VASUDEV SALIAN, MUMBAI V. ITO 8(3)(1), MUMBAI

ITA 5550/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8787 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Section: 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, PRESIDENT AND SHRI P.M. JAGTAP, AM I.T.A. NO.5550/MUM/2009 (ASSESSMENT YEAR : 2006-07) SHRI VASUDEO SALIAN, 35/751, ADARSH NAGAR, PRABHADEVI, MUMBAI-400 025. PAN:AAYPS9993-G VS. THE INCOME TAX OFFICER 8(3)(1), AAYAKAR BHAVAN, 2 ND FLOOR, M.K.ROAD, MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. MADHUR AGARWAL RESPONDENT BY : SMT. ASHIMA GUPTA, DR O R D E R PER R.V.EASWAR, PRESIDENT: THIS APPEAL IS BY THE ASSESSEE AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. THE ASSE SSEE IS AN INDIVIDUAL DERIVING SALARY FROM M/S. SHELIAN SYSTEM S (P) LTD. 2. THE ONLY GROUND IN THIS APPEAL IS AGAINST THE AD DITION OF RS.11,00,000/- MADE UNDER SECTION 69A OF THE INCOME TAX ACT. THE ADDITION WAS MADE IN THE FOLLOWING CIRCUMSTANCE S. THE ASSESSING OFFICER RECEIVED INFORMATION FROM HIS DEP ARTMENT THAT THE ASSESSEE HAD INVESTED RS.11 LAKHS IN THE UNITS OF MUTUAL FUNDS IN THE RELEVANT PREVIOUS YEAR. HE COLLECTED T HE DETAILS OF THE INVESTMENTS WHICH ARE GIVEN IN PARAGRAPH 4 OF T HE ASSESSMENT ORDER, AND ASKED THE ASSESSEE TO EXPLAIN THE SOURCES OF THE INVESTMENTS. IT WAS EXPLAINED BY THE ASSESSEE THAT HIS ONLY SOURCE OF INCOME WAS THE SALARY, THAT HE HAS A SAVING BANK ACCOUNT IN PRABHADEVI BRANCH OF ICICI B ANK, THAT HE DID NOT HAVE ANY OTHER BANK ACCOUNT, THAT HE DID NOT INVEST ANY AMOUNT IN MUTUAL FUNDS AND THAT IN THESE CIRCUM STANCES THERE WAS NO QUESTION OF INVESTMENTS HAVING COME OU T OF HIS FUNDS. IT WAS FURTHER POINTED OUT THAT THE INVESTME NTS WERE ITA NO.5550/MUM/09 2 MADE BY MRS. VIMALA KANCHAN, MOTHER OF THE ASSESSEE , MRS. MANJULA KANCHAN, SISTER OF THE ASSESSEE AND MR. PRA MOD KANCHAN, BROTHER OF THE ASSESSEE. THE ASSESSEES MO THER WAS STATED TO HAVE RECEIVED RS.10,18,395/- DURING THE Y EAR 1994-95 AS HER SHARE IN THE SALE PROCEEDS OF ANCESTRAL AGRI CULTURAL LAND BELONGING TO HER FAMILY AND THAT THE AFORESAID AMOU NT WAS DEPOSITED IN THE PRABHADEVI BRANCH OF THE SYNDICATE BANK. THE ASSESSEE ALSO SUBMITTED THAT THE AMOUNT WAS LATER I NVESTED IN FIXED DEPOSITS. A DETAILED FUND FLOW STATEMENT WAS ENCLOSED TO THE ASSESSEES REPLY BEFORE THE ASSESSING OFFICER. IT WAS ADMITTED THAT THE ASSESSEE ALONE POSSESSED A PAN CARD WHICH WAS PRODUCED BEFORE THE MUTUAL FUND AUTHORITIES BUT THE INVESTMENTS ACTUALLY CAME FROM THE MOTHER OF THE AS SESSEE. 3. THE ASSESSING OFFICER NOTED THAT THE INVESTMENT OF RS.3,85,000/- IN RELIANCE MUTUAL FUNDS WAS MADE BY THE ASSESSEE AND NOT IN THE JOINT NAMES. HE ALSO FOUND THAT THE INVESTMENT OF RS.3,30,000/- IN TEMPLETON MUTUAL FUN D AND RS.3,85,000/- IN HDFC MUTUAL FUND WERE MADE IN JOI NT ACCOUNTS AND THAT EVEN IF THE ASSESSEES CONTENTION THAT IT CAME FROM HIS MOTHER IS ACCEPTED, HER CREDITWORTHINESS NOT HAVING BEEN PROVED, THE ASSESSEES VERSION CANNOT BE ACCEP TED. THE ASSESSING OFFICER NOTED THAT THE ASSESSEES MOTHER DID NOT HAVE ANY PAN CARD NOR WAS SHE ASSESSED TO TAX. IN THIS V IEW OF THE MATTER THE ASSESSING OFFICER BROUGHT THE AMOUNT OF RS.3,85,000/- BEING THE INVESTMENT IN RELIANCE MUTU AL FUNDS TO TAX UNDER SECTION 69A; HOWEVER THE OTHER TWO INVEST MENTS AGGREGATING TO RS.7,15,000/- WERE ADDED UNDER SECTI ON 69A ON PROTECTIVE BASIS SINCE THEY WERE IN THE JOINT NAMES OF THE ASSESSEE AND HIS MOTHER. 4. IN THE APPEAL BEFORE THE CIT(A), THE ASSESSEE RE ITERATED HIS SUBMISSIONS AND PRODUCED ALL THE DETAILS WHICH WERE PRODUCED ITA NO.5550/MUM/09 3 BEFORE THE ASSESSING OFFICER. THE CIT(A) HOWEVER UP HELD THE ORDER OF THE ASSESSING OFFICER. 5. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRI BUNAL. AT THE TIME OF THE HEARING, IT WAS POINTED OUT ON BEHA LF OF THE ASSESSEE THAT ON IDENTICAL FACTS AND CONTENTIONS TH E ADDITION OF RS.8,50,000/- MADE UNDER SECTION 69A IN THE ASSESSM ENT YEAR 2005-06 WAS DELETED BY THE CIT(A) WHOSE ORDER WAS C ONFIRMED BY THE TRIBUNAL BY ITS ORDER DATED 12 TH JANUARY, 2011 IN ITA NO.1626/MUM/2010. A COPY OF THE SAID ORDER WAS FILE D. WE FIND THEREFROM THAT IN THAT YEAR ALSO THE ADDITION WAS M ADE ON THE SAME FOOTING, REJECTING THE SUBMISSIONS OF THE ASSE SSEE WHICH ARE IDENTICAL WITH THE SUBMISSIONS MADE BY HIM FOR THE YEAR UNDER APPEAL. IN THAT YEAR, THE CIT(A), AFTER GOING THROUGH THE COMPLETE DETAILS AND FUNDS FLOW STATEMENTS AND OTHE R RECORDS FILED BY THE ASSESSEE HELD THAT THE INVESTMENTS WER E ACTUALLY MADE BY THE ASSESSEES MOTHER OUT OF HER OWN FUNDS. THE CIT(A) HAD ALSO SENT THOSE DETAILS FILED BEFORE HIM TO THE ASSESSING OFFICER FOR VERIFICATION, BUT THE ASSESSING OFFICER DID NOT SEND ANY REMAND REPORT OBJECTING TO SUCH DETAILS. THERE IS NO DIFFERENCE BETWEEN THE FACTS OF THE CASE FOR THE AS SESSMENT YEAR 2005-06 AND THE ASSESSMENT YEAR 2006-07. MERELY BEC AUSE THE ASSESSEES NAME WAS FOUND IN THE RELIANCE MUTUAL FU ND PAPERS, THE ADDITION CANNOT BE MADE UNDER SECTION 69A, IF T HERE IS EVIDENCE ADDUCED TO SHOW THAT THE FUNDS ACTUALLY CA ME FROM THE ASSESSEES MOTHER. EVIDENCE TO THIS EFFECT HAS BEEN ADDUCED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE BY SUB MITTING THE BANK ACCOUNT PARTICULARS OF HIS MOTHER, FUNDS FLOW STATEMENT AS TO HOW THE FIXED DEPOSITS WERE UTILIZED AND SO ON. THERE IS NO MATERIAL CONTRA IN THE POSSESSION OF THE ASSESSING OFFICER. SIMILARLY, IN THE CASE OF TEMPLETON AND HDFC MUTUAL FUNDS AGGREGATING TO RS.7,15,000/-, THEY HAVE BEEN SHOWN TO HAVE COME OUT OF THE SOURCES BELONGING TO HIS MOTHER. IN THESE ITA NO.5550/MUM/09 4 CIRCUMSTANCES AND HAVING REGARD TO THE ORDER OF THE TRIBUNAL FOR THE EARLIER YEAR CITED ABOVE, WE DELETE THE ADDITIO N OF RS.11,00,000/- FROM THE ASSESSMENT AND ALLOW THE A PPEAL FILED BY THE ASSESSEE. NO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 9 TH DAY OF JANUARY, 2011. SD/- ( P.M. JAGTAP ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DATED 19 TH JANUARY, 2011. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-8, MUMBAI. 4. THE CIT(A)-XXIX , MUMBAI 5. THE DR F BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI