D.Prabhu, Coimbatore V. ITO, Coimbatore

ITA 1425/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57971 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GOPALAKRISHNA SR
• Assessee Lawyers: K LEELAKRISHNAN ITP; S SIVASHANMUGAM
• Keywords: Unexplained investment; Income from undisclosed sources
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1425/MDS/2011 ASSESSMENT YEAR : 2007-08 SHRI D. PRABHU, DOOR NO. 10, DEEPAM COMPLEX, 576, 100 FEET ROAD, COIMBATORE-641 012. V. THE INCOME-TAX OFFICER, WARD-II(1), COIMBATORE. (PAN: AFXPP3507K) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SIVASHANMUGAM, ADVOCATE & SHRI K. LEELAKRISHNAN, ITP RESPONDENT BY : SHRI K. GOPALAKRISHNA, SR. AR DATE OF HEARING : 13-02-2012 DATE OF PRONOUNCEMENT : 1 3-02-2012 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-I, COIMBATORE IN APPEAL NO.142/10-11 D ATED 30-05-2011 FOR THE ASSESSMENT YEAR 2007-08. I.T.A. NO.1425/MDS/2011 2 2. SHRI SIVASHANMUGAM, ADVOCATE AND SHRI LEELAKRISH NAN, ITP REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K. GOPALAKRISHNA , LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ONLY ISSUE IN THIS APPEAL WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING AN ADDITION OF ` 60 LAKHS MADE BY THE ASSESSING OFFICER HOLDING THA T THE ASSESSEE HAD MADE AN UNEXPLAINED INVESTMENT, BY INVOKING THE PROVISIONS OF SECTION 69 OF THE INCOME TAX ACT, 1961. IT WAS THE SUBMISSION TH AT THERE WAS A SURVEY ON THE PREMISES OF THE ASSESSEE ON 07-08-2009. IT WAS THE SUBMISSION THAT IN THE COURSE OF THE SURVEY NOTHING INCRIMINATING WAS SPEC IFICALLY FOUND. IT WAS THE SUBMISSION THAT THE ONLY DEFECT THAT WAS FOUND WAS THAT THE ASSESSEE WAS NOT MAINTAINING PROPER BOOKS OF ACCOUNTS. EVIDENCES IN REGARD TO THE ACQUISITION OF IMMOVABLE PROPERTIES HAD BEEN FOUND IN THE COURSE O F SURVEY. ON BEING QUESTIONED REGARDING THE SOURCE OF THE ACQUISITION OF THE PROPERTIES TO AN EXTENT OF ` 78,66,300/- FOR THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD SUBMITTED THAT THE ASSESSEE HAD TAKEN A LOAN OF ` 60 LAKHS FROM THE PARTNERSHIP FIRM IN WHICH HE WAS A PARTNER, M/S. METRO CITY FOUNDATION, DEEPAM COMPLEX, 100 FEET ROAD, COIMBATORE. IT WAS THE SUBMISSION THAT AS IT WAS NOTICED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE AS ALSO OF M/S. METRO CI TY FOUNDATION WERE NOT PROPERLY MAINTAINED, THE ASSESSING OFFICER HAD ESTI MATED THE INCOME OF M/S. METRO CITY FOUNDATION AT 8% OF THE TOTAL TURNOVER. IT WAS THE SUBMISSION THAT I.T.A. NO.1425/MDS/2011 3 THE ASSESSING OFFICER HAD ALSO TREATED THE AMOUNT O F ` 60 LAKHS TAKEN FROM M/S. METRO CITY FOUNDATION ON 19-12-2006 BY WAY OF ICICI BANK CHEQUE NO.271960 AS THE WITHDRAWAL OF THE ASSESSEES SHARE OF UNACCO UNTED INCOME OF THE FIRM OR AS THE UNACCOUNTED INCOME OF THE ASSESSEE INVESTED IN THE FIRM AND WITHDRAWN SUBSEQUENTLY. IT WAS THE SUBMISSION THAT NO EVIDEN CE WHATSOEVER OF THE ASSESSEE HAVING INVESTED UNACCOUNTED INCOME IN THE FIRM WAS EVER FOUND NOR WAS THERE ANY UNACCOUNTED INCOME OF THE FIRM NOR AN Y DETAILS IN REGARD TO THE POSSIBLE UNACCOUNTED INCOME BEING GENERATED IN THE FIRM WERE FOUND. IT WAS THE SUBMISSION THAT ONLY BECAUSE THE BOOKS OF ACCOU NTS OF THE ASSESSEE AS ALSO OF THE FIRM IN WHICH THE ASSESSEE WAS A PARTNER WER E FOUND TO BE NOT PROPERLY MAINTAINED, THE ADDITION HAD BEEN MADE. IT WAS TH E SUBMISSION THAT ON APPEAL THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE ASSES SING OFFICER. IT WAS THE SUBMISSION THAT AS THE MONEY WAS DRAWN FROM THE FIR M AND THE SAME WAS ALSO RECOGNIZED BY THE ASSESSING OFFICER AS HAVING BEEN DRAWN FROM THE FIRM, M/S. METRO CITY FOUNDATION, AND THE AMOUNT WAS DRAWN BY CHEQUE AND IT WAS ALSO ACCEPTED BY THE OTHER PARTNERS OF THE FIRM THAT THE ASSESSEE HAS TAKEN A LOAN OF ` 60 LAKHS FROM THE FIRM AND THE TRANSACTION OF THE TRANSFER OF ` 60 LAKHS FROM THE FIRMS BANK ACCOUNT TO THE ASSESSEES ACCOUNT W AS ALSO RECORDED IN THE BANK ACCOUNT OF M/S. METRO CITY FOUNDATION, IT WAS SUBMI TTED THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY T HE LEARNED CIT(A) MAY BE DELETED IN THE INTEREST OF JUSTICE. I.T.A. NO.1425/MDS/2011 4 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDERS OF THE LEARNED CIT(A) AND THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE BOOKS OF ACCOUNT WERE NOT PROPERLY MAINTAINED AND CONSEQUENTLY THE A SSESSEE COULD NOT EXPLAIN THE SOURCE FOR THE AMOUNT OF ` 60 LAKHS DRAWN FROM THE FIRM. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT IN THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSEE HAS CATEGORICALLY STATED THAT THE ASSESSEE HAS TAKE N THE LOAN OF ` 60 LAKHS FROM THE FIRM, M/S. METRO CITY FOUNDATION. THE ASSESSEE HAS ALSO PRODUCED THE BANK ACCOUNT OF BOTH THE ASSESSEE AND THE FIRM FOR EXAMI NATION. IT IS NOTICED THAT THE BANK STATEMENTS HAVE ALSO BEEN ACCEPTED BY THE ASSE SSING OFFICER AND THE ADDITION OF ` 60 LAKHS IS ON TWO PRESUMPTIONS DRAWN BY THE ASSES SING OFFICER THAT EITHER IT IS THE WITHDRAWAL OF THE ASSESSEES SHARE IN THE UNACCOUNTED INCOME OF THE FIRM OR IT IS THE UNACCOUNTED INCOME OF THE ASSESSEE WHICH HAS BEEN INVESTED IN THE FIRM EARLIER AND WITHDRAWN SUB SEQUENTLY. IT IS NOTICED THAT BOTH THE PRESUMPTIONS ARE WITHOUT ANY EVIDENCE. IN THE COURSE OF SURVEY NOTHING INCRIMINATING TO SHOW THAT THE ASSESSEE OR THE FIRM IN WHICH THE ASSESSEE IS A PARTNER HAS UNACCOUNTED INCOME, HAS BEEN FOUND . THE PURCHASE OF THE IMMOVABLE PROPERTIES BY THE ASSESSEE IS ALSO NOT DI SPUTED NOR THE SOURCE IN REGARD TO THE SAME IS BEING DISPUTED. ADMITTEDLY, IN THE STATEMENT RECORDED FROM THE ASSESSEE IN REGARD TO THE INCOME OF THE FI RM IN WHICH THE ASSESSEE IS A PARTNER IT HAS BEEN CATEGORICALLY ADMITTED THAT THE SALE OF THE FLATS STARTED ONLY I.T.A. NO.1425/MDS/2011 5 FROM THE FINANCIAL YEAR 2008-09 RELEVANT TO THE ASS ESSMENT YEAR 2009-10. THIS LOAN OF ` 60 LAKHS HAS BEEN TAKEN MUCH EARLIER, I.E. DURING THE ASSESSMENT YEAR 2007-08. A PERUSAL OF PAGE 3 OF THE ASSESSMENT ORD ER ALSO CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS RECOGNIZED THE FACT THAT THE ASSESSEE HAS WITHDRAWN MONEY FROM THE FIRM FREQUENTLY. IN THE COURSE OF S URVEY NO EVIDENCE HAVING BEEN FOUND TO GIVE ANY SUPPORT TO THE TWO PROBABLE PRESUMPTIONS WHICH HAVE BEEN DRAWN BY THE ASSESSING OFFICER, THE ASSESSMENT MADE ON THE BASIS OF PRESUMPTIONS CANNOT BE SUSTAINED. IN THE CIRCUMSTA NCES, THE ADDITION OF ` 60 LAKHS AS MADE BY THE ASSESSING OFFICER REPRESENTING THE LOAN TAKEN BY THE ASSESSEE FROM THE FIRM, M/S. METRO CITY FOUNDATION, THE PARTNERSHIP FIRM IN WHICH THE ASSESSEE IS A PARTNER, STANDS DELETED. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 13/02/2 012. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 13 TH FEBRUARY, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE