S.suresh v. The Assistant Commissioner Of Income Tax,Central Circle,Salem 636 308

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR. JUSTICE M. SATHYANARAYANAN AND THE HONOURABLE MR. JUSTICE ABDUL QUDDHOSE TCA.Nos.139 & 150 of 2020 S.Suresh .. Appellant in both appeals Versus The Assistant Commissioner of Income Tax,Central Circle,Salem 636 308. .. Respondent in both appeals COMMON PRAYER:-Tax Case Appeal filed under Section 260-A ofthe Income Tax Act, 1961, against the order of the Income TaxAppellate Tribunal ''B'' Bench dated 08.11.2019, 20/01/2020 andrespectivelymadeinM.P.No.290/Chny/2019andITANo.942/Chny/2019 against the order of the Income Tax AppellateTribunal,Chennai,dated08/11/2019madeinITANo.942/Chny/2019, and against the order of the AppellateTribunal, Chennai, dated 01/03/2019 made in PAN A22PS9875Magainst the Commissioner of Income Tax (A)-16, Chennai & (A)-18,dated 01/03/2019 & 12/01/2017 made in ITA No.06/2016-2017. For Appellant in both appeals :Mr.G.Baskar For Respondent in both appeals:Mr.T.R.Senthil Kumar COMMON JUDGMENT [Judgment of the Court was made by M.SATHYANARAYANAN,J.,] The facts leading to these appeals are intertwined andtherefore, the appeals are disposed of by this common judgment. 2. The appellant in both the appeals is the assessee and heis an individual. The assessee has filed his return of incomedated 07.05.2017 for the assessment year 2009-2010, in responseto the notice issued under Section 153-A of the Income Tax Act, https://hcservices.ecourts.gov.in/hcservices/ 1961 [in short “IT Act”] dated 09.04.2015 declaring a totalincome of Rs.8,88,420/- and agricultural income of Rs.12,500/-and the said notice was proceeded by a Search under Section 132of the IT Act, which was conducted in the business premises ofthe assessee on 22.05.2014 and during the course of search, theExecutive Diary maintained by the assessee for the year 2008 wasseized on 22.05.2014 and the relevant entries found areextracted below: HOUSEMD50,00,000BANK34,00,000 7,00,000Total91,00,000Total Registration90,00,000Stamp & Registration 3,78,000Bank Charges 50,00094,28,00091,00,000 ------------ 3. The voluntary statement under Section 132(4) of the ITAct was also recorded, wherein the assessee admitted themaintenance of the diary of the above said entries. TheCommissioner of Income Tax (appeals) (in short hereinafterreferred as ['CIT (Appeals)'] has taken into consideration theoriginal voluntary statement given by the assessee under Section132(4) of the ITAct as well as the restraction statement in theform of letter dated 26.10.2016 and also taken intoconsideration the various decisions rendered by the DivisionBench of this Court in Thiru.S.Shyam Kumar Vs. AssistantCommissioner of Income Tax, Central Circle-III(3), Chennai([2018] 99 taxmann.com 39 (Madras)), and confirmed the order ofAssessment, vide order dated 01.03.2019. 4. The assesee, challenging the legality of the said order,preferred further appeal before the Income Tax AppellateTribunal, Chennai (in short hereinafter referred as 'ITAT') andthe ITAT, vide impugned order dated 08.11.2019 has taken intoconsideration that the only issue involved in the present appealas to the addition of Rs.49,50,000/- on account of unexplainedinvestment in the purchase of property and he had admittedundisclosed income in the form of on-money payment for purchaseof property and further taken into consideration the retractionstatement in the form of letter dated 26.10.2016 and alsoplacing reliance upon [2018] 99 taxmann.com 39 (Madras) (citedsupra), has confirmed the order of the CIT (Appeals). https://hcservices.ecourts.gov.in/hcservices/ 4. The assesee, challenging the legality of the said order,preferred further appeal before the Income Tax AppellateTribunal, Chennai (in short hereinafter referred as 'ITAT') andthe ITAT, vide impugned order dated 08.11.2019 has taken intoconsideration that the only issue involved in the present appealas to the addition of Rs.49,50,000/- on account of unexplainedinvestment in the purchase of property and he had admittedundisclosed income in the form of on-money payment for purchaseof property and further taken into consideration the retractionstatement in the form of letter dated 26.10.2016 and alsoplacing reliance upon [2018] 99 taxmann.com 39 (Madras) (citedsupra), has confirmed the order of the CIT (Appeals). https://hcservices.ecourts.gov.in/hcservices/ 5. The assessee, after the disposal of the appeal, filedM.P.No.290 of 2019 under Section 254(2) of the IT Act as to thenon-consideration of Ground Nos.7 and 8 and the saidMiscellaneous Petition has also ended in dismissal vide orderdated 20.01.2020. The assessee aggrieved by the said order andmaking challenge to the same, had filed these appeals. 6. The assessee has raised the following SubstantialQuestions of Law:Cryptic, non-considered & Perverse Ordera) Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal was right inlaw in passing a crptic, non-considered and perverseorder?validity of retracted confession obtained at oddhours: b) whether on the facts and in the circumstances ofthe case the Income Tax Appellate Tribunal was right inlaw in not holding that the confession obtained at oddhours is not valid and cannot be relied on in evidence? Diary NotingC) whether on the facts and in the circumstances ofthe case the Income Tax Appellate Tribunal was right inlaw in confirming the addition made under Section 69 ofIncome Tax, merely on casual diary noting without anycorroborative material, more particularly when theappellant had explained the same to be projection? Independent enquiry to ascertain Market Value d) Whether on the facts and in the circumstances ofthe case the Income Tax Appellate Tribunal was right inlaw in not considering that independent enquiry shouldbe made by the Department on the market value of theproperty to have corroborative material to substantiatethe value arrived at by it more that fixed by theStatutory Authority? Co-owner entitled to only 50% ownership e) whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal was right inlaw in upholding the entire addition of unaccountedinvestment under Section 69 of Income Tax Act in thehands of the appellant, when the appellant was onlyholding 50% interest as co-owner of the said houseproperty?Addition u/s 39f)Whether on the facts and in the circumstances ofthe case the Income Tax Appellate Tribunal was right inlaw in upholding the addition of unaccounted investmentu/s.69 of Income Tax Act, 1961 made without anycorroborative evidences as brought out above? Miscellaneous Petitiong) whether on the facts and in the circumstances of thecase the Income Tax Appellate Tribunal was right in lawin dismissing the Miscellaneous Petition filed forrectification of mistake apparent on record u/s.254(2)of Income tax Act, 1961 for want to adjudication of theGrounds of Appeal raised in appeal?h) whether on the facts and in the circumstances of thecase the Income Tax Appellate Tribunal was right in lawin not recalling its non-considered cryptic orderwithout adjudicating the Grounds of Appeal raised inappeal? Miscellaneous Petitiong) whether on the facts and in the circumstances of thecase the Income Tax Appellate Tribunal was right in lawin dismissing the Miscellaneous Petition filed forrectification of mistake apparent on record u/s.254(2)of Income tax Act, 1961 for want to adjudication of theGrounds of Appeal raised in appeal?h) whether on the facts and in the circumstances of thecase the Income Tax Appellate Tribunal was right in lawin not recalling its non-considered cryptic orderwithout adjudicating the Grounds of Appeal raised inappeal? 7. The learned counsel appearing for the appellant / asseseehas invited the attention of this Court to the typed set andadditional typed set of documents and would submit that beforethe Assessment Order was completed, the appellant / assesseeretracted his alleged voluntary statement under Section 132(4)of the Income Tax Act, vide letter dated 26.10.2016 and thoughhe admitted the contents of particular entry, the fact remainsthat the Sale Deed came into being on 16.04.2008 and whereas thediary entry preferably dated 10.01.2008 entering the sale of theproperty and for the purpose of making improvement to theproperty being purchased, only entry was made actually and itwas not even paid to the seller of the property. It is thefurther submission of the learned counsel appearing for theappellant / assessee that except the diary entry, no tenable orsupporting material whatsoever has been collected except byrecording statement and though in the grounds of appeal beforethe CIT (Appeals), specific ground has been raised as to theadjudication done under Section 47 (A) (1) of the Indian StampAct, the said issue have not been dealt with at all and it isalso the submission of the learned counsel appearing for theappellant that it is also open to the Revenue to make anindependent assessment of the immovable property purchased bythe assessee, by the valuers and even the said exercise has notbeen done and hence prays for interference. 8. The learned Standing Counsel appearing for the Revenuewould submit that admittedly the appellant / assessee did notdispute the maintenance of the diary as well as particular entrymade in the diary and the only requirement is the voluntarystatement given under Section 132 (4) of the IT Act as well asretraction statement in the form of letter, have to be takeninto consideration and the Assessing Officer has also done thatexercise and even in the retraction letter dated 26.10.2016, theadjudication done under Section 47 (A) (1) of the Indian StampAct have not been specifically raised or stated and burden liesheavy on the assessee in the light of the presumption cast uponhim under Section 134(A) of the IT Act and the petitioner has failed to discharge the presumption and would further add thatsince the findings are concurrent in nature, there are noSubstantial Questions of Law raised for consideration in theseappeals and prays for dismissal of these appeals. 9. This Court has carefully considered the rival submissionsand also perused the materials placed before it. 10. A perusal of the order passed by the CIT (Appeals) dated01.03.2019 as well as the original order dated 08.11.2019 passedby the Income Tax Appellate Tribunal did not deal with theaspect as to the adjudication done under Section 47 (A) (1) ofthe Indian Stamp Act. It also appears from the materials placedin the form of additional typed set of documents dated04.03.2020 filed by the appellant / assessee that challengingthe adjudication done by the Special Deputy Collector, Salem,dated 19.08.2011, further appeal was filed under Section 47 (A)(5) of the Indian Stamp Act before the Chief Commissioner(Stamp), Salem and the value of the site fixed at Rs.545 persq.ft has been increased to Rs.600 per sq.ft and it was alsocomplied with. 10. A perusal of the order passed by the CIT (Appeals) dated01.03.2019 as well as the original order dated 08.11.2019 passedby the Income Tax Appellate Tribunal did not deal with theaspect as to the adjudication done under Section 47 (A) (1) ofthe Indian Stamp Act. It also appears from the materials placedin the form of additional typed set of documents dated04.03.2020 filed by the appellant / assessee that challengingthe adjudication done by the Special Deputy Collector, Salem,dated 19.08.2011, further appeal was filed under Section 47 (A)(5) of the Indian Stamp Act before the Chief Commissioner(Stamp), Salem and the value of the site fixed at Rs.545 persq.ft has been increased to Rs.600 per sq.ft and it was alsocomplied with. 11. In the considered opinion of this Court, the said orderpassed by the statutory authority would definitely have abearing on the adjudication done by the authorities below anddespite the fact that specific ground has been raised before theCIT (Appeals) as well as before the ITAT, the said grounds havenot been considered and adjudicated. Therefore, the followingsubstantial question of law raises for consideration:Whether the order of CIT (appeals) dated 01.03.2019,as confirmed by the impugned order of ITAT dated08.11.2019, as to the non consideration of adjudicationdone under Section 47 (A) (1) of the Indian Stamp Act aswell as adjudication done by the Chief Revenue Officer /Inspector General of Registration, Chennai 28 in theappeal filed under Section 47 (A) (5) of the IndianStamp Act, is sustainable in law? 12. In the considered opinion of this Court, the SubstantialQuestion of Law framed is answered in affirmative in favour ofthe appellant / assessee, in the light of the reasons assignedabove. 13. In the result, T.C.No.150/2020 is partly allowed and theimpugned order dated 08.11.2019 passed by the Income TaxAppellate Tribunal is set aside and the matter is remanded tothe Income Tax Appellate Tribunal 'B' Bench for freshconsideration as to the order of the Chief Revenue Officer /Inspector General of Registration, Chennai 28 dated 11.02.2013 in Pa.Mu.No.59078/N2/2010 and as a consequence of allowingT.C.A.No.150/2020, no orders are necessary in T.C.A.No.139/2020and as a result, the said appeal is dismissed. No costs. Sd/-Assistant Registrar(CCC) //True copy// sk Sub Assistant Registrar To1. The Income tax Appellate Tribunal, “B" Bench, Chennai2.The Assistant Commissioner of Income Tax,Central Circle,Salem 636 308.3.The Commissioner of Income tax (A)-16, Chennai.+1cc to Mr.G.Baskar, Advocate SR.No.20038+1cc to Mr.T.R.Senthil Kumar, Advocate SR.No.19614TCA.Nos.139 & 150 of 2020 EV(CO)GMY(01/07/2020)