Regal Tile Works, Kollam v. ACIT, Kollam

ITA 650/COCH/2010 | 1997-1998
Pronouncement Date: 11-11-2011

Appeal Details

RSA Number 65021914 RSA 2010
Assessee PAN AABFR1773L
Bench Cochin
Appeal Number ITA 650/COCH/2010
Duration Of Justice 11 month(s) 5 day(s)
Appellant Regal Tile Works, Kollam
Respondent ACIT, Kollam
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 11-11-2011
Assessment Year 1997-1998
Appeal Filed On 06-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORESHRI N.R.S. GANESAN JM I.T.A NO. 650 /COCH/2010 ASSESSMENT YEAR: 1997-98 REGAL TILE WORKS ADICHANALLOOR KOLLAM. [PAN:AABFR 1773L] VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1 KOLLAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI IVAN JOSEPH CA REVENUE BY MS. S. VIJAYAPRABHA JR. DR DATE OF HEARING 31/10/2011 DATE OF PRONOUNCEMENT 11/11/2011 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-I TRIVANDRUM DATED 5.10.2010 AND PERTAINS TO THE ASSE SSMENT YEAR 1997-98. 2. THE ONLY ISSUE ARISING FOR CONSIDERATION IS THE ADDITION OF ` 1 LAKH. SHRI IVAN JOSEPH THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 1 LAKH. THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS BORROWED GOLD LOAN FROM CANARA BANK. THE LD. REPRE SENTATIVE SUBMITTED THAT LOAN OBTAINED FROM THE CANARA BANK IN THE NAME OF SHRI S .R.VALSALA AND SHRI K. REGHUNATHAN WAS DEPOSITED IN THE ASSESSEE-FIRM WHICH WAS CONFIR MED BY THE BANK. THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS ALS O FILED CONFIRMATION LETTER FROM SHRI K.REGHUNATHAN. THE LD. REPRESENTATIVE SUBMITTED TH AT THE ADDITION UNDER SECTION 68 CAN BE MADE ON THE BASIS OF ENTRIES IN THE BOOKS OF ACC OUNTS. IN THIS CASE THE ADDITION WAS I.T.A. NO.650 /COCH/2010 2 NOT MADE ON THE BASIS OF THE ENTRIES FOUND IN THE BOOKS OF ACCOUNTS. THE LD. REPRESENTATIVE SUBMITTED THAT NO ADDITION WOULD BE MADE UNDER SECTION 68 OF THE INCOME TAX ACT ON THE BASIS OF REPAYMENT OF LOAN. THEREFO RE THE ADDITION MADE BY THE LOWER AUTHORITIES IS NOT JUSTIFIED. THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THIS TRIBUNAL IN THE CASE OF V. PRABHAKARAN VS. ACIT IN I.T.A. NO. 345/COCH/2005 DATED 23.5.2006 (COPY ON RECORD) AND SUBMITTED THAT THE ADDITION MADE IN THE HANDS OF THE INDIVIDUAL PARTNER WAS SET AIDE BY THIS TRIBUNAL BY ALLOWING THE APPEA L OF THE PARTNER. 2. ON THE CONTRARY MS. VIJAYAPRABHA THE LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT THE PARTNER SHRI V.PRABHAKARAN INTRODUCED CAPI TAL AFTER AVAILING GOLD LOAN FROM THE CANARA BANK. THE LD. DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THE LOAN WAS APPARENTLY REPAID ON 29.7.1999 AND THERE WAS NO ENT RY FOR THE WITHDRAWAL. WHEN THE CREDITS ARE APPEARING IN THE BOOKS OF ACCOUNTS OF T HE ASSESSEE-FIRM THE PROOF OF REPAYMENT OF THE GOLD LOAN SHOULD FIND ENTRY IN THE BOOKS OF ACCOUNTS. IN THE ABSENCE OF ANY MATERIAL TO PROVE THE REPAYMENT OF THE LOAN TH E ASSESSING OFFICER DOUBTED THE CREDIT ITSELF AND ACCORDINGLY THE SAME WAS ADDED TO THE I NCOME OF THE ASSESSEE. REFERRING TO THE ORDER OF THIS TRIBUNAL IN THE CASE OF THE PARTN ER SHRI V. PRABHAKARAN THE LD. REPRESENTATIVE SUBMITTED THAT THIS TRIBUNAL SET ASI DE THE ORDER OF THE LOWER AUTHORITIES ON THE GROUND THAT THE ADDITION SHOULD BE MADE IN THE HANDS OF THE FIRM AND NOT IN THE HANDS OF THE PARTNER. THEREFORE AS OBSERVED BY THE TRIBU NAL THE ADDITION WAS MADE IN THE HANDS OF THE PARTNER. 3. RIVAL CONTENTIONS WERE CONSIDERED IN THE LIGHT O F THE MATERIAL AVAILABLE ON RECORD. ORIGINALLY THE ASSESSING OFFICER MADE THE ADDITION IN THE HANDS OF THE PARTNER SHRI V.PRABHAKARAN. THIS TRIBUNAL FOUND THAT SINCE THE CREDIT ENTRY WAS FOUND IN THE BOOKS OF ACCOUNTS OF THE FIRM THE ADDITION HAS TO BE MADE I N THE HANDS OF THE FIRM AND NOT IN THE HANDS OF THE INDIVIDUAL PARTNER UNDER SECTION 68 OF THE INCOME TAX ACT . SECTION 68 OF THE ACT CLEARLY SAYS THAT THE ADDITION HAS TO BE MADE O N THE BASIS OF THE CREDIT ENTRY FOUND PROVIDED THE ASSESSEE HAS NOT OFFERED SATISFACTORY EXPLANATION. SINCE THE ENTRY WAS FOUND IN THE BOOKS OF THE ACCOUNTS OF THE FIRM THE TRIBU NAL FOUND THAT NO ADDITION IN THE HANDS I.T.A. NO.650 /COCH/2010 3 OF THE PARTNER IS TO BE MADE. THE TRIBUNAL HAS NOT EXAMINED THE SOURCE OF THE ENTRY FOUND IN THE CURRENT ACCOUNT OF SHRIV. PRABHAKARAN A PAR TNER OF THE FIRM M/S. REGAL TILE WORKS. THE ASSESSEE NOW CLAIMS THAT THE LOAN BORRO WED FROM THE CANARA BANK WAS USED FOR DEPOSITING IN THE CURRENT ACCOUNT OF THE PARTNE R. THIS EXPLANATION OF THE ASSESSEE WAS REJECTED BY THE LOWER AUTHORITIES ON THE GROUND THA T EVEN THOUGH THE LOAN WAS REPAID ON 29.7.1999 THERE WAS NO WITHDRAWAL FROM THE BANK AC COUNT. THEREFORE THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE CRE DIT LOAN SAID TO BE OBTAINED BY THE PARTNER SHRI V.PRABHAKARAN IN THE NAME OF SMT. S.R. VALSALA & SHRI K.REGHUNATHAN. FROM THE MATERIAL ON RECORD IT APPEARS THAT SMT. S.R.VALSAL A AND SHRI K.REGHUNTHAN OBTAINED GOLD LOAN FROM THE CANARA BANK. ADMITTEDLY THE ASSESSEE HAS NOT OBTAINED ANY GOLD LOAN. THE CREDIT ENTRY WAS FOUND IN THE CURRENT ACCOUNT OF S HRI V. PRABHAKARAN AND LOAN WAS OBTAINED BY SMT. S.R. VALSALA AND SHRI REGHUNATHAN. THEREFORE IT IS FOR THE ASSESSEE TO ESTABLISH AS TO HOW THE LOAN BORROWED BY SMT. S. R. VALSALA AND SHRI REGHUNATHAN WAS USED FOR DEPOSITING THE SAME IN THE CURRENT ACCOUNT OF SHRI V.PRABHAKARAN. IN THE ABSENCE OF ANY MATERIAL RELATING TO THE LOAN BORROW ED BY SMT. S. VALSALA AND SHRI REGHUNATHAN.AND DEPOSITED IN THE CURRENT ACCOUNT OF SHRI V.PRABHAKARAN THIS TRIBUNAL IS OF THE OPINION THAT THERE IS NO INFIRMITY IN THE OR DER OF THE LOWER AUTHORITIES AND ACCORDINGLY THE SAME IS CONFIRMED. IN THE RESULT THE ASSESSEES APPEAL IS DISMISSED. SD/- (N.R.S.GANESAN) JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 11TH NOVEMBER 2011 GJ COPY TO: 1. REGAL TILE WORKS ADICHANALLOOR KOLLAM. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1 KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIV ANDRUM I.T.A. NO.650 /COCH/2010 4 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE .