C K LAKSHMANA PERUMAL, CHENNAI V. ITO NON CORPORATE WARD 20 (4), CHENNAI

ITA 787/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5928 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEERA SURESH
• Keywords: Unexplained cash credit; Gift; Source of fund; Additional evidence
• Section: 143(3); 68

Judgement Text

, ( ) , IN THE INCOME TAX APPELLATE TRIBUNAL , A (SMC) BENCH, CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.787/CHNY/2018 ( / ASSESSMENT YEAR: 2014-15) SHRI LAKSHMANA PERUMAL, NO.1/1000A, GANDHI STREET, BHAVANI NAGAR, REDHILLS, CHENNAI 600052. VS THE INCOME TAX OFFICER, NON-CORPORATE WARD 20(4), CHENNAI. PAN: AAGPL3139B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SMT. MEERA SURESH, CA / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT /DATE OF HEARING : 10.12.2018 /DATE OF PRONOUNCEMENT : 21.01.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-14, CHENNAI, DATED 29.12.2017 IN ITA NO.164/CIT(A)-4/2016-17 FOR THE ASSESSMENT YEAR 2014-15 PASSED U/S. 250(6) R.W.S. 143(3) OF THE ACT. 2 ITA NO.787/CHNY/2018 2. THE ASSESSEE HAS RAISED FOUR GROUNDS IN HIS APPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.31,47,735/- TOWARDS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, A RETIRED PROFESSOR, E-FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ON 21.07.2014 ADMITTING TOTAL INCOME OF RS.10,75,640/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 08.09.2015. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 31.10.2016 WHEREIN THE LD.AO MADE ADDITION OF RS.31,47,735/- TOWARDS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD DEPOSITED CASH IN HIS BANK ACCOUNT AMOUNTING TO RS.49,59,500/- AND RS.4,01,735/- ON VARIOUS DATES. THE ASSESSEE HAD EXPLAINED BEFORE THE LD.AO THAT HE HAD GIVEN LOAN TO HIS BROTHER-IN-LAW SHRI G. KANNAN FOR AN AMOUNT OF RS.15 LAKHS, SHRI R. SELVA KUMAR RS.1,50,000/- WHICH WAS SUBSEQUENTLY RETURNED BACK BY CASH IN PIECE MEAL AND THE 3 ITA NO.787/CHNY/2018 SAME WAS DEPOSITED IN THE BANK ACCOUNT. HOWEVER THE LD.AO REJECTED THE SUBMISSION OF THE ASSESSEE AND WAS OF THE VIEW THAT THE CASH WITHDRAWAL MADE WITHIN A PERIOD OF ONE MONTH BEFORE THE DATE OF DEPOSIT OF CASH WHICH COMES TO RS.22,13,500/- CAN ONLY BE CONSIDERED AS THE SOURCE FOR THE SUBSEQUENT CASH DEPOSITS AND THE BALANCE AMOUNT OF RS.27,46,000/- OUGHT TO BE TREATED AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT ALONG WITH THE REMAINING CASH DEPOSIT OF RS.4,01,735/-. ACCORDINGLY THE LD.AO TREATED THE AGGREGATE AMOUNT OF RS.31,47,735/- (RS.27,46,000 + RS.4,01,735) AS THE INCOME OF THE ASSESSEE FROM OTHER SOURCE. 5. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ORDER OF THE LD.AO BY OBSERVING AS UNDER:- 4.4.8 TO SUM UP, THE APPELLANTS SUBMISSION BEFORE THE CIT(A) IS NOT ACCEPTABLE FOR THE FOLLOWING REASONS: A) IN VIEW OF THE AO S REMAND REPORT, IT IS CLEAR THAT THE APPELLANT WAS GIVEN SUFFICIENT OPPORTUNITY BY THE AO DURING THE ASSESSMENT PROCEEDINGS ITSELF. THE APPELLANT COULD NOT DEMONSTRATE THAT THE CONDITIONS STIPULATED UNDER RULE 46A FOR ALLOWING THE ADDITION EVIDENCES WERE FULFILLED. B) EVEN THE ADDITIONAL EVIDENCES FURNISHED BY THE APPELLANT BEFORE THE CIT(A) ARE NOT ACCEPTABLE FOR THE ABOVE REASONS. C) THE APPELLANT COULD NOT SATISFACTORILY EXPLAIN THE REASONS FOR WITHDRAWAL FROM HIS BANK ACCOUNT AND DEPOSITING THE SAME IN ANOTHER BANK ACCOUNT WHEN THERE WAS FACILITY TO TRANSFER ELECTRONICALLY OR BY WAY OF CHEQUE / PAY ORDER. D) WHILE EXAMINING THE DATES OF WITHDRAWAL AND THE DATES OF DEPOSIT, IN SEVERAL TRANSACTIONS THEY DID NOT MATCH AND THERE WAS CONSIDERABLE DELAY IN DEPOSITING THE SAME IN THE APPELLANTS BANK ACCOUNT. 4 ITA NO.787/CHNY/2018 E) THE APPELLANT COULD NOT SUBMIT CASH BOOK OR FUND FLOW STATEMENT EXPLAINING THE CASH WITHDRAWAL FROM THE BANK ACCOUNT AND CASH DEPOSIT IN THE APPELLANTS BANK ACCOUNT. 4.4.9 IN VIEW OF THE ABOVE REMARKS AND FINDING, THE APPELLANTS SUBMISSION BEFORE THE CIT(A) IS REJECTED. THE AO'S ADDITION OF UNEXPLAINED CASH CREDIT U/S 68 IS UPHELD AND THE APPELLANTS GROUNDS ARE DISMISSED. 6. THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSEE IS A RETIRED PROFESSOR FROM L.N. GOVERNMENT COLLEGE, PONNERI, CHENNAI AND HAD RECEIVED MORE THAN RS.50 LAKHS DURING THE FINANCIAL YEAR 2013 FROM SOURCES SUCH AS GPF, COMMUTED VALUE OF PENSION, DCRG, LEAVE ENCASHMENT, ARREARS OF PENSION INCLUDING GIFT OF RS.4,01,735/- FROM HIS SON. THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE HAD DISBURSE THE SAME TO HELP HIS RELATIVES AND FRIENDS WHICH WAS SUBSEQUENTLY RETURNED BY CASH AND THE SAME WAS DEPOSITED IN THE BANK ACCOUNT. THE LD.AR THEREFORE PLEADED THAT THE SOURCE OF THE CASH DEPOSITED IN THE BANK IS THUS EXPLAINED AND HENCE THE ADDITION MADE BY THE LD.AO WHICH WAS SUBSEQUENTLY SUSTAINED BY THE LD.CIT(A) MAY BE DELETED. THE LD.DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE LD.REVENUE AUTHORITIES. 5 ITA NO.787/CHNY/2018 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A RETIRED PROFESSOR OF THE GOVERNMENT LAW COLLEGE, PONNERI. IT IS ALSO APPARENT THAT THE ASSESSEE HAS RETIRED FROM SERVICE DURING THE FINANCIAL YEAR 2013. THE ASSESSEE HAS ALSO CLAIMED TO HAVE THE FOLLOWING SOURCE FOR THE BANK DEPOSIT WHICH WAS SUBSEQUENTLY WITHDRAWN AND THEREAFTER RE-DEPOSITED:- DETAILS OF SALARY/RETIREMENT/TERMINAL BENEFITS RECEIVED FROM A.Y.2013-14 C.K. LAKSHMANAPERUMAL PAN AAGPL3139B THE FOLLOWING ARE THE DETAILS OR RETIREMENT/PENSION BENEFITS FURNISHED BELOW. 1) OPENING BALANCE (CASH WITH DRAWL IN INDIAN BANK &SBI) 374000.00 2) SONS GIFTS(DEPOSITED IN INDIAN BANK REDHILLS) 401735.00 1 ).EARNED LEAVE SURRENDER SALARY (ACCUMULATED) 224 DAYS (7MONTHS & 14 DAYS) RS.833563.00 2).UN EARNED LEAVE ON PERSONAL AFFAIRS SALARY 90DAYS (3 MONTHS)(PAID-TAX PAID) RS.334914.00-63965.00TAX PAID) RS. 270949.00 --------------------- TOTAL RS. 1104512.00 --------------------- 3 ),G PF- FINAL CLOSER RS. 629445.00 4 ).COMMUTED VALUE OF PENSION RS. 1003014.00 5).DCRG RS. 1000000.00 6). MARCH, APRIL, MAY AND JUNE SALARY 2013 RS. 436026.00 7) 4 MONTHS PENSION ARREARS (JUNE TO SEPTEMBER) ( RS. 215156 ) RS. 215156.00 GRAND TOTAL RS.5163888.00 6 ITA NO.787/CHNY/2018 THE ABOVE GRAND TOTAL AMOUNT RS. 5163888.00 RECEIVED AS SALARY, PENSION ARREARS, SONS GIFTS AND RETIREMENT BENEFITS CREDITED IN TO M) ACCOUNT AT STATE BANK OR INDIA - PONNCRI.AND INDIAN BANK-REDHILLS(SB A/C) THE CREDITED AMOUNTS ARE WITHDRAWN AND CREDITED IN TO MY ACCOUNT AT INDIAN BANK. RED HILLS BRANCH.(SB A/C) AND ALL THE TRANSACTION THAT I HAVE BEEN MADE FROM INDIAN BANK -RED HILLS BRANCH ITSELF. THE ASSESSEE HAS ALSO SUBMITTED EVIDENCE FOR HAVING RECEIVED COMMUTED PENSION AMOUNTING TO RS.10,03,014/- BEING MEMO RECEIVED BY DISTRICT TREASURY, TIRUVALLUR T.S.NO.30878, L.DIS 12561/13/G1 AND LETTER NO.P11/11109748/1/PPO NO.R1109748/ EDG ISSUED BY THE OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL (A&E), TAMILNADU, CHENNAI. THE ASSESSEE HAS ALSO PRODUCED THE DETAILS OF THE AMOUNT RECEIVED FROM GPF AMOUNTING TO RS.6,29,445/- AS EVIDENT FROM THE LETTER FROM THE OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL, TAMILNADU DATED 29/07/13, NO. GPF/1/F.W.153/2013/C5-195/2013-14/DC-206/1236.THE ASSESSEE HAS ALSO PRODUCED EVIDENCE FOR THE RECEIPT OF RETIREMENT GRATUITY AMOUNTING TO RS.10 LAKHS BY WAY OF LETTER FROM THE OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL, TAMILNADU DATED 04/09/13, NO.PR.AG(A&E)/ PEN/P11/11109748/1/R1109748. THE ASSESSEE HAS ALSO PRODUCED EVIDENCE FOR THE RECEIPT OF PENSION ARREARS AMOUNTING TO RS.2,15,156/- BEING THE XEROX COPY OF THE LEDGER OF SUB-TREASURY OFFICER, PONNERI. THE ASSESSEE HAS ALSO PRODUCED THE EVIDENCE FOR THE RECEIPT OF RS.8,33,563/- BEING EARNED LEAVE 7 ITA NO.787/CHNY/2018 ENCASEMENT BY WAY OF LETTER FROM THE PRINCIPAL OF ULAGANATHA NARAYANASAMI GOVT. ARTS COLLEGE PONNERI DATED 04.07.2013, NO.838/A1/2012. CONSIDERING THESE FACTS, AS CLAIMED BY THE ASSESSEE, IT CAN BE SAFELY PRESUMED THAT THE SOURCES OF FUNDS OF THE ASSESSEE ARE THE ASSESSEES RETIREMENT BENEFITS. FURTHER FROM THE RECORDS IT IS ALSO APPARENT THAT THE ASSESSEE IS NOT CARRYING OUT ANY OTHER ACTIVITY EARNING INCOME. THERE IS ALSO NO FINDING BY THE LD.REVENUE AUTHORITIES THAT THE ASSESSEE HAD MADE ANY OTHER INVESTMENTS FROM THE SOURCE OF FUND MENTIONED HEREIN ABOVE. FURTHER IT WOULD BE WEIRD TO PRESUME THAT THE ASSESSEE WOULD HAVE SQUANDERED AWAY HIS HARD EARNED RETIREMENT BENEFITS LEAVING NO TRACE OF IT AND THE SUBSEQUENT DEPOSIT IN THE BANK ACCOUNT IS HIS UNDISCLOSED INCOME. MOREOVER THE PERSONS EXAMINED BY THE LD.AO HAVE ALSO CONFIRMED THAT THE ASSESSEE HAD EXTENDED LOAN BY WAY OF CHEQUE WHICH WAS SUBSEQUENTLY RETURNED BY CASH IN PIECE MEAL. IN THIS SITUATION, WE ARE OF THE VIEW THAT IT WOULD BE TOO HARSH ON THE PART OF THE REVENUE TO MAKE ADDITION IN THE HANDS OF THE ASSESSEE FOR AN AMOUNT OF RS.31,47,735/- TOWARDS UNEXPLAINED INCOME INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. THEREFORE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF RS.31,47,735/- MADE IN THE HANDS OF THE ASSESSEE U/S.68 OF THE ACT TOWARDS 8 ITA NO.787/CHNY/2018 UNEXPLAINED CASH CREDIT, BECAUSE WE DO NOT FIND ANY REASON TO DISBELIEVE THE DOCUMENTS MENTIONED HEREINABOVE FURNISHED BEFORE US BY THE ASSESSEE, WHO IS A RETIRED PROFESSOR FROM GOVT. COLLEGE AND FURTHER HARASSING THE ASSESSEE IN THE PRETEXT OF VERIFYING THE DOCUMENTS WILL ONLY LEAD TO FUTILE EXERCISE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 21 ST JANUARY, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 21 ST JANUARY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) /ACCOUNTANT MEMBER