D.Ramachandran, Coimbatore V. ACIT, Coimbatore

ITA 2122/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86351 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMOD NANGIA
• Assessee Lawyers: S RAMACHANDRAN
• Section: 143(3); 133A; 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO. 2122/MDS/2014 ( / ASSESSMENT YEAR: 2007-08) MR. D.RAMACHANDRAN, 95, SESHA NILAYAM RACE COURSE, COIMBATORE-641 018. VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-III, RACE COURSE, COIMBATORE-641 018. PAN: AARPR1786K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.RAMACHANDRAN, C.A /RESPONDENT BY : MR. PRAMOD NANGIA, CIT DR /DATE OF HEARING : 24 TH FEBRUARY, 2015 /DATE OF PRONOUNCEMENT : 18 TH MARCH, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBAT ORE DATED 19.06.2014 FOR THE ASSESSMENT YEAR 2007-08. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPE AL, CRUX OF THE ISSUE IS THAT COMMISSIONER OF INCOME TAX (AP PEALS) ERRED IN CONFIRMING THE ADDITION OF ` 24,00,000/- TOWARDS ALLEGED ADDITIONAL SALES CONSIDERATION RECEIVED ON SALE OF VACANT LAND WHEN THERE WAS NO INCRIMINATING DOCUME NTS SEIZED FROM THE PREMISES OF THE ASSESSEE. 2 ITA NO.2122/MDS/2014 2. BRIEF FACTS ARE THAT ASSESSEE FILED HIS RETURN O F INCOME FOR THE ASSESSMENT YEAR 2007-08 DECLARING INCOME O F ` 85,18,070/- ON 27.9.2007. SUBSEQUENTLY,THERE WAS A SEARCH UNDER SECTION 132 OF THE ACT IN THE PREMISES OF TH E ASSESSEE AND ALSO A SURVEY UNDER SECTION 133A OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE. NOTICE UNDER SEC TION 153A WAS ISSUED ON 19.03.2012 AND IN RESPONSE TO TH E SAID NOTICE ASSESSEE FILED A COPY OF THE RETURN ALREADY FILED ON 9.10.2007. SUBSEQUENTLY, ASSESSEE FILED REVISED RET URN DECLARING INCOME OF ` 1,24,28,860/- WHICH INCLUDED INCOME OF ` 41,00,000/- OFFERED IN THE COURSE OF SEARCH. THE AS SESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTI ON 153A OF THE ACT ON 28.3.2013 DETERMINING THE TOTAL INCO ME OF THE ASSESSEE AT ` 1,48,43,788/- . THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT COMPUTED CAPITAL GAINS AT ` 1,51,26,500/- AS AGAINST ` 1,27,26,500/- REPORTED BY THE ASSESSEE ON THE GROUND THAT ASSESSEE HAS NOT CONSID ERED CASH OF ` 24,00,000/- RECEIVED FROM THE PURCHASER DR. K.C.RAMASWAMY. THIS ADDITION APPEARS TO HAVE BEEN M ADE BASED ON A LETTER SEIZED FROM THE PREMISES OF DR. K.C.RAMASWAMY, WHICH WAS WRITTEN TO ONE MR. 3 ITA NO.2122/MDS/2014 K.BALASUBRAMANIAN. THE CONTENTION OF THE ASSESSEE W AS THAT HE HAS NOT RECEIVED CASH OF ` 24,00,000/- OTHER THAN CASH OF ` 41,00,000/- WHICH WAS ALREADY OFFERED FOR WHICH RE CEIPT WAS ALSO GIVEN BY THE PURCHASER. ON APPEAL, COMMISSIONE R OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION OF ` 24,00,000/- MADE BY THE ASSESSING OFFICER IN COMPUTING CAPITAL GAINS STATING THAT THE LETTER CLEARLY SHOWS THAT CASH OF ` 24,00,000/- WAS PAID TO THE ASSESSEE. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT THERE WAS NO INCRIMINATING MATERIAL WHATSOEVER SEIZED BY THE DEP ARTMENT FROM ASSESSEE PREMISES TO SHOW THAT ASSESSEE HAS RECEIVED ` 24,00,000/- FROM THE PURCHASER OF THE LAND DR. K.C.RAMASWAMY OTHER THAN CASH OF ` 41,00,000/- ALREADY REPORTED BY THE ASSESSEE. COUNSEL FOR THE ASSESSEE SUBMITS THAT THERE IS NO JUSTIFICATION IN MAKING ADDITION B ASED ON A LETTER ISSUED BY PURCHASER TO THE ARBITRATOR MR. K.BALASUBRAMANIAN. THERE IS NO OTHER EVIDENCE OR INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARC H EXCEPT THE LETTER AND IN SUCH CIRCUMSTANCES, THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE WHEN THE ASSESSEE HAS NOT RECEIVED THIS AMOUNT OF ` 24,00,000/-. 4 ITA NO.2122/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDERS OF LOWER AUTHORITIES IN TREATING ` 24,00,000/- AS INCOME OF THE ASSESSEE. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE LETTER PRODUCED BEFORE US. DURING THE ASSE SSMENT YEAR, ASSESSEE SOLD 50 CENTS OF LAND TO DR. K.C.RA MASWAMY AS THE LAND WAS ENCROACHED BY HUTMENT DWELLERS. THE ASSESSEE APPEARS TO HAVE TAKEN CASH OF ` 41,00,000/- FOR PAYING COMPENSATION OF HUTMENT DWELLERS FOR VACATIN G THE LAND. THE ASSESSEE ALSO STATED THAT HE HAS RECEIVED ` 50,00,000/- ON VARIOUS DATES BY WAY OF CHEQUES AN D ` 120 LAKHS BY WAY OF DEMAND DRAFT AT THE TIME OF REGIS TRATION. THE ASSESSEE CONTENDS THAT HE HAS NOT RECEIVED ` 24,00,000/- WHICH WAS MENTIONED BY DR. K.C.RAMASWA MY IN A LETTER WRITTEN TO MR. K.BALASUBRAMANIAN. IT IS A FACT THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND IN THE PREMISES OF THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (AP PEALS) ALSO IN HIS ORDER HAS GIVEN A FINDING THAT NO INCRI MINATING DOCUMENT WAS SEIZED FROM THE PREMISES OF THE ASSESS EE TOWARDS THE SAID SALE TRANSACTION OR ANY OTHER SUBS TANCE TO 5 ITA NO.2122/MDS/2014 MAKE ADDITION. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION BASED ON THE LETTE R OF THE PURCHASER WRITTEN TO MR. K.BALASUBRAMANIAN, WHEREI N DETAILS OF PAYMENTS WERE RECORDED. AT THE BOTTOM OF THE SAI D LETTER, AFTER SIGNATURE OF DR. K.C.RAMASWAMY IT WAS MENTION ED IN HANDWRITING THAT ON 19.9.2006 ` 24,00,000/- CASH WAS PAID. BASED ON THIS LETTER, COMMISSIONER OF INCOME TAX (A PPEALS) SUSTAINED THE ADDITION. ON GOING THROUGH THE SAID LETTER, WE FIND THAT FIRST OF ALL THE LETTER WAS WRITTEN BY T HE PURCHASER TO A THIRD PARTY AND THE LETTER DATED 18.9.2006 AND IT W AS ALSO SINGED ON 18.9.2006 BY DR. K.C.RAMASWAMY AND AT THE BOTTOM OF THE LETTER IN HANDWRITING IT WAS MENTIONE D THAT ON 19.9.2006 CASH OF ` 24,00,000/- WAS PAID. IT WAS NOT MENTIONED AS TO WHOM THE CASH WAS PAID. ON READING THE LETTER, WE FIND THAT THERE WAS A DISPUTE BETWEEN TH E SELLER AND PURCHASER BECAUSE OF DELAY IN PAYMENT BY THE PURCHA SER TO THE SELLER AND THE EXTENT OF THE LAND. WHEN A DISPU TE IS PENDING, IT IS SUSPICIOUS THAT WHETHER THE PURCHASE R REALLY PAID THE AMOUNT TO THE ASSESSEE. THERE IS NO CORROB ORATIVE EVIDENCE TO SHOW THAT THE AMOUNT WAS ACTUALLY PAID TO THE ASSESSEE. IT IS ALSO SIGNIFICANT TO NOTE THAT NOTI NG ON THE LETTER 6 ITA NO.2122/MDS/2014 THAT CASH WAS PAID ON 19.9.2006 WHICH WAS THE VERY NEXT DATE OF LETTER WRITTEN BY THE PURCHASER DR. K.C.RAM ASWAMY ON 18.9.2006. IN THE ABSENCE OF ANY CORROBORATIVE E VIDENCE, ASSESSEE CANNOT BE SAID TO HAVE RECEIVED ` 24,00,000/- BASED ON THIS LETTER ALONE WHICH WAS WRITTEN TO A THIRD PARTY BY THE PURCHASER DR. K.C.RAMASWAMY. IN SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT TH E ASSESSING OFFICER TO EXCLUDE ` 24,00,000/- WHILE COMPUTING CAPITAL GAINS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DAY OF MARCH, 2015 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 18 TH MARCH, 2015 SOMU 12 32 / COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .