Sri Koramangala Munireddy Chandra , Bangalore V. Deputy Commissioner of Income Tax Circle-4(3)(1), Bangalore

ITA 1274/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7528 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 07-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BALAKRISHNAN N
• Assessee Lawyers: A SHANKAR
• Keywords: Unexplained cash credit; Gift; Business income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI VIJAY PAL RAO, JUDICIAL MEMBER IT A. NO. 1274/BANG/2017 ASSESSMENT YEAR : 2012 - 13 SHRI KORAMANGALA MUNIREDDY CHANDRA, NO. 18, 27 TH MAIN ROAD, 1 ST SECTOR, HSR LAYOUT, BANGALORE 560 034. PAN: ABOPC 5215A VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4 [3] [1], BANGALORE. APPELLANT RESPONDENT ITA. NO. 1275/BANG/2017 ASSESSMENT YEAR : 2012 - 13 SHRI KORAMANGALA MUNIREDDY MUNISWAMY REDDY, NO. 85/2/4, 17 TH CROSS, 24 TH MAIN, 1 ST SECTOR, HSR LAYOUT, VANGANAHALLI, BANGALORE 560 034. PAN: ACOPR 3893E VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4 [3] [1], BANGALORE. APPELLANT RESPONDENT A SSESSEE BY : SHRI A. SHANKAR, ADVOCATE RE VENUE BY : SHRI BALAKRISHNAN. N, ADDL. CIT (DR) DATE OF HEARING : 05 .0 9 .201 7 DATE OF PRONOUNCEMENT : 28 .09 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY TWO DIFFERENT BUT C ONNECTED ASSESSES FOR THE SAME ASSESSMENT YEAR 2012-13 AND THESE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT(A)-IV, BANGALORE BOTH DATED 17.02.201 7. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WA Y OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO. 12 74/BANG/2017 ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX [APPEALS] PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE ITA NOS. 1274 & 1275/BANG/2017 PAGE 2 OF 10 APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PR OBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE TAXED OVER AND ABOVE THE INCOME RETURNED BY THE APPELLANT OF RS. 28,43,330/- , UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN SUSTAINING A PORTION OF THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF EXPENDITURE DISALLOWED AMOUNT ING TO RS. 3,28,060/- BEING THE EXPENDITURE INCURRED BY THE AP PELLANT TOWARDS CLEARANCE OF GARBAGE, MAINTENANCE EXPENSES, DIESEL AND SALARIES WITHOUT APPRECIATING THAT THE SAID EXPENDITURE ARE ALL ALLOWABLE EXPENDITURE AS PER THE STATUE AND ARE ALL GENUINE A ND ALLOWABLE EXPENDITURE UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE. 4 GROUNDS ON ADDITION OF RS.36,30,000/- AS NOTIONAL RENT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. A. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] WA S NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY TH E LEARNED ASSESSING OFFICER OF RS. 36,30,000/- AS NOT IONAL RENT ON THE BASIS OF THE RENTS RECEIVED BY THE APPE LLANT DURING THE PREVIOUS YEARS ON THE FACTS AND CIRCUMST ANCES OF THE CASE. B. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FA ILED TO APPRECIATE THAT THE ANNUAL LETTABLE VALUE OF THE IMPUGNED PROPERTY IS NIL AS PER THE PROVISIONS OF S ECTION 23[1][C] OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. C. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] WA S NOT JUSTIFIED IN CONFIRMING THE AD-HOC COMPUTATION OF RS.36,30,000/- ON THE FACTS AND CIRCUMSTANCES OF TH E CASE. D. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FA ILED TO APPRECIATE THAT THE HOUSE PROPERTY WAS LET OUT F OR A PERIOD OF 13 YEARS AND SUBSEQUENTLY REMAINED VACANT FOR THE WHOLE ASSESSMENT YEAR DESPITE EFFORTS FROM THE OWNER TO SUBSEQUENTLY LET THE SAME ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 50% AMOUNTING TO RS. 1,86,000/- BEING THE ADDITION MADE BY THE LEARN ED ASSESSING OFFICER OF RS. 3,72,000/- IN THE ORDER OF ASSESSMEN T, THE SAID ADDITION IS BASED ON MERE SUSPICION, SURMISES AND ARBITRARY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LEARNED COMMISSIONE R OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE SAID CAST D EPOSITS WERE MADE BY THE APPELLANT OUT OF THE EXCESS SURPLUS AVAILABL E WITH THE APARTMENT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 1274 & 1275/BANG/2017 PAGE 3 OF 10 6. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED I N LAW IN CHARGING THE INTEREST UNDER SECTION 234B, 234C OF THE ACT AND FU RTHER THE CALCULATION OF INTEREST UNDER SECTION 234B, 234C IS NOT IN ACCORDANCE WITH LAW SINCE THE RATE, METHOD OF CALCULATION, QUA NTUM IS NOT DISCERNABLE FROM THE ORDER OF ASSESSMENT ON THE FAC TS AND CIRCUMSTANCE OF THE CASE. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 8. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DURI NG THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. SIMILARLY, THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO. 1275/BANG/2017 ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX [APPEALS] PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PR OBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE TAXED OVER AND ABOVE THE INCOME RETURNED BY THE APPELLANT OF RS. 54,99,756/- , UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. GROUNDS ON ADDITION OF RS.36,30,000/- AS NOTIONA L RENT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. A. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE LE ARNED ASSESSING OFFICER OF RS. 36,30,000/- AS NOTIONAL RENT ON THE BASIS OF THE RENTS RECEIVED BY THE APPELLANT DURING THE PREVIOUS YEARS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. B. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE ANNUAL LETTABLE VALUE OF THE IM PUGNED PROPERTY IS NIL AS PER THE PROVISIONS OF SECTION 23 [1][C] OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. C. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] WAS NOT JUSTIFIED IN CONFIRMING THE AD-HOC COMPUTATION OF R S.36,30,000/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. D. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE HOUSE PROPERTY WAS LET OUT FOR A PERIOD OF 13 YEARS AND SUBSEQUENTLY REMAINED VACANT FOR THE WHOL E ASSESSMENT YEAR DESPITE EFFORTS FROM THE OWNER TO SUBSEQUENTLY LET THE SAME ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. GROUNDS ON ADDITION OF RS.1,56,37,876/- AS UNEXP LAINED CASH ITA NOS. 1274 & 1275/BANG/2017 PAGE 4 OF 10 CREDITS UNDER SECTION 68 OF THE ACT ON THE FACTS AN D CIRCUMSTANCES OF THE CASE. A. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] ER RED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSI NG OFFICER OF RS.1,56,37,876/- AS UNEXPLAINED CASH CREDIT UNDER S ECTION 68 OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. B. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE CREDITS ARE TRANSACTIONS BETWEEN THE CO-OWNERS OF A PROPERTY INHERITED VIDE PARTITION DEED DATED 02/04/1997 FOR THE REPAYMENTS OF THE LOAN ACQUIRED FOR THE RENOVATION, REPAIR OF THE PROPERTY AND THE PAYMENTS ARE ALL RECEIVED THROUGH BANKING CHANNELS AND TRANSACTIONS BETWEEN THE PARTIES ARE G ENUINE AND CONSEQUENTLY THERE IS NO APPLICATION OF PROVISIONS OF SECTION 68 OF THE ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. C. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE CREDITS SHOWN AS GIFTS TO THE APPELLANT ARE ALL TAX ED AMOUNTS IN THE HANDS OF THE RESPECTIVE FAMILY MEMBERS BEING TH EIR SHARE OF THE RENT RECEIVED FROM THE JOINT PROPERTY AND THE S OURCE OF SUCH RECEIPTS HAVE ALL BEEN EXPLAINED AND THE ONUS CARTE D UPON THE APPELLANT UNDER SECTION 68 OF THE ACT HAS BEEN COMP LIED WITH AND CONSEQUENTLY NO ADDITION COULD HAVE BEEN MADE U NDER THE PROVISIONS OF SECTION 68 OF THE ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. D. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THERE ARE NO CONDITIONS IN THE STATUTE THAT GIFTS HAVE TO BE GIVEN ONLY ON OCCASIONS SUCH AS BIRTHDAY, MARRIAGE, ANNIVERSARY E TC., UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. E. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED HIS PRIMARY ONUS AS REGARD S TO THE NATURE AND SOURCE OF THE CREDIT ON THE FACTS AND CI RCUMSTANCES OF THE CASE. F. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] ER RED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSI NG OFFICER UNDER SECTION 68 OF THE ACT ON THE PREMISE THAT HE SAME RELATES TO THE BUSINESS INCOME OF THE APPELLANT, WHICH IS C ONTRARY TO THE FACTS SINCE THERE IS NO BUSINESS INCOME DERIVED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. G. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE TRANSACTIONS ARE BETWEEN THE APPELLANT AND HIS FAMI LY MEMBERS WHO HAVE ALL FILED THEIR RETURN OF INCOME AND APPLI CABLE TAXES HAVE BEEN PAID ON THE INCOME AND THE SAME CANNOT BE TAXED U/S. 68 AS UNEXPLAINED CASH CREDITS. ITA NOS. 1274 & 1275/BANG/2017 PAGE 5 OF 10 5. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED I N LAW IN CHARGING THE INTEREST UNDER SECTION 234B, 234C OF THE ACT AND FU RTHER THE CALCULATION OF INTEREST UNDER SECTION 234B, 234C OF THE ACT IS NOT IN ACCORDANCE WITH LAW SINCE THE RATE, METHOD OF CALCU LATION, QUANTUM IS NOT DISCERNABLE FROM THE ORDER OF ASSESSMENT ON THE FACTS AND CIRCUMSTANCE OF THE CASE. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 7. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DURI NG THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IN B OTH THESE APPEALS, ONE ISSUE IS COMMON I.E. AN ADDITION MADE BY THE AO OF RS. 36.30 LAKHS IN EACH CASE AS NOTIONAL RENT WHICH IS RAISED AS PER GROUND NO. 4 I N ITA NO. 1274/BANG/2017 AND AS PER GROUND NO. 3 IN ITA NO. 1275/BANG/2017.R EGARDING THIS ISSUE, HE SUBMITTED THAT HE DRAWN OUR ATTENTION TO PARA NO. 7 .3 OF ORDER OF CIT(A) WHERE IT IS NOTED BY CIT(A) THAT THE PROPERTY HAS REMAINED V ACANT SINCE 2011 AFTER THE PREVIOUS TENANT HAS VACATED THE PREMISES. HE SUBMI TTED THAT FROM THESE FACTS, IT IS CLEAR THAT THE PROPERTY IN QUESTION IN BOTH T HE CASES IS A LET OUT PROPERTY. HE DRAWN OUR ATTENTION TO THE PROVISIONS OF SECTION 23(1)(C) OF THE I.T. ACT, 1961 AND SUBMITTED THAT AS PER THIS SECTION, IF THE PROP ERTY IS LET OUT AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR A ND OWING TO SUCH VACANCY, ACTUAL RENT RECEIVED OR RECEIVABLE IS LESS THAN THE SAME REFERRED TO CLAUSE A OF SECTION 23(1) OF THE I.T. ACT, 1961 THEN THE AMOUNT SO RECEIVED / RECEIVABLE IS TAXABLE. HE SUBMITTED UNDER THESE FACTS, THE ADDIT ION MADE BY THE AO AND UPHELD BY THE CIT(A) SHOULD BE DELETED. LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VIE W OF THE FACTS OF THE PRESENT CASE AS PER WHICH IT IS ADMITTED POSITION THAT THE PROPERTY IN QUESTION IS A LET OUT PROPERTY AND IN VIEW OF THE PROVISIONS OF SECTION 2 3(1)(C) OF THE I.T. ACT, 1961, WE HOLD THAT SINCE THE RENT RECEIVED IS NIL BECAUSE OF VACANCY, THE ADDITION MADE BY THE A. O. IS NOT JUSTIFIED AND HENCE DELETE D. 6. REGARDING GROUND NO. 3 IN ITA NO. 1274/BANG/2017 , HE SUBMITTED THAT PAGE NO. 8 OF THE ORDER OF CIT (A) IS RELEVANT IN RESPECT OF THIS ISSUE. HE SUBMITTED THAT THIS IS A BASIS OF DISALLOWANCE THAT THE EXPENSES I NCURRED BY THE ASSESSEE ON ITA NOS. 1274 & 1275/BANG/2017 PAGE 6 OF 10 ACCOUNT OF SALARY AND WAGES CANNOT BE ALLOWED BECAU SE THE ASSESSEE COULD NOT PRODUCE THE RELEVANT DOCUMENTS. HE DRAWN OUR A TTENTION TO PAGE NO. 25 OF THE PAPER BOOK AND SUBMITTED THAT AS PER THE LEASE DEED EXECUTED BETWEEN THE ASSESSEE AND M/S. NETWORK SOLUTIONS PVT. LTD. AVAIL ABLE ON PAGES 14 TO 38 OF PAPER BOOK, IT IS SPECIFIED THAT THE LESSOR I.E. AS SESSEE HAS TO ARRANGE 100% POWER BACK-UP THROUGH DIESEL GENERATOR/S AND THE LE SSEE SHALL BE LIABLE TO BEAR THE FUEL CONSUMPTION CHARGES AS PER THE SITE USAGE ALONG WITH LABOUR AND TRANSPORT COST. AT THIS JUNCTURE, IT WAS OBSERVED BY THE BENCH THAT WHEN THE LESSEE HAS TO BEAR THE FUEL CONSUMPTION CHARGES ALO NG WITH LABOUR AND TRANSPORT COST, THEN HOW THE EXPENSES CAN BE ALLOWE D IN THE HANDS OF THE ASSESSEE. IN REPLY, THE LD. AR OF ASSESSEE HAD NOT HING TO SAY. IN THIS VIEW OF THE MATTER, WE FIND NO INFIRMITY IN THE ORDER OF CI T (A) ON THIS ISSUE. ACCORDINGLY GROUND NO. 3 OF THE ASSESSEES THIS APPEAL IS REJEC TED. 7. REGARDING GROUND NO. 5 IN ITA NO. 1274/BANG/2017 , HE SUBMITTED THAT THIS WAS THE CLAIM OF THE ASSESSEE BEFORE THE AO AND CIT (A) THAT CASH DEPOSIT IN BANK IS OUT OF EARLIER WITHDRAWALS. HE DRAWN OUR ATTENT ION TO PAGE 21 OF ORDER OF CIT (A) AND SUBMITTED THAT CIT (A) HAD ACCEPTED 50% OF CASH DEPOSIT ON ADHOC BASIS WITHOUT ANY REASONING AND THEREFORE, THE ENTI RE CASH DEPOSIT OF RS. 3.72 LAKHS SHOULD BE ACCEPTED AS EXPLAINED. AT THIS JUN CTURE, THE BENCH ASKED THE LD. AR OF ASSESSEE TO BRING THE DETAILS OF DATE-WIS E CASH DEPOSIT AND CASH WITHDRAWAL AND IN REPLY, THE LD. AR OF ASSESSEE SUB MITTED THAT DURING THE COURSE OF DAY, HE WILL FILE THE RELEVANT PORTION OF THE CASH BOOK AND HE FILED THE COPY OF CASH BOOK FROM 01.04.2011 TO 31.03.2012. T HE LD. DR OF REVENUE SUPPORTED THE ORDERS OF CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT OUT OF TOTAL CASH DEPOSIT OF RS. 3.72 LAKHS, ON 26.04.2011 RS. 2 LAKH S, ON 03.06.2011RS. 50,000, ON 07.07.2011 RS. 50,000 AND ON 13.10.2011 RS. 72,0 00, CIT(A) ACCEPTED THAT 50% OF SUCH CASH DEPOSIT AS EXPLAINED CASH DEPOSITS . FROM THE COPY OF CASH BOOK FILED BY LD. AR OF ASSESSEE, WE FIND THAT OPEN ING BALANCE AS ON 01.04.2011 WAS RS. 5,79,384/- AND CLOSING CASH BALA NCE AS ON 31.03.2012 IS RS. 2,90,184/-. AS PER THE COPY OF BALANCE SHEET A S ON 31.03.2012 AVAILABLE ON PAGE NO. 4 OF THE PAPER BOOK, THE CASH IN HAND A S ON 31.03.2012 IS SHOWN TO BE RS. 2,90,184/- TALLYING WITH THE CASH BOOK CO PY FILED BEFORE US. AS PER THE ITA NOS. 1274 & 1275/BANG/2017 PAGE 7 OF 10 CASH BOOK IN THE MONTH OF APRIL 2011, THERE IS CASH WITHDRAWAL OF RS. 3.50 LAKHS ON 13.04.2011 AND THEREAFTER, THERE IS CASH DEPOSIT OF RS. 2 LAKHS ON 26.04.2011. HENCE, IT IS SEEN THAT THE SOURCE OF T HIS CASH DEPOSITS OF RS. 2 LAKHS IS PROPERLY EXPLAINED. THE SECOND CASH DEPOS IT IS RS. 50,000/- ON 03.06.2011. IT IS SEEN THAT AN AMOUNT OF RS. 40,00 0 WAS WITHDRAWN FROM BANK ON 31.05.2011 AND THERE IS CASH DEPOSIT OF RS. 50,0 00 ON 03.06.2011. THE OPENING CASH IN HAND AS ON 01.06.2011 WAS RS. 5,67, 384/-. HENCE THIS CASH DEPOSIT IS ALSO PROPERLY EXPLAINED. REGARDING THE REMAINING CASH DEPOSIT OF RS. 50,000/- ON 07.07.2011 AND RS. 72,000/- ON 13.1 0.2011 ALSO, IT IS SEEN THAT EVEN AFTER ALL THE CASH DEPOSITS, THERE IS A CASH I N HAND AS PER THE CASH BOOK AND BALANCE SHEET OF RS. 2,90,184/- AS ON 31.03.201 2 AND THERE IS NO DISPUTE REGARDING THIS CLOSING CASH IN HAND OF RS. 2,90,184 /-. WE FIND NO MERIT IN THE ORDER OF CIT (A) AS PER WHICH, HE SAYS THAT ONLY 50 % CASH IS EXPLAINED AND REMAINING 50% IS NOT EXPLAINED AND THEREFORE, WE DE LETE THE ADDITION OF RS. 1,86,000/- UPHELD BY CIT(A). ACCORDINGLY, GROUND N O. 5 IS ALLOWED. 9. IN ITA NO. 1275/BANG/2017, THE REMAINING ISSUE I S REGARDING ADDITION OF RS. 1,56,37,876/- MADE BY THE AO AND UPHELD BY THE CIT( A) U/S. 68 OF THE I.T. ACT, 1961. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THIS IS NOTED BY CIT(A) ON PAGES 16 AND 17 OF HIS ORDER THAT THIS AMOUNT OF RS . 1,56,37,876/- IS ON ACCOUNT OF RECEIPT OF RS. 70,96,834/- FROM MRS. SAB ITHA, RS. 45,01,042/- FROM MASTER HITESH AND RS. 40,40,000 FROM MS. YASHASWINI AND THESE ARE DULY ENTERED IN THE BOOKS OF ACCOUNTS AND ONLY OBJECTION RAISED BY THE CIT(A) IS THIS THAT THE ASSESSEE COULD NOT ESTABLISH THAT THESE AM OUNTS WERE SUBJECTED TO TAX IN THE INDIVIDUAL HANDS OF THESE PERSONS. IN THIS REGARD, OUR ATTENTION WAS DRAWN TO PAGES 83 TO 87 OF PAPER BOOK CONTAINING IN COME TAX ACKNOWLEDGMENT, STATEMENT OF TOTAL INCOME AND FORM 26AS OF MRS. SAB ITHA, WIFE OF ASSESSEE FOR THE ASSESSMENT YEAR 2012-13 AND IT WAS POINTED OUT THAT GROSS INCOME OF MRS. SABITHA WAS RS. 63,78,153/- AND THE NET TAXABLE INC OME WAS RS. 42,21,576/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND RS. 5 ,94,868/- UNDER THE HEAD INCOME FROM OTHER SOURCES. HE FURTHER SUBMITTED TH AT SIMILARLY, THE INCOME TAX RETURN ACKNOWLEDGMENT AND STATEMENT OF TOTAL INCOME ALONG WITH FORM NO. 26AS OF SHRI HITESH K M, SON OF THE ASSESSEE FOR THE SAM E ASSESSMENT YEAR IS AVAILABLE ON PAGES 88 TO 90 OF PAPER BOOK AND IT IS SEEN THAT HIS TAXABLE ITA NOS. 1274 & 1275/BANG/2017 PAGE 8 OF 10 INCOME WAS ALSO SUBSTANTIAL I.E. RS. 41,38,300/-. REGARDING MS. YASHASWINI, IT WAS SUBMITTED THAT ON PAGES 94 TO 101 OF PAPER BOOK IS THE COPY OF LEDGER EXTRACT OF GIFTS PAID TO MS. YASHASWINI BY THE ASSE SSEE DURING THE ASSESSMENT YEAR 2009-10 TO ASSESSMENT YEAR 2012-13 AND THE SAM E IS RS. 9.95 LAKHS IN ASSESSMENT YEAR 2009-10, RS. 5.45 LAKHS IN ASSESSME NT YEAR 2010-11, RS. 5.40 LAKHS IN ASSESSMENT YEAR 2011-12 AND RS. 3.60 LAKHS IN ASSESSMENT YEAR 2012-13 AND TOTAL OF RS. 44 LAKHS IS ADVANCE TAX PAID ON 31.03.2012 OF INCLUDING THIS RS. 40.40 LAKHS. HE FURTHER SUBMITT ED THAT ON PAGES 114 TO 115 OF PAPER BOOK IS STATEMENT OF CASH AS ON 31.03.2012 OF MRS. SABITHA AND SHRI HITESH K M AND AS PER THE SAME, THE GIFT PAID BY MR S. SABITHA TO THE ASSESSEE IS SHOWN TO BE RS. 70,96,834/- AND GIFT PAID BY SHR I HITESH K M TO THE ASSESSEE IS SHOWN TO BE RS. 45,01,042/-. ALL THESE THREE AM OUNTS ARE TALLYING AND THEREFORE, THE ADDITION MADE BY THE AO AND UPHELD B Y THE CIT(A) SHOULD BE DELETED. THE LD. DR OF REVENUE SUPPORTED THE ORDER S OF AUTHORITIES BELOW. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ONLY OBJECTION OF THE CIT(A) IS THIS AS TO WHETHER THESE AMOUNTS WERE TAXED IN THE HANDS OF THE INDIVIDUALS I.E. WIFE, SON AND DAUGHTER OF THE ASSE SSEE. AS PER THE COPY OF THE RETURN FILED BY THE WIFE AND SON OF THE ASSESSEE, T HE INCOME SHOWN BY THEM IS SUBSTANTIAL I.E. RS. 47,16,444/- BY THE WIFE OF THE ASSESSEE MS. SABITHA AND RS. 41,38,300/- BY SHRI HITESH K M, SON OF THE ASSESSEE AS AGAINST THE AMOUNT OF GIFTS SHOWN BY THEM OF RS. 70,96,834/- AND RS. 45,0 1,042/- RESPECTIVELY. WHEN THE INCOME IN ONE YEAR ITSELF SHOWS SUBSTANTIAL INC OME AND THESE TWO PERSONS ARE REGULAR INCOME TAX ASSESSES AND IN VIEW OF THIS FINDING OF CIT(A) THAT THESE CREDITS IN ITSELF ARE NOT UNEXPLAINED IN THE SENSE THAT THESE ARE AVAILABLE IN THE BOOKS AND THE ONLY OBJECTION OF THE CIT(A) IS THIS THAT THESE CREDITS REMAINS UNSUBSTANTIATED BECAUSE THE ASSESSEE DID NOT ESTABL ISH THAT THESE ARE SUBJECTED TO TAX IN THE INDIVIDUAL HANDS OF THESE P ERSONS. IN VIEW OF THIS FACTUAL POSITION THAT SUBSTANTIAL INCOME HAS BEEN SHOWN BY THESE TWO PERSONS IN THE INCOME TAX RETURNS, THIS OBJECTION OF CIT(A) DO NOT SURVIVE. 11. REGARDING RECEIPT OF RS. 40.40 LAKHS FROM THE D AUGHTER MS. YASHASWINI, WE FIND THAT SUBSTANTIAL AMOUNT WAS GIVEN BY THE ASSES SEE TO HIS DAUGHTER IN EARLIER YEARS I.E. ASSESSMENT YEAR 2009-10, 2010-11 AND 2011-12 AND IN THE PRESENT YEAR ALSO. THE ASSESSEE HAS RECEIVED RS. 4 4 LAKHS FROM HIS DAUGHTER ITA NOS. 1274 & 1275/BANG/2017 PAGE 9 OF 10 MS. YASHASWINI BY CHEQUE ON 21.11.2011. COPY OF TH E BANK STATEMENT OF MS. YASHASWINI WITH KARNATAKA BANK LTD. IS AVAILABLE ON PAGE 92 OF PAPER BOOK AND IT IS SEEN THAT AN AMOUNT OF RS. 41,48,099/- IS CREDITED IN HER BANK ACCOUNT ON 21.11.2011 ON ACCOUNT OF CLOSURE PROCEEDS. ANOT HER AMOUNT IS CREDITED IN BANK ACCOUNT ON THE SAME DATE OF RS. 3,27,044/- BEI NG CLOSURE PROCEEDS AND AGAINST THESE TWO CREDITS OF ABOUT RS. 44.75 LAKHS, THIS CHEQUE OF RS. 44 LAKHS GIVEN BY HER TO THE PRESENT ASSESSEE HAS BEEN CLEAR ED. REGARDING THIS RECEIPT FROM MS. YASHASWINI DAUGHTER OF THE ASSESSEE, IT IS TO BE LOOKED INTO WHETHER SHE IS A MINOR AND IF SHE IS A MINOR, HER INTEREST INCOME ON ACCOUNT OF VARIOUS DEPOSITS HAS TO BE TAXED IN THE HANDS OF THE PRESEN T ASSESSEE I.E. THE FATHER OF MS. YASHASWINI. HENCE FOR THIS PURPOSE, WE RESTORE BACK THE MATTER TO THE FILE OF AO FOR FRESH DECISION AFTER EXAMINING THIS ASPEC T AS TO HOW MUCH IS THE INTEREST POTION INCLUDED IN TWO CREDITS OF RS. 41,4 8,099/- AND RS. 3,27,044/- AND WHETHER THESE INTERTEST INCOME IS TAXABLE IN TH E HANDS OF THE PRESENT ASSESSEE OR NOT AFTER FINDING OUT WHETHER MS. YASHA SWINI THE DAUGHTER OF THE ASSESSEE IS MINOR OR NOT. IF IT IS FOUND THAT SHE I S A MINOR, THEN THE INTEREST INCOME INCLUDED IN THESE TWO CREDITS SHOULD BE TAXE D IN THE HANDS OF THE PRESENT ASSESSEE. IF IT IS FOUND THAT SHE IS NOT A MINOR, THE SAID INCOME CANNOT BE TAXED IN THE HANDS OF THE PRESENT ASSESSEE BUT I T SHOULD BE LOOKED INTO AS TO WHETHER SHE IS FILING HER INCOME TAX RETURNS AND PA YING TAX ON THE INCOME OR NOT AND APPROPRIATE ACTION AS PER LAW MAY BE TAKEN IN H ER HANDS. THIS GROUND IS PARTLY ALLOWED SUBJECT TO THESE OBSERVATIONS. 12. IN THE COMBINED RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 1274/BANG/2017 IS PARTLY ALLOWED WHEREAS THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 1275/BANG/2017 IS ALLOWED IN THE TERMS INDI CATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (VIJAL PAL RAO) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH SEPTEMBER, 2017. /MS/ ITA NOS. 1274 & 1275/BANG/2017 PAGE 10 OF 10 COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.