ITO, Erode V. P.Muthukumar, Erode

ITA 751/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7570 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Capital Gains
• 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; 142(1); 201

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 751 /MDS/201 6 / ASSESSMENT YEAR :20 09 - 1 0 THE INCOME TAX OFFICER , WARD 1 ( 4 ), ERODE . VS. SHRI P. MUTHUKUMAR, B - 64, SAMPATH NAGAR, ERODE 638 011. [PAN:A JBPM2680C ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI MOHAMMED MUSTAFA, JCIT / RESPONDENT BY : SHRI S. SRIDHAR , A D VOCATE / DATE OF HEARING : 08 . 1 2 .201 6 / DATE OF P RONOUNCEMENT : 0 3. 0 3 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) 3 , C OIMBATORE , DATED 31 . 12 .201 5 RELE VANT TO THE ASSESSMENT YEAR 20 09 - 1 0 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF .1,63,11,370/ - MADE TOWARDS SHORT TERM CAPITAL GAINS . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN COMMISSION BUSINESS AND RELIABLY LEARNED FROM THE REGISTRATION DEPARTMENT I.T.A. NO. 751 /M/16 2 THAT THE ASSESSEE HAS PURCHASED A LAND FOR .3,34,800/ - ON 17.07.2008 AT BOOTHAKUDI VILLAGE, ILLUPUR TALUK, PUDUKOTTAI DISTRICT AND SOLD FOR .1,66,75,000/ - ON 30.07.2008 , WHICH CLEARLY ATTRAC TS CAPITAL GAIN. HOWEVER, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME FOR THIS ASSESSMENT YEAR. AS THE ASSESSEE HAS SUPPRESSED THE INCOME ATLEAST TO THE EXTENT OF .1,63,40,200/ - , THE ASSESSING OFFICER BELIEVED TH AT THERE WAS AN ESCAPEMENT OF INCOME CHARGEABLE TO TAX, INITIATED PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] BY SERVING NOTICE UNDER SECTION 148 OF THE ACT ON 06.03.2014. THE ASSESSEE HAS NOT RESPONDED TO 148 NOTICE. NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO ISSUE ON 17.03.2014 CALLING FOR DETAILS. BUT THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER OR FURNISHED ANY DETAILS EITHER BY POST OF IN PERSON. ANOTHER NOTICE UNDER 142(1) OF THE ACT WAS ISSUED ON 24.0 3.2014. BUT, THE ASSESSEE HAS NOT COMPLIED TO ANY OF THE NOTICES AND NOT PRODUCED BOOKS OF ACCOUNTS AND OTHER PARTICULARS. MEANWHILE, THE DETAILS HAVE BEEN GATHERED FROM THE BANK. COPY OF THE SALE DEEDS HAVE ALSO BEEN GATHERED FROM THE SUB - REGISTRAR, VIRAL IMALAI. BASED ON THE DETAILS AVAILABLE ON RECORD, THE ASSESSING OFFICER COMPLETED BEST JUDGEMENT ASSESSMENT UNDER SECTION 144 OF THE ACT ON 31.03.2014 ASSESSING TOTAL INCOME OF THE ASSESSEE AT .4,02,66,094/ - AFTER MAKING VARIOUS ADDITIONS. I.T.A. NO. 751 /M/16 3 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE BY DELETING THE ADDITION OF .1,63,11,370/ - AND RESTRICTING THE DISALLOWAN CE TO THE EXTENT OF .3,00,000/ - AGAINST THE ADDITION OF .2,39,16,895/ - . 4. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS STRONGLY CONTENDED THAT THE LD. CIT(A) HAS ERRED IN COMPUTING THE SHORT TERM CAPITAL GAIN ARISE N OUT OF THE SALE OF LAND BY RELYING UPON THE POST DATED AFFIDAVIT FILED BY ANOTHER PERSON AS THE BASIS FOR ARRIVING AT THE INCOME OF THE ASSESSEE. MOREOVER, THE LD. CIT(A) HAS SIMPLY IGNORED THE REGISTERED DOCUMENT RATHER THAN TAKING COGNIZANCE OF AN AFFI DAVIT, WHICH WAS NOT EVEN FILED BY THE ASSESSEE . THEREFORE, THE LD. DR HAS PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE HAS SUPPORTED THE ORDERS OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, FIRST OF ALL, THE BEST JUDGEMENT ASSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE ACT ON 31.03.2014 BASED ON THE DETAILS GATHERED FROM THE SUB - REGIS TRAR, VIRALIMAL A I AS WELL AS DIFFERENT BANKS, SINCE NEITHER THE ASSESSEE FILED RETURN OF INCOME UNDER SECTION 139 OF THE ACT NOR FILED THE RETURN UNDER SECTION 148 OF THE ACT AND ANY DETAILS AS CALLED FOR AGAINST SEVERAL NOTICES UNDER SECTION 142(1) OF THE ACT. NOWHERE IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER I.T.A. NO. 751 /M/16 4 MENTIONED THAT THE ASSESSEE HAS FILED RETURN ON 28.03.2014 LEAVING LITTLE TIME FOR THE ASSESSING OFFICER TO FRAME AN ASSESSMENT ORDER. IF THE ASSESSEE HAS FILED RETURN OF INCOME, THERE WAS NO NEC ESSITY FOR THE ASSESSING OFFICER TO FRAME THE ASSESSMENT UNDER SECTION 144 OF THE ACT NOR THE ASSESSEE FILED ANY COPY OF ACKNOWLEDGEMENT BEFORE THE TRIBUNAL OF HAVING FILED THE RETURN OF INCOME ON 28.03.2014. THEREFORE, WE ARE UNABLE TO ACCEPT THAT THE ASS ESSEE HAS FILED ANY RETURN OF INCOME ON 28.03.2014 UNLESS THE ASSESSEE PROVES THAT HE FILED THE RETURN. 6. IN THE APPELLATE ORDER FROM PARA 6.2 TO 6.3 ARE PURELY BASED ON THE AFFIDAVIT FILED BY ONE MR. I.S. LOGANATHAN , AGAINST THE FINDINGS OF THE ASSESS ING OFFICER WERE NOT RECORDED BY THE LD. CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MENTIONED THAT IT IS RELIABLY LEARNED FROM THE REGISTRATION DEPARTMENT THAT THE ASSESSEE HAS PURCHASED A LAND FOR .3,34,800/ - ON 17.07.2008 , BUT THE AUTHORITIES BELOW HAVE NOT EXAMINED AS TO WHETHER 6.67 ACRES OF LAND COULD BE BOUGHT AT .3,34,800/ - ON 17.07.2008 AND SUBSEQUENTLY WITHIN TWO WEEKS, IT COULD FETCH .1,66,75,000/ - AS STATED TO HAVE BEEN MENTI ONED IN THE SALE DEED AND IT IS ALSO NOT CLEAR WHETHER THE SALE DEED HAS BEEN REGISTERED OR NOT. IF IT IS A REGISTERED SALE DEED, WHICH WAS IGNORED BY THE LD. CIT(A) AND CONSIDERED NOTORIZED AFFIDAVIT AS MORE VALID DOCUMENT THAN THE SALE DEED, THE FINDINGS OF THE LD. CIT(A) CANNOT BE I.T.A. NO. 751 /M/16 5 SUSTAINED UNDER ANY LAW. OTHERWISE ALSO, NO PIECE OF EVIDENCE HAS BEEN FILED BEFORE THE LD. CIT(A) EXCEPT AFFIDAVIT. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THE ISSUE OF DISALLOWANCE OF .1,63,11,370/ - AND REMIT THE MATTER BACK TO HIM WITH THE DIRECTION TO ( I ) VERIFY THE SALE DEED ; (II) ASSESSEE SHOULD FILE REASONS FOR NOT FILING THE DETAILS/RETURN BEFORE THE ASSESSING OFFICER; (III) VERIFY THE ACCOUNTS OF SHRI S. LOGANATHAN, WHO IS STATED IN THE APPELLATE ORDER TO BE POWER AGENT AS WELL AS PERSONS MENTIONED IN THE AFFIDAVIT STATED TO HAVE RECEIVED THE CONSIDERATION ; AND (IV) THE LAND SOLD BY THE ASSESSEE APPEARS TO BE AT PUDUKOTTAI DISTRICT, WHEREAS, IN THE APPELLATE ORDER, IT IS ST ATED TO HAVE SOLD LAND AT TRICHY VIDE DOCUMENTS NO. 2724/2008 TO ALMCO PROPERTIES PVT. LTD., WHICH ONE IS CORRECT IS REQUIRED TO BE VERIFIED . THE LD. CIT(A) IS DIRECTED TO DECIDE THE ISSUE BY OBTAINING DETAILED REMAND REPORT FROM THE ASSESSING OFFICER AFTE R CROSS EXAMINING THE DETAILS AS MAY BE FILED DURING REMAND PROCEEDINGS. 6.1 WITH REGARD TO THE ADDITION TOWARDS UNEXPLAINED DEPOSITS MADE IN THE BANK ACCOUNTS TO THE EXTENT OF .2,39,16,895/ - , THE ASSESSEE HAS NOT FILED ANY DETAILS BEFORE THE ASSESSING OFFICER. BUT, IN THE APPELLATE ORDER, THE LD. CIT(A) HAS MENTIONED THAT THE ASSESSEE HAS FURNISHED THE DETAILS AND ACCEPTED WITHOUT OBTAINING ANY REPORT ON THE DETAILS STATED TO HAVE BEEN FURNISHED BY THE ASSESSEE. THUS, WE REMIT THE ISSUE TO THE FILE OF THE LD. I.T.A. NO. 751 /M/16 6 CIT(A) TO DECIDE AFRESH AND PASS A DETAILED SPEAKING ORDER AFTER OBTAINING REPORT FROM THE ASSESSING OFFICER WHO SHALL EXAMINE THE DETAILS AS MAY BE FILED BY THE ASSESSEE. IN CASE, THE ASSESSEE FAILS TO FURNISH COMPLETE DETAILS FOR VERIFICATION, TH E ADDITION MADE BY THE ASSESSING OFFICER STAND SUSTAINED. 7 . IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 03 RD MARCH, 201 7 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL R EDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 03 . 03 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.