ITO, Vellore V. A.D.Thulasiraman, Vellore

ITA 53/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7358 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 03-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 11-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Keywords: Unexplained cash credit
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 143(1); 201; 143(2)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I T.A. NO. 5 3 /MDS/201 6 / ASSESSMENT YEAR :20 1 1 - 1 2 THE INCOME TAX OFFICER , WARD 2 , VELLORE . VS. SHRI A.D. THULASIRAMAN, NO. 22, RAJI MUDALI STREET, NEAR ANNA STATUE , ARCOT 632 503. [PAN: AA EPT7374C ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S UPRIYO PAL , J CIT / RESPONDENT BY : NONE / DATE OF HEARING : 0 3 . 0 1 .201 7 / DATE OF P RONOUNCEMENT : 30 . 0 3 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 3 , CHENNAI DATED 19 . 1 0 .201 5 RELEVANT TO THE ASSESSMENT YEAR 20 1 1 - 1 2 . T HE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF .69,34,222/ - MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] AND THE DECISION TO TAX 8% OF THE CASH DEPOSITS IN B ANK ACCOUNTS IS NOT ACCEPTABLE. I.T.A. NO . 5 3 /M/ 16 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING A RICE MILL AND RICE TRADERS. HE HAS FILED HIS RETURN OF INCOME ADMITTING TOTAL INCOME OF .1,80,000/ - . THE RETURN FILED BY THE ASSESSE E WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE. THEREAFTER, NOTICE UNDER SECTION 142(1) OF THE ACT ALONG WITH QUESTIONN AIRE WAS ISSUED ON 26.10.2012. IN RESPONSE THERETO, THE ASSESSEE FILED ALL THE DETAILS. AFTER VERIFICATION OF DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ASSESSING TOTAL INCOME OF THE AS SESSEE AT .82,43,722/ - BY MAKING ADDITION OF UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE EVIDENCES , THE LD . CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT PROVED THE NEXUS BETWEEN THE CASH DEPOSITS AND THE SALES BEFORE THE AUTHORITIES B ELOW AND MOREOVER, THE ASSESSEE HAS CONCEALED ENTIRE BANK TRANSACTIONS AND NOT DECLARED THE SAME IN THE RETURN OF INCOME. THUS, THE LD. DR HAS PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERSED. I.T.A. NO . 5 3 /M/ 16 3 5. AT THE REQUEST OF THE LD. AR, THE HEARING OF TH E APPEAL HAS BEEN ADJOURNED ON VARIOUS DATES AND FINALLY POSTED FOR HEARING ON 03.01.2017. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE OR FILED ANY ADJOURNMENT. HENCE, WE PROCEEDED TO DECIDE THE APPEAL ON MERITS AFTER HEARING THE LD. DR AND CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. ON PERUSAL OF THE ASSESSMENT ORDER, WE FIND IT RELEVANT TO REPRODUCE THE SAME AS UNDER: 5. FURTHER, IN SUPPORT OF CASH DEPOSITS, THE ASSESSEE HAS PRODUCED LIST OF PERSONS WHO HAVE GIVEN CASH ADVANCE FOR RICE PURCHASE. 6. ALL THE ABOVE EVIDENCE & DOCUMENT ARE PRODUCED BY THE ASSESSEE ON 24.03.2014, EVERY EVI DENCE AND DOCUMENTS ARE TO BE CROSS EXAMINED. THE GENUINENESS OF THE ADVANCE GIVEN BY THE RICE PURCHASE PARTIES ARE TO BE EXAMINED. FURTHER, CONCERN LETTER FROM SHRI M.K. JAYAKANTHAN WHO HAS GIVEN MARRIAGE SETTLEMENT COMPENSATION AND DATE OF PAYMENT TO BE CONFIRMED. DUE TO PAUCITY OF TIME THE PROCESS OF CROSS EXAMINATION OF EVIDENCES FILED COULD NOT BE EXEQUTED [EXECUTED]. FROM THE ABOVE OBSERVATIONS OF THE ASSESSING OFFICER, IT IS NOT THE CASE THAT THE ASSESSEE HAS NOT FILED THE DETAILS OF CASH ADVANCE A ND OTHER DOCUMENTS FOR VERIFICATION . THE ASSESSING OFFICER SIMPLY MADE THE ADDITION UNDER SECTION 68 OF THE ACT ON THE GROUND THAT DUE TO PAUCITY OF TIME, HE COULD NOT CROSS EXAMINE THE PARTIES . ON APPEAL, AFTER VERIFYING THE DETAILS FILED BY THE ASSESSEE AS FILED BEFORE THE ASSESSING OFFICER, INITIALLY DIRECTED THE ASSESSING OFFICER TO DELETE THE AMOUNT OF .15,00,000/ - FROM THE TOTAL I.T.A. NO . 5 3 /M/ 16 4 ADDITION OF .84,34,222/ - BEING THE SUM RECEIVED AS COMPENSA TION IN MUTUAL DIVORCE WITH HER HUSBAND AND THE LETTER FROM ADVOCATE, WHICH CONFIRMS THE MODE OF RECEIPTS OF COMPENSATION AMOUNT TO .15,00,000/ - AND TO THIS EXTENT, WE SUSTAIN THE ORDER OF THE LD. CIT(A) . I N THE GROUNDS OF APPEAL, THE DEPARTMENT HAS RAISE D A GROUND THAT THE NEXUS BETWEEN THE CASH DEPOSITS AND THE SALES HAS NOT BEEN PROVED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. WHEN T HE ASSESSING OFFICER IS DUTY BOUND TO VERIFY EVERY EVIDENCES AND DOCUMENTS AND CROSS EXAMINE THE PERSONS WHO HAVE GIVE N CASH ADVANCE FOR RICE PURCHASE AND IF HE FAILS TO DO SO DUE PAUCITY OF TIME, AS MENTIONED IN THE ASSESSMENT ORDER, THE ASSESSEE CANNOT HELD RESPONSIBLE FOR THAT AND THE ASSESSING OFFICER CANNOT MAKE ADDITION UPON HIS WIMPS AND FANCIES. HOWEVER, IN THE IN TEREST OF JUSTICE, WE DIRECT THE ASSESSING OFFICER TO VERIFY THE EVIDENCES, BANK TRANSACTIONS AND EXAMINE THE CASH ADVANCES RECEIVED BY THE ASSESSEE AND DECIDE THE ISSUE AFRESH AFTER ALLOWING SUFFICIENT OPPORTUNIT IES OF HEARING TO THE ASSESSEE. THUS, THE G ROUNDS RAISED BY THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 30 TH MARCH, 201 7 AT CHENNAI. (CHANDRA POOJARI) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 30 . 0 3 .201 7 VM/ - I.T.A. NO . 5 3 /M/ 16 5 / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6 . / GF.