D.RamaDevi, CHENNAI V. ITO Business Ward II(3), CHENNAI

ITA 2624/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7805 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V NAGAPRASAD
• Keywords: Unexplained cash credit; Source of fund
• Section: 143(3); 143(1); 68

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.2624/CHNY/2018 / ASSESSMENT YEAR :2010-11 MS. D. RAMA DEVI, PLOT NO. 44/1, THIRD STREET VGP LAYOUT, INJAMBAKKAM, CHENNAI 600 115. [PAN:AASPR9611A] VS. THE INCOME TAX OFFICER, BUSINESS WARD II(3), CHENNAI 600 034. ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI V. NAGAPRASAD, C.A. / RESPONDENT BY : SHRI GURU BASHYAM, JCIT / DATE OF HEARING : 27.06.2019 /DATE OF PRONOUNCEMENT : 19.07.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 2(I/C), CHENNAI DATED 06.07.2018 RELEVANT TO THE ASSESSMENT YEAR 2010-11. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE RELATES TO CONFIRMATION OF ADDITION TOWARDS UNEXPLAINED CASH CREDIT MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 03.08.2010 ADMITTING TOTAL INCOME OF I.T.A. NO.2624/CHNY/18 2 .1,86,929/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. AGAINST SERVICE OF STATUTORY NOTICES, THE ASSESSEE FILED THE DETAILS CALLED FOR. AFTER VERIFICATION OF DETAILS FILED BY THE ASSESSEE AND CONSIDERING THE SUBMISSIONS AND OTHER DETAILS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT AND DETERMINED THE INCOME OF THE ASSESSEE AT .18,86,929/- AFTER MAKING ADDITION OF .17 LAKHS TREATING IT AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT AGAINST THE SALE OF LAND OF 2 ACRES, THE ADVANCE MONEY RECEIVED BY THE ASSESSEE WAS DEPOSITED IN THE BANK BY FILING CONFIRMATION FROM THE PURCHASERS. THE REVENUE RECORDS OF THE STATE GOVERNMENT CLEARLY ESTABLISHES THE POSSESSION OF THE LAND BY THE PURCHASER AND THE SAID FACT IS NOT DISPUTED BY THE DEPARTMENT SINCE THE ITO HAS VISITED PERSONALLY AND EXAMINED THE SAME AND HE HAS SUBMITTED A REPORT AND THE SAID REPORT WAS INCORPORATED IN THE ASSESSMENT ORDER SAYING THAT THE PURCHASERS ARE IN PERSONAL ENJOYMENT OF THE PROPERTY. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS CLEARLY ESTABLISHES THE SOURCE FOR HER DEPOSITS AND THEREFORE, PRAYED FOR DELETING THE ADDITION. I.T.A. NO.2624/CHNY/18 3 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE PURCHASERS HAVE NOT PROPERLY EXPLAINED THEIR SOURCES AND THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION IN THE HANDS OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW INCLUDING VARIOUS PAPER BOOKS FILED BY THE ASSESSEE, WHICH WAS ALSO FURNISHED BEFORE THE AUTHORITIES BELOW. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE IN ORDER TO SALE OF THE PROPERTY, THE ASSESSEE HAS RECEIVED ADVANCE AMOUNT OF .17 LAKHS FROM SHRI MEKA KRISHNAMURTHY AND SHRI MEKA SATHIS AND ALSO PRODUCED CONFIRMATION FROM THEM. IN ORDER TO VERIFY THE SAME COMMISSION UNDER SECTION 131(1)(D) OF THE ACT WAS ISSUED AND THE COMMISSION REPORT DATED 25.02.2013, IS PART OF THE ASSESSMENT ORDER IS REPRODUCED AS UNDER: SHRI MEKA KRISHNA MURTHY IS HAVING 2.24 ACRES OF LAND AT VAKKALAGADDA VILLAGE AND 3.38 ACRES OF LAND IN THE NAME OF HIS WIFE WHICH HE IS CULTIVATING. THEY GENERALLY RAISE PADDY AND SUGAR CANE IN SUCH FIELDS. WHEN HE WAS ASKED WHETHER HE HAS SOLD ANY LANDS, HE REPLIED THAT HE HAS SOLD 1.25 ACRES OF LAND OF HIS WIFE IN THE YEAR 2005- 2006 FOR A CONSIDERATION OF RS. 4.50 LAKHS PER ACRE AND ALSO SOLD 1.25 ACRES OF LAND IN THE NAME OF HIS SON SATISH FOR THE SAME CONSIDERATION AND THUS HE HAS SOLD 2.50 ACRES OF LAND FOR A CONSIDERATION OF RS.11,25,000/-. WHEN ASKED WHAT DID HE DO WITH SUCH MONEY HE REPLIED THAT IT WAS GIVEN FOR LOAN TO THE FELLOW FARMERS FOR SIMPLE INTEREST. FOR THE SPECIFIC QUESTION I.E., DID HE PURCHASED AY LAND FROM ANYBODY, HE REPLIED THAT HE HAS GIVEN ADVANCE OF RS. 17,00,000/- TO SMT. RAMADEVI OF CHENNAI (AT THE RATE OF RS. 10,00,000/- PER ACRE) AND BALANCE AMOUNT IS STILL PAYABLE TO HER AND HENCE REGISTRATION WAS NOT DONE. WHEN ASKED ABOUT THE SOURCES OF INCOME FOR SUCH AMOUNT, HE REPLIED THAT HE HAS MET THE SAME OUT OF THE SALE CONSIDERATION OF LAND SOLD DURING THE YEAR 2005-2006AN BALANCE AMOUNT OF HIS SAVINGS. SURPRISINGLY HIS BANK ACCOUNT DO NOT SHOW ANY DEPOSITS OF SUCH SALE I.T.A. NO.2624/CHNY/18 4 CONSIDERATION AND ALSO WITHDRAWALS OF AMOUNTS FOR THE PURPOSES OF GIVING ADVANCES TO SMT. RAMADEVI, HOWEVER, HE HAS CONFIRMED THAT HE HAS GIVEN ADVANCE OF RS. 17 LAKHS TO SMT. RAMADEVI AGAINST PURCHASE OF AGRICULTURAL LAND FROM HER. SMT RAMADEVI IS HIS BROTHER'S DAUGHTER. SIMILARLY SHRI SATISH ALSO REPLIED THEY THEY BOTH TOGETHER ADVANCED RS. 17 LAKHS TO HER OUT OF THE SALE CONSIDERATION AND PARTLY FROM THEIR SAVINGS. HIS BANK ACCOUNT ALSO DO NOT SHOW ANY DEPOSITS AND WITHDRAWALS FOR THIS PURPOSES. THE STATEMENTS ALONG WITH THE PROOF IE., COPIES OF PATTADAR PASS BOOKS AND ALSO THE COPIES OF THE BANK ACCOUNTS ARE ENCLOSED HEREWITH FOR YOUR PERUSAL. SIMILARLY I HAVE ALSO OBTAINED THE CERTIFICATE FROM THE THSILDAR, CHALLPALLI ABOUT THE LAND OWNED BUY SHRI MEKA KRISHNA MURHTY AND MEKA SATISH AND AS PER THE TAHSILDAR REPORT, AND AS PER THE ADANGAL REGISTER THY ENJOYERS FOR THE LAND SITUATED AT RS. NO.145/1 AND 145/2 AND 145/3 AND THE CROP YIELD WERE ESTIMATED AT 3,232 KGS OF PADDY PER EACH FASLI. THE LAND COST AS PER THE GOVERNMENT RATE IS RS. 3,00,000/ - AND MARKET VALUE IS RS. 10,00,000/-. THUS IT IS TO BE STATED THAT BOTH PERSONS HAVE NOT DENIED THAT THEY HAVE ADVANCED RS.17,00,000/ - TO SMT RAMADEVI, OF CHENNAI BUT HOWEVER THEY WERE NOT ABLE TO SHOW ANY EVIDENCE THAT THEY HAVE ADVANCED SUCH MONEY TO HER AND EVEN THE CREDIT WORTHINESS OF SUCH PERSONS COULD NOT BE ESTABLISHED EXCEPT THE FACT THEY HAVE SOLD CERTAIN LAND IN THE YEAR 2005-2006 AND MET THEIR LIABILITY IN THE YEAR 2009- 2010 OUT OF SUCH SALE CONSIDERATION. EVEN THIS TRANSACTION WAS NOT SUPPORTED BY ANY DEPOSIT AND WITHDRAWAL FROM THE BANK ACCOUNT. FINALLY IT CAN BE CONCLUDED THAT BOTH PERSONS EVEN THOUGH CONFIRMED THAT THEY ADVANCED MONEY TO SMT. RAMDEVI OF CHENNAI WHO HAPPENED TO BE THEIR RELATIVE BUT COULD NOT PRODUCE ANY EVIDENCE FOR THE CREDIT WORTHINESS AND ALSO FOR THE INSTANT TRANSACTION. 6. FROM THE ABOVE REPORT, IT IS CLEARLY EVIDENT THAT THE PRIVITY OF TRANSACTION WAS HELD BETWEEN CLOSE BLOOD RELATIVES. IN THIS CASE, THE ASSESSEE CAST THE ONUS LIES ON HER BY FURNISHING CONFIRMATION FROM THE PURCHASERS. BOTH THE PURCHASERS HAVE CONFIRMED HAVING MADE PAYMENT OF .17 LAKHS TO THE ASSESSEE FOR THE PURCHASE OF LAND. THOUGH THERE IS NO SALE DEED, ETC. THE LAND REVENUE RECORD SHOWS ENJOYMENT OF THE PROPERTY BY THE I.T.A. NO.2624/CHNY/18 5 PURCHASERS, WHICH WAS SOLD BY THE ASSESSEE. ON PERUSAL OF THE BANK STATEMENT OF THE ASSESSEE CLEARLY SHOWS THAT THE AMOUNT OF .17 LAKHS HAS BEEN RECEIVED AND DEPOSITED ON PIECE-MEAL BASIS BETWEEN 18.06.2009 TO 23.03.2010 AND IT IS NOT THE CASE OF THE DEPARTMENT THAT THE AMOUNT WAS PAID IN SINGLE PAYMENT AND DEPOSITED. 6.1 HOWEVER, THE ASSESSING OFFICER DOUBTED CREDITWORTHINESS OF THE PURCHASERS. WE HAVE ALSO GONE THROUGH THE DETAILED SWORN STATEMENT RECORDED FROM SHRI SATISH AS WELL AS SHRI KRISHNAMURTHY ON 21.01.2013 ON OATH. IN THE SWORN STATEMENT, BOTH THE PURCHASERS (FATHER & SON) HAVE ADMITTED THAT THEY TOGETHER CULTIVATE 30 ACRES OF LAND JOINTLY ON LEASE SINCE LAST TEN YEARS BESIDE SHRI SATISH OWNING 2.25 ACRES OF AGRICULTURAL LAND (WET LAND) AND 2.24 ACRES (WET LAND) BY SHRI KRISHNAMURTHY AND 3.38 ACRES OF WET LAND BY HIS WIFE SMT. SEETHAMAHALAKSHMI, WHEREIN, PADDY AND SUGAR CANE CROPS ARE RAISED. MOREOVER, BOTH THE PURCHASERS HAVE ADMITTED UNDER OATH THAT THEY HAVE MONEY LENDING AMONG THE FARMERS AND COLLECTING SIMPLE INTEREST. BOTH THE PURCHASERS HAVE OPERATED BANK ACCOUNT FOR THE PURPOSE OF GETTING SALE PROCEEDS OF SUGARCANE FROM THE SUGAR FACTORY AS WELL AS TAKING LOAN, ETC. ADMITTEDLY, THERE IS NO BANK IN AND AROUND THE VILLAGE OF THE PURCHASER EXCEPT AT CHALLAPALLI, WHICH IS NEARLY 5 KMS FROM THEIR VILLAGE. IN THIS CASE, THE ASSESSEE DISCHARGED THE ONUS CAST UPON HER. MOREOVER, THE SOURCE OF SOURCE, I.E., THE RECEIPT OF PPAYMENT OF .17 LAKHS WAS EXPLAINED I.T.A. NO.2624/CHNY/18 6 UNDER OATH BY THE PURCHASERS AND MOREOVER, THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD AS UNDISCLOSED INCOME OF THE ASSESSEE. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES, WE DELETE THE ADDITION MADE UNDER SECTION 68 OF THE ACT. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 19 TH JULY, 2019 AT CHENNAI. SD/ - SD/ - (S. JAYARAMAN) ACCOUNTANT MEMB ER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 19.07.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.