Balwant Singh Dhillon HUF, Bathinda V. Commissioner of Income Tax, Bathinda

ITA 256/ASR/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3722 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Peak credit
• Section: 147; 263; 63; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI T.S.KAPOOR, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 256/ASR/2015 ASSESSMENT YEAR: 2009-10 SHRI BALWANT SINGH DHILLON HUF, VS. THE CIT, DISTT. BATHINDA BHATINDA PAN NO. AAIHB3288D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KALIA RESPONDENT BY : SHRI RAHUL DHAWAN DATE OF HEARING : 24.11.2016 DATE OF PRONOUNCEMENT : 30.11.2016 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [HEREINAFTER REF ERRED TO AS CIT] AGAINST THE REVISION ORDER DATED 25/30.03.2015 PASSED U/S 2 63 OF THE ACT. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE PROCEED INGS U/S 147 WERE INITIATED IN THIS CASE ON THE GROUND THAT A CASH DE POSIT OF RS. 30,14,500/- WAS FOUND IN THE SAVING BANK ACCOUNT OF THE ASSESSEE DU RING THE PERIOD 1.4.2008 TO 31.3.2009. DURING THE SO REOPENED ASSESSMENT PR OCEEDINGS THE ASSESSEE EXPLAINED SOURCE OF DEPOSITS TO THE ASSESSING OFFIC ER. IT WAS EXPLAINED THAT THE SOURCE OF DEPOSIT WAS OUT OF THE LEASE RENTAL O F 14 ACRES OF AGRICULTURAL LAND OF THE ASSESSEES FAMILY. THE ASSESSING OFFICE R MADE INQUIRIES IN THIS RESPECT AND RECORDED THE STATEMENT OF ASSESSEE AS W ELL AS OF THE THREE PERSONS WHO HAD TAKEN THE LAND OF THE ASSESSEE ON LEASE BAS IS. AFTER MAKING THE NECESSARY INQUIRIES, THE ASSESSING OFFICER OBSERVED THAT THE AMOUNT IN QUESTION WAS THE AGGREGATE OF VARIOUS DEPOSITS AND THERE WERE VARIOUS WITHDRAWALS ALSO, HE THEREFORE, TOOK THE PEAK OF CA SH DEPOSIT AT RS. 11,99,100/-. HE, HOWEVER, MADE AN ADDITION OF RS.1, 80,000/- ON ESTIMATION BASIS TO COVER UP THE POSSIBLE LEAKAGE OF REVENUE I N RELATION TO THE DEPOSIT MADE BY THE ASSESSEE IN HIS BANK ACCOUNT. 2.1 THE LD. COMMISSIONER OF INCOME TAX, HOWEVER, NO TED THAT THERE WERE SUM DEFICIENCIES AND IRREGULARITIES IN THE ASSESSME NT ORDER. HE OBSERVED THAT ASSESSING OFFICER HAD NOT PROPERLY APPLIED HIS MIND TO THE FACTS OF THE CASE. HE OBSERVED THAT THE AGRICULTURAL LAND LEASED OUT B Y THE ASSESSEE WAS ONLY 14 ACRES. THE SOURCE OF AMOUNT DEPOSIT OF RS. 26 LAKHS STATED TO BE WAS OUT OF THE LEASE RENTAL OF THE AGRICULTURAL LAND AND THE R EMAINING FOUR LAKHS FROM THE 3 SALE OF CAR. HE FURTHER OBSERVED THAT A FARMER CANN OT RECEIVE NET AGRICULTURAL INCOME / LEASE RENT TO THE EXTENT OF RS. 26 LAKHS F ROM 14 ACRES OF LAND IN A YEAR. HE NOTED THAT THE ABOVE RECEIPTS ONE PER ACRE LEASE RENT WAS WORKED OUT AT THE RATE OF RS. 1.8 LAKH PER ACRE OF LAND WHICH WAS HIGHLY IMPROBABLE IN THE EXISTING CIRCUMSTANCES. HE FURTHER OBSERVED THA T THE THREE FARMERS WHOSE STATEMENTS WERE RECORDED COULD EXPLAIN THE AMOUNT O F RS. 10,85,000/- ONLY AND THAT THE SOURCE OF THE REMAINING AMOUNT OF RS. 15,15,000/- HAD REMAINED UNEXPLAINED. HE ALSO DOUBTED THE EVIDENCE SUBMITTED BY THE ASSESSEE OF SOURCE OF DEPOSIT OF RS. 4 LAKHS ON ACCOUNT OF SALE OF CAR. THE LD. CIT, THEREFORE, ASSUMED JURISDICTION U/S 263 OF THE ACT AND ASKED THE ASSESSEE TO EXPLAIN IN THIS REGARD. 2.2 THE ASSESSEE EXPLAINED THAT HE HAD NOT RECEIVED ANY AMOUNT OF RS. 26 LAKHS IN A YEAR ON ACCOUNT OF LEASE RENTAL FOR AGRI CULTURAL LAND AS HAS BEEN ALLEGED BY THE LD. CIT. IT WAS EXPLAINED THAT THE L EASE RENTAL RECEIVED WAS OF RS. 10,85,000/- WHICH WAS FOR TWO YEARS AND NOT FOR ONE YEAR. THE ASSESSING OFFICER HAD ASSESSED THE AGRICULTURAL INCOME OF THE ASSESSEE FOR ONE YEAR AT RS. 5,42,750/- ONLY. THAT ALL THE PLEAS TAKEN BY T HE LD. CIT IN THE NOTICE ISSUE U/S 263 OF THE ACT WERE ON WRONG ASSUMPTION O F FACTS. THAT THE ASSESSING OFFICER IN FACT HAD TAKEN THE PEAK CREDIT IN THE BANK ACCOUNT AND HAD MADE THE ADDITION ACCORDINGLY. THERE WAS NOT AN Y SINGLE DEPOSIT OF THE ALLEGED AMOUNT OF RS. 30 LAKHS. IT WAS ALSO EXPLAIN ED THAT THE CAR WAS SOLD 4 FOR AN AMOUNT OF RS. 4.5 LAKHS AND EVIDENCES IN THI S RESPECT WERE SUBMITTED BEFORE THE ASSESSING OFFICER. IT WAS ALSO EXPLAINED THAT THE ASSESSING OFFICER HAD MADE NECESSARY INQUIRIES IN RESPECT OF DEPOSIT S AND THAT THERE WAS NO FAULT IN THE ORDER OF THE ASSESSING OFFICER. 2.3 THE LD. CIT HOWEVER, REJECTED THE CONTENTION OF THE ASSESSEE AND HELD THAT THE ASSESSING OFFICER HAD EVEN OTHERWISE WRONG LY ADOPTED THE FIGURE OF PEAK CREDIT FIGURE IN THE ACCOUNT OF THE ASSESSEE A ND THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE EVIDENCES ON ACCOUNT O F AGRICULTURAL INCOME OF THE ASSESSEE. HE, THEREFORE, SET ASIDE THE ASSESSME NT ORDER DT 28.3.2013 OF THE ASSESSING OFFICER AND DIRECTED THE ASSESSING OFFICE R TO MAKE THE ASSESSMENT AFRESH. 3. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE LD. CIT HAS ASSUMED THE JURISDICTION U/S 263 OF THE ACT ON WRONG ASSUMPTION OF FACTS AS RECORDED ABOVE. THE ASSESSEE HAD NOT RECEIVED T HE AGRICULTURAL INCOME TO THE TUNE OF RS. 26 LAKHS AS ALLEGED. THE AGRICULTU RAL INCOME RECEIVED BY THE ASSESSEE WAS ONLY RS. 10,85,000/- AND THAT TOO WAS RECEIVED AS LEASE RENTAL FOR TWO YEARS FROM THREE PERSONS. ALL THE PERSONS WERE DULY EXAMINED BY THE ASSESSING OFFICER. THE ADDITION OF RS. 1,80,000/- W AS MADE BY THE ASSESSING OFFICER JUST ON ASSUMPTION BASIS. THE ASSESSING OFF ICER HAD DULY EXAMINED THE BANK ACCOUNT OF THE ASSESSEE AND HAS GIVEN TELE SCOPIC BENEFIT TO THE 5 ASSESSEE OF THE WITHDRAWALS. THE ADDITION MADE BY T HE ASSESSING OFFICER OF RS. 1,80,000/- ON ADHOC BASIS HAS ALSO BEEN DELETED BY THE LD. CIT(A) VIDE ORDER DATED 30.3.2015. AFTER THE ORDER OF THE CIT(A ) DT. 25/30.3.2015, THE LD. PRINCIPAL CIT, BHATINDA INITIATED PROCEEDINGS U /S 263 OF THE ACT AND THAT TOO ON WRONG ASSUMPTION OF FACTS. 4. THE LD. CIT WRONGLY ASSUMED THAT THE ASSESSEE HA D RECEIVED RS. 26 LAKHS AS AGRICULTURAL INCOME / LEASE RENTAL FOR THE YEAR UNDER CONSIDERATION AND PROCEEDED TO INITIATE REVISION PROCEEDINGS U/S 263 OF THE ACT. THE SATISFACTION RECORDED BY THE CIT THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E WAS ON WRONG ASSUMPTION OF FACTS AND UNDER SUCH CIRCUMSTANCES, T HE VARY INITIATION OF REVISION PROCEEDINGS U/S 263 OF THE ACT WERE WITH OUT JURISDICTION AND BAD IN LAW. EVEN WE FIND THAT LD. CIT HAS INITIATED THE PR OCEEDINGS U/S 263 OF THE ACT AFTER PASSING OF THE ORDER OF THE CIT(A) DT. 3 0.10.2015 WHICH FACT FINDS MENTION IN THE IMPUGNED ORDER OF CIT ITSELF. WE HA VE GONE THROUGH THE ORDER OF CIT(A) DT 30.3.2015, WHEREIN, HE HAS DIRECTED THE ASSESSING OFFICER TO ACCEPT THE RETURNED INCOME OF THE ASSESSEE. THE ORD ER OF THE LOWER AUTHORITY (ASSESSING OFFICER) HAS THUS MERGED WITH THE ORDER OF THE APPELLATE AUTHORITY (CIT(A) DATED 30.3.2015. IN SUCH CIRCUMST ANCES, THE CIT HAVING EQUAL / PARALLEL JURISDICTION TO THAT OF CIT(A) CO ULD NOT HAVE EXERCISED THE REVISION JURISDICTION IN RESPECT OF ASSESSMENT ORDE R WHICH HAS ALREADY MERGED 6 WITH THAT OF THE ORDER OF THE CIT(A). THE ORDER PAS SED BY THE CIT U/S 263 OF THE ACT IS THUS BAD IN LAW AND THE SAME IS ACCORDIN GLY SET ASIDE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2016 SD/- SD/- (T.S KAPOOR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH NOVEMBER, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR