VUPPULA MALLESWARI,TIRUVALLUR vs. ITO,WARD 2, TIRUVALLUR

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ITA 95/CHNY/2021Status: DisposedITAT Chennai28 March 2022AY 2013-143 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 held that the assessee had discharged the onus of establishing the source of credit with confirmation letters. Therefore, the addition of Rs. 4 Lacs was unjustified and had no basis.

What were the facts?

The assessee purchased immovable property, partly funded by a loan from her husband. The Assessing Officer (AO) added Rs. 4 Lacs to the assessee's income, partially disallowing the explanation of the source of funds. The CIT(A) confirmed this addition.

What were the issues?

Whether the addition of Rs. 4 Lacs to the assessee's income was justified when the source of funds was explained and confirmed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Ms. Malvi J. Sheth (CA) – Ld. A.R, Shri G. Johnson (Addl.CIT) – Ld DR
For Respondent: Shri G. Johnson (Addl.CIT) – Ld DR

आयकरअपीलसं./ (िनधाCरणवषC / Assessment Year: 2013-14) Smt. Vuppula Malleswari ITO बनाम/ Old No.6, New No.9, Ward-2, Dr. Radhakrishnan Road, Tiruttani, Tiruvallur. Vs. Tiruvallur – 602 001. �थायीलेखासं./जीआइआरसं./PAN/GIR No.AAMPM-5490-J (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Ms. Malvi J. Sheth (CA) – Ld. A.R ��थ�कीओरसे/Respondent by : Shri G. Johnson (Addl.CIT) – Ld DR सुनवाईकीतारीख/ : 28-03-2022 Date of Hearing घोषणाकीतारीख / : 28-03-2022 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of the order of learned Commissioner of Income Tax (Appeals)-7, Chennai [CIT(A)] dated 27.06.2019 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 147 of the Act on 27.12.2018. In the appeal, the assessee is aggrieved by confirmation of addition of Rs.4 Lacs.

2 - 2. The registry has noted a delay of 562 days in the appeal, the condonation of which has been sought by the assessee on the strength of condonation application which is accompanied by the affidavit of the assessee. It has been submitted that the assessee preferred rectification application against the order of learned first appellate authority. The status of the same was unknown and there was no communication against rectification application. Ultimately, the application was withdrawn on 01/02/2021 and the appeal was preferred before Tribunal. The Ld. AR submitted that there was a reasonable cause and due to circumstances beyond the control of the assessee and the delay was neither intentional nor willful. Though Ld. Sr. DR opposed the admission of the appeal, however, keeping in view the contents of the condonation petition and affidavit of the assessee, we condone the delay and admit the appeal for adjudication on merits.

3.

Upon perusal of assessment order, it could be seen that the case was reopened for the year on the allegation that the assessee purchased certain immoveable property during the year, part of which was funded out of loan from Corporation Bank whereas there was no explanation to the extent of balance Rs.68.67 Lacs. After considering assessee’s submissions and documentary evidences including confirmation letters, it was noted that the assessee received sum of Rs.9 Lacs from her husband Shri V. Ramchandrath and the same was received in her son’s (joint owner of the property) bank account. In the confirmation letter, the husband submitted that loan of Rs.7 Lacs was taken from Shri K. Lakshmipati and as such he paid an amount of Rs.6,55,200/- vide DD No.544227 after deducting interest in advance. However, Ld. AO did not fully accept the explanation and held that the explanation was 3 - acceptable only to the extent of Rs.5 Lacs but the balance Rs.4 Lacs was to be added to the income of the assessee. The stand of Ld. AO, upon confirmation by Ld. CIT(A), is in further challenge before us.

4.

Upon careful consideration of material fact, we find that the assessee had sourced the investment partly out of loan taken from her husband. The husband has duly confirmed the same and also explained that he had taken loan of Rs.7 Lacs and the net amount was received from the lender through banking channels. The Ld. AO, disregarding the same, accepted explanation partially and added the amount of Rs.4 Lacs to the income of the assessee. We are of the opinion that once the assessee has discharged the onus establishing the source of credits and also filed confirmation letter, there was no basis to make the impugned additions. There is no adverse material or allegation against the assessee. Therefore, the impugned additions do not have any legs to stand. By deleting the same, we allow the corresponding grounds raised

by the assessee. No other arguments have been urged before us during the course of hearing.

5. The appeal stand allowed in terms of our above order. Order pronounced on 28thMarch, 2022.

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