Lekhraj Jain, V. ITO,

ITA 1050/BANG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0376 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 02-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KARUPUSWAMY J
• Assessee Lawyers: NAGINCHAND KHINCHA
• Keywords: Unexplained cash credit; Gift
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 1050/B ANG/20 1 3 (ASSESSMENT YEAR: 20 06 - 07 ) SHRI LEKHRAJ JAIN, NO.192, SEPPINGS ROAD, BANGA LORE. PA NO.AESPJ 0252 P VS. APPELLANT INCOME - TAX OFFICER, WARD 1(2), BANGALORE. RESPONDENT APPELLANT BY : SHRI NAGINCHAND KHINCHA, CA RESPONDENT BY : SHRI S.R.KARUPUSWAMY, JCIT(DR) DATE OF HEARING : 30/05/2016 DATE OF PRONOUNC EMENT : 03 /06/2016 O R D E R PER I NTURI RAMA RAO, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(A) - I, BANGALORE, DATED 13/05/2013 FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE ASSESSEE RAISED THE FOLLOWING GROUND S OF APPEAL: 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN ADDING A SUM OF RS. 3,60,000/ - ON THE GROUND THAT THE CREDITOR DID NOT HAVE ANY PAN AND HAS NOT FILED ANY RETURN OF INCOME AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD ERRED IN CONFIRMING THE ITA NO .1050 /BANG/201 3 PAGE 2 OF 5 SAME. THE CREDITOR IS IDENTIFIABLE AND HAD SOURCE TO GIVE THE AMOUNT. THE CREDITOR HAD ALSO FILED CONFIRMATION LETTER FOR THE LOAN. THE TRANSACTION BEING GENUINE IS TO BE ACCEPTED. THE ADDITION BEING BAD IN LAW AND ON FACT IS TO BE DELETED. 2. THE ASSESSI NG OFFICER HAS ALSO ERRED IN LEVYING INTEREST U/S. 234B OF I.T. ACT, 1961. THE APPELLANT DENIES LIABILITY TO PAY INTEREST. THE INTEREST LEVIED U/S. 234B OF I.T. ACT, 1961 BEING WRONG IS TO BE DELETED. 3. IN VIEW OF THE ABOVE AND ON OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT ORDER PASSED BE QUASHED OR AT LEAST THE ADDITION MADE TO INCOME BE DELETED AND INTEREST LEVIED BE DELETED. 3. BRIEFLY FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MONEY LENDING. RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 07 WAS FILED ON 24/7/2016 DISCLOSING A TOTAL INCOME OF RS.1,03,409/ - . AGAINST THE SAID RETURN OF INCOME, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT' FOR SHORT] AT A TOTAL INCOME OF RS.7,13,409/ - . WHILE FRAMING THE ASSESSMENT ORDER, THE ASSESSING OFFICER (AO) MADE AN ADDITION OF RS.2 LAKHS ON ACCOUNT OF UNEXPLAINED GIFT AND ADDITION OF RS.3,60,000/ - AS UNEXPLAINED CASH CREDIT. 4. BEIN G AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE CIT(A) WHO VIDE IMPUGNED ORDER DELETED THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH G IFT . HOWEVER, CONFIRMED THE ADDITION ON ACCOUNT OF CASH CREDIT OF RS.3,60,000/ - BY HOLDING AS UNDER: ITA NO .1050 /BANG/201 3 PAGE 3 OF 5 4.5 I HAVE CAR EFULLY CONSIDERED THE APPELLANT S SUBMISSIONS AND ALSO PERUSED THE ASSESSMENT ORDER, REMAND REPORT, ETC. IT IS THE CONTENTION OF THE APPELLANT THAT HE HAD RECEIVED RS.3,60,000/ - FROM HUF. IT MAY BE SEEN FROM THE REPORT THAT THE HUF WAS HAVING AGRICULTURA L LANDS AND THE SAME WERE SOLD IN 1999 AND THE MONIES WERE GIVEN OUT OF THE SAID SALE PROCEEDS. THE AO IS NOT ABLE TO BELIEVE THAT THE SALE PROCEEDS RECEIVED IN 1999 WERE GIVEN TO THE APPELLANT IN THE YEAR 2006. IN THE ABSENCE OF ANY CREDIBLE EVIDENCE, T HE AO S REJECTION OF THE APPELLANT S CLAIM THAT HE HAD RECEIVED A LOAN FROM THE HUF IS JUSTIFIABLE. THEREFORE, THE FINDINGS OF THE AO ARE ACCEPTED AND THE ADDITION ON ACCOUNT OF THIS LOAN O RS.3,60,000/ - IS CONFIRMED. 5. BEING AGGRIEVED BY THIS PART OF THE CIT(A) S ORDER, ASSESSEE IS BEFORE US IN THE PRESENT APPEAL. 5.1 LEARNED AR OF THE ASSESSEE SUBMITTED THAT AN AMOUNT OF RS.3,60,000/ - WAS RECEIVED BY THE ASSESSEE FROM HIS HUF AND SAID AMOUNT WAS LENT BY HUF OUT OF SALE PROCEEDS OF AGRICULTURAL LAND IN THE YEAR 1999. THIS VERSION OF THE ASSESSEE WAS MERELY DISBELIEVED AND ADDITION WAS MADE. 5.2 ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE HAD PLACED RELIANCE ON THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HEAR D RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE ISSUE TO BE ADJUDICATED IN THE PRESENT APPEAL IS WHETHER EXPLANATION TENDERED BY THE ASSESSEE IN SUPPORT OF RECEIPT OF LOAN FROM HIS HUF IS TENABLE IN THE EYE OF LAW. THE ITA NO .1050 /BANG/201 3 PAGE 4 OF 5 ASSESSEE HAS STATED THAT THE SAID LOAN WAS RECEIVED FROM HIS HUF. IT WAS EXPLAINED THAT THE SOURCE FOR HUF WAS OUT OF SALE PROCEEDS OF AGRICULTURAL LAND IN THE YEAR 1999. IN SUPPORT OF THIS, CONFIRMATION LETTER WAS FILED IN THE CAPACITY OF KARTHA OF HIS HUF. THE ADDITION WAS M ADE BY THE AO DISBELIEVING THIS EXPLANATION. THE AO HAS NOT DOUBTED THE VERACITY OF THE CONFIRMATION LETTER. THE ADDITION WAS MADE MERELY DISBELIEVING THE EXPLANATION GIVEN BY THE ASSESSEE. THE AO HAS ALSO NOT DOUBTED THE TRANSACTION OF SALE OF AGRICULTURAL L AND IN THE YEAR 1999. THE ONLY ISSUE WHICH RAISED THE EYE BROWS IS THE GAP OF 7 YEARS BETWEEN THE DATE OF SALE OF AGRICULTURAL LAND AND GIVING OF LOAN TO THE ASSESSEE. UNLESS AND OTHERWISE REVENUE PROVES THAT THE SALE PROCEEDS WERE INVESTED SOMEWHERE ELS E, THE EXPLANATION CANNOT BE DISBELIEVED. NO ADDITION CAN BE MADE ON SURMISES AND CONJECTURES. IN THE CIRCUMSTANCES, WE HOLD THAT THE ADDITION MADE IS NOT CALLED FOR. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON THIS 03 RD JUNE , 2016 SD/ - SD/ - (VIJAY PAL RAO) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE D A T E D : 03 /0 6 /2016 SRINIVASULU, SPS ITA NO .1050 /BANG/201 3 PAGE 5 OF 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE