ACIT, CHENNAI V. M.A.Rahim, CHENNAI

ITA 2352/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9493 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 31-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI IRS
• Assessee Lawyers: L PREMKUMAR
• Keywords: Unexplained cash credit; Assessment record
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2352/MDS/2015 ' $ %$ / ASSESSMENT YEAR : 2012-2013. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 7(1) CHENNAI VS. SHRI. M.A. RAHIM, NO.1965, J BLOCK, 3 RD STREET, 13 TH MAIN ROAD, ANNA NAGAR WEST, CHENNAI 600 040. [PAN AADPR 7254A ] ( / APPELLANT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. A.B. KOLI, IRS, JCIT. *+&' ( ) /RESPONDENT BY : SHRI. L. PREMKUMAR, C.A. ( , / DATE OF HEARING : 09-03-2016 -.% ( , / DATE OF PRONOUNCEMENT : 27-04-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-7, CHEN NAI IN ITA NO.87/CIT(A)-7/2014-15, DT 30.10.2015 FOR THE ASSES SMENT YEAR 2012- ITA NO. 2352/MDS/2015. :- 2 -: 2013 PASSED U/S.143(3) AND 250 OF THE INCOME TAX A CT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 2.1 THE LD. CIT(A) OUGHT NOT TO HAVE DIRECTED THE DELETION MADE ON ACCOUNT OF UNEXPLAINED CREDIT OF <43,00,000/- 2.2 THE LD. CIT(A) OUGHT NOT TO HAVE APPRECIATED THAT THE ASSESSEE BEFORE ASSESSING OFFICER HAS FAILED TO IDENTIFY THE ORIGINAL SELLER AND HAD NOT PRODUCED ANY CREDIBLE EVIDENCE THAT THE COST WAS MET BY ONE SHRI. ABBAS IN CASH. 2.3 LD. CIT(A) OUGHT NOT TO HAVE AFFORDED AN OPPORTUNITY TO THE ASSESSING OFFICER ADMITTING FRES H EVIDENCE AS TO THE CONTRIBUTION OF CAPITAL FOR PURCHASE OF PROPERTY U/S. RULE 46A. 3. THE BRIEF FACTS OF THE CASE, THE ASSESSEE IS AN IND IVIDUAL AND IN THE BUSINESS OF WHOLE SALE DEALER OF FRUITS AND FRUITS COMMISSION AGENT AND FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 30.09.2012 ADMITTING TOTAL INCOME OF <27,62,120/-. SUBSEQUENTLY NOTICES U/S.143(2) OF THE ACT DATED 08.08.2013 AND 142(1) OF THE ACT DATED 22.05.2014 WERE ISSUED. IN COMPLIANCE TO NOT ICES, THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE APPEARED FROM TIME TO TIME AND FILED INFORMATION AND FURNISHED CLARIFICATIONS. TH E LD. ASSESSING OFFICER FOUND IN ASSESSMENT PROCEEDINGS THAT THE ASSESSEE IS ENGAGED IN SELLING OF FRUITS AND HAVING A FRUIT SHOP AT KOYAM BEDU MARKET. ON PERUSAL OF THE SAVING BANK ACCOUNT VIDE CUSTOMER I. D. NO.016062156, ITA NO. 2352/MDS/2015. :- 3 -: A SUM OF <43,00,000/- WAS CREDITED ON 18.11.2011 WI TH NARRATION CUBL AND CHEQUE NO.536479. SUBSEQUENT TO CREDIT , THE ASSESSEE HAS ISSUED A CHEQUE TO NFA INTERNATIONAL <43,00, 000/-. THE ASSESSING OFFICER CALLED FOR CLARIFICATION FOR <43, 00,000/- CREDITED IN THE BANK ACCOUNT. THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE FILED EXPLANATIONS THAT ASSESSEE HAS OBTAINED POWER OF AT TORNEY OF M/S. R. BHUVANESWARI OF CHENNAI FOR SALE OF PROPERTY VIDE PAO EXECUTED ON 18.03.2011 FOR IMMOVABLE PROPERTY SITUATED AT MADAN ANDAPURAM, CHENNAI 600 116, AND THE PROPERTY WAS SUBSEQUENTLY SOLD TO SHRI. RAVIKUMAR OF MOULIVAKKAM VIDE PAO ON 17.11.2011 FOR A CONSIDERATION OF <43,00,000/-. THIS CONSIDERATION WAS CREDITED TO THE ASSESSEES BANK ACCOUNT. THE ASSESSEE HAS CLARIFIED THAT THE TRANSACTION OF LAND INVESTMENT WAS MADE BY ASSESSEES RELATIVE MR. ABBA S OF KODAIKANAL AND THE SAID AMOUNT WAS RETURNED TO HIM AFTER SALE AND THE ROLE OF THE ASSESSEE CARRIED OUT ON BEHALF OF THE MR. ABBAS AND ASSESSEE IS ONLY FACILITATOR TO THE TRANSACTION. IN THE ASSESSMENT PROCEEDINGS, THE LD. ASSESSING OFFICER WANTED TO KNOW WHETHER ORIGINAL S ELLER HAS ADMITTED CAPITAL GAINS IN HER HANDS AND ASSESSEE COULD NOT L OCATE HER AND SUBMIT ANY PARTICULARS. THE ASSESSING OFFICER IS O F THE OPINION THAT ASSESSEE FAILED TO IDENTIFY THE ORIGINAL SELLER AND THE COST OF INVESTMENT STATED TO BE MET BY MR. ABBAS IN CASH WITHOUT ANY C REDIBLE EVIDENCE. FURTHER, THE ASSESSING OFFICER IGNORED THE CONFIRMA TION LETTER UNDER ITA NO. 2352/MDS/2015. :- 4 -: SUSPICION AND TREATIED THE TRANSACTION AS UNREALI STIC AS AMOUNT OF <43,00,000/- WAS TRANSFERRED TO M/S. NFA INTERNATIO NAL ON 29.11.2011 FROM ASSESSEES BANK. THE LD. ASSESSING OFFICER ALLE GED THAT THE AMOUNT PERTAINS TO ASSESSEE AND USED FOR CONSTRUCT ION OF RESIDENTIAL HOUSE AND DISBELIEVED THE TRANSACTION OF MR. ABBAS AND ASSESSEE AND ESTIMATED COST OF PROPERTY AS <38,50,000/- IN THE HANDS OF THE ASSESSEE AND DETERMINED SHORT TERM CAPITAL GAINS O F <4,50,000/-. FURTHER, THE LD. ASSESSING OFFICER IN HASTE AND CO NJECTURE TREATED <43,00,000/- CREDITED IN THE BANK ACCOUNT AS UNEXPL AINED INVESTMENT AS SAME WAS NOT SUPPORTED BY VALID PROOF AND NO SA TISFACTORY EXPLANATIONS FILED AND ASSESSED TOTAL INCOME OF <1, 04,12,130/- AND RAISED DEMAND. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE ARGUED THE GROUNDS AND S UBSTANTIATED HIS ARGUMENTS ON THE FINDINGS OF THE LD. ASSESSING OFFI CER AND RELEVANT CIRCUMSTANCES UNDER WHICH PROPERTY WAS SOLD AND ASS ESSEE IS ONLY A FACILITATOR OF SALE.. THE LD. AUTHORISED REPRESENT ATIVE FURNISHED EXPLANATIONS AND WRITTEN SUBMISSIONS REFERRED AT PA GE 4 OF COMMISSIONER OF INCOME TAX (APPEALS) AS UNDER:- A) COPY OF ORDER U/S.143(3) FOR THE A.Y.2012-13 IN THE CASE OF MR. ABBAS OF KOKAIKANAL (PAN AFSPA2765H) DATED 25.03.2015. ON PERUSAL ITA NO. 2352/MDS/2015. :- 5 -: OF THE ASSESSMENT ORDER PASSED BY ITO WARD-I, DINDIGUL, IT IS SEEN THAT THE AO HAS CONSIDERED THAT PROFIT ON SALE OF PROPERTY ( 3,OO,OOO/-) AS TAXABLE IN THE HANDS OF THE ASSESSEE, MR. M. ABBAS. B) CONFIRMATION AND OWNERSHIP OF THE TRANSACTION BY MR.M. ABBAS DATED 05.02.2015, ORIGINALLY FILED BEFORE THE AO. C) THE APPELLANT HAS FURTHER SUBMITTED AXIS BANK ACCOUNT STATEMENT, WHEREIN THE SALES CONSIDERATION OF 43,OO,OOO/- HAS BEEN TRANSFERRED BY THE APPELLANT TO MR. ABBAS, AND IS REFLECTED IN THE BANK STATEMENT AS UNDER: SL.NO. DATE OF TRANSACTION CHEQUE NO. AMOUNT 1. 03.03.2015 365125 15,00,000/- 2. 05.03.2015 365126 15,00,000/- 3. 09.03.2015 365127 13,00,000/- TOTAL 43,00,000/- D) COPY OF LEGER A/C OF MR. ABBAS IN THE BOOKS OF T HE APPELLANT REFLECTING THE ABOVE TRANSACTIONS. THE CONTENTION OF THE LD. ASSESSING OFFICER WAS THA T THE INVESTMENT IN PROPERTY BY MR. ABBAS IN CASH IS NOT SUPPORTED BY ANY EVIDENCE AND PAO EXECUTED IN THE NAME OF THE ASSESSEE DOES NOT M ENTION ANY CONSIDERATION. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERING THE WRITTEN SUBMISSIONS AND THE FINDING S OF THE LD. ASSESSING OFFICER AND CLARIFICATION DULY SUPPORTED BY THE EVIDENCE FORMING PART OF ASSESSMENT RECORD OBSERVED AT PARA 4.5 AND 4.6 OF HIS ORDER AND DELETED THE ADDITION AS UNDER:- ITA NO. 2352/MDS/2015. :- 6 -: 4.5. IT HAS BEEN FURTHER SUBMITTED BY THE APPELLA NT THAT SALE CONSIDERATION WILL NOT FIND A MENTION IN THE P AO, FOR THE SIMPLE REASON THAT IF THE CONSIDERATION IS MENT IONED, IT WILL LOSE THE CHARACTER OF PAO AND WILL BECOME A DE ED OF CONVEYANCE LIABLE OR A HIGHER STAMP DUTY. HENCE, I T HAS BEEN STATED THAT THE APPELLANT WAS A MERE FACILITA TOR ON BEHALF OF HIS RELATIVE AND DOES NOT STAND TO CONCEA L OR GAIN ANYTHING OUT OF THIS TRANSACTION. 4.6 I HAVE GONE THROUGH THE EVIDENCES FURNISHED BY THE APPELLANT. IT IS CLEAR THAT THE RELATIVE OF THE AP PELLANT MR. ABBAS HAS ACCEPTED THE OWNERSHIP OF THE TRANSACTION , DISCLOSED THE CAPITAL GAINS IN THE RETURN OF INCOME , WHICH HAS SUFFERED TAX. IT IS ALSO SEEN THAT THE APPELLA NT HAS RETURNED THE AMOUNT TO THE ORIGINAL INVESTOR THROUG H BANKING CHANNELS. THE IDENTITY OF THE INVESTOR, HI S CREDITWORTHINESS AND GENUINESS OF THE TRANSACTION I S THEREFORE NOT IN DOUBT. ON APPRECIATION OF THE EVI DENCES FILED AND THE FACTS AND CIRCUMSTANCES OF THE CASE, I DO NOT FIND ANY MERIT IN THE STAND TAKEN BY THE ASSESSING OFFICER. THE ADDITION OF <43,00,000/- ON ACCOUNT OF UNEXPLA INED CREDIT, IS THEREFORE, DELETED. AGGRIEVED BY THE COMMISSIONER OF INCOME TAX (APPEAL S) ORDER, THE REVENUE HAS ASSAILED AN APPEAL BEFORE US. 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE VEHE MENTLY ARGUED THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLA INED CREDIT .43,00,000/- AND THE ASSESSEE HAS FAILED TO PROVE T HE IDENTITY OF ORIGINAL SELLER IN THE ASSESSMENT PROCEEDINGS. FUR THER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT PROVI DED PROPER OPPORTUNITY TO THE LD. ASSESSING OFFICER IN RESPECT OF FRESH SUBMISSIONS MADE IN THE APPELLATE PROCEEDINGS. THE DEPARTMENTA L REPRESENTATIVE ITA NO. 2352/MDS/2015. :- 7 -: FURTHER ALLEGED THAT THE ORIGINAL TRANSACTION OF PR OPERTY WAS NOT BROUGHT ON RECORD BY ASSESSEE. THEREFORE SOURCE IS TREATED AS UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE AND PLEADED FOR SETTING ASIDE THE COMMISSIONER OF INCOME TAX (APPEA LS) ORDER. 6. CONTRA, THE LD. AUTHORISED REPRESENTATIVE OF THE AS SESSEE RELIED ON THE ORDERS OF THE COMMISSIONER OF INCOME TAX (AP PEALS) AND WRITTEN SUBMISSIONS FILED IN THE APPELLATE PROCEEDI NGS. FURTHER FILED BANK STATEMENTS AND COPIES OF POA AND ASSESSMENT OR DER OF MR. ABASS FOR THE ASSESSMENT YEAR 2012-13 WERE THE MR. ABASS HAS DISCLOSED PROFIT ON SALE OF PROPERTY 3,00,000/- AND PRAYED FOR DISMISSING THE APPEAL. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATER IAL ON RECORD AND EVIDENCE FILED. THE ONLY CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE BEING THAT COMMISSIONER OF INCOME TA X (APPEALS) ERRED IN DELETING THE ADDITION WITHOUT PROVIDING AD EQUATE OPPORTUNITY TO THE LD. ASSESSING OFFICER. ON PERUSAL OF THE SUB MISSIONS OF ASSESSMENT AND THE APPELLATE PROCEEDINGS, THE LD. A UTHORISED REPRESENTATIVE PLEADINGS SUBMISSIONS SEEMS TO BE GE NUINE AS THE ASSESSEE IN APPELLATE PROCEEDINGS SUBMITTED INFORMA TION AT PARA 4.4 OF COMMISSIONER OF INCOME TAX (APPEALS) ORDER WHICH AR E READILY ITA NO. 2352/MDS/2015. :- 8 -: AVAILABLE TO THE ASSESSING OFFICER IN THE ASSESSMEN T PROCEEDINGS AND THERE IS NO FRESH EVIDENCE FILED WHICH THE REVENUE HAS DISPUTED. FURTHER, THE DETAILS OF ORIGINAL SELLER WAS PRODUCE D ALONGWITH DOCUMENTARY EVIDENCE AND CONFIRMATION LETTER BEFORE LD. ASSESSING OFFICER. THE LD. AUTHORISED REPRESENTATIVE REFERRE D TO THE COPIES OF PAO IN FAVOUR OF THE ASSESSEE EXECUTED BY MS. R. BH UVANESWARI ON 18.03.2011 AND COPY OF SALE DEED EXECUTED ON 17.11 .2011 REFERRING TO SAID POA AT PAGE 1 OF THE SALE DEED AND ALSO PU RCHASER HAS ISSUED THE PAY ORDER NO.536479, DATED 16.11.2011 FROM CITY UNION BANK LTD, ANNA NAGAR BRANCH AT PAGE NO. 5 OF THE SALE DEED. THE LD. AUTHORISED REPRESENTATIVE DREW OUR ATTENTION TO THE BANK STATE MENT WERE SALE TRANSACTION AMOUNT WAS CREDITED ON 18.11.2011 AND P AY ORDER NUMBER TALLIED WITH INFORMATION OF SALE DEED, WHEN LD. DEP ARTMENTAL REPRESENTATIVE WAS CONTROVERT WITH VALID CONFIRMAT ION THE REVENUE COULD NOT SUBSTANTIATE WITH ANY FURTHER ARGUMENTS . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS PROVIDED T HE LD. ASSESSING OFFICER FORM 51 REFERRED AT PAGE 2 OF COMMISSIONER OF INCOME TAX (APPEALS) ORDER AT PARA 3 AS UNDER:- AGGRIEVED BY THE ABOVE ADDITIONS TO HIS TOTAL INC OME, THE APPELLANT PREFERRED THIS APPEAL. THE INCOME TAX NO N STATUTORY FORM -51 (IN SHORT, ITNS-51) WAS SENT TO THE ASSESSING OFFICER ON 12.10.2015. IN THE ABSENCE OF A RESPONSE, IT IS TAKEN THAT THE ASSESSING OFFICER HA S NOTHING CONTRARY TO REPORT AND DOES NOT WISH TO BE HEARD IN ITA NO. 2352/MDS/2015. :- 9 -: PERSON. THE APPEAL WAS FIXED FOR HEARING BY ISSUAN CE OF ITNS-37 DATED 06.10.2015. SO, CONSIDERING THE APPARENT FACTS, EVIDENCE FORM PART OF ASSESSMENT RECORD AND NO FRESH DOCUMENTS ARE SUBMITTED IN THE APPELLATE PROCEEDINGS, WE ARE OF THE OPINION THAT THE COMMISS IONER OF INCOME TAX (APPEALS) HAS VERIFIED THE CLAIM AND CONSIDERE D THE EXPLANATIONS OF THE ASSESSEE DULY SUPPORTED BY PROVISION OF LAW. THEREFORE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF COMMISS IONER OF INCOME TAX (APPEALS) ORDER AND UPHELD THE SAME. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 27TH DAY OF APR IL, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 1 / DATED: 27 .04.2016 KV 2 ( *',34 54%, / COPY TO: 1 . &' / APPELLANT 3. 6, () / CIT(A) 5. 49: *',' / DR 2. *+&' / RESPONDENT 4. 6, / CIT 6. :;$ < / GF