Mohamed Meera Ziaudeen, CHENNAI V. ITO, CHENNAI

ITA 41/CHNY/2017

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7404 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 09-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: G BASKAR
• Keywords: Unexplained investment; Revised return
• Section: 69

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC C BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.41/MDS/2017 ( / ASSESSMENT YEAR: 2012-13) SHRI MOHAMED MEERA ZIAUDEEN, C/O. G. BASKAR, G. SUSHEELA, S. SRINIRANJANI & SUSHMA HARINI A, ADVOCATES, 1 ST FLOOR, ROSY TOWERS, NO.7, NUNGAMBAKKAM HIGH ROAD, CHENNAI 600 034 VS THE INCOME TAX OFFICER, INTERNATIONAL TAXATION 2(2), CHENNAI 34 PAN: AADPZ9390D ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI G. BASKAR, ADVOCATE /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT /DATE OF HEARING : 22.03.2017 ! /DATE OF PRONOUNCEMENT : 29.03.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-16, CHENNAI DATED 25.11.2016 IN IT APPEAL NO.28/CIT(A)-16/2012-13 FOR THE ASSESSMENT YEAR 2012-13 PASSED U/S.250(6) R.W.S. 14(3) OF THE ACT. 2. THE ASSESSEE HAD RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERR ED IN CONFIRMING THE ADDITION MADE BY THE LD.AO FOR RS.2,82,596/- AND RS .5,29,761/- UNDER 2 ITA NO.41/MDS/2017 THE HEAD UNEXPLAINED INVESTMENT INVOKING THE PROVIS IONS OF SECTION 69 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A NON- RESIDENT FILED HIS RETURN OF INCOME ON 31.07.2012 A DMITTING TOTAL INCOME OF RS.24,56,608/-. SUBSEQUENTLY THE ASSESSE E FILED REVISED RETURN ON 11.03.2014 STATING HIS INCOME TO BE RS.90 ,576/-. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. FRO M THE AIR INFORMATION AVAILABLE WITH THE DEPARTMENT IT WAS FO UND THAT THE ASSESSEE HAD INVESTED IN SHARES / DERIVATIVES FOR R S.2,82,596/- AND RS.5,29,761/- RESPECTIVELY ON 17.02.2012. THE ASSES SEE WAS ASKED TO SUBMIT THE DETAILS OF THOSE INVESTMENTS ALONG WITH THE SOURCE FOR MAKING SUCH INVESTMENTS. HOWEVER THE LD.A.R., OF TH E ASSESSEE HAD SUBMITTED BEFORE THE LD.A.O., THAT THE ASSESSEE HAD NOT INVESTED IN ANY SHARES OR DERIVATIVES DURING THE RELEVANT ASSES SMENT YEAR. IN ORDER TO VERIFY THE CLAIM OF THE ASSESSEE THE LD.AO WROTE A LETTER TO MUMBAI STOCK EXCHANGE. THE MUMBAI STOCK EXCHANGE VI DE THEIR LETTER CONFIRMED THE TRANSACTION BY STATING THAT T HE ASSESSEE HAD PURCHASED PETRONET LNG ON 17.02.2012 FOR RS.2,82,59 6/- AND ON THE SAME DAY PURCHASED SHARES OF STATE BANK FOR RS.5,29 ,761/-. SINCE THE ASSESSEE HAD NOT EXPLAINED THE SOURCE FOR THESE INVESTMENTS, THE LD.AO ADDED RS.8,12,357/- (RS.2,82,596 + RS.5,29,76 1/-) TO THE 3 ITA NO.41/MDS/2017 INCOME OF THE ASSESSEE UNDER THE HEAD UNEXPLAINED I NVESTMENTS INVOKING PROVISIONS OF SECTION 69 OF THE ACT. 4. ON APPEAL THE LD.CIT(A) CONFIRMED THE ORDER OF T HE LD.AO BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE APPELLANT REBUTTAL ON REMAND REPORT SUPRA. RELIANCE MANGER WHO HANDLES THE PORTFOLIO OF THE AS SESSEE HAS STATED AS UNDER 'THAT WE HAVE VARIFIED OUR RECORDS AND HAVE FOUND T HAT THE PAN NO FOR THE CLIENT CODE CJPI075 HAS BEEN UPLOADED INCORRECT ERRONEOUSLY IN BSE UCC. THE SAME WILL BE VARIFIED OUR ENDS WITH IN 3 DAYS. AS PER RECORD THIS TRANSACTION ON APPELLANT PAN TOOK PLACE AS BACK AS ON 17.02.2012 IF THIS HAVE BEEN A FACT THAN APPELLANT WOULD HAVE BEEN IN POSITION TO PROVE HER POINT BY NOW. THE FACT REMAIN S THAT SHARE TRANSACTIONS HAVE TAKEN PLACE ON USING ASSESSEE'S P AN NO. GIVEN THE OPPORTUNITY TO THE ASSESSEE TO PROVE HER CONTENTION S DURING REMAND REPORT PROCEEDINGS UNDER RULE 46A OF THE INCOME TAX RULE 1962 THE APPELLANT COULD NOT PROVE HER POINT BEFORE THE AO . ACCORDINGLY RELYING ON REMAND REPORT, THE AO COMING TO A CONCLUSION THA T THERE WAS NO CONCLUSIVE PROOF I UPHELD THE ACTION OF THE AO THAT IN RESPONSE AO'S OFFICE LETTER DATED 2.3.20015 REPLY WAS RECEIVED FR OM BOMBAY STOCK EXCHANGE CONFIRMING THAT THE FOLLOWING TRANSACTIONS WERE DONE BY THE ASSESSEE. SR.NO. TRANSACTION AMT TRANSACTION DATE PURCHASE TR ANSACTION DETAILS 1 RS.2,82,596/- 17.02.2012 PETRONET LNG 2 RS.5,29,761/- 17.02.2012 STATE BANK RS.8,12,357 TOTAL IN VIEW OF THE ABOVE, HAVING BOMBAY STOCK EXCHANGE MUMBAI HAS CONFIRMED THAT ON THE PAN OF THE ASSESSEE FOLLOWING TRANSACTI ONS HAS TAKEN PLACE IS REMAINS THE FACT. MOREOVER THE ASSESSEE HAS NOT EXP LAINED THE NATURE AND SOURCE OF THE INVESTMENT MADE THE AMOUNT OF RS.8, 1 2,357/ - HAS RIGHTLY BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPL AINED INVESTMENTS U/S 69 OF THE ACT. THE APPELLANT DO NOT SUCCEED IN APPEAL, TH EREFORE THE APPEAL OF THE ASSESSEE ON THIS GROUND IS ACCORDINGLY DISMISSED. 5. THE LD.AR FILED A PAPER BOOK CONTAINING 23 PAGES BEFORE US WHICH INCLUDED IN PAGE NO.15 OF THE PAPER BOOK A LE TTER FROM RELIANCE 4 ITA NO.41/MDS/2017 SECURITIES LIMITED DATED 19 TH AUG 2016 ADDRESSED TO THE APPELLANT CONFIRMING THAT THERE WAS NO TRANSACTION IN THE NAM E OF THE ASSESSEE WITH RESPECT TO PURCHASE OF SHARES / DERIVATIVES FR OM BOMBAY STOCK EXCHANGE. HE THEREFORE ARGUED STATING THAT THE AD DITION MADE BY THE LD.AO MAY BE DELETED. THE LD.DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES, HOWEVER COULD NO T CONTROVERT TO THE SUBMISSION OF THE LD.AR. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE LETTER RECEIVED FROM RELIANCE SECURITIES LIMITED DATED 19.08.2016, IT IS EVIDENT THAT THE AS SESSEE HAS NOT MADE ANY TRANSACTION IN BOMBAY STOCK EXCHANGE WITH RESPE CT TO PURCHASE OF SHARES / DERIVATIVES. THE LD.DR COULD ALSO NOT FURNISHED ANY MATERIALS BEFORE US TO JUSTIFY THE ORDERS OF THE LD .AO OR THE LD.CIT(A). FURTHER AT PAGE NO.6 OF THE PAPER BOOK, THE LD.AR H AS PLACED ON RECORD THE EMAIL COMMUNICATION FROM MS. DEEPA RANGA RAJAN, ASSOCIATE MANAGER, INVESTOR SERVICES REGIONAL CENTR E, BSE LIMITED STATING THAT IN THE CASE OF THE ASSESSEE MR. MOHAME D MEERA ZIAUDEEN -- AS DISCUSSED, WE WISH TO INFORM YOU THAT WE HAVE V ERIFIED OUR RECORDS AND HAVE FOUND THAT PAN NUMBER FOR THE CLIE NT CODE CJP1075 HAS BEEN UPLOADED INCORRECT ERRONEOUSLY IN BSE UCC. THE SAME WILL BE RECTIFIED FROM OUR END WITHIN 3 DAYS. FROM THE ABOVE, IT IS 5 ITA NO.41/MDS/2017 ABUNDANTLY CLEAR THAT THE ASSESSEE HAS NOT MADE ANY INVESTMENT IN ANY SHARES OR DERIVATIVES AGGREGATING TO RS.8,12,35 7/- AS HELD BY THE LD.AO WHICH WAS FURTHER UPHELD BY THE LD.CIT(A). I T APPEARS THAT THERE IS GROSS NEGLIGENCE ON THE PART OF THE LD. RE VENUE AUTHORITIES TO HAVE HELD THAT THE ASSESSEE HAD INVESTED IN SHARES AND DERIVATIVES AGGREGATING TO RS.8,12,357/-. THIS ERRONEOUS FINDIN G OF THE LD. REVENUE AUTHORITIES HAS PUT THE ASSESSEE INTO UNNEC ESSARY HARDSHIPS AND MENTAL STRAIN, WHICH COULD HAVE BEEN AVOIDED. C ONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE, I HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF RS.8,12,357/- MADE IN THE HANDS OF THE ASSESSEE UNDER THE HEAD UNEXPLAINED INVESTMENTS INVOKING THE PROVI SIONS OF SECTION 69 OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 29 TH MARCH, 2017. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# /CHENNAI, $% /DATED 29 TH MARCH, 2017 JR % '( )( /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. (-. / /DR 6. .0 /GF