P.SUYAMBU,NAGERCOIL vs. ACIT, MADURAI

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ITA 212/CHNY/2016Status: DisposedITAT Chennai26 May 2016AY 2007-085 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee should be given an opportunity to furnish the names and addresses of sundry debtors. The orders of the lower authorities were set aside to allow for re-examination.

What were the facts?

The Assessing Officer treated sundry debtors as unexplained investment and made additions based on notional interest, as the assessee failed to provide details. The assessee expressed willingness to furnish these details before the Tribunal.

What were the issues?

Whether the addition on account of notional interest on sundry debtors was justified without providing an opportunity to the assessee to furnish details.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but relates to unexplained investments and additions to income.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI CHANDRA POOJARI

Hearing: 28.04.2016Pronounced: 26.05.2016

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

All the four appeals of the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals)-19, Chennai, for the assessment years 2005-06 to 2008-09. Since common issue arises for consideration in all these appeals, we common order.

2.

Shri K. Ravi, the Ld.counsel for the assessee, submitted that the assessee is a master graduate in Law and Trustee of a charitable Trust at Nagercoil. During the respective years under consideration, the Assessing Officer found that there are sundry debtors for which no schedule or the details of the persons from whom the amount was received was not available. Therefore, the Assessing Officer treated the same as unexplained investment and computed the notional interest at 24% and made addition to the total income. On a query from the Bench, what is difficulty for the assessee in giving details regarding the names and address of the sundry debtors? The Ld.counsel fairly submitted that the assessee is ready and willing to furnish the names, address and other details of sundry debtors for examination by the Assessing Officer.

Therefore, the Ld.counsel submitted that the matter may be remitted back to the file of the Assessing Officer.

3.

We have heard Sh. P. Radhakrishnan, the Ld. Departmental Representative also. The Ld. D.R. submitted that the assessee has not filed any details before the Assessing Officer with regard to so- consideration. Therefore, the Assessing Officer came to a conclusion that the sundry debtors may be undisclosed investment.

No evidence was filed even before the CIT(Appeals). The Ld. D.R. further submitted that there was search in the premises of the assessee on 04.05.2007. In the absence of any material with regard to names, address and other details of sundry debtors, the CIT(Appeals) has confirmed the notional interest computed and added by the Assessing Officer.

4.

We have considered the submissions on either side and perused the relevant material available on record. As rightly submitted by the Ld.counsel for the assessee and the Ld. Departmental Representative, the addition was made in the absence of any details with regard to names and address of so- called sundry debtors. This Tribunal is of the considered opinion that the assessee has to necessarily furnish the names and address of the sundry debtors before the Assessing Officer for examination.

Now, the Ld.counsel for the assessee made a statement before this Tribunal that the assessee is willing and ready to furnish the names and address of the sundry debtors before the Assessing Officer for examination. In view of the above, this Tribunal is of the considered

4 to 213/Mds/16 opinion that giving one more opportunity to the assessee to furnish the names, address and other details of the sundry debtors may not prejudice the interest of the Revenue in any way. On the other hand, giving such opportunity would definitely promote the cause of justice. Accordingly, in the interest of justice, the orders of both the authorities below are set aside and the entire addition on account of notional interest on the sundry debtors is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue afresh on the basis of details with regard to sundry debtors that would be filed by the assessee before the Assessing Officer and thereafter decide the same in accordance with law after giving reasonable opportunity to the assessee.

5.

In the result, all the appeals of the assessee are allowed for statistical purposes.

Order pronounced on 26th May, 2016 at Chennai.

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