The Commissioner Of Income-Tax, Tiruchirapalli v. M.ravindran

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.07.2007 CORAM : THE HONOURABLE MR.JUSTICE P.D.DINAKARAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.1043 of 2007 The Commissioner of Income-tax, Tiruchirapalli. Vs. .. Appellant M.Ravindran .. Respondent Appeal under Section 260A of the Income-tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Chennai Bench 'D', Chennai inI.T.A. No.1584/Mds/2005 dated 15.02.2007 for the assessment year 2000-2001against the order dated 30.03.2005 of the Commissioner of Income Tax(Appeals) III, Chennai - 34 in ITA.No.165/2003-04/A.III against the orderdated 28.03.2003 in PAN.No. of the Assistant Commissioner ofIncome Tax, Company Circle (I) Tiruchirapalli I/C, Chennai - 34, againstthe Commissioner of Income Tax (Appeals) III, Chennai - 34, inITA.No.165/2003-04/A III dated 30.03.2005 for the assessment year 2000-2001. For Appellant :Mr.N.Muralikumaran, Sr.Standing Counsel forIncome-tax Department JUDGMENT (Judgment of the Court was delivered byP.P.S.Janarthana Raja, J.) This appeal is filed under Section 260A of the Income Tax Act, 1961by the Revenue, against the order of the Income Tax Appellate Tribunal,Chennai Bench 'D', Chennai in I.T.A. No.1584/Mds/2005 dated 15.02.2007,raising the following substantial question of law:- https://hcservices.ecourts.gov.in/hcservices/ "Whether on the facts and in the circumstances of thecase, the Income Tax Tribunal is right in law inholding that the addition of Rs.10.00 lakhs being theunexplained credit is not leviable?" 2.The facts leading to the above substantial question of law areas under:- The assessee is a person of Indian Origin and is a citizen of SriLanka. The relevant assessment year is 2000-2001 and the correspondingaccounting year ended on 31.03.2000. The assessee filed his Return ofincome on 01.03.2001 admitting a total income of Rs.60,000/- in the statusof Non-Resident. The Return was processed under Section 143(1) of theIncome-tax Act ("Act" in short) on 24.09.2001 and notice under Section 143(2) of the Act was issued on the same day, and was served on the assesseeon 09.10.2001. The assessment was completed under Section 143(3) of theAct determining the total income at Rs.12,60,000/-. While completing theassessment, the Assessing Officer made additions amounting toRs.12,00,000/- under the head "unexplained credit" on the ground that thesaid sum was not satisfactorily explained. Aggrieved by the order, theassessee filed an appeal to the Commissioner of Income-tax (Appeals) ("CIT(A)" in short). The CIT(A) deleted the addition of Rs.10,00,000/- made bythe Assessing Officer by relying on the circular of Central Board ofDirect Taxes ("CBDT" in short), which is applicable to the assessee, andconfirmed the addition of Rs.2,00,000/- and partly allowed the appeal.Aggrieved by the deletion of Rs.10,00,000/- made by the CIT(A), theRevenue filed an appeal to the Income-tax Appellate Tribunal ("Tribunal"in short). The Tribunal dismissed the Revenue's appeal and confirmed theorder of the CIT(A). Hence the present tax case by the Revenue. 3.Learned Senior Standing Counsel appearing for the Revenuesubmitted that the assessee had not satisfactorily explained the source ofhis income and also the assessee was not a migrant to whom the said CBDTCircular applies. Hence the addition made by the Assessing Officer isjustified. 3.Learned Senior Standing Counsel appearing for the Revenuesubmitted that the assessee had not satisfactorily explained the source ofhis income and also the assessee was not a migrant to whom the said CBDTCircular applies. Hence the addition made by the Assessing Officer isjustified. 4.Heard the counsel. The assessee is a citizen of Sri Lanka and aperson of Indian Origin and assessed in India as a Non-Resident. Theassessee sold his properties vide documents dated 7.4.1998 and 25.3.1999for a consideration of SLR 34 lakhs and SLR 85 lakhs respectively. Insupport of this claim, the assessee has produced documents before theAssessing Officer and also relied on the CBDT Circular No.1527 dated12.09.1983. In Page-4 of the assessment order, the said CBDT Circular isextracted, which reads as under:- "2.15 It has been represented to the Board that in view of thedifficulties being faced by the persons migrating from Sri Lankato India due to recent disturbances in that country, it may notbe possible for a migrant from that country to lead the evidence necessary to prove his / her claim that a particular sum of moneyor personal jewellery etc., has been brought over by him / herfrom that country. 2.16In order to avoid inconvenience to persons of Indianorigin migrating from Sri Lanka, in their Income tax assessmentin India, the Board consider that the case of bona-fide migrantsfrom that country should be dealt with in a sympathetic manner.In their cases, production of direct or documentary evidence inthe shape of transfer through banks, hundles etc., in support ofremittance from that country need not be insisted upon. 2.17However with a view to ensure that inscrupulous personsdo not abuse the concession, the Income tax officers shouldensure the satisfaction of the following conditions beforeaccepting a claim of remittance from the above mentionedcountry:-1.The assessee has migrated to India from Sri Lankaon or after 1.4.1983.2.The assessee had sufficient resources in Sri Lankato which the remittance could be reasonably attributed.3. The assessee had no source of income either inIndia or any foreign country other than Sri Lanka, prior tomigration and he was not assessed as resident in India either forthe assessment preceding the year in which he migrated or forearlier years.4.The assessee has intimated the Income Tax officerconcerned about the sum brought over and the date(s) of itsintroduction in the books of account within two months of thedate of his arrival in India and in the case of persons who havealready migrated by 30[th] November 1983. 5.The above concession will be subject to an overallceiling of Rs.2 Lakhs in respect of all sums brought over fromSri Lanka and introduced in the account books by the assessee andall members of his family taken together." The scope of the above Circular has been considered by the first appellateauthority as well as the Tribunal and they have come to the conclusionthat the assessee has sufficient sources in Sri Lanka. The Tribunal, inParagraph-3 of its order, held as follows:- The scope of the above Circular has been considered by the first appellateauthority as well as the Tribunal and they have come to the conclusionthat the assessee has sufficient sources in Sri Lanka. The Tribunal, inParagraph-3 of its order, held as follows:- "We have heard the rival submissions and perused the material onrecord. It is an admitted fact that the Assessee has produceddocuments relating to sale of property. From this it is evidentthat the Assessee has got a consideration of SLR 35 lakhs and SLR85 lakhs for the two properties stated in the sale deed. TheAssessing Officer is not ready to accept this evidence though itwas produced before him. There is no allegation that thedocuments were not produced before him. According to theAssessing Officer, the evidence is insufficient. But the CBDTrecord. It is an admitted fact that the Assessee has produceddocuments relating to sale of property. From this it is evidentthat the Assessee has got a consideration of SLR 35 lakhs and SLR85 lakhs for the two properties stated in the sale deed. TheAssessing Officer is not ready to accept this evidence though itwas produced before him. There is no allegation that thedocuments were not produced before him. According to theAssessing Officer, the evidence is insufficient. But the CBDT Circular is very clear that if the Assessee produces adequateevidence to the Assessing Officer that he had sufficient sourcesin Sri Lanka to cover the remittance to India, the claim shouldbe admitted. In our opinion, the condition laid down in thecircular (supra) is fulfilled by the Assessee, like the Assesseehas migrated from Sri Lanka and he has sufficient resources inSri Lanka and he has also produced evidence regarding the source.Therefore, we hold that the CIT(Appeals) has taken a correct viewin deleting the addition. We also do no find that any usefulpurpose will be served in setting aside the matter to the file ofthe Assessing Officer for fresh consideration. Accordingly, weuphold the order of the CIT(Appeals) and reject the ground takenby the Revenue." From a reading of the above, it is clear that the Tribunal had given afactual finding that the assessee had sufficient sources in Sri Lanka tocover the remittances to India. The finding that the assessee has enoughsource, is a question of fact. The order of the Tribunal is not perverseand the concurrent finding given by both the authorities below is based onvalid materials and evidence. In the case of Commissioner of Income-taxVs. P.Mohanakala [2007] 291 ITR 278 (SC), the Supreme Court held thatwhenever there is a concurrent finding by the authorities below, nointerference should be called for by the High Court. Under thesecircumstances, we do not find any error or legal infirmity in the order ofthe Tribunal so as to warrant interference. 5.In view of the foregoing reasons, no substantial question of lawarises for consideration of this Court and accordingly, the tax case isdismissed. No costs. Sd/Asst.Registrar /true copy/ km Sub Asst.Registrar To 1. The Assistant Registrar, Income-tax Appellate Tribunal, Chennai Bench 'D', Sastri Bhavan, Chennai.34 Income-tax Appellate Tribunal, Chennai Bench 'D', Sastri Bhavan, Chennai.34 2. The Commissioner of Income-tax (Appeals) III, Chennai-600 034. Chennai-600 034. 3. The Assistant Commissioner of Income-tax, Central Circle III(I)(I/c), Chennai-34. Central Circle III(I)(I/c), Chennai-34. 1 cc To Mr.N.Muralikumaran, Advocate, SR.425411. GG(CO)RVL 27.07.2007 T.C.(A) No.1043 of 2007