Sri.O.G.Sunil, Cochin V. DCIT, Ernakulam

ITA 50/COCH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81304 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: C B M WARRIER
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Salary income
• Section: 153A; 12

Judgement Text

1 ITA NO.42 TO 51/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 42 TO 44/COCH/2014 (ASSESSMENT YEARS 2006-07 TO 2008-09) SMT. ASHA SUNIL VS DY.CIT, CENT.CIR.2 13-B, LINK HORIZON ERNAKULAM KOCHI PAN : AIRPM9437E (APPELLANT) (RESPONDENT) I.T.A NO. 45 TO 51/COCH/2014 (ASSESSMENT YEARS 2002-03 TO 2008-09) SHRI O.G. SUNIL VS THE DY.CIT, CENT.CIR.2 13-B, LINK HORIZON ERNAKULAM KOCHI PAN : AJQPS4921L (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI CBM WARRIER RESPONDENT BY : SHRI M ANIL KUMAR, CIT DATE OF HEARING : 04-08-2014 DATE OF PRONOUNCEMENT : 08-08-2014 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE TWO INDEPENDENT ASSESSEES A RE DIRECTED AGAINST THE TWO COMMON ORDERS PASSED BY THE CIT(A). THEREFORE, WE 2 ITA NO.42 TO 51/COCH/2014 HEARD THE SAME TOGETHER AND DISPOSE OF THE APPEALS BY THIS COMMON ORDER. 2. ALL THE APPEALS WERE ORIGINALLY POSTED FOR HEARI NG ON 03-04-2014. HOWEVER, ON THE APPLICATION FILED BY THE ASSESSEE, THE SAME WERE ADJOURNED TO 29-04-2014. SUBSEQUENTLY, THE APPEALS WERE ADJOURNED TO VARIOUS DATES AND POSTED ON 06-08-2014. ON 29-07-2 014, THIS TRIBUNAL RECEIVED ORDER IN W.P.(C) NO.14917 OF 2014 (L) DATE D 08-07-2014 FROM THE KERALA HIGH COURT DIRECTING TO DISPOSE OF ALL THE A PPEALS WITHIN A PERIOD OF ONE MONTH FROM THE DATE OF THE ORDER. IMMEDIATELY, THE APPEALS, WHICH WERE POSTED FOR HEARING ON 06-08-2014 WERE PREPONED TO 01-08-2014 AND THE SAME WAS INFORMED TO BOTH THE REPRESENTATIVES F OR THE ASSESSEE AND THE REVENUE. ACCORDINGLY, THE APPEALS WERE HEARD P ARTLY ON 01-04-2014 AND FOR CONTINUATION OF THE HEARING, THE APPEALS WE RE ADJOURNED TO 04-08- 2014. ON 04-08-2014 WE HEARD BOTH SIDES. 3. THE ISSUE ARISES FOR CONSIDERATION IS ADDITION M ADE BY THE ASSESSING OFFICER ON THE BASIS OF THE SEARCH CONDUCTED AT THE PREMISES OF THE ASSESSEES ON 13-03-2008. 4. LET US FIRST TAKE THE APPEAL IN ITA NO.42/COCH/2 014 IN THE CASE OF SMT. ASHA SUNIL FOR THE ASSESSMENT YEAR 2006-07. 3 ITA NO.42 TO 51/COCH/2014 5. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF RS.10,43,815. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE ASS ESSEE SUBMITTED THAT THE ASESSEE FILED AN ADDITIONAL GROUND WITH REGARD TO THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S 153A OF THE ACT IN THE ABSENCE OF SEARCH PROCEEDINGS / SEARCH WARRANT IN THE CASE OF THE PRE SENT ASSESSEE. ACCORDING TO THE LD.REPRESENTATIVE, THE SEARCH WAS CONDUCTED IN THE CASE OF SHRI O.G. SUNIL, THE HUSBAND OF THE ASSESSEE AND NO SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE. THEREFORE, THE ASSESSMENT PROCEEDINGS AT THE BEST MAY BE FRAMED U/S 153C ON T HE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. IN THIS CASE, THE ASSESSMENT WAS FRAMED U/S 153A OF THE ACT. THEREFO RE, THE ASSESSMENT FRAMED U/S 153A IS INVALID. IMMEDIATELY, THE LD.DR , SHRI M ANIL KUMAR PRODUCED THE ASSESSMENT FOLDER FOR VERIFICATION OF THE LD.REPRESENTATIVE FOR THE ASSESSEE AND SUBMITTED THAT SEARCH WAS CONDUCTE D IN THE CASE OF SMT. ASHA SUNIL AND SEARCH WARRANT WAS ALSO ISSUED IN HE R NAME. AFTER VERIFYING THE FILES OF THE DEPARTMENT, THE LD.REPRE SENTATIVE FOR THE ASSESSEE VERY FAIRLY CONCEDED THAT HE SATISFIED THAT THERE W AS SEARCH IN THE CASE OF SMT. ASHA SUNIL ALSO, THEREFORE, HE WITHDREW THE AD DITIONAL GROUND FILED BEFORE THIS TRIBUNAL WITH REGARD TO THE VALIDITY OF THE ASSESSMENT FRAMED U/S 153A OF THE ACT. IN VIEW OF THE ABOVE FACTUAL POSITION THAT THE ASSESSMENT WAS FRAMED U/S 153A OF THE ACT ON THE BA SIS OF THE SEARCH CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 13-03- 2008, THE ADDITIONAL 4 ITA NO.42 TO 51/COCH/2014 GROUND RAISED BY THE ASSESSEE HAS NO MERIT AT ALL. MOREOVER, THE LD.REPRESENTATIVE ALSO SUBMITTED THAT HE IS WITHDRA WING THE ADDITIONAL GROUND OF APPEAL. ACCORDINGLY, THE ADDITIONAL GROU ND OF APPEAL FILED BY THE ASSESSEE IS DISMISSED. 6. NOW COMING TO THE MERIT OF THE ADDITION, THE FIR ST ADDITION IS RS.3,33,815 AS UNEXPLAINED CREDITS IN THE BANK ACCO UNT. 7. THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE DEPOSITS WERE MADE OUT OF THE TRADING RECEIPTS FROM GARMENT BUSINESS. THE ASSESSING OFFICER, WITHOUT CONSIDERING THE EXPLANAT ION OF THE ASSESSEE HAS MADE THE ADDITION. 8. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT THOUGH THE ASSESSEE IS ENGAGED IN THE GARMENT BUSINESS, TH E NET INCOME RETURNED FROM THE BUSINESS IS ONLY RS.58,250. NO WITHDRAWAL WAS SHOWN FOR MEETING THE PERSONAL EXPENSES. AT THE BEST THIS RS .58,250 CAN ONLY BE CONSIDERED TO BE FROM THE BUSINESS OF GARMENT. EVE N AFTER ALLOWING SUFFICIENT OPPORTUNITY, THE ASSESSEE COULD NOT EXPL AIN THE SOURCE FOR MAKING INVESTMENT IN THE BANK ACCOUNT TO THE EXTENT OF RS.3,33,815. THEREFORE, THE ENTIRE DEPOSIT WAS TAKEN AS INCOME O F THE ASSESSEE. 5 ITA NO.42 TO 51/COCH/2014 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE ASSESSEE DEPOSITED RS.3,33,815 IN THE BANK ACCOUNT. THOUGH THE ASSESSEE CLAIMS THAT THIS WAS A TRADING RECEIPT FRO M GARMENT BUSINESS, THE INCOME FROM TRADING OF GARMENT IS ONLY RS.58,250. THE ASSESSEE COULD NOT EXPLAIN THE SOURCE FROM WHERE THE DEPOSITS WERE MADE. EVEN BEFORE THIS TRIBUNAL, THE ASSESSEE COULD NOT EXPLAIN THE S OURCE AND MEANS FOR DEPOSIT OF RS.3,33,815. IN THE ABSENCE OF ANY MATE RIAL AND EXPLANATION FROM THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY TREATED THE DEPOSIT I N THE BANK AS UNEXPLAINED INVESTMENT. THEREFORE, THE ORDER OF THE LOWER AUTH ORITY ON THIS ISSUE IS CONFIRMED. 10. THE NEXT ADDITION IS WITH REGARD TO INVESTMENT IN PROPERTY. SHRI CBM WARRIER, THE LD.REPRESENTTIVE FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAS PURCHASED A PROPERTY TO THE EXTENT OF RS.6,30,0 00. THE STAMP DUTY AND OTHER EXPENSES COMES TO RS.7,10,000. THE ASSES SEE HAS NO EXPLANATION TO OFFER. WE HEARD SHRI M ANIL KUMAR, THE LD.DR ALSO. 11. THE FACT THAT THE ASSESSEE PURCHASED PROPERTY B Y INVESTING AN AMOUNT OF RS.7,10,000 IS NOT DISPUTED. THEREFORE, IT IS FOR THE ASSESSEE TO EXPLAIN FROM WHERE THE ASSESSEE GOT THE FUNDS FOR M AKING INVESTMENT AND 6 ITA NO.42 TO 51/COCH/2014 WHY THE SAME SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE. THE ASSESSEE HAS NO EXPLANATION TO OFFER. THEREFORE, T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS R IGHTLY TAKEN THE ENTIRE AMOUNT AS INCOME OF THE ASSESSEE. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY T HE SAME IS CONFIRMED. 12. IN THE RESULT, APPEAL IN ITA NO.42/COCH/2014 IS DISMISSED. 13. NOW COMING TO APPEAL IN ITA NO.43/COCH/2014 IN THE CASE OF SMT. ASHA SUNIL FOR THE ASSESSMENT YEAR 2007-08, SHRI CB M WARRIER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSING OFFICER MADE ADDITION OF RS.38,39,969 TOWARDS UNEXPLAINED I NVESTMENT IN THE BANK ACCOUNT AND PROFIT FROM SALE OF LAND. ACCORDI NG TO THE LD.REPRESENTATIVE, THE ASSESSEE EXPLAINED THAT THE DEPOSITS WERE MADE IN THE BANK FROM SALE PROCEEDS OF THE LAND. HOWEVER, THE ASSESSING OFFICER FOUND THAT THE LAND ITSELF WAS PURCHASED ON 07-04-2 006 AND THE INVESTMENT IN THE LANDED PROPERTY WAS NOT EXPLAINED. THE ASSE SSING OFFICER HAS ALSO TREATED THE PROFIT ON SALE OF THE LAND TO THE EXTEN T OF RS.5,93,100 AS BUSINESS PROFIT. ACCORDING TO THE LD.REPRESENTATIV E, THESE DEPOSITS WERE MADE FROM TRADING RECEIPTS AND FROM THE SALE PROCEE DS OF THE LAND. WE HEARD SHRI M ANIL KUMAR, THE LD.DR ALSO. 7 ITA NO.42 TO 51/COCH/2014 14. THOUGH THE ASSESSEE EXPLAINS THAT THE DEPOSITS WERE MADE FROM SALE PROCEEDS OF THE LAND, THE DETAILS OF TRANSACTI ONS AND SALE OF THE LAND WERE NOT FILED BEFORE THE ASSESSING OFFICER. THE A SSESSING OFFICER FOUND THAT THE PROPERTY SOLD BY THE ASSESSEE ITSELF WAS P URCHASED ON 07-04-2006 DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. TH EREFORE, THE ASSESSEE HAS TO EXPLAIN THE SOURCE FOR MAKING INVESTMENT IN THE LANDED PROPERTY. THE ASSESSEE IS ENGAGED IN THE REAL ESTATE BUSINESS , THEREFORE, THE PROFIT ARISING OUT OF PURCHASE AND SALE OF REAL ESTATE HAS TO BE TREATED AS UNEXPLAINED INCOME. IN THE ABSENCE OF ANY DETAILS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONF IRMED THE ADDITION. IT IS FOR THE ASSESSEE TO EXPLAIN THE SOURCE FOR MAKING T HE DEPOSIT IN THE BANK AND THE SOURCE FOR MAKING THE INVESTMENT IN THE LAN DED PROPERTY. IT IS ALSO THE RESPONSIBILITY OF THE ASSESSEE WHY SUCH INVESTM ENT SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE. IN THE ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION. ACCORDI NGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED. 15. IN THE RESULT, APPEAL IN ITA 43/COCH/2014 IS DI SMISSED. 16. NOW COMING TO APPEAL IN ITA NO.44/COCH/2014 FOR THE ASSESSMENT YEAR 2008-09 IN THE CASE OF SMT. ASHA SUNIL, THE SO LE GROUND OF APPEAL IS 8 ITA NO.42 TO 51/COCH/2014 WITH REGARD TO ADDITION OF RS. 6,67,68,547 ON ACCOU NT OF UNEXPLAINED INVESTMENTS. 17. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES FATHER SHRI GEORGE PHILIP WAS A N AIRCRAFT MAINTENANCE ENGINEER IN BAHRAIN. THE LD.REPRESENTATIVE SUBMITT ED THAT FROM HIS SALARY INCOME HE GIFTED TO HIS DAUGHTER ASHA SUNIL. THE L D.REPRESENTATIVE HAS PRODUCED THE COPY OF THE BANK STATEMENT FROM WHICH THE MONEY WAS TRANSFERRED TO THE ASSESSEE. COPY OF THE ACCOUNT P RODUCED BY THE ASSESSEE CLEARLY SHOWS THAT THE MONEY WAS TRANSFERR ED FROM SINGAPORE TO INDIA BY WAY OF TELEGRAPHIC TRANSFER AND WITHIN A D AY OR TWO, THE SAME AMOUNT WAS TRANSFERRED TO THE ASSESSEES ACCOUNT. ON A QUERY FROM THE BENCH, WHEN THE ASSESSEES FATHER WAS WORKING IN BA HRAIN AS AN AIRCRAFT MAINTENANCE ENGINEER, HOW THE MONEY WAS TRANSFERRED FROM SINGAPORE TO INDIA TO THE ASSESSEES FATHERS ACCOUNT, THE LD.RE PRESENTTIVE FOR THE ASSESSEE COULD NOT GIVE ANY SATISFACTORY EXPLANATIO N. HOWEVER, HE SUBMITTED THAT ASSESSEES FATHER MIGHT HAVE TRANSFE RRED HIS SALARY FROM SINGAPORE. THE MONEY, ACCORDING TO THE LD.REPRESEN TATIVE, WAS TRANSFERRED FROM TANDON INVESTMENT COMPANY IN SINGAPORE. THE L D.REPRESENTATIVE FURTHER SUBMITTED THAT SINCE ADMITTEDLY THE MONEY W AS TRANSFERRED FROM ASSESSEES FATHERS ACCOUNT TO ASSESSEES ACCOUNT, IF AT ALL ANY ADDITION COULD BE MADE IT SHOULD BE MADE ONLY IN THE HANDS O F THE ASSESSEES 9 ITA NO.42 TO 51/COCH/2014 FATHER AND NOT IN THE HANDS OF THE ASSESSEE. ACCOR DING TO THE LD.REPRESENTATIVE, THE MONEY WAS ROUTED THROUGH BAN KING CHANNEL FROM THE ASSESSEES FATHERS ACCOUNT, THEREFORE, THE ASSESSE E IS NOT THE OWNER OF THE MONEY. ASSESSEES FATHER GIFTED THE MONEY TO T HE ASSESSEE. IN THOSE CIRCUMSTANCES, ACCORDING TO THE LD.EPRESENTATIVE, A DDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 18. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR S UBMITTED THAT THE FINANCIAL INTELLIGENT WING RECEIVED AN INFORMATION ABOUT THE TRANSFER OF FUNDS FROM SINGAPORE TO CITY BANK IN THE ASSESSEES FATHERS ACCOUNT AND FURTHER TRANSFER TO ASSESSEES ACCOUNT. THE ASSESS EE BY A NOTICE DATED 07-09-2009 WAS REQUESTED TO FURNISH SPECIFIC INFORM ATION WITH REGARD TO TRANSFER OF FUNDS. THE ASSESSEE COULD NOT PRODUCE ANY EXPLANATION. THOUGH THE ASSESSEE FILED CONFIRMATION LETTER FROM HER FATHER SHRI GEORGE PHILIP, THE CREDITWORTHINESS OF SHRI GEORGE PHILIP FOR MAKING SUCH HUGE GIFT WAS NOT FILED BEFORE THE LOWER AUTHORITIES. ACCORD ING TO THE LD.DR, THE MONEY WAS FOUND TO BE CREDITED IN THE ACCOUNT OF TH E ASSESSEE FROM CITY BANK IN SINGAPORE. THE LETTER SAID TO BE WRITTEN B Y SHRI GEORGE PHILIP DOES NOT DISCLOSE THE SOURCE OF EARNING OF SUCH HUG E MONEY. THOUGH SHRI GEORGE PHILIP CLAIMS THAT THE SAME WAS FROM SALARY AND SAVINGS, NO MATERIAL WAS PRODUCED TO SUPPORT THE CLAIM. IN THE ABSENCE OF ANY EVIDENCE, ACCORDING TO THE LD.REPRESENTATIVE, THE A SSESSING OFFICER 10 ITA NO.42 TO 51/COCH/2014 CONFIRMED THE ADDITION BY PLACING RELIANCE ON THE J UDGMENT OF THE APEX COURT IN CIT VS P MOHANAKALA 291 ITR 278 (SC); SUMA TI DAYAL VS CIT 214 ITR 801 (SC); AND ITO VS DIZA HOLDINGS (P) LTD 255 ITR 573 (KER). 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEES ACCOUNT WAS CREDITED BY T.T. TRANSFER FROM CITY BANK. THE ASSE SSEE CLAIMS THAT THE ASSESSEES FATHER WAS HAVING AN ACCOUNT IN CITY BAN K AND THE MONEY BELONGS TO ASSESSEES FATHER WAS GIFTED TO THE ASSE SSEE. THE ASSESSEES FATHER SAID TO BE EMPLOYED AS AIRCRAFT MAINTENANCE ENGINEER AT BAHRAIN AND HIS SALARY AND SAVINGS WERE USED FOR TRANSFER O F FUNDS TO THE ASSESSEES ACCOUNT. ON EXAMINATION OF THE ASSESSEE S FATHERS BANK ACCOUNT, IT APPEARS, THE FUNDS WERE RECEIVED BY THE BANK ON T.T. TRANSFER. AFTER THIRD OR FOURTH DAY, THE SAME AMOUNT WAS TRAN SFERRED TO THE ASSESSEES ACCOUNT. THEREFORE, THIS CANNOT BE FROM SAVINGS OF THE ASSESSEES FATHER. IF IT IS OUT OF SAVINGS, THERE SHOULD BE RECURRING CREDITS AND IT CANNOT BE A ONE TIME TRANSFER TO THE BANK AC COUNT OF THE ASSESEES FATHER. IN FACT, THE ASSESSING OFFICER HAS OBSERVE D AS FOLLOWS WITH REGARD TO THE NATURE OF TRANSACTION ON PAGE 7 OF THE ASSESSME NT ORDER: THE EXAMINATION OF THE ACCOUNT OF SHRI GEORGE PHI LIP WITH THE CITY BANK (A/C NO.5-0170190467) REVEALS TH AT THE 11 ITA NO.42 TO 51/COCH/2014 AMOUNTS TRANSFERRED TO SMT. ASHA SUNIL WERE CREDITE D IN HIS ACCOUNTS ONLY A FEW DAYS PRIOR TO THE TRANSFER OF T HOSE FUNDS TO HER. THOSE AMOUNTS WERE CREDITED TO HIS ACCOUNTS O N TT TRANSFER / FUNDS TRANSFER. THE FIRST THREE TRANSFE RS TO THE ACCOUNT OF SMT. ASHA SUNIL ARE OF THE SAME AMOUNTS RECEIVED BY HIM IN HIS ACCOUNT. THE FURTHER TRANSFER TO SMT. ASHA SUNILS ACCOUNT ON 10.10.2207 (SIC) IS RS.1,13,99,908/- WHERE AS THE AMOUNT CREDITED TO SHRI GEORGE PHILIPS ACCOUNT IS RS.1,23,37,993.42. APPARENTLY, THE WHOLE OF THE MO NEY RECEIVED BY SHRI GEORGE PHILIP HAS BEEN TRANSFERRED TO THE ACCOUNT OF SMT. ASHA SUNIL. SHRI GEORGE PHILIP HAS ACTED AS AN AGENT OF TRANSFER OF FUNDS FROM AN UNKNOWN PERSO N TO SMT. ASHA SUNIL. SHRI GEORGE PHILIPS BANK ACCOUNT IS O NLY A CONDUIT FOR TRANSFER OF FUNDS FROM UNDISCLOSED / UN IDENTIFIED PERSON TO SMT. ASHA SUNIL. THE FACT THAT THE CREDI T OF THE ABOVE AMOUNTS TO THE ACCOUNT OF SHRI GEORGE PHILIP IS A SUSPICIOUS TRANSACTION REPORTED BY THE BANK TO THE FINANCIAL INTELLIGENCE UNIT, MINISTRY OF FINANCE POINTS OUT T HE DOUBTFUL NATURE OF THE RECEIPTS. 20. FROM THIS IT IS OBVIOUS THAT THE FUNDS WERE TRA NSFERRED TO THE ASSESSEES FATHERS ACCOUNT BY T.T. TRANSFER AND AG AIN IT WAS RETRANSFERRED TO ASSESSEES ACCOUNT. THEREFORE, IT IS FOR THE AS SESSEE TO EXPLAIN HOW THE ASSESSEES FATHER GOT THE FUNDS. THE ASSESSING OFF ICER HAS TAKEN PAIN IN EXAMINING ASSESSEES FATHER. HOWEVER, HE COULD NOT GIVE ANY SATISFACTORY EXPLANATION EXCEPT BY SAYING THAT IT WAS HIS SAVING S AND SALARY. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE ASSESSEES FATHER HAS SAVED SO 12 ITA NO.42 TO 51/COCH/2014 MUCH OF MONEY, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE CLAIM OF THE ASSESSEE / HER FATHER THAT THE TRANSFER WAS FRO M SAVINGS OF HER FATHER CANNOT BE ACCEPTED. TO ACCEPT THE GIFT, THE ASSESS EE HAS TO DEFINITELY ESTABLISH THE CREDITWORTHINESS OF HER FATHER. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT IF THE ASSESSEE COULD NOT EXPLAIN THE CREDITWORTHINESS, THE ADDITION COULD BE MADE ONLY I N THE HANDS OF THE ASSESSEES FATHER. THE CASE OF THE DEPARTMENT AS I T APPEARS FROM THE ASSESSMENT ORDER CLEARLY SHOWS THAT SHRI GEORGE PHI LIP ACTED AS AN AGENT FOR TRANSFER OF FUNDS FROM UNKNOWN PERSON TO SMT. A SHA SUNIL. THE ASSESSING OFFICER HAS ALSO FOUND THAT THE ASSESSEE S FATHERS BANK ACCOUNT IS ONLY A CONDUIT FOR TRANSFER OF FUNDS FROM UNIDEN TIFIED PERSON. IN THE ABSENCE OF ANY MATERIAL TO SUGGEST THAT THE ASSESSE ES FATHER HAS SUFFICIENT CREDITWORTHINESS TO CREDIT SUCH A HUGE M ONEY TO THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION. THE ONUS IS ON THE ASSESSE E TO PROVE THE CREDITWORTHINESS OF HER FATHER, GENUINENESS OF THE TRANSACTION AND IDENTITY OF THE PARTIES. IN THIS CASE, THOUGH THE ASSESSEE CLAIMS THAT THE FUNDS WERE TRANSFERRED FROM HER FATHERS ACCOUNT, THE CRE DITWORTHINESS IS NOT PROVED. MERELY BECAUSE THE FUNDS WERE TRANSFERRED FROM BANKING CHANNEL, IT WILL NOT PROVE THE GENUINENESS OF THE TRANSACTIO N AS HELD BY THE APEX COURT IN THE CASE OF P MOHANAKALA (SUPRA). IN VIEW OF THE ABOVE, WE DO 13 ITA NO.42 TO 51/COCH/2014 NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AU THORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 21. IN THE RESULT, APPEAL IN ITA NO.44/COCH/2014 IS DISMISSED. 22. NOW COMING TO APPEAL FILED BY SHRI O.G. SUNIL, IN APPEAL IN ITA NO.45/COCH/2014 FOR THE ASSESSMENT YEAR 2002-03 THE ASSESSEE IS CHALLENGING THE ADDITION OF RS.36,67,010. 23. ACCORDING TO THE LD.REPRESENTATIVE, SHRI CBM WA RRIER, THE ASSESSING OFFICER HAS TAKEN RS.15,04,891 AS UNEXPLAINED BANK DEPOSIT. ACCORDING TO THE LD.REPRESENTTIVE, THE TOTAL DEPOSIT WAS RS.19,5 4,243. THE ASSESSING OFFICER HAS FAILED TO TAKE CHEQUE DEPOSIT TO THE EX TENT OF RS.4,48,828. THE LD.REPRESENTATIVE VERY FAIRLY SUBMITTED THAT THE AS SESSEE COULD NOT EXPLAIN THE SOURCE FOR MAKING THESE DEPOSITS. HOWEVER, IT IS FROM REAL ESTATE BUSINESS. THEREFORE, ACCORDING TO THE LD.REPRESENT ATIVE, ONLY THE NET AMOUNT SHOULD BE TAKEN AND NOT THE GROSS AMOUNT. A CCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE HAS INCURRED EXPEND ITURE AFTER WITHDRAWING THE SAME FROM THE BANK ACCOUNT. THEREFORE, THE EXP ENDITURE SHOULD BE DEDUCTED FROM THE TOTAL DEPOSITS. REFERRING TO THE UNEXPLAINED CREDITS TO THE EXTENT OF RS.10,77,219 THE LD.REPRESENTATIVE SU BMITTED THAT THIS UNEXPLAINED CREDIT MIGHT HAVE BEEN USED FOR MAKING DEPOSIT IN THE BANK 14 ITA NO.42 TO 51/COCH/2014 ACCOUNT. THEREFORE, IT SHOULD NOT BE TAKEN AS INCO ME OF THE ASSESSEE. CASH WITHDRAWAL FROM THE BANK TO THE EXTENT OF RS.2 ,91,600 WAS ALSO TAKEN AS INCOME OF THE ASSESSEE. ACCORDING TO THE LD.REP RESENTATIVE, ONCE THE DEPOSIT WAS TAKEN AS INCOME, THE WITHDRAWAL SHOULD NOT BE TAKEN AS INCOME ONCE AGAIN. 24. REFERRING TO THE FOREIGN TRAVEL EXPENSES, THE L D.REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.5 LAKHS TOWARDS FOREIGN TRAVEL EXPENSES. ACCORDING TO THE LD.REPRE SENTATIVE, THE FOREIGN TRAVEL EXPENSES WERE MADE FROM THE WITHDRAWALS MADE FROM THE BANK ACCOUNT. 25. ON THE CONTRARY, THE LD.DR, SHRI M ANIL KUMAR S UBMITTED THAT DURING THE COURSE OF SEARCH OPERATION SEVERAL MATERIALS WE RE FOUND WITH REGARD TO DEPOSIT OF MONEY IN THE BANK AND INVESTMENTS. THE ASSESSEE HAS ALSO FILED A CASH FLOW STATEMENT BEFORE THE ASSESSING OF FICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FOR THE ASSESSMENT YEAR 2002-03, THE ASSESSEE HAS DISCLOSED ONLY A DEPOSIT OF RS.8,76,50 0 IN THE CASH FLOW STATEMENT. HOWEVER, THE MATERIAL FOUND BY THE ASSE SSING OFFICER DISCLOSED DEPOSIT OF RS.15,04,891. THE ASSESSEE HAS ALSO SHO WN CREDIT TO THE EXTENT OF RS.10,77,219. HOWEVER, THE DETAILS WERE NOT FURNISHED. THE ASSESSEE HAS SHOWN IT AS SUSPENSE IN THE CASH FLOW STATEMENT. IN THE 15 ITA NO.42 TO 51/COCH/2014 ABSENCE OF ANY DETAILS REGARDING THE CREDITORS, THE NATURE OF TRANSACTION, ACCORDING TO THE LD.DR, THE ASSESSING OFFICER HAS T AKEN THE UNEXPLAINED CREDIT WHICH IS DISCLOSED AS SUSPENSE ACCOUNT IN TH E CASH FLOW STATEMENT AS INCOME OF THE ASSESSEE. THE ASSESSEE HAS SHOWN A DEFICIENCY OF RS.11,69,800 IN THE CASH FLOW STATEMENT FILED BEFOR E THE ASSESSING OFFICER. IN THE ABSENCE OF ANY MATERIAL, THE DEFICIENCY, I.E . THE DIFFERENCE BETWEEN THE RECEIPTS AND EXPENDITURE WAS TAKEN AS INCOME OF THE ASSESSEE. THE EXPENSES INCURRED BY THE ASSESSEE TO THE EXTENT OF RS.5 LAKHS FOR FOREIGN TRAVEL WAS NOT DISCLOSED IN THE CASH FLOW STATEMENT SINCE THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT WITH REGAR D TO THE EXPENDITURE INCURRED OF RS.5 LAKHS WHICH WAS NOT DISCLOSED IN T HE CASH FLOW STATEMENT WAS TAKEN AS INCOME OF THE ASSESSEE. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. THE ASSESSEE HAS RECEIVED HUGE RECEIPT FROM VARIOUS PERSONS. HOWEVER, THE DETAILS OF SUCH PERSONS WERE NOT DISCLOSED TO THE DEPARTMENT. THERE MAY BE VARI OUS REASONS FOR THE ASSESSEE FOR NOT DISCLOSING THE DETAILS OF THE PERS ONS FROM WHOM MONEY WAS RECEIVED. THE FACT REMAINS IS THAT THE ASSESSE E HAS DEPOSITED CASH AND CHEQUE TO THE EXTENT OF RS.19,54,243, AS ADMITT ED BY THE LD.REPRESENTATIVE FOR THE ASSESSEE, IN THE BANK. H OWEVER, THE ASSESSING 16 ITA NO.42 TO 51/COCH/2014 OFFICER HAS TAKEN ONLY RS.15,04,893. THE CHEQUE PA YMENT TO THE EXTENT OF RS.5,68,316 WAS NOT CONSIDERED BY THE ASSESSING OFF ICER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN THE A BSENCE OF ANY DETAILS WITH REGARD TO EARNING OF INCOME AND THE DETAILS OF THE PERSONS FROM WHOM THE MONEY WAS RECEIVED, THE ASSESSING OFFICER HAS RIGHT LY TREATED THE ENTIRE AMOUNT AS INCOME. IN FACT, THE ASSESSING OFFICER O MITTED TO CONSIDER RS.5,68,316. THIS TRIBUNAL HAS NO POWER OF ENHANCE MENT UNDER THE SCHEME OF THE INCOME-TAX ACT. THEREFORE, THE ADDIT ION TO THE EXTENT OF RS.15,04,891 IS CONFIRMED. 27. NOW COMING TO THE UNEXPLAINED CREDIT TO THE EXT ENT OF RS.10,77,219, THE ASSESSEE HAS SHOWN THE SAME AS LOAN FROM OTHERS IN THE CASH FLOW STATEMENT. IF THE ASSESSEE HAS TAKEN LOAN FROM OTH ERS IT IS FOR THE ASSESSEE TO EXPLAIN THE IDENTITY OF THE PERSONS, WH O GAVE THE MONEY ON LOAN, THE CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. IN THE ABSENCE OF ANY DETAILS AND TH E ASSESSEE HAS DISCLOSED THE SAME AS SUSPENSE ACCOUNT, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY TAKE N THE SAME AS INCOME OF THE ASSESSEE. IT IS UNFORTUNATE THAT EVEN THE REPA YMENT OF HOUSING LOAN TO HDFC BANK COULD NOT BE EXPLAINED BY THE ASSESSEE BE FORE THE LOWER AUTHORITIES. THEREFORE, THE REPAYMENT OF LOAN TO H DFC BANK HAS TO BE TAKEN AS INCOME OF THE ASSESSEE. 17 ITA NO.42 TO 51/COCH/2014 28. THE ASSESSEE HAS WITHDRAWN AN AMOUNT OF RS.2,91 ,600 FROM THE BANK. SINCE THE AMOUNT WAS WITHDRAWN FROM BANK OUT OF THE DEPOSIT MADE IN THE BANK, THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT RS.2,91,600 WHICH WAS WITHDRAWN FROM BANK CANNOT BE TREATED AS INCOME OF THE ASSESSEE. IN OTHER WORDS, THE AMOUNT OF RS.2,91,60 0 WAS PART OF RS.15,04,891 WHICH WAS ALREADY ADDED BY THE ASSESSI NG OFFICER AND ADDITION OF RS.2,91,600 ONCE AGAIN WOULD AMOUNT TO DOUBLE ADDITION. THEREFORE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE AD DITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF RS.2,91,600 ON T HE BASIS OF THE CASH WITHDRAWALS MADE BY THE ASSESSEE FROM THE BANK ACCO UNT. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND T HE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.2,91,600 WITH REGARD TO CASH WITHDRAWAL FROM THE BANK AS SHOWN IN THE CASH FLOW STATEMENT. 29. THE ASSESSING OFFICER MADE ADDITION OF ANOTHER SUM OF RS.5 LAKHS WITH REGARD TO FOREIGN TRAVEL EXPENSES. IT IS AN A DMITTED FACT THAT THE ASSESSEE UNDERTOOK FOREIGN TRAVEL DURING THE YEAR U NDER CONSIDERATION. THE SOURCE FOR THE EXPENDITURE WAS NOT DISCLOSED BE FORE THE ASSESSING OFFICER. IT IS ALSO NOT DISCLOSED IN THE CASH FLOW STATEMENT. THE ASSESSEE IS ALSO NOT MAINTAINING ANY BOOKS. IN THOSE CIRCUM STANCES, THE CIT(A) HAS RIGHTLY MADE ADDITION TO THE EXTENT OF RS.5 LAKHS. IN TOTAL THE UNEXPLAINED 18 ITA NO.42 TO 51/COCH/2014 INVESTMENT AND EXPENDITURE TO THE TUNE OF RS.33,75, 410 IS CONFIRMED OUT OF THE ADDITION OF RS.36,67,010. THE ASSESSING OFFICE R IS DIRECTED TO DELETE THE ADDITION OF RS.2,91,600. 30. THE ONLY ISSUE INVOLVED IN THE REMAINING APPEAL S IN ITA NOS 46 TO 51/COCH/2014 IN THE CASE OF SHRI O.G. SUNIL IS ADDI TION ON ACCOUNT OF UNEXPLAINED INVESTMENTS. THE ISSUE IS IDENTICAL TO THE ISSUES DISCUSSED IN ITA NO.45/COCH/2014 FOR THE ASSESSMENT YEAR 2002-03 . WHILE DEALING WITH THE APPEAL FOR ASSESSMENT YEAR 2002-03 WE HAVE FOUND THAT OUT OF THE TOTAL ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVES TMENTS OF RS. 36,67,010 AN AMOUNT OF RS.2,91,600 HAS TO BE DELETE D AS THE SAME REPRESENTS WITHDRAWAL FROM BANK OUT OF THE DEPOSITS IN THE BANK ACCOUNT AND THE ADDITION OF THE WITHDRAWAL WOULD AMOUNT TO DOUBLE ADDITION. THE FACTS AND CIRCUMSTANCES ARE IDENTICAL FOR THE ASSES SMENT YEARS 2003-04 TO 2008-09 ALSO. ADMITTEDLY, THERE ARE DEPOSITS IN BA NK ACCOUNT OF THE ASSESSEE. THE ASSESSEE COULD NOT FILE ANY EXPLANAT ION REGARDING THE SOURCE OF RECEIPT OF MONEY EXCEPT SAYING THAT IT IS FROM REAL ESTATE BUSINESS. IN THE ABSENCE OF ANY DETAILS / MATERIAL THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ENTIRE DEPOSITS IN BANK ACCOUNT SHALL BE TREATED AS INCOME OF THE ASSESSEE. THE ASSESSEE HIMSELF HA S SHOWN THE CASH CREDIT AS SUSPENSE OR CASH DEFICIT IN THE CASH FLOW STATEMENT AS IN THE CASE FOR THE ASSESSMENT AS IN THE CASE FOR THE ASSESSMEN T YEAR 2002-03. 19 ITA NO.42 TO 51/COCH/2014 THEREFORE, THE REASONS GIVEN BY THE TRIBUNAL FOR TH E ASSESSMENT YEAR 2002-03 ARE EQUALLY APPLICABLE FOR OTHER YEARS UNDE R CONSIDERATIONS. ACCORDINGLY, WE FOLLOW THE DECISION ALREADY ARRIVED AT FOR THE ASSESSMENT YEAR 2002-03 IN THESE YEARS ALSO. THUS, THE ADDITI ON CONTESTED AND THE ADDITION TO BE DELETED YEAR-WISE FOR THE ASSESSMENT YEAS 2003-04 TO 2008- 09 ON ACCOUNT OF WITHDRAWAL FROM THE BANK ACCOUNT O UT OF THE DEPOSITS MADE IS ILLUSTRATED BELOW: ASSESSMENT YEAR ADDITION WITHDRAWAL FROM BANK -------------------------- ------------- --------- ------- 2003-04 84,51,269 12,71,120 2004-05 96,95,034 11,99,600 2005-06 2,31,88,161 17,57, 196 2006-07 76,07,693 27,24,607 2007-08 1,02,65,429 12,87, 488 2008-09 4,55,14,549 47,04, 660 31. FOR THE DETAILED REASONS GIVEN FOR THE ASSESSME NT YEAR 2002-03 ABOVE, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.12,71,120 FOR THE ASSESSMENT YEAR 2003-04; RS.11 ,99,600 FOR THE ASSESSMENT YEAR 2004-05; RS.17,57,196 FOR THE ASSES SMENT YEAR 2005- 06; RS.27,24,607 FOR THE ASSESSMENT YEAR 2006-07; R S.12,87,488 FOR THE ASSESSMENT YEAR 2007-08; AND RS.47,04,660 FOR THE A SSESSMENT YEAR 20 ITA NO.42 TO 51/COCH/2014 2008-09. OTHER THAN THESE AMOUNTS, THE REMAINING A DDITIONS IN EVERY ASSESSMENT YEAR ARE CONFIRMED. 32. WITH THE ABOVE REMARKS THE ORDERS OF THE CIT(A) FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09 ARE CONFIRMED PARTLY. 33. IN THE RESULT, APPEALS IN ITA NOS 42 TO 44/COCH /2014 ARE DISMISSED AND THE APPEALS IN ITA NOS 45 TO 51/COCH/2014 ARE P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 TH AUGUST, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 08 TH AUGUST, 2014 PK/- COPY TO: 1. SMT. ASHA SUNIL / OG SUNIL, 13-B, LINK HORIZON, KOCHI 2. DY.CIT, CENT.CIR.2, ERNAKULAM 3. THE COMMISSIONER OF INCOME-TAX (CENTRAL), KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-III, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH