ITO, Erode v. Smt. N.Santhamani, Erode

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 743/MDS/2010 ASSESSMENT YEAR : 2006-07 SMT. N. SANTHAMANI 41 RAJA STREET ANTHIYUR BHAVANI. ERODE DIST. V. THE INCOME-TAX OFFICER WARD-II(2) ERODE. (PAN: AJCPS0854R) I.T.A. NO. 926/MDS/2010 ASSESSMENT YEAR : 2006-07 THE INCOME-TAX OFFICER V. SMT. N. SANTHAMANI WARD-II(2) ERODE. 41 RAJA STREET ANTHIYUR BHAVANI. (APPELLANTS) (RESPONDENTS) C.O. NO. 48/MDS/2010 (IN ITA NO. 926/MDS/2010) ASSESSMENT YEAR : 2006-07 SMT. N. SANTHAMANI V. THE INCOME-TA X OFFICER 41 RAJA STREET ANITHIYUR BHAVANI. WARD-II(2 ) ERODE. (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL ASSESSEE BY : SHRI S. SRIDHAR I.T.A. NO.743 926 & CO 48/MDS/2010 2 O R D E R PER BENCH: ITA NO. 743/MDS/2010 IS AN QAPPEAL FILED BY THE AS SESSEE ITA NO. 926/MDS/2010 IS AN APPEAL FILED BY THE REVENUE AGAI NST THE ORDER OF THE LEARNED CIT(APPEALS)-I COIMBATORE IN APPEAL NO. 159/08-09 DATED 19-03-2010 FOR THE ASSESSMENT YEAR 2006-07 AND C.O. NO. 48/MDS/2010 IS THE CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE REVENUES APPEAL IN ITA NO. 926/MDS/2010. AS ALL THE THREE MATTERS RELATE TO THE SAME ASSESSEE AND F OR THE SAME ASSESSMENT YEAR AND INVOLVED CONNECTED ISSUES ALL THE APPEALS AND THE CROSS OBJECTION ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI S. SRIDHAR ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE. 3. ITA NO. 743/MDS/2010: IN THE ASSESSEES APPEAL IN GROUNDS NO. 2 AND 3 THE ASSESSEE HAS CHALLENGED THE ACTION OF T HE LEARNED CIT(A) IN ADOPTING THE RENTAL INCOME FROM THE PROPERTY AT VELAYUTHAM S TREET ANTHIYUR AT ` 66 000/- LESS STATUTORY DEDUCTION PERMISSIBLE U/S 24 AS AGAI NST ` 54 000/- DISCLOSED BY THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD DISCLOSED THE RENTAL INCOME FROM THE PROPERTY AT ` 54 000/- ON THE GROUND THAT THE PROPERTY CONSISTED OF ONLY 4 UNITS. IT WAS THE SUBMISSION T HAT THE ASSESSING OFFICER HAD ADOPTED THE RENTAL INCOME FROM THE PROPERTY BY ADOP TING THE NUMBER OF UNITS AS 5 UNITS. IT WAS THE SUBMISSION THAT THERE WERE ONL Y 4 UNITS AND THE ASSESSEE HAD I.T.A. NO.743 926 & CO 48/MDS/2010 3 NO OBJECTION IF THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER IT WAS 4 UNITS OR 5 UNIT S AND THEN TO COMPUTE THE ACTUAL RENTALS RECEIVED BY THE ASSESSEE. 4. IN REPLY THE LEARNED DR HAD NO OBJECTION TO THE VERIFICATION OF THE NUMBER OF UNITS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS ADOPTED THE NUMBER OF UNITS AS 5 PORTIONS WHEREAS THE ASSESSEE HAS DISCLOSED AS 4 PO RTIONS. AS THE BASIC FACTS AS TO WHETHER THE NUMBER OF UNITS IS 4 OR 5 ITSELF ARE IN DISPUTE WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER IT IS 4 PORTIONS OR 5 PO RTIONS. IN THE CIRCUMSTANCES THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFI CER FOR VERIFICATION WHETHER THE SAID PROPERTY CONSISTS OF 4 UNITS OR 5 UNITS AND TH EN TO RE-COMPUTE THE INCOME THEREON. 6. GROUND NO.4 WAS NOT SERIOUSLY ARGUED. CONSEQUEN TLY THE SAME IS DISMISSED. 7. IN REGARD TO GROUND NO.5 IN THE ASSESSEES APPEA L IT WAS SUBMITTED THAT THE SAID GROUND WAS AGAINST THE ACTION OF THE LEARN ED CIT(A) IN SUSTAINING AN ADDITION OF ` 50 000/- REPRESENTING GIFT RECEIVED BY THE ASSESSE E FROM HER MOTHER MRS. SUBBULAKSHMI. IT WAS SUBMITTED BY TH E LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE HAD PRODUCED CONFI RMATION LETTER FROM THE I.T.A. NO.743 926 & CO 48/MDS/2010 4 MOTHER CONFIRMING THE GIVING OF THE GIFT. IT WAS T HE SUBMISSION THAT WHAT IS REQUIRED OF AN ASSESSEE IS TO PROVIDE PROOF OF THE GIFT AND THIS HAD BEEN DONE BY PRODUCING THE CONFIRMATION LETTER. IT WAS THE SUBM ISSION THAT THE ASSESSING OFFICER HAD NOT PRODUCED ANY EVIDENCE TO REBUT THE CONFIRMATION GIVEN BY THE ASSESSEES MOTHER AND IN THE ABSENCE OF ANY REBUTTA L THE ADDITION COULD NOT BE MADE. 8. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS PRODUCED THE CONFIRMATION LETTER FROM HER MOTHER WHEREIN SHE HAS CONFIRMED HAVING GIVEN THE GIFT OF ` 50 000/- TO THE ASSESSEE. ONCE A PERSON GIVING THE GIFT HAS CONFIR MED THE GIVING OF THE GIFT AND ESPECIALLY WHEN IT IS FROM A VERY CLOSE RELATIVE LI KE THE MOTHER SUCH EVIDENCE IF IT IS REQUIRED TO BE DISCARDED IT HAS TO BE REBUTTED. A PERUSAL OF THE ASSESSMENT ORDER AS ALSO THE REMAND REPORT OF THE ASSESSING OF FICER FILED BEFORE THE LEARNED CIT(A) DOES NOT SHOW ANY REBUTTAL OF THE CONFIRMATI ON LETTER GIVEN BY THE ASSESSEES MOTHER. IN THE ABSENCE OF REBUTTAL OF T HE EVIDENCE BY ANY OTHER EVIDENCE THE CONFIRMATION LETTER AS PRODUCED BY TH E ASSESSEE FROM HER MOTHER CANNOT BE DISCARDED. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED B Y THE LEARNED CIT(A) IS LIABLE TO DELETED AND WE DO SO. IN THE CIRCUMSTANC ES THE ASSESSING OFFICER IS I.T.A. NO.743 926 & CO 48/MDS/2010 5 DIRECTED TO DELETE THE ADDITION REPRESENTING THE GI FT FROM THE ASSESSEES MOTHER MRS. SUBBULAKSHMI FOR AN AMOUNT OF ` 50 000/-. 10. IN GROUND NO.6 THE ASSESSEE HAS CHALLENGED THE ADDITION OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION REPRESENTING AGRI CULTURAL INCOME AT ` 40 000/- OUT OF ` 50 000/- DISCLOSED BY THE ASSESSEE. IT WAS SUBMIT TED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE HAD IN HER RETURN DISCLOSED AGRICULTURAL INCOME AT ` .50 000/- AND THE ASSESSING OFFICER HAD TREATED ` 40 000/- OUT OF THE SAME AS NON-AGRICULTURAL INCOME . IT WAS THE SUBMISSION THAT THE ASSESSEE AND HER FAMILY MEMBERS JOINTLY HELD NE ARLY 20 ACRES OF AGRICULTURAL LAND AT MUNIAPPANPALAYAM AND THE SAME HAD BEEN LEAS ED TO ONE SHRI APPNAICKEN. IT WAS THE SUBMISSION THAT THE ASSESSI NG OFFICER HAD RECORDED THE STATEMENT OF SHRI APPANAICKEN WHO STATED THAT ONLY 2 OR 3 ACRES OF LAND WERE FERTILE AND THE REMAINING WAS DRY LAND AND THE SCOP E OF INCOME OUT OF THIS LAND ON CULTIVATION WAS ` . 50 000/- PER ANNUM. IT WAS THE SUBMISSION THAT T HE FACT THAT THE SAID SHRI APPANAICKEN HAD HELD THE LEASE O VER THE 20 ACRES OF LAND ITSELF SHOWED THAT THE LAND WAS FERTILE AND HE WAS USING T HE AGRICULTURAL LAND. IF ONLY 2 OR 3 ACRES WERE FERTILE NO PERSON WOULD TAKE THE B ALANCE OF 17 TO 18 ACRES ON LEASE. IT WAS THE SUBMISSION THAT THE CLAIM OF AGR ICULTURAL INCOME AS DISCLOSED BY THE ASSESSEE WAS LIABLE TO BE ACCEPTED IN FULL. 11. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED T HE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). I.T.A. NO.743 926 & CO 48/MDS/2010 6 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE CLAIM OF THE ASSESSEE OF AGRICULTURAL INCOME HAS BEEN PROVED BY THE FACT THAT THE ASSESSING OFFICER HAS VERIFIED THE SAME AND IT HAS BEEN ACCEPTED THAT THE ASSESSEE ALONG WITH HER FAMILY MEMBERS HELD THE ABOVE 20 ACRES OF AGRICULTURAL LAND. COMING TO THE STATEMENT OF SHRI APPANAICKEN THE STATEMENT OF THE ASSESSEE IS FOUND TO HAVE FORCE INSOFAR AS IF THE AGRICULTURAL LAND AS CLAIMED BY SHRI APPANAICKE N WAS ONLY FERTILE TO THE EXTENT OF ABOUT 2 TO 3 ACRES WHY WAS HE HOLDING THE LEASE OVER THE AGRICULTURAL LAND TO THE EXTENT OF 20 ACRES? THIS ITSELF PUT TH E STATEMENT OF SHRI APPANAICKEN TO DOUBT. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE CLAIM OF THE AGRICULTURAL INCOME DISCLOSED BY THE ASSESSEE IS RE ASONABLE TAKING INTO CONSIDERATION THE AREA OF THE AGRICULTURAL LAND BEI NG ABOUT 20 ACRES. IN THE CIRCUMSTANCES THE ORDER OF THE ASSESSING OFFICER AN D THE LEARNED CIT(A) STANDS REVERSED AND THE ASSESSING OFFICER IS DIRECTED TO A CCEPT THE CLAIM OF AGRICULTURAL INCOME AT ` 50 000/-. IN THE RESULT THE APPEAL OF THE ASSESS EE IS PARTLY ALLOWED. 13. ITA NO. 926/MDS/2010: IN THE REVENUES APPEAL THE REVENUE IN GROUNDS NO. 2 TO 7 HAS CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN DELETING THE ADDITION MADE ON ACCOUNT OF THE LOANS TAKEN FRO M SHRI A.V. NAGESWARAN AND SHRI A.V. NAGESWARAN (HUF). THE LEARNED DR VEHEMEN TLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. I.T.A. NO.743 926 & CO 48/MDS/2010 7 14. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE LOANS TAKEN FROM SHRI A.V. NAGESWARAN AND HIS HUF WERE RE FLECTED IN THE RETURNS AND THIS HAS ALSO BEEN TAKEN INTO CONSIDERATION BY THE LEARNED CIT(A). HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A ). 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ORDER OF THE LEARNED CIT(A) CLEARLY SHOWS THAT BOTH SHRI A.V. NA GESWARAN AND SHRI A.V. NAGESWARAN (HUF) ARE ASSESSED TO INCOME-TAX AND ARE CREDITWORTHY. SHRI NAGESWARAN AND HIS HUF HAVE DISCLOSED THE LOANS IN THEIR RETURNS AND THIS HAS NOT BEEN DISPUTED BY THE REVENUE. IT IS FURTHER NO TICED FROM THE GROUNDS AS RAISED BY THE REVENUE THAT THE REVENUE HAS ACCEPTED THAT THE PAYMENTS ARE BY CHEQUES. ONCE IT IS SHOWN THAT THE PERSONS WHO HAV E CONFIRMED HAVING GIVEN THE LOANS AND THE SAME ARE ALSO DISCLOSED IN THEIR RETURNS AND THE CREDITWORTHINESS IS ALSO PROVED BY THE FACT THAT TH EY ARE FILING THEIR RETURNS AND THEY HAVE THE SOURCE NO ADDITION ON ACCOUNT OF THE LOANS CAN BE MADE WITHOUT DISLODGING SUCH EVIDENCES. IT IS NOTICED THAT THE REVENUE HAS NOT BEEN ABLE TO DISLODGE THE EVIDENCE PRODUCED BY THE ASSESSEE. IN THE CIRCUMSTANCES THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE STANDS CONFIRMED. 16. C.O. NO. 48/MDS/2010: AS IT IS NOTICED THAT THE CROSS OBJECTION IS IN SUPPORT OF THE ORDER OF THE LEARNED CIT(A) ON THE I SSUES RAISED BY THE REVENUE IN ITS APPEAL AND AS WE HAVE ALREADY DISMISSED THE REVENUES APPEAL THE CROSS OBJECTION ALSO STANDS DISMISSED. I.T.A. NO.743 926 & CO 48/MDS/2010 8 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IN IT A NO. 743/MDS/2010 IS PARTLY ALLOWED THE APPEAL OF THE REVENUE IN ITA NO . 926/MDS/2010 IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IN C.O.NO. 48/MDS/2010 IS DISMISSED. 18. THE ORDER WAS PRONOUNCED IN THE COURT ON 25/02/ 2011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 25 TH FEBRUARY 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE