N.Latha, CHENNAI V. ITO, CHENNAI

ITA 3481/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5740 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 26-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 27-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: B JAISHEILAC A
• Keywords: Income from undisclosed sources; Salary income; Principle of natural justice; Additional evidence; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 148

Judgement Text

, B/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL B/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.3481 /MDS./2016 ( ASSESSMENT YEAR : 2010-11 ) SMT.N.LATHA , 14/6,VENUGOPAL STREET, VETRI NAGAR, PERVALLUR, CHENNAI-82. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD 17(1), CHENNAI. PAN AEUPL 6568 C ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS.B.JAISHEILA,C.A. / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 22.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 05.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-5, CHENNA I DATED 08.11.2016 PERTAINING TO ASSESSMENT YEAR 2010-11. ITA NO.3481 /MDS/2016 2 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS FOR C ONSIDERATION. 1. FOR THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE TO THE EXTENT PREJUDICIAL TO THE INTEREST OF THE APPELLANT AND AT ANY RATE IS OPPOSE D TO THE PRINCIPLES OF EQUITY, NATURAL JUSTICE ) AND FAIR PLAY. 2 FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE / ORDER OF THE ASSESSING OFFICER IS WITHOUT JUR ISDICTION. 3. FOR THAT THE REOPENING WAS BAD IN LAW. 4. FOR THE REOPENING WAS MADE ON A MERE CHANGE OF OPINION. 5. FOR THAT THE ASSESSMENT WAS REOPENED WITHOUT AN Y NEW TANGIBLE MATERIAL. 6. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.36,00,000/- AS INCOME FROM UNDISCLOS ED SOURCES. 2.1 THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDI TIONAL GROUNDS. FOR THAT THE AO ERRED IN NOT PASSING THE SPEAKING ORDER. 2.2 THE ASSESSEE FILED A PETITION FOR ADMISSION OF ADDITIONAL GROUNDS STATING THAT THE ASSESSEE FAILED TO RAISE THE SAID GROUND DUE TO INADVERTENCE AND PRAYED THAT THIS ADDITIONAL GRO UND MAY BE ADMITTED. 2.3. AT THE TIME OF HEARING, THE LD.A.R HAS NOT PR ESSED THE GROUND NOS.1 TO 5 RAISED IN ASSESSEES APPEAL. ACCORDING LY, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. ITA NO.3481 /MDS/2016 3 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN HER APPEA L IS WITH REGARD TO CONFIRMING THE ADDITION OF ` 36 LAKHS BY LD.CIT(A) AS INCOME FROM UNDISCLOSED SOURCES MADE BY THE LD. ASSESSING OFFICER. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASESS EE IS ENGAGED IN CHIT BUSINESS DURING THE PERIOD RELEVANT TO AY 2010 -11. ON GOING THROUGH THE CASH FLOW STATEMENT FOR THE YEAR ENDING 31.03.2010, IT IS FOUND THAT THE ASSESSEE HAS ADMITTED TO HAVE RECEIV ED ` 36,00,000/- FROM DEBTORS. THE TRANSACTION INVOLVED IS DISPROPOR TIONATE TO THE SOURCE OF INCOME BEING SALARY AND INTEREST ON BANK DEPOSITS AS ADMITTED BY ASSESSEE. FURTHER, IN THE STATEMENT OF TOTAL INCOME FOR THE ABOVE PERIOD, THE ASSESSEE HAS OFFERED INCOME F ROM SALARY AND INTEREST INCOME ONLY BUT HAS NOT OFFERED ANY INCOME FROM ANY OTHER SOURCE. IT IS CONSIDERED NECESSARY THAT THE GENUINE NESS OF ASSESSEES CLAIM OF RECEIPT FROM DEBTORS OF ` 36,00,000/- NEEDS TO BE VERIFIED IN THE LIGHT OF RELEVANT ACCOUNTS AND TRAN SACTIONS MADE THROUGH BANK AS WELL. HOLDING THAT THERE IS REASON TO BELIEVE THAT THERE IS AN ELEMENT OF ESCAPEMENT OF INCOME UNDER T HIS SCORE BESIDES SUPPRESSION OF INCOME FROM SALARY AND INTER EST INCOME, THE ITA NO.3481 /MDS/2016 4 ASSESSMENT HAS BEEN REOPENED U/S.147 BY ISSUE OF NO TICE U/S 148 AND WAS DULY SERVED ON THE ASSESSEE ON 18.09.2014. IN RESPONSE, THE ASSESSEE HAS FILED A RETURN OF INCOME FOR AY 20 10-11 ADMITTING A TOTAL INCOME OF ` 4,16,640/- ON 17.10.2014. IN THE ABOVE RETURN SHE HAS OFFERED AN ADDITIONAL INCOME OF ` 20,000/- AND ` 37,672/- UNDER SALARY AND INTEREST INCOME RESPECTIVELY, THEREBY RE CONCILING THE DIFFERENCE IN INCOME FROM THE ABOVE TWO SOURCES AS ADMITTED IN THE RETURN FILED ON 25.07.2011 AND THAT AS RECEIVED AS PER RECORD EXCEPT TO THE TUNE OF ` 1,346/- WHICH HAS BEEN BROUGHT TO TAX. 4.1 IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSSSEE HAS BEEN ASKED TO EXPLAIN THE SOURCE FROM WHICH THE ADV ANCE TO DEBTORS TO THE EXTENT OF ` 36,00,000/- HAS BEEN MADE AND THE SOURCE FROM WHICH (I.E) DETAILS OF DEBTORS FROM WHOM THE SAME H AS BEEN RECEIVED BACK ALONG WITH NECESSARY DOCUMENTARY EVIDENCE IN R ESPECT OF TRANSACTION OF LOAN GIVEN ABOVE ` 20,000/- IN CASH IN VIOLATION OF THE PROVISIONS OF SECTION 269SS ALSO EXPLANATION HAS BE EN CALLED FOR FROM THE ASSESSEE. SRI P KAMALESAN THE AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE, APPEARED AND THE CASE HAS BEEN HEARD ON VARIOUS ITA NO.3481 /MDS/2016 5 DATES. DESPITE REASONABLE OPPORTUNITIES GIVEN THE A SSESSEE COULD NOT OFFER EXPLANATION/FURNISH DETAILS REQUIRED OF HER. IN THE SITUATION IT IS PRESUMED THAT SHE HAS NO EXPLANATION TO OFFER AND A CCORDINGLY ` 36,00,000/- HAS BEEN TREATED AS INCOME FROM UNEXPLA INED SOURCES AND BROUGHT TO TAX UNDER INCOME FROM OTHER SOURCES REGARDING HER INCOME FROM CHIT BUSINESS IT IS CLAIMED THAT THE SU BSCRIPTION RECEIVED FROM THE MEMBERS HAS BEEN DEPOSITED IN BANK AND INT EREST EARNED THEREON HAS BEEN OFFERED AS INCOME FOR ASSESSMENT. ACCORDINGLY, THE ASSESSMENT IS COMPLETED ON THE ABOVE LINES AND ` 36 LAKHS IS ADDED TO THE INCOME OF ASSESSEE AS INCOME FROM UNDISCLOSE D SOURCES. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, TH E ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). 4.2 BEFORE THE LD.CIT(A), THE ASSESSEE HAD NOT FIL ED ANY INFORMATION REGARDING THE SOURCE OF THAT RECEIPT OF ` 36 LAKHS. HENCE, THE ADDITION WAS CONFIRMED BY THE LD.CIT(A) BY OBS ERVING AS UNDER:- 7.1 BEFORE THE AO THE ASSESSEE DID NOT FILE ANY E VIDENCE TO EXPLAIN THE SOURCES FOR THE RECEIPT FROM DEBTORS OF ` 36,00,000/-. ITA NO.3481 /MDS/2016 6 THE ASSESSEE DID NOT FILE ANY EVIDENCE TO EXPLAIN THE SOURCES FOR THE RECEIPT FROM DEBTORS OF ` 36,00,000/- BEFORE THE LD.CIT(A) ALSO. AGAINST THE ORDER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE MAIN GRIEVANCE OF THE ASSESSEE BEFORE ME I S THAT THE ORDER PASSED BY THE LOWER AUTHORITIES IS VERY CRYPT IC AND EVIDENCES NOT APPRECIATED PROPERLY BY THE LOWER AUTHORITIES A ND PLACED BEFORE ME A COPY OF CONFIRMATION LETTERS FROM THE FOLLOWIN G PERSONS, WHICH WAS FILED BY THE ASSESSEE IN THE COURSE OF PENALTY PROCEEDINGS INITIATED BY THE LD. ASSESSING OFFICER U/S.271D OF THE ACT. SL NO. NAME AMOUNT LETTER DATED 1 MR.P.PREMNATH RS.2,50,000/- 18/07/2017 2 MR.R.STEPHEN RS.2,50,000/- 18/07/2017 3 MR.D.SHANMUGAM RS.2,50,000/- 18/07/2017 4 MR.T.R.NARASIMAN RS.5,22,960/- 18/07/2017 5 MR.K.MARRIAPPAN RS.5,45,070/- 18/07/2017 6 MR.K.KISHORE KUMAR RS.2,50,000/- 18/07/2017 7 MR.B.SASI KUMAR RS.2,50,000/- 18/07/2017 8 MR.B.NAGARAJ(HUF) RS.5,18,000/- 18/07/2017 9 MR.B.AKBHAR RS.2,50,000/- 18/07/2017 ITA NO.3481 /MDS/2016 7 THE LD.A.R SUBMITTED THAT THESE EVIDENCES ARE FILED BEFORE THE LD. ASSESSING OFFICER AT THE TIME OF HEARING OF PENALTY PROCEEDINGS INITIATED U/S.271D OF THE ACT ANDPRAYED THAT THIS M AY BE REMITTED TO THE LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. 6. ON THE OTHER HAND, LD.D.R SUBMITTED THAT THESE ARE ADDITIONAL EVIDENCES, WHICH SHOULD NOT BE ADMITTED AND THE ASS ESSEE WAS NOT PRODUCED IN SPITE OF GIVING MANY OPPORTUNITIES. I N REPLY TO THE ABOVE ARGUMENT OF THE LD.D.R , THE LD.A.R SUBMITTED THAT THE BENCH ON EARLIER OCCASION ON 14.09.2017 DIRECTED THE ASSESS EE TO PRODUCE CASH FLOW STATEMENT AND OTHER RELATED RECORDS. HENC E, IT WAS PRODUCED AS PER THE DIRECTION OF THE BENCH AND IT I S TO BE CONSIDERED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, THE BENCH ON EARLIER OCCASION D ATED 14.09.2017 DIRECTED THE ASSESSEE TO FURNISH THE CASH FLOW STAT EMENT AND BALANCE SHEET CONCERN SO AS TO VERIFY THE GENUINENESS OF TH E TRANSACTION AS WELL AS THE IDENTITY OF THE PARTIES, WHO RETURN B ACK THE MONEY TO THE ASSESSEE. HENCE, THE SAME HAS BEEN CONSIDERED. HOW EVER, THESE DOCUMENTS ARE NOT AVAILABLE TO THE LD. ASSESSING OF FICER AT THE TIME OF ASSESSMENT PROCEEDINGS. HENCE, IT IS APPROPRIATE TO CONSIDER THE ITA NO.3481 /MDS/2016 8 SAME BY THE LD. ASSESSING OFFICER AND DECIDE THE IS SUE AFRESH. ACCORDINGLY, THE ISSUE IS REMITTED TO THE FILE OF L D. ASSESSING OFFICER TO CONSIDER THE ABOVE EVIDENCES FILED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 05 TH DECEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 05 TH DECEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF