MR. S. SAMPATH KUMAR,CHENNAI vs. ITO, CHENNAI

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ITA 2234/CHNY/2016Status: DisposedITAT Chennai31 January 2017AY 2008-094 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that an admission or additional income offered for one assessment year cannot be the basis for making additions for a separate assessment year without specific material.

What were the facts?

During a survey operation, assessees offered additional income for AY 2009-10. The Assessing Officer used this to estimate income for AY 2008-09, despite no specific material found for the earlier year.

What were the issues?

Whether income offered for one assessment year can be used to estimate income for a prior assessment year in the absence of specific material for the prior year.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH

Hearing: 05.01.2017Pronounced: 31.01.2017

Heard together (2 matters)

ITA No. 2233/Mds/2016
ITA No. 2234/Mds/2016

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R आदेश आदेश PER N.R.S. GANESAN, JUDICIAL MEMBER: Both the appeals of the two independent assessees are directed against the respective order of the Commissioner of Income Tax (Appeals) for the assessment year 2008-09. Since common issue arises for consideration in both the appeals, we heard the same together and disposing off the same by this common order.

2.

Shri F.C. Jain, the Ld. representative for the assessee submitted that there was survey in the premises of the assessees on 10.04.2011. Both the assessees offered additional income for the assessment year 2009-10. No material was found either for the assessment year 2008-09 or 2009-10. In the absence of any material, the Assessing Officer by taking the additional income voluntarily offered by the assessees for the assessment year 2009-10 estimated the income for the assessment year 2008-09. According to the Ld. representative, the additional income offered by the assessees for the assessment year 2009-10 cannot be a basis for making addition for the assessment year 2008-09, in the absence of any material for escapement of income for the assessment year 2008-09. According to the Ld. representative, the Assessing Officer cannot make any addition on the basis of income offered by the assessees for the assessment year 2009-10.

3.

We heard Shri B. Sahadevan, the Ld. Departmental Representative also. According to the Ld. D.R., during the course of survey operation, the Revenue authorities found immovable properties, copies of bank statement etc. The assessee has not produced any books of account. Therefore based upon the additional income offered by the assessees for the assessment year 2009-10, the Assessing Officer estimated the income reasonably.

4.

We have considered the rival submissions on either side and perused the material available on record. Admittedly there was a survey operation in the premises of the assessees on 10.04.2011.

1.

During the course of survey operation, the Revenue authorities found certain material for the assessment year 2009-10, on the basis of which additional income was offered by the assessees for the assessment year 2009-10. The Assessing Officer reopened the assessment for the assessment year 2008-09. In the absence of any books of account, the Assessing Officer estimated the taxable income on the basis of the income offered by the assessees for the assessment year 2009-10. This Tribunal is of the considered opinion that for the purpose of making addition, there should be some material available on record. Merely because the assessees offered additional income for the assessment year 2009-10 that cannot be a basis for making addition for the assessment year 2008-09. Each assessment year is separate and distinct. Therefore admission made by the 4 I.T.A. No. 2234/Mds/2016 assessee or additional income offered by the assessee for one assessment year cannot be a basis for making addition for another assessment year. In other words, the additional income offered by the assessees for the assessment year 2009-10 cannot be a basis for making addition for assessment year 2008-09. Therefore this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of the lower authorities are set aside and the additions made by the Assessing Officer are deleted.

5.

In the result, the appeals of the assessees stands allowed.

Order pronounced on 31st January, 2017 at Chennai.

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