R. Jhansi Rani, Hyd, Hyderabad V. ITO, Hyderabad

ITA 114/HYD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2837 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-07-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment
• Section: 68; 69; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A : HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.114/HYD/2011 ASSESSMENT YEAR 2007-2008 SMT. R.JHANSI RANI HYDERABAD PAN AHIPD5976B VS. I.T.O. WARD 4 (3) HYDERABAD (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI S.RAMA RAO, (A.R.) FOR RESPONDENT : SHRI M.H. NAIK (D.R.) DATE OF HEARING : 08.04.2013 DATE OF PRONOUNCEMENT : 03.05.2013 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. 1. THIS APPEAL FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT (A)-V, HYDERABAD DATED 11.11.2010 FOR THE ASSESSMENT YEAR 2007-2008. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE HAS DERIVED INCOME TOWARDS SALARY FROM RJV MARKETING PVT. LTD. AS MANA GING DIRECTOR BESIDES INSURANCE COMMISSION FROM BAJAJ ALLIANCE LIFE INSUR ANCE CO. LTD. THE ASSESSEE FIELD RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 -2008 ON 10.7.2007 DECLARING TOTAL INCOME OF RS.2,33,628/-. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143 (1) OF THE I.T.ACT, 1961. THE CAS E WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED. RETURN WAS COMPL ETED UNDER SECTION 143 (3) OF THE ACT. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143 (2) MADE TWO ADDITIONS VIZ., (A) UNEXPL AINED CASH CREDITS UNDER 2 SECTION 68 OF THE ACT AMOUNTING TO RS.11,55,480/- A ND (B) UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT FOR RS.5,50, 000/-. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT (A). REGARDING THE FIRST ADDITION OF RS.11,55,480/- UNDER SECTION 68, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DEPOSITED RS.40,55,480/- IN H ER BANK ACCOUNT IN AXIS BANK LTD. ON VARIOUS DATES. THE A.R. WHILE EXPLAINI NG THE SOURCE STATED THAT THE DEPOSITS WERE MADE OUT OF THE COLLECTION MADE F ROM VARIOUS CUSTOMERS TOWARDS THE INSTALLMENT PREMIUM. IT WAS EXPLAINED T HAT SINCE BAJAJ ALLIANCE LIFE INSURANCE CO. LTD. ONLY ACCEPTS CHEQUES OR DDS FROM THEIR CUSTOMERS, THE ASSESSEE HAS TAKEN CASH FROM VARIOUS CUSTOMERS AND DEPOSITED IT INTO HER ACCOUNTS AND THEREAFTER, ISSUED CHEQUES OR DRAFTS I N FAVOUR OF INSURANCE COMPANY ON BEHALF OF VARIOUS CUSTOMERS. THE ASSESSI NG OFFICER GAVE CREDIT OF RS.29 LAKHS WHICH WAS ISSUED BY WAY OF DEMAND DRAFT BUT, ADDED AN AMOUNT OF RS.11,55,480/-. THE CIT (A) HELD THAT THE ASSESS EE IN THE STATEMENT OF FACTS AS WELL AS IN THE LATER WRITTEN SUBMISSIONS THAT A LIST OF CUSTOMERS IS ENCLOSED FOR REFERENCE IS INCORRECT AS NO LIST OF CUSTOMERS HAS BEEN ENCLOSED BEFORE HIM. THE CIT (A) FURTHER HELD THAT NOT A SINGLE NAME OF ANY CUSTOMER OR DETAILS OF ANY CUSTOMER HAS BEEN PROVIDED AND THE ASSESSEE HAS NOT CO-RELATED EVEN A SINGLE ENTRY OF HIS BANK ACCOUNT TO PROVE ITS CONTE NTIONS. HENCE, HE CONFIRMED THE ADDITION OF RS.11,55,480/- AS UNEXPLAINED INVES TMENT UNDER SECTION 68 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US A ND THE LEARNED COUNSEL FOR ASSESSEE SHRI S.RAMA RAO REITERATED THE SUBMISS IONS MADE BEFORE THE LEARNED CIT (A). WE ARE OF THE OPINION THAT IT IS F OR THE ASSESSEE TO PRODUCE THE EVIDENCE WITH RESPECT TO SOURCE OF THE DEPOSIT OF R S.11,55,480/-. IN THE ABSENCE OF SUBSTANTIATION BY THE ASSESSEE AND IN TH E ABSENCE OF DOCUMENTS WHICH ARE NECESSARY TO CO-RELATE THE ENTRIES IN THE BANK ACCOUNT TO PROVE THAT THE ASSESSEE HAS ONLY FACILITATED THE CUSTOMERS, WE ARE INCLINED TO CONFIRM THE ORDER OF THE CIT (A) RELYING ON THE DECISION OF R.B . MITTAL VS. CIT (2000) 246 ITR 283 WHEREIN IT HAS BEEN HELD THAT THE ASSESSEE WAS EXPECTED TO ESTABLISH THE 3 PROOF OF IDENTITY OF HIS CREDITORS, THE CAPACITY OF HIS CREDITORS TO ADVANCE MONEY AND THE GENUINENESS OF THE TRANSACTIONS IN ORDER TO DISCHARGE THE ONUS IMPOSED ON HIM UNDER SECTION 68 OF THE ACT. 6. WITH RESPECT TO SECOND ISSUE OF THE ADDITION OF RS.5,50,000/- ON ACCOUNT OF INVESTMENT IN LAND. DURING THE YEAR THE ASSESSEE PURCHASED A PLOT OF 167 SQ. YARDS IN SRINIDHI COLONY FOR A CONSIDERATION OF RS. 5,50,000/-. ASSESSEE HAD EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE INC OME FOR THE LAST 3 YEARS WITH REGARD TO HER AND HER HUSBAND TOTALED TO RS.8,98,85 7/- AND THIS WAS SUFFICIENT TO MEET THE COST OF THE PLOT. IN THE APPEAL BEFORE THE CIT (A) THE ASSESSEE REITERATED THE SUBMISSIONS AS FOLLOWS : SOURCE FOR THE PURCHASE OF PROPERTY : I HAVE PURCH ASED THE PLOT (PLOT AREA 167. SQ. YARDS) AT SRINIDHI COLONY FOR RS.5,50 ,000/- (INCLUDING COST OF REGISTRATION) FROM MY PAST SAVINGS AND CURRENT Y EAR INCOME. I HAVE THE TOTAL INCOME OF RS.2,50,950/-, RS.1,77,500/- AND RS .86,500/- FOR LAST THREE ASST YEARS I.E., ASST YEAR 2007-08 TO ASST YE AR 2005-2006 RESPECTIVELY. FURTHER, MY HUSBAND R.SREEDHAR REDDY ALSO ASSESSED TO INCOME TAX VIDE PAN AFIPR5111A AND HIS TOTAL INCOME AS PER HIS ICOME TAX RETURN ARE RS.1,60,150/-, RS.1,08,000/- AND RS. 1,15,757/- (INCLUDING AGL. INCOME OF RS.60,000/-) FOR THE LAST THREE ASST YEARS I.E., ASST YEAR 2007-08 TO ASST YEAR 2005-2006 RESPECTIVE LY). TOTAL OF THESE THREE YEARS INCOME IS AMOUNTING TO RS.8,98,857/- IS SUFFICIENT TO MET THE TOTAL COST OF PLOT PURCHASED DURING THE YEAR. (APPE LLANT HAS SUBMITTED ALL THE ABOVE SAID INCOME TAX RETURN COPIES TO THE ASSE SSING OFFICER). 7. THE CIT (A) MADE A CALCULATION THAT THE AMOUNT L EFT OUT OF THE DECLARED INCOME OF RS.89,88,57/- REDUCED BY THE COST OF PLOT IS ONLY RS.3,48,857/- OR RS.1,16,285/- PER ANNUM OR RS.9,690/- PER MONTH. TH E CIT (A) ELABORATELY DISCUSSED THAT THE MEAGER AMOUNT OF RS.9,690/- PER MONTH FROM WHICH TAX AND INSURANCE PREMIUM HAVE TO BE DEDUCTED WOULD LEA VE A SMALL AMOUNT OF HOUSEHOLD EXPENDITURE WHICH WOULD NOT BE SUFFICIENT TO MEET THE EXPENDITURE 4 OF THE ASSESSEE. THE LEARNED CIT (A) OBSERVED THAT THE ASSESSEE HAS NOT SHOWN ANY BANK ACCOUNT FROM WHICH SUCH PAYMENTS WERE MADE AND HAS NOT PRODUCED ANY OTHER EVIDENCE TO SHOW THAT THE PAYMEN T OF RS.5,50,000/- WERE MADE OUT OF TAX PAID MONEY. HENCE, HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 8. ON APPEAL BEFORE THE TRIBUNAL, THE ASSESSEE PUT- FORTH THE ARGUMENTS SUBMITTED BEFORE THE CIT (A). WE ARE OF THE OPINION THAT AS HELD BY THE LOWER AUTHORITIES THE AMOUNT WHICH IS LEFT AS BALANCE FOR PURCHASE OF PLOT WILL NOT BE SUFFICIENT TO MEET THE LIVELIHOOD ESPECIALLY AS EXP ECTED OUT OF THE MANAGING DIRECTOR OF THE COMPANY THAT TOO AFTER PAYMENT OF T HE TAX DUES. UNDER THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ASSES SEE HAS MISERABLY FAILED TO EXPLAIN THE SOURCE FOR THE PURCHASE OF THE SAID LAN D AND THE SAME HAS TO BE TREATED AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE I.T. ACT. RELYING ON THE DECISION OF SUMATI DAYAL 214 ITR 801 APPLYING T HE TEST OF HUMAN PROBABILITY IT IS VERY UNLIKELY THAT A PERSON WOULD BUY A PLOT, WITHOUT RETAINING ANY AMOUNT FOR HIS HOUSEHOLD EXPENSES. IN THE TAX HUGE PROBABILITY IT IS VERY UNLIKELY TH AT A PERSON WOULD BUY A PLOT WITHOUT RETAINING ANY AMOUNT FOR HIS HOUSE HOLD EXP ENSES. 9. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT, ON THIS THE 03 RD MAY, 2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATE 03 RD MAY, 2013. VBP/- 5 COPY TO 1. SMT. R.JHANSI RANI, 203, 3-2-870/3, VNR COMPLEX, KA CHIGUDA, HYDERABAD, PAN AHIPD5976B 1. THE INCOME TAX OFFICER, WARD 4 (3), HYDERABAD. 2. THE CIT (A)-V, HYDERABAD 3. THE CIT-IV, HYDERABAD 4. D.R. A BENCH, I.T.A.T. HYDERABAD