Dy CIT Cent Cle I, Madurai V. U.Santhanmpillai, Hosur

ITA 2349/CHNY/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8267 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 23-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 31-12-2012
• Court: TRIBUNAL
• Department Lawyers: KOTEESWARA RAO
• Assessee Lawyers: S SRIDHAR ERODE
• Keywords: Unexplained investment
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.2349/MDS/2012 / ASSESSMENT YEAR : 2005-06 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE I MADURAI VS. SHRI U SANTHANAMPILLAI 2 ND CROSS, NGGOS COLONY BAGALUR ROAD HOSUR 635 109 [PAN AIZPS 5070 P ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI KOTEESWARA RAO, CIT /RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE(ERODE) / DATE OF HEARING : 23 - 1 1 - 2015 ! / DATE OF PRONOUNCEMENT : 01 - 01 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, MADUR AI, DATED 2.7.2012 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. SHRI KOTEESWARA RAO, LD. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS WITH REGARD TO ITA NO. 2349/12 :- 2 -: ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTEN T OF ` 1.21 CRORES TOWARDS ON-MONEY PAID IN RESPECT OF THIRUVERUMBUR L AND. 3. THE LD. DR SUBMITTED THAT THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEE U/S 132 OF THE ACT. FRO M THE SEIZED MATERIAL IT WAS FOUND THAT THE ASSESSEE PURCHASED A LAND TO THE EXTENT OF 11.6 ACRES AT THIRUVERUMBUR FOR A TOTAL CONSIDER ATION OF ` 1.67 CRORES. HOWEVER, THE ASSESSEE ADMITTED ONLY A SUM OF ` 46 LAKHS IN THE RETURN OF INCOME. THEREFORE, THE BALANCE AMOUN T WAS TREATED AS ON-MONEY AND THE ASSESSING OFFICER MADE ADDITION TO THE EXTENT OF ` 1.21 CRORES. THE ASSESSING OFFICER ALSO FOUND THAT THE ASSESSEE HAS SOLD THE LAND FOR ` 2.52 CRORES. HOWEVER, THE PROPERTY WAS SOLD DURIN G THE ASSESSMENT YEAR 2007-08, THEREFORE, THE ASSESSI NG OFFICER HAS NOT CONSIDERED THE PROFIT DURING THE YEAR UNDER CONSIDE RATION. THE PURCHASE OF PROPERTY WAS MADE DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSEE HIMSELF ADMITTED IN SWORN STATEME NT THAT THE PROPERTY WAS PURCHASED FOR A SALE CONSIDERATION OF ` 1.67 CRORES AS AGAINST THE VALUE DISCLOSED IN THE SALE DEED OF ` 46 LAKHS. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITION OF ` 1.21 CRORES AS UNACCOUNTED INVESTMENT IN THE LANDED PROPERTY. 4. ON THE CONTRARY, SHRI S SRIDHAR, LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT ` 1.67 CRORES DOES NOT REPRESENT THE SALE CONSIDERAT ION ITA NO. 2349/12 :- 3 -: OF THIRUVERUMBUR PROPERTY. IT IS ONLY A CLOSING WO RK-IN-PROGRESS AFTER THE SALE OF A PORTION OF LAND DURING THE ASSESSMENT YEAR 2006-07. ACCORDING TO THE LD. COUNSEL, THE PURCHASE PRICE OF THE PROPERTY WAS ONLY ` 46 LAKHS AND THE ASSESSEE INCURRED OTHER DEVELOPM ENT CHARGES TO THE EXTENT OF ` 1,42,34,237/- AS ON 23.2.2006. SINCE THE DEVELOPMENT WAS CARRIED OUT DURING THE ASSESSMENT Y EAR 2006-07, IT CANNOT BE ADDED DURING THE YEAR UNDER CONSIDERATION . THE CLOSING WORK-IN-PROGRESS AFTER SALE OF 40,495 SQ FT OF LAND WAS ARRIVED AT ` 1.67 CRORES AS ON 31.3.2006. THIS IS SUPPORTED BY THE ENTRIES MADE IN THE LAST PAGE OF THE SEIZED MATERIAL. THE ASSESSIN G OFFICER BY PLACING RELIANCE ON THE STATEMENT SAID TO BE RECORDED FROM ONE SHRI N RAVIKUMAR, MADE THE ADDITION TO THE EXTENT OF ` 1.21 CRORES. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE WAS NOT EXAMINED BY THE ASSESSING OFFICER AND THE ASSESSEE HAS NOT MADE AN Y ADMISSION WITH REGARD TO THE INVESTMENT MADE TO THE EXTENT OF ` 1.21 CRORES. IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THE CIT(A) FOUND THAT THERE CANNOT BE ANY ADDITION ON THE BASIS OF THE STATEMENT OF THE BUSINESS ASSOCIATE, SHRI N RAVIKUM AR. MOREOVER, THE WORK-IN-PROGRESS TO THE EXTENT OF ` 1.67 CRORES IS AS ON 31.3.2006, THEREFORE, THE ADDITION, IF ANY, CAN BE MADE ONLY I N ASSESSMENT YEAR 2006-07 AND NOT IN THE ASSESSMENT YEAR UNDER CONSI DERATION. ITA NO. 2349/12 :- 4 -: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PURCHASED 11.6 ACRES OF LAND AT THIRUVERUMBUR FOR A TOTAL CONSIDERATION OF ` 1.67 CRORES. HOWEVER, THE SALE DEED DISCLOSES THE SALE CONSIDERATION ONLY TO THE EXTENT OF ` 46 LAKHS. THE ASSESSMENT ORDER DOES NOT REFER ANY STA TEMENT SAID TO BE RECORDED FROM THE ASSESSEE. THE ASSESSMENT ORDER REFERS ONLY TO THE EXPLANATION OF THE REPRESENTATIVE OF THE ASSESSEE THAT HE RECEIVED SALE ADVANCE OF ` 1,42,34,237/-. THE SEIZED MATERIAL DISCLOSES THE WORK-IN-PROGRESS AFTER SALE OF 40,494 SQ FT OF LAND AT ` 1.67 CRORES AS ON 31.3.2006. THE CIT(A) REFERS TO THE SEIZED MATE RIAL AT PARA 6.3 OF HIS ORDER. THIS FACTUAL ASPECT IS NOT DISPUTED BY THE REVENUE. IF THE SEIZED MATERIAL AS REFERRED BY THE CIT(A) IN PARA 6 .3 OF HIS ORDER DISCLOSES THE WORK-IN-PROGRESS AFTER SALE OF 40,494 SQ FT OF LAND AT ` 1.67 CRORES THEN THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THERE CANNOT BE ANY ADDITION DURING THE YEAR UNDER CONSID ERATION. MOREOVER, THE ASSESSEE AFTER PURCHASE OF PROPERTY, DEVELOPED THE SAME FOR MAKING IT MARKETABLE ONE. THE MAJOR PORTI ON OF THE INVESTMENT WAS MADE DURING THE ASSESSMENT YEAR 2006 -07. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE TOTA L COST OF THE PROPERTY INCLUDING THE INVESTMENT MADE FOR DEVELOPMENT COMES TO NEARLY ` 1.67 CRORES. THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY ITA NO. 2349/12 :- 5 -: THE ASSESSING OFFICER. THIS TRIBUNAL DO NOT FIND A NY INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONF IRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JANUARY, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 1 ST JANUARY, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF