Sudamani Dorai , Salem V. ITO Ward 1 , Vellore

ITA 1855/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6006 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 01-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Keywords: Unexplained investment; Gift
• Section: 69; 148

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC D BENCH, CHENNAI . , ! BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1855/MDS/2017 ( / ASSESSMENT YEAR: 2010-11) MRS. SUDAMANI DORAI, 737/3, DR.RADHAKRISHNAN ST, PHASE III, SATHUVACHARI, VELLORE 632 009 VS THE INCOME TAX OFFICER, WARD I, VELLORE. PAN: FUZPS3730R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : SHRI B. SAGADEVAN, JCIT /DATE OF HEARING : 17.10.2017 ! /DATE OF PRONOUNCEMENT : 23.10.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI DATED 02.05.2017 IN IT APPEAL NO.39/CIT(A)-13/AY 2010-11 FOR THE ASSESSMENT YEAR 2010-11 PASSED U/S.250(6) R.W.S.143 (3) & 147 OF THE ACT. 2. IN THIS APPEAL, NOTICE FOR HEARING WAS SENT TO T HE ASSESSEE BY REGISTERED POST WITH ACKNOWLEDGEMENT CARD INTIMATIN G THE ASSESSEE THAT THE APPEAL IS FIXED FOR HEARING ON 17.10.2017. HOWEVER ON THE SAID DATE NONE APPEARED INSTEAD THE LD.AR HAS SIMPL Y FILED AN 2 ITA NO.1855/MDS/2017 ADJOURNMENT PETITION DATED 14.10.2017 STATING THAT HE IS PRE-OCCUPIED WITH FINALIZATION OF TAX AUDIT CASES. SINCE THE IS SUE IN THE APPEAL IS SIMPLE, IT IS DECIDED TO HEAR THE CASE EX-PARTE. 3. THE ASSESSEE HAS RAISED FOUR GROUNDS IN HER APPE AL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERR ED IN SUSTAINING THE ADDITION MADE BY THE LD.AO FOR RS.7,50,000/-. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND HAS NOT FILED HER RETURN OF INCOME FOR THE RELE VANT ASSESSMENT YEAR 2010-11. AS PER THE INFORMATION GATHERED BY THE RE VENUE, IT WAS REVEALED THAT THE ASSESSEE HAD PURCHASED A PROPERTY AT KMR NAGAR, CHETTICHAVADI VILLAGE, SALEM ON 27.04.2009 VIDE DOC UMENT NO.2189/2009 FOR CONSIDERATION OF RS.6,84,900/-. T HE TOTAL INVESTMENT INCLUDING STAMP FEE, REGISTRATION FEE ETC., WORKS O UT TO RS.7,50,000/-. ON QUERY, THE ASSESSEE EXPLAINED THE SOURCE OF INVE STMENT AS THE AMOUNT GIFTED BY HER DAUGHTER MRS. MERCY ANGELA DOR AI FROM HER NRI CITY BANK SAVING BANK A/C.5124127426 VIDE CHEQUE NO .94764, 94766 & 94767 DATED 21.04.2009, 23.04.2009 & 24.04.2009 R ESPECTIVELY. ON PERUSAL OF THE BANK STATEMENT, THE FOLLOWING DETAIL S WERE REVEALED:- 3 ITA NO.1855/MDS/2017 SL.NO. CHEQUE NO. CHEQUE ISSUED IN FAVOUR OF (SHRI./SMT.) AMOUNT 01 94764 RAVI KUMAR 3,00,000.00 02 94766 SIKKANDER BATCHA 3,00,000.00 03 94767 BARATHIRAJA 1,50,000.00 FROM THESE FACTS, THE LD.AO OPINED THAT S INCE THE ASSESSEES DAUGHTER HAD ISSUED CHEQUE TO THIRD PARTIES, THE SA ME CANNOT BE TREATED AS GIFTED TO THE ASSESSEE. THEREFORE, THE CASE WAS REOPENED U/S.147 & 148 OF THE ACT. DURING THE ASSESSMENT PR OCEEDINGS, IT WAS EXPLAINED THAT THE AFORE STATED PERSONS MR. RAVIKUM AR, MR. SIKKANDAR BATCHA & MR. BARATHIRAJA WERE MEDIATORS AND THE PA YMENT WERE MADE THROUGH THEM FOR PURCHASE OF THE PROPERTY. HOWEVER , THE ASSESSEE COULD NOT PRODUCE THE DETAILS OF THESE MEDIATORS. IT WAS FURTHER OBSERVED BY THE LD.AO THAT ALL ABOVE MENTIONED PERS ONS HAD WITHDRAWN CASH FROM THE ASSESSEES DAUGHTERS BANK ACCOUNT BECAUSE THE ALL THE CHEQUE WERE BEARER CHEQUE. MOREOVER, T HE SELLER OF THE PROPERTY DID NOT ACKNOWLEDGE THAT THESE PERSONS WER E THE MEDIATORS AND FURTHER CONFIRMED THAT CASH WAS NOT RECEIVED FR OM THOSE MEDIATORS OR FROM THE ASSESSEE. SINCE THE ASSESSEE COULD NOT FURNISH ANY OTHER INFORMATION THE LD.AO TREATED THE AMOUNT OF RS.7,50 ,000/- AS THE UNEXPLAINED INVESTMENT AND ASSESSED ACCORDINGLY IN THE HANDS OF THE ASSESSEE. 4 ITA NO.1855/MDS/2017 5. ON APPEAL THE LD.CIT(A) CONFIRMED THE ORDER OF T HE LD.AO BY OBSERVING AS UNDER:- THE APPELLANT'S ABOVE WRITTEN SUBMISSION CAREFULLY CONSIDERED, THE APPELLANT CONTENTION THAT THE SOURCE FOR THE IN VESTMENT WAS MADE OUT OF THE FUNDS GIFTED BY HER DAUGHTERS COULD NOT BE PROVED BECAUSE THE CHEQUES WERE ISSUED IN THE NAME OF VARI OUS PERSON AND NOT IN THE NAME OF HER MOTHER. WHEN THE ASSESSE E'S CONTENTION WAS FILED BY THE AO DURING THE ASSESSMENT PROCEEDIN GS THE ASSESSEE HAS CONTENDED BEFORE THE AO THAT THEIR DAU GHTER WAS WORKING AS ENGINEER AT DUBAI AND THE FUNDS FOR THE PURCHASE OF THE PROPERTY WERE WITHDRAWN FROM HER NRI CITI BANK ACCOUNT. SINCE SALE INSISTED FOR CASH PAYMENTS ONLY AND REQU ESTED FOR PAYMENTS THROUGH MEDIATORS THEREFORE THE CHEQUES WE RE ISSUED IN THE NAME OF THE MEDIATORS AND NOT IN THE NAME OF TH E MOTHER. THE AO INITIALLY ENTRUSTED THE RESPONSIBILITY TO PROVE THE GENUINENESS ON ASSESSEE, HOWEVER ASSESSEE TO PROVE GENUINENESS COULD NOT PRODUCE BEFORE THE AO THE MEDIATORS. THEREFORE THE AO ISSUED COMMISSIONS TO THE AO OF THE MEDIATORS. THE ITO I.E . THE AO OF THE MEDIATOR HAS SUBMITTED THE REPORTS IN THE MATTER AN D THE MEDIATORS HAVING DENIED ANY SUCH MONEY. THE APPELLANT BEFORE THE APPEAL AUTHORITY EXCEPT REPEATING THE CONTENTION WHICH WAS MADE BEFORE THE AO COULD NOT PROVE THE GENUINENESS WITH SUPPORT ING EVIDENCE WHICH MAKES IT ABUNDANTLY CLEAR THAT THE APPELLANT IS NOT ABLE TO EXPLAIN THE SOURCE FOR PURCHASE OF THE SAID PROPERT Y. HENCE THE INVESTMENT MADE BY THE APPELLANT HAS BEEN RIGHTLY A DDED BY THE AO AS UNEXPLAINED INVESTMENT U/ S 69 OF THE INCOME TAX ACT 1961. 5 ITA NO.1855/MDS/2017 THE ADDITION MADE BY THE AO IS THEREFORE CONFIRMED AND THE GROUND OF APPEAL ON THIS ISSUE IS ACCORDINGLY DISMI SSED. 6. THE LD.DR ARGUED IN SUPPORT OF THE ORDERS OF THE LD.REVENUE AUTHORITIES BEFORE US. AFTER HEARING THE CASE AND E XAMINING THE ISSUE IN DETAIL, I DO NOT FIND MUCH STRENGTH IN THE ORDER OF THE LD.REVENUE AUTHORITIES. THE ASSESSEE HAS EXPLAINED THE SOURCE OF HER INVESTMENT BEING THE AMOUNT RECEIVED AS GIFT FROM HER DAUGHTER . FROM THE FACTS OF THE CASE, IT APPEARS THAT THE ASSESSEES DAUGHTER H AS PAID RS.7,50,000/- TO MR. RAVIKUMAR, SIKKANDAR BATCHA AN D BARATHIRAJA, WHO HAVE WITHDRAWN THE MONEY FROM THE ASSESSEES DA UGHTER BANK ACCOUNT BY BEARER CHEQUE. THE AMOUNT OF CASH TRANS ACTION MATCHES WITH THE STATEMENT GIVEN BY THE ASSESSEE. THEREFOR E IT CAN BE INFERRED THAT MR. RAVIKUMAR, SIKKANDAR BATCHA AND BARATHIRAJ A MUST HAVE PAID THE MONEY TO THE SELLER OF THE PROPERTY THROUGH SOM E OTHER PERSON AND THE SELLER AFTER RECEIVING THE AMOUNT HAVE EXECUTED THE SALE DEED IN FAVOUR OF THE ASSESSEE. IT IS ALSO AN UNDISPUTED FA CT THAT THE SELLER HAS RECEIVED THE SALE CONSIDERATION AND ONLY THEN EXECU TED THE SALE DEED IN FAVOUR OF THE ASSESSEE. MOREOVER THE REVENUE HA S NOT COME OUT WITH ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS ANY OTHER SOURCE OF INCOME OR IS ENGAGED IN ANY BUSINESS OR PROFESSION FROM WHICH SHE COULD HAVE EARNED INCOME. CONSIDERING THESE FACTS AND CIRCUMSTANCE 6 ITA NO.1855/MDS/2017 OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE S OURCE OF INVESTMENT OF RS.7,50,000/- IS EXPLAINED BY THE ASSESSEE AND I S GENUINE BEING THE GIFT RECEIVED FROM HER DAUGHTER WHO IS LIVING ABROA D. THEREFORE I HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF R S.7,50,000/- MADE IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED INVESTMENT . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 23 RD OCTOBER, 2017 AT CHENNAI. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# /CHENNAI, $% /DATED 23 RD OCTOBER, 2017 RSR % '( )( /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. (-. / /DR 6. .0 /GF