Sh. Basant Singh, Moga V. DCIT, Moga

ITA 1256/CHANDI/2009

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2591 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 29-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: RAKESH JAIN
• Keywords: Unexplained cash credit; Gift; Question of law; Retraction
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 1256/CHD/2009 & ITA 121/CHD/2012 ASSESSMENT YEAR: 2006-07 SHRI BASANT SINGH, VS THE DCIT, PROP. M/S BASANT GENERAL STORE, CIRCLE, BAGH GALI, MOGA. MOGA. PAN: AIZPS5461J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH JAIN RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 05.01.2016 DATE OF PRONOUNCEMENT : 15.01.2016 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OF BOTH THE ABOVE APPEALS FILED BY THE ASSESSEE ON QUANTUM AS WELL AS PENALT Y MATTER. BOTH THE APPEALS ARE DECIDED AS UNDER. ITA 1256/2009 2. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 30.10.2 009 FOR ASSESSMENT YEAR 2006-07. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE 2 SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO VARIOUS STATEMENTS OF THE CREDITORS, AGREEMENT T O SELL AND OTHER DOCUMENTS AND AFFIDAVITS FILED IN THE PAP ER BOOK IN SUPPORT OF THE ARGUMENT THAT ASSESSEE RECEI VED GENUINE CREDITS AND ALSO RELIED UPON CERTAIN DECISI ONS IN SUPPORT OF HIS CONTENTION. ON THE OTHER HAND, LD. DR RELIED UPON ORDER OF THE AUTHORITIES BELOW. WE, THEREFORE, DECIDE THE RESPECTIVE GROUNDS OF APPEAL IN ASSESSEE'S APPEAL AS UNDER. 4. ON GROUND NO. 1, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 3,30,000/- ON ACCOUNT OF ISTRIDHAN UNDER SECTION 68 OF THE INCOME TAX ACT. THE ASSESSING OF FICER NOTICED THAT ASSESSEE MADE ADDITION TO HIS CAPITAL ACCOUNT BY RS. 3,30,000/-. THE ASSESSING OFFICER A SKED THE ASSESSEE TO PRODUCE DOCUMENTARY IN SUPPORT OF T HE EXPLANATION OF SOURCE OF THIS DEPOSIT. THE ASSESSE E SUBMITTED THAT ADDITION OF RS. 3,30,000/- WAS OUT O F SAVINGS (ISTRIDHAN) OF HIS WIFE. THE ASSESSING OFF ICER, HOWEVER, OBSERVED THAT EXPLANATION OF THE ASSESSEE IS NOT CONVINCING AND NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THE ASSESSING OFFICER FURTHER OBSERVED T HAT IT WAS NOT BELIEVABLE THAT SUCH HEAVY AMOUNT WAS KEPT AT HOME BY WIFE OF THE ASSESSEE. THE ASSESSING OFFICE R, ACCORDINGLY, TREATED THE SAME AS UNEXPLAINED AND MA DE ADDITION UNDER SECTION 68 OF THE INCOME TAX ACT. 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND IT WAS EXPLAINED THAT ASSESSEE WAS 3 MARRIED ABOUT 35 YEARS AGO AND SAVINGS OF RS. 3,30,000/- OUT OF ISTRIDHAN BY HIS WIFE WAS ON AC COUNT OF RECEIPTS ON SOCIAL AND OTHER CUSTOMARY OCCASIONS . THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTE NTION OF THE ASSESSEE AND DISMISSED THIS GROUND OF APPEAL OF ASSESSEE BECAUSE THE SOURCE OF THE AMOUNT KEPT BY T HE ASSESSEES WIFE WAS NOT SUPPORTED BY ANY EVIDENCE. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT ASSESSEE HAS A DDED RS. 3,30,000/- IN HIS CAPITAL ACCOUNT, THEREFORE, B URDEN WAS UPON ASSESSEE TO PROVE SOURCE OF THE SAME. THE ASSESSEE EXPLAINED THAT THIS AMOUNT WAS RECEIVED FR OM HIS WIFE AND FILED AFFIDAVIT OF SMT. MUKHTIAR KAUR, WIFE OF SHRI BASANT SINGH (ASSESSEE) (PB-117) IN WHICH S HE HAS MERELY STATED THAT RS. 10,000/- HAVE BEEN SAVED ANNUALLY OUT OF THE MONEY GIVEN BY HER HUSBAND I.E. BY THE ASSESSEE, BUT THE COUNSEL FOR ASSESSEE PLEADED BEFORE THE LD. CIT(APPEALS) THAT SUCH AMOUNT WAS ACCUMULATED BY WIFE OF THE ASSESSEE ON DIFFERENT OCCASIONS BY WAY OF GIFT ETC. FROM THEIR PARENT AND IN- LAWS SIDE AT DIFFERENT REGULAR OCCASIONS. THE AFFI DAVIT OF WIFE OF THE ASSESSEE IS THUS, CONTRADICTORY AS AGAI NST SUBMISSIONS MADE BY THE ASSESSEE BEFORE LD. CIT(APPEALS). FURTHER, THE AFFIDAVIT OF WIFE OF TH E ASSESSEE IS NOT SUPPORTED BY ANY EVIDENCE OR MATERI AL ON RECORD. THUS, ASSESSEE FAILED TO PROVE CREDIT 4 WORTHINESS OF HIS WIFE AND THE GENUINENESS OF THE TRANSACTION IN THE MATTER. THE AUTHORITIES BELOW WE RE, THEREFORE, JUSTIFIED IN MAKING AND CONFIRMING THE ADDITION OF RS. 3,30,000/-. THIS GROUND OF APPEAL OF ASSESSEE IS ACCORDINGLY DISMISSED. 7. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 36,04,000/- ON ACCOUNT OF UNEXPLAINED CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT. 7(I) AS PER BALANCE SHEET ANNEXED TO THE RETURN OF INCOME, THE ASSESSEE WAS FOUND TO HAVE INTRODUCED F RESH UNSECURED LOANS IN THE NAME OF FOLLOWING PERSONS : I) S/SHRI JEET SINGH, HARI SINGH RS. 25,75,000/- & BALBIR SINGH II) SHRI GURDIWAN SINGH RS. 10,00,000/- III) SHRI IQBAL SINGH RS. 29,000/- TOTAL : RS. 36,04,000/- 8. THE ASSESSEE PRODUCED SHRI JEET SINGH BEFORE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED O N OATH. IN HIS STATEMENT, SHRI JEET SINGH HAS STATE D THAT HE ADVANCED A SUM OF RS. 25,7,5,000/- IN CASH TO SH RI BASANT SINGH FOR PURCHASE OF LAND. THE ASSESSING OFFICER, HOWEVER, NOTED THAT HE DID NOT REMEMBER TH E DAY AND DATE WHEN THE MONEY WAS HANDED OVER TO HIM. IN HIS STATEMENT, SHRI JEET SINGH FURTHER STATED TH AT MONEY WAS ADVANCED TO SHRI BASANT SINGH, ASSESSEE A T HIS SHOP AND HIS TWO BROTHERS NAMELY SHRI HARI SING H 5 AND SHRI BALBIR SINGH ALSO ACCOMPANIED HIM AT THE T IME OF PASSING OF THE SAID MONEY. THE NAME OF THE SHOP OF ASSESSEE WAS FOUND TO BE NOT KNOWN TO THE CREDITOR AND FURTHER, HE COULD NOT REMEMBER THE DENOMINATION OF THE NOTES GIVEN TO THE ASSESSEE. THE ASSESSING OFFICER ALSO RECORDED STATEMENT OF SHRI HARI SINGH, BROTHER OF S HRI JEET SINGH AND AS PER HIS STATEMENT, SHRI JEET SING H ALONE HAS GIVEN THIS MONEY TO THE ASSESSEE AT HIS H OME. SHRI HARI SINGH FURTHER STATED THAT HE AND HIS BROT HER SHRI BALBIR SINGH NEVER ACCOMPANIED SHRI JEET SINGH AT THE TIME OF HANDING OVER THE MONEY TO THE ASSESSEE. FROM THESE STATEMENTS, ASSESSING OFFICER OBSERVED T HAT SAME WERE CONTRADICTORY AND AS SUCH, DID NOT BELIEV E THE STATEMENT OF SHRI JEET SINGH. THE ASSESSING OFF ICER ALSO OBSERVED THAT ASSESSEE IS NOT PROPERTY DEALER NOR DEALING IN THE PROPERTY, THEREFORE, THERE WAS NO RE ASON WHY SHRI JEET SINGH OR SHRI HARI SINGH HAS GIVEN TH IS MUCH AMOUNT TO THE ASSESSEE FOR PURCHASE OF LAND. THE CASH KEPT AT THE RESIDENCE BY THE CREDITOR WAS ALSO NOT BELIEVED. THESE CREDITS WERE, THEREFORE, CONSIDERED TO BE IN-GENUINE BY THE ASSESSING OFFICER. 8(I) THE ASSESSING OFFICER CONSIDERED THE CREDIT OF SHRI GURDIWAN SINGH IN A SUM OF RS. 10 LACS. HE WAS ALS O PRODUCED BEFORE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED ON OATH. HE HAS STATED IN HIS STATEMEN ET THAT HE NEVER ADVANCED ANY MONEY TO ANYONE ON INTER EST BASIS FOR THE LAST SIX YEARS. HE HAS SIMPLY STATED THAT 6 HE HAS GIVEN RS. 10,000/- TO RS. 20,000/- TO HIS CL OSE RELATIVES AS DEMANDED AND NO INTEREST WAS BEING CHARGED AS A COURTSEY. SHRI GURDIWAN SINGH CATEGORICALLY ADMITTED THAT HE DID NOT ADVANCE ANY MONEY TO THE ASSESSEE IN A SUM OF RS. 10 LACS NOR A NY INTEREST HAS BEEN RECEIVED BY HIM. THE ASSESSING OFFICER, THEREFORE, OBSERVED THAT RS. 10 LACS WAS N OT GIVEN BY SHRI GURDIWAN SINGH TO THE ASSESSEE AT ANY POINT OF TIME AND IT WAS OWN MONEY OF THE ASSESSEE WHICH WAS INTRODUCED IN THE BALANCE SHEET IN THE NA ME OF SHRI GURDIWAN SINGH. THE AMOUNT WAS, THEREFORE, ADDED UNDER SECTION 68 ON ACCOUNT OF UNDISCLOSED INCOME. SO FAR AS CREDIT OF RS. 29,000/- IS CONCER NED, THE AMOUNT WAS SHOWN IN THE NAME OF SHRI IQBAL SING H, PAYABLE TO HIM ON ACCOUNT OF MONEY TRANSFER PAYMENT . THE ASSESSEE DID NOT PRODUCE HIM BEFORE ASSESSING OFFICER FOR HIS EXAMINATION. NO EVIDENCE WAS ALSO PRODUCED IN SUPPORT OF THIS CREDIT, THEREFORE, ADDI TION WAS MADE IN THE HANDS OF THE ASSESSEE. 9. THE ASSESSING OFFICER ALSO NOTED THAT ASSESSEE W AS COMING IN ESTEEM CAR ALONGWITH HIS TWO SONS AND A DRIVER FROM DELHI ON 28.10.2005 AND ON THE WAY, DUR ING NAKA BY THE POLICE NEAR HIMMATPURI DRAIN, MOGA BARNALA ROAD, POLICE STATION, NIHAL SINGH WALA, HE WAS TRAPPED BY THE POLICE AT ABOUT 10 PM AND DURING SEA RCH BY THE POLICE, CASH OF RS. 59,75,000/- FROM THE BAG LYING AT THE BACKSIDE OF THE VEHICLE WAS SEIZED FROM THE 7 ESTEEM CAR. THE ENTIRE MONEY SO SEIZED WAS HANDED OVER TO THE ENFORCEMENT DIRECTORATE, JALANDHAR FOR INVESTIGATION. THE ENFORCEMENT DIRECTORATE RECORDE D THE STATEMENT OF THE ASSESSEE ON 29.10.2008 AND AS PER COPY OBTAINED BY ASSESSING OFFICER, THE ASSESSEE HA S STATED THAT HE HAD GONE TO DELHI TO BRING MONEY ON CALL RECEIVED FROM PHILIPPINES ALONGWITH HIS SON. AT TH E FLY- OVER OF ROHTAK ROAD, DELHI, ONE PERSON CAME TO THEM IN SANTRO CAR AND HANDED OVER ONE SUITE CASE CONTAININ G 18 LACS AND ONE BAG CONTAINING RS. 41,75,000/- AND THE ENTIRE MONEY WAS SEIZED BY THE POLICE. IT WAS FURT HER STATED THAT THIS AMOUNT WAS TO BE DISTRIBUTED TO VA RIOUS PERSONS AS PER DIRECTIONS FROM BILLU OF PHILIPPINES . EVEN LIST OF THE PERSONS CONCERNED, TO WHOM MONEY WAS TO BE DISTRIBUTED, WAS STATED TO HAVE BEEN SENT TO ASSESS EE'S SON THROUGH FAX. THE ASSESSEE ADMITTED IN HIS STATEMENT THAT IN TOKEN OF THIS SERVICE, ASSESSEE RECEIVED COMMISSION @ 800 PER LAC. THE ASSESSING OFFICER, OBSERVED THAT ASSESSEE WAS DOING HAWALA BUSINESS AND SAID MONEY BELONG TO HIM. THE ASSESSE E DID NOT GIVE THE NAME OF S/SHRI JEET SINGH, HARI SI NGH AND GURDIWAN SINGH ETC. TO THE POLICE OR THE ENFORCEMENT DIRECTORATE, WHEN HIS STATEMENT WAS RECORDED. THE ASSESSING OFFICER, THEREFORE, INFERR ED THAT ASSESSEE FAILED TO PROVE THE SOURCE OF THE MONEY CREDITED IN THE BOOKS OF ACCOUNT AND ADDITION OF RS . 36,04,000/- WAS MADE IN THE HANDS OF THE ASSESSEE. 8 10. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSE SSEE BRIEFLY EXPLAINED THAT THERE ARE THREE CREDITS IN T HE NAME OF SHRI JEET SINGH AND OTHERS RS. 25,75,000/-, GURDIWAN SINGH RS. 10 LACS AND IQBAL SINGH RS. 29,000/-. DETAILED EXPLANATION AND EVIDENCES WERE PRODUCED DURING INVESTIGATION CONDUCTED BY DDIT, LUDHIANA AND DURING ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED THAT S/SHRI JEET SINGH, HARI SINGH AND BA LBIR SINGH HAVE HANDED OVER A SUM OF RS. 25,75,000/- TO THE ASSESSEE TO PURCHASE SHARE I.E. 14 KILLAS IN AGRICULTURE LAND MEASURING 28 KILLAS WITH THE ASSES SEE. ALL THE PERSONS SUBMITTED THEIR DULY SWORN AFFIDAVI TS DATED 28.11.2005 BEFORE DDIT, LUDHIANA DURING THE COURSE OF INVESTIGATION. COPIES OF THE SAME WERE A LSO FILED BEFORE AUTHORITIES BELOW ALONGWITH COPIES OF THE SALE DEED OF AGRICULTURE LAND SOLD BY THEM IN THE M ONTH OF APRIL,2005 OF RS. 6,82,000/-, RS. 6,81,000/- AND RS. 6,82,000/-. ALL THE THREE PERSONS WERE PRODUCED BE FORE ASSESSING OFFICER AT ASSESSMENT STAGE AND THEIR STATEMENTS HAVE BEEN RECORDED. BESIDES THAT, ALL T HE THREE PERSONS HAVE RECEIVED RS.7 LACS AS ADVANCE FO R SALE OF AGRICULTURE LAND AND THEY HAVE CONFIRMED HA VING HANDED OVER MONEY TO THE ASSESSEE FOR PURCHASE OF AGRICULTURE LAND JOINTLY WITH THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE EVIDENCES WITHOUT AN Y REASON. THESE PERSONS ARE AGRICULTURISTS AND THEY D ID 9 NOT AVAIL BANKING FACILITIES. THEIR STATEMENTS COU LD NOT BE REJECTED BY THE ASSESSING OFFICER WITHOUT ANY REASONS. IT WAS FURTHER SUBMITTED THAT SHRI GURDIW AN SINGH IS AGRICULTURIST AND HIS STATEMENT WAS RECORD ED BY ASSESSING OFFICER AND HIS AFFIDAVIT WAS ALSO SUBMIT TED BEFORE DDIT, LUDHIANA IN WHICH HE HAS CONFIRMED ADVANCE OF MONEY TO THE ASSESSEE, THEREFORE, HIS STATEMENT SHOULD NOT BE REJECTED. HE HAS FURTHER F ILED AFFIDAVIT BEFORE LD. CIT(APPEALS) IN SUPPORT OF GIV ING OF RS. 10 LACS TO THE ASSESSEE. 11. THE ASSESSEE FURTHER CLAIMED THAT RS. 29,000/- WAS IN THE NAME OF SHRI IQBAL SINGH AND ASSESSEE WA S CARRYING ON BUSINESS OF MONEY TRANSFER, THEREFORE, NO ADDITION COULD BE MADE. THE ASSESSEE IN THE FURTHE R SUBMISSIONS SUBMITTED THAT REGARDING THE AMOUNT RECEIVED FROM SHRI JEET SINGH AND OTHERS, COPIES OF THEIR SALE DEED HAVE BEEN FILED ALONGWITH THEIR AFFIDAVIT S. THE AFFIDAVIT OF SHRI GURDIWAN SINGH WAS ALSO FILED. I T WAS ALSO SUBMITTED THAT THE RECOVERY OF CASH OF RS. 59,75,000/- BY THE POLICE HAS BEEN FABRICATED STORY JUST TO IMPLICATE THE ASSESSEE AND HIS FAMILY IN FERA CA SE. IN FACT, POLICE HAD PICKED UP THE ASSESSEE AND HIS SON FROM THEIR RESIDENCE AND FALSE CASE HAVE BEEN PLANT ED UPON HIM. IT WAS ALSO EXPLAINED THAT THE ONLY EVID ENCE IS STATEMENT RECORDED OF SHRI BASANT SINGH ON 29.10.2005. A BARE READING OF THE STATEMENT REVEAL ED THAT IT IS NOT CLEAR WHO HAS RECORDED THE STATEMENT 10 BEFORE WHOM AND WHERE THE STATEMENT HAS BEEN RECORDED, WHETHER IT IS RECORDED UNDER FEMA ACT OR OTHERWISE. THE ASSESSEE ALSO RETRACED FROM THE STATEMENT LATER ON, THEREFORE, IT COULD NOT BE SAID TO BE VOLUNTARY STATEMENT OF THE ASSESSEE. NO MATERIAL O R EVIDENCE HAS BEEN BROUGHT ON RECORD IN SUPPORT OF T HIS STATEMENT. THIS STATEMENT WAS RECORDED JUST TO IMPLICATE THE ASSESSEE IN A FALSE CASE. IT WAS SUB MITTED THAT THERE ARE VARIOUS JUDICIAL PRONOUNCEMENTS TO P ROVE THAT WHEN STATEMENT HAS NOT BEEN RECORDED BY DULY AUTHORIZED GAZETTED OFFICER UNDER THE RESPECTIVE AC T, SUCH STATEMENT CANNOT BE RELIED UPON IN EVIDENCE. THE ASSESSEE RELIED UPON SEVERAL DECISIONS IN SUPPORT O F THIS CONTENTION. 12. THE LD. CIT(APPEALS), CONSIDERING THE EXPLANATI ON OF THE ASSESSEE AND MATERIAL ON RECORD CONFIRMED AL L THE THREE ADDITIONS. THE LD. CIT(APPEALS) CONFIRMED TH E FINDING OF THE ASSESSING OFFICER BECAUSE THERE WAS CONTRADICTION IN THE STATEMENT OF S/SHRI JEET SINGH AND HARI SINGH RECORDED BY THE ASSESSING OFFICER AND TH E CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED THAT AGRICULTURISTS IN THE VILLAGES HAVE KEPT THE CASH A T THEIR HOUSES. 12(I) THE LD. CIT(APPEALS), WITH REGARD TO INVESTIG ATION BY ENFORCEMENT DIRECTORATE, NOTED ASSISTANT DIRECTO R HAS INTIMATED THAT EFFORTS WERE BEING MADE TO COLLE CT FURTHER EVIDENCE FROM THE BANK AS WELL AS ABROAD AN D 11 INVESTIGATION IS IN PROCESS. THE LD. CIT(APPEALS), THEREFORE, NOTED THAT THIS ASPECT COULD BE CONSIDER ED BY THE CONCERNED AUTHORITIES AFTER MAKING ENQUIRIES AN D INVESTIGATION AND ASSESSEE CANNOT BE ALLOWED ANY BE NEFIT IN THIS REGARD. THE LD. CIT(APPEALS) ALSO NOTED TH AT IN THE BALANCE SHEET AS ON 31.03.2006, THE SEIZED AMOU NT BY THE ENFORCEMENT DIRECTORATE IS SHOWN ON THE ASSE T SIDE OF THE BALANCE SHEET AND TO MAKE UP THIS AMOUN T, CREDITS HAVE BEEN SHOWN ON LIABILITY SIDE OF THE BA LANCE SHEET. THEREFORE, HE AGREED WITH FINDINGS OF ASSES SING OFFICER. IT WAS NOTED THAT NOTHING HAS PREVENTED T HE ASSESSEE FROM EXPLAINING THIS FACTUAL POSITION BEFO RE POLICE AND ENFORCEMENT DIRECTORATE. THE LD. CIT(APPEALS), IN VIEW OF THE CONTRADICTION IN THE STATEMENT OF SHRI JEET SINGH AND SHRI HARI SINGH, CONFIRMED THE ADDITION OF RS. 25,75,000/-. AS REGA RDS ADDITION OF RS. 10 LACS IN RESPECT OF THE CREDITOR SHRI GURDIWAN SINGH ADMITTED IN HIS STATEMENT THAT HE DI D NOT ADVANCE ANY MONEY TO THE ASSESSEE AT ANY TIME, THEREFORE, GENUINENESS OF THE CREDIT IS NOT PROVED. THE LD. CIT(APPEALS) DID NOT ACCEPT SUBSEQUENT AFFIDAVI T FILED BY THE ASSESSEE OF THIS CREDITOR AT THE APPEL LATE PROCEEDINGS AND REJECTED THE SAME AND ACCORDINGLY, CONFIRMED THE ADDITION. IN RESPECT OF CREDIT OF RS . 29,000/- IN RESPECT OF SHRI IQBAL SINGH, LD. CIT(AP PEALS) NOTED THAT ASSESSEE FAILED TO PROVE SOURCE OF THE S AME AND NO EVIDENCE IN THIS REGARD HAVE BEEN PRODUCED, THEREFORE, ASSESSEE FAILED TO EXPLAIN THIS CREDIT T O THE 12 SATISFACTION OF THE ASSESSING OFFICER AND ACCORDING LY, THIS CREDIT WAS ALSO CONFIRMED AND THIS GROUND OF A PPEAL OF THE ASSESSEE WAS DISMISSED. 13. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE FIRS T CREDIT IS OF RS.25,75,000/- RECEIVED FROM SHRI JEET SINGH. PB-46 IS STATEMENT OF SHRI HARI SINGH RECOR DED ON OATH BY THE ASSESSING OFFICER IN WHICH HE HAS CONFIRMED THAT HE ALONGWITH HIS TWO BROTHERS S/SHRI JEET SINGH AND BALBIR SINGH HAVE STRUCK A DEAL OF J OINT LAND. HE HAS ALSO EXPLAINED THAT THEY HAVE SOLD TH E LAND AND HAVE STRUCK A DEAL FOR PURCHASE OF ANOTHER LAND AND THE LAND WAS TO BE PURCHASED IN PROPORTION ATE SHARE OF WITH SHRI BASANT SINGH I.E. ASSESSEE. I N HIS STATEMENT, HE HAS EXPLAINED THAT AMOUNT IN QUESTION HAS BEEN PAID BY HIS BROTHER SHRI JEET SINGH. HE H AS ALSO EXPLAINED SOURCE OF THEIR PAYMENT. PB-50 IS STATEMENT OF SHRI JEET SINGH RECORDED BY ASSESSING OFFICER ON OATH AT ASSESSMENT STAGE IN WHICH HE H AS CONFIRMED TO HAVE GIVEN AMOUNT OF RS. 25,75,000/- T O THE ASSESSEE FOR PURCHASE OF LAND AS ADVANCE. HE H AS CONFIRMED THAT HE IS MAKING STATEMENT OF HIS OWN CONSENT AND WITHOUT ANY PRESSURE IN THE PRESENCE OF THE ASSESSEE. PB-94 IS AGREEMENT TO SELL BY S/SHRI HAR I SINGH, JEET SINGH, GURDEEP SINGH AND BALBIR SINGH T O PROVE THE SOURCE OF GIVING AMOUNT IN QUESTION TO TH E ASSESSEE. PB-119 IS THE COPY OF ACCOUNT OF THESE T HREE PERSONS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE SHO WING 13 CREDIT OF RS. 25,75,000/-. THE ASSESSEE EXPLAINED BEFORE LD. CIT(APPEALS) THAT DURING INVESTIGATION CONDUCTED BY DDIT, LUDHIANA IT WAS EXPLAINED THAT S/SHRI JEET SINGH, HARI SINGH AND BALBIR SINGH HAVE HANDED OVER THE AMOUNT IN QUESTION FOR PURCHASE OF PROPERTY JOINTLY. THEY HAVE ALSO SUBMITTED THEIR AFFIDAVITS BEFORE DDIT IN THIS REGARD AND CONFIRMED GIVING OF AMOUNT IN QUESTION TO THE ASSESSEE. THEY HAVE ALSO EXPLAINED THEIR SOURCE BY SELLING DIFFERENT LA NDS FOR GIVING THE AMOUNT IN QUESTION TO THE ASSESSEE. THE SE FACTS HAVE NOT BEEN DISPUTED BY LD. DR DURING THE COURSE OF ARGUMENTS. THE STATEMENT OF SHRI JEET SI NGH HAS BEEN CORROBORATED BY MATERIAL EVIDENCE ON RECOR D AND RELIABLE. 13(I) THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO VARIOUS REPLIES FILED BEFORE DDIT (INVESTIGATION) I N THE PAPER BOOK WHICH WERE FILED AT THE TIME OF INVESTIG ATION BEFORE DDIT TO SHOW THAT SAME FACTS WERE PLEADED BE FORE DDIT (INVESTIGATION) WITH REGARD TO THE AMOUNT IN QUESTION RECEIVED FROM SHRI JEET SINGH AND OTHERS F OR PURCHASE OF THE PROPERTY JOINTLY. PB-11 IS REPLY D ATED 27.06.2006 FILED BEFORE DDIT (INVESTIGATION) LUDHIA NA IN WHICH ALSO SAME FACTS HAVE BEEN PLEADED THAT RS. 25,75,000/- HAVE BEEN ADVANCED IN CASH TO THE ASSES SEE FOR THE PURPOSE OF PURCHASING THE PROPERTY JOINTLY WITH SHRI JEET SINGH AND OTHERS. IT WAS ALSO STATED IN THE SAME REPLY THAT THEIR AFFIDAVITS HAVE ALSO BEEN FIL ED 14 BEFORE DDIT (INVESTIGATION). SOURCE OF THE AMOUNT BEING SALE OF THE PROPERTY WERE ALSO FILED. IT WAS ALSO EXPLAINED THAT SINCE THESE PERSONS ARE VILLAGERS AND THEY DID NOT MAINTAIN BANK ACCOUNT, THEREFORE, THEY HAVE KEPT TH E CASH WITH THEM AFTER SELLING THEIR LAND FOR THE PURPOSE OF PURCHASING THE PROPERTY JOINTLY WITH THE ASSESSEE. IT IS, THEREFORE, CLEAR THAT EVEN BEFORE START OF THE ASSE SSMENT PROCEEDINGS, ASSESSEE HAS BEEN CONSISTENT IN HIS ST AND BEFORE INVESTIGATING AGENCIES THAT AMOUNT IN QUESTI ON WAS RECEIVED FROM SHRI JEET SINGH AND HIS BROTHERS FOR PURCHASE OF THE PROPERTY JOINTLY WITH THEM. SAME AMOUNT WAS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THUS, IDENTITY OF THESE CREDITORS HAS BEEN PROVED BY ASSE SSEE. FOR THEIR SOURCE OF GIVING AMOUNT IN QUESTION, ASSESSEE HAS ALSO PROVED THROUGH SALE OF LAND BY THEM AND THUS, ASSES SEE HAS BEEN ABLE TO PROVE THE GENUINENESS OF THE TRANSACTI ON IN THE MATTER. SINCE THESE PERSONS WERE AGRICULTURISTS AND LIVING IN VILLAGES, THEREFORE, THE CONTENTION OF THE ASSESSEE IS PROBABLE THAT THEY MIGHT NOT HAVE MAINTAINED ANY BA NK ACCOUNT AND THUS, HAVE KEPT CASH WITH THEM AFTER SE LLING THEIR PROPERTIES. THEREFORE, INITIAL ONUS UPON ASS ESSEE STANDS DISCHARGED TO PROVE GENUINE CREDIT IN THE MA TTER. 13(II) THE ASSESSEE ALSO PLEADED BEFORE AUTHORITI ES BELOW THAT FERA CASE WAS FRAMED AGAINST THE ASSESSE E AND HIS SON ON WHICH ALSO, LD. CIT(APPEALS) HAS GIV EN AN OBSERVATION THAT SINCE MATTER IS UNDER INVESTIGATIO N, THEREFORE, SUCH A MATTER WOULD BE DECIDED BY THE CONCERNED AUTHORITIES. HOWEVER, ON GOING THROUGH T HE 15 STATEMENT OF THE ASSESSEE RECORDED ON 29.10.2005, I .E. AFTER SEIZURE OF THE CASH BY THE POLICE, COPY OF TH E STATEMENT IS FILED AT PAGE 44 OF THE PAPER BOOK, WO ULD REVEAL THAT IT IS NOT CLARIFIED AS TO UNDER WHAT CIRCUMSTANCES AND UNDER WHICH PROVISION OF THE ACT, SUCH STATEMENT OF THE ASSESSEE HAS BEEN RECORDED. IT IS A WELL SETTLED LAW THAT IN CRIMINAL PROCEEDINGS, TH E CASES SHALL HAVE TO BE DECIDED ON THE BASIS OF THE EVIDENCES PRODUCED BY THE PROSECUTION AND THE PROSECUTION SHALL HAVE TO PROVE THE CASE AGAINST TH E ACCUSED BEYOND DOUBT. HOWEVER, IN THE INCOME TAX PROCEEDINGS, MATTERS SHALL BE DECIDED ON THE BASIS OF THE EVIDENCES AND MATERIAL ON RECORD IN THE LIGHT O F PRINCIPLE OF PREPONDENCE OF PROBABILITIES. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON FOLLOWING DECI SIONS: I) JUDGEMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF IT VS RAMNEET SINGH 306 ITR 267 (P&H) IN WHICH IT WAS HELD AS UNDER : IN VIEW OF THE FINDINGS OF THE TRIBUNAL THAT THE CREDITORS WERE PRODUCED AND THEIR STATEMENTS WERE RECORDED AND IN THEIR STATEMENTS, THE CREDITORS HAVE CONFIRMED HAVING ADVANCED LOANS, IT WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) DELETING ADDITION UNDER S. 68. II) DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS LAUL TRANSPORT CORPORATION 180 TAXMAN 185 (P&H) IN WHICH IT 16 WAS HELD AS UNDER : FINDING RECORDED BY THE TRIBUNAL ACCEPTING THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS TO ADVANCE MONEY AND GENUINENESS OF CASH CREDITS IS A PURE FINDING OF FACT, AND THE APPELLANT HAVING NOT POINTED OUT ANY ILLEGALITY OR PERVERSITY IN THE SAID FINDING OF FACT, NO INTERFERENCE IS WARRANTED. III) DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS SHRI RAM NARAIN GOEL, 224 ITR 180 IN WHICH IT WAS HELD AS UNDER : FINDING OF THE TRIBUNAL THAT CASH CREDITS WERE GENUINE BEING BASED ON MATERIAL ON RECORD, THE OBSERVATION OF THE TRIBUNAL THAT THE ASSESSEE WAS NOT SUPPOSED TO PROVE THE SOURCE OF THE LOAN DID ( NOT GIVE RISE TO ANY REFERABLE QUESTION OF LAW. 14. CONSIDERING THE FACTS AND CIRCUMSTANCES AND MATERIAL ON RECORD, IT IS CLEAR THAT ASSESSEE, SINC E BEGINNING HAS BEEN PLEADING THAT AMOUNT IN QUESTION WAS RECEIVED AS ADVANCE FROM SHRI JEET SINGH AND HI S BROTHERS FOR PURCHASE OF THE PROPERTY JOINTLY AND H AS PRODUCED THEM AND THEIR STATEMENTS HAVE BEEN RECORD ED BY THE ASSESSING OFFICER IN WHICH SHRI JEET SINGH H AS CONFIRMED TO HAVE GIVEN AMOUNT IN QUESTION TO THE ASSESSEE. THEREFORE, EVEN IF THERE ARE CERTAIN CONTRADICTIONS IN THE STATEMENT OF SHRI JEET SINGH AND SHRI HARI SINGH, THE SAME WOULD NOT BE SIGNIFICANT AS IS REQUIRED UNDER THE CRIMINAL LAW, THEREFORE, THE JUDGEMENTS RELIED UPON BY LD. COUNSEL FOR THE ASSES SEE CLEARLY APPLY TO THE FACTS OF THE CASE IN SUPPORT O F THE 17 ASSESSEE. WE, THEREFORE, DO NOT FIND ANY JUSTIFICA TION TO SUSTAIN THE ORDERS OF AUTHORITIES BELOW. THE INITI AL ONUS UPON ASSESSEE HAS THUS, BEEN DISCHARGED TO PROVE GENUINE CREDITS IN THE MATTER. THE ASSESSING OFFIC ER HAS NOT BROUGHT ANY EVIDENCE AGAINST THE ASSESSEE T O CONTRADICT OR REBUT THE MATERIAL ON RECORD. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELO W AND DELETE THE ADDITION OF RS. 25,75,000/-. THIS GROUN D OF APPEAL OF THE ASSESSEE IS ALLOWED. 15. AS REGARDS THE CREDIT IN THE NAME OF SHRI GURDIWAN SINGH IN A SUM OF RS. 10 LACS, HIS STATEME NT WAS RECORDED AT ASSESSMENT STAGE BY ASSESSING OFFIC ER, COPY OF WHICH IS FILED AT PAGE 53 OF THE PAPER BOOK IN WHICH HE HAS CATEGORICALLY DENIED TO HAVE GIVEN ANY LOAN TO THE ASSESSEE. HE HAS EXPLAINED THAT HE HAS NOT TAKEN ANY LOAN OR GIVEN ANY LOAN FOR THE LAST SIX YEARS. HE HAS GIVEN ABOUT RS. 10,000/- TO RS. 20,000/- OF LOAN TO HIS BROTHER AND SISTER. SINCE SHRI GURDIWAN SINGH WAS WITNESS OF THE ASSESSEE WHO HAS DEPOSED AGAINST THE ASSESSEE, THEREFORE, ASSESSEE FAILED TO PROVE THE S OURCE OF THE CREDIT AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, SUBMITTED THAT SUBSEQUENT TO THE STATEMENT RECORDED ON 06.11.2008, SHRI GURDIWAN SINGH FILED HIS AFFIDAVIT BEFORE LD. CIT(APPEALS) ON 16.05.2009 CONFIRMING GI VING OF LOAN TO THE ASSESSEE. SUCH AN AFFIDAVIT FILED A T THE SUBSEQUENT STAGE WITHOUT MAKING RETRACTION TO THE 18 EARLIER STATEMENT GIVEN TO ASSESSING OFFICER WOULD NOT SERVE ANY PURPOSE. FURTHER AFFIDAVIT OF SHRI GURDI WAN SINGH HAS NOT BEEN SUPPORTED BY ANY EVIDENCE OR MATERIAL ON RECORD, THEREFORE, AUTHORITIES BELOW WE RE JUSTIFIED IN MAKING AND CONFIRMING THE ADDITION OF RS. 10 LACS. THUS, ASSESSEE FAILED TO EXPLAIN GENUINEN ESS OF THE CREDITS IN RESPECT OF RS. 10 LACS. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY, DISMISSED. 16. IN RESPECT OF ADDITION OF RS. 29,000/-, SHOWN T O HAVE BEEN GIVEN BY SHRI IQBAL SINGH, ASSESSEE HAS N OT PRODUCED ANY EVIDENCE BEFORE AUTHORITIES BELOW TO EXPLAIN EVEN HIS IDENTITY, WHAT TO SAY OF CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION IN TH E MATTER. HE WAS ALSO NOT PRODUCED BEFORE ASSESSING OFFICER FOR EXAMINATION. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD, AUTHORITIES BEL OW WERE JUSTIFIED IN MAKING AND CONFIRMING ADDITION OF RS. 29,000/-. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMISSED. 17. IN THE RESULT, GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 18. ON GROUND NO. 3, ASSESSEE CHALLENGED ADDITION O F RS. 20 LACS ON ACCOUNT OF UNEXPLAINED CASH CREDIT. IN THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2006, THE ASSESSEE WAS FOUND TO HAVE SHOWN A SUM OF RS. 20 LA CS ON ACCOUNT OF SAME AGREEMENT. BEFORE ASSESSING OFFI CER, 19 IT WAS EXPLAINED THAT THIS AMOUNT WAS RECEIVED BY T HE ASSESSEE FROM SHRI PRITAM SINGH AGAINST MORTGAGE OF HOUSE. THE AMOUNT WAS, HOWEVER, NOT RELATED TO ANY BUSINESS TRANSACTION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SHRI PRITAM SINGH WITH WHOM THE AGREEMENT OF MORTGAGE OF HOUSE FOR RS.25 LACS WAS CLAIMED TO HAVE BEEN ENTERED INTO AND RECEIPT OF RS . 20 LACS FROM HIM. SHRI PRITAM SINGH WAS PRODUCED BEFO RE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED. IN HIS STATEMENT, SHRI PRITAM SINGH STATED THAT HE HAD GIVEN AMOUNT OF RS. 20 LACS IN CASH TO THE ASSESSEE IN THE MONTH OF SEPTEMBER, 2005 AFTER SELLING SOME LAN D IN AUGUST,2004. SHRI PRITAM SINGH FURTHER STATED THAT DENOMINATION OF NOTES WERE NOT KNOWN TO HIM. IT WA S ALSO STATED THAT THE POSSESSION OF THE KOTHI FOR MO RTGAGE OF THIS AMOUNT HAD NOT BEEN HANDED OVER TO SHRI PRI TAM SINGH. THE KOTHI IN QUESTION IS IN THE NAME OF SMT . MANJIT KAUR, HOWEVER, THE DEAL FOR THE SALE OF THE SAME WAS WITH THE ASSESSEE AS POWER OF ATTORNEY HOLDER. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. HE HAS MENTIONED THAT KOTHI IN QUESTION IS IN THE NAME OF SMT. MANJIT KAU R AND THAT ASSESSEE WAS NOT HAVING THE POSSESSION OF THE SAME. THE ASSESSING OFFICER FURTHER NOTED THAT LAN D WAS SOLD BY SHRI PRITAM SINGH IN AUGUST,2004 AND THE CA SH AMOUNT WAS GIVEN TO THE ASSESSEE IN SEPTEMBER,2005. THE ASSESSING OFFICER DID NOT BELIEVE THAT CASH AMO UNT CAN BE KEPT BY SHRI PRITAM SINGH AT HIS HOUSE FOR M ORE 20 THAN ONE YEAR. FOR THE REASON THAT CASH WAS SEIZED FROM THE ASSESSEE, ASSESSING OFFICER OBSERVED THAT ASSES SEE HAS TRIED TO CONVERT THE SAME INTO THE AGREEMENT AM OUNT IN THE NAME OF SHRI PRITAM SINGH. THE ASSESSING OFF ICER, ACCORDINGLY, DISALLOWED THE CASH CREDIT OF RS. 20 L ACS AND MADE ADDITION UNDER SECTION 68 OF THE INCOME TA X ACT. 19. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION IS REPRODUCED I N THE APPELLATE ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT SUM OF RS. 20 LACS WAS RECEIVED ON ACCOUNT OF MORTGAGE OF THE HOUSE FROM SHRI PRITAM SINGH. COPY OF THE MORTGAGE AGREEMENT WAS PRODUCED BY SHRI PRITAM SINGH BEFORE ASSESSING OFFICER. IT WAS EXPLAINED THAT SOURCE OF ADVANCING THE MONEY BEING THE SALE PROCEEDS OF THE AGRICULTURE LAND. COPY OF THE POWER OF ATTORNEY ALONGWITH ORIGINAL MORTGAGE DEED WAS FI LED BEFORE ASSESSING OFFICER. IT WAS, THEREFORE, EXPLA INED THAT INITIAL BURDEN UPON ASSESSEE TO PROVE GENUINE CREDIT HAS BEEN DISCHARGED. THE ASSESSEE RELIED UP ON CERTAIN DECISIONS IN SUPPORT OF HIS CONTENTION. IT WAS ALSO EXPLAINED THAT ASSESSING OFFICER DISBELIEVED STATEMENT OF SHRI PRITAM SINGH BECAUSE MONEY WAS KE PT FOR ONE YEAR AT HOUSE. BUT, ASSESSING OFFICER FAIL ED TO CONSIDER THAT SHRI PRITAM SINGH WAS HAVING NO BANK ACCOUNT AND BEING AN AGRICULTURIST, HE HAS KEPT THE CASH AT HIS HOUSE. THE ASSESSING OFFICER ALSO IGNOR ED 21 THE AGREEMENT OF PURCHASE EXECUTED ON 15.10.2005 BY SHRI PREM KUMAR SINGLA, DOCUMENT WRITER WHO HAS DUL Y ENTERED IN HIS SEPARATE REGISTER ON A STAMP PAPER A ND GENERAL POWER OF ATTORNEY IS DULY REGISTERED WITH T HE SUB REGISTRAR, MOGA ON 22.07.2002, HELD BY THE ASSESSEE HAVING FULL AUTHORITY TO SELL THE HOUSE. IN VIEW OF THE STATEMENT OF SHRI PRITAM SINGH, SUPPORTED BY DOCUMENTARY EVIDENCE ON RECORD, ASSESSING OFFICER W AS NOT JUSTIFIED IN DISBELIEVING HIS STATEMENT. IT WA S SUBMITTED THAT THERE IS A GENERAL PROPOSITION THAT MORE THAN 35% PEOPLE IN INDIA HAVE BEEN KEEPING THEIR MO NEY AT THEIR HOUSE WITHOUT USING BANKING CHANNEL. THE ASSESSING OFFICER HAS, HOWEVER, FAILED TO MAKE ANY ENQUIRY IN THE MATTER WITH REGARD TO AVAILABILITY O F THE AMOUNT WITH SHRI PRITAM SINGH AND HIS SOURCE THEREO F. 20. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND DISMISSED THIS GROUN D OF APPEAL OF THE ASSESSEE. THE LD. CIT(APPEALS) ALSO OBSERVED THAT THE CREDITOR HAS GIVEN AMOUNT TO THE ASSESSEE IN SEPTEMBER, 2005 OUT OF THE SALE PROCEED S OF LAND RECEIVED BY HIM IN AUGUST, 2004. THE LD. CIT(APPEALS) ACCEPTED THAT AGRICULTURISTS KEEP SUCH HUGE CASH AT HOME FOR A LONG TIME FOR DEPOSITING TH E SAME INTO ANY BANK ACCOUNT. HOWEVER, IN THIS CASE, SINCE CASH IS SEIZED FROM THE ASSESSEE BY THE POLIC E, THEREFORE, EVIDENCES PRODUCED BY ASSESSEE ARE NOT RELEVANT AND FINDINGS OF THE ASSESSING OFFICER ARE NOT 22 UNJUSTIFIED. THE LD. CIT(APPEALS), ACCORDINGLY, CONFIRMED THE FINDINGS OF THE ASSESSING OFFICER AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 21. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSESSEE EXPLAINED THAT RS. 20 LACS WAS ADVANCED BY SHRI PRITAM SINGH AGAINST MORTGAGE OF HOUSE. IT WA S ALSO CLAIMED THAT THE AMOUNT DID NOT RELATE TO THE BUSINESS TRANSACTION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SHRI PRITAM SINGH FOR EXAMINATI ON IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTI ON IN THE MATTER. THE ASSESSEE PRODUCED SHRI PRITAM SING H BEFORE ASSESSING OFFICER AT ASSESSMENT STAGE AND HI S STATEMENT HAS BEEN RECORDED IN WHICH HE HAS CONFIRM ED THAT HE IS AGRICULTURIST AND HAS CONFIRMED TO HAVE GIVEN RS. 20 LACS TO THE ASSESSEE IN SEPTEMBER,2005 AFTER SELLING THE LAND IN AUGUST,2004. HE HAS CONFIRMED THAT HE HAS KEPT THE MONEY AT HIS HOUSE AFTER SELLING TH E LAND BECAUSE HE WAS NOT HAVING ANY BANK ACCOUNT. H E HAS FURTHER EXPLAINED IN HIS STATEMENT THAT HE HAD SOLD THE LAND TO SHRI DARSHAN SINGH, DHANDARI, DISTT. LUDHIANA AND THEREAFTER, HE HAS NOT PURCHASED ANY LAND. HE HAS FURTHER EXPLAINED THAT THE AMOUNT IN QUESTION WAS GIVEN TO THE ASSESSEE IN THE PRESENCE OF SHRI BALJIT SINGH, SUKHANAND AND NACHHATAR SINGH, RESIDENT OF SAIDO. HE HAS ALSO EXPLAINED IN HIS STATEMENT THAT IN LIEU OF THE MONEY, ASSESSEE HAS PROMISED TO GIVE HIM KOTHI. THE DEAL OF THE KOTHI WAS 23 STRUCK FOR RS. 25 LACS AGAINST WHICH SHRI PRITAM SI NGH HAS GIVEN RS. 20 LACS TO THE ASSESSEE WHICH WAS RECORDED ON THE STAMP PAPER OF RS. 300/-. HE HAS A LSO EXPLAINED THAT HE KNEW THE ASSESSEE FOR THE LAST 10 TO 15 YEARS. HE HAS FURTHER EXPLAINED WITH REGARD TO THE FACT THAT KOTHI WHICH WAS PROPOSED TO BE PURCHASED IS IN THE NAME OF SMT.MANJIT KAUR, SHRI PRITAM SINGH EXPLAINED THAT HE HAS CHECKED FROM THE DEED WRITER THAT THE POWER OF ATTORNEY OF THE KOTHI IN QUESTION IS W ITH THE ASSESSEE DUE TO WHICH HE HAD PAID EARNEST MONEY OF THE KOTHI TO THE ASSESSEE. HE HAS EXPLAINED THAT H E IS MAKING THE STATEMENT IN FULL SENSES WITHOUT ANY PRESSURE. THE STATEMENT MADE BY SHRI PRITAM SINGH THEREFORE, CLEARLY PROVED ON RECORD THAT HE HAS PAI D RS. 20 LACS TO THE ASSESSEE AFTER SELLING THE LAND AND SINCE HE WAS NOT HAVING ANY BANK ACCOUNT THEREFORE, HE HA S KEPT THE CASH WITH HIM AT HIS HOUSE. HE ALSO CONFI RMED IN HIS STATEMENT THAT SINCE POWER OF ATTORNEY OF TH E PROPERTY IN QUESTION WAS IN THE NAME OF THE ASSESSE E, THEREFORE, HE HAS GIVEN EARNEST MONEY TO THE ASSESS EE. THE STATEMENT OF SHRI PRITAM SINGH IS NOT ASSAILED TO THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. PB-100 IS AGREEMENT OF MORTGAGE DATED 15.10.2005 IN WHICH IT IS CLEARLY MENTIONED THAT THE ASSESSEE IS GENERAL ATTO RNEY OF THE PROPERTY IN QUESTION THROUGH REGISTERED DEED DATED 22.07.2002 AND SHRI PRITAM SINGH HAS GIVEN RS . 20 LACS TO THE ASSESSEE AS EARNEST MONEY AS AGAINST TOTAL CONSIDERATION OF RS. 25 LACS. 24 21(I) PB-106 IS THE GENERAL POWER OF ATTORNEY EXECUTED BY THE OWNER OF THE PROPERTY IN FAVOUR OF THE ASSESSEE WHICH IS REGISTERED DOCUMENT DATED 22.07.2 002 AUTHORIZING THE ASSESSEE TO MORTGAGE, SELL OR GIFT THE PROPERTY IN QUESTION TO ANYONE. PB-109 TO 114 ARE THE COPIES OF THE SALE DEED EXECUTED BY SHRI PRITAM SIN GH ON 18.08.2004 AND 19.08.2004 IN FAVOUR OF SHRI DARSHAN SINGH FOR SELLING THE PROPERTY THROUGH CONSIDERATION. THEREFORE, THE STATEMENT OF SHRI PR ITAM SINGH IS CORROBORATED BY THE REGISTERED POWER OF ATTORNEY IN HIS FAVOUR AS WELL AS MORTGAGE DEED AND THE SALE DEED EXECUTED BY SHRI PRITAM SINGH FOR AVAILAB ILITY OF THE CASH PRIOR TO ENTERING INTO THE TRANSACTION WITH THE ASSESSEE. THUS, ASSESSEE IS ABLE TO PROVE THE IDENTITY OF SHRI PRITAM SINGH, HIS CREDIT WORTHINES S AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE LD. CIT(APPEALS) IN HIS FINDINGS ACCEPTED THAT THE AGRICULTURISTS KEEP HUGE CASH AT HOME FOR A LONG TI ME FOR DEPOSITING THE SAME INTO BANK ACCOUNT, HOWEVER, THE AUTHORITIES BELOW HAVE FAILED TO TAKE NOTE OF THE F ACT THAT SHRI PRITAM SINGH EXPLAINED IN HIS STATEMENT T HAT SINCE HE WAS NOT HAVING ANY BANK ACCOUNT, THEREFORE , ENTIRE SALE AMOUNT WAS KEPT AT THE HOUSE. THEREFOR E, THE STATEMENT OF SHRI PRITAM SINGH IS CORRECT AND PROBABLE AND WOULD NOT LEAD TO ANY INFERENCE AGAINS T THE ASSESSEE. THE ASSESSING OFFICER HAS NOT BROUGH T ANY EVIDENCE ON RECORD THAT SALE CONSIDERATION RECEIVED BY SHRI PRITAM SINGH WAS USED SOMEWHERE ELSE FOR 25 PURCHASE OF ANY OTHER PROPERTY. SHRI PRITAM SINGH IN HIS STATEMENT HAD ALSO CONFIRMED THAT AFTER SELLING THE LAND, HE HAS NOT PURCHASED ANY LAND EXCEPT THE AMO UNT IN QUESTION HANDED OVER TO THE ASSESSEE THROUGH MORTGAGE AGREEMENT. THE ASSESSING OFFICER, THEREAF TER, DID NOT MAKE ANY FURTHER ENQUIRY TO IMPEACH THE STATEMENT OF SHRI PRITAM SINGH. IT IS, THEREFORE, CLEAR THAT STATEMENT OF SHRI PRITAM SINGH IS CORROBORATED BY THE EVIDENCES AND MATERIAL ON RECORD AND PROVES THA T HE HAS HANDED OVER RS. 20 LACS TO THE ASSESSEE. THE DECISIONS OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASES OF RAMANJIT SINGH (SUPRA), LAUL TRANSPORT CORPORATION (SUPRA) AND SHRI RAM NARAIN GOEL (SUPRA ) CLEARLY SUPPORT THE EXPLANATION OF THE ASSESSEE OF PROVING GENUINE CREDIT IN THE MATTER. THUS, THE ASSESSEE IS ABLE TO PROVE IDENTITY OF THE CREDITOR, HIS CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO N IN THE MATTER. THE INITIAL ONUS UPON ASSESSEE TO PROV E THE ABOVE INGREDIENTS UNDER SECTION 68 OF THE ACT ARE T HUS, DISCHARGED. HOWEVER, ASSESSING OFFICER HAS NOT BRO UGHT ANY MATERIAL AGAINST THE ASSESSEE TO REBUT THE EVID ENCES PRODUCED BY THE ASSESSEE. THE AUTHORITIES BELOW REJ ECTED THE EXPLANATION OF ASSESSEE AS TO WHY THE CASH WAS KEPT FOR ABOUT ONE YEAR AT THE HOUSE BY SHRI PRITAM SING H FOR WHICH EXPLANATION HAS ALREADY BEEN OFFERED AND WE F IND THE SAME TO BE REASONABLE AND PROPER. FURTHER, THE AUTHORITIES BELOW REJECTED THE EXPLANATION OF THE 26 ASSESSEE BECAUSE OF THE CASH SEIZED BY THE POLICE AUTHORITIES. 21(II) THE LD. CIT(APPEALS) ON ONE OF THE ISSUE H AS ALREADY NOTED THAT THE ENFORCEMENT DIRECTORATE HAVE INTIMATED THAT THE MATTER IS UNDER INVESTIGATION AN D IN PROGRESS, THEREFORE, THIS ISSUE COULD BE DECIDED BY THE ENFORCEMENT DIRECTORATE. SINCE ISSUE BEFORE AUTHOR ITIES BELOW WAS ADDITION UNDER SECTION 68 OF THE ACT, THEREFORE, THE ISSUE SHALL HAVE TO BE DECIDED ON TH E BASIS OF THE PARAMETERS PRESCRIBED FOR GENUINENESS OF THE TRANSACTION UNDER SECTION 68 OF THE ACT WHICH, IN OUR OPINION, ASSESSEE HAS BEEN ABLE TO PROVE THAT H E HAS RECEIVED THE MONEY IN QUESTION FROM SHRI PRITAM SIN GH THROUGH GENUINE TRANSACTION. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION FOR THE AUTHORITIES BELOW TO MAKE AND SUSTAIN THE ADDITION OF RS. 20 LACS. WE, ACCORDING LY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE TH E ADDITION OF RS. 20 LACS. GROUND NO. 3 OF APPEAL OF THE ASSESSEE IS ALLOWED. 22. ON GROUND NO. 4 ASSESSEE CHALLENGED THE DISALLOWANCE OF RS. 19,322/- ON ACCOUNT OF USE OF TELEPHONE AND MOTOR VEHICLE FOR PERSONAL PURPOSES. THE ASSESSING OFFICER DISALLOWED THESE EXPENSES BECAUSE NO LOG-BOOK OR DAY-TO-DAY RUNNING WAS KEPT AND EXPENSE S WERE NOT SUBJECT TO VERIFICATION. THE ELEMENT OF PERSONAL USAGE OF VEHICLES BY THE ASSESSEE AND HIS FAMILY MEMBERS CANNOT BE RULED OUT. THE ASSESSEE'S 27 COUNSEL ALSO SUBMITTED BEFORE LD. CIT(APPEALS) THAT NON- BUSINESS USE OF VEHICLES CANNOT BE RULED OUT. THE L D. CIT(APPEALS), THEREFORE, RIGHTLY HELD THAT SIMILARL Y PERSONAL AND NON-BUSINESS USE OF TELEPHONE CANNOT B E RULED OUT AND ACCORDINGLY RESTRICTED THE ADDITION T O RS. 19,322/- AND GRANTED RELIEF TO THE ASSESSEE PARTLY. 23. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. THE ASSESSEE HAS NOT PRODUCED ANY EVIDEN CE BEFORE US TO CONTRADICT THE FINDING OF FACT RECORDE D BY THE AUTHORITIES BELOW. SINCE THE EXPENSES WERE NOT SUBJECTED TO VERIFICATION AND NO LOG-BOOK OR DETAIL S HAVE BEEN MAINTAINED AND LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT NON-BUSINESS USE OF VEHICLES CANNOT BE RULED OUT, WOULD CLEARLY SUPP ORT THE FINDINGS OF AUTHORITIES BELOW THAT THESE EXPENS ES WERE NOT SUBJECT TO VERIFICATION AND WERE NOT SUPPO RTED BY THE VOUCHERS. THE DISALLOWANCE WAS, THEREFORE, JUSTIFIED. THIS GROUND IS ACCORDINGLY DISMISSED. 24. ON GROUND NO. 5, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 20,000/- ON ACCOUNT OF HOUSEHOLD WITHDRAWALS . THE ASSESSEE HAS SHOWN HOUSEHOLD WITHDRAWALS OF RS. 80,000/- TO SUPPORT THE FAMILY OF FOUR MEMBERS. TH E ASSESSING OFFICER, THEREFORE, ESTIMATED HOUSEHOLD EXPENDITURE IN A SUM OF RS. 1 LAC AND MADE DEDUCTIO N OF RS. 20,000/-. NO SPECIFIC ARGUMENTS WERE MADE BEFO RE LD. CIT(APPEALS), THEREFORE, LD. CIT(APPEALS) CONSI DERING 28 THE RETURN OF INCOME FILED BY ASSESSEE AT RS. 3,21, 460/- CONFIRMED THE ADDITION AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 25. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. THE ASSESSEE HAS FAILED TO PRODUCE DETAI LS OF HOUSEHOLD EXPENSES AS PER REQUIREMENT OF THE FAMILY . THEREFORE, AUTHORITIES BELOW WERE LEFT WITH NO ALTE RNATE EXCEPT TO ESTIMATE THE HOUSEHOLD EXPENDITURE. BEFOR E US, NO SUFFICIENT EVIDENCE OR MATERIAL IS PRODUCED TO JUSTIFY THE WITHDRAWALS IN A SUM OF RS. 80,000/-. THEREFORE, THIS GROUND HAS NO MERIT AND IS ACCORDIN GLY DISMISSED. 26. ON GROUND NOS. 6, 7 AND 8, ASSESSEE MERELY STAT ED THAT THE STATEMENT RECORDED BY ENFORCEMENT DIRECTOR ATE STANDS RETRACTED. THESE ARE, THEREFORE, GENERAL GR OUNDS AND CALL FOR NO FINDING BECAUSE IT RELATE TO DIFFER ENT MATTERS UNDER INVESTIGATION BY ENFORCEMENT DIRECTOR ATE. THESE GROUNDS, THEREFORE, DO NOT REQUIRE ANY FURTHE R FINDING. 27. NO OTHER POINT IS ARGUED OR PRESSED. 28. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 29 ITA 121/2012 29. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-II, LUDHIANA DATED 17.11. 2011 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER NOTED IN THE PENALTY ORDER THAT A BOVE ADDITIONS HAVE BEEN MADE AT THE ASSESSMENT STAGE, THEREFORE, THE SAME WOULD REVEAL THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME IN THE G ARB OF ADDITION TO CAPITAL ACCOUNT, UNSECURED LOANS AN D BOGUS AGREEMENT AND ADDITIONS HAVE BEEN MADE TOTALI NG TO RS. 59,34,000/-. SINCE THESE ADDITIONS HAVE BEE N CONFIRMED BY THE LD. CIT(APPEALS) WE WELL, THEREFOR E, ASSESSING OFFICER FOUND THAT ASSESSEE HAD CONCEALED HIS INCOME TO THE TUNE OF RS. 59,34,000/- BY FURNISHING INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY LE VIED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. TH E LD. CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE. 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSING OFFICER IMPOSED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE ADDITIONS MADE AS UNDER : I) CASH INTRODUCED IN RS. 3,30,000/- CAPITAL ACCOUNT II) SHRI JEET SINGH RS. 25,75,000/- S/O SHRI BALBIR SINGH III) SHRI GURDIWAN SINGH RS. 10,00,000/- IV) SHRI IQBAL SINGH RS. 29,000/- V) AGREEMENT ACCOUNT RS. 20,00,000/- TOTAL : RS. 59,34,000/- 30 31. IN ITA 1256/2009, WE HAVE DECIDED THE APPEAL OF THE ASSESSEE ON QUANTUM IN WHICH WE HAVE DELETED TH E ADDITIONS OF RS. 25,75,000/- IN RESPECT OF AMOUNT RECEIVED FROM SHRI JEET SINGH AND ALSO DELETED ADDI TION OF RS. 20 LCS ON ACCOUNT OF AMOUNT RECEIVED FROM SH RI PRITAM SINGH ON ACCOUNT OF MORTGAGE AGREEMENT THEREFORE, NOTHING SURVIVES IN FAVOUR OF THE REVENU E TO LEVY PENALTY ON THESE AMOUNTS. WE, ACCORDINGLY, SE T ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL TH E PENALTY ON THE ADDITIONS OF RS. 25,75,000/- AND RS. 20,00,000/-, TOTALING TO RS. 45,75,000/-. THIS PAR T OF GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 31(I) AS REGARDS THE ADDITION OF RS. 3,30,000/-, ASSESSEE DID NOT PRODUCE ANY EVIDENCE BEFORE THE AUTHORITIES BELOW TO EXPLAIN THE ADDITION TO THE CA PITAL ACCOUNT. ON THE ADDITION OF RS. 10 LACS IN RESPECT OF AMOUNT RECEIVED FROM SHRI GURDIWAN SINGH, HE HAS DENIED TO HAVE GIVEN ANY LOAN TO THE ASSESSEE IN HI S STATEMENT RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT, FURTHER NO EVIDENCE HAS BEEN FILED IN RESPECT OF AMOUNT RECEIVED OF RS. 29,000/- FROM SHRI IQBAL SIN GH. NO EXPLANATION HAVE BEEN GIVEN AT ANY STAGE TO EXPL AIN GENUINENESS ON RECEIPT OF THESE AMOUNTS. THEREFORE , THE ASSESSEE FAILED TO SUBSTANTIATE ANY EXPLANATION FIL ED BEFORE AUTHORITIES BELOW. THE ASSESSEE HAS THUS, F ILED INACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT L EVY OF THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. TH E 31 PENALTY WAS LEVIED BY THE ASSESSING OFFICER BECAUSE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LD. CIT(APPEALS). ON THIS ISSUE, WE HAVE ALSO CONFIRME D THE ADDITIONS IN THE ABSENCE OF ANY EVIDENCE ON RECORD. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE MAT TER AND AUTHORITIES BELOW ARE JUSTIFIED IN LEVYING PENALTY ON THESE THREE ADDITIONS. THESE GROUNDS OF APPEAL OF T HE ASSESSEE ARE DISMISSED. THE ASSESSING OFFICER SHAL L RE- COMPUTE THE LEVY OF PENALTY AS IS DIRECTED ABOVE. 32. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 33. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH JANUARY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD