Madras High Court
Commissioner Of Income-Tax-Vi vs P.V.Bhoopathy on 10 November, 2005
Bench: P.D.Dinakaran, T.V.Masilamani
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 10/11/2005
Coram
The Hon'ble Mr.Justice P.D.DINAKARAN
and
The Hon'ble Mr.Justice T.V.MASILAMANI
T.C.(A)No.1178 of 2005
and T.C. (A) Nos., 1179, 1180, 1181 of 2005
Commissioner of Income-Tax-VI,
Chennai. ... Appellant in all the appeals
-Vs-
P.V.Bhoopathy ... Respondent in all the appeals
The above T.C.(Appeal) is preferred under Section 260A of the
Income-Tax Act, 1961 against the order of the Income Tax Appellate Tribunal,
Chennai 'C' Bench, dated 12.8.2004 made in ITA No.821/Mds/2000, 822 /Mds/2000,
823/Mds/2000 and 824/Mds/2000.
!For Appellant : Mr.N.Muralikumaran
^For Respondent : ---
:J U D G M E N T
(Judgment of the Court was made by P.D.DINAKARAN, J.) The above tax case appeals are directed against the order of the Income-tax Appellate Tribunal in ITA.No.821/Mds/2000, 822/Mds/2000, 823/Mds/2000 and 824/Mds/2000 dated 12.8.2004.
2. The Revenue is the appellant. The assessment years involved in the present appeals are 1993-1994, 1994-1995, 1995-1996 and 1996-1997 respectively.
3. The brief facts of the case are as follows:-
(i) The assessee is an individual and he filed income tax returns for the assessment years in question, within the time allowed under section 139(1) of the Income Tax Act. The assessee filed revised returns for the assessment years 1989-1990 to 1997-1998 on 6.10.1997. In the revised returns, the assessee disclosed agricultural income for the first time. The assessing officer did not accept the agricultural income declared in the revised returns as genuine and treated the same as an income from other sources. The assessing officer, after scrutinising the details furnished by the assessee, worked out the differences between the investments and the source accepted by the assessee and treated the same as income of the assessee under section 68 and 69 of the Income Tax Act. The assessing Officer did not accept the sources of income explained by the assessee on account of (a) Loan from S.Sengammal, Mother-in-law of the assessee, (b) Receipt of money from Saranathan Chettiar, and (c) Credit for opening balance of Rs.5,85 ,663/- as on 1.4.1989.
(ii) Aggrieved by the orders of the assessing Officer, the assessee filed appeals before the Commissioner of Income Tax (Appeals), which authority agreed with the findings of the assessing Officer and confirmed the additions made by the assessing Officer on account of excess of investments over sources.
(iii) Not satisfied with the order of the Commissioner of Income Tax (Appeals), the assessee approached the Income Tax Appellate Tribunal, Chennai Bench. The Tribunal, after considering the entire case, allowed the appeal filed by the assessee and deleted the additions made by the assessing Officer.
(iv) It is against the said order of the Tribunal, the revenue has preferred the present appeals raising the following substantial question of law, "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting the addition made by the Assessing Officer to the extent sustained by the Commissioner of Income Tax (Appeals) by way of excess of investment over sources therefor, misdirecting itself in law without considering the weight of evidence, circumstances, sequence of events and legal principles relating to burden of proof ?"
4. Admittedly, the assessee is an individual and for the assessment years under consideration, he had filed revised income-tax returns, which was not accepted by the assessing officer, who worked out the differences between the investments made by the assessee and the source of income accepted by him, and treated the same as undisclosed income under sections 68 and 69 of the Income Tax act. The said assessment orders dated 30.3.1999 were challenged by the assessee before the Commissioner of Income Tax (Appeals), who confirmed the order of assessment for the year 1993-1994; set aside the order of assessment for the year 1994-1995 for the limited purpose of making enquiries and affording reasonable opportunity to the assessee of being heard the issue relating to the availability of Rs.1,35,539/- as source on account of sale proceeds of jewellery during the financial year 1993-1994; and partly allowed the assessments for the years 1995-1996 and 1996-199 7 by reducing the additions for the unexplained investments. The assessee, not satisfied with the said order of the Commissioner of Income Tax (Appeals) dated 31.1.2000, approached the Income Tax Appellate Tribunal.
5. The Tribunal, after hearing the rival contentions, held that the source in the form of sale proceeds of jewellery of Sengammal, mother-in-law of the assessee should not have been rejected since it was a common practice in Hindu families to have a good amount of gold jewellery and observed that the Assessing Officer could have verified the genuineness of the sale bills and the existence of jewellery by making proper enquiries. With regard to the amounts received from Saranathan Chettiar, the Tribunal held that the explanation could not be rejected merely the assessee made repayment to the extent of Rs.11,50,00 0/- by cash. It is further held that the source of money for paying Saranathan Chettiar was genuine and hence the explanation of the assessee should not have been rejected. The Tribunal also found that there was nothing wrong in making direct repayment to the partners of the firm M/s.Chandra Fabrics. Regarding the opening balance of Rs.5,85,6 63/- in the hands of family members, the Tribunal agreed with the contentions of the assessee that they had filed returns for the assessment year 1990-91. The Tribunal also agreed with the asessee that the assessee could have had enough savings from earlier years and it was getting good support from his father-in-law in the form of food grains and annual cash gifts and clothes. The Tribunal held that the availability of funds to the assessee for investments from the aforesaid source should have been accepted and therefore deleted all the additions made by the assessing officer in the order of assessments.
6. The above narrated findings of the Income Tax Appellate Tribunal are purely findings of facts. The Tribunal, after analysing the entire case, taking into consideration the explanations offered by the assessee and after satisfying itself came to such findings. That being so, we are not inclined to interfere with such findings of fact.
7. At this juncture, we feel it relevant to refer to the decision of Madhya Pradesh High Court in the case of C.I.T. Vs. Pradeep Shantaram Padgaonkar (143 ITR 785). That is a case where the assessee made a total investment of Rs.70,198/- during the accounting periods relating to the assessment years 1969-70 and 1970-71. The contention of the assessee was that the investment was made out of the gifts and donations received by him from his mother's sister. The Income Tax Officer did not accept the assessee's explanation and held that such investment represented the assessee's income from undisclosed sources. The Income Tax Officer also initiated penalty proceedings against the assessee and levied penalty. The Tribunal held that the assessee came forward voluntarily offering the income for tax and it was a case where his explanation in respect of certain investment had been rejected. When the matter came up before the Madhya Pradesh High Court, the Court observed as under, "...The Tribunal has considered the materials on record and came to the conclusion that no case was made out for imposing the penalty on the assessee. The Tribunal pointed out that the materials placed on record by the assessee, i.e., the certifica f the Secretary of the Maharani, who was the mother's sister of the assessee, showing that gifts and donations were made by the Maharani of Indore to the assessee from time to time, was not considered while imposing penalty on the assessee. The Tribunal also observed that the assessee voluntarily offered the income for assessment. The Tribunal further considered that the AAC, throughout the body of the order, treated the assessee as a defaulter and did not invoke the Explanation to S.271(1)(c) of the Act. The Tribunal also held that even if the Explanation was invoked, there was nothing to indicate that the asessee committed fraud or gross or wilful neglect in returning the income. On these findings, the Tribunal set aside the order imposing penalty on the assessee. The penalty has been set aside on the basis of findings of fact recorded by the Tribunal on the materials produced on record and no questions of law, as proposed by the Department, arise out of the order of the Tribunal."
From the above it is clear that the Court was not inclined to interfere with the findings of fact recorded by the Tribunal on the basis of materials produced before it and found that there was no questions of law.
8. In the case on hand also, as narrated above, the conclusion of the Tribunal was purely on the basis of findings of facts and we do not see any reason whatsoever to interfere with the same. No question of law much less substantial question of law arises for consideration in these appeals.
9. Consequently, the question raised in the present appeals are answered in the affirmative against the revenue and in favour of the assessee. The appeals are dismissed. No costs.
Index : Yes Website: Yes vr To The Commissioner of Income Tax-VI, Chennai.