B.Surendra Reddy, CHENNAI V. ACIT Central Circle 3(1), CHENNAI

ITA 2764/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7903 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 17-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Salary income; Onus to prove
• Section: 143(3); 133A

Judgement Text

, () , IN THE INCOME TAX APPELLATE TRIBUNAL , B (SM C) BENCH, CHENNAI . , ! # $ # % . &' , ( ! ) BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.2764/CHNY/2017 ( / ASSESSMENT YEAR: 2009-10) SHRI B. SURENDRA REDDY, NO.22/15, AVVAYAR STREET, RAJARAM MEHTA NAGAR, CHENNAI 600 029. VS THE ACIT, CENTRAL CIRCLE 3(1), CHENNAI. PAN:AAIPR7169J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI B. RAMAKRISHNAN, CA / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT /DATE OF HEARING : 16.07.2018 /DATE OF PRONOUNCEMENT : 18.09.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS)-19, CHENNAI, DATED 27.10.2017 IN ITA NO.19/16-17 FOR TH E ASSESSMENT YEAR 2009-10 PASSED U/S. 250(6) R.W.S. 143(3) OF TH E ACT. 2. THE ASSESSEE HAS RAISED FOUR GROUNDS IN HIS AP PEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERR ED IN CONFIRMING THE 2 ITA NO.2764/CHNY/2017 ADDITION MADE BY THE LD.AO AMOUNTING TO RS.25,00,00 0/- TOWARDS UNDISCLOSED INCOME. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL EARNING INCOME FROM SALARY, HOUSE PROPERTY AND OTHE R SOURCES. CONSEQUENT TO SEARCH IN THE CASE OF M/S. APOLLO GRO UP ON 05.01.2016, THE ASSESSEES CASE WAS REOPENED U/S.14 8 OF THE ACT. IN RESPONSE TO NOTICE U/S.148 OF THE ACT, THE ASSESSEE FILED A LETTER ON 01.06.2016, STATING THAT THE RETURN U/S.139 OF THE ACT MAY BE TREATED AS RETURN IN RESPONSE TO THE NOTICE U/S.148 OF THE ACT. 4. DURING THE COURSE OF SEARCH ACTION U/S.132 OF TH E ACT AT THE ASSESSEES PREMISES ON 6.01.2016, A STATEMENT U/S.1 32(4) OF THE ACT WAS RECORDED WHEREIN THE ASSESSEE ADMITTED THAT HE HAD PAID AN AMOUNT OF RS.25 LAKHS FOR HIS SONS ADMISSION TO A PROFESSIONAL COURSE DURING THE MONTH OF JUNE 2008 FROM HIS UNACC OUNTED EARNING. BASED ON THE SWORN STATEMENT, THE LD.AO MADE AN ADD ITION OF RS.25 LAKHS IN THE HANDS OF THE ASSESSEE. ON APPEAL THE L D.CIT(A) CONFIRMED THE ORDER OF LD.AO BY RELYING ON THE DECI SION OF THE FOLLOWING HIGHER JUDICIARY:- PULLONGODE RUBBER PRODUCE CO LID VS. STATE OF KERA LA (1973) 91 TTR 18 (SC) - AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF E VIDENCE BUT IT CANNOT BE SAID 3 ITA NO.2764/CHNY/2017 THAT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE W HO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. NAGUBAI AMMAL VS. B SHARMA RAO AIR 1956 SC 100 A N ADMISSION IS NOT CONCLUSIVE AS TO THE TRUTH OF THE MATTERS STATED TH ERE-IN. IT IS ONLY A PIECE OF EVIDENCE, THE WEIGH TO BE ATTACHED TO WHICH MUST DE PEND ON THE CIRCUMSTANCES UNDER WHICH IT IS MADE. IT CAN BE SHOWN TO BE ERRON EOUS OR UNTRUE.' SARWAN SINGH RATTAN SINGH VS. STATE OF PUNJAB (1957 ) SC 637 IN LAW IT IS ALWAYS OPEN TO THE COURT TO CONVICT AN ACCUSED ON I TS CONFESSION ITSELF THOUGH HE HAS RETRACTED IT AT A LATER STAGE. NEVERTHELESS USU ALLY COURTS REQUIRE SOME CORROBORATION TO THE CONFESSIONAL STATEMENT BEFORE CONVICTING AN ACCUSED PERSON ON SUCH A STATEMENT. WHAT AMOUNT OF CORROBORATION W OULD BE NECESSARY IN SUCH A CASE WOULD ALWAYS BE A QUESTION OF FACT TO BE DET ERMINED IN THE LIGHT OF THE CIRCUMSTANCES IN HIS CASE. NARAYAN BHAGWANTRAO GOSAVI BALAJIWALE VS. GOPAL VIN AYAK GOSAVI AIR 1960 SC 100 AN ADMISSION IS THE BEST EVIDENCE THAN AN OPPOSITE CAN RELY UPON AND THOUGH NOT CONCLUSIVE COULD BE DECISIVE OF THE MATT ER, UNLESS SUCCESSFULLY WITHDRAWN OR PROVED ERRONEOUS. AVADH KISHORE DASS VS. RAM GOPAI AIR 1979 SC 861 ADMISSION EVIDENTIARY ADMISSIONS ARE NOT CONCLUSIVE PROOF O F THE FACTS ADMITTED AND MAY BE EXPLAINED OR SHOWN TO BE WRONG; BUT THEY DO RAISE AN ESTOPPELS AND SHIFT THE BURDEN OF PROOF ON TO THE PERSON MAKING THEM OR HIS REPRESENTATIVE IN INTEREST. UNLESS SHOWN OR EXPLAINED TO BE WRONG, TH EY ARE EFFICACIOUS PROOF OF THE FACTS ADMITTED. 5. BEFORE US THE LD.AR VEHEMENTLY ARGUED BY STATING THAT THE ADMISSION WAS MADE BY THE ASSESSEE OUT OF DURESS AN D COERCION AND NOT BASED ON ANY MATERIALS HAVING EVIDENTIAL VALUE. HE THEREFORE PLEADED THAT THE ADDITION MADE BY THE LD.AO MAY BE DELETED. THE LD.AR FURTHER RELIED ON VARIOUS CASE LAWS MORE SO I N THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE C IT VS. S. KHADER KHAN SONS REPORTED IN 300 ITR 157 WHICH WAS SUBSEQU ENTLY 4 ITA NO.2764/CHNY/2017 CONFIRMED BY THE HONBLE APEX COURT. THE LD.DR ON T HE OTHER HAND RELIED ON THE ORDERS OF THE LD.REVENUE AUTHORITIES AND ARGUED IN SUPPORT OF THE SAME. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE LD.REVENUE AUTHORITIES HAD MADE ADDITION OF RS.25 L AKHS IN THE HANDS OF THE ASSESSEE ONLY BASED ON HIS ADMISSION. WE FAIL TO UNDERSTAND AS TO WHY THE ASSESSEE HAS ADMITTED RS.2 5 LAKHS AS AMOUNT PAID TO HIS SONS ADMISSION FROM HIS UNDISCL OSED INCOME WHEN THERE WERE NO MATERIALS TO SUGGEST THE SAME. T HE LD.REVENUE AUTHORITIES HAS ALSO NOT GATHERED ANY EVIDENCE TO S UBSTANTIATE THE ADMISSION OF THE ASSESSEE. FURTHER IT IS EVIDENT TH AT THE LD.CIT(A) HAS RELIED ON VARIOUS DECISION OF HIGHER JUDICIARIE S WHEREIN IT WAS CATEGORICALLY HELD THAT AN ADMISSION IS NOT A CONCL USIVE EVIDENCE AND SOME COLLABORATIVE EVIDENCE IS FURTHER REQUIRED TO PIN THE ASSESSEE ON THE CONFESSION. IN THE CASE OF THE ASSESSEE THER E IS NO CORROBORATIVE EVIDENCE OR ANY MATERIAL TO SUGGEST T HAT THE ASSESSEE HAD PAID RS.25 LAKHS OUT OF HIS UNDISCLOSED INCOME TO SECURE ADMISSION FOR HIS SON IN A PROFESSIONAL COLLEGE. IN THIS SITUATION, THE DECISION RELIED BY THE LD.AR IS MORE APPROPRIATE. T HE HONBLE 5 ITA NO.2764/CHNY/2017 JURISDICTIONAL MADRAS HIGH COURT IN THE CASE CIT VS . S. KHADER KHAN SON CITED SUPRA, IT WAS HELD THAT AN ADMISSION IS AN EXTREMELY AN IMPORTANT PIECE O F EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PE RSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. THE WORD 'MAY' USED IN SECTION 133A(3)(III) OF THE ACT, VIZ., ' RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THIS ACT', MAKES IT CLEAR THAT THE MATERIALS COLLECTED AND THE STATEMENT RECORDED DURING THE SURVEY UNDER SECTION 133A ARE N OT CONCLUSIVE PIECE OF EVIDENCE BY THEMSELVES. THE STATEMENT OBTAINED UNDE R SECTION 133A WOULD NOT AUTOMATICALLY BIND UPON THE ASSESSEE. SECTION 133A DOES NOT EMPOWER ANY ITO TO EXAMINE AN Y PERSON ON OATH. IN CONTRADISTINCTION TO THE POWER UNDER SECTION 133A, SECTION 132(4) ENABLES THE AUTHORIZED OFFICER TO EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION CAN ALSO BE USED IN EVIDENCE UNDER THE INCOME- TAX ACT. ON THE OTHER HAND, WHATEVER STATEMENT IS R ECORDED UNDER SECTION 133A IS NOT GIVEN AN EVIDENTIARY VALUE. THE STATEMENT OB TAINED UNDER SECTION 133A WOULD NOT AUTOMATICALLY BIND UPON THE ASSESSEE. FURTHER THE HONBLE APEX COURT IN THE ABOVE CASE HA S DISMISSED THE APPEAL FILED BY THE REVENUE IN CIVIL APPEAL NO.1322 4 OF 2008 & 6747 OF 2012 VIDE ORDER DATED 20 TH SEPT, 2012 REPORTED IN 25 TAXMANN.COM 413 (SC). RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE APEX COUR T AND CONSIDERING THE FACTS OF THE CASE OF THE ASSESSEE, WE HEREBY HO LD THAT IN THE CASE OF THE ASSESSEE, ADDITION CANNOT BE SUSTAINED BECAU SE THERE ARE NO MATERIAL EVIDENCE OR ANY CORROBORATIVE EVIDENCE TO SHOW THAT THE ASSESSEE HAD PAID A SUM OF RS.25 LAKHS TO SECURE HI S SONS ADMISSION TO PROFESSIONAL COURSE FROM HIS UNDISCLOSED INCOME. ACCORDINGLY WE 6 ITA NO.2764/CHNY/2017 HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.25 LAKHS IN THE HANDS OF THE ASSESS EE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THE 18 TH SEPTEMBER, 2018 AT CHENNAI. SD/- SD/- ( # $ # % . &' ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # $% /JUDICIAL MEMBER $% / ACCOUNTANT MEMBER &# /CHENNAI, '$ /DATED 18 TH SEPTEMBER, 2018 RSR $ )* +* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. . ( )/CIT(A) 4. . /CIT 5. */0 1 /DR 6. 02 /GF