CHARLES MOPUR ,CHENNAI vs. ITO , INTERNATIONAL TAXATION WARD - 1 (1) , CHENNAI

आदेश / O R D E R

PER MANOMOHAN DAS, J.M: This appeal by the assessee is directed against the order of the learned Commissioner of Income-Tax (Appeals) – 16, Chennai [hereinafter “CIT(A)”] dated 10-10-2022 and pertains to the Assessment Year [AY] 2012-13. The grounds of the assessee are as under: “1. The order of the Commissioner of Income Tax, (Appeals) dismissing the appeal is contrary to law, erroneous and unsustainable to the facts of the case.

ITA No.1000/Chny/2022 :- 2 -: 2. The CIT(A) erred in confirming the addition of Rs. 31,81,594/- to the long term capital gain (LTCG) returned by the assessee.

5 The CIT(A) further failed to appreciate that the inability of the assessee to file any evidence for constructing the compound wall at this point of time would not render the genuine expense incurred on improvement as not available for indexation purposes and hence the claim of the assessee ought to be accepted.

and an NRI. The Department had information from their available

ITA No.1000/Chny/2022 :- 3 -: record that the assessee made huge cash deposits into his SB

Account No.620010100000639 at Axis Bank during the Financial Year

[FY] 2011-12 relevant to the AY 2012-13. The assessee filed his return

of income for the A.Y 2012-13 belatedly. In the return of income, the

assessee admitted income from salary, income from long term capital

gains and income from other sources which did not commensurate

with the amounts deposited. The ld. Assessing Officer [AO] believed

that income for more than Rs. One lakh has escaped assessment and

accordingly, the case of the assessee was reopened u/s 147 of the Act

by taking prior approval of the competent authority. Notice u/s 148

dated 29-03-2019 issued and served upon the assessee.

income for the AY 2012-13 on 13-04-2019 admitting income from

salary amounting to Rs. 2,43,854/-, income from other sources

amounting to Rs. 7,92,465/- and income from long term capital gains

amounting to Rs. 58,84,617/- aggregating to Rs. 69,06,920/-. Notice

u/s 143(2) of the Act dated 29-05-2019 served upon the assessee and

the assessee in compliance attended and filed the details such as

copy of purchase deed, copy of sale deed, copy of bank account. The

ld. AO noticed that, during the FY 2011-12, the assessee sold an

immovable property situated at No. 52, Mamallpuram Village,

ITA No.1000/Chny/2022 :- 4 -: Thirukalikundram Taluk, Kancheepuram for a consideration of

Rs.1,32,73,000/- and the entire sale consideration was received by

way of DD dated 06-04-2011. The assessee claimed cost of

acquisition at Rs. 29,53,282/- and Rs. 23,58,838/- respectively. The ld.

AO also noticed that the assessee made cash deposits of

Rs.82,96,700/- subsequent to the sale of immovable property. The ld.

AO framed two issues for completing the reassessment as (a) Cash

deposits, and (b) Excess claim of cost of acquisition. Notice u/s 142(1)

of the Act dated 06-12-2019 issued asking the assessee to explain

about the cash deposits made to the tune of Rs. 82,86,700/- and

reason for claiming two cost of acquisition. In response, the assessee

made submissions which were find not acceptable by the ld. AO. The

ld. AO vide order dated 27-12-2019 disallowed the claim of the

assessee and added the amount of Rs.31,81,594/- on account of

capital gains and Rs. 82,86,700/- as unexplained money under section

69A of the Act towards the total income of the assessee.

Being aggrieved, the assessee filed 1st appeal before the ld. 4.

CIT(A). The ld. CIT(A) vide order dated 10.10.2022 dismissed the

appeal of the assessee.

the Tribunal.

ITA No.1000/Chny/2022 :- 5 -: 6. Heard the representatives of both the parties and perused the

materials available on record. We observe that the assessee failed to

prove the expenditure incurred by him in improving the land. No

evidence regarding how much amount the assessee had incurred in

improving the land could be filed by the assessee before the lower

authorities. The ld. CIT(A) in this context observed as under:

“6.3. I have considered the matter. Appellant claimed to have expenses of Rs. 29,53,282/- in F.Y. 2007-08 and Rs. 23, 58,838/- in F.Y. 2008-09 as cost of improvement. The AO had refused to accept the indexed cost on Rs. 23,58,838/- which came to Rs. 31,81,594/-. The assessee had claimed to have rebuilt the rock compound in 2008-09. In this regard, the appellant had not furnished any iota of having incurred the said cost of rebuilding the boundary wall. The appellant had not discharged the onus of proving the claim. A sum of Rs. 23,58,838/- is not a small amount of money in 2008-09. If such expense was incurred, some evidences ought to be there. In view of dearth of evidences regarding incurring of expenses, the ground taken is dismissed. Addition of Rs. 31,81,594/- is confirmed”. 7. On the above observation of the ld. CIT(A) our considered

opinion is that the assessee had to furnish evidences in support of his

claim regarding the expenditure incurred by him on improvement of his

land. The assessee totally failed to produce any evidence except

making submissions about such expenditures. Mere submissions will

not help the assessee. Assessee must produce evidences before the

concerned authorities upon his claim if sought relief. In absence of

evidences on the part of the assessee relief is not possible. Therefore,

we uphold the observations of the ld. CIT(A). Accordingly, we decide

this ground of appeal against the assessee which is related to the

ITA No.1000/Chny/2022 :- 6 -: addition of Rs. 31,81,594/- to the total income of the assessee by the

ld. AO.

under section 69A of the Act by the ld. AO, the observations made by

the ld. CIT(A) are not acceptable to us. The ld. CIT(A) upheld the

addition by mere suspicion. The ld. CIT (A) observed as under:

“7.3. I have considered the matter. According to the appellant, cash was withdrawn for construction of a house at a land purchased in Mamalllapuram. Substantial cash withdrawal started from March 2006. In that month itself, there was withdrawal of Rs. 27 lakh. There was substantial withdrawal till the month of November, 2006. After that withdrawals were of nominal sums, mainly through ATM. Now, the question a begging answer is the plausibility of cash withdrawn several years earlier being still in possession of assessee in the same forms of cash. It is not understood as to how cash withdrawn before December, 2006 was still available as such in 2011. This claim of appellant is not in conformity with human nature and especially for a person who has banking habit. Appellant heavily argued that he was a salaried person and that he had no other sources of earning the cash deposited by him. This is a self-serving argument because the Department is not privy to many possible income earning activities with which the assessee might have been engaging. In the year in which cash was deposited, assessee had sold property of substantial size. The Department had no occasion of knowing what actually transpired in course of the property transaction. Presently, it is the duty of appellant to give reasonable, credible and plausible explanation regarding the sources of cash deposited by him. The explanation given is too far-fetched to be true. Therefore, the claim does not appeal to my sense of reason as well as preponderance of possibility. The ground is accordingly dismissed.” 9. As per our observation, the assessee explained the sources of

the cash deposited by him in his bank account. The assessee

explained that he had withdrawn amount for construction of house but

to redeposit in his bank account as he had to abandon the plan for

ITA No.1000/Chny/2022 :- 7 -: construction of house. The assessee further explained that he was an

employee of IBM and received salary. He also sold immovable

property, house hold property etc. Hence, there was explanation from

the assessee but the same was not accepted by the lower authorities.

Merely, because, the assessee had kept the withdrawn money in his

custody for a long time and thereafter redeposited in the bank account

is not a ground to reject the claim of the assessee. The assessee as

an owner of his money had kept that money with him for a specific

object/purpose. The Department simply suspected that the assessee

could have any other business. Again, the Department’s view that

most of the people kept their money in bank at most of the times. But

that view of the Department, as per our observation may not apply

equally in every case. The owner of the money takes their own

decision when they will keep the same in their own custody and when

it will be profitable / fruitful by keeping the money in bank accounts.

When certain purpose is there, money may not be kept in the bank

accounts so as to accomplish that purpose/object. This is not unusual.

The owner of the money takes his own decision in this regard. Money

may be needed in one’s own custody for a specific purpose and for

this purpose money can be withdrawn from his /her bank account.

People keep money in bank account for a purpose so that the same

can be withdrawn as convenient to the owner of the money so as to

ITA No.1000/Chny/2022 :- 8 -: fulfill that specific purpose. This is possible. The observation of the ld. CIT(A) that the assessee might have engaged in any other activity is not proved. Therefore, we delete the addition of Rs. 82,86,700/- to the total income of the assessee. Accordingly, we set aside the order of the ld. CIT(A) dated 10-10-2022 as well as the assessment order dated 27-12-2019 so far as it relates to the addition of Rs. 82,86,700/-. Thus, this ground of appeal of the assessee on cash deposit is allowed.

Sd/- Sd/- (मंजुनाथ. जी) (मनोमोहन दास) (Manjunatha. G) (Manomohan Das) लेखा सद�य लेखा सद�य /Accountant Member �ाियक सद�/Judicial Member लेखा लेखा सद�य सद�य चे�ई/Chennai, �दनांक/Dated: 29th December, 2023. EDN/-

आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ*/Appellant 2. +,थ*/Respondent 3. आयकर आयु-/CIT 4. िवभागीय +ितिनिध/DR 5. गाड( फाईल/GF