V Meenakshi, Chennai V. ITO, Non Corporate Ward -7(4), Chennai

ITA 2152/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5739 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN ACIT D R
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Unexplained investment
• Section: 11A

Judgement Text

, A/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2152 /MDS./2017 ( ASSESSMENT YEAR : 2012-13 ) MRS.V.MEENAKSHI , B-3,AE-116,GOLDENEDELWEISS, SHANTHI COLONY, ANNA NAGAR, CHENNAI-40. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD 7(4), CHENNAI. PAN ANNPM 1848 C ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.A.S.SRIRAMAN,ADVOCATE / RESPONDENT BY : MR.N.MADHAVAN,, ACIT, D.R ! ' / DATE OF HEARING : 16.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 05.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-7, CHENNA I DATED 21.06.2017 PERTAINING TO ASSESSMENT YEAR 2012-13. ITA NO. 2152/MDS/2017 2 2. THERE WAS A DELAY OF 03 DAYS IN FILING THIS APP EAL. CONSEQUENT TO THIS, THE LD. AUTHORISED REPRESENTATIVE OF ASSES SEE FILED A CONDONATION PETITION DATED 14.11.2017 FOR CONDOANTI ON OF DELAY. I HAVE GONE THROUGH THE CONDONATION PETITION STATING THAT THE DELAY WAS OCCURRED ON THE REASON THAT THE APPEAL PAPER WAS PR EPARED AND SENT FOR COUNSEL ON 21.08.2017 AND THEREAFTER, THE APPE AL PAPERS RECEIVED WAS MISPLACED IN LD.A.RS OFFICE. HENCE, THE LD.A.R WAS NOT ABLE TO PREPARE THE PAPER FOR FILING THE APPEAL IN TIME. AFTER TRACING THE APPEAL PAPERS, HE FILED THE APPEAL IN T HE REGISTRY IMMEDIATELY ON 04.09.2017 DUE TO INTERVENING SATURD AY ON 2/3/17 AND SUNDAY ON 3/3/17. THEREFORE, LAR PRAYED THAT D ELAY OF 03 DAYS IS CONDONED. IN MY OPINION, THE REASONS SHOWN ARE JUS TIFIED AND HENCE, DELAY IN FILING THE APPEAL BELATEDLY FOR 03 DAYS BE FORE THE TRIBUNAL IS CONDONED AND APPEAL IS ADMITTED FOR ADJUDICATION. 3. THE MAIN GRIEVANCE OF ASSESSEE IN HER APPEAL IS WITH REGARD TO CHALLENGING THE ADDITION OF ` 16,47,357/- TOWARDS UNEXPLAINED INVESTMENTS U/S.69 OF THE ACT. ITA NO. 2152/MDS/2017 3 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE AND HER SPOUSE, SHRI P.H.SUBRAMONI ARE THE DIRECTORS IN M/S.VAL-MET ENGINEERING (P) LTD. THE ASSESSEE DURING THE PERIOD UNDER CONSIDER ATION HAD PURCHASED LAND AND BUILDING AT NO.AE-278, PLOT NO.2 264, 4 TH AVENUE, ANNA NAGAR, CHENNAI-40 ALONG WITHER HUSBAND FOR A C ONSIDERATION OF ` 1,45,00,000/-. THE TOTAL EXPENDITURE CLAIMED INCLUD ING REGISTRATION CHARGES IS ` 1,57,55,120/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AFTER RECONCILING THE INVESTMENTS MADE BY THE ASSESSEE AND SOURCE EXPLAINED THEREON, THE AO NOTICED THAT T HERE WAS NO EVIDENCE/CONFIRMATION IN SUPPORT OF THE INVESTMENTS MADE TO THE EXTENT OF ` 16,47,357/- AND HENCE, THE AO TREATED SAME AS UNEXPLAINED INVESTMENTS AND ADDED TO THE TOTAL INCO ME OF ASSESSEE U/S.69 OF THE ACT. AGGRIEVED BY THE ORDER OF LD. AS SESSING OFFICER, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) SUSTAINED THE ADDITION TOWARDS UNEXPLAINE D INVESTMENT U/S.69 OF THE ACT. AGAINST THE ORDER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 2152/MDS/2017 4 5. BEFORE US, LD.A.R SUBMITTED THAT THE ASSESSEE R ECEIVED THAT AMOUNT FROM ASSESSEES MOTHER, MRS.GOWRI VENKATESAN AND FROM ASSESSEES SISTER, MRS.HARINI AND THE ASSESSEE FURN ISHED THE DETAILS OF RETURNS OF INCOME FILED BY THE SAID RELATIVES. EVEN, THEY CONFIRMED THAT THEY HAD GIVEN THE ABOVE MONEY TO THE ASSESSEE , EVEN THAT WAS NOT ACCEPTED BY THE DEPARTMENT. 6. ON THE OTHER HAND, LD.D.R SUBMITTED THAT WHEN T HE LETTERS ISSUED TO THEM WERE RETURNED AND THE RETURN FILED B Y THE ASSESSEE DOES NOT THE CAPACITY OF THEM TO LEND MONEY TO THE ASSESSEE. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE, DURING THE APPEL LATE PROCEEDINGS, THE LD.CIT(A) CALLED FOR THE REMAND REPORT. IN THE REMAND REPORT, THE AO MENTIONED AS FOLLOWS:- NOW THE ASSESSEE HAS FILED EVIDENCE BY WAY OF CONF IRMATION LETTERS FROM SMT.GOWRI VENKATESAN AND SMT. V.HARINI TOTALIN G RS.20,00,000/-. THE EVIDENCES FILED BY THE ASSESSEE BEFORE THE CIT( A) BY WAY OF CONFIRMATION LETTER HAS BEEN PURSUED. THE ASSESSEE WAS ALSO GIVEN OPPORTUNITY TO PROVE THE SAME. ACCORDINGLY THE ASSE SSEE REPRESENTATIVE APPEARED AND FILED A REPLY ON 23.02. 2017. AFTER ITA NO. 2152/MDS/2017 5 EXAMINING THE, EVIDENCES FURNISHED AND AFTER GOING THROUGH THE SUBMISSIONS MADE BY THE ASSESSEE, THE FOLLOWING ISS UES ARE BROUGHT OUT. THE CONFIRMATION LETTERS SUBMITTED BY THE ASSESSEE ARE NOT ADMISSIBLE AS EVIDENCE AS THE MODE AND DATE OF PAYMENT ARE NOT MENTIONED THEREIN. IN THE ABSENCE OF THE MODE AND DATE PAYMEN T, IT IS NOT WORTH TO RELY ON THE CONFIRMATION LETTER. DURING THE COUR SE OF THE ASSESSMENT PROCEEDINGS, ALL THE CREDITS AND WITHDRAWALS WERE D ULY CONSIDERED AND THE ASSESSMENT WAS FINALLY MADE. THE ASSESSEE HAS FURNISHED THE DETAILS OF THE INCOM E-TAX RETURN FILED BY RESPECTIVE LOAN CREDITORS. MERE FILING OF COPY O F I.T RETURN, CANNOT BE ACCEPTED AS EVIDENCES FOR HAVING EXTENDED LOAN TO T HE ASSESSEE. IT SHOULD FURTHER BE STRENGTHENED BY FILING RELEVANT B ANK STATEMENTS. IN THE ABSENCE OF BALANCE SHEET AND STATEMENT INCLUDIN G WITHDRAWALS, IT IS NOT WORTH TO RELY ON THE CONFIRMATION LETTER FILED. BESIDES, AS PER THE LETTER DATED 21.02.2017 FILED B Y THE ASSESSEE, IT HAS BEEN CLAIMED THAT THE AMOUNT WAS RECEIVED IN CA SH. THE ASSESSEE HAS FAILED TO PROVE THAT THE PERSONS WHO HAVE ADVAN CED LOAN, HAVE SUFFICIENT CASH BALANCES AND SOURCES FOR EXTENDING SUCH LOANS. IN THIS BACKGROUND, IT IS SUBMITTED THAT THE EVIDEN CES SUBMITTED ARE INSUFFICIENT AND THE COMMISSIONER OF INCOME-TAX(APP EALS), MAY KINDLY DECIDE BASED ON THE MERITS OF THE CASE. ITA NO. 2152/MDS/2017 6 7. 1 THERE WAS ONCE AGAIN VERIFICATION OF LOAN CRED ITORS AND GENUINENESS BY THE AO VIDE LETTER DATED 08.03.2017 STATING AS FOLLOWS:- AS PER YOUR LETTER TO EXAMINE THE IDENTITY, GENUIN ENESS AND CREDIT WORTHINESS OF LOAN CREDITORS OF THE ASSESSEE SUMMONS WERE ISSUED TO THE FOLLOWING LOAN CREDITORS ON 17.03.2017. 1. SUIT. GOWN VENKATESAN NO.117, VINAYAGA NAGAR, TRIVANDRUM-695 002. 2. SMT. HARINI V D-22, ROSARIYA APARTMENTS, THORAI PAKKAM CHENNAI-600 097. THE ABOVE TWO SUMMONS WERE RETURNED UN-SERVED BY TH E POSTAL AUTHORITY AND MENTIONED AS LEFT. SMT. GOWN VENKATESAN ONE OF THE LOAN CREDITOR APPEA RED ALONG WITH SHRI R. GANESH, CA ON 12.04.2017 AND FILED A LETTER DATED 1 2.04.2017, IN THAT LETTER SHE HAS STATED THAT HER PERMANENT ADDRESS IS FLAT NO.3 2, BLOCK 5, MANASAROVAR, RAJA APARTMENT, 11A ARCOT ROAD, PORUR, CHENNAI-600 116, FOR THE PROOF OF HER IDENTITY, SHE HAS FURNISHED COPY OF THE IDENTITY CA RD ISSUED BY ELECTION COMMISSION OF INDIA AND COPY OF THE ADHAR CARD ISSU ED TO HER. FOR THE GENUINENESS AND CREDIT WORTHINESS OF THE LO AN ADVANCED TO THE ASSESSEE SMT. V. MEENAKSHI, IT HAS BEEN STATED THAT SMT. GOW N VENKATESAN WAS AN EMPLOYEE OF A COMPANY NAMELY M/S. HAMON SHRIRAM COT TREL (P) LIMITED IN SUPPORT OF THE ABOVE. COPY OF TDS CERTIFICATE IN FO RM NO.16 HAS BEEN FURNISHED. AS PER TDS CERTIFICATE THE TOTAL INCOME OF SMT. GOW N VENKATESAN WAS ITA NO. 2152/MDS/2017 7 RS.1,87,630/- ONLY. FURTHER, IT IS INFORMED THAT SH E HAS GOT SOME MONEY FROM HER FATHER-IN-LAWS PROPERTY. DURING THE DISCUSSION, SHE INFORMED THAT FROM THE S ALARY SAVING AND MONEY RECEIVED BY WAY OF HER FATHER IN LAW PROPERTY. SHE HAD GIVEN HAND LOAN TO HER DAUGHTER SMT. MEENAKSHI I.E. ASSESSEE. SHE HAS CONF IRMED THAT SHE HAS GIVEN HAND LOAN OF RS.10 LAKHS BY CASH ONLY. SHE WAS REQU ESTED TO FURNISH THE BANK STATEMENT FOR THE PERIOD OF LOAN FOR WHICH SHE INFO RMED AS BELOW: I COULD NOT IMMEDIATELY TRACE THE BANK STATEMENT R ELEVANT TO THE PERIOD OF LOAN. HENCE I AM NOT SUBMITTED THEM. FURTHER SMT. GOWN VENKATESAN HAS EXPLAINED THAT SHE IS HAVING TWO DAUGHTERS NAMELY SMT. MEENAKSHI ASSESSEE) AND SMT. V. HARINI ONE OF THE LOAN CREDITOR. SMT. GOWN VENKATESAN HAS GIVEN 10 LAKHS LOAN TO THE ASSESSEE AND SMT. V. HARINI ALSO HAS GIVEN RS.10 LAKHS LOAN TO THE ASSES SEE. SMT. GOWN VENKATESAN INFORMED THAT, AT PRESENT SMT. V. HARINI IS SETTLED IN AUSTRALIA SINCE SMT. V. HANINI HAS NOT APPEARED DETAILS FROM HER COULD NOT BE VERIFIED. 7.2 IN RESPONSE, THE ASSESSEE REPLIED VIDE LETTER DATED 27.05.2017 AS FOLLOWS: PLEASE REFER TO THE REMAND REPORT COPY OF WHICH HA S BEEN SHARED TO OFFER THE COMMENTS THEREON. REGARDING THE RETURN OF THE SUMMONS ORIGINALLY SERV ED WITH THE ENDORSEMENT AS LEFT, MRS. GOWN VENKATESAN (MOTHER OF THE APPELLA NT) HAS ALREADY CLARIFIED THAT SHE WAS SHORTLY IN TRIVANDRUM WHEN SHE GAVE THE CON FIRMATION LETTER AND HAS CLARIFIED ABOUT HER PERMANENT RESIDENTIAL ADDRESS W HICH IS AS PER IT RECORDS. THE ITA NO. 2152/MDS/2017 8 SAME IS ALSO VERIFIABLE FROM THE IT RETURN COPIES F ILED WITH THE LEARNED CIT(A) DURING THE COURSE OF HEARING. REGARDING THE OTHER CREDITOR, MRS. HARINI (SISTER O F THE APPELLANT), MRS. GOWN VENKATESAN HAS CLARIFIED THAT SHE IS SETTLED IN AUS TRALIA AND HENCE THE SUMMON WAS RETURNED WITH THE ENDORSEMENT AS LEFT. REGARDING SOURCE, THE LEARNED AO HAS TAKEN JUST ONE YEARS INCOME. SHE WAS MORE THAN 50 YEARS AS ON 2012 AND HAS BEEN EMPLOYED FOR QUITE SOME TIME. HER HUSBAND WAS ALSO EARNING INCOME AND SHE HAD THE NEC ESSARY SOURCE TO GIVE THE LOAN. REGARDING GIVING OF LOAN BY WAY OF CASH, THE APPELL ANT HAS ALREADY CLARIFIED VIDE LETTER DATED 21 FEBRUARY, 2017 (COPY ATTACHED HEREW ITH AS ANNEXURE) RELEVANT PORTION OF WHICH IS EXTRACTED HEREIN BELOW: THE SAME WAS GIVEN BY THEM TO ME WITH A VERY CLEAR UNDERSTANDING THAT THE LOAN WILL HAVE TO BE RETURNED AT THE SHORTEST POSSIBLE T IME AS THE FUNDS WERE SPECIFICALLY EARMARKED BY THEM FOR THE PURPOSE OF M Y SISTERS MARRIAGE. ACTUALLY, MY HUSBAND WAS ABOUT TO GET LOAN, FROM HI S SISTER (MY HUSBAND IS ALSO THE CO-OWNER OF THE PROPERTY PURCHASED). BUT SINCE IT WAS NOT IMMEDIATELY FORTHCOMING, I HAVE TO URGENTLY BORROW FROM MY MOTH ER AND SISTER AS WE DID NOT WANT THE IDEA OF PURCHASE OF PROPERTY SLIP OUT OF O UR HANDS. AS THE AMOUNT WAS IMMEDIATELY REQUIRED, MYSELF AND MY HUSBAND DID NOT HAVE ANY OTHER OPTION EXCEPT TO RECEIVE IN CASH. SO, THE LOAN AMOUNT WAS RECEIVED IN CASH AND PAID AS ADVANCE FOR THE PURCHASE OF PROPER TY. AS AGREED UPON, ONCE ITA NO. 2152/MDS/2017 9 MY HUSBANDS SISTER GAVE RS.20.00 LAKHS LOAN BY WAY OF CHEQUE IN MARCH 2012, THE SAME WAS WITHDRAWN AND IMMEDIATELY RETURNED TO MY MOTHER AND SISTER. THE ABOVE FACTS WILL AMPLY PROVE THE CIRCUMSTANCES UNDER WHICH LOAN WAS RECEIVED IN CASH. FURTHER, AS THE TRANSACTION IS BE TWEEN CLOSE FAMILY MEMBER, IT IS QUITE NATURAL THAT SOME TIMES, TRANSACTIONS TAKE PLACE BY CASH MODE. THE CREDITOR HAVING CONFIRMED THE LOAN TRANSACTION AND IDENTITY HAVING PROVED AND SOURCE BEING SATISFIED, IT IS REQUESTED THAT TH E LOAN TRANSACTION BE ACCEPTED AND ADDITION HE DELETED AND JUSTICE RENDERED. 7.3 HOWEVER, THE LD.CIT(A) DECLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE STATING THAT THESE PARTIES ARE HAVING VERY MEAGER AMOUNT IN THEIR RETURNS. IN MY OPINION, THE DECISION TAKEN BY THE LOWER AUTHORITIES IS NOT APPROPRIATE TO SUSTAIN THE ADDIT ION AT THIS STAGE. THE DEPARTMENT HAS NOT DOUBTED THE IDENTITY OF THE PART IES, AND ONLY THE A.O DOUBTED THE CAPACITY OF THE PARTIES TO LEND THE MONEY TO THE ASSESSEE. I AM OF THE CONSIDERED VIEW THAT IF THESE ADVANCES ARE DULY REFLECTED IN THEIR RETURN OF INCOME AND CONFIRMED B Y THEM, THEN THE DEPARTMENT CANNOT DOUBT THE SAME. FURTHER, THE DUE CREDIT IS TO BE GIVEN TO THE CONFIRMATION LETTERS FILED BY THE ASSE SSEE AND INCOME TAX RETURNS FILED BY THE THEM. THEREFORE, I DIRECT THE ASSESSEE TO FURNISH ITA NO. 2152/MDS/2017 10 ALL THE REQUISITE DETAILS TO PROVE THE CREDIT WORTH INESS OF THE CREDITOR TO LEND THE MONEY TO ASSESSEE AND THEREUPON DECIDE AFR ESH BY LD. ASSESSING OFFICER. HENCE, THE ISSUE IN DISPUTE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 05 TH DECEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 05 TH DECEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF