SHRI SHRIKANT ANJANE,HARDA vs. THE ITO -1, ITARSI
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?
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
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"].
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.
In the result, the appeal of the assessee is allowed for
statistical purposes.
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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