ACIT, Coimbatore V. T.R.Nataraj Ganesh, Coimbatore

ITA 2539/CHNY/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6084 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Cost of acquisition; Revised return
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I T.A. NO. 2539 /MDS/201 4 / ASSESSMENT YEAR :20 09 - 1 0 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II , COIMBATORE. VS. SHRI T.R. NATARAJ GANESH, NO. 6, APPUSAMY LAYOUT, RED FIELDS, COIMBATORE 641 0 45. [PAN:AIEPN2466R ] ( APPELLANT ) ( RESPONDENT ) / APPELLANT BY : SHRI AR. V. SREENIVASAN, J CIT / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 31 . 0 8 .201 7 / DATE OF P RONOUNCEMENT : 27 .09 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH IS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 , C OIMBATORE DATED 0 9 . 0 7 .201 4 R ELEVANT TO THE ASSESSMENT YEAR 20 09 - 1 0 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF PAYMENT MADE BY THE ASSESSEE TO SHRI DHANABAL (BROTHER - IN - LAW) OF SHRI SHANMU GANATHAN), WHICH WAS TREATED I.T.A. NO. 2539 /M/1 4 2 AS UNSECURED LOAN BY HIM. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 31.07.2009 ADMITTING SHORT TERM CAPITAL GAINS OF .1,81,71,480/ - . A REVISED RETURN OF INCOME WAS ALSO SUBMITTED ON 29.07.2010 ADMITTING TAXABLE INCOME OF .1,85,42,2 59 / - BY INCLUDING THE INTEREST INCOME OF .64,776/ - , WHICH WAS OMITTED TO BE OFFERED IN THE ORIGINAL RETURN. THE RETURN FILED BY THE ASSESSE E WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] AND THE SAME WAS ACCEPTED. 2.1 THE ASSESSEE SHRI NATARAJ GANESH, SHRI T. MURUGESAN, SHRI V. PALANISAMY AND SHRI SHANMUGANATHAN HAD JOINTLY CARRIED OUT REAL ESTATE VENTURE A T KINATHUKADAVU, COIMBATORE. A SURVEY WAS CONDUCTED AND AS PER SURVEY REPORT, SHRI SHANMUGANATHAN, LED THE VENTURE OF PURCHASE AND SALE OF IMMOVABLE PROPERTIES ON HIS OWN BEHALF AND ALSO ON BEHALF OF OTHERS, AS MENTIONED ABOVE. BASED ON THE SURVEY, AN ENQU IRY WAS CONDUCTED FROM SHRI K.K. SA K THIVEL, WHO WAS THE POWER HOLDER FOR THE ASSESSEE SHRI NATARAJ GANESH. THE ASSESSEE HAS PAID A SUM OF .25.52 LAKHS FOR PURCHASE OF 15.24 ACRES AND SOLD THE SAME PROPERTY TO ALMACO PROPERTIES P. LTD. FOR A SUM OF .3,58, 14,000/ - AND OFFERED .1,84,77,483/ - AS SHORT TERM CAPITAL GAIN. THE ASSESSEE HAS TAKEN .1,73,36,517/ - AS THE COST OF ACQUISITION, WHEREAS, HE HAD PAID .25.52 LAKHS ONLY FOR THE PURCHASE OF LAND WHICH SHOULD BE ONLY HIS COST OF ACQUISITION. ON AN ENQUIRY BY THE SURVEY WING, SHRI I.T.A. NO. 2539 /M/1 4 3 SAKTHIVEL HAS DEPOSED ON 03.11.2008 THAT OUT OF TOTAL SALE CONSIDERATION RECEIVED, .1,48,00,000/ - WAS PAID BACK TO SHRI SHANMUGANATHAN AS REQUIRED BY HIM, WHO WAS ENABLED THE VENTURE OF PURCHASE AND SALE OF THE SAID PROPERTY ALON G WITH OTHERS. PENDING COMPLETION OF ASSESSMENT IN THE CASE OF SHRI SHANMUGANATHAN, THE COST OF ACQUISITION SHOULD BE ONLY .25.52 LAKHS INSTEAD OF ASSESSEE S CLAIM OF .1,73,36,517/ - . ACCORDINGLY, THE ASSESSMENT WAS REOPENED AND NOTICE UNDER SECTION 148 O F THE ACT WAS ISSUED TO THE ASSESSEE ON 30.03.2012. NOTICE UNDER SECTION 143(2) OF THE ACT WAS ALSO ISSUED AND SERVED ON THE ASSESSEE. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND VERIFICATION OF DETAILS FILED BY THE ASSESSEE, THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED ASSESSING TOTAL INCOME OF THE ASSESSEE AT .2,63,42,259/ - AFTER MAKING PROTECTIVE ASSESSMENT OF .60,00,000/ - IN THE HANDS OF THE ASSESSEE, WHICH WAS STATED TO HAVE PAID TO SHRI DHANABAL AND .18,00,000/ - WAS ADDED SINCE THE ASSESSEE COULD NOT FILE ANY EVIDENCE HAVING PAID THE SUM TO SHRI SHANMUGA NATHAN. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. BY FILING AN AFFIDAVIT, IT WAS THE SUBMISSION OF THE ASSESSEE THAT THE ABOVE SAID SUM OF .78,00,000/ - WAS ADDED IN THE ASSESSMENT OF SHRI G. SHANMUGANATHAN FOR THE ASSESSMENT YEAR 2009 - 10. AFTER CONSIDERING THE ASSESSMENT ORDER IN THE CASE OF SHRI I.T.A. NO. 2539 /M/1 4 4 SHANMUGANATHAN, THE LD. CIT(A) WAS OF THE OPINION THAT THE AMOUNTS OF .60,00,000/ - AND .18,00,000/ - HAVE BEEN PAID IN CASH WAS ADDED IN THE HANDS OF SHRI SHANMUGANATHAN, HE DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION IN THE HANDS OF THE ASSESSEE. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECOR D AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO PERUSED COPY OF THE ORDER OF THE TRIBUNAL IN I.T.A. NO. 569/MDS/2016 FOR THE ASSESSMENT YEAR 2009 - 10 DATED 04.11.2016 IN THE CASE OF ACIT V. SHRI G. SHANMUGANATHAN. AGAINST THE RECEIPT OF .1.48 CRORES [ .70,00,000 BY DD + .60,00,000 BY DD IN FAVOUR OF SHRI DHANABAL (BROTHER - IN - LAW OF SHRI SHANMUGANATHAN ) + .17,00,000/ - IN CASH] FROM SHRI NATARAJ GANESH, THE ADDITION WAS MADE IN THE HANDS OF SHRI SHANMUGANATHAN. DURING THE COURSE OF APPEL LATE PROCEEDINGS, THE ASSESSEE SHRI SHANMUGANATHAN HAS FILED CERTAIN FRESH MATERIALS, BASED ON WHICH THE LD. CIT(A) HAS DELETED THE ADDITION OF .1.48 CRORES. ON APPEAL BY THE REVENUE, THE TRIBUNAL HAS REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFIC ER FOR FRESH CONSIDERATION. 5.1 IT ALSO EMANATES FROM THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI SHANMUGANATHAN AT PAGE 22 THAT THE ASSESSEE (SHRI SHANMUGANATHAN) I.T.A. NO. 2539 /M/1 4 5 ACKNOWLEDGES THAT SHRI NATARAJ GANESH HAD PAID ONLY .70.00 LAKHS TO THE ASSESSEE [SHRI SHANMUGANATHAN] AND . 60.00 LAKHS TO SHRI DHANAPAL, THE BROTHER - IN - LAW OF SHRI SHANMUGANATHAN AND DENIED RECEIPT OF .17.00 LAKHS IN CASH. SINCE NO CONFIRMATION TOWARDS THE PAYMENT OF .17.00 LAKHS TO SHRI SHANMUGANATHAN IS AVAILABLE WITH THE AUTHORITIES BELOW, THE ADDITION OF .17.00 LAKHS IN THE HANDS OF THE ASSESSEE STANDS CONFIRMED. 5.2 WITH REGARD TO THE PAYMENT OF .60.00 LAKHS THROUGH DD TO SHRI DHANABAL, THE ASSESSING OFFICER HAVING JURISDICTION, SUMMONED TO FILE BALANCE SHEET, BANK STATEMENT, ETC . IN THE BALANCE SHEET SHRI DHANABAL HAS TREATED THE AMOUNT OF .60.00 LAKHS RECEIVED FROM THE ASSESSEE [SHRI NATARAJ GANESH] UNDER THE CATEGORY OF UNSECURED LOAN . AS PER BANK STATEMENT OF BANK OF INDIAN OF SHRI DHANABAL, THE ASSESSING OFFICER NOTICED TH AT THE AMOUNT RECEIVED FROM SHRI NATARAJ GANESH WAS DIVERTED TO M/S. LAKSHMI EXPORTS, BUT THE ASSESSEE HAS NOT FILED ANY DEED OF THE PARTNERSHIP AND OTHER PARTNERS NAME, ETC. SHRI DHANABAL NEITHER PRODUCED ANY EVIDENCE TO SHOW THAT THE SUM PAID WAS TO BE T REATED AS UNSECURED LOAN/LAND PURCHASE ADVANCE NOR SUBMITTED ANY EVIDENCE FOR THE LIABILITY OUTSTANDING STAT US. AS PER THE COMMUNICATION OF THE ASSESSING OFFICER HAVING JURISDICTION OVER SHRI DHANABAL, SHRI DHANABAL HAS NOT DENIED THE RECEIPT OF .60.00 LA KHS FROM THE ASSESSEE AND MOREOVER, HE HAS NOT ACCEPTED THAT THE SAID AMOUNT WAS PAID TOWARDS LAND PURCHASE ADVANCE OR JOINT VENTURE AS CLAIMED I.T.A. NO. 2539 /M/1 4 6 BY POWER AGENT SHRI SHAKTHIVEL AND THE ASSESSEE. IF THE ASSESSEE CLAIMS THAT THE AMOUNT WAS PAID TOWARDS JOINT V ENTURE, THEN, THE SAID AMOUNT HAS TO BE ASSESSED IN THE HANDS OF SHRI DHANABAL AS INCOME OR, IF IT IS TO BE TREATED AS LOAN GIVEN BY THE ASSESSEE, THEN, IT HAS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. HOWEVER, THE ASSESSMENT IN THE CASE OF SHRI DHANABA L IS NOT AVAILABLE ON RECORD TO DECIDE THE ISSUE. WITH THE ABOVE OBSERVATIONS, WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE BOOKS OF ALL THE ASSESSEES AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 27 TH SEPTEMBER , 201 7 AT CHENNAI. SD/ - SD/ - ( ABRAHAM P. GEORGE ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDI CIAL MEMBER CHENNAI, DATED, THE 27 . 0 9 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.