The Income-tax Officer, Muktsar V. Sh. Rajesh Kumar Prop., Muktsar

ITA 619/ASR/2011

• Counselvise Citation: 61920914 RSA 2011
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO. 619(ASR)/2011 ASSESSMENT YEAR:2008-09 PAN :ACIPK2822N THE INCOME TAX OFFICER, VS. SH. RAJESH KUMAR PROP. WARD II(2), MUKTSAR. M/S. RAJESH GENERAL STORE, MUKATSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. R.L. CHHANALIA, DR RESPONDENT BY:SH. SUDHIR SEHGAL, ADV DATE OF HEARING:06/09/2012 DATE OF PRONOUNCEMENT:11/09/2012 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), BATHINDA, DATED 23.09.2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION MA DE BY THE AO ON ACCOUNT OF UNEXPLAINED CHEQUES RECEIVED BY TH E ASSESSEE TAKING THE PLEA THAT THESE ARE BUSINESS RECEIPTS DE SPITE THE FACT THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS LIES U PON HIM TO EXPLAIN WHETHER THESE CHEQUES ARE RELATABLE TO BUSI NESS OR OTHERWISE NOT ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT ALSO IN APPELLATE PROCEEDINGS. ITA NO.619(ASR)/2011 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION MA DE BY THE AO OF RS.29 LACS ADMITTING THE CREDITWORTHINESS OF THE CREDITORS ( ON THE BASIS THAT THE CREDITORS IS HAVING 62 ACRE S OF AGRICULTURE LAND) ON THE DATE OF ADVANCE DESPITE THE FACT THE C REDITOR COULD NOT EXPLAIN THE SOURCE AT THE TIME OF ADVANCE. IT I S A SETTLED LAW THAT THE CREDITOR IS REQUIRED TO PROVE THE AVAILABI LITY OF CASH ON THE DATE OF ADVANCE INSPITE OF BEING RICH. THE LD. CIT(A) BATHINDA FAILED TO APPRECIATE THE SETTLED LAW. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY G ROUND OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS RUNNING A MUNYARI SHOP AT MUKATSAR AND HAS FILED RETURN OF INCOME U/S 44AF AND CLAIMED THAT NO BOOKS OF ACCOUNT ARE MAINTAINED DURING THE PERIO D RELEVANT TO THE A.Y.2008-09. THE AO HAS MADE AN ADDITION OF RS.1,24 ,000/- ON ACCOUNT OF THE CHEQUE AMOUNTING TO RS.74,000 ON 28.07.007 AND RS.50,000/- ON 24.02.2008 CREDITED IN THE BANK ACCOUNT OF THE AASS ESSEE. THE CLAIM OF THE ASSESSEE WAS THAT SINCE RETURN HAS BEEN FILED U/S 4 4AF OF THE ACT THEN BOOKS OF ACCOUNT ARE NOT REQUIRED TO BE MAINTAINED. THERE FORE, THE ASSESSEE IS NOT EXPECTED TO EXPLAIN EACH AND EVERY ENTRY IN THE BAN K ACCOUNT. HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION WITH REFERENCE T O THE BANK ACCOUNT AND MADE ADDITION OF THE BOTH AMOUNTS AS STATED ABOVE. FURTHER, THERE WAS A CREDIT ENTRY OF RS.29,00,000 ON 27.02.2008 IN THE B ANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAS STATED BEFORE THE AO THA T THIS AMOUNT REPRESENTS AN ADVANCE AGAINST SALE OF LAND FROM SH. LACHMAN SI NGH. THE ASSESSEE PRODUCED SH. LACHMAN SINGH BEFORE THE AO ON 26.10.2 010 WHO HAS ITA NO.619(ASR)/2011 3 ADMITTED TO HAVE ADVANCED THIS AMOUNT TO THE ASSES SEE AND FURTHER CONFIRMED THAT THE DEAL WAS NOT MATURED THE SAME AM OUNT WAS RECEIVED BACK, WHO ALSO HAS FILED AN AFFIDAVIT ON 23.08.2 010 BEFORE THE AO TO THIS EFFECT TO CONFIRM THAT THE AMOUNT WAS ACTUALLY RECE IVED BACK BY HIM AND THE SAME WAS REINVESTED IN PURCHASE OF ANOTHER AGRICUL TURE LAND ON 06.05.2008. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESS EE AND MADE ADDITION OF RS.29,00,000/- FOR THE REASON THAT SH. LACHMAN SING H CREDITOR, WAS NOT ABLE TO PROVE THE SOURCE OF RS.29,00,000/- IN HIS HAND. 4. THE LD. CIT(A) BY ACCEPTING THE EXPLANATION OF T HE ASSESSEE AND FOLLOWING THE DECISION OF THE ITAT, AMRITSAR BENCH, IN THE CASE OF DR. SAPNA PRUTHI W/O DR. NARESH PARUTHI, MUKTASAR VS. I .T.O. WARD II(2), BATHINDA, IN ITA NO.205(ASR)/2006 FOR THE A.Y. 1996 -97 DATED 09.10.2007 DELETED THE ADDITION. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT THE RE IS NO EVIDENCE ON RECORD THAT RECEIPT OF CHEQUE IN THE BANK ACCOUNT A MOUNTING TO RS.74,000/- AND RS.50,000/- ARE NOT BUSINESS RECEIPTS OF THE AS SESSEE. THE ASSESSEE HAVING DECLARED INCOME UNDER SECTION 44AF OF THE AC T IS NOT UNDER OBLIGATION TO MAINTAIN BOOKS OF ACCOUNT. THE TOTAL DEPOSITS FOUND IN THE BANK ACCOUNT OF THE ASSESSEE ARE 33,33,658/- AND THERE I S NO DISPUTE THAT THE ASSESSEE HAS NOT DECLARED SUCH DEPOSITS IN THE RET URN FILED FOR THE IMPUGNED ITA NO.619(ASR)/2011 4 ASSESSMENT YEAR. THEREFORE, THE LD. CIT(A) HAS RIG HTLY DELETED THE SAID ADDITION. 5.1. AS REGARDS THE DEPOSIT OF RS.29,00,000/-, WHIC H WAS FOUND DEPOSITED IN THE BANK ACCOUNT ON 27.02.2008, THE ONUS LAYS ON THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS HAS SUBMITTED THE EXPLANATION THAT CASH DEPOSIT OF RS.29 LACS IN THE SAVING BANK ACCOUNT RE PRESENTED AN ADVANCE AGAINST SALE OF LAND FROM SH. LACHMAN SINGH. SH. LA CHMAN SINGH IN HIS STATEMENT RECORDED STATED THAT HE OWNS 34 ACRES OF LAND IN PUNJAB AND 28 ACRES OF LAND IN RAJASTHAN AND ALSO CONFIRMED THE FACT THAT HE ENTERED INTO AN AGREEMENT WITH THE ASSESSEE AND PAID RS. 29 LAC S AS ADVANCE ON 27.02.2008 FOR PURCHASE OF LAND. IT WAS ALSO CONFIR MED BY SH. LACHMAN SINGH THAT THE DEAL WAS NOT FINALIZED AND THE AMOU NT WAS REFUNDED OUT OF WITHDRAWALS OF THE AMOUNT FROM THE BANK ACCOUNT OF THE ASSESSEE. SH. LACHMAN SINGH ALSO SUBMITTED THE AFFIDAVIT IN SUPPO RT OF HIS STATEMENT. IT IS ALSO NOT THE CASE OF THE AO THAT SH. LACHMAN SINGH HAS NOT GIVEN RS.29 LACS AND HIS CREDITWORTHINESS CANNOT BE DOUBTED IN VIEW OF OWNERSHIP OF 62 ACRES OF AGRICULTURE LAND IN PUNJAB AND RAJASTHAN. IT WAS ALSO BROUGHT ON RECORD THAT SH. LACHMAN SINGH HAD PURCHASED AGRICUL TURE AND ON 06.05.2008. BY MAKING CASH PAYMENT OF RS.51,45,000/ - AS PER SALE DEED ON RECORD, WHICH PROVES THAT SH. LACHMAN SINGH IS M AN OF MEANS. THE FAILURE ITA NO.619(ASR)/2011 5 OF SH. LACHMAN SINGH TO PROVE THE SOURCE OF INVEST MENT OF RS. 29LACS ON 27.02.2008 CANNOT BE GROUND FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE. THERE IS NOTHING ON RECORD BROUGHT BY THE AO THAT THE AMOUNT OF RS. 29 LACS BELONGS TO THE ASSESSEE. IN THE FACTS A ND CIRCUMSTANCES OF THE CASE, THE EXPLANATION OF THE ASSESSEE HAS RIGHTLY B EEN CONSIDERED SATISFACTORY BY THE A.O. WE FIND NO INFIRMITY IN HIS ORDER. THUS , GROUND NO. 1 & 2 OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.619(ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11TH SEPTEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. RAJESH KUMAR, MUKTSAR 2. THE ITO W-II(2), MUKTSAR 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.