SHRI KULDIP SINGH S/O SHRI PARKASH SINGH, SAHEED BHAGAT SINGH NAGAR V. INCOME TAX OFFICER , NAWANSHAHAR

ITA 374/ASR/2019

AI Insights

The case revolves around the penalty imposed on Sh. Kuldip Singh by the Income Tax Officer, Nawanshahr, for alleged unexplained cash deposits in his bank account amounting to Rs. 3,50,000 during the assessment year 2010-11. The Tribunal examined whether these deposits were indeed unexplained and if the penalty under section 271(1)(c) of the Income Tax Act was justified. The assessee, an agriculturist and LIC agent, argued that the deposits were made by clients for purchasing LIC policies. The Tribunal found that the lower authorities did not adequately verify the connection between the deposits and the insurance policies, leading to an incorrect assumption of unexplained investment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114600 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-05-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 19-05-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 374/Asr/2019 Assessment Year: 2010-11 Sh. Kuldip Singh S/o Sh. Parkash Singh, VPO Bazipur, Distt. SBS Nagar-144 517 [PAN: BXLPS 9675N] (Appellant) V. Income Tax Officer, Nawanshahr (Respondent) Appellant by Sh. Gaurav Dhall, CA Respondent by Dr. Vedanshu Tripathi, Sr. DR Date of Hearing : 25.05.2023 Date of Pronouncement : 06.06.2023 ORDER Per Dr. M. L. Meena, AM: The captioned appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-1, Jalandhar dated 28.12.2018 in respect of AY 2010-11 challenging therein levy of penalty u/s I.T.A. No. 374/Asr/2019 Kuldip Singh v. ITO 2 271(1)(c) of the Income Tax Act, 1961 on account of unexplained cash deposit in bank. 2. At the outset, the ld. counsel for the assessee has submitted that the appellant assessee is an agriculturist. In the quantum appeal, the ld. CIT(A) has given direction to the AO as regards the addition of Rs.3,50,000/- made on account of unexplained investment with M/s Bajaj Allianz Insurance Co. Ltd. that the AO should verify the amount of investment of Rs.3,50,000/- deposited on 27.09.2009 and 09.09.2009 in its bank account as it has been shown transfer to Bajaj Allianz LIC was whether against these amounts Insurance Policies has been issued in the name of said person. 3. While giving appeal effect to the order of the ld. CIT(A), the ld. AO was although satisfied with the explanation of the assessee that the deposits were made by Ms. Amandeep Kaur and Sh. Angrej Singh. However, he was not convinced with the explanation whether the policies issued in these names by M/s Bajaj Allianz Insurance Co. The ld. CIT(A) has held that the assessee was an agent of M/s Bajaj Allianz LIC and he has a running account with M/s Allianz. However, the assessee has failed to establish the news to the effect that Ms. Amandeep Kaur and Sh. Angrej I.T.A. No. 374/Asr/2019 Kuldip Singh v. ITO 3 Singh were the beneficiary of policies who have deposited Rs.3,50,000/- in the bank account of the assessee. The ld. AR argued that Ms.. Amandeep Kaur and Sh. Angrej Singh had deposited the disputed cash in the bank account of the appellant Sh. Kuldip Singh, LIC agent for the purpose of investment in LIC policies. The ld. CIT(A) has further noted that on a perusal of the bank account along with the statement of M/s Bajaj Allianz. It is fairly ascertained that the assessee was regularly making deposits with M/s Bajaj Allianz, as evident from the copy of the bank statement of the alleged Bank Account No. 665010100006897 for the period under consideration from 10.04.2009 to 31.03.2010 which is reproduced as under: I.T.A. No. 374/Asr/2019 Kuldip Singh v. ITO 4 I.T.A. No. 374/Asr/2019 Kuldip Singh v. ITO 5 4. From the above, it is evident that the amount of Rs.2,00,000/- was deposited by Ms. Amandeep Kaur in two parts with a break up of Rs.1,00,000/- on 27.08.2009 and 09.09.2009 respectively and similarly the amount of Rs.1,50,000/- was deposited by Sh. Angrej Singh Sandhu on 09.09.2009 which has been transferred to Bajaj Allianz LIC on 09.09.2009. Thus, the sources of the disputed amount of Rs.3,50,000/- stand explained from the bank statement as being deposited by Ms. Amandeep Kaur and Sh. Angrej Singh Sandhu. In our view, the AO and the ld. CIT(A) ought to have verified from the M/s Bajaj Allianz LIC the fact whether the policies were issued towards the said amount deposited to its account or should have verified from Ms. Amandeep Kaur and Sh. Angrej Singh Sandhu who deposited the amount in the appellants bank account. Meaning thereby the allegations of the authorities below that the assessee have failed to related to Ms. Amandeep Kaur and Sh. Angrej Singh were the beneficiary of the policies by whom Rs.3,50,000/- was deposited in the bank account of the assessee to hold that the said amount is unexplained investment is not justified. In view of the matter, the source of cash deposit stand explained from the bank statement itself as above, being deposited by the Ms. Amandeep Kaur and Sh. Angrej Singh and the same cannot be hold to be unexplained investment based on presumption and assumption in the I.T.A. No. 374/Asr/2019 Kuldip Singh v. ITO 6 absence of the corroborative evidences to disprove the documentary evidences available on record. The ld. DR has failed to rebut the contention of ld. DR on the source of the cash deposit being investment of third parties in M/s Bajaj Allianz. Thus, it is apparently clear that there was no concealment of income by the appellant assessee. Accordingly, we hold that the order of ld. CIT(A) is infirm and perverse to the facts on the record in confirming the levy of penalty u/s 271(1)(c) of the Act. 5. In the above view, we accept the grievance of the assessee as genuine considering the peculiar facts of the case. We, therefore, quashed the impugned order and levy of such, the penalty u/s 271(1)(c) of Rs.108,150/- is deleted. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 06.06.2023 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr./P.S.* Copy of the order forwarded to: (1)The Appellant (2) The Respondent I.T.A. No. 374/Asr/2019 Kuldip Singh v. ITO 7 (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order