S.Britto, Coimbatore V. ITO, Pollachi

ITA 504/CHNY/2013

• Counselvise Citation: 50421714 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 08-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2013
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: T BANUSEKAR
• Keywords: Unexplained cash credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . !' , # $% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ ITA NO. 504/MDS/2013 / ASSESSMENT YEAR : 2008-09 SHRI S. BRITTO, 35/5, CRM VISION CITY, PANEER SELVAM STREET SOUTH, OTHAKALMANDAPAM, COIMBAOTRE-641 032. PAN AMPPB8785N APPELLANT) V. THE INCOME-TAX OFFICER, WARD-I(2), POLLACHI. RESPONDENT) / APPELLANT BY : SHRI T. BANUSEKAR, FCA / RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT ! / DATE OF HEARING : 08.06.2015 '# ! / DATE OF PRONOUNCEMENT: 07.08.2015 & / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 31 .1.2013. 2. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD T O CONFIRMING THE ADDITION OF ` 16,09,586/- TOWARDS DEPOSITS. - - ITA 504/1 3 2 3. THE BRIEF FACTS OF THE ISSUE ARE THAT IT WAS NOT ICED BY THE ASSESSING OFFICER THAT THERE WAS A DEPOSIT OF ` 6,05,000/- ON 17.12.2007 AND ` 10 LAKHS ON 29.12.2007 IN THE SAVINGS ACCOUNT NO.8200 AT POLLACHI, WHICH WAS NOT REFLECTED IN THE BALANCE SHEET AND RETURN OF INCOME FILED BY THE ASSESSEE. ACCORDING TO THE AO, THE DEPOSIT OF ` 16,05,000/- AND THE INTEREST OF ` 4,586/- IN THE SAVINGS ACCOUNT WERE UNEXPLAINED CREDITS AND CONSIDERED IT AS INCOME OF THE ASSESSEE. AGAINST THIS, THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(APPEALS). 4. BEFORE THE CIT(APPEALS), THE ASSESSEE STATED THA T THE ABOVE AMOUNT BELONGS TO SOME AOP AND HE IS WILLING TO FILE THE RETURN SHOWING THE DEPOSITS IN THE HANDS OF AOP. T HIS WAS NOT ACCEPTED ON THE REASON THAT THE SAVINGS BANK ACCOUN T WAS OPENED IN THE NAME OF THE INDIVIDUAL, SHRI BRITTO A ND NOT IN THE NAME OF AOP. FURTHER, THERE IS NO EVIDENCE REGARDI NG FILING OF RETURN OF INCOME OR PAN IN THE NAME OF THAT AOP. T HEREFORE, THE EXISTENCE OF AOP WAS NOT PROVED. ACCORDINGLY, THE CIT(APPEALS) CONFIRMED THE ADDITION OF `1 6,05,000/- IN THE HANDS OF THE ASSESSEE. AGAINST THIS, ASSESSEE IS IN APPE AL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE LD. AR SUBMITTED THAT THE EXISTENCE OF AOP WAS - - ITA 504/1 3 3 ACTUALLY PROVED BY THE ASSESSEE BEFORE THE CIT(APPE ALS) BY FILING A COPY OF AGREEMENT OF AOP AND IT CANNOT BE DOUBTED. ACCORDING TO THE LD. AR, WHEN THERE IS EXISTENCE OF VALID AOP, THE ADDITION CANNOT BE CONSIDERED IN THE HANDS OF T HE ASSESSEE WHICH IS AGAINST THE PROVISIONS OF SEC.4 OF THE ACT . IN OUR OPINION, THIS ARGUMENT OF THE LD. AR HAS NO MERIT. ADMITTEDLY, IN THIS CASE, SHRI S. BRITTO WAS OPENED AN SB ACCOUNT WITH SOUTH INDIAN BANK IN THE NAME OF INDIVIDUAL-ASSESSEE AND THE AMOUNT WAS DEPOSITED INTO THIS ACCOUNT ONLY. HAD IT BEEN, THERE IS A VALID EXISTENCE OF AOP, THEN IT IS NOT NECESSARY TO OPEN AN SB ACCOUNT IN THE INDIVIDUAL CAPACITY. THUS, THE AMOU NT DEPOSITED IN THE NAME OF SHRI S. BRITTO CANNOT BE CONSIDERED AS BELONGED TO AOP, UNLESS THERE IS ANY TRANSFER OF MONEY FROM AOP TO SHRI S. BRITTO. ACCORDINGLY, WE ARE NOT IN A POSITION T O ACCEPT THE ARGUMENT OF THE LD. AR AND CONFIRM THE FINDING OF T HE CIT(APPEALS). THIS GROUND OF APPEAL IS DISMISSED. 6. THE NEXT GROUND IN THIS APPEAL IS WITH REGARD TO SUSTENANCE OF ADDITION OF ` 3 LAKHS RECEIVED FROM THE ASSESSEES MOTHER. - - ITA 504/1 3 4 7. THE FACTS OF THIS ISSUE ARE THAT AN AMOUNT OF ` 8 LAKHS WAS SHOWN AS RECEIVED FROM THE ASSESSEES MOTHER, M RS. ESTHER BY CASH. THE ASSESSEE HAS EXPLAINED THAT A PROPERT Y WAS SOLD BY HIS MOTHER FOR ` 4,75,000/- AND THE SALE AMOUNT WAS GIVEN TO THE ASSESSEE AS DONATION. THERE WAS NO EXPLANATION FOR THE BALANCE AMOUNT. THEREFORE, THE ASSESSING OFFICER C ONSIDERED THE BALANCE AMOUNT OF ` 3,25,000/- AS UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE. ON APPEAL, THE CIT(APPEALS) OBSERVED THAT THERE WAS OPENING BALANCE OF ` 5 LAKHS AS ON 1.4.2007 AND HE DIRECTED THE ASSESSING OFFICER TO GIVE ANOTHER C REDIT OF ` 25,000/-. THUS, THE CIT(APPEALS) CONFIRMED THE ADD ITION OF ` 3 LAKHS OUT OF ` 8 LAKHS RECEIVED FROM HIS MOTHER. AGAINST THIS, T HE ASSESSEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE ASSESSEES MOTHER IS BEING A SENI OR CITIZEN, ` 3 LAKHS GIVEN FROM HER SAVINGS CANNOT BE DOUBTED. BE ING THE ASSESSEES MOTHER, IDENTITY IS PROVED. HENCE, IT I S TO BE CONSIDERED THAT THE ENTIRE AMOUNT OF ` 8 LAKHS RECEIVED FROM THE ASSESSEES MOTHER AS GENUINE. ACCORDINGLY, THIS AD DITION IS DELETED. - - ITA 504/1 3 5 9. THE NEXT GROUND IS WITH REGARD TO SUSTENANCE OF ADDITION OF ` 2,20,000/- RECEIVED FROM VELMURUGAN BY CASH. 10. THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE H AS RECEIVED A SUM OF ` 2,20,000/- FROM ONE SHRI VELMURUGAN BY CASH. THE ASSESSEE WAS ASKED TO PRODUCE SHRI VELMURUGAN TO SU BSTANTIATE HIS CLAIM. SHRI VELMURUGAN WAS PRODUCED BY THE ASS ESSEE ON 23.9.2010 AND A STATEMENT WAS RECORDED U/S.131 OF T HE ACT. SHRI VELMURUGAN IS NOT RELATED TO THE ASSESSEE BUT STATED TO BE A FRIEND OF THE ASSESSEE. SHRI VELMURUGAN STATED T HAT HE IS A SMALL TIME AGRICULTURALIST AND THAT HIS FATHER OWNE D ABOUT 5 ACRES OF LAND AND THAT HE DID NOT OWN ANY LAND IN HIS NAM E. HE ALSO STATED THAT HIS SISTER WAS MARRIED IN THE MONTH OF SEPT. 2007 AND ` 50,000/- TO ` 60,000/- WAS SPENT TOWARDS THE MARRIAGE EXPENSES. IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE INCOME FROM THE 5 ACRES OF LAND OWNED BY HIS FATHER WOULD BE JUST ENOUGH FOR THE SUSTENANCE OF HIS FAMILY. WHE N THE ASSESSING OFFICER ASKED TO GIVE DETAILS OF THE ALLE GED TRANSACTION, SHRI VELMURUGAN STATED THAT HE COULD N OT FURNISH THE DATES ON WHICH THE AMOUNTS WERE ADVANCED AND THE CR EDIT WORTHINESS OF SHRI VELMURUGAN HAS ALSO NOT BEEN PRO VED. THOUGH, SRI VELMURUGAN WAS PRODUCED BY THE ASSESSEE , HE - - ITA 504/1 3 6 COULD NOT EVEN STATE THE DATES OR MONTH IN WHICH TH E AMOUNTS WERE STATED TO HAVE BEEN ADVANCED. SINCE, THERE IS NO SATISFACTORY EXPLANATION OF THE CASH CREDITS, THE S AME WAS CONSIDERED AS UNEXPLAINED CASH CREDITS U/S.68 OF TH E ACT BY THE ASSESSING OFFICER. AGGRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). 11. ON APPEAL, THE COMMISSIONER OF INCOME-TAX(APPEA LS) OBSERVED THAT SHRI VELMURUGAN DOES NOT HAVE ANY SOU RCE OF INCOME TO ADVANCE THE MONEY TO THE ASSESSEE. AS HE HAS NOT ASSESSED TO TAX AND THERE IS NO EVIDENCE TO SUBSTAN TIATE THAT SHRI VELMURUGUAN HAS ADVANCED MONEY TO THE ASSESSEE , THE ADDITION OF ` 2,20,000/- IS CONFIRMED BY THE CIT(APPEALS). AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. WHEN THE ASSESSEE STATED THAT THE SAID AMOUNT WAS RECEIVED FROM SHRI VELMYURUGAN, THE ASSESSEE IS LIA BLE TO PROVE THE IDENTITY OF THE CREDITOR AND THE CREDIT WORTHIN ESS OF THE TRANSACTION. IN THIS CASE, THE ASSESSEE RECEIVED A SUM OF `2 ,20,000/- FROM SHRI VELMURUGAN, WHO IS A SMALL TIME AGRICULTURALIST AND THERE IS NO CORROBORATIVE EVIDE NCE TO SUGGEST THAT HE IS HAVING ANY OTHER MEANS TO LEND MONEY TO THE - - ITA 504/1 3 7 ASSESSEE. IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT SHRI VELMURUGAN WAS GIVEN THE AFORESAID AMOUNT TO THE AS SESSEE IN ANY FORM. THEREFORE, WE HAVE NO HESITATION TO CONF IRM THIS ADDITION. ACCORDINGLY, THIS GROUND IS REJECTED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 07 TH OF AUGUST, 2015 AT CHENNAI. SD/- SD/- ( . $ % ) ( & ' ( ) ) *+,-./01023 45067.082290.:3 ; $< /JUDICIAL MEMBER ! $<=>>2-6?06?@ABCA. &; /CHENNAI, D$ /DATED, THE 07 TH AUGUST, 2015. MPO* $E FGHG /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. I3 /CIT(A) 4. I /CIT 5. GJ% K /DR 6. %LM /GF.