Nirmal Kumar James, Sec'bad, Hyderabad V. ITO, Ward-10(4), Hyderabad, Hyderabad

ITA 371/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5858 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 22-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 23-03-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: B SATYANARAYANA MURTHY
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard; Additional evidence; Competent authority; Condonation of delay
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 371/HYD/2016 ASSESSMENT YEAR: 2009-10 M/S NIRMAL KUMAR JAMES, SECUNDERABAD PAN ABSPJ 4587G VS. ITO, WARD- 10(4) HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. SATYANARAYANA MURTHY REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 22-12-2016 DATE OF PRONOUNCEMENT : 30-12-2016 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS THE ASSESSEES APPEAL FOR THE A.Y. 2009-10 , AGAINST THE ORDER OF THE CIT(A)-9, DATED 31-12-2015 . IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A), IN CONFIRMING THE ADDITIONS OF RS. 9,00,000 /- MADE BY THE A.O. AS UNEXPLAINED CASH CREDITS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y. 2009-10 ON 22-10-2009 ADMITTING TOTAL INCOME AT RS. 17,37,360/-. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3), THE A.O. VERIFIED THE PROFIT AND LOSS ACCOUNT AND THE BALANC E SHEET FOR THE ASSESSE FILED ALONG WITH RETURN OF INCOME A ND OBSERVED THAT THE ASSESSEE HAS SHOWN CERTAIN AMOUNT S AS 2 ITA NO. 371/HYD/2016 M/S NIRMAL KUMAR JAMES, SECUNDERABAD . LOANS / ADVANCES RECEIVED FROM VARIOUS PERSONS, THE DETAILS OF WHICH ARE AS UNDER: S.NO NAME OF THE PERSON DATE OF LOAN/ADVANCE AMOUNT RS. 1 LEELAVATHI RANGAPPA 07 - 05 - 2008 6,00,000 2 CH. NIRMALA 27 - 05 - 2008 1,00,000 3 THUMMA THOMAS REDDY 20 - 06 - 2008 50,000 4 THUMMA VIJAYA 20 - 06 - 2008 50,000 5 SUNITHA 11 - 11 - 2003 1,00,000 2.1 THE ASSESSEE WAS, THEREFORE, ASKED TO FURNISH T HE COMPLETE DETAILS OF THE LOAN TRANSACTIONS ALONG WIT H COMPLETE BREAK UP AND DETAILS OF THE LOANS/ADVANCES RECEIVED ALONG WITH NAMES AND ADDRESSES, THE ASSESSMENT PARTICULARS, DE TAILS OF PAN, CONFIRMATION LETTERS FROM THE PARTIES, DETAILS OF INTEREST PAID / ACCRUED, TDS DEDUCTED / REMITTED ETC,. IN R ESPONSE TO THE SAME, THE ASSESSEE FURNISHED HIS REPLY ON 24-10 -2011, WHEREIN IT HAS BEEN STATED AS UNDER: '(I) LEELAVATHI RANYAPPA:- THAT MY MOTHER LATE MRS LEELAVATHL RANYAPPA (AKA LEELA RANGAPPA) LOANED ME ON AMOUNT O F RS.6 LACS (RUPEES SIX LACS ONLY) AS FOLLOWS: BY CHECK NO.133252 OF ANDHRA BONK ON 07-05-2008 FOR RS.5,00,000/- BY CHECK NO. 133254 OF ANDHRA BONK ON 09-06-2008 FO R RS. 1,00,000/- ON THE LOON AMOUNT OF RS.6 LACS ON INTEREST OF 10% WAS PAID UNTIL THE DATE OF REPAYMENT. THIS AMOUNT WAS BORROWED FROM HE R FOR PURCHASE OF THE OFFICE PREMISES. SHE WANTED THIS AMOUNT TO B E GIFTED TO HER TWO GRAND DAUGHTERS GITANJALI M RANGAPPA & PUSHPANJALI C RANGAPPA. (II) THAT MRS M SUNITHA HAD GIVEN US A LOAN 01 RS. 1,00,000 ON 11-11- 2003 BY CHECK. AN INTEREST OF RS. 7500/- WAS PAID A S INTEREST UNTIL THE AMOUNT WAS RETURNED TO HER VIDE OUR CHECK NO.97 636 DATED 20- 07-2007 ON CATHOLIC SYRIAN BANK. (III) THAT MR T. THOMAS REDDY HAD GIVEN US ON AMOUN T OF RS.50,000/- TOWARDS ADVANCE PASSAGE FARE ON 20-06-2008. SINCE H IS TRAVEL DID NOT MATERIALIZE WE REFUNDED THE AMOUNT TO HIM ON 14 -11-2008 AND AS THE AMOUNT WAS WITH US FOR 5 MONTHS HE DEMANDED AN INTEREST OF RS.3, 125/- . 3 ITA NO. 371/HYD/2016 M/S NIRMAL KUMAR JAMES, SECUNDERABAD . (IV) THAT MRS T. VIJAYA HAD GIVEN US AN AMOUNT OF R S. 50,000/- TOWARDS ADVANCE PASSAGE FARE ON 20-06-2008. SINCE H IS TRAVEL DID NOT MATERIALIZE WE REFUNDED THE AMOUNT TO HER ON 18 -11-2008 AND AS THE AMOUNT WAS WITH US FOR 5 MONTHS SHE DEMANDED AN INTEREST OF RS.3, 125/-. (V) THAT MRS CH. NIRMALA HAD GIVEN US AN AMOUNT OF RS. 1,00,000/- TOWARDS ADVANCE PASSAGE FARE ON 27-05-2008. SINCE, HER HUSBAND IN USA SENT HER THE TICKETS FOR HERSELF AND HER 2 CHIL DREN WE REFUNDED THE AMOUNT TO HER ON 04-02-2009 AND AS THE AMOUNT W AS WITH US FOR 8 MONTHS SHE DEMANDED ON INTEREST OF RS. 10,000/ -. ' 2.2 THE A.O. WAS HOWEVER NOT CONVINCED WITH THE ASS ESSEES CONTENTIONS AND HOLDING THAT THE ASSESSEE HAS FAILE D TO ESTABLISH THE IDENTITY OF THE CREDITORS, THEIR CRED IT WORTHINESS AND GENUINENESS OF THE TRANSACTION, TREATED THE E NTIRE AMOUNT OF RS. 9,00,000 AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER O F THE A.O AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF TWO DAYS TO FILING OF THE APPEAL BEFORE US AND AN APPLICATION F OR CONDONATION OF DELAY IS FILED. TAKING THE ASSESSEE S SUBMISSIONS INTO CONSIDERATION, WE ARE INCLINED TO CONDONE THE DELAY AND PROCEED TO DISPOSE OF THE APPEAL AS UNDE R. 4. AS REGARDS THE LOAN OF RS. 6 LACS GIVEN BY ASSES SEES MOTHER, THE ASSESSEE HAS FILED THE FOLLOWING DOCUME NTS AS PART OF THE ADDITIONAL EVIDENCE. I) THE COPY OF THE POWER OF ATTORNEY GIVEN BY THE A SSESSEE, HIS MOTHER SMT. LEELAVATHI RANGAPPA AND HIS SISTER IN FAVOUR OF SRI D.G. YOGENDRA, FOR DEALING WITH PROPE RTIES. II) COPIES OF THE BANK PASSBOOK OF SMT LEELAVATHI RANGAPPA CONTAINING SEVEN PAGES. III) COPY OF SUCCESSION CERTIFICATE ON 14-08-2014 O F THE SHARES AND BANK BALANCE OF SMT LEELAVATHI RANGAPPA. 4 ITA NO. 371/HYD/2016 M/S NIRMAL KUMAR JAMES, SECUNDERABAD . 4.1 AN APPLICATION FOR ADMISSION OF ADDITIONAL EVI DENCE IS ALSO FILED, WHERE IN IT IS SUBMITTED THAT THE ASSESSEES MOTHER EXPIRED ON 03-10-2008 AND ASSESSEE ALONG WITH HIS S IBLING APPLIED FOR SUCCESSION CERTIFICATE TO THE COMPETENT AUTHORITY AND THE PASSBOOK OF THE SAVINGS BANK ACCOUNT WAS ON E OF THE DOCUMENTS WHICH WAS FILED IN THE COURT AND THE SAME WAS HANDED OVER TO THE ASSESSEE ONLY IN 2014 AND THEREF ORE, THESE DOCUMENTS COULD NOT BE FILED BEFORE THE AUTHORITIES BELOW AND ARE NOW BEING FILED AS ADDITIONAL EVIDENCE BEFORE US IN ORDER TO ESTABLISH THE CREDIT WORTHINESS OF SMT LEELAVATH I RANGAPPA. ON PERUSAL OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, WE ARE SATISFIED THAT THE ASSESSEE WAS PREVENTED BY RE ASONABLE CAUSE IN NOT FILING THESE EVIDENCE BEFORE THE AUTHO RITIES BELOW AND THEREFORE, WE ADMIT THE SAME AND REMAND THE ISS UE TO THE FILE OF THE A.O. FOR VERIFICATION AS TO WHETHER THE ASSESSEES MOTHER HAS THE CREDIT WORTHINESS TO ADVANCE THE SUM OF RS. 6 LACS TO THE ASSESSEE. 5. AS REGARDS THE OTHER CREDITORS, WE FIND THAT THE ASSESSEE HAS FILED THE LEDGER ACCOUNT OF ALL THESE PARTIES A T PAGES 21 TO 26 OF THE PAPER BOOK FILED BEFORE US. ON PERUSAL O F THESE DOCUMENTS, WE FIND THAT THE ASSESSEE HAS RECEIVED T HESE AMOUNTS BY WAY OF CASH AND HAS ALSO REFUNDED THE SA ME AFTER A PERIOD OF FIVE TO SIX MONTHS. THE ASSESSEE HAS ALS O CLAIMED TO HAVE PAID INTEREST ON THESE AMOUNTS. FROM THE PROF IT AND LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2009, IT IS SEEN T HAT THE ASSESSEE HAS PAID A TOTAL OF RS. 1,62,924/- TOWAR DS INTEREST. THOUGH THERE IS NO EVIDENCE OF INTEREST PAID TO SHR I THUMMA THOMAS REDDY AND SMT CH. NIRMALA, THE ASSESSEE HAS CLAIMED TO HAVE PAID INTEREST OF RS. 10,000/- TO SMT SUNITH A VIDE CHEQUE NO. 97636, DATED 20-07-2011. THIS IS ALSO E VIDENT FROM THE LEDGER OF THE ASSESSEE FILED BEFORE THE INCOME TAX OFFICER 5 ITA NO. 371/HYD/2016 M/S NIRMAL KUMAR JAMES, SECUNDERABAD . WHICH IS PLACED AT PAGE NO. 17 OF THE PAPER BOOK. THE A.O. AND CIT(A) HAVE DISALLOWED THESE PAYMENTS ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS LIKE THE CONFIRMATION LETTERS AND THE ADDRESSES OF THESE PARTIES. SINCE THE ASSESSEE HAS FAILED TO FURNISH THE LEDGER ACCOUNTS OF THESE CREDITORS AND ALSO THE EVIDENCE WITH REGARD TO THE PAYMENT OF INT EREST, WE DEEM IT FIT AND PROPER TO REMAND THIS ISSUE ALSO TO THE FILE OF THE FILE OF THE A.O. FOR DE NOVO CONSIDERATION AND DIRECT HIM TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVI DING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE IS DIRECTED TO SUBSTANTIATE HIS CLAIM BY W AY OF FILING THE NECESSARY EVIDENCE BEFORE THE AO. THE ASSESSE ES APPEAL, IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL P URPOSES. 6. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2016. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 30 TH DECEMBER, 2016 KRK 1)M/S NIRMAL KUMAR JAMES, C/O VENUGOPAL & CHENOY, CAS, NO. 4-1-889/16/2, TILAK ROAD, HYD -01. 2) ITO, WARD - 10(4), HYDERABAD. 3) CIT -9, HYDERABAD 4) PCIT-6, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE