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Income Tax Appellate Tribunal, A / SMC BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN
आदेश /O R D E R
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 1, Madurai, dated 05.08.2015 and pertains to assessment year 2009-10.
Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the only issue arises for consideration is with regard to the addition of `40 lakhs said to be advanced by the assessee to one Shri A. Bhaskaran. According to the Ld. D.R., the assessee filed a Civil Suit before the Principal District Judge at Tuticorin in OS No.1 of 2011 for recovery of a sum of `40 lakhs said to be advanced as hand loan on 20.03.2009. The assessee explained before the Assessing Officer that his income from agriculture was `40 lakhs. Moreover, according to the Ld. D.R., one Shri Murugaiah advanced a sum of `40 lakhs to the assessee. The said Shri Murugaiah explained before the Assessing Officer that he was owning 16 acres of land and cultivating the same since 2000. After considering the material produced by the assessee, the Assessing Officer found that it is beyond anybody’s imagination that the assessee has received `40 lakhs from Shri Murugaiah.
The Ld. Departmental Representative further submitted that the claim of the assessee that a sum of `40 lakhs was paid to Shri Suresh Kumar in cash on 20.03.2009 at the instance of his brother Shri Jagadeesan and he had not demanded any interest for advance of `40 lakhs was not believed by the Assessing Officer.
According to the Ld. D.R., the income from the assessee’s business is very meagre and it is not sufficient to maintain even his family, therefore, the assessee could not have received a sum of `40 lakhs from and out of his business activity. According to the Ld. D.R., since the claim of the assessee that he received a sum of `40 lakhs from Shri Murugaiah was not substantiated, the Assessing Officer found that the above said sum of `40 lakhs is assessee’s own money. Accordingly, the same was assessed. However, according to the Ld. D.R., on appeal, the CIT(Appeals) deleted the addition made by the Assessing Officer on the ground that in the case of Shri Murugaiah, this Tribunal found that the said Shri Murugaiah was having adequate agricultural income to explain the advance of `40 lakhs to the assessee. According to the Ld. D.R., Shri Murugaiah is a small time agriculturist, therefore, he would not have made any advance to the assessee.
On the contrary, Sh. Saroj Kumar Parida, the Ld.counsel for the assessee, submitted that admittedly the assessee filed Civil Suit before the Principal District Judge at Tuticorin for recovery of sum of ` 40 lakhs from Shri A. Bhaskaran. The Assessing Officer found that the assessee has no source for advancing of `40 lakhs to Shri A. Bhaskaran. The assessee explained before the Assessing Officer that the sum of `40 lakhs was borrowed from Shri Murugaiah. This amount of `40 lakhs borrowed from shri Murugaiah was very much available with the assessee. Therefore, the Assessing Officer cannot doubt the source for making advance to Shri A. Bhaskaran. Referring to the order of this Tribunal in the case of Shri Murugaiah in dated 01.04.2016, the Ld.counsel for the assessee submitted that Shri Murugaiah was having opening balance of `44,26,495/-. Shri Murugaiah claimed the same before the Assessing Officer as his agricultural income. However, the Assessing Officer treated 25% of the same as agricultural income and the balance was treated as income from business. When the matter travelled before this Tribunal, this Tribunal found that 50% of the opening capital balance was from agricultural income and the balance of 50% has to be treated as income from business. Therefore, it is obvious that Shri Murugaiah was having ` 44,26,495/- as opening capital balance in the assessment year 2009-10. In view of this finding of the Tribunal in the case of Shri Murugaiah in I.T.A. No. 12/Mds/2015 dated 01.04.2016, the claim of the assessee that he received ` 40 lakhs from Shri Murugaiah cannot be rejected on the ground that Shri Murugaiah had no source for advancing the sum of `40 lakhs.
I have considered the rival submissions on either side and perused the relevant material available on record. The assessee claimed before the Assessing Officer that one Shri Murugaiah advanced a sum of `40 lakhs to the assessee and the said Shri Murugaiah also has agricultural income to the extent of `40 lakhs.
The claim of Shri Murugaiah was doubted by the Assessing Officer on the ground that there was no source for making investment. Accordingly, the Assessing Officer treated 25% of the amount claimed by Shri Murugaiah as from agricultural income and remaining 75% was taken as income from other sources. When the matter came before this Tribunal, this Tribunal found that 50% of income has to be treated as agricultural income and remaining 50% as income from business. Now the assessee claims that the source of Shri Murugaiah was established beyond doubt for advancing money to the extent of `40 lakhs. This Tribunal in dated 01.04.2016 examined the appeal of Shri Murugaiah and found that Shri Murugaiah has agricultural income and income from other sources to the extent of `44,26,495/- as opening capital balance for the assessment year 2009-10. Since the source of Shri Murugaiah was established, this Tribunal is of the considered opinion that the assessee’s claim that he received `40 lakhs from Shri Murugaiah has to be accepted. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly deleted the addition made by the Assessing Officer. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on 18th August, 2016 at Chennai.