Patrick Kurian, Kodaikanal V. ITO, Dindigul

ITA 749/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86306 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: T VASUDEVAN
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 749/MDS/2014 ( / ASSESSMENT YEAR: 2008-09) PATRICK KURIAN, MANOR, LAKE ROAD, KODAIKANAL-624 101. VS INCOME TAX OFFICER, WARD-I(1), DINDIGUL. PAN: ARWPP4822G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. T.VASUDEVAN, ADVOCATE /RESPONDENT BY : MR. S. DAS GUPTA, JCIT /DATE OF HEARING : 14 TH JANUARY, 2015 /DATE OF PRONOUNCEMENT : 13 TH FEBRUARY, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, MAD URAI DATED 31.01.2014 FOR THE ASSESSMENT YEAR 2008-09. THE ONLY GRIEVANCE OF THE ASSESSEE IN THE APPEAL IS THA T COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE AMOUNT OF ` 4,90,000/- AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. 2. BRIEF FACTS ARE THAT ASSESSING OFFICER WHILE COM PLETING THE ASSESSMENT MADE ADDITION OF ` 12,90,000/- AS 2 ITA NO.749/MDS/2014 UNEXPLAINED INVESTMENT REPRESENTING ADVANCES GIVEN BY THE ASSESSEE TO THREE PERSONS AND WERE SHOWN AS LIABILI TY AS ON 31.03.2008. THE ASSESSING OFFICER TREATED THE SAID AMOUNT OF ` 12,90,000/- AS UNEXPLAINED INVESTMENTS OF THE ASS ESSEE FOR THE REASON THAT ALL THE TRANSACTIONS WERE NOT R EFLECTED IN THE ASSET SIDE OF THE BALANCE SHEET AND HE PRESUMED THAT TRANSACTIONS WERE MADE OUTSIDE THE BOOKS OF ACCOUNT , EVEN THOUGH THE ASSESSING OFFICER HIMSELF ACCEPTS THAT TRANSACTIONS IN RESPECT OF JESSY KURIAN FOR AN AMOU NT OF ` 6,00,000/- AND MAHESH B.JETHWANI FOR AN AMOUNT OF ` 2,00,000/- ARE GENUINE. IN THE CASE OF MR. R.VENKA TACHALAM WHERE THE ASSESSEE HAS GIVEN ADVANCE OF ` 4,90,000/- , THE ASSESSING OFFICER FOUND IN THE CONFIRMATION LETTER THAT PURPOSE OF ADVANCE IS NOT MENTIONED BY MR. VENKATACHALAM. O N APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) ACCEPT ED THE TRANSACTIONS IN RESPECT OF JESSY KURIAN AND MAHESH B.JETHWANI AS GENUINE AND DELETED THE ADDITION IN R ESPECT OF THOSE TWO PERSONS. COMING TO THE TRANSACTION IN RES PECT OF ` 4,90,000/- WITH MR. R.VENKATACHALAM, COMMISSIONER O F INCOME TAX (APPEALS) CONFIRMED THE ADDITION FOR THE REASON THAT TRANSACTION WAS MADE IN CASH AND THE CONFIRMAT ION LETTER ISSUED BY MR. R.VENKATACHALAM DID NOT SPECIFY THE R EASON FOR 3 ITA NO.749/MDS/2014 ADVANCING THE AMOUNTS TO HIM. THE ASSESSEE IS IN AP PEAL BEFORE US. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ADVANC E WAS GIVEN TO MR. R.VENKATACHALAM FOR PURCHASE OF LAND A ND THE TRANSACTION WAS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS COULD BE SEEN FROM THE LEDGER ACCOUNT, IT WAS CLEARLY MENTIONED THAT AMOUNT WAS GIVEN AS ADVANCE FOR PURCHASE OF LAND. THE RECIPIENT MR. R.VENKATACHALAM HAD ALSO CONFIRMED THAT HE IS RESIDING AT ANANDAGIRI TO WN, KODAIKANAL TALUK AND RECEIVED THE SAID AMOUNT OF ` 4,90,000/- ON 26.10.2007 FROM THE ASSESSEE AS ADV ANCE AMOUNT. COUNSEL FOR THE ASSESSEE SUBMITS THAT THER E IS NO JUSTIFICATION IN REFUSING THE SUBMISSION OF THE ASS ESSEE THAT HE HAS ADVANCED MONEY FOR PURCHASE OF LAND TO MR. VENKATACHALAM AND FOR THE REASON THAT RECIPIENT HA S NOT MENTIONED THE PURPOSE FOR WHICH THE ADVANCE WAS GIV EN, WHEN IN FACT ACCEPTED THAT HE HAS RECEIVED ` 4,90,000/- AS ADVANCE MONEY WHICH IS NOTHING BUT AMOUNT WAS GIVEN TO HIM AS ADVANCE MONEY FOR PURCHASE OF LAND BY THE AS SESSEE. THEREFORE, COUNSEL PLEADS THAT ADDITION MAY BE DELE TED. 4 ITA NO.749/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES IN MAKING THE ADDITION AS UNEXPLA INED INVESTMENT. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE MATERIALS PLACED ON RECORD. THE COMMISSION ER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION OF ` 4,90,000/- IN RESPECT OF ADVANCE GIVEN TO MR. R.VENKATACHALAM STATING THAT ASSESSEE HAS NOT GIVEN ADVANCE, THE ADVANCE WA S NOT MADE THROUGH DEMAND DRAFT / CHEQUE AND THE ADVANCE WAS NOT EXPLAINED. ON GOING THROUGH THE CONFIRMATION LE TTER, WE FIND THAT MR. R.VENKATACHALM CONFIRMS THAT HE IS RE SIDING AT ANANDAGIRI TOWN, KODAIKANAL TALUK AND HE HAS RECEIV ED AMOUNT OF ` 4,90,000/- ON 26.10.2007 FROM THE ASSESSEE RESIDING AT LAKE ROAD, KODAIKANAL AS ADVANCE AMOUNT . ON A PERUSAL OF THE LEDGER ACCOUNT OF MR. R.VENKATACHALA M IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, IT IS ALSO CLEAR THAT CASH WAS PAID TO MR. VENKATACHALAM AS ADVANCE FOR PURCHA SE OF LAND ON 26.10.2007. ON A READING OF THE ASSESSMENT ORDER, WE ALSO FIND THAT ASSESSEE ALSO PAID SIMILAR ADVANC E TO MR. MAHESH B.JETHWANI FOR PURCHASE OF LAND BY WAY OF D EMAND DRAFT THROUGH CENTRAL BANK OF INDIA, KODAIKANAL BRA NCH. THE 5 ITA NO.749/MDS/2014 ASSESSING OFFICER ACCEPTED THIS PAYMENT AS ADVANCE FOR PURCHASE OF LAND FOR THE REASON THAT ASSESSEE HAS M ADE PAYMENT THROUGH DEMAND DRAFT WHEREAS WE FIND THAT I N THE CASE OF MR. R.VENKATACHALAM, SINCE THE AMOUNT WAS P AID IN CASH, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE VIEW THAT ADVANCE WAS NOT PROPERLY EXPLAINED. IN OU R VIEW, THE ASSESSING OFFICER HAVING NOT DOUBTED THE GENUIN ENESS OF THE CONFIRMATION LETTER AND THE BOOKS OF ACCOUNT MA INTAINED BY THE ASSESSEE, THIS TRANSACTION STOOD EXPLAINED P ROPERLY. IF THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF TH E CONFIRMATION LETTER, HE WOULD HAVE ISSUED SUMMONS T O THE RECIPIENT. IN THE ABSENCE OF ANY SUCH EXERCISE, WE DO NOT FIND THAT THE CONFIRMATION GIVEN BY MR. R.VENKATACHALAM IS NOT GENUINE. IN THE CIRCUMSTANCES, WE DELETE THE ADDITI ON OF ` 4,90,000/- AND ALLOW THE GROUND RAISED BY THE ASSE SSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 13 TH DAY OF FEBRUARY, 2015 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 13 TH FEBRUARY, 2015 SOMU 6 ITA NO.749/MDS/2014 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .