SHATILAL MEGHRAJ KOTHARI,CHENNAI vs. ACIT, CHENNAI

This appeal was dismissed earlier by this Tribunal by order dated 27.07.2016. However, the assessee filed a Miscellaneous Petition in M.P. No.77/Mds/2017. By an order dated 28.07.2017, the order of this Tribunal dated 27.07.2016 was recalled and the appeal was restored on the file. Accordingly, the appeal was posted for final disposal.

There was a delay of 4 days in filing this appeal by the assessee. The assessee has filed a petition for condonation of delay. We have heard the Ld. representative for the assessee and the Ld. D.R. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.

Shri P. Uttamchand Jain, the Ld. representative for the assessee, submitted that the first issue arises for consideration is addition made by the Assessing Officer under Section 68 of the Income-tax Act, 1961 (in short 'the Act'). According to the Ld. representative, the assessee offered agricultural income to the extent of `3,00,000/-. The assessee could not furnish any evidence. According to the Ld. representative, the assessee has deposited a sum of `9,50,000/- in Union Bank of India. The assessee explained before the Assessing Officer that the cash deposit was from the repayment of loan by sundry debtors. The Ld. representative further submitted that the CIT(Appeals) confirmed the order of the Assessing Officer on the ground that the promissory note and evidence in support of the claim were not filed. According to the Ld. representative, an opportunity may be given to the assessee to produce evidence before the Assessing Officer in support of the repayment of loan by the debtors.

On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee could not furnish any evidence with regard to money lending business either before the Assessing Officer or before the CIT(Appeals).

We have considered the rival submissions on either side and perused the relevant material available on record. From the order of the Assessing Officer it appears that the assessee has deposited a sum of `19,00,000/- in Savings Bank account. The assessee now claims that the amount was deposited from the money collected from the debtors. The assessee pleads for an opportunity to produce necessary material before the Assessing Officer. This Tribunal is of the considered opinion that giving one more opportunity to the assessee may not prejudice to the interests of the Revenue. In any case, giving one more opportunity would certainly promote the cause of justice, therefore, there is nothing wrong in giving one more opportunity to produce necessary material before the Assessing Officer. Accordingly, the orders of both the authorities below are set aside in respect of the addition made under Section 68 of the Act and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer shall re- examine the matter on the basis of the material that may be filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

The next issue arises for consideration is with regard to addition of `3,00,000/- towards agricultural income.

We have heard both, the Ld. representative for the assessee and the Ld. Departmental Representative. The assessee claimed that he owns 7.87 acres of land at Pazhaiyanur Village, Madhuranthakam Taluka and Kancheepuram District. The assessee also claims that the agricultural land was acquired during the earlier assessment year. The assessee claimed before the lower authorities that the land was leased out to one Shri Balu for cultivation and received lease rental. The CIT(Appeals) found that the assessee has not produced any evidence for earning the agricultural income. This Tribunal is of the considered opinion that cultivation of land can be ascertained from the Adangal extract which is otherwise known as Village Account No.2 maintained by the Village Administrative Officer. Every Village Administrative Officer is expected to take cultivation account in every six months.

The next issue arises for consideration is with regard to the addition of `20,83,603/- said to be received from the estate of assessee’s mother.

Shri P. Uttamchand, the Ld. representative for the assessee, submitted that the assessee received a sum of `20,83,603/- from the estate of his mother Mankawar Kothari, which was credited to the capital account during the year under consideration. According to the Ld. representative, the assessee’s mother was assessed to income-tax regularly. The Assessing Officer has not disputed the fact that the assessee is the legal heir and therefore, he cannot dispute the source of funds deposited in the capital account.

On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that there is no evidence to show that the assessee’s mother possessed `20,83,603/- at the time of her death. In the absence of any evidence to establish the source of funds received by the assessee, according to the Ld. D.R., the Assessing Officer has rightly disallowed the claim of the assessee.

We have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that a sum of `20,83,603/- was inherited from his mother’s estate and the same was credited to capital account. The Assessing Officer appears to have found that the assessee’s mother was not having sufficient cash balance as on 31.03.2008.

In the result, the appeal filed by the assessee is allowed for statistical purposes.