Amarvir Singh (HUF), Patiala V. ITO, Patiala

CO 3/CHANDI/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3208 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: K P BAJAJ
• Keywords: Unexplained investment; Capital asset
• Section: 131; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR , ACCOUNTANT MEMBER ITA NO. 1233/CHD/2016 ASSESSMENT YEAR:2011-12 THE ITO VS. AMARVIR SINGH (HUF) WARD-4, PATIALA GOOD EARTH COLONY BABA JASSA SINGH ROAD PATIALA PAN NO. AACHA5504R C.O. NO. 03/CHD/2017 (IN ITA NO. 1233/CHD/2016) ASSESSMENT YEAR:2011-12 AMARVIR SINGH (HUF) VS. THE ITO GOOD EARTH COLONY WARD-4, PATIALA BABA JASSA SINGH ROAD PATIALA (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. K.P. BAJAJ DEPARTMENT BY : SMT. C. CHANDRAKANTA DATE OF HEARING : 07/09/2017 DATE OF PRONOUNCEMENT : 05/10/2017 ORDER PER DR. B.R.R. KUMAR, A.M: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION F ILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 19/09/2016 PASSED BY THE CIT(A)-PATIALA. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 59,08,000/- M ADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENTS. 2 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 9,80,000/- MA DE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 3. GROUND RAISED BY THE ASSESSEE IN ITS CROSS OBJEC TION IS READS AS UNDER: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN MAKING ENHANCEMENT TO T HE ASSESSED INCOME TO THE EXTENT OF RS. 1,78,000/- 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S MADE MULTIPLE SALE TRANSACTION OF IMMOVABLE PROPERTY DURING THE YEAR U NDER CONSIDERATION AND DEPOSITED THE CASH RECEIPTS IN THE BANK ACCOUNT. 5. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS S UBMITTED LIST OF ALL THE PROPERTIES SOLD BY THE ASSESSEE AND ALSO DETAILS OF THE CASH RECEIVED OUT OF THE SALE OF THE PROPERTIES. IT WAS SUBMITTED THAT THESE PROPERTIES HAVE BEEN SOLD BY GENERAL POWER OF ATTORNEY(GPA). 6. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ISSUED LETTER OF ENQUIRY AND SUMMONS UNDER SECTION 131 TO THE PARTIE S WHO HAVE PURCHASED THE PROPERTIES. SINCE THERE WAS NO COMPLIANCE, THE ASSE SSING OFFICER MADE ADDITION UNDER SECTION 69 OF THE ACT, AN AMOUNT EQUIVALENT T O THE VALUE OF THREE PROPERTIES OUT OF THE FIVE PROPERTIES SOLD. 7. AGGRIEVED THE ASSESSEE WENT BEFORE THE LD. CIT(A ). 8. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH AT NO ADDITION CAN BE MADE FOR WANT OF COMPLIANCE BEFORE THE ASSESSING OF FICER BY THE PURCHASE PARTIES AND THE AMOUNTS RECEIVED OUT OF THE SALE AN D THE PROFITS THEREOF HAVE BEEN DULY DECLARED IN THE RETURN OF INCOME. THE LD. CIT(A) DELETED THE ADDITIONS ON THE GROUNDS THAT NO ADDITION CAN BE MADE ON THE CASH RECEIPTS DULY DECLARED BY THE ASSESSEE. 9. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE RE VENUE FILED APPEAL BEFORE US. 10. BEFORE US THE LD. DR ARGUED THAT THE SALE BY GP A HAS BEEN VIEWED ADVERSELY BY THE HONBLE SUPREME COURT IN THE CASE OF SURAJ LAMP & INDUSTRIES PVT. LTD. VS. STATE OF HARYANA 340 ITR 1. THE LD. D R FURTHER ARGUED THAT IT CANNOT BE A COINCIDENCE THAT ALL THE SALES HAVE BEEN AFFEC TED IN CASH WHICH IS STRANGE AND BEYOND HUMAN PROBABILITY. RELIANCE WAS PLACED O N THE JUDGMENT OF 3 HONBLE SUPREME COURT IN CASE OF SUMATI DAYAL VS. C IT 218 ITR 806 IN THIS CONTEXT. 11. LD. AR ARGUED THAT THE ADDITION WAS DONE MAINLY AS THERE WAS NO COMPLIANCE BY THE PURCHASE PARTIES AND ALSO AS NO O RIGINAL DOCUMENTS HAVE BEEN PRODUCED BEFORE THE ASSESSING OFFICER. HE SUBM ITTED THAT THE ORIGINAL DOCUMENTS ARE AVAILABLE WITH THE PURCHASE PARTIES A ND THE SALE PARTIES DO NOT GET ORIGINALS BUT ONLY A CERTIFIED COPY. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS NOT DOUBTED THE SALE OF TWO PROPERTIES WHICH ARE MADE THROUGH CASH AND BY G PA MEASURING 232 YARDS AND 251 YARDS WHEREAS THE RECEIPTS FROM OTHER THREE PROPERTIES SOLD IN A SIMILAR FASHION WERE TREATED UNDER SECTION 69. THE PRIMARY REASON FOR ADDITION WAS THAT THE PURCHASERS DID NOT APPEAR OR COMPLIED BEFORE TH E ASSESSING OFFICER. THE PROFITS DERIVED FROM THE SALE OF PLOTS HAS ALREADY BEEN DISCLOSED TO THE REVENUE AND ALSO THE DETAILS OF THE CASH DEPOSITS WHICH ARE SUCH SALE RECEIPTS. IT IS AN UNDISPUTED FACT THAT THE PLOTS HAVE BEEN SOLD IN CA SH AND THE AMOUNTS HAVE BEEN DULY DEPOSITED IN THE BANK ACCOUNT OF THE ASSE SSEE AND THE SALE WAS EFFECTED BY GPA. AS PER CLAUSE (V) OF SECTION 2(47) TRANSFER IN REL ATION TO A CAPITAL ASSET INCLUDES (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASS ET; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK IN TRADE OF A BUSINESS CAR RIED ON BY HIM, SUCH CONVERSION OR TREATMENT; OR (IVA). (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT, 1882 (4 OF1882); HENCE IT CAN BE TREATED AS TRANSFER/SALE. 13. FURTHER, THE CASE LAW OF SURAJ LAMP & INDUSTRIE S PVT. LTD. VS. STATE OF HARYANA QUOTED BY THE ASSESSING OFFICER DOESNT GIV E ANY POWER TO NULLIFY THE SALE BY GPA AND TO TREAT THE RECEIPTS UNDER SECTION 69, AS IN THE INSTANT CASE THE SALE AND THE SUBSEQUENT RECEIPT OF THE MONIES HAVE BEEN EXPLAINED SUFFICIENTLY. FURTHER IT IS ALSO OBSERVED THAT THE ASSESSING OFFI CER HAS MADE ADDITION OF ONLY THREE TRANSACTION OUT OF FIVE TRANSACTIONS ENTERED BY THE ASSESSEE. NO REASONS 4 WERE GIVEN AS TO WHY TWO TRANSACTIONS WHICH WERE AL SO ENTERED THROUGH GPA WERE LEFT OUT. HENCE KEEPING IN VIEW THE TOTALITY O F THE FACTS AND CIRCUMSTANCES, WE DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT (A) IN DELETING THE ADDITION. 14. THE SECOND GROUND RAISED BY THE REVENUE RELATES TO ADDITION OF RS. 9,80,000/-. 15. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 9,80,000/- ON ACCOUNT OF CASH DEPOSITS ON 24/02/2011. THE ADDITION MADE WAS DELETED BY THE LD. CIT(A) ON THE GROUNDS THAT THE ASSESSEE HAS GOT CASH IN HA ND AVAILABLE ON THE DATE OF CASH DEPOSIT. 16. BEFORE US THE LD. DR ARGUED THAT THE CASH WITHD RAWN ON 09/11/2010 CANNOT BE TREATED TO BE CASH AVAILABLE ON 24/02/201 1 TO BE DEPOSITED AGAIN AS SIGNIFICANT DURATION HAD ELAPSED BETWEEN THE DAT E OF WITHDRAWAL AND DATE OF CASH DEPOSIT. 17. THE LD. AR SUBMITTED THE COPY OF THE BANK STATE MENT WITH NARRATION. 18. WE HAVE PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT AN AMOUNT OF RS. 9,80,000/- HAS BEEN WITHDRAWN IN CASH FROM T HE BANK ACCOUNT OF HDFC NO. 13301010001347 VIDE CHEQUE NO. 0049379 AND THE AMOUNT WAS DEPOSITED IN CASH ON 24/02/2011. BETWEEN THIS PERIOD THERE WA S CASH WITHDRAWAL OF RS. 16,000/- VIDE CHEQUE NO. 0049380. THERE WERE NO OTH ER CASH WITHDRAWAL OR DEPOSITS DURING THIS PERIOD. IN VIEW OF THESE FACT THAT THE ASSESSEE HAS GOT SUFFICIENT CASH IN HAND TO DEPOSIT WHICH WAS DECIPH ERABLE FROM THE BANK STATEMENT, NO ADDITION ON THIS HEAD IS CALLED FOR. HENCE WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE AD DITION. 19. IN THE CROSS APPEAL, THE ASSESSEE HAS OBJECTED FOR THE ENHANCEMENT OF RS. 1,78,000/- MADE BY THE CIT(A). 20. THE LD. CIT(A) AFTER GIVING AN OPPORTUNITY FOR ENHANCEMENT HAS BOUGHT AN AMOUNT OF RS. 1,78,500/- UNDER SECTION 69 OF THE AC T. THE ASSESSEE WAS GIVEN DUE SHOW CAUSE NOTICE ON 31/08/2006 BY THE LD. CIT( A). THE LD. CIT(A) HAS ENQUIRED ABOUT THE CASH DEPOSITS OF RS. 8,28,500/- ON 25/02/2011 AND RS. 9,00,000/- ON 08/03/2011 IN THE ASSESSEES BANK ACC OUNT PRIOR TO THE DATE OF SALE OF PLOTS. THE ASSESSEE HAS SUBMITTED THAT HE HAD EN OUGH CASH WITHDRAWALS TO SUBSTANTIATE THE CASH DEPOSITS. IN THE REPLY, WHERE IN THE DETAILS OF THE CASH WITHDRAWALS HAVE BEEN SHOWN AS UNDER: 5 DATE AMOUNT 29/10/2010 6,00,000/- 04/11/2010 6,00,000/- 09/11/2010 9,80,000/- 21/02/2011 3,50,000/- 25,30,000/- 21. THUS THE ASSESSEE HAS SHOWN CASH WITHDRAWALS TO THE TUNE OF RS. 25,30,000/-. THE CIT(A) HAS ALREADY GIVEN BENEFIT O F RS. 9,80,000/- AS DISCUSSED ABOVE, LEAVING RS. 15,50,000/- AVAILABLE AS CASH I N HAND WITH THE ASSESSEE WHEREAS THE ASSESSEE HAS DEPOSITED AN AMOUNT OF RS. 17,28,500/-. THE DIFFERENCE OF 1,78,500/- WAS BROUGHT TO TAX UNDER S ECTION 69 OF THE ACT. 22. BEFORE US THE LD. AR ARGUED THAT AS PER THE WEA LTH TAX RETURN FILED FOR THE AY 2009-10 THE ASSESSEE HAD SUFFICIENT CASH IN HAND HENCE ADDITION IS UNWARRANTED. THE LD. DR RELIED ON THE CASH FLOW AND THE ORDER OF THE LD. CIT(A). 23. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE P ARTIES AND PERUSED THE RECORD. 24. WE FIND THERE IS NO STRENGTH IN THE ASSESSEES CONTENTION THAT THE CASH IN HAND AS ON 31/03/2008 CANNOT BE ACCEPTED AS A PROOF FOR THE CASH DEPOSITS MADE ON 08/03/2011 I.E; AFTER A GAP OF ALMOST THREE YEARS. THE CASH WITHDRAWALS AND DEPOSITS HAVE BEEN EXAMINED IN DETAIL WHILE GIV ING THE RELIEF OF RS. 9,80,000/- EARLIER. CLEARLY THE ASSESSEE COULD NOT PROVE THE AVAILABILITY OF CASH OF RS. 1,78,500/- COGENTLY AND IT REMAINS UNEXPLAINED. HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT(A) ON THIS IS SUE. 25. IN THE RESULT APPEAL OF THE REVENUE AND THE CRO SS APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/10/2017. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05/10/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR