P. Ramananda Kishore v. The Income Tax Officersalary Ward V(I)Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS Coram The Honourable Mrs.Justice CHITRA VENKATARAMAN and The Honourable Mr.Justice M.JAICHANDREN TC(A).No. 246 of 2011 P. Ramananda Kishore ... Appellant -vs- The Income Tax OfficerSalary Ward V(I)Chennai ... Respondent Tax Case Appeal filed u/s 260 of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Chennai Bench'C' passed in ITA. No. 1216/ MDS/ 2009 dated 16.12.2010 for theassessment year 2006-07 and against the order (ITA No.121/08-09 dated15.4.2009 on the file of the Commissioner of Income Tax (Appeals)-VI,Chennai, against the order of the Income Tax Officer, Salary Ward V(I) Chennai, dated 22.12.2008, made in PAN No.AHQPK2389-H for theassessment year 2006-07. For Petitioner :Mr.G.Ashokpathy forM/s. Pass Associates JUDGMENT(Judgment of the Court was made by CHITRA VENKATARAMAN,J) The assessee is on appeal before this Court seeking admission onthe following substantial questions of law:-1. Whether the Income Tax Appellate Tribunal wasright in law in confirming the addition ofRs.17,59,100/- under the head unexplained cash https://hcservices.ecourts.gov.in/hcservices/ credit even while the appellant has dischargedthe primary onus case upon him by identifying thecreditors, undoubtedly proving the genuiness ofthe transaction?2. Whether the Income Tax Appellate Tribunal isright in law in confirming the addition onaccount of cash credits even while the assessingofficer had not enquired into the verity of thetransaction and merely made the addition on thebasis of suspicion and surmise? 3. Whether the Income Tax Appellate Tribunal isright in law by considering the cash depositowned up by the assessee's employer as the incomeof the appellant despite the fact that the saidtransaction was confirmed by the assessee'semployer?4. Whether the Income Tax Appellate Tribunal isright in law in disallowing the aforesaid cashcredit only on the basis of suspecting the sourceof sources? 2. The assessment year under consideration is 2006-07.Admittedly the assessee is a salaried employee working with M/s.SreeRam Constructions. On scrutiny of the assessment, it was found thatthere was cash deposit of Rs.17,59,100/- in the assessee's bankaccount. Out of this, the assessee claimed that a sum ofRs.3,50,000/- represented the amounts borrowed by him from hisfriends and relatives and in confirmation of the same, the assesseeproduced confirmation letters discharging his primary onus. Thebalance amount of Rs.14,06,000/- was stated to be the amountdeposited by the assessee's employer in assessee's bank account todischarge and honour the cheques issued by the assessee on behalf ofhis employer. Accordingly, the assesee produced confirmation letterfrom his employer and claimed to discharge the primary onus cast uponhim. The assessment was however made rejecting the said submission.The Assessing Officer pointed out that in the letter dated 24.11.2008the assessee had stated that the cash deposit of Rs.17,59,100/- didnot relate to him and only Rs.3,50,000/- was related to him. When theassessee was confronted with the bank statement regarding the saidamount of Rs.17,59,100/-, he replied that it was only anaccommodation. Since the explanation was not satisfactory, theassessment was made treating the same as income of the assessee.Aggrieved by the same, the assessee went on appeal before theCommissioner of Income Tax (Appeals), who however deleted theaddition of Rs.14,06,000/- following the decision of CIT v. SOFIAFINANCE LIMITED - 205 ITR 98, CIT v. STELLER INVESTMENT LIMITED- 251ITR 263 AND CIT v. LOVELY EXPORTS PRIVATE LIMITED - 216 ITR 195, wherein it was held that even in cases where the deposits were foundto be not genuine, then the amount is to be assessed in the hands ofthe giver and not the recipient. The Commissioner of Income Tax(Appeals) pointed out that without causing investigation on theperson who had given money, the assessment had been made and the samewas without any material. As far as the sum of Rs.3,50,000/- isconcerned, the Commissioner of Income Tax Appeals deleted theaddition in respect of Rs.1,85,000/- out of Rs.3,50,000/-. 3. As regards the sum of Rs.1,65,000/-, the Commissioner ofIncome Tax (Appeals) pointed out that the same was claimed to havebeen given by the assessee's wife; since the assessee could not provethat his wife had ability to make the payment of a sum ofRs.1,50,000/-, the creditability hence, could not be accepted.Consequently, only to an extent of Rs.1,50,000/-, the assessment wasconfirmed. The Revenue went on appeal before the Tribunal, whereinthe Tribunal pointed out that when the assessee was confronted withthe bank statement from his Saligramam branch, covering period from1.2.2006 to 31.3.2006, there were deposits to the tune ofRs.3,50,000/-, the assessee could not explain the said depositamount. 4. As regards the sum of Rs.14,06,000/-, out of which a sum ofRs.11,61,000/- was given by his employer, for which confirmationletters were filed. The letter mentioned that it was an accommodationarrangement so as to honour assessee's cheque. The Tribunal pointedout that there was no reason why the third party had given funds tothe assessee on the cheque issued by the assessee. 5. As regards a sum of Rs.1,40,000/- received from M/s.Sree RamFoundations, a sum of Rs.75,000/- received from Griha Nirman and asum of Rs.30,000/- received from Colour Wood India, the Tribunalpointed out that assessee again furnished similar letter not from thethird parties but from his employer. The Tribunal as a matter of factfound that the transactions were not genuine and the plea of theassessee could not be accepted. The Tribunal pointed out that theassessee was privy to the information found in the bank account,there being no material evidence to substantiate as to thecreditability of these deposits and confirmation letters devoid ofessential information, the claim of the assessee was rejected. Thus,the assessment was confirmed. While so holding, the Tribunal setaside the order of the Commissioner of Income Tax (Appeals). 6. On going through the orders passed by the authorities belowand having regard to pure questions of fact involved, we see noquestion of law, much less, substantial question of law to admit thetax case appeal. In the result, the tax case appeal stands dismissedat the admission stage itself. No costs. Sd/-Assistant Registrar / true copy /Sub Assistant Registrar bgTo1 The Assistant RegistrarIncome Tax Appellate Tribunal,III Floor, Rajaji Bhavan, Besant Nagar,Chennai-90.2 The Commissioner of Income Tax (Appeals) VI, 121, Nungambakkam High Road, Chennai-6000343 The Income Tax Officer, Salary Ward V(I)Chennai+1 cc to M/S.PASS ASSOCIATES, Advocate S.R.40880TC(A). No. 246 of 2011 JRG(CO)JK 04.08.11 https://hcservices.ecourts.gov.in/hcservices/