Sh. Deepak Kumar Bagga, Hoshiarpur V. The Assistant Commissioner of Central Circle, Jalandhar

ITA 70/ASR/2012

• Counselvise Citation: 7020914 RSA 2012
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 27-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: VIJAY MAOHOTRA
• Keywords: Unexplained investment; Business income; Income from undisclosed sources
• Section: 54B

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.70(ASR)/2012 ASSESSMENT YEAR:2001-02 PAN :AEKPB8104N SH. DEEPAK KUMAR BAGGA, VS. ASSTT. COMMR. OF INCOME -TAX, S/OSH. JUGAL KISHORE BAGGA, CENTRAL CIRCLE-II, JAL ANDHAR. HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VIJAY MAOHOTRA, ADVOCATE RESPONDENT BY:SH. AMRIK CHAND, DR DATE OF HEARING:26/11/2012 DATE OF PRONOUNCEMENT:30/11/2012 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), LUDHIANA, DATED 13.12.2011 FOR THE ASSESSMENT YEAR 2001-02. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. AO HAS LEGALLY ERRED IN LAW AND FA CTS IN MAKING ADDITION OF RS.63,000/- TREATING IT AS UNEXPLAINED INVESTMENT. 2. THAT THE LD. O HAS LEGALLY ERRED IN FACT AND LA W IN DISALLOWING DEDUCTION OF RS.2,87,576/- U/S 54B OF THE ACT. ITA NO.70(ASR)/2012 2 3. THAT THE AO HAS LEGALLY ERRED ON LAW AND FACTS I N MAKING ADDITION OF RS.4,00,000/- TO THE RETURNED INCOME. 4. THAT THE ASSESSEE CRAVES THE RIGHT TO ALTER AMEN D OR TO DELETE ANY OF THE GROUNDS OF APPEAL. 2. IN GROUND NO.1, THE BRIEF FACTS AS PER AOS ORDE R IN PARA 3, WHICH IS REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: ASSESSEES SB A/C NO.62441 MAINTAINED WITH PUNJAB NATIONAL BANK, JALANDHAR ROAD, HOSHIARPUR SHOWS CREDITS OF RS.3,60 ,000/- ON 16.11.2000 AND RS.3,000/- ON 17.11.2000. OUT OF THE CREDIT BALANCE OF RS.3,61,024/- IN THIS BANK, THE ASSESSEE HAS PURCH ASED FDR FOR RS.3,43,000/- ON 16.11.2000. IT IS SEEN THAT THE AS ESSEE HAS MADE WITHDRAWAL OF RS.3,00,000/- ON 16.11.2000 FROM HIS CASH BOOK FOR DEPOSIT IN THE SAID BANK. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF BALANCE DEPOSIT OF RS.63,000/- IN HIS BAN K ACCOUNT. HE HAS FAILED TO FURNISH ANY EXPLANATION IN RESPECT OF THE SOURCE OF THE BALANCE AMOUNT OF RS.63,000/-. AS SUCH AN ADDITION OF RS.63,000/- WILL BE MADE IN THE ASSESSEES INCOME ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE BANK ACCOUNT. I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OF RS.63,000/- AND PENALTY PROCEEDINGS U/S 271(1)(C) ARE BEING INITIATED SEPAR ATELY. 3. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE, SH. VIJAY MALHOTRA, ADVOCATE ARGUED THAT THE TELESCOPING ADDITION OF RS .1,10,000/- MADE IN EARLIER ASSESSMENT YEAR I.E. 2000-01 BE ALLOWED TO THE ASSESSEE. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE, RELIED UP ON THE DECISIONS OF VARIOUS COURTS OF LAW AS UNDER: A) CIT VS. RAM SANCHI GIAN CHAND 86 ITR 724(P&H) B) ADDL. CIT VS. GHAI LIME STONE CO. 144 ITR 140 (M P) C) CIT VS. SANDHU BROTHERS 115 ITR 438 (MP) D) ADDL. CIT VS. DHARAM DASS AGGARWAL 144 ITR 143 (MP) ITA NO.70(ASR)/2012 3 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE C OULD NOT EXPLAIN THE SOURCE OF DEPOSIT OF RS.63,000/- DURING THE YEAR. NO COGEN T EXPLANATION HAS BEEN GIVEN BEFORE ANY OF THE AUTHORITIES BELOW FOR THE S OURCE OF THE SAID DEPOSIT. THE ASSESSEE HAS BEEN ARGUING THE ADDITIONS OF EARL IER YEARS BEFORE THE ITAT IS ALSO NOT UNDER DISPUTE. NOTHING HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE BEFORE ANY OF THE AUTHORITIES BELOW OR BEF ORE US WHETHER THE ADDITIONS IN THE PRECEDING YEARS TANTAMOUNT TO INCR EASE CASH IN HAND. NO DOCUMENTARY EVIDENCE OR COGENT EXPLANATION HAS BEEN BROUGHT ON RECORD IN THIS REGARD. THEREFORE, IN THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE ADDITIONS MADE IN EARLIER YEARS WITHOUT ANY COGENT EXPLANATION OR DOCUMENTARY EVIDENCE CANNOT BE SET OFF AGAINST SHOR T OF CASH FOR NON- EXPLANATION OF THE DEPOSIT DURING THE YEAR, IN THE ABSENCE OF ANY LINK OF THE PRECEDING YEAR OF BROUGHT-FORWARD CASH IN THE IMPU GNED YEAR. EVERY YEAR IS INDEPENDENT YEAR IN THE INCOME TAX PROCEEDINGS AND THE ASSESSMENT OF INCOME DEPENDS UPON CIRCUMSTANCES AND FACTS OF A PA RTICULAR YEAR. THEREFORE, THE CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, AS MENTIONED HEREINABOVE; DO NOT HAVE ANY APPLICABILIT Y IN THE PRESENT FACTS ITA NO.70(ASR)/2012 4 AND CIRCUMSTANCES OF THE CASE. THEREFORE, WE FIND N O INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NO.1 OF THE ASSESSEE I S DISMISSED. 7. AS REGARDS GROUND NO,2, THE BRIEF FACTS AS EMANA TING FROM PARA 4 TO 4.3 OF AOS ORDER ARE REPRODUCED FOR THE SAKE OF CL ARITY AS UNDER: 4. IN THE COMPUTATION OF INCOME FILED ALONGWITH T HE RETURN, THE ASSESSEE HAS SHOWN TO HAVE SOLD AGRICULTURAL LA ND AT VILLAGE NALOIAN FOR TOTAL AMOUNT OF RS. 3,00,000/- ON WHICH LONG TERM CAPITAL GAIN HAS BEEN WORKED OUT AT RS. 2,87,576/-. THE ASSESSEE HAS CLAIMED THE LONG TERM CAPITAL GAIN AS EXEMPT ON THE GROUND THAT HE HAS MADE INVESTMENT FOR PURCHASE OF AGRICULTURAL LAND DURING THE YEAR AND PAID ADVANCE MONEY. 4.1. VIDE ORDER SHEET ENTRY DATED 27.11.2007, THE A SSESSEE WAS REQUIRED TO PROVE WITH SUPPORTING DOCUMENTARY E VIDENCE THAT THE CAPITAL GAIN ACCRUED ON THESE SALES IN EX EMPT FROM INCOME TAX AS CLAIMED. THE ASSESSEE HAS, HOWEVER, NOT FURNISHED ANY EXPLANATION IN THIS REGARD. IT IS, T HEREFORE, CLEAR THAT THE ASSESSEE HAS NOTHING TO SAY IN THIS REGARD . 4.2. IT IS SEEN THAT NO AGRICULTURAL LAND WAS PURC HASED BY THE ASSESSEE WITHIN THE PERIOD PRESCRIBED UNDER SECTION 54B. THE ASSESSEE HAS ALSO NOT FILED ANY EVIDENCE IN THIS RE GARD. AS THE ASSESSEE DOES NOT SATISFY THE CONDITION OF PURCHASE OF ANOTHER LAND FOR AGRICULTURAL PURPOSES WITHIN A PERIOD OF T WO YEARS FROM THE DATE OF SALE OF LAND THE EXEMPTION U/S. 54 B, AS CLAIMED BY THE ASSESSEE IS NOT ALLOWABLE. 4.3. THE LONG TERM CAPITAL GAIN WORKED OUT BY THE A SSESSEE ON THE SALE OF LAND AT R. 2,87,576/- IS, THEREFORE, TA XABLE IN THE HANDS OF THE ASSESSEE. I AM SATISFIED THAT THE ASS ESSEE HAS CONCEALED THE PARTICULARS OF INCOME OF RS. 2,87,576 /- AND PENALTY PROCEEDINGS U/S. 271 (1) (C ) ARE BEING INI TIATED SEPARATELY. 7.1. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASS ESSING OFFICER. ITA NO.70(ASR)/2012 5 7.2. THE LD. COUNSEL FOR THE ASSESSEE, SH. VIJAY MA LHOTRA, ADVOCATE, ARGUED THAT THE ADVANCE PAID FOR PURCHASE OF AGRICU LTURAL LAND IS SUFFICIENT COMPLIANCE OF SECTION 54B WHICH TANTAMOUNTS TO PURC HASE OF AGRICULTURAL LAND. HE RELIED UPON THE DECISION OF THE ITAT, AMRI TSAR BENCH, IN THE CASE OF USHA VAID VS. ITO DASUYA PASSED IN ITA NO.98(ASR )/2011, DATED 27.07.2012 AND THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT, LUDHIANA VS. JASWANT SINGH IN APPE AL NO.670 OF 2005 DATED 30.11.2010. 7.2. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7.3. WE HAVE HEAD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE DID NOT SUBMIT ANY EXPLANATION WHICH I S EVIDENT FROM THE FINDINGS OF THE AO IN PARA 4 TO 4.3. BEFORE THE LD. CIT(A), HE SUBMITTED THAT THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND BY MA KING ADVANCES AS UNDER: DATE AMOUNT 11/11/1999 RS.2,50,000/- 22/06/2000 RS.1,25,000/- 29/06/2000 RS. 20,000/- 22/11/2000 RS. 45,000/- 7.4. AS PER ORDER OF THE AO, THE ASSESSEE SOLD AGRI CULTURAL LAND FOR RS.3,00,000/- LACS DURING THE YEAR ON WHICH LONG TE RM CAPITAL GAIN HAS BEEN ITA NO.70(ASR)/2012 6 WORKED OUT AT RS.2,87,576/- . WHEREAS THE ASSESSEE HAS CONTESTED AND WHICH IS EVIDENT IN THE PLEADINGS MADE AS APPEARING IN PA RA 5 OF CIT(A)S ORDER THAT RS.1,90,000/- HAVE BEEN INVESTED DURING THE YE AR WHEREAS RS.2,50,000/- HAD BEEN INVESTED IN THE PRECEDING YEAR. THEREFORE, THE TOTAL SALES CONSIDERATION IS RS.3,00,000/- OR RS.4,40,000/- OR MORE OR LESS HAS TO BE BROUGHT ON RECORD IN VIEW OF THE SUBMISSIONS GIVEN BY THE LD. COUNSEL BEFORE THE LD. CIT(A) IN PARA 5 OF HIS ORDER. IN VI EW OF THE DECISION STATED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US, THERE I S NO DISPUTE TO THE FACT, IF THE ENTIRE SALE CONSIDERATION HAS BEEN INVESTED THEN C ONDITIONS UNDER SECTION 54B WILL STAND FULFILLED. THE MATTER REQUIRES VERIF ICATION BY THE LD. CIT(A). THEREFORE, KEEPING INTO CONSIDERATION THE ACTUAL SA LE CONSIDERATION WHETHER THE SAME HAS BEEN INVESTED IN THE FORM OF ADVANCE O R OTHERWISE HAS TO BE BROUGHT ON RECORD IN VIEW OF THE DECISION OF THE HO NBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. JASWANT SINGH (SU PRA) PLACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE, THE M ATTER IS SET-ASIDE TO THE FILE OF THE LD. CIT(A), WHO WILL DECIDE THE ISSUE DENOV O, AS DIRECTED HEREINABOVE. THUS, GROUND NO.2 OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. 8. AS REGARDS GROUND NO.3, THE BRIEF FACTS AS ARIS ING FROM THE ORDER OF THE AO IN PARA 5 TO 5.2 ARE REPRODUCED HEREUNDER: ITA NO.70(ASR)/2012 7 5. VIDE POINT NO. (VI) OF THE QUESTIONNAIRE DATED 11.10.2007, THE ASSESSEE WAS REQUIRED TO FURNISH DE TAILS OF INVESTMENT MADE IN THE IMMOVABLE PROPERTIES DURING THE YEAR INDICATING DETAILS OF PROPERTY/INVESTMENT, DATE/PER IOD OF INVESTMENT, AMOUNT AND SOURCE THEREOF WITH SUPPORTI NG DOCUMENTARY EVIDENCE. THE ASSESSEE HAS STATED VIDE POINT NO. 3 OF HIS LETTER DATED 10.12.2007 THAT THE INVESTMEN T MADE BY HIM IN THE IMMOVABLE PROPERTIES DURING THE YEAR A AS PE R ANNEXURE 3 ENCLOSED WITH THIS LETTER AND THAT ALL THE PURCHA SES DURING THE YEAR HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUN T. 5.1 DURING SEARCH AT THE RESIDENCE OF S/SH. RAJIV S OOD AND ASHWANI KUMAR SOOD AT HOSHIARPUR, AN AGREEMENT DATE D 22.02.2001, ( PAGE 72 OF ANNEXURE A-6) WAS FOUND AN D SEIZED. ACCORDING TO THIS AGREEMENT, THE ASSESSEE HAD ALRE ADY MADE ADVANCE OF RS. 2,50,000/- TO SHRI BALWINDER SINGH S ON OF SHRI AJIT SINGH, VILLAGE KOKKON, TEHSIL HOSHIARPUR FOR P URCHASE OF 14 KANAL 5 MARLAS LAND IN VILLAGE KOKKON, TEHSIL HO SHIARPUR AND MADE FURTHER PAYMENT OF RS. 1,50,000/- TO SAID SHRI BALWINDER SINGH ON 22.02.2001. A COPY OF THIS AGRE EMENT HAS BEEN PLACED ON RECORD. THE ASSESSEE HAS THUS MADE TOTAL ADVANCE OF RS. 4,00,000/- TO THE SAID SHRI BALWINDE R SINGH AGAINST THE ABOVE SAID LETTER DURING THE PERIOD UND ER ASSESSMENT. 5.2. A PERUSAL OF ANNEXURE-3 FILED WITH THE ASSESSE ES LETTER SHOWS THAT THE ASSESSEE HAS NOT SHOWN THIS INVESTME NT OF RS. 4,00,000/- IN THE IMMOVABLE PROPERTY. THE CASH BOO K OF THE ASSESSEE FOUND DURING SEARCH AS ANNEXURE A-15 HAS A LSO BEEN EXAMINED AND IT IS FOUND THAT THE ASSESSEE HAS NOT MADE ANY WITHDRAWAL DURING THE YEAR FINANCIAL YEAR 2000-01 F OR MAKING ADVANCE TO SAID SHRI BALWINDER SINGH FOR MAKING ADV ANCE OF RS. 4,00,000/-. IT IS THUS CLEAR HAT THE ASSESSEE HAS MADE INVESTMENT OF RS. 4,00,000/- IN THE ABOVE SAID LAND OUT OF HIS INCOME FROM UNDISCLOSED SOURCES AND THE SAME IS ADD ED IN THE ASSESSEES INCOME. I AM SATISFIED THAT THE ASSESSE E HAS CONCEALED THE PARTICULARS OF INCOME OF RS. 4,00,000 /- AND PENALTY PROCEEDINGS U/S. 271(1)(C ) ARE BEING INITI ATED SEPARATELY. ITA NO.70(ASR)/2012 8 8.1. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASS ESSING OFFICER. 8.2. THE LD. COUNSEL FOR THE ASSESSEE MR. VIJAY MAL HOTRA, ADVOCATE, ARGUED THAT THE AO HAS NOT DISCHARGED HIS ONUS OF P ROVING THAT THE ASSESSEE HAS MADE THE PAYMENT. THE LD. CIT(A) HAS FAILED TO PRODUCE ORIGINAL DOCUMENT OF AGREEMENT. THE LD. COUNSEL FOR THE ASSE SSEE RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW WHICH ARE REPROD UCED AS UNDER: A) CIT VS. SETINDER KUMAR (2001) 250 ITR 484 (P&H) B) RAM SAROP SAINI (HUF) VS. ACIT (2007) 15 SOT 47 0 ITAT, (DELHI) C) BEMCH BABOK POWER LTD VS. DCIT (2004) 87 TTJ (DE L) 781 (ITAT DELHI BENCH) D) CIT VS. LUBTEE INDIA LTD (2009) 311 ITR 175 (DEL HI) 8.3. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8.4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. IN THIS REGARD, THERE WAS AN ARGUMENT OF THE ASSESS EE BEFORE THE CIT(A) AS WELL AS BEFORE US THAT NO OPPORTUNITY HAS BEEN PROV IDED TO CONFRONT THE DOCUMENT SO FOUND TO THE ASSESSEE. WE ARE CONVINCED WITH THE ARGUMENT MADE BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE LD. CIT(A) AS WELL AS BEFORE US THAT THE ASSESSEE SHOULD BE CONFRONTED BE FORE ANY DECISION IS TAKEN ON THE DOCUMENT FOUND AND THAT TOO AT THE THIRD PAR TYS PLACE. IT WILL BE IN THE INTEREST OF JUSTICE, IF THE MATTER IS RESTORED TO T HE FILE OF THE LD. CIT(A), WHO WILL PROVIDE REASONABLE OPPORTUNITY TO THE ASSESSEE FOR CONFRONTING THE ITA NO.70(ASR)/2012 9 DOCUMENT SO FOUND AT THE THIRD PARTY PLACE AND ACCO RDINGLY DECIDE THE ISSUE DENOVO. THUS, GROUND NO.3 OF THE ASSESSEE IS ALSO A LLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA 70(ASR)/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH NOVEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30TH NOVEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. DEEPAK KUMAR BAGGA, HOSHIARPUR. 2. THE ACIT, CC-II, 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.