Durai Pugazhenthi, Salem V. DCIT, Salem

ITA 116/CHNY/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7585 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 21-01-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: G BASKAR
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.116 /MDS./2016 ( / ASSESSMENT YEAR :2008-09) SHRI DURAI PUGAZHENTHI , 1/103,BRINDAVAN ROAD, 3 RD CROSS, FAIRLANDS,SALEM 636 016. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, GANDHI ROAD, SALEM 636 007. PAN AENPP 5237 R ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.G.BASKAR,ADVOCATE / RESPONDENT BY : MR.A.V.SREEKANTH,JCIT, D.R / DATE OF HEARING : 14.03.2016 /DATE OF PRONOUNCEMENT : 24.03.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)- 18, CHENNAI DATED 28.09.2015 PERTAINING TO THE ASSESSMENT YEAR 2008-09. ITA NO.116/MDS/2016 2 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO SUSTAINING THE ADDITION OF ` 22.5 LAKHS U/S.69B OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEARCH U/S.132 OF THE ACT CONDUCTED AT THE PLACE OF SHRI MADAN CHA WLA. DURING THE SEARCH, AN AGREEMENT OF SALE DATED 09.01.2007 ENTER ED BETWEEN SHRI P.PONGOPAL AND SHRI DURAI PUGAZHENTHI, WAS FOUND AN D SEIZED AS PER ANNEXURE NO.ANN/P.S/B&D/S-3/LS(SL.NO.151 TO 153 ) DATED 10.01.2012. AS PER THIS AGREEMENT OF SALE, ASSESSE E IS TO PURCHASE 11 FLATS, CONSTRUCTED BY M/S.PONRAM PROMOTERS, LOCA TED AT ZAHIR AMMAPALAYAM, SALEM FOR A SALE CONSIDERATION OF ` 1.1 CRORES. AN ADVANCE OF ` 40 LAKHS PAID BY SHRI DURAI PUGAZHENTHI TO SHRI P.PONGOPAL IN CASH ON 09.01.2007. THE ASSESSEE HAS DISCLOSED ` 17.50 LAKHS AND UNDISCLOSED ` 22.50 LAKHS. AS SUCH, AO MADE AN ADDITION OF ` 22.50 LAKHS, SINCE THE ASSESSEE FAILED TO EXPLAIN T HE SOURCE OF PAYMENT. AGAINST THIS, ASSESSEE WAS ON A PPEAL BEFORE THE LD.CIT(A). ITA NO.116/MDS/2016 3 4. THE ASSESSEE PLEADED BEFORE THE LD.CIT(A) THAT THIS AGREEMENT WAS NOT ENTERED IN THE FINANCIAL YEAR 2007-08 RELEV ANT TO ASSESSMENT YEAR 2008-09. FURTHER, IT WAS STATED BE FORE LOWER AUTHORITIES THAT SINCE AGREEMENT WAS ENTERED ON 09. 01.2007 WITH SHRI P.PONGOPAL FOR PURCHASE OF 11 FLATS, CONSTRUCTED BY SHRI P.PONGOPAL, M/S.PONRAM PROMOTERS FOR ` 1,10,00,000/- AND ADVANCE PAID. ACCORDINGLY, IT WAS NOT BROUGHT TO TAX FOR ASSESSME NT YEAR 2008-09. HOWEVER, LD.CIT(A), AFTER CONSIDERING THE ASSESSEE S REPLY AND THE STATEMENT GIVEN BY SHRI P.MURUGAN TO CONFIRM THE PA YMENT OF ` 22.50 LAKHS TO SHRI PUGALANDHI, HAD NOT ACCEPTED THE ARGU MENT OF THE ASSESSEE IN THE ABSENCE OF INCOME TAX STATEMENTS. H ENCE, LD.CIT(A) CONFIRMED THE ADDITION OF ` 22.50 LAKHS AS UNACCOUNTED INVESTMENT OF SHRI PUGALENDHI. AGAINST THIS, ASSESSEE IS IN APPE AL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THERE IS NO DISPUTE THAT AN AGREEMENT OF S ALE WAS ENTERED WITH SHRI P.PONGOPAL ON 09.01.2007. CONSEQUENT TO THIS, ASSESSEE PAID ` 40 LAKHS ADVANCE. OUT OF THIS, ASSESSEE DISCLOSED ` 17.5 LAKHS AS PAYMENT TO PURCHASE OF FLATS. FURTHER, THERE IS A FAILURE FOR ITA NO.116/MDS/2016 4 DISCLOSING THE BALANCE OF ` 22.5 LAKHS. THE AO BROUGHT THIS ` 22.5 LAKHS IN THE ASSESSMENT YEAR 2008-09, THOUGH THE SA ID AMOUNT WAS SAID TO BE PAID ON 09.01.2007, RELATING TO FINANCIA L YEAR 2006-07 PERTAINING TO ASSESSMENT YEAR 2007-08. AS PER THE PROVISIONS OF THE SECTION 69B, ONLY UNDISCLOSED INVESTMENT IN THE ASS ESSMENT YEAR UNDER CONSIDERATION I.E., 2008-09 COULD BE BROUGHT IN TAX TO THOSE ASSESSMENT YEARS. THE TRANSACTION RELATING TO ANOT HER ASSESSMENT YEAR THAN 2008-09 COULD NOT BE BROUGHT TO TAX IN TH E ASSESSMENT YEAR UNDER CONSIDERATION BEFORE US. THE CONTENTION OF T HE DEPARTMENTAL REPRESENTATIVE IS THAT SINCE THE ASSESSEE OFFERED ` 17.5 LAKHS, THE PART OF ADVANCE OUT OF ` 40 LAKHS BALANCE ` 22.5 LAKHS HAS TO BE CONSIDERED IN THE ASSESSMENT YEAR ONLY. IN OUR O PINION, THIS ARGUMENT OF THE DEPARTMENTAL REPRESENTATIVE IS DEVO ID OF MERITS. THE CONFESSION GIVEN BY THE ASSESSEE CANNOT BE A RE ASON TO SUSTAIN THE ADDITION AS HELD BY JURISDICTIONAL HIGH COURT IN THE CASE OF MARIAM AYSHA VS. CIT REPORTED IN 104 ITR 381(MAD.). IN VIEW OF THIS, WE ARE DELETING THE ADDITION OF ` 22.5 LAKHS MADE BY THE AO, SUSTAINED BY THE LD.CIT(A). ITA NO.116/MDS/2016 5 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED ONTHURSDAY , THE 24 TH OF MARCH,2016 AT CHENNAI. SD/- SD/ ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) ( ( () * + ) ) ! CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH MARCH,2016 . K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,!' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4&,6 /GF