DCIT, CHENNAI v. P.Mohanraj, CHENNAI

ITA 864/CHNY/2016 | 2008-2009
Pronouncement Date: 07-10-2016

Appeal Details

RSA Number 86421714 RSA 2016
Assessee PAN AANPM0999H
Bench Chennai
Appeal Number ITA 864/CHNY/2016
Duration Of Justice 6 month(s) 2 day(s)
Appellant DCIT, CHENNAI
Respondent P.Mohanraj, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2016
Appeal Filed By Department
Bench Allotted B
Date Of Final Hearing 21-07-2016
Next Hearing Date 21-07-2016
Assessment Year 2008-2009
Appeal Filed On 04-04-2016
Judgment Text
IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH CHENNAI . . BEFORE SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY JUDICIAL MEMBER ./ I T.A. NO. 86 4 /MDS/201 6 / ASSESSMENT YEAR :20 08 - 09 THE DEPUTY COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 1 ( 1 ) CHENNAI 600 034 . VS. SHRI P. MOHANRAJ 501 VANDALUR KELAMBAKKAM MAIN ROAD MAMBAKKA M CHENNAI 60 0 127 . [PAN:AA NPM0999H ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI SUPRIYO PAL JCIT / RESPONDENT BY : SHRI S. SRIDHAR ADVOCATE / DATE OF HEARI NG : 2 1 . 0 7 .201 6 / DATE OF P RONOUNCEMENT : 07 . 1 0 .201 6 / O R D E R PER DUVVURU RL REDDY JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) 1 CHE NNAI DATED 30 . 1 2 .201 5 RELEVANT TO THE ASSESSMENT YEAR 20 08 - 09 . THE REVENUE HAS RAISED FOLLOWING TWO GROUNDS: 1. THE ORDER OF THE LEARNED C I T(A) IS CONTRARY TO LAW FACTS AND CIRCUMSTANCES OF THE CASE. I.T.A. NO . 86 4 /M/ 16 2 2.1 THE LEARNED CIT(A) ERRED IN DELETING THE ADD ITION MADE BY THE ASSESSING OFFICER TOWARDS DIFFERENCE OF AMOUNT IN FORM NO.26AS WITH P&L ACCOUNT. 2.2 THE LEARNED CIT(A) FAILED TO GIVE AN OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE RECONCILIATION STATEMENT BETWEEN 26AS AND P&L ACCOUNT SUBMITTE D BY THE ASSESSEE BEFORE HIM WHICH WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER THEREBY VIOLATING RULE 46A OF THE I.T. RULES. 2.3 THE LEARNED C I T(A) OUGHT TO HAVE REMANDED THE CASE BEFORE THE ASSESSING OFFICER FOR VERIFICATION. 3.1 THE LEARNED C I T (A) ERRED IN DELETING THE DISALLOWANCE MADE U/S.2(22)( E) OF THE I.T. ACT TO THE TUNE OF RS.2 05 95 569/ - . 3.2 THE LEARNED C I T(A) FAILED TO CONSIDER THE FACT THAT THE ADVANCES WERE MADE NEITHER FOR BUSINESS PURPOSES NOR FOR WORKING CAPITAL. ALL THESE AD VANCES HAVE TO BE CONSIDERED AS LOAN AND THE PROVISION OF SECTION 2(22)( E) IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. 3.3 THE LEARNED C I T(A) FAILED TO NOTE THAT THE INVOICES AND LEDGER EXTRACT IN SUPPORT OF THE ASSESSEE'S CLAIM WERE SUBMITTED ONLY AT THE TIME OF APPELLATE STAGE AND HAVE NOT BEEN SUBMITTED BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT STAGE. 3.4 THE LEARNED C I T(A) FAILED TO GIVE AN OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE INVOICES AND LEDGER EXTRACT SUBMITT ED BY THE ASSESSEE BEFORE HIM WHICH WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER THEREBY VIOLATING RULE 46A OF THE I.T. RULES. THE LEARNED CT(A) OUGHT TO HAVE REMANDED THE CASE BEFORE THE ASSESSING OFFICER FOR VERIFICATION. 4.1 THE LEARNED C I T(A) ERRE D IN DELETING THE DISALLOWANCE MADE U/ S .10( 14) (I) TO THE TUNE OF RS.7 50 000/ - STATING THAT THE UNIFORM ALLOWANCE REIMBURSEMENT OF REFRESHMENTS HELPER ALLOWANCE AND REIMBURSEMENT OF BOOKS AND PERIODICALS WERE WHOLLY AND EXCLUSIVELY INCURRED IN PERFORMA NCE OF HIS DUTIES AS THE MANAGING DIRECTOR. 4.2 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT OF THE CLAIM BEFORE THE ASSESSING OFFICER. I.T.A. NO . 86 4 /M/ 16 3 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADD UCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT( A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE DIRECTOR OF M/S. DIAMOND ENGINEERING CHENNAI P. LTD. AND ENGAGED IN THE BUSINESS OF ENGINEERING AND FABRICATION. HE FILED HIS RETURN OF INCOME ON 29.09.2008 DECLARING TOTAL INCOME AT .2 29 49 539/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT 1961 [ ACT IN SHORT] . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 31.12.2010 WITH THE ASSESSED INCOME OF .2 66 24 870/ - . THEREAFTER NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ON 01 .10.2012. IN RESPONSE THERETO THE ASSESSEE FILED ALL DETAILS AS CALLED FOR. AFTER CONSIDERING THE SUBMISSIONS AND VERIFICATION OF DETAILS OF THE ASSESSEE THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED BY ASSESSING TOTAL INCOME OF THE ASSESSEE AT .6 35 87 595/ - AFTER MAKING VARIOUS DISALLOWANCES. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND VERIFICATION OF PARTICULARS THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. I.T.A. NO . 86 4 /M/ 16 4 4. ON BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND MAINLY CONTENDED THAT THE ASSESSING OFFICER WAS NOT GIVEN AN OPPORTUNITY TO VERIFY THE RECONCILIATION STATEMENT BETWEEN 26AS AND P&L ACCOUNT SUBMITTED BY THE ASSESSEE BEFORE THE LD . CIT(A) WHICH WAS SNOT PRODUCED BEFORE THE ASSESSING OFFICER THEREBY VIOLATING RULE 46A OF THE INCOME TAX RULES AND PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE ASSESSING OFFICER FOR VERIFICATION AND DECIDING THE ISSUES AFRESH. 5. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE DID NOT SERIOUSLY OBJECT TO THE SUBMISSIONS OF THE LD. DR. 6. WE HAVE HEARD BOTH SIDES PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. ON PERUSAL OF THE APP ELLATE ORDER THE LD. CIT(A) HAS MENTIONED IN PARA 9 THAT THE RECONCILIATION STATEMENT BETWEEN 26AS AND RETURNED TURNOVER/SALARY RECEIVED AS PER IT RETURNS WAS FILED IN TABULATED FORM IN THE COURSE OF APPELLATE PROCEEDINGS AND HE HAS CONSIDERED THE SAME. H OWEVER THE ASSESSEE HAS NOT FILED THE RECONCILIATION STATEMENT BEFORE THE ASSESSING OFFICER FOR VERIFICATION. MOREOVER THE LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER BEFORE ACCEPTING AND PASSING THE APPELLATE ORDER THEREBY VIOLATED THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES . THUS WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) I.T.A. NO . 86 4 /M/ 16 5 AND REMIT THE ENTIRE MATTER TO BE FILE OF ASSESSING OFFICER FOR VERIFICATION AND DECIDE THE COMPUTATION OF TAXABLE INCOME IN ACCORDANCE WITH LAW AFTER ALLOWING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7 . IN THE RESULT THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 07 TH OCTOBER 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVV URU RL REDDY ) JUDICIAL MEMBER CHENNAI DATED THE 07. 1 0 .201 6 VM/ - / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR & 6. / GF.