Sri Jacob C.john, Kollam V. ITO, Kollam

ITA 258/COCH/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52302 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 11-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 09-04-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: D S SREEKUMARAN ADV
• Keywords: Gift
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM I.T.A NO.258/COCH/2010 ASSESSMENT YEAR:2005-06 SHRI JACOB C.JOHN, KOCHUVEEDU, UMMANNOOR P.O.,KOTTARAKARA, KOLLAM [PAN:ANJPJ 2627A] VS. THE INCOME TAX OFFICER, WARD-2, KOLLAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI D.S.SREEKUMARAN, ADV.-AR REVENUE BY MS. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 11/10/2011 DATE OF PRONOUNCEMENT 16/12/2011 O R D E R PER SANJAY ARORA, AM: THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIVANDRUM (CIT(A) FOR SH ORT) DATED 18.12.2009 AND THE ASSESSMENT YEAR (A.Y.) UNDER REFERENCE IS 2005-06. 2. THOUGH THE MEMORANDUM OF APPEALS RAISES AS MANY AS SEVEN GROUNDS, THE SAME CONCERNS A SINGLE ISSUE, I.E., THE VALIDITY IN LAW OF THE ADDITION IN THE SUM OF ` 9,50,000/- MADE BY THE ASSESSING OFFICER (AO) TO THE ASSESSEE S RETURNED INCOME OF ` 57,535/- (AS PER THE RETURN OF INCOME FILED ON 19.12.2006) VIDE ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE INCOME-TAX ACT, 1961 ('THE ACT', HEREINAFTER) D ATED 31/12/2007, SINCE CONFIRMED VIDE THE IMPUGNED ORDER BY THE FIRST APPELLATE AUTHORITY . I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 2 3. THE BACKGROUND FACTS OF THE CASE ARE THAT A SUM OF ` 10 LAKHS WAS FOUND DEPOSITED IN THE ASSESSEES SAVINGS BANK ACCOUNT WITH THE FED ERAL BANK, KOTTARAKARA (S/B A/C NO. 8280) IN TWO INSTALMENTS OF ` 6 LAKHS AND ` 4 LAKHS ON 22.12.2004. THE ASSESSEE WAS, ACCORDINGLY, CALLED UPON TO EXPLAIN THE NATURE AND SOURCE OF THE AMOUNT DEPOSITED IN THE SAID BANK ACCOUNT IN THE COURSE OF THE ASSESSMENT P ROCEEDINGS. THE SAME WAS EXPLAINED TO BE OUT OF A SUM OF ` 11.75 LAKHS GENERATED FROM VARIOUS SOURCES BY HIM A ND HIS WIFE, WITH WHOM HE JOINTLY HELD THE SAID BANK ACCOUNT, AS UNDER (REFER PG. 2 OF THE ASSESSMENT ORDER): SL.NO. DATE PARTICULARS AMOUNT IN ` 1. 15.12.2004 LOAN FROM BABY JOHN (RELATIVE) 1,50, 000/- 2. 17.12.2004 ADVANCE PAID FOR JEEP RECEIVED BACK ( OUT OF ` 1,00,000/- PAID ON 02.10.2004) 90,000/- 3. 18.12.2004 SALE PROCEEDS OF ORNAMENTS OF WIFE 1, 15,000/- 4. 18.12.2004 LOAN FROM C.YOHANNAN & C.PONNAMMA (FATHER AND MOTHER) 1,50,000/- 5. 21.12.2004 FAMILY PROPERTY RIGHT OF WIFE 1,00,00 0/- 6. 22.12.2004 SALE PROCEEDS OF THE PROPERTY OF WIFE 1,70,000/- 7. 22.12.2004 LOAN FROM JOSE GEORGE - RELATIVE 4,00 ,000/- TOTAL 11,75,000/ - THE BALANCE AMOUNT OF ` 1.75 LAKHS, I.E., ` 11.75 LAKHS MINUS ` 10.00 LAKHS, WAS EXPLAINED BY THE ASSESSEE TO HAVE BEEN UTILISED IN CLOSING HI S BUILDING LOAN ACCOUNT (WITH DISTRICT CO-OPERATIVE BANK, KOLLAM), TO WHICH A SUM OF ` 2,09,743/- WAS REMITTED ON 30.12.2004. THE AO EXAMINED EACH OF THE STATED SOURCES OF DEPOS IT/S, AND FOUND THE ASSESSEES EXPLANATION SATISFACTORY WITH REFERENCE TO THAT LIS TED AT SL. NOS. 2 AND 6 IN THE TABLE. ACCORDINGLY, THE BALANCE AMOUNT OF ` 9.15 LAKHS ( ` 11,75,000 ` 90,000 - ` 1,70,000/-), I.E., FOR WHICH THE ASSESSEES EXPLANATION WAS FOUN D BY HIM AS NOT SATISFACTORY, WAS ADDED AS UNEXPLAINED DEPOSITS IN HIS BANK ACCOUNT U/S. 69 A OF THE ACT. 4. THE SAME STOOD CONFIRMED IN FIRST APPEAL ON MERI TS, AND PRIMARILY FOR THE SAME REASONS. THE AO, IT WAS URGED BEFORE HIM, HAD NOT CLARIFIED THE COMPUTATION OF THE IMPUGNED SUM OF ` 9.15 LAKHS IN THE ASSESSMENT ORDER. ACCORDINGLY, TH E SAME STOOD I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 3 CLARIFIED SUBSEQUENTLY BY HIM VIDE HIS REMAND REPOR T, STATING OF THE SAME AS BEING ONLY A MINOR OMISSION, NOT EFFECTING THE VALIDITY OF THE A SSESSMENT, ADVERTING TO S. 292B OF THE ACT, AND TOWARD WHICH REFERENCE WAS MADE BY THE ASS ESSEE TO THE DECISION IN THE CASE OF UMASHANKAR MISHRA VS. CIT (1982) 136 ITR 330 (M.P.). THE ASSESSEES CHALLEN GE ON THIS GROUND WAS ALSO FOUND NOT ACCEPTABLE BY THE LD . CIT(A). AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD, INCLUDING THE ASSESSEES ARGUMENT NOTE FILED AT THE TIME OF HEARI NG. THE ASSESSEE HAS RAISED SEVERAL OBJECTIONS, TO WHICH WE SHALL ADVERT TO IN SERIATIM . 5.1 THE FIRST OBJECTION RAISES A LEGAL ISSUE CHALLE NGING THE VALIDITY OF THE PROCEEDINGS ON THE BASIS OF NON JOINTER OF NECESSARY PARTIES TO THE PROCEEDINGS. THIS IS ON THE BASIS THAT THE BANK ACCOUNT UNDER REFERENCE (WHEREIN THE DEPOSIT OF ` 10 LAKHS WAS MADE ON 22.12.2004), IS A JOINT BANK ACCOUNT OF THE ASSESSE E AND HIS WIFE, SMT. ROSAMMA JACOB. SHE BEING EQUALLY A PARTNER IN THE SAID BANK ACCOUN T; RATHER, BEING A MAJOR CONTRIBUTORY THERE-TO, ALSO OPERATING THE SAID ACCOUNT, NON IMPL EADING HER IN THE PRESENT PROCEEDINGS WOULD INVALIDATE THE SAME. BEING A VITAL DEFECT, TH E SAME VITIATES THE PROCEEDINGS. WE DO NOT CONSIDER THE SAID OBJECTION AS VALID. THAT THE BANK ACCOUNT IS ALSO OWNED BY THE ASSESSEE, IS UNDISPUTED. AS SUCH, THE ISSUE OF NOT ICES U/SS. 142(1) AND 148 THERETO CANNOT BE CONSIDERED AS INVALID. WITH REGARD TO HIS WIFE BEING A JOINT ACCOUNT HOLDER, IT MAY WELL BE THAT THIS FACT CAME TO SURFACE ONLY SUBSEQU ENTLY. IN ANY CASE, IT IS ALWAYS OPEN FOR THE ASSESSEE TO EXPLAIN SOME (OR EVEN THE FULL) AMO UNT OF THE DEPOSITS IN THEIR JOINT BANK ACCOUNT WITH REFERENCE TO HIS WIFE. THAT IS, THE SA ME COULD FORM A PART OF HIS EXPLANATION TOWARDS THE IMPUGNED AMOUNT DEPOSITED IN HIS BANK A CCOUNT, BUT BY ITSELF WOULD NOT OPERATE TO DIS-QUALIFY THE INITIATION OF PROCEEDING S BASED ON THE SAID INFORMATION AS UNSUSTAINABLE IN LAW. THE ASSESSEES SECOND OBJECTION IS THAT NO PRE-ASSESSMENT NOTICE WAS ISSUED. THIRDLY, THE COPIES OF THE STATEMENTS RECORDED FROM THE CREDITORS PRODUCED FOR EXAMINATION, WHICH WERE USED AGAINST THE APPELLANT, WERE NOT SUPPLIED TO HIM (ASSESSEE), I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 4 AND ALSO NO OPPORTUNITY FOR CROSS-EXAMINING THEM AL LOWED (TO THE ASSESSEE) BEFORE PASSING THE ASSESSMENT ORDER. WE FIRSTLY OBSERVE T HAT THE AO HAS EXAMINED THE EVIDENCE ADDUCED BY THE ASSESSEE, AS WELL AS BY THE CREDITOR S PRODUCED, TOWARDS SUBSTANTIATION OF HIS EXPLANATION IN RESPECT OF THE IMPUGNED DEPOSIT. THE MATTER WAS ALSO SUBSEQUENTLY REMANDED BY THE LD. CIT(A), TO WHICH THE AO RESPOND ED VIDE HIS REMAND REPORT DATED 10.6.2009 (COPY ON RECORD). THE ASSESSEES SUBMISS IONS BEFORE THE LD. CIT(A) HAVE ALSO BEEN MADE A PART OF THE IMPUGNED ORDER. AS SUCH, IT CANNOT BY ANY MEASURE OR STRETCH OF IMAGINATION BE SAID THAT AN OPPORTUNITY TO STATE HI S CASE HAS NOT BEEN AFFORDED TO THE ASSESSEE. WITH REGARD TO THE CLAIM OF NON-GRANT OF OPPORTUNITY FOR CROSS-EXAMINATION (OF THE CREDITORS), IF IT IS FOUND THAT THEIR STATEMENT /S HAS BEEN UTILISED AGAINST THE ASSESSEE, HIS OBJECTION WOULD DEFINITELY HOLD, AND WHICH WE S HALL CONSIDER WHILE EXAMINING THE RELEVANT CREDIT/SOURCE/S OF THE DEPOSIT. 5.2 THE ASSESSEE, NEXT, QUESTIONS THE CALLING OF THE REMAND REPORT BY THE LD. CIT(A), WHICH IT IS CONTENDED OPERATED TO SUPPLEMENT THE OR DER BY THE AO AND, THUS, THE ACTION OF THE LD. CIT(A) IS VITIATED. REFERENCE IN THIS CONT EXT IS MADE TO THE DECISION BY THE APEX COURT IN THE CASE OF ITO VS. ASOK TEXTILES LTD . (1961) 41 ITR 732 (SC). RELIANCE BY THE REVENUE AUTHORITIES ON THE PROVISION OF S. 292B IS ALSO DISPUTED. WE DO NOT FIND ANY MERIT IN THE ASSESSEES CLAIMS. THE ONLY CLARIFICA TION WE FIND IN THE AOS REMAND REPORT IS, AS AFORE-STATED, TOWARD THE COMPUTATION OF THE IMPUGNED SUM OF ` 9.15 LAKHS. THE ASSESSEE BEING CALLED UPON TO EXPLAIN THE NATURE AN D SOURCE OF THE DEPOSIT IN THE SUM OF ` 10 LAKHS, FURNISHED THE DETAILS FOR A TOTAL OF ` 11.75 LAKHS, ALSO STATING THE MANNER OF UTILISATION OF THE BALANCE ` 1.75 LAKHS. THE AO FINDING THE ASSESSEES EXPLANAT ION FOR A TOTAL OF ` 2.60 LAKHS AS SATISFACTORY, ADDED THE BALANCE AMOUN T OF ` 9.15 LAKHS. . IN FACT, THE ENTIRE MATERIAL BEING ON RECORD, TH E SAID REPORT DATED 10-06-2009 COULD ALSO BE CONSIDERED AS AN ORDER U/S. 154 INASMUCH AS THE ASSESSMENT ORDER DATED 31-12- 2007 DID NOT BEAR THE DETAILS OF THE ASSESSEES EXP LANATION FOR THE UTILISATION OF THE EXCESS ` 1.75 LAKHS AND, CONSEQUENTLY, THE BASIS OF THE COMP UTATION OF ` 9.15 LAKHS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE AC TION OF THE LD. CIT(A) IN CALLING FOR THE SAID REPORT, WHO COULD RATHER GIVE THE CONTENTS OF THE SAID REPORT IN HIS ORDER AS WELL, AND I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 5 WHOSE POWERS BEING CO-TERMINUS WITH THAT OF THE ASS ESSING AUTHORITY, WOULD EXTEND TO DO WHAT THE AO OUGHT TO HAVE DONE (REFER CIT VS. KANPUR COAL SYNDICATE (1964) 53 ITR 225 (SC)). THERE IS NO CASE, WE MAY CLARIFY, THAT T HE AO HAS NOT MADE THE RELEVANT INQUIRY DURING THE INITIAL PROCEEDINGS. NEITHER DOE S IT (THE REMAND) OPERATE TO EXTEND THE SCOPE OF THE INQUIRY, I.E., AS ALREADY MADE, IN ANY MANNER NOR DOES IT LEAD TO ANY INCREASE IN THE ADDITION AS EFFECTED. IT IS ONLY A CASE OF O MISSION IN RECORDING THE SAME, EVEN AS STATED BY THE AO IN HIS REMAND ORDER. FURTHER, WE D O NOT FIND ANY SCOPE FOR THE APPLICATION OF THE DECISION IN THE CASE OF ITO VS. ASOK TEXTILES (SUPRA). THE SAME, IF AT ALL, ONLY ASSISTS THE CASE OF THE REVENUE; THE APEX COUR T THEREBY CLARIFYING THAT IT IS WELL WITHIN THE POWERS OF THE ASSESSING AUTHORITY TO REC TIFY HIS ORDER TO REMOVE OR CURE ANY MISTAKE OF FACT OR OF LAW INFLICTING HIS ORDER. THE RELIANCE ON THE DECISION IN THE CASE OF UMASHANKAR MISHRA VS. CIT (SUPRA) IS ALSO COMPLETELY MISPLACED. IN THE FACTS OF THAT CASE, THE HONBLE COURT HELD THAT AN ABSENCE OF SIG NATURE WAS NOT A MERE INCONSEQUENTIAL TECHNICALITY. AS SUCH, THE NOTICE, WHICH WAS NOT SI GNED, AND THE RESULTANT PROCEEDING/S, WAS NOT VALID. WITHOUT DOUBT, IT IS ONLY THE SIGNAT URE THAT LENDS AUTHENTICITY AND BREATHES LIFE TO A NOTICE, AND WHERE NOT SIGNED, THERE COULD BE NO VALID ASSUMPTION OF JURISDICTION ON ITS BASIS. WE ARE UNABLE TO DRAW ANY CORRELATION OF THE SAID DECISION WITH THE FACTS OF THE INSTANT CASE. THE AUTHORITIES BELOW HAVE ALSO R IGHTLY ADVERTED TO S. 292B OF THE ACT. 5.3 COMING NEXT TO THE MERITS OF THE CASE, I.E., ON FACTS, WE SHALL DEAL WITH EACH OF THE CREDITS INDEPENDENTLY, EVEN AS NO SPECIFIC ARGUMENT S STOOD RAISED BY THE ASSESSEE BEFORE US DURING HEARING, WITH THE LD. DR RELYING ON THE D ECISIONS IN THE CASE OF ROSHAN DI HATTI V. CIT (19777)107 ITR 938 (SC); CIT V. BIJU PATNAIK (1986)160 ITR 674(SC); MALABAR AGRICULTURAL CO. LTD. V. CIT , 229 ITR 548 (KER.) AND 177 TAXMAN 481 (KER.). TH E LAW IN THE MATTER IS TRITE, SO THAT THE ASSESSEES EXPLANA TION WOULD HAVE TO BE EXAMINED ON THE TOUCHSTONE OF IT LEADING TO SPECIFIC ANSWERS AS TO THE NATURE AND SOURCE OF THE DEPOSIT/S UNDER REFERENCE, INCLUDING THE NON-ACCEPTANCE OF TH E LOAN ` 1.50 LAKHS FROM SHRI BABY JOHN, WHICH ALSO DOES NOT FIND MENTION IN THE INITI AL ASSESSMENT ORDER. THE MATTER HAS BEEN SUBSEQUENTLY CLARIFIED BY THE AO AS BEING AN O MISSION INASMUCH AS THE RELEVANT PARTS OF THE ASSESSMENT ORDER, INCLUDING THE ACCEPT ANCE OF THE CREDIT OF ` 1.70 LAKHS, I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 6 CLAIMED AS THE SALE PROCEEDS OF THE PROPERTIES SOLD BY THE ASSESSEES WIFE (WHICH FORMS PART OF THE SUM OF ` 2.60 LAKHS ACCEPTED BY THE AO), WERE SOMEHOW OMITTE D IN THE PRINT- OUT. THE SAME READS AS UNDER:- THE ASSESEE HAS FILED COPY OF THE DOCUMENT OF THE PROPERTY SOLD BY HIS WIFE FOR ` 1,70,000/-. HENCE THE CLAIM THAT SALE PROCEEDS OF THE PROPERTY AMOUNTING TO ` 1,70,000/- WAS RECEIVED FROM THE ASSESSEES WIFE IS ACCEPTED. THE ASSESSEE HAS NOT PRODUCED SHRI BABY JOHN, VALA KAM 5.4 WE FIRSTLY TAKE UP THE NON-ACCEPTANCE OF THE CREDIT /SOURCE ASCRIBED (OF ` 1.50 LAKHS) TO SHRI BABY JOHN, VALAKAM. WE HAVE ALREADY CLARIFIED THAT THE AO HAVING ADDED ` 9 .15 LAKHS TO THE ASSESSEES INCOME, THE NON-ACCEPTA NCE OF THIS SUM IS IMPLIED; THE BALANCE `1. 70 LAKHS, WHICH STOOD ALSO OMITTED TO BE RECORDED, BEING ACCEPTED, SO THAT THE SAME WOULD NOT FORM PART OF THE IMPUGNED SUM OF ` 9.15 LAKHS. AT PARA 3 (PG. 2 OF THE ASSESSMENT ORDER), THE AO CLEARLY STATES THAT THE A SSESSEE WAS REQUESTED TO PRODUCE THE LOAN CREDITORS. INASMUCH AND INSOFAR AS THE NON-PRO DUCTION OF THE SAID LOAN CREDITOR, AS WELL AS THE NON-PRODUCTION OF ANY DOCUMENTARY EVIDE NCE TO PROVE THE SOURCE OF THE AMOUNT/S ADVANCED, IS A MATTER OF FACT, WHICH IS NO T DENIED BY THE ASSESSEE, IT CANNOT BE SAID THAT THE AO HAD OVERLOOKED TO EXAMINE THE EXPL ANATION FOR THE SAID SUM, AND THE OMISSION THUS IS ESTABLISHED TO BE ONLY IN RECORDIN G THE SAME. THE ASSESSEE, AS AFORE- NOTED, HAS NOT ADVANCED ANY EXPLANATION ON THE FACT UAL ASPECTS OF THE CREDIT. ACCORDINGLY, WE FIND NO INFIRMITY IN ITS NON-ACCEPT ANCE. 5.5 THE SECOND SUM NOT ACCEPTED BY THE AO IS QUA THE SALE PROCEEDS OF ORNAMENTS CLAIMED IN THE SUM OF ` 1.15 LAKHS (AT SR. NO. 3 OF THE TABLE). THE REASON FOR THE SAME IS NON-PRODUCTION OF THE PURCHASER, SHRI V.K.CHACKO, W HO, THOUGH CALLED FOR, WAS NOT PRODUCED FOR EXAMINATION BEFORE THE AO. ALSO, HE D ID NOT FIND IT BELIEVABLE THAT SHRI CHACKO HAD PURCHASED GOLD ORNAMENTS BY OBTAINING FU RTHER LOAN FROM HIS RELATIVES, THOUGH HE HELD (UNUTILIZED) CASH BALANCE IN HIS BAN K ACCOUNT (NO.213). ALSO, THE MARRIAGE FOR WHICH THE ORNAMENTS WERE CLAIMED TO HAVE BEEN P URCHASED, WAS HELD ONLY ON 03-7- 2006, I.E., MORE THAN 19 MONTHS LATER. WE FIND THE AOS OBJECTION AS VALID, COGENT AND I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 7 TENABLE, AND WHICH HAS NOT BEEN FACTUALLY MET BY TH E ASSESSEE IN ANY MANNER; THE ESTABLISHMENT, EVEN THOUGH PRIMA FACIE , OF THE CAPACITY OF THE PURCHASER BEING CRUCIAL TO THE GENUINENESS OF THE TRANSACTION AND, THUS, THE V ALIDITY IN LAW OF THE STATED EXPLANATION. 5.6 THE THIRD ITEM OF CREDIT IS WITH REGARD TO A LO AN/GIFT OF ` 1.50 LAKHS, CLAIMED TO BE RAISED/RECEIVED BY THE ASSESSEE FROM HIS FATHER AND MOTHER. THE SAME WAS NOT ACCEPTED AS NEITHER WERE THEY PRODUCED FOR EXAMINATION NOR ANY DOCUMENTARY EVIDENCE FURNISHED IN SUPPORT; THE CREDIT BEING IN CASH. THESE BASIC FACT S ARE NOT DENIED; RATHER, WE FIND THE ASSESSEE TO HAVE NEITHER ADVANCED ITS CASE ON THE F ACTUAL ASPECTS BEFORE THE LD. CIT(A) NOR RAISED ANY ARGUMENT BEFORE US. WITH REGARD TO THIS CREDIT, HOWEVER, IN OUR VIEW, THE MOTHER AND FATHER CAN DEFINITELY BE EXPECTED TO EXT END A LOAN OR EVEN A GIFT TO THEIR SON, PARTICULARLY WHEN HE IS ON THE VERGE OF CONSTRUCTIN G A HOUSE, WHICH IS A BIG OCCASION IN THE LIFE OF ANY PERSON, PARTICULARLY IN OUR SOCIETY . TRUE, NO EVIDENCE TO THIS EFFECT HAS BEEN FILED, BUT WHAT POSSIBLY COULD BE, AS WHERE THE SAM E IS ADVANCED IN CASH, ACCUMULATED OUT OF (SAY) PAST SAVINGS. THE AMOUNT IS NOT HIGH TO BE CONSIDERED AS UNREASONABLE. WHEN THE COUPLE IS RAISING RESOURCES FROM EVERY CORNER, IT I S ONLY UNDERSTANDABLE THAT THEY WOULD APPROACH THEIR RESPECTIVE PARENTS AS WELL FOR FINAN CIAL ASSISTANCE. ALSO, BEING FROM THE PARENTS, IT WOULD NOT, PARTICULARLY IN THE FACT SET TING OF THE CASE, BE OF MUCH CONSEQUENCE, WHETHER IS AMOUNT UNDER REFERENCE STANDS ACCEPTED A S A LOAN OR AS A GIFT, THE SAME BEING NOT CLEAR, EVEN AS THE DIFFERENCE IS MATERIAL, AND MAY ORDINARILY BY ITSELF BE A GROUND FOR DOUBTING THE GENUINENESS OF THE CREDIT TRANSACTION. IT IS NOT CLEAR IF THE PARENTS ARE RESIDING WITH THE ASSESSEE OR ELSEWHERE. AND, IF EL SEWHWERE, AT WHAT DISTANCE? THE PARENTS WOULD BE OLD, AND UNDER THE CIRCUMSTANCES, IN THE ABSENCE OF ANY DEFINITE INFORMATION AS TO THEIR LOCATION OR OTHER PHYSICAL CONSTRAINTS THAT MAY IMPEDE THEIR MOVEMENT, WE DO NOT THINK THAT ADVERSE INFERENCE AU TOMATICALLY FLOWS FROM THE FACT OF THEIR NON-PRODUCTION, AND THE AO OUGHT TO HAVE MADE PERTINENT INQUIRIES IN THIS REGARD, BEFORE DRAWING ANY ADVERSE INFERENCE. AGREEABLY, AN INFERENCE EITHER WAY COULD BE DRAWN, AND WE ARE INCLINED TO ACCEPT THE ASSESSEES VERSION, CONSIDERING IT TO BE A FIT CASE FOR ALLOWING IT A BENEFIT OF DOUBT. TOWARD THIS WE ARE GUIDED BY THE GUIDANCE ISSUED BY I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 8 THE APEX COURT IN THE CASE OF SAROJ AGGARWAL V. CIT (1985 156 ITR 497 (SC) IN THE FOLLOWING WORDS: ` FACTS MUST BE VIEWED IN NATURAL PERSPECTIVE, HAVING REGARD TO THE COMPULSIONS OF THE CIRCUMSTANCES OF THE CASE. WHERE IT IS POSSIBLE TO DRAW TWO INFERENCES FROM THE FACTS AND WHERE THERE IS NO EVIDENCE OF ANY DISHONEST OR IMPR OPER MOTIVE ON THE PART OF THE ASSESSEE, IT WOULD LEAD TO EQUITY AND JUSTICE. TOO HYPERTECHNICAL OR LEGALISTIC APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH M UST BE EQUITABLY INTERPRETATED AND JUSTLY ADMINISTERED . ALSO, IT IS TO BE BORNE IN MIND THAT THE SECTION US ES THE WORD MAY, INDICATING A DISCRETION TO BE EMPLOYED JUDICIOUSLY. WE, ACCORDIN GLY, DIRECT FOR THE ACCEPTANCE OF THIS SUM OF ` 1.50 LAKHS. WE DECIDE ACCORDINGLY. 5.7 THE FOURTH ITEM (AT SR. NO. 5), CONSIDERED UNAC CEPTABLE BY THE AO, IS FOR ` 1 LAKH, STATED TO BE RECEIVED BY THE ASSESSEES WIFE IN RES PECT OF HER FAMILY PROPERTY. THE SAME WAS AGAIN NOT ACCEPTED IN THE ABSENCE OF ANY EVIDEN CE LED BY THE ASSESSEE AS WELL AS NON- PRODUCTION OF THE WIFE, WHICH WE FIND TO BE STRANGE TO SAY THE LEAST. A PROPERTY DISPUTE, IN LIEU OF WHICH THE SAID AMOUNT IS STATED TO HAVE BEE N RECEIVED BY THE ASSESSEES WIFE FROM HER FAMILY, WOULD NORMALLY YIELD EVIDENCES IN RELAT ION THERETO. IN FACT, THE PAYER WOULD ONLY DEEM IT ESSENTIAL TO RECORD THE INCIDENTS TO E VIDENCE BOTH THE RESOLUTION OF DISPUTE, AS WELL AS THE PAYMENT TOWARD THE SAME, TO AVOID ANY D IFFERENCE ARISING IN ITS RESPECT IN FUTURE. FURTHER, THE WIFE, WHO CAN ONLY BE PRESUMED TO BE LIVING WITH THE ASSESSEE; RATHER, WHOSE NON-IMPLEADING (IN THE ASSESSMENT PROCEEDINGS ) STANDS OBJECTED TO BY THE ASSESSEE, ASSAILING THE VALIDITY OF THE PROCEEDINGS ON THAT SCORE, HAS NOT BEEN PRODUCED ON BEING CALLED UPON, AND WHOSE DEPOSITION WOULD DEFIN ITELY SHED LIGHT ON THE FACTUAL ASPECTS OF THE MATTER, ON WHICH THE ASSESSEE HAS AL SO NOT FURNISHED ANY EXPLANATION. UNDER THE CIRCUMSTANCES, THE ADDITION AS MADE IS FI RM IN LAW. WE DECIDE ACCORDINGLY. 5.8 THE FOURTH AND FINAL AMOUNT WHICH STANDS ADDED IS A LOAN OF ` 4 LAKHS FROM ONE, SHRI JOSE GEORGE, CLAIMED TO BE A RELATIVE. HIS STA TEMENT WAS RECORDED BY THE AO ON 07.11.2007, WHEREIN HE CONFIRMED THE LOAN, BUT DID NOT EXPLAIN THE SOURCE FROM WHICH THE I.T.A. NO. 258/COCH/2010 JACOB C. JOHN VS. ITO, KOLLAM 9 AMOUNT WAS ADVANCED. ACCORDINGLY, THERE BEING NO E VIDENCE ON RECORD TO PROVE THIS ASPECT OF THE LOAN (SHRI JOSE GEORGE), THE CREDIT W AS CONSIDERED UNEXPLAINED, AND ADDED. THE ASSESSEE, AS AFORE-NOTED, HAS OBJECTED TO THE NON-GRANT OF OPPORTUNITY FOR CROSS-EXAMINING THE LOANEE-DEPOSER. AS AFORE-STATE D, THE CREDITOR HAS ONLY CONFIRMED THE CREDIT, SO THAT THE ASSESSEE COULD NOT POSSIBLY BE PREJUDICED BY NON CROSS-EXAMINATION, EVEN AS THE FACT OF A REQUEST FOR/TOWARD THE SAME I S NOT CLEAR. IN ANY CASE, WE HAVE CLARIFIED THAT THERE IS NOTHING ADVERSE IN THE STAT EMENT FOR THE ASSESSEE TO CLAIM BEING AGGRIEVED. THE BASIS OF THE AOS NON-ACCEPTANCE IS THE ABSENCE OF ANY MATERIAL TO EXHIBIT THE CAPACITY OF THE CREDITOR, THE ONUS FOR WHICH IS SQUARELY ON THE ASSESSEE. THE ASSESSEE HAS, AGAIN, NOT REBUTTED THE FACTUAL FINDING OF NON -ESTABLISHMENT OF THE CREDITWORTHINESS, WHICH HE IS OBLIGED UNDER LAW TO DO AND, THEREFORE, WE FIND NO LEGAL INFIRMITY IN THE IMPUGNED ADDITION, WHICH, UNDER THESE CIRCUMSTANCES , THUS STANDS CONFIRMED. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 16TH DECEMBER, 2011 GJ COPY TO: 1. SHRI JACOB C.JOHN, KOCHUVEEDU, UMMANNOOR P.O.,KO TTARAKARA, KOLLAM. 2. THE INCOME TAX OFFICER, WARD-2, KOLLAM 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .