ITO, CHENNAI v. Smt. C. Chellabai, CHENNAI

ITA 1937/CHNY/2008 | 2005-2006
Pronouncement Date: 27-07-2011 | Result: Dismissed

Appeal Details

RSA Number 193721714 RSA 2008
Assessee PAN ADQPC1508E
Bench Chennai
Appeal Number ITA 1937/CHNY/2008
Duration Of Justice 2 year(s) 10 month(s)
Appellant ITO, CHENNAI
Respondent Smt. C. Chellabai, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-07-2011
Date Of Final Hearing 27-07-2011
Next Hearing Date 27-07-2011
Assessment Year 2005-2006
Appeal Filed On 26-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH B : CHENNAI [BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER] I.T.A.NO.1937/MDS/2008 ASSESSMENT YEAR : 2005-06 THE INCOME-TAX OFFICER WARD X(3) CHENNAI VS SMT. C.CHELLABAI NO.106 KAMARAJAR NAGAR ERNOVOOR CHENNAI 600 057 [PAN - ADQPC1508E] (APPELLANT) (RESPONDENT) C.O.NO.40/MDS/2009 ASSESSMENT YEAR : 2005-06 SMT. C.CHELLA BAI NO.106 KAMARAJAR NAGAR ERNOVOOR CHENNAI 600 057 VS THE INCOME-TAX OFFICER WARD X(3) CHENNAI (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI P.B.SEKARAN CIT/DR ASSESSEE BY : SHRI S.SRIDHAR ADVOCATE O R D E R PER HARI OM MARATHA JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE AND THE CR OSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 16.7.2008 PERTAINING TO ASSESSMENT YEAR 2005-06. ITA 1937/08 & CO 40/09 :- 2 -: 2. THE ONLY ISSUE RAISED IN REVENUES APPEAL IS REGARDING DELETION OF AN ADDITION OF ` 11 57 500/- ON THE GROUND THAT OPENING CAPITAL SHOWN AS ON 1.4.2004 BY THE ASSESSEE COULD NOT BE EXPLAINED. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL TRADING IN STEEL AND SPARES. SHE FIL ED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 27.12.2005 ALONG REPORT OBTAINED U/S 44AB IN FORM NO.3CD ADMIT TING A TOTAL INCOME OF ` 1 03 666/-. FINAL ASSESSMENT WAS COMPLETED U/S 1 43(3) ON 28.12.2007 AT A TOTAL INCOME OF ` 12 61 368/-. THE ASSESSING OFFICER HAS MADE AN ADDITION OF ` 11 57 500/- AS UNEXPLAINED CREDIT. AGGRIEVED THE ASSESSEE PREFERRED FIRST APPEAL AND THE LD. CIT(A) HAS DELETED THE ENTIRE ADDITION BY OBSERVING THAT THE A SSESSEE HAD FILED A COPY OF CAPITAL ACCOUNT IN M/S KJP ENTERPRISES FOR THE PERIOD 1.4.2004 TO 31.3.2005 IN SUPPORT OF THE CONTENTION THAT THE IMPUGNED AMOUNT OF ` 11 57 500/- HAD COME BY WAY OF REINTRODUCTION OF C APITAL FROM FAMILY SAVINGS AND SMALL LOANS FROM RELATIVES. NOW THE REVENUE IS AGGRIEVED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E CAREFULLY PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. A FTER CAREFULLY COGITATING THE FACTS RELATING TO THIS ISSUE WE NOT ICE FROM THE BALANCE ITA 1937/08 & CO 40/09 :- 3 -: SHEET THAT THE ASSESSEE HAD INTRODUCED ` 11 57 500/- AS ADDITION TO THE CAPITAL. THE ASSESSING OFFICER SOUGHT THE SOUR CE OF THIS ADDITION AND ASSESSEES REPRESENTATIVE GAVE DETAILED LETTER DATED 3.12.2007. SUBSEQUENTLY THE ASSESSEE FILED ANOTHER LETTER DAT ED 23.12.2007 ON 26.12.2007. ACCORDING TO THIS LETTER IT WAS EXPLA INED THAT SHE WAS THE SOLE PROPRIETOR OF BUSINESS BY NAME M/S KJP ENTERPR ISES WHICH WAS DISCONTINUED AFTER 31.3.2000 AND RECOMMENCED IN 200 4-05. IT WAS STATED THAT THE BALANCE IN THE CAPITAL ACCOUNT AS O N 31.3.2000 WAS ` 7 02 332.65 AS PER THE INCOME TAX RETURN FILED FOR THAT YEAR. SHE INVESTED ` 7 29 000 IN M/S WELD FAB EQUIPMENTS AND DURING FIN ANCIAL YEAR 2003-04 THIS AMOUNT WAS REALIZED FROM M/S WELD FAB EQUIPMENTS AND WAS TREATED AS A DRAWING AND THEREAFTER THIS AM OUNT HAS BEEN BROUGHT BACK INTO THE BUSINESS BY REMITTING INTO BA NK ON ITS RECOMMENCEMENT AND HAS TAKEN AS CAPITAL INTRODUCED. REGARDING BALANCE IT WAS STATED THAT THE BALANCE OF ` 3 98 500/- HAS COME OUT OF FAMILY SAVINGS. IT WAS STATED THAT SHE AND HER HUS BAND ARE IN THIS BUSINESS FOR MORE THAN TWO DECADES AND THIS AMOUNT OF SAVING IS REASONABLE. REGARDING DRAWINGS DURING 2003-04 IT WAS STATED THAT HER HUSBAND WITHDREW ` 5.50 LAKHS BUT THE ASSESSING OFFICER WANTED DOCUMENTARY PROOF FOR EVERY CLAIM MADE BY HER. BEI NG NOT SATISFIED HE HAS TREATED THE ENTIRE AMOUNT AS UNEXPLAINED CRE DITS TO THE BOOKS ITA 1937/08 & CO 40/09 :- 4 -: OF THE ASSESSEE. AFTER HEARING BOTH SIDES WE HAV E FOUND THAT THE ASSESSEE HAS PRODUCED A COPY EACH OF BALANCE SHEET OF M/S KJP ENTERPRISES AS ON 31.3.2004 AND 31.3.2005. FROM TH EM IT IS NOTED THAT THE ASSESSEE HAS REINTRODUCED THIS AMOUNT AFTE R MAKING DRAWINGS FROM HER PROPRIETARY CONCERN M/S WELD FAB EQUIPMENT S. COPY OF STATEMENT OF AFFAIRS OF WELDFAB EQUIPMENTS IS ALSO ENCLOSED IN ASSESSEES PAPER BOOK. STATEMENT OF AFFAIRS AS ON 31.3.2004 IS ALSO ENCLOSED IN THE PAPER BOOK TO PROVE THE WITHDRAWAL OF CAPITAL FOR REINTRODUCTION IN M/S KJP ENTERPRISES. BOTH THE UN ITS BELONGED TO THE SAME PROPRIETOR AND DRAWINGS FROM ONE UNIT AND INTR ODUCTION IN THE OTHER IS ENOUGH PROOF OF SOURCE OF ADDITION TO THE CAPITAL IN M/S KJP ENTERPRISES. IT HAS BEEN MENTIONED IN THE ORDER OF THE LD. CIT(A) THAT THE FACT THAT THE OPENING CAPITAL OF ` 11 57 500/- AS ON 1.4.2004 STANDS FULLY SUPPORTED BY EVIDENCE ON RECORD WAS N OT DISPUTED BY THE REVENUE. THIS FACT WAS BROUGHT TO THE NOTICE OF TH E LD.DR WHO COULD NOT CONTROVERT THIS FINDING. MOREOVER THE ASSESSI NG OFFICER HAS NOT BROUGHT ON RECORD ANY MATERIAL EVIDENCE TO SUPPORT HIS CONCLUSION THAT THIS CAPITAL IS UNEXPLAINED. HENCE WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE LD. CIT(A) IN THIS REGARD. WE CONFI RM THE IMPUGNED DELETION AND CANNOT ALLOW THE APPEAL OF THE REVENUE . ITA 1937/08 & CO 40/09 :- 5 -: 5. THE CROSS OBJECTION FILED BY THE ASSESSEE IN SUPPO RT OF THE FINDING OF THE LD. CIT(A). CONSEQUENTLY BOTH AP PEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE STAND DISMI SSED. THE ORDER PRONOUNCED IN THE OPEN COURT O N 27.7.2011. SD/- SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 27 TH JULY 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR