Shri. V. Devaraju, Anekal V. ITO, Bangalore

ITA 62/BANG/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0200 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA J
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 54B; 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, BANGALORE BEFORE S MT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 62/ BANG/20 15 (ASSESSMENT YEAR: 2009 - 10 ) SHRI V.DEVARAJU, SURAGAJAKKANA HALLI, HARAG ADDE POST, ANEKAL TQLUK - 562 106 PA NO.AOWPD 6219 A VS. APPELLANT INCOME - TAX OFFICER, WARD 9(3), BANGALORE. RESPONDENT APPELLANT BY : SHRI ZAIN AHMED KHAN, CA. RESPONDENT BY : SHRI SUNIL KUMAR AGARWALA, JCIT(DR) DATE OF H EARING : 28/06/2016 DATE OF PRONOUNCEMENT : 20 /07/2016 O R D E R PER I NTURI RAMA RAO, AM : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(A), LTU, DATED 24/09/2014 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE RAI SED THE FOLLOWING GROUNDS OF APPEAL. 1. THE ORDER OF THE LD. CIT (A) IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT (A) ERRED IN UPHOLDING THE ORDER OF THE LD. AO WHEREIN THE AO HAS ASSESSED THE TOTAL INCOME OF THE APPELLANT AT RS. 1,06,7 7,910, AS AGAINST RS. 5,55,721 AS DECLARED BY THE APPELLANT IN HIS RETURN OF INCOME, WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THUS THE ORDER IS LIABLE TO BE QUASHED. ITA NO . 62 /BANG/201 5 PAGE 2 OF 5 3. ADDITION U/S. 68 - RS. 49,90,000 3.1 THE LD. CIT(A) ERRED IN CONFIRMING THE O RDER OF LD. AO WHO HAS BROUGHT TO TAX U/S. 68 A CASH DEPOSIT OF RS. 49,90,000 APPEARING IN THE BANK ACCOUNT OF THE APPELLANT. 3.2 THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE CASH DEPOSITED IN THE ACCOUNT OF THE APPELLANT RELATES TO THE ADVANCE FOR PURCHAS E OF HOUSE PROPERTY RETURNED BY THE SELLER, MR. MUNIRAJU. 4. ADDITION U/S. 68 - RS. 31,00,000 4.1 THE LD. CIT(A) ERRED IN UPHOLDING THE ORDER OF LD. AO, WHO HAS BROUGHT TO TAX U/S. 68, CERTAIN CASH DEPOSITS AMOUNTING TO RS. 31,00,000 APPEARING IN THE BANK A CCOUNT OF THE APPELLANT. 4.2 THE LD. CIT (A) OUGHT TO HAVE ACCEPTED THE CONTENTION OF THE APPELLANT THAT THE AGGREGATE AMOUNT OF RS. 3 1,00,000 IS SHARE OF OTHER BENEFICIARIES OF THE JOINTLY OWNED LAND DEPOSITED IN THE APPELLANT'S BANK ACCOUNT FOR SAFE CU STODY AT THE REQUEST OF OTHER BENEFICIARIES. 5. THE LD. C1T(A) ERRED IN REJECTING THE EVIDENCES FILED BY THE APPELLANT IN SUBSTANTIATION OF HIS CLAIM BY DOUBTING ITS CREDIBILITY. 6. THE LD. AO ERRED IN INVOKING THE PROVISIONS OF SEC. 68 IN THE ABSENCE OF BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND THE LD. CIT (A) ERRED IN CONFIRMING THE SAME. 7. THE LD. CIT (A) ERRED IN CHARGING INTEREST UIS 234A AND 234B OF THE ACT. THE APPELLANT SEEKS YOUR LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS URGED AT T HE TIME OF HEARING. 3. BRIEFLY FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 ON 17/09/2009 DECLARING INCOME OF RS.5,55,721/ - . AFTER PROCESSING THE SAID RETURN OF INCOME UNDER THE P ROVISIONS OF SEC.143(1) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT WAS COMPLETED BY THE ITO, WARD 9(3), BANGALORE, U/S 143(3) OF THE ACT AT A TOTAL INCOME OF RS. 1,06,77,910/ - . WHILE DOING SO, THE ASSESSING OFFICER [AO] BROUGHT TO TAX CASH DEPOSITS IN ITA NO . 62 /BANG/201 5 PAGE 3 OF 5 I. SB A/C NO.30392262885 AT STATE BANK OF INDIA, ELECTRONIC CITY BRANCH, BANGALORE AND II. SB A/C NO.10491930000132 AT HDFC BANK, CHANDAPURA ROAD, ANEKAL. A S UNEXPL AINED CASH DEPOSITS AND ALSO BROUGHT TO TAX LONG TERM CAPITAL GAINS OF RS.19,37,942/ - DENYING THE EXEMPTION CLAIMED U/S 54B OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED THAT CASH DEPOSITS ARE MADE OUT OF SALE PROCEEDS RECEIVED BY THE FRIEND OF THE ASSESSEE SHRI V.CHENNAVEERAPPA. MONEY WAS DEPOSITED IN HIS ACCOUNT AS HIS FRIEND SHRI CHENNAVEERAPPA DID NOT HAVE ANY BANK ACCOUNT AND EVEN SHRI CHENNAVEERAPPA APPEARED BEFORE THE AO AND CONFIRMED THE SAM E AND PRODUCED THE SALE AGREEMENT. THE AO DISBELIEVED THIS VERSION AND BROUGHT TO TAX. AS REGARDS DEPOSITS IN SB A/C NO.10491930000132 AT HDFC BANK, CHANDAPURA ROAD, ANEKAL, OF RS.31 LAKHS IT WAS EXPLAINED THAT CASH DEPOSITS WERE MADE OUT OF SHARE OF HIS WIFE IN THE SALE PROCEEDS OF ANCESTRAL PROPERTY. HOWEVER, ASSESSEE COULD NOT PRODUCE SALE DEED OF THE PROPERTY SOLD. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE CIT(A), WHO VIDE IMPUGNED ORDER, DISMISSED THE APPEAL. 5. BEING AGGRIEVED, A SSESSEE IS BEFORE US IN PRESENT APPEAL. LEARNED AR OF THE ASSESSEE VEHEMENTLY ARGUED THAT ADDITIONS WERE MADE MERELY DISBELIEVING THE EXPLANATION TENDERED IN SUPPORT OF THE SOURCES FOR CASH DEPOSITS. NO ADDITION CAN BE ITA NO . 62 /BANG/201 5 PAGE 4 OF 5 MADE ON MERE SURMISES AND CONJECTUR ES. IT IS FURTHER CONTENDED THAT HE IS AN ILLITERATE AND HAS HIMSELF APPEARED BEFORE THE AO WITHOUT UNDERSTANDING THE NUANCES OF THE PROVISIONS OF THE ACT AND MADE SUBMISSIONS BEFORE THE AO. THEREFORE, LEARNED AR OF THE ASSESSEE PRAYED THAT THE ADDITIONS MAY BE DELETED. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE ASSESSEE HAD GIVEN CONTRADICTORY EXPLANATION IN SUPPORT OF SOURCES BEFORE THE AO AND THE CIT(A). THIS GOES TO SHOW THAT THE EXPLANATION TENDERED BY THE ASSESSEE IS NOT BONA FIDE AND THEREFORE, THE ADDITION SHOULD BE SUSTAINED. 6. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUES IN PRESENT APPEAL ARE WHETHER THE ASSESSEE TENDERED PLAUSIBLE EXPLANATION IN SUPPORT OF CASH DEPOSITS IN THE SB A /C NO.30392262885 AT STATE BANK OF INDIA, ELECTRONIC CITY BRANCH, BANGALORE AND SB A/C NO.10491930000132 AT HDFC BANK, CHANDAPURA ROAD, ANEKAL. NO DOUBT, THE ASSESSEE HAD ADOPTED A CONTRADICTORY APPROACH BEFORE THE LOWER AUTHORITIES. THE CIT(A) HAS CONFIR MED THE ADDITION MERELY DISBELIEVING THE EXPLANATION TENDERED BY THE ASSESSEE IN SUPPORT OF SOURCES FOR CASH DEPOSITS IN THE BANK ACCOUNT. IT IS NOW WELL SETTLED THAT NO ADDITION CAN BE MADE ON MERE SURMISES AND CONJECTURES WITHOUT ANY CORROBORATIVE EVIDE NCE. HOWEVER, WE FIND FROM RECORD THAT THE AO HAD NOT CROSS EXAMINED THE PERSON WHO ALLEGEDLY LENT/HAD GIVEN MONEY TO THE ASSESSEE. HAVING REGARD TO THE PRINCIPLES OF NATURAL JUSTICE, WE DEEM IT FIT AND PROPER TO REMAND THE ENTIRE ITA NO . 62 /BANG/201 5 PAGE 5 OF 5 ASSESSMENT AGAIN TO THE FILE OF THE AO FOR DE NOVO ASSESSMENT AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JULY, 2016 S D/ - S D/ - (ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE D A T E D : 20/07/2016 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II B ANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE