S.ALWARAPPAN,COIMBATORE vs. ITO, COIMBATORE

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ITA 1377/CHNY/2017Status: DisposedITAT Chennai15 September 2017AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the source of Rs. 9,00,000 was explained by the housing loan taken by the assessee from the bank, even if the details of lending to a friend were not fully proven. Therefore, the addition under Section 68 was not justified.

What were the facts?

The assessee, a salaried employee, deposited a total of Rs. 28,31,000 in his bank account. The Assessing Officer added the entire amount as unexplained. The CIT(A) accepted explanations for most deposits except for Rs. 9,00,000.

What were the issues?

Whether the addition of Rs. 9,00,000 as unexplained cash credit under Section 68 was justified when the assessee had taken a housing loan of that amount from the bank.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ (SMC

Before: SHRI ABRAHAM P. GEORGE]

For Respondent: Shri. B. Sagadevan, IRS, JCIT

आदेश / O R D E R

1.

Assessee through this appeal which is directed against an order dated 30.03.2017 of ld. Commissioner of Income Tax (Appeals)- 2, Coimbatore, is aggrieved on an addition of �9,00,000/- under section 68 of the Income Tax Act, 1961 (in short ‘’the Act’’).

ITA No.1377/2017 :- 2 -:

2.

Facts apropos are that assessee a salaried employee had filed his return for the impugned assessment year declaring income of �2,50,550/- from salary and �5,426/- from other sources. During the course of the assessment proceedings, assessee was required to explain source for the following deposits in his bank account with M/s.

SBI, Saibaba Colony Branch, Coimbatore:- Date of Deposit Amount 11.10.2010 9,00,000 13.10.2010 32,000 21.01.2011 8,00,000 25.01.2011 7,00,000 28.01.2011 3,99,000

Total cash deposits 28,31,000 Assessee explained the sum of �9,00,000/- as coming out of a housing loan taken from the same bank, which was in the interim given by him as a temporary advance to one of his friends. As per the assessee when the friend returned the sum, it was deposited by him in the bank. Other deposits were explained as cash received from his maternal uncles and mother. Ld. Assessing Officer did not accept

ITA No.1377/2017 :- 3 -: these explanations. He made an addition of �28,31,000/- and completed the assessment.

3.

Assessee’s appeal before the ld. Commissioner of Income Tax (Appeals) was partly successful. He accepted the explanation and evidence furnished by the assessee for all the deposits except for �9,00,000/- deposited on 11.10.2010. According to him for the sum of �9,00,000/-, assessee was unable to identify the friend to whom the money coming out of the loan from SBI was given. According to the ld. Commissioner of Income Tax (Appeals) there was no confirmation from such friend available on record.

4.

Now before me, ld. Authorised Representative submitted that the factum of housing loan raised by the assessee from SBI was never disputed by the lower authorities. Thus, according to him, source stood explained since assessee had not constructed any house.

Per contra, ld. Departmental Representative strongly 5.

supported the orders of the authorities below.

6.

I have considered the rival contentions and perused the orders of the authorities below. Revenue has not disputed the housing loan taken by the assessee from SBI. It has also not disputed that assessee had drawn �9,00,000/- from such loan account. There is ITA No.1377/2017 :- 4 -:

also no case for the Revenue that housing loan was raised at a substantially earlier point of time, for disbelieving the source. Even, if I presume that assessee was unable to prove his giving the sum as a temporary loan to his friend and return of the amount from his friend, there can be no doubt that assessee had sufficient source to explain from where the sum of �9,00,000/- had originated. In the circumstances, I am of the opinion that an addition could not have been made under section 68 of the Act. Such addition stands deleted.

7.

In the result, appeal of the assessee is allowed.

Order pronounced on Friday, the 15th day of September, 2017, at Chennai.

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