G Mallikarjuna Reddy, Chennai V. ITO, Non Corporate Ward 17(2), Chennai

ITA 2156/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5234 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-02-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 04-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A R V SREENIVASAN IRS
• Assessee Lawyers: J SREE VIDYA
• Keywords: Unexplained cash credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO.2156/CHNY/2017 / ASSESSMENT YEAR : 2014-2015 SHRI. G. MALLIKARJUNA REDDY, NO.6, GANGAI AMMAN KOIL 1 ST STREET, SHOLINGANALLUR, CHENNAI 600 119. [PAN AQOPM 3297R] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 17(2) CHENNAI. ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MS. J. SREEVIDYA, ADVOCATE /RESPONDENT BY : MR. ARV SREENIVASAN, IRS, JCIT. /DATE OF HEARING : 21-03-2018 ! /DATE OF PRONOUNCEMENT : 09-04-2018 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ASSESSEE IN THIS APPEAL FILED AGAINST AN ORDER DA TED 30.06.2017 OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS)-5, CHENNAI, HAS TAKEN ALTOGETHER FIVE GROUNDS OF WHIC H GROUND NO.1 IS GENERAL NEEDING NO SPECIFIC ADJUDICATION. ITA NO. 2156/CHNY/2017 :- 2 -: 2. VIDE ITS GROUNDS 2 & 3, ASSESSEE ASSAILS AN ADDITIO N OF G35,00,000/-, WHICH AMOUNT WAS TREATED BY THE LD. A SSESSING OFFICER AS UNEXPLAINED FIXED DEPOSIT. 3. ASSESSEE A SALARIED EMPLOYEE HAD FILED HIS RETURN FOR THE IMPUGNED ASSESSMENT YEAR DISCLOSING INCOME OF G2,06 ,500/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE LD. ASSESSING OFFICER THAT ASSESSEE HAD MADE AN INVESTM ENT OF G35,00,000/- IN FIXED DEPOSITS. ASSESSEE WAS REQUIR ED TO EXPLAIN THE SOURCE OF SUCH DEPOSIT. ASSESSEE THEREUPON PRODUCE D A SALE DEED FOR SALE OF ONE IMMOVABLE PROPERTY FOR A CONSIDERATION OF G53,00,000/- AND THIS WAS EXPLAINED AS THE SOURCE OF SUCH FIXE D DEPOSIT. LD. ASSESSING OFFICER ON VERIFYING THE SALE DEED FOUND THAT ASSESSEE WAS ONLY A POWER OF ATTORNEY HOLDER AND NOT OWNER OF T HE PROPERTY. ACCORDING TO HIM, THOUGH ASSESSEE HAD PRODUCED A P URCHASE AGREEMENT ENTERED WITH ONE MS. ISWARIAH IN THE YEAR 2010 FOR PROVING THE ACQUISITION OF THE PROPERTY CLAIMED TO HAVE BEE N SOLD, SUCH PURCHASE AGREEMENT WAS NOT REGISTERED. FURTHER, AS PER THE LD. ASSESSING OFFICER, ASSESSEE COULD NOT GIVE ANY SOUR CE FOR THE PAYMENT OF G45,00,000/- MENTIONED IN SUCH PURCHASE AGREEMEN T. THUS, HE REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE FO R THE FIXED DEPOSIT, AND MADE AN ADDITION OF G35,00,000/-. ITA NO. 2156/CHNY/2017 :- 3 -: 4. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISSIO NER OF INCOME TAX (APPEALS) HOWEVER CONFIRMED THE ADDITION NOTING THAT ASSESSEE COULD NOT PRODUCE ANY CREDIBLE SOURCE FOR THE S UM OF G45,00,000/-, CLAIMED TO HAVE BEEN PAID FOR PURCHASING THE PROPE RTY WHICH WAS SOLD. 5. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE RELYIN G ON THE SALE DEED DATED 12 TH FEBRUARY, 2014 PLACED AT PAPER BOOK AT 18 TO 43 SUBMITTED THAT ASSESSEE HAD A POWER OF ATTORNEY OB TAINED FROM MS.S. ISHWARIAH, ORIGINAL OWNER OF THE PROPERTY. ACCORDIN G TO THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE HAD IN HIS CAPA CITY AS A POWER OF ATTORNEY HOLDER SOLD THE PROPERTY FOR A SUM OF G48 ,00,000/-. AS PER THE LD. AUTHORISED REPRESENTATIVE, IT WAS CLEAR FRO M THE SALE DEED, THAT ASSESSEE HAD RECEIVED CHEQUE NO.002417, DATED 12.12 .2014 DRAWN ON KARUR VYSYA BANK LTD, FROM THE BUYER. FURTHER, AS PER THE LD. AUTHORISED REPRESENTATIVE SUCH SUM WAS CREDITED IN ASSESSEES ACCOUNT WITH ICICI BANK ON 20.02.2014. CONTENTION O F THE LD. AUTHORISED REPRESENTATIVE WAS THAT IT WAS FROM THIS BANK ACCOUNT, THAT ASSESSEE PLACED THE FIXED DEPOSIT OF G35,00,000/- ON 17.03.2014. THUS, ACCORDING TO HIM, SOURCE FOR THE SUM OF G35, 00,000/- STOOD FULLY EXPLAINED. ITA NO. 2156/CHNY/2017 :- 4 -: 6. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE, STRON GLY SUPPORTING THE ORDERS OF THE LOWER AUTHORITIES SUBM ITTED THAT ASSESSEE HAD EXECUTED THE SALE DEED ON 12.2.2014 IN HIS CAP ACITY AS A POWER OF ATTORNEY HOLDER OF MS.S. ISHWARIAH. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE SAID POWER OF ATTORNEY WAS REGISTER ED ON 03.12.2012 AND BY ASSESSEES OWN ADMISSION, THIS WAS EXECUTED BY MS.S. ISHWARIAH ON PAYMENT OF G45,00,000/-. CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE WAS THAT ASSESSEE COUL D NOT SHOW ANY SOURCE FOR THE SUM OF G45,00,000/- PAID TO MS.S. IS HWARIAH ON EXECUTION OF THE POWER OF ATTORNEY. HENCE, ACCORDI NG TO HIM, SOURCE OF THE FIXED DEPOSIT WAS NOT EXPLAINED. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. ADDITION HAS BEEN MADE BY THE LD. ASSESSING OFFICER FOR A FIXED DEPOSIT OF G35,00,00 0/- PLACED BY THE ASSESSEE IN HIS ACCOUNT WITH ICICI BANK. STATEMENT OF M/S. ICICI BANK HAS BEEN PLACED ON RECORD AT PAPER BOOK, PAGE 46. SUCH STATEMENT DOES SHOW A CREDIT OF G48,00,000/- ON 20. 02.2014, WITH A NARRATION REPCO 002417\KVB. A LOOK AT THE REGISTE RED SALE DEED DATED 12.02.2014 CLEARLY SHOW THAT ASSESSEE HAD EXE CUTED IT AS THE POWER OF ATTORNEY HOLDER OF MS.S. ISHWARIAH. CONSI DERATION MENTIONED IN SUCH SALE DEED WAS AS UNDER:- THAT THE RECEIPT OF TOTAL CONSIDERATION IS HEREBY ACKNOWLEDGED BY THE VEND0R FOR A SUM OF 48,00,000/- - ITA NO. 2156/CHNY/2017 :- 5 -: (RUPEES FORTY EIGHT LAKHS ONLY) PAID BY THE PURCHASER TO THE VENDOR AS FOLLOWS: THE ENTIRE SALE CONSIDERATION OF RS.48,OO,OOO/-- (RUPEES FORTY EIGHT LAKHS ONLY) PAID BY REPCO HOME FINANCE LTD., HAVING ITS REGISTERED OFFICE NO.33, NORTHUSRNAN ROAD, T; N AGAR, CHENNAI 600 017 BY WAY OF HOUSING LOAN ON BEHALF OF THE PURCHASER TO THE VENDOR HEREIN THROUGH A CHEQUE BEARING NO.002417, DATED 12.02.2014 DRAWN ON THE KARUR VYSYA BARK LTD, ADYAR BRANCH, CHENNAI - 600'020, AT THE TIME OF EXECUTION OF THIS INDENTURE OF SALE IN THE PRESENCE OF THE UNDERMENTIONED WITNESSES THE RECEIPT OF WHICH SUM IN THE AFORESAID MANNER, THE VENDOR DOES HEREBY ADMIT, ACKNOWLEDGE AND ACQUIT PURCHASER FREE FROM ANY FURTHER PAYMENT WHATSOEVER. THUS, THERE CAN BE NO TWO OPINION THAT THE SUM OF G 48,00,000/- CREDITED IN ASSESSEES BANK ACCOUNT ON 20.02.2014 W AS THE CHEQUE RECEIVED ON SALE OF THE PROPERTY. IRRESPECTIVE OF THE FACT WHETHER ASSESSEE, AS A POWER OF ATTORNEY HOLDER, WAS ENTITL ED TO SUCH SUM, IT CANNOT BE CONTROVERTED THAT THE FIXED DEPOSIT MADE BY THE ASSESSEE ON 17.03.2014, THUS STOOD EXPLAINED. THE FIXED DEP OSIT WAS PLACED BY THE ASSESSEE FROM THE VERY SAME BANK ACCOUNT THRO UGH A TRANSFER DEBIT. IT MIGHT BE TRUE THAT THE POWER OF ATTORNEY WAS REGISTERED ON 03.12.2012 AND ASSESSEE HAD NO GOOD SOURCE TO EXPLA IN THE PAYMENT OF G45,00,000/- TO MS.S. ISHWARIAH. HOWEVER, SOURC E OF SUCH PAYMENT WOULD BE RELEVANT ONLY FOR PREVIOUS YEAR ENDING 31 .03.2013 VIZ, ASSESSMENT YEAR 2013-2014. AS FAR AS ASSESSMENT YE AR 2014-15 IS CONCERNED, ASSESSEE HAD WELL EXPLAINED SOURCE FOR MAKING FIXED DEPOSIT OF G35,00,000/-. THE ADDITION STANDS DELET ED. GROUNDS 2 & 3 ARE ALLOWED. ITA NO. 2156/CHNY/2017 :- 6 -: 8. VIDE ITS GROUNDS 4 & 5, GRIEVANCE OF THE ASSESSEE IS ON AN ADDITION OF G25,06,000/- TREATED BY THE LD. ASSESSI NG OFFICER AS UNEXPLAINED CASH CREDIT. 9. LD. ASSESSING OFFICER HAD MADE THIS ADDITION FOR A REASON THAT THERE WAS AN UNEXPLAINED CREDIT OF G25,06,000 /- IN THE BANK ACCOUNT OF THE ASSESSEE. THOUGH IN ITS APPEAL BEFOR E THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ASSESSEE HAD ARGUED THAT THE SUM WAS TRANSFERRED BY HIS BROTHER-IN-LAW SHRI. BHU MA RAMAKRISHNA REDDY WHO WAS RESIDING ABROAD, THIS WAS NOT ACCEPTE D BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCORDING TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ASSESSEE COUL D NOT EXPLAIN WHERE SHRI. BHUMA RAMAKRISHNA REDDY WAS LIVING NOR HIS SOURCE OF INCOME. 10. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE SUBMIT TED THAT IF GIVEN A CHANCE ASSESSEE WOULD BE ABLE TO EXPLAI N THE SOURCE. ACCORDING TO HER, IT WAS A TRANSFER FROM THE BANK A CCOUNT OF SHRI. BHUMA RAMAKRISHNA REDDY AND SHRI. BHUMA RAMAKRISHNA REDDY WAS A NON RESIDENT CLOSELY RELATED TO THE ASSESSEE. 11. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. ITA NO. 2156/CHNY/2017 :- 7 -: 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. LD. COMMISSIONER O F INCOME TAX (APPEALS) HAD GIVEN A CLEARLY FINDING THAT BANK ACC OUNT SHRI. BHUMA RAMAKRISHNA REDDY WITH ICICI WAS NOT AN NRI ACCOUN T. ASSESSEE HAD FAILED TO FILE ANY CONFIRMATION FROM SHRI. BHUM A RAMAKRISHNA REDDY. ASSESSEE ALSO COULD NOT GIVE ANY DETAILS ON THE WHEREABOUTS OF SHRI. BHUMA RAMAKRISHNA REDDY. IN SUCH CIRCUMST ANCES, WE ARE OF THE OPINION THAT THE ADDITION WAS RIGHTLY MADE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY LD. COMMISSIONER OF INCOME TAX (APPEALS). WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ERS OF THE LOWER AUTHORITIES. GROUNDS 4 & 5 STAND DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 9TH DAY OF APRIL, 2018, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:9TH APRIL, 2018. KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF