R Ganesan, Namakkal V. ITO, Ward 1(1), Namakkal

ITA 208/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0337 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1999-2000
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARI GOVIND
• Assessee Lawyers: N V BALAJI
• Keywords: Set aside
• Section: 133A

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.208/CHNY/2019 ' #$' / ASSESSMENT YEAR : 1999-2000 SHRI R. GANESAN, S/O LATE K.V. RAMAKRISHNAN, 66-A, ARTHANARI SCHOOL STREET, NAMAKKAL. PAN : ADEPG 3823 G V. THE INCOME TAX OFFICER, WARD 1(1), NAMAKKAL. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI N.V. BALAJI, ADVOCATE ()&' * + / RESPONDENT BY : SHRI K. HARI GOVIND, JCIT , # * -. / DATE OF HEARING : 11.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 03.09.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DATED 15.11.2018 AND PERTAINS TO ASSESSMENT YEAR 1999-2000. 2. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THIS IS SECOND ROUND OF LITIGATION BEFORE THIS TRIB UNAL. THE FIRST ISSUE ARISES FOR CONSIDERATION IS COST OF CONSTRUCTION. ACCORDING TO THE LD. 2 I.T.A. NO.208/CHNY/19 COUNSEL, THERE WAS A SURVEY UNDER SECTION 133A OF T HE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). DURING THE COURSE OF SU RVEY OPERATION, THE ASSESSEE ADMITTED THAT HE SPENT 7,50,000/- TOWARDS COST OF CONSTRUCTION FOR THE ASSESSMENT YEAR 1999-2000. HOWEVER, IN THE RETURN OF INCOME, HE RESTRICTED THE INVESTMENT ONLY TO 4,50,000/-. ACCORDING TO THE LD. COUNSEL, THE TOTAL COST OF THE INVESTMENT IS ONLY 18,30,430/-, OUT OF WHICH, 4,50,000/- WAS SPENT DURING THE YEAR UNDER CONSIDER ATION AND THE BALANCE AMOUNT WAS SPENT IN THE ASSESSMENT YEAR 2000-01. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS DISC LOSED THE BALANCE AMOUNT IN THE SUBSEQUENT ASSESSMENT YEAR. IF 7,50,000/- IS TAKEN DURING THE YEAR UNDER CONSIDERATION, THAT WOULD AMO UNT TO DOUBLE ADDITION. THE LD.COUNSEL FURTHER SUBMITTED THAT TH ERE IS NO MATERIAL OTHER THAN THE STATEMENT RECORDED DURING THE COURSE OF SU RVEY OPERATION. 3. ON THE CONTRARY, SHRI K. HARI GOVIND, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF EXAMINATION, THE ASSESSEE ADMITTED THAT HE INVESTED 7,50,000/- IN THE CONSTRUCTION OF BUILDING. THE DEPARTMENTAL VALUATION OFFICER ESTIM ATED THE TOTAL COST OF CONSTRUCTION AT 20 LAKHS. SINCE THE ASSESSEE HAS DISCLOSED ONLY 4,50,000/- UPTO 31.03.2009, THE BALANCE OF 3 LAKHS WAS ADDED TO THE TOTAL INCOME. 3 I.T.A. NO.208/CHNY/19 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE TOTAL COST OF CONSTRUCTION IN THE ASSESSMENT YEARS 1999-2000 AND 2000-01 WAS ESTIMATED BY THE DEPARTMENTAL VALUATION OFFICER AT 20 LAKHS. HOWEVER, THE ASSESSEE STATES AS 18,30,430/-. THERE WAS A DIFFERENCE OF ABOUT 1,70,000/-. ESTIMATION WOULD VARY, DEPENDING UPON PERSON TO PERSON. MOREOVER, ESTIMATION MAY NOT ALWAYS REFLECT THE ACT UAL COST OF INVESTMENT. THERE MAY BE A LITTLE DIFFERENCE. IN OTHER WORDS, ESTIMATION ALWAYS REQUIRES LITTLE BIT OF GUESS WORK AND ASSUMP TION. THEREFORE, AFTER TAKING INTO CONSIDERATION ALL THE FACTORS, THE TOTA L COST OF CONSTRUCTION FOR BOTH THE ASSESSMENT YEARS, I.E. 1999-2000 AND 2000- 01CAN BE ADOPTED AT 18,30,430/-. 5. THE ASSESSEE CLAIMS THAT AN AMOUNT OF 4,50,000/- WAS INVESTED DURING THE YEAR UNDER CONSIDERATION AND THE BALANCE AMOUNT WAS INVESTED IN THE NEXT ASSESSMENT YEAR. THE DEPARTME NT CLAIMS THAT THE ASSESSEE ADMITTED INVESTMENT OF 7,50,000/- DURING THE YEAR UNDER CONSIDERATION. IT IS NOT IN DISPUTE THAT THE ASSES SEE, APART FROM 4,50,000/- DISCLOSED 7,50,000/- DURING THE YEAR UNDER CONSIDERATION AND DISCLOSED THE BALANCE AMOUNT IN THE SUBSEQUENT ASSESSMENT YEAR. THEREFORE, AS RIGHTLY SUBMITTED BY THE LD.COUNSEL F OR THE ASSESSEE, IF 7,50,000/- IS TAKEN DURING THE YEAR UNDER CONSIDERA TION THAT WOULD AMOUNT TO ADDITION OF 3 LAKHS TWICE. IF THE INVESTMENT OF 7,50,000/- 4 I.T.A. NO.208/CHNY/19 WAS TAKEN INTO CONSIDERATION DURING THE YEAR UNDER CONSIDERATION, THEN THE INVESTMENT IN THE SUBSEQUENT ASSESSMENT YEAR HA S TO BE REDUCED TO THAT EXTENT. THE ASSESSMENT YEAR UNDER CONSIDERATI ON IS 1999-2000, ALMOST 19 YEARS PASSED, THEREFORE, REMITTING THE IS SUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION MAY NOT B E JUSTIFIED. SINCE THE ASSESSEE HAS ALREADY DISCLOSED 18,30,430/- IN THE SUBSEQUENT ASSESSMENT YEAR, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDITION TO THE EXTENT OF 3 LAKHS DURING THE YEAR UNDER CONSIDERATION. HENCE, THIS TRIBUNAL IS UNABLE TO U PHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION OF 3 LAKHS IS DELETED. 6. THE NEXT GROUND ARISES FOR CONSIDERATION IS ADDI TION OF 2 LAKHS SAID TO BE RECEIVED BY THE ASSESSEE FROM HIS WIFE S MT. G. ANURADHA. 7. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSEE HAS RECEIVED 2 LAKHS FROM HIS WIFE. HOWEVER, THE ASSESSING OFFICER DISBELIEVED THE CLAIM OF RECEIPT OF 2 LAKHS FROM HIS WIFE AND MADE ADDITION. 8. I HEARD SHRI K. HARI GOVIND, THE LD. DEPARTMENTA L REPRESENTATIVE ALSO. IT IS NOT THE CASE OF THE REVENUE THAT THE A SSESSEE AND HIS WIFE ARE LIVING TOGETHER. EVEN ASSUMING THAT THE ASSESSEES WIFE HAS NO INDEPENDENT SOURCE OF INCOME, THE HABIT OF SAVING I N THE FAMILY FROM THE 5 I.T.A. NO.208/CHNY/19 MONEY RECEIVED FROM THE RESPECTIVE HUSBAND IS PREVA LENT IN THIS PART OF COUNTRY. MOREOVER, IT IS A USUAL PRACTICE THAT IN EVERY HOUSEHOLD THE LADIES USE TO TAKE 200/- OR 300/- FROM THEIR RESPECTIVE HUSBAND FOR HOUSEHOLD EXPENDITURE. IT IS ALSO A USUAL PRACTICE AMONG THE LADIES TO SAVE MONEY WHEN THEY GET IT FROM THEIR RESPECTIVE H USBAND. THIS SOCIAL PHENOMENA PREVAILING IN THIS PART OF COUNTRY CANNOT BE IGNORED BY THE JUDICIAL AUTHORITIES. THEREFORE, THE ASSESSEES CL AIM THAT HE RECEIVED 2 LAKHS FROM HIS WIFE HAS TO BE CONSIDERED IN THIS AS PECT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEES WIFE WOULD HAVE SAVED 2 LAKHS FROM THE MONEY RECEIVED FOR HER HUSBAND FOR H OUSEHOLD EXPENDITURE APART FROM THE REASONS STATED BY HER BE FORE THE ASSESSING OFFICER LIKE INCOME FROM TUITION AND MONEY LENDING BUSINESS. IN VIEW OF THESE FACTUAL ASPECTS PREVALENT IN THIS PART OF COU NTRY, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET AS IDE AND THE ADDITION OF 2 LAKHS IS DELETED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 3 RD SEPTEMBER, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 3 RD SEPTEMBER, 2019 6 I.T.A. NO.208/CHNY/19 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A), SALEM 4. 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