SRI K I VENKATESH V. THE DEPUTY COMMISSIONER

ITA/273/2015

AI Insights

The case involves appeals filed by Sri K I Venkatesh against the order of the Income Tax Appellate Tribunal (ITAT), which sustained additions made by the lower authorities as unexplained investments for the assessment years 1999-2000 and 2001-2002. The appellant contested the Tribunal's decision, arguing that the demand drafts in question were sourced from identified creditors and were used in the course of business. The Tribunal, however, found the appellant's explanations and evidence insufficient to prove the legitimacy of the transactions, leading to the confirmation of the additions. The High Court of Karnataka, upon reviewing the case, agreed with the Tribunal's findings and dismissed the appeals, stating that the issues raised were factual in nature and did not involve substantial questions of law.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 727107 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-02-2016
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: S PARTHASARATHI
• Keywords: Assessment years; Demand drafts; Income Tax; Unexplained investment
• Section: 69; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF FEBRUARY 2016 PRESENT THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MRS.JUSTICE S. SUJATHA ITA Nos.273-274/2015 BETWEEN: SRI.K I VENKATESH AGED 37 YEARS SON OF SRI KAMALAKAR D I NO.323, 14TH CROSS 2ND BLOCK, R T NAGAR BANGALORE-560 032. ….APPELLANT (BY SRI:S PARTHASARATHI, ADV) AND: THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-7(1) KENDRIYA SADAN KORMANGALA BANGALORE. …RESPONDENT (BY SRI:JEEVAN J NEERALGI, ADV) THESE APPEALS ARE FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, TO SET ASIDE THE ORDER OF THE ITAT BEARING ITA Nos.1081 AND 1082(BNG)/2012 PASSED 2 ON 06.02.2015 FOR THE ASSESSMENT YEARS 1999-2000 AND 2001-2002. THESE APPEALS COMING ON FOR ADMISSION THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING: JUDGMENT The appellant has preferred the present appeals by raising the following substantial question of law: “1. Whether the Tribunal was justified in sustaining the addition of Rs.10,00,955/- for the assessment year 1999-2000 as unexplained investment without accepting the confirmation of Sri Prakash Kattimani who had sourced the demand drafts and had also owned up the demand drafts by giving affidavit? 2. When Sri Prakash Kattimani having been identified and also available for examination, whether the Tribunal was justified in sustaining the impugned addition on surmise without even directing re-examination of the issue in light of the evidence provided by the appellant? 3. Whether the Tribunal was justified in sustaining the addition as unexplained investment in respect of demand drafts to the tune of Rs.14.5 lakhs and also Rs.5 lakhs when the appellant had identified the creditors and the source for obtaining the demand drafts? 3 4. When the demand drafts were obtained in the course of business from the parties who were identified and whose credit worthiness otherwise having not been doubted, whether the provisions of Section 69 of the Act were applicable on mere non-confirmation by letter of such payments by the creditors on account of either the failure to seek confirmation by the appellant or on account of their non- availability? 5. Whether in the interest of justice the Tribunal should have restore the case with regard to examination of above transactions when the appellant had brought to the notice of the Tribunal with regard to the details in connection with the above transactions?” 2. We have heard Mr.S Parthasarathi, learned Counsel appearing for the appellant-assessee and Mr.Jeevan J Neeralgi, learned Counsel appearing for the respondent- revenue. 3. We may record that the Tribunal in the impugned order after considering the contention raised on behalf of both the sides at paragraph 29 observed thus: “29. We have perused the orders and heard the rival contentions. First we take up the 4 addition of Rs.10,00,955/- which was confirmed by the CIT(A). It is an admitted position that Shri Prakash Kattimani in his confirmation dated 14.02.2012 had stated that he had no banks statement or books of accounts with him to show the source of the payment. A look at the affidavit of Shri Prakash Kattimani does not prove anything. It simply gives the cheque Nos. through which payment of Rs.10,00,955/- was effected. This would not in any way show that the payments were made by Shri Prakash Kattimani himself. Nor does it show any light of the credit worthiness of Shri Prakash Kattimani. Further, the assessee had changed his version before the CIT(A). Before the AO it had given in the confirmation letter from one Dasharath and one M/s Amar Trading Co., against the above sum of Rs.10,00,955/-. Before the CIT(A) assessee roped in one Shri Prakash Kattimani as the creditor, to whom he claimed he had given sub- lease of Ron Taluk Range. In the circumstances, we are of the opinion that the lower authorities were justified in disbelieving the version given by the assessee and making addition of Rs.10,00,955/-.” Further, at paragraph 47, it was observed thus: “Vis-à-vis addition of Rs.14,50,000/- which the assessee claims to have obtained from 5 Sri.Govindaiah Goud, it is an admitted position that confirmation of Sri.Govindaiah Goud, itself was only for Rs.20.00 lakhs and not for Rs.34,50,000/-. Similarly, assessee was unable to produce any credible evidence for loan alleged to have been obtained from Sri U A Ballal and Sri M J Torgal, Rs.2,00 lakhs and 5.00 lakhs respectively. We rare therefore, of the opinion the CIT(A) justified in confirming these additions.” 4. The aforesaid shows that on facts, the Tribunal found that the version or rather explanation given by the assessee is not believed by the lower authority after considering the facts on record and ultimately, the Tribunal found that the addition made of Rs.10,00,955/- and further the addition made of Rs.14,50,000/- was not unjustified. 5. As such, when the unexplained income or money is found or comes on record, the burden would be upon the assessee to sufficiently explain the income or the money having been received from the lawful source and if the explanation is not found to be satisfactory, upon the evidence produced on record on behalf of the assessee, after appreciating the various records the additional income is permissible. When the findings is recorded by the Tribunal 6 that the explanation was not sufficiently given and was not found to be satisfactory and has been disbelieved, in our view, such would be essentially the question of facts which would be beyond the scope of judicial scrutiny, since the present appeal would be limited to substantial question of law. 6. In view of the above, we find that no substantial question of law arises for consideration. Under these circumstances, the appeals do not deserve to be admitted. Therefore, the appeals are dismissed. Sd/- JUDGE Sd/- JUDGE *bgn/- "