P.B.Ajit Babu, HUF, Madurai V. ITO, Madurai

ITA 955/CHNY/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7788 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 28-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: T BANUSEKAR
• Keywords: Unexplained investment; Bogus loan

Judgement Text

, , [ : ] IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI [ CAMP: MADURAI ] ... ! , ' # $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER %./ ITA NO.955/MDS/2015 ' ' (' / ASSESSMENT YEAR : 2007-08 SHRI P.B. AJIT BABU, HUF APARNA, 59, BHARATHI ULA ROAD, RACE COURSE, MADUAI-625 002. PAN : AAFHA 4393 H V. THE INCOME TAX OFFICER, NON-CORPORATE WARD 3(1), MADURAI. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SH. T. BANUSEKAR, CA ,-*+ . / / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT . 01 / DATE OF HEARING : 17.02.2017 23( . 01 / DATE OF PRONOUNCEMENT : 17.02.2017 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -3, MADURA I, DATED 27.02.2015 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE FIRST GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 62,929/- TOWARDS RENTAL ADVANCE RECEIVED BY THE ASS ESSEE. 2 I.T.A. NO.955/MDS/15 3. SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE RECEIVED RENTAL ADVANCE FROM THE TENANTS. THE ASSESSEE PRODUCED COPIES OF RENTAL AG REEMENT BEFORE THE ASSESSING OFFICER. THE ASSESSEE ALSO CLAIMS TH AT CONFIRMATION LETTERS WERE FILED. IT IS NOT KNOWN WHETHER THE RE NTAL AGREEMENT AND CONFIRMATION LETTERS WHICH ARE SAID TO BE AVAILABLE BEFORE THE ASSESSING OFFICER WERE CONSIDERED BY BOTH THE AUTHO RITIES OR NOT? MOREOVER, THERE WAS NO REFERENCE ABOUT THE CONFIRMA TION LETTERS RECEIVED FROM THE TENANTS IN THEIR RESPECTIVE ORDER S. 4. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE RENTAL AGREEMENT S WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER, THEREFORE, HE MAY NOT HAVE ANY OBJECTION TO REMIT THE MATTER TO THE FILE OF TH E ASSESSING OFFICER. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. A PERUSAL OF RENTAL AGREEMENTS SHOW THAT THE ASSESSEE HAS RECEIV ED ADVANCES WHILE LETTING OUT THE PROPERTY. THEREFORE, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THE RENTAL AGREEMENT HAS TO BE CONSIDERED BY THE ASSESSING OFFICER. THE ASSESSEE ALSO CLAIMS THAT CONFIRMATION LETTERS ARE FILED. ACCORDINGLY, THE O RDERS OF THE LOWER 3 I.T.A. NO.955/MDS/15 AUTHORITIES ARE SET ASIDE AND THE ADDITION OF ` 62,929/- IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RECONSIDER THE MATTER AFRESH IN THE LIGHT OF THE RENTAL AGREEMENT AND THE CONFIRMATION LETTERS THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF ` 1,25,411/- TOWARDS UNEXPLAINED INVESTMENT IN THE MU TUAL FUND. 7. SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THESE INVESTMENTS WERE MADE IN THE E ARLIER ASSESSMENT YEARS RIGHT FROM ASSESSMENT YEAR 2001-02 . THE LD. REPRESENTATIVE PLACED ON RECORD CHEQUE NUMBERS AND DATES THROUGH WHICH THE INVESTMENTS WERE MADE. THE LD. REPRESENT ATIVE VERY FAIRLY SUBMITTED THAT THE MATTER MAY BE REMITTED BA CK FOR VERIFICATION. 8. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE INVESTMENTS WERE MADE BY THE ASSESSEE IN MUTUAL FUNDS. SINCE THE ASSESSEE DID N OT PRODUCE BOOKS OF ACCOUNT IN THIS REGARD, THE ADDITION WAS M ADE BY THE ASSESSING OFFICER DURING THE YEAR UNDER CONSIDERATI ON. 4 I.T.A. NO.955/MDS/15 9. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE NOW PRODUCED CHEQUE NUMBERS AND DATE OF INVESTMENTS BEFORE THIS TRIBUNAL. THEREFORE, THE INVESTMENTS WERE MADE IN MUTUAL FUNDS IN THE EARLIER ASSESSMENT YEARS, HENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDITIO N FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE MATTER NEEDS VER IFICATION BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ADDITION OF ` 1,25,411/- IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFIC ER SHALL RE- EXAMINE THE ISSUE IN THE LIGHT OF THE DOCUMENTARY E VIDENCE PRODUCED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 10. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF ` 4,39,880/-. 11. SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, SUBMITTED THAT THE ADDITION WAS MADE BY THE ASSESSI NG OFFICER ON COMPARING THE ASSESSEES BOOKS OF ACCOUNT WITH THE BOOKS OF SMT. PRIYA AJIT. ACCORDING TO THE LD. REPRESENTATIVE, T HIS IS ONLY OPENING BALANCE, THEREFORE, THERE CANNOT BE FURTHER ADDITIO N FOR THE YEAR 5 I.T.A. NO.955/MDS/15 UNDER CONSIDERATION. HOWEVER, THE LD. REPRESENTATI VE SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 12. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ADDITION WAS MAD E AFTER COMPARING THE BOOKS OF THE ASSESSEE WITH THAT OF SM T. PRIYA AJIT. THE DIFFERENCE BETWEEN THE TWO WAS ADDED AND ADDITI ON WAS MADE IN THE HANDS OF THE ASSESSEE. 13. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT APPEARS WHAT WAS ADDED BY THE ASSESSING OFFICER IS DIFFERENCE BE TWEEN THE OPENING BALANCE AND THE CLOSING BALANCE. THEREFORE , THE MATTER NEEDS TO BE REMITTED BACK TO THE FILE OF THE ASSESS ING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ADDITION OF ` 4,39,880/- IS REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR VERIFICATION 14. THE NEXT GROUND OF APPEAL IS WITH REGARD TO BOG US LOAN CREDITORS. 6 I.T.A. NO.955/MDS/15 15. SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSEE HAS FURNISHED CONFIRMAT ION LETTERS BEFORE THE LOWER AUTHORITIES. HOWEVER, THE SAME WE RE NOT CONSIDERED. THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 16. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE VERY SAME ARGUME NT WAS MADE BEFORE THE CIT(APPEALS). THE CIT(APPEALS) AFTER CO NSIDERING THE EVIDENCE PRODUCED BY THE ASSESSEE, CONFIRMED THE AD DITION MADE BY THE ASSESSING OFFICER. 17. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE PRODUCED CONFIRMATION LET TERS FROM RESPECTIVE LOAN CREDITORS. WHEN THE ASSESSEE FILED CONFIRMATION LETTERS, IT IS OBLIGATORY ON THE PART THE ASSESSING OFFICER TO EXAMINE THE SAME. UNFORTUNATELY, BOTH THE AUTHORITIES BELO W HAVE NOT EXAMINED THE SAME. THEREFORE, THE MATTER NEEDS REC ONSIDERATION. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ADDITION TOWARDS BOGUS LOAN CREDITORS IS REMITTED B ACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE 7 I.T.A. NO.955/MDS/15 MATTER IN THE LIGHT OF THE CONFIRMATIONS FILED BY T HE ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH FEBRUA RY, 2017 AT MADURAI. SD/- ( ... ! ) (N.R.S. GANESAN) ' # /JUDICIAL MEMBER /MADURAI, 5% /DATED, THE 17 TH FEBRUARY, 2017. KRI. . ,'0 6(0 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 70 () /CIT(A)-I, MADURAI 4. 70 /CIT-2, MADURAI 5. 8! ,'0' /DR 6. !9' : /GF.