ITO, Sirsa V. Smt. Shakun Mehta, Sirsa

ITA 901/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81006 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 31-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 901/CHD/2012 ASSESSMENT YEAR: 2009-10 THE ITO, VS. SMT. SHAKUN MEHTA, WARD-1, SIRSA SIRSA PAN NO. AWXPM0363M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 14.10.2014 DATE OF PRONOUNCEMENT : 07.11.2014 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DT 18.06.2012 OF CIT(A), ROHTAK. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITIO N OF RS. 43,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK. 2. LD. CIT(A) FAILED TO APPRECIATE THAT THE AO HAS RIGHTLY CONSIDERED SO CALLED AGREEMENT TO BE OF NOT MUCH EVIDENCIARY VALUE AFTER PROPER APPLICATION OF MIND. 3. LD. CIT(A) FAILED TO APPRECIATE THAT THE SO CALL ED AGREEMENT WAS NOT REGISTERED WITH ANY AUTHORITY. 2 4. LD. CIT FAILED TO APPRECIATE THAT THE ASSESSEE I S NOT THE OWNER OF THE LAND AND NO POA HAS BEEN FILED WIT H THE AGREEMENT NOR PRODUCED LATER ON DURING THE COURSE OF PROCEEDINGS. 5. LD. CIT (A) FAILED TO APPRECIATE THAT ASSESSEE F AILED TO PRODUCE RECEIPTS IN TOKEN OF PAYMENT THE AMOUNT OF ADVANCE OF RS. 43.00 LACS. 6. LD. CIT(A) FAILED TO APPRECIATE THAT THE SO CALL ED PURCHASERS SHOWN IN THE SAID AGREEMENT WERE NOT PRODUCED BY THE ASSESSEE NOR THEY (SO CALLED PURCHASERS) ATTENDED THE OFFICE IN RESPONSE TO THE SUMMONS ISSUED TO THEM. 7. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE SO CALLED AGREEMENT DOES NOT APPEAR TO BE WRITTEN IN NORMAL COURSE. THERE IS BINDING CLAUSE IN THE SAID AGREEME NT AS IT NORMALLY DONE. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSE SSEE HAD DEPOSITED CASH IN THE BANK AND OBTAINED FDRS AGAINS T SUCH CASH DEPOSITS AS PER FOLLOWING DETAILS:- 4. DATE AMOUNT NAME OF BANK 11.07.2008 15,00,000 INDIAN BANK, SIRSA 09.08.2008 18,00,000 INDIAN BANK, SIRSA 07.11.2008 14,50,000 INDIAN BANK, SIRSA 17.11.2008 1,50,000 STATE BANK OF INDIA, SIRSA 17.11.2008 2,00,000 STATE BANK OF INDIA, SIRSA 4. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF DEPOSITS / FDRS. IN RESPONSE, IT WAS CONTENDED THAT ASSESSEE HAD RAISED A LOAN FROM HER 3 HUSBAND AMOUNTING TO RS. 7,85,973/- DURING 2007-08 OUT OF WHICH A SUM OF RS. 7 LAKHS WAS PAID AS ADVANCE FOR PURCHASE OF PRO PERTY WHICH DID NOT MATERIALIZE AND THE ADVANCE WAS RECEIVED BACK ON 15 .5.2008. IT WAS FURTHER EXPLAINED THAT ASSESSEE HAD RECEIVED ADVANCE AGAINS T THE SALE OF AGRICULTURAL LAND TO FOUR DIFFERENT PERSONS. COPY OF THE AGREEMENT FOR SALE OF AGRICULTURAL LAND EXECUTED ON 2.7.2008 WAS FILED . THE ADVANCE WAS STATED TO HAVE BEEN RECEIVED FOR THE FOLLOWING PERSONS:- S.NO. NAME AND ADDRESS OF PERSON 1 SH. PREM NATH S/O SH. DHALU RAM VILLAGE SURERA KH ERA TEHSIL DABWALI 2 SH. RAVI PARKASH S/O SH. BHIM SINGH, VPO SURERA K HERA TEHSIL DABWALI 3 SH. SARJEET SINGH S/O SH. BALRAM VILLAGE RAJRANA TEHSIL SARDULGARH DISTT. MANSA 4 SH. PURAN CHAND S/O SH. DHALU VILLAGE SURERA KHER A TEHSIL DABWALI 5. THE ASSESSEE WAS ASKED TO PRODUCE THESE PERSONS. AFTER TAKING SOME ADJOURNMENTS ULTIMATELY AFFIDAVITS OF THESE PERSONS WERE FILED AND THE AFFIDAVITS STATED AS UNDER:- 1. THAT I AM PERMANENT RESIDENT OF VILLAGE SUKHERA KHERA (IN THE CASE OF SH. SURJIT SINGH, VILLAGE KARANDI) AND PURELY AGRICULTURIST. 2. THAT MY SOURCE OF INCOME IS FROM AGRICULTURE AND I AM NOT ASSESSED TO INCOME TAX. 3. THAT AN AGREEMENT TO PURCHASE AGRICULTURE LAND S ITUATED AT VILLAGE BUDHABHANA, DISTT. SIRSA WAS MADE BY ME WITH 3 OTHER C-SHARER ON DATED 02.07.2008 WITH SMT. SHAK UN MEHTA R/O SIRSA. 4. THAT THE SAID AGREEMENT WAS MADE JOINTLY WITH SH RI. SARJEET SINGH, SHRI RAVI PRAKASH, SHRI PREM NATH AN D SHRI PURAN CHAND. 4 6. ALONG WITH AFFIDAVITS JAMMABANDI OF AGRICULTURA L LAND HOLDING OF THESE PERSONS SHOWING LAND HOLDINGS OF 21 ACRES, 23 ACRES, 24 ACRES AND 20 ACRES IN THE NAME OF S/SHRI PREM NATH, RAVI PARKASH SURJEET SINGH AND PURAN CHAND RESPECTIVELY WERE ALSO FILED. THE ASSE SSEE WAS AGAIN REQUESTED TO PRODUCE THESE PERSONS TO VERIFY THE VA RSITY OF THE AFFIDAVITS. VARIOUS ADJOURNMENTS WERE TAKEN BUT THESE PERSONS W ERE NOT PRODUCED. ULTIMATELY SUMMONS U/S 131 WERE ISSUED ON THE REQUE ST OF LD. COUNSEL FOR THE ASSESSEE ON THE ADDRESSES GIVEN BY THE ASSESSEE . ON THE GIVEN DATE THESE PERSONS DID NOT APPEAR. THE ASSESSING OFFICER NOTICED THAT THESE PERSONS WERE LIVING IN VILLAGE SUKHERAWALA, THEREFO RE, FRESH SUMMONS WERE ISSUED AT THE ADDRESS OF VILLAGE SUKHERAWALA. IN R ESPONSE TO THESE SUMMONS ALSO NONE APPEARED BUT A REPLY WAS RECEIVED BY THE ASSESSING OFFICER ON 26.12.2011, WHICH READS AS UNDER:- AS REGARDS AGREEMENT MADE WITH SMT. SHAKUN MEHTA, IT IS SUBMITTED THAT I HAVE ALREADY FURNISHE D AFFIDAVIT IN THIS REGARD, WHEREIN THE FACTS HAVE ALREADY BEEN GIVEN. HOWEVER, AS REGARDS SOURCE OF ADVANCE MADE, IT IS SUBMITTED THAT I AM PURELY AGRICULTURIST AND HAVING MORE THAN (.). THE AMOUNT GIVEN FOR PURCHASE OF LAND WAS OUT OF MY AGRICULTURE INCOME. MOREOVER, THE DEAL COULD NOT BE MATERIALIZED AND WE ARE NOT HAVING ANY DEALINGS WITH HER. SO, IN THE CIRCUMSTANCES , IT IS REQUESTED THAT MY PERSONAL APPEARANCE MAY KINDLY BE DISPENSED WITH AS I HAVE ALREADY MADE MY STATEMENT THROUGH AFFIDAVIT. 7. ON THE BASIS OF ABOVE THE ASSESSING OFFICER OBSE RVED AS UNDER:- I) THE AGREEMENT EXECUTED WAS NOT REGISTERED. II) AFFIDAVITS BY ITSELF DOES NOT STATE THE AMOUNT PAID . 5 III) THE AFFIDAVIT DID NOT GIVE SOURCE OF THE AMOUNT IV) SHRI SHAKUN MEHTA WAS NOT OWNER OF THE LAND STILL S OME PERSONS HAVE AGREED TO PURCHASE THE SAID LAND. V) IT WAS STATED THAT SMT. SHAKUN MEHA I.E. ASSESSEE W AS HOLDING POWER OF ATTORNEY FOR THE LAND WHICH WAS OW NED BY HER HUSBAND SHRI ISHWAR DASS BUT NO SUCH POWER O F ATTORNEY WAS FILED. IT IS VERY SURPRISING THAT THE SE PERSONS HAVE PAID HUGE AMOUNT OF RS. 43 LAKHS WITHO UT VERIFICATION OF THE OWNERSHIP OF THE ASSESSEE. VI) NO RECEIPTS WERE ISSUED BY THE ASSESSEE FOR SUM OF TEN AND EIGHTEEN LAKHS PAID LATELY ON 8.8.2008 AND 5.11 .2008 I.E. AFTER THE EXECUTION OF AGREEMENT. VII) IT WAS OBSERVED THAT NORMALLY THERE IS A CLAUSE IN SALE AGREEMENT THAT IN CASE DEAL DOES NOT MATURE THEN TH E SELLER WOULD PAY THE DOUBLE AMOUNT BUT IN THIS CASE NO SUCH CLAUSE WAS THERE AND AMOUNT WAS RETURNED AFTER 7 -8 MONTHS WITHOUT ANY COMPENSATION WHEREAS THE ASSESSE E HAS EARNED INTEREST OF RS. 21,4,819/- VIII) RECEIPT OF HUGE CASH OF RS. 43 LAKHS DOES NOT SEEMS TO BE BELIEVABLE. 8. IN VIEW OF THE ABOVE OBSERVATION THE SUM OF RS . 43 LAKHS WAS ADDED TO THE INCOME OF THE ASSESSEE. 9. ON APPEAL, IT SEEMS THAT VARIOUS SUBMISSIONS W ERE MADE WHICH WERE SENT FOR COMMENTS OF THE ASSESSING OFFICER. H OWEVER, THE LD. CIT(A) HAS NOT DISCUSSED THE SUBMISSIONS OF THE ASS ESSEE OR COMMENTS OF THE ASSESSING OFFICER IN THE BODY OF THE ORDER A ND IT HAS BEEN SIMPLY MENTIONED THAT SUCH SUBMISSIONS AND COMMENTS WERE C ONSIDERED. LD. CIT(A) OBSERVED THAT IT WAS NOT NECESSARY THAT SALE AGREEMENT SHOULD BE REGISTERED. THE LAND BELONGED TO SHRI ISHWAR DASS M EHTA, HUSBAND OF 6 THE ASSESSEE, WHO WAS A RETIRED GOVERNMENT EMPLOYEE AND DUE TO HIS ILL HEALTH HAD GIVEN POWER OF ATTORNEY IN FAVOUR OF HIS WIFE AND THE PURCHASER KNEW THIS FACT. THE PURCHASERS HAVE CONFI RMED THE FACT OF ENTERING INTO AGREEMENT AND THE ASSESSEE HAD DISCHA RGED THE BURDEN OF PROVING THE DEAL. IN VIEW OF THESE OBSERVATIONS TH E LD. CIT(A) DELETED THE ADDITION. 10 BEFORE US LD. DR CARRIED OUT THROUGH THE CONTEN TS OF THE ASSESSMENT ORDER AND SUBMITTED THAT AFFIDAVITS FILE D ARE BASICALLY SELF SERVING DOCUMENTS WHICH COULD NOT HAVE BEEN ENTERTA INED BY LD. CIT(A). IN THIS REGARD HE RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 I TR 540 (SC) . HE FURTHER SUBMISSION THAT DESPITE OF THE REPEATED REQ UESTS THE PERSONS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THERE FORE, CIT(A) SHOULD HAVE INSISTED ON PRODUCTION OF THESE PERSONS. HE ST RONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER. 11. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE REFERRED TO COPY OF THE AGREEMENT AND VARIOUS AFFIDAVITS. HE CO NTENDED THAT ASSESSEES HUSBAND WAS NOT WELL I.E WHY POWER OF AT TORNEY WAS GIVEN BY HIM TO THE ASSESSEE, WHO IN TURN ENTERED INTO AN AGREEMENT FOR THE SALE OF SAID AGRICULTURAL LAND. THE PERSONS WHO WE RE TO BUY THE AGRICULTURAL LAND HAVE CLEARLY STATED ON OATH THAT THEY HAVE ENTERED INTO THIS AGREEMENT AND PAID THE AMOUNT IN CASH. IN FAC T IN RESPECT TO THE SUMMONS ALSO A REPLY WAS GIVEN ON THE SIMILAR LINES . THEREFORE, THERE IS NOT MATERIAL ON RECORD WITH THE ASSESSING OFFICER T O DISBELIEVE THESE AFFIDAVITS. HE ALSO REFERRED TO THE VARIOUS ENTRIES IN THE CASH BOOK AND 7 POINTED OUT THAT FDRS WERE MADE AFTER RECEIVING THE AMOUNTS ON VARIOUS DATES WHICH TALLY WITH THE DATES MENTIONED IN THE AGREEMENT TO SELL. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND FIND NO FORCE IN THE SUBMISSIONS OF LD. COUNSEL FOR THE ASS ESSEE. FIRST OF ALL IT IS VERY DIFFICULT TO BELIEVE THAT THE ASSESSEE WHO IS NOT OWNER OF THE LAND HAD ENTERED INTO AGREEMENT WHEN THE LAND BELONGED T O HER HUSBAND. THOUGH IT WAS STATED BEFORE ASSESSING OFFICER AND T HE LD. CIT(A) THAT POWER OF ATTORNEY WAS EXECUTED BY HER HUSBAND IN F AVOUR OF THE ASSESSEE BUT COPY OF THE POWER OF ATTORNEY HAS NOT BEEN PRODUCED BEFORE THE ASSESSING OFFICER AND, THEREFORE, THE L D. CIT(A) SHOULD HAVE BEEN LITTLE CAREFUL IN ASKING FOR THE POWER OF ATTORNEY BUT HE SIMPLY BELIEVED THIS THEORY WITHOUT EXAMINING THE P OWER OF ATTORNEY. BEFORE US ALSO A COPY OF POWER OF ATTORNEY IS NOT F ILED. IT IS VERY DIFFICULT TO ASCERTAIN IN WHAT CIRCUMSTANCES THE PO WER OF ATTORNEY WAS GIVEN BY HER HUSBAND. THIS FACT ITSELF IS SUFFICIEN T TO DISBELIEVE THE STORY OF AGREEMENT TO SELL ENTERED BY THE ASSESSEE. 13. NORMALLY, NO PURCHASER WOULD AGREE TO PURCHASE THE LAND FROM ATTORNEY HOLDER UNTIL AND UNLESS SUCH ATTORNEY IS D ULY REGISTERED OR THE PERSONS OWNING THE LAND BECOMES A CONFIRMING PARTY IN THE AGREEMENT TO SELL. AS OBSERVED ABOVE, POWER OF ATTORNEY HAS NO BEEN FILED BEFORE US AND THE PERUSAL OF THE AGREEMENT TO SELL CLEARLY SH OWS THAT SHRI I.D. MEHTA WHO IS HUSBAND OF THE ASSESSEE IS NOT A CONFIRMING PARTY IN THE AGREEMENT TO SELL. THE COPIES OF THE AFFIDAVITS FILES BY FOUR DIFFERENT PURCHASERS WHO WERE STATED TO BE NOT RELATED PARTIES READ AS UNDE R:- 8 9 10 11 12 14. THE PERUSAL OF THE ABOVE AFFIDAVITS WOULD SHOW THAT EXACTLY THE SAME LANGUAGE HAS BEEN USED IN ALL THE AFFIDAVITS. ALL T HE FOUR PERSONS HAVE NOT STATED HOW MUCH MONEY EACH ONE OF THEM HAS PAID. N O SPECIFIC SOURCE OF THE PAYMENT HAS BEEN EXPLAINED AND IT HAS BEEN SIMP LY STATED THAT THEY ARE AGRICULTURISTS. WHEN FOUR PERSONS HAVE PAID A SUM O F RS. 43 LAKHS THE ASSESSING OFFICER COULD HAVE VERIFIED THE SOURCES ONLY IF SUCH PERSONS WERE PRODUCED BEFORE HIM. WE FAIL TO UNDERSTAND HO W LD. CIT(A) BELIEVED THESE AFFIDAVITS PARTICULARS WHEN THE ASSESSING OFF ICER HAD INSISTED ON PRODUCING THESE PERSONS. THE AFFIDAVITS ARE CLEARL Y IN THE NATURE OF SELF SERVING DOCUMENTS AND CANNOT BE BELIEVED. FURTHER THERE IS NOT EVIDENCE WHY THE DEAL DID NOT MATURE. HOW THE AMOUNTS WERE RETURNED WHETHER ANY RECEIPTS WERE TAK EN OR NOT IS NOT CLEAR. ALL THESE CIRCUMSTANCES MAKE THE WHOLE STORY NOT PL AUSIBLE. IN OUR OPINION, IT SEEMS TO BE ONLY A STORY TO EXPLAIN THE DEPOSITS OF CASH AND DOES NOT HAVE ANY SUBSTANCE. THEREFORE, WE SET ASIDE THE ORD ER OF LD. CIT(A) AND RESTORE THAT TO ASSESSING OFFICER. 15. IN THE RESULT, REVENUES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.11.2014 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 7 TH NOVEMBER, 2014 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR 13