Shri Diwan Chand, Kullu V. ITO, Kullu

ITA 119/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1246 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANKUR ALYA
• Assessee Lawyers: R R THAKUR
• Keywords: Income from undisclosed sources
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.119/CHD/2017 (ASSESSMENT YEAR : 2011-12) SHRI DIWAN CHAND, VS. THE INCOME TAX OFFICER, S/O SHRI HEM SINGH, KULLU. V. BATAHAR P.O. HARIPUR, DISTT. KULLU (H.P.) PAN: ASGPC6745A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.R. THAKUR, ADV. RESPONDENT BY : SHRI ANKUR ALYA, JCIT DR DATE OF HEARING : 08.08.2018 DATE OF PRONOUNCEMENT : 06.09.2018 ORDER PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S), PALAMPUR DATED 10.10.2016 RELATING TO ASSESSMENT YE AR 2011-12. 2. THE BRIEF FACTS RELATING TO THE CASE ARE THAT TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF TRACKING AND ADVENTUR E GUIDANCE. DURING THE IMPUGNED YEAR IT WAS FOUND THA T THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS.18,50,0 00/- IN HIS SAVING BANK ACCOUNT. ENQUIRY LETTER IN THIS REG ARD WAS ISSUED TO THE ASSESSEE, BUT NO COMPLIANCE WAS MADE. ACCORDINGLY, SINCE THE SOURCE OF CASH DEPOSITED REM AINED UNEXPLAINED, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). ITA NO.119/CHD/2017 A.Y.2011-12 2 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASK ED TO EXPLAIN THE SOURCE OF CASH DEPOSITED, TO WHICH THE ASSESSEE CONTENTED THAT THE SAME WAS AN ACCOUNT OF LOANS/ AD VANCES, GIVEN BY HIS FATHER TO HIS RELATIVES, WHICH HAD BEE N RETURNED DURING THE YEAR AND ALSO OUT OF THE AGRICULTURE INC OME OF HIS FATHER. THE A.O AFTER MAKING DUE INQUIRES FOUND THA T OUT OF THE TOTAL DEPOSIT OF RS.18,50,000/- IN THE SAVING B ANK A/C OF THE ASSESSEE IN THE STATE BANK OF INDIA, HARIPUR , RS.5,90,000 COULD BE ATTRIBUTED TO LOANS RETURNED B Y RELATIVES AND RS.9,20,000/- TO THE AGRICULTURE INCO ME EARNED DURING THE YEAR FROM THE SALE OF CROP. ACCORDINGLY HE ACCEPTED THE EXPLANATION OF THE ASSESSEE VIS--VIS DEPOSITS TOTALING RS.15,10,000/-. THE BALANCE CASH DEPOSIT O F RS.3,40,000/- WAS TREATED AS UNEXPLAINED BY A.O AND ADDITION MADE ON ACCOUNT OF SAME TO THE INCOME OF T HE ASSESSEE. THE A.O. ALSO FOUND THAT THERE WAS CASH D EPOSIT OF RS.1,50,000/- IN THE SAVING BANK A/C MAINTAINED BY THE ASSESSEE WITH STATE BANK OF PATIALA, PATLIKUHAL WHI CH ALSO REMAINED UNEXPLAINED. ADDITION OF THE SAME WAS ALSO MADE TO THE INCOME OF THE ASSESSEE. THE A.O. FURTHER NOT ED THAT ASSESSEE HAD RETURNED AGRICULTURE INCOME OF RS.1,80 ,000/- IN HIS RETURN OF INCOME BUT WAS NEITHER THE OWNER O F ANY AGRICULTURAL LAND, NOR HAD DEMONSTRATED THE SAME TO THE A.O. THEREFORE THE AGRICULTURE INCOME RETURNED BY T HE ASSESSEE OF RS.1,80,000/- WAS TREATED AS INCOME EAR NED FROM UNDISCLOSED SOURCES AND ADDED TO THE INCOME OF THE ASSESSEE. ITA NO.119/CHD/2017 A.Y.2011-12 3 4. AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEA L BEFORE THE LD. CIT(APPEALS), CHALLENGING ALL THE AB OVE ADDITIONS MADE BY THE A.O. THE LD.CIT(APPEALS) DELE TED THE ADDITION MADE ON ACCOUNT OF CASH FOUND DEPOSITED IN SAVING BANK A/C OF THE ASSESSEE WITH STATE BANK OF INDIA, HARIPUR TO THE EXTENT OF RS.1,50,000/-, ON FINDING THAT THE SAID AMOUNT HAD NOT BEEN ACCOUNTED FOR BY THE A.O. WHILE GIVING CREDIT TO THE ADVANCE RETURNED BY THE RELATIVES OF THE ASSESSEES FATHER, AS SOURCE OF CASH DEPOSITED IN T HE SAID BANK A/C OF THE ASSESSEE. ACCORDINGLY, THE BALANCE OF RS.1,90,000/-, REMAINING UNEXPLAINED, WAS UPHELD BY THE CIT(APPEALS). THE CIT(APPEALS) ALSO UPHELD THE ADDI TION MADE ON ACCOUNT OF CASH DEPOSITED IN THE SAVING BAN K A/C OF THE ASSESSEE IN STATE BANK OF PATIALA, PATLIKUHA L OF RS.1,50,000/- WHICH THE ASSESSEE HAD CONTENDED WAS FROM AGRICULTURAL INCOME EARNED FROM SALE OF CROP, IN T HE ABSENCE OF ANY EVIDENCE AND DETAIL OF THE SAME. THE ADDITIO N MADE BY THE A.O. TREATING THE AGRICULTURAL INCOME RETURNED BY THE ASSESSEE AS INCOME FROM OTHER SOURCES WAS ALSO UPHE LD HOLDING THAT THE EVIDENCE SUBMITTED BY THE ASSESSE E OF OWNERSHIP OF AGRICULTURE LAND SHOWED HIS FATHER AS OWNER OF THE LAND AND PERTAINED TO THE ASSESSMENT YEAR 2003- 04 AND THAT THE AGRICULTURE INCOME SHOWN TO HAVE BEEN EARN ED HAD ALREADY BEEN GIVEN CREDIT OF AS CASH DEPOSITED IN THE BANK A/C OF THE ASSESSEE AND IN ANY CASE IT WAS THE AGRI CULTURAL INCOME OF THE FATHER OF THE ASSESSEE AND NOT THE AS SESSEE. ITA NO.119/CHD/2017 A.Y.2011-12 4 5. AGGRIEVED BY THE SAME THE ASSESSEE HAS COME UP I N APPEAL BEFORE US RAISING THE FOLLOWING EFFECTIVE GR OUNDS: 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS WRONGLY CONFIRMED THE ADDITION OF RS.1,90,000/- WHICH IS LIKELY TO BE DELETED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS WRONGLY CONFIRMED THE ADDITION OF RS.1,50,000/- WHICH IS LIKELY TO BE DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS WRONGLY CONFIRMED THE ADDITION OF RS.1.80,000/- ADDED BY THE ASSESSING OFFICER AS INCOME FROM UNDISCLOSED SOURCES. THE ADDITION IS LIKELY TO BE DELETED. 6. TAKING UP ALL THE GROUNDS TOGETHER BEFORE US, LD . COUNSEL FOR THE ASSESSEE CONTENDED THAT THE CASH AV AILABLE WITH IT DURING THE YEAR AMOUNTED TO RS. 19,77,110 A S UNDER: (1)AMOUNT OF LOAN RETURNED ACCEPTED BY CIT(A) ALSO 7,40,000 (2) AGRICULTURE CONTRACT AMOUNT 9,20,000 (3) INCOME RETURNED 1,37,110 (4) AGRICULTURE INCOME 1,80,000 TOTAL 19,77,110 7. THE ASSESSEE CONTENDED THAT OUT OF THE ABOVE AMO UNT RS.1,50,000/- WAS DEPOSITED IN SAVING BANK A/C OF P ATIALA, PATLIKUHAL, LEAVING THE ASSESSEE WITH THE BALANCE O F RS.18,27,110/- WHICH EXPLAINED THE CASH FOUND DEPOS ITED OF RS.18,50,000/- IN THE SAVING BANK A/C OF THE ASSESS EE IN STATE BANK OF INDIA, HARIPUR. HE THEREFORE CONTENDE D THAT THE LD.CIT(APPEALS), HAD WRONGLY CONFIRMED THE AD DITION OF RS.1,90,000/- AND RS.1,50,000/- ON ACCOUNT OF CASH DEPOSITED IN THE SAID TWO BANK ACCOUNTS OF THE ASS ESSEE, WHICH WERE CHALLENGED BY THE WAY OF GROUND NOS.2 & 3 RAISED ITA NO.119/CHD/2017 A.Y.2011-12 5 BEFORE US. AS FOR THE ADDITION MADE ON ACCOUNT OF AGRICULTURAL INCOME UPHELD BY THE CIT(APPEALS) CHAL LENGED IN GROUND NO.4 RAISED BEFORE US, THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THE AGRICULTURAL LAND WAS TRANSFERRE D TO HIM ON THE DEATH OF HIS FATHER ON 18.12.2010 WHICH WAS EVIDENCED BY FARD OF AGRICULTURAL LAND TAKEN FROM THE PATWARI ON 18/01/12 AND ON 19.09.2016. IT WAS CONTE NDED THAT THE LD.CIT(A) HAD WRONGLY MENTIONED THE FARD A S PERTAINING TO A.Y 2003-04,WHICH WAS ACTUALLY INTEKH AB MISCLE HAKIAT BAWAAT SAAL AND NOT A.Y. IT WAS THERE FORE CONTENDED THAT THE OWNERSHIP OF LAND HAVING BEEN DU LY ESTABLISHED THERE REMAINED NO REASON FOR NOT ACCEPT ING THE AGRICULTURAL INCOME RETURNED BY THE ASSESSEE OF RS.1,80,000/-. 8. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER O F THE CIT(APPEALS) AND STATED THAT THE ASSESSEE HAD ALREA DY BEEN GIVEN DUE BENEFIT OF LOAN SHOWN TO HAVE BEEN RETURN ED BY RELATIVES DURING THE YEAR AMOUNTING TO RS.7,40,000/ - AND ALSO INCOME EARNED FROM SALE OF CROP LAND OF RS.9,2 0,000/- AND IN THE ABSENCE OF ANY OTHER EVIDENCE FOR THE RE MAINING CASH DEPOSITED, THE CIT(APPEALS) HAD RIGHTLY UPHELD THE BALANCE ADDITIONS MADE. AS FOR AGRICULTURAL INCOME CLAIMED TO HAVE BEEN EARNED BY THE ASSESSEE, LD. DR RELIED ON THE ORDER OF THE CIT(APPEALS) AND STATED THAT THE DOCUM ENTS FILED BY THE ASSESSEE, SHOWED THAT THE AGRICULTURAL LAND WAS OWNED BY THE FATHER AND THEREFORE THE AGRICULTURAL INCOME EARNED THEREON COULD NOT ATTRIBUTED TO THE ASSESSEE AND THE ITA NO.119/CHD/2017 A.Y.2011-12 6 CIT(APPEALS) THEREFORE HAD RIGHTLY TREATED THE AGRI CULTURAL INCOME EARNED BY THE ASSESSEE AS INCOME FROM OTHER SOURCES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FAC TS RELATING TO THE CASE ARE THAT CASH FOUND DEPOSITED IN TWO SAVINGS BANK ACCOUNT OF THE ASSESSEE AMOUNTED ALL I N RS.20,00,000/- AS UNDER: SBI , HARIPUR RS. 18,50,000/- SBOP, PATLIKUHAL RS. 1,50,000/- 10. THE EXPLANATIONS FURNISHED BY THE ASSESSEE REGA RDING THE SOURCE OF THE SAME TO THE AUTHORITIES BELOW AND EVEN BEFORE US, WHICH WE FIND, STANDS ACCEPTED BY AUTHOR ITIES BELOW IS AS UNDER: ADVANCES RETURNED BY RELATIVES RS. 7,40,000 INCOME FROM SALE OF CROPS RS. 9,20,00 0 TOTAL RS .16,60,000/- 11. REGARDING THE ABOVE FACTS THERE IS NO DISPUTE. THEREFORE THE BALANCE REMAINING UNEXPLAINED IS RS.1,90,000/- , IN SBI, HARIPUR (18,50,000-16,60,000) AND RS.1,50,000/- IN SBOP, PATLIKUHAL, TOTALING IN ALL TO RS.3,40,000/-. BEFOR E US THE ASSESSEE HAS ATTRIBUTED THE SOURCE OF THIS CASH TO ITS INCOME RETURNED OF RS.1,37,110/- AND AGRICULTURAL INCOME O F RS.1,80,000/-. 12. AS FOR PLEA OF THE OF THE ASSESSEE FOR THE CRED IT TO BE GIVEN FOR HIS INCOME RETURNED OF RS.1,37,110/-, WE FIND MERIT IN THE SAME. IT IS NOT DISPUTED THAT THE ASSESSEE H AS ITA NO.119/CHD/2017 A.Y.2011-12 7 RETURNED THE SAID INCOME TO TAX. THE LD.DR HAS NOT REBUTTED THE AFORESAID CONTENTION OF THE ASSESSEE THAT CREDI T BE GIVEN OF THE INCOME RETURNED BY IT FOR THE CASH FOUND DEP OSITED. WE THEREFORE SEE NO REASON FOR NOT GIVING ANY CREDI T OF THE SAME FOR THE CASH FOUND DEPOSITED IN THE BANK OF TH E ASSESSEE. 13. AS REGARDS THE CLAIM OF THE ASSESSEE OF ATTRIBU TING THE CASH DEPOSITED, TO AGRICULTURAL INCOME OF RS.1,80,0 00/- RETURNED FOR TAX, WE SEE NO REASON FOR DENYING THE SAME ALSO. THE REVENUE WE FIND HAS TREATED THE SAID INCOME AS INCOME FROM UNDISCLOSED SOURCES, REJECTING THE ASSESSEES C ONTENTION THAT IT WAS HIS AGRICULTURAL INCOME. BUT THE SAID F ACT ,WE HOLD, MAKES NO DIFFERENCE SO FAR AS SOURCE OF CASH DEPOSIT IN BANK IS CONCERNED. HAVING ACCEPTED THE FACT THAT TH E ASSESSEE HAD EARNED INCOME OF RS.1,80,000/-, ALBEIT FROM UNDISCLOSED SOURCES, THE SAME CAN BE SAFELY ATTRIBU TED AS THE SOURCE OF CASH DEPOSITED IN THE BANK OF THE ASS ESSEE. 14. IN VIEW OF THE ABOVE, THEREFORE, WE DIRECT THAT CREDIT FOR THE CASH DEPOSITED IN THE BANK BE GIVEN FOR THE INC OME RETURNED BY THE ASSESSEE OF RS.1,37,110/- & THE AGR ICULTURAL INCOME OF RS.1,80,000/- RETURNED BY THE ASSESSEE. GROUND OF APPEAL NOS.2 & 3 RAISED BY THE ASSESSEE THEREFOR E STAND PARTLY ALLOWED TO THE ABOVE EXTENT. 15. AS FOR THE ISSUE RELATING TO TREATING THE AGRIC ULTURAL INCOME RETURNED BY THE ASSESSEE AS INCOME FROM UNDI SCLOSED SOURCES, THE ONLY THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT SINCE IT HAD ESTABLISHED THE OWNER SHIP OF ITA NO.119/CHD/2017 A.Y.2011-12 8 LAND, THE AGRICULTURAL INCOME EARNED THEREFROM WAS HIS INCOME. WE FIND THAT THE CIT(A) HAS GIVEN A CATEGOR ICAL FINDING THAT THE SAID INCOME CANNOT BE TREATED AS H IS AGRICULTURAL INCOME SINCE THE OWNERSHIP OF LAND BY THE ASSESSEE WAS NOT ESTABLISHED AND ALSO BECAUSE IN A NY CASE AGRICULTURAL INCOME THEREFROM FROM SALE OF FRUIT CR OPS OF RS.9,20,000/- HAD ALREADY BEEN CLAIMED AS THE INCO ME OF THE FATHER, WHICH WAS CLAIMED BY THE ASSESSEE AS A SOURCE OF CASH FOUND DEPOSITED IN THE BANK OF THE ASSESSEE. T HE RELEVANT FINDINGS OF THE CIT(A) AT PAGE 5 OF HER OR DER IS AS UNDER: THE SUBMISSIONS OF THE APPELLANT AND FACTS OF THE CASE ON RECORD HAVE BEEN CONSIDERED. IT IS OBSERVED THAT TH E LAND RECORD SUBMITTED BY THE APPELLANT PERTAIN TO A.Y.2003-04 WH ERE THE OWNER OF THE LAND IS SHOWN AS HEM RAJ, FATHER OF THE APPELLANT. THE ASSESSEE WHILE EXPLAINING THE SOURCE OF RS.18,50 ,000/- IN THE SAVING BANK ACCOUNT HAS STATED THAT ALL THE TRANS ACTION IN THE ACCOUNT WERE 'MADE ON ACCOUNT OF AGRICULTURE IN COME OF HIS FATHER WHICH INCLUDEDRS.9,20,000/- AS AGRICULTUR E RECEIPT FOR THE CROP OF 2010. THEREFORE AGRICULTURE INCOME OF RS.9,20,000/- PERTAINS TO HIS FATHER WHICH HAS BEEN A CCEPTED BY THE AO. IN THE ABSENCE OF DOCUMENTARY EVIDENCE T HAT THE APPELLANT WAS THE OWNER OF LAND, THE ADDITION OF RS. 1,80,000/- ON ACCOUNT OF UNDISCLOSED INCOME IS UPHELD. 16. THE LD.COUNSEL FOR THE ASSESSEE HAS NOT ADDRESS ED THE ISSUE OF INCOME FROM THE SAID LAND HAVING ALREADY BEEN CLAIMED BY THE ASSESSEE AND ACCEPTED BY THE REVENUE , AS BELONGING TO THE FATHER OF THE ASSESSEE. NOTHING HA S BEEN BROUGHT BEFORE US TO SHOW THAT THE AGRICULTURAL INC OME RETURNED BY THE ASSESSEE OF RS.1,80,000/- WAS OVER AND ABOVE THE INCOME OF RS.9,20,000/- ATTRIBUTED TO THE SAME PIECE OF LAND IN THE HANDS OF THE FATHER OF THE ASS ESSEE. IN THE ABSENCE OF THE SAME WE SEE NO REASON FOR ACCEPT ING THE ITA NO.119/CHD/2017 A.Y.2011-12 9 CONTENTION OF THE ASSESSEE THAT IT HAD EARNED AGRIC ULTURAL INCOME TO THE EXTENT OF RS.1,80,000/- DURING THE YE AR. GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS THEREFORE DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6 TH SEPTEMBER, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH