ITO, V. Sri. Nagarajaguptha Sreekanth,

ITA 51/BANG/2014

• Counselvise Citation: 5121114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR K SHANKAR PRA SAD
• Keywords: Gift
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T . A. NO. 51/ BANG/20 1 4 (ASSESSMENT YEAR : 200 9 - 10 ) INCOME TAX OFFICER, WARD 2, TUMKUR . APPELLANT. VS. SHRI NAGARAJAGUPTHA SREEKANTH, COCONUT MERCHANT, SREEVANA MUGANAYAKANAKOTE, GUBBI TALUK, TUMKUR DISTRICT. .. RESPONDENT. PAN BFVPS 8870K APPELLANT BY : DR. K. SHANKAR PRASAD, JCIT (D.R) R E SPONDENT BY : NONE. DATE OF H EARING : 21.01.2015. DATE OF P RONOUNCEMENT : 4.3. 201 5 . O R D E R PER SHRI JASON P. BOAZ , A.M . : THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - II, BANGALORE DT.14.10.2013 FO R ASSESSMENT YEAR 2009 - 10. WHEN THE CASE WAS CALLED FOR HEARING ON 21.1.2005 NONE APPEARED FOR THE ASSESSEE AND THEREFORE THIS APPEAL IS BEING DISPOSED OFF WITH THE ASSISTANCE OF THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER : - 2.1 THE ASSESSEE IS A PARTNER IN M/S. SRI LAKSHMI TRADERS WHICH IS ENGAGED IN TRADING IN COPRA. FOR ASSESSMENT YEAR 2009 - 10, THE ASSESSEE FILED HIS RETURN OF INCOME ON 24.3.2010 DECLARING 2 IT A NO. 51 /BANG/201 4 INCOME OF RS.2,90,745, COMPRISING OF REMUNERATION FROM THE FIRM AND INCOME FROM OTHER SOURCES. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS COMPLE TED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DT.12.12.2011 WHEREIN THE INCOME WAS DETERMINED AT RS.20,23,745 AS AGAINST THE RETURNED INCOME OF RS.2,95,745 IN VIEW OF AN ADDITION OF RS.17,33,000 ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS AND INVESTMENT IN SH ARES UNDER SECTION 69A OF THE ACT. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2009 - 10 DT.12.12.2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (APPEALS) II, BANGALORE. THE LEARNED CIT(A) DISPOSED OFF THE ASSESSEE'S APPEAL B Y THE IMPUGNED ORDER DT.14.10.2013, ALLOWING THE APPEAL BY DELETING THE AFORESAID ADDITION OF RS.17,33,000. 3. REVENUE IS AGGRIEVED WITH THE ORDER OF THE CIT (APPEALS) II, BANGALORE DT.14.10.2013 FOR ASSESSMENT YEAR 2009 - 10 AND HAS PREFERRED THIS AP PEAL BEFORE THIS TRIBUNAL , RAISING THE FOLLOWING GROUNDS : - 1. THE ORDER OF LEARNED CIT (APPEALS) IS CLEARLY OPPOSED TO LAW AS FAR AS THE FINDINGS ARE PERVERSE, CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND HENCE NOT SUSTAINABLE. 2. THE CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.17,33,000 MADE BY THE ASSESSING OFFICER UNDER SECTION 69A OF THE IT ACT. 3. THE CIT (APPEALS) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE'S FATHER HIMSELF HAD SEVERAL CASH DEPOSITS WHICH WERE UNDISCL OSED AND THE ASSESSMENT IN HIS CASE WAS COMPLETED BY MAKING AN ADDITION OF RS.5 LAKHS. 4. THE CIT (APPEALS) HAS FAILED TO SEE WHETHER THE ASSESSEE'S FATHER HAS REALLY GIVEN THE GIFT OF RS.17,33,000 TO THE ASSESSEE. 3 IT A NO. 51 /BANG/201 4 4. CASH DEPOSITS AND INVESTME NT IN SHARES : RS.17,33,000. 4.1 THE ONLY ISSUE OF DISPUTE IN THIS APPEAL BY REVENUE, AS RAISED IN THE GROUNDS AT S.NOS.1 TO 4 (SUPRA), IS WITH RESPECT TO THE ACTION OF THE LEARNED CIT(A) IN DELETING THE ADDITION OF RS.17,33,000 MADE BY THE ASSESSING O FFICER UNDER SECTION 69A OF THE ACT IN RESPECT OF UNEXPLAINED CASH DEPOSITS / INVESTMENT IN SHARES. THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS HEARD IN SUPPORT OF THE GROUNDS RAISED. 4.2.1 WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REV ENUE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ON AN APPRECIATION OF THE FACTS ON RECORD, IT IS SEEN THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE CASH DEPOSITS, ON VARIOUS DATES BETWEEN 11.8.2008 AND 10.1.2009, AMOUNTING TO RS.17,33,000 IN HIS BANK ACCOUNT MAINTAINED AT KARUR VYSYA BANK, TUMKUR BRANCH WHICH HAD BEEN UTILISED FOR INVESTMENT IN SHARES. ON BEING QUERIED ABOUT THE S OURCE OF THESE CASH DEPOSITS AMOUNTING TO RS.17,33,0 00, THE ASSESSEE SUBMITTED THAT THIS CASH DEPOSITED IN HIS BANK ACCOUNT WAS RECEIVED BY HIM AS GIFTS FROM HIS FATHER NAGARAJA GUPTHA AND WAS USED FOR PURCHASING SHARES. A N AFFIDAVIT FROM THE ASSESSEE'S FATHER WAS ALSO FILED BEFORE THE ASSESSING OFFICER, STATING THEREIN THAT HE HAD GIVEN THE GIFT TO HIS SON OUT OF THE CASH BALANCE AVAILABLE WITH HIM. THE ASSESSING OFFICER, ON VERIFICATION OF THE RETURN OF INCOME OF THE ASSESSEE'S FATHER FOR ASSESSMENT YEAR 2009 - 10, FOUND THAT WHILE THE CASH BALANCE AS O N 31.3.2009 WAS RS.31,57,764, THE GIFT OF RS.17,33,000 MADE TO THE ASSESSEE WAS NOT REFLECTED IN THE STATEMENT OF AFFAIRS FILED AT THE INITIAL STAGES OF SCRUTINY. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE'S FATHER THEN FILED A REVISED STATEMENT OF A FFAIRS ONLY TO SHOW THAT THE GIFT OF 4 IT A NO. 51 /BANG/201 4 RS.17,33,000 HAD BEEN MADE TO THE ASSESSEE. THE ASSESSING OFFICER OBSERVED FROM THE ASSESSEE'S RETURN OF INCOME IN FORM ITR III, THAT THE ASSESSEE HAS NOT FURNISHED THE REQUIRED INFORMATION, AS REQUIRED IN SL.NO.9, (SCHEDULE AIR) REPORTING CASH DEPOSITS IN HIS BANK ACCOUNT IN EXCESS OF RS.10 LAKHS AND INVESTMENT IN SHARES IN EXCESS OF RS.1 LAKH AS REQUIRED BY LAW AND THAT THE RELEVANT ENTRIES IN THESE TWO CODES WAS REPORTED AT NIL BY THE ASSESSEE. IN THESE CIR CUMSTANCES, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE AVERMENTS OF THE ASSESSEE ; OBSERVING THAT WHILE THE ASSESSEE'S FATHER HAD DISCLOSED IN HIS RETURN OF INCOME A LOAN OF RS.6 LAKHS GIVEN BY CHEQUE TO THE ASSESSEE DEPOSITED IN THE SAME BANK ACCOU NT, IT WAS NOT LIKELY THAT HE WOULD HAVE OMITTED AN AMOUNT AS LARGE AS RS.17,33,000 IN HIS RETURN OF INCOME. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE COULD NOT HAVE OMITTED TO REPORT BOTH THE CASH DEPOSITS OF RS.17,33,000 IN HIS BANK ACCOUNTS , WHICH WERE IN EXCESS OF RS.10 LAKHS, AND ALSO THE INVESTMENT IN SHARES IN EXCESS OF RS.1 LAKH, WHILE REPORTING NIL IN BOTH COLUMNS OF SCHEDULE AIR IN HIS RETURN OF INCOME FOR THE RELEVANT PERIOD, UNLESS IT WAS DELIBERATE AND IN ORDER TO AVOID PAYMENT OF DUE TAXES THEREON. IN THIS VIEW OF THE MATTER, THE ASSESSING OFFICER HELD THAT THE AMOUNT OF RS.17,33,000 REPRESENTED THE ASSESSEE'S UNDISCLOSED INCOME OF THE ASSESSEE FOR THE RELEVANT PERIOD AND BROUGHT THE SAME TO TAX AS UNEXPLAINED CASH DEPOSIT / I NVESTMENT UNDER SECTION 69 OF THE ACT. 4.2.2 ON APPEAL, THE LEARNED CIT(A) AFTER CONSIDERING THE ASSESSEE'S SUBMISSIONS AND THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2009 - 10 DELETED THE ADDITION OF RS.17,33,000 MADE BY THE ASSESSING OFFICER UNDER SEC TION 69A OF THE ACT BY HOLDING AS UNDER AT PARA 3.4 OF THE IMPUGNED ORDER : - 5 IT A NO. 51 /BANG/201 4 3.4 I HAVE CAREFULLY CONSIDERED THE APPELLANT S SUBMISSIONS AND ALSO PERUSED THE ASSESSMENT ORDER. THE APPELLANT HAS FURNISHED COPIES OF HIS CAPITAL ACCOUNT FOR THE YEARS ENDED 31.3.2008 AND 31.3.2009. FROM THE CAPITAL ACCOUNT FOR THE YEAR ENDED 31.3.2009, IT IS SEEN THAT THE APPELLANT HAS SHOWN AN AMOUNT OF RS.17,33,000 AS GIFT FROM HIS FATHER. THE ASSESSING OFFICER S OBSERVATION IS THAT, A PERUSAL OF THE APPELLANT S FAT HER S RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, DID NOT REFLECT GIFT AS HAVING BEEN GIVEN BY HIM. BESIDES, THE APPELLANT HAS GIVEN AN EXTRACT OF HIS FATHER S BANK ACCOUNT WITH KARUR VYSYA BANK INDICATING GIFTS MADE ON DIFFERENT DATES (VIDE APPELLA NT S WRITTEN SUBMISSIONS) AGGREGATING RS.17,33,000. THE SCHEDULE TO THE BALANCE SHEET OF THE APPELLANT S FATHER AS ON 31.3.2009 SHOWS THE LARGE AREA OF AGRICULTURAL LANDS OWNED BY HIM FROM WHICH HE HAS SUBSTANTIAL AGRICULTURAL INCOME. THE APPELLANT S SUB MISSION THAT HIS FATHER HAD ENOUGH RESOURCES TO HAVE FUND TO THE EXTENT OF RS.17,33,000 TO MAKE THE GIFT AS INDICATED IN THE WRITTEN SUBMISSIONS IS REASONABLE AND ACCEPTABLE. THEREFORE, I DELETE THE ADDITION OF RS.17,33,000 MADE BY THE A.O. 4.2.3 FR OM A PERUSAL OF THE IMPUGNED ORDER OF THE LEARNED CIT(A), WE FIND THAT THE LEARNED CIT(A) HAS COME TO THE FINDING SHE DID AFTER EXAMINING THE CAPITAL A CCOUNTS OF THE ASSESSEE FOR THE YEARS ENDED 31.3.2008 AND 31.3.2009 AND FOUND THAT THE ASSESSEE HAS IN F ACT SHOWN AN AMOUNT OF RS.17,33,000 AS GIFT RECEIVED BY HIM FROM HIS FATHER, SRI NAGARAJ A GUPTHA. THE LEARNED CIT(A) HAS ALSO EXAMINED THE BANK ACCOUNT OF THE ASSESSEE'S FATHER WITH KARUR VYSYA BANK AND FOUND ENTRIES THEREIN INDICATING THAT GIFTS WERE M ADE ON VARIOUS DATES BETWEEN 11.8.2008 AND 10.1.2009 IN DIFFERENT AMOUNTS, AS HAD BEEN SUBMITTED BY THE ASSESSEE IN WRITTEN SUBMISSIONS MADE IN APPELLATE PROCEEDINGS BEFORE HER. THE LEARNED CIT(A) ALSO EXAMINED THE BALANCE SHEET AS ON 31.3.2009 OF THE AS SESSEE'S FATHER AND FOUND THAT HE OWNED LARGE AREAS OF AGRICULTURAL LAND , FROM WHICH HE EARNED SUBSTANTIAL INCOME AND HAD SUFFICIENT CASH BALANCES TO MAKE THE GIFTS AMOUNTING TO RS.17,33,000 TO THE ASSESSEE, HIS SON; IN THE PERIOD RELEVANT TO ASSESSMENT YE AR 2009 - 10. WE FIND THAT EXCEPT FOR RAISING THE GROUNDS IN THIS APPEAL CHALLENGING THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN GRANTING THE ASSESSEE RELIEF BY DELETING THE ADDITION OF RS.17,33,000 UNDER SECTION 69A OF THE ACT, REVENUE HAS FAILED TO CONTRO VERT THE 6 IT A NO. 51 /BANG/201 4 FACTUAL FINDINGS OF THE LEARNED CIT(A) WITH ANY COGENT MATERIAL EVIDENCE. IN THIS VIEW OF THE FACTUAL MATRIX OF THE CASE, WE FIND NO GOOD REASON FOR US TO INTERFERE WITH THE FINDING OF THE LEARNED CIT(A) IN DELETING THE ADDITION OF RS.17,33,000 M ADE BY THE ASSESSING OFFICER UNDER SECTION 69A OF THE ACT AND THEREFORE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A). CONSEQUENTLY, REVENUE S GROUNDS RAISED AT S.NOS. 1 TO 4 IN THIS APPEAL ARE DISMISSED. 5. IN THE RESULT, REVENUE S APPEAL FOR ASSES SMENT YEAR 2009 - 10 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2015. SD/ - (P. MADHAVI DEVI) JUDICIAL MEMBER SD/ - (JASON P BOAZ) ACCOUNTANT MEMBER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, BANGALORE