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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SANJAY ARORA, AM & SHRI RAM LAL NEGI, JM
सुनवाई क� तार�ख / : 26.5.2016 Date of Hearing घोषणा क� तार�ख / : 26.8.2016 Date of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-33, Mumbai (‘CIT(A)’ for short) dated 17.9.2012, dismissing the Assessee’s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2008- 09 vide order dated 27.12.2010.
(A.Y. 2008-09) Samson Alex vs. ITO 2. None appeared for and on behalf of the assessee-appellant when his appeal was called out for hearing nor is there any adjournment motion on record. This, despite due service of notice of hearing, proof of which is on record. There is even no letter of authority in favour of any counsel on record. The appeal is pending disposal since February, 2013, having been filed on 01.02.2013. It was, accordingly, considered proper to proceed with the hearing thereof, and decide the same after hearing the party before us and considering the material on record.
3.1 The brief facts of the case are that the assessee-individual, who filed his return of income for the year on 31.3.2009 at an income of Rs.11.11 lacs, was found during the assessment proceedings to have deposited cash in his bank account during the year at Rs.34 lacs, as under: (refer para 3 of the assessment order) Date Deposit (Rs.) Withdrawal Balance (Rs.) 27.12.2007 3,00,000/- - 3,00,000/- 29.12.2007 3,00,000/- - 6,00,000/- 03.01.2008 3,00,000/- - 9,00,000/- 04.04.2008 3,00,000/- - 12,00,000/- 07.01.2008 3,00,000/- - 15,00,000/- 09.01.2008 3,00,000/- - 18,00,000/- 11.01.2008 3,00,000/- - 21,00,000/- 14.01.2008 2,00,000/- - 23,00,000/- 17.01.2008 2,00,000/- - 31,00,000/- 09.02.2008 3,00,000/- - 34,00,000/- Rs.34,00,000/- (the table is incomplete as the total deposits aggregate to Rs. 28 lacs, as against the admitted sum of Rs. 34 lacs) The assessee not furnishing any explanation in the assessment proceedings toward the nature and source of the said cash deposits, the same were brought to tax u/s.69/69A of the Act by the Assessing Officer (AO).
3.2 In appeal, the assessee explained the same as on account of the sale proceeds of an ancestral land by his father, Mr. Irudhayam – who is stated to have deposited the (A.Y. 2008-09) Samson Alex vs. ITO said cash in the assessee’s bank account ‘unknowingly’, producing a ‘deed of property document’ (in Tamil) as well as the English translation thereof. The same was, however, considered not adequate by the ld. CIT(A) to establish the assessee’s claim. Firstly, there was no reason for not furnishing the said document before the assessing authority, who had allowed the assessee proper opportunity to explain his case during the assessment proceedings, so that there was non-satisfaction of Rule 46A (of the Income Tax Rules, 1962), mandatory in its’ application. Then, the ‘transfer deed’, which is dated 05.9.2007, was on a stamp paper of Rs.100, stating the sale consideration at Rs.33.40 lacs, of which Rs.3.40 lacs was stated paid as advance and the balance Rs.30 lacs to be paid in 10 equal monthly installments of Rs. 3 lakh each. The mode and manner of the payment of Rs.3.40 lacs was not stated therein. Further, no cash receipts were adduced in support nor were so the cash deposit slips (toward the deposit of the cash in the assessee’s bank account), i.e., despite being called for. In fact, the assessee had not even moved any application for admission of additional evidence, so that the said document could not be admitted. Reliance for the purpose was placed on the decision by the Tribunal (Amristsar Bench) in the case of Dy. CIT v. Gurdaspur Central Co-op Bank Ltd. [2012] 25 Taxmann.com 27, stating rule 46A, prescribing the mode and manner of admission of additional evidence by the first appellate authority, as mandatory. The addition being confirmed thus, the assessee is in second appeal.
We have heard the party before us, and perused the material on record. In our considered view, the matter is factually indeterminate and, accordingly, requires examination. True, the assessee did not furnish any explanation before the assessing authority, so that his action in assessing the impugned sum as income cannot, as it appears, be faulted with. Before the first appellate authority, however, the assessee furnished an explanation along with a documentary evidence. The same may be not complete or conclusive of the matter, but cannot be disregarded, as done by the (A.Y. 2008-09) Samson Alex vs. ITO ld. CIT(A), without proper verification, leading to its’ repudiation. If the land stands indeed sold by the assessee’s father prior to the date of deposit/s, receiving the sale consideration over time, as contended, it could definitely explain the nature and source of the impugned deposits. Firstly, what is the fair value of the said land in-as- much as it could well be that the assessee is taking advantage of the sale of land around the relevant time to explain the cash deposits in his bank account. Then, by when has the total amount been received and title in land conveyed in favour of the buyers – whose confirmations could also be relevant. Further, does the assessee have siblings, as each of them would have a claim on the father’s money, and would reasonably object to the entire of it being given to the assessee. The deposit in the assessee’s bank account, which is on a regular basis, cannot be regarded as a mistake, but only as a result of a conscious decision by the assessee’s father. Put differently, has the money been gifted by his father to the assessee, i.e., in preference to his other children. If so, why did not the assessee state so? In this regard it would also be relevant to know as to how the money stands used, i.e., subsequently, in-as-much as it could also be indicative of the bona fides of the assessee’s case. The matching of the dates is also important. Answers to these and such-like questions, primarily factual, would be relevant and enable arriving at a satisfaction as regards the genuineness of the assessee’s explanation - in the facts and circumstances, as to the nature and source of the deposits, the primary burden for which is on the assessee. We, accordingly, only consider it fit and proper to restore the matter back to the file of the first appellate authority to allow the assessee an opportunity to explain his case before it with materials as he may wish to adduce or rely upon. As regards the objection by the ld. CIT(A) with reference to the admission of additional evidence, we find the same as not maintainable in the facts and circumstances of the case, relying on the decision by the Hon’ble jurisdictional High Court in Prabhavati S. Shah v. CIT [1998] 231 ITR 1 (Bom). Rather, there could be an occasion for the ld. CIT(A) to himself require the assessee, in order to enable him to substantiate his case and with a (A.Y. 2008-09) Samson Alex vs. ITO view to arrive at his own satisfaction, adduce evidence, and to which the rule 46A itself, vide clause (4) thereof, makes an exception. Needless to add, the appellate order being set aside, he shall decide the assessee’s appeal in accordance with law by issuing definite findings of fact and after hearing both the parties, i.e., upon allowing due opportunity to the AO to examine the assessee’s case, including by leading material in rebuttal (r. 46A(1)). Also, where the assessee fails to furnish the materials/ evidences in substantiation, the Revenue authorities shall adjudicate by drawing inference permissible in law. We decide accordingly.