Shri Subhash Chand Verma, Bhopal V. The ITO Ward 2(2), Bhopal

ITA 80/IND/2014

• Counselvise Citation: 8022714 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Gift; Business income
• Section: 80C; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 80/IND/2014 A.Y. : 2008-09 SHRI SUBHASH CHAND VERMA, ITO, WARD 2(2), E-102, PATEL NAGAR, VS BHOPAL RAISEN ROAD, BHOPAL APPELLANT RESPONDENT PAN NO. ADHPV3082D APPELLANT BY : SHRI RAJESH MEHTA, C. A. RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 02 . 0 7 .201 5 DATE OF PRONOUNCEMENT : 17 . 0 8 .201 5 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-I, BHOPAL, DATED 17.12.2013 FOR THE ASSE SSMENT YEAR 2008-09. -: 2: - 2 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER. 3. IN THIS CASE, THE ASSESSEE IS AN INDIVIDUAL AND DER IVES INCOME FROM LIC COMMISSION. THE ASSESSEE FILED THE RETURN FOR ASSESSMENT YEAR 2008-09 ON 18.8.2008 DECLARING INCO ME OF RS. 1,16,322/-. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS DEPOSITED THE AMOUNT OF RS. 12,06,000/- IN CASH WITH ICICI BANK, BHOPAL, DURING THE PREVIOUS RELEVANT TO ASSESSMENT YEAR UNDER CONSIDER ATION. THE ASSESSEE HAS NEVER APPEARED BEFORE AO, THEREFORE, T HE ASSESSMENT WAS COMPLETED U/S 144 BY MAKING THE ADDI TION OF RS. 12.06 LAKHS ON ACCOUNT OF UNEXPLAINED CASH DEPO SIT IN THE BANK ACCOUNT. 4. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL. THE LD. CIT(A) HAS DELET ED THE ADDITION OF RS. 3.30 LACS AND RS. 8.76 LACS WAS CON FIRMED BY OBSERVING AS UNDER :- 9. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. THE APPELLANT HAD SHOWN TOTAL BUSINESS INCOME -: 3: - 3 DURING THE YEAR UNDER CONSIDERATION OF RS. 1,50,250/- AND HAD MADE INVESTMENT U/S 80C OF RS.33,932/- AND, THUS, HE LEFT WITH RS. 1,16,322/- ONLY. THUS, AFTER MEETING THE HOUSEHOLD EXPENSES FOR THE YEAR, THERE WAS NO SCOPE WITH THE APPELLANT TO MAKE ANY SAVINGS OUT OF HIS BUSINESS INCOME. IT MAY BE NOTED THAT OUT OF TOTAL DEPOSIT OF RS. 12,06,000/-, THE LD. AO AFTER EXAMINING THE FACTS OF THE CASE FOUND THE SOURCE OF RS.3,30,000/-, I.E. RS.2,50,000/- RECEIVED AS GIFT FROM HIS FATHER AND RS.80,000/- OUT OF KCC LOAN TAKEN BY THE APPELLANT, AS EXPLAINED. THEREFORE, THE ADDITION TO THE EXTENT OF RS.3,30,000/- IS DELETED. AS REGARDS THE BALANCE AMOUNT OF RS.8,76,000/- (RS. 12,06,000 - RS.3,30,000), THE AO AFTER EXAMINING THE SUBMISSION OF THE APPELLANT FOUND THAT THE APPELLANT COULD NOT -: 4: - 4 SUBSTANTIATE HIS CLAIM REGARDING SOURCE OF CASH DEPOSITED TO THE EXTENT OF RS.8,76,000/- IN HIS BANK ACCOUNT. THE APPELLANT CONTENDED THAT HE HAD RECEIVED RS.5,00,000/- FROM HIS FATHER OUT OF ADVANCE RECEIVED BY HIM AGAINST SALE PROCEEDS OF THE HOUSE. ON PERUSAL OF COPY OF SALE DEED FOR THE SAID HOUSE, IT IS NOTICED THAT THE APPELLANTS FATHER SOLD THE HOUSE TO SMT. RASHIDA BEGUM FOR A CONSIDERATION OF RS.25,00,000/- VIDE SALE DEED DATED 29.04.2008 REGISTERED, WHICH WAS MUCH AFTER THE DATE ON WHICH THE APPELLANT HAD DEPOSITED THE CASH IN HIS BANK ACCOUNT ON 27.11.2007. THOUGH IN THE SALE DEED, IT IS MENTIONED THAT RS.5,00,000/- WAS PAID IN CASH EARLIER AND A CHEQUE OF RS.20,00,000/- DATED 21.04.2008 WAS PAID, BUT THE APPELLANT HAD NOT ADDUCED ANY COGENT EVIDENCE IN THE FORM OF AGREEMENT TO SALE ENTERED EARLIER FOR RECEIPT OF RS.5,00,000/- BY HIS FATHER ON OR BEFORE 27.11.2007. FURTHER, -: 5: - 5 IT IS NOTICED THAT THE APPELLANTS FATHER WAS MAINTAINING REGULAR BANK ACCOUNT AND HE HAD SUBSEQUENTLY GIVEN A GIFT OF RS. 2,50,000/- TO THE APPELLANT IN JANUARY, 2008 AND THIS TRANSACTION WAS NOT ROUTED THROUGH BANK AND, THUS, THE EXPLANATION OF THE APPELLANT WAS NOT CONVINCING AND THE AO WAS JUSTIFIED IN HOLDING THAT THE APPELLANT FAILED TO SATISFACTORILY EXPLAIN THE SOURCE OF RS.5,00,000/- DEPOSITED IN HIS BANK ACCOUNT. SIMILARLY, IN REGARD TO THE AMOUNT OF RS.80,000/- CLAIMED TO BE RECEIVED FROM SHRI SURESH VERMA, RS.80,000/- FROM SHRI MANMOHAN VERMA AND RS. 1,14,000/- FROM SHRI RAMESH VERMA, BROTHERS OF THE APPELLANT, IT IS NOTICED THAT THEY HAD WITHDRAWN THE KCC LOAN ON 08.06.2007, WHEREAS THE APPELLANT HAD SHOWN DEPOSIT IN THE BANK ACCOUNT ON 03.10.2007 I.E. AFTER A PERIOD OF FOUR MONTHS. THUS, THE APPELLANT FAILED TO ESTABLISH ANY NEXUS BETWEEN THE AMOUNTS WITHDRAWN BY HIS -: 6: - 6 BROTHERS ON 08.06.2007 AND THE CASH DEPOSITED BY THE APPELLANT IN HIS BANK ACCOUNT ON 03.10.2007. HENCE, THE APPELLANT FAILED TO SATISFACTORILY EXPLAIN THE SOURCE OF THESE AMOUNTS IN CASH IN HIS BANK ACCOUNT. THE APPELLANT TRIED TO EXPLAIN THE BALANCE AMOUNT OF CASH FROM HIS OWN SAVINGS AND SAVINGS OF HIS WIFE BUT HAD NOT ADDUCED ANY COGENT EVIDENCE TO PROVE THAT HE AND HIS WIFE HAD SAVINGS FROM HIS DECLARED INCOME. AS MENTIONED ABOVE, THE APPELLANTS NET INCOME DURING THE YEAR AFTER MAKING THE INVESTMENT U/S 80C WAS ONLY RS. 1,16,322/-, WHICH WAS BARELY SUFFICIENT TO MEET HIS HOUSEHOLD EXPENSES AND THERE WAS NO SCOPE FOR HAVING SAVINGS TO MAKE DEPOSITS IN CASH IN HIS BANK ACCOUNT. THUS, FROM THE ABOVE DISCUSSION IT EMERGES THAT THE APPELLANT FAILED TO SATISFACTORILY EXPLAIN THE SOURCE OF CASH DEPOSITED IN HIS BANK ACCOUNT TO THE EXTENT OF RS.8,76,000/- WITH COGENT AND UNIMPEACHABLE -: 7: - 7 EVIDENCE. HENCE, THE AO WAS JUSTIFIED TO MAKE ADDITION TO THE EXTENT OF RS. 8,76,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITED BY THE APPELLANT IN HIS BANK ACCOUNT. THEREFORE, THE ADDITION TO THE EXTENT OF RS. 8,76.000/- IS CONFIRMED. IN THE RESULT, THE APPELLANT GETS A RELIEF OF RS. 3,30,000/- IN THESE GROUNDS OF APPEAL. 5. THE ASSESSEE IS IN APPEAL FOR ADDITION OF RS. 8.76 LACS. 6. DURING THE COURSE OF HEARING, THE LD. SENIOR D.R. SUBMITTED BEFORE ME THAT THE ASSESSEE HAS RECEIVED A GIFT OF RS. 5 LACS FROM HIS FATHER OUT OF SALE PROCEEDS OF HOUSE SITUATED AT HOUSE NO. 514, NEAR MASJID KABITWALI, B EHIND KOTWALI, CITY BHOPAL, SHOWN TO SMT. RASHIDA. THE SA LE DEED REGISTERED BEFORE REGISTRAR AND WHEREIN IT HAS BEEN MENTIONED THAT RS. 5 LACS WAS GIVEN IN CASH BY SMT. RASHIDA BEGUM ON 20.11.2007 TO LALIT VERMA, FATHER OF THE ASSESSEE. SINCE THE FATHER OF THE ASSESSEE IS AGED AND HE DID NOT WANT TO PURCHASE THE PROPERTY IN HIS NAME, HE HAS GIFTED RS.5 LACS T O HIS SON -: 8: - 8 AND ASSESSEE AND HIS BROTHER HAS PURCHASED TWO PROP ERTIES AND AMOUNT OF PROPERTY WAS DEPOSITED BY THE ASSESSE E IN HIS BANK ACCOUNT. THEREFORE, THE ADDITION MAY BE DELETE D. 7. IN RESPECT OF RS. 80,000/-, THE ASSESSEE SUBMITTED THAT HE HAS RECEIVED THIS AMOUNT FROM HIS BROTHER SHRI S URESH VERMA AND SIMILARLY, HE HAS ALSO RECEIVED RS. 80000 /- FROM HIS BROTHER MOHAN VERMA. RS. 1.14 LACS FROM RAMESH VERMA, HIS BROTHER AND RS. 48,000/- FROM HIS OWN HOUSE FRO M SAVING AND SAVING OF THE WIFE. THEREFORE, THE WHOLE ADDITI ON MAY BE DELETED. 8. ON THE OTHER HAND, LD. SENIOR D.R. RELIED UPON THE ORDER OF THE CIT(A) AND HE ALSO RELIED UPON THE DEC ISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. P.MOHA NAKALA, (2007) 291 ITR 278 ( S.C.). 9. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ADDITION OF RS. 5 LACS WAS MADE BY THE ASSESSIN G OFFICER AND LD. CIT(A). IT IS THE CONTENTION OF THE ASSESSE E THAT THE ADDITION OF RS. 5 LACS WAS RECEIVED FROM ONE SMT. R ASHIDA BEGUM, WHO HAS PAID CASH TO ASSESSEES FATHER AND T HAT -: 9: - 9 MONEY WAS GIVEN TO THE ASSESSEE AND THE ASSESSEE HA S DEPOSITED THIS MONEY AND HIS MONEY WAS DEPOSITED IN THE BANK AND FROM THIS BANK ACCOUNT, THE ASSESSEE HAS PURCHASED THIS PROPERTY. THE ASSESSEE HAS ALSO GIVE N AN AFFIDAVIT. MOREOVER, THE ASSESSEE HAS ALSO GIVEN A COPY OF TWO PURCHASE REGISTRY. THE ASSESSEE HAS GIVEN THE DOCUM ENTARY EVIDENCE TO SHOW THAT FATHER OF THE ASSESSEE SHRI L ALIT RAM VERMA HAS RECEIVED RS. 5 LACS IN CASH FROM SMT. RAS HIDA BEGUM AND THE SAME AMOUNT WAS GIVEN TO THE ASSESSEE AND, THEREAFTER, THE AMOUNT WAS GIVEN TO THE ASSESSEE. T HEREFORE, I AM OF THE OPINION THAT THE ASSESSEE HAS FULLY EXPLA INED THE SOURCE OF RS. 5 LACS DEPOSITED IN HIS BANK ACCOUNT. THEREFORE, I DELETE THE PENALTY. 10. IN RESPECT OF AMOUNT OF RS. 80,000/- RECEIVED FROM SHRI SURESH VERMA AND RS. 80,000/- FROM MANMOHAN VE RMA AND RS. 1.14 LACS FROM SURESH VERMA, I AM OF THE VI EW THAT THEY HAVE WITHDRAWN THIS AMOUNT FOR K.C.C.LOAN ON 8.6.2007, WHEREAS THEY HAVE DEPOSITED THIS MONEY IN THE BANK ACCOUNT ON 3.10.2007, AFTER A PERIOD OF FOUR M ONTHS. THEREFORE, I AM OF THE OPINION THAT THE ASSESSEE HA S NOT -: 10: - 10 SATISFACTORILY EXPLAIN IN RESPECT OF SUCH DEPOSITS. THEREFORE, I CONFIRM THE SAME. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 17 TH AUGUST, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 17 TH AUGUST, 2015. CPU*