Shri Rachan Singh, Ropar V. ITO-Ward-2(4), Ropar

ITA 109/CHANDI/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7846 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 147; 69; 43

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “एकल सद यीय’, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘SMC’ CHANDIGARH ीमती दवा संह, या#यक सद य BEFORE: SMT. DIVA SINGH, JM आयकर अपील सं./ ITA No. 109/CHD/2020 नधा रण वष / Assessment Year : 2009-10 Shri Rachan Singh, House No. 86/A, Bann Majra, Kurali (Ropar). बनाम VS The ITO, Ward 2(4), Ropar. थायी लेखा सं./PAN No: CYRPS0336N अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Rachit Goyal, CA राज व क! ओर से/ Revenue by : Dr. Ranjit Kaur, Sr.DR स ु नवाई क! तार&ख/Date of Hearing : 12.05.2022 उदघोषणा क! तार&ख/Date of Pronouncement : 13.07.2022 आदेश/ORDER Th e p r e s e n t a p p e a l h a s b e e n f i l e d b y t h e a s s e s s e e w h e r e i n t h e c o r r e c t n e s s o f t h e o r d e r d a t e d 1 0 . 1 2 . 2 01 9 o f C I T ( A ) - 1 C h a n d i g a r h p e r t a i n i n g t o 2 0 0 9 - 1 0 a s s e s s m e nt y e a r i s a s s a i l e d o n t h e f o l l o w i n g g r o u n d s : 1. The impugned order in the case cited as subject is against the facts and law. 2. On the facts and circumstances of the ease the CIT(A) has erred in confirming the addition of Rs. 10,53,000/- made by the Id AO u/s 69 of the Act. 3. The addition made by Id AO is erroneous as reasons for opening of the case u/s 147 of the Act has ceased to survive as no addition is made on the grounds which formed the subject matter for opening of case u/s 147 of the Act. ITA/109/CHD/2020 A.Y. 2009-10 Page 2 of 7 4. The addition of Rs. 10,53,000/- is merely due to difference in the value of purchase consideration and the cash available with the assessee in his bank account at the time of purchase of land, despite the fact that the assessee had sufficient funds in his bank account as last installment of the agricultural land sold was received on 19.06.2008 amounting Rs. 57,50,000/- and the assessee had made payment of Rs. 10,00,000/- to Sh. Jasbir Singh vide cheque no. 027874. 5. The CIT(A) has further made an enhancement of Rs. 10,00,000/- in the total income determined by Id AO on account of unexplained investment u/s 69 the Act. The aforementioned amount of Rs. 10,00,000/- was paid to the Smt. Gurdial Kaur (mother of the seller, Sh. Jaswinder Singh) vide cheque no. 027872 which got cleared by a delay of one day i.e. 27.06.2008 with the consent of the seller himself in lieu of the agricultural land purchased by the assessee. 6. Due to erroneous of addition made by Id AO and enhancement made by CIT(A) the tax liability of Rs. 5,99,505/- arises on the assessee. 7. The Id CIT(A) has also erred in initiating penalty proceedings u/s 271(l)(c) of the Income Tax Act, 1961. 8. The assessee craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of appeal. 2 . B o t h t h e p a rt ie s ha v e be e n he a r d . 3 . On a c o ns i de r a t io n o f t he p e c u li a r f a ct s a n d c i r c u ms t a n c e s o f t he p re s e n t c a s e , g ro u n d N o . 3 ra is e d b y t he a s s e s se e i s d is mis s e d . G ro u n d N os . 1 & 8 a r e ge ne ra l i n n a t u r e a n d r e q u ire n o s p e c if i c a d ju dic a t io n. G r o u n d N o . 7 is c o ns e q ue nt i a l i n n a t u r e . 4 . V i de g r o u n d N o . 6 , t h e a s s e s s e e a s s a i ls t he e nh an c e me nt ma d e by t h e C I T( A ) a n d b y t h e re ma i ni ng g r o u nd s , t he a s s e s s e e h a s a s s a i l e d t he a d d i t i o n ma de b y t he A O w hic h h a s b e e n s u s t a i n e d i n a p pe a l b y t he CI T( A ) . ITA/109/CHD/2020 A.Y. 2009-10 Page 3 of 7 5 . Th e re le v a n t f a c t s o f t he c a s e a r e t ha t a s p e r AI R i nf o r ma t i o n r e c e iv e d b y t he A O it w a s n o t i c e d t h a t t he a s s e ss e e h a d d e p o s i te d c as h o f R s . 80 la c s in h i s SB A c c o u nt ma in t a i n e d w i t h S t a t e B a n k o f P a t i a la , Ja k h w a l i. A c c o r di n g l y , n o t i c e w a s i s s u e d t o t h e a s s e s se e re q u i ri n g h i m t o f i le hi s r et u r n a s no r e t u r n o f i n c o me ha d be e n f i le d. I t i s s e e n t hat the no t ic e s s e nt t o t he a s s e s s e e we re n o t r e s p o n d e d t o . U l t ima te l y a s pe r r e c o r d, i t is s e e n t h a t s o me c o u ns e l d id a ppe a r o n b e h a lf o f t he a s s e s se e . Th e a s s e s s e e a s pe r re co r d e x pl a i ne d t he s o u r c e f r o m s a l e o f l a nd . Th e c l a im wa s s up p o r t e d b y c o py o f Ag re e me nt d a t e d 15 . 0 4. 2 0 08 The A O a c c e pt e d t he e x p l a nat io n i n p a r t , h o w e ve r , t he c lai m o f fu r t he r a pp li c a t io n o f t h e s al e p r o c e e d s b y t h e a s s e s s e e w a s r e je c te d t o t h e e x te n t o f R s . 10 ,5 3 , 00 0 /- . Th e A O no t ic e d t ha t t he s a le o f a g r i c u lt u r a l l a nd fo r t he a mo u nt w a s n o t f o u n d re c o r de d . A s a re s u l t o f t h i s fa c t , a d d it io n o f R s . 1 0 ,5 3 ,0 0 0 /- a s u n e x p l a ine d in ve s t ment in t he p u r c ha s e o f t h e la n d o n 26 . 06 . 2 00 8 . A d d it io n w a s als o ma d e f o r i nc o me o f b a nk in t e re s t o f R s . 3 9 43 /- . 6 . A g g ri e v e d b y t h is , t h e a s se s se e ca me in a p pe a l be fo re t he C I T( A ). A p e ru s a l o f t h e s u b mis s i o ns a d v a n c e d as ex t ra c te d i n t h e o r de r s h o w s t h a t t h e a s se s se e e x p l a i ne d t h a t t he A O w hile ma k i ng t he a d d it io n i g n o r e d p a y me nt s ma d e fr o m an o the r B a nk a c c o u n t . Su b mi s s i o ns t o t h is e x t e nt ha v e be e n e x t ra c te d i n p a g e 8 o f t he imp u g ne d o r de r , “failed to consider/notice that ITA/109/CHD/2020 A.Y. 2009-10 Page 4 of 7 there is another payment of cheque of Rs. 10 lacs from the bank account No. 55110180046 of SBOP, Jakhwali branch of the assessee which was cleared as on 27th June 2008 through the bearer cheque was issued to the vendors of the property at the time of registry only i.e. 26th June 2008, but got delayed by one day in bank clearance”. Pe r u s a l o f p a g e 9 o f t he i m p u g n e d o rde r f u r t h e r s ho ws t ha t b e f o re t he C I T(A ) , it w a s a l s o su bmi t t e d t h a t , “The copy of bank statement alongwith the affidavit from assessee, substantiating and affirming the same is placed on record at page No.64 to 69”. I t ha s a l s o b e e n a rg u e d t h a t t he a s s e s se e i s a n a g ri c u l t u r i s t a nd e a r ni ng a g r i cu lt u re i n c o me o n ly a nd t he fu nd s w e re i nv e s te d f o r p u r c h a s i n g a g ri c u lt u r a l l a nd i n o r de r t o c o nt i n u e h is ag r ic u l t u ra l a c t iv it ie s . I t h as b e e n s t a te d t h a t “cash surplus from agricultural activities where the assessee could invest reasonably for purchase of agricultural land to continue his agricultural activities to earn agriculture income” . Th e fre s h e v id e nc e s fi le d , i t is s e e n , we re r e ma n d e d t o t he A O b y t he C I T( A ) w h o o b je c t e d t o t he e v i de n ce o n t h e g ro u n d th a t t h e p a y me nt o f R s . 1 0 l a c s ma d e t o Sh r i Ja s v e e r Si n g h w h e re a s t he l and w a s pu r c h a se d fr o m Sh r i Ja s w i n de r S in g h f o r Sh r i Ja s v e e r S in g h w a s n o t a c c ep t a b le . Th e a s s e s s e e s ub mi t t e d t h a t t he p a y me n t w a s ma de o n t he i ns t r u c t io ns o f S hr i Ja s wi n de r S in g h . S in c e S hr i Ja s v e e r Si n g h h a d p a s s e d a w a y , c o n fi r ma t i o n fr o m h i m c o u ld no t b e fi le d . ITA/109/CHD/2020 A.Y. 2009-10 Page 5 of 7 7 . Pa r a 6 .2 . 1 a t p a g e 1 6 w o u ld sh o w t ha t t h e CI T( A ) ha s d is mi s s e d t h e e xp l a na t io n in re ga r d t o t he c he q ue pa y me n t o f R s .1 0 la c s ho l d i ng t h a t no e v i de nc e fr o m S hr i Ja s v ee r S i ng h’ s f a mil y me mb e r s c o u ld be f ile d ( pa g e 1 7) a nd a d d it io n b y w a y o f e n ha nc e me n t o f R s .1 0 l a c s w as ma d e h o l di n g t ha t w h y a p a y me n t o f R s .1 0 l a c s w a s ma d e t o S mt . G u r d ia l K a u r. The e x pl a n a t io n o f t he a s se s se e e x t r ac t e d in t he i mp u g ne d o r de r at p a g e 1 6 n a me l y , “ld. AR vide letter dated 25.11.2019 has merely submitted that she is mother of Shri Jasvir Singh/Shri Jasvinder Singh. Again no evidence has been provided (i) that she is mother of sellers and (ii) more importantly no information has been provided that by what arrangement the payment was made to Ms.Gurdial Kaur” w a s di s c a r de d . 8 . Th e l d. A R ha s r e l ie d u p o n t he su bmi s s i o ns a s a dv a n c e d b e f o re t he a u t h o rit ie s be lo w . 9 . Th e l d. S r .D R r e l ie s u p o n t he i mpu g n e d o r de r. 1 0 . I n t he fa c t s a s a v a i l a b le o n re co r d i t i s s e e n th a t t he a s s e s se e w a s re q u ir e d t o e x p la in t h e de po s i t o f R s .80 l a c s i n h is b a n k a c c o u n t . Th e e x pl a n a t io n o f t he a s s e s se e w a s f o u n d a c c e p t a b le b y t he A O t a k in g n o te o f t h e a g ri c u l t ur al l a nd s o ld . Th e r e is n o d i s p ut e o n t he q u a nt it y o f t he l a nd s o ld o r t he p r ice f o r w hi c h i t wa s s o ld . H o w e v e r , t he A O q u e s t i o ne d t he i nv e s t me nt i n a g r ic u l t u r a l l a n d ma de b y t he a s s e s s ee ITA/109/CHD/2020 A.Y. 2009-10 Page 6 of 7 a mo u nt i n g t o R s .4 5 ,8 8 , 00 0 /- w h i c h i nc lu de d th e pu r ch a se p r ic e o f t he l a nd pl u s t he s t a mp d u t y t a x e s t he re o n. The e x pl a n a t io n t o t he e x t e nt o f R s . 10 , 53 , 0 00 /- w a s fo und t o b e w a nt in g . C o n s id e r i ng e x p l a na t io n o ff e re d b y t he as s e s s e e b e f o re t he CI T( A ) b y w a y o f f re sh e v i de nc e s wh ic h ha v e be e n c o nf r o nt e d t o t he A O , r e a s o n s fo r d i s c a r di n g t h e e xp la n a t i o n o f t h e a s s e s s e e se t o u t i n pa g e 16 - 17 o f t h e i mp u g ne d o r d e r , I fi n d c a n n o t b e u phe l d. 1 0 .1 On g o i n g t h r o u g h t h e s a me , I am o f t he v i e w t ha t i n t he p e c u l ia r f a c t s o f t h e p re se nt c a se i n t he fa c e o f the a s se s se e ' s p le a d in g t h a t Smt . Gu r di a l K a u r w a s mo t h e r o f Sh r i Ja s v e e r S in g h w hi c h r e ma i ns u n r e b u t t e d o n r e c o r d a nd t h e f ac t t ha t l a t e Sh r i Ja s v e e r S in g h a l s o h a d i n t e re s t in t he l and be i ng p u r c ha s e d a n d he nc e w a s pa id . Thi s fa c t a l s o r e ma i ns u n r e b u t te d o n re c o r d , t h e a v a il a bi li t y o f fu nd s d oubt e d by t he A O s t a n d s e x p l a in e d by w a y o f c he q ue p a y me n t s ma d e b y t he a s s e s se e f r o m a n o t h e r ba n k a c c o u nt N o . 5 5 1 1 01 8 0 04 6 o f SB OP , Ja k hw a l i br a n c h w hi c h i ni t i a ll y h a d r e ma i ne d u nn o t ic e d . Th is f a c t a l s o re ma i ns u nr e b u t te d o n r e c o r d . I fi nd t h at in t he p e c u l ia r f a c t s a n d c i r c u ms t a n c e s , t he s u s t a in in g o f t he a d d it io n o r t he f u r t h e r e nh a nc e me n t o f t he a d d it io n is u n w a r r a nt e d o n f a c t s . C o n s i d e r in g t he re c or d a nd t he e x pl a n a t io ns , t he a d d it io n ma de i s d ire c te d t o be de le t e d a n d t h e e nh a nc e me nt c h a ll e n ge d v ide g r o u nd N o . 6 a ls o s et a s i de . ITA/109/CHD/2020 A.Y. 2009-10 Page 7 of 7 A c c o r d i ng ly , t he a p p e a l o f t h e a s s e s se e is a l l o w e d . S a id o r de r w a s p r o no u nc e d in t h e O pe n C o u rt a t t h e t i me o f he ar in g it se l f. 1 1 . I n t he re s u l t , th e a p pe a l o f the a s se s se e is a ll o w e d . O r d e r p r o n o u n c e d i n t h e O p e n C o u r t o n 1 3 t h J u l y , 2 0 2 2 . S d / - ( दवा संह ) (DIVA SINGH) या#यक सद य/Judicial Member “प ू नम” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. आयकर आयु猴 (अपील)/ The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar