ITO, Coimbatore V. J.Rammohan, Coimbatore

ITA 399/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96082 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 25-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2013
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Keywords: Gift
• Section: 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , ! ' , # $% & [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] ./ I.T.A.NO.399/MDS/2013 / ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER WARD III(1) COIMBATORE VS. SHRI J. RAMMOHAN NO.1, THIRUGNANA SAMBANDAM ROAD RACE COURSE, COIMBATORE 641 018 [PAN AARPR 1695 P] ( '( / APPELLANT) ( )*'( /RESPONDENT) / APPELLANT BY : SHRI A.B. KOLI, JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 25 - 08 - 2015 / DATE OF PRONOUNCEMENT : 04 - 09 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIMBA TORE, DATED 11.12.2012 AND PERTAINS TO ASSESSMENT YEAR 2008-09 . 2. THE NOTICE OF HEARING WAS SERVED ON THE ASSESSEE T HROUGH THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS P LACED ON RECORD THE COPY OF ACKNOWLEDGEMENT AS A PROOF OF SERVICE OF NO TICE ON THE ASSESSEE. EVEN AFTER RECEIPT OF THE NOTICE, THE A SSESSEE HAS NOT ITA NO.399/13 :- 2 -: APPEARED BEFORE THIS TRIBUNAL. THEREFORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOS E OF THE APPEAL ON MERIT. 3. SHRI A.B. KOLI, LD. DEPARTMENTAL REPRESENTATIVE SUB MITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 16,70,500/- BEING THE CASH CREDIT U/S 69 OF THE ACT. THE ASSESSING OFFI CER HAS ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. AC CORDING TO THE LD. DR, THE ASSESSEE COULD NOT EXPLAIN BEFORE THE ASSE SSING OFFICER THE CASH DEPOSIT OF ` 16,70,500/-. THEREFORE, THE ASSESSING OFFICER FOU ND THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME. ACCORDINGLY, PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED TO THE EXTENT OF ` 6,25,035/-. HOWEVER, ON APPEAL BY THE ASSESSEE, T HE CIT(A) FOUND THAT THE ASSESSEE WAS UNDER POLICE CUSTODY IN THE END OF THE YEAR 2010, THEREFORE, HE COULD NOT PRODUCE NECESSAR Y EVIDENCE BEFORE THE ASSESSING OFFICER. THE CIT(A), AFTER OBSERVIN G THAT MAJOR PART OF THE DEMAND RAISED IN THE ASSESSMENT ORDER WAS PAID BY THE ASSESSEE, DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER . 4. ACCORDING TO THE LD. DR, WHEN THERE IS A CASH CREDI T, IT IS FOR THE ASSESSEE TO EXPLAIN THE SOURCE FOR SUCH CREDIT . IN THE ABSENCE OF ANY MATERIAL AVAILABLE ON RECORD, THE CIT(A) OUGHT NOT TO HAVE DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. ITA NO.399/13 :- 3 -: 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM TH E MATERIAL AVAILABLE ON RECORD, IT APPEARS THAT THE ASSESSEE WAS A DIREC TOR IN A TEXTILE COMPANY. THE ASSESSING OFFICER FOUND CASH DEPOSIT IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE. IT APPEARS FROM THE MATERIAL AVAILABLE ON RECORD THAT CRIMINAL PROCEEDINGS WERE INITIATED FOR NON-PAYMENT OF AMOUNTS DUE TO COTTON SUPPLIERS. IN THE RESULT, TH E ASSESSEE WAS ARRESTED ON THE BASIS OF THE WARRANT ISSUED BY THE MAGISTRATE COURT ON 19.11.2010. IT APPEARS THAT THE ASSESSEES WIFE W AS ALSO ARRESTED ON 19.11.2010. SINCE THE ASSESSEE WAS IN THE JUDICIA L CUSTODY BY THE ORDER OF THE COMPETENT MAGISTRATE COURT, HE COULD N OT PRODUCE THE NECESSARY MATERIALS BEFORE THE ASSESSING OFFICER EX PLAINING THE SOURCES FOR CASH DEPOSIT IN THE SB ACCOUNT OF THE ASSESSEE . THE ASSESSMENT WAS COMPLETED BY AN ORDER DATED 30.12.2010. APPARE NTLY THE ASSESSEE WAS RELEASED BY THE SUB-JUDICIAL MAGISTRAT E OF ADILABAD ON 13.1.2011. THEREFORE, IT IS APPARENT FROM THE RECO RD THAT FROM 19.11.2010 TO 13.1.2011 THE ASSESSEE WAS IN JUDICIA L CUSTODY, THEREFORE, HE WAS PREVENTED FROM PRODUCING NECESSAR Y MATERIAL BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEED INGS. 6. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE FO R LEVY OF PENALTY ON 30.12.2010. THE ASSESSEE APPEARS TO HA VE EXPLAINED BEFORE THE ASSESSING OFFICER THAT HE WAS IN POLICE CUSTODY DURING ITA NO.399/13 :- 4 -: PROCEEDINGS BEFORE THE ASSESSING OFFICER. EVEN AFT ER RELEASE FROM THE JUDICIAL CUSTODY, THE ASSESSEE WAS REQUIRED TO APP EAR BEFORE THE COURT PERIODICALLY. AS A RESULT, THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE BEFORE THE ASSESSING OFFICER TO SUPPORT THE CASH CR EDIT FOUND IN THE BANK ACCOUNT. THE ASSESSEE FURTHER EXPLAINED THAT THE CASH CREDIT IN THE SB ACCOUNT REPRESENTS GIFT RECEIVED FROM HIS CL OSE RELATIVES. THE ASSESSEE ALSO EXPLAINED BEFORE THE ASSESSING OFFICE R THAT HE COULD NOT PREFER AN APPEAL AGAINST THE ASSESSMENT ORDER SINCE HE HAS TO DEFEND THE CRIMINAL PROCEEDINGS DURING HIS PERIOD ON BAIL. THE CIT(A) FOUND THAT THE ASSESSEE HAS PAID MAJOR PART OF THE DEMAN D RAISED BY THE ASSESSING OFFICER AND THE ASSESSEE WAS TAKEN INTO CUSTODY, THEREFORE, HE WAS UNABLE TO PRODUCE NECESSARY EVIDENCE BEFORE THE ASSESSING OFFICER. THE FACT REMAINS THAT THE ASSESSEE WAS I N JUDICIAL CUSTODY FROM 19.11.2010 TO 13.1.2011. ON 13.1.2011 THE AS SESSEE WAS RELEASED ON BAIL BY THE SUB-JUDICIAL MAGISTRATE, AD ILABAD, ANDHRA PRADESH. DURING THE PERIOD THE ASSESSEE WAS ON BA IL, HE WAS REQUIRED TO APPEAR BEFORE THE CRIMINAL COURT PERIODICALLY AN D HE HAS TO DEFEND THE CRIMINAL PROCEEDINGS BEFORE THE CRIMINAL COURT. THE FACT THAT THE ASSESSEE HAS SUFFERED A LOSS AND HE WAS ARRESTED FO R NON-PAYMENT OF DUES TO THE COTTON SUPPLIERS IS NOT IN DISPUTE. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIV ING ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE NECESSA RY MATERIAL TO ITA NO.399/13 :- 5 -: SUPPORT THE CASH CREDIT FOUND IN THE SB ACCOUNT MAY NOT PREJUDICE THE INTEREST OF THE REVENUE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE NECESSARY MATERIAL WOULD DEFINITELY PROMOTE THE CAUSE OF JUST ICE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE A ND THE ENTIRE ISSUE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT IS REMIT TED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL TAKE INTO CONSIDERATION THE FINANCIAL SITUATION THE ASSESSEE WAS FACING AT THE RELEVANT POINT OF TIME, THE FACT OF DETENTION OF TH E ASSESSEE BY THE JUDICIAL FORUM, AND OTHER RELEVANT FACTORS. THEREA FTER, THE ASSESSING OFFICER SHALL DECIDE THE ISSUE OF LEVY OF PENALTY I N ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSES SEE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH OF SEPTEMBER, 2015, AT CHENNAI. SD/- SD/- ( ! ' ) (CHANDRA POOJARI) # / ACCOUNTANT MEMBER ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 4 TH SEPTEMBER, 2015 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 3. ' +',! / CIT(A) 5. )-.' / / DR 2. / RESPONDENT 4. ' + / CIT 6. .0'1 / GF