Sukesh Chandran, Vellore V. ITO, CHENNAI

ITA 1478/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8848 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 25-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS JCIT
• Assessee Lawyers: K RAVI
• Keywords: Unexplained investment; Gift; Salary income; Opportunity of being heard; Principle of natural justice
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./I.T.A. NO. 1478/MDS/2016 / ASSESSMENT YEAR : 2008-2009 DR. SUKESH CHANDRAN, DEPARTMENT OF CLINICAL PARTHALOGY, ASHA BUILDING, IDA SCUDDER ROAD, CMC HOSPITAL, VELLORE -4. VS. THE INCOME TAX OFFICER, WARD I(6) VELLORE. [PAN AAWPC 5712D ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. K. RAVI, ADVOCATE $% ! ' # /RESPONDENT BY : SHRI. A.V. SREEKANTH, IRS, JCIT & ' '( /DATE OF HEARING : 10-08-2016 )* ' '( /DATE OF PRONOUNCEMENT : 17-08-2016 ! / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, CHE NNAI IN ITA NO.108/CIT(A)-13/2008-09, DATED 02.03.2016 FOR THE ASSESSMENT YEAR ITA NO. 1478/MDS/2016 :- 2 -: 2008-2009 PASSED U/S.143(3) AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- 2. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILE D TO CONSIDER THE FACT THAT ALL ADDITIONS TO INCOME RELA TES TO 2007-2008 ASSESSMENT YEAR AND NOT 2008-2009 ASSESSMENT YEAR. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) IGNORED THE FACT THAT ALL THE SOURCES RELATE TO 2007 -2008 ASSE SSMENT YEAR WERE ALL CREDITED TO BANK ACCOUNT DURING 2007- 2008 ASSESSMENT YEAR. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) DID NOT LOOK IN TO THE SUBMISSION THAT THE AMOUNT CREDITED TO THE BANK ACCOUNT IN 2007 - 2008 ASSESSMENT YEAR WERE REFLECTED IN THE BANK ACCOUNT AS CLOSING BALANCE AS ON 31.03.2007. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) AS FILE D TO LOOK IN TO THE FACT THE BANK BALANCE AS ON 31.03.2007 (RELATING TO 2007 - 2008 A/Y) WERE UTILIZED FOR INV ESTMENT IN 2008 - 2009 ASSESSMENT YEAR. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A SALARIED EMPLOYEE AND FILED THE RETURN OF INCOME ELECTRON ICALLY ON 08.08.2008 WITH TOTAL INCOME OF A6,05,000/- AND THE RETURN OF INCOME WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICES U/S.1 43(2) AND 142(1) OF THE ACT WERE ISSUED. IN COMPLIANCE TO NOTICE, THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE APPEARED FROM TIME TO TI ME AND SUBMITTED DETAILS. THE LD. ASSESSING OFFICER BASED ON THE AI R INFORMATION FOUND THAT THE ASSESSEE HAS MADE INVESTMENTS IN MUTUAL FU NDS IN THE ITA NO. 1478/MDS/2016 :- 3 -: FINANCIAL YEAR 2007-2008 AND THE LD. AUTHORISED REP RESENTATIVE WAS ASKED TO PRODUCE SOURCES OF INVESTMENTS IN MUTUAL F UNDS ALONGWITH BANK STATEMENTS, CASH FLOW STATEMENT AND SUPPORTIN G EVIDENCES AND THE SAME WERE PRODUCED. THE LD. AUTHORISED REPRESE NTATIVE EXPLAINED THAT THE INVESTMENTS IN MUTUAL FUNDS ARE DUE TO REI NVESTMENT OF UNITS OR REDEMPTION OF UNITS OF THE SAME MUTUAL FUND COM PANY BUT UNDER DIFFERENT SCHEMES AND SUPPORTED WITH COPY OF MUTUA L FUND STATEMENT OF VARIOUS FUNDS. FURTHER, THE LD. ASSESSING OFFICE R PERUSED THE AXIS BANK STATEMENT OF THE ASSESSEE AND FOUND THAT AN A MOUNT OF A49,89,139/- WAS UTILIZED FOR INVESTMENTS AND CALLE D FOR THE EXPLANATIONS WITH THE SOURCES OF MONEY AND THE SAME WAS FURNISHED THROUGH LETTER DATED 29.11.2010 WITH SUPPORTING EV IDENCE. THE LD. ASSESSING OFFICER DISBELIEVED THE AGRICULTURAL INC OME, RENTAL INCOME, SALARY INCOME, GIFT FROM FATHER AND WIFE AND INCOME /SAVING FROM THE OVERSEAS EMPLOYMENT AND TREATED AS UNEXPLAINED INVE STMENTS U/S.69B OF THE ACT AND SOUGHT CLARIFICATIONS ON AXIS BANK ACCOUNT AND PASSED ORDER U/S.143(3) OF THE ACT AND DETERMINED TOTAL I NCOME OF A38,51,380/- AND RAISED DEMAND. AGGRIEVED BY THE OR DER, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX ( APPEALS). ITA NO. 1478/MDS/2016 :- 4 -: 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE EXPLAINED THAT THE ASSESSEE IS HAVIN G AGRICULTURAL INCOME SOURCE GENERATED OUT OF 7 ACRES ALLOCATED TO ASSESSEE SHARE ON PARTITION IN THE YEAR 1999 BUT DUE TO NON SUBMI SSION OF INFORMATION THE SOURCE WAS DISBELIEVED. IN RESPECT OF SOURCE O F RENT AND SALARY INCOME, THE WIFE OF THE ASSESSEE IS ASSESSED TO INCOME TAX FROM THE YEAR 1990 AND IS IN RECEIPT OF RENTAL INCOME AND DI SCLOSED IN THE INCOME TAX RETURNS AND LD. COMMISSIONER OF INCOME T AX (APPEALS) DELETED THE ADDITION TO THE EXTENT OF A2,59,000/-. FURTHER THE ASSESSEE IN EARLIER YEARS WORKED IN AUSTRALIA AND THE AMOUNT HAS BEEN BROUGHT TO INDIA. THE ASSESSEE COULD NOT SUBST ANTIATE WITH THE DETAILS OF TRANSFER OF FUNDS TO INDIA WITH BANK ACC OUNT FOR A7,50,000/- AND ADDITION WAS CONFIRMED. FURTHER, THE CONTENTION S OF THE ASSESSEE THAT THE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING UNEXPLAINED INVESTMENTS UNDER SEC. 69B OF THE ACT. IN REGARD T O THE OPENING BALANCE OF A49,89,139/- AS APPEARING IN THE AXIS BANK ACCOUNT AND THE SOURCES FOR OPENING BALANCE BEING SALE OF AGRI CULTURAL LAND AND GIFT RECEIVED FROM FATHER ETC RELATING TO EARLIER YEARS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITH ABOVE OBSERVATIONS HA S PASSED THE ORDER AND PARTLY ALLOWED THE APPEAL. AGGRIEVED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ORDER, THE ASSESSEE ASSAILE D AN APPEAL BEFORE TRIBUNAL. ITA NO. 1478/MDS/2016 :- 5 -: 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE ARGUE D THE GROUNDS, REITERATED THE SUBMISSIONS MADE IN THE ASS ESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS AND EXPLAINED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT C ONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT THE OPENING BALAN CE AMOUNT SOURCE IS RELATED TO EARLIER ASSESSMENT YEAR AND WHEREAS T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) PARTLY ALLOWED THE APPEAL AND FAILED TO CONSIDER THE SUBMISSIONS ON ADDITIONS PERTAINING TO ASSESSMENT YEAR 2007-2008 AND NOT THE CURRENT ASSESSMENT YEAR WHICH IN DISPUTE. THE BANK BALANCE IN AXIS BANK WITH OPENING BALANCE AS O N 01.04.2007 ARE ACCUMULATED AMOUNT OF SALE OF AGRICULTURAL LAND, S AVINGS AND GIFTS ETC AND THE SAME SOURCE WAS UTILIZED FOR INVESTMENTS IN MUTUAL FUNDS IN THE FINANCIAL YEAR 2007-2008 AND PRAYED FOR ALLOWIN G THE APPEAL. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) AND VEHEMENTLY OPPOSED TO THE GROUNDS. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD. THE MAIN CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE THAT THE ADDITIONS MADE BY THE LD. ASSESSING OFFIC ER ARE IN RESPECT ITA NO. 1478/MDS/2016 :- 6 -: OF OPENING BALANCE AS ON 01.04.2007 IN THE AXIS BAN K OF THE ASSESSEE. THE LD. ASSESSING OFFICER NOT SATISFIED WITH SUBMISSIONS OF THE ASSESSEE MADE ADDITION AS UNEXPLAINED INVEST MENTS U/S.69B OF THE ACT. FURTHER, IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE ARGUED THAT THE LD. ASSESSING OFFI CER IS NOT JUSTIFIED IN TREATMENT OF OPENING BALANCE OF BANK ACCOUNT, EV EN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT DEALT ON THE DISPUTED ISSUE RAISED BY THE ASSESSEE. THE LD. AUTH ORISED REPRESENTATIVE FURTHER DREW OUR ATTENTION TO THE CO PY OF BANK ACCOUNT DISCLOSING THE OPENING BALANCE OF A.49,89,1 38/-. THE ASSESSEE HAS UTILIZED THE SAID MONEY FOR THE PURPOS E OF INVESTMENT IN MUTUAL FUNDS AND ALSO THERE IS NO FINDINGS BY TH E APPELLATE AUTHORITY ON THE DISPUTED ISSUE ON YEAR OF TAXABIL ITY. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS TO CONSIDE R SUBMISSIONS ON EVERY POINT OF DISPUTE AND PASS A SPEAKING ORD ER. WHEREAS, THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APP EALS) IS NOT PROPERLY ADJUDICATED AND SHOULD BE DECIDED AFRESH. WE RELY ON THE DECISION OF SUPREME COURT IN THE CASE OF SAHARA INDIA VS. CIT & ANR. (300 ITR 403 ) WERE IT WAS HELD THAT 'AN ADMINISTRATIVE ORDER HAS TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE' AN D SIMILAR VIEW WAS CONSIDERED BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S.GAP INTERN ATIONAL SOURCING ITA NO. 1478/MDS/2016 :- 7 -: INDIA (P) LTD. VS. DCIT (8 ITR 0177 ) AND M/S. ADOBE SYSTEMS INDIA PRIVATE LTD. V. ADDL. CIT IN ITA NO.5043/DEL/2010 D ATED 21.01.2011 . CONSIDERING APPARENT FACTS, MATERIAL EVIDENCE AND J UDICIAL DECISIONS, WE ARE INCLINED TO THE REMIT THE DISPUTED ISSUE BA CK TO THE FILE OF COMMISSIONER OF INCOME TAX (APPEALS) TO PASS A SPEA KING ORDER ON MERITS AND THE ASSESSEE SHALL BE PROVIDED WITH ADE QUATE OPPORTUNITY OF BEING HEARD BEFORE PASSING THE ORDE R ON MERITS. THE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATI STICAL PURPOSE. 8. . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 17TH DAY OF AUGUST, 2016, AT CHENNAI. SD/- SD/- ( . ) (ABRAHAM P. GEORGE) $ % / ACCOUNTANT MEMBER ( . ) (G. PAVAN KUMAR) & % / JUDICIAL MEMBER +& / CHENNAI , / DATED: 17TH AUGUST, 2016 KV - ' $'./ 0/' / COPY TO: 1 . ! / APPELLANT 3. 1' () / CIT(A) 5. /45 $'6 / DR 2. $% ! / RESPONDENT 4. 1' / CIT 6. 57 8& / GF