ACIT Non Corporate Circle 1, Coimbatore V. P.Elango, Coimbatore

ITA 772/CHNY/2018

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax against the order of the Commissioner of Income Tax (Appeals), which pertained to the assessment year 2007-08. The primary issue was the addition of Rs. 12 crores to the assessee's income, which was alleged to be received from the sale of land. The ITAT found that there were discrepancies in the statements and evidence provided by the assessee and other parties involved, leading to a decision to remand the case back to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134772 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-06-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 148; 143(3); 13

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी मंजुनाथ. जी, लेखा सद᭭य एवं ᮰ी मनोमोहन दास, ᭠याियक सद᭭य के समᭃ BEFORE SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER AND SHRI MANOMOHAN DAS, HON’BLE JUDICIAL MEMBER आयकर अपील सं./ITA No.: 772/Chny/2018 & CO No: 83/Chny/2018 िनधाᭅरण वषᭅ / Assessment Year: 2007-08 Assistant Commissioner of Income Tax, Non Corporate Circle -1, Coimbatore – 641 018. v. Shri. P. Elango, 156/18, II Floor, Parsn Trade Plaza, Dr. Nanjappa Road, Coimbatore – 641 018. [PAN: AACPE-0727-G] (अपीलाथᱮ/Appellant) (Cross Objector) अपीलाथᱮ कᳱ ओर से/Appellant by : Dr. R Mohan Reddy, CIT Respondent/Cross Objector by : Shri. S. Sridhar, Advocate (Erode) सुनवाई कᳱ तारीख/Date of Hearing : 07.06.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 28.06.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: This appeal filed by the revenue and cross objection filed by the assessee are directed against the order passed by the learned Commissioner of Income Tax (Appeals)-2, Chennai, dated 18.12.2017 and pertains to assessment year 2007-08. Since, facts are identical and issues are common, for the sake of convenience, the appeal filed by the revenue and the cross :-2-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 objection filed by the assessee are being heard together and are being disposed off, by this consolidated order. 2. The revenue has raised the following grounds of appeal: “1. The Ld CIT(A) erred in re-computing the income of the assessee. 2. The Ld CIT(A) has erred in facts of the case, by considering that the assessee is only a broker and the money withdrawn from his bank accounts was given to the seller without any basis. 3. The Ld. CIT(A) has failed to appreciate the fact that, the assessee's name is appearing in the Sale Deed as "Confirming Party" and there is no material on record to prove that the money withdrawn from the bank accounts was given to the seller. 4. The Id. CIT(A) has failed to appreciate the fact that in spite of giving adequate opportunities, the assessee has failed either to appear before the Assessing Officer or to appear and cross examine the other parties, as requested by him. 5. The ld. CIT(A) has failed to consider the statements given by the other parties during the course of the assessment proceedings, which were against the assessee and was not at all countered by the assessee. 6. For these and other grounds, that may be adduced at the time of hearing, the order of the Ld. CIT(A) may be cancelled and that of the assessing Officer may be restored.” 3. The brief facts of the case are that, the assessee did not filed his return of income. The assessment has been reopened u/s. 147 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) and notice u/s. 148 of the Act dated 20.06.2011 was issued. In response to the notice, the assessee filed his return :-3-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 of income on 22.10.2012, declaring total income of Rs. 10,22,790/-. The assessment u/s. 143(3) r.w.s. 147 of the Act was completed on 28.03.2013, wherein an addition of Rs. 12,00,00,000/- was made towards payment received by the assessee from the purchaser on sale of land vide sale deed bearing no. 3201 of 2007 dated 27.02.2007. The assessee filed an appeal before the CIT(A) and the same was dismissed. Against this, the assessee filed an appeal before the ITAT. The ITAT, Chennai Benches vide ITA Nos. 1392 & 2973/Mds/2014 dated 08.05.2015 remitted the issue of addition of Rs. 12 crores to the Assessing Officer for fresh examination. The Assessing Officer passed an order u/s. 143(3) r.w.s. 254 of the Act on 29.12.2016 and made additions of Rs. 12 crores towards amount received from purchaser of the property on sale of land, on the ground that the assessee could not appear and file necessary details to explain as to how he has received a sum of Rs. 12 crores from the purchaser M/s. Commercial Buildwell Pvt Ltd, even though he is neither owner of the property nor power agent. The assessee carried the matter in appeal before the CIT(A) and the ld. CIT(A) vide their order dated 18.12.2017 observed that the sworn statement of the assessee conveys that the money has been paid to the seller in cash and thus, :-4-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 estimated 3% brokerage on total sale consideration of the property and sustained additions of Rs. 45,81,000/- out of total additions made by the Assessing Officer for Rs. 12 crores. Aggrieved by the CIT(A) order, the revenue is in appeal before us and the assessee has filed cross objection in support of the order of the CIT(A). 4. The ld. CIT-DR, Dr. R. Mohan Reddy, submits that the ld. CIT(A) erred in estimating 3% brokerage on total sale consideration of the property without appreciating fact that the assessee name is appearing in the sale deed as confirming party and further there is no material on record to prove that the money withdrawn from the bank accounts was given to the sellers. He further submits that, although the Tribunal has given an opportunity to the assessee to appear before the Assessing Officer and to file necessary evidences, but the assessee could not appear in spite of the Assessing Officer had given sufficient opportunity and also for cross examination of the various parties including the seller of the property, power agent and other persons. The ld. CIT(A) without appreciating relevant facts simply estimated 3% brokerage and deleted additions made by the Assessing Officer. :-5-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 5. The Ld. Counsel for the assessee, supporting the order of the CIT(A) submits that the assessee is neither the owner of the property nor power agent, but simply acted as an agent to facilitate receipt of money from purchaser and handed over to seller of the property. He further submits that the assessee had withdrawn amount received from purchaser of the property on various dates and handed over the sale consideration to the seller. The assessee has received only a brokerage. The ld. CIT(A), after considering relevant facts has rightly estimated 3% brokerage on total consideration and thus, their order should be upheld. 6. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The facts with regard to the impugned dispute are that Mr. R. Ramalingam and Mr. Palanisamy represented their power of attorney agent Mr. M.P. Shamsudeen had sold an immovable property by way of sale deed dated 27.02.2017 to M/s. Commercial Buildwell Pvt Ltd for a consideration of Rs. 15,27,00,000/-. In the said sale deed, the assessee was referred to as confirming party. Further, as per said sale deed, out of total consideration of Rs. 15.27 crores, a sum of Rs. 12 :-6-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 crores has been paid to the appellant. Further, remaining sum of Rs. 3.27 crores has been paid to Mr. M.P. Shamsudeen, power agent of the seller. The Assessing Officer assessed total sum received by the assessee from purchaser amounting to Rs. 12 crores in the hands of the assessee, because the assessee could not adduce any evidence as to why he has acted as an confirming agent. Further, during second round of litigation in pursuant to directions of the ITAT, when the Assessing Officer called upon the assessee to explain the transactions, the assessee could not appear and furnish necessary details. Further, the Assessing Officer summoned and recorded statement of Mr. Ramalingam and Mr. Palanisamy and in the sworn statement, they have admitted that they have received a sum of Rs. 8.5 crores for the sale of total land of 13 acres through their power of attorney Mr. M.P. Shamsudeen. Further, M.P. Shamsudeen, power agent of the land owners in his sworn statement stated that 6.9 acres of land was sold to M/s. Commercial Buildwell Pvt Ltd, through a facilitator Mr. Arulmudi of Chennai to whom the assessee Mr. Elango is an associate, for a sum of Rs. 3.27 crores. Further, the Assessing Officer called upon the assessee to cross examine the seller and the power agent, but the assessee did not utilize the opportunity. From :-7-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 the above facts, it is clear that the assessee had received a sum of Rs. 12 crores from purchaser, even though he is neither owner of the property not power agent, except as a confirming party there is relationship with the seller of the land or the power agent, which is evident from the fact that the power agent clearly stated in his sworn statement that he does not know Mr. Elango. We further noted that the total sale consideration of the property as per sale deed is 15.27 crores. The land owner claims that they have received Rs. 8.5 crores through their power of attorney holder. The power of attorney Mr. M.P. Shamsudeen claimed, he has received a sum of Rs. 3.27 crores out of 15.27 crores. If we exclude 8.5 crores plus 3.27 crores, a total of Rs. 11.77 crores has been owned up and admitted by seller of land and power of attorney Mr. M.P. Shamsudeen. From the above, it is clear that although the assessee has received a sum of Rs. 12 crores, but as per admission of the land owners and power of attorney holder only a sum of Rs. 3.5 crores is left with assessee. However, the Assessing Officer has made additions of Rs. 12 crores . From the above it is very clear that there is something beyond what was stated by land owners, power of attorney holder and the assessee and it needs to be probed further. Further, although :-8-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 assessee claims to have paid back sale consideration to the land owner in cash, except oral statement, there is no proof with assessee to prove his claim. Therefore, we are of the considered view that the issue needs to be verified by the Assessing Officer in light of these facts and to ascertain the real beneficiary of sale consideration of land, whether it is land owner, power of attorney, or confirming party, the assessee. Thus, we set aside the order of the CIT(A) and restore the issue back to the file of the Assessing Officer and direct the Assessing Officer to reexamine the issue in light of facts and if necessary, call the assessee to ascertain correct facts and also to cross examine all the parties. Needless to say, the assessee shall appear before the Assessing Officer without seeking any adjournment and file necessary explanation with regard to the transactions on sale of land and amount received from the buyer. 7. In the result, appeal filed by the revenue is allowed for statistical purposes. :-9-: ITA. No:772/Chny/2018 & CO No: 83/Chny/2018 CO No. 83/Chny/2018: 8. The assessee has filed cross objection in support of the order of the CIT(A). Since, we have set aside the appeal filed by the revenue to the file of the Assessing Officer, cross objection filed by the assessee becomes infructuous and thus, same is dismissed as not maintainable. 9. As a result, appeal filed by the revenue is allowed for statistical purposes and cross objection filed by the assessee is dismissed. Order pronounced in the court on 28 th June, 2023 at Chennai. Sd/- (मनोमोहन दास) (MANOMOHAN DAS) Ɋाियक सद˟/Judicial Member Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 28 th June, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ/CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF