G.Sasimala, Sivakasi V. DCIT, Madurai

ITA 1311/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95937 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOHI IRS
• Assessee Lawyers: V RAJASEKARAN
• Keywords: Unexplained investment; Revised return
• Section: 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH, CHENNAI , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A. NO.1311 /MDS/2015 ( / ASSESSMENT YEARS : 2007-2008 ) SMT. G. SASIMALA NO.53, SATCHIAPURAM ROAD, THIRUTHANGAL, SIVAKASI 626 130. [PAN: AQBPS 8228F] VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, MADURAI. ./ I.T.A. NOS.1312 /MDS/2015 ( / ASSESSMENT YEARS : 2007-2008 ) SHRI. K. GRAHALAXMI, NO.53, SATCHIAPURAM ROAD, THIRUTHANGAL, SIVAKASI 626 130. [PAN: AFKPG 5273N] ( /APPELLANT) VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, MADURAI. ( !' /RESPONDENT) / APPELLANT BY : SHRI. V. RAJASEKARAN, C.A. / RESPONDENT BY : SHRI. A.B. KOHI, IRS, JCIT. /DATE OF HEARING : 28.08.2015 /DATE OF PRONOUNCEMENT : 04.09.2015 # / O R D E R THESE TWO APPEALS BY DIFFERENT ASSESS EES ARE DIRECTED AGAINST DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-19, I.T.A.NOS.1311 & 1312/MDS/2015. :- 2 -: CHENNAI, DATED 25.02.2015 FOR THE ASSESSMENT YEAR 2007-2008. SINCE THE ISSUE IN THESE TWO APPEALS IS COMMON IN NATURE, HENCE THESE APPEALS ARE COMBINED, HEARD TOGETHER, AND DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GRIEVANCE OF THE ASSESSEES IN THESE APPEALS IS WITH REGARD TO CONFIRMING ADDITION TOWARDS INVESTMENT IN SQNY S TONES PRIVATE LIMITED G2.00 LACS OUT OF ASSESSEES OWN PERSONAL I NCOME. 3. SINCE THE ISSUE IS COMMON IN BOTH APPEALS, I CONSID ER THE FACTS AS NARRATED IN ITA NO.1311/MDS/2015 FOR ADJUDICATI ON. 4. THE FACTS OF THE CASE ARE THAT THERE WAS A SEARCH U/S.132 OF THE ACT IN THE CASE OF M/S. SONY FIREWORKS PRIVATE LIMI TED AND ITS SISTER CONCERNS M/S. AMAR PACKAGING INDUSTRIES AND M/S. AB I FIREWORKS AGENCIES AND IN THE RESIDENTIAL PREMISES OF SHRI. P . PANJURAJAN, THE FOUNDER OF THE GROUP CONCERNS AT NO.52 & 53, SATCHI APURAM ROAD, THIRUTHANGAL. THE ASSESSEE BEING ONE OF THE PARTNE RS OF M/S. AMAR PACKIKNG INDUSTRIES AND M/S. ABI FIREWORDS AGENCIES WERE ALSO SEARCHED. BOOKS OF ACCOUNTS, DOCUMENTS AND OTHER M ATERIALS RELATING TO THE ASSESSEE AND THE GROUP CONCERNS WERE FOUND A ND I.T.A.NOS.1311 & 1312/MDS/2015. :- 3 -: SEIZED/IMPOUNDED. SUBSEQUENTLY, RELEVANT STATUTORY NOTICES WERE ISSUED. IN RESPONSE, THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-2008 ON 31.12.2009 ADMITTING A N INCOME OF G4,34,403/- AND AGRICULTURAL INCOME OF G76,500/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) R.W.S. 153A OF THE ACT ON 27.12.2010 BY ASSESSING THE INCOME AT G12,06,373/- BY MAKING ADDITIONS ON ACCOUNT OF ADDITIONAL INCOME RELATING TO M/S. ABI FIREWORKS AGENCIES OFFERED IN THE REVISED RETURN AN D UNEXPLAINED INVESTMENT OF G2,00,000/- IN M/S. SQNY STONES P. LT D. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS) 5. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT DURING THE YEAR THE ASSESSEE INVESTED G17,43,5 00/- AS SHARE CAPITAL IN M/ S. SQNY STONES P. LTD. THE ASSE SSEE FILED A REPLY DATED 02.12.2010 EXPLAINING THE SOURCE FOR THE INVESTMENT. THE SOURCE FOR THE INVESTMENT WAS BY WA Y OF LOAN FROM SBI, LIC POLICY LOAN, WITHDRAWAL FROM M/S . CHINDIA GRANITES AND PERSONAL INCOME. THE AO ACCEPTED THE S OURCES IN RESPECT OF WHICH EVIDENCES/DETAILS WERE FURNISHE D BEFORE HIM IN ASSESSMENT PROCEEDINGS. THE ASSESSEE HAD N OT I.T.A.NOS.1311 & 1312/MDS/2015. :- 4 -: FURNISHED DETAILS WITH REGARD TO PERSONAL INCOME. T HE ASSESSING OFFICER THUS, MADE THE ADDITION OF G2,00 ,000/- FOR THE REASON THAT THE ASSESSEE HAD NOT EXPLAINED TH E SOURCES FOR THE SAID PART CAPITAL INTRODUCED WITH M/ S. SQN Y GRANITES. THE ASSESSEE CONTENDED THAT THE SOURCE OF INVESTMEN T OF G 2 LAKHS IN M/ S. SQNY GRANITES IS PERSONAL INCOME. TH E ASSESSEE HAS RELIED ON A DECISION OF THE TRIBUNAL IN THE CAS E OF P. GANESAN IN ITA NO. 2011/MDS/2013 . THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF THE SUPREME COURT IN CIT V. S NELLIPPARN . THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL OR EVIDENCE ON RECORD TO SHOW THAT THERE WAS A CONNECTI ON BETWEEN PERSONAL INCOME AND INVESTMENT OF G2 LAKHS I N M/S. SQNY GRANITES. UNLESS A CONNECTION BETWEEN PERSONAL INCOME AND THE INVESTMENT IS ESTABLISHED, THE SOURCE OF IN VESTMENT CANNOT BE SAID TO BE PROVED. THE RELIANCE OF THE AS SESSEE ON THE DECISION IN THE CASE OF S.NELLIAPPAM (SUPRA) IS MISPLACED IN AS MUCH AS IN THE SAID CASE THE HIGHEST FACT-FINDIN G AUTHORITY HAD BEEN HELD TO HAVE INFERRED THAT THERE WAS A CON NECTION BETWEEN THE PROFITS WITHHELD FROM THE BOOKS AND THE CASH CREDIT ENTRIES, WHEREAS IN THE PRESENT CASE, NO MATERIAL OR EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THERE I.T.A.NOS.1311 & 1312/MDS/2015. :- 5 -: WAS CONNECTION BETWEEN THE PERSONAL INCOME OFFERED IN THE REVISED RETURN OF INCOME FILED (AS AGAINST RETURN O F INCOME IN RESPONSE TO NOTICE U/S.153A) AND THE AFORESAID INVE STMENT OF G2 LAKHS. NO DETAILS OF PERSONAL INCOME HAVE BEEN F URNISHED EVEN DURING APPEAL PROCEEDINGS. EVEN DURING THE CO URSE OF APPEAL PROCEEDINGS NOTHING HAS BEEN BROUGHT ON REC ORD TO EVIDENCE THE SOURCE OF THE AFORESAID INVESTMENT. AS ALREADY DISCUSSED NO MATERIAL OR EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THERE IS CONNECTION B ETWEEN THE PERSONAL INCOME AND THE SOURCE OF THE AFORESAID CAP ITAL OF G2,00,000/- INTRODUCED WITH M/S. SPNY GRANITES. IN THE ABSENCE OF ANY MATERIAL OR EVIDENCE BROUGHT ON RECORD, THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ORD ER OF THE ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 6. BOTH SIDES HEARD. THE ASSESSEE FILED A COPY O F THE BALANCE SHEET IN BOTH CASES AS ON 31.03.2007, EXPLAINING TH E ASSETS AND LIABILITIES AND SUBMITTED THAT INVESTMENT IN SQNY S TONES (P) LTD WAS PROPERLY EXPLAINED. I HAVE GONE THROUGH THE BALANC E SHEET FILED BY BOTH PARTIES. IN THE CASE OF G. SASIMALA THERE WAS AN INVESTMENT OF I.T.A.NOS.1311 & 1312/MDS/2015. :- 6 -: G17,43,500/- AND THE ASSESSEE PLEADED THAT THE AMO UNT WAS CONTRIBUTED FROM OWN CAPITAL AND RESERVE AND SURPLU S. SIMILARLY, THERE WAS AN INVESTMENT OF G20,01,500/- BY K. GRAHALAKSHM I, THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS CONTRIBUTED FROM OWN CAPITAL AND RESERVE AND SUPPLY. BEING SO, THERE IS NO UNEXPLAIN ED INVESTMENT IN THE HANDS OF THE ASSESSEES TO BRING INTO TAX. ACCO RDINGLY, I INCLINED TO DELETE THE ADDITION OF G2.00 LACS EACH IN BOTH CASE S. THE APPEALS OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE IN ITA NO.1311 & 1312/MDS/2015 ARE ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 4TH DAY OF SEPTEMB ER, 2015, AT CHENNAI. SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' /CHENNAI. #$ /DATED:04.09.2015. KV $% &' (' /COPY TO: 1. ) APPELLANT 2. / RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. '+, - /DR 6. ,. / /GF. I.T.A.NOS.1311 & 1312/MDS/2015. :- 7 -: