ITO, Trichy V. K.Kalyanasundaram, Trichy

ITA 898/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8326 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 04-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A B KOLI IRS
• Assessee Lawyers: R VENKATESH
• Keywords: Gift; Salary income; Assessment record
• Section: 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO. 898/MDS/2015 ' $ %$ / ASSESSMENT YEAR : 2008-2009. THE INCOME TAX OFFICER WARD 3(2) TRICHY VS. SHRI. K. KALYANASUNDARAM, C-164, VKN ILLAM, 9 TH CROSS, THILLAINAGAR, TRICHY 18. [PAN AUOPK 1237B] ( / APPELLANT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. A.B. KOLI, IRS, JCIT. *+&' ( ) /RESPONDENT BY : SHRI. R. VENKATESH, C.A. ( , / DATE OF HEARING : 04-01-2016 -.% ( , / DATE OF PRONOUNCEMENT : 08-01-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-2, TIRUCHIRAPA LLI, IN ITA NO.104/2014-15/CIT(A)/TRY, DATED 22.12.2014 FOR THE ASSESSMENT ITA NO.898/MDS/2015 :- 2 -: YEAR 2008-2009 PASSED U/S.143(3) R.W.S.147 AND 250 OF THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 2. THE ID. CIT(A) ERRED IN DELETING THE ADDITION O F 1,07,78,380/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE ASSESSEE'S STATEMENT THAT ALL THE DETAILS WE RE PRODUCED BEFORE THE ASSESSING OFFICER WITHOUT CALLI NG FOR EITHER REMAND REPORT UNDER RULE 46A(1) OF IT RULES, 1962 OR VERIFYING THE ASSESSMENT RECORDS. 3. THE LD. CIT(A) ERRED IN NOT CALLING FOR ANY REMA ND REPORT FROM THE ASSESSING OFFICER BEFORE ADMITTING THE EVI DENCES PRODUCED BY THE ASSESSEE AND IGNORED THE FACT THAT NO SUCH EVIDENCES WERE PRODUCED FOR HIS CLAIM BEFORE T HE ASSESSING OFFICER. HENCE, THERE IS A VIOLATION OF R ULE 46A(1) OF THE IT RULES, 1962. 4 THE LD. CIT(A) MERELY ACCEPTED THE CONTENTION THA T ALL THE DETAILS AND EVIDENCES WERE PRODUCED BY THE ASSE SSEE BEFORE THE ASSESSING OFFICER WITHOUT VERIFYING THE ASSESSMENT RECORDS. 5. THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF LO SS OF 11,28,000/- WITHOUT TAKING INTO CONSIDERATION THAT THE ASSESSEE HAS NOT PRODUCED DETAILS AND EVIDENCES FOR SHARE TRADING BUSINESS BEFORE THE ASSESSING OFFICER. 6. THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF CA SH DEPOSIT TO THE TUNE OF RS. 56 LAKHS WAS TRANSFERRED FROM VKN ENTERPRISES THROUGH APPELLANT'S SB ACCOUNTS AND RS. 23,91,000/- TRANSFERRED FROM VKN BLASTING INDUSTRIE S VIDE RTGS SYSTEM STATING THAT THE ACCOUNT COPIES HAVE BE EN FILED AND THE FIRMS WERE ASSESSED TO TAX, AND, ALSO CONFIRMED BY THE ABOVE CONCERN BUT THE ABOVE DETAIL S HAVE NOT BEEN FILED BEFORE THE ASSESSING OFFICER. THE FA CTS WERE NOTED IN THE ASSESSMENT ORDER THAT NO SUCH DETAILS HAD BEEN FILED AT THE TIME OF SCRUTINY. HENCE, THE LD. CIT(A) VIOLATED THE PROVISIONS OF RULE 46A(1) OF THE IT AC T RULES 1962, WHERE FRESH EVIDENCES HAVE BEEN FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 3. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE IS A N INDIVIDUAL AND HAVING INCOME FROM SALARY AND INCOME FROM SHARI NG TRADING ITA NO.898/MDS/2015 :- 3 -: BUSINESS AND FOR THE ASSESSMENT YEAR 2008-2009 AS P ER THE AIR INFORMATION THE REVENUE FOUND CASH DEPOSITS OF <1 8,01,000/- IN THE BANK ACCOUNTS. BASED ON ENQUIRY, QUESTIONNAIRE WAS SENT TO THE ASSESSEE FOR FILING THE RETURN OF INCOME. SUBSEQU ENTLY, THE ASSESSING OFFICER BELIEVED THAT THE INCOME HAS ESCAPED ASSESS MENT AND ISSUED NOTICE U/S.148 AND U/S.142 (1) OF THE ACT. THE ASSE SSEE FILED RETURN OF INCOME ON 22.11.2013 AFTER RECEIPT OF NOTICE AND TH E CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS SERVED. IN RESPONSE TO NOTICE, THE LD. AUTHORISED REPRESENTATI VE APPEARED FROM TIME TO TIME AND FURNISHED DETAILS. ON PERUSAL OF R ETURN OF INCOME, THE ASSESSEE DISCLOSED LOSS FROM SHARE TRADING BUSINESS <11,28,000/- AND THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE AND ALSO CALLED FOR OBJECTIONS AND EXPLANATION FOR CREDITS IN THE BANK ACCOUNTS. THE ASSESSING OFFICER ON EXAMINING THE BANK ACCOUNT STA TEMENTS FOUND TOTAL CREDIT INCLUDING CASH DEPOSIT TO THE EXTENT O F <1,07,78,380/-. IN THE ASSESSMENT PROCEEDINGS, LD. AUTHORISED REPRESEN TATIVE COULD NOT EXPLAIN THE SOURCES FOR THE CASH AND CHEQUE DEPOSIT S WITH ANY MATERIAL EVIDENCES WITH BOOKS OF ACCOUNTS OR STATEMENTS. THE ASSESSING OFFICER VERIFIED SOURCE TO THE EXTENT OF <6,10,000/- AND TR EATED THE DIFFERENCE OF <1,01,68,380/- AS UNEXPLAINED MONEY U/S.68 AND 6 9A OF THE ACT AND RELIED ON THE JUDICIAL DECISIONS. FURTHER, TH E ASSESSEE HAS NOT PRODUCED EVIDENCE OF AGRICULTURAL LANDS AND ALSO EX PENDITURE INCURRED ITA NO.898/MDS/2015 :- 4 -: FOR AGRICULTURAL OPERATIONS. THE ASSESSING OFFICER AFTER CONSIDERING THE INFORMATION, EXPLANATIONS AND SOURCE OF DEPOSIT S HAS ASSESSED TOTAL INCOME AT <99,72,670/- AND RAISED DEMAND. AGG RIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE HAS FI LED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS THE ASSESSEE HAS RELIE D ON GROUNDS OF APPEAL, EXPLAINED BANK CREDITS, AGRICULT URAL INCOME, FURNISHED BANK STATEMENTS AND SUPPORTED THE CREDITS IN BANK ACCOUNT WITH GIFTS RECEIVED FROM FATHER, MATURITY OF FIXED DEPOSITS AND FUNDS RECEIVED FROM M/S. VKN SHOT BLASTING INDUSTRIES AND M/S. VKN ENTERPRISES AND RELIED ON THE EVIDENCES. THE LD. AU THORISED REPRESENTATIVE ALSO SUBMITTED CASH FLOW STATEMENT AND CONFIRMATION LETTER FROM M/S.VKN ENTERPRISES AND ASSESSEES FATH ER SHRI. KN. KANNAPPAN. THE ASSESSEE ALSO SUBMITTED STATEMENT O F SHARE TRADING WITH M/S. SYKES & RAY EQUITIES (I) LTD DISCLOSING L OSS AFTER ADJUSTMENT OF BROKERAGE AND COMMISSION. THE LD.COMMISSIONER OF INCOME TAX (APPEALS) BASED ON THE EVIDENCE PRODUCED DIRECTED THE ASSESSING OFFICER TO CONSIDER THE ENTIRE SHARE BUSINESS LOSS OF <11,28,000/-. THE ASSESSEE PRODUCED CONFIRMATION OF RTGS TRANSFER FRO M M/S. VKN SHOT BLASTING INDUSTRIES AND M/S. VKN ENTERPRISES ON VAR IOUS DATES. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAVING SATISFI ED WITH THE EVIDENCE OF RTGS FUND TRANSFER DIRECTED THE ASSES SING OFFICER TO ITA NO.898/MDS/2015 :- 5 -: DELETE THE ADDITION OF UNEXPLAINED MONEY. FURTHER IN RESPECT OF AGRICULTURAL LAND THE ASSESSEE IS HOLDING LEASE LA NDS IN TRICHY AND ENTERED INTO LEASE AGREEMENT FOR CULTIVATING LAND A ND PRODUCED COPY OF THE LEASE AGREEMENT, AGRICULTURAL PATTA AND THE DETAILS OF CULTIVATION OF CROPS TO SUBSTANTIATE THE CASH BALANCE. THE LD. CIT(A) UPON VERIFYING THE EVIDENCE HAS CONSIDERED THE SOURCE OF AGRICULTURAL INCOME IN CASH FLOW STATEMENT FILED BY THE ASSESSEE IN APP ELLATE PROCEEDINGS AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGG RIEVED BY THE ORDER OF THE CIT(A) THE REVENUE FILED AN APPEAL BEFORE THE TRIBUNAL 5. BEFORE THE TRIBUNAL, THE LD. DEPARTMENTAL REPRESENT ATIVE ARGUED THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN NOT CALLING FOR THE COMMENTS OF THE ASSESSING OFFIC ER AND REMAND REPORT UNDER RULE 46A(1) OF THE INCOME TAX RULES, 1 962. THE STATEMENTS AND DETAILS FILED BEFORE THE CIT(A) WER E NOT FILED BEFORE THE ASSESSING OFFICER FOR VERIFICATION IN ASSESSMEN T PROCEEDINGS. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT FOLLOW ED THE PROCEDURE OF RULE 46A(1) AND ACCEPTED FRESH EVIDENCE IN THE A PPELLATE PROCEEDINGS WITHOUT PROVIDING AN OPPORTUNITY OF EXA MINATION TO THE ASSESSING OFFICER AND PLEADED FOR SET ASIDE THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS). ITA NO.898/MDS/2015 :- 6 -: 6. ON THE OTHER HAND, THE LD. AUTHORISED REPRESENTATIV E RELIED ON THE ORDERS OF THE COMMISSIONER OF INCOME TAX (AP PEALS) AND SUBMITTED THAT THE INFORMATION FILED IN THE APPEL LATE PROCEEDINGS ARE IN COMPLIANCE WITH INCOME TAX RULES. 7. WE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL ON RECORD. THE SUBSTANTIVE GROUND RAI SED BY THE REVENUE FOR VERIFICATION OF MATERIAL EVIDENCE FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) BY ASSESSEE. THE LD. CIT(A) HA S NOT CALLED FOR THE REMAND REPORT OR VERIFIED THE GENUINESS OF DOCU MENTS AND WHETHER DOCUMENTS FORM PART OF THE ASSESSMENT RECORD BUT UN ILATERALLY DECIDED THE CASE RELYING ON THE CASH FLOW STATEMENT, CONFIR MATIONS AND BANK STATEMENTS PARTLY ALLOWED THE APPEAL FILED BY THE A SSESSEE. THE ASSESSING OFFICER IS DEPRIVED OF RIGHT TO VERIFY T HE FRESH EVIDENCE FILED IN THE APPELLATE PROCEEDINGS UNDER THE RULE 46A(1) OF THE INCOME TAX RULES. THE COMMISSIONER OF INCOME TAX (APPEALS) SHO ULD HAVE CALLED FOR THE REMAND REPORT WHEN SUCH FRESH EVIDENCE IS F ILED THOUGH THE POWERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) ARE CO-TERMINUS. WE ARE OF THE CONSIDERED OPINION THAT THE GENUINESS OF STATEMENTS AND OPPORTUNITY OF HEARING TO BE PROVIDED TO THE ASSESS ING OFFICER BY THE COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, W E SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) A ND RESTORE THE ENTIRE FILE TO THE COMMISSIONER OF INCOME TAX (APPE ALS), WHO SHOULD ITA NO.898/MDS/2015 :- 7 -: CALL FOR THE COMMENTS AND REMAND REPORT FROM THE AS SESSING OFFICER ON EACH ISSUE AND PROVIDE AN OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE AND PASS A SPEAKING ORDER ON MERITS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 8TH DAY OF JANUAR Y, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI / / DATED:08.01.2016 KV 0 ( *',23 43%, / COPY TO: 1 . &' / APPELLANT 3. 5, () / CIT(A) 5. 389 *',' / DR 2. *+&' / RESPONDENT 4. 5, / CIT 6. 9:$ ; / GF