Income Tax Appellate Tribunal - Cochin
Sri. Mathai Eapen Vettath, Kottayam vs The Ito, Non-Corporate, Wd-1(3), Kochi on 25 February, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH, COCHIN
BEFORE S/SHRI CHANDRA POOJARI, AM & GEORGE GEORGE K., JM
I.T.A. No.422/Coch/2018
Assessment Year : 2014-15
Shri Mathai Eapen Vettath, Vs. The Income tax Officer, Non-
Vettath Swaroopam, Corporate, Ward-1(3), Kochi.
Near Kaduthuruthy,
Njeezhoor P.O.
Kottayam-686 612.
PAN:AFTPV 5949R]
(Assessee-Appellant) (Revenue-Respondent)
S.P. 33/coch/2018
(Arsg. out of I.T.A. No.422/Coch/2018)
Assessment Year : 2014-15
Shri Mathai Eapen Vettath, Vs. The Income tax Officer, Non-
Vettath Swaroopam Corporate, Ward-1(3), Kochi.
Near Kaduthuruthy,
Njeezhoor P.O.
Kottayam-686 612.
PAN:AFTPV 5949R]
(Assessee-Appellant) (Revenue-Respondent)
Assessee by Shri Mathai Eapen Vettath, Adv.
Revenue by Smt. A.S. Bindhu, Sr. DR
Date of hearing 21/02/2019
Date of pronouncement 25/02/2019
ORDER
Per CHANDRA POOJARI, AM:
This appeal filed by the assessee is directed against the order of the CIT(A), Kottayam dated 02/05/2018 and pertains to the assessment year 2014-15.
I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018
2. The first ground is with regard to sustenance of addition of Rs.49,22,000/- towards deposits in the SB accounts of Catholic Syrian Bank and SBI.
3. The facts of the case are that the Assessing Officer called for information u/s. 133(6) from Catholic Syrian Bank and State Bank of India wherein the assessee was maintaining banks accounts. The banks supplied the statements and the Assessing Officer found that the assessee had deposited Rs.49,22,000/- on 06/03/2014 and 07/03/2014 as under:
Sl. No. Date Amount Name of Nature of deposit
Bank
1 06.03.2014 20,00,000/- CSB
2 06.03.2014 5,00,000/- CSB FD
3 06.03.2014 5,00,000/- CSB FD
4 06.03.2014 4,72,000/ - SBI FD
5 07.03.2014 14,50,000/- SBI
Total 49,22,000/-
3.1 The Assessing Officer called for explanation for the source of the above
cash deposits. On 09.12.2016, the assessee submitted his explanation for
sources of funds as under:
A Rubber cultivation - 1.5 acre 90,000/-
B Paddy - 43.32 acres 9,66,000/-
C Rubber Plantation and Tapioca Plantation sold 30,22,000/- & 6,00,000/-
D Motor accident claim received 89,175/-
E Ground nut cultivation land sold on 25.02.2013 18,00,000/-
F Agricultural loan taken 1,25,00,000/-
G Loan taken from George Thomas (Dubai) 1,00,000/-
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I.T.A. No.422/Coch/2018 &
S.P. No.33/Coch/2018
H Loan taken from Tom K Varghese (Kuwait) 1,00,000/-
I Loan taken from Mrs. Mary Sleeba (London) 1,00,000/-
3.2 The Assessing Officer did not accept the above explanation of the assessee. The Assessing Officer found that the assessee had not explained the source of cash deposits. The Assessing Officer observed that the assessee gave vague replies without any supporting evidences and even though the assessee was claiming to have agricultural income, he had not declared the same in his return of income. The Assessing Officer found that the assessee had not furnished any evidence of having generated income during the year even if it was not declared in the return of income. The professional income was also not declared in the return of income. Under these circumstances, the Assessing Officer treated the cash deposit of Rs.49,22,000/- as unexplained cash credit and assessed the same u/s. 68 of the Act.
4. Before the CIT(A), the assessee filed a letter dated 02/01/2018, contents of which are reproduced below:
"Sir, Sub : Regarding Source in case : ITU/W-1(3)NGAFTPV5949R/16-17 I had withdrawn the following amount from the Banks :
25.11.13 30,000 IDBI 30.11.13 50,000 IDBI 16.12.13 1,00,000 Federal Bank 23.12.13 1,00,000 IDBI 3 I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018 30.12.14 60,000 IDBI 7.1.14 50,000 IDBI 7.1.14 7,00,000 IDBI 10.1.14 50,000 IDBI 16.1.14 5,000 IDBI 17.1.14 78,00,000 IDBI 30.1.14 90,000 IDBI
5.2.14 50,000 SIB 17.2.14 50,000 SIB 18.2.14 68,000 SIB 25.2.14 30,000 SIB 7.3.14 5 Lakhs SIB 7.3.14 5 Lakhs SIB 11.3.14 5 Lakhs SIB 7.3.14 30,22,000 (Check given to me by Cyril Varkey selling the property 11.3.14 4,72,000 Indian Bank From the above proof it is proved the source".
4.1 The CIT(A) observed that apart from farming, the assessee also carries 0n the profession of a lawyer occasionally. According to the CIT(A) in its various submissions, the assessee had levelled allegations of bias and harassment 4 I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018 against the Assessing Officer. However, on reading the assessment order, the CIT(A) did not find any basis for these allegations and the Assessing Officer had performed his duties as an Assessing Officer lawfully and had given sufficient opportunities to the assessee for giving explanations to the show cause notices issued by him. It was observed that the assessee was not well versed with the processes of Income-tax assessment and therefore, the response of the assessee was full of anomalies and contradictions which have been brought on record by the Assessing Officer in the assessment order passed by him. According to the CIT(A), the Assessing Officer had examined cash deposit of Rs.49,22,000/- and not satisfied with the explanation of the assessee, treated the same as unexplained cash credits and added the same to the total income of the assessee u/s 68 of the I T Act. The entire cash was deposited on 06.3.2014 and 7.3.2014. The CIT(A) gave the summary of assessee's explanation given at the time of assessment which is as under:
i) The source of cash deposit is agricultural and professional income.
ii) He had sold land and sale consideration of the same were deposited in the Bank.
iii) He has substantial rubber cultivation and paddy cultivation.
iv) He also had ground nut cultivation.
v) He had taken agricultural loan amounting to Rs. 1.25 crores from Arakkunnam Branch of District Co-operative Bank Ltd.
vi) He had taken personal loans of Rs. 1 lakh each from 3 people. 5
I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018
(v) The assessee had substantial cash withdrawals from his bank accounts, which were re-deposited .
4.2 Before the CIT(A) , the assessee also contended that, his old father and mother were not keeping well and therefore he had to maintain substantial cash balance at home in case of any emergency arose. The assessee also explained that he sold his property in Mararikulam North Panchayat, Alappuzha to Mrs. Suvarna and Mr.Gopalakrishnan and received a cheque which was dishonoured on presenting to the Bank for clearance and his legal notices were also not replied. It was submitted that with the interference of Mr.Pratapkumar Swarny, the deal was re-negotiated and he received Rs.14,50,000/- in cash, which he deposited in his bank account. Before the CIT(A), it was also stated that he was not aware of Income Tax proceedings and this was the first time he was handling his own Income Tax matters and was appearing before the Income Tax authorities. He claimed that he was basically a village farmer and was speaking the truth. The Assessing Officer did not believe the assessee and rejected the explanations furnished by him for mainly the following reasons.
i) No receipts or evidences of cash receipts and sale of agriculture products and sale of land was produced before the Assessing Officer.
ii) The assessee did not disclose any agricultural income in the Return of Income filed for the year under consideration.
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I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018
iii) As per the available information, only one land sale was undertaken by the assessee and the amount of Rs.30,22,000/- was received by cheque which was credited into the bank account of the assessee on 7.3.2014 and the same were converted into Fixed Deposits and therefore source of cash deposits cannot be explained through sale of this land.
iv) The explanations given by the assessee was vague and not supported with evidences.
v) The assessee is a senior Advocate and it is presumed that he would be well versed with legal proceedings and should have co-operated with the assessment proceedings and should have co-operated with the assessment proceedings.
4.3 After considering the contentions of both, the Assessing Officer and the assessee, the CIT(A) found that the explanation had not been furnished properly. On the other hand, the CIT(A) observed that the Assessing Officer had concentrated on deposits made only on 06.3.2014 and 07.3.2014 and he had chosen to ignore deposits and withdrawals made during rest of the financial year 2013-14. The Assessing Officer had not disputed the fact that the assessee is basically an agriculturist, having substantial holding of land, and even though he had not declared any agricultural income in his Return of 7 I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018 Income filed, he may be earning agricultural income. According to the CIT(A), under the existing provisions of Income Tax Act, agricultural income becomes significant for applying rate of Income Tax, though the agricultural income per se, is exempt from the incidence of tax. It was also seen that the A.O. had not made any efforts to find the source from which the assessee would have earned such cash income. It was observed that the Assessing Officer also did not make any efforts to investigate, whether the assessee was actually earning any agricultural income. The Assessing Officer also did not give any credit for earlier cash withdrawals made by the assessee and claimed to have been re-deposited. The CIT(A) was of the view that the conduct of the assessee in submitting the details and documents requisitioned by the Assessing Officer was not satisfactory. Thus, the CIT(A) directed the Assessing Officer to give credit for agricultural income, sale of land and past withdrawals. The assessee had also not disclosed the professional income. The assessee tried to prove source by way of personal loan from 3 people of Rs. 1 lakh each, for which he had not furnished either the confirmation or the PAN of the parties concerned. It was observed that no prudent person would take loan, when he already has substantial money with him. Since the assessee had also not expressly stated whether these were cash loans or not to explain the source of the deposits, the CIT(A) doubted the genuineness of transaction.
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I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018 4.4 Thus, taking an overall view of the matter, the CIT(A) treated the claim of Rs.3 lakhs, which was obtained as personal loans as unexplained cash- credits and confirmed the addition of Rs. 3 lakhs.
5. Against this, the assessee is in appeal before us.
6. After hearing both the parties, we are of the view that the assessee had not been able to explain the sources for Rs.3 lakhs out of Rs.49,22,000/- deposited in various Bank accounts. In view of the unsatisfactory explanation offered by the assessee, we do not find any infirmity in the order of the CIT(A) and confirm the addition made by the Assessing Officer.
7. The next issue is with regard to disallowance of Rs1,10,000/- u/s. 80C.
8. We have heard the rival submissions and perused the record. We find that neither before the lower authorities nor before us, the assessee has not furnished any details to claim deduction u/s. 80C of the Act. The assessee stated that his one son, Shri Vettath Eapen Mathai was studying LLM in FCMS, an institution for management studies, managed by Fathima Educational Trust, ICO Junction, Perunnal, Changanacherry. The assessee has enclosed the receipts of tuition fees dated 28/05/2011, 19/06/2012, 24/09/2012, 04/03/2013, 20/07/2013, 02/03/2014, 14/03/2014 and 2.3.2015. It was 9 I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018 also stated that his another son, Shri Gregorious Thomas Vettath, was a MBBS student of Pondicherry Institute of Medical Sciences. The assessee has enclosed the details of tuition fees paid to the tune of Rs.2,96,000/- dated 15/01/2010. The assessee also submitted that he earned interest of Rs.10,000/- on savings Bank account. As such, he was entitled for deduction u/s. 80TTA of the Act. In our opinion, the deduction claimed u/s. 80C is to be allowed u/s. 80C(2)(xvii) of the Act which states that tuition fee/education fee paid by a parent towards education of his/her children is entitled for deduction. The assessee is entitled for deduction to the tune of Rs.1.5 lakhs under this provision subject to the provision of section 80C(4)(c) of the Act on furnishing the requisite details. Regarding deduction u/s. 80C, the assessee has not produced any details of payment of tuition fees for the year under consideration before AO. As such, we remit this issue to the file of the Assessing Officer with a direction to the assessee to furnish the details of payment of tuition fees before the Assessing Officer and thereupon decide the same.
8.1 With regard to deduction u/s. 80TTA, the assessee has also not furnished the details of interest income earned on saving Bank account. As such, we remit this issue to the file of the Assessing Officer with a direction to the assessee to provide necessary details. These grounds of appeal of the assessee are partly allowed for statistical purposes. 10
I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018
9. Since we have decided the assessee's appeal, the Stay Petition filed by the assessee in SP No.33/Coch/2018 has become infructuous and the same is dismissed as infructuous.
10. In the result, the appeal of the assessee is partly allowed for statistical purposes and the Stay Petition filed by the assessee is dismissed .
Order pronounced in the open Court on this 25th February, 2019 sd/- sd/-
(GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Kochi Dated: 25th February, 2019 GJ Copy to:
1. Shri Mathai Eapen Vettath, Vettath Swaroopam, Near Kaduthuruthy, Njeezhoor P.O. Kottayam-686 612.
2 The Income Tax Officer, Non-Corporate, Ward1(3), Kochi.
3. The Commissioner of Income-tax(Appeals)-II, Kochi.
4. The Pr. Commissioner of Income-tax, Kochi.
5. D.R., I.T.A.T., Cochin Bench, Cochin.
6. Guard File.
By Order (ASSISTANT REGISTRAR) I.T.A.T., Cochin 11 I.T.A. No.422/Coch/2018 & S.P. No.33/Coch/2018 12