ITO, CHENNAI V. R.Andiappan, CHENNAI

ITA 943/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90432 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: N MUTHUKUMARAN RETD ACIT
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.943/MDS/2014 ( / ASSESSMENT YEAR : 2009-2010) INCOME TAX OFFICER, BUSINESS WARD XIII (1), CHENNAI 600 034 ( %& /APPELLANT) VS SHRI. R.ANDIAPPAN, NO.16, 21 ST MAIN ROAD, ANNA NAGAR WEST, CHENNAI 600 040. [PAN: AFTPR 6107D] ( !'%& /RESPONDENT) / APPELLANT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. / RESPONDENT BY : SHRI. N. MUTHUKUMARAN, RETD. ACIT /DATE OF HEARING : 21.05.2015 !' /DATE OF PRONOUNCEMENT : 29.05.2015. ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY REVENUE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VII, CHENNAI, DATED 03.12.2013 FOR THE ASSESSMENT YEAR 2009-2010. I.T.A.NO.943/MDS/2014. :- 2 -: 2. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO D ELETION OF ADDITION OF C5,21,500/- IN RESPECT OF DEPOSITS IN T AMILNADU MERCANTILE BANK, ANNANAGAR BRANCH AS UNEXPLAINED CASH CREDITS. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, CASH WERE FOUND CREDITED IN THE BANK ACCOUNT HELD BY THE ASSESSEE JOINTLY WITH HIS WIFE. WHEN Q UESTIONED ABOUT THE SOURCE FOR THE CREDITS, IT WAS EXPLAINED THAT THE M ONEY WAS TRANSFERRED FROM HIS SONS NRI ACCOUNT. NOT CONVINCED WITH THE REPLY OF THE ASSESSEE, A SUM OF C6,21,500/- WAS ADDED AS UNEXPLA INED CASH CREDIT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. ON APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION OF C1,00,000/-. HOWEVER IN RESPECT OF C5,21,500/-, HE OBSERVED THAT THE AMOUNT HAS BEEN TRANSFERRED TO AS SESSEE IN TMB ACCOUNT FROM HIS SONS ACCOUNT ON VARIOUS DATES AN D ACCORDINGLY DELETED THE ADDITION . AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AS SEEN FROM THE ORDER OF COMMISSIONER OF I NCOME TAX (APPEALS), THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT GIVEN REASON ON WHAT BASIS HE CAME TO THE CONCLUSION TH AT MONEY TO TMB I.T.A.NO.943/MDS/2014. :- 3 -: ACCOUNT HAS BEEN TRANSFERRED FROM ASSESSEES SONS BANK ACCOUNTS. NO DETAILS ARE COMING THROUGH IN HIS ORDER. IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO ASSESSEE TO PLACE NECESSARY B ANK ACCOUNTS SO AS TO PROVE THE TRANSFER OF FUNDS FROM HIS SONS BANK ACCOUNT TO ASSESSEES ACCOUNT. WITH THESE OBSERVATIONS, WE REM IT THE ISSUE BACK TO ASSESSING OFFICER FOR FRESH CONSIDERATION. 6. THE NEXT GROUND IN THIS APPEAL IS WITH REGARD TO D ELETION OF ADDITION OF C10,00,000/- DEPOSITED IN TMB ACCOUNT O UT OF SALE OF JEWELLERY. THERE WAS DEPOSIT OF C10,00,000/- I.E TW O DEPOSITS OF C 5,00,000/- EACH IN TMB ACCOUNT ON 30.01.2009. TH E ASSESSEE STATED THAT MONEY WAS DEPOSITED BY R. ANDIAPPAN OUT OF S ALE OF JEWELLERY BELONGING TO MRS. SUNGANTHAKUMARI ON 30.01.2009. 6.1 THE ASSESSEE IN HIS SWORN STATEMENT ON 16.12.20 11 HAS STATED AS UNDER:- MY WIFE MRS. SUGANTHAKUMARI EXPIRED ON 24.01.2009. HER JEWELLERY WAS SOLD FOR ABOUT 11 LAKHS AND THE CASH WAS DEPOSITED IN THE TMB ACCOUNT . 6.2 SUBSEQUENTLY ON 21.12.2011 THE ASSESSEE SUBMITT ED RECEIPTS FOR SALE OF JEWELLERY TOTALING C16.50 LAKHS. THE A SSESSEE STATED THAT OF THIS C10 LAKHS WAS DEPOSITED IN TMB BANK ON 30.0 1.2009 AND I.T.A.NO.943/MDS/2014. :- 4 -: C6.50 LAKHS IN CORPORATION BANK ON THE SAME DAY. T HE CASH ENTRY IN HIS ACCOUNT WAS MISSED OUT AND THEREFORE THE CASH B OOK SHOWS NEGATIVE BALANCE. THIS SHOULD BE CREDITED TO HIS P ERSONAL ACCOUNT IN THE BOOKS. THE ASSESSING OFFICER ADDED A SUM OF C1 0,00,000/- AS UNEXPLAINED CASH CREDITS. AGAINST THIS, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS ). 7. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY OBSERVING THAT THERE WAS CONFIRMATI ON IN THE FORM OF SALE RECEIPTS OF JEWELLERY FROM M/S. M.H. JEWELLER S P. LTD, TIRUNELVELI. WITHOUT MAKING A CROSS VERIFICATION WITH THE SELLER OF JEWELLERY, IT IS NOT KNOWN HOW THE ASSESSING OFFICER CAME TO THE CON CLUSION THAT THE SALE OF JEWELLERY BY THE ASSESSEE IS BOGUS. ACCORD ING TO COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE DISCHARGED HIS ONUS BY FURNISHING BILLS FOR JEWELLERY SALES. IT I S FOR THE ASSESSING OFFICER TO DISPROVE THE CLAIM WHICH WAS NOT DONE BY THE ASSESSING OFFICER. ACCORDING TO THE COMMISSIONER OF INCOME T AX (APPEALS) ADDITION CANNOT BE MADE BY SURMISE. OWNING OF JEWE LLERY, RATE OF WHICH IT WAS SOLD, MARKET RATE FOR NEW ORNAMENTS, C OMPARISON OF OLD GOLD JEWELS WITH NEW ONES ETC., WERE NOT ANALYZED A ND NO CONCLUSION WAS ARRIVED AT BY THE ASSESSING OFFICER. HENCE, THE COMMISSIONER OF I.T.A.NO.943/MDS/2014. :- 5 -: INCOME TAX (APPEALS) DELETED THE ADDITION. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE, THE ASSESSEE IN SUPPORT OF HIS CONTENTION FILED SALE RECEIPTS OF JEWELLERY FROM M/S. M.H. JEWELLERS PVT. LIMITED, TIRUNELVELI. DESPITE OF THESE DOCUMENTS SUPPORTING THE CLAIM OF THE ASSESSEE, THE ASSESSING OFFICER REJECTED THE CLAIM. IN OUR OPINION, THIS EVIDENCE CANNOT BE ACCEPTED IN VIEW OF THE SUR ROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES. UNDER SECTI ON 68 OF THE ACT, THE BURDEN IS OF THE ASSESSEE TO POINT OUT THE NATU RE AND SOURCE OF MONEY CREDITED IN THE BOOKS OF ACCOUNTS. IF THE ASS ESSEES EXPLANATION IS NOT SATISFACTORY, IT IS OPEN TO ASSE SSING OFFICER TO ADD THE SAME AS INCOME. THE ASSESSING OFFICER POINTED OUT VARIOUS DISCREPANCIES AS UNDER:- 1) THE RECEIPTS FOR SALE OF JEWELLERY ARE GIVEN BY M/S. M.H. JEWELLERS P. LTD TIRUNELVELI. 2) BILLS/RECEIPTS OF 8,86,760/- GIVEN IN THE NAME OF MR. ANDIAPPAN AND FOR 7,44,108/- IN THE NAME OF MR. YOGANANTH. 3) THE BILLS HAVE BEEN MADE ON VARIOUS DATES BETWEEN 01.11.2008 AND 22.01.2009. ALL THE RECEIPTS ARE FOR LESS THAN 20,000/- AND ALL HAVE PAID IN CASH. I.T.A.NO.943/MDS/2014. :- 6 -: 4) THE RECEIPTS DO NOT CONTAIN ANY DESCRIPTION OF JEWELLERY. IT IS ONLY MENTIONED AS OLD GOLD IN ALL THE BILLS. 5) THE RECEIPIT SUBMITTED CONTAIN THE SIGNATURES OF MR. ANDIAPPAN AND YOGANANTH IN RESPECT OF JEWELLERY STATED TO BE SOLD BY THEM. NO EVIDENCE IS SUBMITTED BY THE ASSESSEE TO PROVE THAT EITHER HE OR HIS SON MR. YOGANANTH, WHO IS AN NRI WERE AVAILABLE IN TIRUNELVELI TWON ON THE SAID DATES TO SELL THE JEWELLERY. 6) NO EXPLANATION IS OFFERED BY THE ASSESSEE AS TO WHY HE, AN OCTAGENARION HAD TO GO ALL THE WAY TO TIRUNELVELI TO SELL JEWELLERY WHEN THE SAME COUL D HAVE BEEN SOLD IN CHENNAI WHERE HE RESIDES. 7) NO EVIDENCE IS SUBMITTED BY THE ASSESSEE REGARDING THE EXISTENCE OF THE JEWELLERY IN THE FIRST HAND. 8) NOT EVEN ON THESE CASH RECEIPTS IS REFLECTED I N THE CASH BOOK OF THE ASSESSEE. THE CLAIM THAT THE CASH BOOK ENTRY IN THAT ACCOUNT WAS MISSED OUT AND THEREFORE THE CASH BOOK SHOWS NEGATIVE BALANCE IS NOT ACCEPTABLE. 9) AS ALREADY STATED ABOVE, THE ASSESSEE IN HIS SWORN STATEMENT HAS CLAIMED JEWELLERY FOR SOLD FOR ABOUT 11 LAKHS AND NOW THE ASSESSEE SUBMITS RECEIPTS FOR SALE OF JEWELLERY FOR 16.50 LAKHS. THE ASSESSEE IS THUS CONTRADICTING HIS OWN STATEMENT. 10) AS PER THE RECEIPTS, THE ASSESSEE HAS RECEIVED A CASH OF 57,312/- ON SALE OF JEWELLERY ON 12.11.2011. THE ASSESSEE IN HIS CLAIM OF TRAVELLING EXPENSES DEBITED TO THE P & L ACCOUNT HAS SUBMITTED VOUCHERS WHEREIN HE HAS CLAIMED TO HAVE BEEN ON A 5 DAY VISIT TO KRISHNAGIRI DURING 8.11.2008 TO 12.11.2008. THE ASSESSEE POSSIBLY COULD NOT HAVE BEEN IN TWO PLACES ON THE SAME DATE. SIMILARLY, WHILE THE ASSESSEE HAD CLAIMED TO HAVE BEEN ON A TWO DAYS VISIT TO HOSUR ON 22.11.2008 & 23.11.2008, HE HAS SOLD I.T.A.NO.943/MDS/2014. :- 7 -: JEWELLERY AT TIRUNELVELI ON 22.11.2008 FOR 39,010/- 11) ALL THESE PROVE THAT THE RECEIPTS SUBMITTED BY THE ASSESSEE FOR SALE OF JEWELLERY ARE BOGUS AND HENCE DESERVE NO MERIT. AS ALL THE CASH RECEIPTS HAVE NOT BEEN ACCOUNTED AT ALL IN THE BOOKS OF THE ASSESSEE, THE ENTIRE CLAIM OF DEPOSITS OF 10 LAKHS BEING MADE OUT OF SALE OF JEWELLERY IS NOT ACCEPTED. EVEN BEFORE US, THE ASSESSEES COUNSEL WAS NOT ABLE TO GIVE SATISFACTORY EXPLANATION ABOUT THE DISCREPANCIES PO INTED OUT BY THE ASSESSING OFFICER. THIS OUGHT TO HAVE BEEN EXPLAINE D BY THE ASSESSEE WHEN SALE RECEIPTS WERE DIFFICULT TO BE ACCEPTED AS GENUINE. IN OUR OPINION, THE ASSESSEE HAD ATTEMPTED TO GIVE A COLO UR OF GENUINENESS TO THE TRANSACTION BY WAY OF SALE OF JEWELLERY AS T HE ASSESSEE FAILED TO EXPLAIN THIS TRANSACTION BY PROVIDING BILLS FOR PUR CHASE OF JEWELLERY AT FIRST INSTANT. UNLESS AND UNTIL THE ASSESSEE EXPLA INS HOW IT HAS ACQUIRED THE JEWELLERY, THE TRANSACTION CANNOT BE B ELIEVED. THUS, THE ASSESSING OFFICER RIGHTLY REJECTED THE ATTEMPT OF T HE ASSESSEE BY POINTING OUT VARIOUS DISCREPANCIES. BEING SO, THE CLAIM THAT CREDIT REPRESENTING SALE OF JEWELLERY CANNOT BE ACCEPTED A S IT RUNS COUNTER TO THE HUMAN PROBABILITY AND THE NORMAL COURSE OF HUMA N CONDUCT. I.T.A.NO.943/MDS/2014. :- 8 -: 9. ACCORDINGLY, IN OUR OPINION, THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF CREDIT AND THE SAME IS TO BE CONSIDERED A S UNEXPLAINED INCOME OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.943/MDS/2014 IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON FRIDAY, THE 29TH DAY OF MAY , 2015, AT CHENNAI. SD/- SD/- ( ! ) (CHALLA NAGENDRA PRASAD) ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ /CHENNAI. %& /DATED:29.05.2015. KV &' () *) /COPY TO: 1. + APPELLANT 2. / RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. )-. / /DR 6. .0 1 /GF.