IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH: MUMBAI
BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER
AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER
(Assessment year: 2007-08)
Shri Rajesh Girish Matai,
E-1201, Plots 5, Sec.16,
Shivdarshan CHS, Palm Beach,
Sanpada, Navi Mumbai 400 705 ......... Appellant
Mumbai ....... Respondent
PAN: AAPPM 0015 J
Appellant by: Shri K. Gopal
Respondent by: Mr. C.G.K. Nair
Date of Hearing: 24.05.2012
Date of Pronouncement: 28.05.2012
PER R.S. PADVEKAR, JM:
In this appeal filed by the assessee the solitary issue in
controversy is addition of ` 5 lakhs sustained by the CIT (A) made by
the A.O. u/s.68 of the Act.
2. We have heard the parties. The assessee is an employee of
Reliance Industries Ltd. and as observed by the A.O. the source of
income is `salary'. It was came to the notice of the A.O. that the
assessee sold a flat/property for ` 3,77,70,000/- and agreement was
registered on 04.01.2007. The A.O. was desiring to determine the
source of the investment but as none attended, he made the entire
above amount by way of addition to the extent of ` 3,77,70,000/-
u/s.68 by treating the entire amount as unexplained cash credit.
The assessee challenged the impugned order before the ld. CIT (A).
The assessee explained that the assessee has never sold any flat or
property which was valued at ` 3,77,70,000/- and there was no
2 ITA No.4134/Mum/2011
Shri Rajesh Girish Matai
justification to make the addition u/s.68 of the Act. It was further
stated that he has purchased and registered a new Flat on 01.04.2007
for ` 37,70,000/- but never sold the property for ` 3,77,70,000/- as
discussed by the A.O. in the assessment order. The assessee also
explained the source of payment for purchasing a new flat at `
37,70,000/-. The Ld. CIT (A) called for the remand report of the A.O.
In the remand report the A.O. accepted that the assessee has not done
any transaction of Rs. 3,77,70,000/-. He also accepted that for
purchasing flat he availed a loan from the ICICI Bank of ` 20 lakhs
and used saving from the salary of ` 12,70,000/- but does not accept
the amount taken from his wife of ` 5 lakhs. The Ld. CIT (A) held that
the addition of ` 3,77,70,000/- was made by the A.O. due to error or
mistake as there was wrong reporting of the figure in the AIR. So far
as source of the investment in flat is concerned, the Ld. CIT (A) held
that to the extent of ` 32,70,000/- the same is explained. The only
remaining balance of ` 5 lakhs, which was claimed to have been paid
from his wife's Saving bank account was not explained. The Ld. CIT
(A) has not accepted the explanation of the assessee and confirmed
the addition to extent of Rs. 5 lakhs.
3. We have heard the rival submissions of the parties and perused
the records. We find that there is a total mess in the entire matter.
The A.O. made addition to the extent ` 3,77,70,000/- and claimed the
same to be on wrong information reported in AIR. When, in fact, the
transaction of the flat was for ` 37,70,000/-. The assessee explained
the source for making the investment of ` 37,70,000/- in the flat. The
Ld. CIT (A) accepted the explanation of the assessee in respect of
availing the housing loan from ICICI Bank of ` 20 lakhs and balance
of ` 12,70,000/- as saving from the salary income but rejected the
explanation to the extent of ` 5 lakhs. The Ld. Counsel took us
through the paper book and submits that the assessee's wife is also
working and drawing the salary. The requisite proof was also filed
before the A.O., which is mentioned in the remand report. The
assessee's wife is also regularly assessed. When the source is
3 ITA No.4134/Mum/2011
Shri Rajesh Girish Matai
explained, how it can be said that it was not verifiable. He pleaded
for deleting the addition. We have also heard the Ld. D.R.
4. We find that ultimately the controversy restricted to ` 5 lakhs.
The short issue is whether there is justification to sustain the addition
of ` 5 lakhs u/s.68. The assessee has filed the salary certificate of
assessee's wife as well as bank statement. Identity of the person
claimed to have given money has been established. Moreover, as per
the documentary evidence the creditworthiness is also established.
We find not justification to sustain the addition of ` 5 lakhs u/s.68, as
primary burden has been discharged by the assessee. We,
accordingly, allow the appeal filed by the assessee and delete the
5. In the result, assessee's appeal is allowed.
Order pronounced in the open court on this day of 28th May,
(J. SUDHAKAR REDDY) (R.S. PADVEKAR)
ACCOUTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 28th May, 2012
1) The Appellant.
2) The Respondent.
3) The CIT (A) -28. Mumbai.
4) The CIT-26, Mumbai.
5) The D.R. "D" Bench, Mumbai.