M Duraivelu (Indl), Walajapet V. ITO Ward-2, Vellore

ITA 264/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7461 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SALAI VARUN ISAI AZHAGAN
• Keywords: Principle of natural justice; Peak credit
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.263 & 264/CHNY/2018 ( / ASSESSMENT YEARS: 2011-12 & 2012-13) SHRI M. DURAIVELU, 50, KOMUTTY STREET, WALAJAPET, VELLORE DIST 632 513 VS THE INCOME TAX OFFICER, WARD 2, VELLORE PAN: AESPD9682H ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NOS.265 & 266/CHNY/2018 ( / ASSESSMENT YEARS: 2011-12 & 2012-13) SHRI M. DURAIVELU (HUF), 50, KOMUTTY STREET, WALAJAPET, VELLORE DIST 632 513 VS THE INCOME TAX OFFICER, WARD 2, VELLORE PAN: AAEHD1433L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI SALAI VARUN ISAI AZHAGAN, ADVOCATE / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT /DATE OF HEARING : 03.07.2018 /DATE OF PRONOUNCEMENT : 09.07.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE APPEALS ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI, 2 ITA NOS.263 TO 267/CHNY/2018 DATED 19.09.2017 PASSED U/S.250(6) R.W.S. 143(3) & 147 OF THE ACT IN RESPECT OF SHRI M. DURAIVELU IN ITA NOS.152/CIT(A)-13/2011-12 & 153/CIT(A)-13/2012-13 FOR THE ASSESSMENT YEARS 2011-12 & 2012- 13 RESPECTIVELY AND IN RESPECT OF SHRI M. DURAIVELU (HUF) IN ITA NOS.143/CIT(A)-13/2011-12 & 145/CIT(A)-13/2012-13 FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY. 2. SINCE THE ISSUES INVOLVED IN ALL THESE APPEALS ARE IDENTICAL FOR THE ASSESSMENT YEARS 2011-12 & 2012-13, THEY ARE TAKEN UP TOGETHER FOR HEARING AND DISPOSED OFF BY THIS COMMON ORDER. 3. THE ASSESSEES HAVE RAISED THE FOLLOWING IDENTICAL GROUNDS IN ALL THEIR APPEALS FOR BOTH THE ASSESSMENT YEARS 2011-12 & 2012- 13:- 1. THE ORDER U/S 148 PASSED BY THE LD AO IS ERRONEOUS, SINCE AS PER THE SAID LETTER THE TOTAL NUMBER OF VEHICLES IN THE NAME OF THE APPELLANT UPTO TO 10/03/2016 BUT AS ON 31/03/11 IT IS 15 VEHICLES ONLY (BOTH INDIVIDUAL & HUF). UNFORTUNATELY, THE LD AO ALSO FAILED TO UNDERSTAND THAT THE NUMBER OF VEHICLES GIVEN BY THE RTO INCLUDES TWO CARS AND MOTOR BIKE AND SOME VEHICLES WHICH WERE SOLD. HE SERVED NOTICE U/S 148 FOR REASSESSMENT BASED ON THE SURMISE THAT SOME INCOME HAS ESCAPED ASSESSMENT. THE CIT(A) HAS FAILED TO CONSIDER THE RECONCILIATION STATEMENT AND OTHER EVIDENCES FILED FOR SOLD VEHICLES. HENCE THE REASSESSEMENT IS BAD IN LAW. 2. THE L'D AO NEITHER FURNISHED A COPY OF THE LETTER OBTAINED FROM RTO NOR GAVE ANY OPPORTUNITY FOR CROSS VERIFICATION OF THE SAME AND HENCE THE APPELLANT DENIED THE OPPORTUNITY OF EXPLAINING HIS CASE WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 3 ITA NOS.263 TO 267/CHNY/2018 3. FURTHER, THE INCOME FROM TRANSPORT OPERATION IS WORKED OUT BASED ON THE NUMBER OF MONTHS AND NUMBER OF LORRIES (@ RS5000/- P.M. PER LORRY) AS PRESCRIBED IN THE SEC 44AE OWNED BY THE ASSESSE. THE L'D AO APPLIED A FLAT RATE OF RS.60000/- P.A. AND MADE ARBITRARY ADDITION OF RS.176000/- ON THIS COUNT WITHOUT CONSIDERING THE FACT THAT SOME VEHICLES WERE PURCHASED IN THE MIDDLE OF THE YEAR AND SOME WERE SOLD. 4. THE APPELLANT SUBMITS THAT THE DEPT HAS INTRODUCED A TWO-PAGE SIMPLIFIED ITR {FORM 4S} CALLED SUGAM DURING THIS YEAR FOR PRESUMPTIVE ASSESSMENT U/S 44AD/44AE WHEREIN THERE WAS NO REQUIREMENT FOR DISCLOSURE OF LIST OF BANK ACCOUNTS BY THE ASSESSEE. ONLY UNDER COLUMN REFUND THERE IS CLAUSE 'ENTER YOUR BANK ACCOUNT NUMBER' FOR THE PURPOSE OF ISSUE OF REFUND. HENCE THE APPELLANT WAS NOT ABLE TO FURNISH THE OTHER BANK ACCOUNTS IN THE RETURN OF INCOME. HENCE, THE ACCUSATION THAT THE APPELLANT HAS NOT DISCLOSED THE OTHER BANK ACCOUNTS IN THE RETURN OF INCOME IS NOT FAIR ON THE PART OF THE ITO TO MAKE AN ADDITION OF RS.256500/- & RS.340000/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY IN RESPECT OF SHRI M. DURAIVELU AND RS.256500/- & RS.256500/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY IN RESPECT OF SHRI M. DURAIVELU (HUF). 5. AS PER THE RULINGS OF VARIOUS HIGH COURTS PARTICULARLY IN CIT VS SURINDER PAL ANAND {2010} 192 TAXMANN 264 {PUNJAB & HARYANA} CASE, IT IS HELD THAT WHEN INCOME IS ESTIMATED U/S 44AE, THE ASSESSEE IS NOT UNDER ANY OBLIGATION TO EXPLAIN THE ENTRIES IN THE BANK ACCOUNT. HENCE THE ADDITION OF RS.256500/- & RS. 340000/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY IN RESPECT OF SHRI M. DURAIVELU AND RS.256500/- & RS.340000/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY IN RESPECT OF SHRI M. DURAIVELU (HUF) MADE BY L'D ITO FOR PEAK CREDIT AND THE UPHOLDING OF THE SAME BY THE CIT(A) IS NOT SUSTAINABLE AND LIABLE TO BE DELETED. 6. THE ITO ALSO FAILED TO CONSIDER THE CASH DEPOSITS MADE IN BANK ACCOUNT ARE TO MEET VEHICLE LOAN EMI. THEREFORE IT IS PRAYED THAT THE VARIOUS ADDITIONS MADE BY THE ITO ARE UNLAWFUL, ARBITRARY AND UNREASONABLE AND THE ADDITION OF RS.356500/- & RS. 516000/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY IN RESPECT OF SHRI M. DURAIVELU AND RS.616500/- & RS.650000/- FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY IN RESPECT OF SHRI M. DURAIVELU (HUF) IS LIABLE TO BE DELETED TO RENDER JUSTICE. 4 ITA NOS.263 TO 267/CHNY/2018 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AND HIS HUF ARE ENGAGED IN THE BUSINESS OF TRANSPORTATION OWNING VEHICLES, ADMITTED INCOME U/S.44AE OF THE ACT FOR BOTH THE ASSESSMENT YEARS 2011-12 & 2012-13. BASED ON CERTAIN INFORMATION GATHERED FROM THE REGIONAL TRANSPORT OFFICE, ALL THE CASES WERE TAKEN UP FOR SCRUTINY AND FINALLY THE ASSESSMENT WAS COMPLETED FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 BY MAKING ADDITIONS TOWARDS UNDISCLOSED INCOME. ON APPEAL THE LD.CIT(A) CONFIRMED THE ADDITIONS MADE BY THE LD.AO. 5. AT THE OUTSET THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSMENT ORDERS WERE PASSED BASED ON CERTAIN INFORMATION GATHERED FROM THE REGIONAL TRANSPORT OFFICE AND A COPY OF THE SAME WAS NOT FURNISHED TO THE ASSESSEE IN ORDER TO DEFEND THEIR CASE. THEREFORE THE ORDER OF THE LD.AO WAS PASSED BEHIND THE BACK OF THE ASSESSEES WITHOUT GIVING AN OPPORTUNITY TO DEFEND THEIR CASE. HENCE IT WAS PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.AO FOR DE-NOVA CONSIDERATION AND ALSO DIRECT THE LD.AO TO FURNISH A COPY OF THE INFORMATION GATHERED FROM THE REGIONAL TRANSPORT AUTHORITY BY THE LD.REVENUE AUTHORITIES TO THE 5 ITA NOS.263 TO 267/CHNY/2018 ASSESSEES IN ORDER TO DEFEND THEIR CASE. THE LD.DR COULD NOT CONTROVERT TO THE SUBMISSION OF THE LD.AR. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT APPEARS THAT THE ASSESSEE WAS NOT PROVIDED WITH THE INFORMATION GATHERED BY THE LD.REVENUE AUTHORITIES FROM THE REGIONAL TRANSPORT AUTHORITIES BASED ON WHICH THE LD.AO HAD MADE ADDITION IN THE HANDS OF THE ASSESSEES WHICH WAS FURTHER CONFIRMED BY THE LD.CIT(A). THIS ACTION OF THE LD.REVENUE AUTHORITIES IS NOT JUSTIFIABLE. WHEN THE LD.REVENUE AUTHORITIES HAD MADE ADDITIONS ON THE BASIS OF THE INFORMATION GATHERED FROM THE REGIONAL TRANSPORT OFFICE A COPY OF THE SAME OUGHT TO HAVE BEEN PROVIDED TO THE ASSESSEES IN ORDER TO DEFEND THEIR CASE. IN THIS SITUATION, WE DO NOT HAVE ANY OPTION BUT TO REMIT BACK THE MATTER TO THE FILE OF LD.AO FOR FRESH CONSIDERATION. ACCORDINGLY WE HEREBY REMIT ALL THE APPEALS OF THE ASSESSEES BACK TO THE FILE OF LD.AO FOR FRESH CONSIDERATION AND FURTHER DIRECT THE LD.AO TO FURNISH A COPY OF THE INFORMATION GATHERED FROM THE REGIONAL TRANSPORT OFFICE TO THE ASSESSEES AND THEREAFTER PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW AFFORDING ENOUGH OPPORTUNITY TO THE ASSESSES OF BEING HEARD. THE ASSESSEES 6 ITA NOS.263 TO 267/CHNY/2018 ARE ALSO HEREBY DIRECTED TO CO-OPERATE WITH THE PROCEEDINGS BEFORE THE LD.REVENUE AUTHORITIES FAILING WHICH THE LD.REVENUE AUTHORITIES SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDERS IN ACCORDANCE WITH MERIT AND LAW BASED ON THE MATERIALS ON RECORD. 7. IN THE RESULT ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 09 TH JULY, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 09 TH JULY, 2018 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF