S F BUILDERS P LTD,CHENNAI vs. ITO, CORP WARD -6(2), CHENNAI

PDF · subscribers
ITA 3188/CHNY/2018Status: DisposedITAT Chennai04 December 2019AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee failed to produce required evidence before the lower authorities. Therefore, the issue was remitted back to the AO for fresh examination, directing the assessee to produce Shri. D. Manoharan with relevant material.

What were the facts?

The assessee showed Rs. 18 lakhs as payable to Shri. D. Manoharan for a property purchase. Despite the property being registered in 2011, the assessee could not provide payment details or match them with sale deeds, and attempts to contact Shri. D. Manoharan failed.

What were the issues?

Whether the assessee had adequately proved the credit entry of Rs. 18 lakhs as payable to Shri. D. Manoharan, and if not, whether the addition made by the AO was justified.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D/SMC” BENCH, CHENNAI

Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN

For Respondent: Ms. R. Anita, JCIT
Hearing: 04.12.2019Pronounced: 05.12.2019

आदेश/ O R D E R

PER S. JAYARAMAN, ACCOUNTANT MEMBER :

1.

The assessee filed this appeal against the order of Commissioner of Income Tax (Appeals)-16, Chennai in dated 27.09.2018 for assessment year 2013-14.

2.

M/s. S F Builders Pvt. Ltd., the assessee, is engaged in development of housing plots in the suburbs of major cities in Tamil Nadu as well as budget housing units. While making the assessment for assessment year 2013-14, the AO noticed that the assessee has shown Rs. 18 lakhs as credit balance, as payable to Shri. D. Manoharan for the purchase of the property. The property was registered in the name of the assessee company on 27.07.2011. The assessee submitted that M/s.

Eta Star Tech City P. Ltd., paid an amount due to Shri D. Manoharan for the financial year 2011-12. However, the assessee could not provide the payment details made by M/s. Eta Star Tech City P. Ltd. to Shri. D.

Manoharan nor could not match with the payment details as per relevant sale deeds. The letter issued by the AO to Shri D. Manoharan in the address given by the assessee was returned by the postal authority with a remark as “insufficient address”. The AO found that the address given by the assessee is nothing but a site address of M/s. Hi Power V Infrastructure Ltd., a sister concern of the assessee . In the facts and circumstances, the AO held that the assessee did not prove the credit entry and hence added Rs. 18 lakhs to the returned income and completed the assessment. Aggrieved, the assessee filed an appeal before the CIT(A). The Ld. CIT(A) dismissed the appeal.

3.

Aggrieved against that order the assessee filed this appeal. The Ld. AR submitted that the assessee filed confirmation letters before the AO dated 25.02.2016 & 31.03.2016 and the transactions are undertaken through banking channel. Therefore, it was pleaded that the appeal be allowed. Per contra, the Ld. DR submitted that the assessee contented that it has purchased land from Shri D. Manoharan and paid the same in the earlier year i.e., during assessment year 2012-13 itself. However, during the period relevant to the assessment year 2013-14, Shri. D.

Manoharan, was shown as a creditor in the balance sheet. Since, the assessee contended that the payment was made by a group concern to Shri. D. Manoharan, in that case name the group concern should have been shown in the balance sheet instead of Shri. D. Manoharan. It has not done so. Further, perusal of the bank account of M/s. Eta Star Tech City P. Ltd., did not mention the name of Shri. D. Manoharan. The assessee also could not produce any evidence which can show that Rs. 18 lakhs has been paid by M/s. Eta Star Tech City P. Ltd. to Shri. D.

Manoharan. Considering all these facts, the Ld. CIT(A) dismissed the appeal and hence the Ld. DR supported the orders of the lower authorities.

4.

We heard the rival submissions and gone through the relevant material. Though, the impugned transaction was completed in the earlier assessment year itself, the assessee has shown in its books of accounts that Rs. 18 lakhs was payable to Shri. D. Manoharan. The assessee could not produce the required evidences before the lower authorities.

Considering the assessee’s plea and the inability of the assessee in explaining the transaction before the lower authorities, we deem it fit to remit back this issue to the AO, with a direction to the assessee to produce Shri. D. Manoharan with relevant material before the AO, for a fresh examination. The Assessing Officer on due examination of the parties and after considering their explanations, evidences/materials placed by them in respect of their contentions and after affording adequate opportunity to the assessee, shall pass the order in accordance with law. The AO is also free to conduct appropriate enquiry as deemed fit, but he shall furnish adequate opportunity to the assesssee on the material etc to be used against it and decide the matter in accordance with law.

5.

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.

Order pronounced on Thursday, the 05th December, 2019 at Chennai.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →