R.Anantha Padmanaban, CHENNAI V. ITO Buss Ward XIII, CHENNAI

ITA 10/CHNY/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6211 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 06-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-01-2013
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: P V RAVIK UMAR
• Keywords: Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 10/MDS/2013 / ASSESSMENT YEAR : 2009-10 SHRI R.ANANTHA PADMANABAN, NO.B-45, FIRST MAIN ROAD, THIRUVANGADA NAGAR, AMBATTUR, CHENNAI-600 053 [PAN: ABVPP 5834 B] ( !% /APPELLANT) VS THE INCOME TAX OFFICER, BUSINESS WARD-XIII(I), CHENNAI-600 034 ( &'!% /RESPONDENT) / APPELLANT BY : SHRI P.V.RAVI KUMAR, ADVOCATE / RESPONDENT BY : SHRI S.DAS GUPTA, JCIT / DATE OF HEARING : 06-02-2014 ! / DATE OF PRONOUNCEMENT : 09-04-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-XII, CHENNAI, D ATED 17-09-2012 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 9-10. THE I.T.A. NO. 10/MDS/2013 2 ASSESSEE IS A CHARTERED ACCOUNTANT BY PROFESSION. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY.2009-10 ON 18 -07-2009 DECLARING HIS TOTAL INCOME AS ` 2,44,629/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 23-08-2010. DURING THE C OURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER SOUGHT E XPLANATION IN RESPECT OF CASH DEPOSIT OF ` 57,51,000/- IN THE BANK ACCOUNTS MAINTAINED WITH PUNJAB NATIONAL BANK, AMBATTUR AND IDBI BANK, AMBATTUR. THE ASSESSEE EXPLAINED THAT THE CASH DE POSITS ARE SALE PROCEEDS OF LAND WHICH WAS INHERITED BY THE AS SESSEE FROM HIS FATHER. NOT SATISFIED WITH THE EXPLANATION FUR NISHED, THE ASSESSING OFFICER MADE ADDITION OF THE SAID AMOUNT AS UN-EXPLAINED CASH CREDIT U/S.68. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 28-12- 2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APP EALS). THE CIT(APPEALS) VIDE IMPUGNED ORDER CONFIRMED THE FIND INGS OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE. THE CIT(APPEALS) HELD THE DEPOSITS IN BANK AS UN-EXPLAI NED INVESTMENTS U/S.69 OF THE ACT. NOW, THE ASSESSEE H AS COME IN I.T.A. NO. 10/MDS/2013 3 SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF CIT(APPEALS). 2. SHRI P.V.RAVI KUMAR, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD INHERITED AGRICULTU RAL LAND MEASURING 4.14 ACRES SITUATED AT KONDAMPALAYAM VILL AGE BY WAY OF REGISTERED WILL DT. 13-11-1999 EXECUTED BY HIS F ATHER. THE SAID PROPERTY HAD JOINTLY DEVOLVED UPON THE ASSESSEE AND HIS BROTHER SHRI R.VASUDEVAN. THE BROTHER OF THE ASSESSEE GAVE POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE TO DEAL WITH THE PROPERTY. THE ENTIRE AGRICULTURAL LAND MEASURING 4.14 ACRES WAS S OLD BY THE ASSESSEE TO M/S.SRIGURU EDUCATIONAL TRUST FOR A CON SIDERATION OF ` 65,16,500/-. THE PART OF SALE CONSIDERATION I.E., ` 57,50,000/- WAS PAID BY THE VENDEE ON 04-10-2008 BY CASH AND REMAIN ING AMOUNT OF ` 7,66,500/- WAS PAID BY WAY OF DD. THE ENTIRE SALE PROCEEDS WERE DEPOSITED BY THE ASSESSEE IN HIS BANK. ` 30.00 LAKHS WAS DEPOSITED ON 11-10-2008 IN IDBI BANK, ` 20.00 LAKHS WAS DEPOSITED ON 13-10-2008 IN PUNJAB NATIONAL BANK AND THE REMAINING AMOUNT OF ` 7,50,000/- WAS DEPOSITED IN PUNJAB NATIONAL BANK ON 14-10-2008. THE SALE DEED WAS EXECUTED IN FAVOUR OF THE VENDEE ON 13-10-2008. PRIOR TO THE EXECUTION O F THE SALE DEED, THE AGREEMENT OF SALE WAS EXECUTED BETWEEN TH E PARTIES ON I.T.A. NO. 10/MDS/2013 4 04-10-2008 WHEREIN THE SALE CONSIDERATION HAS BEEN MENTIONED AS ` 65,16,500/-. HOWEVER, ON THE REQUEST OF THE VENDEE , TO REDUCE THE INCIDENCE OF REGISTRATION CHARGES, THE SALE DEE D WAS EXECUTED FOR THE LESSER AMOUNT I.E., ` 7,66,500/-. THE ASSESSEE HAD ISSUED RECEIPT, ACKNOWLEDGING THE RECEIPT OF ` 57,50,000/- FROM VENDEE IN CASH. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED TH AT THE PROXIMITY OF THE DATES OF EXECUTION OF THE SALE DEE D AND THE DEPOSIT OF THE AMOUNTS IN THE BANK WOULD SHOW THAT THE CASH AMOUNTS ARE RELATED TO THE SALE PROCEEDS OF THE LAN D. IN ORDER TO SUPPORT HIS SUBMISSIONS, THE LD.COUNSEL HAS FILED P APER BOOK CONTAINING VALUATION REPORT DATED 23-08-2008, SALE AGREEMENT DT.04-10-2008. RECEIPT DT.04-10-2008, BANK STATEME NTS AND SALE DEED DT.13-10-2008. THE LD.COUNSEL FURTHER SUBMITT ED THAT THE ASSESSEE HAS NO OTHER SOURCE OF INCOME EXCEPT THE S ALE PROCEEDS OF LAND. THE LD.COUNSEL CONTENDED THAT MR. D.SOMAS UNDARAM, WHO HAS EXECUTED THE AGREEMENT OF SALE ON BEHALF OF THE VENDEE- TRUST AND SALE DEED HAS DENIED THE EXECUTION OF AGR EEMENT TO SELL. SUFFICIENT OPPORTUNITY WAS NOT AFFORDED TO T HE ASSESSEE TO CROSS-EXAMINE HIM. THE ASSESSING OFFICER HAD ALSO ISSUED SUMMONS TO THE ATTESTING WITNESSING TO THE SALE DEE D BUT THEIR STATEMENTS WERE NOT RECORDED BY THE ASSESSING OFFIC ER. I.T.A. NO. 10/MDS/2013 5 3. ON THE OTHER HAND, SHRI S.DAS GUPTA, APPEARING O N BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF THE A UTHORITIES BELOW AND PRAYED FOR THE DISMISSAL OF THE APPEAL OF THE ASSESSEE. THE LD.DR SUBMITTED THAT THE VALUATION REPORT DATED 23-08-2008 WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSI NG OFFICER. THERE IS NO REFERENCE OF NATURE OF LAND IN THE SAID REPORT AND THE DESCRIPTION OF THE PROPERTY IN THE SALE DEED AND TH E VALUATION REPORT DO NOT MATCH. EVEN THE BASIS OF VALUATION O F PROPERTY IS NOT MENTIONED IN THE REPORT. THEREFORE, RELIANCE CANNOT BE PLACED ON THE SAID REPORT. THE LD.DR FURTHER SUBMITTED THAT AGREEMENT OF SALE DT.04-10-2008 WHEREIN THE SALE CONSIDERATION H AS BEEN MENTIONED AS ` 65,16,500/- IS AN UN-REGISTERED DOCUMENT. THE ORIGINAL DOCUMENT HAS NOT BEEN PRODUCED BY THE ASSE SSEE BEFORE AND THE PHOTO COPY OF THE DOCUMENT CANNOT BE ADMITT ED IN EVIDENCE. THE RECEIPT FOR ` 57,50,000/- AT PAGE NOS.12 TO 13 OF THE PAPER BOOK IS OF NO RELEVANCE AS THEY ARE SELF-CREA TED DOCUMENTS. THE VALUE OF PROPERTY HAS BEEN MENTIONED AS ` 7,66,500/- IN SALE DEED PAID BY WAY OF DD DT.11-10-2008. THE LD.DR CON TENDED THAT THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE IN S UPPORT OF HIS CONTENTIONS ARE SELF-SERVING DOCUMENTS. THE LD.DR POINTED OUT THAT SHRI D.SOMASUNDARAM WHO WAS CALLED FOR CROSS-E XAMINATION I.T.A. NO. 10/MDS/2013 6 AT THE REQUEST OF THE ASSESSEE HAS NOT SUPPORTED TH E CASE OF THE ASSESSEE. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DOCU MENTS ON WHICH THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE IN SUPPORT OF HIS CONTENTIONS. THE ONLY ISSUE IN APPEAL IS THE N ATURE OF BANK DEPOSITS POINTED OUT BY ASSESSING OFFICER. THE ASS ESSEE HAD DEPOSITED A SUM OF ` 57,51,000/- IN HIS BANK ACCOUNTS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE. THE ASSE SSEE EXPLAINED THE SOURCE OF SAID AMOUNT AS PART OF SALE PROCEEDS OF THE LAND INHERITED BY HIM FROM HIS FATHER. IN THE SALE DEED, THE SALE CONSIDERATION IS MENTIONED AS ` 7,66,500/-. THEREFORE, ASSESSING OFFICER AND CIT(APPEALS) REJECTED THE EXP LANATION FORWARDED BY ASSESSEE. THE ASSESSEE IN ORDER TO SU PPORT HIS CONTENTIONS HAS PLACED ON RECORD VALUATION REPORT W HEREIN THE COST OF LAND HAS BEEN ESTIMATED AS ` 66,24,000/-, AGREEMENT OF SALE DT.04-10-2008 BETWEEN THE ASSESSEE AND THE REP RESENTATIVE OF THE VENDEE-TRUST WHEREIN THE SALE CONSIDERATION HAS BEEN STATED AS ` 65,16,500/-. THE ASSESSEE HAS ALSO PLACED ON RECOR D I.T.A. NO. 10/MDS/2013 7 RECEIPT DT.04-10-2008 ACKNOWLEDING THE RECEIPT OF ` 57,50,000/- IN CASH FROM THE VENDEE-TRUST. ON THE OTHER HAND, THE REVENUE HAS PLACED RELIANCE ON THE REGISTERED SALE DEED AND THE STATEMENTS OF THE WITN ESSES OF THE ASSESSEE, ACCORDING TO WHICH THE SALE CONSIDERATION IS ` 7,66,500/- AND NOT ` 65,16,500/- AS ALLEGED BY THE ASSESSEE. WE FIND TH AT THE ASSESSEE HAS DEPOSITED CASH ` 30.00 LAKHS IN IDBI BANK ACCOUNT ON 11-10-2008, ` 20.00 LAKHS IN CASH ON 13-10-2008 IN PUNJAB NATIONAL BANK AND ANOTHER SUM OF ` 7,50,000/- IN PUNJAB NATIONAL BANK ON 14-10-2008. IF WE GO BY THE THEORY OF PRE PONDERANCE OF PROBABILITIES THEN IT IS QUITE POSSIBLE THAT THE A MOUNTS DEPOSITED IN THE BANK ARE THE SALE PROCEEDS OF THE LAND SOLD BY THE ASSESSEE. THE PROXIMITY OF SALE TRANSACTION AND THE DATES OF DEPOSIT OF THE CASH IN BANK STRONGLY TILT THE SCALE IN FAVOUR OF T HE ASSESSEE. FURTHER, THE REVENUE HAS NOT DISPUTED THAT THE ASSE SSEE HAS NO OTHER SOURCE OF INCOME. 5. BUT, ANCHOR OF THE ARGUMENT OF REVENUE IS THAT T HE VENDEE WAS EXAMINED BY THE ASSESSING OFFICER, WHO DID NOT SUPPORT THE CASE OF THE ASSESSEE. BUT IT IS TO BE SEEN THAT SU CH AN ATTITUDE ADOPTED BY THE VENDEE MIGHT SERVE HIS OWN INTEREST. THE VENDEE I.T.A. NO. 10/MDS/2013 8 MIGHT HAVE TAKEN MUCH CARE TO DENY BEFORE THE ASSES SING OFFICER THAT HE PAID ANYTHING MORE THAN STATED IN THE SALE DEED; LEST, THE FINGER MIGHT BE POINTED OUT AGAINST HIM REGARDING T HE SOURCE OF SUCH INVESTMENT. THEREFORE, THE DENIAL OF VENDEE C ANNOT BE LEAD AGAINST THE ASSESSEE, AS THE SAID DENIAL WAS ONLY A DENIAL MADE BY AN INTERESTED WITNESS. 6. THE FACTS OF THE CASE CANNOT BE OVERLOOKED. THE ASSESSEE HAS SUBMITTED A VALUATION REPORT DATED 23.8.2008 BY WHICH IT WAS ALMOST IMPOSSIBLE TO PURCHASE THE SAID PROPERTY FOR A SUM OF ` 7,66,500/-. ON THE OTHER HAND, THE CONSIDERATION S TATED TO BE RECEIVED BY THE ASSESSEE SEEMS TO BE ON THE FAIR SI DE. THE VALUE OF THE PROPERTY SOLD BY THE ASSESSEE; PROXIMITY BE TWEEN THE SALE AND BANK DEPOSITS; ALL PUT TOGETHER, MAKE OUT A RE ASONABLE CASE THAT THE DEPOSITS MADE BY THE ASSESSEE COULD BE OUT OF THE SALE PROCEEDS OF HIS PROPERTY. IN SIMILAR PERSONAL TRAN SACTIONS AND PERSONAL CONDUCTS, A PLAUSIBLE EXPLANATION IS ALWAY S AN EVIDENCE, WHEN SUPPORTED BY PREPONDERANCE OF PROBABILITY. TH EREFORE, WE FIND THAT THE APPEAL OF THE ASSESSEE NEEDS TO BE AL LOWED. WE HOLD THAT THE BANK DEPOSITS QUESTIONED BY THE ASSESSING OFFICER COULD BE MADE BY THE ASSESSEE OUT OF THE SALE PROCEEDS OF THE PROPERTY AND AS SUCH, THOSE DEPOSITS CANNOT BE TREATED AS UN EXPLAINED I.T.A. NO. 10/MDS/2013 9 INVESTMENT. THEREFORE, THE ADDITION IS NOT SUSTAIN ABLE AND THE SAME IS DELETED. 7. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON WEDNESDAY, THE 09 TH APRIL, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIKAS AWASTH Y) ( . . . ) ( ! ) '#$ / VICE PRESIDENT % &' / JUDICIAL MEMBER (% /CHENNAI, )& /DATED: 09 TH APRIL, 2014 TNMM &* +,-, /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. ./0 /CIT(A) 4. . /CIT 5. ,12 3 /DR 6. 245 /GF