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Income Tax Appellate Tribunal, ‘D’ (SMC
Before: SHRI V. DURGA RAO
आदेश / O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This is an appeal filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-18, Chennai in .ITA No.671/15-16, dated 28.08.2019 for the Assessment Year 2005-2006.
2 -: 2. The brief facts of the case are that a search u/s.132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was conducted in the case of M/s. Keleesuwari Refinery Private Limited. The Assessee is engaged in the business of trading oil in the name of “Selvi Stores”. A notice u/s.153A was issued on 01.12.2009 calling for return of income. The return of income was filed on 12.08.2010. One, Mr. R. Ravi, Authorized Representative of the Assessee was present from time to time before the Assessing Officer and furnishing all the relevant details and books of accounts that were called for. In the Assessment Order, the Assessing Officer had noticed that for the financial year 2004-2005 of the „Selvi Stores‟ of which the Assessee is the Proprietor, a sum of Rs.13,50,000/- in cash on various dates was received from M/s. Venkateswara Oil Mills, Subaraya Chetty 5th Street, Chennai. On examination by the ADIT, M/s. Venkateswara Oil Mills had refused any purchase from „Selvi Stores‟ nor making any payments in cash. Under these circumstances, it was proposed vide show-cause notice dated 20.12.2010 to assess these cash credits as income u/s.68 of the Income Tax Act, 1961.
In reply, the Authorized Representative of the Assessee submitted a letter vide dated 27.10.2010 which stated that the sale of oil were genuine and that copies of sale invoices were enclosed. However, as 3 -: the vendor had refused to have made any payment in cash, the cash credits on account of this party amounting to Rs.13,50,000/- was assessed as unexplained cash credits u/s.68 of the Income Tax Act, 1961. Accordingly, the assessment was completed.
On appeal, the learned Commissioner of Income Tax (Appeals) had confirmed the order of the Assessing Officer.
On being aggrieved, the Assessee had filed an appeal before the Income Tax Appellate Tribunal.
The learned Counsel for the Assessee had submitted that the sale of oil along with the sales invoices are filed before the Assessing Officer and therefore the Assessee has to be discharged the burden cast upon him, if at all the Assessing Officer has to make an addition u/s.68 of the Income Tax Act, 1961, he ought to give an opportunity to cross-examine the purchaser, M/s, Venkateswara Oil Mills and without giving an opportunity and making an addition is truly unfair, unjustified and unwarranted too.
On the other hand, the learned Departmental Representative has strongly supported the order passed by the lower authorities.
4 -: 8. Both the parties have been heard, perused the materials available on record and gone through the orders of the authorities below.
In this case, a search u/s.132 of the Income Tax Act, 1961 was conducted in the case of Shri. G. Sunderrajan in connection with the search proceedings in the case of M/s. Kaleesuwari Refinery Private Limited. It is noticed that Mr. G. Sunderrajan is running an oil trading business in the name of „Selvi Stores‟. The Assessing Officer from the books of accounts of the Assessee noticed that a sum of Rs.13,50,000/- in cash on various dates was received from M/s. Venkateswara Oil Mills, Subaraya Chetty 5th Street, Chennai. On examination, the proprietor of M/s. Venkateswara Oil Mills refused any purchases and also any payments. When the Assessing Officer had asked the Assessee, it was submitted that the sale transaction was genuine and also filed the sales invoices before the Assessing Officer. However, the Assessing Officer had not agreed with the explanation given by the Assessee and had made an addition u/s.68 of the Income Tax Act, 1961. The Assessee had filed the sales invoices and books of accounts before the Assessing Officer. In our opinion, the Assessee had discharged the burden casted upon him. When the Assessing Officer wanted to rebut the burden, he is to give an opportunity to cross-examine the Proprietor of M/s.
5 -: Venkateswara Oil Mills. The Assessing Officer should not have made an addition simply based on the statement, when there is no evidence. In our opinion, the addition made by the Assessing Officer is not based on any material except a statement. The addition made by the Assessing Officer is to be deleted and that confirmed by the learned Commissioner of Income Tax (Appeals) is to be reversed. Accordingly, we reverse the order passed by the learned Commissioner of Income Tax (Appeals). Thus, the appeal filed by the Assessee is allowed.
In the result, the appeal of the Assessee is allowed.
Order pronounced on 21st October, 2020 in Chennai.