ITO, Namakkal V. C.Chinnusamy, Namakkal

ITSSA 13/CHNY/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1882 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 29-03-2016
• Assessment Year: misc
• Appeal Filed On: 31-07-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH JCITD R
• Assessee Lawyers: R VISWANATHAN C A
• Keywords: Block assessment
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.SS(A) NO.13 /MDS./2015 ( BLOCK PERIOD : 01.04.1996 TO 12.12.2002) & C.O. NO.113/MDS./2015 THE INCOME TAX OFFICER, WARD-5, NAMAKKAL. VS. SHRI C.CHINNUSAMY , 38/5-SVA EXTENSION STREET, NO.1, TIRUCHANGODE, NAMAKKAL DISTRICT. PAN ABRPC 2890 C ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT/ CROSS OBJECTOR ) / APPELLANT BY : MR.A.V.SREEKANTH,JCIT,D.R / RESPONDENT BY : MR.R.VISWANATHAN,C.A / DATE OF HEARING : 29.03.2016 /DATE OF PRONOUNCEMENT : 06 .04.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-18, CH ENNAI DATED IT(SS)A NO.13/MDS/2015 2 30.03.2015 PERTAINING TO BLOCK PERIOD 01.04.1996 T O 12.12.2002. THE ASSESSEE HAS FILED CROSS-OBJECTIONS IN SUPPORT OF THE IMPUGNED ORDER. 2. THERE WAS A DELAY OF 3 DAYS IN FILING THE APPE AL BY THE REVENUE. THE REVENUE HAS FILED PETITION FOR CONDON ATION OF DELAY STATING THAT THE DELAY WAS DUE TO ADMINISTRATIVE RE ASONS. WE HAVE CAREFULLY GONE THROUGH THE REASONS ADVANCED BY THE LD.D.R. WE FIND THAT THE REVENUE HAS PREVENTED BY GOOD AND SUFFICIE NT CAUSE IN FILING THE APPEAL BY DELAY OF 3 DAYS BEFORE THIS TRIBUNAL. IN OUR OPINION, THE REASONS ADVANCED BY THE REVENUE ARE BONAFIDE AND TH EREFORE, THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS FO R ADJUDICATION. 1. THE LD.CIT (A) ERRED IN ALLOWING THE APPEAL OF T HE ASSESSEE. 2. THE LD. CIT (A) HAS FAILED TO NOTE THAT THE STAT EMENT OF OATH MADE U/S 132(4) HAS GOT EVIDENTIAL VALUE HAS OBSERVED BY THE MADRAS HIGH COURT IN THE CASE OF CIT VS S.KHADER KHAN SON 79 DTR 184, MP HIGH COURT IN CASE OF CIT VS. DIGAMBAR KUMARIAIN (HUF) (2013)84 D TR 365 AND IT(SS)A NO.13/MDS/2015 3 DELHI HIGL COURT IN CASE OF CIT VS. DHINGARA METAL WORKS (20110) 328 ITR 384. 3. IT IS CLEARLY BROUGHT OUT IN THE ASSESSMENT ORDE R THAT ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE FOR THE INVESTMENT MAD E. 4. THE LEARNED CIT (A) HAS FAILED TO APPRECIATE THE FACT THAT THE PERSONS WHO SOLD THE PROPERTY HAVE CLEARLY STATED AND PAID THE TAX FOR THE ENTIRE CONSIDERATION INCLUDING ON MONEY WHICH HAS BEEN BRO UGHT TO TIX IN THE HANDS OF THE ASSESSE ALSO BEING THE PURCHASER. 4.1 THE FACTS OF THE CASE ARE THAT THERE WAS A SEA RCH U/S.132 OF THE ACT IN THE CASE OF ONE SHRI K.SENTHAMILSELVAN O F TIRUCHENGODE. FROM THE SEARCH ACTION, THE LD. ASSESSING OFFICER C AME TO KNOW THAT THE ASSESSEE HAD INVOLVED IN A LAND DEAL DURING FEB RUARY, 2001 AND THE ASSESSEE HAS PURCHASED LAND OF 23 ACRES SITUATE D AT MANIKATTIPUDUR NEAR NAMAKKAL FROM S.M.R.KUMARESAN A ND SMT. K.PREMA,W/O.S.M.R.KUMARESAN AND THIS FACT WAS CONFI RMED BEFORE THE INVESTIGATING AUTHORITY THAT THEY HAVE RECEIVED CONSIDERATION FOR SALE OF PROPERTY AT ` 2 LAKHS PER ACRE AND THE ASSESSEE HAS PURCHASED LAND IN THE NAME OF VARIOUS PERSONS. OUT OF THE TOTAL LAND 50% OF LAND WAS PURCHASED BY ASSESSEE GROUP AND ANO THER 50% IT(SS)A NO.13/MDS/2015 4 BELONGED TO OTHER PARTIES. ACCORDING TO THE AO, AS SESSEE WAS NOT DISCLOSED ` 23.3 LAKHS FOR PURCHASE OF 11.65 ACRES. THESE PAYM ENTS WERE MADE BY THE PRESENT ASSESSEE. ACCORDINGLY, TH E AO BROUGHT THIS AMOUNT OF ` 23.3 LAKHS AS UNDISCLOSED INCOME IN THE HANDS OF TH E ASSESSEE. AGAINST THIS, THE ASSESSEE WAS IN APPEAL BEFORE THE LD.CIT(A). 4.2 ON APPEAL, THE LD.CIT(A) OBSERVED THAT THE ASS ESSMENT FRAMED U/S.158BD IS BAD IN LAW WITH FOLLOWING REASO NS:- A) THE AO RELIED ON THE SWORN STATEMENT OF THE VEN DORS WHICH CANNOT BE TREATED AS AN INCRIMINATING DOCUMENT. B) THERE IS NO EVIDENCE IN THE FORM OF DOCUMENTARY PROOF TO SHOW THAT APPELLANT HAD PURCHASED THE IMPUGNED PROP ERTY. C) THE AO, BELIEVING THE STATEMENT OF THE OTHER PAR TY HAD ISSUED THE NOTICE U/S.158BD. D) ABOVE ALL THE ONUS CAST UPON THE AO INPROVING TH AT THE APPELLANT PURCHASED THE IMPUGNED PROPERTY LIES STIL L ON THE AO ONLY. HE HAD NOT IN ANY MANNER REBUTTED THE CLA IM OF THE APPELLANT. IT(SS)A NO.13/MDS/2015 5 E) LAST BUT NOT LEAST, THE AO HAS NOT PROVIDED AN OPPORTUNITY TO THE APPELLANT BY ALLOWING THE APPELLANT TO CROSS-EX AMINE THE OTHER PARTY WHO CLAIMED THAT THE APPELLANT HAD PURC HASED THE IMPUGNED PROPERTY. ACCORDINGLY, LD.CIT(A) PLACED RELIANCE ON THE TRIB UNAL DECISION IN THE CASE OF SHRI R.S.PRAKASH IN IT(SS) NO.67/MDS./2 007 DATED 09.03.2009 WHEREIN HELD AS FOLLOWS:- THE HONBLE APEX COURT IN THE CASE OF MANISH MAHES WARI VS. ACIT AND ANR.(2007) 289 17R 341 (SC) HAS HELD THAT BEFORE THE PROVISIONS OF SECTION 158BD, ARE INVOKED AGAINS T A PERSON OTHER THAN THE PERSON WHOSE PREMISES HAVE BEEN SEAR CHED U/S.132 OR DOCUMENTS AND OTHER ASSES HAVE BEEN REQU ISITIONED U/S. 1324, THE CONDITIONS PRECEDENT HAVE TO BE SATI SFIED AND THE AO SHOULD HAVE RECORDED HIS SATISFACTION THAT ANY U NDISCLOSED INCOME BELONGED TO OTHER PERSON. IN THIS CASE ON HA ND, THE AO IS NOT SURE THAT THE SAID AMOUNT HAS TO BE ASSESSED IN THE CASE OF THE ASSESSEE ON SUBSTANTIVE BASIS. ON THE OTHER HAND, HE HAS MADE THE ASSESSMENT OF THE SAID AMOUNT ONLY ON PROTECTIVE BASIS ON THE ASSESSEE U/S. 158BD. THIS C LEARLY SHOWS THAT THE AO IS NOT SATISFIED AS TO THE ASSESS MENT OF THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE. THUS, WHE N THE AO HIMSELF IS NOT DEAR ABOUT THE FACT IN WHOSE HANDS I T IS TO BE IT(SS)A NO.13/MDS/2015 6 TAXED, THERE COULD NOT HAVE BEEN SATISFACTION ARRIV ED AT BY THE AO TO ASSESS THE SAME IN THE HANDS OF THE ASSESSEE. THAT WHY, THE ASSESSMENT WAS MADE ON PROTECTIVE BASIS BY THE AO?. IF THE RATIO OF THE APEX COURT IS APPLIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED OPINIO N, THE BLOCK ASSESSMENT MADE U/S.1588D READ WITH SECTION 1588C O N PROTECTIVE BASIS CANNOT STAND. HENCE, WE QUASH THE ORDER OF THE AO?. ACCORDINGLY, QUASHED THE ASSESSMENT. AGAINST THIS THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AT THE OUTSET WE ARE INCLINED TO OBSERVE THAT THE GROUND RAISED BY THE REVENUE IN THIS APPEAL IS NOT EMANATE D FROM THE ORDER OF THE LD.CIT(A). HENCE, IT DOES NOT REQUIRE ANY AD JUDICATION. FURTHER REGARDING THE DELETION OF ADDITION OF CIT(A), IN OU R OPINION WHILE FRAMING ASSESSMENT U/S.158BD OF THE ACT, THERE SHOU LD BE A RECORDING OF SATISFACTION BY THE AO. TO SUPPORT H IS VIEW, WE TAKE SUPPORT FROM JUDGEMENT OF SUPREME COURT IN THE CASE OF MANISH MAHESWARI VS. ACIT REPORTED IN 289 ITR 341(SC) HELD THAT: IT(SS)A NO.13/MDS/2015 7 BEFORE THE PROVISIONS OF SECTION 158BD OF THE INCOM E-TAX ACT, 1961, ARE INVOKED AGAINST A PERSON OTHER THAN THE P ERSON WHOSE PREMISES HAVE BEEN SEARCHED UNDER SECTION 132 OR DOCUMENTS AND OTHER ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A, THE CONDITIONS PRECEDENT HAVE TO BE S ATISFIED. ACCORDINGLY, WHERE THE PREMISES OF A DIRECTOR OF A COMPANY AND HIS WIFE WERE SEARCHED UNDER SECTION 132 OF THE INCOME- TAX ACT, 1961, AND A BLOCK ASSESSMENT HAD TO BE DON E IN RELATION TO THE COMPANY, THE ASSESSING OFFICER HAD TO (I) RECORD HIS SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGED TO THE COMPANY, AND (II) HAND OVER THE BOOKS OF ACC OUNT AND OTHER DOCUMENTS AND ASSETS SEIZED TO THE ASSESSING OFFICER HAVING JURISDICTION AGAINST THE COMPANY. BEING SO, WE ARE INCLINED TO CONFIRM THE ORDER OF T HE LD.CIT(A) IN QUASHING THE ASSESSMENT OF THE ASSESSEE U/S.158BD OF THE ACT AS THE LD.D.R IS NOT ABLE TO PLACE ON RECORD REGARDING THE SATISFACTION BY THE AO. HENCE, THE APPEAL OF REVENUE IS DISMISSED. 6. COMING TO THE CROSS OBJECTIONS RAISED BY THE AS SESSEE, THERE WAS A DELAY OF 12 DAYS IN FILING THE CROSS OBJECTIO NS BY THE ASSESSEE. NO CONDONATION PETITION FILED BY THE ASSESSEE TO CO NDONE THE DELAY. IT(SS)A NO.13/MDS/2015 8 HENCE, WE ARE OF THE OPINION THAT THOUGH IT IS SUPP ORTIVE OF ORDER OF THE LD.CIT(A), THERE IS NO VALID CROSS OBJECTIONS F ILED BY THE ASSESSEE. ACCORDINGLY, THE CROSS OBJECTIONS FILED BY THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, BOTH THE APPEAL OF REVENUE AS WEL L AS THE CROSS OBJECTIONS BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ! . ' #$ % ( DUVVURU RL REDDY ) ) ( ( &' ( ) ) ) CHANDRA POOJARI %* JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH APRIL,2016 . K S SUNDARAM. +,**-./*0/ /COPY TO: * 1. /APPELLANT 2. /RESPONDENT 3. * 1*% /CIT(A) 4. * 1 /CIT 5. /2 3*--4 /DR 6. 3 $5*6 /GF