Sri. R. Narendra, Kollegal V. ITO, Chamarajanagar

ITA 13/BANG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8662 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-01-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 04-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Keywords: Unexplained cash credit
• Section: 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 13/ BANG/20 13 (ASSESSMENT YEAR: 2005 - 06 ) SHRI R. NARENDRA, NO.7/479 - D, VENKATESHWARA NILAY A, 4 TH CROSS, SOUTHERN EXTENSION, KOLLEGALA. PAN: ALCPN 1972 B VS. APPELLANT INCOME - TAX OFFICER, WARD - 1, CHAMARAJANAGAR. RESPONDENT APPELLANT BY: SHRI NARENDRA SHARMA, ADVOCATE. RESPONDENT BY: DR. P.K.SRIHARI, ADDL.CIT(DR) DATE OF HEARING : 13/01/2016 DATE OF PRONOUNCEMENT: 02 / 0 2 /201 6 O R D E R PER ABRAHAM P GEORGE, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30/11/2012 OF THE CIT(A), MYSORE, FOR THE ASSESSM ENT Y EAR 2005 - 06 . 2. FACTS GIVING RISE TO THIS APPEAL ARE THAT THE ASSESSEE HAD DEPOSITED A SUM OF RS.27 LAKHS INTO SB A/C NO.8122 WITH ING VYSYA BANK, KOLLEGALA BRANCH, KOLLEGALA WHICH CAME TO THE NOTICE ITA NO . 13 /BANG/201 3 PAGE 2 OF 7 OF THE AO. DEPOSITS WERE MADE ON 29/4/2004, 9/6/2004 AND 3/7/2004. ASSESSEE HAD NOT FILED ANY RETURN FOR ASSESSMENT YEAR 2005 - 06 U/S 139 OF THE IT ACT. AO WAS OF THE OPINION THAT CASH DEPOSIT OF RS.27 LAKHS REQUIRED TO BE EXAMINED. HE BELIEVED THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT W ITHIN THE MEANING OF SEC.148 OF THE ACT AND ISSUED NOTICE UNDER THAT SECTION. PURSUANT TO THIS NOTICE, ASSESSEE FILED A RETURN OF INCOME IN WHICH HE DECLARED INCOME OF RS.90,125/ - APART FROM AGRICULTURAL INCOME OF RS.4,75,000/ - . ASSESSEE ALSO FILED A SUM MARY OF HIS CAPITAL ACCOUNT FOR THE PREVIOUS YEAR AND BALANCE SHEET AS ON 31/3/2005. 3. AO REQUIRED A SSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS OF RS.27 LAKHS. HOWEVER, NO EXPLANATION WAS FORTHCOMING FROM THE ASSESSEE. THE AO WAS ALSO HAVING AN AFFIDAV IT FILED BY THE ASSESSEE WHO WAS MLA OF HA VA NUR CONSTITUENCY, KOLLEGALA TALUK, CHAMARAJANAGAR DISTRICT, KARNATAKA STATE , BEFORE THE ELECTION COMMISSION WHEREIN IT WAS STATED THAT THE FIXED DEPOSITS IN HIS BANK ACCOUNT CAME TO ONLY RS.7.5 LAKHS AND THAT OF HIS WIFE SMT.ASHA NARENDRA RS.5 LAKHS. ASSESSEE HAD IN THE AFFIDAVIT MENTIONED OWNERSHIP OF 55 ACRES OF LAND FOR HIM AND 4.34 ACRES FOR HIS WIFE. AO MADE A COMPAR ISON OF THE AFFIDAVIT WITH THE B ALANCE SHEET FILED BY THE ASSESSEE AND ISSUED ONE MORE LETTER TO THE ASSESSEE TO EXPLAIN DIFFERENCE BETWEEN THEM. ASSESSEE SUBMITTED AN EXPLANATION INTER ALIA STATING THAT HIS FATHER LATE RAJU GOWDA WAS THE OWNER OF 74 ACRES OF AGRICULTURAL LAND. AS ITA NO . 13 /BANG/201 3 PAGE 3 OF 7 PER ASSESSEE, HIS FATHER DIED ON 25/3/2014 , HE HAD DEPOSITED CASH LEFT BY HIS LATE FATHER OUT OF AGRICULTURAL INCOME EARNED BY HIM. AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT CREDITS IN THE BANK ACCOUNT WERE OUT OF AGRICULTURAL INCOME EARNED BY HIS FATHER PRIOR TO LATTER S DEATH. AS PER AO, ASSESSEE S LATE FATHER HIMSEL F WAS AN MLA AND THEREFORE, IT WA S VERY DIFFICULT TO BELIEVE THAT AGRICULTURAL INCOME WAS KEPT BY HIM IN CASH RUNNING INTO LAKHS IN HIS HOUSE WITHOUT DEPOSITING IN BANK. FURTHER, AS PER AO, ASSESSEE, DESPITE NOTICE, COULD NOT FURNISH INFORMAT ION REGARDING DETAILS OF BANK ACCOUNT HELD BY HIS FATHER, NOR DETAILS OF DEPOSIT OF RS.15 LAKHS MADE BY HIS WIFE SMT.ASHA NARENDRA IN HER SB ACCOUNT NO.9818 WITH ING VYSYA BANK, KOLLEGALA BRANCH. HE REFUSED TO BELIEVE V ERSION OF THE ASSESSEE THAT THE DEPO SITS WERE OUT OF AGRICULTURAL EARNINGS OF HIS FATHER. HE WAS ALSO OF OPINION THAT THE DEPOSITS MADE BY THE ASSESSEE S WIFE SMT.ASHA NARENDRA IN THE BANK ACCOUNT BELONGED TO THE ASSESSEE , S INCE SMT. ASHA NARENDRA WAS ONLY A HOUSE WIFE AND WAS NOT CARRYING ON ANY BUSINESS OR PROFESSION. THUS, HE HELD THE DEPOSIT OF RS.27 LAKHS IN THE NAME OF ASSESSEE AND RS.15 LAKS IN THE NAME OF ASSESSEE S WIFE SMT.ASHA NARENDRA AS UNEXPLAINED CREDITS U/S 68 OF THE ACT . AN ADDITION OF RS.42 LAKHS WAS MADE. 4 . AGGRIE VED, ASSESSEE MOVED IN APPEAL BEFORE CIT(A) . A PART FROM CHALLENGING VALIDITY OF REOPENING, ASSESSEE ALSO ASSAILED MERITS OF THE ADDITION. AS PER ASSESSEE, HIS FATHER LATE RAJU GOWDA WAS AN AGRICULTURIST WITH 74 ACRES OF LAND. RAJU GOWDA ITA NO . 13 /BANG/201 3 PAGE 4 OF 7 HAD DIED UNEXPECT EDLY AND THUS ASSESSEE WAS LEFT WITH CASH KEPT BY HIS FATHER IN THE RESIDENCE , OUT OF HIS AGRICULTURAL EARNING. ASSESSEE ALSO PRODUCED CERTIFICATE FROM KOLLEGAL TALUK AGRICULTURAL PRODUCE CO - OPERATIVE MARKETING SOCIETY LTD., (KTAPCMS LTD.) WHICH REFLECTED DETAILS OF DEPOSIT AND REFUND OF MONEY IN THE SAID SOCIETY BY THE ASSESSEE, HIS FATHER, HIS MOTHER, HIS WIFE AND HIS CHILDREN. AS PER THE ASSESSEE, SUCH MONEY WAS ALSO UTILIZED FOR MAKING DEPOSITS. SINCE CERTIFICATE PRODUCED BY THE ASSESSEE WAS A NEW ON E, CIT(A) CHOSE TO GET A REMAND REPORT FROM THE AO. IN THE SAID REMAND REPORT, AO SUBMITTED THAT REALIZATION OF FIXED DEPOSITS FROM KTAPCMS LTD., AS ON 06/12/2003 CAME TO RS.19,94,748/ - ONLY. AS PER THE AO, SUBSEQUENT REALIZATIONS FROM KTAPCMS, WAS AFTER THE DATE OF DEPOSIT IN THE BANK ACCOUNTS. AO ALSO MENTIONS THAT ASSESSEE HAD FILED RTC FOR AGRICULTURAL LAND OF 74 ACRES OWNED BY HIS FATHER. 5 . THE CIT(A), AFTER VERIFICATION OF CERTIFICATE OF KTAPCMS LTD., AND ALSO SUBMISSIONS OF THE ASSESSEE, HEL D THAT DEPOSITS TO THE EXTENT OF R S.19,94,748/ - OUT OF TOTAL RS.42 LAKHS STOOD EXPLAINED. HE DELETED ADDITION TO THIS EXTENT AND CONFIRMED THE BALANCE OF RS .23,05,252/ - . HOWEVER, ON THE QUESTION OF VALIDITY OF REOPENING, HE WAS OF THE OPINION THAT REOPENIN G WAS DONE ACCORDING TO LAW. 5. NOW, BEFORE US, ASSESSEE, APART FROM ASSAILING VALIDITY OF REOPENING , HAS ALSO CHALLENGED ADDITIONS ON MERITS. ACCORDING TO HIM, DEPOSITS MADE BY ASSESSEE WHICH WERE SUBJECT MATTER OF ITA NO . 13 /BANG/201 3 PAGE 5 OF 7 ADDITION WERE OF RS.30 LAKHS ON 2 9/4/2004, RS.10 LAKHS ON 9/6/2004 AND RS.2,00,000/ - ON 3/7/2004. DEPOSIT OF RS.30 LAKHS ON 29/4/2004 COMPRISED OF RS.15 LAKHS IN ASSESSEE S BANK ACCOUNT AND RS.15 LAKHS IN THE BANK ACCOUNT OF ASSESSEE AND ANOTHER RS.15 LAKH IN THE BANK ACCOUNT OF ASSESSEE S WIFE. DEPOSITS MADE BY FAMILY MEMBERS OF ASSESSEE IN KTAPCMS AND WITHDRAWALS WERE AS UNDER: LD . CIT(A) HAD ACCEPTED WITHDRAWALS MADE ON 6/12/2003 BY RAJU GOWDA, SMT.SUMITHRAMMA AND SMT.ASHA. LATE RAGU GOWDA WAS THE FATHER OF THE ASSESSEE, SMT. SUMITH RAMMA WAS THE MOTHER OF THE ASSESSEE AND SMT. ASHA WAS THE WIFE OF THE ASSESSEE. A SSESSEE HAD PRODUCED BEFORE THE CIT(A) EVIDENCE FOR OWNERSHIP ITA NO . 13 /BANG/201 3 PAGE 6 OF 7 OF 74 ACRES OF AGRICULTURAL LAND IN THE NAME OF HIS FATHER. THIS HAS NOT BEEN DISPUTED BY THE AO IN THE REMAN D REPORT ALSO. IN OUR O PINION, CLAIM OF THE ASSESSEE THAT RAJU GOWDA, HIS LATE FATHER, HAD HELD CASH WITH HIM OUT OF HIS EARNING FROM AGRICULTURAL INCOME , APART FROM THE DEPOSITS IN KTAPCMS LTD., CANNOT BE BRUSHED ASIDE. E VEN A REASONABLE YIELD FROM 74 A CRES OF AGRICULTURAL LAND WOULD HAVE EARNED MORE THAN SUM DEPOSITED BY THE ASSESSEE TO THE EXTENT NOT COVERED BY THE WITHDRAWALS FROM KTACPMS . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE CLAIM OF THE ASSESSEE THAT MONEY WAS KEPT BY HIS FATHER AT HIS RESIDENCE AND HE WAS CONSTRAINED TO DEPOSIT SUCH SUM IN THE BANK ACCOUNT WHEN HIS FATHER SUDDENLY DIED, IS A PROBABLE ONE. EVEN IN THE REMAND REPORT, ASSESSING OFFICER HAS NOT COMMENTED ON THIS EXPLANATION, EXCEPT FOR STATING THA T SOME OF THE WITHDRAWALS CLAIMED BY THE ASSESSEE FROM KTAPCMS LTD., W ERE SUBSEQUENT TO THE DATE OF DEPOSIT. WE ARE OF THE OPINION THAT ADDITIONS WERE NOT WARRANTED UNDER THE CIRCUMSTANCES OF THIS CASE. THE ADDITIONS STAND DELETED. SINCE WE HAVE ALLOWED THE APPEAL ON MERITS, WE DO NOT DEEM IT NECESSARY TO ADJUDICATE THE ISSUE OF VALIDITY OF THE REOPENING DONE FOR THE IMPUGNED ASSESSMENT YEAR. ITA NO . 13 /BANG/201 3 PAGE 7 OF 7 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. PRONOUNCED IN THE OP EN COURT ON 02 ND FEBRUA RY , 201 6 . SD/ - SD/ - ( VIJAY PAL RAO ) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER E KSRINIVASULU ,SPS COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE