Smt. P.Valliammal, Pollachi V. ITO, Pollachi

ITA 1387/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2552 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-05-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI [BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI S.S. GODARA, JUDICIAL MEMBER] I.T.A.NO.1387/MDS/2012 ASSESSMENT YEAR : 2007-2008 SMT. P. VALLIAMMAL, NO.40, KONGU NAGAR, VADUGAPALAYAM, POLLACHI 642 001. VS THE INCOME TAX OFFICER, WARD I (2), POLLACHI [PAN AEFPV 3233D] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. T.N. SEETHARAMAN, ADV. RESPONDENT BY : SHRI. S. DASGUPTA, JCIT. DATE OF HEARING : 06-05-2013 DATE OF PRONOUNCEMENT : 09-05-2013 O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL ARISES FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE , DATED 28.03.2011, IN ITA NO.462C/2009-2010, FOR ASSESS MENT YEAR 2007- 2008, IN PROCEEDINGS UNDER SECTION 143(3) OF THE IN COME TAX ACT 1961 [IN SHORT THE ACT]. I.T.A.NO.1387/MDS/2012 :- 2 -: 2. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE ASS ESSEE IS AN INDIVIDUAL. ON 27.10.2005, THE DEPARTMENT HAD CO NDUCTED A SURVEY IN THE CASE OF HER SON BY THE NAME OF C.V. JAYARAKA SH. DURING THE COURSE THEREIN, IT CAME ACROSS AN AGREEMENT DATED 10.1.2002 ENTERED BY THE ASSESSEE WITH AN ENTITY NAMELY M/S. ZYLOG SY STEMS (P) LTD REGARDING SALE OF PLOTS AND ONE SHOP, FOR TOTAL CON SIDERATION OF H30,05,000/-. IT ALSO CAME TO KNOW THAT ON 01.11.20 02 SHE RECEIVED ADVANCE OF H30,00,000/- AND THE BALANCE PAYMENT OF H5,000/- HAD TO BE PAID AT THE TIME OF EXECUTION OF SALE DEED ON 01 .11.2006 AND FAILURE THEREOF WOULD ALSO RESULT IN FORFEITURE OF AMOUNT. 3. ON 31.10.2006, QUA ASSESSMENT YEAR 2003-2004 RELEVA NT TO DATE OF AGREEMENT ABOVESAID, THE ASSESSING OFFICER FINALIZED RE- ASSESSMENT IN ASSESSEES CASE HOLDING THEREIN THAT SINCE NO SALE DEED HAD BEEN EXECUTED AND SHE HAD FORFEITED THE ADVANCE RECEIVED (SUPRA), THEREFORE, THE AMOUNT OF H30,00,000/- WAS LIABLE TO BE TREATED AS BUSINESS INCOME. 4. ON THIS THE ASSESSEE PREFERRED AN APPEAL. VIDE ORD ER DATED 27.7.2007, THE CIT(A) ACCEPTED HER PLEA THAT THE FO RFEITED AMOUNT WAS NOT TAXABLE IN THE ASSESSMENT YEAR 2003-04, BUT IN IMPUGNED I.T.A.NO.1387/MDS/2012 :- 3 -: ASSESSMENT YEAR I.E. 2007-2008 RELEVANT TO 01.11.20 06 I.E. DATE OF EXECUTION OF THE SALE DEED. ON THIS, IN THE IMPUGN ED ASSESSMENT YEAR, THE ASSESSING OFFICER ISSUED 148 NOTICE DATED 9.4.2 008 TO THE ASSESSEE BASED ON THE FINDING OF THE CIT(A) ON PROTECTIVE BA SIS FOR TREATING FORFEITED AMOUNT AS BUSINESS INCOME. IT IS ALSO NOT ICED FROM THE CASE FILE AND ORDER DATED 2 ND JANUARY 2009 IN ITA NO.2538/MDS/2007 AVAILABLE BEFORE US THAT THE REVENUES APPEAL AGAIN ST CIT(A) ORDER DATED 27.09.2007 STOOD ACCEPTED BY CO-ORDINATE BENC H HOLDING THEREIN THAT THE FORFEITED AMOUNT DESERVED TO BE TA XED AS ASSESSEES BUSINESS INCOME IN ASSESSMENT YEAR 2003-2004 INSTEA D OF 2007-2008. THE PARTIES ARE ALSO UNANIMOUS BEFORE US THAT THE A SSESSEES APPEAL CHALLENGING TRIBUNALS DECISION IS PENDING IN HONB LE JURISDICTIONAL HIGH COURT. 5. COMING TO THIS CASE, AS STATED IN PRECEDING PARAS, THE ASSESSING OFFICER COMPLETED PROTECTIVE RE-ASSESSMENT VIDE ORD ER DATED 30.12.2009 AND TREATED FORFEITED AMOUNT AS ASSESSEE S INCOME IN THE IMPUGNED ASSESSMENT YEAR. AGGRIEVED, THE ASSESSEE PREFERRED AND THE CIT(A) HAS REJECTED HER CONTENTIONS AND HELD THAT IN THE ASSESSMENT YEAR 2003-2004, HER PLEA WAS THAT THE AMOUNT WAS LIABLE TO THE TAXED NOT IN SAID ASSESSMENT YEAR BUT IN AS SESSMENT YEAR I.T.A.NO.1387/MDS/2012 :- 4 -: 2007-2008 AND THEREFORE, SHE CANNOT CHALLENGE TAXAB ILITY OF THE AMOUNT. THEREFORE, THE ASSESSEE IS IN APPEAL B EFORE THE TRIBUNAL. 6. IN THE COURSE OF HEARING, THE ASSESSE HAS FILED CON CISE GROUNDS OF APPEAL CHALLENGING LEGALITY OF THE RE-ASSESSMENT AS WELL THE TAXABILITY OF THE FORFEITED AMOUNT IN THE IMPUGNED ASSESSMENT YEAR. IN THE INTEREST OF JUSTICE, WE TAKE THE GROUNDS ON RECORD. 7. IN THE COURSE OF HEARING, BOTH PARTIES REITERATE TH EIR RESPECTIVE STANDS. THE ASSESSEE PRAYS FOR ACCEPTANCE OF THE A PPEAL AND REVENUES PLEA IS TO AFFIRM CIT(A)S FINDINGS. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE CA SE FILE. SO FAR AS THE LEGALITY ASPECT OF THE ABOVE SAID IS CO NCERNED, IT IS TO BE SEEN THAT IN VIEW OF THE ORDER DATED 27.09.2007(SUP RA) WHEREIN THE CIT(A) HAD HELD THAT FORFEITED AMOUNT(SUPRA) WAS TO BE TAXED IN ASSESSMENT YEAR 2007-2008 I.E IMPUGNED ASSESSMENT YEAR, THE ASSESSING OFFICER RE-OPENED SUMMARY ASSESSMENT. IN OUR VIEW, THE ASSESSING OFFICER DID NOT COMMIT ANY ILLEGALITY AS THE NOTICE IN QUESTION HAD BEEN ISSUED IN ORDER TO PREVENT NON AS SESSMENT OF THE AMOUNT IN QUESTION AND KEEPING IN MIND THE ASSESSEE S CONTRARY I.T.A.NO.1387/MDS/2012 :- 5 -: STANDS IN THE TWO ASSESSMENT YEARS I.E. IN ASSESSME NT YEAR 2003-2004 THAT IT HAD TO BE TAXED IN THE IMPUGNED ASSESSMENT YEAR 2007-2008 AND VICE VERSA. HENCE, WE UPHOLD THE VALIDITY OF T HE RE-OPENING UNDER CHALLENGE. 9. ON MERITS, THERE IS HARDLY ANY DISPUTE ON FACTS. T HE AGREEMENT IS DATED 01.11.2002. THE ADVANCE IN QUESTION IS OF H30,00,000/- (FORFEITED) WAS RECEIVED ON 10.11.2002. THE DATE O F PERFORMANCE OF THE AGREEMENT WAS 01.11.2006 I.E. DURING THE PREVIO US YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. THE STRIFE BETWEE N THE PARTIES IS THAT PER REVENUE, THE AMOUNT RECEIVED IS TO BE TAXE D ON PROTECTIVE BASIS IN PRESENT ASSESSMENT YEAR. THE ASSESSEE SUB MITTED THAT SINCE THE AMOUNT RECEIVED HAS ALREADY BEEN HELD TAXABLE I N ASSESSMENT YEAR 2003-2004 BY THE TRIBUNAL (SUPRA), THE SAME CANNOT BE ASSESSED TWICE I.E. IN ASSESSMENT YEARS 2003-2004 AND 2007-2 008. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE FACTS HEREINABO VE, WE ARE OF THE VIEW IF THE TRIBUNAL HAS HELD THE AMOUNT IS TAXAB LE IN ASSESSMENT YEAR 2003-2004, THEN THE SAME RECEIPT CANNOT DOUBLY TAXE D. SO FAR AS STAND OF THE REVENUE THAT THE ASSESSEE IS DISPUTING ITS TAXABILITY IN BOTH ASSESSMENT YEARS IS CONCERNED, IT IS NOW SETTL ED UPTO THE TRIBUNAL (SUPRA) AS TO IN WHICH ASSESSMENT YEAR , THE FORFEITED I.T.A.NO.1387/MDS/2012 :- 6 -: AMOUNT WOULD FORM PART OF HER INCOME I.E. 2003-200 4. THEREFORE, WE ACCEPT THE ASSESSEE CONTENTIONS ON MERITS. 10. CONSEQUENTLY, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 9TH OF MAY, 2013, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER DATED: 9TH MAY, 2013. K.V COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR