ACIT, Calicut V. Sri N.K. Mohammed Ali., Partner Yenkey, Calicut

ITA 927/COCH/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4335 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 03-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 12-11-2008
• Court: TRIBUNAL
• Department Lawyers: T J VINCENT
• Assessee Lawyers: A S NARAYANAMOORTHY
• Keywords: Gift; Source of fund; Onus to prove; Ignorance of law; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH, COC HIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY ARORA , AM I.T.A. NO. 927/COCH./ 2008 ASSESSMENT YEAR : 2005-06 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, CALICUT. VS. SHRI N.K.MOHAMMED ALI, PARTNER, YENKEY ROLLER FLOUR MILLS, CHEROOTY ROAD, CALICUT. [PAN: ADTPM 0491B] (REVENUE -APPELLANT) (ASSESSEE- RESPONDENT) REVENUE BY SHRI T.J.VINCENT, DR ASSESSEE BY SHRI A.S.NARAYANAMOORTHY, CA O R D E R PER SANJAY ARORA, AM: THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCHI (CIT(A) FOR SHORT) DATED 14.8.2008, AND THE ASSESSMENT YEAR (A.Y.) UNDER REFERENCE IS 2005-06. 2. THE ONLY ISSUE AGITATED BY THE REVENUE, PER ITS THREE SUBSTANTIVE GROUNDS, IS IN RELATION TO SUM OF RS. 6,40,000/- DEEMED AS INCOME BY THE ASSESSING OFFICER (A.O.) U/S. 68 OF THE INCOME TAX ACT, 1961 (THE 'ACT' HEREINAFT ER), SINCE DELETED BY THE LD. CIT(A). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A MANAGING PARTNER/DIRECTOR OF THE PARISONS GROUP OF CONCERNS, FILED HIS RETURN FOR TH E RELEVANT YEAR ON 30.12.2005 AT AN INCOME OF RS. 30.01 LAKHS, INCLUDING INCOME FROM OT HER SOURCES AT RS. 20.07 LAKHS, BESIDES AN AGRICULTURAL INCOME OF RS. 55,000/-. ON EXAMINING THE CASH FLOW STATEMENT, FURNISHED TO EXPLAIN THE MANNER AND SOURCE OF HIS I NVESTMENTS, THE AO FOUND THAT THE ASSESSEE HAD RECEIVED A LOAN OF RS. 6,40,000/- IN C ASH IN THE NAME OF SMT. SAJITH ALI. ON BEING CALLED UPON TO EXPLAIN THE SAME, IN TERMS OF ITS NATURE AND SOURCE, IT WAS SUBMITTED THAT IT REPRESENTS LOAN FROM HIS WIFE, SMT. SAJITH ALI, ALSO ENCLOSING ALONG WITH A CONFIRMATION CERTIFICATE DATED 9.11.2007 WHICH ALSO BORE HER PERMANENT ACCOUNT ITA. NO. 927/COCH./2008 2 NUMBER. THE COPIES OF HER RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2002-03 TO 2005- 06 (BEFORE ITO, WARD-1(2), KOZHIKODE) WERE ALSO SUB MITTED, THE DETAILS OF WHICH ARE AS UNDER: (AMOUNT IN RS.) ASST.YEAR DATE OF FILING INCOME RETURNED TAX PAID 2002-03 16.10.2007 1,25,800 2,874 2003-04 16.10.2007 1,32,600 4,885 2004-05 16.10.2007 1,75,100 7,633 2005-06 16.10.2007 1,40,200 5,942 THE RETURNS FOR ALL THE YEARS, IT WAS OBSERVE D BY THE AO, WERE BEYOND THE TIME LIMIT PRESCRIBED EVEN FOR A BELATED RETURN (SECTION 139(4 ) OF THE ACT) AND, AS SUCH, WERE NON EST IN THE EYES OF LAW. SECONDLY, THE ENTIRE INCOME FO R ALL THE YEARS WAS BY WAY OF `INCOME FROM OTHER SOURCES WITHOUT REFERENCE TO ANY SOURCE OF INCOME . THE CREDITOR WAS ALSO NOT PRODUCED FOR EXAMINATION. FURTHER, VIDE HER STATEM ENT ON OATH DURING THE COURSE OF SEARCH AT THE ASSESSEES RESIDENCE ON 8.1.2004, THE CREDITOR HAD CLEARLY STATED OF NOT HAVING ANY SOURCE OF INCOME OF HER OWN, ADMITTING T O BEING ONLY A HOUSE-WIFE. IT WAS EVIDENT THAT THE ASSESSEE, IN ORDER TO BRIDGE THE G AP TOWARD EXPLAINING HIS INVESTMENTS ON THE BASIS OF HIS INCOME STATEMENT; HE HIMSELF OFFER ING AN `INCOME (FROM OTHER SOURCES) - WITHOUT EXPLAINING ITS SOURCE(S) - AT RS. 19.50 LAK HS, HAD LIKEWISE SOUGHT TO EXPLAIN THE DIFFERENCE BY ASCRIBING A PART TO A LOAN FROM HIS W IFE, FILING (OR CAUSING TO FILE) RETURNS OF HER INCOME SUBSEQUENTLY IN AN ATTEMPT TO `CREATE A N EVIDENCE FOR THE SAME BY INCURRING A NOMINAL COST IN TERMS OF THE TAX THEREON, AND WHICH COULD NOT BY ITSELF BE TREATED AS A PROOF OF THE SOURCE OF MONEY AVAILABLE WITH THE CRE DITOR. UNDER THE CIRCUMSTANCES, THE AO FOUND THAT THE ASSESSEE HAD FAILED TO PROVE THE SAID CREDIT UNDER TERMS OF SECTION 68 OF THE ACT AND BROUGHT THE SAME TO TAX, PLACING RELIAN CE ON THE DECISION BY THE HONBLE APEX COURT IN THE CASE OF CIT VS. P. MOHANAKALA , 291 ITR 278 (SC), REPRODUCING THE RELEVANT EXTRACT THEREOF. IN APPEAL, THE SAME FOUND FAVOUR WITH THE LD. CIT(A), WHO HELD AS UNDER:- 4. I HAVE CONSIDERED THE FACTS OF THE ISSUE BR OUGHT OUT BY THE AO AND THE GROUND RAISED BY THE APPELLANT AND THE SUBMISSIONS OF THE LD. CA FOR THE APPELLANT. AT THE TIME OF HEARING OF THE APPEAL, MR. MOORTHY F ILED COPIES OF THE CONFIRMATION LETTER OF MRS. SAJITHA ALI, COPIES OF HER RETURN OF INCOME FILED FOR THE ASSESSMENT YEARS MENTIONED ABOVE. AS FAR AS THE LOAN CREDIT IS CONCE RNED, ASSESSEE HAS TO PROVE THE IDENTITY OF THE CREDITOR, GENUINENESS OF THE LOAN T RANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR. THE CREDITOR HAS CONFIRMED THAT SHE IS AN INCOME-TAX ASSESSEE BY FURNISHING THE COPIES OF THE INCOME TAX RETURNS FILED. SHE HA S CONFIRMED HER CAPACITY FOR MAKING THE ITA. NO. 927/COCH./2008 3 LOAN BY STATING THAT THE LOAN WAS ADVANCED FROM HER OWN INCOME WHICH WAS OFFERED FOR TAXATION. THE CASE LAW RELIED BY THE APPELLANT IS SQUARELY APPLICABLE IN THIS CASE. AO SHOULD HAVE NOTED THAT IT IS NOT THE REQUIREMENT FR OM THE PART OF THE ASSESSEE TO PROVE THE SOURCE OF THE SOURCE. AO HAS NOT BROUGHT OUT ANY FA CTS TO DISBELIEVE THE GENUINENESS OF THE SOURCE EXPLAINED BY THE APPELLANT. THE ADDITI ON OF RS. 6,40,000/- MADE IN THE ASSESSMENT IS IMPROPER AND IS THEREFORE, DELETED. AGGRIEVED, THE REVENUE IS IN APPEAL. 4. BEFORE US, LIKE SUBMISSIONS STOOD RAISED BY E ITHER SIDE. THE LD. AR RELIED ON THE DECISION IN THE CASE OF CIT VS. ORISSA CORPORATION , 159 ITR 78 (SC). THE DECISION IN THE CASE OF P. MOHANAKALA (SUPRA), IT WAS PLEADED, WAS NOT APPLICABLE, BEING DISTINGUISHABLE ON FACTS. IN THAT CASE, THE ASSESSEE HAD RECEIVED GIFTS FROM A NON-RESIDENT, WHO WAS NOT PROPERLY IDENTIFIED, AND THERE WAS ENOUGH EVIDENCE TO SHOW THAT THERE WAS CONSIDERATION PAID BY THE DONOR IN LIEU OF THE AMOUNTS RECEIVED A S GIFTS, WHILE IN THE INSTANT THE SAME IS ONLY FROM THE ASSESSEES WIFE. SHE HAD IN FACT OBT AINED HER PAN MUCH EARLIER, AND ALSO MADE DECLARATION(S) UNDER VDIS, 1987. IN REJOINDER, IT WAS SUBMITTED BY THE LD. DR THAT A DECLARATION FILED IN 1987 COULD BE OF NO ASSISTANCE IN PROVING A CASH LOAN IN THE FINANCIAL YEAR 2004-05, I.E., ABOUT 30 YEARS HENCE, PARTICULA RLY IN THE ABSENCE OF ANY SUPPORTIVE MATERIAL, AND IS THUS IS OF NO VALUE. 5.1 WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD AS WELL AS CASE LAW CITED. IN THE INSTANT CASE, WE ARE CALLED UPON TO, AT THE INSTANCE OF THE REVENUE, DELIVER OUR OPINION AS TO WHETHER THE NON-SATISFACTION OF T HE AO, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WITH THE ASSESSEES EXPLANATION AS TO THE NATURE AND SOURCE OF CASH CREDIT IN THE SUM OF RS. 6.40 LAKHS DURING THE RELEVANT YEAR IN THE NAME OF HIS WIFE, IS LEGALLY SUSTAINABLE OR NOT; THE FIRST APPELLATE AUTHORITY H AVING OPINED NEGATIVELY ON THE SAME. THAT THE ISSUE IS ONE OF FACT, WHICH IS TO BE ARRIV ED AT ON A CONSPECTUS OF THE CASE, FACTORING IN THE EXPLANATIONS OF THE ASSESSEE, IS T RITE IN LAW. THIS IS FOR THE REASON THAT THE ONUS IS STRICTLY WITH THE ASSESSEE TO PROVE THE CRE DIT IN ITS BOOKS ON THE PARAMETERS OF IDENTITY, SOURCE AND GENUINENESS SEPARATELY, FAILIN G WHICH THE DEEMING PROVISION OF SECTION 68 WOULD APPLY. AT THE SAME TIME, HOWEVER, THE REVENUE IN ARRIVING AT ITS OPINION HAS TO ACT REASONABLY AND OBJECTIVELY, ITS ACTION B EING EVEN OTHERWISE SUBJECT TO JUDICIAL ITA. NO. 927/COCH./2008 4 REVIEW. THIS REPRESENTS THE TRITE LAW IN THE MATTER , AND FOR WHICH REFERENCE COULD BE MADE, I.E., APART FROM THE DECISION IN THE CASE OF P. MOHANAKALA (SUPRA) RELIED UPON BY THE AO, TO SOME DECISIONS BY THE HONBLE APEX COURT RENDERE D U/S. 68 OF THE ACT: - CIT V. BIJU PATNAIK , 160 ITR 674 (SC) - ROSHAN DI HATTI V. CIT , 107 ITR 938 (SC) - KALE KHAN MOHAMED HANIF V. CIT , 50 ITR 1 (SC) - SREELEKHA BANERJEE V. CIT , 49 ITR 112 (SC) IN THIS CONTEXT, IT WOULD BE PROFITABLE TO ADVERT TO THE TWO JUDGMENTS RELIED UPON BY THE REVENUE (ALSO REFER ITS GROUNDS OF APPEAL), I.E., SUMATI DAYAL VS. CIT , 214 ITR 801 (SC) AND CIT VS. P. MOHANAKALA (SUPRA). PER THE FORMER, IT STANDS EXPLAINED THAT IN VIEW OF S. 68 OF THE ACT THERE IS PRIMA FACIE AN EVIDENCE AGAINST THE ASSESSEE IN THE FORM OF TH E RECEIPT OF MONEY, AND IT IS HE WHO IS REQUIRED TO R EBUT THE SAME, FAILING WHICH IT CAN BE USED AGAINST HIM BY HOLDING THAT THE RECEIPT WAS OF INCOME NATURE. IN ARRIVING AT ITS FINDINGS OF FACT THE REVENUE IS TO CONSIDER ALL SUR ROUNDING FACTS AND ALSO APPLY THE TEST OF HUMAN PROBABILITIES. VIDE THE LATTER DECISION THE E XPRESSION `OFFERS NO EXPLANATION STOOD DILATED UPON; IT HOLDING AS UNDER: THE EXPRESSION `THE ASSESSEE OFFERS NO EXPLANATION MEANS THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABLE EXPLANATION AS RE GARDS THE SUMS FOUND CREDITED IN THE BOOKS MAINTAINED BY THE ASSESSEE. THE OPINION OF T HE AO FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFAC TORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTENDING CIRCUM STANCES AVAILABLE ON THE RECORD. THE OPINION OF THE AO IS REQUIRED TO BE FORMED OBJECTIV ELY WITH REFERENCE TO THE MATERIAL ON RECORD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. 5.2 WE WOULD NOW PROCEED TO EXAMINE THE ASSESSEES EXPLANATION IN THE LIGHT OF THE OBTAINING FACTS. BEFORE US THE LD. AR, AS WELL AS BEFORE THE LD. CIT(A) PRIOR THERETO, HAS SOUGHT TO PLACE RELIANCE ON THE DECLARATION BY THE CREDITOR UNDER VDIS, 1987. THERE WAS NO REFERENCE TO THE SAME BEFORE THE AO WHOSE NON-SA TISFACTION IS UNDER CHALLENGE AND NEITHER DOES IT FINDS MENTION IN THE ORDER OR THE F INDINGS BY THE LD. CIT(A) (REFER PARA 3 ABOVE ). IN FACT, THE SAME WOULD HAVE REQUIRED A REFERRAL BY HIM TO THE AO CALLING FOR HIS COMMENTS THEREON FOLLOWING THE PROCEDURE U/R 46A. IN FACT, THE CLAIM IS EVEN OTHERWISE TOTALLY UNSUBSTANTIATED . EVEN AS REGARD THE MERITS OF THE SAME, THERE IS N O REFERENCE TO THE AMOUNT OF DECLARATION MADE BY THE CREDITOR IN 1987, WHEREAT SHE WOULD BE BARELY 19 TO 20 YEARS OF AGE. FURTHER, THERE IS NO CORRELATION O R EVEN A STATEMENT TO THAT EFFECT, I.E., ITA. NO. 927/COCH./2008 5 BETWEEN THE SAME AND THE IMPUGNED CREDIT(S). IT IS THUS DIFFICULT TO PLACE ANY VALUE, IF AT ALL, ON THE SAME. TAKING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES INTO ACCOUNT, THE SAME CLEARLY HAS NO BEARING WHATSOEVER ON THE ASSESSEES CASE AND COULD NOT EVEN BE CONSIDERED AS A PART OF THE ASSESSEES EXPLANATION. 5.3 THE ASSESSEES CASE, AS WE OBSERVE, IS RATHER B ASED ON THE FACT OF THE RETURNS FOR THE RELEVANT YEAR AND THE PRECEDING YEARS HAVING BEEN F ILED BY THE CREDITOR, WHO ALSO STANDS ALLOTTED PAN BY THE DEPARTMENT. THE REVENUE, ON THE OTHER HAND, CONSIDERS THE SAME AS OF NO MOMENT; THE RETURNS BEING NON EST IN LAW. IN OUR VIEW THE REVENUES STAND MERITS APPROVAL. THIS IS, FIRSTLY, FOR THE REASON THAT THE RETURN(S) OF INCOME CANNOT ITSELF CONSTITUTE A PRIMARY PROOF OF THE INCOME, WHICH, NO TWITHSTANDING IT BEING RETURNED BY A PARTICULAR PERSON, BELONGS TO, AND FOR THAT REASON, ASSESSABLE ONLY IN THE HANDS OF THE PROPER PERSON. IN OTHER WORDS, THE MERE FILING OF R ETURN OF INCOME BY A PERSON WOULD NOT AUTOMATICALLY ESTABLISH THE SAME TO BE HIS INCOME, I.E., DE HORS ANY OTHER MATERIAL OR EVIDENCE. THE SAME IS ONLY IN THE NATURE OF A SECON DARY EVIDENCE, WITH SUPPORTIVE VALUE, I.E., WHERE THERE IS MATERIAL TO SHOW OR CONTEND TH AT THE INCOME RETURNED REPRESENTS THE INCOME OF THE RETURNER. WHY, THE MERE FACT OF NON-F ILING OF THE RETURN OF INCOME, FOR WHICH THERE COULD BE STRONG AND VALID REASONS UNDER THE CIRCUMSTANCES, OR EVEN AN OMISSION TO FURNISH THE SAME IN TIME, WOULD NOT OPE RATE TO DILUTE OR UNDERMINE AN OTHERWISE SATISFACTORY PROOF OF INCOME OR OF OWNERS HIP AND TRANSFER OF FUNDS BY THE CREDITOR TO THE ASSESSEE-DEBTOR. THAT IS, AN INCOME CANNOT BE SAID TO BE NOT OF THE CREDITOR ONLY FOR THE REASON OF HIS FAILURE TO HAVE RETURNED THE INCOME TO THE REVENUE IN TIME, WHICH COULD BE FOR OTHER INCIDENTAL REASONS, SO AS TO BE DEFEATING OF THE ASSESSEES CASE, I.E., IF HE IS OTHERWISE ABLE TO DEMONSTRATE THE CA PACITY OF THE CREDITOR AND THE ACTUAL REMITTANCE BY THE CREDITOR TO HIM. IN ANY CASE, IT CANNOT OPERATE TO DILUTE THE BURDEN OF PROOF CAST ON THE ASSESSEE U/S. 68. RATHER, FILING OF RETURN(S) OF INCOME, PAYING A NOMINAL TAX THEREON, COULD BE A RUSE, AS INFERRED BY THE AO IN THE PRESENT CASE AS WELL, TO SUBSTANTIATE ITS CASE WITH SOME `EVIDENCE, PARTICU LARLY WHERE NONE ELSE EXISTS, AND THERE IS AN ADMITTED CLOSE RELATIONSHIP BETWEEN THE ASSES SEE AND THE CREDITOR AS, AGAIN, IN THE INSTANT CASE. REFERENCE IN THIS CONTEXT IS DRAWN TO THE DECISIONS IN THE CASE OF ITA. NO. 927/COCH./2008 6 JAMNAPRASAD KANHIAYALAL V. CIT , 130 ITR 244 (SC); RADHEY SHYAM TIBREWAL V. CIT , 145 ITR 186 (SC). 5.4 GOING FURTHER, THE RETURNS IF THE DOCUMEN TS, BEING NON EST UNDER LAW, COULD BE SO CALLED, THEMSELVES BELIE THE ASSESSEES CLAIM. THE RE IS NO REFERENCE TO ANY SOURCE IN THE SAID RETURNS, AND REMAINED UNDISCLOSED EVEN ON BEIN G CALLED UPON TO FURNISH THE SAME. THE SAME CORROBORATE HER OWN STATEMENT DURING THE S EARCH IN JANUARY, 2004 WHEREIN THE CREDITOR ADMITTED TO HAVING NO SOURCE OF INCOME OF HER OWN, AND BEING SOLELY A HOMEMAKER. FURTHER, SHE WAS NOT PRODUCED BEFORE THE ASSESSING AUTHORITY WHEN THE MATTER WAS UNDER EXAMINATION BY HIM. THE SAME IS SE LF-DEFEATING OF THE ASSESSEE, HER HUSBANDS, CASE, AND MORE SO AS NO EXPLANATION FOR THIS NON-PRODUCTION STOOD MADE BEFORE ANY AUTHORITY. THIS PRODUCTION WAS NECESSARY AS ONLY SHE COULD POSSIBLY ANSWER THE VARIOUS QUESTIONS THAT ARISE IN THE GIVEN CIRCU MSTANCES IN RELATION TO THE CREDIT(S) UNDER REFERENCE, AND THUS ENABLE DETERMINATION OF T HE CREDITWORTHINESS (CAPACITY) OF THE CREDITOR AS WELL AS THE GENUINENESS OF THE TRANSACT ION, VIZ. OF THE SAME BEING HER PROPERTY LENT TO HER HUSBAND IN THE NORMAL COURSE. WAS HER STATEMENT U/S. 132(4) DATED 8/1/2004 RETRACTED BY HER SUBSEQUENTLY AT ANY TIME ? WAS, IF SO, ANY RETURN(S) OF INCOME FILED QUA HER UNDISCLOSED INCOME IN CONSEQUENCE THERETO ? EVEN IF IT IS NOT SO, HAD ANYTHING TRANSPIRED IN THE INTERIM, SO THAT THERE WAS CHANGE IN THE CIRCUMSTANCES OR HER STATUS, WHEREBY SHE HAD ACQUIRED A SOURCE OF INCOME? FURTHER, WHY WERE THE RETURNS; THE INCOME HAVING BEEN OSTENSIBLY EARNED DURING THE RELEVANT Y EARS, NOT FILED IN TIME ? HOW WAS THE INCOME, WHICH IS FLOWING ON REGULAR BASIS, BEING EA RNED, I.E., THE MANNER; IN WHAT FORM WAS IT BEING REALIZED, AND IF IN CASH, WAS IT BEING HELD AS SUCH ? WHY WAS IT NOT AS MUCH AS EVEN DEPOSITED IN BANK, SAY IN A SAVING DEPOSIT ACCOUNT, WHICH IS EQUALLY LIQUID ? WHY WAS THE SOURCE BEING CONCEALED, PARTICULARLY CONSID ERING THAT IT APPEARED TO BE A REGULAR SOURCE ? IT IS ONLY ANSWERS TO SUCH-LIKE QUESTIONS THAT CO ULD LEAD TO THE TRUTH IN THE MATTER, AND TO FURNISH WHICH, SO AS TO BE ABLE TO DO SO, WA S THE ASSESSEES OBLIGATION, FOR THE AO TO FORM A REASONABLE SATISFACTION AS TO THE OSTENSI BLE BEING THE REAL. WITH REGARD TO THE NON-FILING OF THE RETU RNS, SURELY, THE CREDITOR WOULD ONLY BE AWARE OF HER OBLIGATION UNDER THE INCOME-TAX LAW, H AVING IN FACT FILED A DECLARATION UNDER VDIS AS FAR BACK AS IN 1987, AS ALSO APPLIED FOR AL LOTMENT OF PAN. BESIDES, HER HUSBAND, ITA. NO. 927/COCH./2008 7 WHO WOULD ALSO ONLY BE AWARE OF THE SAME, IS A WEAL THY BUSINESSMAN WITH HEAVY INVESTMENTS, A REGULAR ASSESSEE HIMSELF, WITH ACCES S TO LEGAL EXPERTISE IN THE FIELD; AS ALSO APPARENT FROM THE FACT OF HER CASE BEING REPRESENTE D BY A LEADING FIRM OF CHARTERED ACCOUNTANTS OF ERNAKULAM, SO THAT RATHER THAN A SCE NARIO OF IGNORANCE OF LAW, ON WHICH THERE HAS BEEN IN FACT NO PLEADING, IT IS OF AN EST ABLISHED ACCESS TO EXPERT ADVICE ON TAX MATTERS. SO HOWEVER, THE AMOUNT STANDS RECEIVED BY THE ASSESSEE IN CASH, WHICH MODE STANDS PROSCRIBED BY LAW (S.269SS), AND ADDS FURTHE R INTRIGUE TO THE STORY SET UP BY THE ASSESSEE. JUXTAPOSE THIS WITH THE FACT THAT THE HU SBAND, AS AFOREMENTIONED, IS A WEALTHY BUSINESSMAN AND WHO HAD MADE HUGE INVESTMENTS DURIN G THE RELEVANT YEAR AND WAS, THUS, REQUIRED TO EXPLAIN THE SOURCE THEREOF AND HAD, IN FACT, HIMSELF OFFERED ABOUT RS. 20 LAKHS AS UNEXPLAINED INCOME, COMPLETES THE PICTURE, WITH THE CREDITOR-WIFE RETURNING HER INCOME TO THE REVENUE FOR ALL THE YEARS TOGETHER - DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OF THE ASSESSEE-HUSBAND AND AFTER BEING CALLED UPON TO FURNISH THE DETAILS OF THE INVESTMENTS WITH SOURCE THEREOF EVEN AS THE P RESCRIBED TIME LIMIT THEREFOR, EVEN BELATEDLY, HAD EXPIRED. IT DOES NOT TAKE MUCH STRA IN, THEN, TO CONCUR WITH THE INFERENCE OF THE AO THAT THE `CASH LOAN TO THE ASSESSEE FROM TH E WIFE WAS ONLY TO `FILL UP THE `SHORTAGE IN CASH WHICH HE EXPERIENCED IN EXPLAINI NG THE SOURCE OF HIS DECLARED INVESTMENTS. ALSO, IT WOULD NOT BE OUT OF PLACE TO MENTION THAT THE TOTAL INCOME DECLARED FOR ALL THE YEARS, I.E., NET OF TAX, ALSO DOES NOT MATCH UP TO THE CREDIT AMOUNT, BEING AT RS. 5.50 LACS, WHILE IF THE INCOME FOR THE CURRENT YEAR WERE TO BE DEDUCTED, AND ONLY UNDERSTANDABLY SO, THE SAME WOULD STAND FURTHER RED UCED TO RS. 4.66 LACS. WE MAY FURTHER HASTEN TO ADD THAT IN FACT THE AO, AND THEREFORE, W E, IN ENDORSEMENT OF THE REVENUES CASE, NEED NOT HAVE IN LAW EVEN TRAVELLED THUS FAR, I.E., TO CLAIM THE ARRANGEMENT TO BE AN ARTIFICE; THE ONUS U/S. 68 BEING SQUARELY ON THE AS SESSEE, AND SEPARATELY ON EACH OF THE THREE PARAMETERS, IT WOULD SUFFICE WHERE THERE IS M ATERIAL TO EXHIBIT THAT THE NON- SATISFACTION OF THE AO WITH THE ASSESSEES EXPLANAT ION IS NOT UNREASONABLE, AND THE ASSESSEE HAD THEREFORE UNDER THE CIRCUMSTANCES FAIL ED TO DISCHARGE THE ONUS CAST ON IT. THE FOREGOING ANALYSIS THUS WAS SOLELY FOR THE PURPOSE OF EXAMINING THE REASONABILITY OF THE AOS NON-SATISFACTION AND, THUS, APPLICATION OF MIN D IN HIS BEING SO. ITA. NO. 927/COCH./2008 8 6.1 COMING TO THE FINDINGS BY THE LD. CIT(A), WE FI ND THEM AS VAGUE, INSOFAR AS THEY RELATE TO PROVING THE CAPACITY OF THE CREDITOR AS W ELL AS THE GENUINENESS OF THE TRANSACTION, BEING REMOVED FROM THE UNDISPUTED FACTS AND CIRCUMS TANCES OF THE CASE, WHICH ARE CORROBORATIVE IN NATURE, SO THAT WE FIND THEM TO BE INFIRM. IN VIEW OF THE CLEAR ONUS CAST BY LAW ON THE ASSESSEE TO PROVE THE CREDIT, AND ON THE PARAMETERS SPECIFIED, THE MERE FILING OF CONFIRMATION BY THE ASSESSEE WOULD BE OF LITTLE CONSEQUENCE. HIS ASSERTION THAT THE AO, BY EMPHASIZING ON THE SOURCE OF CREDITORS INCOME, IS, IN EFFECT, INQUIRING ABOUT THE SOURCE OF SOURCE, IS MISCONCEIVED. THE SOURCE O F THE CREDIT IS NOT THE CREDITOR HERSELF, WHOSE IDENTITY IS NOT IN DOUBT, BUT OSTENSIBLY HER CAPITAL OR INCOME OR BOTH, WHICH REMAIN TO BE ESTABLISHED. CLAIMING INCOME WITHOUT ESTABLIS HING OR SHOWING A SOURCE - WHICH REMAINS UNDISCLOSED IN THE PRESENT CASE - IS AKIN T O LAYING CLAIM ON THE FRUIT WITHOUT THERE BEING A TREE OR PLANT IN THE FIRST PLACE. IT WOULD BE THUS GROSSLY INCORRECT TO SAY THAT THE SOURCE OF FUNDS STANDS PROVED BY THE ASSESSEE. 6.2 THE DECISION IN THE CASE OF ORISSA CORPORATION (SUPRA), WHEREIN IT WAS, IN RATIO, HELD THAT UNDER THE GIVEN CIRCUMSTANCES OF THE ASSE SSEE BEING FOR COMPULSIVE REASONS UNABLE TO PRODUCE THE CREDITOR, WHOSE WHEREABOUTS A RE AVAILABLE WITH THE REVENUE, THE SAID FACT (OF NON-PRODUCTION) SHOULD NOT BE HELD AG AINST THE ASSESSEE SO AS TO BE DECISIVE OF THE MATTER, IS CLEARLY INAPPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE; THERE BEING, AS ALSO OBSERVED EARLIER, NO WHISPER OF ANY REASON FOR THE NON-PRODUCTION OF THE CREDITOR WHO IS ONLY THE ASSESSEES WIFE. IN THIS CONTEXT WE ALSO DRAW SUPPORT FROM THE DECISION IN THE CASE OF S. PUNJABI V. ACIT , 62 TTJ (MAD.) 749. 7. IN VIEW OF THE FOREGOING, WE SET ASIDE THE I MPUGNED ORDER AND RESTORE THAT OF THE ASSESSING OFFICER. WE DECIDE ACCORDINGLY. IN DOING SO, WE PLACE RELIANCE ON ALL THE DECISIONS CITED SUPRA BY THE REVENUE OR IN SUPPORT OF ITS CASE. 8. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 30TH JUNE, 2010 ITA. NO. 927/COCH./2008 9 GJ COPY TO: 1. SHRI N.K.MOHAMMED ALI, PARTNER YENKEY ROLLER FLO UR MILLS, CHEROOTY ROAD, CALICUT. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRA L CIRCLE-2, CALICUT. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R./I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT R EGISTRAR)