SHRI TAMIZHMALARSELVAN,PONDICHERRY vs. ITO, PONDICHERRY

Shri Philip George represented on behalf of the assessee and Shri N. Nandakumar represented on behalf of the Revenue.

It was submitted by the Ld. AR that the assessee was a General Power of Attorney holder for Shri M. Radhakrishnan, Shri R. Ramanujam and Shri R. Sadagopan in respect of land situated at No.33, Kurumampattu Village. It was the submission that the said land has been cut into plots and the same was sold by the assessee on behalf of the 3 owners, as the assessee was in the business of sale of plots and a cable TV operator. It was the submission that the total sale consideration was Rs.30,50,000/-, which was deposited into the savings bank account in ING Vysya Bank on various dates. The assessee had produced the ledger accounts of the said 3 persons in the assessee’s books, wherein it showed that the assessee had paid the amount of Rs.30,50,000/- to the land owners. It was the submission that summons U/s. 131 of the Act was issued to the land owners and Shri R. Ramanujam and Shri M. Radhakrishnan appeared and confirmed having received a sum of Rs.15,00,000/- from the assessee. However the 3rd person namely Shri R. Sadagopan had not appeared before the Assessing Officer. Consequently the Assessing Officer had treated the balance of Rs.15,50,000/- as the business income in the hands of the assessee. On appeal, the Ld. CIT(Appeals) had confirmed the addition.

It was submitted by the Ld. AR that the amount of Rs.15,50,000/- had also been paid to the owners.

Shri R. Sadagopan was unable to attend, as he was not well. It was the submission that an affidavit dated 30.11.2009 had also been filed, wherein the 3 land owners had confirmed that the full payment was settled by the assessee and there were no dues from the assessee. It was the submission that the bank statement of Shri R. Sadagopan jointly maintained with his wife Smt. Premavathi was also produced which showed the deposits of Rs.5 lakhs and Rs.10 lakhs respectively on 19.02.2007 and 28.02.2007. It was the submission that the addition made by the Ld. Assessing Officer and confirmed by the Ld.CIT(Appeals) may be deleted or in the alternative the issue restore to the file of the Ld. Assessing Officer for re-adjudication.

We have considered the rival submissions. Perusal of the assessment order, clearly shows that 2 of the owners of the property have confirmed having received the money due on the sale of the plots from the assessee. On perusal of the remand report filed by the Ld. AO being ITO, Ward-4, Puducherry before the Ld.CIT(Appeals) which is dated 02.03.2016 shows that the Ld. AO has accepted the fact that the affidavit has been filed before the Ld.AO and that Shri R. Sadagopan was unable to appear in response to the summons due to paralytic attack. It is further noticed from page 3 of the remand report that the factum of payment to Shri R. Sadagopan of Rs.15 lakhs along with his bank account statement were produced before the Ld.AO. It is noticed that the Ld.AO has not considered any of these details when passing the assessment order. On perusal of the order of the Ld.CIT(Appeals) further shows that the remand report of the Ld.AO has also not been considered by the Ld.CIT(Appeals). This being so, in the interest of natural justice and as substantial evidence are available before the Ld.AO which have not been rebutted by the Ld.AO, the issues in the appeal are restored to the file of the Ld.AO for re-adjudication after granting the assessee adequate opportunity to substantiate his case.

In the result, the appeal of the assessee is partly allowed for statistical purposes.