Labh Singh, Kaithal V. ITO, Kaithal

ITA 565/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64012 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 24-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: PERMIL GOEL
• Keywords: Unexplained investment; Peak credit; Initiation of penalty proceedings; Assessment record
• Section: 80C; 148; 144; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 565/CHD/2011 ASSESSMENT YEAR : 2006-07 LABH SINGH V I.T.O. WARD 3, KAITHAL KAITHAL BIJPS 0123 C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI PERMIL GOEL RESPONDENT BY SHRI N.K. SAINI DATE OF HEARING 16.10.2012 DATE OF PRONOUNCEMENT 31.10.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A), KARNAL DATED 16.3.2011. 2. IN THIS APPEAL FOLLOWING CONCISE GROUNDS HAVE BE EN RAISED: 1 THAT NOTICE U/S 148 IS NOT A LEGAL AND VALID NO TICE. 2. ADDITION OF RS. 20,01,027/- U/S 69 IS ILLEGAL. ARBITRARY AND AGAINST FACTS OF THE CASE AS SECTION 69 IS NOT APPLICABLE IN OUR CASE AND MORE OVER THE ADDITI ON IS NOT IN THE TRUE SPIRIT OF SECTION 69 BECAUSE NO BOO KS OF ACCOUNT A RE MAINTAINED AND ALL THE TRANSACTION APP EARS IN BANK ACCOUNT AND IT IS ALSO NOT A CASE WHERE NO EXPLANATION IS GIVEN, RATHER COMPLETE EXPLANATION W AS GIVEN DURING ASSESSMENT PROCEEDINGS ALONG WITH COMP LETE EVIDENCES AND DISCHARGED BURDEN AND SHIFTED IT TO T HE DEPARTMENT TO PROVE OTHERWISE. (A) ADDITION OF RS. 14,82,942/- ON ACCOUNT OF DEP OSITS IN BANK U/S 69 HAS BEEN MADE IGNORING THE TRUE NATU RE OF RECEIPTS IN HANDS OF ASSESSEE IS TRADING RECEIPTS B ECAUSE THESE AMOUNTS REPRESENTS AMOUNT RECEIVED FROM VARIO US APPLICANTS FOR APPLYING OF PLOTS/FLATS AND CURRENT INCOME OF ASSESSEE. 2 (B) ADDITION OF RS. 4,98,775/- CREDITED ON 3.12.20 05 BEING CHEQUE RECEIVED FROM SHRI JOGI RAM IS ALSO IL LEGAL A S THE AMOUNT WAS RECEIVED IN LIEU OF CHEQUE OF RS. 2.00 LAKHS ISSUED ON 24.8.2005 AND ON ACCOUNT OF HP SHI MLA, FLAT APPLIED THROUGH APPELLANT ON 6..12.2005. (C) ADDITION OF RS. 19,310/- BEING CHEQUES OF RS. 810/- AND RS. 18,500/- CREDITED ON 22.3.2006 IS ALSO ILLE GAL AS THE AMOUNT WAS RECEIVED ON ACCOUNT OF REFUND RECEI VED FROM HOUSING BOARD, HARYANA. 3. GROUND NO. 1 REGARDING ISSUE OF NOTICE U/S 148 WAS NOT PRESSED BEFORE US, THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. 4. GROUND NO. 2 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED RETURN DECLARING INCOME OF RS. 9 9,500/- FROM TUITION ON 29.3.2007 WHICH WAS PROCESSED ON 30 .3.2007. LATER ON INFORMATION WAS RECEIVED FROM CIT(CIB), CH ANDIGARH THAT THE ASSESSEE HAS DEPOSITED CERTAIN CASH DEPOSI T IN HIS BANK ACCOUNT. IT WAS ALSO NOTICED THAT THE ASSESSE E HAS DERIVED INCOME OF RS. 8800/- AS INTEREST FROM HIS B ANK ACCOUNT IN BANK OF BARODA, KAITHAL WHICH WAS ALSO NOT SHOWN AS INCOME. ON VERIFICATION OF THE INFORMATION RECEIVE D FROM CIB, IT WAS NOTICED THAT THE ASSESSEE HAS DEPOSITED A SUM O F RS. 41,72,853/- IN HIS BANK ACCOUNT DURING THE YEAR. I N VIEW OF THESE FACTS A NOTICE U/S 148 WAS ISSUED ON 1..8.200 8. IN RESPONSE TO THIS NOTICE RETURN DECLARING INCOME OF RS. 1,20,890/- AFTER CLAIMING DEDUCTION U/S 80C AMOUNTI NG TO RS. 41,414/- WAS FILED. DURING ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCES OF DEPOSI T IN THE BANK ACCOUNT WITH BANK OF BARODA, KAITHAL. HE WAS ALSO ASKED TO GIVE THE DETAILS OF TUITION INCOME AND EVIDENCE REGARDING INCOME OF THE MINOR DAUGHTER. IN RESPONSE IT WAS S UBMITTED THAT DEPOSITS WERE MADE EITHER OUT OF WITHDRAWALS M ADE FROM BANK OR CASH RECEIVED FROM VARIOUS APPLICANTS FOR M AKING DDS IN FAVOUR OF HUDA/HARYANA HOUSING BOARD AND ANSALS . IT WAS STATED THAT THE ASSESSEE HAS RECEIVED PROFESSIONAL CHARGES FOR PROVIDING SERVICES TO HANDLE CASH AND MAKING OF DDS FROM HIS BANK ACCOUNT AND DEPOSIT OF THE SAME WITH HUDA/HOUS ING BOARD, HARYANA ETC. THE AO NOTICED THAT NO SERVICE CHARGES WERE REFLECTED IN THE ORIGINAL RETURN OR IN THE RET URN FILED IN RESPONSE TO SECTION 148 OF THE ACT. DURING ASSESSM ENT 3 PROCEEDINGS IT WAS STATED THAT THE INCOME OF RS. 99 ,500/- SHOWN UNDER THE HEAD INCOME FROM BUSINESS OR PROFE SSION INCLUDED SERVICE CHARGES ALSO AND LIST SHOWING SERV ICE CHARGES GIVING DATA AND NAME OF THE AUTHORITY CONCERNED IN WHOSE FAVOUR DDS WERE ISSUED, WAS FILED. THE AO SPECIFIC ALLY REQUESTED THE ASSESSEE VIDE LETTER DATED 29.6.2009 TO FURNISH DOCUMENTS FOR RECEIPT OF MONEY FROM THE SAID PERSON S, COPIES OF THEIR ACCOUNTS. THE ASSESSEE WAS ALSO REQUESTED TO PRODUCE THESE PERSONS FOR VERIFICATION. THE ASSESS EE RESPONDED THAT HE WAS NOT IN A POSITION TO SUPPLY A LL THE NAMES OF THE CUSTOMERS. IT WAS FURTHER STATED HE HAS CHA RGED FOR THE SERVICES RENDERED TO SUCH CUSTOMERS AND WHEREABOUTS OF THE PERSONS IS NOT KNOWN TO HIM. SINCE NO DETAILS REGA RDING RECEIPTS, NAMES OF THE APPLICANTS WERE KEPT BY HIM, THE SAME COULD NOT BE EXPLAINED. HE REQUESTED THE AO THAT S UCH DETAILS MAY BE OBTAINED FROM HIMUDA/HOUSING BOARD, HARYANA. THE AO FURTHER ISSUED A LETTER DATED 21.8.09 ASKING FOR THESE DETAILS AND THE DETAILS IN THE QUESTIONNAIRE. AT T HIS STAGE INSTEAD OF MAKING ANY RESPONSE TO THE AO, THE ASSES SEE MOVED AN APPLICATION U/S 144A OF THE ACT TO J.C.I.T., KUR UKSHETRA RANGE, KURUKSHETRA. SIMULTANEOUSLY AN APPLICATION W AS MOVED BEFORE THE AO TO GET THE ASSESSMENT PROCEEDINGS PE NDING TILL DISPOSAL OF THE APPLICATION U/S 144A. BEFORE THE J .C.I.T. THE ASSESSEE FILED VARIOUS SUBMISSIONS WHICH WERE FORWA RDED TO THE AO AND THE AO ACCORDINGLY SUBMITTED THE DETAILS VIDE LETTER NO. 1360 DATED 6.10.2009 WHICH HAS BEEN REPRODUCED BY THE AO AT PARA 2.5. AFTER CONSIDERING THIS REPORT THE J.C.I.T. KURUKSHETRA RANGE, KURUKSHETRA ISSUED THE DIRECTION S U/S 144A WHICH READ AS UNDER:- IN THIS CONNECTION, . THE COUNSEL OF THE ASSESSEE S H. PERMIT GOEL. ADVOCATE MOVED AN APPLICATION U/S 144 A IN THE CASE OF THE A BOVE REFERRED ASSESSEE FOR THE A.Y. 2006-07 ON 01.09.2009. AND SUBSEQUENT REPLY SUBMITTED ON 24.09.2009 WHICH WERE ALREADY FILED BY THE ASSESSEE AS WELL AS FORWARDED BY THE UNDERSIGNED TO YOUR OFF ICE. YOUR REPORT SUBMITTED VIDE NO. 1360 DATED 6.10.2009 HAS BEEN CO NSIDERED. FURTHER, THE ASSESSEE'S COUNSEL AS PER HIS REPLY DATED. 9.10.200 9 HAS SURRENDERED PEAK CREDIT AND OTHER UNEXPLAINED INVESTMENT OF RS.2L,90 ,527/- SUBJECT TO NO PENAL ACTION. THE ASSESSEE'S OFFER OF SURRENDER OF THE FOLLOWING INCOMES SUBJECT TO NO PENAL ACTION IS UNILATERAL ACTION BY WHICH THE INCOME TAX DEPARTMENT IS NOT BOUND. IT IS THEREFORE, DIRECTED THAT THE FOLLOWING INCOMES WHICH HAVE BEEN SURRENDERED BY THE ASSESSEE ALREADY STAND DETECTED BY THE ASSESSING OFFICER VIDE HIS SHOW CAU SE LETTER ADDRESSED TO THE ASSESSEE ON 21.08.2009 HENCE, PENALTY PROCEEDINGS U /S 271 (1 (C )SHALL BE INITIATED FOR CONCEALMENT OF INCOME IN RESPECT OF T HE 4 FOLLOWING UNEXPLAINED INVESTMENT FOR APPLYING FOR P URCHASE OF PLOTS / FLATS OF HUDA, HIMUDA, CHANDIGARH HOUSING B OARD, ANSALS ETC. (I) PEAK CASH INVESTMENT IN BANK A/C NO.20010462 OF THE ASSESSEE AND BANK ACCOUNT NO.20013626 OF BABY SHIKHA (MINOR DAUGHTER) WITH BANK OF BARODA, KAITHAL AND KISSAN CREDIT A/C NO.55225 16,72,442/- (II) UNEXPLAINED CHEQUE DEPOSIT IN BANK ACCOUNT FROM SHRI JOGI RAM, WHOSE CREDITWORTHINESS HAS NOT BEEN PROVED AND SURRENDERED BY THE ASSESSEE. 4,98,775/- III UNEXPLAINED CHEQUE DEPOSITS IN BANK ON 29.2.2006 OF RS. 810/- AND ON 22.3.2006 RS. 18,500/- AND SURRENDERED BY THE ASSESSEE. 19,310/- TOTAL 21,90, 527/- ALTHOUGH, THE ASSESSEE HAS COME FORWARD TO SURREND ER THE ABOVE INCOME, THE ASSESSMENT ORDER MAY BE FURTHER STRENGTHENED BY CALLING FOR THE INFORMATION FROM THE ASSESSEE IN RESPECT OF PLOT / FLATS APPLIED FOR ALLOTTED IN THE NAME OF THE ASSESSEE, HIS WIFE SMT ANITA RANI AND H IS DAUGHTER BABY SHIKHA THE SURRENDER OF THE ASSESSEE AMOUNTING TO RS. 21, 90,527/- IS ACCEPTED SUBJECT TO INITIATION OF PENALTY PROCEEDINGS FOR CONCEALMENT O F INCOME U/- 271 (1) (C ) OF THE IT. ACT. COPY OF SURRENDER LETTER IN ORIGINAL AS GI VEN BY THE COUNSEL FOR THE ASSESSEE IS ENCLOSED. 5 SINCE IN THE DIRECTIONS IT IS CLEARLY STATED BY T HE J.C.I.T. THAT THE ASSESSMENT ORDER MAY BE FURTHER STRENGTHEN ED BY CALLING FOR THE INFORMATION FROM THE ASSESSEE IN RE SPECT OF PLOTS/FLATS APPLIED FOR AND ALLOTTED IN THE NAME OF THE ASSESSEE, HIS WIFE SMT. ANITA RANI AND HIS DAUGHTER, BABY SHI KHA. THE AO ACCORDINGLY ASKED THE ASSESSEE TO FURNISH THIS INFORMATION. THE INFORMATION WAS FURNISHED BY THE ASSESSEE AND I T WAS FURTHER STATED AGAIN THAT ALL OTHER BANK DRAFTS PUR CHASED FROM HIS BANK ACCOUNT RELATE TO APPLICATION FOR PLOTS AN D FLATS BY OTHERS AND INCOME FROM PROVIDING THESE SERVICES HAS ALREADY BEEN DECLARED IN THE RETURN OF INCOME. SINCE NO CR EDIBLE EVIDENCE WAS PRODUCED BY THE ASSESSEE FOR RECEIVING CASH FROM THIS WHICH HAS BEEN DEPOSITED IN THE BANK FOR ISSUING DRAFTS. THE AO HELD THAT THE FLATS/PLOTS HAVE BEEN APPLIED IN THE NAME OF THE FAMILY MEMBERS OR IN THE NAME OF BE NAMI PERSONS. SINCE NO EVIDENCE WAS FILED REGARDING INC OME EARNED 5 FOR RENDERING SERVICES TO OTHER PLOT APPLICANTS AND NO SUCH PERSONS WERE PRODUCED DESPITE SPECIFIC REQUEST, THE AO HELD THAT IT CAN NOT BE ACCEPTED THAT THE ASSESSEE HAD R ENDERED ANY SERVICES FOR APPLYING THE PLOTS/FLATS. ACCORDING T O THE AO IN THE ABSENCE OF ANY EVIDENCE FOR DEPOSIT IN CASH AND ALSO IN VIEW OF THE DIRECTIONS U/S 144A AN ADDITION OF RS. 21,90,527/- WAS MADE. 6 ON APPEAL BEFORE THE LD. CIT(A), SIMILAR SUBMISSI ONS WERE REITERATED. IT WAS FURTHER CONTENDED THAT THERE WA S NO COLUMN IN SARAL TAX RETURN FORM AND HENCE THE PROFESSIONAL INCOME COULD NOT BE SHOWN IN THE RETURN BUT THE COMPLETE D ETAILS WERE FILED ON 22.6.2009 WHEREIN IT WAS CLARIFIED THAT IN COME FROM TUITION WAS RS. 63,050/- AND INCOME FROM SERVICE CH ARGES WAS RS. 36,450/-. IT WAS AGAIN EMPHASIZED THAT ONCE CO MPLETE PAYMENT WAS RECEIVED THEN THERE WAS NO NEED TO TAKE THE DETAILS OF CUSTOMERS INCLUDING HIS IDENTITY. IT WAS CONTENDED THAT NAMES WERE SUPPLIED TO THE AO AND HE COULD EAS ILY ENQUIRE FROM GOVERNMENT AUTHORITIES LIKE HUDA/HOUSI NG BOARD, HARYANA AND ANSALS. IT WAS REITERATED THAT SUCH DET AILS WERE PROVIDED TO THE AO IN RESPECT OF S/SHRI GURDIAL SI NGH, NIHAL SINGH AND JOGI RAM. IT WAS CONTENDED THAT SURRENDE R OF RS. 21,90,527/- WAS MADE BEFORE THE J.C.I.T. SUBJECT TO THE CONDITION THAT NO PENALTY WOULD BE IMPOSED. FURTHE R THIS OFFER WAS ACCEPTED IN PART BECAUSE SURRENDER HAS BEEN ACC EPTED BUT THE DIRECTION TO INITIATE PENALTY U/S 271(1)(C) OF THE ACT HAS ALSO BEEN GIVEN. IN RESPECT OF SHRI GURDIAL SINGH , IT WAS STATED THAT A SUM OF RS. 1,59,500/- WAS RECEIVED FR OM HIM ON 9.2.2006 WHICH WAS GIVEN BY HIM TO THE ASSESSEE OUT OF THE CASH WITHDRAWN AMOUNTING TO RS. 2.5 LAKHS FROM THE BANK ACCOUNT ON THE SAME DAY. IT WAS CONTENDED THAT AFF IDAVIT OF SHRI GURDIAL SINGH, COPY OF BANK ACCOUNT WAS FURNIS HED BEFORE THE AO. SIMILARLY CHEQUE NO. 98775 DATED 3.12.2005 WAS RAISED FROM ONE SHRI JOGI RAMN ON ACCOUNT OF HP SH IMLA FLAT AT PARWANOO. THIS FLAT WAS ALLOTTED TO SHRI JOGI R AM WHICH WAS CONFIRMED BY HIM THOUGH AFFIDAVIT. THE INFORMATION WHICH WAS IN WRITTEN FORM WERE PROVIDED TO THE AO FOR HIS COM MENTS. THE AO IN HIS COMMENTS MAINLY STATED THAT THE ASSESSEE HAD ORIGINALLY FILED RETURN DECLARING INCOME OF RS. 99, 500/- AND AGAINST COLUMN NO. 17 WHICH REFERS TO BUSINESS OR P ROFESSION, 6 HAS BEEN CLARIFIED BY INSTRUCTION NO. 6. IT WAS MA INLY STATED THAT THE ASSESSEE HAD MERELY DECLARED ESTIMATED INC OME FROM TUITION. IN ANY CASE THE ASSESSEE COULD NOT EXPLAI N THE DEPOSITS AND HE HAS NOT PROVIDED THE NAMES AND ADDR ESSES OF THE PERSONS FROM WHOM THE ASSESSEE WAS CLAIMING TO HAVE RECEIVED THE CASH AND MADE APPLICATIONS ON BEHALF O F SUCH PERSONS. IN FACT THE ASSESSEE HAD TRIED TO SHIFT T HE BURDEN BY ASKING THE AO TO MAKE INQUIRIES FROM HUDA AND OTHER PARTIES. IN RESPECT OF SHRI GUDIAL SINGH, THE AO REITERATED THAT THE AMOUNT RECEIVABLE FROM SHRI GURDIAL SINGH WAS RS. 1 ,85,400/- AND SHRI GURDIAL SINGH HAD WITHDRAWN AN AMOUNT OF R S. 2,50,000/- FROM HIS BANK THEN WHY SHOULD HE PAID RS . 1,59,000/- INSTEAD OF RS. 1,85,400/-. IN RESPECT O F SHRI JOGI RAM, IT WAS STATED THAT THE ASSESSEE WAS SPECIFICAL LY REQUESTED TO PRODUCE SHRI JOGI RAM FOR VERIFICATION BUT HE HAD FAILED TO PRODUCE THE PERSON. IT WAS FURTHER NOTED THAT IN CASE OF SHRI JOGI RAM A SUM OF RS. 4,98,592/- WAS CREDIT ED IN THE BANK ACCOUNT ON 2.12.2005 AND ON THE OTHER HAND, N EXT DAY THE CHEQUE FOR RS. 4,98,775/- WAS ISSUED IN THE NAM E OF ASSESSEE. THERE WAS NO INDICATION FOR THE SOURCE OF RS. 4,98,592/-. REGARDING CHEQUE OF 18,500/- THE ASSESS EE HAD CLAIMED THAT THE AMOUNT WAS RECEIVED FROM HARYANA H OUSING BOARD ON ACCOUNT OF REFUND OF CASH DEPOSITS IN STTE BANK OF INDIA, KURUKSHETRA BEING UNSUCCESSFUL DRAW BUT NO E VIDENCE WAS FILED. THE COMMENTS OF THE AO WERE PROVIDED TO THE ASSESSEE FOR FURTHER COMMENTS. THE ASSESSEE IN HI S COMMENTS REITERATED THE SUBMISSIONS MADE EARLIER. 7 THE LD. CIT(A) AFTER EXAMINING THE ISSUE IN DETAI L, ALLOWED THE RELIEF IN RESPECT OF MONEY RECEIVED FROM SHRI GURDIAL SINGH BECAUSE THERE WAS CLEAR EVIDENCE IN THE FORM OF BAN K STATEMENT THAT SHRI GURDIAL SINGH HAD WITHDRAWN A S UM OF RS. 2,50,000/- FROM HIS BANK ACCOUNT. HE ALSO ALLOWED A RELIEF OF RS. 30,000/- ON ACCOUNT OF SET OFF OF THE CURRENT INCOME. THE ASSESSEE HAS CLAIMED A SET OFF OF RS. 60,000/-. AC CORDING TO THE AO INCOME MUST HAVE BEEN CONSUMED IN HOUSEHOLD WITHDRAWALS BUT THE LD. CIT(A) OBSERVED THAT NO SE PARATE ADDITION HAS BEEN MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS, THEREFORE, CLAIM OF THE ASSESSEE WAS ACCEPTED BY OBSERVING THAT IT IS DIFFICULT TO BELIEVE THAT FAMI LY COMPRISING OF 7 FOUR PERSONS OUT OF WHICH TWO SCHOOL GOING CHILDREN , CAN MANAGE THE HOUSEHOLD EXPENSES AT RS. 5,000/- PM. A FTER CONSIDERING THE ENTIRETY OF THE FACTS A RELIEF OF R S. 30,000/- WAS ALLOWED. 8 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE MAINLY RELIED ON THE WRITTEN SUBMISSIONS WHICH ARE AT PAGE A TO E OF THE PAPER BOOK IN WHICH SUBMISSIONS MADE BEFORE THE LOW ER AUTHORITIES HAD BEEN REITERATED. THE LD. COUNSEL O F THE ASSESSEE FURTHER RELIED ON THE DECISION OF KALWA DE VADATTAM & OTHERS V UNION OF INDIA & OTHERS, 49 ITR 165 AND AN OTHER DECISION REPORTED AT 282 ITR 540 (AFTER CAREFULLY G OING THROUGH THE ITR WE COULD NOT LOCATE ANY DECISION AT PAGE 54 0 OF ITR 282). HOWEVER, PROPOSITION WHICH WAS RELIED ON BY THE ASSESSEE WAS THAT IN THESE TWO DECISIONS IT HAS BEE N CLEARLY LAID DOWN THAT APPARENT STATE OF AFFAIRS SHOULD BE PRESUMED TO BE REAL UNLESS CONTRARY IS PROVED. HE HAS ALSO REL IED ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. SMT. P.K. NOORJEHAN, 237 ITR 570 FOR THE PROPOSITION THAT THE AO IS NOT OBLIGED TO ADD SOURCES OF INVESTMENT AS INCOME WHEN EVER EXPLANATION REGARDING THE SAME, IS NOT SATISFACTORY . 9 ON THE OTHER HAND, LD. DR FOR THE REVENUE STRONGL Y SUPPORTED THE ORDER OF AO AND LD. CIT(A). HE ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF 28 2 ITR 540. 10 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY IN THE LIGHT OF MATERIAL ON RECORD AS WELL AS THE DECISIONS CITE D BY THE PARTIES. NO DOUBT THE OBSERVATION MADE BY HON'BLE SUPREME COURT IN CASE OF KALWA DEVADATTAM & OTHERS V UNION OF INDIA & OTHERS, 49 ITR 165 THAT APPARENT SHOULD BE TAKEN AS REAL UNLESS PROVED OTHERWISE. HOWEVER, THE HON'BLE SUPR EME COURT ITSELF IN LATER DECISION IN CASE OF CIT V. DURGA PR ASAD MORE, 82 ITR 540 HAD OBSERVED AS UNDER: THAT THOUGH AN APPARENT STATEMENT MUST BE CONSIDER ED REAL UNTIL IT WAS SHOWN THAT THERE WERE REASONS TO BELIEVE THAT THE APPARENT WAS NOT THE REAL, IN A CASE WHERE A PARTY RELIED ON SELF-SERVING RECITALS IN DOCUMENTS, IT WAS FOR THAT PARTY TO ESTABLISH THE TRUTH OF THOSE RECI TALS: THE TAXING AUTHORITIES WERE ENTITLED LOOK INTO THE SURR OUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF SUCH RECIT ALS. 8 THUS IT IS CLEAR THAT WHEREVER A PARTICULAR STATE D OES NOT SEEN TO BE REAL THEN THE PARTY ALLEGING THAT STATE OF AF FAIRS HAS TO BE PROVE THE SAME. 11 AGAIN IN CASE OF CIT V. SMT. P.K.NOORJEHAN (SUPR A) THE HON'BLE SUPREME COURT HAS HELD AS UNDER: IN THE CORRESPONDING CLAUSE OF THE BILL WHICH WAS INTRODUCED IN PARLIAMENT WHILE INSERTING SECTION 69 IN THE INCOME-TAX ACT, 1961 THE WORD SHALL HAD BEEN USED BUT DURING THE COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMITTEE, THE SAID WO RD WAS SUBSTITUTED BY THE WORD MAY. THIS CLEARLY IN DICATES THAT THE INTENTION OF PARLIAMENT IN ENACTING SECTIO N 69 WAS TO CONFER A DISCRETION ON THE INCOME-TAX OFFICER IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH H AS NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE AS TH E INCOME OF THE ASSESSEE AND THE INCOME-TAX OFFICER I S NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOM E IN EVERY CASE WHERE THE EXPLANATION OFFERED BY THE ASS ESSEE IS FOUND TO BE NOT SATISFACTORY . THE QUESTION WHETHER THE SOURCE OF THE INVESTMENT SHOULD BE TREATED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER W ORDS, A DISCRETION HAS BEEN CONFERRED ON THE INCOME-TAX OFFICER U/S 69 OF THE ACT TO TREAT THE SOURCE OF INVESTMENT A S THE INCOME OF THE ASSESSEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY AND THE SAID DISCRETION HAS TOBE EXERC ISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. 12 IN ABOVE ALSO HIGHLIGHTED PORTION CLEARLY SHOWS THAT THERE IS NO UNIVERSAL RULE THAT WHEREVER A SOURCE INVESTM ENT IS DOUBTED BY THE AO THEN THE SAME CANNOT BE ADDED TO THE INCOME. IN FACT HON'BLE COURT HAS VERY CLEARLY STA TED THAT IT HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF E ACH CASE. 13 IN THE CASE BEFORE US, THE ASSESSEE HAS STATED T HAT HE WAS PROVIDING PROFESSIONAL SERVICES TO SOME PERSONS BY HELPING THEM IN FILLING UP THE APPLICATIONS AND WAS ALLOWIN G USE OF HIS BANK ACCOUNT IN GETTING THE DRAFTS MADE IN FAVOUR O F THE VARIOUS GOVERNMENT AUTHORITIES FOR MAKING APPLICATI ONS FOR ALLOTMENT OF PLOTS/FLATS. IT IS HIGHLY DOUBTFUL TH AT ANY PERSON HAVING BANK ACCOUNT WOULD COME TO THE ASSESSEE AND USE ASSESSEES BANK ACCOUNT. IT IS POSSIBLE THAT THE A SSESSEE 9 WOULD HELP OTHER PERSONS IN PREPARING AND FILLING U P THE APPLICATIONS BUT NO PERSON WOULD ALLOW HIS BANK ACC OUNT TO BE USED BY RECEIVING CASH FROM SUCH PERSONS THEN ISSUI NG THE DDS IN FAVOUR OF THE GOVERNMENT AUTHORITIES. FOR EXAM PLE IN CASE OF SHRI GURDIAL SINGH AND SHRI JOGI RAM, IT WAS SHO WN THAT THESE TWO PERSONS HAD WITHDRAWN MONEY FROM THEIR BA NK ACCOUNTS AND GIVEN IT TO THE ASSESSEE. WHEN THESE P ERSONS ALREADY HAD BANK ACCOUNTS WHY THESE PERSONS WOULD U SE ASSESSEES ACCOUNT. THOUGH THE LD. CIT(A) HAS ALLO WED RELIEF IN CASE OF SHRI GURDIAL SINGH AND THE REVENUE HAS N OT FILED ANY APPEAL AGAINST THE RELIEF, WE WOULD NOT MAKE ANY FU RTHER COMMENTS. EVEN IF ASSUMING FOR A SECOND THAT PEOPLE REALLY GAVE CASH TO THE ASSESSEE THEN IT IS IMPOSSIBLE TO BELIEVE THAT THE ASSESSEE IS NOT MAINTAINING ANY RECORD OF SUCH PERSONS AND NOT MAINTAINING EVEN THE NAMES AND ADDRESSES OF SUC H PERSONS. NO OUTSIDER WOULD GIVE CASH TO UNKNOWN PE RSONS. THE ASSESSEE HAD SIMPLY NOT DISCHARGED HIS ONUS BEC AUSE NO DETAILS COMPRISING NAMES AND ADDRESSES OF THE PERSO NS FROM WHO CASH WAS SUPPOSED TO HAVE BEEN RECEIVED WAS PRO VIDED TO THE DEPARTMENT. IT WAS SIMPLY STATED THAT THE DEPA RTMENT SHOULD VERIFY THE DETAILS FROM HUDA AND OTHER GOVER NMENT DEPARTMENTS ON THE BASIS OF INFORMATION PROVIDED BY THE ASSESSEE. IT IS SETTLED POSITION OF LAW THAT FOR A NY CASH CREDIT, THREE INGREDIENTS HAVE TO BE PROVED I.E. (I) IDENTI TY OF THE PARTY, (II) GENUINENESS OF THE TRANSACTION AND (III) CAPAC ITY OF SUCH PARTY TO GIVE SUCH MONEY. IN CASE BEFORE US EVEN T HE FIRST INGREDIENT I.E. IDENTITY OF THE PARTY HAS NOT BEEN PROVED BECAUSE THE ASSESSEE HAS NOT FURNISHED THE NAMES AN D ADDRESSES OF SUCH PERSONS BEFORE THE AO OR THE LD. CIT(A) OR EVEN BEFORE US. WE DO NOT UNDERSTAND HOW THE DEPAR TMENT CAN 10 VERIFY THE SOURCE IN THE HANDS OF THE STRANGER BY W RITING TO THE HUDA ONLY ON THE BASIS OF NAME EVEN SUCH GOVERNMENT AUTHORITIES MAY NOT BE ABLE TO PROVIDE ANY INFORMAT ION. WE FURTHER FIND THAT THE LD. CIT(A) HAS RECORDED THE D ETAILED FINDING FROM PARA 1.17 TO 1.21 WHICH IS REPRODUCED HEREUNDE R: 1.17 THE ISSUE IS CONSIDERED. THE FACTS IN BRIEF ARE THAT THE ASSESSING OFFICER RECEIVED INFORMATION FROM CIT(CIB) REGARDIN G SUBSTANTIAL DEPOSITS MADE IN THE BANK ACCOUNT OF THE APPELLANT. THE AO F URTHER NOTED THAT INTEREST OF RS.8800/- CREDITED IN HIS BANK ACCOUNT WAS NOT DECLARED IN THE RETURN OF INCOME ALREADY FILED BESIDES DETAILS AND SOURCE OF DEPOSITS OF RS.41,72,853/- MADE IN HIS BANK ACCOUNT DURING THE YEAR WERE NOT VERIFIABLE FROM THE RETURN OF INCOME. NOTICE U/S 14 8 OF THE ACT WAS, THEREFORE, ISSUED BY THE AO AFTER RECORDING THE REA SONS. IN RESPONSE TO WHICH, RETURN DECLARING AN INCOME OF RS.1,20,890/- AS AGAINST INCOME OF RS.99,500/- DECLARED IN THE ORIGINAL RETURN OF INCO ME, WAS FILED. THE APPELLANT CLAIMED THAT HE IS RENDERING SERVICES OF FILING APPLICATION FOR PLOTS/HOUSES WITH HUDA, HOUSING BOARD, HARYANA, CHA NDIGARH ETC. FOR WHICH HE CHARGES SERVICE CHARGES FROM THE PERSON CO NCERNED. HE PREPARED THE DRAFT FROM HIS BANK ACCOUNT TO BE FILE D ALONGWITH THE APPLICATION FORM WHICH WAS RECEIVED FROM PERSON IN ADVANCE/PART IN ADVANCE OR IN SOME CASES THE ENTIRE AMOUNT IS RECEI VED LATERON. THE AO ASKED THE APPELLANT TO FURNISH THE COMPLETE NAME AND ADDR ESS OF THE PERSONS, THEIR CONFIRMATIONS AND TO PRODUCE THEM FOR VERIFICATION OF FACTS. THE APPELLANT COULD NEITHER FILE THE DETAILS OF THE PERSONS NOR C OULD PRODUCE THEM. HE HOWEVER, FILED NAME OF SOME OF .THE PERSONS BUT NO VERIFICATION COULD BE DONE FOR WANT OF THEIR ADDRESSES. SUBSEQUENTLY THE APPELLANT FILED AN APPLICATION U/S 144A OF THE ACT TO THE RANGE HEAD F OR SEEKING DIRECTIONS IN THIS REGARD. DURING THE PROCEEDINGS U/S 144 A OF TH E ACT, THE APPELLANT SURRENDERED INCOME OF RS.21,90,527/- ON ACCOUNT OF PEAK OF THE DEPOSITS MADE IN BANK RS. 16,72,414/-, UNEXPLAINED DEPOSITS IN BANK FROM SH. JOGI RAM AMOUNTING TO RS.4,98,775/- AND RS . 19,310/- ON ACCOUNT OF UNEXPLAINED CHEQUES /DEPOSITS IN THE BAN K. THE APPELLANT AS USUAL, SURRENDERED THE INCOME SUBJECT TO NO PENALTY WHICH WAS REJECTED BY THE JCIT IN HIS DIRECTIONS ISSUED U/S 144A OF THE A CT WHICH HAS BEEN REPRODUCED ABOVE ALSO. THE APPELLANT AS SUCH WAS AW ARE OF THE FACT THAT HIS PROPOSAL OF SURRENDER OF INCOME SUBJECT TO NO PENAL TY WAS REJECTED BY THE JCIT. IT IS ALSO ENDORSED BY THE FACT THAT THE AO, ON RECEIPT OF THE DIRECTIONS OF THE RANGE HEAD, AFFORDED ONE MORE OPPORTUNITY TO TH E ASSESSEE AND TO FURNISH THE COMPLETE DETAILS IN RESPECT OF PLOTS/ F LATS APPLIED FOR/ ALLOTTED IN HIS NAME, IN THE NAME OF HIS WIFE OR DAUGHTER AN D ANY OTHER MEMBERS OF HIS FAMILY PER LETTER DATED 21.10.2009. THE PLEA OF THE APPELLANT THAT ON RECEIPT OF ASSESSMENT ORDER, HE WAS SURPRISED TO SE E THAT HIS PROPOSAL/HIS OFFER ACCEPTED IN PART BY THE DEPARTME NT IS, THEREFORE, NOT CORRECT/ TENABLE. 1.18 NOW COMING TO THE MERITS OF THE SUBMISSIONS MA DE BY THE APPELLANT, IT IS NOTED THAT THE SAME WERE CONSIDERE D BY THE AO IN HIS ORDER AND IN HIS COMMENTS FILED DURING APPEAL PROCE EDINGS. THE PLEA OF THE APPELLANT THAT CREDIT OF CURRENT INCOME HAS N OT BEEN GIVEN WHEREAS CREDIT THEREOF AS REDUCED BY THE HOUSE HOLD EXPENSE S SHOULD HAVE BEEN GIVEN, PARTICULARLY WHEN THE AO ACCEPTED HOUSE HOLD EXPENSES AT RS. 30000 + 30000 BY WIFE ANITA VIDE REPLY DATED 29.06. 09. 11 1.19 THE PLEA OF THE APPELLANT IS CONSI DERED. THE RELEVANT ASSESSMENT RECORDS IS REFERRED. THE COUNSEL OF THE APPELLANT IN HIS LETTER FILED ON 29.06.2009 BEFORE THE AO DURING AS SESSMENT PROCEEDINGS, SUBMITTED AS UNDER:- ' RS.60000/- APPROXIMATELY WERE SPENT ON HOUSE HOLD EXPENSES BY ME AND MY WIFE JOINTLY INCLUDING EXPENS ES OF TWO MINOR LOCAL PRIMARY SCHOOL GOING CHILDREN AN D WE ARE LEAVING IN OUT OLD HOUSE. NO SEPARATE DETAILS OF HO USE HOLD EXPENSES ARE MAINTAINED.' 1.20 SINCE NO ADDITION WAS MADE ON ACCOUNT OF LO W HOUSE HOLD WITHDRAWALS, THE APPELLANT CLAIMED THAT THE AO ACCE PTED HIS CLAIM OF HOUSEHOLD EXPENSES OF RS.60,000/- AND HENCE IS REQU ESTED TO ALLOW THE BENEFIT OF REMAINING INCOME FROM THE ADDITION MADE BY THE AO. AT THE OUTSET, IT IS NOTED THAT THE CONTRIBUTION MADE BY THE WIFE AND SOURCE THEREOF HAS NOT BEEN SPECIFIED. FURTHER, IT IS DIFFICULT TO APP RECIATE THAT A FAMILY OF 4 MEMBERS COMPRISING TWO SCHOOL GOING CHILDREN CAN NO W- A-DAYS MANAGE HIS HOUSE HOLD AFFAIRS WITHIN A MEAGER SUM OF RS.5000/- P.M. HOWEVER, CONSIDERING THE ENTIRETY OF FACTS SPECIFICALLY THE PLEA OF THE APPELLANT THAT NO ADDITION WAS MADE ON THIS ACCOUNT, BENEFIT OF RS.30 ,000/- IS DIRECTED TO BE ALLOWED OUT OF THE CURRENT YEAR INCOME FROM THE ADDITION MADE. 1.21 THE APPELLANT FURTHER CLAIMED THAT DEPOSIT OF RS. 1,59,500/- WAS MADE IN THE BANK ON RECEIPT OF AMOUNT FROM SHRI GURDIAL SINGH AS WAS EXPLAINED THAT THE AMOUNT WAS PAID BY HIM OUT OF THE CASH WIT HDRAWAL OF RS. 2.5 LAKHS FROM HIS BANK ACCOUNT ON THE SAME DAY WHICH ALSO CO NFIRMED BY HIM IN THE AFFIDAVIT. THIS CLAIM OF THE APPELLANT WAS REJECTE D BY THE AO, ONLY ON THE GROUND THAT THERE WAS NO LOGIC TO MAKE PAYMENT OFRS . 1,59,500/- AS AGAINST THE AMOUNT PAYABLE WAS RS. 1,85,400/-. THE PLEA OF THE AO IS NOT TENABLE. THERE IS NO DENYING THE FACT THAT THE AMOUNT WAS AV AILABLE WITH SHRI GURDIAL SINGH ON THE DATE OF PAYMENT. IT IS NOT THE CASE O F THE AO THAT AMOUNT WAS UTILIZED BY HIM SOME WHERE ELSE. SHRI GURDIAL SING H CONFIRMED IN THE AFFIDAVIT THAT OUT OF THE AMOUNT WITHDRAWN FROM THE BANK, A SUM OF RS. 1,59,500/- WAS PAID TO THE APPELLANT AND HENCE IT I S TO BE TAKEN AS EXPLAINED AND IS TO EXCLUDED FROM THE ADDITION MADE BY THE AO . AS FAR AS RECEIPT OF CHEQUE OFRS. 4,98,775/- FROM ONE SHRI JOGI RAM, THE APPELLANT FILED A COPY OF HIS BANK ACCOUNT IN WHICH THERE WAS CREDIT OF RS . 4,98,592/- ON 2.12.2005 IN HIS BANK ACCOUNT AND CHEQUE OF EQUIVALENT AMOUNT WAS ISSUED IN THE NAME OF THE ASSESSEE ON THE NEXT DAY. AS DISCUSSED ABOV E, THE APPELLANT NEITHER PRODUCED SHRI JOGI RAM NOR COULD FILE THE SOURCE OF CREDIT IN HIS BANK ACCOUNT WITH DOCUMENTARY EVIDENCE AND HENCE HIS CAP ACITY CANNOT BE SAID TO BE ESTABLISHED FOR MAKING THIS PAYMENT. THE CONSID ERATION THEREOF IN THE ADDITION MAY BY THE AO IS, THEREFORE, CONFIRMED. SIMILAR IS THE POSITION W.R.T. TO OTHER AMOUNTS, INTER-ALIA , THE PEAK OF T HE CASH DEPOSITED IN THE BANK. AS DISCUSSED ABOVE THAT THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN THE BANK AND ULTIMATELY SURREN DERED THE PEAK THEREOF, AND HENCE ADDITION THEREOF IS HEREBY CONFIRMED. 14 ABOVE CLEARLY SHOWS THAT THE ASSESSEE HAS NOT BE EN ABLE TO DISCHARGE HIS BURDEN AND ADDITION HAS BEEN RIGHT LY MADE. IN ANY CASE IT HAS TO BE NOTED THAT THE ASSESSEE HAD AGREED FOR 12 THE ABOVE ADDITION BEFORE THE J.C.I.T. BY SURRENDER ING THE SAME AND THE DIRECTIONS U/S 144A ARE BINDING ON THE AO. IT IS SETTLED POSITION OF LAW THAT IF AN AMOUNT IS SURRENDERED TH E ASSESSEE CANNOT BE NORMALLY SAID TO BE AGGRIEVED PERSON. IN THESE CIRCUMSTANCES WE DO NOT FIND ANY THING WRONG IN THE ORDER OF LD. CIT(A) AND CONFIRM THE SAME. 15 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED ON 31.10.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 31.10. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 13