SHRI SANT SADHU SINGH, HOSHIARPUR V. INCOME TAX OFFICER,WARD-4, HOSHIARPUR

ITA 763/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6295 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 01-05-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 18-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Onus to prove
• Section: 143(3); 133(6); 143(1); 147; 148; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 763/ASR/2017 A SSESSMENT YEAR: 2009-10 SANT SADHU SINGH, CHELLA SANT HARI SINGH, VPO KAHARPUR, HOSHIARPUR [PAN: ATOPS 3154J] VS. INCOME TAX OFFICER, WARD-4, HOSHIARPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SURINDER MAHAJAN (C.A.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 01.05.2019 DATE OF PRONOUNCEMENT: 29.07.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE-INDIVIDUAL, AGITA TING THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, JALANDHAR ( 'CIT(A)' FOR SHORT) DATED 03.10.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING HIS ASSESSMENT U/S. 143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 ('THE ACT' H EREINAFTER) DATED 20.12.2016 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THE ISSUE ARISING IN THIS APPEAL IS THE MAINTAIN ABILITY OF THE ADDITION OF RS.10 LACS TO THE ASSESSEES RETURNED INCOME, U/S. 69/69A OF THE ACT, SINCE CONFIRMED BY THE FIRST APPELLATE AUTHORITY, I.E., IN THE FACTS A ND CIRCUMSTANCES OF THE CASE. 3. IT WOULD BE RELEVANT TO STATE THE BACKGROUND FAC TS OF THE CASE. THE ASSESSEE FILED HIS RETURN FOR THE RELEVANT YEAR ON 31.3.2010 , DECLARING AN INCOME OF ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 2 RS.21,72,090, I.E., BESIDES AGRICULTURAL INCOME AT RS.9.50 LACS. THE RETURN WAS PROCESSED AS SUCH U/S. 143(1) OF THE ACT. ENQUIRIES WITH THE ASSESSEE U/S. 133(6) IN RESPECT OF CASH DEPOSITS (AT AN AGGREGATE OF RS.25, 79,929) DURING THE RELEVANT YEAR IN HIS SAVINGS BANK ACCOUNT WITH STATE BANK OF PATI ALA (SBP), MAHILPUR, DISTRICT HOSHIARPUR, ELICITING NO RESPONSE, PROCEEDINGS U/S. 147 WERE INITIATED BY THE ISSUE OF NOTICE U/S. 148 ON 03.02.2016 UPON OBSERVING THE PROCEDURAL REQUIREMENTS. THE ASSESSEE FILED A RETURN ON 06.10.2016 ENHANCING THE AGRICULTURAL INCOME TO RS.19.50 LACS, I.E., UP FROM RS.9.50 LACS, WHILE RE TAINING THE OTHER INCOME, BEING BY WAY OF BANK INTEREST, ETC. AT RS.21.72 LACS. THE RE TURNING OF THE AGRICULTURAL INCOME AT RS.9.50 LACS VIDE THE ORIGINAL RETURN WAS CLAIME D TO BE BY WAY OF A MISTAKE. IN SUPPORT, THE ASSESSEE FILED KHASRA GIRDAVARIS OF TH E AGRICULTURAL LANDS (AT VARIOUS PLACES) FOR A TOTAL OF 56 ACRES AND ODD, CLAIMING R S.36,000/- TO BE THE GOING ANNUAL RENT PER ACRE. EVEN AS THE LANDS WERE SELF-CULTIVAT ED, THE SAID RENT, IT WAS SUBMITTED, WOULD GIVE A FAIR IDEA OF THE AGRICULTURAL INCOME T HAT WOULD STAND TO BE GENERATED. THE ASSESSEE HAS, IN ADDITION, SOLD EUCALYPTUS TREE S DURING THE RELEVANT YEAR. THE SAME WAS NOT ACCEPTED IN THE ABSENCE OF ANY PROOF A S TO THE SALE OF CROPS, WHICH, AS PER THE KHASRA GIRDAVARIS, WERE FOR WHEAT, MAIZE, A ND SUGARCANE. THE SALE OF EUCALYPTUS TREES WAS ALSO SANS ANY MATERIAL. THE ASSESSEES AGRICULTURAL INCOME F OR THE TWO IMMEDIATELY PRECEDING, AND THE TWO IMMEDIAT ELY SUCCEEDING, YEARS, WAS AT RS.9.50 LACS EACH. REGARDING THE ASSESSEES AGRICUL TURAL INCOME FOR THE YEAR AT THE ORIGINALLY RETURNED SUM OF RS.9.50 LACS, AN ADDITIO N FOR RS.10 LACS TOWARD UNEXPLAINED CASH DEPOSIT/S IN HIS BANK ACCOUNT WAS MADE BY DEEMING IT AS UNEXPLAINED INCOME, ASSESSING THUS THE TOTAL INCOME AT RS.31,72,090, I.E., BESIDES AGRICULTURAL INCOME AT RS.9.50 LACS. THE SAME BEING CONFIRMED, AND ON THE SAME BASIS, THE ASSESSEE IS IN SECOND APPEAL. 4. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 3 4.1 THE APPEAL, PER ITS THREE GROUNDS, AGITATING T HE ISSUE AFORE-STATED, ASSAILS THE NON-ACCEPTANCE OF THE ASSESSEES AGRICULTURAL INCOM E AT RS.19.50 LACS, STATING THE ORIGINALLY RETURNED SUM OF RS. 9.50 LACS AS A MISTA KE. THE ASSESSEE, STATED TO BE THE HEAD OF A DERA (MATH), IS ADMITTEDLY NOT MAINTAININ G ANY ACCOUNTS. THE FIRST THING THAT STRIKES ONE IS WITH REGARD TO THE QUANTUM OF T HE ADDITION, ASSESSED AT RS.10 LACS, IN-AS-MUCH AS THE ASSESSEE WAS REQUIRED TO EX PLAIN THE CASH DEPOSITS IN HIS BANK ACCOUNT AT RS.25.80 LACS, WHILE THE AGRICULTUR AL INCOME, EVEN AT THE REVISED AMOUNT, IS ONLY RS.19.50 LACS. UPON THIS, IT WAS EX PLAINED BY THE LD. COUNSEL FOR THE ASSESSEE, SH. MAHAJAN, THAT THE NET CASH DEPOSITS A RE AT RS.16.11 LACS, AS UNDER (PG. 5 OF THE ASSESSMENT ORDER): PARTICULARS AMOUNT (RS.) CASH DEPOSIT DURING THE YEAR 25,79,928/- LESS: CASH WITHDRAWAL DURING THE YEAR 9,69,310/- NET CASH DEPOSIT DURING THE YEAR 16,10,618/- THE TOTAL AGRICULTURAL (OR NON-AGRICULTURAL) INCOME , GENERATED IN CASH, IS AT RS.19.50 LACS . THIS, THEREFORE, IT WAS EXPLAINED, LEAVES A SURPL US OF RS.3.39 LACS (RS.19.50 LACS RS.16.11 LACS), WHICH MAY BE REGAR DED AS SPENT FOR PERSONAL PURPOSES. NOW, WITHOUT DOUBT, RS.3.39 LACS IS TOO MEAGER AN A MOUNT FOR RUNNING A DERA AND, THUS, REGARDED AS ADEQUATE FOR THE PURPOS E. HOWEVER, THERE BEING NO ENQUIRY ON THIS ASPECT OF THE MATTER, THE SHORTFALL IN THE CASH GENERATION (WITH REFERENCE TO THE PROVED/ACCEPTED SOURCES OF INCOME) , WHICH IS REQUIRED TO EXPLAIN THE CASH DEPOSITS OF RS.25.80 LACS, DURING THE YEAR , IS THUS TAKEN AT RS.10 LACS. IN OTHER WORDS, THE CLAIM OF AGRICULTURAL INCOME AT RS . 9.50 LACS, AND THEREFORE OF CASH ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 4 TO THAT EXTENT, IS TAKEN AS ACCEPTED. THIS IS CONSI DERED VALID AS RS.6.30 LACS (I.E., RS.9.69 LACS RS. 3.39 LACS) CAN REASONABLY BE REG ARDED AS EXPENDITURE ON AGRICULTURE, GENERATING GROSS AGRICULTURAL REVENUE OF RS.15.80 LACS (I.E., RS.25.80 LACS RS.10 LACS), YIELDING AGRICULTURAL INCOME AT RS.9.50 LACS (RS. 15.80 LACS RS. 6.30 LACS). 4.2 I, NEXT, CONSIDER THE MERITS OF THE ASSESSEES EXPLANATION WITH REGARD TO THE SAID SHORTFALL OF RS.10 LACS, STATED TO BE AGRICULT URAL INCOME. PRIOR TO THE ISSUE OF NOTICE/S U/S. 133(6), ENQUIRING ABOUT THE SOURCE OF THE CASH DEPOSITS IN HIS BANK ACCOUNT, THE ASSESSEE HAD RETURNED AGRICULTURAL INC OME OF RS.9.50 LACS FOR THE PAST FIVE YEARS, I.E., FOR ASSESSMENT YEARS 2007-08 TO 2 010-11. IT IS, UNDER THE CIRCUMSTANCES, THE RETURNING OF THE AGRICULTURAL IN COME AT RS. 19.50 LACS IN RESPONSE TO NOTICE U/S. 148 FOR THE CURRENT YEAR, I .E., AT AN INCREASE OF OVER 100%, THAT, RATHER, OUGHT TO BE INFERRED AS BY WAY OF A MISTAKE. UNLESS, OF COURSE, THE ASSESSEE IS ABLE TO ESTABLISH AN INCREASE IN THE LA NDHOLDING OR CULTIVABLE LAND, OR A SPURT IN THE AGRICULTURAL PRODUCE, OR AN INCREASE I N ITS PRICE/S (WITHOUT CORRESPONDING INCREASE IN INPUT PRICES/COSTS, AS TH E TWO NORMALLY MOVE IN SYMPATHY), OR SOME OTHER LIKE REASON JUSTIFYING THE SHARP INCREASE FOR THE CURRENT YEAR. ON THE CONTRARY, IT IS OBSERVED THAT THE ASSE SSEES CLAIM OF AGRICULTURAL INCOME, MUCH LESS AT THE ENHANCED AMOUNT, IS WHOLLY UNSUBSTANTIATED. AS RIGHTLY OBSERVED BY THE LD. CIT(A) (AT PG. 13 OF THE IMPUGN ED ORDER), THE KHASRA GIRDAVARIS OR JAMABANDI ONLY EVIDENCE THE LANDHOLDI NG OR THE AREA UNDER CULTIVATION, AND NOT THE QUANTUM OF THE AGRICULTURA L INCOME. THE NON-PRESERVING OF FORM-J BY THE ASSESSEE, A REGULAR ASSESSEE (AT LEAS T SINCE AY 1999-2000), RETURNING INCOME, AND AT NO INSUBSTANTIAL SUMS, IS MOST UNEXP ECTED TO SAY THE LEAST. WHY, NO FORM-J ARE PRODUCED EVEN FOR THE SUBSEQUENT YEARS, WHICH COULD GIVE A FAIR ESTIMATE OF THE AGRICULTURAL INCOME IN-AS-MUCH AS T HE YIELD (OF CROPS) WOULD ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 5 NORMALLY FALL IN THE SAME RANGE. THERE IS ALSO NO E VIDENCE OF THE SALE OF EUCALYPTUS TREES, AS WELL AS THE OBTAINING LEASE RENT FOR THE CURRENT YEAR. IN FACT, EVEN AN INCREASE IN THE LANDHOLDING WOULD NOT AUTOMATICALLY TRANSLATE INTO AN INCREASE IN AGRICULTURAL INCOME, UNLESS, OF COURSE, THIS INCREA SE IS FOR THE RELEVANT YEAR ONLY, I.E., AS AGAINST THE PRECEDING AND THE SUCCEEDING Y EARS. THIS IS AS THE RETURNING OF AGRICULTURAL INCOME AT RS. 9.50 LACS FOR THESE YEAR S IS ADMITTEDLY NOT A MISTAKE ! IT IS, UNDER THE CIRCUMSTANCES, THE RETURNING OF AGRIC ULTURAL INCOME AT RS.28 LACS (FOR AY 2012-13) AND RS.30 LACS (FOR AYS 2013-14 AND 201 4-15), RELIED UPON BY SH. MAHAJAN, THAT OUGHT TO BE QUESTIONED OR DOUBTED AS TO ITS VERACITY INASMUCH AS IT IS AT A QUANTUM (I.E., TO THE TUNE OF 3 TIMES) INCREAS E W.R.T. THE PRECEDING YEARS. THAT IS, THE SAME HAS TO HAVE A BASIS IN FACTS, WHICH HA VE NOT BEEN STATED, MUCH LESS SHOWN OR ESTABLISHED. THE FACTS OF THE CASE BEING I N THE INTIMATE KNOWLEDGE OF THE ASSESSE, IT NEEDS TO BE APPRECIATED, CAN ONLY BE LE D BY HIM. IT IS PRECISELY FOR THIS REASON THAT THE PRIMARY BURDEN TO PROVE HIS RETURN, AND THE CLAIMS PREFERRED THEREBY, IS ONLY ON THE ASSESSE (REFER: CIT V. CALCUTTA AGENCY LTD . [1951] 19 ITR 191 (SC); CIT V. R. VENKATASWAMY NAIDU [1956] 29 ITR 529 (SC)). IN THIS CONTEXT ONE CANNOT HELP NOTICE THE IRONY THAT THE SUDDEN, U NEXPLAINED, AND QUANTUM INCREASE IN THE AGRICULTURAL INCOME FOR THE LATER Y EARS (AY 2012-13 ONWARDS) CORRESPONDS TO THE TIME THE NOTICES U/S. 133(6) WER E ISSUED TO THE ASSESSEE (BEING ON 14.02.2012, 06.3.2012, 28.10.2014 AND 13.01.2015 ). THIS IS IN FACT FURTHER ACCENTUATED BY THE FACT THAT THE ASSESSEE ALSO RUNS A DERA REQUIRING FUNDS, IN NO SMALL MEASURE, ON A REGULAR BASIS, AND, AS AFORE-NO TED, DOES NOT MAINTAIN ANY ACCOUNTS. ON WHAT BASIS, IN THE ABSENCE OF ACCOUNTS AND, AS IT TRANSPIRES, MAINTENANCE OF BASIC RECORDS (VIZ. FORM-J), BILLS O F SEEDS; PESTICIDES; LABOUR; ETC., THEN, ONE WONDERS, THE ASSESSEE RETURNS HIS AGRICUL TURAL INCOME FROM YEAR TO YEAR? THAT IS, MUCH LESS, STATE OF THE SUM ORIGINALLY RET URNED WAS BY WAY OF A MISTAKE. (ALSO SEE PARA 4.4) ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 6 4.3 ON THE BENCH OBSERVING DURING HEARING THE ASSES SEES CASE TO BE WHOLLY UN- EVIDENCED, SH. MAHAJAN WOULD SUBMIT THAT, TRUE, BUT , THEN, THE ASSESSEE HAS NO OTHER SOURCE OF INCOME BESIDES AGRICULTURAL INCOME (AND BANK INTEREST), SO THAT, IN THE ABSENCE OF ANY ADVERSE MATERIAL, WHAT IS RETURN ED OUGHT TO BE ACCEPTED AS SUCH. THE ARGUMENT, APPEALING AT FIRST BLUSH, IS NOT TENA BLE, EITHER IN LAW OR ON FACTS. TO BEGIN WITH, THE APEX COURT IN CIT V. DEVI PRASAD VISHVANATH PRASAD [1969] 72 ITR 194 (SC) CLARIFIED THAT WHERE THERE IS AN UNEXP LAINED CREDIT, IT IS OPEN TO THE AO TO HOLD THAT IT IS THE INCOME OF THE ASSESSE, AN D NO FURTHER BURDEN LIES ON HIM TO SHOW THAT THE INCOME IS FROM A PARTICULAR SOURCE. I T IS FOR THE ASSESSEE TO PROVE THAT, EVEN IF THE CASH CREDIT REPRESENTS HIS INCOME, IT I S FROM A SOURCE WHICH HAS ALREADY BEEN TAXED. THE REVENUE IS THUS NOT OBLIGED TO SHOW THE SOURCE OF THE UNEXPLAINED CREDIT. THIS WAS REITERATED BY THE APEX COURT IN ROSHAN DI HATTI V. CIT [1977] 107 ITR 938 (SC). THE SAID STATEMENT OF LAW WOULD APPLY EQUALLY FOR AN ADDITION U/S. 69A, I.E., FOR AN UNEXPLAINED CASH DEPOSIT (IN BANK ). FURTHER, AS AFORE-NOTED, THE ONUS IN LAW TO ESTABLISH THAT HIS INCOME IS SUBJECT TO EXEMPTION, AS U/S. 10(1)(AGRICULTURAL INCOME), IS ON THE ASSESSEE. ON FACTS, THE ASSESSEE HEADS A DERA, WITH A FOLLOWING. IT IS THEREFORE INCONCEIVABLE THA T OFFERINGS ARE NOT MADE BY THE DEVOTEES AT THE DERA, AND IT COULD WELL BE THAT IT IS THESE FUNDS THAT ARE SOUGHT TO BE ROUTED AS AGRICULTURAL INCOME. 4.4 THE ASSESSEE ALSO SEEKS TO RELY ON THE ORDER BY THE TRIBUNAL IN PRADEEP BATRA V. IAC [1991] 39 ITD 406 (DEL), WHEREIN THE TRIBUNAL, NOT ICING IN THE DECISION IN K.J. JOSEPH V. ITO [1980] 121 ITR 178 (KER), HELD THAT THE AO HAS NO POWER UNDER THE ACT TO ESTIMATE THE ASSESSEES AGRI CULTURAL INCOME, A STATE SUBJECT AND, THUS, WITHIN THE COMPETENCE OF THE STATE LEGIS LATURE. THE RELIANCE IS MISPLACED IN-AS-MUCH AS THE TRIBUNAL HAS PER THE SAID ORDER I TSELF CLARIFIED THAT IT WOULD BE OPEN FOR THE AO TO TEST THE CLAIM WITH REGARD TO TH E INVESTMENT MADE OUT OF THE ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 7 INCOME FROM AGRICULTURAL OPERATIONS. IN DOING SO, T HE AO IS NOT ACTING WITHOUT JURISDICTION AS HIS DETERMINATION OF INCOME FROM AG RICULTURE WOULD BE FOR THE LIMITED PURPOSE OF DETERMINING THE INCOME ASSESSABL E UNDER THE ACT. THE LD. CIT(A) HAS REPRODUCED THE SAID OBSERVATIONS BY THE TRIBUNAL AT PG. 12 OF HER ORDER. IN FACT, THE ASSESSEE, IN RELYING ON THIS ORDER, I. E., AS AND IN THE MANNER HE DOES, CONTRADICTS HIS RELIANCE ON THE ASSESSMENT OF THE A GRICULTURAL INCOME AT AN ENHANCED AMOUNT FOR AYS. 2012-13 TO 2014-15. THAT A PART, THE ORDER BY THE TRIBUNAL IS ALSO DISTINGUISHABLE ON FACTS INASMUCH AS IT HAS BEEN OBSERVED THAT THE ASSESSEE IN THE INSTANT CASE HAS ACCESS TO FUNDS TH AT MAY BE OFFERED AT THE DERA (MATH) HE IS RUNNING, WHILE IN THE FACTS OF THAT CA SE THE ASSESSEE HAD NO OTHER KNOWN SOURCE OF INCOME. THE INCOME OF A RELIGIOUS I NSTITUTION, INCLUDING BY WAY OF VOLUNTARY CONTRIBUTIONS, IS NOT EXEMPT PER SE UNDER THE ACT, BUT ONLY ON BEING APPLIED FOR ITS OBJECTS IN TERMS OF S. 11 AND, FUR THER, ONLY WHERE SUCH INSTITUTION IS REGISTERED AS SUCH UNDER THE ACT (S. 12A; U.P. FOREST CORPORATION V. DY. CIT [2008] 297 ITR 1 (SC)). RATHER, THE AGRICULTURE PRO DUCE MAY BE CONSUMED AT THE DERA, AND WHICH PERHAPS ALSO EXPLAINS THE NON-PRODU CTION OF FORM J. THE SAID DECISION IS THUS DISTINGUISHABLE ALSO ON FACTS. 5. I HAVE, IN VIEW OF THE FOREGOING, NO HESITATION IN UPHOLDING THE ADDITION OF RS.10 LACS BY WAY OF UNEXPLAINED CASH DEPOSITS IN B ANK DURING THE YEAR. I DECIDE ACCORDINGLY, DECLINING INTERFERENCE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN CO URT ON JULY 29, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 29.07.2019 /GP/SR. PS. ITA NO. 763/ASR/2017 (AY 2009-10) SANT SADHU SINGH V. ITO 8 COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: SANT SADHU SINGH, CHELLA SANT HARI S INGH, C/O SURINDER MAHAJAN & ASSOCIATES, CAS, 74, VIJAY NAGAR, JALANDH AR - 144 001 (2) THE RESPONDENT: INCOME TAX OFFICER, WARD-4, HOSHIARPUR (3) THE CIT(APPEALS)-1, JALANDHAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER