Sabina Muyeenuddin, CHENNAI V. ITO, CHENNAI

ITA 1360/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4517 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDAKUMAR IRS
• Assessee Lawyers: MRS NITHYA SANKARAN
• Keywords: Reopening of assessment; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , [BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER ] ./I.T.A. NO.1360/MDS/2016 / ASSESSMENT YEAR : 2007-2008. SABINA MUYEENUDDIN, NO.10, CASUARINA DRIVE, NEELANGARAI, CHENNAI 600 115. [PAN AOMPS 6663K] VS. THE INCOME TAX OFFICER, BUSINESS WARD V(1) CHENNAI. ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : MRS. NITHYA SANKARAN, CA. /RESPONDENT BY : SHRI. V. NANDAKUMAR, IRS, JCIT. /DATE OF HEARING : 17-05-2017 ! /DATE OF PRONOUNCEMENT : 17-05-2017 % / O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-15, CH ENNAI, IN APPEAL NO.171/CIT(A)-15/14-15, DATED 22.02.2016 FOR THE A SSESSMENT YEAR 2007-2008. ITA NO.1360/MDS/2016 :- 2 -: 2. MRS. NITHYA SANKARAN, REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI. V. NANDAKUMAR REPRESENTED ON BEHALF OF TH E REVENUE. 3. IT WAS SUBMITTED BY THE LD. AUTHORISED REPRESENTATI VE THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS HAVING BUSINES S INCOME AND CAPITAL GAINS. IT WAS SUBMITTED THAT ASSESSEE HAD FILED H ER RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 07.03.2008. THE ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS COMPLETED ON 17.12.2009. IT WAS SUBMITTED THAT SUB SEQUENTLY, THE ASSESSMENT WAS REOPENED U/S. 147 OF THE ACT AND THE NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 07.10.2013. LD. AUTHORISE D REPRESENTATIVE DREW MY ATTENTION TO THE REASONS RECORDED FOR THE PURPOSE OF REOPENING AT PAGE 14 OF THE PAPER BOOK WHICH IS EXT RACTED AS UNDER:- GOVERNMENT OF INDIA INCOME TAX DEPARTMENT OFFICE OF THE INCOME TAX OFFICER, BUSINESS WARD V ( 1) ROOM NO. 602, 6 TH FLOOR, ANNEX BUILDING, 121, MAHATHMA GANDHI ROAD, CHENNAI-34 BW-V(1)/AOMPS6663K/2007-08 DATED 17/2/14. TO MRS. SABINA MUYEENUDDIN, NO.L0, CASUARINA DIRVE, NEELANQARAI, CHENNA I - 600 041. MADAM SUB: INCOME-TAX ASSESSMENT - A.Y.2007-08 YOUR OWN - SUPPLY OF REASON - REG. ITA NO.1360/MDS/2016 :- 3 -: REF: 1. NOTICE U/S.148 DATED 7.10.13. 2. RETURN OF INCOME FILED BY YOU ON 13.11.13. 3. N.OTICE U/S.143(2) DATED 17.2.14 WITH REFERENCE TO THE ABOVE, REASON BASED ON WHICH YOUR ASSESSMENT FOR THE A.Y.2007-08 WAS RE-OPENED IS AS UNDER: 'THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR TH E A.Y. 2007 -08 ON 07.03.08 ADMITTING INCOME AT RS. 1,06,954. T HE CASE WAS SELECTED FOR SCRUTINY FOR CASH DEPOSIT BASED:' OIL AIR INFORMATION AND ASSESSMENT U/S.143(3) WAS COMPLETED ON 17.12.09 DIS ALLOWING INTEREST TO BANKS AND ADDITION ON THE GROUND OF LES S DRAWINGS. FROM THE AIR- NON-FILER LIST FOR THE A.Y.2012-13, IT IS SEEN THAT THE ASSESSEE ALONG WITH HER HUSBAND SOLD VACANT:LAND AT NEELANGARAI FOR A CONSIDERATION OF RS. 3.15 CRORES BUT FAILED TO FI LE RETURN. HENCE SHE WAS ISSUED A LETTER CALLING FOR RETURN OF INCOME FO R THE A.Y.2012-13. SHE FILED A LETTER STATINQ THAT SHE ALONG WITH HER HUSBAND SOLD 12.5 CENTS OF LAND AT NO.L0, CASURINA DRIVE, NEELANGARAI, CHENNAI, ON 18.4.11 AND SINCE T HE LAND IS AN AGRICULTURAL LAND, CAPITAL GAINS IS EXEMPT FROM TAX . ON A PERUSAL OF THE DOCUMENTS FURNISHED, IT IS SEEN THAT SHE ALSO SOLD 25 CENTS OF THIS LAND ON 1.11.06 VIDE DOE. NO.6271/2006. THE LAND IS SITUATED WITHIN THE REGISTRATION DISTRICT OF SOUTH CHENNAI AND SUB- REGISTRATION DISTRICT OF NEELANGARAI. THE LAND WAS ORIGINALLY PU RCHASED BY THE ASSESSEE AND HER HUSBAND FROM ONE MRS R.V.GRUHALAKS HMI ON 28.1.05 WHO PURCHASED IT FROM A.P.M.S.SHAHUL HAMEED MARAKAYAR & SONS, A PARTNERSHIP FIRM. THIS FIRM HAS ALREADY P LOTTED THE LAND BEFORE SELLING IT TO MRS. R.V':GRUHALAKSHMI WHICH IS EVIDENCE FROM PAGE 5 OF PURCHASE DEED DATED 28.1.05. BUT, THE ASSESSEE FAILED TO ADMIT SH ORT-TERM CAPITAL GAINS IN THE RETURN OF INCOME ON THE PRETEXT THAT I T IS AGRICULTURAL LAND. THE LAND IS NOT AN AGRICULTURAL LAND SINCE IT AS AL READY PLOTTED BEFORE IT.WAS PURCHASED BY THE ASSESSEE AND HER HUSBAND. M OREOVER: THE LAND IS SITUATED WITHIN THE MUNICIPAL LIMITS OF CHE NNAI. SINCE THE ASSESSEE HAS N ADMITTED SHORT-TERM CAPITAL GAINS, I HAVE REASON TO BELIEVE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT. (GEETHA KRISHNAMURTHY) INCOME TAX OFFICER, BUSINESS WARD V(1) CHENNAI -34 ITA NO.1360/MDS/2016 :- 4 -: IT WAS SUBMITTED THAT THE REASONS FOR REOPENING WH ERE THAT THE ASSESSEE HAD PURCHASED AND SOLD LAND AT NEELANGARAI FOR A CONSIDERATION OF F3,15,00,000/- BUT HAD FAILED TO F ILE THE RETURN. IT WAS SUBMITTED THAT WHEN FILING ORIGINAL INCOME TAX RETURN ASSESSEE HAD TAKEN INTO CONSIDERATION THE INCOME FROM CAPITALS G AINS ON THE SALE OF THE SAID LAND AND THE SAME WAS SHOWN AS EXEMPT AS THE SAME WAS AGRICULTURAL LAND. LD. AUTHORISED REPRESENTATIVE D REW MY ATTENTION TO THE COPY OF THE RETURN ALONGWITH COMPUTATION OF INC OME, BALANCE SHEET AND INCOME AND EXPENDITURE ACCOUNT FOR THE RE LEVANT ASSESSMENT YEAR AT PAGES 2 TO 7 OF THE PAPER BOOK. FURTHER, SUBSEQUENTLY, THE SAID RETURN WAS PROCESSED U/S. 14 3(3) OF THE ACT AND THE ORIGINAL ASSESSMENT ORDER WAS PASSED ON 17.12.2 009. SHE DREW MY ATTENTION TO PAGES 8 TO 10 OF THE PAPER BOOK WHICH HAS THE COPY OF THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT DATE D 17.12.2009. SHE DREW MY ATTENTION TO PAGE 2 OF THE ASSESSMENT ORDER WHEREIN LD. ASSESSING OFFICER HAD RECORDED THAT ASSESSEE HAD PR ODUCED BOOKS OF ACCOUNTS AND OTHER DETAILS SUCH AS BANK STATEMENTS, PURCHASE AND SALE OF AGRICULTURAL LAND DETAILS, DETAILS OF CONSULTANC Y CHARGE................... IT WAS SUBMITTED THAT THE ASSESSEE HAD FILED HER RE TURN OF INCOME AND IN THE COURSE OF ASSESSMENT ISSUE OF PURCHASE AND S ALE OF THE AGRICULTURAL LAND HAD BEEN DULY EXAMINED AND CONSID ERED. IT WAS SUBMITTED THAT CONSEQUENTLY, REOPENING OF THE ASSES SMENT BEYOND THE ITA NO.1360/MDS/2016 :- 5 -: LIMITATION OF FOUR YEARS, IN THE ABSENCE OF ANY FRE SH MATERIALS AND IN THE ABSENCE OF THE RECORDING OF THE LD. ASSESSING O FFICER AS TO THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS RELEVANT FOR HER ASSESSMENT, MADE TH E RE-OPENING INVALID. IT WAS SUBMITTED THAT THE REOPENING MAY BE QUASHED. 4. IN REPLY, THE LD. DEPARTMENTAL REPRESENTATIVE VEHE MENTLY SUPPORTED THE ORDERS OF THE LD. ASSESSING OFFICER A ND THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT WAS SUBMIT TED THAT SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFF ICER IN SO FAR AS ALL DETAILS REGARDING SALE AND PURCHASE OF THE AGRICULT URAL LAND WAS NOT PRODUCED AND IN FACT THE AGRICULTURAL LAND AS CLAIM ED WAS NOT AGRICULTURAL LAND AT ALL. IT WAS SUBMITTED THAT CO NSEQUENTLY ON ACCOUNT OF THE AIR INFORMATION RECEIVED, THE ASSESSEE HAS B EEN TREATED AS A NON FILER AND THE REOPENING HAD BEEN DONE BY THE L D. ASSESSING OFFICER. IT WAS SUBMITTED THAT REOPENING WAS VALID LY DONE AND WAS LIABLE TO BE UPHELD. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE REASONS RECORDED SHOWS THAT THE LD. ASSESSING OFFIC ER HAS RECOGNIZED THAT THE ASSESSEE HAD FILED HIS RETURN FOR THE RELE VANT ASSESSMENT YEAR AND ON THE BASIS OF THE AIR INFORMATION, ASSESSMENT HAS ALSO BEEN TAKEN UP AND COMPLETED U/S. 143(3) OF THE ACT. LD. ASSESSING OFFICER ITA NO.1360/MDS/2016 :- 6 -: THEN RECORDS THAT FROM THE AIR NON FILERS LIST FOR THE ASSESSMENT YEAR 2012-2013, IT IS SEEN THAT THE ASSESSEE HAS SOLD VA CANT LAND AT NEELANKARI. FROM THIS IT BECOMES EVIDENT THAT THER E IS SOME INFORMATION REGARDING ASSESSEE FOR THE ASSESSMENT Y EAR 2012-2013. IT DOES GIVE THE LD. ASSESSING OFFICER ANY INFORMATIO N REGARDING PURCHASE OR SALE OF LAND FOR THE ASSESSMENT YEAR 2007-2008. THUS, CLEARLY THERE IS NO LIVE LINK BETWEEN THE INFORMATION IF ANY AVAI LABLE WITH THE LD. ASSESSING OFFICER AND THE RELEVANT ASSESSMENT YEAR CONCERNED WHICH HAS BEEN REOPENED. FURTHER, A PERUSAL OF THE ORIGI NAL ASSESSMENT ORDER U/S. 143(3) OF THE ACT ON 17.12.2009 SHOWS TH AT THEN LD. ASSESSING OFFICER HAS LOOKED INTO DETAILS OF THE P URCHASE AND SALE OF AGRICULTURAL LAND WHEN HE COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT. A PERUSAL OF THE COMPUTATION OF THE TOTAL INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR ALSO SHOW S THAT THE INCOME FROM CAPITAL GAINS HAS BEEN DISCLOSED AND CLAIMED A S EXEMPTED AS AGRICULTURAL LAND. A PERUSAL OF THE ORIGINAL ASSES SMENT ORDER PASSED ON 17.12.2009 AT PAGE 3 ALSO SHOWS THAT IN RESPECT OF THE AIR INFORMATION THE SOURCE AND EVIDENCE FOR THE DEPOSIT S AS PER THE AIR HAS BEEN RECORDED AS VERIFIED. THE FACT BEING THUS AND THE REOPENING BEING THE BEYOND LIMITATION OF FOUR YEARS, AS IT IS NOTICED, LD. ASSESSING OFFICER HAS NOT SHOWN AS TO THE EXISTENCE OF ANY N EW INFORMATION NOR HAVING SHOWN THAT THERE IS FAILURE ON THE PART OF T HE ASSESSEE TO ITA NO.1360/MDS/2016 :- 7 -: DISCLOSE FULLY AND TRULY THE MATERIAL FACTS REQUIRE D FOR HER ASSESSMENT, THE REASON RECORDED IS ONLY ON A CHANGE OF OPINION WHICH IS NOT PERMISSIBLE. THIS BEING SO, I AM OF THE VIEW THAT REOPENING OF ASSESSMENT IS INVALID AND CONSEQUENTLY THE SAME STA NDS QUASHED. 6. GROUNDS 6 TO 14 HAVE NOT BEEN SPECIFICALLY ARGUED O N BEHALF OF THE ASSESSEE OR THE REVENUE. CONSEQUENTLY, THE SAME ARE NOT ADJUDICATED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 17 TH DAY OF MAY , 2017, AT CHENNAI. SD/- ( GEORGE MATHAN) ( / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 17 TH MAY, 2017 KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF