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Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI
Before: SHRI ABRAHAM P. GEORGE & SHRI G. PAVAN KUMAR
आदेश / O R D E R
PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The appeal filed by the assessee is directed against order of the Commissioner of Income-tax (Appeals)-13, Chennai in dated 02.03.2016 for the assessment year
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2008-2009 passed u/s.143(3) and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).
The assessee has raised the following grounds of appeal:- 2.
‘’2. The Commissioner of Income Tax (Appeals) failed to consider the fact that all additions to Income relates to 2007-2008 Assessment year and not 2008-2009 Assessment Year.
3. The Commissioner of Income Tax (Appeals) ignored the fact that all the sources relate to 2007 -2008 Assessment Year were all credited to bank account during 2007-2008 Assessment Year.
4. The Commissioner of Income Tax (Appeals) did not look in to the submission that the amount credited to the bank account in 2007 - 2008 Assessment Year were reflected in the bank account as closing balance as on 31.03.2007.
The Commissioner of Income Tax (Appeals) as filed to look in to the fact the bank balance as on 31.03.2007 (relating to 2007 - 2008 A/Y) were utilized for investment in 2008 - 2009 Assessment Year’’.
The Brief facts of the case are that the assessee is a salaried employee and filed the Return of income electronically on 08.08.2008 with total income of �6,05,000/- and the Return of income was processed u/s.143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and notices u/s.143(2) and 142(1) of the Act were issued. In compliance to notice, the ld. Authorised Representative of assessee appeared from time to time and submitted details. The ld. Assessing Officer based on the AIR information found that the assessee has made investments in mutual funds in the ITA No. 1478/Mds/2016 :- 3 -:
financial year 2007-2008 and the ld. Authorised Representative was asked to produce sources of investments in mutual funds alongwith bank statements, cash flow statement and supporting evidences and the same were produced. The ld. Authorised Representative explained that the investments in mutual funds are due to reinvestment of units or redemption of units of the same mutual fund company but under different schemes and supported with copy of mutual fund statement of various funds. Further, the ld. Assessing Officer perused the Axis Bank statement of the assessee and found that an amount of �49,89,139/- was utilized for investments and called for the explanations with the sources of money and the same was furnished through letter dated 29.11.2010 with supporting evidence. The ld. Assessing Officer disbelieved the agricultural income, rental income, salary income, gift from father and wife and income/saving from the overseas employment and treated as unexplained investments u/s.69B of the Act and sought clarifications on Axis Bank account and passed order u/s.143(3) of the Act and determined total income of �38,51,380/- and raised demand. Aggrieved by the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals).
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In the appellate proceedings, the ld. Authorised Representative explained that the assessee is having agricultural income source generated out of 7 ½ acres allocated to assessee share on partition in the year 1999 but due to non submission of information the source was disbelieved. In respect of source of rent and salary income, the wife of the assessee is assessed to Income Tax from the year 1990 and is in receipt of rental income and disclosed in the Income Tax Returns and ld. Commissioner of Income Tax (Appeals) deleted the addition to the extent of �2,59,000/-. Further the assessee in earlier years worked in Australia and the amount has been brought to India. The assessee could not substantiate with the details of transfer of funds to India with Bank account for �7,50,000/- and addition was confirmed. Further, the contentions of the assessee that the ld. Assessing Officer is not justified in treating unexplained investments under Sec. 69B of the Act. In regard to the opening balance of �49,89,139/- as appearing in the Axis Bank account and the sources for opening balance being sale of agricultural land and gift received from father etc relating to earlier years. The ld. Commissioner of Income Tax (Appeals) with above observations has passed the order and partly allowed the appeal. Aggrieved by the Commissioner of Income Tax (Appeals) order, the assessee assailed an appeal before Tribunal.
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5. Before us, the ld. Authorised Representative argued the grounds, reiterated the submissions made in the assessment proceedings and appellate proceedings and explained that the ld. Commissioner of Income Tax (Appeals) erred in not considering the submissions of the assessee that the opening balance amount source is related to earlier assessment year and whereas the ld. Commissioner of Income Tax (Appeals) partly allowed the appeal and failed to consider the submissions on additions pertaining to assessment year 2007-2008 and not the current assessment year which in dispute. The Bank balance in AXIS Bank with opening balance as on 01.04.2007 are accumulated amount of sale of agricultural land, savings and gifts etc and the same source was utilized for investments in mutual funds in the financial year 2007-2008 and prayed for allowing the appeal.
Contra, the ld. Departmental Representative relied on the 6. orders of Commissioner of Income Tax (Appeals) and vehemently opposed to the grounds.
We heard the rival submissions, perused the material on 7. record. The main contention of the ld. Authorised Representative that the additions made by the ld. Assessing Officer are in respect
ITA No. 1478/Mds/2016 :- 6 -: of opening balance as on 01.04.2007 in the Axis Bank of the assessee. The ld. Assessing Officer not satisfied with submissions of the assessee made addition as unexplained investments u/s.69B of the Act. Further, in the appellate proceedings, the ld. Authorised Representative argued that the ld. Assessing Officer is not justified in treatment of opening balance of Bank account, even the ld. Commissioner of Income Tax (Appeals) has not dealt on the disputed issue raised by the assessee. The ld. Authorised Representative further drew our attention to the copy of Bank account disclosing the opening balance of �.49,89,138/-. The assessee has utilized the said money for the purpose of investment in mutual funds and also there is no findings by the appellate authority on the disputed issue on year of taxability. The Commissioner of Income Tax (Appeals) has to consider submissions on every point of dispute and pass a speaking order. Whereas, the order passed by the Commissioner of Income Tax (Appeals) is not properly adjudicated and should be decided afresh. We rely on the decision of Supreme Court in the case of Sahara India vs. CIT & Anr.
(300 ITR 403) were it was held that "an administrative order has to be consistent with the rules of natural justice" and similar view was considered by the Delhi Bench of the Tribunal in the case of M/s.GAP International Sourcing
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India (P) Ltd. vs. DCIT (8 ITR 0177) and M/s. Adobe Systems India Private Ltd. v. Addl. CIT in dated 21.01.2011. Considering apparent facts, material evidence and judicial decisions, we are inclined to the remit the disputed issue back to the file of Commissioner of Income Tax (Appeals) to pass a speaking order on merits and the assessee shall be provided with adequate opportunity of being heard before passing the order on merits. The grounds of the assessee are allowed for statistical purpose.
. In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced on Wednesday, the 17th day of August, 2016, at Chennai.