Shri Ganga Dhar, Ellenabad V. ITO, Sirsa

ITA 1164/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8273 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 10-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained investment; Period of limitation
• Section: 143(3); 234B; 147; 131; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1164/CHD/2016 ASSESSMENT YEAR: 2005-06 SHRI GANGA DHAR, VS THE ITO, S/O SHRI GYAN CHAND, WARD 2, VPO TALWARA KHURD, SIRSA. TEHSIL ELLENABAD. PAN: AIGPD6118C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SING H RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 28.02.2017 DATE OF PRONOUNCEMENT : 06.03.2017 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) HISSAR DATED 14.09.20 16 FOR ASSESSMENT YEAR 2005-06. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 1 CHALLENGING RE-OPENING OF THE ASSESSME NT UNDER SECTION 147 OF INCOME TAX ACT. THIS GROUND O F APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 2 4. BRIEFLY THE FACTS OF THE CASE ARE THAT NOTICE UN DER SECTION 148 OF THE ACT WAS ISSUED IN THIS CASE ON 29.03.2012. IN RESPONSE TO THIS, INCOME TAX RETURN WAS FILED ON 13.02.2013 DECLARING NIL INCOME. THE ASS ESSING OFFICER ISSUED NOTICES TO THE ASSESSEE FOR COMPLETI ON OF RE-ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER P ASSED THE RE-ASSESSMENT ORDER UNDER SECTION 143(3)/147 OF INCOME TAX ACT ON 22.03.2013. THE ASSESSING OFFICE R ASKED THE ASSESSEE TO PRODUCE DOCUMENTARY EVIDENCE IN RESPONSE TO THE TRANSACTIONS OF CASH DEPOSITS MADE IN THE BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE SUBMITTED COPY OF THE PASS-BOOK. FROM THE PERUSAL OF THE SAVING BANK ACCOUNT NO. 01190002762 REVEALED THAT ASSESSEE HAS MADE THE DEPOSITS/WITHDRAWALS FROM THE BANK DURING THE PERIO D UNDER CONSIDERATION FROM 19.04.2004 TO 15.03.2005. DETAILS OF THE SAME ARE NOTED IN PARA 2 OF THE ASSE SSMENT ORDER. THE ASSESSEE WAS ASKED TO EXPLAIN SOURCE OF THE DEPOSITS AND TO PRODUCE DOCUMENTARY EVIDENCE IN SUP PORT OF THE SAME. THE ASSESSEE WAS ALSO ASKED TO EXPLAI N THE PURPOSE OF WITHDRAWALS MADE DURING THE PERIOD. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT EXPLAIN SOURCE O F THE DEPOSITS AND PURPOSE OF WITHDRAWALS MADE DURING THE PERIOD UNDER CONSIDERATION. ANOTHER OPPORTUNITY WA S GRANTED TO ASSESSEE TO EXPLAIN THE SAME. THE ASSES SEE IN HIS REPLY STATED THAT HE IS AN AGRICULTURIST AND TH ESE DEPOSITS WERE MADE OUT OF HIS AGRICULTURAL INCOME. IN 3 SUPPORT OF DOCUMENTARY EVIDENCE, HE HAS SUBMITTED J-FORM ISSUED BY M/S MAHALUXMI TRADING CO., ELLLENA BAD AND COPIES OF CONTRACT AGREEMENT WITH THE OWNERS OF LAND HOLDERS ( HIS FATHER AND HIS BROTHERS WIFE) WHOM T HEY GIVE THEIR LANDS FOR USE OF AGRICULTURE PURPOSE. REGARDING VERIFICATION OF J-FORMS, SHRI SAT PAL MEH TA, PROPRIETOR OF M/S MAHALUXMI TRADING CO. WAS CALLED FOR TO PROVE THE GENUINENESS OF J-FORMS. SHRI SAT PAL MEHTA WHO IS REAL BROTHER OF THE ASSESSEE, COULD NOT PROV E THE GENUINENESS OF J-FORMS AS HE COULD NOT PRODUCE THE RECORDS/REGISTERS IN THIS REGARD. FURTHER, FROM TH E PERUSAL OF THE RETURN FILED BY ASSESSEE ON 13.02.20 13 FOR THE PERIOD UNDER CONSIDERATION, THE ASSESSEE HAS SH OWN NIL INCOME. HE DID NOT SHOW ANY AGRICULTURE INCO ME IN THE RETURN OF INCOME AND ALSO COULD NOT PRODUCE DOCUMENTARY EVIDENCE REGARDING AGRICULTURE EXPENSES WHICH WERE MADE BY HIM TO EARN AGRICULTURE INCOME. IN THE ABSENCE OF PROPER REPLY/EVIDENCES, THE AMOUNT O F PEAK DEPOSITS/FUNDS AVAILABLE WITH THE ASSESSEE AS ON 27.05.2004 WAS WORKED OUT TO RS. 8,71,000/- AND SAM E WERE TREATED AS UNEXPLAINED INVESTMENT MADE OUT OF UNDISCLOSED SOURCE AND ADDED TO THE INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE ACT. FURTHER, FRO M THE PERUSAL OF THE BANK STATEMENTS OF THE ASSESSEE, IT WAS NOTICED THAT ASSESSEE HAS EARNED INTEREST OF RS. 2, 990/- DURING THE PERIOD UNDER CONSIDERATION WHICH WAS NOT 4 REFLECTED IN THE RETURN OF INCOME, SAME WAS ALSO AD DED TO THE INCOME OF THE ASSESSEE. 5. THE ASSESSEE CHALLENGED THE RE-OPENING OF THE ASSESSMENT BEFORE LD. CIT(APPEALS) AS WELL AS BOTH THE ABOVE ADDITIONS. THE LD. CIT(APPEALS), HOWEVER, DISMISSED APPEAL OF THE ASSESSEE. 6. THE ASSESSEE ON GROUND NO. 2, CHALLENGED THE VALIDITY OF RE-ASSESSMENT ORDER ON THE REASON THAT NO NOTICE UNDER SECTION 143(2) OF THE ACT HAVE BEEN IS SUED AND SERVED UPON ASSESSEE SUBSEQUENT TO THE FILING O F THE RETURN ACCEPTED BY THE ASSESSING OFFICER, THEREFORE , ASSESSMENT SO MADE UNDER SECTION 147/143(3) IS BAD IN LAW AND WHOLLY UNSUSTAINABLE. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB-105 WHICH IS REASONS FOR RE - OPENING OF THE ASSESSMENT DATED 28.03.2012. PB-106 IS REPLY OF THE ASSESSEE BEFORE LD. CIT(APPEALS) IN WH ICH SPECIFIC POINT WAS RAISED THAT ASSESSMENT UNDER SEC TION 147/143(3) OF THE ACT HAVE BEEN FRAMED WITHOUT ISS UE OF NOTICE UNDER SECTION 143(2) OF THE ACT, THEREFORE, RE- ASSESSMENT ORDER IS BAD IN LAW. THE LD. COUNSEL FO R THE ASSESSEE RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS CEBON INDI A LTD. 347 ITR 583 IN WHICH IT WAS HELD THAT THERE IS NO EVIDENCE TO SHOW THAT NOTICE UNDER SECTION 143(2) H AD BEEN SERVED UPON ASSESSEE BEFORE 30.11.1997 I.E. WI THIN ONE YEAR OF FILING OF THE RETURN AND ACCORDINGLY 5 ASSESSMENT WAS VOID. THE TRIBUNAL UPHELD THE FINDING OF THE LD. CIT(APPEALS) AND HON'BLE HIGH COURT DISM ISSED DEPARTMENTAL APPEAL. HE HAS ALSO RELIED UPON DECIS ION OF THE KERALA HIGH COURT IN THE CASE OF TRAVANCORE DIAGNOSTICS (P) LTD. VS ACIT 390 ITR 167 IN WHICH I T WAS HELD THAT, IN CASE OF THE PROCEEDINGS INITIATED UNDER SECTION 143(3) READ WITH SECTION 147, REQUIREMENT O F ISSUE OF NOTICE UNDER SECTION 143(2) IS MANDATORY AND SEC TION 292BB DOES NOT IN ANY MANNER GRANT ANY PRIVILEGE TO ASSESSING OFFICER IN DISPENSING WITH THE ISSUANCE O F SUCH A NOTICE. ON THE OTHER HAND, LD. DR SUBMITTED THAT THERE IS NO NEED TO ISSUE NOTICE UNDER SECTION 143( 2) WHEN ASSESSMENT IS FRAMED UNDER SECTION 148. 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, I DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSE SSEE. THERE IS NO QUARREL WITH THE LEGAL PROPOSITION SUBM ITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT ISSUE OF N OTICE UNDER SECTION 143(2) OF THE ACT IS MANDATORY EVEN F OR PASSING RE-ASSESSMENT ORDER UNDER SECTION 147 OF TH E ACT. HOWEVER, IN THE PRESENT CASE, FACTS ARE TOTAL LY DIFFERENT. IN THIS CASE, ADMITTEDLY NOTICE UNDER S ECTION 148 WAS ISSUED ON 29.03.2012 AND ASSESSEE WAS REQUI RED TO FILE RETURN OF INCOME IN THE PRESCRIBED PERIOD I .E. WITHIN 30 DAYS FROM THE SERVICE OF THE NOTICE. HOW EVER, THE ASSESSEE FILED RETURN OF INCOME BELATEDLY ON 13.02.2013 AT THE FAG END OF COMPLETION OF RE-ASSES SMENT PROCEEDINGS. THE ASSESSING OFFICER PASSED THE 6 ASSESSMENT ORDER ON 22.03.2013. THE PROVISO TO SEC TION 143(2) PROVIDES THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED ON THE ASSESSEE AFTER EXPIRY OF TWELVE MONTH S FROM THE END OF THE MONTH IN WHICH RETURN IS FURNISHED. SINCE THE ASSESSEE DID NOT FILE VALID RETURN OF INCOME WI THIN THE STIPULATED PERIOD AS DIRECTED IN THE NOTICE UNDER S ECTION 148, THEREFORE, THERE IS NO QUESTION OF ISSUING ANY NOTICE UNDER SECTION 143(2) OF INCOME TAX ACT TO THE ASSES SEE. THE PROVISO TO SECTION 143(2) DEALS WITH THE PERIOD OF SERVICE OF NOTICE FROM THE END OF THE MONTH IN WHIC H THE RETURN IS FURNISHED. SINCE NO VALID RETURN IS FILED , THEREFORE, THERE IS NO QUESTION OF COMPLIANCE OF PR OVISO TO SECTION 143(2) OF THE ACT. THE ASSESSEE FILED R ETURN OF INCOME BELATEDLY AT THE FAG END OF COMPLETION OF RE - ASSESSMENT PROCEEDINGS ON 13.02.2013. THEREFORE, T HERE IS NO QUESTION OF SERVICE OF NOTICE UPON ASSESSEE U NDER SECTION 143(2) OF THE ACT WHEN ASSESSMENT WAS COMPL ETED IN MARCH,2013 ITSELF. IN THIS VIEW OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE JUDGEMENTS RELIE D UPON BY LD. COUNSEL FOR THE ASSESSEE WOULD NOT SUPP ORT THE CASE OF THE ASSESSEE BECAUSE IN THESE CASES, RE TURNS WERE FILED WITHIN THE PERIOD OF LIMITATION. IN THI S VIEW OF THE MATTER, THIS GROUND OF APPEAL OF THE ASSESSEE I S DISMISSED. 8. ON GROUND NO. 3, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 8,71,000/- UNDER SECTION 69 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE IS 7 AGRICULTURIST AND HAD TAKEN AGRICULTURAL LAND ON CO NTRACT BASIS FROM HIS FATHER AND FOUR BROTHERS IN VILLAGE TALWARA, ELLENABAD NEAR ABOUT 35 ACRES AND 13 ACRES FROM SMT. JANAK KUMARI W/O SHRI SAT PAL MEHTA IN FINANCIAL YEAR 2005-06. THE ASSESSEE RECEIVED AGRICULTURE PRODUCE NEAR ABOUT 11 TO 13 LACS IN A Y EAR. SOME OF THE J-FORMS HAVE BEEN PRODUCED BEFORE AUTHORITIES BELOW AND ALL THE SALE PROCEEDS OF AGRI CULTURE WERE DEPOSITED IN HIS SAVING BANK ACCOUNT. THE WITHDRAWALS WERE ALSO MADE FROM THE SAME BANK ACCOU NT FOR UTILIZATION FOR PAYMENT OF CONTRACT, SEEDS, PES TICIDES AND AGRICULTURE EQUIPMENTS AND ALSO FOR HOUSEHOLD WITHDRAWALS. THE ASSESSEE HAS NO OTHER TAXABLE INC OME. THE ASSESSEE ALSO PRODUCED COPY OF THE JAMABANDI OF THE LAND TO SHOW THE ABOVE LAND IN THE NAME OF THE OWNE RS. THE ASSESSEE FILED COPY OF THE AGREEMENT BETWEEN S/ SHRI SAT PAL, DHARAM PAL, JOGINDER SINGH, RAMESH KUMAR, GIAN CHAND AND JANAK KUMARI WITH THE ASSESSEE FOR AGRICULTURAL LAND MEASURING ABOUT 48 ACRES ON CONTR ACT BASIS FOR CULTIVATION. COPY OF THE AGREEMENT IS FI LED AT PAGE 21-22 OF PAPER BOOK. PB-23 IS COPY OF THE CONFIRMATION DIRECTLY OBTAINED BY THE ASSESSING OFF ICER FROM M/S MAHALUXMI TRADING CO. CONFIRMING SALE OF AGRICULTURE PRODUCE TO THEM BY THE ASSESSEE. PB-24 TO 28 ARE COPY OF REGISTER OF COMMON AGENT SHOWING SAL E OF AGRICULTURE PRODUCE. PB-29 TO 30 ARE COPIES OF THE JAMABANDI I.E. FORM NO. 10 SHOWING PROOF OF OWNERSH IP 8 OF AGRICULTURAL LAND. PB-31 TO 34 IS COPY OF THE B ANK STATEMENT AND PB-35 TO 47 ARE COPIES OF J-FORMS SHO WING SALE OF AGRICULTURE PRODUCE. THE LD. COUNSEL FOR T HE ASSESSEE FURTHER SUBMITTED THAT ASSESSING OFFICER RECORDED STATEMENT OF SHRI SAT PAL MEHTA AT ASSESSM ENT STAGE, COPY OF WHICH IS FILED AT PAGE 51 OF THE PAP ER BOOK IN WHICH HE HAS CONFIRMED THAT ASSESSEE HAS SOLD AGRICULTURE PRODUCE OF ABOUT 12-13 LACS AGAINST WHI CH FORM-J HAVE BEEN ISSUED. SINCE FIRM WAS CLOSED EAR LIER, THEREFORE, RECORDS WERE NOT PRODUCED. PB-53 IS COP Y OF THE STATEMENT OF SHRI OM PARKASH, STAMP VENDOR WHIC H WERE RECORDED BY ASSESSING OFFICER IN WHICH HE HAS CONFIRMED SELLING STAMP PAPERS TO THE OWNER OF THE LAND SHRI GIAN CHAND ON WHICH AGREEMENT FOR CULTIVATION WAS RECORDED (PB- -21). THE LD. COUNSEL FOR THE ASSESS EE, THEREFORE, SUBMITTED THAT ASSESSEE PROVED THE EARNI NG OF AGRICULTURE PRODUCE THEREFORE, NO ADVERSE INFERENCE SHOULD BE DRAWN AGAINST THE ASSESSEE. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELO W. 9. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSEE PRODU CED COPY OF THE AGREEMENT BETWEEN THE OWNERS OF THE AGRICULTURE LAND AND THE ASSESSEE THROUGH WHICH ENT IRE AGRICULTURAL LAND WAS GIVEN TO THE ASSESSEE IN ASSE SSMENT YEAR UNDER APPEAL FOR CULTIVATION. THE ASSESSING O FFICER VERIFIED THE STAMP PAPER ON WHICH AGREEMENT WAS EXECUTED FROM THE STAMP VENDOR SHRI OM PARKASH. SH RI 9 OM PARKASH WAS EXAMINED UNDER SECTION 131 OF THE AC T AT ASSESSMENT STAGE IN WHICH HE HAS CONFIRMED OF SE LLING THE STAMP PAPER TO ONE OF THE OWNER OF THE LAND SHR I GIAN CHAND, THEREFORE, GENUINENESS OF THE AGREEMENT ENTERED INTO BETWEEN THE OWNERS OF THE LAND AND ASS ESSEE HAVE BEEN ESTABLISHED AND PROVED. THE ASSESSING OF FICER ALSO CALLED FOR CONFIRMATION FROM M/S MAHALUXMI TRA DING CO. DIRECTLY THROUGH SUMMONS AND M/S MAHALUXMI TRADING CO. VIDE THEIR LETTER DATED 15.03.2013 IN RESPONSE TO THE SUMMONS ISSUED BY THE ASSESSING OFF ICER DIRECTLY CONFIRMED TO THE ASSESSING OFFICER THAT AS SESSEE HAS SOLD AGRICULTURE PRODUCE TO THEM AGAINST WHICH J-FORMS HAVE BEEN ISSUED. THE ASSESSING OFFICER AL SO EXAMINED SHRI SAT PAL MEHTA, OWNER OF M/S MAHALUXMI TRADING CO. AT ASSESSMENT STAGE AND IN HIS STATEMEN T, HE HAS CONFIRMED THAT HIS FIRM HAS CLOSED IN THE YEAR 2009-10. THEREFORE, HE CANNOT PRODUCE THE RECORD A T THE STAGE, HOWEVER, HE HAS CONFIRMED THAT ASSESSEE HAS SOLD AGRICULTURE PRODUCE TO HIS FIRM AGAINST WHICH J-FOR MS HAVE BEEN ISSUED. THE CONFIRMATION BY M/S MAHALUXM I TRADING CO. AND ITS OWNER IN THE STATEMENT RECORDED UNDER SECTION 131 IS ALSO SUPPORTED BY THE COPY OF THE REGISTER OF AGENTS SHOWING SALE OF AGRICULTURE PROD UCE AND COPIES OF J-FORMS ISSUED BY THEM. THE OWNERS W ERE HAVING TITLE OVER THE AGRICULTURE LAND TO GIVE THRO UGH CONTRACT IS ALSO ESTABLISHED THROUGH JAMABANDI WHIC H IS IN THEIR NAMES. THESE EVIDENCES ARE SUFFICIENT TO HOLD 10 THAT ASSESSEE ESTABLISHED EARNING OF AGRICULTURE IN COME WHICH WERE DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER HAS NOT BROUGHT AN Y EVIDENCE ON RECORD TO DISBELIEVE THE EVIDENCES FURN ISHED BY THE ASSESSEE ON RECORD OF THE REVENUE. 10. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND EVIDENCES ON RECORD, I AM OF THE VIEW ASSE SSEE HAS BEEN ABLE TO PROVE EARNING OF GENUINE AGRICULTU RE INCOME WHICH WERE ONLY SOURCE OF INCOME FOR ASSESSE E WHICH HAVE BEEN DEPOSITED IN THE BANK ACCOUNT OF TH E ASSESSEE. THEREFORE, THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION OF RS. 8,71,000/- AGAINST THE ASSESSEE ON ACCOUNT OF PEAK OF INVESTMENT IN THE BANK ACCOUNT. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 8,71,000/-. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 11. ON GROUND NO. 4, ASSESSEE CHALLENGED THE ADDITI ON OF 2990/- AS BANK INTEREST ON BANK DEPOSIT. THIS I NCOME IS NOT SHOWN IN THE RETURN OF INCOME DESPITE ASSESS EE EARNED IT DURING THE YEAR UNDER CONSIDERATION. HOW EVER, I HAVE DELETED THE SUBSTANTIAL ADDITION OF RS. 8,71,0 00/- THEREFORE, NO TAXABLE INCOME IS LEFT FOR CONSIDERAT ION. ACCORDINGLY, THE ADDITION MADE BY ASSESSING OFFICER OF RS. 2990/- IS CONFIRMED IN PRINCIPLE. HOWEVER, SIN CE NO TAXABLE INCOME IS LEFT, THEREFORE, ASSESSING 11 OFFICER WILL NOT MAKE IT TAXABLE IN THE COMPUTATION OF INCOME BECAUSE THE ADDITION WOULD BE BELOW TAXABLE INCOME. THIS GROUND IS ACCORDINGLY, DISPOSED OFF I N TERMS ABOVE. 12. GROUND NO. 5 IS CHARGING OF INTEREST UNDER SECT ION 234A AND 234B OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE AND NEEDS NO ADJUDICATION. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 6 TH, MARCH,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH