ACIT Vs S. Mohan Kumar (ITAT Chennai)
Conclusion: Assessee failed to file necessary evidence to establish credits appearing in the names of above two persons in the books of account of the assessee as genuine transactions, therefore, addition of unexplained credits was rightly justified.
Held: AO made additions towards credits on the ground that the assessee could not file any evidence to explain the credits. AO had considered the issue in light of statement recorded from the assessee, Mr. S & Mr. K during the course of search and on the basis of their statements opined that both did not have any means to explain huge amount of advances given to the assessee. Therefore, AO had made additions in the hands of assessee on substantive basis and further, assessed very same credits in the hands of Mr. S & Mr. K on protective basis. During the second round of litigation, AO had made additions towards credits on very same basis and observed that except general statement, assessee could not furnish any specific evidence to justify credits in the name of both the parties. It was held that credits appeared in the name of the above two persons were not satisfactorily explained to the AO with necessary evidence to prove genuineness of transaction and creditworthiness of parties, although, the assessee had filed certain evidences to prove identity of the persons. It was well settled principles of law that when a credit appeared in the books of account of the assessee, then it was for the assessee to satisfactorily explain the credit with necessary evidence. Unless the assessee discharged its burden and explain credit, AO may treat the same as unexplained income of the assessee. In this case, the assessee failed to file necessary evidence to establish credits appearing in the names of above two persons in the books of account of the assessee as genuine transactions. Therefore, CIT(A) after considering relevant facts had rightly sustained additions made by AO.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This bunch of five cross appeals filed by the Revenue, as well as the assessee are directed against common order passed by the learned Commissioner of Income Tax (Appeals) 18, Chennai dated 31.10.2019 and pertain to assessment years 2006-07, 2007-08 & 2008-09. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off, by this consolidated order.
2. At the outset, learned AR for the assessee submitted that there is a delay of 43 days in filing both these appeals by the assessee, for which necessary petition along with affidavit for condemnation of delay explaining the reasons for delay has been filed. The AR further submitted that the assessee could not file appeal within the time allowed under the Act, due to the fact that the assessee was suffering from heart ailments due to diabetics and high blood pressure and was undergoing medical treatment which caused delay of 43 days. The delay in filing both the appeals is neither intentional nor willful, but for the unavoidable reasons, therefore, he prayed that delay may be condoned in the interest of advancement of substantial justice.
3. The learned DR, on the other hand, strongly opposing condonation of delay petition filed by the assessee submitted that the reasons given by the assessee does not come within the ambit of reasonable and bonafide reasons, which can be considered for condonation of delay and hence, appeal filed by the assessee may be dismissed as not maintainable.
4. Having heard both the sides and considered petition filed by the assessee for condonation of delay, we are of the considered view that reasons given by the assessee for not filing the appeals within the time allowed under the Act comes under reasonable cause as provided under the Act for condonation of delay and hence, delay in filing of appeals is condoned and appeals filed by the assessee are admitted for adjudication.
ITA No.89/Chny/2020 (A.Y. 2006-07):
5. The revenue has raised following grounds of appeal:-
“1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
2. Whether on the facts and in the circumstances of the case, the Id. CIT(A) was correct in deleting the addition of Rs. 9,52,25,000/- made by the Assessing Officer towards bad debts?
3. Whether on the facts and in the circumstances of the case, the Id. CIT(A) was correct in deleting the addition of Rs. 53,62,962/- made by the Assessing Officer towards unexplained investment in bank accounts of family members?
4. Whether on the facts and in the circumstances of the case, the Id. CIT(A) was correct in not appreciating the fact that the assessee did not maintain regular books of accounts ?”
6. The brief facts of the case are that the assessee is an individual and engaged in the business of money lending. A search and seizure operation u/s.132 of the Income tax Act, 1961, was conducted in the case of the assessee on 02.01.2008. Consequent to search, the assessee has filed return of income for the assessment year 2006-07 on 30.12.2008 admitting total income of Rs.40,54,960/-. The assessment has been completed u/s.143(3) r.w.s.153A of the Income Tax Act, 1961 on 31.12.2019 and determined total income of Rs.27,90,83,922/- by making following additions :-
