J.Nagendran, Coimbatore V. DCIT, Coimbatore

ITA 1749/CHNY/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8956 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRIDHAR DORA IRS
• Keywords: Unexplained investment; Opportunity of cross examination
• Section: 143(3); 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO.1749/CHNY/2016 ! / ASSESSMENT YEAR : 2011-2012. SHRI. J. NAGENDRAN, NO.3, KALINGARAYAN STREET, RAMNAGAR, COIMBATORE 641 009. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE II, COIMBATORE [PAN ABEPN 1149A] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : NONE &' '# $ % /RESPONDENT BY : SHRI. SRIDHAR DORA, IRS, JCIT. ( ) $ * /DATE OF HEARING : 08-08-2019 +,! $ * /DATE OF PRONOUNCEMENT : 27-09-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2 , COIMBATORE (CIT(A) FOR SHORT) DATED 25.04.2016 FOR THE ASSE SSMENT YEAR (AY) 2011-2012. ITA NO. 1749/2016 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLD ING THE ADDITION OF RS.6 CRORES, ALLEGING ON-MONEY PAYMENT MADE, BY THE APPELLANT FOR THE PURCHASE OF PROPERTY BY HIM, ALONG WITH OTHERS, CONTRARY TO THE CONTENTS OF THE REGISTERED SALE DEED DATED 15TH NOV EMBER 2010, INCLUDING THE ACTUAL SALE CONSIDERATION DISCLOSED, IN THE ABSENCE OF ANY COGENT MATERIALS WITH THE AO, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. 2. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE ADDITION OF RS.6 CRORES CANNOT BE SUSTAINED ONLY ON THE BASIS O F SURROUNDING CIRCUMSTANCES, HUMAN PROBABILITIES AND, ON MERE SUS PICION, AS, HOWEVER STRONG IT MAY BE, SUSPICION ETC. CANNOT TAK E THE PLACE OF EVIDENCE ON RECORD IN THE FACTS AND CIRCUMSTANCES O F THE CASE, AS THE APPELLANT HAS TOTALLY REBUTTED THE ALLEGATION OF TH E AO THAT EXCESS PAYMENT WAS MADE BY HIM, IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE AND IN LAW. 3. THE LEARNED CIT(A), HAS GROSSLY ERRED IN REJECTI NG THE CATEGORICAL STATEMENT OF THE POWER OF ATTORNEY HOLDER, WHO HAD EXECUTED THE SALE DEED, AT THE TIME OF RECORDING STATEMENT U/S 131 OF THE INCOME TAX ACT, 1961, FROM HIM ON OATH ON 10.03.2014, THAT THE RE WAS NO PAYMENT OF ON-MONEY RECEIVED BY HIM OVER AND ABOVE THE CONSIDERATION STATED IN THE REGISTERED DOCUMENT FOR CONVEYANCE OF THE PROPERTY, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. 4. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE ONUS IS ON THE REVENUE TO PROVE, BEYOND ANY REASONABLE DOUBT WITH COGENT MATERIAL EVIDENCE, CONCLUSIVELY THAT THE APPELLANT HAD ACTUA LLY MADE INVESTMENT IN THE PURCHASE OF PROPERTY BY WAY OF ON -MONEY PAYMENT IN EXCESS OF THE SALE CONSIDERATION STATED IN THE S ALE DEED, WHICH IT HAS MISERABLY FAILED TO DO SO, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. 5. THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE A C HAS FAILED TO PROVE CONCLUSIVELY THAT THE APPELLANT HAS MADE ON-M ONEY PAYMENTS TOWARDS THE SALE CONSIDERATION TO THE SELLER, AND T HEREFORE THE ADDITION MADE IN THE ASSESSMENT, ON PRESUMPTIONS, SURMISES A ND CONJECTURES, WITHOUT DISCHARGING THE ONUS RESTING WITH THE REVEN UE, IS NOT SUSTAINABLE IN THE HANDS OF THE APPELLANT, IN THE F ACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW AND DELETED TH E ADDITION OF RS.6 CRORES MADE IN THE ASSESSMENT OF THE APPELLANT AS U NWARRANTED AND UNSUSTAINABLE, IN THE FACTS AND THE CIRCUMSTANCES O F THE CASE AND IN LAW. 6. THE LEARNED CIT(A) HAS GROSSLY ERRED IN MERELY R ELYING ON THE LOOSE SHEETS IMPOUNDED DURING THE SURVEY, AT THE PREMISES OF A THIRD PARTY, ITA NO. 1749/2016 :- 3 -: A STRANGER TO THE APPELLANT IN EVERY RESPECT, AND W ITHOUT DISPUTING THE FACT THAT THE APPELLANT WAS NOT AN INTERESTED PARTY TO THE UNDERSTANDING, IF ANY, REACHED BY THE INDIVIDUALS N AMED AS BENEFICIARIES IN THE UNSIGNED MOU SO IMPOUNDED, BES IDES RELYING ON THE TWO DECISIONS OF THE APEX COURT, REPORTED IN 29 1 ITR 278 AND 214 ITR 801, HAVING NO APPLICATION IN THE FACTS OF THE CASE OF THE APPELLANT, WITH A CLOSED MIND, PURELY ON HIS SUBJEC TIVE CONSIDERATIONS, CONFIRMING THE ADDITION OF RS.6 CRORES, TO THE INCO ME ADMITTED BY THE APPELLANT IN HIS RETURN OF INCOME. 7. FOR THESE AND OTHER ADDITIONAL GROUNDS OF APPEAL THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDER OF THE CO MMISSIONER OF INCOME TAX (APPEALS), IS OPPOSED TO LAW AND UNSUSTA INABLE IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE BE QUASHED AND THE CONSEQUENT DEMAND FOR INCOME TAX BE DELETED IN FULL . 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSIN ESS OF RUNNING HOTEL IN THE NAME OF M/S. VIJAY PARADISE. THE RETURN OF INCOME FOR THE AY 2011-12 WAS FILED ON 22.7.2011 DI SCLOSING TOTAL INCOME OF RS.1,69,18,690/-. AGAINST THE SAID RETUR N OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. COMMISSIONER O F INCOME TAX, CIRCLE-II, COIMBATORE VIDE ORDER DATED 11.03.2014 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) A T TOTAL INCOME OF RS.7,69,18,690/-. WHILE DOING SO, THE ASSESSING OFF ICER MADE ADDITION OF G6,00,00,000/- ON ACCOUNT OF PAYMENT OF ON MONEY OVER AND ABOVE THE CONSIDERATION STATED IN THE SALE DEED. FACTUAL BACKGROUND OF THE ISSUE IS AS UNDER:- ASSESSEE PURCHASED LAND MEASURING 57.87 CENTS LOCA TED AT SOWRIPALAYAM VILLAGE BEARING GS NO.278/1 AND 279/1 FROM SHRI. D. ITA NO. 1749/2016 :- 4 -: SRINIVASAN (POWER AGENT) FOR A REGISTERED VALUE OF G4,00,00,000/- VIDE SALE DEED NO.3950/2010, DATED 15.11.2010. DURING TH E COURSE OF SURVEY OPERATION CONDUCTED ON 27.01.2011 IN THE B USINESS PREMISES OF M/S. TEJAS, THE DEPARTMENT HAD COME TO KNOW THAT PAYMENT OF G6,00,00,000/- WAS PAID OVER AND ABOVE THE CONSIDER ATION STATED IN THE SALE DEED ON THE PURCHASE OF 57.87 CENTS OF LAN D. DURING THE COURSE OF SURVEY PROCEEDINGS, THE DEPARTMENT FOUND ONE MOU AND IMPOUNDED THE MOU ENTERED BETWEEN ASSESSEE ALONGWI TH ONE MR. D. SENTHILKUMAR. THE SAID SENTHILKUMAR HAD ALSO GAVE SWORN STATEMENT DATED 07.02.2011 CONFIRMING RECEIPT OF ON MONEY IN CONNECTION WITH THE SAID TRANSACTION. WHEN THE ASSESSEE WAS CONFRO NTED WITH THIS INFORMATION ON 15.02.2011, ASSESSEE HAD DENIED HAVI NG PAID ANY ON MONEY. HOWEVER, ASSESSING OFFICER BASED ON THE MO U AND STATEMENT OF SHRI. D. SENTHILKUMAR, WHO IS THE PARTNER OF M/S .TEJA CONCLUDED THAT THERE WAS PAYMENT OF ON MONEY OVER AND ABOVE THE CO NSIDERATION STATED IN THE SALE DEED. AS THE ASSESSEE FAILED TO EXPLAIN THE SOURCE FOR THE SUM, BROUGHT THE SAME TO TAX THE AMOUNT A S UNEXPLAINED INVESTMENTS. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE LD. CIT(A) AND CONTENDED THAT ALLEGATION MADE BY THE ASSESSING OFFICER IS FALSE AND THE PROPERTY HAS BEEN PURCHASED ONLY THROUGH PO A HOLDER OF THE ITA NO. 1749/2016 :- 5 -: SELLER NAMELY SHRI D. SENTHILKUMAR, ASSESSEE HAD NO DEALINGS WHATSOEVER WITH M/S. TEJAS AND THE ASSESSING OFFIC ER WITHOUT GRANTING AN OPPORTUNITY OF CROSS EXAMINATION OF M/S. TEJAS M ADE AN ADDITION. IT IS FURTHER CONTENDED THAT NO ADDITION CAN BE MAD E BASED ON UNSIGNED MOU. THE LD. CIT(A) ON CONSIDERATION OF THE CONTENTION OF THE MOU IMPOUNDED DURING THE COURSE OF SURVEY OF M /S. TEJAS AND STATEMENTS RECORDED FROM SHRI. D. SENTHILKUMAR AN D SHRI. D. SRINIVASAN CONCLUDED THAT IN VIEW OF THE CIRCUMSTAN TIAL EVIDENCE THAT THERE WAS PAYMENT OF ON MONEY OF G6,00,00,000/- C ONFIRMED THE ADDITION. 5. BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE AP PELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. WHEN THE APPEAL WAS CALLED FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSE E. 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HEARD THE DEPARTMENTAL REPRESENTATIVE AND PERUS ED THE MATERIAL ON RECORD. THE SOLE ISSUE INVOLVED IN THE PRESENT APPEAL RELATING TO THE ADDITION OF UNEXPLAINED INVESTMENTS FOR PAYMENT OF ON MONEY FOR PURCHASE OF PROPERTY AT SOWRIPALAYAM VILL AGE. ADMITTEDLY, SELLERS OF THE PROPERTY HAVE ADMITTED RECEIPT OF ON MONEY IN THEIR ITA NO. 1749/2016 :- 6 -: INDIVIDUAL HANDS. ON PERUSAL OF THE IMPUGNED ORDE R, IT IS CLEAR THAT LD. CIT(A) HAD CONSIDERED MOU AND THE STATEMENTS OF SHRI D SRINIVASAN, WHO WAS POA HOLDER OF THE PROPERTY AN D SHRI.D. SENTHILKUMAR. CONSIDERING THE PROBABILITY AND CIRCU MSTANTIAL EVIDENCE ON RECORD HE CATEGORICALLY HELD THAT THERE WAS P AYMENT OF ON MONEY AT THE TIME OF PURCHASE OF LAND. WE FIND THAT THE FINDINGS OF THE LD. CIT(A) IS BASED ON PROPER APPRECIATION OF MATERIAL S ON RECORD, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE STA NDS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS D ISMISSED. ORDER PRONOUNCED ON 27TH DAY OF SEPTEMBER, 2019, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED:27TH SEPTEMBER, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF