R. Rajaram, Trichy V. ITO, Trichy

ITA 3093/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6309 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 29-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Keywords: Unexplained investment; Principle of natural justice; Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , # , ' ( BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.3093/MDS/2016 '# # /ASSESSMENT YEAR: 2008-09 SHRI R.RAJARAM, NO.D-77, 7 TH CROSS, THILLAINAGAR, TRICHIRAPALLI-620 018. VS. THE INCOME TAX OFFICER, WARD III(1), TRICHIRAPALLI-620 001. [PAN: AAGPR 1084 D ] ( * /APPELLANT) ( +,* /RESPONDENT) * - / APPELLANT BY : NONE +,* - /RESPONDENT BY : MS.S.VIJAYA PRABHA - /DATE OF HEARING : 29.08.2017 - /DATE OF PRONOUNCEMENT : 29.08.2017 / O R D E R PER SANJAY ARORA, ACCOUNTANT MEMBER : ITA NO.3093/MDS/2016 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2 , TIRUCHIRAPPALLI, IN ITA NO.36/2014-15/CIT(A-2)/TRY DATED 31.08.2016 FOR THE AY 2008-09. 2. MS.S.VIJAYA PRABHA REPRESENTED ON BEHALF OF THE REVENUE AND ADJOURNMENT LETTER WAS FILED ON BEHALF OF THE ASSES SEE. ITA NO.3093/MDS/2016 :- 2 -: 3. IN THE REQUEST FOR THE ADJOURNMENT, LD.COUNSEL F OR THE ASSESSEE HAS SOUGHT FURTHER TIME FOR COLLECTING ADDITIONAL INFOR MATION/DETAILS FROM THE INSTRUCTING CHARTERED ACCOUNTANTS TO SUPPORT THEIR STAND. THE APPEAL HAS BEEN FILED BY THE ASSESSEE ON 04.11.2016. IT WAS I NITIALLY POSTED ON 22.12.2016. ON 22.12.2016, ADJOURNMENT WAS SOUGHT FOR THE REASON THAT THE COUNSEL WAS IN THE PROCESS OF COLLECTING ADDITI ONAL INFORMATION/DETAILS FROM THE INSTRUCTING CHARTERED ACCOUNTANTS TO SUPPO RT THEIR STAND. THE APPEAL WAS ADJOURNED TO 26.12.2016, ON WHICH DATE A LSO, ADJOURNMENT WAS SOUGHT FOR THE SAME REASON. THE APPEAL WAS ADJ OURNED TO 29.12.2016 AND AGAIN ADJOURNMENT WAS SOUGHT FOR THE SAME REASON. THE APPEAL WAS ADJOURNED TO 22.02.2017, ON WHICH DATE A LSO, ADJOURNMENT WAS SOUGHT BY THE ASSESSEE. APPEAL WAS ADJOURNED T O 15.02.2017. THE APPEAL WAS SUBSEQUENTLY POSTED TO CAMP BENCH SITTIN G AT MADURAI, ON WHICH DATE ALSO, ADJOURNMENT WAS SOUGHT BY THE ASSE SSEE TO 16.02.2017. ON 16.02.2017, ADJOURNMENT WAS SOUGHT AGAIN TO 03.0 5.2017. ON 03.05.2017 ADJOURNMENT WAS SOUGHT FOR THE SAME REAS ON AGAIN TO 29.06.2017. ON 29.06.2017 ON ACCOUNT OF PERSONAL I NCONVENIENCE OF THE LD.AR, THE APPEAL WAS ADJOURNED TO 29.08.2017 AND T ODAY I.E. ON 29.08.2017 ADJOURNMENT IS BEING SOUGHT AGAIN. AS T HE ASSESSEE IS CONTINUOUSLY SEEKS ADJOURNMENT AND IS DOING NOTHING TO PROSECUTE HIS APPEAL, THE ADJOURNMENT APPLICATION FILED BY THE AS SESSEE IS REJECTED IN SO FAR AS RIGHT FROM 22.12.2016 TILL DATE, THE ADJOURN MENTS HAVE BEEN SOUGHT ONLY FOR COLLECTING ADDITIONAL INFORMATION/DETAILS FROM THE INSTRUCTING CHARTERED ACCOUNTANTS TO SUPPORT THEIR STAND AND NO OTHER REASON IS ITA NO.3093/MDS/2016 :- 3 -: SOUGHT. WHAT IS THE ADDITIONAL INFORMATION? WHAT I S THE DETAILS THAT ARE BEING CALLED FOR? WHAT IS THE DIFFICULTY, NOTHING I S EXPLAINED? CONSEQUENTLY, THE ADJOURNMENT APPLICATION FILED BY THE ASSESSEE STANDS REJECTED AND THE APPEAL DISPOSED OFF ON MERITS. 4. HERE IT WILL BE WORTHWHILE TO MENTION THAT WHEN THE COUNSEL SHRI S.SRIDHAR, ADVOCATE, WAS INFORMED ABOUT THE REJECTI ON OF THE ADJOURNMENT APPLICATIONS, HE SUBMITTED THAT HE HAD NO OBJECTION , IF THE APPEAL WAS DECIDED EX-PARTE AND THOUGH PRESENT IN THE COURT RE FUSED TO PARTAKE IN THE PROCEEDINGS AND ASSIST THE COURT IN RENDERING J USTICE. IT WAS SUBMITTED BY THE LD.DR THAT READING OF THE GROUNDS OF THE APPEAL FILED BY THE ASSESSEE SHOWS THAT THEY ARE CHALLENGING TWO IS SUES. ONE BEING AN ADDITION OF RS.51.00 LAKHS TREATED AS INCOME OF THE ASSESSEE WHICH WAS AN UNACCOUNTED LOAN GIVEN BY THE ASSESSEE TO THIRD PAR TY AND THE SECOND ISSUE WAS AN ADDITION OF RS.6.00 LAKHS REPRESENTING UNEXPLAINED INVESTMENTS. IT WAS A SUBMISSION THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME DECLARING REAL ESTATE BROKERAGE AND ADMITTED RENTAL INCOME. IT WAS A SUBMISSION THAT INFORMATION HAD BEEN RECEIVED BY THE AO THAT DURING THE RELEVANT ASSESSMENT YEAR THE ASSESSEE AL ONG WITH HIS WIFE PURCHASED A VACANT SITE AT KK NAGAR, TRICHY FOR AN AMOUNT OF RS.6.00 LAKHS. THIS INFORMATION WAS ON THE BASIS OF DOCUME NTS FOUND AT THE TIME OF SURVEY U/S.133A IN THE CASE OF ONE SHRI T.K.VENK ATESAN, PROPRIETOR, M/S.MURUGAN BUILDERS. IN THE DAY BOOK OF SHRI T.K. VENKATESAN, THERE WAS ALSO DEBIT ENTRY UNDER THE NAME OF SHRI AYYA RR T O THE TUNE OF RS.51.00 ITA NO.3093/MDS/2016 :- 4 -: LAKHS. IN THE STATEMENT RECORDED U/S.131 FROM SHRI T.K.VENKATESAN, HE STATED THAT HE HAS RECEIVED THE SAID SUM FROM ONE S HRI R.RAJARAMAN, WHO IS THE OWNER OF THE LAND UPON WHICH LEELA AVENUE W AS CONSTRUCTED. THE ASSESSEE ALSO DENIED HAVING PAID ANY MONEY TO SHRI T.K.VENKATESAN. HOWEVER, HE ADMITTED THAT HE HAD PURCHASED A LAND F OR RS.6.00 LAKHS FROM ONE SHRI R.RAJARAMAN AND HAD HANDED OVER THE V ACANT SITE TO SHRI T.K.VENKATESAN FOR CONSTRUCTION OF RESIDENTIAL HOUS ES BY CONVERTING THE LAND INTO PLOTS. TO THIS EXTENT, THE ASSESSEE SEEMS TO HAVE SUBMITTED A WRITTEN LETTER GIVEN BY SHRI T.K.VENKATESAN. HE WAS ASKED TO PRODUCE THE SAID SHRI T.K.VENKATESAN TO SUBSTANTIATE HIS STAND, BUT THE ASSESSEE DID NOT PRODUCE SHRI T.K.VENKATESAN. IT WAS A SUBMISSI ON THAT CONSEQUENTLY, AS THE ASSESSEE WAS UNABLE TO PRODUCE THE SAID SHRI T.K.VENKATESAN, THE SAME WAS ADDED AS INCOME OF THE ASSESSEE. IT WAS A SUBMISSION THAT IN REGARD TO SOURCE OF RS.6.00 LAKHS FOR THE PURCHASE OF THE PLOT OF LAND ALSO, THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE SAME AN D CONSEQUENTLY THE ADDITION ON ACCOUNT OF THE COST OF THE LAND ALONG W ITH THE STAMP DUTY WAS TREATED AS UNEXPLAINED INVESTMENT AND ADDED U/S.69. IT WAS A SUBMISSION THAT THE ASSESSEE HAVING BEEN UNABLE TO PROVE THE S OURCE OF HIS UNEXPLAINED INVESTMENTS, THE SAME HAD RIGHTLY BEEN TREATED AS UNDISCLOSED INCOME. IT WAS A FURTHER SUBMISSION TH AT DISCREET ENQUIRY BY THE AO ALSO REVEALED THAT THE ASSESSEE WAS DOING MO NEY LENDING BUSINESS BUT NOT DISCLOSING HIS INCOME FROM THE SAME. IT WA S A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE UPHELD. ITA NO.3093/MDS/2016 :- 5 -: 5. WE HAVE CONSIDERED THE SUBMISSIONS. A PERUSAL O F THE ASSESSMENT ORDER SHOWS THAT THE AO HAD OBTAINED THE STATEMENT RECORDED FROM SHRI T.K.VENKATESAN. IT HAS ALSO NOTICED THAT THE SAME HAS BEEN PUT TO THE ASSESSEE FOR HIS COUNTER AND THE ASSESSEES STATEME NTS ARE ALSO RECORDED. SHRI T.K.VENKATESAN SEEMS TO HAVE SPECIFIED THAT HE HAS BEEN RECEIVED THE AMOUNT OF RS.51.00 LAKHS FROM SHRI R.RAJARAMAN, WHO IS THE OWNER OF THE LAND UPON WHICH LEELA AVENUE WAS CONSTRUCTED. THE ASSESSEE HAS ADMITTED THAT HE HAS SOLD PLOTS AT LEELA AVENUE AND THAT HE HAS DEALT WITH SHRI T.K.VENKATESAN. HE ALSO ADMITS THAT HE HAS HAN DED OVER THE VACANT SITE TO SHRI T.K.VENKATESAN FOR CONSTRUCTION PURPOS E. IT IS A CONSTRUCTION ACCOUNT THAT HAS BEEN FOUND IN THE HANDS OF M/S.MUR UGAN BUILDERS. PRIMA-FACIE, THE INDICATION IS THAT THE ASSESSEE HA S GIVEN THE AMOUNT OF RS.51.00 LAKHS TO SHRI T.K.VENKATESAN, BUT WHEN THE SAME WAS PAID? HOW IT WAS PAID? FOR WHAT PURPOSE IT WAS PAID? WHETHER THERE IS VIOLATION OF SEC.269SS OF THE ACT, ETC., HAS NOT BEEN VERIFIED O R EXAMINED IN RESPECT OF THE CONSTRUCTION OF THE HOUSE ON THE PLOT PROVIDED, WHETHER THE SOURCE IS EXPLAINED, WHEN CONSTRUCTION IS COMPLETED, ETC., HA VE ALSO NOT BEEN VERIFIED. THESE FACTS ARE NOT EMANATING OUT OF THE ORDER OF THE AO OR THE LD.CIT(A). SIMILARLY, IN RESPECT OF THE SOURCE FOR THE PURCHASE OF THE LAND, THE ASSESSEES WIFE SEEMS TO HAVE SOLD A PLOT OF LA ND AT TRICHY FOR RS.4.90 LAKHS AND FAIR MARKET VALUE FOR THE SAID PROPERTY I S AT RS.22,60,750/-. WHAT HAPPENED TO THE ASSESSMENT IN THE CASE OF THE ASSESSEES WIFE SMT.R.ANURADHA IS ALSO NOT COMING OUT. THUS, AS TH E FACTS WHICH ARE NECESSARY FOR ADJUDICATING THIS APPEAL IS NOT COMIN G OUT OF THE ORDER OF THE ITA NO.3093/MDS/2016 :- 6 -: AO OR THE LD.CIT(A) AND ALSO CONSIDERING THE FACT THAT THE ASSESSEE HAS BEEN ATTEMPTED TO DELAY THE PROCEEDINGS BY NOT CO-O PERATING IN THE ASSESSMENT PROCEEDINGS NOR IN GETTING HIS APPEAL DI SPOSED OFF BEFORE US, IN THE INTEREST OF NATURAL JUSTICE, THE ISSUES IN T HIS APPEAL ARE RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION. IN THE RE- ADJUDICATION, THE AO SHALL PROVIDE THE ASSESSEE COPIES OF ALL DOCUMENTS WHICH HE PROPOSES TO USE AGAINST THE ASSESSEE, FOR HIS REBUTTAL. HERE IT MA Y ALSO BE RELEVANT TO STATE THAT THE DAY BOOK OF M/S.MURUGAN BUILDERS, RE FLECTING RECEIPT OF RS.51,00,000/- FROM SRI AYYA RR, UNDER THE HEAD LE ELA AVENUE, ALSO REFERRED TO EARLIER (AT PARA NO.4 OF THIS ORDER), F OUND DURING SURVEY, IS DOCUMENT TO WHICH THE PRESUMPTION AS TO THE TRUTH O F ITS CONTENTS SHALL APPLY IN VIEW OF THE SEC.292C OF THE IT ACT, 1961. THE ASSESSEE SHALL PRODUCE SHRI T.K.VENKATESAN BEFORE THE AO FOR HIS E XAMINATION. IN THE EVENT THAT THE ASSESSEE DOES NOT CO-OPERATE IN THE ASSESSMENT PROCEEDINGS, THE AO SHALL BE AT LIBERTY TO DRAW ADV ERSE INFERENCES. WITH THESE DIRECTIONS THE ISSUES IN THIS APPEAL ARE REST ORED TO THE FILE OF THE AO FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADE QUATE OPPORTUNITY TO SUBSTANTIATE HIS CASE. ITA NO.3093/MDS/2016 :- 7 -: 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 29, 2 017, AT CHENNAI. SD/- SD/- ( # ) (GEORGE MATHAN) ' /JUDICIAL MEMBER ( ) ( SANJAY ARORA ) /A CCOUNTANT MEMBER /CHENNAI, 3 /DATED: AUGUST 29, 2017. TLN - +'45 65 /COPY TO: 1. * /APPELLANT 4. 7 /CIT 2. +,* /RESPONDENT 5. 5 +'' /DR 3. 7 ( ) /CIT(A) 6. # /GF