Mrs K N Aparna, Bangalore V. The Commissioner Of Income Tax, Circle- 1(2), Bangalore

ITA 1673/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0646 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 22-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Set aside
• Section: 68; 132; 143(3); 153A; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, C BENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER ITA NO.1673/BANG/2019 ASSESSMENT YEAR : 2015-16 MRS. KN APARNA, SHIVASHANKAR NIVAS, 1390/34, SOUTH END A MAIN ROAD, JAYANAGAR, BENGALURU-560 069. PAN ABCPA 3502 E VS. THE ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(2), BENGALURU. APPELLANT RESPONDENT REVENUE BY : SHRI G.S PRASHANTH, C.A ASSESSEE BY : SHRI GANESH R GHALE, ADVOCATE STANDING COUNSEL FOR THE DEPT. DATE OF HEARING : 27.11.2019 DATE OF PRONOUNCEMENT : 19.12.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 23-05-2019 PASSED BY LD CIT(A)-11, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2015-16. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.30.00 LAKHS MADE BY THE AO U/S 68 OF THE ACT. 2. THE FACTS RELATING TO THE ABOVE SAID ISSUE AR E STATED IN BRIEF. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIO NS IN THE HANDS ITA NO.1673 /BANG/2019 PAGE 2 OF 7 OF M/S RAJATHA JEWELS U/S 132 OF THE ACT ON 28-01-2 016. CONSEQUENT THERETO, THE PRESENT ASSESSMENT OF THE A SSESSEE HEREIN WAS COMPLETED BY THE AO U/S 153C R.W.S. 153A R.W.S 143(3) OF THE ACT. THE AO NOTICED THAT THE ASSESSEE HAS DEPOSITE D CASH AGGREGATING TO RS.30.00 LAKHS IN HER BANK ACCOUNT M AINTAINED WITH KOTAK MAHINDRA BANK. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCES FOR THE DEPOSITS SO MADE. THE ASSESSEE SUB MITTED THAT SHE HAD RECEIVED RS.12.00 LAKHS FROM HER BROTHER SHRI A BHILASH AND RS.4.00 LAKHS FROM HER MOTHER SMT. SUBHASHINI. BOT H THE AMOUNTS WERE USED TO MAKE CASH DEPOSITS INTO THE BA NK ACCOUNT. THE REMAINING AMOUNT OF RS.14.00 LAKHS WAS EXPLAINE D AS HER EARLIER WITHDRAWALS MADE FROM BANKS. THE ASSESSEE FURNISHED CONFIRMATION LETTER OBTAINED FROM SHRI ABHILASH, ST ATEMENT OF HIS TOTAL INCOME AND INCOME TAX RETURN COPIES OF SMT. S UBHASHINI TO SUBSTANTIATE HER CLAIM. THE AO, HOWEVER, HELD THAT THE ASSESSEE HAS NOT SUBSTANTIATED HER EXPLANATIONS WITH CORROBO RATIVE EVIDENCES. WITH REGARD TO THE CLAIM OF DEPOSIT OF MONEY OUT OF PAST WITHDRAWALS, THE AO OBSERVED THAT THE ASSESSEE HAS NOT CLARIFIED THE SAME WITH DETAILS OF EARLIER WITHDRAWALS. ACCO RDINGLY, THE AO ADDED THE ABOVE SAID AMOUNT OF RS.30.00 LAKHS AS UN EXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS F URNISHED CONFIRMATION LETTERS ALONG WITH CERTAIN DOCUMENTS T O PROVE THE CLAIM OF RECEIPT OF CASH FROM SHRI ABHILASH AND SMT . SUBHASHINI. HE INVITED MY ATTENTION TO THE PAPER BOOK AND SUBMI TTED THAT THE SHRI ABHILASH HAS CONFIRMED THAT HE HAS GIVEN THE A MOUNT OF ITA NO.1673 /BANG/2019 PAGE 3 OF 7 RS.12.00 LAKHS TO THE ASSESSEE, BEING HIS SISTER. HE SUBMITTED THAT SHRI ABHILASH IS DECLARING TOTAL INCOME OF RS.26.12 LAKHS AND IS ALSO A DIRECTOR IN THE COMPANY NAMED M/S DYNARX TEC HNOLOGIES INDIA LIMITED. HE SUBMITTED THAT SHRI ABHILASH HAS WITHDRAWN MONEY FROM THE ABOVE SAID COMPANY, WHICH HAS ALSO B EEN CONFIRMED BY THE ABOVE SAID COMPANY. ACCORDINGLY H E SUBMITTED THAT THE CREDIT WORTHINESS AND IDENTITY OF SHRI ABH ILASH WAS PROVED. HE SUBMITTED THAT THE ABOVE SAID AMOUNT WAS PAID BY HIM TO THE ASSESSEE IN CASH, SINCE SHE WAS HIS SISTER. HE SUB MITTED THAT THERE IS NO REASON TO DOUBT THE GENUINENESS OF EXPLANATIO NS FURNISHED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT SMT. SUBHA SHINI IS ALSO ASSESSED TO TAX AND SHE HAS DECLARED A TOTAL INCOME OF RS.28.25 LAKHS IN AY 2014-15. ACCORDINGLY HE SUBMITTED THAT THERE IS NO REASON TO REJECT THE CLAIM OF RECEIPT OF MONEY FROM SMT. SUBHASHINI, MOTHER OF THE ASSESSEE. WITH REGARD TO THE CLAIM OF DEPOSIT OF MONEY OUT OF PAST CASH WITHDRAWALS, THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PREPARED A CASH FLO W STATEMENT TO SUBSTANTIATE THE SAID CLAIM. THE LD A.R ALSO CONTE NDED THAT THE BANK PASS BOOK CANNOT BE TREATED AS BOOKS WITHIN THE MEANING OF SEC.68 OF THE ACT AND HENCE THE AO COULD NOT HAVE M ADE THE IMPUGNED ADDITION. IN THIS REGARD, HE PLACED HIS R ELIANCE ON THE DECISION RENDERED BY BANGALORE SMC BENCH IN THE CAS E OF SMT. MANJUSHREE VS. ITO (ITA NO.374/BANG/2017 DATED 28.0 4.2017). 4. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT T HE ASSESSEE HAS FAILED TO DISCHARGE THE PRIMARY ONUS PLACED UPON HE R U/S 68 OF THE ACT. HE SUBMITTED THAT THE ASSESSEE HAS FURNISHED ONLY CONFIRMATION LETTER OBTAINED FROM HER BROTHER, STAT EMENT OF ITA NO.1673 /BANG/2019 PAGE 4 OF 7 INCOME/INCOME TAX RETURN OF BROTHER & MOTHER. HE S UBMITTED THAT THE ASSESSEE HAS NOT FURNISHED CONFIRMATION LETTER OBTAINED FROM HER MOTHER BEFORE THE AO. HE FURTHER SUBMITTED THA T THERE IS NO PROOF FOR RECEIPT AS WELL AS FOR REPAYMENT OF MONEY FROM BOTH THE PERSONS. ACCORDINGLY HE SUBMITTED THAT THE ADDITIO N SHOULD BE SUSTAINED. 5. I HEARD RIVAL CONTENTIONS AND PERUSED THE R ECORD. IT IS WELL SETTLED PROPOSITION THAT THE INITIAL BURDEN TO PROV E THE CASH CREDITS HAS BEEN PLACED UNDER THE SHOULDERS OF THE ASSESSEE U/S 68 OF THE ACT. THE ASSESSEE HAS TO PROVE THREE MAIN INGREDIE NTS VIZ., THE IDENTITY OF THE CREDITOR, CREDIT WORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIONS. IN THE INSTANT CA SE, IT IS THE CLAIM OF THE ASSESSEE THAT SHE HAS RECEIVED RS.12.00 LAKH S AND RS.4.00 LAKHS RESPECTIVELY FROM HER BROTHER AND MOTHER. TH E COPIES OF STATEMENT OF TOTAL INCOME/INCOME TAX RETURNS WERE F URNISHED TO SHOW THAT BOTH THE ABOVE SAID PERSONS ARE HAVING CR EDIT WORTHINESS FOR MAKE THE ABOVE SAID PAYMENTS. I HAVE NOTICED E ARLIER, BOTH ARE ASSESSED TO INCOME TAX AND ARE DECLARING TOTAL INCO ME EXCEEDING RS.25.00 LAKHS. SINCE BOTH THE PERSONS ARE BLOOD R ELATIONS, THE TRANSACTIONS HAVE BEEN ENTERED THROUGH CASH. BESID ES THE ABOVE, SHRI ABHILASH IS A DIRECTOR OF A COMPANY AND THE SA ID COMPANY HAS ALSO CONFIRMED THE TRANSACTIONS ENTERED BETWEEN IT AND SHRI ABHILASH. THOUGH THE ASSESSEE FURNISHED COPIES OF INCOME TAX RETURNS OF SMT. SUBHASHINI (MOTHER) BEFORE THE AO, A SPECIFIC CONFIRMATION LETTER WAS NOT FILED. NEVERTHELESS, T HE DOCUMENTS REFERRED ABOVE WOULD SHOW THAT THE IDENTITY OF THE CREDITORS WAS NOT DOUBTED AND THE CREDIT WORTHINESS OF BOTH THE CREDI TORS, IN MY VIEW, ITA NO.1673 /BANG/2019 PAGE 5 OF 7 HAS BEEN PROVED. SINCE THE TRANSACTIONS WERE BETWE EN BLOOD RELATIVES, IN THE FACTS OF THIS CASE, THE GENUINENE SS CANNOT BE DOUBTED. HENCE I AM OF THE VIEW THAT THE ADDITION OF RS.12.00 LAKHS AND RS.4.00 LAKHS REFERRED ABOVE WAS NOT JUST IFIED. ACCORDINGLY I SET ASIDE THE ORDER PASSED BY LD CIT( A) ON THESE TWO ADDITIONS AND DIRECT THE AO TO DELETE BOTH THE ADDI TIONS. 6. WITH REGARD TO THE REMAINING DEPOSIT OF RS.14 .00 LAKHS, THE ASSESSEE HAS SUBMITTED THAT SHE HAS USED HER PAST W ITHDRAWALS FOR MAKING THE ABOVE DEPOSITS. THE LD A.R SUBMITTED TH AT THE ASSESSEE IS ALSO HAVING GOOD INCOME AND HER PAST SAVINGS WER E ALSO USED TO MAKE THE ABOVE SAID DEPOSITS. HE SUBMITTED THAT TH E ASSESSEE HAS PREPARED A CASH FLOW STATEMENT TO SUBSTANTIATE HER CONTENTIONS. I NOTICE THAT THE ASSESSING OFFICER HAS REJECTED THE ABOVE SAID EXPLANATIONS OF THE ASSESSEE WITHOUT EXAMINING THE CASH FLOW STATEMENT OF THE ASSESSEE. THERE IS NO BAR FOR DEP OSITING CASH WITHDRAWALS AGAIN INTO THE BANK ACCOUNT. WHEN THE ASSESSEE HAS NOT SPENT THE CASH WITHDRAWALS, IT IS QUITE NATURAL TO DEPOSIT THE SAID AMOUNT INTO THE BANK ACCOUNT. IN ORDER TO REJ ECT THE ABOVE SAID CLAIM OF THE ASSESSEE, IT IS NECESSARY TO SHOW THAT THE ASSESSEE HAS SPENT THE AMOUNT SO WITHDRAWN. ACCORDINGLY I A M OF THE VIEW THAT THE ADDITION OF RS.14.00 LAKHS REQUIRE FRESH E XAMINATION AT THE END OF THE AO. ACCORDINGLY I SET ASIDE THE ORDER P ASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF T HE AO FOR EXAMINING THE CLAIM OF THE ASSESSEE WITH THE STATEM ENT OF CASH WITHDRAWAL IN THE LIGHT OF DISCUSSIONS MADE SUPRA. ITA NO.1673 /BANG/2019 PAGE 6 OF 7 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2019. SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 19 TH DECEMBER, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.1673 /BANG/2019 PAGE 7 OF 7 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED