D DHAYALAN NAIDU, CHENNAI V. JCIT SALARY RANGE, TAMBARAM

ITA 1516/CHNY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5989 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS A SUSHMA HARINI
• Keywords: Capital Gains

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . . , ! ' , # '$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1516/CHNY/2018 % &% /ASSESSMENT YEAR: 2011-12 SHRI D. DHAYALAN NAIDU, NO.48, 1 ST FLOOR, DHAYA, MANIMEGALAI STREET, UMAYALPURAM, CHROMPET, CHENNAI 630 044. VS. JT. COMMISSIONER OF INCOME TAX, SALARY RANGE, TAMBARAM 600 045. [PAN: AAIPN 9570G ] ( '( /APPELLANT) ( )*'( /RESPONDENT) '( + , / APPELLANT BY : MRS. A. SUSHMA HARINI, ADVOCATE )*'( + , /RESPONDENT BY : SHRI A.R.V. SREENIVASAN, JCIT - + . # /DATE OF HEARING : 31.12.2018 /0& + .# /DATE OF PRONOUNCEMENT : 04.01.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI ( CIT(A) FOR SHORT) DATED 31.01.2018 FOR THE ASSESSMENT YEAR (AY) 2011-12. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE ADDITION OF RS. 4,50,000 AS UNEXPLAINED CASH DEPOSI TS WHEN THE SOURCE WAS CLEARLY ESTABLISHED. ITA NO.1516/CHNY/2018 (AY: 2011-12) SHRI D. DHAYALAN NAIDU :- 2 -: 2. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THE AMPLE EVIDENCE FURNISHED BEFORE HER AS WELL AS BEFO RE THE AC TO SUBSTANTIATE THAT THE CASH DEPOSITS PERTAINED TO RE PAYMENT OF LOAN ADVANCED TO THE ASSESSEES BROTHER IN LAW. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N HOLDING THAT THERE WAS NO NEXUS BETWEEN THE WITHDRAWALS MADE BY THE ASSESSEES BROTHER IN LAW AND THE PAYMENTS MADE TO THE ASSESSEE, SINCE THE EXACT FIGURES ARE NOT REQUIRED TO TALLY T O ESTABLISH A CONNECTION. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N HOLDING THAT THE CREDITWORTHINESS OF THE ASSESSEES BROTHER IN LAW A ND THE GENUINENESS OF PAYMENTS MADE BY HIM TO THE ASSESSEE WERE NOT ESTABLISHED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME UNDE R HEAD SALARY. THE RETURN OF INCOME FOR THE AY 2011-12 WAS FILED ON 20 .07.2011 DISCLOSING TOTAL INCOME OF RS. 16,36,747/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY JT. CIT (SALARY RANGE), THAMBARAM, CHENNAI AT A TOTAL INCOME OF RS. 34,66,607/-, WHILE DOING SO THE ASSES SING OFFICER (AO) MADE ADDITION OF HRA RECEIVED FROM RAMCO INDUSTRIES LTD. AND ADDITION ON ACCOUNT OF SALE ON SHARES UNDER SHORT TERM CAPITAL GAINS AD DITION ON ACCOUNT OF CASH DEPOSIT IN BANK OF INDIA OF RS. 4,50,000/-. IN RES PECT OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BANK OF INDIA, WITH WHI CH ARE CONSIDERED THE EXPLANATION FURNISHED BY THE ASSESSEE IS THAT AN AM OUNT OF RS. 4,25,000/- WAS RECEIVED FROM ONE SHRI MUNU BALAJI, BROTHER-IN-LAW OF THE ASSESSEE ON REPAYMENT OF LOAN IN CASH, HAD BEEN DEPOSITED IN TH E BANK ACCOUNT. THIS EXPLANATION WAS REJECTED BY THE AO ON THE GROUND TH AT THERE ARE NO CASH WITHDRAWALS MADE BY THE SAID SHRI MUNU BALAJI FROM HIS BANK ACCOUNT IN ICICI ITA NO.1516/CHNY/2018 (AY: 2011-12) SHRI D. DHAYALAN NAIDU :- 3 -: BANK, NUNGAMBAKKAM. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A), WHO HAD DISMISSED THE APPEAL BY HOLDING AS UNDER: 4.3.3 THE SUBMISSIONS ARE DULY CONSIDERED. THE BAN K STATEMENTS AND THE COPIES OF THE RETURN OF INCOME FILED BY MR. MUN U BALAJI ARE ALSO DULY PERUSED. UPON VERIFICATION OF THESE EVIDENCES FILED IT IS NOTICED THAT THERE IS NO NEXUS BETWEEN THE WITHDRAWALS ALLEGED T O BE MADE BY MR. MUNU BALAJI FROM HIS BANK ACCOUNT AND THE AMOUNTS P URPORTED TO HAVE BEEN REFUNDED TO THE APPELLANT. IN FACT, THE DEPOSI TS IN THE APPELLANTS BANK ACCOUNT OF RS. 2.5 LAKHS ON 30-6-20 10 AND RS. 2 LAKHS ON 31-7- 2010 DO NOT TALLY WITH THE DATES OF WITHDRAWALS MAD E BY MR. MUNU BALAJI IN HIS BANK ACCOUNT. FURTHER, DURING THE APPELLATE PROCEEDINGS IT WAS ALSO OBSERVED THAT MR. MUNU BALAJI HAD BORROWED FRO M VARIOUS PARTIES INCLUDING THE APPELLANT FOR THE PURPOSE OF CONSTRUC TION OF HIS HOUSE PROPERTY AND THAT THE CASH WITHDRAWALS MADE ON VARI OUS DATES BY HIM ARE UTILIZED FOR THE SAID CONSTRUCTION TOO. 4.3.4 AS REGARDS THE SOURCES FOR REFUNDING THE MONE Y BY MR. MUNU BALAJI EXPLAINED TO HAVE BEEN MET FROM HIS SALARY I NCOME IS ALSO CONCERNED, IT IS NOTICED THAT AS MENTIONED BY THE A O AND AS VERIFIED FROM HIS BANK ACCOUNT, THE ACTUAL RECEIPT OF THE SA LARY INCOME IN HIS BANK ACCOUNT AND MOST IMPORTANTLY THE REFUND OF THE LOAN AMOUNT FROM THE SAID FUNDS HAS NOT CLEARLY SUBSTANTIATED. THUS THE CREDIT WORTHINESS OF THE PARTY (MR. MUNU BALAJI) AND THE GENUINENESS OF THE REFUND OF MONEY BY HIM TO THE APPELLANT DURING THE YEAR UNDER CONSIDERATION HAS NOT BEEN ESTABLISHED CONCLUSIVELY. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE US IN THE PRESENT APPEAL. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER T HE AO IS JUSTIFIED IN MAKING ADDITION OF RS. 4,50,000/- AS UNEXPLAINED CASH DEPO SIT IN THE BANK ACCOUNT. THE EXPLANATION TENDERED BY THE ASSESSEE IN SUPPORT OF THE SOURCES FOR THE SAID CASH DEPOSIT IS THAT THE AMOUNT WAS RECEIVED F ROM HIS BROTHER-IN-LAW SHRI MUNU BALAJI BY WAY OF REPAYMENT OF LOAN IN CASH. E VEN THE ASSESSEE HAD FILED THE BANK STATEMENT OF SHRI MUNU BALAJI, WHEREIN THE ENTRIES RELATING THE RECEIPT OF MONEY FROM THE ASSESSEE WERE ALSO REFLECTED. TH E ASSESSEE ALSO FILED A ITA NO.1516/CHNY/2018 (AY: 2011-12) SHRI D. DHAYALAN NAIDU :- 4 -: CONFIRMATION LETTER FROM THE SAID MUNU BALAJI CONFI RMING THAT THE AMOUNT OF RS. 4,50,000/- WAS REPAID TO THE ASSESSEE DURING THE YE AR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HOWEVER, FROM THE BANK STATEMENT OF THE SAID MUNU BALAJI, WE DO NOT FIND THE MATCHING W ITHDRAWALS IN THE BANK ACCOUNT OF SHRI MUNU BALAJI. HOWEVER, IT IS FOR SH RI MUNU BALAJI TO OFFER AN EXPLANATION IN SUPPORT OF THE SOURCES FOR THE REPAY MENT OF LOAN TO THE ASSESSEE. EVEN IN THE CASE OF ABSENCE OF ANY CREDIB LE EXPLANATION IN SUPPORT OF THE SOURCES FOR REPAYMENT OF LOAN IN CASH MADE B Y SAID MUNU BALAJI NO ADDITION IS REQUIRED IN THE HANDS OF THE ASSESSEE A S THE ASSESSEE IS NOT EXPECTED TO EXPLAIN THE SOURCE OF SOURCE OF CASH RE CEIPT. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 4,50,000/- IN THE HANDS OF THE ASSESSEE IS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 04 TH DAY OF JANUARY, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ! ' ) ( INTURI RAMA RAO ) # /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 04 TH JANUARY, 2019. EDN, SR. P.S + ).23 43&. /COPY TO: 1. '( /APPELLANT 4. - 5. /CIT 2. )*'( /RESPONDENT 5. 36 ). /DR 3. - 5. ( )/CIT(A) 6. 7% 8 /GF