VASUDEVAN vs. THE INCOME TAX OFFICER

T.C.A. No. 503 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 14.02.2022 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD T.C.A. No. 503 of 2020 A. Vasudevan 30B Amarjothi AS Nagar, Nallur, Tirupur – 641 606 .. Appellant Versus The Income Tax Officer Ward 1(5) Tirupur .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 06.02.2019 passed by the Income Tax Appellate Tribunal, Chennai “B” Bench, in I.T.A.No. 2215/Chny/2013. For Appellant : M/s.A.L.Gandhimathi For Respondent : Mrs.K.G.Usharani Junior Standing Counsel 1/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) Heard both sides and perused the materials placed before this court. 2.This is an appeal filed by the assessee challenging the order dated 06.02.2019 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in I.T.A.No. 2215/Chny/2013, relating to the assessment year 2009-10. 3.The appellant suggested the following substantial questions of law for consideration of this court: “1.Whether on the facts and circumstances of the case, the addition of Rs.46,50,000/- has been made without considering that the deposit of cash is in the nature of return of money advanced in prior assessment years; and has no connotation to the income or expenditure incurred by the assessee during the Assessment Year 2009-10? 2.Whether on the facts and circumstances of the case, the addition of Rs.12,50,000/- has been made without considering that the deposit of cash is in the nature of return of money advanced in prior assessment years; and has no 2/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 connotation to the income or expenditure incurred by the assessee during the Assessment Year 2009-10? 3.Whether on the facts and circumstances of the case, the lower authorities were not right in making the addition of Rs.6,00,000/- without considering that the said cash deposit was made by the Shri.Palanisamy, who was a business associates of the assessee? 4.Whether the finding recorded by Tribunal is perverse and not worth of being sustained as the evidence on record and specific submissions made on behalf of appellant, have not been considered at all? 5.Whether the denial of exemption u/s.54F of the fact has been made in error, without considering the prevailing law and circumstances of the case that the reinvested property was constructed only with the money obtained from the sale and that, the new residential house was for the joint living of the husband and the wife? 6.Whether as per the facts of the case, to safeguard the interest of both sides, will it be appropriate to send issue to the file of the Assessing Officer to adjudicate the same afresh on merit?" 4.The brief facts of the case are as follows: The appellant / assessee filed his return of income for the assessment year 2009-2010 on 09.07.2009 admitting a total income of Rs.3,68,570/- and the same 3/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 was processed under Section 143(1) of the Income-tax Act, 1961. While so, he was issued with a notice dated 03.09.2010 under Section 143(2), calling upon him to submit his explanation. In response to the same, the appellant's authorised representative appeared and submitted the details. After verification of the same, the Assessing officer passed the assessment order dated 30.12.2011 making certain additions. Challenging the same, the appellant / assessee filed an appeal before the Commissioner of Income Tax (Appeals), who dismissed the appeal and confirmed the assessment order passed by the assessing officer, by order dated 30.10.2013. Aggrieved by the same, the appellant / assessee went on further appeal, which was also dismissed by the Tribunal, by order dated 06.02.2019. Therefore, this tax case appeal by the appellant / assessee. 5.To answer the issues involved herein, this court is inclined to look into the findings recorded by the Tribunal in the order impugned herein, which read as follows: I. Cash deposit of Rs.46,50,000/- in Catholic Syrian Bank “The assessee claims that he advanced a sum of Rs.46,50,000/- for purchase and installation of pollution control plant during the assessment year 2008-09. The facts remains that the cheque said to be issued by the assessee was a cash cheque and money was withdrawn on the same day. Therefore, it is not known how Shri S.K.Pandian was able to return the amount in cash as 4/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 claimed by the assessee. In the absence of any details, the confirmation letter which is now available at page 9, is only an afterthought. When the assessee claimed before the Assessing Officer that due to death of Shri S.K.Pandian, he could not get any confirmation letter from Shri S.K.Pandian, it is not known how the assessee was able to get the confirmation letter, copy of which is available at page 9 of the paper-book. Therefore, the entries made in the ledger and other cash book are all afterthought. It is not supporting the case of the assessee. The assessee has no satisfactory explanation for deposit of Rs.46,50,000/- in the bank account. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.” II. Cash deposit of Rs.12,50,000/- “The assessee claims that he advanced a sum of Rs.12,50,000/- to one Shri R.Nagarajan for installation of pollution control plant. The said Shri Nagarajan was examined by the Assessing Officer on 29.12.2011. He admitted before the Assessing officer that he is only acting as real estate agent for brokerage. Even though the said Shri Nagarajan claimed before the Assessing officer during the course of examination that the money said to be received from the assessee was advanced to one proprietor of dying unit at Erode, he could not produce any evidence. For making any advance to the dying unit at Erode as claimed, there was no evidence for the claim of Shri Nagarajan that he received back from the Erode party. The said Shri Nagarajan also claimed that what was received from the assessee is only by cash and not by cheque. But, the assessee claimed before the Assessing Officer that he paid by cheque. In view of the contrary statements of Shri Nagarajan, the Assessing Officer called for clarification from Catholic Syrian Bank. The Catholic Syrian Bank clarified that the cheque issued by the assessee was encashed on the same day across the counter. Therefore, the Assessing Officer found that the document produced by the assessee is a cooked up one. Accordingly, he disallowed the claim of the assessee. The fact remains that what was paid by the assessee is through cash cheque and money was received across the counter in 5/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 Catholic Syrian Bank. There is no evidence of making payment to Erode party as claimed by Shri Nagarajan. There is no evidence of return of money by Erode Party to Shri Nagarajan. Moreover, whether Shri Nagarajan was able to repay the money to the assessee as claimed? These facts were not established by the assessee. For cash credit, the assessee has to establish the identity of party, creditworthiness of party and genuineness of transaction. In this case, even though the assessee claims that money was paid to Shri Nagarajan, the genuineness of transaction of repayment and creditworthiness of Shri Nagarajan to repay the amount was not established. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly, the same is confirmed.” III. Cash deposit of Rs.6,00,000/- “It is not in dispute that the assessee claimed before the Assessing officer that he received a sum of Rs.6,00,000/- from one Shri D.Palanisamy. However, the assessee failed to establish the identity of Shri Palanisamy, creditworthiness of Shri Palanisamy and the genuineness of transaction. In the absence of any details and failure of the assessee to establish the identity of party which is required to be established in respect of cash credit, the CIT(Appeals) has rightly confirmed the addition.” IV. Denial of exemption under section 54F “The sale of property to the extent of Rs.59,27,500/- is not in dispute. The assessee claimed exemption in respect of the property standing in the name of the assessee's wife. Now, the assessing officer found that the assessee's wife is an independent assessee. She herself claimed exemption under section 54F of the Act in respect of the very same property for investing the capital gain. Therefore, it is not known how the assessee was able to claim exemption under section 54F of the Act for the second time. The matter would stand differently in case the assessee's wife had not claimed any exemption under section 54F of the Act for investing her own capital gain. Since the assessee's wife already 6/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 claimed exemption under section 54F of the Act for investing her own capital gain, this Tribunal is of the considered opinion that the Assessing Officer has rightly confirmed the disallowance.” 6.This court is of the opinion that after considering the submissions made by the parties and analysing the entire materials placed before it, the Tribunal being the fact finding body, dismissed the assessee's appeal. Moreover, the issues involved herein are all questions of facts and the same do not involve any principle of law, warranting interference at the hands of this court. In this regard, it may be useful to refer to the decision of the Hon'ble Supreme Court in Metroark Ltd. v. CCE [(2004) 12 SCC 505], wherein it was held as under: "8. Even otherwise, the law on the subject is clear. The Tribunal is the final fact-finding authority. Unless it is shown that there is something perverse in its finding, this Court would not interfere. No authority is required for this purpose. But as a large number of authorities are cited, we refer to them: Pragati Computers (P) Ltd. v. Collector of Customs [(2000) 10 SCC 150] , Reliance Silicon (I) (P) Ltd. v. CCE [(1997) 1 SCC 215] , Asian Paints India Ltd. v. CCE [(1988) 2 SCC 470 : 1988 SCC (Tax) 201] and Collector of Customs v. Swastic Woollens (P) Ltd. [1988 Supp SCC 796 : 1989 SCC (Tax) 67]" 7.That apart, it is settled law that “a court of appeal interferes not when the judgment under attack is not right, but only when it is shown to be wrong” [Refer: 7/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 Dollar Co. v. Collector of Madras, (1975) 2 SCC 730]. 8.In such view of the matter, the tax case appeal fails and is accordingly, dismissed. No costs. (R.M.D., J.) (J.S.N.P., J.) 14.02.2022 dhk Internet : Yes

Index : Yes/No

To 1. The Income Tax Appellate Tribunal, Chennai “B” Bench. 2. The Income Tax Officer Ward 1(5) Tirupur 3. The Commissioner of Income – tax(Appeals) - II, Coimbatore. R. MAHADEVAN,

and J.SATHYA NARAYANA PRASAD

, J.

8/9 https://www.mhc.tn.gov.in/judis T.C.A. No. 503 of 2020 dhk/rk T.C.A No. 503 of 2020 14.02.2022 9/9 https://www.mhc.tn.gov.in/judis