DCIT, Coimbatore V. K.C.Ramaswami, Coimbatore

ITA 1138/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5962 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: A ARJUNARAJ
• Section: 153A; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. 1138/MDS/2017 ( )( / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2, 63-A RACE COURSE ROAD, COIMBATORE. V. SHRI K.C. RAMASWAMI, NEW NO.67/OLD NO.34-A,2 ND STREET, DR.JAGANNATHAN NAGAR, CIVIL AERODROME, COIMBATORE 641 014. PAN : ACQPR 8376 Q (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : MS. S. VIJAYAPRABHA, JCIT -.+, / 0 / RESPONDENT BY : SHRI A. ARJUNARAJ, CA 1 / 2% / DATE OF HEARING : 27.09.2017 3') / 2% / DATE OF PRONOUNCEMENT : 13.10.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -18, CHENN AI, DATED 10.02.2017 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.1138/MDS/17 2. MS. S. VIJAYAPRABHA, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF ` 40,00,000/- ON THE BASIS OF MATERIAL FOUND DURING T HE COURSE OF SURVEY OPERATION. ACCORDING TO THE LD. D.R., THE M ATERIAL FOUND AND SEIZED DURING THE COURSE OF SURVEY OPERATION SHOWS PAYMENT OF ` 65,00,000/- IN CASH, THEREFORE, THE ASSESSING OFFIC ER FOUND THAT THE ASSESSEE HAS PAID ` 40,00,000/- FROM HIS UNACCOUNTED SOURCE. ACCORDING TO THE LD. D.R., THE ASSESSEE BEING PROMO TER OF THE COMPANY AND ACKNOWLEDGING PAYMENT OF ` 25,00,000/-, BALANCE OF ` 40,00,000/- HAS TO BE NECESSARILY EMANATED FROM UNA CCOUNTED SOURCE OF THE ASSESSEE. THEREFORE, ACCORDING TO TH E LD. D.R., THE ADDITION OF ` 40,00,000/- WAS MADE UNDER SECTION 69 OF THE INCOME - TAX ACT, 1961 (IN SHORT 'THE ACT'). HOWEVER, ACCOR DING TO THE LD. D.R., THE CIT(APPEALS) FOUND THAT THE MATERIAL WAS FOUND DURING THE COURSE OF SURVEY OPERATION, THEREFORE, THERE CANNOT BE ANY ADDITION IN A PROCEEDING UNDER SECTION 153A OF THE ACT. ACC ORDING TO THE LD. D.R., WHEN THE MATERIAL WAS FOUND DURING THE COURSE OF SURVEY OPERATION, WHICH DISCLOSES THE PAYMENT OF ` 65,00,000- AND ASSESSEE HIMSELF ACCEPTED THE PAYMENT OF ` 25,00,000/-, THE BALANCE HAS TO BE NECESSARILY ADDED UNDER SECTION 1 53A OF THE ACT 3 I.T.A. NO.1138/MDS/17 IN THE BLOCK PERIOD. THEREFORE, ACCORDING TO THE L D. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI A. ARJUNARAJ, THE LD. REPR ESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT A SUM OF ` 40,00,000/- HAS BEEN ACCOUNTED AS ADVANCE IN THE BOOKS OF M/S VANGALAMMA N HEALTH SERVICES LIMITED. HOWEVER, ACCORDING TO THE LD. RE PRESENTATIVE, THERE WAS NO EVIDENCE TO SHOW THAT THE PAYMENT WAS MADE TO THE VENDOR. SINCE NO EVIDENCE OF PAYMENT OF ` 40,00,000/- WAS FOUND, THE CIT(APPEALS) DELETED THE ADDITION. MOREOVER, NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION. THE A SSESSING OFFICER ADMITTEDLY RELIED UPON THE MATERIAL FOUND DURING TH E COURSE OF SURVEY OPERATION. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) BY PLACING RELIANCE ON THE DECISIO N OF MUMBAI BENCH OF THIS TRIBUNAL IN ALL CARGO LOGISTICS LTD. V. DCIT (2012) 137 ITD 287, RIGHTLY DELETED THE ADDITION MADE BY THE A SSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE ADDITION OF ` 40,00,000/- ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATION. THE CONTENT ION OF THE REVENUE IS THAT THE MATERIAL FOUND DURING THE COURS E OF SURVEY 4 I.T.A. NO.1138/MDS/17 OPERATION DISCLOSES THE PAYMENT OF ` 65,00,000/- IN CASH. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS P AID ` 40,00,000/- FROM HIS UNACCOUNTED SOURCE. FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT THE ASSESSEE, B EING THE PROMOTER OF THE COMPANY, ACKNOWLEDGED THE PAYMENT OF ` 25,00,000/-. THE DISPUTE IS WITH REGARD TO PAYMENT OF BALANCE AMOUNT OF ` 40,00,000/- A SUM OF ` 40,00,000/- APPEARS TO HAVE BEEN ACCOUNTED IN THE BOOKS OF M/S VANGALAMMAN HEALTH SERVICES LIMITED. THE ASSESSING OFFICER FOUND THAT EVEN THOUGH ` 40,00,000/- WAS CLAIMED TO BE MADE BY M/S VANGALAMMAN HEALTH SERVICES LIMIT ED, THERE IS NO MATERIAL TO LINK THE PAYMENT MADE TO THE SELLER SHRI D. RAMACHANDRAN. THE FACT REMAINS THAT THERE IS NO EV IDENCE TO SHOW THAT ` 40,00,000/- WAS PAID TO SHRI D. RAMACHANDRAN, THE V ENDOR OF THE PROPERTY. THE PROPERTY WAS ALSO PURCHASED BY T HE COMPANY, NAMELY, M/S VANGALAMMAN HEALTH SERVICES LTD. IN TH E ABSENCE OF ANY EVIDENCE TO SHOW THAT SHRI D. RAMACHANDRAN, THE VENDOR RECEIVED ` 40,00,000/- OVER AND ABOVE THE SALE CONSIDERATION DISCLOSED IN THE SALE DEED AND THE PROPERTY ITSELF WAS ADMITTEDLY PURCHASED BY THE COMPANY, NAMELY, M/S VANGALAMMAN H EALTH SERVICES LTD., THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE CIT(APPEALS) HAS RIGHTLY DELETED THE ADDITION MADE BY THE 5 I.T.A. NO.1138/MDS/17 ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 13 TH OCTOBER, 2017 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 13 TH OCTOBER, 2017. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-18, CHENNAI-34 4. PRINCIPAL CIT, CENTRAL-2, CHENNAI 5. 7: -2 /DR 6. ( ; /GF.