N.Ravi, Trichy V. ACIT, Trichy

ITSSA 12/CHNY/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0723 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-04-2015
• Assessment Year: misc
• Appeal Filed On: 10-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T(SS)A.NO . 12/MDS/2012 (BLOCK PERIOD FROM 1987-88 TO 1997-98 & 01.04.97 TO 10.12.97) MR. N.RAVI, 44, ALLITHIRURAI ROAD, ARUNA NAGAR, PUTHUR, TIRUCHY-620 017. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, 44, WILLIAMS ROAD, CANTONMENT, TIRUCHIRAPALLI-620 001. PAN: ABJPN7646P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. PATHLAVATH PEERYA, CIT DR /DATE OF HEARING : 16 TH APRIL, 2015 /DATE OF PRONOUNCEMENT : 1 ST MAY, 2015 / O R D E R PER N.R.S. GANESAN, JM: THIS APPEAL OF THE ASSESSEE WAS EARLIER DISPOSED OF BY THIS TRIBUNAL BY AN ORDER DATED 03.12.2012. HOWEVER , THE ASSESSEE FILED MISCELLANEOUS PETITION IN M.P.NO.130/MDS/2013. AFTER HEARING BOTH THE PARTIES , THIS TRIBUNAL RECALLED THE ORDER DATED 3.12.2012 AND RES TORED THE APPEAL ON FILE. ACCORDINGLY, THE APPEAL WAS POSTED FOR HEARING. 2. THE FIRST ISSUE ARISES IN THIS APPEAL FOR CONSID ERATION IS ENHANCEMENT OF INCOME ASSESSED AT ` 69,675/-. SHRI 2 IT(SS)A. NO.12/MDS/2012 S.SRIDHAR, LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT ASSESSING OFFICER DEDUCTED INTEREST OF ` 69,675/- FROM THE AMOUNT OUTSTANDING AS ON THE DATE OF SEARCH TO THE EXTENT OF ` 13,36,600/-. HOWEVER, THE COMMISSIONER OF INCOME TA X (APPEALS) FOUND THAT DEDUCTION OF INTEREST TO THE E XTENT OF ` 69,675/- FROM THE OUTSTANDING AMOUNT OF ` 13,36,600/- IS NOT POSSIBLE AND ACCORDINGLY HE ENHANCED THE ASSESS MENT OF ` 69,675/- WITHOUT ISSUING ANY NOTICE TO THE ASSESSE E AS REQUIRED UNDER THE ACT. IN RESPECT OF OTHER ADDITI ONS MADE BY THE ASSESSING OFFICER AS CONFIRMED BY THE COMMISSIO NER OF INCOME TAX (APPEALS), LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT NO MATERIAL WAS FOUND DURING THE COU RSE OF SEARCH OPERATION. ACCORDING TO THE LEARNED COUNSEL, ASSESSMENT WAS FRAMED UNDER THE OLD PROVISIONS OF B LOCK ASSESSMENT. PROVISIONS OF SECTION 158BB(1) CLEARLY SAY THAT UNDISCLOSED INCOME OF THE BLOCK PERIOD SHALL BE COM PUTED ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH AND SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE FO UND BY THE ASSESSING OFFICER DURING THE COURSE OF SEARCH O PERATION. IN THIS CASE, NO REFERENCE WAS MADE BY THE ASSESSIN G OFFICER OR COMMISSIONER OF INCOME TAX (APPEALS) WITH REGARD TO 3 IT(SS)A. NO.12/MDS/2012 SEIZED MATERIAL IN FACT NO SEIZED MATERIAL WAS FOUN D DURING THE COURSE OF SEARCH OPERATION. THE ASSESSING OFFIC ER ESTIMATED THE DRAWINGS FOR HOUSEHOLD EXPENDITURE AS LOW, THEREFORE, ACCORDING TO COUNSEL THE ADDITION MADE B Y THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS NOT SUSTAINABLE. 3. ON THE CONTRARY, SHRI PATHLAVATH PEERYA, LEARNE D DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ENHANCED THE INCOME OF ASSESSMENT WITHOUT ISSUING NOTICE TO THE ASSESSEE THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE F ILE OF COMMISSIONER OF INCOME TAX (APPEALS) FOR RECONSIDER ATION, AFTER ISSUING NOTICE AS REQUIRED UNDER THE PROVISIO NS OF THE ACT. IN RESPECT OF OTHER ADDITIONS, ADMITTEDLY, TH E ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. THE ASSESS EE CLAIMS THAT HE HAS ENGAGED IN THE BUSINESS OF MONEY LENDING. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE DEPARTMENTAL REPRESENTATIVE, THE INCOME CAN BE ESTI MATED REASONABLY ON THE BASIS OF THE STATEMENT RECORDED D URING THE COURSE OF SEARCH OPERATION. 4 IT(SS)A. NO.12/MDS/2012 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. W ITH REGARD TO ENHANCED INCOME OF ASSESSMENT OF ` 69,675/-, ADMITTEDLY NO NOTICE WAS ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) FOR SUCH ENHANCEMENT. HOWEVER, THIS TRIBU NAL FINDS THAT THIS IS A RECTIFIABLE ERROR AND THEREFORE MATT ER CAN BE REMITTED BACK TO THE LOWER AUTHORITIES FOR RECONSID ERATION AFTER ISSUING PROPER NOTICE TO THE ASSESSEE. 5. IN RESPECT OF OTHER ADDITIONS WITH REGARD TO CRE DIT AND LOAN OBTAINED FROM VARIOUS PERSONS AND LOW DRAWINGS FOR HOUSEHOLD EXPENDITURE, ORDERS OF BOTH THE AUTHORITI ES BELOW DO NOT REFER TO THE MATERIAL SEIZED DURING THE COUR SE OF SEARCH OPERATION. IN VIEW OF THE PROVISIONS OF SECTION 155 BB(1) OF THE ACT, THE ASSESSING OFFICER HAS TO CONFINE HIMSELF T O THE MATERIALS FOUND DURING THE COURSE OF SEARCH OPERATI ON AND SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND RELATABLE TO THE EVIDENCE FOU ND DURING THE COURSE OF SEARCH OPERATION. THEREFORE, IT IS OB LIGATORY ON THE PART OF THE ASSESSING OFFICER TO EXPLAIN HOW TH E INCOME COMPUTED FOR THE BLOCK PERIOD IS UNDISCLOSED INCOME WITH REFERENCE TO THE MATERIAL FOUND DURING THE COURSE O F SEARCH 5 IT(SS)A. NO.12/MDS/2012 OPERATION. SINCE SUCH REFERENCE WAS NOT MADE BY THE LOWER AUTHORITIES, THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT MATTER NEEDS TO BE RECONSIDERED ACCORDINGLY. THUS, ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSU ES ARE REMITTED BACK TO THE FILE OF ASSESSING OFFICER AND THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUES AFRES H IN THE LIGHT OF THE EVIDENCE FOUND DURING THE COURSE OF SE ARCH OPERATION AND SUCH OTHER MATERIAL WHICH ARE AVAILAB LE WITH HIM AND THEREAFTER DECIDED THE ISSUES IN ACCORDANCE WITH LAW, AFTER CONSIDERING THE PROVISIONS OF SECTION 155BB(1 ) OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF MAY, 2015. SD/- SD/- (A.MOHAN ALANKAMONY) (N.R.S.GANESAN) (. ) ( . . . ) (/ ACCOUNTANT MEMBER *+ ( /JUDICIAL MEMBER * /CHENNAI, - /DATED 1 ST MAY, 2015 SOMU +./ 0/ / COPY TO: 1. APPELLANT 2. RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / ++3 /DR 6. 6 /GF .