C.Selvaraj, Coimbatore v. ACIT, Coimbatore

CO 9/CHNY/2012 | 2008-2009
Pronouncement Date: 30-07-2012 | Result: Dismissed

Appeal Details

RSA Number 921723 RSA 2012
Assessee PAN ABBPS6371C
Bench Chennai
Appeal Number CO 9/CHNY/2012
Duration Of Justice 6 month(s) 18 day(s)
Appellant C.Selvaraj, Coimbatore
Respondent ACIT, Coimbatore
Appeal Type Cross Objection
Pronouncement Date 30-07-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-07-2012
Date Of Final Hearing 31-07-2012
Next Hearing Date 31-07-2012
Assessment Year 2008-2009
Appeal Filed On 12-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE DR. O. K. NARAYANAN VICE PRESIDENT AND SHRI V. DURGA RAO JUDICIAL MEMBER ITA NOS. 1969/MDS/2011 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX COMPANY CIRCLE-I(1) COIMBATORE. V. SHRI C. SELVARAJ 42 SRIRAM AVENUE BEHIND KTVR APARTMENTS P.N. PALAYAM COIMBATORE-37. (PAN : ABBPS6371C) (APPELLANT) (RESPONDENT) AND C. O. NO. 09/MDS/2012 (IN ITA NO. 1969/MDS/2011) ASSESSMENT YEAR : 2008-09 SHRI C. SELVARAJ V. THE ASST. COMMISSIONER OF 42 SRIRAM AVENUE INCOME-TAX BEHIND KTVR APARTMENTS COMPAN Y CIRCLE-I(1) P.N. PALAYAM COIMBATORE. COIMBATORE-37. (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : DR. S. MOHARANA CIT-DR RESPONDENT BY : SHRI S. PARAMASIVAM ITP DATE OF HEARING : 31.07.2012 DATE OF PRONOUNCEMENT : 30.0 8.2012 O R D E R PER V. DURGA RAO JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 2 THE ORDER OF THE CIT(APPEALS)-I COIMBATORE DATED 2 8-09-2011 FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEF FACTS ARE THAT THE ASSESSEE IS IN THE REAL ESTATE BUSINESS. THERE WAS A SURVEY ACTION CARRIED OUT IN THE RESIDE NTIAL PREMISES OF THE ASSESSEE. DURING THE COURSE OF THE SURVEY IT W AS FOUND THAT THERE WAS A SALE AGREEMENT DATED 12-03-2007 BETWEEN THE ASSESSEE MR. C. SELVARAJ AND MR. R. JAYAKUMAR S/O MR. RAMAD AS. IN THE SAID AGREEMENT THE PROPERTY IN SF NO. 282/2 AT KALAPATTI VILLAGE OF COIMBATORE TALUK MEASURING 1 ACRE WAS TO BE PURCHAS ED BY THE ASSESSEE FOR A CONSIDERATION OF ` 2 71 42 870/-. THE ABOVE AGREED SUM WAS PAID BY THE ASSESSEE ON VARIOUS DATES TO MR . R. JAYAKUMAR. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN IT WAS SUBM ITTED THAT THE ASSESSEE HAD PURCHASED A PROPERTY OWNED BY ONE MR. MAHENDRA RAMDAS FOR ` 2 71 42 870/- AND THE SAME WAS IN THE POSSESSION O F THE ASSESSEE AS A POWER OF ATTORNEY. SUBSEQUENTLY THE SAME PROPERTY WAS SOLD TO M/S. J AND J BUYING SERVICES PR IVATE LTD. REPRESENTED BY ITS MANAGING DIRECTOR MR. KENNY JACO B FOR A TOTAL CONSIDERATION OF ` 90 00 000/-. HOWEVER IN THE ASSESSEES BOOKS OF ACCOUNT THE ASSESSEE HAS SHOWN THE FOLLOWING AMOUNT S RECEIVED FROM MR.KENNY JACOB : 1. 27-09-2007 ` 75 00 000 2. 03-10-2007 ` 50 00 000 ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 3 3. 25-10-2007 ` 50 00 000 4. 10-11-2007 ` 90 00 000 5. 10-11-2007 ` 6 42 870 THE ASSESSING OFFICER HAS OBSERVED THAT AS PER THE AGREEMENT OF SALE THE PROPERTY WAS SOLD AT ` 90 00 000/- AND AS PER THE BOOKS OF ACCOUNTS THE ASSESSEE HAS RECEIVED MORE THAN WHAT W AS WRITTEN IN THE BOOKS OF ACCOUNTS. THEREFORE HE ISSUED A LETT ER TO SHRI KENNY JACOB ON 14-12-2010 ASKING HIM TO CONFIRM AND STATE WHETHER HE HAD PAID THE ABOVE AMOUNTS TO MR. SELVARAJ. IN REP LY MR. KENNY JACOB ON 28-12-2010 HAS SUBMITTED THAT THE ABOVE PR OPERTY WAS PURCHASED FOR A CONSIDERATION OF ` 90 LAKHS ONLY AND THE SAME WAS PAID TO SHRI SELVARAJ. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER AS FOLLOWS: I HAD OBTAINED A POWER OF ATTORNEY FROM MR. JAYAKUMAR RAMDOSS FOR SALE OF AGRICULTURAL LAND AT KALAPATTY VILLAGE. THE NATURE OF TRANSACTION HAS A LREADY BEEN EXPLAINED BY ME. THE POWER OF ATTORNEY WAS UTILIZED FOR SELLING THE SAID ASSET TO J AND J BUYING SERVICE PVT. LTD. GURG AON HARYANA REPRESENTED BY MR. KENNY JACOB. IT WAS FURTHER SUBMITTED THAT HE HAD ACTUALLY PAID OUT OF HIS OWN FUNDS ` 2 71 42 870/- TO MR. JAYAKUMAR RAMDOSS AND THAT HE HAD ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 4 RECEIVED THE SAME AMOUNT FROM THE BUYERS M/S. J AN D J BUYING SERVICES P. LTD. REPRESENTED BY MR. KENNY JACOB. T HE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE CAME TO THE CONCLUSION THAT THE ASSESSEE HAD SOLD THE PROPERTY AT ` 90 00 000/- AND THE REMAINING AMOUNTS WERE SHOWN BY THE ASSESSE E ON THE FOLLOWING DATES : 27-09-2007 ` 75 00 000 03-10-2007 ` 50 00 000 25-10-2007 ` 50 00 000 10-11-2007 ` 6 42 870 ` 1 81 42 870 AND ADDED THE SAME UNDER SECTION 68 OF THE INCOME T AX ACTR 1961. 3. ON APPEAL IT WAS SUBMITTED BEFORE THE LEARNED CI T(APPEALS) THAT THE PROPERTY WAS PURCHASED FROM MR. JAYAKUMAR RAMDOSS FOR ` 2 71 42 870/- IN THE CAPACITY AS A POWER OF ATTORN EY HOLDER AND THE SAME PROPERTY WAS SOLD TO M/S J & J BUYING SERVICES P. LTD. REPRESENTED BY MR. KENNY JACOB FOR A TOTAL CONSIDER ATION OF ` 2 71 42 870/-. IT WAS SUBMITTED THAT ` 90 LAKHS WAS RECEIVED THROUGH A CHEQUE WHICH WAS ACCEPTED BY THE ASSESSIN G OFFICER AS THE SALE CONSIDERATION AND THE REMAINING BALANCE WAS RE CEIVED BY WAY OF CASH WHICH WAS NOT BELIEVED BY THE ASSESSING OFFICE R AND HE WRONGLY INVOKED SECTION 68 OF THE ACT AND ADDITION WAS MADE . THE LEARNED ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 5 CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE OBSERVED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY FACTS ON RECORD TO STATE THAT SHRI JAYAKUMAR HAS NOT RECEIVE D THE AMOUNT OF ` 2 71 42 870/- FOR GIVING POWER OF ATTORNEY TO THE APPELLANT. THERE IS NO MATERIAL ON RECORD TO DOUBT THE GENUINENESS OF THE TRANSACTION OF THE REAL ESTATE BUSINESS OF THE APPELLANT IN THIS C ASE BECAUSE THE REGISTERED DOCUMENTS ARE AVAILABLE. TH E CASH ENTRIES MADE IN THE BOOKS OF ACCOUNTS OF THE APPELLANT ON DIFFERENT DATES AMOUNTING TO ` 1 81 42 870/- WHICH IS TREATED AS UNEXPLAINED INCOM E CANNOT BE TREATED AS THE SALE RECEIPTS OF THE APPEL LANT SINCE IT WAS ADDED U/S 68 OF THE ACT. THE ASSESSIN G OFFICER HAS TO TAKE THE CONSIDERATION OF ` 90 LAKHS RECEIVED BY DDS AS SALE CONSIDERATION AND THEN COMPUTE THE BUSINESS LOSS INCURRED IN THE PURCHASE AND SALE OF LAND BY THE APPELLANT. HENCE THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE BUSINESS LOSS TAKING INTO CONSIDERATION THE AMOUNT PAID IN FOR TH E POWER OF ATTORNEY AND TAKING POSSESSION OF THE LAND AND THEN EXECUTING THE SALE DEED OF ` 90 00 000/-. THE OTHER ISSUE IS REGARDING THE ADDITION U/S 68 OF THE INCOME-TAX ACT 1961 WHICH IS CONFIRMED. ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 6 4. ON BEING AGGRIEVED THE REVENUE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED DR STRONGLY SUPPORTED TH E ORDER PASSED BY THE ASSESSING OFFICER. 5. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE HAD PURCHASED THE PROPE RTY FOR ` 2 71 42 870/- AND THE SAME WAS DEBITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND WHEN HE SOLD THE SAME CREDIT WAS MADE IN THE BOOKS OF ACCOUNT AND TAXES WERE PAID ACCORDINGLY. IT WAS SUBMITTED THAT THE ASSESSING OFFICER AND THE LEARNED CIT(APPE ALS) WRONGLY MADE THE ADDITION UNDER SECTION 68OF THE ACT. 6. WE HAVE HEARD BOTH THE SIDES PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS IN THE REAL ESTATE BUSINESS. HE HAD PURCHASED THE PROPERT Y IN QUESTION FROM ONE MR. JAYAKUMAR FOR ` 2 71 42 870/- IN THE CAPACITY OF POWER OF ATTORNEY HOLDER. SUBSEQUENTLY THE SAME PROPERT Y WAS SOLD TO M/S J & J BUYING SERVICES P. LTD. REPRESENTED BY MR. KEN NY JACOB FOR ` 2 71 42 870/-. THE SALE CONSIDERATION WAS RECEIVED BY THE ASSESSEE IN THE FORM OF DD FOR ` 90 LAKHS AND THE REMAINING AMOUNT BY WAY OF CASH. ACCORDING TO THE ASSESSING OFFICER AND THE L EARNED CIT(APPEALS) THE ONLY PAYMENT RECEIVED WAS BY WAY OF DD AS THE SALE CONSIDERATION. ACCORDING TO THE ASSESSEE THE ENTIRE PAYMENTS ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 7 RECEIVED BY WAY OF DD AND CASH REPRESENTED THE SALE CONSIDERATION. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN THE ASSESSEE PURCHASED THE PROPERTY THE PAYMENT MADE TO THE SELLER WAS DEBITED TO THE BOOKS OF ACCOUNTS AND WHEN HE SOLD T HE SAME IT WAS CREDITED TO THE BOOKS OF ACCOUNT. HE PAID THE TAXE S ALSO. THESE VERY IMPORTANT ASPECTS WERE NEITHER CONSIDERED BY THE AS SESSING OFFICER NOR CONSIDERED BY THE LEARNED CIT(APPEALS). ACCORD ING TO THE LEARNED COUNSEL FOR THE ASSESSEE ON THE VERY SAME AMOUNT THE ASSESSING OFFICER WANTED TO TAX AGAIN WHICH WOULD A MOUNT TO DOUBLE TAXATION. AFTER CAREFUL CONSIDERATION OF THE FACT S AND CIRCUMSTANCES OF THE CASE AND THE ORDER OF THE LEARNED CIT(APPEAL S) WE FIND THAT THE LEARNED CIT(APPEALS) FAILED TO CONSIDER THE ISS UE PROPERLY PARTICULARLY WHEN HE WAS OF THE OPINION THAT WHEN T HE ASSESSEE HAD PURCHASED THE PROPERTY FOR RS 2 71 42 870/- AND SOL D IT AT ` 90 00 000/- THE BALANCE AMOUNT HAS TO BE CONSIDERED AS A BUSINESS LOSS. THIS IS NEITHER THE CASE OF THE ASSESSEE NOR THE CASE OF THE ASSESSING OFFICER. WE THEREFORE IN THE INTEREST OF JUSTICE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(APPEALS) AND RE MIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMIN E THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPO RTUNITY OF BEING ITA NO. 1969 MDS/2011 & C.O. NO. 09/MDS/2012 8 HEARD TO THE ASSESSEE. IN THE CIRCUMSTANCES THE A PPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN RESPECT OF THE CONFIRMATION OF THE ADDITION BY THE LEARNED CIT(APP EALS) UNDER SECTION 68 OF THE INCOME TAX ACT 1961. WE HAVE RE MITTED THE ENTIRE ISSUE TO THE ASSESSING OFFICER FOR FRESH CONSIDERAT ION INCLUDING THE GROUND RAISED BY THE ASSESSEE IN THE CROSS OBJECTIO N. THEREFORE IN VIEW OF OUR DECISION IN THE APPEAL THE CROSS OBJEC TION HAS BECOME INFRUCTUOUS AND THEREFORE THE SAME IS DISMISSED. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION STANDS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED ON THURSDAY THE 30 TH DAY OF AUGUST 2012 AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) ( V.DURGA RAO ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI DATED THE 30 TH AUGUST 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE