S.K.Siddhuraj, Erode V. ITO, Erode

ITA 876/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9567 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 20-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Gift
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , . , # $ BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.876/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) MR. S.K.SIDDHURAJ G.M. COMPLEX, 19, AGILMEDU 6 TH STREET, SAIT COLONY, ERODE-633 001. VS THE INCOME TAX OFFICER, COMPANY WARD-II(4), ERODE. PAN: ALBPS6575J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. V.S.JAYAKUMAR, ADVOCATE /RESPONDENT BY : MR. PATHLAVATH PEERYA, CIT /DATE OF HEARING : 1 ST MARCH, 2016 /DATE OF PRONOUNCEMENT : 4 TH MAY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX-2, COIMBATORE, DATED 24.02.2015 IN C.NO.220(4)/ REV.263/PR.CIT-2/CBE//2014-15 PASSED UNDER SECTION 263 OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL. HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ERRED IN INVOKING TH E PROVISIONS OF SECTION 263 OF THE ACT AND SETTING AS IDE THE 2 ITA NO.876 /MDS/2015 ORDER OF THE ASSESSING OFFICER TO REDO THE ASSESSME NT AFRESH AFTER MAKING NECESSARY ENQUIRIES AND EXAMINING THE GENUINENESS OF THE GIFTS AND THE CAPACITY / CREDIT WORTHINESS OF THE DONORS, OTHER THAN THE DONORS IN WHOS CASES ADDITIONS HAVE ALREADY BEEN MADE IN THE HANDS OF THE ASSESSEE . 3. BRIEF FACTS ARE THAT, THE ASSESSEE IS AN INDIV IDUAL FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-1 1 ON 18.03.2011 ADMITTING TOTAL INCOME OF ` 3,76,932/- . ON SCRUTINY, IT WAS NOTICED BY THE LEARNED ASSESSING O FFICER THAT DURING THE FINANCIAL YEAR 2009-10, THE ASSESSEE HAD MADE CASH DEPOSITS TO THE TUNE OF ` 32,25,000/- IN HIS SB ACCOUNT AND ` 23,99,600/- IN HIS CURRENT ACCOUNT. WHEN QUERIED, THE ASSESSEE EXPLAINED THAT OUT OF ` 56,24,600/- RECEIVED, ` 50,00,000/- WAS GIFTS FROM RELATIVES, HAND LOAN ` 2,00,000/- AND THE BALANCE AMOUNT IS SAVINGS OUT OF HIS INCOME . THE ASSESSEE ALSO FURNISHED THE DETAILS OF THE PERSONS WHO HAVE MADE THE GIFTS SUCH AS THE RATION CARD, PAN CARD, I NCOME-TAX ACKNOWLEDGEMENT ETC.. BASED ON THIS INFORMATION THE LEARNED ASSESSING OFFICER MADE ENQUIRIES TO FIND THE GENUIN ENESS OF THE GIFTS GIVEN BY THE DONORS, THEIR IDENTITY AND 3 ITA NO.876 /MDS/2015 CREDITWORTHINESS. AFTER SUCH ENQUIRY, THE LEARNED A SSESSING OFFICER ARRIVED AT A CONCLUSION THAT AMONGST THE DO NORS AND THE LENDERS THE FOLLOWING PERSONS WERE NOT AVAILABL E FOR VERIFICATION:- 1. S.SUMATHI, DONOR FOR RS.5,00,000/- 2. P.POOVAYEE, DONOR OF RS.3,00,000/- 3. M.MURUGESAN, LENDER FOR RS.2,00,000/- ACCORDINGLY, THE LEARNED ASSESSING OFFICER MADE ADD ITION OF RS.10,00,000/- BEING THE AGGREGATE AMOUNT RECEIVED FROM THE ABOVE DONORS AND LENDER. SUBSEQUENTLY, THE LEAR NED PRINCIPAL COMMISSIONER OF INCOME TAX INVOKED HIS PO WER UNDER SECTION 263 OF THE ACT AND DIRECTED THE LEARN ED ASSESSING OFFICER TO REDO THE ASSESSMENT AFRESH DUE TO THE FOLLOWING REASONS:- I) IN ADDITION TO THE CASH DEPOSIT THERE WERE CHEQ UE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE RECEIVED FROM M/S. SIVASAKTHI FASHIONS PVT.LTD, M/S. ERODE SIVASAKATHI TEXTILES, M/S. ERODE SIVASAKTHI CHEMICALS, M/S. STARS DYES AND M/S. SHRI ARTHANARI DYE CHEMICALS, WHEREIN THE ASSESSEE IS THE MANAGING DIRECTOR. THEREFORE THERE IS A 4 ITA NO.876 /MDS/2015 POSSIBILITY FOR INVOKING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT WHICH HAS NOT BEEN EXAMINED BY THE LEARNED ASSESSING OFFICER. II) THE LEARNED ASSESSING OFFICER HAD ONLY RELIED ON THE STEREOTYPED CONFIRMATION LETTERS RECEIVED FROM THE DONORS AND HAS NOT MADE ANY INDEPENDENT EXAMINATION. III) THE AMOUNT RECEIVED FROM SHRI C.R.SATISHKUMAR, THE ASSESSEES SISTER SON, CANNOT BE TREATED AS GIF T. IV) THE LEARNED ASSESSING OFFICER HAS SIMPLY ACCEPTED THE STATEMENT OF THE DONORS THAT THEY HAD AGRICULTURAL INCOME OUT OF WHICH SUCH GIFTS ARE GIV EN TO THE ASSESSEE. V) THE ASSESSING OFFICER HAS NOT SCRUTINIZED THE INCOME OF THE DONORS AND THE LENDERS IN ORDER TO ASCERTAIN THEIR CREDITWORTHINESS. 4. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATI VE SUBMITTED THAT AT THE TIME OF ASSESSMENT PROCEEDING S, THE ASSESSEE HAD SUBMITTED CONFIRMATION LETTERS, INCOME -TAX ACKNOWLEDGEMENT, COPY OF PAN CARD, COPY OF RATION C ARD AND 5 ITA NO.876 /MDS/2015 VARIOUS OTHER STATEMENTS IN ORDER TO CONVINCE THE L EARNED ASSESSING OFFICER THAT THE GIFTS AND LOANS RECEIVED ARE GENUINE. IT WAS FURTHER ARGUED BY STATING THAT THE LEARNED ASSESSING OFFICER AFTER EXAMINING ALL THE DETAILS A ND THE EXTENSIVE PAPER BOOK HAD RESTRICTED THE ADDITION ON LY FOR RS.10,00,000/- . IT WAS THEREFORE PLEADED THAT THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX INVOKI NG HIS POWER UNDER SECTION 263 OF THE ACT IS ERRONEOUS BEC AUSE HE HAS SIMPLY BRUSHED ASIDE THE EVIDENCE PRODUCED BY T HE ASSESSEE BEFORE THE REVENUE AND DIRECTED THE LEARNE D ASSESSING OFFICER TO REDO THE ASSESSMENT AFRESH. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. IT IS APPARENT F ROM THE FACTS OF THE CASE THAT THE LEARNED ASSESSING OFFICER HAS EXTENSIVELY VERIFIED THE DOCUMENTS SUBMITTED BY THE ASSESSEE AN D RESTRICTED THE ADDITION TO RS.10,00,000/-. WE DO N OT FIND ANY REASON TO DISBELIEVE THE FINDINGS OF THE LEARNED AS SESSING 6 ITA NO.876 /MDS/2015 OFFICER. THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX HAS SIMPLY IGNORED THE FINDINGS OF THE LEARNED ASSE SSING OFFICER AND FURTHER DOUBTING THE MATERIALS SUBMITTE D BY THE ASSESSEE ON THE BASIS OF SURMISES AND CONJECTURES I NVOKED HIS POWERS UNDER SECTION 263 OF THE ACT. AS POINTED OUT BY THE LEARNED ASSESSING OFFICER THE HONBLE BOMBAY HI GH COURT IN THE CASE OF CIT VS. FINE JEWELLERY INDIA L TD. REPORTED IN 92 CCH 0045, IT WAS HELD THAT IF A QUER Y IS RAISED DURING THE ASSESSMENT PROCEEDINGS AND RESPONDED BY THE ASSESSEE, MERE FACT THAT IT IS NOT DEALT WITH BY TH E ASSESSING OFFICER, WOULD NOT LEAD TO A CONCLUSION THAT NO MIN D HAS BEEN APPLIED. SIMILAR VIEW IS EXPRESSED IN THE DECISION RENDERED BY THE HONBLE ALLAHABAD HIGH COURT IN CIT VS.KRISHNA CAP BOX PVT. LTD. REPORTED IN 372 ITR 310. IN THE PRESENT C ASE BEFORE US, IT IS APPARENT THAT THE ASSESSEE HAS FILED A DE TAILED PAPER BOOK BEFORE THE LEARNED ASSESSING OFFICER CONTAININ G THE CONFIRMATION LETTERS FROM THE DONORS AND THE LENDER S, INCOME- TAX ACKNOWLEDGEMENT, PAN CARD NO., RATION CARD, REL EASE DEED AND VARIOUS OTHER DOCUMENTS. AFTER EXAMINING T HESE DOCUMENTS, THE LEARNED ASSESSING OFFICER HAD CAUTIO USLY COME TO A CONCLUSION THAT ONLY AN ADDITION OF RS.10 ,00,000/- 7 ITA NO.876 /MDS/2015 COULD BE MADE. IN THESE CIRCUMSTANCES AND PLACING RELIANCE ON THE DECISION CITED HEREIN ABOVE, WE ARE OF THE C ONSIDERED VIEW THAT THE LEARNED PRINCIPAL COMMISSIONER OF INC OME TAX HAS ERRED BY INVOKING HIS POWERS UNDER SECTION 263 OF THE ACT AND DIRECTING THE LEARNED ASSESSING OFFICER TO REDO THE ASSESSMENT AFRESH. THEREFORE, WE HEREBY QUASH THE O RDER PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INC OME TAX INVOKING HIS POWERS UNDER SECTION 263 OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH MAY, 2016 SD/- SD/- ( . ) ( . ) (G.PAVAN KUMAR) ( A.MOHAN ALANKAM ONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 4 TH MAY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /