ITO, CHENNAI V. M.Selladurai, CHENNAI

ITA 2949/CHNY/2014

• Counselvise Citation: 294921714 RSA 2014
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 07-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2014
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: G BHASKAR
• Keywords: Source of fund
• Section: 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2949 /MDS./2014 ( !' #' / ASSESSMENT YEAR :2010-11) THE INCOME TAX OFFICER, NON-CORPORATE WARD-19(3), WANAPARTHY BLOCK,4 TH FLOOR, MADRAS 600 034. VS. SHRI M.SELLADURAI, 41/19,THANDAVARAYA GRAMMANI ST., TONDIARPET, CHENNAI 600 001. PAN BJWPS 5609 B ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : DR.B.NISCHAL, JCIT, D.R ()$% & ' / RESPONDENT BY : MR.G.BHASKAR,ADVOCATE * + & ,- / DATE OF HEARING : 07.09.2015 .# & ,- /DATE OF PRONOUNCEMENT : 06.11.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-II, CHENN AI DATED ITA NO.2949 /MDS/2014 2 31.07.2014 IN ITA NO.1696/2013-14 PASSED UNDER SEC .143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED THREE ELABORATE GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO DELETED THE ADDITION OF ` 50,15,000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE ASSESSES BA NK ACCOUNT U/S.68 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL, A RETIRED STATE GOVERNMENT EMPLOYEE OF FORENSIC SCIENCES DEPARTMENT, FILED HIS RETURN OF INCOME ON 28.07.2010 FOR THE ASSESSMENT YEAR 2010-11 ADMITTING HIS TOTAL INCOME AS ` 1,79,490/-. SUBSEQUENTLY THE CASE WAS TAKEN FOR SCRUTINY THROUG H CASS AND THE ASSESSMENT U/S.143(3) WAS COMPLETED ON 21.03.2013 W HEREIN THE THE LD. ASSESSING OFFICER MADE ADDITION OF ` 50,15,000/- BEING THE CASH DEPOSIT IN THE BANK ACCOUNT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO FURNISH THE BANK STATEMENT IN RESPECT OF SAVINGS BANK ACCOUNT HELD JOINTLY BY HIM WITH SRI M.RAJA MARRISO N IN AXIS BANK LTD. ITA NO.2949 /MDS/2014 3 ON PERUSAL OF THE BANK STATEMENT IT WAS FOUND THERE WERE CASH DEPOSITS TO THE TUNE OF ` 51,55,000/- DURING THE FINANCIAL YEAR 2009-10. IT WAS EXPLAINED BY THE ASSESSEE THAT HE OWNED A HO USING SITE IN TONDIARPET, CHENNAI OF 1250 SQ. FT IN THE JOINT NAM E WITH HIS WIFE MRS.S.INBAVALLI WHICH HE STATED TO HAVE PURCHASED O N 02.03.2005 FOR ` 4/- LAKHS. THE ASSESSEE AND HIS WIFE MS.S.INBAVALL I DECIDED TO PROMOTE A RESIDENTIAL FLAT IN THE AFORESAID PROPERT Y AND FOR THAT PURPOSE OPENED A SAVINGS BANK ACCOUNT WITH SRI M.RA JA MARRISON ON 18.06.2009. THE ADVANCE RECEIVED FOR THE CONSTRUCTI ON OF THE FLATS BY THE BUYERS OF THE FLAT WAS DEPOSITED IN THAT ACCOUN T. IN ALL FOUR FLATS WERE PROPOSED TO BE CONSTRUCTED @ RS.4000 PER SQ.FT . SINCE THE APPROVAL OF THE FLAT COULD NOT BE OBTAINED, THE AMO UNTS RECEIVED FROM THE BUYERS WERE SUBSEQUENTLY RETURNED. CONFIRMATION LETTERS FROM ALL THE PROPOSED BUYERS OF THE FLATS VIZ. I) MR.V. SENT HIL KUMAR, II) J. MUTHU MADESH III) MR.G.KAMAL KANNAN, IV) L.KARTHIK WERE ALSO PRODUCED BY THE ASSESSEE BEFORE THE LD. ASSESSING O FFICER. BUT THE LD. ASSESSING OFFICER REJECTED THE SUBMISSIONS OF T HE ASSESSEE AND MADE ADDITION OF RS.50,15,000/-BEING THE CASH DEPOS ITED IN THE BANK ACCOUNT DUE TO THE FOLLOWING REASONS:- ITA NO.2949 /MDS/2014 4 1. THE CONFIRMATION LETTER FROM THE FOUR PERSONS ADDRESSED TO THE ASSESSEE CLEARLY STATE THAT THEY HAD ADVANCED THE S UM OF RS.80 LAKHS TO THE ASSESSEE AND RECEIVED BACK FROM HIM. THE CONFIR MATION LETTERS WERE NOT ADDRESSED TO HIS WIFE AND THERE WAS NO MENTION ABOUT ANY SUM BEING GIVEN TO HIS WIFE. THE ASSESSEE HAD NOT FURNISHED A NY SUBSTANTIAL EVIDENCE FOR THE SAVINGS OF RS.10 LAKHS WHICH HAD B EEN DEPOSITED DURING THE YEAR AS PER HIS SUBMISSION ABOVE WHILE HIS ACTU AL INCOME IS ONLY RS.1.80 LAKHS AND HE IS THE ONLY BREAD WINNER FOR T HE FAMILY. 2. THE ASSESSEE HAD ALSO FURNISHED A COPY OF THE BA NK STATEMENT OF HIS WIFE MRS.S.INBAVALLI WHO HELD THE ACCOUNT JOINTLY WITH M .RAJAMARRISON IN AXIS BANK LTD., WITH THE ACCOUNT NO. 082010100484411. EX AMINATION OF THE BANK STATEMENT OF THE ASSESSEES WIFE REVEALS THAT THERE WAS CASH DEPOSIT OF RS.30,50,000/- ONLY WHICH LEAVES A SHORT FALL OF RS.9.5 LAKHS. 3. IT IS CLEARLY EVIDENT THAT THE SUBMISSIONS BY T HE ASSESSEE AND THE ACTUAL FACTS CONTRADICT EACH OTHER. THE ASSESSEE AS WELL A S THE CONFIRMATION LETTERS STATE THAT THE ENTIRE SUM OF RS.80 LAKHS WA S WITHDRAWN AND RETURNED DURING THE YEAR ITSELF WHEREAS THE BANK ST ATEMENT OF THE ASSESSEE REVEALS THAT AS AGAINST THE DEPOSIT OF RS. 51.55 LAKHS, A SUM OF RS.38.60 LAKHS ALONE HAD BEEN WITHDRAWN AND SIMILAR LY THE BANK STATEMENT OF ASSESSEES WIFE REVEALS THAT AS AGAINS T THE DEPOSIT OF RS.30.50 LAKHS, A SUM OF RS. 3.60 LAKHS ALONE WAS W ITHDRAWN DURING THE YEAR. 4. IN RESPONSE TO THE SUMMONS U/S 131, SHRI. G.VE NKATESH, FCA., THE AUTHORIZED REPRESENTATIVE OF SRI.V.SENTHILKUMAR, SR I. IMUTHU MADESH, SRI. G.KAMALAKANNAN & SRI. L.KARTHIK APPEARED AND FURNIS HED LETTERS FROM THE ABOVE PERSONS ALONGWITH POA. THE REPLIES FROM T HE FOUR PERSONS ITA NO.2949 /MDS/2014 5 SEEM TO BE VERY SIMILAR. ALL OF THEM HAD STATED THA T THEY HAD ADVANCED IT FROM THEIR OWN SOURCES AND PARENTAL SOURCES AND THE Y HAD NOT FLIED RETURNS OF INCOME AS THEIR INCOME HAD NOT EXCEEDED THE TAXABLE LIMITS IN ANY OF THE YEAR. NO DOCUMENTARY EVIDENCE WAS FILED SUCH AS THE AGREEMENT COPY, COPY OF RECEIPT FOR THE ADVANCE GIV EN, SOURCE FOR SUCH ADVANCE ETC. 5. THE ASSESSEE HAD NOT FURNISHED COPY OF THE AGREE MENTS THAT HE AND HIS WIFE HAD ENTERED WITH THE FOUR PERSONS WHO THE ASSE SSEE STATES HAD ADVANCED A SUM OF RS.20 IAKHS EACH. SIMILARLY, THE ASSESSEE HAD NOT PRODUCED COPIES OF THE RECEIPTS IF ANY GIVEN TO THE INDIVIDUALS FOR THE ADVANCE RECEIVED AND EVIDENCE FOR REPAYMENT OF SUCH SUM. 6. THE ASSESSEE FAILED TO EXPLAIN WHY SUCH A HUGE S UM HAD BEEN RECEIVED IN CASH AND NOT IN CHEQUE/DD/E-TRANSFER AND WHY THE SAID SUM HAD ALSO BEEN RETURNED IN CASH AND NOT IN CHEQUE/DD/E-TRANSF ER. NO URGENCY HAD BEEN ESTABLISHED BY THE ASSESSEEE IN RECEIVING OR R EPAYING THE SUM IN CASH. 7. THE SUBMISSIONS BY THE ASSESSEE AND THE ACTUAL F ACTS CONTRADICT EACH OTHER. THE ASSESSEE AS WELL AS THE CONFIRMATION LET TERS STATE THAT THE ENTIRE SUM OF RS.80 LAKHS WAS WITHDRAWN AND RETURNE D DURING THE YEAR ITSELF WHEREAS THE BANK STATEMENT OF THE ASSESSEE R EVEALS THAT AS AGAINST THE DEPOSIT OF RS.51.55 LAKHS, A SUM OF RS.38.60 LA KHS ALONE HAD BEEN WITHDRAWN AND SIMILARLY THE BANK STATEMENT OF ASSES SEES WIFE REVEALS THAT AS AGAINST THE DEPOSIT OF RS.30.50 LAKHS, A SU M OF RS. 3.60 LAKHS ALONE WAS WITHDRAWN DURING THE YEAR. THE ASSESSEES WIFE HAD WITHDRAWN DURING THE MONTHS OF APRIL AND MAY TO THE TUNE OF RS.26,48,595/- WHEREAS THE ASSESSEES LETTER AS WEL L AS THE CONFIRMATION ITA NO.2949 /MDS/2014 6 LETTERS STATE THAT THE ENTIRE SUM HAD BEEN WITHDRAW N AND REPAID BY MARCH 2010. NEITHER THE ASSESSEE NOR THE PERSONS WHO HAD ADVANCED THE SUM HAD GIVEN DETAILED WORKING OF DATE WISE RECEIPT AND DATE WISE PAYMENT AND FURNISHED THE COPIES OF RECEIPTS INSPITE OF THE SEVERAL OPPORTUNITIES GIVEN. 8. THE PROPOSED CONSTRUCTION AND SALE OF FLATS OF 1 000 SQ.FT. EACH AT AN ESTIMATED SALE PRICE OF RS.4000/- PER SQ.FT. WORKS OUT TO RS.40 IAKHS. THE QUESTION WHETHER ANYONE WOULD MAKE AN ADVANCE OF 50 % OF THE TOTAL COST OF THE FLAT TO A NOVICE BUILDER EVEN BEFORE TH E PLAN APPROVAL IS OBTAINED OR PRIOR TO THE COMMENCEMENT OF CONSTRUCTI ON WITHOUT SECURING THEIR STAKE BY WAY OF SOME DOCUMENTATION REMAINS UN ANSWERED. THE EXAMINATION OF THE COPY OF THE DOCUMENT OF THE SITE SHOWS THE SITE BEING BOUNDED ON ALL FOUR SIDES BY PROPERTIES OWNED BY OT HER INDIVIDUALS AND HAS NO LANE OR ROAD ON ANYONE OF THE SIDE. THE ASSE SSEES AR HAD STATED THAT ON THE NORTH OF THE SITE THERE EXISTS A NARROW LANE WHICH LEADS TO THE SITE. CONSIDERING THE FACT THAT THE SITE OF PROPOSED CONSTRUCTION FALLS WITHIN THE CMDA LIMITS, THE RULES REGARDING T HE FSI PERMISSIBLE, THE NARROW FRONTAGE ON THE ROAD ETC., THE PROPOSAL OF C ONSTRUCTION OF 4000 SQ.FT. AREA IN FOUR FLOORS ON AN 1250 SQ.FT PLOT AP PEARS TO BE A PIECE OF IMAGINATION RATHER THAN PRACTICALLY VIABLE. AS PER THE DEVELOPMENT CONTROL RULES, 2002 FOR CHENNAI METROPOLITAN AREA, NO DEVELOPMENT SHALL BE MADE UNLESS A SITE IS APPROVED FOR THAT DEVELOPM ENT BY THE AUTHORITY(RULE. 3(C). RULE 5(1) STATES THAT THERE M UST BE MINIMUM FRONT SET BACK OF 1.5 METERES AND 1.5 METERS AS REAR SET BACK AND THE MAXIMUM HEIGHT MAY BE 1 METER FOR EVERY 30 CENTIMET ERS BY WHICH THE BUILDING I SET BACK FROM THE STREET OR 15 METERS WH ICHEVER IS LESS EXCEPT IN AREAS SET SPECIFICALLY FOR MULTISTOREYED BUILDIN GS. THE MAXIMUM PLOT COVERAGE IS ONLY 65%. HENCE, THE PROPOSAL FOR CONST RUCTION OF 4 FLATS OF ITA NO.2949 /MDS/2014 7 1000 SQ.FT.(81%) IN A SITE AREA OF 1250 SQFT. J NOT AT ALL FEASIBLE AND THE PERSONS ADVANCING 50% OF THE TOTAL COST SEEMS TO BE UNRASONABLE, AND UNACCEPTABLE AND UNSATISFACTORY. 9. THE REPLIES OF THE FOUR PERSONS IN RESPONSE TO T HE SUMMONS U/S 131 SEEM TO BE VERY SIMILAR. ALL OF THEM HAD STATED THA T THEY HAD ADVANCED IT FROM THEIR OWN SOURCES AND PARENTAL SOURCES AND NEI THER THEY NOR THEIR PARENTS HAD FILED THE RETURNS OF INCOME AS THEIR IN COME HAD NOT EXCEEDED THE TAXABLE LIMITS IN ANY OF THE YEAR. NO SUBSTANTIAL EVIDENCE HAD BEEN FURNISHED FOR RECEIVING THE ADVANCE OR RET URN OF THE SAID ADVANCE. THE CREDIBILITY OF THE STATEMENTS FILED BY THESE INDIVIDUALS ARE IN DOUBT FOR THE FOLLOWING REASONS: I) NO RETURN OF INCOME FILED. II) THE TRANSACTIONS WERE IN CASH III) NO RECEIPT TAKEN FROM THE ASSESSEE FOR THE ADV ANCE IV) NO STATEMENT OF TOTAL INCOME PROVING THEIR CAPA CITY TO ADVANCE RS.20 LAKHS IN CASH. V) NO AGREEMENT HAD BEEN ENTERED INTO AS PER THE ST ATEMENT OF SRLN.RAJA MARRISON AS RECORDED ABOVE. 10. THE ASSESSEE VIDE HIS LETTER DATED 20/01/13 HAD STATED THAT OUT OF THE ADVANCE OF RS.80 LAKHS FROM THE FOUR PERSONS, ONLY RS. 40 LAKHS WAS RECEIV BY HIM AND THE BALANCE SUM OF RS.40 LAKHS WA S RECEIVED BY HIS WIFE WHEREAS THE MEMORANDUM OF UNDERSTANDING FURNIS HED BY THE ASSESSEE WAS ONLY BETWEEN THE ASSESSEE AND SRI N.RA JAMARRISON. BUT THERE EXISTS 2 SEPARATE JOINT ACCOUNTS BETWEEN THE ASSESSEE AND SRI N.RAJA MARRISON AND MS. INBAVALLI AND SRI N.RAJA MA RRISON. 11. THE ASSESSEE VIDE HIS REPLY SUBMITTED ON 19/03/ 13 HAD STATED THAT SRI.N.RAJA MARRISON THE JOINT ACCOUNT HOLDER HAD AG REED TO DECLARE 8% OF ITA NO.2949 /MDS/2014 8 THE ABOVE RECEIPTS IN HIS PERSONAL ASSESSMENT FOR A Y 2010-11. THIS IS NOT ACCEPTABLE FOR THE FOLLOWING REASONS:- (I) AS PER THE STATEMENT RECORDED, SRI.N.RAJA MARRI SON NEITHER BY EDUCATIONAL QUALIFICATION NOR BY EXPERIENCE IS IN T HE BUSINESS OF CIVIL CONSTRUCTION. (II) AS PER SEC. 44AD, THE GROSS RECEIPTS SHOULD NO T EXCEED RS.40 LAKHS WHEREAS THE GROSS RECEIPT IN THE INSTANT CASE IS RS .80 LAKHS DURING THE FY. 2009-10. (III) SRI.N.RAJA MARRISON HAD STATED IN THE STATEME NT RECORDED THAT HE HAD NOT RECEIVED ANY CONSIDERATION AND THE SITE DOES NO T BELONG TO HIM. 5. ON APPEAL, THE LD. CIT (A) DELETED THE ADDITION BY OBSERVING AS UNDER:- 4.1.4 IT IS ALSO IMPORTANT TO MENTION HERE THAT THE ASSESSEEIS AN INDIVIDUAL AND HAS NO BUSINESS ACTIVITIES AS SUCH. THERE WERE NO I NVESTMENTS/PURCHASES MADE BY THE ASSESSEE DURING THE FINANCIAL YEAR 2009-10, AT- LEAST TO THE KNOWLEDGE OF THE REVENUE. IN SUCH A CASE, THERE WAS NO NEED FOR THE ASSESSEE TO BORROW MONEY FROM OTHERS OR BRING ANY AMOUNT INTO THE BANK ACCOUNTS. FURTHER AS COULD BE SEEN FROM THE ABOVE BANK ACCOUNT, THE CASH DEPOSITS WERE MADE BETWEEN JUNE 2009 & SEPTEMBER 2009. THE MONEY SO DEPOSITED WAS NOT USED BY THE ASSESSEE IN ANY FORM FOR ANY PURPOSE. THE MONEY WAS ALL ALONG REMAINING IN THE BANK ACCOUNT TILL IT WAS FINALLY WITHDRAWN AND USED FOR REPAYING THE SAID FO UR PROSPECTIVE BUYERS IN MARCH 2010 THIS FACT ALSO CLEARLY SHOWS THAT THE ABOVE BA NK ACCOUNT IN AXIS BANK IS A ITA NO.2949 /MDS/2014 9 SPECIAL PURPOSE ACCOUNT MEANT FOR THE PROPOSED JO INT DEVELOPMENT. HOWEVER, AS THE PROJECT COULD MATERIALIZE THE ASSESSEE AND/OR S HRI N RAJA MARRISON WITHDREW THE AMOUNTS AND USED REPAYMENTS OF THE ADVANCES REC EIVED. THUS THE ASSESSEES JOINT BANK ACCOUNT WITH SHRI N RAJA MARRISON SHOWED A BALANCE OF RS.43,405/- ONLY AS ON 3 1.03.2010. IN THE CASE OF THE JOINT AC COUNT BETWEEN SHN N RANA MOARRISON AND ASSESSEES WIFE, THE AMOUNT WERE ALSO WITHDRAWN AND REPAID TO THE PROSPECTIVE BUYERS BUT A LITTLE LATTER IN APRIL/ MA Y 2010. HENCE THE JOINT ACCOUNT SHOWED SOME BALANCES IN THAT ACCOUNT. 4.15 AS MENTIONED ABOVE, THE ASSESSEE IS A RETIRED GOVERNMENT EMPLOYEE HE AND HIS WIFE OWNED THE ABOVE RESIDENTIAL SITE WHICH IS OF SIZE JUST 1250 SQ.FT. ONLY. IN SUCH PLOTS PEOPLE NORMALLY CONSTRUCT UP TO FOUR FLO ORS AND SMCE THE SIZE IS ONLY 1250 SQ FT, ONE RESIDENTIAL UNIT IS POSSIBLE IN EAC H FLOOR. THEREFORE THE ASSESSEES CLAIM OF FOUR FLATS PROPOSED TO BE CONSTRUCTED AND THEIR PROPOSED SALE LOOKS GENUINE. FURTHER, TONDIARPET IS ON THE NORTHERN OUT SKIRTS OF CHENNAI WHERE MOSTLY MIDDLE CLASS AND LOWER INCOME GROUP PEOPLE RESIDE. HENCE PEOPLE PREFER SMALL HOUSES (FLATS). IN THIS TYPE AREAS ONLY KNOWN PERSO NS BUY THE HOUSES AND AMOUNTS PAID BY WAY ADVANCES SOMETIMES WILL BE VERY HIGH, A MOUNTING TO ALMOST THE TOTAL VALUE, DEPENDING UPON THE SITUATION. AS ALL THE PER SONS ARE KWON TO EACH OTHER, EVERYTHING GOES BY TRUST RATHER THAN WRITTEN AGREEM ENTS. HENCE THE ADVANCES RECEIVED IN SUCH CASES CANNOT EQUATE WITH THE COMME RCIAL PRACTICES. ITA NO.2949 /MDS/2014 10 4.1.6 FURTHER, IN THE ABOVE TYPES OF SITUATIONS THE DOCUMENTS ARE NORMALLY PREPARED ONLY WHEN THE TRANSACTIONS FINALLY MATERIALIZE. IN THE PRESENT CASE, SINCE THE PROPOSED CONSTRUCTION DID NOT MATERIAL AND THE ENTI RE AMOUNT WAS RETURNED, THE ASSESSEES CLAIM THAT NO DOCUMENTS WERE MAINTAINED, CANNOT BE CONSIDERED AS NON- GENUINE. 4.1.7 AS MENTIONED EARLIER, TONDIARPET IS THE PLACE OF THE MIDDLE CLASS AND LOWER INCOME PEOPLE. HENCE MOST OF THE RESIDENTS OF THE A REA WILL NOT BE HAVING TAXABLE INCOMES. HENCE THE MERE FACT THAT THE PROSPECTIVE B UYERS OF THE FLATS ARE NOT ASSESSED TO INCOME TAX, CANNOT TAKEN AS AN YARDSTIC K TO DISMISS THE ASSESSEES CLAIMS. THE NEXT OBSERVATION OF THE ASSESSING OFFIC ER IS THAT SHRI N RAJA MARRISON, THE PROPOSED JOINT DEVELOPER, IS NEITHER QUALIFIED NOR EXPERIENCED IN THE CONSTRUCTION ACTIVITY. FOR SMALL CONSTRUCTIONS, LIK E THE PRESENT CASE, NO EXPERIENCE/QUALIFICATION IS REQUIRED. HENCE NO ADVE RSE INFERENCE CAN BE DRAWN IN THIS REGARD. 4.1.8 IT IS ALSO IMPORTANT TO MENTION HERE THAT SHR I N RAJA MARRISON, THE PROPOSED JOINT DEVELOPER, IS ASSESSED TO TAX. DURING THE COU RSE OF HIS ASSESSMENT PROCEEDINGS, ESPECIALLY WHEN HIS ASSESSING OFFICER EXAMINED AND PROBED INTO THE ABOVE JOINT DEVELOPMENT PROCESS AND THE CASH DEPOSI TS OF RS 80 LAKHS M TO THE ABOVE JOINT BANK ACCOUNTS, HAS CLEARLY AND CATEGORI CALLY CONFIRMED THE ABOVE PROPOSED JOINT DEVELOPMENT AGREEMENT WITH THE INSTA NT ASSESSEE (AND ASSESSEES WIFE) AND THE RECEIPT OF ADVANCES OF RS.20 LAKHS EA CH FROM FOUR PROSPECTIVE BUYERS. FURTHER, SHRI N RAJA MARRISON ALSO ACCEPTED THE ABO VE ADVANCES OF RS.80 LAKHS AS ADVANCE RECEIPTS OF HIS BUSINESS (CONSTRUCTION) ACT IVITY AND ESTIMATED INCOME ITA NO.2949 /MDS/2014 11 THEREON @ 8% AND OFFERED TO TAX. THIS FACT ALSO PRO VES THAT THE ASSESSEES CLAIM OF RECEIPT ADVANCES OF RS.20 LAKHS EACH FROM FOUR PROS PECTIVE BUYERS AND THEIR DEPOSITS IN TO THE BANK ACCOUNT IS GENUINE. 4.1.9 IN VIEW OF THE ABOVE REASONS, THE SOURCES OF INCOME FOR THE ABOVE CASH DEPOSITS INTO THE ASSESSEES JOINT BANK ACCOUNT IS THE ADVANCES RECEIVED FROM THE PROSPECTIVE BUYERS OF THE PROPOSED CONSTRUCTION. TH EREFORE, THE ADDITION OF RS.50, 15,000/- MADE BY THE ASSESSING OFFICER, U/S.68 OF T HE ACT, IS NOT JUSTIFIED AND DELETED. THE ASSESSEE SUCCEEDS IN THIS REGARD. 6. THE LD. D.R VEHEMENTLY ARGUED IN SUPPORT OF THE ORDER OF THE LD. ASSESSING OFFICER WHILE AS LD. A.R. RELIED ON T HE ORDER OF THE LD. CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE IT IS EVIDENT THAT THE ASSESSEE HAD RECEIVED CASH FROM PROPOSED B UYERS OF THE FLAT AND HE HAS ALSO SUBMITTED CONFIRMATION STATEMENT FR OM THEM. SINCE THE APPROVAL OF THE CONSTRUCTION COULD NOT BE OBTAI NED, THE ASSESSEE HAS RETURNED THE AMOUNT RECEIVED. FURTHER, LD. CIT (A) HAS RIGHTLY OBSERVED THAT THE FOLLOWING FACTS:- ITA NO.2949 /MDS/2014 12 I) THE ASSESSEE IS AN INDIVIDUAL AND HAS NO BUSINE SS ACTIVITIES. II) THE MONEY DEPOSITED IN THE BANK A/C WAS NOT UT ILIZED BY THE ASSESSEE IN ANY MANNER. III) SUBSEQUENTLY THE CASH DEPOSITED IN THE BANK W ERE REFUNDED TO THE PROSPECTIVE BUYERS OF THE FLATS. IV) THE JOINT DEVELOPER SRI M.RAJA MARRISON ALSO CO NFIRMED TO THE TRANSACTIONS. FURTHER, THE LD. ASSESSING OFFICER HAD ARRIVED AT T HE DECISION TO MAKE ADDITION IN THE HANDS OF THE ASSESSEE BECAUSE ALL T HE 4 PROSPECTIVE BUYERS HAD NOT FILED THE RETURN OF INCOME AND SUBST ANTIATED THEIR SOURCES OF INCOME FOR THE AMOUNT ADVANCED TO THE AS SESSEE. WE FAILED TO UNDERSTAND AS TO WHY THE LD. ASSESSING OF FICER WANTS TO MAKE ADDITION IN THE HANDS OF THE ASSESSEE WHEN ALL THE FOUR PROSPECTIVE BUYERS HAVE CONFIRMED THAT THEY ADVANCE D THE CASH TO THE ASSESSEE. FAILURE ON THE PART OF THE BUYERS OF THE FLAT TO ESTABLISH THEIR SOURCE OF INCOME CANNOT BE MADE AS THE REASON TO MAKE ADDITION IN THE HANDS OF THE ASSESSEE WITHOUT OUT E XAMINING THEM WHEN THEY THEMSELVES HAD ADMITTED FOR HAVING ADVANC ED THE AMOUNT ITA NO.2949 /MDS/2014 13 TO THE ASSESSEE. CONSIDERING THE FINDINGS OF THE L D. CIT (A) AND HIS DECISION AND PERUSING THE FACTS AND CIRCUMSTANCES O F THE CASE AND FURTHER BASED ON OUR DISCUSSION HEREINABOVE, WE ARE OF THE OPINION THAT THE LD. CIT (A)S ORDER IS JUDICIOUS AND APPRO PRIATE AND HENCE, WE RESTRAINED FROM INTERFERING WITH HIS ORDER. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 06 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 06 TH NOVEMBER, 2015 . K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF