Pramila Kumari v. The Income-tax Officer, Ward-5(4), Patna
[Citation -2016-LL-0927-35]

Citation 2016-LL-0927-35
Appellant Name Pramila Kumari
Respondent Name The Income-tax Officer, Ward-5(4), Patna
Court ITAT-Patna
Relevant Act Income-tax
Date of Order 27/09/2016
Assessment Year 2006-07
Judgment View Judgment
Keyword Tags genuineness of transaction • undisclosed investment • insurance premium • capital account
Bot Summary: The date for compliance by the assessee was 08.12.2008 but the assessee failed to produce anyone of them. During the hearing on 18.12.2008 the assessee was again requested to produce these persons on 22.12.2008. The evidence produced by the assessee 3 ITA No. 44/Pat/2014. The identity of these persons are vague as the assessee could not produce before me though she was given enough opportunity to do so. The AO further concluded as under : The capital account and balance sheet filed by the assessee during the course of scrutiny is an afterthought. In the written submissions, it has been claimed that explanation of the assessee was not examined whereas, fact is that the AO duly asked the assessee to produce such persons which was not done. On careful consideration I find that the assessee s claim of cash resources available for making investment has been disputed by the AO on the ground that persons who have been claimed to have given loans and gifts were not produced before the AO. In this regard the assessee s argument is that it was incumbent upon the AO to give notices to the concerned parties, if he insisted upon their presence.


ITA No. 44/Pat/2014. IN INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. No. 44/PAT/2014. Assessment Year : 2006-07. Smt. Pramila Kumari, Income-tax Officer, Patna. Vs. Ward-5(4), Patna. Appellant. Respondent. Appellant by : S/Shri S.K. Rastogi, Rakesh Kumar. Respondent by : Shri R.K. Mishra. Date of Hearing : 03-08-2016 Date of Pronouncement : 27th Sept., 2016 ORDER This appeal by assessee is directed against order of learned CIT(Appeals) dated 26-02-2014 and pertains to assessment year 2006-07. grounds of appeal read as under : 1. For that Ld. CIT(A) has erred in upholding addition of Rs.15,10,300/- on account of undisclosed investment in premium against Life Insurance Policy. 2. For that Ld. CIT(A) has failed to appreciate that investment of Rs.15,10,300/- was out of explained sources and covered by declared sources. 3. For that Ld. CIT(A) has erred in holding that investment of Rs.15,10,300/- was not intended to be disclosed. 4. For that Ld. CIT(A) has erred in doubting genuineness of transaction of gift & loan and creditworthiness sof donor/lender. 5. For that Ld. CIT(A) has failed to appreciate that appellant has filed confirmatory letters from donors and lenders and has thus discharged onus saddled upon him and Assessing Officer was 2 ITA No. 44/Pat/2014. required to issue summon u/s 131 before drawing any adverse inference in respect of gift/loan received. 6. For that Ld. CIT(A) has erred in confirming addition of Rs.12,965/- on account of undisclosed bank interest. 7. For that additions made are wrong, illegal and unjustified on facts and in circumstances of appellant case. 2. In this case AO noted that Department has received information of assessee s huge investment in Life Insurance premium through account payee cheques and cash. AO accepted cheque payment. However, source of cash premium paid of Rs.15,10,300/- were found by AO to be not satisfactory. AO s findings in this regard inter alia are as under : Also assessee was requested to furnish details and proof of source of such cash purchases of Rs.1510300.00 as premium to Bajaj Allinz Company. To this assessee replied that assessee had received cash gift of Rs.5,00,000/- from her mother Smt. Munna Devi and sister Smt. Sunita Kuamri on 05.08.2004. Also he submitted that she has opening balance as on 10.04.2005 of Rs.42,02,477.00 as per Capital Account which consists of all these and cash balance taken for Rs.6,50,000/- in May, 2003 from 30 persons as advance for giving shops on rent to them. Further, she stated that assessee had taken cash loan of Rs.2,00,000/- from 11 persons each giving loan below Rs. 20,000/- in 1996. Further, she submitted that assessee has taken total cash loan of Rs.80,000/- from persons during April and May, 2005. assessee was requested to produce all these cash creditors and donor Smt. Munna Devi, Smt. Sunita Kumar, Sh. Mahesh Kumar Singh and tenants who made advances vide order sheet dated 08.12.2013 signed by A.R. of assessee. date for compliance by assessee was 08.12.2008 but assessee failed to produce anyone of them. During hearing on 18.12.2008 assessee was again requested to produce these persons on 22.12.2008. But A.R. again failed to produce them on 22.12.2008. Vide order sheet dated 22.12.2008 signed by A.R. of assessee. So gift and creditworthiness of donors, cash creditors is not verified. Also genuineness of transaction is not provided as all transactions were said to have occurred in cash. Also, despite getting sufficient opportunities assessee failed ton produce anyone of them. Also identity of donors and creditors and tenants remain vague. In such situation, claimed cash gifts, loans and cash advances made by persons are being treated as fake. evidence produced by assessee 3 ITA No. 44/Pat/2014. are just self-serving and concocted. Also, identity of these persons are vague as assessee could not produce before me though she was given enough opportunity to do so. 3. AO further concluded as under : capital account and balance sheet filed by assessee during course of scrutiny is afterthought. And finally it is clear that assessee has paid premium in cash to tune of Rs.15,10,300/- from undisclosed income. There is no corresponding withdrawal from bank account during this period for such payment. So this is being added to total income of assessee. 4. Upon assessee appeal learned CIT(Appeals) confirmed addition holding as under : I have considered facts of case. During assessment year under consideration appellant has made total investment of Rs.31,87,985/- with M/s Bajaj Allianz. Whereas, investment of Rs.1677,685/- has been made through banking channels, other investment of Rs.15,10,300/- has been made in cash. No balance sheet was submitted with return of income though up to assessment year 2006-07, such documents could be furnished with returns of income itself. In returns for assessment years 2001-02, 2002-03 and 2003-04 capital accounts and balance sheets have been filed with such returns. When information was received by AO about investment made mby assessee and query was raised about it during assessment proceedings, attempt was made to explain same through mode of huge cash gifts and advances. persons from whom such gifts and advances were shown were not produced before AO inspite of directions for same. No Income Tax assessment details of such persons have been filed. In written submissions, it has been claimed that explanation of assessee was not examined whereas, fact is that AO duly asked assessee to produce such persons which was not done. No apparent source of huge cash in hands sof donors has been given. Why and for what occasion gifts were given has not been mentioned. donors have not been produced for examination. Therefore, even initial onus cast upon assessee to show creditworthiness and genuineness of transactions was not discharged. gifts and advances have been shown in cash for which there is no apparent reason. appellant is having several bank accounts. It is quite obvious that investment of Rs.15,10,300/- was not intended to be 4 ITA No. 44/Pat/2014. disclosed. However, when Department received specific information and explanation of assessee was sought, alibi of gifts and advances was tried to be created for explaining same. Accordingly, addition made by AO is quite in order and same is confirmed. second addition of Rs.12965/- was admitted to be correct. Hence, same is also confirmed. 5. Against above order, assessee is in appeal before ITAT. 6. I have heard both counsel and perused records. Learned counsel of assessee in this regard has made following submissions: Assessing Officer has added insurance premium paid by appellant to extent of Rs.15,10,300/-. Assessing Office has treated capital account and balance sheet filed in course of assessment proceedings as after thought and is of view that there is no withdrawal from bank account for investment of Rs.15,10,300/-, same has been added as undisclosed investment. It was explained to Assessing Officer that insurance premium to extent of Rs.15,10,300/- were paid out of cash in hand available with appellant which is supported by capital account and balance sheet submitted in course of assessment proceedings of assessment years 2005- 06 and 2006-07 vide replies dated 04-12-2008. CIT(Appeals) vide order dated 26-02-2014 has affirmed addition on ground that payment was made in cash and that investment of Rs.15,10,300/- was not intended to be disclosed. It is respectfully submitted that identical matter came before Division Bench of Hon ble Tribunal in case of appellant for immediately preceding year and Hon ble Tribunal vide order dated 24-02-2012 has been pleaded to delete payment of rs.4,65,701/- made in cash by way 5 ITA No. 44/Pat/2014. of insurance premium for assessment year 2005-06 as same was found to be covered out of cash in hand of Rs.6,35,529/- (para 3 & 4 of Tribunal s order. premium of Rs.15,10,300/- has been paid in year under consideration and sources are cash in hand of assessment year 2005-06 amounting to Rs.15,75,366/-. Since sources of payment are out of opening cash balance and similar addition made by assigning similar reasons have been deleted by Division Bench of Hon ble Tribunal, it is prayed that addition of Rs.15,10,300/- sustained by CIT(Appeals) on flimsy ground may kindly be ordered to be deleted. 8. On careful consideration I find that assessee s claim of cash resources available for making investment has been disputed by AO on ground that persons who have been claimed to have given loans and gifts were not produced before AO. In this regard assessee s argument is that it was incumbent upon AO to give notices to concerned parties, if he insisted upon their presence. It is not case that names and addresses were not given to AO. In this regard it is further submission of learned counsel of assessee that in case of same assessee ITAT in earlier year has accepted Rs.4,65,701/- as investment in insurance premium out of cash balances available. I find that in this decision ITAT has referred to remand report from AO which has confirmed fact that assessee has filed copy of balance sheet with return and stated that assessee was having sufficient cash balance out of past savings. I find that in present case issue relates to gift and cash loans veracity of which has been disputed by Revenue on ground that concerned persons were not produced before AO. It is not case that their names and addresses are not given to AO. In these circumstances, in my considered opinion, matter needs to be remitted to file of AO. AO is directed to examine issue afresh after necessary verification. 6 ITA No. 44/Pat/2014. 9. In result, this appeal filed by assessee stands allowed for statistical purposes. Order pronounced in Open Court on this 27th day of Sept., 2016. Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Dated: 27th Sept., 2016. Copy forwarded to : 1. Smt. Pramila Kumari, W/o Rabindra Charan Yadav, H/o A.K. Singh, E-117, S.K. Puri, Patna. 2. I.T.O., ward-5(4), Patna. 3. C.I.T.- Patna. 4. CIT(Appeals)- , Patna. 5. D.R., ITAT, Patna. 6. Guard File True Copy By Order Assistant Registrar, Income Tax Appellate Tribunal, Patna Bench, Patna. Wakode. Pramila Kumari v. Income-tax Officer, Ward-5(4), Patna
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