Sri.P.A.Abraham, Kottayam V. The ITO, Kottayam

ITA 319/COCH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81361 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Assessee Lawyers: GOVINDAN E P
• Keywords: Gift; Opportunity of being heard; Reasonable cause

Judgement Text

ITA NO . 319/COCH/2014 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI N.R.S. GANESAN, JM & CHANDRA POOJARI , AM ITA NO . 319/COCH/2014 (ASST YEAR 2009 - 10 ) SHRI P ABRAHAM C/O GOVINDAN EP, ADVOCATE 1S FLOOR - KHADEEJA BUILDINGS NORTH RLY STN COCHIN 682 01 8 VS THE INCOME TAX OFFICER WARD 1 KOTTAYAM ( APPELLANT) (RESPONDENT) PAN NO. ACMPA 4566 F ASSESSEE BY SHRI GOVINDAN E P REVENUE BY SHRI K K JOHN, SR DR DATE OF HEARING 28 TH OCT 2014 DATE OF PRONOUNCEMENT 14 /11/ 2014 OR D ER PER CHANDRA POOJARI , AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20.2.2014 OF THE CIT(A), KOCHI AND ITS RELATES TO THE AY 2009 - 10. 2 THE ASSESSEE RAISED A GROUND WITH REGARD TO TREATING THE GIFT S OF RS. 7,15,000/ - FR OM ASSESSEES FATHER AND RS. 2 LACS FROM HIS BROTHER AS UNEXPLAINED INCOME . 3 THERE WAS A DELAY OF 4 1 DAYS IN FILING THE APPEAL. THE ASSESSEE FILED CONDONATION PETITION ACCOMPANIED BY AN AFFIDAVIT SEEKING CONDONATION OF ITA NO . 319/COCH/2014 2 DELAY ON THE REASON THAT THE ASSESS EE WAS FALLEN SICK DURING THE PERIOD AND THERE WAS A BONAFIDE AND REASONABLE CAUSE IN FILING THE APPEAL BELATEDLY. 4 WE HAVE HEARD THE PARTIES ON THE CONDONATION PETITION. WE FIND THAT THERE IS A REASONABLE CA U SE IN FILING THE APPEAL BELATEDLY. ACCORDING LY, WE ADMIT THE APPEAL FOR ADJUDICATION. 5 THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS MADE SEVERAL CASH DEPOSITS INTO HIS BANK ACCOUNT IN ORIENTAL BANK AND ICICI BANK. THE ASSESSEE EXPLAINED THE CASH DEPOSITS BY STATING THAT THE ASSESSEE RECEIV ED GIFTS OF RS. 7,15,000/ - FROM HIS FATHER AND RS. 2 LACS FROM HIS BROTHER. THE AO DID NOT ACCEPT THE EXPLANATION OFFERED BY THE ASSESSEE AND ACCORDINGLY TREATED THE SAME AS UNEXPLAINED AND BROUGHT THE SAME INTO TAXATION. 5.1 ON APPEAL BEFORE THE CIT( A), THE ASSESSEE OFFERED THE SAME EXPLANATION AS MADE BEFORE THE AO. THE CIT(A) SOUGHT REMAND REPORT FROM THE AO AND AFTER CONFRONTING THE REMAND REPORT TO THE ASSESSEE, THE CIT(A) CONFIRMED THE ORDER OF THE AO ON THIS ISSUE, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 6 THE LD AR SUBMITTED THAT THE ALLEGATIONS CONTAINED IN THE REVISED ASSESSMENT ORDER WAS NOT TRUE AS THE ASSESSEE HAS NOT RECEIVED ANY UNAUTHORIZED INCOME AS ALLEGED BY THE DEPARTMENT. THE LD AR SUBMITTED THAT ITA NO . 319/COCH/2014 3 THE ASSESSEE HAS RECEI VED A GIFT FROM HIS FATHER WHO WAS ALSO AN ASSESSEE UNDER THE ACT DURING THE RELEVANT ACCOUNTING YEAR. IT WAS SUBMITTED THAT THE AMOUNT WAS GIFTED BY THE FATHER OF THE ASSESSEE AFTER WITHDRAWING THE SAME FROM HIS ACCOUNTS IN INDIA BANK AND AXIS BANK. IT WAS ALSO SUBMITTED THAT A SUM OF RS. 2 LACS WAS ALSO RECEIVED FROM THE BROTHER OF THE ASSESSEE. THE LD AR SUBMITTED THAT THE PROPERTY JOINTLY OWNED BY THE ASSESSEE AND HIS BROTHER WERE SOLD FOR A CONSIDERATION OF RS. 4 LACS. THE NECESSARY CONFIRMATION LET TER WITH REGARD TO THE GIFT GIVEN BY THE FATHER LATE SRI ABRAHAM ITTY WAS OBTAINED FROM THE MOTHER OF THE ASSESSEE. IT WAS SUBMITTED THAT SRI ABRAHAM ITTY EXPIRED ON 23.2.2009. IT WAS FURTHER SUBMITTED THAT LATE SRI ABRAHAM ITTY AND THE MOTHER OF THE ASSES SEE SMT SOMAJA ABRAHAM, WERE JOINTLY HAVING THE BANK ACCOUNT WITH INDIAN BANK KOTTAYAM AND AXIS BANK. THE NECESSARY CONFIRMATION LETTER FROM SRI ABRAHAM CHERIAN, BROTHER OF THE ASSESSEE WAS ALSO SUBMITTED TO THE AO. THE LD AR SUBMITTED THAT THE ASSESSEE L OST HUGE AMOUNT IN SHARE MARKET AND AMOUNTS WERE BORROWED FROM SUNDRY CREDITORS AND CITI BANK. THE LD AR FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAD NO OTHER SOURCE OF INCOME, HE APPROACHED HIS FATHER AND BROTHER FOR HELP AND ACCORDINGLY, THE FATHER AND THE BROTHER GIFTED THE AMOUNTS ON VARIOUS DATES. THE LD AR SUBMITTED THAT THE AO DISBELIEVED THE ASSESSEE AND HELD THAT THE CASH DEPOSIT HAS NOT EXPLAINED PROPERLY AND ACCORDINGLY THE AO TREATED THE DEPOSITS AS UNEXPLAINED INCOME AND LEVIED TAX UNDER TH E I T ACT. THE LD AR FURTHER SUBMITTED THAT THERE WAS NO MATERIAL EVIDENCE TO DISBELIEVE THE RECEIPTS OF GIFTS FROM THE FATHER AND BROTHER. THE AO ITA NO . 319/COCH/2014 4 FAILED TO APPRECIATE THE FACTS OF THE CASE IN A JUDICIOUS MANNER. IT WAS FURTHER SUBMITTED THAT THERE IS NOTHING UNNATURAL IN GIVING GIFT BY FATHER TO HIS SON. IT WAS SUBMITTED THAT SINCE THE FATHER OF THE ASSESSEE WAS AN ASSESSEE UNDER THE I T ACT AND THE AMOUNT GIFTED WAS ALREADY SUBJECTED TO TAX AT THE HANDS OF THE FATHER. REGARDING THE GIFT BY SRI ABRAH AM CHERIAN THE BROTHER OF THE ASSESSEE, IT WAS SUBMITTED THAT THE AMOUNT WERE DEPOSITS IN THE BANK ON 14.3.2009 AND NOT IN 5.3.2009 AS STATED IN THE ASSESSMENT ORDER. IT WAS FURTHER SUBMITTED THAT THE SALE OF THE PROPERTY WAS NEGOTIATED ON 5.3.2009 AND THE CONSIDERATION WAS RECEIVED ON 13.3.2009. IT WAS SUBMITTED THAT THE CIT(A) DISMISSED THE APPEAL WITHOUT CONSIDERING THE ISSUE INDEPENDENTLY AND WITHOUT APPLYING THE MIND. ACCORDINGLY, THE LD AR PRAYED THAT THE APPEAL MAY BE ALLOWED. 6.1 ON THE OTHER H AND, THE LD DR SUBMITTED THAT THERE IS NO DIRECT NEXUS BETWEEN THE CASH WITHDRAWALS FROM THE ACCOUNTS OF THE ASSESSEES FATHER AND BROTHER AND THE DEPOSITS MADE IN THE ASSESSEES BANK ACCOUNT AND ONLY WITH THE INTENTION TO EXPLAIN THE SOURCE IN THE ASSESSE ES BANK ACCOUNT , THE ASSESSEE HAS TAKEN A PLEA THAT HE HAS RECEIVED THE GIFTS FROM THE ASSESSEES FATHER AND BROTHER, WHICH CANNOT BE CONSIDERED AS GENUINE. 7 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE PLEA OF THE LD DR IS THAT THE ASSESSEE TAKEN ADVANTAGE OF CASH WITHDRAWAL FROM ASSESSEES FATHERS ACCOUNT AND BROTHERS ACCOUNT TO ITA NO . 319/COCH/2014 5 EXPLAIN THE DEPOSITS INTO HIS BANK ACCOUNT. HOWEVER, THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE NEXUS BETWEEN THE WITHDRAWAL FROM THE ASSESSEES FATHER S AND BROTHER S ACCOUNT WITH DEPOSITS INTO ASSESSEES BANK ACCOUNT. IN OUR OPINION, IF THE WITHDRAWALS FROM FATHERS AND BROTHERS ACCOUNT REFLE CTED IN THEIR RETURN OF INCOME AS GIFT GIVEN TO THE ASSESSEE, THEN CORRESPONDING CREDIT HAS TO BE GIVEN TOWARDS THE GIFTS SHOWN BY THE ASSESSEE. IT IS THE DUTY OF THE ASSESSEE TO ESTABLISH THE NEXUS BETWEEN THE WITHDRAWALS FROM THE BANKS AND DEPOSITS IN TO THE ASSESSEES BANK ACCOUNT. IF THERE IS A CLEAR CUT NEXUS, WE DIRECT THE AO TO GIVE CREDIT TO THE ASSESSEES CLAIM . WITH THE ABOVE OBSERVATIONS, WE RESTORE THE ISSUE BACK TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AND AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF NOV 2014 . SD/ - SD/ - ( N.R.S. GANESAN ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED 14 TH NOV 201 4 RAJ* ITA NO . 319/COCH/2014 6 COPY TO: 1. A PPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT , 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN