ITO Vs Kaipathur Venkatakrishnan (ITAT Chennai)
The case concerned the validity of an addition of ₹5 crore made by the Assessing Officer (AO) as “Income from Other Sources” while passing an order giving effect to an earlier order of the Income Tax Appellate Tribunal (ITAT). The Revenue challenged the order of the Commissioner of Income Tax (Appeals) [CIT(A)], who had deleted the addition. The assessee also filed a cross-objection.
The assessee had originally filed the return of income for Assessment Year 2008-09 declaring total income of ₹1,07,640. Subsequently, the assessment was reopened under Section 148, and an assessment under Sections 143(3) read with 147 was completed on 18 March 2014. During the proceedings, it was noticed that the assessee and his father had been involved in the sale of immovable property, and gains arising from the transaction had not been offered to tax. The assessee had admitted receiving ₹5 crore, representing his alleged 50% share of the sale consideration. Since the assessee was not considered a joint owner and his name had been included in the transaction merely as a matter of caution, a protective assessment was made in his hands.
Substantive assessment had been made in the hands of the assessee’s father. The CIT(A) had earlier deleted the protective addition in the assessee’s case, and the order giving effect to that appellate decision revised the assessee’s income back to ₹1,07,640.
