Shri K.Rajagopal, Kancheepuram v. ACIT, CHENNAI

ITA 392/CHNY/2010 | 2000-2001
Pronouncement Date: 17-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 39221714 RSA 2010
Assessee PAN AJZPR3673E
Bench Chennai
Appeal Number ITA 392/CHNY/2010
Duration Of Justice 1 year(s) 7 month(s) 18 day(s)
Appellant Shri K.Rajagopal, Kancheepuram
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 17-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 17-11-2011
Date Of Final Hearing 16-11-2011
Next Hearing Date 16-11-2011
Assessment Year 2000-2001
Appeal Filed On 30-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE DR. O.K.NARAYANAN VICE-PRESIDENT AND SHRI HARI OM MARATHA JUDICIAL MEMBER I.T.A. NOS.392 TO 394/MDS/2010 ASSESSMENT YEARS : 2000-01 2001-02 & 2002-03 SHRI K.RAJAGOPAL NO.12 BAJANAI KOIL STREET CHENGUNDRAM VILLAGE MALROJAPURAM POST CHENGALPET TALUK KANCHEEPURAM. PAN:AJZPR3673E VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(5) CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. S.PREMALATHA ADVOCATE RESPONDENT BY : SHRI A. C.JOSEPH IRS JOINT COMMISSIONER OF INCOME-TAX DATE OF HEARING : 16 TH NOVEMBER 2011 DATE OF PRONOUNCEMENT : 17 TH NOVEMBER 2011 O R D E R PER DR.O.K.NARAYANAN VICE-PRESIDENT: THESE THREE APPEALS ARE FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEARS ARE 2000-01 2001-02 AND 2002- 03. THESE APPEALS ARE DIRECTED AGAINST THE COMMON O RDER PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-I AT CHENNAI DATED 14.12.2009 AND THEY ARISE OUT OF THE ITA NO.392 TO 394/MDS/2010 2 ASSESSMENTS COMPLETED UNDER SECTION 153C READ WITH SECTION 153A AND SECTION 143(3) OF THE INCOME TAX ACT 1961 . 2. THERE WAS A SEARCH IN THE RESIDENTIAL AND BUSINE SS PREMISES OF ONE SHRI K.SUNDARARAJ DIRECTOR OF M/S. S.S. FOUNDATION PVT. LTD. THE SEARCH WAS CONDUCTED ON 21.09.2005. SHRI K.SUNDARARAJ IS ENGAGED IN REAL ES TATE BUSINESS. IN THE LIGHT OF THE MATERIALS STATED TO B E COLLECTED IN THE COURSE OF THE SAID SEARCH NOTICE UNDER SECTION 153C WAS ISSUED TO THE ASSESSEE ON THE GROUND THAT THE ASSES SEE HAD EARNED COMMISSION INCOME FROM THE PAYMENTS MADE BY SHRI K.SUNDARARAJ LINKED WITH REAL ESTATE TRANSACTIONS. IN RESPONSE TO THE NOTICE THE ASSESSEE FILED NIL RETURN STATIN G THAT HE HAD NOT RECEIVED ANY SUCH COMMISSION FROM SHRI K.SUNDAR ARAJ AND HE WAS ENJOYING AGRICULTURAL INCOME ALONE AND N OTHING- ELSE. HE OWNED 23 ACRES OF AGRICULTURAL LANDS AT CHENGUNDRAM VILLAGE AND IT WAS FROM THAT LAND HOLDI NG THE ASSESSEE HAD EARNED AGRICULTURAL INCOME. ITA NO.392 TO 394/MDS/2010 3 3. BUT THE ASSESSING OFFICER DID NOT ACCEPT THE CON TENTIONS OF THE ASSESSEE. THE ASSESSING OFFICER FOUND THAT T HE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HIMSELF H AS AGREED BEFORE THE ASSESSING AUTHORITY THAT THE ASSESSEE HA D NOT DISCLOSED COMMISSION RECEIPTS FOR THE IMPUGNED ASSE SSMENT YEARS 2000-01 2001-02 AND 2002-03. HE FURTHER HELD THAT THE PAYMENTS OF COMMISSION TO THE ASSESSEE ARE AVAI LABLE IN THE RECORDS SEIZED IN THE COURSE OF SEARCH FRO M THE PREMISES OF SHRI K.SUNDARARAJ. ACCORDINGLY HE MAD E ADDITION OF ` 59 800/- ` 1 04 000/- AND ` 1 22 575/- RESPECTIVELY FOR THE ASSESSMENT YEARS 2000-01 2001 -02 AND 2002-03 TOWARDS INCOME FROM COMMISSION. THE ASSESS ING AUTHORITY FURTHER TREATED THE AGRICULTURAL INCOME R EPORTED BY THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. TH US FURTHER ADDITION WAS MADE OF ` 62 350/- ` 68 500/- AND ` 72 400/- FOR THE ABOVE ASSESSMENT YEARS RESPECTIVE LY. THESE ADDITIONS HAVE BEEN UPHELD IN FIRST APPEALS. THEREF ORE THESE SECOND APPEALS BEFORE THE TRIBUNAL. ITA NO.392 TO 394/MDS/2010 4 4. WE HEARD MS.S.PREMALATHA ADVOCATE APPEARING FOR THE ASSESSEE AND SHRI A.C.JOSEPH LEARNED JOINT COMMISS IONER OF INCOME TAX APPEARING FOR THE REVENUE. IT IS THE CONTENTION OF THE COUNSEL APPEARING FOR THE ASSESSEE THAT NO M ATERIALS WERE COLLECTED IN THE COURSE OF SEARCH INFLICTING T HE ASSESSEE IN A CASE ACCEPTING COMMISSION FROM SHRI K.SUNDARAR AJ. SHE EXPLAINED THAT IT IS ONLY AFTER THE SEARCH THAT THE ASSESSEE CAME INTO CONTACT WITH SHRI K.SUNDARARAJ AND ENTERE D INTO CERTAIN TRANSACTIONS WHEREFROM THE ASSESSEE HAD REC EIVED COMMISSIONS WHICH WERE DISCLOSED IN THE SUBSEQUENT ASSESSMENT YEARS 2003-04 2004-05 AND 2005-06 ETC. SHE ALSO EXPLAINED THAT THE PERSON RAJAGOPAL STATED TO BE RECEIVED COMMISSION FROM SHRI K.SUNDARARAJ IN THE I MPUGNED ASSESSMENT YEARS IS IN FACT ANOTHER PERSON AND NOT THE ASSESSEE AND EVEN THOUGH THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSING AUTHORITY HE DID NOT INVESTIGATE T HAT FACT. SHE FURTHER CONTENDED THAT THE ASSESSEE HOLDING SUBSTA NTIAL AGRICULTURAL LAND AND HAVING CARRIED OUT AGRICULTU RAL OPERATIONS THERE WAS NO REASON TO SUSPECT THE AGRI CULTURAL INCOME REPORTED BY THE ASSESSEE. THE LEARNED OFFICE R ITA NO.392 TO 394/MDS/2010 5 APPEARING FOR THE REVENUE ON THE OTHER HAND CONTE NDED THAT ASSESSEES AUTHORIZED REPRESENTATIVE HAD ADMITTED B EFORE THE ASSESSING OFFICER THAT COMMISSION INCOME HAS NOT BE EN REPORTED FOR THE IMPUGNED ASSESSMENT YEARS AND THIS FACT IS PROVED BY THE ENDORSEMENT OF THE AUTHORIZED REPRESE NTATIVE AVAILABLE ON ASSESSMENT RECORDS. REGARDING AGRICULT URAL INCOME THE LEARNED OFFICER SUBMITTED THAT THE EVID ENCES FILED BY THE ASSESSEE IN THE FORM OF CERTIFICATES FROM VI LLAGE AUTHORITIES ARE NOT ACCEPTABLE AND IN THE ABSENCE O F ANY OTHER EVIDENCES IT WAS NOT POSSIBLE FOR THE ASSESSING OF FICER TO ACCEPT THE CONTENTION REGARDING THE ISSUE OF AGRICU LTURAL INCOME. 5. WE HAVE HEARD BOTH SIDES IN DETAIL AND CONSIDERE D THE ISSUES RAISED BEFORE US. REGARDING INCOME FROM COMM ISSION IT IS QUITE PERTINENT TO NOTE THAT THE SEIZED RECOR DS DISCLOSED THE DETAILS OF TRANSACTIONS BETWEEN SHRI K.SUNDARAR AJ AND ONE SHRI RAJAGOPAL. IT IS AFTER IDENTIFYING THE SAID RA JAGOPAL THAT THE ASSESSING AUTHORITY HAD ISSUED NOTICES TO THE A SSESSEE TO FILE RETURNS. IF AS ARGUED BY THE ASSESSEE THE RAJ AGOPAL ITA NO.392 TO 394/MDS/2010 6 REFLECTED IN THE SEIZED MATERIALS WAS ANOTHER PERSO N THAN THE ASSESSEE THE PARTICULARS OF THAT OTHER RAJAGOPAL S HOULD HAVE BEEN FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING AUTHORITY. IN THE STATEMENT OF FACTS FILED BEFORE U S THE ASSESSEE HAS STATED THAT SHRI K.SUNDARARAJ WHO WAS SEARCHED HAD STATED TO THE ASSESSEE THAT THE INDIC TED RAJAGOPAL WAS NOT THE ASSESSEE BUT ANOTHER PERSON. BUT IF THAT WAS THE CASE WHY THE ASSESSING AUTHORITY WAS NOT ALERTED ON THAT POINT. IT IS ALSO ADMITTED BY THE A SSESSEE THAT THE ASSESSEE HAD TRANSACTIONS WITH SAID SHRI K.SUND ARARAJ AFTER THE SEARCH AND THE ASSESSEE HAD EARNED COMMIS SION INCOME FOR SUBSEQUENT ASSESSMENT YEARS 2003-04 ONWA RDS. IT IS ONLY FOR THE IMPUGNED ASSESSMENT YEARS THAT T HE ASSESSEE IS TAKING THE ARGUMENT THAT SHRI K.SUNDARA RAJ WAS NOT KNOWN TO THE ASSESSEE. PUTTING ALL PIECES TOGET HER WE FIND THAT THE ARGUMENT OF THE ASSESSEE IS NOTHING B UT A COCK AND BULL STORY. THE ASSESSING AUTHORITY IS JUSTIFIE D IN ADDING COMMISSION INCOME IN THE HANDS OF THE ASSESSEE AND HE HAS DONE SO ON THE BASIS OF THE CONCLUSIONS SUPPORTED B Y PREPONDERANCE OF PROBABILITIES. ITA NO.392 TO 394/MDS/2010 7 6. IN THESE CIRCUMSTANCES WE UPHOLD THE ADDITIONS OF THE COMMISSION INCOME MADE BY THE ASSESSING AUTHORITY F OR THE IMPUGNED THREE ASSESSMENT YEARS. 7. NOW WE MAY CONSIDER THE ISSUE OF AGRICULTURAL IN COME. IT IS A FACT THAT THE ASSESSEE WAS HOLDING 23 ACRES OF AGRICULTURAL LAND DURING THE RELEVANT TIME. THE ASS ESSEE HAS ALSO PRODUCED CERTIFICATES FROM THE CONCERNED VILLA GE AUTHORITIES TO TESTIFY THAT THE ASSESSEE HAD CARRI ED OUT AGRICULTURAL OPERATIONS AND REASONABLE INCOME COULD BE EARNED BY HIM. IT IS TO BE SEEN THAT IN THE COURSE OF SEARCH NOTHING WAS AVAILABLE AGAINST THE ASSESSEE SO AS TO SHOW THAT THE CASE OF AGRICULTURAL INCOME WAS A BOGUS CA SE. THE SEARCH HAS NOTHING TO DO WITH THE CLAIM OF AGRICULT URAL INCOME ADVANCED BY THE ASSESSEE. THE CASE OF AGRICULTURAL INCOME HAS TO BE EXAMINED INDEPENDENTLY. WHEN SUCH INDEPEN DENT EXAMINATION IS MADE IT IS TO BE SEEN THAT THE ASSE SSEE HAS REASONABLY ESTABLISHED THE FACTUM OF HOLDING AGRICU LTURAL LAND AND EARNING INCOME THEREFROM. IT IS TRUE THAT ASSES SEE HAS NOT MAINTAINED PROPER ACCOUNTS AND OTHER DETAILS TO COM PUTE THE ITA NO.392 TO 394/MDS/2010 8 AGRICULTURAL INCOME. THAT IS WHY THE AGRICULTURAL I NCOME HAS BEEN WORKED OUT ON A ROUGH METHOD. IN THESE CIRCUMS TANCES WE FIND THAT THERE IS NO REASON TO REJECT THE CLAIM OF THE ASSESSEE IN RESPECT OF HIS AGRICULTURAL INCOME. THE REFORE WE HAVE TO STATE THAT ASSESSING AUTHORITY IS NOT JUSTI FIED IN TREATING THE AGRICULTURAL INCOME AS INCOME FROM UND ISCLOSED SOURCES. ACCORDINGLY THOSE ADDITIONS MADE BY THE AS SESSING AUTHORITY ARE DELETED. 8. IN RESULT THESE THREE APPEALS FILED BY THE ASSE SSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 17 TH NOVEMBER 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI DATED THE 17 TH NOVEMBER 2011. SOMU COPY TO: (1) APPELLANT ( 4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.