M.Deivanai, Karur V. ITO, Karur

ITA 526/CHNY/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5005 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 02-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Assessee Lawyers: G VARDINI KARTHIK
• Keywords: Gift; Depreciation
• Section: 143(3); 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NOS.524 TO 527/CHNY/2017 / ASSESSMENT YEARS: 2005-06, 2008-09 TO 2010-11) SMT. M. DEIVANAI, NO.MND, 50/26, NARASIMHAPURAM, MIDDLE STREET, KARUR 639 001. VS THE INCOME TAX OFFICER, WARD 1, KARUR 639 001 PAN: AOEPD5817L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MS. G. VARDINI KARTHIK, ADVOCATE / RESPONDENT BY : SHRI SAILENDRA MAMIDI, CIT /DATE OF HEARING : 23.01.2019 /DATE OF PRONOUNCEMENT : 31.01.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-19, CHENNAI, DATED 05.01.2017 IN ITA NO.707, 710, 709, 708, 706/14-15 FOR THE ASSESSMENT YEARS 2005-06, 2008-09, 2009-10 & 2010-11 PASSED U/S.250(6) R.W.S. 143(3) & 153C OF THE ACT. 2 ITA NOS.524 TO 527/CHNY/2017 2. THE ASSESSEE HAS RAISED THE FOLLOWING IDENTICAL GROUNDS IN ALL HER APPEALS:- 1. THE ORDER OF THE CIT (A) - 19, CHENNAI, IN ITA: 706/14-15, 708/14-15, 709/14-15 & 710/14-15 IN RESPECT OF AY 2005-06, 2008-09, 2009-10 & 2010-11 RESPECTIVELY TO THE EXTENT DETRIMENTAL TO THE APPELLANT, IS AGAINST LAW, FACTS OF THE CASE AND MATERIAL EVIDENCE ON RECORD. 2. THE CIT (A) -19 FAILED TO APPRECIATE THAT APPELLANT WAS A DIVORCEE AND BEING THE ONLY DAUGHTER OF HER PARENTS, SHE LIVED WITH HER PARENTS SINCE HER DIVORCE IN 2002 AND THAT APPELLANT'S FATHER WAS A BUS CUM LORRY OPERATOR FOR OVER THREE DECADES AND WAS REGULARLY ASSESSED TO TAX BY THE ITO, KARUR. 3. THE CIT (A) - 19 ERRED IN OBSERVING AT PAGE 7, PARAGRAPH 6B THAT APPELLANT'S FATHER FILED HIS RETURNS OF INCOME ON 29.07.2011 FOR ALL THE YEARS ONLY AFTER THE SEARCH, CONTRARY TO THE FACT THAT HE HAD BEEN FILING RETURNS REGULARLY ADMITTING INCOME FROM OPERATING A BUS AND LORRIES SINCE AY 1992-93 AND INCOME BEFORE DEPRECIATION ADMITTED AND ASSESSED FOR AY 92-93 TO 2003-04 WAS RS.37.66 LAKHS AND FOR THE ASSESSMENT YEARS 2008- 09 TO 2010-11, INCOME BEFORE DEPRECIATION ADMITTED AND ASSESSED BEFORE THE DATE OF SEARCH WAS RS.39.5 LAKHS. 4. THE CIT (A) - 19 FAILED TO APPRECIATE THAT APPELLANT'S OPENING CAPITAL OF RS.10,42,500 AS ON 31.03.2004, IMMEDIATELY AFTER DIVORCE, WAS OUT OF ALIMONY RECEIVED, VALUABLES SOLD AND CASH GIFTS RECEIVED FROM FATHER, AND THEREFORE, ERRED IN SUSTAINING THE ORDER OF THE A.O. THAT OUT OF THE OPENING CAPITAL, RS.5,00,000 WAS UNEXPLAINED INCOME OF THE APPELLANT FOR THE ASSESSMENT YEAR 2005-06. FOR THE ASSESSMENT YEARS 2008-09 TO 2010-11, THE CIT(A) -19 FAILED TO APPRECIATE THAT APPELLANTS FATHER FILED HIS RETURNS FOR AY 2006-07 TO 2010- 11 ON 29.07.2011 IN CONTINUATION OF HIS OBLIGATION TO FILE TAX RETURNS AND NOT TO COVER UP HIS GIFT OF RS.2,00,000 / RS.3,00,000 TO HIS ONLY DAUGHTER AND INCOME ADMITTED WAS MORE THAN SUFFICIENT TO MEET THE GIFTS TO APPELLANT. THE CIT(A) OUGHT TO HAVE ACCEPTED THE GIFTS IN FULL. 5. IN ANY EVENT THE CIT (A) OUGHT TO HAVE HELD THAT THE ENTIRE OPENING CAPITAL WAS FULLY EXPLAINED IN THE FACTS AND CIRCUMSTANCES OF THE CASE, 3 ITA NOS.524 TO 527/CHNY/2017 MORE PARTICULARLY CAPITAL ACCUMULATION HAPPENED AT A TIME WHEN SHE WAS ENTIRELY DEPENDENT ON HER FATHER AFTER HER DIVORCE. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING APPELLANT PRAYS THAT THE HONBLE TRIBUNAL MAY BE PLEASED TO DELETE THE ADDITION AND RENDER JUSTICE. ADDITIONAL GROUNDS IN ITA NO.524 527/CHNY/2017 FOR THE ASSESSMENT YEARS 2005-06, 2008-09 TO 2010-11 1. THE ASSESSMENT OUGHT TO HAVE BEEN MADE U/S 153A AS THE APPELLANT WAS ALSO SEARCHED. AS SUCH THE TIME LIMIT FOR MADE ASSESSMENT ORDER EXPIRED ON 31.12.2012 WHEREAS THE ASSESSMENT ORDER WAS PASSED ON 28.03.2013, AND IS BARRED BY LIMITATION. 2. THE RESPONDENT OUGHT TO HAVE FURNISHED SATISFACTION NOTE AS CONTEMPLATED U/S 153C (1) OF THE INCOME TAX ACT, 1961. 3. THE RESPONDENT ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSMENT HAS BEEN COMPLETED WITHIN THE TIME LIMIT AS ENUNCIATED U/S 153B. EVEN ASSUMING THAT SECTION 153C IS APPLICABLE, THE ASSESSMENT IS TIME BARRED. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/S.132 OF THE ACT HAS BEEN CONDUCTED IN THE CASE OF SHRI T. MUNIAPPAN, SHRI T. ELANGOVAN AND SHRI V.T. KUMARAVEL. THE ASSESSEE BEING THE FIRST WIFE OF SHRI T. MUNIAPPAN AND THOUGH SEPARATED, ACTION U/S.153C WAS ALSO INITIATED AGAINST HER AND HER PREMISES WAS SEARCHED. THEREAFTER ASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S. 153C OF THE ACT ON 28.03.2013 FOR THE RELEVANT ASSESSMENT YEARS WHEREIN THE LD.AO HAD MADE THE FOLLOWING ADDITIONS AS DETAILED BELOW: 4 ITA NOS.524 TO 527/CHNY/2017 ASSESSMENT YEAR ADDITIONS MADE BY THE LD.AO 2005-06 UNEXPLAINED OPENING CREDIT IN THE CAPITAL ACCOUNT RS.5,42,500/- INCOME FROM HOUSE PROPERTY RS.12,600/- 2008-09 UNPROVED GIFT FROM HER FATHER RS.2,00,000/- UNEXPLAINED LOANS RS.8,00,000/- INCOME FROM HOUSE PROPERTY RS.12,600/- 2009-10 UNPROVED GIFT FROM HER FATHER RS.2,00,000/- UNEXPLAINED LOANS RS.3,00,000/- INCOME FROM HOUSE PROPERTY RS.12,600/- 2010-11 UNPROVED GIFT FROM HER FATHER RS.3,00,000/- UNEXPLAINED LOANS RS.5,50,000/- INCOME FROM HOUSE PROPERTY RS.12,600/- ON APPEAL, THE LD.CIT(A) VIDE HIS ORDER DATED 05.01.2007 GAVE RELIEF TO THE ASSESSEE PARTLY AND ALSO REMITTED CERTAIN ISSUES BACK TO THE FILE OF LD.AO. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4. AT THE OUTSET THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSEE IS A DIVORCEE AND THE ONLY DAUGHTER OF HER PARENTS LIVING ALONG WITH THEM WITH THE SUPPORT EXTENDED BY HER FATHER. THE ASSESSEES FATHER IS A BUS CUM LORRY OPERATOR FILING HIS RETURN OF INCOME REGULARLY. THE LD. AR FURTHER EXPLAINED THAT THE ASSESSEES OPENING CAPITAL WAS OUT OF THE ALIMONY RECEIVED FROM THE DIVORCE PROCEEDING, VALUABLES SOLD AND CASH GIFTS RECEIVED FROM HER FATHER. FURTHER IT WAS SUBMITTED BEFORE US THAT THE LD.AO 5 ITA NOS.524 TO 527/CHNY/2017 WHO CONDUCTED THE SEARCH HAS NOT RECORDED SATISFACTION IN THE CASE OF THE ASSESSEE FOR INITIATING ACTION U/S.153A R.W.S. 153C OF THE ACT. THE LD.AR FURTHER SUBMITTED THAT THOUGH THE ASSESSEE HAD REQUESTED A COPY OF THE SATISFACTION RECORDED BY THE RELEVANT REVENUE AUTHORITIES, THE SAME WAS NOT FURNISHED TO HER TILL DATE. IT WAS THEREFORE PLEADED THAT THE LD.AO WAS NOT VESTED WITH VALID JURISDICTION U/S.153A R.W.S.153C OF THE ACT AND ACCORDINGLY REQUESTED FOR QUASHING THE ORDERS OF THE LD.REVENUE AUTHORITIES. THE LD.DR COULD NOT CONTROVERT TO THE SUBMISSION MADE BY THE LD.AR. 5. WHEN THE BENCH QUERIED THE LD.DR, THE LD.DR COULD NOT FURNISH THE SATISFACTION RECORDED BY THE APPROPRIATE AUTHORITIES FOR INITIATING ACTION U/S.153A R.W.S 153C OF THE ACT IN THE CASE OF THE ASSESSEE. CONSIDERING THE SUBMISSION OF THE ASSESSEE AND HER PRESENT SITUATION AND THE INABILITY OF THE REVENUE TO PRODUCE THE SATISFACTION RECORDED FOR INITIATING ACTION U/S.153A R.W.S. 153C OF THE ACT, WE DO NOT HAVE ANY OTHER OPTION BUT TO QUASH THE ORDERS PASSED BY THE LD.REVENUE AUTHORITIES. MOREOVER THE ADDITION MADE FOR ALL THE RELEVANT ASSESSMENT YEARS ARE ALSO NOT HUGE CONSIDERING THE FINANCIAL STATUS OF THE ASSESSEE. THEREFORE IN THE 6 ITA NOS.524 TO 527/CHNY/2017 INTEREST OF JUSTICE WE HEREBY QUASH THE ORDERS PASSED BY THE LD.AO U/S.143(3) R.W.S.153A, 153C OF THE ACT FOR ALL THE RELEVANT ASSESSMENT YEARS IN THE CASE OF THE ASSESSEE. IT IS ORDERED ACCORDINGLY. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THE 31 ST JANUARY, 2019 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 31 ST JANUARY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF