ACIT, CHENNAI V. Shri N. Palanisamy, CHENNAI

ITA 2952/CHNY/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7353 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 17-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.2951 & 2952/CHNY/2016 ( )( / ASSESSMENT YEAR : 2012-13 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 3(3), CHENNAI - 600 034. V. SHRI N. PALANISAMY, NO.86, CATHEDRAL ROAD, GOPALAPURAM, CHENNAI - 600 086. PAN : ADOPP 9910 F (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SMT. RUBY GEORGE, CIT -.+, / 0 / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE MS. SUSHMA HARINI. A, ADVOCATE 1 / 2% / DATE OF HEARING : 03.07.2018 3') / 2% / DATE OF PRONOUNCEMENT : 17.07.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE REVENUE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 19, CHENNAI, FOR THE ASSESSMENT YEAR 2012-13. WHIL E I.T.A. NO.2951/CHNY/2016 IS AGAINST THE QUANTUM ADDITION M ADE BY THE ASSESSING OFFICER, I.T.A. NO.2952/CHNY/2016 IS DIRE CTED AGAINST THE 2 I.T.A. NOS.2951 & 2952/CHNY/16 PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). W E HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. LETS FIRST TAKE THE APPEAL OF THE REVENUE IN I. T.A. NO.2951/CHNY/2016. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS COND ONATION OF DELAY OF 172 DAYS IN FILING THE APPEAL BEFORE THE C IT(APPEALS). 4. WE HEARD SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENTATIVE AND MS. SUSHMA HARINI, THE LD.COUNSE L FOR THE ASSESSEE. THE CIT(APPEALS), AFTER CONSIDERING THE CASE OF THE ASSESSEE, IN EXERCISE OF HIS JUDICIAL DISCRETION, C ONDONED THE DELAY OF 172 DAYS IN FILING THE APPEAL BEFORE HIM. THIS TRIBUNAL DO NOT FIND ANY PECULIAR CIRCUMSTANCES TO INTERFERE WITH THE JU DICIAL DISCRETION EXERCISED BY THE CIT(APPEALS). THEREFORE, THE ORDE R OF THE CIT(APPEALS) IN CONDONING THE DELAY OF 172 DAYS IN FILING THE APPEAL BEFORE HIM IS CONFIRMED. 5. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF 3,40,662/- MADE UNDER SECTION 69A OF THE ACT. 3 I.T.A. NOS.2951 & 2952/CHNY/16 6. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THERE WAS A SEARCH IN THE PREMISES O F THE ASSESSEES DAUGHTER SMT. DIVYA LAKSHMI AND IN THE BUSINESS PRE MISES OF M/S EASTCO EXIM PVT. LTD. ON 06.12.2012. DURING THE CO URSE OF SEARCH OPERATION, ACCORDING TO THE LD. D.R., THE REVENUE A UTHORITIES FOUND 28374.650 GMS OF GOLD JEWELLERY. THE ASSESSEE FILE D WEALTH-TAX RETURN BEFORE THE DATE OF SEARCH DISCLOSING GOLD JE WELLERY TO THE EXTENT OF 25,868.276 GMS. ACCORDING TO THE LD. D.R ., THE ASSESSEE CLAIMED THAT HE HAS PURCHASED GOLD JEWELLERY FROM 0 1.04.2011 TO 06.12.2012 TO THE EXTENT OF 2367.408 GMS. THE EXCE SS JEWELLERY WAS 138.960 GMS. ACCORDING TO THE LD. D.R., THE UN EXPLAINED INVESTMENT IN EXCESS JEWELLERY OF 138.960 GMS WAS A DDED TO THE EXTENT OF 3,40,662/-. 7. THE NEXT GROUND WAS ADDITION OF 60,00,200/- MADE UNDER SECTION 69A OF THE ACT. 8. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE FILED WEALTH-TAX RETURN FOR THE ASSESSMENT YEAR 2011-12 M UCH BEFORE THE DATE OF SEARCH, DISCLOSING 1217.279 CTS OF DIAMOND. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS SHOWN PURCHASE DURIN G THE YEAR 4 I.T.A. NOS.2951 & 2952/CHNY/16 UNDER CONSIDERATION. THE ASSESSING OFFICER FOUND T HE EXCESS DIAMOND TO THE EXTENT OF 144.611 CTS. THE SAME WAS VALUED AT 60,00,200/- AND ADDITION WAS MADE UNDER SECTION 69A OF THE ACT. MOREOVER, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS ALSO MADE AN ADDITION OF 12,00,000/- ON UNCUT DIAMONDS OF 150.000 CTS. ACCORDING TO THE LD. D.R., THE ASSESSEE CLAIM ED THAT THE UNCUT DIAMONDS WERE PURCHASED AFTER 31.03.2011. HOWEVER, NO BILLS AND PURCHASE INVOICES WERE PRODUCED. THEREFORE, ACCOR DING TO THE LD. D.R., THE VALUE OF UNCUT DIAMONDS OF 150.00 CTS WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON A QUERY FROM THE BENCH WHAT IS THE TOTAL INCOME RETURNED BY THE ASSESSEE DURING TH E YEAR UNDER CONSIDERATION? THE LD. D.R. VERY FAIRLY SUBMITTED THAT THE ASSESSEE HAS RETURNED 10,54,33,100/-. IT IS ALSO AN ADMITTED FACT THAT A SUM OF 4 CRORES WAS FOUND DURING THE COURSE OF SEARCH OPER ATION AND THE SAME WAS SEIZED. ACCORDING TO THE LD. D.R., TH E ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT OUT OF CA SH WITHDRAWAL OF 4.96 CRORES, A SUM OF 72 LAKHS AND ODD WAS USED IN THE INVESTMENT IN THE GOLD JEWELLERY AND DIAMONDS. ACC ORDING TO THE LD. D.R., IN THE ABSENCE OF ANY MATERIAL TO SUBSTANTIAT E THE SO-CALLED INVESTMENT FROM CASH WITHDRAWAL, THE CIT(APPEALS) I S NOT JUSTIFIED IN DELETING THE ADDITION. 5 I.T.A. NOS.2951 & 2952/CHNY/16 9. WE HEARD MS. SUSHMA HARINI, THE LD.COUNSEL FOR T HE ASSESSEE ALSO. ADMITTEDLY, THE ASSESSING OFFICER M ADE THREE ADDITIONS WITH REGARD TO UNEXPLAINED INVESTMENT IN JEWELLERY AND DIAMONDS. THE FIRST ADDITION WAS 3,40,662/-, THE SECOND ADDITION WAS 60,00,200/- AND THE THIRD ADDITION WAS 12,00,000/-. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS RETURNED A TOTAL I NCOME OF 10,54,33,100/-. THE REVENUE AUTHORITIES FOUND 4 CRORES AS HOT CASH DURING THE COURSE OF SEARCH OPERATION. THE AS SESSEE CLAIMED THAT A SUM OF 4.96 CRORES WAS WITHDRAWN FROM BANK FROM 12.01.2011 TO 03.10.2011, OUT OF WHICH 4 CRORES WAS REMAINING WITH THE ASSESSEES DAUGHTER AND A PART OF AMOUNT W AS USED IN THE INVESTMENT IN GOLD AND DIAMONDS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE WAS HAVING TAXABLE I NCOME OF 10,54,33,100/-, INVESTMENT IN GOLD JEWELLERY TO THE EXTENT OF 3,40,662/- AND IN DIAMONDS TO THE EXTENT OF 60,00,200/- AND IN UNCUT DIAMONDS TO THE EXTENT OF 12,00,000/- MIGHT HAVE BEEN POSSIBLE FROM THE TAXABLE INCOME. IT ALSO CANNOT B E RULED OUT THAT OUT OF 4.96 CRORES WITHDRAWN FROM BANK, THE ASSESSEE COULD ALSO INVEST IN THOSE FUNDS. AFTER CONSIDERING THE TOTAL INCOME TO THE EXTENT OF 10,54,33,100/-, THIS TRIBUNAL IS OF THE CONSIDERED OPINION 6 I.T.A. NOS.2951 & 2952/CHNY/16 THAT THE CIT(APPEALS) HAS RIGHTLY DELETED THE ADDIT ION. ACCORDINGLY, THE SAME IS CONFIRMED. 10. NOW COMING TO PENALTY APPEAL IN I.T.A. NO.2952/ CHNY/2016, THE PENALTY WAS LEVIED UNDER SECTION 271(1)(C) OF T HE ACT IN RESPECT OF THE ABOVE THREE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE GOLD JEWELLERY, DIAMONDS AND UNCUT DIAMONDS. SINCE THE ADDITIONS WERE DELETED BY THE CIT(APPEALS), WHICH WAS CONFIRM ED BY THIS TRIBUNAL IN THE EARLIER PART OF THIS ORDER, THE CIT (APPEALS) HAS RIGHTLY DELETED THE PENALTY. THEREFORE, THIS TRIBUNAL DO N OT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. ORDER PRONOUNCED ON 17 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 17 TH JULY, 2018. KRI. 7 I.T.A. NOS.2951 & 2952/CHNY/16 / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-19, CHENNAI-34 4. PRINCIPAL CIT, CENTRAL-1, CHENNAI. 5. 7: -2 /DR 6. ;( < /GF.