MEENA RAMANATHAN,TIRUCHIRAPALLI vs. ACIT, CIRCLE-3(1), TIRUCHIRAPALLI
Facts
The assessee is aggrieved by the confirmation of additions of sundry creditors and unexplained deposits for AY 2016-17. The additions were made by the AO and upheld by the CIT(A). The sundry creditor balance of Rs.18.54 Lacs was stated to be due to the assessee's husband and an opening balance with no transactions during the year. The deposits of Rs.16 Lacs were stated to be outstanding from earlier years and represented rental deposits.
Held
The Tribunal held that the addition for sundry creditors was not sustainable as the amount was an opening balance due to the assessee's husband and supported by ledger extracts and confirmation. Similarly, the addition for deposits was also not sustainable as it represented rental deposits outstanding since FY 2010-11 and reflected in financial statements. The additions could not be rejected on mere suspicion.
Key Issues
Whether additions for sundry creditors and unexplained deposits are sustainable in the absence of cogent evidence to the contrary.
Sections Cited
143(3), 254
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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
आयकर अपीलीय अिधकरण “बी” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय �ी मनोज कुमार अ�वाल ,लेखा सद# एवं माननीय �ी मनु कुमार िग'र, �ाियक सद# के सम(। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं./ ITA No.2453/Chny/2024 (िनधा)रण वष) / Assessment Year: 2016-17 Smt. Meena Ramanathan ACIT बनाम 10, 3rd Street, Sundar Nagar, Circle-3(1) / Vs. Tiruchirappalli-620 021. Trichy. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAHPR-7264-E (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ� कीओरसे/ Appellant by : Shri N. Arjun Raj (Advocate) - Ld.AR � थ�कीओरसे/Respondent by : Ms. D. Komali Krishna (CIT) - Ld. DR सुनवाई की तारीख/Date of Hearing : 19-12-2024 घोषणा की तारीख /Date of Pronouncement : 31-12-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 02-08-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s 254 of the Act on 28-03-2024. The assessee is aggrieved by confirmation of addition of sundry creditors and addition on unexplained deposits. Having heard rival submissions, the appeal is disposed-off as under.
On the issue of sundry creditor balance of Rs.18.54 Lacs, it was stated that this amount was due to the assessee’s husband Shri N. Ramanathan and it was only an opening balance. There was no transaction during the year. In support, ledger extracts were furnished along with a letter from Shri Ramanathan. On the issue of deposits as stated to be received from Sri Narayana Industries Yarn P. Ltd., it was stated that the deposits were outstanding from earlier years and the balance represent opening balance only. The confirmation and ledger extract was furnished in support of the same. However, Ld. AO rejected the same and added both the amounts to the income of the assessee. The Ld. CIT(A) upheld the same against which the assessee is in further appeal before us. 3. So far as the loan creditor is concerned, we find that the balance of Rs.18.54 Lacs is due by the assessee to her husband. Upon perusal of ledger extract as placed on Page No.9, it is evident that substantial amount has been outstanding since 01-04-2010 and there are small receipts of Rs.0.66 Lacs during this year. Therefore, entire amount could not be added as assessee’s income for this year. Even otherwise, the assessee has placed on record ledger extracts and confirmation letter which cannot be rejected on mere suspicion. Accordingly, this addition is not sustainable. 4. So far as the deposit of Rs.16 Lacs is concerned, the ledger extract would similarly show that this amount is outstanding since FY 2010-11. The same represent rental deposits to the assessee. This amount is reflected in the financial statements of Sri Narayana Industrial Yarns P. Ltd. as placed on record along with its return of income. Therefore, in the
absence of any contrary finding, this addition is also not sustainable. We order so. 5. The appeal stand allowed in terms of our above order. Order pronounced on 31st December, 2024
Sd/- Sd/- (MANU KUMAR GIRI) (MANOJ KUMAR AGGARWAL) �ाियक सद# / JUDICIAL MEMBER लेखा सद# / ACCOUNTANT MEMBER चे4ई Chennai; िदनांक Dated : 31-12-2024 DS आदेशकी@ितिलिपअ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. � थ�/Respondent 3. आयकरआयु=/CIT Madurai. 4. िवभागीय�ितिनिध/DR 5. गाडBफाईल/GF
