Mr.Jadeppa Chandra Sekhar Gadwal , Raichur V. The income Tax Officer Ward-2, Raichur , Raichur

ITA 483/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4752 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 20-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Unexplained investment; Gift; Business income; Maximum Marginal Rate
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 48 3 / BANG/201 8 ASSESSMENT YEAR : 20 1 4 - 1 5 SHRI JADEPPA CHANDRA SEKHAR GADWAL, # 5-6-50, NETAJI ROAD, NETAJI NAGAR, RAICHUR. PAN: ALWPG7030K VS. THE INCOME TAX OFFICER, WARD 2, RAICHUR. APPELLANT RESPONDENT APPELLANT BY : SHRI SURESH MUTHUKRISHNAN, CA RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 09 . 0 5 .2018 DATE OF PRONOUNCEMENT : 01 . 06 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THEASSESSEE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT (A), GULBARGA DATED 18.12.2017 FOR ASSESSME NT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED A 0 IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROB ABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED ON A TOTAL INCOME OF RS.13,06,900/- DETERMINED BY THE LEARNED A.O. AS AGAINST THE REPORTED TOTAL TAXABLE INCOME OF RS.2,16,900/- BY T HE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED A.O. IS NOT JUSTIFIED IN MAKING AN ADDITION OF A SUM OF RS.10,90,000/- BEING THE ALLEGED CASH DEPOSITS MADE IN SAVINGS BANK ACCOUNT UNDER THE FAC TS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED A.O. IS NOT JUSTIFIED IN TREATING THE ENTIRE DEPOSITS MADE IN THE BANK ACCOU NT AS THE ITA NO. 483/BANG/2018 PAGE 2 OF 4 UNEXPLAINED INVESTMENTS U/S.69 OF THE ACT., UNDER T HE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED A.O HAS ERRED IN NOT APPRECIATING THE FACT THAT THE GIFTS WERE RECEIVED BY THE APPELLANT ON THE OCCASION OF HIS MARRIAGE FROM HIS FATHER IN LAW WHO IS AN AGRICULTURIST AND HIS IDENTITY IS NOT IN DOUBT. 6. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[ A] HAS ERRED IN NOT APPRECIATING THE EVIDENCE FILED IN SUPPORT OF THE A GRICULTURAL INCOME OF THE DONORS AND HAS MADE THE ADDITION ON A SUSPIC ION OF THE SOURCE OF SOURCE, WHICH IS CONTRARY TO LAW. 7. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED A.O HAS ERRED IN TREATING THE ENTIRE BUSINESS RECEIPTS OF THE APPELL ANT AS INCOME UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED A.O HAS ERRED IN NOT GIVING CREDIT TO THE INCOME EARNED BY THE APPELLANT DURING THE FINANCIAL YEAR, WHICH SUM HAS BEEN OFFERED TO TAX. 9. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED A.O. GROSSLY ERRED IN APPLYING THE TAX RATE AT 30% MMR U/S.115B ON THE EN TIRE DEPOSITS MADE IN THE BANK ACCOUNT AS THE UNEXPLAINED INVESTM ENTS U/S.69 OF THE ACT., UNDER THE FACTS AND CIRCUMSTANCES OF THE APPE LLANT'S CASE 10. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER W ITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S 234A AND 234B OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO B E CANCELLED. 11. IN LAW AND AS PER THE FACTS AND IN THE CIRCUMST ANCES OF THE APPELLANT'S CASE THE LEARNED AO HAD ERRED IN INITIA TING PENALTY U/S. 271(1)(C) OF THE IT ACT,1961. 12. WHEREFORE THE APPELLANT PRAYS THAT THIS HON'BLE TRIBUNAL BE PLEASED TO ALLOW THE APPEAL AND SET-ASIDE THE ORDER S PASSED BY THE AUTHORITIES BELOW TO THE EXTENT THEY ARE AGAINST TH E APPELLANT AND PASS SUCH OTHER ORDER AS THIS HON'BLE TRIBUNAL DEEM FIT AND PROPER ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ASSESSEE WAS MARRIED ON 29.05.2013 AND THE CERTIFICATE OF MARRIAGE IS AVAIL ABLE ON PAGE 20 OF PAPER BOOK. HE ALSO SUBMITTED THAT AS PER THE AFFIDAVIT OF SHRI ESHWARAPPA HAYYAL FATHER-IN-LAW OF THE ASSESSEE, IT CAN BE SEEN THAT A GIFT OF RS. 3 LAKHS WAS ITA NO. 483/BANG/2018 PAGE 3 OF 4 GIVEN BY THE PARENTS-IN-LAW OF THE ASSESSEE IN CASH AND HENCE, TO THIS EXTENT, THE CASH DEPOSIT IN BANK ACCOUNT SHOULD BE ACCEPTED AS PROPERLY EXPLAINED. IT IS ALSO SUBMITTED THAT OUT OF CASH DEPOSIT OF RS. 5 ,50,000/- ON 06.11.2013 AS PER BANK STATEMENT AVAILABLE ON PAGE NO. 3 OF THE P APER BOOK, RS. 2,50,000/- IS OUT OF THE ASSESSEES INCOME FOR THE PRESENT YEAR A ND SAVINGS OUT OF THE EARLIER YEARS. IN THIS REGARD, HE SUBMITTED THAT IN THE PR ESENT YEAR, AS PER THE RETURN OF INCOME FILED BY THE ASSESSEE, THE ASSESSEE HAS SHOW N AN INCOME OF RS. 2,16,900/- AND IT IS NOTED BY THE AO THAT THE ASSES SEE IS DERIVING INCOME FROM OTHER SOURCES. HE SUBMITTED THAT WHEN THE ASSESSEE IS HAVING INCOME OF RS. 2,16,900/- IN THE PRESENT YEAR, IT CANNOT BE SAID T HAT THE ASSESSEE WAS NOT HAVING ANY INCOME IN THE EARLIER YEARS AND HENCE, H AVING SAVINGS OF RS. 2.50 LAKHS CANNOT BE RULED OUT. REGARDING OTHER DEPOSIT S OF RS. 1,10,000/- ON 11.11.2013, RS. 1,30,000/- ON 11.12.2013 AND RS. 3 LAKHS ON 16.12.2013 TOTAL RS. 5,40,000/-, IT WAS SUBMITTED THAT THESE AMOUNTS WERE DEPOSITED BY THE PARTIES FROM WHOM THE ASSESSEE WAS EARNING INCOME A S COMMISSION. IT WAS SUBMITTED THAT THESE PARTIES DEPOSIT MONEY IN THE B ANK ACCOUNT OF THE ASSESSEE AT THE PLACE WHERE THE PARTIES WERE RESIDI NG AND THE ASSESSEE USED TO WITHDRAW THE AMOUNT FROM HIS BANK ACCOUNT ON THE SAME DAY AND GIVE BACK TO THESE PERSONS WHEN THEY VISIT THE ASSESSEES PLA CE ON THE SAME DAY AT RAICHUR SO THAT THESE PERSONS WERE SAVED FROM THE R ISK OF CARRYING CASH FROM THEIR PLACES TO RAICHUR AND HENCE, THESE CASH DEPOS ITS SHOULD ALSO BE ACCEPTED AS EXPLAINED. THE LD. DR OF REVENUE SUPPO RTED THE ORDER OF AO AND CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT OUT OF TOTAL CASH DEPOSIT IN BANK OF RS. 10.90 LAKHS, THE AO HAS ALSO BIFURCATED THE SAME IN TWO PARTS. REGARDING RS. 5.50 LAKHS IT IS THE EXPLANATION OF T HE ASSESSEE THAT THE SAME IS OUT OF PAST SAVINGS, CURRENT YEARS INCOME AND GIFT OF RS. 3 LAKHS. IN VIEW OF THIS FACT THAT THE ASSESSEE HAS DECLARED INCOME OF RS. 2.16 LAKHS IN THE PRESENT YEAR AND THE ASSESSEE IS SUBMITTING THE EVI DENCE REGARDING THE GIFT FROM HIS IN-LAWS ALONG WITH THE EXPLANATION OF THEI R SOURCES BEING OUT OF THEIR AGRICULTURAL INCOME, THIS MUCH CASH DEPOSIT IS ACCE PTABLE AS OUT OF PAST SAVINGS, CURRENT YEARS INCOME AND OUT OF GIFT. I H OLD THAT SOURCE OF THIS CASH ITA NO. 483/BANG/2018 PAGE 4 OF 4 DEPOSIT OF RS. 5.50 LACS IS PROPERLY EXPLAINED. REG ARDING THE REMAINING THREE CASH DEPOSIT OF RS. 1.10 LAKHS, RS. 1.30 LAKHS AND RS. 3 LAKHS (TOTAL RS. 5.40 LACS) WHICH WERE DEPOSITED ON THE SAME DATE AND WIT HDRAWN BY WAY OF CASH WITHDRAWAL ON THE SAME DATE, THE EXPLANATION OF THE ASSESSEE IS THIS THAT THESE THREE DEPOSITS WERE MADE BY ASSESSEES CLIENTS FROM WHOM THE ASSESSEE IS EARNING COMMISSION INCOME AND ASSESSEE IS WITHDRAWI NG THE CASH ON THE SAME DATE AND RETURNED TO THESE PERSONS IN ORDER TO SAVE THEM FROM THE RISK OF CARRYING CASH FROM THEIR PLACE TO RAICHUR I.E. ASSE SSEES PLACE. IN THE FACTS OF THE PRESENT CASE, THIS EXPLANATION DOES NOT APPEAR TO BE UNREASONABLE AND HENCE, I HOLD THAT THESE CASH DEPOSITS OF RS. 5.40 LAKHS ARE ALSO PROPERLY EXPLAINED AND HENCE, I DELETE THE ENTIRE ADDITION O F RS. 10.90 LAKHS. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.