M.Palanisamy v. The Income Tax Officer, Ward-2(3), Salem
[Citation -2016-LL-0915-81]

Citation 2016-LL-0915-81
Appellant Name M.Palanisamy
Respondent Name The Income Tax Officer, Ward-2(3), Salem
Court ITAT-Chennai
Relevant Act Income-tax
Date of Order 15/09/2016
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags unexplained investment • immovable property • purchase of land • capital gain • job work
Bot Summary: PAN: BOI PP7170R Appellant by : Mr.Lakshmi Venkataraman, C.A Respondent by : Mr. A.V.Sreekanth, JCIT Da t e of h e ar in g : 12th September,2016 D at e of Pr on oun c em ent : 15th September, 2016 ORDER Per A. Mohan Alankamony, AM:- These two appeals are filed by the assessee aggrieved by the separate orders of the learned Commissioner of Income Tax , Salem dated 17.12.2015 05.02.2016 in ITA Nos.92 93/14-15 passed under section 143(3) r.w.s. 147 250(6) of the Act for the assessment year 2009-10 and 2011-12 respectively. The assessee has raised several grounds in both these appeals the crux of the common issue is that the learned Commissioner of Income Tax has erred in sustaining the addition of 20,00,000/- and 22,00,000/- for the assessment years 2009-10 2011-12 respectively made by the learned Assessing Officer. During the course of survey proceedings in the case of another assessee Mr. A.Rajendran, a statement under section 131 was recorded from the assessee Mr. M.Palanisamy on 22.03.2011 by the ACIT., Circle-II, Coimbatore, wherein the assessee stated that during the month of February, 2011 the assessee had sold land measuring 55 cents located at Salathampatty village to Mr. A.Rajendran for sale consideration of Rs.42.00 lakhs in cash. In the statement recorded on 22.03.2011, the assessee has clearly stated that he purchased the said land for 20 lakhs and sold it for Rs.42 lakhs to Shri A.Rajendran after incurring expenditure of Rs.5 lakhs. On appeal, the learned Commissioner of Income Tax dismissed both the appeals of the assessee agreeing with the views of the learned Assessing Officer. Since the assessee had admitted the transaction under oath, the learned Assessing Officer did not proceed further to make any further investigation. During the course of arguments, the learned Authorized Representative submitted that the Revenue had not handed over the remand report of the learned Assessing Officer to the assessee and the copy of the statements recorded during the course of survey to defend his case.


IN INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER I.T. A. No.412 & 413/Mds/2016 ( Assessm ent Year: 2009-10 & 2 011-12) Mr. M.Palanisamy, Vs Income Tax Officer, 2/34, Pethanoor, Ward-2(3), Thalavaipatty Village, Salem. Salem-636 302. PAN: BOI PP7170R (Appellant) (Respondent) Appellant by : Mr.Lakshmi Venkataraman, C.A Respondent by : Mr. A.V.Sreekanth, JCIT Da t e of h e ar in g : 12th September,2016 D at e of Pr on oun c em ent : 15th September, 2016 ORDER Per A. Mohan Alankamony, AM:- These two appeals are filed by assessee aggrieved by separate orders of learned Commissioner of Income Tax (Appeals), Salem dated 17.12.2015 & 05.02.2016 in ITA Nos.92 & 93/14-15 passed under section 143(3) r.w.s. 147 & 250(6) of Act for assessment year 2009-10 and 2011-12 respectively. 2. assessee has raised several grounds in both these appeals, however, crux of common issue is that learned Commissioner of Income Tax (Appeals) has erred in sustaining addition of `20,00,000/- (as undisclosed 2 ITA Nos.412 & 413/Mds/2016 income) and `22,00,000/- ( Rs.17.00 lakhs as short term capital gain and Rs.5.00 lakhs as unexplained expenditure) for assessment years 2009-10 & 2011-12 respectively made by learned Assessing Officer. 3. Brief facts of case are that assessee is individual engaged in business of undertaking job work for manufacturing silver jewellery filed his return of income on 05.03.2014 admitting income of `1,70,750/- & 1,90,750/- for assessment years 2009-10 & 2011-12 respectively pursuant to action U/s. 147&148 of Act. case was selected for scrutiny and notices were issued to assessee on 06.03.2014. During course of survey proceedings in case of another assessee Mr. A.Rajendran, statement under section 131 was recorded from assessee Mr. M.Palanisamy on 22.03.2011 by ACIT., Circle-II, Coimbatore, wherein assessee stated that during month of February, 2011 assessee had sold land measuring 55 cents located at Salathampatty village to Mr. A.Rajendran for sale consideration of Rs.42.00 lakhs in cash. 3 ITA Nos.412 & 413/Mds/2016 He also stated that land measuring 55 cents located at Salathampatty village was purchased by him for `20.00 lakhs during year 2007 from Smt. Unnamalai, Omalur and said land was sold to Mr. Rajendran by obtaining advance of `20.00 lakhs during October, 2010 and sale deed was executed during month of February, 2011 against payment of balance amount of Rs.22.00 lakhs. However, while furnishing return of income assessee did not incorporate above said transaction in his return of income. In note attached to return of income assessee had stated that he acted only as power agent and he was never in possession of property of Smt. Unnamalai & Others. He further stated that property was sold for Rs.1,68,000/- and amount was handed over to Smt. Unnamalai. 4. learned Assessing Officer did not accept above stand of assessee because he opined that it is only afterthought and attempt to avoid tax. Thereafter he brought amount of Rs.20.00 & 22.00 lakhs to tax for 4 ITA Nos.412 & 413/Mds/2016 relevant assessment years 2009-10 & 2011-12 by observing as follows:- 4. above stand of assessee is not acceptable. This is purely afterthought and attempt to avoid offering explanation for source of source of purchase consideration of Rs.20 lakhs paid to Smt. Unnamalai & Ors. assessee purchased property for Rs.20.00 lakhs and paid amount on different occasions during 2007 and ultimately got registered it by power on 15.04.2008 and sold it to Shri A.Rajendran on 21.02.11 on executing his power. Now assessee has now come with new theory of fear factor which is not acceptable. In statement recorded on 22.03.2011, assessee has clearly stated that he purchased said land for 20 lakhs and sold it for Rs.42 lakhs to Shri A.Rajendran after incurring expenditure of Rs.5 lakhs . After week s time assessee in clear frame of mind he has again affirmed purchase of land for Rs.20 lakhs and execution of sale for Rs.42 lakhs vide his letter dated 30.03.2011. 5. Hence, it is evident that assessee purchased property for Rs.20 lakhs. Since payment dates are not disclosed, date of execution of POA in favour of assessee viz 15.04.2008 is deemed to be date of purchase. Further, assessee is not in position to explain source for this amount which is evidenced by his attempt to disassociate himself from transaction by labeling himself as POA holder alone. In view of this fact sum of Rs.20 lakhs is treated as his income of previous year 2008-09 being unexplained investment in immovable property made by assessee and same is assessed as his income under head income from other sources. 5. On appeal, learned Commissioner of Income Tax (Appeals) dismissed both appeals of assessee agreeing with views of learned Assessing Officer. 5 ITA Nos.412 & 413/Mds/2016 6. Before us, learned Authorized Representative argued by stating that Revenue does not have any documentary proof with respect to transaction admitted by assessee during course of survey proceedings. He further argued by stating that additions cannot be made only on basis of statement recorded from assessee when there are no records to substantiate same. 7. learned Departmental Representative vehemently argued by submitting that since assessee had agreed for addition and admitted transaction there was no further scope nor need for making any further enquiry or investigation on issue. Hence, he pleaded that addition may be confirmed. 8. We have heard rival submissions and carefully perused materials available on record. It appears from facts of case that on initial investigation itself 6 ITA Nos.412 & 413/Mds/2016 assessee had spilled bean by admitting to transaction. Since assessee had admitted transaction under oath, learned Assessing Officer did not proceed further to make any further investigation. Thus, admission of assessee has prevented Revenue from acquiring further documentary evidence and other relevant materials to establish genuineness of statement recorded from assessee. In these circumstances, we are of considered view that entire matter has to be reexamined by learned Assessing Officer afresh. During course of arguments, learned Authorized Representative submitted that Revenue had not handed over remand report of learned Assessing Officer to assessee and copy of statements recorded during course of survey to defend his case. He further requested that same may be handed over to assessee which will assist assessee to defend his case. learned Authorized Representative also pointed out that assessee had not submitted power of attorney executed in favour of him with respect to sale of land. Considering above averments of learned 7 ITA Nos.412 & 413/Mds/2016 Authorized Representative and learned Departmental Representative we hereby direct both parties, to handover aforesaid documents promptly for enabling them to pursue matter. 9. In result, both appeals of assessee are allowed for statistical purposes. Order pronounced in open court on 15th September, 2016 Sd/- Sd/- ( Duvvuru RL Reddy ) ( A. Mohan Alankamony ) Judicial Member Accountant Member Chennai, Dated 15th September, 2016 somu Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR 6. GF M.Palanisamy v. Income Tax Officer, Ward-2(3), Salem
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