Poonam Chauhan, Panchkula V. ITO, Chandigarh

ITA 901/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3779 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 901/CHD/2014 ASSESSMENT YEAR: 2009-10 SMT. POONAM CHAUHAN, VS THE ITO, HOUSE NO. 799-A, WARD 4(3), SECTOR 2, CHANDIGARH. PANCHKULA. PAN: AEWPC7983E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 27.10.2016 DATE OF PRONOUNCEMENT : 07.11.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS) CHANDIGARH DATED 09.10.20 13 FOR ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF LEARNED C.I.T. (A) CHANDIGARH IS BAD AND AGAINST THE FACTS & LAW. 2 THAT THE LD. C1T(A) HAS ERRED IN CONFIRMING THE A DDITION OF RS.31,00,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT AGREEMENT TO SELL HAS BEEN PRODUCED B EFORE THE ASSESSMENT AND APPELLATE PROCEEDINGS AND WITHOUT RE PORT OF ASSESSING OFFICER IN REMAND PROCEEDINGS. FURTHER TH E LEARNED CIT(A)HAS FAILED TO APPRECIATE THE FACT THAT THE AP PELLANT HAS 2 REFUNDED/ REPAID 50% OF TOTAL ADVANCE AGAINST SALE OF H.NO. 799-A, SECTOR 2, PANCHKULA TO BUYER OF THE PROPERTY . 3. THE LEARNED CIT (A) HAS WRONGLY INVOKED THE PROV ISION OF SECTION 69-A OF INCOME TAX ACT, WHEREAS THE ASSESSI NG OFFICER HAS MADE THE ADDITION U/S 68 OF INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D DEPOSITED CASH OF RS. 31,00,000/- IN HER BANK ACCOU NT WITH AXIS BANK. WHEN THE ASSESSING OFFICER QUESTION ED ABOUT THIS DEPOSIT, THE ASSESSEE HAD SUBMITTED THAT SHE HAD ENTERED INTO AN AGREEMENT WITH ONE SH. RAJESH K UMAR RAGHAV FOR SALE OF HER HOUSE NO. 799-A, SECTOR-2, PANCHKULA AND HAD RECEIVED RS. 31,00,000/- IN CASH AS ADVANCE, WHICH WAS DEPOSITED IN HER BANK ACCOUNT. THE ASSESSEE HAD SUBMITTED A COPY OF 'AGREEMENT TO SELL ' IN THIS REGARD, BUT DID NOT PRODUCE THE ORIGINAL FOR VERIFICATION. THE SALE DEED IN RESPECT OF THIS SALE WAS NOT REGISTERED. DUE TO NON-PAYMENT OF BALANCE SALE CONSIDERATION, THE DEAL DID NOT MATURE AND THE ASSE SSEE HAD CLAIMED THAT SHE HAD REPAID.50% OF THE AMOUNT I .E. RS. 15,50,000/- TO THE BUYER. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE CONCERNED PERSON (BUYER ) AND ASSESSEE HAD SUBMITTED THAT THE TRANSACTION WAS THR OUGH PROPERTY DEALER, WHO INTRODUCED THE BUYER TO THE AS SESSEE AND SHE WAS NOT PERSONALLY KNOWN TO THE BUYER AND I T WAS ALSO DIFFICULT FOR HER TO CONTACT THE BUYER, SINCE SHE DID NOT HAVE HIS CONTACT NUMBER. THE ASSESSING OFFICER MADE 3 THE ADDITION OF ENTIRE DEPOSIT OF RS. 31,00,000/- W ITH THE FOLLOWING OBSERVATIONS: 'IT WAS OBSERVED THAT; NEITHER THE CONCERNED PERSON I.E THE SO CALLED PURCHASER OR THE WITNESS TO THE AGREEMENT TO SELL HAS BEEN PRODUCED NOR ANY FURTHER DOCUMENTARY EVIDENCE HAS BEEN FURNISHED. IT IS CLEAR FROM THE ABOVE THAT THE SUM OF RS.15,50,000/- CLAIMED TO HAVE BEEN REPAID TO THE P ERSON SHOWN TO BE THE PURCHASER OF THE PROPERTY HAS ALSO BEEN S HOWN TO MADE IN CASH AND THE PAYMENTS SPREAD OVER A PERIOD OF SI X MONTH. NO DOCUMENTARY EVIDENCE WITH REGARD TO THESE REPAYMENT S HAS BEEN FURNISHED. IT IS DIFFICULT TO BELIEVE THAT ANY PERSON REPAYS ANY AMOUNT TO A THIRD PERSON, THAT TO AFTER SOME CONFLI CT/ DISPUTE AND THAT NO RECEIPTS OR DOCUMENTARY PROOF IS MAINTAINED SHOWING THE SAID TRANSACTION/REPAYMENT. THE ASSESSEE HAS FAILED TO SUBSTANTIATE HER CLAIM WIT H REGARD TO ENTERING INTO AN AGREEMENT TO SELL AS DISCUSSED ABOVE AND HAS THEREFORE FAILED TO EXPLAIN THE SOURCE OF CASH DEPO SITS AMOUNTING TO RS. 31,00,000/-(RS. 13,00,00 + RS. 18, 00,000) FOUND TO BE MADE IN HER SAVING BANK ACCOUNT. THE SU M OF RS. 31,00,000/- IS THEREFORE TREATED AS UNEXPLAINED CASH CREDITS AND ADDITION IS ACCORDINGLY MADE AS UNDISCLOSED INCOM E U/S 68 OF THE I.T. ACT, 1961.' 3(I) THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD . CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCE EDINGS, THE LD. COUNSEL FOR THE APPELLANT HAS REITERATED TH E SUBMISSION FILED BEFORE THE ASSESSING OFFICER AND H AS FURTHER SUBMITTED THAT 50% OF THE AMOUNT WAS RETURN ED AFTER WITHDRAWING THE SAME FROM HER BANK ACCOUNT. T HE APPELLANT HAS ALSO FILED COPIES OF RECEIPTS OF THE MONEY 4 GIVEN BY THE BUYER AGAINST CANCELLATION OF AGREEMEN T TO SELL. THE ASSESSING OFFICER WAS DIRECTED TO CONDUCT THE ENQUIRY AND HE HAD RECORDED STATEMENT OF THE PROPER TY DEALER, BUT THE PROPERTY DEALER COULD NOT SUBSTANTI ATE THE SAME WITH ANY INDEPENDENT EVIDENCE. IT HAS ALSO BEE N REPORTED BY THE ASSESSING OFFICER THAT THE LETTER T O SH. RAJESH KUMAR WAS RECEIVED BACK UNSERVED DUE TO INCOMPLETE ADDRESS. 4. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION. HI S FINDINGS IN PARA 5 TO 6 ARE REPRODUCED AS UNDER : 5. I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL. THE IMPUGNED DEPOSIT OF RS. 31,00,000/- IS STATED TO HA VE BEEN RECEIVED FROM ONE SH. RAJESH KUMAR RAGHAV WITH WHOM THE APPE LLANT HAD ENTERED INTO AN AGREEMENT TO SELL A HOUSE, BUT IDEN TITY OF SH. RAJESH KUMAR RAGHAV IS NOT PROVED. THE WITNESS IN THE 'AGR EEMENT TO SELL' IS SH. SANDEEP UPPAL, THE PROPERTY DEALER, BUT HE H AS ALSO NOT PROVIDED ANY CLUE ABOUT THE IDENTITY OF SH. RAJESH KUMAR RAGHAV, WHAT TO TALK OF HIS CREDITWORTHINESS OR GENUINENESS OF TRANSACTION. THE ARGUMENT OF THE LD. COUNSEL THAT THE AMOUNT HAS BEEN GIVEN BACK TO SH. RAJESH KUMAR RAGHAV AFTER WITHDRAWING T HE SAME FROM THE BANK ACCOUNT DOES NOT HOLD WATER, SINCE TH E AMOUNT MIGHT HAVE BEEN SPENT FOR ANY OTHER PURPOSE. THE APPELLAN T HAS PRODUCED RECEIPTS FROM SH. RAJESH KUMAR RAGHAV REGARDING AMO UNTS RECEIVED ON CANCELLATION OF THE AGREEMENT, BUT THE SAME CANN OT BE RELIED UPON, SINCE THE IDENTITY OF SH. RAJESH KUMAR RAGHAV IS NOT PROVED. 5.1 IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THA T THE ASSESSING OFFICER HAS RIGHTLY TREATED THE AMOUNT OF RS. 31,00,000/- DEPOS ITED IN THE BANK ACCOUNT AS UNEXPLAINED. THE ASSESSING OFFICER HAS MADE THE ADDITION U/S 68 OF THE ACT, BUT SINCE THE IDENTITY OF SH. RAJESH KUMAR RAG HAV IS NOT PROVED, THE AMOUNT IS TO BE TREATED AS UNEXPLAINED DEPOSIT IN T HE BANK ACCOUNT AND IS 5 TO BE ADDED U/S 69A OF THE ACT AND NOT U/S 68 OF TH E ACT. IN ANY CASE, THE ADDITION MADE IS CONFIRMED. GROUNDS OF APPEAL TAKEN BY THE APPELLANT ARE DISMISSED. 6. IN THE APPEAL, THE APPEAL IS DISMISSED. 5 . AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSING OFFIC ER OBSERVED THAT NEITHER THE CONCERNED PERSON I.E. THE PURCHASER NOR THE WITNESS TO THE AGREEMENT HAVE BEE N PRODUCED NOR ANY DOCUMENTARY EVIDENCE HAVE BEEN FURNISHED. FURTHER, NO DOCUMENTARY EVIDENCE WITH R EGARD TO RE-PAYMENT HAS BEEN FURNISHED. THE ASSESSING OF FICER, THEREFORE, CONFIRMED THE ADDITION. THE ASSESSEE, H OWEVER, EXPLAINED THAT SINCE TRANSACTION WAS CONDUCTED THRO UGH PROPERTY DEALER WHO INTRODUCED THE BUYER, THEREFORE , SHE WAS NOT KNOWING PURCHASER PERSONALLY AND IT IS DIFF ICULT FOR HER TO CONTACT THE BUYER. 6. THE LD. CIT(APPEALS), AT THE APPELLATE STAGE HAS DIRECTED ASSESSING OFFICER TO CONDUCT INQUIRY WHO H AD RECORDED THE STATEMENT OF THE PROPERTY DEALER SHRI SANDEEP UPPAL, COPY OF HIS STATEMENT RECORDED BY TH E ASSESSING OFFICER ON 02.11.2012 IS FILED IN THE PAP ER BOOK AT PAGES 9-13. THESE FACTS, THEREFORE, SHOW THAT THE ASSESSEE SINCE BEGINNING HAS BEEN EXPLAINING THAT S HE IS NOT IN A POSITION TO PRODUCE PURCHASER, HOWEVER, AS SESSEE HAS FILED COPY OF THE AGREEMENT TO SELL DATED 08.05 .2008 BEFORE THE AUTHORITIES BELOW IN WHICH IT IS SPECIFI CALLY 6 STATED THAT THE PROPERTY IN REFERENCE WAS AGREED TO BE SOLD BY ASSESSEE TO SHRI RAJESH KUMAR RAGHAV AND ADVANCE OF RS. 31 LACS HAVE BEEN RECEIVED. IT IS ALSO MENTION ED IN THE AGREEMENT THAT SHRI SANDEEP UPPAL, PROPERTY CONSULTANT, GOT THE BARGAIN COMPLETED AND WILL BE P AID 1% AS THE COMMISSION. SHRI SANDEEP UPPAL, PROPERTY DE ALER HAS SIGNED THE SAID AGREEMENT TO SELL AS WITNESS. THE ASSESSEE FURTHER FILED COPY OF THE RECEIPT OF ADVAN CE MONEY AGAINST AGREEMENT RECEIVED FROM SHRI RAJESH K UMAR RAGHAV AND ALSO FILED COPIES OF THE RECEIPTS IN RES PECT OF AMOUNT RETURNED TO THE PURCHASER ON CANCELLATION OF THE DEAL. THE LD. CIT(APPEALS) WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THAT ASSESSEE COULD NOT PRODUCE THE PURCHASER, THEREFORE, THE ASSESSING OFF ICER WAS DIRECTED TO MAKE FURTHER INQUIRY INTO THE MATTE R AND THE ASSESSING OFFICER AT THE APPELLATE STAGE RECORD ED STATEMENT OF THE PROPERTY DEALER SHRI SANDEEP UPPAL ON 02.11.2012, COPY OF WHICH IS AVAILABLE ON RECORD. SHRI SANDEEP UPPAL, IN HIS STATEMENT RECORDED BY THE ASSESSING OFFICER HAS PROVED HIS IDENTITY AND HAS CONFIRMED THAT HE IS ASSESSED TO TAX AND IS HAVING PAN NUMBER. HE HAS CONFIRMED THAT PROPERTY IN REFERENC E WAS SUBJECT TO AGREEMENT TO SELL BETWEEN THE ASSESSEE A ND PURCHASER SHRI RAJESH KUMAR RAGHAV. 6(I) AS REGARDS EXECUTION OF THE AGREEMENT, HE HAS EXPLAINED THAT AT PRESENT, HE DOES NOT REMEMBER. H E HAS, HOWEVER, CONFIRMED IN HIS STATEMENT THAT THE PURCHA SER 7 HAS GIVEN ADVANCE MONEY IN FRONT OF HIM AT HIS OFFI CE. AS REGARDS THE FINAL DEAL, HE HAS EXPLAINED THAT DEAL COULD NOT BE MATURED THEREFORE, HE DID NOT RECEIVE THE COMMISSION. AS REGARDS DOCUMENT OF CANCELLATION OF DEAL, HE DID NOT EXPLAIN AT THAT TIME. BUT, HE HAS CONFI RMED THAT DEAL WAS CANCELLED AND CERTAIN AMOUNT WAS REFU NDED BY THE ASSESSEE TO PURCHASER AND PART AMOUNT WAS FORFEITED BY THE ASSESSEE. IN HIS FURTHER STATEMEN T, HE HAS STATED THAT AGREEMENT TO SELL WAS EXECUTED IN HIS PRESENCE AND ADVANCE PAYMENT WAS ALSO GIVEN. THE ASSESSEE ALSO FILED ALLOTMENT LETTER IN THE NAME OF THE ASSESSEE TO SHOW THAT SHE WAS OWNER OF THE PROPERTY . THESE FACTS AND MATERIAL ON RECORD CLEARLY SUPPORT THE EXPLANATION OF THE ASSESSEE THAT ASSESSEE GENUINELY ENTERED INTO AGREEMENT TO SELL DATED 08.05.2008 AND RECEIVED ADVANCE OF RS. 31 LACS THROUGH THE AGREEME NT AND AGREEMENT WAS WITNESSED BY SHRI SANDEEP UPPAL, PROPERTY DEALER WHO HAS CONFIRMED THE ENTIRE TRANSA CTION IN HIS STATEMENT RECORDED BY ASSESSING OFFICER AT APPELLATE STAGE. THERE IS NO DISPUTE THAT ASSESSEE IS OWNER OF THE PROPERTY. THE RECEIPTS OF RECEIVING A DVANCE MONEY AND REFUNDING PART OF THE AMOUNT HAVE BEEN PL ACED ON RECORD. THEREFORE, ASSESSEE IS ABLE TO PROVE TH AT ASSESSEE HAS RECEIVED THE AMOUNT OF RS. 31 LACS ON ACCOUNT OF ADVANCE RECEIVED FOR SALE OF PROPERTY. THE OBJECTIONS OF THE ASSESSING OFFICER HAVE, THEREFORE , BEEN MET AND AS SUCH, THERE WAS NO JUSTIFICATION FOR THE 8 AUTHORITIES BELOW TO MAKE AND CONFIRM THE ADDITION OF RS. 31 LACS. I, THEREFORE, SET ASIDE THE ORDERS OF AUT HORITIES BELOW AND DELETE THE ENTIRE ADDITION. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 7 TH NOVEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH