R.Vadivelrajan, Tuticorin V. Additional CIT, Madurai

ITA 1360/CHNY/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0817 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 18-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM IRS
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Unexplained investment
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1359(MDS)/2010 ASSESSMENT YEAR : 2007-08 SMT. R.V.JANSI, 2/3C/1, IV ST., GANESH NGR., TUTICORIN-628 008. PAN ABUPR6612C. VS. THE ADDITIONAL COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE III, MADURAI. (APPELLANT) (RESPONDENT) ITA NO.1360(MDS)/2010 ASSESSMENT YEAR : 2007-0 8 SHRI R.VADIVELRAJAN, THE ADDITIONAL 2/3C/1, IV ST., GANESH NGR., VS. COMMISSIONE R OF INCOME- TUTICORIN-628 008. TA X, CENTRAL CIRCLE III, PAN AAVPV3017F. MADURAI. (APPELLANT) (RESPONDENT) AND ITA NO.1456(MDS)/201 0 ASSESSMENT YEAR : 2004- 05 THE ASSISTANT COMMISSIONER SHRI R.VADI VELRAJAN, OF INCOME-TAX, CENTRAL VS. 2/3C/1, IV ST., GANESH CIRCLE III, MADURAI. NAGAR, TUTICORIN. (APPELLANT) (RESPONDENT) ASSESSEES BY : SHRI V.S.JAYAKUMAR, ADVO CATE DEPARTMENT BY : SHRI GURU BHASHYAM, IRS, JCIT DATE OF HEARING : 4 TH FEBRUARY, 2013 DATE OF PRONOUNCEMENT : 5 TH FEBRUARY, 2013 - - ITA 1359, 1360 & 1456 OF 2010 2 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THESE ARE THREE INCOME-TAX APPEALS. TWO APPEALS ARE FILED BY THE ASSESSEES FOR THE ASSESSMENT YEAR 2007 -08. ONE APPEAL IS FILED BY THE REVENUE FOR THE ASSESSMENT Y EAR 2004-05 IN THE CASE OF SHRI R.VADIVELRAJAN. 2. THE ASSESSEES APPEALS ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I I AT MADURAI, DATED 1-7-2010 AND 11-6-2010. THE APPEALS ARISE OUT OF THE RESPECTIVE ASSESSMENTS COMPLETED UNDER SECTI ON 143(3), READ WITH SECTIONS 153A/153C OF THE INCOME-TAX ACT, 1961. 3. THE APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II AT MADURAI, DATED 11-6-2010 AND ARISES OUT OF THE ASSESSMENT CO MPLETED UNDER SECTION 143(3), READ WITH SECTION 153A OF THE INCOME-TAX ACT, 1961. 4. FIRST WE WILL CONSIDER THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2004-05, IN THE CAS E OF SHRI R.VADIVELRAJAN. - - ITA 1359, 1360 & 1456 OF 2010 3 5. WHILE COMPLETING THE SEARCH ASSESSMENT IN THE PRESENT CASE, THE ASSESSING OFFICER HAS MADE AN ADD ITION OF ` 12,99,304/- BY WAY OF UNEXPLAINED CASH DEPOSITS MA DE BY THE ASSESSEE IN HIS SAVINGS BANK ACCOUNT WITH TAMILNAD MERCANTILE BANK LIMITED, TUTICORIN. THE DEPOSITS WERE FOUND F ROM THE PERIOD 14-2-2003 TO 16-10-2003. THE ASSESSEE WAS A SKED TO EXPLAIN AS TO WHY THESE DEPOSITS SHOULD NOT BE TREA TED AS UNEXPLAINED INCOME OF THE ASSESSEE. THE ASSESSEE R EPLIED THAT THE SAVINGS BANK ACCOUNT IS REFLECTED IN THE BOOKS OF ACCOUNT MAINTAINED BY HIM AND THE BALANCE IN THE ACCOUNT IS REFLECTED IN THE TRIAL BALANCE FILED BY THE ASSESSEE ALONGWITH H IS RETURN OF INCOME FILED FOR THE ASSESSMENT YEARS 2003-04 AND 2 004-05. THEREAFTER, THE ASSESSEE EXPLAINED THAT THIS ACCOUN T WAS OPENED TO HELP ONE MR. SENTHILNAYAGAM, WHO WAS MANA GING THE INDIAN OIL CORPORATIONS RETAIL OUTLET AT MELA ARAS ARADI, ABOUT 12 KMS. FROM TUTICORIN. THE RETAIL OUTLET WAS COMP ANY-OWNED AND COMPANY-OPERATED AND MR. SENTHILNAYAGAM WAS WOR KING ON A JOB CONTRACT BASIS. THE ASSESSEE HELPED HIM TO P URCHASE DEMAND DRAFTS FAVOURING INDIAN OIL CORPORATION TO E FFECT PAYMENTS TOWARDS THE COST OF DIESEL AND PETROLEUM P RODUCTS AND - - ITA 1359, 1360 & 1456 OF 2010 4 ALL THE CASH DEPOSITS MADE BY THE ASSESSEE WERE IN FACT MONEYS HANDED OVER BY MR.SENTHILNAYAGAM FOR THE PURCHASE O F DEMAND DRAFTS. 6. THE ABOVE EXPLANATIONS WERE NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT SHRI SENTHILNA YAGAM COULD HAVE OPENED HIS OWN ACCOUNT FOR INDIAN OIL CORPORAT ION LTD., WHERE BANK BRANCHES ARE AVAILABLE IN PLENTY. ACCOR DINGLY, HE MADE THE ADDITION OF ` 12,99,304/-. 7. IN FIRST APPEAL, THE COMMISSIONER OF INCOME- TAX(APPEALS) EXAMINED THE ISSUE IN DETAIL. HE PERU SED THE AFFIDAVIT FILED BY MR. SENTHILNAYAGAM, WHERE HE HAS EXPLAINED ABOUT THE FACTUAL MATRIX OF THE CASE. THE COMMISSI ONER OF INCOME-TAX(APPEALS) ALSO ASKED THE DETAILS FROM THE ADDITIONAL COMMISSIONER OF INCOME-TAX, WHO HAD REPLIED TO THE COMMISSIONER OF INCOME-TAX(APPEALS) THROUGH HIS LET TER DATED 23-10-2008. ON GOING THROUGH ALL THESE DETAILS, TH E COMMISSIONER OF INCOME-TAX(APPEALS) FOUND THAT THE FACTS WERE TRUE, AS STATED BY THE ASSESSEE, AND SUPPORTED BY MR.SENTHILNAYAGAM AND AT THAT POINT OF TIME NO BANK BRANCH WAS AVAILABLE IN THE VICINITY OF THE INDIAN OIL CORPORA TIONS FUEL - - ITA 1359, 1360 & 1456 OF 2010 5 STATION. THE COMMISSIONER OF INCOME-TAX(APPEALS) A LSO FOUND THAT FOR EVERY CASH DEPOSIT MADE IN THE SAVINGS BAN K ACCOUNT, A CORRESPONDING DEMAND DRAFT WAS PURCHASED IN THE NAM E OF MR.SENTHILNAYAGAM, FAVOURING INDIAN OIL CORPORATION LIMITED. IN VIEW OF THE ABOVE CIRCUMSTANCES, THE COMMISSIONER O F INCOME- TAX(APPEALS) DELETED THE ADDITION. 8. IT IS AGAINST THE ABOVE ORDER OF THE COMMISSION ER OF INCOME-TAX(APPEALS) DELETING THE ADDITION OF ` 12,99,304/- THAT THE REVENUE HAS COME IN APPEAL BEFORE US. ON GOING THROUGH THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT T HE COMMISSIONER OF INCOME-TAX(APPEALS) HAS MADE A JUDI CIOUS FINDING ON THIS ISSUE. IN FACT, THE DETAILS OF THE SAVINGS BANK ACCOUNT THE ASSESSEE HAD WITH TAMILNAD MERCANTILE B ANK LIMITED, WHICH WAS THE SUBJECT MATTER OF DISPUTE, W ERE VERY MUCH REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSES SEE. IN THE STATEMENT OF ACCOUNTS FILED BY THE ASSESSEE ALONGWI TH HIS RETURN OF INCOME, THE SAVINGS BANK ACCOUNT BALANCES WERE A LSO REFLECTED. THEREFORE, THERE CANNOT BE A CASE THAT THE ASSESSEE HAS NOT DISCLOSED THESE MATERIALS BEFORE THE ASSESS ING OFFICER. HE HAS NOT SUPPRESSED ANY FACT. HE EXPLAINED THE R EASON WHY - - ITA 1359, 1360 & 1456 OF 2010 6 THE AMOUNTS WERE DEPOSITED IN HIS SAVINGS BANK ACCO UNT. BUT, THE ASSESSING OFFICER WITHOUT MAKING ANY USEFUL ENQ UIRY, JUST MADE THE ADDITION BY REJECTING THE EXPLANATIONS OFF ERED BY THE ASSESSEE. THE MOST IMPORTANT POINT TO BE SEEN IN T HE PRESENT CASE IS THAT EVERY CASH DEPOSIT MADE IN THE DISPUTE D SAVINGS BANK ACCOUNT OF THE ASSESSEE WAS IMMEDIATELY WITHDR AWN FOR THE PURPOSE OF PURCHASING THE DEMAND DRAFTS IN THE NAME OF INDIAN OIL CORPORATION LIMITED. THESE DETAILS, AVAILABLE IN THE BANK PASSBOOK ITSELF, SUPPORTED THE CONTENTION OF THE AS SESSEE BEYOND ANY DOUBT. ALL THE DEMAND DRAFTS WERE PURCH ASED IN FAVOUR OF INDIAN OIL CORPORATION LIMITED AND THEY W ERE ALL PURCHASED FOR THE PURPOSE OF RUNNING THE FUEL STATI ON MANAGED BY MR. SENTHILNAYAGAM. MR. SENTHILNAYAGAM ALSO HAD EXPLAINED THESE THINGS IN A DETAILED MANNER. THEREFORE, WHEN ALL THESE MATTERS ARE CRYSTAL CLEAR AS PER THE BOOKS OF ACCOU NT AS WELL AS IN THE BANK STATEMENT AND THE OTHER PARTICULARS, IT IS VERY REASONABLE ON THE PART OF THE COMMISSIONER OF INCOM E- TAX(APPEALS) TO COME TO THE CONCLUSION THAT THE ASS ESSEE HAS EXPLAINED THE NATURE OF THESE CASH DEPOSITS FOUND I N THE SAVINGS BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH TAMILN AD - - ITA 1359, 1360 & 1456 OF 2010 7 MERCANTILE BANK LIMITED. THEREFORE, WE ARE OF THE OPINION THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) IS JUSTIFIE D IN DELETING THE SAID ADDITION OF ` 12,99,304/-. 9. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 10. NEXT WE WILL CONSIDER THE APPEAL FILED BY THE ASSESSEE SHRI R.VADIVELRAJAN FOR THE ASSESSMENT YEA R 2007-08. THE ONLY GROUND RAISED BY THE ASSESSEE IN THE PRESE NT APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ER RED IN CONFIRMING THE ADDITION OF ` 3,41,732/- BEING THE VALUE OF GOLD JEWELLERY OF 342.190 GRAMS. IT IS THE CASE OF THE ASSESSEE THAT NO REASONS ARE AVAILABLE ON RECORD FOR THE COMMISSI ONER OF INCOME-TAX(APPEALS) TO CONFIRM THE SAID ADDITION AS UNEXPLAINED INVESTMENT IN JEWELLERY. IT IS THE CASE OF THE ASS ESSEE THAT THE JEWELLERY WAS RECEIVED BY HIS FAMILY AS A RESULT OF THE FAMILY ARRANGEMENT EFFECTED IN THE FAMILY OF THE ASSESSEE S WIFE SMT. R.V.JANSI. 11. WE CONSIDERED THIS ISSUE IN A DETAILED MANNER. THE JEWELLERY FOUND AT THE TIME OF SEARCH WAS 2151.190 GRAMS. OUT OF THIS, 5 GRAMS WERE ALLOCATED TO ASSESSEES WIFE S SISTER, AS PER - - ITA 1359, 1360 & 1456 OF 2010 8 THE STATEMENT FILED BY HER AT THE TIME OF SEARCH. THE BALANCE GOLD JEWELLERY WORKED OUT TO 2146.190 GRAMS. DEDUC TION WAS GIVEN FOR THE JEWELLERY ADMITTED IN THE WEALTH-TAX RETURN RELATING TO ONE MR.V.VIVIAN. THIS AMOUNTED TO 88 GRAMS. TH E BALANCE WAS 2058.190 GRAMS. FURTHER DEDUCTION OF 1296 GRAM S WAS GIVEN ON THE GROUND THAT THE SAME BELONGED TO THE A SSESSEES WIFE SMT. R.V.JANSI, AS RECORDED IN THE PANCHANAMA PREPARED AT THE TIME OF SEARCH. THE BALANCE CAME DOWN TO 762.1 90 GRAMS. AGAIN, FURTHER 20 GRAMS WERE DEDUCTED, AS THE SAME WAS REFLECTED IN THE WEALTH-TAX RETURN FILED BY THE ASS ESSEE. THE BALANCE CAME DOWN AGAIN TO 742.190 GRAMS. THE COMMISSIONER OF INCOME-TAX(APPEALS) FURTHER ALLOWED A DEDUCTION OF 400 GRAMS, ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE SAID QUANTITY OF JEWELLERY BELONG ED TO HIS MOTHER. THE COMMISSIONER OF INCOME-TAX(APPEALS) UL TIMATELY CONFIRMED AN ADDITION OF 342.190 GRAMS AS UNEXPLAIN ED GOLD JEWELLERY IN THE HANDS OF THE ASSESSEE, WHICH WAS V ALUED AT ` 3,41,732/-. 12. ON GOING THROUGH THE RECORDS OF THE CASE AND T HE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE C OMMISSIONER OF - - ITA 1359, 1360 & 1456 OF 2010 9 INCOME-TAX(APPEALS) HAS GRANTED SUFFICIENT RELIEF T O THE ASSESSEE BY ACCEPTING ALL THE PLAUSIBLE EXPLANATIONS OFFERED BY THE ASSESSEE. NOW THE ASSESSEE IS AGAIN BRINGING SOME GROUNDS AGAINST THE CONFIRMATION OF 342.190 GRAMS OF GOLD J EWELLERY AS UNACCOUNTED, NOT ON THE BASIS OF ANY EVIDENCE, BUT BY WAY OF PLEADINGS. APART FROM THE GENERAL GRIEVANCES, THER E IS NOTHING AVAILABLE IN THE HANDS OF THE ASSESSEE TO PROVE THA T THIS MUCH OF JEWELLERY WERE PROPERLY ACCOUNTED BY HIM. WE DO NO T FIND ANY REASON TO INTERFERE IN THE ORDER OF THE COMMISSIONE R OF INCOME- TAX(APPEALS). 13. ACCORDINGLY, THE APPEAL OF THE ASSESSEE SHRI R.VADIVELRAJAN, FOR THE ASSESSMENT YEAR 2007-08 IS LIABLE TO BE DISMISSED. 14. NEXT WE WILL CONSIDER THE APPEAL FILED BY THE ASSESSEE SMT. R.V.JANSI FOR THE ASSESSMENT YEAR 200 7-08. 15. JUST LIKE HER HUSBAND, THE ONLY GRIEVANCE RAIS ED IN THIS APPEAL BY THE ASSESSEE IS THAT THE COMMISSIONE R OF INCOME- TAX(APPEALS) HAS ERRED IN CONFIRMING 335.190 GRAMS AS UNEXPLAINED INVESTMENT IN JEWELLERY VALUED AT ` 3,34,771/-. SIMILAR ISSUE WAS CONSIDERED IN THE APPEAL FILED BY THE - - ITA 1359, 1360 & 1456 OF 2010 10 ASSESSEES HUSBAND. AS IN THE CASE OF ASSESSEES H USBAND, ALL THE DEDUCTIONS WERE GRANTED BY THE LOWER AUTHORITIE S IN THE PRESENT CASE ALSO. THE COMMISSIONER OF INCOME-TAX( APPEALS) HAS FURTHER ALLOWED A DEDUCTION OF 400 GRAMS, ACCEP TING THE EXPLANATION OF THE ASSESSEE THAT IT BELONGED TO HER MOTHER. IT IS AFTER GIVING ALL SORTS OF DEDUCTIONS THAT THE COMMI SSIONER OF INCOME-TAX(APPEALS) HAS CONFIRMED THE BALANCE OF 33 5.190 GRAMS AS UNEXPLAINED GOLD JEWELLERY. FOR THE VERY SAME REASONS CONSIDERED BY US IN ASSESSEES HUSBANDS CA SE, WE FIND THAT THERE IS NO REASON TO INTERFERE IN THE ORDER P ASSED BY THE COMMISSIONER OF INCOME-TAX(APPEALS). THE COMMISSIO NER OF INCOME-TAX(APPEALS) IS JUSTIFIED IN CONFIRMING 335. 190 GRAMS OF GOLD JEWELLERY AS UNEXPLAINED INVESTMENT IN THE HAN DS OF THE ASSESSEE. 16. THE APPEAL OF THE ASSESSEE IS LIABLE TO BE DISMISSED. 17. IN RESULT, THE TWO APPEALS FILED BY THE ASSESS EES AND ALSO THE APPEAL FILED BY THE REVENUE ARE DISMIS SED. - - ITA 1359, 1360 & 1456 OF 2010 11 ORDERS PRONOUNCED ON TUESDAY, THE 5 TH OF FEBRUARY, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 5 TH FEBRUARY, 2013. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.