A.Mohamed Nazar, Coimbatore V. ACIT Non Corporate Circle 2, Coimbatore

ITA 2042/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9729 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 26-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: N G SRIDHAR RAO TAX CONSULTANT

Judgement Text

, / SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A / SMC BENCH: CHENNAI ... , , ! | BEFORE SHRI N.R.S. GANESAN , JUDICIAL MEMBER ./ ITA NO.2042/CHNY/2018 $ $ /ASSESSMENT YEAR: 2008-09 SHRI A. MOHAMED NAZAR, 2A, KC JASMINE APARTMENT, BHARATHI PARK, 8 TH CROSS, SAIBABA COLONY, COIMBATORE-641 043. [PAN: AIBPM 3256 H] VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-2, INCOME TAX OFFICE, RACE COURSE, COIMBATORE-641 018. ( ( /APPELLANT) ( )*( /RESPONDENT) ( + / APPELLANT BY : MR.N.G.SRIDHAR RAO, TAX CONSULTANT )*( + /RESPONDENT BY : MR.B. SAGADEVAN, JCIT + /DATE OF HEARING : 22.11.2018 + / DATE OF PRONOUNCEMENT : 03.12.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, COIMBATORE, AND PERTAINS TO THE AY 2008-09. 2. SHRI N.G.SRIDHAR RAO, LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE RECEIVED A SUM OF RS.45,00,000/- FROM MR.NAREN RAJAN. IN FACT, THE ASSESSEE ADMITTED THAT THE RECEIPTS OF FERED AS LONG TERM ITA NO.2042/CHNY/2018 :- 2 -: CAPITAL GAINS IN THE RETURN OF INCOME AND ALSO PAID THE TAXES ACCORDINGLY. HOWEVER, THE AO TREATED THIS AMOUNT AS ADVANCE FOR PURCHASE OF MARBLES. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE I S IN THE BUSINESS OF TRADING IN MARBLES. IN THE EARLIER TWO OCCASIONS, THIS TRIBUNAL HAS REMITTED THE MATTER BACK TO THE FILE OF THE AO FOR RE-EXAMINATION AND ALSO SPECIFICALLY DIRECTED THE AO TO MAKE AVAILABLE MR.N AREN RAJAN FOR CROSS- EXAMINATION BY THE ASSESSEE. ACCORDING TO THE LD. REPRESENTATIVE FOR THE ASSESSEE, THE SAID MR.NAREN RAJAN EXPIRED. THEREFO RE, HE WAS NOT MADE AVAILABLE FOR CROSS-EXAMINATION. THE LD. REPRESENT ATIVE FURTHER SUBMITTED THAT THE ASSESSEE INITIALLY THOUGHT THAT THE AMOUNT WAS RECEIVED FOR VACATING A FLAT OCCUPIED BY THE ASSESSEE. THEREFOR E, IT WAS OFFERED AS CAPITAL GAIN. HOWEVER, SUBSEQUENTLY, THE ASSESSEE REALIZED THAT WHAT WAS RECEIVED ONLY AN ADVANCE, THEREFORE, IT WAS CLAIMED ACCORDINGLY. HENCE, THE LD.CIT(A) WOULD NOT BE JUSTIFIED IN CONFIRMING THE ORDER OF THE AO. 3. ON THE CONTRARY, THE LD.DR SUBMITTED THAT IN THE FIRST TWO ROUNDS OF LITIGATION, THIS TRIBUNAL HAS REMITTED THE MATTER B ACK TO THE FILE OF THE AO FOR RE-EXAMINATION MORE SPECIFICALLY FOR CROSS-EXAM INATION OF MR.NAREN RAJAN. NOW, MR.NAREN RAJAN IS NO MORE. THEREFORE, HE CANNOT BE EXAMINED. HOWEVER, THERE WAS A CONTRADICTORY STATE MENT MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. INITIALLY, THE ASSESSEE CLAIMED THAT WHAT WAS RECEIVED FOR VACATING THE FLAT OCCUPIED BY HIM. SUBSEQUENTLY, IT WAS CLAIMED THAT IT WAS AN ADVANCE FOR SALE OF MARB LES. IN VIEW OF THE CONTRADICTORY STATEMENT MADE BY THE ASSESSEE BEFORE THE AUTHORITIES ITA NO.2042/CHNY/2018 :- 3 -: BELOW, THE AO FOUND THAT THE ENTIRE RECEIPT OF RS.4 5,00,000/- IS INCOME OF THE ASSESSEE. ACCORDINGLY, THE SAME IS ASSESSED AS INCOME FROM OTHER SOURCES. THEREFORE, THE LD.CIT(A) CONFIRMED THE A DDITION MADE BY THE AO. 4. HAVING HEARD THE LD. REPRESENTATIVE ON EITHER SI DE, I PERUSED THE MATERIALS PLACED ON RECORD. 5. ADMITTEDLY, THIS IS THE THIRD ROUND OF LITIGATIO N BEFORE THIS TRIBUNAL. IN THE TWO ROUNDS OF LITIGATION, THIS TRIBUNAL HAS REMITTED THE MATTER BACK TO THE FILE OF THE AO FOR RE-EXAMINATION, MORE SPEC IFICALLY TO EXAMINE MR.NAREN RAJAN. NOW, MR.NAREN RAJAN IS NO MORE. T HEREFORE, THE QUESTION OF EXAMINATION AND CROSS-EXAMINATION OF MR . NAREN RAJAN, MAY NOT ARISE FOR CONSIDERATION. THE AO FOUND THAT THE ASSESSEE MADE CONTRADICTORY STATEMENT. INITIALLY, THE ASSESSEE C LAIMED THAT WHAT WAS RECEIVED BY HIM IS ONLY A CAPITAL GAIN FOR TERMINAT ION OF LEASE AND VACATING THE PREMISES. SUBSEQUENTLY, THE ASSESSEE CLAIMED B EFORE THE AO THAT IT WAS FOR SALE OF MARBLES AND WHAT WAS RECEIVED IS AN ADVANCE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND M R.NAREN RAJAN IS ALSO NO MORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE, THE FIRST STATEMENT MADE BY THE ASSESSEE H AS TO BE TAKEN AS TRUE. IN OTHER WORDS, THE CLAIM OF THE ASSESSEE THAT WHAT WAS RECEIVED IS FOR VACATING THE PREMISES APPEARS TO BE TRUE. THEREFOR E, THE AMOUNT RECEIVED FOR TERMINATION OF LEASE AND VACATING THE PREMISES IS A CAPITAL GAIN AND ITA NO.2042/CHNY/2018 :- 4 -: THE ASSESSEE ADMITTEDLY OFFERED THE SAME AS A CAPIT AL GAIN AND PAID THE TAXES. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION FOR THE AUTHORITIES BELOW TO ASSESS THE ENTIRE RECEIPT OF RS.45,00,000/- AS INCOME FROM OTHER SOU RCES. EVEN IF UNDERTAKE THE RECEIPT AS ADVANCE FOR SALE OF THE MA RBLES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT UNLESS AND UNTIL THE SALE OF MARBLES IS CONCLUDED BY DELIVER OF THE MARBLES, THE ADVANCE CA NNOT BE TREATED AS INCOME OF THE ASSESSEE DURING THE YEAR UNDER CONSID ERATION. MOREOVER, WHAT WAS TO BE ASSESSED AS INCOME IS ONLY THE PROFI T ELEMENT EMBEDDED IN IT AND NOT THE ENTIRE SALE CONSIDERATION. IN THESE FACTS AND CIRCUMSTANCES, ASSESSING THE ENTIRE AMOUNT OF RS.45,00,000/- AS IN COME FROM OTHER SOURCES IS NOT CORRECT. ACCORDINGLY, THE ORDER OF BOTH THE AUTHORITIES BELOW ARE SET-ASIDE AND ADDITION OF RS.45,00,000/- IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON THE 3 RD DAY OF DECEMBER, 2018, IN CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED: DECEMBER 03, 2018. TLN + )34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 ) /DR 3. 6 ( ) /CIT(A) 6. $ /GF