S.Periasamy, CHENNAI V. DCIT, CHENNAI

ITSSA 7/CHNY/2014

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0805 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-05-2015
• Assessment Year: misc
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: T VASUDEVAN
• Keywords: Business income; Block assessment
• Section: 263; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T(SS)A.NO . 7/MDS/2014 (BLOCK ASSESSMENT PERIOD FROM 1.4.1996 TO 10.7.200 2) MR. S.PERIASAMY, 84, BARACCA ROAD, 1 ST STREET, NAMMALWARPET, CHENNAI-600 012. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II(3), CHENNAI-600 034. PAN:AHIPP6991N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. T.VASUDEVAN, ADVOCATE /RESPONDENT BY : MR. PATHLAVATH PEERYA, CIT DR /DATE OF HEARING : 20 TH MAY, 2015 /DATE OF PRONOUNCEMENT : 17 TH JULY, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)(C)-II CHEN NAI DATED 7.2.2014 FOR THE BLOCK ASSESSMENT PERIOD FROM 01.04.1996 TO 10.07.2002. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS CHALLENG ING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) ON MERITS AS WELL AS FOR NOT GIVING SUFFICIENT OPPORTU NITY TO THE ASSESSEE BEFORE CONCLUDING THE PROCEEDINGS. AT THE TIME OF 2 IT(SS)A NO.7/MDS/2014 HEARING, COUNSEL FOR THE ASSESSEE SUBMITS THAT GROU ND NO.3 WHICH WAS RAISED BY THE ASSESSEE AGAINST NOT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE BY COMMISSIO NER OF INCOME TAX (APPEALS) IS NOT PRESSED. THEREFORE, THI S GROUND IS DISMISSED AS NOT PRESSED. 3. COMING TO OTHER GROUNDS, THE ONLY ISSUE LEFT FOR ADJUDICATION IS THAT COMMISSIONER OF INCOME TAX (AP PEALS) ERRED IN SUSTAINING THE ADDITION OF ` 14,00,000/- MADE BY THE ASSESSING OFFICER REPRESENTING INCOME FROM GUTKA BU SINESS. 4. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITS T HAT THE ADDITION MADE BY THE ASSESSING OFFICER IN THE BLOCK ASSESSMENT ORDER DATED 31.12.2007 WHILE GIVING EFF ECT TO THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDE R SECTION 263 IS A DOUBLE ADDITION AS SIMILAR ADDITIO N WAS ALREADY MADE, WHILE COMPLETING BLOCK ASSESSMENT UND ER SECTION 144 READ WITH SECTION 158BD READ WITH 158BC ON 29.10.2004, COPY OF WHICH IS PLACED ON RECORD. REFE RRING TO THE BLOCK ASSESSMENT ORDER DATED 29.10.2004, COUNSE L FOR THE ASSESSEE SUBMITS THAT WHILE COMPLETING THE ASSE SSMENT ADDITION OF ` 14 LAKHS WAS MADE TOWARDS UNACCOUNTED CASH 3 IT(SS)A NO.7/MDS/2014 SEIZED DURING THE SEARCH OPERATION TREATING IT TO B E INCOME FROM BANNED GUTKA BUSINESS. COUNSEL FOR THE ASSESSE E REFERRING TO THE IMPUGNED ASSESSMENT ORDER PASSED O N 31.12.2007 SUBMITS THAT SIMILAR ADDITION OF ` 14,00,000/- WAS MADE AGAIN IN THIS ASSESSMENT ORDER WHICH IS A DOUB LE ADDITION. COUNSEL FOR THE ASSESSEE SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) WENT WRONG IN ASSUMING THAT INCOME OF THE ASSESSEE FROM GUTKA BUS INESS WAS ADMITTED AT ` 28,00,000/- AND THEREFORE ` 14,00,000/- WAS ALREADY ASSESSED IN THE ASSESSMENT ORDER DATED 29.10.2004 AND REMAINING AMOUNT OF ` 14,00,000/- IS RIGHTLY ASSESSED IN THE ASSESSMENT COMPLETED ON 31.12.2007 IN CONSEQUENT TO THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. COUNSEL SU BMITS THAT NO SUCH INCOME OF ` 28,00,000/- WAS ADMITTED BY THE ASSESSEE AT ANY POINT OF TIME IN THE COURSE OF SEA RCH. THEREFORE, HE PLEADS FOR DELETION OF ADDITION. 5. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES. 4 IT(SS)A NO.7/MDS/2014 6. HEARD BOTH THE SIDES. PERUSED ORDERS OF LOWER AUTHORITIES. IN THE ASSESSMENT ORDER PASSED ON 29.1 0.2004, THE ASSESSING OFFICER STATED AS UNDER:- DURING SEARCH OPERATION AN AMOUNT OF ` 14 LAKHS IN CASH WAS SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE. IN ANSWER TO QUESTION NO.36 OF THE SWORN STATEMENT, WHICH WAS RECORDED DURING THE COURSE OF SEARCH OPERATION ON 10 TH JULY, 2002 ASSESSEES LATE P.KANNAN WHO WAS RESPONSIBLE FOR THE DAY TO DAY OPERATIONS OF THE GUTKA BUSINESS, STATED THAT CASH OF ` 14 LAKHS REPRESENTS THE PROFIT ON BANNED GUTKA BUSINESS AND THE BALANCE FROM THE WINE BUSINESS OF HIS FATHER. AS COULD BE SEEN FROM THE ABOVE THE ASSESSING OFFIC ER WHILE COMPLETING THE ASSESSMENT ON 29.10.2004 CONSIDERED THE CASH SEIZED AS INCOME FROM GUTKA BUSINESS. HOWEVER, IN THE ASSESSMENT ORDER DATED 31.12.2007, THE ABOVE SAID ` 14,00,000/- CASH SEIZED FROM THE PREMISES OF THE AS SESSEE WAS CONSIDERED AS 50% OF THE BUSINESS INCOME FROM GUTKA BUSINESS AS THE ASSESSING OFFICER WAS OF THE VIEW T HAT SINCE THE ASSESSEE HAS NOT ADMITTED ANY INCOME FROM GUTKA 5 IT(SS)A NO.7/MDS/2014 BUSINESS IN THE RETURN, HE HAS CONSIDERED 50% OF I NCOME FROM GUTKA BUSINESS AND ADDED ANOTHER ` 14,00,000/- AS INCOME FROM GUTKA BUSINESS, FOR THIS THERE IS NO B ASIS AT ALL. NOTHING WAS FOUND IN THE COURSE OF SEARCH SUGGESTIN G THAT THE ASSESSEE EARNED ` 28,00,000/- AS INCOME FROM GUTKA BUSINESS. IT IS ONLY AN ASSUMPTION THAT CASH SEIZED OF ` 14,00,000/- IS 50% OF INCOME FROM GUTKA BUSINESS. THEREFORE, SINCE ` 14,00,000/- CASH SEIZED WAS ALREADY ASSESSED AS INCOME FROM GUTKA BUSINESS WHILE COMPL ETING THE ASSESSMENT ON 29.10.2004, NO SUCH ADDITION CAN BE MADE AGAIN TOWARDS INCOME FROM GUTKA BUSINESS WHILE COMPLETING THE ASSESSMENT ON 31.12.2007. EVEN ASSUM ING FOR A MOMENT THAT ` 14,00,000/- CASH SEIZED IS ONLY PART OF BUSINESS INCOME FROM GUTKA, IT IS NOT ESTABLISHED T HAT SUCH ` 14,00,000/- IS ONLY 50% OF INCOME FROM GUTKA BUSINE SS. THUS, IN OUR VIEW, ADDITION CANNOT BE SUSTAINED AS THE ADDITION WAS MADE NOT ON ANY SEIZED MATERIAL BUT ON LY ON ASSUMPTION AND SURMISES. THEREFORE, WE DIRECT THE A SSESSING OFFICER TO DELETE THE ADDITION OF ` 14,00,000/-. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6 IT(SS)A NO.7/MDS/2014 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2015. SD/- SD/- ( ) ( # % ) ( CHANDRA POOJARI ) ( CHALLA NAGENDRA PRASAD ) ' / ACCOUNTANT MEMBER %( ' / JUDICIAL MEMBER % /CHENNAI, * /DATED 17 TH JULY, 2015 SOMU (,- .- /COPY TO: 1. APPELLANT 2. RESPONDENT 3. / () /CIT(A) 4. / /CIT 5. - ((3 /DR 6. 6 /GF .