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2015 (9) TMI 712 - ITAT CHENNAI

2015 (9) TMI 712 - ITAT CHENNAI - TMI - Addition under Section 68 - reopening of assessment under Section 147 - Held that:- The assessee in fact received the gold bullion on payment of ₹ 9,97,00,000/-. In the sale deed in which the payment was received, was shown as if the “Babu and Associates” is “Confirming Party”. The fact remains that the assessee is not the owner of the land and he has nothing to do with the land which was subject matter of transfer by the sale deed dated 27.02.2007. .....

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amount of ₹ 10 Crores as income of the assessee

The assessee filed a return of income on 13.11.2007 declaring a total income of ₹ 16,27,456/-. Initially, the return was processed under Section 143(1) of the Act. Consequent to a survey under Section 133A of the Act, the assessment was reopened by issuing a notice on 12.02.2010 and the same was completed on 31.12.2010. Consequently, the case was again reopened by issuing a notice under Section 148 of the Act on 22.07.2011. S .....

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CHANDRA POOJARI, JJ. For The Appellant : Sh. N.V. Balaji, Advocate For The Respondent : Sh.S. Balasubramanian, CIT ORDER PER N.R.S. GANESAN, JUDICIAL MEMBER: This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-V, Chennai, dated 07.10.2014 and pertains to assessment year 2007-08. 2. The only issue arises for consideration is with regard to addition of ₹ 10 Crores under Section 68 of the Income-tax Act, 1961 (in short the Act ). The assessee .....

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ngovan, an old friend of him, contacted two days before 9.2.2007 over phone and clarified whether the assessee would be interested in accommodating transaction of ₹ 10 Crores. The said Shri Elangovan has also clarified that the amount should be transferred immediately to another account for which the assessee would be paid a commission of ₹ 3 lakhs. The assessee agreed accordingly and an amount of ₹ 10 Crores was transferred to the assessee s account in State Bank of India by M .....

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bmitted that the Assessing Officer examined Shri K.R. Elangovan on 12.03.2010 and Shri K.R. Elangovan told the authorities that he does not know anything about the transaction and he does not have any role in this transaction. Referring to a copy of the sale deed, which is available at page 17 of the paper-book, the Ld.counsel submitted that Babu and Associates was shown as partnership firm represented by one Shri C. Karthikeyan. It was also described as Confirming Party . The said sale deed was .....

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r Branch, Chennai, on 09.02.2007 in favour of M/s Babu and Associates. The Ld.counsel submitted that the assessee is not doing business as partnership concern in the name of Babu Associates , and what was referred as Babu and Associates is a partnership firm represented by Shri C. Karthikeyan. Therefore, the assessee, according to the Ld. counsel, is nothing to do with this transaction. On a query from the Bench, whether the Account No. mentioned in the sale deed, held with State Bank of India, .....

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was raised as to when the land does not belong to the assessee, under what capacity a sum of ₹ 10 Crores was credited in the account of the assessee, the Ld.counsel submitted that the assessee does not know under what capacity it was credited. The Ld.counsel has also clarified that there is no partnership firm Babu and Associates in existence. Therefore, according to the Ld. counsel, Babu and Associates is a fictitious partnership firm. 5. Shri N.V. Balaji, the Ld.counsel for the assessee, .....

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5 of the paper-book, the Ld.counsel submitted that as per the statement of Shri Mohanlal Khatri, the gold was delivered to Babu and Associates. In fact, the assessee has nothing to do with Babu and Associates. According to the Ld. counsel, since the money was received by the assessee through banking channel and it was immediately transferred to Mohan Lal Jewellers for a commission of ₹ 3 lakhs, the entire addition cannot be sustained. The Ld.counsel has also clarified that it cannot be su .....

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bank account of the assessee. Though a reference was made in the sale deed that Babu and Associates was represented by Shri C. Karthikeyan, the Account No. referred in the sale deed belongs to the assessee. In fact, ₹ 10 Crores were credited to the account of the assessee. Out of the said amount, a sum of ₹ 9,97,01,500/- was transferred to Mohan Lal Jewellers for purchase of gold bullion. Therefore, the entire money was received by the assessee and utilized by the assessee. Referring .....

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sions on either side and perused the relevant material on record. Admittedly, a sum of ₹ 10 Crores was credited in the bank account of the assessee in the Account No.10624892066 held in State Bank of India, CIT Nagar Branch, Chennai, on 09.02.2007. Apparently, this amount was transferred on the basis of copy of the sale deed, which is available at page 17 of the paper-book. The fact remains that in order to mislead the authorities, Babu and Associates was described as a partnership firm re .....

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amount was transferred to Mohan Lal Jewellers and owner of the Mohan Lal Jewellers, on examination, clarified that he delivered gold bullion on receipt of ₹ 9,97,00,000/-. Shri Mohanlal Khatri, the owner of Mohan Lal Jewellers clarified that the gold bullion was delivered to Babu and Associates. Now the assessee contends that there is no partnership firm by name Babu and Associates and it is a fictitious concern. The fact remains that the assessee transferred the funds of ₹ 9.97,00,0 .....

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