Maria Ramesh, CHENNAI V. ACIT Corporate Circle 1(2), CHENNAI

ITA 1313/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2519 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR ADD L
• Assessee Lawyers: N DEVANATHAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1313/CHNY/2018 & '& / ASSESSMENT YEAR : 2014-15 SMT. MARIA RAMESH, NEW NO.20, OLD NO.11, POES ROAD, 1 ST STREET, TEYNAMPET, CHENNAI - 600 018. PAN : AGRPM 5391 D V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(2), CHENNAI - 600 034. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SH. N. DEVANATHAN, ADVOCATE +,)* - . / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADD L.CIT / - 0' / DATE OF HEARING : 27.09.2018 12' - 0' / DATE OF PRONOUNCEMENT : 01.11.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNA I, DATED 26.03.2018 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2 I.T.A. NO.1313/CHNY/18 2. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSEE PURCHASED PROPERTIES IN AUSTRALIA AND SINGAPORE AFTER BORROWING LOAN IN THE YEAR 2010. D URING THE FINANCIAL YEAR 2015-16 RELEVANT TO ASSESSMENT YEAR 2016-17, ACCORDING TO THE LD. COUNSEL, THE ASSESSEE SOLD THE PROPERTY IN AUSTRALIA. THE ASSESSEE EXPLAINED BEFORE THE ASSES SING OFFICER THAT ONE SHRI BALAMURUGAN MADE INVESTMENT IN THE NA ME OF THE ASSESSEE TO THE EXTENT OF 90,61,014/-. ACCORDING TO THE LD. COUNSEL, THE SAID BALAMURUGAN, IN FACT, GAVE A LOAN OF 1,81,22,028/-. THE ASSESSING OFFICER FOUND THAT TH E PROPERTY WAS PURCHASED IN THE NAME OF ASSESSEE AND HER HUSBAND, THEREFORE, 50% OF THE LOAN AMOUNT 1,81,22,028/- WAS TREATED AS INVESTMENT BY THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER DISBELIEVED THE CLAIM OF LOAN FROM SHRI BAL AMURUGAN AND MADE ADDITION OF 90,61,014/- IN THE HANDS OF THE ASSESSEE FOR ASSESSMENT YEAR 2014-15, WHICH IS UNDER CONSIDERATI ON. HOWEVER, ACCORDING TO THE LD. COUNSEL, IN RESPECT OF THE VER Y SAME LOAN, NO ADDITION WAS MADE IN THE HANDS OF THE ASSESSEES HU SBAND FOR THE ASSESSMENT YEAR 2014-15. THEREFORE, ACCORDING TO T HE LD. COUNSEL, THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE AS SESSEE ALONE. 3 I.T.A. NO.1313/CHNY/18 ACCORDING TO THE LD. COUNSEL, WHEN THE GENUINENESS OF LOAN TRANSACTION WAS ACCEPTED IN THE CASE OF ASSESSEES HUSBAND SHRI PALLAVARAM KOTHANDARAMAN RAMESH AND THE ASSESSING O FFICER ACCEPTED THE INVESTMENT, THE VERY SAME LOAN CANNOT BE DOUBTED IN THE HANDS OF THE ASSESSEE ALONE. MOREOVER, ACCORDI NG TO THE LD. COUNSEL, THE ASSESSEE INVESTED THE FUNDS IN THE YEA R 2010, THEREFORE, ADDITION IF ANY HAS TO BE MADE IN THE FI NANCIAL YEAR 2010- 11 RELEVANT TO ASSESSMENT YEAR 2011-12. EVEN ASSUM ING THAT THE LOAN TRANSACTION WAS NOT GENUINE, ACCORDING TO THE LD. COUNSEL, THERE CANNOT BE ANY ADDITION / DISALLOWANCE DURING THE YEAR. REFERRING TO ASSESSMENT ORDER, THE LD.COUNSEL POINT ED OUT THAT THE ASSESSING OFFICER HIMSELF POINTS OUT THAT THE PROPE RTY WAS SOLD DURING THE FINANCIAL YEAR 2015-16. THEREFORE, THE ASSESSING OFFICER CANNOT DISALLOW THE LOAN FOR THE YEAR UNDER CONSIDE RATION. ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS N OT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER. 3. ON THE CONTRARY, SHRI R. CLEMENT RAMESH KUMAR, T HE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSING OFFICER FOUND THAT THE ASSESSEE PURCHASED PROPERTY DURING T HE FINANCIAL 4 I.T.A. NO.1313/CHNY/18 YEAR 2013-14 AND DURING THE FINANCIAL YEAR 2015-16, THE PROPERTY IN AUSTRALIA WAS SOLD. THEREFORE, WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE SOURCE FOR MAKING INVESTM ENT IN THE PROPERTY AT AUSTRALIA AND SINGAPORE, THE ASSESSEE E STABLISHED THE SOURCE FOR MAKING INVESTMENT PARTIALLY. HOWEVER, T HE CLAIM OF ASSESSEE THAT SHE BORROWED LOAN TO THE EXTENT OF 1,81,22,028/- ALONG WITH HER HUSBAND FROM ONE SHRI BALAMURUGAN WA S NOT ESTABLISHED, THEREFORE, THE ASSESSING OFFICER DISBE LIEVED THE CLAIM OF THE ASSESSEE REGARDING BORROWAL OF LOAN. ACCOR DINGLY, THE ASSESSING OFFICER MADE ADDITION WITH REGARD TO 50% OF THE LOAN AMOUNT IN THE HANDS OF THE ASSESSEE. THE LD. D.R. VERY FAIRLY SUBMITTED THAT FOR THE ASSESSMENT YEAR 2014-15, IN THE CASE OF ASSESSEES HUSBAND SHRI PALLAVARAM KOTHANDARAMAN RA MESH, NO ADDITION WAS MADE WITH REGARD TO SOURCE OF INVESTME NT. HOWEVER, FOR THE ASSESSMENT YEAR 2015-16, THE ASSESSING OFFI CER MADE ADDITION OF 85,11,654/- IN THE HANDS OF THE ASSESSEES HUSBAND. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER MADE ADDITION OF 85,11,654/- IN RESPECT OF THE VERY SAME LOAN IN THE HANDS OF THE ASSESSEES HUSBAND FOR THE ASSESSMENT YEAR 2015-16. ON A QUERY FROM THE BENCH, WHEN ADDITION WAS MADE I N THE HANDS 5 I.T.A. NO.1313/CHNY/18 OF THE ASSESSEES HUSBAND FOR THE ASSESSMENT YEAR 2 015-16, IN RESPECT OF THE VERY SAME LOAN, ON SALE OF VERY SAME PROPERTY IN AUSTRALIA, HOW THERE CAN BE ANY ADDITION IN THE HAN DS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION? THE LD. D.R. SUBMITTED THAT HE IS LEAVING THE MATTER TO THE DECISION OF TH IS TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE PURCHASED PROPERTIES AT S INGAPORE AND AUSTRALIA. DURING THE FINANCIAL YEAR 2015-16, THE ASSESSEE SOLD PROPERTY AT AUSTRALIA. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE SOURCE FOR INVESTMENT IN THE PROPERTY AT AUSTRALIA AND SINGAPORE TO THE EXTENT OF 2,05,62,211/-. THE ASSESSEES EXPLANATION WITH REGARD TO LOAN BORROWED FROM SHRI BALAMURUGAN WAS DISBELIEVED AND 50% OF LOAN AMOUNT WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. THE CONTENTION OF THE ASSESSEE BEFORE THIS TRIBU NAL IS THAT THE PROPERTY WAS PURCHASED BORROWING LOAN FROM SHRI BALAMURUGAN IN THE FINANCIAL YEAR 2010-11 AND THE PROPERTY AT A USTRALIA WAS ADMITTEDLY SOLD DURING THE FINANCIAL YEAR 2015-16. THEREFORE, THERE 6 I.T.A. NO.1313/CHNY/18 CANNOT BE ANY ADDITION DURING THE YEAR UNDER CONSID ERATION. IN RESPECT OF VERY SAME PROPERTY AT AUSTRALIA, THE ASS ESSING OFFICER MADE ADDITION OF 85,11,654/- IN THE HANDS OF THE ASSESSEES HUSBAND FOR THE FINANCIAL YEAR 2014-15 RELEVANT TO ASSESSMENT YEAR 2015-16. FOR THE ASSESSMENT YEAR 2014-15 IN RESPEC T OF VERY SAME PROPERTY AND VERY SAME LOAN, NO ADDITION WAS MADE I N THE HANDS OF THE ASSESSEES HUSBAND. THEREFORE, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDITIO N IN THE HANDS OF THE ASSESSEE ALSO FOR ASSESSMENT YEAR 2014-15, WHIC H IS UNDER CONSIDERATION. IN OTHER WORDS, THERE WAS NO INVEST MENT OR SALE OF PROPERTY DURING THE YEAR UNDER CONSIDERATION. THER EFORE, NO QUESTION OF ANY DISALLOWANCE / ADDITION WOULD ARISE FOR CONSIDERATION IN RESPECT OF THE PROPERTY AT AUSTRALIA AND SINGAPO RE DURING THE YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITIO N OF 90,61,014/- IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7 I.T.A. NO.1313/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 1 ST NOVEMBER, 2018 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 1 ST NOVEMBER, 2018. KRI. - +056 76'0 /COPY TO: 1. )*/ APPELLANT 2. +,)*/ RESPONDENT 3. / 80 () /CIT(A)-1, CHENNAI 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.