Dr.Asha Mathew, Kothamangalam V. The ITo,Wd-2, Thodupuzha, Thodupuzha

ITA 45/COCH/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4963 (ITAT-COCHIN)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 14-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: SUNNY VARGHESE
• Keywords: Income from undisclosed sources; Source of fund
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 45 /COCH/201 8 : ASST.YEAR 200 5 - 200 6 DR.ASHA MATHEW PUTHUKUNNATHU HOUSE MALAYINKEEZHU KOTHAMANGALAM ERNAKULAM 686 691. PAN : ACAPM3481B . VS. THE INCOME TAX OFFICER WARD 2 THODUPUZHA . (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.SUNNY VARGHESE RESPONDENT BY : SMT.A.S.BINDHU, SR.DR DATE OF HEARING : 17 .10.2018 DATE OF PRONOUNCEMENT : 24 .10.2018 O R D E R PER GEORGE GEORGE K., JM THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST COMMISSIONER OF INCOME - TAX (APPEALS)S ORDER DATED 15.11.2017 . THE RELEVANT ASSESSMENT YEAR IS 200 5 - 200 6 . 2. THE SOLITARY ISSUE THAT IS RAISED IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,34,000 MADE U/S 68 OF THE I.T.ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS: - THE ASSESSEE IS A DENTAL SURGEON BY PROFESSION, WORKING IN A CLINIC RUN BY HER HUSBAND. FOR THE ASSESSMENT YEAR 2005 - 2006, RETURN OF INCOME WAS FILED ON 30.11.2006 DECLARING INCOME OF RS.1,14,960. DURING THE COURSE OF ITA NO. 45 / COCH /201 8 . DR.ASHA MATHEW . 2 ASSESSMENT PROCEEDINGS, A CASH FLOW ST ATEMENT WAS FILED BY THE ASSESSEE. AS PER THE CASH FLOW STATEMENT, THE ASSESSEE HAD RECEIVED RS.1,34,000 ON 22.12.2004, WHICH WA S CLAIMED TO BE A REPAYMENT OF LOAN BY ONE OF THE RELATIVES OF THE ASSESSEE . THE ASSESSEE HAD ALSO FILED CONFIRMATION LETTER DAT ED 08.10.2007 REGARDING THE REPAYMENT OF RS.1,34,000 ON 22.12.2004. THE ASSESSING OFFICER, HOWEVER, DID NOT BELIEVE THE ASSESSEES VERSION THAT IT WAS A REPAYMENT OF LOAN AND ADDED THE AMOUNT OF RS.1,34,000 AS INCOME U/S 68 OF THE I.T.ACT. THE RELEVANT FIN DING OF THE ASSESSING OFFICER IN THIS REGARDS READS AS FOLLOWS: - 4. AS PER THE LETTER DATED 08.10.2007 ASSESSEE HAS GIVEN LOAN OF RS.1,34,000/ - TO TWO PERSONS (1) MR.ITTAN PAILY, KOCHUKUDIYIL, MUDAVOOR P.O. AND (2) MR.VARGHESE PAUL, KOCHUKUDIYIL, KUDAVO OR P.O. REGARDING THE SOURCE OF FUND IT WAS EXPLAINED TO BE LOAN FROM CATHOLIC SYRIAN BANK, KOTHAMANGALAM BRANCH. AS AN EVIDENCE TWO BANKERS CERTIFICATE BOTH DATED 14.03.2005 ISSUED BY THE CATHOLIC SYRIAN BANK, KOTHAMANGALAM BRANCH WERE PRODUCED. PERUSAL O F THE CERTIFICATES REVEALED THAT THE ASSESSEE WAS GRANTED LOAN OF RS.19,000/ - ONLY. THE OTHER CERTIFICATE WAS FOR THE LOAN OF RS.2,10,000/ - GRANTED TO MR.BABU CHERIAN WHICH WAS ALSO GIVEN TO THE SAME SET OF PERSONS AND HAD BEEN DULY RETURNED TO BABU CHERI AN. THUS IT IS EVIDENT THAT THE ASSESSEE HAD NO SOURCE FOR THE ALLEGED LOAN GIVEN TO TWO OF THEIR RELATIVES WHO ARE NOT ASSESSED TO TAX. IT APP E ARS THAT THE LOAN WAS ACTUALLY NOT GIVEN AS CLAIMED. SUBSEQUENT EVENTS THAT FOLLOWED CONFIRM THIS FACT. AS ADMITTED, THE LOAN WAS GIVEN TO TWO PERSONS BUT RETURNED BY A SINGLE PERSON NAMED ITTAN PAILY, KOCHUKUDIYIL, MUDAVOOR P.O. INDIVIDUAL SHARE OF THE LOAN IS NOT DISCLOSED. MOREOVER, IT IS NOT DISCLOSED UNDER WHAT ARRANGEMENT THE COMPLETE ITA NO. 45 / COCH /201 8 . DR.ASHA MATHEW . 3 LIABILITY WAS DIS CHARGED BY A SINGLE PERSON. CONSIDERING VARIOUS ASPECTS OF THE LOAN SUCH AS, (1) GIVING OF LOAN WITHOUT ANY SOURCE (2) TWO LOANEES (3) REPAYMENT OF LOAN FULLY BY A SINGLE PERSON (4) CONFIRMATION BY ONLY ONE PERSON WHEN THE LOAN WAS GIVEN TO TWO PERSONS, IT IS APPEARS TO BE A COOKED UP STORY TO INTRODUCE UNDISCLOSED MONEY AVAILABLE WITH THE ASSESSEE FOR PURCHASE OF PROPERTY AT ERNAKULAM ON 22.12.2004. MOREOVER, THE ALLEGED LOANEES WERE NOT PRODUCED FOR EXAMINATION ON THE PLEA THAT THESE PERSONS ARE TOO OLD A ND ARE NOT IN A POSITION TO BE EXAMINED ON OATH. IN VIEW OF THE ABOVE FACTS, AMOUNT OF RS.1,34,000/ - CLAIMED TO HAVE BEEN RETURNED BY THEIR RELATIVES IS TREATED INCOME FROM UNDISCLOSED SOURCES AND ADDED TO THE TOTAL INCOME. 4. AGGRIEVED BY THE ADDITION O F RS.1,34,000 U/S 68 OF THE I.T.ACT, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS: - 6.4 I HAVE GONE THROUGH THE ASSES SMENT ORDER AND SUBMISSION OF THE APPELLANT. THE APPELLANT CLAIMED TO HAVE AVAILED LOAN FROM BANK TO GIVE LOAN TO OTHER PERSONS. THE ASSESSING OFFICER FOUND THAT THE LOAN WAS TAKEN BY HER HUSBAND. THE APPELLANT CLAIMS THAT THIS WAS A MISTAKE BY THE BANK. S HE REFUSED TO PRODUCE THE PERSONS WHO HAD ALLEGEDLY TAKEN LOANS ON THE PLEA THAT THEY ARE TOO OLD. THE LOANEES ARE ALSO NOT ASSESSED TO TAX. THE LOAN IS CLAIMED TO HAVE BEEN TAKEN BY TWO PERSONS, BUT RETURNED BY ONE PERSON. IN MY OPINION, THE EXPLANATION O F THE APPELLANT IS FAR FROM BEING SATISFACTORY AND THERE IS NO REASON TO INTERFERE WITH THE DECISION OF THE ASSESSING OFFICER. ADDITION OF RS.1,34,000/ - IS HEREBY CONFIRMED AND THESE GROUNDS OF APPEAL ARE DISMISSED. ITA NO. 45 / COCH /201 8 . DR.ASHA MATHEW . 4 5. AGGRIEVED BY THE ORDER OF THE CIT(A ), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE HAD SUBMITTED A PAPER BOOK ENCLOSING THE CONFIRMATION LETTER, THE ACKNOWLEDGEMENT ISSUED BY THE BANK FOR THE FIXED DEPOSIT RECEIPT WHICH WERE KEPT AS SECURITY FOR AVAILING LOAN ETC . THE LEARNED COUNSEL REITERATED THE SUBMISSION MADE BEFORE THE INCOME - TAX AUTHORITIES. 5.1 THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE INCOME - TAX AUTHORITIES. 6. WE HAVE HEARD T HE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE ASSESSEE HAD AVAILED A LOAN OF RS.1,34,000 BY PLEDGING HER INDIVIDUAL FIXED DEPOSIT CERTIFICATE AT CATHOLIC SYRIAN BANK LIMITED, KOTHAMANGALAM. THE ASSESSEE HAS PRODUCED COPIES OF THE ACKNOWLEDGEMENT ISSUED BY CATHOLIC SYRIAN BANK LIMITED, KOTHAMANGALAM, WHILE ACCEPTING THE FIXED DEPOSIT RECEIPT AS SECURITY FOR SANCTIONING THE LOAN AGGREGATING TO RS.1,34,000. IN SIMILAR FASHION, THE ASSESSEES HUSBAND ALSO HAD AVAILED A LOAN OF RS.95,0 00 . THE ASSESSEE AND HER HUSBAND HAD ADVANCED THE LOAN ON 09.06.2004 TO THEIR TWO CLOSE RELATIVES, WHO ARE FATHER AND SON. THE INTEREST INCOME ON FIXED DEPOSIT WHICH WAS PLEDGED WITH CATHOLIC SYRIAN BANK LIMITED FOR AVAILING THE LOAN WAS DISCLOSED IN THE RETURN OF INCOME. THEREFORE, IT IS CLEAR THAT THE ASSESSEE HAS THE NECESSARY SOURCE FOR ADVANCING LOAN TO HER CLOSE RELATIVES ON 09.06.2004. THE ASSESSEES CLOSE RELATIVE SRI. PAILY ITTAN AND SRI.PAUL VARGHESE ITA NO. 45 / COCH /201 8 . DR.ASHA MATHEW . 5 TO WHOM THE LOAN WERE ADVANCED ON 09.06.2004 H AD RETURNED / REPAID THE AMOUNT ON 22.12.2004. THIS FACT IS BORNE OUT FROM THE CONFIRMATION LETTER FILED BY SRI.PAILY ITTAN, WHICH IS PLACED ON RECORD. IN THE CONFIRMATION LETTER, IT IS CLEARLY STATED THAT THEY HAD AVAILED THE LOAN OF RS.1,34,000 FROM THE ASSESSE E AND ANOTHER SUM OF RS.95,000 FROM HER HUSBAND AND THE SAME WAS REPAID TO BOTH THE ASSESSEE AND HER HUSBAND ON 22.12.2004 IN CASH. THE CONFIRMATION HAS BEEN FILED BY SRI.PAILY ITTAN, BOTH ON HIS BEHALF AND ON BEHALF OF HIS SON. THEREFORE, THERE IS NO DISC REPANCY IN THE CASE SET UP BY THE ASSESSEE. MOREOVER, WE FIND THAT IN THE CASE OF ASSESSEES HUSBAND, HE HAD SHOWN THE REPAYMENT OF RS.95,000 IN THE CASH FLOW STATEMENT. IN THE CASE OF ASSESSEES HUSBAND, THE ASSESSING OFFICER HAS ACCEPTED THOSE TRANSACTIO N AND NO ADDITION HAS BEEN MADE U/S 68 OF THE I.T.ACT. FOR THE AFORESAID REASONS, WE ARE OF THE VIEW THAT THE ADDITION MADE U/S 68 OF THE I.T.ACT IN RESPECT OF THE ASSESSEE AMOUNTING TO RS.1,34,000 IS UNCALLED FOR AND WE DELETE THE SAME. IT IS ORDERED ACCO RDINGLY. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 24 TH DAY OF OCTOBER, 2018 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 24 TH OCTOBER, 2018 . DEVDAS* ITA NO. 45 / COCH /201 8 . DR.ASHA MATHEW . 6 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - II, KOCHI 4. THE CIT , KOCHI . 5. DR, ITAT, COCHIN 6 . GUARD FILE.