D.Sathyamoorthy, Erode V. ITO, Erode

ITA 1213/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8392 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: SRIDHAR
• Keywords: Unexplained investment; Salary income
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! ' . # , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.1213/MDS/2016 ( / ASSESSMENT YEAR: 2010-11) MR. D.SATHYAMOORTHY, 23, PAARI NAGAR, PALAYAPALAYAM PIRIVU, PERUNDURAI ROAD, COLLECTORATE POST, ERODE-638 011. VS THE INCOME TAX OFFICER, WARD-II(4), ERODE. PAN: ALAPS3245G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. SRIDHAR, ADVOCATE /RESPONDENT BY : MR. SHIVA SRINIVAS, JCIT /DATE OF HEARING : 20 TH JULY, 2016 /DATE OF PRONOUNCEMENT : 23 RD SEPTEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 3, COIMBATORE DATED 29.02.2016 IN ITA NO.309/15-16 PASSED UNDER SECTION 143(3) R.W.S. 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY NOT ACCEPTING THE OPENING CASH BALANCE OF RS.15.00 LAKHS BY RELYING IN THE REMAND REPORT. 2 ITA NO.1213/MDS/2016 II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN TAXING PROFIT OF RS.2,73,000/- DERIVED ON ACCOUNT OF TRANSFER OF SHARES. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING SALARY INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LEAR NED ASSESSING OFFICER THAT THE ASSESSEE HAD INVESTED RS.34,29,050/- IN SHARES. SINCE THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN THE SOURCE OF SUCH INVESTMEN T FOR RS.27,29,050/-, THE LEARNED ASSESSING OFFICER MADE ADDITION OF THE SAME UNDER THE HEAD UNEXPLAINED INVESTMENTS . IT WAS FURTHER NOTICED BY THE LEARNED ASSESSING OFFICE R THE ASSESSEE HAD EARNED PROFIT OF RS.2,73,000/- ON ACCO UNT OF TRANSFER OF SHARES. THEREFORE, THE LEARNED ASSESSIN G OFFICER MADE ADDITION OF THE SAME UNDER THE HEAD SHORT TERM CAPITAL GAIN. 4. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE HAD SUBMITTED HIS DETAILED C ASH FLOW 3 ITA NO.1213/MDS/2016 STATEMENT FOR THE YEAR ENDING 2004 TO 2009. THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) AFTER OBTAININ G REMAND REPORT DISALLOWED THE AMOUNT OF RS.15.00 LAK HS SHOWN AS OPENING BALANCE AS ON 01.04.2009. THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE VIE W THAT THE CLAIM OF THE ASSESSEE CANNOT BE ENTERTAINED BEC AUSE THE ASSESSEE HAD NOT FILED THESE DETAILS IN THE INCOME TAX RETURN FOR THE PRECEDING YEARS. WE DO NOT SUBSCRIBE TO TH E VIEW OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). T HE ASSESSEE IS A SALARIED EMPLOYEE AND HAS BEEN FILING HIS RETURN OF INCOME REGULARLY. FOR THE RELEVANT ASSESS MENT YEAR ALSO THE ASSESSEE HAD ADMITTED TOTAL INCOME OF RS.2 ,93,814/- THE ASSESSEE HAD ALSO CLAIMED TO HAVE RECEIVED RS.7 .00 LAKHS FROM HIS WIFE SMT. N.JOTHILAKSHMI AND RS.3.00 LAKHS AS HIS OWN SAVINGS. CONSIDERING THE STATUS OF THE ASSE SSEE AND HIS YEARLY EARNINGS HE WOULD HAVE ACCUMULATED AN AM OUNT OF RS.15.00 LAKHS WHICH HE VIVIDLY EXPLAINED IN HIS CA SH FLOW STATEMENT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT EXAMINING THE CASH FLOW STATEMENT AND FINDING FAULT WITH THE CLAIM OF THE ASSESSEE WITH R EGARD TO 4 ITA NO.1213/MDS/2016 OPENING BALANCE OF RS.15.00 LAKHS IS NOT JUSTIFIABL E. THEREFORE, WE HEREBY DIRECT THE LEARNED ASSESSING O FFICER TO DELETE THE AMOUNT OF RS.15.00 LAKHS SHOWN BY HIM AS HIS OPENING CASH BALANCE. FURTHER, THE ASSESSEE HAS CLA IMED THAT THE GAIN / PROFIT DERIVED ON SALE OF SHARES IS FROM THE NATIONAL STOCK EXCHANGE, WHICH IS EXEMPT FROM TAX A ND REQUESTED THE MATTER TO BE REMITTED BACK FOR FRESH CONSIDERATION, BECAUSE AT THE TIME OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT FURNISH THE PAR TICULARS BEFORE THE REVENUE. THEREFORE, IN THE INTEREST OF J USTICE, WE REMIT BACK THIS ISSUE TO THE FILE OF THE LEARNED AS SESSING OFFICER FOR FRESH CONSIDERATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD SEPTEMBER, 2016 SD/- SD/- ( ! ' . # ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 23 RD SEPTEMBER, 2016 SOMU 5 ITA NO.1213/MDS/2016 *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF