SHRI. AHMED SHAKIR, CHENNAI V. DCIT COMPANY CIRCLE II(1), CHENNAI

ITA 752/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8098 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: HEMALATHA
• Keywords: Unexplained investment
• Section: 143(3); 142(1)

Judgement Text

, ( . . ) , IN THE INCOME TAX APPELLATE TRIBUNAL , B (SMC) BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.752/CHNY/2018 ( / ASSESSMENT YEAR: 2009-10) SHRI AHAMED SHAKIR, NO.16/33, KODAMBAKKAM HIGH ROAD, NUNGAMBAKKAM, CHENNAI 600 004. VS THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1), CHENNAI. PAN:AACPS3538B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SMT. HEMALATHA, CA / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT /DATE OF HEARING : 14.11.2018 /DATE OF PRONOUNCEMENT : 24.12.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI, DATED 30.11.2017 IN ITA NO.123/CIT(A)-6/2014-15 FOR THE ASSESSMENT YEAR 2009-10 PASSED U/S. 250(6) R.W.S. 143(3) & 147 OF THE ACT. 2 ITA NO.752 /CHNY /2018 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPEAL HOWEVER THE CRUXES OF THE ISSUES ARE THAT:- (I) THE LD.CIT(A) HAS ERRED IN PARTLY SUSTAINING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.2,40,433/- AS AGAINST RS.14,73,277/- TOWARDS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT. (II) THE LD.CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST U/S.234B OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 18.10.2010 ADMITTING TOTAL INCOME OF RS.13,84,920/-. THE CASE WAS REOPENED U/S.147OF THE ACT AND NOTICE U/S.143 & 142(1) OF THE ACT WAS ISSUED ON 12.04.2012 & 13.07.2012 RESPECTIVELY. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) R.W.S. 147 OF THE ACT ON 31.03.2014 WHEREIN THE LD.AO MADE ADDITION OF RS.14,73,277/- TOWARDS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT. 4. ON APPEAL THE LD.CIT(A) SUSTAINED THE ADDITION TO THE EXTENT OF RS.2,40,433/- BY OBSERVING AS UNDER:- 4.3 I HAVE CONSIDERED SUBMISSIONS OF THE LD.AR, PERUSED ASSESSMENT ORDER, REMAND REPORT AND REJOINDER OF THE LD.AR. IN THIS CASE, FACTS ARE CLEAR THAT APPELLANT HAS INVESTED AN AMOUNT OF RS.2,40,433/- IN SHARE TRADING WHICH HAS BEEN USED FOR TRADING ACTIVITY. NORMALLY, ACCOUNT WITH SHAREBROKER WILL REFLECT PURCHASE 3 ITA NO.752 /CHNY /2018 AND SALE OF THE TRADER SCRIPS, IF AMOUNTS OF SALES EXCEEDING PURCHASES THEN APPELLANT IS SHOWN TO HAVE GAINED FROM THE INVESTMENTS AND VICE-VERSA. THE ACCOUNT IS SETTLED AFTER CERTAIN TIME. THE AO HAS CONSIDERED ALL THE TRANSACTIONS REFLECTED IN THE SHARE TRADING ACCOUNT AS UNEXPLAINED INVESTMENT THINKING THERE MUST BE A CORRESPONDING INVESTMENT FOR EACH ENTRY. THE CUMULATIVE TRANSACTIONS REFLECTED IN SHARE TRADING ACCOUNT CANNOT BE CONSIDERED AS UNEXPLAINED INVESTMENT WITHOUT VERIFYING SETTLEMENT OF SAID ACCOUNTS. HOWEVER APPELLANT HAS MADE AN INITIAL INVESTMENT OF RS.2,40,433/- WHICH HAS NOT BEEN EXPLAINED AS TO THE SOURCE. FURTHER, APPELLANT HIMSELF ADMITTED CAPITAL GAINS OUT OF SHARE TRANSACTIONS AMOUNTING TO RS.20,685/-. IN VIEW OF THE FACTS, I CONFIRM THE ADDITION OF RS.2,40,433/- AS UNEXPLAINED INVESTMENT OUT OF RS.14,73,277/- AND ALSO DIRECT THE AO TO TAX THE CAPITAL GAIN OF RS.20,685/-. THE GROUNDS OF APPEAL ARE PARTLY ALLOWED. 5. BEFORE US THE LD.AR SUBMITTED THAT SUSTAINING THE ADDITION OF RS.2,40,433/- IN THE HANDS OF THE ASSESSEE IS NOT REASONABLE BECAUSE CONSIDERING THE FINANCIAL BACKGROUND OF THE ASSESSEE AND HIS FAMILY, MERE INVESTMENT OF RS.2,40,433/- CANNOT BE TREATED AS UNEXPLAINED INVESTMENT. THE LD.DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDER OF THE LD.CIT(A). 6. AFTER HEARING BOTH PARTIES, WE FIND MERIT IN THE CONTENTION OF THE LD.AR. CONSIDERING THE FINANCIAL BACKGROUND OF THE ASSESSEE IT CANNOT BE STATED THAT MERE INVESTMENT OF RS.2,40,433/- BE TREATED AS UNEXPLAINED INVESTMENT. THERE IS EVERY POSSIBILITY FOR THE ASSESSEE TO ACCUMULATED THE AMOUNT OF RS.2,40,433/- OVER A PERIOD OF TIME. THEREFORE WE HEREBY DIRECT 4 ITA NO.752 /CHNY /2018 THE LD.AO TO DELETE THE ADDITION OF RS.2,40,433/- SUSTAINED BY THE LD.CIT(A). WITH RESPECT TO THE OTHER GROUND RAISED BY THE ASSESSEE TOWARDS LEVY OF INTEREST U/S.234B OF THE ACT, WE HAVE NOTHING MORE TO SAY OTHER THAN, IT IS CONSEQUENTIAL IN NATURE. HENCE THIS GROUND RAISED BY THE ASSESSEE IS DEVOID OF MERITS. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 24 TH DECEMBER, 2018 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 24 TH DECEMBER, 2018 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER