Sri.Chandrasekharan N, Karunagappally V. The ITO, Alappuzha

ITA 533/COCH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7548 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 13-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2014
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Keywords: Cost of acquisition
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO.533/COCH/2014 ASSESSMENT YEAR : 2010-11 SRI CHANDRASEKHARAN N., DOCUMENT WRITER, ADVOCATES LANE, KARUNAGAPALLY-690 518. [PAN:ABRPN 6871E] VS. THE INCOME TAX OFFICER, WARD-1, ALAPPUZHA. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI ARUN RAJ S, ADVOCATE REVENUE BY SHRI K.P. GOPAKUMAR, SR. DR DATE OF HEARING 13/01/2016 DATE OF PRONOUNCEMENT 22/01/2016 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE OR DER OF THE LD. CIT(A)-V, KOCHI DATED 13/11/2014 FOR THE ASSESSMENT YEAR 2010 -11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER IN I.T.A. NO. 10/ALP/CIT(A)-IV/2013-14 DATED 13-11- 2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPE ALS)-V, KOCHI TO THE EXTEND IT IS AGAINST THE APPELLANT IS HIGHLY IL LEGAL, ARBITRARY AND CONTRARY TO THE FACTS AND LAW INVOLVED IN THIS CASE . 2. THE LEARNED CIT(A) THOROUGHLY ERRED IN HOLDING THAT THE ASSESSING OFFICER WAS RIGHT IN MAKING THE ADDITION OF RS.17,7 1,500/- BEING 50% OF THE CAPITAL GAINS IN THE HANDS OF THE APPELLANT AS SHORT TERM CAPITAL GAINS HOLDING THAT SHRI DHARMADASAN WAS NOT A DIREC T PARTY IN THE I.T.A. NO.533/COCH/2014 2 TRANSACTION AND THAT HIS ROLE IN THE TRANSFER WAS F OR ON BEHALF OF THE APPELLANT AND THE SALE CONSIDERATION WAS CREDITED I N THE APPELLANTS ACCOUNTS. THE LEARNED CIT(A) FAILED TO APPRECIATE T HAT THE PROPERTY TRANSACTION WAS DONE BY APPELLANTS SON SRI SARUN A LONG WITH SRI DHARMADASAN AND THAT THE APPELLANT HAD NO ROLE IN T HE ABOVE TRANSACTION RATHER THAN KEEPING THE DEPOSITS IN THE PERSONAL ACCOUNT OF THE APPELLANT FOR SECURITY REASONS AND HE USED TO D EPOSIT RECEIPTS FROM THE CLIENTS LIKE MATHA AMRUTHANDAMAYI MATH. 3. THE LEARNED CIT(APPEALS) OUGHT TO HAVE ALLOWED THE ENTIRE AMOUNT TO THE TUNE OF RS.19,57,000/- TOWARDS EXPENSES FOR DEVELOPMENT OF THE PROPERTY MET BY THE APPELLANTS SON ALONG WITH SRI DHARMADASAN AS AGAINST ONLY RS.5,00,000/- ALLOWED BY THE ASSESSING OFFICER AS THE PROPERTY TRANSACTION WAS DONE BY THE APPELLANTS SO N SRI SARUN ALONG WITH SRI DHARMADASAN AND THEN OUGHT TO HAVE WORKED OUT THE SHORT TERM CAPITAL GAINS ACCORDINGLY. THE LEARNED CIT(APP EALS) OUGHT TO HAVE NOTED THAT SRI DHARMADASAN HAD SUFFICIENT FUNDS TO INVEST FOR THE DEVELOPMENT OF THE PROPERTY. 4. THE LEARNED CIT(APPEALS) OUGHT TO HAVE HELD TH AT THE ASSESSING OFFICER WENT WRONG IN ASSESSING RS.10,00,000/- U/S. 68 OF THE INCOME TAX ACT OUT OF THE CREDIT OF RS.25,00,000/- ON 14-7 -2009 HOLDING THAT NO SUPPORTING PROOF WAS FILED REGARDING THE RECEIPT OF RS.10,00,000/- FROM MATHA AMRITHANANDAMAYI MATH WITHOUT CONSIDERING THE FACT THAT THE ASSESSING OFFICER HIMSELF HAS STATED IN PARA 2 OF T HE ASSESSMENT ORDER THAT RECEIPTS FROM MATHA AMRITHANANDAMAYI MATH WERE DEPOSITED IN THE APPELLANTS PERSONAL ACCOUNT HAVE BEEN PROVED WITH T HE DOCUMENT REGISTER. 3. THE BRIEF FACTS OF THE CASE AS ARE EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW FOR TH E SAKE OF CONVENIENCE: 2. THE CASH CREDITS IN BANK ACCOUNTS WERE CLAIMED TO BE REGULAR RECEIPTS IN THE COURSE OF HIS PROFESSION IN WHICH O NE OF HIS MAIN CLIENTS, VIZ. MATHA AMRITHANANDAMAYI MATH ENTRUSTS HIM MONEY FOR THE PURCHASE OF PROPERTIES FOR THE MATH WHICH ARE B EING DEPOSITED IN HIS PERSONAL ACCOUNT TILL THE TIME THE PURCHASE OF THE CONCERNED PROPERTY IS REGISTERED. SUCH TRANSACTIONS ON SOME OF THE OCCASIONS WERE EXPLAINED WITH THE DOCUMENT REGISTER MAINTAINE D BY THE ASSESSEE. I.T.A. NO.533/COCH/2014 3 3.1 IN RESPECT OF THE CASH CREDITS OF RS.35,00,000 ON 14-07-2009, THE ASSESSEES EXPLANATION WAS THAT THE SAID AMOUNT IS THE SECOND INSTALMENT RECEIVED BY HIS SON, SRI P.C. SARUN IN A PROPERTY TRANSACTION EFFECTED VIDE DEED DATED 23-07-2009 ACC ORDING TO WHICH THE PROPERTY WAS SOLD BY SRI SARAN ALONGWITH ONE SR I DHARMADASAN FOR A TOTAL CONSIDERATION OF RS.50,00,000. THE ASS ESSEE FURTHER EXPLAINED THAT RS.25,00,000 RECEIVED AS FIRST INSTA LMENT BY CHEQUE IS ALSO DEPOSITED IN THE SAME ACCOUNT ON 18-04-2009. A S THE SAID DHARMADASAN IS REGULARLY ENGAGED IN JOINT TRANSACTI ONS WITH THE ASSESSEE, HIS SHARE IS ALSO CREDITED IN THE BANK AC COUNT OF THE ASSESSEE. THE SECOND INSTALMENT ALONGWITH RS.10,00, 000 RECEIVED OTHERWISE FROM THE MATH IS ACCORDINGLY STATED AS CR EDITED ON 14-07- 2009. 3.2 THE CONTENTION WAS EXAMINED IN DETAIL. BOTH THE PERSONS, SRI SARUN AND SRI DHARMADASAN WERE EXAMINED ON OATH. A CCORDING TO SRI SARUN, HE HAD INCLUDED THE SHARE OF CAPITAL GAI N AROSE FROM THE TRANSACTION IN HIS RETURN FILED FOR THE RELEVANT PE RIOD. AS PER COPY OF RETURNS FILED BY SRI DHARMADASAN, AN ASSESSEE IN KO LLAM, NO INCOME BY WAY OF CAPITAL GAIN WAS SEEN RETURNED FOR THE RE LEVANT PERIOD. MOREOVER, SRI DHARMADASAN COULD NOT SUBSTANTIATE AN Y OF HIS CLAIMS REGARDING THE TREATMENT OF INCOME IN HIS HANDS. HE COULD NOT EVEN REMEMBER THE SALE VALUE RECEIVED IN RESPECT OF THE TRANSFER EFFECTED. FROM THE SAID STATEMENTS, IT DERIVES THAT THE SAID SRI DHARMADASAN WAS NOT A DIRECT PARTY IN THE TRANSACTION AND THAT HIS ROLE IN THE TRANSFER WAS FOR AND ON BEHALF OF THE ASSESS EE, SRI CHANDRASEKHARAN. HENCE IT IS CONCLUDED THAT 50% OF THE CAPITAL GAIN ARISING FROM THE SALE OF PROPERTY IS ASSESSABLE IN THE HANDS OF NONE OTHER THAN THE ASSESSEE IN WHOSE ACCOUNTS, THE SALE CONSIDERATION IS CREDITED. 3.3 AS FOR THE INVESTMENTS IN THE PROPERTY, THE VA LUE AS PER DEED WAS OBSERVED TO BE RS.9,57,000. THOUGH IT WAS CLAIM ED THAT THE ASSESSEES SON ALONGWITH THE OTHER PERSON HAD INVES TED RS.19,57,000 IN THE LAND, NO EVIDENCE AS TO THE NATURE OF IMPROV EMENT OR TO THE SOURCE THEREOF WAS FURNISHED DURING THE COURSE OF A SSESSMENT. ON COMPARISON OF THE NARRATION IN THE DEEDS ALSO THERE FOUND NO MENTION ABOUT ANY SPECIFIC IMPROVEMENT DONE THEREIN PRIOR TO ITS SALE. HOWEVER, I FIND IT REASONABLE TO ALLOW A SUM OF RS.5,00,000 FOR THE OVERALL DEVELOPMENT LIKE CONSTRUCTING FENCING O R COMPOUND WALLS AS CLAIMED BY THE ASSESSEE AND TOWARDS SELLING EXPE NSES. ACCORDINGLY, A SUM OF RS.35,43,000 IS FOUND TO BE A SSESSABLE AS SHORT TERM CAPITAL GAIN ON ACCOUNT OF THE SALE EFFE CTED AND 50% I.T.A. NO.533/COCH/2014 4 THEREOF AMOUNTING TO RS.17,71,500 IS ASSESSED IN TH E HANDS OF THE ASSESSEE. 5. AS FOR RS.10,00,000 CREDITED IN THE ACCOUNT ON 14.07.2009, THE ASSESSEE COULD NOT ADDUCE ANY SUPPORTING DOCUMENTS THAT THE SAID SUM WAS RECEIVED FROM THE MATH AS CLAIMED. ON THE C ONTRARY, THE STATEMENTS PREPARED IN RESPECT OF THE TRANSACTIONS WITH THE MATH, NO RELATED PURCHASE WAS SEEN MADE IN THE YEAR. IN ADDI TION, IT WAS OBSERVED THAT THE CASH BALANCE AVAILABLE AT THE END OF THE YEAR AFTER COMPLETING ALL PROPERTY TRANSACTIONS FOR THE MATH D URING THE YEAR WAS FOUND TO BE RS.10,32,612. THE ONLY CONCLUSION THAT CAN BE DERIVED FROM THE ABOVE FACT IS THAT THE SAID CREDIT OF RS.1 0,00,000/- AS ON 14-07-2009 IS NOTHING OTHER THAN ASSESSEES OWN MON EY DEPOSITED IN THE ACCOUNT. IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY, AND AS THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE N ATURE AND SOURCE OF SUCH CREDIT IS NOT FOUND SATISFACTORY, THE SUM S O CREDITED IS CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR U/S. 68 OF THE ACT. 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AS SESSING OFFICER AND IT IS RELEVANT TO REPRODUCE THE FINDINGS OF THE LD. CIT(A ) HEREINBELOW: 5. HAVING GONE THROUGH THE GROUNDS OF APPEAL OF T HE APPELLANT AND THE ARGUMENT NOTE DATED 30.5.2014 AND THE PAPER BOO K SUBMITTED ON 13.11.2014 AS WELL AS THE ORDER OF THE ASSESSING OFFICER; THE BRIEF FACT OF THE CASE IS THAT THERE HAS BEEN A SALE OF P ROPERTY, VIDE SALE DEED DATED 23.7.2009, WHERE THE PROPERTY HAS BEEN H ELD IN THE NAME OF SHRI P.C. SARUN, THE SON OF THE APPELLANT A ND SHRI DHARMADASAN. THE SALE CONSIDERATION IS RS.50,00,000 /-. HOWEVER, THE AMOUNT OF A SALE CONSIDERATION HAS BEEN CREDITE D FOR RS.25,00,000/- AS 1 ST INSTALMENT ON 18.4.2009 AND RS.35,00,000/- AS 2 ND INSTALMENT IN THE APPELLANTS ACCOUNT ON 14.7.2009 THE 1 ST INSTALMENT IS CREDITED FOR RS.25,00,000/- BY SINGLE CHEQUE ON 18.4.2009 AND 2 ND INSTALMENT OF RS.35,00,000/- IS A CASH DEPOSITS ON 14.7.2009. SHRI SARUN HAS SHOWN SHORT TERM CAPITAL GAINS ON HIS 50% SHARES BUT SHRI DHARMADASAN HAS NOT SHOWN THE SHORT TERM CAPITAL GAIN IN HIS RETURN OF INCOME. I.T.A. NO.533/COCH/2014 5 6. THEN THE QUESTION ARISES AS TO WHAT HAS HAPPENE D TO THE SHORT TERM CAPITAL GAIN OF 50% OF CONSIDERATION ON WHICH NEITHER SHRI DHARMADASAN NOR THE APPELLANT HAS SHOWN THE SHORT T ERM CAPITAL GAIN. ALTHOUGH, THE PROPERTY IS JOINTLY IN THE NAM E OF THE APPELLANTS SON AND SHRI DHARMADASAN, THE ENTIRE SALE CONSIDERA TION IS STATED TO BE CREDITED INTO THE ACCOUNT OF THE APPELLANT. IT I S BASED ON THIS FACT; THE APPELLANT HAS A DIRECT LINKAGE WITH THIS SALE T RANSACTION AND, IN ALL POSSIBILITIES, SHRI DHARMADASAN APPEARS TO BE A BEN AMIDAR OF THE PROPERTY. IN VIEW OF THIS, IT IS HELD THAT, THE ASS ESSING OFFICER HAS CORRECTLY CONSIDERED THAT THE INCIDENCE OF TAX ON A CCOUNT OF SHORT TERM CAPITAL GAIN IN RESPECT OF 50% OF THE REMAININ G SALE CONSIDERATION ARISES IN THE HANDS OF THE APPELLANT. 7. AS REGARDS THE COMPUTATION OF SHORT TERM CAPITA L GAIN, THE FOLLOWING EXPENDITURE HAS BEEN ALLOWED TO BE DEDUCT ED FROM THE TOTAL SALE CONSIDERATION:- SALE CONSIDERATION RECEIVED : RS.25,00,000/- COST OF ACQUISITION : RS. 4,78,500/- COST OF IMPROVEMENT : RS. 2,50,000/- TOTAL : RS. 7,28,500/- BALANCE AMOUNT : RS.17,71,500/- THE APPELLANT IS LIABLE TO PAY TAX ON THE SHORT TER M CAPITAL GAIN OF RS.17,71,500/- AS HAS BEEN WORKED OUT BY THE ASSESS ING OFFICER. THE APPELLANT HAS EXPLAINED THAT SINCE IT WAS APPELLANT S FIRST BUSINESS, THEY COULD NOT MAINTAIN THE ACCOUNT PROPERLY IN RES PECT OF EXPENSES INCURRED TOWARDS THE IMPROVEMENT OF THE PROPERTY BU T, IN ANY CASE THE ASSESSING OFFICER SHOULD NOT HAVE RESTRICTED TH E COST OF IMPROVEMENT TO RS.5,00,000/- RATHER, HE SHOULD HAVE ALLOWED THE CLAIM OF EXPENDITURE TO AT LEAST RS.10 TO 12 LAKHS. SINCE NO BOOKS OF ACCOUNT HAS BEEN MAINTAINED, AND NO OTHER HARD FACTS HAVE BEEN PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS, IT IS DIFFICULT TO TAKE A SUBJECTIVE CRITERIA, AS PLEA DED BY THE APPELLANT, TO DEVIATE FROM THE CONSIDERED DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN VIEW OF THIS, IT IS HELD THAT THE ADDIT ION MADE BY THE ASSESSING OFFICER HAS CORRECTLY BEEN MADE. THUS, TH E APPEAL ON THIS GROUND IS DISMISSED. 9. AS REGARDS, ADDITION OF RS.10,00,000/- ON ACCOU NT OF STATED CASH RECEIVED FROM MATHA AMRUTHANDAMAYI MATH, NO VERIFIC ATION HAS BEEN PRODUCED AND, IT HAS BEEN EXPLAINED BY THE APPELLAN T THAT THE MATH I.T.A. NO.533/COCH/2014 6 HAS NOT GIVEN ACCEPTANCE FOR SUCH CASH DEPOSITS IN VIEW OF THIS, THE ADDITION MADE BY THE ASSESSING OFFICER U/S. 68, THE SUM OF RS.10,00,000/- IS UPHELD AND, THE APPEAL ON THIS GR OUND IS DISMISSED. 5. THE LD. COUNSEL FOR THE ASSESSEE, SHRI ARUN RA J S, ADVOCATE ARGUED THAT SHRI DHARMADASAN IS REGULARLY ENGAGED IN JOINT TRANSACTIONS WITH THE ASSESSEE AND THE PROPERTY WAS JOINTLY OWNED BY SHR I P.C. SARUN, THE SON OF THE ASSESSEE AND SHRI DHARMADASAN WHO SOLD THE PROP ERTY BY USING THE BANK ACCOUNT OF THE ASSESSEE. ACCORDINGLY, THE SHAR E OF SHRI P.C. SARUN AND THAT OF SHRI DHARMADASAN WAS CREDITED IN THE BANK A CCOUNT OF THE ASSESSEE. THE SALE DEED IS ALSO REGISTERED IN THE NAME OF SHR I P.C. SARUN AND SHRI DHARMADASAN IS A MATTER OF FACT ON RECORD. THEREFOR E, THE REGISTERED DOCUMENT CANNOT BE IGNORED AND THE SHARE IN THE PR OPERTY BELONGS TO SHRI DHARMADASAN AND THEREFORE, HIS INCOME CANNOT BE ASS ESSED IN THE HANDS OF THE ASSESSEE. HE FURTHER ARGUED THAT THE ENTIRE AMO UNT TO THE TUNE OF RS.19,57,000/- TOWARDS EXPENSES FOR DEVELOPMENT OF THE PROPERTY MET BY THE ASSESSEES SON ALONGWITH SHRI DHARMADASAN SHOUL D BE ALLOWED. AS REGARDS RECEIPT OF RS.10 LAKHS, THE ASSESSING OFFIC ER HAS HIMSELF MENTIONED THAT THE RECEIPT FROM MATHA AMRITHANANDAMAYI MATH W AS DEPOSITED IN THE ASSESSEES PERSONAL ACCOUNT AND THEREFORE, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSESSEE. I.T.A. NO.533/COCH/2014 7 6. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW AND ARGUED THAT BOTH THE PERSONS SHRI P.C. SARUN AND SHRI DHARMADASAN WERE EXAMINED ON OATH BY THE ASSESSING OFFICER. BOTH THE PERSONS HAVE PRODUCED COPY OF THE RETURNS FILED FOR THE IMPUGNED YEAR. SHRI P.C. SARUN, THE SON OF THE ASSESSEE HAS DECLAR ED THE CAPITAL GAIN ARISING FROM THE SALE OF THE SHARE OF THE PROPERTY IN HIS RETURN OF INCOME WHEREAS MR. DHARMADASAN HAS NOT AT ALL DECLARED ANY CAPITAL GAIN ON THE SALE OF SUCH PROPERTY. DURING THE COURSE OF STATEM ENT SO RECORDED, SHRI DHARMADASAN COULD NOT SUBSTANTIATE HIS CLAIMS REGAR DING THE OWNERSHIP OF SUCH PROPERTY AND TREATMENT OF INCOME FROM SUCH PRO PERTY. WHEN ASKED SPECIFICALLY ABOUT THE SALE VALUE RECEIVED IN RESPE CT OF THE TRANSFER/SALE OF SUCH PROPERTY, SHRI DHARMADASAN DID NOT EVEN REMEMB ER THE SALE VALUE. ACCORDINGLY, THE LD. DR ARGUED THAT ANY PRUDENT PER SON WILL COME TO THE CONCLUSION THAT SHRI DHARMADASAN IS NOT A DIRECT PA RTY TO THE TRANSACTION AND HIS ROLE IN THE TRANSFER/SALE WAS ON BEHALF OF THE ASSESSEE SHRI CHANDRASEKHARAN N. ONLY. THEREFORE, THE ASSESSING O FFICER AND THE LD. CIT(A) HAVE RIGHTLY CONCLUDED THAT THE INCOME FROM THE SALE OF 50% OF THE PROPERTY IS ASSESSABLE IN THE HANDS OF NONE OTHER T HAN THE ASSESSEE IN WHOSE ACCOUNTS THE SALE CONSIDERATION IS CREDITED. 7. HE FURTHER ARGUED WITH REGARD TO THE INVESTMEN T OF RS.19,57,000/-, NO EVIDENCE AS TO THE NATURE OF IMPROVEMENT OR TO THE SOURCE THEREOF WAS I.T.A. NO.533/COCH/2014 8 FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS OR IN THE FIRST APPELLATE PROCEEDINGS OR EVEN BEFORE THIS BENCH. HO WEVER, THE ASSESSING OFFICER HAS ALLOWED RS.5 LAKHS FOR THE OVERALL IMPR OVEMENT LIKE CONSTRUCTION OF FENCING OR COMPOUND WALLS AND TOWARDS SELLING EX PENSES, THOUGH THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO THAT EFFE CT ALSO. THOUGH THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ALLOWA NCE OF RS.5 LAKHS, THEREFORE, THE ALLOWANCE OF RS.5 LAKHS AS EXPENSES TOWARDS IMPROVEMENT MAY BE CONSIDERED AS REASONABLE AS HELD BY THE ASSE SSING OFFICER AND THE LD. CIT(A). 8. AS REGARDS THE CREDIT OF RS.10 LAKHS, THE ASS ESSEE HAS NOT BEEN ABLE TO ADDUCE ANY SUPPORTING DOCUMENTS TO CLAIM THAT THE S AID SUM HAS BEEN RECEIVED FROM THE MATH. NO RELATED PURCHASE HAD BE EN FOUND MADE REGARDING THE SAID CREDIT OF RS.10 LAKHS IS ALSO A FACT ON RECORD. THE CASH IN HAND AFTER COMPLETING ALL THE PROPERTY TRANSACTIONS FOR THE MATH WAS FOUND TO BE RS.10,32,612/- FROM WHICH IT CAN BE VERY SAFE LY DERIVED THAT THE SAID CREDIT OF RS.10,00,000/- AS ON 14-07-2009 IS NOTHIN G OTHER THAN ASSESSEES OWN MONEY DEPOSITED IN THE ACCOUNT. IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY AND THE EXPLANATION OFFERED BY THE ASSESSE E ABOUT THE SOURCE OF SUCH CREDIT, THE SAID SUM SO CREDITED HAS BEEN RIGH TLY CHARGED TO THE INCOME-TAX AS THE INCOME OF THE ASSESSEE BY THE ASS ESSING OFFICER AND CONFIRMED BY THE LD. CIT(A). I.T.A. NO.533/COCH/2014 9 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. AS REGARDS THE SALE OF THE PROPERTY FOR A SALE CONS IDERATION OF RS. 50 LAKHS WHERE THE FIRST INSTALMENT OF RS. 25 LAKHS WAS DEPO SITED BY CHEQUE AND BALANCE BY CASH, ALONG WITH RS.10 LAKHS STATED TO H AVE BEEN RECEIVED FROM THE MATH, THE ASSESSEES BANK ACCOUNT HAS BEEN USED FOR SUCH SALE TRANSACTIONS. THE AMOUNT OF RS.50 LAKHS ALONG WITH THE SAID RS.10 LAKHS HAS BEEN FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE IS NOT UNDER DISPUTE. IT IS FOR THE ASSESSEE TO OFFER EXPLANATIO N ABOUT THE NATURE AND SOURCE THEREOF WHICH IN THE OPINION OF THE ASSESSIN G OFFICER SHOULD BE FOUND SATISFACTORY. IF IT IS NOT FOUND SATISFACTORY BY TH E ASSESSING OFFICER, THEN THE AMOUNT SO CREDITED HAS TO BE CHARGED TO INCOME TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN THE PRESENT CASE , THE EXPLANATION OFFERED BY THE ASSESSEE AND AS ARGUED BY THE LD. COUNSEL FO R THE ASSESSEE, THE SALE CONSIDERATION BELONGS TO SHRI P.C. SARUN, THE SON O F THE ASSESSEE AND SHRI DHARMADASAN AS PER SALE DEED ON RECORD. ACCORDINGLY , THE ASSESSING OFFICER HAS TO EXAMINE THE CONTENTIONS PUT FORTH BEFORE HIM BY BOTH THE PERSONS, SHRI P.C. SARUN AND SHRI DHARMADASAN WHETHER THE CO NTENTIONS SO MADE WERE CORRECT OR NOT. ACCORDINGLY, BOTH SHRI P.C. SA RUN AND SHRI DHARMADASAN WERE EXAMINED ON OATH BY THE ASSESSING OFFICER , WHERE THEY HAD PRODUCED THEIR RETURNS OF INCOME FOR THE IMPUGN ED YEAR IS ALSO NOT UNDER DISPUTE. AS REGARDS SHRI P.C. SARUN, SON OF T HE ASSESSEE, HE HAS DECLARED THE SALE OF THE SAID PROPERTY IN THE FORM OF CAPITAL GAIN IN HIS I.T.A. NO.533/COCH/2014 10 RETURN OF INCOME FOR THE IMPUGNED YEAR. AS REGARDS SHRI DHARMADASAN, HE HAS NEITHER DECLARED THE SAID PROPERTY IN HIS RETUR N OF INCOME NOR THE CAPITAL GAIN ARISING FROM THE SALE OF SUCH PROPERTY IN THE IMPUGNED YEAR. HE COULD NOT SUBSTANTIATE ANY OF HIS CLAIMS REGARDING THE TREATMENT OF HIS INCOME IN HIS HANDS. HE EVEN DID NOT REMEMBER THE S ALE VALUE RECEIVED IN RESPECT OF THE SALE/TRANSFER EFFECTED. ACCORDINGLY , A REASONABLE PRESUMPTION HAS TO BE DERIVED THAT THE ASSESSEE HAS USED SHRI DHARMADASAN AS A BENAMI IN WHOSE NAME THE PROPERTY IS REGISTERED. THEREFORE, REGISTRATION OF PROPERTY CANNOT BE HELD TO BE A CONCLUSIVE PROOF THAT SHRI DHARMADASAN WAS THE OWNER OF THE PROPERTY AND HE HAS EFFECTED THE SALE OF SUCH PROPERTY IN VIEW OF OUR FINDINGS H EREIN ABOVE. IN THE CIRCUMSTANCES AND FACT OF THE CASE, WE HOLD THAT SH RI DHARMADASAN IS A BENAMI SHARE HOLDER OF THE PROPERTY WHICH WAS IN FA CT OWNED BY THE ASSESSEE HIMSELF AND SOLD BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT SUBSTANTIATE OR COULD NOT BRING ON RECORD WHETHER THE SALE CONSIDERATION SO RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE HAS BEEN TRANSFERRED TO SHRI DHARMADASAN INSPITE OF THE QUER Y FROM THE BENCH AGAIN AND AGAIN. ACCORDINGLY, WE FIND NO INFIRMITY IN TH E ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSIN G OFFICER IN THIS REGARD. 10. AS REGARDS THE INVESTMENT OF RS.19,57,000/-, NO EVIDENCE AS TO THE NATURE OF IMPROVEMENT OR TO THE SOURCE THEREOF WAS FURNISHED DURING THE I.T.A. NO.533/COCH/2014 11 ASSESSMENT PROCEEDINGS OR IN THE FIRST APPELLATE PR OCEEDINGS OR EVEN BEFORE US. HOWEVER, THE ASSESSING OFFICER HAS MADE A REASO NABLE ALLOWANCE OF RS. 5 LAKHS ON ACCOUNT OF OVERALL IMPROVEMENT LIKE CONS TRUCTION OF FENCING OR BOUNDARY WALLS AND TOWARDS SELLING EXPENSES AND ACC ORDINGLY, THE SUM OF RS. 35,43,000/- IS FOUND TO BE ASSESSABLE AS SHORT TERM CAPITAL GAIN ON ACCOUNT OF THE SALE EFFECTED AND 50% OF RS.17,71,50 0/- WAS RIGHTLY ASSESSABLE IN THE HANDS OF THE ASSESSEE AND ACCORDI NGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RI GHTLY CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 11. AS REGARDS CREDIT OF RS.10 LAKHS ON 14-07-2009 , THE ASSESSEE COULD NOT ADDUCE ANY SUPPORTING DOCUMENTS THAT THE SAID S UM WAS RECEIVED FROM THE MATH AS CLAIMED. AS MENTIONED BY THE ASSESSING OFFICER, THE ASSESSEE HAS BEEN RECEIVING MONEY FROM THE MATH REGULARLY. I T HAS BEEN OBSERVED BY THE ASSESSING OFFICER THAT IN THE STATEMENTS PREPAR ED IN RESPECT OF THE TRANSACTIONS WITH THE MATH, NO RELATED PURCHASE HAS BEEN FOUND MADE DURING THE YEAR. AT THE END OF THE YEAR, THE CASH IN HAND WITH THE ASSESSEE WAS FOUND TO BE RS. 10,32,612/- AND NO EVIDENCE OF ANY KIND HAD BEEN PRODUCED TO PROVE THAT THE SAME HAS BEEN RECEIVED F ROM THE MATH DURING THE ASSESSMENT PROCEEDINGS OR IN THE FIRST APPELLAT E PROCEEDINGS OR EVEN BEFORE US. IN THE CIRCUMSTANCES AND FACTS OF THE CA SE, A REASONABLE PRESUMPTION HAS RIGHTLY BEEN TAKEN BY THE ASSESSING OFFICER THAT THE SAID I.T.A. NO.533/COCH/2014 12 MONEY BELONGS TO THE ASSESSEE ONLY AND IT WAS THE A SSESSEES OWN MONEY WHICH WAS DEPOSITED IN THE ACCOUNT OF THE ASSESSEE. IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY AND IN THE ABSENCE OF ANY EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF SUCH CR EDIT WHICH HAS NOT BEEN FOUND SATISFACTORY, THE SUM SO CREDITED HAS RIGHTLY BEEN CHARGED TO THE INCOME TAX AS INCOME OF THE ASSESSEE OF THAT PREVIO US YEAR U/S. 68 OF THE ACT WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) AND WE DO NOT FIND ANY INFIRMITY IN HIS ORDER. THUS ALL THE GROUNDS OF TH E ASSESSEE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T.A. NO.533/COCH/2014 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22 -01-2016. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 22 ND JANUARY, 2016 GJ COPY TO: 1. SRI CHANDRASEKHARAN N., DOCUMENT WRITER, ADVOCAT ES LANE, KARUNAGAPALLY-690 518. 2. THE INCOME TAX OFFICER, WARD-1, ALAPPUZHA. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-V, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN I.T.A. NO.533/COCH/2014 13