Sh. Prem Parksah Gupta Karta Prem Parkash Gupta & Sons, Sirsa V. ITO, Sirsa

ITA 221/CHANDI/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51595 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Unexplained investment; Deemed to accrue or arise in india
• Section: 234B; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL:B BENCH: CHA NDIGARH BEFORE SHRI H.L.KARWA, VP&D K SRIVASTAVA, AM ITA NO. 221/CHD/2010 ASSESSMENT YEAR: 2006-07 SHRI PREM PARKASH GUPTA, V ITO, WARD-2,JIND KARTA PREM PARKASH GUPTA & SONS CAMP AT AAYAKAR B HAWAN, C/O M/S SHIVDEI ENTERPRISES, SIRSA. HISSAR ROAD, SIRSA. PAN: AADHP-5217K APPELLANT BY: SHRI M.R.SHARMA RESPONDENT BY: SMT.JAISHREE SHARMA DATE OF HEARING : 29.11.2011 DATE OF PRONOUNCEMENT : 30.11.2011 ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 16.12.200 9 BY WHICH HE HAS CONFIRMED ADDITION OF RS.5,15,000/- MADE BY THE AO U/S 69 OF THE INCOME-TAX ACT, 1961. 2. THE IMPUGNED ADDITION HAS BEEN MADE BY THE AO WI TH THE FOLLOWING OBSERVATIONS : ON GOING THROUGH THE ABOVE SUBMISSIONS, IT MAY BE NOTED THAT THE ASSESSEE HAS CLAIMED THE SOURCE TO THE EXTENT O F RS.50,000/- ON 19.7.2005 AND RS.5,00,000/- ON 29.7.2005 BY DEBI TING THESE AMOUNTS IN THE BOOKS OF PREM PARKASH GUPTA & SONS, HUF. THE ASSESSEE WAS REQUIRED TO PRODUCE THE ACCOUNT BOOKS FOR VERIFYING THE SOURCE OF ABOVE AMOUNTS SHOWN AS ADVA NCE AGAINST THE HOUSE. THE ASSESSEE SUBMITTED COPY OF SO-CALLED CASH BOOK WHICH REVEALS OPENING CASH-IN-HAND AT RS.7,97,400/- . WHEN REQUIRED TO EXPLAIN AS TO WHAT WAS THE SOURCE OF AB OVE OPENING CASH-IN-HAND IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAME REPRESENTS CLOSING BALANCE OF THE LAST YEAR. THE AS SESSEE ALSO SUBMITTED THE COPIES OF SO-CALLED BALANCE SHEETS FO R THE PERIOD ENDING 31.3.2005 AND 31.3.2006. IN THIS CONNECTION , IT MAY BE STATED THAT THE MAINTENANCE OF SEPARATE ACCOUNT BOO KS OF M/S PREM PARKASH GUPTA & SONS, HUF HAS NEVER BEEN BROUG HT ON RECORD BY THE ASSESSEE IN THE PAST OR EVEN NO COPY OF SO-CALLED BALANCE SHEETS HAVE BEEN FILED BY THE ASSESSEE ALON GWITH THE RETURNS FILED FOR THESE ASSESSMENT YEARS. THEREFORE , THE SO- CALLED BALANCE SHEETS CAN BE SAID TO BE NOTHING BUT AN AFTER ITA 221/CHD/2010 SHRI PREM PARKASH GUPTA,SIRSA 2 THOUGHT TO EXPLAIN THE SOURCE OF INVESTMENT IN THE PURCHASE OF HOUSE TO THE EXTENT OF RS.5,50,000/-. HAD THE ASSE SSEE MAINTAINED REGULAR BOOKS OF ACCOUNT, HE WOULD HAVE FILED COPY OF ACCOUNT, BALANCE SHEET ETC. ALONGWITH RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2005-06 AND 2006-07. THIS FACT FURTHER GOES TO PROVE THAT THE SO-CALLED ACCOUNT BOOKS WERE NEVER IN EXISTURE AND HAVE BEEN INTRODUCED JUST TO EXPLAIN T HE UNEXPLAINED INVESTMENT REFERRED TO ABOVE. IN THIS V IEW OF THE MATTER, THE INVESTMENT TO THE EXTENT OF RS.5,50,000 /- IS TREATED AS UNEXPLAINED INVESTMENT WITHIN THE MEANING OF SEC TION 69 OF THE INCOME-TAX ACT AND ADDED TO THE INCOME RETURNED AS DEEMED INCOME. I AM SATISFIED THAT THE ASSESSEE HAS FURNIS HED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF R S.5,50,000/- FOR WHICH PENALTY PROCEEDINGS U/S 271(1)(C) ARE BEI NG INITIATED SEPARATELY. WITH THE ABOVE OBSERVATION, INCOME OF THE ASSESSEE IS COMPUTED AS UNDER : INCOME AS PER RETURN 4,74,110/- ADD : ADDITION AS DISCUSSED ABOVE 5,50,000/- ---------------- 10,24,110/- ---------------- CHARGE INTEREST U/S 234A & 234B OF THE IT ACT PENALTY PROCEEDINGS U/S 271(1)(C) HAVE BEEN INITIAT ED SEPARATELY. 3. ON APPEAL, LD. CIT(A) HAS CONFIRMED THE IMPUGNED ADDITION WITH THE FOLLOWING OBSERVATIONS : THE ISSUE INVOLVED IN THIS APPEAL IS THE SOURCE OF INVESTMENT OF RS.5,50,000/- MADE BY THE APPELLANT IN THE PURCH ASE OF A HOUSE. THE ISSUE HAS BEEN DISCUSSED IN DETAIL BY TH E AO IN THE ASSESSMENT ORDER RUNNING INTO AS MANY AS FOUR PAGES . THE APPELLANT HAS NOT BEEN ABLE TO PRODUCE THE SOURCE O F THE INVESTMENT MADE; IT HAS MERELY STATED THAT IT WAS D EBTED IN THE BOOKS OF M/S PREM PARKASH GUPTA & SONS HUF-RS.50,00 0/- ON 19.7.2005 AND RS.5,00,000/- ON 29.7.2005 9HUF) FROM WHERE THE AMOUNTS CAME IN THE HANDS OF THE HUF HAS NOT BE EN EXPLAINED. IT HAS ALSO BEEN NOTED IN THE ASSESSMEN T ORDER THAT THE RELEVANT DOCUMENTS WERE NOT PRODUCED WITH THE R ETURNS FILED BY THE APPELLANT (PAGE 4 OF THE ASSESSMENT OR DER) AND ITA 221/CHD/2010 SHRI PREM PARKASH GUPTA,SIRSA 3 THAT THE APPELLANT HAS NOT BEEN ABLE TO SHOW OPENIN G CASH IN HAND AT RS.7,97,400/-. DURING APPEAL PROCEEDINGS THE APPELLANT HAS MADE T HE SAME SUBMISSIONS WHICH IT HAD MADE BEFORE THE AO AN D WHICH HAD NOT BEEN FOUND ACCEPTABLE BY THE AO-WITHOUT ADD RESSING THE MAIN ISSUE OF SOURCE OF CASH OF RS.7,97,400/- A ND WITHOUT EXPLAINING WHY THE RELEVANT DOCUMENTS WERE NOT SUBM ITTED WITH THE RETURN OF INCOME; THE AR OF THE APPELLANT HAS BEEN PRESSING TO ACCEPT THE GENUINENESS TO THE SOURCE OF RS.5,50,000/-. PROCEEDINGS UNDER THE IT ACT ARE GOV ERNED BY THE PREPONDERANCE OF PROBABILITY; WHEN THE APPELLAN T HAS NOT BEEN ABLE TO SATISFACTORILY PROVE THE SOURCE OF INV ESTMENT; THERE IS NO ALTERNATIVE OTHER THAN REACHING THE CON CLUSION THAT THE AMOUNT HAS BEEN INVESTED OUT OF ITS UNDISCLOSED INCOME. THEREFORE, THE ADDITION IS CONFIRMED AND THE APPEAL IS DISMISSED. 4. WE HAVE HEARD BOTH THE PARTIES. BOTH DEPARTMENT AL AUTHORITIES HAVE REJECTED THE SUBMISSION OF THE ASSESSEE THAT H E HAD OPENING CASH IN HAND AT RS.7,97,400/- ON THE GROUND THAT THE OPE NING CASH IN HAND OUGHT TO HAVE BEEN REFLECTED AS CLOSING CASH IN HAN D IN THE IMMEDIATELY PRECEDING YEAR. ACCORDING TO THEM, THE COPIES OF A CCOUNTS OF THE PRECEDING YEAR WERE NOT FILED BY THE ASSESSEE ALON GWITH THE RETURN OF INCOME AND HENCE THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAD CLOSING CASH IN HAND AT RS.7,97,400/- IN THE IMMEDI ATELY PRECEDING YEAR. IN OTHER WORDS, BOTH THE DEPARTMENTAL AUTHORITIES H AVE REJECTED THE EXPLANATION OF THE ASSESSEE THAT THE ASSESSEE HAD O PENING CASH IN HAND AT RS.7,97,400/- IN THE YEAR UNDER APPEAL SO AS TO MEET THE INVESTMENT. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT HE IS IN A POSITION TO SHOW THAT THE ASSESSEE HAD RELEVANT FUNDS AVAILABLE WITH HIM EVEN WITHOUT THE BOOKS OF ACCOUNT. ACCORDING TO HIM, TH E ASSESSEE HAD SOLD SOME PROPERTIES IN THE IMMEDIATELY PRECEDING YEAR W HICH WERE INVESTED AT THAT TIME AND THEREAFTER REALIZED IN THE YEAR UN DER APPEAL FOR MEETING THE INVESTMENTS. ACCORDING TO HIM, THE ASSESSEE AL SO MAINTAINS BANK ACCOUNT. HE PRAYED THAT THE MATTER SHOULD BE RESTO RED TO THE FILE OF THE AO FOR PROPER EXAMINATION OF THE CASE. 6. BOTH THE AUTHORITIES HAVE TREATED A SUM OF RS.5. 50 LAKHS BEING INVESTMENTS MADE BY THE ASSESSEE AS UNEXPLAINED WIT HOUT COMMENTING UPON THE AVAILABILITY OF FUNDS. IT IS OPEN TO THE ASSESSEE TO PROVE THE AVAILABILITY OF FUNDS EVEN WITHOUT THE BOOKS OF ACC OUNT. IN THIS VIEW OF THE MATTER, THE ORDERS PASSED BY THE AO AND CIT(A) ARE SET ASIDE AND ITA 221/CHD/2010 SHRI PREM PARKASH GUPTA,SIRSA 4 THE MATTER IS RESTORED TO THE FILE OF THE AO FOR A FRESH DECISION IN CONFORMITY WITH LAW AFTER GIVING REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE. IT IS CLARIFIED THAT THE BURDEN TO ESTAB LISH THAT THE REQUISITE FUNDS WERE AVAILABLE AT THE TIME OF MAKING THE INVE STMENTS WOULD BE SQUARELY ON THE ASSESSEE. 7. APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH NOV.,2011. SD/- SD/- (H.L.KARWA) (D K SRIVASTAVA) VICE PRESIDENT ACCOUNTANT MEMBER DATED:30 TH NOV.,2011 POONAM COPY TO: 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH