DCIT, Trichy V. Nazimul Asif, Trichy

ITA 1656/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96399 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 23-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 20-07-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: K MEENAKSHI SUNDARAM
• Keywords: Capital asset; Gift; Cost of acquisition; Fair market value
• Section: 142(1); 69

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 1656/MDS/2015 / ASSESSMENT YEAR :201 1 - 1 2 THE DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE 1(I), TRICHY. VS. SHRI NA Z IMUL ASIF, NO.2, RACQUET COURT LANE, CANTONMENT, TRICHY. [PAN: AA CPN5230F ] ( APPEL LANT ) ( R ESPONDENT ) / APPELLANT BY : SHRI A. V. SREEKANTH , JCIT / RESPONDENT BY : SHRI K.MEENAKSHISUNDARAM, ADVOCATE / DATE OF HEARING : 23 . 11 .201 5 / DATE OF P RONOUNCEME NT : 27 . 1 1 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) I , TIRUCHIRAPALLI , DATED 2 1 . 0 4 .201 5 RELEVANT TO THE ASSESSMENT YEAR 20 1 1 - 1 2 . THE FIRST ISSUE RE LATES TO WHETHER, INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER WAS HELD THE ASSET OR THE YEAR IN WHICH THE ASSESSEE BECOME OWNER BY WAY OF GIFT DEED FROM HIS FATHER? , AND THE SECOND ISSUE RELATES TO DELETION OF DISALLOWANCE MADE UNDER INCOME FROM OTHER SOURCES . I.T.A. NO . 1656 /M/ 1 5 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND FILED HIS RETURN OFFERING AN INCOME OF .90,23,370/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] WAS SERVED ON THE ASSESSEE ON 13.09.2012. SUBSEQUENTLY, NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO ISSUED CA LLING FOR VARIOUS DETAILS. ON EXAMINATION OF SALE DEED AND COMPUTATION SHEET FOR CAPITAL GAIN, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS RECEIVED THE PROPERTY THROUGH GIFT FROM HIS FATHER ON 30.04.2004. THE ASSESSEE HAS FILED A REVISED CALCUL ATION SHEET FOR CAPITAL GAIN DURING THE PROCEEDINGS. IN THE REVISED CALCULATION SHEET, THE ASSESSEE HAS SEPARATED THE VALUE OF LAND AND BUILDING TO CALCULATE THE CAPITAL GAIN IN HIS HAND. WHILE COMPUTING THE LIABILITY OF CAPITAL GAIN ON THE SALE OF THE LAN D, THE ASSESSEE ADOPTED THE FAIR MARKET VALUE OF THE PROPERTY STATING THAT THE LAND WAS PURCHASED BY HIS FATHER BEFORE 01.04.1981. THEREFORE, THE ASSESSEE HAS TAKEN FAIR MARKET VALUE AS ON 01.04.1981 OF THE LAND FOR INDEXATION OF THE COST OF ACQUISITION. H OWEVER, THE ASSESSING OFFICER HAS DISALLOWED THE INDEXATION BENEFIT CLAIMED BY THE ASSESSEE WITH EFFECT FROM 01.04.1981 AND ASSESSED THE LONG TERM CAPITAL GAINS OF . 90,11,282/ - . 3. ON APPEAL, THE LD. CIT(A), BY CONSIDERING THE JUDGMENT OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. MANJULA J. SHAH 355 ITR 474, HAS OBSERVED THAT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, INDEXED COST I.T.A. NO . 1656 /M/ 1 5 3 OF ACQUISITION H AS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME OWNER OF ASSET BY WAY OF GIFT DEED FROM HIS FATHER AND DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE CAPITAL GAINS ACC ORDINGLY. 4. THE REVENUE IS IN APPEAL BEFORE US AND THE LD. DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ISSUE INVOLVED IN THE APPEAL IS WHETHER, FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEA R IN WHICH THE PREVIOUS OWNER WAS HELD THE ASSE T OR THE YEAR IN WHICH THE ASSESSEE BECOME OWNER BY WAY OF INHERITANCE? THE VERY SAME ISSUE HAS BEEN CONSIDERED BY THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. MANJULA J. SHAH (SUPRA), WHEREIN THE HON B LE HIGH COURT HAS OBSERVED AS UNDER: 19) IT IS TRUE THAT THE WORDS OF A STATUTE ARE TO BE UNDERSTOOD IN THEIR NATURAL AND ORDINARY SENSE UNLESS THE OBJECT OF THE STATUTE SUGGESTS TO THE CONTRARY. THUS, IN CONSTRUING THE WORDS ASSET WAS HELD BY THE ASSESS EE IN CLAUSE (III) OF EXPLANATION TO SECTION 48 OF THE ACT, ONE HAS TO SEE THE OBJECT WITH WHICH THE SAID WORDS ARE USED IN THE STATUTE. IF ONE READS EXPLANATION 1(I)(B) TO SECTION 2(42A) TOGETHER WITH SECTION 48 AND 49 OF THE ACT, IT BECOMES ABSOLUTELY C LEAR THAT THE OBJECT OF THE STATUTE IS NOT MERELY TO TAX THE CAPITAL GAINS ARISING ON TRANSFER OF A I.T.A. NO . 1656 /M/ 1 5 4 CAPITAL ASSET ACQUIRED BY AN ASSESSEE BY INCURRING THE COST OF ACQUISITION, BUT ALSO TO TAX THE GAINS ARISING ON TRANSFER OF A CAPITAL ASSET INTER ALIA ACQU IRED BY AN ASSESSEE UNDER A GIFT OR WILL AS PROVIDED UNDER SECTION 49 OF THE ACT WHERE THE ASSESSEE IS DEEMED TO HAVE INCURRED THE COST OF ACQUISITION. THEREFORE, IF THE OBJECT OF THE LEGISLATURE IS TO TAX THE GAINS ARISING ON TRANSFER OF A CAPITAL ACQUIR ED UNDER A GIFT OR WILL BY INCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER IN DETERMINING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE ASSESSEE, THEN THAT OBJECT CANNOT BE DEFEATED BY EXCLUDING THE PERIOD FOR WHICH THE S AID ASSET WAS HELD BY THE PREVIOUS OWNER WHILE DETERMINING THE INDEXED COST OF ACQUISITION OF THAT ASSET TO THE ASSESSEE. IN OTHER WORDS, IN THE ABSENCE OF ANY INDICATION IN CLAUSE (III) OF THE EXPLANATION TO SECTION 48 OF THE ACT THAT THE WORDS ASSET WAS HELD BY THE ASSESSEE HAS TO BE CONSTRUED DIFFERENTLY, THE SAID WORDS SHOULD BE CONSTRUED IN ACCORDANCE WITH THE OBJECT OF THE STATUTE, THAT IS, IN THE MANNER SET OUT IN EXPLANATION 1(I)(B) TO SECTION 2(42A) OF THE ACT. 20. TO ACCEPT THE CONTENTION OF T HE REVENUE THAT THE WORDS USED IN CLAUSE (III) OF THE EXPLANATION TO SECTION 48 OF THE ACT HAS TO BE READ BY IGNORING THE PROVISIONS CONTAINED IN SECTION 2 OF THE ACT RUNS COUNTER TO THE ENTIRE SCHEME OF THE ACT. SECTION 2 OF THE ACT EXPRESSLY PROVIDES THA T UNLESS THE CONTEXT OTHERWISE REQUIRES, THE PROVISIONS OF THE ACT HAVE TO BE CONSTRUED AS PROVIDED UNDER SECTION 2 OF THE ACT. IN SECTION 48 OF THE ACT, THE EXPRESSION ASSET HELD BY THE ASSESSEE IS NOT DEFINED AND, THEREFORE, IN THE ABSENCE OF ANY INTEN TION TO THE CONTRARY THE EXPRESSION ASSET HELD BY THE ASSESSEE IN CLAUSE (III) OF THE EXPLANATION TO SECTION 48 OF THE ACT HAS TO BE CONSTRUED IN CONSONANCE WITH THE MEANING GIVEN IN SECTION 2(42A) OF THE ACT. IF THE MEANING GIVEN IN SECTION 2(42A) IS NO T ADOPTED IN CONSTRUING THE WORDS USED IN SECTION 48 OF THE ACT, THEN THE GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED UNDER A GIFT OR WILL BE OUTSIDE THE PURVIEW OF THE CAPITAL GAINS TAX WHICH IS NOT INTENDED BY THE LEGISLATURE. THEREFORE, THE AR GUMENT OF THE REVENUE WHICH RUNS COUNTER TO THE LEGISLATIVE INTENT CANNOT BE ACCEPTED. 21. APART FROM THE ABOVE, SECTION 55(1)(B)(2)(II) OF THE ACT PROVIDES THAT WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY ANY OF THE MODES SPECIFIED UNDER SECTION 49(1) OF THE ACT, NOT ONLY THE COST OF IMPROVEMENT INCURRED BY THE ASSESSEE BUT ALSO THE COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OWNER SHALL BE DEDUCTED FROM THE TOTAL CONSIDERATION RECEIVED BY THE ASSESSEE WHILE COMPUTING THE CAPITAL GA INS UNDER SECTION 48 OF THE ACT. THE QUESTION OF DEDUCTING THE I.T.A. NO . 1656 /M/ 1 5 5 COST OF IMPROVEMENT INCURRED BY THE PREVIOUS OWNER IN THE CASE OF AN ASSESSEE COVERED UNDER SECTION 49(1) OF THE ACT WOULD ARISE ONLY IF THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER IS INCLUDED IN DETERMINING THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE ASSESSEE. THEREFORE, IT IS REASONABLE TO HOLD THAT IN THE CASE OF AN ASSESSEE COVERED UNDER SECTION 49(1) OF THE ACT, THE CAPITAL GAINS LIABILITY HAS TO BE COMPUTED BY CONSIDER ING THAT THE ASSESSEE HELD THE SAID ASSET FROM THE DATE IT WAS HELD BY THE PREVIOUS OWNER AND THE SAME ANALOGY HAS ALSO TO BE APPLIED IN DETERMINING THE INDEXED COST OF ACQUISITION. 22. THE OBJECT OF GIVING RELIEF TO AN ASSESSEE BY ALLOWING INDEXATION IS WITH A VIEW TO OFFSET THE EFFECT OF INFLATION. AS PER THE CBDT CIRCULAR NO.636 DATED 31/8/1992 [SEE 198 ITR 1 (ST)] A FAIR METHOD OF ALLOWING RELIEF BY WAY OF INDEXATION IS TO LINK IT TO THE PERIOD OF HOLDING THE ASSET. THE SAID CIRCULAR FURTHER PROVIDES THAT THE COST OF ACQUISITION AND THE COST OF IMPROVEMENT HAVE TO BE INFLATED TO ARRIVE AT .THE INDEXED COST OF ACQUISITION AND THE INDEXED COST OF IMPROVEMENT AND THEN DEDUCT THE SAME FROM THE SALE CONSIDERATION TO ARRIVE AT THE LONG TERM CAPITAL GAINS. IF INDEXATION IS LINKED TO THE PERIOD OF HOLDING THE ASSET AND IN THE CASE OF AN ASSESSEE COVERED UNDER SECTION 49(1) OF THE ACT, THE PERIOD OF HOLDING THE ASSET HAS TO BE DETERMINED BY INCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS O WNER, THEN OBVIOUSLY IN ARRIVING AT THE INDEXATION, THE FIRST YEAR IN WHICH THE SAID ASSET WAS HELD BY THE PREVIOUS OWNER WOULD BE THE FIRST YEAR FOR WHICH THE SAID ASSET WAS HELD BY THE ASSESSEE. 7 . WHILE CONCURRING WITH THE DECISION IN THE CASE OF MA NJULA J. SHAH, THE HON BLE DELHI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST V. CIT [2012] 205 TAXMAN 456 (DELHI) HAS HELD AS UNDER: 15. NORMALLY LITERAL RULE OF CONSTRUCTION IS APPLIED AND THE WORDS OF THE STATUTE ARE TO BE UNDERSTOOD IN THEIR ORDINAR Y AND POPULAR SENSE, BUT THIS IS SUBJECT TO THE RIDER THAT THIS SHOULD NOT LEAD TO ABSURDITY, CONTRADICTION OR STULTIFICATION OF THE STATUTORY OBJECTIVE. LITERAL CONSTRUCTION SHOULD BE AVOIDED, IF IT LEADS TO UNWARRANTED REPUGNANCE OR INCONSISTENCIES. IN S UCH CIRCUMSTANCES THE EXPRESSION/WORDS CAN BE INTERPRETED BY THE COURTS TO AVOID ABSURDITIES AND INCONSISTENCIES BETWEEN THE PROVISIONS. IN THE PRESENT CASE, AS NOTICED ABOVE, THE CONSTRUCTION PLACED BY THE REVENUE WILL LEAD TO INCONSISTENCY AND INCONGRUIT IES, WHEN WE REFER TO SECTION 49 AND CLAUSE (IV) TO EXPLANATION (1) TO SECTION 48 . THIS WILL RESULT IN ABSURDITIES BECAUSE I.T.A. NO . 1656 /M/ 1 5 6 THE HOLDING OF PREDECESSOR HAS TO BE ACCOUNTED FOR THE PURPOSE OF COMPUTING THE COST OF ACQUISITION, COST OF IMPROVEMENT AND INDEXED COST OF IMPROVEMENT BUT AS PER THE REVENUE NOT FOR THE PURPOSE OF INDEXED COST OF ACQUISITION. AS NOTICED BELOW, EVEN FOR THE PURPOSE OF DECIDING WHETHER THE TRANSACTION IS A SHORT TERM CAPITAL GAIN OR LONG TERM CAPITAL GAIN, THE HOLDING BY THE PREDECESSOR IS TO BE TAKEN INTO CONSIDERATION. 16. BENEFIT OF INDEXED COST OF INFLATION IS GIVEN TO ENSURE THAT THE TAXPAYER PAYS CAPITAL GAIN TAX ON THE 'REAL' OR ACTUAL GAIN AND NOT ON THE INCREASE IN THE CAPITAL VALUE OF THE PROPERTY DUE TO INFLATION. THIS IS THE OBJECT OR PURPOSE IN ALLOWING BENEFIT OF INDEXED COST OF IMPROVEMENT, EVEN IF THE IMPROVEMENT WAS BY THE PREVIOUS OWNER IN CASES COVERED BY SECTION 49 . ACCORDINGLY THERE IS NO JUSTIFICATION OR REASON TO NOT ALLOW THE BENEFIT OF INDEXATION TO THE COST OF ACQUISITION IN CASES COVERED BY SECTION 49 . THIS IS NOT THE LEGISLATIVE INTENT BEHIND CLAUSE (III) TO EXPLANATION TO SECTION 48 OF THE ACT. 17. THERE IS NO REASON AND JUSTIFICATION TO HOLD THAT CLAUSE (III) OF THE EXPLANATION INTENTS TO REDUCE OR REST RICT THE 'INDEXED COST OF ACQUISITION' TO THE PERIOD DURING WHICH THE ASSESSEE HAS HELD THE PROPERTY AND NOT THE PERIOD DURING WHICH THE PROPERTY WAS HELD BY THE PREVIOUS OWNER. THE INTERPRETATION RELIED BY THE ASSESSEE IS REASONABLE AND IN CONSONANCE WITH THE OBJECT AND PURPOSE BEHIND SECTIONS 48 AND 49 OF THE ACT. 18. THE EXPRESSION 'HELD BY THE ASSESSEE' USED IN EXPLANATION (III) TO SECTION 48 HAS TO BE UNDERSTOOD IN THE CONTEXT AND HARMONIOUSLY WITH OTHER SECTIONS. THE COST OF ACQUISITION STIPULATED IN SECTION 49 MEANS THE COST FOR WHICH THE PREVIOU S OWNER HAD ACQUIRED THE PROPERTY. THE TERM 'HELD BY THE ASSESSEE' SHOULD BE INTERPRETED TO INCLUDE THE PERIOD DURING WHICH THE PROPERTY WAS HELD BY THE PREVIOUS OWNER. 8 . THE LD. CIT(A), BY FOLLOWING THE ABOVE DECISIONS, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. BEFORE US, THE REVENUE COULD NOT CONTROVERT THE ABOVE FINDINGS OF THE DECISIONS OF THE HON BLE HIGH COURT S OR FILED ANY HIGHER COURT DECISION HAVING MODIFIED OR REVERSED THE ABOVE DECISION OF THE HON BLE HIGH COURT S . THE LD. CIT(APPEALS) HAS RIGHTLY FOLLOWED THE ABOVE I.T.A. NO . 1656 /M/ 1 5 7 JUDGEMENT S AND WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(APPEALS) ON THIS ISSUE . THUS, T HE GROUND RAISED BY THE REVENUE IS DISMISSED. 9. THE SECOND ISSUE RAISED IN THE APPEAL OF REVENUE PERTAINS TO DELETION OF DIS ALLOWANCE MADE UNDER INCOME FROM OTHER SOURCES . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT ON VERIFICATION OF THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED IN LAKSHMI VILAS BANKA AND STATE BANK OF INDIA, CASH DEPOSITS WERE FOUND ON VA RIOUS DATES TO THE TUNE OF .18,70,000/ - [9.7+2+3+2+2 LAKHS) IN LAKSHMI VILAS BANK AND .4,00,000/ - IN STATE BANK OF INDIA. WHEN THE SOURCE OF THE CASH DEPOSITS WERE CALLED FOR, THE AR OF THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASS ESSEE WAS RECEIVING RENTAL INCOME FOR MORE THAN 25 YEARS IN CASH AND CHEQUE AND AFTER MEETING PERSONAL EXPENDITURE AND KEPT THE BALANCE TO MEET THE EXPENDITURE OF PROPERTY. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS SOLD A CAR IN APRIL, 2008 FOR .2.3 LAK HS AND FURTHER SUBMITTED THAT THE SALE PROCEEDS OF CAR AND PAST SAVINGS HELD ON HAND WERE DEPOSITED INTO LAKSHMI VILAS BANK IN ORDER TO ISSUE A CHEQUE TO THE CAR DEALER. WITH REGARD TO THE DEPOSITS OF .9 LAKHS IN LAKSHMI VILAS BANK ON VARIOUS DATES [10.07 .2010 TO 15.07.2010], THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT .10 LAKHS WAS RECEIVED BY HIS WIFE FROM HIS FATHER AS GIFT MORTIS CAUSA (MEANS GIFT OF PERSONAL PROPERTY GIVEN TO A PERSON BEFORE I.T.A. NO . 1656 /M/ 1 5 8 THE OTHER HAS DIED, THOUGH HE IS EXPECTED TO DIE). FURTHER, THE ASSESSEE HAS STATED THAT 9.26 LAKHS WAS RECEIVED DURING THE FINANCIAL YEAR 2007 - 08 AS A LUMP SUM THROUGH COURT ORDER IN LITIGATION WITH TENANTS. IN THIS REGARD, THE BANK PASS BOOK OF SHRI A. JEELANI BASHA (FATHER OF THE ASSESSEE) PRO DUCED WAS VERIFIED AND THE ASSESSING OFFICER FOUND THE BANK ENTRIES. HOWEVER, ON 27.06.2007, AN AMOUNT OF .2,26,000/ - WAS WITHDRAWN. ALSO .8,00,000/ - WAS WITHDRAWN TO SOME OTHER ACCOUNT ON 03.07.2007. THE ASSESSEE COULD NOT EXPLAIN THE DETAILS OF ACCOUNT NUMBER TO WHICH THE AMOUNT WAS TRANSFERRED. HENCE THIS MONEY WAS NOT AVAILABLE IN THE BANK ACCOUNT OF SHRI A. JEELANI BASHA TO GIVE AS GIFT. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE AFFIDAVIT OF GIFT IS SIGNED BY THE RECEIVER OF THE GIFT AND TH ERE IS NO PROPER OR VERIFIABLE SOURCE TO RECEIVE THIS GIFT. EVEN AFTER THIS MONEY HAS BEEN DEPOSITED IN THE HANDS OF NAZIMUL ASIF FOR WHICH THERE IS NO PROPER EXPLANATION. AN AFFIDAVIT IS A PIECE OF EVIDENCE, WHICH ALONG WITH OTHER MATERIAL ON RECORD, HAS TO BE TAKEN INTO CONSIDERATION BEFORE ARRIVING AT A FINDING. A STATEMENT BY A DEPONENT CAN BE HELD TO BE UNRELIABLE EITHER ON THE BASIS OF CROSS - EXAMINATION OF THE DEPONENT OR BY REFERENCE TO OTHER MATERIAL ON RECORD. THE ASSESSING OFFICER HAS FURTHER OBSE RVED THAT THERE IS A LONG DELAY OF 24 MONTHS BETWEEN RECEIPT OF MONEY AND DEPOSIT AND IT CANNOT BE ACCEPTED AS THE MONEY RECEIVED COULD HAVE BEEN SPENT IN - BETWEEN. THE ASSESSEE HAS ALSO GIVEN CASH FLOW STATEMENT FOR THE ASSESSMENT YEARS 2000 - 01 TO 2010 - 11, WHEREIN THE BALANCE SUM IS SHOWN AS CASH ON HAND. IT I.T.A. NO . 1656 /M/ 1 5 9 IS VERY DIFFICULT TO ACCEPT THE CASH ON HAND EXPLANATION. ALSO, CASH DEPOSIT IN BANK SHOULD BE EXPLAINED BY THE ASSESSEE OTHERWISE IT IS UNEXPLAINED INCOME UNDER SECTION 69 OR 69B OF THE ACT. SINCE THE ASSESSEE HAS NOT EXPLAINED THE HUGE CASH HELD IN HAND, THE CASH DEPOSITED TO THE TUNE OF .18.70 LAKHS WAS DISALLOWED AND ADDED TO RETURNED INCOME. FURTHER, THE ASSESSEE HAS NOT EXPLAINED THE SOURCE FOR CASH DEPOSIT OF .4 LAKHS MADE IN THE STATE BANK OF INDIA ON 11.03.2011, THE SAME WAS ADDED BACK TO THE RETURNED INCOME. 10. ON APPEAL, AFT ER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. 11. THE LD. DR HAS SUBMITTED THAT THE LD. CIT(A) WAS NOT CORRECT IN ACCEPTING THE OPENING CASH BALANCE OF .29,62,143/ - IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE EXCEPT CASH FLOW STATEMENT AS SOURCE OF THE CASH DEPOSITS. FURTHER, THE ASSESSEE HAS NOT FILED WEALTH TAX RETURN FOR THE ASSESSMENT YEAR 2011 - 12 WHICH PROVES THAT KEEPING CASH OF .29,62,143/ - IN HAND IS AFTERTHOUGHT OF THE ASSESSEE TO EXPLAIN SOURCE FOR CASH DEPOSITS. THEREFORE, HE STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 12. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). I.T.A. NO . 1656 /M/ 1 5 10 13. WE HAVE HEA RD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WITH REGARD TO THE DEPOSITS OF .9 LAKHS IN LAKSHMI VILAS BANK ON VARIOUS DATES [10.07.2010 TO 15.07.2010], THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT .10 LAKHS WAS RECEIVED BY HIS WIFE FROM HIS FATHER AS GIFT MORTIS CAUSA (MEANS GIFT OF PERSONAL PROPERTY GIVEN TO A P ERSON BEFORE THE OTHER HAS DIED, THOUGH HE IS EXPECTED TO DIE). FURTHER, THE ASSESSEE HAS STATED THAT 9.26 LAKHS WAS RECEIVED DURING THE FINANCIAL YEAR 2007 - 08 AS A LUMP SUM THROUGH COURT ORDER IN LITIGATION WITH TENANTS. IN THIS REGARD, THE BANK PASS BOO K OF SHRI A. JEELANI BASHA (FATHER OF THE ASSESSEE) PRODUCED WAS VERIFIED AND THE ASSESSING OFFICER FOUND THE BANK ENTRIES. HOWEVER, ON 27.06.2007, AN AMOUNT OF .2,26,000/ - WAS WITHDRAWN. ALSO .8,00,000/ - WAS WITHDRAWN TO SOME OTHER ACCOUNT ON 03.07.2007 . THE ASSESSEE COULD NOT EXPLAIN THE DETAILS OF ACCOUNT NUMBER TO WHICH THE AMOUNT WAS TRANSFERRED. HENCE THIS MONEY WAS NOT AVAILABLE IN THE BANK ACCOUNT OF SHRI A. JEELANI BASHA TO GIVE AS GIFT. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE AFFIDAV IT OF GIFT IS SIGNED BY THE RECEIVER OF THE GIFT AND THERE IS NO PROPER OR VERIFIABLE SOURCE TO RECEIVE THIS GIFT. EVEN AFTER THIS MONEY HAS BEEN DEPOSITED IN THE HANDS OF NAZIMUL ASIF FOR WHICH THERE IS NO PROPER EXPLANATION. FURTHER, THE ASSESSEE HAS NOT EXPLAINED THE SOURCE FOR CASH DEPOSIT OF .4 LAKHS MADE IN THE STATE BANK OF INDIA ON 11.03.2011. THE AMOUNT OF .9.26 LAKHS RECEIVED DURING THE FINANCIAL YEAR 2007 - 08 AS A LUMPSUM THROUGH COURT ORDER IN I.T.A. NO . 1656 /M/ 1 5 11 LITIGATION IS NOT UNDER DISPUTE. HOWEVER, THE ASSES SING OFFICER HAS OBSERVED IN THE ASSESSMENT ORDER THAT ON 27.06.2007, AN AMOUNT OF .2,26,000/ - WAS WITHDRAWN AND A LSO .8,00,000/ - WAS WITHDRAWN TO SOME OTHER ACCOUNT ON 03.07.2007 BY ASSESSEE S FATHER. SO FAR AS AVAILABILITY OF OPENING BALANCE IN ASSESSE E S FATHER S ACCOUNT , THERE WAS NO DISCUSS ION IN THE ASSESSMENT ORDER. ON VERIFYING THE CASH FLOW STATEMENT FILED FROM 01.04.2010 TO 31.03.2011, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSING OFFICER HAS FAILED TO COMPARE THE AVAILABILITY OF OPENING CASH B ALANCE AT .29,62,143/ - AS PER THE RETURNS OF INCOME FILED BEFORE THE DEPARTMENT FOR EXPLAINING CASH DEPOSITS MADE WITH LAKSHMI VILAS BANK AS WELL AS STATE BANK OF INDIA. IN VIEW OF THE ABOVE FACTS, THE OPENING BALANCE AVAILABLE WITH ASSESSEE S FATHER TO OFFER GIFT NEEDS TO BE VERIFIED BY THE ASSESSING OFFICER SINCE THERE WAS NO DISCUSSION IN THE ASSESSMENT ORDER . MOREOVER, EVEN BEFORE THE LD. CIT(A), THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE FOR THE SOURCE FOR THE CASH OF .4 LAKHS DEPOSITED IN THE STATE BANK OF I NDIA ON 11.03.2011 AND THE LD. CIT(A) HAS ALSO NOT DISCUSSED ABOUT THE SOURCE. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO EXAMINE AND DECIDE THE ISSU E AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FURNISH VALID DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO . 1656 /M/ 1 5 12 14 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 27 TH NOVEMBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL M EMBER CHENNAI, DATED, THE 27 . 1 1 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.