Shankaran Subramaniam, CHENNAI V. ITO, CHENNAI

ITA 1005/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6435 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 24-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: N V BALAJI
• Keywords: Unexplained cash credit; Gift; Additional evidence

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH, CHENNAI , ! BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER . / ITA NO. 1005/MDS/2017 / ASSESSMENT YEAR : 2008-09 SHRI SHANKARAN SUBRAMANIAM , THE INCOME-TAX OFFICER, FLAT NO.3, FIRST FLOOR, V. NON CORPORATE WARD 1 8(3), NO.37/1, NETHAJI STREET, CHENNAI 600 034. SAIDAPAET,CHENNAI-105. ( /APPELLANT) RESPONDENT) / APPELLANT BY : SHRI N.V.BALAJI / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT ! / DATE OF HEARING : 12.07.2017 '# ! / DATE OF PRONOUNCEMENT : 21.08.2017 ' / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 31 .01.2017. 2. THE ONLY GRIEVANCE IN THIS APPEAL IS WITH REGARD TO ADDITION TOWARDS UNEXPLAINED CASH DEPOSITS OF 5,55,000/- IN THE BANK ACCOUNT. PAN ARBPS4556L - - ITA 1005/MDS/17 2 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS DEPOSITED THE FOLLOWING AMOUNTS IN THE BANK ACCOUNT : SL.NO. NAME OF LOAN LENDER/CASH CREDITOR DESCRIPTION OF LOAN/CASH CREDIT AMOUNT GIVEN CASH DEPOSITED IN KARUR VASYA BANK LTD. 1. D. ANANTHAN LOAN 2,00,000 20/04/2007 2. D.SURESH BABU LOAN 2,00,000 DEPOSITED CONSO- LIDATED 3,00,000 ON 16/11/2017 3. S.S.VASAN DEBT REALIZED 75,000 4. WIFE GIFT 25,000 5. K. KADIRESAN FRIEND GIFT 30,000 17/12/2007 6. MOTHER GIFT 25,000 23/02/2008 TOTAL 5,55,000 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE REL EVANT DETAILS FURNISHED BY THE ASSESSEE VIDE HIS LETTER DATED 22 ND FEBRUARY, 2016, WERE ADMITTED AS ADDITIONAL EVIDENCE UNDER RU LE 46A BY THE THEN CIT(APPEALS) AND THE SAME WERE FORWARDED T O THE CONCERNED AO, VIDE LETTER DATED 24.02.2016, FOR THE REMAND REPORT. THE AO FURNISHED THE REMAND REPORT VIDE LE TTER DATED 22.3.2016. AT THE OUTSET OF THE REMAND REPORT, IT HAS BEEN SUBMITTED BY THE AO THAT DURING THE COURSE OF REMAN D REPORT PROCEEDING, SHE HAD ISSUED LETTERS TO ALL THE LOAN LENDERS/DONORS AND ALSO TO THE ASSESSEE CALLING FOR THE RELEVANT D ETAILS. HOWEVER, AS REPORTED BY THE AO, THERE WAS NO RESPON SE EITHER FROM THE ASSESSEE OR FROM THE LOAN LENDERS/DONORS. ACCORDINGLY, - - ITA 1005/MDS/17 3 THE REMAND REPORT WAS SUBMITTED BY THE AO ON THE BA SIS OF THE MATERIALS AND DETAILS ALREADY AVAILABLE ON RECORD A ND THE AO REITERATED THE FINDINGS OF THE ORIGINAL ASSESSMENT OFFICER. 3.1 THE REMAND REPORT WAS CONFRONTED TO THE ASSESSE E FOR HIS COMMENTS. THE ASSESSEE SUBMITTED HIS REPLY VID E LETTER DATED 18.04.2016 AND OBJECTED TO THE OBSERVATIONS O F THE AO IN THE REMAND REPORT. IT WAS ARGUED THAT THE ASSESSEE HAD APPEARED BEFORE THE AO AND ALSO THE CONFIRMATION LE TTERS FROM THE LOAN LENDERS WERE SUBMITTED TO THE AO. THE ASS ESSEE ALSO POINTED OUT THAT THE AO HAD NOT APPLIED HER MIND BU T ONLY FOR THE SAKE OF COMPLETING THE ASSESSMENT ORDER AND FOR THE REMAND REPORT, HAD GIVEN VAGUE REPLIES. 3.2 IN VIEW OF THE ABOVE, THE CASE WAS FIXED BY THE CIT(APPEALS) FOR HEARING TO ASCERTAIN THE CORRECT A ND TRUE FACTS OF THE CASE AND THE LD. AR, SHRI SIDDHARTH MEHTA AT TENDED ON 26.12.2016. DURING THE ORAL HEARING, HE WAS ASKED TO PRODUCE ALL THE RELEVANT DETAILS AND EVIDENCES TO SUBSTANTI ATE THE GENUINENESS OF EXISTENCE OF THE LOAN CREDITORS AND THEIR CREDIT WORTHINESS. HOWEVER, THE CASE WAS ADJOURNED TO 29 .12.2016 ON - - ITA 1005/MDS/17 4 THE REQUEST OF THE LD. AR. NEITHER THE ASSESSEE N OR THE LD. AR ATTENDED THE PROCEEDINGS NOR THEY FURNISHED ANY REL EVANT DETAILS. THEREFORE, THE CIT(APPEALS) OBSERVED THAT THE ASSES SEE DOES NOT HAVE ANY SATISFACTORY DOCUMENTARY EVIDENCES, WH ICH COULD PROVE THE GENUINENESS AND CREDIT WORTHINESS OF THE LOAN LENDERS AND DONORS OF THE GIFT AND THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS CAST UPON HIM. FURTHER, THE CIT(APPEALS) OBSERVED THAT THE CASH LOANS AND CASH GIFTS RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ARE IN FACT, TH E ASSESSEES OWN UNDISCLOSED INCOME DEPOSITED IN THE BANK ACCOUN T AND THE EXPLANATION THAT THESE CASH DEPOSITS WERE RECEIVED AS LOAN AND GIFTS WAS AN AFTERTHOUGHT ON THE PART OF THE ASSESS EE, WHEN THE SAME WAS DETECTED BY THE AO. THE CIT(APPEALS) ALS O OBSERVED THAT THE CONFIRMATION LETTERS WERE WRITTEN ON PLAIN PAPERS AND NOT ON INDIAN NON-JUDICIAL PAPER. THER EFORE, THE CIT(APPEALS) CONFIRMED THE ADDITION OF 5,55,000/- AS UNEXPLAINED CASH CREDIT . AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE THE REMAND REP ORT WAS - - ITA 1005/MDS/17 5 CALLED BY THE LD.CIT(A) FROM THE LD. ASSESSING OFF ICER. THE AO SUBMITTED THE REMAND REPORT VIDE LETTER DATED 22.03 .2016, WHICH WAS CONFRONTED TO THE ASSESSEE. THE ASSESSEE VIDE LETTER DATED 18.04.2016 OBJECTED TO THE OBSERVATION OF THE LD. A SSESSING OFFICER IN HIS REMAND REPORT. IT WAS THE ARGUMENT OF THE LD.A.R THAT THE ASSESSEE FILED A CONFIRMATION LETTERS FROM THE LOAN LENDERS BEFORE THE LD. ASSESSING OFFICER AND THE AO HAS NOT CONSIDERED THE CONFIRMATION LETTER AND ONLY FOR THE SAKE OF COMPLETION OF ASSESSMENT ORDER AND FOR THE REMAND R EPORT, THE AO HAS GIVEN SOME VAGUE REPLIES AND PROPER OPPORTUN ITY OF HEARING TO THE ASSESSEE IS NOT GIVEN TO THE ASSESSE E. MORE SO, WHEN THE CASE WAS FIXED FOR HEARING ON 29.12.2016 B EFORE THE LD.CIT(A), EITHER THE ASSESSEE OR THE AUTHORISED RE PRESENTATIVE OF ASSESSEE HAS NEITHER APPEARED NOR FURNISHED ANY DOCUMENTS BEFORE THE LD.CIT(A. FROM THAT CONDUCT OF THE ASSES SEE, LD.CIT(A) WAS OF THE OPINION THAT THE ASSESSEE DOES NOT HAVE ANY SATISFACTORY DOCUMENTS/EVIDENCES TO PROVE THE G ENUINENESS AND CREDIT WORTHINESS OF THE LOAN LENDERS OR DONOR OF THE GIFT. IN MY OPINION, IT IS APPROPRIATE TO GIVE ONE MORE OPPO RTUNITY OF HEARING TO THE ASSESSEE TO PLACE NECESSARY EVIDENCE BEFORE THE - - ITA 1005/MDS/17 6 LD. ASSESSING OFFICER SO AS TO PROVE THE GENUINENES S OF THE TRANSACTIONS. ACCORDINGLY, THIS ISSUE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. IT NEE DLESS TO SAY THAT THE ASSESSEE HAS TO PROVE THE IDENTITY OF THE PARTI ES, CAPACITY OF THE LENDERS/DONORS AND GENUINENESS OF THE TRANSACTI ONS. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21 ST AUGUST, 2017 AT CHENNAI. SD/- ( $ % & ' ) ()*+,-*.//0*-12 ! 34566/7+8*+89:;<:- $= /CHENNAI, >3 /DATED, THE 21 ST AUGUST,2017. K S SUNDARAM 3? @ABA / COPY TO: 1 . / APPELLANT 3. C2 / CIT(A) 5. ADE F / DR 2. / RESPONDENT 4. C / CIT 6. EGH / GF