Sh. Noor Mohd., Malerkotla V. ITO, Malerkotla

ITA 221/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80928 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: N K GARG
• Keywords: Capital asset; Income from undisclosed sources
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 221/CHD/2013 ASSESSMENT YEAR: 2009-10 SHRI NOOR MOHD., VS THE INCOME TAX OFFICER, B-III 524, IV(4), QILA REHMATGARH, MALERKOTLA. MALERKOTLA. PAN: ABRPM5937A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.GARG RESPONDENT BY : SHRI J.S.NAGAR DATE OF HEARING : 07.10.2014 DATE OF PRONOUNCEMENT : 10.10.2014 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS)-II LUDHIANA DATED 28.12.2012 FOR A SSESSMENT YEAR 2009-10, CHALLENGING THE ADDITION OF RS. 13,41 ,000/-. 2. THE ASSESSEE CHALLENGED THE ADDITION OF RS. 26,7 5,000/- UNDER SECTION 68 OF THE IT ACT BEFORE LD. CIT(APPEA LS). THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFI CER CALLED FOR A COPY OF THE BANK ACCOUNT OF THE ASSESSEE FROM THE BANK. FROM THIS COPY OF ACCOUNT, THE ASSESSING OFFICER NOTED THAT 2 IN THE SAVING BANK ACCOUNT OF THE ASSESSEE THER E WERE FOLLOWING CASH DEPOSITS : SR. NO. DATE AMOUNT DEPOSITED BY CASH 1. 11.04.2008 RS. 25,000/- 2. 16.04.2008 RS. 3,00,000/- 3. 02.07.2008 RS. 6,00,000/- 4. 03.07.2008 RS. 6,50,000/- 5. 03.07.2008 RS. 5,00,000/- 6. 31.07.2008 RS. 1,00,000/- 7. J35.09.2008 RS. 5,00,000/- TOTAL RS. 26,75,000/- 3. THE ASSESSEE SUBMITTED THAT HE HAD ENTERED INTO AN AGREEMENT WITH SH. BHUPINDER SINGH ON 18.12.2007 FO R SALE OF LAND AGAINST WHICH ASSESSEE HAD RECEIVED RS. 4,30,0 00/- BY CHEQUE AND RS. 15 LACS BY CASH. THE ASSESSEE SUBMIT TED THAT CASH DEPOSITS IN THE BANK ACCOUNT WERE MADE OUT OF THE CASH RECEIVED FROM SH. BHUPINDER SINGH. THE ASSESSING OF FICER CALLED SH. BHUPINDER SINGH AND RECORDED HIS STATEME NT. THE DETAILS OF STATEMENT RECORDED HAVE BEEN REPRODUCED ON PAGE 3&4 OF THE ASSESSMENT ORDER. FROM THE STATEMENT OF SHRI BHUPINDER SINGH, ASSESSING OFFICER ARRIVED AT THE F OLLOWING CONCLUSIONS:- 1. SH. BHUPINDER SINGH DID NOT KNOW MUCH ABOUT THE AGR EEMENT SIGNED WITH THE APPELLANT. 2. BANK STATEMENT OF SH.BHUPINDER SINGH REVEALED THA T THERE WAS NO WITHDRAWAL IN CASH DURING THE MONTH OF NOVEMBER OR DECEMBER, 2007 FROM WHICH THE PAYMENT OF RS. 15 L ACS WAS CLAIMED TO HAVE BEEN MADE. 3. SH. BHUPINDER SINGH STATED THAT HE HAD NOT EXECUTED THE PURCHASE DEED AS HE WANTED TO EXECUTE THE SAME IN T HE NAME OF 3 HIS SONS. HOWEVER, AS PER FARD OF THIS PROPERTY CALLE D FROM TEHSIL OFFICE OF MALERKOTLA PROPERTY HAD BEEN SOLD TO THE F OLLOWING PERSONS:- 4. SH. BHUPINDER SINGH STATED THAT HE HAD SOLD THESE 5 PROPER TIES FOR ABOUT RS. 5 LACS WHEREAS THESE HAD ACTUALLY BEE N SOLD FOR RS. 14,30,000/-. 5. AS PER THE SALE DEED ALL THESE 5 PROPERTIES HAD BEEN SOLD BY THE APPELLANT AND NOT BY SH. BHUPINDER SINGH. 4. FROM THESE FACTS THE ASSESSING OFFICER CONCLUDED THAT SUBMITTING OF THE AGREEMENT DATED 18.12.2007 WAS AN AFTERTHOUGHT. THE ASSESSING OFFICER HELD THAT ALL THE DEPOSITS AMOUNTING TO RS. 26,75,000/- IN THE BANK ACCOUNT OF THE ASSESSEE WERE INCOME OF THE ASSESSEE AND ADDED THE SAME UNDER SECTION 68 OF THE IT ACT. 5. THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE LD . CIT(APPEALS) WHICH IS INCORPORATED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT HE IS A R ETIRED GOVERNMENT EMPLOYEE AND HAS INCOME FROM PENSION, BA NK INTEREST AND AGRICULTURE. THE ASSESSEE HAS SOURCE OF DEPOSITS INTQAL NO. & DATE SHARE NAME OF THE SELLER NAME & OF THE PURCHASER AMOUNT 4074/18.07.2008 4/79 NOOR MOHD, TULSI DEVI W/O RAJU SHARMA 2,20,000/- 4075/18.07.2008 4/79 -DO- SANKUNTLA W/O RAMSHARAN 2,20,000/- 4120/13.11..2008 4/79 -DO- SATYA WANTI W/O SATPAL 2,40,000/- 4129/22.1 1.2008 8/79 -DO- MANPREET SINGH S/O SWAM SINGH 4,80,000/- 4400/26.03.2010 4/79 -DO- ABDUL SAKOOR S/O MANJOOR 2,70,000/- TOTAL 14,30,000/- 4 OUT OF SALE PROCEEDS OF AGRICULTURE LAND AND OUT OF WITHDRAWALS FROM THE BANK ITSELF. THE COPY OF THE AGREEMENT WA S PRODUCED. STATEMENT OF SHRI BHUPINDER SINGH WAS RE CORDED. THEREFORE, THERE IS NO BASIS TO REJECT THE EXPLANAT ION OF THE ASSESSEE AND ASSESSEE HAS BEEN ABLE TO ESTABLISH TH E SOURCE OF THE BANK DEPOSITS THROUGH KNOWN SOURCES. THE ASSESS EE ALSO SUBMITTED COPY OF HIS BANK ACCOUNT WITH BHARAT OVER SEAS BANK LTD. AND INDIAN OVERSEAS BANK BEFORE LD. CIT(A PPEALS). 6. THE LD. CIT(APPEALS) CONSIDERING THE SUBMISSIO N OF THE ASSESSEE AND BANK DEPOSITS AND WITHDRAWALS IN HIS B ANK ACCOUNT, SUSTAINED ADDITION OF RS. 13,41,000/- ON A CCOUNT OF PEAK CASH DEPOSIT AND DELETED THE REMAINING ADDITIO N. 7. THE APPEAL OF THE ASSESSEE WAS THUS, PARTLY A LLOWED. THE FINDINGS OF THE LD. CIT(APPEALS) IN PARA 4.3 ARE RE PRODUCED AS UNDER : 4.3 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S S UBMISSIONS. THE APPELLANT HAS CLAIMED THAT THE CASH DEPOSITS WE RE MADE OUT OF CASH RECEIVED FROM SH. BHUPINDER SINGH AGAINST A GREEMENT TO SELL DATED 18.12.2007 . THE AO HAS CONSIDERED THIS ISSUE IN DETAIL AND HELD THAT CLAIM OF AGREEMENT TO SELL WIT H SH. BHUPINDER SINGH WAS AN AFTERTHOUGHT. THE AO HAS GIV EN DETAILED REASONS FOR COMING TO THIS CONCLUSION. THE APPELLANT HAS NOT BEEN ABLE TO CONTROVERT THESE FINDINGS OF THE A O. DURING THE COURSE OF APPELLATE PROCEE DINGS FOLLOWING ADDITIONAL FACTS EMERGED:- (I) LAND CLAIMED TO HAVE BEEN TRANSFERRED TO SH. BHUPIN DER SINGH THROUGH AGREEMENT TO SELL DATED 18.12.2007 WA S LOCATED WITHIN 8 KMS. OF THE MUNICIPAL LIMITS. IT WAS THUS A CAPITAL ASSETS AND PROFITS ARRIVING TO THE APPELLANT FROM T RANSFER OF THIS PROPERTY WAS CHARGEABLE TO TAX UNDER THE HEAD CAPIT AL GAINS. (II) THE APPELLANT HAD NOT SHOWED ANY INCOME UNDER THE HEAD CAPITAL GAINS ON ACCOUNT OF TRANSFER OF THIS L AND TILL DATE. (III) THE SALE DEEDS FOR TRANSFER OF BALANCE LAND AS REFE RRED TO IN AGREEMENT TO SELL DATED 18.12.2007 HAD NOT YET B EEN 5 EXECUTED TILL DATE EVEN AFTER MORE THAN 4 YEARS OF SIGNING OF AGREEMENT TO SELL. ALL THE AFORESAID FACTS CLEARLY ESTABLISH THAT THE SO CALLED AGREEMENT TO SELL WITH SHRI. BHUPINDER SINGH WAS SH AM ARRANGEMENT TO EXPLAIN THE CASH DEPOSITS IN THE BAN K ACCOUNTS. THE AO WAS THEREFORE FULLY JUSTIFIED IN REJECTING T HE CLAIM OF APPELLANT ON THIS ISSUE. THE AO HAS ADDED THE WHOLE AMOUNT OF CASH DEPOSITS OF RS. 26,75,OOO/- TO THE TOTAL INCOME OF THE APPELLANT. T HE APPELLANT HAS CONTENDED THAT THERE WERE CASH WITHDRAWALS AND CASH DEPOSITS IN THE BANK ACCOUNTS OF THE APPELLANT AND THE ADDITION SHOULD NOT EXCEED THE PEAK DEPOSIT. IN THIS REGARD, AO SUBMITTED COPY OF THE 2 BANK ACCOUNTS MAINTAINED BY THE APPELLANT. THESE COPIES OF BANK ACCOUNTS ARE ENCLOS ED AS ANNEXURE 1&2 OF THIS ORDER. THE APPELLANT ALSO COMP UTED THE PEAK DEPOSIT WHICH WORKED OUT TO RS. 13,41,OOO/ - AS UNDER : DATE 01.01.2008 BANK BOB OPENING BAL 0 CASH DEPOSIT 0 0 CASH WITHDRA WAL 100000 BALANCE 100000 14.01.2008 BOB 100000 0 200000 300000 18.01.2008 BOB 300000 0 129000 429000 11.04.2008 1OB 429000 25000 0 404000 16.04.2008 IOB 404000 300000 0 104000 16.04.2008 IOB 104000 0 0 104000 25.04.2008 IOB 104000 0 200000 304000 29.04.2008 IOB 304000 0 0 304000 08.05.2008 IOB 304000 0 0 304000 13.05.2008 IOB 304000 0 25000 329000 10.06.2008 IOB 3290000 0 50000 379000 23.06.2008 IOB 379000 0 3OOOO 409000 02.07.2008 IOB 409000 0 409000 02.07.2008 IOB 409000 600000 0 -191000 03.07.2008 IOB -191000 650000 0 -841000 03.07.2008 IOB -841000 500000 0 -1341000 08.07.2008 IOB -1341000 0 25000 -1316000 14.07.2008 IOB -1316000 0 50000 -126000 19.07.2008 IOB -1266000 0 500000 -766000 31.07.2008 IOB -766000 100000 0 -866000 21.08.2008 IOB -866000 0 -86000 02.09.2008 IOB -866000 0 35000 -831000 05.09.2008 IOB -831000 500000 0 -1331000 6 COPY OF THIS COMPUTATION SUBMITTED BY THE APPELLANT IS ENCLOSED AS ANNEXURE -3 OF THIS ORDER. I HAVE VERIF IED THE VARIOUS CASH DEPOSITS AND CASH WITHDRAWALS SHOWN IN THE COMPUTATION OF PEAK CASH DEPOSITS AGAINST THE ENTRI ES SHOWN IN THE BANK ACCOUNT. THE COMPUTATION DONE BY THE APPELLANT IS FACTUALLY CORRECT. THE APPELLANT CONTE NDED DURING THE COURSE OF APPELLATE PROCEEDINGS THAT AO SHOULD HAVE GIVEN CREDIT FOR CASH WITHDRAWALS MADE FROM TH E BANK ACCOUNT WHILE MAKING THE ADDITION, THE APPELLA NT CONTENDED THAT THE COPY OF BANK ACCOUNT WAS AVAILAB LE WITH THE AO AND IT WAS WELL WITHIN THE KNOWLEDGE OF ASSESSING OFFICER THAT THERE WERE SUBSTANTIAL CASH WITHDRAWALS FROM THE BANK ACCOUNT. I AGREE WITH TH IS CONTENTION OF THE APPELLANT. PART OF THE CASH DEPO SITS ARE EXPLAINED FROM CASH WITHDRAWALS MADE FROM THE BANK ACCOUNT. IN THESE CIRCUMSTANCES ONLY THE PEAK CASH DEPOSITS CAN BE HELD AS UNACCOUNTED INCOME OF THE APPELLANT. IN THE INSTANT CASE THE PEAK CASH DEPOS ITS WORKS OUT TO RS. 13,41,000/-. THE ADDITION MADE BY THE ASSESSING OFFICER IS ACCORDINGLY REDUCED TO RS. 13,41,000/-. THIS GROUND OF APPEAL IS PARTLY ALLOW ED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(APPEALS). HOWEV ER, HE WAS NOT ABLE TO CONTRADICT THE FINDING OF FACT RECO RDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ASS ESSING OFFICER, SPECIFICALLY RECORDED THAT SHRI BHUPINDER SINGH DID NOT KNOW MUCH ABOUT THE AGREEMENT SIGNED WITH THE A SSESSEE AND THE BANK STATEMENT OF SHRI BHUPINDER SINGH REVE ALED THAT THERE WERE NO WITHDRAWALS IN CASH DURING THE MONTH OF NOVEMBER OR DECEMBER, 2007 FROM WHICH THE PAYMENT O F RS. 15 LACS WAS CLAIMED TO HAVE BEEN MADE IN CASH. FUR THER, SHRI BUPINDER SINGH DID NOT EXECUTE ANY SALE DEED AS CLA IMED BY THE ASSESSEE. IN THIS CASE, THE RELEVANT AGREEMENT IN QUESTION IS DATED 18.12.2007 AND THE ASSESSEE CLAIMED THAT T HE AMOUNT IN QUESTION WAS PAID IN CASH BY SHRI BHUPINDER SING H. WHEN 7 SHRI BHUPINDER SINGHS BANK ACCOUNT WAS PRODUCED, I T DID NOT REVEAL ANY CASH WITHDRAWAL MADE BY HIM FROM HIS BAN K ACCOUNT IN THE MONTH OF NOVEMBER OR DECEMBER,2007. THEREFORE, CLAIM OF THE ASSESSEE WAS NOT PROVED THA T SHRI BHUPINDER SINGH WAS HAVING SUFFICIENT SOURCE TO MAK E CASH PAYMENT TO THE ASSESSEE OF RS. 15 LACS ON THE DATE OF THE AGREEMENT I.E. 18.12.2007. FURTHER, NO SALE DEED W AS EXECUTED IN PURSUANCE OF THE AGREEMENT WITH THE ASS ESSEE AND FURTHER SALE DEEDS HAVE BEEN EXECUTED BY THE ASSES SEE IN THE NAMES OF DIFFERENT PERSONS AFTER THE PAYMENT ON 18. 12.2007. NO CAPITAL GAIN ON TRANSACTION WITH SHRI BHUPINDER SINGH HAS BEEN PAID OR DISCLOSED TO REVENUE DEPTT. THE STATE MENT OF SHRI BHUPINDER SINGH THUS, WAS NOT WORTH RELIANCE. WE HAVE EXAMINED THE DATES OF DEPOSITS OF CASH IN THE BANK ACCOUNT OF THE ASSESSEE WHICH ALSO FALSIFY THE CLAIM OF ASSESS EE BECAUSE AFTER THE ALLEGED PAYMENT OF RS. 15 LACS CASH ON 18 .12.2007 BY SHRI BHUPINDER SINGH TO THE ASSESSEE, NO PRUDENT MA N WOULD KEEP THE HUGE CASH WITH HIM FOR A VERY LONGER PERIO D AND WILL MAKE A VERY SMALL DEPOSIT OF RS. 25,000/- IN HIS AC COUNT ON 11.04.2008. THE CLAIM OF THE ASSESSEE IS, THUS, HI GHLY UNNATURAL AND CANNOT BE ACCEPTED IN NORMAL COURSE O F BUSINESS. THE EXPLANATION OF THE ASSESSEE OF MAKI NG WITHDRAWALS IN CASH OF RS. 1 LAC ON 01.01.2008, RS. 2,00,000/- ON 14.01.2008 AND RS. 1,29,000/- ON 18.0 1.2008 WILL ALSO FALSIFY THE CLAIM OF ASSESSEE BECAUSE IF A PERSON IS HAVING AVAILABILITY OF RS. 15 LACS CASH WITH HIM AS PER AGREEMENT DATED 18.12.2007, THERE WAS NO NEED FOR H IM TO MAKE FURTHER WITHDRAWAL OF CASH IN JANUARY,2008 OF 8 RS.4,29,000/-. THEREFORE, THE CLAIM OF WITHDRAWAL OF CASH OR RE-DEPOSITING IS ALSO UNNATURAL AND CANNOT BE ACCEP TED. THE PREPONDERANCE OF PROBABILITY AND THE SURROUNDING CIRCUMSTANCES OF THE CASE, CLEARLY PROVED THAT ASSE SSEE FAILED TO PROVE THE SOURCE OF CASH DEPOSIT IN HIS BANK ACC OUNT ON DIFFERENT DATES. WE MAY ALSO NOTE HERE THAT THOUGH THE LD. CIT(APPEALS) HAS DELETED PART ADDITION ON ACCOUNT O F PEAK CASH DEPOSIT, BUT SUCH A THEORY OF PEAK CASH DEPOSI T WAS NOT APPLICABLE IN THIS CASE AND SINCE THE DEPARTMENT IS NOT IN APPEAL AGAINST SUCH FINDING, THEREFORE, WE DO NOT P ROPOSE TO GIVE FURTHER FINDING ON THE SAME. CONSIDERING THE T OTALITY OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY JUS TIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BEL OW IN SUSTAINING THE ADDITION OF RS. 13,41,000/- BECAUSE ASSESSEE FAILED TO PROVE SOURCE OF CASH DEPOSIT IN HIS BANK ACCOUNT TO THE SATISFACTION OF AUTHORITIES BELOW. 9. IN THE RESULT, APPEAL OF THE ASSESSEE FAILS AN D IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH OCTOBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH