Shri Satpal Singh, Haryana V. ITO, Rewari

ITA 560/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6988 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 20-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NARESH KUMAR AGGARWAL

Judgement Text

I.T.A .NO.-560/DEL/2016 SATPAL SINGH VS ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-1 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-560/DEL/2016 (ASSESSMENT YEAR-2007-08) SATPAL SINGH, SON OF SH.RAM BAZ YPO GARHI ALWALPUR, DISTT.-REWARI, HARYANA-123401. PAN-EAJPS9941B ( APPELLANT) VS ITO, WARD-2, REWARI. (RESPONDENT) ASSESSEE BY SH.NARESH KUMAR AGGARWAL, ADV. REVENUE BY SH.N.K.BANSAL, SR.DR DATE OF HEARING 20 . 1 0.2016 DATE OF PRONOUNCEMENT 17 . 0 1.201 7 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 20.11.2015 OF CIT(A), ROHTAK PERTAINING TO 200708 ASSESSMENT YEAR ON VARIOUS GROUNDS. HOWEVER, AT THE TIME OF ARGUMENTS, IT WAS SUBMITTED THAT THE ASSESSEE WANTS TO PRESS ONLY GROUND NOS.-1 TO 5. ADDRESSING THE IMPU GNED ORDER, IT WAS SUBMITTED THAT ALTHOUGH EVEN ON FACTS, THE ADDITIONS HAVE BEEN WRO NGLY SUSTAINED, HOWEVER THE ORDER WAS EVEN OTHERWISE BAD IN LAW AS THE JURISDICTIONAL ISS UE RAISED IN THE APPEAL BEFORE THE CIT(A) HAD NOT BEEN ADDRESSED. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS FOUND TO HAVE DEPOSITED CASH AMOUNTING TO RS.30 LACS IN HIS BANK ACCOUNT MA INTAINED WITH THE REWARI CENTRAL COOP BANK LTD, BAWAL. THE ASSESSING OFFICER REQUIR ED THE ASSESSEE TO EXPLAIN THE SAME. CONSIDERING THE EXPLANATION DATED 24.02.2012, THE A SSESSING OFFICER AFTER RECORDING THE REASONS THAT INCOME HAS ESCAPED ASSESSMENT REQUIRED THE ASSESSEE TO FILE ITS RETURN IN RESPONSE TO NOTICE UNDER SECTION 148, THE ASSESSEE FILED A NIL RETURN OF INCOME. AFTER ISSUANCE OF NOTICES UNDER SECTION 143 (2)/142(1) ET C., THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF CASH DEPOSIT OF RS.30 LAKH ON 25.09.2 006 IN HIS BANK ACCOUNT. THE ASSESSEE AS PER HIS REPLY DATED 04.03.2013 STATED THAT THE SAID AMOUNT WAS RECEIVED FROM HIS FATHER. IT PAGE 2 OF 5 I.T.A .NO.-560/DEL/2016 SATPAL SINGH VS ITO WAS EXPLAINED THAT THE ASSESSEES FATHER HAD SOLD H IS AGRICULTURAL LAND TO M/S TRIVENI INFRASTRUCTURE DEVELOPMENT COMPANY AND THE SAID COM PANY HAD PAID HIS FATHER BY CHEQUES OF RS.37,70,309/- DRAWN ON BANK OF BARODA DELHI. THE SAID CHEQUE, IT WAS STATED WAS DISHONOURED BY THE BANK AND AS A RESULT THEREOF THE COMPANY AGREED TO PAY THE AMOUNT IN CASH TO THE ASSESSEES FATHER. OUT OF THIS CASH PA YMENT THE FATHER IT WAS SUBMITTED HAD REQUIRED THE ASSESSEE TO DEPOSIT RS.30 LAKH IN HIS BANK ACCOUNT. THE SAID EXPLANATION WAS NOT ACCEPTED BY THE AO IN VIEW OF THE FOLLOWING REA SONS: I) DURING THE COURSE ASSESSMENT PROCEEDINGS THE AS SESSEE WAS ASKED TO FURNISH THE DOCUMENTARY EVIDENCE REGARDING THE DISH ONOR OF CHEQUE OF RS.37,70,309/- BUT THE ASSESSEE FAILED TO FURNISH A NY DOCUMENTARY EVIDENCE. II) THE FATHER OF THE ASSESSEE SH.RAM BAX IS MAINTA INING HIS OWN BANK ACCOUNT THEN IT DOES NTO STAND TO REASON THAT WHY SH.RAM BA X WILL GIVE THE AMOUNT OF RS.30,00,000/- TO HIS SON INSTEAD OF DEPOSITING THI S AMOUNT INHIS BANK. III) THE ASSESSEE WAS ASKED TO FURNISH PURPOSE OF W ITHDRAWN OF RS.29,99,000/- ON 26.09.2006 THEN HE STATED THAT THIS AMOUNT WAS RETU RNED TO HIS FATHER. BUT THE PERUSAL OF THE BANK STATEMENT OF FATHER OF THE ASSE SSEE REVEALED THAT NO SUCH AMOUNT HAS BEEN DEPOSITED BY THE FATHER OF THE ASSE SSEE IN HIS BANK. IV) THE COMPANY WAS ALSO ASKED TO FURNISH VERIFICAT ION REGARDING MAKING PAYMENT IN CASH TO SH.RAM BAX BUT NO REPLY WAS FURNISH BY T HE COMPANY. 2.1. AS A RESULT OF THESE REASONS, ADDITION OF THE SAID AMOUNT WAS MADE IN THE HANDS OF THE ASSESSEE. 3. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE ASSAIL ED THE TRANSFER OF JURISDICTION FROM ONE AO TO ANOTHER AO. ON MERIT, IT WAS SUBMITTED THAT T HE AGRICULTURAL LAND BELONGING TO SHRI RAM BAX I.E. THE FATHER OF THE ASSESSEE AND HIS BROTHER S HAD BEEN SOLD FOR AN AMOUNT OF RS.3,01,62,500/- TO M/S TRIVENI INFRASTRUCTURE DEVE LOPMENT COMPANY LIMITED, NEW DELHI. THE ASSESSEES FATHER IN LIEU OF HIS SHARE RECEIVED SALE CONSIDERATION OF RS.50,27,084/-. OUT OF THIS, RS.1,50,000/- WAS RECEIVED IN CASH AND THE REMAINING WAS RECEIVED IN THE SHAPE OF CHEQUES PAYABLE ON DIFFERENT DATES. IT WAS SUBMITT ED THAT THE CHEQUES WERE DEPOSITED BY SHRI RAM BAX IN HIS BANK WHICH WAS SPECIFICALLY OPE NED WITH PUNJAB NATIONAL BANK, DHARUHERA FOR THIS PURPOSE. THE SPECIFIC CHEQUE OF RS.37,70,309/- IT WAS SUBMITTED WAS DISHONOURED TWICE ON 1 ST SEPTEMBER AND 12 TH SEP. 2006. IN THE CIRCUMSTANCES, IT WAS SUBMITTED SHRI RAM BAX REQUESTED THE PURCHASER COMP ANY TO PAY THE AMOUNT IN CASH. AS A PAGE 3 OF 5 I.T.A .NO.-560/DEL/2016 SATPAL SINGH VS ITO RESULT OF THIS, THE SAID AMOUNT WAS PAID IN CASH TO THE ASSESSEES FATHER. IT WAS SUBMITTED THAT SINCE ON THE DATE, A BANK EMPLOYEE OF REWARI CENTRA L CO-OPERATIVE BANK, BAWAL WAS VISITING THE VILLAGE, HE WAS REQUESTED TO OPEN THE ACCOUNT I N THE NAME OF THE ASSESSEE. THE DIRECTION TO OPEN THE ACCOUNT IN THE NAME OF THE ASSESSEE IT WAS SUBMITTED HAVE BEEN GIVEN BY THE ASSESSEES FATHER. IN SUPPORT OF THE SAID SUBMISSI ON, COPY OF THE ASSESSEES FATHER'S PASS BOOK, SALE DEED, ASSESSEES PASSBOOK, HIS AND HIS F ATHERS AFFIDAVIT FILED BEFORE THE ITO, WARD NO. 2, REWARI WERE RELIED UPON. IT WAS SUBMITTED T HAT DURING THIS TIME, IT WAS LEARNT THAT THE PURCHASER COMPANY WENT INTO LIQUIDATION. IN THE CI RCUMSTANCES, THE INSISTENCE OF THE AO TO PROVE THAT THE MONEY CAME FROM THE SAID COMPANY WHE N IT WAS ALREADY IN LIQUIDATION BEFORE THE HON'BLE HIGH COURT COULD NOT BE COMPLIED WITH A ND AFFIDAVITS PLACED ON RECORD WERE RELIED UPON. IT WAS SUBMITTED THAT COPIES OF THE BANK PAS SBOOKS, INFORMATION REGARDING THE LIQUIDATION OF THE COMPANY ETC. WERE ALL INFORMATIO N MADE AVAILABLE TO THE AO AND HE FAILED TO DULY CONSIDER THE SAME. THE INTENTION OF THE AO WAS QUESTIONED ALSO ON THE GROUND THAT HE HAD EVEN FAILED TO ADDRESS THE AFFIDAVITS ON RECORD AS HE WAS INTENT ON REJECTING THE EXPLANATION OF THE ASSESSEE SUPPORTED BY A SALE DEE D. RELIANCE WAS PLACED ON VARIOUS DECISIONS OF DIFFERENT COURTS IN SUPPORT OF THE ASS ERTIONS MADE. THE PRIMARY ONUS PLACED UPON THE ASSESSEE IT WAS STATED HAD BEEN DISCHARGED AND IN CASE THE AO STILL SOUGHT THE PRESENCE OF ANYONE FROM THE PURCHASER COMPANY THAN IT WAS FOR THE AO TO ENFORCE ATTENDANCE OF THE WITNESS. IT WAS FURTHER CANVASSE D THAT THE ASSESSEE IS NOT OBLIGED TO EXERCISE HIS RIGHTS IN REGARD TO THE USE OF HIS MON EY AT THE WHIMS OF THE AO. THUS, THE FATHERS CHOICE TO DEPOSIT THE MONEY IN THE BANK AC COUNT OF HIS SONS BANK ACCOUNT IT WAS SUBMITTED CANNOT BE REQUIRED TO BE EXPLAINED AS IT IS THE FATHERS FUNDAMENTAL RIGHT TO USE THE MONEY IN ANY LEGAL MANNER. THESE DETAILED SUBMISSIO NS WHICH HAVE BEEN SUMMED UP ABOVE ARE FOUND RECORDED AT PAGES 4 TO 7 OF THE IMPUGNED ORDER. 3.1. HOWEVER, THE CIT(A) RELYING UPON THE REMAND RE PORT OF THE AO REJECTED THE EXPLANATION OFFERED HOLDING AS UNDER:- PAGE 4 OF 5 I.T.A .NO.-560/DEL/2016 SATPAL SINGH VS ITO A PERUSAL OF THE FACTS REVEAL THAT THE APPELLANT HAS BEEN UNABLE TO PROVE THAT THE DEPOSIT IN HIS ACCOUNT RELATED TO THE AMOUNT PU RPORTED TO BE RECEIVED BY HIS FATHER. IT IS INCOMPREHENSIBLE AS TO WHY WHEN THE FATHER ALREADY MAINTAINED A BANK ACCOUNT, THE DEPOSIT SHOULD BE MADE IN THE SON S ACCOUNT. DISHONORING OF A CHEQUE DOES NOT AUTOMATICALLY MEAN THAT THE AMOUN T OF CASH DEPOSITED IN THE APPELLANTS ACCOUNT RELATED TO THE SAME TRANSACTION . 4. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEF ORE THE ITAT. 5. BOTH THE PARTIES HAVE BEEN HEARD. THE LD.AR INV ITING ATTENTION TO THE COPY OF THE SALE DEED (PAPER BOOK PAGE 44 TO 50) SUBMITTED THAT IT H AD BEEN DEMONSTRATED THAT THE SPECIFIC PIECE OF LAND WAS OWNED BY THE ASSESSEES FATHER A LONGWITH HIS BROTHERS; DOCUMENTS DEMONSTRATING THAT IT WAS SOLD TO M/S TRIVENI INFRA STRUCTURE DEVELOPMENT CO. HAD ALSO BEEN PROVIDED. AFFIDAVIT OF THE SH. RAM BAX (FATHER OF T HE ASSESSEE); AND COPY OF HIS BANK ACCOUNT HAD ALSO BEEN PLACED ON RECORD, THE PAYMENT IT HAS BEEN EXPLAINED WAS RECEIVED FROM HIS FATHER IN CASH ON 24.09.2006 AND DEPOSITED IN HIS B ANK ON 25.09.2006. ON 27.09.2006 IT WAS WITHDRAWN TO THE EXTENT OF RS.29,99,000/- IN CASH A ND HANDED OVER AGAIN TO HIS FATHER WHO UTILIZED THE SAME FOR CONSTRUCTION OF HOUSE IN THE NAME OF HIS FATHER. IT WAS HIS SUBMISSION THAT IN THE CIRCUMSTANCES WHETHER IT WAS RETURNED T O THE FATHER OR WAS ALLOWED TO BE RETAINED BY THE ASSESSEE ON HIS FATHERS INSTRUCTION OR UTI LIZED BY THE FAMILY IN ANY OTHER MANNER, WAS NOT AN ISSUE BEFORE THE TAX AUTHORITIES AS THEY WER E ONLY REQUIRED TO CONSIDER WHETHER THE DEPOSIT OF RS.30 LACS WAS AS PER ASSESSEES EXPLANA TION FROM THE SALE OF THE SPECIFIC PIECE OF LAND SOLD BY THE ASSESSEES FATHER OR NOT. THE ADD ITION ACCORDINGLY IT WAS SUBMITTED WAS WRONGLY SUSTAINED AND HAD THE EVIDENCE MADE AVAILAB LE TO THE AO ORIGINALLY HAS NOT BEEN CONSIDERED. 5.1. THE LD.SR.DR SUBMITTED THAT THE ASSESSEE HAS N OT BEEN ABLE TO SHOW THAT THE AMOUNT HAD BEEN RETURNED TO THE FATHER OR NOT. HOW THE SAI D ISSUE WAS RELEVANT HE WAS UNABLE TO ADDRESS. 6. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. I FIND THAT THE ISSUE WHETHER THE AMOUNT WAS RETURNED TO THE FA THER OR NOT BY THE SON IS NOT THE RELEVANT ISSUE FOR CONSIDERATION IN THE PRESENT PROCEEDINGS. THE ONLY ISSUE WHICH AS PER THE QUERY PAGE 5 OF 5 I.T.A .NO.-560/DEL/2016 SATPAL SINGH VS ITO RAISED BY THE AO WAS WHETHER THE AMOUNT OF RS.30 LA CS FOUND DEPOSITED IN THE ASSESSEES BANK ACCOUNT CAN BE STATED TO BE EXPLAINED BY THE S ALE OF AGRICULTURAL LAND TO M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO. BY THE ASSESSEES F ATHER OR NOT. I FIND THAT NO EFFORT HAS BEEN MADE BY THE TAX AUTHORITIES TO ADDRESS THE AFFIDAVI TS OF THE ASSESSEE AND HIS FATHER ADMITTEDLY ON RECORD. SPECIFIC LAND WAS SOLD BY THE ASSESSEE S FATHER AND THE CHEQUES ISSUED BY M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO. WERE NOT HON OURED BY THE BANK IS A CONSISTENT UNREBUTTED CLAIM ON RECORD. THE AMOUNT ULTIMATELY WAS HANDED IN CASH BY M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO. IS ALSO A CONSISTENT CLAIM ON RECORD. COPIES OF BANK PASS BOOKS OF ITS FATHER AND SON OF THE ASSESSEE IN SUPP ORT OF THE AFFIDAVITS FILED ARE ALSO STATED TO BE ON RECORD. I FIND THAT ON THESE MATERIAL DOCUME NTS THERE IS NO DISCUSSION WHATSOEVER IN THE ORDERS OF THE TAX AUTHORITIES. ACCORDINGLY, HO LDING THE ORDER DEVOID OF DISCUSSION ON MATERIAL FACTS, THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO DIRECTING THE SAID AUTHORITY TO PASS A SPEAKING ORDER DENOVO IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEI NG HEARD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH OF JANUARY, 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR, ITAT NEW DELHI