G.KARTHIK,ERODE vs. ACIT, TRICHY

आदेश / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A), Tiruchirapalli dated 04.09.2014 pertaining to assessment year 2010-11.

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filing the appeal before the Tribunal. However, there was no delay as

it was clarified by the ld. Assessing Officer that order of ld.CIT(A)

was actually served on the assessee only on 10.11.2014 and to that

effect, revised Form No.36 was filed by the assessee Accordingly, I

notice that there is no delay in filing the appeal, which was filed in

time.

and derives income from the following business / sources.

i. Income from House Property ii. Carrying on the business of civil contractor under the name and style of M/s.K.G.K Construction and deriving income from the said business iii. Income from other sources The assessee filed his return of income for the AY 2010-11 on

14.02.2011 electronically admitting a total income of `17,42,070/- and

agricultural income of `1,72,000/-.The assessee has also filed tax

audit report as required U/s.44AB of the I.T Act. The Assessing

Officer during the course of assessment proceedings called for

various details such as list of bank accounts, sundry debtors/

creditors, details of loans from friends and relatives along with their

addresses, confirmation letters, copy of home loan sanction letters,

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proof for agricultural income and details of marriage gifts and gift

received from the assessee’s wife. The assessee has not produced

or filed details as called for. The assessee has claimed loan creditors

to the tune of `99,51,553/- (all below `20,000) including fresh loan

creditors during the year to the tune of `25,18,778/- and marriage gift

received at `3 lakhs and gift from his wife at `5 lakhs. Later on the

Authorised Representative of the Assessee appeared on 04.12.2012

and filed a list of 521 unsecured loan creditors with addresses. All the

loans taken are below `20,000/-. No confirmation letters or source of

the creditors identity of fie loan creditors have been filed. Later on

there was a survey u/s 133A conducted in the business premises of

the assessee. The assessee has agreed that the loan credits are not

real and genuine. Even during the random verification of addresses

given by the loan creditors by the Inspector of the department none of

them were existed in the given addresses and accordingly the

Assessing Officer has finalized the assessment by making various

additions at `36,43,623/-.

Nature of additions Amount(`) Disallowance of housing loan interest paid to SBI on the ground 1,50,000/- that construction is not yet completed

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Assessment of loan creditors U/s.68 of the IT Act for the want of 25,18,778!- genuineness and credit worthiness of the creditors Disbelieving the receipt of gift of Rs.5,00,000/- from appellant’s 5,00,000/- wife Smt.G.Kirthika Disbelieving the receipt of gift by the appellant at the time of his 3,00,000/- marriage Disallowance of Interest claimed on the alleged creditors 1,74,845/- assessed as income Total 36,43,623/- Aggrieved by the above addition, the assessee carried the appeal

before the Ld.CIT(A).

4.1 Before Ld.CIT(A), the ld.A.R objected to the addition of

housing loan interest claim of Rs.l,50,000/- u/s. 24 of the Act, out of

the total interest payments of `2,20,732/- paid to the State Bank of

India, Kodumudi branch without considering the period of completion

of construction as the property has been self occupied by the

assessee. It was submitted that the Assessing Officer made an

addition of Rs.25,18,778/- received as loan from various creditors as

unexplained cash credits u/s. 68 of the Act and interest payments

made to them at `1,74,845/-. Similarly, the ld.A.R objected for the

addition of `5 lakhs as gift received from assessee’s wife

Smt.G.Krithika as well as a sum of `.3 lakhs being the gift received by

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the assessee at the time of his marriage. According to Ld.CIT(A), the

above additions are made by the Assessing Officer as the assessee

had not furnished any details during the course of assessment

proceedings as well as the additions were made on the basis of

survey findings and subsequent enquiry by the department officials. 4.2 Further, the Assessing Officer made an addition of `1,50,000/-

towards interest paid on housing loan for self occupied house. As the

house was still under construction during the previous year relevant

to the assessment year under consideration the assessée is not

eligible for claiming the interest. Ld.CIT(A) observed that the

Assessing Officer has correctly disallowed the interest claim at `1,50,000/-. Hence the same was confirmed by Ld.CIT(A). Similarly

the assessee failed to prove the identity and genuineness and

creditworthiness of the loan creditors and the assessee himself

agreed that the loan creditors are not real and even the Inspector’s

report establishes the fact that none of the creditors are existing in

the addresses given. Therefore the amount introduced in the name of

the loan creditors during the year under consideration at `.25,18,778/- has been confirmed by the Ld.CIT(A) as the assessee

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failed to prove the genuineness of the loan creditors. Hence the same

was confirmed by Ld.CIT(A).

4.3 Similarly, the assessee could not produce any evidence of gift of `5 lakhs stated to have been received by the assessee from his

wife Smt.G.Krithika, who being a housewife has no independent

source of income also not an income tax assessee to verify the claim

of the assessee. Over and above, the assessee has failed to

establish the genuineness of the gift transaction between him and his wife at `.5 lakhs. According to Ld.CIT(A), the addition made by the

Assessing Officer deserves to be confirmed. Accordingly the same is

confirmed by the Ld.CIT(A).

4.4 As far as another amount of Rs.3 lakhs stated to have been

received by the assessee as marriage gift from his blood relatives,

the assessee could not produce any details to prove the claim made

by the assessee. Hence the addition made by the Assessing Officer at `3 laths on account of marriage gift received by the assessee was

confirmed dismissing the claims of the assessee.

4.5 The Assessing Officer has also disallowed an amount of `1,74,842/- attributed to the interest paid to the new creditors which

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are unproved to the tune of `25,18,778/- and accordingly the same is

confirmed.

4.6 On appeal, Ld.CIT(A) endorsed the action of ld. Assessing

Officer and confirmed all the additions made by ld. Assessing Officer.

Against the order of Ld.CIT(A), now the assessee is in appeal

before us.

plea that as the assessee was not able to file requisite details due to

lack of opportunities provided by the lower authority, the assessee

seeks one more opportunity to place necessary evidence in support

of the above grounds raised in this appeal before the lower

authorities.

various opportunities to the assessee by ld. Assessing Officer as well

as by Ld.CIT(A) , the assessee has not placed any evidence in

support of his claim. Further, ld.D.R submitted that even at this stage,

there is no iota of evidence for the assessee to produce before this

Tribunal and pleaded that the appeal may be dismissed.

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Chennai, Dated the 21st November, 2017. K s sundaram.

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 3. आयकर आयु�त (अपील)/CIT(A) 5. �वभागीय ��त�न�ध/DR 2. ��यथ�/Respondent 4. आयकर आयु�त/CIT 6. गाड� फाईल/GF