SHRI GURMUKH SINGH, PHAGWARA V. INCOME TAX OFFICER WARD 1, PHAGWARA

ITA 18/ASR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3343 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-01-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 15-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAKIL AHMAD
• Assessee Lawyers: RAGHAV ARORA
• Keywords: Unexplained investment; Capital asset; Set aside
• Section: 148

Judgement Text

P A G E | 1 ITA NO. 18/ASR/2018, A.Y. 2008-09 SHRI. GURMUKH SINGH VS. ITO IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 18/ASR/2018 ASSESSMENT YEAR: 2008-09 GURMUKH SINGH S/O DALVIR SINGH, VILLAGE-MANAVALI, PHAGWARA. VS. INCOME TAX OFFICER, WARD 1, PHAGWARA. PAN BHSPS5515E (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI RAGHAV ARORA, A.R REVENUE BY: SHRI. SHAKIL AHMAD, D.R DATE OF HEARING: 16.01.2019 DATE OF PRONOUNCEMENT: 11.03.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(APPEALS)-2, JAL ANDHAR, DATED 19.09.2017, WHICH IN TURN ARISES FROM THE ASSESSMEN T ORDER PASSED BY THE A.O UNDER SEC. 147/143(3) OF THE INCOME TAX ACT , 1961(FOR SHORT I.T. ACT) FOR A.Y. 2008-09, DATED 30.03.2016. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FO LLOWING GROUNDS OF APPEAL:- 1 THE WORTHY CIT(APPEALS) ERRED IN CONFIRMING THE ORDER OF THE LD. A.R AGAINST THE FACTS & CIRCUMSTANCES OF THE CASE. 2. THE WORTHY CIT(APPEALS) ERRED IN CONFIRMING THE VALIDITY OF THE AGREEMENT/EVIDENCE/DOCUMENTARY PROOF ON THE BASIS O F WHICH THE DEPARTMENT MADE SUCH ASSESSMENT. 3. THE WORTHY CIT(APPEALS) ERRED AND ERROR IN CONFI RMING THE ADDITION BY NOT ACCEPTING THE EXPLANATION GIVEN BY THE ASSESSEE. IN REGARD TO ADDITION P A G E | 2 ITA NO. 18/ASR/2018, A.Y. 2008-09 SHRI. GURMUKH SINGH VS. ITO AMOUNT TO RS. 150000/- WAS MADE BY A.O AND CONFIRME D BY THE CIT(APPEALS). 4. THE ASSESSEE RESERVES THE RIGHT TO ADD, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL BEFORE THE HEARING. 2. BRIEFLY STATED, THE A.O WAS IN RECEIPT OF INFORM ATION THAT THE ASSESSEE ALONGWITH SH. SARABJIT SINGH S/O SH. HARBA NS SINGH, R/O. MOHALLA BABA GADHIA, PHAGWARA, BOTH HAVING EQUAL ON E-HALF SHARE EACH, HAD MADE AN INVESTMENT AGGREGATING TO RS. 18, 20,000/- TOWARDS PURCHASE OF AN IMMOVABLE PROPERTY ADMEASURING 1 KAN AL 6 MARLAS AT MOHALLA GOBINDPURA, PHAGWARA. ON THE BASIS OF TH E AFORESAID INFORMATION THE CASE OF THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION WAS REOPENED AND A NOTICE UNDER SEC. 148 OF THE IT ACT, DATED 11.07.2015 WAS SERVED UPON HIM. 3. THE ASSESSEE IN COMPLIANCE TO THE NOTICE ISSUED UNDER SEC. 148 OF THE IT ACT SUBMITTED THAT HIS ORIGINAL RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION MAY BE TREATED AS A RETURN FILE D IN RESPONSE THERETO. THE A.O ACCEPTED THE AFORESAID REQUEST OF THE ASSESSEE AND PROCEEDED WITH THE ASSESSMENT PROCEEDINGS. DURING T HE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O OBSERVED FROM A PERU SAL OF AN AGREEMENT DATED 27.11.2007 THAT THE ASSESSEE ALON GWITH THE AFORESAID CO-OWNER VIZ. SHRI. SARABJIT SINGH HAD PA ID AN ADVANCE AGGREGATING TO RS. 3,00,000/- AS AN ADVANCE FOR PUR CHASE OF THE AFORESAID PROPERTY DURING THE YEAR UNDER CONSIDERAT ION. IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS THE A.O MADE AN ADDITION OF RS.1,50,000/- TOWARDS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE ASSAILED THE ASSESSMENT BEFORE THE CIT(A). THE ASSESSEE SUBMITTED BEFORE THE CIT(A) TH AT AS THE PROPERTY UNDER CONSIDERATION WAS NOT PURCHASED BY HIM, THERE FORE, THE PAYMENT OF ANY ADVANCE FOR THE SAME DID NOT ARISE A T ALL. HOWEVER, THE P A G E | 3 ITA NO. 18/ASR/2018, A.Y. 2008-09 SHRI. GURMUKH SINGH VS. ITO CIT(A) WAS NOT PERSUADED TO SUBSCRIBE TO THE CONTEN TIONS ADVANCED BY THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE A. O. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF T HE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SUBM ITTED BY THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE THAT THE ASSESSEE HAD NOT PURCHASED THE PROPERTY UNDER CONSI DERATION. IT WAS SUBMITTED BY THE LD. A.R THAT THE IMPUGNED AGREEME NT THAT WAS ACTED UPON BY THE A.O FOR DRAWING OF ADVERSE INFERENCES I N THE HANDS OF THE ASSESSEE DID NOT BEAR THE SIGNATURES OF THE ASSESSE E. IN ORDER TO FORTIFY HIS AFORESAID CONTENTION THE LD. A.R TOOK US THROUG H THE COPY OF THE SAID AGREEMENT AT PAGE 13-15 OF THE ASSESSES PAPER BOOK (FOR SHORT APB). APART THEREFROM, IT WAS SUBMITTED BY THE LD . A.R THAT IN THE CASE OF THE OTHER CO-OWNER VIZ. SH. SARABJIT SINGH THE ADDITION MADE IN RESPECT OF HIS SHARE OF INVESTMENT IN THE PROPERT Y UNDER CONSIDERATION WAS VACATED BY THE SAME CIT(A). THE L D. A.R SUBMITTED THAT NECESSARY VERIFICATIONS CARRIED OUT BY THE A.O IN THE COURSE OF THE REMAND PROCEEDINGS IN THE CASE OF THE AFORESAID CO- OWNER VIZ. SH. SARABJIT SINGH HAD REVEALED THAT HE HAD NOT PURCHAS ED THE PROPERTY UNDER CONSIDERATION. IT WAS AVERRED BY THE LD. A.R THAT NOW WHEN THE FACT THAT THE CLAIM OF THE AFORESAID CO-OWNER VIZ. SH. SARABJIT SINGH THAT HE HAD NOT PURCHASED THE PROPERTY UNDER CONSID ERATION WAS ACCEPTED BY THE CIT(A), THEREFORE, NO ADVERSE INFER ENCES ON THE BASIS OF THE SAME AGREEMENT COULD HAVE BEEN DRAWN IN THE H ANDS OF THE ASSESSEE. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT W AS SUBMITTED BY THE LD. D.R THAT AS THE ASSESSEE HAD FAILED TO SUBSTANT IATE THE SOURCE OF THE INVESTMENT MADE TOWARDS HIS SHARE OF INVESTME NT IN THE P A G E | 4 ITA NO. 18/ASR/2018, A.Y. 2008-09 SHRI. GURMUKH SINGH VS. ITO PROPERTY UNDER CONSIDERATION AS WAS EVIDENCED BY TH E AGREEMENT, THEREFORE, THE A.O HAD RIGHTLY MADE THE ADDITION IN HIS HANDS. 7. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIE S AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE AGREEMENT, D ATED 27.11.2007 MAKES A REFERENCE OF THE ASSESSEE AND SH. SARABJIT SINGH AS THE PURCHASERS OF THE PROPERTY UNDER CONSIDERATION. HOW EVER, AS THE SAID AGREEMENT DOES NOT BEAR THE SIGNATURES OF EITHER OF THE AFORESAID PARTIES VIZ. (I). SH. GURMUKH SINGH (I.E THE ASSESS EE); AND (II). SH. SARABJIT SINGH, HENCE IT CAN SAFELY BE INFERRED THA T THE TRANSACTION THEREIN REFERRED DID NOT SEE THE LIGHT OF THE DAY. IN SUM AND SUBSTANCE, IN THE ABSENCE OF ANY INDEPENDENT MATERI AL OR CIRCUMSTANTIAL EVIDENCE PROVING THAT THE TRANSACTIO N REFERRED IN THE IMPUGNED AGREEMENT HAD MATERIALISED, NO SUCH INFE RENCE CAN BE ARRIVED AT MERELY ON THE BASIS OF THE CONTENTS OF T HE SAID UNSIGNED AGREEMENT WHICH HAS NO EXISTENCE IN THE EYES OF LAW . BE THAT AS IT MAY, WE FIND THAT THE NECESSARY VERIFICATIONS CARRI ED OUT BY THE A.O FROM THE REVENUE AUTHORITIES IN THE COURSE OF THE R EMAND PROCEEDINGS IN THE CASE OF THE OTHER PARTY I.E SH. SARABJIT SIN GH HAD REVEALED THAT NO SUCH PROPERTY WAS PURCHASED BY HIM. WE FIND THAT THE CIT(A) ON THE BASIS OF THE SAID REPORT OF THE REVENUE AUTHORI TY HAD OBSERVED THAT AS THERE WAS NO EVIDENCE OF ANY TRANSFER OF LAND IN FAVOUR OF THE AFORESAID PERSON VIZ. SH. SARABJIT SINGH, HENCE THE QUESTION OF MAKING OF ANY INVESTMENT BY HIM DID NOT ARISE AT ALL. IN O UR CONSIDERED VIEW AS THE ADDITION MADE TOWARDS UNEXPLAINED INVESTMENT IN THE HANDS OF THE OTHER CO-OWNER HAD BEEN VACATED BY THE A.O, THU S IT IS BEYOND COMPREHENSION AS TO HOW THE ADDITION MADE IN RESPEC T OF ALLEGED INVESTMENT ON THE BASIS OF THE SAME AGREEMENT HAD BEEN SUSTAINED IN THE HANDS OF THE ASSESSEE. RATHER, THE OBSERVATI ONS DRAWN BY THE P A G E | 5 ITA NO. 18/ASR/2018, A.Y. 2008-09 SHRI. GURMUKH SINGH VS. ITO CIT(A) IN THE CASE OF THE ASSESSEE CLEARLY MILITATE AGAINST THOSE DRAWN BY HIM IN THE CASE OF THE OTHER CO-OWNER VIZ. SH. S ARAJIT SINGH. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS NOT BEI NG ABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE VIEW TAKEN BY THE CIT (A), THUS SET ASIDE HIS ORDER AND VACATE THE ADDITION OF RS. 1,50,000/- MADE BY THE A.O. 8. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11. 03.2019 SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDICIAL ME MBER PLACE : CHANDIGARH; DATED11.03.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. DR, ITAT, CAMP BENCH, JALANDHAR 6. / GUARD FILE. //TRUE COPY// / BY ORDER, ! / ' #$ (DY./ASSTT. REGISTRAR) % &'( /ITAT, CAMP. BENCH, JALANDHAR