M.Anitha Devi, Thiruvarur V. ACIT, Trichy

ITSSA 17/CHNY/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7698 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 14-03-2012
• Assessment Year: misc
• Appeal Filed On: 31-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N DEVANATHAN
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER IT(SS)A NO. 17/(MDS)/2011 BLOCK PERIOD : 1989-90 TO 19.01.2000 M. ANITHA DEVI, NO.22, ELLAIAMMAN KOIL ST., VS. THIRUVARUR-610101. PAN AFAPA 3109 D (APPELLANT) TH THE ASSISTANT COMMISSIONER OF INCOME-TAX, CE CENTRAL CIRCLE -II, T T TRICHY. (R (RESPONDENT) APPELLANT BY : SHRI N. DEVANATHAN, ADVOCATE RESPONDENT BY : SHRI ANIRUDH RAI, IRS, COMMISSIONER OF INCOME-TAX DATE OF HEARING : 14 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 21 ST MARCH, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS IS A BLOCK ASSESSMENT APPEAL. THE APPEAL IS FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) AT TIRUCHIRAPALLI DATED 23.03.2 011 AND ARISES IT(SS)A 17/1 1 :- 2 -: OUT OF THE ASSESSMENT COMPLETED UNDER SEC.158BD REA D WITH SEC.143(3) OF THE INCOME-TAX ACT, 1961. 2. IN COMPLETING THE IMPUGNED BLOCK ASSESSMENT, T HE ASSESSING AUTHORITY HAS MADE TWO ADDITIONS. THE FI RST ADDITION IS ` 54,450/- FOR THE ASSESSMENT YEAR 1999-2000 AND THE SECOND ADDITION IS ` 14 LAKHS FOR THE ASSESSMENT YEAR 2000-01. A TOTAL ADDITION OF ` 14,54,450/- HAS BEEN MADE. 3. THE ADDITION OF ` 54,450/- HAS BEEN MADE ON THE GROUND THAT THE RETURN FILED BY THE ASSESSEE FOR THE SAID ASSES SMENT YEAR 1999- 2000 DECLARING AN INCOME OF ` 54,450/- WAS FILED ONLY ON 12.10.2000, AFTER THE SEARCH AND THAT TOO, AFTER IS SUE OF NOTICE UNDER SEC.148. THE ASSESSING OFFICER TREATED THIS RETURN ED INCOME AS UNDISCLOSED INCOME RELYING ON SEC.158BB(CA) OF THE ACT. 4. THE SECOND ADDITION OF ` 14 LAKHS HAS BEEN MADE ON THE GROUND THAT THE SOURCE OF ACQUISITION OF PROPERTY H AS NOT BEEN EXPLAINED BY THE ASSESSEE. 5. IN FIRST APPEAL, THE COMMISSIONER OF INCOME-TAX (APPEALS) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFIC ER AND FINALLY IT(SS)A 17/1 1 :- 3 -: CONCLUDED THAT THE ADDITIONS ARE JUSTIFIED. THE AS SESSEE IS AGGRIEVED AND, THEREFORE, THE SECOND APPEAL BEFORE US. 6. FIRST WE WILL CONSIDER THE ADDITION OF ` 54,450/- AS UNDISCLOSED INCOME. THE AMOUNT RETURNED BY THE ASS ESSEE AND ADDED BY THE ASSESSING OFFICER IS ` 54,450/-. THE SAID AMOUNT IS BELOW THE TAXABLE LIMIT PRESCRIBED FOR THE ASSESSME NT YEAR 1999- 2000. THE HONBLE KERALA HIGH COURT IN THE CASE O F CIT VS. M.M. GEORGE (254 ITR 45) HAD HELD THAT EVEN IF THE INCO ME BELOW THE TAXABLE LIMIT IS FOUND OUT AS REFLECTED IN ANY RETU RN FILED BY THE ASSESSEE, THE SAME WILL BE IN THE NATURE OF UNDISCL OSED INCOME. BUT THE ABOVE JUDICIAL PRONOUNCEMENT HAS BEEN UNSETTLED BY THE AMENDMENT BROUGHT IN FINANCE ACT, 2002 THROUGH ITS SEC.65 WHEREIN IT IS STATED THAT WHERE THE INCOME IS BELOW THE TAX ABLE LIMIT FOR A PARTICULAR ASSESSMENT YEAR INCLUDED IN THE BLOCK PE RIOD, SUCH AMOUNT SHALL NOT FORM PART OF UNDISCLOSED INCOME. IT IS ALSO FURTHER EXPLAINED THAT THE BASIC EXEMPTION IS AVAILABLE TO AN ASSESSEE WHILE COMPUTING THE UNDISCLOSED INCOME FOR DIFFERENT ASSE SSMENT YEAR INVOLVED IN A BLOCK ASSESSMENT. IN VIEW OF THE ABO VE, WE HOLD THAT THE ASSESSING AUTHORITY IS NOT JUSTIFIED IN MAKING AN ADDITION OF ` 54,450/-. IT IS DELETED. IT(SS)A 17/1 1 :- 4 -: 7. NOW, LET US CONSIDER THE ADDITION OF ` 14 LAKHS. IT IS THE CASE OF THE ASSESSEE THAT SHE WAS MARRIED ONLY IN 1994 A ND SHE HAD NO TAXABLE SOURCE OF INCOME AND, THEREFORE, NO ADDITIO N SHOULD HAVE BEEN MADE IN HER HANDS IN THE LIGHT OF THE JUDGMENT RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT V. SMT. P. K. NOORJAHAN (237 ITR 570). IT IS THE CASE OF THE ASSESSEE THAT THE FUNDS NECESSARY FOR ACQUIRING THE ASSET WAS GIVEN BY HER FATHER AND SOURCE OF HIS FATHER TO SUCH AN AMOUNT WAS SALE OF HIS PROPERTY SITUATED IN KERALA. 8. THE ASSESSEE HAS EXPLAINED BEFORE THE ASSESSING OFFICER THAT HER FATHER WAS IN POSSESSION OF AGRICULTURAL L AND AND THE AGRICULTURAL LAND OF ABOUT 27.5 ACRES WAS SOLD FOR A CONSIDERATION OF ` 40 LAKHS AND IT WAS OUT OF THAT AMOUNT THAT HE GAVE FUNDS TO THE ASSESSEE TO ACQUIRE THE ASSET. SHE ALSO EXPLAINE D BEFORE THE ASSESSING OFFICER THAT THE SALE CONSIDERATION WAS U SED NOT ONLY TO GIVE FUNDS TO THE ASSESSEE TO ACQUIRE SOME PROPERTI ES IN HER NAME BUT ALSO GAVE ` 15.50 LAKHS TO HER BROTHER TO START A NEW BUSINESS AND ALSO HER FATHER SETTLED CERTAIN LOANS WITH INDI AN BANK. 9. WE CONSIDERED THE MATTER IN DETAIL. THE MAIN G RIEVANCE OF THE REVENUE IS THAT THERE IS NO SOURCE TO SHOW THE TRANSPORT OF IT(SS)A 17/1 1 :- 5 -: MONEY FROM KERALA TO ASSESSEES PLACE, TAMIL NADU, AS THE MONEY WAS NOT BROUGHT THROUGH BANK ACCOUNTS. 10. ON GOING THROUGH THE RECORDS OF THE CASE, WE FI ND THAT THE REVENUE HAS NOT DISPUTED THE FACT THAT THE ASSESSEE S FATHER HAS SOLD THE AGRICULTURAL LAND OWNED BY HIS FAMILY TO T HE EXTENT OF 27.5 ACRES DURING THE RELEVANT TIME. THE SALE PROCEEDS OF AGRICULTURAL LAND DO NOT ATTRACT ANY TAX. THEREFORE, IT IS TO B E SEEN THAT THE ASSESSEES FATHER WAS NOT UNDER OBLIGATION TO DOCUM ENT THE SUBSEQUENT TRANSACTIONS OF MONEY IN AN ARTICULATE M ANNER. THE SALE CONSIDERATION ON SALE OF LAND IS TO BE ACCEPTED IN THE LIGHT OF THE TRANSFER DEED REGISTERED AS PER LAW. WHEN THERE IS NO DETAILS AGAINST THE ABOVE FACTS, THE SOURCE AVAILABLE IN TH E HANDS OF THE ASSESSEE STANDS PROVED. THE ASSESSEE AS WELL AS HE R FATHER HAVE STATED THAT MONEY WAS GIVEN BY HER FATHER TO ACQUIR E THE PROPERTY. THE MONEY MIGHT HAVE BEEN GIVEN AS SHARE OF THE ASS ESSEE IN HER FAMILY PROPERTY. WHEN ALL THESE FACTS ARE CO-REL ATED IN COMING TO A REASONABLE CONCLUSION, THE SAME CANNOT BE WHITTLED DOWN BY A TECHNICAL OBJECTION THAT THE FUNDS WERE NOT TRANSFE RRED THROUGH BANKS. MANY SUCH TRANSACTIONS TAKE PLACE OUTSIDE B ANKING CHANNELS. THEREFORE, THE TECHNICAL OBJECTION RAISE D BY THE REVENUE IT(SS)A 17/1 1 :- 6 -: DOES NOT DILUTE THE PROBATIVE VALUE OF EVIDENCES AV AILABLE ON RECORD TO SHOW THAT THE ASSESSEES FATHER HAD SUFFICIENT F UNDS WITH HIM TO GIVE A SUM OF ` 14 LAKHS TO THE ASSESSEE TO ACQUIRE THE PROPERTY I N HER NAME. DOCTRINE OF IMPROBABILITY DECLARED BY TH E HONBLE SUPREME COURT IN THE CASE OF CIT V. P.K.NOORJAHAN ( 237 ITR 570) IS VERY RELEVANT TO BE CONSIDERED IN THE ABOVE FACTUAL CONTEXT. IN THE SAID DECISION, IN THE CASE OF A MUSLIM GIRL WITH NO OSTENSIBLE SOURCE OF INCOME, THE HONBLE HIGH COURT HELD THAT THERE WAS NO JUSTIFICATION IN MAKING ADDITION IN HER HANDS, AS T HERE WAS NO PROBABILITY TO COME TO A CONCLUSION THAT THE MUSLIM GIRL MIGHT HAVE EARNED THAT MUCH INCOME IN THE RELEVANT PREVIOUS YE AR, WHEN THE CIRCUMSTANCES HAVE PROVED BEYOND DOUBT THAT SHE COU LD NOT HAVE EARNED SUCH INCOME. WHEN THE CASE OF THE ASSESSEE IS EXAMINED IN THE LIGHT OF THE FACTS STATED ABOVE AND TESTED I N THE LIGHT OF RULE DECLARED BY THE HONBLE SUPREME COURT IN THE CASE O F CIT V. P.K. NOORJAHAN (237 ITR 570), WE FIND THAT THE ADDITIO N OF ` 14 LAKHS IS UNWARRANTED. THE SAID ADDITION IS DELETED. 10. IN THE PRESENT CASE, THE COMMISSIONER OF INCOME - TAX(APPEALS) HAS NOT EXAMINED THE CONTENTIONS OF TH E ASSESSEE IN AN OBJECTIVE MANNER. IN A SHORT PARAGRAPH HE HAS J UST MENTIONED IT(SS)A 17/1 1 :- 7 -: ABOUT THE REMAND REPORT OBTAINED BY THE ASSESSING O FFICER AND HELD THAT THE ADDITIONS ARE JUSTIFIED. HE HAS NOT APPLI ED HIS MIND IN FACT TO SEE WHETHER THE REMAND REPORT SUBMITTED BY THE ASSE SSING AUTHORITY IS COMPATIBLE TO THE FACTS AVAILABLE ON RECORD. 11. ANYHOW, ON THE STRENGTH OF THE FACTS OF THE PRE SENT CASE ITSELF, WE DELETE BOTH THE ADDITIONS MADE IN THE PR ESENT CASE. AS SUCH, WE ARE NOT INCLINED TO FURTHER PROCEED ON OTH ER LEGAL GROUNDS RAISED BY THE ASSESSEE IN THE PRESENT APPEAL. 12. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 21 ST OF MARCH, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 21 ST MARCH, 2012. MPO* COPY TO: (1) PETITIONE R (2) RESPONDENT (3) CIT ( 4) CIT(A) (5) D.R. ( 6) G.F.