Smt. Harini M Shetty, V. ACIT,

ITA 1154/BANG/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8712 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR K SHANKAR PRASAD JT
• Keywords: Unexplained cash credit
• Section: 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.1154/BANG/2013 ASSESSMENT YEAR : 2005-06 SMT. HARINI M. SHETTY, NO.816, 13 TH MAIN, 3 RD BLOCK, KORAMANGALA, BANGALORE 560 034. PAN: AJEPS 2617J VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI NARENDRA SHARMA, ADVOCATE RESPONDENT BY : DR. K. SHANKAR PRASAD, JT. CIT(DR) DATE OF HEARING : 18.02.2015 DATE OF PRONOUNCEMENT : 27.02.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 03.05.2013 OF THE CIT(APPEALS), LTU, BANGALORE RELATING TO ASS ESSMENT YEAR 2005-06. 2. THE ASSESSEE IS AN INDIVIDUAL. SHE DERIVES INCO ME FROM HOUSE PROPERTY, CAPITAL GAINS AND OTHER SOURCES IN THE NA TURE OF INTEREST, DIVIDEND, ETC. SHE ALSO RECEIVES SHARE INCOME FROM PARTNERSH IP FIRM M/S. AKKAYYA ITA NO.1154/BANG/2013 PAGE 2 OF 6 CONSULTANCY SERVICES AND M/S. SATYANARAYANA PLANTAT IONS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT FIVE DEPOSITS OF RS.45,000 EACH WAS APPEARING IN THE BANK STATEMENT OF THE ASS ESSEE AS ON 1.3.05, 12.03.04 AND 29.12.04. THUS IN ALL, THERE WERE TO TAL DEPOSITS IN THIS PATTERN OF RS.6,75,000. THE AO CALLED UPON THE ASSE SSEE TO FURNISH NAMES AND ADDRESSES OF THE PERSONS FROM WHOM THE AFORESAI D AMOUNTS WERE RECEIVED, THE NATURE OF THE TRANSACTION AND WHY AMO UNTS HAVE BEEN PAID THROUGH DIFFERENT CHEQUES ON THE SAME DATE. 3. THE ASSESSEE, IN RESPONSE TO THE QUERY OF THE AO SUBMITTED THAT THE AFORESAID PAYMENTS ARE LOANS REPAID BY ONE MR. UMES H KUMAR THROUGH DDS. THE ASSESSEE ALSO SUBMITTED THAT THAT A TOTAL LOAN OF RS.12,50,000 WAS GIVEN BY THE ASSESSEE TO SHRI UMESH KUMAR ON 1. 6.2000. OUT OF THE AFORESAID LOAN, A SUM OF RS.12,50,000, RS.10 LAKHS WAS RECEIVED IN THE FORM OF DDS AND A SUM OF RS.2,50,000 WAS OUTSTANDIN G AS ON 31.3.2005. THE SAID OUTSTANDING WAS ALREADY PAID BY MR. UMESH KUMAR IN THE MONTH OF MAY, 2005. THE AO CALLED UPON THE ASSESSEE TO P RODUCE MR. UMESH KUMAR. THE ASSESSEE EXPRESSED HER INABILITY TO PROD UCE UMESH KUMAR AND ALSO TO FURNISH HIS COMPLETE POSTAL ADDRESS. THEREFORE, THE AO ISSUED SUMMONS TO THE ASSESSEE U/S. 131 OF THE ACT FOR HER APPEARANCE SO AS TO VERIFY THE GENUINENESS OF THE TRANSACTION. THE ASS ESSEE DID NOT RESPOND TO THE SUMMONS ISSUED BY THE AO. IN THE CIRCUMSTANCES , THE AO HELD THAT THE ASSESSEE HAS FILED TO DISCHARGE HER OBLIGATION TO E XPLAIN SATISFACTORILY THE CREDITS IN HER BANK ACCOUNT. ACCORDINGLY, A SUM OF RS.6,75,000 WAS ITA NO.1154/BANG/2013 PAGE 3 OF 6 TREATED AS UNEXPLAINED CREDIT AND ADDED TO THE TOTA L INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. 4. THE ASSESSEE, AGGRIEVED BY THE AFORESAID ORDER O F THE AO, FILED AN APPEAL BEFORE THE CIT(APPEALS). EVEN BEFORE THE CI T(A), SHE NEITHER FILED CONFIRMATION OF UMESH KUMAR NOR PRODUCED HIM FOR EX AMINATION. THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT UMESH KUM AR WAS KNOWN TO THE ASSESSEES HUSBAND AND ON HIS RECOMMENDATION, A LOAN OF RS.12,50,000 WAS GIVEN ON 1.6.2000 BY A CHEQUE DRAW N ON SCOTIA BANK. IT WAS ALSO POINTED OUT THAT THE LOAN OF RS.12.50 LAKH S WAS SHOWN ON THE ASSETS SIDE OF HER STATEMENT OF AFFAIRS FROM A.YS. 2001-02 TILL 2004-05. THE ASSESSEE CONTENDED THAT THE DISCLOSURE OF THE L OAN AMOUNT IN THE BALANCE SHEET AND RECEIPT OF REPAYMENT OF LOAN IN T HE FORM OF DDS WAS SUFFICIENT TO EXPLAIN THE CREDIT SATISFACTORILY. I T WAS ALSO ARGUED THAT THE ASSESSEE CANNOT BE CALLED UPON TO EXPLAIN THE SOURC E OF SOURCE. 5. THE CIT(A), HOWEVER, DID NOT AGREE WITH THE AFOR ESAID CLAIM OF THE ASSESSEE. SHE HELD THAT THE ASSESSEE FAILED TO DIS CHARGE THE IDENTITY AND CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRA NSACTION. THE CIT(A) WAS OF THE VIEW THAT IN THE ABSENCE OF EVEN A CONFI RMATION, THE AO WAS PRECLUDED FROM MAKING ANY ENQUIRY WITH REGARD TO TH E EXPLANATION OFFERED BY THE ASSESSEE. THE CIT(A) ALSO HELD THAT THE FAC T THAT LOAN WAS SHOWN IN THE BALANCE SHEET WILL NOT BE SUFFICIENT TO EXPLAIN SATISFACTORILY THE CREDIT IN QUESTION. SHE ALSO DREW ADVERSE INFERENCE FOR THE FAILURE OF THE ASSESSEE ITA NO.1154/BANG/2013 PAGE 4 OF 6 TO APPEAR BEFORE THE AO IN RESPONSE TO SUMMONS ISSU ED U/S. 131 OF THE ACT. 6. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSE SSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE CIT(A). HE FURTHER SUBMITTED THAT IN THE MATTER OF MAKING ADDITION U/S. 68 OR 69 OF THE ACT, THE AO HAS A DIS CRETION NOT TO MAKE AN ADDITION EVEN IN THE ABSENCE OF SATISFACTORY EXPLAN ATION AND IN THIS REGARD DREW OUR ATTENTION TO THE HONBLE SUPREME COURT DEC ISION IN SMT. P.K. NOORJAHAN, 237 ITR 570 (SC) . ACCORDING TO THE LD. COUNSEL, THE CIRCUMSTANCES POINTED OUT BY THE ASSESSEE BEFORE TH E CIT(A) VIZ., DISBURSEMENT OF THE LOAN BY THE ASSESSEE IN THE FOR M OF CHEQUES, DISCLOSURE OF THE LOAN IN THE BALANCE SHEET AND REP AYMENT OF THE LOAN IN THE FORM OF DDS SHOULD HAVE BEEN TAKEN NOTE OF BY THE R EVENUE AUTHORITIES AND THEY SHOULD NOT HAVE EXERCISED DISCRETION IN MAKING THE ADDITION U/S. 68 OF THE ACT. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. CO UNSEL FOR THE ASSESSEE AND ARE OF THE VIEW THAT THE SAME IS WITHO UT ANY BASIS. IT IS NO DOUBT TRUE THAT THE AO HAS DISCRETION IN NOT MAKING ADDITION U/S. 68 EVEN IN THE ABSENCE OF SATISFACTORY EXPLANATION OFFERED BY THE ASSESSEE WITH REGARD TO THE CREDIT APPEARING IN THE BOOKS OF ACCOUNT. I N THE PRESENT CASE, HOWEVER, THE ASSESSEE HAS NOT EVEN FURNISHED A COMP LETE POSTAL ADDRESS ITA NO.1154/BANG/2013 PAGE 5 OF 6 OF THE CREDITOR. IN THE ABSENCE OF THE SAME OR CON FIRMATION FROM THE CREDITOR, THE AO WAS PRECLUDED FROM MAKING ENQUIRY WITH REGARD TO THE GENUINENESS OF THE TRANSACTION AS WELL AS CREDITWOR THINESS OF THE CREDITOR. THE AO WANTED TO EXAMINE THE ASSESSEE ON THE ABOVE TWO ASPECTS, BUT THE ASSESSEE FAILED TO APPEAR IN RESPONSE TO SUMMON S ISSUED BY THE AO. IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ADDITION MADE U/S. 68 OF THE ACT WAS JUSTIFIED. WE DO NOT FIND ANY G ROUNDS TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS). ACCORDINGLY, THE A PPEAL BY THE ASSESSEE IS DISMISSED. 9. IN THE RESULT THE APPEAL BY THE ASSESSEE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF FEBRUARY, 2015. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 27 TH FEBRUARY, 2015. /D S/ ITA NO.1154/BANG/2013 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.