Sh. Satnam Singh, Yamunanagar V. ITO, Yamunanagar

ITA 763/CHANDI/2014

• Counselvise Citation: 76321514 RSA 2014
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY JAIN SH ROHIT KAURA
• Keywords: Unexplained cash credit; Assessment record
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT ITA NO.763/CHD/2014 ASSESSMENT YEAR:2006-07 SH. SATNAM SINGH, VS. ITO S/O SH. KARAM SINGH WARD 2 VILLAGE- MANDAULI YAMUNANAGAR YAMUNANAGAR, PAN NO. ANZPK4262E (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AJAY JAIN SH. ROHIT KAURA RESPONDENT BY : SH. JITENDER KUMAR DATE OF HEARING : 22/07/2015 DATE OF PRONOUNCEMENT : 31/07/2015 ORDER PER H.L.KARWA, VP THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE LD. CIT(A), PANCHKULA, DT. 13/06/2014 FOR THE A SSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL: 1. THAT THE LEARNED CIT(A), IS NOT JUSTIFIED IN EN HANCING THE ADDITION TO RS. 8 LACS, INSTEAD OF DELETING THE ADDITION OF RS. 3 LACS AS MADE BY THE ASSESSING OFFICER. 2. THAT THE LEARNED CIT(A), IS NOT JUSTIFIED IN MI SREADING THE CLEAR EVIDENCE I.E. CERTIFICATE OF NAHARPUR CANE GROWERS CO-OPERATIVE SOCIETY LTD. AND COPY OF A/C OF COMMISSION AGENTS (AARTHIYA ) 3. THAT LEARNED CIT(A) IS UNJUSTIFIED IN NOT GIVING THE BENEFIT OF CASH RECEIPTS BY THE ASSESSEE AND DEPOSITED WITH THE BAN K WITHIN 3 MONTHS ON THE GROUND THAT THE NEXUS HAS NOT BEEN PROVED THOUG H THE CASH HAD NOT BEEN UTILIZED ANYWHERE ELSE. 2 4. THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN NOT GIVING THE BENEFIT OF AGRICULTURAL INCOME FOR THE IMMEDIATELY PRECEDING Y EAR. 3. BRIEF FACTS OF THE CASE ARE THAT FOR THE AY 2006 -07 ASSESSMENT U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 DETERMINING T OTAL TAXABLE INCOME AT RS. 3,01,266/- VIDE ORDER DATED 28.06.2011, MAKING AN A DDITION OF RS. 3,00,000/-, UNDER SECTION 68 OF THE ACT, ON ACCOUNT OF UNEXPLAI NED CASH DEPOSITED IN BANK. THE CIT(A), VIDE HIS ORDER DT. 13.06.2014, ENHANCED THE ADDITION U/S 68 TO RS. 8 LACS AGAINST WHICH THE ASSESSEE HAS COME UP IN APPE AL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO GONE THROUGH THE MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE SAME THAT THE ASSESSEE IS AN AGRICULTURIST. DURING ASSESSMENT PROCEEDINGS, FOR THE IMPUGNED AY, IT WAS FOUND THAT HE HAD DEPOSITED CASH OF RS. 3 LACS ON 30.03.2 006 IN HIS BANK AND ADVANCED THE SAME TO ONE MR. BAKSHISH SINGH. BEFORE THE AO, THE ASSESSEE CONTENDED THAT THE SAME WAS ADVANCED OUT OF HIS AGR ICULTURAL INCOME, BEING SALE PROCEEDS OF SUGARCANE CULTIVATED BY HIM. IT WA S STATED THAT THE SAME WAS DULY DISCLOSED IN HIS RETURN OF INCOME FILED U/S 14 8. THE AO HELD THAT THE ASSESSEE HAD NOT BEEN ABLE TO ESTABLISH NEXUS BETWEEN SALE P ROCEEDS OF SUGARCANE AND CASH DEPOSITED IN BANK, AND THEREFORE ADDED BACK TH E SAME TO THE INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT, 1961. BE FORE THE CIT(A), THE EXPLANATION OF THE ASSESSEE REGARDING THE DEPOSITS OF RS. 13 LACS WAS THAT, DURING THE IMPUGNED AY HE HAD EARNED AGRICULTURAL I NCOME OF RS. 5,72,000/- FROM HIS LAND MEASURING 25 ACRES AT VILLAGE MANDOLI , WHICH HAD BEEN DULY SHOWN IN HIS RETURN OF INCOME. THE ENTIRE SALE PROC EEDS HAD BEEN RECEIVED ON OR BEFORE 30.03.2006 AND OUT OF WHICH HE HAD DEPOSITED RS. 3 LACS(1,40,400 + 1,59,600) IN HIS BANK ACCOUNT ON THE SAME DAY. THI S AMOUNT WAS FURTHER ADVANCED TO SH. BAKSHISH SINGH ON THE SAME DAY. THE ASSESSEE SUBMITTED 3 PHOTOCOPIES OF ACCOUNT WITH COMMISSION AGENT, M/S S OHAN SINGH AVTAR SINGH SHOWING RECEIPT OF RS. 3,00,717/-AND A CERTIFICATE FROM NAHARPUR CANE GROVERS COOPERATIVE SOCIETY, YAMUNA NAGAR, SHOWING SUGARCAN E SUPPLY WORTH RS. 9,90,452/- TO A SUGAR MILLS ALONGWITH A COPY OF BAN K STATEMENT IN PNB, YAMUNA NAGAR. 5. THE BANK STATEMENT REVEALED THAT THE ASSESSEE HA D DEPOSITED A SUM OF RS. 13 LACS DURING THE YEAR IN HIS ACCOUNT ON VARIO US DATES AS FOLLOWS: DATE AMOUNT 28-03-2006 RS. 2,00,000 28-03-2006 RS. 3,00,000 30-03-2006 RS. 1,40,400 30-03-2006 RS. 1,59,600 31-03-2006 RS. 5,00,000 RS. 13,00,000 THE ENTIRE AMOUNT HAD BEEN ADVANCED TO VARIOUS PART IES AS FOLLOWS: DATE NAME OF PARTY AMOUNT 28-03-2006 M/S AMRIT GAS RS. 3,00,000/- 29-03-2006 M/S AMRIT TELECOM RS. 2,00,000/- 30-03-2006 SH. BAKSHISH SINGH RS. 3,00,000/- (PROP. HPGS ENT.) 31-03-2006 SH. BAKSHISH SINGH RS. 50,000/- SH. SURINDER PAL SINGH RS. 50,000/- SH. GURCHARAN SINGH RS. 4,00,000/- ----------- ------------- RS. 13,0 0,000/- 6. THE CIT(A) ASKED THE ASSESSEE TO EXPLAIN THE ENT IRE DEPOSITS OF RS. 13 LACS. IN RESPONSE TO WHICH THE ASSESEE SUBMITTED THAT RS. 3 LACS WAS DEPOSITED OUT OF HIS OWN AGRICULTURAL INCOME OF RS. 5,72,000/- FROM THE 25 ACRES LAND OWNED BY HIM AT VILLAGE MANDOLI AND DULY DISCLOSED IN HIS RE TURN OF INCOME. HE FURTHER STATED THAT RS. 5 LACS DEPOSITED IN HIS BANK ACCOUN T ARE ATTRIBUTED TO AGRICULTURAL 4 INCOME EARNED FROM LAND BELONGING TO HIS BROTHER SH . GURCHARAN SINGH AND NEPHEWS SH. BAKSHISH SINGH AND SHRI. SURINDER PAL S INGH, WHICH WERE CULTIVATED BY HIM. THE BALANCE RS. 5 LACS WERE ATTRIBUTED BY H IM TO HIS PAST EARNINGS. THE CIT(A) REJECTED THE SUBMISSIONS OF THE ASSESSEE FOR LACK OF CORROBORATIVE DOCUMENTARY EVIDENCE AND ACCEPTING DEPOSITS TO THE TUNE OF RS. 5 LACS FROM HIS OWN AGRICULTURAL INCOME, HE WENT ON TO TREAT THE BA LANCE OF RS. 8 LACS AS UNEXPLAINED CREDIT U/S 68 AND ENHANCED THE ASSESSEE S INCOME BY RS. 8 LACS. 7. IT IS APPARENT FROM THE RECORDS THAT VIDE SHOW C AUSE NOTICE DT 22-04-2014, LETTER NO. CIT(A)/PKL/14-15/89, THE CIT(A) HAD ASKE D THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSIT OF RS.13,00,000/- IN HIS BAN K ACCOUNT. IN RESPONSE TO THE SAME THE ASSESSEE FILED HIS REPLY DT. 30/04/2014, P LACED AT PAGES 34 & 35 OF THE PAPER BOOK, WHICH READS AS UNDER: WITH REFERENCE TO YOUR LETTER NO. CIT(A)/14-15/89 DATED 22.04.2014, I AM SUBMITTING THE FOLLOWING INFORMATI ON:- 1. I HAVE 25 ACRES AGRICULTURE LAND AT VILLAGE MAN DOLI AND ALSO CUTIVATE THE AGRICULTURE LAND MY BROTHER S. GURCHARAN SINGH AND NEPHEWS S. BAKSHISH SINGH AND S. SURINDER SINGH SITUATED AT VI LLAGE MANDOLI. I HAVE GIVEN RS. 50,000/- TO S. BAKSHISH SINGH, RS. 50,000 /- TO S. SURINDER PAL SINGH AND RS. 400,000/- TO S. GURCHARAN SINGH AS THESE SH ARE OF AGRICULTURE INCOME. 2. AMOUNT RS. 5.00 LACS IS DEPOSITED OUT OF SALE PR OCEED OF AGRICULTURE PRODUCED OF LAND OF MY BROTHER S. GURCHARAN SINGH, S. SURINDER PAL SINGH AND S. BAKSHISH SINGH. 3. OUT OF SALE PROCEED OF AGRICULTURE PRODUCTS RS. 3.00 LACS (140400+159600) CASH HAS BEEN DEPOSITED ON 30.03.20 06 WHICH IS DEPOSITED ON 2 ND LAST DAY OF FINANCIAL YEAR 2005-06. PROOF OF SALE PROCEED REALLY SHOWS THAT PAYMENT HAS BEEN RECEIVED ON OR B EFORE 30.03.2006. 4. I HAVE GIVEN RS. 300,000/- TO M/S AMRIT GAS AND RS. 200,000/- TO M/S AMRIT TELECOM OUT OF MY PREVIOUS YEAR AND CURRENT Y EAR AGRICULTURE INCOME. 5. I HAVE FILLED INCOME TAX RETURN FOR THE ASST. YE AR 2006-07 SHOWING INTEREST INCOME OF RS. 1266/- AND AGRICULTURE INCOME OF RS. 572600/- FROM THE ABOVE SAID LAND. AND I HAVE ALSO FILLED INCOME TAX RETURN FOR THE ASST. YEAR 2005-06 SHOWING AGRICULTURE INCOME OF RS. 5,86,000/ -. HENCE, I HAVE EXPLAINED THE SOURCE OF ENTIRE CASH DEPOSITED OF RS. 13.00 LACS AND SHOULD NOT BE TREATED AS UNEXPLAINED CASH. FURTHER, YOU ARE REQUESTED THAT CASH DEPOSIT OF RS . 13.00 LACS NOT TO BE TREATED AS UNEXPLAINED CASH DEPOSIT AND DELET E THE ADDITION OF RS. 3.00 LACS. 5 8. THE ASSESSEE HAS ALSO SUBMITTED PHOTOCOPIES OF ACCOUNT WITH COMMISSION AGENT, M/S SOHAN SINGH AVTAR SINGH SHOWING RECEIPT FROM SALE OF AGRICULTURAL PRODUCE OF RS. 3,00,717/-AND A CERTIFICATE FROM NAH ARPUR CANE GROWERS COOPERATIVE SOCIETY, YAMUNA NAGAR, SHOWING SUGARCAN E SUPPLY WORTH RS. 9,90,452/- TO SUGAR MILLS P B ( 4-6). BESIDES THE A SSESSE HAS ALSO SUBMITTED A CHART SHOWING AGRICULTURAL INCOME OF HIMSELF AND GURCHARA N SINGH,BAKSHISH SINGH, & SURINDER PAL SINGH ALONGWITH THEIR ACKNOWLEDGEMENTS /COMPUTATION OF INCOME, P B(1-28) 9. FROM THE ABOVE IT APPEARS THAT THE ASSESSE HAD T RIED TO PROVE HIS BANK DEPOSITS OF RS.13 LACS ,AS RS. 5 LACS BEING ATTRIBU TABLE TO HIS AGRICULTURAL INCOME ,WHILE RS. 4 LACS ,RS.50,000/- AND ANOTHER RS.50,00 0/- BEING ATTRIBUTABLE TO THE AGRICULTURAL INCOMES OF GURCHARAN SINGH,BAKSHISH S INGH, & SURINDER PAL SINGH RESPECTIVELY.COPY OF RETURNS OF ALL THESE PERSONS R EFLECTING THESE INCOMES HAS ALSO BEEN FURNISHED.THE ASSESSE HAS ALSO FURNISHED EVIDENCE OF THE ENTIRE AGRICULTURAL INCOME IN THE FORM OF PHOTOCOPIES OF A CCOUNT WITH COMMISSION AGENT, M/S SOHAN SINGH AVTAR SINGH SHOWING RECEIPT FROM SALE OF AGRICULTURAL PRODUCE OF RS. 3,00,717/-AND A CERTIFICATE FROM NAH ARPUR CANE GROVERS COOPERATIVE SOCIETY, YAMUNA NAGAR, SHOWING SUGARCAN E SUPPLY WORTH RS. 9,90,452/- TO SUGAR MILLS. THUS AS PER THE ASSESSE OUT OF TOTAL BANK DEPOSITS OF RS. 13 LACS ,RS. 10 LACS ARE ON ACCOUNT OF AGRICULTURAL INCOME OF HIS OWN AND INCOME EARNED FROM THE LAND BELONGING TO HIS BROTHER SH. G URCHARAN SINGH AND NEPHEWS S/SH. BAKSHISH SINGH AND SURINDER PAL SINGH WHICH WAS BEING CULTIVATED BY HIM AND THE BALANCE OF RS. 3 LACS IS ALLEGEDLY O UT OF HIS PAST SAVINGS. AS REGARDS THE EVIDENCE OF HIS PAST SAVINGS, THE ASSES SEE HAS FURNISHED COPIES OF INCOME TAX RETURNS OF PRECEDING YEARS SHOWING AGRIC ULTURAL INCOME. 6 10. THE CIT(A) HAS WITHOUT APPRECIATING THE ENTIRE SUBMISSIONS AND EVIDENCES STATED AT PAGE 4 PARA 6.1 OF HIS ORDER AS FOLLOWS: IN RESPONSE TO THE SHOW CAUSE, THE ASSESSEE REITE RATED THAT HE HAS 25 ACRES AGRICULTURAL LAND AT VILLAGE MANDOLI A ND ALSO CULTIVATE AGRICULTURAL LAND OF HIS BROTHER AND NEPHEWS. THE A SSESSEE FURTHER SUBMITTED THAT RS. 5 LACS CASH DEPOSITED OUT OF SAL E PROCEEDS OF AGRICULTURAL LAND OF HIS BROTHER, RS. 3 LACS OUT OF SALE PROCEEDS RECEIVED ON OR BEFORE 30.03.2006 AND MONEY ADVANCED OF RS. 3 LA CS TO M/S AMRIT GAS AND RS. 2 TO M/S AMRIT TELECOM WAS OUT OF PREVIOUS YEAR AND CURRENT YEAR AGRICULTURAL INCOME. IT WAS FURTHER SUBMITTED THAT IN THE RETURN FILED FOR A.Y. 2006-07, BESIDES INTEREST INCOME OF RS. 1,266/-, AG RICULTURAL INCOME OF RS. 5,72,600/- HAS BEEN SHOWN FROM THE ABOVE AGRICULTUR AL LAND. THE ASSESSEE WAS GIVEN FURTHER OPPORTUNITY TO CORROBORATE ITS SU BMISSION WITH DOCUMENTARY EVIDENCES. HOWEVER, THE ASSESSEE FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCE IN SUPPORT OF ITS SUBMISSION. FURTHER, THE ASSESSMENT RECORD WAS ALSO EXAMINED AND IT WAS NOTI CED THAT THE ASSESSEE HAS NOT PROVIDED ANY DOCUMENTARY EVIDENCE EXCEPT FOR A COPY OF ACCOUNT WITH COMMISSION AGENT AND A COY OF CERTI FICATE OF COOPERATIVE SOCIETY. IT IS EVIDENT FROM THE OBSERVATIONS OF THE CIT(A) T HAT HE HAS NOT CONSIDERED THE EXPLANATION AND EVIDENCE GIVEN BY THE ASSESSEE IN I TS ENTIRETY. THEREFORE, I SET ASIDE THE ORDER OF CIT(A) IN TOTO AND REMAND THE MA TTER TO THE CIT(A) FOR A FRESH CONSIDERATION. THE ASSESSE IS AT LIBERTY TO PRODUCE FRESH EVIDENCE, IF SO ADVISED. THE CIT(A) IS DIRECTED TO CONSIDER ALL THE EVIDENCE AND SUBMISSIONS MADE AND DISPOSE OFF THE APPEAL IN ACCORDANCE WITH LAW, EXPE DITIOUSLY, AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE PREFERABLY W ITHIN FOUR MONTHS FROM THE DATE OF RECEIPT OF COPY OF THE ORDER. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31/07/2015 SD/- (H.L. KARWA) VICE PRESIDENT DATED: 31/07/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR