Smt Rajni Chauhan, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 362/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5792 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 16-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SARNA
• Keywords: Income from undisclosed sources
• Section: 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO.362(ASR)/2010 ASSESSMENT YEAR:2007-08 PAN :AAJPC2712N SMT. RAJNI CHAUHAN VS. THE INCOME-TAX OFFICER, C/O M/S. M.R. FOREX PVT. LTD. WARD III(3), JALAND HAR. JALANDHAR. (APPELLANT) (RESPONDENT) ASSESSEE BY: SH. TARSEM LAL, DR DEPARTMENT BY: SH. DINESH SARNA, ADV. ORDER PER MEHAR SINGH, AM, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), DATED 26.07.2010, PASSED UNDER SECTION 250( 6) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO IN SHORT THE A CT), FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT WORTHY CIT(A) HAS ERRED IN DISMISSING APPE AL OF ASSESSEE AND HOLDING THAT CASH DEPOSIT AMOUNTING TO RS.25,02 .026/- IN SAVING BANK ACCOUNT OF ASSESSEE, ON ACCOUNT OF SALE S OF TREES OF HER OWN AND HER BROTHER-IN-LAW, REPRESENTS HER OWN INCOME FROM UNDISCLOSED SOURCES. 2. THAT WORTHY CIT(A) HAS IGNORED THE FACT THAT ASSESS EE IS POWER OF ATTORNEY HOLDER OF HER BROTHER-IN-LAW SH. PRITHV I RAJ CHAUHAN AND WHATEVER AMOUNT RECEIVED BY HER FROM SA LE OF 2 TREES BELONGING TO SH. PRITHVI RAJ CHAUHAN WAS DEPO SITED IN SAVING BANK ACCOUNT AND LEARNED ASSESSING OFFICER A ND WORTHY CIT(A) HAS NOT DISPUTED THE INCOME EARNED FROM SALE S OF TREES AMOUNTING TO RS.25,02,026/-. 3. THAT APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND T HE GROUND OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. THE BRIEF AND NEAT FACTS OF THE CASE AS CULLED O UT FROM THE RELEVANT RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL, HAV ING INCOME FROM RENT AND AGRICULTURAL INCOME. ASSESSEE FILED HER RETURN DECL ARING AN INCOME OF RS.64,170/- AND AGRICULTURAL INCOME OF RS.29,05,000 /-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND IN RESPONSE TO THE QUERRIES RAISED BY THE A.O, THE ASSESSEE FILED ALL DOCUMENTS OR INFORM ATION AS REQUIRED. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED HER TO EXPLAIN THE SOURCES OF DEPOSIT IN BANK ACCOUNT. THE ASSESSEE FILED ALL THE DETAILS WITH EVIDENCE PROVING EACH AND EVERY DEPOSIT IN THE BANK ACCOUNT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE ALSO EXPLAINED THAT APART FROM HER AGRICULTURAL LAND, ASSESSEE IS ALSO CULTIVATING LAND OF HER BROT HER-IN-LAW WHO IS SETTLED ABROAD. THIS FACT WAS ALSO VERIFIED AND CONFIRMED BY THE A.O. FROM PERSONAL INSPECTION OF AGRICULTURAL INCOME OF ASSES SEE. HOWEVER, THE AO REFUSED TO ACCEPT THE AGRICULTURAL INCOME OF SH. PR ITHVI RAJ CHAUHAN, BROTHER-IN-LAW OF ASSESSEE STATING THAT PERUSED OF BANK ACCOUNT REVEALS THAT IN THE WITHDRAWAL NO WITHDRAWAL IS SHOWN THAT AMOUN T HAS BEEN PASSED ON TO PRITHVI RAJ CHAUHAN SO CASH DEPOSIT IN BANK ACCOUNT , TREATED AS UNDISCLOSED INCOME AMOUNTING TO RS.25,02,026/- BEING SHARE OF A GRICULTURAL INCOME OF SH. PRITHVI RAJ CHAUHAN. ON APPEAL, THE LD. CIT(A), DISMISSED THE APPEAL OF THE ASSESSEE STATING THAT SINCE NAME OF ASSESSEE DOES NOT FIGURE IN THE AFFIDAVITS GIVEN BY THE PURCHASER OF POPULAR TREES AND NO PART OF CONSIDERATION IS SHOWN TO HAVE BEEN TRANSFERRED TO PRITHVI RAJ CHAUHAN SO 3 HE HELD THAT THE INCOME DECLARED BY THE ASSESSEE AS AGRICULTURAL INCOME IS ASSESSEES OWN INCOME FROM UNDISCLOSED SOURCE. NOW AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS BENCH, 4. IN THE COURSE OF PRESENT APPELLANT PROCEEDINGS, THE LD. COUNSEL FOR THE ASSESSEE AFTER NARRATING THE FACTUAL BACKGROUND OF THE CASE CATEGORICALLY CONTENDED THAT THE ADDITION HAD BEEN MADE, BY THE A O, ON THE BASIS OF BARE ASSERTION AND SURMISES AND NO CORROBORATIVE AND CRE DIBLE MATERIAL AND EVIDENCES WERE BROUGHT ON RECORD, TO SUPPORT SUCH A DDITION. IT WAS CONTENDED THAT THE ADDITION WAS MADE BY THE AO, ON THE SOLE GROUND THAT THE BANK 0703000100208575 MAINTAINED WITH PUNJAB NA TIONAL BANK, DEMONSTRATED THAT IN THE WITHDRAWAL, NO WITHDRAWAL WAS SHOWN THAT THE AMOUNT HAD BEEN PASSED, ON TO SH. PRITHVI RAJ CHAUH AN, IT WAS, FURTHER, CONTENDED THAT THE AO DID NOT ESTABLISH THE FACTUM , BY BRINGING RELEVANT EVIDENCE ON RECORD THAT THE IMPUGNED AMOUNT PERTAIN S TO THE ASSESSEE BEFORE THE SAME IS ADDED AS INCOME FROM UNDISCLOSED SOURC ES. 4.1. THE LD. COUNSEL FOR THE ASSESSEE, FILED A PHOT OCOPY OF THE POWER OF ATTORNEY DATED 28.07.1999, FROM SH. PRITHVI RAJ CHA UHAN S/O SH. RUP LAL , WHICH IS PLACED ON RECORD. 5. THE LD. DR, ON THE OTHER HAND, PLACED RELIANC E ON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE RIV AL SUBMISSIONS, FACT SITUATION OF THE CASE AND OTHER RELEVANT MATERIAL P LACED ON RECORD. THE FACTUM OF POWER OF ATTORNEY HAS BEEN RECORDED BY TH E LD. CIT(A), IN HIS APPELLATE ORDER. THE LD. COUNSEL FOR THE ASSESSEE R EFERRED TO PARA 4.7 OF THE 4 ASSESSMENT ORDER AND ALSO REFERRED TO PARA 2.1. OF THE CIT(A). BOTH THE AO AND LD. CIT(A) ACCEPTED THE VALIDITY OF POWER OF AT TORNEY IN FAVOUR OF THE ASSESSEE. SHRI PRITHVI RAJ CHAUHAN IS BROTHER-IN-LA W OF THE ASSESSEE WHO HAS GIVEN WIDE POWERS IN RESPECT OF HIS LAND WHICH INTE R-ALIA, INCLUDE TO RECEIVE INCOME ON HIS BEHALF. THE LD. CIT(A), HAS RECORDED IN PARA 2 & 3 OF THE IMPUGNED APPELLATE ORDER THAT PERUSAL OF THE POWER OF ATTORNEY SHOWS THAT IT WAS EXECUTED ON 28.07.1999 AND GAVE COMPLETE POWERS TO SMT. RAJNI CHAUHAN TO DEAL WITH HIS LAND IN VILLAGE CHAK GUJRA N. THE POWERS INCLUDE THAT TO SELL THE LAND, MORTGAGE THE LAND, TO GIVE L AND ON LEASE, TO ENGAGE LAWYERS IN CONNECTION WITH THE LAND, TO GROW CROPS ON THE LAND, TO REALIZE THE SALE CONSIDERATION IN CASH OR CHEQUES ETC. THUS, TH ERE IS NO DISPUTE ABOUT THE LAND HOLDING OF SH. PRITHVI RAJ CHAUHAN, WHO GRANTE D POWER OF ATTORNEY TO THE ASSESSEE. THE AO AND THE CIT(A) NEVER DOUBTED T HE VERACITY OF CROP GROWN AND SALE THEREOF. THE AFFIDAVITS OF THE PERSO NS TO WHOM CROP OF POPULAR TREES WAS SOLD WERE FILED BEFORE THE AUTHOR ITY TO SUBSTANTIATE THE SALE OF THE SAID TREES. THE LAND OF THE ASSESSEE AND SH. PRITHVI RAJ CHAUHAN AND OTHER CO-OWNERS OF THE LAND ARE IN CONTIGUITY. THE SUBMISSION FILED BY THE ASSESSEE BEFORE THE AO HAS BEEN REPRODUCED BY THE C IT(A) IN PARA 2.1. , WHICH IS REPRODUCED HEREUNDER: IN ADDITION TO STATEMENT OF FACTS AND GROUND OF APP EAL IT IS FURTHER SUBMITTED AS FOLLOWS: 1. THE ASSESSEE IS AN AGRICULTURIST AND IN HER RETURN FOR ASSTT. YEAR 2007-08 SHE DECLARED NET INCOME OF RS.64,170/- AND ALSO DECLARED AGRICULTURAL INCOME AT RS.29,05,000/-. 2. THAT AT THE TIME OF ASSESSMENT U/S 143(30 LD. AO AS KED TO EXPLAIN THE SOURCE OF DEPOSIT IN HER BANK ACCOUNT A ND LD. AO HAS NOT DRAWN ANY ADVERSE INFERENCE FROM THE DEPOSI T OR WITHDRAWAL FROM HER BANK ACCOUNT EXCEPT THAT AGRICU LTURAL INCOME RECEIVED BY THE ASSESSEE ON BEHALF OF HER B ROTHER-IN- LAW SH. PRITHVI RAJ CHAUHAN, DEPOSITED IN THE SAID BANK 5 ACCOUNT WAS NOT ACCEPTED BY AO ON THE GROUND THAT N O WITHDRAWAL IS SHOWN TO HAVE BEEN PASSED ON TO SH. P RITHVI RAJ CHAUHAN OUT OF SAID ACCOUNT. 3. THAT DURING THE COURSE OF ASSESSMENT IT WAS SUBMITT ED TO THE AO THAT ASSESSEE OWN 25 KANALS OF AGRICULTURAL LAND 14 .175 KANALS AS ON 31.03.2007 10.825 KANALS PURCHASED AFTER 01.0 4.2007 AND SHE ALSO CULTIVATE AGRICULTURAL LAND OF HER BRO THER-IN-LAW MEASURING 87.98 KANALS FROM WHICH DURING THE YEAR U NDER CONSIDERATION ASSESSEE RECEIVED AGRICULTURAL INCOME AMOUNTING TO RS.29,05,000/-. 4. THAT LD. A.O. HIMSELF ALONGWITH THE OTHER A.O. MADE ENQUIRY FROM THE SITE, RECORDED STATEMENT OF THE PERSONS WH O IS LOOKING AFTER THE AGRICULTURL FEEDS AT VILLAGE CHAK GUJRAN, DISTT. HOSHIARPUR. AFTER MAKING ENQUIRY LD. A.O. ACCEPTED THE AGRICULTURAL INCOME BUT HE MADE SAID ADDITION ON TH E ONLY GROUND THAT INCOME EARNED AND RECEIVED BY THE ASSES SEE HAS NOT BEEN PASSED TO SH. PRITHVI RAJ CHAUHAN. 5. SIR, ASSESSE IS POWER OF ATTORNEY HOLDER OF SH. PRI THVI RAJ CHAUHAN, HER BROTHER-IN-LAW AND RECEIVED AGRICULTUR AL INCOME ON BEHALF OF HER BROTHER-IN-LAW WHICH SHE WRONGLY D ECLARED AS HER INCOME. SOURCE OF DEPOSIT IN BANK ACCOUNT IS PR OVED BEYOND ANY DOUBT BECAUSE IN THE OTHER CASES OF ASSESSEE FA MILY LD. AO HAS ACCEPTED THE AGRICULTURAL INCOME DECLARED BY OT HER MEMBER. SIR, IT IS REQUESTED THAT SINCE AGRICULTURAL INCOME RECEIVED BY ASSESSEE ON BEHALF OF HER BROTHER-IN-LAW IS NOT DIS PUTED SO DEPOSIT IN SAVING BANK ACCOUNT, ON ACCOUNT OF AGRIC ULTURAL INCOME MAY KINDLY BE ACCEPTED. 6.1. THE AO OBSERVED THAT THE ASSESSEE SHOWED THE IMPU GNED AGRICULTURAL INCOME AS HIS OWN AGRICULTURAL INCOME IN THE RELEVANT RETURN OF INCOME. HOWEVER, WHEN THE EXPLANATION WAS SOUGHT FR OM THE ASSESSEE, REQUISITE SUBMISSION WAS MADE BEFORE HIM, VIDE LETT ER DATED 11.12.2009., WHICH IS REPRODUCED HEREUNDER: .IT IS SUBMITTED THAT ASSESSEE IS POWER OF ATTOR NEY HOLDER OF SH. PRITHVI RAJ CHAUHAN, HER BROTHER-IN-LAW AND AS PER ATTORNEY OF SH. PRITHVI RAJ CHAUHAN DATED 28..07.1999 ASSESSEE IS H AVING AUTHORITY TO 6 RECEIVE AGRICULTURAL INCOME ON BEHAL OF SH. PRITHVI RAJ AND AS PER SAID ATTORNEY SHE RECEIVED THAT INCOME BUT WRONGLY DECLARED INCOME OF SH. PRITHVI RAJ IN HER RETURN. SIR, THE AGRICULTURAL INCOME OF RS.25,02,026/- AS A SCERTAINED BY YOUR GOODSELF, IS NOT BELONGING TO ASSESSEE BUT SH. PRIT HVI RAJ CHAUHAN. THIS INCOME CANNOT BE TERMED AS MISC. INCOME U/S 68 IN THE HANDS OF THE ASSESSEE AND SH. PRITHVI RAJ. WE HAVE ALREADY F ILED EVIDENCE OF RECEIPT OF SAID AGRICULTURAL INCOME SO SOURCE OF TH E DEPOSIT IN THE BANK ACCOUNT IS PROVED BEYOND ANY DOUBT. SIR, IT IS REQUESTED THAT SINCE THE SOURCE OF DEPOS IT IN BANK ACCOUNT IS PROVED SO NO ADVERSE INFERENCE MAY KINDLY BE DRAWN , BECAUSE ASSESSEE HAS WRONGLY DECLARED AGRICULTURAL INCOME O F SH. PRITHVI RAJ IN HER HANDS. 6.2. IN NUTSHELL, THE IMPUGNED ADDITION HAS BEEN MADE ON THE GROUND THAT AGRICULTURAL INCOME BELONGING TO SH. PRITHVI RAJ CH AUHAN AS APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE, HAS NOT BEEN PASSED O N TO SH. PRITHVI RAJ CHAUHAN. THIS IS THE FOUNDATION WHICH LED TO THE AD DITION OF THE IMPUGNED AMOUNT, AS ASSESSEES UNDISCLOSED INCOME. IN THIS CONTEXT, IT IS IMPERATIVE AND FUNDAMENTAL TO HIGHLIGHT THE EVIDENCE THAT SH. PRITHVI RAJ CHAUHAN, THE BROTHER-IN-LAW OF THE ASSESSEE GRANTED POWER OF ATT ORNEY IN HER FAVOUR AND AS STATED BY THE LD. COUNSEL, FOR THE ASSESSEE, HE I S THE FREQUENT VISITOR TO INDIA. 6.2. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSS ION, WE ARE OF THE CONSIDERED OPINION THAT IN THIS CASE SH. PRITHVI RA J CHAUHAN IS THE KEY WITNESS AND HIS EXAMINATION IS ESSENTIAL TO ASCER TAIN THE VERACITY OF THE CONTENTION OF THE APPELLANT, ON THE ISSUE IN QUESTI ON. ACCORDINGLY, THE ISSUE IS RESTORED TO THE FILE OF THE AO, TO EXAMINE, SH. PRITHVI RAJ CHAUHAN, ON THE ISSUE OF SUCH AGRICULTURAL INCOME, WITH A VIEW TO ESTABLISHING THE VERACITY OF THE ASSESSEES CONTENTION. IN VIEW OF THIS AS ALSO TO MEET THE ENDS OF JUSTICE, THE ISSUE IN QUESTION IS RESTORED TO THE FILE OF TH E AO, WITH A DIRECTION TO 7 DECIDE THE SAME AFRESH, AS DISCUSSED ABOVE, AND IN TERMS OF THE RELEVANT PROVISIONS OF THE ACT, AFTER AFFORDING REASONABLE A T PROPER OPPORTUNITY TO THE ASSESSEE. 3. `IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 10TH JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 10TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:SMT. RAJNI CHAUHAN, JALANHDAR. 2. THE ITO WARD III(3), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ASSR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.