G.Malini v. The Assistant Commissioner of Income-tax, Circle IV, Chennai
[Citation -2014-LL-1201-19]

Citation 2014-LL-1201-19
Appellant Name G.Malini
Respondent Name The Assistant Commissioner of Income-tax, Circle IV, Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 01/12/2014
Judgment View Judgment
Keyword Tags agricultural income • cash book
Bot Summary: The Tribunal dismissed the appeal holding that the assessee has not shown any material to controvert the findings of the Assessing Officer. Learned counsel appearing for the appellant submits that the Tribunal has not considered the fact that as per Section 68 of the Income Tax Act, the burden of the assessee shall stand discharged the moment the assessee proves the identity of their creditors. With regard to the labour charges is concerned, the assessee had met the entire expenditure towards labour charges in cash and the assessee had not produced any vouchers to prove the genuineness of the expenditure claimed. The Assessing Officer made addition of Rs.1.00 lakh out of Rs.17,28,696/- claimed by the assessee. With regard to the addition made under Section 68 of the Income Tax Act in respect of unsecured loans, it is seen from the order of the Assessing Officer that the assessee had proved the creditworthiness of majority of lenders except 19 persons, from whom the assessee had borrowed funds. The Assessing Officer allowed the claim in part and denied the rest, as the assessee did not prove the creditworthiness of the 19 persons. Even though the assessee had shown the identity of 19 persons, the Assessing Officer held that they are not income tax assessees and they are only name lenders.


In High Court of Judicature at Madras Dated: 01.12.2014 Coram Honourable Mr.JUSTICE R.SUDHAKAR and Honourable Mr.JUSTICE R.KARUPPIAH Tax Case (Appeal) No.1002 of 2014 Smt.G.Malini No.49, Sri Venkatesa Perumal Nagar, Arumbakkam, Chennai 600 106.Appellant Vs. Assistant Commissioner of Income Tax Circle IV, Chennai 34. Respondent APPEAL under Section 260A of Income Tax Act against order dated 24.10.2013 made in I.T.A.No.1465/Mds/2013 on file of Income Tax Appellate Tribunal, Chennai 'C' Bench. For Appellant: Mr.R.Sivaraman For Respondent: Mr.M.Swaminathan Standing Counsel for Income Tax JUDGMENT (Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by assessee as against order of Income Tax Appellate Tribunal raising following substantial questions of law: 2 1. Whether on facts and in circumstances of case, Appellate Tribunal was right in law in confirming addition of Rs.1,00,000/- towards estimated inflation of labour charges? 2. Whether on facts and in circumstances of case, Appellate Tribunal was right in holding that appellant had accepted to said additions at time of assessment, even though specific ground was raised before CIT (Appeals) that only concession was granted? 3. Whether on facts and in circumstances of case, Appellate Tribunal is right in law in confirming addition of Rs.3,14,800/- under Section 68 of Act, even though appellant has discharged her burden by proving details of persons from whom she had taken loans? 2. assessment in this case relates to assessment year 2006-07. assessee is engaged in business of manufacture of bitumen products and felts. assessee is also engaged in business of contracts for purchase of materials, wherein she incurs labour expenses. assessee filed her return of income for assessment year in question declaring her income as Rs.4,73,836/- and agricultural income at Rs.5,99,400/-. On perusal of records, Assessing Officer was of view that assessee had inflated labour expenses and hence, added sum of Rs.1.00 lakh. Assessing Officer also found that assessee had shown in her balance sheet unsecured loans from friends and relatives to tune of Rs.11,76,342/-. loans were ranging between 3 Rs.15,000/- to Rs.19,000/-. Hence, assessee was asked to submit list of loan creditors along with addresses. parties from whom loans were taken had submitted confirmation letters stating that loan has been given for business purposes. assessee was asked to prove creditworthiness of parties and assesee was able to prove creditworthiness of majority of lenders except 19 persons and that amounted to Rs.3,14,800/-. Hence, Assessing Officer made addition of same under Section 68 of Income Tax Act. Aggrieved by order of Assessing Officer, assessee filed appeal before Commissioner of Income Tax (Appeals), who confirmed findings of Assessing Officer. Aggrieved by same, assessee preferred further appeal before Income Tax Appellate Tribunal. Tribunal dismissed appeal holding that assessee has not shown any material to controvert findings of Assessing Officer. As against said order of Tribunal, assessee is before this Court. 3. Learned counsel appearing for appellant submits that Tribunal has not considered fact that as per Section 68 of Income Tax Act, burden of assessee shall stand discharged moment assessee proves identity of their creditors. Hence, order of Tribunal may be set aside. 4 4. Heard learned counsel appearing for appellant and perused materials placed before this Court. 5. We find no merits in this appeal. issue involved in this appeal is in respect of additions made towards inflated labour charges and unproved cash credits. With regard to labour charges is concerned, assessee had met entire expenditure towards labour charges in cash and assessee had not produced any vouchers to prove genuineness of expenditure claimed. Hence, Assessing Officer made addition of Rs.1.00 lakh out of Rs.17,28,696/- claimed by assessee. It is seen from assessment order that assessee had also accepted same at time of assessment. Hence, Tribunal is correct in confirming addition made by Assessing Officer. 6. With regard to addition made under Section 68 of Income Tax Act in respect of unsecured loans, it is seen from order of Assessing Officer that assessee had proved creditworthiness of majority of lenders except 19 persons, from whom assessee had borrowed funds. Assessing Officer allowed claim in part and denied rest, as assessee did not prove creditworthiness of 19 persons. Even though assessee had shown identity of 19 persons, Assessing Officer held that they are not income tax assessees and they are only name lenders. assessee is able to prove creditworthiness 5 of majority of lenders, but there is no material to prove creditworthiness of remaining persons. We find that after considering explanation submitted by various lenders enclosing cash book indicating date of lending, Assessing Officer allowed claim in part. In respect of persons who have not shown any material to prove genuineness of loan given, Assessing Officer declined to grant benefit. Hence, Tribunal confirmed order of Assessing Officer. We find no infirmity in order of Tribunal, which is based on facts not rebutted. 7. We hold that issue raised is pure question of fact. We find no question of law much less any substantial question of law arises for consideration in this appeal. Accordingly, this Tax Case (Appeal) stands dismissed. No costs. Index :Yes/No (R.S.,J) (R.K.,J) Internet:Yes/No 01.12.2014 sl To 1. Income Tax Appellate Tribunal, Chennai 'C' Bench. 2. Commissioner of Income Tax (Appeals), VIII, Chennai. 3. Assistant Commissioner of Income Tax, Circle IV, Chennai-34. R.SUDHAKAR,J. AND R.KARUPPIAH,J. Sl T.C.(A) No.1002 of 2014 01.12.2014 G.Malini v. Assistant Commissioner of Income-tax, Circle IV, Chennai
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