ACIT, Coimbatore V. R.Doraiswami, Coimbatore

ITA 1969/CHNY/2014

• Counselvise Citation: 196921714 RSA 2014
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 08-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-07-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN JCITD R
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained investment; Assessment record
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1969 /MDS./2014 ( ! '! / ASSESSMENT YEAR :2010-11) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-II, COIMBATORE. VS. SHRI R.DORAISWAMI , 3,BALASUNDARAM LAYOUT, NEW SIDDHAPUDUR, COIMBATORE 641 044. PAN ACKPD 4997 R ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.P.RADHAKRISHNAN,JCIT,D.R '(#$ % & / RESPONDENT BY : MR.S.SRIDHAR,ADVOCATE ) * % +, / DATE OF HEARING : 08.06.2015 -' % +, /DATE OF PRONOUNCEMENT : 05.08.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, COIMBA TORE DATED 17.04.2014 IN APPEAL NO.01/13-14 PASSED UNDER SEC. 143(3) READ WITH SECTION SEC. 250 OF THE ACT. ITA NO.1969 /MDS/2014 2 2. THERE WAS A DELAY OF SIX DAYS IN FILING THE AP PEAL BY THE REVENUE. THE LD. ACIT CIRCLE-II, COIMBATORE HAD FIL ED AN AFFIDAVIT STATING THAT THE DELAY HAS OCCURRED DUE TO THE NON- AVAILABILITY OF ASSESSMENT RECORDS AND THEREFORE IT WAS PLEADED THA T THE DELAY MAY BE CONDONED. ON PERUSING THE AFFIDAVIT OF THE LD. A CIT, WE HEREBY CONDONE THE DELAY OF SIX DAYS IN FILLING THE APPEAL BY THE REVENUE. 3. THE REVENUE HAS RAISED FIVE ELABORATE GROUNDS I N ITS APPEAL; HOWEVER, THE CRUX OF THE ISSUE IS THAT:- I) THE LD. CIT (A) HAS ERRED IN DELETING THE UNEX PLAINED CASH CREDITS U/S.68 OF THE ACT AGGREGATING ` 25,53,000/- BEING THE DEPOSITS IN HIS SAVINGS BANK ACCOUNT. II) THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ADVANCE PAYMENT AS PER THE AGREEMENT DOCUMENT WAS ONLY ` 5 LAKHS AND NOT ` 30 LAKHS AS CLAIMED BY THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL, EARNING INTEREST ON DEPOSITS WITH BANK TAXABLE UNDE R THE HEAD INCOME FROM OTHER SOURCES, FILED HIS RETURN OF IN COME ON 15.10.2010 ITA NO.1969 /MDS/2014 3 ADMITTING HIS INCOME AS ` 5,40,900/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ASSESSMENT U/S .143(3) WAS COMPLETED ON 27.02.2013 WHEREIN THE LD. ASSESSING O FFICER HELD THAT THE CASH DEPOSITS MADE BY THE ASSESSEE WITH HSBC (S B A/C NO.5120421106125547) AS ON 31.03.2008 AS UNEXPLAINE D CASH CREDIT U/S.68 SIC., UNEXPLAINED INVESTMENTS U/S.69 OF THE ACT. 5. THE ASSESSEE HAD EXPLAINED BEFORE THE LD. ASSE SSING OFFICER THAT HE HAD ADVANCED CASH TO SHRI C.SUBRAMNIA GOUND ER ON VARIOUS DATES WHICH WERE WITHDRAWN FROM HIS BANK ACCOUNT AN D FROM THE CASH BALANCE AVAILABLE WITH HIM FOR PURCHASE OF LAND. SI NCE THE SALE COULD NOT MATERIALIZE THE ADVANCED MONEY WAS REFUNDED AND THE SAME WAS RE-DEPOSITED IN HIS HSBC SB ACCOUNT NO.512042110612 5547. IN ORDER TO SUBSTANTIATE HIS CLAIM THE ASSESSEE HAD AL SO PRODUCED THE SALE AGREEMENT BEFORE THE LD. ASSESSING OFFICER, HO WEVER THE LD. ASSESSING OFFICER REJECTED THE EXPLANATION OFFERED BY THE ASSESSEE BECAUSE OF THE FOLLOWING REASONS:- ITA NO.1969 /MDS/2014 4 I) ON THE FACE OF THE SALE AGREEMENT, ADVANCE PAID WAS STATED TO BE ` 5 LAKHS ONLY. II) ON THE BACK SIDE OF THE SALE AGREEMENT THE OTH ER PAYMENTS WERE MENTIONED WHICH CANNOT BE AUTHENTICALLY RELIED UPON. III) CANCELLATION OF THE SALE AGREEMENT WAS WRITTEN IN THE BACK SIDE OF THE SALE AGREEMENT WHICH CANNOT BE AUTHENTICALLY RELIED UPON. IV) THE ASSESSEE HAD NOT SUBMITTED ANY PROOF IN THE FORM OF CASH BOOK FOR HAVING RECEIVED THE CASH AND TO SUBSTANTIA TE HIS CASH IN HAND. FOR THE ABOVE SAID REASONS, THE LD. ASSESSING OFFICER ADDED THE SUM OF ` 25,53,000/- AS THE INCOME OF THE ASSESSEE AS UNEXPL AINED CASH DEPOSITED IN THE SB ACCOUNT. 6. BEFORE THE LD. CIT (A), THE ASSESSEE SUBMITTED THE DETAILS OF PAYMENT MADE TO SHRI C.SUBRAMNIA GOUNDER AND DETAIL S OF AMOUNT ITA NO.1969 /MDS/2014 5 WITHDRAWN FROM HIS BANK ACCOUNT AS OBSERVED FROM TH E ORDER OF LD.CIT(A) PARA 3 & 4, WHICH IS REPRODUCED HEREIN BE LOW FOR REFERENCE:- AS PER AFFIDAVIT (LAKHS) A 09.04.2008 5 B 11.04.2008 10 C 15.04.2008 5 D 14.06.2008 5 E 28.07.2008 5 TOTAL 30 7. THE LD. CIT (A) AFTER EXAMINING THE SUBMISSIONS OF THE LD. A.R. ALLOWED THE APPEAL OF THE ASSESSEE IN HIS FAVOUR OB SERVING AS UNDER:- 6. AS SEEN FROM THE FOLDER OF THE ASSESSING OFFI CER FOR THE ASST. YEAR 2008-09, THE CASH FLOW AND BANK STATEMENT SUBMITTED BEFORE THE ASSESSING OFFICER WERE SUBMITTED BEFORE THE ME AND THE BALANC E OF RS.25,02,522/- WAS LYING IN THE SAVINGS BANK ACCOUNT OF HSBC BANK LTD AS ON 31.03.2008. THE WITHDRAWAL FROM THE BANK (SAVINGS B ANK A/C OF HSBC) WAS RS.25 LAKHS AND FURTHER A SUM OF RS.5 LAKHS WAS MADE OUT OF THE CASH BALANCE ON 28.07.2008. THE TOTAL ADVANCE PAYMENT WA S RS.30 LAKHS WHICH IS EVIDENCED BY AN AGREEMENT FOR SALE DATED 09.04.2 008. THE CANCELLATION OF THE TRANSACTION WAS ALSO ENDORSED IN THE AGREEME NT AND THE ADVANCE MONEY WAS RECEIVED BY THE APPELLANT. A CONFIRMATION LETTER DATED 11.02.2013 FROM SHRI C. SUBRAMANIA GOUNDER CONFIRMI NG THE ADVANCE AND REFUND OF ADVANCE WAS ALSO SUBMITTED BEFORE THE ASS ESSING OFFICER. THE CONSIDERATION FOR THE TRANSACTION WAS AGREED AT RS. 60 LAKHS ACCORDING TO AS PER BANK PASS BOOK (LAKHS) A 28.12.2008 2 B 05.06.2009 7 C 15.09.2009 2 D 12.01.2010 3 E 05.02.2010 3 F 05.03.2010 3 G 23.03.2010 3 TOTAL 30 ITA NO.1969 /MDS/2014 6 PAGE 2 OF THE AGREEMENT. AN INITIAL ADVANCE OF RS.5 LAKHS WAS MADE ON 09.04.2008 AND IT WAS ONLY THE INITIAL PAYMENT. FUR THER ADVANCE WAS MADE WHICH WERE DULY ENDORSED ON THE REVERSE SIDE OF THE STAMP PAPER SIDE OF THE AGREEMENT. ON EXAMINATION OF THE DETAILS FURNIS HED BY THE APPELLANT, IT IS FOUND THAT AN AMOUNT OF RS.2,25,000/- CASH WAS D EPOSITED INTO THE SAVINGS BANK ACCOUNT OF HSBC BANK ON 22.12.2009. TH E AUTHORIZED REPRESENTATIVE EXPLAINED THAT THERE WAS A CASH WITH DRAWAL BY THE APPELLANT ON 20.11.2009 FROM HSBC BANK AMOUNTING TO RS.3,00,0 00/-. ONLY SOME AMOUNT OF CASH WAS UTILIZED AND THEN ON 22.12.2009 AN AMOUNT OF RS.2,25,000/- WAS DEPOSITED INTO THE SAVINGS BANK A CCOUNT WITH HSBC BANK. THE ASSESSING OFFICER WITHOUT BRINGING ANY AD VERSE EVIDENCE ON RECORD HAS CONCLUDED THAT WRITINGS/NOTINGS ON THE A GREEMENT REGARDING ADVANCE GIVEN AND REFUND OF MONEY WERE WRITTEN BY T HE SAME PERSON ON THE SAME DATE. THE ASSESSING OFFICER OUGHT TO HAVE VERIFIED THE FACTS THROUGH AN INDEPENDENT VERIFICATION BY EXAMINING SH RI C. SUBRAMANIA GOUNDER. THE CONFIRMATION LETTER FROM SHRI C. SUBRA MANIA GOUNDER WAS SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. WITHOUT VERIFYING THE FACTS AND MAKING ANY ENQUIRIES, THE ASSESSING OFFICER CONCLUDED THAT THE AUTHENTICITY O F PAYMENTS COULD NOT BE PROVED BY THE APPELLANT AND HE DISBELIEVED THE AGRE EMENT COPY. THE APPELLANT HAS SUBMITTED THE REQUIRED EVIDENCE BEFOR E THE ASSESSING OFFICER. THE ASSESSING OFFICER WITHOUT MAKING PROPER VERIFIC ATION CANNOT COME TO A CONCLUSION ON HIS OWN. IN VIEW OF THIS, THE ASSESSI NG OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.25,53,000/-. THE GROUNDS OF APPEAL ARE ALLOWED. 8. LD. D.R RELIED UPON THE ORDER OF THE LD. ASSESS ING OFFICER AND FURTHER ARGUED STATING THAT THE SOURCE OF THE AMOUN T DEPOSITED IN THE ITA NO.1969 /MDS/2014 7 BANK ACCOUNT OF THE ASSESSEE IS NOT ESTABLISHED AND THEREFORE, PLEADED THAT THE ORDER OF THE LD. ASSESSING OFFICER MAY BE CONFIRMED. THE LD. A.R. ON THE OTHER HAND RELIED IN THE ORDER OF THE LD. CIT (A). 9. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE ORDER OF T HE LD. CIT (A), IT APPEARS THAT THOUGH THE FACTS SUBMITTED BY THE ASSE SSEE ARE ACCEPTABLE, THE SOURCE OF BANK DEPOSIT THAT WAS INI TIALLY AVAILABLE IN THE BANK ACCOUNT OF THE ASSESSEE HAS NOT BEEN ESTAB LISHED. NO DOUBT IT IS APPARENT THAT THE ASSESSEE HAD WITHDRAW N THE MONEY FROM HIS BANK ACCOUNT AND PAID TO SHRI C.SUBRAMNIA GOUND ER FOR PURCHASE OF LAND AND SINCE THE SALES HAS NOT MATERI ALIZED THE AMOUNT WAS REFUNDED AND RE-DEPOSITED IN THE BANK, HOWEVER THE SOURCE OF THE BANK DEPOSIT AVAILABLE INITIALLY WITH THE ASSES SEE HAS NOT BEEN ESTABLISHED. UNLESS THE SOURCE OF BANK DEPOSIT INI TIALLY AVAILABLE WITH THE ASSESSEE IS FOUND TO BE GENUINE, IT CANNOT BE H ELD THAT THE ASSESSEE HAD ACCOUNTED MONEY IN HIS BANK ACCOUNT WH ICH WAS UTILIZED FOR PAYMENT OF ADVANCE FOR PURCHASE OF LAN D AND SUBSEQUENTLY RETURNED SINCE THE SALE HAS NOT MATERI ALIZED. ITA NO.1969 /MDS/2014 8 THEREFORE, IN THE INTEREST OF JUSTICE WE HEREBY REM IT THE MATTER BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR DENOVO CO NSIDERATION. 10. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED ON 5 TH AUGUST, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 5 TH AUGUST,2015. K S SUNDARAM. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF