Sh. Ranjit Singh Chhabra, Ludhiana V. ITO, Ludhiana

ITA 171/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9962 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 02-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: ASHISH; SSH RAJ KAMAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 171/CHD/2016 ASSESSMENT YEAR: 2008-09 SH. RANJIT SINGH CHHABRA, VS. THE ITO, WARD VI(2) , LUDHIANA LUDHIANA PAN NO. ADUPC6272D (APPELLANT) (RESPONDENT) APPELLANT BY : S/SH. RAJ KAMAL & ASHISH RESPONDENT BY : SH. S.K.MITTAL DATE OF HEARING : 29.04.2016 DATE OF PRONOUNCEMENT : 13.05.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- 3, LUDHIANA DATED 30.12.2015 RELATING TO ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL THE DISPUTE RELATES TO ADDITION O F RS. 10 LACS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) ON AC COUNT OF CASH DEPOSITS IN SAVING BANK ACCOUNT OF THE ASSESSEE. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL AND SUBMITTED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION D ECLARING TOTAL INCOME AT RS. 2 1,24,420/- ON 28.7.2008. THE ASSESSEE DERIVES INCO ME FROM SALARY, BANK INTEREST ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH EVIDENCE OF RS. 10 LACS RECEIVED BY HIM AS ADVANCE ON ACCOUNT OF SALE OF LAND. IN RESPONSE TO THE AFORESAID QUERY, THE ASSESSEE SUBMITTED THE AFFIDAVITS DATED 20.12.2010 OF WITNESSES NAMELY SHRI SUNNI GILL ALIAS SHRI SUKHWINDER SINGH AND SH. AMAN DEEP SNGH. THE ASSESSING OFFICER NOTED THAT THERE WAS NO EVIDENCE REGARDING THE EXACT LOCATION OF THE PROPERTY, AND THE ASSESSEE ALSO FAILED TO PRODUCE T HE ALLEGED PURCHASER FOR CROSS VERIFICATION. ACCORDINGLY, THE ASSESSING OFFICER RE JECTED THE CONTENTION OF THE ASSESSEE REGARDING THE CANCELLATION OF AGREEMENT TO SALE OF LAND. THE ASSESSING OFFICER FURTHER POINTED OUT THAT THE ASSESSEE ALSO FAILED TO PRODUCE THE ORIGINAL AGREEMENT REGARDING SALE OF LAND. HE FURTHER STATED THAT THE AFFIDAVITS FILED BY S/SHRI SUNNI GILL AND SH. AMARDEEP SINGH GILL WERE NOT RELIABLE WHEREIN THEY HAVE STATED THAT RS. 8 LACS HAD BEEN RETURNED BACK TO THE PURCHASER NAMELY SHRI GURDEV SINGH S/O SHI GANDA SINGH RESIDENT OF VILLAG E JHANDE, DISTRICT LUDHIANA ON 1.8.2007. THE ASSESSING OFFICER HAD ALSO OBSERVE D THAT THE ASSESSEE HAD ALSO FAILED TO SHOW THE SOURCE OF RS. 8 LACS FROM WHICH BANK ACCOUNT THE SAID AMOUNT WAS RETURNED TO THE ALLEGED PURCHASER. THUS, THE ASSESSING OFFICER TREATED THE CASH DEPOSIT OF RS. 10 LACS (RS. 5 LACS DEPOSITED ON 21.4.2007 AND RS. 5 LACS DEPOSITED ON 2.6.2007) WITH CENTURION BANK OF PUNJA B LTD. AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND ADDED THE SA ME TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION, AN D HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. THE MAIN CONTENTION OF SHRI R AJ KAMAL, LD. COUNSEL FOR 3 THE ASSESSEE IS THAT SHRI GURDEV SINGH FROM WHOM AN AMOUNT OF RS. 10 LACS WAS RECEIVED BY THE ASSESSEE ON ACCOUNT OF ADVANCE AGAI NST SALE OF LAND HAD EXPIRED ON 18.11.2008, THEREFORE, HE COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. THE NEXT CONTENTION OF THE LD. COUNSEL FOR THE ASSE SSEE IS THAT THE ASSESSEE SUBMITTED THE AFFIDAVITS OF THE TWO WITNESSES TO TH E AGREEMENT TO SELL. AS REGARDS THE NON PRODUCTION OF THE ORIGINAL SALE AGR EEMENT BEFORE THE AUTHORITIES BELOW, SHRI RAJ KAMAL, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE COULD NOT PRODUCE BECAUSE THE SAME WAS DESTROYED BY THE BUYER. HOWEVER, THE ASSESSEE HAD PRODUCED THOSE TWO WITNESSES TO AGREEM ENT NAMELY SH. SUNNI GILL ALIAS SUKHWINDER SINGH AND SHRI AMANDEEP SINGH SON OF THE ASSESSEE. THE AFFIDAVIT OF SHRI SUNNI GILL ALIAS SUKHWINDER SINGH GILL READS AS UNDER:- AFFIDAVIT OF SUNNI GILL ALIAS SUKHWINDER SINGH 'STAMP PAPER RS.25/- I, SUNNI GILL ALIAS SUKHWINDER SINGH GILL SON OF SH . JAGAT SINGH R/O HOUSE NO. 3373, PHASE-2, URBAN ESTATE, DU GRI, LUDHIANA, SOLEMNLY AFFIRM AND DECLARE AS UNDER- 1. THAT AN AGREEMENT FOR SALE/PURCHASE OF PROPERTY MEASURING 0-9-6-1/2 KHASRA NO. 64//7-64/14/1-64 //8/1- 64//13/2-64//14/4-64//14/2 VILLAGE DAKHA-1 TEHS IL AND DISTRICT LUDHIANA WAS EXECUTED ON 20/04/2007 ACCORD ING TO WHICH SHRI GURDEV SINGH SON OF SHRI GANDA SINGH RES IDENT OF VILLAGE JHANDE, LUDHIANA WAS BUYER AND SHRI RANJIT SINGH CHHABRA SON OF SHRI SANT SINGH RESIDENT OF 35-G, B. R.S. NAGAR, LUDHIANA WAS THE SELLER. I AND AMANDEEP SING H WERE THE MARGINAL WITNESSES OF THE SAID AGREEMENT. THIS AGREEMENT OF SALE DATED 01.08.2007 WAS CANCELLED BE FORE ME AND SECOND WITNESS AMANDEEP SINGH. 2. THAT THE BUYER SHRI GURDEV SINGH RECEIVED RS.8 ,00,000/- (RS. EIGHT LAC) OUT OF ADVANCE MONEY OF RS.10,0 0,000/- (RS. TEN LACS) AND SIGNED THE AGREEMENT FOR C ANCELLATION. 3. THAT WE PERSONALLY KNEW SHRI GURDEV SINGH WHO HAS DIED NOW. 4 SD/- SUNNI GILL DEPONENT MY ABOVE STATEMENT IS TRUE AND CORRECT AND NOTHING HAS BEEN CONCEALED THEREIN. SD/- SUNNI GILL DEPONENT ATTESTED BY NOTARY PUBLIC RAJINDER SINGH REGD. NO. 2915 ON 20 DEC 2010' 6. THE AFFIDAVIT FILED BY SHRI AMANDEEP SINGH IS AL SO ON SIMILAR LINES. IT IS ALSO APPARENT FROM THE RECORDS THAT DURING THE COUR SE OF APPELLATE PROCEEDINGS, THE CIT(A) FORWARDED THE COPIES OF THE AFFIDAVITS O F SHRI AMANDEEP SINGH AND SH. SUNNI GILL, COPY OF THE CANCELLATION DEED TO TH E ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER SUBMITTED THE REMAN D REPORT ON 28.5.2013, WHEREIN HE HAS CATEGORICALLY STATED THAT SIGNATURE OF THE LATE SHRI GURDEV SINGH SEEMS TO BE SIMILAR ON BOTH THE DOCUMENTS I.E. CANC ELLATION OF AGREEMENT AND FAMILY AGREEMENT DATED 9.5.2003, IN WHICH THE SIGNA TURE OF SHRI GURDEV SINGH WAS THERE. DURING THE REMAND PROCEEDINGS, THE ASSES SING OFFICER ALSO RECORDED THE STATEMENTS OF BOTH THE WITNESSES ON 27.5.2013 N AMELY SHRI SUNNI GILL ALIAS SUKHWINDER SINGH AND SHRI AMANDEEP GILL, SON OF T HE ASSESSEE. IN THEIR STATEMENTS, BOTH THE WITNESSES HAVE STATED THAT TH ERE WAS AN AGREEMENT TO SELL AND RS. 10 LACS WAS RECEIVED BY SHRI RANJIT SINGH C HHABRA (ASSESSEE) AND ALSO THERE WAS CANCELLATION OF THE AGREEMENT AND SHRI RA NJIT SINGH CHABBRA RETURNED BACK THE AMOUNT OF RS. 8 LACS ONLY OUT OF RS. 10 LA CS RECEIVED FROM SHRI GURDEV SINGH WHO HAS SINCE BEEN EXPIRED. IN THIS CASE, THE AUTHORITIES BELOW HAVE REJECTED THE CONTENTION OF THE ASSESSEE MERELY ON T HE BASIS OF CONJECTURES AND SURMISES. THE LD. CIT(A) HAS OBSERVED THAT THE ASS ESSEE HAD SUBMITTED AFFIDAVITS OF TWO PERSONS NAMELY SHRI AMANDEEP SING H AND SHRI SUNNI GILL IN SUPPORT OF HIS CASE BUT THEY ARE NOT THE INDEPENDEN T WITNESSES. NO DOUBT, THAT 5 SHRI AMANDEEP SINGH IS SON OF THE ASSESSEE THROUGH WHOM THE DEAL OF PURCHASE OF CANCELLATION WAS MADE. IN MY OPINION, THERE IS N O LEGAL RESTRAINT ON TAKING A FAMILY MEMBER AS ATTESTING WITNESS. IN ANY CASE, ON E OF THE WITNESSES NAMELY SHRI SUKNWIDNER SINGH GILL IS AN INDEPENDENT PERSON AND IS NOT RELATED TO EITHER OF THE PARTIES TO THE AGREEMENT. ANOTHER ALLEGATION OF THE REVENUE AUTHORITIES IS THAT THE STAMP PAPER FOR CANCELLATION DEED WAS PURC HASED ON 15.5.2006 MUCH BEFORE THE AGREEMENT TO PURCHASE THE PROPERTY I.E. 20.4.2007. HOWEVER, THE AGREEMENT TO CANCELLATION OF SALE IS DATED 1.8.2007 . THERE IS AMPLE EVIDENCE ON RECORD TO SHOW THAT THE STAMP PAPER IN QUESTION HAS BEEN ISSUED TO SHRI GURDEV SINGH S/O SHRI GANDA SINGH RESIDENT OF VILLAGE JHAN DE, LUDHIANA. THIS FACT IS CLEAR FROM THE COPY OF THE REGISTER OF STAMP VENDOR . THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE STAMP PAPER WA S NOT CURRENTLY PURCHASED AND OLD STAMP PAPER LYING WITH SHRI GURDEV SINGH WAS US ED SHOULD NOT CASTE DOUBT ON THE GENUINENESS OF THE CANCELLATION DEED. IT IS ADMITTED FACT THAT SHRI GURDEV SINGH, WHOSE SIGNATURE APPEARS ON THE CANCELLATION DEED HAS ALREADY EXPIRED ON 18.11.2008. IN MY CONSIDERED VIEW, DRAWING ADVERSE INFERENCE ON THE GENUINENESS OF THE AGREEMENT ON THE PLEA THAT OLD S TAMP PAPER WAS USED, IS NOT CORRECT. THE REVENUE AUTHORITIES HAVE ALSO CONDEMNE D THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT HE COULD NOT PRODUCE TH E ORIGINAL SALE AGREEMENT WHICH HE CLAIMED AS DESTROYED BY THE PURCHASER. AS I HAVE ALREADY OBSERVED HEREIN ABOVE THAT THE ASSESSEE HAS PRODUCED TWO WIT NESSES OF AGREEMENT NAMELY SHRI SUNNI GILL ALIAS SUKHWINDER SINGH AND SHRI AMA NDEEP SINGH, SON OF THE ASSESSEE AND THE STATEMENTS OF BOTH THE WITNESSES W ERE RECORDED ON 27.5.2013. THESE WITNESSES HAVE ALSO FILED THE AFFIDAVITS BEFO RE THE ASSESSING OFFICER. IT IS WELL SETTLED LAW THAT THE CONTENTIONS RAISED IN AFF IDAVITS CANNOT BE REJECTED, UNLESS AND UNTIL THE CONTENTIONS OF THE AFFIDAVITS ARE PROVED TO BE WRONG. THERE IS NO MATERIAL ON RECORD TO CONTROVERT THE STATEMEN TS GIVEN BY THE ABOVE TWO WITNESSES AS WELL AS THE CONTENTIONS RAISED IN THEI R AFFIDAVITS. THUS, IN MY OPINION, THERE WAS NO JUSTIFICATION IN REJECTING TH E EXPLANATION OF THE ASSESSEE. 6 IT IS WELL SETTLED LAW THAT THE ASSESSEES EXPLANAT ION IS TO BE JUDICIOUSLY CONSIDERED AND THE REVENUE CANNOT ACT UNREASONABLY AND REJECT THE EXPLANATION OF THE ASSESSEE WITHOUT ASSIGNING ANY COGENT REASON S. IN THE CASE OF SREELEKHA BANERJEE & OTHERS VS. CIT (1963) 49 ITR 0112 (SC), THE HON'BLE SUPREME COURT HAS HELD THAT THE REVENUE CANNOT BY MERELY RE JECTING UNREASONABLY A GOOD EXPLANATION, CONVERT GOOD PROOF INTO NO PROOF. IF, HOWEVER, THE EXPLANATION IS UNCONVINCING AND ONE WHICH DESERVES TO BE REJECTED, THE REVENUE CAN REJECT IT AND DRAW THE INFERENCE THAT THE AMOUNT REPRESENTED INCOME EITHER FROM THE SOURCES ALREADY DISCLOSED BY THE ASSESSEE OR FROM U NDISCLOSED SOURCES. IN THE INSTANT CASE, THE EXPLANATION OF THE ASSESSEE IS PL AUSIBLE AND CONVINCING WHICH IS DULY SUPPORTED BY THE DOCUMENTARY EVIDENCE. IN T HAT VIEW OF THE MATTER, I HOLD THAT THE AUTHORITIES BELOW HAVE REJECTED THE E XPLANATION OF THE ASSESSEE MERELY ON FLIMSY GROUNDS AND, THEREFORE, THE ORDERS OF THE AUTHORITIES BELOW ARE NOT TENABLE UNDER THE LAW. THE BASIS OF CONJECTURE AND SURMISES. IT IS ALSO SEEN THAT THE ASSESSEE HAD ALSO PROVED THE CAPACITY OF S HRI GURDEV SINGH TO GIVE ADVANCE OF RS. 10 LACS TO THE ASSESSEE FOR PURCHASE OF LAND. EVEN THE ASSESSING OFFICER IN HIS REMAND REPORT DATED 31.10.2003 HAS C ATEGORICALLY STATED THAT SHRI GURDEV SINGH HAD SOLD CERTAIN PROPERTIES AND RECEIV ED MONEY ON THAT ACCOUNT. HOWEVER, THE ASSESSING OFFICER HAS STATED THAT IT C ANNOT BE ASCERTAINED AS TO HOW HE HAS UTILIZED THIS MONEY FOR INVESTMENT IN PU RCHASE OF SOME OTHER PROPERTIES. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT LATE SHRI GURDEV SING HAD INVESTED THE MONEY RECEIVED ON ACCOUNT OF SALE OF PROPERTIES IN SOME OTHER ASSETS. HOWEVER, THE FACT REMAINS THAT SHRI GURDEV SINGH HAD CAPACITY TO ADVANCE THE MONEY IN QUESTION TO THE ASSESSEE ON A CCOUNT OF PURCHASE OF PROPERTY. THE DETAILS OF PROPERTY IS MENTIONED IN T HE CANCELLATION DEED AND ALSO IN THE AFFIDAVITS OF SHRI SUNNI GILL ALIAS SHRI SUK HWINDER SINGH AND SHRI AMANDEEP SINGH. IN MY OPINION, THERE IS NO REASON TO DOUBT THE SIGNATURES OF SHRI GURDEV SINGH ON CANCELLATION AGREEMENT, PARTIC ULARLY WHEN, THE ASSESSING OFFICER IN HIS REMAND REPORT HAS CATEGORICALLY STAT ED THAT SIGNATURE ON THE 7 CANCELLATION AGREEMENT AND FAMILY AGREEMENT, REFERR ED TO THE ABOVE, ARE SIMILAR. CONSIDERING THE ENTIRE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE, THERE IS NO JUSTIFICATION IN MAKING THE IMPUGNED AD DITION. ACCORDINGLY, I DELETE THE ADDITION AND APPEALS STAND ALLOWED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.05.2016 SD/- (H.L.KARWA) VICE PRESIDENT DATED :13 TH MAY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR