ITO, Erode V. S.Shanthi, Erode

ITA 72/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7519 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 30-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 14-01-2016
• Court: TRIBUNAL
• Department Lawyers: C YAMUNA
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Unexplained investment; Opportunity of being heard

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , ! '#.. $ %!& , ( )* BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ! ./ ITA NO.72/MDS/2016 + ,+ /ASSESSMENT YEAR: 2011-12 THE INCOME TAX OFFICER, WARD 2(2), 15, GANDHIJI ROAD, ERODE-638 001. VS. SMT. S.SHANTHI, 203, THIRUNAGAR, INGUR ROAD, CHENNIMALAI, PERUNDURAI-638 051, ERODE DISTRICT. [PAN: BIKPS 1269 Q ] ( -. /APPELLANT) ( /0-. /RESPONDENT) -. 1 2 / APPELLANT BY : MS.C.YAMUNA, JCIT /0-. 1 2 /RESPONDENT BY : MR.A.S.SRIRAMAN, ADVOCATE $ 1 3( /DATE OF HEARING : 31.01.2017 45, 1 3( /DATE OF PRONOUNCEMENT : 15.03.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 29.10.2015 OF COMMISSIONER OF INCOME TAX (APPEALS)- 3, COIMBATORE, IN ITA NO.101/14-15(A)-1 FOR THE AY 2011-12. 2.0 ALL THE GROUNDS OF THE APPEAL ARE RELATED TO THE A DDITION MADE U/S.68 OF INCOME TAX ACT (IN SHORT THE ACT). THE ASSESSEE FILED RETURN OF ITA NO.72/MDS/2016 :- 2 -: INCOME ADMITTING TOTAL INCOME OF RS.5,17,063/- ON 3 0.09.2011. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S.143(3) ON TOTAL INCOME OF RS.1,61,09,948/-. IN THE ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER (IN SHORT AO) MADE THE ADDITIO N OF RS.1,47,89,000/- RELATING TO DEPOSITS MADE IN THE BANK ACCOUNT FOR W HICH THE SOURCE WAS NOT EXPLAINED BY THE ASSESSEE. 3.0 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WEN T ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) (HEREINAFTER REFERRED TO AS LD.CIT(A)) AND THE LD.CIT(A) DELET ED THE ADDITION. THEREFORE, THE REVENUE IS IN APPEAL BEFORE THIS TRI BUNAL. 4.0 APPEARING FOR THE REVENUE, THE LEARNED DEPARTMENTA L REPRESENTATIVE (HEREINAFTER REFERRED TO AS LD.DR) ARGUED THAT THE ASSESSEE MADE CASH CREDITS IN THE BANK ACCOUNT TO T HE TUNE OF RS.1,78,85,450/- WHICH WAS NOT EXPLAINED BY THE ASS ESSEE BEFORE THE AO. IT IS BURDEN ON THE ASSESSEE TO EXPLAIN THE NATURE OF SOURCE OF DEPOSITS MADE DURING THE YEAR. THE ASSESSEE ALSO DID NOT PR ODUCE THE BOOKS OF ACCOUNTS FOR VERIFICATION BEFORE THE LD.CIT(A). IT APPEARS THAT THE ASSESSEE HAS PRODUCED THE DAY BOOK FROM WHICH THE L D.CIT(A) CONCLUDED THAT ADEQUATE CASH BALANCES WERE AVAILABLE FOR MAKI NG DEPOSITS AND ACCORDINGLY THE ADDITION WAS DELETED. IN THIS CONN ECTION, THE LD.DR ARGUED THAT SINCE THE BOOKS OF ACCOUNTS ARE NOT PRO DUCED BEFORE THE AO, AS PER RULE 46A OF THE INCOME TAX RULES LD.CIT(A) O UGHT TO HAVE GIVEN AN ITA NO.72/MDS/2016 :- 3 -: OPPORTUNITY TO THE AO. IN THIS CASE, LD.CIT(A) HAS NOT GIVEN THE OPPORTUNITY TO THE AO. THEREFORE, THE LD.DR CONTEN DED THAT THE CASE SHOULD BE REMITTED BACK TO THE FILE OF THE AO. ON THE OTHER HAND, THE LD.AR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES . 5.0 WE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE LD.CIT(A) DELETED THE ADDITION HOLDING THAT TH ERE WAS ADEQUATE CASH BALANCES TO MAKE DEPOSITS IN THE BANK ACCOUNT. WE EXTRACT THE RELEVANT PARAGRAPHS OF THE LD.CIT(A) FOR THE SAKE O F CONVENIENCE: 6.0 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE MATERIALS AVAILABLE ON THE RECORD. IN THE GROUNDS OF APPEAL T HE MAIN CONTENTION IS THAT THE ADDITION OF RS.1,78,85,450/- WHICH ARE DEPOSITS INTO BANK AS UN EXPLAINED INCOME OF THE ASSESSEE. IN THE ASSESSMENT ORDER, IT IS STATED THAT THE BOOKS HA VE NOT BEEN PRODUCED FOR VERIFICATION. THE AR STATES THAT THE BOOKS HAVE BEEN AUDITED U/S. 44AB AND THE WERE AVAILABLE AND CAN PRODUCED. HE, HOWEVER, STATES THAT FOR THE ASSESSME NT PROCEEDINGS A DIFFERENT AUTHORIZED REPRESENTATIVE REPRESENTED THE CASE BUT IT WAS EXPL AINED TO THE ASSESSING OFFICER THAT THE DEPOSITS WERE OUT OF CASH GENERATED BY SALES AND OT HER BUSINESS ACTIVITIES. IT WAS ALSO STATED THAT THE ASSESSEE INFORMED THE ASSESSING OFFI CER THAT THE CASH BALANCES WERE ADEQUATE TO MAKE THE DEPOSITS OF EACH DAY. THE DAY BOOK OF THE ASSESSEE WAS PERUSED AND IT IS SEEN THAT ADEQUATE CASH BALANCES ARE AVAILABL E FOR MAKING DEPOSITS. THE ISSUE IS STRAIGHT AND SIMPLE. WHEN THE ASSESSEE HAD CASH BAL ANCES TO MAKE DEPOSITS AND REGULAR BOOKS OF ACCOUNT ARE MAINTAINED AND THE SAME HAS BE EN PRODUCED FOR VERIFICATION. HENCE, FURTHER COMMENTS FROM THE ASSESSING OFFICER IS NOT S OUGHT ON THIS ISSUE. THE ADDITION OF UNEXPLAINED INVESTMENT TO THE TUNE OF RS.1.47 CRORE S IS NOT SUPPORTED BY ANY EVIDENCE AND MATERIALS HENCE THE SAME IS NOT SUSTAINABLE. 6.0 FROM THE ORDER OF THE LD.CIT(A), IT IS NOTICED THA T THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS BEFORE THE AO. THE DAY BOOK WAS PRODUCED BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS N OT GIVEN ANY FINDING WHETHER THE DEPOSITS MADE IN THE BANK ACCOUNTS WERE ACCOUNTED IN THE ASSESSEES REGULAR BOOKS OF ACCOUNTS OR NOT. MERE AVAILABILITY OF CASH IS NOT SUFFICIENT AND THE AMOUNTS DEPOSITED IN THE BAN K ACCOUNT SHOULD BE REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS OF THE A SSESSEE. THE LD.CIT(A) ITA NO.72/MDS/2016 :- 4 -: HAS NOT CALLED FOR THE REMAND REPORT AND GIVEN AN O PPORTUNITY TO THE AO TO REVERT THE CLAIM OF THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE CASE SHOULD BE REMITTED BACK TO TH E FILE OF THE AO WITH A DIRECTION TO EXAMINE THE NATURE AND SOURCE OF THE C ASH DEPOSITS WITH THE BOOKS OF ACCOUNTS AND OTHER RELEVANT MATERIAL AND D ECIDE THE ISSUE AFRESH ON MERITS. ACCORDINGLY, THE ORDER OF THE LD.CIT(A) IS SET-ASIDE AND REMITTED THE MATTER BACK TO THE FILE OF THE AO TO R E-EXAMINE THE DEPOSITS MADE IN THE BANK ACCOUNT AND DECIDE THE ISSUE AFRES H ON MERITS. THE ASSESSEE SHOULD BE GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD. 7.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( '# . . $ %!& ) (D.S.SUNDER SINGH) ( /ACCOUNTANT MEMBER /CHENNAI, 6! /DATED: 15 TH MARCH, 2017. TLN 1 /3%7 87,3 /COPY TO: 1. -. /APPELLANT 4. $ 93 /CIT 2. /0-. /RESPONDENT 5. 7 : /3 /DR 3. $ 93 ( ) /CIT(A) 6. #+ = /GF