ITO, Mysore V. Sri. I.R. Parashivamurthy, Mysore

ITA 1383/BANG/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51248 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE
• Assessee Lawyers: V SRINIVASAN
• Keywords: Unexplained cash credit
• Section: 133A; 68

Judgement Text

PAGE 1 OF 5 ITA NO.1383/BANG/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI N BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI GEORGE GEORGE K, J.M ITA NO.1383/BANG/2010 (ASSESSMENT YEAR 2006-07) THE INCOME TAX OFFICER, WARD-1(2), MYSORE. - APPELLANT VS SHRI I R PARASHIVA MURTHY, 1039, DEVATHA, 10 TH CROSS, VIJAYA NAGAR I STAGE, MYSORE. - RESPONDENT PAN : ADZPP6317M DATE OF HEARING : 18/8/2011 DATE OF PRONOUNCEMENT : 26/8/2011 APPELLANT BY : SMT. SUSAN THOMAS JOSE, J CIT RESPONDENT BY : SHRI V SRINIVASAN, C.A. ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE DEPARTMENT IS DIRECT ED AGAINST THE ORDER OF CIT(A),MYSORE DATED 15.9.2010. THE RELEVANT ASST. YEAR IS 2006-07. 2. THE SOLITARY ISSUE THAT IS RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MA DE U/S 68 OF THE ACT AMOUNTING TO RS.29 LAKHS. PAGE 2 OF 5 ITA NO.1383/BANG/2010 2 3. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- THE ASSESSEE IS AN AGRICULTURIST. FOR THE CONCER NED ASST. YEAR, RETURN OF INCOME WAS FILED ON 1.12.2006 DECLAR ING A TOTAL INCOME OF RS.1,53,157/- BEING PROPERTY AND RENTAL INCOME. APART FROM RS.1,53,157/-, THE ASSESSEE FOR RATE PURPOSE ALSO D ISCLOSED AN AGRICULTURAL INCOME TO THE EXTENT OF RS.4,05,200/-. DURING THE PREVIOUS YEAR RELEVANT TO THE ASST. YEAR CONCERNED, T HE ASSESSEE HAD SOLD HIS AGRICULTURAL LAND TO ONE SHRI C RAVI OF M/ S HASIRU TECHNOLOGIES (P) LTD., MYSORE FOR A CONSIDERATION OF RS.1,04,,00,000/- (INCLUDING STAMP DUTY). IT IS THE CLAIM OF THE ASSE SSEE THAT HE HAD RECEIVED A SUM OF RS.29 LAKHS FROM SHRI RAVI AS ADV ANCE PRIOR TO THE DATE OF THE SALE. IT IS FURTHER CLAIMED THAT THIS FACT IS CONFIRMED BY SHRI RAVI IN HIS STATEMENT RECORDED U/S 133A OF THE ACT. IN THE SCRUTINY ASSESSMENT, THE AO WAS OF THE OPINION THAT THE SOURCE OF RS.29 LAKHS WAS NOT AVAILABLE FOR PURCHASE OF PROPE RTIES MADE BY THE ASSESSEE AND ADDED THE SAME U/S 68 OF THE ACT AS UN EXPLAINED CASH CREDITS. 4. AGGRIEVED BY THE ADDITION MADE U/S 68 OF THE ACT , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FI RST APPELLATE AUTHORITY. IT WAS SUBMITTED BEFORE THE FIRST APPELL ATE AUTHORITY THAT SHRI RAVI OF M/S HASIRU TECHNOLOGIES (P) LTD., MYSOR E ALSO EXPLAINED THE SOURCE OF PAYMENT IN THE SWORN STATEMENT RECORDE D U/S 133A OF THE ACT ON 28.3.2007, WHICH IS THE STARTING POINT O F ENQUIRY AGAINST THE ASSESSEE. IT WAS SUBMITTED THAT THE RECEIPT OF MONEY FROM SHRI RAVI HAS NOT BEEN CONTROVERTED BY THE AO AND THEREFO RE, THE AO HAS PAGE 3 OF 5 ITA NO.1383/BANG/2010 3 ERRED IN INVOKING SECTION 68 OF THE ACT ON A MERE S USPICION, SURMISES AND CONJECTURE. 5. THE CIT(A), FOR HIS ELABORATE REASONS MENTIONED IN PARAS 8 TO 16 OF HIS IMPUGNED ORDER, ALLOWED THE APPEAL O F THE ASSESSEE. 6. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US RAISING THE FOLLOWING EFFECTIVE GROUNDS:- I) THE LEARNED CIT(A) ERRED IN DELETING ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 BY HOLDING THAT CASH PAYMENT IN LAND TRANSACTION IS A REALITY OF LIFE IN INDIA. II) THE CIT(A) ERRED IN ALLOWING THE RELIEF OVERLOOKING THE FACT THAT PROVISIONS OF SECTION 68 APPLIES TO EACH AND EVERY INDIVIDUAL WHETHER HE IS ILLITERATE OR IGNORANT AND THERE IS NO IMMUNITY IN THE ACT TO EXEMPT ANY SPECIFIC INDIVIDUALS ON ANY COUNT. III) THE LEARNED CIT(A),MYSORE ERRED IN OVERLOOKING THE SWORN STATEMENT RECORDED FROM ASSESSEE WHEREIN, HE HAS CATEGORICALLY ADMITTED THAT HE HAS UTILIZED THE ON-MONEY OF RS.29 LAKHS RECEIVED FROM SHRI RAVI FOR PAYING ON-MONEY TOWARDS PURCHASE OF SITE AND AGRICULTURAL LANDS WHICH IS ALSO SUPPORTED AND REFLECTED IN CASH BOOK OF THE ASSESSEE. IV) THE LEARNED CIT(A), MYSORE HAS ERRED IN HOLDING THAT SHRI C RAVI WAS NOT EXAMINED WHEREAS SHRI C RAVI WAS VERY MUCH EXAMINED AND THE STATEMENT ON OATH WAS RECORDED ON 28.3.2007. 7. THE LEARNED DR SUPPORTED THE ORDER OF THE AO WH EREAS THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFO RE THE INCOME TAX AUTHORITIES AND ALSO DREW SUPPORT FROM THE FIND ING OF THE FIRST APPELLATE AUTHORITY. PAGE 4 OF 5 ITA NO.1383/BANG/2010 4 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDER SECTION 68, ANY SUM FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE MAINTAINED FOR AN Y PREVIOUS YEAR MAY BE CHARGED TO THE INCOME TAX ON THE INCOME OF TH E ASSESSEE OF THAT PREVIOUS YEAR, IF - (I) THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NA TURE AND SOURCE OF SUCH SUM OR (II) THE EXPLANATION OFFERED BY HIM IS IN THE OPINIO N OF THE AO NOT SATISFACTORY. 8.1 AS A MATTER OF FACT, SECTION 68 IS A STATUTOR Y RECOGNITION WHAT IS PREVIOUSLY ESTABLISHED BY JUDICIA L DECISION UNDER 1922 ACT, NAMELY, TO THE PRINCIPLE, THE CASH CREDITS WHICH ARE NOT SATISFACTORILY EXPLAINED, MAY BE ASSESSED AS INCOME. 8.1 IN THE INSTANT CASE, THE ASSESSEE HAS OFFERED AN EXPLANATION REGARDING THE CASH CREDITED IN HIS BOOK S OF ACCOUNTS. THE EXPLANATION WAS THAT HE HAS RECEIVED THIS CASH FROM SHRI C RAVI OF M/S HASIRU TECHNOLOGIES (P) LTD., MYSORE AS ADVANCE/ ON-MONEY TOWARDS SALE OF AGRICULTURAL LAND. SHRI RAVI HAD C ONFIRMED THIS TRANSACTION EVEN BEFORE THE ASSESSEE WAS QUESTIONED ON THIS ISSUE. IN FACT, THE STATEMENT GIVEN BY SHRI RAVI IS A STARTING POINT OF ENQUIRY IN ASSESSEES CASE. AS POINTED OUT BY THE CIT(A), SHR I RAVI HAS NOT RETRACTED HIS STATEMENT OF PAYMENT OF RS. 29 LAKHS T O THE ASSESSEE. SHRI RAVI IS REGULARLY ASSESSED TO TAX AND HAS ENOUG H SOURCE TO MAKE THIS PAYMENT OF RS.29 LAKHS. IT IS ALSO A FACT THAT SHRI RAVI HAS PURCHASED THE AGRICULTURAL LAND BELONGING TO THE AS SESSEE. THE AO PAGE 5 OF 5 ITA NO.1383/BANG/2010 5 HAS MADE THE ADDITION OF RS.29 LAKHS U/S 68 OF THE ACT ON MERE SUSPICION THAT THE AMOUNTS WERE NOT AVAILABLE WITH THE ASSESSEE FOR INVESTMENT IN SITES SINCE THE SAME WAS ADVANCED TO OTHER FARMERS. THE CIT(A) HAS CATEGORICALLY FOUND THAT THE AO HAS N OT BROUGHT ANY EVIDENCE ON RECORD TO SUGGEST THAT THE AMOUNTS RECE IVED FROM SHRI C RAVI WERE DISBURSED TO THE FARMERS BY THE ASS ESSEE. ON THE CONTRARY, THE ADMITTED POSITION IS THAT THE AO DOES NOT DISPUTE THE RECEIPT OF CASH FROM SHRI C RAVI. TO THIS EXTENT, THE CREDIT ENTRIES ARE ADMITTEDLY EXPLAINED; THEREFORE, THERE CANNOT BE ANY ADDITION U/S 68 OF THE ACT. 8.2 IN THE LIGHT OF THE ABOVE REASONING, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS CORRECT AND IN ACCO RDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. HENCE, WE AFFIR M THE FINDING OF THE CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED ON FRIDAY, THE 26 TH DAY OF AUGUST, 2011 AT BANGALORE. SD/- SD/- (N BARATHVAJA SANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE C IT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.