DCIT, CHENNAI V. Shri TNR Gopal, CHENNAI

ITA 2188/CHNY/2008

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8326 (ITAT-CHENNAI)
• Duration Of Justice: 10 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 01-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDIPCITD R
• Assessee Lawyers: S SRIDHAR ERODE
• Section: 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & S HRI INTURI RAMA RAO , ACCOUNTANT MEMBER ./ I.T.A.NO.2188/CHNY/2008 & C.O. NO.137/CHNY/2009 / ASSESSMENT YEAR : 2003-04 DEPUTY COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-I, CHENNAI 600 034. VS. SHRI TNR GOPAL , NO.7,RAMACHANDRA IYER STREET, T.NAGAR,CHENNAI 600 017. [PAN AHVPG 8371 N ] ( / APPELLANT) ( /RESPONDENT / CROSS OBJECTOR ) !' # $ / APPELLANT BY : MR.SAILENDRA MAMIDI,PCIT,D.R %&!' # $ /RESPONDENT BY : MR.S.SRIDHAR,ADVOCATE,ERODE ' ( # ) / DATE OF HEARING : 02 - 0 1 - 201 9 *+ # ) / DATE OF PRONOUNCEMENT : 02 - 0 1 - 201 9 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VI, CHENNA I IN ITA NO. 15/06-07 DATED 21.07.2008 FOR ASSESSMENT YEAR 2003- 04 AND ITA NO.2188/CHNY/2008 :- 2 -: CORRESPONDINGLY, THE ASSESSEE FILED CROSS OBJECTION S AGAINST THE ORDER OF LD.CIT(A), INVOLVING IDENTICAL ISSUES, THEREFORE , THE APPEAL AND CROSS- OBJECTIONS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2. AT THE TIME OF HEARING, THE LD. PRINCIPAL CIT, D.R FILED AN ADJOURNMENT LETTER ON THE GROUND THAT THE SENIOR ST ANDING COUNCIL, WHO IS REPRESENTING THE MATTER, IS UNAVAILABLE. IT IS NOTICED THAT THE APPEAL HAS BEEN FILED ON 18.03.2009 AND SINCE THE M ATTER HAS BEEN POSTED NEARLY 49 TO 50 TIMES, ONLY ADJOURNMENT HAS BEEN SOUGHT. CONSEQUENTLY, THE ADJOURNMENT APPLICATION FILED BY THE REVENUE STANDS REJECTED AND THE APPEAL IS DISPOSED OF ON ME RITS. 3. MR.SAILENDRA MAMIDI, PRINCIPAL CIT, D.R REPRESENTED ON BEHALF OF THE REVENUE, AND MR.S.SRIDHAR, ADVOCATE REPRESENTED ON BEHALF THE OF THE ASSESSEE. 4. IT WAS SUBMITTED BY LD.A.R THAT ASSESSEE IS AN INDIVIDUAL. IT WAS A SUBMISSION THAT THE ASSESSEE HAD RECEIVED A SUM OF ` 70 LAKHS ON 01.08.2002 FROM SMT.S.GANGABAI THROUGH SHRI M.KA NAKARAJ. IT WAS AN ALLEGATION THAT THE ASSESSEE ALONG WITH SHRI M.K ANAKARAJ HAD DISHONESTLY FABRICATED DOCUMENTS AS IF ONE SMT.S.GA NGABAI WAS THE ITA NO.2188/CHNY/2008 :- 3 -: OWNER OF LAND IN SURVEY NOS.557/1(PART) AND 557/2( PART) AND IT HAD CAUSED THE APPROPRIATE AUTHORITY OF INCOME-TAX DUE TO PRE-EMPTIVE PURCHASE OF THE LAND AND HAD CAUSED PAYMENT OF ` 2.82 CRORES. IT WAS A SUBMISSION THAT THE ASSESSEE HAS BEEN DISCHARGED FROM ALL CHARGES AGAINST HIM. IT WAS A SUBMISSION THAT CONSEQUENTLY, THE RECEIPT OF ` 70 LAKHS, THE LD. ASSESSING OFFICER TREATED THE SUM AS UNEXPLAINED RECEIPT IN THE HANDS OF THE ASSESSEE. IT WAS A SUBMISSION THAT THE DEPARTMENT IN THE MEANTIME HAS ALSO FILED A SUIT BE FORE THE HONBLE MADRAS HIGH COURT FOR THE RECOVERY OF THE SAID AMOU NT OF ` 70 LAKHS FROM THE ASSESSEE AND THE SAME IS PENDING. IT WAS A SUBMISSION THAT CONSEQUENT TO THE ADDITION OF ` 70 LAKHS IN THE HANDS OF THE ASSESSEE, THE ASSESSEE HAD FILED AN APPEAL BEFORE THE LD.CIT( A), WHO HAD DELETED THE ADDITION WHEREIN HE HAS HELD AS FOLLOWS :- 5.2 ON MERITS, REGARDING TAXABILITY OF SUM OF RS 70 LAKHS, THE CASE OF THE APPELLANT IS WHAT WAS RECEIVED FROM BY THE APPELLANT IS PURE ADVANCE IN REGARD TO SALE OF LAND BY VALID EXE RCISE OF POWER OF ATTORNEY AND WHEREAS THE STAND OF THE DEPARTMENT TH AT IT IS RECOVERABLE FROM THE APPELLANT AND OTHERS IN TERMS OF CLAIM MADE BY THE DEPARTMENT BY FILING A CIVIL SUIT IN C.S. NO . 483 OF 2007 IN HIGH COURT OF JUDICATURE MADRAS. I AM OF THE CONSIDERED OPINION, THAT THE DEPARTMENT HAD CONSCIOUSLY FILED A CIVIL SUIT IN THE HONBLE HIGH COURT CLAIMING THE ENTIRETY OF THE SUM PAID TO KANAKARAJ FROM THE APPE LLANT AND OTHERS. LAW IS WELL SETTLED THAT ALL RECEIPTS ARE N OT INCOME. WHEN THE PAYMENT IS DISPUTED IN A COURT OF LAW, THE RECE IPT IN QUESTION ITA NO.2188/CHNY/2008 :- 4 -: PARTAKES THE CHARACTER OF DISPUTED SUM AND ATTAIN S THE INCOME CHARACTER ONLY WHEN THE ISSUE IS SETTLED BY THE HIG H COURT. IN THESE CIRCUMSTANCES IT IS DIFFICULT TO RESIST THE CONCLUS ION THAT THE SUM IN QUESTION WOULD NOT PARTAKES THE CHARACTER OF INCOME TILL THE ISSUE IS DECIDED BY THE COURT OF LAW. I, THEREFORE, HOLD THAT THE SUM OF RS.70/- LAKHS IS NOT AN INCOME RECEIPT AND IT REPRESENTS A LIABILITY TO PAY TO THE GOVERNMENT IN THE LIGHT OF CLAIM MADE BY THE DEPARTMENT AGAINST T HE APPELLANT AND OTHERS AND THEREFORE THE SAID SUM IS NOT ASSESS ABLE AS INCOME. HOWEVER THE ASSESSING OFFICER IS FREE TO TA KE APPROPRIATE STEPS WHEN THE HIGH COURT HOLDS THE SAID SUM DID NO T REPRESENT A LIABILITY ON THE PART OF THE APPELLANT BY TAKING RE COURSE TO PROCEEDINGS U/S 147 OF THE ACT. THE APPELLANT SUCCE EDS ON THIS GROUND. IT WAS A SUBMISSION THAT AGAINST THE SAID DELETION BY THE LD.CIT(A), THE REVENUE IS NOW IN APPEAL. IT WAS A SUBMISSION T HAT TILL THE FINALIZATION OF SUIT FILED BY THE REVENUE, THIS AMO UNT OF ` 70 LAKHS CANNOT BE TREATED AS INCOME OF ASSESSEE IN SO FAR A S THE LIABILITY TO PAY THE AMOUNT BACK TO THE GOVERNMENT STILL CONTINU ES. IT WAS A SUBMISSION THAT IN ANY CASE THE LD.CIT(A) HAS PROTE CTED THE INTEREST OF THE REVENUE BY GRANTING THE LD. ASSESSING OFFICE R THE FREEDOM TO TAKE APPROPRIATE STEPS WHEN THE HIGH COURT HOLDS TH E SAID SUM DID NOT REPRESENT A LIABILITY ON THE PART OF THE APPELL ANT BY TAKING RECOURSE TO PROCEEDINGS U/S 147 OF THE ACT. IT WAS A PRAYER THAT THE APPEAL OF REVENUE IS LIABLE TO BE DISMISSED AS THE LIBERTY IS AVAILABLE WITH THE LD. ITA NO.2188/CHNY/2008 :- 5 -: ASSESSING OFFICER TO INITIATE THE PROCEEDINGS AS AN D WHEN THE SAID AMOUNT BECOMES THE INCOME OF ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A P ERUSAL OF THE FINDING OF THE LD.CIT(A) IN PARA 5.2 EXTRACTED ABOVE CLEARLY SHOWS THAT ON ONE HAND, THE LD. ASSESSING OFFICER IS HOLD ING SUCH AMOUNT OF ` 70 LAKHS AS UNEXPLAINED AMOUNT OF THE ASSESSEE, ON THE OTHER HAND, THE REVENUE HAS FILED A CIVIL SUIT CASE BEFORE THE HONBLE MADRAS HIGH COURT FOR RETURN OF THE SAID AMOUNT. A PERUSAL OF T HE ORDER OF THE LD.CIT(A) SHOWS THAT HE HAS APPLIED HIS MIND, WHEN HE HAS TREATED THE SAID AMOUNT OF ` 70 LAKHS AS NOT THE INCOME RECEIPT OF THE ASSESSEE, AS SUCH AMOUNT REPRESENTS A LIABILITY TO PAY THE GOVERNMENT IN THE LIGHT OF CLAIM MADE BY THE DEPART MENT AGAINST THE APPELLANT AND OTHERS AND THEREFORE THE SAID SUM IS NOT ASSESSABLE AS INCOME. THIS BEING SO, WE FIND NO ERROR IN THE ORD ER OF THE CIT(APPEALS) , WHICH CALLS FOR ANY INTERFERENCE. CO NSEQUENTLY, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 6. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LEA RNED COUNSEL THAT THE ASSESSEE WISHES TO WITHDRAW THE CROSS OBJE CTIONS IN C.O NO.137/CHNY/2009. AFTER HEARING THE SUBMISSION OF LD.A.R , THE CROSS ITA NO.2188/CHNY/2008 :- 6 -: OBJECTIONS FILED BY THE ASSESSEE IS PERMITTED TO BE WITHDRAWN . 7. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 02 ND JANUARY, 2019, AT CHENNAI. SD/ - SD/ - ( , ) (INTURI RAMA RAO) ! ' /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) # ' / JUDICIAL MEMBER , ( / CHENNAI - / DATED: 02 ND JANUARY, 2019. K S SUNDARAM . # %)/0 1 0 ) / COPY TO: 1 . !' / APPELLANT 4. ' 2) / CIT 2. %&!' / RESPONDENT 5. 034 %)5 / DR 3. ' 2) () / CIT(A) 6. 48 9( / GF