Sri T Krishnamurthy Naidu Prop: Sri Sai Krishna Engineering Works V. The Income-Tax Officer Ward-1(4), Bangalore

ITA/35/2009

AI Insights

The case involves Sri T Krishnamurthy Naidu, the proprietor of M/s Sri Sai Krishna Engineering Works, who appealed against the order of the ITAT Bangalore which confirmed the addition of Rs. 5 lakhs to his income under Section 69A of the Income Tax Act, 1961. The appellant claimed that this amount was a gift from his mother, derived from the agricultural income of lands inherited after his father's death. However, the authorities found no credible evidence to support this claim, leading to the tax addition. The High Court of Karnataka, after hearing the arguments, dismissed the appeal, agreeing with the lower authorities' findings.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 794110 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 27-10-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: S PARTHASARATHI
• Keywords: Agricultural income; Gift; Tax; Undisclosed source of investment; Fact finding authorities
• Section: 69A; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 27th DAY OF OCTOBER 2014 PRESENT THE HON’BLE MR JUSTICE N. KUMAR AND THE HON’BLE MR JUSTICE B. MANOHAR ITA NO.35/2009 BETWEEN: SRI T KRISHNAMURTHY NAIDU PROP: M/S SRI SAI KRISHNA ENGINEERING WORKS AGED ABOUT 42 YEARS SON OF SRI T RAGHUNATHA NAIDU NO.25, 1A CROSS, J C ROAD LALBAGH ROAD BANGALORE – 560027. ..APPELLANT (BY SRI S PARTHASARATHI, ADV.) AND: THE INCOME-TAX OFFICER WARD-1(4), BANGALORE. ..RESPONDENT (BY SRI K V ARAVIND, ADV.) THIS APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, F1961 ARISING OUT OF ORDER DATED PASSED IN ITA NO.262/BNG/2008, FOR THE ASSESSMENT YEAR 2004-2005 PRAYING TO FORMULATE THE SUBSTANITAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND 2 SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA NO.262/BNG/2008. THIS APPEAL COMING ON FOR HEARING THIS DAY, N KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT The assessee has preferred this appeal challenging the findings recorded by the three authorities that the explanation rendered to explain the undisclosed source of investment in business is not acceptable and bringing into tax the amount under Section 69A of the Income Tax Act, 1961. 2. The appeal was admitted to consider the following substantial questions of law at the time of admission on 08.04.2009: 1. Whether in law, the provisions of section 69A of the Act were applicable to the appellant’s case and the addition of Rs.5 lakhs as confirmed by the Tribunal was sustainable? 2. Whether in law, the appellant is said to have discharged the onus of proving the source of investment when the appellant’s mother confirmed the gifts made to her son- the appellant, and the veracity of her statement having not been disproved by the assessing officer? 3 3. Whether in law, on mere surmises and suspicion the Tribunal could sustain the addition when the appellant had adduced evidence which has not been controverted by any authorities below under the Act?” 3. Learned counsel for the parties have been heard. 4. The undisputed facts which emerge from the material on record is that the assessee’s father died in January 2002 living behind his widow i.e., the mother of the assessee and the assessee himself. The widow inherited 6 acres and 20 guntas of agricultural land and she was also owning 2.67 acres of land in her name. All these lands are situated in Chittor in Andhra Pradesh. The case of the assessee was that his mother was cultivating the land and growing paddy, sugarcane, ground nut and pulses in these lands. It is from the aforesaid crops, she had saved Rs.5.00 lakhs cash and had kept in the house. That amount was given to him by way of gift which he invested as capital in his business. The three authorities have concurrently held 4 the mother was aged about 65 years on the date of death of her husband. Till the death of her husband, the land belonged to her husband, so any income derived there from rightfully belonged to the husband. There is no material on record to show the income derived from the lands which was in the hands of the assessee. If in January 2002, the mother became the owner of 6 acres 20 guntas of agricultural land and she owned 2.67 acres in her own name, when she is said to have paid the said amount on 10.04.2003 and 15.06.2003, roughly one year after the death of her husband, it is difficult to believe the case of the assessee that she had Rs.5.00 lakhs cash kept in the house being the income derived from the said land. Therefore, on appreciation of entire evidence on record, three fact finding authorities have carefully held that the assessee has failed to prove the said income of Rs.5.00 lakhs in the hands of his mother and payment of that by way of gift to him. The question whether the mother had Rs.5.00 lakhs on the day she is said to have gifted to the son, is purely a question of fact. When 5 three fact finding authorities on the basis of legal evidence have held that the said fact is not proved, no substantial question of law as framed by this Court at the time of admission arises for consideration at the hands of this Court. 5. We do not find any error in the findings recorded by the three authorities. Therefore, we do not see any merit in this appeal. Appeal is dismissed. Question of answering the substantial question of law do not arise. Sd/- JUDGE Sd/- JUDGE Brn "