DCIT, Salem V. Green Field Shelters Pvt. Ltd., Salem

ITA 1639/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96247 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 12-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-07-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: T VASUDEVAN
• Keywords: Income from undisclosed sources
• Section: 132

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL ME MBER ./ I.T.A.NO. 16 39 /MDS/201 5 / ASSESSMENT YEAR :20 0 8 - 09 THE DEPUTY COMMISSIONER OF INCOME TAX, C ENTRAL CIRCLE , NO.3, GANDHI ROAD, SALEM - 7 . VS. M/S. GREEN FIELD SHELTERS PVT. LTD., NO. C - 10(14/41), PERUMAL KOIL STREET, SWAR NAPURI, SALEM. [PAN: AA CC G6140L ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT / RESPONDENT BY : SHRI T. VASUDEVAN, ADVOCATE / DATE OF HEARIN G : 12 . 1 0 .201 5 / DATE OF P RONOUNCEMENT : 16 .10 .201 5 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : TH I S APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 18 , C HENNAI , DATED 25 . 0 2 .201 5 RELEVANT TO THE ASSESSMENT YEAR 20 0 8 - 09 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPING HOUSING PLOTS. THERE WAS A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] CONDUC TED IN THE PREMISES OF ONE SHRI A.S. AADHINARAYANAN ON 29.01.2009 AND ONE OF THE ITEMS SEIZED I.T.A. NO . 1639 /M/ 1 5 2 WAS A BROCHURE OF THE ASSESSEE CONTAINING FOUR PAGES ABOUT THE INFORMATION ON WILD ORCHID PROJECT. DURING THE COURSE OF SEARCH PROCEEDINGS IN THE CASE OF SHRI A. B . S. SANJAY, S/O SHRI A.B. SUDARSANAM, IN THE STATEMENT DATED 13.02.2009, SHRI A . B . S . SANJAY HAS STATED THAT HE HAS PAID ON - MONEY OF . 26,00,000/ - FOR THE PURCHASE OF A PLOT AT YERCAUD FROM M/S. GREEN F IE L D SHELTERS PVT. LTD. SHRI A.B.S. SANJAY HAS ADMITTE D THE AMOUNT OF .26,00,000/ - IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2008 - 09. THE ASSESSING OFFICER HAS ASKED THE ASSESSEE AS TO WHY THE AMOUNT OF .26,00,000/ - SHOULD NOT BE TREATED AS UNACCOUNTED RECEIPTS. THE ASSESSEE HAS FILED A DETAILED REPLY BEFORE THE ASSESSING OFFICER BY STATING AS UNDER: READING THE SWORN STATEMENT OF SRI A.B. SUDARSANAM MADE ON 25.03.2009 HE HAD NOT STATED THAT HE HAD PAID AN ON MONEY OF RS. 26,00,000/ - IN THE INVESTMENT MADE BY HIS SON SANJAY AT GREEN FIELD SHELTER S WHICH HE HAD STATED IN HIS LETTER DATED 13.02.2009. ALL THAT SANJAY HAS INVESTED IS RS.16,83,750/ - (8,55,300+8,28,450,) PLUS THE STAMP DUTY. POSSIBLY THIS INVESTMENT WOULD HAVE BEEN CASUALLY STATED AS 26 LAKHS TO FILL UP THE BALANCE OF INVESTMENT MADE BY HIM TO THE EXTENT OF 10 CRORES WHICH HE HAS OFFERED MAY BE THE PURCHASE OF THE PLOT WITH GREEN FILED SHELTERS WERE NOT ACCOUNTED FOR BY HIM AS HE HAD PAID THE PURCHASE CONSIDERATION IN CASH. HENCE THE ACIT IS NOT CORRECT TO HOLD THAT 26 LAKHS INVESTMENT N OT ACCOUNTED BY A.B. SUDARSANAM IS ON MONEY PAYMENT TO THE COMPANY AND HIS INFERENCE IN NOT IN ORDER. THE ASSESSEE COMPANY HAS PROPERLY ACCOUNTED THE SALE OF TWO PLOTS MADE TO A.B.S. SANJAY IN DOC. NO. 1105/2007 AND IN DOC. 144/2008 DATED 18.02.2008. IF BY ANY CHANCE THE BUYER HAD NOT ACCOUNTED THE SAME IN HIS BOOKS AND HAD ADMITTED THE ENTIRE INVESTMENT AS UNACCOUNTED, IT DOES NOT MEAN THAT THE SATED AMOUNT IS ON MONEY PAYMENT AND THAT IT SHOULD BE ASSESSED IN THE LANDS OF THE ASSESSEE COMPANY. FURTHER T HERE IS NOT EVEN A SHRED OF EVIDENCE WITH THE DEPARTMENT TO COME TO THE CONCLUSION THAT THE ENTIRE AMOUNT OF RS. 26 LAKHS IS ON MONEY PAID AS CAN BE SEEN IN THE ANSWER TO Q. 3 THE SAID A.B. SUDHARSANAM ONLY STATES THAT VARIOUS INVESTMENTS TOTALLING RS.10 I.T.A. NO . 1639 /M/ 1 5 3 C RORES HAVE BEEN MODE BY HIM WHICH ARE NOT ACCOUNTED BY HIM AND MADE OUT OF HIS UNACCOUNTED INCOME. NOWHERE HE HAS STATED THAT THE AMOUNT OF RS. 26 LAKHS IS ON MONEY PAID. THE ASSESSEE RELIES ON THE JUDGEMENT OF THE APEX COURT IN P. V KALYANASUNDARAM S CA SE REPORTED IN 282 ITR 259 (MAD) AND CONFIRMED BY THE HON BLE SUPREME COURT REPORTED IN 294 ITR 49 (SC) WHICH FOLLOWED KP. VARGHESE VS. ITO REPORTED IN 131 ITR 597 (SC) WOULD SQUARELY APPLY TO THE FACTS OF THE ASSESSEE S CASE. CONSIDERING ALL THE ABOVE S UBMISSIONS THE ACIT MAY BE PLEASED TO DROP THE PROPOSAL TO ADD A SUM OF RS. 26 LAKHS TO THE INCOME RETURNED AND RENDER JUSTICE. 3. THE ASSESSING OFFICER, AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, BASED ON THE SEIZED MATERIAL AND ALSO STATEMENT GIVEN BY SHRI A.B.S. SANJAY, HE CAME TO A CONCLUSION THAT THE AMOUNT OF .26,00,000/ - IS ON - MONEY AND WAS UNACCOUNTED AND THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: 5. I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE WRITTEN SUBMISSIONS, GROUNDS AND ALSO CONSIDERED THE ADDITIONAL SUBMISSIONS MADE BEFORE ME BY THE AR. AFTER TAKING INTO ACCOUNT ALL THESE INTO CONSID ERATION, I AM OF THE CONSIDERED VIEW THAT THE ASSUMPTION OF JURISDICTION BY THE AO UNDER SECTION 153C IS ILLEGAL FOR THE FOLLOWING REASONS: (A) SEIZED DOCUMENT VIZ, BROCHURE CANNOT BE TREATED AS AN INCRIMINATING DOCUMENT. I.T.A. NO . 1639 /M/ 1 5 4 (B) THERE IS NO EVIDENCE IN THE FORM OF DOCUMENTARY PROOF TO SHOW THAT EITHER THE OTHER PARTY PAID OR THE APPELLANT RECEIVED RS.26 LAKHS AS ON - MONEY ( C ) THE AO, BELIEVING THE STATEMENT OF THE OTHER PARTY THAT HE HAD PAID ON - MONEY, ISSUED THE IMPUGNED NOTICE. (D) ABOVE ALL THE O NUS CAT UPON THE AO IN: PROVING THAT THE APPELLANT RECEIVED ON - MONEY LIES STILL ON THE AO ONLY. (E) LAST BUT NOT LEAST, THE AO HAS NOT PROVIDED AN OPPORTUNITY TO THE APPELLANT BY ALLOWING THE APPELLANT TO CROSS - EXAMINE THE OTHER PARTY WHO HAD GIVEN THE SWORN STATEMENT STATING THAT HE HAD PAID ON - MONEY TO THE APPELLANT. ACCORDINGLY THE GROUND OF APPEAL RAISED REGARDING THE WRONGFUL ASSUMPTION OF JURISDICTION IS ALLOWED. 5. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SEIZED DOCUMENT I.E., BROCHURE CANNOT BE TREATED AS INCRIMINATING DOCUMENT. THEREFORE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER BASED ON THE STATEMENT O F THE PURCHASER WITHOUT GIVING AN OPPORTUNITY TO CROSS EXAMINE AND ON BOTH THE COUNTS, THE APPEAL OF THE REVENUE HAS TO BE DISMISSED. 7. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. A SEARCH ACTION WAS TAKEN PLACE IN THE PREMISES OF SHRI A.S. AADHINARAYANAN FROM WHERE A BROCHURE CONTAINING FOUR PAGES ABOUT THE INFORMATION OF THE WILD ORCHID WAS SEIZED. I.T.A. NO . 1639 /M/ 1 5 5 SUBSEQUEN TLY, ON THE BASIS OF THE STATEMENT GIVEN BY THE PURCHASER, THE ASSESSING OFFICER CAME TO A CONCLUSION THAT THE AMOUNT OF 26 LAKHS WAS PAID AS ON - MONEY AND ACCORDINGLY ADDITION WAS MADE. ON APPEAL, THE LD. CIT(A) GAVE A CATEGORICAL FINDINGS THAT THE BROCHU RE IS NOT AN INCRIMINATING MATERIAL FOR THE PURPOSE OF 153C OF THE ACT AND ADDITION WAS MADE ONLY ON THE STATEMENT OF THE PURCHASER AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT (A). THUS, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 16 TH O F OCTOBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( V. DURGA RA O ) JUDICIAL MEMBER CHENNAI, DATED, THE 16 . 1 0 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.