Nitesh Chajjed, CHENNAI V. ITO, CHENNAI

ITA 553/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96361 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 18-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 17-03-2015
• Court: TRIBUNAL
• Department Lawyers: P ADHAKRISHNANJCIT
• Assessee Lawyers: T BANUSEKARC A
• Section: 143(3); 133A; 147; 148

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHENNAI . , , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.553 /MDS./2015 ( !' / ASSESSMENT YEAR :2009-10) MR.NITESH CHAJJED , NO.191,V.M.STREET, MIRSAHIBPET, CHENNAI 600 014. VS. INCOME TAX OFFICER, BUSINESS WARD IX-(1), CHENNAI 600 006. PAN AACPC 7264 L ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.T.BANUSEKAR,C.A '(#$ % & / RESPONDENT BY : MR.P.ADHAKRISHNAN,JCIT, D.R ) !* % +, / DATE OF HEARING : 18 .09.2015 -' % +, /DATE OF PRONOUNCEMENT : 13.11.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-II, CHENN AI DATED ITA NO.553 /MDS/2015 2 28.11.2014 IN ITA NO.1747/2013-14 PASSED UNDER SEC. 143(3) READ WITH SECTION 147 & SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED FIVE ELABORATE GROUNDS IN HIS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT:- (I) THE LD. CIT (A) HAD ERRED IN CONFIRMING THE OR DER OF THE LD. ASSESSING OFFICER WITH RESPECT TO REOPENING OF ASSE SSMENT U/S. 147/148 OF THE ACT. (II) THE LD. CIT (A) HAD ERRED IN CONFIRMING THE O RDER OF THE LD. ASSESSING OFFICER BY DISALLOWING A SUM OF ` 7,10,000/- AS UNEXPLAINED INCOME UNDER THE HEAD INCOME FROM OTHE R SOURCES. 3.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL, AND HAD FAILED TO FILE HIS RETURN OF IN COME FOR THE ASSESSMENT YEAR 2009-10. PURSUANT TO THE SURVEY CON DUCTED UNDER SECTION 133A OF THE ACT IN THE BUSINESS PREMISES OF SMT.LEELA SURANA, A SHARE SUB-BROKER ON 25.11.2009, IT CAME T O LIGHT THAT THE ASSESSEE HAD MADE CASH PAYMENTS OF ` 6,80,000/- ON 17.09.2008 ITA NO.553 /MDS/2015 3 AND ` 30,000/- ON 24.09.2008 TO SMT. LEELA SURANA FOR PUR CHASE OF SHARES AND HAD OBTAINED BACK DATED CONTRACT NOTE FOR THE PURCHASE OF 4,700 SHARES OF SHYAM STAR. SUBSEQUENTLY THE A SSESSEE HAD SOLD THESE SHARES ON 17.09.2008 AND 24.09.2008 FOR ` 6,75,838.61 & ` 27,378.47 AND REMITTED THE SALE PROCEEDS TO HIS BAN K ACCOUNT. 3.2 A NOTICE U/S.148 WAS ISSUED TO THE ASSESSEE ON 23.09.2011 SINCE THE ASSESSEE HAD NOT FILED HIS RETURN OF INCO ME FOR THE RELEVANT ASSESSMENT YEAR. IN RESPONSE, THE ASSESSEE FILED HI S RETURN OF INCOME ON 27.10.2011 ADMITTING HIS TOTAL INCOME AS ` 1,68,570/- INCLUDING AGRICULTURAL INCOME OF ` 7,000/-. THEREAFTER THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S 147 OF TH E ACT ON 25.03.2013 WHEREIN THE LD.AO MADE AN ADDITION OF `. 7,10,000/- (6,80,000 + 30,000) AS THE UNEXPLAINED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES SINCE THE ASSESSEE HAD NOT EXPLAINED THE SOURCE FOR THE CASH PAYMENT OF ` 7,10,000/- TO SMT.LELA SURANA FOR THE PURCHASE OF SHARES. 4. WITH RESPECT TO REOPENING, THE LD. CIT (A) OPIN ED AS FOLLOWS:- ITA NO.553 /MDS/2015 4 I) THE PRESENT CASE IS A CASE OF REOPENING OF ASSE SSMENT WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR. CONSEQUENTLY THE LD. ASSESSING OFFICER WAS NOT REQU IRED TO ESTABLISH THAT THE INCOME ESCAPED WAS DUE TO THE FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERI ALS RELEVANT TO THE ASSESSMENT. II) RELIANCE WAS PLACED IN THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF PRAJUL CHUNILA PAEL VS. M.J. MAKWANT REPORTED IN 236 ITR 832 & P&H HIGH COURT IN THE CASE OF VEN US INDUSTRIAL CORPORATION VS. ACIT REPORTED IN 236 ITR 742. 5. BEFORE US THE LD. A.R. REITERATED HIS SUBMISSIO NS MADE BEFORE THE LD. CIT (A) IN REGARD TO OPENING U/S. 147 /148 OF THE ACT. ON THE OTHER HAND LD. D.R ARGUED IN SUPPORT OF THE ORDERS OF THE LD. ASSESSING OFFICER AND LD. CIT (A) AND PLEADED THAT THE ADDITIONS MAY BE SUSTAINED. WE HAVE HEARD BOTH THE PARTIES AND CA REFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. WITH RESPECT TO THE FIRST ISSUE OF REOPENING, IT IS EVIDENT THAT THE CASE WAS REOPENED WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THERE FORE, THE FIRST ITA NO.553 /MDS/2015 5 PROVISO OF SEC 147 WILL NOT BE APPLICABLE TO THE CA SE OF THE ASSESSEE. IN SUCH CIRCUMSTANCES AS HELD BY THE LD. CIT (A), T HE LD. ASSESSING OFFICER IS EMPOWERED TO REOPEN THE ASSESSMENT IF HE HAS REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED FROM THE ASSESS MENT. IT IS NOT REQUIRED BY THE REVENUE TO SHOW THAT INCOME WHICH H AS ESCAPED ASSESSMENT WAS DUE TO THE FAILURE ON THE PART OF TH E APPELLANT TO DISCLOSE FULLY AND TRULY ALL THE MATERIALS RELEVANT TO THE ASSESSMENT. THEREFORE, THE CASE LAWS RELIED BY THE LD. CIT (A) IS APPROPRIATE TO THE FACTS OF THE CASE OF THE ASSESSEE. MOREOVER, IN THE CASE BEFORE US, THE LD. ASSESSING OFFICER HAS REOPENED THE ASSE SSMENT BECAUSE HE HAD INFORMATION DUE TO THE SURVEY CONDUCTED U/S. 133A OF THE ACT IN THE BUSINESS PREMISES OF SMT. LEELA SURANATHAT T HE ASSESSEE HAD MADE CASH PAYMENT DURING THE RELEVANT ASSESSMENT YE AR I.E. ON 17.09.2008 AND 24.09.2008 OF ` 6,80,000/- AND ` 30,000/- RESPECTIVELY AGAINST WHICH HE HAD OBTAINED BACK DATED CONTRACT N OTE FOR THE PURCHASE OF RS.4700 SHARES OF SHYAM STAR. THEREFO RE, THE LD. ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVISION S OF SECTION 147 & 148 OF THE ACT. ACCORDINGLY WE UPHOLD THE ORDER OF THE REVENUE ON THIS ISSUE. ITA NO.553 /MDS/2015 6 6. ON MERITS, THE LD. A.R SUBMITTED THE TRIAL BALA NCE OF THE ASSESSEE DATED 31.03.2008 WHEREIN IT WAS STATED THA T THE ASSESSEE HAD INVESTED IN THE PURCHASE OF 4,700 SHARES OF M/S . SHYAM STAR GEM ON 03.04.2007 TO ESTABLISH THAT THE ASSESSEE HA D INVESTED IN THE SHARES DURING THE ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS ALSO PRODUCED THE CONTRACT NOTE ISSUED BY SMT.LEELA SURANA, DATED 03.04.2007 TO SUPPORT THE SAME. HOWEVER, THERE IS N O REFERENCE ABOUT THE STATEMENT OF ACCOUNTS SUBMITTED BEFORE US BY BOTH THE REVENUE AUTHORITIES IN THEIR RESPECTIVE ORDERS. THE REFORE, IN THE INTEREST OF JUSTICE WE HEREBY REMIT BACK THE MATTER TO THE FILE OF LD. ASSESSING OFFICER TO EXAMINE THE VERACITY OF THE ST ATEMENT OF ACCOUNTS FURNISHED BEFORE US AND THE GENUINENESS OF THE SAME AND THEREAFTER PASS APPROPRIATE ORDER AS PER LAW AND ME RITS. THE ASSESSEE IS ALSO HEREBY DIRECTED TO CO-OPERATE WITH THE REVENUE IN THE PROCEEDINGS IN ORDER TO EXPEDITE THEIR ORDERS F AILING WHICH THE REVENUE SHALL BE AT LIBERTY TO COMPLETE THE PROCEED INGS BASED ON THE MATERIALS BEFORE THEM. IT IS ORDERED ACCORDINGLY. ITA NO.553 /MDS/2015 7 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 13 TH NOVEMBER, 2015 AT CHENNAI. SD/- ( . ! ' ) (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER CHENNAI, DATED THE 13 TH NOVEMBER, 2015 . K S SUNDARAM. . % '+/ 0 10'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 2+ ( ) /CIT(A) 4. ) 2+ /CIT 5. 0!56 '+ 7 /DR 6. 68 9* /GF ITA NO.553 /MDS/2015 8