Dr.K.Senthilnathan, CHENNAI V. ACIT Circle XIV, CHENNAI

ITA 950/CHNY/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6226 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 08-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Assessee Lawyers: R MUGUNTHAN
• Keywords: Unexplained investment; TDS; Set aside
• Section: 40(a)(ia); 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA , ACCOUNTAN T MEMBER ./ I . T . A NO. 950 /CHNY/201 9 ASSESSMENT YEAR: 20 1 1 - 201 2 DR. K. SENTHILNATHAN, C/O SHRI. R. MUGUNTHAN, CHARTERED ACCOUNTANT, OLD NO.10, NEW NO.23, ARISIKARAN STREET, MYLAPORE, CHENNAI 600 004. [PAN: AA DP K 0449A ] VS. THE ASSISTA NT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 7(1) 6 TH FLOOR, RM. NO.608, NEW BLOCK, M.G. ROAD, C HENNAI 600 0 34. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R. MUGUNTHAN, C.A. /RE SPONDENT BY : M R . G. JOHNSON, ADDL. CIT / DATE OF HEARING : 02.02 .2021 / DATE OF PRONOUNCEMENT : 20. 04. 2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 7 , CHENNAI IN I.T.A. NO. 22/ CIT(A) - 7 / 20 14 - 15 , DATED 22.02.2019 RELE VANT TO THE ASSESSMENT YEAR 20 1 1 - 201 2 . I . T . A NO .950/CHNY/2019 : - 2 - : 2. THE FIRST GROUND OF APPEAL RELAT ES TO THE ADDITION OF RS.1,03,00,000/ - . IN THE ASSESSMENT O RDER, THE ASSESSING OFFICER HAS NOTED THAT AS PER THE LEDGER OF M/S. SUMATHI DUGAR, THE ASSESSEE HAS RECEIVED A SUM OF RS.1,66,00,000/ - ON THE FOLLOWING DAYS, AS UNDER: DATE OF CREDIT BANK ACCOUNT AMOUNT RECEIVED (IN RUPEES) 13.10.2010 INDIAN OVERSEAS BA NK 50,00,000/ - 05.01.2011 INDIAN OVERSEAS BANK 25,00,000 14.01.2011 INDIAN OVERSEAS BANK 18,00,000/ - 25.01.2011 INDIAN OVERSEAS BANK 25,00,000/ - 09.02.2011 INDIAN OVERSEAS BANK 23,00,000/ - 15.03.2011 INDIAN OVERSEAS BANK 25,00,000/ - OUT OF RS.1,66,0 0,000/ - , THE ASSESSEE HAS REPAID RS.63,00,000/ - DURING THE FINANCIAL YEAR 2010 - 2011. ON VERIFICATION OF INDIAN OVERSEAS BANK, THE ABOVE SAID CREDIT IS NOT REFLECTED IN THE INDIAN OVERSEAS BANK STATEMENT. THE LEARNED COUNSEL FOR THE ASSESSEE WAS ASKED TO SHOW THE CORRESPONDING CREDIT ENTRY IN THE BANK STATEMENT FOR WHICH HE WAS UNABLE TO GIVE A CORRECT EXPLANATION. HENCE, THE ASSESSING OFFICER HAD DISALLOWED THE AMOUNT OF RS.1,03,00,000/ - FOR NON - SUBMISSION OF ADEQUATE EVIDENCES / SUPPORTING DOCUMENTS UND ER UNEXPLAINED INVESTMENT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE FOR THE FINANCIAL YEAR 2010 2011. I . T . A NO .950/CHNY/2019 : - 3 - : 3. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING THAT EVEN IN THE REMAND REPORT FILED BY THE ASSESSING OFFICER, IT IS VERY CLEAR ON THE ISSUE OF THE BANK STATEMENT ENTRIES AND ALSO DO NOT SPECIFY TO THE ASSESSEES CLAIM. 4. ON APPEAL BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT IN THE REMAND RE PORT, THE ASSESSING OFFICER VERIFIED ALL THE DETAILS INCLUDING THE BANKERS U/S.133(6) OF THE INCOME TAX ACT, 1961 AND ALSO GAVE A FINDING THAT THE AMOUNTS WERE RECEIVED FROM SUMATHI DUGAR AND OTHERS AND IN THE ABSENCE OF INDIVIDUAL NAMES OF LENDERS, THE SA ME COULD NOT BE CONFIRMED. HE REQUESTED THAT ONE MORE OPPORTUNITY BE GIVEN TO THE ASSESSEE TO FILE THE BANK STATEMENT AND ALL OTHER RELEVANT DETAILS TOO. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT RAISED ANY OBJECTION ON THIS ACCORD . 6. WE HAVE HEARD BOTH THE SIDES THROUGH VIDEO - CONFERENCING, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. I . T . A NO .950/CHNY/2019 : - 4 - : 7 . IN THIS ISSUE, WE FIND THAT NEITHER THE ASSESSING OFFICER NOR THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HA S PROPERLY VERIFIED THE BANK STATEMENT FILED BY THE ASSESSEE AND THEREFORE WE DIRECT THE ASSESSEE TO FILE ALL THE DETAILS BEFORE THE ASSESSING OFFICER AND THEREUPON THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND REMIT BACK THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THUS, THIS GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 . THE SECOND GROUND OF APPEAL IN THIS CASE RELATES TO ADDITION IN RESPECT OF RS.50,00,000 RECEIVED FROM M/S. SRI CHAKRA ENTERPRISES. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT M/S. SRI CHAKRA ENTERPRISES HAD ENTERED INTO AN AGREEME NT WITH SHRI. SENTHILNATHAN, THE ASSESSEE THAT WAS EXECUTED ON THE 14 TH DAY OF SEPTEMBER 2011 WHICH STATES THAT M/S. SRI CHAKRA ENTERPRISES (PURCHASER) HAS AGREED TO PURCHASE THE PROPERTY MORE FULLY DESCRIBED IN SCHEDULE B, (LAND MEASURING TO AN EXTENT O F 3,228 SQ.FT. BEING THE PLOT NO.5 AND BEARING DOOR NO.3, KURUNGALEESWARAN KOIL STREET, KOYAMBEDU VILLAGE) FROM THE ASSESSEE FOR A SALE CONSIDERATION OF I . T . A NO .950/CHNY/2019 : - 5 - : RS.5,25,00,000/ - . THE PURCHASER HAS ON THIS DAY PAID A SUM OF R S.1.96 CRORES. 9. THE ASSESSING OFFICE R HAS NOTED THAT THE ADVANCE RECEIVED BY THE ASSESSEE WAS FROM AN UNREGISTERED DOCUMENT AND ALSO THERE IS NO SIGNATURE OF THE WITNESS TOO. SINCE, THE AGREEMENT WAS ENTERED WELL AFTER THE PAYMENT OF RS.1.96 CRORES TO THE ASSESSEE, THERE IS NO CHEQUE NUMBER IN THE SAID AGREEMENT. ON VERIFICATION OF THE LEDGER WITH THE BANK STATEMENT, IT WAS NOTED THAT ON 02.07.2010, SHRI VIJAY KARTHIK HAS TRANSFERRED AN AMOUNT OF RS.17,00,000/ - AND SHRI P. PALANI HAS TRANSFERRED AN AMOUNT OF RS.15,00,000/ - AND SHRI A.P. SEL VAM (PROPRIETOR OF SRI CHAKRA ENTERPRISES) HAS TRANSFERRED AN AMOUNT OF RS.14,00,000/ - TO THE ASSESSEES BANK ACCOUNT. THE FOLLOWING ARE THE AMOUNTS RECEIVED ON THE SAID DATES AS ADVANCE. A) RS.17,00,000/ - BY WAY OF C HEQUE DATED 02.07.2010 B) RS.15,00,000/ - BY WAY OF CHEQUE DATED 02.07.2010 C) RS.14,00,000/ - BY WAY OF CHEQUE DATED 02.07.2010 D) RS.50,00,000/ - BY WAY OF CHEQUE DATED 04.07.2010 E) RS.37,00,000/ - BY WAY OF CHEQUE DATED 31.08.2009 F) RS.25,00,000/ - BY WAY OF CHEQUE DATED 31.03.2010 G) RS.38,00,000/ - BY WAY OF CHEQ UE DATED 31.03.2010 10 . THE ASSESSING OFFICER ALSO NOTED THAT THERE IS NO CREDIT OF RS.50,00,000/ - ON 04.07.2010 IN THE BANK STATEMENT AND THE LEDGER ACCOUNT OF M/S. SRI CHAKRA ENTERPRISES SAYS THAT IT IS A JOURNAL ENTRY ON 31.03.2011. HOWEVER, THE ASSES SEE DID NOT SUBMIT ANY PROOF FOR THE I . T . A NO .950/CHNY/2019 : - 6 - : OPENING BALANCE OF RS.1,00,00,000/ - . DURING THE SCRUTINY PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE JOURNAL ENTRY AND THE CREDIT FROM OTHER PARTIES AND WAS REQUESTED TO SUBMIT THE LEDGER FOR THE F.Y. 201 - 2011 WITH THE RELEVANT BANK STATEMENT FOR WHICH THE ASSESSEE COULD NOT EXPLAIN AND WAS UNABLE TO SUBMIT ANY EVIDENCES. HENCE, THE ASSESSING OFFICER DISALLOWED THE SUM OF RS.1,82,00,000/ - (EXCEPT RS.14,00,000/ - RECEIVED FROM SHRI A.P. SELVAM) FOR NON - SUBMISSION OF ADEQUATE EVIDENCES & SUPPORTING DOCUMENTS UNDER UNEXPLAINED INVESTMENT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE FOR THE FINANCIAL YEAR 2010 2011. 11. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY CALLING THE REMAND REP ORT RESTRICTED THE ADDITION TO THE EXTENT OF RS.50,00,000/ - . 1 2 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ALL THE DETAILS WERE FILED BEFORE THE ASSESSING OFFICER AND ALSO POINTED OUT PAGES 10 & 11 OF THE PAPER - BOOK AND SUBMITTED THAT THE ISSUE BE REMITTED BACK TO THE ASSESSING OFFICER. 1 3 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT RAISED ANY OBJECTION IN THIS REGARD. I . T . A NO .950/CHNY/2019 : - 7 - : 1 4 . WE HAVE HEARD BOTH THE SIDES THROUGH VIDEO - CONFERENCING , PERUSED THE MATERIALS AVAIL ABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 1 5 . THE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE AMOUNTS RECEIVED BY THE ASSESSEE IS NOT REFLECTED IN THE BANK ACCOUNT STATEMENT OF THE ASSESSEE WHEREAS AS PER PAGES 10 & 11 OF THE PAPER - BOOK THE TRANSACTION WERE REFLECTED. KEEPING IN VIEW THE ABOVE AND BY CONSIDERING THE REQUEST MADE BY THE ASSESSEE, WE REMIT THE ISSUE BACK TO THE ASSESSING OFFICER TO EXAMINE PAGES 10 & 11 OF THE PAPER - BOOK AND DECIDE THE ISSUE AFRE SH IN ACCORDANCE WITH LAW. THUS, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 16. THE THIRD GROUND OF APPEAL IN THIS CASE RELATES TO DISALLOWANCE U/S.40(A)(IA). IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ON PERUSAL OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2011, THE ASSESSEE HAS CLAIMED INTEREST PAID TO OTHERS AMOUNTING TO RS.5,46,000/ - . THE ASSESSING OFFICER HAS ASKED THE ASSESSEE DETAILS IN RESPECT OF THE TAX DEDUCTED AT SOURCE [TDS]. HOWEVER, THE ASSESSE E HAS NOT FILED ANY DETAILS OF THE TDS DEDUCTIONS AND HENCE THE ASSESSING I . T . A NO .950/CHNY/2019 : - 8 - : OFFICER HA D DISALLOWED THE AMOUNT OF RS.5,46,000/ - U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961. 17. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ORDE R OF THE ASSESSING O FFICER. 18. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE INTEREST PAID TO VARIOUS PERSONS BE DISALLOWED AS SOME OF THE PARTIES HAVE PAID TAXES UNDER THE ABOVE INCOME AND THEREFORE NO DISALLOWANCE CAN BE MADE. 19. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 20. WE HAVE HEARD BOTH THE SIDES THROUGH VIDEO - CONFERENCING, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. 21. FROM THE ABOVE FACTS, IT APPEARS THAT THE ASSESSEE HAS PAID CERTAIN AMOUNTS TO VARIOUS PARTIES. ACCORDING TO THE ASSESSING OFFICER, NO TDS HAS BEEN DEDUCTED. HOWEVER, ACCORDING TO THE ASSESSEE, SOME OF THE PARTIES HAVE ALREADY PAID TAXES FOR THE AMOUNT PAID BY THE ASSESSEE. THE ASSESSEE HAS NEITHER FILED ANY DETAILS I . T . A NO .950/CHNY/2019 : - 9 - : BEFORE THE ASSESSING OFFICER NOR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 22. THEREFORE, WE ARE OF THE OPINION THAT ALL THE DETAILS IN RESPECT OF THE PAYMENTS MADE BY THE ASSESSEE NEEDS TO BE VERIFIED . THUS, WE SET ASIDE THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO EXAMINE ALL THE DETAILS AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. T HIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 2 3 . IN THE RESULT, THE APPEA L FILED BY THE ASSESSEE IN I.T.A . NO. 9 50 /CHNY/201 9 IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONO UNCED ON 20 TH APRIL , 2021 IN CHENNAI. SD/ - ( ) ( G. MANJUNATHA) /ACCOUNTANT MEMBER SD/ - ( ) ( V. DURGA RAO ) /JUDICIAL MEMBER / CHENNAI, / DATED: 20 TH APRIL , 2021 IA , SR. PS / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF