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Sri O.G. Sunil Versus The Deputy Commissioner of Income Tax, Central Circle-2, Ernakulam

2016 (5) TMI 1148 - KERALA HIGH COURT

Genuity of gift from father - transaction routed from Bahrain to Singapore to India - Held that:- Tribunal was satisfied that the assessee had not discharged her burden by proving the creditworthiness of her father, the identity of the parties and the genuineness of the transaction and on facts, we fully endorse that conclusion. One is also at a loss to understand why, if her father was stationed in Bahrain as claimed by the appellant and if he wanted to gift his salary income earned in that cou .....

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Unexplained bank deposit - Held that:- Tribunal has noted that in the absence of any details with regard to earning of income and the persons from whom the money was received, the Assessing Officer has rightly treated the entire amount as income. Insofar as the unexplained credit to the extent of ₹ 10,77,219/- is concerned, the Tribunal has taken note of the fact that the assessee has shown the same as loan from others in the cash flow statement. However, having regard to the fact .....

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uthorities. Insofar as ₹ 2,91,600/- is concerned, the Tribunal agreed with the assessee that the same cannot be added to his income. With respect to ₹ 5,00,000/- incurred by the assessee towards foreign travel expenses is concerned, the Tribunal has held that the source of such expenditure was neither disclosed before the Assessing Officer nor disclosed in his cash flow statement. It was for that reason the Tribunal confirmed the addition to the extent of ₹ 5,00,000/-.

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foresaid being the factual background, the findings in Tribunal's order are entirely factual and these appeals do not give rise to any question of law - I.T.A. Nos. 260, 261 and 262 of 2014 & 6, 7, 8, 9, 10, 12 and 24 of 2015 - Dated:- 15-2-2016 - Antony Dominic And A. Hariprasad, JJ. For the Petitioner : Sri. Anil D. Nair For the Respondent : Sri P. K. Ravindranatha Menon JUDGMENT Antony Dominic, J. Among these appeals, I.T.A.Nos.260, 261 and 262 of 2014 are filed by Smt.Asha Sunil. The orders .....

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the appeals together and disposed of the same by a common order. For that very reason, these appeals were also heard together and are disposed of by this common judgment. 3. We heard the counsel for the appellants and the Senior Standing Counsel for Revenue. 4. We shall first deal with the appeals filed by Smt.Asha Sunil. I.T.A.No.260 of 2014 pertains to the assessment year 2006-07. The first issue raised for consideration before the Tribunal was with respect to the addition of ₹ 10,43,81 .....

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respect to the addition of ₹ 3,33,815/- as unexplained credit in the bank account. The contention raised on behalf of the appellant was that the said deposit was made out of the trading receipts from garment business. However, it has been specifically found that the net income returned by the assessee from her garment business was only ₹ 58,250/- and that even after availing of sufficient opportunities, the appellant could not explain the source of investment to the extent of ₹ .....

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8377; 7,10,000/-. Though the assessee had purchased the property and made investment as above, the assessee had no explanation about the source from which she got the funds for making the investment. It was in such factual circumstances that the entire amount was taken as income of the assessee. Insofar as the assessment year 2006-07 is concerned, these were the only issues that were raised and considered by the Tribunal. 7. Insofar as assessment year 2007-08, which is the subject matter of I.T. .....

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explained. The Assessing Officer has also treated the profit on sale of land to the extent of ₹ 5,93,100/- as business profit. However, despite the explanation that the deposits were made from sale proceeds of land, the details of the transactions and sale were not filed before the Assessing Officer. It was in the absence of such details or the explanation, that the Tribunal confirmed the order of the Commissioner of Income Tax (Appeals), upholding the addition. 8. In I.T.A.No.261 of 2014 .....

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ank account statement produced by the assessee clearly showed that the money was transferred from Singapore to India by way of telegraphic transfer and within a day or two, the same was transferred to the assessee's account. However, the manner in which the money was transferred from Singapore to the assessee's father's account in India, could not be explained either before the Tribunal or this Court. Similarly, the role played by Tandon Investment Company, Singapore in this transact .....

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,1961 (in short,"the Act"), in as much as, the money was received from the father, a lineal ascendant of the assessee. However, the genuineness of the transaction was considered by the Tribunal and on facts, the Tribunal has concluded thus in paragraphs 19 and 20 of its order, which read as follows: "19. We have considered the rival submissions on either side and also perused the material available on record. The assessee's account was credited by T.T. transfer from City Bank. .....

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he same amount was transferred to the assessee's account. Therefore, this cannot be from savings of the assessee's father. If it is out of savings, there should be recurring credits and it cannot be a one time transfer to the bank account of the assessee's father. In fact, the assessing officer has observed as follows with regard to the nature of transaction on page 7 of the assessment order. "The examination of the account of Shri George Philip with the City Bank (A/c No.5- 017 .....

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account is ₹ 1,23,37,993.42. Apparently, the whole of the money received by Shri George Philip has been transferred to the account of Smt.Asha Sunil. Shri George Philip has acted as an agent of transfer of funds from an unknown person to Smt.Asha Sunil. Shri George Philip's bank account is only a conduit for transfer of funds from undisclosed/unidentified person to Smt.Asha Sunil. The fact that the credit of the above amounts to the account of Shri George Philip is a suspicious transac .....

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ve any satisfactory explanation except by saying that it was his savings and salary. In the absence of any material to show that the assessee's father has saved so much of money, this Tribunal is of the considered opinion that the claim of the assessee/her father that the transfer was from savings of her father cannot be accepted. To accept the gift, the assessee has to definitely establish the creditworthiness of her father. The contention of the ld. counsel for the assessee is that if the .....

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st that the assessee's father has sufficient creditworthiness to credit such a huge money to the assessee, this Tribunal is of the considered opinion that the CIT(A) has rightly confirmed the addition. The onus is on the assessee to prove the creditworthiness of her father, genuineness of the transaction and identity of the parties. In this case, though the assessee claims that the funds were transferred from her father's account, the creditworthiness is not proved. Merely because the fu .....

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y of the parties and the genuineness of the transaction and on facts, we fully endorse that conclusion. One is also at a loss to understand why, if her father was stationed in Bahrain as claimed by the appellant and if he wanted to gift his salary income earned in that country to his daughter living in India, he should transfer the amount to Singapore and then to India, instead of directly transferring the amount from Bahrain itself. It was in the aforesaid circumstances that the Tribunal confir .....

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ppeals. Insofar as assessment year 2002-03 is concerned, the challenge was against the addition of ₹ 36,67,010/-. According to the assessee, the Assessing Officer has taken ₹ 15,04,891/- as unexplained bank deposit. It was pointed out that the total deposit was ₹ 19,54,243/- and that the Assessing Officer has failed to take cheque deposit to the extent of ₹ 4,48,828/-. The Tribunal has recorded a finding that "the ld. representative very fairly submitted that the ass .....

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ve been taken as income of the assessee. Similarly, with reference to the cash withdrawal from the bank to the extent of ₹ 2,91,600/-, the contention raised was that once the deposit was taken as income, withdrawal should not be taken as income once again. With reference to the foreign travel expenses, the Assessing Officer has made addition of ₹ 5,00,000/- and the contention raised was that this expense was incurred from the withdrawals made from the bank. 12. These factual contenti .....

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to the extent of ₹ 5,68,316/- was not considered by him. Insofar as the amount that has been taken by the Assessing Officer is concerned, the Tribunal has noted that in the absence of any details with regard to earning of income and the persons from whom the money was received, the Assessing Officer has rightly treated the entire amount as income. Insofar as the unexplained credit to the extent of ₹ 10,77,219/- is concerned, the Tribunal has taken note of the fact that the assessee .....

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e, for the reason that even such payment could not be explained by the assessee before the lower authorities. Insofar as ₹ 2,91,600/- is concerned, the Tribunal agreed with the assessee that the same cannot be added to his income. With respect to ₹ 5,00,000/- incurred by the assessee towards foreign travel expenses is concerned, the Tribunal has held that the source of such expenditure was neither disclosed before the Assessing Officer nor disclosed in his cash flow statement. It was .....

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h respect to these assessment years also and accordingly the Tribunal has ordered deletion of addition to the extent of amounts withdrawn from the bank. These issues were dealt with in paragraphs 30 and 31, which read as under: "30. The only issue involved in the remaining appeals in ITA Nos 46 to 51/Coch/2014 in the case of Shri O.G.Sunil is addition on account of unexplained investments. The issue is identical to the issues discussed in ITA No.45/Coch/2014 for the assessment year 2002-03. .....

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ccount of the assessee. The assessee could not file any explanation regarding the source of receipt of money except saying that it is from real estate business. In the absence of any details/material this Tribunal is of the considered opinion that the entire deposits in bank account shall be treated as income of the assessee. The assessee himself has shown the cash credit as suspense or cash deficit in the cash flow statement as in the case for the assessment as in the case for the assessment ye .....

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