K.V. MATHEW vs. THE INCOME TAX OFFICER

ITA/95/2012HC KeralaKLHC01024017201204 October 2013Author: HONOURABLE MR.JUSTICE A.M.SHAFFIQUE,HONOURABLE THE CHIEF JUSTICE DR. MANJULA CHELLUR8 pages
AI SummaryDismissed

What were the facts?

The assessee, K.V. Mathew, proprietor of Phoenix Enterprises, filed his return for assessment year 2005-06 declaring income of Rs.2,19,730/-. During scrutiny, the Assessing Officer (AO) noted unexplained credits in the assessee's Savings Bank Account totaling Rs.22,51,000/-. The assessee claimed these funds were received from his sister in Italy, routed through his brother. The AO also disallowed 1/4th of vehicle maintenance and hire purchase interest as personal expenditure. The Commissioner of Income-tax and the Income Tax Appellate Tribunal upheld the AO's findings. The assessee appealed to the High Court, challenging the addition of the cash credit.

What did the High Court hold?

The High Court held that the question of law raised by the appellant did not arise for consideration. The Court found that the assessee was under an obligation to satisfy the receipt of the Rs.22,51,000/- deposited in his Savings Bank Account. The AO found that the assessee could not produce any proof for funds received from Italy. While the assessee claimed the funds were received from his sister and routed through his brother, the proof provided, including a Post Office Savings Bank passbook, was deemed insufficient by the AO. The authorities below, including the Tribunal, agreed with the factual finding that the amounts in the Savings Bank Account remained unexplained. Therefore, the AO was justified in making the addition under Section 69A. The Court concluded that the appeal was purely a question of fact, decided against the appellant by the fact-finding authorities, and thus no substantial question of law arose.

What were the issues?

1. Whether, in the facts and circumstances of the case, the Tribunal ought to have held that there is no scope for addition under Section 69A of the Income Tax Act on credits received from the appellant's sister who is an NRI? Assessee's Contention: The assessee argued that if unexplained money is received from a close relative, and it reflects in that person's account, the proper course is to ask that person to explain. The assessee claimed to have produced a declaration and an affidavit from the person from whom the amount was received, which the lower authorities failed to appreciate. Revenue's Contention: The revenue, through the AO, contended that the assessee failed to prove the source of the Rs.22,51,000/- deposited in his Savings Bank Account. The assessee could not provide proof of funds originating from Italy or a proper cash flow statement. The explanation offered was deemed unsatisfactory.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 69A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE FRIDAY, THE 4TH DAY OF OCTOBER 2013/12TH ASWINA, 1935 ITA.No. 95 of 2012 () ---------------------- I.T.A. NO.48/COCH/2010 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. ......... APPELLANT/APPELLANT: ------------------------------------- K.V. MATHEW, PROP. PHOENIX ENTERPRISES, 40/8084, MULLASSERY CANAL ROAD, ERNAKULAM, PAN : AEBPM 4915KJ. BY ADVS.SRI.ANIL D. NAIR, SRI.J.R.PREM NAVAZ, SMT.NIVEDITA A.KAMATH. RESPONDENT/RESPONDENT: -------------------------------------------- THE INCOME TAX OFFICER, WARD-2(3), RANGE - 2, ERNAKULAM. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 04-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs.

ITA.No. 95 of 2012 APPENDIX PETITIONER'S ANNEXURES:- ANNEXURE A COPY OF THE ORDER OF ASSESSMENT DATED 31/12/2007 FOR THE YEAR 2005-2006 ISSUED TO THE APPELLANT. ANNEXURE B COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX DATED 30/11/2009 FOR THE YEAR 2005-2006 ISSUED TO THE A

The order continues below.

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