Pushpa Sohanlalji Fomra, Chennai V. ITO, Non Corporate Ward 12(3), Chennai

ITA 2243/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5625 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 14-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: ABISHEK MURALI
• Keywords: Unexplained cash credit; Principle of natural justice

Judgement Text

, A/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2243 /MDS./2017 ( ASSESSMENT YEAR : 2013-14 ) SMT.PUSHPA SOHANLALJI FOMRA , 123,FOMRA BUILDING, GOVINDAPPA NAICKEN STREET, CHENNAI 600 001. VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 12(3), CHENNAI. PAN AAAPF 0595 K ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.ABISHEK MURALI, C.A / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 28.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 20.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-13, CHENN AI DATED 05.06.2017 PERTAINING TO ASSESSMENT YEAR 2013-14. ITA NO.2243 /MDS/2017 2 2. THE FIRST ISSUE RAISED IN THIS APPEAL FOR ADJUD ICATION IS WITH REGARD TO TREATMENT OF AGRICULTURAL INCOME AS UNDIS CLOSED CASH CREDIT. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT YEAR 2013-14, THE ASSESSEE HAD ADMITTED AGRICULTURAL INC OME EARNED OF ` 6,50,000/- FROM A LAND SITUATED AT SRIPERAMBADUR B- VILLAGE. IN THE COURSE OF SCRUTINY, THE ASSESSEE WAS ASKED TO FURNI SH RELEVANT DOCUMENTS PERTAINING TO THE AGRICULTURAL INCOME EAR NED AND THE ASSESSEE ACCORDINGLY FURNISHED THE DOCUMENTS INCLUD ING THE ADANGAL FOR THE FASLI YEAR 1425(01/07/2015 TO 30/0/2016), I SSUED BY THE VAO ON 20/08/2015 AS PROOF OF AGRICULTURAL INCOME. THE ASSESSEE FURTHER EXPLAINED THAT THE AGRICULTURAL IS FROM PADDY AND W AS SOLD LOCALLY. 3.1 SUBSEQUENTLY THE LEARNED OFFICER ISSUED SUMMON S U/.S 131 OF THE ACT, TO THE VAO, AND OBTAINED A SWORN STATEMENT STATING THAT THE LANDS ARE BARREN LANDS AND NO AGRICULTURAL ACTIVITI ES WERE CARRIED OUT IN THE FINANCIAL YEAR 2012-13. FURTHER, THE VAO SUB SEQUENTLY HAS CANCELLED THE ADANGAL ISSUED ON 20/08/2015 STATING THAT THE ADANGAL DOES NOT BELONG TO F.Y 2012-13. ITA NO.2243 /MDS/2017 3 3.2 THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS NOT GIVEN AN OPPORTU NITY TO BE HEARD OR TO CROSS EXAMINE THE VAO AND STATEMENT WAS OBTAI NED FROM THE VAO ON THE BACK OF THE ASSESSEE. GIVEN THE SUBSTANT IAL NATURE OF CHANGE IN OPINION OF THE VAO, IT IS CRUCIAL TO THE PRINCIPLES OF NATURAL JUSTICE THAT THE ASSESSEE BE GIVEN AN OPPORTUNITY T O BE HEARD AND TO CROSS EXAMINE THE SUBMISSIONS MADE BY THE VAO. THE ASSESSEE SUBMITTED THAT THE LEARNED OFFICER HAS ALSO STATED IN THE IMPUGNED ORDER THAT THE TALSIDAR HAS DENOTED THAT THE LANDS ARE DENOTED AS PUNCTURE LANDS FOR THE PERIOD IN QUESTION AND HENCE WERE UNCULTIVABLE. HOWEVER, THE OFFICER HAS ERRED IN CON SIDERING THIS OPINION AFTER SIGNIFICANT TIME HAS LAPSED SINCE THE FINANCIAL YEARS IN QUESTION WHEN THE ADNGAL HAS CLEARLY SHOWN THAT TH E ASSESSEE HAS EARNED THE INCOME FROM THE SALE OF AGRICULTURAL PRO DUCE, CULTIVATED FROM THE LAND HELD BY THE APPELLANT. 3.3 SUBSEQUENTLY, THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 10.03.2016 BY ADDING THE FOLLOWING: I) TREATING THE AGRICULTURAL INCOME ADMITTED AS UNEXPLAINED CASH CREDIT ` 6,50,000/-. ITA NO.2243 /MDS/2017 4 II) THE INTEREST RECEIVED FROM A HOUSING NOT OFFER ED AS INCOME ` 2,20,706/-. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, TH E ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). REGARDING THE ISS UE OF AGRICULTURAL INCOME, LD.CIT(A) ENDORSED THE VIEW OF THE LD. ASSE SSING OFFICER AND DECIDED THE ISSUE AGAINST THE ASSESSEE. AGAINST THE DECISION OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 4. BEFORE THE BENCH, THE LD.A.R SUBMITTED THAT THE ASSESSEE PRODUCED ALL REQUISITE DOCUMENTS RELEVANT TO AGRICU LTURAL INCOME EARNED INCLUDING THE ADANGAL ISSUED ON 20/08/2015 F OR THE FASLI YEAR 1425(01/07/2015 TO 30/0/2016). SUBSEQUENTLY, THE LD . ASSESSING OFFICER SUMMONED THE VAO U/S.131 OF THE ACT AND REC ORDED A SWORN STATEMENT STATING THAT THE LANDS ARE BARREN LANDS A ND NO AGRICULTURAL ACTIVITIES WERE CARRIED OUT IN THE FINANCIAL YEAR 2 012-13. LATER, THE VAO CANCELLED THE ADANGAL ISSUED ON 20/08/2015 STAT ING THAT THE ADANGAL DOES NOT BELONG TO THE FINANCIAL YEAR 2012- 13. IT WAS SUBMITTED BY THE LD.A.R THAT THE ASSESSEE WAS NOT G IVEN AN ITA NO.2243 /MDS/2017 5 OPPORTUNITY TO CROSS EXAMINE THE SUBMISSIONS OF THE VAO AND THE LD. ASSESSING OFFICER DECIDED THE CASE AGAINST THE ASSE SSEE AT THE BACK OF THE ASSESSEE. FURTHER, THE LD.A.R SUBMITTED THA T IN THE EARLIER YEAR, THE AGRICULTURE INCOME WAS ACCEPTED BY THE DEPARTME NT AND ONLY FROM THE PRESENT ASSESSMENT YEAR, IT WAS NOT ACCEPT ED. ACCORDING TO HIM, THEE SHOULD A CONSISTENCY IN INCOME TAX PROCEE DINGS FOR EACH ASSESSMENT YEAR, THE LD. ASSESSING OFFICER CANNOT T AKE A DIFFERENT VIEW ON THE SAME SET OF FACTS. 5. ON THE OTHER HAND, LD.D.R RELIED ON THE ORDER O F LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAD NOT PRODUCED ANY RELEVANT EVIDENCE TO PROVE THAT THE ASSESSEE CARRIE D ON AGRICULTURAL OPERATIONS IN THE SAID LAND OWNED BY THE ASSESSEE A ND ASSESSEE HAS TO FURNISH RELEVANT DOCUMENTS PERTAINING TO THE AGR ICULTURAL INCOME EARNED. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE, THE OWNING OF AG RICULTURAL LAND IS NOT DISPUTED BY THE LOWER AUTHORITIES. FURTHER, IT IS ALSO UNDISPUTED FACT THAT IN EARLIER YEARS, THE DECLARED THE AGRICULTURA L INCOME, WHICH WAS ACCEPTED BY THE LD. ASSESSING OFFICER. BUT, ONLY I N THIS ASSESSMENT ITA NO.2243 /MDS/2017 6 YEAR UNDER CONSIDERATION, THE SAME INCOME WAS NOT A CCEPTED AS AGRICULTURAL INCOME. THERE WAS A STATEMENT RECORDED FROM VAO U/S.131 OF THE ACT AND PRINCIPLES OF NATURAL JUSTIC E REQUIRES TO PROVIDE PROPER OPPORTUNITY TO BE GIVEN TO THE PARTY TO CROS S EXAMINE THE SUBMISSIONS OF THE VAO, IF SUCH THIRD PARTY STATEME NTS RELIED UPON BY A.O TO COMPLETE THE ASSESSMENT. HENCE, IN THE INTE REST OF JUSTICE, I AM INCLINED TO REMIT THE ENTIRE ISSUE TO THE FILE O F LD. ASSESSING OFFICER TO GIVE COPY OF SWORN STATEMENT RECORDED FROM VAO U /S.131 OF THE ACT TO ASSESSEE AND ALSO TO CONSIDER THE AGRICULTU RAL INCOME DECLARED BY THE ASSESSEE IN EARLIER ASSESSMENT YEAR S TO COME TO CONCLUSION FOR PRESENT ASSESSMENT YEAR ON THIS ISSU E. WITH THIS OBSERVATION, I REMIT THE ISSUE TO THE FILE OF LD. A SSESSING OFFICER FOR FRESH CONSIDERATION. 7. THE NEXT ISSUE IS WITH REGARD TO TAXING OF INTE REST INCOME. 7.1 IT WAS SUBMITTED BY THE LD.A.R THAT THE ASSESS EE RECEIVED ` 2,20,706/- AS INTEREST INCOME, WHICH WAS OFFERED T O TAX IN EARLIER ASSESSMENT YEAR 2012-13 ON ACCRUAL BASIS. AS SUCH, TAXING THE SAME INCOME IN THIS ASSESSMENT YEAR UNDER CONSIDERATION AMOUNTS TO ITA NO.2243 /MDS/2017 7 DOUBLE TAXATION. IN MY OPINION, IT IS TO VERIFY WHE THER THE SAME INCOME WAS OFFERED TO TAX IN EARLIER ASSESSMENT YEAR 2012- 13, IF SO, THERE CANNOT BE ANY ADDITION ON THIS COUNT IN THIS ASSESS MENT YEAR UNDER CONSIDERATION. FURTHER, I DIRECT THE AO TO VERIFY WHETHER ANY INTEREST INCOME ACCRUED TO THE ASSESSEE IN THE PRESENT ASSES SMENT YEAR UNDER CONSIDERATION, IF SO, THE SAME IS TO BRING TO TAX IN THIS ASSESSMENT YEAR ALSO. WITH THIS OBSERVATION, THIS I SSUE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDE RATION. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 20.12.2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 20.12.2017 K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF