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Income Tax Appellate Tribunal, ‘C’ (SMC
Before: SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
In this appeal filed by the assessee, which is directed against an order dated 20.11.2017 of Commissioner of Income-tax (Appeals)-5, Chennai, it is aggrieved on an addition of �4,00,000/- considered as unexplained investments which was confirmed by the ld. Commissioner of Income Tax (Appeals).
Ld. Counsel for the assessee submitted that assessee has claimed a sum of �4,00,000/- utilized by it for construction of a house at No.150, A M Garden, Vichoor Village, Ponneri, Thiruvottiyur, as coming out of cash balance of �5,63,762/- available with the assessee, commission and other receipts recorded in the cash book.
As per the ld. Authorised Representative, assessee was having income from rentals, commission and agriculture. Ld. Authorised Representative submitted that in the Balance Sheet filed by the assessee alongwith its return for impugned assessment year, closing cash balance of �5,59,608/- was shown. Contnetion of the ld. Authorised Representative was that this claim was disbelieved by the lower authorities for no reason. As per the ld. Authorised Representative, the said closing balance, if considered, the investment in construction of the house stood explained.
Per contra, ld. Departmental Representative strongly supported the orders of the authorities below.
I have considered the rival contentions and perused the orders of the authorities below. Reason why ld. Assessing Officer made an addition of �4,00,000/- appears at pare (e) of his order which is reproduced hereunder:-
‘’On verification of the details furnished by the assessee that it was found that he has constructed a house consisting of ground floor (shop) and pt floor (residential house) at No.150, A M Garden, Vichoor Village, Ponneri, Thiruvottiyur in Survey No.270/2 with an area of 456 sq. ft.. Assessee has admitted in his Answer 6(3) to Q.No.6 of statement recorded on 11.03.2016 that '/ have constructed a house duing the F. Y.2011-12 consisting of ground floor (shop) and t" floor (residential house) at No. 150, A M Garden, Vichoor Village, Ponneri, Thiruvottiyur in Survey No.27012 with an area of 456 sq.f[t., The approximate construction cost worked out to Rs.4,OO,OOO/-. The sources for this construction expenses were met out of my commission receipts. At present, I am not able to furnish the documentary evidences for the sources for the construction made.
Since, the assessee could not able to furnish the documentary evidences for the sources of construction out of commission receipts. The entire amount invested in construction of Rs.4,OO,OOO/- is treated as unexplained investment and added to the total income’’.
Ld. Commissioner of Income Tax (Appeals) had confirmed the above disallowance citing a reason that assessee had failed to furnish evidence for opening cash balance, commission received and other receipts recorded in the cash book. Relevant para 9.4 of the ld. Commissioner of Income Tax (Appeals) is reproduced hereunder:-
‘’However the A.R did not furnish the evidences for (i) opening cash balance of ₹5,63,762/- claimed as on 01.04.2011 (ii) the commission claimed as received in the cash book and (iii) other receipts and payments shown in the cash book’’.
Assessee has placed before me, copy of the profit and loss account and Balance Sheet filed by it, along with its return for the impugned assessment year. Said Balance Sheet clearly show that assessee had following amounts in its current asset.
Closing Stock 5,59,664.00 Cash-in-hand 5,59,608.00 Bank Accounts 56.00 It is clear from the above that assessee had cash shown a balance of �5,59,608/- as on 31.03.2012. Assessee’s investment of �4,00,000/- for construction of the building only indicate that the actual cash balance was �1,59,608/- only and not �5,59,608/-. It can at the best be considered as overstatement of cash balance. In my opinion, assessee was having sufficient source for construction of a house at Vichoor Village, Ponneri, Thiruvottiyur. I do not find any reason to sustain the addition made by the lower authorities. Addition stands deleted.
Though there is a ground assailing the validity of the 5. reopening, ld. Counsel for the assessee submitted that he was not pressing such ground.
In the result, appeal of the assessee is partly allowed. 6.
Order pronounced on Monday, the 2nd day of July, 2018, at Chennai.