Vivek @ Vivekanandan, CHENNAI V. ACIT, CHENNAI

ITA 596/CHNY/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7975 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 06-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 24-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Opportunity of being heard; Validity of assessment; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ' # . $ & ' BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A. NO. 596/MDS/2015 / ASSESSMENT YEAR : 2005-06 SHRI V IVEK @ VIVEKANANDAN, F-21, MAJESTIC PARK APARTMENT, RAJESH AVENUE, SALIGRAMAM, CHENNAI - 600 093. [PAN: AAFPV 1982K] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(5), CHENNAI. ( / APPELLANT) ( / RESPONDENT) ) * / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.) * / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT * /DATE OF HEARING : 06.02.2017 * /DATE OF PRONOUNCEMENT : 06.02.2017 /O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISE OUT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)(CENTRAL) -II, CHENNAI VIDE PROCEEDINGS IN ITA NO. 346/10-11 DATED 18.02.2014 FOR THE ASSESSME NT YEAR 2005-06 AGAINST :-2-: I.T.A. NO. 596/MDS/2015 THE ORDER OF ASSESSMENT PASSED BY THE ACIT CENTRAL CIRCLE -II(5), CHENNAI (HEREIN AFTER REFERRED TO AS LD. AO) U/S. 144 R.W.S. 147 OF THE INCOME TAX ACT (HEREIN AFTER REFERRED TO AS THE ACT) DATED 29.12.2010. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS BEFORE U S. BUT THE PRINCIPAL GROUND REVOLVES ON THE VALIDITY OF ASSESSMENT FRAME D U/S. 144 R.W.S. 147 OF THE ACT FOR THE ASSESSMENT YEAR 2005-06, WHEN THE ASSES SMENT WAS ORIGINALLY FRAMED U/S. 153A OF THE ACT PURSUANT THE SEARCH CONDUCTED ON 26.10.2005 FOR THE VERY SAME ASSESSMENT YEAR. APART FROM THIS, THE ASSESSE E HAS ALSO QUESTIONED THE LEGALITY OF THE ADDITION MADE IN THE SUM OF RS. 1,3 4,05,000/- TOWARDS UNEXPLAINED INVESTMENT IN PROPERTY IN THE IMPUGNED ASSESSMENT ORDER. 3. THE BRIEF FACT OF THIS ISSUE IS THAT THE ASSESSE E IS A FILM ACTOR DERIVING PROFESSIONAL INCOME THEREON. THERE WAS A SEARCH U/ S. 132 OF THE ACT CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 26.10.2005 AND A SSESSMENT WAS FRAMED U/S. 153A OF THE ACT ON 31.12.2007 FOR THE VARIOUS ASSES SMENT YEARS INCLUDING THE ASSESSMENT YEAR 2005-06, WHICH IS THE YEAR UNDER AP PEAL BEFORE US. THE ADDITIONS MADE IN THIS 153A PROCEEDINGS FOR THIS AS SESSMENT YEAR WERE SUBJECTED TO FURTHER APPEAL BY THE ASSESSEE AND THE MATTER HA D REACHED UP TO TRIBUNAL. LATER, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2005- 06 WAS RE-OPENED U/S. 147 OF THE ACT ON THE GROUND THAT THERE WERE CERTAIN UN EXPLAINED INVESTMENTS IN PROPERTY MADE BY THE ASSESSEE TO THE TUNE OF RS. 1, 34,05,000/- WHICH ACCORDING TO THE LD. AO HAD ESCAPED ASSESSMENT AND ACCORDINGL Y HE ISSUED NOTICE U/S. 148 :-3-: I.T.A. NO. 596/MDS/2015 OF THE ACT. THE ASSESSEE VIDE LETTER DATED 18.08.2 010 INTIMATED THAT THE RETURN FILED ON 09.11.2006 MAY BE TREATED AS THE RETURN FI LED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THE LD. AO HAD TABULATED THE BASIS OF FRAMING AN ADDITION TOWARDS UNEXPLAINED INVESTMENT IN HIS ASSESSMENT OR DER IN THE SUM OF RS. 1,34,05,000/- AS BELOW: SL.NO DESCRIPTION OF PROPERTY SALE DISCLOSURE DIFFERENCE 01. LAND AT PORUR RS. 50,00,000 RS. 20,00,000 RS.30,00,000 02. PROPERTY AT DURAI ARASAN RS. 45,00,000 RS. 23,00,000 RS. 22,00,000 03. LAND AT PADMAVATHI NAGAR TOWARDS CONSTRUCTION RS. 98,00,000 RS. 59,45,000 RS. 38,55,000 04. LAND COST AT PADMAVATHI NAGAR RS. 55,00,000 RS. 30,00,000 RS. 25,00,000 05. LOGAIAH NAIDU COLONY RS. 37,75,000 RS. 22,75,000 RS. 15,00,000 06. MADHANADAPURAM RS. 12,00,000 RS. 8,50,000 RS. 3,50,000 THE ASSESSMENT WAS FRAMED BY THE LD. AO U/S. 144 OF THE ACT AS STATED (SUPRA). HENCE, THERE WAS NO ACTION FOR THE ASSESSEE TO PUT- FORTH HIS ARGUMENTS/EXPLANATIONS WITH REGARD TO THE SUBJECT M ENTIONED ISSUE OF INVESTMENT IN PROPERTY BEFORE THE LD. AO. BEFORE T HE LD. CIT(A), THE ASSESSEE STATED THAT THE ASSESSEE HAD DISCLOSED A SUM OF RS. 1.5 CRORES IN THE ASSESSMENT YEAR 2006-07 DURING THE COURSE OF SEARCH AS PART OF DISCLOSURE FOR WHICH NO MATCHING ASSETS/OUTGOINGS WERE FOUND BY THE SEARCH PARTY AND HENCE THAT MONEY IS AVAILABLE FOR EXPLAINING THE INVESTMENT IN PROPERTIES. IT WAS ALSO EXPLAINED THAT ALL THE PROPERTIES OF THE ASSESSEE H AD BEEN DULY BROUGHT INTO BOOKS OF ACCOUNTS OF THE ASSESSEE AND IT HAD ALREAD Y BEEN DULY CONSIDERED IN THE PROCEEDINGS FRAMED U/S. 153A OF THE ACT AND HENCE T HERE WAS NO NEED TO MAKE A :-4-: I.T.A. NO. 596/MDS/2015 SEPARATE ADDITION TOWARDS THE SAME IN THE RE-OPENED ASSESSMENT U/S. 144 R.W.S. 147 OF THE ACT. THE LD. CIT(A) HOWEVER, DID NOT AG REE TO THE CONTENTIONS OF THE ASSESSEE PROCEEDED TO UPHOLD THE ADDITION MADE BY T HE LD. AO. AGGRIEVED, THE ASSESSEE IS IN THE APPEAL BEFORE US. 4. THE LD. AR REITERATED THE ARGUMENTS MADE BEFORE THE LOWER AUTHORITIES AND ARGUED BY FILING A CHART EXPLAINING THE DISCLOS URE OF VARIOUS AMOUNTS TOWARDS INVESTMENT IN VARIOUS PROPERTIES COMMENCING FROM AS SESSMENT YEAR 2002-03 TO ASSESSMENT YEAR 2005-06 IN THE BALANCE SHEET OF THE ASSESSEE, ARGUED THAT THE ENTIRE PROPERTIES WERE ALREADY FOUND RECORDED IN TH E BOOKS OF ACCOUNTS OF THE ASSESSEE AND HENCE, THERE IS NO NEED FOR MAKING ANY SEPARATE ADDITION TOWARDS UNEXPLAINED INVESTMENT IN PROPERTIES AS STATED BY T HE LD. AO IN THE RE-OPENED PROCEEDINGS. THE CHART FILED BY THE LD. AR IS REPR ODUCED HEREIN: SL. NO YEAR OF PURCHASE A.Y 2002-03 A.Y 2003-04 A.Y 2004-05 A.Y 2005-06 TOTAL 01. LAND COST AT PADMAVATHI NAGAR 1000000 700000 1300000 0 3000000 02. PROPERTY AT DURAI ARASAN ST 0 0 0 2600000 2600000 03. PADMAVATHI NAGAR - CONSTRUCTION 0 0 5945239 3176053 9121292 04. LAND AT PORUR 2275000 123198 0 0 2398198 05. PROPERTY AT LOGAIYA NAIDU COLONY 0 2118454 0 0 2118454 06. MADHANANTAPURAM - RAJA RAJESWARI NAGAR 0 0 850000 0 850000 NOTE: PADRNAVATHI NAGAR CONSTRUCTION HAS BEEN SEPAR ATELY DEALT BY THE DEPARTMENT IN THE ASSESSMENT YEAR 2005-06 AND THE ADDITION IN RESPECT OF THE SAME HAS BEEN RESTRICTED TO RS.6,08,775/ - BY THE ORDER OF THE CI T IN ITA NO.265/07 -08 DATED :-5-: I.T.A. NO. 596/MDS/2015 20.01.2009. THE SAME ISSUE WAS ALSO UPHELD BY THE I TAT AND THE DEPARTMENT APPEAL HAS BEEN DISMISSED. SO ONCE AGAIN AN ADDITIO N IN RESPECT OF THE SAME AMOUNTING TO RS.38,58,000/- IS TOTALLY UNWARRANTED AND UNREASONABLE AND SHOULD BE DELETED. THE AMOUNT DISCLOSED IN RESPECT OF DURAIARASAN STRE ET PROPERTY IN THE STATEMENT FILED IS RS.26,00,000/ - BUT IT HAS BEEN WRONGLY TA KEN AS RS.23,00,000/- IN THE ORDER. THE AMOUNT DISCLOSED IN RESPECT OF LAND AT PORUR IN THE STATEMENT FILED IS RS.23,98,198/- BUT IT HAS BEEN WRONGLY TAKEN AS RS. 20,00,000/- IN THE ORDER. 5. THE LD. AR ALSO ARGUED THAT SINCE THE ASSESSMENT WAS FRAMED EX-PARTE U/S. 144 OF THE ACT, THERE WAS NO OCCASION TO EXPLA IN THIS BASIC FACT BEFORE THE LD. AO BY THE ASSESSEE IN THE RE-OPENED PROCEEDINGS AND ACCORDINGLY PRAYED FOR SETTING ASIDE OF THIS ISSUE TO THE FILE OF THE LD. AO FOR RE-VERIFICATION OF THE ENTIRE DATA FOR PROPER APPRECIATION OF THE FACTS ON RECORD . IN RESPONSE TO THIS, LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIALS AVAILABLE ON RECORD. THE FACTS STATED HERE IN REMAIN UNDISPUTED (EXCEPT TO THE EXTENT OF ADDITION MADE) AND HENCE THE SAME ARE NOT REITERATE D HEREIN FOR THE SAKE OF BREVITY. WE FIND FROM THE PERUSAL OF THE FACTS ON RECORD AND THE EVIDENCE FILED IN THE FORM OF CHART BY THE LD. AR TOGETHER THAT SUPPO RTING EVIDENCE THEREON, THE MATTER REQUIRES RE-VERIFICATION BY THE LD. AO FOR P ROPER APPRECIATION OF THE FACTS. ACCORDINGLY, WE DEEM TO IT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO SET ASIDE THIS ISSUE TO THE FILE OF THE LD . AO AND DECIDE THE SAME AFRESH, IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT T HE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. SINCE, WE A RE SETTING ASIDE THIS ISSUE TO :-6-: I.T.A. NO. 596/MDS/2015 THE FILE OF THE LD. AO AND DECIDE THE SAME AFRESH I N ACCORDANCE WITH LAW AND IN VIEW OF THE FACT THAT THE ASSESSMENT FRAMED WAS EX- PARTE U/S. 144 OF THE ACT, THE ASSESSEE IS AT LIBERTY TO ADDUCE FRESH EVIDENCE S AND RAISE ALL THE LEGAL ISSUES, IF ANY, IN THE SET ASIDE PROCEEDINGS AND CO-OPERATE IN THE SPEEDY DISPOSAL OF THE SAME IN THE INTEREST OF JUSTICE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 0 6TH DAY OF FEBRUARY, 2017 AT CHENNAI. SD/ - ( ' # . $ ) (DUVVURU RL REDDY) /JUDICIAL MEMBER SD/ - ( ) (M. BALAGANESH) / ACCOUNTANT MEMBER /CHENNAI, 3 /DATED: 06TH FEBRUARY, 2017 JPV * -&45 65 /COPY TO: 1. ) APPELLANT 2. -.) /RESPONDENT 3. 7 ( )/CIT(A) 4. 7 /CIT 5. 5 -&& /DR 6. 9 /GF