SHRI P. ARUNACHALAM, TIRUNELVELI V. ITO, WARD-1, TIRUNELVELI

ITA 381/CHNY/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2424 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Keywords: Gift; Opportunity of being heard

Judgement Text

./ ITA NO.381/CHNY/2020 /ASSESSMENT YEAR: 2013-14 MR. P. ARUNACHALAM, 132-G, SAMY NADAR STREET, KEELAPAVOOR, TIRUNELVELI-627 806. V . THE INCOME TAX OFFICER, WARD-I, TIRUNELVELI. [ PAN: AKTPA 5554 G ] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : MS. R. ANITA, ADDL. CIT /DATE OF HEARING : 26.10.2021 /DATE OF PRONOUNCEMENT : 28.10.2021 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MADURAI , IN ITA NO.046/2016-17 DATED 31.12.2019 FOR THE AY 2013-14. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME FOR THE AY 2013-14 ON 19.07.2013 DECLARIN G TOTAL INCOME OF RS.2,11,160/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT') WAS ISSUED ON 04.09.2014. IN RESPONSE TO THE STATUTORY NOTICE , THE ASSESSEE , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . , . , , BEFORE SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ::2:: ITA NO.381/CHNY/2020 FURNISHED THE DETAILS. AFTER CONSIDERING THE DETAIL S FURNISHED BY THE ASSESSEE, THE ASSESSMENT U/S.143(3) WAS COMPLETED B Y ASSESSING THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS.19,61,16 0/- AFTER MAKING ADDITION ON ACCOUNT OF UNPROVED LOAN LIABILITY AS W ELL AS CASH GIFT RECEIVED FROM THE WIFE OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION ON MERITS AFTER CONSIDERING THE MATERIALS AVAILABLE ON RECORD. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BE FORE THE TRIBUNAL. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUANCE OF NOTICE. THE NOTICE ISSUED BY THE TRIBUNAL RECEIVED BACK UNSERVED. THE ASSESSEE HAS NOT FURNISHED ANY CHANGE OF ADDRES S. HENCE, WE PROCEED TO DECIDE THE APPEAL ON MERITS AFTER HEARIN G THE LD. DR. 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIE S BELOW. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS.93,10,460/- IN HIS SAVINGS BANK A/C IN STATE BANK OF INDIA, KEELAPAVOOR. THE ASSESSEE SUBMITTED BEFORE THE AO THAT HE HAS ENGAGED IN AGRICULTURE AND TRADING IN P ADDY AND RICE AND THAT ALL HIS TRANSACTIONS ARE ROUTED THROUGH THE AF ORE-MENTIONED BANK ACCOUNT AND THAT THE CASH DEPOSIT MADE INTO THE AFO RESAID BANK ACCOUNT REPRESENTS THE TRANSACTIONS OF THE ASSESSEE S BUSINESS WHICH ::3:: ITA NO.381/CHNY/2020 WAS DULY ADMITTED IN THE INCOME TAX RETURN. THE AO FURTHER FOUND THAT THE ASSESSEE HAD INVESTED A SUM OF RS.26,15,00 0/- IN THE PARTNERSHIP FIRM M/S. MAA MODERN RICE MILLS. BEFORE THE AO, THE ASSESSEE HAS SUBMITTED THAT HE HAD RECEIVED UNSECUR ED LOANS OF RS.7,50,000/- FROM FRIENDS AND RELATIVES AND A CASH GIFT OF RS.10,00,000/- FROM HIS WIFE. 4.1. BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUB MITTED CONFIRMATION LETTERS PURPORTED TO HAVE BEEN ISSUED BY THE ABOVE MENTIONED LOAN CREDITORS. HOWEVER, IT WAS OBSERVED THAT THE CONFIRMATION LETTERS DID NOT CONTAIN THE DATE OF LO AN, MODE OF PAYMENT OF LOAN, THE DETAILS OF BANKING TRANSACTION THROUGH WHICH SUCH LOANS WERE GRANTED ETC. IN ORDER TO VERIFY THE GENUINENES S OF LOAN, CREDIT WORTHINESS OF THE LOAN CREDITOR AND THE AUTHENTICIT Y OF TRANSACTION, THE ASSESSING OFFICER ISSUED LETTERS TO THE LOAN CREDIT ORS FOR VERIFICATION. THE CONFIRMATION LETTERS SENT TO LOAN CREDITORS AT SERIAL NO. 2, 4 AND 6 RETURNED UN-SERVED WITH THE POSTAL REMARK 'NO SUCH ADDRESSEE'. SIMILARLY, THE LETTERS ISSUED TO LOAN CREDITORS AT SERIAL NO. 1, 3 AND 5 ALSO DID NOT EVOKE ANY RESPONSE. SUBSEQUENTLY, THE ASSESSEE CHANGED HIS STAND AND SUBMITTED THROUGH HIS LETTER FILED ON 18.03.2016 THAT THE ASSESSEE HAD RECEIVED UNSECURED LOAN FROM HIS FRIEN DS AND RELATIVE OF ONLY RS.2,50,000/- WHICH WAS DIRECTLY DEPOSITED INT O THE ASSESSEE'S ::4:: ITA NO.381/CHNY/2020 AFORESAID SAVINGS BANK ACCOUNT. THE ASSESSING OFFIC ER, HOWEVER, COMPARED THE SUBMISSIONS MADE REGARDING THE DEPOSIT IN THE BANK ACCOUNT WHICH WAS NOT FOUND TO BE CORRECT. THE ASSE SSING OFFICER ALSO OBSERVED FROM THE TAX AUDIT REPORT FILED IN FORM NO . 3CB/3CD THAT ALL THE UNSECURED LOANS WERE RECEIVED BY THE ASSESSEE T HROUGH CHEQUE AND DEMAND DRAFTS ONLY. IT WAS, HOWEVER, FOUND BY T HE ASSESSING OFFICER THAT LOAN ENTRIES WERE NOT REFLECTED IN THE ASSESSEES BANK ACCOUNT. AS HAS BEEN EXPLAINED EARLIER, THE LOANS C OULD NOT BE CONFIRMED FROM THE LOAN CREDITORS. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE CLAIM OF LOAN HAVING BEEN TAKEN FROM THE LOAN CREDITORS WAS NOT PROVED AS THE ASSESSEE C OULD NOT PROVE THE AUTHENTICITY OF LOAN TRANSACTION, THE CREDIT WORTHI NESS OF THE LOAN CREDITOR AND GENUINENESS OF THE TRANSACTION. ACCORD INGLY, THE ENTIRE CASH LOAN OF RS.7,50,000/- WAS ADDED AS UNEXPLAINED INCOME OF THE ASSESSEE. 4.2 DESPITE SERVICE OF VARIOUS NOTICES POSTING THE APPEAL FOR HEARING BY THE LD. CIT(A), THERE WAS NO RESPONSE FROM ASSES SEES SIDE. MOREOVER, NO WRITTEN EXPLANATION OR DOCUMENTARY EVI DENCE ARE FURNISHED. DURING THE COURSE OF APPELLATE PROCEEDI NGS, BESIDES MAKING THE CLAIM IN THE GROUNDS OF APPEAL THAT THE ADDITIO N MADE BY THE AO ::5:: ITA NO.381/CHNY/2020 WAS NOT CORRECT, IN THE ABSENCE OF DOCUMENTARY EVID ENCE, THE LD. CIT(A) CONFIRMED THE ADDITION. 4.3 WITH REGARD TO THE CASH GIFT OF RS.10,00,000/- OFFERED BY THE WIFE OF THE ASSESSEE, BEFORE THE AO THE ASSESSEE HAS SUB MITTED THAT THE SOURCE OF SUCH GIFT IN THE HANDS OF HIS WIFE SMT. A . KADALMANI ALANGULAM WAS PROFIT FROM AGRICULTURAL ACTIVITY, PR OFIT FROM TRADING IN PADDY AND VEGETABLES AND JEWEL LOAN OF RS.3,00,000/ -. HOWEVER, SINCE THE ASSESSEE COULD NOT SUBSTANTIATE WITH REFERENCE TO THE DOCUMENTARY EVIDENCE BEFORE THE AO, THE CASH GIFT OF RS.10,00,0 00/- WAS BROUGHT TO TAX. ON APPEAL, THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE ASSESSEES WIFE WAS CRED ITWORTHY TO HAVE GIVEN A CASH LOAN OF RS.10,00,000/-. BOTH THE ISSU ES ARE UNDER THE APPEAL. HOWEVER, SINCE NO REPRESENTATION DURING THE COURSE OF APPELLATE PROCEEDINGS AND MOREOVER, NOTICE ISSUED B Y THE TRIBUNAL HAS ALSO NOT BEEN SERVED ON THE ASSESSEE, DESPITE THE F ACT THAT THE ASSESSEE HAS NOT FURNISHED ANY CHANGE OF ADDRESS EI THER BEFORE THE LD. CIT(A) OR BEFORE THE TRIBUNAL, WE ARE OF THE CONSID ERED OPINION THAT THE ASSESSEE SHALL BE AFFORDED ONE MORE OPPORTUNITY OF BEING HEARD TO MEET THE ENDS OF JUSTICE. ACCORDINGLY, WE DIRECT T HE LD. CIT(A) TO AFFORD A FINAL OPPORTUNITY OF BEING HEARD TO THE AS SESSEE FOR FURNISHING COMPLETE DETAILS AS MAY BE REQUIRED BY THE LD. CIT( A) TO DECIDE THE ::6:: ITA NO.381/CHNY/2020 ISSUES RAISED IN THE APPEAL AFRESH IN ACCORDANCE WI TH LAW BY ISSUING NOTICE THROUGH RESPONSIBLE OFFICER OF THE DEPARTMEN T IN PERSON FOR STRICT COMPLIANCE. THE ASSESSEE IS ALSO DIRECTED T O FURNISH THE DETAILS BEFORE THE LD. CIT(A) TO DECIDE THE ISSUES AFRESH F AILING WHICH, THE ASSESSMENT ALREADY COMPLETED AND CONFIRMED BY THE L D. CIT(A) STANDS SUSTAINED. 5. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 28 TH DAY OF OCTOBER, 2021, IN CHENNAI. SD/- SD/- ( . ) ( G. MANJUNATHA ) /ACCOUNTANT MEMBER ( . . ) (DUVVURU R.L. REDDY) /JUDICIAL MEMBER /CHENNAI, /DATED: 28 TH OCTOBER, 2021. TLN /COPY TO: 1. /APPELLANT 4. ' /CIT 2. /RESPONDENT 5. /DR 3. ' ( ) /CIT(A) 6. /GF