Pullisseri Hamza, Malappuram V. The ITO, Kottayam

ITA 735/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73930 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 15-11-2013
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: SAMUEL THOMAS
• Keywords: Income from undisclosed sources
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 735/COCH/2013 ASSESSMENT YEAR: 2009-10 PULLISSERI HAMZA, PULLISSERI HOUSE, MAMANGARA, KAMBALAKKALLU P.O., NILAMBUR TALUK, MALAPPURAM-679 333. [PAN:ABZPH 1676B] VS. THE INCOME TAX OFFICER, WARD-1, KOTTAYAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI SAMUEL THOMAS, ADV. REVENUE BY SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 27/03/2014 DATE OF PRONOUNCEMENT 28/03/2014 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 30- 08-2013 PASSED BY THE LD. CIT(A)-IV, KOCHI AND THE APPEAL RELATES TO THE ASSESSMENT YEAR 2009-10. 2. ALL THE GROUNDS RAISED BY THE ASSESSEE RELATED T O THE ADDITION OF RS.40,50,000/- MADE BY THE ASSESSING OFFICER AS INC OME FROM UNDISCLOSED SOURCES. I.T.A. NO.735 /COCH/2013 2 3. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE S TATED IN BRIEF. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS MAD E CASH DEPOSITS EXCEEDING RS. 10.00 LAKHS IN THE SB ACCOUNTS MAINTAINED WITH THE SOUTH INDIAN BANK. IT WAS ALSO NOTICED THAT THE ASSESSEE HAS PURCHASED CA RDAMOM ESTATES IN HIS OWN NAME AND IN THE NAME OF HIS FAMILY MEMBERS FOR A CO NSIDERATION OF RS. 8.36 CRORES. THE ASSESSEE EXPLAINED THE SOURCES OF PURC HASE OF THE CARDAMOM ESTATE AS UNDER: I) LOAN FROM THE FEDERAL BANK LTD. IN THE SELFS N AME & IN THE NAME OF FAMILY MEMBERS 6,17,00,000 II) ADVANCE FROM NRI FRIENDS 40,00,000 III) OWN FUNDS 49,00,000 IV) PROCEEDS FROM SLAUGHTER-TAPPING OF RUB BER TREES 1,30,00,000 8,36,00,000 ======== THE ADVANCE OF RS.40.00 LAKHS FROM NRI FRIENDS WAS CLAIMED TO HAVE BEEN RECEIVED FROM THE FOLLOWING THREE PERSONS: (I) SHRI M.K. ABDUL AZEEZ : 10,00,000 (II) SHRI M. JALAUDHDIN PULLISSERI : 2 0,00,000 (III)SHRI MOHAMMED HANEEF : 10,0 0,000 TOTAL : 40,00,000 THE ASSESSEE FILED CONFIRMATION LETTERS OBTAINED FR OM THESE THREE PERSONS. IN RESPECT OF ADVANCE OBTAINED FROM SHRI M.K. ABDUL AZ EEZ, THE ASSESSEE DID NOT FILE ANY CORROBORATIVE EVIDENCE TO SUBSTANTIATE THE MODE OF RECEIPT, DATE OF RECEIPT OF CASH/CHEQUE. NO COPY OF BANK STATEMENT WAS ALSO FILED. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE CASH LOAN OF RS. 10.00 LAKHS CLAIMED TO HAVE BEEN RECEIVED FROM SHRI ABDUL AZEEZ AS THE INCOME O F THE ASSESSEE FROM UNDISCLOSED SOURCES. IN RESPECT OF LOAN OBTAINED F ROM SHRI M. JALAUDHDIN I.T.A. NO.735 /COCH/2013 3 PULLISSERI, THE ASSESSEE FILED A COPY OF BANK STATE MENT OF THE CREDITOR. ON ANALYSIS OF THE CASH WITHDRAWALS, THE ASSESSING OFF ICER ACCEPTED THE LOAN TO THE EXTENT OF RS. 10.00 LAKHS AS GENUINE AND TREATED TH E BALANCE AMOUNT OF RS.10.00 LAKHS AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES . IN RESPECT OF LOAN RECEIVED FROM SHRI MOHAMMED HANEEF, THE ASSESSING O FFICER NOTICED THAT THE CREDITOR HAS NOT MADE ANY CASH WITHDRAWAL FROM HIS BANK ACCOUNT ON OR AROUND THE DATE OF PURCHASE OF AGRICULTURAL LANDS BY THE A SSESSEE. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE SUM OF RS. 10.00 LAKS H RECEIVED FROM SHRI MOHAMMED HANEEF AS INCOME OF THE ASSESSEE FROM UNDI SCLOSED SOURCES. 3. IN RESPECT OF THE CLAIM OF AVAILABILITY OF OWN F UNDS OF RS. 49.00 LAKHS, THE ASSESSEE SUBMITTED THAT HE HAD ACCUMULATED THE ABOV E SAID AMOUNT FROM OUT OF THE AGRICULTURAL INCOME AND ALSO FROM THE BUSINESS OF PURCHASE AND SALE OF USED VEHICLES. HOWEVER, THE ASSESSEE DID NOT PRODUCE AN Y EVIDENCE TO SHOWN THE GENERATION OF INCOME. HENCE, THE AO ESTIMATED THE AGRICULTURAL INCOME AT RS.35.00 LAKHS AND THE INCOME FROM PURCHASE AND SAL E OF USED VEHICLES AT RS.3,50,000/-AND ACCORDINGLY, ACCEPTED THE AVAILABI LITY OF OWN FUNDS TO THE EXTENT OF RS.38,50,000/-. ACCORDINGLY, THE ASSESSI NG OFFICER TREATED THE BALANCE AMOUNT OF RS. 10,50,000/- AS THE INCOME OF THE ASSE SSEE FROM UNEXPLAINED SOURCES. I.T.A. NO.735 /COCH/2013 4 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE ADDITIONS REFERRED ABOVE BUT COULD NOT SUCCEED. HENCE, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. IT IS A SETTLED PROPOSITION OF LAW THAT THE INITIAL BURDE N TO PROVE THE CREDITS IS PLACED UPON THE ASSESSEE U/S 68 OF THE ACT, I.E., THE ASSE SSEE IS REQUIRED TO PROVE THREE MAIN INGREDIENTS IN RESPECT OF CASH CREDITS, VIZ., THE IDENTITY OF THE CREDITOR, THE CREDIT WORTHINESS OF THE CREDITOR AND THE GENUINENE SS OF TRANSACTIONS. IN THE INSTANT CASE, WE NOTICE THAT THE ASSESSEE HAS PROVE D THE IDENTITY OF THE CREDITORS. HOWEVER, HE HAS FAILED TO PROVE THE CREDIT WORTHINE SS OF THE CREDITORS. FURTHER THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED THE LOANS BY WAY OF CASH AND HENCE THE GENUINENESS OF TRANSACTIONS WAS ALSO NOT PROVED . BEFORE US, THE LD A.R SUBMITTED THAT THESE THREE CREDITORS ARE WORKING AB ROAD FOR SEVERAL YEARS AND HENCE THERE IS NO REASON TO SUSPECT THEIR CREDIT WO RTHINESS. HOWEVER HE DID NOT FURNISH ANY DOCUMENTS TO SUBSTANTIATE THE CLAIM OF AVAILABILITY OF FUNDS WITH THE CREDITORS TO GIVE THE IMPUGNED LOANS TO THE ASSESSE E. IN OUR VIEW, THE FACT OF WORKING ABROAD WILL NOT AUTOMATICALLY PROVE THE CRE DIT WORTHINESS OF THE CREDITOR. WHEN IT WAS SPECIFICALLY ASKED AS TO WHETHER THE AS SESSEE COULD FURNISH SOME DOCUMENTS TO PROVE THE CREDIT WORTHINESS OF THE CRE DITORS, THE LD A.R SUBMITTED THAT THE ASSESSEE HAD TRIED HIS LEVEL BEST TO PROCU RE THE DOCUMENTS, BUT COULD NOT OBTAIN THEM. IN VIEW OF THE INABILITY OF THE A SSESSEE TO PROVE THE CREDIT I.T.A. NO.735 /COCH/2013 5 WORTHINESS OF THE CREDITORS AND FURTHER IN VIEW OF THE FACT THAT THE GENUINENESS OF TRANSACTIONS HAS ALSO NOT BEEN PROVED, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITIONS R ELATING TO THE LOAN OBTAINED FROM THE THREE PERSONS, REFERRED ABOVE. 6. IN RESPECT OF THE ADDITION OF RS.10.50 LAKHS M ADE OUT OF OWN FUNDS OF RS.49.00 LAKHS, THE LD A.R SUBMITTED THAT THE ASSES SEE HAD AVAILED A LOAN OF RS.10.00 LAKHS FROM THE MALLAPPURAM DISTRICT CO-OPE RATIVE BANK LTD IN JULY, 2008 AND THE SAME WOULD EXPLAIN THE AVAILABILITY OF FUNDS OF RS.10.50 LAKHS. THE ASSESSEE FURNISHED A COPY OF LOAN STATEMENT OBTAINE D FROM THE BANK IN PAGE NO. 6 AND 7 OF THE PAPER BOOK. THE LD D.R SUBMITTED TH AT THE ASSESSEE IS MAKING FRESH CLAIM BY FURNISHING THESE DOCUMENTS FOR THE F IRST TIME BEFORE THE TRIBUNAL. WE ALSO NOTICE THAT THE ASSESSEE HAS OBTAINED THESE CERTIFICATES FROM THE BANK AFTER THE DATE OF DISPOSAL OF APPEAL BY LD CIT(A). HOWEVER, AS PER THE CERTIFICATE, THE ASSESSEE HAS RECEIVED A LOAN OF RS .10.00 LAKHS FROM THE CO- OPERATIVE BANK CITED ABOVE. HENCE, IN OUR VIEW, TH E CLAIM OF AVAILABILITY OF FUNDS TO THE TUNE OF RS.10.00 LAKHS ON THE BASIS OF THE C ERTIFICATE REFERRED ABOVE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESS ING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) IN RESPECT OF THIS ADDITION AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIREC TION TO EXAMINE THE SAME AFRESH IN THE LIGHT OF FRESH CLAIM MADE BEFORE US AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. I.T.A. NO.735 /COCH/2013 6 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 28-0 3-2014. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH MARCH,2014 GJ COPY TO: 1. PULLISSERI HAMZA, PULLISSERI HOUSE, MAMANGARA, K AMBALAKKALLU P.O.,NILAMBUR TALUK,MALAPPURAM-679 333. 2. THE INCOME TAX OFFICER, WARD-1, KOTTAYAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN