RATHINAM MURUGAVEL, NAMAKKAL V. ITO, WARD 4, NAMAKKAL

ITA 494/CHNY/2023

AI Insights

The case involves an appeal by Shri Rathinam Murugavel against the order of the Commissioner of Income Tax (Appeals), which confirmed the AO's addition of unaccounted expenses amounting to Rs.14,89,565 paid to NSE and BSE for the assessment year 2014-15. The AO had initially disallowed the balance amount after considering a loan utilized by the assessee. The CIT(A) upheld this decision due to incomplete documentation provided by the assessee. The Tribunal heard the appeal and decided to restore the matter to the AO for further verification of the complete statement from ICICI Securities.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135090 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 17-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ (एस एम सी) ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ (SMC) BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकर अपील सं./ITA No.: 494/CHNY/2023 िनधाᭅरण वषᭅ/Assessment Year: 2014-15 Shri Rathinam Murugavel, 8/66, Chinna Veppanatham, Vasanthapuram, Namakkal – 637 002. PAN: ADEPM 7862R Vs. The Income Tax Officer, Ward 4, Namakkal. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri T.S. Lakshmi Venkatraman, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri G. Johnson, Addl.CIT सुनवाई कᳱ तारीख/Date of Hearing : 15.06.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 15.06.2023 आदेश /O R D E R This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 23.03.2023. The assessment was framed by the Income Tax Officer, Ward 4, Namakkal for the assessment year 2014-15 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 31.12.2016. - 2 - ITA No.494/Chny/2023 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in making addition of unaccounted expenses of Rs.14,89,565/- paid to NSE and BSE. 3. Brief facts are that the AO on perusing the statement of transactions made through ICICI Securities noted that the assessee has paid a sum of Rs.17,96,981/- to NSE and Rs.2,93,926/- to BSE on account of share transactions conducted through NSE and BSE. When the AO required the assessee to explain this expenditure assessee filed letter dated 28.11.2016 and stated that he has utilized a sum of Rs.6,25,636/-, loan availed from Shri R.Murugavel, TMB Mercantile Brnach. Hence, the AO giving credit for the same disallowed the balance amount of Rs.14,65,271/- as unexplained expenditure as under:- NSE – payments 1796981 BSE – payments 293926 Total payments 2090907 Less: Loan from TMB 625636 Unexplained expenditure 1465271 Aggrieved, assessee filed appeal before CIT(A). 4. Before CIT(A) assessee could file one statement of ICICI Securities wherein the details of intraday trading in shares including expenditure is enclosed but that statement was not complete and - 3 - ITA No.494/Chny/2023 hence, the CIT(A) could not verify the transactions and hence, he also confirmed the action of the AO. Aggrieved, now assessee is in appeal before the Tribunal. 5. I have heard rival contentions and gone through facts and circumstances of the case. I noted that the assessee is engaged in intraday trading i.e., a type of investing where you buy and sell shares on the same day. In this type of trading, brokers provide you with certain margins to purchase more shares than you buy using your capital and the margin borrowed to buy and sell more shares allow you as an intraday trader. Hence, in this assessee has incurred expenditure of brokerage charges, etc., with NSE and BSE. Even now before us assessee could not file the complete statement but he undertook to file the same. But in any case, the assessee files the complete statement of ICICI Securities where this expenditure is allowed on the basis of credit or actually assessee has not paid and it is only booked, the assessee has to prove the same. The assessee will file details of ICICI Securities who has allowed credit to the assessee. In case credit is allowed, the AO will consider and will delete the addition. But, if the statement reflects there is no credit i.e., statement of ICICI Securities, the AO will not allow the - 4 - ITA No.494/Chny/2023 claim of assessee. Subject to verification, the matter is restored back to the file of the AO. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 15 th June, 2023 at Chennai. Sd/- (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 15 th June, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.