DCIT, CHENNAI V. Shri A.V.Mohan, CHENNAI

ITA 1175/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64247 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: D ANAND
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NOS. 1175 & 1176/MDS/2011 (ASSESSMENT YEARS : 2006-07 & 2007-08) THE DEPUTY COMMISSIONER OF INCOME TAX, MEDIA CIRCLE I, CHENNAI - 600 034 . (APPELLANT) V. SHRI A.V. MOHAN, NO.1/3, BHUVANESWARI APARTMENTS, BHARATHIDASAN COLONY, K.K. NAGAR, CHENNAI - 600 078. PAN : AAOPM9145M (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI D. ANAND, AD VOCATE DATE OF HEARING : 06.09.2012 DATE OF PRONOUNCEMENT : 06.09.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS FILED BY THE REVENUE DIRECTED A GAINST ORDERS DATED 24.3.2011 OF COMMISSIONER OF INCOME TA X (APPEALS)-VI, CHENNAI, FOR THE IMPUGNED ASSESSMENT YEARS. GROUND S TAKEN BY THE REVENUE FOR BOTH THE YEARS ARE SIMILAR, EXCEPT FOR ONE OTHER GROUND TAKEN FOR ASSESSMENT YEAR 2007-08 WITH REGARD TO AN ADDITION MADE I.T.A. NOS.1175 & 1176/MDS/11 2 BY THE ASSESSING OFFICER UNDER SECTION 68 OF INCOME -TAX ACT, 1961 (IN SHORT 'THE ACT'), WHICH WAS DELETED BY THE CIT(APPE ALS). 2. FACTS APROPOS ARE THAT CLAIM OF THE ASSESSEE WIT H REGARD TO PAYMENTS OF PROFESSIONAL CHARGES AND TECHNICAL FEES FOR ASSESSMENT YEARS 2006-07 AND 2007-08 COMING TO ` 18,75,060/- AND ` 12,79,897/- RESPECTIVELY, WERE DENIED BY APPLYING S ECTION 40(A)(IA) OF THE ACT. AGAINST SUCH DISALLOWANCE, ASSESSEE MOVED IN APPEAL BEFORE CIT(APPEALS), WHERE IT WAS CONTENDED THAT SE CTION 40(A)(IA) OF THE ACT APPLIED ONLY TO OUTSTANDING AMOUNTS AND NOT TO PAYMENTS ACTUALLY EFFECTED DURING THE PREVIOUS YEAR. CIT(AP PEALS) WAS APPRECIATIVE OF THIS CONTENTION OF THE ASSESSEE AND DELETED THE DISALLOWANCE. 3. WE FIND THAT THE ISSUE RAISED BY THE REVENUE IS COVERED BY THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF MERILYN SHIPPING AND TRANSPORT V. ACIT (2012) 16 ITR (TRIB. ) 1 (SB). IT HAS BEEN HELD BY THE SPECIAL BENCH CLEARLY THAT RIGOURS OF SECTION 40(A)(IA) WERE ATTRACTED ONLY ON AMOUNTS STANDING A S PAYABLE AT THE END OF THE PREVIOUS YEAR, AND NOT TO AMOUNTS WHICH WERE PAID DURING THE PREVIOUS YEAR. FOR BOTH THE ASSESSMENT YEARS, THERE IS NO CASE FOR THE REVENUE THAT ANY AMOUNTS OUT OF PROFESSIONA L I.T.A. NOS.1175 & 1176/MDS/11 3 CHARGES/TECHNICAL FEES WERE OUTSTANDING AS PAYABLE AT THE END OF THE RESPECTIVE PREVIOUS YEARS. THE AMOUNTS HAVING BEEN PAID IN THE RESPECTIVE PREVIOUS YEARS, WE ARE OF THE OPINION TH AT IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF MERILYN SH IPPING AND TRANSPORT (SUPRA), SECTION 40(A)(IA) CLEARLY APPLIE D. THIS GROUND OF THE REVENUE IS THEREFORE DISMISSED. 4. THIS LEAVES US WITH ONLY OTHER GROUND TAKEN FOR ASSESSMENT YEAR 2007-08, WHICH IS REGARDING THE ADDITION FOR A N UNEXPLAINED CREDIT DELETED BY THE CIT(APPEALS). 5. FACTS APROPOS ARE THAT ASSESSEE HAD INTRODUCED A CREDIT OF ` 17,75,000/- FROM ONE SHRI MARIA DOSS DURING THE REL EVANT PREVIOUS YEAR. EXPLANATION OF THE ASSESSEE WAS THAT THIS AM OUNT WAS RECEIVED ON SALE OF A PLOT AT SRIPERAMBADUR AND THE TRANSACT ION WAS COMPLETED IN THE NEXT YEAR. ASSESSEE ALSO FILED ACCOUNT COPY IN SUPPORT OF SUCH CLAIM. HOWEVER, AS PER A.O., THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE IN TH E FORM OF ANY AGREEMENT FOR SALE OR ANY DETAILS REGARDING PLOT UN DER SALE. ASSESSEE HAD ALSO NOT FILED ANY CONFIRMATION AND TH EREFORE, HE CONSIDERED THE CREDIT OF ` 17,75,000/- AS UNEXPLAINED AND MADE AN ADDITION UNDER SECTION 68 OF THE ACT. I.T.A. NOS.1175 & 1176/MDS/11 4 6. IN HIS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT DOCUMENTS WERE AVAILABLE FOR THE SUM OF ` 17,75,000/- RECEIVED FROM SHRI MARIA DOSS AS ADVANCE FOR SALE O F PLOT. IT SEEMS SUCH DOCUMENTS WERE PRODUCED BEFORE CIT(APPEALS). ACCORDING TO ASSESSEE, INCOME ARISING FROM THE SALE OF PLOT WAS RETURNED BY HIM IN THE VERY NEXT YEAR WHEN THE PROPERTY WAS REGISTERED AND POSSESSION GIVEN TO THE BUYER. CIT(APPEALS) WAS APPRECIATIVE OF THESE CONTENTIONS OF THE ASSESSEE AND DELETED THE ADDITIO N OF ` 17,75,000/-. 7. NOW BEFORE US, LEARNED D.R. SUBMITTED THAT FRESH EVIDENCE WERE CONSIDERED BY THE CIT(APPEALS) WITHOUT GIVING AN OPPORTUNITY TO THE A.O. FOR VERIFICATION. 8. PER CONTRA, LEARNED A.R. SUPPORTED THE ORDER OF CIT(APPEALS). 9. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. CASE OF THE ASSESSEE IS THAT A SUM OF ` 17,75,000/- WAS RECEIVED FROM SHRI MARIA DOSS AS ADVANCE FROM SALE OF PLOT A ND SUCH SALE WAS COMPLETED IN THE NEXT YEAR AND CAPITAL GAINS ARISIN G THEREFROM SHOWN IN SUCH YEAR. HOWEVER, THE DOCUMENTS IN SUPPORT OF THE CONTEMPLATED SALE WERE NOT FURNISHED BY THE ASSESSE E BEFORE THE A.O., BUT WERE PRODUCED BEFORE CIT(APPEALS) ONLY. CIT(APPEALS), I.T.A. NOS.1175 & 1176/MDS/11 5 BASED ON SUCH DOCUMENTS, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WE ARE OF THE OPINION THAT THER E IS A VIOLATION OF RULE 46A SINCE ASSESSING OFFICER WAS NOT GIVEN AN O PPORTUNITY FOR VERIFYING THE EVIDENCE FILED BY THE ASSESSEE. IN T HE CIRCUMSTANCES, WE FEEL THAT THE MATTER HAS TO GO BACK TO A.O. FOR CONSIDERATION AFRESH. ASSESSEE HAS TO BE GIVEN AN OPPORTUNITY FO R PRODUCING DOCUMENTS IN SUPPORT OF HIS CLAIM THAT THE SUM WAS RECEIVED AS ADVANCE ON THE SALE OF PLOT. ASSESSING OFFICER SHA LL PROCEED IN ACCORDANCE WITH LAW. 10. IN THE RESULT, APPEAL OF THE REVENUE FOR ASSESS MENT YEAR 2006- 07 IS DISMISSED, WHEREAS, ITS APPEAL FOR ASSESSMENT YEAR 2007-08, IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 6 TH OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH SEPTEMBER, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-VI, CHENNAI-3 4/ CIT, CHENNAI-IV, CHENNAI/D.R./GUARD FILE