Revenue Has Raised The Aforementioned Substantial Questions Oflaw, Which Pertain Only To The Deletion Of The Addition Madeunder Section 68 Of The Act v. Acitreported In (2018) 407 Itr 0212 (Mad) And Decision Of The Highcourt Of Bombay In The Case Of Jivatlal Purtapshi Vs. Cit,Reported In (1967) 65 Itr

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA T.C.A.No.411 of 2020andC.M.P.No.12819 of 2020 Commissioner of Income Tax,Circle 1,Namakkal. ..AppellantVersus M/s.K.K.P.Spinning Mills Private LimitedNo.88, KKP Building,Salem Road,Namakkal 637 001PAN:AAACK 8615J ..Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal, Chennai 'D' Bench, dated 30.09.2019 made inI.T.A.No.3360/Chny/2018 relating to the Assessment Year 2014-15against the order of the Assistant Commissioner of Income Tax,circle-1,Namakkal,dated31.07.2018andmadeinITA No:E-33/2016-2017 for the Assessment year 2014-2015 andagainst the Assessment order of the Assistant Commissioner ofIncome Tax, circle-1, Namakkal, dated 29.12.2016 and made in PANNo.AAACK8615J for the Assessment year 2014-2015. For Appellant: Mr.M.Swaminathan Senior Standing counselFor Respondent : Mr.R.SivaramanJUDGMENT[Order of the Court was made by T.S.SIVAGNANAM, J.]This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), isdirected against the order dated 30.09.2019 passed by the IncomeTax Appellate Tribunal, Chennai, 'D' Bench ('the Tribunal' forbrevity) in I.T.A.No.3360/Chny/2018 for the Assessment Year2014-15. The Revenue has raised the following SubstantialQuestions of Law for consideration: https://hcservices.ecourts.gov.in/hcservices/ “1. Whether the Tribunal was right in deletingthe addition made u/s.68 by the Assessing officer whenthe assessee has not produced the Name, Address & PANof the so called parties/Commission agents during theassessment proceedings? 2. Whether the Tribunal was right in deleting theaddition made u/s.68 by the Assessing officer when theassessee has not proved the cash deposit but changedits stand that the payments were received from variousparties and commission agents when such ledgeraccounts were not maintained by the assessee?” 2. We have heard Mr.M.Swaminathan, learned Senior Standingcounsel appearing for the appellant/Revenue and Mr.R.Sivaraman,learned counsel for the respondent/assessee. 3. The assessee is a Spinning Mill, filed their return ofincome for the Assessment Year under consideration, returning atotal income of Rs.2,70,54,840/- under normal computation andhas shown deemed total income of Rs.4,02,26,800/- under Section115JB of the Act and claimed refund of Rs.56,040/-. The assesseealso declared agricultural income of Rs.3,32,690/-. The case wasselected for scrutiny and notice under Section 143(2) of the Actwas issued. During the scrutiny assessment, the assessee hadfurnished the details of the Bank Account, on perusal of whichthe Assessing Officer found cash deposits were made. Theassessee was called upon to explain such cash deposits and theystated that they received the same from the Tamil Nadu HandloomWeavers Co-operative Society, Chennai. The assessee alsofurnished further details and ultimately, the Assessing Officerheld that the assessee has failed to discharge the primary onusof substantiating the credits by submitting confirmation /ledger account copy of the Tamil Nadu Handloom Weavers Co-operative Society, Chennai and also made certain other findingsand ultimately, rejected the explanation offered by the assesseeand completed the assessment under Section 143(3) of the Act on29.12.2016, holding that a sum of Rs.6,71,19,385/- asunexplained credit under Section 68 of the Act. 4. Aggrieved by such order, the assessee preferred appeal tothe Commissioner of Income Tax (Appeals), Salem ['CIT(A)' forbrevity]. The CIT(A) called for a remand report, which wassubmitted by the Assessing Officer and after taking note of theremand report, the assessee was given partial relief and theaddition to the extent of Rs.4,42,86,754/- was deleted and theappeal was allowed in part. Aggrieved by the same, the Revenuepreferred appeal before the Tribunal, which was dismissed on theground that the Revenue's appeal is not maintainable. Thoughsuch was the finding rendered by the Tribunal, before us, the Revenue has raised the aforementioned Substantial Questions ofLaw, which pertain only to the deletion of the addition madeunder Section 68 of the Act. 5. We have elaborately heard Mr.M.Swaminathan, learnedSenior Standing counsel for the appellant / Revenue. Though theTribunal has rejected the appeal filed by the Revenue on theground of maintainability and in this regard, referred to thedecision of this Court in the case of B.Jayalakshmi Vs. ACITreported in (2018) 407 ITR 0212 (Mad) and decision of the HighCourt of Bombay in the case of Jivatlal Purtapshi Vs. CIT,reported in (1967) 65 ITR 261 and the decision of the High Courtof Mysore in the case of M.M.Annaiah Vs. CIT, reported in (1970)76 ITR 0582 and ultimately, rejected the appeal filed by theRevenue as not maintainable. 6. Before us, Mr.M.Swaminathan, learned Senior Standingcounsel appearing for the appellant / Revenue, has elaboratelyargued the question of maintainability and submitted that thedecision in the case of B.Jayalakshmi (cited supra) is onentirely different set of facts and circumstances and the samecould not have been applied to the assessee's case. As pointedout by us earlier, the Substantial Questions of Law raisedbefore us are only with regard to the deletion of the additionmade under Section 68 of the Act and technically, we are notrequired to go into the aspect, whether the appeal filed by theRevenue was maintainable before the Tribunal. With regard to thedeletion of the addition made under Section 68 of the Act, aspointed out earlier, the CIT(A) granted partial relief to theassessee. This relief was granted to the assessee based upon anelaborate remand report filed by the Assessing Officer which hasbeen extracted in the order passed by the CIT(A) dated31.07.2018. The CIT(A) / the First Appellate Authority has re-examined the entire factual position and granted relief to theassessee to the extent warranted. The assessee was not on appealas against the disallowed portion and it was only the Revenuewhich challenged the order before the Tribunal to consider thefactual scenario. We find that there is no question of law muchless Substantial Question of Law, arising for consideration inthis appeal and consequently, the appeal should fail. Withregard to the issue regarding the maintainability of the appealbefore the Tribunal, we refrain from expressing any opinion onthe said issue as in our considered opinion, it is an arguableissue and the Revenue having not raised any SubstantialQuestions of Law on the said issue, we proposed to leave thesaid question open. 7. In the result, the Tax Case Appeal is dismissed on theground that no Substantial Questions of Law as framed by theRevenue arises for consideration in this appeal. With regard to the maintainability of the appeal filed by the Revenue beforethe Tribunal, which was held to be not maintainable since thesaid issue does not arise for consideration in this appeal, weleave the question open. No costs. Consequently, connectedmiscellaneous petition is closed. Sd/- Assistant Registrar //True Copy// To Sub Assistant Registrar 7. In the result, the Tax Case Appeal is dismissed on theground that no Substantial Questions of Law as framed by theRevenue arises for consideration in this appeal. With regard to the maintainability of the appeal filed by the Revenue beforethe Tribunal, which was held to be not maintainable since thesaid issue does not arise for consideration in this appeal, weleave the question open. No costs. Consequently, connectedmiscellaneous petition is closed. Sd/- Assistant Registrar //True Copy// To Sub Assistant Registrar 1. The Income Tax Appellate Tribunal,'D' Bench, Chennai.2. The Commissioner of Income-Tax,Circle-1, Namakkal.3. The Assistant Commissioner of Income-Tax,Circle-1, Namakkal.+1cc to Mr.M.Swaminathan, Advocate, S.R.No.38568T.C.A.No.411 of 2020pa(CO)rv(20/01/2021)