R.Ramanathan, Pollachi V. ITO, Pollachi

CO 80/CHNY/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1399 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 21-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T BANUSEKAR; A B KOLI
• Keywords: Income from undisclosed sources; Corroborative evidences
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A.NO . 1686/MDS/2014 & C.O. NO.80/MDS/2014 (IN ITA NO.1686/MDS/2014) ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER, WARD-I(2), POLLACHI. VS DR.R.RAMANATHAN, 35, VENKATARAMANAN STREET, POLLACHI-642 001. PAN:AASPR2509K ( /APPELLANT) ( /RESPONDENT/CROSS OBJECTOR) / APPELLANT BY : MR. A.B.KOLI, JCIT /RESPONDENT BY : MR. T.BANUSEKAR, C.A. /DATE OF HEARING : 9 TH SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 29 TH OCTOBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THE APPEAL AND CROSS OBJECTION ARE FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE DATED 31.03.3014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE GRIEVANCE OF THE REVENUE IN ITS APPEAL IS TH AT THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THE ASSESSEES CLAIM OF ACCUMULATED SAV INGS ARE WITHOUT SUPPORTING EVIDENCE. THE CONSIDERATION FROM SALE OF PROPERTY WAS ALREADY UTILIZED FOR CONSIDERATION UND ER THE 2 ITA NO.1686/MDS/2014 & C.O. NO.80/MDS/2014 HEAD WITHDRAWAL OF BANK DEPOSITS. IT WAS FURTHER CO NTENDED THAT CASH FLOW STATEMENT WAS FILED BEFORE THE COMMI SSIONER OF INCOME TAX (APPEALS) AND HE ERRED IN NOT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER BY CALLING FOR REMAND REPORT. 3. THE ASSESSEE AN INDIVIDUAL FILED RETURN OF INCOM E ON 3.8.2010 ADMITTING INCOME OF ` 3,82,020/-. ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 29.01. 2003 DETERMINING THE INCOME OF THE ASSESSEE AT ` 31,16,717/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFI CER MADE ADDITION TOWARDS ACCUMULATED SAVINGS OF ` 21,05,000/- TREATING THEM AS UNACCOUNTED INCOME. ON EXAMINING T HE BANK STATEMENTS, RETURNS FILED FOR ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-11, THE ASSESSING OFFICER WAS OF T HE VIEW THAT ASSESSEES CLAIM FOR ACCUMULATED SAVINGS OF ` 21,05,000/- UTILIZED FOR CONSTRUCTION IS NOT SUPPOR TED BY ANY EVIDENCE. IT WAS THE CONTENTION OF THE ASSESSEE TH AT ACCUMULATED SAVINGS UTILIZED FOR CONSTRUCTION WAS B Y WAY OF WITHDRAWAL FROM BANK ACCOUNT. HOWEVER, THE ASSESSI NG OFFICER AFTER EXAMINING THE SAVINGS BANK ACCOUNT ST ATED THAT 3 ITA NO.1686/MDS/2014 & C.O. NO.80/MDS/2014 ASSESSEE HAS NO FUNDS LEFT TO CLAIM AS ACCUMULATED SAVINGS. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) ACC EPTED THE CLAIM OF THE ASSESSEE THAT THERE ARE ACCUMULAT ED SAVINGS BASED ON THE CASH FLOW STATEMENT FURNISHED BEFORE HIM WHICH WAS PREPARED BASED ON THE BALANCE SHEETS ALREADY FURNISHED BEFORE THE ASSESSING OFFICER, WHE REIN IT WAS SHOWN AND EXPLAINED THAT ACCUMULATED SAVINGS WE RE UTILIZED FOR CONSTRUCTION. 4. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT CASH FL OW STATEMENTS WERE PRODUCED BY THE ASSESSEE ONLY BEFO RE THE COMMISSIONER OF INCOME TAX (APPEALS) AND NOT BEFOR E THE ASSESSING OFFICER. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSE SSING OFFICER BY CALLING FOR REMAND REPORT. THEREFORE, H E PLEADS FOR REMANDING THE MATTER BACK TO THE FILE OF THE ASSESS ING OFFICER. 5. COUNSEL FOR THE ASSESSEE STOUTLY ARGUES THAT WHA T WAS FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL S) WAS ONLY A RECONCILIATION STATEMENT WHICH WAS PREPARED BASED ON THE BALANCE SHEETS AND PROFIT AND LOSS ACCOUNT WHIC H WERE 4 ITA NO.1686/MDS/2014 & C.O. NO.80/MDS/2014 ALREADY FURNISHED BEFORE THE ASSESSING OFFICER AND ALL THESE BALANCE SHEETS AND PROFIT AND LOSS ACCOUNTS WERE AU DITED AND IN FACT SCRUTINY ASSESSMENTS WERE COMPLETED BY THE ASSESSING OFFICER. THEREFORE, HE SUBMITS THAT ASSES SING OFFICER IS NOT JUSTIFIED IN COMING TO THE CONCLUSIO N THAT THERE IS NO ACCUMULATED SAVINGS. THUS, HE PLEADS FOR SUSTAIN ING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED T HE CLAIM OF THE ASSESSEE OBSERVING AS UNDER:- THE ONE AND ONLY INTENTION OF THE ASSESSING OFFICE R IS TO PULL UP THE TAXABLE INCOME, SOMEHOW WITHOUT ANY BASIS. THERE IS NO PROPER OPPORTUNITY WAS GIVEN TO THE APPELLANT TO GET IT CL ARIFIED THE MISCONCEIVED THOUGHTS. THE APPELLANT FILED HIS INCOME TAX RETURNS FOR THE YEAR 31-03-2008, 31-03-2009 AND 31- 03-2010 AFTER AUDIT UNDER SECTION 44AB ALONG WITH ITS ENCLO SURES. THE RETURN OF INCOME OF 31-03-2008 AND 31-03-2009 WERE ALREADY SCRUTINIZED BY THE THEN ASSESSING OFFICER. THE SOUR CES AND ITS APPLICATIONS WERE CLEARLY EXPLAINED THROUGH THE FUN CTIONAL ACCOUNTS' (REVENUE AND PROFIT AND LOSS ACCOUNT) AND BALANCE SHEETS. THE BALANCE SHEET CLEARLY CARRIED T HE SOURCES AS WELL AS THE APPLICATIONS OF INCOME AND S AVINGS. THE ASSESSING OFFICER HAS NEVER REMARKED ANY DEFICI ENCIES IN THE BALANCE SHEET. PUT IT INTO NUT SHELL, THE CASH FLOW STATEMENT (ANNEXURE A) BASED ON THE BALANCE SHEETS ALREADY FI LED BEFORE THE ASSESSING OFFICER IS NOW PRODUCED BEFORE THE K IND PERUSAL OF THE HONOURABLE' CIT WHICH CLEARLY EXPLAIN THE AC CUMULATED SAVINGS WHICH WAS UTILIZED FOR CONSTRUCTION. 5 ITA NO.1686/MDS/2014 & C.O. NO.80/MDS/2014 THE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE VIEW THAT ASSESSEE HAS ALREADY FILED RETURNS FOR THE YEA R ENDED 31.03.2008, 31.03.2009 AND 31.03.2010 AFTER AUDIT U NDER SECTION 44AB OF THE ACT. THE RETURNS WERE ALREADY SCRUTINIZED BY THE ASSESSING OFFICER. SOURCES AND I TS APPLICATIONS WERE CLEARLY EXPLAINED THROUGH FUNCT IONAL ACCOUNTS OF PROFIT AND LOSS ACCOUNT AND BALANCE SH EETS. BALANCE SHEETS CARRIED THE SOURCES AS WELL AS APPLI CATIONS OF INCOME AND SAVINGS. THE COMMISSIONER OF INCOME TAX (APPEALS) STATED THAT ASSESSING OFFICER HAS NEVER R EMARKED ANY DEFICIENCIES IN THE BALANCE SHEETS. IT WAS ALSO STATED THAT CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE IS BASED ON THE BALANCE SHEETS ALREADY FILED BEFORE THE ASSESSI NG OFFICER AND IT CLEARLY EXPLAINED ACCUMULATED SAVINGS WHICH WAS UTILIZED FOR CONSTRUCTION. IT IS THE CONTENTION OF THE ASSESSEE THAT IT IS ONLY A RECONCILIATION STATEMENT FILED B EFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CULLING OUT INFORMATION FROM THE PROFIT AND LOSS ACCOUNT AND BA LANCE SHEETS AND THERE IS NO NEW INFORMATION OR ANY FRESH EVIDENCE FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL S). NONE OF THE FINDINGS OF THE COMMISSIONER OF INCOME TAX 6 ITA NO.1686/MDS/2014 & C.O. NO.80/MDS/2014 (APPEALS) HAVE BEEN REBUTTED BY THE REVENUE TO SHOW THAT FRESH EVIDENCE WAS FURNISHED BY THE ASSESSEE AND WH AT WAS FURNISHED BY WAY OF CASH FLOW STATEMENT IS NOT FROM THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEETS. IN THE CIRCUMS TANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CO MMISSIONER OF INCOME TAX (APPEALS) IN ACCEPTING THE CLAIM OF T HE ASSESSEE AND THUS SUSTAIN THE ORDER OF THE COMMISSI ONER OF INCOME TAX (APPEALS). 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS). SINCE WE HAVE SUSTAINED THE ORDER OF THE COMMISSION ER OF INCOME TAX (APPEALS), THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE AND CRO SS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2015. SD/- SD/- ( ' ) ( % '' ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) ) / ACCOUNTANT MEMBER ' ) / JUDICIAL MEMBER ' /CHENNAI, + /DATED 29 TH OCTOBER, 2015 SOMU 7 ITA NO.1686/MDS/2014 & C.O. NO.80/MDS/2014 ./ 0/ /COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .