( / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 31 ST MAY, 2017. KRI. 6 I.T.A. NO.389/MDS/17 1 /49: ;:+4 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. 3 <4 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. := /4 /DR 6. & > /GF.