A.M.Venkatesan, Erode V. ITO, Erode

ITA 1114/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9472 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 12-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT KUMAR VARMA
• Assessee Lawyers: T VASUDEVAN
• Keywords: Gift
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. 1114/MDS/2015 ( )( / ASSESSMENT YEAR : 2010-11 SHRI A.M. VENKATESAN, NO.21, VAIRAM STREET, MUNICIPAL COLONY, ERODE 4. PAN : ABQPV 2751 G V. THE INCOME TAX OFFICER, WARD II(4), ERODE. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI AJIT KUMAR VARMA, CIT 1 / 2% / DATE OF HEARING : 28.03.2016 3') / 2% / DATE OF PRONOUNCEMENT : 22.04.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-2, COIMBAT ORE, DATED 06.03.2015, PASSED UNDER SECTION 263 OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') AND PERTAINS TO ASSESSMENT YEA R 2010-11. 2 I.T.A. NO.1114/MDS/15 2. SHRI T. VASUDEVAN, THE LD. COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE PRINCIPAL COMMISSIONER EXCEEDING HIS POWER UNDER SECTION 263 OF THE ACT, FOUND THAT THERE WAS A CASH DEPOSIT IN THE BANK ACCOUNT TO THE EXTENT OF ` 66,25,000/-. REFERRING TO THE ASSESSMENT ORDER, THE LD. COUNSEL SUBMITTED THAT TH E CASH DEPOSIT FOR THE YEAR UNDER CONSIDERATION WAS EXAMINED BY TH E ASSESSING OFFICER AFTER CALLING FOR EXPLANATION OF THE ASSESS EE. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT OUT OF ` 66,25,000/- DEPOSITED IN THE BANK ACCOUNT, A SUM OF ` 50,500/- WAS RECEIVED BY THE ASSESSEE FROM HIS BLOOD RELATIVES AND ANOTHER S UM OF ` 7,50,000/- WAS RECEIVED AS HAND LOAN. THE ASSESSEE HAS ALSO FILED THE DETAILS OF THE PERSONS FROM WHOM THE GIFT S WERE RECEIVED AND OTHER INFORMATION LIKE PAN CARD, RATION CARD AN D ACKNOWLEDGEMENT FOR FILING OF RETURN OF INCOME, ETC . THE ASSESSEE HAS ALSO DEPOSITED THE AMOUNT IN THE BANK. THE ASS ESSING OFFICER, AFTER VERIFYING THE CONFIRMATION FILED BY THE ASSES SEE, FOUND THAT THE GIFTS TO THE EXTENT OF ` 50,00,000/- WERE GENUINE. THE ASSESSING OFFICER AFTER ENQUIRY FOUND THAT THE GIFT TO THE EX TENT OF ` 8,00,000/- WAS NOT GENUINE, ACCORDINGLY, SHE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE PRINCIPAL COMMISSIONER , HOWEVER, FOUND THAT THE ASSESSING OFFICER HAS NOT COLLECTED COPY OF LEDGER 3 I.T.A. NO.1114/MDS/15 ACCOUNT OF THE COMPANIES IN WHICH THE ASSESSEE WAS THE MANAGING DIRECTOR. THE ASSESSING OFFICER ALSO HAS NOT CONSI DERED THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. THE PRI NCIPAL COMMISSIONER HAS ALSO FOUND IN PARA 3.2 OF HIS ORDE R THAT THE PERSONS FROM WHOM THE GIFTS WERE RECEIVED BY THE AS SESSEE ARE RELATIVES OTHER THAN ONE SMT. S. DEIVAYANAKI. 3. REFERRING TO THE OBSERVATION MADE BY THE PRINCIP AL COMMISSIONER AT PARA 3.5, THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSING OFFICER AFTER MAKING P ROPER ENQUIRY IN RESPECT OF EACH AND EVERY GIFT RECEIVED BY THE ASSE SSEE AND THE LOAN RECEIVED FROM THE PERSONS, ALLOWED THE CLAIM O F THE ASSESSEE, EXCEPT A SUM OF ` 8,00,000/-. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE PRINCIPAL COMMISSIONER IS NOT JUSTIFIE D IN SAYING THAT THE ASSESSING OFFICER ACCEPTED THE CLAIM OF THE ASS ESSEE WITHOUT NECESSARY ENQUIRY. IN FACT, NECESSARY ENQUIRY WAS MADE WHICH WAS REFLECTED IN THE ASSESSMENT ORDER ITSELF. IN THE A BSENCE OF ANY MATERIAL THAT THE GIFT RECEIVED BY THE ASSESSEE IS BOGUS, ACCORDING TO THE LD. COUNSEL, FURTHER INVESTIGATION DIRECTED BY THE PRINCIPAL COMMISSIONER IS BEYOND HIS JURISDICTION. THE PRINC IPAL COMMISSIONER IN THE GUISE OF EXERCISING HIS REVISIO NAL POWER, 4 I.T.A. NO.1114/MDS/15 CANNOT ORDER FOR FRESH ENQUIRY. SINCE NO MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE GIFTS RECEIVED BY THE AS SESSEE WERE BOGUS, THE PRINCIPAL COMMISSIONER CANNOT EXERCISE H IS REVISIONAL POWER ON THE GROUND THAT THE ASSESSING OFFICER HAS NOT MADE ANY NECESSARY ENQUIRY. 4. ON THE CONTRARY, SHRI AJIT KUMAR VARMA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HE RECEIVED ` 50,50,000/- AS GIFT FROM BLOOD RELATIVES AND ` 7,50,000/- AS LOAN. THE ASSESSING OFFICER IN FACT ACCEPTED THE GIFT OF ` 50,00,000/- FROM RELATIVES, HOWEVER, DISALLOWED A SUM OF ` 8,00,000/-. THE ASSESSING OFFICER, ACCORDING TO THE LD. D.R., HAS NOT MADE NECESSARY ENQUIRY TO FIND OUT WHETHER THERE WAS VIOLATION OF SECTION 2(22)(E) OF THE ACT. REFERRING TO THE ORDER OF THE ASSESSING OFFICER, THE LD. D.R. POINTE D OUT THAT SINCE ALL THE CHEQUES WERE RECEIVED FROM THE COMPANIES IN WHI CH THE ASSESSEE IS THE MANAGING DIRECTOR, THEREFORE, POSSI BILITY OF VIOLATION OF SECTION 2(22)(E) OF THE CANNOT BE RULED OUT. SI NCE THE CHEQUES WERE RECEIVED FROM THE COMPANIES IN WHICH THE ASSES SEE IS THE MANAGING DIRECTOR, THE PRINCIPAL COMMISSIONER FOUND THAT WHETHER THE MONEY RECEIVED BY THE ASSESSEE IS A DIVIDEND IN COME WITHIN THE 5 I.T.A. NO.1114/MDS/15 PROVISIONS OF SECTION 2(22)(E) OF THE ACT IS TO BE EXAMINED. THEREFORE, ACCORDING TO THE LD. D.R., THE PRINCIPAL COMMISSIONER HAS RIGHTLY FOUND THAT THE ASSESSING OFFICER HAS TO RE-EXAMINE THE MATTER AFRESH. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE CLAIMS ` 50,50,000/- AS GIFTS FROM VARIOUS BLOOD RELATIVES. OUT OF ` 50,50,000/-, THE ASSESSING OFFICER AS WELL AS THE P RINCIPAL COMMISSIONER FOUND THAT THIS GIFT OF ` 50,00,000/- WAS RECEIVED FROM THE BLOOD RELATIVES, THE PRINCIPAL COMMISSIONER FO UND ONLY ` 50,000/- SAID TO BE RECEIVED SMT. S. DEIVANAYAKI CA NNOT BE CONSIDERED AS GIFT. THIS SUM OF ` 50,000/- WAS ALREADY DISALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ITSEL F. NOW THE BALANCE IS ONLY ` 8,00,000/- WHICH HAS ALSO BEEN DISALLOWED BY THE ASSESSING OFFICER. NO PART OF THE AMOUNT OUT OF ` 8,00,000/- WOULD HAVE BEEN RECEIVED FROM THE COMPANIES. SINCE THE A SSESSING OFFICER HAS ALREADY DISALLOWED A SUM OF ` 8,00,000/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT FURTHER ENQUIRY TO ASSESS T HE SAID AMOUNT UNDER SECTION 2(22)(E) OF THE ACT MAY NOT BE WARRAN TED. IF AT ALL ANY 6 I.T.A. NO.1114/MDS/15 ENQUIRY IS TO BE MADE, THE ADDITION UNDER SECTION 2 (22)(E) OF THE ACT WOULD BE ONLY ` 8,00,000/- WHICH WAS ALREADY ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS ALREADY MADE PROPER ENQUIRY AND FOUND THAT THE ASSESSEE HAS RECEIVED A GIFT OF ` 50,00,000/- AND THE BALANCE OF ` 8,00,000/- WAS FOUND TO BE NOT ESTABLISHED EVEN AFTER PROVIDING NE CESSARY OPPORTUNITY. THEREFORE, IT IS OBVIOUS THAT THE ASS ESSING OFFICER HAS MADE PROPER ENQUIRY. HENCE, IT MAY NOT BE CORRECT TO SAY THAT THE ASSESSING OFFICER HAS NOT MADE NECESSARY ENQUIRY BE FORE ALLOWING THE CLAIM. THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT THE ASSESSING OFFICER HAS MADE PROPER AND NECESSARY ENQ UIRY AND FOUND THAT THE GIFT TO THE EXTENT OF ` 50,00,000/- IS GENUINE AND MADE DISALLOWANCE OF ` 8,00,000/-. IN THOSE CIRCUMSTANCES, NO PREJUDICE CAUSED TO THE REVENUE. IN VIEW OF THE ABOVE DISCUS SION, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY AND THE SAME IS SET ASIDE ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 7 I.T.A. NO.1114/MDS/15 ORDER PRONOUNCED ON 22 ND APRIL, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 22 ND APRIL, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. PRINCIPAL CIT-2, COIMBATORE 4. 79 -2 /DR 5. :( ; /GF.