ACIT, CHENNAI vs. M.A.RAHIM, CHENNAI

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

ITA No. 2352/Mds/2015. :- 2 -:

2013 passed u/s.143(3) and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).

The Revenue has raised the following grounds:- 2.

‘’2.1 The ld. CIT(A) ought not to have directed the deletion made on account of unexplained credit of �43,00,000/-

2.2 The ld. CIT(A) ought not to have appreciated that the assessee before Assessing Officer has failed to identify the original seller and had not produced any credible evidence that the cost was met by one Shri. Abbas in cash.

2.3 ld. CIT(A) ought not to have afforded an opportunity to the Assessing Officer admitting fresh evidence as to the contribution of capital for purchase of property u/s. Rule 46A’’.

The Brief facts of the case, the assessee is an individual and 3. in the business of whole sale dealer of fruits and fruits commission agent and filed Return of income for the assessment year 2012-13 on 30.09.2012 admitting total income of �27,62,120/-. Subsequently notices u/s.143(2) of the Act dated 08.08.2013 and 142(1) of the Act dated 22.05.2014 were issued. In compliance to notices, the ld. Authorised Representative of assessee appeared from time to time and filed information and furnished clarifications. The ld. Assessing Officer found in assessment proceedings that the assessee is engaged in selling of fruits and having a fruit shop at Koyambedu Market. On perusal of the saving bank account vide customer I.D. No.016062156,

ITA No. 2352/Mds/2015. :- 3 -: a sum of �43,00,000/- was credited on 18.11.2011 with narration ‘CUBL’ and Cheque No.536479. Subsequent to credit, the assessee has issued a cheque to ‘NFA International’ �43,00,000/-. The Assessing Officer called for clarification for �43,00,000/- credited in the bank account. The ld. Authorised Representative of assessee filed explanations that assessee has obtained power of attorney of M/s. R.

Bhuvaneswari of Chennai for sale of property vide PAO executed on 18.03.2011 for immovable property situated at Madanandapuram, Chennai 600 116, and the property was subsequently sold to Shri.

Ravikumar of Moulivakkam vide PAO on 17.11.2011 for a consideration of �43,00,000/-. This consideration was credited to the assessee’s bank account. The assessee has clarified that the transaction of land investment was made by assessee’s relative Mr. Abbas of Kodaikanal and the said amount was returned to him after sale and the role of the assessee carried out on behalf of the Mr. Abbas and assessee is only facilitator to the transaction. In the assessment proceedings, the ld. Assessing Officer wanted to know whether original seller has admitted capital gains in her hands and assessee could not locate her and submit any particulars. The Assessing Officer is of the opinion that assessee failed to identify the original seller and the cost of investment stated to be met by Mr. Abbas in cash without any credible evidence.

Further, the Assessing Officer ignored the confirmation letter under ITA No. 2352/Mds/2015. :- 4 -: suspicion and treatied the transaction as unrealistic as amount of �43,00,000/- was transferred to M/s. NFA International on 29.11.2011 from assessees bank. The ld. Assessing Officer alleged that the amount pertains to assessee and used for construction of residential house and disbelieved the transaction of Mr. Abbas and assessee and estimated cost of property as �38,50,000/- in the hands of the assessee and determined short term capital gains of �4,50,000/-.

Further, the ld. Assessing Officer in haste and conjecture treated �43,00,000/- credited in the bank account as unexplained investment as same was not supported by valid proof and no satisfactory explanations filed and assessed total income of �1,04,12,130/- and raised demand. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals).

In the appellate proceedings, the ld. Authorised 4.

Representative of assessee argued the grounds and substantiated his arguments on the findings of the ld. Assessing Officer and relevant circumstances under which property was sold and assessee is only a facilitator of sale.. The ld. Authorised Representative furnished explanations and written submissions referred at page 4 of Commissioner of Income Tax (Appeals) as under:- a) ‘’Copy of order u/s.143(3) for the A.Y.2012-13 in the case of Mr. Abbas of Kokaikanal (PAN AFSPA2765H) dated 25.03.2015. On perusal

ITA No. 2352/Mds/2015. :- 5 -: of the assessment order passed by ITO Ward-I, Dindigul, it is seen that the AO has considered that profit on sale of property (₹3,OO,OOO/-) as taxable in the hands of the assessee, Mr. M. Abbas. b) Confirmation and ownership of the transaction by Mr.M. Abbas dated 05.02.2015, originally filed before the AO. c) The appellant has further submitted Axis Bank Account statement, wherein the sales consideration of ₹43,OO,OOO/- has been transferred by the appellant to Mr. Abbas, and is reflected in the Bank Statement as under:

Sl.No. Date of Transaction Cheque No. Amount 1. 03.03.2015 365125 15,00,000/- 2. 05.03.2015 365126 15,00,000/- 3. 09.03.2015 365127 13,00,000/- Total 43,00,000/- d) Copy of Leger A/c of Mr. Abbas in the books of the appellant reflecting the above transactions’’.

The contention of the ld. Assessing Officer was that the investment in property by Mr. Abbas in cash is not supported by any evidence and PAO executed in the name of the assessee does not mention any consideration. The ld. Commissioner of Income Tax (Appeals) considering the written submissions and the findings of the ld. Assessing Officer and clarification duly supported by the evidence forming part of assessment record observed at para 4.5 and 4.6 of his order and deleted the addition as under:-

ITA No. 2352/Mds/2015. :- 6 -:

‘’4.5. It has been further submitted by the appellant that sale consideration will not find a mention in the PAO, for the simple reason that if the consideration is mentioned, it will lose the character of PAO and will become a deed of conveyance liable or a higher stamp duty. Hence, It has been stated that the appellant was a mere facilitator on behalf of his relative and does not stand to conceal or gain anything out of this transaction.

4.6 I have gone through the evidences furnished by the appellant. It is clear that the relative of the appellant Mr. Abbas has accepted the ownership of the transaction, disclosed the capital gains in the Return of Income, which has suffered tax. It is also seen that the appellant has returned the amount to the original investor through banking channels. The identity of the investor, his creditworthiness and genuiness of the transaction is therefore not in doubt. On appreciation of the evidences filed and the facts and circumstances of the case, I do not find any merit in the stand taken by the Assessing Officer. The addition of �43,00,000/- on account of unexplained credit, is therefore, deleted’’.

Aggrieved by the Commissioner of Income Tax (Appeals) order, the Revenue has assailed an appeal before us.

Before us, the ld. Departmental Representative vehemently 5. argued that the ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition made on account of unexplained credit ₹.43,00,000/- and the assessee has failed to prove the identity of original seller in the assessment proceedings. Further, the ld. Commissioner of Income Tax (Appeals) has not provided proper opportunity to the ld. Assessing Officer in respect of fresh submissions made in the appellate proceedings. The Departmental Representative

ITA No. 2352/Mds/2015. :- 7 -: further alleged that the original transaction of property was not brought on record by assessee. Therefore source is treated as unexplained credit in the hands of the assessee and pleaded for setting aside the Commissioner of Income Tax (Appeals) order.

ITA No. 2352/Mds/2015. :- 8 -: available to the Assessing Officer in the assessment proceedings and there is no fresh evidence filed which the Revenue has disputed.

Further, the details of original seller was produced alongwith documentary evidence and confirmation letter before ld. Assessing Officer. The ld. Authorised Representative referred to the copies of PAO in favour of the assessee executed by Ms. R. Bhuvaneswari on 18.03.2011 and copy of sale deed executed on 17.11.2011 referring to said POA at page 1 of the sale deed and also purchaser has issued the pay order no.536479, dated 16.11.2011 from City Union Bank Ltd, Anna nagar Branch at page No. 5 of the sale deed. The ld. Authorised Representative drew our attention to the Bank statement were sale transaction amount was credited on 18.11.2011 and pay order number tallied with information of sale deed, when ld. Departmental Representative was controvert with valid confirmation the Revenue could not substantiate with any further arguments. The ld. Commissioner of Income Tax (Appeals) has provided the ld. Assessing Officer form 51 referred at page 2 of Commissioner of Income Tax (Appeals) order at para 3 as under:-

‘’Aggrieved by the above additions to his total income, the appellant preferred this appeal. The Income Tax Non Statutory Form -51 (in short, ITNS-51) was sent to the Assessing Officer on 12.10.2015. In the absence of a response, it is taken that the Assessing Officer has nothing contrary to report and does not wish to be heard in ITA No. 2352/Mds/2015. :- 9 -: person. The appeal was fixed for hearing by issuance of ITNS-37 dated 06.10.2015’’.

So, considering the apparent facts, evidence form part of assessment record and no fresh documents are submitted in the appellate proceedings, we are of the opinion that the Commissioner of Income Tax (Appeals) has verified the claim and considered the explanations of the assessee duly supported by provision of law. Therefore, we are not inclined to interfere with the order of Commissioner of Income Tax (Appeals) order and upheld the same.

Order pronounced on Wednesday, the 27th day of April, 2016, at Chennai.