ITO, Bangalore V. Shri. Ramdoss Poongavanam, Bangalore

ITA 867/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5609 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 02-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARESH SAKA
• Assessee Lawyers: V SRINIVASAN
• Keywords: Unexplained investment
• Section: 69

Judgement Text

PAGE 1 OF 5 ITA NO.867/BANG/2 010 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI N BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI GEORGE GEORGE K, J.M ITA NO.867/BANG/2010 (ASSESSMENT YEAR 2006-07) THE INCOME TAX OFFICER, WARD-6(3), BANGALORE-1. - APPELLANT VS SHRI RAMDOSS POONGAVANAM, NO.924, SRI BALAJI NILAYAM, 10 TH MAIN, 100 FT ROAD, 2 ND H CROSS, HRBR LAYOUT, I BLOCK, KALYAN NAGAR, BANGALORE-33. - RESPONDENT APPELLANT BY : SHRI NARESH SAKA, JCIT RESPONDENT BY : SHRI V SRINIVASAN, C.A. ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE CIT (A)-III, BANGALORE DAT ED 03.07.2009. THE RELEVANT ASSESSMENT YEAR IS 2006-07. 2. THE SOLITARY ISSUE THAT IS RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.7,82,468/- MADE U/S 69 OF THE ACT IN RESPECT OF INVESTMENT IN A RES IDENTIAL SITE. PAGE 2 OF 5 ITA NO.867/BANG/2 010 2 3. THE ASSESSEE IS AN INDIVIDUAL. HE DERIVES INCO ME FROM HOUSE PROPERTY AND FROM BUSINESS OF CARPENTRY WORKS. FOR THE RELEVANT ASST. YEAR, RETURN OF INCOME WAS FILED ON 2 1.4.2006 DECLARING AN INCOME OF RS.1,22,488/- AND AGRICULTURAL INCOME OF RS.1,25,000/-. THE ASSESSMENT WAS SELECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) AND SCRUTINY ASSESSMENT WAS PASSED VIDE ORDER DATED 22/12/2008. IN THE SCRUTINY ASSESSMENT COMPLETED, T HE AO HAD MADE AN ADDITION OF RS.7,82,468/-. 3.1 THE BRIEF FACTS IN RELATION TO THE ABOVE SAID ADDITION ARE AS FOLLOWS:- THE ASSESSEE HAD PURCHASED A RESIDENTIAL SITE FOR A SUM OF RS.9,21,760/-. THE AO, IN THE COURSE OF SCRUTIN Y ASSESSMENT, ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT IN THE ABOVE SAID SITE. THE ASSESSEE HAD EXPLAINED THE SOURCE AS UND ER:- A) RS.3,00,000 OUT OF SUMS RECEIVED AS ADVANCE DURING THE YEAR ON ACCOUNT OF SALE OF SITE. B) RS.3,50,000 PAID AS ADVANCE IN THE PREVIOUS YEAR. C) RS.1,32,468 OUT OF CASH BALANCE OF PREVIOUS YEAR. D) RS.1,39,292 OUT OF INCOME EARNED DURING THE YEAR. THE AO HAD REJECTED THE FIRST THREE SOURCE LISTED A BOVE ON THE GROUND THAT NO DETAILS OF EVIDENCES TO SUBSTANTIATE THE CLAIMS MADE WERE PRODUCED AND THEREFORE, HE ADDED BACK A SUM OF RS.7,82,468/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. PAGE 3 OF 5 ITA NO.867/BANG/2 010 3 4. AGGRIEVED BY THE ADDITION MADE BY THE AO, THE ASS ESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. 5. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS SUB MITTED THAT THE SOURCES FOR RS.7,82,468/- FOR PURCHASE OF SITE ARE OUT OF EARLIER YEAR ADVANCE OF RS.3,50,000/- WHICH HAS BEEN TRANSFERRED TOWARDS PART OF THE SITE COST DURING THE YEAR 2005-0 6. IT WAS SUBMITTED THAT IN ADDITION AN AMOUNT OF RS.3,00,000 /- WHICH WAS RECEIVED DURING THE YEAR 2005-06 AS ADVANCE FOR SALE OF SITE IS ALSO USED FOR THE PURPOSE AND THIS ADVANCE IS SHOWN IN T HE STATEMENT OF AFFAIRS AS ON 31.3.2006. THE BALANCE AMOUNT WAS F ROM CASH AVAILABLE FROM EARLIER YEARS. IN VIEW OF THE ABOVE, IT WAS S UBMITTED THAT ADDITION OF RS.7,82,468/- MADE U/S 69 IS ILLEGAL AN D OPPOSED TO THE FACTS OF THE CASE. 6. THE FIRST APPELLATE AUTHORITY, FOR THE REASONS MENTIONED IN PARA 4.2 TO 4.5 OF HIS IMPUGNED ORDER, ALLOWED T HE APPEAL OF THE ASSESSEE. 7. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFO RE US. 8. THE LEARNED DR SUBMITTED THAT THE LEARNED CIT(A ) HAS ERRED IN HOLDING THAT THE ASSESSEE HAS DISCHARGED T HE INITIAL ONUS CAST ON HIM FOR FURNISHING THE BASIC DETAILS MERELY ON TH E GROUND THAT THE ASSESSEE HAS FILED STATEMENT OF AFFAIRS AS ON 31.3. 2006. THE LEARNED DR FURTHER SUBMITTED THAT THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT MERE FURNISHING OF STATEMENT OF AF FAIRS WOULD NOT PAGE 4 OF 5 ITA NO.867/BANG/2 010 4 SUFFICE AND THE ASSESSEE HAD NOT PROVED THE GENUINE NESS OF THE ADVANCE RECEIVED FROM MR. SUBRAMANI REDDY BY PROVING THE IDENTITY AND CREDIT WORTHINESS OF THE SAID PERSON EITHER BEF ORE THE AO OR BEFORE THE CIT(A). 9. THE LEARNED AR, APART FROM REITERATING THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW, SUPPORTED THE FI NDING/CONCLUSION OF THE FIRST APPELLATE AUTHORITY. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. AS RIGHTLY POINTED OUT BY THE LE ARNED DR, MERE FILING OF THE STATEMENT OF AFFAIRS WOULD NOT SUFFIC E TO DISCHARGE THE INITIAL ONUS THAT IS LAID ON THE ASSESSEE TO PROVE THE SOURCE OF INVESTMENT. THE ASSESSEE HAS NOT PROVED THE GENUIN ENESS OF THE ADVANCE RECEIVED FROM MR. SUBRAMANI REDDY BY PROVING THE IDENTITY AND CREDIT WORTHINESS OF THE SAID PERSON, EITHER BE FORE THE AO OR BEFORE THE CIT(A). THEREFORE, THE ADVANCE OF RS.3 LAKHS RECEIVED FROM MR. SUBRAMANI REDDY HAS NOT STOOD PROVED. THE ASSESSEE CAN FURNISH THE DETAILS OF THE ADVANCE RECEIVED BY PROVI DING HOW THE SAME IS RECEIVED, WHETHER IT IS THROUGH BANKING CHANNELS OR NOT. THE ASSESSEE CAN ALSO FURNISH THE SALE DEED TO PROVE TH E RECEIPT OF ADVANCE. IN THE ABSENCE OF THESE MATERIALS AND IN T HE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT ONE MORE OPPORTUNI TY SHOULD BE GRANTED TO THE ASSESSEE TO PROPERLY EXPLAIN THE SOUR CE OF INVESTMENT IN THE RESIDENTIAL SITE AMOUNTING TO RS.9,21,760/-. THEREFORE, THE ISSUE IS REMITTED BACK TO THE CIT(A) FOR DENOVO CON SIDERATION. THE PAGE 5 OF 5 ITA NO.867/BANG/2 010 5 ASSESSEE SHALL BE AFFORDED REASONABLE OPPORTUNITY OF HEARING BEFORE FRESH ORDER IS PASSED. 11. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED ON FRIDAY, THE 13 TH DAY OF MAY, 2011 AT BANGALORE. SD/- SD/- (N BARATHVAJA SANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE C IT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/10/5. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.