ITO, Rewari V. Sh. Phool Singh, Rewari

ITA 3018/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6441 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 09-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: F R MEENA
• Keywords: Unexplained investment; Opportunity of being heard; Source of fund
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.3018/DEL/2014 ASSESSMENT YEAR : 2007-08 ITO, WARD 2, REWARI. VS. PHOOL SINGH, S/O SHRI PHUSA RAM, VILLAGE KI DHANI, SECTOR-4, REWARI PAN : CUNPS 2470 M (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI F.R. MEENA, SR.DR REVENUE BY NONE DATE OF HEARING 09 . 11 .2016 DATE OF PRONOUNCEMENT 29 .1 2 .2016 O R D E R PER DIVA SINGH, J.M. : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 14.03.2014 OF THE CIT(A), ROHTAK PERTAI NING TO 2007-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 44,20,003/- MADE BY A.O. ON ACCOUNT OF THE UNEXPLAINED INVESTMENT FROM UNEXPLAI NED/UNDISCLOSED SOURCES OF INCOME, THE LD. CIT(A) HAS DELETED THE ADDITION WIT HOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO IN ASSESSMENT ORDER AS ON SUSTAINABLE DOCUMENTS WAS FURNISHED BY THE ASSESSEE REGARDING THE VALID SOURC ES OF INVESTMENT IN PURCHASE OF LAND. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION AMOUNTING TO RS. 1,20,000/- MADE BY AO AS NO SUSTAINABLE DOCUMENTARY EVIDENCE REGARDING PROOF OF AGRICULTURE INCOME WAS FURNISHED BY ASSESSEE DURING COURSE OF PROCEEDINGS. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MODIFY, DELETE AND OR CHANGE ANY OF THE ABOVE GROUNDS ON OR BEFORE AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING, NO WAS PRESENT ON BEHALF OF THE ASSESSEE, THE APPEAL WAS PASSED OVER. IN THE SECOND ROUND ALSO THOUGH THE A SSESSEE RESPONDENT REMAINED UNREPRESENTED HOWEVER, CONSIDERING THE MATERIAL AVA ILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE-RESPONDENT ON MERIT AFTER HEARING THE LD.SR.DR. 2 3. THE RELEVANT FACTS OF THE CASE ARE THAT AS PER A IR INFORMATION THE ASSESSEE WAS FOUND TO HAVE PURCHASED AN IMMOVABLE PROPERTY OF RS .48,05,000/- ON 17.01.2007. NOTICE U/S 148 WAS ISSUED ON 13.03.2012 AFTER RECOR DING OF THE REASONS. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT MA DE IN THE PURCHASE OF LAND. THE ASSESSEE IN REPLY SUBMITTED THAT THE ASSESSEES SHA RE WAS AND THE INVESTMENT OF HIS SHARE AMOUNTING TO RS.24,10,000/- WAS EXPLAINABLE F ROM THE RECEIPT OF RS.84,43,203/- RECEIVED FROM LAO, URBAN ESTATE, GURGAON AGAINST CO MPULSORY ACQUISITION OF AGRICULTURAL LAND. THE EXPLANATION WAS NOT ACCEPTE D SINCE THE ASSESSEE WAS FOUND TO HAVE PURCHASED VARIOUS AGRICULTURAL PROPERTIES AND FURTHER CLARIFICATION FOR AVAILABLE FUNDS ON THE RELEVANT DATE WAS SOUGHT. SINCE ON 27 .02.2013, THE ASSESSEE FAILED TO APPEAR, THE ASSESSING OFFICER MADE THE ADDITION OF RS.44,20,003/- IN THE HANDS OF THE ASSESSEE. 4. THE ASSESSEE CHALLENGED THE ADDITION IN APPEAL B EFORE THE CIT(A). IT WAS PLEADED ON BEHALF OF THE ASSESSEE THAT THE SOLE MEANS OF L IVELIHOOD OF THE ASSESSEE IS ONLY AGRICULTURE AND APART FROM AGRICULTURAL INCOME THER E WAS NO OTHER SOURCE OF INCOME. THE SUBMISSIONS ADVANCED BEFORE THE AO WERE AGAIN R EPEATED. THE COMPENSATION AWARD OF RS.84,43,203/- IN 2006-07 ASSESSMENT YEA R AGAINST THE COMPULSORY ACQUISITION OF AGRICULTURAL LAND EXEMPT U/S 10(37) OF THE I.T. ACT, 1961, IT WAS SUBMITTED WAS CREDITED ON 31.01.2006 IN THE SAVING BANK A/C N O.009125 OF PUNJAB NATIONAL BANK, REWARI. COPY OF THE BANK STATEMENT MADE AVAI LABLE TO THE ASSESSING OFFICER WAS RELIED UPON REFERRING TO PARA 3 OF THE ASSESSMENT O RDER. THE FOLLOWING EXTRACT WAS QUOTED TO DEMONSTRATE THAT THE RELEVANT DOCUMENT WA S BEFORE THE AO:- 'THE ASSESSEE HAD ITS CLOSING BALANCE AT RS. 10,25,448/ - OF ITS BANK ACCOUNT AND THAT TOO HAVE BEEN WITHDRAWN BEFOR E 03-08-2006 AND AS ON 06-01-2007, THE ASSESSEE HAD ITS CLOSING BALA NCE AT RS. 26,768/- ONLY OF ITS BANK ACCOUNT AND INVESTMENTS IN PURCHAS E OF AGRICULTURE LAND WAS MADE ON 17-01-2007 AMOUNTING RS. 24,10,000/- AN D ON 18-01- 2007 AMOUNTING RS. 20,10,003. IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS EVEN AFTER AVAILING AM PLE OPPORTUNITIES TO FILE THE VALID SOURCES OF INVESTMENT MADE IN PURCHASE OF THE LAND EXTENT OF RS. 44,20,003/-. THEREFORE, RS. 44,20,003/- WHILE T REATING IT AS UNEXPLAINED INVESTMENT OF APPELLANT FROM UNEXPLAINE D/UNDISCLOSED SOURCES OF INCOME.' 3 4.1. IT WAS SUBMITTED THAT THE ASSESSEE HAD INVESTE D WHOLE OF ITS COMPENSATION OF RS.84,43,203/- IN PURCHASING AGRICULTURAL LANDS WHI CH INCLUDED THE LAND IN QUESTION. THE FOLLOWING DETAILS MADE AVAILABLE TO THE AO WERE AGAIN RELIED UPON :- # DEED REG. NO. DATE OF DEED REGISTRATION AMOUNT IN RS. ASSESSEES SHARE IN % ASSESSEES SHARE IN RS. MODE OF PAYMENT 1 6505 01-02-2006 28,08,470 100% 28,08,970 CASH 2 3832 06-03-2006 4,77,500 50% 2,38,750 CASH 3 3831 06-03-2006 7,78,603 50% 3,89,302 CASH 4 2160 14-06-2006 7,50,500 100% 7,50,500 CASH 5 2753 17-01-2007 48,20,000 50% 24,10,000 CASH 6 8495 18-01-2007 20,10,003 100% 20,10,003 TOTAL 86,07,525 4.2. COPIES OF THE PURCHASE DEEDS OF REGISTRATION W ERE FILED IN SUPPORT OF THE SAID CLAIM. IN THESE CIRCUMSTANCES, IT WAS SUBMITTED TH AT ONLY ON CONSIDERING THE BANK BALANCE THE ASSESSING OFFICER MISDIRECTED HIMSELF. THE CASH FLOW STATEMENT FOR THE PERIOD FROM 01.02.2006 TO 18.01.2007 WAS RELIED UPO N. COPY OF THE SAME IS EXTRACTED IN PAGES 4 TO 5 OF THE IMPUGNED ORDER. THE SAME IS REPRODUCED HEREUNDER FOR READY- REFERENCE:- CASH FLOW STATEMENT FOR THE PERIOD 01.02.2006 TO 18 .01.2007 # DATE OF TRANSACTIONS DEBIT IN RS. CREDIT IN RS. NARRATION CASH BALANCE IN RS. 1. 01.02.2006 40,00,000 CASH WITHDRAWAL FROM O.B.C.BANK VIDE CHEQUE NO.723286 40,00,000 2. 01.02.2006 28,08,970 AGRICULTURE LAND PURCHASED VIDE REGISTRY NO.6505 11,91,030 3. 14.02.2006 10,00,000 CASH WITHDRAWAL FROM O.B.C . BANK VIDE CHEQUE NO.723287 21,91,030 4. 06.03.2006 8,50,000 CASH WITHDRAWAL FROM O.B.C. BANK VIDE CHEQUE NO.723288 30,41,030 5. 06.03.3006 3,89,302 AGRICULTURE LAND PURCHASED VIDE REGISTRY NO.3831 26,51,728 6. 06.03.2006 2,38,750 AGRICULTURE LAND PURCHASED VIDE REGISTRY NO.3832 24,12,978 7. 07.03.2006 6,00,000 CASH WITHDRAWAL FROM O.B.C BANK VIDE CHEQUE NO.723289 30,12,978 8. 24.04.2006 9,90,000 CASH WITHDRAWAL FROM O.B.C BANK VIDE CHEQUE NO.887311 40,02,978 9. 01.05.2006 9,90,000 CASH WITHDRAWAL FROM O.B.C. BANK VIDE CHEQUE NO.887312 49,92,978 10. 14.06.2006 7,50,500 AGRICULTURE LAND PURCHASED VIDE REGISTRY NO.2160 42,42,478 11. 03.07.2006 3,00,000 CASH WITHDRAWAL FROM O.B.C BANK VIDE CHEQUE NO.887314 45,42,478 12. 17.07.2006 4,00,000 CASH WITHDRAWAL FROM O.B.C 49,42,478 4 BANK VIDE CHEQUE NO.887315 13. 03.08.2006 3,00,000 CASH WITHDRAWAL FROM O.B.C BANK VIDE CHEQUE NO.887316 52,42,478 14. 17.01.2007 24,10,000 AGRICULTURE LAND PURCHASE D VIDE REGISTRY NO.2753 28,32,478 15. 18.01.2007 20,10,003 AGRICULTURE LAND PURCHASE D VIDE REGISTRY NO.8495 8,22,475 4.3. THE RECORD SHOWS THAT RELYING ON THE SAME, TH E ASSESSEE SUBMITTED THAT SUFFICIENT CASH BALANCE TO THE TUNE OF RS.52,42,478/- WAS AVAI LABLE ON THE DATES 17.01.2007 AND 18.01.2007 ON WHICH DATES THE AGRICULTURAL LANDS AM OUNTING TO RS.24,10,000/- AND RS.20,10,003/- WERE PURCHASED. REGISTRY NO.2753 AN D 8495, IT WAS SUBMITTED FRUCTIFIED ONLY AFTER CONSTANT EFFORTS IN PURSUING THE CO-OWN ERS OF THE SAID AGRICULTURE LANDS WHOSE RESPECTIVE SHARES ARE REFLECTED IN THE SALE D EED. THE SAID EXERCISE, IT WAS CLAIMED TO BE A VERY TIME CONSUMING EXERCISE FOR WH ICH THE FUNDS WERE REQUIRED TO BE READILY KEPT AT HAND. 5. CONSIDERING THESE FACTS AND EVIDENCES, THE ADDIT ION WAS DELETED. 6. SIMILARLY, QUA THE NEXT ISSUE RAISED BY THE REVE NUE, THE ASSESSEE IS FOUND TO HAVE MADE THE FOLLOWING SUBMISSIONS IN REGARD TO THE MAN NER IN WHICH THE ISSUE WAS DECIDED DURING THE ASSESSMENT PROCEEDINGS:- THE APPELLANT WAS NEVER ASKED TO PRODUCE THE DOCUM ENTARY EVIDENCE REGARDING AGRICULTURE INCOME AT ANY STAGE OF ASSESSMENT PROCE EDINGS. THE APPELLANT WAS NEITHER CONFRONTED REGARDING THE BASIS OF ADDITIONS . IF THE APPELLANT WAS GIVEN THE OPPORTUNITY OF BEING HEARD HE COULD HAVE EXPLAIN TH E FACTS PROPERLY IN ITS RIGHT PERSPECTIVE . HOWEVER, THE COPY OF KHASRA GIRDAWARI IS ENCLOSE D AS ANNEXURE-10 IN SUPPORT OF THE CLAIM OF THE AGRICULTURE INCOME. (EMPHASIS PROVIDED) 6.1. CONSIDERING THE EVIDENCES FILED THE CIT(A) CON CLUDED THE ISSUE HOLDING AS UNDER:- 3. I HAVE PERUSED THE SUBMISSIONS MADE BY THE APP ELLANT AND THE FACTS ON RECORD. THE ASSESSEE HAS CLEARLY PROVED THAT HE HA D EARNED AGRICULTURAL INCOME FORM J AND JAMABANDI HAVE BEEN FILED BEFORE ME. NO WHERE HAS THE AO MENTIONED THAT HE HAD SOUGHT DOCUMENTARY EVIDENCE OF EARNING AGRICULTURAL INCOME. HE HAS MERELY STATED THAT THE AO HAD NOT FILED DOCUMENTARY EVIDENCE. NO REFERENCE HAS BEEN MADE TO ANY QUERY MADE BY HIM IN THIS REGARD. THE APPELLANT HAS PROVED THAT HE HAD EARNED AGRICULTURAL RECEIPTS. I, THEREFORE, DELETE THE IMPUGNED ADDITIONS OF RS.1,20,000/-. THE GROUND OF APPEAL IS ALLOWED. 7. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE I TAT ON BOTH THE ISSUES. 5 8. THOUGH THE LD.SR.DR RELIED UPON THE ASSESSMENT O RDER HOWEVER, WAS UNABLE TO SHOW ON WHAT FACTS AND BASIS THE CONCLUSION DRAWN B Y THE CIT(A) WERE INCORRECT. NO CONTRARY FACT OR EVIDENCE HAS BEEN REFERRED TO IN O RDER TO CANVASS A CONTRARY VIEW. IT IS SEEN THAT THE EVIDENCE RELIED UPON TO DELETE THE AD DITIONS ARE RELEVANT AND CORRECT. 8.1. WHEREAS QUA THE FIRST ISSUE THE EVIDENCES ADMI TTEDLY WERE ALL ALONG AVAILABLE TO THE AO AND THE CASH FLOW STATEMENT FILED BEFORE THE CIT(A) WAS MADE REFERRING TO COPY OF THE BANK STATEMENTS ALREADY ON RECORD BEFORE THE AO. THIS FINDING OF FACT ASSERTED IN THE IMPUGNED ORDER HAS ALSO NOT BEEN ASSAILED OR FA ULTED WITH BY THE REVENUE IN THE PRESENT PROCEEDINGS. 8.2. THE EVIDENCE QUA THE SECOND ISSUE IT IS SEEN H AS BEEN RELIED UPON FOR THE FIRST TIME BEFORE THE CIT(A). THE FILING OF FRESH EVIDEN CE BEFORE THE CIT(A), HAS NOT BEEN ASSAILED BY THE REVENUE PRESUMABLY IN THE FACE OF T HE CATEGORIC STAND OF THE ASSESSEE AS RECORDED IN THE IMPUGNED ORDER THAT NO SUCH QUERY WAS RAISED BY THE AO DURING THE ASSESSMENT PROCEEDINGS. THIS STAND, IT IS NOTED H AS ALSO NOT BEEN SOUGHT TO BE UPSET IN THE PRESENT PROCEEDINGS. THE EVIDENCE CONSIDERED F OR DECIDING THE ISSUE ADMITTEDLY IS RELEVANT AND CRUCIAL FOR DETERMINING THE ISSUE. AC CORDINGLY, IN THE ABSENCE OF ANY INFIRMITY HAVING BEEN POINTED OUT IN THE IMPUGNED ORDER NO CASE FOR UPSETTING THE FINDINGS HAS BEEN MADE OUT BY THE REVENUE. 8.3. ACCORDINGLY, IN THE LIGHT OF THE FACTS AND EV IDENCES CONSIDERED BY THE CIT(A) AS DISCUSSED IN DETAIL IN THE EARLIER PART OF THIS ORD ER AND WHEN THEY ARE READ ALONGWITH THE ISSUES RAISED IN THE GROUNDS FILED BY THE REVENUE, I FIND THAT IN THE ABSENCE OF ANY ARGUMENT ASSAILING EITHER THE FACTS ON RECORD OR TH E POSITION OF LAW, I FIND NO INFIRMITY IN THE IMPUGNED ORDER. IN THE ABSENCE OF ANY REBUTT AL ON FACTS THE IMPUGNED ORDER IS UPHELD. 9. IT MAY BE APPROPRIATE TO NOTE THAT AFTER THE CON CLUSION OF THE HEARING OF THE APPEAL, AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE STATING THAT THE ASSESSEE IS SUFFERING FROM CHICKEN GUNIYA AND THUS UNABLE TO ATTEND THE HEARING. SINCE BY THE TIME, IT WAS PLACED ON RECORD THE LD.SR.DR H AD BEEN FULLY HEARD AND THE RECORD STOOD CONSIDERED VIS--VIS THE DEPARTMENTAL GROUNDS . ACCORDINGLY, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE PRESENCE O F THE ASSESSEE WAS FOUND TO BE NOT 6 NECESSARY AND THE ADJOURNMENT WAS REJECTED. BEING SATISFIED BY THE CONCLUSION ARRIVED AT BY THE CIT(A THE SAME IS UPHELD. THE APPEAL OF THE REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2016. SD/- (A. N. MISHRA) (DI VA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29-12-2016. SUJEET/AMIT KUMAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI