Smt. Padmarekha, Tumkur V. DCIT, Tumkur

ITA 895/BANG/2009

• Counselvise Citation: 89521114 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 02-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: V SRINIVASAN
• Keywords: Unexplained investment
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI , JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.895/BANG/2009 ASSESSMENT YEAR : 2004-05 SMT. PADMA REKHA, SRINIVASA NILAYA, RAILWAY STATION ROAD, TUMKUR. : APPELLANT PAN : AAPPP7765E VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, TUMKUR. : RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI, ADDL.CIT(DR) DATE OF HEARING : 22.06.2011 DATE OF PRONOUNCEMENT : 26.08.2011 O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE DIRECTED AGAI NST THE ORDER OF THE LD. CIT(APPEALS)-II IN ITA NO.162/AC-C(1)/CIT(A)-II /06-07 DATED 24.6.2009 FOR THE ASSESSMENT YEAR 2004-05. ITA NO.895/BANG/09 PAGE 2 OF 5 2. THE ASSESSEE HAS RAISED FOUR GROUNDS IN HER APPE AL, WHEREIN GROUND NO.1, 2.1 AND 4 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. GROUND NO.3 RELATES TO CHARGEABILITY OF INTEREST U/S. 234A, 234B & 234C OF THE ACT WHICH WE HOLD IT TO BE CONSE QUENTIAL IN NATURE. THE LONE ISSUE SURVIVING FOR ADJUDICATION IS THAT GROUND NO.2 VIZ., THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE ADDI TION OF RS.10,14,746/- MADE BY THE LD. AO IN RESPECT OF CAPITAL INTRODUCTI ON. 3. THE ASSESSEE IS AN INDIVIDUAL EARNING RENTAL INC OME FROM M/S. BALAJI LODGE, B.H. ROAD, TUMKUR. THE ASSESSEE FILED HER R ETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR IN RESPONSE TO NOTICE U/S. 148 OF THE ACT ON 31.3.2006 DECLARING AN INCOME OF RS.5,69,260/-. IN THE SCRUTINY ASSESSMENT PROCEEDINGS, THE LD. JCIT BY HIS LETTER DATED 10.8.2006 HAD DIRECTED THE LD. AO TO EXAMINE CERTAIN ASPECTS INVO KING SECTION 144A OF THE ACT. THE LD. AO ISSUED A LETTER TO THE ASSESSEE C ALLING FOR THE DETAILS. SINCE THERE WAS NO COMPLIANCE FROM THE ASSESSEES S IDE ON 2.1.2006, A LETTER WAS ISSUED TO THE ASSESSEE STATING THAT THE ASSESSMENT WILL BE COMPLETED EX PARTE DETERMINING THE TOTAL INCOME AS UNDER: INCOME AS ADMITTED RS. 5,69,342 ADDITION TO CAPITAL ACCOUNT IN THE ABSENCE OF DETAILS RS.10,14,746 TOTAL RS.15,84,088 4. SUBSEQUENTLY THE ASSESSEE REPRESENTED THROUGH HE R AR WITH THE SUBMISSION THAT SHE HAD DECLARED RS.2 CRORES UNDER VDIS SCHEME. IT WAS ALSO SUBMITTED THAT A DETAILED CASH FLOW CHART WAS BEING PREPARED AND THE SAME SHALL BE FURNISHED BEFORE THE REVENUE. HOWEVER , SUCH STATEMENTS ITA NO.895/BANG/09 PAGE 3 OF 5 WERE NOT FURNISHED BEFORE THE REVENUE. LD. AO OPIN ED THAT IT IS HARD AND STRANGE TO BELIEVE THAT SUCH A HUGE AMOUNT WILL BE KEPT BY THE ASSESSEE AS CASH IN HAND RATHER THAN DEPOSITING IN THE BANK ACC OUNT. SINCE THE ASSESSEE HAD NOT GIVEN ANY CONCRETE AND CONCLUSIVE EVIDENCE TO ESTABLISH THAT THE AMOUNT OF RS.10,14,746/- FORMED PART OF RS .2 CRORES DECLARED UNDER VDIS SCHEME, THE LD. AO MADE AN ADDITION OF E QUIVALENT AMOUNT TO THE INCOME OF THE ASSESSEE AND BROUGHT TO TAX AS IN COME FROM UNEXPLAINED INVESTMENT. 5. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED F UNDS FLOW STATEMENTS YEAR WISE IN SUPPORT OF HER CLAIM. THE SAME WAS ANALYSED BY THE LD. CIT(A) IN DETAIL AND CAME TO THE FOLLOWING CONCLUSION. 5.2 FROM THE YEAR-WISE STATEMENT OF AFFAIRS, IT MAY BE SEEN THAT THE TOTAL CONSTRUCTION COST AS ON 31.3.2000 WA S RS.11,30,000/-, WHICH IS REDUCED TO RS.1,53,180/- A S ON 31/3/2003. HOWEVER, DURING THE YEAR INVESTMENT IN THE PROPERTY INCREASED BY RS.12,24,088/-, IT INDICATES THAT FRES H CAPITAL WAS INTRODUCED THIS YEAR ITSELF. AS PER THE CASH FLOW STATEMENT AS ON 31/3/2004, INVESTMENT IN BALAJI LODGE SHOWN WAS RS. 10,14,746/. IN THE RECEIPT SIDE, AN AMOUNT OF RS.11,50,000/- IS CLAIMED TO HAVE BEEN RECOVERIES FROM SUNDRY ADVANCE. THIS BEI NG THE FACT, THE APPELLANT SHOULD HAVE FURNISHED FULL PARTICULAR S LIKE NAME AND FULL ADDRESSES OF THE DEBTORS, DATE AND MODE OF REC EIVING AMOUNT AND BOOKS OF ACCOUNT TO SHOW THAT ALL THESE TRANSAC TIONS WERE RECORDED IN HER REGULAR BOOKS OF ACCOUNT. THE BASI C INFORMATION ALONG WITH BOOKS OF ACCOUNT WAS NEITHER PRODUCED BE FORE THE AO NOR AT THE TIME OF APPEAL HEARING. THUS, THE ADDIT ION OF RS.10,14,746/- REMAINS UNEXPLAINED. 6. LD. AR, SHRI V. SRINIVASAN, C.A., SUBMITTED THAT THE ASSESSEE HAD FURNISHED VARIOUS FUNDS FLOW STATEMENTS AND OTHER S TATEMENTS IN SUPPORT OF HER CLAIM WHICH WAS NOT PROPERLY EXAMINED BY THE RE VENUE. IT WAS SUBMITTED THAT ALL THE DOCUMENTS PRODUCED BEFORE TH E REVENUE CLEARLY ITA NO.895/BANG/09 PAGE 4 OF 5 ESTABLISHES THAT THE APPELLANT HAD ENOUGH SOURCE FO R THE ABOVE SAID AMOUNT SINCE SHE HAD DECLARED IT IN THE VDIS SCHEME DURING THE EARLIER YEARS. IT WAS HUMBLY PRAYED THAT THE ADDITION MADE BY THE LD. AO FOR THE AMOUNT OF RS.10,14,746/- WHICH WAS FURTHER CONFIRME D BY THE LD. CIT(A) MAY BE DELETED. 7. LD. DR STOUTLY OPPOSED TO THE ARGUMENTS OF THE L D. AR AND SUBMITTED THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BUT YET THE ASSESSEE DID NOT FURNISH SUFFICIENT EVIDENCE TO EST ABLISH HER CLAIM. LD. DR RELIED UPON THE ORDER OF LD. AO AND LD. CIT(A) AND PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL BEFORE US. WE HAVE ALSO TAKEN NOTE OF THE PAPER-BOOK SUBMITTED BY THE ASSESSEE FROM PAGE NOS.49 TO 62 WHEREIN THE WRITTEN SUBMISSIONS, REMAND REPORT AND REJOINDER LETTERS RELEVANT TO THE ASSESSEE WERE FURNISHED. ON BOTH THE OCCASIONS BEFORE THE REVEN UE, THE ASSESSEE WAS NOT ABLE TO PRODUCE SUFFICIENT RECORDS TO ESTABLISH HER CLAIM. THE LD. CIT(A) AFTER ANALYZING THE CASH FLOW STATEMENT, CLEARLY CA ME TO A FINDING THAT THE APPELLANT HAS FAILED TO ESTABLISH HER CLAIM. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ALSO FIND IT HARD TO BELIEVE THAT THE ASSESSEE COULD RETAIN SUCH HUGE CASH BALANCE IN HAND RATHER THAN DEPOSITING IT IN THE BANK. ON EXAMINING THE ENTIRE FACTS, WE ARE ALSO O F THE OPINION THAT THE REVENUE HAS JUDICIOUSLY EXAMINED THE ISSUE BEFORE T HEM AND ARRIVED AT A FAIR CONCLUSION AND THEREFORE, WE DO NOT HAVE ANY H ESITATION TO CONFIRM THE ORDER OF THE LD. CIT(A). IT IS ORDERED ACCORDINGLY . ITA NO.895/BANG/09 PAGE 5 OF 5 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 26/8/11. SD/- SD/- ( SMT. P. MADHAVI DEVI) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 26 TH AUGUST, 2011. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.