K.V.M.Chitra, Thanjavur v. ACIT, CHENNAI

ITA 361/CHNY/2011 | 1996-1997
Pronouncement Date: 06-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 36121714 RSA 2011
Assessee PAN AEZPC1863J
Bench Chennai
Appeal Number ITA 361/CHNY/2011
Duration Of Justice 4 month(s) 5 day(s)
Appellant K.V.M.Chitra, Thanjavur
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 06-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 06-07-2011
Date Of Final Hearing 05-07-2011
Next Hearing Date 05-07-2011
Assessment Year 1996-1997
Appeal Filed On 01-03-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI HARI OM MARATHA J.M. AND SHRI N.S. SAINI AM .. I.T.A. NO. 361/MDS/2011 ASSESSMENT YEAR 1996-97] K.V.M. CHITRA NO. 5 FIRST CROSS STREET PARISUTHAM NAGAR THANJAVUR 613 001. PAN : AEZPC 1863 J VS. THE ASSTT. COMMISSIONER OF INCOME-TAX CHENNAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. RAVI DEPARTMENT BY : SHRI RAMASWAMY STANDING COUNSEL O R D E R PER N.S. SAINI A.M :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A)-I CHENNAI DATED 01.12.2010. PAGE 2 OF 7 ITA. NO. 361/MDS/2011 2. GROUND NO. 1 OF THE APPEAL TAKEN BY THE ASSESSEE IS GENERAL IN NATURE AND REQUIRES NO ADJUDICATION BY US. 3. GROUNDS NOS. 2 TO 5 OF THE APPEAL ARE DIRECTED A GAINST THE ORDER OF THE LD. CIT(A) UPHOLDING THE VALIDITY OF T HE REASSESSMENT WHEN PROVISIONS OF SECTION 147 OF THE INCOME-TAX AC T 1961 [IN SHORT THE ACT] CANNOT BE INVOKED IN A CASE WHERE ASSESSME NT IS BEING MADE ON THE BASIS OF SEIZED MATERIAL FOUND DURING T HE COURSE OF SEARCH. 4. WE FIND THAT THIS IS THE SECOND ROUND OF APPEAL BEFORE THE TRIBUNAL. IN THE FIRST ROUND OF APPEAL WHEN THE M ATTER CAME UP BEFORE THE TRIBUNAL VIDE ITS ORDER DATED 10.11.2006 IN ITA NO. 513/MDS/2003 FOR ASSESSMENT YEAR 1996-97 THE TRIBU NAL DECIDED THIS ISSUE BY OBSERVING AS UNDER: 4. NEXT ISSUE RELATES TO THE VALIDITY OF ASSESSMENT AND NOTICES. IT WAS CONTENDED BEFORE THAT THE ASSESSIN G OFFICER OUGHT TO HAVE COMPLETED THE ASSESSMENT U/S 158BD AND NOT U/S 144 R.W.S 147. ACCORDING TO THE LD. COUNSEL CHA PTER XIVB INTRODUCED SPECIAL PROCEDURES FOR ASSESSMENT OF SEAR CH CASES. PAGE 3 OF 7 ITA. NO. 361/MDS/2011 AS PER THE PRESCRIPTION OF THIS SECTION ASSESSING OFFICER SHALL AFTER BEING SATISFIED THAT ANY UNDISCLOSED INCOME BE LONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WH OM SEARCH WAS CONDUCTED U/S 132 SHALL HAND OVER THE DOCUMENTS AN D OTHER RECORDS TO THE ASSESSING OFFICER HAVING JURISD ICTION OVER SUCH OTHER PERSON AND THAT THE ASSESSING OFFICER SHA LL PROCEED AGAINST SUCH OTHER PERSON ASSESSING SUCH INCOME U/S 15 8BD OF THE ACT. 5. IN THE PRESENT CASE WE FIND THAT THE ASSESSMENT ORDER WAS BASED ON THE CREDITS IN THE ASSESSEES BANK ACC OUNT WITH INDIAN BANK THANJAVUR. WHAT THE ASSESSING OFFICER BROUGHT TO TAX WERE THE CREDITS IN THE SAID BANK ACCOUNT. T HERE WAS NO MATERIAL WITH THE ASSESSING OFFICER TO COME TO A DEFINITE CONCLUSION THAT THE CREDITS IN THE BANK ACCOUNTS WERE THE UNDISCLOSED INCOME OF THE ASSESSEE. THEREFORE THE QUESTION OF INVOKING SECTION 158BD DID NOT ARISE. ON THE OT HER HAND THE INFORMATION THAT THERE WERE CREDITS IN THE BANK ACCOUNT OF THE ASSESSEE WAS SUFFICIENT REASON FOR THE ASSES SING OFFICER TO INVOKE SECTION 147 AND ISSUE NOTICE U/S 148. 5. AS THE ABOVE GROUNDS OF APPEAL WERE DECIDED BY T HE TRIBUNAL VIDE ITS ORDER DATED 10.11.2006 THEREFORE THESE G ROUNDS OF APPEAL TAKEN IN THE PRESENT APPEAL ARE DISMISSED. PAGE 4 OF 7 ITA. NO. 361/MDS/2011 6. GROUNDS NOS. 6 TO 10 OF THE APPEAL ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) SUSTAINING ADDITION MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF BANK CREDIT APPEARING IN THE PASS BOOK OF RS. 2 89 889/-. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT IN THE INSTANT CA SE THE ISSUE IN DISPUTE RELATES TO THE ADDITION OF RS. 2 89 889/- WHICH WAS CONFIRMED BY THE LD. CIT(A). WE FIND THAT THIS IS THE SECOND INNINGS OF THE LITIGATION BEFORE THE TRIBUNAL. IN THE EARL IER INNINGS THE TRIBUNAL VIDE ITS ORDER DATED 10.11.2006 PASSED IN ITA NO. 806/MDS/2003 IN ASSESSMENT YEAR 1996-97 RESTORED TH E MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE FOLLO WING DIRECTIONS AND OBSERVATIONS: 3. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE AMOUNT APPEARED AS CREDIT ON 4.7.1995. IN THE NARRATION I T WAS STATED TO BE TRANSFER. IT WAS EXPLAINED BEFORE THE REVENUE AUTHORITIES THAT THIS AMOUNT MUST HAVE BEEN TRANSFERRE D TO THE ASSESSEE ACCOUNT FROM HER HUSBANDS ACCOUNT. ON THAT BASIS THE LD. CIT(A) CONCLUDED THAT IF THE CREDIT RE PRESENTS PAGE 5 OF 7 ITA. NO. 361/MDS/2011 TRANSFER FROM ANOTHER ACCOUNT IT CANNOT BE CONSIDERE D AS UNEXPLAINED CASH CREDIT. IN HIS OPINION THE ASSESSI NG OFFICER OUGHT TO HAVE ENQUIRED FROM THE BANK FROM WHICH THE AMOUNT WAS TRANSFERRED. HE OUGHT TO HAVE CONDUCTED NECESS ARY ENQUIRIES REGARDING THE NAME AND ADDRESS OF THE PERS ON FROM WHOSE ACCOUNT THE AMOUNTS WERE TRANSFERRED HOW THE BALANCE IN HIS ACCOUNT WAS BUILT UP AND THE SOURCES OF THE PERSON FOR THE BALANCE IN HIS ACCOUNT. DEHORS SUCH E NQUIRIES THE AMOUNT WAS SIMPLY TREATED AS UNEXPLAINED INCOME O F THE ASSESSEE. SINCE IT WAS EVIDENT FROM THE PERUSAL OF THE BANK ACCOUNT THAT THE AMOUNT IN QUESTION REPRESENTED TRANSF ER ENTRY IT WAS CONCLUDED THAT IT DID NOT REPRESENT CA SH DEPOSITED AND THAT THE SOURCE OF THE CREDIT WAS FROM ANOTHER BANK ACCOUNT IN THE SAME BANK. ON THAT BASIS THE L D. CIT(A) HELD THAT THE CREDITS ARE NOT EXPLAINED. 4. IN OUR OPINION THE CONCLUSION OF THE LD. CIT(A) I S NOT CORRECT. ALL THE DEFECTS POINTED OUT BY THE LD. CIT (A) ARE CURABLE DEFECTS. WE THEREFORE IN THE INTEREST OF JUSTICE SET ASIDE THE IMPUGNED ORDER AND RESTORE IT TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DECIDE IT D E NOVO IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUN ITY TO THE ASSESSEE OF BEING HEARD. WE FURTHER DIRECT THE ASSESSING OFFICER TO MAKE NECESSARY ENQUIRIES TO FIND OUT THE V ERACITY OF THE TRANSACTION . PAGE 6 OF 7 ITA. NO. 361/MDS/2011 8. WE FIND THAT THE ISSUE IN THE FIRST ROUND OF LIT IGATION RELATED TO THE CREDIT OF RS. 2 89 889/- IN THE BANK ACCOUNT O F THE ASSESSEE ON 4.7.1995 SOURCE OF WHICH COULD NOT BE PROPERLY EXP LAINED BY THE ASSESSEE ACCORDING TO THE ASSESSING OFFICER. WE F IND THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF THE SAID DEPOS IT AS PROCEEDS OF CANCELLATION OF A DRAFT WHICH WAS PURCHASED ON 24.6 .1995 FROM THE VERY SAME BANK ACCOUNT. COPY OF RELEVANT PASS BOOK IS PLACED AT PAGE 54 OF THE PAPER BOOK. WE FIND THEREFROM THAT ON 24.6.1995 THERE WAS DEBIT BY BANK OF RS. 3 LAKHS. ACCORDING TO THE ASSESSEE DRAFT OF RS. 2 89 889/- WAS PURCHASED OUT OF THE S AID DEBIT OF RS. 3 LAKHS. WE FIND THAT THE DEPARTMENT HAS NOT BROUGHT ON RECORD ANY MATERIAL TO CONTROVERT THE ABOVE EXPLANATION OF THE ASSESSEE. NO MATERIAL COULD BE BROUGHT ON RECORD TO SHOW THAT WH Y THE ABOVE EXPLANATION OF THE ASSESSEE IS NOT PLAUSIBLE. IN T HE ABSENCE OF SUCH MATERIAL IN OUR CONSIDERED OPINION ADDITION OF RS . 2 89 889/- CANNOT BE SUSTAINED. WE FIND THAT CREDIT OF RS. 2 89 889/- ON 4.7.1995 IN THE BANK ACCOUNT OF THE ASSESSEE HAS BE EN EXPLAINED AS CANCELLATION OF DRAFT WHICH WAS PURCHASED OUT OF DE BIT OF RS. 3 LAKHS MADE IN THE VERY SAME BANK ACCOUNT ON 24.6.19 95 WHICH COULD NOT BE PROVED ERRONEOUS OR FALSE BY THE REVEN UE. WE PAGE 7 OF 7 ITA. NO. 361/MDS/2011 THEREFORE DELETE THE ADDITION OF RS. 2 89 889/- AN D ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 8 TH JULY 2011. SD/- SD/- ((HARI OM MARATHA ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 8 TH JULY 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE