R.Balachandran, Tiruvarur V. ITO, Nagapattinam

ITA 877/CHNY/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4612 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 20-04-2015
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA JT
• Assessee Lawyers: VENKATESH
• Keywords: Depreciation
• Section: 144

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C/SMC, CHENNAI , ! BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ITA NO.877/MDS/2015 ' # $%# / ASSESSMENT YEAR : 2010-11 R.BALACHANDRAN, NO.36-63/1, PILLAI STREET, KORADACHERRY, TIRUVARUR, DIST. GUINDY, CHENNAI 600 032. [PAN: ANOPB 3524F] VS. INCOME TAX OFFICER, WARD-I(1), NAGAPATIINAM. ( /APPELLANT ) ( / RESPONDENT ) &' ( ) / APPELLANT BY : SHRI VENKATESH, CA *+&' ( ) / RESPONDENT BY : SHRI SANAT KUMAR RAHA, JT. CIT , $ ( - / DATE OF HEARING : 03.05.2017 .% ( - / DATE OF PRONOUNCEMENT : 09.05.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE REVENUE AGITATING AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, TIRUCHIRAPA LLI (CIT(A) FOR SHORT) DATED 06.01.2015, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S. 144 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAF TER) DATED 12.03.2013 FOR ASSESSMENT YEAR (AY) 2010-11. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE, AN INDIVIDUAL IN THE CIVIL CONSTRUCTION BUSINESS, WAS ASSESSED UNDER SEC TION 144 OF THE ACT AT AN INCOME OF RS. 17,80,410/-, AS AGAINST A RETURNED IN COME OF RS. 5,85,904/-. THE 2 ITA NO. 877/MDS/2015 (AY 2010-11) R.BALACHANDRAN V. ITO ONLY ADDITION MADE IN ASSESSMENT, FOR RS. 11,94,508 /-, IS TOWARD THE UNEXPLAINED SOURCE OF PAYMENT TO A TRADE CREDITOR, M/S. KALAI CONSTRUCTIONS, TO THAT EXTENT, I.E., OUT OF THE TOTAL PAYMENT OF RS. 40,56,800/- THERETO DURING THE YEAR. THIS WAS DETERMINED ON THE BASIS OF THE ASSES SEES BALANCE-SHEETS AS AT THE END OF THE IMMEDIATELY PRECEDING YEAR AND THE RELEVANT YEAR, INFERRING, ON THE BASIS OF THE CHANGES IN THE CREDITORS OUTSTANDING BALANCE (IN ACCOUNTS) AS AT THE BEGINNING AND THE END OF THE RELEVANT YEAR, AS REFL ECTED IN THE RESPECTIVE BALANCE-SHEETS, BEING AT RS.40.57 LAKHS AND NIL RES PECTIVELY. SOURCES TO THE EXTENT OF RS. 28,62,292 WERE ASCERTAINED BY THE ASS ESSING OFFICER (AO) FROM THE SAID BALANCE-SHEETS, BEING THE REDUCTION IN THE AMOUNT OF SOME ASSETS, APART FROM THE SURPLUS, GROSS OF DEPRECIATION A NON-CAS H CHARGE, ARISING DURING THE YEAR. THIS FOUND ACCEPTANCE IN APPEAL BY THE LD. CI T(A) INASMUCH AS THE ASSESSEE HAD CLEARLY FAILED TO LEAD ANY FRESH EVIDE NCE TOWARD SUBSTANTIATING HIS CLAIM OF PAYMENT OF THE IMPUGNED SUM TO THE SAID CR EDITOR OUT OF DISCLOSED SOURCES. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEA L. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THE REVENUES WHOLE CASE IS MUCH ADO ABOUT NOTHING. THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT FOLLOWING DOUBLE ENTRY SYSTEM OF A CCOUNTS, SO THAT EACH CREDIT ENTRY HAS A CORRESPONDING DEBIT AND VICE VERSA. THE N, AGAIN, BOTH THE BALANCE- SHEETS AS AT 31/3/2009 AND 31/3/2010, ON THE BASIS OF WHICH ON THE BASIS OF CHANGES IN SOME ASSETS, THE INFERENCE OF PAYMENT TO A CREDITOR OUT OF BOOKS HAS BEEN ARRIVED AT, ARE BALANCED, I.E., THE TWO SIDES OF THE BALANCE-SHEETS, REPRESENTING THE SOURCES AND APPLICATION OF FUNDS, MATCH. THIS WOULD IN FACT BE SO AT ANY GIVEN POINT OF TIME, THOUGH A BALANCE-SHE ET IS DRAWN ONLY AT SPECIFIC INTERVALS OF TIME, USUALLY AT THE END OF THE ACCOUN T PERIOD. HOW COULD THEN, ONE WONDERS, IT BE SAID THAT A PART OF THE PAYMENT (OF RS. 28.62 LAKHS) TO A CREDITOR, LIABILITY TO WHOM AT ANY GIVEN POINT OF TIME (DURIN G THE YEAR) STANDS STATED IN 3 ITA NO. 877/MDS/2015 (AY 2010-11) R.BALACHANDRAN V. ITO FULL IN THE BOOKS OF ACCOUNT, IS, TO ANY EXTENT, MA DE OUTSIDE BOOKS OF ACCOUNT ? THE ASSESSEES ACCOUNTS, SUMMARIZED IN THE BALANCE- SHEETS DRAWN THERE-FROM AS AT THE BEGINNING AND THE END OF THE RELEVANT YEAR, ITSELF EXPLAIN THE SOURCE OF THE PAYMENT. UNLESS THE REVENUE IMPUGNS A PARTICULAR SO URCE AS NOT GENUINE, STATING THE REASON/S THERE-FOR, WHICH IS NOT SO IN THE INSTANT CASE, THERE IS NO BASIS TO THE REVENUES CASE. THE ASSESSEE HAS IN FACT, ON HIS PART, ALSO DRAWN STATEMENT OF THE FUNDS GENERATED, ON THE BASIS OF T HE CHANGES IN THE ASSETS AND LIABILITIES AS AT THE BEGINNING AND THE END OF THE RELEVANT YEAR, REFLECTING A GROSS GENERATION (AND APPLICATION) OF RS. 43,80,182/-, AN D AN EQUAL APPLICATION, INCLUDING RS. 40.57 LAKHS TO THE CONCERNED CREDITOR (PB PG. 3). THE REVENUES CASE IS WHOLLY WITHOUT MERIT. I DECIDE ACCORDINGLY, DELETING THE IMPUGNED ADDITION. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON MAY 09, 2017 AT CHENNAI . SD /- ( ) (SANJAY ARORA) /ACCOUNTANT MEMBER /CHENNAI, / /DATED, MAY 9, 2017. EDN 0 ( *'-12 32%- /COPY TO: 1. &' /APPELLANT 2. *+&' /RESPONDENT 3. , 4- ( )/CIT(A) 4. , 4- /CIT 5. 2$56 *'-' /DR 6. 67# 8 /GF