Sri.Anoopkumar S, Cochin V. The DCIT, Ernakulam

CO 15/COCH/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1700 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 14-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 21-08-2015
• Court: TRIBUNAL
• Assessee Lawyers: K K CHANDRASEKHARAN
• Keywords: Unexplained cash credit
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NOS.379 TO 382/COCH/2015 ASSESSMENT YEARS : 2006-07,2008-09, 2009-10 & 2010- 11 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, ERNAKULAM. VS. SHRI ANOOP KUMAR S., ARUN NIVAS, AYAPPANKAVU, ERNAKULAM. [PAN:ARWPS 4555M] (REVENUE -APPELLANT) (ASSESSEE-RESPONDENT) C.O. NOS. 15 TO 18/COCH/2015 (ARSG. FROM I.T.A. NOS.379 TO 382/COCH/2015 ) ASSESSMENT YEARS : 2006-07,2008-09, 2009-10 & 2010- 11 SHRI ANOOP KUMAR S., ARUN NIVAS, AYAPPANKAVU, ERNAKULAM. [PAN:ARWPS 4555M] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) REVENUE BY SMT. TRIPTHI BISWAS, CIT/DR &SHRI SHRI K.P. GOPAKUMAR, SR. DR. ASSESSEE BY SHRI K.K. CHANDRASEKHARAN, ADV. DATE OF HEARING 14/12/2015 DATE OF PRONOUNCEMENT 21/12/2015 O R D E R PER BENCH: THESE FOUR APPEALS OF THE REVENUE ARISE FRO M THE CONSOLIDATED ORDER OF THE LD. CIT(A)-IV, KOCHI DATED 30-03-2015 FOR TH E ASSESSMENT YEARS 2006-07, 2008-09, 2009-10 AND 2010-11. I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 2 2. SINCE THE ISSUES IN ALL THE APPEALS ARE IDENTI CAL, THEREFORE, ALL THE APPEALS ARE BEING TAKEN UP BY THIS CONSOLIDATED ORD ER. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS AGAINST EACH OF THE REV ENUES APPEAL WHICH ARE ALSO BEING TAKEN UP BY THIS CONSOLIDATED ORDER. 3. WE SHALL FIRST TAKE UP THE APPEAL OF THE REVEN UE FOR THE ASSESSMENT YEAR 2006-07 IN I.T.A. NO. 379/COCH/2015 AND OUR OR DER HEREINBELOW IN REVENUES APPEAL IN I.T.A. NO. 379/COCH/2015 SHALL BE IDENTICALLY APPLICABLE IN ALL THE REVENUES APPEALS MENTIONED HEREINABOVE. 4. THE REVENUE HAS RAISED IDENTICAL GROUNDS OF A PPEAL IN ALL THE YEARS EXCEPT THE AMOUNT OF DELETION OF ADDITION MADE BY T HE LD. CIT(A). WE SHALL REPRODUCE THE FOLLOWING GROUNDS OF APPEAL OF THE RE VENUE FOR THE ASSESSMENT YEAR 2006-07 HEREINBELOW: 1. THE ABOVE CITED ORDER OF THE COMMISSIONER OF INC OME-TAX(APPEALS)- IV, KOCHI IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A)-IV ERRED IN DELETING THE ADDITION. 3. AO ADDED RS.38,68,477 BEING UNEXPLAINED CREDIT IN BANK ACCOUNT CIT(A) DELETED THE ADDITION HOLDING THAT THE ASSESS EES ACCOUNT WAS USED BY ASSESSEES FATHER TO CREDIT PRIZE MONEY FRO M LOTTERY TICKETS AND THAT THE AMOUNT HAS BEEN ACCOUNTED IN THE FATHE RS BOOK OF ACCOUNT. THE CIT(A)S ORDER IS NOT ACCEPTABLE. I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 3 IN THE CORRESPONDING P&L ACCOUNT OF ASSESSEES FATH ER THERE ARE ONLY 2 ENTRIES ON CREDIT SIDE VIZ. SALES AND INTEREST & OTHER INCOME. ONLY RS.6,78,485.74 HAS BEEN SHOWN AS INTEREST & OTHER INCOME. THIS INCLUDES BOTH PRIZE MONEY AND BANK INTEREST FROM AL L THE BANK ACCOUNTS OF SELF AND BENAMIS. SALES PERTAINS ONLY TO RECEIPTS FROM WHOLESALE TICKETS. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE CIT( A)-IV MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 5. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER AS APPEARING IN PARA 9.1 OF THE O RDER OF THE LD. CIT(A) ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 9.1 APART FROM ABOVE THROUGH A SEPARATE LETTER DAT ED 14.02.2013 IT WAS ASKED TO ASSESSEE TO EXPLAIN THE CREDITS IN HIS ALL BANK ACCOUNTS FOR THE PERIOD OF A.Y. 2005-06 TO 2010-11 THIS WAS A COMMON LETTER FOR ALL THE ASSESSMENT YEAR, DURING THIS PERIOD THE ACC OUNT OF ASSESSEE WITH ICICI BANK (MG ROAD BRANCH A/C NUMBER 9405) SH OWN A CREDIT OF RS.3868477 WHICH ACCORDING TO ELDER BROTHER OF ASSE SSEE IN HIS SWORN STATEMENT DATED 6.11.2010 BELONGS TO WINNING FROM L OTTERY BUT ASSESSEE DID NOT PROVIDE ANY SPECIFIC ANSWER TO THE SAME VIDE HIS LETTER DATED 27.02.2013 WHICH IS PLACED IN ASSESSME NT YEAR 2010-11 FOLDER. SO THIS AMOUNT BECOME UNEXPLAINABLE HENCE A DDED BACK IN TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM THE OTHER SOURCES. ADDITION = RS.38,68,477/-. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER VIDE PARAS 9.3 TO 9.3.2 OF HIS ORDER. IT IS VERY RELEVANT TO REPRODUCE THE ORDER OF THE LD. CIT(A) AT PARAS 9.3 TO 9.3.2 HEREINBELOW: I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 4 9.3. THE ASSESSING OFFICER HAS GONE THROUGH THE BA NK ACCOUNT NO.9405 WITH ICICI BANK, WHERE A CREDIT OF RS.38,68 ,477/- IS FOUND. IT HAS BEEN OBSERVED BY THE ASSESSING OFFICER THAT THE APPELLANT DID NOT PROVIDE ANY SPECIFIC ANSWER IN RESPECT OF THIS CRED IT AND HENCE THE SAME WAS TREATED AS UNEXPLAINABLE AND ADDED BACK TO THE TOTAL INCOME. 9.3.1 IT HAS BEEN SUBMITTED BY THE APPELLANT THAT H E HAS GOT NO BUSINESS IN LOTTERY TICKETS, THE ALLEGED CREDITS IN ICICI BANK REPRESENTS THE SALE PROCEEDS OF LOTTERY TICKETS SOLD BY SRI SI NKARAM LOTTERIES. THE SUB AGENTS IN ORDER TO BUY NEW TICKETS SURRENDER TH E PRIZED TICKETS IN LIEU OF MONEY. SUCH PRIZED TICKETS ARE SOLD TO DIPU THACKER AND THE PROCEEDS RECEIVED AFTER DEDUCTING COMMISSION, ARE C REDITED IN RESPECTIVE PERSONS ACCOUNTS. THESE TRANSACTIONS AR E FULLY RECORDED IN THE BOOKS OF ACCOUNTS OF SINKARAM, AS PROPRIETOR OF SINKARAM LOTTERIES, AND THE FACTS ARE VERIFIABLE FROM THE RECORDS SEIZE D U/S.132. THE AMOUNT RECEIVED FROM DIPU THACKAR BELONGS TO THE AP PELLANTS FATHER M. SINKARAM, WHICH IS EXPLAINED BY THE AUDITED PROF IT AND LOSS ACCOUNT AND BALANCE SHEET SUBMITTED BY SRI SINKARAM IN HIS ASSESSMENT PROCEEDINGS. APPELLANTS FATHER HAS STATED THAT CR EDITS IN ICICI BANK IN THE NAME OF APPELLANT ARE IN EXCHANGE OF PRIZE WINN ING TICKETS. 9.3.2 THE APPELLANT HAS SUBMITTED THE LEDGER ACCOUN T OF DIPU MAINTAINED BY THE SINKARAM FOR THE F.Y. 2005-06, AN D, WHICH SHOWS THAT A SUM OF RS.38,68,477/- IS THE AMOUNT DEPOSITE D AND CREDITED IN RESPECT OF THE PRIZE WINNING TICKETS. THE FIGURES EXACTLY TALLIES. SINCE THE COMPLETE LEDGER ACCOUNT HAS BEEN SUBMITTED BY T HE APPELLANT WHICH SHOWS THE EXACT AMOUNT OF RS.38,68,477/- CRED ITED IN THE ICICI BANK A/C NO.9405 ON ACCOUNT OF PRIZE WINNING TICKET S RECEIVED FROM DIPU THACKER, IT IS HELD THAT THE APPELLANTS ACCOU NT HAS BEEN USED BY HIS FATHER FOR THE PURPOSE OF DOING BUSINESS, FOR W HICH THE TRANSACTIONS ARE FOUND TO BE EXPLAINED. ACCORDINGLY, IT IS HELD THAT SUCH DEPOSIT CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE APPE LLANT FROM OTHER SOURCES. IN VIEW OF THIS, THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED AND APPEAL ON THIS GROUND IS ALLOWED. . 7. THE LD. DR RELIED UPON THE ORDER OF THE ASSES SING OFFICER WHEREAS ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE REL IED UPON THE ORDER OF THE LD. CIT(A). I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 5 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE ASSESSEE HAS GOT NO BUSINESS IN LOTTERY TICKETS AND THE CREDITS IN ICICI BANK REPRESENTS THE SALE PROCEEDS OF LOTTERY TICKETS SOLD BY M/S. S INKARAM LOTTERIES, PROP., M. SINKARAM AND THE FATHER OF THE ASSESSEE. IT WAS STATED THAT THE SUB AGENTS IN ORDER TO BUY NEW TICKETS SURRENDER THE PR IZED TICKETS IN LIEU OF MONEY. IN THE PRESENT CASE, SUCH PRIZED TICKETS WER E SOLD TO DIPU THACKAR AND THE PROCEEDS RECEIVED AFTER DEDUCTING COMMISSIO N, WERE CREDITED IN RESPECTIVE PERSONS ACCOUNTS AND THERE IS NO DISPUT E TO THE FACT THAT THESE TRANSACTIONS ARE FULLY RECORDED IN THE BOOKS OF ACC OUNTS OF M. SINKARAM, THE PROPRIETOR OF M/S. SINKARAM LOTTERIES WHICH ARE VER IFIABLE FROM THE RECORDS SEIZED U/S. 132 OF THE ACT. THEREFORE, THE AMOUNT RECEIVED FROM DIPU THACKAR BELONGS TO M/S. SINKARAM LOTTERIES, PROP., M. SINKARAM AND THE FATHER OF THE ASSESSEE WHICH IS ALSO EXPLAINED AS P ER THE AUDITED PROFIT AND LOSS ACCOUNT OF M/S. SINKARAM LOTTERIES, PROP. M. S INKARAM. IT HAS BEEN STATED BY THE FATHER OF THE ASSESSEE, M. SINKARAM T HAT THE CREDITS IN ICICI BANK IN THE NAME OF THE ASSESSEE WERE IN EXCHANGE O F PRIZE WINNING TICKETS AND THE SAME HAS BEEN DEPOSITED IN M/S. SINKARAM LO TTERIES OF WHICH M. SINKARAM, THE FATHER OF THE ASSESSEE IS THE PROPRIE TOR. THE COMPLETE LEDGER ACCOUNT OF M/S. SINGARAM LOTTERIES, PROP. M. SINKAR AM WAS PRODUCED BEFORE THE ASSESSING OFFICER WHEREIN THE AMOUNT EXACTLY TA LLIES. NO DEFECT HAS BEEN POINTED OUT BY THE REVENUE IN THIS REGARD BEFO RE US. ACCORDINGLY, THE I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 6 CREDIT OF RS.38,68,477/- IN THE IMPUGNED YEAR WHIC H HAS BEEN DEPOSITED IN ICICI BANK ACCOUNT WHICH, IN FACT, HAS BEEN USED BY SHRI M. SINKARAM, THE FATHER OF THE ASSESSEE IN HIS PROPRIETORY CONCERN, I.E., M/S. SINKARAM LOTTERIES, IS NOT IN DISPUTE, AND THEREFORE, HAVIN G DECLARED THE CREDIT OF SHRI M. SINKARAM IN HIS PROPRIETORY CONCERN, M/S. S INKARAM LOTTERIES, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING DOUBLE ADDITION IN THE HANDS OF THE ASSESSEE WHEN THE FATHER OF THE ASSESSEE HAS OW NED UP SUCH CREDITS IN HIS ASSESSMENT PROCEEDINGS. IN THE CIRCUMSTANCES AN D FACTS OF THE CASE, WE CONFIRM THE ORDER OF THE LD. CIT(A) WHICH IS A WELL -REASONED ONE AND THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION SO MADE BY THE ASS ESSING OFFICER. THUS ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. ACCORDI NGLY, THE APPEAL OF THE REVENUE IN I.T.A. NO.379/COCH/2015 IS DISMISSED. 9. NOW WE SHALL TAKE UP THE REVENUES APPEALS IN I.T.A. NOS. 380 TO 382/COCH/2015 FOR THE ASSESSMENT YEARS 2008-09, 200 9-10 AND 2010-11 FOR THE DELETION OF RS.92,56,470/-, 45,26,719/- AND 18,28,650/- RESPECTIVELY FOR THE SAID ASSESSMENT YEARS. AS MENTIONED HEREINA BOVE, THE FACTS IN THE PRESENT APPEALS FOR THE ASSESSMENT YEARS 2008-09, 2 009-10 AND 2010-11 ARE IDENTICAL TO THE FACTS IN REVENUES APPEAL IN I .T.A. NO. 379/COCH/2015 AND ACCORDINGLY, OUR ORDER HEREINABOVE IN I.T.A. NO .379/COCH/2015 SHALL BE IDENTICALLY APPLICABLE IN THE PRESENT REVENUES APP EALS AND THE QUANTUM OF I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 7 THE DELETION OF ADDITION SHALL BE MODIFIED AND TO T HAT EXTENT, SHALL BE DEEMED TO HAVE BEEN SUBSTITUTED. THUS, THE APPEALS OF THE REVENUE IN I.T.A. NOS. 380 TO 382/COCH/2015 ARE DISMISSED. 10. NOW WE SHALL TAKE UP THE CROSS OBJECTIONS OF THE ASSESSEE IN C.O. NOS. 15 TO 18/COCH/2015 FOR THE ASSESSMENT YEARS 20 06-07, 2008-09, 2009-10 AND 2010-11. 11. THE ASSESSEE HAS NOT PRESSED GROUND NO. 2 IN C.O. NO. 15/COCH/2015 FOR THE ASSESSMENT YEAR 2006-07 AND GROUND NO. 2 IN C.O. NO. 18/COCH/2015 FOR THE ASSESSMENT YEAR 2010-11 AND TH E SAME ARE THEREFORE, DISMISSED AS NOT PRESSED. 12. ALL THE OTHER GROUNDS RAISED BY THE ASSESSEE IN ALL THE CROSS OBJECTIONS IN ALL THE YEARS ARE SUPPORTIVE IN NATURE AND THERE FORE, IN THE CIRCUMSTANCES AND FACTS OF THE CASE, ALL THE GROUNDS RAISED BY TH E ASSESSEE IN ALL THE CROSS OBJECTIONS IN ALL THE YEARS MENTIONED HEREINABOVE A RE HELD TO BE INFRUCTUOUS AND ACCORDINGLY, ARE DISMISSED. I.T.A. NOS.379-380/COCH/2015 & C.O. NOS. 15-18/COCH/2015 8 13. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED AND ALL THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN C OURT ON 21-12-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 21ST DECEMBER, 2015 GJ COPY TO: 1. SHRI ANOOP KUMAR S. ARUN NIVAS, AYAPPANKAVU, ERNA KULAM. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-2, ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN