Neelakandan Mahesh, CHENNAI V. ITO, CHENNAI

ITA 735/CHNY/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7883 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K MEENAKSHI SUNDARAM
• Keywords: Unexplained investment
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT ME MBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.735/MDS/2012 ( ASSESSMENT YEAR: 2008-09 ) MR. NEELAKANDAN MAHESH, NO.2, PUGAZHENDI STREET, MGR NAGAR, CHENNAI-600 078. PAN:AAPPM1107R VS. THE INCOME TAX OFFICER, BUSINESS WARD-IV(2), CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. K.MEENAKSHISUNDARAM RESPONDENT BY : MR. GURU BASHYAM, JCIT DATE OF HEARING : 15 TH OCTOBER, 2012 DATE OF PRONOUNCEMENT : 15 TH OCTOBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING THE ORDER OF THE CIT(A)-VIII, CHENNAI DATED 22.02.2 012. 2. THE ASSESSEE IS A SUPPLIER OF BUILDING MATERIAL. AS PER THE CASE OF THE ASSESSEE THE ENTIRE BUSINESS OF THE ASSESSEE IS SOLELY ON CASH BASIS. THE DAILY COLLECTIONS AR E IN CASH AND ARE THEREAFTER DEPOSITED IN THE BANK. FROM THE BA NK THE ASSESSEE ISSUES CHEQUE TO THE SUPPLIERS OF THE RAW MATERIAL SUCH AS CEMENT ETC. AS PER THE ADMISSION OF THE ASS ESSEE HE ITA NO.735/MDS/2012 2 IS NOT MAINTAINING BOOKS OF ACCOUNT. FOR THE ASSES SMENT YEAR 2008-09 THE ASSESSEE FILED ITS RETURN OF INCOME ON 17.10.2008 DECLARING INCOME OF ` 1,92,295/-. THE SAME WAS PROCESSED UNDER SECTION 143(1). THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) AND 1 42(1) WERE ISSUED. THE ASSESSING OFFICER VIDE ASSESSMENT ORDE R DATED 30.12.2010 MADE ADDITION TO THE TUNE OF ` 1,50,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. THE ASSESSIN G OFFICER FURTHER DISALLOWED THE DEDUCTION CLAIMED BY THE ASS ESSEE UNDER SECTION 80C IN THE ABSENCE OF ANY EVIDENCE. 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) V IDE IMPUGNED ORDER DISMISSED THE APPEAL OF THE ASSESSEE . NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNA L ASSAILING THE ORDER OF THE CIT(A) PRIMARILY ON TWO COUNTS:- I) SINCE THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT, THE PROFITS AND GAINS OF THE BUSINESS OF THE ASSESSEE WERE ASSESSED UNDER THE PROVISIONS OF SECTION 44AF. ACCORDINGLY, ADDITION ITA NO.735/MDS/2012 3 OF ` 1,50,000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS IS UNCALLED FOR. II) THE DEDUCTION UNDER SECTION 80C CLAIMED BY THE ASSESSEE WAS REJECTED BY THE CIT(A) WITHOUT AFFORDING OPPORTUNITY OF PRODUCING ANY DOCUMENT. 4. THE A.R. APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS NOT APPRECIATED THE F ACT THAT WHERE THE INCOME HAS BEEN ASSESSED UNDER THE PROVI SIONS OF SECTION 44AF OF THE ACT MAINTENANCE OF ACCOUNT IS N OT NECESSARY. ONCE THE PROVISIONS OF SECTION 44AF ARE APPLIED, NO OTHER ADDITION IS CALLED FOR IN RESPECT OF BANK DEPOSITS. HE FURTHER CONTENDED THAT THE CIT(A) DID NOT GRANT SUF FICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE CERTIFICATES FOR CLAIMING DEDUCTION UNDER SECTION 80C. HE SUBMITTED THAT IF AN OPPORTUNITY IS GIVEN, THE ASSESSEE CAN PRODUCE CERT IFICATES BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CLAI M UNDER SECTION 80C. 5. ON THE OTHER HAND, SHRI GURU BASHYAM APPEARING O N BEHALF OF THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND PRAYED FOR DISMISSAL OF THE APPEAL. ITA NO.735/MDS/2012 4 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL PARTIES AND HAVE PERUSED THE ORDERS PASSED BY THE A UTHORITIES BELOW. A PERUSAL OF THE ASSESSMENT ORDERS SHOWS TH AT THE ASSESSING OFFICER HAS MADE ADDITION OF ` 1,50,000/- SOLELY ON ESTIMATION BASIS. THE REASON GIVEN BY THE ASSESSING OFFICER FOR MAKING SUCH ADDITION IS NOT TENABLE. EVEN THE C IT(A) WHILE CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER HAS NOT GIVEN ANY JUSTIFIABLE REASON. IN OUR CONSIDERED OPI NION, ONCE THE PROVISIONS OF SECTION 44AF HAVE BEEN INVOKED AN D THE ASSESSING OFFICER IS SATISFIED THAT CASH DEPOSITS W ERE MADE FROM THE CASH SALES COLLECTION, THE ADDITION MADE T O THE TUNE OF ` 1,50,000/- AS UNEXPLAINED INVESTMENT IS UNCALLED FO R. ACCORDINGLY, WE DELETE THE ADDITION. 7. AS REGARDS THE CLAIM OF THE ASSESSEE AVAILING DE DUCTION UNDER SECTION 80C IS CONCERNED, THE CIT(A) HAS CAT EGORICALLY STATED THAT NO EVIDENCE HAS BEEN PLACED ON RECORD C LAIMING DEDUCTION UNDER SECTION 80C. IN THE INTEREST OF JUS TICE AND EQUITY, WE DEEM IT APPROPRIATE TO GRANT AN OPPORTU NITY TO THE ASSESSEE TO PRODUCE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CLAIM FOR A VAILING ITA NO.735/MDS/2012 5 DEDUCTION UNDER SECTION 80C. IN CASE, THE ASSESSEE PRODUCES THE DOCUMENTS IN SUPPORT OF HIS CLAIM TO T HE SATISFACTION OF THE ASSESSING OFFICER, THE BENEFIT OF DEDUCTION UNDER SECTION 80C BE GRANTED TO THE ASSESSEE. WE, THEREFORE, REMIT THIS ISSUE BACK TO THE ASSESSING O FFICER FOR LIMITED PURPOSE TO VERIFY THE DOCUMENTS OF THE ASS ESSEE IN THE ABOVE SAID TERMS. 8. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 15 TH DAY OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE) ( VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 15 TH OCTOBER, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.