Sri.Vijayakumar P.D., Kottayam V. The ITO, Kottayam

ITA 525/COCH/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1494 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 16-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Keywords: Unexplained investment; Onus to prove
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN SMC BENCH, COCHIN BEFORE SHRI GEORGE GEORGE K, J UDICIAL MEMBER ITA NO. 525 /COCH/201 8 : ASST.YEAR 201 4 - 201 5 SRI.VIJAYAKUMAR P.D. PARAYIL HOUSE NAGAMPADOM KOTTAYAM 686 001. PAN : AFPPD7247E. VS. THE INCOME TAX OFFICER WARD 5 KOTTAYAM. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.M.S.RAJAGOPAL, ADVOCATE RESPONDENT BY : SMT.A.S.BINDHU, SR.DR DATE OF HEARING : 13 .06.2019 DATE OF PRONOUNCEMENT : 1 3 .06.2019 O R D E R THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE COMMISSIONER OF INCOME - TAX (APPEALS)S ORDER DATED 31.07.2018 . THE RELEVANT ASSESSMENT YEAR IS 201 4 - 201 5 . 2. THE SOLITARY ISSUE THAT IS RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUST IFIED IN CONFIRMING THE ADDITION OF RS.26,00,000 MADE BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT / INCOME U/S 69 OF THE INCOME - TAX ACT, 1961? 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: - THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR 2014 - 2015, THE RETURN OF INCOME WAS FILED ON 10.01.2015 DECLARING A TOTAL INCOME OF RS.14,01,271 . THE ASSESSEES CASE ITA NO. 525 / COCH /201 8. SRI.VIJAYAKUMAR P.DAMODARAN. 2 WAS SELECTED FOR LIMITED SCRUTINY FOR VERIFICATION OF CASH DEPOSITS IN SAVINGS BANK ACCOUNT AND VALUE OF SALE CONSIDERATION OF PROPERTY. IT WAS NOTICED IN THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS.20 LAKH IN HIS STATE BANK OF TRAVANCORE ACCOUNT AND FURTHER A SUM OF RS.48 LAKH IN HIS SOUTH INDIAN BANK ACCOUNT. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE O F THESE CASH DEPOSITS . THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T.ACT, WHEREIN THE A.O. HELD THAT THE CASH DEPOSITS AMOUNTING TO RS.26 LAKH WAS NOT GENUINE AND MADE ADDITION AS UNEXPLAINED INVESTMENT / INCOME U/S 69 OF THE I.T.ACT. THE DETAILS OF T HE CASH DEPOSIT ARE AS FOLLOWS: - (I) SRI.K.A.SUKUMARAN RS.7,00,000 (II) SRI.BABU VARTHESE RS.2,00,000 (III) SRI. K.S.SHAJI RS.6,50,000 (IV) SRI. K.A.KURIAKOSE RS.2,00,000 (V) SMT.KESINI RS.3,50,000 (VI) SRI.MADHU DAMODARAN RS.5,00,000 -------------- RS.26,00,000 ============ 4. AGGRIEVED BY THE ADDITION OF RS.26 LAKH MADE BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE ADDITIONS MADE BY THE A.O. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS: - 4.3. THE FACTS OF THE CASE, THE GROUNDS OF APPEAL AND THE ARGUMENTS OF THE APPELLANT HAVE BEEN CONSIDERED. THE ASSESSING OFFICER MADE ADDITION OF RS.26,00,000 AFTER ITA NO. 525 / COCH /201 8. SRI.VIJAYAKUMAR P.DAMODARAN. 3 EXAMINING IN DETAIL THE EXPLANATION OF THE APPELLANT REGARD' THE SOURCES FOR THE CASH DEPOSITS IN THE BANKS. THE LEARNED AR HAS NOT DISPUTED THE FINDINGS OF THE ASSESSING OFFICER. THE GRIEVANCE OF THE LEARNED AR IS THAT THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE TRANSACTION S OTHER THAN CASH DEPOSITS. HOWEVER, THE BURDEN IS ON THE APPELLANT TO PROVE THE SOURCE FOR THE CASH DEPOSITS. THE APPELLANT IS FREE TO PRODUCE ALL THE EVIDENCE WHICH WOULD SUPPORT HIS CASE. HOWEVER, THE APPELLANT CANNOT RAISE A GROUND THAT A PARTICULAR AC TION ON THE PART OF THE ASSESSING OFFICER WOULD HAVE PROVED THE CASE OF THE APPELLANT. HENCE, IT IS HELD THAT THERE IS NO MERIT IN THE CLAIM OF THE APPELLANT THAT THE ASSESSING OFFICER SHOULD HAVE ENQUIRED INTO CHEQUE TRANSACTIONS ALSO. 4.4. FURTHER, THE CLAIM OF THE APPELLANT THAT CERTAIN SUMS WERE BORROWED FROM KNOWN PEOPLE COULD NOT BE PROVED BEFORE THE ASSESSING OFFICER AS THE LENDERS CREDITWORTHINESS WAS NOT PROVED. EVEN IN THE APPEAL PROCEEDINGS ALSO NO FURTHER EVIDENCE WAS PRODUCED TO SUBSTANTIATE THE SOURCES FOR THE CASH DEPOSITS. CONSIDERING THE FACTS, IT IS HELD THAT THE APPELLANT COULD NOT PROVE THE SOURCES FOR THE CASH DEPOSIT OF RS. 26,00,000 AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS UPHELD. CONSEQUENTLY, THE GROUNDS RAISED BY THE APPELLANT ARE DISMISSED. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED A BRIEF WRITTEN SUBMISSION REGARDING EACH OF THE CREDITORS DISBELIEVED BY THE ASSESSING OFFICER. THE SAME READS AS FOLLOWS : - (I) SRI.M.K.SUKUMARAN SRI.SUKUMARAN HAD ADVANCED AN AMOUNT OF RS.7,00,000 ON 09.07.2013 AND THE AMOUNT WAS RETURNED ON 03.02.2014 VIDE CHEQUE NO.811372 OF SOUTH INDIAN BANK ACCOUNT NO.6785. IN THIS CASE, THE ASSESSING AUTHORITY FAILED TO EXPLAIN THE PURPOSE OF REPAYMENT AN AMOUNT OF RS.RS.7,00,000 FROM THIS ASSESSEE. ITA NO. 525 / COCH /201 8. SRI.VIJAYAKUMAR P.DAMODARAN. 4 (II) SRI.BABU VARGHESE SRI.BABU VARGHESE HAD ADVANCED AN AMOUNT OF RS.2,00, 000 ON 28 .01.2014 AND THE SAME AMOUNT WAS RETURNED ON 0 3.02.2014. HERE SAID MR.BABU VARGHESE SUBMITS THAT HE AVAILED LOAN OF RS.2,00,000 FROM HIS FRIEND ONE SRI.BABU P.S. A RETIRED EMPLOYEE OF AGRICULTURAL UNIVERSITY. BUT THE ASSESSING AUTHORITY ILLEGALLY REJECTED SUBMISSION OF SAID SRI.BABU VARGHESE BY LAME C LAIM OF GENUINENESS AND CREDITWORTHINESS OF SAID SHRI BABU VARGHESE. (III) SRI.K.S.SHAJI SRI. K.S.SHAJI SUBMITS BEFORE THIS AUTHORITY THAT HE HAD NOT GIVEN ANY LOAN TO THIS ASSESSEE ON 29.01.2014 OR ANY OTHER DATES. THE FACT THAT SRI.K.S.SHAJI HAD BORRO WED TOTAL AMOUNT OF RS.6,50,000 FROM THIS ASSESSEE WITH CHEQUE NO.51019 DATED 06.01.2014 SOUTH INDIAN BANK RS.3,00,000, CHEQUE NO.81 1353 DATED 08.01.2014 SOUTH INDIAN BANK RS.2,50,000, CHEQUE NO.811364 DATED 25.01.2014 SOUTH INDIAN BANK RS.1,00,000, AND ON 29.01.2014 SRI.K.S.SHAJI HAD RETURNED THE BORROWED LOAN AMOUNT OF RS.6,50,000 TO THIS ASSESSEE . IN THIS MATTER THE ASSESSING AUTHORITY MISTAKENLY MEAN THE LOAN REPAYMENT OF SRI.K.S.SHAJI TREATED AS LOAN ACQUIRED FROM SRI.K.S.SHAJI. IN THIS MATTER, THE ASSESSING AUTHORITY FAILED TO CLARIFY THE ABOVE THREE BANKS TRANSACTIONS BETWEEN SRI.K.S.SHAJI WITH THIS APPELLANT. (IV) SRI. K.A.KURIAKOSE SHRI K.A.KURIAKOSE SUBMITS BEFORE THIS AUTHORITY THAT, HE HAD ADVANCED AN AMOUNT OF RS.2,00,000 ON 29.01.2014 AND SAME AMOUNT WAS RETURNED ON 30.02.2014. HE FURTHER STATED THAT SUM BY AVAILING LOAN OF RS.1,00,000 FROM HIS TWO THREE FRIENDS AND RS.1,00,0 00 AVAILABLE WITH HIM AT THAT TIME. BUT ASSESSING AUTHORITY ILLEGALLY REJECTED THE SUBMISSION OF SAID SRI.K.A.KURIAKOSE AS UNEXPLAINED. ITA NO. 525 / COCH /201 8. SRI.VIJAYAKUMAR P.DAMODARAN. 5 (V) SMT.KESINI & SRI.MADHU DAMODARAN THE ASSESSING AUTHORITY ISSUED SUMMONS TO SMT.KESINI AND SRI.MADHU TO CLARIFY THOSE TRANSACTIONS WITH ASSESSEE. SRI.MADHU RECEIVED THE LETTER AND REPLIED THAT HIS MOTHER SMT.KESINI WAS EXPIRED ON 17.05.2016 AND PRODUCED DEATH CERTIFICATE BEFORE THE ASSESSING AUTHORITY AND HE MAKE ASSURANCE TO ASSESSING AUTHORITY THAT HE SHALL TRY T O COLLECT NECESSARY INFORMATION AND PRODUCE BEFORE 21.11.2016. BUT HE NOT APPEARED BEFORE THE ASSESSING AUTHORITY AS THE ASSURANCE MADE ON 21.11.2016. THE ASSESSING AUTHORITY NOT TAKE ANY FURTHER ACTION AGAINST THIS WITNESS TO PRODUCE THE EVIDENCE. THE LED GER ACCOUNT OF SMT.KESINI AND SRI.MADHU SHOWS THE DETAILED TRANSACTIONS WITH THE ASSESSEE. THE ASSESSING AUTHORITIES ARE NOT CONSIDERING THESE FACTS WHILE COMPLETING THE ASSESSMENT AND FIRST APPEAL. 6. IT WAS FURTHER SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THESE AMOUNTS WERE RECEIVED BY THE RESPECTIVE CREDITORS FOR PURCHASE OF A PROPERTY JOINTLY. IT WAS FURTHER SUBMITTED THAT SINCE THE PROPERTY COULD NOT BE PURCHASED, THE AMOUNTS WERE REFU NDED BY CHEQUES. HENCE IT WAS PRAYED THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER, WHICH WAS CONFIRMED BY THE CIT(A) IS UNCALLED FOR AND THE SAME BE DELETED. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDERS PASSED B Y THE INCOME - TAX AUTHORITIES. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN ADMITTED FACT THAT ALL THE CREDITORS EXCEPT SRI.BABU VARGHESE AND SRI.K.A.KURIAKOSE HAD DENIED ITA NO. 525 / COCH /201 8. SRI.VIJAYAKUMAR P.DAMODARAN. 6 HAVING ADVANCED CASH TO THE ASSE SSEE. SRI M.K.SUKUM ARAN AND SRI.K.S.SHAJI HAD APPEARED BEFORE THE ASSESSING OFFICER . THEY HAVE TOTALLY DENIED HAVING ADVANCED MONEY TO THE ASSESSEE. SRI. MADHU DAMODARAN, THOUGH APPEARED BEFORE THE ASSESSING OFFICER, HAD NOT CONFIRMED THE AMOUNTS BEING ADVANCED TO THE ASSESSEE. THE CONFIRMATION HAS BEEN FILED ONLY IN RESPECT OF SRI.BABU VARGHESE AND SRI.K.A.KURIAKOSE. THE CASE OF THE ASSESSEE IS THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE FROM THE RESPECTIVE CREDITORS FOR PURCHASE OF A PROPERTY JOINTLY. IT WAS FURTH ER SUBMITTED THAT SINCE THE PROPERTY COULD NOT BE PURCHASED, THE AMOUNTS WERE RETURNED THROUGH CHEQUE. HOWEVER, SINCE MOST OF THE CREDITORS HAVE DENIED OR HAVE NOT CONFIRMED ADVANCING MONEY TO THE ASSESSEE, NECESSARILY, THE ADDITION HAS TO BE MADE ONLY IN THE HANDS OF THE ASSESSEE . THE ASSESSEE HAS MADE A FATAL MISTAKE IN ACCEPTING CASH AND DEPOSITING THE SAME IN HIS BANK ACCOUNT S . THE BURDEN OF PROOF IS ON THE TAXPAYER TO EXPLAIN THE NATURE AND THE SOURCE OF ANY CREDIT FOUND IN THE BOOKS. IF IT IS NOT EXPL AINED TO THE SATISFACTION OF THE ASSESSING OFFICER, SUCH CREDIT HAS TO BE TREATED AS INCOME. IN THIS CASE, THE CONFIRMATION HAS ONLY BEEN SUBMITTED BY SRI.BABU VARGHESE AND SRI.K.A.KURIAKOSE. THE CONFIRMATION FILED BY SRI.BABU VARGHESE AND SRI.K.A.KURIAKOS E IS ON RECORD. SRI.BABU VARGHESE HAD APPEARED BEFORE THE ASSESSING OFFICER AND HAS STATED TO HAVE ADVANCED RS.2 LAKH ON 28.01.2014. FURTHER SRI.K.A.KURIAKOSE ALSO HAD ADMITTED THAT HE HAD ADVANCED A SUM OF RS.2 LAKH ON 21.01.2014. O N A PARTICULAR FACTS OF THIS CASE, I AM OF THE VIEW THAT THE ADDITION OF RS.4 LAKH (RS.2 LAKH ITA NO. 525 / COCH /201 8. SRI.VIJAYAKUMAR P.DAMODARAN. 7 FROM SRI.BABU VARGHESE AND RS.2 LAKH FROM SRI.K.A. KURIAKOSE) NEEDS TO BE DELETED. ACCORDINGLY, I DELETE THE ADDITION OF RS.4 LAKH OUT OF THE TOTAL ADDITION OF RS.26 LAKH AND SUSTAIN TH E BALANCE OF RS.22 LAKH. IT IS ORDERED ACCORDINGLY. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED ON THIS 1 3 TH DAY OF JUNE, 2019 . SD/ - ( GEORGE GEORGE K. ) JUDICIA L MEMBER COCHIN ; DATED : 1 3 TH JUNE, 2019 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A) KOTTAYAM . 4. THE PR. CIT KOTTAYAM . 5. DR, ITAT, COCHIN 6 . GUARD FILE.