Shri M.Y. Jahabar Sadique Vs ITO (ITAT Chennai)
Introduction: The ITAT Chennai recently pronounced its decision on the case involving Shri M.Y. Jahabar Sadique and the Income Tax Officer (ITO). The dispute revolves around the substantiation of a cash gift of Rs.6 Lacs received by the assessee from Shri N. Mohamad Najib. The ITAT upheld the AO’s stand on this matter, emphasizing the onus on the assessee to prove the source of the cash deposit.
Detailed Analysis: The primary contention in this case was the inability of the assessee to substantiate a cash gift of Rs.6 Lacs received from Shri N. Mohamad Najib. The AO’s decision on this issue was confirmed by the ITAT, stating that the onus to prove the source of the cash deposit rested on the assessee.
Furthermore, discrepancies in business advances from JBS Ventures were noted. The AO’s stand on this matter was confirmed by the ITAT, with a partial acceptance of the assessee’s explanation. The ITAT, however, maintained the factual findings in the impugned order.
Regarding rental advances, the ITAT found unsatisfactory responses from several creditors. Two creditors’ addresses were untraceable, and two others lacked PAN and earned meager incomes. One creditor, Sh. Mohammed Ismail, successfully confirmed the advances and appeared during appellate proceedings. The ITAT accepted his explanation, leading to the deletion of the addition related to his advances.
An alternative plea regarding the sale of vehicles and additional grounds about the non-maintenance of books of accounts were dismissed by the ITAT.
Conclusion: The ITAT’s decision underscores the importance of the assessee’s responsibility to substantiate cash transactions, especially gifts. In this case, the inability to provide satisfactory explanations resulted in confirmations of the AO’s stand. The detailed analysis delves into the nuances of the dispute, providing clarity on each aspect.
The assessee could not substantiate the cash gift of Rs.6 Lacs stated to be received from Shri N. Mohamad Najib and the stand of Ld. AO, in that regard, was confirmed.
We are of the considered opinion that the onus to prove the source of cash deposit was on assessee. However, this onus could not be fully discharged by the assessee. So far as the conclusion that the gifts of Rs.6 Lacs is concerned, we find that no interference would be required in the impugned order since the factual findings remain undisturbed before us.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
1. Aforesaid appeal by assessee for Assessment Year (AY) 2014-15 arises out of the order of learned Commissioner of Income Tax (Appeals)-4, Chennai [CIT(A)] dated 09-03-2018 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 30-12-2016. The grounds raised by the assessee are as under:
1) The additions/enhancements/confirmation by the Ld CIT (A), is opposed to law, facts and circumstances of the case.
2.1) Ld CIT (A) lacks jurisdiction for enhancing the items during the appellate stage that were already allowed by the AO at the time of assessment.
2.2) Ld CIT (A) overstepped in the guise of enhancement of assessment, which is actually a review of the work of AO, pertaining to the Rent deposits accepted as genuine at the time of assessment.
2.3) Ld CIT (A) erred in not accepting the Rental Deposits confirmed by 4 tenants by asking source for source. These 4 confirmations were accepted by the AO at the time of assessment.
3) Ld CIT (A) erred in not considering the fact that the Business Advance from M/s. JBS Ventures was only Rs.13 Lakhs, whereas CIT (A) has taken Rs. 15 Lakhs advance. The actual advance of Rs.13 Lakhs was confirmed by M/s. JBS Ventures.
4.1) The Ld. CIT (A) erred in not considering the sale of vehicles with evidence as source for cash deposit and the explanation for all credits (Cash and Cheques) in the bank a/cs.
4.2) Ld CIT (A) erred in not appreciating the fact that there is sufficient source for cash deposit even after not considering the rental deposit from tenant Mr. Jitesh Nair.
5) Ld CIT (A) erred in not considering the confirmation letter from the Maternal Uncle Shri. Mohammed Najeeb, who is an NRI, by asking source for source and the addition, is incorrect.
The assessee has filed additional ground which is admitted since the same do not require appreciation of new facts. The ground read as under: –
Additions made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) u/s 69A is in opposition of law as it does not satisfy the requirements of Sec.69A of the Income Tax Act, 1961. No books of accounts have been maintained and therefore, praying for the deletion of the entire additions made to the income returned.
As evident, the assessee is aggrieved by confirmation of certain additions of cash deposit in bank accounts.
2. The Ld. AR advanced arguments assailing the impugned additions which have been controverted by Ld. DR. Having heard rival submissions and after due consideration of material facts, our adjudication would be as under.
3. The assessee being non-resident was scrutinized u/s 143(3) for the year under consideration for the reason that it made cash deposit of Rs.63.03 Lacs which include deposit of Rs.29.42 Lacs in ICICI Bank and deposits of Rs.33.61 Lacs in Axis Bank. Accordingly, the assessee was required to establish the source of the same. The Ld. AO, after considering assessee’s reply, tabulated the addition as under: –
