SRI. LAKSHMIPATHI. N V. THE INCOME TAX OFFICER

ITA/425/2018

AI Insights

The case involves an income tax appeal by the legal representative of Sri Lakshmipathi, who was deceased, against the order of the Income Tax Appellate Tribunal (ITAT) which had dismissed the appeal concerning unexplained investment of Rs.8,70,000 for the assessment year 2008-09. The appellant argued that the amount was from lease agreements and other savings, intended for medical emergencies and as refundable deposits to lessees. The ITAT had dismissed the appeal without proper consideration of the documents provided, leading to this appeal in the High Court. The Revenue supported the ITAT's decision, arguing that the necessary materials were not produced before the lower authorities. The High Court found that the ITAT did not adequately consider the circumstances and documents presented, leading to the remand of the case to the AO for a fresh assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 767594 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 17-11-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP
• Assessee Lawyers: PRATHIBA
• Keywords: Capital introduction; Cryptic order; Lease agreement; Medical Emergency; Perverse order; Unexplained investment
• Section: 260A

Judgement Text

" - 1 - ITA No.425/2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF NOVEMBER, 2022 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE T G SHIVASHANKARE GOWDA INCOME TAX APPEAL NO.425/2018 BETWEEN: SRI LAKSHMIPATHI.N SINCE DEAD BY HIS LR. L.N.G.DUTT AGED ABOUT 48 YEARS R/AT OLD NO.93/1, NEW NO.14 3RD CROSS, SRIRAMPURA BENGALURU - 560 022 …APPELLANT (BY SMT. PRATHIBA R, ADVOCATE FOR SRI S.PARTHASARATHI, ADVOCATE) AND: THE INCOME TAX OFFICER WARD-6(2) BMTC BUILDING 80 FEET ROAD, 6TH BLOCK KORAMANGALA BANGALORE - 560 095 …RESPONDENT (BY SRI DILIP M, STANDING COUNSEL FOR SRI K.V.ARAVIND, STANDING COUNSEL) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT 1961, PRAYING TO SET ASIDE THE ORDER DATED 22.12.2017 (ANNEXURE–A) PASSED BY THE INCOME TAX APPELLATE TRIBUNAL FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO.853/BANG/2017 ETC. THIS INCOME TAX APPEAL, COMING ON FOR HEARING, THIS DAY, P.S.DINESH KUMAR J, DELIVERED THE FOLLOWING: Digitally signed by K S RENUKAMBA Location: High Court of Karnataka - 2 - ITA No.425/2018 JUDGMENT This appeal by the assessee directed against the order in ITA No.853/Bang/2017 dated 22.12.2017 has been admitted to consider the following question of law: “Whether the Tribunal is correct in not considering the source explained by the appellant for having introduced the capital in the business as in form of documentary evidence and same was also filed before the lower authorities, which has to be considered genuine and had given one more opportunity to the appellant to explain before the AO?” 2. Smt.Pratibha, learned Advocate for the assessee submitted that for A.Y.1 2008-09, the AO2 added Rs.8,70,000/- as unexplained investment under other heads, without accepting the explanation given by the assessee. She submitted that the assessee is a dealer in iron and steel and in the previous year he had leased out his premises to two tenants and received a sum of Rs.4,00,000/- and Rs.3,50,000/- respectively. Thus the total sum of Rs.7,50,000/- was received in the previous year. AO has also added his other savings and introduced Rs.8,70,000/- as capital for the relevant assessment year. The assessee had kept 1 Assessment Year 2 Assessing Officer - 3 - ITA No.425/2018 the amount received by him from the lessees because the said amount had to be refunded to the lessees as and when they would vacate the premises. Secondly, both the assessee and his wife were not keeping good health and money was required for any medical emergency. 3. Smt.Pratibha, argued that CIT(A)3 confirmed the order passed by the AO. In the appeal filed before ITAT4, the assessee has produced copies of the lease agreement, bank passbook and other documents to substantiate his contention. His contention is, the sum of Rs.8,70,000/- is not an unexplained income. ITAT has dismissed the appeal with a cryptic order without proper application of mind. Therefore the said order is perverse and liable to be set aside. 4. Sri Dilip, learned Standing Counsel for the Revenue supporting the impugned order submitted that the assessee has not produced any materials before the AO and CIT(A). The ITAT has rightly held that the assessee has two bank accounts and the amount was not deposited in the Bank. Therefore this appeal does not merit any consideration. 3 Commissioner of Income Tax (Appeals) 4 Income Tax Appellate Tribunal - 4 - ITA No.425/2018 5. We have carefully considered the rival contentions and perused the records. 6. The undisputed facts of the case are, assessee sought to produce documents in support of his contentions before ITAT. The ITAT has dismissed the appeal on the ground that the amount was not deposited in the Bank. The circumstances under which the assessee claimed that amount was kept at home and the documents relied upon by the assessee require proper consideration. Further both the assessee and his wife have passed away. His son is prosecuting this appeal. 7. In the facts and circumstances of the case, we are of the considered opinion that the matter requires consideration at the hands of the AO. Hence the following: ORDER (a) Appeal is allowed. (b) The matter is remanded to the file of the AO for fresh consideration after taking into consideration the documents sought to be produced by the assessee. - 5 - ITA No.425/2018 (c) Since the matter has been remanded, the question of law does not require any answer and accordingly, it is not answered. No costs. Sd/- JUDGE Sd/- JUDGE KSR List No.: 1 Sl No.: 14 "