N.Radhakrishnan, CHENNAI V. DCIT, CHENNAI

ITA 1086/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4661 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: G BASKAR
• Keywords: Unexplained investment; Source of fund; Cost of acquisition; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.1086/MDS/2013 ASST. YEAR : 2008-09 SHRI N. RADHAKRISHNAN, 524/2. POONAMALLEE HIGH ROAD, ARUMBAKKAM, CHENNAI-600106. PAN : ADXPR0580L. (APPELLANT ) V. THE DY. COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE 4, CHENNAI. (RESPONDENT) DEPARTMENT BY : SHRI T.N, BETGERI, JCIT ASSESSEE BY : SHRI G. BASKAR, ADVOCATE DATE OF HEARING : 29 AUG 2013 DATE OF PRONOUNCEMENT : 29 AUG 2013 O R D E R PER S.S. GODARA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008-09, IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII, CHENNAI DATED 12.2.20 12, PASSED ITA 1086/MDS/2013 2 IN APPEAL NOS.127/10-11(A)-VIII, IN PROCEEDINGS UND ER SEC.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT). 2. A PERUSAL OF THE GROUNDS RAISED IN THE APPEAL M AKES IT APPARENT THAT ASSESSEES GRIEVANCE SOUGHT TO BE AGITATED IS TWO FOLDED IE. THE FIRST ONE IS THE DISALLOWANCE/A DDITION OF ` .3,18,550/- UNDER SEC.40A(3) OF THE ACT; WHEREAS TH E SECOND ONE PERTAINS TO ADDITION OF ` .21 LAKHS BEING THE CASH PAYMENT MADE BY THE ASSESSEE FOR ACQUISITION OF LAND IN QUE STION. 3. IN THE COURSE OF HEARING, THE ASSESSEE VEHEMENT LY REITERATES THE PLEADINGS AND STRONGLY ARGUES THAT T HE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING BOTH THE AFORESAID ADDITIONS MADE BY THE ASSESSING OFFICER. 4. IN REPLY, THE SUBMISSIONS OF THE REVENUE DRAW SUPPORT FROM THE FINDINGS RECORDED BY THE COMMISSIO NER OF INCOME TAX (APPEALS) CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER. ITA 1086/MDS/2013 3 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL. HE HAS PROPRIETARY LORRY TRANSPORT B USINESS BY THE NAME OF M/S. SOORYA ROAD LINES. IN THE IMPUGNED AS SESSMENT YEAR HIS RESOURCES OF INCOME INCLUDE BUSINESS, HOUS E PROPERTY AND SHORT TERM CAPITAL GAINS. ON 29.9.2008, HE HAD FILED HIS RETURN DISCLOSING TOTAL INCOME OF ` .18,25,564/-. THE SAME COMPRISED OF A SUM OF ` .17,52,659/- FROM THE PROPRIETY BUSINESS. 6. IN THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE HAD PURCHASED A PROPE RTY AT DOOR NO.2, RAJIV GANDHI STREET, ARUMBAKKAM, CHENNAI. AF TER THE FILING OF THE RETURNS, ON 10.2.2009, THE DEPARTMENT CONDUCTED A SURVEY IN THE ASSESSEES CASE. IN COURSE THEREOF , IT NOTICED THAT IN ITS BALANCE SHEET AS ON 31.3.2008, THE ASSESSEE HAD SHOWN A PAYMENT OF ` .10 LAKHS MADE BY CHEQUE AS COST OF ACQUISITION; WHEREAS, HIS RECORDS DISCLOSED THAT CASH PAYMENT OF ` .21 LAKHS ON 5 DIFFERENT OCCASIONS. ON BEING POINTED OUT, I N THE COURSE OF SURVEY ITSELF, THE ASSESSEE OFFERED THE SAID AMOUNT AS INCOME FOR THE IMPUGNED ASSESSMENT YEAR. THEREAFTER, HE FILED A REVISED ITA 1086/MDS/2013 4 RETURN DATED 9.3.2009 WITHDRAWING SOME EXPENSES FRO M HIS PROFIT AND LOSS ACCOUNT THEREBY INCREASING HIS NET PROFIT OF ABOUT ` .21 LAKHS TO EXPLAIN HIS CASH PAYMENTS AFORESAID. A PERUSAL OF THE ASSESSMENT ORDER DATED 31.12.2010 SUGGESTS THAT THE ASSESSING OFFICER REJECTED THE REVISED RETURN BY HO LDING THAT THE ASSESSEE HAD NOT PROVED ANY OMISSION OR WRONG SUBMI SSION IN THE RETURN ALREADY FILED. PROCEEDING ON THIS REA SONING, HE ADDED THE ENTIRE AMOUNT OF ` .21 LAKHS CASH AS UNEXPLAINED INVESTMENT TO HIS INCOME ALREADY DISCLOSED. AT THE SAME TIME, HE ALSO MADE A SIMULTANEOUS ADDITION OF ` .22,37,304/- QUA THE EXPENDITURE SOUGHT TO BE WITHDRAWN BY THE ASSESSEE IN THE REVISED RETURN TO JUSTIFY THE SOURCE OF UNEXPLAINED INVESTMENT (SUPRA). IT ALSO EMERGES FROM THE ASSESSMENT ORDER THAT T HE ASSESSING OFFICER INVOKED SEC.40A(3) OF THE ACT IN MAKING THE DISALLOWANCE OF ` 3,18,550/- ON THE GROUND THAT THIS HAS NOT BEEN PAID THROUGH PRESCRIBED MEANS OF ACCOUNT PAYEE CHEQ UE ETC. ITA 1086/MDS/2013 5 8. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED ALL THREE ADDITIONS IN THE ORDER UNDER CHALLENGE. THE ONLY M ODIFICATION MADE BY HIM IS THAT THE AMOUNT OF ` .22,37,304/- HAS BEEN REDUCED TO ` .21,37,304/- BY TERMING IT AS AN ARITHMETICAL ERROR . THIS LEAVES THE ASSESSEE AGGRIEVED, WHO IS IN APP EAL. 9. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE LAW. FIRST WE COME TO THE ADDITION UNDER SEC.40A(3 ) OF THE ACT. UNDISPUTEDLY, THE ASSESSEE HAD MADE THESE PAYMENTS FOR LORRY REPAIRS AND MAINTENANCE EXCEEDING ` . 20,000/- IN THE COURSE OF THE DAY BY CASH. NEITHER BEFORE THE LOWER AUTHOR ITIES NOR BEFORE US HE HAS BEEN ABLE TO PROVE AS TO IN WHAT C IRCUMSTANCES, THE SAID PAYMENTS WERE MADE IN CASH INSTEAD OF THE PRESCRIBED MEANS UNDER THE RELEVANT PROVISION IN THE STATUTE. IN THESE CIRCUMSTANCES WE SEE NO JUSTIFICATION TO INTERFERE WITH THE IMPUGNED ADDITION. THE SAME IS, THEREFORE, AFFIRMED IN ASSESSEES HANDS. ITA 1086/MDS/2013 6 10. NOW WE COME TO THE SECOND GROUND OF THE ASSESS EE REGARDING ADDITION AMOUNTING TO ` .21 LAKHS. QUA THIS ISSUE, THE RELEVANT FACTS STAND ALREADY NARRATED IN THE PREC EDING PARAGRAPHS. THE ASSESSEE HAD ADMITTED IN THE COURS E OF SURVEY TO HAVE MADE PAYMENT OF ` .21 LAKHS IN ACQUISITION OF THE PROPERTY BY CASH IN ADDITION TO ` .10 LAKHS PAID BY WAY OF CHEQUE REFLECTED IN THE BALANCE SHEET. POST SURVEY, HE RE VISED HIS RETURN. THIS TIME, HE REDUCED HIS EXPENSES IN ORDE R TO JUSTIFY THE SOURCE OF AFORESAID SUM OF ` .21 LAKHS. AS WE NOTICE FROM THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS ADDED ` .21 LAKHS AS UNEXPLAINED INVESTMENT AND ALSO ` .22,37,304/- {REDUCED BY THE COMMISSIONER OF INCOME TAX (APPEALS)} TO ` .21,37,304/- (SUPRA). THE ONLY REASON GIVEN BY THE ASSESSING OF FICER IN THE ASSESSMENT ORDER IS THAT THE WITHDRAWAL OF EXPENSES HAVE BEEN TREATED AS NOT ALLOWABLE. IN OUR VIEW, ONCE THE R EVISED RETURN ITSELF STANDS REJECTED BY THE LOWER AUTHORITIES AS INVALID, THE REVISED EXPENSES COULD NOT BE ADDED IN THE COURSE O F ASSESSMENT. FURTHER, WE ALSO OBSERVE THAT EVEN IF THE SAME IS ITA 1086/MDS/2013 7 UPHELD, IT TANTAMOUNTS TO MAKING THE SAME ADDITION TWICE IE. AS UNEXPLAINED INVESTMENTS AS WELL AS THE JUSTIFICATIO N OFFERED BY THE ASSESSEE BY WAY OF REDUCTION OF EXPENSES. THER EFORE, IN THE INTEREST OF JUSTICE AND EXERCISING OUR JURISDICTION UNDER SEC.254(2) OF THE ACT IN ORDER TO DO SUBSTANTIVE JU STICE, WE HOLD THAT THE ADDITION IN QUESTION OF ` .21,37,304/- INSTEAD OF ` .21 LAKHS MADE BY THE ASSESSING OFFICER AND AFFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) DESERVES TO BE DELETED. IN THIS MANNER, THE ASSESSEE GETS RELIEF OF ` .21,37,304/- IN THE INSTANT APPEAL. 11. CONSEQUENTLY, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, TH E 29 TH DAY OF AUGUST 2013, AT CHENNAI. SD/- SD/- ( DR. O.K. NARAYANAN ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL ME MBER CHENNAI, DATED : 29 TH AUGUST 2013 JLS. ITA 1086/MDS/2013 8 COPY TO:- (1) APPELLANT (2) RESPONDENT (3) CIT(A) CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE.