Shri Ram Singh(Demised) L/H Shri Harvinder Singh, Panchkula V. ITO-Ward-6(5), Mohali

ITA 65/CHANDI/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7830 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Reason to believe
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

आयकर य कर , य य “ब ”, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’, CHANDIGARH BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 65/Chd/2020 (Assessment Year: 2009-10 Sh.Ram Singh(Demised), Through Legal Heir Sh.Harvinder Singh, #31, Sector 11, Panchkula. बनाम The Income Tax Officer, Ward – 6(5), Mohali. थायी लेखा सं./PAN NO: CYFPS4028H नधा रती क ओर से/Assessee by : None राज व क ओर से/ Revenue by : Shri Manveet Sehgal, Sr.DR स ु नवाई क तार ख/Date of Hearing: 22.02.2022 उदघोषणा क तार ख/Date of Pronouncement: 28.02.2 022 (Hearing through Webex) आदेश/ORDER Per Vikram Singh Yadav, Accountant Member: This is an ap peal filed b y the asses se e aga inst t he or der of Lear ned Commiss ioner of Income Tax(Appe als)- 2 , C h a nd i g a r h , [ i n s h o r t t he ‘ L d . C I T( A ) ’ ] d a t e d 2 3 . 1 0 . 2 0 1 9 p e r t a i ni n g t o a s s e s s m e n t y e a r 2 0 0 9 - 1 0 w h e r e i n t h e a s s e s se e h a s t ak e n t h e f o l l o w i n g g r o u n d s o f a p p e a l : “1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the proceedings initiated under section 147 of the Act in as much as there has been no escapement of income warranting issuance of notice under section 148 of the ITA No.65/Chd/2020 A.Y.2009-10 2 Act and as such the order passed is arbitrary and unjustified. 2. That the Ld. Commissioner of Income (Appeals) has erred in law and facts in upholding the reopening in as much the assessment has been re-opened on the basis of borrowed information without any independent enquiry and reason to believe before the recording of reasons and as such the order passed is arbitrary and unjustified. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the addition of Rs.82,56,500/- in utter disregard of the explanations rendered which is arbitrary and unjustified. 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 4. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.” 2 . N o n e h a s a p p e a re d o n b e h a l f o f t h e a s s e s se e a n d o n p e r u s a l o f r e c o r d s i t i s o b s e r v e d th a t t h e C o u n s e l a p p o i n t e d b y t h e a s se s se e h a d w i t h d r a w n h i s P o w e r o f At t o r n e y o n 0 5 . 1 0 . 2 0 2 1 a n d t h e r e a f te r t h e m a t t e r h a s b e e n f i x e d f o r h e a r i n g o n 0 9 . 1 2 . 2 0 2 1 a n d t h e r e a f t e r o n 2 2 . 0 2 . 2 0 2 2 . H o w e ve r , t h e r e i s a c o n s t a n t n o n - c o mp l i a n c e o n p a r t o f t h e a s s e s se e . N o ne h a s a p p e a r e d n o r a n y a d j o u r n m e n t a p p l i c a t i o n h a s b e e n f i le d b y / o n b e h a l f o f t he a s s es s e e . Th e r e f o r e , k e e p i n g i n t o a c c o u n t t h e f a c t t h a t t h e ap p e a l w a s f i l e d w a y b a c k i n t h e y e a r 2 0 2 0 a n d t h e m a t t e r h a s b e e n a d j o u r n e d f r o m t i m e t o t i m e a n d t h e r e i s c o m p l e te no n - c o m p l i a n c e a n d r e l u c t a n c e o n t h e p a r t o f t h e a s s e s se e to p u r s u e t he p r e se n t m a t t e r , i t w a s d e c i d e d n o t t o a dj o u r n t h e ITA No.65/Chd/2020 A.Y.2009-10 3 m a t t e r a n y f u r t h e r a s n o u s e f u l p u r p o s e se e m s t o b e se r ve d a n d d e c i d e t h e m a t t e r a f t e r h e a r i n g t h e l d D R a n d ba s i s t h e m a t e r i a l a v a i l a b l e o n r e c o r d . 3 . B r i e f l y , t h e f a c ts o f t he c a s e a r e t h a t i n t h i s c a s e n o t i c e w a s i s s u e d u / s 1 4 8 o f t h e A c t , b a s i s i n f o r m at i o n t h a t t h e a s s e s s e e h a d d e p o s i te d c a s h a m o u n t i n g t o R s . 8 3 , 0 1 , 5 0 0 / - i n h i s b a n k a c c o u n t m a i n t a i n e d w i t h O r i e n t a l B a n k o f C o m m e r c e . I n r e s p o n se t o t h e no t i ce , t h e a s s e s se e f i l e d h i s r e t u r n o f i n co m e d e c l a r i n g i n c o me o f R s . 2 , 3 9 , 9 6 4 / - i n c l u d i n g a g r i c u l t u r a l i n c o m e o f R s . 1 , 5 0 , 0 0 0 / - . R e g a r d i n g c a s h d e p o s i t i n t h e b a n k ac c o u n t , i t w a s s u b m i t t e d t h a t t h e a s se s se e o w n e d a p i e c e o f l a n d s i t u a t e d a t V i l l a g e S h i n g a r i w a l a , w h i c h w a s a c q u i r ed b y I A S / P C S o f f i c e r s C o o p e r a t i ve H o u s e B u i l d i n g S o c i e t y L i m i t e d , M o h a l i f o r a s u m o f R s . 7 9 . 3 6 l a c s a n d th e e n t i r e s a l e c o n s i d e r a t io n w a s r e ce i v e d i n h i s b a n k a c c o u n t m a i n t a i n e d w i t h P u n j a b N a t i o n a l B a n k , M u l l a n p u r , K ha r a r . Th e r e a f t e r h e w i t h d r e w t he a m o u n t f r o m t i m e t o t i m e f o r m a k i n g a p p r o p r i a t e i n ve s t m e n t s . H o w e ve r , d ue to l a ck o f s u i t a b l e o p p o r t un i t y o f m a k i n g t h e i n v e s t m e n t , th e a m o u n t w a s r e - d e p o s i t e d i n t o h i s b a n k a c c o u n t d u r i n g f i n a nc i a l y e a r 2 0 0 8 - 0 9 a n d t h e r e a f te r he p u r c h a s e d l a n d f or a s u m o f R s . 1 . 0 2 c r o r e s . F u r t h e r t he c a s h - f l o w s t a t e m e n t w a s s u b m i t t e d d u r i n g t h e c o u r s e o f a s s e s s m e n t p r o ce e d i ng s . Th e ITA No.65/Chd/2020 A.Y.2009-10 4 s u b m i s s i o n s o f i l e d b y t he a s se s s e e w a s c o n s i d e r e d b u t n o t f o u n d a c c e p t a b l e t o t h e A O a n d a d d i t i o n o f R s . 8 2 , 5 6, 5 0 0 / - w a s m a d e i n t h e h a n d s o f t h e a s s e s se e b e s i d e s a d d i ti o n o f R s . 8 9 , 9 6 4 / - t o w a r d s i n t e r e s t e a rn e d o n t h e s a v i n g ac c o u n t a n d t h e r e l e v a n t f i n d i n g s o f t h e A O a r e c o n t a i n e d at p a r a s 3 a n d 4 o f t h e a s s e s s m e n t o r d e r , w h i c h r e a d a s u n de r : “3. The assessee's counsel has submitted cash flow statement as per table above in respect of the respective deposits. As per cash flow, the cash in hand has been stated to have been generated from cash withdrawal from the said bank account since December, 2005 onwards. It has been contended that the assesses was looking for appropriate investment and since no suitable opportunity of investing money could materialize as the market during the period was highly inflated/volatile, the cash was deposited back in bank account. However, no specific documentary evidence has been submitted in support of the said contention. The assessee has also failed to clearly establish the purpose of holding such huge cash for so long since the year 2005. Hence the contention of the assessee has not been found acceptable and the source of the said deposits remains unexplained. After considering deposits made in the said bank account on various dates and after allowing benefit of cash withdrawals made during the relevant financial year which have been redeposited, an amount of Rs. Rs, 82,56,500/- remains unexplained and is treated as income of the assessee from unknown and unexplained sources of the assessee and is charged to tax accordingly. I am satisfied that the assessee has concealed the particulars of income of Rs. 82,56,500/-. Therefore, penalty proceedings u/s 271(1) (c) of the I.T. Act, 1961 for concealment of particulars of Income are initiated separately. 4. Further, perusal of statement of bank account reveals that the assessee has earned interest of Rs. 89,964/- on savings during the year under consideration, The same is treated as income of the assessee from other sources and is charged to tax. accordingly. I am satisfied that the assessee has concealed the particulars of income of Rs. 89,964/- because had the case not been selected for scrutiny, the same would have escaped assessment. Therefore, penalty proceedings u/s ITA No.65/Chd/2020 A.Y.2009-10 5 271(1) (c) of the I.T. Act, 1961 for concealment of particulars of income are initiated separately.” 4 . B e i n g a g g r ie ve d , t h e a s se s s e e c a r r i e d t h e m a t t e r i n a p p e a l b e f o r e t he L d . C I T( A ) c h a l l e n g i n g t h e o r d e r pa s s e d b y t h e A O b o t h o n l e g a l i t y a s w e l l o n m e r i t s o f t he c as e . Th e L d . C I T( A ) , h o w e v e r , r e j e c t e d t h e gr o u n d s o f a p p e a l t a k e n b y t h e a s s e s s e e a n d t h e r e le v a n t f i n d i n g s a r e c o n t a i n ed a t p a r a s 9 . 1 2 t o 1 0 . 1 o f h i s o r d e r , wh i c h r e a d a s u n d er : “9.1 The submissions of the assessee have been considered. It is clear in light of above case laws that the re-assessment proceedings had been initiated rightfully in the case. Upon the formation of a reason to believe under section 147 and following the issuance of a notice under section 148, the Assessing Officer has the power to assess or reassess the income, which he has reason to believe had escaped assessment and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The notice was served upon the assessee through affixture. He also hired counsel for the case i.e. Smt. Meenakshi Gupta, CA. She appeared on his behalf and attended the case time to time and submitted relevant documents which the AO did not found satisfactory and the cash deposits remains unexplained. Accordingly, the AO completed the assessment. Having participated in the assessment proceedings and thereafter taking the plea that notice was not served upon the assessee fails logic. It's relevant to mention that the counsel who partook in the assessment proceedings in the same who attended the appellate proceedings. There is thus a continuity in the pleadings, on behalf of the assessee, before the income tax authorities. The plea that notice was not served upon the assessee and therefore the entire reassessment was void abinitio needs to be summarily rejected. Grounds of appeal no. 3 85 4 are dismissed. 9.2 It has been noticed that the appellant has expired on 21.10.2018. The fact as asserted by the death certificate of the assessee. The counsel of the assessee ITA No.65/Chd/2020 A.Y.2009-10 6 vide letter dated 14.08.2019 submitted that the appellant is survived by the following legal heirs alongwith a request for impleading them in the appellate case: (i) Smt. Nachattar Kaur, aged 65 Years, w/o Late Sh. Ram Singh. (ii) Sh. Balwinder Singh, aged 45 years s/o Late Sh. Ram Singh. (iii) Sh. Harvinder Singh, aged 40 years s/o Late Sh. Ram Singh. All are resident of Vill. Shingariwala, PO Mullanpur, Kharar, Mohali. 10. Grounds of appeal no. 5 & 6 are against addition of Rs.82,56,500/- on account of cash deposits. 10.1 The submissions of the assessee have been considered. It is pretty much /evident that the additions have been made primarily on the basis of sweep in credits reflected in the bank account. In support of the sources for the impugned deposits the additional evidence that he sold his land in Village Shingariwala for consideration of Rs.79.36 lacs to IAS/PCS Officers Co- operative House Building Society ltd. Mohali was submitted. The records, however, reveal evidence for only one sale deed of Rs.34.36 lakhs against the claims of assessee for Rs.79.36 lacs. The assessee has not been able to explain the balance amount of Rs.45 lacs. It is further relevant to examine that the date mentioned on the sale deed is 01/12/2005 however, the assessment was for the F.Y. 2008-09 relevant to A.Y. 2009-10. The subsequent argument was that the deposits in F.Y. 2008-09 were made in order to purchase land for Rs. 1.02 Crores. There is no evidence of the purchase of land amounting to Rs.1.02 Crores. As per the bank statement of account no. 11962011000843 maintained with Oriental Bank of Commerce, there are debit entries of Rs.56,00,000/- and Rs.45,95,000/- , the said amount was given to Sh. Manpreet Singh. The same was riot explained by the assessee. The crux of the arguments therefore are that the assessee had withdrawn nearly 80 lacs in F.Y. 2005-06 (that was sourced from sale of land previously to the IAS/PCS Co-operative House Building Society) which was retained and deposited back in F.Y. 2008-09 and subsequently used in 2008-09 to buy property worth ITA No.65/Chd/2020 A.Y.2009-10 7 Rs.1.02 crores. The following relevant issues crop up when the aforementioned is examined: (i) There is evidence of only 17 lakhs received by the assessee (half share) out of Rs.34 lakhs paid by the IAS/PCS Co-operative House Building Society. (ii) It's highly unlikely that a society of IAS/PCS officers made payments in cash that could explain the balance 45 lakh cash claimed by the assessee out of the said transaction. (iii) Even if the above was true the assessee would be captioned as a party to an arrangement designed to hoodwink the state government authorities of the stamp duties leviable. (iv) Further if the assessee had such a large amount of cash available with him there was no occasion for subsequent withdrawals of cash from the same account in small quantities presumably to meet household expenses. (v) The explanation given that the said deposits were made to facilitate purchase of another property for Rs.1.02 Crores in the same year has not been evidence. No proof of the transaction was provided either during the assessment or the appellate proceedings. In the light of all the above, when the matter is examined through the prism of human probability the contention that the amounts deposited in 2008-09 were the same as what was withdrawn in 2005-06, have to be rejected as improbable and unlikely. Both the source of money withdrawn in 2005 and the destination of money utilized in 2008-09 don't get corroborated. As a consequence the treatment of the amounts deposited in cash during the year in contention as income from other source does not require any intervention. The AO's order is upheld. It is, by no stretch of imagination, an order based on whims and fancies but squarely based on assessee's inability to provide credible evidence. Grounds of appeal no. 5 & 6 are dismissed.” ITA No.65/Chd/2020 A.Y.2009-10 8 5 . W e h a v e c a r e f u l l y g o n e t h r o u g h t h e a s se s s m e n t a nd a p p e l l a te o r d e r s a n d a l s o h e a r d t h e L d . D R w h o h a s r e l i e d u p o n t h e f i n d i n g s o f t h e l o w e r a u t h o r i t i e s . W e f i nd t h a t t h e A O h a s c a r r i e d o u t n e c e s s a r y e x a m i n a t i o n a n d i n v e s ti g a t i o n i n r e l a t i o n t o t h e s o u r c e o f t he c a s h d e p o s i t s i n th e b a n k a c c o u n t m a i n t a i n e d b y t h e a s se s s e e a n d h a s f o u n d t he e x p l a n a t i o n s o s u b m i t t e d b y th e a s se s se e i n t e r m s of h o l d i n g h u g e ca s h i n h a n d s i n c e t h e ye a r 2 0 0 5 , n o t a c c e p t a b l e a n d h a s m a d e t h e a d d i t i o n s . Th e r e a f t e r th e L d . C I T( A ) h a s a g a i n e x a m i n e d t h e f a c t u a l m a t r i x o f t h e c a s e a n d h a s he l d t h a t t h e c r u x o f t h e a r g u m e n t o f t he as s e ss e e t h a t h e h a d w i t h d r a w n n e a r l y Rs . 8 0 l a c s i n f i n a n c i al y e a r 2 0 0 5 - 0 6 , w h i c h w a s s o u r c e d f r om s a l e o f l a n d to I A S/ P C S C o o p e r a t i ve H o us e B u i l d i n g S o c i e t y a n d i t w a s r e ta in e d a nd r e - d e p o s i te d i n th e b a n k a c c o u n t i n f i n a n c i a l y e a r 2 0 0 8 - 0 9 a s i m p r o b a b l e a n d u n l i k e l y a s b o t h t h e s o u r c e o f m on e y w i t h d r a w n i n 2 0 0 5 a n d d e s t i n a t i o n o f m o n e y u t i l i z e d i n 2 0 0 8 - 0 9 d o e s n o t g e t c o r r o b o r a te d . Th e r e f o re , i n t he l i g h t o f m a t e r i a l a v a i l a b l e o n r e c o r d , w e d o n o t s e e a n y j us t i f i a b l e b a s i s t o i n t e r f e r e w i t h t he f i n d i ng s o f t h e l o w e r au t h o r i t i e s a n d t h e a d d i t i on s o m a d e , i s h e r e b y c o n f i r m e d a n d th e g r o u n d s o f a p p e a l s o t a k e n b y t h e a s s e s s e e a r e d i s mi s s e d . ITA No.65/Chd/2020 A.Y.2009-10 9 6 . B e f o r e p a r t i n g w e m a y a d d t h a t w h e r e s o a d v i s e d , t h e a s s e s se e m a y s e e k l i b e r t y t o r e c a l l t h i s o r d e r a f t er s h o w i n g r e a s o n a b le c a u s e t o t h e s a t i s f a c t i o n o f t h e B e n c h fo r n o n - c o m p l i a n c e a n d n o n - a p p e a r a n c e i n s p i te o f r e p e a te d o p p o r t u n i t i e s , a n d a n y m a t e r i a l w h i c h h a s b e e n b e a ri n g o n t h e m a t t e r a n d w h i c h h a s s k i p p e d t h e a t te n ti o n o f th e B e n c h . 7 . I n t he r e s u l t , t h e a p p e a l o f t he a s s e s se e i s d i sm i s s e d . O r d e r p r o n o u n c e d o n 2 8 . 0 2 . 2 0 2 2 . Sd/- Sd/- (DIVA SINGH) (VIKRAM SINGH YADAV) /Judicial Member /Accountant Member Dated: 28.02.2022 *रती* # $ % & '( )* '! / Copy of the order forwarded to : 1. अपीलाथ+/ The Appellant 2. %,यथ+/ The Respondent 3. आयकर आय ु -त/ CIT 4. आयकर आय ु -त (अपील)/ The CIT(A) 5. 'वभागीय % त न0ध, आयकर अपील य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File # $ स / By order, सह (ंज / Assistant Registrar ITA No.65/Chd/2020 A.Y.2009-10 10 Draft dictated 24.02.2022 Sr.PS Draft placed before author 25 .02.2022 Sr.PS Approved Draft comes to the Sr.PS/PS Sr.PS Order signed and pronounced on File sent to the Bench Clerk Sr.PS Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order.