Shri Joginder Kumar Nagpal, Chandigarh V. ITO-Ward-3(2), Chandigarh

ITA 102/CHANDI/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7446 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-01-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 28-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NO. 102/CHD/2020 / ASSESSMENT YEAR : 2016-17 SH . JOGINDER KUMAR NAGPAL, H. NO. 3029, SECTOR 27-D CHANDIGARH THE ITO, WARD - 3(2), CHANDIGARH ./PAN NO: AAMPN4506A / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CIT /DATE OF HEARING : 19.01.2021 / DATE OF PRONOUNCEMENT : 30.03.2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 29.11.2019 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, CHANDIGARH (FOR SHORT THE CIT(A)], FOR THE ASSESSM ENT YEAR 2016-17 WHEREBY, THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE FILED AGAINST THE ASSESSMENT ORDER PASSED U/S 143(3) OF T HE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT'). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL 2 102-CHD-2020- SH. JOGINDER KUMAR NAGPAL, CHANDIGARH INCOME OF RS. 23,65,530/- THE AO PASSED ASSESSMENT ORDER U/S 143(3) OF THE ACT, DETERMINING THE TOTAL INCOME OF THE ASSESS EE AT RS.38,65,530/- AFTER MAKING ADDITION OF RS. 15,00,000/-, DEPOSITED IN ASSESSEES BANK ACCOUNT, AS INCOME EARNED FROM UNDISCLOSED SOURCES. IN THE FIRST APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. THE ASSESSEE IS IN APPEAL AGAINST THE SAID FINDINGS OF THE LD. CIT( A). 3. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER B Y RAISING THE FOLLOWING GROUNDS: - 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN UPHOLDING THE ADDITION OF RS. 15,00,000/- MADE B Y THE ASSESSING OFFICER TREATING THE CASH DEPOSIT TO ASSE SSEES OWN INCOME EARNED FROM UNDISCLOSED SOURCES IN UTTER DIS REGARD OF THE EXPLANATIONS RENDERED WHICH IS ARBITRARY AND UN JUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S SIMPLY BRUSHED ASIDE THE EVIDENCE PLACED ON RECORD SHOWING THAT THE CASH DEPOSITED IN THE BANK ACCOUNT WAS GIV EN BY SH. RAVI GULATI WHO HAD ADMITTED THE SAME BEFORE THE AS SESSING OFFICER AND AS SUCH THE ORDER PASSED IS ARBITRARY A ND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS WITHOUT APPRECIATING THE FACTS AS PLACED BEFORE HIM IN THE RIGHT PERSPECTIVE UPHELD THE ADDITION WHICH IS ARBI TRARY AND UNJUSTIFIED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DIS POSED OFF. 3 102-CHD-2020- SH. JOGINDER KUMAR NAGPAL, CHANDIGARH 5. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW A ND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT DURING THE ASSESSMENT PROCEEDINGS, AO RAISED SPECIF IC QUERY ABOUT THE CASH DEPOSIT AMOUNTING TO RS.17,50,000/- IN HDF C BANK AND THE ASSESSEE EXPLAINED THE SOURCE OF THE SAID DEPOSIT, HOWEVER, THE LD. CIT(A) CONFIRMED THE ADDITION WITHOUT TAKING INTO C ONSIDERATION THE SUBMISSIONS MADE BY THE ASSESSEE DULY SUPPORTED BY THE DOCUMENTARY EVIDENCE. THE LD. COUNSEL INVITED OUR A TTENTION TO THE WRITTEN SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND THE DOCUMENTS PRODUCED DURING THE ASSESSMENT PROCEEDINGS. 5. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAD EXPLAINED THE SOURCE OF DEPOSIT IN QUESTION AND PRO DUCED DOCUMENTARY EVIDENCE, DURING THE ASSESSMENT PROCEED INGS, THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION MADE BY THE AO. THE LD. COUNSEL ACCORDINGLY SUBMITTED THAT THE IMPUGNED ORD ER IS BAD IN LAW THEREFORE, LIABLE TO BE SET ASIDE. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) SUPPORTING THE FINDINGS OF THE LD. CIT(A) SUBMITTED THAT SINCE THE ASSESSEE FAILED TO SUBSTANTIATE ITS CONTENTION DURI NG THE ASSESSMENT 4 102-CHD-2020- SH. JOGINDER KUMAR NAGPAL, CHANDIGARH PROCEEDINGS AND DURING APPELLATE PROCEEDINGS, THE L D. CIT(A) HAS RIGHTLY UPHELD THE ASSESSMENT ORDER AND SUSTAINED T HE ADDITION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORDS. THE CONTENTION OF THE ASSE SSEE IS THAT IN THE YEAR 2011, HE ALONG WITH SH. RATTAN LAL, ENTERED IN TO AN AGREEMENT TO PURCHASE A HOUSE IN SECTOR 20A CHANDIGARH FROM S H. PARMINDER PAL WALIA FOR A TOTAL CONSIDERATION OF RS. 2.34 CRO RE. THE ASSESSEE PAID RS. 70,00,000/- IN ADVANCE. LATER ON, THE ASSE SSEE CAME TO KNOW THAT SH. PARMINDER PAL WALIA HAD NO CLEAR TITLE TO SELL THE SAID HOUSE. THE ASSESSEE ACCORDINGLY ASKED S. PARMINDER PAL WAL IA TO CANCEL THE DEAL AND TO RETURN THE ADVANCE PAYMENT MADE TO HIM. SINCE THE MR. WALIA DID NOT RETURN THE SAME, THE ASSESSEE MADE CO MPLAINT WITH THE ECONOMIC OFFENCES WING OF CHANDIGARH POLICE. ON THE BASIS OF THE SAID COMPLAINT THE POLICE REGISTERED FIR AGAINST TH E SELLER. WHEN THE CASE WAS REGISTERED, THE SELLER AGREED COMPROMISE A ND TO PAY THE MONEY. THEREAFTER, IN TERMS OF THE COMPROMISE, SH. RAVI GULATI, WHO WAS ONE OF THE WITNESSES TO THE SAID AGREEMENT MADE PAYMENT OF RS. 15,00,000/- (IN SIX EQUAL INSTALMENTS OF RS. 2,50,0 00/- EACH) FOR WITHDRAWING THE SAID CRIMINAL CASE AGAINST HIM. THE ASSESSEE DEPOSITED THE SAID AMOUNT IN HIS BANK ACCOUNT. 5 102-CHD-2020- SH. JOGINDER KUMAR NAGPAL, CHANDIGARH 8. IN ORDER TO SUBSTANTIATE HIS CONTENTION, THE ASS ESSEE SUBMITTED THE COPY OF AGREEMENT AND COPY OF FIR BEFORE THE AO . THE AO IN ORDER TO VERIFY THE CONTENTION OF THE ASSESSEE EXAM INED SH. RAVI GULATI AND SH. NAVDEEP SINGH. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED THE COPIES OF RECEIPTS ISSUED BY SH. RAVI GULATI, COPIES OF STATEMENT OF SH. RAVI GULATI AND SH. NAVD EEP SINGH RECORDED DURING ASSESSMENT PROCEEDINGS, WHICH ARE A VAILABLE ON RECORD. THE LD. CIT(A) HAS REJECTED THE APPEAL OF T HE ASSESSEE MAINLY ON THE GROUND THAT SH. RAVI GULATI HAS FAILE D TO PROVE THE SOURCE OF PAYMENT MADE TO THE ASSESSEE. WE NOTICE T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO EXAMINED MR. RA VI GULATI AND RECORDED HIS STATEMENT. MR. GULATI IN HIS STATEMENT HAS CATEGORICALLY STATED THAT HE HAD PAID RS. 15,00,000/-TO THE ASSES SEE IN INSTALMENTS. HE HAS FURTHER STATED THAT HE HAD TAKEN THE SAID AM OUNT FROM HIS EMPLOYER SH. RAHUL MEHRA. SH. RAVI GULATI ONE OF TH E ACCUSED IN THE FIR NO 0382 DATED 05.07.2013 REGISTERED WITH P.S. M ANIMAJARA, WHICH PRIMA FACIE SHOWS HIS INVOLVEMENT IN THE SAID FRAUDULENT DEAL. HENCE, THE DOCUMENTS ON RECORD CORROBORATE THE CONT ENTION OF THE ASSESSEE. THE AO HAS NOT EXAMINED THE IN-CHARGE OF THE CONCERNED POLICE STATION TO VERIFY THE VERSION OF THE ASSESSE E. SIMILARLY, THE AO 6 102-CHD-2020- SH. JOGINDER KUMAR NAGPAL, CHANDIGARH HAS NOT EXAMINED SH. RAHUL MEHRA TO ASCERTAIN AS TO WHETHER HE HAD PAID MONEY TO SH. RAVI GULATI. 9. AS PER THE SETTLED LAW AO CANNOT MAKE ADDITION O N THE BASIS OF SURMISES AND CONJUNCTURES. THE AO COULD HAVE PLACED ON RECORD SOME IMPORTANT FACTS BY EXAMINING THE CONCERNED PER SONS TO FALSIFY THE CONTENTION OF THE ASSESSEE. UNDER THESE CIRCUMS TANCES, WE HAVE NO REASON TO DISBELIEVE THE CONTENTION OF THE ASSES SEE AND TO REJECT THE DOCUMENTARY EVIDENCE ON RECORD. HENCE, WE ARE O F THE CONSIDERED VIEW THAT THE FINDINGS OF THE LD. CIT(A) ARE CONTRA RY TO THE EVIDENCE ON RECORD AND FURTHER NOT IN ACCORDANCE WITH THE SE TTLED PRINCIPLES OF THE LAW. WE, THEREFORE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 30.03.2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 30 .03.2021 . . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 7 102-CHD-2020- SH. JOGINDER KUMAR NAGPAL, CHANDIGARH 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR