Neeru Gugnani, Rohtak V. ITO, Rohtak

ITA 636/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3515 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 19-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Gift; Additional evidence; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.P.BANSAL, JM AND SHRI R.C.SHARMA, AM ITA NO.636/DEL/2010 ASSESSMENT YEAR : 2006-07 MS.NEERU GUGNANI, 1039/23, D.L.F.COLONY, ROHTAK. PAN NO.AAQPG6825M. VS. INCOME TAX OFFICER, WARD-2, ROHTAK. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ARUN KUMAR JAIN, ADVOCATE. RESPONDENT BY : SHRI H.K.LAL, SR.DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 31.12.2009 FOR THE AY 2006-07. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO AD DITION OF RS.9,50,000/- REPRESENTING DEPOSITS IN BANK ACCOUNT, AND INTEREST CHARGED U/S 234A, B & C OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT ASSESSEE DERIVES INCOME FROM INSURANCE AND TEA CHING WORK. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT AS SESSEE HAS DEPOSITED RS.35,02,640/- IN HER BANK ACCOUNT WITH INDUSIND BA NK ON DIFFERENT DATES. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSIT WHICH HE STATED AS UNDER:- SR.NO. DATE AMOUNT OF EXPLANATION OFFERED BY ASS ESSEE CASH DEPOSITED 1. 20.7.05 RS.5,00,000/- RECEIVED AGAINST AGREEME NT TO SALE HOUSE. ITA-636/D/2010 2 2. 26.7.05 RS.50,000/- -DO- 3. 10.8.05 RS.4,00,000/- -DO- 4. 25.8.05 RS.6,00,000/- AGAINST WITHDRAWAL OF RS .600000 CASH FROM BANK ON 24.8.05. 5. 19.10.05 RS.1,00,000/- AGAINST CASH WITHDRAWAL OF RS.6,50,000/- ON 18.10.05. 6. 29.11.05 RS.16,50,000/- GIFT FROM MOTHER IN LAW . 7. 1.12.05 RS.2,200/- NO EXPLANATION. 8. 5.12.05 RS.2,00,440/- GIVEN BY SH.SUNIL JAIN. 4. IN RESPECT OF FIRST THREE DEPOSITS, THE AMOUNT W AS SHOWN TO HAVE BEEN RECEIVED AGAINST AGREEMENT TO SELL. THE AO OBSERVE D THAT AMOUNT OF RS.9,50,000/- WAS STATED TO BE RECEIVED FROM SHRI BIJENDER PAL SI NGH WITH WHOM AGREEMENT WAS ENTERED INTO FOR SALE OF HOUSE. AS PER AGREEMENT, THE ASSESSEE HAD RECEIVED A SUM OF RS.15 LAKHS AS ADVANCE. THE AO OBSERVED THAT AG REEMENT FOR SALE OF PLOT SUFFERS FROM THE FOLLOWING DEFECTS:- I. THIS AGREEMENT IS NOT ATTESTED BY ANY NOTARY/OAT H COMMISSIONER AUTHORIZED BY STATE GOVT. II. NO PARTICULAR NUMBER OF PLOT LOCATED IN DLF COL ONY HAS BEEN MENTIONED. III. TIME FOR EXECUTING REGISTRY BETWEEN PARTIES AG REED FOR TWO YEARS WHEREAS NORMAL PRACTICE IN SUCH TYPES OF DEALINGS ARE THREE MONTHS EVEN TILL DATE NO REGISTRY WAS EXECUTED. IT IS CLEAR THAT IT WAS A S HAM TRANSACTION. 5. THE ASSESSEE WAS ASKED TO PRODUCE THE PERSONS WI TH WHOM AGREEMENT TO SALE THE SAID PROPERTY ENTERED INTO, FOR VERIFICATI ON. THE ASSESSEE HAS FAILED TO ITA-636/D/2010 3 PRODUCE THE SAID PERSON. THE AO OBSERVED THAT IT W AS OBLIGATORY ON THE PART OF THE ASSESSEE TO PRODUCE THE PERSONS FOR EXAMINATION SO THAT NECESSARY VERIFICATION REGARDING IDENTITY AND CAPACITY OF THE SAID PERSON AND GENUINENESS OF TRANSACTION CAN BE MADE. INSPITE OF SPECIFIC QUERY, THE ASSESS EE HAS NOT PRODUCED THE SAID PERSON I.E. SO-CALLED SH.BIJENDER PAL SINGH. THE A SSESSEE HAS ALSO NOT PRODUCED NECESSARY DOCUMENTARY EVIDENCE REGARDING THE OWNERS HIP OF PLOT. ON THE BASIS OF THESE OBSERVATIONS, THE AO HELD THAT IT IS WELL EST ABLISHED THAT :- I. THE ASSESSEE WAS NOT HAVING ANY SUCH PLOT, OF WH ICH EVEN EXACT LOCATION AND NUMBER OF PLOT, WAS NOT MENTIONED. II. THE PERSON WITH WHOM SO-CALLED AGREEMENT WAS EN TERED INTO WAS ALSO NOT PRODUCED FOR EXAMINATION. III. THE SO-CALLED AMOUNT WAS STATED TO BE RECEIVED IN CASH, WHICH IS NOT RELIABLE AND ASSESSEE COULD NOT PROVE IDENTITY, CRE DIT WORTHINESS AND GENUINENESS OF TRANSACTION MADE WITH SH.BIJENDER SINGH. IV. ASSESSEE FAILED TO DISCHARGE ITS ONUS TO PROVE THE GENUINENESS OF TRANSACTION. 6. IN VIEW OF THE ABOVE, THE AO HELD THAT ASSESSEE HAS MADE AFTER-THOUGHT THEORY OF SALE OF PLOT, ACCORDINGLY AN ADDITION OF RS.9,50,000/- WAS MADE IN RESPECT OF CASH DEPOSITED INTO BANK ACCOUNT. 7. THE CIT(A) OBSERVED THAT DURING APPEAL PROCEEDIN GS, THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE IN THE FORM OF A CANCELLATION A GREEMENT DATED 15.11.2007 (PRINTED ON THE BACK SIDE OF THE AGREEMENT DATED 30 .6.2005). AS PER THIS CANCELLATION AGREEMENT DATED 15.11.2007, THE SALE A GREEMENT DATED 30.6.2005 IS CANCELLED BECAUSE THE PROPERTY FOR WHICH THE SALE A GREEMENT DATED 30.6.2005 WAS ITA-636/D/2010 4 MADE HAS TURNED OUT TO BE A BUILDING WHEREAS THE AG REEMENT DATED 30.6.2005 WAS MADE FOR THE PURCHASE OF A PLOT. SHRI BIJENDER PAL SINGH DIED ON 25.12.2007 I.E. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE C IT(A) OBSERVED THAT THE AO HAD ASKED THE ASSESSEE TO PRODUCE SHRI BIJENDER PAL SINGH FOR EXAMINATION; BUT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE SHRI BIJENDER PAL SINGH BEFORE THE AO. THE CIT(A) ALSO DID NOT ACCEPT THE ASSESSEES CONTENTIO N WITH REGARD TO RECEIPT OF CASH FROM SHRI BIJENDER PAL SINGH. ACCORDINGLY, HE CONF IRMED THE ADDITION. AGAINST THIS ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER AP PEAL BEFORE US. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THA T ASSESSEE HAS EXPLAINED THE SOURCE OF DEPOSIT IN BANK ACCOUNT THROUGH RECEIPT O F CASH AGAINST AGREEMENT TO SALE ENTERED INTO WITH SHRI BIJENDER PAL SINGH. HOWEVER , ASSESSEE COULD NOT PRODUCE SHRI BIJENDER PAL SINGH BEFORE THE AO. THE AO HAS NOT ACCEPTED THE ASSESSEES VERSION DURING ASSESSMENT PROCEEDINGS ON THE PLEA T HAT (I) IT HAD ENTERED INTO AN AGREEMENT DATED 30.6.2005 FOR SALE OF A PROPERTY IN DLF COLONY ROHTAK MEASURING 238 SQ. YARDS FROM ONE SH.BIJENDER PAL SI NGH, ON THE GROUND THAT THE AGREEMENT IS NOT ATTESTED BY ANY NOTARY/OATH COMMIS SIONER AND THE DESCRIPTION OF PROPERTY STATED TO BE LOCATED IN DLF COLONY HAS NOT BEEN MENTIONED IN THE AGREEMENT TO SELL AND (II) PERIOD OF TWO YEARS HAS BEEN MENTIONED FOR GETTING THE DEED REGISTERED WHEREAS IN NORMAL CIRCUMSTANCES THE REGISTRATION OF SUCH TRANSACTIONS IS DONE WITHIN 3 MONTHS AND FURTHER TH AT THE DEED HAS NOT BEEN GOT REGISTERED TILL THE DATE OF ASSESSMENT ORDER I.E. 2 5.12.2008. A LETTER WAS FILED BEFORE THE AO DATED 21.10.2008 WHEREIN AO WAS REQUE STED TO SUMMON SHRI BIJENDER PAL SINGH. HOWEVER, THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT ASSESSEES VERSION AS TO ITS PROPERTY TRANSACT ION WITH SHRI BIJENDER PAL SINGH DOES NOT STAND THE TEST OF HUMAN PROBABILITY. FROM THE ORDERS OF THE AUTHORITIES BELOW, IT APPEARS THAT WHOLE TRANSACTION WAS DOUBTE D TO BE BOGUS WITH REGARD TO AGREEMENT TO SALE ENTERED WITH SHRI BIJENDER PAL SI NGH AND RECEIPT OF ADVANCE MONEY OF RS.15 LAKHS FROM HIM, BECAUSE SHRI BIJENDE R PAL SINGH WAS NOT ITA-636/D/2010 5 PRODUCED BEFORE ANY OF THE LOWER AUTHORITIES FOR CO NFRONTATION. AS PER THE OBSERVATION IN THE ORDER OF CIT(A), SHRI BIJENDER P AL SINGH DIED ON 25.12.2007 WHICH WAS MUCH PRIOR TO THE DATE OF FRAMING THE ASS ESSMENT ORDER. WHEN THE ORIGINAL PERSON HAS EXPIRED, THE AO SHOULD CALL FOR THE WITNESS SIGNING SUCH AGREEMENT ON THE BASIS OF WHICH THE ASSESSEE HAS AL LEGED RECEIPT OF ADVANCE PAYMENT. THE AO SHOULD HAVE MADE FULL INQUIRY OF T HE AGREEMENT SO ENTERED RATHER THAN GOING INTO TECHNICALITIES WITH TO ITS A TTESTATION NOR THE AO SHOULD HAVE GONE INTO PRESUMPTION TO THE EFFECT THAT AGREEMENT SHOULD MENTION THE CLAUSE OF ITS REGISTRATION WITHIN THREE MONTHS IN PLACE OF TWO YE ARS AS PROVIDED IN THE AGREEMENT. ALL THE WITNESSES ARE REQUIRED TO BE SU MMONED TO VERIFY THE CORRECTNESS AND GENUINENESS OF THE TRANSACTION SO E NTERED AND THE LEGAL HEIR OF THE DECEASED MAY ALSO BE SUMMONED TO EXPLAIN THE AVAILA BILITY OF CASH GIVEN TO THE ASSESSEE VIS--VIS TRANSACTION SO ENTERED. ALL THE SE THINGS ARE LACKING AT AOS PART. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTOR E THIS ENTIRE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO HAVE A DETAILED ENQUIRY INTO THE GENUINENESS OF THE TRANSACTION BY CALLING THE WITNESSES IN WHOSE PRESE NCE THE AGREEMENT WAS SIGNED. THE AO MAY ALSO CALL THE LEGAL HEIR OF SHRI BIJENDE R PAL SINGH TO ASCERTAIN THE GENUINENESS OF THE TRANSACTION SO ENTERED AND THE A MOUNT OF RS.15 LAKHS GIVEN BY SHRI BIJENDER PAL SINGH, VIS--VIS CIRCUMSTANCES UN DER WHICH THE TRANSACTION WAS GOT CANCELLED AND THE MONEY WAS REFUNDED BACK BY TH E ASSESSEE TO SHRI BIJENDER PAL SINGH. THE AO IS TO DECIDE AFRESH IN TERMS OF OUR DIRECTION GIVEN HEREINABOVE. WE DIRECT ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2010. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23.07.2010. VK. ITA-636/D/2010 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR