Appeal details
Counselvise Citation
[2017] 119 COUNSELVISE.COM (IT) 3437 (ITAT-COCHIN)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
12-09-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2000-2001
Appeal Filed On
11-08-2017
Judgement Text
ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH (SMC) KOCHI BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO S 148 TO 151/COCH/2017 ( ASST YEAR S 1997 - 98 TO 2000 - 01 ) & CROSS OBJECTIONS NO 17 TO 20/COCH/2017 THE INCOME TAX OFFICER WARD 2(3) THRIS SUR VS SHRI P RADHAKRISHNA MENON THEKKEMADAM ROAD THRISSUR ( APPELLANT /RESPONDENT ) (RESPONDENT /CROSS OBJECTOR ) PAN NO. ABTPM8861B ASSESSEE BY SH T JOHN GEORGE REVENUE BY SH A DHANARAJ, SR DR DATE OF HEARING 12 TH SEPT 2017 DATE OF PRONOUNCEMENT 12 TH , SEPT 2017 ORDER PER GEORGE GEORGE K,JM: THESE APPEALS AT THE INSTANCE OF THE REVENUE AND THE CROSS OBJECTIONS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER O F THE CIT(A) DATED 17.2.2017. THE RELEVANT ASSESSMENT YEARS ARE 1997 - 98 TO 2000 - 01. 2 THERE IS A DELAY OF 11 DAYS IN FILING THE CROSS OBJECTIONS. THE ASSESSEE HAS FILED A PETITION FOR CONDONING THE DELAY IN FILING THE CROSS OBJECTIONS. ON PERUSAL OF THE PETITION, I AM OF THE VIEW THAT THERE CANNOT BE ANY LATCHES ATTR IBUTED TO THE ASSESSEE FOR FILING THE CROSS OBJECTIONS BELATEDLY BY 11 DAYS. THEREFORE, I CONDONE THE DELAY OF ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 11 DAYS IN FILING THE CROSS OBJECTIONS AND TAKE U P FOR ADJUDICATION THE APPEALS AND THE CROSS OBJECTIONS ON MERITS. 3 GROUNDS RAISED IN THE APPE ALS ARE IDENTICAL EXCEPT FOR VARIANCE IN FIGURES. THE GROUND RAIDS FOR THE ASSESSMENT YEAR 1997 - 98 READ AS FOLLOWS: 1. THE LEARNED CORNMLSSLONER (APPEALS), THRISSUR HAS ERRED IN DELETING THE ADDITION OF RS.~9,691/ - BEING INTEREST OF FIXED DEPOSIT IN A FORE IGN BANK AT DUBAI MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME IN ASSESSMENT ORDER. 2. THE LEARNED COMMISSIONER (APPEALS), THRISSUR HAS FAILFD TO ACKNOWLEDGE THE FACT THAT THE ASSESSING OFFICER MADE THE ADDITION AS ASSESSEE FAILED TO DISCLOSE THE FA CT OF HAVING A FOREIGN ACCOUNT AND DID NOT SHOW THE AMOUNT OF INTEREST RECEIVED ON THIS FIDUCIARY DEPOSIT IN HIS BANK ACCOUNT. 4. 'THE LEARNED COMMISSIONER (APPEALS), THRISSUR HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY AGREEMENT BETWEEN HIMSELF AND SHRI VIPIN CHANDRAN, TO WHOM THE ASSESSEE CLAIMS TO HAVE TRANSFERRED THE FIXED DEPOSIT. 5. THE LEARNED COMMISSIONER (APPEALS), THRISSUR HAS ALSO FAILED TO APPRECIATE THE FACT THAT SHRI VIPIN CHANDRAN DID NOT CARE TO TRA NSFER THE ACCOUNT TO HIS NAME IF SUCH AN AGREEMENT EXISTED .. 6. THE LEARNED COMMISSIONER (APPEALS), THRISSUR FAILED TO TAKE NOTICE OF THE FACT THAT BY ASSESSEE'S OWN ADMISSION THE ACCOUNT WAS TRANSFERRED TO SHRI VIPIN CHANDRAN ONLY IN THE YEAR 2001 AND THE ASSESSEE WAS LEGALLY IN RECEIPT OF THE INTEREST TILL THEN. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE C IT (A), THRISSUR MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED 4 BRIEF FACTS OF THE C ASE ARE AS FOLLOWS: THE ASSESSEE IS A SENIOR CITIZEN, AGED 74 YEARS. HE WAS IN DUBAI FROM THE YEAR 1968 TILL 1985. FOR THE ASSESSMENT YEARS 1997 - 98 TO 2000 - 01, THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON THE RESPECTIVE DUE DATES. THE ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE WAS MAINTAINING ACCOUNT IN FOREIGN BANK NAMELY ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 HONGKONG & SANGHAI BUSINESS CORPORATION (HSBC BANK), DUBAI AND THE DETAILS OF INTEREST RECEIVED ON THIS BANK ACCOUNT WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED BY TH E ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 AS PER PROVISIONS OF SECTION 149(1)(C ) OF THE I T ACT. IN PURSUANCE OF THE NOTICE ISSUED U/S 148, THE ASSESSEE FILED RETURN OF INCOME , WHICH ARE DETAILED BELOW: ASST YEAR DATE OF FILING OF RETURN RETURNED INCOME (RS) 1997 - 98 25.4.2014 89,480 1998 - 99 14.8.2014 1,48,688 1999 - 2000 14.8.2014 66,911 2000 - 2001 14.8.2014 59,098 4.1 IN THE REASSESSMENT PROCEEDINGS, IT WAS INTIMATED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAD DEPOSITED 12500 US $ WITH BRITISH BANK OF MIDDLE EAST BANK IN THE YEAR 198 4 (BRITISH BANK OF MIDDLE EAST MERGED WITH HSBC B ANK). IT WAS STATED THAT SINCE THE ASSESSEE WANTED TO RETURN TO INDIA IN THE YEAR 1985, HE APPROACHED THE BANK FOR CLOSURE/ENCASHMENT OF THE AMOUNT DEPOSITED IN THE YEAR 1984. IT WAS INFORMED BY THE BANK TO THE ASSESSEE THAT IN THE EVENT OF ENCASHMENT/FORECLOSURE, A SUBSTANTIAL PORTION OF THE FIXED DEPOSIT WOULD BE LOST ON ACCOUNT OF PRE - CLOSURE CHARGES. ACCORDING TO THE ASSESSEE, HE APPROACHED HIS F RIEND SHRI VIPIN CHANDRA N , WHO GAVE HIM EQUIVALENT AMOUNT OF RS. 12500 US $ IN UAE DIRHAMS AND THE POWER OF ATTORNEY FOR OWNERSHIP OF FD WITH HSBC BANK WAS ASSIGNED TO SHRI VIPIN CHANDRAN. IT WAS STATED THAT IN THE YEAR 2001, THE FD AMOUNT DEPOSITED IN T HE YEAR 1984 HAD MATURED AND PRINCIPAL AND THE INTEREST AMOUNT TOGETHER WAS TAKEN BY SHRI VIPIN CHANDRAN FROM HSBC BANK. ALT HOUGH, TH ESE SUBMISSIONS WERE MADE BEFORE THE ASSESSING OFFICER, SINCE ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 IT WAS NOT AUTHENTICATED BY THE HSBC BANK, THE ASSESSING OFFI CER TREATED THE INTEREST INCOME ON DEPOSITS OF 12500 US$ AS ASSESSEES INCOME FROM OTHER SOURCES FOR THE ASSESSMENT YEAR 1997 - 98 TO 2000 - 01, WHICH ARE DETAILED BELOW : ASST YEAR ADDITION 1997 - 98 59,691 1998 - 99 7 0,062 1999 - 2000 80,126 2000 - 2001 87,525 5 AGGRIEVED BY THE ORDERS OF ASSESSMENT FOR THE ASSESSMENT YEARS 1997 - 98 TO 2000 - 01, THE ASSESSEE PREFERRED APPEALS TO THE FIRST APPELLATE AUTHORITY. BEF ORE THE FIRST APPELLATE AUTHORITY , THE ASSESSEE WAS SUCCESSFUL IN GETTING THE BANK STATEMENT AND A LETTER SPECIFICALLY STATING THAT THE AMOUNT OF 12500 US$ WAS DEPOSITED IN THE YEAR 1984 AND THE SAME WAS RENEWED YEAR AFTER YEAR TILL IT WAS CLOSED IN THE YE AR 2001. ON PRODUCTION OF FRESH EVIDENCE, THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER VIDE HIS LETTER DATED 24.6.2016 SUBMITTED THE REMAND REPORT, WHICH I S REPRODUCED IN ITS ENTIRETY AT PARA 9 OF THE IMPUGNED ORDER OF THE CIT(A). THE CIT(A), ON EXAMINATION OF THE REMAND REPORT AND THE MATERIAL AVAILABLE ON RECORD, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND ALLOWED THE APPEALS FOR THE ASSESSMENT YEARS 1997 - 98 TO 2000 - 01. 6 THE REVENUE BEING AGGRIEVED HAS FILED THE PRESENT APPEALS BEFORE THIS TRIBUNAL. THE LD DR RELIED ON THE GROUNDS RAISED IN THE MEMORANDUM OF APPEALS. ON THE OTHER HAND, THE LD AR REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES AND RELIED ON THE FINDINGS/CONCLUSION OF T HE CIT(A). ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 7 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSING OFFICER IN HIS REMAND REPORT DATED 24.6.2016 HAS MADE THE FOLLOWING REMARKS : FROM THE BANK STATEMENT IT IS CLEAR THAT THE APPELLANT HAS N OT RECEIVED ANY PRO CEEDS OUT OF THIS DEPOSIT, WHETHER THE PRINCIPAL AMOUNT OR THE INTEREST. ALL THE MONEY RECEIVED WAS BY SHRI VIPIN CHANDRAN TO WHOM THE DEPOSIT WAS ASSIGNED IN 1985 HENCE, THE ASSESSEE CLAIM APPEARS TO BE CORRECT AND THE SUM OF USD 32,042 AND ITS INTEREST NEED NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE APPEAL MAY PLEASE BE CONSIDERED ON MERIT. 7.1 FROM THE ABOVE, IT IS EVIDENT THAT THE INTEREST AND PRINCIPLE ON FD WAS NOT RECEIVED BY THE ASSESSEE BUT BY SHRI VIPIN CHANDRAN. WHEN THE ASSESSING OFFICER IN HIS REMAND REPORT HAS CATEGORICALLY STATED SO , THE REVENUE OUGHT NOT TO HAVE FILED THESE APPEALS. THAT APART, CIT(A), INDEPENDENT OF THE REMAND REPORT, EXAMINED THE ISSUE IN DETAIL AND HAS ENTERED A CATEGORICAL FINDING THAT INTEREST INCOME PLUS PRINCIPAL WAS EN - CASHED BY SHRI VIPIN CHANDRAN AND ASSESSEE WAS NOT A BENEFICIARY TO IT. THE RELEVANT FINDINGS OF THE CIT(A) READ AS FOLLOWS: 10. I HAVE GONE THROUGH THE ASSESSMENT ORDER, GROUNDS OF APPEAL AND STATEMENT OF FACTS FIL ED ALONG WITH THE APPEAL MEMO, ORAL AND WRITTEN SUBMISSIONS MADE BY THE APPELLANT AND THE AR, THE DOCUMENTS THE APPELLANT HAS RECEIVED FROM HSBC BANK DURING THE APPEAL PROCEEDINGS AND ALSO THE REMAND REPORT FROM THE ASSESSING OFFICER. THE FACTS ARISING OUT OF THESE MATERIALS ARE SUMMARIZED AS UNDER: 10.1 THE APPELLANT WAS WORKING AS AN ACCOUNTANT IN A COMPANY CALLED GULF AGENCY COMPANY (DUBAI) PRIVATE LIMITED AT DUBAI TILL 1985. HE RECEIVED AN INSURANCE CLAIM FROM NORVITCH UNION INSURANCE COMPANY IN 1984 AND OUT OF WHICH HE DEPOSITED 12500 USD IN THE ACCOUNT OF BRITISH BANK OF MIDDLE EAST, DUBAI IN THE SAME YEAR. HIS CURRENT ACCOUNT NUMBER WAS 10972582 AND THE CLIENT NUMBER IS 5094138874 IN THAT BANK. WITHIN ONE YEAR HE HAD TO LEAVE DUBAI ON ACCOUNT OF HIS PROBLEMS WITH THE EMPLOYER AND HE DECIDED TO RETURN TO HIS NATIVE PLACE I.E. THRISSUR IN KERALA. WHEN HE APPROACHED THE DUBAI BRANCH OF BRITISH BANK OF MIDDLE EAST FOR ENCASHMENT OF HIS DEPOSIT HE WAS INTIMATED THAT HE WILL LOSE A SUBSTANTIAL AMOUNT ON AC COUNT OF FORE - CLOSURE OF THE DEPOSIT ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 AS PRE - CLOSURE. WHEN HE DISCUSSED THE ISSUE WITH HIS FRIENDS, ONE SHRI VIPIN CHINDRAN WHO WAS A FRIEND AND A COLLEAGUE AT THE SAME OFFICE CAME TO HIS RESCUE BY GIVING HIM THE EQUIVALENT AMOUNT OF 12500 USD IN UAE DIRHAM S. IN LIEU OF THIS, THE APPELLANT ASSIGNED FULL RIGHTS OF THIS DEPOSIT OF 12500 DOLLARS IN BRITISH BANK OF MIDDLE EAST TO SHRI VIPIN CHANDRAN. IN THE YEAR 1985, THE APPELLANT RETURNED TO THRISSUR (KERALA) AND THE AMOUNT RECEIVED FROM SHRI VIPIN CHANDRAN WA S USED FOR PURCHASE OF HOUSEHOLD ARTICLES. 10.2 EVEN THOUGH THE APPELLANT HAS GIVEN THE ASSIGNMENT DOCUMENTS OF THE ABOVE BANK ACCOUNT TO SHRI VIPIN CHANDRAN, HE DID NOT TRANSFER THE ACCOUNT TO HIS NAME TILL THE MATURITY OF THE DEPOSIT. THE DEPOSIT ACCOU NT WAS RENEWED TILL 2001 AND ON FINAL MATURITY THE PROCEEDS OF THE DEPOSIT ALONG WITH INTEREST - AMOUNT WERE TRANSFERRED TO SHRI VIPIN CHANDRAN'S ACCOUNT THIS IS CLEAR FROM, THE STATEMENT OF ACCOUNTS OF HSBC BANK WHICH IS REPRODUCED IN THE REMAND REPORT. 1 0.3 THE DOCUMENTS PROVIDED BY THE APPELLANT NOW, WHICH HE RECEIVED FROM HSBC BANK, MAKE IT CLEAR THAT THIS ACCOUNT IS A CONTINUATION OF ORIGINAL DEPOSIT MADE IN 1984. HENCE I ACCEPT THE STATEMENT OF THE APPELLANT THAT THE DEPOSIT PERTAINS TO PRIOR PERIOD I .E. 1984 AND HENCE IT CANNOT BE TAXED UNDER THE PROVISIONS OF SECTION 149(1 )(C). ALSO IT IS VERY CLEAR THAT THE INTEREST ON THIS BANK ACCOUNT HAS BEEN RECEIVED BY SHRI VIPIN CHANDRAN WHO WAS ASSIGNED THIS DEPOSIT IN 1985. 11. FROM THE DOCUMENTS PROVIDED REGARDING THIS BANK ACCOUNT, IT IS VERY CLEAR THAT THE ORIGINAL DEPOSIT IS OF 1984 AND HENCE IT CANNOT BE TAXED UNDER SECTION 147 READ WITH PROVISIONS OF SECTION 149(1)(C ) OF THE INCOME TAX ACT. ALSO AS IT IS CLEAR THAT THE INTEREST INCOME IS RECEIVED BY SHRI VIPIN CHANDRAN IT CANNOT BE TAXED IN THE NAME OF THE APPELLANT. THEREFORE, I HEREBY DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITIONS MADE IN ALL THE 4 ASSESSMENT YEARS ON ACCOUNT OF INTEREST RECEIVED FROM HSBC BANK, DUBAI. 12. IN THE RESULT, ALL THE 4 APPEALS ARE ALLOWED. 7. 2 THE REVENUE HAS NOT BEEN ABLE TO DIS - SPELL THE ABOVE CATEGORICAL FINDINGS OF THE CIT(A) WITH ANY DOCUMENTARY EVIDENCE, HENCE, I AM OF THE VIEW THAT THE ORDER OF THE CIT(A) DOES NOT REQUIRE ANY INTERFERENCE. MOREOVER , NOTICE U/S 148 WAS ISSUED ON 31.3.2014 WHEREAS THE HSBC BANK HAS TRANSFERRED THE IMPUGNED AMOUNT OF 33042 US$ TO SHRI VIPIN CHANDRAN ON 18.9.2000 AND 30.4.2001(VIDE ASSESSING OFFICERS REMAND REPORT DATED 24.6.2016). THEREFORE, THE AMOUNT IN QUESTION W AS TRANSFERRED TO SHRI VIPIN CHANDRAN, ALMOST 14 YEARS BEFORE THE ISSUE OF NOTICE U/S 148 OF THE ACT AND THIS PROVES THE BONA - FIDE OF THE ASSESSEES CLAIM THAT THE AMOUNT WAS ASSIGNED TO SHRI ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 VIPIN CHANDRAN BEFORE HE CAME BACK FROM DUBAI IN THE YEAR 1985 FOR SETTLING DOWN IN KERALA. FOR THE AFORESAID REASONING, I AM OF THE OPINION THAT THE ORDER OF THE CIT(A) IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDINGLY, CROSS OBJECTIONS: 8 THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ESSENTIALLY SUPPORTING THE ORDER OF THE CIT(A) . SINCE THE REVENUES APPEALS ARE REJECTED THE GROUNDS RAISED IN THE CROSS OBJECTIONS HAVE BECOME INFRUCTUOUS AND THE SAME ARE DISMISSED AS SUCH. 9 TO SUM - UP, THE APPEALS FILED BY THE REVENU E AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF SEPT 2017. SD/ - - GEORGE GEORGE K JUDICIAL MEMBER COCHIN: DATED 12 TH SEPT 2017 RAJ* ITA NO. 148 TO 151/C/17 & CO S 17 TO 20/C/2017 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN
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