B.KAMARAJ,ERODE vs. ITO, ERODE

PDF · subscribers
ITA 2974/CHNY/2014Status: DisposedITAT Chennai06 February 2015AY 2010-114 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 4 lakhs on account of stock should be maintained only to the extent of Rs. 1 lakh, deleting the balance Rs. 3 lakhs. The issue of cash deposits was not argued.

What were the facts?

During a survey, the assessee's father admitted to accumulated income from stock. The assessee declared less than the agreed amount, leading to an addition of Rs. 4 lakhs. The Assessing Officer also added Rs. 1,50,500/- as unexplained cash deposits.

What were the issues?

Whether the addition of Rs. 4 lakhs on account of stock, based on a survey admission, is justified, and whether cash deposits are unexplained.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH : CHENNAI

Before: SHRI B.R. BASKARAN & SHRI S. S. GODARA]

For Respondent: Shri A.V.Sreekanth, JCIT

Heard together (2 matters)

S.P.No. 528/Mds/2014
I.T.A.No.2974/Mds/2014

Read from the judgment's own cause title. This page is filed under one of them.

PER S.S.GODARA, JUDICIAL MEMBER

1.

This assessee’s petition seeks stay of the impugned demand of `2,46,410/- arising from additions of ` 4 lakhs pertaining to value of stock admitted in the course of ‘survey’ and cash deposits in the bank account of `1,50,500/-, made in course of a ‘regular’ assessment

S.P.No.528/14 :- 2 -: I.T.A.No.2974/14 framed on 28.3.2013 and affirmed in the CIT(A)’s order under challenge.

After arguing for sometime, both parties express no 2. objection in case the main appeal itself is taken up for hearing.

Therefore, we proceed to decide the appeal on merits.

The assessee, an ‘individual’, deals in wholesale and retail 3. rice business. The department had carried out a ‘survey’ in his business premises on 2.3.2010. There is no dispute that the regular account books like day book, ledger, purchase and sale register pertaining to the aforesaid commodities’ stock are not maintained.

The assessee’s father Shri G.Balakrishnan had got recorded his statement. He deposed that the impugned ‘survey’ had disclosed physical stock of two concerns namely M/s G. Balakrishnan Rice Mandy of ` 40,24,630/- and Periyar Traders of ` 11,04,840 totalling to ` 51,29,470/-. This was stated to be their accumulated income since the year 2007. Shri G. Balakrishnan undertook to admit a sum of ` 40,24,630/- in his case and the balance amount of ` 11,04,840/- to be declared in the assessee’s case. The assessee also appears to have agreed with the said statement.

S.P.No.528/14 :- 3 -: I.T.A.No.2974/14

4.

The assessee filed his return on 31.8.2010 disclosing total income of ` 4,93,870/-. The same was ‘summarily’ processed. The Assessing Officer took up ‘scrutiny’. He inter alia noticed from the assessee’s computation of total income that only a sum of ` 7,04,840/- had been declared as against that undertaken in the course of ‘survey’ at ` 11,04,840/- giving rise to a differential amount of ` 4 lakhs. The assessee pleaded that this amount of ` 4 lakhs stood split over and already declared as income to the extent of ` 1.50 lakhs in assessment year 2008-09 and ` 2.50 lakhs in 2009-10; respectively. The Assessing Officer heavily relied on the ‘survey’ statement aforesaid and rejected the assessee’s explanation. He also added a further sum of ` 1,50,500/- cash deposited by quoting section 68 of the Act.

The assessee preferred an appeal. The CIT(A) has affirmed 5. both the these additions. This leaves the assessee aggrieved.

We have heard both parties and gone through the case file. 6.

The assessee has pleaded two substantive grounds. No argument is advanced qua the latter issue. This leaves us with the former issue of value of stock not admitted of ` 4 lakhs only. There is no dispute that the assessee/his father in the course of ‘survey’ itself had made it clear that this stock denoted accumulated income since the year 2007.

S.P.No.528/14 :- 4 -: I.T.A.No.2974/14 The Revenue does not altogether reject the contents thereof. The assessee has already declared this differential sum of ` 4 lakhs by splitting up amount in the preceding two assessment years (supra). He has also failed to maintain regular books and other material in support of the claim. Faced with this situation, we deem it appropriate in the larger interest of justice that this addition of ` 4 lakhs deserves to be maintained to the extent of ` 1 lakh only. We order accordingly. The issue is set at rest. The balance addition of ` 3 lakhs is deleted.

The assessee’s appeal is partly allowed. The stay petition is 7. rendered infructuous.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →