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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI R.C. SHARMA & SHRI SANJAY GARG
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 01.01.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2007-08.
The assessee has taken the following grounds of appeal:
1. That on the facts and in the circumstances of the case. Ld. CIT(A) has erred in holding that Ground No.1 referring to unexplained investment in Flat and Ground No.2 referring to unexplained Cash Deposit in bank account are interlinked with each other.
2. (a) That the observation of Ld. CIT(A) that initial payment for acquisition of Flat was made from cash loan as per borrowal notes is contrary to facts on record.
(b) That on the facts and in the circumstances of the case, Ld. C.I.T.(A) has failed to appreciate that initial payment for acquisition of flat was made through cheques as per memorandum of consideration appearing in the deed of conveyance.
2 Smt. Geetha T. Mariappan (c) That on the facts and in the circumstances of the case, Ld. C.I.T.(A) is wrong in dismissing ground no.1 without giving any findings on the contentions raised at the appeal stage that initial payment for acquisition in flat was made through following cheques:-
Bank Cheque No. Date Amount (Rs.) IDBI 070879 05.06.2066 4,00,000 ICICI Bank 962582 03.07.2006 31,000 962584 ICICI Bank 03.07.2006 50,000 ICICI Bank 839096 03.07.2006 70,000
(d) That on the facts and in the circumstances of the case, the action of Ld. C.I.T.(A) to confirm addition of Rs.5,51,000/- towards investment in Flat by dismissing ground no.1 is erroneous, arbitrary and bad. 3. (a) That on the facts and in the circumstances of the case, Ld. C.I.T.(A), having admitted receipt of loan of Rs.3,50,000/- from mother and aunty has erred to dismiss ground no.2 by entertaining irrelevant and extraneous considerations. b) That on the facts and in the circumstances of the case, Ld. C.I.T.(A) is wrong in upholding the addition of Rs.1,75,342/- representing cash deposits in bank account on 28.07.2006, 02.08.2006, 26.10.2006 and 30.10.2006.
4. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on for before the date of hearing of the appeal.”
The brief facts of the case are that the assessee jointly with her husband purchased floor No.104 at Satellite Garden, Goregaon, Mumbai for a consideration of Rs.35,51,000/- as per agreement dated 09.08.2006. The issue involved in this case is regarding the source of funds for the purchase of the above floor. The Assessing Officer (hereinafter referred to as the AO) in the assessment order observed that the assessee had explained the source of investment as Rs.30 lakhs taken as laon from ICICI Bank and the balance as loans/gifts received from her mother in law and also from her relatives and out of the past savings. The AO examined the bank account statement of the assessee and observed that the assessee had deposited the following cash in the said account. Date Amount 28.7.06 49,900
The AO also observed that the assessee and her husband had shown to have received loans from the following persons in cash which were deposited in the bank account. 1) V. Kuthalingam 2,00,000 2) T. Mariammal 1,00,000 3) T. Rani 1,25,000 4) R. Shushila 1,25,000 5) R. Therasamnal 1,00,000 _______ Total 6,50,000
The AO observed that the assessee had shown to have received the above loans in cash but the assessee had failed to prove the capacity of the lenders to advance the loan and the genuineness of the transactions. The AO, therefore, treated the payment of Rs.5,51,000/- to the seller and cash deposited of Rs.1,75,342/- as unexplained income of the assessee out of the above stated deposits.
The Ld. CIT(A) confirmed the above additions made by the AO. Being aggrieved, the assessee has come in appeal before us.
The Ld. A.R. of the assessee, before us, has submitted that the AO has committed a mistake while analyzing the facts of the case regarding the addition of Rs.1,75,342/-. The Ld. A.R. has submitted that the assessee had borrowed cash loans from her mother and her aunty aggregating Rs.3,50,000/- out of this she had deposited Rs.1,75,342/- in bank account. The detail of which is submitted as under: Date of Deposit Amount (Rs.) 28.07.2006 49,900/- 02.08.2006 30,700/-
The Ld. A.R. has further submitted that the relevant evidences such as cash flow statement, identity proof of lenders, bank statement showing the withdrawals from bank of the lenders and certificate of farmers society for loan taken etc. were furnished before the AO. The Ld. A.R. has explained that so far as the addition of Rs.5,51,000/- is concerned, the said amount was paid by the assessee to the seller for the purchase of the flat and the source of the funds was as under: Date Cheque No. Drawn on Amount (Rs) Remarks 05.06.2006 70879 IDBI 4,00,000 Payment made directly by Mr. Vekat Giri to Mr. Ramesh Khanna, Seller of flat, on behalf of appellant. 03.07.2006 962582 ICICI 31,000 Payment 03.07.2006 962584 ICICI 50,000 made through appellant’s husband’s account. 19.07.2006 839096 ICICI 70,000 Payment made by appellant Total 5,51,000
The assessee, thus, explained that a sum of Rs.4 lakhs was received as loan from Mr. Vekat Giri and the said amount was directly transferred by said Mr. Vekat Giri to the seller through banking channel. The source of the rest of the amount was also explained and the payments were made through banking channel only. The Ld. A.R. has further submitted that even the assessee, out of the borrowed amount of Rs.4 lakh from Mr. Vekat Giri, has repaid a 5 Smt. Geetha T. Mariappan substantial part of it. The Ld. A.R. has therefore pleaded that while making the addition under section 68 of the Act, the AO has mistaken himself while gathering the actual facts of the case. The AO in the assessment order has made the addition of Rs.5,51,000/- treating the same as unexplained loans whereas the source of the amount of Rs.5,51,000/- was duly explained and the same was made through banking channel.
At this stage, both the Ld. Representatives of the parties have submitted that the matter is needed to be restored to the file of the AO for re-appreciation of the actual facts.
We, accordingly, restore this issue to the file of the AO for assessment afresh on the above issue. Needless to say that the AO will give proper opportunity to the assessee to explain the source of funds etc. and will consider the evidences, if any, furnished by the assessee to prove her case.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 06.05.2016.