Smt. S.S.Manian, CHENNAI V. DCIT, Coimbatore

ITA 1834/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64620 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 14-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Tangible material; Difference of opinion; Change of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NO. 1834/MDS/2011 ASSESSMENT YEAR : 2005-06 SMT. S.S.MANIAN, 272, N.H.ROAD, NO.70, VYSIAL STREET, COIMBATORE 641 001. PAN ADJPM 0921E VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-III, COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. VIJAYAR AGHAVAN, ADVOCATE RESPONDENT BY : SHRI SHAJI P. JACOB , IRS ADDL. CIT DATE OF HEARING : 3 RD DECEMBER, 2012 DATE OF PRONOUNCEMENT : 3 RD DECEMBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2005-06. THE APPEAL IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS )-I, AT COIMBATORE DATED 28.9.2011 AND ARISES OUT OF THE ITA 1834/11 :- 2 -: ASSESSMENT COMPLETED UNDER SEC.143(3), READ WITH SE C.147 OF THE INCOME-TAX ACT, 1961. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL READ AS BELOW : 2. THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE REOPENING OF THE ASSESSMENT AS THE APPELLANT HAS FURNISHED ALL THE MATERIALS AND PARTICULARS FULLY AND TRULY WHILE COMPLETING THE ASSESSMENT U/S 143(3) ON 31.12.2010. 2.1. THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE ADDITION MADE IN THE REASSESSMENT HAS ARISEN ONLY DUE TO CHANGE OF OPINION OR IS A CASE OF REVIEW ON THE SAME SET OF FACTS AND NOT ON ACCOUNT OF CONCEALMENT OF ANY PARTICULARS BY THE APPELLANT; HENCE THE ORDER IS TO BE QUASHED AS BEING WITHOUT JURISDICTION. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER BRING ING TO TAX ` 4,39,63,490/- REGARDING THE AMOUNTS PAYABLE FOR PRIZE WINNING TICKETS SHOWN AS LIABILITY OF M/S MADANGI LOTTERY AGENCIES AND UP STATE LOTTERIES AS ITA 1834/11 :- 3 -: INCOME OF THE APPELLANT ON ACCOUNT OF CESSATION OF LIABILITY U/S 41(1)(A). 3.1 THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT WAS TO RECEIVE AMOUNTS FROM VARIOUS PARTIES TO WHOM THE SAID LOTTERY WERE DISTRIBUTED FOR SALE TO THE PUBLI C AT LARGE ON CREDIT BASIS AND AMOUNT RECEIVABLES FROM VARIOUS STOCKIEST AND PAYABLE FOR THE PRICE WINNING TICKET WHICH IS SHOWN AS A LIABILITY OF M/S MADANGI LOTTERY AGENCIES. 4. THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN NOT CONSIDERING THE ORDER OF THE ADDITIONAL COMMISSIONER OF INCOME TAX PASSED U/S 144A DATED 14.12.2007 FOR THE SAME ASSESSMENT YEAR. 3. WE HEARD SHRI R. VIJAYARAGHAVAN, THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE AND SHRI SHAJI P. JACOB, THE LEARNED COMMISSIONER OF INCOME-TAX APPEARING FO R THE REVENUE. 4. ON GOING THROUGH THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ASSESSING OFFICER IN THE ORIGINAL ASS ESSMENT ITA 1834/11 :- 4 -: COMPLETED UNDER SEC.143(3) HAS EXAMINED THE ISSUES IN DETAIL AND COME TO THE CONCLUSION AFTER EXAMINING A LL THE RELEVANT FACTS AND CIRCUMSTANCES RELATING TO THE CA SE. THE ASSESSMENT HAS BEEN REOPENED ON THE GROUND THAT CRE DIT BALANCE OF ` 4,53,21,840/- REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE WAS IN FACT EXISTED AND THE SAME SHOU LD BE TREATED AS INCOME. IT IS TO BE SEEN THAT WHILE COM PLETING THE EARLIER ASSESSMENT, THIS ISSUE WAS CONSIDERED NOT O NLY BY THE ASSESSING OFFICER BUT ALSO BY THE ADDITIONAL COMMIS SIONER OF INCOME-TAX WHILE ISSUING DIRECTIONS UNDER SEC.144A OF THE ACT. 5. AGAIN, IT IS TO BE SEEN THAT THE ASSESSEE HAD IN FACT OFFERED ` 15 LAKHS AS INCOME FROM SUCH ACCUMULATED CREDIT FOR THE IMPUGNED ASSESSMENT YEAR AND ON SIMILAR GRO UND HAS ALREADY OFFERED AN AMOUNT OF ` 74 LAKHS IN THE SUCCEEDING ASSESSMENT YEAR. THE ASSESSEE HAS ALREADY, THUS OF FERED ` 89 LAKHS OUT OF THE CREDIT BALANCE FOR THE CURRENT AND SUBSEQUENT ASSESSMENT YEARS. IT IS FURTHER TO BE S EEN THAT THE ASSESSEE HAS ALREADY RECONCILED THE RECEIVABLES AND PAYABLES REFLECTED IN THE BALANCE SHEET ON ACCOUNT OF ITA 1834/11 :- 5 -: UNCLAIMED LOTTERY WINNINGS. IN THESE CIRCUMSTANCES , WE FIND THAT AS HELD BY THE HONBLE SUPREME COURT THAT IN T HE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (320 ITR 561), THE RE WAS NO TANGIBLE MATERIAL FOR THE FORMATION OF THE BELIEF T HAT INCOME HAD ESCAPED ASSESSMENT IN THE PRESENT CASE. THE HO NBLE SUPREME COURT HAS MENTIONED THAT A FORMATION OF BEL IEF IS MANDATORY BEFORE ISSUING NOTICE UNDER SEC.148. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. USHA INTERN ATIONAL LTD. (348 ITR 485) HAS HELD THAT REASSESSMENT PROCE EDINGS WILL BE INVALID IN CASE AN ISSUE OR A QUERY IS RAIS ED AND ANSWERED BY THE ASSESSEE IN ORIGINAL ASSESSMENT PROCEEDINGS BUT THEREAFTER THE ASSESSING OFFICER DO ES NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER. THE COU RT FURTHER HELD THAT IN SUCH SITUATIONS IT SHOULD BE A CCEPTED THAT THE ISSUE WAS EXAMINED BUT THE ASSESSING OFFICER D ID NOT FIND ANY GROUND OR REASON TO MAKE ADDITION OR REJEC T THE STAND OF THE ASSESSEE. WE FIND THAT THE ABOVE PR INCIPLE LAID DOWN BY THE HONBLE DELHI HIGH COURT SQUARELY APPLI ES TO THE PRESENT CASE. THE HONBLE GUJARAT HIGH COURT IN TH E CASE OF CIT VS. NITIN S. GARG (71 DTR (GUJ) 73) HAS HELD TH AT MERELY BECAUSE THE LIABILITIES ARE OUTSTANDING FOR LAST MA NY YEARS, IT ITA 1834/11 :- 6 -: CANNOT BE INFERRED THAT THE SAID LIABILITIES HAVE S EIZED TO EXIST. AS FAR AS THE MERIT OF THE ISSUE RAISED IN THE PRES ENT APPEAL IS CONCERNED, THE ABOVE JUDGMENT IS SQUARELY APPLICABL E. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT T HE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE AD DITION OF ` 4,39,63,490/- AS UNCLAIMED CREDIT. THE SAID ADDIT ION IS ACCORDINGLY DELETED. 6. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 3 RD OF DECEMBER, 2012 AT CHENNAI. SD/- SD/- (V. DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 3 RD DECEMBER, 2012. MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.