ITO, Virudhunagar v. Sri S.Mohan, Rajapalayam

ITA 1051/CHNY/2010 | 2006-2007
Pronouncement Date: 25-10-2013 | Result: Dismissed

Appeal Details

RSA Number 105121714 RSA 2010
Assessee PAN AKPPM0493G
Bench Chennai
Appeal Number ITA 1051/CHNY/2010
Duration Of Justice 3 year(s) 3 month(s) 27 day(s)
Appellant ITO, Virudhunagar
Respondent Sri S.Mohan, Rajapalayam
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Date Of Final Hearing 22-10-2013
Next Hearing Date 22-10-2013
Assessment Year 2006-2007
Appeal Filed On 28-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENNAI BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD JUDICIAL MEMBER ITA NO. 1051/MDS/2010 (ASSESSMENT YEAR: 2006-07) THE INCOME TAX OFFICER WARD-I(2) RAILWAY FEEDER ROAD VIRUDHUNAGAR-626 001. VS. MR. S.MOHAN PROP: MARUTHA AGENCY 643 THENKASI ROAD RAJAPAYALAM. PAN:AKPPM0493G (APPELLANT) (RESPONDENT) APPELLANT BY : MR. N.MADHAVAN JCIT RESPONDENT BY : MR. S.SRIDHAR ADVOCATE DATE OF HEARING : 22 ND OCTOBER 2013 DATE OF PRONOUNCEMENT : 25 TH OCTOBER 2013 O R D E R PER CHALLA NAGENDRA PRASAD : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II MADURA I DATED 03.03.2010 FOR THE ASSESSMENT YEAR 2006-07. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE ADDITION OF ` 8 00 000/- MADE TOWARDS UNEXPLAINED CASH CREDITS IN RESPECT OF SUNDRY CREDITORS. ITA NO.1051/MDS//2010 2 2. THE ASSESSING OFFICER WHILE COMPLETING THE ASSES SMENT MADE ADDITION OF ` 8 00 000/- AS UNEXPLAINED CASH CREDITS HOLDING THAT THE ASSESSEE DID NOT PROPERLY EXPLAIN THE SOURCES CREDIT WORTHINESS OF THE CREDITORS. ON AP PEAL THE COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE AND THE REASONS FOR MAK ING ADDITION BY THE ASSESSING OFFICER DELETED THE ADDIT ION AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 3. THE DEPARTMENTAL REPRESENTATIVE PLACING RELIANC E ON THE ORDER OF THE ASSESSING OFFICER VEHEMENTLY ARGUE S THAT THE ASSESSEE HAS NOT PROVED THE SOURCES AND CREDITWORTH INESS OF THE CREDITORS. 4. THE COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR ADJOURNMENT THOUGH THE PETITION WAS FILED BY HIM. THE COUNSEL FOR THE ASSESSEE STRONGLY PLACES RELIANCE O N THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE DOCUMENTS ON RECORD. THE ASSESS EE HAS ITA NO.1051/MDS//2010 3 RECEIVED ` 6 00 000/- FROM SMT. K.MUTHULAKSHMI WIFE OF THE ASSESSEE WHO IS WORKING AS SUPERINTENDENT IN THE O FFICE OF SOCIAL WELFARE DEPARTMENT GOVT. OF TAMIL NADU AND ` 4 00 000/- FROM MR. K.MOHANKUMAR BROTHER-IN-LAW OF THE ASSESSEE. THE ASSESSEE EXPLAINED THAT MRS. K.MUTHU LAKSHMI HAD IN FACT RECEIVED LOAN OF ` 6 00 000/- FROM TWO PERSONS AND THE SAME WAS ADVANCED TO THE ASSESSEE FOR HIS B USINESS PURPOSES. HOWEVER THE ASSESSING OFFICER DID NOT S ATISFY WITH THE CREDITWORTHINESS OF SMT. K.MUTHULAKSHMI AND ADD ED THE SAID AMOUNT AS CASH CREDIT UNDER SECTION 68 OF THE ACT. THE ASSESSEE EXPLAINED THAT HE HAS TAKEN LOAN OF ` 4 00 000/- FROM MR. K.MOHANKUMAR. THE ASSESSING OFFICER ACCEPT ED ` 2 00 000/- FROM OUT OF ` 4 00 000/- AND DISALLOWED ` 2 00 000/- AND ADDED ` 2 00 000/- AS CASH CREDIT UNDER SECTION 68 OF THE ACT. THE COMMISSIONER OF INCOME T AX (APPEALS) CONSIDERING THE EXPLANATION AND SUBMISSIO NS OF THE ASSESSEE DELETED THE ADDITIONS OBSERVING AS UNDER:- 5. THE ASSESSING OFFICER FOUND THAT THERE ARE CASH CREDITS IN THE NAME OF MRS. K.MUTHULAKSHMI FOR ` 6 00 000/- AND K.MOHANKUMAR FOR ` 4 00 000/-. THE ASSESSEE ITA NO.1051/MDS//2010 4 WAS ASKED TO PROVE THE ABOVE CREDITS. A STATEMENT WAS RECORDED FROM MRS. K.MUTHULAKSHMI THE APPELLANTS WIFE IN WHICH SHE STATED THAT SHE OBTAINED LOAN OF ` 6 00 000/- FROM TWO PERSONS AND ADVANCED THE SUM TO HER HUSBAND TOWARDS HIS BUSINESS. NOT SATISFIED WITH THE CREDIT WORTHINESS OF MUTHULAKSHMI THE ASSESSING OFFICER TREATED THE SUM OF ` 6 00 000/- AS CASH CREDIT AND ADDED U/S.68 OF THE ACT. A STATEMENT WAS ALSO RECORDED FROM MR. K.MOHANMUMAR BROTHER-IN- LAW OF THE ASSESSEE. OUT OF THE LOAN OF ` 4 00 000/- GIVEN BY HIM ` 2 00 000/- WAS ACCEPTED BY THE ASSESSING OFFICER AND BALANCE ` 2 00 000/- WAS DISBELIEVED AND THE SUM WA S ADDED AS CASH CREDIT U/S 68 OF THE ACT . AT THE TIME OF HEARING BEFORE THE UNDERSIGNED THE AUTHORISED REPRESENTATIVE STATED THAT THE LOANS RECEIVED FROM MUTHULAKSHMI AND MOHANKUMAR ARE GENUINE ONE AND THE ASSESSING OFFICER DID NOT APPRECIATE THE LOAN TRANSACTIONS OF THE CREDITORS . HE PLEADED FOR THE DELETION OF THE SAME AND ALSO FILED THE COPIES OF STATEMENTS RECORDED FROM MUTHULAKSHMI AND MOHANKUMAR BY THE ASSESSING OFFICER . PERUSAL OF THE STATEMENT RECORDED BY THE ASSESSING OFFICER FROM MUTHULAKSHMI REVEALS THAT SHE STATED TO HAVE TAKEN A LOAN OF ` 4 00 000 /- FROM ONE MR . AYYANAR THEVAR AND ` 2 00 000/- FROM ONE MR . BALU. SHE ALSO STATED THAT SHE HAS GIVEN ` 6 00 000/- TO HER HUSBAND FOR HIS BUSINESS . THE ASSESSING OFFICER DID NOT ATTEMPT TO EXAMINE AYYANAR THEVAR AND BALU TO KNOW WHETHER THEY HAVE REALLY GIVEN THE MONEY TO MUTHULAKSHMI OR NOT . THE ASSESSING OFFICER FAILED TO BRING DDITIONAL EVIDENCES TO SUBSTANTIATE HIS CONCLUSION. THE INITIAL ONUS OF FILING DETAILS WAS SATISFIED BY THE ASSESSEE BY PRODUCING ITA NO.1051/MDS//2010 5 THE CREDITORS BEFORE THE ASSESSING OFFICER . THE ASSESSING OFFICER DID NOT CARRY OUT THE INVESTIGATION PROPERLY TO FIND OUT THE LOAN TRANSACTION OF THE CREDITORS. IN THE ABSENCE OF NEGATIVE FINDING' THAT THE CRE D ITORS LOAN TRANSACTIONS ARE BOGUS THE ADDITION CANNOT BE SUSTAINED . THEREFORE I ORDER DELETION OF ` 6 00 000/- MADE IN THE NAME OF MUTHULAKSHMI . PERUSAL OF THE STATEMENT RECORDED FROM K. MOHANKUMAR ALSO REVEALED THAT HE HAS GIVEN A LOAN OF ` 4 00 000/- TO THE APPELLANT . OUT OF ` 4 00 000 /- HE HAS GIVEN HIS OWN MONEY OF RS . 2 00 000/- AND TOOK A LOAN OF RS . 2 00 000 /- FROM ONE MR . ALAGARSAMY . THE ASSESSING OFFICER ACCEPTED ONLY RS . 2 00 000/- AND DISBELIEVED THE LOAN FROM ALAGARSAMY . BUT THE ASSESSING OFFICER DID NOT EXAMINE MR . ALAGARSAMY TO FIND OUT THE T R UE NATURE OF THE LOAN TRANSACTION . IN THE ABSENCE OF CORROBORATIVE EVIDEN C E TO THE E F FECT THAT THE LOAN TRANSACTION IS A SHAM ONE THE ADDITION CANNOT BE SUSTAINED . I THERE F ORE ORDER THE DELETION OF RS . 2 00 000/- MADE IN THE NAME OF MOHANKUMAR . 6. ON GOING THROUGH THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS) AND THE ASSESSMENT ORDER WE F IND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMM ISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION ESPE CIALLY WHEN THE STATEMENT WAS RECORDED BY THE ASSESSING OF FICER FROM SMT. K.MUTHULAKSHMI WHICH REVEALS THAT SHE HA S TAKEN LOAN OF ` 4 00 000/- FROM MR. AYYANAR THEVAR AND ITA NO.1051/MDS//2010 6 ` 2 00 000/- FROM MR. BALU AND ADVANCED THE SAID AMOU NTS TO THE ASSESSEE FOR HIS BUSINESS PURPOSES. THE ASSESSI NG OFFICER DID NOT ATTEMPT TO EXAMINE MR. AYYANAR THEV AR AND MR. BALU. A STATEMENT WAS ALSO RECORDED FROM MR. K.MOHANKUMAR WHICH REVEALS THAT HE HAS GIVEN ` 2 00 000/- OUT OF HIS OWN MONEY AND ` 2 00 000/- AS LOAN FROM MR. ALAGARSAMY TO THE ASSESSEE. HOWEVER THE ASSESSING OFFICER ACCEPTED ONLY ` 2 00 000/- AND DISBELIEVED THE LOAN OF ` 2 00 000/- FROM ALAGARSAMY WITHOUT EXAMINING MR. ALAGARSAMY. 7. IN THE CIRCUMSTANCES AS THERE IS NO EVIDENCE TO SHOW THAT THESE TRANSACTIONS ARE NOT GENUINE AND SINCE T HE ASSESSEE HAS EXPLAINED THE SOURCES OF THESE CREDITS AS TAKEN FROM HIS WIFE AND BROTHER-IN-LAW WHO IN TURN HAVE DEPOSED THAT THEY HAVE TAKEN LOANS FROM OTHERS AND LENT MON EY TO THE ASSESSEE WE FEEL THE CREDITS HAVE BEEN PROPERLY EX PLAINED AND THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RI GHTLY DELETED THE ADDITION OF ` 8 00 000/- MADE TOWARDS UNEXPLAINED CASH CREDITS. THEREFORE WE UPHOLD THE ORDER OF THE ITA NO.1051/MDS//2010 7 COMMISSIONER OF INCOME TAX (APPEALS) AND REJECT THE GROUNDS OF THE REVENUE. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 25 TH DAY OF OCTOBER 2013 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY ) (CHALLA NAGENDRA PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 25 TH OCTOBER 2013. SOMU COPY TO: (1) APPELLANT (4 ) CIT(A) (2) RESPONDENT (5 ) D.R. (3) CIT (6 ) G.F.