Sh. Sardul Singh, Dhuri V. ITO, W-2, Malerkotla

ITA 1257/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0643 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Salary income; Reason to believe; Set aside
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.1257/CHD/2018 ASSESSMENT YEAR: 2009-10 SH. SARDUL SINGH VS. THE ITO S/O CHANAN SINGH, WARD-2, MALERKOTLA KHALEEL PATTI, VPO SHERPUR TEHSIL, DHURI PAN/TAN NO. DAKPS5390J (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL, ADVOCATE REVENUE BY : SH. MANJIT SINGH, CIT DR DATE OF HEARING : 27/03/2019 DATE OF PRONOUNCEMENT : 27/03/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 21/08/2018 OF LD. CIT(A)-, LUDHIANA. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-2, LUDHIANA HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER T HAT THERE WAS VALID REASON WITH THE ASSESSING OFFICER FOR TAKING THE RECOURSE TO TH E ISSUANCE OF NOTICE U/S 148. 2. THAT THERE WAS NO REASON TO BELIEVE WITH THE ASS ESSING OFFICER FOR REOPENING THE CASE U/S 148. 3. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, THE CONFIRMATION OF ADDITION OF RS. 3,50,000/- BEING THE DEPOSIT IN THE SAVING BANK ACCOUNT OF THE ASSESSEE WAS UNCALLED FOR AND THE CIT(A) HAS NOT CO NSIDERED THE DETAILED EXPLANATION OF THE ASSESSEE. 4. THAT THE ADDITION HAS BEEN MADE AGAINST THE FACT S AND CIRCUMSTANCES OF THE CASE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 3. GROUND NOS. 1 & 2 WAS NOT PRESSED WHILE GROUND N OS. 4 & 5 ARE GENERAL IN NATURE SO THESE GROUNDS DO NOT REQUIRE ANY ADJUDICA TION ON MY PART. 4. THE ONLY GRIEVANCE OF THE ASSESSEE IN GROUND NO. 3 RELATES TO THE CONFIRMATION OF ADDITION OF RS. 3,50,000/-. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSIN G OFFICER RECEIVED THE AIR INFORMATION THAT THE ASSESSEE HAD DEPOSITED THE SUM OF RS. 31,00,000/- IN CASH IN 2 HIS SAVING BANK ACCOUNT WITH STATE BANK OF PATIALA( SBOP). THEREFORE THE ASSESSING OFFICER INITIATED THE PROCEEDINGS UNDER S ECTION 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT), AND I SSUED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE THE ASSESSEE FURNISHED THE RETURN OF INCOME DECLARING AN INCOME AT RS. 48,000/- AND AGRICULTURAL INCOME OF R S. 2,00,000/-. THE ASSESSING OFFICER HOWEVER, MADE THE ADDITION OF RS. 3,50,000/ - BY OBSERVING THAT THE REPLY OF THE ASSESSEE WAS ACCEPTABLE TO CERTAIN EXTENT AN D THAT THE ASSESSEE WAS UNABLE TO FURNISH THE INFORMATION / DOCUMENTARY EVI DENCE FOR THE CASH DEPOSIT OF RS. 3,50,000/-, ACCORDINGLY INCOME WAS ASSESSED AT RS. 3,98,000/- ALONGWITH AGRICULTURAL INCOME OF RS. 2,00,000/-. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSION WHICH READ AS UNDE R: IT IS RESPECTFULLY SUBMITTED THAT THE INCOME TAX OF FICER, WARD-2, MALERKOTLA PASSED ASSESSMENT ORDER U/S 143(3) READ WITH SECTION 147 O F THE INCOME TAX ACT, 1961 IN THE ABOVE NOTED CASE. THERE ARE CASH DEPOSITS OF RS.31,00,000/- IN BANK A CCOUNT OF SAID SH. SARDUL SINGH. THE LEARNED INCOME TAX OFFICER ACCEPTED CASH DEPOSI TS OF RS.23,00,000/- IN BANK ACCOUNT OUT OF SALE PROCEEDS OF AGRICULTURAL LANDS. HE FURTHER ACCEPTED CASH DEPOSITS OF RS.4,50,000/- IN BANK ACCOUNT OUT OF CA SH WITHDRAWALS FROM SAME ACCOUNT. THE ASSESSEE PRAYED THAT HE DEPOSITED BALA NCE AMOUNT OF RS.3,50,000/- OUT OF AGRICULTURAL INCOME (WHICH HAS ASSESSED IN A SSESSMENT ORDER BY THE LEARNED INCOME-TAX OFFICER) AND PAST SAVINGS FROM AGRICULTU RAL INCOME. THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS BEFORE INCOME TAX OFFI CER WITH CERTIFICATES REGARDING AGRICULTURAL INCOME, SALE PROCEEDS OF AGRICULTURAL LANDS AND CASH WITHDRAWALS FROM BANK ACCOUNT AND DEPOSITS IN HIS BANK ACCOUNT DURIN G THE YEAR UNDER CONSIDERATION. THE INCOME TAX OFFICER MADE ADDITION OF RS.3,50,000/-. THE ASSESSEE PRAYS THAT ADDITIONS MADE BY THE LEARNED INCOME TAX OFFICER MAY KINDLY BE DELETED IN VIEW OF FACTS & CIRCUMSTANCES EXPLAINED AS UNDER :- 1. THAT THE ASSESSEE IS AN AGRICULTURIST AND FILED HIS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 OF THE INCOME TAX ACT, 1 961 SHOWING INTEREST INCOME AT RS.48000/- AND AGRICULTURAL INCOME OF RS.200000/- F OR THE YEAR UNDER CONSIDERATION. THE ASSESSEE PRAYED THAT THE DEPOSITED RS. 3,50,000 /- (AGRICULTURAL INCOME AND PAST AGRICULTURAL SAVINGS). THIS INCOME IS NOT TAXA BLE. THE ASSESSEE HAS NO BUSINESS, NO RENTAL INCOME, NO SALARY INCOME, NO SPECULATION INCOME AND NO OTHER TAXABLE INCOME EXCEPT MERE INTEREST FROM BANK AND AGRICULTU RAL INCOME. THE LEARNED INCOME TAX OFFICER HAS ALSO ACCEPTED AGRICULTURAL INCOME AT RS.2,00,000/- IN ASSESSMENT ORDER AND COULD NOT FIND OUT ANY TAXABLE INCOME OR BUSINE SS EXCEPT AGRICULTURE. IT IS WORTH IMPORTANT TO MENTIONED HER E THAT THE ASSESSEE IS AN AGRICULTURIST EARNING AGRICULTURAL INCOME FROM AGRI . LANDS. SALE PROCEEDS OF AGRICULTURAL LAND DEPOSITED IN BANK ACCOUNT MEANS T HE ASSESSEE HAS SOLD OUT SOME OF HIS AGRICULTURAL LANDS. IT MEANS AGRICULTURAL IN COME OF ASSESSEE WAS MORE THAN INCOME OF CURRENT YEAR AS AGRICULTURAL LANDS WERE M ORE THAN AGRICULTURAL LANDS OF CURRENT YEAR. 2. THAT IN ABSENCE OF ANY SOURCE OF TAXABLE INCOME, AN Y ADDITION MADE TO INCOME OF AM AGRICULTURIST (WHO EARNS AGRICULTURAL INCOME WHICH IS TAX FREE) MEANS ADDITION IN AGRICULTURAL INCOME. THE ASSESSEE HAS NO OTHER SOURCE OF INCOME. THE LEARNED INCOME TAX OFFICER ALSO COULD NOT PROVE OTH ER SOURCE OF INCOME EXCEPT AGRICULTURAL INCOME FROM AGRICULTURAL LANDS AND MER E AMOUNT OF INTEREST INCOME). 3. THAT THE ASSESSEE DEPOSITED A SUM OF RS.8,00,000 /- IN HIS BANK ACCOUNT ON 07/05/2008. SOURCES OF THIS DEPOSITS WERE WITHDRAWA LS OF A SUM OF RS.4,50,000/- FROM THIS ACCOUNT ON 04/04/2008 AND RS. 3,50,000/- FROM AGRI. INCOME AND SAVINGS OF PAST YEARS. THE LEARNED INCOME TAX OFFICER ERRED IN STATING ADDITION OF 3 RS .3. 50,000/- AS UNEXPLAINED CASH DEPOSITS IN BANK ACCOU NT AND NOT ACCEPTED DEPOSITS FROM AGRICULTURAL INCOME AND PAST SAVINGS. IN SUPPORT OF THE FACT THAT WHEN ASSESSEE HAS ONLY AGRICULTURAL INCOME AND MERE INTEREST INCOME FROM BANK AND NO OTHER BUSINESS OR TAXABLE INCOME AND WHEN INCOME TAX OFFICER ACCEPTED AGRICULTURAL INCOME THE N THERE CAN BE PAST SAVINGS/ AGRICULTURAL INCOME WITH ASSESSEE, THE INCOME TAX A PPELLATE TRIBUNAL 'SMC' BENCH, CHANDIGARH IN FAVOUR OF ASSESSEE WITH SIMILAR FACTS IN CASE OF CIT(APPEALS)-2, LUDHIANA VS. BALWANT SINGH, VPO: DHADHOGAL, MALERKO TLA FOR THE ASSESSMENT YEAR 2009-10 ALLOWED THE APPEAL OF ASSESSEE AND DELETED ADDITION STATING UNDER : '... IN THE PRESENT CASE, IT IS ADMITTED FACT ASSES SEE IS ONLY AGRICULTURIST AND HAS INCOME FROM AGRICULTURAL ACTIVITIES AND INTEREST. T HERE IS NO OTHER SOURCE OF INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS ACCEPTED CURRENT YEAR'S AGRICULTURE INCOME AS WELL AS GIVEN PART BENEFIT OF AGRICULTURE INCOME AND FROM SALE OF LAN D. THEREFORE THE CONTENTION OF THE ASSESSEE CANNOT BE REJECTED IN VIEW OF THE EVIDENCES AND MATERIAL PLACED ON RECORD. MERELY BEC AUSE THERE WAS A GAP BETWEEN AVAILABILITY OF THE CASH WITH THE ASSESSEE AND DEPOSIT IN THE BANK ACCOUNT IS NO GROUND TO DISBELIEVE THE EXPLANATION OF THE ASSESSEE. THE AUTHORITIES BELOW WERE, THEREFORE, UNJUSTIFIED IN S USTAINING THE ADDITION OF RS. 7,40,000/-. I ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 7,40,000/- ' COPY OF ORDER ATTACHED HEREWITH. IN VIEW OF THE FACTS & CIRCUMSTANCES OF THE CASE, A SSESSMENT ORDER PASSED BY THE LEARNED INCOME TAX OFFICER SHOULD BE SET ASIDE AND ADDITION OF RS.3,50,000/- SHOULD BE DELETED. HOPE TO BE ACCOMMODATED AND OBLIGED. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE OBSERVED THAT THE ASSESSEE IS AN AGRICULTURIST EARNING AGRIC ULTURAL INCOME FROM AGRICULTURE LAND HELD BY HIM. THE LD. CIT(A) ALSO OBSERVED THAT THE ASSESSEE FAILED TO SUPPORT HIS CONTENTION WITH ANY DOCUMENTARY EVIDENC E WITH REGARD TO THE SOURCE OF CASH DEPOSITS. HE ALSO CONSIDERED THE CON TENTION OF THE ASSESSEE THAT THE AGRICULTURAL INCOME FOR THE YEAR UNDER CONSIDER ATION WAS LESS THAN THE INCOME OF EARLIER YEARS AND HIS AGRICULTURE LAND IN EARLIER YEARS WAS MORE THAN THE AGRICULTURE LAND OF THE CURRENT YEAR AND THAT T HE ASSESSEE HAD NO OTHER SOURCE OF INCOME. THE LD. CIT(A) CONFIRMED THE ADDI TION MADE BY THE ASSESSING OFFICER. 8. NOW THE ASSESSEE IS IN APPEAL. 9. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT EARN ING OF AGRICULTURAL INCOME BY THE ASSESSEE WAS NOT DOUBTED AND HE WAS HAVING S UFFICIENT EARNING FROM THE AGRICULTURAL ACTIVITY IN THE PAST AS WELL AS IN THE YEAR UNDER CONSIDERATION. IT WAS STATED THAT THE DEPOSIT IN THE BANK ACCOUNT WAS MAD E IN THE MONTH OF APRIL FROM THE SALE PROCEEDS OF THE AGRICULTURAL CROP. IT WAS FURTHER STATED THAT THE ASSESSING OFFICER HAD ACCEPTED THE AGRICULTURAL INC OME OF RS. 2,00,000/- FOR THE YEAR UNDER CONSIDERATION AND IN THE PRECEDING YEAR THE ASSESSEE WAS ENGAGED 4 IN THE AGRICULTURAL ACTIVITY HAVING MORE LAND THAN THE LAND IN THE YEAR UNDER CONSIDERATION THEREFORE THE DOUBT PAST SAVINGS AS W ELL AS EARNING OF AGRICULTURAL INCOME AS A SOURCE FOR DEPOSIT IN THE BANK ACCOUNT WAS NOT JUSTIFIED. 10. IN HIS RIVAL SUBMISSIONS THE LD. CIT DR SUPPORT ED THE ORDERS OF THE AUTHORITIES BELOW. 11. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT IS NOT IN DISPUTE THAT THE ASSESSEE IS AN AGRICULTURIST AND THE ASSESSING OFFI CER ACCEPTED THE AGRICULTURAL INCOME DISCLOSED BY THE ASSESSEE AT RS. 2,00,000/- FOR THE YEAR UNDER CONSIDERATION. IN THE INSTANT CASE THE CONTENTION OF THE ASSESSEE THAT HE WAS HAVING MORE LAND FOR CULTIVATION IN THE PRECEDING Y EARS THAN THE LAND CULTIVATED DURING THE YEAR UNDER CONSIDERATION HAS NOT BEEN RE BUTTED. THEREFORE THE EXPLANATION OF THE ASSESSEE THAT HE HAS HAVING SUFF ICIENT AGRICULTURAL INCOME FROM THE EARLIER YEARS AS WELL AS THE YEAR UNDER CO NSIDERATION FOR MAKING THE DEPOSIT OF RS. 3,50,000/- IN HIS BANK ACCOUNT CANNO T BE BRUSHED ASIDE. FURTHERMORE NEITHER THE ASSESSING OFFICER NOR THE L D. CIT(A) HAS GIVEN ANY COGENT REASON FOR DOUBTING THE DEPOSIT OF RS. 3,50, 000/- IN THE BANK ACCOUNT. IN OTHER WORDS IT HAS NOT BEEN MENTIONED EITHER BY THE ASSESSING OFFICER OR THE LD. CIT(A) THAT THE DEPOSIT OF WHICH PARTICULAR DATE IN THE BANK ACCOUNT WAS UNEXPLAINED. I THEREFORE CONSIDERING THE TOTALITY O F THE FACTS DELETE THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A). 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 27/03/2019. ) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 27/03/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR