Shri A.Akbar, CHENNAI V. ITO, Vellore

ITA 2138/CHNY/2010

• Counselvise Citation: 213821714 RSA 2010
• Duration Of Justice: 4 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 12-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 20-12-2010
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.2138/MDS/2010 / ASSESSMENT YEAR : 2007-08 SHRI A AKBAR PROP. AKBAR TEXTILES NO.5, VOC STREET SHIVA COMPLEX, ARNI TV MALAI DIST VS. THE INCOME TAX OF FICER WARD I(3) VELLORE [PAN AIEPA 0653 R ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : DR B. NISCHAL, JCIT / DATE OF HEARING : 12 - 10 - 2015 ! / DATE OF PRONOUNCEMENT : 28 - 10 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IX, CHENNA I, DATED 1.9.2010 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI S. SRIDHAR, LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDITION OF ` 22,24,055/- BEING VARIOUS DEPOSITS IN THE ACCOUNT MAINTAINED BY THE ASSESSEE IN ICICI ITA NO.2138/10 :- 2 -: BANK, VELLORE BRANCH. ACCORDING TO THE LD. COUNSEL , THE ASSESSEE HAD A CURRENT ACCOUNT WITH ICICI BANK, VELLORE BRANCH. ACCORDING TO THE LD. COUNSEL, AS PER INSTRUCTION OF THE ASSESSEES COUSIN BROTHER SHRI MUBARAK, THE CURRENT ACCOUNT WAS OPENED IN THE NAME OF THE ASSESSEE IN ICICI BANK. THE MONEY FOUND CREDITED I N THE ABOVE ACCOUNT WAS DEPOSITED BY VARIOUS PERSONS ALL OVER I NDIA ON THE INSTRUCTION OF THE ASSESSEES COUSIN BROTHER SHRI MUBARAK. ACCORDING TO THE LD. COUNSEL, THE MONEY DEPOSITED IN ICICI BA NK DOES NOT BELONG TO THE ASSESSEE AT ALL. ON THE INSTRUCTION OF SHR I MUBARAK, THE MONEY DEPOSITED IN THE ACCOUNT WAS WITHDRAWN BY THE ASSE SSEE AND THE SAME WAS HANDED OVER TO SHRI MAHABOOB SAHIB, FATHER OF SHRI MUBARAK. THE LD. COUNSEL CLARIFIED THAT SHRI MUBAR AK WAS RESIDING IN SOUTH AFRICA. 3. REFERRING TO COPY OF THE ORDER DATED 15.4.2008 PASS ED BY THE DY. DIRECTOR, ENFORCEMENT DIRECTORATE, THE LD. COUNSEL SUBMITTED THAT THE ENFORCEMENT DIRECTORATE FOUND THAT THE AS SESSEE RECEIVED VARIOUS AMOUNTS THROUGH HIS BANK ACCOUNT AS PER INS TRUCTION OF SHRI MUBARAK IN SOUTH AFRICA AND HANDED OVER THE SAME AF TER WITHDRAWAL TO SHRI MUBARAKS FATHER IN INDIA. FROM THE FINDING R ECORDED BY THE ADJUDICATING AUTHORITY UNDER THE FOREIGN EXCHANGE M ANAGEMENT ACT, IT IS OBVIOUS THAT THE MONEY DOES NOT BELONG TO THE A SSESSEE AT ALL. THE MONEY WAS DEPOSITED AS PER THE INSTRUCTION OF SHRI MUBARAK OF SOUTH ITA NO.2138/10 :- 3 -: AFRICA, THE SAME WAS WITHDRAWN AND HANDED OVER TO S HRI MUBARAKS FATHER IN INDIA. IN VIEW OF THIS SPECIFIC FINDING OF THE ADJUDICATING AUTHORITY UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT , ACCORDING TO THE LD. COUNSEL, THERE CANNOT BE ANY ADDITION IN TH E HANDS OF THE PRESENT ASSESSEE. THIS ORDER OF THE ADJUDICATING AUTHORITY UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT WAS NOT CONSIDERED BY THE AUTHORITIES BELOW. 4. ON THE CONTRARY, DR. B. NISCHAL, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ORDER PASSED BY T HE ADJUDICATING AUTHORITY UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT IS ONLY WITH REFERENCE TO VIOLATION OF THE PROVISIONS OF FOREIGN EXCHANGE MANAGEMENT ACT. THE ADJUDICATING AUTHORITY UNDER T HE FOREIGN EXCHANGE MANAGEMENT ACT FOUND THAT SHRI A AKBAR, TH E PRESENT ASSESSEE HAS CONTRAVENED THE PROVISIONS OF SEC.3(C) OF FOREIGN EXCHANGE MANAGEMENT ACT, THEREFORE, A PENALTY OF ` 4 LAKHS WAS LEVIED. NO FINDING WAS GIVEN BY THE ADJUDICATING A UTHORITY THAT THE MONEY DOES NOT BELONG TO THE ASSESSEE AT ALL. ACC ORDING TO THE LD. DR, THE FACT REMAINS THAT THE MONEY WAS DEPOSITED IN THE ACCOUNT OF THE ASSESSEE AND THE ASSESSEE HAS WITHDRAWN THE S AME. THOUGH THE ASSESSEE CLAIMS THAT THE MONEY WITHDRAWN FROM THE A BOVESAID ACCOUNT WAS HANDED OVER TO SHRI MUBARAKS FATHER, THERE IS NO MATERIAL AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE H AS IN FACT HANDED ITA NO.2138/10 :- 4 -: OVER THE MONEY TO THE SHRI MUBARAKS FATHER. THERE FORE, ACCORDING TO THE LD. DR, THE CIT(A) HAS RIGHTLY CONFIRMED THE AD DITION MADE BY THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY, THERE ARE SEVERAL DEPOSITS IN THE CURRENT ACCOUNT MAINTAINED BY THE ASSESSEE WITH ICICI BANK, VELLORE. THE CLAIM OF THE ASSESS EE APPEARS TO BE THAT THE BANK ACCOUNT ITSELF WAS OPENED ON THE INST RUCTION OF SHRI MUBARAK AND THE MONEY WAS DEPOSITED BY VARIOUS PERS ONS ALL OVER INDIA. SHRI MUBARAK APPEARS TO BE IN SOUTH AFRICA. THE MONEY WAS DEPOSITED IN INDIA AT VARIOUS PLACES. IT IS ALSO A FACT THAT THE ASSESSEE WITHDRAWN THE MONEY. THE ASSESSEE NOW CLAIMS THAT THE MONEY WITHDRAWN FROM THE BANK ACCOUNT WAS HANDED OVER TO MUBARAKS FATHER. THE FACT REMAINS THAT THE AUTHORITIES BELO W HAD NO OCCASION TO CONSIDER THE ORDER PASSED BY THE ADJUDICATING AUTHO RITY UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT. EVEN THOUGH INCOM E-TAX ACT, 1961 BEING A SPECIAL ENACTMENT, THE ASSESSING OFFIC ER HAS TO EXAMINE ALL THE FACTS AND MATERIAL INDEPENDENTLY INCLUDING THE ORDER PASSED BY THE ADJUDICATING AUTHORITY. IN OTHER WORDS, THE OR DER PASSED BY THE ADJUDICATING AUTHORITY UNDER THE FOREIGN EXCHANGE M ANAGEMENT ACT IS ALSO ONE OF THE FACTOR TO BE TAKEN INTO CONSIDERATI ON WHILE PASSING THE ASSESSMENT ORDER UNDER THE INCOME-TAX ACT. SINCE T HE AUTHORITIES ITA NO.2138/10 :- 5 -: BELOW HAD NO OCCASION TO EXAMINE THE ORDER PASSED B Y THE ADJUDICATING AUTHORITY UNDER THE FOREIGN EXCHANGE M ANAGEMENT ACT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY , THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSU E IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE MATERIAL AVAIL ABLE ON RECORD AND ALSO THE ORDER PASSED BY THE DY. DIRECTOR, DIRECTORATE O F ENFORCEMENT UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT AND THERE AFTER DECIDE THE SAME INDEPENDENTLY IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 28 TH OCTOBER, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF