HARICHARAN SRINIVASAN,CHENNAI vs. ITO NON CORPORATE WARD 1(3), CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -2, Chennai, dated 29.07.2016 and pertains to assessment year 2009-10.

There was a delay of 338 days in filing this appeal by the assessee before this Tribunal. The assessee has filed affidavit for condonation of delay. Having heard Sh. N. Devanathan, the Ld.counsel for the assessee and Shri B. Sagadevan, the Ld. D.R., we are of the considered opinion that there was a reasonable cause on the part of the assessee in not filing the appeal within the specified period. Therefore, the delay of 338 days is condoned and the appeal is admitted.

Now coming to merit of the appeal, the only issue arises for consideration is addition of unexplained investment under Section 69 of the Income-tax Act, 1961 (in short 'the Act').

Sh. N. Devanathan, the Ld.counsel for the assessee, submitted that the Assessing Officer made an addition of ₹14,00,000/- which was deposited in the bank account. According to the Ld. counsel, the assessee explained before the Assessing Officer that the same was received from one Shri C. Subramanian towards advance for sale of property. The assessee has produced a copy of agreement for sale. The Assessing Officer, however, recorded a finding that no confirmation letter was filed from the said Shri C. Subramanian or any documentary evidence was filed. However, according to the Ld. counsel, the assessee filed a copy of agreement before the CIT(Appeals). The CIT(Appeals) without considering the copy of agreement, rejected the claim of the assessee. According to the Ld. counsel, it is for the Revenue to prove that the assessee has no source of income. In the absence of any material, according to the Ld. counsel, the addition made by the Assessing Officer cannot stand in the eyes of law.

On the contrary, Shri B. Sagadevan, the Ld. Departmental Representative, submitted that the copy of agreement for sale was not available before the Assessing Officer. It was admittedly filed before the CIT(Appeals). According to the Ld. D.R., the CIT(Appeals) found that in the absence of confirmation from the said Shri C. Subramanian, the unregistered copy of agreement cannot be placed reliance. Therefore, according to the Ld. D.R., she confirmed the addition made by the Assessing Officer.

We have considered the rival submissions on either side and perused the relevant material available on record. A bare reading of the assessment order shows that no material was filed before the Assessing Officer and he summoned Shri C. Subramanian for personal appearance. Even though the said Shri C. Subramanian requested for adjournment, subsequently he has not turned up, therefore, the Assessing Officer completed the assessment. On appeal by the assessee, the CIT(Appeals) examined the copy of agreement and found that in the absence of details of the creditor such as bank account, PAN, etc., the copy of agreement may not carry any evidentiary value. The fact remains that Shri C. Subramanian, who was said to have advanced ₹14,00,000/- for purchase of land, was not examined by the Assessing Officer.

This Tribunal is of the considered opinion that the said Shri C. Subramanian is the right person to confirm when actually the advance was paid as claimed by the assessee. Therefore, it is necessary to examine the said Shri C. Subramanian. Accordingly, orders of both the authorities below are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter afresh in the light of the material that may be filed by the assessee and also summon the said Shri C. Subramanian for examination. The Assessing Officer shall bring on record when the advance was said to be made by Shri C. Subramanian for purchase of land and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.