M.Sadhasivam, Namakkal v. ITO, Namakkal

ITA 526/CHNY/2015 | 2004-2005
Pronouncement Date: 26-10-2016

Appeal Details

RSA Number 52621714 RSA 2015
Assessee PAN ADXPM5836G
Bench Chennai
Appeal Number ITA 526/CHNY/2015
Duration Of Justice 1 year(s) 7 month(s) 14 day(s)
Appellant M.Sadhasivam, Namakkal
Respondent ITO, Namakkal
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Bench Allotted D
Date Of Final Hearing 10-08-2016
Next Hearing Date 10-08-2016
Assessment Year 2004-2005
Appeal Filed On 13-03-2015
Judgment Text
IN THE INCOME - TAX APPELLATE TRIBUNAL D BENCH CHENNAI . BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY JUDICIAL MEMBER ./ I T.A. NO. 526/MDS/2015 / ASSESSMENT YEAR :2004 - 05 SHRI M. SADHASIVAM L/R OF LATE N. MUTHU GOUNDER NO. C - 15 VELUR ROAD TIRUCHENGODE SALEM DISTRICT. [PAN: A DXPM5836G ] VS. THE INCOME TAX OFFICER WARD I (5) 138/3 LMR SHOPPING ARCADE SALEM MAIN ROAD NAMAKKAL 637 001. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI G. BASKAR ADVOCATE / RESPONDENT BY : SHRI DURAI PANDIAN JCIT / DATE OF HEARING : 1 0 . 08 .201 6 / DATE OF P RONOUNCEMENT : 26 . 1 0.2016 / O R D E R PER DUVVURU RL REDDY JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMI SSIONE R OF INCOME TAX (APPEALS) SALEM DATED 27 . 0 1 .201 5 FOR THE ASSESSMENT YEAR 20 0 4 - 0 5. THE FIRST EFFECTIVE GROUND RAISED IS WITH REGARD TO CONFIRMATION OF TAXABLE INCOME AT .15 LAKHS HELD AS LENT BY THE ASSESSE E OUT OF UNEXPLAINED SOURCES AND INTEREST OF .67 500/ - THEREON AND (2) PROPER RELIEF WAS NOT ACCORDED AS PER THE ORDER OF THE LD. CIT(A) DATED 29.03.2007 . 2. BRIEF FACTS OF THE CASE ARE THAT THIS IS SECOND ROUND OF LITIGATION . A GAINST THE APPEAL OF THE REVENUE THE ASSESSMENT HAS BEEN REFRAMED IN PUR SUANCE I.T.A. NO . 526/M/15 2 TO THE DIRECTIONS OF THE TRIBUNAL VIDE ITS ORDER IN I.T.A. NO. 1525/MDS/2007 DATED 25.05.2009 . 2.1 A SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT 1961 [ ACT IN SHORT] WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE SHRI N. MUTHUGOUNDER . ON THE BASIS OF THE STATEMENT RECORDED FROM THE ASSESSEE AND SUBSEQUENT DETAILS FILED BY THE ASSESSEE THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 27.12.2006 DETERMINING TOTAL INCOME OF THE ASSESSEE AT .49 87 754/ - AND AGRICULTURAL I NCOME OF .40 000/ - . ON APPEAL VIDE ITS ORDER DATED 29.03.2007 THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND THEREAFTER THE ASSESSING OFFICER VIDE HIS ORDER DATED 10.05.2007 DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT .28 18 518/ - . IN THE APPELLATE ORDER DATED 29.03.2007 THE LD. CIT(A) HAS OBSERVED THAT NO DETAILS OF THE LOANS WERE GIVEN BY THE ASSESSEE OR GATHERED BY THE ASSESSING OFFICER AND SINCE THERE WERE NO SUPPORTING DETAILS FOR THE STATEMENT THE ADDITION MADE ON THE STRENGTH OF STATEMENT ALONE WAS DELETED AND THE INTEREST THEREON WAS ALSO DELETED . AGAINST THE ABOVE APPELLATE ORDER DATED 29.03.2007 THE REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE DELETION OF ADDITION OF UNACCOUNTED LOAN AMOUNT AND INTEREST THEREON OF .67 500/ - . THE TRIBUNAL VIDE ITS ORDER DATED 25.05.2009 SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO RECONSIDER AND DECIDE THE ISSUE AFRESH AFTER DISCUSSING THE MATERIAL STATEMENT MADE SOON AFTER THE SURVEY AND OTHER DETAILS ABOUT RETRACTION MADE BY THE ASSESSEE. ACCORDINGLY AFTER HEARING TO THE ASSESSEE AND CONSIDERING I.T.A. NO . 526/M/15 3 THE MATERIALS AVAILABLE ON RECORD THE ASSESSING OFFICER IN THE SECOND ROUND OF LITIGATION DETERMINED THE TAXAB LE INCOME OF THE ASSESSEE AT .35 86 018/ - BY MAKING ADDITION ON ACCOUNT OF ADMISSION MADE OF .15 00 000/ - AND INTEREST THEREON .67 500/ - PLUS INCOME DETERMINED BY GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) DATED 29.03.2007 OF .20 18 518/ - . 2.2 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). WITH REGARD TO ADDITION MADE ON UNACCOUNTED LOAN PLUS INTEREST THEREON THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER AND WITH REGARD TO RELIEF AGAINST APPELLATE ORDER DATED 29.03.2007 THE LD. CIT(A) OBSERVE D THAT THERE IS A MISTAKE APPARENT ON RECORD AND DIRECTED THE ASSESSING OFFICER TO RECTIFY THE SAME. AGAINST THE ABOVE APPELLATE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 3. BY RELYING ON THE DECISION IN THE CASE OF CIT V. S. KHADER KHAN SON 352 ITR 4 80 (SC) LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ASSESSMENT MADE ON THE ACTION UNDER SECTION 133A WOULD NOT HAVE ANY EVIDENTIARY VALUE AND PLEADED THAT THE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. 4. ON THE OTHER HAND THE LD. D R HAS SUBMITTED THAT THE ASSESSMENT WAS NOT MADE PURELY ON THE BASIS OF THE CONFESSED STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. TO AVOID PENALTY AND PROSECUTION PROCEEDINGS AND TO COOPERATIVE WITH THE DEPARTMENT THE ASSESSEE HAS FILED A CONFIRMATION LETTER BEFORE THE ASSESSING OFFICER ON 25.03.2004 AND PAID THE ADVANCE TAX OF .4 50 000/ - ON 26.03.2004 FOR HAVING ADMITTED THE UNDISCLOSED INCOME. SINCE I.T.A. NO . 526/M/15 4 THE ASSESSEE HAS MADE ADVANCE TAX EXCLUSIVELY IN COMPLIANCE OF ADMISSION GIVEN DURING TH E SURVEY AND ITS SUBSEQUENT FILING OF LETTER OF ADMISSION ON 25.03.2004 THE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE CONFIRMED. 5 . WE HAVE HEARD BOTH PARTIES CONSIDERED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITI ES BELOW. IN THE FIRST ROUND OF LITIGATION THE LD. CIT(A) HAS OBSERVED THAT NO DETAILS WERE AVAILABLE ON RECORD WITH REGARD TO THE UNACCOUNTED LOAN STATED TO HAVE GIVEN BY THE ASSESSEE OR THE ASSESSING OFFICER HAS GATHERED THE DETAILS OF UNACCOUNTED LOAN GIVEN BY THE ASSESSEE AND HE DELETED THE ADDITION ALONG WITH INTEREST THEREON ON THE GROUND THAT THERE WERE NO SUPPORTING DETAILS FOR THE CONFESSED STATEMENT OF THE ASSESSEE RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. 5 .1 ADMITTEDLY THERE WAS A SU RVEY ON 18.03.2004 UNDER SECTION 133A OF THE ACT CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE LATE N. MUTHUGOUNDER AND SWORN STATEMENT WAS RECORDED ON THE DATE OF SURVEY. IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS THE ASSESSEE HAS ADMITTED HAVING GIVEN LOAN OF .15 LAKHS TO THREE PERSONS DURING THE FINANCIAL YEAR 2003 - 04. THEREAFTER ON 25.03.2004 THROUGH HIS LETTER THE ASSESSEE HAS MADE THE FOLLOWING ADDITION: 1. MUTHU GOUNDER : HUF PURCHASE OF IMMOVABLE PROPERTIES IN THE NAME OF MY GRANDSON SRI S. GOWRISHANKAR AND SHRI S. SRINATH OTHER OMISSION AND COMMISSION . 25 00 000 2. N. MUTHU GOUNDER : INDIVIDUAL LOAN GIVEN TO THIRD PARTIES OUTSTANDING AS ON 18.03.2004 . 15 00 000 3. S. VIJAYA PURCHASE OF IMMOVABLE PROPERT IES AND OTHER OMISSION . 10 00 000 I.T.A. NO . 526/M/15 5 AND COMMISSION I AM GIVING THE ABOVE ADMISSION TO CO - OPERATIVE WITH THE DEPARTMENT AND TO AVOID ANY PENALTY AND PROSECUTION PROCEEDINGS AND TO PURCHASE PEACH OF MIND. FROM THE ABOVE EXTRACTS IT CAN BE CLEARLY SEE N THAT THE ADMISSION OF .15 LAKHS WAS ON ACCOUNT OF LOAN GIVEN TO OTHER THREE P ERSONS AND THE ISSUE WA S THE ONLY ADMISSION GIVEN BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. SUBSEQUENT TO THE ABOVE ADMISSION LETTER FILED ON 25.03.2004 THE ASSESSEE HAS PAI D THE ADVANCE TAX OF .4 50 000/ - PROMPTLY ON 26.03.2004 FOR HAVING ADMITTED THE INCOME. THE ASSESSING OFFICER HAS OPINED THAT THE ASSESSEE HAS MADE ANY ADVANCE TAX PAYMENT FOR THE QUARTER ENDING SEPTEMBER 2003 AND ALSO DECEMBER 2003. THEREFORE THE ASSE SSING OFFICER HAS HELD THAT THE PAYMENT OF ADVANCE TAX IS EXCLUSIVELY MADE IN COMPLIANCE OF ADMISSION GIVEN DURING THE SURVEY AND ITS SUBSEQUENT FILING OF LETTER OF ADMISSION ON 25.03.2004. IT IS NOT THE CASE OF THE ASSESSEE THAT MERELY ON THE BASIS OF STA TEMENT RECORDED UNDER SECTION 133A OF SURVEY PROCEEDINGS BUT SUBSEQUENT TO THE STATEMENT RECORDED DURING THE SURVEY PROCEEDINGS THE ASSESSEE HAS MADE ADMISSION AND ALSO PAID ADVANCE TAX IN COMPLIANCE OF ADMISSION . ONCE THE ASSESSEE VIDE HIS ADMISSION LE TTER HAVING ADMITTED THAT HE LENT .15 LAKHS TO THREE PERSONS AND ACCORDINGLY PAID ADVANCE TAX FOR THE ABOVE ADMISSION AS GIVEN SUBSEQUENT TO THE STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS THE ASSESSING OFFICER HAS NO OCCASION TO FURTHER PROBE IN THIS MATTER. THEREFORE WE ARE OF THE OPINION THAT WRONG CONFESSION OF THE ASSESSEE IS AN AFTERTHOUGHT. I.T.A. NO . 526/M/15 6 5.2 THE CASE LAW RELIED ON BY THE ASSESSEE HAS NO APPLICATION TO THE FACTS OF THE CASE IN HAND BECAUSE IN THE CASE OF CIT V. S. KHADER KHAN SO N (SUPRA) THE HON BLE SUPREME COURT HAS HELD THAT THE ACTION UNDER SECTION 133A WOULD NOT HAVE ANY EVIDENTIARY VALUE AND THAT IT COULD NOT BE SAID SOLELY ON THE BASIS OF THE STATEMENT GIVEN BY ONE OF THE PARTNERS OF THE ASSESSEE FIRM THAT THE DISCLOSED IN COME WAS ASSESSABLE AS LAWFUL INCOME OF THE ASSESSEE . HOWEVER IN THE PRESENT CASE SUBSEQUENT TO THE STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS THE ASSESSEE HIMSELF VOLUNTARILY FILED AN ADMISSION LETTER BEFORE THE ASSESSING OFFICER ON 25. 03.2004 HAVING LENT .15 LAKHS TO THREE PERSONS AND PAID THE ADVANCE TAX OF .4 50 000/ - ON 26.03.2004 FOR HAVING ADMITTED THE UNDISCLOSED INCOME. 5.3 UNDER THE ABOVE FACTS AND CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSMENT WAS VALID LY MADE PURELY ON THE BASIS OF VOLUNTARILY ADMISSION OF RECONFIRMATION OF THE LOANS GIVEN BY WAY OF HIS ADMISSION LETTER FILED ON 25.03.2004 AND PAID ADVANCE TAX ON 26.03.2004 WHICH IS A CORROBORATIVE EVIDENCE AND THE ASSESSEE HIMSELF ADMITTED THAT IT WAS AN UNACCOUNTED INCOME. FURTHER IT IS NOT THE CASE THAT THE ASSESSMENT WAS MADE ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. THUS THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUND RAISED BY THE AS SESSEE IS DISMISSED. 6. WE HAVE CONSIDERED THE SECOND PLEA OF THE ASSESSEE THAT AGAINST THE DIRECTION OF THE LD. CIT(A) TO RECTIFY THE APPARENT MISTAKE OCCURRED IN THE FIRST I.T.A. NO . 526/M/15 7 APPELLATE ORDER DATED 29.03.2007 PASSED AGAINST ORIGINAL ASSESSMENT THAT THE IN COME FROM THE BUS TN - 34 A 2499 WAS .9 52 860/ - AND NOT .13 73 860/ - AS ADOPTED BY THE LD. CIT(A) VIDE HIS ORDER DATED 29.03.2007. WE HAVE PERUSED THE PAPER BOOK FILED BY THE ASSESSEE AND FOUND THAT AS PER ORIGINAL ASSESSMENT ORDER DATED 27.12.2006 THE A SSESSING OFFICER HAS DETERMINED THE INCOME FROM BUS NO. TN - 34 A 2499 BEFORE DEPRECIATION AT .9 52 860/ - AFTER HAVING ACCEPTED THE EXPENDITURE OF .4 21 000/ - . THEREFORE THE LD. CIT(A) VIDE HIS ORDER DATED 27.01.2015 HAS RIGHTLY DIRECTED THE ASSESSING OFF ICER TO RECTIFY THE ABOVE MISTAKE AS PER THE RECTIFICATION PETITION FILED BY THE ASSESSEE VIDE HIS LETTER DATED 02.04.2007 AND GRANT PROPER RELIEF TO THE ASSESSEE. THUS WE CONFIRM THE ABOVE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE AND ALSO DIRECT THE ASS ESSING OFFICER TO DECIDE THE RECTIFICATION PETITION FILED BY THE ASSESSEE AND GRANT RELIEF ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 7 . IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED ON THE 26 TH OCT OBER 20 16 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI DATED THE 26 . 1 0 .201 6 VM/ - I.T.A. NO . 526/M/15 8 / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / C IT(A) 4. / CIT 5. / DR & 6. / GF.