Madras High Court
The Commissioner Of Income Tax vs Sri. S.A. Bhimaraja on 12 April, 2022
TCA. No. 245 of 2011
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 12.04.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR.JUSTICE J.SATHYA NARAYANA PRASAD
T.C.A. No. 245 of 2011
The Commissioner of Income Tax
Salary Range IV, Chennai .. Appellant
Versus
Sri. S.A. Bhimaraja .. Respondent
Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961
against the order dated 24.12.2010 passed by the Income Tax Appellate
Tribunal, Chennai 'A' Bench, in I.T.A. No. 1167/Mds/2010.
For Appellant : Mrs. R. Hemalatha
Senior Standing Counsel
For Respondent : Mr. Arun Kumar
JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J.)
This appeal is filed by the appellant/Revenue against the order dated
24.12.2010 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai,
in I.T.A. No. 1167/Mds/2010 for the assessment year 2007-08.
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2. This Court, by order dated 03.08.2011 admitted the appeal on the
following substantial questions of law for consideration:
“1. Whether on the facts and in the circumstances of the
case, the Tribunal was right in deleting the commission income
when the sale is effected through power of attorney in favour of Sri
Developer Ltd. and purchase deed was produced?
2. Whether on the facts and circumstances of the case, the
Tribunal was right in deciding that no capital gain or business
income arises, since the property was sold to single party when the
land is business asset?
3. Whether on the facts and circumstances of the case, the
Tribunal was right in deleting Rs.28 lakhs bank account and no
evidence for withdrawal?
4. Whether on the facts and circumstances of the case, the
Tribunal was right in deciding that palawakkam village not so far
is notified for capital gain when the land is situated within urban
limits?
5. Whether on the facts and circumstances of the case, the
Tribunal was right in deleting Rs.44.75 lakhs when the assessee
has not produced any evidence?
6. Whether on the facts and circumstances of the case, the
Tribunal was right in deleting Rs.50 lakhs when the total credit in
the name of Manikandan is Rs.1.17 crore and the total debt is
Rs.67 lakh and there is nett amount of Rs.50 lakhs remaining
unexplained?"
3. The case in brief is that the respondent/assessee was employed as
Engineer in M/s.Ramco Industries Ltd, till 2008. He filed his return of income
for the assessment year 2007-2008 disclosing a sum of Rs.79,35,400/-. During
the course of assessment proceedings, the Assessing Officer confronted the
respondent/assessee with respect to the details collected from AIR information,
which include cash deposits of Rs.32,19,000/- being rent received from
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TCA. No. 245 of 2011
different parties, purchase of immovable properties to the tune of
Rs.48,30,000/- and huge cash turnover in his account with State Bank of India,
Mauritius. The respondent/assessee offered his explanation, which was found
to be not satisfactory and therefore, the assessing officer, after having held that
the respondent / assessee was involved in the real estate business, passed the
order of assessment on 30.12.2009, on a total income of Rs.3,18,42,159/-
including long term 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, the respondent/assessee
filed an appeal before the appellate authority namely Commissioner of
Income-tax (Appeals)-VI, who dismissed the same on 22.06.2010 confirming
the order of the assessing officer. The respondent / assessee went on further
appeal before the Tribunal and the Tribunal vide its order dated 24.12.2010,
partly allowed the appeal. The said order is under challenge in this appeal by
the appellant / Revenue.
5. The main contention of the learned counsel for the appellant is
that without properly considering the fact that the respondent / assessee did not
adduce any satisfactory documentary material to support their claim, the
Tribunal erred in deleting the additions made by the Assessing Officer viz.,
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TCA. No. 245 of 2011
Rs.23.20 lakhs as business income in the nature of commission earned on sale
of land at Kalavakkam village, Rs.25,45,417/- as business income in respect of
the sale of property at Neelangarai village, Rs.32.19 lakhs and Rs.28 lakhs as
income from other sources against the cash deposits, deposit of Rs.25 lakhs as
unexplained investment and Rs.44.75 lakhs as unexplained nature of deposit.
The learned counsel further submitted that the Tribunal also erred in deleting
the addition of Rs.50 lakhs received from one Manikandan as unexplained
investment. According to the learned counsel, it was claimed by the
respondent / assessee before the Tribunal that he advanced the sum of
Rs.50 lakhs to the said Manikandan by way of Demand Draft in February 2006
for purchase of property, but the transaction did not fructify and therefore, the
advance amount was returned by way of cheque, which was dishonoured on its
presentation and the respondent / assessee filed a complaint before the
jurisdictional magistrate court in this regard. However, such a claim of
dishonour of cheque and filing of complaint was raised by the respondent /
assessee for the first time before the Tribunal and hence, the Tribunal ought to
have provided an opportunity to the appellant / Revenue to counter the said
claim made by the respondent/ assessee, in adherence to the principles of
natural justice. Therefore, the learned counsel prayed this court to remand the
matter to the Tribunal for fresh consideration.
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TCA. No. 245 of 2011
6. On the other hand, the learned counsel for the respondent /
assessee, submitted that the Tribunal after analysing the entire facts and
circumstances of the case and the documents placed before the same, rightly
passed the order impugned herein, which does not call for any interference by
this court.
7. Heard both sides and perused the materials available on record.
8. The order of the Tribunal dated 24.12.2010, which is impugned
herein, is assailed by the appellant / Revenue on the ground that no relevant
documentary evidence, such as, PAN Number, Income Tax Particulars, etc.
was produced by the respondent /assessee to substantiate their claim and no
reasonable opportunity was provided to the appellant / Revenue to counter the
claim made by the respondent / assessee for the first time before the Tribunal,
following the principles of natural justice.
9. There is some force in the contentions so made by the learned
counsel for the appellant, as this court as a court of appeal only decides the
legal questions arising out of the impugned order and it cannot decide the
question of fact de novo unless a pure finding of fact is decided. Whereas, the
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submissions made on the side of the appellant are touching the factual aspects,
which have to be examined by the Tribunal, being the final fact finding
authority, after providing reasonable opportunity to both the parties to
substantiate their respective claims by producing the relevant documentary
evidence available with them. Therefore, this court, without going into the
merits of the case, sets aside the order impugned herein and remands the
matter to the Tribunal for fresh consideration and pass appropriate orders, on
merits and in accordance with law, after affording reasonable opportunity to
both the parties for production of the requisite materials. Such an exercise
shall be competed within a period of six months from the date of receipt of a
copy of this judgment.
10. Accordingly, this tax case appeal stands disposed of. No costs.
(R.M.D., J.) (J.S.N.P., J.)
12.04.2022
dhk/rsh
Internet : Yes
Index : Yes/No
To
1.The Income Tax Appellate Tribunal, Chennai “A” Bench.
2.The Commissioner of Income Tax, Salary Range IV, Chennai.
3.The Commissioner of Income tax (Appeals)-VI, Chennai-34.
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TCA. No. 245 of 2011
R. MAHADEVAN, J.
and
J.SATHYA NARAYANA PRASAD, J.
dhk/rsh
T.C.A No. 245 of 2011
12.04.2022
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