BOSE SARAVANAN , PUDUKKOTTAI V. CIT(APPEALS), NFAC ,DELHI, PUDUKKOTTAI

ITA 598/CHNY/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1057 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-09-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 14-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B/SMC’ BENCH, CHENNAI माननीय ी मनोज कु मार अ"वाल ,लेखा सद) के सम*। BEFORE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.598/Chny/2022 ( िनधा3रण वष3 / Assessment Year: 2017-18) Bose Saravanan 12A, Palaiyur, Pudukkottai – 622 001. बनाम/ V s. ITO Ward-2, Pudukkottai. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . G AAP S -4 8 4 9 -K (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri Y. Sridhar (C.A) – Ld. AR थ की ओरसे/Respondent by : Shri D. Hema Bhupal (JCIT)-Ld. DR सुनवाई की तारीख/Date of Hearing : 21-09-2022 घोषणा की तारीख /Date of Pronouncement : 12-10-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 27-06-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 26-12-2019. The sole grievance of the assessee is addition of Rs.10.04 Lacs being unexplained investment in purchase of car. 2. The Ld. AR assailed the impugned additions and placed on record copy of cash book maintained by the assessee. The Ld. Sr. DR filed written submissions and submitted that the so-called cash book is ITA No.598/Chny/2022 - 2 - not the original book maintained during the course of business or profession. It was prepared in Tally package to justify cash of Rs.11.15 Lacs as deposited in Axis Bank. The Ld. Sr. DR submitted that except for professional fees of Rs.0.87 Lacs, all other figures which have been added to cash balance are not Profit & Loss items. Few of the entries have been mentioned as Suspense entries. In the said background Ld. Sr. DR alleged that the cash book was cooked up for the purpose of justifying cash balance on 15.07.2016. The assessee failed to produce complete set of books to prove the genuineness of the transactions. Having heard rival submissions, the appeal is disposed-off as under. Assessment Proceedings 3.1 The assessee being resident individual is engaged as a Chartered Accountant. The assessee admitted income of Rs.4.06 Lacs which was subjected to scrutiny assessment to verify cash deposited during the year. 3.2 It transpired that the assessee deposited cash during demonetization period for Rs.84.22 Lacs in Axis Bank Account and another Rs.92.85 Lacs in HDFC Bank Account. The Ld. AO accepted the claim of the assessee but noted that the assessee purchased one Scorpio car for Rs.10.04 Lacs which was stated to be sourced out of gift from father, professional fee and collection from debtors. However, no proof was submitted. Therefore, the amount of Rs.10.04 Lacs was added as unexplained investment u/s 69. Appellate Proceedings 4.1 During appellate proceedings, the assessee submitted cash book for the year and a letter in support of gift of Rs.2.50 Lacs from the father. The bank statements were also filed. ITA No.598/Chny/2022 - 3 - 4.2 However Ld. CIT(A) rejected the claim of the assessee by observing as under: - 6.4.1 It is observed from the cash book that in the period 01.04.2016 to 05.07.2016 prior to purchase of the Impugned vehicle, good number of receipts recorded are narrated as sundry debtors. However, after total of the receipts debited in the cash book amounted to Rs.11,15,000/- which was deposited on 15.07.2016 in the bank account of the appellant held in Axis Bank for purchasing the vehicle Mahindra Scorpio, no receipt from sundry debtors is debited in the cash book in the remaining period of the F.Y. 2016-17 up to 31.03.2017. There is no name and address or ledger account of clients and sundry debtors from whom cash is purported to have been received during the aforesaid period. Appellant has not explained with reference to the books of account, financial statements and Income Tax Returns that these cash receipts reflected in the cash book are fees received from his clients and sundry debtors which have been already included in the professional receipts for computing taxable income of the appellant in the relevant assessment years. There is no confirmation by the so-called sundry debtors confirming the payment claimed as receipts by the appellant. Thus, the cash book by Itself is not sufficient to establish the claim that the said vehicle has been purchased out of the professional receipts, which have been taken into account in computing income from profession of the appellant and that the said income has been declared in the income tax return filed by the appellant and subjected to levy of income tax in the relevant assessment year. Considering the above discrepancies, I concur with the stand taken the Assessing Officer that the explanation of appellant is unacceptable, It Is also pertinent to bring on record that the aforesaid cash deposited in the appellant's account with Axis Bank does not comprise of withdrawals recently and in the past from the bank accounts of the appellant as observed from perusal of the bank account statements of HDFC Bank, Axis Bank and Tamil Nadu Mercantile Bank. Thus, this explanation of the appellant regarding the source for purchasing the vehicle stands unsubstantiated. 6.4.2 With regard to the contention of the appellant that a sum of Rs.2,50,000/- has been received as gift from his father, I find that no documentary evidence was produced before the Assessing Officer during the assessment proceedings. The appellant submitted that the source of the gift is agricultural income of his father. Appellant has submitted a letter dated nil from his father in this regard. However, the statement given in the letter that the father has sourced the said amount given to the appellant from his agricultural income is not substantiated with documentary evidence, Ownership of agricultural land by appellant's lather and documents to show that agricultural activities have been carried out which resulted in harvesting of agricultural produce and the same was sold is not established with/ documentary evidence. It is to be pointed out here that appellant has not made any prayer under rule 46A for admitting the aforesaid letter as additional evidence. ITA No.598/Chny/2022 - 4 - In the said facts and circumstances, aforementioned letter from his father is not admitted as additional evidence. The claim of the appellant tor the amount of Rs.2,50,000/- as gift received from his father remains unproved. Hence, the action of the Assessing Officer needs to be upheld. 6.4.3 It is conceivable from careful reading of the assessment order that materials submitted by the appellant were perused by the Assessing Officer during the assessment proceedings. Therefore, the Assessing Officer cannot be accused of not having accorded sufficient opportunity to the appellant regarding the issue on hand, appellant has not produced documentary evidence to explain the monetary source for purchasing the vehicle. Further since the primary documents were not provided to the Assessing Officer to establish the veracity of appellant's explanation, appellant has not discharged the onus of proving the genuineness of receipts from sundry debtors claimed as the source of funds for purchasing the vehicle by the appellant. Therefore, to this extent the books of accounts maintained by the assessee for the period relevant to the assessment year under consideration are rejected Consequently, the addition made as unexplained investment in the assessment order is sustained. Accordingly, all the grounds of appeal enumerated in Para 2 above are dismissed. Aggrieved as aforesaid, the assessee is in further appeal. My findings and Adjudication 5. Upon perusal of aforesaid observations in the impugned order, it could be seen that the assessee could not substantiate the cash deposit to purchase the car. The findings rendered by Ld. CIT(A) as aforesaid have remained uncontroverted before me. The gift from father is also not supported by any evidence of agricultural income. I also concur with the written submissions of Ld. Sr. DR that the cash book as submitted by the assessee could not be accepted as such and the same is required to be cross-tallied with books of accounts maintained by the assessee. Therefore, considering the fact of the case, I deem it fit to grant another opportunity to the assessee to substantiate its case before lower authorities. Accordingly, the matter of addition of Rs.10.04 Lacs stand resorted back to the file of Ld. AO ITA No.598/Chny/2022 - 5 - for fresh consideration with a direction to the assessee to substantiate the source of deposit. 6. The appeal stand allowed for statistical purposes. Order pronounced on 12 th October, 2022. Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद) / ACCOUNTANT MEMBER चे*ई / Chennai; िदनांक / Dated : 12-10-2022 EDN/- आदेश की Iितिलिप अ "ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF