P.PANJURAJAN,SIVAKASI vs. DCIT, CC-2,, MADURAI
आयकर अपीलीय अधिकरण ’डी’न्यायपीठ चेन्नई में।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘D’ BENCH, CHENNAI
माननीय श्री मनु कुमार गिरि, न्यागयक सदस्य एवं माननीय श्री एस.आर.रघुनाथा ,लेखा सदस्य के समक्ष ।
BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER
आयकरअपील सं./ITA Nos.277/Chny/2020
Assessment Year: 2008-09. P.Panjurajan,
No.74A, velayutham Road,
Sivakasi,
Tamil Nadu-626 123. [PAN:AHIPP5789J]
Vs. Deputy Commissioner of Income Tax,
Corporate Circle-2,
Madurai.
(अपीलार्थी/Assessee)
(प्रत्यर्थी/Respondent)
अपीलार्थी की ओर से/ Assessee by :
Mr. D. Anand, Advocate
प्रत्यर्थी की ओर से /Respondent by : Mr. ARV Sreenivasan, IRS, CIT
सुनवाई की तारीख/Date of Hearing
: 25.06.2025
घोषणा की तारीख /Date of Pronouncement
: 30.06.2025
आदेश / O R D E R
PER MANU KUMAR GIRI (Judicial Member)
This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-1, Madurai [CIT(A)] dated 20.11.2019 for Assessment Year 2008-09. 2. Brief facts:
The appellant is one of the promoters of M/s Sony Fireworks Group, which includes
M/s Chindia Granities P Ltd, M/s Vinayaga Fireworks Industries etc. The appellant is engaged in the business of manufacturing and trading of fireworks in Sivakasi. A search u/s 132 of the Income Tax Act, 1961 was carried out on 21.10.2008 in case of Sony Fireworks P Ltd. Subsequently, scrutiny assessment for assessment year
2008-09 was completed u/s 143(3) r.w.s.153A on 27.12.2010. Subsequently, an information was received that the appellant had sold a property on 08.10.2007 for Rs.5,40,000/- having market value/guideline value of Rs. 14,80,535/-. On verification of statement of affairs of the appellant as on 31.03.2007 and 31.03.2008 filed, the Assessing Officer found that there was no variation in the value of land admitted. To verify this aspect assessment was reopened u/s 147 and notice u/s 148 dated 13.03.2013 was issued.
In response, the appellant filed a letter on 27.11.2013, requesting to treat the return of income already filed on 31.12.2009 as the return of income filed in response to notice u/s 148. The assessment was completed u/s 143(3) r.w.s.147 on 27.03.2014 adding Rs. 10,16,000/- u/s 69 of the Act….”
Aggrieved by this order, the appellant filed the present appeal.
Further, the appellant filed the appeal against the order under section 143(3) of the Act dated 27.03.2014 before the Ld. CIT(A) wherein the assessee failed to bring on record any documentary evidence to contradict the cash receipt issued by the vendor. Accordingly, the assessment was confirmed on merits against which assessee is in further appeal before us. 4. At the outset, Ld. Counsel for the appellant submitted that in the case of vendor, a different Ld. CIT(A) vide his order dated 27.05.2016 had allowed the appeal of the vendor by quashing the entire reassessment proceedings as there is no independent application of mind on the documents sent by DCIT, Central Circle. The ld. Counsel also filed the copy of the order dated 27.05.2016 passed by the different CIT(A) in the case of a vendor on record. He also filed the copy of the affidavit i.e; joint affidavit dated 07.08.2014 of the vendor. The order dated 27.05.2016 passed by ld. CIT(A) in the case of a vendor records as under:
“…..3.3 I have considered the submissions of the representative. Admittedly, the appellant entered into a sale agreement on 29.06.2007 for the sale of the property at a sale consideration of Rs.9,85,200 and received Rs.50,000/- as advance. It is true that the appellant issued a cash receipt dated 10.07.2007 to Shri P. Panjurajan because the appellant executed power of attorney to him on the same date and the appellant could always claim that no money was received from Shri P.Panjurajan and, therefore, Shri
P.Panjurajan took a cash receipt from the appellant. Subsequently, cheques were paid on three different dates for Rs.9,66,000/- and the cash paid by Shri P.Panjurajan must have been taken back by Shri P.Panjurajan either before or after the issue of cheques to the appellant. It is possible that Shri P. Panjurajan could not explain the source for cash payment of Rs.9,66,000/- on 10.07.2007 and, therefore, paid out of his accounted income and subsequently he issued cheques and got back the money from the appellant. This is because as per written sale agreement dated 29.06.2007, the appellant could not claim more than Rs.9,85,200/- towards sale of property. However, the appellant has already admitted Rs. 14,80,535/- as deemed sale consideration by applying sec. 50C and, therefore, the Assessing Officer could not have reopened the assessment. I accept the plea of the representative that a perusal of the reasons recorded by the Assessing Officer shows that he has blindly and faithfully followed the letter received from the DCIT, Central
Circle, Madurai, without independently applying his mind to the sale agreement and other, documents as narrated above. Since the appellant had already admitted Rs. 14,80,535/- as deemed sale consideration and even if the appellant had received Rs.9,85,200/- as per sale agreement, there is no income escaping the assessment. The cash receipt dated
10.07.2007 was issued only to prevent the appellant from claiming the amount again from Shri P.Panjurajan. If the appellant had actually received the cash on 10.07.2007 it means that Shri P.Panjurajan paid out of his unaccounted money and he should be assessed to tax on this amount under the head other sources. In any case, the appellant had no right to receive more than Rs.9,85,200/- as per the sale agreement and, therefore, the assessment could not have been reopened. I, therefore, cancel the entire reassessment proceedings as there is no independent application of mind on the documents sent by DCIT, Central Circle and Instead the Assessing Officer blindly followed the inference taken by the DCIT, Central
Circle, Madurai…..”
Per contra, the ld.DR vehementely relied upon the impugned order and stated that the order of the CIT(A) in the case of vendor was not filed with the ld. CIT(A) in the present case. She pleaded for the dismissal of the assessee’s appeal. 6. We have heard the rival submissions and perused the copy of the order dated 27.05.2016 passed by the different CIT(A) in the case of a vendor on record. We also noticed that the DCIT, Central Circle i.e; AO of the present case had sent documents to the AO of the vendor whose order has been quashed by the different CIT(A) holding that the entire reassessment proceedings as there is no independent application of mind on the documents sent by DCIT, Central Circle. We also find that the order dated 27.05.2016 passed by ld. CIT(A) in the case of a vendor has not been further challenged by the revenue meaning thereby, the same has attained finality. Now pursuing the same controversy in the present case is not justified when vendor case is final. The Hon’ble Supreme Court in the case of Commissioner of Income-tax v. Rao Thakur Narayan Singh [1965] 56 ITR 234 (SC) held that it was established that once an appellate authority renders a final decision on specific items of income, the tax department cannot reopen the same items in subsequent reassessment proceedings. The court underscored that such attempts would violate the principle of legal finality, thereby ensuring judicial decisions are binding and immune to repetitive harassment or reassessment. By corollary, the ratio of the above judgment is equally applicable in this case. Hence, we delete the addition. 7. Since, we have deleted the addition, other legal issues are become infructuous. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 30th , day of June, 2025 at Chennai. (एस.आर.रघुनाथा)
(मनु कुमार गिरि)
(S. R. RAGHUNATHA)
लेखा सदस्य / ACCOUNTANT MEMBER
(MANU KUMAR GIRI)
न्यागयक सदस्य / JUDICIAL MEMBER
चेन्नई Chennai: दिन ांक Dated : 30-06-2025
KB/-
आदेश की प्रततललपप अग्रेपषत /Copy to :
1. अपील र्थी/Assessee
2. प्रत्यर्थी/Respondent
3. आयकरआयुक्त/CIT, Chennai/Coimbatore/Madurai/Salem.
4. दिभ गीयप्रदिदनदि/DR
5. ग र्डफ ईल/GF