K.Malathy,, Kumbakonam v. ACIT,, Trichy

ITA 798/CHNY/2012 | 2006-2007
Pronouncement Date: 12-11-2014

Appeal Details

RSA Number 79821714 RSA 2012
Assessee PAN AFEPK0507P
Bench Chennai
Appeal Number ITA 798/CHNY/2012
Duration Of Justice 2 year(s) 7 month(s)
Appellant K.Malathy,, Kumbakonam
Respondent ACIT,, Trichy
Appeal Type Income Tax Appeal
Pronouncement Date 12-11-2014
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 12-11-2014
Date Of Final Hearing 11-09-2014
Next Hearing Date 11-09-2014
Assessment Year 2006-2007
Appeal Filed On 12-04-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHE NNAI . . . !' # $! % BEFORE DR. O.K. NARAYANAN VICE PRESIDENT & SHRI VIKAS AWASTHY JUDICIAL MEMBER . I.T.A. NO. ASSESSMENT YEAR '& APPELLANT '('& RESPONDENT 798/MDS/2012 2006-07 SMT. K.MALATHY 17 KGK STREET KUMBAKONAM [PAN: AFEPK 0507 P] ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-I 44 WILLIAMS ROAD TRICHY-620 001 1041/MDS/2012 2006-07 ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-I TIRUCHIRAPALLI SHRI S.KULANDAISAMY 17 KGK STREET KUMBAKONAM [PAN: AEEPK 7149 E] REVENUE BY : MR. C.V.PANAVA KUMAR JCIT ASSESSEE BY : MR. S.SRIDHAR ADVOCATE / DATE OF HEARING : 11-09-2014 / DATE OF PRONOUNCEMENT : 12-11-2014 $) / O R D E R PER VIKAS AWASTHY J.M: ITA NO.798/MDS/2012 HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) TIRUCHIRAPALLI DATED 10-01-2012 FOR THE ASSESSMENT YEAR (AY) 2006-07. THE ONLY ISSUE RAISED BY LD.COUNSEL FOR T HE ASSESSEE IN THE APPEAL IS WITH REGARD TO ADDITION OF ` 4 02 000/- U/S.68 OF THE INCOME TAX ACT 1961 (HEREIN AFTER REFERRED TO AS THE ACT). ITA. NOS. 798 & 1041/MDS/12 2 ITA NO.1041/MDS/2012 HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) TIRUCHIRAPALLI DT.24-02-2012 FOR THE AY.2006-07. T HE REVENUE HAS IMPUGNED THE ORDER OF CIT(APPEALS) IN DELETING THE ADDITION OF ` 12 50 000/- MADE U/S.68 OF THE ACT. THE ASSESSEES IN ITA NO.798/2012 AND ITA NO.1041/20 12 ARE RELATED (WIFE AND HUSBAND). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS IN ITA NO.798/MDS/2012 ARE: THE ASSESSEES IS ENGAGED IN THE BUSINESS OF MONEY L ENDING. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE AY.2006 -07 ON 26-10-2006 DECLARING TOTAL INCOME OF ` 2 96 235/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.1 43(2) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 06-07-2007. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS IT TRANSPIRED THAT THE ASSE SSEE IS NOT MAINTAINING BOOKS OF ACCOUNT. IN THE RETURN OF INC OME THE ASSESSEE HAD NOT DISCLOSED HER BANK ACCOUNT MAINTAI NED WITH STATE BANK OF INDIA [SBI] AND JOINT SB A/C WITH HER HUSBAND IN ING VYSYA BANK LIMITED GANDHI PARK KUMBAKONAM. THE A SSESSING OFFICER VIDE ORDER DT.31-12-2008 MADE ADDITION OF ` 60 000/- ON ITA. NOS. 798 & 1041/MDS/12 3 ESTIMATION BASIS FROM MONEY LENDING BUSINESS ` 4 02 000/- ON PEAK CREDIT FROM ASSESSEES INDIVIDUAL UN-DISCLOSED BANK ACCOUNT MAINTAINED WITH SBI AND ` 12 50 000/- ON PROTECTIVE BASIS IN RESPECT OF JOINT BANK ACCOUNT MAINTAINED WITH HER H USBAND IN ING VYSYA BANK. AGGRIEVED BY THE ASSESSMENT ORDER DT.31-12-2008 T HE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS). TH E ASSESSEE FILED CASH FLOW STATEMENT BEFORE CIT(APPEALS). THE CIT(APPEALS) SOUGHT REMAND REPORT FROM ASSESSING OF FICER TO VERIFY THE CORRECTNESS OF THE CASH FLOW STATEMENT F ILED BY THE ASSESSEE. THE ASSESSING OFFICER VIDE REPORT DT.31- 12-2011 CONFIRMED THAT THE CASH FLOW STATEMENT HAS BEEN FIL ED ALONG WITH RETURN OF INCOME AND THE SAME HAS BEEN VERIFIED AND IS FOUND TO BE IN ORDER. ON THE BASIS OF REMAND REPORT THE CI T(APPEALS) DELETED ADDITION OF ` 12 50 000/- ON ACCOUNT OF PROTECTIVE ADDITION IN RESPECT OF JOINT BANK ACCOUNT WITH HER HUSBAND. THE CIT(APPEALS) FURTHER DELETED THE ADDITION OF ` 60 000/- MADE ON ESTIMATION BASIS ON THE GROUND THAT MERE FACT THAT BOOKS OF ACCOUNTS ARE NOT PROPERLY MAINTAINED CANNOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS NOT DISCLOSED ENTI RE INCOME. HOWEVER ADDITION OF ` 4 02 000/- U/S.68 OF THE ACT WAS SUSTAINED. ITA. NOS. 798 & 1041/MDS/12 4 AGAINST THE ORDER OF CIT(APPEALS) THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI S.SRIDHAR APPEARING ON BEHALF OF THE ASSES SEE SUBMITTED THAT THE ASSESSEE HAD FILED CASH FLOW STA TEMENT BEFORE THE CIT(APPEALS). THE REMAND REPORT WAS SOUGHT: T HE ASSESSING OFFICER AFTER VERIFYING CASH FLOW STATEMENT FOUND T HE SAME TO BE IN ORDER. THE CIT(APPEALS) HAS ERRED IN NOT CONSID ERING THE FACT THAT IN CASH FLOW STATEMENT TRANSACTIONS WITH RESP ECT TO BOTH THE BANK ACCOUNTS WERE REFLECTED. THE FIRST APPELLATE AUTHORITY ERRED IN RESTRICTING THE OBSERVATIONS MADE IN REMAND REPO RT TO THE JOINT BANK ACCOUNT ONLY. 4. ON THE OTHER HAND SHRI C.V.PAVANA KUMAR APPEAR ING ON BEHALF OF THE REVENUE SUBMITTED THAT THE ASSESSEE H AD NOT MAINTAINED ANY BOOKS OF ACCOUNT. THE AMOUNT OF ` 4 02 000/- HAS BEEN RIGHTLY SUSTAINED BY CIT(APPEALS). THE ADDITI ON HAS BEEN MADE ON THE BASIS OF PEAK CREDIT. THE BANK TRANSAC TIONS ARE NOT REFLECTED IN THE CASH FLOW STATEMENT. 5. IN ITA NO.1041/MDS/2012 THE ASSESSEE IS THE HUS BAND OF SMT.K.MALATHY. HE IS ALSO IN THE BUSINESS OF MONEY LENDING. THE ITA. NOS. 798 & 1041/MDS/12 5 ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY.2006 -07 ON 26-10- 2006 ADMITTING TOTAL INCOME OF ` 3 12 586/-. THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY ASSESSMENT MADE CERTA IN ADDITIONS/DIS-ALLOWANCE IN THE RETURN FILED BY THE ASSESSEE INCLUDING ADDITION OF ` 12 50 000/- ON ACCOUNT OF UN-EXPLAINED CASH CREDIT U/S.68 OF THE ACT. THE ASSESSEE WAS MAINTAI NING SAVINGS BANK ACCOUNT JOINTLY WITH HIS WIFE SMT.K.MALATHY IN ING VYSYA BANK LTD. THE SAID BANK ACCOUNT WAS NOT DISCLOSED BY THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DT.31-12-2008 T HE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS). TH E CIT(APPEALS) VIDE IMPUGNED ORDER PARTLY ACCEPTED THE APPEAL. HO WEVER THE CIT(APPEALS) DELETED THE ADDITION OF ` 12 50 000/- IN RESPECT OF AFOREMENTIONED UN-DISCLOSED JOINT BANK ACCOUNT ON T HE BASIS OF REMAND REPORT. IN REMAND REPORT THE ASSESSING OFFI CER HAD APPROVED THE AUTHENTICITY OF CASH FLOW STATEMENT FI LED BY THE ASSESSEE. AGAINST THE FINDINGS OF CIT(APPEALS) TH E DEPARTMENT HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. 6. THE LD.DR SUBMITTED THAT THE CIT(APPEALS) HAS FA ILED TO NOTE THAT THE ASSESSEE HAD NOT GIVEN THE DETAILS OF BANK ACCOUNTS AND THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDIT ION OF ITA. NOS. 798 & 1041/MDS/12 6 ` 12 50 000/- AS UN-EXPLAINED CASH CREDIT U/S.68. PR OTECTIVE ADDITION IN THE HANDS OF WIFE WAS DELETED BY THE CI T(APPEALS). THE LD.DR PRAYED FOR SUSTAINING THE ADDITION MADE B Y ASSESSING OFFICER IN THE HANDS OF ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE VEHEMENTLY SUPPORT ED THE FINDINGS OF CIT(APPEALS) AND PRAYED FOR DISMISSING THE OF APPEAL OF REVENUE. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN ITA NO.798/MDS/2012 THE ASSESSEE HAS IMPUGNED THE ADDITION OF ` 4 02 000/- MADE U/S.68 OF THE ACT. DURING THE COURSE OF PROCEEDINGS BEFORE FIRST APPEL LATE AUTHORITY THE ASSESSEE FILED CASH FLOW STATEMENT ON WHICH TH E CIT(APPEALS) SOUGHT REMAND REPORT FROM THE ASSESSIN G OFFICER. THE ASSESSING OFFICER IN REMAND REPORT CONFIRMED TH AT THE CASH FLOW STATEMENT FILED ALONG WITH RETURN OF INCOME HA S BEEN VERIFIED AND THE SAME IS IN ORDER. ON THE BASIS OF REMAND R EPORT THE CIT(APPEALS) DELETED THE ADDITION OF ` 12 50 000/- IN RESPECT OF JOINT BANK ACCOUNT MAINTAINED BY ASSESSEE ALONG WIT H HER HUSBAND SHRI SUBRAMANIAM KULANDAISAMY IN ING VYSYA BANK. HOWEVER ADDITION WITH RESPECT TO SAVINGS BANK ACCO UNT IN HER ITA. NOS. 798 & 1041/MDS/12 7 INDIVIDUAL NAME AT SBI WAS SUSTAINED. ONCE THE CAS H FLOW STATEMENT IS FOUND TO BE IN ORDER AND THERE HAS BEE N NO QUALIFICATION IN THE REMAND REPORT WITH REGARD TO S AVINGS BANK ACCOUNT IN THE INDIVIDUAL NAME OF THE ASSESSEE THE ADDITION CANNOT BE SUSTAINED. NO VALID REASON HAS BEEN GIVE N BY THE CIT(APPEALS) IN CONFIRMING THE ADDITION. ACCORDING LY THE ADDITION OF ` 4 02 000/- U/S.68 OF THE ACT ON THE BASIS OF PEAK CREDIT MAINTAINED WITH SBI IS DELETED. THE APPEAL OF THE ASSESSEE IS ALLOWED ACCORDINGLY . 8. IN ITA NO.1041/MDS/2012 REVENUE HAS ASSAILED TH E FINDINGS OF CIT(APPEALS) IN DELETING ADDITION OF ` 12 50 000/- U/S.68 OF THE ACT. THE CIT(APPEALS) BEFORE DELETING THE A DDITION HAS SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER IN REMAND REPORT HAS APPROVED THE AUTHENTIC ITY OF CASH FLOW STATEMENT FILED ALONG WITH THE RETURN OF INCOM E FOR THE AY.2006-07. ONCE THE ASSESSING OFFICER HAS CHECKED THE VERACITY OF TRANSACTIONS THERE IS NO QUESTION OF CONFIRMING ADDITION. THE CIT(APPEALS) HAS GIVEN FINDING THAT ESTIMATION OF P EAK CREDIT IN THE ING VYSYA BANK IS NOT BASED ON ANY MATERIAL FACTS. THE REVENUE HAS NOT BEEN ABLE TO REFUTE THE FINDINGS OF CIT(APP EALS). WE DO ITA. NOS. 798 & 1041/MDS/12 8 NOT FIND ANY MERIT IN THE APPEAL OF REVENUE. ACCOR DINGLY THE SAME IS DISMISSED. 9. IN RESULT THE APPEAL OF ASSESSEE IN ITA NO.798/ MDS/2012 IS ALLOWED AND THE APPEAL OF REVENUE IN ITA NO.1041/MD S/2012 IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY THE 12 TH NOVEMBER 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( !' ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT !' / JUDICIAL MEMBER #$ /CHENNAI %! /DATED: 12 TH NOVEMBER 2014 TNMM !$& ' () *$) /COPY TO: 1. + /APPELLANT 2. '-+ /RESPONDENT 3. . () /CIT(A) 4. . /CIT 5. )12 ' 3 /DR 6. 24 5 /GF