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2016 (1) TMI 69 - ITAT CHENNAI

2016 (1) TMI 69 - ITAT CHENNAI - TMI - Addition on the consultancy charges paid to sister concern - CIT(A) deleted the addition - Held that:- As argued by the ld. Departmental Representative that no details are available as to why the present assessee has received the amount on behalf of the sister concern i.e. East Cost consultant from M/s. Commercial Buildwell Pvt. Limited. The facts brought on record do not suggest the reason for the same and services rendered by East Cost consultant to M/s. .....

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ue is remitted back to the Assessing Officer for fresh consideration. - Decided in favour of revenue by way of remand.

Addition being the sale of ancestral property reminded as unexplained - CIT(A) deleted the addition - Held that:- It was brought on record by the Commissioner of Income Tax (Appeals) that the assessee has received this amount from his brother Shri. P. Srinivasan as loan for which the assessee had paid interest thereon. Further, the name of the assessee's mother is typ .....

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Bank being unexplained cash deposits - CIT(A) deleted the addition - Held that:- As narrated by the Commissioner of Income Tax (Appeals) the funds transactions are duly reflected in the books of accounts of the assessee and the assessee also explained the parties from whom the funds were received. Hence, these deposits cannot be claimed as unexplained deposits. In our opinion, the findings of the Commissioner of Income Tax (Appeals) is justified and the same is confirmed. - Decided against reven .....

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0,000/- made by the Assessing Officer on the consultancy charges paid to sister concern. 3. The facts of the issue are that the assessee has claimed a payment of ₹ 15,50,000/- as consulting charges to its sister concern M/s East Coast consultants. On verification, the amount was shown to have been paid on the last day of the financial year and paid through a book entry only. During the course of assessment proceedings, the assessee was asked to clarify the cash deposits in the bank account .....

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s land advance." Hence, the assessee has taken the correct net receipts by way of consultancy charges at ₹ 67,41,080/- without including the consultancy charges received on behalf of its sister concern at ₹ 15,50,000/-. The book entry was wrongly added as consultancy Charges since the amount was collected on behalf of East Coast Consultants (P) Limited was credited in his account was reversed by passing book entry. On verifying the details filed the ld. Authorised Representative .....

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return of income filed by the assessee's sister concern. Hence, the ld.AR of assessee objected to add this amount to the consultancy charges in the case of the assessee as this amount of Rs..15,50,000/- is related to the assessee's sister concern. The AR of the assessee has also stated that the amount is collected on behalf of his sister concern from M/s. Commercial Buildwell Pvt. Limited at ₹ 22,20,960/-. The ld. Authorised Representative for assessee has produced a form No.26AS d .....

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copies of the return of income of the assessee sister concern which duly reflected the above transaction. The real transaction was that the Govindammal was a supplier of lands to East Cost consultant for the purchase of land on behalf of the assessee sister concern whereas the Assessing Officer has presumed wrongly that the amount has been paid to the assessee sister concern without getting any service rendered to the assessee. In this regard, to substantiate the claim of the assessee the AR has .....

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details are available as to why the present assessee has received the amount on behalf of the sister concern i.e. East Cost consultant from M/s. Commercial Buildwell Pvt. Limited. The facts brought on record do not suggest the reason for the same and services rendered by East Cost consultant to M/s. Commercial Buildwell Pvt. Limited. Being so, in our opinion, it requires re-examination of the issue. We are not in a position to express any opinion regarding the nature of service rendered by East .....

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7; 15,00,000/- made by the Assessing Officer being the sale of ancestral property reminded as unexplained. 6. The facts of the issue are that a sum of ₹ 15,00,000/- was found in the account of the assessee during the year on sale consideration which represents the sale proceeds of ancestral agricultural land of his brother Shri. P.Srinivasan. The ld. Authorised Representative for assessee has stated that crediting of ₹ 15,00,000/- in the account of the assessee was actually taken as .....

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e name of the assessee's brother i.e. Shri P.Srinivasan The transaction of obtaining loan at ₹ 15,00,000/- from the brother of assessee and verifiable from the bank statement from the Axis bank, the AR of assessee is of the opinion, that the AO should have verified the transaction either by summoning Shri P.Srinivasan who has given a confirmation letter on 31.03.2007 who has lend the amount of ₹ 15,00,000/- vide cheque to the assessee repayable for a period of 3 years at a simple .....

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count has already been filed by the assessee on 17.11.2009 showing the bifurcation of bank transactions in respect of SBI & Axis Bank accounts. From the statement, it was seen that the amount of ₹ 15,00,000/- was deposited with the Axis Bank and received by way of cheque . The AO should have verified the genuineness of the transaction and should have summoned the assessee's brother Shri. P. Srinivasan for verifying his capacity and credit worthiness to lend the above said amount an .....

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which the assessee had paid interest thereon. Further, the name of the assessee's mother is typed instead of assessee's brother, is only a typographical error which is to be condoned. Since the assessee's brother Shri. P. Srinivasan has confirmed the loan given to the assessee and the transaction was routed through banking channel, the identity of the lender is proved as well as the genuineness of the transaction. Accordingly, the deletion of addition made by the Commissioner of Inc .....

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,080/- received as consultancy charges. During the course of assessment proceedings, the Assessing Officer has observed that the assessee has received ₹ 36,55,200/- from M/s. Dawn Realtors Pvt. Limited and ₹ 22,20,960/- from M/s. Commercial Buildwel (P) Ltd and the remaining amount Rs..8,84,600/- from other parties. At the time of explaining the difference in gross receipts it was stated by ld. Authorised Representative for assessee that the assessee paid ₹ 15,50,000/- as consu .....

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ing TDS. The AO has observed that on examination of statement of both the bank accounts of the assessee, a lot of cash deposits were found, source of which remained unexplained. The AO has totalled the cash deposits from the Axis bank account of the assessee at Rs..35,55,580/- whereas the total amount is working out to ₹ 19,35,580/- only, as per the table given in the assessment order for the cash deposits in Axis bank starting from 07.04.2006 to 21.02.2007. But the AO has wrongly taken th .....

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/- on account of unexplained cash deposits. On verifying the details filed by the assessee as well the materials , available on record, the AO admitted that the Cash book showed the amounts deposited in bank account with SBI and Axis Bank from cash available in hand as on dates. As the AO was of the opinion that certain expenses and drawing of ₹ 25 lakhs were not reflected in cash book and if these are taken then there might be no cash balance available with the assessee at some point of t .....

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ich the addition has been separately made by the AO) have been duly reflected in the transaction account which is the Axis Bank Alc No.505 and there are substantial cash withdrawals from this account to meet expenses for both business and personal. The AR of the assessee has stated that the Assessing Officer has not given any break up for Rs..35,55,580/- while the details given in the Assessment order for cash withdrawal totaling up to only ₹ 19,35,580/-. In this amount also there are cheq .....

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oned above. Similarly, the date wise analysis of SBI deposits have been explained along with the sources thereof and on verifying the details filed by the AR of the assessee all the above transactions have been duly reflected in cash book and cash flow statement filed by the appellant. The AO has also worked out the cash deposit in SBI account of the assessee at ₹ 5,64,325/- starting from 02.05.2006 to 29.01.2007. During the course of assessment proceedings, the AO has called for details o .....

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been received from various parties as legal consultancy fee which can be easily verifiable from the said concerns and similarly the balance amount (Rs.19,35,580- ₹ 10,76,080 ) of ₹ 8,59,500/- also can be seen from the previous balances and made deposits in his accounts to meet the day today expenses whereas assessing officer has taken as cash credits and cash deposits in the assessee's accounts which are unexplained and added as cash deposits available with Axis bank account as w .....

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