Anubama Baskar, CHENNAI V. JCIT, CHENNAI

ITA 2221/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1060 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 11-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S VENUGOPALAN
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN,VICE-PRESID ENT AND SHRI VIKAS AWASTHY, JUDICIAL MEM BER ITA NO.2221/MDS/2012 (ASSESSMENT YEAR: 2009-10) MRS. ANUBAMA BASKAR 91-92, KODAMBAKKAM HIGH ROAD, NUNGAMBAKKAM, CHENNAI-600 034. PAN: AFVPA6039H VS. JOINT COMMISSIONER OF INCOME TAX, BUSINESS RANGE III, CHENNAI-600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. S.VENUGOPALAN, CA RESPONDENT BY : MR. SHAJI P.JACOB, ADDL. CIT DATE OF HEARING : 11 TH MARCH, 2013 DATE OF PRONOUNCEMENT : 11 TH MARCH, 2013 O R D E R PER VIKAS AWASTHY, JM: THE ASSESSEE HAS FILED APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX, CHENNAI VI DATED 14.11. 2012 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 196 1. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE. FOR THE ASSESSMENT YEAR 2009-10 THE ASSESS EE HAD FILED HER RETURN OF INCOME ON 30.9.2009 DECLARING N ET PROFIT AS ` 1.31 CRORES. THE CASE OF THE ASSESSEE WAS SELECTE D FOR SCRUTINY AND NOTICES UNDER SECTION 143(2) AND 142(1 ) WERE ITA NO.2221/MDS/2012 2 ISSUED TO THE ASSESSEE ON 23.08.2010 AND 27.9.2011 RESPECTIVELY. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 29.12.2011 MADE ADDITIONS TO THE TUNE OF ` 1,67,48,830/- UNDER THE PROVISIONS OF SECTION 40A( 3). WHILE ISSUING NOTICE UNDER SECTION 142(1) THE ASSESSING O FFICER HAD SPECIFICALLY ASKED THE ASSESSEE TO FURNISH DETAILS VIZ., NAME, PAN AND ADDRESS OF THE SUNDRY CREDITORS GIVEN IN TH E BALANCE SHEET. HOWEVER, WHILE PASSING THE ASSESSMENT ORDER, THE AFORESAID DETAILS ASKED FOR UNDER THE PROVISIONS OF SECTION 142(1) WERE NOT DISCUSSED BY THE ASSESSING OFFICER. THE CIT ISSUED NOTICE UNDER SECTION 263 OF THE ACT ON 11.9.2012 ON THE GROUND THAT IN THE ASSESSMENT ORDE R NO VERIFICATION HAS BEEN DONE ABOUT THE GENUINENESS OF THE SUNDRY CREDITORS SHOWN BY THE ASSESSEE FOR WHICH TH E CASE WAS SELECTED FOR SCRUTINY UNDER SECTION 143(3) OF T HE ACT. THE ASSESSING OFFICER HAS ONLY OBTAINED DETAILS OF THE SUNDRY CREDITORS BUT NO ENQUIRY WAS CONDUCTED RELATING THE RETO. THE ASSESSMENT WAS COMPLETED ON 29.12.2011 WITHOUT VERI FYING THE GENUINENESS OF THE SUNDRY CREDITORS AND UNSECUR ED LOANS. THUS, THE ORDER OF THE ASSESSING OFFICER IS ERRONEO US AND HAS ITA NO.2221/MDS/2012 3 RESULTED IN LOSS OF REVENUE. THE CIT OBSERVED THAT SUNDRY CREDITORS AMOUNT TO APPROXIMATELY ` 5.00 CRORES AND THERE ARE UNSECURED LOANS WITHOUT INTEREST TO THE EXTENT OF ` 15.00 CRORES. THE CIT VIDE IMPUGNED ORDER SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO CONDUCT ENQUIRY INTO THE TRANSACTIONS AND FIND OUT GENUINENESS OF THE SUNDRY CREDITORS. AGGRIEVED AGAINST THE ORDER OF THE CIT, THE ASSESS EE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI S.VENUGOPALAN, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER HAS BEEN PASSED MERELY ON ASSUMPTION AND PRESUMPTION. THE AR FURTHER CONTENDED THAT THE ASSESSING OFFICER HAS PA SSED THE ASSESSMENT ORDER AFTER THOROUGH VERIFICATION OF BOO KS OF ACCOUNT, VOUCHERS AND OTHER DOCUMENTS. ALL THE INFO RMATION ASKED FOR BY THE ASSESSING OFFICER WAS MADE AVAILAB LE TO HIM. THERE WAS NO GROUND FOR THE CIT TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT. 4. ON THE OTHER HAND, SHRI SHAJI P.JACOB APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT THE CIT HAS RI GHTLY ITA NO.2221/MDS/2012 4 INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT. T HE BASIS ON WHICH THE SCRUTINY ASSESSMENT PROCEEDINGS WERE INIT IATED AGAINST THE ASSESSEE WERE NOT LOOKED INTO BY THE AS SESSING OFFICER. THE ASSESSING OFFICER HAS NOT DISCUSSED AN YWHERE IN THE ASSESSMENT ORDER ABOUT THE SUNDRY CREDITORS AN D THE UNSECURED LOANS WHICH ARE TO THE TUNE OF ` 20.00 CRORES. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORIT IES BELOW. A PERUSAL OF THE NOTICE ISSUED UNDER SECTION 142(1) , WHICH IS AT PAGE 2 AND 3 OF THE PAPER BOOK, SHOWS THAT THE A SSESSING OFFICER WHILE CALLING FOR THE DETAILS AS PER THE NO TICE UNDER SECTION 142(1) OF THE ACT HAD REQUESTED THE ASSESSE E TO FURNISH THE NAME, PAN AND ADDRESS OF THE SUNDRY CRE DITORS GIVEN IN THE BALANCE SHEET. HOWEVER, WHILE COMPLETI NG THE ASSESSMENT, THERE IS NO MENTION OF THE SUNDRY CREDI TORS IN THE ASSESSMENT ORDER. ALTHOUGH THE TOTAL AMOUNT OF UNSE CURED LOAN AND SUNDRY CREDITORS ARE TO THE TUNE OF ` 20.00 CRORES. THE ASSESSING OFFICER IN HIS ORDER HAS ONLY DISCUSS ED ABOUT THE PAYMENTS MADE IN CASH THEREBY DISALLOWING AN AM OUNT OF ` 1,67,48,830/- UNDER THE PROVISIONS OF SECTION 40A( 3) OF THE ITA NO.2221/MDS/2012 5 ACT. THE CIT HAD ISSUED NOTICE UNDER SECTION 263 TO THE ASSESSEE ON 11.9.2012. THE ASSESSEE FILED REPLY TO THE NOTICE ON 15.10.2012. THE ASSESSEE HAS MENTIONED THAT COPI ES OF THE SALE AGREEMENT AND ALL THE DOCUMENTS WERE GIVEN TO THE ASSESSING OFFICER. THE ASSESSEE HAD PURCHASED LAND IN THE REMOTE VILLAGES. ALL TRANSFERS WERE MADE THROUGH PR OPER AGREEMENTS AND EVERY SALE HAS BEEN EFFECTED THROUGH PROPER CHANNEL. THEREFORE, ALL THE BUSINESS TRANSACTIONS W ERE EFFECTED IN THE REGULAR COURSE OF BUSINESS. 6. THE ASSESSING OFFICER HAS COMPLETED THE ASSESS MENT AFTER GETTING ALL THE PARTICULARS, COPY OF AGREEMEN TS AND RECONCILIATION OF BALANCES. REGARDING LOANS AND ADV ANCES, THE ASSESSEE HAD EXPLAINED THAT THE ASSESSING OFFIC ER HAD VERIFIED THE SAME AND THE BALANCES WERE AVAILABLE I N THE EARLIER YEARS ALSO. HOWEVER, WE FIND THAT THE ASS ESSING OFFICER HAS NOT MENTIONED ABOUT THE VERIFICATION OF THE TRANSACTIONS, SUNDRY CREDITORS AND UNSECURED LOANS ETC. IN HIS ASSESSMENT ORDER. EXCEPT FOR THE BALD STATEMENT OF THE ASSESSEE, THERE IS NOTHING ON RECORD TO SHOW THAT T HE ASSESSEE HAD PRODUCED THE DOCUMENTS BEFORE THE ASS ESSING ITA NO.2221/MDS/2012 6 OFFICER TO SHOW THE GENUINENESS OF THE SUNDRY CREDI TORS AS WELL AS UNSECURED LOANS. IT IS NOT THE CASE OF THE ASSESSEE THAT IT IS A CHANGE OF OPINION OR THE ISSUE REGARDI NG SUNDRY CREDITORS AND UNSECURED LOANS HAVE ALREADY BEEN CON SIDERED AND DECIDED BY THE ASSESSING OFFICER. FROM THE DOCU MENTS ON RECORD, WE ARE OF THE CONSIDERED OPINION THAT TH IS IS A FIT CASE FOR INVOKING JURISDICTION OF THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. WE FIND THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. WE, THEREFORE, UPHOLD THE ORDER OF THE CIT AND DISMISS THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, TH E 11 TH DAY OF MARCH, 2013 AT CHENNAI. SD/- SD/- ( DR. O.K.NARAYANAN ) (VIKAS AWASTHY) VICE-PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 11 TH MARCH, 2013. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.