S. Sarwan Singh C/o. V.P. Vijh & Co, Jalandhar V. The Income-tax Officer, Jalandhar

ITA 448/ASR/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95058 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Additional evidence
• Section: 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO. 448(ASR)/2011 ASSESSMENT YEAR: 2008-09 PAN: ATWPS3911K SH. SARWAN SINGH, H. NO. 1003, LAMBA PIND, CHACK HUSSAINA, JALANDHAR. VS. THE INCOME TAX OFFICER, WARD-2(2), JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SANDEEP VIJH, (C.A) RESPONDENT BY: SH. TARSEM LAL, (DR) DATE OF HEARING: 0 9.11.2015 DATE OF PRONOUNCEM ENT: 27.11.2015 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 19.07.2011 FOR ASST. YEAR 2008-09. THE AMENDE D GROUND OF APPEAL TAKEN BY THE ASSESSEE ARE REPRODUCED BELOW. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE OF THE LEANED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRE D IN UPHOLDING THE ORDER FRAMING ASSESSMENT U/S 143(3). THE VARIOUS IRREGULARITIES POINTED OUT WHILE MAKING ADDITION HA VE NOT BEEN APPRECIATED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN CONFIRMING THE ADDITION OF RS.30,58,000/- IN RESPEC T OF THE CASH DEPOSITS IN THE BANK ACCOUNT. THE EXPLANATION GIVEN AND THE DEFECTS IN THE STATEMENT OF SH. DAVINDER SINGH HAVE NOT BEEN APPRECIATED AND CONCLUSION HAS BEEN DRAWN AGAINST T HE ASSESSEE MAINLY ON PRESUMPTIONS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ERRED IN NOT ALLOWING THE DE DUCTION U/S 54B ITA NO. 448(ASR)/2011 ASST. YEAR 2008-09 2 WHICH WAS COVERED BY THE MAIN GROUND OF APPEAL. IN ANY CASE THE ASSESSEE IS ELIGIBLE TO DEDUCTION U/S 54B. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED ASSESSING OFFICER, HAS ERRED IN UPHOLDING T HE ACTION OF THE ASSESSING OFFICER WHEREBY AGRICULTURAL INCOME TO TH E EXTENT OF RS.50,000/- WAS TREATED AS BUSINESS INCOME. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPE ALS), HAS ERRED IN SUSTAINING THE LEVY OF INTEREST U/S 234B. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DECLARED THE RETURN OF INCOME AMOUNTING TO RS.64,260/- WHEREIN THE ASSE SSEE ALSO CLAIMED AGRICULTURAL INCOME OF RS. 1,00,000/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEE DINGS, THE ASSESSEE WAS CONFRONTED ON THE BASIS OF AN AIR INFORMATION A S TO WHY CASH DEPOSITS IN THE BANK BE NOT TREATED AS UNEXPLAINED INCOME. THE ASSESSEE IN REPLY SUBMITTED THAT HE HAD SOLD AGRICULTURAL LA ND TOTALING RS.61.5 MARALAS TO ONE SH. DEVINDER SINGH, S/O SH. HARI SI NGH FOR A CONSIDERATION OF RS.28,82,000/-. IT WAS FURTHER SUB MITTED THAT THE ASSESSEE HAD EARNED LONG TERM CAPITAL GAIN ON SALE OF SUCH LAND WHICH WAS EXEMPT UNDER SECTION 54B OF THE ACT AS HE HAD P URCHASED FURTHER AGRICULTURAL LAND AMOUNTING TO RS. 10,50,000/-. THE ASSESSING OFFICE ON THE BASIS OF EXAMINATION OF SH. DEVINDER SINGH HELD THAT THE ASSESSEE HAD NOT SOLD ANY LAND AND THEREFORE, HE MADE AN ADD ITION OF RS.30,58,000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS I N BANK. HE FURTHER ADDED AN AMOUNT OF RS. 14,085/- AS INTEREST ON SUCH BANK DEPOSITS AND ALSO MADE AN ADDITION OF RS.50,000/- ON ACCOUNT OF DISALLOWANCE OF ITA NO. 448(ASR)/2011 ASST. YEAR 2008-09 3 AGRICULTURAL INCOME AND ALSO MADE AN ADDITION OF RS .50,000/- ON ACCOUNT OF SALE OF MILK. WHILE FRAMING THE ASSESSMENT THE ASSESSING OFFICER DID NOT ALLOW THE BENEFIT OF DEDUCTION UNDE R SECTION 54B OF THE ACT HOLDING THAT THE AGREEMENT TO PURCHASE LAND WAS NOT ON NON JUDICIAL STAMP PAPER AND THE PROPERTY WHICH WAS CLAIMED TO H AVE BEEN PURCHASED WAS NOT TRANSFERRED IN THE NAME OF PURCHA SER AND WAS STILL EXISTING IN THE NAME OF SELLER. 3. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE CIT(A ) AND THE LEARNED CIT(A) DID NOT AGREE WITH THE CONTENTIONS OF ASSESS EE AND DISMISSED THE APPEAL. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO AN APPLICATION FOR ADDITIONAL EVIDENCE WHICH WAS FILED VIDE LETTER DATED 15.04.2013 AND WHICH HE SUBMITTED THAT IT NEEDS TO BE CONSIDERED FIRST BEFORE ADJUDICATING THE APPEAL. THE LEARNED AR SUBM ITTED THAT ADDITIONAL EVIDENCE IS IN THE FORM OF DOCUMENTS WHICH IS A COP Y OF REPLY DATED 14.06.2012 RECEIVED FROM PUNJAB & SINDH BANK, ZONAL OFFICE, JALNADHAR, WHEREIN BANK HAD CONFIRMED THE FACT THAT CHEQUE NO. 118282 AS MENTIONED IN SALE DEED WAS ISSUED FROM CHEQUE BOOK ISSUED TO SH. SUKHDEV SINGH, WHO WAS A CO-PURCHASER WITH DEVINDER SINGH. THE LEARNED AR SUBMITTED THAT THIS EVIDENCE COULD NOT B E FILED EARLIER AS THE RTI APPLICATION FILED BY ASSESSEE EARLIER WAS NOT R EPLIED BY THE BANK AND IT WAS ONLY WHEN THE HEAD OFFICE OF BANK WAS INVOLV ED THAT THE ASSESSEE ITA NO. 448(ASR)/2011 ASST. YEAR 2008-09 4 WAS ABLE TO OBTAIN REPLY VIDE LETTER DATED 14.06.20 12. EMPHASIZING THE SIGNIFICANCE OF THIS EVIDENCE THE LEARNED AR SUBMIT TED THAT THE LEARNED CIT(A) IN HIS ORDER DATED 19.07.2011 HAS CONSIDERED THIS CHEQUE AS IRRELEVANT AS THE DETAILS OF THIS CHEQUE WERE NOTED IN THE AGREEMENT BY HAND. THE LEARNED AR SUBMITTED THAT THIS CHEQUE WAS ISSUED BY ONE SH. SUKHDEV SINGH, WHO WAS CO-PURCHASER WITH SH. DEVIND ER SINGH AND THEREFORE, THE DENIAL OF SH. DEVINDER SINGH NOT HAV ING MADE ANY PURCHASE OF AGRICULTURE LAND FROM ASSESSEE IS WRONG . THEREFORE, IN VIEW OF THESE FACTS IT WAS SUBMITTED THAT THIS EVIDENCE GOE S TO THE ROOT OF THE MATTER, THEREFORE, THE ISSUE MAY BE SENT BACK TO TH E ASSESSING OFFICER FOR FRESH EXAMINATION. 5. THE LEANED DR, HOWEVER, HEAVILY OBJECTED TO ADMI SSION OF THE ADDITIONAL EVIDENCE. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSE E HAD EXECUTED A GENERAL POWER OF ATTORNEY ON 19.06.2007 IN FAVOUR O F SH. DEVINDER SINGH, S/O SH. HARI SINGH FOR SALE OF 61.5 MARLAS OF AGRI CULTURAL LAND. THE SAID GENERAL POWER OF ATTORNEY IS PLACED AT PAPER BOOK P AGE 13 TO 15. THE ASSESSEE HAD ALSO EXECUTED AN AGREEMENT TO SALE WIT H THE SAME PERSON SH. DEVINDER SINGH S/O SH. HARI SINGH FOR SALE OF 6 1.5 MARLAS FOR TOTAL CONSIDERATION OF RS.28,82,812/- WHICH IS PLACED AT PAPER BOOK PAGE 25 TO 27. IN THIS AGREEMENT TO SALE AT PAGE 27, THERE IS MENTION OF CHEQUE NO. ITA NO. 448(ASR)/2011 ASST. YEAR 2008-09 5 118282 WHICH AS PER REPLY OF PUNJAB & SINDH BANK ST ANDS STOPPED FOR PAYMENT WHICH WAS ISSUED FROM THE CHEQUE BOOK BELON GING TO SH. SUKHDEV SINGH. THE SAID REPLY IS PLACED IN THE FORM OF A LETTER DATED 14.06.2012 AND IS FORMING PART OF APPLICATION FOR A DDITIONAL EVIDENCE. IN THIS REPLY THE PUNJAB & SINDH BANK, ZONAL OFFICE, J ALANDHAR HAS RESPONDED THAT CHEQUE NO.118282 STOOD STOPPED FOR P AYMENT AND THE ACCOUNT FROM WHICH THIS CHEQUE WAS ISSUED BELONGS T O SH. SUKHDEV SINGH, S/O SH. TEJINDER SINGH. WE FURTHER FIND THAT SH. DEVINDER SINGH AS A POWER OF ATTORNEY HOLDER HAD SOLD THE LAND BEL ONGING TO ASSESSEE TOTALING OF 61.5 MARLAS VIDE SALE DEED DATED 21.04. 2008 FOR A CONSIDERATION OF RS.25,31,250/-. THE SAID COPY OF S ALE DEED IS PLACED AT PAPER BOOK PAGE 21 TO 23. IN THE SAID SALE DEED AT PAGE 22 ALONG WITH NAME OF SH. DEVINDER SINGH S/O SH. HARI SINGH IS ME NTIONED THE NAME OF SH. SUKHDEV SINGH S/O SH. JOGINDER SINGH. IN REP LY TO RTI APPLICATION VIDE LETTER DATED 14.06.2012 THE BANK HAS MENTIONED NAME OF ACCOUNT HOLDER SH. SUKHDEV SINGH, S/O SH. TEJINDER SINGH. E VEN THOUGH THERE IS MISMATCH OF COMPLETE NAME OF SH. SUKHDEV SINGH IN T HE SALE DEED AND REPLY OF PUNJAB & SINDH BANK, YET THE FACT REMAINS THAT CHEUQE NO. 118282 FINDS MENTION IN THE AGREEMENT TO SELL AND F URTHER SH. DEVINDER SINGH AS A POWER OF ATTORNEY HOLDER OF SH. SARWAN S INGH HAD SOLD THIS LAND FOR RS. 25,31,215/-. IN VIEW OF ALL THESE FACT S AND CIRCUMSTANCES THE MATTER NEEDS FRESH EXAMINATION. ITA NO. 448(ASR)/2011 ASST. YEAR 2008-09 6 6.1 THE OTHER ISSUES RAISED BY THE ASSESSEE IN THE FORM OF NON ALLOWANCE OF DEDUCTION UNDER SECTION 54B IS ALSO A RELATED ISSUE, THEREFORE IN THE INTEREST OF JUSTICE SUBSTANTIAL JU STICE THE CASE IS REMITTED BACK TO ASSESSING OFFICER FOR RE-ADJUDICATION ON EN TIRE ISSUES. WHILE RE- ADJUDICATING THE ASSESSING OFFICER WILL TAKE INTO A CCOUNT EACH AND EVERY DOCUMENT INCLUDING ADDITIONAL EVIDENCE AND WILL FRA ME ASSESSMENT AS PER LAW. NEEDLESS TO SAY THAT ASSESSEE WILL BE PROV IDED SUFFICIENT OPPORTUNITY TO BEING HEARD. 7. IN VIEW OF THE ABOVE, FACTS AND CIRCUMSTANCES T HE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2015. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 27.11.2015. /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. SARWAN SINGH, JALANDHAR. 2. THE INCOME TAX OFFICER, WARD 2(2), JALANDHAR. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.