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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed all the above appeals against the order of the Commissioner of Income Tax (Appeals)-7, in ; 7/2011-12 for the assessment year 2005-06, ITA No. 8/CIT(A)-7/2011-
:-2-: to 1028/Mds/2015 12 for the assessment year 2006-07, for the assessment year 2007-08, ITA No. 6/CIT(A)-7/2011-12 for the assessment year 2008-09, ITA No. 5/CIT(A)-7/2011-12 for the assessment year 2009-10, dated 28.01.2015.
Mr. T. Nagoorn Meeran, the assessee, an individual, was carrying on business in scrap metal and was also getting rental income. On 03.09.2009, a survey was conducted in the residential and business premises of the assessee, certain books of account and documents were impounded based on which the assessee’s assessments for the assessment years 2005-06 to 2009-10 were completed making certain additions. Aggrieved against those orders, the assessee filed appeals before the Ld. CIT(A). The Ld. CIT(A) partly allowed those appeals.
Aggrieved against those orders, the assessee filed the above appeals. income issue, being common, for the assessment years viz a y 2005- 06 to ay 2009-10 :
3.1 The Ld AR argued on only one ground for this assessment year, which is also common for all the above assessment years, viz that the CIT(A) erred in fixing the agricultural income at a meager sum of Rs.
:-3-: to 1028/Mds/2015 1,50,000/- as against Rs. 2,00,000/- claimed for each of the assessment year 2005-06 & 2006-07 and the CIT(A) erred in fixing the agricultural income at a meager sum of Rs. 1,50,000/- as against Rs. 2,50,000/- claimed for each of the assessment year 2007-08 & 2008-09 and Rs. 3,50,000/- claimed for the assessment year 2009-10, respectively. In respect of the other appeal grounds for this assessment year, the Ld. AR has not pressed them. Thus, this issue is common for these assessment years viz a y 2005-06 to ay2009-10.
3.2 For these assessment years, the assessee claimed agricultural income of ; Rs. 2,00,000/- for each of the assessment year 2005-06 & 2006-07, Rs. 2,50,000/- lakhs for each of the assessment year 2007-08 & 2008-09 and Rs. 3,50,000/- for the assessment year 2009-10. It was submitted that the assessee has inherited 6.73 acres of agricultural land from his father and claimed agricultural income which was also used for investing in the properties. However, while making the assessments, the Assessing Officer for want of evidence did not allow the assessee’s claim of agricultural income for the assessment years 2005-06 to 2009-10. Aggrieved, the assessee filed appeals on this issue for all these assessment years. The Ld. CIT(A) found that the AO rejected the VAO’s certificate on the ground that the certificate
:-4-: to 1028/Mds/2015 pertained to the period 01.01.2005 to 31.12.2005 instead of required period of 01.04.2004 to 31.03.2005. Therefore, the Ld. CIT(A) held that the certificate proves the existence of the agricultural lands and cultivation of the crops. For the assessment year 2007-08, after the survey, the Assessing Officer allowed the agricultural income of Rs. 1,50,000/-. Therefore, the ld CIT(A) held that the agricultural income for these assessment years can safely be considered at Rs. 1,50,000/- and accordingly directed the AO to allow the agricultural income at Rs. 1,50,000/- for each of these assessment year and allow necessary the credit for the same while determining the unexplained investments, if any, for the respective assessment year. In this regard, it was pleaded that the Ld. CIT(A) erred in fixing the agricultural income at a meager sum of Rs. 1,50,000/- as against the higher claim made by the assesssee in respective assessment year. Relying on this tribunal decision in the assessee’s case for assessment year 2004-05 in ITA 1023/Mds/2015 dt 26.8.2015, wherein the tribunal upheld the assessee’s claim of agricultural income from the same land at Rs. 2,50,000/-, it was pleaded that the assessee’s admitted agricultural income in the subsequent assessment years be allowed.
3.3 Per contra, the Ld. DR submitted that on the due consideration of the material available on record, the lower authorities have determined
:-5-: to 1028/Mds/2015 the agricultural income at Rs. 1,50,000/- per each of these assessment years. Since, the assessee has not laid any material to assail the findings recorded by the lower authorities, the Ld. DR pleaded that the position taken by the lower authorities be upheld.
We heard the rival submissions and gone through the relevant material. It is clear from the above that this tribunal on due consideration accepted the agricultural income in the assessee’s own case for the assessment year 2004-05 in ITA 1023/Mds/2015 dt 26.8.2015 at Rs. 2,50,000/-. Therefore, we are of the view that the assessee’s admitted agricultural income in the subsequent years, ie in each of the assessment year from a y 2005-06 to ay 2009-10 is reasonable and hence allow the corresponding grounds of assesse for each of the assessment year from a y 2005-06 to a y 2009-10 and direct the A O to give the corresponding credits of these agricultural income , as held by the ld CIT(A), while determining the unaccounted investments, if any, in the assessee’s case.
4.1 In the result, the assessee’s appeal for the assessment year 2005-06 is treated as partly allowed for statistical purposes.
:-6-: to 1028/Mds/2015 5.1 While making the assessment for the assessment year 2006- 07,the Assessing Officer, inter alia, added ; Rs. 10,00,000/- towards the advance paid for a property at Thiruverkadu, Rs. 1,40,000/- towards a property at Mannurpet, Ambattur andRs. 1,80,196/- towards margin money paid for Eicher Van, as unaccounted investments. Aggrieved against that order, the assessee filed an appeal before the CIT(A). The Ld. CIT(A) upheld those additions. Aggrieved against that order, the assessee filed this appeal.
5.2 The Ld. AR pleaded that the Ld. CIT(A) erred in confirming the addition of Rs. 10,00,000/- towards the advance made for a property at S.No. 25/3, 5524 & 3744 in the assessee’s hand and in any event 50% of such amount should have been sustained and not the whole advance, as the property was agreed to be purchased by the assessee along with Shri SindhaMadhar, and the impugned advance was made jointly by the assessee and Mr. SindhaMadhar, each contributing Rs. 5 lakhs on 22.02.2006. The AO has wrongly taken the entire Rs. 10 lakhs as having been contributed by the assessee alone. The said sum of Rs. 5 lakhs contributed by the assessee was demonstrated in the cash flow statement that it was out of the explained sources.
:-7-: to 1028/Mds/2015 5.3 Per contra, the Ld. DR submitted that the Ld. CIT(A) has given a finding that the assessee only has paid the entire advance of Rs. 10 lakhs, although the agreement was subsequently cancelled, the property was also purchased by a third party and the impugned advance is deemed to have been received back on a later date. The sources for the payment of advance of Rs. 10 lakhs stood unaccounted in the assessee’s hand and hence the AO is justified in assessing the same as an unexplained investment in the assessee’s hand. Therefore, the ld DR supported the orders of the lower authorities.
5.4 With regard to the advance made at Rs. 1,40,000/- towards the property at Malayathamman Koil Street, the ld AR pleaded that this investment was considered in the hands of Mrs. Asifa Bhanuin her assessment made for the assessment year 2007-08. In this regard, the Ld. AR invited our attention to the order of the assessment passed in the case of Mrs. N. Asifa Bhanu u/s. 143(3) r.w. 147 dated 23.12.2011, for the assessment year 2007-08, wherein the sources for the investments made in agricultural land at Radhapuram, vacant land at Ambattur, Land and Building at Malayathamman Koil Street, was assessed by the Assessing Officer in the hands of Mrs. N. AsifaBhanu and relied on it.
:-8-: to 1028/Mds/2015 5.4.1 Per contra, the Ld. DR invited our attention to the order of the Ld. CIT(A) and submitted that the assessee admitted that Rs. 1,40,000/- was paid as an advance towards the property on 26.10.2005 but has not furnished any explanation for the sources before the Ld. CIT(A). Since, the advance was paid by the assessee during the period relevant to this assessment year viz a y 2006-07 and the sources were not explained, the sources of this advance has to be assessed as an income in the assessee’s hand only that too during the assessment year 2006-07 itself. Therefore, the Ld. DR submitted that the addition made by the AO and sustained by the Ld. CIT(A) does not require any disturbance.
5.5 With regard to the addition made towards the margin money paid for Eicher van of Rs. 1,80,196/- as an unaccounted income, the Ld. AR submitted that the Ld. CIT(A) erred in upholding the action of the AO.
5.5.1 Per contra, the Ld. DR took us through the orders of the lower authorities and submitted that the cost of Eicher van was Rs. 3,59,196/-, as against which the assessee has obtained a loan from ICICI bank at Rs. 1,79,000/-only. For the balance sum of Rs. 1,80,196/-, the sources of investment was not explained by the :-9-: to 1028/Mds/2015 assessee and hence, the ld DR supported the orders of the lower authorities.
6 We heard the rival submissions and gone through the relevant material. With regard to the advance paid for the property at S.No.
25/3, 5524 & 3744, since the assesse alone has paid the entire advance of Rs. 10 lakhs on 22.02.2006 , the sources for this payment has to be explained by him alone, which he failed. Therefore, we do not find any reason to interfere with the order of the ld CIT(A) on this issue. With regard to the advance made at Rs. 1,40,000/- towards the property at Malayathamman Koil Street, the assesse has admitted that Rs. 1,40,000/- was paid as an advance towards the property on 26.10.2005, but he has not furnished any explanation for the sources either before AO or before the Ld. CIT(A) . Taking in to account that the impugned advance was paid during this assessment year, ie the assessment year 2006-07, we are of the view that the sources of this advance has to be assessed as an income in the assessee’s hand only that too in the assessment year 2006-07 only. Therefore, the addition made by the AO and sustained by the Ld. CIT(A) does not require any disturbance. With regard to the addition made towards margin money paid for Eicher van of Rs. 1,80,196/- as an unaccounted income, we find merit in the submission of the Ld. DR that the cost of Eicher van was Rs. 3,59,196/-
:-10-: to 1028/Mds/2015 , as against which the assessee has obtained a loan from ICICI bank at Rs. 1,79,000/- only. For the balance sum of Rs. 1,80,196/-, the sources of investment was not explained by the assessee and hence the orders of the lower authorities do not require any disturbance. Thus, the corresponding grounds of the assesse fail.
In the result, the assessee’s appeal for the assessment year 2006-07 is partly allowed.
8.1 While making the assessment, the assessee filed a cash flow statement. After examining the sources, the Assessing Officer, inter alia, made an addition of ;Rs. 14,00,000/- towards unaccounted investment for the house construction, did not give credit for the rental advance of Rs. 2,00,000/-and added Rs.15,91,478/- towards unaccounted deposits in the bank account. Aggrieved the assesssee filed an appeal before the CIT(A). The ld CIT(A) partly allowed the appeal. Aggrieved against that order, the assessee filed this appeal.
The Ld. AR submitted that the Ld. CIT(A) ought to have seen that the entry made in the cash flow statement is wrong and the Shiva
:-11-: to 1028/Mds/2015 Construction has already confirmed that they have never constructed anything on the land at No. 6, Malayathamman Koil Street. Further, the Ld. CIT(A) erred in upholding the action of the AO in not giving the credit for the rental advance received during the year of Rs. 2,00,000/- and he erred in confirming the sum of Rs. 1,18,522/-, out of the deposits with Union Bank of India.
Per contra, the Ld. DR submitted that the assessee submitted before the Ld. CIT(A), that in the cash flow statement filed by him, he has erroneously mentioned that he has paid Rs. 14,00,000/- to M/s.
Shiva Construction for construction of residential house at No. 6, Malayathamman Koil Street, Chennai . The site purchased had already an existing building and assessee has never constructed or put up any further construction in the said property. However, the Ld. CIT(A) held that the assessee himself furnished the cash flow statement claiming that he has paid Rs. 14,00,000/- to M/s. Shiva Construction for construction. When the assessee has shown such an amount in the outflow side, which creates an imbalance on the inflow side too, towards which the assessee has to explain the sources and therefore, the ld DR submitted that the ld CIT(A) has correctly decided the issue.
:-12-: to 1028/Mds/2015 10.1 With regard to the unaccounted deposits into bank account, the ld DR submitted that the assessee's bank account maintained with Union Bank of India showed a total deposits of Rs.15,91,478/- during the financial year 2006-07. In the absence of tangible explanations from the assesse, the Assessing Officer brought the total deposits of Rs.15,91,478/- to tax as an unaccounted deposits. On appeal, the ld CIT(A) held that the above bank account is an accounted bank account and the closing balances as on 31st March of every yearwas also reflected in the statement of affairs of the assessee. Hence, the Assessing Officer is not justified in treating all the deposits into this account during the year as an unaccounted deposits. Further, these deposits are not in the form of cash. Out of the total deposits of Rs.15,91,478/- found during the year, only Rs.2,36,500/- are the cash deposits made and the balance deposits of Rs.13,55,478/- are the cheque/DD clearances etc. As against these cash deposits, there were cash withdrawals during the year of Rs.1,50,000/- on 19.06.2006, which could be a partial source for the subsequent cash deposits. All other transactions, i.e. other than cash deposits/ withdrawals, are verifiable.
Hence, the ld CIT(A) held that the Assessing Officer's action of bringing the total (entire) deposits of Rs.15,91,478/- to tax is not justified.
Therefore, the ld CIT(A) directed the Assessing Officer to consider only the peak of the cash credit balance of Rs.4,25,536 [cr] found on :-13-: to 1028/Mds/2015 05.02.2007, as an unaccounted deposits into the bank account, for the purpose of assessment. At the same time, it is to be remembered that, on the same aspect an amount of Rs.3,07,014/- has already been considered for assessment, being the peak credit balance in the account, in the assessment of A.Y.2005-06. Hence , a necessary credit for the same is required to be given in the present year while bringing the peak credit balance to tax of the present year. Since an amount of Rs.3,07,014/- was already considered in the assessment of A.Y.2006-07, the addition required to be made in the present A.Y.2007-08 will be the difference between these two amounts, i.e. Rs.4,25,536/- minus Rs.3,07,014/-, amounting to Rs.1,18,522/-. Hence, the ld CIT(A) directed the Assessing Officer to consider only Rs.1,18,522/- for the purpose of determining the unaccounted investments, against Rs.15,91,478/- considered by him in his order. Therefore, the ld DR pleaded that the addition sustained by the ld. CIT(A) is in order and hence be upheld .
10.2 With regard to the action of the AO in not giving the credit for the rental advance received during the year of Rs. 2,00,000/- , the Ld. DR submitted that the assessee pleaded before the Ld. CIT(A) that he has received Rs. 2,00,000/- from Shri Justin by cheque on 17.06.2006 and hence, necessary credit should be given while computing the unaccounted investments. The Ld. CIT(A) noted that there was a credit
:-14-: to 1028/Mds/2015 in the bank account on 17.06.2006 for Rs. 2,00,000/- by way of inward remittance. But, it was not known whether that the amount was received from Shri Justin or not. Since, the unaccounted investment was arrived out on the basis of peak cash credit balances alone, supra, the Ld. C’s IT(A) observation that the rental advance received in cheque would not cause any mistake in not giving the credit for the rental advance in the cash flow statement is in order and therefore, the ld DR submitted that the ld CIT(A)correctly did not consider the rental advance for giving any credit.
We heard the rival submissions and gone through the relevant material. On the issue of addition towards unaccounted investment for the house construction at Rs. 14,00,000/-, considering the assessee’s plea that the entry made by him in the cash flow statement is wrong and the Shiva Construction has already confirmed that they have never constructed anything on the land at No. 6, Malayathamman Koil Street etc., we deem it fit to remit this issue back to the A O for a fresh examination. The assessee shall furnish all relevant material before the A O and comply with the requirements of the AO in accordance with law. The AO after affording due opportunity to the assessee shall decide the issue afresh in accordance with law.
With regard to issue addition of Rs. 1,18,522/-, out of the deposits with Union Bank of India, since the ld CIT(A) has arrived the :-15-: to 1028/Mds/2015 unaccounted investments at Rs. 1,18,522/-, supra, based on the peak cash credits alone that too after giving further telescoping for the addition made in the earlier assessment year , we do not find any merit in the assessee’s submission on this issue. On the same analogy, on the issue that AO has not given the credit for the rental advance received in cheque during the year, since all the cheque receipts including the impugned rental advance was not considered in the above quantification of unaccounted investment made by the ld CIT(A) , we find merit in the ld DR’s submission on this issue and hence dismiss the corresponding ground of the assessee.
In the result, the assessee’s appeal for the assessment year 2007- 08 is treated as partly allowed for statistical purposes.
14.1 While making the assessment for assessment year 2008-09, the assessee filed a cash flow statement. After examining the sources, the Assessing Officer, inter alia, made addition towards unaccounted investment towards ‘advance to supplier’ at Rs. 4,54,000/- , to a scrap seller , as found at the time of survey, and the AO has not given credit for the rental advance at Rs. 3,20,000/-. Aggrieved the assessee filed an :-16-: to 1028/Mds/2015 appeal before the CIT(A). The ld CIT(A) dismissed the appeal.
Aggrieved against that order, the assessee filed this appeal.
The ld AR submitted that the Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 4,54,000/- made on account of advance to supplier, even though the book results in respect of the business had been accepted by the Assessing Officer and he erred in upholding the action of the AO in not giving credit for the rental advance during the year of Rs. 3,20,000/-. The ld CIT(A) ought to have seen that all the investments are fully reconciled with the cash flow statement and he ought to have directed the Assessing Officer to treat all the investments as fully explained and deleted the additions.
Per contra, the ld DR submitted that though the assessee claimed that the advance of Rs. 4,54,000/- was paid to the supplier, as shown in the "cash flow statement" (of F.Y.2007-08) and the return of income of A.Y.2008-09, was on account of the business transactions etc, before the ld CIT(A) the assessee has not furnished any further evidences in this regard. Therefore, the ld CIT(A) held that the claim of the assessee is not acceptable, the action of the Assessing Officer in considering the advance of Rs. 4,54,000/- paid to suppliers, as an investment of the year and determining the corresponding unaccounted investments and :-17-: to 1028/Mds/2015 bringing to tax is justified and confirmed. Even before this hon’ble ITAT also , the assessee has not laid any material in support of its contention and it could not point out how the decisions arrived by the lower authorities are wrong therefore, the ld DR submitted that there is no merit in the assessee’s claim. With regard to non-consideration of rental advances received at Rs.3,20,000, the ld DR submitted that the assessee explained before the ld CIT(A) that he received rental advances of Rs.1,50,000/-, Rs.1,00,000/- and Rs.70,000/- during the financial year, through bank accounts (as credited in to the Union bank of India account) and hence necessary credit be given while computing the unaccounted investments, if any. The ld CIT(A) held that as could be seen from the assessee's bank account of Union Bank of India there were credit entry of Rs.70,000/-, Rs.1,00,000/- and Rs.1,50,000/- on 18.04.2007, 21.05.2007 and 09.10,2007, respectively, by way of inward remittances (clearances). But , it is not known whether the amounts received are towards the rental advances or not. In any case, since the unaccounted investment was arrived out on the basis of peak cash credit balance, for the purposes of determining the unaccounted investments, as was done in the earlier assessment year, supra, the assessee’s claim of credit for the rental advances received in cheque would not have any impact and hence the ld CIT(A) has not considered
:-18-: to 1028/Mds/2015 the assessee's claim. Therefore, the ld DR supported the order of the ld CIT(A) .
We heard the rival submissions and gone through the relevant material. Since the assessee has not pointed out how the decisions arrived by the lower authorities on the above issues are wrong and has not laid any material in support of its contentions before us, we find merit in the submissions made by the ld DR , supra, and hence dismiss the corresponding grounds of the assessee.
In the result, the assessee’s appeal for the assessment year 2008- 09 is partly allowed.
19.1 While making the assessment for assessment year 2009-10, the assessee filed a cash flow statement. After examining the sources, the Assessing Officer, inter alia, made addition towards unaccounted investment in property purchase at Rs. 65,00,000/- , unaccounted investment in house construction at Rs. 12,00,000/- and unaccounted bank deposits at Rs.18,68,916. Aggrieved the assessee filed an appeal
:-19-: to 1028/Mds/2015 before the CIT(A). The ld CIT(A) partly allowed the appeal. Aggrieved against that order, the assessee filed this appeal.
The ld AR submitted that the assessee purchased the property on behalf of his mother-in-law and the entire consideration of Rs.65,00,000/-, including the advance of Rs.14,00,000/- was actually paid by his mother in law only. Out of the total consideration of Rs.65,00,000/-, the advance of Rs.14,00,000/- was paid in the financial year 2008-09 and the balance of Rs.51,00,000/- was paid in the following financial year 2009-10, and accordingly the property was registered in his mother-in-law's name on 06.07.2009. Therefore ,the ld CIT(A) erred in sustaining the addition to the extent of Rs.14,00,000O/- made towards unaccounted investments in property purchase and he failed to note that even the advance for the property was paid out of the funds provided by the appellant's in-laws. The ld AR invited our attention to the copy of the letter sent by the ITO, Ward 2, Tirunelveli dt 10.01.2017 to the assessee’s mother in law, Smt. HatoonBeevi , PAN AHVPH1631G for the assessment year 2010-11 seeking the sources for the acquisition of the property. Since the AO of the assessee’s mother in law has taken up the matter in her case, the impugned sources could have been assessed in her case. When the bench asked the current status, the ld AR submitted that the relationship between them is not :-20-: to 1028/Mds/2015 cordial now and hence the current position is unknown but pleaded to allow the appeal on this issue. The ld AR further submitted the ld CIT(A) having found that no construction was carried out in respect of the land at No.5A, KSR Nagar, ought to have deleted the addition of Rs.12 Lakhs instead of sending the issue back to the assessing officer for verification. The Commissioner of Income-Tax (Appeals) erred in confirming a sum of Rs.76,008/-out of the deposits into the appellant's account with Union Bank of India and he ought to have seen that all the investments are fully reconciled with the cash flow statement and he ought to have directed the Assessing Officer to treat all the investments as fully explained and deletes the addition. Therefore, the ld AR pleaded to allow the appeals.
Per contra, the ld DR submitted that the assessee entered into an agreement with Mrs BuhariSharifa, during the financial year 2008-09, for purchase of a property located at No.9, Asaithambi Street, Padi, Chennai-50 for a total consideration of Rs.65,00,000/- and paid an advance of Rs.14,00,000/-, as on the date of the agreement. The agreement contained the name of the assessee as the purchaser (buyer) of the property. One of the main reasons for the A O for considering the entire investment in the hands of the assessee is the statement of the seller of the property, who stated that the sale
:-21-: to 1028/Mds/2015 consideration was received from the assessee. However, the ld CIT(A) held that under the Indian conditions, normally the money transactions (i.e. payments and receipts of cash) are generally handled by the men- folk. Hence, the assessee's explanation that the money of Rs.65,00,000/- received from his mother-in-law was paid to the seller on behalf his mother-in-law, is not an abnormal or uncommon practice.
Hence , no adverse inference can be draw from the said statement of the seller of the property. Therefore, the ld CIT(A) held that A O is not justified in considering and concluding that the property belonged to the assessee and bringing the total consideration of Rs.65,00,000/- to tax in the hands of the assessee. There were no evidences to show that the total purchase consideration of Rs.65,00,000/- was paid as on 31.03.2009. As on 31.03.2009, the total amount paid was only Rs.14,00,000/-, which was paid by way of advance, as per the agreement. The balance of Rs.51,00,000/- claimed to have been paid only during the financial year 2009-10, i.e. after 31.03.2009. Hence,the unaccounted investments in the purchase of the property, for the financial year ending on 31.03.2009, should be only Rs. 14,00,000/-, and not Rs.65,00,000/-. In any case, as on the date of the signing the agreement for purchase of the property during the financial year 2008- 2009, the advance paid of Rs.14,00,000/- has flown from the assessee and not from the assessee's mother-in-law as there were no evidences
:-22-: to 1028/Mds/2015 to show that the money was actually received from the assessee's mother in law and especially when the agreement was in the name of the assessee himself. Hence, as on the date of signing the agreement, the advance payment of Rs.14,00,000/- represents the unexplained investments made by the assessee. Also, the assessee could not bring anything on record that he was in receipt of this advance from his mother-in-law till 31.03.2009. Hence, the ld CIT(A) held that the impugned advance of Rs.14,00,000/- paid by the assessee at the time of signing the agreement (and also continued till 31.03.2009) forms an investment made by the assessee and needs to be reckoned for the purpose of determining the unexplained investments of the assessee for the financial year 2008-09. The balance of Rs.51,00,000/- cannot be brought to tax in the hands of the assessee as it was paid in the subsequent financial year and also the property was actually registered in the name of the assessee's mother-in-law. Therefore, ld CIT(A) held that the action of the A O in considering and determining unexplained investments in the above property to the extent of the above advance of Rs.14,00,000/- is justified and confirmed. The ld DR submitted that even now, before this hon’ble tribunal also, the assessee is not able to lay any material to substantiate the assessee’s claim. The assessee’s plea based on the copy of the letter sent by the ITO, Ward 2, Tirunelveli dt 10.01.2017 to the assessee’s mother in law, Smt. HatoonBeevi , for :-23-: to 1028/Mds/2015 the assessment year 2010-11 , supra, seeking the sources for the acquisition of the property, is of no help to the assessee as the impugned addition is related to the period for the assessment year 2009-10 towards which the assessee has not placed any material.
Thus, the ld DR supported the orders of the lower authorities.
We heard the rival submissions and gone through relevant material. The fact remains that the Revenue unearthed an agreement at the time of survey as per which assessee entered into an agreement with Mrs BuhariSharifa, during the financial year 2008-09, for purchase of a property located at No.9, Asaithambi Street, Padi, Chennai-50 for a total consideration of Rs.65,00,000/- and paid an advance of Rs.14,00,000/-, as on the date of the agreement. That agreement contained the name of the assessee as the purchaser (buyer) of the property.As on the date of the signing the agreement for purchase of the property during the financial year 2008-2009, the advance paid of Rs.14,00,000/- has flown from the assesse and not from the assessee's mother-in-law as there were no evidences to show that the money was actually received from the assessee's mother in law and especially when the agreement was in the name of the assessee himself. Hence, as on the date of signing the agreement, the advance payment made at Rs.14,00,000/- represents the unexplained investments made by the :-24-: to 1028/Mds/2015 assessee. Since the assessee could not bring anything on record that he was in receipt of this advance from his mother-in-law till 31.03.2009, we find merit in the submissions made by the ld DR , supra, and do not find any reason to interfere with the orders of the lower authorities.
Therefore, the corresponding grounds of the assessee fail.
On the ld AR’s submission on the issue of unaccounted investments in the house construction , supra, the ld DR submitted that the assessee during the financial year 2008-09 purchased a property at Plot No.SA, KSR Nagar, Ambattur, Chennai on 30.09.2008 for Rs.23,17,250/-. This fact has been admitted by the assessee at the time of survey and also in the return of income. In his "cash flow statement" and the "statement of affairs" prepared and submitted before the department, the assessee has shown construction of house in that property for Rs.12,00,000/- and hence theAssessing Officer, while determining the unaccounted investments of the yeartreated such sum as an investment made during the year. But , before the ld CIT(A) the assessee submitted that he has erroneously mentioned in the "cash flow statement" and the "statement of affairs" that he has spent Rs.12,00,000/- for construction of house in that land , the property was purchased as a vacant land and in the subsequent years it was also sold (on 21.09.2012) as a vacant land. Therefore, Rs.12,00,000/- shown as construction for construction
:-25-: to 1028/Mds/2015 of is an error and hence it may kindly be deleted from the total of the investments made and re-compute the unaccounted investments. The ld CIT(A) based on the material before him observed that as could be seen from the details furnished by the assessee, the impugned property was purchased on 30.09.2008 for Rs.23,17,250/-, was subsequently sold out on 21.09.2012 for a consideration of Rs.45,00,000/-, the sale deed of the property dated 21.09.2012 showed that the property sold was a vacant land. This fact goes to prove that there was no construction carried out in the said property. In such a case, the question of investments in the form of construction of house in the property doesn't arise. However, ld CIT(A) directed the Assessing Officer to verify and examine this issue and if it is found that the sale was only of the vacant land, the Assessing Officer can delete the addition of Rs.12,00,000/- considered as an unaccounted investment in house construction. On the other hand, if the property sold included any buildings, the Assessing Officer's inclusion of Rs.12,00,000/- as the unaccounted investment in house construction stands justified and confirmed. Therefore, the ld DR submitted that the assessee is not justified in making the objections on this issue.
:-26-: to 1028/Mds/2015
We heard the rival submissions and considered them carefully.
We find merit in the submissions made by the ld DR , supra, and hence dismiss the corresponding grounds of the assessee.
On the ld AR’s plea that the ld CIT(A) erred in confirming a sum of Rs.76,008/- out of the deposits into the appellant's account with Union Bank of India, the ld DR submitted that the assessee's bank account maintained in the Union Bank of India showed a total deposits of Rs.18,68,916/- during the financial year 2008-09. In the absence of tangible explanations from the assesse, the Assessing Officer brought the total deposits of Rs.18,68,916/- to tax as unaccounted deposits into the bank account. On assessee’s appeal , the ld CIT(A) held that the bank account is an accounted bank account and the closing balances as on 31stMarch of every year also reflected in the statement of affairs of the assessee. Hence , the Assessing Officer is not justified in treating the all the deposits into this account during the year as unaccounted deposits. Further, these deposits are not in the form of cash. Out of the total deposits of Rs.18,68,916/- found during the year, only Rs.5,32,000/- are the cash deposits made and the balance deposits of Rs.13,36,916/- are the cheque/DD clearances etc. All other transactions, i.e. other than cash deposits/ withdrawals, are verifiable. Hence the Assessing Officer's action of bringing the total (entire) deposits of :-27-: to 1028/Mds/2015 Rs.18,68,916/- to tax is not justified. The Assessing Officer is directed to consider only the peak of the credit balance of Rs.5,01,544 (cr) found on 29.08.2008, as unaccounted deposits into the bank account, for the purpose of assessment. At the same time, it is to be remembered that, on the same aspect amounts of Rs.3,07,014/- and Rs.1,18,522/- (totaling to Rs.4,2S,S36/-) have already been considered for assessment, being the peak credit balances in the account, in the assessments of A.Y.2005-06 and 2007-08, respectively. Hence a necessary credit for the same is required to be given in the present year while bringing the peak credit balance to tax of the present year. Since Rs.4,25,536/- has already been considered in the assessments of the earlier years (i.e. Rs.3,07,014/- in A.Y.2005-06 and Rs.1,18,522/- in A.Y.2007-08), the addition required to be made in the present A.Y.2009-10 is only Rs.76,008/-- (i.e. Rs.5,01,544 - Rs.4,25,536).
Therefore, the ld CIT(A) directed the AO to consider only Rs.76,008/- for the purpose of determining the unaccounted investments, as against Rs.18,68,916/- considered by the AO .
We heard the rival submissions and considered them carefully.
Since the ld CIT(A) has arrived the unaccounted investments at Rs. 76,008/-, supra, based on the peak cash credits alone that too after giving further telescoping for the addition made in the earlier
:-28-: to 1028/Mds/2015 assessment years , we do not find any merit in the assessee’s submission on this issue and hence dismiss the corresponding grounds of the assessee.
In the result, the assessee’s appeal for the assessment year 2009-10 is partly allowed .
Order pronounced on 20th day of December, 2019 at Chennai.