R.Jayamani, Erode V. ITO, Coimbatore

ITA 1234/CHNY/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0984 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-03-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: S SRIDHAR ERODE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH D : CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER] I.T.A.NO.1234/MDS/2010 ASSESSMENT YEAR : 2007-08 SHRI R.JAYAMANI C/O S.SRIDHAR B.SC.LL.B.,ADVOVATE 112/1 PERIYAR STREET ERODE 638 001 VS THE ITO WARD III(1) COIMBATORE [PAN - AFCPJ5576M] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.SRIDHAR, ERODE RESPONDENT BY : SHRI K.E.B RENGARAJAN, JR. STANDING COUNSEL O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE, FOR ASS ESSMENT YEAR 2007-08, IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-I, COIMBATORE, DATED 17.6.2010. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 9.10.2007 ADMITTING AN INCOME OF ` 1,79,680/-. THE ASSESSEES BANK ACCOUNT WITH M/S K OTAK MAHINDRA BANK WAS SCRUTINIZED. IN THAT BANK ACCOUNT RECEIPT OF ` 13,977/- WAS FOUND RECORDED BUT THE SAME WAS NOT INCLUDED IN THE COMPUTATION OF ITA 1234/10 :- 2 -: INCOME. THIS BANK ACCOUNT HAD CASH AND CHEQUE DE POSITS ON VARIOUS DATES. REGARDING CHEQUE DEPOSITS, IT WAS STATED TH AT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO PURCHASE A FLAT FOR HI S COUSIN, SHRI MANOHARAN, WHO IS EMPLOYED IN THE U.S. IT WAS STAT ED THAT THE ASSESSEE IS HOLDING THE POWER OF ATTORNEY FOR THE PURPOSE FROM HIS COUSIN. THE CHEQUES DEPOSITED IN THE ACCOUNT WERE ISSUED FROM NRE ACCOUNT OF SHRI MANOHARAN. A COPY OF THE BANK ACC OUNT OF SHRI MANOHARAN WAS FILED BEFORE THE ASSESSING OFFICER. APART FROM CHEQUE DEPOSITS, THERE WERE CERTAIN CASH DEPOSITS WHICH WE RE STATED TO BE OUT OF CASH WITHDRAWALS FROM THE BANK ACCOUNT OF SHRI M ANOHARAN AND THIS CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSES SEE AT COIMBATORE TO FACILITATE ISSUE OF CHEQUES TO THE PROPERTY VEND OR OR TO TAKE CARE OF THE EXTRA WORK CARRIED OUT ON THE PURCHASERS SPECI FICATIONS. A PEAK CASH DEPOSIT OF ` 5 LAKHS WAS FOUND MADE ON 5.9.2006 IN THIS BANK ACCOUNT. THIS AMOUNT WAS FOUND TO HAVE BEEN CIRCUL ATED INTO FIXED DEPOSIT AND SUBSEQUENTLY, ENCASHED FOR OTHER PURPOS ES. THIS DEPOSIT WAS FOUND TO BE UNEXPLAINED BY THE ASSESSING OFFICE R. THE ASSESSING OFFICER WAS OF THE OPINION THAT CO-RELATION WITH TH E WITHDRAWAL AND DEPOSIT COULD NOT BE ESTABLISHED SO, IT COULD NOT B E CONCLUSIVELY SAID THAT THE SAME WITHDRAWN AMOUNT WAS USED FOR THE IMP UGNED DEPOSIT. THEREFORE, ASSESSEE WAS ASKED TO FILE OTHER DETAILS IN RESPECT OF ALL THE ITA 1234/10 :- 3 -: SUMS BUT THE ASSESSMENT BEING TIME BARRED AND DUE TO SICKNESS OF THE ASSESSEE THE RELEVANT PROOF COULD NOT BE PRODUC ED. UNDER THESE CIRCUMSTANCES, THE ONUS BEING NOT DISCHARGED, THE A SSESSING OFFICER HAS MADE THE ADDITION OF THIS AMOUNT IN ASSESSEES HANDS. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A), WHO HAS SUSTAINED BOTH THE ADDITIONS. NOW THE ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS: 1) THE ORDER OF THE COMMISSIONER OF INCOME-TAX IS ERRONEOUS AND BAD IN LAW AND AGAINST THE PRINCIPLES OF NATU RAL JUSTICE. 2) THE CIT(A) ERRED IN HOLDING, IN PARA-7, PAGE- 4 OF THE ORDER, THAT THE ASSESSING OFFICER HAD REJECTED THE EXPLANATION OF THE APPELLANT, FOR, IN THE REMAND REPORT, THE ASSESSING OFFICER HAD ONLY STATED THAT' THE FRESH MATERIALS FILED MAY NOT , THEREFORE, BE GIVEN CREDIT. 9 COPY OF THE REMAND REPORT BY THE AS SESSING OFFICER DT.15/04/20 10 IS ENCLOSED). 3) THE CIT(A) ERRED IN HOLDING, IN PARA-8, IN PAGE-5 O F THE ORDER, THAT 'HOWEVER, IT WAS HELD BY THE ASSESSING OFFICER THAT THERE WAS NO NEXUS BETWEEN THE AMOUNT WITHDRAWN BY SHRI. V.MANOHARAN AND THE AMOUNT DEPOSITED IN THE BANK ST ATEMENT OF THE APPELLANT, FOR THE ASSESSING OFFICER, IN LAS T PARA, IN PAGE-2 OF THE ASSESSMENT ORDER, ONLY OBSERVED THAT 'THE ASSESSEE WAS ASKED TO FILE OTHER DETAILS IN SUPPORT TO CONNECT THE TWO ENTRIES WHICH WAS NOT CARRIED OUT TILL THE CLOSURE OF THE ASSESSMENT PROCEEDINGS' AND THE ASSESSING OFFICER, EITHER IN THE ASSESSMENT ORDER OR IN THE REMAND REPORT, HAD N OT HELD SO. 4) THE CIT(A) ERRED IN NOT APPRECIATING THE EVIDENTIAR Y VALUE OF THE AFFIDAVITS BY SHRI.V.DHANASEKAR AND SHRI. V.MAN OHARAN, FILED BY THE APPELLANT.( FOR THE EVIDENTIARY VALUE OF THE AFFIDAVITS, RELIANCE IS PLACED ON 30 ITR 181(SC). 5) THE CIT(A), WHILE HOLDING, IN PARA-8, IN PAGE-S OF THE ORDER, THAT THE FACTS ARE SUPPORTED BY THE AFFIDAVITS OF SH.V.DHANASEKAR AND SH.V.MANOHARAN, ERRED IN SUSTAI NING THE ADDITION ON A DIFFERENT GROUND THAT THERE WAS T IME INTERVAL BETWEEN THE SUM WITHDRAWN AND THE PURCHASE OF LAND AND THAT ITA 1234/10 :- 4 -: THERE WAS A DIFFERENCE BETWEEN THE SUM WITHDRAWN AN D THE SUM FOR WHICH THE LAND WAS PURCHASED, WHILE THE STA ND OF THE ASSESSING OFFICER, WHILE MAKING THE ASSESSMENT, WAS THAT THE APPELLANT WAS NOT ABLE TO PROVE THE SOURCE FOR A CR EDIT OF ` .5,00,000/- IN HIS SAVINGS BANK ACCOUNT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE RECORDS. WHILE EXAMINING THE EV IDENCE AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED OPINION THAT THE C ASE OF THE ASSESSEE TO PROVE THE IMPUGNED ENTRIES IS NOT THAT BAD AS HA S BEEN CONSIDERED BY THE AUTHORITIES BELOW. BEFORE THE LD. CIT(A), T HE ASSESSEE HAD PRODUCED PROOF TO SUBSTANTIATE HIS CLAIM AND THE LD . CIT(A) HAS SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER. VIDE HIS REPORT DATED 15.4.2010, THE ASSESSING OFFICER HAS REFUSED TO GIV E CREDIT TO THE EVIDENCES NOW PRODUCED TREATING THEM AS FRESH MATER IAL. IN OUR VIEW, JUSTICE COULD NOT BE DONE TO THE PARTIES UNLESS WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ENTIRE MA TTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REDO THE ASSE SSMENT ON THE IMPUGNED ISSUES. THEREFORE, WE RESTORE THE APPEAL TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL GI VE OPPORTUNITY OF HEARING TO THE ASSESSEE AND ALLOW HIM TO PRODUCE PR OOF TO SUBSTANTIATE HIS CLAIM, IF THE ASSESSEE WANTS TO, AND THEREAFTER DECIDE THE ISSUES INVOLVED IN THIS APPEAL AFRESH AS PER LAW. ITA 1234/10 :- 5 -: 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS AL LOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.3.2011. SD/- SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 17 TH MARCH, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR