2019 (2) TMI 2003 - AT - Income Tax

Unexplained Cash deposit in Catholic Syrian Bank - HELD THAT - The assessee claims that he advanced a sum for purchase and installation of pollution control plant during the assessment year 2008-09. The fact remains that the cheque said to be issued by the assessee was a cash cheque and money was withdrawn on the same day. Therefore, it is not known how Shri S.K. Pandian was able to return the amount in cash as claimed by the assessee. In the absence of any details, the confirmation letter which is now available at page 9, is only an afterthought. When the assessee claimed before the AO that due to death of Shri S.K. Pandian, he could not get any confirmation letter from Shri S.K. Pandian, it is not known how the assessee was able to get the confirmation letter.The entries made in the ledger and other cash book are all afterthought. It is not supporting the case of the assessee. The assessee has no satisfactory explanation for deposit in the bank account. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Unexplained Cash deposit - HELD THAT - The fact remains that what was paid by the assessee is through cash cheque and money was received across the counter in Catholic Syrian Bank. There is no evidence of making payment to Erode party as claimed by Shri Nagarajan. There is no evidence of return of money by Erode party to Shri Nagarajan. Moreover, whether Shri Nagarajan was able to repay the money to the assessee as claimed? These facts were not established by the assessee. For cash credit, the assessee has to establish the identity of party, creditworthiness of party and genuineness of transaction. In this case, even though the assessee claims that money was paid to Shri Nagarajan, the genuineness of transaction of repayment and creditworthiness of Shri Nagarajan to repay the amount was not established. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Cash deposit - HELD THAT - It is not in dispute that the assessee claimed before the Assessing Officer that he received a sum from one Shri D. Palanisamy. However, the assessee failed to establish the identity of Shri Palanisamy, creditworthiness of Shri Palanisamy and the genuineness of transaction. In the absence of any details and failure of the assessee to establish the identity of party which is required to be established in respect of cash credit, the CIT(Appeals) has rightly confirmed the addition. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Denial of exemption under Section 54F - HELD THAT - The sale of property to the extent of ₹ 59,27,500/- is not in dispute. The assessee claimed exemption in respect of the property standing in the name of the assessee s wife. Now AO found that the assessee s wife is an independent assessee. She herself claimed exemption under Section 54F in respect of the very same property for investing the capital gain. Therefore, it is not known how the assessee was able to claim exemption under Section 54F for the second time. The matter would stand differently in case the assessee s wife had not claimed any exemption under Section 54F of the Act for investing her own capital gain. Since the assessee s wife already claimed exemption under Section 54F of the Act for investing her own capital gain, this Tribunal is of the considered opinion that the Assessing Officer has rightly confirmed the disallowance. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Appeal filed by the assessee is dismissed.

Summary

Issues:
1. Cash deposit of ?46,50,000 in Catholic Syrian Bank.
2. Cash deposit of ?12,50,000.
3. Cash deposit of ?6,00,000.
4. Denial of exemption under Section 54F of the Act.

Analysis:

Cash deposit of ?46,50,000 in Catholic Syrian Bank:
The appellant claimed to have paid this amount as an advance for a pollution control plant installation, which was later returned in cash by Shri S.K. Pandian. However, the Departmental Representative argued that the confirmation letter produced by the appellant was doubtful and not submitted to the Assessing Officer initially. The bank clarified that the cheque issued was encashed on the same day. The Tribunal found discrepancies in the appellant's claims, stating that the entries were afterthoughts and lacked supporting evidence. Consequently, the order of the lower authority was upheld.

Cash deposit of ?12,50,000:
The appellant claimed to have given this amount to Shri R. Nagarajan for a similar purpose, but the latter failed to provide evidence of repayment to a dying unit at Erode. The bank confirmed the quick encashment of the cheque issued. The Tribunal noted the lack of evidence supporting the transactions and the failure to establish the creditworthiness and genuineness of the parties involved, leading to the affirmation of the lower authority's decision.

Cash deposit of ?6,00,000:
The appellant received this amount from Shri D. Palanisamy but could not establish the identity, creditworthiness, and genuineness of the transaction. Despite submitting a cash book, the appellant's failure to provide substantial evidence led to the confirmation of the addition by the CIT(Appeals).

Denial of exemption under Section 54F of the Act:
The appellant sold a property and reinvested in a residential house, claiming exemption under Section 54F. However, the Assessing Officer found discrepancies as the appellant's wife had already claimed exemption for the same property. Since the wife was considered an independent assessee and had availed the exemption, the appellant's claim was denied. The Tribunal upheld this decision, stating that the appellant could not claim the exemption a second time for the same property.

In conclusion, the appeal filed by the assessee was dismissed, and the lower authorities' decisions were confirmed for all the issues raised in the case.