Shri Jaswant Singh Dhillon, Distt. Jalandhar V. The Income-tax Officer, Phagwara

ITA 183/ASR/2012

• Counselvise Citation: 18320914 RSA 2012
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Keywords: Unexplained investment; Unexplained expenditure; Capital asset; Salary income; Period of limitation; Source of fund; Additional evidence; Cost of acquisition; Time period of passing order
• Section: 54B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.183(ASR)/2012 ASSESSMENT YEAR:2008-09 PAN :AFXPD5891G SH. JASWANT SINGH DHILLON, VS. INCOME TAX OFFICER, VILLAGE SAGARPUR, TEHSIL WARD-2, PHILLAUR, DISTT. JALANDHAR. JA LANDHAR. (APPELLANT) (RESPONDENT) I.T.A. NO.184(ASR)/2012 ASSESSMENT YEAR:2008-09 PAN :AVCPS9159F SH. AMARJIT SINGH DHILLON, VS. INCOME TAX OFFICER, VILLAGE SAGARPUR, TEHSIL WARD-2, PHILLAUR, DISTT. JALANDHAR. JA LANDHAR. (APPELLANT) (RESPONDENT) APPELLANTS BY:NONE RESPONDENT BY:SH. R.L.CHHANALIA, DR DATE OF HEARING:31.10.2012 DATE OF PRONOUNCEMENT:05/11/2012 ORDER PER BENCH ; ITA NOS. 183 & 184(ASR)/2012 2 THESE TWO APPEALS OF TWO DIFFERENT ASSESSEES ARIS E FROM TWO DIFFERENT ORDERS OF CIT(A), JALANDHAR, EACH DATED 14.03.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. IN ITA NO.183(ASR)/2012, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.28,75,000/- AS PER PARA 9 OF HIS ORDER, OUT OF A DDITION OF RS.62,50,000/- (RS.48.5 LACS + 14 LACS) MADE BY THE AO ON ACCOUNT OF CASH DEPOSITS AS CONTESTED BY THE APPELL ANT BEFORE THE CIT(A). 2. THAT WHILE UPHOLDING AFORESAID ADDITION OF RS.28 ,75,000/-, THE LEARNED CIT(A) HAS ERRED IN NOT GIVING BENEFIT OF I NITIAL CASH AS CLAIMED AND ALSO BY WAY OF ADDITIONAL EVIDENCE FI LED BEFORE CIT(A). 3. THAT THE LD. CIT(A) HAS ERRED IN MAKING ADDITION OF RS.4,77,695/- AS CONTESTED BY THE APPELLANT AS PER GROUND NO.4 OF THE APPEAL AND ALSO ADDITION OF RS.2,00,000/- AS PER GROUND NO.5 RELATING TO HOUSEHOLD WITHDRAWALS. 4. THAT THE LD.CIT(A) HAS ERRED IN NOT ADMITTING TH E ADDITIONAL EVIDENCES ON THE BASIS OF ADDITIONAL DOCUMENTS FILE D BY THE APPELLANT VIDE HIS ORDER DATED 17.11.2011 PASSED UN DER RULE 46A(2) OF THE INCOME TAX RULES, 1962. 5. THAT THE EVIDENCES GOES TO THE ROOT OF GIVING JU ST DECISION IN THE CASE AND DESERVED TO BE ADMITTED IN VIEW OF JUDGMEN T OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF MUKTA METAL AS REPORTED IN 336 ITR 555 (P&H). 6. THAT THE ADDITIONS HAVE BEEN UPHOLD BY THE LD. C IT(A) BY NOT CONSIDERING OUR SUBMISSIONS PROPERLY. ITA NOS. 183 & 184(ASR)/2012 3 7. THAT THE APPELLANT CARVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. 3. IN ITA NO.184(ASR)/2012, THE ASSESSEE HAS RAISE D FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.27,00,000/- AS PER PARA 7.4 OF HIS ORDER, OUT OF ADDITION OF RS.16,50,000/- AND RS.21,00,000/- MADE BY THE AO ON ACCOUNT OF DEPOSITS MADE IN THE CAPITAL LOCAL AREA BANK, NOORMAHAL BRANCH AND CITIZEN URBAN COOPERATIVE BANK LTD; NOOR MAHAL BRANCH RESPECTIVELY AS CONTESTED BY THE APPELLANT AS PER GROUND NO. 3 AND 4 BEFORE THE WORTHY CIT(A). 2. THAT WHILE UPHOLDING AFORESAID ADDITION OF RS.27 ,00,000/-, THE LEARNED CIT(A) HAS ERRED IN NOT GIVING BENEFIT BENE FIT OF OPENING CASH BALANCE OF RS.24,00,000/- AS ON 1.4.20 07 IN THE CASH FLOW STATEMENT FILED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS. 3. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING ADDIT ION OF RS.1,50,000/- MADE BY THE ASSESSING OFFICER AS PER PARA 8 OF HIS ORDER AS UNEXPLAINED EXPENDITURE IN RESPECT OF HOUSEHOLD WITHDRAWALS. 4. THAT THE LD.CIT(A) HAS ERRED IN NOT ADMITTING TH E ADDITIONAL EVIDENCE FILED BY THE APPELLANT VIDE HIS ORDER DAT ED 17.11.2011 PASSED UNDER RULE 46A(2) OF THE INCOME TAX RULES, 1962. 5. THAT THE EVIDENCES GOES TO THE ROOT OF GIVING JU ST DECISION IN THE CASE AND DESERVED TO BE ADMITTED IN VIEW OF JUDGMEN T OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF MUKTA METAL AS REPORTED IN 336 ITR 555 (P&H). 6. THAT THE ADDITIONS HAVE BEEN UPHOLD BY THE LD. C IT(A) BY NOT THAT THE APPELLANT CARVES LEAVE TO ADD OR AMEND TH E GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. ITA NOS. 183 & 184(ASR)/2012 4 4. SINCE THE ISSUES IN BOTH THE APPEALS ARE IDENTIC AL, THEREFORE, WE ARE TAKING UP BOTH THE APPEALS BY THIS CONSOLIDATED ORD ER. FIRST OF ALL, WE TAKE UP APPEAL OF THE ASSESSEE, SH. JASWANT SINGH DHILLON, IN ITA NO.183(ASR)/2012 FOR THE A.Y. 2008-09. 5. THE BRIEF FACTS ARE THAT ON THE BASIS OF AIR INF ORMATION, THE AO FOUND THAT THE ASSESSEE HAD MADE CERTAIN TRANSACTIONS WIT H ICICI BANK, PURCHASED SOME MUTUAL FUNDS ETC. AND ACCORDINGLY SELECTED THE CASE UNDER SCRUTINY. THE ASSESSEE DERIVES INCOME FROM SALARY, INTEREST A S PARTNER IN M/S. DHILLON FINANCE COMPANY, NURMAHAL, DIARY INCOME AND AGRICUL TURAL INCOME. BEFORE THE AO, THE ASSESSEE SUBMITTED THE EXPLANATION ALON GWITH CASH FLOW STATEMENT. IN THE EXPLANATION, THE ASSESSEE CLAIMED RS.14.40 LACS AVAILABLE WITH HIM IN THE HOME CHEST AS ON 27.02.2007, WHICH WAS OUT OF SALE PROCEEDS OF AGRICULTURAL CROPS GROWN ON THE LAND OW NED BY THE HINDU UNDIVIDED FAMILY. THE BANK ACCOUNT WAS OPENED IN TH E NAMES OF JASWANT SINGH AND KULDIP KAUR, YET THE ACCOUNT BELONGS TO T HE HUF. THE ASSESSEE ALSO SUBMITTED SOURCES OF DEPOSITS OF RS.48.50 LACS AND SHORT-TERM CAPITAL GAIN AND HOUSEHOLD EXPENSES. THE AO WAS NOT SATISFI ED WITH THE EXPLANATION OF THE ASSESSEE AND HE MADE THE FOLLOWING ADDITIONS : (I) INCOME FROM OTHER SOURCES 4,459/- ITA NOS. 183 & 184(ASR)/2012 5 (II) UNEXPLAINED CASH DEPOSIT OF RS.10,00,000/- MADE IN BANK ACCOUNT WITH ICICI BANK, BEING PEAK AMOUNT, AND INITIAL DEPOSIT OF RS.4,00,000/- 14,00,000/- III) UNEXPLAINED INVESTMENT IN SHARES, 48,50,000/- IV) SHORT TERM CAPITAL GAINS 4,77,695/- V) LONG TERM CAPITAL GAINS 4,24,668/- VI) UNEXPLAINED EXPENSES 2,00,000/- 6. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH E ADDITIONAL EVIDENCES UNDER RULE 46A(1)(D) OF THE I.T.RULES. TH E ASSESSEE ALSO SUBMITTED VARIOUS DOCUMENTS, WHICH FOR THE SAKE OF CLARITY ARE REPRODUCED AS UNDER: S.NO. DESCRIPTION OF THE DOCUMENTS ETC. REMARKS IF ANY (I) CASH & BANK BOOK ALL A/CS PREPARED TO PROPERL Y EXPLAIN. II) ALL LEDGER ACCOUNTS ENTRIES IN ALL THE BANK A/CS III) JOURNAL REGISTER ..DO IV) HSBCS STATEMENT ALREADY SUBMISSION IN THE COURSE OF ASSESSMENT PROCEEDINGS. V) STATEMENT OF A/C OF OBC DO VI) STATEMENT OF A/C OF M/S. MELA NEW DOCUMENT S TATEMENT RAM CHARANJI LAL/ OBTAINED TO SUPPORT BANK ITA NOS. 183 & 184(ASR)/2012 6 A/C VII) .DO. OF PNB .DO VIII) ICICI BANK SUBMITTED IN THE COURSE OF ASSESSMENT PROCEEDINGS IX) ICICI BANK, CAR LOAN NEW A/C X) HSBCS STATEMENT OF M/S. NEW A/C SANGHERA DHILLON PROPERTIES PVT. LTD. XI) SALE RECEIPT OF SALE OF ENDEAVOR CAR NEW DOCUM ENT 6.1. THE LD. CIT(A), WHILE NOT ADMITTING MANY OF THE ADDITIONAL EVIDENCES ALLOWED THE AO UNDER SUB RULE 46(3) TO EX AMINE THE ADDITIONAL EVIDENCES. THEREAFTER, THE ASSESSEE SUBMITTED HIS E XPLANATIONS, WHICH ARE AVAILABLE IN PARA 5 AT PAGES 5 TO 10 OF LD. CIT(A) S ORDER. THE AO IN RESPONSE TO THE REMAND REPORT ASKED BY THE LD. CIT( A) SUBMITTED THAT THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITI ONAL EVIDENCE DID NOT SATISFY THE CONDITIONS FOR ADMISSION AS PER THE RUL ES, THOUGH HE HAD SUBMITTED THE COMMENTS ON THE ADDITIONAL GROUND RA ISED BY THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING THE COMMENTS OF T HE AO ON THE ADDITIONAL GROUND AND THE EXPLANATION OF THE ASSESSEE AND DOCU MENTS ON RECORD, SUBMITTED BEFORE THE AO AND BEFORE THE LD. CIT(A) V IDE PARA 7 TO 11.2 UPHELD THE ADDITION OF RS.28,75,000/- ON ACCOUNT O F CASH DEPOSITS, RS.4,77,695/- BEING THE INCOME ON THE SALE OF MUTUA L FUNDS AND RS. 2,00,000/- ON ACCOUNT OF HOUSEHOLD WITHDRAWALS AND DELETED THE REST OF THE ADDITIONS. ITA NOS. 183 & 184(ASR)/2012 7 7. BEFORE US, NONE APPEARED ON BEHALF OF THE ASSESS EE INSPITE OF VALID SERVICE OF NOTICE. WE, THEREFORE, IN THE INTEREST O F JUSTICE AND NOT TO PROLONG THE LITIGATION, ARE DECIDING THE APPEAL OF THE ASSE SSEE AFTER HEARING THE LD. DR AND ON THE BASIS OF MATERIAL ON RECORD. 8. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSE E HAD SUBMITTED THE CASH FLOW STATEMENT WHERE THE ASSESSEE HAD CLAIMED THE O PENING CASH IN HAND OF RS.14,40,000/- FOR WHICH THE SOURCES WERE ALSO EXP LAINED FROM THE SALE PROCEEDS OF AGRICULTURAL CROPS BY HINDU UNDIVIDED F AMILY ETC. FOR THE SAKE OF CLARITY, THE SUBMISSION AND EXPLANATION OF THE A SSESSEE, WHICH IS PART OF LD. CIT(A)S ORDER AT PAGES 5 TO 10 ARE REPRODUCED FOR THE SAKE OF CLARITY, AS UNDER: IT IS SUBMITTED THAT THE APPELLANT IS MAINLY AN AG RICULTURIST. HIS SOURCES OF INCOME, FOR THE RELEVANT PREVIOUS YEAR W ERE SALARY RS.30,000 AND INTEREST RS.56,600/- FROM PARTNERSHIP FIRM, M/S. DHILLON FINANCE CO; NURMAHAL AND RS.72000/- SALE OF MILK. THE APPELLANT AND HIS THREE BROTHERS INHERITED AGRICULT URAL LAND FROM THEIR FOREFATHERS. THEY BEING JAT SIKHS OF PUNJAB ARE GOVERNED BY CUSTOMARY LAW AND CONSTITUTE A HINDU UNDIVIDED FAMI LY. TWO BROTHER AND CHILDREN OF THE THIRD DECEASED BROTHER OF THE A PPELLANT RESIDE IN FOREIGN COUNTRIES. THE FAMILY BUILT A BIG RESIDENTI AL HOUSE IN ONE ACRE OF LAND AT VILLAGE SAGARPUR NEAR NURMAHAL, DISTT. J ALANDHAR. THE HOUSE HAS FOUR INDEPENDENT RESIDENTIAL UNITS. THE A PPELLANT AND HIS HUF MAINTAIN THE RESIDENTIAL HOUSE. THE APPELLANT C ONTROLS AND MANAGES THE FAMILY LAND AND LAND BELONGING TO OTHER MEMBERS OF FAMILY IN THEIR INDIVIDUAL CAPACITIES. IN THE INTER EST OF FAMILY HARMONY, THE APPELLANT USED TO KEEP THE SALE PROCEEDS OF AGR ICULTURAL PRODUCE IN THE BANK ACCOUNTS IN HIS NAMED AND IN THE NAMES OF HIS SON AMARJIT ITA NOS. 183 & 184(ASR)/2012 8 SINGH DHILLON AND WIFE. THEY BEING RURALS AND TO ME ET CERTAIN UNFORESEEN EXPENSES AND NEEDS OF THE FAMILY, NORMAL LY GOOD AMOUNT OF MARRIAGES ETC. IN THE FAMILIES OF THE RELATIVES. SOMETIMES EVEN BANKERS USED TO APPROACH THEM FOR DEPOSITS IN THEIR BANKS BY LURING THEM WITH GOOD RETURNS AND BETTER SERVICES. EVEN B ROTHERS OF THE APPELLANT USED TO CONVEY TO ACCOMMODATE CERTAIN BAN KS BY MAKING DEPOSITS. A FEW EXAMPLES ARE OF HSBC AND CAPITAL LO CAL AREA BANK. ACCORDINGLY THE APPELLANT AND HIS SON SH. AMARJIT S INGH DHILLON USED TO MAKE FREQUENT WITHDRAWALS AND DEPOSITS IN THE BA NKS. THERE ARE INSTANCES WHEN WITHDRAWAL HAVE BEEN MADE FROM ONE B ANK AND DEPOSITS WERE MADE IN ANOTHER BANK. (NOT INCLUDED SINCE IT RELATES TO ADMISSION OF ADDI TIONAL EVIDENCE) GROUND NO.1 THIS IS A GENERAL GROUND AND WILL BE ARGUED ALONGWI TH OTHER GROUNDS OF APPEAL. GROUND NO.2 THE OBSERVATION OF THE AO IN PARAGRAPH OF THE ASSE SSMENT ORDER ARE CORRECT TO THE EXTENT THAT ACCOUNT NO.007 901503160 IN ICICI BANK LTD; NURMAHAL IS IN THE NAME OF THE APPE LLANT AND HIS WIFE SMT. KULDEEP KAUR. THE CLAIM OF THE APPELLANT THAT THE ACCOUNT BELONGED TO HUF HAS NO BEEN REBUTTED BY THE LD. AO. THE APPELLANT WITHDREW RS.14,00,000/- VIDE CHEQUES NO.539387,388 & 389 ON 30.11.2006 & 01.12.2006 (RS.9,000, RS.1,00,000/- AN D RS.1,00,000/-). THEREAFTER, HE DEPOSITED RS.4,00,000/- IN THAT ACCO UNT AND ALSO WITHDREW RS.4,40,000/-ON SIX DIFFERENT DATES. THUS, ONLY FROM WITHDRAWAL OF RECENT PAST CASH IN HOME CHEST AS ON 31.03.2007 WAS RS.14,00,000/- . THE FOLLOWING FACTS ALSO NEED CONS IDERATION. DURING THE FINANCIAL YEAR 2006-07 HE HAD SOLD WHEAT OF RS.72,367/- AND PADDY OF RS.1,84,040/- AGAINST J-FORMS TOTAL RS .2,56,407/- THROUGH COMMISSION AGENTS. HOWEVER, HE SOLD POTATOE S & SUNFLOWER OF RS.5,00,000/- APPROXIMATELY TO CUSTOMER DIRECTLY . THUS, THE SALE PROCEEDS OF RS.7,56,407/- WERE AVAILABLE WITH HIM. APART FROM AMOUNT RECEIVED BY HIM BY SALE OF AGRICU LTURAL PRODUCE, AT LEAST A SUM OF RS.14,00,000/- WAS AVAILABLE WITH HI M OUT OF WITHDRAWALS MADE ON OR AFTER 30.11.2006. ITA NOS. 183 & 184(ASR)/2012 9 THE APPELLANT HAD ALSO SOLD SUNFLOWER AND POTATOES ETC. IN APRIL; 2007, DIRECTLY TO THE CUSTOMERS OF ABOUT RS.6,00,00 0. THUS, HUGE CASH I.E. NOT LESS THAN RS.27,56,407/- WAS AVAILABLE WIT H HIM IN EARLY APRIL, 2007. THE LD. AO MADE ADDITION OF RS.14,00,000/- ON ACCOU NT OF DEPOSITS IN THAT ACCOUNT AFTER WORKING OUT THE PEAK DEPOSITS. THE PEAK OF THE DEPOSITS IN THAT ACCOUNT COMES TO RS.16,50,000/- AN D NOT RS.14,00,000/- AS WORKED OUT BY THE LD. AO. THIS CA SH DEPOSITS STANDS EXPLAINED AS PER CASH FLOW STATEMENT PREPARED AS TH E DIRECTION OF THE AO ASSESSMENT PROCEEDINGS . 2. THOUGH THE DEPOSITS IN THE BANK ACCOUNTS BELONGE D TO THE HINDU UNDIVIDED FAMILY COMPRISING OF SH. JASWSANT S INGH AND HIS BROTHERS, YET THE DEPOSIT IN THE BANK ACCOUNT ARE EXPLAINED/EXPLAINABLE WITH THE HELP OF CASH AND BAN K BOOK. (ALL A/CS) ALREADY SUBMITTED, IT IS PRAYED THAT ADDITION OF RS .14,00,000/- MAY KINDLY BE DELETED. GROUND NO.3. TOTAL OF INVESTMENT AS MENTIONED BY THE LD AO IN P ARAGRAPH 3 OF THE ASSESSMENT ORDER COMES TO RS.51,50,000/- AND NOT RS.48,50,000/-. AS PER ANNEXURE B TO LETTER DATED 27.12.2010, MR. JASWANT SINGH THE APPELLANT MADE INVESTMENT OF RS.49,00,000 /- IN MUTUAL FUNDS BETWEEN 27 TH NOV; 2007 TO 7 TH NOVEMBER, 2007 AND SOLD THOSE FOR RS.53,66,223/- BETWEEN 30.10.2007 TO 09.01.2008 , THUS THERE WAS EXCESS/PROFIT OF RS.4,66,283/-. HOWEVER, THE BANK H AS CALCULATED THE GAIN AT RS.4,77,695/-. IT APPEARS THAT THE BANK HAS DEDUCTED RS.11,472/- ON ACCOUNT OF SERVICE CHARGES. THOUGH T HE PROFIT OF RS.4,77,695/- (RS.4,66,223/- TO BE MORE CORRECT) BE LONGED TO THE HINDU UNDIVIDED FAMILY YET PROFIT RS.4,77,695/- WAS DECLARED TO BUY PEACE OF MIND. THIS WAS DONE IRRESPECTIVE OF THE FA CT THAT INVESTMENT WAS MADE BY THE HUG AND AS PER THE WISHES OF HIS BR OTHERS. THE APPELLANT MADE DEPOSITS OF THE HSBC AND THE BANK MA DE INVESTMENT IN THE MUTUAL FUNDS. WE ARE OF THE VIEW THAT THE EX PLANATION REGARDING DEPOSIT IN THE HSBC WOULD BE GOOD ENOUGH TO EXPLAIN THE INVESTMENT IN MUTUAL FUNDS. ITA NOS. 183 & 184(ASR)/2012 10 THE APPELLANT HAD WITHDRAWN RS.10,00,000/- FROM OBC BANK ON 01.08.2007 AND ANOTHER SUM OF RS.10,00,000 FROM ICICI BANK ON 01.08.2007. THIS AMOUNT OF RS.20,00,000/- WAS DEPO SITED N HSBC ON 21.09.2007. A SUM OF RS.3,75,000/- WAS FROM THE ACC OUNT OF SANGHERA DHILLON PROPERTIES IN HSBC ON 26.08.2007, BANK BALA NCE IN HSBC WAS RS.23,84,037/-. THAT BANK INVESTED IN MUTUAL FU NDS ETC. RS.10,00,000/- (RS.2,00,000+2,00,000+3,00,000+3,00, 000) ON 22.09.2007 AND RS.13,00,000/- [RS.3,00,000+3,00,000+3,00,000+4,00,000] ON 28.09.2 007. ALL THOSE INVESTMENTS WERE SOLD ON 02.11.2007 FOR A SUM OF RS .25,56,931/- AND CREDITED TO THAT BANK WHERE BALANCE SWELLED TO RS. 26,41,046/-. AGAIN ON 07.11.2007 THE HSBC INVESTED RS.26,00,000/- [5,00,000+5,00,000+10,00,000+6,00,000] IN MUTUAL FU NDS. THOSE MUTUAL FUNDS WERE SOLD FOR RS.28,07,318/- ON 18.01. 2008 AND CREDITED TO HIS ACCOUNT. IT IS ALSO A FACT THAT THE BANK DID NOT INFORM THE APPELLANT ABOUT THE TRANSACTIONS. THE APPELLANT DEP OSITED ANOTHER SUM OF RS.6,50,000/- OUT OF THE CASH AVAILABLE WITH HIM. THE TOTAL BANK DEPOSITS INCREASED TO RS.34,98,364/- OUT OF W HICH RS.34,98,000/- WERE TRANSFERRED TO M/S. SANGHERA DH ILLON PROPERTIES LTD. TAKING INTO CONSIDERATION THE ABOVE EXPLANATIO N ALL THE DEPOSITS IN HSBC AND INVESTMENT IN MUTUAL FUNDS ETC. STANDS EXPLAINED. AS ALL THE ENTRIES ARE EXPLAINED AND WERE ALSO EXPLAINED TO THE LEARNED A.O., THEREFORE, NO ADDITION WAS CALLED FOR. IT IS PRAYED THAT ADDITION OF RS.48,50,000/- MAY KINDLY BE DELETED. GROUND NO.4 THE APPELLANT CLAIMED THAT THE FUNDS WHICH WERE INV ESTED IN BANKS ORIGINATED FROM AGRICULTURAL ACTIVITIES ON LA ND BELONGING TO THE HUG. AS ALL OTHER MEMBERS THE HUF WERE OUTSIDE INDI A, THEREFORE, THE ACCOUNT WAS OPENED IN THE NAME OF APPELLANT. TH E LD. AO HAS NOT REJECTED THE CLAIM OF HUF OF THE ASSESSEE. HE HAS A LSO NOT APPRECIATED THE SPIRIT IN WHICH THE INCOME WAS OFFE RED FOR TAXATION AND INITIATED PENALTY U/S 271(1)(C) OF THE ACT. IT IS PRAYED THAT THIS ADDITION OF RS.4,77,695/- MAY KINDLY BE DELETED. GROUND NO.5 ITA NOS. 183 & 184(ASR)/2012 11 THE FAMILY OF THE ASSESSEE CONSISTS OF HIMSELF, HIS WIFE AND SON AMARJIT SINGH WIFE AND THEIR TWO DAUGHTERS. THEIR O NE DAUGHTER WAS WITH HER MOTHER WHO IS WORKING THERE AND PERMANENT RESIDENT OF CANADA. SHE MAINTAINS HERSELF AND THEIR DAUGHTER. I N THE RELEVANT PREVIOUS YEAR THE SECOND DAUGHTER WAS NOT OF SCHOOL GOING AGE AND WAS BEING BROUGHT UP BY THE APPELLANT. THE SON OF T HE APPELLANT WAS IN CANADA AND ENGLAND FOR MORE THAN THREE MONTHS. T HE APPELLANT AND HIS SON ARE TEETOLLERS. MILK AND MOST OF THE EA TABLES WERE FROM AGRICULTURAL LAND. AS SUCH HOUSE HOLD EXPENSES WERE VERY LOW. NO ADDITION IS CALLED FOR ON THIS ACCOUNT. WITHOUT PRE JUDICE TO THE ABOVE SUBMISSION IT AGAIN BROUGHT TO YOUR KIND NOTICE THA T IN CASE SOME ADDITION IS REQUIRED TO BE MADE, THAT COULD BE MADE ON THE BASIS OF INFORMATION COLLECTED BY THE LD. AO. OF COURSE, THE INFORMATION WAS REQUIRED TO BE CONFRONTED THE APPELLANT FOR HIS REA CTION. NO SUCH INFORMATION WAS CONFRONTED TO THE APPELLANT. A SIM PLE READING OF THE ASSESSMENT ORDER SHOWS THAT NO SUCH INFORMATION WAS COLLECTED. ACCORDINGLY, NO ADDITION WAS REQUIRED TO BE MADE. THE ADDITION OF RS.2,00,000/- WHICH BASED PURELY ON IMAGINATION AND GUESS WORK AND NOT ON ANY EVIDENCE AND INFORMATION MAY KINDLY BE DELETED. ADDITIONAL GROUND NO.7 THE LD. AO ERRED IN MAKING ADDITION OF RS.4,64,668 /- ON ACCOUNT OF LONG TERM CAPITAL GAIN BY WRONGLY APPLYING SECTION 54E OF ACT. THE LONG TERM CAPITAL GAIN ON SALE OF LAND AT NURM AHAL TOWN (THOUGH CLAIMED TO BE OUTSIDE THE MUNICIPAL LIMITS) WAS CALCULATED AT NIL. THE CALCULATIONS GIVEN IN THE COURSE OF ASSESS MENT PROCEEDINGS ARE AS UNDER: CALCULATION OF CAPITAL GAIN ON LAND SITUATED AT NU RMAHAL, DISTT. JALANDHAR. CALCULATIONS ARE MADE WITHOUT PREJUDICE TO OUR CLA IM THAT THE LAND SOLD IS NOT A CAPITAL ASSET BEING AGRICULTURE LAND AND OUTSIDE THE MUNICIPAL LIMITS. A CERTIFICATE FROM NAGAR COUNCIL NURMAHAL IS ATTACHED. ITA NOS. 183 & 184(ASR)/2012 12 1. PURCHASE PRICE OF LAND ON 19.07.200 AS PER SALE DEED RS.55,77,500 2. ADD EXPENSES (I) STAMP DUTY -RS.3,34,700 (II) REGISTRATION FEE PAID IN CASH -RS. 10,000 COMMISSIONER PAID TO THE AGENT WHO ARRANGED THE DEAL @ 2% APPROXIMATELY -RS.1,20,000 OTHER EXPENSES INCLUDING WRITING OF THE DEED ETC. -RS. 11,000 TOTAL -RS.4,75,700 3. TOTAL COST OF ACQUISITION -RS.60,53,200 4. INDEX COST OF THE LAND 60,53,200 *551/480 RS.69,48,569 5. HALF SHARE OF THE HUF CONSISTING OF BALBIR SINGH, RASHPAL SINGH AND JASWANT SINGH RS.34,74,284 6. COST OF ACQUISITION OF 9 KANALS RS.27,19,004 7. SALE PRICE OF THE LAND ON 22.08.2007 RS.37,50,000 8. LESS COMMISSION PAID TO BROKER RS. 50,000 9. BALANCE RS. 3,70,000 10. LESS COST OF ACQUISITION RS.27,19,000 11. BALANCE CAPITAL GAIN RS.9,81,000 LESS: PURCHASE OF 10 KANALS AGRICULTURE LAND AT V. SAGARP UR ON 16.05.2008 AS PER COPY OF SALE DEED ATTACHED. I) COST OF LAND -RS.10,00,000 II) STAMP DUTY -RS. 50,000 III) REGISTRATION FEE -RS. 10,000 IV) BROKERAGE -RS. 20,000 V) OTHER EXPENSES - RS. 2,000 RS.10,82,000 VI) BALANCE CAPITAL GAIN RS-NIL- ITA NOS. 183 & 184(ASR)/2012 13 RS.20,00,000/- WAS SPENT ON ADDITIONS AND ALTERATIO N OF RESIDENTIAL HOUSE AS SUBMITTED IN CASH FLOW STATEMENT OF SH. AM ARJIT SINGH ON 16.12.2010. THE CALCULATION MADE BY THE LD. AO ARE NOT CORRECT . HE HAS IGNORED THE REGISTRATION CHARGES AND COMMISSION PAI D TO THE BROKER WITHOUT ASSIGNING REASONS OR MAKING ANY ENQUIRIES . HIS CALCULATION ARE INCORRECT. THE CAPITAL GAIN ARISING FROM THAT T RANSACTION IS RS.9,81,000 AND NOT RS.12,74,004/-. THE LD. AO APPL IED SECTION 54E WHICH IS NOT APPLICABLE AFTER 01.04.1992. THE SECTI ON APPLICABLE IN THE CASE OF APPELLANT IS 54B WHERE THE LIMITATION PERIO D FOR INVESTMENT IS OF TWO YEAR. AN APPLICATION U/S 154 OF THE ACT WAS MOVED AND THE APPELLANT HOPED THAT THE LD. AO WOULD RECTIFY THE M ISTAKE. A COPY OF THE APPLICATION IS ENCLOSED. THE LD. AO HAS EITHER REJECTED OUR APPLICATION U/S 154 OR IS NOT LIKELY TO DECIDE THAT WITH THE LIMITATION PERIOD. HENCE, THIS ADDITIONAL GROUND HAD BEEN TAKE N. IT IS PRAYED THAT THE ADDITIONAL GROUND MAY BE ADMITTED. IT IS PRAYED THAT THE APPELLANT HAS PURCHASED THE AGRICULTURAL LAND FOR A SUM OF RS.10,82,000 ON 16.05.2008 I.E. T HE CAPITAL GAIN HAS BEEN UTILIZED AS PER SECTION 54B OF THE ACT. AS SUC H NO ADDITION IS CALLED FOR, IT IS PRAYED THAT THE ADDITION MAY KIND LY BE DELETED. 8.1. THE LD. CIT(A) HAS NOT TAKEN INTO CONSIDERATIO N THE EXPLANATION OF THE ASSESSEE MENTIONED AT PAGES 5 TO 10 IN HIS ORDE R, MENTIONED HEREINABOVE IN THE RIGHT SPIRIT AND HAS WITHOUT ANY COGENT REAS ON REJECTED THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THE OPENING CASH IN HAND OF RS.14.40 LACS. THE ASSESSEE HAD SUBMITTED CASH FLOW STATEMENT IN WHICH HE HAD SUBMITTED HIS EXPLANATION AND SOURCES OF EACH AND EVERY INVESTMEN T. THE LD. CIT(A) AND THE AO IF HAD ANY DOUBTS WITH REGARD TO THE SAID EX PLANATION, THE SAME COULD HAVE BEEN REJECTED SPECIFICALLY BUT BY MAKING INQUI RY FROM OTHER MEMBERS ITA NOS. 183 & 184(ASR)/2012 14 OF THE FAMILY. BUT THE SAME HAS NOT BEEN DONE BY TH E LD. CIT(A). THE ASSESSEE HAD SUBMITTED ALL THE DOCUMENTARY EVIDENCE ALONGWITH THE CASH FLOW STATEMENT IS NOT UNDER DISPUTE. NO COGENT REAS ONS HAVE BEEN MENTIONED BY THE LD. CIT(A) WHILE REJECTING THE EXPLANATION O F THE ASSESSEE. THE LD. CIT(A) VIDE PARA 10 HAD MENTIONED IF THE OPENING C ASH BALANCE OF RS.14.40 LACS CLAIMED BY THE ASSESSEE IS NOT AVAILABLE, THEN A NEGATIVE CASH BALANCE WILL RESULT. NO REASON HAS BEEN ASSIGNED BY THE LD. CIT(A) FOR REJECTING SUCH OPENING CASH IN HAND. WHEREAS THE ASSESSEE WAS GROW ING CROPS ON THE FAMILY LAND WHICH WAS SUFFICIENT ENOUGH TO PROVE TH E AGRICULTURAL INCOME AND THE CASH IN HAND CLAIMED BY THE ASSESSEE. THE E XPLANATION OF THE ASSESSEE CANNOT BE JUST REJECTED WITHOUT GIVING ANY REASONS FOR REJECTION. THE AO HAS NOT GIVEN ANY REASON FOR NOT ACCEPTING THE E XPLANATION OF THE ASSESSEE, WHICH INCLUDES CASH FLOW STATEMENT WITH D OCUMENTARY EVIDENCES. THE LD. CIT(A) WENT ON TO MAKE HIS OWN ACCOUNTS TO SUSTAIN THE ADDITION WHICH IS NOT PERMISSIBLE. THEREFORE, IN THE FACTS A ND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS HAVI NG AN OPENING CASH IN HAND OF RS.14.40 LACS. THE ASSESSEE WAS GROWING CRO PS ON THE FAMILY LAND AND HE HAD INVESTED THE FAMILY FUNDS TO EARN THE IN COME, WHICH HAS BEEN DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME. T HE EXPLANATION OF THE ASSESSEE WITH REGARD TO HOUSEHOLD EXPENSES APPEARS TO BE SATISFACTORY AND ITA NOS. 183 & 184(ASR)/2012 15 THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTA INING SUCH ADDITION. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITIONS OF RS.28,75,000/-, RS.4,77 ,695/- AND RS. 2,00,000/-. THE SAME ARE DIRECTED TO BE DELETED. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 9. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN THE CA SE OF SH. AMARJIT SINGH DHILLON, IN ITA NO.184(ASR)/2012 FOR THE A.Y. 2008-09. THE FACTS IN THE PRESENT APPEAL ARE IDENTICAL TO THE APPEAL IN T HE CASE OF SH. JASWANT SINGH DHILLON, IN ITA NO.183(ASR)/2012 HEREINABOVE, WHERE THE LD. CIT(A) DID NOT ACCEPT THE OPENING CASH IN HAND OF RS. 24 LACS ON 01.04.2007. WHEREAS THE ASSESSEE HAD SUBMITTED THE EXPLANATION WHICH IS AVAILABLE IN PARA 4.2 OF LD. CIT(A)S ORDER AT PAGES 5 TO 10 OF HIS ORDER. T HE LD. CIT(A) HAS NOT GIVEN ANY COGENT REASONS IN REJECTING THE EXPLANATI ON OF THE ASSESSEE WITH REGARD TO OPENING CASH IN HAND AND CASH FLOW STATEM ENT ALONGWITH DOCUMENTARY EVIDENCES. SINCE THE FACTS IN THE PRESE NT APPEAL ARE IDENTICAL AS IN THE CASE OF SH. JASWANT SINGH DHILLON, IN ITA NO .183(ASR)/2012, DECIDED HEREINABOVE, FOLLOWING THE SAME, THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.27,00,000/- AND RS.1, 50,000/-. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ALL THE GROUND S OF THE ASSESSEE ARE ALLOWED. ITA NOS. 183 & 184(ASR)/2012 16 10. IN THE RESULT, THE APPEALS OF THE ASSESSEES IN ITA NO.183 (ASR)/2012 & ITA NO.184(ASR)/2012 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5TH NOVEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 5TH NOVEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES: SH. JASWANT SINGH DHILLON (II) SH. A MARJIT SINGH DHILLON, JALANDHAR. 2. THE ITO WARD-2, PHAGWARA. 3. THE CIT(A), JLR. 4. THE CIT, JLR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.