N.Benjamin, CHENNAI V. ITO, CHENNAI

ITA 819/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68694 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-09-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RIFAUR RAHMAN
• Keywords: Gift
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 819/MDS/2013 (ASSESSMENT YEAR : 2009-10) SHRI N. BENJAMIN, C/O AKBER RIFA & CO., FLAT NO.C-8, ORCHARD MANOR APTS, NO.3, DIWAN RAMA ROAD, PURASAIWALKAM, CHENNAI - 600 084. PAN : AFUPB 5685 D (APPELLANT) V. THE INCOME TAX OFFICER, BUSINESS WARD III(2), CHENNAI - 600 034. (RESPONDENT) APPELLANT BY : SHRI RIFAUR RAHMAN, CA RESPONDENT BY : SHRI GURU BASHYAM , JCIT DATE OF HEARING : 03.09.2013 DATE OF PRONOUNCEMENT : 03.09.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT CIT(APPEALS) UPHELD AN ADDITION OF ` 49,28,500/- MADE BY THE A.O. UNDER SECTION 68 OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). I.T.A. NO. 819/MDS/13 2 2. THERE HAS BEEN A DELAY OF 80 DAYS IN FILING THIS APPEAL. ASSESSEE HAS FILED A CONDONATION PETITION THOUGH TH IS IS FOR ONLY 78 DAYS. LEARNED D.R. HAS NOT RAISED ANY SERIOUS OBJE CTION AGAINST CONDONATION OF THE DELAY. WE, THEREFORE, CONDONE T HE DELAY AND ADMIT THE APPEAL. 3. FACTS APROPOS ARE THAT ASSESSEE, ENGAGED IN ADVE RTISEMENT BOARD BUSINESS, HAD FILED HIS RETURN FOR THE IMPUGN ED ASSESSMENT YEAR DECLARING AN INCOME OF ` 3,20,465/-. FROM ANNUAL INFORMATION REPORTS, ASSESSING OFFICER NOTED THAT ASSESSEE HAD MADE CASH DEPOSITS TOTALLING TO ` 49,28,500/- IN SAVINGS BANK ACCOUNT IN STATE BANK OF INDIA, CHINMAYA NAGAR BRANCH, CHENNAI. EXP LANATIONS WERE SOUGHT. REPLY OF THE ASSESSEE WAS THAT HE RECEIVED PERSONAL LOANS FROM FRIENDS, WHICH WERE USED IN DEPOSITING IN THE BANK ACCOUNT. FURTHER, AS PER ASSESSEE, THERE WERE COLLECTIONS FR OM BUSINESS DEBTORS AS WELL. ASSESSEE ALSO FILED A LETTER GIVI NG DETAILS OF THE PERSONS, INCLUDING NAME, ADDRESS AND AMOUNT, WHO HA D HELPED HIM THROUGH BANK LOANS. HOWEVER, DESPITE REQUEST, ASSE SSEE DID NOT FURNISH THE PAN NUMBERS OF THE SAID PERSONS, NOR AN Y CONFIRMATION LETTERS FROM THEM. A.O. TREATED THE SOURCE OF THE DEPOSITS AS NOT SUBSTANTIATED AND MADE AN ADDITION OF ` 49,28,500/- UNDER SECTION 68 OF THE ACT. I.T.A. NO. 819/MDS/13 3 4. IN HIS APPEAL BEFORE CIT(APPEALS), ASSESSEE SUBM ITTED SOME DETAILS LINKING THE RECEIPT OF CASH IN DEPOSITS. A SSESSEE ALSO FILED A LETTER DATED 28.9.2009 OF ONE M/S CHRIST COLLEGE, W HICH CONFIRMED HAVING PAID ` 7,75,000/- IN CASH. ANOTHER LETTER DATED 30.4.200 9 OF ONE M/S NEW HOPE MEDICAL CENTRE WAS ALSO FILED CONF IRMING PAYMENT OF ` 5,50,000/- IN CASH, TO THE ASSESSEE. HOWEVER, THE CIT(APPEALS) WAS OF THE OPINION THAT THE DATES ON WHICH PAYMENTS WERE EFFECTED TO THE ASSESSEE, FOR THE WORK RENDERED BY THE ASSESSEE TO THEM, WERE NOT CROSS VERIFIABLE. 5. IN ADDITION TO THE TWO LETTERS MENTIONED ABOVE, ASSESSEE HAD ALSO FILED CONFIRMATION LETTERS FROM MRS. GNANA SUN DARI, HIS MOTHER-IN- LAW AND SHRI E.L. JAYAKUMAR, HIS BROTHER-IN-LAW, FO R ` 11,90,000/- AND FOR ` 7,11,000/- RESPECTIVELY, RECEIVED FROM THEM. THIS ALSO WAS NOT ACCEPTED BY THE CIT(APPEALS) FOR A REASON THAT THER E WAS NO PROPER LINKAGE BETWEEN THE DATES. 6. ASSESSEE HAD ALSO OFFERED AN EXPLANATION THAT A SUM OF ` 17,02,500/- DEPOSITED IN THE BANK, CAME OUT OF HIS CASH BALANCE. CIT(APPEALS) DID NOT ACCEPT THIS AS WELL, FOR A REA SON THAT ASSESSEE HAD NOT PRODUCED ANY BOOKS OF ACCOUNTS. AS PER CIT (APPEALS), THE I.T.A. NO. 819/MDS/13 4 DETAILS FILED BY THE ASSESSEE WERE NOT VERIFIABLE A ND COULD NOT ESTABLISH THE AUTHENTICITY OF THE EXPLANATION GIVEN BY THE ASSESSEE. HE, THEREFORE, CONFIRMED THE ADDITIONS MADE BY THE A.O. 7. NOW BEFORE US, SHRI RIFAUR RAHMAN, LEARNED A.R. OF THE ASSESSEE, STRONGLY ASSAILING THE ORDERS OF AUTHORIT IES BELOW, SUBMITTED THAT EVIDENCE FILED BY THE ASSESSEE IN TH E NATURE OF LETTERS FROM M/S CHRIST COLLEGE AND M/S NEW HOPE MEDICAL CE NTRE WERE REJECTED WITHOUT ANY VERIFICATION. NONE OF THE AUT HORITIES BELOW MADE ANY EFFORT TO CONFIRM THE TRANSACTIONS WITH THE SAI D PARTIES. FURTHER, ACCORDING TO LEARNED A.R., ASSESSEE HAD FILED CONFI RMATION LETTERS FOR GIFTS RECEIVED FROM HIS MOTHER-IN-LAW AND BROTHER-I N-LAW, WHICH WERE REJECTED ON FLIMSY REASONS. LD. CIT(APPEALS) NEVER ASKED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNTS TO SHOW THE C ASH BALANCE. THEREFORE, ACCORDING TO HIM, THE ADDITIONS WERE MAD E AND CONFIRMED BY THE LOWER AUTHORITIES IN AN UNJUST MANNER. 8. PER CONTRA, SHRI GURU BASHYAM, APPEARING FOR THE REVENUE, STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BE LOW. 9. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT ASSESSEE DID NOT GIVE THE DETAILS REQUIRED BY THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, I.T.A. NO. 819/MDS/13 5 WITH REGARD TO THE DEPOSITS TOTALLING ` 49,28,500/- MADE BY HIM IN HIS SAVINGS BANK ACCOUNT WITH STATE BANK OF INDIA, CHIN MAYA NAGAR BRANCH, CHENNAI. HOWEVER, ASSESSEE HAD INDEED FURN ISHED CONFIRMATION LETTERS FROM ONE M/S CHRIST COLLEGE FO R ` 7,75,000/-, FROM ONE M/S NEW HOPE MEDICAL CENTRE FOR ` 5,50,000/-, FROM MRS. GNANA SUNDARI FOR ` 11,90,000/- AND FROM SHRI E.L. JAYAKUMAR FOR ` 7,11,000/-. AS PER ASSESSEE, FORMER TWO ENTITIES H AD GIVEN THE MONEY AS CONSIDERATION FOR THE WORK DONE BY HIM. T HE LATTER TWO PERSONS WERE HIS MOTHER-IN-LAW AND BROTHER-IN-LAW R ESPECTIVELY. WE FIND THAT THE CIT(APPEALS) HAD REJECTED THE ABOVE C ONFIRMATIONS FOR THE REASON THAT THESE WERE NOT CROSS VERIFIABLE AND DATES COULD NOT BE TALLIED. HOWEVER, HOW HE CAME TO A CONCLUSION THAT THE CONFIRMATIONS WERE NOT CROSS VERIFIABLE WHEN ADDRESS OF THE CONCE RNED PARTIES WERE AVAILABLE, IS NOT CLEAR. IN OUR OPINION, BEFORE RE JECTING THE CONFIRMATION LETTERS FILED, LOWER AUTHORITIES SHOUL D HAVE MADE ENQUIRIES IN THIS REGARD WITH CONCERNED PERSONS. S IMILARLY, LD. CIT(APPEALS) HAS NOT MENTIONED WHAT WAS THE TOTAL T RADING TURNOVER OF THE ASSESSEE, BEFORE REJECTING HIS EXPLANATION T HAT ` 17,02,500/- OUT OF THE TOTAL DEPOSITS CAME OUT OF CASH BALANCES . ASSESSING OFFICER HAS NOT EVEN MENTIONED WHETHER ASSESSEES B OOKS OF ACCOUNTS WERE REJECTED OR NOT. THUS ASSESSEES EXP LANATION THAT A I.T.A. NO. 819/MDS/13 6 SUM OF ` 17,02,500/- HAD COME OUT OF THE CASH BALANCE ALSO WAS NOT EFFECTIVELY VERIFIED. 10. IN THE CIRCUMSTANCES, WE ARE OF THE OPINION THA T THE MATTER REQUIRES A FRESH LOOK BY THE A.O. WE, THEREFORE, S ET ASIDE THE ORDERS OF AUTHORITIES BELOW AND REMIT THE ISSUE REGARDING SOURCE OF DEPOSITS MADE BY THE ASSESSEE IN HIS SAVINGS BANK ACCOUNT, B ACK TO THE FILE OF THE A.O. FOR CONSIDERATION AFRESH, IN ACCORDANCE WITH LAW. ASSESSEE SHALL BE GIVEN AN OPPORTUNITY TO FILE EVID ENCE IN SUPPORT OF HIS EXPLANATIONS. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, THE 3 RD OF SEPTEMBER, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 3 RD SEPTEMBER, 2013. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-VIII, CHENNAI/ CIT-VI, CHENNAI-34/D.R./GUARD FILE