Sh. Mohan Singh, Fatehgarh Sahib V. ITO, Mandi Gobindgarh

ITA 841/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8349 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Period of limitation; Additional evidence; Assessment record
• Section: 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 841/CHD/2016 ASSESSMENT YEAR: 2009-10 SH. MOHAN SINGH, VS. THE ITO, WARD-1, S/O SH. SUKHDEV SINGH, MANDI GOBINDGARH. DIST. FATEHGARH SAHIB-147203 PAN NO. BIZPS2316D (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 06.02.2017 DATE OF PRONOUNCEMENT : 09 02.2017 ORDER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAI NST THE ORDER OF LD. CIT(A), PATIALA DATED 28.8.2014 FOR ASSESSMENT YEAR 2009-10. 2. I HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED THE ADDITION OF RS. 21,50,000/- ON ACCOU NT OF BANK DEPOSITS IN HIS SAVING BANK ACCOUNT WITH KOTAK MAHINDRA BANK AM OUNTING TO RS. 10,85,500/- AND IN HIS SAVING BANK ACCOUNT WITH HD FC BANK AMOUNTING TO RS. 10,64,500/-. 2 3. IT MAY BE NOTED HERE THAT IMPUGNED ORDER IS DATE D 28.8.2014, HOWEVER, ASSESSEE FILED THE APPEAL ON 7.7.2016 INTI MATING THAT THE IMPUGNED ORDER WAS RECEIVED BY ASSESSEE ON 2.6.2016 . AFTER CONSIDERING THE EXPLANATION OF BOTH THE PARTIES AND PERUSAL OF THE RECORDS PRODUCED BY THE LD. DR, I FIND THAT THE APPEAL IS FILED WITHIN THE PERIOD OF LIMITATION. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AS PER INFORMATION AVAILABLE, THE ASSESSEE DEPOSITED RS. 10,85,500/- I N HIS SAVING BANK ACCOUNT WITH KOTAK MAHINDRA BANK AND RS. 10,64,500/ -IN HIS SAVING BANK ACCOUNT WITH HDFC BANK R AAND THE TOTAL DEPOSITS OF RS. 21,50,000/- WAS ADDED BY THE ASSESSING OFFICES UNDISCLOSED INCOME O F THE ASSESSEE. THE ASSESSING OFFICER PASSED EX. PARTE ORDER U/S 144 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AS NO DETAILS WERE SUBMIT TED BEFORE HIM. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT (A) AND WRITTEN SUBMISSIONS OF THE ASSESSEE IS REPRODUCED IN THE IM PUGNED ORDER IN WHICH ASSESSEE BRIEFLY EXPLAINED THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THESE BANK DEPOSITS BEFORE THE ASSESSING OFFICER BE CAUSE OF HIS FOREIGN STAY AND NOW ADDITIONAL EVIDENCES WERE FILED TO EXPLAIN THESE DEPOSITS WHICH MAY BE CONSIDERED SYMPATHETICALLY FOR THE SAKE OF N ATURAL JUSTICE. THE ASSESSEE FILED APPLICATION U/S 46A OF THE INCOME TA X RULES ALONGWITH HIS AFFIDAVIT AND OTHER DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CONTENTION. THE DOCUMENTS SUBMITTED BEFORE LD. CIT(A) WITH THE REQU EST FOR ADMISSION OF THE SAME AS ADDITIONAL EVIDENCE WERE ASSESSEES AF FIDAVIT, CASH FLOW CHART ALONGWITH BANK STATEMENTS, COPIES OF FORM J SHOWI NG SALE OF AGRICULTURAL PRODUCE AND SALE DOCUMENTS OF CAR NO. PB-10BQ-0900. IT WAS ALSO SUBMITTED THAT ASSESSEE IS NOT MAINTAINING REGULAR BOOKS OF ACCOUNT SUCH AS 3 CASH BOOK, LEDGER ETC. FOR HIS BUSINESS ACTIVITIES OF REPAIRING OF GENERATOR SETS. 5. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF TH E ASSESSEE NOTED THAT ASSESSEE PRODUCED PHOTOCOPIES OF THE PASSPORT / AFFIDAVITS IN SUPPORT OF THE EXPLANATION UNDER RULE 46A OF THE I.T. RULES . THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE WERE ADMITTED A ND WAS DISCUSSED WITH THE ASSESSING OFFICER AND ASSESSMENT RECORD WAS PER USED. THE LD. CIT(A) NOTED THAT ADDITIONAL EVIDENCES HAVE NO MERIT AS T HERE WAS NO EVIDENCE OF ANY AGRICULTURAL INCOME OR SALE OF CAR AND LOOKING INTO THE FACTS OF THE CASE THE SUBMISSIONS REGARDING CIRCULATION OF MONEY HAS ALSO NO BASIS. THE LD. CIT(A) NOTED THAT ASSESSEE HAD TWO BANK ACCOUNTS. AS PER CASH FLOW STATEMENT, THE OPENING BALANCE IS SHOWN AT RS. 1,80 ,000/- WITHOUT ANY CORRESPONDING EVIDENCE, SALE OF AGRICULTURE PRODUCE OF RS. 2,50,263/- WAS SHOWN ON 17.4.2008 AND RS. 1,69,052/- ON 27.10.2008 . THE COPY OF FORM J IS ALSO SUBMITTED. THE LD. CIT(A) NOTED THAT AS SESSEE HAS NOT SHOWN ANY AGRICULTURAL INCOME IN THE EARLIER YEARS. THE A SSESSEE IN THIS REGARD SUBMITTED THAT AGRICULTURAL LAND OWNED BY THE ASSES SEE BELONGS TO HIS HUF, WITH HIS OTHER FAMILY MEMBERS I.E. HIS FATHER AND B ROTHERS, INHERITED AGRICULTURAL LAND FROM HIS FOREFATHERS. THEY INHER ITED ABOUT 21 ACRES OF AGRICULTURAL LAND SITUATED IN VILLAGER RAIPUR RAIAN , TEHSIL AMLOH, DISTRICT FATEHGARH SAHIB. PHOTOCOPY OF THE FARD / ZAMABANDI OF THE SAID LAND IS FURNISHED. SALE OF AGRICULTURAL PRODUCE SHOWN IN TH E CASH FLOW CHART BELONGS TO SAID INHERITED AGRICULTURAL LAND. THERE FORE, AGRICULTURAL INCOME ARISED OUT OF THE SAID LAND WAS NOT SHOWN IN THE IN DIVIDUAL RETURN OF INCOME. THE LD. CIT(A) DID NOT ACCEPT THE CONTENTIO N OF THE ASSESSEE 4 BECAUSE NO AGRICULTURAL INCOME WAS DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME AND HE DID NOT POSSESS ANY AGRICULTURAL L AND IN HIS INDIVIDUAL CAPACITY. REGARDING RS. 4,50,000/- SHOWN AGAINST SA LE OF THE CAR ON 14.5.2008, THE EXPLANATION OF THE ASSESSEE WAS THAT THE SAID AMOUNT WAS RECEIVED IN CASH. THE CAR WAS HANDED OVER TO THE PU RCHASER OF THE CAR AND THE COPY OF THE REGISTRATION CERTIFICATE WAS FURNIS HED. THE ASSESSEE EARLIER PURCHASED THE CAR FROM SMT. SHAINA GOEL OF LUDHIANA . THE AFFIDAVIT FROM SMT. SHIANA GOEL IS FILED. SINCE BANK LOAN WAS ON T HE CAR AND IT WAS HYPOTHECATED TO THE ICICI BANK, SO THE REGISTRATION OF THE CAR REMAINED IN THE NAME OF SMT. SHIANA GOEL AND WAS NOT TRANSFERRE D IN THE NAME OF THE ASSESSEE. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE CAR WAS NOT REGISTERED IN THE NAM E OF THE ASSESSEE. THE CIRCULATION OF THE MONEY BETWEEN THE TWO BANK ACCOU NTS AND WITHDRAWALS MADE FROM BANK ACCOUNTS WERE NOT ALSO ACCEPTED AND THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSED. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISS IONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS FILED COPY OF THE CASH FL OW CHART SHOWING DEPOSITS AND WITHDRAWALS FROM BOTH THE BANK ACCOUNT S. HE HAS SUBMITTED THAT IT IS NOT IN DISPUTE THAT AGRICULTURAL LAND BE LONGS TO HUF AND J FORMS HAVE NOT BEEN DISPUTED FOR SALE OF AGRICULTURAL PRO DUCE. COPIES OF THE SAME ARE FILED IN THE PAPER BOOK AT PAGES 16 & 17 WHICH ARE IN THE NAME OF SH. SUKHDEV SINGH, KARTA OF HUF. THE SALE PROCEEDS ARE TAKEN IN THE CASH FLOW STATEMENT. THE AFFIDAVIT OF THE OWNER OF THE CAR IS ALSO FILED NARRATING THE 5 SAME FACTS. PB-27 IS THE REGISTRATION CERTIFICATE. PB-3 & 4 SHOWS WITHDRAWALS AND DEPOSITS IN BOTH THE BANK ACCOUNTS. HE HAS FILED AFFIDAVIT OF THE ASSESSEE EXPLAINING THE SAME FACTS THAT HUF IS OWNER OF THE AGRICULTURAL LAND AND THE SALE PROCEEDS OF AGRICULT URAL PRODUCE WERE AVAILABLE TO THE ASSESSEE. IN SUPPORT OF HIS CONTE NTION, HE ALSO FILED AN AFFIDAVIT OF SHRI SUKHDEV SINGH, FATHER OF THE ASSE SSEE AND KARTA OF HUF TO SUPPORT THE EXPLANATION OF THE ASSESSEE. THE LD. DR HOWEVER, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE MATERIAL ON RECORD, IT IS CLEAR THAT HUF OWNED AGRICULTURAL LA ND AND AGRICULTURAL PRODUCE WERE SOLD WHICH WERE AVAILABLE TO THE ASSES SEE AND SUPPORTED BY THE AFFIDAVIT OF KARTA OF HUF. FORM J HAVE NOT BE EN DISPUTED BY THE LD. CIT(A). CASH FLOW STATEMENT WOULD THROW LIGHT ON TH E WITHDRAWALS AND DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AND SO ME AMOUNT MAY BE AVAILABLE TO THE ASSESSEE ON WITHDRAWALS FOR RE-DEP OSITS. THE SAME IS THE POSITION WITH REGARD TO THE CAR SOLD BY THE ASSESSE E WHICH WAS HYPOTHECATED WITH THE BANK, THEREFORE, AFFIDAVIT OF THE OWNER SMT. SHAINA GOEL SHOULD HAVE BEEN EXAMINED IN ORDER TO GIVE FAC TUAL FINDING WITH REGARD TO THE PURCHASE OF CAR BY THE ASSESSEE AND F URTHER SALE BY THE ASSESSEE. SINCE THE ASSESSEE REMAINED EX.PARTE BEFO RE THE ASSESSING OFFICER AND LD. CIT(A) ALSO DID NOT CALL FOR REMAND REPORT IN WRITING FROM THE ASSESSING OFFICER ON ADMISSION OF THE ADDITIONAL EV IDENCES, THEREFORE, THESE EVIDENCES REQUIRES INVESTIGATION AND CONSIDERATION OF THE ASSESSING OFFICER. IT MAY ALSO BE NOTED THAT ASSESSEE FILED AFFIDAVIT OF SHRI SUKHDEV SINGH, KARTA OF HUF FOR THE FIRST TIME BEFORE THE TRIBUNAL , THEREFORE, ENTIRE MATTER 6 REQUIRES THOROUGH INVESTIGATION AT THE LEVEL OF THE ASSESSING OFFICER. I ACCORDINGLY SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A D IRECTION TO RE-DECIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 09 FEBRUARY, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR