ITO, Coimbatore v. Shri P.Kathiresan, Coimbatore

ITA 190/CHNY/2011 | 2007-2008
Pronouncement Date: 22-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 19021714 RSA 2011
Assessee PAN AIUPK3718K
Bench Chennai
Appeal Number ITA 190/CHNY/2011
Duration Of Justice 5 month(s) 13 day(s)
Appellant ITO, Coimbatore
Respondent Shri P.Kathiresan, Coimbatore
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 22-07-2011
Date Of Final Hearing 19-07-2011
Next Hearing Date 19-07-2011
Assessment Year 2007-2008
Appeal Filed On 08-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI N.S. SAINI AM AND SHRI GEORGE MATHAN J.M. .. I.T.A. NO. 190/MDS/2011 [ASSESSMENT YEAR 2007-08] INCOME-TAX OFFICER WARD II(1) COIMBATORE VS. SHRI P. KATHIRESAN 966A SATHY ROAD GANDHIPURAM COIMBATORE 641 012. PAN NO. AIUPK 3718 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T. BANUSEKAR DEPARTMENT BY : SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL O R D E R PER N.S. SAINI A.M :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A)- I COIMBATORE DATED 16.11.201 0 FOR ASSESSMENT YEAR 2007-08. PAGE 2 OF 7 I.T.A. NO. 190/MDS/2011 2. SOLE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE LD. CIT(A) FAILED TO CONSIDER THAT THE ASSESSEE DID NOT CO-OPERATE WITH THE ASSESSMENT PROCEEDINGS AT ANY STAGE AND REFUSED TO ACCEPT THE NOTICES AS EVIDENCES BY THE REMARKS OF THE POSTAL A UTHORITIES FILED RETURN SHOWING INCOME ON ESTIMATE BASIS ONLY PREPA RED THE ACCOUNT SUBSEQUENTLY AND SUBMITTED THEM. THE LD. CIT(A) WA S NOT JUSTIFIED IN CONSIDERING THE DIFFERENCE IN THE FIGURES OF NET PROFIT AND GROSS TURNOVER REFLECTED IN THE RETURNS FILED AND THE BOO KS SUBMITTED BEFORE HIM AND HOLDING THAT THE ASSESSEE HAS REDEPO SITED THE AMOUNT IN THE BANK AFTER WITHDRAWING IT WITHOUT ANY CONVINCING AND SUPPORTING EVIDENCE. 3. IN APPEAL THE LD. CIT(A) OBSERVED AS UNDER: 4. THE MAIN ISSUE IN THIS APPEAL IS REGARDING THE AD DITION OF RS. 13 17 955/- ON ACCOUNT OF CASH DEPOSITS BY THE ASSESSEE IN HIS BANK ACCOUNT. THE ASSESSMENT WAS C OMPLETED U/S 144 OF THE I.T. ACT. THE HEARING NOTICES WENT B Y THE ASSESSING OFFICER WERE RETURNED BY POSTAL AUTHORITIES WITH THE REMARK NOT CLAIMED. THE APPELLANT FILED AN A FFIDAVIT ALONG WITH DOCTORS CERTIFICATE FOR THE TREATMENT O F HIS WIFE PAGE 3 OF 7 I.T.A. NO. 190/MDS/2011 AND HIMSELF. AS SEEN FROM THESE DETAILS HIS WIFE S HEALTH WAS AFFECTED FROM 9.12.2008 TO 30.11.2009 AND ALSO THE APPELLANT WAS UNDER TREATMENT FOR VIRAL FEVER BECAUSE OF WHICH HE COULD NOT ATTEND THE HEARINGS. THE APPELLA NT FILED DETAILS OF THE SAVINGS BANK ACCOUNT OF AXIS BANK SATHYAMANGALAM. THE APPELLANT FILED DETAILS OF TRA NSACTIONS FROM 31.7.2006 TO 31.3.2007. THE APPELLANT ALSO HA D OBTAINED A SUM OF RS. 1 50 500/- AS GOLD LOANS FROM AXIS BANK LIMITED SATHYAMANGALAM BRANCH. THE APPELLANT HAS ALSO FILED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET ALONG WITH TRIAL BALANCE. THE DETAILS FURNISHED BY THE AP PELLANT WERE FORWARDED TO THE ITO WARD II (1) COIMBATORE CALLING FOR REPORT U/R 46A BY MY PREDECESSOR. 5. THE ASSESSING OFFICER IN HIS REPORT DATED 28.7. 2010 AFTER EXAMINING THE STATEMENT OF CASH DEPOSITS AND WITHDRAWALS ALONGWITH THE BANK ACCOUNT STATEMENT CON CLUDED THAT BANK STATEMENT ALONE IS NOT AN EVIDENCE TO BUY THE ARGUMENT OF THE APPELLANT THAT THE CASH WITHDRAWN WA S REDEPOSITED INTO THE SAVINGS BANK ACCOUNT. THE ADDI TION WAS MADE BY THE ASSESSING OFFICER ONLY ON ACCOUNT OF CAS H DEPOSITS INTO THE BANK. THE ASSESSING OFFICER SHOUL D HAVE EXAMINED THE STATEMENT OF CASH DEPOSITS AND WITHDRA WALS ALONG WITH THE BANK STATEMENT. ACCORDING TO THE AS SESSING OFFICER THE APPELLANT ADMITTED GROSS RECEIPTS OF R S. 9 14 665/- IN THE RETURN. HOWEVER AS PER ACCOUNTS F URNISHED PAGE 4 OF 7 I.T.A. NO. 190/MDS/2011 BEFORE THE LD. CIT(A) THE GROSS RECEIPTS ARE RS. 5 38 609/-. THE TAXABLE INCOME RETURNED BY THE APPELLANT IN THE RETURN FILED WAS RS. 1 30 960/-. HOWEVER IN THE PROFIT AND LOSS ACCOUNT FILED BEFORE THE UNDERSIGNED THE NET PROFIT IS RS. 1 39 700/-. WHEN ASKED ABOUT THE DISCREPANCY THE L D. A.R. SUBMITTED THAT THE RETURN OF INCOME WAS FILED ONLY ON ESTIMATED BASIS AND NOT ON THE BASIS OF BOOKS OF AC COUNT. IT IS TO BE NOTED THAT PROPER BOOKS OF ACCOUNT WERE NOT MAINTAINED BY THE APPELLANT. HOWEVER THERE IS NO SIGNIFICANT DIFFERENCE IN THE NET PROFIT OFFERED TO TAX. AN EXAMINATION OF THE STATEMENT OF CASH DEPOSITS AND WITHDRAWALS FROM AXIS BANK SATHYAMANGLAM SHOWS THA T THE SUM OF RS. 13 17 955/- WAS DEPOSITED DURING THE F.Y. 2006-07 AND ALSO AN AMOUNT OF RS. 15 24 750/- WAS WITHDRAWN FROM THE SAME BANK DURING THE F.Y. 2006-07. A CRITICAL EX AMINATION OF BANK ACCOUNT SHOWS THAT THE AMOUNTS DEPOSITED WERE WITHDRAWN WITHIN FEW DAYS SUBSEQUENTLY AND REDEPOSITE D INTO THE BANK ACCOUNT. THE LD. A.R. SUBMITTED THAT TO INC REASE BANK LIMIT AND TO SHOW TO BANK AUTHORITIES THE INCRE ASED TURNOVER THE APPELLANT UNDER MISGUIDANCE RESORTED TO THIS PRACTICE. THE GOLD LOAN OF RS. 1 50 500/- IS THE REASON FOR MORE WITHDRAWAL FROM THE AXIS BANK AS SUBMITTED BY T HE LD. A.R. IN VIEW OF THE ABOVE DISCUSSION I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 13 17 955/-. PAGE 5 OF 7 I.T.A. NO. 190/MDS/2011 4. THE LD. D.R. SUPPORTED THE ORDER OF THE ASSESSIN G OFFICER WHEREAS THE LD. A.R. RELIED ON THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESSING OFFICER FOUND THAT THER E WAS A CASH DEPOSIT OF RS. 13 17 955/- IN THE SAVINGS BANK ACC OUNT MAINTAINED BY THE ASSESSEE WITH AXIS BANK AND THERE WAS ALSO WI THDRAWAL OF RS. 15 24 750/- FROM THE SAID BANK ACCOUNT DURING THE Y EAR UNDER CONSIDERATION. BEFORE THE ASSESSING OFFICER ASSES SEE EXPLAINED THAT DEPOSITS IN THE BANK ACCOUNT WERE MADE OUT OF WITHD RAWALS FROM THE SAME BANK ACCOUNT AND THE ABOVE TRANSACTIONS WE RE DONE TO SHOW MORE TURNOVER TO THE BANK TO OBTAIN HIGHER BAN K LOAN. HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT THE E XPLANATION OF THE ASSESSEE AND ADDED THE ENTIRE DEPOSIT AMOUNT OF RS. 13 17 955/- TO THE INCOME OF THE ASSESSEE. ON APPE AL THE LD. CIT(A) DELETED THE ABOVE ADDITION IN ITS ENTIRETY. BEFORE US THE LD. D.R. RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND THE LD. A.R. SUPPORTED THE ORDER OF THE LD. CIT(A). WE FIND THA T IN THE INSTANT CASE NO MATERIAL WAS BROUGHT ON RECORD BY THE REVE NUE TO REJECT PAGE 6 OF 7 I.T.A. NO. 190/MDS/2011 THE EXPLANATION OF THE ASSESSEE. WE FIND THAT RS. 13 17 955/- WAS DEPOSIT IN THE BANK ON VARIOUS DATES AND BEFORE DEP OSIT THERE WAS WITHDRAWAL FROM THE VERY SAME BANK ACCOUNT. NO MAT ERIAL COULD BE BROUGHT BEFORE US TO SHOW THAT THE WITHDRAWALS WERE UTILIZED SOMEWHERE ELSE OR ANY OTHER REASON FOR SUCH WITHDRA WAL COULD NOT HAVE BEEN THE SOURCE OF SUBSEQUENT DEPOSIT IN THE B ANK ACCOUNT. WE ALSO OBSERVE THAT THE PEAK DEPOSIT IN THE BANK A CCOUNT WAS RS. 1 20 580/- ONLY WHEREAS THE INCOME OF THE YEAR DECL ARED BY ASSESSEE IN THE RETURN OF INCOME WAS RS. 1 30 960/ -. WE THEREFORE DO NOT FIND ANY JUSTIFICATION IN ADDING THE ENTIRE AMOUNT OF DEPOSIT OF RS. 13 17 955/- TO THE INCOME OF THE ASSESSEE. HOWEVER WE FIND THAT THE ASSESSEE DURING THE COURS E OF ASSESSMENT HEARING BEFORE THE ASSESSING OFFICER ADMITTED HIS I NCOME FOR THE ASSESSMENT YEAR AT RS. 1 39 700/- IN PLACE OF INCO ME DISCLOSED IN THE RETURN OF INCOME AT RS. 1 30 916/-. THUS THE ADDITION TO THE EXTENT OF RS. 8740/- MERITS TO BE SUSTAINED. WE THEREFORE MODIFY THE ORDER OF THE LD. CIT(A) AND RESTORE THE ADDITIO N TO THE EXTENT OF RS. 8 740/- AND CONFIRM THE DELETION OF THE BALANC E AMOUNT. THUS THE APPEAL OF THE REVENUE IS PARTLY ALLOWED AS ABOV E. PAGE 7 OF 7 I.T.A. NO. 190/MDS/2011 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED. ORDER PRONOUNCED ON 22 ND JULY 2011. SD/- SD/- ((GEORGE MATHAN ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 22 ND JULY 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE