SRI S MOHAMMED RAFIQ vs THE INCOME TAX OFFICER

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12th DAY OF JANUARY, 2015 PRESENT THE HON' BLE MR. JUSTICE N.KUMAR AND THE HON' BLE MR. JUSTICE B. VEERAPPA INCOME TAX APPEAL No. 199/2009 BETWEEN:

Sri S. Mohammed Rafiq, Babu Agencies, Onion Market, P.B. Road, Davangere.

... APPELLANT

(BY SRI KASHINATH KALMATH, ADVOCATE FOR R. RAMA MURTHY)

AND:

The Income Tax Officer, Ward-2, Davangere

... RESPONDENT

(BY SRI K.V. ARAVIND, ADVOCATE) …

This ITA is filed under Section 260-A of the Income Tax Act, 1961 arising out of Order dated 24.12.2008 passed in ITA No. 1278/Bang/2007, for the assessment year 2004-05 praying to formulate the substantial questions of law stated therein and to allow the appeal and set aside the order passed by the ITAT Bangalore in ITA No.1278/Bang/2007, dated 24.12.2008 in the interest of justice and equity.

This Income Tax Appeal coming on for Hearing this day, N. Kumar J., delivered the following:

JUDGMENT

This appeal is admitted to consider the following substantial questions of law:

i) Whether on the facts and in the circumstances, the Appellate Tribunal is right in sustaining the addition of Rs.51,276/- made as unexplained credit ignoring the same is out of agricultural income of onions?

ii) Whether on the facts and circumstances of the appellant’s case, the Tribunal is right in its conclusion that failure to produce Donor before Assessing Officer warrants to treat the gift as unexplained credit, notwithstanding confirmation and affidavit are filed and inability to produce them as Donee?

The assessee is an individual carrying on business as a commission agent in onion. For the assessment year 2004-05 he filed a return of income on 24.12.2004 declaring the income of

3 Rs.1,62,869/-. In the course of assessment, the assessing authority noticed that the assessee was claiming a sum of Rs.5,00,000/- as gift by his brother and as the said gift was not satisfactorily explained, it added the income as unexplained cash credit by applying the provisions of Section 68 of the Income Tax Act, 1961 (for short hereinafter referred to as ‘the Act’). Aggrieved by the said order, the assesse preferred an appeal to the Commissioner of Income Tax (Appeals), who dismissed the same against which second appeal was preferred to the Tribunal. In the second appeal, the Tribunal has upheld the said finding. Aggrieved by the said order, the present appeal is filed.

3.The learned Counsel appearing for the assesse assailing the impugned order has contended that the affidavit filed and the letter

4 written by the brother of the assessee clearly explain the source of income of Rs.5,00,000/- was given to him by way of gift. By not looking into the letter written by the brother of the assessee and insisting on his physical presence, the assessing authority was not justified in not accepting the case of the assessee. Both the appellate authorities without proper appreciation of the case of the assessee have confirmed the said order and therefore, he submits that a case for interference is made out.

The question that arises for our consideration is: Whether a sum of Rs.5,00,000/- which was added by the assessing authority is an unexplained credit?

Though the assessee has filed an affidavit of his brother and letter addressed by his brother, he was not able to produce his brother for examination. On a careful appreciation of the

5 evidence on record, both the authorities have recorded a categorical finding that a sum of Rs.5,00,000/- remains unexplained which is purely a question of fact.

In that view of the matter, the impugned orders cannot be found fault with. Accordingly, the substantial question of law is answered in favour of the revenue and against the assesse. There is no merit. Appeal is dismissed.

Sd/-

Judge

Sd/-

Judge

Nsu/-

SRI S MOHAMMED RAFIQ vs. THE INCOME TAX OFFICER