Income Tax Appellate Tribunal - Chennai
J.Nagendran, Coimbatore vs Dcit, Coimbatore on 27 September, 2019
आयकर अपील य अ धकरण, 'बी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
' B' BENCH : CHENNAI
ी एन.आर.एस. गणेशन, या यक सद य एवं
ी इंटूर रामा राव, लेखा सद य के सम
[BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER]
आयकर अपील सं./I.T.A. No.1749/CHNY/2016
नधारण वष /Assessment year : 2011-2012.
Shri. J. Nagendran, Vs. The Deputy Commissioner of
No.3, Kalingarayan Street, Income Tax,
Ramnagar, Circle II,
Coimbatore 641 009. Coimbatore
[PAN ABEPN 1149A]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ# क$ ओर से/ Appellant by : None
&'यथ# क$ ओर से /Respondent by : Shri. Sridhar Dora, IRS, JCIT.
सन
ु वाई क$ तार ख/Date of Hearing : 08-08-2019
घोषणा क$ तार ख /Date of Pronouncement : 27-09-2019
आदे श / O R D E R
PER INTURI RAMA RAO, ACCOUNTANT MEMBER
This is an appeal filed by the Assessee directed against the order of the Commissioner of Income Tax (Appeals)-2, Coimbatore ('CIT(A)' for short) dated 25.04.2016 for the Assessment Year (AY) 2011-2012.
:- 2 -: ITA No. 1749/2016
2. The Assessee raised the following grounds of appeal:
''1. The learned CIT(A) has grossly erred in upholding the addition of Rs.6 Crores, alleging on-money payment made, by the appellant for the purchase of property by him, along with others, contrary to the contents of the registered sale deed dated 15th November 2010, including the actual sale consideration disclosed, in the absence of any cogent materials with the AO, in the facts and the circumstances of the case and in law.
2. The learned CIT(A) has failed to appreciate that the addition of Rs.6 Crores cannot be sustained only on the basis of surrounding circumstances, human probabilities and, on mere suspicion, as, however strong it may be, suspicion etc. cannot take the place of evidence on record in the facts and circumstances of the case, as the appellant has totally rebutted the allegation of the AO that excess payment was made by him, in the facts and the circumstances of the case and in law.
3. The learned CIT(A), has grossly erred in rejecting the categorical statement of the Power of Attorney holder, who had executed the sale deed, at the time of recording statement u/s 131 of the Income Tax Act, 1961, from him on oath on 10.03.2014, that there was no payment of on-money received by him over and above the consideration stated in the registered document for conveyance of the property, in the facts and the circumstances of the case and in law.
4. The learned CIT(A) has failed to appreciate that the onus is on the Revenue to prove, beyond any reasonable doubt with cogent material evidence, conclusively that the appellant had actually made investment in the purchase of property by way of on-money payment in excess of the sale consideration stated in the sale deed, which it has miserably failed to do so, in the facts and the circumstances of the case and in law.
5. The learned CIT(A) ought to have held that the AC has failed to prove conclusively that the appellant has made on-money payments towards the sale consideration to the seller, and therefore the addition made in the assessment, on presumptions, surmises and conjectures, without discharging the onus resting with the Revenue, is not sustainable in the hands of the appellant, in the facts and the circumstances of the case and in law and deleted the addition of Rs.6 Crores made in the assessment of the appellant as unwarranted and unsustainable, in the facts and the circumstances of the case and in law.
6. The learned CIT(A) has grossly erred in merely relying on the loose sheets impounded during the survey, at the premises of a third party, :- 3 -: ITA No. 1749/2016 a stranger to the appellant in every respect, and without disputing the fact that the appellant was not an interested party to the understanding, if any, reached by the individuals named as beneficiaries in the unsigned MOU so impounded, besides relying on the two decisions of the Apex Court, reported in 291 ITR 278 and 214 ITR 801, having no application in the facts of the case of the appellant, with a closed mind, purely on his subjective considerations, confirming the addition of Rs.6 Crores, to the income admitted by the appellant in his return of income.
7. For these and other additional grounds of appeal that may be adduced at the time of hearing, the order of the Commissioner of Income Tax (Appeals), is opposed to law and unsustainable in the facts and the circumstances of the case be quashed and the consequent demand for income tax be deleted in full''.
3. The brief facts of the case are as under:
The appellant is an individual engaged in the business of running hotel in the name of M/s. Vijay Paradise. The return of income for the AY 2011-12 was filed on 22.7.2011 disclosing total income of Rs.1,69,18,690/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-II, Coimbatore vide order dated 11.03.2014 passed u/s. 143(3) of the Income Tax Act, 1961 (for short 'the Act') at total income of Rs.7,69,18,690/-. While doing so, the Assessing Officer made addition of G6,00,00,000/- on account of payment of on money over and above the consideration stated in the sale deed. Factual background of the issue is as under:-
Assessee purchased land measuring 57.87 cents located at Sowripalayam Village bearing GS No.278/1 and 279/1 from Shri. D. :- 4 -: ITA No. 1749/2016 Srinivasan (power agent) for a registered value of G4,00,00,000/- vide sale deed No.3950/2010, dated 15.11.2010. During the course of survey operation conducted on 27.01.2011 in the business premises of M/s. Tejas, the Department had come to know that payment of G6,00,00,000/- was paid over and above the consideration stated in the sale deed on the purchase of 57.87 cents of land. During the course of survey proceedings, the Department found one MOU and impounded the MOU entered between assessee alongwith one Mr. D. Senthilkumar. The said Senthilkumar had also gave sworn statement dated 07.02.2011 confirming receipt of on money in connection with the said transaction. When the assessee was confronted with this information on 15.02.2011, assessee had denied having paid any on money. However, Assessing Officer based on the MOU and statement of Shri. D. Senthilkumar, who is the partner of M/s.Teja concluded that there was payment of on money over and above the consideration stated in the sale deed. As the assessee failed to explain the source for the sum, brought the same to tax the amount as unexplained investments.
4. Being aggrieved, an appeal was preferred before ld. CIT(A) and contended that allegation made by the Assessing Officer is false and the property has been purchased only through POA holder of the :- 5 -: ITA No. 1749/2016 seller namely Shri D. Senthilkumar, assessee had no dealings whatsoever with M/s. Tejas and the Assessing Officer without granting an opportunity of cross examination of M/s. Tejas made an addition. It is further contended that no addition can be made based on unsigned MOU. The ld. CIT(A) on consideration of the contention of the MOU impounded during the course of survey of M/s. Tejas and statements recorded from Shri. D. Senthilkumar and Shri. D. Srinivasan concluded that in view of the circumstantial evidence that there was payment of on money of G6,00,00,000/- confirmed the addition.
5. Being aggrieved by the order of the CIT(A), the appellant is in appeal before us in the present appeal. When the appeal was called for hearing, none appeared on behalf of the assessee.
6. On the other hand, the ld. Sr. Departmental Representative placed reliance on the orders of lower authorities.
7. We heard the Departmental Representative and perused the material on record. The sole issue involved in the present appeal relating to the addition of unexplained investments for payment of on money for purchase of property at Sowripalayam Village. Admittedly, sellers of the property have admitted receipt of on money in their :- 6 -: ITA No. 1749/2016 individual hands. On perusal of the impugned order, it is clear that ld. CIT(A) had considered MOU and the statements of Shri D Srinivasan, who was POA holder of the property and Shri.D. SenthilKumar. Considering the probability and circumstantial evidence on record he categorically held that there was payment of on money at the time of purchase of land. We find that the findings of the ld. CIT(A) is based on proper appreciation of materials on record, we do not find any reason to interfere with the order of the ld. CIT(A). Accordingly, the appeal filed by the assessee stands dismissed.
8. In the result, the appeal of the assessee stands dismissed.
Order pronounced on 27th day of September, 2019, at Chennai.
Sd/- Sd/-
(एन.आर.एस. गणेशन) (इंटूर रामा राव)
(N.R.S. GANESAN) (INTURI RAMA RAO)
या यक सद य/JUDICIAL MEMBER लेखा सद य/ACCOUNTANT MEMBER
चे नई/Chennai
.दनांक/Dated:27th September, 2019
KV
आदे श क$ & त0ल1प अ2े1षत/Copy to:
1. अपीलाथ#/Appellant 3. आयकर आय3
ु त (अपील)/CIT(A) 5. 1वभागीय & त न7ध/DR
2. &'यथ#/Respondent 4. आयकर आय3
ु त/CIT 6. गाड फाईल/GF