Dy CIT Cent Cle I, Madurai V. N.Ravikumar, Hosur

ITA 2351/CHNY/2012

• Counselvise Citation: 235121714 RSA 2012
• Duration Of Justice: 2 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 23-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2012
• Court: TRIBUNAL
• Department Lawyers: KOTEESWARA RAO
• Assessee Lawyers: S SRIDHAR ERODE
• Keywords: Capital receipt

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.NOS.2350 & 2351/MDS/ 2012 / ASSESSMENT YEARS : 2007-08 & 2009-10 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE I MADURAI VS. SHRI N RAVIKUMAR D.NO.M 1/33, NEW ASTC COLONY HOSUR 635 109 [PAN ADJPN 0403 A ] ( &' / 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 : 18 - 1 2 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THESE APPEALS OF THE REVENUE ARE DIRECTED AGAINS T SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) -II, MADURAI, DATED 9.8.2012 FOR ASSESSMENT YEARS 2007-08 AND 200 9-10. I.T.A.NO. 2350/MDS/2012 2. IN THIS APPEAL FOR ASSESSMENT YEAR 2007-08, THE ONL Y ISSUE ARISES FOR CONSIDERATION IS DELETION OF ADDITION OF ` 22,55,000/- BEING ON-MONEY SAID TO BE PAID IN RESPECT OF AGARAM PROPE RTY. ITA NOS.2350 & 2351/12 :- 2 -: 3. SHRI KOTEESWARA RAO, LD. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATIO N IN THE CASE OF SHRI U SANTHANAM PILLAI, THE REVENUE AUTHORITIES FO UND CASH OF ` 37 LAKHS IN THE RESIDENCE OF THE ASSESSEE. THE REVEN UE AUTHORITIES ALSO FOUND CERTAIN INCRIMINATING MATERIAL IN RESPECT OF PROPERTY PURCHASED AT AGARAM VILLAGE, TRICHY. THE LD. DR CLARIFIED TH AT THE SEIZED MATERIAL DISCLOSES PURCHASE OF 2.98 ACRES OF LAND FOR ` 28,45,000/-. THE SALE AGREEMENT DISCLOSES THE SALE CONSIDERATION OF ` 51 LAKHS. THE ASSESSEE HAS PAID AN ADVANCE OF ` 51 LAKHS. THEREFORE, THE ASSESSING OFFICER BROUGHT THE DIFFERENCE BETWEEN THE ADVANCE PAID AND THE VALUE DISCLOSED IN THE SALE DEED FOR TAXATION AS UNDISCLO SED INVESTMENT. HOWEVER, THE CIT(A) ALLOWED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT THE AGREEMENT WAS NOT SIGNED BY THE PARTIES. ACCORDING TO THE LD. DR, WHEN THE AGREEMENT DISCLOSES THE PAYMENT OF ` 51 LAKHS, THE CIT(A) OUGHT NOT TO HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI S SRIDHAR, LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT ADMITTEDLY, THE ASSESSEE PURCHASED 2.98 ACRES OF LAND FOR A TOTAL SALE CONSIDERATION OF ` 28,45,000/-. THE SO CALLED AGREEMENT WAS NOT SIGNED BY THE PARTIES. MOREOVER, THE UNSIG NED AGREEMENT RELATES TO ASSESSMENT YEAR 2006-07. IF THE AGREEME NT IS TAKEN INTO CONSIDERATION THEN THE ADDITION COULD BE MADE ONLY IN ASSESSMENT YEAR ITA NOS.2350 & 2351/12 :- 3 -: 2006-07 AND NOT IN THE ASSESSMENT YEAR UNDER CONSID ERATION. OTHER THAN THE UNSIGNED AGREEMENT, ACCORDING TO THE LD. C OUNSEL, NO OTHER MATERIAL IS AVAILABLE ON RECORD. THEREFORE, THE CI T(A) HAS RIGHTLY DELETED THE ADDITION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WHA T WAS FOUND BY THE REVENUE AUTHORITIES DURING THE COURSE OF SEARCH OPE RATION IS UNSIGNED AGREEMENT WHICH SHOWS A PAYMENT OF ` 51 LAKHS ON 21.12.2005. IF THE AGREEMENT IS TAKEN AS TRUE THEN THE DATE OF PAY MENT I.E 21.12.2005 FALLS IN ASSESSMENT YEAR 2006-07, THEREF ORE, THE ADDITION IF AT ALL COULD BE MADE ONLY IN ASSESSMENT YEAR 2006-0 7 AND NOT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. APART FROM THA T THE AGREEMENT IS NOT SIGNED BY ANY PARTIES. THEREFORE, THE SO CA LLED PAYMENT OF ` 51 LAKHS SAID TO BE MADE ON 21.12.2005 IS NOT SUPPORTE D BY ANY MATERIAL. HENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE UNSIGNED AGREEMENT CANNOT BE A BASIS FOR MAKING ANY ADDITION . AS RIGHTLY SUBMITTED BY THE LD. COUNSEL, OTHER THAN THE UNSIGN ED AGREEMENT, NO OTHER MATERIAL IS AVAILABLE ON RECORD. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ITA NOS.2350 & 2351/12 :- 4 -: I.T.A.NO.2351/MDS/2012 7. IN THIS APPEAL FOR ASSESSMENT YEAR 2009-10, THE ON LY ISSUE ARISES FOR CONSIDERATION IS ADDITION OF ` 1.10 CRORES BEING UNDISCLOSED INCOME FROM BUSINESS. 8. SHRI KOTEESWARA RAO, LD. DR SUBMITTED THAT THE ASS ESSEE ENTERED INTO AN AGREEMENT WITH SHRI AMBREESH REDDY FOR SALE OF LAND AT THORAPALLI VILALGE AND RECEIVED A SUM OF ` 1.10 CRORES IN CASH AND ANOTHER SUM OF ` 30 LAKHS THROUGH ACCOUNT PAYEE CHEQUE. DURING THE COURSE OF SEARCH OPERATION A CHEQUE OF ` 30 LAKHS WAS FOUND. ACCORDING TO THE LD. DR, DUE TO SOME DISPUTE THE LA ND COULD NOT BE REGISTERED. THE ASSESSEE HAS ALSO NOT DISCLOSED T HE RECEIPT OF MONEY. THE ASSESSEE HAS ALSO NOT ACCOUNTED THE RECEIPT O F MONEY IN THE BOOKS OF ACCOUNT. THOUGH THE ASSESSEE HAS SHOWN A SUM OF ` 27 LAKHS AS HIS PROPORTIONATE SHARE, THE INCOME ADMITT ED BY THE ASSESSEE DOES NOT DISCLOSE THE BREAK-UP DETAILS OF THE MONEY RECEIVED, THEREFORE, THE ENTIRE SUM OF ` 1.10 CRORES WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. 9. ON THE CONTRARY, SHRI S SRIDHAR, LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT WHAT WAS RECEIVED BY THE ASSESSEE I S ONLY AN ADVANCE SALE CONSIDERATION FOR SALE OF THE LAND, THEREFORE, IT IS A CAPITAL RECEIPT. ACCORDING TO THE LD. COUNSEL, AN AGREEMENT WAS ENTE RED INTO FOR SALE ITA NOS.2350 & 2351/12 :- 5 -: OF LANDED PROPERTY OWNED BY THE ASSESSEE AND HIS B ROTHER WITH SHRI AMBREESH REDDY AND THREE OTHERS. AS PER THIS AGREE MENT, THE SALE CONSIDERATION PER ACRE WAS ` 24,57,000/- AND ADVANCE OF ` 1.40 CRORES WAS RECEIVED. OUT OF THIS, ` 1.10 CRORES WAS RECEIVED BY CASH AND ANOTHER SUM OF ` 30 LAKHS WAS RECEIVED BY CHEQUE. SINCE THE ADVANC E SALE CONSIDERATION IS IN THE NATURE OF CAPITAL RECE IPT, THIS WAS NOT OFFERED FOR TAXATION. ACCORDING TO THE LD. COUNSEL , THE PROFITS, IF ANY, ON SALE OF THE LAND SHALL BE OFFERED ONCE THE SALE PROCEEDINGS WERE COMPLETED. SINCE THERE WAS A DISPUTE BETWEEN THE P ARTIES, THE SALE DEED COULD NOT BE EXECUTED, THE SALE WAS NOT COMPLE TED. SINCE THE TRANSACTION COULD NOT BE MADE DURING THE YEAR UNDER CONSIDERATION IT CANNOT BE TAXED DURING THE YEAR UNDER CONSIDERATION . HOWEVER, THE ASSESSEE HAS OFFERED THE SAME IN THE SUBSEQUENT ASS ESSMENT YEAR. THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THE ADDIT ION. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE ASSESSEE HAS RECEIVED A SUM OF ` 1.10 CRORES BY CASH AND ANOTHER SUM OF ` 30 LAKHS BY CHEQUE IN PURSUANCE OF AN AGREEMENT FO R SALE OF LANDED PROPERTY. DUE TO DISPUTE BETWEEN THE PARTIE S, THE ASSESSEE COULD NOT DEPOSIT THE CHEQUE FOR REALIZATION. THE RECEIPT OF MONEY TO THE EXTENT OF ` 1.10 CRORES WAS TOWARDS PART PAYMENT OF SALE CONSIDERATION, THEREFORE, IT IS A CAPITAL RECEIPT. SINCE THERE WAS A ITA NOS.2350 & 2351/12 :- 6 -: DISPUTE BETWEEN THE PARTIES, THE SALE COULD NOT BE COMPLETED. THIS TRIBUNAL IS OF THE CONSIDERED OPINION WHAT WAS RECE IVED BY THE ASSESSEE IS A CAPITAL RECEIPT. MOREOVER, IN THE SU BSEQUENT ASSESSMENT YEAR THE ASSESSEE HIMSELF OFFERED THE SAID AMOUNT FOR TAXATION. THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THE ADDIT ION MADE BY THE ASSESSING OFFICER. THIS TRIBUNAL DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAME IS CONFIRMED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE STAND DISM ISSED. 12. TO SUMMARIZE, BOTH THE APPEALS OF THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 18 TH DECEMBER, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF