SHRI BRAMHANAND B. KARANJEKAR, Nagpur V. ITO,WARD-5(3), Nagpur

ITA 107/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93401 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Assessee Lawyers: S C THAKAR; C J THAKAR
• Keywords: Unexplained investment; Source of fund
• Section: 69C; 69

Judgement Text

1 ITA NO. 107/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO . 107/NAG/2013 ASSESSMENT Y EAR : 2009-10. SHRI BRAMHANAND KARANAJEKAR, THE INCOME-TAX OFFICER, 10, CORPORATION COLONY, V/S. WARD-5(3), NAGPUR. NORTH AMBASZARI ROAD, NAGPUR-440033. PAN ACKPK 2043H APPELLANT RESPONDENT. APPELLANT BY : SHRI C.J.THAKAR & SHRI S.C.THAKAR. RESPONDENT BY : SH RI S.R. .KIRTANE.. DATE OF HEARING - 23-04-2015 DATE PRONOUNCEMENT: 22 ND MAY, 2015 O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(APPEALS)-19, MUMBAI (CAMP OFFICE NAGPUR) DATED 12-02-2013 AND PE RTAINS TO ASSESSMENT YEAR 2009-10. THE GROUNDS OF APPEAL READ AS UNDER : 2 ITA NO. 107/NAG/2013 1. THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRM ING THE ADDITION OF ` .20,25,755/- AS UNEXPLAINED DEPOSITS IN BANK. ASSES SEE HAD COMPLETELY PROVED THE SOURCE WITH EVIDENCE. 2. THE LEARNED CIT(A) HAS ERRED IN IGNORING AND OV ER LOOKING THE WRITTEN SUBMISSION DT. 07-01-2013 AND SUBSTANTIAL EVIDENCE FILED WITH IT RUNNING INTO 79 PAGES AND CONSISTING OF NOT ONLY CONFIRMAT ION LETTERS FROM BAGDI FAMILY BUT ALSO THEIR PAN NUMBER, THEIR BANK ACCOU NTS WITH FULL DETAILS FROM WHICH THEY HAD ADVANCED MONEYS TO THE ASSESSEE BY CHEQUES AND THEIR I.T. RETURNS. THUS THE ORDER OF LEARNED CIT(A) IGNORING ALL THESE EVIDENCES IS WHOLLY PERVERSE. 3. LEARNED CIT(A) FAILED TO SEE AND APPRECIATE THA T THE ASSESSEE HAD CONCLUSIVELY PROVED THE IDENTITY OF THE CREDITORS, THEIR CAPACITY AND THEIR SOURCE, AND GENUINENESS OF THE TRANSACTIONS. 4. THE LEARNED CIT(A) FAILED TO SEE THAT THE ASSES SEE HAVING PRIMA FACIE PROVED THE SOURCE OF DEPOSITS IN BANK A/C. HAD DIS CHARGED THE BURDEN THAT LAY ON HIM AND IF THE A.O. WANTED TO REBUT THE SAM E, BURDEN LAY ON HIM. LEARNED CIT(A) FAILED TO SEE THAT THIS WAS A CASE OF ADDITION UNDER SECTION. 69 AND NOT OF CASH CREDIT IN BOOKS OF A/C. UNDER S ECTION. 68. SHE HAS TOTALLY MISDIRECTED HERSELF IN FACTS AND IN LAW. 2. IN THIS CASE THE ASSESSING OFFICER WAS EXAMINING THE SOURCE OF PURCHASE OF IMMOVABLE PROPERTY FOR ` .1,06,46,975/- BY THE ASSESSEE. IN THIS REGARD THE ASSESSING OFFICER NOTED THAT A CHEQUE OF ` .26,76,225/- WAS ISSUED FROM ASSESSEES SAVING BANK ACCOUNT. EXAMINING THE ASSESSEES SOURC E OF DEPOSITS IN THE BANK ACCOUNT IN THIS REGARD THE ASSESSING OFFICER OBSERV ED THAT THE ASSESSEE HAS BEEN UNABLE TO EXPLAIN THE CASH DEPOSIT AND ITS SOURCE A MOUNTING TO ` .20,25,75/-. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE H AS INCURRED A SUM OF ` .4,46,000/- ON STAMP DUTY AND REGISTRATION AND IN ABSENCE OF AN EXPLANATION OF SOURCE, THIS WAS ALSO ADDED TO THE ASSESSEES INCOM E. 3 ITA NO. 107/NAG/2013 3. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED B EFORE THE LEARNED CIT(APPEALS). THE ASSESSEES EXPLANATION FOR THE DE POSITS WERE AS UNDER : ` . 10 LAKH S FROM VARIOUS MEMBERS OF BAGDI FAMILY. ` .1,96,000/- FROM SALE OF AGRICULTURAL PRODUCE. ` .5,75,000/- AS LOAN FROM SMT. CHITRALEKHS KARANJEKAR . ` .4,45,000/- AS LOAN FROM SHRI SOMDATTA KARANJEKAR. THE LEARNED CIT(APPEALS) CONSIDERED THE ASSESSEES SUBMISSIONS AND HELD AS UNDER : ADVERTING TO THE FACT IN THE INSTANT CASE, IT IS EVIDENT THAT ASSESSEE HAS NOT OFFERED ANY EXPLANATION REGARDING THE CREDITWORTHI NESS OF BAGADI FAMILY. FOR LOANS TO BE TREATED AS GENUINE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS HAS TO BE SATISFIED CUMULATIVELY. REGA RDING THE CREDITWORTHINESS OF BAGADI, AS THE APPELLANT COULD NOT PROVE IT EITHER AT THE ASSESSMENT STAGE OR AT THE APPELLATE STAGE, THE AD DITION OF ` .10 LAKH MADE BY THE AO IS UPHELD. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN SATISF ACTORILY WITH DOCUMENTARY EVIDENCES THE SOURCE OF DEPOSIT OF ` .1,96,000/-. MERELY STATING THAT THE SOURCE OF DEPOSIT IS FROM AGRICULTURE CANNOT BE AC CEPTED WHERE GENUINENESS OF SUCH STATEMENT IS NOT ESTABLISHED B Y COGENT EVIDENCE. IN VIEW OF THIS, THE DISALLOWANCE OF ` .1,96,000/- IN ABSENCE OF SATISFACTORY EXPLANATION EITHER AT THE TIME OF ASSESSMENT PROCE EDINGS OR AT APPELLATE PROCEEDINGS IS UPHELD. IN RESPECT OF LOAN OF SMT. CHITRALEKHA KARAANAJEKA R, FROM THE FACTS ON RECORD IT IS NOTICED THAT THE DATE OF CREDIT OF 70 00 GBP AMOUNTING TO ` .5,75,000/- IS 09.06.2008. AS PER THE APPELLANT SUB MISSION, THE SALARY SLIP FILED PERTAINS TO DEC.-2009, JAN, FEB, MAR,2010. T HUS, THIS SALARY SLIPS CANNOT SUBSTANTIATE THE SOURCE OF 7000 GBP AS THE TRANSFER OF FUND ANTE- DATES THE SALARY RECEIVED. THE ASSESSEE HAS NOT PR ODUCED ANY EVIDENCE OF INCOME OF SMT. CHITRALEKHA KARANJEKAR IN THE YEAR 2 008-09 WHEN THE 4 ITA NO. 107/NAG/2013 ALLEGED SUM IS TRANSFERRED. THUS, THE ASSESSEE HAS FAILED TO FURNISH ANY EXPLANATION REGARDING THE CREDITWORTHINESS OF SMT. CHITRALEKHA KARANJEKAR FOR ADVANCING THE LOAN. IN ABSENCE OF ANY COGENT E VIDENCE FILED AT THE TIME OF ASSESSMENT AND APPELLATE PROCEEDINGS, THE ADDIT ION OF ` .5,75,780/- IS UPHELD. IN RESPECT TO LOAN FROM SHRI SOMDATTA KARANJEKAR F ROM THE WAGE AND TAX STATEMENT, IT IS EVIDENT THAT SHRI SOMDATTA KA RANJEKAR IS A STUDENT IN OAKIAHOME UNIVERSITY. HIS TOTAL WAGES TIPS & OTHER COMPENSATION IS 5354 US DOLLOR WHICH IN INDIAN CURRENCY WILL AMOUNT ` .2,30,222/- @ ` .42 TO A DOLLAR. THEREFORE A PERSON WHO HAS EARNING OF ` .2,30,222/- FOR THE YEAR, HOW HE CAN TRANSFER ` .4,69,535/- DEFIES ALL LOGIC. IN VIEW OF THIS FACT, IT IS CRYSTAL CLEAR THAT ASSESSEE IS UNABLE TO PROVE CRE DITWORTHINESS OF SHRI SOMDATTA KARANAJEKAR FOR TRANSFERRING FUND OF ` .4,65,000/- TO ASSESSEE ACCOUNT AND THEREBY MAKING INVESTMENT OF ` .4,46,000/-. THUS THE AO HAS RIGHTLY ADDED THIS AMOUNT U/S 69C OF THE I.T. ACT . THEREFORE, FOR THE MONEY RECEIVED CHITRALEKHA KAR ANAJEKAR AND SOMDATTA KARANJEKAR, THE ASSESSEE HAS FAILED TO PRO DUCE SOURCE OF FUNDS AND PARTICULARLY STATEMENT OF BANK ACCOUNT IN UK A ND USA RESPECTIVELY FROM WHICH TRANSFER OF MONEY HAD TAKEN PLACE. IT W AS ALSO NOT PROVED THAT LENDER HAD CORRESPONDING LIQUID FUNDS OUT OF WHICH IT COULD BE REASONABLY EXPECTED TO HAVE LENT MONEY. THOUGH IN CASE OF GIF T THE SAME VIEW HAS BEEN UPHELD BY THE HONBLE MUMBAI TRIBUNAL IN THE CASE OF DEEPAL SHROFF, 9 TAXMAAANN.COM 3. IN VIEW OF THE FACTS OF THE CASE AND RELEVANT JUDI CIAL PRONOUNCEMENT, I HOLD THAT THE ASSESSING OFICER WAS RIGHT IN REJEC TING THE CLAIM OF APPELLANT OF UNPROVED CASH CREDIT OF ` .20,25,755/- AND UNEXPLAINED INVESTMENT OF ` .4,46,000/- TOTALING TO ` .24,71,755/- AS THE BONAFIDE OF THE SAME WAS NOT ESTABLISHED. THE ADDITION MADE BY AO IS UPHELD. G ROUND IS DISMISSED. 4. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. 5. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS SUBMITTED VOLUMINOUS PAPER BOOK BEFORE THE LEARNED CIT(APPEAL S) EXPLAINING THE SOURCE OF 5 ITA NO. 107/NAG/2013 THE DEPOSITS AND EXPENDITURE. HE SUBMITTED THAT THE LEARNED CIT(APPEALS) HAS NOT PROPERLY GONE THROUGH THE SUBMISSIONS AND HAS DEALT WITH THE SAME IN A LACONIC MANNER. HE PLEADED THAT IF THE ASSESSEES SUBMISSIO NS ARE PROPERLY APPRECIATED, THE ASSESSEE WOULD GET THE NECESSARY RELIEF. AS REG ARDS THE LOAN FROM BAGDI FAMILY AMOUNTING TO ` .10 LAKHS, LEARNED COUNSEL SUBMITTED THAT THE ASSES SEE HAS SUBMITTED ALL THE NECESSARY DOCUMENTARY EVIDENCES, THEIR CONFIRMATION, PAN NOS., COPIES OF IT RETURNS. HE SUBMITTED THAT THE D ISALLOWANCE WAS SOLELY MADE ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE MEMBERS OF BAGDI FAMILY. LEARNED COUNSEL SUBMITTED THAT AT THE RELEVANT TIME THE MAIN PERSON AND KARTA SHRI RAJESH BAGDI WAS OUT OF STATION AND TIME WAS RE QUESTED. HOWEVER, SINCE THE CASE WAS TIME BARRED, THE ASSESSING OFFICER DID NOT GIVE FURTHER TIME TO PRODUCE THE MEMBERS OF BAGDI FAMILY. AS REGARDS THE DEPOSIT OF ` .1,96,000/- IN CASH AS AGRICULTURAL INCOME, LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAS SUBSTANTIAL AGRICULTURAL LAND IN VILLAGE JAMNAPUR AT ABOUT 7.5 HECTORS. MERELY BECAUSE THE ASSESSEE FAILED TO DECLARE AGRICULTURAL INCOME IN T HE RETURN, THERE IS NO GROUND THAT HOLDING THAT THE ASSESSEE HAS NO AGRICULTURAL INCOME. AS REGARDS LOAN FROM SMT. CHITRALEKHA AND SON SANJAY KARANJEKAR, LEARNED C OUNSEL SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ALL THE NECESSARY EVIDENCES . HE SUBMITTED THAT THE LEARNED CIT(APPEALS) WHILE REJECTING THESE CLAIMS HA S REFERRED TO CERTAIN ASPECTS WHICH WERE NEVER ENQUIRED BY HIM. HE SUBMITTED THA T HAD THE LEARNED CIT(APPEALS) ASKED FOR THE REQUISITE EXPLANATION, T HE ASSESSEE WOULD HAVE COMPLIED WITH THE SAME. 6. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 6 ITA NO. 107/NAG/2013 7. UPON CAREFUL CONSIDERATION, WE FIND THAT AS REGA RDS LOAN FROM VARIOUS MEMBERS OF THE BAGADI FAMILY A DISALLOWANCE HAS ONL Y BEEN MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE F AILED TO PRODUCE THE MEMBERS OF THE BAGADI FAMILY. IN THIS REGARD, ASSESSEES CO UNSEL HAS CONTENDED THAT THIS WAS BECAUSE THE MAIN PERSON AND KARTA OF THE SAID FAMILY WAS OUT OF STATION AND TIME WAS REQUESTED. IT IS ALSO NOTED THAT THE ASSES SEE HAD GIVEN OTHER DOCUMENTARY SUBMISSION REGARDING CONFIRMATION, PAN, COPY OF I.T. RETURN ETC. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, IN TEREST OF JUSTICE WILL BE SERVED IF THE MATTER IS REMITTED TO THE FILE OF THE ASSESS ING OFFICER TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNI TY. 8. AS REGARDS THE RECEIPT OF AGRICULTURAL INCOME IS CONCERNED, WE FIND THAT THE SAME HAS BEEN DISALLOWED ON THE GROUND THAT AGRICUL TURAL INCOME WERE NOT DISCLOSED IN THE RETURN OF INCOME EARLIER. IN THIS REGARD IT IS THE ASSESSEES SUBMISSION THAT THE ASSESSEE HAD 7.5 HECTORS OF LAN D. SO ` .1.96 LAKHS AGRICULTURAL INCOME SHOULD BE ACCEPTED. WE FIND THAT MERELY CLAI MING AS INCOME CANNOT JUSTIFY THE ASSESSEES POSITION. BY MEANS OF COGENT EVIDENCE THE ASSESSEE HAS TO ESTABLISH THE VERACITY OF AGRICULTURAL INCOME. IN T HE INTEREST OF JUSTICE, WE REMIT BACK THIS ISSUE ALSO TO THE FILE OF THE ASSESSING O FFICER. 9. AS REGARDS LOAN OF ` .5.75 LAKHS FROM ASSESSEES SISTER AND ` .4.45 LAKHS AS LOAN FROM ASSESSEES SON FROM ABROAD, ASSESSEES CO UNSEL HAS SUBMITTED THAT THE LEARNED CIT(APPEALS) HAS ONLY REFERRED TO CERTAIN A SPECT OF ENQUIRY MADE BY HIM. HE HAS SUBMITTED THAT THE ASSESSEE HAD COMPLETE EVI DENCE TO FRUCTIFY THEIR SOURCE FOR GRANTING THE LOAN. HE SUBMITTED THAT THE ASSESS EE CAN NOW PRODUCE ALL THE RELEVANT EVIDENCES. CONSIDERING THIS, IN OUR CONSID ERED OPINION, INTEREST OF JUSTICE 7 ITA NO. 107/NAG/2013 WILL BE SERVED IF THIS MATTER IS ALSO REMITTED TO T HE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. 10. ACCORDINGLY, WE REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE NECESSARY E VIDENCES BY WAY OF PAPER BOOK BEFORE THE ASSESSING OFFICER IN SUPPORT OF THE CLAI M. ACCORDINGLY THE ISSUE STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER. 11. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSE E STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MAY, 2015. SD/- SD/- (MUKUL K. SHRAWAT) (SHAMIM YAHYA) JUDICIAL MEMBER. ACCOUNTANT MEMBER NAGPUR, DATED: 22 ND MAY, 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. T RUE COPY. BY ORDER ASSISTANT REGISTRAR, I TAT, NAGPUR WAKODE