T.K.Gopi, Trichy V. ITO, Trichy

ITA 837/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51745 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RANGARAJAN JUNIOR
• Assessee Lawyers: V D GOPAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 837/MDS/2010 (ASSESSMENT YEAR : 2006-07) SHRI T.K. GOPI, NO.D-5, UPSTAIRS, 5 TH CROSS, THILLAINAGAR, TIRUCHIRAPALLI 620 018. PAN : AFVPG4191G (APPELLANT) V. THE INCOME TAX OFFICER, WARD I(1), NO.4, WILLIAMS ROAD, TIRUCHIRAPALLI 620 001. (RESPONDENT) APPELLANT BY : SHRI V.D. GOPAL, ADVOCATE RESPONDENT BY : SHRI K.E .B. RANGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 24.08.2011 DATE OF PRONOUNCEMENT : 24.08.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT LD. CIT(APPEALS) SUSTAINED ADDITION OF ` 10 LAKHS MADE BY THE A.O. UNDER SECTION 69A OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A. NO. 837/MDS/10 2 2. SHORT FACTS APROPOS ARE THAT ASSESSEE, ENGAGED I N THE BUSINESS OF HIRING OF TAXIES, HAD FILED RETURN FOR IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF ` 1,73,542/-. DURING THE RELEVANT PREVIOUS YEAR, ASSESSEE HAD MADE CASH DEPOSIT OF ` 10 LAKHS ON 24.11.2005 IN HIS ACCOUNT WITH STATE BANK OF TRAVANCORE. ASSESSEE WA S REQUIRED TO EXPLAIN SOURCE OF THE ABOVE MONEY. EXPLANATION OF THE ASSESSEE WAS THAT HE HAD AVAILED A LOAN FROM NON-RESIDENT IN DIAN OF ` 12,04,585/- ON 13.10.2005, WHICH WAS WITHDRAWN ON 1 3.10.2005 AND 14.10.2005 IN FULL. ACCORDING TO ASSESSEE, THE SAI D MONEY RAISED AS LOAN WAS SO WITHDRAWN FOR THE PURPOSE OF INVESTING IN A PROPERTY AND SINCE THE ENVISAGED PROPERTY DEAL DID NOT COME THRO UGH, OUT OF THE SAID AMOUNT, A SUM OF ` 10 LAKHS WAS DEPOSITED IN THE BANK ON 24.11.2005. HOWEVER, THE A.O. DID NOT ACCEPT THIS CONTENTION. ACCORDING TO HIM, THE BOOKS OF ACCOUNTS WERE NOT AV AILABLE TO PROVE THE DEPOSIT MADE ON 24.11.2005. ACCORDING TO HIM, THERE WAS NO DIRECT NEXUS BETWEEN THE LOAN TAKEN BY THE ASSESSEE FROM THE NRI SHRI SEKAR CREDITED ON 10.10.2005 AND THE DEPOSIT M ADE ON 24.11.2005. A.O. WAS OF THE OPINION THAT NOBODY WO ULD KEEP CASH FOR SUCH A LONG TIME IN HAND WHEN HE WAS HAVING BANK AC COUNT. I.T.A. NO. 837/MDS/10 3 THEREFORE, ACCORDING TO HIM, SOURCE IN RESPECT OF D EPOSIT WAS NOT PROVED AND RELYING ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT V. K. CHINNATHAMBAN (292 ITR 682), HE MADE A N ADDITION UNDER SECTION 69A OF THE ACT. 3. IN ITS APPEAL BEFORE LD. CIT(APPEALS), ARGUMENT OF THE ASSESSEE WAS THAT IT WAS ONLY FOR A SHORT PERIOD, HE HAD KEP T MONEY WITH HIM AND 43 DAYS WAS NOT SUCH A LONG PERIOD TO COME TO A CONCLUSION THAT NO EVIDENCES WERE AVAILABLE FOR MAKING RE-DEPOSIT O F THE MONEY. HOWEVER, LD. CIT(APPEALS) DID NOT ACCEPT THE CONTEN TION BUT CONFIRMED THE ADDITION. 4. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS), SUBMITTED THAT NEITHER THE A.O. NOR L D. CIT(APPEALS) DOUBTED THE SOURCE AND THE LOAN OBTAINED FROM SHRI SEKAR, NON- RESIDENT INDIAN ON 13.10.2005. ACCORDING TO HIM, T HE MONEY WAS WITHDRAWN FROM THE BANK AND ` 10 LAKHS OUT OF THE LOAN AMOUNT OF ` 12,04,585/-, WAS RE-DEPOSITED IN CASH. JUST BECAUS E 43 DAYS GAP WAS THERE, THE SOURCE WAS DISBELIEVED AND ADDITION MADE. THIS WAS QUITE ARBITRARY AND UNJUSTIFIED. I.T.A. NO. 837/MDS/10 4 5. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. THERE IS NO DISPUTE THAT ASSESSEE HAD RECEIVED A LO AN FROM HIS FRIEND SHRI SEKAR, A NON-RESIDENT INDIAN ON 13.10.2005. T HERE IS ALSO NO DISPUTE THAT THE SAID LOAN AMOUNT CREDITED TO BANK ACCOUNT WAS WITHDRAWN ON 13.10.2005 AND 14.10.2005. AS PER THE ASSESSEE, SOURCE OF ` 10 LAKHS ON 24.11.2005 WAS OUT OF THESE WITHDRAWAL S. IN OUR OPINION, 43 DAYS OF GAP, WHICH ASSESSEE HELD ON TO THE CASH, WAS NOT SO LONG AS TO DISBELIEVE THE ASSESSEE. ASSESSE E MIGHT HAVE MYRIAD REASONS FOR KEEPING CASH WITH HIM AND THIS W AS EXPLAINED BY THE ASSESSEE THAT HE WAS CONTEMPLATING ACQUISITION OF PROPERTY WHICH EVENTUALLY DID NOT COME THROUGH. IN ANY CASE, THER E IS NO FINDING BY THE AUTHORITIES BELOW THAT ASSESSEE USED THE MONEY OBTAINED ON LOAN FOR ANY OTHER PURPOSE DURING THE INTERVENING PERIOD . HENCE, WE ARE OF THE OPINION THAT ASSESSEE COULD VERY WELL EXPLAIN T HE SOURCE OF DEPOSIT OF ` 10 LAKHS ON 24.11.2005 WHICH OUT OF WITHDRAWALS MA DE ON 13.10.2005 AND 14.10.2005. IN OUR OPINION, THE SOURCE WAS VERY I.T.A. NO. 837/MDS/10 5 WELL EXPLAINED AND THERE WAS NOT CASE TO MAKE ADDIT ION UNDER SECTION 69A OF THE ACT. THE ADDITION IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE TWENTY FOURTH DAY OF AUGUST, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH AUGUST, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), TIRUCHIRAPALLI (4) CIT-I, TIRUCHY (5) D.R. (6) GUARD FILE