Sh. Paramjit Singh, Patiala V. CIT, Patiala

ITA 388/CHANDI/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9882 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.388/CHD/2014 (ASSESSMENT YEAR : 2009-10) SH.PARAMJIT SINGH, VS. THE C.I.T., S/O SH.HARBANS SINGH, PATIALA. MARKET COMMITTEE, BHADSON, TEHSIL NABHA, DISTT. PATIALA. PAN: ABNPS3684C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH CAJLA RESPONDENT BY : SHRI MANOJ MISHRA, DR DATE OF HEARING : 27.04.2016 DATE OF PRONOUNCEMENT : 16.06.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX, PATIALA DATED 28.1.2014, RELATING TO ASSESSMENT YEA R 2009-10, PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSM ENT UNDER SECTION 143(3) OF THE ACT WAS MADE BY THE ASS ESSING OFFICER FOR THE RELEVANT ASSESSMENT YEAR, AS PER HI S ORDER 2 DATED 11.11.2011 IN WHICH THE RETURNED INCOME OF RS.1,74,450/- WAS ACCEPTED. 3. THE ASSESSEE WAS ISSUED NOTICE UNDER SECTION 263 OF THE ACT DATED 11.12.2013. THE VIEW OF THE COMMISSIONER OF INCOME TAX WAS THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSEE W ITH REGARD TO CASH DEPOSIT IN BANK ACCOUNT MAINTAINED W ITH HDFC BANK WAS THE ADVANCE MONEY RECEIVED IN PURSUAN CE TO AGREEMENT DATED 4.6.2008 TO SELL THE AGRICULTURA L LAND. THE AGREEMENT WAS BETWEEN THE SELLERS SHRI HARBANS SINGH, AMRIK SINGH AND PARAMJEET SINGH, THE ASSESSE E AND SHRI GURMUKH SINGH, LAKHVIR SINGH, AVTAR SINGH, GURCHARAN SINGH AND SATNAM SINGH. AS PER THIS AGREEMENT TO SELL THE SELLERS (INCLUDING ASSESSEE) RECEIVED AN AMOUNT OF RS.19 LACS AS ADVANCE MONEY. A COPY O F SALE DEED DATED 7.5.2010 WAS ALSO FILED BY THE ASSE SSEE BEFORE THE ASSESSING OFFICER, AS PER WHICH THE LAND WAS SOLD TO SHRI UDIT GHAI S/O SHRI ANIL GHAI, R/O FRIE NDS COLONY, KHANNA FOR A CONSIDERATION OF RS.33 LACS. THE COMMISSIONER OF INCOME TAX NOTED FROM THE RECORD OF THE ASSESSING OFFICER THAT THE ASSESSEE AND HIS BROTHER SHRI AMRIK SINGH EXECUTED THE SALE DEED WITH SHRI UDIIT GHAI AND THE ASSESSEE ALSO RECEIVED AN AMOUNT OF RS.33 L ACS VIDE BANK DRAFT NO.014406 AND 014407 DATED 6.5.2010 AMOUNTING TO RS.16,50,000/- EACH IN FAVOUR OF THE ASSESSEE AND HIS BROTHER RESPECTIVELY. AS PER THIS SALE DEED, NO ADVANCE MONEY WAS RECEIVED FROM THE BUYER. 3 FROM THESE FACTS, THE COMMISSIONER OF INCOME TAX OBSERVED THAT THE SALE TO PERSONS OTHER THAN THOSE WHO WERE MENTIONED IN THE AGREEMENT TO SELL SHOWS THAT THE CLAIM OF THE ASSESSEE THAT THE CASH DEPOSIT OF RS.18,50,000/- WAS SOURCED FROM THE ADVANCE MONEY RECEIVED ON SALE OF LAND AS PER THE AGREEMENT TO SE LL IS NOT TENABLE. HE WAS OF THE VIEW THAT THE ASSESSING OFF ICER DID NOT APPLY HIS MIND TO THE FACT AVAILABLE ON RECORD WHILE ACCEPTING THE CLAIM OF THE ASSESSEE REGARDING THE C ASH DEPOSIT OF RS.18,50,000/- IN THE BANK ACCOUNT AS PE R THE AGREEMENT TO SELL DATED 4.6.2008, IN VIEW OF THE FA CT THAT CASH WAS DEPOSITED AS ON 21.7.2008 I.E. AFTER A GAP OF ONE MONTH AND 18 DAYS THAT TOO IN THE NAME OF ONLY ONE CO- SELLER, I.E. THE ASSESSEE. IN THIS BACKGROUND, THE COMMISSIONER OF INCOME TAX FORMED A VIEW THAT THE C ASH DEPOSIT WAS NOT SATISFACTORILY EXPLAINED. 4. IN REPLY TO THE COMMISSIONER OF INCOME TAX, IT WAS STATED THAT THE AGREEMENT TO SELL DATED 4.6.200 8 SUBSEQUENTLY GOT CANCELLED AS ON 18.8.2008. THE FA CTS OF THE CASE WERE DULY VERIFIED BY THE ASSESSING OFFICE R AS PER THE DOCUMENTS PRODUCED BEFORE HIM DURING THE COURSE OF ASSESSMENT. THE ASSESSING OFFICER HAS ACCEPTED ASSE SSEES VERSION AFTER PROPER APPLICATION OF MIND AND CONSID ERING THE RELEVANT FACTS. THE JURISDICTION OF THE COMMIS SIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT WAS ALSO CHALLENGED AND RELIANCE WAS PLACED ON A NUMBER OF JUDGMENTS. 4 5. THE COMMISSIONER OF INCOME TAX DID NOT ACCEPT THE VERSION OF THE ASSESSEE AND AFTER CONSIDERING T HE REPLY HELD THE ORDER OF THE ASSESSING OFFICER TO BE ERRON EOUS IN AS MUCH AS PREJUDICIAL TO THE INTEREST OF THE REVEN UE AND ACCORDINGLY SET ASIDE THE ORDER OF THE ASSESSING OF FICER GIVING HIM DIRECTION TO FRAME A FRESH ASSESSMENT IN RESPECT OF CASH DEPOSITS OF RS.18,50,000/- IN ASSES SEES BANK ACCOUNT. 6. AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPEAL, RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX PATIALA IS BAD IN LAW AND AGAINST FACTS OF THE CASE . 2. THAT THE LD. COMMISSIONER OF INCOME TAX PATIALA IS NOT JUSTIFIED IN SETTING ASIDE THE ORDER U/S 263 OF THE INCOME TAX ACT PASSED BY THE A.O. NABHA. 3. THAT THE LD. COMMISSIONER OF INCOME TAX PATIALA IS ERRED IN TERMING THE ORDER PASSED BY THE A.O . AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. WHILE DOING SO HE FAILED TO APPRECIATE THE FACT THAT ORDER WAS PASSED BY THE A.O. AFTER PROPER APPLICATION OF HIS MIND. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR DELE TE ANY OF THE GROUND (S) OF APPEAL BEFORE IT IS FINALL Y HEARD. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INC OME TAX. HE INVITED OUR ATTENTION TO THE PAPER BOOK IN WHICH 5 THE COPY OF CANCELLATION DEED DATED 21.7.2008 WAS F ILED TO SHOW THAT THE ORIGINAL AGREEMENT TO SELL WAS CANCEL LED THROUGH THIS CANCELLATION DEED AND THE AMOUNT OF BI ANA WAS PAID BACK TO THE INTENTED PURCHASER. A COPY OF BANK ACCOUNT OF THE ASSESSEE WAS ALSO FILED TO SHOW THAT THIS AMOUNT WAS PAID BACK IN CASH BY WITHDRAWING THE AMO UNT FROM THE BANK ACCOUNT OF THE ASSESSEE. IN THIS WAY , IT WAS STATED THAT THE SOURCE OF DEPOSITS IN BANK WAS SATISFACTORILY EXPLAINED. ON THE LEGALITY OF SECTI ON 263 OF THE ACT, HE ARGUED THAT THE ISSUE IN QUESTION WAS DISCUSSED AT LENGTH DURING THE ASSESSMENT PROCEEDIN GS. THEREFORE, THE COMMISSIONER OF INCOME TAX HAD NO JURISDICTION TO REASSESS THE SAME IN THE GUISE OF S ECTION 263 OF THE ACT. 8. THE LEARNED D.R. RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME TAX. 9. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. DURING THE COURSE OF ASSESSMENT WHEN ASKED ABOUT TH E SOURCE OF RS.18,50,000/- IN THE BANK ACCOUNT OF THE ASSESSEE, THE EXPLANATION OF THE ASSESSEE WAS THAT IT WAS THE ADVANCE MONEY RECEIVED IN PURSUANCE OF AN AGREE MENT DATED 4..6.2006 TO SELL THE AGRICULTURAL LAND AND T HE AGREEMENT WAS ENTERED INTO BETWEEN THE SELLERS SHRI HARBANS SINGH, AMRIK SINGH AND PARAMJEET SINGH, THE ASSESSEE AND THE PURCHASER SHRI GURMUKH SINGH, LAKH VIR 6 SINGH, AVTAR SINGH, GURCHARAN SINGH AND SATNAM SING H. AS PER THIS AGREEMENT TO SELL, AN AMOUNT OF RS.19 L ACS WAS RECEIVED AS ADVANCE MONEY IN LIEU OF LAND. A COPY OF DULY EXECUTED SALE DEED DATED 7.5.2010 WAS ALSO PLACED O N RECORD, AS PER WHICH THE LAND WAS SOLD TO SHRI UDIT GHAI FOR A CONSIDERATION OF RS.33 LACS. THIS AMOUNT WAS RECEIVED AS PER BANK DRAFT NO.014406 AND 014407 DAT ED 6.5.2010 IN THE NAME OF THE ASSESSEE AND HIS BROTHE R RESPECTIVELY. IT IS TO BE NOTICED THAT AS PER THE SALLE DEED THE BUYERS ARE NOT THE SAME, WITH WHOM THE AGREEMEN T TO SELL WAS ENTERED INTO AND ALSO IN THE SALE DEED, TH ERE WAS NO MENTION OF ADVANCE MONEY OF RS.19 LACS AS MENTIO NED IN THE AGREEMENT TO SELL. THIS IS A FACT ON RECORD THAT BOTH THE AGREEMENT TO SELL AS WELL AS SALE DEED WER E THERE ON RECORD OF THE ASSESSING OFFICER IN ORIGINAL PROC EEDINGS UNDER SECTION 143(3) OF THE ACT. THE APPREHENSION OF THE COMMISSIONER OF INCOME TAX STEMS FROM THE FACT OF DISCREPANCIES NOTICED BETWEEN THE AGREEMENT TO SELL AND THE REGISTERED SALE DEED, I.E. THE ULTIMATE BUYER W AS DIFFERENT AND ALSO THERE WAS NO MENTION OF BIANA IN THE SALE DEED. FURTHER, THE COMMISSIONER OF INCOME TAX ALSO NOTICED A GAP OF ONE MO NTH AND 18 DAYS BETWEEN THE DATE OF BIANA AND DEPOSIT OF CASH. NO OTHER DOCUMENT IN THIS REGARD WAS THERE IN THE RECORD OF THE ASSESSING OFF ICER. HOWEVER, ON A REPLY SUBMITTED BEFORE THE COMMISSION ER OF INCOME TAX IN PROCEEDINGS UNDER SECTION 263 OF THE ACT, IT WAS CLARIFIED BY THE ASSESSEE THAT ORIGINALLY THE A GREEMENT TO SELL WAS ENTERED INTO BETWEEN THE ASSESSEE AND H IS 7 BROTHER AND FIVE INDIVIDUALS, NAMELY SHRI GURMUKH S INGH, LAKHVIR SINGH, AVTAR SINGH, GURCHARAN SINGH AND SAT NAM SINGH. HOWEVER, THIS AGREEMENT WAS GOT CANCELLED A S ON 18.8.2008. A COPY OF CANCELLATION DEED WAS DATED 18.8.2008 WAS FILED BEFORE THE COMMISSIONER OF INCO ME TAX. COPY OF THE BANK ACCOUNT OF THE ASSESSEE FROM WHERE THIS AMOUNT OF BIANA REFUNDED AS CANCELLATION OF AGREEMENT, WAS ALSO FILED BEFORE THE COMMISSIONER O F INCOME TAX. WE OBSERVE FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX THAT HE HAS OBJECTED TO THE FACT THAT ONLY A PHOTOCOPY OF CANCELLATION DEED HAS BEEN FILED BEFORE HIM, WHICH HAS NO VALIDITY WITHOUT THE ORIGINAL. NO QUERY RAISED BY THE COMMISSIONER OF I NCOME TAX IN PROCEEDINGS UNDER SECTION 263 OF THE ACT WAS BROUGHT TO OUR NOTICE. IN THIS VIEW, WE DO NOT APP RECIATE THE WAY THE SAID EVIDENCES BEEN DISREGARDED BY THE COMMISSIONER OF INCOME TAX. HE COULD HAVE GONE AHE AD AND ASKED THE ASSESSEE TO PRODUCE THE ORIGINAL CANCELLATION DEED. THE POSITION EMERGING IN SUCH S CENARIO IS THAT EVEN IF BEFORE THE ASSESSING OFFICER IN PRO CEEDINGS UNDER SECTION 143(3), THE CANCELLATION DEED WAS NOT BEFORE HIM, THE SAME IN PHOTOCOPY WAS PRODUCED BEFORE THE COMMISSIONER OF INCOME TAX AND FURTHER CORROBORATED BY THE COPY OF BANK ACCOUNT OF THE ASSESSEE SHOWING TH E MONEY COMING BACK. THEREFORE, WE DO NOT AGREE WITH THE VIEW OF THE COMMISSIONER OF INCOME TAX THAT THERE W AS SOME ERROR IN THE ORDER OF THE ASSESSING OFFICER, M ORE SO, NO PREJUDICE TO THE REVENUE. FROM THE RECORD OF TH E 8 ASSESSING OFFICER AS BROUGHT TO OUR NOTICE, THE ONL Y DOCUMENT MISSING IS THE CANCELLATION DEED WHICH COMPLETES THE TRAIL OF EVENTS. THE ASSESSING OFFIC ER IN HIS ORDER, IN VERY CLEAR TERMS HAS STATED THE FACT OF V ERIFYING THE BANK DEPOSITS. IN VIEW OF THIS, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER. THE COMMISSIONER OF INCOME TAX WAS NOT RIGHT IN INVOKIN G THE PROVISIONS OF SECTION 263 OF THE ACT. THEREFORE, T HE ORDER OF THE COMMISSIONER OF INCOME TAX MADE UNDER SECTIO N 263 OF THE ACT IS HEREBY QUASHED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF JUNE, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 16 TH JUNE, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH