ACIT, Circle-1, Namakkal V. Nagarajan Tamilselvi, Tiruchengode

ITA 52/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7429 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 03-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M MATHIVANAN
• Assessee Lawyers: M KARUNAKARAN
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.52/CHNY/2018 ( )( / ASSESSMENT YEAR : 2013-14 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, NAMAKKAL. V. SMT. NAGARAJAN TAMILSELVI, NO.5, RAMAPURAM ILLAM, CHB COLONY WEST, P. VELUR ROAD, TIRUCHENGODE 637 211. PAN : ABSPT 2172 K (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI M. MATHIVANAN, ADDL. CIT -.+, / 0 / RESPONDENT BY : SHRI M. KARUNAKARAN, ADVOCATE 1 / 2% / DATE OF HEARING : 28.06.2018 3') / 2% / DATE OF PRONOUNCEMENT : 12.07.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DA TED 31.10.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2 I.T.A. NO.52/CHNY/18 2. SHRI M. MATHIVANAN, THE LD. DEPARTMENTAL REPRESE NTATIVE, SUBMITTED THAT THE ASSESSING OFFICER FOUND A DEPOSI T OF 32,50,000/- IN THE BANK ACCOUNT OF THE ASSESSEE. ACCORDING TO THE LD. D.R., THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THESE AMOUNTS WERE RECEIVED FROM VARIOUS FARMERS FOR PROVIDING AG RICULTURAL SERVICES. HOWEVER, THE ASSESSEE COULD NOT GIVE DET AILS OF FARMERS FROM WHOM THE MONEY WAS COLLECTED. ACCORDING TO T HE LD. D.R., THE ASSESSING OFFICER DOUBTED THE TRANSACTION IN TH E ABSENCE OF ANY MATERIAL TO SUPPORT THE CLAIM OF RECEIPT OF MONEY F ROM VARIOUS FARMERS FOR PROVIDING SERVICES AND THEREFORE, MADE AN ADDITION OF 32,50,000/- UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SHRI M. MATHIVANAN, THE LD. DEPARTMENTAL REPRESE NTATIVE, FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS AL SO FOUND THAT THE ASSESSEE CLAIMED SET OFF OF LOSSES IN THE TRADING O F EQUITY SHARES AGAINST THE INCOME SAID TO BE DERIVED FROM AGRICULT URAL RELATED SERVICES. ACCORDING TO THE LD. D.R., THE CIT(APPEA LS) FOUND THAT THE INCOME ASSESSED UNDER SECTION 68 OF THE ACT IN RESP ECT OF CASH CREDIT HAS TO BE SET OFF AGAINST THE LOSS SUFFERED IN EQUITY SHARE TRADING. HOWEVER, THE LOSS WAS NOT VERIFIED BY ANY OF THE AUTHORITIES 3 I.T.A. NO.52/CHNY/18 BELOW. ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAVING POWER OF COTERMINOUS THAT OF THE ASSESSING OFFICER, HE HIMSE LF OUGHT TO HAVE EXAMINED THE GENUINENESS OF SO-CALLED LOSS CLAIMED BY THE ASSESSEE. SINCE SUCH AN EXERCISE WAS NOT DONE BY T HE CIT(APPEALS), ACCORDING TO THE LD. D.R., THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMIN E THE CLAIM OF LOSS IN ACCORDANCE WITH LAW. 4. ON THE CONTRARY, SHRI M. KARUNAKARAN, THE LD.COU NSEL FOR THE ASSESSEE, SUBMITTED THAT NO DOUBT, THE ASSESSING OF FICER FOUND CREDIT OF 32,50,000/- ON VARIOUS DAYS. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE IS PROVIDING VARIOUS SERVICES TO THE FARMERS, INCLUDING LOCATING THE SOURCE OF WATER. THE ASSESS EE COLLECTED FEES FOR PROVIDING THE SERVICES AND THE SAME WAS DEPOSIT ED IN THE BANK ACCOUNT. ACCORDING TO THE LD. COUNSEL, THE ASSESSE E HAS COLLECTED FEES FROM ABOUT 210 FARMERS. HOWEVER, THE DETAILS OF FARMERS COULD NOT BE FILED. THEREFORE, ACCORDING TO THE LD. COU NSEL, THE CIT(APPEALS) CONFIRMED THE ADDITION MADE BY THE ASS ESSING OFFICER UNDER SECTION 68 OF THE ACT AND NO FURTHER APPEAL W AS FILED BY THE ASSESSEE BEFORE THIS TRIBUNAL. ACCORDING TO THE LD .COUNSEL, THE ASSESSEE HAS ALSO SUFFERED LOSS IN SHARE TRADING BU SINESS. 4 I.T.A. NO.52/CHNY/18 THEREFORE, THE ASSESSEE CLAIMED SET OFF OF 32,50,000/- THE LOSS SUFFERED IN SHARE TRADING AGAINST THE INCOME RECEIV ED FROM SERVICES PROVIDED TO THE AGRICULTURISTS. ACCORDING TO THE L D. COUNSEL, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE. HOWEVER, THE CIT(APPEALS) FOUND THAT THE LOSS SUFFERED BY TH E ASSESSEE IN TRADING OF SHARES HAS TO BE SET OFF AGAINST THE INC OME SAID TO BE RECEIVED FROM AGRICULTURISTS FOR PROVIDING AGRICULT URAL SERVICES. THEREFORE, ACCORDING TO THE LD. COUNSEL, NO INTERFE RENCE IS CALLED FOR. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER FOUND CASH CREDIT OF 32,50,000/- DURING THE COURSE OF ASSESSMENT IN THE BOOKS OF ACCOUNT. THE ASSESSEE C LAIMS THAT THE SAID MONEY WAS COLLECTED FROM VARIOUS FARMERS FOR P ROVIDING AGRICULTURAL SERVICES. HOWEVER, THE ASSESSEE COULD NOT FURNISH THE DETAILS OF FARMERS FROM WHOM THE MONEY WAS COLLECTE D. THEREFORE, THE ADDITION WAS MADE UNDER SECTION 68 OF THE ACT. IN FACT, THE CIT(APPEALS) CONFIRMED THE ORDER OF THE ASSESSING O FFICER AND NO APPEAL WAS FILED BY THE ASSESSEE. THEREFORE, THE I SSUE OF ADDITION OF 32,50,000/- UNDER SECTION 68 OF THE ACT ATTAINED FI NALITY. 5 I.T.A. NO.52/CHNY/18 6. NOW, THE ONLY ISSUE BEFORE THIS TRIBUNAL IS WHET HER THE LOSS SUFFERED BY THE ASSESSEE IN SHARE TRADING BUSINESS HAS TO BE SET OFF AGAINST THE CASH CREDIT UNDER SECTION 68 OF THE ACT ? THE CIT(APPEALS) BY REFERRING TO AMENDMENT MADE IN SECT ION 115BBE OF THE ACT WITH EFFECT FROM 01.04.2017, FOUND THAT THE ASSESSEE IS ELIGIBLE FOR SET OFF. THE CIT(APPEALS) HAS NOT VER IFIED THE GENUINENESS OF THE SO-CALLED LOSS IN THE SHARE TRAD ING BUSINESS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHE THER THE ASSESSEE HAS ACTUALLY SUFFERED THE LOSS OR NOT NEEDS TO BE V ERIFIED AND THEREAFTER THE APPLICATION OF AMENDMENT HAS TO BE C ONSIDERED. SINCE SUCH AN EXERCISE WAS NOT DONE BY THE CIT(APPE ALS), THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFF ICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ENTIRE ISSUE OF SET OFF OF LOSS SUFFERED IN SHA RE TRADING BUSINESS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFIC ER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER IN THE LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE O PPORTUNITY TO THE ASSESSEE. 6 I.T.A. NO.52/CHNY/18 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 12 TH JULY, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A), SALEM 4. PRINCIPAL CIT, SALEM 5. 7: -2 /DR 6. ;( < /GF.