B.JENSON THANARAJ,CHENNAI vs. ACIT, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-II, Chennai, dated 21.01.2014 and pertains to assessment year 2010-11.

Shri M. Karunakaran, the Ld. counsel for the assessee, submitted that the only issue arises for consideration is with regard to addition sustained by the CIT(Appeals) to the extent of `20,27,531/- as unexplained cash credit. According to the Ld. counsel, the assessee is a Director in M/s Jenson Enterprises Private Limited. During the course of the assessment proceedings, the Assessing Officer found that a deposit of `32,39,731/- was made on various dates in the Savings Bank Account of the assessee held in Axis Bank. According to the Ld. counsel, the assessee explained before the Assessing Officer that his savings for the last 12 years and gift received from his mother and father-in- law on various occasions were deposited on various dates in Axis Bank account. According to the Ld. counsel, the amount deposited in Axis Bank was withdrawn at Tuticorin. The amount withdrawn was also re-deposited at Tuticorin and again withdrawn at Chennai. Therefore, according to the Ld. counsel, the very same amount was withdrawn and used for deposit on various dates. However, the Assessing Officer disallowed the amount of `32,39,731/- as unexplained cash credit. On appeal by the assessee, the CIT(Appeals), however, directed the Assessing Officer to take peak credit to the extent of `20,27,531/-. According to the Ld. counsel, Therefore, the CIT(Appeals) is not justified in directing the Assessing Officer to take peak credit as unexplained cash credit.

On the contrary, Shri N. Madhavan, the Ld. Departmental Representative, submitted that the assessee is one of the Directors in M/s Jenson Enterprises Private Limited which has its Head Office at Chennai and work place at Tuticorin. One Shri Esakki Muthu and Shri Chermakani are the employees of M/s Jenson Enterprises Private Limited. When the assessee issued cheques in favour of these employees, the amounts were withdrawn by them from the bank. There was no business dealing between the assessee and the said employees. Since these employees were working with the concern in which the assessee was one of the directors, the amounts withdrawn by the employees are to be treated as withdrawn by the assessee. The claim of the assessee that the amount withdrawn from one place was deposited in another place, is not substantiated by producing any evidence. The amount was withdrawn in Chennai and it is not known how it could be deposited in Tuticorin. Similarly, the amount claimed to be withdrawn at Tuticorin was deposited in Chennai without any material evidence.

We have considered the rival submissions on either side and perused the relevant material on record. Admittedly, the assessee is a director in M/s Jenson Enterprises Private Limited. The assessee is maintaining a Savings Bank Account with Axis Bank at Chennai. The assessee deposited a sum of ` 32,39,731/- during the year under consideration. The assessee issued cheques in favour of one Shri Esakki Muthu and Shri Chermakani, both are employees of M/s Jenson Enterprises Private Limited. The reason for issuing cheques was not known. The fact remains that monies from the assessee’s S.B. Account with Axis Bank were withdrawn by these two employees on the basis of the cheques issued by the assessee. The assessee claims that he was withdrawing money from Chennai and re-depositing at Tuticorin. When the assessee could withdraw at Tuticorin itself from the very same S.B. Account, it is not known why this amount was withdrawn from Chennai and taken to Tuticorin for re-deposit. Similarly, the money from the very

In the result, the appeal of the assessee is dismissed. Order pronounced on 15th May, 2015 at Chennai.