Sri. Mathai Eapen Vettath, Kottayam V. The ITO, Non-Corporate, Wd-1(3), Kochi

ITA 422/COCH/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3440 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-02-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 14-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: MATHAI EAPEN VETTATH
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 68; 80C; 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO . 422 / COCH/ 20 1 8 ASSESSMENT YEAR : 2 0 14 - 15 SHRI MATHAI EAPEN VETTATH, VETTATH SWAROOPAM , NEAR KADUTHURUTHY, NJEEZHOOR P.O. KOTTAYAM - 686 612. PAN:AFTPV 5949R] VS. THE INCOME TAX OFFICER, NON - CORPORATE, WARD - 1(3), KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) S.P. 33/COCH/2018 (ARSG. OUT OF I .T.A. NO.422/COCH/2018) ASSESSMENT YEAR : 2014 - 15 SHRI MATHAI EAPEN VETTATH, VETTATH SWAROOPAM NEAR KADUTHURUTHY, NJEEZHOOR P.O. KOTTAYAM - 686 612 . PAN:AFTPV 5949R] VS. THE INCOME TAX OFFICER, NON - CORPORATE, WARD - 1(3), KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SHRI MATHAI EAPEN VETTATH, ADV. REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 21 / 0 2/ 201 9 DATE OF PRONOUNCEMENT 25 / 0 2 /201 9 O R D E R PER CHANDRA POOJARI, AM: TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT (A), KOTTAYAM DATED 02/05/20 18 AND PERTAINS TO THE ASSESSMENT YEAR 2014 - 15 . I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 2 2 . THE FIRST GROUND IS WITH REGARD TO SUSTENANCE OF ADDITION OF RS.49,22,000/ - TOWARDS DEPOSITS IN THE SB ACCOUNTS OF CATHOLIC SYRIAN BANK AND SBI. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER CALLED FOR INFORMATION U/S. 133(6) FROM CATHOLIC SYRIAN BANK AND STATE BANK OF INDIA WHEREIN THE ASSESSEE WAS MAINTAINING BANKS ACCOUNTS. THE BANKS SUPPLIED THE STATEMENTS AND THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD DEPOSITED RS.49,22,000/ - ON 06/03/2014 AND 07/03/2014 AS UNDER: SL. NO. DATE AMOUNT NAME OF BANK NATURE OF DEPOSIT 1 06.03.2014 20,00,000/ - CSB 2 06.03.2014 5,00,000/ - CSB FD 3 06.03.2014 5,00,000/ - CSB FD 4 06.03.2014 4,72,000/ - SBI FD 5 07.03.2014 14,50,000/ - SBI TOTAL 49,22,000/ - 3.1 THE ASSESSING OFFICER CALLED FOR EXPLANATION FOR THE SOURCE OF THE ABOVE CASH DEPOSITS. ON 09.12.2016, THE ASSESSEE SUBMITTED HIS EXPLANATION FOR SOURCES OF FUNDS AS UNDER: A RUBBER CULTIVATI ON 1.5 ACRE 90,000/ - B PADDY 43.32 ACRES 9,66,000/ - C RUBBER PLANTATION AND TAPIOCA PLANTATION SOLD 30,22,000/ - & 6,00,000/ - D MOTOR ACCIDENT CLAIM RECEIVED 89,175/ - E GROUND NUT CULTIVATION LAND SOLD ON 25.02.2013 18,00,000 / - F AGRICULTURAL LOAN TAKEN 1,25,00,000/ - G LOAN TAKEN FROM GEORGE THOMAS (DUBAI) 1,00,000/ - I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 3 H LOAN TAKEN FROM TOM K VARGHESE (KUWAIT) 1,00,000/ - I LOAN TAKEN FROM MRS. MARY SLEEBA (LONDON) 1,00,000/ - 3.2 T HE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE EXPLANATION OF THE ASSESSEE. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT EXPLAINED THE SOURCE OF CASH DEPOSITS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE GAVE VAGUE REPLIES WITHOUT ANY SUPPORTING EVIDENCES AND EVEN THOUGH THE ASSESSEE WAS CLAIMING TO HAVE AGRICULTURAL INCOME, HE HAD NOT DECLARED THE SAME IN H I S RETURN OF INCOME. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE OF HAVING GENERATED INCOME DURING THE YEAR EVEN IF IT WAS NOT DECLARED IN T HE RETURN OF INCOME. THE PROFESSIONAL INCOME W AS ALSO NOT DECLARED IN THE RETURN OF INCOME. UNDER THESE CIRCUMSTANCES , THE ASSESSING OFFICER TREATED THE CASH DEPOSIT OF RS.49,22,000/ - AS UNEXPLAINED CASH CREDIT AND ASSESSED THE SAME U/S. 68 O F THE ACT. 4. BEFORE THE CIT(A), THE ASSESSEE FILED A LETTER DATED 02/01/2018, CONTENTS OF WHICH ARE REPRODUCED BELOW: SIR, SUB : REGARDING SOURCE IN CASE : ITU/W - 1(3)NGAFTPV5949R/16 - 17 I HAD WITHDRAWN THE FOLLOWING AMOUNT FROM THE BANKS : 25.1 1.13 30,000 IDBI 30.11.13 50,000 IDBI 16.12.13 1,00,000 FEDERAL BANK 23 .1 2 .13 1,00,000 IDBI I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 4 30.12.14 60,000 IDBI 7.1.14 50,000 I DBI 7.1.14 7 ,00,000 I DBI 10.1.14 50,000 IDBI 16.1 .14 5,000 IDBI 17.1.14 78,00,000 IDBI 30.1.14 90,000 IDBI 5.2.14 50,000 SIB 17.2.14 50,000 SIB 18.2.14 68,000 SIB 25.2.14 30,000 SIB 7.3.14 5 LAKHS SIB 7.3.14 5 LAKHS SIB 11.3.14 5 LAKHS SIB 7.3.14 30,22,000 (CHECK GIVEN TO ME BY CYRIL VARKEY SELLING THE PROPERTY 11.3.14 4,72,000 INDIAN BANK FROM THE ABOVE PROOF IT IS PROVED THE SOURCE '. 4.1 THE CIT(A) OBSERVED THAT AP ART FROM FARMING, THE ASSESSEE ALSO CARRIES 0 N THE PROFESSION OF A LAWYER OCCASIONALLY. ACCORDING TO THE CIT(A) I N ITS VARIOUS SUBMISSIONS, THE ASSESSEE HAD LEVELLED ALLEGATIONS OF BIAS AND HARASSMENT I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 5 AGAINST THE ASSESSING OFFICER. HOWEVER, ON READING THE ASSESSMENT ORDE R, THE CIT(A) DID NOT FIND A NY BASIS FOR THESE ALLEGATIONS AND THE ASSESSING OFFICER HA D PERFORMED HIS DUTIES AS AN ASSESSING OFFICER LAWFULLY AND HA D GIVEN SUFFICIENT OPPORTUNITIES TO THE ASSESSEE FOR GIVING EXPLANATIONS TO THE SHOW CAUSE NOTICES ISSUED BY HIM. IT WAS OBSERVED THA T THE ASSESSEE WAS NOT WELL VERSED WITH THE PROCESSES OF INCOME - TAX ASSESSMENT AND THEREFORE , THE RESPONSE OF THE ASSESSEE WAS FULL OF ANOMALIES AND CONTRADICTIONS WHICH HAVE BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED BY HIM. ACCORDING TO THE CIT(A), T HE ASSESSING OFFICER HA D EXAMINED CASH DEPOSIT OF RS.49,22,000/ - AND NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, TREATED THE SAME AS UNEXPLAINED CASH CREDITS AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE U/ S 68 OF THE I T ACT. THE ENTIRE CASH WAS DEPOSITED ON 06.3.2014 AND 7.3.2014. THE CIT(A) GAVE TH E SUMMARY OF ASSESSEE'S EXPLANATION GIVEN AT THE TIME OF ASSESSMENT WHICH IS AS UNDER: I) THE SOURCE OF CASH DEPOSIT IS AGRICULTURAL AND PROFESSIONAL INCOME. II) HE HAD SOLD LAND AND SALE CONSIDERATION OF THE SAME WERE DEPOSITED IN THE BANK. III) HE HAS SUBSTANTIAL RUBBER CULTIVATION AND PADDY CULTIVATION . IV) HE ALSO HAD GROUND NUT CULTIVATION. V) HE HAD TAKEN AGRICULTURAL LOAN AMOUNTING TO RS. 1.25 CRORE S FROM ARAKKUNNAM BRANCH OF DISTRICT CO - OPERATIVE BANK LTD. VI) HE HAD TAKEN PERSONAL LOANS OF RS. 1 LAKH EACH FROM 3 PEOPLE. I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 6 (V) THE ASSESSEE HAD SUBSTANTIAL CASH WITHDRAWALS FROM HIS BANK ACCOUNTS, WHICH WERE RE - DEPOSITED . 4.2 BEFORE THE CIT(A ) , THE ASSESSEE ALSO CONTENDED THAT, HIS OLD FATHER AND M OTHER WERE NOT KEEPING WELL AND THEREFORE HE HAD TO MAINTAIN SUBSTANTIAL CASH BALANCE AT HOME IN CASE OF ANY EMERGENCY AROSE. THE ASSESSEE ALSO EXPLAINED THAT HE SOLD HIS PROPERTY IN MARARIKULAM NO RTH PANCHAYAT, ALAP P UZHA TO MRS. SUVARNA AND MR.GOPALAKRISHNAN AND RECEIVED A CHEQUE WHICH WAS DISHONOURED ON PRESENTING TO THE BANK FOR CLEARANCE AND H IS LEGAL NOTICES WERE ALSO NOT REPLIED. IT WAS SUBMITTED THAT W ITH THE INTERFERENCE OF MR.PRATAPKUMAR S WARNY, THE DEAL WAS RE - NEGOTIATED AND HE RECEIVED RS.14,50,000/ - IN CASH, WHICH HE DEPOSITED IN HIS BANK ACCOUNT. BEFORE THE CIT(A), IT WAS ALSO ST ATED THAT HE WAS NOT AWARE OF INCOME TAX PROCEEDINGS AND THIS WAS THE FIRST TIME HE WAS HANDLING HIS OWN INC OME TAX MATTERS AND WAS APPEARING BEFORE THE INCOME TAX AUTHORITIES. HE CLAIMED THAT HE WAS BASICALLY A VILLAGE FARMER AND WAS SPEAKING THE TRUTH. T HE ASSESSING OFFICER DID NOT BELIEVE THE ASSESSEE AND REJECTED THE EXPLANATIONS FURNISHED BY HIM FOR MAINLY THE FOLLOWING REASONS. I) NO RECEIPTS OR EVIDENCES OF CASH RECEIPTS AND SALE OF AGRICULTURE PRODUCTS AND SALE OF LAND WAS PRODUCED BEFORE THE ASSESSING OFFICER. II) THE ASSESSEE DID NOT DISCLOSE ANY AGRICULTURAL INCOME IN THE RETURN OF INCOME FILED FOR TH E YEAR UNDER CONSIDERATION. I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 7 III) AS PER THE AVAILABLE INFORMATION, ONLY ONE LAND SALE WAS UNDERTAKEN BY THE ASSESSEE AND THE AMOUNT OF RS.30,22, 000/ - WAS RECEIVED BY CHEQUE WHICH WAS CREDITED INTO THE BANK ACCOUNT OF THE ASSESSEE ON 7.3.2014 AND THE SAME W ERE CONVERTED INTO FIXED DEPOSITS AND THEREFORE SOURCE OF CASH DEPOSITS CANNOT BE EXPLAINED THROUGH SALE OF THIS LAND. IV) THE EXPLANATIONS GIVEN BY THE ASSESSEE WAS VAGUE AND NOT SUPPORTED WITH EVIDENCES. V) THE ASSESSEE IS A SENIOR ADVOCATE AND IT IS P RESUMED THAT HE WOULD BE WELL VERSED WITH LEGAL PROCEEDINGS AND SHOULD HAVE CO - O PERATED WITH THE ASSESSMENT PROCEEDINGS AND SHOULD HAVE CO - OPERATED WITH THE ASSESSMENT PROCEEDINGS. 4.3 AFTER CONSIDERING THE CONTENTIONS OF BOTH, THE ASSESSING OFFICER AND THE ASSESSEE, THE CIT(A) FOUND THAT THE EXPLANATION HAD NOT BEEN FURNISHED PROPERLY. ON THE OTHER HAND, THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER HA D CONCENTRATED ON DEPOSITS MADE ONLY ON 06.3.2014 AND 07.3.2014 AND HE HA D CHOSEN TO IGNORE DEPOSITS AND WITHDRAWALS MADE DURING REST OF THE FINANCIAL YEAR 2013 - 14. THE ASSESSING OFFICER HA D NOT DISPUTED THE FACT THAT THE ASSESSEE IS BASICALLY AN AGRICULTURIST, HAVING SUBSTANTIAL HOLDING OF LAND, AND EVEN THOUGH HE HA D NOT DECLARED ANY AGRICULTURAL INCOME IN HIS RETURN OF I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 8 INCOME FILED, HE MAY BE EARNING AGRICULTURAL INCOME . ACCORDING TO THE CIT(A), U NDER THE EXISTING PROVISIONS OF INCOME TAX ACT, AGRICULTURAL INCOME BECOMES SIGNIFICANT FOR APPLYING RATE OF INCOME TAX, THOUGH THE AGRICULTURAL INCOME PER SE , IS EXEMPT FROM THE INCIDENCE OF TAX. IT WAS ALSO SEEN THAT THE A.O. HA D NOT MADE ANY EFFORTS TO FIND THE SOURCE FROM WHICH THE ASSESSEE WOULD HAVE EARNED SUCH CASH INCOME. IT WAS OBSERVED THAT T HE ASSESSING OFFICER ALSO DID NOT MAKE ANY EFFORTS TO INVEST IGATE, WHETHER THE ASSESSEE WAS ACTUALLY EARNING ANY AGRICULTURAL INCOME . THE ASS ESSING OFFICER ALSO DID NOT GIVE ANY CREDIT FOR EARLIER CASH WITHDRAWALS MADE BY THE ASSESSEE AND CLAIMED TO HAVE BEEN RE - DEPOSITED. THE CIT(A) WAS OF THE VIEW THAT THE COND UCT OF THE ASSESSEE IN SUBMITTING THE DETAILS AND DOCUMENTS REQUISITIONED BY THE ASSESSING OFFICER WAS NOT SATISFACTORY. THUS, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO G IVE CREDIT FOR AGRICULTURAL INCOME, SALE OF LAND AND PAST WITHDRAWALS. THE ASSESSE E HAD ALSO NOT DISCLOSED THE PROFESSIONAL INCOME. THE ASSESSEE TRIED TO PROVE SOURCE BY WAY OF PERSONAL LOAN FROM 3 PEOPLE OF RS. 1 LAKH EACH, FOR WHICH HE HA D NOT FURNISHED EITHER THE CONFIRMATION OR THE PAN OF THE PARTIES CONCERNED. IT WAS OBSERVED THAT NO PRUDENT PERSON WOULD TAKE LOAN, WHEN HE ALREADY HAS SUBSTANTIAL MONEY WITH HIM. SINCE THE ASSESSEE HAD ALSO NOT EXPRESSLY STATED WHETHER THESE WERE CASH LOANS OR NOT TO EXPLAIN THE SOURCE OF THE DEPOSITS, THE CIT(A) DOUBTED THE GENUINENESS OF TRANSAC TION . I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 9 4.4 THUS, TAKING AN OVERALL VIEW OF THE MATTER, THE CIT(A) TREATED THE CLAIM OF RS.3 LAKHS, WHICH WAS OBTAINED AS PERSONAL LOANS AS UNEXPLAINED CASH - CREDITS AND CONFIRMED THE ADDITION OF RS. 3 LAKHS . 5. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 6. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE VIEW THAT THE ASSESSEE HAD NOT BEEN ABLE TO EXPLAIN T HE SOURCES FOR RS.3 LAKHS OUT OF RS.49,22,000/ - DEPOSITED IN VARIOUS BANK ACCOUNTS. IN VIEW OF THE UNSATISFACTORY EXPLANATION OFFERED BY T HE ASSESSEE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND CONFIRM THE ADDITION MADE BY THE ASSESSING OFFICER. 7. THE NEXT ISSUE IS WITH REGARD TO DISALLOWANCE OF RS1,10,000/ - U/S. 80C. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE RECORD. WE FIND THAT NEITHER BEFORE THE LOWER AUTHORITIES NOR BEFORE US, THE ASSESSEE HAS NOT FURNISHED ANY DETAILS TO CLAIM DEDUCTION U/S. 80C OF THE ACT. THE ASSESSEE STATED THAT HIS ONE SON, SHRI VETTATH EAPEN MATHAI WAS STUDYING LLM IN FCMS, A N INSTITUTION FOR MANAGEMENT STUDIES, MANAGED BY FATHIMA EDUCATIONAL TRUST, ICO JUNCTION, PERUNNAL, CHANGANACHERRY . THE ASSESSEE HAS ENCLOSED THE RECEIPTS OF TUITION FEES DATED 28/05/2011, 19/06/2012, 24/09/2012, 04/03/2013, 20/07/2013, 02/03/2014, 14/ 03/2014 AND 2.3.2015. IT WAS I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 10 ALSO STATED THAT HIS ANOTHER SON , SHRI GREGORIOUS THOMAS VETTATH, WAS A MBBS STUDENT OF PONDICHERRY INSTITUTE OF MEDICAL SCIENCES. THE ASSESSEE HAS ENCLOSED THE DETAILS OF TUITION FEES PAID TO THE TUNE OF RS.2,96,000/ - DATED 15/01/2010 . THE ASSESSEE ALSO SUBMITTED THAT HE EARNED INTEREST OF RS.10,000/ - ON SAVINGS BANK ACCOUNT. AS SUCH, HE WAS ENTITLED FOR DEDUCTION U/S. 80TTA OF THE ACT . IN OUR OPINION, THE DEDUCTION CLAIMED U/S. 80C IS TO BE ALLOWED U/S. 80 C (2) ( XVII ) OF THE ACT WHICH STATES THAT TUITION FEE/EDUCATION FEE PAID BY A PARENT TOWARDS EDUCATION OF HIS/HER CHILDREN IS ENTITLED FOR DEDUCTION. THE ASSESSEE IS ENTITLED FOR DEDUCTION TO THE TUNE OF RS.1.5 LAKHS UNDER THIS PROVISION SUBJECT TO THE PROVISION OF SECTION 80C(4)( C ) OF THE ACT ON FURNISHING THE REQUISITE DETAILS. REGARDING DEDUCTION U/S. 80C, THE ASSESSEE HAS NOT PRODUCED ANY DETAILS OF PAYMENT OF TUITION FEES FOR THE YEAR UNDER CONSIDERATION BEFORE AO . AS SUCH, WE REMIT THIS ISSUE TO THE FILE OF THE ASSES SING OFFICER WITH A DIRECTION TO THE ASSESSEE TO FURNISH THE DETAILS OF PAYMENT OF TUITION FEES BEFORE THE ASSESSING OFFICER AND THEREUPON DECIDE THE SAME. 8.1 WITH REGARD TO DEDUCTION U/S. 80TTA, THE ASSESSEE HAS ALSO NOT FURNISHED THE DETAILS OF IN TEREST INCOME EARNED ON SAVING BANK ACCOUNT. AS SUCH, WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO PROVIDE NECESSARY DETAILS. TH ESE GROUND S OF APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURP OSES. I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 11 9. SINCE WE HAVE DECIDED THE ASSESSEES APPEAL, THE STAY PETITION FILED BY THE ASSESSEE IN SP NO.33/COCH/2018 HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS INFRUCTUOUS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR ST A TISTICAL PURPOSES AND THE STAY PETITION FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH FEBRUARY, 2019 SD/ - SD/ - (GEO RGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 25 TH FEBRUARY, 2019 GJ COPY TO: 1 . SHRI MATHAI EAPEN VETTATH, VETTATH SWAROOPAM, NE AR KADUTHURUTHY, NJEEZHOOR P.O. KOTTAYAM - 686 612. 2 THE INCOME TAX OFFICER, NON - CORPORATE, WARD1(3), KOCHI. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) - II, KOCHI. 4 . THE PR. COMMISSIONER OF INCOME - TAX, KOCHI. 5. D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUAR D FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN I.T.A. NO.422/COCH/2018 & S.P. NO.33/COCH/2018 12