DCIT, Chandigarh V. Sham Lal, Chandigarh

ITA 212/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5464 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.212 /CHD/2011 (ASSESSMENT YEAR : 2008-09) THE D.C.I.T., VS. SHAM LAL CIRCLE(1) HOUSE NO.104, CHANDIGARH. SECTOR 16-A, CHANDIGARH. PAN: AAMPL5813G (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.SARITA KUMARI, DR RESPONDENT BY : NONE O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (A), DATED 24.9.2010 REL ATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPE AL : WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT IN LAW IN DELETI NG THE ADDITION OF RS.12 LAC MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT, WHEN THE ASSESSEE HAD FAILED TO PROVE THE SOURCE OF THE SAME DURING THE COURSE OF THE ASSTT PROCEEDINGS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E REFLECTED INCOME 2 FROM PENSION, HOUSE PROPERTY AND OTHER SOURCES IN H IS RETURN OF INCOME. THE CASE WAS TAKEN UP FOR SCRUTINY. THE A.O. RECEI VED INFORMATION FROM ADIT (INV.)II, CHANDIGARH THROUGH COMMISSIONER OF I NCOME-TAX-I VIDE LETTER DATED 25.2.2009 IN RESPECT OF THE INVESTMENT OF THE ASSESSEE IN LIFE INSURANCE POLICIES. THE ASSESSEE HAD MADE TOT AL PREMIUM PAYMENT OF RS.12 LACS TOWARDS LIFE INSURANCE POLICY DURING AUGUST, 2007 THROUGH CASH AND MULTIPLE DD TRANSACTIONS. THE SAID INVEST MENT OF RS.12 LACS WAS MADE IN THE PENSION SCHEME OF KOTAK LIFE INSURA NCE COMPANY. FURTHER THERE WERE CASH CREDITS IN THE BANK ACCOUNT OF THE ASSESSEE WITH PNB. THE A.O. REQUISITIONED THE ASSESSEE TO EXPLA IN THE SOURCE OF THE AFORESAID DEPOSITS. IN REPLY, IT WAS EXPLAINED BY THE ASSESSEE THAT HE HAD SOLD HIS ANCESTRAL AGRICULTURAL LAND IN VILLAGE MAR DON AND THARVA IN DISTT. AMBALA IN MARCH, 2005 AND HAD RECEIVED A SUM OF RS.8,50,000/- AND RS.3,50,000/- AGGREGATING TO RS.12 LACS IN CASH . THE COPIES OF THE SALE DEEDS WERE FURNISHED BEFORE THE A.O. THE ASSE SSEE FURTHER CLAIMS THAT IMMEDIATELY AFTER THE SALE OF THE AGRICULTURAL LAND HIS EYE SIGHT DROPPED TO SUCH AN EXTENT THAT HE BECAME ALMOST BLI ND. THE ASSESSEE CLAIMED TO BE IN GREAT SHOCK AND HE WAS UNDER THE I MPRESSION THAT THE TREATMENT OF EYES WOULD BE COSTLY AND AS SUCH HE KE PT THE CASH RECEIVED IN HIS PERSONAL CUSTODY FOR THE TREATMENT. THE ASS ESSEE ON THE ADVICE OF HIS FAMILY MEMBERS AFTER A GAP OF TIME DEPOSITED TH E AMOUNT IN THE PENSION SCHEME OF KOTAK LIFE INSURANCE COMPANY, BEC AUSE AT THE RELEVANT TIME HE CLAIMS THAT HIS GRANDSON WAS POST ED IN KOTAK LIFE INSURANCE COMPANY AT A MANAGERIAL POST AND HIS PROM OTION WAS RELATED TO THE QUANTUM OF BUSINESS GIVEN BY HIM TO THE CO MPANY. ACCORDINGLY, THE SAID SUM OF RS.12 LACS WAS D EPOSITED IN THE PENSION SCHEME OF KOTAK LIFE INSURANCE COMPANY. THE A.O. ACCEPTED THE PLEA OF THE ASSESSEE IN RESPECT OF RECEIPT OF RS.8,50,000/- AND RS.3,50,000/- AGGREGATING TO RS.12 LACS IN CASH A GAINST THE SALE PROCEEDS 3 OF THE AGRICULTURAL LAND. HOWEVER, THE A.O. FOUND IT DIFFICULT TO ACCEPT THAT FOR MORE THAN TWO YEARS CASH OF RS.12 LACS WAS LYING AT THE HOUSE OF THE ASSESSEE. THE A.O. REJECTED THE PLEA OF THE AS SESSEE AND TREATED THE SAID AMOUNT OF RS.12 LACS AS INCOME FROM UNDISCLOSE D SOURCES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. BEFORE THE CIT(A) THE ASSESSEE FURNISHED THE EVI DENCE OF HIS MEDICAL HISTORY AND CONTENDED THAT AT THIS FAG END OF HIS LIFE HE WOULD NOT HAVE PARTED WITH HIS ASSET. THE STATEMENT OF T HE ASSESSEE BEFORE THE CIT(A) WAS AS UNDER : 7. DURING THE APPELLATE PROCEEDINGS, THE LD.COUNSE L SUBMITTED THAT THE ASSESSING OFFICER DID NOT GIVE A NY REASON FOR DISBELIEVING THE FACT AND DID NOT PROVE HOW THE AMOUNT INVESTED WAS DIFFERENT FROM THE ONCE CLAIMED BY THE APPELLANT. THE APPELLANT RELIED UPON THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. KARODILAL AGGARWAL (1994) 50 TTJ (JAB) 393 WHEREIN IT WAS HEL D THAT IT IS WELL ESTABLISHED PRINCIPLE OF LAW THAT S USPICION HOW SO FOR STRONG IT MAY BE, DOES NOT TAKE THE PLAC E OF PROOF. THE EVIDENCE ON RECORD HAS TO BE ACCEPTED. ADDITION WAS RIGHTLY DELETED WHERE THERE WAS NOTHIN G BUT SUSPICION AGAINST THE ASSESSEE AS AGAINST POSITIVE EVIDENCE IN HIS FAVOUR. 8. FURTHER THE COUNSEL SUBMITTED DOCUMENTS AS EVIDENCE OF ASSESSEES MEDICAL HISTORY AND CONTENDE D THAT AT THIS FAG END OF HIS LIFE, THE ASSESSEE WOULD NOT PART WITH ASSETS AND WOULD NOT BE EASILY CONVINCED. 5. THE CIT(A) HELD AS UNDER : 9. I HAVE GONE THROUGH THE RIVAL CONTENTIONS AND I HAVE OBSERVED THAT THERE IS NOTHING CONCRETE WITH E ITHER PARTY TO ESTABLISH WHAT THEY CONTEND. FOR INSTANCE , THE ASSESSING OFFICER DOES NOT DISPUTE THE SOURCE OF 12 LACS BUT FINDS IT DIFFICULT TO BELIEVE THAT ANY ONE COUL D KEEP SO MUCH CASH AT HOME FOR 2 YEARS. HE GOES ON TO SAY T HAT 4 THE ASSESSEE COULD NOT PROVE THAT SAME CASH WAS BEI NG USED FOR PURCHASE OF LIFE INSURANCE POLICY. THE APPELLANT ON THE OTHER HAND PROVED THE SOURCE OF CA SH BY PROVIDING COPIES OF SALE DEEDS (IN ANY CASE NOT DIS PUTED BY THE ASSESSING OFFICER); PROVED THAT HE HAD A DETERIORATING MEDICAL CONDITION AND SO WISHED TO KE EP CASH WITH HIM FOR WHATEVER REASONS AND LATER AT THE INSISTENCE OF FAMILY MEMBERS AND TO GIVE BUSINESS T O HIS GRANDSON WHICH COULD LEAD TO HIS PROMOTION, DEPOSIT ED THE MONEY IN THE BANK AND THEN BOUGHT LIFE INSURANC E POLICY. 10. WHEN I LOOK AT THE WHOLE SITUATION, I AM INCLIN ED TO AGREE WITH THE APPELLANT FOR THE FOLLOWING REASONS : (I) THE ASSESSING OFFICER HAS NOT BEEN ABLE TO ESTABLISH THAT RS.12 LACS RECEIVED OUT OF SALE OF LAND HAD BEEN UTILIZED ELSEWHERE AND WAS NOT AVAILABLE FOR INVESTMENT IN KOTAK MAHINDRA. (II) IT IS ESTABLISHED LAW THAT SUSPICION HOWSOEVER STRONG CANNOT TAKE THE PLACE OF PROOF OR POSITIVE EVIDENCE AND I FIND THAT THE INSTANT CASE IS BASED ON SUSPICION ALONE. (III) A AGREE WITH THE ASSESSING OFFICER TO THE EXTENT THAT IT SEEMS IMPROBABLE THAT SOMEONE WOULD KEEP A HUGE AMOUNT OF CASH AT HOME FOR SUCH A LONG TIME, BUT AT THE SAME TIME, I ALSO BELIEVE THAT AT A RIPE OLD AGE OF 85 (WHEN TRANSACTIONS WERE MADE), THE BEHAVIOUR OF OLD PEOPLE IS REALLY UNPREDICTABLE AND CAN DEVIATE FROM NORMAL DUE TO CERTAIN INSECURITIES AND OTHER AGE RELATED PROBLEMS. (IV) I QUITE AGREE WITH THE APPELLANT THAT THE OLD GENTLEMAN INITIALLY REFUSED TO PART WITH HIS CASH AND THEN IN ANOTHER MOOD SWING 5 THOUGHT OF INVESTING FOR THE SAKE OF HIS GRANDSON. 6. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHAL F OF THE ASSESSEE AND WE PROCEED TO DISPOSE OFF THE APPEAL AFTER HEAR ING THE LEARNED D.R. FOR THE REVENUE. ON PERUSAL OF RECORD WE FIND THAT THE A.O. HAD ACCEPTED THE ASSESSEE TO HAVE RECEIVED RS.12 LACS I N CASH ON SALE OF HIS AGRICULTURAL LAND IN MARCH 2005. THE ASSESSEE CLAI MS THAT THE SAID SUM OF RS.12 LACS WAS UTILIZED FOR INVESTMENT IN THE PE NSION SCHEME OF KOTAK LIFE INSURANCE COMPANY DURING THE FINANCIAL YEAR 20 07-08. THE SAID INVESTMENT WAS MADE IN CASH OR THROUGH DD TRANSACTI ON. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD WAS THAT IMMEDIATELY AFTER THE SALE OF HIS AGRICULTURAL LAND THERE WAS LOSS OF EYE SIGHT AND HE KEPT THE CASH AT HOME FOR HIS MEDICAL TREATMENT. THE NECESS ARY EVIDENCE IN THIS REGARD HAS BEEN FURNISHED BEFORE THE CIT(A). THE A SSESSEE IN THE YEAR UNDER APPEAL WAS OF 85 YEARS OF AGE AND HIS CONTENT ION WAS THAT AT HIS AGE IT WAS NOT EASY FOR HIM TO PART WITH HIS CASH A ND THE SAME WAS LYING AT HOME. IN THE ENTIRETY OF THE FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE IN CONFORMITY WITH THE ORDER OF THE CIT(A) THAT IN THE FACTS AND CIRCUMSTANCES WHERE THE ASSESSEE HAS ESTABLISHED TH E SOURCE OF THE CASH AVAILABLE WITH HIM, THERE IS NO MERIT IN THE AFORES AID ADDITION MADE BY THE A.O. KEEPING IN VIEW THE AGE AND THE PECULIAR C IRCUMSTANCES OF THE CASE. UPHOLDING THE ORDER OF THE CIT(A) WE DISMISS GROUND NO.1 RAISED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF APRIL, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH APRIL, 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH