K.Ramalingam (HUF), Salem V. ITO, Salem

ITA 3105/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90278 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 24-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: G BASKAR
• Keywords: Revised return
• Section: 68

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.3105/MDS/2014 ( )( / ASSESSMENT YEAR : 2002-03 SHRI K. RAMALINGAM (HUF), NO.135-A, KENNEDY NAGAR, SURAMANGALAM, SALEM 636 005. PAN : AAHHK 3619 L 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 : 10.04.2015 / 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, DA TED 28.11.2014 AND PERTAINS TO ASSESSMENT YEAR 2002-03. 2 I.T.A. NO.3105/MDS/14 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 2,35,745/- UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI G. BASKAR, LD. COUNSEL FOR THE ASSESSEE, SU BMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 2,35,745/- ON THE GROUND THAT PROFIT ON SALE OF LAND RELATING TO ASSE SSMENT YEARS 1996- 97 AND 1997-98 WAS NOT BROUGHT TO THE NOTICE OF THE DEPARTMENT BY WAY OF FILING RETURN OF INCOME. THE FACT REMAINS T HAT THE LAND WAS SOLD DURING THE ASSESSMENT YEARS 1996-97 AND 1997-9 8. THEREFORE, IF AT ALL ANY ADDITION TO BE MADE, IT COULD BE MADE ONLY FOR THOSE ASSESSMENT YEARS. JUST BECAUSE OF THE FAILURE OF T HE ASSESSEE NOT BRINGING TO THE NOTICE OF THE DEPARTMENT, THERE CAN NOT BE ANY ADDITION FOR THE YEAR UNDER CONSIDERATION. ACCORDI NG TO LD. COUNSEL, BOTH THE LOWER AUTHORITIES ADMITTED THAT THE INCOME OF ` 2,35,745/- WAS EARNED DURING THE ASSESSMENT YEARS 1996-97 AND 1997-98. THEREFORE, THERE CANNOT BE ANY ADDITION FOR THE YEA R UNDER CONSIDERATION. 3. ON THE CONTRARY, SHRI S. DAS GUPTA, LD. DEPARTME NTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED THAT HE EARNED THE INCOME OF ` 2,35,745/- ON SALE OF LAND DURING THE ASSESSMENT 3 I.T.A. NO.3105/MDS/14 YEARS 1996-97 AND 1997-98. HOWEVER, IT WAS BROUGHT TO THE CAPITAL ACCOUNT DURING THE YEAR UNDER CONSIDERATION. THERE FORE, ACCORDING TO LD. D.R., THE PROVISIONS OF SECTION 68 OF THE AC T WOULD COME INTO OPERATION. SINCE THE AMOUNT WAS CREDITED IN THE AS SESSMENT YEAR UNDER CONSIDERATION AS CAPITAL, IT IS FOR THE ASSES SEE TO EXPLAIN HOW THE AMOUNT CAME INTO HIS HANDS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. BOTH THE AUTHORITIES BELOW ADMITTED THAT THE ASSESSEE EARNED ` 2,35,745/- ON SALE OF LAND DURING THE ASSESSMENT YEARS 1996-97 AND 1997-98. T HE ONLY CONTENTION OF THE DEPARTMENT IS THAT THE AMOUNT OF ` 2,35,745/- WAS BROUGHT INTO THE CAPITAL ACCOUNT DURING THE ASSESSM ENT YEAR 2002- 03. THE FACT REMAINS THAT THE PROFIT WAS EARNED DU RING THE ASSESSMENT YEARS 1996-97 AND 1997-98. THEREFORE, T HIS TRIBUNAL IS OF CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDI TION FOR THE YEAR UNDER CONSIDERATION. ADDITION UNDER SECTION 68 OF THE ACT COULD BE MADE ONLY IN CASE THE ASSESSEE COULD NOT EXPLAIN TH E NATURE AND SOURCE OF INCOME. IN THIS CASE, THE NATURE AND SOU RCE OF INCOME HAVE BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE THAT THE SUM WAS EARNED DURING THE ASSESSMENT YEARS 1996-97 AND 1997-98. THEREFORE, THIS TRIBUNAL IS OF CONSIDERED OPINION T HAT THERE CANNOT 4 I.T.A. NO.3105/MDS/14 BE ANY ADDITION OF ` 2,35,745/- DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ADDITION OF ` 2,35,745/- IS DELETED. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF ` 1,26,000/- BEING THE AGRICULTURAL INCOME. 6. SHRI G. BASKAR, LD.COUNSEL FOR THE ASSESSEE, SUB MITTED THAT THE ASSESSEE CLAIMED AGRICULTURAL INCOME OF ` 87,000/- IN THE REVISED TOTAL INCOME AS AGAINST ` 95,000/- CLAIMED IN THE ORIGINAL RETURN. DURING THE ASSESSMENT PROCEEDINGS, ON THE BASIS OF THE REPORT OF THE INSPECTOR OF INCOME TAX, THE ASSESSING OFFICER ACCEPTED THE AGRICULTURAL INCOME TO THE EXTENT OF ` 45,000/- FROM VELLAKKALPATTY LAND. HOWEVER, AGRICULTURAL INCOME FROM MURUGAIPAD I LAND WAS REJECTED. ACCORDING TO LD. COUNSEL, IF THE ASSESSI NG OFFICER DISBELIEVES THE INCOME FROM MURUGAIPADI LAND, THEN THE TOTAL ADDITION CAN BE MADE ONLY TO THE EXTENT OF ` 42,000/-. THE ASSESSING OFFICER BY TAKING INTO CONSIDERATION THE AGRICULTURAL INCOME CLAIMED DURING THE EARLIER ASSESSMENT YEARS 2000-01 AND 2001-02, MADE ADDITION OF ` 84,000/- FOR THE YEAR UNDER CONSIDERATION. ACCORDING TO LD. COUNSEL, AT THE BE ST AN ADDITION OF ` 42,000/- CAN BE MADE AND DEFINITELY NOT ` 1,26,000/-. 5 I.T.A. NO.3105/MDS/14 7. ON THE CONTRARY, SHRI S. DAS GUPTA, THE LD. D.R. SUBMITTED THAT THE INSPECTOR OF INCOME TAX VISITED THE AGRICU LTURAL LAND AND FOUND THAT MURUGAIPADI LAND DID NOT HAVE WATER FACI LITY AND IT IS NOT FIT FOR AGRICULTURAL ACTIVITIES. THEREFORE, THE AS SESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THE ASSESSEE CLAIMED AGRICULTURAL INCOME OF ` 87,000/- IN THE REVISED RETURN. THE ASSESSING OFFICER ACCEPTED THE AGRICULTURAL INCOME FROM VELLAKKALPATTY LAND TO THE EXTENT OF ` 45,000/-,. THEREFORE, WHAT IS DISPUTED IS ONLY ` 42,000/- FROM MURUGAIPADI LAND. THE INSPECTOR OF INCOME TAX INSPECTED THE LAND ONLY AFTER TWO YEARS FROM THE DATE OF CULTIVATION. THE CULTIVATION COULD HAVE BEEN PROVE D OTHERWISE BY THE ASSESSEE BY FILING COPIES OF THE VILLAGE ACCOUN T, NAMELY, THE ADANGAL (VILLAGE ACCOUNT NO.2). HOWEVER, THE ASSES SEE COULD NOT FILE ANY DOCUMENT EITHER BEFORE THE LOWER AUTHORITI ES OR BEFORE THIS TRIBUNAL. THEREFORE, THIS TRIBUNAL HAS NO OTHER AL TERNATIVE TO CONFIRM THE ADDITION OF ` 42,000/-. HOWEVER, THIS TRIBUNAL COULD NOT CONFIRM THE ADDITION TO THE EXTENT OF ` 84,000/-, WHICH WAS DISALLOWED IN THE EARLIER ASSESSMENT YEARS 2000-01 AND 2001-02. IF A T ALL THERE WAS ANY DISALLOWANCE FOR THE ASSESSMENT YEARS 2000-01 A ND 2001-02, 6 I.T.A. NO.3105/MDS/14 THE SAME COULD BE MADE ONLY DURING THOSE YEARS AND DEFINITELY NOT IN THE YEAR UNDER CONSIDERATION, NAMELY, 2002-03. THEREFORE, THE ORDER OF THE LOWER AUTHORITY IS MODIFIED AND THE AS SESSING OFFICER IS DIRECTED TO ADD ONLY ` 42,000/-, WHICH WAS CLAIMED AS AGRICULTURAL INCOME. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED ON 10 TH APRIL, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !'# ! ) ( . . . ) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 10 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.