Jayavel Karthick, CHENNAI V. ITO, CHENNAI

ITA 792/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4138 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 31-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: ANAND BABUNATH
• Keywords: Peak credit
• Section: 6

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC D BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.792/MDS/2017 ( / ASSESSMENT YEAR: 2011-12) SHRI JAYAVEL KARTHICK, 25, TIRUVALLUVAR SALAI, TEYNAMPET, CHENNAI 600 018. VS THE INCOME TAX OFFICER, NON-CORPORATE WARD 7(2), CHENNAI PAN: AQVPK7192E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI ANAND BABUNATH, CA /RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT /DATE OF HEARING : 08.06.2017 !' /DATE OF PRONOUNCEMENT : 13.06.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)- 2, CHENNAI DATED 28.09.2016 IN ITA NO.120/CIT(A)-2/201 4-15 FOR THE ASSESSMENT YEAR 2011-12 PASSED U/S.250(6) R.W.S .143(3) OF THE ACT. 2. THE APPEAL WAS FILED BY THE ASSESSEE WITH A DE LAY OF 107 DAYS. THE LD. AR SUBMITTED THAT THE DELAY HAD OCCU RRED SINCE THE ASSESSEES FATHER WAS CRITICALLY ILL. THEREFO RE THE LD. AR 2 I TA NO.792/MDS/2017 PLEADED THAT THE DELAY MAY BE CONDONED. THE LD. DR STRONGLY OBJECTED TO THE SUBMISSION OF THE LD. AR. AFTER HE ARING BOTH SIDES, I AM OF THE CONSIDERED VIEW THAT THE DELAY O F 107 DAYS IN FILING THE APPEAL SHOULD BE CONDONED BECAUSE THE DE LAY WAS BEYOND THE CONTROL OF THE ASSESSEE. THEREFORE I HE REBY CONDONE THE DELAY AND PROCEED TO HEAR THE APPEAL ON MERITS. 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.15,86,670/- INVOKING THE PROVISIONS OF SECTION 69A OF THE ACT TOWARDS UNEXPLAINED CASH DEPOSITS. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL EARNING INCOME FROM OTHER SOURCE, FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 18.11.201 1, ADMITTING TOTAL INCOME OF RS.1,57,270/-. SUBSEQUEN TLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND FINALLY OR DER U/S.143(3) OF THE ACT WAS PASSED ON 07.03.2014, WHE REIN THE LD.AO MADE ADDITION OF RS.15,86,670/- TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSIT U/S.69 OF THE ACT. 3 I TA NO.792/MDS/2017 5. DURING THE COURSE OF SCRUTINY ASSESSMENT, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAS MADE CASH DEPOSI TS OF RS.25,97,550/- IN STATE BANK OF INDIA. THE ASSESSE E HAD EXPLAINED THAT HE HAD RECEIVED RS.21,42,471/- AS LO AN FROM RELATIVES, WHICH WAS DEPLOYED IN HIS ONLINE TRADING BUSINESS WITH FRIENDS, WHICH RESULTED IN HEAVY LOSSES. THE ASSES SEE ALSO PROVIDED THE NAME. ADDRESS AND PAN NUMBER OF HIS BR OTHER, MOTHER AND FATHER FROM WHOM HE HAD RECEIVED THE LOA N. HOWEVER, THE LD.AO AFTER GRANTING RELIEF TOWARDS LO AN RECEIVED BY CHEQUE AMOUNTING TO RS.7,06,683/- MADE ADDITION OF THE BALANCE AMOUNT OF RS.15,86,670/- AS UNEXPLAINED CAS H DEPOSIT U/S.69A OF THE ACT. ON APPEAL, THE LD.CIT(A) CONFI RMED THE ORDER OF THE LD.AO BY OBSERVING THAT THE ASSESSEE H AD FAILED TO ESTABLISH THE CREDIT-WORTHINESS OF THE SO CALLED FI VE LOAN CREDITORS. 6. BEFORE US, THE LD.AR SUBMITTED THAT THE ASSESSEE HAD GIVEN THE DETAILS OF HIS CLOSE RELATIVES SUCH AS BR OTHER, MOTHER AND FATHER FROM WHOM HE HAD RECEIVED CASH, WHICH HE DEPLOYED IN HIS BUSINESS ALONG WITH HIS FRIENDS. THE LD.AR FURTHER SUBMITTED THAT WITHOUT CONSIDERING THE PARTICULARS FURNISHED BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES AND ALS O WITHOUT GIVING THE BENEFIT OF PEAK CREDIT, THE LD.AO MADE A DDITION OF THE 4 I TA NO.792/MDS/2017 ENTIRE SUM DEPOSITED BY THE ASSESSEE IN HIS BANK AC COUNT, WHICH IS ERRONEOUS. THE LD.AR FURTHER ARGUED THAT THE LD .AO AS WELL AS THE LD.CIT(A) HAS ALSO NOT GRANTED THE BENEFIT O F SELF-EARNED CAPITAL DEPLOYED IN THE BUSINESS CONSIDERING HIS FI NANCIAL STATUS. THE LD.AR ACCORDINGLY PLEADED FOR DELETING THE ADDI TION MADE BY THE LD.AO. THE LD.DR ON THE OTHER HAND COULD NOT C ONTROVERT TO THE SUBMISSION OF THE LD.AR. HOWEVER, HE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE ASSESSEE HAD GIVEN THE DETAILS OF THE LOAN CREDITORS BEFORE THE LD.AO. THE SAME IS REPRODUCED HEREIN BELOW FOR REFERENCE:- THE LD.AO BASED ON THE RETURN FILED BY THE RESPECTI VE LOAN CREDITORS CAME TO A CONCLUSION THAT THE CREDIT WORT HINESS IS NOT ADEQUATE AND THEREBY SIMPLY REJECTED THE CONTENTION OF THE ASSESSEE WITHOUT EXAMINING THE LOAN CREDITORS. I D O NOT FIND THIS NAME RELATIONSHIP PAN AMOUNT MR. RAVIKUMAR BROTHER AWCPR3651A 4,51,061 MR. J. PRABHU BROTHER AOJPP6633D 5,06.748 MR. SELVAM BROTHER EWTPS1264R 4,34,662 MS. J. VEDHAVALLI MOTHER AATPV8859M 3,50,000 MR. L. JEYAVEL FATHER ACPPJ8209D 4,00,000 5 I TA NO.792/MDS/2017 ACTION OF THE LD.AO TO BE JUSTIFIABLE. THE LD.AO O UGHT TO HAVE MADE ENQUIRIES WITH THE LOAN CREDITORS BEFORE COMIN G TO A CONCLUSION THAT THEY ARE NOT CREDITWORTHY. FURTHER THE AMOUNT ADVANCED BY THE LOAN CREDITORS IS QUITE NOMINAL WHI CH RANGES BETWEEN RS. 3.5 TO 5 LAKHS, WHICH IS REASONABLE. M OREOVER, AN INDIVIDUAL WILL DEFINITELY POSSESS SOME CAPITAL IN HIS HAND FOR WHICH ALLOWANCE HAS TO BE GIVEN. CONSIDERING ALL T HESE ASPECTS, I AM OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY THE LD.AO FOR RS.15,86,670/- IS NOT WARRANTED. THEREFORE I H EREBY DIRECT THE LD.AO, TO DELETE THE ADDITION MADE BY THE LD.AO OF RS.15,86,670/- INVOKING THE PROVISIONS OF SECTION 6 9A OF THE ACT IN THE CASE OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON THE 13 TH JUNE, 2017. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER #$ /CHENNAI, %& /DATED 13 TH JUNE, 2017 JR & () *) /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. )./ 0 /DR 6. / /GF