Mr. T.Gnanasigamony, Kanyakumari V. ITO, Nagercoil

ITA 55/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4788 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 55/MDS/2010 ASSESSMENT YEAR : 2005-06 SHRI T. GNANASIGAMONY, P/O M/S. BRITTO SAW MILL & TIMBERS, AZHAGIMANDAPAM PO, KANYAKUMARI DISTRICT. V. THE INCOME-TAX OFFICER, WARD-I(1), NAGERCOIL. (PAN: ADBPS2576F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR RESPONDENT BY : SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL. O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-I, MADURAI IN ITA NO. 0104/08-09 DATED 21-12-2009 FOR THE ASSESSMENT YEAR 2005-06. 2. SHRI S. SRIDHAR, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS : I.T.A. NO.55/MDS/2010 2 1. THE ORDER OF THE CIT(APPEALS)-I, MADURAI DATED 21-12- 2009 IN ITA NO. 104/08-09 FOR THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT(APPEALS) ERRED IN ESTIMATING THE ASSESS ABLE PROFIT AT 0.5% OF THE SALES TURNOVER WITHOUT ASSIGN ING PROPER REASONS AND JUSTIFICATION. 3. THE CIT(APPEALS) ERRED IN ESTIMATING THE ASSESS ABLE INCOME AT 30% OF THE SAWING CHARGES RECEIVED IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 4. THE CIT(APPEALS) ERRED IN BRINGING TO TAX ` 29,07,550/- IN TERMS OF SECTION 69B OF THE ACT RELATING TO THE PROPERTY PURCHASED BY THE APPELLANT DURING THE PREVIOUS YEAR RELATING TO THE ASSESSMENT YEAR UNDER CONSIDERATION WITHOUT ASS IGNING PROPER REASONS AND JUSTIFICATION. 5. THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 69B OF THE ACT HAD NO APPLICATION TO THE FACTS OF THE CASE INASMUCH AS THERE WAS NO MATERIAL EVIDENCE EST ABLISHING AND PROVING THE PAYMENT MORE THAN THE STATED CONSID ERATION. 6. THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE VENDORS STATEMENT RELIED UPON HAD NO EVIDENTIARY VALUE AND BASED ION THE JUDICIAL PRECEDENTS, THE ADDITION MADE INVOKING SEC TION 69B OF THE ACT WAS WRONG, INCORRECT, UNJUSTIFIED, ERRONEOUS AN D NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. 7. THE CIT(APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO OPPORTUNITY GIVEN TO REBUT THE STATEMENT GIVEN BY T HE VENDOR INASMUCH AS THE STATEMENT OF THE VENDOR USED AGAINS T THE APPELLANT WAS NOT FURNISHED FOR REBUTTAL. I.T.A. NO.55/MDS/2010 3 8. THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE FINDINGS RECORDED IN THIS REGARD IN PARAS 6 TO 7.2 OF THE IM PUGNED ORDER WERE WRONG, INCORRECT, UNJUSTIFIED, ERRONEOUS AND N OT SUSTAINABLE BOTH ON FACTS AND IN LAW. 9. THE CIT(APPEALS) FAILED TO APPRECIATE THAT NON CONSIDERATION OF RELEVANT MATERIALS AND BINDING JUD ICIAL PRECEDENTS WOULD VITIATE THE IMPUGNED ORDER AS WELL AS THE ORDER OF ASSESSMENT. 10. THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE ORDER UNDER CONSIDERATION WAS PASSED OUT OF TIME, INVALID , PASSED WITHOUT JURISDICTION AND NOT SUSTAINABLE BOTH ON FA CTS AND IN LAW. 11. THE CIT(APPEALS) ERRED IN CHARGING INTEREST U/ S 234A, 234B & 234C OF THE ACT WITHOUT ASSIGNING PROPER REA SONS AND JUSTIFICATION. 12. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TIME OF HEARING. 4. IN REGARD TO GROUNDS 2 AND 3, IT WAS SUBMITTED B Y THE LEARNED AUTHORISED REPRESENTATIVE THAT THE LEARNED CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ESTIMATE OF THE ASSESSABLE PROFITS AND THE ASSESSABLE INCOME . 5. IN REPLY, THE LEARNED DR SUBMITTED THAT NO EVIDE NCE HAD BEEN PRODUCED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) OR BEFORE TH E ASSESSING OFFICER TO DELETE THE ESTIMATE OF 0.5% OF THE SALES TURNOVER. IN REG ARD TO THE ESTIMATION OF INCOME FROM THE SAWING CHARGES IT WAS SUBMITTED THAT THE A SSESSEE HAD ACCEPTED 20% DISALLOWANCE. HOWEVER, THE ASSESSING OFFICER HAD E STIMATED THE SAME AT 50% I.T.A. NO.55/MDS/2010 4 AND SUBSEQUENTLY REDUCED THE SAME TO 30%. IT WAS S UBMITTED BY THE LEARNED DR THAT THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE INCOME WAS LOWER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. EVEN B EFORE US THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE NOR PLACED AN Y SUBSTANTIAL ARGUMENTS TO SHOW THAT THE ORDER OF THE LEARNED CIT(A) ON THE IS SUE WAS WRONG OR THAT ANY DELETION WAS CALLED FOR. IN THE CIRCUMSTANCES, THE FINDING OF THE LEARNED CIT(A) ON BOTH THE ISSUES STANDS CONFIRMED. 7. IN REGARD TO THE REMAINING GROUNDS OF APPEAL WHI CH RELATE TO THE ADDITION OF ` 29,07,550/- MADE BY THE ASSESSING OFFICER ON ACCOU NT OF THE PURCHASE OF THE PROPERTY IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ADDITION HAD BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE STATEMENT RECORDED FROM THE SELLER BEING SHRI K. KOLAPPA PILL AI WHEREIN THE SELLER HAD CONFIRMED THAT THE SALE CONSIDERATION RECEIVED BY T HE SELLER WAS ` 35 LAKHS AND NOT ` 5,92,450/- AS DISCLOSED BY THE ASSESSEE. IT WAS T HE SUBMISSION THAT SHRI KOLAPPA PILLAI HAD NOT BEEN PUT TO THE ASSESSEE FOR CROSS EXAMINATION. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD ONLY SPENT ` 5,92,450/- FOR THE PURCHASE OF THE LAND. IT WAS THE SUBMISSION THAT THE DOCUMENT VALU E AS RECORDED WAS ONLY ` 4,88,425/- AS AGAINST THE MARKET VALUE OF ` 9,80,340/-. IT WAS THE SUBMISSION THAT THE FACT THAT THE VALUE DECLARED WAS LOWER THA N THE GUIDELINE VALUE FIXED ITSELF SHOWED THAT THE CLAIM OF THE SELLER COULD NOT BE BE LIEVED. IT WAS THE SUBMISSION I.T.A. NO.55/MDS/2010 5 THAT IF THE ASSESSEE WAS GRANTED AN OPPORTUNITY TO CROSS EXAMINE SHRI K. KOLAPPA PILLAI, HE WOULD BE ABLE TO PROVE HIS CLAIM. 8. IN REPLY, THE LEARNED DR SUBMITTED THAT HE HAD N O OBJECTION IF THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO GR ANT THE ASSESSEE OPPORTUNITY TO CROSS EXAMINE SHRI K. KOLAPPA PILLAI. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF THE STATEMENT RECORDE D FROM SHRI K. KOLAPPA PILLAI DURING THE SURVEY CONDUCTED ON 15.3.2006 AT THE BUS INESS PREMISES OF THE SELLER AND THE ASSESSEE HAS NOT BEEN GRANTED AN OPPORTUNIT Y TO CROSS EXAMINE SHRI K. KOLAPPA PILLAI, WE ARE OF THE VIEW THAT THE ADDITIO N CANNOT BE MADE ON ACCOUNT OF THE VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. IN THE CIRCUMSTANCES, THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO GR ANT THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE SHRI K. KOLAPPA PILLAI. NO OTHER ARGUMENTS HAVE BEEN PLACED BEFORE US AT THE TIME OF HEARING. IN THE CIRCUMSTA NCES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 10. THE ORDER WAS PRONOUNCED IN THE COURT ON 05-07- 2011. SD/- SD/- (ABARAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 05 TH JULY, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE