Navpreet Singh Sekhon (HUF), Chandigarh V. ACIT, Chandigarh

ITA 1074/CHANDI/2013

• Counselvise Citation: 107421514 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 1074/CHD/2013 ASSESSMENT YEAR: 2010-11 SH. NAVPREET SINGH SEKHON (HUF), VS. THE ACIT, CIRC LE 1(1), CHANDIGARH CHANDIGARH PAN NO. AABHN0563Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TEJ MOHAN SINGH RESPONDENT BY : SMT. RAJINDER KAUR DATE OF HEARING : 07.10.2015 DATE OF PRONOUNCEMENT : 16.11.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 16.09.2013 OF CIT(A) CHANDIGARH RELATING TO ASSESSM ENT YEAR 2010-11. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 24,00,000/- IN RESPEC T OF DEPOSITS IN THE BANK ACCOUNT WHICH IS ARBITRARY AND UNJUSTIFIED . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE HAD DEPOSITED CASH OF RS. 24 LAKHS IN HIS BANK ACCOUNT WITH PUNJA B NATIONAL BANK(PNB), 2 SECTOR 9, CHANDIGARH ON 5.2.2010. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THIS CASH DEPOSIT. IN THIS REGARD, THE ASSESSEE SUBMITTED THA T HE HAD WITHDRAWN RS. 40 LAKHS ON 1.12.2008 FROM HIS BANK ACCOUNT WITH CANAR A BANK, SECTOR 35 B, CHANDIGARH AND RS. 20 LAKHS FROM PNB, SECTOR 9, CHA NDIGARH ON 29.11.2008. THE CONTENTION OF THE ASSESSEE WAS THAT THE ABOVE W ITHDRAWALS WERE MADE FOR SOME POSSIBLE INVESTMENT WHICH DID NOT MATERIALIZE AND SO THE AMOUNT WAS DEPOSITED BACK IN THE BANK ACCOUNT WITH PNB, SECTOR 9, CHANDIGARH. IN THIS REGARD THE ASSESSEE HAD ALSO SUBMITTED AN AFFIDAVI T DATED 22.10.2012 OF ONE SHRI BALJINDER SINGH SHERGILL WITH WHOM HE HAD ENT ERED INTO AN AGREEMENT FOR PURCHASE OF FIVE ACRES OF LAND. THE ASSESSING OFFIC ER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION O F THE ENTIRE AMOUNT OF RS. 24 LAKHS U/S 69A OF THE INCOME-TAX ACT, 1961. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION AND, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI TEJ MO HAN SINGH, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAD DEPOSITED SUM OF RS. 24 LAKHS IN CASH IN HIS ACCOUN T MAINTAINED WITH THE PNB IN SECTOR 9, CHANDIGARH ON 5.2.2010. HE FURTHER POINTE D OUT THAT THE AMOUNT WAS DEPOSITED OUT OF THE WITHDRAWALS MADE IN THE EARLIE R YEARS I.E. RS. 40 LAKHS ON 1.12.2008 (CANARA BANK) AND RS. 20 LAKHS ON 29.11.2 008 (PNB). THE ABOVE WITHDRAWALS WERE MADE FOR PURCHASE OF AGRICULTURAL LAND FROM SHRI BALJINDER SINGH S/O SHRI GURINDNER SINGH, MORANWALI, TEHSIL M ALERKOTLA DISTRICT SANGRUR (PUNJAB). SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE ENTERED INTO VERBAL AGREEMENT WITH THE ABO VE PARTY FOR THE PURCHASE OF 3 FIVE ACRES OF AGRICULTURAL LAND. SHRI BALJINDER SIN GH CONFIRMED THIS FACT WHEN THE ASSESSING OFFICER RECORDED HIS STATEMENT ON OAT H ON 30.10.2012. IN HIS STATEMENT, SHRI BALJINDER SINGH CONFIRMED HAVING EN TERED INTO A VERBAL AGREEMENT WITH THE ASSESSEE ON 15.11.2008 FOR A TOT AL SALE CONSIDERATION OF RS. 1.25 CRORES. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE LAND WAS OWNED BY MANY CO-OWNERS WITHIN T HE FAMILY, THE DEAL COULD NOT BE MATERIALISED AND SO PUT TO AN END. IN HIS AF FIDAVIT, SHRI BALJINDER SINGH SHERGILL HAS CATEGORICALLY STATED IN PARA 4 THAT TH E NEGOTIATIONS WERE GOING ON TO CONVINCE THE FAMILY MEMBERS TO SELL THE SAID LAND, BUT AFTER FURTHER NEGOTIATIONS WHICH TOOK OVER ONE YEAR, THE SAME COULD NOT MATERI ALIZE IN THE END OF JANUARY 2010. IT IS CLAIMED THAT THE ASSESSEE HAD ALL ALONG KEPT THE MONEY AT HIS RESIDENCE AS HE DID NOT KNOW THAT THE PAYMENT FOR T HE SAME HAS TO BE MADE. IT IS ALSO CLAIMED THAT WHEN THE DEAL WAS PUT TO AN END; THEREAFTER, THE ASSESSEE DEPOSITED THE AMOUNT IN THE BANK ACCOUNT ON 5.2.201 0. IT IS ALSO CONTENDED THAT THE CASH HAS NOT BEEN UTILIZED BY THE ASSESSEE DURI NG THE INTERVENING PERIOD. IT IS ALSO STATED THAT THE ASSESSEES SOURCE OF INCOME IS RENTAL INCOME. 5. IT IS OBSERVED THAT THE MAIN CONTENTION OF THE A SSESSEE IS THAT HE HAD PROPOSED TO PURCHASE SOME LAND FORM SHRI BALJINDER SINGH RESIDENT OF MORANWALI, TEHSIL MALERKOTLA DISTRICT SANGRUR (PUNJ AB). THEY HAD VERBALLY AGREED TO PURCHASE FIVE ACRE OF AGRICULTURAL LAND F OR A CONSIDERATION OF RS. 1.25 CRORES. THE ASSESSEE AGREED TO MAKE THE BIANA OF RS. 24 LAKHS TO SHRI BALJINDER SINGH LATEST BY 10.12.2008. IT IS STATED THAT SHRI BALJINDER SINGH INFORMED THE ASSESSEE ON 27.01.2010 THAT HE COULD N OT IMPRESS UPON THE OTHER CO-OWNERS AND HENCE OPTED OUT OF THE TRANSACTION. T HERE IS NO DISPUTE THAT THE ASSESSEE HAD WITHDRAWN RS. 40 LAKHS ON 1.12.2008 A ND RS. 20 LAKHS ON 29.11.2008 FROM HIS BANK ACCOUNT MAINTAINED WITH CA NARA BANK AND PNB RESPECTIVELY. IT IS ALSO CLAIMED THAT THE AMOUNT OF RS. 24 LAKHS OUT OF THE ABOVE 4 WITHDRAWALS WERE NEVER PAID TO SHRI BALJINDER SINGH . FOR ARGUMENT SAKE, IF IT IS HELD THAT THERE WAS NO VERBAL AGREEMENT BETWEEN THE ASSESSEE AND SHRI BALJINDER SINGH SHERGILL, EVEN THEN, NO ADDITION CAN BE MADE U/S 69A OF THE ACT IN THE HANDS OF THE ASSESSEE. IT IS APPARENT FROM THE RECO RD THAT THE AMOUNT OF RS. 24 LAKHS WAS DEPOSITED BY THE ASSESSEE IN CASH AFTER A TIME GAP OF ABOUT 14 MONTHS OUT OF WITHDRAWALS MADE FROM HIS BANK ACCOUNT MAINT AINED WITH CANARA BANKA AND PNB. IN OUR OPINION, THE TIME GAP OF ABOUT 14 MONTHS BETWEEN THE WITHDRAWAL AND DEPOSIT MAY CREATE A DOUBT IN ONES MIND BUT SUCH DOUBT OR SUSPICION CANNOT BE ALLOWED TO TAKE THE PLACE OF PR OOF. THE ASSESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO CONTROVER T THIS CONTENTION OF THE ASSESSEE THAT THE DEPOSIT WAS MADE OUT OF THE WITHD RAWALS MADE EARLIER FROM HIS BANK ACCOUNT. THERE IS NO EVIDENCE ON RECORD TO SHO W THAT ASSESSEE HAD INVESTED THE AMOUNT OF RS. 40 LAKHS WITHDRAWN FROM CANARA B ANK AND PNB IN A WAY OTHER THAN THE DEPOSIT MADE IN QUESTION. IN OUR CON SIDERED OPINION THE TIME GAP ALONE, IS NOT BY ITSELF SUFFICIENT TO CONCLUDE THA T THE MONEY HAD BEEN INVESTED OR UTILIZED BY THE ASSESSEE ELSEWHERE. THE EXPLANAT ION GIVEN BY THE ASSESSEE HAS TO BE ACCEPTED IN ITS ENTIRETY. THERE IS NO MATERI AL ON RECORD TO CONTROVERT THE ABOVE EXPLANATION OF THE ASSESSEE. CONSIDERING THE ENTIRE FACTS OF THE PRESENT CASE, WE ARE OF THE VIEW, THAT THERE IS NO JUSTIFIC ATION IN MAKING THE ADDITION. ACCORDINGLY, WE DELETE THE ADDITION OF RS. 24 LAKHS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY LD. CIT(A). 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED 16 TH NOVEMBER, 2015 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR