N.Jayaboopathy, CHENNAI V. ITO, CHENNAI

ITA 895/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8174 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 07-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NANDA KUMAR
• Assessee Lawyers: ANAND BABUNATH
• Keywords: Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , ! '#.. $ %!& , ( )* BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ! ./ ITA NO.895/MDS/2016 + ,+ /ASSESSMENT YEAR: 2011-12 MRS.N. JAYABOOPATHY, 75 A, JAYA ARCADE, 1 ST FLOOR, FLAT NO.5, STATION ROAD, KORATTUR, CHENNAI 600 080. [PAN: ADQPN 9672 C] VS. THE INCOME TAX OFFICER, ERSTWHILE BUSINESS WARD XIII(2), PRESENT NON- CORPORATE WARD 7(2), WANAPARTHY BLOCK, 6 TH FLOOR, #121 M.G.ROAD, NUNGAMBAKKAM, CHENNAI-600 034. ( -. /APPELLANT) ( /0-. /RESPONDENT) -. 1 2 / APPELLANT BY : MR.ANAND BABUNATH, FCA /0-. 1 2 /RESPONDENT BY : MR.NANDA KUMAR, JCIT $ 1 3( /DATE OF HEARING : 28.12.2016 45, 1 3( /DATE OF PRONOUNCEMENT : 13.01.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST AN ORDER DATED 06.01.2016 OF COMMISSIONER OF INCOME TAX (APPEALS) -7, CHENNAI, IN ITA NO.18/CIT(A)-7/14-15 FOR THE AY 2011-12. ITA NO.895/MDS/2016 :- 2 -: 2.0 GROUNDS OF THE APPEAL : 1) FOR THAT THE ORDER OF THE COMMISSIONER OF INCOME-TA X (APPEALS)-7, CHENNAI, IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE AND IS OPP OSED TO THE PRINCIPLES OF NATURAL JUSTICE. 2) FOR THAT THE APPELLANT WAS NOT THE CUSTODIAN OF THE BANK ACCOUNT WHICH WAS REPORTED UNDER THE CASS FOR CASH DEPOSITS, SINCE IT WAS FORMING PA RT OF THE BOOKS OF ACCOUNT OF M/S. JAYA & CO. OWNED AND OPERATED BY THE SPOUSE OF THE APPEL LANT I.E. MR. RAMACHANDRAN. 3) FOR THAT THE FACTS OF THE INCLUSION OF THE BANK ACC OUNTS WITH THAT OF THE SPOUSES BUSINESS WAS ESTABLISHED BY THE APPELLANT BEFORE THE LD. AO A S WELL BEFORE THE CIT (A), WHO HAD NOT CONSIDERED AT THE TIME OF ARRIVING AT THE DECISION OF ADDITIONS TO THE APPELLANT. 4) FOR THAT THE CIT (APPEALS)-7, CHENNAI, HAVING POWER S CO-TERMINUS THAT OF LD.AO HAD NOT CONSIDERED AND RELIED ON THE ACS REPORT FOR SUSTAI NING THE ADDITIONS IS CONTRARY TO THE FACTS OF THE APPELLANTS CASE. 5) FOR THAT REMAND REPORT OF THE LD. AO IN RESPECT OF T HE ADDITIONAL EVIDENCES SUBMITTED BEFORE THE CIT (A) HAD NOT BEEN CONSIDERED IN ITS O RIGINALITY HAD BEEN IGNORED WHILE SUSTAINING THE ADDITIONS MADE BY THE AO. THE LD AO DI SREGARDED THE FACT THAT THE APPELLANT HAD NEVER BORROWED ANY MONIES SINCE HER REGULAR SOU RCES OF INCOME IS FROM HOUSE PROPERTY AS PER THE ITR FILED. 6) FOR THESE GROUNDS AND SUCH OTHER GROUND THAT MAYBE ADDUCED BEFORE OR DURING THE HEARING OF THE APPEAL WITH THE LEAVE OF THIS RESPECTFUL AUT HORITY, MAY BE PLEASED TO - (A) DELETE THE ADDITIONS OF RS.44,02,333/- AS UNEXPLAIN ED DEPOSITS U/S. 68 OF THE INCOME- TAX ACT, 1961; OR (B) PASS SUCH OTHER ORDERS AS THIS RESPECTFUL AUTHO RITY MAY DEEM FIT. 3.0 ALL THE GROUNDS OF THE APPEAL ARE RELATED TO THE A DDITION MADE BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS AO) AMOUNTING TO RS.44,02,333/- RELATING TO THE DEPOSITS MADE BY THE ASSESSEE IN SB A/C THE NO.0964010003622 WITH UCO BANK, KORATTUR BRANCH & ICICI, ANNA NAGAR, THIRD AVENUE BRANCH, AS PER THE DETAILS FURN ISHED AS UNDER:- NAME OF BANK AMOUNT IN RS. ICICI BANK 4,64,860-00 UCO BANK 43,15,997-00 ------------------ TOTAL DEPOSIT 47,80,857-00 LESS: RENTAL INCOME ADMITTED 3,78,524-00 ------------------- SOURCE FOR DEPOSIT IN BANK UNEXPLAINED 44,02,333-00 -------------------- ITA NO.895/MDS/2016 :- 3 -: 4.0 DURING THE ASSESSMENT PROCEEDINGS, THE AO CALLED F OR THE EXPLANATION FOR SOURCE AND THE ASSESSEE COULD NOT E XPLAIN THE SOURCE TO THE SATISFACTION OF THE AO. THEREFORE, THE AO MADE THE ADDITION OF RS.44,02,333/- TO THE RETURNED INCOME. THE ASSESS EE WENT ON APPEAL BEFORE THE LD.CIT(A) AND THE LD.CIT(A) WAS NOT CONV INCED WITH THE EXPLANATION OFFERED BY THE ASSESSEE, SINCE THERE WA S AN INCONSISTENCY IN THE EXPLANATION REGARDING THE SOURCE. BEFORE THE A O, THE ASSESSEE EXPLAINED THE SOURCE AS CASH LOANS FROM PRIVATE FIN ANCIERS AND IN SOME INSTANCES, EXPLAINED AS CASH LOANS FROM NEIGHBOURS. SINCE, THE ASSESSEE HAS CHANGED HER STAND FREQUENTLY REGARDING THE SOUR CE OF CASH DEPOSITS, THE LD.CIT(A) HELD THAT THE SOURCE OF THE CASH DEPO SITS WERE UNEXPLAINED AND CONFIRMED THE ADDITION MADE BY THE AO. 5.0 AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSES SEE IS ON APPEAL BEFORE US. APPEARING FOR THE ASSESSEE, THE LD.COUNSEL SUBMITT ED A PAPER BOOK AND ARGUED THAT SMT.JAYA BOOPATHY IS HAVING JOINT A CCOUNT WITH SHRI T. RAMACHANDRAN IN UCO BANK AND THE ACCOUNT BEING O PERATED BY SHRI RAMACHANDRAN (HUSBAND OF THE ASSESSEE), THE HUSBAND OF THE ASSESSEE ENGAGED IN HARDWARE BUSINESS AND DEPOSITS THE SALES IN THE JOINT ACCOUNT OF THE ASSESSEE FOR THE SAKE OF CONVENIENCE. THE LD .AR OF THE ASSESSEE, FURTHER, SUBMITTED THAT THE ENTIRE TRANSACTIONS/DEP OSITS MADE IN SB A/C OF THE ASSESSEE REPRESENTED THE SALE PROCEEDS AND BUS INESS TRANSACTIONS OF THE ASSESSEES HUSBAND AND DULY ACCOUNTED IN THE BO OKS OF ACCOUNTS OF ITA NO.895/MDS/2016 :- 4 -: THE ASSESSEES HUSBANDS AND OFFERED FOR TAX AS A TURNOVER. THE SAME WAS REFLECTED IN THE BALANCE SHEET OF THE M/S.JAYA & CO., THE BUSINESS OF THE ASSESSEES HUSBAND. THE LD.AR, FURTHER, SUBMIT TED THAT THE REPRESENTATIVE WHO APPEARED BEFORE THE LOWER AUTHOR ITIES HAS NOT PRESENTED THE CASE PROPERLY. THEREFORE, THERE WAS A CONFUSION IN EXPLANATION OF THE SOURCE WHICH LEAD THE LD.CIT(A) TO TAKE ADVERSE INFERENCE. THE LD.AR REQUESTED FOR ONE MORE CHANCE TO REMIT THE MATTER BACK TO THE FILE OF THE AO TO VERIFY THE CORRECTNES S OF THE TRANSACTIONS WITH THE BOOKS OF ACCOUNTS OF M/S.JAYA & CO., VIS--VIS TRANSACTIONS, CASH DEPOSITS MADE IN THE SB A/C. ON THE OTHER HAND, TH E LD.DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 6.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL PLACED ON THE RECORD. WE HAVE ALSO GONE THROUGH THE SB A/C AS WELL AS TH E CASH BOOK OF THE M/S.JAYA & CO., AND TEST CHECKED THE COUPLE OF TRANSACTIONS WHICH APPEAR TO BE RECORDED IN THE BOOKS OF ACCOUNTS OF M /S.JAYA & CO. THEREFORE, WE FOUND SOME FORCE IN THE ARGUMENT OF T HE ASSESSEES AR THAT CASH DEPOSITS MADE IN THE SB A/C OF THE ASSESSEE AR E RELATED TO THE BUSINESS TRANSACTIONS OF M/S.JAYA & CO., WHICH IS A BUSINESS CONCERN OF THE ASSESSEES HUSBAND. HOWEVER, THE ENTIRE DEPOSI TS NEED TO BE VERIFIED WITH THE BOOKS OF ACCOUNTS TO ARRIVE AT THE CORRECT CONCLUSION. THEREFORE, WE REMIT THE MATER BACK TO THE FILE OF AO AND DIREC T THE AO TO VERIFY THE TRANSACTIONS OF THE SB A/C WHETHER THEY WERE PROPER LY ACCOUNTED IN ITA NO.895/MDS/2016 :- 5 -: M/S.JAYA & CO. OR NOT. IF THE TRANSACTIONS ARE PRO PERLY ACCOUNTED IN THE M/S.JAYA & CO., THERE IS NO NEED TO MAKE THE SEPARA TE ADDITION IN THE HANDS OF THE ASSESSEE. THE AMOUNT OF TRANSACTIONS/ DEPOSITS NOT ACCOUNTED IN THE BOOKS OF ACCOUNTS OF M/S.JAYA & CO ., REQUIRED TO BE EXAMINED IN THE ANGLE OF SEC.69 OF THE INCOME TAX A CT AND DECIDE ON MERITS. THEREFORE, WE DIRECT THE AO TO EXAMINE THE CREDITS AND DECIDE THE ISSUE AFRESH ON MERITS. 7.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JANUARY, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( '# . . $ %!& ) (D.S.SUNDER SINGH) ( /ACCOUNTANT MEMBER /CHENNAI, 6! /DATED: 13 TH JANUARY, 2017. TLN 1 /3%7 87,3 /COPY TO: 1. -. /APPELLANT 4. $ 93 /CIT 2. /0-. /RESPONDENT 5. 7 : /3 /DR 3. $ 93 ( ) /CIT(A) 6. #+ = /GF