ITO NCW 22 (5), TAMBARAM vs. K S VELUSAMY, TAMBARAM

This appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) 10, Chennai dated 31.10.2017 relevant to the assessment year 2012-13. The main ground raised in the appeal of the Revenue is that the ld. CIT(A) has wrongly invoked the provisions of Rule 46A though the assessee has not furnished any additional evidence during appellate proceedings and wrongly allowed the expenditure.

Brief facts of the case are that the assessee is an individual carrying on business in real estate under the name and style of M/s. SVS Enterprises, Tambaram. A survey under section 133A of the Income Tax Act 1961 [“Act” in short] was conducted in the assessee's business premises on 30/3/2012 and the assessee admitted a total undisclosed income of ₹.3,35,40,100/- for the assessment years 2010-11 to 2012-13. The entire income admitted by the assessee was income from his business. The assessee had purchased a land for business for a consideration of ₹.2,85,00,000/- declaring a total net profit of ₹.3,61,15,693/ - from real estate business in 3 years i.e., assessment years 2010-11 to 2012-13. The assessee had not filed any balance sheet or statement of affairs disclosing his investments in movable and immovable assets. Based on the findings of the Assessing Officer from the impounded materials during survey proceedings, in the assessment proceedings, the Assessing Officer has arrived at the total net profit for the three assessment years. Considering the total amount of receipts as per impounded materials and proportionate amounts for the expenses claimed by the assessee, the Assessing Officer computed the assessed income at ₹.3,46,78,120/- for the assessment year under consideration and completed the assessment accordingly.

The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee, facts of the case as well as second remand report of the Assessing Officer, the ld. CIT(A) directed the Assessing Officer to recomputed the total income after giving the relief as suggested by the Assessing Officer in the second remand report dated 19.06.2017.

Aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR vehemently argued that once opportunity of being heard to the assessee was given by the Assessing Officer during the course of first remand proceedings , the ld. CIT(A) has wrongly invoked the provisions of Rule 46A calling for second remand report in the absence of any cogent material or additional evidence available before the ld. CIT(A) and thereby allowing expenditure and pleaded that the order of the ld. CIT(A) should be set aside.

Despite service of notice RPAD on record, none appeared on behalf of the assessee. Hence, we proceed to decide the appeal on merits after hearing the ld. DR.

We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below including paper book. In this case, the assessee has not maintained any regular books of accounts. During the course of survey under section 133A of the Act certain incriminating materials were impounded. Based on the survey materials, the Assessing Officer completed the assessment. Based on further reference from the Investigation Wing, the Assessing Officer re-opened the assessment and completed the assessment under section 147 of the Act.

In the result, the appeal filed by the Revenue is dismissed. Order pronounced on the 20th November, 2018 at Chennai.