Dr.R.S.Murugesan MS, Thiruvarur V. DCIT, Thanjavur

ITA 743/CHNY/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7447 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-01-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 18-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: D ANAND
• Keywords: Gift; Difference of opinion; Change of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NOS. 742 & 743/MDS/2009 ASSESSMENT YEARS : 2001-02 & 2002-03 DR. R. S. MURUGESAN, MS, YASODHA CLINIC, MUTHUPET, THIRUTHURAIPOONDI TALUK, THIRUVARUR DISTRICT, PIN : 614 704 V. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-I, THANJAVUR. [PAN: AAOPM9334P] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D. ANAND, ADVOCATE RESPONDENT BY : SHRI K.P. GOPAKUMAR, JCIT DATE OF HEARING : 19-01-2012 DATE OF PRONOUNCEMENT : 19-01-2012 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO. 742/MDS/2009 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS), TIRUCHIRAPALLI IN ITA NO. 272/07-08 DATED 03-03-2009 FOR THE ASSESSMENT YEAR 2001-02. ITA NO. 743/MDS/2009 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(APPEA LS), TIRUCHIRAPALLI IN ITA NO. 273/07-08 DATED 03-03-2009 FOR THE ASSESSMENT YEAR 2002-03. I.T.A. NOS. 742 & 743/MDS/2009 2 2. SHRI D. ANAND, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.P. GOPAKUMAR, LEARNED JCIT REPRESENTED ON BEHALF OF TH E REVENUE. 3. IN REGARD TO ITA NO. 742/MDS/2009 IT WAS SUBMITT ED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE HAS CHA LLENGED THE ISSUE OF RE-OPENING OF THE ASSESSMENT IN GROUNDS 2 & 3 AND IN GROUNDS 4 TO 6 THE ASSESSEE HAS CHALLENGED THE ADDITIONS SUSTAINED BY THE LEARNED C IT(A) ON MERITS. IT WAS THE SUBMISSION THAT THE ASSESSEE IS A DOCTOR BY PROFESS ION AND HE WAS RUNNING A CLINIC AT MUTHUPET, THIRUTHURAIPOONDI TALUK OF THIRUVARUR DISTRICT. IT WAS THE SUBMISSION THAT A SURVEY WAS CONDUCTED ON 10-01-2003 ON THE PR EMISES OF THE ASSESSEES CLINIC. IT WAS THE SUBMISSION THAT NOTHING INCRIMI NATING WAS FOUND IN THE COURSE OF THE SURVEY. IT WAS THE SUBMISSION THAT THE ASSESSM ENT FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 WAS TAKEN UP AND IN THE COURSE OF THE ASSESSMENT THE COST OF CONSTRUCTION OF THE BUILDING IN WHICH THE ASSESSEE WAS RUNNING HIS CLINIC WAS CONSIDERED. IT WAS THE SUBMISSION THAT THE ASSESSE E FOR THE PURPOSE OF EXPLAINING THE COST OF CONSTRUCTION HAD SHOWN LOAN FROM HIS WI FE TO THE EXTENT OF ` 1.45 LAKHS OUT OF WHICH THE ASSESSING OFFICER HAD ACCEPTED ` 1 LAKH BEING THE SOURCE EXPLAINED FROM THE SALE OF LANDS FOR WHICH DETAILS HAD BEEN F URNISHED. IT WAS THE SUBMISSION THAT AN AMOUNT OF ` 45,000/- WAS TREATED AS UNEXPLAINED ON THE GROUND THAT THE ASSESSEES WIFE COULD NOT SHOW HOW SHE SAVED ` 45,000/- TOWARDS PIN MONEY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD RECEIVE D A LOAN OF ` 70,000/- FROM HIS FATHER AND THE ASSESSING OFFICER ACCEPTED ` 30,000/- ON THE GROUND THAT THE I.T.A. NOS. 742 & 743/MDS/2009 3 ASSESSEES FATHER WAS A CENTRAL GOVERNMENT EMPLOYEE AND DISALLOWED ` 40,000/-. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD RECEIVE D GIFT FROM HIS FATHER-IN-LAW OF AN AMOUNT OF ` 2 LAKHS. IT WAS THE SUBMISSION THAT THIS AMOUNT W AS SHOWN BY SUPPLY OF BRICKS AS THE ASSESSEES FATHER-IN-LAW WA S HAVING A BRICK KILN. THE ASSESSING OFFICER HAD DISALLOWED ` 70,000/- OUT OF THE SAME ON THE GROUND THAT THE BRICKS SUPPLIED BY THE FATHER-IN-LAW WERE NOT CHAMB ER BRICKS BUT WERE KACHA BRICKS WHICH COULD BE USED ONLY FOR CONSTRUCTING COMPOUND WALL OR SEPTIC TANK ETC. IT WAS THE FURTHER SUBMISSION THAT THE ISSUES IN THE APPEA L HAD ALREADY BEEN CONSIDERED BY THE ASSESSING OFFICER IN THE COURSE OF ORIGINAL ASS ESSMENT FOR THE ASSESSMENT YEAR 2002-03. IT WAS THE SUBMISSION THAT THE ORIGINAL A SSESSMENT FOR THE ASSESSMENT YEAR 2002-03 HAD BEEN COMPLETED UNDER SECTION 143(3 ) ON 23-02-2005 WHEREIN THE COST OF CONSTRUCTION DISCLOSED BY THE ASSESSEE HAD ALSO BEEN ACCEPTED. HE PLACED BEFORE US THE COPY OF THE ORIGINAL ASSESSMENT FOR T HE ASSESSMENT YEAR 2002-03 PASSED UNDER SECTION 143(3) ON 23-02-2005. IT WAS THE SUBMISSION THAT THE RE- OPENING FOR THE ASSESSMENT YEAR 2001-02 WAS ONLY ON A CHANGE OF OPINION WHICH WAS NOT PERMISSIBLE. 4. IN REPLY, THE LEARNED DR SUBMITTED THAT FOR THE ASSESSMENT YEAR 2001-02 THERE WAS NO ASSESSMENT UNDER SECTION 143(3) ORIGIN ALLY. THE RETURN FILED HAD BEEN PROCESSED U/S. 143(1). IT WAS THE SUBMISSION THAT CONSEQUENTLY IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F ACIT V. RAJESH JHAVERI STOCK BROKERS P. LTD. REPORTED IN 291 ITR 500 (SC) THE RE -OPENING WAS VALID. IT WAS THE I.T.A. NOS. 742 & 743/MDS/2009 4 FURTHER SUBMISSION THAT IN REGARD TO THE ADDITIONS THE PERSONS WHO HAD CLAIMED TO HAVE GIVEN THE LOANS TO THE ASSESSEE WERE NOT SHOWN TO HAVE THE CAPACITY TO GIVE THE SAID LOANS. HE VEHEMENTLY SUPPORTED THE ORDERS OF THE LEARNED CIT(A) AND THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001-02 WAS OR IGINALLY PROCESSED UNDER SECTION 143(1). IT IS NOT AN ASSESSMENT UNDER SECT ION 143(3). EACH ASSESSMENT YEAR IS SEPARATE. CONSEQUENTLY, IN VIEW OF THE DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS P . LTD., REFERRED TO SUPRA, THE RE- OPENING AS DONE BY THE ASSESSING OFFICER AND AS CON FIRMED BY THE LEARNED CIT(A) IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERF ERENCE. 6. IN REGARD TO THE MERITS OF THE ADDITION IT IS NO TICED THAT THE LOAN TAKEN FROM THE ASSESSEES WIFE IS OF AN AMOUNT OF ` 1,45,000/-. THE ASSESSING OFFICER HAS ACCEPTED ` 1,00,000/- OUT OF THE SAME. THE LOAN FROM THE ASS ESSEES FATHER IS OF AN AMOUNT OF ` 70,000/-. THE ASSESSING OFFICER HAS ACCEPTED ` 30,000/-. IN REGARD TO THE LOAN FROM THE ASSESSEES FATHER-IN-LA W IN THE FORM OF BRICKS TO AN EXTENT OF ` 2 LAKHS THE ASSESSING OFFICER HAS ACCEPTED ` 1,30,000/- OUT OF THE SAME. ADMITTEDLY, ALL THE THREE PERSONS HAVE CONFIRMED BE FORE THE ASSESSING OFFICER THAT THEY HAD GIVEN THE GIFTS. ONCE THE DONORS HAVE CON FIRMED HAVING GIVEN THE GIFTS, IF THE ASSESSING OFFICER DISPUTES THE CAPACITY OF THE DONORS, THE ADDITION WOULD BE CALLED FOR IN THE HANDS OF THE DONORS AND NOT IN TH E HANDS OF THE RECIPIENT. IN THE I.T.A. NOS. 742 & 743/MDS/2009 5 CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ADDITION S AS SUSTAINED BY THE LEARNED CIT(A) TO AN EXTENT OF ` 45,000/- BEING THE LOAN FROM THE ASSESSEES WIFE, ` 40,000/- BEING THE LOAN FROM THE ASSESSEES FATHER AND ` 70,000/- BEING THE GIFT FROM THE ASSESSEES FATHER-IN-LAW, ARE NOT ON A RIG HT FOOTING AND ARE LIABLE TO BE DELETED AND WE DO SO. IN THE CIRCUMSTANCES, THE AP PEAL OF THE ASSESSEE IN ITA NO. 742/MDS/2009 STANDS PARTLY ALLOWED. 7. IN REGARD TO ITA NO. 743/MDS/2009 IT WAS SUBMITT ED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE HAS CHA LLENGED THE RE-OPENING OF THE ASSESSMENT IN GROUNDS 1 TO 4 AND THE MERITS OF THE ADDITION IN GROUNDS 5 AND 6. IT WAS THE SUBMISSION BY THE LEARNED AUTHORISED REPRES ENTATIVE THAT THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) HAD BEEN COMPLETED ON 23-02-2005. IT WAS THE SUBMISSION THAT EVEN THE SURVEY ON THE PREMISES OF THE ASSESSEE DID NOT YIELD ANY DISCREPANCIES. IT WAS THE SUBMISSION THAT THE ASSE SSING OFFICER HAD GOT THE PROPERTY OF THE ASSESSEE VALUED BY THE DVO. IT WAS THE SUBMISSION THAT THE REASONS RECORDED FOR THE RE-OPENING OF THE ASSESSME NT WERE ALSO NOT ON ACCOUNT OF THE VALUATION OF THE COST OF CONSTRUCTION OF THE AS SESSEES PREMISES. IT WAS THE SUBMISSION THAT THE RE-OPENING WAS PURELY ON A CHAN GE OF OPINION. THE LEARNED AUTHORISED REPRESENTATIVE DREW OUR ATTENTION TO THE REASONS RECORDED FOR THE PURPOSE OF RE-OPENING AT PAGE 2 OF THE ASSESSMENT O RDER. IT WAS THE SUBMISSION THAT IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. I.T.A. NOS. 742 & 743/MDS/2009 6 KELVINATOR OF INDIA LTD. REPORTED IN 320 ITR 561 (S C), THE REOPENING WAS LIABLE TO BE QUASHED. 8. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDERS OF THE LEARNED CIT(A) AND THE ASSESSING OFFICER. IT WAS THE SUBMI SSION THAT AS THE SOURCE FOR THE COST OF CONSTRUCTION WAS NOT EXPLAINED, THE RE-OPEN ING WAS LIABLE TO BE UPHELD. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 143(3) FOR TH E ASSESSMENT YEAR 2002-03 CLEARLY SHOWS THAT THE COST OF CONSTRUCTION HAS BEE N VERIFIED BY THE ASSESSING OFFICER IN THE COURSE OF ORIGINAL ASSESSMENT. THE SOURCE FOR THE CONSTRUCTION BEING THE GIFT RECEIVED FROM THE FATHER-IN-LAW IN THE FOR M OF BRICKS AS ALSO THE LOANS TAKEN HAVE BEEN BROUGHT BEFORE THE ASSESSING OFFICER IN T HE COURSE OF ORIGINAL ASSESSMENT. A PERUSAL OF THE REASONS RECORDED, AS EXTRACTED IN THE ASSESSMENT ORDER UNDER DISPUTE, CLEARLY SHOWS THAT THE RE-OPEN ING HAS BEEN DONE ONLY ON ACCOUNT OF THE ASSUMPTION THAT THE PERSONS WITH MEA GER INCOMES HAVE CLAIMED TO HAVE GIVEN LARGE AMOUNTS TO THE ASSESSEE AND THAT T HE ASSESSEES WIFE DID NOT HAVE THE SOURCE AND THE SAME HAD TO BE VERIFIED SO ALSO IN REGARD TO THE INADEQUACY OF DRAWINGS BY THE ASSESSEE. THE END RESULT OF THE AS SESSMENT IS AN ADDITION REGARDING THE GIFT FROM THE FATHER-IN-LAW AND PRIVA TE LOANS TAKEN. CLEARLY, THE REASONS RECORDED ARE ONLY ON A CHANGE OF OPINION AN D CONSEQUENTLY IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT V. KELVINATOR OF INDIA LTD., REFERRED TO SUPRA, THE RE-OPENING ON THE BASIS OF C HANGE OF OPINION IS NOT I.T.A. NOS. 742 & 743/MDS/2009 7 PERMISSIBLE. CONSEQUENTLY, THE RE-OPENING OF THE A SSESSMENT FOR THE ASSESSMENT YEAR 2002-03 IS HELD TO BE INVALID AND CONSEQUENTLY THE ASSESSMENT IS ALSO HELD TO BE INVALID. IN THE CIRCUMSTANCES THE ASSESSEES AP PEAL IN ITA NO. 743/MDS/2009 STANDS ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 742/MDS/2009 IS PARTLY ALLOWED AND THE APPEAL OF THE ASSESSEE IN ITA NO. 7 43/MDS/2009 IS ALLOWED. 11. THE ORDER WAS PRONOUNCED IN THE COURT ON 19/01/ 2012. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 19 TH JANUARY, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE