S.Selvaraj, CHENNAI V. ACIT, Tiruppur

ITA 771/CHNY/2014

• Counselvise Citation: 77121714 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 14-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2014
• Court: TRIBUNAL
• Assessee Lawyers: SIRASIKA
• Keywords: Unexplained investment; Principle of natural justice
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.771 & 772 /MDS./2014 ( !' #' / ASSESSMENT YEAR : 2008-09) SHRI S.SELVARAJ , PROP. M/S.MURTHY COTTON WASTE COMPANY, NO.278,SABAPATHIPURAM, TIRUPUR 641 601. VS. ASSISTANT COMMISSIONER OF INCOME TAX , CIRCLE-1, TIRUPUR. PAN AHFPS 3964 D ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MS.SIRASIKA,ADVOCATE ()$% & ' / RESPONDENT BY : DR.B.NISCHAL,JCIT D.R. * + & ,- / DATE OF HEARING : 14.10.2015 .# & ,- /DATE OF PRONOUNCEMENT : 30.11.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THESE TWO APPEALS ARE FILED BY THE ASSESSEE, AGGR IEVED BY THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCO ME ITA NO. 771 & 772/MDS/14 MR.S.SELVARAJ 2 TAX(APPEALS)-II, COIMBATORE DATED 15.01.2014 IN I.T . APPEAL NO.89/2011-12, PASSED UNDER SECTION 143(3) R.W.S. 2 50 OF THE ACT AND ORDER DATED 10.01.2014 IN IT APPEAL NO.88/11-12 PASSED UNDER SECTION 271(1)(C) R.W.S. 250 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2008-09. SINCE THE QUANTUM APPEAL A ND THE PENALTY APPEAL ARE INTERLINKED, THEY ARE DISPOSED OF BY THI S COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2.1 THE ASSESSEE HAS RAISED THREE GROUNDS IN HIS QU ANTUM APPEAL AND ANOTHER EIGHT GROUNDS IN HIS PENALTY APPEAL. TH E CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRIEVED BY THE ORDE RS OF THE LD. CIT (A) FOR HAVING CONFIRMED THE ORDER OF LD. ASSESSING OFFICER FOR MAKING AN ADDITION OF ` 22,82,578/- AS UNEXPLAINED INVESTMENTS WITHOUT GRANTING SUFFICIENT OPPORTUNITY WHICH IS GROSSLY IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AND FOR LEVY OF PENALTY AMOUNTIN G TO ` 7,75,848/- U/S.271(1)(C) OF THE ACT. ITA NO. 771 & 772/MDS/14 MR.S.SELVARAJ 3 2.2 THERE WAS A DELAY OF FOUR DAYS IN FILING OF THE PENALTY APPEAL, HOWEVER AFTER CONSIDERING THE WRITTEN SUBMISSION DA TED 19 TH MAY, 2014 BY THE ASSESSEE, STATING THAT THE FILE GOT MIX ED UP AND LOST SIGHT OFF DUE TO WHICH THE DELAY WAS CAUSED, AND THE PLIG HT OF THE ASSESSEE DUE TO HIS CLAIM OF LOSS SUFFERED BY HIM ON ACCOUNT OF FIRE ACCIDENT, WE HEREBY CONDONE THE DELAY AND PROCEED TO ADJUDICA TE THE ISSUE ON MERITS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF COTTON & COTTON WASTE, FILED HIS RETURN OF INCOME ON 08.11.2 008 FOR THE ASSESSMENT YEAR 2008-09 ADMITTING HIS TOTAL INCOME AS ` 7,40,120/-. SUBSEQUENTLY THE CASE WAS TAKEN FOR SCRUTINY THROUG H CASS AND THE ASSESSMENT U/S.143(3) WAS COMPLETED ON 31.12.2010 W HEREIN THE LD. ASSESSING OFFICER MADE ADDITION OF ` 22,82,578/- BEING THE CASH DEPOSIT IN ICICI BANK ACCOUNT THE SOURCE OF WHICH W AS NOT EXPLAINED. ITA NO. 771 & 772/MDS/14 MR.S.SELVARAJ 4 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE ACCOUNTS MAINTAINED WITH ICICI BANK, TIRUPUR. IN RESPONSE, THE ASSESSEE HAD FURNISHED COPY OF BANK S TATEMENTS IN RESPECT OF ICICI BANK ACCOUNT HELD BY THE ASSESSEE. THESE CASH DEPOSITS WERE NOT REFLECTED IN THE BOOK OF ACCOUNTS OF THE ASSESSEE AND THE ASSESSEE COULD ALSO NOT FURNISH THE SOURCE OF THESE CASH DEPOSITS. THEREFORE, THE LD. ASSESSING OFFICER TREA TED THE ENTIRE CASH DEPOSITS OF ` 22,82,578/- AS UNEXPLAINED INVESTMENT AND ADDED TO THE INCOME OF THE ASSESSEE. BEFORE THE LD. CIT (A), THE ASSESSEE ARGUED BY STATING THAT HE HAD INCURRED HUGE LOSS DUE TO FI RE AND THERE WAS A CLAIM LODGED WITH THE INSURANCE DEPARTMENT WHICH IS IN DISPUTE. IT WAS THEREFORE SUBMITTED THAT DUE TO THE HUGE LOSS I NCURRED HE WAS NOT ABLE TO CO-OPERATE WITH THE AUDITORS TO MAKE PR OPER REPRESENTATION BEFORE THE INCOME TAX DEPARTMENT. HO WEVER, REJECTING THE SUBMISSIONS OF THE ASSESSEE THE LD. C IT (A) CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS NOW ON APPEAL. ITA NO. 771 & 772/MDS/14 MR.S.SELVARAJ 5 5. BEFORE US LD. A.R., REQUESTED THE MATTER TO BE R EMITTED BACK TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDE RATION SO THAT THE ASSESSEE MAY BE IN A POSITION TO FURNISH ALL THE DE TAILS OF THE LOSS SUFFERED BY HIM AND EXPLAIN ABOUT THE FATE OF THE I NSURANCE CLAIM OF THE ASSESSEE TOWARDS THE LOSS OF THE STOCK. HE FUR THER SUBMITTED THAT THE ASSESSEE HAD IN FACT SUFFERED HUGE LOSS IN HIS BUSINESS AND THIS ADHOC ADDITION OF ` 22,82,578/- WILL BE TOO HARSH LEADING TO MISCARRIAGE OF JUSTICE. LD. D.R ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE AND PLEADED THAT THE S AME MAY BE CONFIRMED. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY P ERUSED THE MATERIALS AVAILABLE ON RECORD. NO DOUBT THE ASSESSE E HAD GROSSLY ERRED BY NOT ACCOUNTING THE CASH DEPOSITS MADE BY H IM IN ICICI BANK FOR ` 22,82,578/-, HOWEVER, THE CLAIM OF THE ASSESSEE FOR HAVING INCURRED LOSS OUGHT TO HAVE BEEN EXAMINED BY THE RE VENUE, MORE SO WHEN THE DETAILS OF THE INSURANCE CLAIM HAS BEEN BR OUGHT TO THE NOTICE OF THE REVENUE. FURTHER THE ASSESSEE HAS ALS O FAILED TO ITA NO. 771 & 772/MDS/14 MR.S.SELVARAJ 6 PRODUCE THE INSURANCE CLAIM MADE BY HIM DUE TO LOSS OF STOCK BY FIRE. NOW THE ASSESSEE HAS CAME BEFORE US STATING THAT TH E REVENUE HAS NOT PROVIDED PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. THE ASSESSEE HAS EXPLAINED THAT DUE TO THE CALAMITY HE WAS IN DISTRESS AND THEREFORE, HE WAS NOT ABLE TO CO-OPERATE IN THE PROCEEDINGS. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT ONE MORE OPPORTUNITY HAS TO BE PROVIDED TO THE ASSESSEE IN ORDER TO JUSTIFY HIS STAND. ACCORDINGLY , WE HEREBY REMIT THE QUANTUM APPEAL OF THE ASSESSEE BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR DENOVO CONSIDERATION. THE AS SESSEE IS ALSO DIRECTED TO PRODUCE ALL THE REQUISITE MATERIALS BEF ORE THE REVENUE AND ALSO EXPLAIN THE SOURCE OF CASH DEPOSIT IN ICIC I BANK FOR ` 22,82,578/- PROMPTLY, FAILING WHICH THE REVENUE SHA LL BE AT LIBERTY TO PASS APPROPRIATE ORDER ON MERITS AND LAW BASED ON T HE MATERIALS AVAILABLE ON THE RECORD. SINCE WE HAVE REMITTED BA CK THE QUANTUM APPEAL OF THE ASSESSEE TO THE FILE OF LD. ASSESSING OFFICER, CONSEQUENTLY THE PENALTY APPEAL IS ALSO REMITTED BA CK TO THE FILE OF LD. ASSESSING OFFICER FOR DENOVO CONSIDERATION. ITA NO. 771 & 772/MDS/14 MR.S.SELVARAJ 7 7. IN THE RESULT, BOTH THE QUANTUM APPEAL AND PENAL TY APPEAL OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . !'# $! ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH NOVEMBER, 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF