ITO, Madurai V. Miss Sherija @ Janani, Madurai

CO 147/CHNY/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8888 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-09-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 26-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S SRIDHAR
• Keywords: Unexplained investment
• Section: 143(3); 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER .. ITA NOS.1144 & 1145/MDS./2011 ASSESSMENT YEARS:2004-05 & 2005-06 & C.O.NOS.147 & 148/MDS./2011 MS.JANANI @JANARDHINI @ SHERIJA BANU, 4/1078,BHARAT STREET, ANBUNAGAR, MADURAI VS. THE INCOME TAX OFFICER,WARD 1(2), MADURAI. PAN AFZPJ 3235 N (APPELLANT) (RESPONDENT/ CROSS OBJECTOR ) APPELLANT BY : SHRI S.SRIDHAR, ADVOCATE RESPONDENT BY : SHRI SHAJI P JACOB, ADDL. CIT D.R. DATE OF HEARING : 12.09.13 DATE OF PRONOUNCEMENT : 26. 09.13 O R D E R PER S.S.GODARA,JUDICIAL MEMBER : THESE ASSESSEES APPEALS AND REVENUES CROSS OBJ ECTIONS FOR ASSESSMENT YEARS 2004-05 & 2005-06 RESPECTIVELY , ARISE FROM DIFFERENT ORDERS OF CIT(A)-I, MADURAI, BOTH DATED 1 4.03.2011, ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 2 PASSED IN ITA NOS.0213 & 214/2007-08, IN PROCEEDING S UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2. BEFORE US, AFTER REFERRING TO HER PLEADING RAIS ED IN THE GROUNDS, THE ASSESSEE VEHEMENTLY ARGUES THAT THE CI T(A) HAS ERRED IN CONFIRMING THE ADDITION OF ` 1,40,18,000/- IN HER HANDS AS UNEXPLAINED INCOME PARTLY RESTRICTING THE COST OF HYUNDAI ACCENT CAR FROM ` 6,50,000/- TO ` 3,25,000/-AS WELL AS QUA INTEREST AMOUNT OF ` 4,00,255/- TO HAVE ACCRUED ON THE UNEXPLAINED INVESTMENTS IN THE ORDER UNDER CHALLENGE. THEREAFT ER, SHE SUBMITS THAT IN THE A.Y. 2005-06 AS WELL, THE AUTHO RITIES BELOW HAVE WRONGLY ADDED THE ACCRUED INTEREST ON THE AFOR ESAID UNEXPLAINED INCOME AMOUNTING TO ` 7,46,880/- AND PRAYS FOR ACCEPTANCE OF BOTH THE APPEALS. 3. THE REVENUE HAS CHOSEN TO SUPPORT THE ORDER OF THE CIT(A) SO FAR AS THE ASSESSEES APPEALS ARE CONCERNED. AT THE SAME TIME, IT CONTENDS THAT IN BOTH THE ASSESSMENT YEARS , THE CIT(A) HAS FAILED TO NOTE THAT THE ISSUE OF INTEREST UNDER SECTION 220(2) DID NOT ARISE IN THE ASSESSMENT ORDER AND STILL, T HE SAME HAS BEEN WRONGLY ADJUDICATED UPON IN THE LOWER APPELLAT E PROCEEDINGS. ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 3 4. IN REVENUES CROSS OBJECTIONS, THE ASSESSEE HA S SUBMITTED THAT THE CIT(A) IS DULY EMPOWERED TO DECIDE ALL QUE STIONS INCLUDING THAT OF INTEREST UNDER SECTION 220(2) OF THE ACT AND PRAYS FOR REJECTION THEREOF. 5. WE HAVE HEARD BOTH THE PARTIES AT LENGTH AND GO NE THROUGH THE CASE FILES OF BOTH ASSESSMENT YEARS. SIMILARL Y, THE COMMON JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT (MAD URAI BENCH) IN CRIMINAL APPEAL (MD) NO.320 OF 2006 AND CRL. R.C.(M D) NOS.76 & 77 OF 2008 DATED 16.02.2010 PLACED ON RECORD BY T HE REVENUE HAS BEEN PERUSED. 6. IT IS TO BE SEEN FROM THE CASE FILE THAT THE LIS HAS EMANATED FROM A CRIMINAL CASE CRIME NO.186 OF 2003 REGISTER ED UNDER SECTION 18 C READ WITH 20(B)(II)(C) OF THE NARCOTI C DRUGS AND PSYCHOTROPIC SUBSTANCES ACT (IN SHORT NDPS ACT). IT IS EVIDENT TO US THAT FROM THE JUDGEMENT OF HONBLE HIGH COURT THAT ON 10.07.03, THE ASSESSEE ALONG WITH ONE CASE K.SATISH WAS APPREHENDED IN A HYUNDAI ACCENT CAR WITH 5 KGS OF GANJA AND 10 LAKHS CASH AMOUNT AT MADURAI. ON HER ALLEGED DISC LOSURE STATEMENT, THE POLICE RECOVERED TOTAL CASH OF ` 1,40,18,000/-, ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 4 GANJA WEIGHING 30 KGS AS WELL AS 21 SOVEREIGN OF GOLD. BEING AN NDPS CASE, THE TRIAL COMMENCED BEFORE THE LD. SPE CIAL COURT AT MADURAI. IN COURSE THEREOF, THE DEPARTMENT MOVED A PETITION UNDER SECTION 132A OF THE ACT SEEKING CUSTODY OF TH E CASH RECOVERED BY PLEADING THEREIN THAT THE SAME ATTRA CTED THE PROVISIONS OF THE INCOME TAX ACT, 1961. THE ASSES SEE WOULD OPPOSE THE REVENUES PETITION BEFORE THE LD. SPECI AL COURT BY CONTENDING THAT THE MONEY WAS GIVEN TO HER BY ONE SHRI JAGADESH RAJA. ON 05.06.2006, LD. SPECIAL COURT ACQUITTED THE ASSESSEE FROM THE CHARGE OF HAVING POSSESSED THE C ONTRABAND. IT ALSO DECIDED THE ISSUE OF CUSTODY OF THE SEIZED CASH AGAINST THE DEPARTMENT. THEREAFTER, THE DEPARTMENT ISSUED A NOTICE UNDER SECTION 148 OF THE ACT TO THE ASSESSEE ON 13 .06.06. IN RESPONSE, THEREOF, THE ASSESSEE FILED HER RETURN O N 21.07.06 DECLARING INCOME OF ` NIL. 7. IN THE COURSE OF SCRUTINY, ON BEING ASKED ABO UT THE CASH AMOUNT RECOVERED, THE ASSESSEE WOULD REITERATE HER STAND AS TAKEN BEFORE LD. SPECIAL COURT THAT THE SAME BELONG ED TO ONE JAGADESH RAJA. THE ASSESSING OFFICER SUMMONED SAID PERSON, WHO STATED THAT THE MONEY WAS OF ONE SHRI RAVI CHO PRA, AN AUDITOR, IN NEW DELHI, PAID FOR PURCHASING SOME LA NDS. A PERUSAL ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 5 OF THE ASSESSMENT ORDER DATED 28.12.07 REVEALS THAT THE ASSESSING OFFICER HAD GOT EXAMINED SHRI RAVI CHOPRA THROUGH DDIT(INVESTIGATION), NEW DELHI. BASED ON ALL THESE FACTS, HE CAME TO CONCLUSION THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF THE MONEY IN QUESTION, AND ADDED THE ENTI RE CASH RECOVERED OF ` 1,40,18,000/- AS UNEXPLAINED INVESTMENT. SIMILARLY, THE COST OF HYUNDAI ACCENT CAR(SUPRA) OF ` 6,50,000/- ,COST OF 30KG. OF GANJA OF ` 1,05,000/- AS WELL AS INTEREST ACCRUED ON THE UNEXPLAINED INVESTMENT TOTALING TO ` 4,00,255/- ALSO STOOD ADDED IN THE ASSESSEES TOTAL INCOME. THIS LED TH E TOTAL INCOME COMPUTED TO ` 1,51,73,255/-. COMING TO ASSESSMENT YEAR 2005-06, WE FIND THAT T HE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 28.12 .07 PROCEEDED TO ADD INTEREST ACCRUED ON UNEXPLAINED INVESTMENT (SUPRA) OF ` 7,46,880/- IN ASSESSEES INCOME. 8. AGGRIEVED, THE ASSESSEE PREFERRED APPEALS IN B OTH THE ASSESSMENT YEARS BEFORE THE CIT(A). IT IS NOT DISP UTED THAT THE CRIMINAL CASE IN QUESTION REACHED THE HONBLE HIGH COURT(SUPRA). THEREIN, THREE CASES WERE FILED. AGAINST THE ASSESS EES ACQUITTAL FOR HAVING POSSESSED THE CONTRABAND, THE PROSECUTIO N DID NOT ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 6 PURSUE THE MATTER FURTHER. THE DEPARTMENT RAISED ITS GRIEVANCE IN CRIMINAL APPEAL NO.320 OF 2006 QUA CUSTODY OF THE MONEY SEIZED. ON THE OTHER HAND, THE ASSESSEE FILED RE VISIONS NO.76- 77 SEEKING RETURN OF THE PROPERTY SEIZED IN THE CRI MINAL CASE FIR. WE FIND FROM THE JUDGEMENT (SUPRA) THAT THE HONBLE HIGH COURT HAS DECIDED THE SAME AS UNDER:- 17. ADMITTEDLY, THE AMOUNT OF RS.1,40,16,000/- WA S SEIZED FROM THE 1 ST AND 2 ND RESPONDENTS. THEY WOULD ADMIT THAT THE MONEY DOES NOT BELONG TO THEM . THE 3 RD RESPONDENT HAS FILED AN APPLICATION STATING THAT TH E MONEY BELONGED TO ONE RAVI CHOPRA AND THE SAME WAS HANDED OVER THROUGH HIM TO THE FIRST RESPONDENT IN ORDER T O INVEST IN LANDS. THE SAID RAVI CHOPRA HAS NOT COME FORWARD TO FILE AN APPLICATION FOR RETURN OF MONEY. THEREFORE, OBV IOUSLY THE HUGE AMOUNT HAULED REPRESENT UNDISCLOSED INCOM E. THE SAID MONEY SEIZED ONLY FROM THE FIRST AND SECON D RESPONDENTS. THE SAID JAGEDESH RAJA NAMELY THE TH IRD RESPONDENT HAS NOT FILED ANY DOCUMENT TO SHOW THAT HE HAD RECEIVED THE MONEY FROM THE SAID RAVI CHOPRA F OR INVESTING IN LAND. UNFORTUNATELY, THE TRIAL COURT HAS BELIEVED THE VERSION OF THE THIRD RESPONDENT THOUG H HE HAD NOT PRODUCED ANY EVIDENCE. UNFORTUNATELY THE TRIAL COURT HAS CALLED UPON THE DEPARTMENT TO DISPROVE THAT THE MONEY DOES NOT BELONG TO RS. THERE IS NO EVIDENCE TO SH OW THT THERE IS A PERSON IN THE NAME OF RAVI CHOPRA, WHO I S A ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 7 CHARTED ACCOUNTANT AT DELHI AND HE HAS GIVEN MORE T HAN A CRORES OF RUPEES TO THIRD RESPONDENT FOR INVESTMEN T IN WASTE LAND AND THE SAME WAS GIVEN TO A 21 YEAR OLD YOUNG GIRL FOR SAFE CUSTODY. NEITHER SHE CLAIMS OWNERSHI P NOR THE SAID JAGEDESH RAJA CLAIMS OWNERSHIP BUT BOTH OF THE M WANT MONEY TO BE RETURNED TO THEM. IN ANY EVENT, I T HAS TO BE CONSTRUED THAT THE MONEY BELONGED TO THE FIRST A ND SECOND RESPONDENTS AS THE SAME HAS BEEN SEIZED ONLY FROM THEM. 18. THE DEPARTMENT CANNOT CLAIM THAT THE ENTIRE SEIZED AMOUNT TO BE RETURNED TO THEM AND EVEN ACCOR DING TO THEM THE CUSTODY WAS CLAIMED ONLY FOR INVESTIGAT ION AND ASSESSMENT OF TAX. PENDING APPEAL THE INCOME OFFIC ER OF MADURAI, HAD FILED A CALCULATION MEMO IN RESPECT OF THE TAX ASSESSMENT OF THE FIRST RESPONDENT. ASSESSMENT OF THE YEAR 2004-05 ` TOTAL INCOME ASSESSED : 1,51,73,255 INCOME TAX THEREON : 45,25,990 ADD.S.C. : 4,52,599 TOTAL : 49,76,589 ADD: INTEREST UNDER SECTION 234A FOR BELATED FILING OF RETURN : 11,65,055 ADD: INTEREST UNDER SECTION 234B FOR NON PAYMENT ADVANCE TAX : 22,50,235 TOTAL TAX & INTEREST PAYABLE : 83,83,969 INTEREST FOR NON PAYMENT OF TAX UNDER SECTION 220(2) UPTO JAN 2009 : 10,06,076 TOTAL TAX & INTEREST PAYABLE : 93,90,045 ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 8 ASSESSMENT OF THE YEAR 2005-06 TOTAL INCOME ASSESSED : 7,46,880 INCOME TAX THEREON : 1,98,064 EDU. CESS @ 2% : 3,962 TOTAL : 2,02,026/- ADD. ADD: INTEREST UNDER SECTION 234A FOR BELATED FILING OF RETURN : 24,242 ADD: INTEREST UNDER SECTION 234B FOR NON PAYMENT ADVANCE TAX : 66,666 TOTAL TAX & INTEREST PAYABLE : 2,92,934 INTEREST FOR NON PAYMENT OF TAX UNDER SECTION 220(2) UPTO JAN 2009 : 35,152 TOTAL TAX & INTEREST PAYABLE : 3,28,086 19. ACCORDING TO THE DEPARTMENT, A SUM OF RS.93,90,045/- AND RS.3,28,086/- DUE AS TAX FOR THE SEIZED AMOUNT. IN MY CONSIDERED VIEW, THE DEPART MENT IS ENTITLED FOR TAX ON THE MONEY SEIZED FROM THE FI RST AND SECOND RESPONDENT S. THEREFORE, A SUM OF RS.97,18, 131/- IS ORDERED TO BE PAID TO THE INCOME TAX DEPARTMENT OF MADURAI TOWARDS THE TAX PAYABLE BY THE FIRST RESPON DENT FOR THE ASSESSMENT YEAR 2004-05. WHILE CALCULATING THE TAX, INTEREST UPTO JANUARY, 2009, WAS CALCULATED. THE INTEREST FROM FEBRUARY 2009 TO MARCH 2010 IS DUE AN D PAYABLE. ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 9 20. AS FAR AS THE OTHER VALUABLES NAMELY, THE CAR BEARING REG. NO.TN59/W-09, THE JEWELS OF 21 SOVEREI GN AND OTHER VALUABLES ORDERED TO BE RETURNED TO THE FIRST RESPONDENT ARE CONCERNED, THE FIRST RESPONDENT IS ENTITLED FOR THOSE VALUABLES AS MENTIONED IN THE JUDGEMENT D ATED 05.06.2006. SINCE THE HONBLE HIGH COURT HAD DECIDED THE ISSUE OF CUSTODY OF THE CASH ETC. DURING THE PENDENCY OF TH E APPEALS BEFORE THE CIT(A), A REMAND REPORT WAS CALLED FROM THE ASSESSING OFFICER, WHO SUPPORTED THE IMPUGNED ADDITIONS. THE REAFTER, THE CIT(A) HAS PASSED THE IMPUGNED ORDERS REJECTING THE ASSESSEES CONTENTIONS QUA THE UNEXPLAINED INVESTMENTS, INTERE ST ACCRUED THEREUPON AGAINST THE ASSESSEE, WHEREAS THE ISSUE O F COST OF CAR IN QUESTION HAS BEEN PARTLY ACCEPTED IN ASSESSEES FAVOUR. IT ALSO TRANSPIRES FROM THE CIT(A)S ORDER THAT ON THE BAS IS OF THE REMAND REPORT, THE CIT(A) HAS DECIDED THE QUESTION OF INTEREST UNDER SECTION 220(2) AGAINST THE DEPARTMENT. IN THIS BACKDROP, BOTH THE PARTIES ARE AGGRIEVED. THE ASSESSEE HAS PREFERRED APPEALS IN THE TWO ASSESSM ENT YEARS IN QUESTION, WHEREAS THE REVENUE HAS FILED CROSS OBJEC TIONS. ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 10 9. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO T HE PLEADINGS OF THE PARTIES, WE FIND THAT THE FIRST QUESTION WHICH ARISES FOR OUR CONSIDERATION IS AS TO WHETHER THE LOWER AUTHORITIE S HAVE RIGHTLY TAXED THE ENTIRE CASH SEIZED IN THE ASSESSEES HAND S OR NOT. THERE IS HARDLY ANY ISSUE BETWEEN THE PARTIES THAT THE ENTIRE CASH AMOUNT WAS NOT SEIZED FROM THE ASSESSEE ALONE. AS OBSERVED BY THE HONBLE HIGH COURT IN PARA NO.17 REPRODUCED HER EIN ABOVE, THE MONEY HAS BEEN SEIZED FROM THE ASSESSEE AS WELL AS HER MOTHER BY THE NAME OF SMT.RAMEZA. THEREAFTER, THE HONBLE HIGH COURT HOLDS THAT THE MONEY SEIZED IS ENTITLED TO BE TAXED FROM THE FIRST AND SECOND RESPONDENTS. (PARA-19 OF THE ORDER). ADM ITTEDLY, SMT. RAMEZA TURNS OUT TO RESPONDENT NO.2 IN THE JUDGEMEN T. IN THESE CIRCUMSTANCES, IN OUR VIEW, THE LOWER AUTHORITIES H AVE NOT PROCEEDED ON CORRECT APPRECIATION OF FACTS IN ASSES SING THE ENTIRE CASH AMOUNT IN ASSESSEES HANDS. THEREFORE, THE MA TTER IS REQUIRED TO BE SENT BACK TO THE ASSESSING OFFICER T O PROCEED AFRESH IN ACCORDANCE WITH LAW. THE OTHER GROUNDS I N THE APPEALS AS WELL AS CROSS OBJECTIONS SHALL ALSO BE DECIDED A FRESH ALONG WITH THE MAIN ISSUE. SO, THE APPEALS AS WELL AS CRO SS OBJECTIONS STAND REMITTED BACK TO THE ASSESSING AUTHORITY. ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 11 10. IN THE RESULT, THE APPEALS AS WELL AS CROSS OB JECTIONS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 26 TH SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (ABRAHAM P GEORGE) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED 26 TH SEPTEMBER, 2013 . K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. NOS.1144 & 1145 /MDS/11 CO NOS.147 & 148/MDSS/11 12