Mangat Singh S/o Sh. Karam Singh, Mohali V. ITO, W-6(4), Mohali

ITA 246/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7222 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 68; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B CHANDIGARH !, ' # $ , $ % & ' ( ) , *+ # BEFORE: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NO. 246/CHD/2018 / ASSESSMENT YEAR : 2011-12 SHRI MANGAT SINGH, S/O SHRI KARAM SINGH, VILLAGE-FEROZPUR, MULLAPUR GARIBDASS,, TEHSIL-KHARAR,DISTT.MOHALI. VS THE ITO, WARD 6(4), MOHALI. ./ PAN NO: DHIPS2788K / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI TEJ MOHAN SINGH # ! ' / REVENUE BY : SHRI PARESH JOHRI, CIT-DR $ % ! &/ DATE OF HEARING : 03.12.2018 '()* ! &/ D ATE OF PRONOUNCEMENT : 15.01.2019 *,/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 20.10.2016 OF CIT(A)-2 CH ANDIGARH PERTAINING TO 2011-12 ASSESSMENT YEAR ON VARIOUS GROUN DS WHEREIN THE ADDITION MADE BY THE AO ON ACCOUNT OF DEPOSITS IN THE B ANK ACCOUNT STATED TO BE SOURCED FROM SALE OF AGRICULTURAL LAND STOOD CONFIRMED IN APPEAL. 2. THE LD. AR REFERRING TO THE RECORD SUBMITTED THAT THE ASSESSEE NEEDS TO FILE A PAPER BOOK CONSISTING OF NECESSARY EVIDENCES ON RECORD WHICH NEEDS TO BE TAKEN INTO CONSIDERATION FOR DETERMINING THE ISSUES. THE EVIDENCES, IT WAS SUBMITTED, HAVE NOT BEEN CORRECTLY APP RECIATED. HOWEVER, CONSIDERING THE ORDERS AVAILABLE ON RECORD, IT WAS NOTICED THAT THE EVIDENCES ARE NOT A SUBJECT MATTER OF DISCUSSION AS ONLY CONCLUSIO NS ON SOME EVIDENCES ARE DRAWN. ACCORDINGLY, IT WAS DEEMED APPROP RIATE TO DIRECT THE PARTIES TO ADDRESS THE FACTS ON RECORD AND A PASS OVE R WAS GIVEN POINTING OUT THAT IF NECESSARY, TIME WOULD BE GRANTED. 3. IN THE PASS OVER PROCEEDINGS, THE LD. AR INVITING ATTEN TION TO THE ASSESSMENT ORDER PARA 2 SUBMITTED THAT THE ASSESSEE HAS BEEN CONSIDERED BY THE AO TO BE PURELY AGRICULTURIST AND IN THE YEAR UNDER CONSIDE RATION HAS ITA-246/CHD/2018 A.Y.2011-12 PAGE 2 OF 5 DECLARED AGRICULTURE INCOME OF RS. 78,720/-. IT WAS SUBMITT ED THAT IN HIS BANK ACCOUNTS MAINTAINED WITH ORIENTAL BANK OF COMMERCE , MULLANPUR, DEPOSITS OF RS. 3,23,50,500/- ODD WERE FOUND. ON QUERY, IT WA S SUBMITTED, THE ASSESSEE HAD EXPLAINED THAT THESE WERE DEPOSITS MA DE FROM THE SALE PROCEEDS OF AGRICULTURAL LAND MEASURING 30 KANAL AND 12 MA RLAS IN VILLAGE FEROZEPUR BANGAR, DISTT. MOHALI AND THE TOTAL AMOUNT OF W HICH WAS RS. 3,71,31,250/-. THE SAID LAND, IT WAS EXPLAINED HAD BEEN SOLD TO THE FOLLOWING PERSONS : 1. SHRI DILRAJ SINGH KARTA (HUF) S/O SHRI HARDEEP SINGH # NO. 1638, SECTION 39-B, CHANDIGARH 2. SHRI SUKHDEEP SINGH KARTA (HUF) S/O SHRI HARDEV SINGH # NO. 576, SECTOR 11-B, CHANDIGARH 3. SHRI SATPAL SINGH S/O SHRI JASPAL SINGH # NO. 157, WEST AVENUE, AAMRITSAR 3.1 OUT OF THE SAID AMOUNT, IT WAS STATED THAT RS. 47,81,00 0/- HAD BEEN RECEIVED THROUGH CHEQUES AND RS. 3,23,00,000/- HAD BEEN RECEIVED IN CASH ON 28.01.2011 I.E. ON THE DATE OF THE EXECUTED SALE DEED AND THE CHEQUE AMOUNTS WERE DEPOSITED ON THE NEXT DATE. THE ASSESSE E, IT WAS SUBMITTED, WAS REQUIRED TO SUBSTANTIATE THE CLAIM THAT THE CASH DE POSIT WAS FROM THE VERY SAME AGRICULTURAL LAND SOLD. 3.2 IT WAS SUBMITTED THAT THE REPLY OF THE ASSESSEE WA S CONSIDERED TO BE NOT SUFFICIENT IN VIEW OF THE FACT THAT SUMMONS ISSUED TO TH E PURCHASERS RETURNED BACK WITH THE COMMENT LEFT. RETURNED TO SENDER AND NSP. 4. THE CIT-DR RELYING UPON THE ORDERS, ON THE OTHER H AND, SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CLAIM. T HE AFFIDAVIT FILED BY THE ASSESSEE OF SMT. HARJEET KAUR AS EYE-WITNESS TO TH E TRANSACTION HAS BEEN HELD TO BE NOT RELEVANT AS SHE WAS SISTER OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE GAVE THE FOLLOWING REPLY ON 12.01.2015 WHICH WAS ALSO FILED IN AN AFFIDAVIT DATED 08.01.2015, THE CONTENTS OF WHICH ARE EXTRACTED IN PARA 3 OF THE ASSESSMENT ORDER AND READ AS UNDER : '1. THAT I AM AN AGRICULTURE LAND & DERIVING MY L IVELIHOOD THROUGH AGRICULTURE ACTIVITIES ONLY. 2. THAT I HAVE NO OTHER SOURCE OF INCOME. 3. THAT DURING THE FINANCIAL YEAR 2010-11, I HAVE S OLD MY AGRICULTURAL LAND SITUATED AT VILLAGE FEROZPUR BANGAR MEASURING 30 KANALS & 12 MARIAS TO SH. DILRAJ SINGH KARTA(HUF) S/O SH. HARDEEP SINGH, R/O H.NO. 1638 SECTOR 39B CHANDIGARH, SUKHDEEP SINGH KARTA(HUF) S/O SH. HARDE V SINGH R/O H.NO. 576 SECTOR 11B CHANDIGARH AND SH. SATPAL SINGH S/O SH. JASPAL SINGH R/O H.NO. 157, WEST ITA-246/CHD/2018 A.Y.2011-12 PAGE 3 OF 5 AVENUE AMRITSAR(PB) FOR RS. 3,71,31,250/- RS. THREE CRORE SEVENTY ONE LAC THIRTY ONE THOUSAND TWO HUNDRED AND FIFTY ONLY. 4. THAT THE SALE DEED OF THE SAID LAND WAS EXECUTED FO R RS.47,81,250/- ON/Y BY THE PURCHASER TO AVOID THE STAMP DUTY AND THE BALANCE A MOUNT WAS GIVEN IN CASH. 5. THAT OUT OF THE ABOVE SAID AMOUNT I RECEIVED RS. 3,23,50,000/-(RS. THREE CRORE TWENTY THREE LACS & FIFTY THOUSAND IN CASH & RS.47,81,250/- VIA BANKERS CHEQUES ON DATED 28-01-2011 I DEPOSITED THE SE AMOUNT IN ORIENTAL BANK OF COMMERCE ACCOUNT. 6. THAT I HAVE NO TAXABLE INCOME UNDER THE IT ACT 1 961 AND FILING MY INCOME TAX RETURN IN RESPONSE OF NOTICE U/S 148 DEC LARING AGRICULTURAL INCOME WHICH IS EXEMPT UNDER THE IT ACT 1961. 7. THAT I AM FILING MY AFFIDAVIT EXPLAINING THE TRU TH OF TRANSACTIONS. 07/01/2015 DEPONENT MANGAT SINGH VERIFICATION. VERIFIED THAT THE FACTS STATED ABOVE ARE TRUE & CORRECT TO THE BEST OF MY KNOWLEDGE BELIEF & NOTHING HAS BEEN CONCEALED THERE IN. 07/01/2015 DEPONENT MANGAT SINGH 6. IT IS SEEN THAT SUMMONS WERE ISSUED TO THE PURC HASERS WHICH CAME BACK WITH THE FOLLOWING COMMENTS : BUT ALL THE LETTERS RETURNED BACK WITH POSTAL REMAR K 'LEFT RETURNED TO SENDER & NSP '. AFTER THAT THEIR PANS HAVE BEEN TRACED OUT FROM SYS TEM AND NOTICED THAT ALL PERSONS ARE ASSESSED WITH INCOME TAX OFFICER WARD- 5(4) &. 5(1), AMRITSAR. 7. A PERUSAL OF THE ABOVE SHOWS THAT THE ASSESSING OFFICE R TRACED THE PANS OF THE THREE PERSONS AND FAILED TO CARRY OUT ANY O THER ACTIVITY. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE AFFIDAVIT OF S MT. HARJIT KAUR WHICH WAS FILED TO SUPPORT THE ASSESSEE'S CLAIM, WAS DISCARDED AS THAT BEING OF AN INTERESTED PERSON. THE ASSESSEE, AS PE R RECORD IS SUPPOSED TO HAVE ALSO FILED THE REPORT OF GAMADA WHICH H AS BEEN DISCARDED ON THE PLEA THAT THE SALE DEED REGISTERED REFL ECTS ONLY AN AMOUNT OF RS. 47,81,750/-. WE FIND THAT I N THE FACTS OF THE PRESENT CASE, THE TAX AUTHORITIES HAVE PROCEEDED TO TAKE ACTION QUA THE TRANSACTIONS AGAINST THE MOST VULNERABLE PERSON. THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE HAVING SOLD HIS LAND CONTINUED TO HAVE ANY HOLD OVER THE PURCHASERS. THE AO HAVING FULL AUTHORITY TO CALL FOR TH EIR PRODUCTION IN THE PECULIAR FACTS INSTEAD OF DISBELIEVING THE ASSESSEE IDE ALLY SHOULD HAVE CROSS-CHECKED THE FACTS FROM THE PURCHASERS WHO CONSCIOUSLY CHOSE NOT TO APPEAR BEFORE THE DEPARTMENT AND MAY HAVE REASON TO NOT ADDRESS THE CORRECT FACTS. AT THIS JUNCTURE, IT WOULD NOT BE OUT OF CONTEXT TO REFER TO THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESENT APPEAL WHEREIN GROUND NO.1 AND 10 ARE GENERAL : ITA-246/CHD/2018 A.Y.2011-12 PAGE 4 OF 5 2. THAT ADDITION MADE OF RS. 3,23,50,000/- UNDER THE P ROVISIONS OF SECTION 68 OF THE ACT IS ILLEGAL, UNJUSTIFIED AND UNWARRANTED BY THE FACTS OF THE CASE, BECAUSE THE ASSESSEE IS AN AGRICULTURIST AND IS NOT MAINTAINING BOOKS OF A/C. 3. THAT THE AO HAS NOT FOUND CREDIT IN THE BOOKS OF TH E ASSESSEE AND SAVING A/C MAINTAINED BY THE ASSESSEE CANNOT BE TREATED AS BOO KS OF A/C AS SUCH ADDITION MADE CANNOT BE SUSTAINED. 4. THAT THE LEARNED CIT A-(2) IGNORED THE CUMULATIVE C IRCUMSTANCES OF THE CASE WHICH PROVES THAT THE ASSESSEE DEPOSITED RS. 3,23,5 0,000/- IN CASH PLUS RS. 47,81,250/- BY CHEQUE (IN TOTAL RS. 3,71,33,250/-) IN THE BANK AFTER RECEIVING THIS AMOUNT FROM DILRAJ SINGH KARTA HUF, SH. SUKHDEEP SI NGH KARTA HUF AND SH. SATPAL SINGH AFTER SELLING 30 KANAL 12 MARIA AGRICU LTURE LAND SOLD ON DATED 28.01.2011 ATVILL. FEROZEPUR, DISTT. MOHALI. 5. THAT THE ASSESSEE FILED AFFIDAVIT DATED 08.01.2015 IN WHICH THE ASSESSEE HAS EXPLAINED THAT HE IS DOING AGRICULTURE FARMING AND HAVE NO OTHER SOURCE OF INCOME. THE ASSESSEE FURTHER STATED THAT THE DEPOSI T IN THE BANK WAS MADE OUT OF SALE PROCEEDS OF 30 KANAL 12 MARIA AGRICULTURE LAND AGAINST WHICH THE PURCHASER PAID RS. 47,81,250/- THROUGH CHEQUE (EXECUTING FOR SALE DEED) AND PAID IN CASH RS. 3,23,50,000/- IN TOKEN OF THE RECEIPT OF SALE. 6. THAT THE ASSESSEE DEPOSITED THE SAID MONEY IN HIS B ANK. THE LEARNED CIT (A) REJECTED THE APPEAL OF THE ASSESSEE TREATING AMOUNT OF RS. 3,23,50,0007- AS AN UNEXPLAINED INCOME ON ACCOUNT OF UNEXPLAINED CASH U 7S 68 OF THE LT.ACT 1961. 7. THAT THE ASSESSEE HAS DULY EXPLAINED THE SOURCE OF DEPOSIT IN THE BANK, NOW IT IS FOR THE DEPARTMENT TO PROVE THAT THE ASSESSEE HAD E ARNED THIS HUGE AMOUNT IN THE YEAR UNDER ASSESSMENT IN A DAY(OVERNIGHT) AND THE C IRCUMSTANTIAL EVIDENCE PROVES THAT THE DEPOSIT WAS MADE AFTER SELLING AGRICULTURE LAND. 8. THAT THE HONORABLE HIGH COURT OF ALLAHABAD IN THE C ASE OF CIT V7S INTEZAR ALI IN ITA NO. 162 (2013) DISMISSED THE APPEAL OF THE DEPA RTMENT BY ACCEPTING SOURCE OF DEPOSIT IN THE BANK WAS SALE CONSIDERATION OF AG RICULTURE LAND. THE FACTS AND CIRCUMSTANCES OF THE CASE IS THE SAME AS IN THE CAS E OF THE ASSESSEE. 9. THAT THE LEARNED AO DID NOT CROSS EXAMINE THE AS SESSEE ON THE POINT OF AFFIDAVIT FILED BY THE ASSESSEE AND HER SISTER, NOR REBUTTED THE CONTENT OF THE AFFIDAVIT, WHICH REMAIN UNCONTROVERTED, MUST INVERBALLY BE ACC EPTED AS TRUE AND RELIABLE AS HELD IN CASE OF MEHTA PARIKH & CO. V7S CIT (1956) 3 0 ITR 186, 187(S.C) AND KANSHNA V7S CIT (ALL) 1 42 ITR 61 8 . 8. ON A PERUSAL OF THE RECORD, IT IS SEEN THAT ADMITTEDLY THE TAX AUTHORITIES HAVE TAKEN THE EASY ROUTE BY INSISTING UPON THE TAXPAYER TO PRODUCE THE PARTIES ON WHOM HE ADMITTEDLY HAD NO CONT ROL. THE TAXPAYER AFTER HAVING SOLD HIS LAND HAS NO HOLD TO CAUSE THE RELUCT ANT PURCHASER TO APPEAR. IN THE FACTS OF THE PRESENT CASE, ADMITTEDLY 30 KANAL 12 MARLA HAVE BEEN SOLD IN VILLAGE FEROZEPUR BANGAR, DISTT. MOHALI ON 28.01 .2011 AS PER THE SALE DEED WHICH HAS BEEN TAKEN NOTE OF BY THE DEPA RTMENT. THE FACT THAT IT REFLECTED AN AMOUNT OF RS. 47,81,250/- IS A MATTER OF FACT. THE SHORT ISSUE FOR CONSIDERATION WAS THE VALUE OF THE LAND SOLD AT T HE RELEVANT POINT OF TIME. THE AO IN THE FACTS OF THE PRESENT CASE SHOULD HA VE CARRIED OUT NECESSARY ENQUIRIES AS HE HAD THE PAN DETAILS OF THE PU RCHASER. ACCORDINGLY, WE FIND THAT IN THE PECULIAR FACTS AND ITA-246/CHD/2018 A.Y.2011-12 PAGE 5 OF 5 CIRCUMSTANCES OF THE PRESENT CASE, THE TAX AUTHORITIES H AVE FAILED TO EXERCISE THEIR POWERS WHICH THEY ARE VESTED WITH AND IN THE FACE OF THE INABILITY OF THE ASSESSEE TO PRODUCE THE CONCERNED PURCH ASERS, THE DEPARTMENT WHO HAS THE PAN NUMBERS AND HAS TRACED T HE PARTIES IN AMRITSAR SHOULD HAVE NO HESITATION IN CALLING FORTH AND EXAM INING THE ISSUES AS THE PURCHASERS MAY BE FRONT-MEN OF SOME BUILDERS ETC. HAVING DEEP POCKETS. THE RELEVANT FACTS IN THE FORM OF THE VALU E OF THE SPECIFIC PROPERTY AT THE RELEVANT POINT OF TIME MAY ALSO BE A RELE VANT ASPECT TO BE TAKEN INTO CONSIDERATION. ACCORDINGLY, IN THE INTEREST OF JU STICE, THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO WITH A DIRECTION TO PA SS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASON ABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IN ITS OWN INTERESTS IS ADVISED TO PLACE ALL RELEVANT FACTS AND EVIDENCES ON RECORD. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.01. 2019. SD/- SD/- ( % & ' ( ) ) ( ! ) (ANNAPURNA GUPTA) (DIVA S INGH) *+ #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER & % (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER, 8 # / ASSISTANT REGISTRAR