Ponnusamy Padmanabhan, Coimbatore V. ITO, Bangalore

ITA 1022/BANG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5364 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 18-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G KAMALADAR HEARD ON
• Assessee Lawyers: SIVASHANMUGHAM

Judgement Text

ITA.1022/BANG/2016 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI. LALIT KUMAR, JUDICIAL, JUDICIAL MEMBER I.T.A NO.1022/BANG/2016 (ASSESSMENT YEAR : 2010-11) SHRI. PONNUSAMY PADMANABHAN, 24-1, DHANAPAL LAYOUT, STREET-2, UPPILIPALAYAM POST, SINGANALLUR, COIMBATORE 641 015 .. APPELLANT PAN : AMMPP6635L V. INCOME-TAX OFFICER, WARD 14(5), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. SIVASHANMUGHAM, ADVOCATE REVENUE BY : SHRI. G. KAMALADAR, STANDING COUNSEL HEARD ON : 18.04.2017 PRONOUNCED ON : .05.2017 O R D E R PER LALIT KUMAR, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE THROUGH TH E POWER OF ATTORNEY HOLDER SHRI. PONNUSAMY PADMANABHAN, AGAINST THE ORD ER OF THE CIT (A)-5, BENGALURU, DT.14.12.2015, FOR THE ASSESSMENT YEAR 2 010-11. ITA.1022/BANG/2016 PAGE - 2 02. ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APP EAL BEFORE US : ITA.1022/BANG/2016 PAGE - 3 03. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A SALARIED EMPLOYEE OF M/S. ZENITH SOFTWARE LTD, FOR THE PERIOD 01.04.2009 TO 31.03.2010. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY, AS PER T HE AIR TRANSACTION DETAILS, ASSESSEE HAD MADE A CASH DEPOSIT OF RS.49,20,000/- IN STATE BANK OF INDIA, SINGANALLUR BRANCH, COIMBATORE. THERE WAS NO RESPO NSE TO THE NOTICES ISSUED U/S.143(2) OF THE ACT. FINALLY NOTICE WAS S ENT TO THE ASSESSEE THROUGH E-MAIL, FOR WHICH THE ASSESSEE RESPONDED, W HEREIN IT WAS SUBMITTED BY THE ASSESSEE, AS UNDER : MY FATHER (MR K. PONNUSWAMY), HIS BROTHER (LATE MR . K. PALANISAMY) AND FAMILY AND HIS SISTER (LATE MRS. DH ANALAKSHMI) FAMILY TOGETHER SOLD AN ANCESTOR PROPERTY ON 10/8/2009 TO MR. P. AYYADURAI, SON OF MR. PARVATHI MUTU NADAR UNDER A REGISTERED S ALE DEED DATED 10/8/2009 AND SHARED THE FORTUNE WITH THREE OF THEM .. MY FATHER GAVE ME A SUM OF RS.49,20,000/- AND IVE DEPOSITED THE S AME ON 10/08/2009. THE ONLY EVIDENCE WE HAVE IS THAT IS A VAILABLE IN THE REGISTER OFFICE, SINGANALLUR, COIMBATORE, TAMILNADU ..... IM SENDING YOU THIS E-MAIL...... I REQUEST YOU TO CONSIDER THI S MAIL.... THE AO AFTER RECEIPT OF THE E-MAIL REPLY HAD ASKED THE ASSESSEE TO FURNISH THE DETAILS OF THE QUESTIONNAIRE AND AFFIDAVIT STAT ING THAT THE AMOUNT WAS GIVEN TO HIM BY HIS FATHER OUT OF THE SALE PROCEEDS OF THE ANCESTRAL PROPERTY SOLD ON 10.08.2009, BUT NO RESPONSE WAS SUBMITTED. THEREFORE THE AO HAS HELD THAT THE ASSESSEE WAS UNABLE TO FURNISH PROOF IN RESPECT OF THE SOURCE ITA.1022/BANG/2016 PAGE - 4 OF CASH DEPOSIT OF RS.49,20,000/-. BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 04. THE CIT (A) CONFIRMED THE ADDITION MADE BY THE AO. IN PARA 6 AND 6.1 OF HIS ORDER, IT WAS HELD AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT, THE REMAND REPORT OF THE ASSESSING OFFICER AND THE REJO INDER FILED BY THE APPELLANT'S REPRESENTATIVE. IT IS SEEN FROM THE FA CTS OF THE CASE THAT OUT OF THE TOTAL CASH DEPOSITS OF RS.49,20,000/- MADE WITH SBI SINGANALLUR BRANCH COIMBATORE, ONLY RS.35 LACS HAVE BEEN WITHDR AWN AND WAS STATED TO BE DISTRIBUTED TO THE SIX LEGAL HEIRS OF THE SEL LERS, AND THE BALANCE RS.14.20,000/- WAS UTILIZED FOR THE APPELLANT'S OWN PURPOSE. EVEN THOUGH THE APPELLANT'S SUBMITTED THAT FOR SENT IMENTAL REASONS THE ENTIRE SALE PROCEEDS RECEIVED IN CASH BY PONNUSAMY THE ONLY LEGAL HEIR AVAILABLE AT THAT TIME OF MR. KANDASWAMY GOT DEPOSI TED IN THE BANK ACCOUNT OF HIS SON MR. PADMANABHAN, THE APPELLANT, HAS NOT BEEN SUBSTANTIATED WITH ANY DOCUMENTARY EVIDENCE EVEN BE FORE THE APPELLATE PROCEEDINGS. 6.1 FURTHER, OUT OF THE CASH DEPOSITS OF RS.49,20,0 00/- RS.35 LACS STATED TO BE DISTRIBUTED AMONG LEGAL HEIRS/RELATIVE S OF THE SELLERS FOUND TO BE NOT CORRECT AS THOSE SELLERS HAVE DENIED CATE GORICALLY HAVING RECEIVED SUCH CASH AND ALSO DENIED HAVING GIVEN ANY CASH TO THE APPELLANT FOR THE SAFE CUSTODY, IN THEIR REPLIES FI LED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER IN HER REP ORT SUBMITTED THAT THE RELATIVES OF THE APPELLANT SINCE HAVE DENIED FOR HA VING GIVEN ANY CASH FOR SAFE CUSTODY, THE CASH DEPOSITS MADE BY THE APP ELLANT IN HIS BANK ACCOUNT SHOULD NOT BE TREATED AS EXPLAINED. EVEN DU RING THE APPELLATE ITA.1022/BANG/2016 PAGE - 5 PROCEEDINGS THE APPELLANT HAS NOT GIVEN PROPER EXPL ANATION FOR THE SOURCE OF THE CASH DEPOSITS MADE WITH ANY COGENT EV IDENCE. IN THIS VIEW OF THE MATTERS THE EXPLANATION FOR THE SOURCE OF THE C ASH DEPOSITS GIVEN WERE FOUND NOT GENUINE AND ACTION OF THE ASSESSING OFFICER BY TREATING ENTIRE CASH DEPOSITS AS UNEXPLAINED INVEST MENT AND BROUGHT TO TAX U/S.69 OF THE INCOME TAX ACT IS HEREBY UPHEL D. NOW, THE ASSESSEE IS BEFORE US CHALLENGING THE ORDE R PASSED BY THE CIT(A), WITH THE GROUNDS MENTIONED HEREIN ABOVE. 05. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE COPY OF THE SALE DEED AND AFFIDAVIT ON BEHALF OF SHRI. A. SUBRA MANIAN AND SHRI. G. VELLINGIRI, TO ESTABLISH THAT THE MONEY DEPOSITED I N THE BANK ACCOUNT WAS BELONGING TO THE RELATIVES AND NOT THAT OF THE ASSE SSEE. 06. ON THE OTHER HAND THE LD. DR SUPPORTED THE ORDE R OF THE LOWER AUTHORITIES. 07. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. AS A MATTER OF FACT, THE ASSESSEE HAS ALSO PLACED ON RECORD COPIES OF THE SALE DEED DT.10.08.2009 IN RESPECT OF THE PR OPERTY WITH THE SALE AMOUNT OF RS.28,80,000/- EACH. THE TWO SALE DEEDS WERE EXECUTED BY P. SULOCHANA, S. SAKUNTHALA, P. SENTHILKUMAR, P. SIVAS WAMY AND S. VIJAYAKUMAR. IT IS THE CASE OF THE ASSESSEE THAT T HE TOTAL SALE CONSIDERATION WAS RECEIVED BY THE SELLERS FROM THE PURCHASER AT T HE TIME OF REGISTRATION ITA.1022/BANG/2016 PAGE - 6 OF THE DOCUMENT AND SHRI. PONNUSAMY, S/O. LATE KAND ASAMY AND SRI. PADMANABHAN ARE THE ATTESTING WITNESSES TO THE SALE DEED. IT IS THE CASE OF THE ASSESSEE BEFORE US THAT THE SALE CONSIDERATION RECEIVED BY THE SAID SELLERS WERE DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT AND SUBSEQUENTLY THE SAID AMOUNT WAS WITHDRAWN AND GIVE N BY THE ASSESSEE TO THE SELLERS. SIMILAR ARGUMENT WAS RAISED BEFORE TH E CIT (A) AND THE CIT (A) CALLED FOR THE REMAND REPORT FROM THE AO. THE AO VIDE LETTER DT.07.04.2015 HAS SUBMITTED BEFORE THE CIT (A) THAT THE SELLERS (RELATIVES OF THE ASSESSEE) HAD CATEGORICALLY DENIED HAVING GI VEN ANY CASH TO THE ASSESSEE FOR DEPOSITING IN THE BANK. THE CIT(A) IN PARA 5.2 HAS RECORDED AS UNDER : 5.2 THE ASSESSEE IS A SALARIED EMPLOYEE OF M/S ZENI TH SOFTWARE LTD HAS DEPOSITED CASH OF RS.49.20 LACS IN SBI SINGANAL UR BRANCH COIMBATORE AND THE SOURCES FOR THE SAME WERE EXPLAI NED TO BE THE SALE PROCEEDS OF THE ANCESTRAL PROPERTY OF HIS FATHER AN D THE SELLERS OF THE PROPERTY HAD GIVEN THE CASH FOR THE SAFE CUSTODY TO THE APPELLANT WHICH WAS DEPOSITED IN HIS BANK ACCOUNT. OUT OF WHICH AN AMOUNT OF RS.3950025/- WAS WITHDRAWN SUBSEQUENTLY AND STATED TO BE RETURNED TO THE RELATIVES MENTIONED IN THE SALE DEED. THE ASSES SING OFFICER HAS STATED THAT THERE WAS NO CONFIRMATION FOR HAVING RE CEIVED BY THE RELATIVES RATHER THEY HAVE CATEGORICALLY DENIED OFF HANDING OVER THE CASH TO THE APPELLANT FOR SAFE CUSTODY. THE ASSESSING OFFIC ER IN HER REMAND REPORT STATED THAT THE MAIN ISSUE IN THIS CASE IS THE ADDI TION MADE ON ACCOUNT OF ITA.1022/BANG/2016 PAGE - 7 CASH DEPOSIT IN THE SBI IN THE APPELLANT'S ACCOUNT THE SOURCE OF WHICH IS EXPLAINED TO BE THE AMOUNT OF SALE CONSIDERATION RECEIVED BY THE APPELLANT'S RELATIVES, WHICH WAS GIVEN TO HIM FOR S AFE CUSTODY PURPOSE. THIS FACT HAS BEEN DENIED BY THE RELATIVE OF THE AP PELLANT WHO ARE THE SELLER OF THE RESIDENTIAL PROPERTY. ON THE FACTS AN D CIRCUMSTANCES OF THE CASE THE ADDITION MADE BY THE ASSESSING OFFICER MAY BE CONFIRMED. THE REPORT OF THE ASSESSING OFFICER HAS BEEN FORWAR DED TO THE APPELLANT FOR HIS OBJECTIONS IF ANY. THE APPELLANT HAS SUBMIT TED HIS REJOINDER DURING THE APPELLATE PROCEEDINGS. 07. IT IS AN ADMITTED POSITION THAT THE ASSESSEE IS A SALARIED EMPLOYEE AND IT IS NOT POSSIBLE FOR HIM TO EARN OR RAISE SUCH A HUGE AMOUNT AND DEPOSIT THE SAID AMOUNT IN HIS BANK ACCOUNT. IN FACT, THE ASSESSEE HAS GIVEN THE EXPLANATION THAT THE SAID AMOUNT WAS THE AMOUNT OF CONSIDERATION RECEIVED BY THE ASSESSEE FROM HIS RELATIVE WHO IN TURN HAD R ECEIVED THIS AMOUNT ON SALE OF THEIR LAND. THOUGH THE AO HAS SUBMITTED T HAT THE RELATIVES HAVE DENIED OF HAVING GIVEN THE AMOUNT TO THE ASSESSEE, HOWEVER, NONE-THE-LESS, THE AO HAS NOT ENQUIRED FROM THE SAID SELLERS AS TO WHEN THEY HAVE RECEIVED THE AMOUNT AND WHAT THEY HAVE DONE WITH TH E SAID AMOUNT AND HAS ALSO NOT GIVEN AN OPPORTUNITY TO THE ASSESSEE TO CR OSS-EXAMINE THEM ON THIS ISSUE. SINCE THE ASSESSEE BEFORE US HAS FILED THE REGISTERED SALE DEED ALONG WITH THE TRANSLATED COPY AND AN AFFIDAVIT TO EXPLAI N THE SOURCE OF CASH DEPOSIT, IT IS THEREFORE NECESSARY IN THE PECULIAR FACTS AND CIRCUMSTANCES OF ITA.1022/BANG/2016 PAGE - 8 THE CASE TO REMAND THE MATTER TO THE FILE OF THE CI T (A) WITH A DIRECTION TO TAKE APPROPRIATE LEGAL PROCEEDINGS AS CONTEMPLATED UNDER THE LAW BY SUMMONING THE SELLERS BY ISSUE OF NOTICE U/S.133(6) OF THE ACT AND DECIDE THE ISSUE AFRESH. 08. WE MAY JUST MENTION THAT THE COORDINATE BENCH I N THE CASE OF S. VENKAT REDDY V. ITO [TS-6716-ITAT-2016(HYDERABAD)-O ] IN SIMILAR FACTS AND CIRCUMSTANCES AFTER RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF P. K. NOORJAHAN [TS-5002-SC-19 97-O], HAS HELD THAT MERELY THE ASSESSEES FAILURE TO EXPLAIN THE SOURCE OF CASH WILL NOT AUTOMATICALLY ATTRACT THE ADDITION OF THE CASH DEPO SIT. OTHER ATTENDING CIRCUMSTANCES ARE ALSO TO BE CONSIDERED LIKE THE CA PACITY OF THE ASSESSEE TO EARN ETC., 09. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH DAY OF MAY, 2017. SD/- SD/- (INTURI RAMA RAO) (LAL IT KUMAR) ACCOUNTANT MEMBER JUDICIAL M EMBER ITA.1022/BANG/2016 PAGE - 9