G M Padmalatha , Bangalore V. The Income TAx officer Ward-6(3)(2), Bangalore

ITA 1376/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7738 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR NAGENDRA REBELLY
• Assessee Lawyers: RAGHAVENDRA R CHAKRAVARTHY
• Keywords: Unexplained cash credit; Salary income; Opportunity of being heard; Principle of natural justice; Source of fund; Additional evidence; Corroborative evidences
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO. 1376/BANG/2018 ASSESSMENT YEAR : 2014 - 15 SMT. PADMALATHA MUTHYALA GURUDINDALA, NO.32/A, 1 ST FLOOR, AMARAJYOTHI LAYOUT, RMV II STAGE, SANJAY NAGAR, BANGALORE 560 094. PAN: AGUPG 1983C VS. THE INCOME TAX OFFICER, WARD 6(3)(2), BANGALORE. APP ELLANT RESPONDENT APP ELLANT BY : SHRI RAGHAVENDRA R. CHAKRAVARTHY, CA RESPONDENT BY : DR. NAGENDRA REBELLY, ADDL.CIT(DR )(ITAT), BENGALURU. DATE OF HEARING : 31 .0 5 .2018 DATE OF PRONOUNCEMENT : 06.07. 2018 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE O RDER DATED 07.03.2018 OF THE CIT(APPEALS)-14, BENGALURU RELATI NG TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE FILE D RETURN OF INCOME FOR AY 2014-15 DECLARING TOTAL INCOME OF RS.2,89,18 0. AN ORDER OF ASSESSMENT U/S. 143(3) OF THE INCOME-TAX ACT, 1961 [THE ACT] WAS PASSED BY THE AO DETERMINING TOTAL INCOME OF ASSESSEE AT R S.23,24,345 AFTER MAKING THE FOLLOWING ADDITIONS:- ITA NO. 1376/BANG/2018 PAGE 2 OF 6 TOTAL RETURNED INCOME 2,89,180 ADD: 1. UNEXPLAINED CASH DEPOSITS U/S. 68 AS DISCUSSED ABOVE 18,63, 690 2. UNDISCLOSED INTEREST INCOME 1, 71,475 20,35,165 TOTAL ASSESSED INCOME 23,24,345 3. IT CAN BE SEEN FROM THE AFORESAID ADDITIONS THA T A SUM OF RS.18,63,690 WAS ADDED AS UNEXPLAINED CASH DEPOSIT. IT WAS THE PLEA OF THE ASSESSEE BEFORE THE CIT(APPEALS) THAT SOURCE OF FUNDS FOR DEPOSIT OF A SUM OF RS.18,63,690 WHICH WAS ADDED AS UNEXPLAINED CREDIT U/S. 68 OF THE INCOME-TAX ACT, 1961 [THE ACT] CAN BE EXPLAINED A S FOLLOWS:- PARTICULARS AMOUNT (RS.) REMARKS DATE OF RECT. CASH SALARY FROM 2,40,000/- MARGADARSHI CREDIT CO-OP. SOCIETY [RS.20,000/- P.ML AMOUNT RECEIVED 5,00,000/- REPAID BY WAY 07.04.2013 - FROM SMT. SUSHEELAMMA OF CHEQUE DRAWN RS.3,00,000/- [MOTHER OF APPELLANT] ON SBM CH. NO. 08.04.2013 - 769044. PAN: RS.2,00,000/- CYGPS9199C. AMOUNT RECEIVED 6,17,000/- RECEIVED FOR 24.04.2013 - FROM SMT. MADHAVI MAINTENANCE. RS. 252000/- NOTE:2 30.05.2013 RS.160000/ - 27.12.2013 - RS. 205000/- AMOUNT RECEIVED FROM D.V. DECOSTER RAJESH 2,50,000/- REPAID BY WAY OF CHEQUE 09.04.2013 NOTE:3 RS.1,00,000/- DRAWN ON SBM CH. NO. 769041 TOTAL RS.16,07,000 / - ITA NO. 1376/BANG/2018 PAGE 3 OF 6 4. THE ASSESSEE ALSO SUBMITTED THAT THE ADDITION OF RS.1,71,475 MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INTEREST INCOME WAS PURELY MADE ON ITS DETAILS RECEIVED BY THE AO AND THE SAME IS NOT SUSTAINABLE BECAUSE THERE WAS NO SUCH INTEREST INCOME RECEIVED BY EH AS SESSEE AND ALL INTEREST INCOME RECEIVED BY THE ASSESSEE WAS SUBJECT TO TDS. IN SUPPORT OF THE CLAIM OF THE ASSESSEE AS MADE BEFORE THE CIT(APPEAL S), THE ASSESSEE FILED THE FOLLOWING ADDITIONAL EVIDENCE BEFORE THE CIT(A) AND PRAYED FOR CONSIDERATION OF THE ADDITIONAL EVIDENCE:- 1. COPY OF ACKNOWLEDGEMENT FOR FILING RETURN OF IN COME TOGETHER WITH COMPUTATION AND FORM 26AS. 2. BANK ACCOUNT OF THE APPELLANT MAINTAINED WITH DE NA BANK. 3. BANK ACCOUNT OF THE APPELLANT MAINTAINED WITH S TATE BANK OF MYSORE. 4. DETAILS OF RENTAL RECEIPTS. 5. ACKNOWLEDGEMENT FOR PAYMENT OF RS.5,00,000/- TO SMT. C.SUSEELAMMA. 6. REQUISITION LETTER FROM SMT. C.SUSEELAMMA FOR RE PAYMENT OF ADVANCE. 7. AGREEMENT FOR SALE DT. 11.04.2013 ENTERED INTO W ITH SMT. C.SUSEELAMMA. 8. SALE DEED FOR PURCHASE OF SITE NO. 39 BY THE APP ELLANT DT. 06.03.2008. 9. ACKNOWLEDGEMENT FOR PAYMENT OF RS.2,50,000/- TO SRI. DECOSTER RAJESH. 10. REQUISITION LETTER FROM SMT. SRI. DECOSTER RAJE SH FOR REPAYMENT OF ADVANCE. 11. AGREEMENT FOR SALE DT. 11.04.2013 ENTERED INTO WITH SRI. DECOSTER RAJESH. ITA NO. 1376/BANG/2018 PAGE 4 OF 6 12. SALE DEED FOR PURCHASE OF SITE NO. 14 BY THE AP PELLANT DT. 12.03.2008. 5. THE CIT(APPEALS) WAS OF THE VIEW THAT THE AO HAD ALLOWED SUFFICIENT OPPORTUNITIES TO THE ASSESSEE AND THE ASSESSEE FAIL ED TO AVAIL ALL THESE OPPORTUNITIES. HE WAS THEREFORE OF THE VIEW THAT N ONE OF THE CONDITIONS FOR ADMISSION OF ADDITIONAL EVIDENCE BY HIM AS REQUIRED UNDER RULES 46A OF THE INCOME-TAX RULES, 1961 (THE RULES) WERE SATISFI ED IN THE CASE OF ASSESSEE. HE THEREFORE REFUSED TO ADMIT THE ADDITI ONAL EVIDENCE FILED BY THE ASSESSEE FOR CONSIDERATION. CONSEQUENTLY, HE U PHELD THE ADDITIONS MADE BY THE AO. AGGRIEVED, THE ASSESSEE HAS PREFER RED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. IN GROUND NOS.1 TO 6, THE ASSESSEE HAS TAKEN A P LEA THAT REJECTION BY THE CIT(APPEALS) OF THE REQUEST OF ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE IS NOT PROPER. THESE GROUNDS READ AS FOLL OWS:- 1. THE ORDER OF THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) INSOFAR AS IS AGAINST PRINCIPLES OF NATURAL JUSTICE , WEIGHTS OF EVIDENCE, LAW AND FACTS AND CIRCUMSTANCES OF THE CA SE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRO SSLY ERRED IN UPHOLDING THE ASSESSMENT ORDER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRO SSLY ERRED IN NOT CONSIDERING AND ADMITTING THE ADDITIONAL EVIDEN CE PRODUCED DURING THE COURSE OF APPELLATE PROCEEDINGS UNDER TH E FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRO SSLY ERRED IN DEPRIVING THE APPELLANT FROM PRINCIPLES OF NATURAL JUSTICE WITHOUT EXTENDING SUFFICIENT OPPORTUNITY TO THE APPELLANT U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRO SSLY ERRED IN NOT FORWARDING THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS TO THE A SSESSING OFFICER ITA NO. 1376/BANG/2018 PAGE 5 OF 6 BEFORE DISMISSING THE APPEAL OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRO SSLY ERRED IN NOT CONSIDERING ANY OF THE EVIDENCES PRODUCED BEFOR E HIM DURING THE COURSE OF APPELLATE PROCEEDINGS INASMUCH AS THE COMMISSIONER OF INCOME TAX (APPEALS) IS QUASI-JUDIC IAL AND THE POWERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) ARE COTERMINOUS WITH THAT OF THE ASSESSING OFFICER UNDE R THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS SEEN FROM THE RECORD THAT THERE WERE ONLY TWO EFFECTIVE HEARINGS BEFORE THE A O, ONE ON 2.11.16 AND THE OTHER ON 7.11.16. ON 2.11.16, THE ASSESSEE WAS ASKED TO PRODUCE REVISED STATEMENT OF INCOME OFFERING INTEREST INCOM E OF RS.1,71,475 TO TAX AND WAS ALSO ASKED TO EXPLAIN THE SOURCE OF CASH DE POSIT OF RS.18,63,690 MADE IN DENA BANK ON 17.11.16. THE AO COMPLETED TH E HEARING AND HAS MADE THE FOLLOWING OBSERVATIONS IN THE ORDER OF ASS ESSMENT:- 4. THE ASSESSEE HAS INCOME FROM SALARY, HOUSE PROP ERTY AND BUSINESS/ PROFESSION. AS PER THE ITS DETAILS FOR TH E F.Y. 2013-14 RELEVANT TO A.Y. 2014-15, THE ASSESSEE HAS RECEIVED AN INTEREST INCOME OF RS. 1,71,475/- AND MADE CASH DEPOSITS OF RS, 18,63,690/- IN HER SAVINGS BANK ACCOUNT WITH DENA B ANK. THE ASSESSEE HAS NOT DISCLOSED THE INTEREST INCOME OF R S. 1,71,475/- IN HER RETURN OF INCOME FILED. WHEN THIS WAS BROUGHT T O THE NOTICE OF A.R, A REVISED STATEMENT OF INCOME WAS FILED ON 07- 11-2016 OFFERING THE INTEREST INCOME FOR TAX. HOWEVER, THE SOURCES AND SUPPORTING EVIDENCE FOR THE CASH DEPOSITS OF RS. 18 ,63,690 WAS NOT FURNISHED EVEN AFTER GIVING SUFFICIENT TIME AND OPPORTUNITY. DUE TO TIME CONSTRAINT, WORK LOAD AND ALSO THE ASSE SSMENT IS GETTING TIME BARRED BY LIMITATION, I HAVE TO COMPLE TE THE ASSESSMENT BASED ON THE DETAILS AVAILABLE ON RECORD . 8. IT IS CLEAR FROM THE ORDER OF AO REFERRED TO AB OVE THAT ASSESSEE DID NOT HAVE PROPER OPPORTUNITY OF PRODUCING EVIDENCE B EFORE THE CIT(APPEALS) AND THE CASE OF ASSESSEE WOULD FALL WITHIN THE AMBI T OF RULE 46A(1)(D) OF ITA NO. 1376/BANG/2018 PAGE 6 OF 6 THE RULES. THE CIT(APPEALS) HAS INHERENT POWERS UND ER RULE 46A(4) OF THE RULES TO DIRECT PRODUCTION OF EVIDENCE TO ENABLE HI M TO DISPOSE OF THE APPEAL OR FOR ANY OTHER SUBSTANTIAL CAUSE. IN OUR VIEW, THE CIT(APPEALS) OUGHT TO HAVE EXERCISED HIS INHERENT POWERS IN THE PRESENT CASE AND OUGHT NOT TO HAVE DENIED THE ASSESSEE THE CHANCE OF EXPLA INING THE SOURCE OF DEPOSITS OF MONEY IN THE BANK ACCOUNT. I THEREFORE SET ASIDE THE ORDER OF CIT(APPEALS) AND REMAND FOR FRESH CONSIDERATION BY THE CIT(APPEALS) THE ISSUES RAISED BY THE ASSESSEE IN THE APPEAL BEFORE THE CIT(APPEALS). WE DIRECT THE CIT(APPEALS) TO ADMIT THE ADDITIONAL EVI DENCE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE APPEAL IN ACCORD ANCE WITH THE LAW, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JULY, 2018. SD/- ( N.V. VASUDEVAN ) JUDICIAL MEMBER BANGALORE, DATED, THE 6 TH JULY, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RES PONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.