Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, BANGALORE BENCHES “ B ” BENCH: BANGALORE
Before: SHRI B.R. BASKARAN & SHRI PAVAN KUMAR GADALEShri Subramani Ramappa, Shri Tata Krishna, Advocate. Shri Priyadarshi Misra, JCIT (D.R)
O R D E R
PER SHRI PAVAN KUMAR GADALE, JM :
The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals)-7, Bangalore passed u/s.143(3) and u/s 250 of the Income Tax Act, 1961(the Act).
The LdAr submitted that the assessee has filed a condonation petition for delay of 29 days in filing the appeal and prayed for condonation of delay.The LdDr has no serious objections on the delay. Accordingly, we considered the submissions of both the parties and condoned the delay and admit the appeal. 2. The assessee has raised the following grounds of appeal:
3. The Brief facts of the case are that, the assessee is an individual and has Income from house property. The return of income for the Asst. Year 2012-13 was filed on 21.03.2014 with total income of Rs.2,47,100/-. Subsequently the case was CASS and notice under Section 143(2) and 142(1) of the Act were issued. In compliance, the learned authorized representative appeared from time to time and submitted the information and the case was discussed. The assessing officer find that the assessee has purchased a property for Rs.2,93,82,370/- including stamp duty and registration charges and dealt on the statement of affairs, bank statements and statement of unsecured creditors furnished by the Assessee at page 1 of the assessment order and observe that the assessee could explain the sources to the extent of Rs.2,20,57,200/-and for balance of Rs.73,25,170/- the assessing officer has accepted the source of cash loan of Rs.38,27,170/- from Smt. Bhagya and Rs.35 lakhs stated to have been paid by cheque as per sale deed. The LdAr explained that the said cheque was not cleared and hence the payment was made in cash. The Assessing Officer found that there is no cash source available with the assessee to make payment in lieu of cheque and therefore is treated as unexplained and made addition of Rs.35 lakhs. Similarly, the Assessing Officer on verification of the bank account, found cash deposits of Rs.25,80,000/-on 15-3-2012 and called for the sources of deposit. The assessee explained that, the deposit is out of cash loan of Rs 50 Lakhs obtained from Smt. Bhagya. Whereas, A.O observed that out of the above loanRs38,25,170/-was utilized by the assessee in the purchase of property and the balance of Rs.11,74,830/-is only available with the assessee. Therefore, the Assessing Officer has allowed credit for cash source to the extent of Rs.11,74,830/- in respect of bank Rs25.80 lakhs and the balance of Rs.14,05,170/- is subject to tax and assessed the total income with other additions at Rs.96,52,271/- and passed the order under Section 143(3) of the Act dt.23.03.2015. Aggrieved by the assessment order, the assessee has filed an appeal with the CIT (Appeals). Whereas, the CIT (Appeals) has confirmed the addition of Rs.35 lakhs and in respect of unexplained cash deposits of Rs.14,05,170/- and has sustained the addition to the extent of Rs10,21,170/-and partly allowed the appeal. Aggrieved by the order of the CIT (Appeals), the assessee has filed an appeal with the Tribunal.
4. At the time of hearing, the LdAr submitted that the assessee has explained sources of Rs.35 lakhs and referred to Cheque No.401779 dt.15.03.2012 for Rs.35 lakhs which was not cleared before 31-03-2012. But, the assessee has paid the amount in cash in lieu of cheque in subsequent assessment year and supported with the statement of sources at page 103 of the Paper Book. Similarly, for deficit of cash deposit of Rs10,21,170/-The learned Authorized Representative’s contentions are that the assessee has sources out of opening balance of cash, rental deposits and withdrawals from bank and filed a statement of cash flow referred at page100 of paper book and prayed for allowing the appeal. Contra, the learned Departmental Representative supported the orders of CIT (Appeals).
We heard the rival submissions and perused the material on record. On the first disputed issue of addition of Rs.35 lakhs, the contention of the ld. AR that the assessee has issued the cheque and was not cleared. subsequently in the next asst year the assessee has paid Rs.10 lakhs on 20.06.2012 and Rs.15 lakhs on 13.07.2012 in cash to vendor and the balance is still payable. The assessee has paid Rs.25 lakhs in two installments and confirmation of the vendor is furnished. The CIT (Appeals) has not considered this confirmation as it is unsigned and was filed as part of written submissions. We find the Assessing Officer has not discussed this issue in the assessment proceedings and the new facts are emerging in the case. The ld. DR objected for considering these facts as that the Assessing Officer was deprived to check and examine the issue. The LdAr prayed that the matter may be restored to the file of Assessing Officer. We considering the submissions, facts and the evidences filed are of the opinion that the Cheque for Rs.35 lakhs referred in the sale deed is not enchased by the vendor and the assessee claims to have paid Rs.25 lakhs in two installments by cash to vendor, which was not discussed in the assessment proceedings before the Assessing Officer. Accordingly, we set-aside the order of Cit(A) on this disputed issue and restore this issue to the file of Assessing Officer for examination and verification and allow this ground of appeal
for statistical purposes.
6. In respect of addition of Rs.10,21,170/- the contention of the ld. AR that(i) Rs.3 lakhs is out of the rental deposits received in cash from the tenant(ii) Rs.2 lakhs was self withdrawal from the Bank on 14.03.2012 and was deposited on 15.03.2012 and (iii) the balance of Rs.5,21,170/- source being out of opening balance of cash as on 1-4-2011 of Rs 5,64,737/- and substantiated with the cash flow statement for the F.Y. 2011-12 at page 100 of the Paper Book. We find on the first issue of rental deposit of Rs.3 lakhs cash, the assessee has not produced any evidence in support of the source either confirmation letter from the tenant or copy of rental deed. The LdAr contentions are that it is a practice followed in Bangalore, were 10 months’ rent deposit to be paid by the tenants. Further, the CIT (Appeals) has accepted the source of rental income therefore the rental deposit has to be accepted. We found the arguments are not supported with evidence to substantiate that the assessee has received Rs.3 lakhs in cash as Rental Deposit from the tenant in the financial year 2011-2012 and lack of merits and therefore we are not inclined to grant relief on this isssue and dismiss the contentions. On the second issue of source of Rs.2 lakhs cash withdrawal from Bank .The LdAr has demonstrated the bank account statement at page 99 of the paper book disclosing withdrawal of Rs.2 lakhs on 14.03.2012 and explained that the cash deposits made on 15-3-2012 in bank account include Rs.2 lakhs source. We find the CIT (Appeals) has not accepted this contention as bank statement reflect” paid to h.anilkumar”. The LdAr explained that it is a self-withdrawal made by Shri H. Anil Kumar on behalf of the asssesse therefore the source has to be allowed. The Affidavit executed by H.anil kumar supporting the assesses stand. We are of the opinion that the assessing officer should be provided opportunity to verify and examinee the evidence filed. Accordingly, we restore the disputed issue of source of Rs 2 lakhs and additional evidence to the file of assessing officer to verify and examination. On the last issue of source of Rs.5,20,170/-, the contention of the LdAr is that, the source being out of opening balance of cash available to the assessee as on 1.4.2011 and supported with cash flow statements at page 100 of the Paper Book . We found that the assessee only filed cash flow statement without any supporting evidence to substantiate the opening balance of cash. In the course of hearing, the bench asked the LdAr to file the cash flow statement for the financial year 2010- 2011, and the explanations of LdAr are not satisfactory and he vehemently submitted that the assessee has rental income in the earlier year and the same source be considered. We are not in a position to understand, when the assessee has prepared cash flow statement for financial year 2011-2012, based on the opening balance as on 1-4-2011, the burden of proof lies on the assessee to substantiate with evidence. Since no evidence was filed supporting the opening balance of cash nor cash flow statement for the financial year 2010-2011, the arguments envisaged by LdAr does not stand on merits. Accordingly, we dismiss the contentions and confirm the order of Cit(A) on this issue.