BELAIR CORPORATION PRIVATE LIMITED,CHENNAI vs. ACIT CENTRAL CIRCLE III(4), CHENNAI

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ITA 1031/CHNY/2019Status: DisposedITAT Chennai19 August 2019AY 2015-164 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The tribunal upheld the findings of the CIT(A) regarding unexplained credits. The CIT(A) had concluded that the credits were unexplained and rightly invoked Section 68 of the Income Tax Act.

What were the facts?

The assessee filed an appeal with a delay of 14 days. The assessee's representative was unable to appear for the hearing. The delay was condoned by the tribunal.

What were the issues?

Whether the credits appearing in the assessee's books were unexplained and liable to be taxed under Section 68 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI INTURI RAMA RAO]

For Respondent: Shri. N. Gopikrishna, JCIT

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER

1.

This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-19, Chennai (‘CIT(A)’ for short) dated 24.01.2019 for the Assessment Year (AY) 2015-2016.

ITA No.1031/2019 :- 2 -:

2.

From the perusal of the appeal memo, it is clear that there is a delay of 14 days in filing the present appeal. Assessee has not filed any petition requesting for cononation of delay despite being notified on 12.05.2019 and on the day of hearing, none appeared on behalf of the assessee despite due service of notice.

3.

Assessee had filed petition praying for condonation of delay stating that delay had occurred on account of the fact that Director Shri. Arvind Srinivasan who was residing at Gurgaon was busy attending his mother who was seriously ill undergoing dialysis and consequently he could not follow with the ld. Authorised Representative who was entrusted with the duty of filing the appeal before the Tribunal.

Per contra, ld. Departmental Representative did not raise 4.

any serious objection for condoning the delay.

In the circumstances, we condone the delay of fourteen 5. days in filing the appeal and admit the appeal for adjudication.

6.

As regards to the merits of the addition, the findings of the ld. CIT(A) are as under:-

‘’6.2, The argument of the appellant is that the said credits arc unreconciled balances of the clients. The company was engaged in the business of share braking and was a SE

ITA No.1031/2019 :- 3 -: member; it ceased its operation in 20 3 and surrendered its membership to NSE. It further submitted that the unreconciled client balances were pending for reconciliation by the NSE and the clients lodged their complaints and claims with NSE. It is claimed by the appellant that all the cases were heard and closed by the NSF in September 2016 and client balances were all settled directly by NSE duly deducting it from the member ship deposit made by the company.

6.3. II what the appellant states above are true and the account are all settled then it should be in position to reconcile all the credits and the confirmation can also be filed. The NSE has carried out the reconciliation that would definitely be done in consultation with the, company only. The company would not allow NSE to deduct money from its membership fees without satisfying itself that LIC payments are made to rightful claimants that being the case appellant should be in a position to share all those evidence with the IT Department as well. Moreover there are KYC (know your customer) norms applicable to share broker and NSF Companies as well and the appellant should be in a position to provide the detail of these clients once called for by the authorities concerned. If still the assessee or the applicant is not able to explain the credit appearing in the books, then the said credits are rendered unexplained and attract the provisions of section 68 that the Assessing Officer has rightly invoked.

64.

Regarding another addition of unexplained credit of �474832 also appellant has not. been able to give any evidence, The appellant claims that out of the total amount of Rs,474832, Rs. 134832 pertains to audit fee payable and in the computation of income the appellant had disallowed expenditure on account of non deduction of TD in ITRV for the Asst. Year, 2015-16. However the disallowance in the computation of Rs. 1,00,000 and it is not specified whether it is on account of audit tees payable. Moreover, the appellant has not taken this argument before the AO and now it appears to be an afterthought and hence rejected.

6.5 As far as the remaining amount is concerned no evidence or explanation 0f the credit is offered and hence the ITA No.1031/2019 :- 4 -: conclusion of Assessing Officer of treating this credit as unexplained in the hands of the appellant is upheld’’.

The findings of the ld. CIT(A) is based on proper appreciation of material available on record and we do not find any perversity in the conclusion of the order of the ld. CIT(A). Hence, the appeal filed by the assessee stands dismissed.

In the result, the appeal of the assessee stands dismissed. 7.

Order pronounced on 19th day of August, 2019, at Chennai.

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