Sri.Tono Thomas, Cochin V. The DCIT, Ernakulam

ITA 439/COCH/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8548 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 11-05-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 19-08-2015
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: A GOPALAKRISHNAN
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Principle of natural justice; Source of fund; Corroborative evidences; Reassessment proceedings
• Section: 143(3); 69; 148; 139

Judgement Text

ITA NOS.439&440//COCH/2015 1 IN THE INCOME TAX APPEL LATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE.K, JM ITA NOS.439&440/COCH/2015 (ASST YEARS : 2003-04 & 2004-05) SHRI TONO THOMAS, FLAT NO.12A, EXPRESS ESTATE, KALOOR, KOCHI-682 017. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2(2), ERNAKULAM. ( ASSESSEE APPELLANT) VS (REVENUE -RESPONDENT) PAN NO. ABPPT 6266M ASSESSEE BY SHRI A. GOPALAKRISHNAN, CA REVENUE BY SHRI SHANTAM BOSE, CIT(DR) DATE OF HEARING 11/05/2016 DATE OF PRONOUNCEMENT 07/06/2016 ORDER PER B.P. JAIN, AM THESE TWO APPEALS OF THE ASSESSEE ARISE FROM TWO DI FFERENT ORDERS OF THE LD. CIT(A)-II, KOCHI EACH DATED 08/06/2015 FOR THE ASSE SSMENT YEARS 2003-04 AND 2004-05. 2. THE ISSUES IN BOTH THE APPEALS ARE IDENTICAL A ND THEREFORE, BOTH THE APPEALS ARE BEING TAKEN UP BY THIS CONSOLIDATED ORDER. ITA NOS.439&440//COCH/2015 2 3. THE ASSESSEE IN I.T.A. NO. 439/COCH/2015 HAS RA ISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAD GROSSLY ERRED AND WENT WR ONG IN CONFIRMING THE ILLEGAL INITIATION OF THE PROCEEDINGS U/S. 148 OF T HE INCOME TAX ACT WITHOUT COMPLYING WITH THE APPLICABLE PROVISIONS OF SECTION 148 READ WITH 147 OF THE INCOME TAX ACT. THE LEARNED CIT(A) SHOULD HAVE HEL D SET ASIDE THE ASSESSMENT AS THE LEARNED ASSESSING AUTHORITY DID N OT FULFIL THE CONDITIONS STIPULATED U/S. 148 TO INITIATE REASSESSMENT PROCEE DINGS. FOR THIS REASON, THE LEARNED CIT SHOULD HAVE HELD THAT THE ORDER OF THE LEARNED ASSESSING AUTHORITY U/S. 147 READ WITH SECTION 143 OF THE INC OME TAX ACT IS BAD IN LAW AND HENCE NOT SUSTAINABLE. 2. THE LEARNED CIT FAILED TO APPRECIATE THE FACT T HAT ASSESSING AUTHORITY DID NOT RECORD THE REASONS FOR ISSUE OF NOTICE U/S. 148 OF THE INCOME TAX ACT AND THE ASSESSING AUTHORITY FAILED TO RECOGNIZE THAT TH E APPELLANT HAD DISCLOSED ALL MATERIAL FACTS AND PARTICULARS REGARDING THE CA PITA CONTRIBUTION MADE BY HIM IN THE FIRM TANVEST PROPERTIES NECESSARY FOR TH E PURPOSE OF ASSESSMENT AND ALL THE INFORMATION, PARTICULARS AND DATA RELIE D ON BY THE ASSESSING AUTHORITY TO COMPLETE THE REASSESSMENT U/S. 147 OF THE INCOME TAX ACT WERE ALREADY AVAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF THE ASSESSMENT OF M/S. TANVEST PROPERTIES, THE FIRM IN WHICH THE APPE LLANT IS A PARTNER. THUS, THE LD. CIT(A) GROSSLY ERRED IN NOT ACCEPTING THE SETTL ED LAW ON THE BASIS OF THE RELEVANT FACTS THAT THE ASSESSING AUTHORITY HAD WIT HOUT JURISDICTION WRONGLY INVOKED THE PROVISIONS OF SECTION 148 READ WITH SEC TION 147 OF THE INCOME TAX ACT AND THE ASSESSMENT MADE ON THE BASIS OF SUCH WR ONG APPLICATION OF THE RELEVANT PROVISIONS OF SECTION 147 OF THE INCOME TA X ACT IS ILLEGAL, INCORRECT AND HENCE TO BE CANCELLED. THE LEARNED CIT, FOR THE ABOVE REASONS, SHOULD HAVE SET ASIDE THE ASSESSMENT AS IT WAS OPPOSED TO THE SETTLED PROVISIONS OF LAW. 3. UNDER THE CIRCUMSTANCES AND ON THE FACTS OF THE MATTER UNDER CONSIDERATION, THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS)-II, KOCHI GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.27,3 4,000/- MADE BY THE ASSESSING AUTHORITY U/S. 68/69 OF THE INCOME TAX AC T AGAINST AVAILABLE EVIDENCES ON RECORD AND SETTLED PROVISION OF LAW. 4. THE LEARNED COMMISSIONER FAILED TO APPRECIATE THAT THE APPELLANT AND HIS FAMILY MEMBERS VIZ. PARENTS, WERE HAVING SUFFICIENT AND VALID SOURCES FOR THE ENTIRE AMOUNT INVESTED TOWARDS THE CAPITAL IN THE F IRM M/S. TANVEST PROPERTIES AND CONSEQUENTLY THE SAID INVESTMENT OF RS.27,34,00 0/- SHOULD NOT HAVE BEEN ITA NOS.439&440//COCH/2015 3 ASSESSED TO TAX AS UNEXPLAINED INVESTMENT/UNEXPLAIN ED CREDITS AS PROVIDED U/S. 68/69 OF THE INCOME TAX ACT. 5. THE LEARNED COMMISSIONER FAILED TO UNDERSTAND FR OM THE DETAILED CASH FLOW/MOVEMENT STATEMENT, TOGETHER WITH SUPPORTING E VIDENCES AND DOCUMENTS, SUCH AS DEEDS FOR SALE AND PURCHASE OF T HE PROPERTIES, PHOTO COPIES OF THE DEPOSIT SLIPS FOR THE REMITTANCE OF T HE CHEQUES/DRAFTS IN THE BANK ACCOUNTS, CERTIFICATES FROM THE BANKS REGARDIN G THE REMITTANCE IN FOREIGN CURRENCY RECEIVED FROM THE UNCLE OF THE APP ELLANT RESIDING ABROAD, THAT THE FAMILY OF THE APPELLANT WAS HAVING SUFFICI ENT FINANCIAL CAPACITY UNDER VARIOUS SOURCES FOR A TOTAL AMOUNT OF RS.1,09 ,41,509/- AND AGAINST THIS, THE CAPITAL CONTRIBUTED IN THE FIRM TANVEST PROPERT IES DURING THIS FINANCIAL YEAR WAS ONLY RS.39,33,505/-. THE LEARNED COMMISSIONER SHOULD HAVE RIGHTLY ACCEPTED AS GENUINE THE SOURCES FOR THE CAPITAL CON TRIBUTION MADE IN THE FIRM TANVEST PROPERTIES AFTER CONSIDERING THE DATE WISE EXPLANATION AND OTHER DOCUMENTARY EVIDENCES FURNISHED IN SUPPORT OF THE S AID CONTRIBUTION MADE TOWARDS THE CAPITAL OF THE FIRM ON THE RESPECTIVE D ATES. 6. THE LEARNED COMMISSIONER WAS WRONG IN CONFIRMIN G THE ADDITION OF RS.27,34,000/- MADE BY THE ASSESSING AUTHORITY AGAI NST THE CAPITAL CONTRIBUTED IN THE FIRM M/S. TANVEST PROPERTIES BY TAKING A NARROW VIEW WITHOUT VERIFYING THE CASH FLOW STATEMENT AND OTHER DOCUMENTS, SUCH AS COPIES OF THE BANK STATEMENTS, COPIES OF THE REMITT ANCE SLIPS RECEIVED FROM THE BANK, COPIES OF THE PURCHASE DEEDS AND SALE DEE DS OF THE PROPERTIES PURCHASED AND SOLD DURING THE PERIOD FROM 1995 TO 2 004 AND SUCH OTHER DOCUMENTS FURNISHED AT THE TIME OF THE HEARING OF T HE APPEAL ON VARIOUS DATES IN SUPPORT OF THE SAID CONTRIBUTION MADE TOWA RDS CAPITAL ON THE RESPECTIVE DATES DURING THE YEAR. 7. OTHER GROUNDS AS SHALL BE URGED AT THE TIME OF H EARING OF THE CASE. 4. THE ASSESSEE IN I.T.A. NO. 440/COCH/2015 HAS RA ISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAD GROSSLY ERRED AND WENT WR ONG IN CONFIRMING THE ILLEGAL INITIATION OF THE PROCEEDINGS U/S. 148 OF T HE INCOME TAX ACT WITHOUT COMPLYING WITH THE APPLICABLE PROVISIONS OF SECTION 148 READ WITH 147 OF THE INCOME TAX ACT. THE LEARNED CIT(A) SHOULD HAVE HEL D SET ASIDE THE ASSESSMENT AS THE LEARNED ASSESSING AUTHORITY DID N OT FULFIL THE CONDITIONS STIPULATED U/S. 148 OF THE INCOME TAX ACT TO INITIA TE REASSESSMENT PROCEEDINGS. FOR THIS REASON, THE LEARNED CIT SHOU LD HAVE HELD THAT THE ORDER ITA NOS.439&440//COCH/2015 4 OF THE LEARNED ASSESSING AUTHORITY U/S. 147 READ WI TH SECTION 143 OF THE INCOME TAX ACT IS BAD IN LAW AND HENCE NOT SUSTAINA BLE. 2. THE LEARNED CIT FAILED TO APPRECIATE THE FACT T HAT ASSESSING AUTHORITY DID NOT RECORD THE REASONS FOR ISSUE OF NOTICE U/S. 148 OF THE INCOME TAX ACT AND FURTHER THE ASSESSING AUTHORITY FAILED TO RECOGNIZE THAT THE APPELLANT HAD DISCLOSED ALL MATERIAL FACTS AND INFORMATION AS REQ UIRED U/S. 139 OF THE ACT REGARDING THE CAPITAL CONTRIBUTION MADE BY HIM IN T HE FIRM TANVEST PROPERTIES NECESSARY FOR THE PURPOSE OF ASSESSMENT AND ALL THE INFORMATION, PARTICULARS AND DATA RELIED ON BY THE ASSESSING AUTHORITY TO CO MPLETE THE REASSESSMENT U/S. 147 OF THE INCOME TAX ACT WERE AVAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF THE ASSESSMENT OF M/S. TANVEST PROPERTI ES, THE FIRM IN WHICH THE APPELLANT IS A PARTNER. THUS, THE LEARNED CIT(A) G ROSSLY ERRED IN NOT ACCEPTING THE SETTLED LAW ON THE BASIS OF SUCH WRONG APPLICAT ION OF THE RELEVANT FACTS THAT THE ASSESSING AUTHORITY HAD, WITHOUT JURISDICT ION, WRONGLY INVOKED THE PROVISIONS OF SECTION 148 READ WITH SECTION 147 OF THE INCOME TAX ACT AND THE ASSESSMENT MADE ON THE BASIS OF SUCH WRONG APPLICAT ION OF THE RELEVANT PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT IS ILLEGAL, INCORRECT AND HENCE TO BE CANCELLED. THE LEARNED CIT, FOR THE ABOVE REA SONS, SHOULD HAVE SET ASIDE THE ASSESSMENT AS IT WAS OPPOSED TO THE SETTL ED PROVISIONS OF LAW. 3. UNDER THE CIRCUMSTANCES AND ON THE FACTS OF THE MATTER UNDER CONSIDERATION, THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS)-II, KOCHI GROSSLY ERRED IN CONFIRMING THE ILLEGAL AND INCORRE CT ADDITION OF RS.29,63,000/- MADE BY THE ASSESSING AUTHORITY U/S. 68/69 OF THE I NCOME TAX ACT AGAINST THE RELEVANT FACTS AND SETTLED PROVISIONS OF LAW. 4. THE LEARNED COMMISSIONER FAILED TO APPRECIATE THAT THE APPELLANT AND HIS FAMILY MEMBERS VIZ. PARENTS, WERE HAVING SUFFICIENT AND VALID SOURCES FOR THE SUM OF RS.29,63,000/- INVESTED BY HIM TOWARDS THE C APITAL IN THE FIRM M/S. TANVEST PROPERTIES AND CONSEQUENTLY THE SAID INVEST MENT OF RS.29,63,000/- SHOULD NOT HAVE BEEN ASSESSED TO TAX AS UNEXPLAINED INVESTMENT/UNEXPLAINED CREDITS AS PROVIDED U/S. 68/ 69 OF THE INCOME TAX ACT. 5. THE LEARNED COMMISSIONER FAILED TO UNDERSTAND FR OM THE DETAILED CASH FLOW/MOVEMENT STATEMENT, TOGETHER WITH SUPPORTING E VIDENCES AND DOCUMENTS, SUCH AS DEEDS FOR SALE AND PURCHASE OF T HE PROPERTIES, PHOTO COPIES OF THE DEPOSIT SLIPS FOR THE REMITTANCES OF THE CHEQUES/DRAFTS IN THE BANK ACCOUNTS, CERTIFICATES FROM THE BANKS REGARDIN G THE REMITTANCE IN FOREIGN CURRENCY RECEIVED FROM THE UNCLE OF THE APP ELLANT RESIDING ABROAD, THAT THE FAMILY OF THE APPELLANT WAS HAVING SUFFICI ENT FINANCIAL CAPACITY UNDER VARIOUS SOURCES FOR A TOTAL AMOUNT OF RS.1,09 ,41,509/- AND AGAINST THIS, THE CAPITAL CONTRIBUTED IN THE FIRM TANVEST PROPERT IES DURING THIS FINANCIAL YEAR WAS ONLY RS.29,63,000/-. THE LEARNED COMMSSIONER S HOULD HAVE RIGHTLY ITA NOS.439&440//COCH/2015 5 ACCEPTED AS GENUINE THE SOURCES FOR THE CAPITAL CON TRIBUTION OF RS.29,63,000/- MADE IN THE FIRM TANVEST PROPERTIES AFTER CONSIDERING THE DATE WISE EXPLANATION AND OTHER DOCUMENTARY EVIDENCES FU RNISHED IN SUPPORT OF THE SAID CONTRIBUTION MADE TOWARDS THE CAPITAL OF T HE FIRM ON THE RESPECTIVE DATES. 6. THE LEARNED COMMISSIONER SERIOUSLY ERRED IN CON FIRMING THE ADDITION OF RS.29,63,000/- MADE BY THE ASSESSING AUTHORITY AGAI NST THE CAPITAL CONTRIBUTED IN THE FIRM M/S. TANVEST PROPERTIES BY TAKING A NARROW VIEW WITHOUT VERIFYING THE CASH FLOW STATEMENT AND OTHER DOCUMENTS, SUCH AS COPIES OF THE BANK STATEMENTS, COPIES OF THE REMITT ANCE SLIPS RECEIVED FROM THE BANK, COPIES OF THE PURCHASE DEEDS AND SALE DEE DS OF THE PROPERTIES PURCHASED AND SOLD DURING THE PERIOD FROM 1995 TO 2 004 AND SUCH OTHER DOCUMENTS FURNISHED AT THE TIME OF THE HEARING OF T HE APPEAL ON VARIOUS DATES IN SUPPORT OF THE SAID CONTRIBUTION MADE TOWA RDS CAPITAL ON THE RESPECTIVE DATES DURING THE YEAR. 7. OTHER GROUNDS AS SHALL BE URGED AT THE TIME OF H EARING OF THE CASE. 5. . SINCE THE ISSUES IN BOTH THE APPEALS ARE IDENTICAL AS MENTIONED HEREINABOVE, BOTH THE APPEALS ARE BEING TAKEN UP BY THIS CONSOLI DATED ORDER AS UNDER: 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE IS A PARTNER IN THE FIRM M/S. TANVEST PROPERTIES. THE ASSESSEE SUBMITTED THE RETU RNS OF INCOME FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 ON 28-01-2004 AND 01-11-2004 DECLARING THE INCOME OF RS.1,94,610/- AND RS.4,10,250/- RESPE CTIVELY. 7. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTI CE U/S. 148 TO RE-OPEN THE ASSESSMENT FOR BOTH THE ASSESSMENT YEARS AND THE AS SESSEE FILED THE RETURN OF INCOME ON 26-02-2008 DECLARING THE SAME INCOME FOR BOTH THE YEARS AS ITA NOS.439&440//COCH/2015 6 DECLARED IN THE ORIGINAL RETURN. THE ASSESSMENT U/ S. 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED FOR BOTH THE YEARS DETERMINING THE TO TAL INCOME AT RS.29,28,610/- AND RS.33,73,250/- WITH AN ADDITION OF RS.27,34,000 /- AND RS.29,63,000/- RESPECTIVELY. 8. DURING THE YEARS UNDER CONSIDERATION, THE ASSE SSEE MADE INVESTMENTS TOWARDS THE CAPITAL CONTRIBUTION IN THE FIRM M/S. T ANVEST PROPERTIES AS PER DETAILS SHOWN BELOW: FINANCIAL YEAR IN WHICH INVESTMENT WAS MADE CAPITAL CONTRIBUTION IN THE FIRM TANVEST PROPERTIES (AMOUNT:RS. 2002-03 45,59,000 2003-04 29,63,000 TOTAL 75,22,000 THE TOTAL OF THE INVESTMENTS MADE IN THE CAPITAL OF THE FIRM DURING THE FINANCIAL YEARS 2002-03 AND 2003-04 WAS RS.75,22,000/-. AGAI NST THIS THE ASSESSING OFFICER ACCEPTED THE SOURCE FOR THE INVESTMENT FOR AN AMOUN T OF RS.18,25,000/- AND THE ITA NOS.439&440//COCH/2015 7 BALANCE AMOUNT OF RS.56,97,000/- WAS TREATED AS UNE XPLAINED INVESTMENTS. FOR THIS AMOUNT OF RS.56,97,000/-, THE ASSESSING OFFICE R DID NOT ACCEPT THE EXPLANATION FURNISHED BY THE ASSESSEE FOR THE SOURC E OF THE INVESTMENTS MADE. THE YEAR-WISE BREAKUP OF THE ADDITION TO THE TOTAL INCOME MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) I S GIVEN BELOW: SL.NO. DESCRIPTION ASSESSMENT YEAR 2003-04 2004- 05 RS. RS. TOTAL 1. GROSS INVESTMENT MADE TOWARDS CAPITAL IN THE FIRM 45,59,000 29,63,000 75,22,000 2. INVESTMENT FOR WHICH EXPLANATIONS OF THE APPELLANT WERE ACCEPTED BY THE ASSESSING AUTHORITY 18,25,000 00.00 18,25,000 3. NET ADDITION MADE TO THE INCOME RETURNED TOWARDS UNEXPLAINED INVESTMENTS 27,34,000 29,63,000 56,97,000 9. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THE EXPLANATION WHICH WAS SENT TO THE ASSESSING OFFICER FOR REPORT AND COUNTER SUB MISSIONS WERE MADE TO THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE REMA ND REPORT AND THE SUBMISSIONS OF THE ASSESSEE CONFIRMED THE ACTION OF THE ASSESSI NG OFFICER. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. IT WAS SUBMITTED BY THE ASSESSEE THAT DURING THE COURS E OF ASSESSMENT AND APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED A CA SH FLOW/MOVEMENT STATEMENT FOR THE PERIOD FROM 1995 TO 31-03-2004 SH OWING THE FULL PARTICULARS IN A ITA NOS.439&440//COCH/2015 8 SUMMARY FORM, OF THE VARIOUS SOURCES OF FUNDS OF TH E APPELLANT AND THE CORRESPONDING INVESTMENTS IN DIFFERENT ASSETS. THE APPELLANT ALSO FURNISHED DETAILED EXPLANATIONS WITH SUPPORTING DOCUMENTARY E VIDENCES FOR THE CAPITAL INTRODUCED ON EACH DATE DURING THE RELEVANT PREVIOU S YEARS 2002-03 AND 2003- 04 FOR A TOTAL SUM OF RS.75,22,000/-. THE ASSESSEE ALSO PRODUCED COPY OF THE PERSONAL BANK STATEMENTS IN THE NAME OF THE ASSESSE E AND OTHER SUPPORTING EVIDENCES TO ESTABLISH THE CREDITS ON EACH DATE. THE APPELLANT SUBMITTED THE RETURNS OF INCOME ORIGINALLY FOR THE ASSESSMENT YEA RS 2003-04 AND 2004-05 AS PER THE DETAILS SHOWN BELOW: SL. NO. ASSESSMENT YEAR DATE OF FILING RETURN ACKNOWLEDGMENT NO. INCOME OFFERED FOR ASSESSMENT (RS.) 1. 2003-04 28-01-2004 0421005344 1,94,6 10/- 2. 2004-2005 01-11-2004 0241004701 4,10 ,250/- THE RETURN WAS PROCESSED INITIALLY U/S. 143(1) OF T HE INCOME TAX ACT ACCEPTING THE INCOME OFFERED FOR ASSESSMENT VIDE ORDER U/S. 143(1 ) DATED 19/07/2004 FOR THE ASSESSMENT YEAR 2003-04. 11. IT WAS ARGUED THAT THE ASSESSEE HAD DISCLOSED ALL THE MATERIAL FACTS AND PARTICULARS REGARDING THE CAPITAL CONTRIBUTION MADE BY THE ASSESSEE IN THE FIRM, M/S. TANVEST PROPERTIES NECESSARY FOR THE PURPOSE O F ASSESSMENT AND ALL THE INFORMATION, PARTICULARS AND DATA RELIED UPON BY TH E ASSESSING OFFICER TO COMPLETE THE REASSESSMENT U/S. 147 OF THE ACT WERE ALREADY AVAILABLE WITH THE ITA NOS.439&440//COCH/2015 9 ASSESSING OFFICER AT THE TIME OF ASSESSMENT OF M/S. TANVEST PROPERTIES, THE FIRM IN WHICH THE ASSESSEE IS A PARTNER. 12. AS REGARDS THE LEGAL ISSUE, RAISED BY THE ASS ESSEE IN GROUND NOS. 1 & 2, IT WAS HELD BY THE LD. CIT(A) THAT SINCE THE ASSESSMENT HA S BEEN REOPENED ON THE BASIS OF INFORMATION AVAILABLE THAT THE ASSESSEE HAS MADE SUBSTANTIAL CAPITAL INVESTMENT IN TANVEST PROPERTIES, THE SOURCE OF WHI CH WAS NOT REFLECTED IN THE RETURN OF INCOME AND ACCORDINGLY, IT WAS FOUND THAT THE ASSESSING OFFICER WAS CORRECT IN HOLDING THAT INCOME HAS ESCAPED ASSESSME NT AND CONSEQUENTLY REOPENING OF THE CASE WAS CORRECT AND VALID. ACCOR DINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN THIS RE GARD AND GROUND NOS. 1&2 OF THE ASSESSEE ARE DISMISSED. 13. AS REGARDS THE REMAINING GROUNDS ON MERIT, TH E BRIEF FACTS ON MERIT IN THE PRESENT CASE ARE THAT THE ASSESSEE IS A PARTNER IN THE FIRM M/S. TANVEST PROPERTIES FORMED ON 20-11-2012 WITH FOLLOWING PARTNERS: A. SHRI TONO THOMAS B. SMT. SIJO TONO THE FIRM SUBMITTED ITS FIRST RETURN OF INCOME FOR T HE ASSESSMENT YEAR 2004-05 DECLARING AN INCOME OF RS. 21,14,864/-. THEREAFTER THE FIRM WAS REGULARLY SUBMITTING ITA NOS.439&440//COCH/2015 10 ITS RETURN OF INCOME ON THE DUE DATES. THIS FIRM WAS FORMED WITH THE MAIN OBJECT OF MAKING INVESTMENTS IN PROPERTIES FOR CARRYING OU T AGRICULTURAL OPERATIONS AND ALSO EARNING INCOME FROM SALE OF INVESTMENTS MADE I N PROPERTIES THUS THE FIRM WAS ENGAGED IN THE ACTIVITIES INVOLVING CARRYING OU T AGRICULTURAL OPERATIONS AND ALSO EARNING INCOME AGAINST SALE OF THE OTHER PROPE RTIES PURCHASED AS INVESTMENTS. THE ASSESSMENT OF THE FIRM FOR THE AS SESSMENT YEAR 2004-05 WAS ORIGINALLY COMPLETED, WITH AN ADDITION OF RS.29,63, 000/- MADE U/S. 68/69 OF THE ACT BY THE DEPUTY COMMISSIONER OF INCOME TAX AS PER HIS ORDER DATED 29/12/2006. THIS ADDITION MADE TOWARDS UNEXPLAINED CREDITS IN T HE CAPITAL ACCOUNT IN THE NAME OF THE ASSESSEE, MR. TONO THOMAS IN THE FIRM. THE FIRM FILED AN APPEAL AGAINST THIS ORDER BEFORE THE LD. CIT(A) AND THIS A PPEAL WAS ALLOWED VIDE ORDER DATED 30-03-2007 AND THE ADDITION OF RS.29,63,000/- WAS DELETED BOTH ON MERITS AND ON LEGAL GROUNDS. THE COPY OF THE ORDER OF THE CIT(A) DATED 30/03/2007 IS PLACED ON RECORD. THE REVENUE CHALLENGED THE ORDER IN THE APPEAL BEFORE THE ITAT. THE ITAT REMANDED THE MATTER BACK TO THE ASSE SSING OFFICER AS PER THE ORDER DATED 29/08/2008 WITH THE DIRECTION TO VERIFY THE V ARIOUS DOCUMENTS FURNISHED BY THE ASSESSEE FIRM IN SUPPORT OF THE GENUINENESS OF THE SOURCE FOR THE CREDITS IN THE CAPITAL ACCOUNT OF THE PARTNER NAMELY MR. TONO THOM AS, THE ASSESSEE IN THIS APPEAL. THE COPY OF THE ORDER OF THE ITAT IS PLACE D ON RECORD. IN THE PROCEEDINGS DATED 30/12/2009 COMPLETED TO GIVE EFFE CT TO THE DIRECTIONS CONTAINED IN THE APPELLATE ORDER DATED 29/08/2008 O F THE TRIBUNAL IN RESPECT OF M/S. TANVEST PROPERTIES REFERRED TO ABOVE, THE ASSE SSING OFFICER ONCE AGAIN, IN A ITA NOS.439&440//COCH/2015 11 MECHANICAL MANNER, WITHOUT MAKING ANY EFFORT TO VER IFY THE DOCUMENTARY EVIDENCES AND RELATED RECORDS RELEVANT TO THE MATTE R MADE AN ADDITION OF RS.29,63,000/- TOWARDS CREDITS IN THE CAPITAL ACCOU NT OF THE PARTNER SHRI TONO THOMAS TREATING ONCE AGAIN THE SAID CREDITS IN THE CAPITAL ACCOUNT OF THE PARTNER SHRI TONO THOMAS TREATING ONCE AGAIN THE SAID CREDI TS AS UNEXPLAINED. SIMULTANEOUSLY, THE ASSESSING OFFICER INITIATED PRO CEEDINGS TO REVISE/REOPEN AND REASSESS THE INCOME OF THE PARTNER SHRI TONO THOMAS , THE ASSESSEE FOR THE ASSESSMENT YEARS 2004-05 AND 2003-04. THE ASSESSEE ONCE AGAIN FURNISHED ALL THE EVIDENCES AND DOCUMENTS IN SUPPORT OF THE SOURCE FO R THE CREDITS IN THE CAPITAL ACCOUNT IN THE FIRM. HOWEVER WITHOUT CONSIDERING A NY OF THE EVIDENCES FURNISHED BY THE ASSESSEE, THE REASSESSMENT WAS COMPLETED WIT H AN ADDITION OF RS.29,63,000/- AND RS.27,34,00/- MADE IN RELATION T O THE ASSESSMENT YEARS 2004-05 AND 2003-04 RESPECTIVELY IN THE HANDS OF THE ASSESS EE. THUS THE ASSESSING OFFICER MADE AN ADDITION OF THE SAME AMOUNT OF RS.29,63,000 /- IN THE ASSESSMENT OF THE FIRM AS WELL AS THE PARTNER, THE ASSESSEE FOR THE A SSESSMENT YEAR 2004-05. 15. THUS THE ASSESSEE FURNISHED DETAILED EXPLANAT IONS AND EVIDENCES IN SUPPORT OF HIS OBJECTIONS FOR THE REASSESSMENT PROCEEDINGS INITIATED. HE ALSO SUBMITTED ELABORATE DOCUMENTS AND STATEMENTS TOWARDS THE PROO F FOR THE SOURCE FOR THE CREDITS IN THE CAPITAL ACCOUNT OF ASSESSEE IN THE B OOKS OF THE FIRM FOR A TOTAL SUM OF RS. 43,09,000/- AND RS.29,63,000/- DURING THE TW O YEARS. IGNORING ALL THESE DOCUMENTARY EVIDENCES AND EXPLANATIONS, THE ASSESSI NG OFFICER COMPLETED THE ITA NOS.439&440//COCH/2015 12 ASSESSMENT BY MAKING AN ADDITION TO RS.27,34,000/-, RS. 29,63,000/- FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 RESPECTIVELY. THE ASSESSING OFFICER ACCEPTED THE CREDIT FOR THE SUM OF RS.18,25,000/- O UT OF THE TOTAL CREDITS IN THE CAPITAL ACCOUNT AMOUNTING TO RS.75,22,000/- AND THE BALANCE AMOUNT NOT OF RS.56,97,000/- WAS TREATED AS UNEXPLAINED INVESTMEN TS. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED THE APPEALS B EFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 16. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSE SSEE THAT THE ASSESSEE BELONGS TO A FAMILY ENGAGED IN AGRICULTURAL OPERATIONS, BEI NG RUBBER CULTIVATION, IN KOTTAYAM DISTRICT FOR THREE GENERATIONS. HIS FAMIL Y SOLD IN ABOUT 1989 THE ANCESTRAL PROPERTIES CONSISTING OF RUBBER PLANTATION AT PAMBA DY IN KOTTAYAM DISTRICT. THE SALE PROCEEDS WERE IMMEDIATELY INVESTED FOR PURCHAS E OF 11.5 ACRES OF AGRICULTURAL LAND AT KAKKANAD PANCHAYATH, ERNAKULAM . THIS PROPERTY WAS PURCHASE ONLY FOR CARRYING OUT AGRICULTURAL OPERATI ONS. THE AGRICULTURAL OPERATIONS ARE CARRIED OUT BY THE FAMILY MEMBERS JOINTLY. THE FAMILY OF THE ASSESSEE CONSISTS OF THE FOLLOWING MEMBERS:- SL. NO. NAME OF THE FAMILY MEMBER NATURE OF RELATIO NSHIP OF THE FAMILY MEMBER WITH THE APPELLANT 1. THOMAS MATHEW FATHER 2. GRACE MATHEW MOTHER 3 SIJO TONO WIFE ITA NOS.439&440//COCH/2015 13 THE FAMILY MEMBERS WERE ENGAGED IN THE INVESTMENT A CTIVITIES INVOLVING PURCHASE OF THE AGRICULTURAL LANDS FOR CULTIVATION AND THEY CARRIED OUT AGRICULTURAL OPERATIONS IN THESE PROPERTIES. CERTAIN PROPERTIES WERE SOLD SUBSEQUENTLY AND THE FAMILY EARNED PROFIT FROM SUCH SALE. THE INCOME OF THE AS SESSEE CONSISTED OF THE FOLLOWING STREAMS: (A) INCOME FROM SHARE TRADING TRANSACTIONS. (B) AGRICULTURAL INCOME (C) PROFIT ON THE PURCHASE AND SALE OF PROPE RTIES, INCLUDING AGRICULTURAL LANDS. (D) RENTAL INCOME FROM THE PROPERTIES LET OU T. (E) INTEREST INCOME ON THE FIXED DEPOSITS HE LD WITH BANKS. DURING THE YEAR 1995-96 KINFRA ACQUIRED 11.5 ACRES OF LANDED PROPERTIES BEING RUBBER PLANTATION AND OTHER AGRICULTURAL LANDS, OWN ED BY THE FAMILY MEMBERS OF THE ASSESSEE. FURTHER THE ASSESSEES FATHER SHRI THOMAS MATHEW, WHO IS AN INCOME TAX ASSESSEE, RECEIVED AN AMOUNT OF RS.81,86 ,000/- TOWARDS COMPENSATION FOR THE ACQUISITION OF THE LAND FROM G OVERNMENT OF KERALA AS PER DETAILS SHOWN BELOW: SL. NO. DATE OF DEPOSIT NAME & ADDRESS OF THE BANK IN WHICH THE CHEQUE RECEIVED FOR THE COMPENATION WERE DEPOSITED AMOUNT (RS.) 1. 12-08-1995 CATHOLIC SYRIAN BANK, KALOOR, ERNAKULAM 63,36,000 2. 08-10-1996 CATHOLIC SYRIAN BANK, KALOOR, ERNAKULAM 18,50,000 TOTAL 81,86,000 ITA NOS.439&440//COCH/2015 14 THE ENTIRE AMOUNT OF RS.81,86,000/- WAS DEPOSITED I N THE SAVINGS BANK ACCOUNT IN THE NAME OF SHRI THOMAS MATHEW WITH CATHOLIC SYRIAN BANK IN 1996. THE COPIES OF THE DEPOSIT SLIPS FURNISHED AT THE TIME OF THE HEAR ING BEFORE THE ASSESSING OFFICER ARE PLACED ON RECORD. A FURTHER SUM OF RS.27,55,50 9 WAS ALSO RECEIVED BY THE ASSESSEE AND THE FAMILY MEMBERS AS GIFT. DR. J. AL EXANDER PATTAVIRA, WHO WAS PRACTICING AS A DOCTOR IN LONDON FOR A LONG TIME DU RING THE YEAR 1994-95, 1995-96 AND 1996-07. DR. J. ALEXANDER PATTAVIRA IS THE UNC LE OF THE ASSESSEE SHRI TONO THOMAS. THIS AMOUNT WAS ALSO DEPOSITED IN THE SAVI NGS BANK ACCOUNT MAINTAINED WITH CATHOLIC SYRIAN BANK, THE DETAILS OF WHICH ARE GIVEN BELOW: SL. NO. NAME OF BANK DATE OF RECEIPT AMOUNT(RS.) 1. CATHOLIC SYRIAN BANK 05-09-1994 5,78, 520.00 2. CATHOLIC SYRIAN BANK 10-02-1995 4,81, 711.00 3. CATHOLIC SYRIAN BANK 05-05-1995 5,24, 047.00 4. CATHOLIC SYRIAN BANK 06-06-1996 5,30, 636.00 5. CATHOLIC SYRIAN BANK 28-06-1996 6,40, 595.00 TOTAL 27,55,509.00 ALL THESE DEPOSITS WERE PROMPTLY DEPOSITED IN THE B ANK ACCOUNTS HELD IN THE NAME OF THE FAMILY MEMBERS. THE COPIES OF THE DEPO SIT SLIPS AND CERTIFICATES RECEIVED FROM THE BANK ARE PLACED ON RECORD. FIXED DEPOSITS WERE MADE OUT OF THE ABOVE RECEIPTS, FOR VARIOUS AMOUNTS FOR DIFFERE NT PERIODS IN THE NAME OF THE FAMILY MEMBERS AS UNDER: SL. NO. NAME OF THE BANK AMOUNT DEPOSITED(RS.) 1. DEPOSITS HELD DURING THE PERIOD 1994-2001 CATHOLIC SYRIAN BANK, KALOOR 36,16,25 9 ITA NOS.439&440//COCH/2015 15 2. DEPOSITS MATURED DURING THE PERIOD 1994-2001 CATHOLIC SYRIAN BANK, KALOOR 26,16,99 6 TOTAL 62,33,255 INVESTMENTS IN AGRICULTURAL LANDS WERE ALSO MADE OU T OF THE ABOVE MENTIONED CASH AND BANK BALANCES AVAILABLE WITH THE FAMILY ME MBERS. THE ASSESSEE SHRI TONO THOMAS MADE INVESTMENTS IN THE FIRM OUT OF THE SE RECEIPTS AND ALSO FROM HIS INVESTMENT ACTIVITIES IN SHARES. THE ASSESSEE AND HIS FAMILY MEMBERS CONSISTING OF THE ASSESSEES PARENTS MR. THOMAS MATHEW AND MOTHER MRS. GRACE MATHEW WERE MAKING INVESTMENTS IN PROPERTIES FOR AGRICULTURAL O PERATIONS. ACCORDINGLY THE FAMILY MEMBERS PURCHASED CERTAIN AGRICULTURAL PROPE RTIES FROM 1996 ONWARDS. THEY WERE ALSO ENTERING INTO AGREEMENTS FOR THE PUR CHASE OF THE PROPERTIES AND ADVANCES WERE GIVEN TO THE OWNERS OF THOSE LANDED P ROPERTIES. 17. THE FIRM M/S. TANVEST PROPERTIES WAS FORMED O N 20/11/2002 AS PER DEED OF PARTNERSHIP EXECUTED BY THE ASSESSEE SHRI TONO THOM AS AND HIS WIFE MRS. SIJI TONO. THE PARTNERS AND THEIR FAMILY MEMBERS LIQUIDATED TH E FIXED DEPOSITS WITH THE BANKS AND OTHER ASSETS INCLUDING LANDED PROPERTIES FOR MA KING INVESTMENTS IN THE FIRM M/S. TANVEST PROPERTIES TO MEET ITS REQUIREMENTS FR OM TIME TO TIME. UPTO THE FORMATION OF THE PARTNERSHIP, ALL INVESTMENTS IN LA NDED PROPERTIES AND FIXED DEPOSITS WITH THE BANKS WERE MADE IN THE INDIVIDUAL NAMES OF THE PARTNERS. WITH THE FORMATION OF THE FIRM, CERTAIN PROPERTIES WERE PURCHASED IN THE NAME OF THE FIRM. CERTAIN TRANSACTIONS INITIATED PRIOR TO THE FORMATION OF THE PARTNERSHIP IN THE ITA NOS.439&440//COCH/2015 16 NAME OF THE PARTNERS WERE ACTUALLY CONCLUDED, SUBSE QUENT TO THE FORMATION OF THE PARTNERSHIP, IN THE NAME OF THE FIRM AND HENCE INCORPORATED IN THE BOOKS OF THE FIRM. THUS THE ENTIRE CREDITS AND THE INVESTME NTS TOWARDS THE CAPITAL CONTRIBUTION AMOUNTING TO RS.75,22,000/- DURING THE FINANCIAL YEAR 2002-03 AND 2003-04, MADE IN THE NAME OF THE ASSESSEE, SHRI TON O THOMAS, IN THE FIRM WERE OUT OF THE CASH AND BANK BALANCES WITH THE ASSESSEE AND THE AMOUNT OBTAINED FROM SALE OF THE AGRICULTURAL LANDS AND WITHDRAWAL FROM THE INVESTMENTS IN SHARES. ALL THESE CREDITS AND INVESTMENTS ARE SUPPORTED BY DOCU MENTARY EVIDENCES WHICH ARE VERIFIABLE AND THE COPIES OF ALL THE DOCUMENTS WERE FURNISHED BEFORE THE LD. CIT(A) AND THE ASSESSING OFFICER. FURTHER, COPIES OF THE EXPLANATION GIVEN FOR THE CREDITS ON EACH DATE IN THE CAPITAL/CURRENT ACCOUNT OF SHRI TONO THOMAS IN THE FIRM M/S. TANVEST PROPERTIES TOGETHER WITH DOCUMENT ARY EVIDENCES FURNISHED BEFORE THE LOWER AUTHORITIES ARE PLACED ON RECORD. 18. AT THE TIME OF HEARING OF THE CASE BEFORE T HE ASSESSING OFFICER AND THE LD. CIT(A) THE ASSESSEE SUBMITTED THE FOLLOWING DOCUMEN TS: A. CASH FLOW STATEMENT OF THE FAMILY FOR THE PERIOD FROM1993-2004. B. CASH STATEMENT SHOWING DATE WISE TRANSACTIONS IN RESPECT OF PURCHASE AND SALE OF LANDS AND OTHER DEALINGS FROM 1993 TO 2004. C. CONFIRMATION LETTER FROM SHRI THOMAS MATHEW, FA THER OF THE ASSESSEE FOR THE AMOUNT GIVEN TO THE ASSESSEE OUT OF THE CONSOLIDATE D FAMILY FUNDS TO MAKE THE INVESTMENTS IN THE FIRM. D. THE COPIES OF THE REGISTERED DEEDS FOR THE PURCH ASE AND SALE OF LANDED PROPERTIES IN THE NAME OF THE FAMILY MEMBERS. ITA NOS.439&440//COCH/2015 17 E. COPIES OF THE BANK STATEMENTS SHOWING THE TRANS ACTIONS OF THE FIRM AND THE ASSESSEE PARTNER WITH THE FOLLOWING BANKS: I) IDBI BANK II) ICICI BANK F. COPY OF THE NOTIFICATION DATED 12/01/1995 ISSUED BY KINFRA FOR THE ACQUISITION OF THE 11.05 ACRES OF LAND AT A VALUE O F RS.81,85,000/- G. COPY OF THE DEPOSIT SLIPS FOR THE DEPOSITS OF TH E DEMAND DRAFT RECEIVED TOWARDS THE COMPENSATION MADE IN THE SAVINGS BANK A CCOUNT IN THE NAME OF SHRI THOMAS MATHEW. H. COPY OF THE CERTIFICATE RECEIVED FROM CATHOLIC S YRIAN BANK AND STANDARD CHARTERED BANK FOR THE FOREIGN DEMAND DRAF TS RECEIVED FROM DR. J. ALEXANDER PATTAVIRA TOWARDS GIFT. THE COPIES OF THE ABOVE STATEMENTS AND DOCUMENTS AR E PLACED ON RECORD. FROM THESE DOCUMENTS AND EVIDENCES, THE ASSESSING OFFICE R AND THE LD. CIT(A) SHOULD HAVE VERIFIED AND SATISFIED THAT THE ENTIRE CREDITS AND THE INVESTMENTS OF RS.75,22,000/- MADE TOWARDS CAPITAL CONTRIBUTION OF THE ASSESSEE IN THE FIRM WERE GIVEN ONLY OUT OF THE KNOWN SOURCES OF INCOME WHICH ARE VERIFIABLE. THE CASH STATEMENT CLEARLY ESTABLISHES THE MOVEMENT OF THE F UNDS ON A DAY TO DAY BASIS. THESE STATEMENTS CLEARLY ESTABLISH AND PROVE THAT T HE ASSESSEE HAD SUFFICIENT SOURCE FOR MAKING THE INVESTMENT IN THE CAPITAL OF THE FIRM FOR A SUM OF RS.75,22,000/- DURING THE TWO FINANCIAL YEARS 2004 -05 AND 2003-04. HOWEVER, THE ASSESSING OFFICER AND THE LD. CIT(A) DID NOT CONSID ER ANY OF THESE DOCUMENTS AVAILABLE ON RECORDS AND CAME TO THE WRONG CONCLUSI ON TO MAKE AN ADDITION OF RS.29,63,000/- AND 27,34,000/- TOWARDS UNEXPLAINED CASH CREDITS/INVESTMENTS IN A CASUAL AND MECHANICAL WAY AND THUS COMMITTED A GROS S ERROR AND DENIED NATURAL JUSTICE TO THE ASSESSEE. IT MAY ALSO BE AP PRECIATED THAT AGAINST THE ITA NOS.439&440//COCH/2015 18 ORIGINAL ORDER OF THE ASSESSING OFFICER DATED 29/12 /2006, M/S. TANVEST PROPERTIES FILED AN APPEAL BEFORE THE LD. CIT(A) WHICH WAS ALL OWED AS PER THE ORDER OF THE LD. CIT(A) WITH A DIRECTION TO DELETE THE ENTIRE AD DITION OF RS.29,63,000/-, THE COPY OF WHICH IS PLACED ON RECORD. 19. IT IS VERY RELEVANT TO MENTION THAT THE LD. CIT(A) IN THE ORDER AFTER CONSIDERING ALL THE SUBMISSIONS FURNISHED BY THE ASSESSEE BEFOR E THE ASSESSING OFFICER AND THOSE AVAILABLE ON RECORD, CLEARLY AND CATEGORICALL Y HELD AND ACCEPTED THE CREDITWORTHINESS OF THE ASSESSEE, SHRI TONO THOMAS TO MAKE AN INVESTMENT OF RS.29,63,000/- DURING THE FINANCIAL YEAR 2003-04 AN D CONCLUDED THAT THE CREDITS ARE CLEARLY PROVED AND ESTABLISHED. THUS ON MERITS AND FACTS OF THE CASE ALSO, THE ADDITION WAS DELETED. THE LD. CIT(A) IN THE ELABOR ATE ORDER AFTER DISCUSSING THE MERITS OF THE CONTENTIONS OF THE ASSESSEE CLEARLY A CCEPTED THE EXPLANATIONS FOR THE NATURE OF THE SOURCE OF THE VARIOUS AMOUNTS INV ESTED IN THE FIRM. IT WAS HELD THAT THE PROXIMITY AND THE LINK BY WAY OF SOURCE FO R THE INVESTMENTS/CREDITS AND THE DATE OF INVESTMENTS HAS BEEN CLEARLY PROVED WIT H THE DOCUMENTARY EVIDENCES. THE LD. CIT(A) CONCLUDED THAT THE LD. AO HAS NOT BROUGHT OUT ANY MATERIAL WITH COGENT REASONS TO DISPROVE THE CLAIM OF THE ASSESSEE. 20. THE ASSESSING OFFICER WITHOUT ANY REASON REJE CTED THE EVIDENCES FURNISHED BY THE ASSESSEE AND TREATED THE ENTIRE INVESTMENTS OF RS.56,97,000/- MADE IN THE FIRM AS UNEXPLAINED INVESTMENTS OF THE TWO ASSESSMENT YE ARS. THERE BEING ADMITTEDLY ITA NOS.439&440//COCH/2015 19 NO EVIDENCE TO DISBELIEVE OR DISPROVE THE FACT THAT THE SUFFICIENT CASH WAS AVAILABLE WITH THE ASSESSEE DURING THE RELEVANT PER IOD AND NO REASON TO SUSPECT THE EVIDENCES FURNISHED BY THE ASSESSEE, THE ASSESS ING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.56,97,000/- PURELY BASED ON SURMISES. AGAINST THE ORDER OF THE LD. CIT(A) IN THE CASE OF M/S. TANVEST PROPE RTIES, REVENUE FILED APPEAL BEFORE THE ITAT AND AS PER ORDER IN I.T.A. NO.523/C OCH/2007 DATED 29/08/2008, THE ITAT REMANDED THE CASE BACK TO THE ASSESSING OFFICE R TO VERIFY THE DOCUMENTARY EVIDENCES AND OTHER EXPLANATIONS FURNISHED BY THE A SSESSEE. THE COPY OF THE ORDER OF THE ITAT IS PLACED ON RECORD. IN OTHER WO RDS, AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS OF THE FIRM M/S. TANVEST PRO PERTIES DATED 29/12/2006, THE CREDIT/INVESTMENT IN THE NAME OF THE ASSESSEE IN TH E FIRM WAS NOT CONSIDERED IN THE ASSESSMENT OF THE ASSESSEE FOR THE TWO YEARS NO W UNDER CONSIDERATION IN THESE APPEALS. SINCE THE SOURCE OF INVESTMENT OF RS.56,97 ,000/- IN THE CASE OF M/S. TANVEST PROPERTIES WAS NOT PROVED, THE ASSESSING OF FICER MADE THE ADDITION OF RS.56,97,000/-. IT WAS SUBMITTED THAT THE ASSESSING OFFICER CLEARLY ADMITTED THAT THE CASH INVESTMENTS ARE MAINLY THROUGH CHEQUES. HE HAS ALSO STATED IN PARA 2 PG. NO. 5 OF THE ASSESSMENT ORDER AS UNDER: IT IS QUITE CLEAR THAT, WHILE THERE IS AN APPARENT LY SUFFICIENT FUND WITH THE FAMILY OF MR. TONO THOMAS WHICH INCLUDES HIS PARENT S WHO HAVE BEEN CONVENIENTLY IN THE WHOLE PRESENTATION OF THE FACTS BEING IGNORED AND THE IMPRESSION BEING CREATED IS THAT ENTIRE MONEY OF LA ND SALE TRANSACTIONS AND GIFTS WERE DIRECTLY TAKEN BY MR. TONO THOMAS FO R HIS BUSINESS. THE DETAILS OF CERTAIN FIXED DEPOSITS ETC., HELD IN VAR IOUS BANKS FILED ALONGWITH THE DETAILS INDICATE THAT THEY ARE ALL THE NAME OF THOMAS MATHEW AND ITA NOS.439&440//COCH/2015 20 HOW THE ASSESSEE CAN CLAIM ALL THESE AS PART AND PA RCEL OF HIS ASSETS IS NOT EXACTLY CLEAR. THUS THE ASSESSING OFFICER HAS ADMITTED THAT THERE ARE SUFFICIENT FUNDS WITH THE FAMILY OF SHRI TONO THOMAS WHICH INCLUDES HIS PAREN TS. THE ASSESSEE IS THE ONLY SON TO HIS PARENTS. IT IS ALSO ADMITTED IN THE ASSESSM ENT ORDER THAT THE FIXED DEPOSITS HELD IN VARIOUS BANKS FILED ALONG WITH THE DETAILS INDICATED THAT THEY ARE ALL IN THE NAME OF SHRI THOMAS MATHEW, FATHER OF THE ASSESSEE. THE ASSESSING OFFICER WAS RAISING A DOUBT AS TO HOW THE ASSESSEE CAN CLAIM AL L THESE AS A PART AND PARCEL OF HIS ASSETS IS NOT EXACTLY CLEAR. THE ASSESSING OFF ICER FAILED TO APPRECIATE THAT THE ASSESSEE HAS FILED LETTER FROM HIS FATHER SHRI THOM AS MATHEW CONFIRMING THAT HE HAD GIVEN AN AMOUNT OF RS.23,69,000/- TO HIS SON MR . TONO THOMAS ON VARIOUS DATES AS STATED IN THE LETTER FOR MAKING INVESTMENT S IN THE FIRM FOR BUSINESS PURPOSES. THE ASSESSEES MOTHER MRS. GRACE MATHEW A LSO CONFIRMED THE FACT THAT SHE HAD GIVEN THE FUNDS OUT OF THE FAMILY FUNDS TO HER SON. THE COPIES OF THE STATEMENT OF TOTAL INCOME OF MR. THOMAS MATHEW AND MRS. GRACE MATHEW TOGETHER WITH THE DETAIL OF PAN WERE ALSO FURNISHED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A). IN CASE OF ANY DOUBT, THE ASSES SING OFFICER SHOULD HAVE SUMMONED BOTH MR. THOMAS MATHEW AND MRS. GRACE MATH EW TO VERIFY DIRECTLY THE GENUINENESS OF THE CONTENTIONS OF THE ASSESSEE. THUS THE ASSESSEE HAS DISCHARGED THE RESPONSIBILITY TO ESTAB LISH THE NATURE AND SOURCE FOR THE INVESTMENT MADE WITH DOCUMENTARY EVIDENCES AND THE ASSESSING OFFICER WITHOUT MAKING ANY EFFORT TO VERIFY THE CORRECTNESS OF THE EVIDENCES AND ITA NOS.439&440//COCH/2015 21 EXPLANATION FURNISHED BY THE ASSESSEE MECHANICALLY REJECTED THE CLAIM WITHOUT PROPER APPLICATION OF MIND. 21. IT IS ALSO RELEVANT TO MENTION THAT THE ASSES SING OFFICER HAS ADMITTED THAT THERE ARE SUFFICIENT FUNDS WITH THE FAMILY OF SHRI TONO THOMAS AT PARA 2, PG. 5 OF THE ASSESSING OFFICERS ORDER AND THE ASSESSEE IS T HE ONLY SON OF HIS PARENTS. THE DETAILS OF FIXED DEPOSITS HELD IN THE VARIOUS BANKS ALONG WITH DETAILS INDICATE THAT THEY ARE ALL IN THE NAME OF SHRI THOMAS MATHEW, THE FATHER OF THE ASSESSEE. 22. THE ASSESSING OFFICER WAS RAISING A DOUBT AS TO HOW THE ASSESSEE CAN CLAIM ALL THESE AS A PART AND PARCEL OF HIS ASSETS IS NOT EXACTLY VERY CLEAR. THE ASSESSING OFFICER FAILED TO APPRECIATE THAT SHRI THOMAS MATHE W CLEARLY CONFIRMED THAT HE GAVE VARIOUS AMOUNTS OUT OF THE FAMILY FUNDS TO SHR I TONO THOMAS ON THE DATES SHOWN AGAINST THEM TO MAKE THE INVESTMENT. SHRI TH OMAS MATHEW HAS CONFIRMED THE AMOUNT GIVEN TO THE ASSESSEE. THE ASSESSING OFF ICER WAS CONVINCED THAT THERE ARE SUFFICIENT FUNDS WITH THE FAMILY OF SHRI TONO T HOMAS. CONSEQUENTLY ON THE BASIS OF CONFIRMATION LETTER FROM SHRI THOMAS MATHEW, TH E ASSESSING OFFICER SHOULD HAVE ACCEPTED THE CREDITS. IN CASE OF ANY DOUBT, THE AS SESSING OFFICER SHOULD HAVE SUMMONED MR. THOMAS MATHEW AND VERIFIED THE CLAIM O F THE ASSESSEE. THE ASSESSEE DISCHARGED HIS RESPONSIBILITY BY FURNISHIN G THE EXPLANATIONS FOR THE SOURCE TOGETHER WITH THE CONFIRMATION LETTER FROM MR. THOM AS MATHEW. THE DATE WISE ITA NOS.439&440//COCH/2015 22 PARTICULARS OF THE CONTRIBUTIONS MADE DURING THE PE RIOD ARE GIVEN BELOW FOR MORE CLARITY AND UNDERSTANDING: SERIAL NO. DATE AMOUNT (RS.) DETAILS OF THE MODE OF PAYMENT GIVEN TO THE FIRM CHEQUE NO. NAME OF THE BANK ACCOUNT NO. 1. 02-01-2003 10,000.00 2. 02-01-2003 1,75,000.00 579109 ICICI BANK, 16179 M.G.ROAD, KOCHI 3. 07-01-2003 2,25,000.00 579112 ICICI BANK, 16179 M.G.ROAD, KOCHI 4. 10-01-2003 4,25,000.00 579114 ICICI BANK, M.G. ROAD,KOCHI 16179 5. 14-01-2993 3,25,000.00 579115 ICICI B ANK, 16179 M.G. ROAD, KOCHI 6. 20-01-2003 3,75,000.00 579116 ICICI B ANK, 16179 M.G.ROAD, KOCHI 7. 22-01-2003 95,000.00 8. 22-01-2003 2,25,000.00 9. 22-01-2003 1,00,000.00 579117 ICICI BANK, 16179 M.G.ROAD, KOCHI 10. 03-03-2003 4,25,000.00 11. 17-03-2003 1,75,000.00 579118 ICICI BANK, 16179 M.G.ROAD, KOCHI 12. 20-03-2003 2,25,000.00 13. 27-03-2003 9,50,000.00 26126 IDB I BANK LTD. 13192 14. 27-03-2003 79,000.00 15. 28-03-2003 2,25,000.00 16. 28-03-2003 2,50,000.00 579119 ICI CI BANK, 16179 M.G.ROAD, KOCHI 17. 28-03-2003 2,75,000.00 19621 CITI BANK, KOCHI 5-000 -251-463 TOTAL 45,59,000.00 23. SIMILARLY, THE ASSESSEE HAS RECEIVED MONEY A MOUNTING TO RS. 12,84,000/- OUT OF FAMILY FUNDS. ITA NOS.439&440//COCH/2015 23 24. IT WAS EXPLAINED BEFORE THE AUTHORITIES BELOW THAT THE ASSESSEE HAD TRANSFERRED A SUM OF RS.20,50,000/- DURING THE PERI OD UNDER CONSIDERATION THROUGH CHEQUES, ACCOUNT TRANSFER FROM ICICI BANK A/C NO. 1 6179 AS PER DETAILS BELOW: SL.NO. DATE AMOUNT CHEQUE NO. ANNEXURE NO. IN WHICH DETAILED EXPLANATION FOR THE CREDITS ARE FURNISHED. 1. 02-01-2003 1,75,000.00 579109 ANNEXURE 1 SERIAL NO. 1 2. 07-01-2003 2,25,000.00 579112 ANNEXURE 1 SERIAL NO. 2 3. 10-01-2003 4,25,000.00 579114 ANNEXURE 1 SERIAL NO. 3 4. 14-01-2003 3,25,000.00 579115 ANNEXURE 1 SERIAL NO. 4 5. 20-01-2003 3,75,000.00 579116 ANNEXURE 1 SERIAL NO. 5 6. 22-01-2003 1,00,000.00 579117 ANNEXURE 1 SERIAL NO. 6 7. 17-03-2003 1,75,000.00 579118 ANNEXURE 1 SERIAL NO. 7 8. 28-03-2003 2,50,000.00 579119 ANNEXURE 1 SERIAL NO. 8 TOTAL 20,50.000.00 AN AMOUNT OF RS.9,50,000/- HAS BEEN ALSO BEEN PAID THROUGH SAVINGS BANK WITH IDBI BANK A/C NO. 13192 IN THE NAME OF SHRI TONO THOMAS. 25. IN ALL RESPECTS, THE ASSESSEE PROVED THE IDEN TITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN BOTH THE YEARS AN D HAS DISCHARGED THE ONUS. THEREFORE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIR MING THE ACTION OF THE ASSESSING OFFICER AND ACCORDINGLY, THE ADDITIONS SO CONFIRMED ARE DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT(A) IN BOTH THE YEARS A RE REVERSED. THE FACTS OF THE CASE ON LEGAL ISSUE IS REJECTED AND ON MERITS IS AL LOWED. THUS THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ITA NOS.439&440//COCH/2015 24 26. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN I.T.A. NOS. 439&440/COCH/2015 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-0 6-2016 SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : COCHIN DATED: 07 TH JUNE , 2016 GJ COPY TO: 1. SHRI TONO THOMAS, FLAT NO.12A, EXPRESS ESTATE, KALOOR, KOCHI-682 017 . 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2 (2), ERNAKULAM.-, 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I, 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. THE DR/ITAT, COCHIN BENCH. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN