INCOME TAX OFFICER, Chandigarh V. Sh. Santokh Singh, Chandigarh

ITA 555/CHANDI/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5448 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRAKSHIT AGGARWAL
• Keywords: Onus to prove
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 555/CHANDI/2010 ASSESSMENT YEAR: 2006-07 I.T.O. WARD 1(3), CHANDIGARH V SANTOKH SINGH H NO. 3148-B, SECTOR 39-B CHANDIGARH PAN: ADYPS 6301 D ITA NO. 680/CHANDI/2010 ASSESSMENT YEAR: 2006-07 SANTOKH SINGH V I.T.O. WARD 1(5), CHANDIGARH H NO. 3148-B, SECTOR 39-B CHANDIGARH PAN: ADYPS 6301 D (APPELLANT-ASSESSEE) (RESPONDENT) APPELLANT BY: SMT. SARITA KUMARI RESPONDENT BY: SHRI PRAKSHIT AGGARWAL ORDER D K SRIVASTAVA: BOTH THE PARTIES, NAMELY, THE ASSES SEE AND THE REVENUE ARE AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A) ON 16.2.2010 AND THEREFORE THEY ARE IN APPEAL BEFORE THIS TRIBUNAL. THE ISSUES INVOLVE D IN BOTH THE APPEAL ARE INTER-LINKED. BOTH THE APPEALS ARE THEREFORE BEING DISPOSED OFF B Y A CONSOLIDATE ORDER. 2. IN ITA NO. 555/CHANDI/2010, THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETH ER THE WORTHY CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 9,78,000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED SOURCES AS THE ASSESSEE COULD NOT PR OVE THE GENUINENESS OF THESE TRANSACTIONS AND ONUS TO PROVE THE GENIUNITY LIE WITH THE ASSESSEE. 2 IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THAT OF THE AO BE RESTORED. 3 THE APPELLANT CRAVES TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OF. 3. IN ITA NO. 680/CHANDI/2010, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE WORTHY CIT(A) IN APPEAL NO. 598/08-09 DATED 16.2.20 10 HAS ERRED IN PASSING ITO V. SANTOKH SINGH 555 & 680/CHANDI/2010 2 THAT ORDER IN CONTRAVENTION OF THE PROVISIONS OF SE CTION 250(6) OF THE INCOME- TAX ACT. 2 THAT ON THE BASIS OF FACTS, CIRCUMSTANCES AND LE GAL POSITION OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING AN ADDITI ON OF RS. 5,44,000/- BEING CASH DEPOSIT ON VARIOUS DATES IN BANK ACCOUNT OF TH E APPELLANT EVEN WHEN DUE EXPLANATION AND SOURCE OF DEPOSIT WAS EXPLAINED. T HE TRANSACTION-WISE ADDITION IS AS UNDER: 2.1 28.6.2005 20,000/- 2.2 26.6.2005 40,000/- 2.3 6.12.2005 20,000/- 2.4 14.12.2005 1,90,000/- 2.5 3.1.2006 50,000/- 2.6 9.1.2006 2,24,000/- TOTAL 5,44,000/- 3 THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 4. IN THE YEAR UNDER APPEAL, THE ASSESSEE WAS WORKI NG AS A SENIOR ASSISTANT IN THE OFFICE OF THE DIRECTOR GENERAL OF POLICE, PUNJA B, CHANDIGARH. HIS NET SALARY WAS RS. 1,08,266/-. HE FILED HIS RETURN OF INCOME ON 2 6.7.2006 RETURNING TOTAL INCOME AT RS. 1,85,091/-. AFTER PROCESSING U/S 143(1), THE R ETURN WAS SELECTED FOR SCRUTINY DURING THE COURSE OF WHICH THE ASSESSEE WAS FOUND T O HAVE DEPOSITED A SUM OF RS. 15.22 LACS IN CASH IN HIS S/B ACCOUNT WITH CENTURIA N BANK OF PUNJAB, CHANDIGARH DURING THE PREVIOUS YEAR RELATING TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE NATURE AND SOURCE OF THE AFORESAID DEPOSITS IN RESPONSE TO WHICH THE ASSESSEE FURNISHED HIS WRITTE N REPLY BEFORE THE AO WHICH HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER. THE AO CO NSIDERED THE AFORESAID REPLY BUT DID NOT ACCEPT THE SAME FOR THE REASONS GIVEN BY HI M IN THE ASSESSMENT ORDER. 5. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE A SSESSEE HAD CLAIMED BEFORE THE AO THAT A SUM OF RS. 2.00 LACS WERE RECEIVED BY HIM ON SALE OF HOUSE NO. 996 SECTOR 56, CHANDIGARH ON 20.6.2005 AND THE DEPOSITS TO THAT EXTENT WERE MADE OUT OF THE AFORESAID SALE-PROCEEDS. IN SUPPORT OF HIS CLA IM, THE ASSESSEE FILED PHOTOCOPY OF THE AFFIDAVIT PURPORTEDLY SIGNED BY SHRI DALJIT SIN GH STATING THAT HE HAD PURCHASED THE AFORESAID HOUSE FOR RS. 2.80 LACS ON THE BASIS OF P OWER OF ATTORNEY. THE AO NOTED THAT THE SAID AFFIDAVIT WAS DATED 4.12.2008 WHILE S ALE OF THE HOUSE TOOK PLACE IN JUNE ITO V. SANTOKH SINGH 555 & 680/CHANDI/2010 3 2005. ACCORDING TO THE ASSESSING OFFICER, PHOTOCOP Y OF AFFIDAVIT WOULD NOT CARRY ANY EVIDENTIARY VALUE IN THE ABSENCE OF ORIGINAL DOCUME NT AND THEREFORE REJECTED THE AFORESAID EXPLANATION FOR WANT OF ORIGINAL DOCUMENT . THE ASSESSEE FURTHER CLAIMED THAT A SUM OF RS. 40,000/- WAS RECEIVED FROM SHRI G URMAIL SINGH ON 28.6.2005. IN ORDER TO SUBSTANTIATE HIS CLAIM, THE ASSESSEE FILED PHOTOCOPY OF RECEIPT PURPORTEDLY SIGNED BY SHRI GURMAIL SINGH. THE AO PERUSED THE S AID RECEIPT AND NOTED THAT THE ASSESSEE HAD FIRST GIVEN A SUM OF RS. 40,000/- ON 1 3.5.2005 TO SHRI GURMAIL SINGH FOR THE PURCHASE OF HOUSE AND THEREAFTER RECEIVED BACK THE SAME AMOUNT ON 27.6.2005 ALLEGEDLY DUE TO CANCELLATION OF THE AGREEMENT TO P URCHASE THE HOUSE. THE AO REJECTED THE AFORESAID EVIDENCE FOR THE REASON THAT THE ASSESSEE HAD FILED FIRSTLY PHOTOCOPY OF ORIGINAL RECEIPT WITHOUT PRODUCING THE ORIGINAL IN SUPPORT THEREOF AND SECONDLY FOR THE REASON THAT THE ASSESSEE HAD FAILE D TO EXPLAIN THE NATURE AND SOURCE OF RS. 40,000/- ON 13.2.2005 FOR PURCHASE OF HOUSE. IN ORDER TO EXPLAIN THE NATURE AND SOURCE OF THE IMPUGNED DEPOSITS MADE IN CASH, T HE ASSESSEE FILED A CERTIFICATE DATED 6.12.2008 ISSUED BY BAJWA DEVELOPERS LTD FOR A SUM OF RS. 4.65 LACS. THE AO PERUSED THE SAID CERTIFICATE AND NOTICED THAT THE A SSESSEE HAS RECEIVED BACK RS. 4.65 LACS AFTER IT WAS GIVEN BY HIM TO BAJWA DEVELOPERS LTD ON 12.11.2005 FOR PURCHASE OF PLOT IN MEGA PROJECT, SUNNY ENCLAVE, DESU MAJRA, KH ARAR IN CASH ON 14.11.2005 DUE TO CANCELLATION OF AGREEMENT TO PURCHASE THE PLOT. TH E AO REJECTED THE AFORESAID EXPLANATION ON THE GROUND THAT THE ASSESSEE HAD NOT EXPLAINED THE NATURE AND SOURCE OF RS. 4.65 LACS PAID TO BAJWA DEVELOPER LTD AS ADV ANCE ON 12.11.2005. HE, THEREFORE, TREATED THE SAID SUM OF RS. 4.65 LACS AS UNEXPLAINED. SINCE THE ASSESSEE DID NOT FURNISH ANY EVIDENCE REGARDING THE NATURE A ND SPRUCE OF DEPOSIT AMOUNTING TO RS. 50,000/- MADE ON 26.11.2005, RS. 30,000/- MADE ON 9.12.2005, RS. 1,90,000/- MADE ON 14.12.2005, RS. 3,45,000/- MADE ON 23.2.200 5 AND RS. 3,50,000/- MADE ON 28.2.2006, THE AO TREATED THE SAID DEPOSITS AS UNEX PLAINED. IT WAS NEXT CONTENDED BEFORE THE AO THAT A SUM OF RS. 2.24 LACS WAS DEPOS ITED OUT OF WITHDRAWALS FROM GPF ACCOUNT ON 26.3.2005. THE AO PERUSED THE PHOTOCOPY OF ANNUAL STATEMENT OF PROVIDENT FUND ACCOUNT AND NOTICED THAT THERE WERE INTERPOLATIONS. ON BEING CONFRONTED THE ASSESSEE RETRACTED AND SUBMITTED THA T THE PHOTOCOPY OF THE SAID PROVIDENT FUND STATEMENT FURNISHED BY HIM WAS FALSE . THE AO THEREFORE, TREATED THE SAID SOURCE ALSO AS UNEXPLAINED. 5. AGGRIEVED BY THE ADDITION AMOUNTING TO RS. 15,22 ,000/- MADE BY THE AO AFTER REJECTING THE EXPLANATION OF THE ASSESSEE AS REGARD S THE NATURE AND SOURCE THEREOF, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). IN SUPPORT OF HIS CASE, THE ASSESSEE FILED A CASH FLOW STATEMENT BEFORE THE LD. CIT(A). THE LD. CIT(A) PERUSED THE CASH FLOW STATEMENT AND DELETED THE ADDITION AMOUNTING T O RS. 9,78,000/- AGAINST WHICH ITO V. SANTOKH SINGH 555 & 680/CHANDI/2010 4 THE DEPARTMENT IS IN APPEAL BEFORE THIS TRIBUNAL. SHE HOWEVER CONFIRMED THE ADDITION TO THE EXTENT OF RS. 5,44,000/- AGAINST WHICH THE A SSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 6. IN SUPPORT OF APPEAL FILED BY THE DEPARTMENT, TH E LD. DR RELIED UPON THE ASSESSMENT ORDER. SHE SUBMITTED THAT THE LD. CIT(A) HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE MERELY ON BASIS OF CASH FLOW STATEMENT . SHE SUBMITTED THAT ORIGINAL DOCUMENTS ON WHICH RELIANCE WAS PLACED BY THE ASSES SEE IN SUPPORT OF HIS CASE, WERE NEITHER PRODUCED BEFORE THE AO NOR BEFORE THE LD. C IT(A). SHE SUBMITTED THAT CASH FLOW STATEMENT ON WHICH RELIANCE WAS PLACED BY THE LD. CIT(A) WAS NEVER FILED BEFORE THE AO AND THEREFORE THE IMPUGNED ORDER PASSED BY T HE LD. CIT(A) SHOULD BE VACATED AND THAT BY THE AO BE RESTORED. 7. IN SUPPORT OF APPEAL FILED BY THE ASSESSEE, THE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS WRON GLY MENTIONED THE FIGURE OF WITHDRAWAL AT RS. 30,000/- AS ON 31.2.2006 IN THE A FORESAID CASH FLOW STATEMENT AS AGAINST RS. 3.00 LACS. THEREFORE, THE ASSESSEE SHO ULD BE ALLOWED CREDIT FOR RS. 3.00 LACS INSTEAD OF RS. 30,000/-. 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THE RIVAL SUBMISSIONS. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESS EE REGARDING NATURE AND SOURCE OF IMPUGNED DEPOSITS AS EXPLANATION GIVEN BY THE ASSES SEE WAS NOT SUBSTANTIATED BY ORIGINAL DOCUMENTS. THE ORDER PASSED BY THE LD. CI T(A) IS COMPLETELY SILENT ON THIS ASPECT. THE LD. CIT(A) SEEMS TO HAVE ACCEPTED THE EXPLANATION OF THE ASSESSEE ON THE BASIS OF MERE ARGUMENTS WITHOUT LOOKING INTO TH E EVIDENCE. THERE IS NO INDICATION IN THE APPELLATE ORDER THAT THE ORIGINAL DOCUMENTS WHICH WERE NOT FILED BEFORE THE AO WERE AT ALL FILED BEFORE THE LD. CIT(A). IF THEY WE RE FILED BEFORE THE LD. CIT(A), IT WAS INCUMBENT UPON THE LD. CIT(A) TO GIVE REASONABLE OP PORTUNITY TO THE AO TO REBUT THEM. THE APPELLATE ORDER PASSED BY THE LD. CIT(A) IS COMPLETELY SILENT ON THIS VITAL ISSUE. SECTION 68 OF THE INCOME-TAX ACT ENVISAGES SATISFACTORY EXPLANATION AND NOT ANY EXPLANATION WHICH IS NOT SUPPORTED BY EVIDENCE. THE EXPLANATION WHICH IS NOT SUBSTANTIATED BY EVIDENCE IS NO EXPLANATION. IT IS WELL SETTLED THAT THE PHOTOCOPIES OF THE DOCUMENTS HAVE HARDLY ANY EVIDENTIARY VALUE IN THE ABSENCE OF THEIR ORIGINAL. THIS ASPECT OF THE CASE ALSO SEEMS TO HAVE ESCAPED THE ATTENTION OF THE LD. CIT(A). THE APPELLATE ORDER PASSED BY THE LD. CIT(A) IS THE REFORE SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE WITH THE DIRECTION TO EXAMINE THE MATTER DENOVO IN THE LIGHT OF EVIDENCE ON RECORD. REASONABLE OPPORTUNITY OF HEAR ING SHALL BE GIVEN TO BOTH THE PARTIES. APPEAL FILED BY BOTH THE PARTIES IS TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. ITO V. SANTOKH SINGH 555 & 680/CHANDI/2010 5 ORDER PRONOUNCED ON 13 TH MAY 2011 SD/- SD/- (SUSHMA CHOWLA) (D K SRIVA STAVA) JUDICIAL MEMBER ACCOUNTANT MEM BER CHANDIGARH: THE 13TH MAY 2011 SURESH COPY TO: 1. THE APPELLANT, I.T.O. WARD 1(3), CHANDIGARH 2. THE RESPONDENT, SANTOKH SINGH, 3148-B, SEC 39-D, CHANDIGARH 3. THE CIT(A), CHANDIGARH 4. THE LD. CIT, CHANDIGARH 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH