L VENKATASAMY, COIMBATORE V. ITO, NCW-5(1), COIMBATORE

ITA 3311/CHNY/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9292 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 02-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Onus to prove
• Section: 68; 148

Judgement Text

आयकर अपीलीय अिधकरण ‘डी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ,ी महावीर िसंह, उपा23 एवं माननीय ,ी मनोज कु मार अ8वाल ,लेखा सद; के सम3। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.3311/Chny/2018 (िनधाCरण वषC / Assessment Year: 2011-12) Shri L. Venkatasamy No.25/2/61, VG Rao Nagar, Phase-II, Ganapathy, Coimbatore – 641 006. बनाम/ V s. ITO Non-Corporate Ward-5(1), Coimbatore. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . ABQ P V -2 6 2 0 -L (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri T. Banusekar (CA) - Ld. AR थ की ओरसे/Respondent by : Shri G. Johnson (Addl. CIT) –Ld. DR सुनवाई की तारीख/ Date o f Hea rin g : 05-05-2022 घोषणा की तारीख / Date of Pronouncement : 08-06-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2011-12 arises out of the order of learned Commissioner of Income Tax (Appeals)-3, Coimbatore [CIT(A)] dated 26.09.2018 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 147 of the Act on 30.03.2016. The assessee has filed concise grounds of appeal which read as under: - ITA No.3311/Chny/2018 - 2 - 1. For that the order of the Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case to the extent prejudicial to the interest of the appellant and at any rate is opposed to the principles of equity, natural justice and fair play. 2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction. 3. For that the reassessment is bad in law. (Additional Ground) 4. For that the Commissioner of Income Tax (Appeals) failed to adjudicate the grounds raised challenging the validity of reassessment in the instant case. (Additional Ground) 5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer erred in invoking the provisions of section 68. 6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer erred in adding bank deposits totaling to Rs.20,00,000/- as unexplained cash credits. 7. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the appellant had furnished necessary details along with relevant evidences to prove that the source for cash deposits made by the appellant during the impugned assessment year. 8. For that the Commissioner of Income Tax (Appeals) failed to appreciate the fact that the Assessing Officer was satisfied with the explanation regarding the source of cash deposits made by the appellant during the impugned assessment year and hence invocation of provisions of section 68 is not warranted in the facts and circumstances of the case. For these grounds and such other grounds that may be urged before or during the hearing of the appeal it is most humbly prayed that the Hon'ble Income Tax Appellate Tribunal may be pleased to a. Quash the order of assessment and / or b. Direct the Assessing Officer to delete the addition of Rs.20,00,000/- as unexplained cash credits and / or c. Pass such other orders as the Hon'ble Income Tax Appellate Tribunal may deem fit. As evident, the assessee is aggrieved by confirmation of addition of Rs.20 Lacs. The same stem from the fact that the assessee deposited aforesaid amount in Savings Bank Account held with ICICI Bank under the joint name with his spouse. The deposits are stated to have been sourced out of land purchase advance received back on cancellation of the agreement. 2. Drawing attention to the legal grounds, Ld. AR submitted that the reasons for reopening were not provided to the assessee. The Ld. AR also assailed the additions on merits. The Ld. Sr. DR, on the other hand, justified the reassessment proceedings as well as quantum additions. Having heard rival submissions, our adjudication would be as under. ITA No.3311/Chny/2018 - 3 - 3.1 The assessee is stated to be a resident individual having retired as an Engineer from Tamil Nadu State Electricity Board in the year 2000- 01. No return of income was filed by the assessee for the year under consideration. The case was reopened pursuant to receipt of information that the assessee deposited cash of Rs.20 Lacs on 29.10.2010 in one of savings bank account held jointly with the spouse. Notice u/s 148 was issued on 04.07.2014. The assessee admitted income of Rs.2.26 Lacs and submitted that the deposit represents return-back of advance made by the assessee for the purchase of agricultural land. However, the assessee could not file original sale as well as termination agreement dated 14.10.2010. The seller Shri D. Jaganathan confirmed the transaction but like-wise could not file original sale agreement. However, he was able to file sale termination agreement dated 14.10.2010 in original for verification. The sale agreement was stated to be entered on 08.04.2010 in terms of which the assessee was required to pay sum of Rs.20 Lacs in a staggered manner starting from 08.04.2010 to Sept., 2010. Both the witnesses also confirmed the transaction. Accordingly, the assessee was directed to prove the source of payment of Rs.20 Lacs. 3.2 The assessee submitted that the amount of Rs.5 Lacs was paid out of retirement benefits and accumulated savings. A sum of Rs.5 Lacs was stated to be received from son in February, 2010. Some of the payment was said to be sourced out of early withdrawal from ICICI Bank during the period 01.08.2009 to 17.07.2010 which has been tabulated in para- 13 of the order. However, upon perusal of the withdrawal and payment, Ld. AO came to a conclusion that the assessee was not able to substantiate the claim with material evidence for the source of advance ITA No.3311/Chny/2018 - 4 - made out of accumulated savings / cash in hand. The withdrawals as stated to be made by the assessee were found to be not cash withdrawals and the same could not be held to be used to make the aforesaid payments of Rs.20 Lacs. Finally, only an amount of Rs.4 Lacs was to be accepted and the balance amount of Rs.16 Lacs was added to assessee’s income as unexplained cash credit. 3.3 The assessee held another bank account with Indian Overseas Bank wherein the assessee had made cash deposits of Rs.13.40 lacs and accordingly, the assessee was asked to prove the source of cash deposits. After considering assessee’s explanation, Ld. AO held that the amount of Rs.5 Lacs was unexplained cash credit. The legal submissions of the assessee that the money deposited by the assessee would not have the character of income and it was merely a capital receipt was rejected since it was in the character of income only particularly when the assessee was not able to give source for the advances so made. Upon further appeal, Ld. CIT(A) confirmed additions of Rs.20 Lacs and deleted the addition of Rs.1 Lacs. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. Upon careful consideration of material fact, it could fairly be concluded that the assessee had, in fact, entered into a sale agreement which was cancelled and the money so received by the assessee was deposited in ICICI Bank Account. However, it could be seen that pursuant to sale agreement dated 08.04.2010, the assessee has paid a sum of Rs.20 Lacs to the seller which fall in this year and therefore, the assessee was obligated to prove the source of payment. No doubt, the assessee being a retired employee may have accumulated savings and ITA No.3311/Chny/2018 - 5 - certain cash-in-hand, however, the onus to prove the source of payment with cash flows was not completely discharged by the assessee. Pertinently, the assessee had deposited another Rs.13.40 Lacs in another Bank Account held with Indian Overseas Bank which also could not be fully explained. We find that he Ld. CIT(A) has sustained addition to the extent of Rs.20 Lacs which would mean that the assessee was able to explain the source to a certain extent. Therefore, on the given factual matrix, we deem it fit to restore the matter back to the file of Ld. AO with another opportunity to the assessee to prove the source of remaining Rs.20 Lacs. The assessee is directed to substantiate the same. Needless to add that sufficient opportunity of hearing shall be granted to the assessee. 5. The Ld. AR has submitted that reasons to reopen the case have not been provided to the assessee. However, it could be seen that the assessee has asked for reasons only during September, 2021 which is much even after the date of impugned order. The case was reopened as early as during the year 2014. The assessee did not file return of income for the year under consideration. Therefore, in such a case, the only direction that could be given to Ld. AO is to provide the copy of reasons record, if available on record. 6. The appeal stand allowed for statistical purposes. Order pronounced on 08 th June, 2022. Sd/- (MAHAVIR SINGH) उपा23 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद; / ACCOUNTANT MEMBER चे+ई / Chennai; िदनांक / Dated : 08-06-2022 EDN/- ITA No.3311/Chny/2018 - 6 - आदेश की Wितिलिप अ 8ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF