Shatilal Meghraj Kothari, CHENNAI V. ACIT, CHENNAI

ITA 812/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5997 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P UTTAMCHAND JAIN
• Keywords: Source of fund
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , !, # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ ITA NO.812/MDS/2016 ( )( / ASSESSMENT YEAR : 2009-10 SHRI SHANTILAL MEGHRAJ KOTHARI, NO.664, T.H. ROAD, TONDIARPET, CHENNAI - 600 081. PAN : AADPK 8673 Q V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE VII, NEW JURISDICTION: ACIT, NON- CORPORATE CIRCLE-6, CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI P. UTTAMCHAND JAIN, CA -.+, / 0 / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 1 / 2# / DATE OF HEARING : 04.10.2017 3 ) / 2# / DATE OF PRONOUNCEMENT : 17.10.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL WAS DISMISSED EARLIER BY THIS TRIBUN AL BY ORDER DATED 27.07.2016. HOWEVER, THE ASSESSEE FILED A MI SCELLANEOUS PETITION IN M.P. NO.77/MDS/2017. BY AN ORDER DATED 28.07.2017, THE ORDER OF THIS TRIBUNAL DATED 27.07.2016 WAS REC ALLED AND THE APPEAL WAS RESTORED ON THE FILE. ACCORDINGLY, THE APPEAL WAS POSTED FOR FINAL DISPOSAL. 2 I.T.A. NO.812/MDS/16 2. THERE WAS A DELAY OF 4 DAYS IN FILING THIS APPEA L BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD. REPRESENTATIVE FOR TH E ASSESSEE AND THE LD. D.R. WE FIND THAT THERE WAS SUFFICIENT CAU SE FOR NOT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. 3. SHRI P. UTTAMCHAND JAIN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERATION IS ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTIO N 68 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDI NG TO THE LD. REPRESENTATIVE, THE ASSESSEE OFFERED AGRICULTURAL I NCOME TO THE EXTENT OF ` 3,00,000/-. THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE HAS DEPOSITED A SUM OF ` 9,50,000/- IN UNION BANK OF INDIA. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THA T THE CASH DEPOSIT WAS FROM THE REPAYMENT OF LOAN BY SUNDRY DE BTORS. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE CIT(APPEA LS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THE GROUND TH AT THE PROMISSORY NOTE AND EVIDENCE IN SUPPORT OF THE CLAIM WERE NOT FILED. ACCORDING TO THE LD. REPRESENTATIVE, AN OPPORTUNITY MAY BE GI VEN TO THE 3 I.T.A. NO.812/MDS/16 ASSESSEE TO PRODUCE EVIDENCE BEFORE THE ASSESSING O FFICER IN SUPPORT OF THE REPAYMENT OF LOAN BY THE DEBTORS. 4. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE COULD NOT FURNISH ANY EVIDENCE WITH REGARD TO MONEY LENDI NG BUSINESS EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE C IT(APPEALS). ACCORDING TO THE LD. D.R., THE ASSESSEE SIMPLY CLAI MED BEFORE THE ASSESSING OFFICER THAT BANK DEPOSIT WAS MADE FROM A ND OUT OF THE REPAYMENT OF LOAN BY THE RESPECTIVE DEBTORS. COPIE S OF PRONOTE AND OTHER RELEVANT MATERIALS WERE NOT FILED BEFORE ANY OF THE AUTHORITIES BELOW. THEREFORE, ACCORDING TO THE LD. D.R., THE C IT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICE R. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE ASSESSING OFFICER IT APPEARS THAT THE ASSESS EE HAS DEPOSITED A SUM OF ` 19,00,000/- IN SAVINGS BANK ACCOUNT. THE ASSESSEE NOW CLAIMS THAT THE AMOUNT WAS DEPOSITED FROM THE MONEY COLLECTED FROM THE DEBTORS. THE ASSESSEE PLEADS FOR AN OPPOR TUNITY TO PRODUCE NECESSARY MATERIAL BEFORE THE ASSESSING OFF ICER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIVING O NE MORE 4 I.T.A. NO.812/MDS/16 OPPORTUNITY TO THE ASSESSEE MAY NOT PREJUDICE TO TH E INTERESTS OF THE REVENUE. IN ANY CASE, GIVING ONE MORE OPPORTUNITY WOULD CERTAINLY PROMOTE THE CAUSE OF JUSTICE, THEREFORE, THERE IS N OTHING WRONG IN GIVING ONE MORE OPPORTUNITY TO PRODUCE NECESSARY MA TERIAL BEFORE THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE IN RESPECT OF THE A DDITION MADE UNDER SECTION 68 OF THE ACT AND THE MATTER IS REMIT TED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFIC ER SHALL RE- EXAMINE THE MATTER ON THE BASIS OF THE MATERIAL THA T MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ADDITION OF ` 3,00,000/- TOWARDS AGRICULTURAL INCOME. 7. WE HAVE HEARD BOTH, THE LD. REPRESENTATIVE FOR T HE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE. THE ASSESS EE CLAIMED THAT HE OWNS 7.87 ACRES OF LAND AT PAZHAIYANUR VILL AGE, MADHURANTHAKAM TALUKA AND KANCHEEPURAM DISTRICT. T HE ASSESSEE ALSO CLAIMS THAT THE AGRICULTURAL LAND WAS ACQUIRED DURING THE EARLIER ASSESSMENT YEAR. THE ASSESSEE CLAIMED BEFORE THE LOWER AUTHORITIES THAT THE LAND WAS LEASED OUT TO O NE SHRI BALU FOR 5 I.T.A. NO.812/MDS/16 CULTIVATION AND RECEIVED LEASE RENTAL. THE CIT(APP EALS) FOUND THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR EARN ING THE AGRICULTURAL INCOME. THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT CULTIVATION OF LAND CAN BE ASCERTAINED FROM THE ADA NGAL EXTRACT WHICH IS OTHERWISE KNOWN AS VILLAGE ACCOUNT NO.2 MA INTAINED BY THE VILLAGE ADMINISTRATIVE OFFICER. EVERY VILLAGE ADMINISTRATIVE OFFICER IS EXPECTED TO TAKE CULTIVATION ACCOUNT IN EVERY SIX MONTHS. IF THE ASSESSEE PRODUCES COPY OF THE VILLAGE ACCOUN T NO.2 OTHERWISE KNOWN AS ADANGAL EXTRACT, IT WOULD DEFINI TELY ESTABLISH THE CULTIVATION. THEREFORE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE MA TTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RE-EXAMINE THE MATTER ON THE BASIS OF THE ADA NGAL EXTRACT THAT MAY BE PRODUCED BY THE ASSESSEE AND THEREAFTER DECI DE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASO NABLE OPPORTUNITY TO THE ASSESSEE. 8. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO THE ADDITION OF ` 20,83,603/- SAID TO BE RECEIVED FROM THE ESTATE OF ASSESSEES MOTHER. 6 I.T.A. NO.812/MDS/16 9. SHRI P. UTTAMCHAND, THE LD. REPRESENTATIVE FOR T HE ASSESSEE, SUBMITTED THAT THE ASSESSEE RECEIVED A SUM OF ` 20,83,603/- FROM THE ESTATE OF HIS MOTHER MANKAWAR KOTHARI, WHICH WA S CREDITED TO THE CAPITAL ACCOUNT DURING THE YEAR UNDER CONSIDERA TION. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEES MOTHER WA S ASSESSED TO INCOME-TAX REGULARLY. THE ASSESSING OFFICER HAS NO T DISPUTED THE FACT THAT THE ASSESSEE IS THE LEGAL HEIR AND THEREF ORE, HE CANNOT DISPUTE THE SOURCE OF FUNDS DEPOSITED IN THE CAPITA L ACCOUNT. ACCORDING TO THE LD. REPRESENTATIVE, MERELY BECAUSE THE ASSESSEES MOTHER DID NOT MAINTAIN THE BOOKS OF ACCOUNT, THAT CANNOT BE A REASON TO DISALLOW THE CLAIM OF THE ASSESSEE. 10. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD . DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THERE I S NO EVIDENCE TO SHOW THAT THE ASSESSEES MOTHER POSSESSED ` 20,83,603/- AT THE TIME OF HER DEATH. IN THE ABSENCE OF ANY EVIDENCE TO ESTABLISH THE SOURCE OF FUNDS RECEIVED BY THE ASSESSEE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. 7 I.T.A. NO.812/MDS/16 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT A SUM OF ` 20,83,603/- WAS INHERITED FROM HIS MOTHERS ESTATE AND THE SAME WAS CREDITED TO CAPITAL ACCOUNT . THE ASSESSING OFFICER APPEARS TO HAVE FOUND THAT THE AS SESSEES MOTHER WAS NOT HAVING SUFFICIENT CASH BALANCE AS ON 31.03.2008. MOREOVER, NO SUFFICIENT CASH BALANCE WAS AVAILABLE IN THE BANK ACCOUNT. THEREFORE, THE ASSESSING OFFICER CONCLUDE D THAT THE ASSESSEE HAS NOT ESTABLISHED THE SOURCE FOR CAPITAL ADDITION TO THE EXTENT OF ` 20,83,603/-. THE FACT REMAINS THAT THE ASSESSEE IS A LEGAL HEIR OF HIS MOTHER. THEREFORE, GIVING ONE MO RE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH THE AVAILABILITY OF FUNDS / ESTATE WITH HIS MOTHER WOULD NOT PREJUDICE TO THE INTERESTS OF REVE NUE IN ANY WAY. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIV ING ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE NECESSARY EV IDENCE WITH REGARD TO ESTATE OF ASSESSEES MOTHER WOULD PROMOTE THE CAUSE OF JUSTICE. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHO RITIES BELOW ARE SET ASIDE AND THE ISSUE OF ADDITION TO THE CAPITAL ACCO UNT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RE-EXAMINE THE MATTER IN THE LIGHT OF THE MAT ERIAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISS UE AFRESH IN 8 I.T.A. NO.812/MDS/16 ACCORDANCE WITH, AFTER GIVING A REASONABLE OPPORTUN ITY TO THE ASSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 17 TH OCTOBER, 2017 AT CHENNAI. SD/- SD/- ( ! ) ( . . . ) (SANJAY ARORA) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 17 TH OCTOBER, 2017. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.