A.Kamaraj, CHENNAI V. ITO, CHENNAI

ITA 1028/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4075 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SREENIVASAN JICIT D R
• Assessee Lawyers: R VISWANATHAN
• Keywords: Reopening of assessment; Gift; Tangible material; Reason to believe
• Section: 143(3); 147

Judgement Text

, A/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NOS.1025,1026,1027 & 1028 /MDS./2017 ( ASSESSMENT YEARS : 2006-07,2007-08, 2008-09 & 2009-10) MR.A.KAMRAJ, 23/6, EASWARI APARTMENT, BEACH HOME AVENUE, BESANT NAGAR, CHENNAI-90. VS. INCOME TAX OFFICER, SALARY WARD IV(4), CHENNAI 600 034. PAN AHCPK 1945 M ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.R.VISWANATHAN, FCA / RESPONDENT BY : MR.V.SREENIVASAN, JICIT, D.R ! ' / DATE OF HEARING : 22.06.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 10.07.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: ALL THESE FOUR APPEALS ARE FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX(A)-4, CHENNAI, PASSED UNDER SECTION 143(3) R.W. S. 147 OF THE ACT ITA NOS. 1025 TO 1027/MDS/2017 2 FOR THE ASSESSMENT YEARS 2006-07,2007-08, 2008-09 & 2009-10. SINCE ISSUES INVOLVED IN ALL THESE ASSESSEES APPEA LS ARE COMMON IN NATURE, THESE APPEALS ARE CLUBBED TOGETHER, HEARD T OGETHER, DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E. 2. THE FIRST COMMON GROUND IN THESE FOUR APPEALS I S WITH REGARD TO REOPENING OF ASSESSMENT WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS BAD IN LAW AS THERE IS NO FRESH TANGIBLE MATERIAL AVAILABLE IN THE HANDS OF AO TO RE-OPEN TH E ASSESSMENT. 3. A.Y 2006-07 : NOTICE U/S.148 WAS ISSUED ON 12.09.2011 I.E. AFTE R THE FOUR YEARS FROM THE END OF THE RELEVANT TO ASSESSMENT YE AR. THE ASSESSMENT WAS REOPENED ON THE REASON THAT ASSESSE E HAS NOT DISCLOSED CERTAIN CASH DEPOSITS INTO BANK ACCOUNT A ND THERE WAS NO ASSESSMENT U/S.143(3) OF THE ACT FOR ASSESSMENT YE AR 2006-07. THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT, SINCE THERE WAS NO ORIGINAL ASSESSMENT U/S.143(3) OF THE ACT, FIRST P ROVISO TO SEC.147 ITA NOS. 1025 TO 1027/MDS/2017 3 WOULD NOT COME TO HELP OF THE ASSESSEE. ACCORDINGLY , THIS GROUND RAISED BY THE ASSESSEE IN A.Y 2006-07 STANDS DISMIS SED. 4. A.Y 2007-08 : THE RE-ASSESSMENT NOTICE WAS ISSUED DATED 08.09.2 011, WHICH IS WITHIN FOUR YEARS OF END OF THE RELEVANT ASSESSM ENT YEAR. BEING SO, THERE IS A REASON TO BELIEVE THAT INCOME ESCAPED FR OM THE ASSESSMENT AS THE ASSESSEE HAS NOT SHOWN THE BANK DEPOSITS AND RE-ASSESSMENT IS VALID. 5. A.Y 2008-09 : THE RE-ASSESSMENT WAS RE-OPENED ON 08.09.2011, WH ICH IS WITHIN FOUR YEARS OF END OF THE RELEVANT ASSESSMENT YEAR. BEING SO, THERE IS A REASON TO BELIEVE THAT INCOME ESCAPED FR OM THE ASSESSMENT AS THE ASSESSEE HAS NOT SHOWN THE BANK DEPOSITS AND RE-ASSESSMENT IS VALID. 6. A.Y 2009-10: THE RE-ASSESSMENT NOTICE WAS ISSUED ON 08.09.2011 , WHICH IS WITHIN FOUR YEARS OF END OF THE RELEVANT ASSESSMENT YEAR. BEING SO, THERE IS A REASON TO BELIEVE THAT INCOME ESCAPED FR OM THE ITA NOS. 1025 TO 1027/MDS/2017 4 ASSESSMENT AS THE ASSESSEE HAS NOT SHOWN THE BANK DEPOSITS AND RE-ASSESSMENT IS VALID. 7. HENCE, THE RE-OPENING IS CONFIRMED FOR ALL THES E FOUR YEARS. 8. ON MERITS, ALL THESE ASSESSMENT YEARS, THE ASSE SSEE IS CHALLENGING THE ADDITION MADE TOWARDS UNEXPLAINED D EPOSITS IN THE BANK ACCOUNT AND ALSO GIFT RECEIVED FROM VARIOUS PA RTIES. LD.A.R SUBMITTED THAT THE CASH FLOW FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES IS SELF-EXPLANATORY AND DUE CREDIT TO B E GIVEN TO THE SOURCE EXPLAINED IN THE CASH FLOW STATEMENT. IT IS ALSO SU BMITTED THAT THE AO CANNOT ADD BOTH THE SOURCE AND ITS APPLICATION AS I NCOME OF ASSESSEE, WHICH IS A DOUBLE ADDITION. 9. ON THE OTHER HAND, LD.D.R RELIED ON THE ORDER O F CIT(A). 10. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THESE ASSESSMENT YEARS, THE AO MADE ADDI TION TOWARDS CASH DEPOSITS INTO BANK ACCOUNT AS THE SOURCE IS NO T EXPLAINED. WHENEVER ASSESSEE DEPOSITS ANY CASH OR CHEQUE TO TH E BANK, IT IS INCUMBENT ON THE PART OF ASSESSEE TO EXPLAIN THE SO URCE FROM WHICH IT IS DEPOSITED. IN THE PRESENT CASE, THE ASSESSEE FA ILED TO DO SO. ITA NOS. 1025 TO 1027/MDS/2017 5 BEFORE US ALSO, ASSESSEE DID NOT PLACE ANY IOTA OF EVIDENCE TO THE SOURCE OF DEPOSITS. BEING SO, I AM NOT IN A POSITI ON TO APPRECIATE THE ARGUMENT OF THE LD.A.R. 11. REGARDING GIFT RECEIVED FROM THE SPOUSE OF THE ASSESSEE, LD.A.R SUBMITTED THAT THE ASSESSEE RECEIVED THE GIF T FROM THE ASSESSEES SPOUSE AND IT IS TO BE DELETED. THE ASS ESSEE RECEIVED RS.2 LAKHS IN THE ASSESSMENT YEAR 2006-07; RS.1 LAK H IN 2007-08; RS.5,50,000/- IN ASSESSMENT YEAR 2008-09; AND RS.3 LAKHS IN 2009-10. THE ASSESSEE HAS NOT EXPLAINED THE CAPACI TY FO THE ASSESSEES SPOUSE TO ADVANCE THE MONEY TO THE ASSES SEES SPOUSE. HAVING CAPACITY TO GIFT THIS AMOUNT, THEN IT CANNOT BE CONSIDERED AS UNEXPLAINED IN THE HANDS OF ASSESSEE. BEING SO, IN THE INTEREST OF JUSTICE, THE ISSUE IS REMITTED TO THE FILE OF AO W ITH A DIRECTION TO ASSESSEE TO FURNISH THE DETAILS OF HER PAN, HER INC OME RETURN AND DETAILS OF CASH FLOW STATEMENT TO MAKE GIFT TO THE ASSESSEE AND THE AO SHALL CONSIDER IT AND DECIDE IN ACCORDANCE WITH LAW. 12. THE OTHER ARGUMENT OF THE LD.A.R IS THAT THE A O HAD MADE ADDITION BOTH SOURCES OF FUND AND ITS APPLICATION AS UNEXPLAINED INCOME OF THE ASSESSEE. IN MY OPINION, THIS LEADS TO DOUBLE ADDITION ITA NOS. 1025 TO 1027/MDS/2017 6 AND THE AO SHALL LIMIT EITHER OF THEM AND IF THE S OURCE NOT EXPLAINED AND FOUND TO BE UNEXPLAINED, THEN IT IS TO BE CONSI DERED AS UNEXPLAINED INCOME AND THEREAFTER, ITS APPLICATION CANNOT BE BROUGHT TO TAX. WITH THIS OBSERVATION, THE ISSUE IN DISPUT E IS REMITTED TO THE FILE OF AO FOR FRESH CONSIDERATION. 13. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASS ESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY , 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOU NTANT MEMBER CHENNAI, DATED THE 10 TH JULY, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF