R.Andiappan, Chennai vs Department Of Income Tax

अपीलाथ क ओर से / Appellant by : Shri. P. Radhakrishnan, IRS, JCIT. यथ क ओर से / Respondent by : Shri. N. Muthukumaran, Retd. ACIT

सन ु वाई क तार ख/Date of hearing : 21.05.2015 घोषणा क तार ख /Date of Pronouncement : 29.05.2015.

आदे श / O R D E R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER

This appeal by Revenue is directed against the order of the

Commissioner of Income Tax (Appeals)-VII, Chennai, dated

03.12.2013 for the assessment year 2009-2010.

:- 2 -: I.T.A.No.943/Mds/2014.

2. The first ground in this appeal is with regard to deletion of

addition of C5,21,500/- in respect of deposits in Tamilnadu Mercantile

Bank, Annanagar Branch as unexplained cash credits.

3. The brief facts of the case are that during the course of

assessment proceedings, cash were found credited in the bank account

held by the assessee jointly with his wife. When questioned about the

source for the credits, it was explained that the money was transferred

from his son's NRI account. Not convinced with the reply of the

assessee, a sum of C6,21,500/- was added as unexplained cash credit.

Aggrieved, the assessee preferred an appeal before the Commissioner

of Income Tax (Appeals).

4. On appeal the Commissioner of Income Tax (Appeals) confirmed

the addition of C1,00,000/-. However in respect of C5,21,500/-, he

observed that the amount has been transferred to assessee in TMB

account from his son's account on various dates and accordingly

deleted the addition. Against this, the Revenue is in appeal before us.

5. We have heard both the parties and perused the material on

record. As seen from the order of Commissioner of Income Tax

(Appeals), the Commissioner of Income Tax (Appeals) has not given

reason on what basis he came to the conclusion that money to TMB :- 3 -: I.T.A.No.943/Mds/2014.

account has been transferred from assessee's son's bank accounts.

No details are coming through in his order. In our opinion, it is

appropriate to remit the issue back to the file of the Assessing Officer

with the direction to assessee to place necessary bank accounts so as

to prove the transfer of funds from his Son's bank account to

assessee's account. With these observations, we remit the issue back

to Assessing Officer for fresh consideration.

6. The next ground in this appeal is with regard to deletion of

addition of C10,00,000/- deposited in TMB account out of sale of

jewellery. There was deposit of C10,00,000/- i.e two deposits of

C 5,00,000/- each in TMB account on 30.01.2009. The assessee stated

that money was deposited by R. Andiappan out of sale of jewellery

belonging to Mrs. Sunganthakumari on 30.01.2009.

6.1 The assessee in his sworn statement on 16.12.2011 has stated

as under:-

''My wife Mrs. Suganthakumari expired on 24.01.2009. Her jewellery was sold for about 11 lakhs and the cash was deposited in the TMB account''.

6.2 Subsequently on 21.12.2011 the assessee submitted receipts

for sale of jewellery totaling C16.50 lakhs. The assessee stated that

of this C10 lakhs was deposited in TMB bank on 30.01.2009 and :- 4 -: I.T.A.No.943/Mds/2014.

C6.50 lakhs in Corporation Bank on the same day. The cash entry in

his account was missed out and therefore the cash book shows

negative balance. This should be credited to his personal account in

the books. The Assessing Officer added a sum of C10,00,000/- as

unexplained cash credits. Against this, the assessee preferred an

appeal before the Commissioner of Income Tax (Appeals).

7. On appeal, the Commissioner of Income Tax (Appeals) deleted

the addition by observing that there was confirmation in the form of

sale receipts of jewellery from M/s. M.H. Jewellers P. Ltd, Tirunelveli.

Without making a cross verification with the seller of jewellery, it is

not known how the Assessing Officer came to the conclusion that the

sale of jewellery by the assessee is bogus. According to

Commissioner of Income Tax (Appeals), the assessee discharged his

onus by furnishing bills for jewellery sales. It is for the Assessing

Officer to disprove the claim which was not done by the Assessing

Officer. According to the Commissioner of Income Tax (Appeals)

addition cannot be made by surmise. Owning of jewellery, rate of

which it was sold, market rate for new ornaments, comparison of old

gold jewels with new ones etc., were not analyzed and no conclusion

was arrived at by the Assessing Officer. Hence, the Commissioner of :- 5 -: I.T.A.No.943/Mds/2014.

Income Tax (Appeals) deleted the addition. Against this, the Revenue

is in appeal before us.

8. We have heard both the parties and perused the material on

record. In this case, the assessee in support of his contention filed

sale receipts of jewellery from M/s. M.H. Jewellers Pvt. Limited,

Tirunelveli. Despite of these documents supporting the claim of the

assessee, the Assessing Officer rejected the claim. In our opinion,

this evidence cannot be accepted in view of the surrounding

circumstances and human probabilities. Under section 68 of the Act,

the burden is of the assessee to point out the nature and source of

money credited in the books of accounts. If the assessee's

explanation is not satisfactory, it is open to Assessing Officer to add

the same as income. The Assessing Officer pointed out various

discrepancies as under:-

"1) The receipts for sale of jewellery are given by M/s. M.H. Jewellers P. Ltd Tirunelveli.

2) Bills/receipts of ₹8,86,760/- given in the name of Mr. Andiappan and for ₹7,44,108/- in the name of Mr. Yogananth.

3) The bills have been made on various dates between 01.11.2008 and 22.01.2009. All the receipts are for less than ₹20,000/- and all have paid in cash.

:- 6 -: I.T.A.No.943/Mds/2014.

4) The receipts do not contain any description of

jewellery. It is only mentioned as ''old gold'' in all the bills.

5) The receipit submitted contain the signatures of Mr. Andiappan and Yogananth in respect of jewellery stated to be sold by them. No evidence is submitted by the assessee to prove that either he or his son Mr. Yogananth, who is an NRI were available in Tirunelveli twon on the said dates to sell the jewellery.

6) No explanation is offered by the assessee as to why he, an octagenarion had to go all the way to Tirunelveli to sell jewellery when the same could have been sold in Chennai where he resides.

7) No evidence is submitted by the assessee regarding the existence of the jewellery in the first hand.

8) Not even on these cash receipts is reflected in the cash book of the assessee. The claim that the cash book entry in that account was missed out and therefore the cash book shows negative balance is not acceptable.

9) As already stated above, the assessee in his sworn statement has claimed jewellery for sold for about ₹11 lakhs and now the assessee submits receipts for sale of jewellery for ₹16.50 lakhs. The assessee is thus contradicting his own statement.

10) As per the receipts, the assessee has received a cash of ₹57,312/- on sale of jewellery on 12.11.2011. The assessee in his claim of travelling expenses debited to the P & L account has submitted vouchers wherein he has claimed to have been on a 5 day visit to Krishnagiri during 8.11.2008 to 12.11.2008. The assessee possibly could not have been in two places on the same date. Similarly, while the assessee had claimed to have been on a two days visit to Hosur on 22.11.2008 & 23.11.2008, he has sold :- 7 -: I.T.A.No.943/Mds/2014.

jewellery at Tirunelveli on 22.11.2008 for ₹39,010/-

11) All these prove that the receipts submitted by the assessee for sale of jewellery are bogus and hence deserve no merit. As all the cash receipts have not been accounted at all in the books of the assessee, the entire claim of deposits of ₹10 lakhs being made out of sale of jewellery is not accepted.

Even before us, the assessee's counsel was not able to give

satisfactory explanation about the discrepancies pointed out by the

Assessing Officer. This ought to have been explained by the assessee

when sale receipts were difficult to be accepted as genuine. In our

opinion, the assessee had attempted to give a colour of genuineness

to the transaction by way of sale of jewellery as the assessee failed to

explain this transaction by providing bills for purchase of jewellery at

first instant. Unless and until the assessee explains how it has

acquired the jewellery, the transaction cannot be believed. Thus, the

Assessing Officer rightly rejected the attempt of the assessee by

pointing out various discrepancies. Being so, the claim that credit

representing sale of jewellery cannot be accepted as it runs counter to

the human probability and the normal course of human conduct.

:- 8 -: I.T.A.No.943/Mds/2014.

9. Accordingly, in our opinion, the assessee failed to explain the

source of credit and the same is to be considered as unexplained

income of the assessee.

10. In the result, the appeal of the Revenue in ITA

No.943/Mds/2014 is allowed for statistical purposes.

Order pronounced on Friday, the 29th day of May, 2015, at Chennai.

Sd/- Sd/- (च ला नागे !साद ) (चं पज ू ार ) (CHALLA NAGENDRA PRASAD) (CHANDRA POOJARI) या"यक सद य/ JUDICIAL MEMBER लेखा सद य/ ACCOUNTANT MEMBER चे$नई/Chennai. %दनांक/Dated:29.05.2015. KV

आदे श क त(ल)प अ*े)षत/Copy to: 1. अपीलाथ /Appellant 2. यथ / Respondent 3. आयकर आय, ु त (अपील)/CIT(A) 4. आयकर आय, ु त/CIT

5. )वभागीय त न/ध/DR 6. गाड फाईल/GF.