Dr. Yusuf A. Kumble., Mangalore V. The Deputy Commissioner of Income Tax, Central Circle, Mangalore., Bangalore

ITSSA 7/PAN/2015

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6663 (ITAT-PANAJI)
• Duration Of Justice: 6 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 07-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retraction
• Section: 142(1); 133A; 153A

Judgement Text

आयकर अपीऱीय अधिकरण न्यायपीठ पणजी म ें । IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI (Through Virtual Court) BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER IT(SS)A Nos.07 & 08/PAN/2015 नििाारण वषा / Assessment Years : 2006-07 & 2008-09 Dr. Yusuf A. Kumble, 703, West Wind, Near DC Bungalow, Collector’s Gate, Mangalore PAN : AFHPA0556M .......अऩीऱाथी / Appellant बिाम / V/s. The Deputy Commissioner of Income Tax, Central Circle, Mangalore ......प्रत्यथी / Respondent Assessee by : Shri Narendra Sharma Revenue by : Shri Sourabh Nayak स ु नवाई की तारीख / Date of Hearing : 09-11-2021 घोषणा की तारीख / Date of Pronouncement : 09-12-2021 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : These two appeals by the assessee against the common order dated 29-07-2015 passed by the Commissioner of Income Tax (Appeals)-2, Panaji [‘CIT(A)’] for assessment years 2006-07 and 2008-09. 2. We find that the issues raised in both appeals are similar, based on same identical facts. Upon hearing both the parties, we proceed to hear 2 IT(SS)A Nos.07 & 08/PAN/2015, A.Ys. 2006-07 & 2008-09 both the appeals together and to pass a consolidated order for the sake of convenience. 3. First, we shall take up the appeal of assessee in IT(SS)A No.07/PAN/2015 for A.Y. 2006-07. 4. Ground No. 1 raised by the assessee is general in nature, hence, requires no adjudication. 5. Ground Nos. 2 to 3.4, the ld. AR submits that the assessee is not interested to prosecute ground Nos. 2 to 3.4 and requested to treat the same as not pressed. Accordingly, the same are dismissed as not pressed. 6. Ground No. 4 raised by the assessee challenging the action of CIT(A) in confirming the order of AO by holding an amount of Rs.9,50,000/- is liable to be taxed in the hands of the assessee in the facts and circumstances of the case. 7. Heard both the parties and perused the material available on record. We note that the assessee is an individual. A search was conducted in the premises of the assessee on 23-11-2011. During the said search the respondent-revenue stated to have seized a bank passbook of Catholic Syrian Bank in the name of Ms. Nifri Azeez who is the wife of the assessee, from which cash deposits of Rs.9.5 lakhs on 03-03-2006 and Rs.9 lakhs on 28-12-2007 were found. It is also noted from Para No. 4 of the assessment order that the assessee admitted that the cash deposits were made by him and his wife together and no explanation was offered for the source of the said cash deposits, according to the AO that the assessee offered the said two sums as additional income for taxation in A.Ys. 2006-07 and 2008-09. 3 IT(SS)A Nos.07 & 08/PAN/2015, A.Ys. 2006-07 & 2008-09 8. Be that as it may, in view of search, a notice u/s. 153A of the Act was issued on 14-03-2012 and in response to which the assessee filed return of income declaring a total income of Rs.11,03,710/-. Notices u/s. 143(2) and 142(1) of the Act were issued and the authorized representative on behalf of the assessee appeared before the AO and details were submitted as called for. According to the AO, the assessee did not declare the additional income as offered during the course of search in the return of income filed in response to section 153A of the Act and filed a letter stating that the additional income so found during the course of search has been offered by the wife of assessee for Block Period 2006-07 to 2011- 12. The AO analyzed the letter filed by the assessee together with the letter dated 15-10-2013 explaining the source of cash deposits by assessee’s wife. The AO to verify the source of cash deposits issued a notice dated 28- 02-2014 to one by name Shri A. Haneefa, Managing Partner of Aramana Jewellers. Having not satisfied with the explanation as offered by the wife of assessee and also the statements given by Shri A. Haneefa, Managing Partner of Aramana Jewellers, the AO by rejecting the same, proceeded to determine the substantive assessment in the hands of the assessee to an extent of Rs.9,50,000/- and protective assessment in the hands of the wife of the assessee. The ld. AR submits that the protective assessment as made in the hands of the wife of the assessee has been deleted by the CIT(A) having jurisdiction, we find no dispute by the ld. DR in this regard. 9. The CIT(A) in first appeal did not accept the version of assessee that he admitted the cash deposits found in his wife account out of pressure, in the absence of any retraction statement to that effect the CIT(A) did not find any infirmity in the order of AO and confirmed the substantive assessment in the hands of the assessee relating to the cash deposit of Rs.9,50,000/- found in the passbook of his wife in pursuance of statement 4 IT(SS)A Nos.07 & 08/PAN/2015, A.Ys. 2006-07 & 2008-09 recorded on the date of search. The ld. AR submits that when the wife admitted the cash deposits in her passbook of her own and explained the source of cash deposits by giving confirmation from whom as how the cash was availed and no addition can be made in such circumstances in the hands of assessee. He vehemently argued when cash deposits were found in the account of other than the assessee no addition is maintainable in the hands of the assessee. He referred to case law in the case of K. Chinnathamban reported in 292 ITR 682 (SC) and submitted where a deposit stands in the name of a third person and where that person is related to the assessee, the proper course would be to call upon the person in whose books the deposit appears or the person in whose name the deposit stands to explain such deposit. Therefore, we note that according to ld. AR when the cash deposits were found in the assessee’s wife account, when she admitted by letter dated 15-10-2013 and filed confirmation by explaining the source of cash deposits the additions made in the hands of the assessee is liable to be deleted. 10. In the case of K. Chinnathamban (supra), the facts, that he i.e. K. Chinnathamban is connected with a firm by the name M/s. V.V. Enterprises which was managed by one K. Palanisamy and a search was conducted in the said premises by police officers wherein Rs.1.18 crores was seized. The said seizure was followed by a survey u/s. 133A of the Act by the Income Tax Department. The AO treated the said amount as undisclosed income of persons in whose names the deposit appeared and in respect of K. Chinnathamban was at Rs.5.16 lacs. The order of AO was upheld by the CIT(A). The Tribunal held to link up all these amounts with the books of the firm. The Hon’ble High Court dismissed the appeal of the respondent-revenue by holding no substantial question of law. The Hon’ble Supreme Court held the Tribunal had erred in directing linking up 5 IT(SS)A Nos.07 & 08/PAN/2015, A.Ys. 2006-07 & 2008-09 of the deposits with the accounts of M/s. V.V. Enterprises by holding that the onus of proving the source of deposit primarily rested on the persons in whose names the deposit appeared in various banks and the Department was right in making individual assessments in the hands of K. Chinnathamban and also individual assessments in the names of other assessee. 11. We note, in the present case, admittedly, the bank passbook relating to wife of assessee was seized and in 153A proceedings the assessee filed letter stating that the cash deposits found in his wife accounts were belong to her and she offered the same for taxation. The AO and CIT(A) did not consider the same and rejected the said explanation by holding its an afterthought. In the case of K. Chinnathamban (supra) the Hon’ble Supreme Court held the onus of proving the source of cash deposits primarily rested on the persons in whose names the deposit appeared. In the present case the wife of assessee also filed letter in the 153A proceedings stating that cash deposits as reflected in her bank account belong to her and explained the source of cash deposits and in view of the same, in our opinion, the wife of assessee discharged her duty in explaining the source of cash deposits by admitting the said cash deposits belong to her and offered the same for taxation, still, the Respondent- revenue adding the same cash deposits in the hands of assessee is not justifiable and the CIT(A) erred in holding the cash deposits as found in the account of assessee’s wife belonging to the assessee disregarding the explanation offered by the assessee’s wife . Therefore, the ratio laid down by the Hon’ble Supreme Court in the case of K. Chinnathamban (supra) is clearly applicable to the facts and circumstances of the present case. 6 IT(SS)A Nos.07 & 08/PAN/2015, A.Ys. 2006-07 & 2008-09 12. We will be falling in our duty, if we don’t deal with the contention of the respondent-revenue that when the assessee himself offered to tax particular income through statement recorded u/s. 132(4) of the Act during such proceedings. No doubt an admission made by the assessee is substantial piece of evidence which can be used against him/her, but, in our opinion, is not conclusive and it is open to the assessee to show that the statement made earlier is incorrect and was given under some erroneous impression. In the present case, the facts remains admitted, the assessee disclosed the impugned amount during the course of search proceedings and in 153A proceedings he categorically stated that the said amount is belongs to his wife and the same has been offered to tax by her. We find, in the impugned order at Para No. 8.4 the CIT(A) also recorded that the assessee replied the statement u/s. 132(4) of the Act admitting the cash deposits belongs to him was given under pressure during search which clearly shows that the assessee made such statement in some erroneous impression. Further, mere admission by the assessee during the course of search by way of statement recorded u/s. 132(4) of the Act, itself, cannot form the basis for making addition in the hands of assessee. It is incumbent upon the AO to bring on record independently the evidence in support of such statement. The fact that the assessee’s wife has offered to tax in her hands would go to show that the said cash deposits as found in the seized document vide bank account belong to her. Mere confession cannot form the basis for addition and there is no estoppel against law. It is always open to the assessee to demonstrate and satisfy the authorities concerned that a particular income was not taxable in its hands. Therefore, in our opinion, the assessee satisfactorily demonstrated in 153A proceedings that the cash deposits found in its wife accounts does not belong to him and the wife also admitted through letter before the AO that the cash deposits belonged to her and offered to tax. Thus, the addition of 7 IT(SS)A Nos.07 & 08/PAN/2015, A.Ys. 2006-07 & 2008-09 Rs.9,50,000/- made by the AO as confirmed by the CIT(A) is not substantiated and it is deleted. Thus, the ground No. 4 raised by the assessee is allowed. IT(SS)A No. 08/PAN/2015 (A.Y. 2008-09) 13. The grounds raised by the assessee in appeal for A.Y. 2008-09 are identical to the one adjudicated by us in A.Y. 2006-07. Since, the issue in both the appeals are identical, the findings given by us while adjudicating assessee’s appeal in IT(SS)A No. 07/PAN/2015 would mutatis mutandis apply to the present appeal, as well. For the detailed reasons given above, the appeal of the assessee is allowed for the A.Y. 2008-09, as well. 14. In the result, both the appeals of assessee are allowed. Order pronounced in the open court on 09 th December, 2021. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 09 th December, 2021. RK आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-2, Panaji 4. The Pr. CIT, Central, Mangalore 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩणजी, / DR, ITAT, Panaji. 6. गार्ड फ़ाइऱ / Guard File. //सत्यावऩत प्रतत// True Copy// आदेशान ु सार / BY ORDER, तनजी सधिव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩ ु णे / ITAT, Pune