TaxTMI 
TaxTMI 
2019 (6) TMI 1007
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....ral income of Rs. 12,44,850/-. On receipt of notice issued under Section 143(2), the assessee appeared and filed cash flow statement in support of the return of income filed. The cash flow statement submitted by the assessee showed credit of Rs. 2,67,99,547/- as NRI receipts. This amount was seen credited in the capital account of the assessee with the Chandragiri Construction Company. On being asked to furnish details regarding the cash credits, the assessee explained that the receipt was from his sonin- law, Dr.K.P.Ali, who is a practicing Doctor at Dubai. In support of his explanation the assessee produced confirmation letter from Federal Bank, Kasaragode and a letter from Dr.K.P.Ali confirming that he had advanced Rs. 2,67,99,547/- to his father-in-law, the assessee. Dr.K.P.Ali claimed his source of income to be from the three clinics and four pharmacies run by him at Dubai, details of which were also produced. Relying on Commissioner of Income Tax v P.Mohanakala (2007)291 ITR 278) and other decisions, the Assessing Officer held that the assessee had not discharged his onus of proving the genuineness of the receipts, by establishing the identity and capacity of the creditor and....
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....eceived by the assessee through proper banking channel. The Tribunal held that Section 68 will be attracted only when the assessee offers no explanation or the explanation so offered is not satisfactory to the Assessing Officer. It was found that in the present case assessee had established the identity of the creditor, the source for the credit and the genuineness of the transaction and had thereby discharged the initial burden in the manner required by law. It was also found that the department had accepted the assesses explanation regarding the remittance, in the previous assessment year. Based on the said findings, the Tribunal refused to interfere with the order of the First Appellate Authority and dismissed the appeal filed by the Revenue. 4. In this appeal the Revenue has raised the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case and also for the reasons noted in the statement of the case and the grounds raised- i. The Tribunal is right in law in deleting the unexplained cash credits of Rs. 2,67,99,547/- said to have been received from an NRI on seven different dates without indicating the nature of receipts ie, wh....
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....he statement of the case is not the deletion of the addition perverse against all canons of law and procedure? 5. In effect, all questions pertain to the legality of the finding that the assessee had offered satisfactory explanation about the nature and source of the sums credited in his account by Dr.K.P.Ali. The learned Standing Counsel for the appellant contended that the finding in this regard entered by the CIT(Appeals) and the ITAT are patently illegal and perverse. In order to buttress this contention, reliance is placed on the decision in Commissioner of Income Tax v P.Mohanakala(2007)291 ITR 278). It is contended that, in the previous year the explanation offered by the assessee for the cash credits received from Dr.K.P.Ali was accepted is not a relevant factor. It is further contended that the Assessing Officer had made the addition in accordance with section 68 as the assessee had failed to offer proper explanation for the NRI receipts. 6. The learned counsel for the assessee contended that no question of law, let alone any substantial question of law, arises for consideration in the appeal. It is contended that the CIT Appeals and ITAT having found that the explanat....
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....sideration of the authorities provided the assessees rebut the evidence and the inference drawn to reject the explanation offered as unsatisfactory. We are required to notice that section 68 of the Act itself provides, where any sum is found credited in the books of the assessees for any previous year the same may be charged to income tax as the income of the assessees of the previous year if the explanation offered by the assessees about the nature and source of such sums found credited in the books of the assessees is in the opinion of the Assessing Officer not satisfactory. Such opinion formed itself constitutes a prima facie evidence against the assessees, viz., the receipt of money, and if the assessees fail to rebut the said evidence the same can be used against the assesses by holding that it was a receipt of an income nature." 8. On facts, the Apex Court found that the authority had concurrently found the explanation offered by the assessee to be unacceptable. That, the assessee had not taken the plea that even if the explanation is not acceptable, the materials and attending circumstances available on record do not justify the sum found credited in the books to be treate....