Shri Suresh Kumar D. Jain, CHENNAI V. ITO, CHENNAI

ITA 2959/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8099 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 18-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI IRS
• Assessee Lawyers: D ANAND
• Keywords: Unexplained investment; Business income; Income from undisclosed sources

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO. 2959/MDS/2016 / ASSESSMENT YEAR : 2008-2009 SHRI. SURESH KUMAR D. JAIN, NO.6, VEERAPPAN STREET, SOWCARPET, CHENNAI 600 079. [ PAN ADEPJ 9336R] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 6(3) CHENNAI 600 006. ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. D. ANAND, ADVOCATE /RESPONDENT BY : SHRI. ASHISH TRIPATHI, IRS, JCIT. /DATE OF HEARING : 11-01-2017 ! /DATE OF PRONOUNCEMENT : 25-01-2017 % / O R D E R IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVANC E IS THAT A SUM OF @5,00,000/- WAS ADDED UNDER THE HEAD INCOM E FROM BUSINESS. . 2. FACTS APROPOS ARE THAT ASSESSEE A TRADER IN SS RODS AND PIPES HAD FILED RETURN OF INCOME FOR THE IMPUGNED A SSESSMENT YEAR DECLARING AN INCOME OF @1,73,660/- ON 29.09.2009. THERE WAS A ITA NO.2959/MDS/2016. :- 2 -: SURVEY CONDUCTED IN THE PREMISES ONE SMT. LEENA SUR ANA A SHARE SUB-BROKER ON 26.11.2009. IT SEEMS IN THE SAID SUR VEY, IT WAS FOUND THAT ASSESSEE HAD CERTAIN SHARE TRANSACTIONS WITH S MT. LEELA SURANA. RE-ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST AS SESSEE. IN RESPONSE TO NOTICE U/S.148 OF THE INCOME TAX ACT, 1 961 (IN SHORT THE ACT) ASSESSEE REQUESTED THE LD. ASSESSING OFFICER TO TREAT THE RETURN ORIGINALLY FILED AS ONE IN RESPONSE TO SUCH NOTICE. IT SEEMS FROM THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2009-2010, IT WAS FOUND THAT ASSESSEE HAD CLAIMED EXEMPTION FROM LONG TERM CAPITAL GAINS U/S.10(38) OF THE ACT FOR GAINS ARISING OUT O F TRADING OF SHARES OF ONE M/S. USHER AGRO. AS PER LD. ASSESSING OFFICER PURCHASE OF SHARES OF M/S. USHER AGRO HAD NEVER TAKEN PLACE AND CONTRA CT NOTE ISSUED BY SMT. LEENA SURANA WAS BOGUS. AS PER LD. ASSESSING OFFICER THE ACTUAL PURCHASE AND SALE OF SHARES OF M/S. USHER AGRO WAS 11TH AND 12 TH DECEMBER, 2008. 3. EXPLANATION OF THE ASSESSEE WAS SOUGHT. ASSESSEE TH ROUGH HIS REPLY SUBMITTED AS UNDER:- I HAVE PURCHASED 4400 SHARES OF USHER AGRO FROM SMT . LEELA SURANA ON 11.12.2008. THE PURCHASE CONSIDERATION FOR THE ABOVE SHARES WAS PAID BY ME I N CASH OF @5,00,000/- INCLUDING THE COMMISSION AMOUNT AND THE CASH WAS PERSOAALLY HADNER OVER BY ME TO SM T. LEELA SURANA. THIS CASH IS GENERATED FROM MY BUSIN ESS AND IS UNACCOUNTED. THE ENTRIES MADE IN MY BOOKS OF ITA NO.2959/MDS/2016. :- 3 -: ACCOUNTS AND THE CONTRACT NOTES IN RELATION TO THE PURCHASE OF THE ABOVE SHARES MADE DURING THE FINANC IAL YEAR 2007-2008 ARE NOT TRUE AND OR BOGUS. THE ENTI RE CONSIDERATION IN CASH WAS PAID BY ME ONLY IN DECEMB ER, 2008. ON 12 TH DECEMBER, 2008(NEXT DAY OF PURCHASE OF SHARES) THE ABOVE SHARES OF USHER AGRO WAS SOLD BY ME THROUGH MSE FINANCIAL SERVICES LIMITED AND SURAN A CAPITAL MARKET FOR @4,72,225/-. HENCE, I OFFICER T HE AMOUNT OF @5,00,000/- WHICH WAS GIVEN BY ME IN CASH TO SMT. LEELA SURANA AS MY UNACCOUNTED BUSINESS INCOME AND WILL PAY TAX IN A DAY... LD. ASSESSING OFFICER WAS OF THE OPINION THAT A SUM OF @5,00,000/- REPRESENTED UNACCOUNTED INCOME EARNED BY THE ASSESS EE DURING THE FINANCIAL YEAR 2007-08 BEING THE PREVIOUS YEAR RELE VANT TO THE IMPUGNED ASSESSMENT YEAR. HE MADE AN ADDITION OF @5 ,00,000/- AND COMPLETED RE-ASSESSMENT. 4. ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) BUT DID NOT MEET WITH ANY SUCC ESS. 5. NOW BEFORE ME, LD. AUTHORISED REPRESENTATIVE SUBMIT TED THAT ADMITTEDLY PURCHASE CONSIDERATION OF @5,00,000/- WA S PAID BY THE ASSESSEE IN DECEMBER, 2008. WHEN THE PURCHASE CONSI DERATION WAS PAID IN DECEMBER, 2008, THE RELEVANT PREVIOUS YEAR IN WHICH AMOUNT SHOULD HAVE BEEN CONSIDERED FOR TAXATION, AS PER TH E LD. AUTHORISED REPRESENTATIVE WAS PREVIOUS YEAR ENDING 31 ST MARCH, 2009 RELEVANT TO ITA NO.2959/MDS/2016. :- 4 -: ASSESSMENT YEAR 2009-2010. AS PER LD. AUTHORISED RE PRESENTATIVE AMOUNT WAS WRONGLY CONSIDERED IN ASSESSMENT YEAR 20 08-2009. 6. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT INVESTMENT OF @5,00,000/- WAS CASH GENERATED FROM A SSESSEES BUSINESS IN EARLIER YEARS. IT WAS FOR THIS REASON THE ADDITION WAS MADE FOR THE IMPUGNED ASSESSMENT YEAR. ACCORDING T O HIM, THE ADDITION WAS JUSTIFIED. 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. BASIS ON WHICH THE ADDITION HAS BEEN MADE IS THE LETTER DATED 16.12.2009 OF THE ASSESSEE WHICH HAS BEEN REPRODUCED BY ME IN PARA 3 ABOVE. NO DOUBT IT IS MENTIONED HEREIN THAT THE CASH OF @5,00,000/- WAS GENERATED BY THE ASSESSEE FROM ITS BUSINESS AND WAS UNACCOUNTED. HOWEVER, IT IS CLEAR LY STATED THAT THE ENTIRE CONSIDERATION WAS PAID IN CASH IN DECEMBER,2 008. THUS, THE SUM, IF IT WAS CONSIDERED AS UNEXPLAINED INVESTMENT OR UNACCOUNTED INCOME PERTAINED TO PREVIOUS YEAR ENDING 31.03.2009 AND NOT PREVIOUS YEAR ENDING 31.03.2008. THE ADDITION IF AT ALL IT C OULD HAVE BEEN MADE WAS FOR ASSESSMENT YEAR 2009-2010 AND NOT ASSESSMEN T YEAR 2008- 2009. INCOME DID NOT PERTAIN TO THE IMPUGNED ASSESS MENT YEAR. THE ITA NO.2959/MDS/2016. :- 5 -: ADDITION OF @5,00,000/- THEREFORE STANDS DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON WEDNESDAY, THE 25TH JANUARY, 20 17, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 25TH JANUARY, 2017 KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF