Pratap Ramrao Shinde, Pune V. TRO & AO.,

ITA 156/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4931 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-11-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 04-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SABHANA PARVEEN
• Keywords: Unexplained investment; Salary income
• Section: 69; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 156 /P U N/201 6 / ASSESSMENT YEAR : 20 1 1 - 1 2 PRATAP RAMRAO SHINDE FLAT NO.B28, NIKASH SKIES, SOMESHWARWADI, OFF BANER ROAD, PUNE 411008 . / APPELLANT PAN: ADAPS0067J VS. THE TAX RECOVERY OFFICER & ASSESSING OFFICER, RANGE 7, PUNE . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : MS. SABHANA PARVEEN / DATE OF HEARING : 1 9 . 1 1 .201 8 / DATE OF PRONOUNCEMENT: 12 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 3 , PUNE , DATED 1 2 . 11 .20 1 5 RELATING TO ASSESSMENT YEAR 20 1 1 - 1 2 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 156 /P U N/20 1 6 PRATAP R SHINDE 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER HAS ERRED IN TREATING A SUM OF RS.8,30,000/ - RECEIVED FROM MR. MURLIDHA R PATIL AS INCOME OF THE APPELLANT BY TREATING IT AS UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT, 1961 BY DISREGARDING APPELLANT'S SUBMISSION AS WELL AS DOCUMENTARY EVIDENCES FURNISHED DURING THE COURSE OF PROCEEDINGS BEFORE THE LOWER AUTHORITIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER HAS ERRED IN TREATING A SUM OF RS.8,70,000/ - RECEIVED FROM MR. TRIMBAKRAO P. SHINDE AS INCOME OF THE APPELLANT BY TREATING IT AS UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT, 1961 BY DISREGARDING APPELLANT'S SUBMISSION AS WELL AS DOCUMENTARY EVIDENCES FURNISHED DURING THE COURSE OF PROCEEDINGS BEFORE THE LOWER AUTHORITIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSIN G OFFICER HAS ERRED IN TREATING A SUM OF RS.25,00,000/ - RECEIVED FROM APPELLANT'S TWO SISTERS VIZ. SMT. LALITABAI DATTATRAY SONAWNE AND SMT. MEENA RAMESH PATIL AS INCOME OF THE APPELLANT BY TREATING IT AS UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT , 1961 BY DISREGARDING APPELLANT'S SUBMISSION AS WELL AS DOCUMENTARY EVIDENCES FURNISHED DURING THE COURSE OF PROCEEDINGS BEFORE THE LOWER AUTHORITIES. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION MADE UNDER SECTION 69 OF THE ACT ON ACCOUNT OF LOAN S RECEIVED FROM THREE DIFFERENT PARTIES , TREATED AS UNEXPLAINED INVESTMENT IN THE HANDS OF ASSESSEE. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN INDIVIDUAL AND WAS DERIVING INCOME FROM SALARY, HOUSE PROPERTY AND SHORT TERM CAP ITAL GAINS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF 15,89,663/ - . THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS TO EXAMINE THE SOURCE OF CASH DEPOSITS IN THE SAVING BANK ACCOUNT AS PER AIR. THE ASSESSEE EXPLAINED THAT IT HAD RECEIVED CASH FROM DIFFERENT PERSONS TOTALING 37 LAKHS. THE ASS ESSING OFFICER NOTED THAT IN ICICI BANK, THERE WERE CASH DEPOSITS ON DIFFERENT DATES DURING THE YEAR TOTALING 31,20,000/ - AND IN THE BANK OF INDIA SAVING BANK ACCOUNT, THERE WAS CASH ITA NO. 156 /P U N/20 1 6 PRATAP R SHINDE 3 DEPOSIT OF 6 LAKHS. THE EXPLANATION OF ASSESSEE WAS THAT IT HAD RECE IVED 8,30,000/ - FROM HIS UNCLE SHRI MURLIDHAR PATIL , 8,70,000/ - FROM SHRI TRIMBAKRAO P. SHINDE, HIS BROTHER - IN - LAW AND 20 LAKHS FROM SHRI UTTAMRAO PATIL. STATEMENT OF SHRI UTTAMRAO PATIL, FATHER - IN - LAW OF ASSESSEE WAS RECORDED AND IN HIS STATEMENT, HE STATED THAT HE HAD GIVEN SUM OF 20 LAKHS IN CASH ON VARIOUS DATES AND GAVE 10 LAKHS THROUGH DEMAND DRAFT, THE SOURCE OF SUCH DEPOSIT WAS STATED TO BE HIS SAVINGS OUT OF AGRICULTURAL INCOME. HE STATED THAT CASH WAS GIVEN TO THE ASSESSEE AND HIS WIF E I.E. HIS DAUGHTER IN JALGAON AND SOME CASH IN PUNE, BUT HE DID NOT REMEMBER EXACT DATES. HE ALSO EXPLAINED THAT CASH WAS KEPT AT HOME. THE AMOUNT WAS GIVEN ON VARIOUS DATES TO THE ASSESSEE. FURTHER, STATEMENT OF TRIMBAKRAO P. SHINDE WAS ALSO TAKEN, WH O HAD ADVANCED SUM OF 8,70,000/ - . HE ALSO EXPLAINED THAT IT WAS OUT OF HIS AGRICULTURAL INCOME AND PENSION. THE ASSESSING OFFICER NOTES THAT HE WAS UNABLE TO GIVE ANY PROOF REGARDING AGRICULTURAL INCOME. SHRI MURLIDHAR PATIL WAS UNABLE TO APPEAR BECAUSE OF HIS KNEE OPERATI ON BUT HE FILED AN AFFIDAVIT STATING THAT HE GAVE A CHEQUE OF 8,30,000/ - OUT OF AGRICULTURAL INCOME FOR INVESTING IN SHARES. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF ASSESSEE AND WAS OF THE VIEW THAT CASH WAS DEPOSITED OUT OF UNDISCLOSED SOURCE OF ASSESSEE AND HENCE, HE TREATED THE SAME AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT AND MADE ADDITION OF 37,20,000/ - . THE ASSESSING OFFICER ALSO MADE ANO THER ADDITION OF 25 LAKHS ON ACCOUNT OF AMOUNT RECEIVED FROM SISTERS OF ASSESS EE . 5. BEFORE THE CIT(A), 7/12 EXTRACT OF AGRICULTURAL LAND, CONFIRMATIONS FROM THE PARTIES WERE SUBMITTED BUT THE CIT(A) DID NOT ACCEPT THE PLEA OF ASSESSEE ITA NO. 156 /P U N/20 1 6 PRATAP R SHINDE 4 OBSERVING THAT LOAN GIVERS HAD LANDHOLDING AND EVEN EARNED AGRICULTURAL INCOME, BUT NO DIRECT LIN K COULD BE ESTABLISHED BY THE ASSESSEE FROM THE AGRICULTURAL RECEIPTS TO THE AMOUNTS DEPOSITED INTO HIS BANK ACCOUNT. THE SECOND EXPLANATION OF CREDITORS THAT THEY HAD GIVEN MONEY FOR INVESTMENT IN SHARES WAS ALSO NOT ACCEPTED AS THE INVESTMENT IN SHARES WAS MADE BY THE ASSESSEE THROUGH HIS D MAT ACCOUNT IN HIS OWN NAME. THIS IS THE EXPLANATION OF SHRI MURLIDHAR PATIL AND SHRI TRIMBAKRAO P. SHINDE. IN RESPECT OF EXPLANATION OF SHRI UTTAMRAO PATIL OF 30 LAKHS I.E. 20 LAKHS IN CASH AND 10 LAKHS BY DD WAS ACCEPTED BY THE CIT(A) , AGAINST WHICH THE REVENUE HAS NOT FILED ANY APPEAL. 6. NOW, COMING TO LAST ADDITION I.E. 25 LAKHS, WHICH THE ASSESSEE CLAIMS TO HAVE RECEIVED AS LOAN FROM HIS TWO SISTERS SMT. LALITA D. SONAWANE AND SMT. MEENA R. PATIL . THE ASSESSING OFFICER HAD MADE THE ADDITION AS NO CONFIRMATION WAS FILED AND ONLY COPIES OF AADHAR CARDS OF TWO SISTERS WERE GIVEN. HOWEVER, BEFORE THE CIT(A), CONFIRMATIONS FROM TWO SISTERS, 7/12 EXTRACTS OF LANDHOLDING WERE ALSO FILED AND THE ASSESSEE ALSO PRODUCED RECEIPTS OF SALE OF AGRICULTURAL PRODUCE. BUT THE CIT(A) DID NOT ACCEPT THE SAME AS NO DETAILS WERE FURNISHED FOR PURCHASING DEMAND DRAFT OF 25 LAKHS. HE CONFIRMED THE ADDITION OF 25 LAKHS IN THE HANDS OF ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD FURNISHED ALL THE EXPLANATIONS, E VIDENCES BEFORE THE ASSESSING OFFICER AND EVEN BEFORE THE CIT(A), FURNISHED EVIDENCE OF ITA NO. 156 /P U N/20 1 6 PRATAP R SHINDE 5 SUBSTANTIAL INCOME EARNED BY TWO PARTIES. IN RESPECT OF LOAN TAKEN FROM TWO SISTERS, HE STATED THAT THE AMOUNT WAS PAID DIRECTLY BY DEMAND DRAFT AND EXPLANATION WAS NO T ACCEPTED AS THERE WAS NO PROOF OF WHEN THE ASSESSEE RECEIVED MONEY. ANOTHER POINT RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT WHEN AMOUNT WAS DEPOSITED THROUGH DD IN BANK, THE N NO ADDITION WA S WARRANTED UNDER SECTION 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT. HE THEN, REFERS TO VARIOUS EVIDENCES FILED IN THIS REGARD AND STRESSED THAT WHEN THE CAPACITY OF LENDERS WA S NOT DOUBTED, THERE WA S NO MERIT IN THE ADDITION. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS IN RESPECT OF NON ACCEPTANCE OF EXPLANATION FURNISHED BY ASSESSEE IN RESPECT OF CERTAIN LOANS TAKEN BY HIM . THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD MADE INVESTMENTS IN PURCHASE OF FLAT AND HAS EXPLAINED THE PART SOURCE OF INVESTMENT OUT OF LOAN RECEIVED FROM THE PARTIES. THE LOANS HAVE BEEN RECEIVED FROM RELATED PARTIE S. ONE LOAN HAS BEEN RECEIVED BY ASSESSEE FROM HIS BROTHER - IN - LAW OF 8, 7 0,000/ - AND THE SECOND LOAN HAS BEEN TAKEN FROM HIS UNCLE OF 8,30,000/ - . THE CIT(A) IN PARA 3.2.2 OF APPELLATE ORDER WHILE DEALING WITH THE SAID ISSUE OF RECEIPT OF CASH FROM SH RI MURLIDHAR PATIL OF 8,30,000/ - AND FROM SHRI TRIMBAKARAO P. SHINDE OF 8,70,000/ - HAS REFERRED TO THE EVIDENCES FILED I.E. 7/12 EXTRACT, THE QUANTUM OF AGRICULTURAL INCOME I.E. BILLS OF SALE OF AGRICULTURAL ITA NO. 156 /P U N/20 1 6 PRATAP R SHINDE 6 PRODUCE BEING SUBMITTED. THE CIT(A) ALSO CO MMENTS THAT TWO LOAN GIVERS HAD LANDHOLDING AND HAD EVEN EARNED AGRICULTURAL INCOME. HE FURTHER GOES ON TO SAY THAT NO DIRECT LINK COULD BE ESTABLISHED BY THE ASSESSEE BETWEEN AGRICULTURAL RECEIPTS TO THE AMOUNTS DEPOSITED INTO HIS BANK ACCOUNT . ONCE THE STATEMENTS OF TWO PERSONS WERE RECORDED BY THE ASSESSING OFFICER, THEN THE IDENTITY STANDS ESTABLISHED AND THE CREDITWORTHINESS OF PARTIES ALSO STANDS ESTABLISHED BY THE OBSERVATIONS OF CIT(A) , IN VIEW OF EVIDENCES FILED BY ASSESSEE I.E. QUANTUM OF AGRICU LTURAL INCOME EARNED BY THEM. IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN MAKING ADDITION UNDER SECTION 69 OF THE ACT OF 8,30,000/ - AND 8,70,000/ - ON ACCOUNT OF CASH LOAN RECEIVED FROM THE SAID PARTIES. WE FIND NO MERIT IN THE ORDER OF CIT(A) AND THE SAME IS DISMISSED . REVERSING THE SAME, WE DELETE ADDITION OF 8,30,000/ - AND 8,70,000/ - IN THE HANDS OF ASSESSEE. 10. COMING TO THE ADDITION OF 25 LAKHS I.E. LOAN TAKEN FROM TWO SISTERS OF ASSESSEE, WHO HAD NOT PAID CASH TO THE ASSESSEE BUT HAD DEP OSITED THE SAME THROUGH DD FOR THE PAYMENT OF PURCHASE OF PROPERTY. THE AMOUNT HAS BEEN DIRECTLY DEPOSITED INTO THE BANK ACCOUNT OF ASSESSEE AND THERE IS NO DISPUTE ABOUT THE SAME. THE ASSESSING OFFICER HOLDS IT TO BE UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT. 11. FIRST OF ALL, THE INVESTMENTS ARE RECORDED IN THE BANK ACCOUNT AND SECONDLY, THE ASSESSEE HAS EXPLAINED THE SOURCE OF SAID DEPOSIT I.E. OUT OF LOAN RECEIVED FROM HIS TWO SISTERS, WHO HAD SUFFICIENT AGRICULTURAL LANDHOLDING AND HAD ALSO CARRIED ON AGRICULTURAL ACTIVITY ON THE SAID LAND. THE ASSESSEE ITA NO. 156 /P U N/20 1 6 PRATAP R SHINDE 7 PRODUCED THE RECEIPTS OF SALE OF PULSES AND ONIONS DURING THE YEAR . THE PLEA OF ASSESSEE WAS REJECTED ON THE GROUND THAT IT WAS DIFFICULT TO LINK THE AGRICULTURAL RECEIPTS TO ACTUAL DEMAND DRAFT PURCHASED. THERE IS NO MERIT IN THE OBSERVATIONS OF CIT(A) IN THIS REGARD AND REVERSING THE SAME, WE DELETE THE ADDITION MADE IN THE HANDS OF ASSESSEE, WHERE THE ASSESSEE HAS EXPLAINED THE NATURE OF ENTRIES COMPLETELY. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 12 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 12 TH DAY OF FEBRUARY , 201 9 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SU SHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 12 TH FEBRUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 3 , PUNE ; 4. THE PR. CI T - 2 , PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE