R.K.MALATHY,CHENNAI vs. ITO, CHENNAI

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ITA 1261/CHNY/2016Status: DisposedITAT Chennai31 May 20176 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee, being a Non-Resident, may not have had sufficient opportunity to produce evidence. The Tribunal set aside the orders of the lower authorities and remitted the issue back to the Assessing Officer for fresh consideration.

What were the facts?

The assessee, a Non-Resident Indian, had made significant cash deposits in her bank accounts. The Assessing Officer treated these deposits as unexplained income. The assessee claimed the deposits were from the sale of gold jewellery gifted by her grandfather.

What were the issues?

Whether the cash deposits in the bank accounts of the assessee were unexplained income, and if the assessee provided sufficient evidence to prove the source of these deposits.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ (SMC

Before: SHRI ABRAHAM P. GEORGE]

For Respondent: Shri. M.S. Nethrapal, IRS, JCIT

आदेश / O R D E R

1.

This is an appeal filed by the assessee directed against an order dated 17.12.2015 of ld. Commissioner of Income Tax (Appeals)- 7, Chennai.

ITA No.1261/Mds/2016 :- 2 -:

Appeal has been filed with a delay of Eighty Four days. 2.

Assessee has filed a Condonation petition in which it says that her Chartered Accountant fell ill and could not give advice nor file the appeal in time. Ld. Departmental Representative did not raise any serious objection. Accordingly delay is condoned. Appeal is admitted.

3.

The only effective ground taken by the assessee is on sustenance of an addition of �27,42,370/- considered by the ld. Assessing Officer as unexplained credit in the bank accounts of the assessee. During the course of assessment proceedings of the assessee, who was having income only from capital gains and other sources, it was noted by the ld. Assessing Officer that she had two bank accounts, one with M/s. Punjab National Bank, Anna Nagar branch and another with M/s. Central Bank of India, Kilpauk branch.

Ld. Assessing Officer found that assessee had made the following cash deposits in the above bank accounts.

Sl.No Name of the Bank Date of Deposit Amount of Deposit (Rs) 1 Central Bank of India 11/7/2009 1,000 2 Central Bank of India 15/7/2009 5,00,000 3 Central Bank of India 08/08/2009 5,00,000 4 Central Bank of India 11/12/2009 8,00,000 5 Central Bank of India 11/12/2009 10,000 6 Central Bank of India 12/12/2009 4,000 Punjab National Bank 7 13/07/2009 1,000 Punjab National Bank 8 06/07/2009 5,00,000 Punjab National Bank 22/08/2009 6,00,000 Total 29,15,000

ITA No.1261/Mds/2016 :- 3 -:

Since assessee was a Non Resident Indian, settled in Middle East, she was represented by her father. It seems he was not able to give details and source for the deposits in the above bank accounts. Ld. Assessing Officer made an addition for the entire cash deposits in the bank accounts after deducting the returned income of �1,72,630/-.

In her appeal before ld. Commissioner of Income Tax 4.

(Appeals), argument of the assessee was that she had sold gold jewellery and silver articles gifted to her by her grandfather in 1995 when she was nine years of age. As per the assessee a declaration of gift, executed on 5th July, 1995 by Shri. RS Armugam, her grandfather was filed before the ld. Assessing Officer, but was not considered.

However, ld. Commissioner of Income Tax (Appeals) did not accept the above contention, but confirmed the additions citing the following reasons.

‘’1) The source of jewellery in the hands of grandfather has not been explained. No Wealth-tax returns or any other piece of evidence has been brought on record to substantiate the contention that the impugned jewellery was possessed by the grandfather. 2) There was no voluntary disclosure of the source of cash deposits in the return of income filed by the appellant. 3) The matter came to light only on account of the AIR information received from the Bank.

ITA No.1261/Mds/2016 :- 4 -:

4) Crucially, the appellant has not been able to bring any evidence on record regarding the sale of the impugned jewelry and silver articles. 5) During the course of hearing, authorised representative submitted that the sale was made in cash, and as such there is no documentation or evidence. 6) In the circumstances, the appellant has neither been able to give any evidence regarding the source of the precious items in the hands of the grandfather, nor any evidence whatsoever pertaining to the sale of jewellery and receipt of cash that was stated to have been deposited in the bank account’’.

Now before me, ld. Authorised Representative submitted that 5. the assessee being a Non Resident Indian did not get sufficient opportunity to produce the records relating to sale of gold jewellery before lower authorities. As per ld. Authorised Representative there was a communication gap between the assessee and her father who was representing her. Contention of the ld. Authorised Representative was that assessee was having every record to prove auction of gold jewellery by one M/s. Gurusanthi Auctioneers, which gave all details of the money received by her on the sale of the gold jewellery, gifted to her by her grandfather. Contention of the ld. Authorised Representative was that assessee having become a Non Resident, she was not interested in holding any gold jewellery in India and hence made the sale.

ITA No.1261/Mds/2016 :- 5 -:

Per contra, ld. Departmental Representative submitted that 6.

assessee was given number of opportunities by the lower authorities but failed to produce necessary evidence in support of the credits in the bank account.

7.

I have considered the rival contentions and perused the orders of the authorities below. Claim of the assessee is that source for the deposits in bank were out of sale proceeds of gold ornaments given to her by her Grandfather when she was aged nine. It is not disputed by the ld. Departmental Representative that assessee had filed before ld. Assessing Officer a gift deed executed on 5th July, 1995 by Shri. RS Armugam, grandfather of the assessee. Since assessee is a Non Resident there is a distinct probability that she was not able to reach out to the ld. Assessing Officer and produce evidence of auction of gold jewellery by M/s. Gurusanthi Auctioneers. Ld. Authorised Representative has produced before me, records which prima facie show that Gurusanthi Auctioneers had auctioned various items of gold jewellery owned by the assessee. In the circumstances, I am of the opinion that the matter requires a fresh look by the ld. Assessing Officer. I set aside the orders of the authorities below and remit the issue regarding source of deposits made by the assessee in her bank account back to the file of the ld. Assessing Officer, for consideration

ITA No.1261/Mds/2016 :- 6 -: afresh in accordance with law. Assessee shall be given adequate opportunity to furnish evidence in support of her claim.

8.

In the result, appeal of the assessee is allowed for statistical purpose.

Order pronounced on Wednesday, the 31st day of May, 2017, at Chennai.

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