DABINDER SINGH SOHAL, JALANDHAR V. ITO, WARD 111(4), JALANDHAR

ITA 202/ASR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0021 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-08-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 21-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK SETHI
• Keywords: Gift; Additional evidence; Cost of acquisition; Onus to prove
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. A. NO. 202/(ASR)/2017 ASSES SMENT YEAR: 2008-09 DABINDER SINGH SOHAL, C/O CA S.K. HANS, 438, LAJPAT NAGAR MARKET, JALANDHAR [PAN: ABNPS 2435D] VS. INCOME TAX OFFICER, WARD-III (4), JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHOK SETHI (ADV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 23.08.2018 DATE OF PRONOUNCEMENT: 14.09.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR ( CIT (A) FOR SHORT) DATED 14.02.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING HIS ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, ('THE A CT' HEREINAFTER) DATED 04.03.2016 FOR ASSESSMENT YEAR (AY) 2008-09. 2. THE ONLY ISSUE ARISING IN THE INSTANT APPEAL IS THE VALIDITY IN LAW, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, OF AN ADDITIO N U/S. 69 OF THE ACT IN THE SUM OF RS. 14,67,520, BEING THE ACQUISITION COST OF AGRICU LTURAL LAND PURCHASED BY THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR (ON 14/2 /2008), WHICH, INCURRED IN CASH, ITA NO. 202/ASR/2017 (AY 2008-09) DABINDER SINGH SOHAL V. ITO 2 IN THE VIEW OF THE REVENUE, COULD NOT BE SATISFACTO RILY EXPLAINED BY THE ASSESSEE AS TO ITS SOURCE. 3. THE ASSESSEE, AS A READING OF THE ASSESSMENT AND IMPUGNED ORDER REVEALS, EXPLAINED THE SAID SOURCE AS A CASH GIFT OF RS. 75 LACS FROM HIS FATHER, SH. MOTA SINGH SOHAL, ALSO, I.E., AS THE ASSESSEE, A RESIDEN T OF UNITED KINGDOM (UK). THE SAME DID NOT FIND ACCEPTANCE IN VIEW OF IT BEING WH OLLY UNSUBSTANTIATED. THE ASSESSEES ONLY PRAYER, THROUGH HIS COUNSEL, SHRI A SHOK SETHI, ADVOCATE, BEFORE US WAS THAT THE ADDITIONAL EVIDENCE, BEING THE DECLARA TION AS TO GIFT (DATED 10/2/2006) BY THE FATHER AND THE CASH WITHDRAWAL OF RS. 300 LA CS FROM HIS BANK ACCOUNT (WITH STATE BANK OF INDIA) ON 27/2/2006, THE AMOUNT STATE D TO HAVE BEEN WITHDRAWN AND DISTRIBUTED AMONGST HIS WIFE AND THREE SONS, INCLUD ING THE ASSESSEE, BE ADMITTED UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL ) RULES, 1963. 4. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE M ATTER. RULE 46A (OF THE INCOME TAX RULES, 1962), MANDATORY IN NATURE, REGULATES THE ADMISSION AND EXAMINATION OF THE ADDITIONAL EVI DENCE LED BEFORE THE FIRST APPELLATE AUTHORITY FOR THE FIRST TIME. THE SAME CO ULD ONLY BE UPON THE FIRST APPELLATE AUTHORITY BEING SATISFIED, RECORDING HIS REASONS THEREFOR, IN WRITING, OF THE ASSESSEE HAVING BEEN PREVENTED BY SUFFICIENT CAUSE IN PRODUCING THE ADDITIONAL EVIDENCE BEFORE THE ASSESSING AUTHORITY. NO SUCH RE ASON OR CAUSE STANDS FURNISHED BEFORE US, THE SECOND APPELLATE AUTHORITY, COMPLYIN G, THUS, WITH THE REQUIREMENT FOR ADMISSION OF ADDITIONAL EVIDENCE EVEN BY THE FIRST APPELLATE AUTHORITY. BEFORE THE SECOND APPELLATE AUTHORITY, THE ASSESSEE HAS NO LEG AL RIGHT PER SE FOR PRODUCTION OF SUCH EVIDENCE. HOWEVER, THE SAID AUTHORITY MAY, FOR ANY SUBSTANTIAL CAUSE, ALLOW THE EVIDENCE TO BE PRODUCED. BOTH THE DOCUMENTS BEI NG SOUGHT TO BE ADMITTED WERE AVAILABLE, IN INDIA, WHERE THEY ORIGINATED, AT THE TIME OF THE ASSESSMENT PROCEEDINGS ITSELF. WHY, EVEN AS WONDERED BY US DUR ING HEARING ALSO, WERE THEY ITA NO. 202/ASR/2017 (AY 2008-09) DABINDER SINGH SOHAL V. ITO 3 NOT PRODUCED, RESULTING IN A PROPER DETERMINATION O F THE MATTER. SO CONSIDERED, AND WHICH CANNOT BE REGARDED AS NOT CORRECT, THE ASSESS EE HAS NO CASE FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE US; THERE BEING NO EXPLA NATION FOR IT BEING NOT FURNISHED AT ANY STAGE EARLIER, WITH, RATHER, THE ASSESSEES CASE NOT FINDING ACCEPTANCE BY THE REVENUE FOR PRECISELY THIS REASON, I.E., LACK OF EV IDENCE AND, THUS, UNSUBSTANTIATED. AT THE SAME TIME, WE DRAW SOME CREDENCE FROM THE FA CT THAT THE ASSESSEES A NON- RESIDENT, CASE THROUGHOUT, THOUGH UNSUBSTANTIATED, HAS BEEN OF A CASH GIFT OF RS. 75 LACS FROM HIS FATHER, I.E., TOWARD THE SOURCE OF TH E COST OF THE IMPUGNED INVESTMENT IN LAND BY HIM. THERE APPEARS TO BE A RING OF TRUTH IN WHAT THE ASSESSEE STATES. WE, THEREFORE, FOR THE STATED REASON/S, ONLY CONSID ER IT PROPER TO, IN THE INTEREST OF JUSTICE, SETTING ASIDE THE IMPUGNED ORD ER, RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING AUTHORITY FOR ADJUDICATION AF RESH IN LIGHT OF THE MATERIAL, INCLUDING THE TWO DOCUMENTS NOW ADDUCED BEFORE US, THAT MAY BE LED BY THE ASSESSEE IN SUPPORT OF HIS CASE. NEEDLESS TO ADD, W E MAY THOUGH NOT BE CONSTRUED AS HAVING ISSUED ANY FINDING IN THE MATTER; OUR DEC ISION BEING GUIDED PRIMARILY BY THE CONSIDERATION TO ENABLE AN ASSESSMENT ON MERITS . ISSUES, ALSO REFERRED TO DURING HEARING, AS TO THE AUTHENTICITY/VERIFICATION OF THE DOCUMENTS, AS THE DECLARATION OF GIFT, MAY ARISE AND NEED TO BE ADDRESSED. THE GIFT DECLARATION PRECEDING THE DATE OF WITHDRAWAL (FROM BANK) OF THE AMOUNT STATED TO BE G IFTED IS, CLEARLY, AN INTENT TO GIFT. THAT, HOWEVER, ITSELF SHOWS THE DOCUMENT WAS PREPARED IN ANTICIPATION, AND NOT WITH A VIEW TO PRESENT IT TO THE TAXING AUTHORI TIES. SEVERAL QUESTIONS, THOUGH, ARISE. HOW COULD, FOR EXAMPLE, ONE WONDERS, THE BAN K ALLOW CASH WITHDRAWAL TO THAT EXTENT (RS. 300 LACS), WHICH ALSO RAISES LOGIS TICAL ISSUES, IMPLYING IMPROBABILITY, BESIDES THE QUESTION OF AVAILABILITY OF ALL THE DONEES AT THE RELEVANT TIME. A PERSON COULD EASILY TRANSFER FUNDS TO PERSO NS WHO MAY NOT NECESSARILY BE AVAILABLE AT THE RELEVANT TIME AT THE GIVEN PLACE, THROUGH THE BANKING CHANNEL. WHY, AGAIN, SHOULD THE ASSESSEE HOLD CASH, AND IN S UCH A HUGE AMOUNT, ALSO SUBJECT ITA NO. 202/ASR/2017 (AY 2008-09) DABINDER SINGH SOHAL V. ITO 4 TO WEALTH-TAX INASMUCH AS IT EXCEEDS A SUM OF RS. 5 0,000 AS AT THE YEAR-END, I.E., WITHOUT DEPOSITING IT IN BANK. THIS IS ALL THE MORE SO IN THE PRESENT CASE AS THE ASSESSEE DOES NOT RESIDE IN INDIA, WHEREAT HE RECEI VED THE AMOUNT FROM HIS FATHER. THE WITHDRAWAL IS OF A LOAN AGAINST A NRE DEPOSIT, I.E., IS THE DISTRIBUTION OF A LOAN AMOUNT. SURELY, A LIABILITY, THOUGH A SOURCE OF AN ASSET, CANNOT BE A SOURCE OF A GIFT, IMPLYING PROPRIETARY RIGHTS IN THE PROPERTY GIFTED. SUCH QUESTIONS COULD VALIDLY ARISE AND NEED BEING EXPLAINED. THAT IS PRECISELY W HY WE HAVE NOT RESTRICTED THE MATERIAL THAT COULD BE RELIED UPON OR ADDUCED BY TH E ASSESSEE IN SUPPORT OF HIS CASE BEFORE THE ASSESSING AUTHORITY, WHICH IS THE APPROP RIATE AUTHORITY TO BE IN LAW SATISFIED AS TO THE NATURE AND SOURCE OF THE IMPUGN ED INVESTMENT. FURTHER, THE AO SHALL CAUSE SUCH VERIFICATION AS HE MAY DEEM FIT AN D PROPER UNDER THE CIRCUMSTANCES, AND ADJUDICATE THE MATTER ADOPTING A REASONABLE, RATHER THAN A LEGALISTIC, APPROACH, ALBEIT BY ISSUING DEFINITE FINDINGS OF FACT AND IN ACCORDANCE WITH LAW. THE BURDEN TO PROVE ITS CLAIMS, WE MAY TH OUGH CLARIFY, IS ON THE ASSESSEE. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEE APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 14, 2018 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 14.09.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: DABINDER SINGH SOHAL, C/O CA S.K. HANS, 438, LAJPAT NAGAR MARKET, JALANDHAR (2) THE RESPONDENT: INCOME TAX OFFICER, WARD-II I (4), JALANDHAR (3) THE CIT(APPEALS)-2, JALANDHAR (4) THE CIT CONCERNED TRUE COPY (5) THE SR. DR, I.T.A.T. BY ORDER