M/S.suryabalaji Investments (P) Ltd., Coimbatore-6 v. The Income Tax Officer, Corporate Ward-3, Coimbatore-18

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 21.12.2017 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU TAX CASE APPEAL NO.719 OF 2017 M/s.Suryabalaji Investments (P)Ltd., Coimbatore-6. ...AppellantVs The Income Tax Officer, CorporateWard-3, Coimbatore-18....Respondent APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 03.2.2017 made in ITA.No.2437/Mds/2016on the file of the Income Tax Appellate Tribunal, Chennai 'A'Bench, (Camp : Coimbatore) for the assessment year 2012-13,preferred against the order of The Commissioner of Income Tax(Appeals)-I dated 25.05.2016 in Appeal No.14/15-16 challengingthe order of the Income Tax office dated 27.03.2015 for theAssessment year 2012-13. For Appellant : Mr.S.SridharFor Respondent : Mr.T.R.Senthilkumar, SSCJudgment was delivered by T.S.SIVAGNANAM,J Mr.T.R.Senthilkumar, learned Senior Standing Counselaccepts notice for the Revenue. Heard both. 2. This appeal is directed against the order passed by theIncome Tax Appellate Tribunal, Chennai 'A' Bench, (Camp :Coimbatore) in ITA.No.2437/Mds/2016 dated 03.2.2017 for theassessment year 2012-13, raising the following substantialquestions of law :"i. Whether the Appellate Tribunal iscorrect in law in sustaining the additionbased on notional/ artificial book entrieson the mis-construction of Section 69 of theAct while overlooking the mandate forpreparation of the financial statementsunder the Companies Act, 1956 ? and https://hcservices.ecourts.gov.in/hcservices/ ii. Whether the Appellate Tribunal iscorrect in law in sustaining the additionbased on book entries as unexplainedinvestments within the scope of Section 69of the Act overlooking the principles of'substance over form'?" 3. On a careful reading of the order passed by theCommissioner of Income Tax (Appeals) as well as that of theTribunal, we find that the above substantial questions of law donot arise for consideration, as what the assessee attempts to dois to call upon this Court to re-appreciate the factual position. 4. In the order passed by the Commissioner of Income Tax(Appeals), it was pointed out that the assessee was not able toexplain with proper and justifiable reasons for showing a hugeloan amount from a bank whereas the corresponding investmentsshown in the books of accounts are correct and that the assesseewas not able to explain with proper reasons the investments, forwhich, the bogus liability has been unearthed by the AssessingOfficer. 3. On a careful reading of the order passed by theCommissioner of Income Tax (Appeals) as well as that of theTribunal, we find that the above substantial questions of law donot arise for consideration, as what the assessee attempts to dois to call upon this Court to re-appreciate the factual position. 4. In the order passed by the Commissioner of Income Tax(Appeals), it was pointed out that the assessee was not able toexplain with proper and justifiable reasons for showing a hugeloan amount from a bank whereas the corresponding investmentsshown in the books of accounts are correct and that the assesseewas not able to explain with proper reasons the investments, forwhich, the bogus liability has been unearthed by the AssessingOfficer. 5. Before the Tribunal, the assessee took the very samestand as was taken before the Assessing Officer as well as theCommissioner of Income Tax (Appeals) by stating that therecipients had no corresponding credits in their bank accounts.This issue was examined by the Tribunal and on facts, it wasultimately found that the balance sheet of the assesseereflected investments made by the assessee in two companies,which were group companies of the assessee, namely M/s.SriPadmabalaji Steels Private Limited and M/s.Suryabalalji SteelsPrivate Limited and that these two companies were again privatelimited companies. It was further found that the assessee didnot dispute that the said two companies were subjected tostatutory audit under the Companies Act and that in theauditor's report of the assessee company, it was certified bythe Chartered Accountant that the balance sheet and profit andloss account were prepared as per the books of accounts andreflected true and correct working of the assessee company.Thus, the Tribunal held that when both the balance sheets of theassessee company and the balance sheets of the companies, inwhich, the assessee had invested, reflected the amounts ofinvestments and are correctly tallied, neither the accounts northe auditor's report could be brushed aside. Hence, the abovereferred to questions do not arise for consideration and theappeal has been filed only for re-appreciating the factualposition. The assessee has not made out any ground to entertainthe appeal. 6. Accordingly, the above tax case appeal is dismissed. Nocosts. Sd/- Assistant Registrar(CS IV) //True Copy// RS Sub Assistant Registrar To1. The Income Tax Appellate Tribunal, Chennai 'A' Bench, (Camp : Coimbatore).2. The Income Tax Officer, Corporate Ward-3, Coimbatore-18.3. The Commissioner of Income Tax(Appeals)-1, Coimbatore.+1cc to Mr.S.Sridhar, Advocate, S.R.No.92444+1cc to Mr.T.R.Senthilkumar, Advocate, S.R.No.91678TCA.No.719 of 2017PA(CO)CS/10/01/18