DCIT, CHENNAI V. P.Eswari, CHENNAI

ITA 951/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73594 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 06-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2013
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: B S PU RSHOTHAM; N DEVNATHAN
• Section: 143(3); 68; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 951/MDS/2013 ASSESSMENT YEAR : 2005-06 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(3), NO.181, NUNGAMBAKKAM HIGH ROAD, NUNGAMBAKKAM, CHENNAI 600 034. (APPELLANT) VS SMT. P. ESWARI, NO. 4 & 5, PRAKASAM STREET, JANAKI NAGAR, VALASARAVAKKAM, CHENNAI 600 087 [PAN: AAEPE 1790 M] (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN, CIT ASSESSEE BY : SHRI B.S. PURSHOTHAM, CA & SHRI N. DEVNATHAN, ADVOCATE DATE OF HEARING : 06-01-2014 DATE OF PRONOUNCEMENT : 08-01-2014 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-II , CHENNAI DATED 11-02-2013 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2005-06. I.T.A. NO. 951/MDS/2013 2 2. A SEARCH U/S. 132 OF THE INCOME TAX ACT, 1961 (H EREIN AFTER REFERRED TO AS THE ACT) WAS CONDUCTED AT THE RESI DENCE AND BUSINESS PREMISES OF SHRI T.R.PACHAMUTHU, CHAIRMAN, VALLIAMMAI SOCIETY AND SRM GROUP OF EDUCATIONAL INSTITUTIONS O N 12-08-2004. AS A RESULT OF SEARCH, UN-ACCOUNTED CASH, JEWELLERY , BOOKS OF ACCOUNT AND CERTAIN DOCUMENTS WERE SEIZED. THE ASS ESSEE IS A WIFE OF SHRI T.R. PACHAMUTHU. A PERUSAL OF THE BOO KS OF ACCOUNT OF THE ASSESSEE SHOWED THAT ASSESSEE HAD AVAILED A LOAN OF ` 66.00 LAKHS FROM NEW LINK OVERSEAS FINANCE LTD., [N OFL]. THE ASSESSEE WAS ASKED TO EXPLAIN ABOUT THE LOAN. THE ASSESSEE OBTAINED A CERTIFICATE FROM NOFL CONFIRMING LOANS T O THE EXTENT OF ` 30.00 LAKHS ONLY. THE ASSESSING OFFICER VIDE ASSES SMENT ORDER DATED 31-12-2009 PASSED U/S.153C R.W.S. 143(3) R.W. S. 263 OF THE ACT, MADE ADDITION OF ` 36.00 LAKHS FOR WHICH THE ASSESSEE COULD NOT FURNISH SATISFACTORY CONFIRMATIONS. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 31-12- 2009, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APP EALS). THE CIT(APPEALS) VIDE IMPUGNED ORDER DATED 11-02-2013, ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND ALLOWED THE APP EAL. THE I.T.A. NO. 951/MDS/2013 3 REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL ASSA ILING THE ORDER OF THE CIT(APPEALS). 3. SHRI P.B. SEKARAN, APPEARING ON BEHALF OF THE RE VENUE SUBMITTED THAT THE CIT(APPEALS) HAS ERRED IN DELETI NG THE ADDITION MADE U/S. 68 AMOUNTING TO ` 36.00 LAKHS. M/S. NOFL WHO WERE SHOWN AS CREDITOR FOR ` 66.00 LAKHS HAD ONLY CONFIRMED THE AMOUNT OF ` 30.00 LAKHS. THE ASSESSEE HAS NOT BEEN ABLE TO SHO W THE SOURCE OF REMAINING AMOUNT OF ` 36.00 LAKHS. ALTHOUGH THE ASSESSEE HAS FILED CONFIRMATION LETTERS FROM FIVE M ORE CREDITORS, BUT THE CONFIRMATION LETTERS FILED FROM ALL THE ALL EGED CREDITORS ARE UN-DATED. THERE IS NO MENTION OF MODE OF PAYMENT O F LOAN, PAN ETC., AND ALL THE LETTERS ARE STEREO TYPED. THE LD .DR CONTENDED THAT NO RELIANCE CAN BE PLACED ON THE CONFIRMATION LETTE RS FILED BY THE ASSESSEE. THE LD.DR STRONGLY SUPPORTED THE ASSESSM ENT ORDER AND PRAYED FOR THE DISMISSAL OF THE ORDER OF THE CI T(APPEALS). 4. ON THE OTHER HAND, SHRI B.S.PURSHOTHAM, CA & SHR I N. DEVNATHAN, ADVOCATE APPEARING ON BEHALF OF THE ASSE SSEE SUBMITTED THAT THE ASSESSEE HAD TAKEN A LOAN OF ` 66.00 LAKHS FROM NOFL. M/S. NOFL HAS ADVANCED LOAN TO THE TUNE OF ` 30.00 I.T.A. NO. 951/MDS/2013 4 LAKHS FROM ITS OWN SOURCES AND THE REMAINING AMOUNT OF ` 36.00 LAKHS WAS ADVANCED AFTER MOBILIZING ITS RESOURCES F ROM VARIOUS INDIVIDUALS. THE ASSESSEE HAS REPAID THE ENTIRE LO AN AMOUNT OF ` 66.00 LAKHS TO M/S. NOFL. THE FACT THAT THE AMOUNT HAS BEEN TAKEN FROM NOFL AND HAS BEEN RE-PAID TO NOFL IS EVI DENT FROM THE COPIES OF THE PROMISSORY NOTES AND BANK STATEME NTS. SINCE, THE LOAN WAS SOURCED FROM NOFL, THE ASSESSEE IN HER BOOKS OF ACCOUNT HAS NOT MENTIONED THE NAMES OF THE INDIVIDU ALS (EIGHT IN NUMBER) WHO HAVE CONTRIBUTED TO THE LOAN AMOUNT. D ESPITE BEST EFFORTS, THE ASSESSEE COULD GET CONFIRMATION LETTER S FROM FIVE OF THE EIGHT PARTIES WHO HAVE CONTRIBUTED TO THE LOAN AMOU NT AND THE CONFIRMATION LETTERS WERE PLACED ON RECORD BEFORE T HE ASSESSING OFFICER. HOWEVER, THE SAME WERE NOT CONSIDERED BY THE ASSESSING OFFICER. THE LD.COUNSEL FOR THE ASSESSEE PRAYED TH AT THE ORDER OF THE CIT(APPEALS) IS WELL REASONED AND DETAILED, THE REFORE, SHOULD NOT BE DISTURBED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE HAS ALLEGEDLY TAKEN A LOAN OF ` 66.00 LAKHS FROM M/S. NOFL. HOWEVER, THE ASSESSEE I.T.A. NO. 951/MDS/2013 5 COULD PLACE ON RECORD CONFIRMATION FROM M/S. NOFL T O THE EXTENT OF ` 30.00 LAKHS ONLY. AS REGARDS REMAINING ` 36.00 LAKHS, THE ASSESSEE HAS STATED THAT ALTHOUGH THE ENTIRE AMOUNT OF ` 66.00 LAKHS WAS SOURCED THROUGH M/S. NOFL, THE AMOUNT OF ` 30.00 LAKHS WAS GIVEN BY NOFL FROM ITS OWN SOURCES AND TH E REMAINING ` 36.00 LAKHS WAS ARRANGED BY M/S. NOFL FROM OTHER PA RTIES. THE ENTIRE LOAN AMOUNT WAS RETURNED BY THE ASSESSEE TO M/S. NOFL. THE ASSESSEE HAS PLACED ON RECORD CONFIRMATION LETT ERS FROM FIVE PARTIES CONFIRMING ADVANCEMENT OF LOAN. A PERUSAL OF THE RECORDS SHOW THAT THE CONFIRMATION LETTERS FILED BY THE ASS ESSEE FROM OTHER PARTIES ARE NOT DATED, NO DETAILS OF MODE OF PAYMEN T, DATE OF PAYMENT, PAN ETC., ARE GIVEN. SINCE, ALL THE CONFI RMATION LETTERS ARE SKETCHY, LACK INFORMATION AND ARE STEREO TYPED RELIANCE CANNOT BE PLACED ON THEM. THE ASSESSEE HAS PLACED ON RECO RD CERTAIN PROMISSORY NOTES IN FAVOUR OF M/S. NOFL BEFORE CIT( APPEALS) IN SUPPORT OF HER CONTENTIONS. RELIANCE CANNOT BE PLA CED ON THE SAID PROMISSORY NOTES EITHER, AS M/S. NOFL HAS GIVEN CON FIRMATION TO THE EXTENT OF ` 30.00 LAKHS ONLY AND IS SILENT ABOUT THE REMAINING AMOUNT OF ` 36.00 LAKHS. IF THE REMAINING AMOUNT HAS BEEN SOURCED BY M/S. NOFL OR THROUGH NOFL, NOFL COULD HA VE GIVEN CONFIRMATION IN RESPECT OF ENTIRE LOAN AMOUNT OF ` 66.00 LAKHS. I.T.A. NO. 951/MDS/2013 6 WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS MADE BY THE LD. ARS OF THE ASSESSEE. IN THE PRESENT FACTS AND CIRC UMSTANCES OF THE CASE, THE IMPUGNED ORDER IS SET ASIDE AND THE A PPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY , THE 08 TH JANUARY, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 08 TH JANUARY, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR