ITO, Trichy V. N.Dheepa, Trichy

ITA 1640/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96249 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 08-10-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 17-07-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Gift; Business expenditure
• Section: 80C; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . ! '# , $ %& ' [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ] ./ I.T.A.NO.1640/MDS/2015 / ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER WARD 3(2) TRICHY VS. SMT. N. DHEEPA NO.7, 10 TH CROSS WEST THILLAINAGAR, TRICHY-18 [PAN AFYPD 4743 A ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 08 - 10 - 2015 / DATE OF PRONOUNCEMENT : 16 - 10 - 2015 , / O R D E R PER BENCH THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, TIRUCH IRAPALLI, DATED 27.4.2015 FOR ASSESSMENT YEAR 2011-12. 2. NONE ATTENDED ON BEHALF OF THE ASSESSEE INSPITE OF SERVICE OF NOTICE. WE, THEREFORE, HEARD THE LD. DEPARTMENTA L REPRESENTATIVE AND PROCEEDED TO DECIDE THE APPEAL ON MERITS. ITA NO.1640/15 :- 2 -: 3. THE FIRST GROUND IS THAT THE CIT(A) ERRED IN DELETI NG THE ADDITION OF ` 46,10,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. THE SECOND GROUND IS WITH REGARD TO DELETION OF ADDITION OF ` 1 LAKH CLAIMED BY THE ASSESSEE U/S 80C OF THE ACT TO WARDS LIC INSURANCE PREMIUM. 4. THE FACTS OF THE FIRST ISSUE ARE THAT THE ASSESSEE MADE CASH DEPOSITS INTO HER BANK ACCOUNT FROM TIME TO TIME TO THE TUNE OF ` 46,10,000/-. BEFORE THE ASSESSING OFFICER, THE SAM E WAS EXPLAINED BY THE ASSESSEE AS GIFT RECEIVED FROM HER HUSBAND SHR I S. NEHRU MOHANRAJ. THE ASSESSEE AS WELL AS HER HUSBAND ARE IN THE BUSINESS OF CONDUCTING BUS OPERATIONS. ACCORDING TO THE ASSES SEE, BOTH ARE MAINTAINING REGULAR BOOKS OF ACCOUNT AND THESE ENTR IES ARE DULY REFLECTED. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT RECEIPT OF A SUM OF ` 46,10,000/- WHICH IS SAID TO BE A GIFT FOR WHICH T HE ASSESSEES HUSBAND SHRI S. NEHRU MOHANRAJ HAS NO EN OUGH SOURCE TO MAKE HER GIFT AND ALSO THERE IS NO OCCASION FOR MAK ING SUCH GIFT. HE ADDED THE AMOUNT OF ` 46,10,000/- AS UNEXPLAINED GIFT U/S 68 OF THE ACT IN THE HANDS OF ASSESSEE. THE ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) OBSERVED THAT THE ASSESSEE PRODUCED REGULAR BOOKS OF ACCOUNT AND THIS AMOUNT HAS BEEN PAID TO THE ASSESSEE BY HER HUSBAND TO MEET HIS BUSINESS E XPENSES AND IT WAS ONLY REIMBURSEMENT OF BUSINESS EXPENSES BY THE ASSESSEES ITA NO.1640/15 :- 3 -: HUSBAND. HE FURTHER OBSERVED THAT THE ASSESSEE AN D HER HUSBAND ARE HAVING CURRENT ACCOUNT WITH EACH OTHER INVOLVED IN SAME BUSINESS OF OPERATING BUSES TRANSACTED PAYMENT OF EXPENSES OF T HE ASSESSEES HUSBANDS BUSINESS EXIGENCIES AND THE SAME WERE REI MBURSED BY HER HUSBAND OUT OF HIS BUSINESS TRANSACTIONS. THE ONLY NOMENCLATURE USED BY THE ASSESSEE TO THE ABOVE BUSINESS TRANSACTIONS IS GIFT. IN THIS REGARD, THE ASSESSEE HAS FURNISHED THE LEDGER EXTR ACTS REFLECTING THE CURRENT ACCOUNTS WHICH ARE RUNNING ACCOUNTS BETWEEN THE ASSESSEE AND HER HUSBAND HAVING OPENING BALANCES AS ON THE B EGINNING OF THE YEAR. THE BUSINESS EXPENSES RELATED TO HER HUSBAND WERE MET BY HER HAS ALSO BEEN DEBITED IN THE SAME ACCOUNT. ACCORDI NG TO THE CIT(A), THE ASSESSEE HAS PROPERLY EXPLAINED THE SOURCES AN D CAPACITY OF HER HUSBAND TO ADVANCE THE SUM TO THE ASSESSEE AND DEL ETED THE ADDITION. 5. WE HEARD THE LD. DR AND PERUSED THE MATERIAL ON REC ORD. IN OUR OPINION, THE PLEA OF THE ASSESSEE BEFORE THE C IT(A) IS TOTALLY CONTRARY TO THE PLEA TAKEN BEFORE THE ASSESSING OFF ICER. THE ASSESSING OFFICER MADE THE ADDITION ON THE REASON THAT FOR MA KING SUCH GIFTS, THE ASSESSEES HUSBAND HAS NO CAPACITY AND ALSO THERE W AS NO OCCASION FOR THE SAME. HOWEVER, THE CIT(A) OBSERVED THAT THIS I S REIMBURSEMENT OF EXPENDITURE INCURRED BY THE ASSESSEES HUSBAND WHICH NEEDS TO BE REQUIRED BY THE ASSESSING OFFICER. THE CIT(A) DELE TED THE ADDITION ITA NO.1640/15 :- 4 -: WITHOUT CALLING FOR THE REMAND REPORT FROM THE ASSE SSING OFFICER. IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH IN ACCORDANCE WITH LAW AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT ISSUE IS DELETION OF ADDITION TOWARDS LIC INSURANCE PREMIUM. FACTS RELATES TO THIS ISSUE ARE THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80C OF ` 1,04,870/- AS LIC PREMIUM AND THE SAME WAS CREDITED IN THE ACCOUNT OF SHRI S.NEHRU MO HANRAJ AS LOAN DUE TO HIM. IN OTHER WORDS, THE INSURANCE PREMIUM ON BEHALF OF THE ASSESSEE WAS PAID BY HER HUSBAND. THE ASSESSING OF FICER PLACED RELIANCE ON THE ORDER OF THE ITAT COCHIN BENCH IN T HE CASE OF GOWTHAM REDDY VS ITO IN I.T.A.NO.418/COCH/2010, DAT ED 31.10.2011, WHEREIN THE DEDUCTION U/S 80C HAS BEEN ALLOWED FOR LIC PREMIUM PAYMENTS MADE OUT OF LOAN FUNDS. ON APPEAL, THE C IT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT THE THER E WAS CASH BALANCE IN THE HANDS OF THE ASSESSEE AS ON 31.3.2 011 AT ` 32,60,390/- AND PAYMENT MADE TO LIC OF ` 1,04,870/- WAS ON 21.3.2011 OUT OF THE AVAILABLE CASH BALANCE AS PER THE CAPITAL ACCOUNT. HENCE, THE ASSESSING OFFICER WAS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. ITA NO.1640/15 :- 5 -: 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL O N RECORD. THE FINDING OF THE CIT(A) IS CONTRARY TO THE OBSERVATION OF THE ASSESSING OFFICER IN HIS ORDER. ACTUALLY, THE PAYM ENT HAS BEEN MADE BY THE ASSESSEES HUSBAND ON BEHALF OF THE ASSESS EE FOR WHICH CORRESPONDING ENTRY WAS IN THE ASSESSEES BOOKS OF ACCOUNT. HOWEVER, THE CIT(A) OBSERVED THAT ASSESSEES HUSBA ND HAS PAID THE LIC PREMIUM. BEING SO, THIS REQUIRES VERIFICATION BY THE ASSESSING OFFICER. WE, THEREFORE, REMIT THIS ISSUE BACK TO T HE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. THE ASSESSEE IS DIRECTED TO PRODUCE ALL NECESSARY DOCUMENTS BEFORE THE ASSESSING OFFI CER FOR VERIFICATION. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( . ! '# ) ( V. DURGA RAO ) $ / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 16 TH OCTOBER, 2015 RD $%&& '(&)( / COPY TO: & 1 . / APPELLANT 3. & *&+, / CIT(A) 5. (-.& / / DR 2. / RESPONDENT 4. & * / CIT 6. .0&1 / GF