T.V.MURALI,TRICHY vs. ACIT CENTRAL CIRCLE 1(1), TRICHY

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-19, Chennai, dated 06.07.2017 and pertains to assessment year 2008-09.

No one appeared for the assessee even after service of notice by RPAD. Therefore, we heard Ld. Departmental Representative and proceeded to dispose of the appeal on merit.

Shri S. Bharath, the Ld. Departmental Representative, submitted that there was search in the premises of the assessee. According to the Ld. D.R., the seized material shows payment of ₹13,50,000/- made to one Shri D. Srinivasa Perumal on different dates. The assessee explained before the Assessing Officer that the agricultural lands were purchased in his name and in the name of his wife Smt. Poornima Murali through the above said D. Srinivasa Perumal. According to the Ld. D.R., the Assessing Officer found that there was a difference of ₹6.91 lakhs with regard to payment made to D. Srinivasa Perumal. The assessee could not explain the difference of ₹6.91 lakhs. According to the Ld. D.R., the assessee could not explain the perforated pad found at the residence of the assessee. In the absence of any explanation regarding the payment of ₹13,50,000/-, the difference amount of ₹6,91,000/- was assessed as unexplained investment.

We have considered the submission of Shri Bharath, the Ld. Departmental Representative and perused the relevant material available on record. The material found during the course of search operation indicates a payment of ₹13,50,000/- made to one Shri D. Srinivasa Perumal. The assessee explained before the Assessing Officer with regard to payment of ₹6,59,000/- on different dates. With regard to balance of ₹6,91,000/-, the assessee explained before the Assessing Officer that Shri D. Srinivasa Perumal is not co-operating. The Assessing Officer without examining the said Shri D. Srinivasa Perumal, observed that it is the responsibility of the assessee to explain the difference of ₹6,91,000/- with regard to payment made to Shri D. Srinivasa Perumal. The CIT(Appeals) also confirmed the addition made by the Assessing Officer on the ground that mere assertion of buying an adjacent piece of land is not sufficient to explain the contents of the seized material.

The fact remains that the material discloses the payment made to Shri D. Srinivasa Perumal. However, the Assessing Officer has not taken any pain to examine Shri D. Srinivasa Perumal. No doubt, it is the responsibility of the assessee to explain the material found during the course of search operation. But, when the assessee explained that the payment was made for purchase of agricultural lands at Thirupattur Village, and he could not get the co- operation of the recipient, namely, Shri D. Srinivasa Perumal, this Tribunal is of the considered opinion that the Assessing Officer ought to have exercised the power conferred on him under Section 131 of the Income-tax Act, 1961 (in short 'the Act') by issuing summons. Since such an exercise was not done, this Tribunal is of the considered opinion that the matter needs to be re-examined. Accordingly, the orders of both the authorities below are set aside and the addition of ₹ 6.91 lakhs is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and also examine the said Shri D. Srinivasa Perumal 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.