S.Mohan Kumar, CHENNAI V. ACIT, CHENNAI

ITA 1325/CHNY/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8004 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN C BHARATH
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained investment; Principle of natural justice; Peak credit; Additional evidence; Reasonable cause; Bad and doubtful debts; Condonation of delay
• Section: 143(3); 68; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.1323 TO 1325/MDS/2014 ( / ASSESSMENT YEARS: 2007-08, 2006-07 & 2008-09) MR. S.MOHAN KUMAR, 18, HUNTERS ROAD, CHOOLAI, CHENNAI-600 112. VS THE ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE-IV(2), CHENNAI. PAN:AAGPM3050N ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NOS.1425 TO 1428/MDS/2013 ( / ASSESSMENT YEARS: 2005-06 TO 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE-IV(2), CHENNAI. VS MR. S.MOHAN KUMAR, 18, HUNTERS ROAD, CHOOLAI, CHENNAI-600 112. PAN:AAGPM3050N ( /APPELLANT) ( /RESPONDENT) ASSESSEE BY : MR. S.SRIDHAR,., ADVOCATE REVENUE BY : MR . ARUN C.BHARATH , CIT /DATE OF HEARING : 4 TH FEBRUARY, 2016 /DATE OF PRONOUNCEMENT : 12 TH FEBRUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- OUT OF THESE SEVEN APPEALS, THREE ARE FILED BY THE ASSESSEE AND FOUR ARE FILED BY THE REVENUE AGGRIEVE D BY THE COMMON ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, CHENNAI DATED 27.03.2013 IN ITA NOS.135,136,311 TO 313/09-10 PASSED UNDER SECTION 1 53A READ WITH SECTION 143(3) & 250 OF THE ACT. 2 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 2. THE ASSESSEE HAS FILED THESE THREE APPEALS WITH THE DELAY OF 350 DAYS WHILE AS THE REVENUE HAS FILED TH ESE FOUR APPEALS WITH THE DELAY OF 5 DAYS. THE ASSESSEE FILE D AN AFFIDAVIT FOR CONDONATION OF DELAY BY STATING THAT HE WAS HOSPITALIZED OWING TO CORONARY ANGIOPLASTY AT APOLL O HOSPITAL, CHENNAI. FURTHER DUE TO THE SHIFTING OF THE OFFICE OF THE LEARNED AUTHORIZED REPRESENTATIVE, THE APPEAL PAPER S OF THE ASSESSEE WAS MISPLACED WHICH LED TO THE DELAY IN FI LING OF THESE APPEALS. THEREFORE, THE ASSESSEE PRAYED FOR CONDONATION OF DELAY IN FILING OF THESE THREE APPEA LS. THE REVENUE ALSO FILED A PETITION FOR CONDONATION OF DE LAY STATING THAT DUE TO THE TRANSFER OF OFFICERS AND STAFF AND ALSO ON ACCOUNT OF SHORTAGE OF STAFF, THESE FOUR APPEALS WE RE FILED WITH A MEAGER DELAY OF FIVE DAYS AND PRAYED FOR CON DONATION OF DELAY IN THESE FOUR APPEALS. WE HAVE CONSIDERED THE REASONS FOR THE DELAY IN FILING THE APPEALS BY BOTH THE PARTIES. SINCE THERE IS REASONABLE CAUSE FOR THE DELAY IN FI LING OF APPEALS BY BOTH THE PARTIES, IN THE INTEREST OF JUS TICE, WE HEREBY CONDONE THE DELAY IN FILING OF THESE APPEALS BY THE 3 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 ASSESSEE AS WELL AS BY THE REVENUE AND THEREBY ADMI T ALL THE APPEALS. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THESE THREE APPEALS:- ITA NO.1323/MDS/2014 (ASSESSMENT YEAR 2007-08):- THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWI NG GROUNDS:- (I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN SUSTAINING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER TO THE TUNE OF ` 4,76,15,000/- BEING RECEIVABLES. (II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN ACCEPTING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE AMOUNTS ADVANCED WITH AN ADDITION OF THREE ZEROS. (III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE ORDER O F SEARCH ASSESSMENT UNDER CONSIDERATION WAS PASSED OUT OF TIME, INVALID AND WITHOUT JURISDICTION AND N OT SUSTAINABLE IN LAW. (IV) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS N O PROPER OPPORTUNITY GIVEN BEFORE PASSING THE IMPUGNE D ORDER AND ANY ORDER PASSED IN VIOLATION OF PRINCIPL ES OF NATURAL JUSTICE WOULD BE NULLITY IN LAW. ITA NO.1324/MDS/2014 (ASSESSMENT YEAR: 2006-07):- 4 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWI NG GROUNDS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO ADJUDICATE THE GROUND NO.2 RAISED BY THE ASSESSEE BEFORE HIM IN RELATION TO THE ADDITION OF ` 30,00,000/- BEING UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER TO THE TUNE OF ` 7,55,00,000/- BEING UNEXPLAINED INVESTMENT MADE IN M/S.SURANA SALES CORPORATION. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ACCEPTING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE AMOUNTS ADVANCED WITH AN ADDITION OF THREE ZEROS. IV) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE ORDER OF SEARCH ASSESSMENT UNDER CONSIDERATION WAS PASSED OUT OF TIME, INVALID AND WITHOUT JURISDICTIO N AND NOT SUSTAINABLE IN LAW. V) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING THE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE WOULD BE NULLITY I N LAW. 5 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 ITA NO.1325/MDS/2014 (ASSESSMENT YEAR 2008-09):- THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWI NG GROUNDS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF ` 24,49,98,000/- BEING RECEIVABLES. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ACCEPTING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE AMOUNTS ADVANCED WITH AN ADDITION OF THREE ZEROS. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY CONFIRMING THE ADDITION OF ` 1,55,12,283/- BEING AMOUNT PAYABLE TO MR. MURUGESAN AND MR.SIVARAMAN UNDER SECTION 68 OF THE ACT. IV) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY SUSTAINING THE ADDITIONS OF ` 45,00,000/- - MADE BY THE ASSESSING OFFICER ON THE BASIS OF PRESUMPTION. V) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY SUSTAINING THE ADDITIONS OF ` 45,50,000/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF PRESUMPTION. 6 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 VI) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE ORDER OF SEARCH ASSESSMENT UNDER CONSIDERATION WAS PASSED OUT OF TIME, INVALID AND WITHOUT JURISDICTION AND NOT SUSTAINABLE IN LAW. VII) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING THE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE WOULD BE NULLITY IN LAW. 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS FOUR APPEALS:- ITA NO.1425/MDS/2013: (ASSESSMENT YEAR : 2005-06): THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION MADE BY THE ASSESSING OFFICER IN RELATION TO THE ADVANCE PAID TO SRI VALLIAMMAL SOCIETY AMOUNTING TO ` 12,00,000/- IN THE ABSENCE OF ANY CONCRETE EVIDENCE. ITA NO.1426/MDS/2013:(ASSESSMENT YEAR 2006-07): I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION OF ` 9,52,25,000/- MADE BY THE ASSESSING OFFICER TOWARDS BAD DEBTS. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION OF ` 53,62,962/- MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED INVESTMENT IN BANK ACCOUNTS IN THE NAME OF FAMILY MEMBERS. 7 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 ITA NO.1427/MDS/2013:(ASSESSMENT YEAR 2007-08): I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION OF ` 5,88,00,000/- MADE BY THE ASSESSING OFFICER TOWARDS BAD DEBTS. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION AS ` 15,00,000/- MADE BY THE ASSESSING OFFICER TOWARDS INVESTMENT IN LAND AT MYLAPORE. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DIRECTING THE ASSESSING OFFICER TO ARRIVE AT PEAK CREDIT FOR THE ASSESSMENT YEAR 2007-08 IN RELATION TO THE ADDITION MADE IN RESPECT OF BALANCE OF DEBTORS WHEN THE ASSESSING OFFICER HAD ALREADY WORKED OUT ON THE SAME BASIS. ITA NO.1428/MDS/2013(ASSESSMENT YEAR : 2008-09): I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION OF ` 34,50,000/- MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED CASH. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DELETING THE ADDITION OF ` 50,00,000/- MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED INVESTMENT IN LAND. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DIRECTING THE ASSESSING OFFICER TO ARRIVE AT PEAK CREDIT FOR THE ASSESSMENT 8 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 YEAR 2008-09 IN RELATION TO THE ADDITION MADE IN RESPECT OF BALANCE OF DEBTORS WHEN THE ASSESSING OFFICER HAD ALREADY WORKED OUT ON THE SAME BASIS. 5. AT THE OUTSET, THE LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS GIVEN RELIEF TO THE ASSESSEE BASED ON ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE BEFOR E THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR TH E FIRST TIME. IT WAS THEREFORE ARGUED THAT THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) HAS NOT COMPLIED WITH THE R ULE 46A OF THE INCOME TAX RULES BY OBTAINING REMAND REPORT FROM THE LEARNED ASSESSING OFFICER BEFORE ARRIVING AT HIS DE CISION AND THEREBY AFFORDING AN OPPORTUNITY TO THE LEARNED ASS ESSING OFFICER TO EXAMINE THE FRESH EVIDENCE FURNISHED BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) FOR DE NOVO CONSIDERATION AND FOR OBTAINING A REMAND REPORT FROM THE LEARNED ASSESSIN G OFFICER THEREBY PROVIDING AN OPPORTUNITY TO THE LEARNED ASS ESSING 9 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 OFFICER TO EXAMINE THE FRESH EVIDENCE SUBMITTED BY THE ASSESSEE. 6. THE LEARNED AUTHORIZED REPRESENTATIVE COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LEARNED DEPART MENTAL REPRESENTATIVE. HE PLEADED THAT IF THE BENCH DECIDE S TO REMIT THE APPEALS OF THE REVENUE TO THE FILE OF THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS), THEN THE ASSE SSEES APPEALS MAY ALSO BE REMITTED BACK TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH CONSIDERATION. THE LEARNED D.R. DID NOT HAVE ANY O BJECTION FOR THE SAME. 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. ON EXAMINING TH E ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ADMITTED FRESH EVIDENCE AND WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE FRESH EVIDENCE HAS DECIDED THE APPEALS, WHICH IS IN VIOLA TION OF RULE 46A OF INCOME TAX RULES. FURTHER, CONSIDERING THE 10 ITA NOS.1323 TO 1325 /MDS/2014 & ITA NOS.1425 TO 1428/MDS/2013 PRAYER OF THE LEARNED AUTHORIZED REPRESENTATIVE, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT BACK ALL THE D EPARTMENT APPEALS AND ASSESSEES APPEALS TO THE FILE OF LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) FOR DE NOVO CONSIDERATION AND TO PASS APPROPRIATE ORDERS IN ACC ORDANCE WITH LAW AND MERIT BY ADHERING TO RULE 46A OF THE R ULES. WE ALSO HEREBY DIRECT THE ASSESSEE TO CO-OPERATE WITH THE REVENUE IN THE PROCEEDINGS IN ORDER TO EXPEDITE THE IR ORDERS. 8. IN THE RESULT, THE APPEALS OF THE REVENUE AS WEL L AS THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES AS IN DICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 12 TH FEBRUARY, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) ! # / JUDICIAL MEMBER # / ACCOUNTANT MEMBER ! /CHENNAI, ' /DATED 12 TH FEBRUARY, 2016 SOMU )* +* /COPY TO: 1. APPELLANT 2. RESPONDENT 3. , () /CIT(A) 4. , /CIT 5. * 0 /DR 6. /GF