SHRI SHRIKANT ANJANE,HARDA vs. THE ITO -1, ITARSI

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ITA 1319/IND/2016Status: DisposedITAT Indore30 March 2017AY 2006-075 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the evidence supporting the source of funds, particularly a certificate from the nephew, was not produced before the Assessing Officer. Therefore, the matter was restored to the Assessing Officer for fresh assessment.

What were the facts?

The assessee invested Rs. 7,30,000/- in mutual funds. The Assessing Officer treated Rs. 4,40,000/- as undisclosed income as the assessee failed to provide satisfactory explanation for its source. The assessee claimed it was received from his nephew, Shri Arun Anjane.

What were the issues?

Whether the addition of Rs. 4,40,000/- as unexplained investment was justified without proper verification of the source of funds from the nephew.

Which sections of the Income-tax Act were involved?

Section 69,Section 144,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI C. M. GARG & SHRI O.P. MEENA

For Respondent: Shri Mohd. Javed – Sr. DR

आदेश / आदेश /O R D E R आदेश / आदेश /

PER O.P. MEENA, ACCOUTANT MEMEBR. This appeal is filed by the assessee against the order of ld.

Commissioner of Income tax (Appeals)-2, Bhopal [hereinafter

referred to as the CIT (A)] dated 22.6.2016. This appeal pertains to

Assessment Year 2006-07 as against appeal decided in respect of

assessment order dated 30.8.2011 passed u/s. 144/147 of the

Shrikant Anjane - ITA No.1319/Ind/2016 A.Y. 2006-07 Page 2 of 5

Income Tax Act, 1961 (herein after referred to as "the Act”) by the

ITO Ward 3(1) Indore [hereinafter referred to as the “AO"].

1.

The only ground taken by the assessee is that the learned

CIT(A) was not justified in confirming the addition of Rs. 4,40,000/-

made by the Assessing Officer by treating the same as undisclosed

income of the assessee u/s 69 of the Act.

1.1 Succinctly, facts as culled out from the orders of lower

authorities are that on the basis of AIR information the Assessing

Officer found that the assessee had made investment of Rs.

7,30,000/- in Standard Chartered/HDFC Mutual Fund. As the

assessee did not file any return of income, the Assessing Officer

issued notice u/s 148 of the Act to file the same. However, the

assessee did not file any return of income till the completion of

assessment. During the course of assessment proceedings it was

pleaded by the assessee that the assessee is an agriculturist and

owner of 18 acres of land. He also submitted that he has no other

source of income. It was also submitted that the investment of

Rs.2,90,000/- was made by him out of his own agricultural income

and further investment of Rs.4,40,000/- was made from the sums

Shrikant Anjane - ITA No.1319/Ind/2016 A.Y. 2006-07 Page 3 of 5

received from his nephew, Shri Arun Anjane. The assessee also

produced before the Assessing Officer receipts from Krishi Upaj

Mandi Samiti in support of the agricultural income. In view of this,

the Assessing Officer treated the investment of Rs.2,90,000/- as

explained. Since the assessee failed to give any satisfactory

explanation regarding the sum of Rs. 4,40,000/- as also failed to

produce Shri Arun Anjane, the Assessing Officer rejected the

explanation of the assessee. Accordingly, the investment in Mutual

Fund to the tune of Rs.4,40,000/- was held to be unexplained

investment u/s 69 of the Act.

1.2 Having felt with the above addition made by the Assessing

Officer, the assessee went in appeal before the learned CIT(A). On

consideration of the facts of the case and the submissions of the

assessee, the learned CIT(A) did not find any force in the appeal and

dismissed the same.

1.3 Against dismissal of appeal by the learned CIT(A), the assessee

has approached the Tribunal by filing the present appeal.

1.4 Before us, the learned counsel for the assessee submitted that

the assessee received the amount of Rs.4,40,000/- by account

payee cheques from his nephew, Shri Arun Anjane. In support of

Shrikant Anjane - ITA No.1319/Ind/2016 A.Y. 2006-07 Page 4 of 5

this, the assessee has filed a copy of certificate from Shri Arun

Anjane (paper book page 10) stating that he gave an amount of

Rs.2,50,000/- and Rs.1,90,418/- by cheque no. 0014396 and

0014397 dated 19.7.2005 and 3.11.2005 to the assessee. Therefore,

the authorities below were not justified in making the confirming

the addition in question. On the other hand, the learned DR

supported the orders of the authorities below.

1.5 After hearing both the sides, we find that the only grievance of

the Assessing Officer is that the assessee has failed to prove as to in

which form the assessee has received the sum, in question, from

Shri Arun Anjane. The Assessing Officer has also observed that the

assessee did not produce Shri Arun Anjane before the Assessing

Officer to prove his creditworthiness. Further, the copy of certificate

as filed before us was not filed before the Assessing Officer. Further

the cash flow statement was also not filed before the Assessing

Officer. We are, therefore, of the view that it would be just and

proper to set aside the orders of the authorities below and restore

the issue to the file of the Assessing Officer. We, therefore, remand

the matter back to the file of the Assessing Officer with the direction

to frame the assessment de novo after providing due opportunity of

Shrikant Anjane - ITA No.1319/Ind/2016 A.Y. 2006-07 Page 5 of 5

hearing to the assessee. At the same time, we also direct the

assessee to produce Shri Arun Anjane before the Assessing Officer

as and when required to prove his case and also necessary evidence

in support of his claim.

2.

In the result, the appeal of the assessee is allowed for

statistical purposes.

3.

Order pronounced in the open Court on 30th March, 2017.

Sd/- Sd/- (सी.एम.गग�) (ओ.पी.मीना) �याियक सद�य लेखा सद�य (C.M.GARG) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

March 30, 2017 Dn/-

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