T.MANIMARAN, CHENNAI V. ITO NON CORPORATE WARD 13(5), CHENNAI

ITA 1402/CHNY/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9084 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 40A(3)

Judgement Text

आयकर अपील सं./ITA No.1402/Chny/2019 िनधा रण वष /Assessment Year: 2012-13 Mr.T.Manimaran, No.15, 4 th Avenue, Maligai Flat, Dr.Seethapathy Nagar Extn., Velachery, Chennai-600 042. v. The Income Tax Officer, Non-Corporate Ward-13(5), Chennai. [PAN: AIQPM 7994 M] (अपीलाथ /Appellant) ( थ /Respondent) अपीलाथ की ओर से/ Appellant by : Mr.S.Sridhar, Adv. थ की ओर से /Respondent by : Mr.N. Sanjay Gandhi, JCIT सुनवाई की तारीख/Date of Hearing : 09.11.2021 घोषणा की तारीख /Date of Pronouncement : 09.11.2021 आदेश / O R D E R PER M.L.MEENA, ACCOUNTANT MEMBER: The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-7, Chennai, in ITA No.91(T-14)/CIT(A)-7/2015- 16 dated 31.03.2019 for the AY 2012-13. The grounds raised by the assessee are as under: 1. The order of the Commissioner of Income Tax (Appeals) -7, Chennai dated 31.03.2019 in I.T.A.No.91(T-14)/CIT(A)-7/2015-16 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the addition of Rs.25 Lakhs related to the property transactions/being the advance paid for purchase of property on the application of section 40A(3) of the Act in the computation of taxable total income without assigning proper reasons and justification. आयकर अपीलीय अिधकरण, ‘बी’ "ायपीठ, चे%ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI ी धु ु आर.एल. रे ी , ाियक सद एवं डॉ एम.एल. मीना, , लेखा सद( के सम BEFORE SHRI DUVVURU R.L. REDDY , JUDICIAL MEMBER AND Dr. M.L.MEENA, ACCOUNTANT MEMBER ITA No.1402/Chny/2019 :: 2 :: 3. The CIT (Appeals) failed to appreciate that the provisions of section 40A(3) of the Act had no application to the facts of the case and ought to have appreciated that having established the genuineness of the transaction, the proviso below section 40A(3A) of the Act would fortify the plea for deleting the wrong addition made in the computation of taxable total income. 4. The CIT (Appeals) failed to appreciate that the decisions cited in support were completely ignored and ought to have appreciated that there was no application of mind to the facts furnished in rendering decision mechanically confirming the order of the Assessing Officer. 5. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 6. The Appellant craves leave to file additional grounds/arguments at the time of hearing. 2. Apropos, Ground No.5, the assessee has challenged the impugned order on account of violation of principles of natural justice as there was no proper opportunity granted to the assessee. 3. The issue disputed pertains to disallowance of claim of advance payments made in cash towards purchase of property under section 40A (3) of the IT Act, aggregating to Rs.25 lakhs. The Ld. CIT(A) has noted that the amount disputed was claimed to be paid on account of business expediency and commercial consideration on the request and necessity of the seller of the land. Although, the Ld. CIT(A) has observed that the impugned cash transaction occurred on account of the advance payment of Rs.25 lakhs by cash against land purchase. However, he has not substantiated how the assessee has failed to establish that such a cash payment in the form of cash was made out of commercial considerations and in the business expediency and how it was not covered within the exception clauses to the provisions of section 40A(3) while coming to the conclusion as most of the business transactions have been routed through ITA No.1402/Chny/2019 :: 3 :: banking channel, of course, the said transactions are not an exception. Further, while taking an adverse view against the assessee, the Ld.CIT(A) has not granted opportunity to the assessee by way of issuance of show cause notice. Thus, in our view, the assessee has been denied an opportunity of being heard in view of the principles of natural justice. 4. In the light of these facts, we are of the view that CIT(A) has not afforded proper opportunity of being heard to the assessee. We, therefore, set aside the order of the CIT(A) and restore the matter back to his file with the direction to adjudicate the matter afresh on merit after affording adequate opportunity of being heard to the assessee and considering the documentary evidence to be produced in the course of proceedings. No doubt, the assessee shall cooperate in the fresh proceeding before the CIT(A). 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 09 th day of November, 2021, in Chennai. Sd/- Sd/- (धु ु आर.एल. रे ी) (DUVVURU R.L. REDDY) "ाियक सद(/JUDICIAL MEMBER (एम.एल.मीना) ( M.L.MEENA) लेखा सद(/ACCOUNTANT MEMBER चे%ई/Chennai, िदनांक/Dated: 09 th November, 2021. TLN आदेश की ितिलिप अ)ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु*/CIT 2. थ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु* (अपील)/CIT(A) 6. गाड फाईल/GF