Commissioner Of Income Tax,Chennai v. Dr.akilan Ramanathan

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.12.2018 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case Appeal Nos.881 to 883 and 899 to 901 of 2017and C.M.P.Nos.22424 & 22425 and 22619 & 22620 of 2017 Commissioner of Income Tax,Chennai. ... Appellant in all TCAs' -vs- Dr.Akilan Ramanathan,#9, State Bank Colony,Shastri Nagar,Adyar, Chennai-600 020.PAN ACQPA 2957 G... Respondent in all TCAs' Tax Case Appeal filed under Section 260-A of the IncomeTax Act, 1961 against the order of the Income-tax AppellateTribunal'A'Bench,Chennai, dated16.09.2016, inI.T.A.No.967/Mds/2016968/MDS/2016,969/MDS/2016,964/MDS/2016, 965/MDS/2016, and 966/MDS/2016 for the assessmentyear 2009-10, 2010-11, 2011-12, 2006-07, 2007-08 and 2008-09. against the Order of the Commissioner of Income Tax(Appeals)-15, Chennai-34, made in I.T.A.Nos.678/CIT(A)-15/13-14,679/CIT(A)-15/13-14, 680 IT/(A)-15/13-14, 682/CIT (A)-15/13-14,683/CIT (A)-1513-14, and 681/CIT (A)-15/13-14, order dated11/03/2016 for the assessment Years 2009-10, 2010-11, 2011-12,2006-07, 2007-08 and 2008-2009, respectively and against theorder of the Joint Commissioner of Income Tax, Business RangeIII, Chennai – 34 in PAN/GIR ACQPA 2957G order dated 27/03/2013for the assesment Years from 2006-2011. For Appellant:Mr.T.R.Senthil Kumar,(In all the Appeals)Senior Standing CounselFor Respondent:Mr.M.P.Senthil Kumar(In all the Appeals) https://hcservices.ecourts.gov.in/hcservices/ COMMON JUDGMENT (Delivered by T.S.Sivagnanam, J.) These appeals, by the Revenue filed under Section 260A ofthe Income-tax Act, 1961 (hereinafter referred to as “the Act”),are directed against the common order passed by the Income-taxAppellate Tribunal 'A' Bench, Chennai (for brevity “theTribunal”), in I.T.A.Nos.964 to 966/Mds/2016, dated 16.09.2016,(T.C.A.Nos.899 to 901 of 2017) for the assessment years 2006-07to 2008-09. 2.The second set of appeals filed by the Revenue aredirected against the common order passed by the Tribunal inI.T.A.Nos.967 to 969/Mds/2016, dated 16.09.2016 (T.C.A.Nos.881to 883 of 2017) for the assessment years 2009-10 to 2011-12. 3.The common question of law, which arises forconsideration in all the assessment years, viz., 2006-07 to2011-12 is regarding the unexplained cash credit in the bankaccount. 4.The substantial question of law raised therein iswhether on the facts and in the circumstances of the case, theTribunal was right in deleting the addition of unexplainedcredit made with respect to the amount deposited in the bankaccount. 5.The second question pertains to repayment of loan takenfrom the assessee's wife and assessee's father. This questionarises only in one appeal, viz., T.C.A.No.900 of 2017 for theassessment year 2007-08, and the substantial question of lawraised is whether on the facts and in the circumstances of thecase, the Tribunal was right in deleting the addition made onaccount of unsecured loan claimed to be received from theassessee's father and wife, which is in the nature ofunexplained credit. 6.The third issue is relating to unsecured loan, whicharises in four assessment years, viz., 2007-08, 2009-10 to 2011-12, i.e., in T.C.A.Nos.900, 881 to 883 of 2017. The substantialquestion of law framed is whether on the facts and in thecircumstances of the case, the Tribunal was right in restrictingthe addition made on account of unsecured loan, which is in thenature of unexplained credit. 7.The next issue is with regard to the gift received fromthe co-brother of the assessee. This issue arises in twoassessment years, viz., 2008-09 and 2009-10, subject matter ofT.C.A.Nos.901 and 881 of 2017. The substantial question of lawframed is whether on the facts and in the circumstances of the https://hcservices.ecourts.gov.in/hcservices/ 6.The third issue is relating to unsecured loan, whicharises in four assessment years, viz., 2007-08, 2009-10 to 2011-12, i.e., in T.C.A.Nos.900, 881 to 883 of 2017. The substantialquestion of law framed is whether on the facts and in thecircumstances of the case, the Tribunal was right in restrictingthe addition made on account of unsecured loan, which is in thenature of unexplained credit. 7.The next issue is with regard to the gift received fromthe co-brother of the assessee. This issue arises in twoassessment years, viz., 2008-09 and 2009-10, subject matter ofT.C.A.Nos.901 and 881 of 2017. The substantial question of lawframed is whether on the facts and in the circumstances of the https://hcservices.ecourts.gov.in/hcservices/ case, the Tribunal was right in deleting the addition made onaccount of gift claimed to have been received from the co-brother of the assessee. 8.The next issue is with regard to the refund of loanfrom one Mrs.Kadambari. This issue arises in the assessmentyear 2010-11 relevant to T.C.A.No.882 of 2017. The substantialquestion of law, which has been raised, is whether on the factsand in the circumstances of the case, the Tribunal was right indeleting the addition made on account of return of loan fromMrs.Kadambari, which is in the nature of unexplained credit. 9.The next issue is with regard to the loan taken fromthe father of the assessee, which arises in the assessment year2011-12 subject matter of T.C.A.No.883 of 2017 and thesubstantial question of law raised is whether on the facts andin the circumstances of the case, the Tribunal was right indeleting the addition made on account of unsecured loan claimedto be received from the father of the assessee, which is in thenature of unexplained credit. 10.The next issue is regarding refund of loan fromMr.R.Ragupathy, which arises in the assessment year 2011-12subject matter of T.C.A.No.883 of 2017 and the substantialquestion of law raised is whether on the facts and in thecircumstances of the case, the Tribunal was right in deletingthe addition made on account of receipt claimed to have beenreceived from Mr.R.Ragupathy, which is in the nature ofunexplained credit. 11.The next issue is with regard to the restriction ofdisallowance of agricultural income, which arises in theassessment years 2008-09 to 2011-12 subject matter ofT.C.A.Nos.901 and 881 to 883 of 2017 and the substantialquestion of law raised is whether on the facts and in thecircumstances of the case, the Tribunal was right in restrictingthe addition made on account of unexplained agricultural incometreated as other income on the mere ground that the assesseeowns agricultural lands by erroneously estimating theagricultural income as Rs.7,41,500/- for the assessment year2008-09 and Rs.15,72,500/- for the assessment years 2009-10 to2011-12. 12.The last issue is with regard to the consultancyservices, which arises in the assessment year 2011-12 subjectmatter of T.C.A.No.883 of 2017 and the substantial question oflaw raised is whether on the facts and in the circumstances ofthe case, the Tribunal was right in restricting the additionmade towards unexplained credit with respect to consultancyservices/salary to Rs.4.8 lakhs as against the addition ofRs.6,66,900/-. https://hcservices.ecourts.gov.in/hcservices/ 13.We have heard Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel for the appellant/Revenue and Mr.M.P.SenthilKumar, learned counsel for the respondent/assessee. 14.If we had taken up each of the appeals individually,all the appeals cannot be pursued by the Revenue on account oflow tax effect. Nevertheless, we took up for consideration thesubmissions made by Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel stating that the assessments were re-openedunder Section 147 of the Act and therefore, we have heard thelearned counsels on merits. https://hcservices.ecourts.gov.in/hcservices/ 13.We have heard Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel for the appellant/Revenue and Mr.M.P.SenthilKumar, learned counsel for the respondent/assessee. 14.If we had taken up each of the appeals individually,all the appeals cannot be pursued by the Revenue on account oflow tax effect. Nevertheless, we took up for consideration thesubmissions made by Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel stating that the assessments were re-openedunder Section 147 of the Act and therefore, we have heard thelearned counsels on merits. 15.Before we go into the correctness of the orders passedby the Tribunal, it would be first necessary to examine as towhether any substantial question of law arises for considerationin any of these appeals. If the answer to the question is inthe negative, we may not be required to examine the matter onmerits. Thus, we have to see as to whether the finding recordedby the Tribunal is so palpably illegal or that no reasonableperson can come to such a conclusion for us to interfere underSection 260A of the Act. The statute mandates that the appealbe decided on substantial questions of law. We have to examinethe findings of the Tribunal on the issues, which we havepointed out arising in each of the appeals. In fact, the issuerelating to cash deposit in bank account arises for all theassessment years. We have to examine the orders passed by theTribunal dated 16.09.2016, and in paragraph 11 of the order, theTribunal has recorded its finding relevant for the assessmentyear 2006-07. The finding is to the following effect:- “11.Wehaveconsideredtherivalcontentions and perused the orders of theauthorities below. Copy of the SBI bank accountplaced at page 9 of the paper book shows thatassessee had withdrawn Rs.2 lakhs on 21.10.2005and made a deposit of Rs.1 lakhs on 27.12.2005.Observation of the lower authorities was that theassessee being not in the business or professionas such, there is no need for keeping so much cashin his hands. In our opinion, this is only asurmise and could not be a valid reason for makingthe addition. Assessee has a choice of keepingthe money personally with him or in the bank.Just because assessee is not a businessman orprofessional would not be a reason to disentitlehim from claiming the benefit that would otherwisebe available. Assessee could have myriad ofreasons for keeping the cash in hand with him. Wecannot say that assessee could not have shown thesource as withdrawal made by him from the bank account. We are of the opinion that addition wasnot justified. Such addition is deleted.” 16.On a perusal of the above finding, it is evidentlyclear that the Tribunal has re-appreciated the facts, which wereavailable on record, and formed an opinion that the stand takenby the revenue is only a surmise and cannot be a valid reasonfor making the addition. Likewise, for the assessment year2007-08, the finding rendered by the Tribunal is in paragraph 21of the order. Insofar as the said issue is concerned, theTribunal has granted partial relief to the assessee and theassessee is on appeal as against that portion of the order,which went against him. The finding rendered by the Tribunalreads as follows:- account. We are of the opinion that addition wasnot justified. Such addition is deleted.” 16.On a perusal of the above finding, it is evidentlyclear that the Tribunal has re-appreciated the facts, which wereavailable on record, and formed an opinion that the stand takenby the revenue is only a surmise and cannot be a valid reasonfor making the addition. Likewise, for the assessment year2007-08, the finding rendered by the Tribunal is in paragraph 21of the order. Insofar as the said issue is concerned, theTribunal has granted partial relief to the assessee and theassessee is on appeal as against that portion of the order,which went against him. The finding rendered by the Tribunalreads as follows:- “21.......The last of the deposits madewith Indian Overseas Bank, Adyar considered forthe addition was Rs.2,75,000/- dated 28.2.2007.Thus, the time gap between the earliest withdrawaland last of the deposits was less than 11 months.Assessee had given explanation as to why he waswithdrawing the amounts. As per the assessee, hewas engaged in house construction in State BankColony, Shastri Nagar, Adyar and was negotiatingfor a property at UK through an Indian real estateagent. Just because there was a gap of about 11months, we are of the opinion that the cashwithdrawals made by the assessee prior to the dateof the deposits ought not to have beendisbelieved.” 17.For the assessment year 2008-09, the findings renderedby the Tribunal are in paragraphs 54 and 56. 18.In the other set of cases, viz., T.C.A.No.881 to 883of 2017, this finding has been dealt with by the Tribunal inparagraphs 13, 43 and 53 respectively. After going through thefindings recorded by the Tribunal, we are fully satisfied thatthe entire issue/dispute revolves on factual details, which wereappreciated by the Tribunal to render a finding. Likewise, theother issues, viz., unsecured loan, the gift received from theco-brother of the assessee, the refund of loan by Mrs.Kadambari,the loan received from the father of the assessee, the refund ofloan from one Mr.R.Ragupathy, restriction of disallowance ofagricultural income and consultancy services are all revolvingaround the factual matrix, which were taken note of by theTribunal. 19.In our considered view, the Tribunal has done athorough exercise to examine each and every aspect and renderedits finding on each issue separately. Thus, we are of the https://hcservices.ecourts.gov.in/hcservices/ considered view that no substantial question of law arises forconsideration in these appeals. 20.Accordingly, the appeals filed by the Revenue fail andthe same are dismissed. No costs. Consequently, the connectedmiscellaneous petitions are closed. Sd/-Assistant Registrar //True Copy// Sub Assistant RegistrarabrTo1.The Income-tax Appellate Tribunal 'A' Bench, Chennai.2.The Commissioner of Income Tax (Appeals)-15, Chennai-34.3.The Joint Commissioner of Income Tax, Business Range III, Chennai—34.+1cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No.88709 +1cc to Mr. Philip George, Advocate, S.R.No. 88846T.C.A.Nos.881 to 883and 899 to 901 of 2017GN(23/01/2019)