ITO 30 (3)(1), MUMBAI V. RAMNATHAN KRISHNAN, MUMBAI

ITA 5717/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9135 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDOOL RAJ SINGH LD
• Assessee Lawyers: RAKESH JOSHI LD
• Keywords: Residential status; Additional evidence; Tax effect; Reassessment proceedings
• Section: 69A; 147; 144

Judgement Text

ITA NO.5717/MUM/2018 ASSESSMENT YEAR: 2009-10 RAMNATHAN KRISHNAN 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.5717/MUM/2018 ( / ASSESSMENT YEAR : 2009-10 ) INCOME TAX OFFICER - 30 ( 3 )( 1 ) C-13, 6 TH FLOOR, R.NO.603 PRATYAKSHKAR BHAWAN BKC, BANDRA (EAST) MUMBAI 400051 / VS. SHRI RAMNATHAN KRISHNAN 1003B, 10 TH FLOOR GREEN VILLAGE VENTURES EXPRESS ZONE BUILDING PATEL VANIKA, WE HIGHWAY MALAD (E), MUMBAI-400 097. %& ./ ./PAN/GIR NO. DULPK-9988-K ( &( /APPELLANT ) : ( )*&( / RESPONDENT ) ASSESSEE BY : SHRI RAKESH JOSHI-LD. AR REVENUE BY : SHRI UDOOL RAJ SINGH-LD. DR / DATE OF HEARING : 05/08/2020 / DATE OF PRONOUNCEMENT : 05/08/2020 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR 2009-10 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-41, MUMBAI DATED 19/07/2018 ON CERTAIN GROUNDS OF APPEAL. THE ORDER UNDER CHALLENGE IS COMMON ORDER FOR AYS 2009-10 & 2010-11 . ITA NO.5717/MUM/2018 ASSESSMENT YEAR: 2009-10 RAMNATHAN KRISHNAN 2 2. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE ( AR), SHRI RAKESH JOSHI, AT THE OUTSET, SUBMITTED THAT THE TAX EFFECT OF QUANTUM ADDITIONS BEING AGITATED BY THE REVENUE IS BELOW THE PRESCRIB ED MONETARY LIMIT OF RS.50 LACS AND THEREFORE THE APPEAL IS NOT MAINTAIN ABLE IN TERMS OF RECENTLY ISSUED LOW TAX EFFECT CIRCULAR NO. 17/2019 DATED 08/08/2019 [F.NO.279/MISC. 142/2007-TTJ(PT.) ISSUED BY CBDT. T HIS RECENT CIRCULAR FURTHER ENHANCES THE MONETARY LIMIT FIXED IN EARLIE R CIRCULAR NO.3 OF 2018 DATED 11/07/2018 ISSUED BY CBDT AS AMENDED ON 20/08 /2018. 3. ON THE OTHER HAND, LD. DR CONTROVERTED THE SAME BY PLACING ON RECORD ASSESSING OFFICERS LETTER DATED 24/09/2019. THE CONCLUDING PARA OF THE SAID LETTER READ AS UNDER: - IV. THAT AS PER THE ABOVE PROVISIONS, THE TAX EFFEC T INVOLVED IN THE SUBJECT OF APPEAL IS BELOW THE PRESCRIBED MONETARY LIMITS. THAT TAX EFFECT INVOLVED FOR A.Y. 2009-10 IS RS.44 LAKHS, WHEREAS THE TE INVOLVED IN A.Y.2010-11 IS APPROX. RS.55 LAKHS. HOWEVER, SINCE THE ADDITION IS MADE IN RESPECT OF FOREIGN REMITTANCES, IN LIGHT OF THE PARA 10 OF THE CIRCULAR NO. 3/2018 DATED 11/07/2018, THE ASSESSEES CASE IS SQUARELY COVERED UNDER THE EXCEPTION CLAUSE OF UNDISCLOSED FOREIGN ASSETS / FOREIGN BANK ACCOUNT / REMITTANCE NOT SHOWN IN THE RETURN OF INCOME BY VIRTUE OF WHICH, THE DEPARTMENT IS PRECLUDED FROM WITHDRAWING THE APPEAL FROM THE APPELLATE AUTHORITIES ON THE BA SIS OF THE PRESCRIBED MONETARY LIMITS. IT HAS ALSO BEEN SUBMITTED IN OPENING PARA OF THE S AID LETTER THAT THE STATUS OF THE ASSESSEE, IN THE ASSESSMENT ORDER, HA S BEEN MENTIONED AS RESIDENT. HOWEVER, AS PER REMAND REPORT SUBMITTED BY AO TO CI T(A)-41 VIDE DATED 20/04/2018, IT WAS STATED THAT THE ASSES SEE WAS A NON- RESIDENT DURING THIS YEAR AS HE WAS IN INDIA ONLY F OR A PERIOD OF 7 DAYS. HOWEVER, SINCE THE ASSESSEE HAS RECEIVED CERTAIN AM OUNTS FROM THREE INDIAN COMPANIES IN INDIA, IN WHICH HE WAS DIRECTOR , THE SAME WOULD BE ITA NO.5717/MUM/2018 ASSESSMENT YEAR: 2009-10 RAMNATHAN KRISHNAN 3 TAXABLE IN THE HANDS OF THE ASSESSEE IRRESPECTIVE O F HIS RESIDENTIAL STATUS. THUS, LD. DR WOULD CONTROVERT THE POSITION TAKEN BY LD. AR. 4. WE HAVE CAREFULLY PERUSED THE CASE RECORDS. WE F IND THAT FOR AY 2009-10, THE ASSESSEE HAS BEEN SADDLED WITH ADDITIO NS OF RS.132.70 LACS IN AN ASSESSMENT FRAMED U/S 144 R.W.S. 147 ON 26/12/2016. THE SAID ADDITION WAS MADE SINCE AS PER INFORMATION REC EIVED FROM DDIT(INV.), THE ASSESSEE MAINTAINED ONE BANK ACCOUN T WITH ICICI BANK, NARIMAN POINT BRANCH AND RECEIVED FOREIGN REMITTANC ES OF RS.132.70 LACS IN THE SAID ACCOUNT. HOWEVER, NO RETURN OF INC OME WAS FILED BY THE ASSESSEE FOR YEAR UNDER CONSIDERATION WHICH RESULTE D INTO INITIATION OF REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE. ALTH OUGH THE ASSESSEE MADE CERTAIN SUBMISSIONS TO LD. AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS, HOWEVER, THE SAME COULD NOT FIND FAVOR WITH LD. AO WHO ULTIMATELY ADDED THE SAID AMOUNT AS UNEXPLAINED MON EY U/S 69A IN THE HANDS OF THE ASSESSEE. 5. DURING APPELLATE PROCEEDINGS, THE ASSESSEE SUBMI TTED CERTAIN ADDITIONAL EVIDENCES WHICH WERE SUBJECTED TO REMAND PROCEEDINGS. AFTER PERUSING THE MATERIAL ON RECORD, REMAND REPORTS, BA NK STATEMENTS ETC., LD. CIT(A) DELETED THE IMPUGNED ADDITIONS IN ITS EN TIRETY SINCE LD. AO FAILED TO ESTABLISH THAT CREDIT ENTRIES IN THE SAID ACCOUNT REPRESENTED TAXABLE INCOME IN INDIA. PERTINENTLY, OUT OF AGGREG ATE ADDITIONS OF RS.132.70 LACS, AN AMOUNT OF RS.59.44 LACS WAS ADMI TTED BY LD. AO HIMSELF DURING REMAND PROCEEDINGS THAT THE SAID AMO UNT REPRESENTED TRANSFER FROM ASSESSEES OWN NRE ACCOUNT. AGGRIEVED AS AFORESAID, THE REVENUE IS IN FURTHER APPEAL BEFORE US. ITA NO.5717/MUM/2018 ASSESSMENT YEAR: 2009-10 RAMNATHAN KRISHNAN 4 6. FROM THE ABOVE FACTS, THE UNDISPUTED POSITION TH AT EMERGES IS THAT THE ASSESSEE HAS RECEIVED CERTAIN CREDITS IN ICICI BANK ACCOUNT MAINTAINED IN INDIA. THE SAID CREDIT, INTER-ALIA, REPRESENTED TRANSFER FROM ASSESSEES OWN NRE ACCOUNT AS WELL AS REIMBURSEMENT OF EXPENSES ON BEHALF OF CERTAIN CORPORATE ENTITIES. AS SUCH, THER E WAS NO UNDISCLOSED FOREIGN INCOME / UNDISCLOSED FOREIGN ASSETS (INCLUD ING FINANCIAL ASSETS)/ UNDISCLOSED FOREIGN BANK ACCOUNT IN TERMS OF CLAUSE (D) OF PARA 10 OF CIRCULAR NO. 3/2018 DATED 11/07/2018 AS AMENDED VID E CIRCULAR DATED 20/08/2018. THE BANK ACCOUNT UNDER QUESTION WAS MAI NTAINED IN INDIA IN WHICH REMITTANCES WERE RECEIVED FROM ABROAD. THEREF ORE, THE PLEA RAISED BY THE REVENUE COULD NOT BE ACCEPTED. NO OTHER EXCE PTION COULD BE POINTED OUT BY REVENUE WHICH WOULD PRECLUDE IT TO W ITHDRAW THE APPEAL UNDER QUESTION. THEREFORE, WE CONCUR WITH THE SUBMI SSIONS OF LD. AR THAT THE TAX EFFECT OF QUANTUM ADDITIONS BEING CONT ESTED BY THE REVENUE IS, PRIMA-FACIE, BELOW THRESHOLD MONETARY LIMIT OF RS.50 LACS AND TH E APPEAL IS NOT MAINTAINABLE IN TERMS OF RECENTLY ISS UED LOW TAX EFFECT CIRCULAR NO. 17/2019 DATED 08/08/2019 [F.NO.279/MIS C. 142/2007- TTJ(PT.) ISSUED BY CBDT. THIS RECENT CIRCULAR FURTH ER ENHANCES THE MONETARY LIMIT FIXED IN EARLIER CIRCULAR NO.3 OF 20 18 DATED 11/07/2018 ISSUED BY CBDT AS AMENDED ON 20/08/2018. IN VIEW O F THE SAME, THE APPEAL IS NOT MAINTAINABLE. THE INVESTIGATION ARM O F THE INCOME TAX DEPARTMENT IS AN INTERNAL ORGAN OF THE DEPARTMENT A ND THEREFORE, THE SAME WOULD NOT FALL UNDER THE CATEGORY OF EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES AS ENVISAGED BY CLAUSE 10(E) OF THE SAID CIRCULAR. ITA NO.5717/MUM/2018 ASSESSMENT YEAR: 2009-10 RAMNATHAN KRISHNAN 5 7. AT THE SAME TIME, A LIBERTY IS GIVEN TO REVENUE TO SEEK RECALL OF THE APPEAL, IF AT A LATER STAGE, IT IS FOUND THAT THE M ATTER IS COVERED BY ANY EXCEPTIONS PROVIDED IN ANY OF THE CIRCULAR OR IN CA SE THE TAX EFFECT AS AGITATED BY REVENUE EXCEEDS THE PRESCRIBED MONETARY LIMIT. 8. IN THE RESULT, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/08/2020 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )*&( / THE RESPONDENT 3. 1 ( ) / THE CIT(A) 4. 1 / CIT CONCERNED 5. 23),4 , 4 , / DR, ITAT, MUMBAI 6. 3567 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.