Sri. Manickem Murugan, Bengaluru V. Assistant Commissioner of Income Tax, Circle-6(2)(1), Bengaluru

ITA 1880/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7351 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-04-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 31-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMARAH SWAN
• Keywords: Unexplained cash credit; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.1880/BANG/2018 ASSESSMENT YEAR : 2008-09 SRI MANICKEM MURUGAN, C-435, 1 ST FLOOR, 1 ST STAGE, BEHIND POLICE STATION, PEENYA INDUSTRIAL AREA, BENGALURU-560 058. PAN ABJPM 9429 P. VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-6(2)(1), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI SMARAH SWAN, JCIT (DR) DATE OF HEARING : 22.04.2019 DATE OF PRONOUNCEMENT : 03.05.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 08-03-2018 PASSED BY LD CIT(A)-6, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.24.50 LAKHS MADE BY THE AO. 2. THIS IS SECOND ROUND OF PROCEEDING. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, THE AO ASKED THE A SSESSEE TO ITA NO.1880/BANG/2018 PAGE 2 OF 6 EXPLAIN THE SOURCES FOR MAKING CASH DEPOSITS INTO T HE BANK ACCOUNT TO THE TUNE OF RS.41.31 LAKHS. THE SOURCES TO THE TUNE OF RS.24.50 LAKHS WAS EXPLAINED BY THE ASSESSEE AS LOAN RECEIVE D FROM HIS DAUGHTER NAMED DR. KRITHIKA MURUGAN, WHO WAS WORKIN G IN UNITED KINGDOM AS MEDICAL SURGEON. THE ASSESSEE PRODUCED A CONFIRMATION LETTER OBTAINED FROM HIS DAUGHTER. TH E AO DID NOT ACCEPT THE SAME AND ACCORDINGLY MADE ADDITION U/S 6 8 OF THE ACT. WHEN THE MATTER REACHED ITAT, THE TRIBUNAL, VIDE IT S ORDER DATED 30-09-2015 PASSED IN ITA NO.577/BANG/2014, RESTORED THE ISSUE TO THE FILE OF THE AO TO EXAMINE THE CLAIM OF RECEIPT OF MONEY FROM THE DAUGHTER AFRESH. 3. ACCORDINGLY, THE PRESENT ASSESSMENT WAS PASS ED BY THE AO. BEFORE THE ASSESSING OFFICER, BOTH THE ASSESSEE AS WELL AS HIS DAUGHTER, MS.KRITHIKA MURUGAN APPEARED IN PERSON AN D CONFIRMED THE RECEIPT OF MONEY. HOWEVER, BOTH THE PERSONS ST ATED THAT THE MONEY WAS GIVEN/RECEIVED IN POUNDS IN THE RAGE OF 2 000 POUNDS TO 4,000/10000 POUNDS PER VISIT. SINCE THERE WAS NO P ROOF FOR THIS CLAIMS AND FURTHER SINCE THE ASSESSEE COULD NOT FUR NISH ANY PROOF AS TO HOW THESE FOREIGN CURRENCIES WERE DEPOSITED I NTO THE BANK, THE AO DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND ACC ORDINGLY HE ADDED THE AMOUNT AS UNEXPLAINED CASH CREDIT. THE L D CIT(A) ALSO CONFIRMED THE SAME FOR THE REASON THAT THE ASSESSEE DID NOT FURNISH ANY PROOF TO SHOW THAT THE FOREIGN CURRENCY WAS CON VERTED INTO CASH THROUGH ANY FOREIGN EXCHANGE AUTHORISED DEALER. ITA NO.1880/BANG/2018 PAGE 3 OF 6 4. WE HEARD THE PARTIES AND PERUSED THE RECORD . FIRST WE PREFER TO EXTRACT BELOW THE OBSERVATIONS MADE BY THE CO-OR DINATE BENCH IN THE FIRST ROUND OF PROCEEDINGS:- 08. WE ARE OF THE OPINION THAT THE ENQUIRY OF T HE TYPE THAT WAS WARRANTED, CONSIDERING THE CIRCUMSTANCES, WAS N OT MADE BY THE LOWER AUTHORITIES. MAY BE IT IS TRUE THAT THE DEPOSITS WERE IN CASH. THERE IS A DISTINCT POSSIBILITY THAT CASH MIGHT HAVE BEEN HANDED BY ASSESSEES DAUGHTER WHEN SHE VI SITED INDIA TO SEE HER FATHER. IN THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE MATTER REQUIRES A FRESH LOOK BY THE AO. WE REMIT THE MATTER BACK TO THE AO FOR CONSIDE RING IT AFRESH IN ACCORDANCE WITH LAW. WE NOTICE THAT THE CO-ORDINATE BENCH HAS ALREADY EX PRESSED THE VIEW THAT THERE IS A DISTINCT POSSIBILITY THAT CASH MIGHT HAVE BEEN HANDED BY ASSESSEES DAUGHTER WHEN SHE VISITED INDI A TO SEE HER FATHER. HENCE THE CO-ORDINATE BENCH HAS ACCEPTED T HE POSSIBILITY OF CASH DEALING BETWEEN THE DAUGHTER AND FATHER IN THE PECULIAR FACTS OF THE PRESENT CASE. WE FURTHER NOTICE THAT BOTH T HE ASSESSEE AS WELL AS HER DAUGHTER MS. KRITHIKA MURUGAN HAS CONFI RMED THAT THE MONEY WAS GIVEN IN CASH. WHILE THE ASSESSEE HAS ST ATED THAT HE USED TO RECEIVE MONEY TO THE TUNE OF 2000 POUNDS TO 4000 POUNDS, HIS DAUGHTER HAS STATED THAT SHE USED TO GIVE IN TH E RANGE OF 2000 POUNDS TO 10000 POUNDS. THERE IS NO DISPUTE THAT TH AT THE DAUGHTER OF THE ASSESSEE IS A MEDICAL SURGEON WORKI NG IN UNITED KINGDOM. THOUGH THE TAX AUTHORITIES ARE CORRECT IN OBSERVING THAT THE ASSESSEE SHOULD HAVE GIVEN EVIDENCES FOR CONVER SION OF FOREIGN CURRENCY INTO INDIAN CURRENCY, YET, IN THE FACTS AN D CIRCUMSTANCES ITA NO.1880/BANG/2018 PAGE 4 OF 6 OF THE CASE, WE ARE OF THE VIEW SOME CREDENCE SHOUL D BE GIVEN TO THE ADMISSION MADE BY BOTH THE ASSESSEE AND HER DAUGHTE R. ACCORDINGLY WE ARE OF THE VIEW THAT THE EXPLANATION OF THE ASSESSEE CAN BE PARTIALLY ACCEPTED, IN WHICH CASE THE AMOUNT CLAIMED TO HAVE RECEIVED BY THE ASSESSEE REQUIRES TO BE ESTIMA TED. CONSIDERING THE FACT THAT THEY MEET IN ONCE IN SIX MONTHS, THE MONEY CLAIMED TO HAVE BEEN GIVEN/RECEIVED AND TAKING INTO ACCOUNT TW O YEARS PERIOD, WE ARE OF THE VIEW THAT EXPLANATION OF THE ASSESSEE MAY BE ACCEPTED TO THE TUNE OF RS.10.00 LAKHS. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ACCEPT THE EXPLANATION TO THE TUNE OF RS.10.00 LAKHS AND SUSTA IN THE ADDITION OF BALANCE AMOUNT OF RS.14.50 LAKHS. WE ORDER ACCO RDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2019. SD/ - (PAVAN KUMAR GADALE) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 3RD MAY, 2019. / VMS / ITA NO.1880/BANG/2018 PAGE 5 OF 6 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 A SST. REGISTRAR, ITAT, BANGALORE.