Late A.Abdul Azeez, represented by legal heir Smt.A.Jameela Beevi, Trichy v. ITO, Trichy

ITA 535/CHNY/2010 | 2006-2007
Pronouncement Date: 16-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 53521714 RSA 2010
Assessee PAN AHPPA6172K
Bench Chennai
Appeal Number ITA 535/CHNY/2010
Duration Of Justice 2 month(s) 23 day(s)
Appellant Late A.Abdul Azeez, represented by legal heir Smt.A.Jameela Beevi, Trichy
Respondent ITO, Trichy
Appeal Type Income Tax Appeal
Pronouncement Date 16-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 16-07-2010
Assessment Year 2006-2007
Appeal Filed On 23-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C SMC CHENNAI BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER I.T.A. NO.535/MDS/2010 ASSESSMENT YEAR: 2006-07 LATE A. ABDUL AZEEZ REPRESENTED BY LEGAL HEIR SMT. A. JAMEELA BEEVI NO.10 FATHIMA ARCADE 4 TH FLOOR ALLIMAL STREET BIGBAZAAR TIRCHIRAPPALLI 620 008. [PAN: AHPPA6172K] VS . THE INCOME TAX OFFICER WARD II(1) TIRUCHIRAPPALI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MEENAKSHISUNDARAM REVENUE BY : SHRI OMKARESHWAR CHIDRA O R D E R PER U.B.S. BEDI J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE LD. CIT(A) TIRUCHIRAPPALLI 620 001 DATED 08.02.2010 RE LEVANT TO THE ASSESSMENT YEAR 2006-07 WHEREBY CONFIRMATION OF THE ADDITION OF RS .1 12 323/- HAS BEEN CHALLENGED. 2. FACTS INDICATE THAT WHILE MAKING SCRUTINY ASSES SMENT A SUM OF RS.1 12 323/- HAS BEEN INCLUDED IN THE DECLARED INCOME OF THE ASS ESSEE. THE ADDITION CONSISTS OF DIFFERENCE BETWEEN BALANCE SHEET AND BANK ACCOUNT S TATEMENT TO RS.1 00 000/- AND INTEREST CREDITED IN SAVINGS BANK ACCOUNT DURING TH E SECOND QUARTER OF THE RELEVANT FINANCIAL YEAR WHICH WAS TAKEN AT RS.12 323/-. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE BANK BALANCE AT SBI AS SHOWN IN THE BALANCE SHEET IS RS.14 50 000/- AND THE BALANCE AS PER BANK ACCOUNT STATEMENT IS RS.15 50 000/-. THUS THERE IS A DIFFERENCE OF RS.1 00 000/- BETWEEN THE BANK STATEMENT AND THE BALANCE SHEET. WHEN THIS DISCREPA NCY WAS POINTED OUT THE REPRESENTATIVE HAS FILED A REVISED STATEMENT IN WH ICH THE CASH ON HAND WAS REDUCED BY RS.60 000/- AND THE CAPITAL WAS INCREASED BY RS. 40 000/-. THE REVISED STATEMENT I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .535/MDS/10 535/MDS/10 535/MDS/10 535/MDS/10 2 WAS NOT ACCEPTED BY THE ASSESSING OFFICER AS THE AS SESSEE DID NOT MAINTAIN BOOKS OF ACCOUNTS TO PROVE THE CASH INTRODUCED WAS FROM H IS EARLIER YEAR CASH BALANCES. ON THE LINES OF THE ABOVE FINDINGS THE ADDITIONS W ERE MADE IN THE ASSESSMENT ORDER TO THE EXTENT OF RS.1 12 323/- IN THE INCOME DECLAR ED BY THE ASSESSEE AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL. IT WAS PLEADED BE FORE THE LD. CIT(A) FOR DELETION OF THE IMPUGNED ADDITIONS. HOWEVER THE LD. CIT(A) AFTER OBTAINING THE REMAND REPORT FROM THE ASSESSING OFFICER AND CONSIDERING A ND NOTING THE FACT THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS HAS CONCLUDED TO CONFIRM THE ADDITION AGAINST WHICH THE ASSESSEE IS IN FURTHER A PPEAL. 3. IT WAS STATED BEFORE THIS BENCH THAT THE LD. CI T(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSMENT WAS COMPLETED UNDER SE CTION 44AF WITHOUT BOOKS OF ACCOUNTS AND HE SHOULD HAVE FURTHER APPRECIATED THE EXPLANATION OFFERED IN THE REVISED STATEMENT ATTRIBUTING THE DEPOSIT OF RS.1 0 0 000/- IN THE BANK ACCOUNT TO PREVIOUS WITHDRAWALS AND MOREOVER THE LD. CIT(A) O UGHT TO HAVE APPRECIATED THE FACT THAT THE CREDIT IN A BANK ACCOUNT CANNOT BE AD DED UNDER SECTION 68 AS UNEXPLAINED CASH CREDIT IN NO ACCOUNTS CASE AND IF THERE HAS BEEN ANY INADVERTENT ERROR IN THE PREPARATION OF ORIGINAL STATEMENT AND THE SAME HAS BEEN CORRECTED IN THE REVISED STATEMENT BY EXPLAINING THE SOURCE OF DEPOS IT OF RS.1 12 323/- IN THE BANK ACCOUNT SO ADDITION IS NOT CALLED FOR AND REQUIRES TO BE DELETED. RELIANCE WAS PLACED IN THE CASES OF SUNANDA RAM DEKA V. CIT 210 ITR 988 (GAUHATI) CIT V. OM PRAKASH BAGRIA (HUF) (2006) 155 TAXMAN 427 (MP) IT O V. GOPALA RAM PAMA RAM (2001) 115 TAXMAN 233 (JODH.) (MAG.) AND CIT V . BHAICHAND H GANDHI (1983) 141 ITR 67 (BOM.) AND IT WAS PLEADED FOR DELETION O F THE IMPUGNED ADDITION. I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .535/MDS/10 535/MDS/10 535/MDS/10 535/MDS/10 3 4. THE LD. DR VIDE HIS WRITTEN SUBMISSION ON BEHA LF OF THE DEPARTMENT HAS PLEADED THAT THE ASSESSEE CLAIMS THAT HE IS DOING A VERY SMALL BUSINESS AND NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND HENCE FILED T HE RETURN UNDER SECTION 44AF. THIS CASE WAS SCRUTINIZED BY THE ASSESSING OFFICER AND DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT THERE IS A DEPOSIT OF RS.1 00 000/- IN THE BANK ACCOUNT OF THE ASSESSEE. CONSEQUENTLY THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE FOR THIS PARTICULAR BANK DEPOSIT . THE ASSESSEE DI NOT GIVE ANY SOURCE FOR THIS DEPOSIT IN THE BANK BUT FILED A REV ISED BALANCE SHEET AND CLAIMED THAT THIS EXCESS AMOUNT OF RS.1 00 000/- SHOULD NOT BE A DDED IN HIS ASSESSMENT. THE ASSESSEE HAS NOT GIVEN ANY REASON FOR THE VARIATION BETWEEN THE EARLIER BALANCE SHEET AND THE REVISED BALANCE SHEET FILED BY HIM. F URTHER IT IS NOT KNOWN HOW THE CASH ON HAND WILL BE SIMPLY REDUCED AND THE CAPITAL ACCOUNT WILL GO UP WITHOUT CORRESPONDING SOURCES. IT IS ONLY AN AFTER-THOUGHT OF THE ASSESSEE TO GIVE THESE EXPLANATIONS WITHOUT ANY EVIDENCE BECAUSE THESE EXP LANATIONS HAVE COME FROM THE ASSESSEE ONLY AFTER THE ASSESSING OFFICER HAS DETEC TED AND SHOWN IT TO THE ASSESSEE TO EXPLAIN THE SOURCE OF THE SAME. THE LD. DR HAS CONTENDED THAT IT IS A SETTLED LAW THAT IF THE ASSESSEE CLAIMS CERTAIN AMO UNTS IN HIS STATEMENT THE BURDEN OF PROOF SQUARELY LIES ON HIM AND THE DEPARTMENT NE ED NOT FURTHER PROVE ANYTHING POSITIVELY AND RELIANCE WAS PLACED IN THE CASE OF C IT V. K. CHINNATHAMBAN 292 ITR 682 (SC) AND CIT V. K.T.M.S. MOHAMOOD 228 ITR 113 ( MAD) FOR THE PREPOSITION WITH REGARD TO THE INVESTMENT/CREDIT THE BURDEN LIES ON THE ASSESSEE AND FOR THE PREPOSITION THAT WHERE THE INCOME IS ESTIMATED STIL L THE ADDITION CAN BE MADE SEPARATELY FOR THE CREDIT. RELIANCE WAS PLACED ON 1 29 ITR 398 (M) 50 ITR 1(SC) 120 ITR 294 (AP) AND 72 ITR 194 (SC). FOR THE PREPO SITION OF ADDITION UNDER SECTION I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .535/MDS/10 535/MDS/10 535/MDS/10 535/MDS/10 4 68 WHERE NO BOOKS ARE MAINTAINED TRIBUNAL CAN SUS TAIN THE ADDITION UNDER SECTION 69 [P.V. AJAY NARAYAN VS. ITO (ITAT BANGALORE) 57 T TJ 159]. WITH REGARD TO THE INVESTMENT OUT OF PAST SAVINGS SAME IS TO BE INDEP ENDENTLY SUPPORTED BY THE ASSESSEE [115 ITR 401 (CAL)]. THE EXPLANATION GIVEN BY THE ASSESSEE SHOULD BE SUPPORTED BY CORROBORATIVE EVIDENCE [158 ITR 826 (M AD) 64 ITR 314 AND 98 ITR 337)]. SINCE THE ASSESSEE HAS NOT EXPLAINED FOR THE SOURCE OF DEPOSIT BUT SIMPLY REDUCED THE CASH BALANCE AND INCREASED THE CAPITAL ACCOUNT WITHOUT ANY CORROBORATIVE EVIDENCE AND FOR ASSESSEES FAILURE T O PROVE POSITIVELY THE SOURCE AND NATURE OF CERTAIN AMOUNTS IT CAN BE ADDED AND THE DEPARTMENT NEED NOT GIVE POSITIVE EVIDENCE BECAUSE BURDEN LIES UPON THE ASSE SSEE AS SUPPORTED BY THE DECISION IN 53 ITR 623 (SC) AND 83 ITR 860 (AP). FU RTHER RELIANCE WAS PLACED ON 106 ITR 984 (MAD) AND 121 ITR 914 (DEL) TO SUPPORT THE PLEA THAT DIFFERENCE IN BALANCE SHEET AND THERE IS NO CORROBORATIVE EVIDENC E HENCE ADDITION CAN BE MADE. THERE IS NO ASSUMPTION THAT ONCE BUSINESS IS ESTIMA TED CASH CREDIT WOULD BE COVERED BY THE INCOME SO ESTIMATED [72 ITR 194 (SC) 160 ITR 634]. UNLESS CONTRARY IS PROVED BY THE ASSESSEE THE CREDIT MAY BE ATTRIBUTED TO THE INCOME OF THE ASSESSEE [201 ITR 747 (CAL)] AND IT WAS PLEADED THA T SINCE THE EXPLANATION GIVEN BY THE ASSESSEE LACK CREDIBILITY AND EVIDENTIAL VALUE THE SAME IS LIABLE TO BE REJECTED AND THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) MAY BE UPHELD. 5. AFTER HEARING BOTH THE SIDES AND CONSIDERING TH E MATERIAL ON RECORD AS WELL AS CASE LAWS CITED BY RIVAL SIDES IT IS FOUND THAT TH E ASSESSEE HAS REVISED HIS STATEMENT OF ACCOUNT BY MAKING ADJUSTMENT IN THE CASH IN HAN D. IT IS THE PLEA OF THE ASSESSEE BEFORE THIS BENCH THAT DUE TO ARITHMETICAL INACCURA CY WHILE PREPARING ORIGINAL I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .535/MDS/10 535/MDS/10 535/MDS/10 535/MDS/10 5 STATEMENT THERE WAS A CLERICAL ERROR IN COUNTING T HE CLOSING BALANCE OF THE BANK ACCOUNT. THE ASSESSEE HAD SUFFICIENT CAUSE TO SUBS TANTIATE ITS PLEA THAT HE INADVERTENTLY MADE A MISTAKE BECAUSE HE WAS ILL AT THE TIME OF FILING THE RETURN OF INCOME THEREAFTER HE WAS PARALYZED AND FINALLY DIE D ON 15.6.2008. WHEREAS ASSESSMENT PROCEEDING WAS INITIATED IN THE MONTH OF AUGUST 2008 AND HIS WIFE BEING LEGAL HEIR PARTICIPATED AND ATTENDED SUCH PRO CEEDING. THIS FACT HAS NOT BEEN DENIED BY THE OPPOSITE SIDE THAT ASSESSEE BECAME SE RIOUSLY ILL AND WAS PARALYZED AND ULTIMATELY DIED IN THE MONTH OF JUNE 2008. SI NCE THE ASSESSEES LEGAL REPRESENTATIVE HAS TAKEN THE PLEA OF THE ASSESSEES SICKNESS RESULTING INTO HIS HAVING BEEN PARALYZED AND THEN HAVING BEEN EXPIRED ON 15.6.2008 AND ASSESSMENT PROCEEDING HAVING BEEN INITIATED IN THE MONTH OF AU GUST AND WHICH WAS ATTENDED BY LEGAL HEIR OF THE ASSESSEE BEING HIS WIFE THEREFOR E IN THE INTEREST OF JUSTICE AND IN ORDER TO HAVE FAIR PLAY IN THE MATTER IT WOULD BE J UST AND APPROPRIATE TO GIVE ANOTHER CHANCE TO THE ASSESSEE TO ESTABLISH HIS CASE WITH R EGARD TO THIS ADDITION. THEREFORE ORDERS OF THE AUTHORITIES BELOW ON THIS GROUND ARE SET ASIDE AND THE MATTER IS RESTORE TO THE FILE OF THE A.O. WITH A DIRECTION TO RE-DECI DE THE ISSUE AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AND THE ASSESSEE WOULD BE AT LIBERTY TO ADDUCE ANY EVIDENCE WHICH IS DEEMED FIT TO ESTABLISH HIS CASE. 6. AS REGARDS OTHER ADDITION OF RS.12 323/- IN TH E REMAND REPORT OF THE ASSESSING OFFICER SUBMITTED TO THE LD. CIT(A) NO J USTIFICATION HAS BEEN GIVEN BY THE ASSESSING OFFICER WHO MADE THE ADDITION TO THIS EX TENT IN THE ASSESSMENT ORDER AND THE LD. CIT(A) HAS JUST CONFIRMED THE ORDER WITH RE GARD TO THIS ADDITION WITHOUT GIVING ANY BASIS OR EVEN DISCUSSING THE ISSUE. AS SUCH WH ILE ACCEPTING THE APPEAL OF THE I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.. .. .535/MDS/10 535/MDS/10 535/MDS/10 535/MDS/10 6 ASSESSEE ON THIS POINT THE ADDITION MADE BY THE AS SESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS NOT JUSTIFIED AT ALL AND AS SUCH THE SAME IS DIRECTED TO BE DELETED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE GETS PARTLY ACCEPTED/SET ASIDE. ORDER PRONOUNCED ON 16.07.2010. SD/- (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 16.07.2010. VM/- COPY TO : APPELLANT/RESPONDENT/CIT(A)- /CIT /DR