ACIT, CHENNAI V. Sathyamurthy Swaminathan, CHENNAI

ITA 887/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6470 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN
• Keywords: Reopening of assessment; Audit objection
• Section: 143(3); 148

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL C / SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.887/MDS/2017 ' #$' / ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, O/O DCIT, NON-CORPORATE CIRCLE 15, CHENNAI - 600 034. V. SHRI SATHYAMURTHY SWAMINATHAN, WOOD PECKER BUILDING, 7 TH AVENUE, BESANT NAGAR, CHENNAI - 600 090. PAN : AVCPS 0457 N (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI B. SAHADEVAN, JCIT ()&' * + / RESPONDENT BY : SH. SAROJ KUMAR PARIDA, ADVOCATE , # * -. / DATE OF HEARING : 07.08.2017 /0$ * -. / DATE OF PRONOUNCEMENT : 07.08.2017 / O R D E R THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -15, CHENN AI, DATED 16.12.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THERE WAS A DELAY OF 4 DAYS IN FILING THIS APPEA L BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR COND ONATION OF DELAY. WE HAVE HEARD THE LD. D.R. AND THE LD.COUNS EL FOR THE 2 I.T.A. NO.887/MDS/17 ASSESSEE. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF ` 4,90,018/- BEING THE INTEREST ON THE BORROWED LOAN FROM KARNATAKA BANK. 4. SHRI B. SAHADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THIS IS A SECOND ROUND OF LITIGATION . IN THE FIRST ROUND, THE ASSESSING OFFICER MADE ADDITION OF ` 6,65,437/-. THE ADDITION MADE BY THE ASSESSING OFFICER WAS CONFIRMED BY THE CIT(APPEALS). HOWEVER, ON FURTHER APPEAL BEFORE THIS TRIBUNAL, TH E ADDITION OF ` 6,65,437/- WAS DELETED BY THIS TRIBUNAL. SUBSEQUEN TLY, ACCORDING TO THE LD. D.R., ON GOING THROUGH THE RECORDS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE BORROWED LOAN FROM KARNATAK A BANK AND UTILISED THE SAME IN MAKING INVESTMENT IN MUTUAL FU NDS AND FARM HOUSE AND THE ASSESSEE PAID INTEREST OF ` 4,90,018/-, SINCE THE INTEREST WAS PAID ON THE BORROWED FUNDS, WHICH WAS USED FOR MAKING INVESTMENT IN MUTUAL FUNDS AND AGRICULTURAL ACTIVITIES, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER DI SALLOWED THE INTEREST. MOREOVER, REFERRING TO GROUND NO.2.6 RAI SED BEFORE THIS 3 I.T.A. NO.887/MDS/17 TRIBUNAL, THE LD. D.R. SUBMITTED THAT THERE WAS A R EVENUE AUDIT OBJECTION, HENCE, THE APPEAL IS FILED BEFORE THIS T RIBUNAL. ON A QUERY FROM THE BENCH, WHETHER THE AUDIT OBJECTION W AS BROUGHT TO THE NOTICE OF THE COMMISSIONER WHO AUTHORIZED FILIN G OF APPEAL BEFORE THIS TRIBUNAL, THE LD. D.R. SUBMITTED THAT I T IS NOT KNOWN FROM THE RECORDS. 5. ON THE CONTRARY, SH. SAROJ KUMAR PARIDA, THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSMENT WAS REO PENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS FURN ISHED ALL THE REQUIRED PARTICULARS FOR COMPLETING THE ASSESSMENT, INCLUDING THE INTEREST PAID ON THE BORROWED FUNDS FROM KARNATAKA BANK, THEREFORE, THERE IS NO NEGLIGENCE ON THE PART OF THE ASSESSEE. SINCE THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), THE ASSE SSING OFFICER CANNOT REOPEN THE ASSESSMENT AFTER EXPIRY OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THERE WA S NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHING THE PARTI CULARS REQUIRED FOR COMPLETING THE ASSESSMENT. IN THIS CASE, ACCORDING TO THE LD. COUNSEL, IT IS NOBODYS CASE THAT THE ASSESSEE FAIL ED TO FURNISH ANY OF THE PARTICULARS. THE ASSESSING OFFICER REOPENED THE ASSESSMENT 4 I.T.A. NO.887/MDS/17 AFTER GOING THROUGH THE MATERIAL ALREADY FILED AT T HE TIME OF ORIGINAL ASSESSMENT. THEREFORE, ACCORDING TO THE LD. COUNSE L, THE CIT(APPEALS) FOUND THAT THE REOPENING OF ASSESSMENT IS BAD IN LAW. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT AND IT TRAVELLED UPTO THIS TRIBUN AL. AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUIN G NOTICE UNDER SECTION 148 OF THE ACT. PRIMA FACIE , IT APPEARS THAT THE ASSESSMENT WAS REOPENED ON THE BASIS OF AUDIT OBJECTION. THE FACT REMAINS THAT THE ASSESSEE FILED ALL THE PARTICULARS, INCLUDING D ETAILS OF PAYMENT OF INTEREST ON THE FUNDS BORROWED FROM KARNATAKA BANK. THE ASSESSING OFFICER, AFTER EXAMINING THE MATERIAL ALR EADY AVAILABLE ON RECORD, FOUND THAT THE INTEREST PAID ON THE LOAN BO RROWED FROM KARNATAKA BANK ESCAPED ASSESSMENT. 7. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSES SEE HAS FAILED TO FURNISH ANY OF THE PARTICULARS REQUIRED FOR COMP LETING THE ASSESSMENT. IN THE ABSENCE OF ANY ALLEGATION THAT THE ASSESSEE HAS FAILED TO FURNISH ANY PARTICULARS REQUIRED FOR COMPLETING THE 5 I.T.A. NO.887/MDS/17 ASSESSMENT, THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT THE REOPENING OF ASSESSMENT AFTER EXPIRY OF FOUR YEARS IS NOT JUSTIFIED. MOREOVER, ADMITTEDLY, THE ASSESSEE HAS FURNISHED AL L THE REQUIRED PARTICULARS AND THE ASSESSING OFFICER AFTER GOING T HROUGH THE RECORDS ONCE AGAIN, FOUND THAT THE ASSESSEE HAS PAI D INTEREST OF ` 4,90,018/-. IN THE ABSENCE OF ANY NEW MATERIAL, TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE REOPENING OF ASSESS MENT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR IS NOT JUSTIFIED. THEREFORE, THIS TRIBUNAL DO NOT FIN D ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH AUGUST, 2017 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 7 TH AUGUST, 2017. KRI. 6 I.T.A. NO.887/MDS/17 * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-15, CHENNAI-34 4. PRINCIPAL CIT-6, CHENNAI-34 5. 4#7 (- /DR 6. 8' 9 /GF.