Sri Byrasandra Papaiah Shantha Kumar , Bangalore V. Income Tax Officer Ward-6(3)(1), Bangalore

ITA 2408/BANG/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 5358 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H.L. SOUMYA CHAR
• Keywords: Unexplained cash credit
• Section: 68; 143(3); 234B; 201; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BANGALORE BENCH A BEFORE S HRI JASON P BOAZ , ACCOUNTANT MEMBER I.T . A. NO. 2408 /BANG/20 18 (ASSESSMENT YEAR : 20 15 - 16 ) SRI BYRASANDRA PAPAIAH SHANTHA KUMAR, NO.2, 4THCROSS, KAVAL BYRASANDRA NEW EXTENSIO N, R T NAGAR, BENGALURU - 560 032 . . APPELLANT. VS. INCOME TAX OFFICER, WARD 6(3)(1), BANGALORE. .. RESPONDENT. APPELLANT BY : S HRI NARENDRA SHARMA, ADVOCATE. R E SPONDENT BY : SMT. H.L. SOUMYA CHAR, ADDL.CIT (D.R) DATE OF H EARING : 20.09.2018. DATE OF P RONOUNCEMENT : 05 .10 .201 8 . O R D E R PER SHRI JASON P BOAZ, A .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 6, BANGALORE DT.19.04.2018 FOR ASSESSMENT YEAR 2015 - 16. 2. BRIEFLY STATED, THE F ACTS OF THE CASE ARE A S UNDER : - 2.1 THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2015 - 16 ON 30.3.2017 DECLARING TAXABLE INCOME OF 2 IT A NO. 2408 /BANG/201 8 RS.5,14,500; CONSISTING OF INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES . THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT') VIDE ORDER DT.19.12.2017, WHEREIN THE ASSESSEE'S INCOME WAS DETERMINED AT RS.25,14,500. THE INCOME WAS SO DETERMINED DUE TO AN ADDITION OF RS.20 LAKHS MADE BY THE ASSESSING OFFICER AS HE WAS OF THE VIEW THAT THE ASSESSEE WAS NOT ABLE TO EXPLAIN SATISFACTORILY THE CREDITS AMOUNTING TO RS.20 LAKHS OUT OF TOTAL CASH CREDITS OF RS.82,84,751 I N THE YEAR UNDER CONSIDERATION , BY WAY OF FILING OF CONFIRMATION LETTER ALONG WITH PAN OF THE PARTY CONCERNED. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DT.19.12.2017 FOR ASSESSMENT YEAR 2015 - 16, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS) 6, BANGALORE CHALLENGING TH E ADDITION OF RS.20 LAKHS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDITS. IN THIS REGARD, THE ASSESSEE, ALONG WITH FORM NO.35, AS PER COL .NO.12 AND 12.1, HAS FILED BEFORE THE CIT(APPEALS) A COPY OF THE CONFIRMATION LETTER DT.20.12.2017 FROM SR I K. LOKESH ALONG WITH PAN, CONFIRMING THAT THE TRANSACTION OF RS.20 LAKHS REFLECTED THE RETURN OF AN ADVANCE RECEIVED BY HIM FROM THE ASSESSEE. THE LEARNED CIT(APPEALS), HOWEVER, DISMISSED THE ASSESSEE'S APPEAL VIDE THE IMPUGNED ORDER DT.19.4.2018, HOLDI NG THAT THE CONTENTS OF THE AFORESAID CONFIRMATION LETTER CANNOT BE BELIEVED SINCE THERE IS NO EVIDENCE OF THE TRANSACTION ; AS THE ASSESSEE HAS NOT ESTABLISHED THAT HE HAD ADEQUATE SOURCES TO GIVE THE MONEY TO SRI K. LOKESH FROM HIS OWN SOURCES, WHICH IS NOW BEING CLAIMED TO HAVE BEEN RETURNED. 3 IT A NO. 2408 /BANG/201 8 3. THE ASSESSEE, BEING AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) 6, BANGALORE DT.19.4.2018 FOR ASSESSMENT YEAR 2015 - 16 HAS PREF E RRED THIS APPEAL BEFORE THE TRIBUNAL, WHEREIN HE HAS RAISED THE FOLLOWING GROUNDS : - 4 IT A NO. 2408 /BANG/201 8 4. GROUND NOS.1, 2, 7 AND 9 IN THIS APPEAL (SUPRA) ARE GENERAL IN NATURE AND THEREFORE NO ADJUDICATION IS CALLED FOR THEREON. 5 IT A NO. 2408 /BANG/201 8 5. GROUND NO.7 CHARGE OF INTEREST U/S.234B & 234C OF THE ACT. 5.1 IN THIS GROUND, T HE ASSESSE E DENIES THAT HE IS LIABLE TO BE CHARGED INTEREST UNDER SECTION 234B & 234C OF THE ACT. THE CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY AND THE ASSESSING OFFICER HAS NO DISCRETION IN THE MATTER. THIS PROPOSITION HAS BEEN UPHELD BY THE HON'BLE APE X COURT IN THE CASE OF ANJUM H GHASWALA (252 ITR 1) (SC) AND WE THEREFORE UPHOLD THE ACTION OF THE ASSESSING OFFICER IN CHARGING THE SAID INTEREST IN THE CASE ON HAND. THE ASSESSING OFFICER IS, HOWEVER, DIRECTED TO RECOMPUTE THE INTEREST CHARGEABLE UNDER SECTION 234B & 234C OF THE ACT, IF ANY, WHILE GIVING EFFECT TO THIS ORDER. 6. GROUND NOS. 3 TO 6 : CASH CREDIT . 6.1.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE ASSAILS THE ORDER OF THE LEARNED CIT(APPEALS) IN SUSTAINING THE ADDITION OF RS.20 LAKHS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE, THE FINDINGS RECORDED BY THE ASSESSING OFFICER IN THE ORDER OF ASSESSMENT THAT THE ASSESSE E HAS DEPOSITED THE AFORESAID AMOUNT OF RS.20 LAKHS IN THE BANK ACCOUNT IS FACTUALLY INCORRECT. IN FACT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT THE AMOUNT OF RS.20 LAKHS CREDITED IN T HE ASSESSEE'S BANK ACCOUNT IS NOTHING BUT THE REPAYMENT BY SRI K LOKESH OF AN ADVANCE BY THE ASSESSEE TO HIM AND THAT SUCH REPAYMENT OF RS .20 LAKHS WAS THROUGH REGULAR BANKING CHANNELS. IN THIS REGARD, THE LEARNED AUTHORISED REPRESENTATIVE DREW MY ATTENTION TO PAGES 12 AND 13 OF THE PAPER BOOK, WHICH IS A CO PY OF THE BANK 6 IT A NO. 2408 /BANG/201 8 STATEMENT OF ASSESSEE'S BANK AC COUNT WITH CORPORATION BANK, HAR OHALLI B RANCH WHEREIN ON 18.11.2014, THERE IS A CREDI T OF RS.20 LAKHS, NOT BY CASH B UT THROUGH BANKING CHANNELS. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITS THAT THEREFORE TH E VIEW OF THE ASSESSING OFFICER THAT THE REPAYMENT OF ADVANCE BY SRI LOKESH, AS PER THE RECEIPTS AND PAYMENT ACCOUNT, IS A CASH PAYMENT IS CONTRARY TO FACTS. IT WAS FURTHER SUBMITTED THAT THE VERY BASIS FOR THE ASSESSING OFFICER MAKING THE ADDITION OF RS .20 LAKHS AS UNEXPLAINED CASH CREDIT IS FOR NOT FURNISHING CONFIRMATION THEREOF BY SRI K. LOKESH AND HIS PAN. ACORDING TO THE LEARNED AUTHORISED REPRESENTATIVE, THE SAID CONFIRMATION WAS ADMITTEDLY CALLED FOR BY THE ASSESSING OFFICER ON 18.12.2017, AS C AN BE SEEN FROM THE ASSESSING OFFICER S RECITALS AT THE LAST PARAGRAPH ON PAGE 2 OF THE ORDER OF ASSESSMENT, AND EVEN WITHOUT ALLOWING THE ASSESSEE REASONABLE TIME TO PROCURE THE SAME, THE ASSESSING OFFICER WENT ON TO PASS THE ADVERSE ORDER OF ASSESSMENT ON THE VERY NEXT DAY I.E. 19.12.2017. IT IS SUBMITTED THAT THE ASSESSEE COULD PROCURE THE CONFIRMATION LETTER FROM SRI K. LOKESH ON 20.12.2017 ; BY WHICH TIME THE IMPUGNED ORDER OF ASSESSMENT WAS PASSED. 6.1.2 THE LEARNED AUTHORISED REPRESENTATIV E SUBMITS THAT ON APPEAL, THE ASSESSEE, WHILE FILING THE APPEAL, HAD ENCLOSED A COPY OF THE CONFIRMATION LETTER FROM SRI K. LOKESH MENTIONING HIS PAN ETC DT.20.12.2017 AS PER COL.12 & 12.1 OF FORM NO.35. IT IS CONTENDED THAT, BY HAVING FILED THE CONFIRMA TION LETTER DT.20.12.2017 FROM SRI K. LOKESH, 7 IT A NO. 2408 /BANG/201 8 THE ASSESSEE HAD DISCHARGED THE BURDEN AS THIS CLEARLY ESTABLISHES THAT CREDIT IN THE ASSESSEE'S BANK STANDS FULLY EXPLAINED AND CONSEQUENTLY, THE SAID CREDIT IS NEITHER A CASH CREDIT NOR AN UNEXPLAINED CASH C REDIT AS HELD BY THE AUTHORITIES BELOW. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE, THE LEARNED CIT(APPEALS) WAS NOT CORRECT IN SUMMARILY BRUSHING ASIDE THE CONFIRMATION FILED BY SRI K. LOKESH BY STATING THAT THE SAME CANNOT BE BELIEVED; WHEN ACTU ALLY THE SAME OUGHT TO HAVE BEEN ACCEPTED AS GENUINE IN THE LIGHT OF THE FACT THAT THE SAID TRANSACTION WAS CONFIRMED AND ACCEPTED BY SRI K. LOKESH AND IT WAS ESTABLISHED TO HAVE BEEN CARRIED OUT THROUGH REGULAR BANKING CHANNELS. IT WAS PRAYED BY THE LEA RNED AUTHORISED REPRESENTATIVE THAT, IN THE LIGHT OF THE ABOVE, SINCE IT IS CLEARLY ESTABLISHED THAT THE SAID CREDIT OF RS.20 LAKHS STANDS EXPLAINED, THE ADDITION OF RS.20 LAKHS AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT BE DELETED. 6.2 PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE SUPPORTED THE FINDINGS OF THE LEARNED CIT(APPEALS) ON THIS ISSUE. ACCORDING TO HER EVEN THOUGH THE CONFIRMATION BY SRI K. LOKESH WAS ONLY FILED BEFORE THE CIT(APPEALS), THE LEARNED CIT( APPEALS) HAS DULY CONSIDERED THE SAME AND RIGHTLY SUSTAINED THE ADDITION OF RS.20 LAKHS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CREDITS. 8 IT A NO. 2408 /BANG/201 8 6.3.1 I HAVE HEARD BOTH PARTIES, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING TH E PAPER BOOK (PAGES 1 TO 13) FILED BY THE ASSESSEE. ON A PERUSAL OF THE DOCUMENTS FILED IN THE PAPER BOOK (SUPRA), AT PAGE 13 THEREOF; I.E. THE COPY OF ASSESSEE'S BANK STATEMENT WITH CORPORATION BANK, I FIND FORCE IN THE ASSESSEE'S SUBMISSION THAT THE SUM OF RS.20,00,000 DEPOSITED IN THE ASSESSEE'S BANK ACCOUNT ON 18.11.2014 IS NOT A CASH DEPOSIT BUT CREDIT OF THE SAID AMOUNT THROUGH REGULAR BANKING CHANNELS. IT IS FURTHER SEEN THAT THE SAID TRANSACTION HAS BEEN CONFIRMED BY SRI K. LOKESH VIDE CONFIRMA TION LETTER DT.20.2.2017 (PLA C ED AT PAGE 11 OF PAPER BOOK). IN MY CONSIDERED VIEW, THE ASSESSEE; HAVING FILED THE CONFIRMATION LETTER FROM SRI K. LOKESH BEARING HIS PAN AND ALSO EST A BLISHING THAT THE SAID TRANS A CTI O N OF RS.20 LAKHS HAS BEEN C REDITED IN HI S BANK ACCOUNT, NOT BY CASH, BUT THROUGH REGULAR BANKING CHANNELS, HAS DISCHARGED THE INITIAL ONUS CAST UPON HIM TO ESTABLISH THE IDENTITY OF THE CREDITOR, WITH PAN, ADDRESS ETC AND OF THE CREDIT BEING THROUGH BANKING CHANNELS. IN THESE CIRCUMSTANCES, TH E LEARNED CIT(APPEALS) BRUSHING ASIDE THE EVIDENCE AS NOT BELIEVABLE AND UPHOLDING THE ADDITION UNDER SECTION 68 OF THE ACT, IN MY CONSIDERED OPINION, IS NEITHER TENABLE NOR SUSTAINABLE. IN THIS FACTUAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, I AM OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.20 LAKHS AS UNEXPLAINED CASH CREDIT AND SUSTAINED BY THE LEARNED CIT(APPEALS) IS FACTUALLY UNSUSTAINABLE AND ACCORDINGLY DELETE THE SAME. IN COMING TO THIS FINDING, I DREW SUPPORT FROM THE OBSERVA TIONS / FINDINGS RENDERED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUILDERS 9 IT A NO. 2408 /BANG/201 8 (2002) 256 ITR 360. CONSEQUENTLY, GROUND NOS. 3 TO 6 OF ASSESSEE'S APPEAL ARE ALLOWED. 7. IN THE RESULT, ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 201 5 - 16 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 5TH DAY OF OCT., 201 8 . SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE, DT. 05 . 10.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE A SST. REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE.