Shri S.Veerappan, CHENNAI V. ITO, CHENNAI

CO 77/CHNY/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6834 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 23-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.829(MDS)/2011 ASSESSMENT YEAR : 2007-08 & CO NO.77(MDS)/2011 THE INCOME-TAX OFFICER, SALARY WARD II(3), CHENNAI. VS. SHRI S.VEERAPPAN, 28-SOWRASTRA NGR. II STREET, CHOOLAIMEDU, CHENNAI-94. PAN AADPV2551N. (APPELLANT) ( RESPONDENT/CROSS OBJECTOR) APPELLANT BY : SHRI K. P.GOPAKUMAR, IRS, JT. COMMISSIONER OF INCOME-TAX RESPONDENT BY : SHRI PHILIP GEORGE, ADVOCATE. DATE OF HEARING : 16TH JANUA RY, 2012 DATE OF PRONOUNCEMENT : 16 TH JANUARY, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL FILED BY THE REVENUE RELATES TO THE ASSESSMENT YEAR IS 2007-08. THE CROSS OBJECTION IS FILED BY THE ASSESSEE. THE APPEAL AND THE CROSS OBJECTION ARE D IRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III - - ITA 829 & CO 77 OF 2011 2 AT CHENNAI, DATED 27-1-2011 AND ARISE OUT OF THE AS SESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX AC T, 1961. 2. THE ASSESSEE IS A PROFESSOR OF PHYSICS, RETIRED FROM GOVERNMENT ARTS COLLEGE, CHENNAI. THE ONLY SOURCE OF HIS INCOME IS THE PENSION GIVEN BY THE STATE GOVERNMENT . HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL ADMITTING A TOTAL INCOME OF ` 1,54,950/-. 3. THERE WAS AN AIR INFORMATION THAT THE ASSESSEE HAD MADE A CASH DEPOSIT OF ` 23,29,000/- IN HIS BANK ACCOUNT AND ON THAT GROUND THE ASSESSMENT WAS SELECTED FOR SCRUTINY. 4. WHEN THE CREDENTIALS OF THIS AMOUNT DEPOSITED I N THE BANK WERE ASKED TO BE EXPLAINED, THE ASSESSEE S UBMITTED THAT THE AMOUNT WAS TRANSACTED THROUGH BANK IN CONN ECTION WITH HIS SON HAVING PURCHASED A LANDED PROPERTY IN COIMB ATORE DISTRICT. HIS SON SHRI V.MOHAN VIJAY SENTHIL IS WO RKING IN THE UNITED STATES OF AMERICA AND HE HAD PURCHASED A PIE CE OF LAND FOR A CONSIDERATION OF ` 78,10,000/- ON 30-8-2006. IN ORDER TO - - ITA 829 & CO 77 OF 2011 3 MEET THE ABOVE STATED AMOUNT, THE ASSESSEES SON HI MSELF HAS GIVEN ` 33,86,800/- BEING HIS FOREIGN AND INDIAN SALARY IN COME FOR THE PERIOD 1997 TO 2007. THE ASSESSEE ALSO CON TRIBUTED ANOTHER SUM OF ` 33,09,240/- BEING HIS GPF AMOUNT, LEAVE SURRENDER SALARY, UGC ARREARS AND TERMINAL BENEFITS EARNED DURING THE PERIOD 1988 TO 2005. HE ALSO HAD AN AMO UNT OF ` 16,50,000/- RECEIVED FROM HIS WIFE MRS. MANIMEGALA I, AGAIN FROM HER SALARY SAVINGS AND GPF WITHDRAWALS. FUNDS WORTH ` 7,50,000/- WERE RAISED FROM FRIENDS AND RELATIVES. 5. INSPITE OF THE ABOVE DETAILED EXPLANATION, THE ASSESSING AUTHORITY SPECIFICALLY ASKED FOR THE SOUR CE OF THE DIFFERENT REMITTANCES INTO THE ASSESSEES BANK ACCO UNT. THE ASSESSEE FURNISHED THE DETAILS AS PER HIS LETTER DA TED 12-11-2009 AS FOLLOWS:- 3-6-2006 ` 5,30,000/- RECEIVED FROM MR. S.PALANISAMY (BROTHER) 27-6-2006 ` 4,90,000/- RECEIVED FROM S.K.MUTHUSAMY (FRIEND) 27-6-2006 ` 59,000/- RECEIVED FROM MANIMEGALAI (WIFE) - - ITA 829 & CO 77 OF 2011 4 3-7-2006 ` 5,00,000/- RECEIVED FROM MR. P.PERIYAGOUNDER (FATHER-IN-LAW) & MR. P.SENGODAN(COUSIN) 31-7-2006 ` 5,00,000/- RECEIVED FROM MR.K.RAMASAMY (FRIEND) 6. THE ASSESSING OFFICER ACCEPTED THE EXPLANATION IN RESPECT OF THE AMOUNT OF ` 59,000/- RECEIVED FROM THE ASSESSEES WIFE. HE ALSO ACCEPTED THE EXPLANATION IN RESPECT OF THE SUM OF ` 2 LAKHS RECEIVED FROM THE ASSESSEES FATHER-IN-LAW , AS AGAINST ` 5 LAKHS STATED TO HAVE BEEN RECEIVED FROM HIM. TH E REMAINING AMOUNTS OF ` 5,30,000/-; ` 4,90,000/-; ` 2,00,000/- AND ` 5,00,000/- WERE NOT ACCEPTED BY THE ASSESSING AUTH ORITY AND THE TOTAL OF THE ABOVE AMOUNTS CAME TO ` 17,20,000/-, WHICH HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLA INED CREDIT. THE ADDITION WAS MADE UNDER SECTION 68 OF THE INCOME- TAX ACT, 1961. 7. IN FIRST APPEAL, THE COMMISSIONER OF INCOME- TAX(APPEALS) DELETED THE ADDITIONS MADE UNDER SECTI ON 68, EXCEPT A SUM OF ` 2,30,000/-. THE ASSESSEE HAD EXPLAINED THAT HE HAD RECEIVED ` 5,30,000/- FROM HIS BROTHER ON FAMILY - - ITA 829 & CO 77 OF 2011 5 SETTLEMENT OF HIS VILLAGE PROPERTIES. THE COMMISSI ONER OF INCOME-TAX(APPEALS) ACCEPTED THE ABOVE EXPLANATION TO THE EXTENT OF ` 3 LAKHS AND DISALLOWED AND CONFIRMED THE BALANCE O F ` 2,30,000/-. 8. THE REVENUE IS AGGRIEVED BY THE RELIEF GRANTED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) AND THEREFO RE THE SECOND APPEAL BEFORE US. IT IS THE GRIEVANCE OF TH E REVENUE THAT THE ENTIRE ADDITION OF ` 17,20,000/- MADE UNDER SECTION 68 SHOULD HAVE BEEN CONFIRMED BY THE COMMISSIONER OF I NCOME- TAX(APPEALS), INSTEAD OF CONFIRMING ONLY A SUM OF ` 2,30,000/-. IT IS THE CASE OF THE REVENUE THAT THE COMMISSIONER OF INCOME- TAX(APPEALS) HAS ERRED IN GIVING A RELIEF OF ` 14,90,000/-. 9. THE GROUND RAISED IN THE CROSS OBJECTION FILED BY THE ASSESSEE IS THAT, HAVING ACCEPTED THE EXPLANATION O FFERED BY THE ASSESSEE IN RESPECT OF THE AMOUNT OF ` 5,30,000/- RECEIVED FROM HIS BROTHER, THE COMMISSIONER OF INCOME-TAX(APPEALS ) OUGHT TO HAVE DELETED THE ENTIRE ADDITION OF ` 5,30,000/- AND THERE IS NO JUSTIFICATION TO SUSTAIN A PARTIAL ADDITION OF ` 2,30,000/-. - - ITA 829 & CO 77 OF 2011 6 10. WE HEARD SHRI K.P.GOPAKUMAR, THE LEARNED JOINT COMMISSIONER OF INCOME-TAX, APPEARING FOR THE REVEN UE AND SHRI PHILIP GEORGE, THE LEARNED COUNSEL, APPEARING FOR THE ASSESSEE. ON GOING THROUGH THE FACTS OF THE CASE, WE FIND THAT, AS OBSERVED BY THE COMMISSIONER OF INCOME-TAX(APPEA LS) IN HIS ORDER, THE ASSESSEE HIMSELF HAD REGULAR INCOME AS A PROFESSOR OF GOVERNMENT ARTS COLLEGE. HIS WIFE WAS ALSO EMPL OYED AND SHE HAD HER OWN SALARY INCOME. ONE OF HIS SONS IS WORKING IN UNITED STATES OF AMERICA. THE ASSESSEE HAS EXPLAIN ED THE QUANTUM OF SOURCES AVAILABLE IN THEIR RESPECTIVE HA NDS TO PURCHASE THE PROPERTY AT COIMBATORE. THE ASSESSEE, HIS WIFE AND HIS SON ARE NOT CARRYING ON ANY BUSINESS AND, T HEREFORE, THEY ARE NOT SUPPOSED TO MAINTAIN ANY DAY-TO-DAY BOOKS O F ACCOUNTS. THE CREDIBILITY OF THEIR EXPLANATIONS REGARDING THE SOURCES AVAILABLE IN THEIR HANDS IS TO BE DEDUCED FROM A CO MPARISON OF THE SOURCES AVAILABLE IN THEIR HANDS AND THE CORRES PONDING EXPENSES OUTGOING FROM THEIR HANDS OVER A PERIOD OF TIME. WHEN THIS PRINCIPLE OF COMPARISON IS EMPLOYED, IT IS BEY OND DOUBT TO STATE THAT THE ASSESSEE, HIS WIFE AND SON HAD SUFFI CIENT RESOURCES TO PURCHASE THE LANDED PROPERTY AT COIMBA TORE. - - ITA 829 & CO 77 OF 2011 7 THEREFORE, THE COMMISSIONER OF INCOME-TAX(APPEALS) IS JUSTIFIED IN ACCEPTING THE EXPLANATION OF THE ASSESSEE REGARD ING THE AVAILABILITY OF FUNDS IN HIS HANDS. 11. THEREFORE, WE DO NOT FIND ANY ERROR OF LAW OR OF FACTS COMMITTED BY THE COMMISSIONER OF INCOME-TAX(APPEALS ) IN DELETING THE CASH CREDIT ADDITION OF ` 14,90,000/-. 12. FURTHER, THE ASSESSEE HAS EXPLAINED THAT THE AMOUNT OF ` 5,30,000/- WAS RECEIVED FROM HIS BROTHER AS A RESU LT OF THE SETTLEMENT OF HIS FAMILY PROPERTIES SITUATED IN HIS NATIVE VILLAGE. WHEN THIS FACTUM IS ACCEPTED BY THE COMMI SSIONER OF INCOME-TAX(APPEALS), THERE IS NO REASON AS TO WHY A RELIEF OF ` 3 LAKHS ALONE SHOULD BE GIVEN AND THE BALANCE OF ` 2,30,000/- MUST BE UPHELD AS ADDITION. HIS BROTHER HAS NO CHI LDREN. HE HAD REASONABLE AGRICULTURAL LAND-HOLDINGS AND HE IS CAR RYING ON ACTIVITIES OF BOTH AGRICULTURE AND REARING OF MILCH COWS. THEREFORE, IT IS NOT AN ALTOGETHER STRANGE THING TH AT HIS BROTHER WOULD BE IN A POSITION TO GIVE A SUM OF ` 5,30,000/- TO THE ASSESSEE. THEREFORE, WE FIND THAT THERE IS NO JUST IFICATION IN - - ITA 829 & CO 77 OF 2011 8 SUSTAINING AN ADDITION OF ` 2,30,000/-. THE SAID ADDITION IS ACCORDINGLY DELETED. 11. IN RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 16 TH JANUARY, 2012 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 16 TH JANUARY, 2012. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.