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Income Tax Appellate Tribunal, ‘SMC’ ‘D’ BENCH, CHENNAI
Before: Shri A. Mohan Alankamony
आदेश / O R D E R
This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-13, Chennai dated 02.05.2017 in IT Appeal No.39/CIT(A)-13/AY 2010-11 for the assessment year 2010-11 passed u/s.250(6) r.w.s.143(3) & 147 of the Act.
In this appeal, notice for hearing was sent to the assessee by Registered Post with Acknowledgement Card intimating the assessee that the appeal is fixed for hearing on 17.10.2017. However on the said date none appeared instead the Ld.AR has simply filed an adjournment petition dated 14.10.2017 stating that he is pre-occupied with finalization of tax audit cases. Since the issue in the appeal is simple, it is decided to hear the case ex-parte.
The assessee has raised four grounds in her appeal, however the crux of the issue is that the Ld.CIT(A) has erred in sustaining the addition made by the Ld.AO for Rs.7,50,000/-.
The brief facts of the case are that the assessee is an individual and has not filed her return of income for the relevant assessment year 2010-11. As per the information gathered by the Revenue, it was revealed that the assessee had purchased a property at KMR Nagar, Chettichavadi Village, Salem on 27.04.2009 vide document No.2189/2009 for consideration of Rs.6,84,900/-. The total investment including stamp fee, registration fee etc., works out to Rs.7,50,000/-. On query, the assessee explained the source of investment as the amount gifted by her daughter Mrs. Mercy Angela Dorai from her NRI City Bank saving bank a/c.5124127426 vide Cheque No.94764, 94766 & 94767 dated 21.04.2009, 23.04.2009 & 24.04.2009 respectively. On perusal of the bank statement, the following details were revealed:-
Sl.No. Cheque No. Cheque issued in favour of Amount (Shri./Smt.) 01 94764 Ravi Kumar 3,00,000.00 02 94766 Sikkander Batcha 3,00,000.00 03 94767 Barathiraja 1,50,000.00 From these facts, the Ld.AO opined that since the assessee’s daughter had issued cheque to third parties, the same cannot be treated as gifted to the assessee. Therefore, the case was reopened U/s.147 & 148 of the Act. During the assessment proceedings, it was explained that the afore stated persons Mr. Ravikumar, Mr. Sikkandar Batcha & Mr. Barathiraja were mediators and the payment were made through them for purchase of the property. However, the assessee could not produce the details of these mediators. It was further observed by the Ld.AO that all above mentioned persons had withdrawn cash from the assessee’s daughter’s bank account because the all the cheque were bearer cheque. Moreover, the seller of the property did not acknowledge that these persons were the mediators and further confirmed that cash was not received from those mediators or from the assessee. Since the assessee could not furnish any other information the Ld.AO treated the amount of Rs.7,50,000/- as the unexplained investment and assessed accordingly in the hands of the assessee.
On appeal the Ld.CIT(A) confirmed the order of the Ld.AO by observing as under:- “The appellant's above written submission carefully considered, the appellant contention that the source for the investment was made out of the funds gifted by her daughters could not be proved because the cheques were issued in the name of various person and not in the name of her mother. When the assessee's contention was filed by the AO during the assessment proceedings the assessee has contended before the AO that their daughter was working as engineer at Dubai and the funds for the purchase of the property were withdrawn from her NRI CITI bank account. Since sale insisted for cash payments only and requested for payments through mediators therefore the cheques were issued in the name of the mediators and not in the name of the mother. The AO initially entrusted the responsibility to prove the genuineness on assessee, however assessee to prove genuineness could not produce before the AO the mediators. Therefore the AO issued commissions to the AO of the mediators. The ITO i.e. the AO of the mediator has submitted the reports in the matter and the mediators having denied any such money. The appellant before the appeal authority except repeating the contention which was made before the AO could not prove the genuineness with supporting evidence which makes it abundantly clear that the appellant is not able to explain the source for purchase of the said property. Hence the investment made by the appellant has been rightly added by the AO as unexplained investment u/ s 69 of the income tax act 1961.
The addition made by the AO is therefore confirmed and the ground of appeal on this issue is accordingly dismissed.”
6. The Ld.DR argued in support of the orders of the Ld.Revenue Authorities before us. After hearing the case and examining the issue in detail, I do not find much strength in the order of the Ld.Revenue Authorities. The assessee has explained the source of her investment being the amount received as gift from her daughter. From the facts of the case, it appears that the assessee’s daughter has paid Rs.7,50,000/- to Mr. Ravikumar, Sikkandar Batcha and Barathiraja, who have withdrawn the money from the assessee’s daughter bank account by bearer cheque. The amount of cash transaction matches with the statement given by the assessee. Therefore it can be inferred that Mr. Ravikumar, Sikkandar Batcha and Barathiraja must have paid the money to the seller of the property through some other person and the seller after receiving the amount have executed the sale deed in favour of the assessee. It is also an undisputed fact that the seller has received the sale consideration and only then executed the sale deed in favour of the assessee. Moreover the Revenue has not come out with any evidence to show that the assessee has any other source of income or is engaged in any business or profession from which she could have earned income. Considering these facts and circumstance of the case, I am of the considered view that the source of investment of Rs.7,50,000/- is explained by the assessee and is genuine being the gift received from her daughter who is living abroad. Therefore I hereby direct the Ld.AO to delete the addition of Rs.7,50,000/- made in the hands of the assessee as unexplained investment.
In the result, the appeal of the assessee is allowed.
Order pronounced on the 23rd October, 2017 at Chennai.