Sri subramani Ramappa , Bangalore V. The Income Tax Officer Ward-7(2)(4), Bangalore

ITA 1142/BANG/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0474 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 22-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISRA
• Keywords: Additional evidence; Corroborative evidences; Onus to prove; Condonation of delay
• Section: 142(1); 250; 201; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 1142 /BANG/201 7 (ASSESSMENT YEAR: 20 12 - 13 ) SHRI SUBRAMANI RAMAPPA, NO.73, (OL D NO.114), NEAR MARAMMA TEMPLE, KATHRIGUPPA, BANASHANKARI 3 RD STAGE, BANGALORE - 560 085 .APPELLANT PAN ALSPR 3160R VS. INCOME TAX OFFICER , WARD 7(2)(4), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI TATA KRISHNA, ADVOCATE. REVENUE BY: SHRI PRIYADARSHI MISRA, JCIT (D.R) DATE OF HEARING : 11.06 .20 20. DATE OF PRONOUNCEMENT : 19 .06 .20 20. O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) - 7 , BANGALORE PASSED U/S .1 43(3) AND U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT) . 2 ITA NO. 1142/BANG/2017 THE LDAR SUBMITTED THAT THE ASSESSEE HAS FILED A CONDO NATION PETITION FOR DELAY OF 29 DAYS IN FILING THE APPEAL AND PRAYED FOR CONDONATION OF DELAY . THE LDDR HAS NO SERIOUS OBJECTION S ON THE DELAY. ACCORDINGLY, WE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CONDONED THE DELAY AND ADMIT THE APPEAL . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 3 ITA NO. 1142/BANG/2017 3. THE BRIEF FACTS OF THE CASE ARE THAT , THE ASSESSEE IS AN INDIVIDUAL AND HAS INCOME FROM HOUSE PROPERTY. THE RETURN OF I NCOME FOR THE ASST. YEAR 2012 - 13 WAS FILED ON 21.03.2014 WITH TOTA L INCOME OF RS.2,47,100 / - . SUBSEQUENTLY THE CASE WAS 4 ITA NO. 1142/BANG/2017 SELECTED FO R SCRUTINY UNDER CASS AND NOTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE ISSUED . IN COMPLIANCE , THE LEARNED A UTHORIZED R EPRESENTATIVE APPEARED FROM TIME TO TIME AND SUBMITTED THE INFO RMATION AND THE CASE WAS DISCU SSED. THE ASSESSING OFFICER FIND THAT THE ASSE SSEE HAS PURCHASED A PROPERTY FOR RS.2,93,82,370 / - INCLUDING STAMP DUTY AN D REGISTRATION CHARGES AND DEALT ON THE STATEMENT OF AFFAIRS, BANK STATEMENTS AND STATEMENT OF UNSECURED CREDITORS FURNISHED BY THE ASSESSEE AT PAGE 1 O F THE ASSESSMENT ORDER AND OBSERVE THAT T HE ASSESSEE COULD EXPLAIN THE SOURCES TO THE EXTENT OF RS.2,20,57,200 / - AND FOR BALANCE OF RS.73,25,170 / - THE ASSESSING O FFICER HAS ACCEPTED THE SOURCE OF CASH LOAN OF RS.38,27,170/ - FRO M SMT. BHAGYA AND RS.35 LAKHS STATED TO HAVE BEEN PAID BY CHEQUE AS PER SALE DEED. THE LDAR EXPLAINED THAT THE SAID CHEQUE WAS NOT CLEARED AND HENCE THE PAYMENT WAS MADE IN CASH. THE ASSESSING OFFICER F OUND THAT THERE IS NO CASH SOURCE A VAILABLE WITH THE ASSESSEE TO MAKE PAYMENT IN LIEU OF CHEQUE AND THEREFORE IS TREATED AS UNEXPLAINED AND MADE ADDITION OF RS.35 LAKHS. SIMILARLY , THE ASSESSING OFFICER ON VERIFICATION OF THE BANK A CCOUNT, FOUND CASH DEPOSIT S OF RS.25,80,000 / - ON 15 - 3 - 2012 AND CALLED FOR THE SOURCES OF DEPOSIT . THE ASSESSEE EXPLAINED THAT , THE DEPOSIT IS OUT OF CASH LOAN OF RS 50 LAKHS OBTAINED FROM SMT. BHAGYA . WHEREAS , A.O OBSERVED THAT OUT OF THE ABOVE LOANRS 38,25,170 / - WAS UTILIZED BY THE ASSESSEE IN THE PURCHASE OF PRO PERTY AND THE BALANCE OF RS.11,74,830 / - IS ONLY AVAILABL E WITH THE ASSESSEE. THEREFORE, THE ASSESSI NG OFFICER HAS ALLOWED CREDIT FOR CASH SOURCE TO THE EXTENT OF RS.11,7 4,830 / - IN RESPECT OF BANK 5 ITA NO. 1142/BANG/2017 DEPOSIT OF RS25.80 LAKHS AND THE BALANCE OF RS.14,0 5,170 / - IS SUBJECT TO TAX AND ASSESSED THE TOTAL INCOME WITH OTHER ADDITIONS AT RS.96,52,271 / - AND PASSED THE ORDER UNDER SECTION 143 (3) OF THE ACT DT.23.03.2015. AGGRIEVED BY THE ASSESSMENT ORDER , THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT (APPEALS) . WHEREAS, TH E CIT (APPEALS) HAS CONFIRMED THE ADDITION OF RS.35 LAKHS AND IN RESPECT OF UNEXPLAINED CASH DEPOSITS OF RS.14,05,170 / - AND HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS10,21,170/ - AN D PARTLY ALLOWED THE APPEAL. AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) , THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL. 4. AT T HE TIME OF HEARING, THE LDAR SUBMITTED THAT THE ASS ESSEE HAS EXPLAINED SOURCES OF RS.35 LAKHS AND REFERRED TO CHEQUE NO.401779 DT.15.03.2012 FOR RS.35 LAKHS WHICH WAS NOT CLEARED BEFORE 31 - 03 - 2012. BUT, T HE ASSESSEE HAS PAID THE AMOUNT IN CASH IN LIEU OF CHEQUE IN SUBSEQUENT ASSESSMENT YEAR AND SUPPORTED WITH THE STATEMENT OF SOURCES AT PAGE 103 OF THE PAPER BOO K. SIMILARLY , F OR DEFICIT OF CASH DEPOSIT OF RS10,21,170/ - THE LEARNED AUTHORIZE D REPRESENTATI VES CONTENTION S ARE THAT THE ASSESSEE HAS SOURCE S OUT OF OPENING BALANCE OF CASH, RENTAL DEPOSITS AND WITHDRAWALS FROM BANK AND FILED A STATEMENT OF CASH FLOW REFERRED AT PAGE100 OF PAPER BOOK AND PR AYED FOR ALLOWING THE APPEAL. CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF CIT (APPEALS). 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON THE FIRST DISPUTED ISSUE OF ADDITION OF RS.35 LAKHS, THE CONTENTION OF THE LD. AR THAT THE 6 ITA NO. 1142/BANG/2017 ASSES SEE HA S ISSUED THE CHEQUE AND WAS NOT CLEARED. SUBSEQUENTLY IN THE NEXT ASST YEAR THE ASSESSEE HAS PAID R S.10 LAKHS ON 20.06.2012 AN D RS.15 LAKHS ON 13.07.2012 IN CASH TO VENDOR AND THE BALANCE IS STILL PAYABLE. THE ASSESSEE HAS PAID RS.25 LAKHS IN TWO INSTALLMENTS AND CONFIRMATION OF THE VENDOR IS FURNISHED. THE CIT (APPEALS) HAS NOT CONSIDERED THIS CONF IRMATION AS IT IS UNSIGNED AND WAS FILED AS PART OF WRITTEN SUBMISSIONS. WE FIND THE ASSE SSING OFFICER HAS NOT DISCUSSED THIS ISSUE IN THE ASSESSMENT P ROCEEDINGS AND THE NEW FACTS ARE EMERGING IN THE CASE. THE LD. DR OBJECTED FOR CONSIDERING THESE FACTS AS THAT THE ASSESSIN G OFFICER WAS DEPRIVED TO CHECK AND EXAMINE THE ISSUE. THE LDAR PRAYED THAT THE MATTER MAY BE RESTORED TO THE FILE OF ASSESSING OFFI CER. WE CONSIDERING THE SUBMISSIONS, FACTS AND THE EVIDENCES FILED ARE OF THE OPINION THA T THE CHEQ UE FOR RS.35 LAKHS REFERRED IN THE SALE DEED IS NOT ENCHASED BY THE VENDOR AND TH E ASSESSEE CLAIMS TO HAVE PAID RS.25 LAKHS IN TWO INSTALLMENTS BY CASH TO V ENDOR, WHICH WAS NOT DISCUSSED IN THE ASSESSMENT PROCEEDINGS BEFORE T HE ASSESSING OFFICER. ACCORDINGLY, WE SET - ASIDE THE ORDER OF CIT(A) ON THIS DISPUTED ISSUE AND RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER FOR EXAMINATION AND VERIFICA TION AN D ALLOW THIS GROUND OF APPEAL FOR STATISTICAL PURPOSES. 6. IN RESP ECT OF ADDITION OF RS.10,21,170/ - THE CONTENTION OF THE LD. AR THAT (I) RS.3 LAKHS IS OUT OF THE RENT AL DE POSITS RECEIVED IN CASH FROM THE TENANT(II) RS.2 LAKHS WAS SELF WITHDRAWAL FRO M THE BANK ON 14.03.2012 AND WAS DEPOSITED ON 7 ITA NO. 1142/BANG/2017 15.03.2012 AND (III) THE BALANCE OF RS.5,21,170/ - SOURCE BEING OUT OF OPENING BALANCE OF CASH AS ON 1 - 4 - 2011 OF RS 5,64,737/ - AND SUBSTANTIATED WITH THE CASH FLOW STATEMENT FOR THE F.Y. 201 1 - 12 AT PAGE 100 OF T HE PAPER BOOK . WE FIND ON THE FIRST ISSUE OF R ENTAL DEPOSIT OF RS.3 LAKHS CASH, THE ASSESSEE HAS NOT PRODUCED ANY EVIDE NCE IN SUPPORT OF THE SOURCE EITHER CONFIRMATION LETTER FROM THE TENANT OR COPY OF RENTAL DEED. THE LDAR CONTENTION S ARE THAT IT IS A PRACTICE FOLLOWED IN BANGALORE , WERE 10 MONTHS RENT DEPOSIT TO BE PAID BY THE TENANTS . FURTHER, THE CIT (APPE ALS) HAS ACCEPTED THE SOURCE OF RENTAL INCOME THEREFORE THE R ENTAL DEPOSIT HAS TO BE ACCEPTED. WE FOUND THE ARGUMENTS ARE NOT SUPPORTED WITH EV IDENCE TO SUBSTANTIATE THAT THE ASSESSEE HAS RECEIVED RS.3 LAKHS IN CASH AS RENTAL DEPOSIT FROM THE TENA NT IN THE FINANCIAL YEAR 2011 - 2012 AND LACK OF MERITS AND THEREFORE WE ARE NOT INCLINED TO GRANT RELIEF ON THIS ISSSUE AND DISMISS THE CONTENTIONS. ON T HE SECOND ISSUE OF SOURCE OF RS.2 LAKHS CASH WITHDRAWAL FROM BANK .THE LDAR HAS DEMONSTRATED THE BANK ACCOUNT ST ATEMENT AT PAGE 99 OF THE P APER BOOK DISCLOSING WITHDRAWAL OF RS.2 LAKHS ON 14.03 .2012 AND EXPLAINED THAT THE CASH DEPOSITS MADE ON 15 - 3 - 2012 IN BANK ACCOUNT INCLUDE RS.2 LAKHS SOURCE. WE FIND THE CIT (APPEALS) HAS NOT ACCEPTED THIS CONTENTION AS BANK STATEMENT REFLECT PAID TO H.ANILKUMAR. THE LDAR EXPLAINED THAT IT IS A SELF - WITHDRAWAL MADE BY SHRI H. ANIL KUMAR ON BEHALF OF THE ASSSESSE THE REFORE THE SOURCE HAS TO BE ALLOWED. THE 8 ITA NO. 1142/BANG/2017 ASSESSEE HAS FILED ADDITIONAL EVIDENCE APPLICATION FOR ADMITTING THE AFFIDAVIT EXECUTED BY H.ANIL KUMAR SUPPORTING THE ASSESSES STAND. WE ARE OF THE OPINION THAT THE ASSESSING OFFICER SHOULD BE PROVIDED OPPORTUNITY TO VERIFY AND EXAMINEE THE EVIDENCE FILED . ACCORDINGLY, WE RESTORE THE DISPUTED ISSUE OF SOURCE OF RS 2 LAKHS AND ADDITIONAL EVIDENCE TO THE FILE OF ASSESSING OFFICER TO VERIFY AND EXAMINATION . ON THE LAST ISSUE OF SOURCE OF RS.5,20,170/ - , THE CONTEN TION OF THE LDAR IS THAT, THE SOURCE BEING OUT OF OPENING BALANCE OF CASH AVAILABLE TO THE ASSESSEE AS ON 1.4.2011 AND SUPPORTED WITH CASH FLOW STATEMENTS AT PAGE 10 0 OF THE PAPER BOOK . WE FOUND THAT THE ASSESSEE ONLY FILED CASH FLOW STATEMENT WITHOUT AN Y SUPPORTING EVIDENCE TO SUBSTANTIATE THE OPENING BALANCE OF CASH. IN THE COURSE OF HEARING, THE B ENCH A SKED THE LDAR TO FILE THE CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 2010 - 2011 , AND THE EXPLANATIONS OF LDAR ARE NOT SATISFACTORY AND HE VEHEMENTLY S UBMITTED THAT TH E ASSESSEE HAS RENTAL INCOME IN THE EARLIER YEAR AND THE SAME SOURCE BE CONSIDERED. WE ARE NOT IN A POSITION TO UNDERSTAND , WHEN THE ASSESSEE HAS PREPARED CASH FLOW STATEMENT FOR FINANCIAL YEAR 2011 - 2012, BASED ON THE OPENING BALANCE AS O N 1 - 4 - 2011, THE BURDEN OF PROOF LIES ON THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE. SINCE NO EVIDENCE WAS FILED SUPPORTING THE OPENING BALANCE OF CASH NOR CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 2010 - 2011, THE A RGUMENTS ENVISAGED BY LDAR DOES NOT STAN D ON MERITS. A CCORDINGLY , WE DISMISS THE CONTENTIONS AND CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE . 9 ITA NO. 1142/BANG/2017 7. IN THE RESULT, THE ASSESSEE'S APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE . PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE C APTION PAGE. SD/ - SD/ - ( B.R. B ASKARAN ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 .06. 20 20 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGAL ORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TA X APPELLATE TRIBUNAL BANGALORE