Smt.Alice George, Trichur V. The ITO, Trichur

ITA 534/COCH/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7316 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 15-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 22-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: FILING CONTRARY
• Assessee Lawyers: MOHAN PULICKKAL
• Keywords: Unexplained investment; Peak credit; Cost of acquisition; Fair market value; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO. 534 /COCH/201 4 ASSESSMENT YEAR : 2005 - 06 SMT. ALICE GEORGE, THEKKEKKARA HOUSE, GANDHI NAGAR, PUTHENVETTUVAZHI, THRISSUR-5 [PAN: AEVPA 3858D] VS. THE INCOME - TAX OFFICER, WARD - 2(1), TRICHUR. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSES SEE BY SHRI MOHAN PULICK K AL, ADV. REVENUE BY SHRI A.DHANARAJ , SR. DR DATE OF HEARING 04 / 0 1 / 201 7 DATE OF PRONOUNCEMENT 06 / 0 1 /201 7 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, I S DIRECTED AGAINST THE ORDER OF THE CIT(A)-V, KOCHI DATED 30/01/2014. THE RELEVANT ASSESSMENT YEAR IS 2005-06. 2. THOUGH SEVERAL GROUNDS ARE RAISED, THE LD. COUN SEL FOR THE ASSESSEE, SHRI MOHAN PULICKKAL, ADV. CONFINED HIS ARGUMENTS TO GRO UND NOS. 2,3 AND 5 RAISED IN THE APPEAL MEMO. GROUND NOS. 2,3 & 5 RAISED IN T HE APPEAL MEMO READS AS FOLLOWS:- I.T.A. NO.534/COCH/2014 2 2. THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.8,44,274/- AS UNEXPLAINED INVESTMENT U/S. 69 OF THE INCOME TAX ACT, 1961, BEING THE PEAK CREDIT APPEARING IN T HE APPELLANTS SAVINGS BANK ACCOUNT AS AT 29.01.2005. THE CIT(APPEALS) OUG HT TO HAVE SEEN THAT THE APPELLANT HAD EXPLAINED ALL THE MAJOR CREDIT EN TRIES IN THE SB ACCOUNTS QUESTIONED BY THE ASSESSING OFFICER AND HENCE THE A DDITION BASED ON THE PEAK CREDIT WAS GROSSLY UNWARRANTED AND UNCALLED FO R. THE CIT(APPEALS) OMITTED TO NOTICE THAT IT WAS WITHOUT PROPERLY CONS IDERING THE APPELLANTS EXPLANATIONS WITH REGARD TO THE CREDIT ENTRIES POIN TED OUT BY THE ASSESSING OFFICER THAT THE ASSESSING OFFICER HAD TREATED THE PEAK CREDIT ON 29/01/2005 AS UNEXPLAINED INVESTMENT AND MADE AN AD DITION TO THAT EXTENT. 3. THE ASSESSING OFFICER AND THE CIT(APPEALS) WENT WRONG IN DISCARDING THE DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE TO REASONABLY EXPLAIN THE SOURCE OF THE CREDIT ENTRIES IN HER SB ACCOUNT. THE ASSUMPTIONS AND SURMISES EXPRESSED BY THE CIT(APPEA LS) IN BRUSHING ASIDE THE EVIDENCE ON RECORD ARE PLAINLY UNREASONAB LE AND ILLOGICAL. THE ORDER OF THE CIT(A) CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS COUNT IS VITIATED BY NON-CONSIDERATION OF M ATERIAL FACTS AS ALSO GROSS MISREADING OF THE EVIDENCE ON RECORD. 5. THE COMMISSIONER WENT WRONG IN RESTRICTING THE COST OF ACQUISITION AT RS.5000/- AS AGAINST THE REASONABLE RATE OF RS.10,0 00/- CLAIMED BY THE APPELLANT AS ON 01/04/1981. THE LONG TERM CAPITAL GAINS TO BE COMPUTED BASED ON SUCH ERRONEOUSLY ESTIMATED COST OF ACQUISI TION CAUSING UNJUST PREJUDICE TO THE APPELLANT IS WHOLLY UNSUSTAINABLE. 3. GROUND NOS. 2 & 3 RELATE TO THE ISSUE OF BRINGI NG TO TAX AS INCOME FROM OTHER SOURCES BEING THE PEAK CREDIT IN THE ASSESSEES SB ACCOUNT WITH SOUTH INDIAN BANK, TRICHUR. 4. THE BRIEF FACTS IN RELATION TO THE ABOVE ISSU E ARE AS FOLLOWS:- I.T.A. NO.534/COCH/2014 3 THE ASSESSEE IS A RETIRED SCHOOL TEACHER AND WAS NOT FILING ANY RETURN OF INCOME. AS PER AIR INFORMATION, THE ASSESSEE HAS M ADE CERTAIN CASH DEPOSIT IN THE SB ACCOUNT WITH SOUTH INDIAN BANK LTD., TRICHUR . THE ASSESSING OFFICER ISSUED NOTICE U/S. 148. IN COMPLIANCE TO NOTICE ISS UED U/S. 148 OF THE ACT, THE RETURN OF INCOME WAS FILED ON 28/10/2009 DISCLOSING PENSION INCOME OF RS.54,960/-. THE RE-ASSESSMENT WAS COMPLETED VIDE O RDER DATED 29/12/2009 BY BRINGING TO TAX PEAK CREDIT IN THE ASSESSEES BANK AMOUNTING TO RS.8,44,274/- AS UNEXPLAINED INVESTMENT. THE ASSESSING OFFICER REJEC TED THE ASSESSEES EXPLANATION AS REGARDS THE SOURCE OF DEPOSIT MADE I N THE SB ACCOUNT, SINCE ACCORDING TO THE ASSESSING OFFICER, THERE WAS NO SP ECIFIC SOURCE AND THERE WAS CONSIDERABLE TIME GAP WITH REGARD TO THE WITHDRAWAL FROM THE OTHER BANK ACCOUNT AND DEPOSITS MADE IN THE SB ACCOUNT OF THE SOUTH INDIAN BANK, TRICHUR. 5. AGGRIEVED BY THE ASSESSMENT COMPLETED U/S.143( 3) R.W.S. 147 OF THE ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE CIT(A) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS FILE D A DETAILED PAPER BOOK, ENCLOSING VARIOUS BANK STATEMENTS OF THE ASSESSEE A ND AN AFFIDAVIT OF THE ASSESSEES DAUGHTER AND HER SON-IN-LAW CONFIRMING T HE LOANS ADVANCED. THE ASSESSEE HAS ALSO FILED A WRITTEN SUBMISSION DETAIL ING THE SOURCE OF EACH CASH I.T.A. NO.534/COCH/2014 4 DEPOSIT WITH THE SOUTH INDIA BANK LTD. THE LD. DR RELIED ON THE ORDERS OF THE INCOME TAX AUTHORITIES. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. I HAVE GONE THROUGH THE BANK STATEMENTS OF THE ASSESS EE WITH SOUTH INDIAN BANK LTD. AND HAVE PERUSED THE DEPOSITS MADE IN THE SAID BANK ACCOUNT. THE ASSESSEE HAS EXPLAINED THE SOURCE OF EACH OF THE DEPOSITS. THE EXPLANATION OF THE ASSESSEE WITH REGARD TO EACH OF THE DEPOSITS ARE RE PRODUCED BELOW: A) 26-8-04 BY TRANSFER RS.23,949/-. THIS AMOUNT IS A TRANSFER OF BALANCE FROM SOUTH INDIAN BANK, KUNNAMKULAM BRANCH COPY OF BAN K ACCOUNT OF SIB KUNNUMKULAM BRANCH IS PRODUCED AS ANNEXURE A. B) 02-09-04 BY TRANSFER RS.5,396/-. BANK TRANSFER OF DEPOSIT IN THE APPELLANTS NAME COPY OF BANK ACCOUNT IS PRODUCED AS ANNEXURE B . C) 15-09-04 BY CASH RS.90,000/- PART DISBURSEMENT OF HOUSING LOAN FROM SBI VILANGAN IS PRODUCED AS ANNEXURE C . D) 13-10-04- BY CASH RS.75,000/-. FROM APPELLANTS DAUGHTER MRS. SUNU GEORGE AND SON-IN-LAW MR. PEARL K. DAVIS. AFFIDAVIT OF PEARL K . DAVIS IS PRODUCED AS ANNEXURE D . E) 19-10-04 BY CASH RS.30,000/-. SAVINGS FROM PEN SION OF THE APPELLANT DRAWN FROM TREASURY ACCOUNT. F) 29-10-04 BY CASH RS.1,25,000/-. PART DISBURSE MENT OF HOUSING LOAN RS.1,97,000/- WITHDRAWN FROM SBI, VILANGAN VIDE A NNEXURE C . G) 19-11-04 BY OCC RS.4,429/-. THIS IS A BANK TRANSFER AND HENCE NOT INCLUDIBLE FOR PURPOSES OF PEAK CREDIT. H) 24-11-04 IBR RS.10,000/-. THIS IS ALSO A BANK TRANSFER AND HENCE NOT INCLUDIBLE FOR PURPOSES OF PEAK CREDIT. I) 27-11-04 BY CASH RS.2,00,000/-. RENT DEPOSIT R ETURNED. AFFIDAVIT FROM THE LAND LORD PRODUCED AS ANNEXURE E . I.T.A. NO.534/COCH/2014 5 J) 13-12-04 BY CASH RS.1,00,000/-. SALE PROCEEDS OF MOTOR CAR. CONFIRMATION LETTER FROM THE PURCHASER PRODUCED AS ANNEXURE F FOR RECEIPT OF RS.75000/-. BALANCE R.25000/- RECEIVED TOWARDS EXTRA FITTINGS ETC. K) 5-10-05 IBR RS.10,000/-. THIS IS A BANK TRANSF ER AND HENCE NOT INCLUDIBLE FOR THE PURPOSES OF PEAK CREDIT. L) 28-1-2005 - RS.4,50,000/- BY CLEARING 2 CHEQUES DRAWN ON C.S. BANK RS ROAD ACCOUNT. THIS CONSISTS OF THE CONTENTS OF SALE PRO CEEDS OF AGRICULTURAL LAND OF THE APPELLANTS HUSBAND RECEIVED BY CHEQUES DRAWN ON TH E CANARA BANK CREDITED TO THE C.S. BANK, RS ROAD ACCOUNT. COPY OF THE SALE DEED IS PRODUCED AS ANNEXURE G . M) 29-1-05 BY CASH RS.1,78,500/-. FROM APPELLANT S DAUGHTER MRS. SUNU GEORGE AND SON-IN-LAW MR. PEARL K. DAVIS (AFFIDAVIT OF P EARL K. DAVIS - ANNEXURE D . N) 04-03-05 BY INTEREST RS.2,604/-. THIS IS NOT I NCLUDIBLE IN PEAK CREDIT WORKING. O)23-3-05 - BY CASH RS.4,50,000/-. EARLIER CASH WI THDRAWAL FROM THE SAME ACCOUNT ON 18-3-05 ANNEXURE B. 8. THE ABOVE EXPLANATION FOR SOURCE OF DEPOSITS, I NOTICE IS CORRECT AND THERE IS NOT MUCH OF TIME LAG BETWEEN THE WITHDRAWALS MAD E AND RE-DEPOSITS. HENCE THE STATEMENT OF THE ASSESSING OFFICER AND TH E CIT(A) THAT THERE IS NO CO-RELATION BETWEEN THE WITHDRAWALS AND THE DEPOSIT S IS FACTUALLY INCORRECT. MOREOVER, THE CASH DEPOSITS ON ACCOUNT OF RECEIPTS FROM THE ASSESSEES SON-IN- LAW AND DAUGHTER HAVE BEEN CONFIRMED BY FILING THE NECESSARY CONFIRMATION LETTERS WHICH HAS NOT BEEN DISPELLED BY THE REVENUE BY FILING CONTRARY EVIDENCE. HENCE, I HAVE NO REASON TO DISBELIEVE TH E SOURCE OF CASH DEPOSITS MADE IN THE ASSESSEES BANK ACCOUNT WITH SOUTH INDI AN BANK , TRICHUR. ACCORDINGLY, I AM OF THE VIEW THAT THE PEAK CREDIT BROUGHT TO TAX AS UNEXPLAINED INVESTMENT IS NOT WARRANTED AND I DELET E THE SAME. IT IS ORDERED ACCORDINGLY. THUS GROUND NOS. 2 & 3 MENTIONED ABOV E ARE ALLOWED. I.T.A. NO.534/COCH/2014 6 9. GROUND NO. 5 RELATES TO THE ISSUE WHETHER THE CIT(A) IS JUSTIFIED IN RESTRICTING THE COST OF ACQUISITION AS ON 01/04/198 1 AT RS. 5000/- AS AGAINST RS.10,000/- CLAIMED BY THE ASSESSEE. 10. THE BRIEF FACTS IN RELATION TO THE ABOVE GR OUND ARE AS FOLLOWS: THE ASSESSEE ALONGWITH HER HUSBAND HAD SO LD A PROPERTY JOINTLY DURING THE PREVIOUS YEAR RELEVANT TO THE CONCERNED ASSESSM ENT YEAR. WHILE COMPUTING THE LONG TERM CAPITAL GAIN, THE ASSESSEE HAS ADOPTE D THE COST OF ACQUISITION AS ON 01/04/1981 AT RS.10,000/- PER CENT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE COST OF ACQUISITION CLAIMED BY THE ASSESSEE AS ON 01/04/1981 WAS HIGH AND HENCE, ESTIMATED THE VALUE OF THE PROPERTY AS ON 01 /04/1981 AT RS.2000/- PER CENT. 11. AGGRIEVED, THE ASSESSEE HAS PREFERRED THE APP EAL BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) DETERMINED THE COST OF ACQUI SITION AS ON 01/04/1981 AT RS.5000/- PER CENT. THE ASSESSEE, BEING AGGRIEVED, IS IN APPEAL BEFORE THE TRIBUNAL. 12. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE CIT(A) WHILE ENHANCING THE COST OF ACQUISITION AS O N 01/04/1981 FROM RS.2000/- TO RS.5000/- HAS GIVEN THE FOLLOWING FINDING: I.T.A. NO.534/COCH/2014 7 2.2 IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT COMPARED THE PROPERTY WITH ANY OTHER COMPARABLE DOCUMENTS WHICH COULD HAVE BEEN OB TAINED FROM THE SRO AND HIS ESTIMATION IS BASED ON CERTAIN PERCEPTION WHICH IS NOT SUPPORTED WITH ANY EVIDENCE. THE ASSESSING OFFICER HAS MENTIONED THAT HAVING RE GARD TO THE AREA AND OTHER COMMERCIAL IMPORTANCE I WILL ESTIMATE THE VALUE OF THE PROPERTY TO BE AT RS.2000/- PER CENT ONLY AS AGAINST THE VALUE ADOPTED BY THE APPELLANT AT RS.10,000/- PER CENT AS ON 1.4.1981. SINCE THERE HAS BEEN A LONG GAP OF 24 YEARS IT IS DIFFICULT TO GET THE EXACT PARALLEL FOR THE COST OF ACQUISITION AS ON 1. 4.81. THOUGH THE ASSESSEE HAS RAISED OBJECTION FOR THE VALUE TAKEN BY THE ASSESSI NG OFFICER BEING TOO HIGH BUT THEIR CONTENTION IS NOT SUPPORTED WITH ANY EVIDENCE AND O NLY IF IT REMAINS TO BE ESTIMATED IN ORDER TO MEET THE END OF JUSTICE, THE COST OF AC QUISITION, WHICH DURING THE COURSE OF APPELLATE PROCEEDINGS HAS BEEN PLEADED TO BE CONSID ERED BETWEEN 6000 TO 8000 PER CENT. IT IS HELD THAT THE COST OF ACQUISITION IS E STIMATED AT RS.5000/- PER CENT AS ON 1.4.1981. THE APPEAL ON THIS GROUND IS DISPOSED OFF ACCORDINGLY. THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDE NCE TO SHOW THAT THE FAIR MARKET VALUE AS ON 01/04/1981 IS IN EXCESS OF RS.50 00/- FIXED BY THE CIT(A). THEREFORE, I AM OF THE VIEW THAT THE CIT(A)S ESTIM ATION OF COST OF ACQUISITION AS ON 01/04/1981 AT RS.5000/- IS REASONABLE AND I SUST AIN THE SAME. IT IS ORDERED ACCORDINGLY. HENCE, GROUND NO. 5 OF THE ASSESSEE I S REJECTED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 06-01-2017. SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER PLACE: KOCHI DATED: 06 TH JANUARY, 2017 I.T.A. NO.534/COCH/2014 8 GJ COPY TO: 1. SMT. ALICE GEORGE, THEKKEKKARA HOUSE, GANDHI NAG AR, PUTHENVETTUVAZHI, THRISSUR-5. 2. THE INCOME-TAX OFFICER, WARD-2(1), TRICHUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-V, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, TRICHUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN