Shri Amar Ramchandra Larai, Ahmedabad V. The Income tax Officer,Ward-7(2), Ahmedabad

ITA 431/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0569 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 431/AHD/2011 / ASSESSMENT YEAR : 2006-07 SHRI AMAR RAMCHANDRA LARAI, B-91, GOYAL PARK APARTMENTS, PREMCHANDNAGAR ROAD, VASTRAPUR ROAD, AHMEDABAD PAN : AAGPL 6482 P VS INCOME TAX OFFICER, WARD-7(2), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI ASEEM THAKKAR, AR REVENUE BY : SHRI S.L. CHANDEL, SR DR / DATE OF HEARING : 06/09/2016 / DATE OF PRONOUNCEMENT: 07/09/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD DATED 13.12.2010 FOR AY 2006-07. 2. THE SOLITARY GROUND RAISED IS AS UNDER:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.14,65,200/- MADE BY THE ASSESSIN G OFFICER FOR THE ALLEGED CASH CREDITS U/S 68 OF THE INCOME TAX ACT, 1961 BEIN G THE AMOUNTS OF CASH DEPOSITED IN THE BANK ACCOUNT NOT BELONGING TO THE APPELLANT. 3. THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE IMPUGNED BANK ACCOUNT IS VERY OLD AND OPENED JOINTLY BY THE ASSES SEE AND HIS SISTER SMT. AMRITA RAMCHAND LARAI BEFORE HER MARRIAGE. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE OBSERVATIONS OF THE LD. AO IN PARAGRAPH 3.1 OF THE ASSESSMENT ORDER, WHICH READ AS UNDER:- 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE HAS ASKED TO FURNISH THE SOURCE OF CASH DEPOSITED IN BANK OF RS. 14,65,200/-, WHICH IS REFLECTED IN ANNUAL INFORMATION REPORT. THE ASSESSEE ALONG WITH SHRI SMC-ITA NO. 431/AHD/2011 SHRI AMAR RAMCHANDRA LARAI VS. ITO AY : 2006-07 2 MEHUL MAHTA ATTENDED AND CONTENDED THAT THE SAID AC COUNT IS IN JOINT NAME OF HIS SISTER AND HIMSELF. HE ALSO CONTENDED T HAT ALL THE TRANSACTION IN THIS BANK ACCOUNT WAS DONE BY HIS BROTHER-IN-LAW WH O HAS PASSED AWAY IN A TRAGIC ROAD ACCIDENT. HIS SISTER HAS NO CLUE ABOUT THESE TRANSACTIONS. THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE. BECAU SE THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 10,06,000/-, FROM HER SISTER. HIS SISTER MS AMRITA LARAI IS NOT ASSESSED TO TAX AND ALSO SHE DOES NOT HAVE ANY PAN. THE SAID AMOUNT OF LOAN HAS BEEN GIVEN BY HER SISTER FROM TH E SAME BANK ACCOUNT IN WHICH THE CASH IS DEPOSITED. THE ASSESSEE WAS ASKE D TO SHOW-CAUSE, VIDE ORDER SHEET ENTRY DATED 22.12.08,WHY THE SAID AMOUNT SHO ULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT AS ASSESSEE HAS FAILED TO P ROVE THE CREDITWORTHINESS OF THE PERSON. THE ASSESSEE VIDE ITS REPLY DTD. 29. 12.08 HAS SUBMITTED AS UNDER: A) THE BANK ACCOUNT IN WHICH THIS AMOUNT WAS FOUND DEPOSITED IS HELD IN THE JOINT NAME OF THE ASSESSEE AND HIS REAL SISTER, MRS .AMRITA LARAI. B) THE SAID AMOUNT WAS OPENED BEFORE MARRIAGE OF MR S.LARAI AND WAS NEVER USED BY THE ASSESSEE AND HAS NEVER BEEN SHOWN BY HI M IN HIS BOOKS OF ACCOUNTS. C) THE SAID AMOUNT WAS USED BY ASSESSEE'S SISTER AN D AS FOLLOWED BY MAJORITY OF FAMILY IN INDIA, HER HUSBAND WAS HANDLING ALL BA NKING TRANSACTIONS SHE ONLY USED TO SIGN THE CHEQUES AND OTHER DOCUMEN TS AS PER HER HUSBAND'S INSTRUCTIONS D) UNFORTUNATELY, HUSBAND OF MRS LARAI EXPIRED TWO YEARS BACK AND THIS HAS CAUSED LOT OF TROUBLES TO MRS.LARAI AS HE WAS SOLE MEMBER HANDLING ALL FINANCIAL TRANSACTIONS AND SHE OBVIOUSLY WAS NOT IN POSITION TO EXPLAIN ANY OF THE FINANCIAL TRANSACTIONS ENTERED INTO BY H ER HUSBAND IN HER NAME. E) THE ASSESSES HAS ALSO GIVEN A WRITTEN STATEMENT TO ABOVE EFFECT AND HER SISTER IS ALSO AVAILABLE TO CONFIRM ABOVE FAC TS. F) TO CONSIDER ANY SUCH SUM AS INCOME OF THE ASSESS EE, PER-REQUISITE CONDITIONS ARE ABSENCE OF ANY EXPLANATIONS AS TO IT S NATURE AS WELL AS SOURCE. IN THE CASE UNDER CONSIDERATION, THE ASSESS EE HAS FURNISHED BOTH SOURCE AS WELL AS NATURE. THE ONLY THING THAT HE WA S NOT ABLE TO PRODUCE IS ULTIMATE SOURCE OF INCOME OF THE PERSON TO WHOM THIS AMOUNT BELONGS TO. SINCE THE REASON OF NOT PRODUCING THE ABOVE WAS OUT OF HIS CONTROL (DEATH OF HIS BROTHER-IN-LAW, WHO WAS ON POSSESSION OF THESE FACTS), SAID AMOUNT IN NO CASE BE CONSIDERED AS HIS INCOME AND T HEREFORE, ADDED TO HIS INCOME. SMC-ITA NO. 431/AHD/2011 SHRI AMAR RAMCHANDRA LARAI VS. ITO AY : 2006-07 3 3.1 IT IS CONTENDED THAT THE LD. ASSESSING OFFICER ISSUED SHOW-CAUSE NOTICE VIDE ORDER SHEET ENTRY DATED 22.12.2008 WHICH WAS P ROMPTLY REPLIED BY THE ASSESSEE ON 29.12.2008 INFORMING THE AO THAT HIS SI STER SMT. AMRITA RAMCHAND LARAI (MAIDEN NAME) WAS WILLING TO APPEAR BEFORE THE LD. AO TO CONFIRM THE ABOVE FACTS. THE LD. AO DID NOT VERIF Y THE FACTS FROM THE ASSESSEES SISTER AND THE ENTIRE CREDITS IN THE JOI NT ACCOUNT WERE ADDED IN THE ASSESSEES HANDS. 3.2 LD. CIT(A), THOUGH AGREED WITH ALL THE FACTS, H OWEVER, WITHOUT CONTROVERTING THE ASSESSEES SISTERS AFFIDAVIT FIL ED BY THE ASSESSEE AND WITHOUT CALLING HER FOR VERIFICATION, SUMMARILY CON FIRMED THE ADDITION BY FOLLOWING OBSERVATIONS:- 3.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND T HE SUBMISSION MADE BY THE ASSESSEE. FROM THE STATEMENT OF BANK A/C. NO.10 7 OF INDIAN OVERSEAS BANK, SATELLITE BRANCH, AHMEDABAD, IT IS NOTICED THA T THE ACCOUNT IS IN THE JOINT NAME OF AMRITA LARAI AND AMAR LARAI. THEREFORE , THE CONTENTION OF THE APPELLANT THAT THE ACCOUNT IS IN THE JOINT NAME OF THE ASSESSEE AND HIS SISTER IS FOUND TO BE CORRECT. FURTHER, THE CERTIFICATE OF D EATH FILED BY THE ASSESSEE MAKES IT CLEAR THAT SHRI ANIL A. BAJAJ, HUSBAND OF MS . AMRITA LARAI EXPIRED IN OCTOBER, 2006 AND THE ACCOUNT IS OPERATED BY THE DECEASEDS WIFE I.E. ASSESSEES SISTER. THIS IS FURTHER PROVED BY THE A FFIDAVIT FURNISHED BY THE ASSESSEES SISTER MS. AMRITA LARAI. IN THE AFFIDAV IT IT IS STATED THAT THOUGH THE ACCOUNT WAS JOINTLY OPENED WITH HER REAL BROTHE R MR. AMAR LARAI IN 1998 BEFORE MARRIAGE, IT IS SOLELY OPERATED BY AMRITA LAR AI AND THAT THE AMOUNT OF RS.14,65,200/- DEPOSITED IN THE ACCOUNT BELONGED TO HER. AS REGARDS TO THE SOURCE OF RS.14,65,200/-, SHE COULD NOT SAY ANYTHIN G AS IT IS STATED THAT THE FINANCIAL MATTERS WERE HANDLED BY HER HUSBAND MR. AN IL BAJAJ, WHO EXPIRED IN OCTOBER, 2006 AND THERE WAS ENOUGH FUNDS WITH TH E SISTER OF THE ASSESSEE TO PROVIDE LOAN TO THE ASSESSEE. THE APPELLANT OR H IS SISTER AMRITA LARAI HAS NOT PROVED THE SOURCE OF THE AMOUNT OF RS.14,65,500 /-. CONSIDERING THE ABOVE, IT CAN BE SAID THAT THE ONUS CAST UPON THE A SSESSEE TO EXPLAIN THE SOURCE OF THE AMOUNT OF RS.14,65,200/- IS NOT PROVE D. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO OF RS.14,65,200/- IS HER EBY UPHELD. THE APPEAL IS DISMISSED. SMC-ITA NO. 431/AHD/2011 SHRI AMAR RAMCHANDRA LARAI VS. ITO AY : 2006-07 4 3.3 IT IS CONTENDED THAT THE LD. AO FAILED TO CROSS -EXAMINE THE ASSESSEES SISTER WHO WAS WILLING TO APPEAR BEFORE HIM AND THE LD. CIT(A) WITHOUT CONTROVERTING THE AFFIDAVIT EITHER BY CALLING THE A SSESSEES SISTER SMT. AMRITA RAMCHAND LARAI SUMMARILY HELD THAT SHE COULD NOT S AY ANYTHING ON THIS ISSUE. WHEN THE SISTER OF THE ASSESSEE WAS NEVER CALLED BY ANY AUTHORITY, THERE IS NO JUSTIFICATION IN THE FINDING THAT SHE COULD NOT SAY ANYTHING. THEREFORE, THE ADDITION IS BASED ON SURMISES, CONJE CTURES AND AGAINST THE FACTS ON RECORDS. 4. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. I FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. THE IMPUGNED BANK ACCOUNT IN QUESTION WAS JOINTLY HELD BY THE ASSESSE E AND HIS SISTER SMT. AMRITA RAMCHAND LARAI BEFORE HER MARRIAGE. THE REC ORD INDICATES THAT AFTER THE MARRIAGE, THE BANK ACCOUNT WAS OPERATED BY HER SISTER. BEFORE THE LD. AO, SHE WAS WILLING TO APPEAR AND VERIFY THE FACTS. BESIDES, THE WRITTEN CONFIRMATION WAS FILED. SHE WAS NEVER CROSS-EXAMIN ED BY THE AO AND THE ENTIRE CREDIT AMOUNT OF THE JOINT ACCOUNT WAS ADDED IN THE HANDS OF THE ASSESSEE. 5.1 THOUGH THE LD. CIT(A) ACCEPTED ALL THESE FACTS; HOWEVER, WITHOUT CALLING SMT. AMRITA RAMCHAND LARAI HELD THAT SHE C OULD NOT SAY ANYTHING. THUS, THE FINDING OF THE LD. CIT(A) IN THIS REGARD IS NOT BASED ON ANY FACTS ON RECORD. THUS, THE AFFIDAVIT AND WRITTEN STATEMENT OF THE ASSESSEES SISTER REMAINED UNCONTROVERTED. WHEN THE RECORD SUGGESTS THAT THE BANK WAS OPERATED BY ASSESSEES SISTER, THERE IS NO JUSTIFIC ATION IN CONSIDERING THE SMC-ITA NO. 431/AHD/2011 SHRI AMAR RAMCHANDRA LARAI VS. ITO AY : 2006-07 5 ADDITION IN THE HANDS OF THE ASSESSEE. BESIDES, IN CASE OF JOINT ACCOUNT, THE ENTIRE AMOUNT COULD NOT HAVE BEEN ADDED IN THE HAND S OF THE ASSESSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, I SEE NO JUS TIFICATION IN THE ADDITION IN QUESTION BEING MADE IN THE HANDS OF THE ASSESSEE AN D THEREFORE, THE SAME IS DELETED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 7 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 07/09/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD