ITO, CHENNAI vs. B.BHUVANESHWARI, CHENNAI

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ITA 1734/CHNY/2013Status: DisposedITAT Chennai24 July 2015AY 2008-20094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the balance sheet was not initially filed with the return. Therefore, the issue was remitted back to the Assessing Officer for fresh consideration.

What were the facts?

The assessee, a film artist, invested ₹40,00,000 in a cinema theatre. The Assessing Officer treated this as unexplained investment as the assessee's bank balance was low. The CIT(A) deleted the addition, stating the investment was reflected in the balance sheet and income was offered.

What were the issues?

Whether the investment in the cinema theatre was unexplained investment under Section 69, considering it was reflected in the balance sheet and income was offered.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ D’ BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI CHANDRA POOJARI]

आदेश / O R D E R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER

1.

This appeal by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-VI, Chennai, dated 05.06.2013 for the assessment year 2008-2009.

The Revenue has raised the following the ground:- 2.

ITA No. 1734/Mds/2013 :- 2 -:

‘’The Commissioner of Income Tax (Appeals) erred in deleting the addition made towards unexplained investment u/s.69 of the Act to the extent of ₹40,00,000/-

3.

The facts of the case are that the assessee is a film artist and filed her return of income for the assessment year 2008-09 on 10.12.2009 declaring a total income of �1,51,110/-. The return of income was processed u/s.143(1) of the Act. Later the case was selected for scrutiny by the Assessing Officer for verifying the information that the assessee had invested �60,00,000/- in an immovable property during the relevant financial year. The assessee had filed information with regard to purchase of properties for �40,00,000/- in the form of two sale deeds, one for �30,00,000/- and other one for �10,00,000/-. The property is a cinema theatre named ’Central Theatres’ situated in a village near Coimbatore by name Annur Village. The cinema theatre was equipped with all the necessary machinery and is in a running condition. The assessee had also filed copies of the savings bank accounts with ICICI bank, Alwar thirunagar branch with A/c. 23201503829. The balance as on 31.05.2007 was only �5,922/-. The Assessing Officer had observed that there was no sufficient funds in the bank account of the assessee explaining the source for the investments. The investment in the immovable property of �40,00,000/- was considered as unexplained investment u/s.69 of the Act in the hands of the assessee and was added back by the ITA No. 1734/Mds/2013 :- 3 -:

Assessing Officer. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals).

The Commissioner of Income Tax (Appeals) observed that 4.

�40,00,000/- towards purchase of the cinema theatre, which had been jointly purchased by the assessee and her husband with equal shares and accordingly, the assessee had reflected her share in the balance sheet, alongwith the cost of registration duties paid. This fact was evidenced by the balance sheet attached to the return of income and also filed before him. Since, the said investments had been reflected in the balance sheet as well as the depreciation schedule and the lease rentals from the cinema theatre were also properly credited to the Profit and Loss account, it was incorrect to treat the property either in full value of �40,00,000/- or the share of the assessee as unexplained investment u/s.69 of the Act. Accordingly, the Commissioner of Income Tax (Appeals) deleted the addition. Against this, the Revenue is in appeal before us.

None appeared on behalf of the assessee. We proceed to 5. dispose of the case after hearing the ld. Departmental Representative.

The Commissioner of Income Tax (Appeals) gave a finding that the investment of �40,00,000/- in property was reflected in the balance sheet of the assessee and the income earned from that property was ITA No. 1734/Mds/2013 :- 4 -: duly offered for taxation and being so, there is no unexplained investment u/s.69 of the Income Tax Act. However, the ld. Departmental Representative submitted that the assessee’s return of income was not accompanied by the copy of the balance sheet for the relevant financial year. Hence, the Assessing Officer had no occasion to examine the entry in the balance sheet relating to this property. Considering the plea of the ld. Departmental Representative, we are inclined to remit the issue back to the file of the Assessing Officer for fresh consideration and to decide in accordance with law.

In the result, the appeal of the Revenue in ITA 6. No.1734/Mds/2013 is partly allowed for statistical purposes.

Order pronounced on Friday, the 24th day of July, 2015 at Chennai

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