Sri Vigneswar Transport, CHENNAI V. ACIT, CHENNAI

ITA 393/CHNY/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68642 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 24-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 393/MDS/2012 (ASSESSMENT YEAR : 2008-09) M/S SRI VIGNESWAR TRANSPORT, C/O SOMASUNDARAM & SIVARAMAN, CHARTERED ACCOUNTANTS, 10, E BLOCK, KARTIK APTS, 46, VIJAYARAGAVA ROAD, CHENNAI - 600 017. PAN : AABFS 0677 C (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE V, CHENNAI - 600 034. (RESPONDENT) APPELLANT BY : SH. S. SRIDHAR, ADVOCATE RESPONDENT BY : SH. GURU BASHYAM, JCIT DATE OF HEARING : 21.08.2013 DATE OF PRONOUNCEMENT : 21.08.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT CIT(APPEALS) CONFIRMED THE ADDITION OF ` 1,10,000/- TREATED BY THE A.O. AS UNEXPLAINED CASH CREDIT. I.T.A. NO. 393/MDS/12 2 2. FACTS APROPOS ARE THAT ASSESSEE, ENGAGED IN TRAN SPORT BUSINESS, HAD FILED ITS RETURN OF INCOME FOR IMPUGN ED ASSESSMENT YEAR DECLARING NIL INCOME. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSING OFFICER THAT ASSESSEE HAD RECEIVED UNSECURED LOANS OF ` 10,64,800/- FROM DIFFERENT PERSONS WHICH, INTER ALIA, INCLUDED A SUM OF ` 2,10,000/- FROM SHRI R. NARAYANA SWAMY. SINCE THE ISSUE BEFORE US IS LIMIT ED TO LOAN RECEIVED BY THE ASSESSEE FROM SHRI NARAYANA SWAMY, THE DISCUSSION IN THIS ORDER IS LIMITED TO THIS ASPECT. EXPLANATI ON OF THE ASSESSEE WAS THAT THE LOAN WAS NOT RECEIVED DURING THE RELEV ANT PREVIOUS YEAR, BUT IT WAS BROUGHT FORWARD BALANCE. HOWEVER, THE A SSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE COULD NOT ESTABLIS H GENUINENESS AND CREDITWORTHINESS OF SHRI NARAYANA SWAMY. HE HE LD THAT THE REPLY WAS UNSUBSTANTIATED AND MADE AN ADDITION UNDER SECT ION 68 OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. IN ITS APPEAL BEFORE CIT(APPEALS), ASSESSEE ASSA ILED THE ADDITION. INSOFAR AS THE LOAN FROM SHRI NARAYANA S WAMY, EXPLANATION OF THE ASSESSEE WAS THAT A SUM OF ` 1 LAKH WAS RECEIVED FROM THE SAID PERSON BY DD NO.851818 DATED 2.4.2002 AND HENC E, IT RELATED TO ASSESSMENT YEAR 2003-04. ACCORDING TO ASSESSEE, BA LANCE OF THE AMOUNT WAS ALSO RECEIVED ON A DATE PRIOR TO THE REL EVANT PREVIOUS I.T.A. NO. 393/MDS/12 3 YEAR. A CONFIRMATION LETTER WAS ALSO FILED WHICH, IT SEEMS, STATED THAT SHRI NARAYANA SWAMY HAD GIVEN A SUM OF ` 1,10,000/- ON 31.3.2007. LD. CIT(APPEALS) WAS OF THE OPINION THAT THERE WAS AMBIGUITY IN THE LETTERS FILED BY SHRI NARAYANA SWAMY AND THEREFORE, CONFIRMED THE ADDITION TO THE EXTENT OF ` 1,10,000/-. HE ACCEPTED ASSESSEES CASE INSOFAR AS SUM OF ` 1 LAKH WAS CONCERNED. 4. NOW BEFORE US, SHRI S. SRIDHAR, LD. COUNSEL FOR THE ASSESSEE, STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMI TTED THAT LETTER FILED BY SHRI NARAYANA SWAMY CLEARLY SHOWED THE AMOUNT TO HAVE BEEN GIVEN BY HIM TO THE ASSESSEE PRIOR TO THE RELEVANT PREVIOUS YEAR. THERE WAS NO CASE FOR THE REVENUE THAT THE CREDITOR WAS NOT HAVING ANY SOURCE. THE CONFIRMATION LETTER FROM CREDITOR WAS FILED BY THE ASSESSEE, BUT IT WAS NEVER EXAMINED BY THE REVENUE. THEREFORE, ACCORDING TO HIM, THE ADDITION OF ` 1,10,000/- UNDER SECTION 68 OF THE ACT, WAS NOT WARRANTED. 5. PER CONTRA, SHRI GURU BASHYAM, APPEARING FOR THE REVENUE, SUPPORTED THE ORDER OF CIT(APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT ASSESSEE HAD FILED LETTER FROM SHRI NARAYANA I.T.A. NO. 393/MDS/12 4 SWAMY, WITH REGARD TO THE LOAN OF ` 2,10,000/-. CLAIM OF THE ASSESSEE IS THAT WHOLE OF THE AMOUNT WAS RECEIVED P RIOR TO RELEVANT PREVIOUS YEAR. IF THAT BE SO, THERE CAN BE NO DOUB T THAT AN ADDITION UNDER SECTION 68 CANNOT BE MADE IN THE RELEVANT PRE VIOUS YEAR. NEVERTHELESS, THIS ASPECT HAS NOT BEEN CLEARLY VERI FIED BY ANY OF THE AUTHORITIES BELOW. WE ARE, THEREFORE, OF THE OPINI ON THAT THE MATTER REQUIRES A FRESH LOOK BY THE A.O. THE A.O. HAS TO VERIFY THAT THE SUM OF ` 1,10,000/- WAS A PART OF CARRIED FORWARD BALANCE F ROM EARLIER YEARS. AFTER SUCH VERIFICATION, HE SHALL PROCEED I N ACCORDANCE WITH LAW. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE COURT ON WEDNESDAY, THE 21 ST OF AUGUST, 2013, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST AUGUST, 2013. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-VIII, CHENNAI/ CIT-VI, CHENNAI-34/D.R./GUARD FILE