Shubhalaxmi D Huilgol, Gadag V. ITO, Gadag

ITA 817/BANG/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1522 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SHEETHAL
• Keywords: Unexplained investment

Judgement Text

ITA.817/BANG/2014 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER I.T.A NO.817/BANG/2014 (ASSESSMENT YEAR : 2007-08) SMT. SHUBHALAXMI D HUILGOL, BURBURE PLOT, GADAG .. APPELLANT PAN : ADGPH5363Q V. INCOME-TAX OFFICER, WARD -1, GADAG .. RESPONDENT ASSESSEE BY : SMT. SHEETHAL, ADVOCATE REVENUE BY : SHRI. SUNIL KUMAR AGARWALA HEARD ON : 03.11.2015 PRONOUNCED ON : 18.11.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY ASSESSEE SHE HAS ALTOGETHE R RAISED FIVE GROUNDS. THESE GROUNDS, EXCEPT FOR GROUNDS 1 AND 5 WHICH ARE GENERAL IN NATURE, RELATE TO ADDITIONS MADE BY THE AO DISBELI EVING THE EXPLANATIONS ITA.817/BANG/2014 PAGE - 2 GIVEN BY THE ASSESSEE ON THE SOURCE FOR ACQUIRING A LAND MEASURING 1 ACRE 25 GUNTAS AT GADAG. 02. FACTS APROPOS ARE THAT ASSESSEE HAD ACQUIRED A PIECE OF LAND AT GADAG FOR A TOTAL COST OF RS.50,79,755/-. SOURCE OF THIS INVESTMENT FURNISHED BY THE ASSESSEE ALONG WITH HER RETURN OF INCOME READ A S UNDER : ITA.817/BANG/2014 PAGE - 3 03. AO VERIFIED EACH OF THE ABOVE SOURCE GIVEN BY T HE ASSESSEE. ON THE FIRST ITEM OF AGRICULTURAL INCOME OF RS.18 LAKHS, A O FOUND THAT THE FAMILY MEMBERS WERE ALTOGETHER HOLDING 52 ACRES OF LAND AT HUILGOL. EXPLANATION OF THE ASSESSEE WAS THAT THE LAND WAS CULTIVATED WI TH CROPS LIKE COTTON, GROUNDNUT, CHILLIES, BENGAL GRAM AND GREEN GRAM. AS SESSEES HUSBAND SHRI. DHEERENDRA B. HUILGOL WAS EXAMINED SINCE HE WAS THE LARGEST HOLDER OF AGRICULTURAL LAND AND ALSO SINCE ASSESSEE HAD RECEI VED SOME OF THE LOANS MENTIONED IN THE TABLE ABOVE THROUGH HIM. AO AFTER VERIFYING THE SUBMISSIONS OF THE ASSESSEE AND ALSO CONSIDERING TH E VILLAGE ACCOUNTANTS CERTIFICATE, CAME TO A CONCLUSION THAT ASSESSEE AND HER FAMILY MEMBERS HAD SUBSTANTIAL AGRICULTURAL HOLDING AND FAMILY OF THE ASSESSEE WAS ONE OF THE RICHEST IN THE AREA. HOWEVER ACCORDING TO HIM, SAV INGS FROM AGRICULTURAL INCOME CLAIMED AT RS.18 LAKHS, IF IT WAS REALLY THE RE, WOULD NOT HAVE BEEN HELD BY THE ASSESSEE IN CASH BUT WOULD HAVE BEEN BA NKED. HE WAS OF THE OPINION THAT ASSESSEES CLAIM THAT THE MONEY WAS KE PT AS SUCH IN THE HOUSE COULD NOT BE BELIEVED. HE ACCEPTED RS.5 LAKHS AS R EASONABLE SAVINGS FROM AGRICULTURE AND THE BALANCE OF RS.13 LAKHS WAS TREA TED AS UNEXPLAINED INVESTMENT FOR THE PURCHASE OF PROPERTY. ITA.817/BANG/2014 PAGE - 4 04. FOR THE LOAN OF RS.7 LAKHS FROM KANAKADAS SHIKS HANA SAMITHI, CLAIMED TO HAVE BEEN RECEIVED BY ASSESSEES HUSBAND , THROUGH CHEQUES FROM THE SAID SAMITHI, ASSESSEE FILED CONFIRMATION LETTER FROM THE PRESIDENT OF KANAKADAS SHIKSHANA SAMITHI. IN THE SAID CONFIR MATION, THE LATTER AFFIRMED THAT HE HAD GIVEN CHEQUES TO DHEERENDRA B. HUILGOL. AO HIMSELF HAS STATED THAT PASSBOOK OF SHRI. B. F. DANDIN, PRE SIDENT OF KANAKADAS SHIKSHANA SAMITHI WAS VERIFIED. HOWEVER, AO WAS OF THE OPINION THAT THE AMOUNT BORROWED BY ASSESSEES HUSBAND FROM SHRI. B. F. DANDIN WAS NOT CONNECTED WITH THE INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY. AS PER THE AO, THERE WAS NO REASON WHY A SSESSEE DID NOT BORROW THE MONEY DIRECTLY FROM SHRI. B. F. DANDIN AND WHY IT WAS ROUTED THROUGH HER HUSBAND. AO ALSO NOTED THAT THERE WAS A TIME G AP OF FOUR MONTHS BETWEEN RECEIPT OF THE MONEY FROM SHRI. DANDIN AND PURCHASE OF THE PROPERTY BY THE ASSESSEE. FORMER WAS IN AUGUST 200 6, WHEREAS THE LATTER WAS IN DECEMBER 2006. HE REFUSED TO BELIEVE THIS V ERSION GIVEN BY THE ASSESSEE AND MADE AN ADDITION OF RS.7 LAKHS AS UNEX PLAINED INVESTMENT. 05. FOR THE LOAN OF RS.3 LAKHS CLAIMED TO HAVE BEEN TAKEN FROM PUNJAB NATIONAL BANK, ASSESSEE FURNISHED COPY OF THE BANK ACCOUNT. SUCH BANK ACCOUNT REFLECTED WITHDRAWALS TOTALLING RS.2,98,000 /- DURING AUGUST AND ITA.817/BANG/2014 PAGE - 5 SEPTEMBER 2005. AO WAS OF THE OPINION THAT DUE TO THE TIME GAP OF ONE YEAR TWO MONTHS BETWEEN WITHDRAWAL AND PURCHASE OF THE PROPERTY, THE SOURCE CLAIMED BY THE ASSESSEE COULD NOT BE ACCEPTE D. HE MADE AN ADDITION OF RS.3 LAKHS AS UNEXPLAINED INVESTMENT IN THE PROP ERTY. 06. FOR THE HAND LOAN OF RS.8 LAKHS CLAIMED TO HAVE BEEN RECEIVED FROM VEERAMMA S. SAJJANAR AND SMT. GIRIJADARI V. SAJJANA R OF KELUR VILLAGE, ASSESSEE FILED CONFIRMATION LETTERS. ASSESSEE ALSO FILED CERTIFICATES FROM VILLAGE ACCOUNTANT WHICH INTER ALIA CONFIRMED THAT THESE PERSONS WERE HAVING AGRICULTURAL LAND MEASURING ABOUT 29 ACRES W HERE THEY WERE GROWING MANGO, BANANA, MAIZE, SUNFLOWER, GROUNDNUT, WHEAT. SHRI. VEERANNA S. SAJJANAR APPEARED BEFORE THE AO ON 18.0 2.2009 AND STATED THAT HE WAS SELLING THE AGRICULTURAL PRODUCE ON THE FIEL D ITSELF AND THE BUYERS HAD NOT GIVEN ANY RECEIPTS. HOWEVER THE AO VIEWED CONF IRMATION OF SHRI. VEERANNA S. SAJJANAR & SMT. GIRIDARI V. SAJJANAR WI TH CALIGINOSITY. ACCORDING TO HIM, THOUGH THE VILLAGE ACCOUNTANT HAD CERTIFIED AN ANNUAL INCOME OF RS.2,75,000/- FOR VEERANNA S. SAJJANAR AN D HIS WIFE, AFTER CONSIDERING THEIR PERSONAL EXPENDITURE THEY WOULD N OT HAVE HAD SUFFICIENT FUNDS WITH THEM TO LEND A SUM OF RS.8 LAKHS TO THE ASSESSEE. FURTHER AS PER THE AO, THESE PERSONS HAD ALSO NOT PRODUCED ANY EVI DENCE FOR SALE OF ITA.817/BANG/2014 PAGE - 6 AGRICULTURAL PRODUCE AND THEIR CLAIM THAT THE MONEY WAS KEPT IN CASH AT THEIR HOME WITHOUT BANKING IT COULD NOT BE BELIEVED . HE CONSIDERED THE SUM OF RS.8,00,000/- AS UNEXPLAINED. 07. VIS-A-VIS HAND LOAN OF RS.5 LAKHS CLAIMED TO H AVE BEEN TAKEN FROM SHIVAPPA H. NEERALGI, SUBMISSION OF THE ASSESSEE WA S THAT BORROWAL WAS BY HER HUSBAND WHO HAD GIVEN IT TO HER. SHIVAPPA WAS ALSO EXAMINED BY THE AO AND IN SUCH STATEMENT HE STATED THAT HE HAD 30 A CRES WHERE COMMERCIAL CROPS WERE CULTIVATED AND EARNED AN INCOME OF RS.4. 5 LAKHS PER ANNUM THEREFROM. HE ALSO STATED THAT THE SALE OF AGRICUL TURAL PRODUCE WAS DONE ON THE FIELD ON SPOT BASIS AND THERE WERE NO RECORDS F OR SALE. AO REFUSED TO BELIEVE THIS ALSO FOR A REASON THAT AFTER MEETING T HE EXPENDITURE OF THE BIG FAMILY THAT THE LENDER HAD, HE WOULD NOT HAVE HAD M UCH CASH WITH HIM FOR GIVING LOANS TO ASSESSEE'S HUSBAND. FURTHER AS PER THE AO IF ASSESSEE NEEDED MONEY SHE WOULD HAVE BORROWED DIRECTLY AND N OT THROUGH HER HUSBAND. HE CONSIDERED RS.5 LAKHS ALSO AS UNEXPLAI NED. 08. FOR THE LOAN OF RS.5 LAKHS CLAIMED TO HAVE BEEN TAKEN FROM ALLASAB H. KADAD, AO EXAMINED THE LATTER. HE STATED THAT HE WAS HOLDING 30 ACRES OF AGRICULTURAL LAND ALONG WITH HIS BROTHER AND WAS EARNING RS.4.5 LAKHS. FURTHER AS PER SHRI. ALLASAB H. KADAD, HE WAS SELLI NG THE PRODUCE ON SPOT IN ITA.817/BANG/2014 PAGE - 7 THE FIELD IN CASH. FOR SIMILAR REASONS AS MENTIONE D IN THE CASE OF SHIVAPPA H. NEERALGI, AO REFUSED TO ACCEPT THE VERSION GIVEN BY THE ASSESSEE AND MADE AN ADDITION OF RS. 5 LAKHS. 09. FOR THE LOAN OF RS.5 LAKHS CLAIMED TO HAVE BEEN TAKEN FROM DEVAPPA G. KADI, THROUGH HER HUSBAND DHEEREENDRA B. HUILGOL , ASSESSEE PRODUCED THE CREDITOR BEFORE THE AO. SAID PERSON STATED THA T HE ALONG WITH HIS BROTHERS WERE HOLDING 38 ACRES OF LAND WITH DIFFERE NT AGRICULTURAL PRODUCE. HIS AGRICULTURAL EARNINGS CAME TO RS.4.5 LAKHS PER ANNUM AND HE HAD NO OTHER SOURCE OF INCOME. AO REFUSED TO ACCEPT THIS ALSO FOR A REASON THAT THE LOANS WERE TAKEN THROUGH ASSESSEE'S HUSBAND FOR NO REASON,WHEN ASSESSEE COULD HAVE DIRECTLY TAKEN THE LOAN. FURTHER ACCORD ING TO HIM, THE CREDITOR WOULD NOT HAVE SO MUCH CASH ACCUMULATED AND KEPT IN HIS HOUSE. HE MADE AN ADDITION OF RS.5 LAKHS ALSO CONSIDERING IT AS UN EXPLAINED INVESTMENT IN THE PROPERTY. 10. IT IS TO BE MENTIONED THAT IN RESPECT OF EACH O F THE ABOVE ADDITION WHERE AGRICULTURAL INCOME WAS CLAIMED BY THE CONCER NED CREDITOR AS THE SOURCE OF HIS INCOME, A RECORD OF RIGHTS OF THE AGR ICULTURAL HOLDINGS AND CERTIFICATE BY THE VILLAGE ACCOUNTANT WERE FILED. 11.AGGRIEVED ASSESSEE MOVED IN APPEAL BEFORE THE CI T (A) AGAINST EACH OF THE ABOVE ADDITION. THE VERY SAME AVERMENTS WHICH WERE MADE BEFORE THE AO WERE REPEATED BEFORE THE CIT (A). CIT (A) AFFIR MED THE ORDER OF AO ITA.817/BANG/2014 PAGE - 8 CONSIDERING THAT ASSESSEE COULD NOT DISCHARGE THE D UTY VESTED ON HER TO ESTABLISH THAT LOANS WERE GENUINE. AS PER THE CIT (A) IN ALMOST ALL THE CASES, RECEIPT OF LOANS WERE IN CASH. CLAIM OF THE ASSESSEE THAT CREDITORS HAD KEPT LARGE AMOUNTS OF MONEY IN THEIR HAND WITHO UT BANKING COULD NOT BE ACCEPTED AND NO EVIDENCE WERE PRODUCED BY THE AS SESSEE REGARDING SALE OF AGRICULTURAL PRODUCE BY THE CREDITORS OR HERSELF . CIT (A) ALSO NOTED THAT ASSESSEE COULD HAVE DIRECTLY LOANED THE SUMS FROM T HE CREDITORS INSTEAD OF INDIRECTLY DOING IT THROUGH HER HUSBAND. 12. NOW BEFORE US, ASSAILING EACH ONE OF THE ADDITI ONS MADE BY THE ASSESSEE AND CONFIRMED BY THE CIT (A), LD.AR SUBMIT TED IDENTITY OF THE CREDITORS, THEIR CREDIT WORTHINESS AND GENUINENESS ALL STOOD ESTABLISHED. CONCERNED PERSONS HAD APPEARED BEFORE THE AO AND CO NFIRMED THE LOANS. CONCERNED PERSONS HAD ALSO PRODUCED PROOF FOR HOLDI NG OF AGRICULTURAL LAND AND INCOME THEREFROM. THEREFORE, ACCORDING TO HER, ASSESSEE HAD DISCHARGED HER ONUS FOR PROVING THE IDENTITY AND CR EDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. 13. CONTINUING HER ARGUMENTS, LD. AR SUBMITTED THAT THE MONEY WAS KEPT IN CASH BY THE CREDITORS, SINCE THERE WAS NO B ANK IN HUILGOL VILLAGE. ACCORDING TO HER ALL THE PERSONS WERE AGRICULTURIS TS AND NOT WELL VERSED WITH BANKING METHODOLOGY. ACCORDING TO HER, IT WAS NORMAL PRACTICE ITA.817/BANG/2014 PAGE - 9 AMONG AGRICULTURISTS IN VILLAGES TO HOLD CASH IN TH EIR HOMES WITHOUT BANKING AND THIS COULD NOT BE A REASON FOR DISBELIE VING THE LOANS OF THE CREDITORS. IN THIS REGARD, RELIANCE WAS PLACED ON THE DECISION OF COORDINATE BENCH IN THE CASE OF SMT. MEENA NAGARAJ NAIK V. DCI T [ITA.324/BANG/2013, DT.11.04.2014]. AS PER THE LD. AR, EVEN THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SMT. P. PA DMAVATHI V. ITO [ITA.NO.414 OF 2009, DT.06.10.2010] HAD HELD THAT O NCE THE MONEY WAS WITH THE ASSESSEE IT WAS NOT THE CONCERN OF THE DEP ARTMENT AS TO WHY IT WAS NOT ACTUALLY DEPOSITED IN THE BANK. AS FOR THE ADD ITION MADE FOR AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE, LD. AR SUBMITTED THAT AO HAD HIMSELF ADMITTED ASSESSEE TO BE THE RICHEST FAR MER IN THE VILLAGE HAVING SUBSTANTIAL AGRICULTURAL HOLDING. KEEPING THE MONE Y IN CASH WAS NOT A PROPER REASON FOR DISBELIEVING THE SOURCE OF ASSESS EE. IN SO FAR AS RS.2,98,000/- WITHDRAWN FROM THE CASH CREDIT ACCOUN T WAS CONCERNED, LD. AR SUBMITTED THAT TIME GAP WAS ONLY A FEW MONTHS AN D AO HAD NOT SHOWN THAT THE MONEY WAS USED ELSEWHERE. 14. PER CONTRA, LD. DR SUBMITTED THAT ASSESSEE COUL D NOT PROVE THE RECEIPT OF AGRICULTURAL INCOME, COULD NOT PRODUCE A NY EVIDENCE TO SHOW THAT SHE, OR HER HUSBAND OR HER SONS HAD SOLD ANY AGRICU LTURAL PRODUCE. AS PER THE LD. DR IT COULD NOT BE BELIEVED THAT ALL THE PE RSONS WERE HOLDING CASH ITA.817/BANG/2014 PAGE - 10 AS SUCH IN THEIR HOUSE WITHOUT BANKING. AS FOR THE RELIANCE PLACED BY THE LD. AR IN THE CASE OF MEENA NAGARAJ NAIK (SUPRA), LD. DR SUBMITTED THAT TIME GAP IN THE SAID CASE WAS ONLY 42 DAYS WHEREAS IN THE CASE OF THE ASSESSEE, CREDITORS WERE HOLDING THE CASH FOR SO MA NY YEARS WHICH WAS UNBELIEVABLE. 15. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. GROUND THROUGH WHICH THE ASSESSEE HAS ASSAILED THE ADDITIO N OF RS.13 LAKHS DISBELIEVING THE CLAIM OF RS.18 LAKHS AS AGRICULTURAL INCOME APPEARS AS GROUND NO.4. NO DOUBT AO HIMSELF HAS ADMITTED THAT ASSESSEE ALONG WITH HER H USBAND AND SONS WERE HOLDING 52 ACRES OF AGRICULTURAL LAND. THERE WAS A CERTIF ICATE FROM VILLAGE ACCOUNTANT ALSO CONFIRMING THE HOLDING OF LAND. ASSESSEE HAD ALSO FILED RECORDS OF EXTRACTS FOR THE AGRICULTURAL LAND. AO HAD DOUBTED THE CLAIM OF THE ASSESSEE FOR A REASON THAT SAVINGS WHICH WERE MADE DURING A PERIOD OF 5-6 YEAR S, IF IT WAS REAL WOULD HAVE BEEN BANKED. ASSESSEE ALSO COULD NOT PRODUCE ANY E VIDENCE FOR SALE OF THE AGRICULTURAL PRODUCE. IN OUR OPINION THE REASONS G IVEN BY THE AO WAS WELL JUSTIFIED. IN THE FIRST PLACE ASSESSEE HERSELF WAS HAVING AN A CCOUNT IN PUNJAB & NATIONAL BANK, GADAG. ASSESSEE'S HUSBAND WAS ALSO HAVING BANK ACCO UNT IN CORPORATION BANK AS WELL AS STATE BANK OF INDIA, GADAG, WHICH FACT HE A FFIRMED IN HIS ANSWER TO QUESTION NO.7 POSED BY THE AO DURING HIS EXAMINATION ON 27.0 2.2009. ASSESSEE'S HUSBAND HAD ADMITTEDLY RECEIVED SOME OF THE LOANS, C LAIMED BY THE ASSESSEE AS A ITA.817/BANG/2014 PAGE - 11 SOURCE, THROUGH CHEQUES. THUS WHEN ASSESSEE AND HE R HUSBAND WERE HAVING BANK ACCOUNTS, IT IS DIFFICULT TO BELIEVE TH AT SAVINGS FROM AGRICULTURAL INCOME WAS KEPT BY THEM IN CASH AS SUCH AT HOME. A S FOR THE DECISION OF COORDINATE BENCH IN THE CASE OF MEENA NAGARAJ NAIK (SUPRA), AS POINTED OUT BY THE LD. DR, PERIOD OF HOLDING OF CASH IN HAND WA S SHORT AND NOT IN YEARS. NO DOUBT, THERE CANNOT BE A SURMISE THAT IT WAS NOT PROBABLE FOR AN ASSESSEE TO RETAIN CASH WITHDRAWN FROM BANK ACCOUNT , WITHOUT UTILIZING THE SAME. HOWEVER, HERE THE EXPLANATION FOR THE SAME W AS NOT WITHDRAWAL FROM THE BANK, BUT EARNINGS FROM AGRICULTURAL INCOM E. IT IS DIFFICULT TO BELIEVE THAT A PERSON WHO WAS HAVING A BANK ACCOUNT WOULD HAVE KEPT AS MUCH AS 18 LAKHS IN CASH IN HER / HIS HOUSE WITHOUT BANKING. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT AO WAS JU STIFIED IN CONSIDERING RS.5 LAKHS AS SAVING FROM AGRICULTURAL INCOME THAT COULD HAVE BEEN KEPT BY THE ASSESSEE. IN OUR OPINION, LOWER AUTHORITIES WE RE JUSTIFIED IN MAKING AN ADDITION OF RS.13 LAKHS. GROUND 4 OF THE ASSESSEE THEREFORE STANDS DISMISSED. 16. GROUND RAISED BY THE ASSESSEE IN RESPECT OF ADD ITION OF RS.2,98,000/- CLAIMED TO HAVE BEEN WITHDRAWN FROM A CASH CREDIT A CCOUNT WITH BANK APPEARS AS GROUND 3. THERE IS NO DISPUTE THAT ASSE SSEE WAS HAVING A CASH CREDIT ACCOUNT AND SHE HAD WITHDRAWN RS.2,98,000/- IN AUGUST AND ITA.817/BANG/2014 PAGE - 12 SEPTEMBER 2005. THE PURCHASE OF THE PROPERTY WAS I N DECEMBER, 2006. GAP WAS ABOUT ONE YEAR AND TWO MONTHS. WHAT WE NOT ICE IS THAT THE DRAWING CLAIMED IS FROM CASH CREDIT ACCOUNT ON WHIC H INTEREST WOULD HAVE BEEN PAID BY THE ASSESSEE. NO MAN WITH REASONABLE PRUDENCE WOULD HAVE TAKEN AN INTEREST BEARING LOAN AND KEPT IT WITH HIM / HER AS CASH WITHOUT UTILISING FOR A PERIOD OF ONE YEAR. THEREFORE, PR EPONDERANCE OF PROBABILITY IS THAT THE AMOUNT OF RS.2.98 LAKHS WITHDRAWN BY TH E ASSESSEE IN AUGUST AND SEPTEMBER 2005 WOULD HAVE BEEN USED BY HER FOR SOME OTHER PURPOSES. THIS CANNOT BE CONSIDERED AS A SURMISE, FOR A SIMPL E REASON THAT ASSESSEE HAD TO PAY INTEREST ON THE CASH CREDIT ACCOUNT. IN SUCH A SITUATION, WE ARE OF THE OPINION THAT LOWER AUTHORITIES WERE JUSTIFIED I N NOT ACCEPTING THE WITHDRAWAL FROM THE CASH CREDIT ACCOUNT, MORE THAN ONE YEAR BACK, AS A SOURCE FOR INVESTMENT IN THE PROPERTY. CASE OF MEE NA NAGARAJ NAIK (SUPRA) OF COORDINATE BENCH WOULD NOT COME TO THE AID OF AS SESSEE SINCE THE DRAWINGS WERE FROM THE CASH CREDIT ACCOUNT AND NOT A SAVINGS ACCOUNT. ACCORDINGLY WE ARE OF THE OPINION THAT LOWER AUTHOR ITIES WERE JUSTIFIED IN MAKING AN ADDITION OF RS.2.98 LAKHS. GROUND 3 OF T HE ASSESSEE STANDS DISMISSED. 17. GROUND TAKEN BY THE ASSESSEE VIS-A-VIS LOANS FR OM KANAKADASA SHIKSHANA SAMITI, VEERANNA S. SAJJANAR AND SMT. GIR IJADARI V. SAJJANAR, ITA.817/BANG/2014 PAGE - 13 SHIVAPPA H. NEERALGI, ALLASAB H. KADAD AND DEVAPPA G. KADI, APPEAR AS GROUND NO.2. OF THESE PERSONS, LOAN FROM KANAKADAS A SHIKSHANA SAMITHI, LOAN FROM SHIVAPPA, LOAN FROM ALLASAB AND LOAN FROM DEVAPPA ARE CLAIMED TO HAVE BEEN TAKEN BY ASSESSEE'S HUSBAND, WHEREAS L OAN FROM VEERANNA S. SAJJANAR AND SMT. GIRIDARI V. SAJJANAR IS CLAIMED T O HAVE BEEN BORROWED DIRECTLY BY THE ASSESSEE. IN ALL THESE CASES OF LO ANS THERE IS NO DISPUTE THAT THE CONCERNED PERSONS HAD APPEARED BEFORE THE AO AN D AFFIRMED THE FACTUM OF GIVING LOANS TO THE ASSESSEE IN CASH. IT IS ALS O NOT DISPUTED THAT ALL THESE PERSONS WERE HAVING SUBSTANTIAL AGRICULTURAL HOLDIN GS AND THEY HAD PRODUCED CERTIFICATES FROM VILLAGE ACCOUNTANT FOR T HE HOLDINGS AS WELL AS THE INCOME. 18. AO DISBELIEVED THE LOAN FROM KANAKADASA SHIKSH ANA SAMITHI FOR A REASON THAT ASSESSEE HERSELF COULD HAVE RAISED THE LOAN AND THE LOANS NEED NOT HAVE BEEN TAKEN THROUGH HER HUSBAND. FURTHER, AS PER THE AO THERE WAS A GAP OF 4 5 MONTHS BETWEEN THE LOAN AND ACQUISIT ION OF THE PROPERTY. WHAT WE NOTE IS THAT THE LOANS FROM KANAKADASA SHIK SHANA SAMITHI WERE TAKEN BY ASSESSEE'S HUSBAND THROUGH CHEQUES OF RS.5 LAKHS AND RS.2 LAKHS AND THIS HAS NOT BEEN DISPUTED BY THE REVENUE. B. F DANIN, PRESIDENT OF KANAKADASA SHIKSHANA SAMITHI HAD CONFIRMED THE LOAN S. GAP BETWEEN AUGUST 2006 AND DECEMBER 2006, WAS NOT SO LARGE TO DISBELIEVE THE ITA.817/BANG/2014 PAGE - 14 VERSION. ASSESSEE'S HUSBAND HAD APPEARED BEFORE TH E AO AND CONFIRMED THAT THE LOAN WAS GIVEN TO HIS WIFE. IN SUCH A SIT UATION. IN OUR OPINION, THE LOAN CLAIMED TO HAVE BEEN TAKEN FROM KANAKADASA SHI KSHANA SAMITHI OUGHT NOT HAVE BEEN DISBELIEVED. 19. HOWEVER, VIS-A-VIS, LOAN OF RS.8 LAKHS CLAIMED TO HAVE BEEN TAKEN FROM VEERANNA SAJJANAR AND GIRIJADARI SAJJANAR OF KELUR VILLAGE, THE AGRICULTURAL INCOME CERTIFIED BY THE VILLAGE ACCOUN TANT WAS ONLY RS.2,75,000/- PER ANNUM. IT IS NOT POSSIBLE TO BEL IEVE THAT AFTER MEETING THE EXPENDITURE OF THEIR FAMILY, VEERANNA SAJJANAR, COU LD SAVE ENOUGH TO GIVE A LOAN OF RS.8 LAKHS TO THE ASSESSEE. SAID PERSONS A LSO COULD NOT SHOW THAT WHY THEY COULD NOT GIVE THE LOAN THROUGH A BANK ACC OUNT. THEIR CLAIM THAT THERE WAS NO BANKING FACILITY IN THE VILLAGE OF KEL UR MIGHT HAVE BEEN CORRECT. HOWEVER, HUILGOL VILLAGE WHERE ASSESSEE L IVED ALSO HAD NO BANKING FACILITY. CLOSEST BANK WAS 10 KMS AWAY, I N GADAG. NEVERTHELESS BOTH ASSESSEE AS WELL AS HUSBAND WERE HAVING BANK A CCOUNTS AT GADAG. THAT GADAG WAS ONLY 10 KM AWAY FROM HUILGOL IS CLEA R FROM THE SUBMISSION MADE BY THE ASSESSEE BEFORE THE CIT (A), APPEARING AT PAGES 17 AND 18 OF CIT (A)'S ORDER. NOBODY CAN CLAIM THAT T HERE SHOULD BE A BANK AT HIS / HER DOOR STEP. AVAILABILITY OF A BANK BRANCH CAN BE ENVISAGED ONLY WITHIN A REASONABLE VICINITY OF THE PLACE OF RESIDE NCE OF A PERSON AND NOT AT HIS DOOR STEP. EVEN IN CITIES, A BANK CAN BE 10 TO 15 KMS AWAY FROM THE RESIDENCE OF AN INDIVIDUAL. IN OUR OPIN ION CLAIM OF CREDITORS ITA.817/BANG/2014 PAGE - 15 THAT THEY DID NOT HAVE ANY BANK ACCOUNT, SINCE THE VILLAGE THEY LIVED VIZ., HUILGOL / KELUR HAD NO BANK ACCOUNT CANNOT BE ACCE PTED, WHEN THERE WERE BANKS AVAILABLE WITHIN A REASONABLE PERIPHERY. IT IS AGAINST THE PRINCIPLE OF PREPONDERANCE OF PROBABILITY THAT HUGE SUMS OF MONE Y WOULD HAVE BEEN KEPT IN CASH BY THEM, OVER A NUMBER OF YEARS AND LO ANED TO THE ASSESSEE IN ONE GO. ASSESSEE MIGHT HAVE BEEN ABLE TO PROVE THE CREDIT WORTHINESS OF THE PARTIES AND IDENTITY OF THE CREDITORS. HOWEVER IN OUR OPINION GENUINENESS OF THE TRANSACTION HAS NOT BEEN PROVED BY THE ASSESSEE. IN SUCH A SITUATION, WE ARE OF THE OPINION THAT LOWER AUTHO RITIES WERE JUSTIFIED IN DISBELIEVING THE VERSION OF LOAN OF RS.8 LAKHS FROM VEERANNA SAJJANAR. 20. COMING TO THE LOAN OF RS.5 LAKHS ALLEGED TO HAV E BEEN TAKEN FROM SHIVANNA, THE SAID TRANSACTION WAS ALSO CLAIMED TO BE IN CASH. NO DOUBT HERE ALSO, THE VILLAGE ACCOUNTANT HAD CERTIFIED THE HOLDING OF THE CONCERNED SHIVANNA TO BE ABOUT 30 ACRES. AS MENTIONED BY US, SHIVANNA WAS ALSO A RESIDENT OF HUILGOL VILLAGE. TO BELIEVE THAT HE HA D SAVED AND KEPT A SUM OF RS.5 LAKHS IN CASH AT HIS RESIDENCE OVER VARIOUS YE ARS AND LOANED IT IN CASH TO THE ASSESSEE IS DIFFICULT TO BELIEVE. IT IS NOT A SURMISE BUT AGAINST THE PRINCIPLE OF PREPONDERANCE OF PROBABILITY . JUST B ECAUSE THE CREDITOR HAD ITA.817/BANG/2014 PAGE - 16 PRODUCED EVIDENCE IN THE NATURE OF AGRICULTURAL HOL DING OR INCOME OF RS.4.5 LAKHS PER YEAR WOULD NOT BE SUFFICIENT TO COME TO A CONCLUSION THAT THEY HAD FUNDS WITH THEM TO GIVE A LOAN TO THE ASSESEE IN CA SH. HERE ALSO, IN OUR OPINION, GENUINENESS OF THE LOAN HAS NOT BEEN PROVE D BY THE ASSESSEE. 21. COMING TO THE LOAN OF RS.5 LAKHS CLAIMED TO HAV E BEEN TAKEN FROM ALLASAB, WE FIND THAT THE CONTENTIONS WERE VERY SIM ILAR TO THAT OF THE LOAN CLAIMED TO HAVE BEEN TAKEN FROM SHIVAPPA. TRANSACT IONS WERE CLAIMED TO HAVE BEEN IN CASH. THERE IS NO EVIDENCE FOR SALE O F AGRICULTURAL PRODUCE. MONEY CLAIMED TO HAVE BEEN ACCUMULATED WAS NEVER BA NKED. CLAIM THAT THERE WAS NO BANKING FACILITY IN HUILGOL WAS ONLY A CAMOUFLAGE SINCE ADMITTEDLY THERE WAS A BANK FACILITY IN GADAG WHICH WAS ONLY TEN KMS AWAY. IN THIS CASE ALSO ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF LOAN. 22. COMING TO THE LOAN OF RS.5 LAKHS TAKEN FROM DEV APPA, SITUATION IS ALMOST THE VERY SAME. CLAIM IS THAT LOAN WAS TAKEN IN CASH AND THE CREDITOR HAD SAVED THE MONEY OUT OF AGRICULTURAL INCOME OVER VARIOUS YEARS. IN OUR OPINION, GENUINENESS OF THE TRANSACTION HAS NOT BEE N PROVED HERE ALSO. 23. IN ALL THE ABOVE CASES EXCEPT FOR LOAN OF RS.7 LAKHS CLAIMED TO HAVE BEEN TAKEN FROM KANAKADASA SHIKSHANA SAMITHI, WHAT WE FIND IS THAT ASSESSEE IS SIMPLY RELYING ON A CERTIFICATE FROM VI LLAGE ACCOUNTANT FOR THE ITA.817/BANG/2014 PAGE - 17 SOURCE OF THE SOURCE OF THE CREDITORS. IT IS NO DO UBT TRUE THAT SOURCE OF THE SOURCE IS NOT REQUIRED TO BE PROVED BY AN ASSESSEE WHILE JUSTIFYING A CREDIT. HOWEVER, WHEN THE CLAIM IS THAT LARGE AMOUNT OF LOA NS WERE RECEIVED IN CASH FROM VARIOUS CREDITORS, WHO DESPITE HAVING HUG E AGRICULTURAL INCOME HAD NEVER BANKED SUCH MONEY IN BANK IS FAR FETCHED AND UNBELIEVABLE. ESPECIALLY SO SINCE BANKS WERE AVAILABLE WITHIN A S HORT RADIUS OF 10 15 KMS FROM THE RESIDENCE OF CONCERNED CREDITORS. IN OUR OPINION, DECISION OF MEENA NAGARAJ NAIK (SUPRA) RELIED ON BY THE LD. AR WOULD NOT COME TO ASSESSEES HELP. AS FOR THE JUDGMENT OF HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF P. PADMAVATHI (SUPRA), LD. AR DID NO T PLACE A COPY OF THIS UNREPORTED JUDGMENT. NEVERTHELESS WE HAVE GONE THR OUGH THIS JUDGMENT ALSO AND THE FACT SITUATION THEREIN WAS ENTIRELY DI FFERENT AND IT DEALT WITH AN ISSUE WHERE DRAWINGS OF ASSESSEES OWN MONEY FROM B ANK WAS KEPT WITH HERSELF. WE THEREFORE HAVE NO HESITATION IN CONFIR MING THE ORDER OF LOWER AUTHORITIES, IN SO FAR AS IT RELATES TO THE ADDITIO N OF RS.8 LAKHS CLAIMED TO HAVE BEEN TAKEN FROM VEERANNA S. SAJJANAR AND SMT. GIRIJADARI V. SAJJANAR, ADDITION OF RS.5 LAKHS CLAIMED TO HAVE BEEN RECEIVE D FROM SHIVAPPA H. NEERALGI, ADDITION OF RS.5 LAKHS CLAIMED TO HAVE BE EN TAKEN FROM ALLASAB H. KADAD AND ADDITION OF RS.5 LAKHS AGAIN CLAIMED T O HAVE BEEN RECEIVED FROM DEVAPPA G. KADI. HOWEVER, ADDITION OF RS.7 LA KHS LOAN BEING LOAN RECEIVED FROM KANAKADASA SHIKSHANA SAMITHI IS NOT W ARRANTED AND SUCH ADDITION IS DELETED. GROUND 2 OF THE ASSESEE IS TH EREFORE TREATED AS PARTLY ALLOWED, WHEREAS ITS GROUNDS 3 AND 4 ARE DISMISSED. ITA.817/BANG/2014 PAGE - 18 24. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH DAY OF N OVEMBER, 2015. SD/- SD/- (VIJAYPAL RAO) (ABRAH AM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR