SHRI KAMALJIT VIJ, JALANDHAR V. INCOME TAX OFFICER-II(1), JALANDHAR

ITA 214/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7091 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: RAJIV MAKOL
• Keywords: Unexplained investment
• Section: 271(1)(c); 142(1); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SH. N. K. SAINI, HONBLE VICE PRESIDENT AND SH. RAVISH SOOD, JUDICIAL MEMBER ITA NO.214/ASR./2018 : ASSTT. YEAR : 2009-10 SH. KAMALJIT VIJ, C/O SH. DINESH SARNA, ADV., MODEL TOWN ROAD, JALANDHAR VS INCOME TAX OFFICER, WARD-II(1), JALANDHAR (APPELLANT) (RESPONDENT) PAN NO. ADGPK5520Q ASSESSEE BY : SH. RAJIV MAKOL, CA REVENUE BY : SH. BHAWAN I SHANKAR, DR DATE OF HEARING : 09.01.2019 DATE OF PRONOUNCEMENT : 15.01.2019 ORDER PER N. K. SAINI, VICE PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 23.02.2018 OF LD. CIT(A)-1, JALANDHAR. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE CONFIMRATION OF ADDITION OF RS.20,60,000/- MADE BY THE AO U/S 69 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) ON ACCOUNT OF UNEXPLAINED INVESTMENT. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ELECTRONICALLY ON 24.03.2010 DECLARING AN INCOME OF RS.1,36,340/- WHICH WAS PROCESSED U/S 153(1) OF THE ACT. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COUR SE OF ASSESSMENT ITA NO. 214/ASR./2018 KAMALJIT VIJ 2 PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS D EPOSITED CASH AMOUNTING TO RS.27,00,000/- ON DIFFERENT DATES IN T HE SAVING BANK ACCOUNT MAINTAINED WITH ICICI BANK, NEW GRAIN MARKE T, JALANDHAR. THE BANK STATEMENT WAS CONFRONTED TO THE ASSESSEE WHO CALIMED THAT HE HAD MADE AN AGREEMENT ON 02.01.2009 WITH M/S HEMKUNT COLD STORAGE (P) LTD., VILLAGE DALLA, DISTT . MOGA FOR SALE OF HIS FACTORY LAND MEASURING 10 MARLAS FOR RS.30,0 0,000/- AND HAD RECEIVED ADVANCE OF RS.18,00,000/- WHICH WAS DEPOSI TED IN HIS BANK ACCOUNT AND THE SAID AGREEMENT LATER ON WAS CA NCELLED ON 02.01.2011 DUE TO FAMILY DISPUTE AND THE AMOUNT OF ADVANCE WAS THEN REFUNDED TO THE SAID COMPANY. THE ASSESSEE ALS O FILED PHOTOCOPIES OF THE AGREEMENT AND BALANCE SHEET OF T HE SAID COMPANY AS ON 31.03.2009 WHEREIN ADVANCE OF RS.30,0 0,000/- WAS SHOWN AND IT WAS CLAIMED THAT THE SAID ADVANCE OF R S.18,00,000/- WAS PART OF THE AMOUNT OF RS.30,00,000/-. THE AO AS KED THE ASSESSEE TO PRODUCE SH. MOHINDER SINGH, A DIRECTOR OF THE COMPANY M/S HEMKUNT COLD STORAGE (P) LTD. AND ALSO ISSUED S UMMONS U/S 131(1) OF THE ACT TO SH. MOHINDER SINGH FOR HIS PER SONAL ATTENDANCE. ACCORDING TO THE AO, THE ASSESSEE EXPRE SSED HIS INABILITY TO PRODUCE EITHER THE ORIGINAL AGREEMENT OR SH. MOHINDER SINGH. THE AO IN ORDER TO VERIFY THE GENUINENESS OF THE STAMP PAPER OF RS.500/- WHICH HAS BEEN USED FOR THE AGREE MENT, ISSUED SUMMONS U/S 131(1) OF THE ACT TO THE STAMP VENDOR S MT. SHASHI BALA. THE AO OBSERVED THAT THE STAMP AT SERIAL NO. 12647 TO 12651 WERE ISSUED IN THE NAME OF OBC BANK, BHAGAT SINGH C HOWK, JALANDHAR. HE ALSO OBSERVED THAT FIGURE OF DENOMINA TION, RS.5/- WAS CHANGED TO RS.500/- AND THAT SMT. SHASHI BALA, STAM P VENDOR COULD ITA NO. 214/ASR./2018 KAMALJIT VIJ 3 NOT VERIFY THE CUTTINGS. THE AO ALSO OBSERVED THAT THE BANK IN HIS REPLY DATED 14.12.2011, STATED THAT STAMP PAPERS BE ARING SERIAL NOS. 12647 TO 12651 ISSUED BY SMT. SHASHI BALA, STAMP VE NDOR WERE PURCHASED IN THE NAME OF BANK BY ITS CUSTOMER/BORRO WER IN CONNECTION WITH THE LOAN RAISED FROM THE BANK. WHEN THE ASSESSEE WAS CONFRONTED, IT WAS SUBMITTED THAT THE STAMP VEN DOR HAD ADMITTED ISSUANCE OF STAMP PAPER TO THE ASSESSEE AN D MERE CUTTING OR OVERWRITING IN THE STAMP REGISTER WOULD NOT RESU LT INTO ANY ADVERSE VIEW TO BE TAKEN. THE AO, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS O THE ASSESSEE AND MADE THE ADDITIO N OF RS.20,60,000/- BY OBSERVING IN PARAS 3.1 TO 3.3 AS UNDER: 3.1 IN VIEW OF THE UNDENIABLE EVIDENCE OF AVAILABI LITY OF ORIGINAL STAMP PAPERS OF THE SAME SERIAL NUMBER IN THE NAME OF THE BANK AND FURTHER THE ABOVE FACTS INDICA TING ANOMALIES IN THE ALLEGED TRANSACTION, IT IS CLEAR T HAT THE ASSESSEE'S MAKE BELIEVE STORY OF THE ALLEGED SALE O F FACTORY, HAS NO LEGS TO STAND. THE DOCUMENT PRODUCED BY HIM WAS MANUFACTURED, FORGED TO ANTEDATE IT TO JUSTIFY THE CASH CREDITS IN HIS UNDISCLOSED BANK ACCOUNT. THUS, SOUR CES OF CASH DEPOSIT UPTO RS.18,00,000/- IN HIS BANK ACCOUN T, AS DISCUSSED ABOVE, ARE NOT PROVED AND THEREFORE HELD AS THE ASSESSEE'S UNEXPLAINED INVESTMENT U/S 69 OF THE ACT . 3.2 DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED THE COPY OF THE STATED AGREEMENT TO EXPLAIN T HE SOURCES OF CREDIT OF CASH ON 31.01.2009 & 14.02.200 9, BUT HE DID NOT FILE ANY SUBMISSION OR EVIDENCE REGARDIN G THE SOURCE OF CREDIT OF RS.9,00,000/- ON 25.03.2009. IT WAS ONLY WHEN DURING THE COURSE OF LAST HEARING ON 12.12.201 1, THIS OFFICE SPECIFICALLY ASKED HIM AGAIN TO EXPLAIN THE SOURCE OF THE SAID CREDIT ON 25.03.2009, THAT THE ASSESSEE SU BMITTED HIS VERBAL REPLY THAT THE STATED AMOUNT WAS DEPOSIT ED OUT OF CASH WITHDRAWALS FROM THE SAME ACCOUNT. WHEN POINTE D OUT THAT SUCH CASH WITHDRAWALS AMOUNTED TO RS.6,40,000/ - ONLY WHEREAS THE AMOUNT OF DEPOSIT WAS OF RS.9,00,000/-, THE ITA NO. 214/ASR./2018 KAMALJIT VIJ 4 ASSESSEE SUBMITTED THAT THE REMAINING AMOUNT WAS OU T OF HIS PAST CASH SAVINGS LYING AT HOME. HE HOWEVER SHO WED HIS INABILITY IN FURNISHING ANY EVIDENCE IN SUPPORT OF HIS CONTENTION. WHEN ASKED TO EXPLAIN FOR WHAT PURPOSE THE CASH WAS WITHDRAWN IN THE MONTHS OF FEBRUARY AND MA RCH 2009, WHICH WAS CLAIMED TO HAVE BEEN RE-DEPOSITED, THE ASSESSEE SUBMITTED THAT HE DID NOT RECOLLECT THE PU RPOSE FOR WHICH THE AMOUNT WAS WITHDRAWN. THEREFORE, HIS VERS ION THAT THE CASH DEPOSIT OF RS.9,00,000/- ON 28.03.200 9 WAS OUT OF PAST CASH SAVINGS AND PREVIOUS CASH WITHDRAW AL CANNOT BE ACCEPTED IN FULL IN THE ABSENCE OF ANY EV IDENCE TO SUPPORT HIS CONTENTIONS. HOWEVER, GIVING HIM THE BE NEFIT OF DOUBT, SOURCES OF CASH DEPOSIT UPTO RS.6 40,000/- O UT OF PAST CASH WITHDRAWALS FROM THE SAME ACCOUNT ARE ACC EPTED; AND THE REMAINING AMOUNT OF RS.2,60,000/- IS HELD A S THE ASSESSEE'S UNEXPLAINEC INVESTMENT IN HIS BANK ACCOU NT FROM UNDISCLOSED SOURCES. 3.3 IN VIEW OF THE DISCUSSION IN PARA 3.2 AND 3.3 A BOVE, IT IS HELD THAT OUT OF CASH DEPOSIT OF RS.27,00,000 /- IN THE ASSESSEE'S SAVIRAG ACCOUNT NO. 061201501602 WITH TH E ICICI BANK, NEW GRAIN MARKET, JALANDHAR, AMOUNT OF RS,20,60,000/- REPRESENT THE ASSESSEE'S UNEXPLAINED INVESTMENT OUT OF HIS UNDISCLOSED SOURCES AND ACCOR DINGLY ADDED TO HIS TOTAL INCOME. SINCE THE ASSESSEE HAS F AILED TO EXPLAIN SATISFACTORILY THE SOURCES OF THIS INVESTME NT, I AM SATISFIED THAT HE IS GUILTY OF CONCEALMENT OF PARTI CULARS OF HIS TOTAL INCOME. THEREFORE, PENALTY PROCEEDINGS U/ S 271(1)(C) HAVE BEEN INITIATED SEPARATELY FOR CONCEA LMENT OF INCOME OF RS.20,60,000/-. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSION STATING THEREIN AS UNDER: IN ADDITION TO THE STATEMENT OF FACTS IT IS SUBMIT TED THAT THIS IS THE CASE OF AN ASSESSEE INDIVIDUAL, RUNNING BUSINESS UNDER THE NAME & STYLE OF M/S KAVICO INTERNATIONAL. ASSESSE FILED RETURN OF INCOME ON 24.03.2010 FOR RS . 1,36,340/-. NOTICES U/S 143(2) & 142(1) WERE ISSUED IN RESPONSE TO WHICH ASSESSEE FILED DETAIL AND DOCUMEN TS ITA NO. 214/ASR./2018 KAMALJIT VIJ 5 CALLED FROM TIME TO TIME. BUT WHILE FRAMING ASSESSM ENT THE LD. ASSESSING OFFICER IGNORING THE FACTS WRONGLY MA DE AN ADDITION OF RS. 20,61,604/- I.E. RS. 20,60,000/- ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNT TREATING THE SAME AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AND RS. 1, 604/- ON ACCOUNT OF INTEREST FROM BANK. AGGRIEVED BY THE ORD ER ASSESSEE PREFERRED APPEAL ON THE FOLLOWING GROUND: 1. THAT THE ONLY GROUND OF APPEAL IS THAT THE LD. ASSESSING OFFICER WRONGLY MADE AN ADDITION OF RS. 20,60,000/- U/S 69 OF THE ACT ON ACCOUNT OF UNEXPLA INED INVESTMENT, WITHOUT CONSIDERING THE DOCUMENT PRODUC ED AS A PROOF OF ADVANCE FOR SALE OF PROPERTY. SIR, IT IS SUBMITTED THAT DURING THE YEAR UNDER CON SIDERATION ASSESSEE DEPOSITED CASH AMOUNTING TO RS. 27.00 LACS IN HIS BANK ACCOUNT I.E. RS. 9.00 LACS EACH ON 29.01.2009, 14.02.2009 & 25.03.2009. DURING THE ASSESSMENT ASSE SSEE WAS ASKED FOR THE SOURCES OF CASH DEPOSITED IN BANK ACCOUNT. IN RESPONSE TO WHICH ASSESSEE FILED HIS SU BMISSION THAT ASSESSEE ENTERED INTO AN AGREEMENT FOR THE SAL E OF HIS FACTORY LAND WITH MZS HEMKUNT COLD STORAGE (P) LTD. FOR RS. 30,00,000/- ON 02.01.2009 AGAINST WHICH ASSESSE E RECEIVED ADVANCE AMOUNTING TO RS. 18.00 LACS WHICH WAS DEPOSITED IN BANK ACCOUNT AND TO PROVE THE SAME ASS ESSEE FILED COPY OF AGREEMENT BEFORE THE LD. ASSESSING OF FICER. SIR, TO PROVE THE GENUINENESS OF HIS CONTENTION ASS ESSEE FILED COPY OF AGREEMENT AS WELL AS ALSO FILED THE C OPY OF BALANCE SHEET OF THE SAID COMPANY WHEREIN RS. 30.00 REFLECTED AS ADVANCE, RS. 18.00 RECEIVED BY ASSESSE E IS A PART OF TOTAL AMOUNT REFLECTING IN BALANCE SHEET. A SSESSEE ENTERED INTO AN AGREEMENT ON 02.01.2009 FOR SALE OF FACTORY LAND BUT THEREAFTER DUE TO FAMILY DISPUTE THE SAID DEAL WAS NOT MATURED AND ASSESSEE REPAID THE AMOUNT SO RECEI VED AS ADVANCE TO THE SAID COMPANY ON OR BEFORE 02.01.2011 . BUT THE LD. ASSESSING OFFICER HAS NOT ACCEPTED THE EXPL ANATION OF ASSESSEE DUE TO THE REASON THAT (I) PHOTOCOPY OF AGREEMENT IS NOT AN ADMISSIBLE EVIDENCE & (II) ASSE SSEE FAILED TO PRODUCE SH. MOHINDER SINGH FOR PERSONAL VERIFICATION. ITA NO. 214/ASR./2018 KAMALJIT VIJ 6 SIR, ASSESSEE FAILED TO PRODUCE SH. MOHINDER SINGH BECAUSE OF HIS OLD AGE. HE WAS UNABLE TO MOVE FROM BED DURI NG THAT DAYS AND AS REGARD PHOTOCOPY OF AGREEMENT IT IS SUB MITTED THAT ASSESSEE WAS HAVING ONLY PHOTOCOPY OF AGREEMEN T WHICH WAS PRODUCED BEFORE THE LD. ASSESSING OFFICER BUT TO PROVE THE SOURCES ASSESSEE ALSO FILED COPY OF BALAN CE SHEET OF COMPANY, WHICH WAS ALSO NOT ACCEPTED BY THE LD. ASSESSING OFFICER. SIR, IT IS AGAIN SUBMITTED THAT ASSESSEE DEPOSITED CASH IN BANK ACCOUNT OUT OF THE CASH ADVANCE RECEIVED BY HI M AND ALSO PROVED THE SAME BUT THE LD. ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF ASSESSEE AND GIVEN BENE FIT OF RS. 6,40,000/- I.E. CASH WITHDRAWAL FROM BANK ACCOU NT AGAINST TOTAL CASH AMOUNTING TO RS. 27.00 AND MADE ADDITION OF RS. 20,60,000/- WITHOUT PUTTING ANY COG ENT EVIDENCE ON RECORD THAT ASSESSEE HAS NOT ENTERED IN TO THE SAID AGREEMENT. THE LD. ASSESSING OFFICER HAS FAILE D TO APPRECIATE THE FACTS OF THIS CASE AS ASSESSEE HAS D ULY PROVED THE SOURCES OF CASH DEPOSITED IN BANK ACCOUN T BUT THE LD. ASSESSING OFFICER IS NOT JUSTIFIED BY NOT A CCEPTING THE EXPLANATION OF ASSESSES. IT IS THEREFORE REQUES TED THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CAS E ADDITION MADE BY THE LD. ASSESSING OFFICER MAY KIND LY BE DELETED. COUNTER COMMENTS OF THE ASSESSEE FILED ON THE REMAN D REPORT: IN RESPONSE TO THE COMMENTS OF THE LD. ASSESSING OF FICER VIDE REPORT NO. ITO/II(1) /JAL /2015- 16/119 DATED 27.05.2015, WHEREIN THE LD. ASSESSING OFFICER STATE D THAT .DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS NOTICED THAT A CASH DEPOSIT TOTALING RS. 27,00,0 00/- WERE MADE IN SAVING BANK ACCOUNT OF THE ASSESSEE. THE AS SESSEE EXPLAINED THAT HE HAD RECEIVED AN ADVANCE OF RS. 18,00,000/- AGAINST THE PROPOSED SALE OF HIS FACTOR Y! LAND. IN SUPPORT OF HIS CONTENTION HE FILED A PHOTOCOPY O F AN AGREEMENT OF SALE WITH THE PURCHASER SH. MOHINDER S INGH, DIRECTOR OF M/S HEMKUNT COLD STORAGE (P) LTD., VILL A DALA, ITA NO. 214/ASR./2018 KAMALJIT VIJ 7 DIST. MOGA. THE ASSESSEE WAS GIVEN VARIOUS OPPORTUN ITIES TO PRODUCE SH. MOHINDER SINGH AND ALSO FILE THE ORI GINAL AGREEMENT. HOWEVER ASSESSEE FAILED TO PRODUCE THE AGREEMENT IN ORIGINAL AND THE PURCHASER FOR VERIFIC ATION RENDERING THE SAID TRANSACTION AS DOUBTFUL. ..ASSESSMENT HAS BEEN FRAMED AFTER EXAMINING ALL THE FACTS AND THE SUBMISSION MADE BY THE ASSESSEE AT TH E TIME OF ASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE, IT IS REQUESTED THAT APPEAL OF ASSESSEE MAY KINDLY BE DEC IDED ON MERITS. SIR, THE FACTS OF THIS CASE ARE THAT DURING THE YEA R UNDER CONSIDERATION ASSESSEE DEPOSITED CASH AMOUNTING TO RS. 27.00 LACS IN HIS SAVING BANK ACCOUNT. WHEN ASSESSE E WAS ASKED FOR THE SOURCES OF CASH DEPOSIT IN BANK ACCOU NT, ASSESSEE STATED THAT DURING THE .YEAR UNDER CONSIDE RATION ASSESSEE ENTERED INTO AN AGREEMENT FOR SALE OF HIS FACTORY LAND FOR RS. 30,00,000/- AGAINST WHICH ASSESSEE REC EIVED RS.18,00,000/- AS ADVANCE WHICH WAS DEPOSITED IN BA NK ACCOUNT AND BALANCE RS.9,00,000/- WAS DEPOSITED OUT OF CASH WITHDRAWAL AMOUNTING TO RS.6,40,000/- & RS.2,60,000/- OUT OF HIS PAST SAVING LAYING WITH HI M. BUT THE LD. ASSESSING OFFICER IGNORING THE SUBMISSION O F ASSESSEE GAVE BENEFIT ONLY OF RS.6,40,000/- AND MAD E ADDITION OF RS.20,60,000/- TO THE INCOME OF ASSESSE E. SIR, WHILE FRAMING ASSESSMENT THE LD. ASSESSING OFF ICER HAS TOTALLY IGNORED THE AGREEMENT TO SELL ENTERED BETWE EN THE ASSESSEE AND SH. MOHINDER SINGH AGAINST WHICH ASSES SEE RECEIVED RS. 18,00,000/- ONLY ON THE BASIS THAT ASS ESSEE FAIL TO PRODUCE THE ORIGINAL AGREEMENT AND SH. MOHINDER SINGH FOR VERIFICATION. SIR, IN THIS REGARD IT IS SUBMITTED THAT ASSESSEE E NTERED INTO AN AGREEMENT TO SELL WITH SH. MOHINDER SINGH, DIREC TOR MZS HEMKUNT COLD STORAGE (P) LTD. FOR SALE OF HIS F ACTORY LAND AND AGAINST WHICH ASSESSEE RECEIVED RS. 18,00, 000/- ADVANCE ON 02.01.2009 BUT DUE TO SOME FAMILY DISPUT E THE SAID AGREEMENT WAS NOT MATURED AND THE SAME WAS CANCELLED ON 02.01.2011 AND THE AMOUNT WAS RETURNED TO THE SH. MOHINDER SINGH. ITA NO. 214/ASR./2018 KAMALJIT VIJ 8 SIR, AS PER INCOME -TAX ACT, ASSESSEE WAS UNDER ONU S TO PROVE THE SOURCES OF CASH AND THE SAME WAS PROVED A S FOLLOWS: 1. THAT ASSESSEE WAS IN THE CUSTODY OF COPY OF AGRE EMENT WHICH WAS PRODUCED BEFORE THE LD. ASSESSING OFFICER AS THE ORIGINAL AGREEMENT WAS LAID WITH SH. MOHINDER S INGH HIMSELF WHO IS PURCHASER. 2. THAT THE IMPUGNED AGREEMENT WAS PURCHASED BY SH. MOHINDER SINGH HIMSELF AS IT WAS THE DUTY OF PURCHA SER NOT OF THE SELLER. 3. THAT ASSESSEE WAS DUTY BOUND TO PROVE THE SOURCE S OF THE INVESTMENT SO TO PROVE THE SOURCES OF INVESTMEN T ASSESSEE FILES THE BALANCE SHEET OF MJS HEMKUNT COL D STORAGE (P) LTD., WHEREIN ADVANCE AMOUNTING TO RS. 30,00,000/- HAD SHOWN AND OUT OF WHICH RS. 18,00,00 0/- WAS THE PART OF SAID ADVANCE. 4. THAT ASSESSEE WAS ASKED TO PRODUCE THE SH. MOHIN DER SINGH FOR VERIFICATION, BUT ASSESSEE WAS UNABLE TO PRODUCE HIM AS HE WAS VERY OLD PERSON. HE WAS UNABL E TO MOVE FROM BED ON THAT DAYS AND LATER ON HE DIED (CO PY OF DEATH CERTIFICATE IS ENCLOSED HEREWITH.). SIR, ASSESSEE PROVIDED THE PROPER ADDRESS OF SH. MO HINDER SINGH AND M/S HEMKUNT COLD STORAGE (P) LTD. DURING ASSESSMENT PROCEEDINGS. THE LD. ASSESSING OFFICER H IMSELF ISSUED SUMMONS TO SH. MOHINDER SINGH THROUGH REGIST ERED POST AND THE SAME WAS DULY SERVED UPON HIM, BUT HE WAS UNABLE TO APPEAR BEFORE THE LD. ASSESSING OFFICER B ECAUSE OF HIS HEALTH. SIR, IT IS SUBMITTED THAT ASSESSEE HAS TO PROVE THE SOURCES, WHICH HAS DULY BEEN PROVED WITH HIS BEST EFFORTS AS SESSEE PROVIDED COPY OF AGREEMENT, WHEREIN IT HAS CLEARLY BEEN MENTIONED THAT ASSESSEE RECEIVED CASH AMOUNTING TO RS. 18,00,000/- AND IN SUPPORT OF THIS ASSESSEE PROVIDE D THE ITA NO. 214/ASR./2018 KAMALJIT VIJ 9 BALANCE SHEET OF M/S HEMKUNT COLD STORAGE (P) LTD, WHEREIN ADVANCE HAS DULY BEEN DECLARED BY THE COMPA NY. SIR, ASSESSEE ALSO PROVED IDENTITY OF THE PURCHASER AND PROVIDED ADDRESS OF THE PURCHASER AS THE LD. ASSESS ING OFFICER HIMSELF ISSUED SUMMONS TO THE PURCHASER. TH E LD. ASSESSING OFFICER DOUBTED THE TRANSACTION ONLY BECA USE ASSESSEE FAILED TO PRODUCE ORIGINAL AGREEMENT AND S H. MOHINDER SINGH FOR VERIFICATION OF THE FACTS, WHICH IS NOT JUSTIFIED AS THE ASSESSEE WAS UNABLE TO PRODUCE THE ORIGINAL AGREEMENT WHICH WAS NOT IN THE CUSTODY OF ASSESSEE HIMSELF AND FAILED TO PRODUCE SH. MOHINDER SINGH DUE TO THE VALID REASON AS STATED ABOVE. SIR, IT HAS BEEN DECIDED BY THE NUMBER OF COURTS TH AT MERELY BECAUSE ASSESSEE WAS UNABLE OR FAIL TO PRODUCE THE PURCHASER OF LAND IS NOT A VALID REASON TO MADE ADD ITION IN THE HAND OF ASSESSEE. IN THIS CONNECTION RELIANCE I S BEING PLACED UPON THE FOLLOWING DECISIONS: ITO VS. SH. MAHENDER SINGH ITA NO. 6339/DEL/2013 CIT VS. ASHOK ARORA (2009) 24 DTR 227 ACIT VS. SURINDER NATH SINGLA (1995) 51 TTJ 179 SIR, THE FACTS OF THE CASE CITED ABOVE ARE VERY MUC H SIMILAR TO OUR CASE, IN OUR CASE THE LD. ASSESSING OFFICER MADE ADDITION ON THE BASIS THAT ASSESSEE FAILED TO PRODU CE THE PURCHASER OF LAND. INSPITE OF ISSUE OF SUMMON TO HI M. BUT THE ASSESSEE PRODUCED THE COPY OF AGREEMENT IN HIS CUSTODY AND ALSO PRODUCE THE BALANCE SHEET OF COMPANY, WHER EIN THE ADVANCE PAID TO ASSESSEE HAS BEEN DECLARED. ASS ESSEE FAILED TO PRODUCE THE PURCHASE AS HE WAS NOT IN CON DITION TO MOVE FROM BED AND THEREAFTER HE DIED. IT IS THER EFORE REQUESTED THAT CONSIDERING THE FACTS AND CIRCUMSTAN CES OF THIS CASE AND FOLLOWING THE RATIO OF CASES CITED AB OVE ADDITION MADE BY THE LD. ASSESSING OFFICER MAY KIND LY BE DELETED. REPLY OF ASSESSEE ON ENQUIRY FROM M/S HEMKUNT COLD STORATE PVT. LTD.: ITA NO. 214/ASR./2018 KAMALJIT VIJ 10 IN RESPONSE TO THE REPORT OF THE LD. ASSESSING OFFI CER VIDE REPORT NO. ITO-W-L/MOGA/2015-16/8976, DATED 26.11.2 015, WHEREIN THE LD. ASSESSING OFFICER MADE ENQUIRY FROM M/S HEMKUNT COLD STORAGE PVT. LTD., VPO DALLA, DISTRICT MOGA, WHICH IS REPRODUCED HEREIN BELOW: 1) WHETHER YOUR COMPANY HAS FILED INCOME-TAX RETURN S FOR THE A. Y 2009-10, IF YES HARD COPY OF THE SAME ALONGWITH PAN. 2) YOUR COMPANY HAVE SHOWN TO HAVE MADE ADVANCE OF RS. 30 LACS TO SH. KAMALJIT VIJ PROP. M/S KAVICO INTERNATIONAL, DADA COLONY, SAIPUR ROAD, JALANDHAR AS APPEARING IN THE BALANCE SHEET. YOUR ARE REQUESTED TO EXPLAIN THE SOURCES OF ADVANCE TO SH. KAMALJIT VIJ PROP. KAVICO INTERNATIONAL, DADA COLONY. SAIPUR ROAD /JALANDHAR OF RS. 30 LAKH ALONGWITH DOCUMENTARY EVIDENCE. 3) WHETHER THE ADVANCES HAS BEEN RECEIVED BACK. IF YES, MODE OF PAYAMENT THEREOF ALONGWITH DOCUMENTARY EVIDENCE. 4) PLEASE FURNISH THE ORIGINAL AGREEMENT DATED 02.01.2009 ENTERED INTO BETWEEN YOUR COMPANY AND SH . KAMALJIT VIJ PROP. KAVICO INTERNATIONAL, DADA COLON Y, SAIPUR ROAD, JALANDHAR FOR SALE OF FACTORY LAND OF RS. 30 LAKH. SIR, IN RESPONSE TO ABOVE QUERY C.A OF M/S HEMKUNT COLD STORAGE PVT. LTD. FILED REPLY AS UNDER: 1) THE COMPANY HAS DULY FILED ITS INCOME-TAX RETURN FOR THE A.Y 2009-10. THE COPY OF THE SAME IS ENCLOSED HEREW ITH AS DESIRED BY YOUR GOODSELF. THE COPY OF PAN CARD OF COMPANY IS ALSO ENCLOSED HEREWITH. 2) REGARDING THE ADVANCE OF RS. 30 LACS, IT IS SUBM ITTED THAT THE COMPANY HAS NOT MADE ADVANCE OF RS. 30.00 LACS TO SH. KAMALJIT VIJ. IT IS ONLY AN AMOUNT OF RS. 18 LA CS WHICH HAS BEEN ADVANCED BY THE COMPANY FOR PURCHASE OF ITA NO. 214/ASR./2018 KAMALJIT VIJ 11 PROPERTY AT JALANDHAR. THE SAID AMOUNT WAS PAID IN CASH FROM REGULAR BOOKS OF ACCOUNTS OF THE COMPANY. THE COPY OF BALANCE SHEET OF THE COMPANY IS ENCLOSED HEREWIT H FOR YOUR REFERENCE. IN THE SAID BALANCE SHEET, THE AMOU NT OF RS. 30 LACS AS APPEARING IN LOANS & ADVANCES UNDER THE HEAD ADVANCES FOR PLOTS DULY INCLUDES THE AMOUNT OF R S. 18 LACS AS GIVEN TO SH. KAMALJIT VIJ. 3) IN THE LATER YEARS, SH. KAMALJIT VIJ REQUESTED T HE COMPANY TO CANCEL THE AGREEMENT FOR PURCHASE OF PRO PERTY DUE TO HIS FAMILY DISPUTE AND THEREBY AMOUNT WAS RE CEIVED BACK IN THE YEAR 2010-11 AND THE AGREEMENT WAS FINA LLY CANCEL ON 02.01.2011. SIR, IT IS STATED THAT COMPANY HAS CONFIRMED THE AD VANCE OF RS. 18.00 LACS MADE TO THE KAMALJIT VIJ AND ALSO CO NFIRMED THE FACT THAT IN THE LATER YEARS THE AGREEMENT WAS CANCELLED. AS REGARD ORIGINAL AGREEMENT IT IS STATE D THAT NEITHER ASSESSEE NOR THE COMPANY RETAIN ORIGINAL AGREEMENT. IT IS COMMON PRACTICE THAT WHEN AGREEMEN T IS CANCELLED THEN THE SAID AGREEMENT WAS BEING TORN BY THE RESPECTIVE PARTIES. SIR. FROM THE ENQUIRY OF THE ASSESSING OFFICER MOGA FOLLOWING FACTS ARE CLEAR: A) THE IDENTITY OF THE M/S HEMKUNT COLD STORAGE PVT . LTD. B) CREDITWORTHINESS OF THE M/S HEMKUNT COLD STORAGE PVT. LTD. C) CAPACITY OF M/S HEMKUNT COLD STORAGE PVT. LTD. WHEN ALL THE TREE CONDITIONS ARE FULFILLED EVEN IN THE CASE OF AGREEMENT TO SELL THAT IT IS REQUESTED THAT ADDI TION MADE BY THE LD. ASSESSING OFFICER MAY KINDLY BE DELETED. IT WAS FURTHER SUBMITTED THAT SH. MOHINDER SINGH C OULD NOT BE PRODUCED BEFORE THE AO DUE TO HIS OLD AGE AND THAT THE PHOTOCOPIES OF THE BALANCE SHEET AND THE AGREEMENT WERE FILED B EFORE THE AO. ITA NO. 214/ASR./2018 KAMALJIT VIJ 12 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESEEE SUSTAINED THE ADDITION BY OBSERVING IN PAR A 5.7 OF THE IMPUGNED ORDER AS UNDER: 5.7 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND SUBMISSIONS OF THE APPELLANT. IT IS OBSERVED THAT C ERTAIN DETAILS AS SOUGHT BY THE ASSESSING OFFICER, COULD N OT BE PROVIDED BY M/S HEMKUNT COLD STORAGE AS NOTED ABOVE . THE SAID AGREEMENT TO SELL IS NOT EVIDENCED BY ORIGINAL COPY. THE SAID AGREEMENT ULTIMATELY DID NOT MATURE AND AD VANCE WAS RETURNED BACK. THE FACTORY' LAND SOLD BY THE AS SESSEE WAS ACTUALLY OWNED BY HIS MOTHER. THE ASSESSEE HAS CLAIMED SALE OF FACTORY LAND WHERE AS PHOTOCOPY OF BALANCE SHEET OF M/S HEMKUNT COLD STOR AGE SHOWS ADVANCE FOR PLOTS OF RS.30 LACS. THE ADVANC E OF RS. 18,00,000/- ALLEGEDLY GIVEN TO THE ASSESSEE IS NOT SEPARATELY REFLECTED IN THE BALANCE SHEET OF M/S HE MKUNT COLD STORAGE RATHER IT IS STATED TO BE PART OF ADVA NCE FOR PLOT AMOUNTING TO RS.30.00 LACS MENTIONED IN THE BA LANCE SHEET. IT IS ALSO NOTICED THAT SH. MOHINDER SINGH WHO WAS SIGNATORY TO THE AGREEMENT WAS NOT PRODUCED NOR HE RESPONDED TO THE SUMMONS ISSUED TO HIM. MOST IMPORT ANT FACT IS THAT THOUGH THE ASSESSEE RECEIVED ADVANCE I N LUMP SUM AMOUNT OF RS.9,00,000/- EACH IN CASH, THE ADVAN CE WAS RETURNED BACK IN SMALL CASH AMOUNTS OF RS.5000/-, RS.8000/-. THERE IS NOT A SINGLE COGENT EVIDENCE IN THE FORM OF BANK TRANSACTION, ORIGINAL DOCUMENTS OR EVEN FRO M THE BALANCE SHEET OF M/S HEMKUNT COLD STORAGE, THE ALLE GED RECEIPT OF ADVANCE BY THE ASSESSEE INTO HIS UNDISCL OSED BANK ACCOUNT CANNOT BE ACCEPTED. THE BALANCE SHEET OF M/S HEMKUNT COLD STORAGE PVT. LTD. NO WHERE SPECIFICALL Y MENTION THE FACTS OF ADVANCE FOR PURCHASE OF FACTOR Y LAND RATHER, IT MENTIONS ADVANCE FOR PLOTS THAT TOO FOR RS.30,00,000/- NOT THE SAME AMOUNT AS MENTIONED BY THE ASSESSEE. DETAILS OF ADVANCE OF RS.30 LACS WERE NOT PROVIDED TO THE ASSESSING OFFICER DURING ENQUIRY PROCEEDINGS. THE M/S HEMKUNT COLD STORAGE DID NOT ITA NO. 214/ASR./2018 KAMALJIT VIJ 13 PRODUCE CASH BOOK EXTRACT OF CASH BOOK TO EASTABLIS H ADVANCE AND RECEIPT OF AMOUNT FROM THE ASSESSEE. FURTHER, AS REGARDS CLAIM OF THE ASSESSEE REGARDING CASH DEPOSIT OF RS.2,60,000/- OUT OF PAST SAVING, NO PRO OF OR EXPLANATION IN THIS REGARD WAS FILED DURING THE APP EAL PROCEEDINGS. FURTHER WHEN THE ASSESSEE HAS MAINTAIN ED A NUMBER OF BANK ACCOUNTS,PLEA OF CASH DEPOSITS OUT O F PAST SAVING CANNOT BE ACCEPTED. IN VIEW OF THE FACTS AS ABOVE AND AS NOTED BY THE A SSESSING OFFICER, THE ADDITION MADE BY THE ASSESSING OFFICER IS UPHELD. THE APPEAL OF THE ASSEESSEE IS DISMISSED. 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL F OR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND FURTHER SUBMITTED THAT THE ASSESSEE DEPOSITED CASH AMOUNTING TO RS.27,00,0 00/- IN HIS BANK ACCOUNT I.E. RS.9,00,000/- EACH ON 21.09.2009, 14.02.2009 A ND 25.03.2009. IT WAS REITERATED THAT THE ASSESSEE RECEIVED ADVANCE OF RS .18,00,000/- FROM M/S HEMKUNT COLD STORAGE PVT. LTD. AND HAD ENTERED INTO AN AGREEMENT FOR THE SELL OFF LAND WITH M/S M/S HEMKUNT COLD STORAGE PVT. LTD . FOR RS.30,00,000/- ON 02.01.2009. THE SAID AMOUNT OF RS.18,00,000/- WAS D EPOSITED IN THE BANK ACCOUNT AND THERE WERE ALSO WITHDRAWALS FROM THE BA NK ACCOUNT BUT THE AO ALLOWED THE BENEFIT OF RS.6,40,000/- OUT OF THE WIT HDRAWALS AND MADE THE ADDITION OF RS.20,60,000/-. IT WAS CONTENDED THAT T HE STAMP WAS PURCHASED BY SH. MOHINDER SINGH HIMSELF, SINCE IT WAS THE DUTY O F PURCHASER AND NOT OF THE SELLER OF THE AGREEMENT TO PURCHASE THE STAMP. IT W AS FURTHER STATED THAT THE ASSESSEE COULD NOT PRODUCE SH. MOHINDER SINGH FOR V ERIFICATION, DUE TO HIS OLD AGE AND HE WAS UNABLE TO MOVE FROM BED ON THAT DAYS AND LETTER ON HE DIED. IT WAS CONTENDED THAT THE AO MADE THE ENQUIRIES FROM M /S HEMKUNT COLD STORAGE PVT. LTD., IN RESPONSE THE SAID COMPANY FUR NISHED COPY OF INCOME TAX RETURN ALONGWITH COPY OF PAN CARD AND CONFIRMED THA T AN ADVANCE OF ITA NO. 214/ASR./2018 KAMALJIT VIJ 14 RS.18,00,000/- WAS GIVEN TO THE ASSESSEE FOR PURCHA SE OF PROPERTY. THE SAID AMOUNT WAS SHOWN BY THE COMPANY IN ITS REGULAR BOOK S OF ACCOUNT, UNDER THE HEAD LOANS AND ADVANCES AMOUNTING TO RS.30,00,000/- IN WHICH A SUM OF RS.18,00,000/- GIVEN TO THE ASSESSEE UNDER THE HEAD ADVANCES FOR PLOT WAS REFLECTED. IT WAS FURTHER STATED THAT IN THE LATER YEARS, THE AGREEMENT WAS CANCELLED DUE TO FAMILY DISPUTE AND THE AMOUNT WAS RETURNED TO THE PURCHASER WHO CONFIRMED THE AFORESAID FACTS. IT WAS CONTENDED THAT NEITHER THE ASSESSEE NOR THE PURCHASER COMPANY RETAINED THE ORIGINAL AGR EEMENT SINCE IT WAS CANCELLED AND IT IS A COMMON PRACTICE THAT WHEN AGR EEMENT IS CANCELLED THEN THE SAID AGREEMENT WAS TO BE TORN OFF BY THE RESPEC TIVE PARTY. IT WAS STATED THAT NEITHER THE IDENTITY NOR THE CREDITWORTHINESS OF TH E PURCHASER M/S HEMKUNT COLD STORAGE PVT. LTD. WAS DOUBTED AND THE GENUINEN ESS OF THE TRANSACTION WAS PROVED SINCE IT WAS DISCLOSED BY THE PURCHASER IN I TS BALANCE SHEET, COPY OF WHICH WAS FURNISHED TO THE AO. THEREFORE, THE ADDIT ION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: ITO VS SH. MAHENDER SING IN ITA NO. 6339/DEL/2013 CIT VS ASHOK ARORA (2009) 24 DTR 227 ACIT VS SURINDER NATH SINGLA (1995) 51 TTJ 179 7. IN HIS RIVAL SUBMISSIONS, THE LD. SR. DR STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E ASSESSEE NEITHER PRODUCED THE MANAGING DIRECTOR SH. MOHINDER SINGH OF THE PUR CHASER COMPANY AND NOR FURNISHED THE ORIGINAL COPY OF AGREEMENT. THEREFORE , THE AO RIGHTLY MADE THE ADDITION OF THE AMOUNT DEPOSITED IN THE BANK ACCOUN T SINCE ITS SOURCE WAS NOT PROVED AND THE LD. CIT(A) WAS FULLY JUSTIFIED IN CO NFIRMING THE ADDITION MADE BY THE AO. ITA NO. 214/ASR./2018 KAMALJIT VIJ 15 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE, IT IS NOTICED THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE TRANSACTIONS IN SAVING BANK ACCOUNT OF THE ASSESSEE WITH ICICI BANK WERE AS UNDER: DATE NARRATION WITHDRAWALS DEPOSITS BALANCE 29.01.2009 BY CASH 9,00,000 9,00,000 04.02.2009 CASH PAID 1,50,000 7,50,000 07.02.2009 CASH PAID 2,00,000 5,50,000 14.02.2009 BY CASH 9,00,000 14,50,000 17.02.2009 CASH PAID 1,00,000 13,50,000 24.02.2009 CASH PAID 50,000 13,00,000 02.03.2009 CASH PAID 20,000 12,80,000 04.03.2009 INTEREST 1,604 12,81,604 07.03.2009 CASH PAID 40,000 12,41,604 10.03.2009 CASH PAID 40,000 12,01,604 18.03.2009 CASH PAID 5,000 11,96,604 21.03.2009 CASH PAID 40,000 11,56,604 25.03.2009 BY CASH 9,00,000 20,56,604 9. THE AO ASKED THE ASSESSEE FOR THE SOURCE OF DEPO SITS OF RS.27,00,000/- I.E. RS.9,00,000/- EACH DEPOSITED ON 29.01.2009, 14 .02.2009 AND 25.03.2009. THE AO DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE, HOWEVER, ALLOWED THE BENEFIT OF WITHDRAWALS OF RS.6,40,000/- MADE ON VARIOUS DATE AND SUSTAINED THE ADDITION OF RS.20,60,000/- (RS.27,00,000 RS.6 ,40,000). IN THE INSTANCE CASE, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FO R SALE OF LAND MEASURING 10 MARLAS FOR RS.30,00,000/- AND CLAIMED TO HAVE RECEI VED ADVANCE OF RS.18,00,000/- ON 02.01.2009. THE PURCHASER ALSO CO NFIRMED THIS FACT THAT AN AMOUNT OF RS.18,00,000/- WAS GIVEN TO THE ASSESSEE, THE SAID AMOUNT WAS DULY REFLECTED IN THE BALANCE SHEET FURNISHED TO THE AO. THEREFORE, THE DEPOSITS OF RS.9,00,000/- EACH ON 29.01.2009 AND 14.02.2009 CAN BE SAID TO BE OUT OF THE AMOUNT OF RS.18,00,000/-. THEREAFTER, THE ASSESSEE ALSO DEPOSITED RS.9,00,000/- ON 25.03.2009 BUT BEFORE THAT DEPOSITS THERE WERE W ITHDRAWALS OF RS.6,45,000/- ITA NO. 214/ASR./2018 KAMALJIT VIJ 16 FROM 04.02.2009 TO 21.03.2009. IN THE PRESENT CASE, IT IS NOT BROUGHT ON RECORD TO SUBSTANTIATE THAT THE SAID WITHDRAWALS OF RS.6,4 5,000/- WAS UTILIZED BY THE ASSESSEE ELSEWHERE AND NOT RE-DEPOSITED IN THE BANK ACCOUNT, SO IT CAN BE SAID THAT THE SAID AMOUNT WAS AVAILABLE WITH THE ASSESSE E FOR DEPOSITING THE CASH ON 25.03.2009. HOWEVER, THE ASSESSEE COULD NOT FURNISH ANY PROPER EVIDENCE TO THE SATISFACTION OF THE AO FOR REMAINING AMOUNT OF RS.2 ,55,000/- (RS.9,00,000 RS.6,45,000). IN OUR OPINION, TO THAT EXTENT, ADDIT ION MADE IN THE HANDS OF THE ASSESSEE APPEARS TO BE JUSTIFIED. WE, THEREFORE, CO NSIDERING THE TOTALITY OF THE FACTS, UPHELD THE ADDITION OF RS.2,55,000/-, THE RE MAINING ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 15/01/2019) SD/- SD/- (RAVISH SOOD) (N. K. SAINI) JUDICIAL MEMBER V ICE PRESIDENT DATED: 15/01/2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR