Shri R.Ananda Krishnan, CHENNAI V. ITO, CHENNAI

ITA 1217/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52097 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K RAVI
• Keywords: Unexplained cash credit; Gift
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1217/MDS/2011 (ASSESSMENT YEAR : 2007-08) SHRI R. ANANDA KRISHNAN NO. 32, GANGA NAGAR FIRST CROSS STREET, KODAMBAKKAM CHENNAI 600 024. PAN : AGTPR 9323 C (APPELLANT) VS. THE INCOME TAX OFFICER SALARY WARD IV(1), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI K. RAVI, ADVOCA TE RESPONDENT BY : SHRI SHA JI P. JACOB, SR. DR. DATE OF HEARING : 01.12.2011 DATE OF PRONOUNCEMENT : .12.2011 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY ASSESSEE FOR THE ASSESS MENT YEAR 2007-2008 AGAINST THE ORDER DATED 25.03.2011 OF COM MISSIONER OF INCOME TAX -VI, CHENNAI. I.T.A. NO. 1217/MDS/11 2 2. THE ASSESSEE HAS RAISED FIVE GROUNDS OF APPEAL I N ALL. HOWEVER, THE ONLY ISSUE ARISING OUT OF THESE GROUND S IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 16,35,400/- AS UNEXPLAINED CASH CREDITS. 3. FACTS, IN BRIEF, RELATING TO THIS ISSUE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DEPOSITED RS . 17,35,400/- IN HIS SAVINGS BANK ACCOUNT. THE ASSESSEE EXPLAINED T HIS DEPOSIT AS GIFT RECEIVED IN CASH FROM HIS FATHER SHRI RAMAMURT HI AND FROM HIS PATERNAL BROTHER SHRI BABU. IN SUPPORT OF THE SAME , FILED CONFIRMATION STATEMENT FROM HIS FATHER AND PATERNAL BROTHER, SALE PROCEEDS CONFIRMATION FROM THE BUYER OF PINE TREES AND COPIES OF PATTA. IT WAS STATED THAT THEY WERE NOT HAVING PAN AND FULL ADDRESS WITH PIN CODE WAS NOT GIVEN. ALL THE SALE PROCEEDS WERE STATED TO HAVE BEEN RECEIVED THROUGH CASH. THE ASSESSING OFF ICER WAS OF THE VIEW THAT AS THE PAN WAS NOT GIVEN, THE IDENTITY OF THE DONOR WAS NOT VERIFIABLE AND THEREFORE, HE TREATED THE AMOUNT OF RS. 17,35,400/- AS UNEXPLAINED CASH CREDIT AND ADDED T O THE TOTAL INCOME OF THE ASSESSEE. I.T.A. NO. 1217/MDS/11 3 4. IN APPEAL, THE LD. CIT(A) RESTRICTED THE DISALL OWANCE TO RS. 16,35,400/-. 5. AGGRIEVED BY THIS ORDER OF THE LD. CIT(A), THE A SSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE A.O. HAS OBSERVED THAT THE ASSESS EE HAS MADE CASH DEPOSIT OF RS. 17,35,400/- IN HIS BANK ACCOUNT DUR ING THE YEAR UNDER CONSIDERATION. HE HAS ALSO OBSERVED THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF SUCH DEPOSITS AS GIFT RECEI VED FROM HIS FATHER SHRI RAMAMURTHI AND HIS PATERNAL UNCLE SHRI BABU. THE A.O. HAS ALSO OBSERVED THAT THE ASSESSEE HAS FILED CONFI RMATION FROM THE DONORS AND IN SUPPORT OF THE SOURCE OF MONEY OF THE DONORS HAS ALSO FILED CONFIRMATION OF THE BUYERS OF PINE TREES WITH PATTA. THE A.O. BEING OF THE VIEW THAT AS PAN WAS NOT GIVEN THE IDE NTITY OF THE DONORS WAS NOT VERIFIABLE AND HENCE TREATED THE DEP OSIT OF ` 17,35,400/- AS UNEXPLAINED CASH CREDIT UNDER SECTIO N 68 OF THE ACT I.T.A. NO. 1217/MDS/11 4 AND MADE ADDITION TO THE INCOME OF THE ASSESSEE. T HE LD. CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS. 1 LAKH AND CONFIRMED THE BALANCE OF RS. 16,35,400/-. ACCORDING TO THE LD. CIT(A), ASSESSEE HAS FILED ALL DOCUMENTS PRIMA FACIE TO PROVE THE CA PACITY OF THE DONORS TO DONATE THE SUM OF RS. 17,35,400/- TO THE APPELLANT AS GENUINE. THE LD. CIT(A), HOWEVER, CONSIDERING THE CLOSE RELATION OF THE ASSESSEE WITH THE CREDITORS SHRI RAMAMURTHY, TH E FATHER OF THE ASSESSEE AND SHRI BABU, THE PATERNAL UNCLE OF THE A SSESSEE, CONSIDERED IT FAIR TO ALLOW A SUM OF RS. 50,000/- IN EACH CASE AS THE ASSESSEE HAD FILED NECESSARY EVIDENCE, SUCH AS, LAN D HOLDING DETAIL OF VAO CERTIFICATE, ETC. THE LD. A.R. OF THE ASSES SEE POINTED OUT BEFORE US THAT THE IDENTITY OF THE DONORS ARE NOT I N DOUBT AS PROVED BY EVIDENCE, SUCH AS, LAND HOLDING DETAILS OF VAO C ERTIFICATE FILED BEFORE THE LOWER AUTHORITIES. NO DEFECT IN ANY OF THE ABOVE EVIDENCES FILED BY THE ASSESSEE COULD BE POINTED OU T BY THE DEPARTMENT. HE CONTENDED THAT MERE ABSENCE OF PAN CANNOT LEAD TO THE CONCLUSION THAT THE IDENTITY OF THE DONORS I S DOUBTFUL. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CA SE, IT IS ALSO OBSERVED THAT THE GENUINENESS OF THE TRANSACTION WA S SUPPORTED BY I.T.A. NO. 1217/MDS/11 5 CONFIRMATION LETTERS IN WHICH NO DEFECT WAS POINTED OUT BY THE REVENUE. IN SO FAR AS THE CAPACITY OF THE DONORS I S CONCERNED, THERE IS NO DISPUTE AND IT HAS BEEN ADMITTED BY BOTH THE LOWER AUTHORITIES THAT EVIDENCES IN SUPPORT OF THE SAME WAS FILED BY THE ASSESSEE IN WHICH NO DEFECT COULD BE POINTED OUT BY THE REVENUE . THERE WAS NO BASIS FOR THE LD. CIT(A) TO ACCEPT RS. 1 LAKH O NLY AS GENUINE OUT OF RS. 17,35,400/- AND REJECT THE SAME EXPLANATION IN RESPECT OF BALANCE AMOUNT OF RS. 16,35,400/-. THE CONFIRMATI ON BEING BASED ON NO MATERIAL AND ONLY ON WHIMS AND CAPRICE ARE NO T SUSTAINABLE. THE LD. D.R. SUPPORTED THE ORDER OF THE LD. CIT(A). ON THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT T HE IDENTITY OF BOTH THE DONORS WHO ARE CLOSE RELATIVES OF THE ASSE SSEE, NAMELY, SHRI RAMAMURTHY, THE FATHER OF THE ASSESSEE AND SHR I BABU, THE PATERNAL UNCLE OF THE ASSESSEE STANDS ESTABLISHED B Y THE ASSESSEE. THE GENUINENESS OF THE TRANSACTION IS SUPPORTED BY CONFIRMATION LETTERS AND NO DEFECT IN THE SAME COULD BE POINTED OUT BY THE REVENUE. THE CREDIT WORTHINESS OF THE DONORS IS NOT IN DISPUTE AND THE LOWER AUTHORITIES HAVE ADMITTED THAT MATERIAL W AS BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THE CAPACITY OF THE DONORS. IN THE I.T.A. NO. 1217/MDS/11 6 ABOVE FACTS AND CIRCUMSTANCES, WE FIND THAT THERE I S ABSOLUTELY NO BASIS FOR THE LD. CIT(A) TO REJECT THE EXPLANATION IN RESPECT OF GIFT OF RS. 16,35,400/- AFTER ACCEPTING THE GIFT OF RS. 1 LAKH AS GENUINE. ADDITION OF RS. 16,35,400/-, BEING NOT BASED ON ANY MATERIAL BROUGHT ON RECORD, IN OUR CONSIDERED OPINION, THE S AME CANNOT BE SUSTAINED. WE, THEREFORE, DELETE THE ADDITION OF R S. 16,35,000/- AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 1 ST DECEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 1 ST DECEMBER, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE