R. Vijayakannan, Salem v. ITO, Salem

ITA 575/CHNY/2009 | 2005-2006
Pronouncement Date: 12-01-2011 | Result: Allowed

Appeal Details

RSA Number 57521714 RSA 2009
Assessee PAN AIMPP8335K
Bench Chennai
Appeal Number ITA 575/CHNY/2009
Duration Of Justice 1 year(s) 8 month(s) 19 day(s)
Appellant R. Vijayakannan, Salem
Respondent ITO, Salem
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 12-01-2011
Date Of Final Hearing 12-01-2011
Next Hearing Date 12-01-2011
Assessment Year 2005-2006
Appeal Filed On 23-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH D : CHENNAI [BEFORE DR. O.K. NARAYANAN VICE-PRESIDENT AND SHRI HARI OM MARATHA JUDICIAL MEMBER] I.T.A NOS. 568 TO 571/MDS/2009 ASSESSMENT YEAR : 2002-03 TO 2005-06 SMT. R. PREMALATHA 135-A KENNEDY NAGAR SURAMANGALAM SALEM 636 005 VS THE ITO WARD I(4) SALEM [PAN - AIMPP8335K] (APPELLANT) (RESPONDENT) I.T.A NOS. 572 TO 575/MDS/2009 ASSESSMENT YEAR : 2002-03 TO 2005-06 SHRI R. VIJAYAKANNAN 135-A KENNEDY NAGAR SURAMANGALAM SALEM 636 005 VS THE ITO WARD I(4) SALEM [PAN - AIMPP8335K] (APPELLANT) (RESPONDENT) I.T.A NOS. 576 TO 579/MDS/2009 ASSESSMENT YEAR : 2002-03 TO 2005-06 K. RAMALINGAM(HUF) 135-A KENNEDY NAGAR SURAMANGALAM SALEM 636 005 VS THE ITO WARD I(4) SALEM [PAN - AAHHK3619L] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. BASKAR RESPONDENT BY : SHRI K.E.B RENGARAJAN JR. STANDING COUNSEL ITA 568 TO 579/09 :- 2 -: O R D E R PER BENCH: THESE APPEALS HAVE BEEN FILED BY DIFFERENT ASS ESSEES IN WHICH VARIOUS ISSUES ARE INVOLVED. ALL THESE APPEALS WER E HEARD TOGETHER AND THEY ARE BEING DISPOSED OF BY A COMMON ORDER FOR TH E SAKE OF CONVENIENCE AND BREVITY. I.T.A.NOS.568 TO 571/MDS/2009 SMT. R.PREMALATHA 2. THIS ASSESSEE HAS FILED FOUR APPEALS BEING I.T.A .NO. 568 TO 571/MDS/2009 PERTAINING TO ASSESSMENT YEARS 2002-0 3 TO 2005-06. I.T.A.NO. 568/MDS/2009 3. THE FACTS FOR ASSESSMENT YEAR 2002-03 ARE THAT TH E ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM PROPERTY SALARY AND OTHER SOURCES BESIDES AGRICULTURAL INCOME. THE ONLY ISSUE INVOLV ED IN ASSESSMENT YEAR 2002-03 IS REGARDING ADDITION MADE U/S 68 OF T HE ACT OF ` 34 77 770/- ON THE GROUND THAT THERE WAS AN INCREAS E IN CAPITAL BETWEEN 31.3.1999 AND 31.3.2001. THE ASSESSEE WAS FILING RETURN OF INCOME UPTO 1999-2000 REGULARLY BUT DID NOT FILE TH E RETURNS FOR ASSESSMENT YEARS 2000-01 AND 2001-02. IN HER STATE MENT OF INCOME THE ASSESSEE HAS SHOWN CLOSING CAPITAL FOR ASSESSME NT YEAR 1999-2000 AT ` 9 36 632/- AS AGAINST OPENING CAPITAL FOR ASSESSM ENT YEAR 2002- 03 AT ` 44 14 402/-. FOR ASSESSMENT YEAR 2002-03 RETURN OF INCOME WAS FILED ON 28.11.2007 IN COMPLIANCE TO NOTICE ISS UED U/S 148 ON ITA 568 TO 579/09 :- 3 -: 30.3.2007 ADMITTING TOTAL INCOME OF ` 78 587/- AND ALSO DISCLOSED AGRICULTURAL INCOME OF ` 55 000/-. THE OPENING CAPITAL WAS SHOWN AT ` 44 14 402/-. SINCE THE RETURNS WERE NOT FILED IN T HE INTERMITTENT YEARS THERE WAS A DIFFERENCE OF ` 34 77 770/- BETWEEN THE CLOSING CAPITAL RETURNED IN ASSESSMENT YEAR 1999-2000 AND O PENING CAPITAL FOR ASSESSMENT YEAR 2002-03. THIS DIFFERENCE WAS ATTR IBUTED TO CERTAIN INVESTMENTS MADE IN M/S VETRIVEL EXPLOSIVES PVT. L TD AND M/S RAMALINGAM TRANSPORTS. THE CASE OF THE ASSESSEE IS THAT THE SUNDRY DEBTORS WERE REALIZED DURING THE PREVIOUS YEAR AND WERE CREDITED IN THE CASH FLOW STATEMENT SO NO ADDITION IS CALLED F OR IN THIS REGARD. THE ARGUMENT WAS TAKEN ON THE LINES THAT THE PROVIS IONS OF SECTION 68 ARE NOT APPLICABLE BECAUSE NO BOOKS EXISTED AND AS SUCH THERE WAS NO CREDIT ENTRY IN THE BOOKS OF ACCOUNT OF THE ASSESSE E. BUT THE ASSESSING OFFICER WAS NOT AGREEABLE AND MADE THE IMPUGNED ADD ITION. THIS ADDITION WAS ALSO CONFIRMED BY THE LD. CIT(A). 4. WHILE HEARING THIS SOLD GROUND RAISED IN THIS APPEA L IT WAS FELT NECESSARY THAT THE ISSUE HAS NOT BEEN CORRECTLY INV ESTIGATED INTO BY THE ASSESSING OFFICER AND THEREFORE WE ARE IN AGREEMEN T WITH THE SUBMISSION OF THE LD.AR SHRI G. BASKAR THAT THE S OURCE OF VARIOUS AMOUNTS LIKE SURPLUS ON SALE OF LAND SALARY RECEIV ABLE FROM M/S VETRIVEL EXPLOSIVES INTEREST FROM LOANS ADVANCED E ARLIER RENTAL INCOME OF PREMA PLAZA SOLD ON 20.10.2000 RENT OF ` 90 000/- FROM RAM ITA 568 TO 579/09 :- 4 -: THEATRE AND AGRICULTURAL INCOME OF ` 1 40 000/- HAS NOT BEEN CORRECTLY CONSIDERED IN ITS RIGHT PERSPECTIVE. A REQUEST WAS MADE BY THE LD.AR TO RESTORE THE ENTIRE ISSUE TO THE FILE OF THE ASSE SSING OFFICER SO THAT JUSTICE CAN BE DONE TO THE ASSESSEE. THE LD.DR HO WEVER HEAVILY RELIED ON THE APPELLATE ORDER AND RESISTED THE SUBM ISSION OF THE ASSESSEE. BUT WE ARE OF THE FIRM BELIEF THAT FULL AND FINAL FACTS HAVE NOT COME BEFORE US AND THIS TRIBUNAL BEING A FINAL FACT FINDING BODY IT BECOMES IMPERATIVE TO RESTORE THE ENTIRE ISSUE TO T HE FILE OF THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL TA KE A FRESH DECISION BY MAKING COMPUTATION OF INCOME AFTER GIVING DUE OPPOR TUNITY OF HEARING TO THE ASSESSEE. I.T.A.NO. 569/MDS/2009 5. IN THIS APPEAL FOR ASSESSMENT YEAR 2003-04 THE ISSUES RELATE TO PROFIT ON SALE OF AGRICULTURAL LAND COST OF PLO T AT SAKTHI NAGAR AND CREDIT FOR THE SALE PROCEEDS OF PLOT AT SAKTHI NAGA R. THE PROFIT FROM SALE OF AGRICULTURAL LAND HAS ALREADY BEEN OFFERED AS BUSINESS INCOME IN THE INCOME RETURNED BY THE ASSESSEE AND CREDIT F OR THE SALE PROCEEDS OF PLOT AT SAKTHI NAGAR HAS BEEN CONCEDED BY THE ASSESSEE. THE PROFIT ON SALE OF AGRICULTURAL LAND AS BEEN HEL D TO BE TAXABLE BOTH BY THE ASSESSING OFFICER AND THE LD. CIT(A). IT WA S CONTENDED BY THE ITA 568 TO 579/09 :- 5 -: LD.AR THAT THE RETURNED INCOME INCLUDED THE PROFIT ON SALE OF AGRICULTURAL LAND SO THE SAME CANNOT BE ADDED TWIC E. THE GROUNDS RAISED IN THIS YEAR ARE AS UNDER: 1. THE ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS) IS WRONG AND OPPOSED TO FACTS OF THE CASE. 2. THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE PROFIT ON SALE OF AGRICULTURAL LANDS A S TAXABLE INCOME. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) FAILED T O APPRECIATE THE FACT THAT INCOME RETURNED ALREADY INCLUDES THE PROFIT ON SALE OF AGRICULTURAL LANDS O F ` 3 99 000. THIS AMOUNT WAS ADDED AGAIN ASSESSING IT TWICE OVER DURING ASSESSMENT . 4. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRE D IN CONFIRMING THE ADDITION OF COST OF PLOT FOR ASSESSMENT YEAR 2003-04 WHICH WAS PURCHASED ON 16.7.1999. 5. THE COMMISSIONER OF INCOME-TAX(APPEALS) IS WRONG IN REJECTING THE CLAIM OF THE APPELLANT THAT CREDIT SHOULD BE GIVEN FOR THE SALE OF THE ABOVE PLOT AS AVAILABLE SOURCE FOR OUTGOINGS. 6. AFTER HEARING BOTH SIDES WE FIND THAT LIKE IN ASSE SSMENT YEAR 2002-03 THE FACTS OF THE CASE ARE NOT COMING OUT I N FULL BEFORE US AND FURTHER INVESTIGATION IS REQUIRED. AGREEING WITH T HE LD.ARS PRAYER WE RESTORE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSI NG OFFICER FOR PASSING DE NOVO ASSESSMENT ORDER IN THIS CASE ALSO. I.T.A.NO. 570/MDS/09 7. THE ONLY ISSUE RAISED IN THIS APPEAL FOR ASSESSM ENT YEAR 2004- 05 RELATES TO JEWEL LOAN AVAILED FROM BANK THROUGH EMPLOYEES NAMELY SHRI SELVAKUMAR AND SHRI THANGAVEL. IN THI S REGARD TO ITA 568 TO 579/09 :- 6 -: SUPPORT THE CLAIM RENEWAL SLIPS WERE ALREADY FURNI SHED BEFORE THE ASSESSING OFFICER. AFFIDAVITS FROM BOTH THESE PERS ONS HAVE BEEN FILED BEFORE US. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE ALSO REQUIRES DE NOVO ADJUDICATION BY THE ASSESSING OFFICER. HENCE WE SET ASIDE THE ORDER O F THE LD. CIT(A) AND RESTORE THE IMPUGNED TO THE FILE OF THE ASSESSING O FFICER WITH SIMILAR DIRECTIONS AS GIVEN IN EARLIER ASSESSMENT YEARS. I.T.A.NO. 571/MDS/2009 9. IN THIS APPEAL FOR ASSESSMENT YEAR 2005-06 TWO ISSUES RELATING TO CREDIT TRANSFER FROM M/S VETRIVEL EXPLO SIVES(P) LTD OF ` 12 17 653/- AND LOAN TAKEN FROM SHRI VETRIVEL OF ` 1 69 000/- ARE INVOLVED. THE POSITION OF THIS APPEAL ALSO SIMILAR TO THE FACTS IN EARLIER ASSESSMENT YEARS. WITH SIMILAR REASONING WE RESTO RE THESE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRE SH AS DIRECTED IN EARLIER ASSESSMENT YEARS. 10. IN THE RESULT ALL THE FOUR APPEALS IN THE CASE O F SMT. R.PREMALATHA ARE ALLOWED FOR STATISTICAL PURPOSES. I.T.A.NOS. 572 TO 575/MDS/09 SHRI R. VIJAYAKANNAN 11. THIS ASSESSEE HAS ALSO FILED FOUR APPEALS PERTAI NING TO ASSESSMENT YEARS 2002-03 TO 2005.06. THE FOLLOWING CHART WILL SHOW THE GROUND NUMBERS AND ISSUES RAISED IN THESE APPEA LS: ITA 568 TO 579/09 :- 7 -: ASSESSMENT YEAR GROUND NO. ISSUE 2002-03 2 INCREASE IN CAPITAL BETWEEN 31.3.1999 AND 31.3.2002 ` 21 31 606 3 TREATMENT OF PROFIT ON SALE OF AGRICULTURAL LAND AS INCOME ` 3 24 000 4 TREATMENT OF AGRICULTURAL INCOME AS NON-AGRICULTURAL INCOME ` 45 000 2003-04 2 TREATMENT OF AGRICULTURAL INCOME AS NON AGRICULTURAL INCOME ` 40 000 2004-05 2&3 ADDITION OF RENTAL INCOME FROM RANGA TOWER ` 1 31 194 4 TREATMENT OF AGRICULTURAL INCOME AS NON AGRICULTURAL INCOME ` 45 000 2005-06 2 CREDIT TRANSFER FROM M/S VETRIVEL EXPLOSIVES (P) LTD ` 29 181 3 ADDITION OF RENTAL INCOME FROM RANGA TOWER ` 1 96 791 4 TREATMENT OF AGRICULTURAL INCOME AS NON AGRICULTURAL INCOME ` 95 000 12. DURING HEARING OF THESE APPEALS IN A SIMILAR MA NNER AS WAS DONE IN EARLIER APPEALS IT WAS FELT THAT FULL AND FINAL FACTS ARE NOT COMING OUT OF THE RECORD AND IT BECOMES IMPERATIVE TO BRING ON RECORD FULL AND FINAL FACTS. HENCE BY SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW IN ALL THESE APPEALS WE RESTORE THE ISSUES TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS AS GIV EN IN EARLIER APPEALS. 13. IN THE RESULT ALL THE FOUR APPEALS IN THE CASE OF SHRI R. VIJAYAKANNAN ARE ALLOWED FOR STATISTICAL PURPOSES. ITA 568 TO 579/09 :- 8 -: I.T.A.NO. 576/MDS/09 K. RAMALINGAM(HUF) 14. THE ASSESSEE IS AN HUF DERIVING INCOME FROM OTH ER SOURCES BESIDES HAVING AGRICULTURAL INCOME. IN THIS CASE A LSO ACTION U/S 147 R.W.S 148 WAS TAKEN. THE ISSUES INVOLVED IN ASSESS MENT YEAR 2002-03 ARE (I) INCREASE IN CAPITAL BEING DIFFERENCE OF ` 7 81 078 (II) CREDIT FOR WITHDRAWALS FROM SIVASAKTHI EXPLOSIVES COMPANY; AND (III) TREATMENT OF AGRICULTURAL INCOME AS NON- AGRICULTURAL INCOME. 15. WHILE HEARING ON THESE ISSUES AGAIN IT WAS FELT THAT FULL AND FINAL FACTS OF ALL THE ISSUES RAISED IN THIS APPEAL ARE NOT COMING FORTH. THEREFORE THE ISSUES INVOLVED IN THIS APPEAL ARE R ESTORED TO THE FILE OF THE ASSESSING OFFICER WITH SIMILAR DIRECTIONS AS GI VEN ABOVE IN THE ABOVE CASES. I.T.A.NOS. 577 TO 579/09 16. IN ALL THESE THREE APPEALS PERTAINING TO ASSESS MENT YEARS 2003-04 TO 2005-06 COMMON ISSUES REGARDING CREDI T FOR WITHDRAWALS FROM SIVASAKTHI EXPLOSIVES COMPANY AND TREATMENT OF AGRICULTURAL INCOME AS NON-AGRICULTURAL INCOME ARE INVOLVED. T HE POSITION OF FACTS IS SIMILAR TO THAT OF SMT. R.PRELAMATHAS CASE. TH EREFORE WITH SIMILAR REASONING WE RESTORE THESE IMPUGNED ISSUES ALSO TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. ITA 568 TO 579/09 :- 9 -: 17. IN THE RESULT ALL THE FOUR APPEALS IN CASE OF K. RAMALINGAM (HUF) ARE ALLOWED FOR STATISTICAL PURPOSES. 18. TO SUMMARIZE THE RESULT ALL THE TWELVE APPEAL S ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12. 01.2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 12 TH JANUARY 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR