Selvi J.Jayalalithaa, CHENNAI V. ACIT, CHENNAI

ITA 1288/CHNY/2008

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8295 (ITAT-CHENNAI)
• Duration Of Justice: 8 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-07-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 13-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T R SENTHIL KUMAR SR
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Gift; Condonation of delay
• Section: 148; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' # . $ , & ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.1288/MDS/2008 ( / ASSESSMENT YEAR: 2000-01) SELVI J.JAYALALITHAA, 36, POES GARDEN, CHENNAI-600 086. VS ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II(2), CHENNAI-600 034. PAN:AAFP8986K ( /APPELLANT) ( /RESPONDENT) & W.T.A NO.20/MDS/2008 ( / ASSESSMENT YEAR: 1997-98) SEVI J.JAYALALITHAA, 36, POES GARDEN, CHENNAI-600 086. VS DEPUTY COMMISSIONER OF WEALTH TAX, CENTRAL CIRCLE-II(2), CHENNAI-600 034. PAN:AAFP8986K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : MR. T.R.SENTHIL KUMAR, SR.STANDING COUNSEL /DATE OF HEARING : 4 TH AUGUST, 2016 /DATE OF PRONOUNCEMENT : 30 TH SEPTEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- ITA NO.1288/MDS/2008 IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, CHENNAI DATED 28.04.2008 I N ITA NO.99/07-08 PASSED UNDER SECTION 144 R.W.S. 250(6) OF THE ACT AND WTA NO.20/MDS/2008 IS ALSO FILED BY THE ASS ESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF 2 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 WEALTH TAX (CENTRAL), CHENNAI DATED 13.03.2002 IN C.NO.1741(1)/2001-02/C.II PASSED UNDER SECTION 25( 2) OF THE WEALTH TAX ACT, 1957. SINCE THESE TWO APPEALS PERT AIN TO THE SAME ASSESSEE, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1288/MDS/2008: (A.Y.2000-01): 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HER APPEAL, HOWEVER, THE CRUXES OF THE ISSUES ARE AS FO LLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD TREATED THE AGRICULTURAL INCOME OF RS. 21,66,959 AS INCOME FROM OTHER SOURCES. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAS DISALLOWED RS.60,000/- BEING MUNICIPAL TAX WHILE DETERMINING RENTAL INCOME. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD ASSESSED THE ACCRUED INTEREST INCOME OF THE ASSESSEE FROM BANK DEPOSIT FOR RS.36,10,000/- WHEN THOSE DEPOSITS WERE FROZEN BY THE DVAC WING OF THE GOVERNMENT OF TAMILNADU. 3 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 3. SINCE THE LEARNED COUNSEL FOR THE ASSESSEE HAS N OT PRESSED THE GROUND WITH RESPECT TO THE CLAIM OF DED UCTION OF RS.60,000/- TOWARDS MUNICIPAL TAX WHILE DETERMINING THE RENTAL INCOME OF THE ASSESSEE, THIS GROUND RAISED B Y THE ASSESSEE IS DISMISSED AS SUCH. GROUND NO.1: ADDITION OF RS.21,66,959/- BEING AGRICULTURAL INCOME TREATED AS INCOME FROM OTHER SOURCES.: 4.1 THE ASSESSEE HAD CLAIMED TO HAVE EARNED AGRICUL TURAL INCOME OF RS.21,66,959/- DURING THE RELEVANT ASSESS MENT YEAR. THE LEARNED ASSESSING OFFICER DISBELIEVED THE CLAIM OF THE ASSESSEE BECAUSE OF THE FOLLOWING REASONS:- I) THE ASSESSEES REPRESENTATIVE HAD ONLY FILED CER TAIN SALE RECEIPTS RELATING TO SALE OF AGRICULTURAL PROD UCE AFTER TWO YEARS OF FILING OF THE RETURN OF INCOME. II) THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE RELA TING TO THE COMMENCEMENT OF BASIC AGRICULTURAL OPERATION S SUCH AS VOUCHERS FOR PURCHASE OF FERTILIZERS, PESTI CIDES AND DETAILS OF WAGES PAID ETC. 4 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 III) NO EVIDENCE WAS PRODUCED FOR AGRICULTURAL OPERATIONS SUCH AS TILLING, SOWING, PLANTING. IV) NO PROOF WAS PRODUCED TO SHOW WHERE THE AGRICULTURAL INCOME WAS DEPOSITED / DEPLOYED. V) RELIANCE WAS PLACED IN THE DECISION OF THE HONB LE APEX COURT REPORTED IN 32 ITR 466. FOR THE ABOVE STATED REASONS, THE LEARNED ASSESSING OFFICER MADE ADDITION OF THE ENTIRE AMOUNT OF RS.21,66,959/ - AS INCOME FROM OTHER SOURCE. 4.2 ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER BY AGREEING WITH THE FINDINGS OF THE LEARNE D ASSESSING OFFICER. HE FURTHER OBSERVED AS FOLLOWS:- I) IN THE REMAND REPORT DATED 28.01.2008 THE ASSESS ING OFFICER HAS STRONGLY SUPPORTED THE STAND TAKEN BY H IS PREDECESSOR IN THE ASSESSMENT ORDER. II) IN THE REMAND REPORT, THE ASSESSING OFFICER HAS RELIED ON THE DECISION OF HONBLE HIGH COURT IN THE CASE C IT 5 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 VS. R.VENKATASAMY NAIDU REPORTED IN 29 ITR 521 WHEREIN IT WAS HELD THAT THE ONUS IS ON THE ASSESSE E TO PROVE THE AGRICULTURAL INCOME. III) IN THE REMAND REPORT, THE ASSESSING OFFICER HA S NOT RECORDED ANY EVIDENCE TO SHOW THAT THE ASSESSEE EARNED AGRICULTURAL INCOME. IV) THE ALLEGATIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE HAVE BEEN STRONGLY REFUTED BY THE LEARNED ASSESSING OFFICER IN HIS REMAND REPORT. V) THE DETAILS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS ARE NOT SIGNED. VI) THE DETAILS OF THE LAND HOLDING ARE NOT EVIDENC ED BY ADANGAL, CERTIFICATE FROM THE VAO. VII) JUST BECAUSE THE CIT AND THE TRIBUNAL FOR THE ASSESSMENT YEARS 1987-88 TO 1992-03 HAS HELD THAT DURING THOSE YEARS THE ASSESSEE WAS EARNING AGRICULTURAL INCOME, IT CANNOT BE AUTOMATICALLY AND CONCLUSIVELY ESTABLISHED THAT THE AGRICULTURAL OPER ATIONS CONTINUED TO BE EARNED BY THE ASSESSEE EVEN DURING 6 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 THE RELEVANT FINANCIAL YEAR 1999-2000. THE PRINCIPL ES OF RES JUDICATA DO NOT APPLY IN THE INCOME-TAX PROCEED INGS. 4.3 WITH THE ABOVE OBSERVATIONS, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICER BY MAKING ADDITION OF RS.21,66,959/- BY TREATING THE CLAIM OF THE AGRICU LTURAL INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURC ES. 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE ARGUED BY STATING THAT THE ASSESSEE HAD SUBMITTED THE DETAILS OF HER AGRICULTURAL ACTIVITIES BEFORE THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS). THE DETAILS OF THE SUBMISSIONS MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE REPRODUCED HEREIN BELOW FO R REFERENCE:- DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FURNISHED COMPLETE DETAILS AND PARTICULARS OF AGRIC ULTURAL INCOME BEFORE THE ASSESSING OFFICER AS UNDER:- PARTICULARS OF AGRL. PRODUCE YIELD IN KGS. SOLD AMT. OF SALE PROCEEDS GREEN GRAPES 1,36,156 RS.21,81,943 BLACK BEAUTY 47,584 RS. 11,50,751 RS.33,32,694 7 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 LESS: EXPENSES RS.11,65,734 NET AGRICULTURAL INCOME RS.21,66,960 THE EXTENT OF AGRICULTURAL LANDS, THE NUMBER OF PLO TS, GRAPES VINES IN EACH OF THE PLOTS, COPIES OF THE SA LE BILLS, COPIES OF VOUCHERS FOR AGRICULTURAL EXPENSES ETC. W ERE HANDED OVER TO THE ASSESSING OFFICER WHO APPEARS TO HAVE MISPLACED THE SAID DETAILS AND HE DID NOT CONS IDER THOSE ITEMS AND TREATED THE ENTIRE INCOME AS NON- AGRICULTURAL WITHOUT ANY BASIS. THE COPIES OF THE L ETTERS THROUGH WHICH THE AFORESAID DETAILS WERE FURNISHED ARE AGAIN SUBMITTED HEREWITH FOR KIND PERUSAL OF THE CI T(A). THE APPELLANT OWNS GRAPE VINES LOCATED NEAR HYDERAB AD. THE TOTAL AREA UNDER CULTIVATION MEASURES ABOUT 10 ACRES. THE LAND COVERED BY CULTIVATION HAS BEEN DIV IDED INTO 10 PLOTS. THE AGE OF THE GRAPE VINES IS ABOUT 10 YEARS. THE NUMBER OF GRAPE VINES IN DIFFERENT PLOT ARE AS UNDER:- PLOT NO . NO. OF GRAPE VINES 1 567 2 754 3 1831 4 & 5 1626 6 & 7 2380 8 1653 9 1975 10 695 TOTAL 11,481 IN ADDITION TO THE ABOVE, THERE ARE ABOUT 42 COCONU T TREES AND 24 POMEGRANATE TREES ON THE IMPUGNED AGRICULTURAL LANDS. THE YIELDS ARE SOLD BY THE APPE LLANT IN RETAIL FROM THE FARM ITSELF WHERE THE VENDORS COME AND PURCHASE THE AGRICULTURAL PRODUCE. DETAILS OF SALES ARE ALSO FURNISHED HEREWITH FOR THE CIT(A)S KIND PERUS AL. THE FACT THAT THE AGRICULTURAL OPERATION WAS CARRIED ON BY THE APPELLANT AND INCOME WAS DERIVED THEREFROM HAD BEEN ACCEPTED IN EARLIER YEARS BY THE ASSESSING OFFICER ON LOCAL ENQUIRY AND PERSONAL VERIFICATION. THE CIT(A) IN HIS CONSOLIDATED APPELLATE ORDER FOR THE EARLIER ASSESS MENT YEARS ALSO ACCEPTED THE APPELLANTS AGRICULTURAL IN COME AS GENUINE AND THE FINDINGS OF THE CIT(A) IN THIS R EGARD 8 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 HAS BEEN UPHELD BY THE HONBLE ITAT. COPIES OF THE ORDERS OF THE CIT(A) AND THE ITAT ARE ALSO FURNISHE D HEREWITH BY WAY OF EVIDENCE. IN VIEW OF THE ABOVE, THE ADDITION OF RS.21,66,959/- DESERVES TO BE DELETED. 5.1 THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER P OINTED OUT THAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1987-88 TO 1992-93 THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) IN ITA NO.62 TO 67 OF 2001-02 VIDE ORDER DATED 31.01.2002 HAD ACCEPTED THAT THE ASSESSEE OWNED AGRICULTURAL LAND AND WAS EARNING AGRICULTURAL INCO ME, THEREFORE THERE WAS NO SCOPE FOR MAKING DISALLOWANC E OF THE DECLARED AGRICULTURAL INCOME. IT WAS FURTHER SUBMI TTED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HAD ELABORATELY ANALYZED THE EXTENT OF AGRICU LTURAL LAND HELD BY THE ASSESSEE AND THE AGRICULTURAL OPERATION S CARRIED OUT BY THE ASSESSEE IN HER AGRICULTURAL LAND. THE L EARNED AUTHORIZED REPRESENTATIVE ALSO POINTED OUT THAT THE CHENNAI BENCH OF THE TRIBUNAL IN ITA NO.1230/1997 FOR THE ASSESSMENT YEAR 1993-94 HAD ALSO UPHELD THE ORDER O F THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHEREI N HE HAD ESTIMATED THE AGRICULTURAL INCOME OF THE ASSESS EE AS 9 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 RS.9,50,000/-. THE RELEVANT PORTION OF THE ORDERS I S EXTRACTED HEREIN BELOW FOR REFERENCE: 34. GROUND NO.3.1 REGARDING AGRICULTURAL INCOME: 35. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE ASSESSING OFFICER WAS DIRECTED BY THE COMMISSIONER OF INCOME TAX (APPEALS ) TO FURNISH THE REMAND REPORT RELATING TO THE ASSESS MENT YEAR 1994-95 IN THE APPELLATE PROCEEDINGS OF THIS ASSESSMENT YEAR. THE ASSESSING OFFICER HAS FURNISHE D THE REMAND REPORT DATED 25.03.1999. THE ASSESSING OFFICER CONFIRMED THE CULTIVATION OF LAND TO THE TU NE OF 9 TO 10 ACRES OUT OF 15 ACRES OF LAND. ON THIS BASIS, COMMISSIONER OF INCOME TAX (APPEALS) ESTIMATED THE INCOME FROM AGRICULTURE AT RS.13,05,000/- FOR THIS ASSESSMENT YEAR. ON THE SAME BASIS, THE CIT(A) AFTE R APPLYING THE COST INFLATION INDEX AND AFTER CONSID ERING THE ADDITIONAL LAND MEASURING 0.89 ACRES INTO CULTI VATION HAS ESTIMATED THE AGRICULTURE INCOME AT RS.9,50,000 /-. THE CIT(A) PASSED DETAILED ORDER ON THIS ISSUE AT P AGE NO.17 TO 22 DATED 31.01.2002 RELATING TO A.Y. 1987- 88 TO 1992-93. WE DO NOT FIND ANY INFIRMITY IN HIS FINDIN GS AND THE SAME IS CONFIRMED. THIS GROUND OF REVENUE IS DISMISSED. HE THEREFORE ARGUED THAT THE LEARNED ASSESSING OFFI CER AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FO R THE RELEVANT ASSESSMENT YEAR HAS GROSSLY ERRED BY HOLDI NG THAT THE ASSESSEE WOULD NOT HAVE GENERATED ANY AGRICULTU RAL INCOME DURING THE RELEVANT ASSESSMENT YEAR BY COMPL ETELY IGNORING THE FINDINGS OF THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) AND THE TRIBUNAL IN THE EARLIER YEARS . HE FURTHER 10 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 ARGUED BY STATING THAT FOR THE RELEVANT ASSESSMENT YEAR ALSO THE ASSESSEE HAS SUBMITTED THE DETAILS OF AGRICULTU RAL OPERATIONS BEFORE THE REVENUE WHICH WAS IGNORED. IT WAS THEREFORE PLEADED THAT ADDITION OF RS.21,66,959/- MADE BY THE LEARNED ASSESSING OFFICER WHICH WAS FURTHER SUS TAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MA Y BE DELETED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE THOUGH VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS OF THE R EVENUE COULD NOT DENY THE FACT THAT THE ASSESSEE OWNS AGRI CULTURAL LAND DURING THE RELEVANT ASSESSMENT YEAR. HE ALSO C OULD NOT DENY THE FACT THAT EVEN FOR THE SUBSEQUENT YEARS TH E ASSESSEE HAD CLAIMED TO HAVE EARNED AGRICULTURAL IN COME WHICH WAS ACCEPTED BY THE REVENUE. 7. ON HEARING BOTH THE SIDES AND CAREFULLY PERUSING THE RECORDS BEFORE US, WE FIND THAT THE EXISTENCE OF GR APE VINES, COCONUT TREES, AND OTHER PLANTATIONS STANDING IN T HE AGRICULTURAL LAND OWNED BY THE ASSESSEE WHICH SURVI VES FOR 11 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 NUMBER OF YEARS IS NOT IN DISPUTE. WHEN THE FACTS A RE SO, IT CANNOT BE DISPUTED THAT THE ASSESSEE DID NOT EARN A NY AGRICULTURAL INCOME DURING THE RELEVANT ASSESSMENT YEAR. THEREFORE IT IS APPARENT THAT THE FINDINGS OF THE L EARNED ASSESSING OFFICER AND LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IN THE RELEVANT ASSESSMENT YEAR ARE PERVE RSE. WHEN THE ASSESSEE HAD CLAIMED AGRICULTURAL INCOME O F RS.21,66,959/- AND FURNISHED SOME DETAILS REGARDING THE SAME, THE REVENUE SHOULD HAVE EXAMINED THESE FACTS AND IF CANNOT ACCEPT TO THE QUANTUM OF INCOME DECLARED BY THE ASSESSEE AT LEAST THEY SHOULD HAVE ESTIMATED THE AG RICULTURAL INCOME OF THE ASSESSEE, CONSIDERING THE EARLIER DEC ISIONS AND FACTS DURING THE RELEVANT ASSESSMENT YEAR. IT IS EV IDENT FROM THE ORDER OF THE REVENUE AUTHORITIES THAT THEY HAVE NOT MADE ANY ATTEMPT TO DO SO, BUT HAS VINDICTIVELY PROCEEDE D TO TREAT THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AS INCOME FROM OTHER SOURCE. THE LEARNED ASSESSING OF FICER HAS OBSERVED IN HIS ORDER THAT THE ASSESSEE HAS ONL Y FILED CERTAIN SALE RECEIPTS REGARDING SALE OF AGRICULTURA L PRODUCE BUT, DID NOT FURNISH ANY EVIDENCE RELATING TO AGRIC ULTURAL 12 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 OPERATIONS SUCH AS TILLING, SOWING, PLANTING, VOUC HERS FOR PURCHASE OF FERTILIZERS/PESTICIDES AND DETAILS OF W AGES PAID. HOWEVER, FROM THE FACTS AVAILABLE ON RECORD, IT CAN NOT BE DENIED THAT THERE WAS NO AGRICULTURAL OPERATION OR AGRICULTURAL INCOME EARNED BY THE ASSESSEE BECAUSE THE ASSESSEE HAS PRODUCED THE DETAILS OF SALE RECEIPTS, LANDHOLDING AND OTHER DETAILS WHICH IS APPARENT FROM THE ORDER OF THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) . FURTHER, IT IS APPARENT FROM THE PAPER BOOK PAGE 26 TO 35 SUBMITTE D BY THE ASSESSEE THAT DETAILS OF THE SALE OF AGRICULTURAL P RODUCE FOR THE PERIOD 02.04.1999 TO 31.03.2000 WERE AVAILABLE BEFORE THE REVENUE. HOWEVER THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) HAS HEAVILY RELIED ON THE REMAND REPO RT SUBMITTED BY THE LEARNED ASSESSING OFFICER IN REJEC TING THE CLAIM OF THE ASSESSEE BY STATING THAT THE DETAILS F ILED DURING THE COURSE OF APPELLATE PROCEEDINGS ARE NOT SIGNED, LANDHOLDING IS NOT PROVED ETC. THE LD.CIT(A) HAD FU RTHER RELIED ON THE PRINCIPLES OF RES JUDICATA WITH REGARD TO THE ORDERS OF APPELLATE AUTHORITIES FOR THE EARLIER YEA RS. THESE FINDINGS OF THE LEARNED ASSESSING OFFICER AND THE L EARNED 13 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 COMMISSIONER OF INCOME TAX (APPEALS) DO NOT HOLD AN Y WATER TO ESTABLISH THAT THE ASSESSEE DOES NOT HAVE AGRICULTURE INCOME FOR THE RELEVANT ASSESSMENT YEAR . THE STRONG BELIEF OF REVENUE AUTHORITIES IS THAT DURING THE RELEVANT ASSESSMENT YEAR THE ASSESSEE COULD NOT HAVE EARNED ANY AGRICULTURAL INCOME WHICH APPEARS TO BE QUITE ILLOG ICAL. FURTHER, SINCE THE FACTS PERTAINING TO THE RELEVANT ASSESSMENT YEAR 2000-01 IS MORE THAN15 YEARS OLD IT WOULD BE DIFFICULT TO MAKE ANY ESTIMATE OF AGRICULTURAL INCOME FOR THE RE LEVANT ASSESSMENT YEAR AT THIS RELEVANT POINT OF TIME. THE REFORE, WE DO NOT HAVE ANY OPTION BUT TO ALLOW THE CLAIM OF TH E ASSESSEE. HENCE, WE HEREBY DIRECT THE LEARNED ASSESSING OFFIC ER TO DELETE THE ADDITION OF RS.21,66,959/- MADE UNDER T HE HEAD INCOME FROM OTHER SOURCE AND ACCEPT THE SAME AS AGRICULTURAL INCOME OF THE ASSESSEE. WHILE ARRIVI NG AT SUCH CONCLUSION, WE HAVE ALSO PERUSED THE DECISIONS CITE D BY THE REVENUE, BUT WE DO NOT FIND THE FACTS IN THE CASE O F THE ASSESSEE TO BE IDENTICAL TO THOSE CASES. ACCORDINGL Y, THIS GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE. 14 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 GROUND NO.3: ACCRUED INTEREST INCOME OF RS.36,10,000/- FROM BANK DEPOSITS. 8.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD HUGE BANK DEPOSITS AND THE ASSESSEE WAS NOT OFF ERING THE ACCRUED INCOME ON THE SAME TO TAX BECAUSE THOSE DEPOSITS WERE FROZEN BY THE DVAC WING OF THE TAMIL NADU GOVERNMENT. THE LEARNED ASSESSING OFFICER WAS OF T HE VIEW THAT EVEN THOUGH THE FIXED DEPOSITS WERE FROZEN, IN TEREST WAS ACCRUING TO THE ASSESSEE ON THOSE DEPOSITS AND THER EFORE, IT WILL BE LIABLE TO BE TAXED. ACCORDINGLY, THE LEARNE D ASSESSING OFFICER COMPUTED THE TAXABLE INTEREST AT RS.36,10,0 00/- AND BROUGHT IT UNDER THE AMBIT OF TAX. 8.2 ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) ENDORSED THE VIEW OF THE LEARNED ASSESSI NG OFFICER AND CONFIRMED HIS ORDER BY CITING THE FOLL OWING ADDITIONAL REASONS:- I) THE ASSESSEE HAD FOLLOWED CASH SYSTEM OF ACCOUNTING WITH REGARD TO INTEREST INCOME WHILE AS SHE 15 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING IN RESPECT OF HER OTHER INCOME, WHICH SHOWS THAT THE ASSESSEE IS FOLLOWING HYBRID SYSTEM WHICH IS NOT PERMITTED AS PER THE PROVISIONS OF THE ACT. II)THERE IS NO EVIDENCE ON RECORD TO SHOW THAT DUE TO ATTACHMENT EFFECTED BY DVAC THE BANK DEPOSITS STANDING IN THE ASSESSEES NAME RAN THE POTENT RISK OF GETTING THOSE DEPOSITS FORFEITED BY THE GOVERNMENT. III) THE APPELLANT WAS MERELY PROHIBITED FROM OPERA TING THE BANK DEPOSITS BY WITHDRAWING OR ENCHASING THE SAME DURING THE PENDENCY OF DVAC PROCEEDINGS. IV) THOUGH THERE IS SOME ELEMENT OF UNCERTAINTY AS TO WHEN THE DVAC WOULD CONCLUDE ITS PROCEEDINGS, THERE IS NO RISK AND ALSO THERE CANNOT BE ANY PRESUMPTION THAT THE APPELLANT HAD LOST THE OWNERSHIP OF THE BA NK DEPOSITS FOR EVER. 9. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT DUE TO PROLONGED LITIGATIONS THE ASS ESSEE WAS DENIED OF THE ACCRUED INTEREST LEAVE ALONE THE TITL E OVER THE 16 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 BANK DEPOSITS AS THEY WERE SEIZED AND FROZEN BY THE DVAC. THERE WAS NO SURETY AS TO WHEN THE ASSESSEE WOULD B E ABLE TO REALIZE THE SAME AND ALWAYS THERE IS A RISK OF U NCERTAINTY. IT WAS THEREFORE SUBMITTED THAT THE ACCRUED INTERES T INCOME OF THE ASSESSEE CANNOT BE TAXED IN THE RELEVANT ASSESS MENT YEAR THOUGH IT CAN BE TAXED IN THE YEAR IN WHICH TH E ASSESSEE RECEIVES IT. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND RELIED ON THE ORDERS OF THE REVENUE AND ARGUED IN SUPPORT OF THE SAME. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THERE IS A GREAT ELEM ENT OF UNCERTAINTY FOR REALIZING THE INTEREST AS WELL AS T HE BANK DEPOSITS BY THE ASSESSEE. EVEN IF SHE REALIZES THE SAME, IT WOULD BE AFTER A PERIOD OF NUMBER OF YEARS AND PROB ABLY AT THAT TIME RE-ASSESSMENT MAY NOT BE POSSIBLE DUE TO LIMITATION AND THUS THE ASSESSEE WOULD NOT BE ABLE TO CLAIM RE FUND OF 17 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 THE TAX PAID IF THE DEPOSITS ARE FORFEITED. FURTHER , ACCOUNTING STANDARD AS-9 WITH RESPECT TO REVENUE RECOGNITION C LEARLY PROVIDES AS UNDER:- TIMING OF REVENUE RECOGNITION : REVENUE FROM SALE OF RENDERING SERVICES SHOULD BE RECOGNIZED AT THE TIME OF THE SALE OR RENDERING OF SERVICES. HOWEVER, IF AT THE TIME OF RENDERING O F SERVICES OR SALE THERE IS SIGNIFICANT UNCERTAINTY I N ULTIMATE COLLECTION OF THE REVENUE, THEN THE REVENUE RECOGNITION IS POSTPONED AND IN SUCH CASES REVENUE SHOULD BE RECOGNIZED ONLY WHEN IT BECOMES REASONABLY CERTAIN THAT ULTIMATE COLLECTION WILL BE MADE. IT ALSO APPLIES TO THE REVENUE ARISING OUT OF ESCALATION OF PRICE; EXPORT INCENTIVE, INTEREST, ETC. 12. FROM THE ABOVE, IT IS APPARENT THAT THE INTERES T INCOME OF THE ASSESSEE CAN BE RECOGNIZED ONLY WHEN THERE I S NO UNCERTAINTY AND A SIGNIFICANT SCOPE TO RECEIVE THE SAME. THEREFORE, IN THE CASE OF THE ASSESSEE THE ACCRUED INTEREST ON THE BANK DEPOSIT FROZEN BY THE DVAC, WING OF THE GOVT. OF TAMILNADU CANNOT BE TREATED AS INTEREST INCOME OF T HE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR. HENC E, WE 18 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELE TE THE INTEREST INCOME OF RS.36,10,000/- WHILE COMPUTING T HE TOTAL TAXABLE INCOME OF THE ASSESSEE. WTA NO. 20/MDS/2008: (A.Y.1997-98): 13. BRIEF FACTS OF THE CASE ARE THAT WEALTH TAX ASS ESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED FOR THE ASSESSMENT YEAR 1997-98 ON 27.03.2000 UNDER SECTION 16(5) R.W.S. 17OF THE WEALTH TAX ACT DETERMINING THE NET WEALTH OF RS.4,67,13,000/- . THEREAFTER BASED ON THE 263 ORDE R PASSED UNDER THE PROVISIONS OF THE INCOME TAX ACT DATED 12.02.2002, THE LEARNED COMMISSIONER INVOKED HIS PO WERS UNDER SECTION 25 OF THE WEALTH TAX ACT BY STATING T HAT THE WEALTH TAX ASSESSMENT IS FOUND TO BE ERRONEOUS INSO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. BY REFERRING TO THE 263 ORDER UNDER THE PROVISIONS OF THE INCOME TA X ACT, THE LEARNED COMMISSIONER IN HIS ORDER UNDER SECTION 25 OF THE WEALTH TAX ACT OBSERVED THAT THE WEALTH TAX OFFICER HAS OMITTED TO INCLUDE THE VALUE OF THE FOLLOWING ASSET S: 19 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 I) INVESTMENT IN CONSTRUCTION OF RESIDENTIAL PROPER TY AT POES GARDEN SOURCE FROM UNEXPLAINED INCOME RS.58.52 LAKHS. II) CONSTRUCTION OF FARM HOUSE IN HYDERABAD RS.11.7 2 LAKHS. III) GOLD JEWELLERY VALUED AT 185.82 LAKHS INSTEAD OF RS.383.12 LAKHS AS REVEALED FROM DVAC REPORT. IV) TATA SEIRA CAR RS.4,01,131/-, MARUTHI GYPSY RS.2,03,434/-,TRAX JEEP 1,04,000/-, SWARAJ MAZDA RS.1, 76,172/-. V) CLOSING BALANCE OF RS.93,454/- AND RS.6,01,366/ - WITH RESPECT TO M/S.NATYAKALANIKETAN, CHENNAI. FOR THE ABOVE STATED REASONS THE LEARNED COMMISSION ER SET ASIDE THE WEALTH-TAX ASSESSMENT AND REMITTED THE MA TTER BACK TO THE FILE OF LEARNED WEALTH TAX OFFICER FOR FRESH CONSIDERATION. 14. AT THE OUTSET, THE LEARNED AUTHORIZED REPRESENT ATIVE SUBMITTED THAT THE 263 ORDER PASSED UNDER THE PROVI SIONS OF THE INCOME TAX ACT BY THE LEARNED COMMISSIONER OF I NCOME 20 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 TAX DATED 12.02.2002 WAS ANNULLED BY THE TRIBUNAL VIDE ITS ORDER DATED 11.01.2008 IN ITA NO.477/MDS/2002 & OTH ERS. HE FURTHER SUBMITTED THAT ALL THE ISSUES RAISED IN THE 263 ORDER UNDER THE PROVISIONS OF THE INCOME TAX ACT WERE CON SIDERED BY THE TRIBUNAL WHILE ARRIVING AT ITS DECISION. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT WI TH RESPECT TO VALUATION OF JEWELLERY, THE LEARNED COMMISSIONER OF INCOME TAX IN HIS ORDER U/S. 263 OF THE ACT HAD ONLY RELIE D ON THE INVENTORY VALUED BY THE DVAC WHILE AS THE SAME WAS CONSIDERED BY THE LEARNED WEALTH TAX OFFICER WHILE PASSING HIS ORDER UNDER SECTION 17 OF THE WEALTH TAX ACT DA TED 27.03.2000. HENCE, IT WAS SUBMITTED THAT THE ORDER UNDER SECTION 25(2) OF THE WEALTH TAX ACT DOES NOT HAVE A NY LEGS TO STAND BECAUSE THE ORDER PASSED UNDER SECTION 263 OF THE INCOME TAX ACT WAS SUBSEQUENTLY ANNULLED BY THE TRI BUNAL BY CONSIDERING ALL THE FACTS MENTIONED IN IT. IT WA S THEREFORE REQUESTED THAT THE ORDER PASSED BY THE LEARNED COMMISSIONER INVOKING HIS POWER UNDER SECTION 25(2) MAY BE QUASHED. 21 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 15. THE LEARNED AUTHORIZED REPRESENTATIVE ALSO PRAY ED THAT THE ENORMOUS DELAY IN FILING OF THE APPEAL MAY BE CONDONED AND TO JUSTIFY THE SAME HE FILED WRITTEN S UBMISSIONS STATING THE REASONS FOR THE DELAY. HE ALSO RELIED O N VARIOUS DECISIONS OF THE HIGHER JUDICIARY TO SUPPORT HIS ST AND. 16. THE LEARNED DEPARTMENTAL REPRESENTATIVE THOUGH VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LEARNE D AUTHORIZED REPRESENTATIVE COULD NOT CONTROVERT TO T HE FACT THAT THE ISSUES DISCUSSED IN THE 25(2) ORDER OF THE COMMISSIONER HAD ARISEN FROM THE 263 ORDER OF THE L EARNED COMMISSIONER OF INCOME TAX UNDER THE PROVISIONS OF THE INCOME TAX ACT WHICH WAS CONSIDERED BY THE TRIBUNAL AND QUASHED. HOWEVER, THE LEARNED DEPARTMENTAL REPRESEN TATIVE VEHEMENTLY ARGUED THAT THERE WAS AN INORDINATE DELA Y IN FILING OF THE APPEAL, WHICH CANNOT BE CONDONED. 17.1 WE HAVE PERUSED THE WRITTEN SUBMISSION FILED B Y THE ASSESSEE AND FOR REFERENCE THE SAME IS EXTRACTED HE REIN BELOW: 22 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 THE APPELLANT WAS CM OF TAMIL NADU FROM 14.05.2001 TO 21.09.2001. FOR A BRIEF PERIOD 21.09.2001 TO 02.03.2002 SHE WAS NOT THE CM AND FROM 02.03.2002 TO 12.05.2006 SHE WAS AGAIN THE CM. FROM 1996 ONWARDS SHE HAS BEEN FACING NUMEROUS VEXATIOUS LITIGATIONS FROM POLITICALLY FOISTED CASE S FOR MORE THAN TWO DECADES. THEREFORE HER FULL ATTENTION WAS FOCUSED ON NOT ONLY CARRYING OUT THE FUNCTIONS AS CHIEF MINISTER BUT HAD ALSO TO DEFEND ALMOST 31 VEXATIOUS LITIGATI ONS. TANSI LAND CASE, DISPROPORTIONATE ASSETS CASE, PLEASANT STAY HOTEL CASE, COLOUR TV CASE, GIFT CASE AND PROSECUTION LAUNCHED BY INCOME TAX DEPARTMENT, REGARDING WEALTH-TAX WERE SOME OF THE CASES SPANNIN G OVER TWO DECADES WHICH REQUIRED THE APPELLANT'S CONSTANT, CONTINUOUS FULL TIME ATTENTION. TANSI LAND CASE LAUNCHED AGAINST HER CONTINUED FOR THE PERIOD FROM 1999 TO MARCH, 2002. THUS WHEN THE IMPUGNED ORDER WAS SUPPOSED TO HAVE BEEN DELIVERED TO THE ADDRESS OF THE APPELLANT, SHE WAS FULLY OCCU PIED IN DEFENDING THE CASE. SHE HAD ALSO TAKEN OVER AS C M REQUIRING HER FULL TIME ATTENTION FOR THE AFFAIRS O F THE STATE. THE ORDER SENT BY THE DEPARTMENT WHICH WAS RECEIVED BY A PERSON WHO COULD NOT BE IDENTIFIED, W AS NOT BOUGHT TO HER NOTICE AT THAT TIME. AS POINTED ABOVE, THE NUMBER OF VEXATIOUS LITIGATIO N AND AFFAIRS OF THE STATE OCCUPIED HER TIME CONSTANT LY AND CONTINUOUSLY DURING THE ENTIRE THE INTERVENING YEARS. THE CASE REGARDING DISPROPORTIONATE ASSETS WHICH WAS INSTITUTED IN 1996 WAS BEFORE SPECIAL COU RT, HIGH COURT AND SUPREME COURT PARALLELLY. THEN THE CASE WAS TRANSFERRED TO BANGALORE. IT OCCUPIED HER TIME AND EFFORTS EXTENSIVELY TO DEFEND THE SAME IN BANGALORE. IN BETWEEN ATTENDING TO ALL THESE VEXATION CASES SH E 23 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 HAD THE FULL TIME JOB OF RUNNING THE STATE. THE CAS ES WERE PARALLELLY BEING PROSECUTED FROM 1996 TO 2015. WHEN THE NOTICE WAS RECEIVED SHE HAD JUST TAKEN OVE R AS CM AFTER A PERIOD BEING OUT OF OFFICE. SHE WAS OCCUPIED FULL TIME PERFORMING HER DUTY AS CHIEF MIN ISTER OF THE STATE. THE APPELLANT IS NOT ABLE TO IDENTIFY THE PERSON TO WHO HAD RECEIVED THE NOTICE. THE ORDER WA S NOT BROUGHT TO HER ATTENTION. THEREAFTER FOR THE PERIOD 2002 TO 2008 SHE HAD ALL THE TIME BEEN EXTREMELY BUSY PERFORMING HER DUTY AS CM AND ALSO DEFENDING HER CASES. SHE HAD NO TIME TO CONSIDER WHETHER ANY ORDER HAS BEEN ISSUED BY THE COMMISSIONER AND THEREFORE DID NOT FILE AN APPEAL I N RESPECT OF THE IMPUGNED ORDER WITHIN TIME BECAUSE T HE SAME WAS NOT BROUGHT TO HER NOTICE. THUS SHE WAS NOT IN A POSITION TO REACT TILL SUCH T IME SHE BECAME AWARE THAT SUCH ORDER HAS BEEN PASSED. AS SOON AS SHE CAME TO REALIZE THAT SUCH ORDER HAS BEE N PASSED, CERTIFIED COPY WAS IMMEDIATELY FOR APPLIED AND OBTAINED ON 15.07.2008. SOON THEREAFTER THE APPEAL WAS FILED IN JULY, 2008. WHENEVER ANY ORDER UNDER THE INCOME TAX HAS BEEN BROUGHT TO HER NOTICE SHE HAS BEEN PROMPT IN FILING APPEALS WITHIN THE TIME PERMITTED. THIS WAS THE ONL Y OCCASION WHERE THERE HAS BEEN DELAY IN FILING AND T HAT TOO BECAUSE THE ORDER WAS NOT BROUGHT TO HER NOTICE . AS POINTED ABOVE, THE APPELLANT IS NOT ABLE TO IDEN TIFY THE PERSON WHO HAS RECEIVED THE ORDER. THE ORDER WA S NOT BROUGHT TO HER NOTICE. SHE WAS FULL TIME ENGAGE D IN PERFORMING HER DUTIES AS THE CM AND DEFENDING PLETHORA OF CASES AGAINST HER. THEREFORE SHE COULD NOT INVESTIGATE OR FIND OUT ABOUT IMPUGNED ORDER OF THE COMMISSIONER, WHETHER IT WAS ISSUED OR RECEIVED. AS SOON IT WAS BROUGHT TO HER NOTICE, SHE HAD FILED TH E APPEAL IMMEDIATELY. 24 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 IN THE CIRCUMSTANCES, THE DELAY IN FILING THE APPEA L OCCURRED FOR THE ABOVE REASONS BEYOND' HER CONTROL THE APPELLANT NOT BEING AWARE OF THE SERVICE OF THE ORD ER AND IN VIEW OF THE VARIOUS ACTIVITIES OCCUPIED HER ATTENTION DURING THE INTERREGNUM. THE DELAY WAS NEITHER WILLFUL NOR WANTON AND BEYOND HER CONTROL. AS SOON SHE BECAME AWARE OF PASSING OF THE ORDER IMMEDIATELY SHE HAD TAKEN STEPS TO GET THE CERTIFIE D COPY AND FILE AN APPEAL THEREAFTER. SHE ALWAYS WOUL D LIKE TO COMPLY WITH THE PROVISIONS OF THE ACT IMPLI CITLY. AS HELD BY THE MADRAS HIGH COURT IN THE CASE OF AS WELL AS THE MADRAS HIGH COURT IN THE CASE OF AREAVA T & D INDIA LTD, THE TRIBUNAL WHILE EXERCISING DISCRETI ON IN CONDONATION OF DELAY SHOULD ADOPT A PRAGMATIC APPROACH. IN CONSTRUING A SUFFICIENT CAUSE, PRINCIP LE ADVANCING JUSTICE IS THE PRIME IMPORTANCE. AS HELD BY THE SUPREME COURT IMPROVEMENT TRUST VS UJAYGAR SINGH IT HAS TO BE EXAMINED WHETHER THE CONDUCT BEHAVIOUR AND ATTITUDE OF THE APPELLANT HAD BEEN ABSOLUTELY CALLOUS AND NEGLIGENT IN PROSECUTIN G THE MATTER. IN THAT CASE ALSO THE PETITIONER WAS NO T AWARE OF THE ORDER. AS SOON AS HE WAS MADE AWARE, HE HAD TAKEN ALL POSSIBLE STEPS TO PROSECUTE THE MATTER. THIS PROVED THAT THAT THE ATTITUDE OF THE PETITIONER WAS NOT CALLOUS IN PURSUING THE MATTER. THEY HAVE HELD THAT AFTER ALL JUSTICE CAN BE DONE ONLY WHEN THE MATTER IS FOUGHT ON MERITS AND IN ACCORDANCE WITH LAW RATHER THAN TO DISPOSE IT OF ON SUCH TECHNICALITIES AND THAT TOO AT THE THRESHOLD. THE APEX COURT CONDONED THE DELAY AND DIRECTED THE MATTER TO BE DECIDED ON MERITS. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS WAGNER BIRO AUSTRIA BY AGENT BHARAT HEAVY ELECTRICA LS LTD HAS CONDONED THE DELAY OF 2555 DAYS IN FILING T HE TAX CASE (APPEALS)- COPY ENCLOSED. THE DELAY IN FILING THE APPEAL IS NEITHER WILLFUL N OR WANTON BUT DUE TO THE CIRCUMSTANCES AS STATED ABOVE . 25 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 IN VIEW OF THE CIRCUMSTANCES, EXPLAINED ABOVE, IT IS PRAYED THAT THE DELAY IN FILING THE APPEAL WHICH HAS ARISEN ON ACCOUNT OF THE IMPUGNED ORDER NOT BEING BROUGHT TO THE NOTICE OF THE APPELLANT AND ON ACCOU NT OF HER BEING TOTALLY OCCUPIED BY AFFAIRS OF STATE AND DEFENDING VARIOUS LITIGATIONS, DELAY IN FILING OF T HE APPEAL MAY BE CONDONED. 17.2 FROM THE ABOVE WRITTEN SUBMISSION FILED BY THE ASSESSEE, IT IS APPARENT THAT THE ASSESSEE COULD NO T PURSUE HER CASE BEFORE THE TRIBUNAL BECAUSE THE ASSESSEE H AD NOT RECEIVED THE APPELLATE ORDER. FURTHER, SHE WAS PRE OCCUPIED WITH VARIOUS LITIGATIONS AND WAS ALSO IN PUBLIC SER VICE. MOREOVER, ON PERUSING THE MERITS OF THE CASE, IT IS EVIDENT THAT THE ORDER PASSED UNDER SECTION 25 OF THE WEALT H TAX ACT CANNOT BE SUSTAINED BECAUSE IT WAS BASED ON THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME TAX UNDER SECTION 26 3 OF THE INCOME TAX ACT WHICH WAS SUBSEQUENTLY QUASHED B Y THE TRIBUNAL. THEREFORE, WE ARE OF THE VIEW THAT WHEN TECHNICALITIES WITH RESPECT TO DELAY IN FILING THE APPEAL IS PITTED AGAINST THE MERIT OF THE CASE, THEN THE MERITS OF T HE CASE SHOULD SUPERSEDE AND HAS TO BE GIVEN UTMOST IMPORTA NCE IN THE LARGER INTEREST OF THE JUSTICE, MORE SO WHEN TH E ASSESSEE IS ENDANGERED BY THE PENAL PROVISIONS OF PENALTY AN D 26 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 PROSECUTION. WE PLACE STRONG RELIANCE IN THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE COLLECTOR, LAND ACQUISITION VS. MST . KATIJI & ORS., REPORTED IN 167 ITR 471 WHILE ARRIVING AT THIS CONCLUSION. IN THAT CASE THE HONABLE APPEX COURT HAD HELD THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE C AUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SID E CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. FURTHER THE HON'BLE SUPREME COURT IN CASE OF VEDABHAI V/S SANTARAM, 253 ITR 798 HAD OBSERVED THAT INORDINATE DELAY CALLS FOR CAUTIONS APPROACH. THIS MEANS THERE SHOULD BE NO MALAFIDE OR DILATORY TACTICS. 'S UFFICIENT CAUSE' SHOULD RECEIVE LIBERAL CONSTRUCTION TO ADVAN CE SUBSTANTIAL JUSTICE. WE ALSO DERIVE STRENGTH FROM THE RECENT DECISION OF THE HONBLE APEX COURT IN THE CASE MAN IBEN DEVRAJ SHAH VS. M.C.G. BRIHANMUMBAI REPORTED IN AIR 2012 (SC) 1629 WHEREIN IT WAS HELD THAT THE LIMITATION ACT HAS NOT BEEN ENACTED WITH THE OBJECT OF DESTROYING THE RIGHTS OF THE PARTIES BUT TO ENSURE THAT THEY APPROACH THE C OURT FOR VINDICATION OF THEIR RIGHTS WITHOUT UNREASONABLE DELAY. NO 27 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 HARD AND FAST RULE CAN BE LAID DOWN FOR DECIDING TH E APPLICATION FOR CONDONATION OF DELAY BUT OVER THE Y EARS THE COURT HAS ADVOCATED THAT A LIBERAL APPROACH SHOULD BE ADOPTED IN SUCH MATTERS SO THAT SUBSTANTIVE RIGHTS OF THE PARTIES ARE NOT DEFEATED MERELY BECAUSE OF DELAY. IN THE CASE OF THE ASSESSEE THE DELAY IS NOT WILLFUL AND H AD SUFFICIENT CAUSE. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE HEREBY CONDONE THE DELAY OF 2255 DAYS AND PROCEED TO DISPO SE OF THE APPEAL ON MERITS. 17.3 ON MERITS, IT IS EVIDENT THAT THE ORDER UND ER SECTION 25 OF THE WEALTH TAX ACT IS BASED ON THE FINDINGS BY T HE LD.CIT U/S.263 OF THE INCOME TAX ACT WHICH IS ANNULLED BY THE TRIBUNAL BECAUSE THE FINDINGS OF THE LD.CIT WAS ERR ONEOUS. THE GIST OF THE ORDER OF THE TRIBUNAL IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 124. IN THE PRESENT CASE, THE ISSUE RELATING TO T HE COST OF CONSTRUCTION OF BUILDING AT POES GARDEN, CHENNAI AND PROPERTY AT HYDERABAD ARE SUBJECT MATTER OF ASSESSM ENT FOR THE ASSESSMENT YEAR 1995-96 & 1996-97 AND THIS ISSUE HAS TRAVELLED UPTO CIT(A) AND THE CIT(A) HAS GIVEN DIRECTIONS REGARDING THIS ISSUE AND THESE DIRECTION S ARE TO 28 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 BE FOLLOWED BY THE ASSESSING OFFICER. SINCE IT IS A SUBJECT MATTER OF ASSESSMENT OF EARLIER ASSESSMENT YEAR, HE HAS NOT MADE ADDITION ONCE AGAIN ON THIS COUNT. THE ASS T.ORDER WAS PASSED ON 27.3.2000 AND THE APPELLATE ORDER WAS PASSED ON 29.12.99 VIDE ITA NOS.67 &65/99-2000. THE A.O IS BOUND TO FOLLOW THE ORDER OF THE HIGHER FORUM AND IT CANN OT BE SAID THAT THE A.O HAS COMMITTED ANY ERROR IN FOLLOWING T HE ORDER OF THE CLT(A) AND HE IS BOUND BY THE ORDER OF SUPERIOR AUTHORITIES AS HELD IN THE CASE OF GARDEN SILK MILLS LTD. VS. C LT (221 ITR 861). OTHER ISSUES DEALT IN ORDER U/S.263 RELATES T O CONSIDERATION DVAC REPORT. IN OUR OPINION, DVAC REP ORT IS NOT A RECORD UNDER THE ACT SINCE IT HAS NOT EMANATED FR OM THE PROCEEDINGS UNDER THE I.T. ACT AND IT IS NOT A SUBJ ECT MATTER OF MATERIAL USED IN THE ASSESSMENT PROCEEDINGS AND IT IS A STRANGE MATERIAL TO THE ASSESSMENT. UNDER SECTION 2 63, THE COMMISSIONER IS EMPOWERED TO CALL FOR AND EXAMINE T HE RECORDS OF ANY PROCEEDINGS UNDER THE I.T.ACT AND HE CAN EXAMINE RECORD RELATING TO THAT INCOME-TAX PROCEEDI NGS AND IN OUR OPINION, SEC.263 DOES NOT EMPOWER THE CIT TO EX AMINE THE RECORDS RELATING TO THE PROCEEDINGS OF THE ANY OTHER ACTS OTHER THAN THE INCOME TAX ACT. WE PLACE RELIANCE O N JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF CT T V5. GABRIEL INDIA LT D. 203 ITR 108) THE CASE LAW RELIED BY THE D.R. IN THE CASE OF MANJUNATHESWAR PACKING PRODUCTS CITED SUPRA IS NOT APPLICABLE TO THE FACTS OF THE CASE. FURTHER AS RIGHTLY POINTED OUT BY THE LD COUNSEL FOR THE ASSES SEE, REOPENING AND REVISION OF ASSESSMENT STAND ON TWO D IFFERENT FOOTING. ONE IS NOT A SUBSTITUTE TO THE OTHER. IN O UR OPINION, THE CIT WANTS TO RE-OPEN THE CONCLUDED ASSESSMENT THROU GH THE PROCEEDINGS U/S.263. WHAT CAN BE THE SUBJECT MATTER OF REASSESSMENT CAN BE DONE ONLY BY REOPENING OF THE ASSESSMENT AND NOT BY REVISION U/S.263. THIS IS BECAUSE THERE IS NO ASSESSMENT REGARDING THE ITEM CONSIDERED IN T HE DVAC REPORT. WHEN THERE IS NO ASSESSMENT ITSELF, THE QUE STION OF REVISION U/S.263 DOES NOT ARISE ON THIS ISSUE. IN THE PRESENT CASE IF THERE IS ESCAPEMENT OF ASSESSMENT ON THIS I SSUE AND IT SHOULD HAVE BEEN BROUGHT TO ASSESSMENT BY VIRTUE OF SEC.147 AND 148 OF THE ACT AND NOT UNDER SECTION 263 OF THE I.T. ACT AND THE REVISIONARY POWER U/S.263 CANNOT BE EXERCIS ED FOR ESCAPEMENT OF INCOME. WE TAKE SUPPORT FROM THE JUDGEMENT IN THE CASE OF BIDAR SAHAKAR SAKKARE KARKHANE LTD. VS. STATE OF KARNATAKA (1985) (58 STC 65).. FURTHER WE RELY ON THE JUDGMENT IN THE CASE OF H. KENCHE GOWDA VS. STATE OF KARNATAKA(1988)(174 /TR 389). 125. REGARDING THE MERIT, THE CIT HAS OBSERVED IN HIS REVISIONARY ORDER TO CONSIDER THE COST OF CONSTRUCT ION FOR ADDITION. AS WE DISCUSSED EARLIER, THIS HAS ALREADY BEEN A 29 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 SUBJECT MATTER OF APPEAL BEFORE THE CIT(A) FOR EAR LIER ASSESSMENT YEAR AND HE HAS ALREADY ADJUDICATED THE ISSUE AND HENCE THERE IS NO QUESTION OF FURTHER CONSIDERI NG THIS ISSUE BY THE A.A. NOW THIS IS ALSO SUPPORTED BY OUR ORDER WHEREIN WE HAVE CONFIRMED THE ORDER OF THE CLT(A). ON THIS GROUND ALSO ADDITION IS UNWARRANTED TOWARDS COST O F CONSTRUCTION. 126. REGARDING ADDITION TOWARDS JEWELLERV VEHICLES AND OTHER ASSETS AND FOOTWEAR AND SILK SAREES, THESE AD DITIONS CANNOT BE MADE ENTIRELY IN THE HANDS OF THE ASSESSE SINCE THERE PREMISES WHERE THESE WERE FOUND WERE SHARED B Y SMT. N. SASIKALA, J. ELAVARASI, SHRI. V.N.SUDHAKARAN AND OTHER PERSONS AND IT IS NOT POSSIBLE TO SAY TO WHOM THESE ASSETS EXACTLY BELONG. SINCE THERE IS NO CATEGORICAL EVIDE NCE TO BELIEVE THAT THIS COULD BE TREATED AS BELONGING ONLY TO THI S ASSESSEE AND IT IS TOO EARLY TO COME TO THE CONCLUSION THAT THES E BELONG TO THE ASSESSEE AND FASTEN THE LIABILITY OF PAYMENT OF TAX . THE CHARGE SHEET ALONE CAN NOT BE TREATED AS CONCLUSIVE EVIDENCE TO MAKE ADDITIONS. WE TAKE SUPPORT FROM. THE JUDGME NT OF THE SUPREME COURT IN THE CASE OF DISTRICT SUPERINTENDEN T OF POLICE, CHENNAI VS. K. INBASAGARAN (282 ITR 435). IN VIEW OF THE DISCUSSIONS IN FOREGOING PARAG RAPHS AND IN THE LIGHT OF VARIOUS JUDGMENTS DISCUSSED ABOVE, WE ANNUL THE ORDER OF THE CIT PASSED U/S.263 AND APPEAL OF THE A SSESSE IS ACCORDINGLY ALLOWED. 18. IN THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT THE ORDER PASSED BY THE LD.CIT U/S.25 OF THE W EALTH TAX ACT DOES NOT HAVE ANY LEGS TO STAND AS POINTED OUT BY THE LD.A.R. THEREFORE WE HEREBY QUASH THE ORDER PASSED BY THE LD.CIT U/S. 25 OF THE WEALTH TAX ACT. 30 ITA NO.1288/MDS/2008 & WTA NO.20/MDS/2008 19. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO.1288/MDS/2008 IS PARTLY ALLOWED AND THAT OF WTA NO.20/MDS/2008 IS ALLOWED IN FAVOUR OF THE ASSESSEE . ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH SEPTEMBER , 2016 SD/- SD/- ( ' # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 30 TH SEPTEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF