SHRI ASHWANI KUMAR, HOSHIARPUR V. INCOME TAX OFICER WARD-3, HOSHIARPUR

ITA 81/ASR/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5600 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure
• Section: 69; 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. RAVISH SOOD, JUDICIAL MEMBER AND Dr. M. L. MEENA, ACCOUNTANT MEMBER ITA No. 81/(Asr)/2018 Assessment Year: 2011-12 Shri Ashwani Kumar, S/o Sh. Kabal Chand, VPO Adamwal, Hoshiarpur. PAN: BKFPK 4262C Vs. Income Tax Officer, Ward-3, Hoshiarpur (Appellant) (Respondent) Appellant by : Sh. J.S Bhasin, Advocate. Respondent by: Smt. Ratinder Kaur, D.R. Date of Hearing: 13.12.2021 Date of Pronouncement: 24.12.2021 ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by Commissioner of Income Tax (Appeals)-1, Jalandhar [for short “CIT(A)], dated 26.12.2017, which in turn arises from the order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (for short ‘Act’) dated 29.01.2014 for Assessment Year 2011-12. 2. The assessee has assailed the impugned order on the following grounds of appeal before us : ITA No.81-ASR-2018 2 “01. That in the facts and circumstances of the case, the Ld. CIT(A) has grossly erred in sustaining the addition of Rs.23,13,502/- as made by the ld. ITO, on wholly erroneous and insufficient grounds. 2. That the ld. CIT(A) was not justified in holding that the sworn affidavit filed by assessee was self serving and was not substantiated when the assessee was never required to further do so. 3. That by any reckoning, the orders of the authorities below, are not sustainable being contrary to the law laid down by Hon’ble Apex Court in CIT vs. P K Noorjahan (1999) 237 ITR 570 (SC). 4. That the order under appeal is against law and facts of the case.” 3. Briefly stated, the assessee had filed his return of income for Assessment Year 2011-12 on 12.07.2011, declaring an income of Rs.1,59,500/-. The return of income filed by the assessee was processed as such u/s. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 4. During the course of the assessment proceedings, it was observed by the Assessing Officer that the reason on the basis of which the case of the assessee was selected, i.e., AIR information, revealed, that the assessee had made cash deposits of Rs.45.50 lacs in his Saving Bank Account No.55098535343 with State Bank of Patiala, Branch: Kanak Mandi, Hoshiarpur. On being queried as regards the source of aforesaid cash deposits the assessee distanced himself from the same and submitted that he had in order to facilitate his getting settled abroad had given his signed blank cheque book to his friend, viz., Shri Jatinder Kumar, a travel agent, who thereafter had for a period of 12 to 18 months managed and operated the same. In sum and substance, the assessee expressed his ignorance about the nature and source of the cash deposits in his bank account and claimed that the same could only be explained by Shri Jatinder Kumar (supra). The Assessing Officer recorded the statement of the assessee, wherein he expressed his unawareness as regards the cash deposits and the withdrawals made in his bank account. However, ITA No.81-ASR-2018 3 the Assessing Officer did not find favour with the aforesaid explanation of the assessee. Observing, that the assessee was a semi-literate person who was earlier running a shop and was presently working with a company as an agent, the Assessing Officer held a conviction that the assessee on finding himself cornered by the department qua the substantial amount of unexplained cash deposits in his bank account had came forth with a cooked up story which had no legs to stand upon. Backed by his aforesaid conviction the Assessing Officer after rejecting the explanation of the assessee added the peak of the cash deposits of Rs. 23,13,052/- as an unexplained income of the assessee u/s 69 of the Act. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). Before the CIT(A), the assessee submitted that he was a man of meager financial means who during the year under consideration was residing in a house of four marlas along with his father(since deceased), wherein one room was used for running a small grocery shop by him. It was the claim of the assessee that with a dream of making a fortune abroad, he as so advised by his friend, viz., Shri Jatinder Kumar, a travel agent, had applied for a visa for shifting to Canada. It was submitted by the assessee that he was advised by Shri Jatinder Kumar (supra) to show financial transactions in his bank account in question, i.e., Savings Bank Account No. 55098535343 with State Bank of Patiala, Hoshiarpur for a period of 12 to 18 months or more. It was the claim of the assessee that in order to facilitate the aforesaid requirement of reflecting series of transactions and a healthy balance in his bank account he had handed over his blank signed cheque book to his aforesaid friend, viz. Shri. Jatinder Kumar (supra) who had thereafter deposited the funds in question and also made the withdrawals from the said account. It was also the claim of the assessee that a withdrawal of Rs. 8.58 lac on 29.03.2010 was made by Shri Jatinder Kumar (supra) coupled with withdrawals of substantial amounts ITA No.81-ASR-2018 4 by the latters accomplices, viz. S/shri Harvinder Singh, Surjit Singh etc., which therein clearly established that the entire bank account was during the relevant assessment year managed and operated by Shri. Jatinder Kumar(supra). In order to buttress the genuineness and veracity of his aforesaid claim the assessee had filed an “affidavit” with the CIT(A). However, CIT(A) did not find favour with the aforesaid claim that was so raised by the assessee before her. Insofar the “affidavit” filed by the assessee was concerned, the CIT(A) dubbed the same as a self serving document and rejected it, for the reason, that the same was not substantiated by the assessee on the basis of any corroborative material. As regards the claim of the assessee that the bank account during the year under consideration was managed and operated by Shri Jatinder Kumar (supra), the same too was rejected by the CIT(A), for the reason, that in support of the said claim the assessee had neither produced Shri Jatinder Kumar (supra) nor furnished his statement. Observing, that the assessee despite having been afforded sufficient opportunity to explain the ‘nature’ and ‘source’ of the cash deposits in his bank account had failed to do so, the CIT(A) finding no infirmity in the view taken by the Assessing Officer upheld the peak addition of Rs.23.13 lac so made by him. 5. The assessee being aggrieved with the order of the ld. CIT(A) has carried the matter in appeal before us. 6. Shri. J.S Bhasin, Advocate, the Ld. Authorized Representative (for short “AR”) for the assessee took us through the observations of the lower authorities. It was submitted by the ld. A.R. that the assessee, a man of poor financial means who was hardly able to make his both ends meet, on being lured by the green pastures abroad, had blindly acted as per the dictates of his friend, viz., Shri Jatinder Kumar (supra), and as so advised, had in his attempt to impress upon the Canadian embassy of a series of financial transactions and a healthy balance in his bank ITA No.81-ASR-2018 5 account had handed over his blank signed cheque book to his aforementioned friend, viz. Shri. Jatinder Kumar who thereafter had managed and operated his bank account over a period of 12 to 18 months or more. Backed by his aforesaid contention, it was submitted by the ld. A.R that the assessee right from inception had submitted before the authorities below that he was absolutely unaware about the source of the cash deposits in his bank account. It was submitted by the ld. A.R that the assessee had in order to impress upon the lower authorities that he had no financial means to source the cash deposits in question drawn support from the facts pertaining to his financial status, family background, petty job/small time business etc. It was submitted by the ld. A.R that as the assessee had no material with him to substantiate the veracity of his aforesaid claim, therefore, he had filed an “affidavit” before the CIT(A) deposing the facts as they so remained. It was averred by the ld. A.R that the CIT(A) had most arbitrarily rejected the “affidavit” filed by the assessee by treating the same as a self serving as the same as per her being devoid and bereft of any corroborative evidence was nothing but an afterthought story that was hatched by the assessee on being caught on the wrong foot by the department. It was submitted by the ld. A.R that considering the peculiarity of the facts involved in the case the CIT(A) in all fairness ought to have called for a ‘remand report’ from the A.O and should have verified the factual position as was claimed by the assessee before him. Ld. AR in order to drive home his claim that the Assessing Officer as per the mandate of law remained vested with a discretion as to whether or not an addition in the hands of an assessee is to be made by taking recourse to Section 69 of the Act, therein, relied upon the judgment of Hon’ble Supreme Court in the case of CIT vs. P.K. Noorjahan, 237 ITR 570 (SC). ITA No.81-ASR-2018 6 7. Per contra, the ld. Departmental Representative (for short ‘D.R’) relied upon the orders of the authorities below. It was submitted by the ld. D.R that as the assessee had failed to discharge the ‘onus’ that was cast upon him as regards explaining the ‘nature’ and ‘source’ of the cash deposits in his bank account, therefore, the Assessing Officer had rightly treated the said amount as an unexplained investment within the meaning of Section 69 of the Act. Adverting to the claim of the assessee that the amount deposited in the bank account belonged to one Shri Jatinder Kumar (supra), it was submitted by the ld. D.R that as the said claim was not backed by any supporting material, therefore, the same did not merit acceptance. 8. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncement that have been pressed into service by the ld. A.R in order to drive home his aforesaid claim. Admittedly, it is a matter of fact borne from the record that during the year under consideration an amount of Rs.45.50 lac stood deposited in the Saving Bank Account No. 55098535343 of the assessee with State Bank of Patiala, Branch: Kanak Mandi, Hoshiarpur. As observed by us hereinabove, the assessee right from inception on being called upon by the A.O to explain the ‘nature’ and ‘source’ of the cash deposits in his bank account, had claimed, that the same could only be explained by Shri Jatinder Kumar (supra) to whom he had handed over his blank signed cheque book for facilitating a healthy bank balance and a series of transactions which would assist him in obtaining a visa to Canada. Although, the aforesaid explanation of the assessee at the first blush appeared to be nothing short of a concocted story that was hatched by him in order to wriggle out of the difficult situation in which he found himself on being caught on the wrong foot by the department qua the ITA No.81-ASR-2018 7 substantial amount of unexplained cash deposits in his bank account, however, on a careful perusal of the facts as are discernible from the records along with the contentions advanced by the ld. A.R we are persuaded to give a second thought to the issue before us. We cannot remain oblivious of the prevailing practices which are normally followed by villagers in Punjab who would go to any extent to facilitate their immigration to a foreign land, mainly Canada, and fall an easy prey to the false promises of the unscrupulous travel agents who would lure them with their assurances of an easy way of settling abroad. Our aforesaid conviction is further fortified by the poor financial means of the assessee who during the year under consideration was running a small grocery shop in a portion of his four marla house where he during the year had been residing along with his father, a class-3 employee, who was working in a state transport department. Although, it was for the assessee to have come forth with a plausible explanation about the ‘nature’ and ‘source’ of the investments made by him, but then, even de hors a plausible explanation by the assessee, the facts involved in the case should have been considered in totality by the Assessing Officer before arriving at any conclusion. Now, in the case before us, we wonder that as to how the assessee would have substantiated his claim that the amount in question belonged to Shri Jatinder Kumar (supra), a travel agent, because in all probabilities the said person would not have come to the rescue of the assessee by acknowledging the ownership of the funds in question. Under these circumstances, we are of the considered view that there would be no gainsaying that the “affidavit” filed by the assessee was required to be given due weightage and ought to have been considered by the CIT(A) in the backdrop of the other circumstantial evidences which she could have gathered by calling for a ‘remand report’ from the Assessing Officer, with a specific direction to him to make necessary verifications from the aforementioned person, viz., Shri Jatinder Kumar (supra) and the concerned bank, ITA No.81-ASR-2018 8 viz. State Bank of Patiala, Branch: Kanak Mandi, Hoshiarpur as regards the transactions in the bank account of the assessee during the period under consideration. Be that as it may, we are unable to persuade ourselves to subscribe to the summarily discarding of the assessee’s “affidavit” by the CIT(A), for the standalone reason that the same as per her was a self serving document which was not to be considered as it was not supported by any corroborative material. At this stage, we are reminded of the judgment of Hon’ble Supreme Court in the case of Messrs Mehta Parekh & Co. vs. CIT (1995) 30 ITR 181 (SC). In the said judgment, it was observed by the Hon’ble Apex Court that when a statement is given in an “affidavit”, then, the same has to be taken as correct unless proved otherwise. In the backdrop of our aforesaid deliberations, we are of the considered view, that the claim of the assessee that the transactions in the assessee’s bank account were managed and operated by Shri Jatinder Kumar (supra), a travel agent, could not have been summarily brushed aside, and in all fairness, considering the peculiarity of the facts involved in the case before us required a serious consideration on the part of the CIT(A), who we are afraid by loosing sight of the aforesaid material facts pertaining to the assessee, i.e., his limited financial means, family status etc., which prima facie revealed that he had no financial means to have made the aforesaid substantial amount of cash deposits of Rs. 45.50 lac, had in fact hushed through the matter and saddled the assessee with exorbitant taxes. Be that as it may, we are of the considered view that the matter requires to be re- examined by the Assessing Officer, who is accordingly directed to carry out necessary verifications as regards the aforesaid claim of the assessee by conducting necessary enquiries from Shri Jatinder Kumar (supra) and from the bank i.e., State Bank of Patiala, Branch : Kanak Mandi, Hoshiarpur. Needless to say, the Assessing Officer while disposing off the appeal shall afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to ITA No.81-ASR-2018 9 substantiate his aforesaid claim on the basis of fresh documentary evidences. We, thus, in terms of our aforesaid observations set-aside the matter to the file of the Assessing Officer for the limited purpose of verifying the assessee’s claim qua the cash deposits of Rs. 45.50 lac in his saving bank account with State Bank of Patiala, Branch: Kanak Mandi, Hoshiarpur. The Grounds of appeal nos. 1 to 3 are allowed for statistical purposes in terms of our aforesaid observations. 10. The Ground of appeal no. 4 being general in nature is dismissed as not pressed. 11. Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the open court on 24 th December, 2021. Sd/- Sd/- (M.L. Meena) (Ravish Sood) Accountant Member Judicial Member Date: 24.12.2021 prabhat Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T By Order