Inder Pal, Nawanshahr V. The Income-tax Officer, Nawanshahr

ITA 356/ASR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9658 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 06-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DINESH SARNA
• Keywords: Unexplained investment; Bonafide belief; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.356 & 357(ASR)/2015 ASSESSMENT YEARS:2005-06 & 2006-07 PAN: ACPPP3522K SH. INDER PAL, VS. INCOME TAX OFFICER, DANA MANDI, NAWANSHAHAR. NAWANSHAHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. DINESH SARNA, ADVOCATE RESPONDENT BY: SH. RAHUL DHAWAN, DR DATE OF HEARING: 20/07/2016 DATE OF PRONOUNCEMENT: 01/08/2016 ORDER PER A.D. JAIN, JM: THESE ARE THE ASSESSEES APPEALS FOR THE ASSESSMEN T YEARS 2005-06 & 2006-07, AGAINST THE SEPARATE ORDERS, EACH DATED 18.05.2015, PASSED BY THE LD. CIT(A)-1, JALANDHAR. AS THE ISSUE INVOLV ED IN BOTH THE APPEALS IS COMMON, THEY ARE BEING DISPOSED OF BY THIS COMPO SITE ORDER, FOR THE SAKE OF CONVENIENCE. THE ASSESSEE HAS RAISED THE F OLLOWING GROUNDS OF APPEAL IN ITA NO.356(ASR)/2015, WHICH ARE SIMILAR I N ITA NO.357(ASR)/2015: ITA NOS.356 & 357/ASR/2015 A.YS. 2005-06 & 2006-07 2 1. THAT THE ORDER OF THE WORTHY CIT(A) DATED 18.05 .2015 IS AGAINST THE LAW AND FACTS OF THIS CASE. 2. THAT THE WORTHY CIT(A), JALANDHAR WAS ERRED IN L AW BY UPHOLDING THE ADDITION OF RS.5.00 LACS IN HAND OF A SSESSEE WITHOUT APPRECIATING THE FACT AND STATEMENT OF SH. LALIT KUMAR WHEREIN HE HIMSELF ACCEPTED THE CONTRIBUTION MADE BY HIM AMOUNTING TO RS.16 LACS TOWARDS THE PURCHASE OF LAND. 3. THAT THE LD. A.O. AND WORTHY CIT(A), JALANDHAR H AS NOT DOUBTED ABOUT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION OF SH. LALIT DUGGAL. 4. THAT THE LD. A.O. AND WORTHY CIT(A), JALANDHAR H AS ERRED IN LAW BY ACCEPTING PART STATEMENT OF SH. LALIT DUGGAL AND DISBELIEVE THE BALANCE STATEMENT WITHOUT ANY REASON . 2. THE FACTS OF THE CASE ARE THAT THE ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED AT AN INCOME OF RS.5,75,000/ - AGAINST THE RETURNED INCOME OF RS.75,000/-. DURING ASSESSMENT P ROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF PURCHA SE OF PROPERTY, IN RESPONSE TO WHICH, THE ASSESSEE STATED THAT HAD NOT MADE ANY INVESTMENT FROM HIS OWN FUNDS AND THAT THE ASSESSEE MADE INVESTMENT AMOUNTING TO 20 LACS BY BORROWING THE FUNDS AMOUNTI NG TO RS.16.00 LACS FROM SH. LALIT KUMAR AND RS.4.00 LACS FROM SH. AMRI K SINGH. THE AO, IGNORING THE STATEMENT OF THE ASSESSEE, MADE AN ADD ITION OF RS.8,32,500/- IN THE HANDS OF THE ASSESSEE ( I.E. R S.5,00,000/- FOR THE A.Y. 2005-06 AND RS.3,32,500/- FOR THE A.Y. 2006-07 ), BY STATING THAT SH. LALIT KUMAR SOLD THE LAND ON THE BASIS OF POWER OF ATTORNEY OF SMT. BHUPINDER KAUR, SO THE CONSIDERATION SO RECEIVED BE LONGED TO SMT. BHUPINDER KAUR AND NOT TO SH. LALIT KUMAR. ITA NOS.356 & 357/ASR/2015 A.YS. 2005-06 & 2006-07 3 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION O F THE A.O. OBSERVING AS FOLLOWS: 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSES SING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS W ELL AS REMAND REPORT. I HAVE ALSO CONSIDERED THE WRITTEN S UBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DATED 14.08.2014 AND HIS COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFF ICER. I HAVE FURTHER CONSIDERED VARIOUS JUDICIAL PRONOUNCEM ENTS RELIED UPON BY THE ASSESSEE WHICH FIND MENTIONS IN THE WRITTEN SUBMISSIONS/COUNTER COMMENTS AND OTHER MATE RIAL BROUGHT ON RECORD. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM ALSO OF THE OPINION THAT THE ASSE SSEE COULD NOT EXPLAIN THE SOURCE OF RS.5,00,000/- STATED TO B E RECEIVED BY HIM FROM SH. LALIT KUMAR DUGGAL. THE ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOT ICED THAT THE SH. LALIT KUMAR HAS SOLD THE PROPERTY ON 16.03. 2004 BELONGING TO SMT. BHUPINDER KAUR AS A GENERAL POWER OF ATTORNEY HOLDER AND AS SUCH THE MONEY RECEIVED BY H IM ON ACCOUNT OF SALE CONSIDERATION MUST BE BELONGING TO SMT. BHUPINDER KAUR AND NOT TO SH. LATIT KUMAR. WHEN CON FRONTED WITH THIS FACT, SH. LALIT KUMAR FAILED TO GIVE ANY SATISFACTORY EXPLANATION WHEN HIS STATEMENT WAS RECORDED. HE STA TED ONLY THAT HE DOES NOT REMEMBER ANYTHING AND HE IS NOT IN A POSITION TO SAY ANYTHING. FROM THE STATEMENT OF SH. LALIT KUMAR, IT IS CRYSTAL CLEAR THAT THE SALE CONSIDERAT ION RECEIVED BY HIM ON 16.03.2004 BY WAY OF SALE PROCEEDS OF PRO PERTY WAS NOT BELONGING TO HIM BUT TO SMT. BHUPINDER KAUR . WHEN SHRI LALIT KUMAR WAS NOT HAVING ANY MONEY OF HIS OW N HOW HE CAN MAKE ADVANCE TO THE ASSESSEE DURING THE MONT HS OF MARCH, 2005 AND APRIL, 2005. MOREOVER, THE ASSESSIN G OFFICER IS VERY FAIR IN ACCEPTING THE INVESTMENT IN PROPERT Y TO THE EXTENT OF RS.L 1,67,500/- FROM EXPLAINED SOURCES WH ICH INCLUDES AN AMOUNT OF RS.7,67,500/- RECEIVED BY HIM FROM SHRI LALIT KUMAR DUGGAL. THE JUDICIAL PRONOUNCEMENT S RELIED UPON BY THE ASSESSEE HAVE ENTIRELY DISTINGUISHABLE FACTS FROM THE FACTS OF THE CASE OF THE ASSESSEE. THE SUBMISSI ON OF THE LD. AR OF THE ASSESSEE THAT THE STATEMENT OF SH. LA LIT KUMAR SHOULD NOT HAVE ACCEPTED IN PART BY THE ASSESSING O FFICER IS NOT BASED ON ANY REASONING. THE STATEMENT HAS BEEN ACCEPTED IN PART ONLY WHEN SHRI LALIT KUMAR HIMSELF COULD NO T EXPLAIN THE SOURCE OF RS.8,32,500/-. IN VIEW OF THESE FACTS , I AM OF THE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFF ICER IS JUSTIFIED AND DO NOT CALL FOR ANY INTERFERENCE. ITA NOS.356 & 357/ASR/2015 A.YS. 2005-06 & 2006-07 4 5.5 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICER IS FULLY JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF RS.5,00,000/- TO THE RETURNED INCOME OF THE ASSESSE E ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE O F IMMOVABLE PROPERTY. THE ADDITION OF RS.5,00,000/- M ADE BY THE ASSESSING OFFICER IS, THEREFORE, CONFIRMED. IN THE RESULT, - GROUNDS NO. 1 AND 2 OF APPEAL TAKEN BY THE ASSESSEE ARE DISMISSED. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED AN AP PLICATION UNDER RULE 29 OF THE ITAT RULES, 1963 FOR PRODUCTION OF A DDITIONAL EVIDENCE, WHICH READS AS UNDER: APPLICATION U/R 29 OF ITAT RULES, 1963 FOR PRODUCTION OF ADDITION EVIDENCE IN THE CASE OF SH. INDER PAL, DANA MANDI, NAWANSHAHR ASSTT. YEAR 2005-06 APPEAL NO. 356/ASR/2015 RESPECTED SIR, IN CONNECTION WITH ABOVE IT IS SUBMITTED THAT ASSES SMENT IN THE CASE OF ASSESSEE WAS COMPLETED AT AN INCOME OF RS. 5,75,000/- AGAINST THE RETURN INCOME OF RS. 75,000/ -. DURING THE COURSE OF ASSESSMENT PROCEEDING ASSESSEE WAS AS KED FOR THE SOURCES OF PURCHASE OF PROPERTY, IN RESPONSE TO WHICH ASSESSEE STATED THAT HE HAS NOT MADE ANY INVESTMENT FROM HIS OWN FUNDS. ASSESSEE MADE INVESTMENT AMOUNTING T O RS. 20.00 LACS BY BORROWING THE FUNDS AMOUNTING TO RS. 16.00 LACS FROM SH. LALIT KUMAR AND RS. 4.00 LACS FROM S. AMRIK SINGH. SIR, DURING THE COURSE OF ASSESSMENT PROCEEDING ASS ESSEE FILED COPY OF REGISTRATION DEED OF PROPERTY SOLD BY SH. LALIT KUMAR, ASSESSEE WAS UNDER THE IMPRESSION THAT THIS IS A SUFFICIENT PROOF OF OWNERSHIP OF LAND OF SH. LALIT KUMAR. ASSESSEE DID NOT FILE POWER OF ATTORNEY AND AGREEME NT AT THE TIME OF ASSESSMENT AS HE WAS UNDER BONAFIDE BELIEF THAT REGISTRATION DEED SO FILED IS SUFFICIENT EVIDENCE O F HIS OWING THE MONEY. SIR, NEITHER DURING THE COURSE OF ASSESSMENT THE LD . ASSESSING OFFICER NOR DURING THE APPELLATE PROCEEDING THE WOR THY CIT(A), ITA NOS.356 & 357/ASR/2015 A.YS. 2005-06 & 2006-07 5 JALANDHAR ASKED FOR THE POWER OF ATTORNEY AND AGREE MENT. THE LD. ASSESSING OFFICER MADE ADDITION ONLY ON THE BASIS THAT SH. LALIT KUMAR SOLD PROPERTY ON POWER OF ATTO RNEY BASIS SO, AMOUNT RECEIVED AGAINST SAID SALE NOT BELONGS T O HIM AND THE WORTHY CIT(A), JALANDHAR HAS UPHELD THE DECISIO N OF THE LD. ASSESSING OFFICER WITHOUT APPRECIATING THE FACT S OF THIS CASE THAT SH. LALIT KUMAR WAS THE REAL OWNER OF THE SAID PROPERTY ON THE BASIS OF AGREEMENT & POWER OF ATTOR NEY. SIR, IT IS STATED THAT CONSIDERATION SO RECEIVED AG AINST THE SAID SALE BELONGS TO SH. LALIT KUMAR NOT TO SMT. BHUPIND ER KAUR AS SMT. BHUPINDER KAUR MADE IRREVOCABLE POWER OF ATTOR NEY AND ALSO ENTERED INTO FULL PAYMENT AGREEMENT WITH SH. L ALIT KUMAR FOR SALE OF SAID LAND FOR A CONSIDERATION OF RS. 5. 50 LACS ON 28.03.2000 AND TO PROVE THE SAME WE ARE PRODUCING POWER OF ATTORNEY I.E. IRREVOCABLE AND COPY OF FULL PAYME NT AGREEMENT BETWEEN SMT. BHUPINDER KAUR AND SH. LALIT KUMAR AS ADDITIONAL EVIDENCE AS REQUIRED BY THE HONBLE BENCH. SIR, IT IS REQUESTED THAT IN THE INTEREST OF NATURA L JUSTICE, THE ADDITIONAL EVIDENCE IN THE SHAPE OF POWER OF ATTORN EY AND AGREEMENT PRODUCED BEFORE YOUR HONOUR MAY KINDLY BE ENTERTAINED. 5. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ADDITIONAL EV IDENCE SUBMITTED BY THE ASSESSEE BEFORE US GOES TO THE ROOT OF THE MATT ER AND NEEDS TO BE LOOKED INTO BY THE LD. CIT(A). ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE DEEM IT APPROPRIATE TO REMIT THE MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE THE MATTER AFRESH AFTER TAKING INTO CONSIDER ATION, THE AFORESAID ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE, IN A CCORDANCE WITH LAW. ITA NOS.356 & 357/ASR/2015 A.YS. 2005-06 & 2006-07 6 THE ASSESSEE SHALL, NO DOUBT, COOPERATE IN THE FRES H PROCEEDINGS BEFORE THE A.O. 7. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/08/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: /08/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. INDER PAL, NAWANSHAHAR. 2. THE ITO, NAWANSHAHAR 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.