Sh. Balkar Singh, Jalandhar V. The Income tax Officer, Jalandhar

ITA 622/ASR/2013

• Counselvise Citation: 62220914 RSA 2013
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 23-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Onus to prove
• Section: 142(1)

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.622(ASR)/2013 ASSESSMENT YEAR:2009-10 PAN :AVCPS8790C SH. BALKAR SINGH, VS. INCOME TAX OFFICER, C/O JEEVAN PETROLEUM, WARD II(1), JALANDHAR. SUCHI PIND, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.SURINDER MAHAJAN, CA RESPONDENT BY:SH.MAHAVIR SINGH, DR DATE OF HEARING: 05/02/2014 DATE OF PRONOUNCEMENT:24/02/2014 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORD ER OF THE CIT(A), JALANDHAR DATED 16.09.2013 FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1 A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS.1,17,748 /- BEING CREDITS IN SAVING BANK ACCOUNT NO.602701010002947. ADDITION CONFIRMED IS ILLEGAL AND BAD IN LAW. ITA NO.622(ASR)/2013 2 B) THAT ADDITION CONFIRMED IS WITHOUT ANY MATERIA L ON RECORDS AND IS BASED ON ASSUMPTIONS & PRESUMPTIONS, SURMISES AN D CONJECTURES FAR AWAY FROM FACTS OF THE CASE. 2 A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS.1,61,750 /- BEING ALLEGED UNEXPLAINED EXPENDITURE ON EARNING OF AGRI CULTURAL INCOME. ADDITION CONFIRMED IS ILLEGAL AND BAD IN LA W. B) THAT ADDITION CONFIRMED IS WITHOUT ANY MATERIA L ON RECORDS AND IS BASED ON ASSUMPTIONS & PRESUMPTIONS, SURMISES AN D CONJECTURES FAR AWAY FROM FACTS OF THE CASE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS.1,00,000 /- BEING ALLEGED INCOME FROM UNDISCLOSED SOURCES ALLEGED TO HAVE BEEN USED TOWARDS MEETING HOUSEHOLD EXPENSES. 4. THAT THE ASSESSEE REQUESTS FOR LEAVE TO ADD OR A NNEX ANY OTHER GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DIS POSED OFF. 2. AS REGARDS GROUND NO.1, THE BRIEF FACTS ARE THAT THE AO MADE AN ADDITION OF RS.9,61,305/- BY OBSERVING AS UNDER: ON PERUSAL OF THE SAVING ACCOUNTS STATEMENT OF THE ASSESSEE WITH THE VIJAY BANK, SECTOR 17, CHANDIGARH, THE FOLLOWING CR EDITS WERE NOTICED: S.B.602701010002947 IN HIS SINGLE NAME 7,17,448/- S.B.602701010000094 JOINTLY WITH WIFE 2,43,857/- VIDE NOTICE U/S 142(1) DATED 05.04.2011 ISSUED TO T HE ASSESSEE, HE WAS ASKED TO EXPLAIN SOURCE OF ALL THE CREDITS IN THE B ANK ACCOUNTS MAINTAINED IN HIS NAME, EITHER INDIVIDUALLY OR JOIN TLY WITH HIS FAMILY MEMBERS. THE ASSESSEE WAS ALLOWED AMPLE TIME AND A NUMBER OF ITA NO.622(ASR)/2013 3 ADJOURNMENTS FOR FILING THE REPLY. HOWEVER, HE FAIL ED TO FURNISH ANY REPLY TO ANY OF THE QUESTION RAISED, EXCEPT PRODUCI NG BOOKS OF ACCOUNT AND MAKING VERBAL SUBMISSION ON 06.09.2011, 19.10.2 011 AND WRITTEN SUBMISSION FILED ON 31.10.2011. ONUS TO PROVE THE G ENUINENESS OF CREDIT IN HIS SAVING BANK ACCOUNTS LIED UPON THE AS SESSEE. SINCE THE ASSESSEE FAILED TO DISCHARGE HIS ONUS BY NOT FURNIS HING ANY EXPLANATION BOTH THE ABOVE CREDITS TOTALING RS.9,61 ,305/- ARE THEREFORE, HELD AS UNEXPLAINED INVESTMENT OF THE AS SESSEE AND ADDED TO HIS TOTAL INCOME. 3. THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE TH E LD. CIT(A) ALONGWITH PETITION UNDER RULE 46A OF THE INCOME TAX RULES, 1962, WHICH WAS FORWARDED TO THE AO AND IN TURN THE AO SUBMITTE D THE REMAND REPORT. THE LD. CIT(A) AFTER CONSIDERING THE WRITTEN SUBMIS SIONS FILED BY THE ASSESSEE AND THE REMAND REPORT OF THE AO DELETED TH E ADDITION OF RS.8,43,587/- AND SUSTAINED THE ADDITION OF RS.1,17 ,448/-. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE F ACTS OF THE CASE. THE DISPUTE BEFORE US WITH REGARD TO ASSESSEES APPEAL IS FOR RS.1,17,448/-. IN THIS REGARD, THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT RS. 1,00,000/- WAS DEPOSITED ON 21.04.2008 OUT OF HIS PREVIOUS Y EAR WITHDRAWALS AND OTHER CREDITS OF RS. 8,101/- AND RS.9,347/- ARE OF SMALL AMOUNTS. THE EXPLANATION OF THE ASSESSEE BEFORE THE LD. CIT(A) A ND EVEN BEFORE US IS NOT SATISFACTORY AND WITHOUT ANY DOCUMENTARY EVIDENCE. THE ASSESSEE HAS ALSO NOT SUBMITTED ANY CASH FLOW STATEMENT WITH REGARD T O THE AVAILABILITY OF ITA NO.622(ASR)/2013 4 FUNDS OF RS.1,00,000/- ON THE DATE OF DEPOSIT TO SU PPORT HIS CLAIM. IN THE FACTS AND CIRCUMSTANCES, WE FIND NO INFIRMITY IN TH E ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 1,00,000/-, RS.81 01/- AND RS.9347/- I.E. TOTALING RS.1,17,748/-. WE DO NOT COMMENT UPON THE DELETION OF ADDITION OF RS.8,43,587/- BY THE LD. CIT(A) SINCE THE REVENUE I S NOT IN APPEAL BEFORE US. IN THE FACTS AND CIRCUMSTANCES, GROUND NO.1(A) & (B ) OF THE ASSESSEE IS DISMISSED. 5. AS REGARDS GROUND NO.2 (A) & (B). THE BRIEF FACT S AS EMANATING FROM AOS ORDER ARE REPRODUCED FOR THE SAKE OF CONVENIEN CE AS UNDER: IN THE RETURN OF INCOME, THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME AT RS.1289766/-. VIDE QUESTION NO.19 OF THE NOTICE U/S 142(1) OF THE ACT ISSUED ON 05.04.2011, HE WAS ASKED TO GI VE DETAILS AND EVIDENCE OF THE GROSS AGRICULTURAL RECEIPTS AND ITE M-WISE EXPENSES ON CULTIVATION VIZ SEEDS, FERTILIZERS, PATRICIDES, IRR IGATION, LABOUR, TRANSACTIONS ETC. HOWEVER, NO REPLY WAS FILED NOR A NY EVIDENCE WAS PRODUCED. ON PERUSAL OF BOOKS OF ACCOUNTS OF THE AS SESSEE, IT WAS NOTICED THAT THE ASSESSEE HAD CREDITED RS.13,28,01 6/- AS GROSS RECEIPTS AND DEBIT OF RS.38,250/- EXPENSES. VIDE OR DER SHEET ENTRY DATED 19.10.2011, LD. COUNSEL FOR THE ASSESSEE WAS POINTED OUT THAT EXPENSES SHOWN AT RS.38,250/- WERE MEAGER FOR EARNI NG AGRICULTURAL INCOME OF RS.1328016/- AND WAS AGAIN ASKED TO FURNI SH DETAILS OF ACTUAL EXPENSES INCURRED AND SOURCES THEREOF. IN RE SPONSE, THE ASSESSEE FILED WRITTEN REPLY IN THE DAK ON 31.10.20 01 STATING THAT IN ADDITION TO THE AMOUNT CREDITED IN THE BOOKS OF ACC OUNTS, THE ASSESSEE HAD ALSO SOLD PRODUCE BEING VEGETABLES AND CATTLE F EED LOCALLY FOR ABOUT RS.8000/- TOWARDS HOUSEHOLD EXPENSES. HOWEVER , NO EVIDENCE IN SUPPORT OF THIS CONTENTION WAS FILED. IT IS NOTI CED THAT THE ASSESSEE HIMSELF HAS DECLARED GROSS RECEIPTS AT RS.1328016/- HE DID NOT FILE ANY REPLY FOR FIVE MONTHS TO THE QUERY RAISED IN TH E QUESTIONNAIRE; AND WHEN HE WAS CONFRONTED THAT THERE WERE NO CORRESPON DING ITA NO.622(ASR)/2013 5 WITHDRAWALS, HE CAME UP WITH THIS NEW SUBMISSION, W HICH MAKES ENTRIES IN THE BOOKS OF ACCOUNT AS INCORRECT. IN TH E ABSENCE OF ANY EVIDENCE TO SUPPORT HIS CHANGED SUBMISSION, THE SA ME IS THEREFORE, REJECTED AND AGRICULTURAL EXPENSES BY THE ASSESSEE ARE ESTIMATED AS FOLLOW. NORMALLY, AGRICULTURAL EXPENSES ARE IN THE RANGE OF 30% TO 40% OF THE GROSS RECEIPTS. HOWEVER, IN VIEW THE FAC TS NOTICED AND SUBMISSION MADE DURING THE ASSESSMENT PROCEEDINGS F OR THE AY 2008- 09 THAT THE ASSESSEE WAS RELIGIOUS PREACHER HAVING A NUMBER OF DEVOTEES WHO HELP IN HIS AGRICULTURAL ACTIVITIES, A GRICULTURAL EXPENSES, WITH MOST FAVOURABLE APPROACH TO THE ASSESSEE, ARE ESTIMATED AT RS.2,00,000/- BEING 15% OF THE GROSS RECEIPTS. FOR THESE EXPENSES, WITHDRAWALS FROM KNOWN SOURCE OF INCOME IS RS.38250 /- ONLY. REMAINING EXPENSES AT 161750 WERE INCURRED FROM UND ISCLOSED INCOME. THEREFORE, AN AMOUNT OF RS.161750/- IS ADDE D TO THE TOTAL INCOME OF THE ASSESSEE BEING INCOME FROM UNDISCLOSE D SOURCES. 6. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUBMISS IONS WHICH WERE FORWARDED TO THE AO, WHO SUBMITTED THE REMAND REPOR T. THE ASSESSEE SUBMITTED FURTHER SUBMISSIONS IN VIEW OF THE REMAND REPORT OF THE AO AND AO HAS ALSO SUBMITTED FURTHER REPORT. THE LD. CIT(A ) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND REPORTS OF THE AO C ONFIRMED THE ACTION OF THE A.O. 7. 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 EXPENSES INCURRED TO EARN AGRICULTURE INCOME REFLECTED IN THE BOOKS OF A CCOUNT ARE ADMITTEDLY NOT SUFFICIENT. THE ASSESSEE HIMSELF HAS STATED THAT TH E BALANCE EXPENSES TO EARN AGRICULTURE INCOME HAVE BEEN MET OUT OF SALE PROCEE DS OF VEGETABLES AND CATTLE FEED TO THE EXTENT OF RS.1,80,000/- AND THES E SUBMISSIONS MADE BY THE ITA NO.622(ASR)/2013 6 ASSESSEE ARE WITHOUT ANY EVIDENCE. IT IS UNBELIEVAB LE THAT A PERSON OF THE STATURE OF ASSESSEE WILL SELL VEGETABLE AND CATTLE FEED JUST LIKE A STREET HAWKER MORE PARTICULARLY WHEN HE IS A RELIGIOUS PREACHER O F REPUTE IN THE AREA. GENERALLY, THE AGRICULTURE RELATED EXPENSES OF EVER Y KIND ARE 40% OF THE GROSS RECEIPTS BUT THE AO HAS VERY REASONABLY ESTIM ATED THESE AT ONLY 15% IN VIEW OF THE REASONS MENTIONED IN THE ORDER. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE FAILED TO JUSTIFY THE SOURCE OF EXPENS ES TO THE EXTENT OF RS.1,61,750/- AS VERY REASONABLY ESTIMATED BY THE A O TO EARN HUGE AGRICULTURE INCOME. PLACING ON RECORD THE DOCUMENT RELATED TO LAND HOLDING AND MAKING SOME CLAIM WITHOUT ANY MATERIAL EVIDENCE WILL NOT PROVE THE CASE OF THE ASSESSEE IN VIEW OF THE FACT THAT THE A SSESSEE HAS NOTED ALL THE AGRICULTURE INCOME AND EXPENSES IN HIS BOOKS OF ACC OUNT. IN THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. ACCORDINGLY GROUND NO. 1(A) & (B) ARE DISMISSED. 8. NOW, WE TAKE UP GROUND NO.3 OF THE ASSESSEE. THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE AO ARE REPRODUCED F OR THE SAKE OF CONVENIENCE AS UNDER: WHILE VERIFYING THE BOOKS OF ACCOUNT OF THE ASSESSE E, IT WAS NOTICED THAT NO WITHDRAWALS FOR MEETING HOUSEHOLD EXPENSES WAS MADE DURING THE RELEVANT FINANCIAL YEAR. THE ASSESSEE WAS CONFR ONTED TO EXPLAIN THE REASONS FOR THE SAME. IN RESPONSE, THE ASSESSEE FILED WRITTEN REPLY ON 31.1.2011 STATING THAT HIS FAMILY CONSISTS OF HI M AND HIS WIFE ONLY THAT NEEDS OF KITCHEN ARE TAKEN CARE OF OUT OF AGRI CULTURAL PRODUCE; ITA NO.622(ASR)/2013 7 THAT EXPENSES ON OTHER NEEDS WERE AT RS.80,000/- O NLY WHICH WERE MET OUT OF SALE PROCEEDS OF VEGETABLES/FODDER ETC. SOLD IN THE MARKET, AS DISCUSSED IN PARA 4 ABOVE. THE ASSESSEES EXPLANATION HAS BEEN CONSIDERED. IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE A.Y.2008-09, IT CAME TO THE NOTICE THAT THE ASSESSEE HAS TWO SONS A ND THE YOUNGER SON OF THE ASSESSEE WAS STUDYING IN AUSTRALIA. THEREFOR E, A PART OF THE EXPENSES ON THE LIVING AND STUDY OF THE YOUNGER SON IN AUSTRALIA, MUST HAVE BEEN BORNE BY THE ASSESSEE. KEEPING IN VIEW FA CTS SUBMITTED BY THE ASSESSEE AND STATED ABOVE, HOUSEHOLD EXPENSES A RE ESTIMATED AT RS.1,00,000/-. THE ASSESSEES EXPLANATION ON THE SO URCES OF RS.80,000/- HAS ALREADY BEEN HELD AS UNRELIABLE AND REJECTED, IN PARA 4 ABOVE. THEREFORE, IT IS HELD THAT THE ASSESSEE HA S MET THESE EXPENSES OUT OF HIS INCOME FROM UNDISCLOSED SOURCES. HENCE, AN ADDITION OF RS.1,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE UNDER THIS ACCOUNT. 9. THE ASSESSEE MADE SUBMISSIONS BEFORE THE LD. CIT (A), WHICH WERE SENT TO THE AO FOR REPORT, WHO SUBMITTED REPORT. T HE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND REM AND REPORT OF THE AO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD IS T HAT THE HOUSEHOLD WITHDRAWALS HAVE BEEN MADE OUT OF SALE PROCEEDS OF VEGETABLES AND CATTLE FEED TO THE EXTENT OF RS.80,000/- BUT WITHOUT ANY D OCUMENTARY EVIDENCE. THE ESTIMATION HAS BEEN MADE BY THE AO WITHOUT ANY MATE RIAL ON RECORD. BUT AT THE SAME TIME, DISALLOWANCE IS ON THE HIGHER SIDE A ND TO MEET BOTH ENDS OF ITA NO.622(ASR)/2013 8 JUSTICE, WE RESTRICT THE DISALLOWANCE TO RS.50,000/ - AND ACCORDINGLY THE ASSESSEE GETS RELIEF OF RS.50,000/-. THE AO IS DIR ECTED TO ALLOW THE SAID RELIEF TO THE ASSESSEE. THUS, THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.622(ASR)/2013 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH FEBRUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. BALKAR SINGH C/O JEEVAN PETROLEUM, SUCHI PIND, JALANDHAR. 2. THE ITO WARD II(1), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR