Balbir Singh Maan, Sonepat V. ITO WARD - 1, Sonipat

ITA 1308/DEL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5424 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 28-06-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Question of law
• Section: 68; 80C; 143(3)

Judgement Text

1 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. _1308/DEL/2020 [Assessment Year: 2016-17 Balbir Singh Maan, H. No. 1230, Sector-15, Sonepat. PAN- ACUPM5771C Vs Income-tax Officer, Ward-1, Sonepat APPELLANT RESPONDENT Appellant by None Respondent by Sh. Om Prakash, Sr. DR Date of hearing 05.07.2022 Date of pronouncement 20.07.2022 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), Rohtak, dated 30.01.2020, pertaining to the assessment year 2016-17. The assessee has raised following grounds of appeal: 1. The learned Commissioner of Income tax (Appeals)-Rohtak erred on the facts and circumstances of the case and in law in upholding addition to the extent Rs. 806000/- income from undisclosed sources without appreciating the total agriculture income, past accumulated agricultural 2 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO income and withdrawal from bank. Relief Claimed: On the facts and grounds of the case and in the view of the judicial pronouncement it is humbly prayed that said amount also be allowed as agriculture income and withdrawal from bank. 2. The learned Commissioner of Income tax (Appeals)-Rohtak erred on the facts and circumstances of the case and in law in disallowing deduction of Rs. 150000/- under chapter VIA of Income Tax Act, 1961 without appreciating the fact that payment for expenditure on children education was made from banking channel. Relief Claimed: On the facts and grounds of the case and in the view of the judicial pronouncement it is humbly prayed that deduction of said amount be allowed under section 80C of Chapter VIA of Income Tax Act, 1961.” 3. That the appellant craves leave to add, alter, amend, modify, substitute, and delete any of the ground of appeal at or before the time of the final hearing of the appeal, if necessary.” 2. At the time of hearing no one appeared on behalf of the assessee. It is seen from the record that the assessee has not been attending the proceedings since 03.05.2021 despite the notices sent through speed post. The notices sent by the registry are returned with the remark “left”. The assessee has not provided any other address to the Registry. Therefore, the appeal is taken up for hearing in the absence of the assessee and is being decided on the basis of material available on record. 3. Facts giving rise to the present appeal are that in this case the assessee filed its return of income declaring income of Rs. 2,87,500/- and agricultural income of 3 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO Rs. 8,00,000/- on 12.08.2017. The case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the income-tax Act, 1961 (in short “the Act”), was framed vide order dated 22.12.2018. The Assessing Officer while framing the assessment made addition of Rs. 13,06,000/- on account of cash deposits in the bank. The Assessing officer also disallowed the claim of deduction under Chapter VIA of the Act at Rs. 1,50,000/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who partly allowed the appeal. Therefore the learned CIT(Appeals) deleted the addition of Rs. 5,00,000/-. Aggrieved against this the assessee is in appeal before this Tribunal. 4. Learned Sr. DR strongly supported the orders of the authorities below and submitted that the learned CIT(Appeals) has considered the facts and gave part relief to the assessee. The assessee failed to substantiate its claim of cash deposits and also the proof relating to deduction under Chapter VIA of the Act. 5. I have heard learned Sr. DR and gone through the material available on record. The learned CIT(Appeals) has given a finding of fact by observing as under; 5.2 The assessee’s contention that land was taken on lease, family agriculture income was deposited by him only and he had income from sale of milk as he was rearing cattle is not substantiated by way of lease agreements, proof of cattle rearing and milk selling and only the written submission cannot give him benefit. Assessee’s submission that every year 4 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO he is depositing the cash in similar manner is also not enough evidence to prove the source of cash deposits in the current year as the onus lies on him to establish the source of money deposited in his account. No explanation has been given regarding the entries of the cash deposits and no proper cash flow statement has been submitted to show income from agriculture and expenses thereof. It is also not known or proved that income from agriculture belonging to his family was deposited only in his account and not of other co-sharers. During the remand proceedings proper opportunity was given by the AO to give documentary evidence regarding entries in the bank account, agriculture income, confirmed copy of account of commission Agent, lease agreements, Dairy income, details and activities of family members, Ration card etc. but no compliance was made on 22/08/2019 and later on 06/09/2019 and 27/09/2019 also. The confirmation given by one Commission Agent Sh. Gopal Dau has no details such as his address or TIN no., PAN or copy of account. There is no verification of bills of sales of crops in the name of Ravi. This shows that assessee has no proper explanation to furnish and substantiate the source of cash deposits in his account. However, benefit of cash deposits of Rs. 5,00,000/- is being given to the assessee considering that he is showing agricultural income and has ownership of agriculture land which would bring him income and would also account for some savings. 5.3 The burden of proof regarding the cash deposits is on the assessee both in the case of cash credit and money deposited in the bank account, as held in the following decisions - The Supreme Court in the cases of Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) and Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 (SC) held that the law is well- settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. Where the nature and source of a receipt, whether it be of money or other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that the income is from any particular source. In the case of Shankar Industries v. CIT [1978] 114 ITR 689 (Cal.), the Calcutta High Court held that it is necessary for the assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof includes proof of the identity of his creditor, the capacity of such creditor to advance the money and lastly the genuineness of the transaction. Only after the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts to the department.The Madras High Court in the case of V. Datchinamurthy v. 5 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO Asstt. Director of Inspection [1984] 149 ITR 341 (Mad.) held that it has been a long accepted principle of income-tax law that an assessee is obliged to explain the nature and source of cash credits in his accounts and in the absence of satisfactory explanation on his part, the assessing authorities can very well proceed to treat the amount of cash credits in question as representing the taxpayer’s income. The Kerala High Court in the case of ITO v. Diza Holdings (P.) Ltd. [2002] 120 Taxman 539 (Ker.) held that it is clear on the terms of section 68 that the burden is on the assessee to offer a satisfactory explanation about the nature and source of the amount found credited in the books of the assessee. It is also clear that the mere furnishing of particulars is not enough. The mere fact that payment was made by way of account payee cheque is also not conclusive. Therefore, the Assessing Officer would be entitled to consider whether notwithstanding the fact that the payments were made by cheques, whether the assessee has satisfactorily explained the nature and source of the amounts found credited in the books of the assessee. The Rajasthan High Court in the case of CIT v. R.S. Rathore [1995] 212 ITR 390 (Raj.) held that while explaining the various credits and investments, it is possible that the assessee may be successful in explaining some of them, but that does not by itself mean that the entire investments has to be considered as explained. It is each and individual entry on which the mind has to be applied by the taxing authority when an explanation is offered by the assessee. The Calcutta High Court in the case of C. Kant & Co. v. CIT [1980] 126 ITR 63 (Cal.) held that in the case of cash credit entry it is necessary for the assessee to prove not only the identity of the creditors but also to prove the capacity of the creditors to advance the money and the genuineness of the transactions. On whom the onus of proof lies in a particular case is a question of law. But whether the onus has been discharged in a particular case is a question of fact. In the present case the onus to establish the source of money deposited (Rs 10 lacs) has not been discharged by the assessee. On this issue, reliance is also placed on the following case laws: Commissioner Of Income-Tax. vs P. Mohanakala. 291 ITR 278(SC); Sethi Cotton Traders 286 ITR 548(P&H) HELD- “A perusal of the concurrent findings recorded by all the authorities below reveals that it is a case where the assessee was unable to prove the genuineness of the credit standing in the name of Sh. Surinder Kumar. The assessee was further unable to prove not only his capacity but also identifiable source to advance the loan of Rs. 50,000 to the assessee. The assessee could not lead any evidence to the satisfaction of the Assessing Officer to prove the genuineness of the credit shown in the name of Sh. Surinder Kumar. In spite of a clear- 6 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO cut finding of fact recorded by all the authorities, the appellant has sought to challenge the same by raising the substantial question of law as has been referred to above”; Gumani Ram Siri Ram 98 ITR 337 (P&H); Sat PARKASH Ram Naranjan 100 ITR 130 (P&H) - “Now the contention of the appellant is that assuming that he had to establish the case put forward by him, it does not follow as a matter of law that the amounts in question were income received or accrued during the previous year, that it was the duty of the department to adduce evidence to show from what source the income was derived and why it should be treated as concealed income. In the absence of such evidence, it is argued, the finding is erroneous. We are unable to agree. Whether a receipt is to be treated as income or not, must depend very largely on the facts and circumstances of each case. In the present case the receipts are shown in the account books of a firm of which the appellant and Govindaswamy Mudaliar were partners. When he was called upon to give explanation he put forward two explanations, one being a gift of Rs. 80,000 and the other being receipt of Rs. 42,000 from business of which he claimed to be the real owner. When both these explanations were rejected, as they have been, it was clearly open to the Income-tax Officer to hold that the income must be concealed income. There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature." (Emphasis supplied); Raunaq Ram Nand Lai. vs Commissioner Of Income Tax And Another- 254 ITR 617(P&H); D. Siva Sankara Rao (Dr.) v.ITO (2013) 212 Taxman 151 (AP) (HC). 5.4 In view of the above discussed facts of the case and position of law it is held that the cash deposits (except Rs 5 lacs) are not from disclosed sources of income and are taxable. The addition made by the AO of Rs 8,06,000/- is confirmed. The assessee has also not furnished proof of payment for which deduction under chapter VIA has been claimed of Rs 1,50,000/- so the same is disallowed. 6. The above finding of fact of the learned CIT(Appeals) is not controverted by the assessee by filing any material in support of its claim regarding earning of 7 ITA No. 1308/Del/2020 Balbir Singh maan Vs. ITO agricultural income and other sources. Therefore, the order of the learned CIT(Appeals) is upheld and the grounds raised in the appeal are rejected. 7. In the result, assessee’s appeal is dismissed. Order pronounced in open court on 20 th July, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI