M. VIJAYAKUMAR(REP BY HIS WIFE S. YASODHA),ERODE vs. ITO, INTNL TAXATON WARD, COIMBATORE

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ITA 689/CHNY/2022Status: DisposedITAT Chennai21 December 2022AY 2017-185 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal admitted additional evidence in the form of an affidavit from the assessee's father confirming the withdrawal of Rs. 8 lakhs from his bank account and handing it over to the assessee. The Tribunal found this explanation reasonable and deleted the addition.

What were the facts?

The assessee deposited Rs. 26 lakhs in cash into his bank account during the demonetization period. The lower authorities accepted Rs. 18 lakhs as explained but disputed Rs. 8 lakhs allegedly received from the assessee's father.

What were the issues?

Whether the addition of Rs. 8 lakhs as unexplained money was justified, and admissibility of additional evidence to prove the source of funds.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL

Hearing: 19.12.2022Pronounced: 21.12.2022

O R D E R

PER MAHAVIR SINGH, VICE PRESIDENT:

1.

This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-16, Chennai in dated 13.07.2022. The assessment was framed by the Income Tax Officer, International Taxation Ward, Coimbatore for the assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961, (hereinafter ‘the Act’) vide order dated 25.12.2019.

2.

The only issue in this appeal is as regard to the order of CIT(A) confirming the action of AO in making addition of Rs.8 lakhs as unexplained money u/s.69A of the Act.

3.

At the outset the ld.counsel for the assessee filed application under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 filling confirmation in the shape of affidavit of assessee’s wife requesting of admissibility of assessee’s father affidavit confirming the amount of Rs.8 lakhs withdrawn from Indian Bank A/c No.560028303 on 01.11.2016 was handed over to his son, the present assessee Shri M. Vijayakumar. The ld.counsel for the assessee stated that the assessee’s request for admissibility of additional evidence for the reason that the same could not be filed before AO or before CIT(A) as the assessee was unable to understand the nature of proceedings before the lower authorities and moreover the assessee is now represented by his authorized representative i.e., through his wife. The ld.Senior DR opposed the admissibility of additional evidence by stating that the assessee could have filed the confirmation of his father before the AO or before the CIT(A) at the first instance and for not filing before the lower authorities, the assessee has no reasonable cause and there is no reason or occasion to file before Tribunal for the first time. He

- 3 - aggressively took his stand that this should not be admitted as additional evidence.

4.

After hearing both the sides and going through the fact that the AO made total addition of Rs.26 lakhs as unexplained money u/s.69A of the Act being amount deposited during demonetization period in his bank account No.000901589886 maintained with ICICI bank. The CIT(A) accepted the explanation of the assessee receiving money from his wife to the extent of Rs.18 lakhs but denied the explanation of assessee receiving money from his father for the reason that “complete fact regarding assessee’s father depositing cash in assessee’s account is lacking”. In view of the facts, it seems that this confirmation of assessee’s father explaining the fact that the amount withdrawn by assessee’s father on maturity of FD’s in Indian Bank on 01.11.2016 was handed over to his son i.e., the assessee, which was deposited by assessee in his ICICI bank account on 10.11.206. In view of these facts, we admit this additional evidence and will adjudicate the issue.

5. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the assessee made cash deposit to the tune of Rs.26 lakhs in his bank account No. 000901589886 maintained with ICICI bank. There is no dispute

- 4 - Rs.18 lakhs received from his wife Smt. Yasodha. The dispute remains only to the extent of Rs.8 lakhs received from his father. The CIT(A) also confirmed the action of the AO by observing in para 4.3.1 as under:- 4.3.1 Regarding the residual sum of Rs. 8,00,000/-, it is claim of assessee that his father's FD matured and Rs. 8,00,000/- was withdrawn on 01.11.2016 and that the sum got deposited in assessee's account. The fact of withdrawal of cash from the account of assessee's father is not in doubt. I have seen copy of bank account of assessee's father maintained with Indian Bank. Cash withdrawal was there on 01.11.2016. Thereafter, there was no cash deposit in the account till March, 17, 2017. The cash deposited in assessee's account was at on go on 10.11.2016. But complete fact regarding assessee's father depositing cash in assessee's account is lacking. ń case of assessee's wife, Yashoda, the money got transferred to her accoußt from that of assessee's bank account. Therefore, there is sufficient reason to believe that assessee's wife deposited the money to his account. This is not the case regarding assessee's father. It is not the case of assessee that he transferred money to his father for making FD. It is not understood as to how assessee's father allegedly deposited money into assessee's account when there are no proof that the money belonged to assessee. There is dearth of facts in support of assessee's contention. In absence of plausible explanation, I am not inclined to believe that Rs. 8,00,000/- deposited in assessee's account was from cash withdrawal from the account of assessee's father.

4.1 We noted that the CIT(A) has not doubted the source of maturity of assessee’s father FDs of Rs.8 lakhs which was withdrawn on 01.11.2016. Admittedly, the assessee made deposit on 10.11.2016 in cash, this amount of Rs.8 lakhs. The only dispute is confirmation, which now the assessee confirmed by filing affidavit of assessee’s father, which reads as under:-

- 5 - Murugesan. I have been residing at Ezhumathur Village. During the Financial year 2016-17, from my Indian Bank Account (Account No.560028303), I withdrew Rs.8,00,000/- (Rs.4,00,000/- + Rs.4,00,000/-) on 01.11.2016. This money is received from two of my matured Fixed Deposits. I handed over the above mentioned sum to my son for his needs.”

4.2 From the above, it is clear that the source is explained and even the assessee’s father confirmed having handed over the above sum of Rs.8 lakhs to his son, which ultimately got deposited in assessee’s bank account on 10.11.2016. We find explanation of the assessee as reasonable and assessee could explain the source of this money and hence, the same cannot be treated as unexplained u/s.69A of the Act. Therefore, we delete this addition and allow the appeal of assessee.

5.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 21st December, 2022 at Chennai.

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