Sri.George Alexander, Kozhencherry V. The ACIT, Circle-1, Thiruvalla, Thiruvalla

ITA 512/COCH/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5492 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 1996-1997
• Appeal Filed On: 25-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: R SRINIVASAN
• Keywords: Unexplained cash credit; Income from undisclosed sources; Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : COCHIN BENCH: KOCHI. [ BEFORE SHRI GEORGE GEORGE. K., JUDICIAL MEMBER (SMC) ] I .T.A. NO. 512 /COCH /201 7 ( ASSESSMENT YEAR : 1996 - 97 ) GEORGE ALEXANDER, MUTHOOT HOUSE, VS. KOZHENCHERRY . [PAN: RT - 1057 ] ( A PPELLANT) THE ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 1, THIRUVALLA. ( RESPONDENT) ASSESSEE BY : SHRI R. SRINIVASAN, CA REVENUE BY : SHRI A. DHANARAJ, SR.DR DATE OF HEARING : 08/11/ 2017 DATE OF PRONOUNCEMENT : 10 /11/ 201 7 O R D E R PER GEORGE GEOR GE K. , J M T HIS A PPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), KOTTAYAM DATED 09/08/2017. THE RELEVANT ASSESSMENT YEAR IS 1996 - 97. 2. THE SOLITARY ISSUE WHICH IS RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRM ING THE ADDITION OF RS. 4,99,287/ - AS UNEXPLAINED CREDITS/DEPOSITS IN VARIOUS BANK ACCOUNTS OF THE ASSESSEE. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE, AN INDIVIDUAL, HAVING INCOME FROM SALARY, INTEREST, DIVIDEND ETC. FOR THE ASSESS MENT YEARS 1996 - 97, THE RETURN OF INCOME WAS FILED ON 29/11/1996 I.T.A.NO. 512/COCH/2017 . : - 2 - : DECLARING A TOTAL INCOME OF RS.9,00,591/ - . THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT WAS COMPLETED VIDE ORDER DATED 09/03/1999, MAKING AN ADDITION OF RS. 4,99,287/ - . THE ADDITION, ACCORDIN G TO THE ASSESSING OFFICER IS WARRANTED SINCE THERE WERE DEPOSITS MADE IN DIFFERENT BANK ACCOUNTS OF THE ASSESSEE WHICH WAS NOT SATISFACTORILY EXPLAINED. THE RELEVANT FINDING OF THE ASSESSING OFFICER IN MAKING THE ADDITION OF RS.4,99,287/ - READS AS FOLLOWS : 6 . THE ASSESSEE FAILED TO FURNISH THE DETAILS OF CREDITS AND DEBITS IN HIS BANK ACCOUNT WITH BANK OF BARODA, ERNAKULAM BRANCH EXCEPT OF 3 MAJOR DEPOSITS. IT IS TRUE THAT THERE ARE INNUMERABLE ENTRIES IN THIS BANK ACCOUNT. BUT IF THE ASSESSEE HAS FILE D HIS RETURN HE SHOULD NECESSARILY HAVE ASCERTAINED WHAT WAS DEPOSITED THERE IN ORDER TO ARRIVED AT HIS CORRECT INCOME. THE ASSESSEE HAS FILED A 5 PAGE LIST OF 267 COMPANIES FROM WHERE HE HAS RECEIVED DIVIDENDS. THE LIST IS CLAIMED TO HAVE BEEN FILED FRO M THE COUNTERFOILS RECEIVED FROM THE COMPANIES ALONG WITH THE DIVIDEND WARRANTS. BUT THIS DOES NOT MAKE IT FOOLPROOF. SOME COUNTERFOILS MAY HAVE BEEN OMITTED WHILE DECLARING THE INCOME. ALL DIVIDENDS SHOULD NECESSARILY BE ROUTED THROUGH THE ASSESSEES B ANK ACCOUNT. THEREFORE, THE ONLY WAY TO DETERMINE WHAT WOULD BE THE INCOME OF THE ASSESSEE IS BY TOTALING ALL THE DEPOSITS IN THE BANK EXCLUDING DEPOSITS NOT REPRESENTING INCOME, AND DEDUCTING THEREFROM ALL INCOME DECLARED BY THE ASSESSEE THAT CAN BE SAID TO HAVE BEEN ROUTED THROUGH THE BANK AND TREATING IT AS THE INCOME OF THE ASSESSEE. THE SAME MAY OR MAY NOT REPRESENT PARTLY OR WHOLLY DIVIDEND NOT DECLARED. ANALYSIS OF THE VARIOUS B ANKS OF THE ASSESSEE IS MADE AS UNDER: - 1. BANK OF BARODA, ERNAKULAM BRANCH. TOTAL DEPOSITS RS.9,72,429 LESS: DEPOSITS NOT REPRESENTING INCOME LOAN FROM CANFIN OF SELF : RS.2,00,000 WIFE : RS.2,00,000 SELF : RS.2,00,000 DEPOSITS RELATING TO MUTHOOT BANKERS, COCHIN : RS.2,10,000 RS.8,10,000 RS.1,62,429 2 . NEDUMGADI BANK, KOZHENCHERRY BRANCH LE SS: DEPOSITS NOT REPRESENTING INCOME CANARA BANK (9150 X 2) RS.18,300 I.T.A.NO. 512/COCH/2017 . : - 3 - : VALSA MATHEW RS.32,593 MARUTI REFUND RS.10,000 GIUS RS.40,000 RS.1,00,893 LESS: INTEREST DEPOSITED IN THE B ANK RELATING TO MUTHOOT M.GEORGE BANKERS, CLAIMED AND ALLOWED (RS.6,37,517 - RS.3,55,191) RS.2,82,326 RS.3,83,219 RS.5,16,850 3. FEDERAL BANK TOTAL DEPOSITS RS.3,22,963 LESS: LIC CHEQUE OF ASSESSE E RS.2,16,878 WIFE RS. 57,000 RS.2,73,878 RS. 49,085 4. NEDUNGADI BANK, ERNAKULAM BRANCH DEPOSITS RS.5,00,148 LESS : LOAN FROM CANFIN OF - SELF RS.2,00,000 WIFE RS.3,00,000 RS.5,00,000 RS. 148 THE TOTAL AMOUNT DETERMINED AS INCOME CREDITED IN THE VARIOUS BANK ACCOUNTS IS THEREFORE AS UNDER: - BANK OF BARODA RS.1,62,429 NEDUMGADI BANK, KOZHENCHERRY BRANCH RS.5,16,850 FEDERAL BANK RS. 49,085 NEDUMGADI B ANK, ERNAKULAM BRANCH RS. 148 C/O RS.7,28,512 B/F RS.7,28,512 LESS: INCOME THAT COULD BE ROU TE D THROUGH BANK AND DECLARED BY THE ASSESSEE INTEREST RS. 16,487 L.I.C. COMMISSION RS. 8,727 RS. 30,210 UTI DIVIDEND RS. 67,762 OTHER DIVIDENDS RS.1,19,517 RS.2,42,703 LESS: TDS RS. 8,198 RS.2,34,505 RS. 4,94,007 I.T.A.NO. 512/COCH/2017 . : - 4 - : ADD: INCOME DEPOSITED IN THE BANK ACCOUNT OF SMT. ANNA ALEXANDER ON 21 - 8 - 1995 RS. 5,280 TOTAL RS.4,99,287 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE ASSESSEES CONTENTIONS RAISED BEFORE THE FIRST APPELLATE AUTHORITY IS CONDENSED IN PARA 2 OF THE IMPUGNED ORDER OF THE CIT(A). THE CIT(A) REJECTED THE ARGUMENTS RAISED BY THE ASSESSEE AND DISMISSED THE APPEAL FILED BY HIM. THE RELEVANT FINDING OF THE CIT(A ) READS AS FOLLOWS : 3. I CAREFULLY EXAMINED THE CAPTIONED ISSUE AND ALSO CONSIDERED THE R IVAL CONTENTIONS. THE CASE OF THE ASSESSING OFFICER IS SOURCE FOR THE DEPOSITS AMOUNTING TO RS.4,99,287/ - MADE IN VARIOUS BANK ACCOUNTS HAS NOT BEEN EXPLAINED SATISFACTORILY, HENCE, TO BE TREATED AS UNACCOUNTED INCOME. NOT AGREEING WITH THE ASSESSING OFFICER, THE CASE OF THE APPELLANT IS THE CREDITS IN THE BANK ACCOUNTS ARE NOTHING BUT EITHER THE DEPOSITS MADE IN HIS NAME BY THE FIRM WHEREIN HE IS PARTNER OR IN TEREST ACCRUED ON FIXED DEPOSITS MADE BY THE SISTER CONCERNS. HE IS ALSO OF THE VIEW THAT HE DECLARED AN AMOUNT OF RS.8,63,622/ - UNDER VDIS FOR THE A.Y.S 1003 - 94 TO 1996 - 97 WHICH IN TURN IS AVAILABLE FOR THE DEPOSITS MADE. THE FIRST PART OF THE APPELLANT S ARGUMENT THAT THE DEPOSITS HAVE BEEN MADE IN HIS NAME OUT OF THE FUNDS BELONGING TO THE SISTER CONCERNS AND THE INTEREST EARNED THEREON, HAS RIGHTLY BEEN TAKEN CARE BY THE ASSESSING OFFICER WHEN THE UNACCOUNTED INCOME OF RS.4,99,287 HAS BEEN WORKED OUT. THE ARGUMENT OF THE APPELLANT IN THIS REGARD IS TOTALLY MISPLACED AND WITHOUT UNDERSTANDING THE BASIS ON WHICH THE SAID UNACCOUNTED INCOME HAS BEEN WORKED OUT. IN FACT, ASSESSING OFFICER, DURING THE COURSE OF WORKING OUT THE UNACCOUNTED INCOME HAS RIGHTL Y EXCLUDED THOSE DEPOSITS WHICH CANNOT BE TREATED AS UNACCOUNTED INCOME SUCH AS LOAN AVAILED, DEPOSITS MADE ON BEHALF OF SISTER CONCERNS AND INTEREST EARNED THEREON, INCOME WHICH WAS ALREADY DECLARED BUT STILL COULD BE ROUTED THROUGH BANK ETC. THE SAME IS EVIDENCED FROM PARA 6 OF THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER HAS EXCLUDED A SUM OF RS.2,10,000/ - REPRESENTING THE DEPOSITS RELATES TO MUTHOOT BANKERS, COCHIN AND ANOTHER SUM OF RS.2,82,326/ - REPRESENTING INTEREST RELATES TO MUTHOOT M. GEORG E BANKERS. CONSIDERING ALL THE ABOVE, IT CAN BE SAID THAT THE ACCOUNTED INCOME WHICH THE ASSESSING OFFICER HAS WORKED OUT STILL REMAIN UNEXPLAINED. ANOTHER ARGUMENT OF THE APPELLANT THAT HE DECLARED AN AMOUNT OF RS.8,63,622/ - UNDER THE VDIS SCHEME AND THE SAME IS AVAILABLE FOR INVESTMENT/DEPOSITS, CANNOT SIMPLY BE ACCEPTED IN THE ABSENCE OF CREDIBLE EVIDENCE SO AS TO PROVE THAT THE DEPOSITS WERE ACTUALLY MADE OUT OF THE INCOME EARNED BETWEEN A.Y. 1993 - 94 AND 1996 - 97, FORTHCOMING. YEAR - WISE BREAKUP OF THE AM OUNT OFFERED UNDER VDIS ALSO I.T.A.NO. 512/COCH/2017 . : - 5 - : HAS NOT BEEN FILED WITHOUT WHICH THE ACTUAL AMOUNT OF MONEY THE APPELLANT HAD DURING THE YEAR UNDER CONSIDERATION CANNOT JUST BE FOUND OUT. STATING GENERALLY THAT THE AMOUNT DECLARED UNDER VDIS IS VERY MUCH AVAILABLE FOR MAKIN G INVESTMENT/DEPOSITS, WOULD NOT COME FOR THE APPELLANTS RESCUE SINCE THE DEPOSITS IN THE BANK ACCOUNTS WERE MADE ON SPECIFIED DATES WHICH IN TURN TO BE LINKED WITH AVAILABILITY OF MONEY ON THOSE DATES. IN THE CIRCUMSTANCES, I FIND NO INFIRMITY IN THE DE CISION THE ASSESSING OFFICER HAS TAKEN TO BRING TO TAX THE DEPOSITS FOR WHICH SOURCE HAS NOT BEEN EXPLAINED YET. ACCORDINGLY, THE ADDITION MADE IS HEREBY SUSTAINED. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE INCO ME TAX AUTHORITIES. 6. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE ASSESSMENT AND THE CIT(A). 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSING OFFICER IN PARA 6 OF THE ASSESSMENT ORDER HAD CATALOGUED THE UNEXPLAINED DEPOSITS IN VARIOUS BANK ACCOUNTS . WHILE WORKING OUT THE UNEXPLAINED DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSE E , THE ASSESSING OFFICER HAD GIVEN DUE CREDIT TO THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED . THE ASSESSING OFFICER HAS ALSO GIVEN CREDIT TO THE DEPOSITS NOT REPRESENTING INCOME SUCH AS LOAN FROM CANFIN, LIC MATURITY AMOUNT ETC. THE UNEXPLAINED CREDITS/DEPOSITS IN THE VARIOUS BANK ACCOUNTS CALCULATED BY THE ASSESSING OFFICER WHICH WAS CONFIRMED BY THE CIT(A), HAS NOT BEEN DISPELLED BY THE A SSESSEE BY PLACING ANY CONTRA MATERIAL/EVIDENCE. SINCE THERE IS NO CONTRA EVIDENCE OR MATERIAL PLACED BY THE ASSESSEE, THE UNEXPLAINED DEPOSITS/CREDITS IN THE BANK ACCOUNTS OF THE ASSESSEE I.T.A.NO. 512/COCH/2017 . : - 6 - : AMOUNTING TO RS. 4,9 9,287/ - CALCULATED BY THE ASSESSING OFFICER IS CONFIRMED. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH - 11 - 2017. SD/ - (GEORGE GEORGE K. ) JUDICIAL MEMBER COCHIN DATED : 10 TH NOVEMBER , 2017 COPY TO: 1. SRI GEORGE ALEXANDER, MUTHOOT HOUSE, KOZHENCHERRY. 2. T HE ASSISTANT COMMISSIONER OF INCOME - TAX , CIRCLE - 1, THIRUVALLA. . 3. THE COMMISSIONER OF INCOME - TAX(APPEALS) , KOTTAYAM. 4. THE PR. COMMISSIONER OF INCOME - TAX, KOTTAYAM . 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. SRI SSHRI S BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN