Sh. Akhil Singla, New Delhi V. ITO, New Delhi

ITA 2997/DEL/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4146 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 29-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DHARENDER KUMAR
• Keywords: Gift; Salary income
• Section: 131; 68

Judgement Text

I.T.A .NO.-2997/DEL/2016 AKHIL SINGLA VS ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-2997/DEL/2016 (ASSESSMENT YEAR-2011-12) AKHIL SINGLA, HOUSE NO.22, SAINIK VIHAR, PITAMPURA, NEW DELHI-110034. PAN-AWZPS9831J ( APPELLANT) VS ITO, WARD-19(4), NEW DELHI. (RESPONDENT) ASSESSEE BY SH.DHARENDER KUMAR, CA REVENUE BY SH.ANIL SHARMA, SR.DR DATE OF HEARING 29 .09.2016 DATE OF PRONOUNCEMENT 07.12.2016 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 28.03.2016 OF CIT(A)-7, NEW DELHI PERTA INING TO 201112 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED BY THE CIT (APPEALS)-7 CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER, IS ARBITRARY, BIASED AND BAD IN LAW AND IN FACTS OF THE CASE. 2. THAT THE LEARNED CIT (APPEALS) HAS GROSSLY ERR ED IN CONFIRMING THE ADDITION OF RS.32,33,700/- UNDER SECTION 68 OF THE ACT MADE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAD DISCHA RGED HIS ONUS ENVISAGED UNDER SECTION 68 OF THE ACT FOR RECEIPT OF ADVANCE AGAINS T PROPOSED SALE OF PROPERTY. 3. THAT THE LEARNED CIT (APPEALS) HAS GROSSLY ERR ED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF T HE ACT IGNORING THE FACT THAT THE APPELLANT COULD NOT BE EXPECTED TO PROVE THE SO URCE OF SOURCE. 4. THAT THE LEARNED CIT (APPEALS) HAS GROSSLY ERR ED IN CONFIRMING THE ADDITION MADE UNDER SECTION 68 BY THE ASSESSING OFFICER IGNO RING THE FACT THAT THE PROSPECTIVE BUYER OF LAND FROM WHOM ADVANCE IN CASH HAD BEEN RECEIVED WAS RETURNED THE ADVANCE THROUGH BANK IN THE SAME FINAN CIAL YEAR. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR DELETE THE ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE WHO IS SHOWING INCOME FROM SALARY; HOUSE PROPERTY AND OTHER SOURCES, RETURNED AN INCOME OF RS.5,59220/-. THE SAID CASE WAS PICKED UP FOR SCRUTINY AS AN AMOUNT OF RS.32,33 ,700/- WAS FOUND TO HAVE BEEN DEPOSITED IN THE ASSESSEES BANK ACCOUNT. THE ASSES SEE WAS REQUIRED TO EXPLAIN THE SAME. 3. A PERUSAL OF THE ASSESSMENT ORDER PAGE 2 SHOWS THAT THE ASSESSEE CLAIMED THAT THESE WERE FROM SH. SURESH CHANDER YADAV AS PART PA YMENTS IN REGARD TO A SPECIFIC PLOT WHICH HE OWNED ALONG WITH HIS BROTHER. THE RELEVANT EXPLANATION IS EXTRACTED HEREUNDER FOR READY REFERENCE:- PAGE 2 OF 5 I.T.A .NO.-2997/DEL/2016 AKHIL SINGLA VS ITO REGARDING SOURCE OF CASH DEPOSIT OF RS.32,33,700/- MR.AKHIL SINGLA AND MR.ATUL SINGLA, BOTH ARE BROTH ERS ARE S/O-SH.VINOD SINGLA, R/O-22, SAINIK VIHAR, NEW DELHI AGED 30 YEARS ARE T HE JOINT OWNERS WITH EQUAL SHARES OF THE PROPERTY SITUATED AT KHETONI NO.28, K HASRA NO.-965, GRAM PATTI SEWAI, NAI WALA ROAD, BRANALA (PUNJAB) SINCE 1996-1 997 (COPY OF SALE AGREEMENT ENCLOSED) DURING THE YEAR UNDER ASSESSMENT, THE AFORESAID PRO PERTY WAS UNDER THE NEGOTIATION FOR SALE AND THE AGREEMENT TO SELL WAS EXECUTED ON DATED 10.06.2010 BETWEEN MR. AKHIL SINGLA AND MR. SURESH CHAND YADAV , WHO IS FARMER S/O.SH.BALWANT SINGH, R/O-FLAT NO.E-360, FACE-1, RH CO INDUSTRIAL AREA, BHIWADI FOR RS.65,00,000/- OUT OF WHICH THE ASSESSEE RECEIV ED PARTIAL AMOUNT IN CASH AS FOLLOWS:- S.NO. DATED AMOUNT 1. 10.06.2010 16,00,000/ - 2. 25.07.2010 16,00,000/- TOTAL 32,00,000/- 4. THE ASSESSING OFFICER, ACCORDINGLY ISSUED SUMMON S UNDER SECTION 131 ON 03.03.2014 FOR COMPLIANCE ON 10.03.2014 REQUIRING SH. SURESH C HAND YADAV TO BE PRESENT FOR HIS PERSONAL DEPOSITION, ALONG WITH COPY OF HIS INCOME TAX RETURNS FOR 200910, 201011 AND 201112 ASSESSMENT YEARS AND COPY OF BANK STATEMENT WITH NARRATIONS ETC WHICH REFLECTED THE TRANSACTION WITH THE ASSESSEE ALONG WITH PROOF AND DOCUMENTARY EVIDENCE OF SOURCE OF CASH. IN RESPONSE TO THE SAID NOTICE, SH. SURESH CH AND YADAV AS PER RECORD HAS REPLIED ON 10.03.2014 STATING THAT DUE TO HIS FAMILY PROBLEMS HE WAS UNABLE TO COME. HOWEVER, THE ASSESSING OFFICER CONSIDERING THE FACT THAT THE ASS ESSEE FAILED TO EXPLAIN THE DEPOSITS IN CANARA BANK, BARNALA (PUNJAB) A/C NO.00000024222 AN D PROCURING COPY OF RETURNS OF SH.SURESH CHAND YADAV, PAN-ACJPY8421E FROM THE JURI SDICTIONAL ASSESSING OFFICER, WARD-1, AAYAKAR BHAWAN, SECTOR-14, HISAR, HARYANA, NOTED THAT ON THE BASIS OF THE FOLLOWING INCOME CHART OF SH. SURESH CHAND YADAV, IT COULD NO T BE CONCLUDED THAT HE WAS IN A POSITION TO FUND THE HUGE AMOUNT OF RS.32,00,000/-. THE R ELEVANT CHART IS EXTRACTED FROM THE ASSESSMENT ORDER:- S.NO. A.Y. DATE OF FILING INCOME FROM SALARY INCOME FROM OTHER SOURCE DEDUCTION AGRICULTURE INCOME TOTAL INCOME 1. 2009-10 31.07.2010 1,26,000 9,360 NIL 1,16,640 2. 2010 - 11 31.07.2010 1,04,400 1,66,948 37,324 NIL 2,34,014 3. 2011-12 14.05.2011 76,400 1,39,149 59,534 NIL 2, 56,015 PAGE 3 OF 5 I.T.A .NO.-2997/DEL/2016 AKHIL SINGLA VS ITO 4.1. AS A RESULT THEREOF, THE ADDITION OF THE SAID AMOUNT WAS MADE IN THE HA NDS OF THE ASSESSEE. 5. THE ISSUE WAS CHALLENGED IN APPEAL BEFORE THE CI T(A). THE ASSESSEE SUBMITTED THAT THE DEPOSITS MADE IN HIS BANK ACCOUNT WAS SUPPORTE D BY A COPY OF THE SALE AGREEMENT WHICH HAD BEEN PRODUCED DURING THE ASSESSMENT PROCE EDINGS. IT WAS FURTHER SUBMITTED THAT THE IDENTITY OF SH. SURESH CHAND YADAV WAS PROVED S INCE A DIRECT COMMUNICATION WAS MADE TO THE ASSESSING OFFICER. THE FACT THAT HE WAS FIL ING INCOME TAX RETURNS WHICH WERE DIRECTLY PROCURED BY THE ASSESSING OFFICER FROM THE OTHER AO I.E. THE AO OF SH.SURESH CHAND YADAV. THIS FACT IT WAS SUBMITTED FURTHER PROVED HIS IDENT ITY. THE AMOUNTS WERE STATED TO HAVE BEEN REPAID BACK AS PER THE SUBMISSION RECORDED AT PAGE 3 PARA OF THE CIT(A) ON THE FOLLOWING DATES:- S.NO. DATED AMOUNT (IN RS.) 1. 19.10.2010 7,00,000/ - 2. 21.10.2010 5,00,000/- 3. 01.11.2010 10,00,000/- 4. 02.11.2010 10,00,000/- TOTAL 32,00,000/- 6. A PERUSAL OF THE SUBMISSIONS RECORDED IN THE IMP UGNED ORDER AND PARAS 6 AND 7 AT PAGE 3 OF THE IMPUGNED ORDER, IT IS NOTICED THAT T HE ASSESSEE STATED THAT ON BECOMING AWARE OF THE FACT THAT THE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE BECAUSE THE CAPACITY OF SH. SURECH CHAND YADAV WAS DOUBTED. I N THE CIRCUMSTANCES AS PER ARGUMENTS RECORDED IN THE IMPUGNED ORDER, THE ASSESSEE ENQUIR ED FROM SH. SURESH CHAND YADAV AS TO HOW HE HAD ACQUIRED THE SAID MONEY. SH. SURESH CH AND YADAV AS PER ASSESSEES SUBMISSION EXTRACTED IN THE ORDER IS SUPPOSED TO HA VE STATED THAT IT WAS A GIFT FROM HIS FATHER. SH. SURESH CHAND YADAVS FATHER AND UNCLE, IT HAS B EEN STATED WERE AGRICULTURIST IN JOINT FAMILY ANCESTRAL LAND HOLDINGS. THE AFFIDAVIT OF S H. YADAV STATING THAT HE WAS AN AGRICULTURIST IT WAS SUBMITTED WAS IN FACT REFERRING TO THE AGRIC ULTURAL ACTIVITY BEING CARRIED OUT BY HIS FATHER AND UNCLES. AS TO THE SOURCE OF THE FUNDS ADVANCED , IT WAS STATED RELIANCE IS PLACED UPON COPY OF KHASRA AND KHATOUNI OF LANDS HELD BY SH. SU RESH CHAND YADAVS FATHER MR BALWAN PAGE 4 OF 5 I.T.A .NO.-2997/DEL/2016 AKHIL SINGLA VS ITO SINGH AND UNCLE MR JAIDEV, MR. HARISINGH EVIDENCIN G SUBSTANTIAL AGRICULTURAL LAND HOLDING OF APPROXIMATELY 24 ACRES BETWEEN THEM. HOWEVER, THE EXPLANATION OFFERED WAS NOT ACCEPTED AS THE ASSESSEE WAS CONSIDERED TO HAVE BEEN CHANGIN G HIS STANCE AS TO THE SOURCE OF THE MONEY COMING FROM THE AGRICULTURAL ACTIVITY CARRIED OUT BY SH. SURESH CHAND YADAV AND THEREAFTER AS A GIFT FROM HIS FATHER WHO INSTEAD WA S ENGAGED IN THE AGRICULTURAL ACTIVITY ALONG WITH HIS BROTHERS. 6.1. THE LD.AR REITERATED THE SUBMISSIONS ADVANCED BEFORE THE CIT(A). IT WAS FURTHER STATED THAT SINCE THE TRANSACTION DID NOT GO THROUG H THE AMOUNTS WERE RETURNED. 6.2. THE LD.SR.DR RELIED UPON THE IMPUGNED ORDER ST ATING THAT THE ASSESSEES STAND IS VACILLATING. 7. ON CONSIDERING THE ABOVE-MENTIONED OVERALL FACTU AL MATRIX, IT IS SEEN THAT THE RETURN FOR THE YEAR UNDER CONSIDERATION AS PER THE ASSESSM ENT ORDER WAS FILED ON 28.03.2012 AND NOTICE UNDER SECTION 143(2) WAS ISSUED ON 08.08.201 2. AS PER THE SUBMISSIONS EXTRACTED AT PAGE 3 PARA 4 OF THE IMPUGNED ORDER, THE ASSESSEE H AS CLAIMED THAT THE ADVANCES RECEIVED HAVE BEEN REPAID BACK IN THE MONTHS OF OCTOBER AND NOVEMBER 2010 AS THE TRANSACTION DID NOT GO THROUGH. ON A CONSIDERATION OF THE FACTS, I AM OF THE VIEW THAT RELEVANT FACTS HAVE NOT BEEN THRASHED OUT BY THE TAX AUTHORITIES. EVIDENTL Y THERE WAS A SPECIFIC PIECE OF LAND BELONGING TO THE ASSESSEE AND THERE WAS AN AGREEME NT TO SELL ENTERED INTO BY THE ASSESSEE WITH SH.SURESH CHAND YADAV. IF HIS SIGNATURE IS F OUND THEREIN AND THE ENTERING INTO OF THE TRANSACTION IS SUPPORTED BY AN AFFIDAVIT OF THE SH. SURESH CHAND YADAV, THEN THERE WAS NO REASON FOR THE REVENUE NOT TO ADDRESS THE AVAILABIL ITY OF FUNDS IN THE HANDS OF THE SH.SURESH CHAND YADAV FROM HIS FATHERS AGRICULTURAL ACTIVITY . HOW THE ASSESSEE CAN BE HELD RESPONSIBLE FOR THE FINANCIAL AFFAIRS AND THE EXPLA NATION OFFERED BY SH.SURESH CHAND YADAV IS NOT BROUGHT OUT IN THE ORDERS. AS PER THE FACTS ON RECORD, THE OWNERSHIP OF A SPECIFIC LAND/PLOT IN THE HANDS OF THE ASSESSEE IS NOT DOUBTED. THE O THER PARTY SIGNATORY OF THE AGREEMENT TO SELL SH.SURESH CHAND YADAV IS IDENTIFIED WHO EXPLAI NS THE SOURCE BUT DOES NOT APPEAR ON THE ONLY ONE OPPORTUNITY PROVIDED TO HIM. THE PARTI ES ARE NOT RELATED THE AMOUNTS ARE STATED PAGE 5 OF 5 I.T.A .NO.-2997/DEL/2016 AKHIL SINGLA VS ITO TO BE REPAID BACK ON SPECIFIC DATES PRIOR TO THE F ILING OF THE RETURN ITSELF. THE RETURN AS PER RECORD WAS FILED ON 20.03.2012 AND THE AMOUNTS ARE CLAIMED TO BE REPAID BY CHEQUES ON SPECIFIC DATES IN OCTOBER AND NOVEMBER IN 2010. ACC ORDINGLY, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT SUBJECT TO V ERIFICATION THAT THE AMOUNTS HAVE BEEN REPAID ON SPECIFIC DATES BACK TO SH. SURESH CHAND Y ADAV THE ADDITION PER SE CANNOT BE SUSTAINED. THE LD.AR ON QUERY WAS ALSO UNABLE TO S TATE WHETHER THE SAID SPECIFIC PLOT CONTINUES TO BE HELD BY THE ASSESSEE OR HAS IT BEEN SOLD. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUES ARE RESTORED TO THE AO TO VERIFY THE ABOVE CLAIMS. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07 TH OF DECEMBER, 2016. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI