Itta/20/2012 Of Sampathirao Apparao v. Income Tax Officer

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD(Special Original Jurisdiction) PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI INCOME TAX APPELLATE TRIBUNAL APPEAL NO.20 OF 2012 DATED:19.7.2013 Between: Sampathirao Apparao … Appellant And Income Tax officerWard-2Srikakulam … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A. NO.20 OF 2012 &I.T.T.A.M.P. No.100 of 2012 JUDGMENT:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) I.T.T.A. M.P. No.100 of 2012 filed by the appellant seekingamendment of grounds by substituting the grounds stated in theappeal, is allowed. This appeal is preferred against the judgment and order of thelearned Tribunal, dt.22.10.2010, in relation to assessment year 2001-2002, and sought to be admitted on the following suggested questionsof law. 1.“Whether in the facts and circumstances of the case, theIncome Tax Appellate Tribunal is right in treating the incomereceived from the agriculture by the assessee as unexplainedcash credit under section 68 of the Income Tax Act? 2.Whether in the facts and circumstances of the case, theIncome Tax Appellate Tribunal is justified in rejecting theexplanation offered by the assessee with regard to thereceipts shown in the returns filed by him as income notattributable to the agricultural operations? 3.Whether in the facts and circumstances of the case, theIncome Tax Appellate Tribunal is justified in rejecting thesource of income shown by the assessee on the ground thatthe same is not supported by any registered lease deed? 4.Whether in the facts and circumstances of the case, theIncome Tax Appellate Tribunal is justified in placing theburden of proof on the assessee though he has dischargedthe same by explaining the source of income for theconcerned years? 5.Whether in the facts and circumstances of the case, theIncome Tax Appellate Tribunal is right in holding that theassessee has failed to prove the source of income, despite the fact that the department has not placed any evidence todisprove the explanation offered and the documents producedby the assessee? 6.Are the decisions rendered by all the three authorities arearbitrary, illegal and perverse?”arbitrary, illegal and perverse?” We have heard the learned counsel for the appellant and gonethrough the impugned judgment and order of the learned Tribunal. We are unable to admit this appeal for the following reasons. The learned Tribunal has come to a fact finding, on the issue of unexplained cash credit, in the manner as follows. 5.Whether in the facts and circumstances of the case, theIncome Tax Appellate Tribunal is right in holding that theassessee has failed to prove the source of income, despite the fact that the department has not placed any evidence todisprove the explanation offered and the documents producedby the assessee? 6.Are the decisions rendered by all the three authorities arearbitrary, illegal and perverse?”arbitrary, illegal and perverse?” We have heard the learned counsel for the appellant and gonethrough the impugned judgment and order of the learned Tribunal. We are unable to admit this appeal for the following reasons. The learned Tribunal has come to a fact finding, on the issue of unexplained cash credit, in the manner as follows. “In all these cases, the assessees have taken acommon stand that the agricultural income was accumulatedover a period of years 1980-81 from the agricultural incomeearned from lease hold land but no documentary evidencewas filed in support of these contentions. Before the A.O., theassessees have taken a stand that land was taken on leasefrom father-in-law of Shri S. Appa Rao,but during the appellateproceedings, it was claimed to have taken from S. Laxmaiah. Even before us no evidence was filed to prove these factsthat the assessees have ever taken agricultural land fromanyone. In revenue’s record, the yearly entries are to bemade by the revenue officials with regard to the ownership ofthe agricultural holdings and also the person who cultivate theagricultural land. In the absence of any documentaryevidence or otherwise, we are unable to accept the contentionof the assessees that they have ever cultivated theagricultural land in any of the years. Since the opening cashbalance as on 31.3.2001 was shown by the assessees intheir cash flow statement filed before the CIT(A), the onus isupon them to prove the accumulation of the opening balanceas on 31.3.2001. Neither before the lower authorities, norbefore us the assessees could place a satisfactoryexplanation about the accumulation of the opening balance.” On the issue with regard to brokerage income of HUF, thelearned Tribunal has found as follows: “We find that in this regard also nothing has been placedbefore us to prove that the HUF was engaged in the businessof brokerage. Therefore, whatever income from brokeragewas declared in the name of the HUF, it was rightly treated tobe an income of the individual assessee S. Appa Rao.” On the question of receipt of gift of Rs.50,000/- in cash, thelearned Tribunal has found as follows: “Before the lower authorities, the assessee has notfiled a satisfactory explanation from whom he has receivedthe gift. Despite of repeated request of the A.O., theassessee could not file the confirmation letters nor could heproduce him for examination. Since the assessee could notprove the source of gift properly, the revenue has rightlytreated the same as an income from undisclosed sourcesu/s.68 of the Act.” Now, while deciding the wealth tax appeals, the learned Tribunalfound as follows. It was claimed by the assessees that upto thefinancial year 2000-2001 relevant to the assessment year 2001-02 inthe case of S. Appa Rao, the advances were given at Rs.21 lakhs. Inthe case of Smt. S. Dhanalaxmi, W/o. S. Appa Rao, the advances weregiven upto 2000-01 at Rs.49,49,000/- and in the case of HUF, i.e. S. Appa Rao (HUF), the advances were given upto financial year 2000-01 at Rs.49 lakhs. It was found by the learned Tribunal that theseadvances were claimed to have been given towards the purchase ofagricultural land but none of the purchases have been materializedand it was contended by the assesses that the advances were finallyreturned back subsequently. It was further recorded by the learnedTribunal as follows: Now, while deciding the wealth tax appeals, the learned Tribunalfound as follows. It was claimed by the assessees that upto thefinancial year 2000-2001 relevant to the assessment year 2001-02 inthe case of S. Appa Rao, the advances were given at Rs.21 lakhs. Inthe case of Smt. S. Dhanalaxmi, W/o. S. Appa Rao, the advances weregiven upto 2000-01 at Rs.49,49,000/- and in the case of HUF, i.e. S. Appa Rao (HUF), the advances were given upto financial year 2000-01 at Rs.49 lakhs. It was found by the learned Tribunal that theseadvances were claimed to have been given towards the purchase ofagricultural land but none of the purchases have been materializedand it was contended by the assesses that the advances were finallyreturned back subsequently. It was further recorded by the learnedTribunal as follows: “During the course of assessment proceedings orbefore the CIT(A), the assessee could not substantiate thesefacts either by producing the proposed transferor/debtor or byproducing any sale agreement. In the absence of relevantevidence, the entire amount was treated to be the cashavailable with the assessees and the A.O. has assessed thewealth tax in the hands of respective assessees after allowinga benefit of exemption of Rs.50,000/- as per provisions ofSection 2(ea)(vi) of the Wealth Tax Act.” Thereafter, it was recorded by the Tribunal as follows: “In the absence of material evidence, the revenue hastreated these advances as a cash available in the hands ofthe assessees. Similar is the position before us as nothing is placed to prove these facts.” In view of the aforesaid fact finding, we do not find any illegalityor infirmity in the order of the learned Tribunal. We dismiss the appealaccordingly. No order as to costs. Consequently, I.T.T.A. M.P. No.40 of 2012 filed by the appellantfor interim direction, stands dismissed. ________________________ K.J. SENGUPTA, CJ ______________________ G. ROHINI, J 19.7.2013 bnr