M.Palanisamy, Salem V. ITO, Salem

ITA 412/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8575 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: LAKSHMI VENKATARAMAN
• Section: 143(3); 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! ' . # , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.412 & 413/MDS/2016 ( / ASSESSMENT YEAR: 2009-10 & 2011-12) MR. M.PALANISAMY, 2/34, PETHANOOR, THALAVAIPATTY VILLAGE, SALEM-636 302. VS THE INCOME TAX OFFICER, WARD-2(3), SALEM. PAN:BOIPP7170R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.LAKSHMI VENKATARAMAN, C.A /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 12 TH SEPTEMBER,2016 /DATE OF PRONOUNCEMENT : 15 TH SEPTEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGGRIEV ED BY THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), SALEM DATED 17.12.2015 & 05.02.2016 IN ITA NOS.92 & 93/14-15 PASSED UNDER SE CTION 143(3) R.W.S. 147 & 250(6) OF THE ACT FOR THE ASSES SMENT YEAR 2009-10 AND 2011-12 RESPECTIVELY. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN BOTH THESE APPEALS, HOWEVER, THE CRUX OF THE COMMON ISSUE IS T HAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN SUSTAINING THE ADDITION OF ` 20,00,000/- (AS UNDISCLOSED 2 ITA NOS.412 & 413/MDS/2016 INCOME) AND ` 22,00,000/- ( RS.17.00 LAKHS AS SHORT TERM CAPITAL GAIN AND RS.5.00 LAKHS AS UNEXPLAINED EXPEN DITURE) FOR THE ASSESSMENT YEARS 2009-10 & 2011-12 RESPECTI VELY MADE BY THE LEARNED ASSESSING OFFICER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN BUSINESS OF UNDERTAKING JOB W ORK FOR MANUFACTURING SILVER JEWELLERY FILED HIS RETURN OF INCOME ON 05.03.2014 ADMITTING INCOME OF ` 1,70,750/- & 1,90,750/- FOR THE ASSESSMENT YEARS 2009-10 & 2011-12 RESPECTIVELY PURSUANT TO ACTION U/S. 147&148 OF THE ACT. THE CA SE WAS SELECTED FOR SCRUTINY AND NOTICES WERE ISSUED TO TH E ASSESSEE ON 06.03.2014. DURING THE COURSE OF SURVEY PROCEEDI NGS IN THE CASE OF ANOTHER ASSESSEE MR. A.RAJENDRAN, A STA TEMENT UNDER SECTION 131 WAS RECORDED FROM THE ASSESSEE MR . M.PALANISAMY ON 22.03.2011 BY THE ACIT., CIRCLE-II, COIMBATORE, WHEREIN THE ASSESSEE STATED THAT DURING THE MONTH OF FEBRUARY, 2011 THE ASSESSEE HAD SOLD LAND MEASURING 55 CENTS LOCATED AT SALATHAMPATTY VILLAGE TO MR. A.RAJENDRAN FOR SALE CONSIDERATION OF RS.42.00 LAKH S IN CASH. 3 ITA NOS.412 & 413/MDS/2016 HE ALSO STATED THAT THE LAND MEASURING 55 CENTS LOC ATED AT SALATHAMPATTY VILLAGE WAS PURCHASED BY HIM FOR ` 20.00 LAKHS DURING THE YEAR 2007 FROM SMT. UNNAMALAI, OMALUR AN D THE SAID LAND WAS SOLD TO MR. RAJENDRAN BY OBTAINING AD VANCE OF ` 20.00 LAKHS DURING OCTOBER, 2010 AND THE SALE DEED WAS EXECUTED DURING THE MONTH OF FEBRUARY, 2011 AGAINST THE PAYMENT OF THE BALANCE AMOUNT OF RS.22.00 LAKHS. H OWEVER, WHILE FURNISHING THE RETURN OF INCOME THE ASSESSEE DID NOT INCORPORATE THE ABOVE SAID TRANSACTION IN HIS RETUR N OF INCOME. IN A NOTE ATTACHED TO THE RETURN OF INCOME THE ASSESSEE HAD STATED THAT HE ACTED ONLY AS POWER AGE NT AND HE WAS NEVER IN POSSESSION OF THE PROPERTY OF SMT. UNNAMALAI & OTHERS. HE FURTHER STATED THAT THE PROP ERTY WAS SOLD FOR RS.1,68,000/- AND THE AMOUNT WAS HANDED OV ER TO SMT. UNNAMALAI. 4. THE LEARNED ASSESSING OFFICER DID NOT ACCEPT THE ABOVE STAND OF THE ASSESSEE BECAUSE HE OPINED THAT IT IS ONLY AN AFTERTHOUGHT AND AN ATTEMPT TO AVOID TAX. THEREAFT ER HE BROUGHT THE AMOUNT OF RS.20.00 & 22.00 LAKHS TO TAX FOR THE 4 ITA NOS.412 & 413/MDS/2016 RELEVANT ASSESSMENT YEARS 2009-10 & 2011-12 BY OBSE RVING AS FOLLOWS:- 4. THE ABOVE STAND OF THE ASSESSEE IS NOT ACCEPTABLE. THIS IS PURELY AN AFTERTHOUGHT AND AN ATTEMPT TO AV OID OFFERING AN EXPLANATION FOR THE SOURCE OF SOURCE OF THE PURCHASE CONSIDERATION OF RS.20 LAKHS PAID TO SMT. UNNAMALAI & ORS. THE ASSESSEE PURCHASED THE PROPERT Y FOR RS.20.00 LAKHS AND PAID THE AMOUNT ON DIFFERENT OCCASIONS DURING 2007 AND ULTIMATELY GOT REGISTERED IT BY POWER ON 15.04.2008 AND SOLD IT TO SHRI A.RAJENDRAN ON 21.02.11 ON EXECUTING HIS POWER. NOW THE ASSESSEE H AS NOW COME WITH A NEW THEORY OF FEAR FACTOR WHICH IS NOT ACCEPTABLE. IN THE STATEMENT RECORDED ON 22.03.2011 , THE ASSESSEE HAS CLEARLY STATED THAT HE PURCHASED THE SAID LAND FOR 20 LAKHS AND SOLD IT FOR RS.42 LAKHS TO SHRI A.RAJENDRAN AFTER INCURRING EXPENDITURE OF RS.5 LA KHS . AFTER A WEEKS TIME ASSESSEE IN A CLEAR FRAME OF MI ND HE HAS AGAIN AFFIRMED THE PURCHASE OF LAND FOR RS.20 L AKHS AND EXECUTION OF SALE FOR RS.42 LAKHS VIDE HIS LETT ER DATED 30.03.2011. 5. HENCE, IT IS EVIDENT THAT THE ASSESSEE PURCHASED THE PROPERTY FOR RS.20 LAKHS. SINCE THE PAYMENT DAT ES ARE NOT DISCLOSED, THE DATE OF EXECUTION OF POA IN FAVOUR OF THE ASSESSEE VIZ 15.04.2008 IS DEEMED TO BE THE DATE OF PURCHASE. FURTHER, THE ASSESSEE IS NOT IN A POSI TION TO EXPLAIN THE SOURCE FOR THIS AMOUNT WHICH IS EVIDENC ED BY HIS ATTEMPT TO DISASSOCIATE HIMSELF FROM THE TRANSA CTION BY LABELING HIMSELF AS A POA HOLDER ALONE. IN VIEW OF THIS FACT A SUM OF RS.20 LAKHS IS TREATED AS HIS INCOME OF THE PREVIOUS YEAR 2008-09 BEING THE UNEXPLAINED INVESTM ENT IN IMMOVABLE PROPERTY MADE BY THE ASSESSEE AND THE SAME IS ASSESSED AS HIS INCOME UNDER THE HEAD INCO ME FROM OTHER SOURCES. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) DISMISSED BOTH THE APPEALS OF THE ASSESSE E AGREEING WITH THE VIEWS OF THE LEARNED ASSESSING OF FICER. 5 ITA NOS.412 & 413/MDS/2016 6. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE ARGUED BY STATING THAT THE REVENUE DOES NOT HAVE AN Y DOCUMENTARY PROOF WITH RESPECT TO THE TRANSACTION A DMITTED BY THE ASSESSEE DURING THE COURSE OF SURVEY PROCEED INGS. HE FURTHER ARGUED BY STATING THAT ADDITIONS CANNOT BE MADE ONLY ON THE BASIS OF THE STATEMENT RECORDED FROM TH E ASSESSEE WHEN THERE ARE NO RECORDS TO SUBSTANTIATE THE SAME. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENT LY ARGUED BY SUBMITTING THAT SINCE THE ASSESSEE HAD A GREED FOR THE ADDITION AND ADMITTED THE TRANSACTION THERE WAS NO FURTHER SCOPE NOR NEED FOR MAKING ANY FURTHER ENQUIRY OR INVESTIGATION ON THE ISSUE. HENCE, HE PLEADED THAT THE ADDITION MAY BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. IT APPEA RS FROM THE FACTS OF THE CASE THAT ON THE INITIAL INVESTIGATION ITSELF THE 6 ITA NOS.412 & 413/MDS/2016 ASSESSEE HAD SPILLED THE BEAN BY ADMITTING TO THE TRANSACTION. SINCE THE ASSESSEE HAD ADMITTED THE TR ANSACTION UNDER OATH, THE LEARNED ASSESSING OFFICER DID NOT P ROCEED FURTHER TO MAKE ANY FURTHER INVESTIGATION. THUS, TH E ADMISSION OF THE ASSESSEE HAS PREVENTED THE REVENUE FROM ACQU IRING FURTHER DOCUMENTARY EVIDENCE AND OTHER RELEVANT MAT ERIALS TO ESTABLISH THE GENUINENESS OF THE STATEMENT RECORDED FROM THE ASSESSEE. IN THESE CIRCUMSTANCES, WE ARE OF THE CON SIDERED VIEW THAT THE ENTIRE MATTER HAS TO BE REEXAMINED BY THE LEARNED ASSESSING OFFICER AFRESH. DURING THE COURSE OF ARGUMENTS, THE LEARNED AUTHORIZED REPRESENTATIVE SU BMITTED THAT THE REVENUE HAD NOT HANDED OVER THE REMAND REP ORT OF THE LEARNED ASSESSING OFFICER TO THE ASSESSEE AND T HE COPY OF THE STATEMENTS RECORDED DURING THE COURSE OF SUR VEY TO DEFEND HIS CASE. HE FURTHER REQUESTED THAT THE SAM E MAY BE HANDED OVER TO THE ASSESSEE WHICH WILL ASSIST THE A SSESSEE TO DEFEND HIS CASE. THE LEARNED AUTHORIZED REPRESE NTATIVE ALSO POINTED OUT THAT THE ASSESSEE HAD NOT SUBMITTE D THE POWER OF ATTORNEY EXECUTED IN FAVOUR OF HIM WITH RE SPECT TO THE SALE OF LAND. CONSIDERING THE ABOVE AVERMENTS O F LEARNED 7 ITA NOS.412 & 413/MDS/2016 AUTHORIZED REPRESENTATIVE AND LEARNED DEPARTMENTAL REPRESENTATIVE WE HEREBY DIRECT BOTH THE PARTIES, T O HANDOVER THE AFORESAID DOCUMENTS PROMPTLY FOR ENABL ING THEM TO PURSUE THE MATTER. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15 TH SEPTEMBER, 2016 SD/- SD/- ( ! ' . # ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 15 TH SEPTEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF