IN INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Chandra Poojari, AM & Shri George George K, JM ITA No.329/Coch/2019 : Asst.Year 2008-2009 Sri.Zacharia Abraham Income Tax Officer Puthenpurayil Vs. Ward 1(3) House No.104, AKG Nagar Trivandrum. 1st Avenue, Peroorkada Trivandrum 695 005. PAN : ALWPP6212E. (Appellant) (Respondent) Appellant by : --- None --- (Written submission) Respondent by : Smt.A.S.Bindhu, Sr.DR Date of Date of Hearing : 22.08.2019 Pronouncement : 23.08.2019 ORDER Per Chandra Poojari, AM : This appeal by assessee is directed against order of Commissioner of Income-tax dated 15.05.2018 for assessment year is 2008-2009. 2. assessee has raised following grounds:- 1. CIT(A) erred in holding that deposit of money by appellant in his bank account out of refund of loan by his brother in law as unexplained cash credits. 2. CIT(A) erred in holding that credit in pass book as credit in book of appellant for applying section 68 of Act. 3. CIT(A) erred in applying ratio of decision of 291 ITR 278 in appellant s case when facts are totally disagreed. 3. facts of case are that Assessing Officer while completing assessment u/s 143(3) of I.T.Act observed that there are deposits of Rs.5,00,000 into his bank accounts 2 ITA No.329/Coch/2019 Sri.Zacharia Abraham Puthenpurayil. on following dates, which is stated to be return of loan amount given to Sri.C.V.Phillip :- Date Amount Bank 02/05/2007 Rs.2,80,000 Central Bank of India 03/05/2007 Rs.45,000 Catholic Syrian Bank 24/12/2007 Rs.2,00,000 Catholic Syrian Bank assessee explained to Assessing Officer that he got return of Rs.3,25,000 on 02.05.2007 from Sri.C.V.Phillip out of this, he deposited Rs.2,80,000 to his bank account with Central Bank of India on 02.05.2007 and balance amount of Rs.45,000 on 03.05.2007. Another Rs.2 lakh received by assessee on 24.12.2007 from Sri.C.V.Phillip and deposited it on 24.12.2007 to his bank account with Catholic Syrian Bank. However, this was disbelieved by A.O. and made addition of Rs.5 lakh to total income of assessee, as unexplained deposit. 4. Against this, assessee went in appeal to first appellate authority, wherein CIT(A) observed that as regards source for deposit of Rs.5 lakh made in assessee s bank account, assessee claimed to have given this amount to his brother-in-law, Sri.C.V.Phillip as interest free loan out of loan of Rs.9,00,000 he availed from Central Bank of India, Peroorkada Branch on 26.04.2006. It is not known purpose for which assessee had availed loan. It is also not known whether assessee was allowed by bank to divert part of loan sanctioned to his brother in law. Further, it is not known why money was given to his brother in law by cash and not by cheque or otherwise. Unless these queries are positively answered, 3 ITA No.329/Coch/2019 Sri.Zacharia Abraham Puthenpurayil. argument of assessee that money which his brother in law allegedly given back on 02.05.2007, 07.10.2007 and 26.03.2008 alone had been credited to bank account, cannot be accepted. Though assessee claimed to have filed confirmation letter to Assessing Officer which in turn according to assessee, not been entertained but rejected, Assessing Officer did not mention anything about this in assessment order passed. Had it really been filed, same could have been filed atleast during course of appellate proceedings for further consideration. In absence of filing same at appellate stage, argument postulated by assessee in this regard looks to be after though to which not much importance need be given at this point of time. CIT(A) further observed that judgment of Hon'ble Supreme Court decision in case of CIT vs P.Mohanakala {291 ITR 278} relied on by Assessing Officer would squarely apply to case of assessee and therefore, other argument of assessee that decision won't apply to him is totally misplaced since in said decision it was held that if in cases where explanation offered by assessee about nature and source of sums found credited in books is not satisfactory there is, prima facie, evidence against assessee viz receipt of money. burden is on assessee to rebut same and if he fail to rebut it, it can be held against assessee that it was receipt of income nature." Reliance is also placed here to decision of Hon'ble High Court of Kerala in case of ITO vs Diza Holdings {P} Itd {255 ITR 573} wherein it was held that burden was on assessee to offer satisfactory explanation 4 ITA No.329/Coch/2019 Sri.Zacharia Abraham Puthenpurayil. about nature and source and amount found credited in books of assessee. Mere furnishing of particulars was not enough and mere fact that payment was by way of account payee cheque was also not conclusive. Therefore, assessee had not explained cash credits satisfactorily. Accordingly, CIT(A) confirmed addition. 5. Against this, assessee is in appeal before us. There was delay of 204 days in filing appeal before Tribunal. assessee explained reason for belatedly filing of appeal is that appellate order dated 15.05.2017 was received by assessee on 18.05.2018. assessee has handed over all documents along with original assessment order to assessee s Counsel Sri.Suku Abraham Jacob, wherein he confirmed that all appeal papers were handed over to him to file appeal against assessment order, by assessee. Inadvertently, he had under presumption that appeal would have been filed in time. However, in mean time, appeal papers were misplaced. Thus, there was delay of 204 days in filing appeal before Tribunal and delay was mainly attributable in tracing order against which appeal has to be filed. 6. We have heard DR s submissions and perused material on record. In our opinion, there is good and sufficient reason in filing appeal belatedly before this Tribunal. We find that there is sufficient cause for belated filing of appeal and no latches can be attributed to assessee. 5 ITA No.329/Coch/2019 Sri.Zacharia Abraham Puthenpurayil. Hence, we condone delay and admit appeal for adjudication. 7. None appeared on behalf of assessee, however, adjournment petition has been filed. We find there is no reasonable cause for granting adjournment, hence, adjournment sought by assessee is rejected and proceed to dispose off appeal on merit duly hearing learned Departmental Representative. 8. In present case, assessee has originally availed Rs.9 lakh from Central Bank of India, Peroorkada Branch, Trivandrum on 26.04.2006. assessee has taken plea that he had advanced sum of Rs.5 lakh out of this loan, to his brother-in-law, Sri.C.V.Phillip and he has returned money to assessee on 02.05.2007 Rs.3,25,000, on 07.10.2007 Rs.1,50,000 and on 26.03.2008 Rs.25,000 and these amounts were deposited in bank account as detailed below:- Date Amount 02/05/2007 Rs.2,80,000 03/05/2007 Rs.45,000 24/12/2007 Rs.2,00,000 9. On other hand, learned Departmental Representative stated that money has been deposited by cash and not by cheque, hence, it is also not known whether assessee was allowed by bank to draw advance of loan sanctioned to him so as to give loan to Sri.C.V.Phillip amounting to Rs.5 lakh. However, learned Counsel for assessee in his written submission stated that assessee 6 ITA No.329/Coch/2019 Sri.Zacharia Abraham Puthenpurayil. has filed confirmation letter and also affidavit dated 12th June, 2019 from Sri.C.V.Phillip, confirming returning of loan of Rs.5 lakh to assessee, and he has also confirmed that he had given confirmation to this effect to assessee (Sri.Zacharia Abraham Puthenpurayil) to produce same before Income-tax authorities in November 2010. Neither CIT(A) nor Assessing Officer examined Sri.C.V.Phillip, who said to be returned money to assessee. lower authorities were not doubted availing of loan by assessee from Central Bank of India, Peroorkada Branch, Trivandrum on 26.04.2006 at Rs.9 lakh. Both parties confirmed additions without examining concerned parties. assessee has proved identity of person who has returned loan back to assessee, capacity of person who returned money has not doubted assessee. It is also to be noted that there is confirmation letter from Sri.C.V.Phillip, who has returned money to assessee, then, in our opinion, onus shifts on to Department and Department is liable to probe matter further and investigate matter to come to independent and un-bias finding as to genuineness of transaction though they should not be rejected assessee s explanation summarily or arbitrarily or without sufficient reason. duty of Assessing Officer is to examine all material carefully and thoroughly. In our considered opinion, both lower authorities have without examining parties concerned, rejected explanation offered by assessee in summarily manner, which is not proper. primary burden on assessee is to prove creditworthiness of Sri.C.V.Phillip, and he need not prove source of funds 7 ITA No.329/Coch/2019 Sri.Zacharia Abraham Puthenpurayil. available with Mr.C.V.Phillip. In present case, assessee disclosed name and address of Sri.C.V.Phillip, by way of confirmation letter and affidavit, which were not properly examined by Department and burden cast upon assessee has been duly discharged. Hence, in our opinion, addition cannot be sustained in hands of assessee. Accordingly, we are inclined to delete addition. 10. In result, appeal filed by assessee is allowed. Order pronounced on this 23rd day of August, 2019. Sd/- Sd/- (George George K) (Chandra Poojari) JUDICIAL MEMBER ACCOUNTANT MEMBER Cochin ; Dated : 23rd August, 2019. Devdas* Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT (A) Thiruvananthapuram. 4. Pr.CIT Thiruvananthapuram. 5. DR, ITAT, Cochin 6. Guard file. BY ORDER, (Asstt. Registrar) ITAT, Cochin Zacharia Abraham Puthenpurayi v. Income-tax Officer, Ward- 1(3), Trivandrum