B.P. Ravi, Bangalore V. ITO, Bangalore

ITA 33/BANG/2014

• Counselvise Citation: 3321114 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DHIVAHAR JT
• Assessee Lawyers: N SURYANARAYANA ACITRETD
• Keywords: Unexplained cash credit; Gift; Source of fund; Additional evidence; Revised return
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.33/BANG/2014 ASSESSMENT YEAR : 2009-10 SHRI B.P. RAVI, SAFEWAY WOODS APARTMENTS, 1 ST FLOOR, HORAMAVU ROAD, BANASWADI POST, BANGALORE 560 043. PAN: AJSPR 7200E VS. THE INCOME TAX OFFICER, WARD 15(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI N. SURYANARAYANA, ACIT(RETD.) RESPONDENT BY : SHRI P. DHIVAHAR, JT. CIT(DR) DATE OF HEARING : 06.04.2015 DATE OF PRONOUNCEMENT : 10.04.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 4.10.2013 OF THE CIT(APPEALS)-IV, BANGALORE RELATING TO ASSESSME NT YEAR 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL. FOR THE A.Y. 200 9-10, HE FILED A REVISED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,44,990. AN ORDER OF ASSESSMENT U/S. 144 OF THE ACT MAKING A BEST JUDGME NT ASSESSMENT WAS PASSED AS THE ASSESSEE DID NOT PARTICIPATE IN THE P ROCEEDINGS BEFORE THE AO. AS PER THE ANNUAL INFORMATION REPORT (AIR), TH E AO NOTICED THAT THE ITA NO.33/BANG/2014 PAGE 2 OF 10 ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS.34,89,6 99 IN HIS SB ACCOUNT WITH ICICI BANK. SINCE THE SOURCE OF FUNDS FOR THE AFORESAID CASH DEPOSIT IN THE BANK ACCOUNT REMAINED UNEXPLAINED, T HE AO ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. BESIDES THE A BOVE, A DEDUCTION OF RS.67,524 CLAIMED UNDER CHAPTER-VIA OF THE ACT WAS ALSO DENIED FOR WANT OF EVIDENCE TO SUBSTANTIATE THE ELIGIBILITY FOR CLA IM OF DEDUCTION. THE AO ULTIMATELY DETERMINED THE TOTAL INCOME OF THE ASSES SEE AS FOLLOWS:- INCOME RETURNED : 4,44,990 ADD: DEDUCTION CLAIMED UNDER CHAPTER VIA: 67,5 24 ADD: UNEXPLAINED CASH CREDITS : 34,89,699 TOTAL INCOME : 40,02,210 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(APPEALS). THE ASSESSEE POINTED OUT THAT HE WAS WORKING IN EMERSON NETWORK POWER INDIA LTD., KORAMANGALA, BANG ALORE AS A DEPUTY MANAGER-SERVICE OPERATION-AIR SINCE 2003. IT WAS P OINTED OUT THAT THE AIR INFORMATION RELATING TO CASH DEPOSIT IN THE ICICI B ANK WAS ONLY RS.16,15,000. THE AO HAS ERRONEOUSLY CONSIDERED TH E SAID AMOUNT TWICE AND ARRIVED AT A CASH DEPOSIT OF RS.32,30,000 IN TH E BANK ACCOUNT. THE ASSESSEE THEREFORE SUBMITTED THAT THE CASH DEPOSITS THAT THE ASSESSEE HAS TO EXPLAIN WAS ONLY A SUM OF RS.16,15,000. THIS EX PLANATION WAS ACCEPTED BY THE CIT(A). THE ASSESSEE EXPLAINED THE SOURCE O F CASH OF RS.16,15,000/- AS FOLLOWS:- ITA NO.33/BANG/2014 PAGE 3 OF 10 OPENING CASH (01.04.2008) 4,03,527 DRAWINGS FROM CREDIT CARDS 1,50,000 LOAN ON CREDIT CARDS 2,00,000 RE-IMBURSEMENT OF FOREIGN TOUR EXPENSES 2,53,000 SALE OF JEWELLERY 2,75,000 GIFT FROM MOTHER (RD MATURED FROM POST OFFICE) 1,00 ,000 HAND LOAN FROM SSC POWER SYSTEM 1,60,000 SALARY SAVINGS FOR THE YEAR 1,00,000 ------------- TOTAL 16,31,527 ------------- 4. OUT OF THE ABOVE SOURCES, THE CIT(APPEALS) ACCEP TED THE EXPLANATION OF THE ASSESSEE WITH REGARD TO AVAILABI LITY OF CASH OF RS.2,75,000 ON ACCOUNT OF SALE OF JEWELLERY AND A S UM OF RS.1 LAKH TOWARDS SAVINGS FROM SALARY. THE REMAINING AVAILABILITY OF SOURCE OF CASH WAS DISBELIEVED BY THE CIT(A). AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNA L. 5. GROUNDS NO. 1 & 2 REGARDING CHALLENGE TO ORDER U /S. 144 OF THE ACT WERE NOT PRESSED AND ARE THEREFORE DISMISSED AS NOT PRESSED. 6. THE REMAINING GROUNDS ARE ONLY WITH REGARD TO TH E VARIOUS ITEMS OF SOURCE OF CASH WHICH WERE DISBELIEVED BY THE CIT(A) . WE WILL DEAL WITH EACH OF THE ITEMS OF SOURCE OF CASH AS EXPLAINED BY THE ASSESSEE BEFORE THE CIT(A) IN THE LIGHT OF THE ORDER OF THE CIT(A). (I) OPENING CASH AS ON 1.4.2008 OF RS.4,03,527 7. ACCORDING TO CIT(A), THE ASSESSEE HAD RECEIVED G ROSS SALARY OF RS.5 LAKHS DURING THE PREVIOUS YEAR AND THEREFORE SOURCE OF OPENING CREDIT ITA NO.33/BANG/2014 PAGE 4 OF 10 BALANCE OF RS.4,03,527 WAS NOT ACCEPTABLE. THE CIT (A) WAS ALSO OF THE VIEW THAT THE ASSESSEE HAD THREE BANK ACCOUNTS AND WAS WITHDRAWING CASH FROM ATM AND THEREFORE IT WAS NOT UNREASONABLE TO B ELIEVE THAT THE ASSESSEE WOULD KEEP CASH OF ABOUT RS.4 LAKHS IN HAN D AS A SALARIED EMPLOYEE. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE ASSESSEE HAD FILED BALANCE SHEET AS ON 31.3.2007, 3 1.3.2006, 31.3.2005 & 31.3.2004 BEFORE THE CIT(A). CASH AND BANK BALANCE HAVE BEEN DISCLOSED IN THOSE BALANCE SHEETS. THE OPENING BALANCE OF CA SH AS ON 1.4.2008 WAS ARRIVED AT BY THE ASSESSEE ONLY ON THE BASIS OF CAS H BALANCE AS ON 31.3.2007 AND AFTER TAKING INTO CONSIDERATION THE C ASH TRANSACTIONS DURING THE PREVIOUS YEAR FROM 1.4.2007 TO 31.3.2008. ACCO RDING TO HIM, THEREFORE, THE SOURCE OF OPENING BALANCE OF CASH STANDS DULY E XPLAINED. 9. WE HAVE CONSIDERED HIS SUBMISSIONS AND ARE UNABL E TO ACCEPT THE SAME. EXCEPT FOR THE BALANCE SHEET AS ON 31.3.2007, THERE IS NO OTHER EVIDENCE TO SHOW THE SOURCE OF CASH AND BANK BALANC E AS DISCLOSED IN THE BALANCE SHEET AS ON 31.3.2007. HOW THE OPENING BAL ANCE AS ON 1.4.2007 WAS ARRIVED AT IS NOT EXPLAINED BY THE ASSESSEE. A PART FROM THE ABOVE, CASH BOOK FOR THE PERIOD FROM 1.4.2007 TO 31.3.2008 HAS ALSO NOT BEEN FILED. IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW T HAT THE ASSESSEE HAS MISERABLY FAILED TO PROVE THE OPENING CASH BALANCE AS CLAIMED BY HIM. WE THEREFORE AGREE WITH THE CONCLUSIONS OF THE LD. CIT (APPEALS) ON THIS ISSUE. ITA NO.33/BANG/2014 PAGE 5 OF 10 (II) DRAWINGS FROM CREDIT CARDS RS.1,50,000 (III) LOAN ON CREDIT CARDS RS.2,00,000 10. AS FAR AS THE SOURCE OF RS.3.5 LAKHS IN RESPECT OF THE ABOVE SOURCES ARE CONCERNED, THE ASSESSEE HAS FILED ONLY CASH BOO K FROM 1.4.2008 TO 31.3.2009. IN THE CASH BOOK, THERE IS A SECTION SH OWING CREDIT CARD EXPENSES. ACCORDING TO THE ASSESSEE, THE CREDIT CA RD EXPENSES SHOWS WITHDRAWAL OF CASH ON THE BASIS OF CREDIT CARD AND ALSO PAYMENTS MADE BY CHEQUES FROM THE ASSESSEES ICICI BANK ACCOUNT IN D ISCHARGE OF THE WITHDRAWAL OF CASH USING CREDIT CARD. THE SUM TOTA L OF THE PAYMENTS SO MADE BY THE ASSESSEE BY WAY OF CHEQUE AS STATED IN THE CASH BOOK, IS A SUM OF RS.2,33,065. A COPY OF THE CASH BOOK FILED IN THE PAPERBOOK AT PAGES 21 TO 23 SHOWS THE PAYMENTS MADE BY CHEQUE IN RESPECT OF CREDIT CARD EXPENSES. ACCORDING TO THE ASSESSEE, THE WITH DRAWALS OF CASH BY USING ATM CARD ARE THEREFORE TO BE CONSIDERED AS CA SH AVAILABLE FOR DEPOSITING IN THE BANK ACCOUNT. 11. ON THE ABOVE EXPLANATION OFFERED BY THE ASSESSE E, THE CIT(A) WAS OF THE VIEW THAT THE PAYMENT BY CHEQUE SHOWN BY THE ASSESSEE IN CASH BOOK AS PAYMENTS MADE TOWARDS REPAYMENT OF CASH WIT HDRAWN USING CREDIT CARD WAS NOT SUPPORTED BY CREDIT CARD STATEMENT. T HE CIT(A) WAS OF THE VIEW THAT THOUGH SUBSTANTIAL AMOUNTS HAVE BEEN PAID TOWARDS CREDIT CARDS DURING THE PREVIOUS YEAR, IT HAS NOT BEEN ESTABLISH ED THAT THOSE PAYMENTS WERE FOR CASH WITHDRAWALS OR LOANS THROUGH CREDIT C ARDS. THE CIT(A) THEREFORE REJECTED THE EXPLANATION OF THE ASSESSEE. ITA NO.33/BANG/2014 PAGE 6 OF 10 12. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE STAND OF THE ASSESSEE AS WAS PUT FORTH BEFORE THE CIT(APPEALS). WHEN A QUERY WAS PUT AS TO WHY THE CREDIT CARD STATEMENT WAS NOT FILED T O SUPPORT THE CLAIM OF THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE COULD NO T GIVE ANY SATISFACTORY EXPLANATION. HE, HOWEVER, PRAYED THAT AN OPPORTUNI TY MAY BE GIVEN BY REMANDING THE ISSUE TO THE AO. 13. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSES SEE AND ARE OF THE VIEW THAT THE ORDER OF CIT(APPEALS) HAS TO BE UPHEL D. AS WE HAVE ALREADY NOTICED, THE ASSESSEE HAS FILED CASH BOOK FROM 1.4. 2008 TO 31.3.2009 AND THE SAME IS PLACED AT PAGES 7 TO 13 OF THE ASSESSEE S PAPERBOOK. COPY OF THE CAPITAL ACCOUNT LEDGER IS PLACED AT PAGES 14 TO 39 OF THE ASSESSEES PAPER BOOK. PAGES 21 TO 23 CONTAIN CLASSIFICATION IN THE CASH BOOK UNDER THE HEAD CREDIT CARD EXPENSES. THE ENTRIES MADE AT PAGES 21 TO 23 ARE NOT SUPPORTED BY THE CREDIT CARD STATEMENT AND THER EFORE THE CLAIM OF THE ASSESSEE THAT THE CASH WITHDRAWALS USING CREDIT CAR D WERE REPAID BY CHEQUE ISSUED FROM THE ASSESSEES BANK ACCOUNT AND THEREFORE CASH WITHDRAWN USING CREDIT CARD SHOULD BE CONSIDERED AS BEING AVAILABLE TO THE ASSESSEE TO EXPLAIN THE CASH DEPOSIT OF RS.16.15 LA KHS IN HIS BANK ACCOUNT CANNOT BE ACCEPTED. THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE FOR A REMAND TO THE AO CAN ALSO NOT BE ACCEPTED BECAUSE T HE CIT(A) HAD REJECTED THE CLAIM OF ASSESSEE FOR ABSENCE OF CREDI T CARD STATEMENT AND EVEN BEFORE THE TRIBUNAL, THE ASSESSEE DID NOT MAKE ANY ATTEMPTS TO FILE ITA NO.33/BANG/2014 PAGE 7 OF 10 THE SAME AS ADDITIONAL EVIDENCE. IN THESE CIRCUMST ANCES, WE UPHOLD THE ORDER OF THE CIT(APPEALS) ON THIS ISSUE. (IV) REIMBURSEMENT OF FOREIGN TOUR EXPENSE RS.2,5 3,000 14. IT WAS THE CLAIM OF ASSESSEE THAT HE HAD UNDERT AKEN FOREIGN TRAVEL ON BEHALF OF THE EMPLOYER AND HAD USED CREDIT CARDS FOR BOOKING AIR-TICKETS AND INCURRING EXPENSES WHILE ON JOURNEY ABROAD. TH E EXPENSES SO INCURRED WERE REIMBURSED BY THE ASSESSEES EMPLOYER IN CASH. THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE FOR THE REASON T HAT NO DETAILS OF EXPENSES INCURRED AND FUNDED FROM THE SOURCE OF THE ASSESSEE WAS GIVEN AND THEREFORE THE QUESTION OF EMPLOYER REIMBURSING THE EXPENSES DOES NOT ARISE FOR CONSIDERATION. 15. ON THE ABOVE ISSUE, THE LD. COUNSEL FOR THE ASS ESSEE FILED BEFORE US A CERTIFICATE FROM HIS EMPLOYER REGARDING THE ASSES SEE HAVING UNDERTAKEN THE FOREIGN TRAVEL ON BEHALF OF THE COMPANY AND THA T THE COMPANY HAS REIMBURSED THOSE EXPENSES. 16. THE EXPENSES SO REIMBURSED INSOFAR AS IT RELATE S TO THE PERIOD FROM 28.4.2008 TO 2.1.2009 IS CLAIMED BY THE ASSESSEE TO BE A SUM OF RS.2,43,000. THE DETAILS ARE GIVEN IN ANNEXURE-I TO THIS ORDER . THE ASSESSEE HAS ALSO FILED BEFORE US THE DETAILS OF FO REIGN TRIPS UNDERTAKEN BY HIM WHICH ARE AS FOLLOWS:- ITA NO.33/BANG/2014 PAGE 8 OF 10 DATE OF VISIT (FROM & TO) COUNTRY VISITED DATE OF PURCHASE OF AIRTICKET THROUGH CREDIT CARD 1 28.4.2008 TO 01.05.2008 SRI LANKA UP AND DOWN AIR TICKET PURCHASED ON 26.4.2008 2 2.12.2008 TO 5.12.2008 CHINA/ HONGKONG UP AND DOWN AIR TICKED PURCHASED ON 20.11.2008 3 2.1.2009 TO 09.1.2009 BANGLADESH UP AND DOWN AIR TICKET PURCHASED ON 23.12.2008 17. THE CREDIT CARD STATEMENT ISSUED BY CITI BANK H AS ALSO BEEN FILED BEFORE US. WE HAVE PERUSED THE SAME AND WE FIND TH AT THE CREDIT CARD STATEMENT EVIDENCES PURCHASE OF AIR TICKETS FROM IN DIAN AIRLINES ON 20.11.2008, 23.12.2008 AND 26.4.2008. AS TO HOW TH ESE PURCHASES OF AIR TICKET IS LINKED WITH THE VISITS OF THE ASSESSEE TO SRI LANKA, CHINA, HONGKONG AND BANGLADESH IS NOT CLEAR. THERE IS NO EVIDENCE FILED BY THE ASSESSEE TO SHOW THAT THESE EXPENSES WERE REIMBURSE D BY THE EMPLOYER. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CLAIM MADE BY THE ASSESSEE WAS RIGHTLY REJECTED BY THE CIT(A). (V) GIFT FROM MOTHER OF RS.1 LAKH 18. THE ASSESSEE EXPLAINED THAT THE ASSESSEES MOTH ER WAS IN POSSESSION OF FUNDS RECEIVED OUT OF MATURITY OF RD IN POST OFFICE. THE CIT(A) NOTICED FROM THE DOCUMENTS FILED BY THE ASSE SSEE THAT THERE WERE TWO DEPOSITS OF RS.50,000 MADE ON 21.8.2003 BY ONE SRI SANJEEVARAYUDU AT CUDDAPAH POST OFFICE, WHICH WERE WITHDRAWN ON 30 .3.2005 PREMATURELY. THE CIT(A) WAS OF THE VIEW THAT THERE WAS NO EVIDEN CE TO SHOW HOW THE ITA NO.33/BANG/2014 PAGE 9 OF 10 ASSESSEES MOTHER CAME INTO POSSESSION OF THE RD MA TURITY PROCEEDS WHICH STOOD IN THE NAME OF SHRI SANJEEVARAYUDU. TH E CIT(A) HELD THAT EVEN IF THE MATURITY PROCEEDS ARE ACCEPTED AS BELON GING TO THE ASSESSEES MOTHER, IT WAS IMPROBABLE TO BELIEVE THAT THE RD MA TURITY PROCEEDS WHICH WERE RECEIVED ON 30.3.2005 WOULD HAVE BEEN RETAINED BY THE ASSESSEES MOTHER AND GIVEN AS GIFT TO THE ASSESSEE IN THE F.Y . 2008-09. THE CIT(A) WAS OF THE VIEW THAT IT WAS HIGHLY IMPROBABLE THAT THE ASSESSEES MOTHER WOULD HAVE RETAINED CASH WITH HER FOR 3 YEARS AND G IVEN IT AS GIFT TO THE ASSESSEE. 19. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REI TERATED THE SUBMISSIONS AS WERE MADE BEFORE THE CIT(APPEALS). 20. WE ARE OF THE VIEW THAT THE CONCLUSIONS DRAWN B Y THE LD. CIT(APPEALS), IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ARE PROPER AND CALL FOR NO INTERFERENCE. WE THEREFORE CONFIRM THE ORDER OF THE CIT(APPEALS). 21. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF APRIL , 2015 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R ENCL: ANNEXURE-I. BANGALORE, DATED, THE 10 TH APRIL , 2015 . /D S/ ITA NO.33/BANG/2014 PAGE 10 OF 10 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR/ SENIOR PRIVATE SECRETARY ITAT, BANGALORE.