ACIT, Pondicherry V. Shri P.Rangaraj, Pondicherry

ITA 1194/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58027 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Keywords: Retraction
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1194(MDS)/2011 ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE I, PONDICHERRY. VS. SHRI P.RANGARAJ, 42, SUMUGA VINAYAGAR KOIL STREET, PONDICHERRY-605011. PAN AAEPR6379M. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEB RENGARAJAN, JR. STANDING COUNSEL RESPONDENT BY : SHRI CKN RAVISHANKARA PRABHU, C.A. DATE OF HEARING : 8 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 13 TH MARCH, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-XI I AT - - ITA 1194 OF 2011 2 CHENNAI, DATED 28-3-2011 AND ARISES OUT OF THE ASSE SSMENT COMPLETED UNDER SECTION 143(3), READ WITH SECTION 1 47 OF THE INCOME-TAX ACT, 1961. 2. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEA L READ AS UNDER:- 2. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS STATED IN HIS ORDER IN PAGE NO.5 THAT THE ASSESSEE HAS ADEQUATELY SUPPORTED THE SOURCE FOR INCREASE IN THE SHARE CAPITAL. BUT, HE HAS NEITHER GIVEN ANY OPPOR TUNITY TO THE ASSESSING OFFICER ON THIS ACCOUNT NOR HAS SO UGHT A REMAND REPORT FOR THE FRESH EVIDENCE SUBMITTED BY THE ASSESSEE. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS NOT STATED IN WHOSE ACCOUNT HIS INCREASE IN SHARE CAPIT AL IS TO BE ASSESSED. - - ITA 1194 OF 2011 3 4. THE DECISION OF THE COMMISSIONER OF INCOME- TAX(APPEALS) IS CONTRARY TO THE RULING OF THE HONB LE SUPREME COURT IN THE CASE OF SUJEETH SINGH CHHABRA VS UNION OF INDIA (AIR 1997 SC 2560). AS PER THE PRINCIPLES LAID DOWN IN THIS DECISION, CUSTOMS OFF ICIALS ARE NOT POLICE OFFICERS. THE CONFESSION THROUGH RETRACTED, IS AN ADMISSION AND BINDS THE PETITIONER . HENCE THE ADDITION OF ` 18,00,000/- MADE TOWARDS INCREASE IN THE SHARE CAPITAL IN THE NEWLY FLOATED PRIVATE LIMITED COMPANY IS TO BE ASSESSED IN THE HANDS OF T HE ASSESSEE. 3. REGARDING THE SOURCE ADDUCED BY THE ASSESSEE TO SUPPORT THE INCREASE REFLECTED IN HIS CAPITAL ACCOU NT, THE EXPLANATIONS OFFERED BY THE ASSESSEE WERE REJECTED BY THE ASSESSING OFFICER, MAINLY INFLUENCED BY THE ADMISSI ON MADE BY THE ASSESSEE IN AN EARLIER CONTEXT. BUT, WHILE WHI TTLING DOWN THE IMPACT OF THAT ADMISSION AND EXONERATING THE ASSESS EE FROM THE DEFAULT OF NON EXPLANATION OF SOURCES, THE COMMISSI ONER OF INCOME-TAX(APPEALS) HAS NOT PROPERLY EXAMINED THE F ACTUAL - - ITA 1194 OF 2011 4 MATRIX OF THE CASE. THEREFORE, WE FIND THAT THE QU ESTION OF INCREASE IN CAPITAL AND THE SUPPORT FOR THE SOURCE HAVE TO BE EXAMINED BY THE ASSESSING AUTHORITY INDEPENDENTLY O N THE FACTS OF THE CASE, NOT INFLUENCED BY THE SO CALLED CONFE SSION MADE BY THE ASSESSEE. THE ISSUE MUST BE CONSIDERED DESPITE THE EARLIER ADMISSION AND THE SUBSEQUENT RETRACTION. 4. THE ISSUE RAISED BY THE REVENUE IN GROUND NO.2 IS REMANDED FOR FRESH CONSIDERATION OF THE ASSESSING A UTHORITY. GROUND NO.3 ALSO GOES ALONGWITH THAT. 5. GROUND NO.4 RAISED BY THE REVENUE IN RESP ECT OF THE EVIDENTIARY VALUE OF ADMISSION IS AN OVERSTA TEMENT OF LAW AND DOES NOT HAVE RELEVANCE IN THE ABSENCE OF FACTU AL VERIFICATION. THE SAID GROUND IS DISMISSED AS IRRE LEVANT OR JUST ACADEMIC. 6. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. - - ITA 1194 OF 2011 5 ORDER PRONOUNCED ON TUESDAY, THE 13 TH OF MARCH, 2012 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 13 TH MARCH, 2012. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.