Sh. Bhupinder Singh, Chandigarh V. ITO, Chandigarh

ITA 167/CHANDI/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0074 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Peak credit
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 167/CHD/2016 (ASSESSMENT YEAR: 2009-10) SH.BHUPINDER SINGH, VS. THE INCOME TAX OFFICER, C/O FCI R.O. PUNJAB, WARD 4(3), BAY NO.34-38, CHANDIGARH. SECTOR 31A, CHANDIGARH. PAN NO. ALSPK9823A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 06.05.2016 DATE OF PRONOUNCEMENT : 06.05.2016 O R D E R PER H.L.KARWA, VP : THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH DATED 29.1.2016 RELATING TO ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL : 2 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSI TION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 644/11-12 DATED 29.01.2016 HAS ERRED IN DISMISSING THE APPEAL FILED BEFO RE ITS GOODSELF. 2 THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. A.O IN MAKING ADDITION OF RS.5,96,000/-ASUNDISCLOSE D INCOME U/S 68 OF THE ACT BEING THE CASH DEPOSIT IN THE BANK ACCOUNT OF THE APPELLANT EVEN WHEN THE APPELLANT HAD FULLY EXPLAINED THE SOURCE OF SUCH CA SH DEPOSIT IN THE BANK ACCOUNT. 3. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE IS A DRIVER AND IS A N EMPLOYEE OF FOOD CORPORATION OF INDIA (FCI). FOR THE ASSESS MENT YEAR 2009-10, THE ASSESSEE SUBMITTED HIS RETURN OF INCOM E DECLARING TOTAL INCOME AT RS.1,98,135/- ON 23.7.200 9. THE SAID RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 12.11.2009. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS (COMPUTER ASSISTED SCRUTINY SEL ECTION). THE ASSESSING OFFICER ISSUED STATUTORY NOTICES UNDE R SECTIONS 143(2) AND 142(1) OF THE ACT. THE ASSESSING OFFIC ER NOTICED THAT THE ASSESSEE HAD MADE CASH DEPOSITS IN HIS SAV ING BANK ACCOUNT MAINTAINED WITH PUNJAB STATE COOPERATIVE BA NK AMOUNTING TO RS.16,63,000/-. THE ASSESSING OFFICER ASKED 3 THE ASSESSEE TO SUBMIT EXPLANATION/DOCUMENTARY EVID ENCE REGARDING THE SOURCE OF CASH DEPOSITS AND UTILIZATI ON OF WITHDRAWALS FROM THE SAID BANK ACCOUNT. IN RESPON SE TO THE SAID QUERY, THE ASSESSEE FURNISHED CASH FLOW CHART. THE ASSESSEE HAD ALSO FURNISHED COPY OF AGREEMENT TO SE LL CLAIMING TO HAVE SOLD SOME AGRICULTURAL LAND TO ONE SHRI BAL KAR SINGH, S/O SHRI CHAND SINGH, VILLAGE RAMPUR BHUDDA, DERA B ASSI. THE ASSESSING OFFICER ON 30.11.2011 ASKED THE ASSES SEE TO FURNISH DOCUMENTS REGARDING OWNERSHIP OF LAND ALLEG ED TO BE SOLD AND REGISTRATION PAPERS I.E. SALE DEED. IN R ESPONSE TO THE AFORESAID QUERY, THE ASSESSEE FURNISHED REPLY D ATED 12.12.2011, WHICH READS AS UNDER : 1. COPY OF TITLE DEED (OWNERSHIP DOCUMENT IN FAVOUR OF ASSESSEE) OF PROPERTY IN RESPECT OF WHICH ASSESSEE ENTERED IN TO AGREEMENT TO SELL AND RECEIVED BIANA OF RS.6,00,000 /- IN CASH IS ENCLOSED HEREWITH. 2. IT IS FURTHER SUBMITTED THAT AT THE TIME WHEN THE ASSESSEE ENTERED INTO AN AGREEMENT, AGREED TO SELL THIS PROP ERTY AND RECEIVED BIANA OF RS.6,00,000/-, THE TITLE WAS IN FA VOUR OF MOTHER OF ASSESSEE. THE MOTHER HAD GIVEN HER VERBAL ASSENT TO THE ASSESSEE TO SELL THIS PROPERTY AND HENCE THE AS SESSEE ENTERED INTO THE AGREEMENT. HOWEVER AS THE DEAL PRO GRESSED FURTHER, THE BROTHERS OF THE ASSESSEE OBJECTED TO T HE DEAL AND THREATENED THE ASSESSEE WITH LEGAL CONSEQUENCES. WH EN THIS EPISODE CAME TO THE KNOWLEDGE OF PROPOSED PURCHASER, HE DIRECTED THE ASSESSEE TO GET THE TITLE CLEARED AND NOC FROM OTHER BROTHERS. THIS TRANSACTION COULD NOT MATURE IN TIME DUE TO SLOW LEGAL PROCESS. HOWEVER AFTER LOTS OF STRUGG LE, THE ASSESSEE AND OTHER BROTHERS GOT THE LEGAL TITLE IN TH EIR FAVOUR FROM THEIR MOTHER BY REGISTERED CONVEYANCE DEED, IN 2010. BUT NOW THE PURCHASER IS NOT PAYING THE BALANCE AMO UNT AND IS ASKING FOR PAYMENT OF DOUBLE THE AMOUNT RECEIVED BY 4 ASSESSEE. DUE TO ALL THIS, THE TRANSACTION HAS NOT COMPLETED TILL DATE. THE TITLE/CONVEYANCE DEED ABOVE REFERRED AND ALSO AT SR. NO.L ABOVE WAS REGISTERED IN FAVOUR OF ASSESSEE FROM HIS MOTHER IN 2010 ONLY. 3. FROM ABOVE, THE SOURCE OF DEPOSIT OF RS.6,00,000/- I N BANK ACCOUNT OF ASSESSEE DURING THE PERIOD 17.04.2008 T O 25.04.2008I S THE AMOUNT RECEIVED FROM ABOVE REFERR ED AGREEMENT TO SELL. 4. AS REGARDS THE GENUINENESS OF AGREEMENT, THE ASSES SEE HAS SUPPLIED THE IDENTITY AND COMPLETE ADDRESS OF PROPOS ED PURCHASER, PROVIDED THE COPY OF AGREEMENT TO SELL, COPY OF OWNERSHIP DOCUMENT AND GENUINE AND VA LID REASON OF DISPUTE BETWEEN THE ASSESSEE AND PRO POSED PURCHASER WHICH RESULTED INTO NON-MATURITY OF TRANSACTION TILL DATE. 4. AFTER CONSIDERING THE ABOVE REPLY, THE ASSESSIN G OFFICER NOTED THAT NO REGISTRATION DEED WITH REGARD TO THE ALLEGED TRANSACTION WAS MADE. ACCORDING TO HIM, IN FACT, THE LAND IS STILL IN THE NAME OF THE ASSESSEE. THE ASS ESSING OFFICER FURTHER NOTED THAT THE AGREEMENT TO SELL DA TED 14.4.2008 DID NOT BEAR SIGNATURE OF THE SELLER I.E. THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ALLEGED AGREEMENT TO SELL WAS N OTHING BUT A SELF-SERVING DOCUMENT CREATED AS AN AFTER-THOUGHT TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT. THE AS SESSING OFFICER ALSO OBSERVED THAT EVEN IF THE PRINCIPLE OF PEAK CREDITS IS APPLIED IN THIS CASE ON THE BASIS OF CASH FLOW S TATEMENT FURNISHED BY THE ASSESSEE, THE SUM FOR WHICH THE SO URCE WAS UNEXPLAINED CAME TO RS.5,96,000/- ONLY. THEREFORE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.5,96,00 0/- UNDER 5 SECTION 68 OF THE ACT. 5. ON APPEAL THE LEARNED CIT (APPEALS) CONFIRMED T HE ADDITION, OBSERVING AS UNDER : 6.3 SUBMISSION OF THE APPELLANT IS CONSIDERED. AO HAS OBSERVED THAT AGREEMENT TO SELL DATED 14.04.2008 DOES NOT BEAR SIGNATURE OF THE SELLER I.E. THE APPELLANT. FROM THE SUBMISSION MADE IT IS EVIDENT THAT THE AGRICULTURE LAND AGAINS T WHICH ASSESSEE IS TO HAVE RECEIVED BIANA WAS NOT IN THE NAM E OF THE ASSESSEE. THE SALE DEED IS NOT REGISTERED AND THE TR ANSACTION DID NOT MATERIALIZED. AO HAS RIGHTLY COME TO THE CO NCLUSION THAT THIS IS A SELF SERVING DOCUMENT CREATED AS AN AFTERT HOUGHT TO EXPLAIN THE SOURCE OF DEPOSITS. THE SUBMISSION OF TH E ASSESSEE ARE TOTALLY BASELESS AS HOW CAN HE RECEIVE ADVANCE AGAINST PROPERTY WHICH WAS NOT IN HIS NAME. THEREFORE ADDITI ONS MADE BY THE AO IS UPHELD. GROUND OF APPEAL NO.2 IS DISMISSED. 6. AGAINST THE ABOVE ORDER OF THE LEARNED CIT (APP EALS), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. SHR I PARIKSHIT AGGARWAL, LEARNED COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE ASSESSEE HAS SUPPLIED COMPLETE ADDRESS OF PROPOSED PURCHASER , PROVIDED COPY OF AGREEMENT TO SELL, COPY OF OWNERSH IP DOCUMENT AND THE REASONS WHICH RESULTED INTO NON- MATERIALIZATION OF TRANSACTION. THE LEARNED COUNSE L FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ASSESSING OFF ICER DID NOT MAKE ANY INDEPENDENT ENQUIRY FROM THE PROPOSED PURC HASER. ACCORDING TO HIM, IT WAS INCUMBENT UPON THE ASSESSI NG OFFICER TO MAKE NECESSARY ENQUIRY FROM THE 6 PURCHASER/CREDITOR AS PER THE PROVISIONS OF SECTION 68 OF THE ACT. IN SUPPORT OF THE ABOVE CONTENTION, THE LEA RNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE HON' BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. NISHAN INDO COMM ERCE LTD., 101 DTR 413 (2014) (CAL.HC). THE LEARNED COU NSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE ALLEGATION OF THE AUTHORITIES BELOW THAT THE AGREEMENT TO SELL WAS NO T REGISTERED, IS ALSO BASELESS BECAUSE THERE IS NO SU CH REQUIREMENT IN LAW. AS REGARDS THE OTHER ALLEGATIO N OF THE REVENUE AUTHORITIES THAT THE LAND IS STILL IN THE N AME OF THE ASSESSEE AND THE AGREEMENT TO SELL DOES NOT BEAR TH E SIGNATURE OF SELLER, IS ALSO BASELESS, SUBMITTED TH E LEARNED COUNSEL FOR THE ASSESSEE. ACCORDING TO HIM, WHEN I T IS AN UNDISPUTED FACT THAT THE DEAL DID NOT MATERIALIZE D UE TO DISPUTE BETWEEN THE FAMILY MEMBERS OF THE ASSESSEE, THE TITLE OF THE LAND CONTINUED IN THE NAME OF THE ASSESSEE. AS REGARDS THE SIGNATURE OF THE ASSESSEE NOT BEING THERE ON TH E AGREEMENT TO SELL, THE LEARNED COUNSEL FOR THE ASSE SSEE STATED THAT THE AGREEMENT WAS PREPARED IN DUPLICATE, ONE C OPY KEPT BY EACH PARTY. ACCORDING TO HIM, THE COPY OF AGREE MENT PLACED ON RECORD IS THE COPY OF THE SELLER. HE DID NOT SIGN HIS COPY AS HE COULD SIGN IT ANY TIME. ACCORDINGLY, TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO JUSTIFICATION IN MAKING THE ADDITION. 7. ON THE OTHER HAND, SHRI S.K. MITAL, THE LEARNED D.R. HEAVILY RELIED ON THE ORDERS OF THE LOWER AUTHORITI ES IN SUPPORT OF DEPARTMENTAL CASE. 7 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E ALSO PERUSED THE MATERIALS PLACED ON RECORD. IT IS WELL SETTLED THAT IN ORDER TO DISCHARGE THE ONUS UNDER SECTION 6 8 OF THE ACT, THE ASSESSEE IS REQUIRED TO PROVE THE FOLLOWIN G : I) THE IDENTITY OF THE CREDITOR; II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND III) THE GENUINENESS OF THE TRANSACTION. 9. IT IS APPARENT FROM THE RECORDS THAT THE ASSESS EE HAD DEPOSITED SUM OF RS.5,96,000/- IN HIS BANK ACCO UNT ON VARIOUS DATES IN THE MONTH OF APRIL, 2008. THE ASS ESSEE MADE CASH DEPOSITS OF RS.99,000/- ON SIX OCCASIONS EXCEP T RS.2000/-, WHICH WAS DEPOSITED ON 19.4.2008. AS RE GARDS THE SOURCE OF THESE DEPOSITS, THE ASSESSEES CONTENTION WAS THAT HE HAD EXECUTED AN AGREEMENT TO SELL PART OF HIS AG RICULTURAL LAND TO ONE SHRI BALKAR SINGH AND RECEIVED ADVANCE OF RS.6 LACS ON 14.4.2008. ACCORDING TO THE ASSESSEE, THE SAID ADVANCE RECEIVED FROM SHRI BALKAR SINGH WAS DEPOSIT ED IN HIS BANK ACCOUNT. I HAVE CAREFULLY PERUSED THE COPY OF THE ALLEGED AGREEMENT TO SELL DATED 14.4.2008. THIS DO CUMENT DOES NOT CONTAIN ANY SIGNATURE OF THE SELLER, I.E. THE ASSESSEE. FURTHERMORE, THE COMPLETE ADDRESSES OF THE WITNESSE S ARE NOT APPEARING ON THIS DOCUMENT. IT IS AN ADMITTED FACT THAT THE AGRICULTURAL LAND, AGAINST WHICH THE ASSESSEE IS CL AIMING TO HAVE RECEIVED ADVANCE (BIANA) WAS NOT IN THE NAME O F THE ASSESSEE. IN OTHER WORDS, THE ASSESSEE HAS NO RIGH T, TITLE AND 8 LEGAL AUTHORITY TO SELL THE PROPERTY. IT IS ALSO AN ADMITTED FACT THAT THE TRANSACTION DID NOT MATERIALIZE. THE RE IS NO EVIDENCE ON RECORD AS TO WHETHER THE ASSESSEE HAD R ETURNED THE ALLEGED ADVANCE MONEY TO SHRI BALKAR SINGH. EV EN THE ASSESSEE COULD NOT PROVE THE IDENTITY OF SHRI BALKA R SINGH. IT IS APPARENT FROM THE RECORD THAT THE ASSESSEE NEVER PRODUCED SHRI BALKAR SINGH BEFORE THE ASSESSING OFFICER TO P ROVE THE IDENTITY OF THE SAID PERSON, HIS CREDITWORTHINESS A ND ALSO THE GENUINENESS OF THE ALLEGED TRANSACTION. IN MY OPIN ION, THE LOWER AUTHORITIES HAVE CORRECTLY HELD THAT THE ALLE GED AGREEMENT TO SELL DATED 14.4.2008 CAN BE BRANDED AS A SELF- SERVING DOCUMENT CREATED AS AN AFTER-THOUGHT TO EXP LAIN THE SOURCE OF DEPOSITS. I FULLY AGREE WITH THIS OBSERV ATION OF THE LEARNED CIT (APPEALS) THAT THE SUBMISSIONS OF THE A SSESSEE ARE UNRELIABLE AND TOTALLY BASELESS AS HOW CAN HE RECEI VE ADVANCE AGAINST THE PROPERTY WHICH WAS NOT IN HIS NAME. TH E ASSESSEE HAS NO TITLE AND AUTHORITY TO ENTER INTO AGREEMENT TO SELL THE PROPERTY WHICH WAS NOT IN HIS NAME. IN OTHER WORDS , HE WAS NOT THE OWNER OF THE PROPERTY MENTIONED IN THE ALLE GED AGREEMENT TO SELL DATED 14.4.2008. IN MY OPINION, THE ASSESSEE HAS MISERABLY FAILED TO DISCHARGE THE ONUS CAST UPON HIM UNDER SECTION 68 OF THE ACT. THE ASSESSEE HAS FAILED TO PROVE THE IDENTITY OF THE PURCHASER/CREDITOR, THE C APACITY OF THE CREDITOR TO ADVANCE MONEY; AND THE GENUINENESS OF THE TRANSACTION. IT IS A TRITE LAW THAT WHERE THE ASSE SSEE OFFERS A FALSE EXPLANATION, ADDITION OF THE AMOUNT REPRESENT ING IN THE CREDIT WOULD BE JUSTIFIED. IN MY OPINION, THE EXPL ANATION GIVEN BY THE ASSESSEE REGARDING THE SOURCE OF THE D EPOSIT IS 9 FALSE, BASELESS AND NOT TENABLE. THUS, CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, I DO N OT SEE ANY MERITS IN THIS APPEAL OF THE ASSESSEE AND ACCORDING LY I DISMISS THE SAME. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF MAY, 2016. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 6 TH MAY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH