The Commissioner Of Income Taxsalary Range Iv, Chennai v. Sri. S.a. Bhimaraja

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVANand THE HONOURABLE MR.JUSTICE J.SATHYA NARAYANA PRASAD T.C.A. No. 245 of 2011 The Commissioner of Income TaxSalary Range IV, Chennai .. Appellant Versus Sri. S.A. Bhimaraja.. Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order dated 24.12.2010 passed by theIncome Tax Appellate Tribunal, Chennai 'A' Bench, in I.T.A. No.1167/Mds/2010. Against the order of The Commissioner of Income tax(Appeals)-VI, Chennai-34 dated 22/06/2010 in I.T.A.No.122/09-10against the order of The Joint Commissioner of Income Tax,Salary Range IV, Chennai-34 dated 30/12/2009 in PAN/GIRNo. . For Appellant : Mrs. R. HemalathaSenior Standing CounselFor Respondent: Mr. S.Sathya Narayanan JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This appeal is filed by the appellant/Revenue against theorder dated 24.12.2010 passed by the Income Tax AppellateTribunal, 'A' Bench, Chennai, in I.T.A. No. 1167/Mds/2010 forthe assessment year 2007-08. 2. This Court, by order dated 03.08.2011 admitted theappeal on the following substantial questions of law forconsideration: “1. Whether on the facts and in the circumstancesof the case, the Tribunal was right in deleting thecommission income when the sale is effected throughpower of attorney in favour of Sri Developer Ltd. andpurchase deed was produced? https://hcservices.ecourts.gov.in/hcservices/ 2. Whether on the facts and circumstances of thecase, the Tribunal was right in deciding that nocapital gain or business income arises, since theproperty was sold to single party when the land isbusiness asset? 3. Whether on the facts and circumstances of thecase, the Tribunal was right in deleting Rs.28 lakhsbank account and no evidence for withdrawal? 4. Whether on the facts and circumstances of thecase, the Tribunal was right in deciding thatpalawakkam village not so far is notified for capitalgain when the land is situated within urban limits?5. Whether on the facts and circumstances of thecase, the Tribunal was right in deleting Rs.44.75 lakhswhen the assessee has not produced any evidence? 6. Whether on the facts and circumstances of thecase, the Tribunal was right in deleting Rs.50 lakhswhen the total credit in the name of Manikandan isRs.1.17 crore and the total debt is Rs.67 lakh andthere is nett amount of Rs.50 lakhs remainingunexplained?" 3. The case in brief is that the respondent/assessee wasemployed as Engineer in M/s.Ramco Industries Ltd, till 2008. Hefiled his return of income for the assessment year 2007-2008disclosing a sum of Rs.79,35,400/-. During the course ofassessment proceedings, the Assessing Officer confronted therespondent/assessee with respect to the details collected fromAIR information, which include cash deposits of Rs.32,19,000/-being rent received from different parties, purchase of immovableproperties to the tune of Rs.48,30,000/- and huge cash turnoverin his account with State Bank of India, Mauritius. Therespondent/assessee offered his explanation, which was found tobe not satisfactory and therefore, the assessing officer, afterhaving held that the respondent / assessee was involved in thereal estate business, passed the order of assessment on30.12.2009, on a total income of Rs.3,18,42,159/- including longterm capital gains at Rs.1,82,000/- (subjected to tax @ 20%)which resulted in raising a net demand of Rs.1,15,71,391/-. 4. Aggrieved by the order of assessment, therespondent/assessee filed an appeal before the appellateauthority namely Commissioner of Income-tax (Appeals)-VI, whodismissed the same on 22.06.2010 confirming the order of theassessing officer. The respondent / assessee went on furtherappeal before the Tribunal and the Tribunal vide its order dated24.12.2010, partly allowed the appeal. The said order is underchallenge in this appeal by the appellant / Revenue. 5. The main contention of the learned counsel for theappellant is that without properly considering the fact that the respondent / assessee did not adduce any satisfactorydocumentary material to support their claim, the Tribunal erredin deleting the additions made by the Assessing Officer viz.,Rs.23.20 lakhs as business income in the nature of commissionearned on sale of land at Kalavakkam village, Rs.25,45,417/- asbusiness income in respect of the sale of property atNeelangarai village, Rs.32.19 lakhs and Rs.28 lakhs as incomefrom other sources against the cash deposits, deposit of Rs.25lakhs as unexplained investment and Rs.44.75 lakhs asunexplained nature of deposit. The learned counsel furthersubmitted that the Tribunal also erred in deleting the additionof Rs.50 lakhs received from one Manikandan as unexplainedinvestment. According to the learned counsel, it was claimed bythe respondent / assessee before the Tribunal that he advancedthe sum of Rs.50 lakhs to the said Manikandan by way ofDemand Draft in February 2006 for purchase of property, but thetransaction did not fructify and therefore, the advance amountwas returned by way of cheque, which was dishonoured on itspresentation and the respondent / assessee filed a complaintbefore the jurisdictional magistrate court in this regard.However, such a claim of dishonour of cheque and filing ofcomplaint was raised by the respondent / assessee for the firsttime before the Tribunal and hence, the Tribunal ought to haveprovided an opportunity to the appellant / Revenue to counterthe said claim made by the respondent/ assessee, in adherence tothe principles of natural justice. Therefore, the learnedcounsel prayed this court to remand the matter to the Tribunalfor fresh consideration.6. On the other hand, the learned counsel for therespondent / assessee, submitted that the Tribunal afteranalysing the entire facts and circumstances of the case and thedocuments placed before the same, rightly passed the orderimpugned herein, which does not call for any interference bythis court. 7.Heard both sides and perused the materials available onrecord. 8. The order of the Tribunal dated 24.12.2010, which isimpugned herein, is assailed by the appellant / Revenue on theground that no relevant documentary evidence, such as, PANNumber, Income Tax Particulars, etc. was produced by therespondent /assessee to substantiate their claim and noreasonable opportunity was provided to the appellant / Revenueto counter the claim made by the respondent / assessee for thefirst time before the Tribunal, following the principles ofnatural justice. 9.There is some force in the contentions so made by thelearned counsel for the appellant, as this court as a court of 7.Heard both sides and perused the materials available onrecord. 8. The order of the Tribunal dated 24.12.2010, which isimpugned herein, is assailed by the appellant / Revenue on theground that no relevant documentary evidence, such as, PANNumber, Income Tax Particulars, etc. was produced by therespondent /assessee to substantiate their claim and noreasonable opportunity was provided to the appellant / Revenueto counter the claim made by the respondent / assessee for thefirst time before the Tribunal, following the principles ofnatural justice. 9.There is some force in the contentions so made by thelearned counsel for the appellant, as this court as a court of appeal only decides the legal questions arising out of theimpugned order and it cannot decide the question of fact de novounless a pure finding of fact is decided. Whereas, thesubmissions made on the side of the appellant are touching thefactual aspects, which have to be examined by the Tribunal,being the final fact finding authority, after providingreasonable opportunity to both the parties to substantiate theirrespective claims by producing the relevant documentary evidenceavailable with them. Therefore, this court, without going intothe merits of the case, sets aside the order impugned herein andremands the matter to the Tribunal for fresh consideration andpass appropriate orders, on merits and in accordance with law,after affording reasonable opportunity to both the parties forproduction of the requisite materials. Such an exercise shallbe competed within a period of six months from the date ofreceipt of a copy of this judgment. 10. Accordingly, this tax case appeal stands disposed of.No costs. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar dhk/rsh To 1.The Income Tax Appellate Tribunal, Chennai “A” Bench Chennai. 2.The Joint Commissioner of Income Tax, Salary Range IV, Chennai. Salary Range IV, Chennai. 3.The Commissioner of Income tax (Appeals)-VI, Chennai-34. T.C.A No. 245 of 2011 GSM(CO)CT/17/06/2022