ACIT, Trichy V. Shri S.Prabhu, Trichy

ITSSA 22/CHNY/2010

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3541 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-07-2017
• Assessment Year: misc
• Appeal Filed On: 30-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Keywords: Block assessment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T(SS).A. NO. 22/MDS/2010 BLOCK ASSESSMENT YEAR : 01.04.1996 TO 12.02.2002 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II, TIRUCHIRAPALLI. VS. SHRI S. PRABHU, 26-A, 1 ST CROSS ST., WEST EXTN., ANNA NAGAR, TENNUR, TRICHY 17. [PAN: AJJPP 6131H] ( / APPELLANT) ( / RESPONDENT) %& / APPELLANT BY : SHRI SAILENDRA MAMIDI, CIT )*%& / RESPONDENT BY : NONE & /DATE OF HEARING : 13.09.2017 & /DATE OF PRONOUNCEMENT : 07.12.2017 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE REVENUE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), TIRUCHIRAPALL I IN ITA NO. 249/06-07 DATED 29.04.2010. :-2-: ITA NO.22/MDS/2010 2. SHRI S. PRABHU, THE ASSESSEE, AN INDIVIDUAL, WAS NOT PREVIOUSLY ASSESSED TO TAX. A SEARCH OPERATION WAS CARRIED OUT AT HIS RESIDENCE ON 12.12.2002 BASED ON INFORMATION THAT THE ASSESSEE W AS ENGAGED IN THE BUSINESS OF OPERATING A NUMBER OF SAND QUARRIES AND HE HAS NOT FILED RETURN ADMITTING THE INCOME FROM THAT BUSINESS. DURING TH E SEARCH, SOME DOCUMENTS WERE SEIZED AND THE ASSESSING OFFICER HAS COMPLETED THE BLOCK ASSESSMENT ON THE BASIS OF SUCH SEIZED DO CUMENTS FOR THE BLOCK PERIOD 01.04.1996 TO 12.12.20 02 ON 27.01.2005. WHEREIN, THE AO DECLARED AN UNDISCLOSED INCOME FOR THE BLOCK PERIOD AT RS. 81,75,850/- AS AGAINST THE NILL INCOME RETURNED BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) PARTLY ALLOWED THE APPEAL. 3. AGAINST THE CIT(A) ORDER, THE REVENUE FILED THIS APPEAL WITH THE FOLLOWING GROUNDS: 1.A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE. THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE A.O . U/S 158BB(1)(CA) AMOUNTING TO RS.2,95.879. 1.B. THE LEARNED CIT(A) HAS ERRED IN INVOKING THE P ROVISIONS OF SECTION 158BB(1)(C)(A) WITHOUT NOTING THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS WHICH CAN BE STATED TO B E MAINTAINED IN THE NORMAL COURSE OF HIS BUSINESS AS PER THE PROVISIONS OF SEC TION 158BB(1)(C)(A). :-3-: ITA NO.22/MDS/2010 1C. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE A SSESSEE HAS NOT FILED RETURNS OF INCOME FOR THE ASSESSMENT YEARS 199 7-98 TO 2003-04 AND ACCORDINGLY THE PROVISIONS OF SECTION 158BB(I)(CA) WERE RIGHTLY INVOKED BY THE AO. 2A ON THE FACTS AND IN THE CIRCUMSTANCES OR THE CAS E. THE LEARNED CIT(A) HAS ERRED IN GIVING CREDIT TO THE OPENING CAPITAL A T RS. 1,42,486. 2B THE LEARNED CIT(A) HAS FAILED TO NOTE THAT FOR DI SALLOWING THE OPENING CAPITAL THE AO NEED NOT RELY ON ANY SEIZED MATERIAL AND THAT THE BURDEN IS ONLY ON THE ASSESSEE TO PROVE THE OPENING CAPITAL AND THAT THE ASSESSEE HAS NOT DISCHARGED HIS BURDEN WITH COGENT EVIDENCE. 3A. ON THE FACTS AND IN THE CIRCUMSTANCES OR THE CAS E. THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE AO. TOWARDS BOMMAPALAYAM SAND QUARRY AT RS. 3,60,500. 3B THE LEARNED CIT(A) HAS FAILED TO NOTE THAT ALL TH E CORRESPONDENCES EVEN ALTER THE FORMATION OR THE ALLEGED FIRM ARE IN THE N AME OF THE ASSESSEE AND THAT THE EXISTENCE OF THE FIRM OR THE GENUINENESS OF THE FIR M HAS NOT BEEN PROVED BY THE ASSESSEE. 4A ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE A.O. TOWARDS AYYAPALAYAM SAND QUARRY AT RS. 1,55,000. 4B THE LEARNED CIT(A) HAS ERRED IN OBSERVING THAT S OURCE OF CREDITS CANNOT BE ENQUIRED BY THE AO WITHOUT NOTING THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS BIJU PATNAIK [1986] 160 ITR 674 (SC). 4C THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE AL LEGED CREDITORS NEITHER APPEARED BEFORE THE AO NOT GAVE ANY SATISFACTORY EXPL ANATION FOR THE SOURCES 5A ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE AO. TOWARDS PANAYAPURAM SAND QUARRY LEASE AMOUNT AT RS.S5,85,003, PANAYAPURAM SA ND QUARRY SEIGNIORAGE FEES AT RS. 58,59,230 AND PANAYAPURAM SAND QUARRY INCOME AT RS. 18,02,840. 5B THE LEARNED CIT(A) HAS ERRED IN DELETING THE ABO VE ADDITIONS SINCE THE CIT(A) HIMSELF HAS ACCEPTED PROBABILITY OF THE COUR T ORDER MODIFIED LATER OR THE PARTNERS REACHED A COMPROMISE VIDE PARA 12.6 OF THE APPELLATE ORDER. :-4-: ITA NO.22/MDS/2010 5C THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE CL AIM THAT THE QUARRY WAS RUN BY A FIRM BY NAME M/S RANGANATHA AGENCIES HAS NO T BEEN PROVED BY THE ASSESSEE THE BUSINESS WAS ONLY IN THE ASSESSEE'S NA ME AND ALL THE REMITTANCES WERE MADE ONLY BY HIM. 5D THE LEARNED CIT(A) HAS RAILED TO GIVE ADEQUATE W EIGHT TO THE FACT THAT THE ASSISTANT DIRECTOR. DEPARTMENT OF GEOLOGY AND M INES HAS CONFIRMED THE PAYMENTS IN THE NAME OF THE ASSESSEE. 6A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE AO. TOWARDS INVESTMENT IN KALLAPATTI SAND QUARRY AT RS.1,70,170. 6B THE LEARNED CIT(A) HAS RAILED TO NOTE THAT SRI K. SOUNDARARAJAN'S STATEMENT IS NOT SUPPORTED BY ANY EVIDENCE AND HENC E HIS STATEMENT CANNOT BE RELIED UPON. 7A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN DELETING THE ESTIMATED ADDITIONS MADE B) THE /\.0. TOWARDS INCOME FROM KALLUPATTI QUARRY AT RS.5,27,527 AND INCOME FROM THOGUR SAND QUARRY AT RS.3,10,000 7B THE LEARNED CIT(A) HAS RAILED TO NOTE THAT IN TH E FOLLOWING CASES ESTIMATION OF INCOME HAS BEEN APPROVED. I) S. SURENDRANATH REDDY VS ACIT 72 ITD 205 (ITAT HY D) II) RAJNIK AND CO VS ACIT 2511TR 501 (AP) III) RAJENDRA KUMAR LAHOTY VS DCIT 266 ITR 621 (RAJ ) 8A ON THE FACTS AND IN THE CIRCUMSTANCES OR THE CASE THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE AO TOWARDS MUSIRI LIQUOR SHOP LICENCE FEE AT RS.1,50,000. 8B THE LEARNED CIT(A) HAS FAILED TO NOTE THE VARIATI ON OF SIGNATURES OF THE ALLEGED CREDITORS WHICH PROVES THAT THE CREDITS WER E NOT GENUINE. 9A ON THE FACTS AND IN THE CIRCUMSTANCES OR THE CAS E THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE A.O , TOWARDS INVESTMENT IN THOGUR SAND QUARRY AT RS. 1,00,000 :-5-: ITA NO.22/MDS/2010 9B THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE AS SESSEE HAS NOT DISPROVED THE CONTENTS OF THE SEIZED DOCUMENT SINCE THE STATEMENTS DEPOSED BY SRI. P.T. SENTHILKUMAR AND SRI S. RAMESH WERE NOT SUPP ORTED BY ANY EVIDENCE. NONE APPEARED FOR THE ASSESSEE. THE DR TOOK US THR OUGH THE GROUNDS OF APPEAL AND PLEADED TO SUSTAIN THE ORDER OF THE AO. 4. WE FIND THAT THE ASSOCIATED FACTS AND CIRCUMSTAN CES ON THE IMPUGNED ISSUES HAVE NOT BEEN PROPERLY BROUGHT AND APPRECIAT ED. IN THE FACTS AND CIRCUMSTANCES, WE DEEM IT FIT TO REMIT THE ISSUES B ACK TO THE AO FOR RE- EXAMINING THEM AFRESH AND PASSING DUE ORDER IN ACCO RDANCE WITH LAW, AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. IN TH E FACTS AND CIRCUMSTANCES, THE REVENUES GROUNDS OF APPEAL ARE TREATED AS ALLO WED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE REVENUES APPEAL IS TREATED A S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 07 TH DAY OF DECEMBER, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER :-6-: ITA NO.22/MDS/2010 /CHENNAI, 0 /DATED: 07 TH DECEMBER, 2017 JPV &)1232 /COPY TO: 1. % / APPELLANT 2. )*% /RESPONDENT 3. 4 ) ( /CIT(A) 4. 4 /CIT 5. 2) /DR 6. 7 /GF