M/s. Roopchand Chabildoss & Sons, CHENNAI V. ACIT, CHENNAI

ITA 173/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61072 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-04-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 27-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R PADMANABHAN
• Keywords: Unexplained investment
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S.SAINI, ACCOUNT ANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.173/MDS/2012 (ASSESSMENT YEAR : 2003-04) M/S. ROOPCHAND CHABILDOSS & SONS NO.12, WEST MADA CHURCH STREET, ROYAPURAM, CHENNAI-600 013. PAN:AACFR5884R VS. ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-XII CHENNAI-6 (APPELLANT) (RESPONDENT) APPELLANT BY : MR. R.PADMANABHAN, C.A., RESPONDENT BY : MR. SHAJ I P.JACOB, ADDL. CIT DATE OF HEARING : 25 TH APRIL, 2012 DATE OF PRONOUNCEMENT : 14 TH MAY, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING ORDER DATED 27.12.2011 PASSED BY THE CIT (A)-IV, CHENNAI. 2. THE ASSESSEE /APPELLANT IS A PARTNERSHIP FIRM. THE ASSESSEE IS IN SECOND ROUND OF LITIGATION. EARLIER THE ASSESSEE HAD FILED APPEAL BEFORE THE CIT(A) IMPUGNING ASSESS MENT ORDER DATED 31.3.2006 RELEVANT TO THE ASSESSMENT YE AR 2003- 04. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF THE CIT(A), DEPARTME NT ITA NO.173/MDS/ 2012 2 PREFERRED APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 9.10.2009 SET ASIDE THE ORDER OF THE CIT(A) A ND REMANDED THE MATTER BACK TO THE ASSESSING OFFICER T O PASS A DE NOVO ORDER AFTER EXAMINING AND VERIFYING THE REL EVANT RECORDS AND BOOKS OF ACCOUNTS. THE ASSESSEE WAS DIR ECTED TO PRODUCE ALL THE RELEVANT RECORDS AND BOOKS OF ACCOU NTS BEFORE THE ASSESSING OFFICER. 3. THE ASSESSEE HAD FILED ITS RETURN OF INCOME RE LEVANT TO THE ASSESSMENT YEAR 2003-04 ON 1.12.2003 DECLARING ITS TOTAL INCOME AS ` -3,17,90,843/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER VID E ORDER DATED 31.3.2006 RAISED DEMAND OF ` 25,27,114/-. DURING THE COURSE OF ORIGINAL ASSESSMENT THE ASSESSING OFFICER OBSERVED AN UNEXPLAINED INVESTMENT TO THE EXTENT OF ` 50 LAKHS AND AFTER MAKING ADDITION DEMAND OF ` 25,27,114/- WAS RAISED VIDE ORIGINAL ASSESSMENT ORDER DATED 31.3.2006. AFT ER THE MATTER WAS REMANDED BACK BY THE TRIBUNAL, THE ASSES SING OFFICER REEXAMINED THE MATTER. SINCE THE ASSESSEE C OULD NOT PRODUCE THE REQUIRED DETAILS/RECORDS, AS PER THE DI RECTIONS OF THE TRIBUNAL, THE ASSESSING OFFICER ASSESSED THE IN COME BY ITA NO.173/MDS/ 2012 3 ADDING A SUM OF ` 50.00 LAKHS AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT AND DEMAND OF ` 35,47,375/- INCLUDING INTEREST WAS RAISED BY THE ASSESSING OFFI CER VIDE ORDER DATED 31.12.2010. 4. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER GO ING THROUGH THE DOCUMENTS ON RECORD AND THE WRITTEN SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE UP HELD THE ORDER OF THE ASSESSING OFFICER AND DISMISSED THE AP PEAL OF THE ASSESSEE. THE ASSESSEE IS NOW IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ORDER DATED 27.12.2011 P ASSED BY THE CIT(A). 5. THE AUTHORIZED REPRESENTATIVE APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER DID NOT SERVE PROPER NOTICE ON THE ASSESSEE AND THUS NO APPROPR IATE OPPORTUNITY OF HEARING WAS AFFORDED TO THE ASSESSEE TO DEFEND HIS CASE. THE ASSESSING OFFICER HAS ONLY REITERATED THE ORIGINAL ASSESSMENT ORDER AND THE ORDER OF THE ASSE SSING OFFICER IS CRYPTIC AND WITHOUT APPLICATION OF MIND. HE FURTHER SUBMITTED THAT BEFORE THE CIT(A), THE AUTHORIZED ITA NO.173/MDS/ 2012 4 REPRESENTATIVE OF THE ASSESSEE APPEARED, BUT THE CA SE OF THE ASSESSEE WAS NOT TAKEN UP. HOWEVER, WRITTEN SUBMISS IONS WERE FILED BEFORE THE CIT(A) WHICH ARE PLACED AT PA GE NOS.31 TO 38 OF THE PAPER BOOK. 6. ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS PASSED BY THE ASSESSING OFFICE R AND THE CIT(A). HE SUBMITTED THAT A PERUSAL OF THE CERTIF ICATE FILED BY THE ASSESSEE ALONG WITH THE WRITTEN SUBMISSIONS BEF ORE THE CIT(A), WHICH IS AT PAGE 39 OF THE PAPER BOOK WOULD SHOW THAT THE NAME OF THE ASSESSEE IS CONFIRMED BY M/S.T RUE VALUE HOMES (INDIA) PVT.LTD., WITH WHOM FLAT WAS BOOKED A ND AN ADVANCE OF ` 50.00 LAKHS WAS PAID. THE D.R. REFERRED TO THE ORDER OF THE CIT(A) PAGE 2, PARA-3, WHEREIN THE CI T(A) HAD TAKEN NOTE OF THE CONFIRMATION LETTER/CERTIFICATE I SSUED BY M/S.TRUE VALUE HOMES (INDIA) PVT.LTD. HE CONTENDED THAT THE ASSESSEE HAS FAILED TO SHOW THE SOURCE OF INVESTMEN T OF ` 50.00 LAKHS. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION OF ` 50 LAKHS AS UNEXPLAINED INVESTMENT WHICH HAS BEEN CONFIRMED BY THE CIT(A). HE FURTHER SUBMITTED THAT THE ASSESSEE HAS FAILED TO SHOW FROM RECORDS ITA NO.173/MDS/ 2012 5 THE SOURCE OF INVESTMENT DESPITE THE FACT SEVERAL O PPORTUNITIES WERE GRANTED TO HIM BY THE ASSESSING OFFICER AS WEL L AS CIT(A). THE D.R. CONTENDED THAT THE ASSESSEE HAS AL SO NOT BEEN ABLE TO SHOW THAT THE ASSESSMENT ORDER AND IM PUGNED ORDER ARE ERRONEOUS OR CRYPTIC. 7. WE HAVE HEARD THE PARTIES. WE HAVE ALSO PERUSED THE ORDERS PASSED BY THE LOWER AUTHORITIES AND DOCUMEN TS REFERRED TO IN THE PAPER BOOK FILED ON BEHALF OF TH E ASSESSEE . THE A.R. OF THE ASSESSEE HAS CONTENDED THAT PROPE R OPPORTUNITY HAS NOT AFFORDED TO HIM TO DEFEND HIS C ASE EITHER BY THE ASSESSING OFFICER OR THE CIT(A). A PERUSAL O F THE ORDER DATED 31.12.2010 OF THE ASSESSING OFFICER SHOWS THA T SHRI PADMANABHAN, A.R. OF THE ASSESSEE APPEARED BEFORE T HE ASSESSING OFFICER. FOUR OPPORTUNITIES OF HEARING I. E. 25.8.10, 7.9.10, 8.9.10 AND 29.12.10 WERE AFFORDED TO THE AS SESSEE TO PRODUCE RECORD AND EXPLAIN THE SOURCE OF INVESTMENT OF ` 50 LAKHS. THE ASSESSING OFFICER IN HIS ORDER HAS SPEC IFICALLY RECORDED THAT THE A.R. OF THE ASSESSEE COULD NOT PR ODUCE THE REQUIRED DETAILS CALLED FOR AND THUS THE ASSESSMENT WAS COMPLETED ON THE BASIS OF RECORDS AVAILABLE WITH TH E ITA NO.173/MDS/ 2012 6 ASSESSING OFFICER. SIMILARLY, BEFORE THE CIT(A) AM PLE OPPORTUNITY OF HEARING WAS PROVIDED TO THE ASSESSEE . THE CASE WAS POSTED FOR HEARING ON 16.8.2011. THEREAFTE R THE CASE WAS ADJOURNED TO 23.8.2011 AT THE REQUEST OF M R. LAKSHMICHAND NAHATA, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. ON 23.8.2011 NONE APPEARED ON BEHALF OF T HE ASSESSEE AND THE CASE WAS ADJOURNED FROM 23.8.201 1 TO 28.9.11, AS AGAIN NONE APPEARED ON BEHALF OF ASSESS EE, THE CASE WAS THEREAFTER POSTED ON 3.9.2011, 19.10.2011A ND TO 16.12.2011 . ON 16.12.11, LAST OPPORTUNITY WAS GRA NTED AND THE CASE WAS ADJOURNED TO 19.12.2011. THE A.R. APPE ARING ON BEHALF OF THE ASSESSEE ON 19.12.2011 REQUESTED T HAT HE WOULD FILE THE DETAILS TO SHOW THE SOURCE OF UNEXPL AINED INVESTMENTS IN M/S.TRUE VALUE HOMES (INDIA) PVT. LT D. ON THE NEXT DATE. IN THE INTEREST OF JUSTICE THE CASE WA S AGAIN ADJOURNED TO 20.12.201. DESPITE SEVERAL OPPORTUNI TIES OF HEARING, THE ASSESSEE DID NOT PRODUCE THE RECORDS/D ETAILS TO SHOW THE SOURCE OF ` 50.00 LAKHS INVESTMENT IN M/S.TRUE VALUE HOMES (INDIA) PVT. LTD. THUS, THE CONTENTION OF THE ASSESSEE THAT HE WAS NOT GIVEN OPPORTUNITY TO DEFEN D HIS ITA NO.173/MDS/ 2012 7 CASE IS NOT TENABLE AND NOT ACCEPTED. PERUSAL OF TH E ORDERS OF THE LOWER AUTHORITIES CLEARLY SHOW THAT SUFFICIENT OPPORTUNITY OF HEARING WAS AFFORDED TO THE ASSESSEE. ANOTHER CONTENTION OF THE ASSESSEE THAT NOTICE WAS NOT PROPERLY SERVED ON THE ASSESSEE ALSO DOES NOT HOLD FEET AS THE A.R. OF THE ASSESSEE APPEARED BEFORE THE ASSESS ING OFFICER AS WELL AS CIT(A). 8. A PERUSAL OF THE COPY OF CERTIFICATE PLACED AT PAGE NO.39 OF THE PAPER BOOK SHOWS THAT M/S.TRUE VALUE H OMES (INDIA) PVT.LTD. HAS CONFIRMED THE RECEIPT OF ` 50.00 LAKHS FROM THE ASSESSEE TOWARDS THE ADVANCE OF FLAT. AS S UCH, THERE IS NO DOUBT ABOUT THE INVESTMENT MADE BY THE ASSESS EE. HOWEVER, THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF INVESTMENT. THEREFORE THE AUTHORITIES BEL OW HAVE APTLY COME TO THE CONCLUSION THAT THE INVESTMENT I S UNEXPLAINED INVESTMENT UNDER SECTION 69 AND THE ASS ESSING OFFICER HAS RIGHTLY MADE ADDITION IN THE ASSESSMENT RELEVANT TO THE ASSESSMENT YEAR 2003-04. THE CONTENTION OF T HE ASSESSEE THAT IT IS THE NAME OF INDIVIDUAL INVESTOR MENTIONED IN THE RECEIPT OF M/S.TRUE VALUE HOMES (INDIA) PVT. LTD. AND ITA NO.173/MDS/ 2012 8 NOT THE NAME OF THE FIRM IS NOT ACCEPTED. THE CERT IFICATE PLACED AT PAGE 39 OF THE PAPER BOOK CLEARLY MENTION S THE NAME OF THE ASSESSEE. EVEN DURING THE COURSE OF ARG UMENTS BEFORE THE TRIBUNAL, THE ASSESSEE HAS NOT BEEN ABLE TO PLACE ON RECORD ANY DOCUMENT TO SHOW THE SOURCE OF INVEST MENT EITHER BY THE ASSESSEE OR BY THE ALLEGED INDIVIDUAL S. IT WOULD BE RELEVANT TO MENTION HERE THAT IN THE G ROUNDS OF APPEAL THE ASSESSEE HAS TAKEN TEN GROUNDS. HOWEV ER, THE A.R. HAS SUBMITTED HIS ARGUMENTS ON GROUND NOS. 2 A ND 3 ONLY. THE OTHER GROUNDS ARE OFFSHOOT OF GROUND NO.3 . THIS FACT HAS BEEN ADMITTED BY THE A.R. OF THE ASSESSEE. 9. IN VIEW OF THE ABOVE, WE SEE NO INFIRMITY IN THE ORDER OF THE CIT(A) AND CONFIRM THE SAME AND DISMISS THE APP EAL OF THE ASSESSEE . 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, TH E 14 TH OF MAY, 2012 AT CHENNAI. SD/- SD/- ( N.S. SAINI ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 14 TH MAY, 2012. SOMU ITA NO.173/MDS/ 2012 9 COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .