Sri SaiBaba Swamigal Thirumana Mandapam, Pondicherry V. ITO, Pondicherry

ITA 2897/CHNY/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9882 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 25-11-2014
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: T VASUDEVAN
• Keywords: Revised return
• Section: 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , ! ' # , $ %& BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ ITA NOS. 2897 TO 2899/MDS/2014 / ASSESSMENT YEARS : 2007-08 TO 2009-10 SRI SAIBABA SWAMIGAL THIRUMANA MANDAPAM, NO.42, BHARATHI STREET, T.V.NAGAR, PUDUCHERRY-605003. PAN AAVFS4453Q APPELLANT) V. THE INCOME-TAX OFFICER, WARD-I(1), PUDUCHERRY. RESPONDENT) / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE / RESPONDENT BY : SHRI N. MADHAVAN, JCIT ! / DATE OF HEARING : 17.06.2015 '# ! / DATE OF PRONOUNCEMENT : 26.06.2015 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX( APPEALS) - - ITA 2897 TO 2899/14 2 DATED 30.9.2014 FOR THE ASSESSMENT YEARS 2007-08, 2 008-09 AND 2009-10. SINCE, THE ISSUES INVOLVED IN THESE A PPEALS ARE COMMON, THEY ARE CLUBBED TOGETHER, HEARD TOGETHER A ND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. 2. SINCE, THE FACTS ARE SIMILAR IN ALL THE THREE YEARS, WE CONSIDER THE FACTS NARRATED IN THE ASSESSMENT YEAR 2007-08 FOR ADJUDICATION. IN T HE R ETU RN O F I NCOM E FI L E D FO R T H E A . Y . 2 00 7 - 08 O N 31 . 07.2007, THE ASSESSEE HAS A D MI TTE D TA X ABLE I NC O M E OF R S. 8,02 0/- ONLY. A SURVEY ACT I ON U/S. 133A WA S CON DUCTED ON 16. 0 9.2009 . D U RING TH E C OURSE OF SURVEY ACTION, THE SUR V E Y TEAM FOUND A R E G I STER CONTAINING N U M B ER O F MAR R I AG E S A N D OT HE R S M A LL FU NC TI ON S C O NDUCT ED FOR T H E F . Y. 20 06-07 TO 2008- 0 9 A ND S A M E WA S IM POUNDED. THE SUR V E Y TE A M H AS PERUSED THE ENTRIES RECORDED IN T H E R EG I S T E R A ND FO U N D THA T TH E ASSESSEE HAS SUPPRESSED THE R ECEIPTS O N ACCOU NT OF TH E M AR RIAGES CONDUCTED DURING THE THREE FINANCIAL Y EARS. DURI NG THE C OURSE OF S U RVEY A CT I ON, IN RESPONSE TO QUES TION NOS. 6 & 7 OF THE STA TEMENT R ECO R DED O N 1 6.09 . 2009, THE ASSESSEE I N DIC AT ED T HE NO . O F M A R R I AG E S AN D REC EP TIO NS TOOK PLACE IN THE KALYANA M A ND AP A M DUR I NG TH E THREE YEA RS A ND AL SO - - ITA 2897 TO 2899/14 3 INDICATED TH E YEAR WISE RE N TAL CHAR G ES RECE IV ED BY T H E M FO R MARR I AGE AND R ECEPTION FUNCT I ONS. IN RESPO N SE TO THE QUEST IO N NOS. 8, 9 & 10 O F THE STATEMENT RECORDED ON 1 6.09 . 2 009, THE ASSESSEE ADM I TTED TO HAVE RECEIV ED T H E FOLLOWI N G FIGURES OF THE R ECEI P TS ON ACCOU N T O F MA R R IAGE A N D RE CEPTI O N FUNCTIONS A N D ALSO ADMI T TE D THE SUPPRESS ED INCOM E FOR T AX PURP O SES FO R AL L T HE T HREE YE ARS: FINANCIA L YEAR MARR IA GE RECEPT ION GROSS AMOUNT 2006 - 07 16,80,000 3 , 30 ,0 00 20, 1 0,000 2007 - 08 19 , 38,000 3 , 20,000 22,58,000 2008-09 18, 8 0,000 4,32,000 23,12,000 RENTA L I NC O ME SHO W N DIFFERE N CE I N RENTAL A . Y AS P E R T H E RETU R N S OF INCOME AS ADM I TTED AND I N C OM E F I L ED ALSO AS P E R ACCO UNTS 2007 - 08 4,35,0 00 15,75,000 2008 - 09 I 4,42,0 00 1 8 ,16,000 2009-10 4 , 76,000 I 1 8 ,3 6, 000 2.1 THE ASSESSEE ALSO AGREE D TO O F FER T HE DIFFERENCE IN RE N T A L INCOME A S ADMIT T E D AND ALSO AS P E R ACCOU N TS AS UNDISC L OS E D I N COME FO R ALL T HE THREE YEARS I N T H E C OU RS E OF SURVEY ACTIO N I N T HE S W OR N STATE M E N T R E CORD ED B Y THE AO ON 16 . 09.2009 . S UBSEQ UE NTLY, SRI MOH AN AS UNDARAM , MANA G IN G P AR T NER OF THE FIRM A G AIN ATT E ND E D BEF O R E THE AO ON - - ITA 2897 TO 2899/14 4 05.1 0 . 200 9 A ND CO N F IRMED T H E T R ANSACT I ONS IN RESPECT OF NUMBER OF E VE N T S TOO K P L ACE IN TH E KALYANAMANDA P AM DURING A L L THE TH R EE YE A RS AND A L SO ACC E PTED THE SUPPRESSION OF INCOME FOR ALL THE THREE YEARS IN THE COURSE OF THE SWORN STATEMENT RECORDED BY THE AO ON 05.10.2009. THE ASSESSMENT WAS REOPENED U/S.147 OF THE ACT BY WAY O F NOTICE U/S.148. IN RESPONSE TO THE SAME, THE ASSES SEE FILED A REVISED RETURN OF INCOME ON 23.10.2009 RETURNING A LOSS OF ` 10,88,046/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAS FOUND FROM THE REGISTERS IM POUNDED BY THE DEPARTMENT THAT THE NUMBER OF MARRIAGES AND SMALL FUNCTIONS CONDUCTED DURING ALL THE THREE YEARS WAS MUCH HIGHER THAN THE NUMBER OF MARRIAGES AND SMALL FUNCT IONS ADMITTED DURING THE COURSE OF SURVEY ACTION. ACCOR DINGLY, THE AO FOUND THAT THE NUMBER OF MARRIAGES AND SMALL FUN CTIONS TOOK PLACE IN THE MARRIAGE HALL FOR ALL THE THREE Y EARS WAS AS UNDER: A.Y. NO. OF MARRIAGES AND SMALL FUNCTIONS ADMITTED AT THE TIME OF STATEMENT NO. OF MARRIAGES AND SMALL FUNCTIONS AS PER REGISTER MARRIAGES SMALL FUNCTIONS MARRIAGES SMALL FUNCTIONS 2007-08 48 22 50 22 - - ITA 2897 TO 2899/14 5 2008-09 51 20 48 21 2009-10 47 24 52 30 ON NOTICING HIGHER NUMBER OF FUNCTIONS CARRIES OUT IN THE MARRIAGE HALL, THE AO ESTIMATED THE FOLLOWING AMOUN T OF INCOME SUPPRESSED FOR ALL THE THREE YEARS: A.Y. INCOME SHOWN IN THE RETURN OF INCOME GROSS INCOME ESTIMATED SUPPRESSION OF INCOME FOR TAX PURPOSES 2007-08 4,35,000 20,80,000 16,45,000 2008-09 4,42,000 21,60,000 17,18,000 2009-10 4,76,000 26,20,000 21,44,000 2.2 THE AO HAS ACCORDINGLY ADDED AN AMOUNT OF ` 21,44,000/- FOR A.Y. 2009-10, ` . 17,18,000/- FOR A.Y. 2008-09 AND ` 16,45,000/- FOR A.Y. 2007-08 AS UNDISCLOSED INCOME AS THE ASSESSEE COULD NOT FURNISH SATISFACTORY EXPLANATION BEFORE THE AO. THE AO ALSO NOTED THAT THE ASSESSEE HAD NOT PA ID THE ELECTRICITY CHARGES AND SERVICE TAX COLLECTED TO TH E CONCERNED AUTHORITIES AND HENCE, THE APPROPRIATE DEDUCTION WA S ALSO NOT GIVEN BECAUSE OF SUCH EXPENSES IS NOT ALLOWABLE DED UCTION. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE TH E COMMISSION OF INCOME-TAX(APPEALS). - - ITA 2897 TO 2899/14 6 3. ON APPEAL, THE CIT(A) OBSERVED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS BASED ON SWORN STATEME NT RECORDED BY THE AUTHORITY FROM SHRI MOHANASUNDRAM AND BACKED THE REGISTER MAINTAINED BY THE ASSESSEE SHOWING TOTAL N UMBER OF MARRIAGES AND SMALL FUNCTIONS CONDUCTED BY THE ASSE SSEE IN THE FUNCTIONAL HALL. FURTHER, THE ASSESSEE HAS NOT FUR NISHED DETAILS OF SERVICE TAX AND PAYMENT OF ELECTRICITY CHARGES. THEREFORE, THE ADDITION MADE BY THE AO SUSTAINED BY THE CIT(A). A GGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AR SUBMITTED THAT THE ADDITION CANNOT BE MADE SOLELY ON THE BASIS OF SWORN STATEMENT, AS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. S. KHADER KHAN SON (300 ITR 157), WHICH WAS CONFIRMED BY THE SUPRE ME COURT IN THE CASE OF S. KHADER KHAN SON (352 ITR 480) AND ALSO BY THE JUDGMENT REPORTED IN 339 ITR 192. ACCORDING TO HIM, THE REGISTER IMPOUNDED BY THE AUTHORITIES SHOWED ONLY T HE AUSPICIOUS DAYS FOR MARRIAGES AND OTHER SMALL FUNCT IONS IN THESE ASSESSMENT YEARS AND IT CANNOT BE CONSIDERED AS FUN CTIONS CONDUCTED BY THE ASSESSEE IN FUNCTIONAL HALL. HE FURTHER - - ITA 2897 TO 2899/14 7 SUBMITTED THAT ONLY CHARGES FOR FUNCTIONS ARE CONSI DERED, AS STATED BY THE MAIN PARTNER OF THE ASSESSEE-FIRM. 5. THE LD. DR SUPPORTED THE ORDER OF THE CIT(APPEAL S). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THERE WAS A SURVEY UNDER SEC.133A OF TH E ACT, ON 16.9.2009. CONSEQUENT TO SURVEY, ASSESSMENT WAS CO MPLETED CONSIDERING THE ENTRIES IN THE REGISTER SHOWING THE MARRIAGES AND FUNCTIONS CONDUCTED BY THE ASSESSEE AND THE CHARGES WERE CONSIDERED AT ` 35,000/- PER MARRIAGE AND ` 15,000/- PER SMALL FUNCTIONS AND HE ESTIMATED THE GROSS INCOME AND THE REAFTER GIVEN DEDUCTION OF EXPENDITURE. HOWEVER, THERE WAS NO EVIDENCE PRODUCED BY THE ASSESSEE REGARDING THE PAY MENT OF SERVICE TAXES AND ELECTRICITY CHARGES AND THE SAME WAS DISALLOWED BY THE AO. THE LD. AR OF THE ASSESSEE P LEADED BEFORE US THAT THE ASSESSEE COULD FURNISH NECESSARY EVIDENCE IN SUPPORT OF THIS EXPENDITURE. IN OUR OPINION, THE N UMBER OF FUNCTIONS HELD TO BE CONSIDERED AS PER IMPOUNDED RE GISTER AND CHARGES TO BE CONSIDERED AS PER AVAILABLE RECORDS I NCLUDING SWORN STATEMENT RECORDED BY THE AUTHORITY FROM MANA GING PARTNERS. - - ITA 2897 TO 2899/14 8 6.1 THE AVAILABLE RECORDS SHOW THE NUMBER OF FUNCTI ONS HELD IN THE FUNCTIONAL HALL, WHICH IS ALSO SUPPORTED BY SWORN STATEMENT OF PARTNER, IT IS TO BE CONSIDERED AS CORRECT AND A SSESSMENT IS TO BE FRAMED ON THAT BASIS. FURTHER, THE LD. AR SUBMI TTED BEFORE US THAT DEDUCTION TOWARDS PAYMENTS OF ELECTRICITY CHAR GES AND SERVICE TAX TO BE ALLOWED. WHILE COMPUTING THE INC OME OF THE ASSESSEE, ELECTRICITY CHARGES AND SERVICE TAX SAID TO BE COLLECTED FROM THE CUSTOMERS AND THE SAME TO BE PAID TO THE C ONCERNED AUTHORITIES. HOWEVER, THE ASSESSEE HAS NOT PRODUCE D ANY EVIDENCE REGARDING THE PAYMENTS OF ELECTRICITY CHAR GES AND SERVICE TAX MADE TO THE RESPECTIVE DEPARTMENT. THE ASSESSEE HAS ALSO FAILED TO FURNISH THE EVIDENCE IN RESPECT OF PAYMENTS TOWARDS ELECTRICITY CHARGES AND SERVICE TAX BEFORE THE AO AS WELL AS BEFORE THE CIT(A) , EVEN AFTER GIVING ADEQUATE O PPORTUNITY OF HEARING TO THE ASSESSEE. IN OUR OPINION, THE ELECT RICITY CHARGES AND SERVICE TAX COLLECTED FROM THE CUSTOMERS ON SUP PRESSED INCOME HAVE NOT BEEN PAID TO THE CONCERNED AUTHORIT IES. HAD IT BEEN PAID, NOTHING IS PREVENTED THE ASSESSEE TO PRO DUCE THE EVIDENCE. THE LD. COUNSEL FOR THE ASSESSEE MADE A N EMPTY PLEA BEFORE US THAT EVIDENCE IS AVAILABLE IN SUPPOR T OF THE - - ITA 2897 TO 2899/14 9 PAYMENTS TOWARDS ELECTRICITY CHARGES AND SERVICE TA X. HOWEVER, THERE IS NO IOTA OF EVIDENCE PRODUCED BEFORE US SUG GESTING THE PAYMENTS OF THESE CHARGES. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE LOWER AUTHORITIES ARE JUSTIFIE D IN REJECTING THE CLAIM OF THE ASSESSEE REGARDING THESE PAYMENTS. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED FOR ALL THE THREE ASSESSMENT YEARS. ORDER PRONOUNCED ON FRIDAY, THE 2 6 TH OF JUNE, 2015 AT CHENNAI. SD/- SD/- ( $% &'( ) ) ( $ ( * + ) ,-.//.0.12345.65.7.48 ,-.345.699:.5 ;8 ' )< /JUDICIAL MEMBER ! )<=>>9?3@.3@A2BC25 $' /CHENNAI, D) /DATED, THE 26 TH JUNE, 2015. MPO* )E FGHG /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. I8 /CIT(A) 4. I /CIT 5. GJ& K /DR 6. &LM /GF.