Sh. Lakhbir Singh, Ludhiana V. ITO, Ludhiana

CO 19/CHANDI/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7340 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-05-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 27-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Income from undisclosed sources; Source of fund; Question of law; Corroborative evidences
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1026/CHD/2009 ASSESSMENT YEAR: 2001-02 ITO, WARD V(2), V SHRI LAKHBIR SINGH, LUDHIANA. S/O SHRI DEVI DYALL SINGH, C/O SARA DISTRIBUTORS, 185-B, INDL. ESTATE, VILLAGE-BEHLOLPUR, SAMRALA, LUDHIANA. PAN : AAFPL-4101-L & CO NO. 19/CHD/2010 IN ITA NO. 1026/CHD/2009 SHRI LAKHBIR SINGH, V ITO, WARD V(2), S/O SHRI DEVI DYAL LUDHIANA. C/O SARA DISTRIBUTORS, 185-B, INDL. ESTATE, VILLAGE-BEHLOLPUR, SAMRALA, LUDHIANA. & ITA NO. 1039/CHD/2009 ASSESSMENT YEAR : 2001-02 M/S LAKHBIR SINGH & CO., V ITO V(2), C/O M/S SARA DISTRIBUTORS, LUDHIANA. 158-B, INDL. ESTATE, SAMRALA, LUDHIANA. PAN: AABFL-6989Q (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. JAISHREE SHARMA ASSESSEE BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 30.05.2012 DATE OF PRONOUNCEMENT : 26.07.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL (ITA NO. 1026/CHD/2009) HAS BEEN FILED BY THE REVENUE, AND CO/19/2010 AND ITA NO. 1039/2009 HAVE BEEN FILED BY THE ASSESSEE, AGAINST THE 2 ORDER DATED 20.08.2009, PASSED BY THE LD. CIT(A) U/ S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). 2. IN APPEAL NO. 1026/CHD/2009, THE REVENUE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 17.90 LACS MADE BY THE A.O. IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. 2. THAT THE ORDER OF THE CIT(A)-II BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 3. IN C.O.19/CHD/2010, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER THAT THE SERVICE OF NOTICE U/S 148 AND THE ASSESSMENT PROCEEDINGS SO INITIATED BY ISSUANCE OF NOTICE U/S 148 WERE IN ORDER. 2. THAT NO NOTICE U/S 148 WAS SERVED AS PER SECTION 282 OF THE INCOME TAX ACT, 1961 AS WELL AS CPC. 3. THAT THE RESPONDENT CRAVES LEAVE TO ADD OR AMEND ANY ROUND OF CROSS-OBJECTIONS BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 4. IN THIS CASE, THE ASSESSEE HAS WITHDRAWN THE C.O . THEREFORE, CO IS DISMISSED AS WITHDRAWN. 5. IN ITA NO. 1039/CHD/2009, THE ASSESSEE HAS RAISE D FOLLOWING GROUNDS OF APPEAL : 1. THAT THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER THAT SERVICE OF 3 NOTICE U/S 148 AND THE ASSESSMENT PROCEEDINGS SO INITIATED WERE IN ORDER. 2. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, IT IS SUBMITTED THAT THE WORTHY CIT(A) - II , LUDHIANA HAS ERRED IN MAKING ADDITION OF RS. 17.90 LACS IN RESPECT OF CAPITAL INVESTMENT BY THE PARTNE RS IN THE ASSESSEE'S FIRM. 3. THAT THE ADDITION HAS BEEN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY NOT CONSIDERING OUR SUBMISSIONS PROPERLY. 4. THAT THE WORTHY CIT(A) - II HAS ERRED TO CONSIDER THAT ADDITION IN RESPECT OF CAPITAL INVESTMENT OF THE PARTNERS, IF ANY, WAS TO BE MADE IN THE HANDS OF PARTNERS ONLY. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 6. IN REVENUES APPEAL (ITA 1026/CHD/2009), GROUND NOS. 2 & 3 ARE GENERAL IN NATURE AND NEED NO SEPARATE ADJUDICATION. THEREFORE, THESE GROUNDS OF APPEAL A RE DISMISSED. 7. IN GROUND NOS. 1, THE REVENUE CONTENDED THAT CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.17.90 LACS MADE BY THE AO, IN THE HANDS OF THE A SSESSEE ON SUBSTANTIVE BASIS. THE AO IN THE LAST PARA OF T HE ASSESSMENT ORDER, MADE ADDITION OF RS. 18.90 LACS. THE RELEVANT FINDINGS OF THE AO ARE REPRODUCED HEREUNDE R : FROM THE ABOVE DISCUSSION AND PERUSAL OF DOCUMENTS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS 4 APPARENT THAT A CONTRIBUTION OF SH LAKHBIR SINGH WA S ONLY RS.100000/- AND THE BALANCE RS.179000/- WAS SHOWN TO HAVE BEEN TAKEN FROM THE OTHER 8 PERSONS. HE HAD GIVEN HIS CAPITAL CONTRIBUTION TO THE WINE CONT RACTOR FIRM M/S VARINDER SINGH &CO., ON 01.04.2000 BY CASH . AS ALREADY DISCUSSED ABOVE, THE CONTRIBUTION MADE B Y THE SUB-PARTNER ARE NOT GENUINE AS THEIR CREDITWORTHINESS HAS NOT BEEN PROVED, THIS AMOUNT O F RS.1890000/- IS TREATED AS ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES. 8. FINDINGS OF THE LD. CIT(A), ON THE ISSUE IN QUES TION, ARE CONTAINED IN PARA 6.1 TO 6.5, WHICH ARE REPRODUCED HEREUNDER 6.1 THE BRIEF FACTS OF THE CASE ARE THAT THE APPELL ANT HAD CONTRIBUTED RS.18.90 LAC AS CAPITAL IN THE FIRM M/S VAR INDER SINGH & CO. THIS AMOUNT WAS CLAIMED TO HAVE BEEN INVE STED AFTER WITHDRAWING THE SAME FROM ONE ALLEGED SUCH PART NERS M/S LAKHBIR SINGH & CO. AS PER THE DETAILS RS.L LAC OUT OF RS.18.90 LAC WAS APPELLANT'S OWN CONTRIBUTION WHEREAS RS.17.90 LAC IS SHOWN TO BE CONTRIBUTION IN THE ALLEGED SUB-PARTNERSHIP FIRM M/ S LAKHBIR SINGH & CO. BY THE 8 PARTNERS., AS PER FOLLOWING DE TAILS: - SR.N O SMT.,'SH. I AMOUNT IN RS. 1. SMT. CHANDER KATRA W/O ASHOK DHIR. RO, LUDHIANA RS.200000/- 2. SH. VARINDER KUMAR (HUF) S/O MOHAN LAL, R/O LUDHIANA RS.400000/- 3. SHRI. ASHOK KUMAR (HUF) S/O MOHAN LAL, R/O LUDHIANA RS.410000/- 4. SH. SUNDER LAL (HUF) S/O SH. SATNAM DASS, R/O DELHI RS.300000/- 5. SH. RANJIT SINGH (HUF) S/O JAWALA SINGH R/O DELHI DELHI RS.90000/- 6. SH. KULDEEP SINGH S/O RANJEET SINGH R/O DELHI DELHI RS.70000/- 7. SMT. SHAKUNTLA DEVI W /O SATISH KUMAR, R/O JAGRAON RS.220000/- 8. SMT. USHA RANI W/O DHARAM PAL, R/O JAGRAON RS.100000/- TOTAL RS.1790000/- 5 6.2 FOR THE REASONS DISCUSSED IN THE RESPECTIVE ASSESSM ENT ORDERS OF M/S LAKHBIR SINGH & CO. AND THAT OF THE APPELLANT THE A.O. DID NOT ACCEPT THE CLAIM OF THE APPELLANT THAT THESE 8 P ERSONS HAD CONTRIBUTED THE CASH AMOUNT AS PER AFORE-MENTIONED DETAILS. THE A. O., THEREFORE, MADE ADDITION OF RS. 17,90 LAC IN THE HANDS OF M/S LAKHBIR SINGH & CO. ON PROTECTIVE BASI S AND WHEREAS THIS AMOUNT HAS BEEN ASSESSED IN THE HANDS OF THE APPELLANT ON SUBSTANTIVE BASIS ALONG W ITH RS.L LAC CONTRIBUTED BY HIM IN CASH FOR CAPITAL CONTRIBUTION IN THE FIRM M/S VARINDER SINGH & CO.. 6.3 THE ARGUMENTS OF THE LD. A.R. IN THIS CASE ARE SIMILAR TO THE ARGUMENTS ADVANCED IN THE CASE OF LA KHBIR SINGH & CO. VIDE APPELLATE ORDER DATED 20.8.2009 IN APPEAL NO.353/IT/CIT(A)-II/LDH/08-09 IN THE CASE OF LAKHBIR SINGH & CO. THE ADDITION OF RS.17.90 LAC MA DE BY THE A.O. HAS BEEN CONFIRMED ON SUBSTANTIVE BASIS . THEREFORE, THE ADDITION OF RS.17.90 LAC OUT OF RS.L 8.90 LAC MADE IN THE HANDS OF THE APPELLANT IS TO BE DEL ETED. 6.4 COMING TO APPELLANT'S OWN CONTRIBUTION OF RS.L LAC TOWARDS THE CAPITAL CONTRIBUTION IN THE FIRM M/S VA RINDER SINGH & CO. THE A.O. HAS NOT DISCUSSED AS TO HOW TH E SOURCES OF THE SAME ARE NOT SATISFACTORILY EXPLAINE D IN THE HANDS OF THE APPELLANT. IN THE CASE OF M/S LAKH BIR SINGH & CO. RATHER SOURCES OF THIS RS.L LAC HAVE BE EN TAKEN TO BE SATISFACTORILY EXPLAINED BECAUSE NO ADD ITION IN RESPECT OF THIS AMOUNT WAS MADE IN THAT CASE. THEREFORE, IT WOULD NOT BE JUSTIFIED TO MAKE ADDITI ON OF RS.L LAC ALSO IN THE HANDS OF THE APPELLANT. 6.5 IN VIEW OF THE ABOVE DISCUSSION THE ENTIRE ADDITION OF RS.L8.90 LAC MADE BY THE A.O. CONSIDERING THE AM OUNT TO BE APPELLANT'S INCOME FROM UNDISCLOSED SOURCES, IS DELETED AND THESE GROUNDS OF APPEAL ARE, THEREFORE, ALLOWED, THOUGH FOR AFOREMENTIONED REASONS ONLY 6 9. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA D CONTRIBUTED RS.18.90 LACS, AS CAPITAL IN THE FIRM M /S VARINDER SINGH & CO. AS PER DETAILS, RS. 1 LAKH, OU T OF RS.18.90 LACS, WAS APPELLANTS OWN CONTRIBUTION, WH EREAS RS.17.90 LACS IS SHOWN TO BE CONTRIBUTION BY THE AL LEGED SUB-PARTNER, LISTED IN PARA 6.1 OF THE ORDER, PASSE D BY THE CIT(A). LD. CIT(A) DELETED THE IMPUGNED AMOUNT. TH E ASSESSEE HAS FILED A COPY OF THE ITAT, CHANDIGARH B ENCH-B IN ITA NO. 23/CHD/2010 ASSESSMENT YEAR 2001-02 AND ANOTHER, DATED 25.04.2012 AND CONTENDED THAT THE IS SUE IS COVERED BY THE SAID ORDER, WHEREIN APPEAL OF THE RE VENUE WAS DISMISSED. THE RELEVANT FINDINGS ARE REPRODUCED HEREUNDER : 8. WE FIND THAT SIMILAR ISSUE IN RELATION TO THE CAPIT AL INVESTMENT BY THE ASSESSEE IN THE PARTNERSH IP FIRM BY WAY OF SUB-PARTNERSHIP AROSE BEFORE THE TRIBUNAL IN AS SESSEE'S OWN CASTE RELATING TO ASSESSMENT YEAR 2000-01. THE TRIBUNAL IN ITA NO.692/CHD/2008 VIDE ORDER DATED 25.9.2009 H AD DELETED THE SAID ADDITION HOLDING AS UNDER: '6. HAVING GIVING OUR CAREFUL CONSIDERATION TO THE RIVAL CONTENTIONS WE ARE OF THE CONSIDERED VIEW THAT THE CIT (A) WAS INDEED JUSTIFIED IN HOLDING THAT THERE IS NO MA TERIAL TO ESTABLISH THAT RS. 15, 50, OO0/-RECEIVED BY THE AS SESSEE FROM PARTNERSHIP THE SUB-PARTNERSHIP FIRM CAN BE TR EATED AS ASSESSEE'S UNDISCLOSED INCOME. AS WE COME TO THIS CONCLUSION, WE HAVE PARTICULARLY TAKEN NOTE OF THE FACT THAT ALL THE PARTNERS IN THE SUB-PARTNERSHIP ARE DU LY ASSESSED TO TAX, THAT COPIES OF BALANCE-SHEET AND O THER REQUISITE DETAILS ARE PLACED ON RECORD AND THAT, DE SPITE AMPLE OPPORTUNITIES, THE REVENUE AUTHORITIES HAVE N OT EVEN MADE EFFORTS TO HAVE INDEPENDENT VERIFICATION ABOUT BONA FIDES OF THESE PERSONS. THE AO IS SWAYED BY THE INP UTS RECEIVED FROM THE INVESTIGATION WING INASMUCH AS HE DID NOT SEE EVEN THE NEED TO EXAMINING THE EVIDENCES WH ICH WERE CONFRONTED TO HIM BY THE CIT (A) IN REMAND 7 PROCEEDINGS. HE SIMPLY PROCEEDED TO BRUSH ASIDE THE SAME AND HOLD THAT THE SUB-PARTNERS WERE BENAMIDARS OF THE ASSESSEE MERELY ON THE BASIS OF SUSPICION AND CONJECTURES. IN OUR CONSIDERED VIEW THE ASSESSEE HA S REASONABLY EXPLAINED THE SOURCE OF INVESTMENTS IN T HE PARTNERSHIP AND GIVEN ADEQUATE SUPPORTING EVIDENCES FOR THE SAME. WHILE IT IS INDEED OPEN TO THE AO TO EXAM INE THESE EVIDENCES, IT CANNOT BE OPEN TO HIM SIMPLY BR USH THEM ASIDE ON THE BASIS OF SUSPICION AS HE HAS PROC EEDED TO DO. THE CIT (A) WAS THUS JUSTIFIED IN GIVING IMP UGNED RELIEF AND HOLD THAT THERE IS NO MATERIAL TO MAKE A DDITION ON ACCOUNT OF MONIES RECEIVED FROM THE SUB-PARTNERS HIP. WE DECLINE TO INTERFERE IN THE MATTER. ' 9. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITA N O.876 OF 2010 IN THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL DELETING THE ADDITION OF RS.15.50 LACS REL ATING TO ASSESSMENT YEAR 2000- 01 CONSIDERED THE ISSUE OF THE INVESTMENT MADE BY THE ASSESSEE AS HIS CAPITAL CONTRIBUTION IN THE PARTNERSHIP FIRM, WHICH IN TURN WAS RECEIVED FROM EIGHT DIFFERE NT INDIVIDUALS, WHO WERE NOT LIVING AT THE ADDRESSES GIVEN BY THE A SSESSEE, OBSERVED THAT WHERE THE TRIBUNAL HAD RECORDED A FINDING THAT THE PARTNERS WERE INCOME-TAX ASSESSEES AND COPIES OF THE BALANCE SHEET AND THE REQUISITE DETAILS WERE PLACED ON RECORD. IN THE ABS ENCE OF THE REVENUE REBUTTING THE CORRECTNESS OF SUCH DOCUMENTS , THE HON'BLE COURT HELD THAT THE FINDINGS RECORDED BY THE TRIBUN AL WERE BASED UPON THE EVIDENCE LED BY THE ASSESSEE, WHICH WAS NO T REBUTTED BY THE REVENUE AND SUCH FINDINGS WERE FINDINGS OF FACT WHI CH DOES NOT GIVE RISE TO SUBSTANTIAL QUESTION OF LAW. THE APPEAL OF THE REVENUE WAS DISMISSED BY THE HON'BLE HIGH COURT. 10. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS , FACTS OF THE CASE AND THE RELEVANT RECORD AND FOUND THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL, REPRODU CED ABOVE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 8 11. IN THE RESULT, APPEAL OF THE REVENUE AND CO OF THE ASSESSEE ARE DISMISSED. 12. IN GROUND NO. 1 OF ITA NO. 1039/CHD/2009, ASSESSEE CONTENDED THAT THE CIT(A) ERRED IN CONFIRMING ACTIO N OF THE AO THAT SERVICE OF NOTICE U/S 148 AND THE ASSESSMEN T PROCEEDINGS SO INITIATED WERE IN ORDER. 13. LD. 'AR' CONTENDED THAT THE ASSESSMENT ORDER HA S BEEN PASSED WITHOUT JURISDICTION AND COMPLYING WITH THE STATUTORY CONDITIONS OF SECTION 147 OF THE ACT. HE REFERRED TO PAGE NO.3 OF THE PAPER BOOK. IN THIS CASE, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 27.03.2008 FOR THE ASSESSMENT YEAR 2001-02. NOTICE WAS ALSO SENT BY SPEED POST ON 31. 3.2008. THE NOTICE WAS ADDRESSED TO THE PARTY AT THE ADDRES S GIVEN IN THE RETURN OF INCOME. LD. 'AR' MENTIONED THAT I T IS NOT A VALID SERVICE. 14. LD. 'DR', ON THE OTHER HAND, CONTENDED THAT SER VICE OF NOTICE WAS VALID AND EVEN NOTICE WAS SENT BY SPEED POST. IT WAS ARGUED THAT THE ASSESSEE PARTICIPATED IN THE AS SESSMENT PROCEEDINGS AND NO OBJECTION, AS TO THE SERVICE OF NOTICE WAS EVER RAISED, HENCE THE CASE IS COVERED U/S 292BB OF THE ACT, EFFECTIVE FROM 01.04.2008. 15. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS , FACTS OF THE CASE AND THE RELEVANT RECORD AND DEEM IT FIT TO REPRODUCE FINDINGS OF THE CIT(A), AS CONTAINED IN P ARA 5 TO 5.2 OF THE ORDER : 9 5. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF T HE LD. COUNSEL FOR THE APPELLANT AND PERUSED THE RELEVANT RECORD. THE LD. A.R. HAS OBJECTED TO THE PROCEEDINGS U/S 148 IN THIS CASE MAINLY ON THE TWO GROUNDS. THE FIRST SUCH GROUND IS THAT NO NOTICE WAS SERVED UPON THE APPELLANT BY AFFIXTURE AS CLAIMED BY THE A.O. THE SECOND OBJECTION IS THAT IT WAS NOT KNOWN TO THE A.O. WHETHER INCOME TAX RETURN ORIGINALLY FILED ON 28.03.2002 WAS | ASSESSED OR NOT BECAUSE HE DID NOT MENTION ANYTHING ABOUT THAT. HOWEVER BOTH THESE CON TENTIONS OF THE LD. A.R, ARE LIABLE TO BE REJECTED. THE A.O. HAS CATEGORICALLY BROUGHT OUT IN THE ASSESSMENT ORDER THAT THE NOTICE U/S 148 ISSUED ON 26.3.2008 WAS SERVED UPON THE APP ELLANT BY AFFIXTURE. FIRST OF ALL THE APPELLANT HAS NOT OBJ ECTED TO THE PROCEEDINGS BEFORE THE A.O. ON THIS GROUND. IT APPE ARS THAT DURING THE RE-ASSESSMENT PROCEEDINGS THE APPELLANT NEVER RAISED THIS ISSUE. ON THAT GROUND ITSELF THE CONTENTI ON NOW BEING RAISED, CANNOT BE ENTERTAINED. EVEN OTHERWISE , THE APPELLANT WAS FREE TO TAKE INSPECTION OF THE ASSESS MENT RECORD OF THE A.O. AND SEE IF THE NOTICE WAS DULY SERVED O R NOT. HOWEVER, NO POSITIVE EVIDENCE HAS BEEN 'FILED IN RE SPECT OF THIS CONTENTION. THEREFORE, THE CONTENTION OF THE APPELL ANT IS ON THE BASIS OF CERTAIN PRESUMPTION ETC. AND NO POSITIVE E VIDENCE HAS BEEN REFERRED TO O, BROUGHT ON RECORD WHICH COULD C ONFIRM ITS STAND THAT THE NOTICE U/S 148 OF THE ACT WAS NOT SE RVED BY AFFIXTURE AS CLAIMED IN THE ASSESSMENT ORDER. 5.1 COMING TO THE OBJECTION WITH REGARD TO THE ACTION O N THE RETURN FILED BY THE APPELLANT ON 30.3,2002, AGAI N THE LD. A.R. IS MAKING CERTAIN ASSERTIONS ON THE BA SIS OF PRESUMPTIONS. THE CONTENTION THAT IT WAS NOT K NOWN TO THE A.O. WHETHER INCOME TAX RETURN AS FILED ON 28.3.2002 WAS ASSESSED OR NOT IS NOT SUPPORTED BY REFERENCE TO THE RECORD ETC. IT IS, THEREFORE, TO BE TAKEN TO BE JUST ON THE BASIS OF CERTAIN PRESUMPTIONS. N OT MENTIONING ANYTHING ABOUT THAT IN THE ASSES SMENT ORDER WOULD NOT NECESSARILY MEAN THAT THE POSITION AS ABOVE WAS NOT KNOWN TO THE A.O. 5.2 KEEPING IN VIEW THE ABOVE DISCUSSIONS BOTH THE 10 OBJECTIONS OF THE LD. A.R. ARE NOT ACCEPTABLE AND, THEREFORE THESE ARE REJECTED. THE GROUNDS OF APPE AL AGAINST ISSUING OF NOTICE U/S 148 OF THE ACT IN THIS CA SE ARE, THEREFORE, DISMISSED. 16. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS , FACTS OF THE CASE AND THE RELEVANT RECORD. THE FINDINGS G IVEN BY LD. CIT(A), ARE DETAILED AND LEGALLY AND FACTUALLY CORR ECT. THEREFORE, WE DO NOT FIND ANY INFIRMITY THEREIN, HE NCE, THE SAME ARE UPHELD. THIS GROUND OF APPEAL OF THE ASSE SSEE IS DISMISSED. 17. IN GROUND NO.2, THE ASSESSEE CONTENDED THAT CIT (A) ERRED IN MAKING ADDITION OF RS.17,90 LACS IN RESPEC T OF CAPITAL INVESTMENT BY THE PARTNERS IN ASSESSEE'S FI RM. THE FINDINGS OF THE CIT(A) ARE CONTAINED IN PARA 7 OF T HE APPELLATE ORDER DATED 20.08.2009, WHICH ARE REPRODU CED HEREUNDER : 7. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF T HE LD. A.R. FOR THE APPELLANT AND PERUSED THE RELEVANT RECORD. THE LD. A.R. HAS RAISED MAINLY A LEGAL ISSUE IN AS MUCH AS IN VIEW OF THE R ATIO OF THESE DECISIONS IF THE SOURCES OF FUNDS BROUGHT IN BY THE PARTNERS AS THEIR CAPITAL CONTRIBUTION IN A FIRM ARE NOT SATISFACTORILY EXPLA INED, ADDITION, IF ANY, IN RESPECT OF THE SAME COULD NOT BE MADE IN THE HANDS OF THE FIRM U/S 68 OF THE ACT. THESE AMOUNTS COULD BE CONSIDERED FOR ADDI TIONS IN THE HANDS OF THE RESPECTIVE PARTNERS ONLY. HOWEVER THE FACTS & C IRCUMSTANCES OF THE APPELLANTS ARE SUCH THAT THE RATIO OF THE DECISIONS RELIED UPON AS ABOVE CANNOT HELP THE CASE OF THE APPELLANT. IN THE CASE OF SH. LAKHBIR SINGH S/O SH. DEVI DAYAL FOR THE ASSESSMENT YEAR 2001-02 WHERE ADDITION IN RESPECT OF THE SAME AMOUNTS HAS BEEN ASSESSED BY TH E A.O. ON SUBSTANTIVE BASIS, THE A.O. HAS MADE A CATEGORICAL OBSERVATION THAT THE ABOVE MENTIONED PERSONS WERE NOT GENUINE PARTNERS I N THE SUB- PARTNERSHIP AS THEIR SIGNATURES AS PER SUB-PARTNERS HIP DEED DID NOT TALLY 11 WITH THE SIGNATURES AS PER THEIR RETURNS. THIS CATE GORICAL OBSERVATION OF THE A.O. HAS NOT BEEN CONTROVERTED BY THE APPELLANT EITHER DURING APPEAL PROCEEDINGS OF THE APPELLANT OR THE APPEAL PROCEEDI NGS OF SHRI LAKHBIR SINGH AS MENTIONED ABOVE. THE RATIO OF THE DECISION S RELIED UPON WOULD APPLY WHERE THE PARTNERS OF A FIRM HAVE ACCEPTED TH AT THEY HAD CONTRIBUTED THE RESPECTIVE CAPITAL IN THE FIRM AND SOURCES OF WHICH COULD HOWEVER NOT BE EXPLAINED SATISFACTORILY. WHEN THE S IGNATURES OF THE ALLEGED PARTNERS IN THE SUB-PARTNERSHIP DEED ARE SH OWN TO BE DIFFERENT FROM THE SIGNATURES ALLEGEDLY MADE IN THEIR RESPECT IVE RETURNS OF INCOME, IT COULD NOT BE CONSIDERED THAT THEY HAD ACCEPTED H AVING CONTRIBUTED AS ABOVE. EVEN OTHERWISE IN THE FACE OF THIS CATEGORIC AL OBSERVATION OF THE A.O. THE CREDITS ALLEGEDLY OF THE AMOUNTS-.CONTRIBU TED BY THESE PERSONS COULD NOT BE TAKEN TO BE GENUINE. THE LD. A.R. HAS ALSO CONTENDED DURING APPEAL PROCEEDINGS IN THE CASE OF SH. LAKHBIR SINGH THAT ALL THE ALLEGED SUB-PARTNERS WERE INCOME TAX ASSESSEES AND, THEREFO RE, THEY SHOULD BE HELD TO BE GENUINE. HOWEVER THIS CANNOT BE TAKEN TO BE ENOUGH TO PROVE THE GENUINENESS OF THE CASH CREDITS WHEN CONSIDERED IN THE LIGHT OF THE ABOVE MENTIONED CATEGORICAL OBSERVATION OF THE A.O. INSPITE OF THESE PERSONS HAVING SHOWN TO HAVE FILED THEIR INCOME TAX RETURNS, IT WAS NECESSARY TO PROVE THE CREDITWORTHINESS OF THE CRED ITORS AND THE GENUINENESS OF THE TRANSACTIONS WAS REQUIRED TO BE PROVED, AS HELD BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. KORLAY TRADING CO. LTD. 232 ITR 820/824 (CAL.). KEEPING IN VIEW THE EN TIRETY OF THE FACTS & STANCES AND THE LEGAL POSITION DISCUSSED ABOVE I AM INCLINED TO AGREE WITH THE A.O. THAT ADDITION OF RS. 17.90 LAC WAS RE QUIRED TO BE MADE TO THE INCOME OF THE APPELLANT. THOUGH THE A.O. HAS MA DE THIS ADDITION ON PROTECTIVE BASIS AND ADDITION HAS BEEN MADE IN THE HANDS OF SHRI LAKHBIR SINGH (INDIVIDUAL) ON SUBSTANTIVE BASIS, KEEPING IN VIEW THE FACTS & CIRCUMSTANCES OF BOTH THE CASES THIS ADDITION IS CO NFIRMED IN THE HANDS OF THE APPELLANT ON SUBSTANTIVE BASIS. 18. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' CONTENDED THAT ASSESSEE HAD FILED REQUISITE DOCUMEN TS IN THE FORM OF INCOME TAX RETURN, COPY OF LEDGER ACCOUNT, BALANCE SHEET, WITH A VIEW TO PROVING THE IDENTITY, CAPACIT Y AND GENUINENESS OF THE TRANSACTIONS UNDER REFERENCE. P AN OF THE PERSON HAS ALSO BEEN FURNISHED. LD. 'AR' PLACED RE LIANCE ON 12 THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO V S HRI VARINDER SINGH & OTHERS, ITA 23/CHD/2010 & OTHERS. 18(I) LD. 'DR' ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A) AND AO. 19. THE RELEVANT PART OF THE DECISION OF THE TRIBUN AL IN ITA NO. 23/CHD/2010 & OTHERS DATED 25.04.2012 IS REPROD UCED HEREUNDER : 8. WE FIND THAT SIMILAR ISSUE IN RELATION TO THE C APITAL INVESTMENT BY THE ASSESSEE IN THE PARTNERSHIP FIRM BY WAY OF SUB-PARTNERSHIP AROSE BEFORE THE TRIBUNAL IN ASSESS EES OWN CASE RELATING TO ASSESSMENT YEAR 2000-01. THE TRIBUNAL IN ITA NO.692/CHD/2008 VIDE ORDER DATED 25.9.2009 HAD DELETED THE SAID ADDITION HOLDING AS UNDER: 6. HAVING GIVING OUR CAREFUL CONSIDERATION TO THE RIVAL CONTENTIONS WE ARE OF THE CONSIDERED VIEW THAT THE CIT (A) WAS INDEED JUSTIFIED IN HOLDING THAT THERE IS NO MATERIAL TO ESTABLISH THAT RS.15,50,000/- RECEIVED BY THE ASSESSEE FROM PARTNERSHIP THE SUB-PARTNERSHIP FIRM CAN BE TREATED AS ASSESSEE'S UNDISCLOSED INCOME. AS WE COME TO THIS CONCLUSION, WE HAVE PARTICULARLY TAKEN NOTE OF THE FACT THAT ALL THE PARTNERS IN THE SUB-PARTNERSHIP ARE DULY ASSESSED TO TAX, THAT COPIES OF BALANCE- SHEET AND OTHER REQUISITE DETAILS ARE PLACED ON RECORD AND THAT, DESPITE AMPLE OPPORTUNITIES, THE REVENUE AUTHORITIES HAVE NOT EVEN MADE EFFORTS TO HAVE INDEPENDENT VERIFICATION ABOUT BONA FIDES OF THESE PERSONS. THE AO IS SWAYED BY THE INPUTS RECEIVED FROM THE INVESTIGATION WING INASMUCH AS HE DID NOT SEE EVEN THE NEED TO EXAMINING THE EVIDENCES WHICH WERE CONFRONTED TO HIM BY THE CIT (A) IN REMAND PROCEEDINGS. HE SIMPLY PROCEEDED TO BRUSH ASIDE THE SAME AND HOLD THAT THE SUB-PARTNERS WERE BENAMIDARS OF THE ASSESSEE MERELY ON THE BASIS OF SUSPICION AND CONJECTURES. IN OUR CONSIDERED VIEW THE ASSESSEE HAS REASONABLY EXPLAINED THE SOURCE OF INVESTMENTS IN THE PARTNERSHIP AND GIVEN ADEQUATE SUPPORTING EVIDENCES FOR THE SAME. WHILE IT IS INDEED OPEN TO THE AO TO EXAMINE THESE EVIDENCES, IT CANNOT BE OPEN TO HIM SIMPLY BRUSH THEM ASIDE ON THE BASIS OF SUSPICION AS HE HAS PROCEEDED TO DO. THE CIT (A) WAS THUS JUSTIFIED IN GIVING 13 IMPUGNED RELIEF AND HOLD THAT THERE IS NO MATERIAL TO MAKE ADDITION ON ACCOUNT OF MONIES RECEIVED FROM THE SUB-PARTNERSHIP. WE DECLINE TO INTERFERE IN THE MATTER. 9. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITA NO.876 OF 2010 IN THE APPEAL FILED BY THE REVENUE A GAINST THE ORDER OF THE TRIBUNAL DELETING THE ADDITION OF RS.15.50 LACS RELATING TO ASSESSMENT YEAR 2000-01 CONSIDERED THE ISSUE OF THE INVESTMENT MADE BY THE ASSESSEE AS HIS CAPITAL CONTRIBUTION IN THE PARTNERSHIP FIRM, WHICH IN TURN WAS RECEIVED FROM EIGHT DIFFERENT INDIVIDUALS, WHO WERE NOT LIVING AT THE ADDRESSES GIVEN BY THE ASSESSEE, OBSE RVED THAT WHERE THE TRIBUNAL HAD RECORDED A FINDING THAT THE PARTNERS WERE INCOME-TAX ASSESSEES AND COPIES OF THE BALANCE SHEET AND THE REQUISITE DETAILS WERE PLACED ON RECORD. I N THE ABSENCE OF THE REVENUE REBUTTING THE CORRECTNESS OF SUCH DOCUMENTS, THE HON'BLE COURT HELD THAT THE FINDINGS RECORDED BY THE TRIBUNAL WERE BASED UPON THE EVIDEN CE LED BY THE ASSESSEE, WHICH WAS NOT REBUTTED BY THE REVE NUE AND SUCH FINDINGS WERE FINDINGS OF FACT WHICH DOES NOT GIVE RISE TO SUBSTANTIAL QUESTION OF LAW. THE APPEAL OF THE REVENUE WAS DISMISSED BY THE HON'BLE HIGH COURT. 20. A PERUSAL OF THE PAPER BOOK FILED BY THE ASSESS EE, TO SUPPORT HIS CONTENTION AND ESTABLISH THE NATURE AND SOURCE OF FUNDS REVEALS THAT PHOTO COPY OF THE INCOME TAX RETURNS, ACCOMPANIED BY COMPUTATION OF INCOME, BALANCE-SHEET , AS ON 31.3.2001, COPY OF ACCOUNT IN THE ASSESSEE'S BOO KS OF ACCOUNT REFLECTING THE AMOUNT CONTRIBUTED BY THE PA RTY HAD BEEN FILED BY THE ASSESSEE APPELLANT. SUCH EVIDENC ES HAVE BEEN FILED BY THE ASSESSEE IN THE PAPER BOOK, IN RE SPECT OF OTHER PARTIES ALSO. THE DECISION RELIED UPON BY TH E ASSESSEE IN ITA NO. 692/CHD/2008 ASSESSMENT YEAR 2000-01, IN THE CASE OF ITO, WARD 6(3), LUDHIANA V SHRI VIRENDER SI NGH, ORDER DATED 25.09.2009, HAS BEEN DECIDED IN FAVOUR OF THE 14 ASSESSEE, BY DISMISSING APPEAL OF THE REVENUE. THE HON'BLE TRIBUNAL UPHELD THE VIEW TAKEN BY THE CIT(A) THAT T HE REVENUE HAS FAILED TO BRING MATERIAL ON RECORD TO E STABLISH THAT RS.15,50,000/- RECEIVED BY THE ASSESSEE FROM P ARTNERS IN THE SUB-PARTNERSHIP FIRM CAN BE TREATED AS ASSES SEE'S UNDISCLOSED INCOME. THE TRIBUNAL HAS TAKEN NOTE OF THE FACT THAT ALL THE PARTNERS IN THE SUB-PARTNERSHIP ARE DU LY ASSESSED TO TAX, THAT COPIES OF BALANCE-SHEET AND O THER REQUISITE DETAILS ARE PLACED ON RECORD AND THAT DES PITE AMPLE OPPORTUNITIES, REVENUE AUTHORITIES HAVE NOT EVEN MA DE EFFORTS TO HAVE INDEPENDENT VERIFICATION ABOUT BONA FIDE OF THESE PERSONS. IT WAS OBSERVED BY THE HON'BLE TRIB UNAL THAT WHILE IT IS OPEN TO THE AO TO EXAMINE THESE EVIDENC ES, BUT IT CANNOT BE OPEN TO HIM TO SIMPLY BRUSH THEM ASIDE ON LY ON THE BASIS OF SUSPICION, AS HE HAS PROCEEDED TO DO. THE CIT(A), WAS THUS, JUSTIFIED IN GIVING IMPUGNED RELI EF AND HOLDING THAT THERE IS NO MATERIAL TO MAKE ADDITION ON ACCOUNT OF MONIES RECEIVED FROM SUB-PARTNERSHIP FIR M. THIS DECISION OF THE HON'BLE TRIBUNAL HAS BEEN UPHELD BY THE JURISDICTIONAL HIGH COURT IN ITA NO. 876 OF 2010 (O &M) DATED 8.12.2011 IN THE CASE OF CIT V VIRENDER SINGH (SUPRA). 21. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSI ONS AND FOLLOWING THE DECISION OF THE TRIBUNAL AS WELL AS O F THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SH RI VIRENDER SINGH (SUPRA), FINDINGS OF THE CIT(A) CANN OT BE SUSTAINED AND HENCE, SAME ARE SET ASIDE. THE GROUN D OF APPEAL OF THE ASSESSEE IS ALLOWED. 15 22. GROUND NOS. 3, 4 AND 5 ARE GENERAL IN NATURE AN D NEED NO SEPARATE ADJUDICATION. ACCORDINGLY, THE SAME AR E DISMISSED. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 24. RESULTANTLY, APPEAL OF THE REVENUE (ITA NO. 1026/CHD/2009) AND C.O. OF THE ASSESSEE (CO NO. 19/CHD/2010) ARE DISMISSED AND THE APPEAL OF THE AS SESSEE (ITA O. 1039/CHD/2009 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH JULY,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH