MR. LAZER GNANAPRAGASAM,SIVAGANGAI V. ITO, WARD-1, , KARAIKUDI

ITA 1802/CHNY/2024

AI Insights

The case involves Mr. Lazer Gnanapragasam, who appealed against the additions made by the Income Tax Officer, Ward-1, Karaikudi, which were sustained by the CIT(A), NFAC, Delhi. The primary issues in the appeal were the additions of Rs.14,16,000 for unexplained cash deposits and Rs. 19,25,219 for unexplained car loan installments. The assessee argued that the cash deposits were gifts from his relatives, and the loan installments were misrepresented by the bank. The Tribunal found that the revenue did not provide sufficient evidence to doubt the genuineness of the cash deposits and noted discrepancies in the bank's certificate regarding the loan installments, leading to the remand of this issue for further verification.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46378 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 27-06-2024
• Other Referred Cases: ITA No.1295/Chny/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: P.S.PRABHAKAR
• Keywords: Set aside; Gift
• Section: 69A

Judgement Text

"आयकर अपीलीय अधिकरण, ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 1802/Chny/2024 निर्ाारण वर्ा /Assessment Years: 2017-18 Mr.Lazer Gnanapragasam, Old No.101, New No.163/27 Puliadithammam, Puliadithammam Post, Sivagangai Dist, Tamil Nadu-630551 [PAN: APIPG9941H] The Income Tax Officer, Ward-1, Karaikudi, (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Appellant by : Shri P.S.Prabhakar, CA प्रत्यर्थी की ओर से /Respondent by : Ms.Gouthami Manivasagam, JCIT सुिवाई की तारीख/Date of Hearing : 04.11.2024 घोर्णा की तारीख /Date of Pronouncement : 08.11.2024 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed against the order bearing DIN & Order No.ITBA/NFAC/S/250/2024-25/1064595069(1) dated 02.05.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2017- 18. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 02.05.2024 passed by NFAC, Delhi. ITA No.1802/Chny/2024 :- 2 -: 2.0 At the outset, the Ld. Counsel for the assesse informed that it wishes to withdraw and consequently not press the additional grounds of appeal which it had filed under Rule-11 of ITAT Rules. The request of the assesse has been accepted and the additional grounds of appeal filed stands dismissed as withdrawn. 3.0 The first issue which emanates from the grounds of appeal is regarding the addition of Rs.14,16,000/- made by the Ld. AO on account of unexplained cash deposits in assesse’s bank account and which has been sustained by Ld. First Appellate Authority. The Ld. Counsel for the assesse submitted that the assesse is in the business of Vehicle Contractor and during the previous year under consideration it had received gifts from his wife and father which were deposited in its bank account. The Ld. AO held the premise that it is improbable for assesse’s relatives to withdraw cash and for the assesse to deposit the same to his bank accounts as the same could have been done by way of bank transfer. He therefore held it as unexplained cash deposits. The Ld. First Appellate Authority confirmed the order of the Ld. AO holding identical premises, including the absence of gift deed etc. makes the genuinness of transactions difficult for acceptance. The Ld. Counsel or the assesse argued that execution of gift deed would not make the gift per se in ITA No.1802/Chny/2024 :- 3 -: genuine if there are supporting circumstantial evidences. It was explained that there have been cash withdrawals from the bank accounts of donors and absence of bank transfers would not make gift per se as in genuine. It was also argued that the Ld. AO has not doubted the credit worthiness of the donors. In support of its contentions, the Ld. Counsel for the assesse placed reliance upon decision of the coordinate bench of this tribunal in ITA No.1295/Chny/2024. The Ld. DR placed reliance upon the orders of authorities below. 4.0 We have heard rival submissions in the light of material available on records. At the outset, the reliance placed by the Ld. Counsel for the assesse upon decision of the coordinate bench of this tribunal in ITA No.1295/Chny/2024 has been found to be misplaced on account of facts being clearly distinguished. However, we have noted that the Ld. AO has primarily made the addition on account of absence of bank transfer. As there is no prohibition on cash gifts, their genuineness cannot be doubted merely on account of transactions not routed through banking channels. We also find that the Ld. AO has not doubted the credit worthiness of the donors. According to the information available on records, the donors being assesse’s father and his wife are retired government servant and government employee respectively and hence can be safely presumed to ITA No.1802/Chny/2024 :- 4 -: have sufficient credit worthiness to extend the impugned gifts. There is also no contemporaneous law which mandates that gifts should be preceded by gift deed and therefore the hypothesis of gifts being in genuine cannot be taken. Accordingly, we are of the view that the revenue has not been able to bring sufficient evidence on records to establish the in genuineness of impugned cash deposits in assesse’s bank accounts of Rs.14,16,000/-. Accordingly, the order of Ld. CIT(A) is set aside and the grounds of appeal raised by the assesse are allowed. We direct the Ld. AO to delete the addition of Rs.14,16,000/- made on account of cash deposits in assesse’s bank account claimed to have an nexus with the gifts made by his father and wife. Accordingly, all the grounds of appeal raised by the assesse on this issue are allowed. 5.0 The next issue pertains to an addition of Rs. 19,25,219/- made by the Ld. AO on account of payment of monthly instalment to Indusind Bank in respect of car loans taken by the assesse. The Ld. Counsel for the assesse submitted that the controversy has primarily arisen on account of a defective certificate issued by the Indusind Bank. It was argued that the Ld. AO had stated that out of the six instalments only one could not be explained and therefore he proceeded to make the impugned addition. The Ld. Counsel for the assesse invited our attention ITA No.1802/Chny/2024 :- 5 -: to page No.47 of bank’s certificate placed in the paper book filed by it, issued by Indusind Bank. It was stated that the bank has incorrectly written the word “correct balance” and that it should be actually written as “incorrect balance”. The Ld. Counsel or the assesse therefore argued that matter may be restored to the file of the Ld. AO for limited verification of this issue with the Indusind Bank and to decide accordingly. The Ld. DR fairly conceded that there does appear to be a case of some confusion created by the bank and that the issue can be resolved by the Ld. AO only after holding independent enquiries. 6.0 We have heard rival submissions in the light of material available on records. We have noted that there exists some connection between the controversy at hand and possibly a deficient certificate issued by the Indusind Bank. We also hold the view that the matter can be effectively examined at the end of the Ld. AO. We therefore set aside the order of lower authorities on this issue and we direct the Ld. AO to readjudicate the matter by obtaining a fresh certificate from the Indusind Bank and decide accordingly. The Ld. AO shall give opportunities of being heard to the assesse and it shall be bounden upon the assesse to comply with the notices issued by the Ld. AO. The grounds of appeal raised by the assesse on this issue are therefore allowed for statistical purposes. ITA No.1802/Chny/2024 :- 6 -: 7.0 Another issue raised by the assesse through its grounds of appeal are with reference to additions being made by the Ld. AO u/s 69A and the action of Ld. CIT(A) of its confirmation invoking provisions of u/s 69. In view of the discussions made in preceding paragraphs we are of the view that the impugned grounds of appeal have become academic in nature and hence devoid of any further adjudication. 8.0 In the result, the appeal raised by assesse is partly allowed for statistical purposes. Order pronounced on 8th , November-2024 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 8th , November-2024. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "