Sh. Raj Kumar, Bathinda V. The Income Tax Officer, Bathinda

ITA 533/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7712 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 19-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL LD
• Assessee Lawyers: P N ARORA LD
• Keywords: Capital asset; Opportunity of being heard; Peak credit; Additional evidence; Assessment record
• Section: 133A; 133(6); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.533(ASR)/2015 ASSESSMENT YEAR:2011- 12 SH. RAJ KUMAR #18085, CHANDSAR BASTI, MANDIT WALI GALI, BATHINDA. PAN: ARFPK-7008J VS. INCOME TAX OFFICER, WARD-I(I), BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P. N. ARORA (LD. ADV. ) RESPONDENT BY: SH. S.S. KANWAL (LD. D.R) DATE OF HEARING: 08.11.2017 DATE OF PRONOUNCEMENT:30.11.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 26.08.201 5 PASSED BY THE LD. CIT(A), BATHINDA, IN APPEAL NO.104-IT/CIT(A)/BT I/14-15 FOR ASST. YEAR:2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1 THAT THE LEARNED CIT(A) ERRED ON FACTS AND LAW IN DISMISSING THE APPEAL AND CONFIRMING THE ORDER OF THE ASSESSIN G OFFICER ASSESSING THE INCOME AT RS.16,74,550/-. 2. THAT LD. CIT(A) ERRED ON FACTS AND LAW IN REJECTING THEREQUEST OF THE ASSESSEE FOR ADMISSION OF ADDITION EVIDENCE TO PROV E THE SOURCE OF CASH DEPOSITED IN SAVING BANK ACCOUNT. 3. THAT LD. CIT(A) ERRED ON FACTS AND LAW IN CON FIRMING THE ADDITION OF RS.14,73,000/- MADE BY THE AO ON ACCOUN T OF PEAK CREDIT OF THE CASH DEPOSITS IN THE SAVING BANK ACCO UNTS OF THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE FILED DUR ING THE COURSE APPELLATE PROCEEDINGS HAS NOT BEEN CONSIDERED. 4. THAT LD. CIT(A) ERRED ON FACTS AND LAW IN CO NFIRMING THE ADDITION OF RS.57,700/- MADE BY THE AO ON ACCOUNT O F ESTIMATING THE NET PROFIT @ 5% ON THE TOTAL AMOUNT OF CASH DEP OSITS IN THE SAVING BANK ACCOUNTS OF THE ASSESSEE. ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 2 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE HAD FILED HIS RETURN OF INCOME AT RS.1,43,85 0/- ON 12.03.2012 FOR THE ASSESSMENT YEAR 2011-12 AND THE CASE W AS SELECTED UNDER SCRUTINY AND STATUTORY NOTICES HAVE BEEN ISSU ED ON VARIOUS DATES, HOWEVER, THE ASSESSEE HAS NOT COMPLIED, EVEN THE NOTICE DATE 07.03.2014 SENT BY REGISTERED POST HAS BEEN RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS THAT THE ASSESSE E HAS LEFT WITHOUT NEW ADDRESS. IN THE CONSTRAINED CIRCUMSTANCES, TH E ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 144 OF THE ACT TO THE BE ST OF HIS JUDGMENT. DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND BY THE A.O THAT THE ASSESSEE WAS MAINTAINING TWO BANK ACCOUN TS, A/C NO. 01630150968 AND A/C NO.016301520967 WITH THE IC ICI BANK, BATHINDA JOINTLY IN THE NAME OF THE ASSESSEE (FIRST NAME ) AND SMT. SATYA DEVI (ASSESSEES MOTHER, 2 ND NAME.). THE COPIES OF BANK ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE BEEN OBTAINED FRO M BANK U/S 133(6) OF THE I.T. ACT, 1961 AND SINCE THE ASSESSEE HA S NOT FURNISHED ANY INFORMATION REGARDING SOURCE OF THE AMO UNTS, THE WHOLE AMOUNT DEPOSITED BY THE ASSESSEE IS TO BE TREATED AS UNEXP LAINED. HOWEVER, SINCE THE ASSESSEE HAS MADE WITHDRAWALS OF CASH ALSO ON DIFFERENT DATES, THEREFORE, PEAK AMOUNT AT RS.14,73,0 00/- AS INCOME OF THE ASSESSEE AND TOTAL AMOUNT OF CASH DEPOSIT IN BOTH T HE ACCOUNTS WORKED OUT AT RS.35,31,000/-. IN THE ABSENCE OF ANY EV IDENCE ON RECORD, THE A.O. ESTIMATED THE NET PROFIT @ 5% OF THE TOTAL AMOUNT OF CASH DEPOSIT WHICH WAS WORKED OUT TO RS.1,76,550/- AND F URTHER THE ASSESSING OFFICER ADDED NET ADDITION ON ACCOUNT OF INCOME F ROM BUSINESS BY WORKING OUT AT RS.57,700/- AND TOTAL ADDITI ON WAS WORKED OUT AT RS.15,30,700/-. ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 3 4. THE ASSESSMENT ORDER WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(A), WHO DISMISSED THE APPEAL OF THE ASSESSEE AND FEELING AGGRIEVED AGAINST THE DISMISSAL OF APPEAL, THE ASSESSEE PRE FERRED THE INSTANT APPEAL BY RAISING THE GROUNDS OF APPEAL AS MEN TIONED IN PARA-2 OF THIS ORDER. 5. AT THE TIME OF HEARING, THE ASSESSEE ALSO RAISED AN ADDITIONAL GROUND TO THE EFFECT THAT IN THIS CASE THE ADDITION OF RS.14,73,000/- HAS BEEN MADE BY INVOKING THE PROVISIONS OF SECTION 69 O F THE IT ACT,1961. THE PROVISIONS OF SECTION 69 ARE NOT AT ALL AP PLICABLE TO PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. AS SUCH THE ADDITIO N MADE IS UNJUSTIFIED, UNCALLED FOR AND THE ADDITION MAD E ON THIS SCORE MAY BE DELETED AS THE SAME IS ILLEGAL, INVALID AND VOI D AB INITIO IN THE EYES OF LAW. 6. WE FEEL IT APPROPRIATE TO DISPOSE OF THE ADDITIONAL GROUND OF THE ASSESSEE FIRST. AS THE ASSESSEE HAS RAISED THE LEGAL GROUND AND THE GROUN D GOES TO THE ROOT OF THE CASE ITSELF AND WOULD BE HAVING REASONA BLE EFFECT ON THE PROPER ADJUDICATION OF THE CASE, HENCE, WE ADMIT THE AD DITIONAL GROUND. IN SUPPORT OF THE ADDITIONAL GROUND, THE ASSE SSEE COUNSEL RAISED THE ISSUE THAT THE ADDITION WAS MADE BY THE ASSESSI NG OFFICER BY INVOKING THE PROVISIONS OF SEC.69 OF THE I.T. ACT, 1 961. IT IS SUBMITTED THAT LEGALLY THE PROVISIONS OF SEC.69 ARE NO T AT ALL APPLICABLE TO THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE BECAUSE ADMI TTEDLY IN THE INSTANT CASE, THE ASSESSEE IS NOT MAINTAINING ANY BO OKS OF ACCOUNTS AND AS SUCH THE PROVISION OF SEC.69 ARE NOT AT ALL APPLICABLE BECAUSE SEC.69 PRE SUPPOSES FOLLOWING TWO INGREDIENTS. ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 4 (I) THAT THE BOOKS OF ACCOUNTS SHOULD BE MAINTAINED. (II) THAT THE INVESTMENT SHOULD BE MADE OUTSIDE THE BOOKS OF ACCOUNTS. THE LD. AR FURTHER SUBMITTED THAT SINCE NO BOOKS OF ACCO UNT HAS NOT BEEN MENTIONED, THEREFORE, THE PROVISIONS OF SEC.69 AT ALL ARE NOT APPLICABLE TO THE PRESENT CASE AND THIS VIEW FINDS SUPPOR T FROM THE DECISION OF ITAT, AMRITSAR BENCH IN THE CASE OF AMARJIT S INGH IN ITA NO.114(ASR)/2015, ORDER DATED 14.12.2015 RELATING TO A.Y.2011-12. HENCE, THE ADDITION MADE IS ILLEGAL, INVALID AND THE SA ME IS LIABLE TO BE DELETED. 7 . ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE SUBMISSIONS OF THE LD. AR IS ALTOGETHER CONTRARY TO THE MANDATE OF T HE SEC.69 OF THE I.T. ACT AS NOWHERE IT IS PRESCRIBED THAT MAINTAINING OF BOOKS OF ACCOUNT ARE COMPULSORY AND INVESTMENT SHOULD HAVE BEEN MA DE OUT SIDE THE BOOKS OF ACCOUNT. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AS W E HAVE ALREADY DECIDED THE INSTANT ISSUE IN OUR LATEST DECISION I N ITA NO.599(ASR)/2015 DATED 31.10.2017, WHICH ARE REPRODUCE D HEREIN BELOW FOR THE SAKE OF CONVENIENCE AND BREVITY. 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTAN CES OF THE CASE, AS IT REFLECTS FROM THE ASSESSMENT ORDER THAT MORE THAN 10 OPPORTUNITIES HAVE BEEN GIVEN TO THE ASSESSEE FOR JOINING THE ASS ESSMENT PROCEEDINGS, HOWEVER, THE ASSESSEE DID NOT CO-OPERATE IN THE ASS ESSMENT PROCEEDINGS AND FINDING NO OPTION, THE ASSESSING OFFICER WAS CO NSIDERED TO COMPLETE THE ASSESSMENT U/S 144 OF THE I.T. ACT ON THE BASIS OF INFORMATION AND MATERIAL AVAILABLE ON RECORD. AS THE ASSESSEE HAS F AILED TO OFFER ANY EXPLANATION IN RESPECT OF CASH DEPOSIT OF RS.31,15, 000/- IN HIS SAVING ACCOUNT NO.4512 MAINTAINED BY HIM WITH THE ALLAHABA D BANK, FAZILKA ON 06.01.2009, THEREFORE, THE VALUE OF THE DEPOSIT OF RS.31,15,000/- WAS TREATED AS INCOME OF THE ASSESSEE FOR THE YEAR UNDE R CONSIDERATION U/S 69 OF THE I.T. ACT. ON APPEAL, THE LD. CIT(A) DELETED THE SOME OF THE ADDITION, HOWEVER, SUSTAINED THE ADDITION OF RS.15,47,000/-. IT IS NOT OUT TO PLACE HEREIN THAT THE ASSESSEE NEVER RAISED OBJECTION WITH REGARD TO THE NON-APPLICABILITY OF ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 5 PROVISIONS OF SEC.69 IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE BEFORE THE LD. CIT(A). THE ASSESSEE HAS ALREADY GOT THE RELIEF OF RS.5,68,000/- AND RS.10,00,000/-, HOWEVER, BY RAISI NG ADDITIONAL GROUND CHALLENGED THE WHOLE ADDITION OF RS.31,15,000/-. LE T US TO PERUSE THE INGREDIENTS OF SEC.69. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, M AINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVE STMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OP INION OF THE [ASSESSING] OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF S UCH FINANCIAL YEAR. FROM THE PLAIN READING OF SEC.69, IT REFLECTS THAT IT IS NOT MANDATORY TO MAINTAIN THE BOOKS OF ACCOUNTS. THE INGREDIENTS OF SEC.69 REFLECTS THAT WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENT WHICH ARE NOT RECO RDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE O F INCOME. IF ANY CLASSIFIES THAT FOR APPLICATION OF SEC.69 IT IS NOT MANDATORY TO MAINTAIN THE BOOKS OF ACCOUNTS AND THEREFORE, IT CANNOT BE SAID THAT SEC.69 PRESUPPOSES TWO CONDITIONS (I) THAT THE BOOKS OF ACCOUNT SHOULD BE MAINTAINED (II) THAT THE INVESTMENT SHOULD BE MADE OUTSIDE THE BOOKS OF ACCOUNT. SEC.69 FURTHER CLASSIFIES THAT IF THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF INVESTMENT OR THE EXPLANATION OFFERED BY HIM, IN THE OPINION OF THE ASSESSING OFFICER NONSATISFACTORY, T HE VALUE OF INVESTMENT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF S UCH FINANCIAL YEAR WHICH IN SIMPLE MEANING COVERS TWO SITUATIONS (I) W HERE THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE O F INVESTMENT AND (II) THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINI ON OF THE ASSESSING OFFICER, SATISFACTORY, IN THAT SITUATION THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FIN ANCIAL YEAR. EVEN OTHERWISE, SEC.69A FURTHER CLARIFIES ABOUT THE UNEXPLAINED MONEY AND CRUX OF THAT SECTION REFLECTS THAT THE MO NEY AND VALUE OF THE BILLION, JEWELLERY OR OTHER VALUABLE ARTICLE, IF AS SESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OR THE E XPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY THEN THE SAME MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. THE CASE CITED BY THE LD. AR TITLED AS AMARJI T SINGH VS. ITO (SUPRA) IS FACTUALLY DISSIMILAR TO THE INSTANT CASE AND NOT BA SED UPON ANY PRECEDENT AND COGENT REASONS, THEREFORE, NOT APPLICABLE TO TH E INSTANT CASE. HENCE, IN OVER ALL CONSIDERATION, THE ADDITIONAL GROUNDS RAIS ED BY THE ASSESSEE STANDS DISMISSED. HENCE, IN VIEW OF THE AFORESAID JUDGMENT, THE ADDIT IONAL ISSUE RAISED BY THE ASSESSEE STANDS DISMISSED. ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 6 9. NOW LET US SCRUTINIZE THE CASE ON MERIT. IN SUPPORT OF ITS CASE ON MERIT, THE LD. COUNSEL OF THE ASSESSEE ARGUED THAT THE L D. CIT(A) HAS ERRED IN REJECTING THE REQUEST OF THE ASSESSEE FOR ADMITT ING THE ADDITIONAL EVIDENCE FOR PROVING THE SOURCE OF CASH DEPOSI T IN THE BANK ACCOUNT OF THE ASSESSEE. AS IT WAS SPECIFICALLY REQUESTED THA T THE ADDITIONAL EVIDENCE IN THE SHAPE OF DOCUMENTS RELATING TO SALE OF PROPERTY BY SMT. SATYA DEVI (MOTHER OF THE ASSESSEE) MA Y KINDLY BE ADMITTED AS THE SAME SHOULD NOT BE PRODUCED BEFORE THE AO DUE TO THE FACT THAT EARLIER COUNSEL OF THE ASSESSEE SH. GOPAL K UKAR, ADVOCATE HAS NOT PROPERLY ADVISED THE ASSESSEE FOR FURNISHING THESE DOCUMENTS BEFORE THE AO TO PROVE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE REQUEST OF THE ASSESSEE MERELY BECAUSE THE PROPERTY WAS SOLD ON 16.01.2008 FOR RS.56,50 ,000/- AND THE DEPOSITS COULD NOT BE MADE IN CONNECTION WITH A.Y.20 11-12 BECAUSE OF TIME GAP. FURTHER THE LD. AR RELIED UPON T HE VARIOUS CASE LAWS AND SUBMITTED THAT THE TIME GAP BETWEEN THE ACTU AL ACCRUAL OF AMOUNT AND DEPOSITS IN THE BANK DOES NOT LACKS THE SANCTIT Y OF ITS GENUINENESS. FURTHER, WITH REGARD TO APPLYING THE NET PROFIT RA TE OF 5% OF TOTAL CASH DEPOSITS IN THE BANK, IT WAS SUBMITTED BY THE LD. AR THAT WHERE THE NET PROFIT RATE HAS BEEN APPLIED BY THE DEPARTME NT, THEN NO FURTHER ADDITION SHOULD BE MADE. 10. ON THE CONTRARY, IT WAS SUBMITTED BY THE LD. DR, TH AT SEVERAL OPPORTUNITIES HAVE BEEN GIVEN BY THE ASSESSING OFFICER, H OWEVER, THE ASSESSEE FAILED TO APPEAR FOR EXPLAINING HIS CASE AND AGRE EMENT TO SALE ON WHICH THE ASSESSEE RELYING IS NOT A REGISTERED AGREEMEN T AND ACCORDING TO LATEST JUDGMENT PASSED BY THE APEX COURT IN THE CASE OF CIT VS. BALBIR SINGH MAINI (CIVIL APPEAL NO.15619/2 017) ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 7 DECIDED ON 4 TH OCTOBER, 2017 AND EVEN OTHERWISE IN VIEW OF THE JUDGMENT PASSED BY THE APEX COURT IN THE SURAJ LAM PS CASE, UNREGISTERED DOCUMENT CANNOT CONFER ANY RIGHT AND/OR TI TLE AND THE UNREGISTERED DOCUMENT IS SHAM DOCUMENT, CANNOT BE RELIED FOR ANY PURPOSES. FURTHER THE LD. DR SUBMITTED THAT IF THE PRO PERTY AS CLAIMED BY THE ASSESSEE WAS SOLD ON CONSIDERATION OF RS.56,50,000/- ON 16.01.2008 THEN WHY THE SAID AMOUNT WAS NOT DEPOSITED IN THE BANK ACCOUNT IMMEDIATELY OR EVEN THEREAFTER. IT IS NOT IN CO NTROVERSY THAT THE ASSESSEE WAS MAINTAINING BANK ACCOUNTS ALONG WITH HIS MO THER JOINTLY, THEREFORE, THE AFORESAID CIRCUMSTANCES CREATES SER IOUS DOUBTS. 11. IN REJOINDER, THE LD. AR SUBMITTED THAT THIS POINT OF UNREGISTERED AGREEMENT WAS NEITHER DECIDED BY THE LD. CIT(A) NOR T AKEN BY THE REVENUE DEPARTMENT IN CROSS OBJECTION. 12. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF THE PARTIES AND RELEVANT D OCUMENTS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE LD. CIT(A ) DISMISSED THE APPEAL OF THE ASSESSEE BY MAKING THE REASONED ORDER AND OPERATIVE PART OF THE SAME IS REPRODUCED HEREIN BELOW FOR THE SAK E OF CONVENIENCE AND BREVITY. 4. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT , THROUGH HIS AUTHORISED REPRESENTATIVE, HAS SOUGHT TO EXPLAIN TH E CASH DEPOSITS IN THE BANK ACCOUNTS ON THE BASIS OF PURPORTED AVAILABILIT Y OF FUNDS WITH SMT. SATYA DEVI, THE APPELLANTS MOTHER PURSUANT TO THE SALE OF HER PORTION OF IMMOVABLE PROPERTY ON 16 TH OF JANUARY 2008. IN SUPPORT OF THIS CONTENTION, NEW AND ADDITIONAL EVIDENCE HAVE BEEN SOUGHT TO BE ADDUCED IN THE FORM OF FUND FLOW STATEMENT, AFFIDAVIT OF SMT.SATYA DEVI , AGREEMENT OF SALE, GENERAL POWER OF ATTORNEY ETC. IN THE ALTERNATIVE, IT WAS SUGGESTED THAT THERE WAS NO REQUIREMENT FOR THE ASSESSING OFFICER TO MAKE ESTIMATION OF PROFITS FROM UNDISCLOSED BUSINESS, WHEN THE PEAK AM OUNT OF CREDIT IN THE BANK ACCOUNTS WAS DEEMED AS INCOME. SUCH A SUGGESTI ON WAS MADE ON THE STRENGTH OF THE ARGUMENT THAT THE ADDITION OF P EAK CREDIT WOULD SUBSUME THE PROBABLE PROFITS OF THE UNDISCLOSED BUS INESS. 5. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSI DERED. THE ASSESSMENT RECORDS, SUMMONED FROM THE ASSESSING OFF ICER, HAVE ALSO ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 8 BEEN PERUSED. IT IS NOTICED FROM THE ASSESSMENT REC ORDS THAT THE APPELLANT WAS GIVEN SUFFICIENT AND ADEQUATE OPPORTUNITY TO EX PLAIN THE SOURCES OF CASH DEPOSITS IN HIS BANK ACCOUNTS. HOWEVER, FOR NO APPARENT GOOD REASON, THERE WAS A COMPLETE NON- COMPLIANCE TO THE NOTICES AND THE REMINDERS SENT FROM THE OFFICE OF THE ASSESSING OFF ICER. THE APPELLANTS INTRANSIGENCE IS APPARENT FROM THE RECORDS IN AS MU CH AS THERE WAS AN ATTEMPT AT AVOIDING THE SERVICE OF THE ASSESSMENT O RDER ALSO, WHICH HAD TO BE ULTIMATELY SERVED UPON THE APPELLANT BY WAY OF A FFIXTURE AT HIS BUSINESS PREMISES AS ALSO AT HIS RESIDENCE, THE ADDRESS OF W HICH WAS LAST KNOWN TO THE DEPARTMENT. 6. EVEN DURING THE APPELLATE PROCEEDINGS, THERE WAS A RELUCTANCE ON THE PART OF THE APPELLANT TO COME FORWARD AND EXPLA IN THE SOURCES FROM WHICH THE IMPUGNED CASH DEPOSITS WERE MADE IN HIS B ANK ACCOUNTS. AN IMPLAUSIBLE EXPLANATION WAS PROFFERED THAT THE SAID DEPOSITS WERE SOURCED FROM THE SALE PROCEEDS OF RS.56,50,000/- WHICH ACCR UED TO THE APPELLANTS MOTHER ON 16 TH OF JANUARY 2008. THE APPELLANT HAD NO EXPLANATION FOR THE CONSIDERABLE TIMELAG IN THE PURPORTED DEPOSIT OF TH E SALE PROCEEDS OF JANUARY, 2008, IN THE BANK ACCOUNTS DURING THE FINA NCIAL YEAR 2010-11 .THE APPELLANT WAS ALSO UNWILLING TO GIVE ANY INFOR MATION REGARDING THE TAXABILITY OF SUCH ACCRUALS IN THE HANDS OF THE APP ELLANTS MOTHER DURING THE RELEVANT PERIOD. UNDER THESE CIRCUMSTANCES, THE APPELLANT WAS DENIED THE OPPORTUNITY OF ADDUCING THE NEW EVIDENCE AND TH E REQUEST, WAS OVERWHELMINGLY REJECTED. 7. IN VIEW OF THE CIRCUMSTANCES OBTAINING IN THE CA SE OF THE APPELLANT, THE ASSESSING OFFICERS ASSUMPTION IN MAKING THE IMPUGN ED ADDITION CANNOT BE FAULTED. HE COULD NOT HAVE LOST SIGHT OF THE FACT T HAT THE APPELLANT COULD NOT EVEN EXPLAIN THE SOURCES OF CASH DEPOSITS IN HIS B ANK ACCOUNTS EVEN IN THE PRECEDING ASSESSMENT YEAR, WHICH ASSESSMENT WAS CON FIRMED IN FIRST APPEAL. ALL THE GROUNDS TAKEN BY THE APPELLANT CHAL LENGING THE INSTANT ASSESSMENT ARE, THEREFORE, REJECTED AS DEVOID OF ME RITS. THE GROUND OF APPEAL PERTAINING TO INITIATION OF PENALTY PROCEEDI NGS IS ALSO DISMISSED ON GROUND OF NON-MAINTAINABILITY. WE REALIZED FROM THE ORDER PASSED BY THE LD. CIT WHER EIN HE HAS OBSERVED THAT IT IS NOTICED FROM THE ASSESSMENT RECORDS THA T THE APPELLANT WAS GIVEN SUFFICIENT AND ADEQUATE OPPORTUNI TIES TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNTS. HOWEVER, FOR NO APPARENT GOOD REASON, THERE WAS A COMPLETE NON-COMPLIAN CE TO THE NOTICES AND THE REMINDERS SENT FROM THE OFFICE OF THE ASSE SSING OFFICER. IT WAS FURTHER OBSERVED BY THE LD. CIT(A) THAT EVEN D URING THE APPELLANT PROCEEDINGS, THERE WAS RELUCTANCE ON THE PART OF THE APPELLANT TO COME FORWARD AND EXPLAIN THE SOURCES FROM WHICH THE ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 9 IMPUGNED CASH DEPOSITS WERE MADE IN HIS BANK ACCOUNTS AND I N PLAUSIBLE EXPLANATION WAS PROFFERED THAT THE SAID DEP OSITS WERE SOURCED FROM THE SALE PROCEEDS OF RS.56,50,000/- WHICH ACCR UED TO THE APPELLANTS MOTHER ON 16 TH OF JANUARY,2008. HOWEVER, THE APPELLANT HAD NO EXPLANATION FOR THE CONSIDERABLE TIME-LAG IN T HE PURPORTED DEPOSIT OF THE SALE PROCEEDS OF JANUARY,2008 IN THE BAN K ACCOUNTS DURING THE FINANCIAL YEAR:2010-11. THE APPELLANT WA S ALSO UNWILLING TO GIVE ANY INFORMATION REGARDING THE TAXABILITY OF SUCH ACCRUALS IN THE HANDS OF THE APPELLANTS MOTHER DURING THE RELEVANT P ERIOD. UNDER THESE CIRCUMSTANCES, THE APPELLANT WAS DENIED THE OPPORTU NITY OF ADDUCING THE NEW EVIDENCE AND THE REQUEST WAS OVERWHEL MINGLY REJECTED. IT WAS FURTHER OBSERVED BY THE LD. CIT(A) T HAT THE APPELLANT COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITS I N THE BANK ACCOUNT EVEN IN THE PRECEDING ASSESSMENT YEAR WHICH WAS CONFI RMED IN FIRST APPEAL. FROM THE CONSIDERATION OF THE OBSERVA TION OF THE LD. CIT(A) FOR REJECTING THE REQUEST OF ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE, WE ARE OF THE VIEW THAT HE HAS PASSED WELL RE ASONED AND LOGICAL ORDER, HENCE, DOES NOT SUFFER FROM ANY ILLEGALI TY, PERVERSITY AND IMPROPRIETY. NOW COMING TO THE SUBMISSIONS OF THE ASSESSEE WITH REGARD T O THE CONSIDERATION OF UNREGISTERED AGREEMENT AS THE LD. AR SUBMITTED THAT THIS POINT OF UNREGISTERED AGREEMENT WAS NEITHER BEEN PROVIDED BY LD. CIT(A) NOR TAKEN BY REVENUE IN COURSE OF OBJECT ION, THEREFORE, CANNOT BE ALLOWED TO BE RAISED AT THIS JUNCTURE. WE ARE IN AGREEMENT WITH THE SUBMISSION OF THE LD. D .R. AS IT IS A LEGAL POINT WHICH CAN BE ALLOWED TO BE RAISED AT AN Y TIME AS WE HAVE ALREADY ALLOWED THE ADDITIONAL GROUND RAISED BY ASSESSE E AS WELL, IN THE INSTANT APPEAL ITSELF, THEREFORE, SIMILARLY THE LE GAL POINT RAISED BY LD. D.R. IS ALLOWED. EVEN OTHERWISE, THE COURT, WHILE HEARING THE CASE ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 10 CANNOT BE PRECLUDED FROM TAKING THE JUDICIAL NOTES ON T HE FACTS AND LAW IF ANY DECIDED BY THE APEX COURT OR JURISDICTIONAL HIGH COURT OR OTHERWISE ENUMERATED IN THE STATUE. AS THE HONBLE AP EX COURT IN THE CASE OF CIT VS. BALBIR SINGH MAINI (SUPRA) HAS ALREADY SE TTLED THE CONTROVERSY WITH REGARD TO THE UNREGISTERED AGREEMENT TO SALE, BY HOLDING THAT AFTER AMENDMENT OF THE REGISTRATION AND OTHER RELATED LAWS BY AMENDMENT ACT, 2001, UNLESS THE DOCUMENT CONTAINI NG THE CONTRACT TRANSFER FOR CONSIDERATION ANY IMMOVABLE PROPER TY (FOR THE PURPOSE OF SEC.53A OF THE TRANSFER OF PROPERTY ACT, 188 3 (4 OF 1882), IT SHALL NOT HAVE ANY EFFECT IN LAW, OTHER THAN BEING A RECEIVED AS EVIDENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PURPOSES OR AS EVIDENCE OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY REGISTERED INSTRUMENT AND EVEN OTHERWISE CONCLUDED THAT THE EFFECT OF THE AFORESAID AMENDMENT IS THAT, ON AND AFTER THE COMMENCE MENT OF THE AMENDMENT ACT OF 2001, IF AN AGREEMENT, LIKE THE JDA IN THE PRESENT CASE, IS NOT REGISTERED, THEN IT SHALL HAVE NO EFFECT IN LAW FOR THE PURPOSES OF SEC 53A. IN SHORT, THERE IS NO AGREEMENT IN THE EYES OF LAW WHICH CAN BE ENFORCED UNDER SECTION 53A OF THE TRAN SFER OF PROPERTY ACT. THIS BEING THE CASE, WE ARE OF THE VIEW T HAT THE HIGH COURT WAS RIGHT IN STATING THAT IN ORDER TO QUALIFY A S A TRANSFER OF A CAPITAL ASSET UNDER SECTION 2(47)(V) OF THE ACT, THERE M UST BE A CONTRACT WHICH CAN BE ENFORCED IN LAW UNDER SECTION 53 A OF THE TRANSFER OF PROPERTY ACT. THE RELEVANT OBSERVATION AND RATIO LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN THE AFORESAI D CASE IS REPRODUCED HEREIN BELOW FOR THE SAKE OF CONVENIENCE AND BREVITY. PARA 7. THE AO, IN OUR VIEW, SHALL NOT BE CARRIED AWA Y BY THE PLEA OF THE ASSESSEE LIKE 'VOLUNTARY DISCLOSURE', 'BUY PEACE', 'AVOID LITIGA TION', 'AMICABLE SETTLEMENT', ETC. TO EXPLAIN AWAY ITS CONDUCT. THE QUESTI ON IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMENT OF PA RTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. EX PLANATION TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE AO, BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELI ABLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE A MOUNT IN QUESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 11 8. ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED THE ADDI TIONAL SUM OF RS.40,74,000/- WITH A VIEW TO AVOID LITIGATION, BUY PEACE AND TO CHANNELIZE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE INCOME TAX DEPARTMENT. STATUTE DO ES NOT RECOGNIZE THOSE TYPES OF DEFENSES UNDER THE EXPLANATION 1 TO SECTI ON 271(L)(C) OF THE ACT. IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES N OT RELEASE THE APPELLANT-ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDING S. THE LAW DOES NOT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLO SURE OF HIS CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY. 9.WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT TH E SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PR OCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APP LICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, A FFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER HTTP://WWW.ITATONLINE.ORG PAGE 8 8 DEEDS DUL Y SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECT ION 133A CONDUCTED ON16.12.2003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF TH E ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED T HE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED L ATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLE AR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT I S THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE B OOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DE CLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATI SFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIAB LE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. WHILE COMING TO THE INSTANT CASE AS IN THE INSTANT CASE, THE ALLEGED AGREEMENT TO SALE ON WHICH THE ASSESSEE RELYING, IS UNDISPUTEDLY UNREGISTERED, THEREFORE, IT HAS NO EFFICA CY IN THE EYES OF LAW AND OBVIOUSLY NO TRANSFER CAN BE SAID TO HAVE BEE N TAKEN PLACE UNDER THE SAID DOCUMENT, THEREFORE, THE SAME CANNOT BE TAKEN INTO CONSIDERATION FOR ESTABLISHING THE CLAIM. UNDER THE INCO ME TAX ACT SPECIFICALLY SUB-CLAUSE (VI OF SEC.2 (47) OF THE I.T. ACT AND FINALLY NO PROFIT OR GAIN CAN BE TAKEN INTO CONSIDERATION FROM T HE UNREGISTERED AGREEMENT TO SALE. THE CASE RELIED UPON BY THE ASSESSEE A RE ALTOGETHER DISSIMILAR TO THE INSTANT CASE AND HENCE NOT APPLICABLE TO THE CASE IN HANDS, HENCE, THE GROUND NOS.1 TO 3 STANDS DI SMISSED. ITA NO.533 (ASR)/2015 ASST. Y EAR:2011-12 12 NOW COMING TO GROUND NO.4, AS IT WAS SUBMITTED BY THE LD. AR THAT THE LD. CIT(A) ERRED ON FACTS OF LAW IN CONFIRMIN G THE ADDITION OF RS.57,700/- MADE BY THE AO ON ACCOUNT OF NET PROFIT @5 % ON THE TOTAL AMOUNT OF CASH DEPOSITS IN THE SAVING BANK ACCOUNT OF THE ASSESSEE. FROM THE ORDER PASSED BY THE LD. CIT(A), WE REALIZED THAT ALTHOUGH THE ASSESSEE HAS RAISED THE GROUND BEFORE THE LD . CIT(A) WITH REGARD TO THE GROUND NO.4 HEREIN, HOWEVER, FRO M THE ORDER PASSED BY THE LD. CIT(A) IT APPEARS THAT THE SAID ISSUE WAS TAKEN BY THE ASSESSEE IN THE GROUNDS OF APPEAL BEFORE THE LD. CIT (A), HOWEVER, NEITHER SPECIFIC AGITATION MADE BY THE ASSESSEE NOR ADJUDI CATED BY THE LD. CIT(A), THEREFORE, WE FEEL IT APPROPRIATE TO RE MAND BACK THE ISSUE RAISED IN GROUND NO.4 OF INSTANT APPEAL TO THE FILE O F LD. CIT(A) TO ADJUDICATE THE SAME ON MERIT BY OFFERING PROPER AND R EASONABLE OPPORTUNITY OF BEING HEARD. IT IS CLARIFIED THAT THE LD. CIT(A) SHALL BE RESTRICTED TO DEAL WITH THE GROUND NO.4 ONLY. GROUND NO.4 STANDS ALLOWED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 30.11.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER