R.Vijayakannan, Salem V. ITO, Salem

ITA 3104/CHNY/2014

• Counselvise Citation: 310421714 RSA 2014
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 24-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: G BASKAR

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 NO.3104/MDS/2014 ( )( / ASSESSMENT YEAR : 2002-03 SMT. R. VIJAYAKANNAN, NO.135-A, KENNEDY NAGAR, SURAMANGALAM, SALEM 636 005. PAN : ACPPV 1306 H V. THE INCOME TAX OFFICER, WARD I(3), NO.3, GANDHI ROAD, SALEM 636 007. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. G. BASKAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SH. S. DAS GUPTA, JCIT 1 / 2% / DATE OF HEARING : 06.04.2015 3') / 2% / DATE OF PRONOUNCEMENT : 08.04.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM DAT ED 28.11.2014 AND PERTAINS TO ASSESSMENT YEAR 2002-03. 2 I.T.A. NO.3104/MDS/14 2. SHRI G. BASKAR, LD.COUNSEL FOR THE ASSESSEE, SUB MITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 10,00,000/-. IN THE FIRST ROUND OF LITIGATION, THIS TRIBUNAL BY AN ORDER DATE D 12.01.2011 REMANDED BACK THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER. THE ASSESSING OFFICER CONFIRMED THE ADDITION ONCE AGAIN TO THE EXTENT OF ` 10,00,000/- ON THE GROUND THAT THE CONTEMPORANEOUS EVIDENCE IN THE FORM OF RETURN OF INCOME WAS NOT FILED BY THE A SSESSEE. ACCORDING TO THE LD. COUNSEL, WHEN THE INVESTMENTS WERE MADE IN M/S VETRIVEL EXPLOSIVES PRIVATE LIMITED FOR THE PER IOD FROM 01.04.1999 TO 31.03.2001, THERE CANNOT BE ANY ADDIT ION FOR THE FINANCIAL YEAR 2001-02 WHICH IS RELEVANT TO THE ASS ESSMENT YEAR 2002-03. AT THE BEST, THE ADDITION COULD BE MADE O NLY FOR THE FINANCIAL YEAR 2000-01 WHICH IS RELEVANT TO THE ASS ESSMENT YEAR 2001-02. REFERRING TO PAPER-BOOK, MORE PARTICULARL Y PAGES 35 AND 36, THE LD. COUNSEL SUBMITTED THAT ALL THE PAYMENTS WERE MADE BY CASH BEFORE 31.03.2001. HENCE, THERE CANNOT BE ANY ADDITION FOR THE YEAR UNDER CONSIDERATION. 3. ON THE CONTRARY, SHRI DAS GUPTA, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE MADE IN VESTMENTS IN M/S VETRIVEL EXPLOSIVES PRIVATE LIMITED FOR THE PER IOD FROM 01.04.1999 TO 31.03.2001 TOWARDS SHARE CAPITAL AND ADVANCES TO 3 I.T.A. NO.3104/MDS/14 THE EXTENT OF ` 12,85,000/-. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE WOULD NOT HAVE EARNED SO MUCH OF MONEY FOR THE PERIOD FROM 01.04.1999 TO 31.03.2001. AS PER THE DIRECTIO N OF THIS TRIBUNAL, THE ASSESSING OFFICER AS WELL AS THE CIT( APPEALS) EXAMINED THE MATTER AND FOUND THAT ` 10,00,000/-, WHICH WAS CREDITED TO THE CAPITAL ACCOUNT FOR THE YEAR ENDING 31.03.2001, AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER H AS RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE WITH REGARD TO ` 10,00,000/- CONSIDERING AS INCOME FROM OTHER SOURCES AND THIS W AS RIGHTLY CONFIRMED BY THE CIT(APPEALS). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SING OFFICER MADE AN ADDITION OF ` 10,00,000/- ON THE GROUND THAT THE INVESTMENTS MADE IN SHARE CAPITAL OF M/S VETRIVEL E XPLOSIVES PRIVATE LIMITED REMAINS UNEXPLAINED. THE ASSESSING OFFICER , AFTER CONSIDERING THE CLAIM OF THE ASSESSEE THAT ALL THE INVESTMENTS WERE MADE TILL 31.03.2001, FOUND THAT THE AMOUNT CREDITE D TO THE CAPITAL ACCOUNT TO THE EXTENT OF ` 10,00,000/- IN THE YEAR ENDING 31.03.2001 AS INCOME FROM OTHER SOURCES WAS NOT EXPLAINED. TH E FACT REMAINS THAT THE INVESTMENTS IN M/S VETRIVEL EXPLOSIVES PRI VATE LIMITED WERE MADE IN THE YEAR ENDING 31.03.2001 AND THE CAPITAL AMOUNT 4 I.T.A. NO.3104/MDS/14 CREDITED IS ALSO IN THE YEAR ENDING 31.03.2001. TH EREFORE, IF AT ALL THERE IS ANY ADDITION, IT COULD BE MADE ONLY FOR TH E FINANCIAL YEAR 2000-01 WHICH IS RELEVANT TO THE ASSESSMENT YEAR 20 01-02. HENCE, THE ADDITION MADE FOR THE ASSESSMENT YEAR 2002-03 I S NOT SUSTAINABLE. IN VIEW OF THE ABOVE, THE ORDERS OF T HE LOWER AUTHORITIES ARE SET ASIDE AND THE ADDITION OF ` 10,00,000/- IS DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 8 TH OF APRIL, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !'# ! ) ( . . . ) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 8 TH APRIL, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A), SALEM 4. 1 92 /CIT, SALEM 5. 7: -2 /DR 6. ;( < /GF.