Shri T.V.Krishna Rao, CHENNAI V. ACIT, CHENNAI

ITA 773/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64246 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM JT
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI , ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ] I.T.A.NO. 773/MDS/2012 ASSESSMENT YEAR : 2008 - 09 SHRI T.V.KRISH NA RAO 57, MALAYAPPAN STREET MANNADU CHENNAI 600 001 [PAN AHHPK 6752H] VS THE ACIT CIRCLE VIII CHENNAI ( APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : SHRI GURU BHASHYAM, JT. CIT DATE OF HEARING : 06 - 09 - 2012 DATE OF PRONOUNCEMENT : 06 - 09 - 2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - IX, CHENNAI, DATED 17.1.2012, BY TAKING THE FOLLOWING GROUNDS: 1. T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS ) IX , CHENNAI - 600 034 DATED 17 . 01 . 2012 IN I . T . A . NO.211/10 - 11 FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW , FACTS , AND IN THE CIRCUMSTANCES OF THE CASE . I.T.A.NO. 773/12 : - 2 - : 2 . THE CIT (APPEALS) ERRED IN CON FIRMING THE ADDITION OF RS . 27 , 89 , 000 / - BEING THE CASH DEPOSITS WITH ING VYSYA BANK , ANNA NAGAR BRANCH ON THE APPLICATION OF SECTION 68 OF THE ACT WRONGLY MENTIONED AS SECTION 69 OF THE ACT IN THE COMPUTATION OF TAXABLE TOTAL I NCOME WITHOUT ASSIGNING PROPE R REASONS AND JUSTIFICATION . 3 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 OF THE ACT HAD NO APPLICATION TO THE FACTS OF THE CASE INASMUCH AS THE INITIAL BURDEN/ONUS IN ESTABLISHING THE GENUINENESS OF THE TRANSACTION(S) AS WELL AS THE SOURCE FOR THE MONIES DEPOSITED IN THE BANK ACCOUNT WAS DISCHARGED WITH EVIDENCE AND DETAILS . 4 . THE CIT ( APPEALS) FAILED TO APPRECIATE THAT HAVING NOT D I SPROVED/ REJECTED SUCH EVIDENCE AND DETAILS RELATING TO THE CASH DEPOSIT TRANSACT I ONS , THE SUSTENANCE OF THE ADDITION U/S 68 OF THE ACT WAS WRONG , INCORRECT , UNJUSTIFIED , ERRONEOUS AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW . 5 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT HAVING NOT REJECTED THE SUBMISSIONS FILED IN DETAIL BEFORE HIM , TH E SUSTENANCE OF SUCH ADDITION BASED ON THE ANALYSIS OF THE BALANCE SHEET WAS WRONG , INCORRECT , UNJUSTIFIED , ERRONEOUS AND NOT SUSTAINABLE BOTH ON FACTS AND I N LAW . 6 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ACCOUNTING TREATMENT AS WELL AS M ISTAKES COMMITTED IN THE PRESENTATION OF ACCOUNTS WAS NOT DECISIVE AND CONCLUSIVE IN THE MATTER OF APPLYING THE DEEMING PROVISIONS WITH A VIEW TO MAKE AN ADDITION IN THE COMPUTATION OF TAXABLE TOTAL INCOME . 7 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT HAVING NOT CROSS - VERIFIED WITH REFERENCE TO THE EXPLANATION OFFERED WITH EVIDENCE IN THE PROCESS OF DISCHARGING THE INITIAL BURDEN/ONUS IN PROVING THE SOURCE FOR THE CASH DEPOSITS , THE SUSTENANCE OF THE SAID ADDITION WAS ERRONEOUS AND INVALID. 8 . THE CIT (APPEALS) WENT WRONG IN RECORDING THE FINDINGS IN THIS REGARD IN PARA 6 . 3 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 9. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THERE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING THE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IS NULLITY IN LAW . I.T.A.NO. 773/12 : - 3 - : 10. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TIME OF HEARING . 2 . THE A.R OF THE ASSESSEE ARGUED THAT THE ONLY ISS UE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF ` 27,89,000/ - BEING CASH DEPOSITS WITH ING VYSYA BANK, ANNA NAGAR BRANCH. HE SUBMITTED THAT BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT MADE ANY IN VESTMENT IN ING VYSYA BANK, ANNA NAGAR BRANCH, CHENNAI. THE ASSESSEE HAD DEPOSITED THE AMOUNT OF M/S ARAVINDH TRADERS, A SISTER CONCERN OF THE ASSESSEE WHERE THE ASSESSEE AND HIS WIFE WERE PARTNERS. THE ASSESSEE HAD INADVERTENTLY USED THE CASH PERTAI NING TO SUNDRY DEBTORS OF M/S ARAVINDH TRADERS. IN ORDER TO MAINTAIN GOOD RELATIONS WITH THE BANK, THE ASSESSEE HAS DEPOSITED THE AMOUNT IN HIS SAVINGS BANK ACCOUNT ON 31.3.2008. THE ASSESSEE HAD DEPOSITED THE AMOUNT IN ING VYSYA BANK INSTEAD OF CENTRA L BANK OF INDIA WHICH BELONGS TO M/S ARAVINDH TRADERS. TO SUPPORT THE GENUINENESS, THE ASSESSEE FILED AUDITED BALANCE SHEET OF M/S ARAVINDH TRADERS WITH HIS SISTER CONCERN. IT WAS FURTHER ARGUED THAT THE SAID AMOUNT OF ` 27,89,000/ - WAS REDEPOSITED THRO UGH ACCOUNT TRANSFER FROM ING VYSYA BANK TO THE ACCOUNT OF M/S ARAVINDH TRADERS WITH CENTRAL BANK OF INDIA, IN THE MONTH OF APRIL 2008. HE SUBMITTED THAT THE CIT(A) IN PARA 6.3 OF THE IMPUGNED ORDER HAS OBSERVED THAT ON CAREFUL STUDY OF THE BALANCE SHEET AS ON I.T.A.NO. 773/12 : - 4 - : 31.3.2008 OF M/S ARAVINDH H TRADERS IN THE ASSET SIDE THE ASSESSEE SHRI T.V.KRISHNA RAO WAS NOT FIGURING AS SUNDRY DEBTOR. HE, THEREFORE, HELD THAT THE ARGUMENTS OF THE ASSESSEE DO NOT REPRESENT THE FACTS AND AS THE ASSESSEE FAILED TO EXPLAIN HE S OURCE FOR CASH DEPOSITS IN THE BANK ACCOUNT, THE ASSESSING OFFICER WAS JUSTIFIED IN TREATING THE SAME AS INCOME OF THE ASSESSEE AND MAKING ADDITION TO THE INCOME OF THE ASSESSEE . HE ARGUED THAT THE CIT(A) HAS NOT CONSIDERED ALL THE SUBMISSIONS MADE BEF ORE HIM AND HAD NOT CARRIED OUT TH O ROUGH INVESTIGATION OF THE FACTS OF THE CASE. HE ADMITTED THAT THERE WERE SOME MISTAKES IN THE ACCOUNTS OF THE ASSESSEE BUT SUBMITTED THAT IF THE ENTIRE FACTS ARE CONSIDERED WITH THE MATERIALS AVAILABLE WITH THE ASSESSE E, THE SAME WOULD GO TO SHOW THAT THE FUNDS BELONGED TO THE SISTER CONCERN OF THE ASSESSEE . HE PRAYED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER BY GRANTING ONE MORE OPPORTUNITY TO THE ASSESSEE SO THAT ALL THE FACTS CAN BE V ERIFIED AND THE ISSUE BE DECIDED COMPLETELY. 3 . THE DR HAD NO OBJECTION TO THE SUBMISSION MADE BY THE ASSESSEE THAT THE MATTER SHOULD BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THE ENTIRE FACTS OF THE ISSUE. I.T.A.NO. 773/12 : - 5 - : 4 . AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT ADDITION O ` 27,89,000/ - WAS MADE BY THE ASSESSING OFFICER FOR DEPOSITS IN CASH MADE IN THE BANK ACCOUNT OF THE ASSESSEE WITH ING VYSYA BANK ON 31.3.2008 AS UNEXPLAINED DEP OSITS. THE ASSESSEE EXPLAINED THAT THE SAID AMOUNT BELONGED TO THE SISTER CONCERN M/S ARAVINDH TRADERS AND THAT THE SAID AMOUNT WAS RETURNED TO THEM IN THE MONTH OF APRIL 2008 THROUGH BANK TRANSFER FRO M ING VYSYA BANK TO THE ACCOUNT OF M/S ARAVINDH TRADE RS WITH CENTRAL BANK OF INDIA . WE OBSERVE THAT THE CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT IN THE BALANCE SHEET OF M/S ARAVINDH TRADERS THE ASSESSEE S NAME WAS NOT APPEARING AS SUNDRY DEBTOR. NO FURTHER INVESTIGATION WAS CARRIED OUT BY THE CIT(A). WE ALSO FIND THAT THE ASSESSING OFFICER IN PARA 7 OF HIS ORDER HAS STATED THAT THE ASSESSEE EXPLAINED THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT AS RECEIPTS FROM DEBTORS AND AS THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM WITH DOCUMENTARY EVIDENCE, THE ASSESSING OFFICER MADE ADDITION TO THE INCOME OF THE ASSESSEE. 5 . AS BOTH THE PARTIES BEFORE US HAVE AGREED THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFICATION OF ALL RELEVANT F ACTS AND THEN ADJUDICATE THE ISSUE AFRESH, WE SET ASIDE THE ORDER S OF THE LOWER AUTHORITIES AND RESTORE THE MATTER I.T.A.NO. 773/12 : - 6 - : BACK TO THE FILE OF THE ASSESSING OFFICER TO RE - ADJUDICATE THE ISSUE A FRESH AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSE SSEE. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 06 TH OF SEPTEMBER, 2012, AT CHENNAI. SD/ - SD/ - (VIKAS AWASTHY) JUDICIAL ME MBER ( N.S.SAINI ) ACCOUNTANT MEMBER DATED: 06 TH SEPTEMBER , 2012 RD COPY TO: APPELLANT / RESPONDENT / CIT(A) /CIT/ DR