SHRI GEETA GOPAL, KAPURTHALA V. INCOME TAX OFFICER, KAPURTHALA - 1, KAPURTHALA

ITA 576/ASR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9697 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 25-09-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 576/ASR/2017 AS SESSMENT YEAR: 2008-09 GEETA GOPAL, PROP. GOPAL TYRES, SULTANPUR ROAD, KAPURTHALA [PAN: AEGPG 8648N] VS. INCOME TAX OFFICER, KAPURTHALA 1 KAPURTHALA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J. S. BHASIN (ADV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 25.09.2018 DATE OF PRONOUNCEMENT: 26.09.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR ('CIT(A)' FOR SHORT) DATED 13.06.2017, DISMISSING THE ASSESSEES APPEAL CONTESTING HIS ASS ESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) DATED 16.12.2010 FOR THE ASSESSMENT YEAR (AY) 2008-09. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE, FOUND TO HAVE DEPOSITED CASH IN HIS SAVINGS BANK ACCOUNT (WITH ICICI BANK, KAPURTHALA) AT RS.12.90 LACS DURING THE YEAR, IN EXPLANATION FOR RS.6.50 LACS SO DEPOSITED [ON 10.04.2007 (RS.4 LACS) AND 03.10.2007 (RS.2.50 LACS)] DURING THE ASS ESSMENT PROCEEDINGS, SUBMITTED THE SAME TO BE A BIANA (ADVANCE) RECEIVED AGAINST T HE SALE OF HIS RESIDENTIAL HOUSE ITA NO. 576/ASR/2017 (AY 2008-09) GEETA GOPAL V. ITO 2 AT KAPURTHALA FROM ONE, KULDEEP SINGH S/O SH. SARMU KH SINGH, PRODUCING THE SALE AGREEMENT DATED 10.04.2007, ENTERED INTO WITH HIM I N SUPPORT (PB PG. 2 ). THE SAME CONTAINING THE SIGNATURES OF BOTH THE PARTIES AS WELL AS THE MARGINAL WITNESSES, WAS A RELIABLE DOCUMENT WITH EVIDENTIARY VALUE, AND ITS REGISTRATION WAS NOT REQUIRED BY LAW. FURTHER, AS HOWEVER THERE AROS E SOME DISPUTE WITH SH. KULDEEP SINGH, THE SALE AGREEMENT WAS CANCELLED AND NO SALE DEED EXECUTED. SH. KULDEEP SINGH WHO WAS ALSO REQUIRED TO BE PRODUCE D, COULD NOT BE AS HE WAS OUT OF STATION. THIS SUMS UP THE ASSESSEES CASE BEFORE THE ASSESSING OFFICER (AO) (REFER, THE ASSEESSEES LETTER DATED 10/12/2010, AT PB PG. 6), WHO, ACCORDINGLY, BROUGHT THE SAME TO TAX U/S. 69A OF THE ACT AS IN H IS VIEW OF THE SALE AGREEMENT, BEING NOT REGISTERED, WAS NOT A VALID DOCUMENT AND, BESIDES, THE BUYER WAS NOT PRODUCED. IN APPEAL, THE ASSESSEE REITERATED HIS CA SE, APART FROM STATING THAT HE DID NOT HAVE ANY REGULAR OR HIDDEN SOURCE OF INCOME FOR HIM TO HAVE SURPLUS FUNDS WITH HIM FOR BEING SO DEPOSITED, RELYING ON THE DECISION IN CIT V. NOORJAHAN (P.K.) [1999] 237 ITR 570 (SC). THE SAME, HOWEVER, DID NOT FIND FAVOUR WITH THE FIRST APPELLATE AUTHORITY. SH. KULDEEP SINGH WAS NOT PROD UCED AT ANY STAGE. THE OWNERSHIP OF THE HOUSE WAS ALSO NOT TRANSFERRED, EV EN IF TO ANOTHER, SUBSEQUENTLY (PARAS 4.6 AND 4.7 OF THE IMPUGNED ORDER). THE ADDI TION BEING CONFIRMED THUS, AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE, SH. BHASIN, AFTER NARRATING THE FACTS, WOULD SUBMIT THAT THE REVENUE HAD NOT BROUGH T ANY MATERIAL ON RECORD TO REBUT THE ASSESSEES RELIANCE ON THE SALE AGREEMENT DATED 10.04.2007, SIGNED BY TWO WITNESSES AS WELL, I.E., APART FROM THE PARTIES . THE ASSESSEES RELIANCE ON THE DECISION IN P.K. NOORJAHAN (SUPRA) WAS ALSO NOT MET BY THE LD. CIT(A). THE LD . DEPARTMENTAL REPRESENTATIVE (DR) WOULD, ON THE OTHE R HAND, SUBMIT THAT THE ASSESSEE CONTINUES TO RETAIN THE AMOUNT TO DATE, I. E., DESPITE LAPSE OF OVER 10 YEARS. ITA NO. 576/ASR/2017 (AY 2008-09) GEETA GOPAL V. ITO 3 THERE IS, HOWEVER, NO PLEA OR CONTENTION OF ANY SUB SISTING DISPUTE QUA THE SAID TRANSACTION, OR EVEN OF THE ASSESSEE HAVING SOLD HI S HOUSE SUBSEQUENTLY. EVEN SH. KULDEEP SINGH, THE PERSON CLAIMED TO HAVE PAID THE CASH, IS NOT PRODUCED FOR EXAMINATION AT ANY STAGE. THE SALE AGREEMENT WITH H IM IS, UNDER THE CIRCUMSTANCES, A SELF-SERVING DOCUMENT, WHICH IS TO BE IGNORED, EV EN AS EXPLAINED BY THE APEX COURT IN CIT V. DURGA PRASAD MORE [1991] 82 ITR 540 (SC). SH. BHASIN WOULD, IN REJOINDER, SUBMIT THAT THE MATTER MAY BE REMITTED B ACK TO THE FILE OF THE AO FOR CONSIDERATION AND ALLOWING THE ASSESSEE AN OPPORTUN ITY TO PRODUCE THE NECESSARY EVIDENCE. 4. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THE ASSESSEE, IN THE BUSINESS OF PLYING TRUCKS AND TRADING IN TYRES, DEPOSITING CASH IN HIS BANK ACCOUNT, THE ONUS TO SATISFACTORIL Y EXPLAIN THE NATURE AND SOURCE THEREOF, I.E., ACQUISITION OF THE SAID CASH, IS ON HIM, LEST IT BE DEEMED AS HIS INCOME FOR THE RELEVANT YEAR. THE ASSESSEES EXPLANATION, WHICH COVERS BOTH THE NATURE AND SOURCE OF THE SAID CASH, IS OF IT BEING A BIANA (AD VANCE) AGAINST SALE OF HIS RESIDENTIAL HOUSE, RECEIVED FROM ONE, SH. KULDEEP S INGH, RESIDENT OF NAWAPIND, DISTT. KAPURTHALA, AND TOWARD WHICH HE FURNISHES TH E SALE AGREEMENT WITH HIM DATED 10.04.2007 WHICH, IN VIEW OF THE OTHER FACTS AND CIRCUMSTANCES, WAS REGARDED AS NOT SATISFACTORILY EXPLAINING THE SAID TRANSACTION. THE ASSESSEE IS STATED TO BE IN DIRE NEED OF FUNDS TO BAIL HIMSELF OUT OF HIS DECLINING BUSINESS, AND TOWARD WHICH HE CONTEMPLATED THE SALE OF HIS RESIDENTIAL H OUSE. YET, A TIME PERIOD OF ONE YEAR WAS ALLOWED BY THE ASSESSEE TO THE BUYER FOR C OMPLETING THE TRANSACTION. ONE WONDERS WHY, THE ASSESSEES NEED FOR FUNDS, BEING S TATEDLY, IMMEDIATE. WAS IT THAT THE ASSESSEE WAS PLANNING TO SHIFT TO ANOTHER, PERH APS SMALLER, ACCOMMODATION, FOR WHICH HE NEEDED TIME? IF SO, THERE IS NOTHING TO IN DICATE OR SO SUGGEST ON RECORD. THE CASH FLOW STATEMENT (PB PGS. 3-4) SHOWS A CLOSI NG (AS ON 31.03.2008) CASH ITA NO. 576/ASR/2017 (AY 2008-09) GEETA GOPAL V. ITO 4 BALANCE OF RS.3.67 LACS, AS AGAINST AN OPENING CASH BALANCE OF RS.0.20 LACS, WITH AN AVERAGE OF RS.4 LACS DURING THE YEAR! WHY DID THE A SSESSEE, THEN, IN DIRE AND PRESSING NEED OF FUNDS, MAINTAIN SUCH A HIGH CASH B ALANCE EVEN AS HE CONSIDERS, AND ACTUALLY PROCEEDS TO TAKE THE EXTREME STEP OF S ELLING HIS HOUSE, WHICH SERVES A PRIMAL LEAD FOR HOUSING AS WELL AS FOR SECURITY. IF THE CASH WAS MAINTAINED AS HE MIGHT, ON A FAILURE OF THE TRANSACTION, BE REQUIRED TO REPAY THE INTENDING BUYER, THE SAME WAS NOT DONE. AND NEITHER COULD THE ASSESSEE M AKE USE OF THE CASH SO GENERATED, STATED TO BE FOR HIS URGENT NEEDS, SERVI NG THUS NO PURPOSE! THE AGREEMENT STIPULATING THE FORFEITURE OF THE ADVANCE IN CASE OF A DEFAULT BY THE BUYER, THERE WAS NO IMMINENT RISK OF REPAYMENT (OF ADVANCE), WHICH COULD IN ANY CASE BE REPAID OUT OF THE SALE PROCEEDS OF THE SALE OF HOUSE. WHY, AGAIN, THE TRANSACTION FAILING, WAS THE HOUSE NOT SOLD, I.E., TO ANOTHER, DESPITE REQUIRING, AS STATED, FUNDS FOR MEETING THE FINANCIAL CRISIS OF H IS BUSINESS AND DISCHARGE THE DEBTS OF HIS, SINCE DECEASED, FATHER. THERE IS, THUS, CON SIDERED WHICHEVER WAY, NOTHING TO JUSTIFY THE ASSESSEES EXPLANATION OF THE CASH WITH HIM AS ON ACCOUNT OF AN ADVANCE AGAINST SALE OF HIS RESIDENTIAL HOUSE. THAT APART, SH. KULDEEP SINGH WAS NOT PRODUCED AT A NY STAGE. WITHOUT DOUBT, THE AO, CONSTRAINED FOR WANT OF TIME TO FRAM E THE ASSESSMENT, DID NOT EXTEND PROPER OPPORTUNITY TO THE ASSESSEE TO PRODUC E HIM. WANT OF PROPER OPPORTUNITY TO STATE HIS CASE, PRODUCING KULDEEP SI NGH, THE STATED SOURCE OF CASH, OUGHT TO BE THEREFORE THE FOREMOST GROUND ASSUMED B Y THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY, WHICH WAS NOT. BE THAT AS IT M AY, THE ASSESSEE DID MAKE OUT A CASE FOR WANT OF OPPORTUNITY BEFORE THE LD. CIT(A). HOWEVER, HE NOWHERE SEEKS HIS LEAVE, INVOKING RULE 46A, TO PRODUCE SH. KULDEEP SI NGH AS HIS WITNESS. THERE IS ALSO NO OFFER TO PRODUCE SH. KULDEEP SINGH BEFORE T HE LD. CIT(A), BEFORE WHOM THE PROCEEDINGS WERE ON FOR NEARLY 6 YEARS. WHY? THIS IS MOST SURPRISING CONSIDERING THAT THE ASSESSEE MAKES OUT, AND ONLY R IGHTLY SO, A STRONG CASE FOR ITA NO. 576/ASR/2017 (AY 2008-09) GEETA GOPAL V. ITO 5 DENIAL OF PROPER OPPORTUNITY BY THE AO. IT MAY BE T HAT SH. KULDEEP SINGH BECAME A NON-RESIDENT; THE ASSESSEE STATING BEFORE THE LD. CIT(A) OF HIS GOING ABROAD AS THE REASON FOR HIS NOT KEEPING HIS DATE (10.04.2008) AN D COMPLETING THE TRANSACTION. IF SO, HIS AFFIDAVIT, CONFIRMING THE TRANSACTION, STAT ING THE SOURCE OF THE FUNDS, ALONG WITH HIS RETURN OF INCOME, ETC., WOULD BE REGARDED AS, UNDER THE CIRCUMSTANCES, A REASONABLE DISCHARGE OF THE OBLIGATION ON THE ASSES SEE TO SUBSTANTIATE HIS CASE. RATHER, SH. KULDEEP SINGH WOULD HAVE, POST ASSESSME NT, DEFINITELY VISITED INDIA, SO THAT THE ASSESSEE COULD HAVE OFFERED FOR HIM BEING EXAMINED BY IT TO THE REVENUE. EVEN AS NO SUCH OFFER WAS MADE, IT MAKES ONE WONDER AS TO WHY ONE, IN THE PROCESS OF SHIFTING ABROAD, AS INFERABLE FROM HIS H AVING GONE ABROAD BEFORE 10.04.2008, WOULD CONSIDER INVESTING IN INDIA AND, FURTHER, IN A RESIDENTIAL HOUSE, EVEN AS HIS RESIDENTIAL NEEDS ARE BEING OSTENSIBLY MET AND, IN ANY CASE, WOULD ABATE ON HIS PROCEEDING ABROAD. EVEN IF ONE WOULD WERE TO TAKE INTO ACCOUNT A CHANGE OF EVENTS, I.E., AFTER 03.10.2007, THE DATE OF THE LAS T INSTALLMENT (OF RS.2.50 LACS), HE WOULD RATHER COMPLETE THE TRANSACTION AND SELL THE HOUSE TO ANOTHER TO AVOID THE LOSS, IF NOT ACTUALLY GAIN IN-AS-MUCH AS REAL ESTAT E GENERALLY TENDS TO APPRECIATE. THAT IS, RATHER THAN INCUR A SUBSTANTIAL LOSS (OF R S.6.50 LACS), WHICH MAKES THE ASSESSEES CASE ALL THE MORE IMPROBABLE AND MAKE-BE LIEVE. IT MAY THOUGH BE CLARIFIED THAT THE ASSESSEES CASE FAILS NOT ON THA T ACCOUNT, OR FOR THAT REASON, ALONE, BUT PRIMARILY IN VIEW OF THERE BEING NOTHING ON REC ORD TO SHOW OF THE INTENDING BUYER AS HAVING PAID ADVANCE AND, THUS, SUFFERED TH E SAID LOSS. IN FACT, THE AGREEMENT BEING NOT REGISTERED, THE VALIDITY OF THE SAID AGREEMENT, IN VIEW OF REGISTRATION AND OTHER RELATED LAWS (AMENDMENT) ACT , 2001, IS IN SERIOUS DOUBT (REFER: CIT VS. BALBIR SINGH MAINI [2017] 398 ITR 531 (SC)). FOR THE FOREGOING REASONS, I HAVE LITTLE HESITATION IN CONFIRMING THE IMPUGNED ASSESSMENT AND, ACCORDINGLY, DECLINE INTER FERENCE. THE ASSESSEES RELIANCE ON THE DECISION IN P.K. NOORJAHAN (SUPRA) IS ALSO MISPLACED. PER THE SAID ITA NO. 576/ASR/2017 (AY 2008-09) GEETA GOPAL V. ITO 6 DECISION, IT STANDS EXPLAINED BY THE APEX COURT THA T THE DISCRETION CONFERRED UPON THE AO BY THE USE OF THE WORD MAY IS TO BE EXERCI SED KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I.E., EVEN IF THE EX PLANATION OFFERED BY THE ASSESSEE IS, IN THE OPINION OF THE ASSESSING AUTHORITY, NOT SATISFACTORY. IN THE FACTS OF THAT CASE; THE ASSESSMENT YEARS INVOLVED BEING AYS. 1968 -69 AND 1969-70, THE ASSESSEE, A MUSLIM LADY AGED 20 YEARS, WAS FOUND TO HAVE INVESTED IN LAND IN THE SUM OF RS. 0.61 LACS. EVEN THE SAVINGS EXPLAINED BY HER WERE THAT LEFT BY HER MOTHERS FIRST HUSBAND. GIVEN HER FINANCIAL CONDITI ON, SHE COULD NOT, THE TRIBUNAL FOUND, HAVE MADE THE IMPUGNED INVESTMENTS, AND EVEN WHERE IN A POSITION TO EARN, IT WOULD TAKE HER A DECADE TO EARN THE SUM UNDER RE FERENCE. IT WAS UNDER THESE CIRCUMSTANCES THAT THE APEX COURT FOUND NO ERROR IN THE FACTUAL FINDINGS BY THE TRIBUNAL, AND AFFIRMED THE DECISION BY THE HONBLE HIGH COURT UPHOLDING THE SAME. IN THE PRESENT CASE, THE ASSESSEE IS ADMITTEDLY A B USINESSMAN, WHOSE BUSINESS THOUGH MAY BE EXPERIENCING A DOWNTURN, EVEN AS THER E IS NOTHING ON RECORD TO EXHIBIT THE SAME. HE HAS, FURTHER, DEPOSITED RS. 12 .90 LACS IN CASH IN HIS SAVINGS BANK ACCOUNT, MAINTAINING AN AVERAGE CASH BALANCE O F RS.4 LACS DURING THE YEAR. THERE IS THUS NO CORRESPONDENCE WITH THE FACTS AND CIRCUMSTANCES OF THE SAID CASE. I DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN CO URT ON SEPTEMBER 26, 2018 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 26.09.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: GEETA GOPAL, PROP. GOPAL TYR ES, SULTANPUR ROAD, KAPURTHALA (2) THE RESPONDENT: INCOME TAX OFFICER, KAPURTH ALA 1 KAPURTHALA ITA NO. 576/ASR/2017 (AY 2008-09) GEETA GOPAL V. ITO 7 (3) THE CIT(APPEALS)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER