K.Devaraja @Devaraj, CHENNAI V. ACIT, Coimbatore

ITA 763/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2460 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-06-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 11-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRS
• Assessee Lawyers: N MUTHUKUMARAN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NOS.762, 763, 764, 765, 766 & 767(MDS)/2012 ASSESSMENT YEARS : 2001-02 TO 2004-05, 2006-07 & 20 07-08 SHRI K.DEVARAJA @ DEVRAJ, C/O SHRI N.MUTHUKUMARAN, 52-AVM AVENUE, I MAIN RD., VIRUGAMBAKKAM, CHENNAI-600 092. PAN ADVPD1285G. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE II, COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.MUTHUKUMARAN RESPONDENT BY : SHRI SHAJI P JACOB, IRS , ADDL. CIT DATE OF HEARING : 17 TH JUNE, 2013 DATE OF PRONOUNCEMENT : 17 TH JUNE, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS IS A BUNCH OF SIX APPEALS, ALL FILED BY TH E ASSESSEE. THE RELEVANT ASSESSMENT YEARS ARE 2001-0 2, 2002-03, 2003-04, 2004-05, 2006-07 AND 2007-08. TH ESE APPEALS ARE DIRECTED AGAINST THE ORDERS OF THE COMM ISSIONER OF - - ITA 762 TO 767 OF 2012 2 INCOME-TAX(APPEALS)-II AT COIMBATORE, DATED 26-12-2 011 AND ARISE OUT OF THE ASSESSMENTS COMPLETED UNDER SECTIO N 153A(A), READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 196 1. 2. THE ASSESSEE IS A REAL ESTATE DEALER. THE COMM ON ISSUE RAISED IN ALL THESE APPEALS IS THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) WITH REFERENCE TO THE BROKERAGE PAYMENTS CLAIMED BY THE ASSESSEE AS EXPENDITURE. THE DETAIL S OF BROKERAGE CLAIMED, ALLOWED AND DISALLOWED IN THE IM PUGNED ASSESSMENT YEARS ARE TABULATED BELOW, AS PROVIDED B Y THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE. ASST.YEAR BROKERAGE CLAIMED ` ALLOWED ` DISALLOWED ` DISALLOWANCE % 2001-02 7,26,020/- 2,11,000/- 5,15,000/- 70% 2002-03 5,87,655/- 1,33,150/- 4,54,505/- 77% 2003-04 1,33,688/- 61,388/- 72,360/- 54% 2004-05 1,56,544/- 8,600/- 1,47,944/- 94% 2006-07 4,64,000/- 57,000/- 4,07,000/- 87% 2007-08 10,41,000/- 5,20,500/- 5,20,500/- 50% - - ITA 762 TO 767 OF 2012 3 3. AS IS OBVIOUS, THESE ASSESSMENTS HAVE BEEN COMPLETED IN PURSUANCE OF A SEARCH CARRIED OUT AT T HE PREMISES OF THE ASSESSEE. THE ASSESSEE HAD FILED RETURNS OF INCOME FOR ALL THESE ASSESSMENT YEARS AND THE ASSESSMENTS WERE COMPLETED UNDER SECTION 143(1) OF THE ACT. NATURAL LY, IN THOSE ASSESSMENTS, THE EXPENSES AS CLAIMED BY THE ASSESSE E WERE DEEMED AS ALLOWED. BUT, IN THE COURSE OF SEARCH IT WAS BROUGHT OUT THAT THE CLAIM OF EXPENDITURE MADE BY THE ASSES SEE IS MUCH HIGHER THAN THE EXPENDITURE REFLECTED IN THE DETAIL S SEIZED IN THE COURSE OF SEARCH. ON VERIFICATION OF THE DETAILED MATERIALS, THE ASSESSING OFFICER FOUND THAT THE BROKERAGE CLAIMED BY THE ASSESSEE IN HIS RETURNS FILED IS MUCH HIGHER THAN T HE ACTUAL EXPENSES INCURRED BY HIM. ACCORDINGLY, THE ASSESSI NG OFFICER ALLOWED THE BROKERAGE EXPENSES EXACTLY AS REFLECTED IN THE SEIZED RECORDS. THE CASE OF THE ASSESSEE BEFORE TH E ASSESSING OFFICER WAS THAT HE HAD CLAIMED MORE EXPENDITURE AN D HE COULD PRODUCE EVIDENCE IN SUPPORT OF THAT. BUT, DE HORS S UCH SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER, THE ASSESSEE DID NOT PRODUCE ANY OTHER ACCEPTABLE EVIDENCE BEFOR E THE ASSESSING OFFICER TO PROVE HIS POINT THAT HE HAD IN CURRED - - ITA 762 TO 767 OF 2012 4 EXPENDITURE MORE THAN WHAT WAS REFLECTED IN THE SEI ZED RECORDS. THEREFORE, THE ASSESSING OFFICER ALLOWED THE EXPEND ITURE TO THE EXTENT RECORDED AND REFLECTED IN THE SEIZED RECORDS AND DISALLOWED THE BALANCE OF CLAIM MADE BY THE ASSESSE E. 4. THESE DISALLOWANCES WERE THEREAFTER TAKEN IN FI RST APPEALS BEFORE THE COMMISSIONER OF INCOME-TAX(APPEA LS). THE COMMISSIONER OF INCOME-TAX(APPEALS) EXAMINED THE EN TIRE ARGUMENTS OF THE ASSESSEE IN A VERY DETAILED MANNER . HE HAS PASSED A VERY SPEAKING ORDER, ADJUDICATING THE CONT ENTIONS RAISED BY THE ASSESSEE IN THE FIRST APPEALS PLACED BEFORE HIM. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS MADE A CATEGORICAL FINDING THAT THE ASSESSEE DID NOT PRODU CE ANY EVIDENCE IN SUPPORT OF THE HIGHER EXTENT OF BROKERA GE EXPENDITURE. HE DID NOT PRODUCE ANY EVIDENCE EITHE R BEFORE THE ASSESSING OFFICER OR BEFORE THE COMMISSIONER OF INC OME- TAX(APPEALS). BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) THE ASSESSEE HAD MADE A PRAYER FOR ADMITTING FRESH EVIDENCES IN SUPPORT OF HIS CLAIM OF HIGHER AMOUNT OF EXPENDITUR E. BUT, THE COMMISSIONER OF INCOME-TAX(APPEALS) HELD THAT WHEN THE SEARCH WAS CARRIED OUT, THERE WAS NO SUCH SUPPORTING EVIDE NCE FOUND TO - - ITA 762 TO 767 OF 2012 5 SUPPORT THE QUANTUM OF EXPENDITURE CLAIMED BY THE A SSESSEE, NOR THE ASSESSEE COULD PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER. AS A RESULT OF THE ABOVE OBSERV ATION, HE CAME TO A FINDING THAT IT SHOULD BE CONSIDERED THAT THE ASSESSEE HAD NO EVIDENCE BEFORE HIM EITHER AT THE TIME OF SE ARCH OR AT THE TIME OF COMPLETING THE ASSESSMENTS. ACCORDINGLY, T HE COMMISSIONER OF INCOME-TAX(APPEALS) REJECTED THE PR AYER OF THE ASSESSEE TO PRODUCE FRESH EVIDENCES BEFORE HIM. AS THE EXPENDITURE HAS BEEN ALLOWED BY THE ASSESSING OFFIC ER EXACTLY ON THE BASIS OF THE EXTENT NOTED IN THE SEIZED RECO RDS, HE DID NOT INTERFERE IN THE DISALLOWANCES AND AS SUCH, CONFIRM ED THE ORDERS PASSED BY THE ASSESSING OFFICER. 5. ON HEARING BOTH SIDES, WE FIND THAT STILL THE C ASE HAS NOT IMPROVED ANY MORE. THE ASSESSEE HAS NOT RAISED ANY GROUND BEFORE US AGAINST THE DENIAL BY THE COMMISSI ONER OF INCOME-TAX(APPEALS) OF THE OPPORTUNITY OF PRODUCING FRESH EVIDENCE. BUT, THE LEARNED COUNSEL APPEARING FOR T HE ASSESSEE RAISED THAT CONTENTION ALSO BEFORE US STATING THAT IF ONE MORE CHANCE IS GIVEN, THE ASSESSEE WOULD BE IN A POSITIO N TO PRODUCE ACCEPTABLE EVIDENCE TO PROVE THE HIGHER EXTENT OF B ROKERAGE - - ITA 762 TO 767 OF 2012 6 EXPENDITURE. BUT, WE ARE NOT INCLINED TO LEAD BY T HAT ARGUMENT. WE AGREE WITH THE ORDER OF THE COMMISSIONER OF INCO ME- TAX(APPEALS) THAT IT IS VERY EVIDENT FROM THE FACTS OF THE CASE THAT THE ASSESSEE HAD NO EVIDENCE WHATSOEVER TO SUPPORT HIS CLAIM OF HIGHER EXTENT OF EXPENDITURE EVEN AT THE TIME OF SEARCH OR AT THE TIME OF ASSESSMENT. WHEN THAT IS THE POSITION, IT IS NOT POSSIBLE TO HOLD THAT ANY NEW MATERIAL MIGHT BE AVA ILABLE WITH THE ASSESSEE. IF AT ALL HE MIGHT BE ABLE TO PRODUCE AN Y EVIDENCE, IT IS NOT POSSIBLE FOR US TO GIVE ANY CREDIBILITY TO T HAT EVIDENCE. 6. NOW, COMING BACK TO THE POINT, WE HAVE TO AGREE WITH THE LOWER AUTHORITIES THAT THE BROKERAGE EXPEN SES HAVE BEEN REFLECTED IN THE SEIZED RECORDS AND COMPARED T O THOSE FIGURES, THE ASSESSEE HAS CLAIMED EXPENDITURE AT A HIGHER SIDE IN HIS COMPUTATION OF INCOME. IT IS, THEREFORE, TO BE SEEN THAT THE ASSESSING OFFICER IS JUSTIFIED IN LIMITING THE EXPE NDITURE TO THE EXTENT SHOWN BY THE RECORDS SEIZED AT THE TIME OF S EARCH. IN THE ABSENCE OF ANY EVIDENCE, BALANCE OF THE CLAIM CANNO T BE ALLOWED. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INTERFERE IN THE ORDERS PASSED BY THE COMMISSIONER - - ITA 762 TO 767 OF 2012 7 OF INCOME-TAX(APPEALS). WE CONFIRM THE ORDERS OF T HE COMMISSIONER OF INCOME-TAX(APPEALS) AND DISMISS THE APPEALS FILED BY THE ASSESSEE. ORDERS PRONOUNCED ON MONDAY, THE 17 TH OF JUNE, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 17 TH JUNE, 2013. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.