Manimegalai Arumugam v. The Income-tax Officer, Ward-3(2), Nagpur
[Citation -2016-LL-1010-13]

Citation 2016-LL-1010-13
Appellant Name Manimegalai Arumugam
Respondent Name The Income-tax Officer, Ward-3(2), Nagpur
Court ITAT-Nagpur
Relevant Act Income-tax
Date of Order 10/10/2016
Assessment Year 2011-12
Judgment View Judgment
Keyword Tags unexplained investment • undisclosed income • reserve bank • sale of gold • savings bank
Bot Summary: Against the above order the assessee appealed before the learned CIT(Appeals). Learned counsel of the assessee vehemently contended that the AO has made the addition as income from undisclosed sources. Learned counsel submitted that for these reasons and in the in interest of justice, the matter may be remitted to the file of learned CIT(Appeals) to enable the assessee to submit those evidences and canvas the appeal in proper perspective. Upon careful consideration I find that while the AO has made the addition on account of undisclosed sources, upon assessee s appeal against the same the learned CIT(Appeals) has held that the addition is confirmed u/s 69A. In this regard the assessee seeks opportunity before the learned CIT(Appeals) to submit its plea against the addition under this section. Further more there are certain additional evidences which the assessee wants to place before the learned CIT(Appeals) to properly canvas the case. Apropos the issue of addition of Rs.8,93,200/-, the learned CIT(Appeals) did not accept the assessee s contention and held as under : It is important top note that during the course of assessment proceedings the appellant did not even file the confirmation before the Ld. AO to establish the fact that the said amount had indeed been received by the appellant from her husand. Learned counsel of the assessee in this regard submitted that it was the assessee s plea before the AO that the said investments were made out of gifts from husband.


1 ITA No. 252/Nag/2016. IN INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. No. 252/Nag/2016 Assessment Year : 2011-12. Smt. Manimegalai Arumugam, Income-tax Officer, Nagpur. Vs. Ward-3(2), Nagpur. PAN AANPA4458N. Appellant. Respondent. Appellant by : Shri Kapil Hirani. Respondent by : Smt. Agnes P. Thomas. Date of Hearing : 29-09-2016 Date of Pronouncement : 10th Oct., 2016 O R D E R. This appeal by assessee is directed against order of learned CIT(Appeals)-I, Nagpur dated 11-01-2016 and pertains to assessment year 2011-12. grounds of appeal read as under : 1) On facts and circumstances of case Ld. CIT(A) grossly erred in not adjudicating ground of legality of addition of Rs. 27,31,000/- so made by Ld. AO treating same as "Income from Other Sources" despite same being specifically contested by appellant and specific submissions made which makes order passed by Hon'ble CIT(A) bad in law and liable to be set right in accordance with law. 2) Ld. CIT(A) further grossly erred in confirming addition of Rs. 27,31,000/- so made by AO as addition made U/s 69A despite order of AO making addition as Income from Other Sources and not Unexplained Investment as contemplated U/s 69A of IT Act, 1961. revision of order of AO as done by CIT(A) is illegal, invalid and bad in law. 2 ITA No. 252/Nag/2016. 3) Without prejudice, addition of Rs. 27,31,000/- made by AO as "Income from Other Sources" is illegal and liable to be deleted as per law. 4) Without prejudice, Ld. CIT(A) grossly erred in confirming addition of Rs. 27,31,000/- ignoring fact and explanation of Appellant that amount of Rs. 27,31,000/- representing cash deposits in bank accounts of appellant were out of amounts gifted to Appellant by her Mother-in-Law out of sale of gold ornaments despite appellant proving existence of said jewellery and creditworthiness of Donor as required under law. addition thus made by AO and confirmed by ClT(A) is illegal and deserve to be deleted in interest of natural justice. `5) Ld. CIT(A} grossly erred in confirming addition of Rs. 8,93,200/- as unexplained investment U/s 69 of IT Act, 1961 ignoring fact that said amount was received by Appellant as gift from her husband who himself appeared before AO during assessment proceedings and accepted giving of said gift. said investment of Rs. 8,93,200/- was made directly by appellants husband in name of appellant from his bank accounts and same was treated as gift to appellant. addition so sustained is illegal, invalid and deserves to be deleted in interest of natural justice. 6) Ld. CIT(A} further erred in not accepting corroboratory evidences in form of Affidavits of Appellant and her husband and also confirmation of gift in support of Appellant's contentions on ground that order was passed on that very date i.e 11.1.2016. Ld. CIT(A} ought to have accepted corroboratory evidence and deleted illegal additions in interest of natural justice. 7) Ld. CIT(A) further grossly erred in confirming addition of Rs. 50,121/- representing interest from savings bank account of appellant ignoring fact that said interest on amounts received as gift by appellant from her Mother-in-Law and as such are not assessable in hands of appellant vide provisions of section 64(l)(vi) of IT Act, 1961. addition thus sustained deserves to be deleted as per law. 8) Without prejudice to above, Ld. CIT(A} passed order dismissing appeal of appellant without giving adequate opportunity to appellant which makes order violative of principles of natural 3 ITA No. 252/Nag/2016. justice and liable to be set aside. 2. Brief facts of case are as under : Return of income declaring total income of Rs.11,50,000/- was filed on 30-07-2011. appellant is employee of Reserve Bank of India. During course of assessment proceedings, it was noted by AO that appellant had deposited cash amounting to Rs.12,39,000/- in Axis Bank, Nagpur branch and had also deposited cash amounting to Rs.14,92,000/- in IDBI, Nagpur branch. 3. On enquiry from AO in this regard assessee responded as under : "My family originally belongs to village Sambamedu, Taluka and District - Nammakkal of Tamil Nadu State. After death of my father-m-law in year 1991 my husband and I used to take care of my mother-in-law. In year 2010 my mother-in-law was not keeping well due to her old age. Since I had taken care of her all these years, she had gifted her gold ornaments to me for marriage of my daughter. My daughter is only girl child in family. Since gold ornaments were very old and out-fashioned, my mother-in-law sold these ornaments at regular intervals and handed over sale proceeds by way of cash to me and in turn I deposited this money in my Savings Bank Accounts. list of gold ornaments gifted to me is shown. in Annexure-I. All those gold ornaments were polished and some were repaired at Nagpur. Proof of this is enclosed in Annexure-D. She also gifted some money on various dates from her savings. My mother-in-law died on 30/1/2012 at my native place. Before her death she did not had over to me any receipts for sale of gold. After receipt of notice under 142(1) of I. T. Act, I have tried to collect proof regarding sale of gold by my mother-in-law at my native place. I could not collect necessary proof because shops where my mother-in-law sold gold ornaments are not co-operating . I, therefore, request you to kindly treat money I had deposited in my savings bank account as gift from my mother-in-law and drop proceedings under section 142(1) of Income Tax Act. Regarding rest of investments, they were made from my regular savings from salary as shown in Annexure III. " 4. AO was not convinced. He held that sum of Rs.27,31,000/- deposited in bank account has to be taxed as undisclosed income of assessee under head Income from other sources . AO further noted that other investments of assessee claimed to have been received from 4 ITA No. 252/Nag/2016. husband are also not satisfactorily explained. Hence same were also liable to be added as undisclosed income being income from other sources as under : Tata Steel Limited Rs.1,95,200 Punjab and Sind Bank. Rs.1,98,000 State Bank of India Rs. 5,00,000 Rs.8,93,200 5. Against above order assessee appealed before learned CIT(Appeals). 6. Apropos issue of cash deposits assessee inter alia submitted that amount was not liable to be added as income from undisclosed sources. assessee also sought to submit some additional evidences regarding claim of gifs received from mother-in-law. However, learned CIT(Appeals) did not accept additional evidences and held that section 69A would be appropriate section in which said addition ought to have been made. Hence he held that in view of above facts, addition amounting to Rs.27,31,000/- u/s 69A was confirmed. 7. Against above order assessee is in appeal before ITAT. 8. Learned counsel of assessee vehemently contended that AO has made addition as income from undisclosed sources. assessee has vehemently contended same before learned CIT(Appeals). learned CIT(Appeals) has accepted this contention of assessee. However, he has confirmed addition u/s 69A of I.T. Act without giving any opportunity to assessee to rebut this finding. Hence learned counsel submitted that there is violation of principle of natural justice. He claimed that at best u/s 69A it is balance lying in Bank account only that can be added. Further more he submitted that assessee has sought to submit affidavit from legal 5 ITA No. 252/Nag/2016. heirs of deceased mother-in-law. However, learned CIT(Appeals) has not entertained same. Learned counsel submitted that for these reasons and in in interest of justice, matter may be remitted to file of learned CIT(Appeals) to enable assessee to submit those evidences and canvas appeal in proper perspective. 9. Per contra learned D.R. relied upon orders of authorities below. 10. Upon careful consideration I find that while AO has made addition on account of undisclosed sources, upon assessee s appeal against same learned CIT(Appeals) has held that addition is confirmed u/s 69A. In this regard assessee seeks opportunity before learned CIT(Appeals) to submit its plea against addition under this section. Further more there are certain additional evidences which assessee wants to place before learned CIT(Appeals) to properly canvas case. Upon careful consideration I find that interest of justice will be served if issue qua aspects mentioned above is remitted to file of learned CIT(Appeals). Accordingly I remit issue to file of learned CIT(Appeals). Learned CIT(Appeals) is directed to consider issue after giving opportunity to assessee in terms of discussion as above. 11. Apropos issue of addition of Rs.8,93,200/-, learned CIT(Appeals) did not accept assessee s contention and held as under : It is important top note that during course of assessment proceedings appellant did not even file confirmation before Ld. AO to establish fact that said amount had indeed been received by appellant from her husand. Since appellant had made certain investments, onus was on appellant to establish by way of credible evidence, that said amount had indeed been received by her from her husband as gift. No such evidence had been furnished during assessment or appellate proceedings. 12. Against above order assessee is in appeal before ITAT. 6 ITA No. 252/Nag/2016. 13. I have heard both counsel and perused records. Learned counsel of assessee in this regard submitted that it was assessee s plea before AO that said investments were made out of gifts from husband. That assessee s representative was husband himself who appeared before authorities below. Hence learned counsel claimed that drawing adverse inference that confirmation was not received from husband cannot be sustained when husband has himself appeared before authorities below and claimed that he has himself given said loans to assessee. Thus adverse inference cannot be drawn that there is no confirmation filed in this regard. 14. Heard learned D.R. 15. Upon careful consideration I find that there is considerable cogency in submission of learned counsel of assessee. When assessee s husband has himself appeared before authorities below as representative and claimed that he has given gifts for those investments by assessee, adverse inference for lack of confirmation from husband is quite contradictory. Hence in interest of justice I remit this issue to file of AO. AO shall consider this issue afresh after giving assessee opportunity of being heard. 15. In result, this appeal filed by assessee stands allowed for statistical purposes. Order pronounced in Open Court on this 10th day of Oct., 2016. Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Nagpur, Dated: 10th Oct. , 2016. 7 ITA No. 252/Nag/2016. Copy forwarded to : 1. Smt. Manimegalai Arumugam, Sarang Apartments, 2nd Floor, 22 Farm Road, Civil Lines, Nagpur. 2. I.T.O., Ward- 3(2), Nagpur. 3. C.I.T.- , Nagpur. 4. CIT(Appeals), -II, Nagpur. 5. D.R., ITAT, Nagpur. 6. Guard File True Copy By Order Assistant Registrar, Income Tax Appellate Tribunal, Nagpur Bench, Nagpur. Manimegalai Arumugam v. Income-tax Officer, Ward-3(2), Nagpur
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