IT : Where assessee failed to prove that cash deposits in his bank was out of sale proceeds of alleged gold gifted to him by his parents, such deposits were rightly treated as unexplained cash credits■■■
[2013] 37 taxmann.com 259 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'B'
K.R.S. Suresh
v.
Income-tax Officer*
N.S. SAINI, ACCOUNTANT MEMBER
AND CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
IT APPEAL NOS. 1458 & 1459 (MDS.) OF 2012
[ASSESSMENT YEAR 2009-10]
MAY 7, 2013
Section 68 of the Income-tax Act, 1961 - Cash credits [Cash deposit in bank] - Assessment year 2009-10 - There was cash deposit in bank account of assessee - Assessee claimed that he had received 6183 grams of gold from his late father and mother as gifts and sale proceeds of such gold was deposited in bank - Whether since no evidence was produced to prove that assessee was in possession of ancestral gold and sale consideration of such gold was used for making deposits into his bank accounts, Assessing Officer was justified in treating deposits in bank as unexplained cash credits - Held, yes [Para 5][In favour of revenue]
B. Sivaraman for the Appellant. Guru Bashyam for the Respondent.
ORDER
1. These two appeals are filed by the assessees against different orders of the Commissioner of Income-tax (Appeals)-I, Coimbatore dated April 10, 2012 for the assessment year 2009-10. The only grievance of the assessees in these appeals is that the Commissioner of Income-tax (Appeals) erred in sustaining the addition made by the Assessing Officer towards unexplained cash credits.
2. Brief facts of the case are that both the assessees, husband and wife, namely, K. R. S. Suresh and Mrs. Ranjani Suresh are commission agents filed returns for the assessment year 2009-10 on December 23, 2009 admitting income of Rs. 1,62,000 and Rs. 1,90,000 respectively. The Assessing Officer completed the assessments under section 143(3) determining the income of the assessees at Rs. 71,61,156 and Rs. 57,90,000 respectively. While completing the assessments, the Assessing Officer made addition of Rs. 69,99,156 and Rs. 56,00,000 as unexplained cash credits in the hands of these assessees respectively. On appeal, the Commissioner of Income-tax (Appeals) sustained the additions made by the Assessing Officer.
3. The counsel for the assessee submits that the assessees are into jewellery business and the assessee K. R. S. Suresh received 6,183 grams of gold from his late mother Smt. Kausalya and father K. R. S. Subramanian. The counsel for the assessee submits that the assessee by selling these ancestral gold jewellery made deposits in his bank account and it was explained to the Assessing Officer that the source for deposits were out of sale proceeds of gold jewellery. Similarly, in the case of Mrs. Ranjani Suresh, it was the submission of the counsel that she has received 4,947 grams of gold from her later mother-in-law Smt. Kausalya and father-in-law K. R. S. Subramanian and by selling these ancestral gold jewellery, the assessee made deposits in her bank account. Therefore, the counsel submits that the Assessing Officer is not justified in making addition towards unexplained cash credits, since the assessees have received ancestral gold jewellery from
their parents/in-laws as gift and such gold was sold and deposited into their bank accounts. The counsel for the assessee referring to pages 54 to 67 of the paper book submits that the assessees have in fact filed wealth-tax returns showing the details of gold received by them and admitting the capital gains on sale of such gold for the assessment years 2007-08 and 2008-09. Therefore, the counsel submits that the assessees have explained the source for the amounts deposited into their bank accounts and there is no justification in treating the deposits into their bank accounts as unexplained cash credits by the Assessing Officer.
4. The Departmental representative referring to assessment order submits that the assessee K. R. S. Suresh has not produced any evidence in proof of receipt of gold from his parents as gift. Similarly, Smt. Ranjani Suresh also did not produce any evidence in proof of receipt of gold from her mother-in-law and father-in-law as gift. No evidence was produced to say that these assessees have received the gold in the form of gift. The Departmental representative further submits that assessees have not produced any evidence before the Assessing Officer or the details of persons to whom the gold was sold by the assessees. The Departmental representative further submits that even wealth-tax returns filed by the assessees were just before the completion of assessment and are beyond the due date for filing the returns and they cannot be relied on to say that the assessees were in possession of ancestral gold.
5. Heard both sides. Perused the orders of the lower authorities and the materials placed on record. In the course of assessment proceedings, it was noticed by the Assessing Officer that the assessees have made cash deposits into their bank accounts and when the Assessing Officer sought for explanation from the assessees as to why these deposits cannot be treated as unexplained cash credits, it was the submission of the assessees that they were in possession of ancestral gold jewellery received from their parents in the case of K. R. S Suresh and in the case of Mrs. Ranjani Suresh from her mother-in-law and father-in-law and sale of such gold was the source for making deposits into their bank accounts. Except stating that they have sold gold which was said to have been received from their parents/mother-in-law and father-in-law, the assessees have not produced any evidence to prove that these ancestral gold was gifted to the assessees by the
parents/in-laws. The assessees also did not produce any details for sale of gold or wealth-tax returns filed in normal course to establish that they were in possession of the gold and only such gold was sold by them. In the absence of any such evidence produced by the assessees, it is hard to believe that the assessees are in possession of ancestral gold and sale consideration of such gold was used for making deposits into their bank accounts. It is also a fact that the parents of the assessee K. R. S. Suresh and who are also mother-in-law and father-in-law of Smt. Ranjani Suresh have not filed their wealth-tax returns and they are not assessed to wealth-tax. It is the observation of the Assessing Officer that these assessees have made several cash credits of small amounts appearing in bank accounts claimed to be out of gold sale as these assessees are not in gold business. It is also observed by the Assessing Officer that logically it is not possible
to accept the submissions of the assessees that they have sold gold so many times and deposited in their savings bank accounts. It is also the observation of the Assessing Officer that majority of cash deposits made were from Rs. 10,000 to Rs. 49,900 and only in rare occasions few lakhs were credited. Most of the small credits were used to meet ICICI credit card, Axis bank credit card payments and also for paying out some EMIs. It was also noticed by the Assessing Officer that whenever a credit of few lakhs were appearing in bank account, immediately there will be a debit for demand draft or pay order payable at Chennai. The wealth-tax returns filed by the assessee on December 8, 2011 for the assessment years 2007-08 and 2008-09 admitting the capital gains on sale of ancestral gold jewellery said to have been received from their parents/in-laws appears to be to create some sort of evidence to explain the sources of cash deposits made in their bank
accounts. These wealth-tax returns filed on December 8, 2011 just before the completion of assessments on December 22, 2011 suggest that there is no other reason for filing these returns except for explaining the source for deposits into bank account. Therefore, in the facts and circumstances of these cases, we uphold the additions made by the Assessing Officer towards unexplained cash credits as they were not proved with sources for such deposits by the assessees. We confirm the orders of the Commissioner of Income-tax (Appeals).
6. In the result, both the appeals of the assessees are dismissed.USP
[2013] 37 taxmann.com 259 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'B'
K.R.S. Suresh
v.
Income-tax Officer*
N.S. SAINI, ACCOUNTANT MEMBER
AND CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
IT APPEAL NOS. 1458 & 1459 (MDS.) OF 2012
[ASSESSMENT YEAR 2009-10]
MAY 7, 2013
Section 68 of the Income-tax Act, 1961 - Cash credits [Cash deposit in bank] - Assessment year 2009-10 - There was cash deposit in bank account of assessee - Assessee claimed that he had received 6183 grams of gold from his late father and mother as gifts and sale proceeds of such gold was deposited in bank - Whether since no evidence was produced to prove that assessee was in possession of ancestral gold and sale consideration of such gold was used for making deposits into his bank accounts, Assessing Officer was justified in treating deposits in bank as unexplained cash credits - Held, yes [Para 5][In favour of revenue]
B. Sivaraman for the Appellant. Guru Bashyam for the Respondent.
ORDER
1. These two appeals are filed by the assessees against different orders of the Commissioner of Income-tax (Appeals)-I, Coimbatore dated April 10, 2012 for the assessment year 2009-10. The only grievance of the assessees in these appeals is that the Commissioner of Income-tax (Appeals) erred in sustaining the addition made by the Assessing Officer towards unexplained cash credits.
2. Brief facts of the case are that both the assessees, husband and wife, namely, K. R. S. Suresh and Mrs. Ranjani Suresh are commission agents filed returns for the assessment year 2009-10 on December 23, 2009 admitting income of Rs. 1,62,000 and Rs. 1,90,000 respectively. The Assessing Officer completed the assessments under section 143(3) determining the income of the assessees at Rs. 71,61,156 and Rs. 57,90,000 respectively. While completing the assessments, the Assessing Officer made addition of Rs. 69,99,156 and Rs. 56,00,000 as unexplained cash credits in the hands of these assessees respectively. On appeal, the Commissioner of Income-tax (Appeals) sustained the additions made by the Assessing Officer.
3. The counsel for the assessee submits that the assessees are into jewellery business and the assessee K. R. S. Suresh received 6,183 grams of gold from his late mother Smt. Kausalya and father K. R. S. Subramanian. The counsel for the assessee submits that the assessee by selling these ancestral gold jewellery made deposits in his bank account and it was explained to the Assessing Officer that the source for deposits were out of sale proceeds of gold jewellery. Similarly, in the case of Mrs. Ranjani Suresh, it was the submission of the counsel that she has received 4,947 grams of gold from her later mother-in-law Smt. Kausalya and father-in-law K. R. S. Subramanian and by selling these ancestral gold jewellery, the assessee made deposits in her bank account. Therefore, the counsel submits that the Assessing Officer is not justified in making addition towards unexplained cash credits, since the assessees have received ancestral gold jewellery from
their parents/in-laws as gift and such gold was sold and deposited into their bank accounts. The counsel for the assessee referring to pages 54 to 67 of the paper book submits that the assessees have in fact filed wealth-tax returns showing the details of gold received by them and admitting the capital gains on sale of such gold for the assessment years 2007-08 and 2008-09. Therefore, the counsel submits that the assessees have explained the source for the amounts deposited into their bank accounts and there is no justification in treating the deposits into their bank accounts as unexplained cash credits by the Assessing Officer.
4. The Departmental representative referring to assessment order submits that the assessee K. R. S. Suresh has not produced any evidence in proof of receipt of gold from his parents as gift. Similarly, Smt. Ranjani Suresh also did not produce any evidence in proof of receipt of gold from her mother-in-law and father-in-law as gift. No evidence was produced to say that these assessees have received the gold in the form of gift. The Departmental representative further submits that assessees have not produced any evidence before the Assessing Officer or the details of persons to whom the gold was sold by the assessees. The Departmental representative further submits that even wealth-tax returns filed by the assessees were just before the completion of assessment and are beyond the due date for filing the returns and they cannot be relied on to say that the assessees were in possession of ancestral gold.
5. Heard both sides. Perused the orders of the lower authorities and the materials placed on record. In the course of assessment proceedings, it was noticed by the Assessing Officer that the assessees have made cash deposits into their bank accounts and when the Assessing Officer sought for explanation from the assessees as to why these deposits cannot be treated as unexplained cash credits, it was the submission of the assessees that they were in possession of ancestral gold jewellery received from their parents in the case of K. R. S Suresh and in the case of Mrs. Ranjani Suresh from her mother-in-law and father-in-law and sale of such gold was the source for making deposits into their bank accounts. Except stating that they have sold gold which was said to have been received from their parents/mother-in-law and father-in-law, the assessees have not produced any evidence to prove that these ancestral gold was gifted to the assessees by the
parents/in-laws. The assessees also did not produce any details for sale of gold or wealth-tax returns filed in normal course to establish that they were in possession of the gold and only such gold was sold by them. In the absence of any such evidence produced by the assessees, it is hard to believe that the assessees are in possession of ancestral gold and sale consideration of such gold was used for making deposits into their bank accounts. It is also a fact that the parents of the assessee K. R. S. Suresh and who are also mother-in-law and father-in-law of Smt. Ranjani Suresh have not filed their wealth-tax returns and they are not assessed to wealth-tax. It is the observation of the Assessing Officer that these assessees have made several cash credits of small amounts appearing in bank accounts claimed to be out of gold sale as these assessees are not in gold business. It is also observed by the Assessing Officer that logically it is not possible
to accept the submissions of the assessees that they have sold gold so many times and deposited in their savings bank accounts. It is also the observation of the Assessing Officer that majority of cash deposits made were from Rs. 10,000 to Rs. 49,900 and only in rare occasions few lakhs were credited. Most of the small credits were used to meet ICICI credit card, Axis bank credit card payments and also for paying out some EMIs. It was also noticed by the Assessing Officer that whenever a credit of few lakhs were appearing in bank account, immediately there will be a debit for demand draft or pay order payable at Chennai. The wealth-tax returns filed by the assessee on December 8, 2011 for the assessment years 2007-08 and 2008-09 admitting the capital gains on sale of ancestral gold jewellery said to have been received from their parents/in-laws appears to be to create some sort of evidence to explain the sources of cash deposits made in their bank
accounts. These wealth-tax returns filed on December 8, 2011 just before the completion of assessments on December 22, 2011 suggest that there is no other reason for filing these returns except for explaining the source for deposits into bank account. Therefore, in the facts and circumstances of these cases, we uphold the additions made by the Assessing Officer towards unexplained cash credits as they were not proved with sources for such deposits by the assessees. We confirm the orders of the Commissioner of Income-tax (Appeals).
6. In the result, both the appeals of the assessees are dismissed.USP
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