S.Venkatesan, CHENNAI V. ACIT, CHENNAI

ITA 1580/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8614 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2000-2001
• Appeal Filed On: 09-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NO.1580/MDS/2014 # $%# / ASSESSMENT YEAR : 2000-01 SHRI S.VENKATESAN, 134, SOUTH JEGANATH NAGAR, VILLIVAKKAM, CHENNAI 600 049. PAN : AACPV2400K V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III (4), CHENNAI 600 034. ('(/ APPELLANT) ()*'(/ RESPONDENT) '( + , / APPELLANT BY : SHRI S.SRIDHAR, ADVOCATE )*'(+, / RESPONDENT BY : SHRI P.RADHAKRISHNAN, JCIT - $+./ / DATE OF HEARING : 14.06.2016 01% +./ / DATE OF PRONOUNCEMENT : 01.09.2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-III, CHENNAI DATED 28.02.2014 AND PERTAINS TO ASSESSMENT YEAR 2000-01. 2. SHRI S.SRIDHAR, THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE FIRST ISSUE FOR CONSIDERATION IS SUSTAINING THE ADD ITION OF RS.6,25,000/- BEING THE AMOUNT WITHDRAWN FROM M/S.WSA LINES (I) P LTD. SHRI S.SRIDHAR, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE RETU RN OF INCOME, THE ASSESSEE 2 I.T.A. NO.1580/MDS/2014 CLAIMED THAT A SUM OF RS.6,25,000/- WAS WITHDRAWN F ROM M/S.WSA LINES (I) P LTD. THE ASSESSING OFFICER MADE ADDITION UNDER SECT ION 68 OF THE INCOME TAX ACT ON THE GROUND THAT THE ASSESSEE COULD NOT PRODU CE ANY CONFIRMATION LETTER FROM THE COMPANY FOR WITHDRAWAL OF THE MONEY. THE C IT(A) ALSO CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDING T O THE LD. COUNSEL FOR THE ASSESSEE, AN OPPORTUNITY MAY BE GIVEN TO THE ASSESS EE TO PRODUCE THE RELEVANT MATERIAL BEFORE THE ASSESSING OFFICER FOR EXAMINATION. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSES SEE CLAIMS THAT A SUM OF RS.6,25,000/- WAS WITHDRAWN FROM M/S.WSA LINES (I) P LTD. HOWEVER, THE ASSESSEE COULD NOT FILE ANY MATERIAL EITHER BEFORE THE ASSESSING OFFICER OR BEFORE CIT (A) TO SUPPORT THE CLAIM OF WITHDRAWAL. NOW, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO PRODUCE THE RELEVANT MATERIAL. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIVING ONE MORE OPPORTUNITY FOR PRODUCING THE MATER IAL BEFORE THE ASSESSING OFFICER MAY NOT PREJUDICE THE INTEREST OF THE REVEN UE IN ANY WAY. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIVEN SUCH AN OPP ORTUNITY TO THE ASSESSEE WOULD DEFINITELY PROMOTE THE CAUSE OF JUSTICE. THER EFORE, BY KEEPING THE INTEREST OF JUSTICE IN MIND, THE ORDERS OF THE LOWE R AUTHORITIES ARE SET ASIDE AND THE ADDITION OF RS.6,25,000/- IS REMITTED BACK TO T HE FILE OF THE AO. THE AO SHALL RE-EXAMINE THE MATTER AFRESH IN THE LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND DECIDE THE SAME IN ACCORDANCE W ITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 3 I.T.A. NO.1580/MDS/2014 4. THE NEXT ISSUE IS WITH REGARD TO THE ADDITION OF RS.2,22,220/- BEING THE INTEREST RECEIVED FROM KISSAN VIKAS PATRA WHILE COM PUTING THE TAXABLE INCOME. SHRI S.SRIDHAR, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE INVESTED THE FUNDS IN KISSAN VIKAS PAT RA. THE ASSESSING OFFICER FOUND THAT THE INTEREST ACCRUED ON THE KISSAN VIKAS PATRA WAS NOT OFFERED FOR TAXATION. ACCORDINGLY, HE COMPUTED THE INTEREST ACC RUED ON THE KISSAN VIKAS PATRA TO THE EXTENT OF RS.2,22,220/- AND ADDED THE SAME TO THE TAXABLE INCOME. ACCORDING TO THE LD. COUNSEL FOR THE ASSESS EE, THE ASSESSEE HAD THE OPTION OF OFFERING THE ACCRUED INTEREST ON KISSAN V IKAS PATRA EITHER ON YEARLY BASIS OR AT THE TIME OF MATURITY OF THE KISSAN VIKA S PATRA. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN COMPUTING THE ACCRUED INTEREST ON YEARLY BASIS. 5. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, JCIT, TH E LD. REPRESENTATIVE FOR THE DEPARTMENT SUBMITTED THAT, ADMITTEDLY, THE ASSESSEE INVESTED IN KISSAN VIKAS PATRA, THOUGH, THE ASSESSE E CLAIMS THAT THE INTEREST ACCRUED ON THE KISSAN VIKAS PATRA WOULD BE OFFERED FOR TAXATION ON MATURITY OF THE KISSAN VIKAS PATRA. THERE IS NO MATERIAL AVAILA BLE ON RECORD EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) THAT THE ASSESSEE HAS OFFERED THE INTEREST ACCRUED ON THE INVESTMENT IN KISSAN VIKAS PATRA ON ITS MATURITY. IN THE ABSENCE OF ANY MATERIAL ON RECORD, ACCORDING TO THE DEPARTMENT REPRESENTATIVE, THE CIT(A) HAS RIGHTLY CONFIRMED TH E ADDITION MADE BY THE AO. 4 I.T.A. NO.1580/MDS/2014 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE INVESTED IN KISSAN VIKAS PATRA AND INTEREST ACCRUED ON SUCH INVESTMENT WAS NOT OFFERED FOR TAXABLE DURING THE YEAR UNDER CONSI DERATION. NO DOUBT, THIS ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG. THE INTEREST ACCRUED ON KISSAN VIKAS PATRA WAS REINVESTED IN THE VERY SA ME PATRA AND IT WAS NOT PAID TO THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT WHEN THE ASSESSEE OPTED TO OFFER THE INTEREST ON KISSAN VIKA S PATRA ON ITS MATURITY, THE SAME CANNOT BE FOUND FAULT BY THE AUTHORITIES BELOW . HOWEVER, IN THE CASE BEFORE US, NO MATERIAL IS AVAILABLE ON RECORD TO SU GGEST THAT THE INTEREST ACCRUED ON KISSAN VIKAS PATRA WAS OFFERED FOR TAXAT ION ON ITS MATURITY. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. THE ASSESS ING OFFICER SHALL EXAMINE AND FIND OUT WHETHER THE ASSESSEE HAS OFFER ED THE INTEREST ACCRUED ON KISSAN VIKAS PATRA ON ITS MATURITY FOR TAXATION. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE O F ADDITION ON INTEREST FROM KISSAN VIKAS PATRA IS REMITTED BACK TO THE FILE OF THE AO. THE AO SHALL RE- EXAMINE THE MATTER AFRESH IN THE LIGHT OF THE MATER IAL THAT MAY BE FILED BY THE ASSESSEE AND DECIDE THE SAME IN ACCORDANCE WITH LAW , AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 7. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF RS.5,00,000/- BEING THE WITHDRAWAL SAID TO BE MADE FROM HUF ACCOU NT. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED THAT A SUM OF RS.5,00, 000/- WAS WITHDRAWN FROM SHRI VENKATESAN (HUF). HOWEVER, NO MATERIAL WA S APPEARED TO HAVE 5 I.T.A. NO.1580/MDS/2014 BEEN FILED BEFORE THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.5,00,000/-. ON APPEAL BY THE ASSESSEE BEFORE THE CIT(A), IT APPEARS THAT A REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER EVEN IN THE REMAND PROCEEDINGS, THE ASSESSE E COULD NOT FILE ANY MATERIAL TO SUPPORT THE CLAIM OF WITHDRAWAL OF MONE Y FROM VENKATESAN (HUF) ACCOUNT. IN VIEW OF THE FACT THAT THE ASSESSEE COUL D NOT PRODUCE ANY MATERIAL, THE CIT FOUND THAT THE ASSESSEE COULD NOT PROVE THE SOURCE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDL Y, AN ADDITION OF RS.5,00,000/- WAS MADE AS UNEXPLAINED MONEY FOR WAN T OF MATERIAL FROM THE ASSESSEE. THE ASSESSEE EVEN THOUGH CLAIMS THAT A SU M OF RS.5,00,000/- WAS WITHDRAWN FROM HUF ACCOUNT, THE SAME WAS NOT PROVED BY NECESSARY MATERIAL. GIVING ONE MORE OPPORTUNITY FOR PRODUCING THE MATERIAL BEFORE THE ASSESSING OFFICER WOULD NOT PREJUDICE THE INTEREST OF THE REVENUE IN ANY WAY. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIV ING SUCH AN OPPORTUNITY TO THE ASSESSEE WOULD DEFINITELY PROMOTE THE CAUSE OF JUSTICE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ADDITION OF RS.5,00,000/- SAID TO BE WITHDRAWN FROM THE HUF ACCOUNT IS REMITT ED BACK TO THE FILE OF THE ASSESSING OFFICER. THE AO SHALL RE-EXAMINE THE MATT ER AFRESH IN THE LIGHT OF THE MATERIALS THAT MAY BE PRODUCED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6 I.T.A. NO.1580/MDS/2014 9. THE NEXT GROUND FOR CONSIDERATION IS WITH REGARD TO ADDITION OF RS.6,00,000/- SAID TO BE RECEIVED FROM V.K.PATTAMMA L. SHRI S.SRIDHAR, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT A S UM OF RS.6,00,000/- WAS RECEIVED FROM V.K.PATTAMMAL. FOR WANT OF MATERIAL E VIDENCES, THE ASSESSING OFFICER MADE ADDITION OF RS.6,00,000/- TO THE TAXAB LE INCOME. THE CIT(A) ALSO FOUND THAT NO MATERIAL WAS PRODUCED TO SUPPORT THE CLAIM OF RECEIPT OF RS.6,00,000/- FROM SMT.V.K.PATTAMMAL. ACCORDING TO THE LEARNED COUNSEL, MRS. V.K.PATTAMMAL HAD FIXED DEPOSITS IN THE BANK ACCOUN T. THE FIXED DEPOSIT ACCOUNT WAS CLOSED AND THE PROCEEDS OF THE FIXED DE POSIT WAS PAID TO THE ASSESSEE. THE LEARNED COUNSEL FURTHER SUBMITTED THA T AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO PRODUCE THE DETAILS OF THE FIXED DEPOSIT BEFORE THE ASSESSING OFFICER. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDL Y, THE ASSESSEE CLAIMED BEFORE THE LOWER AUTHORITIES THAT HE RECEIVED A SUM OF RS.6,00,000/- FROM SMT.V.K.PATTAMMAL. THE SOURCE FOR V.K.PATTAMMAL APP EARS TO BE CLOSURE OF THE FIXED DEPOSIT ACCOUNT. HOWEVER, THE DETAILS OF THE FIXED DEPOSIT ACCOUNT WAS NOT AVAILABLE EITHER BEFORE THE ASSESSING OFFICER O R BEFORE THE CIT(A). WHEN THE ASSESSEE CLAIMED THAT MRS.V.K.PATTAMMAL GAVE RS.6,0 0,000/- FROM THE PROCEEDS OF THE FIXED DEPOSITS, GIVING ONE MORE OPP ORTUNITY TO THE ASSESSEE TO ESTABLISH THE SOURCE OF RECEIPT OF MONEY MAY NOT PR ODUCE THE INTEREST OF THE REVENUE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE CLAIMS THAT HE IS WILLING AND READY TO FURNISH THE NECESSARY MATERIAL BEFORE THE ASSESSING OFFICER, GIVING ONE MORE OPPORTUNITY FOR PRODUCING THE MATERIAL 7 I.T.A. NO.1580/MDS/2014 BEFORE THE ASSESSING OFFICER WOULD NOT PREJUDICE TH E INTEREST OF THE REVENUE IN ANY WAY. HENCE, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND ADDITION OF RS.6,00,000/- IS REMITTED BACK TO THE FILE OF TH E AO. THE AO SHALL RE-EXAMINE THE MATTER AFRESH IN THE LIGHT OF THE MATERIAL THAT MAY BE PRODUCED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDAN CE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 11. THE NEXT ISSUE ARISES FOR CONSIDERATION IS THA T ADDITION OF RS.1,00,000/- SAID TO BE RECEIVED FROM SHRI V.S.VASUDEVAN. SHRI S .SRIDHAR, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSE E CLAIMED BEFORE THE ASSESSING OFFICER THAT HE RECEIVED A SUM OF RS.1,00 ,000/- FROM SHRI V.S.VASUDEVAN. IN THE ABSENCE OF ANY CONFIRMATION L ETTER FROM THE SAID V.S.VASUDEVAN, THE AO MADE ADDITION AND THE CIT(A) HAS ALSO CONFIRMED THE ORDER OF THE AO. ACCORDING TO THE LEARNED COUNSEL, THE ASSESSEE HAS FILED THE CONFIRMATION LETTER BEFORE THE CIT(A) AND CIT (A) C ONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THE BASIS OF THE REMAND REPORT . THE CIT(A) FURTHER OBSERVED THAT THE CONFIRMATION LETTER WAS ON SIMILA R FORMAT. ACCORDING TO THE LEARNED REPRESENTATIVE, THE AO HAS NOT RAISED ANY D OUBT ABOUT THE CONFIRMATION LETTER OF MR.V.S.VASUDEVAN. ACCORDING TO THE LEARNE D COUNSEL, IT IS OPEN TO THE AO TO SUMMON THE SAID SHRI V.S.VASUDEVAN AND EXAMIN E THE GENUINENESS OF TRANSACTION. 12. ON THE CONTRARY, SHRI P.RADHAKRISHNAN, THE LEA RNED REPRESENTATIVE FOR THE DEPARTMENT SUBMITTED THAT EVEN THOUGH THE ASSES SEE CLAIMED BEFORE THE 8 I.T.A. NO.1580/MDS/2014 AO THAT HE RECEIVED A SUM OF RS.1,00,000/- FROM SHR I V.S.VASUDEVAN, NO MATERIAL EVIDENCE WAS FILED BEFORE THE AO. BEFORE C IT (A), THE ASSESSEE HAS FILED CONFIRMATION LETTER. THE CIT (A) CALLED FOR R EMAND REPORT FROM AO. THE AO DURING REMAND PROCEEDING FOUND THAT THE SO CALLED C ONFIRMATION LETTERS ARE IN SIMILAR FORMAT. THE SAME WAS WRITTEN ON THE SAME DA TE. THEREFORE, THE CIT(A) FOUND THAT THE SO CALLED CONFIRMATION LETTER IS ONL Y PREPARED FOR THE PURPOSE OF PRODUCING BEFORE THE AUTHORITIES. THE LEARNED DEPAR TMENT REPRESENTATIVE SUBMITTED THE BODY OF THE CONFIRMATION LETTER IN AL L CASES ARE SIMILAR. THEREFORE, THERE WAS A DOUBT, WHO HAS ACTUALLY SIGNED THE CONF IRMATION LETTER. THEREFORE, ACCORDING TO THE LEARNED DEPARTMENT REPRESENTATIVE, THE CIT(A) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. EVEN THOU GH CONFIRMATION LETTER WAS FILED BEFORE THE CIT(A), HE FOUND THAT THE CONFIRMA TION LETTER FILED BY THE ASSESSEE ARE IN SIMILAR FORMAT AND THE SAME WAS PRE PARED JUST FOR THE SAKE OF PRODUCING BEFORE THE AUTHORITIES. BEFORE REJECTING THE CLAIM OF THE ASSESSEE, THE AO HAS NOT MADE ANY ATTEMPT TO EXAMINE THE SO CALLE D CREDITOR. 14. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE AO OR CIT(A) SHOULD HAVE SUMMONED THE CREDITOR AND FOUND OUT WHETHER HE , IN FACT ADVANCED MONEY TO THE ASSESSEE. SUCH AN EXERCISE WAS NOT DON E EITHER BY AO OR BY CIT(A). THEREFORE, THIS MATTER NEEDS TO BE RE-EXAMI NED BY THE AO. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ADDITION OF RS.1,00,000/- IS REMITTED BACK TO THE FILE OF TH E AO . THE AO SHALL RE- 9 I.T.A. NO.1580/MDS/2014 EXAMINE THE MATTER AFRESH IN THE LIGHT OF THE MATER IAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDAN CE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 01 ST SEPTEMBER, 2016 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2! /DATED, THE 01 ST SEPTEMBER, 2016. SP. + ).34 54%. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 6. ( )/CIT(A) 4. - 6. /CIT 5. 4$7 ). /DR 6. 8# 9 /GF.