Shri T.R. Subramanian, CHENNAI V. ITO, Pudukkottai

ITA 167/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81136 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 08-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-01-2014
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Keywords: Gift; Peak credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO.167/MDS/2014 / ASSESSMENT YEAR : 2009-10 SHRI T.R.SUBRAMANIAN, WARD 27, #36, T.S.P. ILLAM, VEERAMAKALIAMMAN KOIL STREET, ARANTHANGI, PUDUKKOTTAI DISTRICT [PAN: BGWPS 0913 F] ( !% /APPELLANT) VS INCOME TAX OFFICER, WARD-I(1), PUDUKKOTTAI ( &'!% /RESPONDENT) / APPELLANT BY : SHRI PHILIP GEORGE, ADVOCATE / RESPONDENT BY : SHRI N. MADHAVAN, JCIT / DATE OF HEARING : 08-07-2014 ! / DATE OF PRONOUNCEMENT : 04-09-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-TIRUCHIR APALLI, DATED 05-09-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 9-10. I.T.A. NO. 167/MDS/2014 2 2. THE ASSESSEE IS A MEDICAL PRACTITIONER. HE FILE D HIS RETURN OF INCOME FOR THE AY2009-10 ON 07-01-2010 DECLARING IN COME OF ` 3,51,705/-. IN RETURN OF INCOME, THE ASSESSEE DISC LOSED NET INCOME FROM MEDICAL PRACTICE UNDER THE HEAD INCOME FROM PROFESSION ` 51,705/- AND INCOME FROM OTHER SOURCES ` 3.00 LAKHS. THE CASE OF THE ASSESSEE WAS SELECTED FOR S CRUTINY ON THE BASIS OF AIR INFORMATION. NOTICE U/S.143(2) OF TH E INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS I SSUED TO THE ASSESSEE ON 15-09-2010. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE HAS ALLEGEDLY RECEIVED GIFTS OF ` 5.00 LAKHS EACH FROM HIS FATHER AND MOTHER. THE PARENTS OF THE ASSESSEE FILED CONF IRMATION LETTERS SUPPORTING THE VERSION OF ASSESSEE. HOWEVER, ON VE RIFICATION IT TRANSPIRED THAT GIFT TRANSACTIONS WERE NOT ACCOUNTE D BY THE PARENTS OF THE ASSESSEE IN THEIR RESPECTIVE FINANCIAL STATE MENTS. THE ASSESSING OFFICER ACCORDINGLY, MADE ADDITION OF ` 10.00 LAKHS U/S.69A. APART FROM ABOVE ADDITION, THE ASSESSING OFFICER MADE ADDITION OF ` 23,86,138/- AS PEAK CREDIT ON THE BASIS OF DEPOSITS IN THE SB A/CS OF THE ASSESSEE AND ` 2,75,000/- ON ACCOUNT OF UN-EXPLAINED CASH DEPOSITS IN THE SB A/C OF THE ASS ESSEE. I.T.A. NO. 167/MDS/2014 3 AGGRIEVED BY ASSESSMENT ORDER DATED 27-12-2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS ). THE CIT(APPEALS) AFTER EXAMINING MERITS OF THE CASE, DI SMISSED THE APPEAL OF ASSESSEE. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF CIT(APPEALS). 3. SHRI PHILIP GEORGE, ADVOCATE APPEARING ON BEHALF OF ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DISCHARGED HIS INITIAL ONUS BY PRODUCING CONFIRMATION LETTERS FROM HIS PAR ENTS WHO HAVE GIFTED THE MONEY. THE DONORS ARE CLOSE RELATIVES O F THE ASSESSEE, THUS, THE ADDITION MADE ON ACCOUNT OF UN-PROVED GIF TS IS UN-SUSTAINABLE. ON THE ISSUE OF PEAK CREDIT ADDITI ON THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTH ORITIES BELOW HAVE ERRED IN CONFIRMING AMOUNT OF ` 12,62,305/- AS ON 04-04-2008 WITH AXIS BANK AND ` 11,23,833/- AS ON 06-06-2008 WITH ICICI BANK. THE PEAK CREDIT CANNOT BE ARRIVED AT BANK WI SE, IT SHOULD BE ON THE BASIS OF CONSOLIDATED STATEMENT OF BOTH THE BANKS. THE LD.COUNSEL FURTHER CONTENDED THAT THE AUTHORITIES B ELOW HAVE ERRED IN MAKING ADDITION OF ` 2,75,000/- OF CASH DEPOSITS. THE ASSESSEE HAD WITHDRAWN ` 3.00 LAKHS ON 02-02-2009 FROM AXIS BANK, I.T.A. NO. 167/MDS/2014 4 PUDUKKOTTAI AND DEPOSITED THE SAME ON 21-02-2009 IN SAME BANK AT ANNA SALAI, CHENNAI. 4. ON THE OTHER HAND, SHRI N.MADHAVAN, APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES, AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. A PERUSAL OF RECORDS SHOW T HAT THE ASSESSEE HAS RECEIVED ` 10.00 LAKHS DURING THE PERIOD UNDER CONSIDERATION. THE SAID AMOUNT IS EXPLAINED BY ASS ESSEE AS GIFT FROM HIS FATHER AND MOTHER. THE ASSESSEE PRODUCED CONFIRMATION LETTERS FROM HIS PARENTS. TO ASCERTAIN THE GENUINE NESS OF GIFT, FOLLOWING PARAMETERS HAVE TO BE SATISFIED: I. IDENTITY OF THE DONOR; II. CREDITWORTHINESS OF THE DONOR; AND III. GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE, THE ASSESSEE HAS BEEN ABLE TO CLEARLY ESTABLISH THE IDENTITY OF THE DONORS. THEY ARE CLO SE BLOOD RELATIVES OF THE ASSESSEE. TO PROVE GENUINENESS OF THE TRANS ACTION AND I.T.A. NO. 167/MDS/2014 5 CREDITWORTHINESS OF THE DONORS, THE ASSESSEE PRODUC ED CONFIRMATION LETTERS FROM HIS PARENTS AND THEIR FIN ANCIAL STATEMENTS. THE ASSESSING OFFICER AFTER EXAMINING STATEMENT OF ACCOUNTS OF THE PARENTS OF THE ASSESSEE OBSERVED, THAT THE ALLE GED GIFT TRANSACTIONS HAVE NOT BEEN ACCOUNTED. THERE IS NO REDUCTION OF CAPITAL OR INCREASE IN LOANS OR ADVANCES. THE GIFT S HAVE NOT BEEN REFLECTED IN THE RETURNS OF INCOME FILED BY THE PAR ENTS OF THE ASSESSEE. CONFIRMATION LETTERS ALONE WOULD NOT SER VE THE PURPOSE TO ASCERTAIN THE GENUINENESS OF GIFTS. NON-DISCLOS URE OF GIFTS IN STATEMENT OF ACCOUNTS AND INCOME TAX RETURNS OF THE PARENTS OF THE ASSESSEE CAST SERIOUS SHADOW OF DOUBT OVER THE GIFT TRANSACTIONS. THE LD.COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE T O CONTROVERT THE FINDINGS OF THE AUTHORITIES BELOW. THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED, ACCORDINGLY. 6. THE SECOND ISSUE RAISED IN APPEAL IS WITH REGARD TO ADDITION TOWARDS PEAK CREDIT BASED ON THE DEPOSITS IN THE BA NK ACCOUNTS. THE ASSESSEE HAS ADMITTED THE FACT THAT HE IS ENGAG ED IN THE BUSINESS OF MONEY LENDING AND BROKERAGE IN MONEY LE NDING. THE ASSESSEE HAS CASH DEPOSITS OF ` 83,64,750/- AND ` 63,14,150/- IN HIS SB A/C WITH ICICI BANK AND AXIS BANK LTD., RESP ECTIVELY. HOWEVER, IN THE RETURN OF INCOME, THE ASSESSEE HAS NOT DECLARED I.T.A. NO. 167/MDS/2014 6 ANY INCOME FROM MONEY LENDING BUSINESS. THE ASSESS EE HAS ALSO NOT MAINTAINED ANY BOOKS OF ACCOUNT. ACCORDINGLY, T HE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF PEAK CREDITS IN THE SAVINGS BANK ACCOUNTS OF THE ASSESSEE BY TREATING THE SAME AS INCOME OF ASSESSEE FROM MONEY LENDING BUSINESS AND BROKERAGE. NO EXPLANATION WHAT-SO-EVER HAS BEEN FURNISHED BY THE ASSESSEE FOR NOT MAINTAINING BOOKS OF ACCOUNT OR NOT DISCLOSING INCOME FROM BROKERAGE AND MONEY LENDING BUSINESS. WE DO NOT FI ND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(AP PEALS) ON THE ISSUE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE A SSESSEE IS DISMISSED. 7. THE THIRD ISSUE RAISED IN APPEAL IS WITH REGARD TO ADDITION OF ` 2,75,000/-. THE LD.COUNSEL FOR THE ASSESSEE HAS CO NTENDED THAT THE ASSESSEE HAS WITHDRAWN CASH OF ` 3.00 LAKHS FROM HIS AXIS BANK A/C, PUDUKKOTTAI ON 02-02-2009 AND DEPOSITED ` 2,75,000/- ON 21-02-2009 AT AXIS BANK LTD. AT ANNA SALAI, CHEN NAI FROM THE SAME AMOUNT. THE ADDITION HAS BEEN MADE ONLY FOR T HE REASON THAT THE ASSESSEE HAS NOT REFLECTED THE TRANSACTION IN HIS BOOKS OF ACCOUNT. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS. THEREFORE, RECOR DING OF THE TRANSACTION IN THE BOOKS IS OUT OF QUESTION. THE P ROXIMITY OF I.T.A. NO. 167/MDS/2014 7 WITHDRAWAL AND DEPOSIT OF CASH GIVES LEVERAGE TO TH E EXPLANATION FURNISHED BY THE ASSESSEE. THIS GROUND OF APPEAL O F THE ASSESSEE IS ACCEPTED. IN RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWE D FOR THE AFORESAID REASONS. ORDER PRONOUNCED ON THURSDAY, THE 04 TH SEPTEMBER, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) '#$ / VICE PRESIDENT % &' / JUDICIAL MEMBER (% /CHENNAI, )& /DATED: 04 TH SEPTEMBER, 2014 TNMM &* +,-, /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ./0 /CIT(A) 4. . /CIT 5. ,12 3 /DR 6. 245 /GF