DCIT CORPORATE CIRCLE 1(2), CHENNAI V. PALLAVARAM KOTHANDARAMAN RAMESH, CHENNAI

ITA 95/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4426 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 10-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Set aside
• Section: 69A; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.3147/CHNY/2018 ( )( / ASSESSMENT YEAR : 2015-16 SHRI PALLAVARAM KOTHANDARAMAN RAMESH, NEW NO.20, OLD NO.11, POES ROAD, 1 ST STREET, TEYNAMPET, CHENNAI - 600 018. PAN : AAJPR 5893 B V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(2), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) ./ ITA NO.95/CHNY/2019 ( )( / ASSESSMENT YEAR : 2015-16 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(2), CHENNAI. V. SHRI PALLAVARAM KOTHANDARAMAN RAMESH, NEW NO.20, OLD NO.11, POES ROAD, 1 ST STREET, TEYNAMPET, CHENNAI - 600 018. (+,/ APPELLANT) (-.+,/ RESPONDENT) (/0 1 2 /ASSESSEE BY : SH. N. DEVANATHAN, ADVOCATE 3 1 2 /REVENUE BY : SHRI AR.V. SREENIVASAN, JCIT 4 1 0$ / DATE OF HEARING : 27.02.2019 56) 1 0$ / DATE OF PRONOUNCEMENT : 21.03.2019 2 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNAI, DATED 10.10.2018 AND PERTAIN TO ASSESSMENT YEAR 2015- 16. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HEARD BOTH THE APPEALS TOGETHER AND DIS POSING THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 13 DAYS IN FILING THE APPEA L BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR COND ONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE AND THE LD.COUNSEL FOR THE ASSESSEE. WE FIND THAT THER E WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULAT ED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF 85,11,654/- AS UNEXPLAINED INVESTMENT UNDER SECTION 69A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 4. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSEE AND HIS WIFE SMT. MARIA RAMESH 3 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 PURCHASED PROPERTY IN AUSTRALIA AND SINGAPORE IN TH E YEAR 2010. DURING THE FINANCIAL YEAR 2015-16 RELEVANT TO ASSES SMENT YEAR 2016-17, ACCORDING TO THE LD. COUNSEL, THE PROPERTY AT AUSTRALIA WAS SOLD. ACCORDING TO THE LD. COUNSEL, AT THE TIME OF PURCHASING THE PROPERTY IN THE YEAR 2010, LOAN WAS BORROWED FROM O NE SHRI BALAMURUGAN TO THE EXTENT OF 1,81,22,028/-. SINCE THE PROPERTY WAS PURCHASED IN THE NAME OF THE ASSESSEE AND HIS W IFE, THE ASSESSING OFFICER TREATED 50% OF THE LOAN AS ASSESS EES INCOME. THE BALANCE 50% WAS TAKEN AS INCOME OF THE ASSESSEE S WIFE. ACCORDING TO THE LD. COUNSEL, THE CLAIM OF LOAN FRO M SHRI BALAMURUGAN WAS DISBELIEVED BY THE ASSESSING OFFICE R AND ADDITION WAS MADE BOTH IN THE HANDS OF THE ASSESSEE AND HIS WIFE. IN FACT, THE ADDITION WAS MADE IN THE CASE OF ASSESSEES WIF E FOR THE ASSESSMENT YEAR 2014-15. IN THE CASE OF THE ASSESS EE, ACCORDING TO THE LD. COUNSEL, NO ADDITION WAS MADE FOR THE AS SESSMENT YEAR 2014-15. HOWEVER, THE ADDITION WAS MADE DURING THE YEAR UNDER CONSIDERATION, I.E. 2015-16. ACCORDING TO THE LD. COUNSEL, WHEN THE CASE OF THE ASSESSEES WIFE CAME BEFORE THIS TRIBUN AL IN I.T.A. NO.1313/CHNY/2018, THIS TRIBUNAL BY AN ORDER DATED 01.11.2018 FOUND THAT THE PROPERTIES WERE PURCHASED IN AUSTRAL IA AND SINGAPORE BY BORROWING LOAN FROM SHRI BALAMURUGAN I N THE FINANCIAL 4 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 YEAR 2010-11 AND THE PROPERTY IN AUSTRALIA WAS SOLD DURING THE FINANCIAL YEAR 2015-16, THEREFORE, THERE CANNOT BE ANY ADDITION FOR THE ASSESSMENT YEAR 2014-15. IN THIS CASE ALSO, AC CORDING TO THE LD. COUNSEL, WHEN THE PROPERTY WAS PURCHASED IN THE YEAR 2010 BY BORROWING LOAN FROM SHRI BALAMURUGAN, THERE CANNOT BE ANY ADDITION DURING THE YEAR UNDER CONSIDERATION. ACCO RDING TO THE LD. COUNSEL, THERE WAS NO INVESTMENT MADE DURING THE YE AR UNDER CONSIDERATION. THE PROPERTY AT AUSTRALIA WAS SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE RE IS NO QUESTION OF UNEXPLAINED INVESTMENT UNDER SECTION 69A OF THE ACT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS N OT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER UNDER SECTION 69A OF THE ACT. 5. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSING OFFICER FOUND THAT THE PROPERTY WAS SOLD DURING THE ASSESSM ENT YEAR UNDER CONSIDERATION. THE ASSESSEE CLAIMED THAT THE LOAN WAS BORROWED FROM ONE SHRI BALAMURUGAN. AS PER THE AGREEMENT, A CCORDING TO THE LD. D.R., THE ASSESSEE HAS TO REPAY THE LOAN WI THIN A PERIOD OF FIVE YEARS. HOWEVER, THE LOAN WAS NOT REPAID SO FA R. THEREFORE, THE 5 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 ASSESSING OFFICER FOUND THAT NO PRUDENT PERSON WILL WAIT FOR SUCH A LONG TIME. HENCE, ACCORDING TO THE LD. D.R., THE I NVESTMENT MADE IN THE PROPERTY TO THE EXTENT OF 85,11,654/- WAS TAKEN AS INCOME OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE PROPERTIES AT AUSTRALIA AND SINGAP ORE WERE PURCHASED BY THE ASSESSEE AND HIS WIFE JOINTLY. TH E SOURCE OF INVESTMENT APPEARS TO BE THE LOAN TAKEN FROM ONE SH RI BALAMURUGAN. THE ASSESSING OFFICER DOUBTED THE BOR ROWAL OF LOAN AND TREATED THE SAME AS INCOME OF THE ASSESSEE AND HIS WIFE. IN THE CASE OF THE ASSESSEES WIFE SMT. MARIA RAMESH W AS ALSO, THE ASSESSING OFFICER MADE ADDITION. WHEN THE CASE OF THE ASSESSEES WIFE SMT. MARIA RAMESH CAME BEFORE THIS TRIBUNAL, T HIS TRIBUNAL SPECIFICALLY FOUND THAT THE PROPERTIES AT AUSTRALIA AND SINGAPORE WERE PURCHASED IN THE YEAR 2010. THEREFORE, THE IN VESTMENT, IF ANY, HAS TO BE DOUBTED ONLY IN THE YEAR 2010-11. IN FAC T, THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEES WIFE IN THE ASSESSMENT YEAR 2014-15. WHEN THE ADDITION IN THE HANDS OF TH E ASSESSEES WIFE WAS MADE FOR ASSESSMENT YEAR 2014-15, IT IS NO T KNOWN HOW 6 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 THE ADDITION CAN BE MADE IN THE HANDS OF THE ASSESS EE DURING THE YEAR UNDER CONSIDERATION? MOREOVER, DURING THE YEA R UNDER CONSIDERATION, THERE IS NO INVESTMENT AT ALL. IN F ACT, THIS TRIBUNAL IN THE ASSESSEES WIFES CASE HAS OBSERVED AS FOLLOWS IN I.T.A. NO.1313/CHNY/2018:- 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE PURCHASED PR OPERTIES AT SINGAPORE AND AUSTRALIA. DURING THE FINANCIAL Y EAR 2015- 16, THE ASSESSEE SOLD PROPERTY AT AUSTRALIA. THE AS SESSING OFFICER ASKED THE ASSESSEE TO PROVE THE SOURCE FOR INVESTMENT IN THE PROPERTY AT AUSTRALIA AND SINGAPO RE TO THE EXTENT OF 2,05,62,211/-. THE ASSESSEES EXPLANATION WITH REGARD TO LOAN BORROWED FROM SHRI BALAMURUGAN WAS DISBELIEVED AND 50% OF LOAN AMOUNT WAS ADDED TO THE T OTAL INCOME OF THE ASSESSEE. 5. THE CONTENTION OF THE ASSESSEE BEFORE THIS TRIBUN AL IS THAT THE PROPERTY WAS PURCHASED BORROWING LOAN FROM SHRI BALAMURUGAN IN THE FINANCIAL YEAR 2010-11 AND THE PROP ERTY AT AUSTRALIA WAS ADMITTEDLY SOLD DURING THE FINANCIAL YEAR 2015- 16. THEREFORE, THERE CANNOT BE ANY ADDITION DURING THE YEAR UNDER CONSIDERATION. IN RESPECT OF VERY SAME PROPE RTY AT AUSTRALIA, THE ASSESSING OFFICER MADE ADDITION OF 85,11,654/- IN THE HANDS OF THE ASSESSEES HUSBAND FOR T HE FINANCIAL YEAR 2014-15 RELEVANT TO ASSESSMENT YEAR 2015- 16. FOR THE ASSESSMENT YEAR 2014-15 IN RESPECT OF VERY SAM E PROPERTY AND VERY SAME LOAN, NO ADDITION WAS MADE I N THE HANDS OF THE ASSESSEES HUSBAND. THEREFORE, THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE ASSESSEE ALSO FOR ASSESSMENT YE AR 2014- 15, WHICH IS UNDER CONSIDERATION. IN OTHER WORDS, T HERE WAS NO INVESTMENT OR SALE OF PROPERTY DURING THE YEAR U NDER CONSIDERATION. THEREFORE, NO QUESTION OF ANY DISAL LOWANCE / 7 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 ADDITION WOULD ARISE FOR CONSIDERATION IN RESPECT O F THE PROPERTY AT AUSTRALIA AND SINGAPORE DURING THE YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION OF 90,61,014/- IS DELETED. 7. IN VIEW OF THE ABOVE FINDING OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEES WIFE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THEREFORE, WE ARE UNABLE TO U PHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF B OTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION MADE BY THE AS SESSING OFFICER TO THE EXTENT OF 85,11,654/- IS DELETED. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. HOWEVER, THE REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 21 ST MARCH, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 21 ST MARCH, 2019. KRI. 8 I.T.A. NO.3147/CHNY/18 I.T.A. NO.95/CHNY/19 1 -09: ;:)0 /COPY TO: 1. (/0 /ASSESSEE 2. -.+, /RESPONDENT 3. 4 <0 () /CIT(A)-1, CHENNAI 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. := -0 /DR 6. >( ? /GF.