Balwant Singh, Malerkotla V. ITO, Malerkotla

ITA 992/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8335 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 15-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: AMITOZ SINGH
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 992/CHD/2016 ASSESSMENT YEAR: 2009-10 SHRI BALWANT SINGH, VS THE ITO, VPO : DHADHOGAL, WARD IV(3), MALERKOTLA. MALERKOTLA. PAN: DJEPS8253P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMITOZ SINGH RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 01.02.2017 DATE OF PRONOUNCEMENT : 03.02.2017 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2 LUDHIANA DATED 01.06.2016 FOR ASSESSMENT YEAR 2009-10 ON THE FOLLO WING GROUND : THAT THE ID. CIT(A) IS WRONG IN CONFIRMING THE ADD ITION U/S 68 OF THE INCOME TAX ACT AMOUNTING TO RS. 7,40,000/- ON ACCOUNT OF U NEXPLAINED CASH DEPOSITS IN THE SAVING BANK IGNORING THE FACT THAT: 1.I OUT OF THE ABOVE, RS. 2,25,000/- WAS WITHDRAWN FROM THE APPELLANT'S OTHER BANK ACCOUNT. 1.2 OUT OF THE ABOVE, RS. 1,37,000/- WAS THE CASH I N HAND AVAILABLE WITH THE APPELLANT FROM THE SALE PROCEEDS OF HIS AGRICULTURA L LAND. 1.3 OUT OF THE ABOVE, RS. 3,78,000/- WAS ON ACCOUN T OF THE SAVINGS FROM PAST AGRICULTURAL INCOME AVAILABLE WITH THE APPELLANT. 2 1.4 THAT THERE ARE NO ADVERSE INFERENCE MATERIAL FACTS OF UNDISCLOSED/ TAXABLE INCOME RECORDED DURING THE ASSESSMENT. 2. BRIEF FACTS IN THIS CASE ARE THAT ASSESSEE EARNE D INCOME FORM AGRICULTURE INCOME DURING THE PERIOD UN DER CONSIDERATION. NOTICE U/S 148 OF THE IT ACT WAS ISS UED ON 21.03.2012, AFTER RECORDING REASONS FOR INITIATING PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961. IN RESPONSE, THE ASSESSEE FILED ITS RETURN OF INCOME F OR THE A.Y. 2009-10 ON 29.05.2012 DECLARING INCOME OF RS. 30,000/-. THE ASSESSEE WAS ASKED VIDE QUESTIONNAIRE TO EXPLAIN SOURCE OF CASH DEPOSITS IN A/C NO. 10504870 5 WITH PNB, DHURI. THE ASSESSEE WAS ALSO ASKED TO EXP LAIN WHY ADDITION OF RS. 9,50,000/- SHOULD NOT BE MADE A S THE APPELLANT HAD FAILED TO EXPLAIN THE SOURCE OF C ASH AVAILABLE WITH HIM WHICH WAS DEPOSITED IN PUNJAB NATIONAL BANK, DHURI. IN RESPONSE, THE ASSESSEE CONTENDED THAT HE DEPOSITED RS, 4,78,000/- SAVING F ROM HIS PAST AGRICULTURE INCOME FROM THE PERIOD 2004-05 TO 2007-08, RS. 1,37,000/-FROM SALE PROCEEDS OF LAND, RS. 2,25,000/- OUT OF OTHER BANK ACCOUNT, RS. 1,10,000/ - OUT OF AGRICULTURE INCOME OF NEW PURCHASE LAND. BUT THE ASSESSEE HAD NOT BEEN ABLE TO PROVIDE ANY EVIDENCE OF AMOUNT SAVED BY THE APPELLANT. THE AO OBSERVED THAT IT WAS UNBELIEVABLE THAT THE ASSESSEE WOULD KEEP SUCH HUGE AMOUNTS WITH HIM AT HIS RESIDENCE WHEN HE HAD TWO BANK ACCOUNTS. FURTHER, THE AO ESTIMATED THAT THE ASSESSEE WOULD BE HAVING PAST SAVING OF RS. 1,00,00 0/- 3 FROM AGRICULTURE INCOME AND FROM SALE OF LAND. THE ASSESSEE HAD PROVIDED PROOF OF AGRICULTURE INCOME O F RS. 1,10,000/- DURING THE F.Y. 2008-09. HENCE, TOTAL BE NEFIT OF RS. 2,10,000/- IS GIVEN TO THE ASSESSEE AND ADDI TION OF RS, 7,40,000/- (RS. 9,50,000 - RS. 2,10,000) + RS.1,50,000/- AS AGRICULTURE INCOME WAS MADE U/S 68 OF THE INCOME TAX ACT, 1961. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION IS INCORPORATED IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT HE IS AGRICULTURIST AND FILED RETURN OF INCOME SHOWING BANK INTEREST AND AGRICULTURE INCOME FROM OWN AGRICULTURAL LAND WHICH IS NOT TAXABLE. T HE ASSESSEE EARNED AGRICULTURE INCOME AND HAS NO BUSIN ESS OR RENTAL OR ANY OTHER INCOME EXCEPT THE INTEREST F ROM BANK AND AGRICULTURE SAVINGS AND SALE PROCEEDS OF AGRICULTURAL LAND. THE ASSESSING OFFICER HAS ACCE PTED IN THE ORDER THE NATURE OF BUSINESS OF THE ASSESSEE IS AGRICULTURE INCOME THEREFORE, NO ADDITION COULD BE MADE. THE ASSESSEE EXPLAINED BEFORE ASSESSING OFFICER THA T RS. 1,37,000/- WAS OUT OF SALE PROCEEDS OF AGRICULTURAL LAND, RS. 2,25,000/- WITHDRAWAL FROM OTHER BANK ACCOUNT A ND RS. 4,78,000/- AS SAVINGS FROM PAST AGRICULTURE INC OME. THE ASSESSEE DID NOT MAINTAIN REGULAR BANK ACCOUNT AND BANK ACCOUNT WAS OPENED FOR MAKING PAYMENT THROUGH DEMAND DRAFT/CHEQUES. THE ASSESSING OFFICER DID NO T BELIEVE EXPLANATION OF THE ASSESSEE BECAUSE THERE W AS A 4 GAP IN THE AVAILABILITY OF THE FUNDS WITH THE ASSES SEE AND DEPOSIT IN THE BANK ACCOUNT WHICH IS NOT A CONDITIO N FOR MAKING THE ADDITION. 4. THE LD. CIT(APPEALS) DID NOT ACCEPT CONTENTION O F THE ASSESSEE BECAUSE NO SOURCE OF CASH DEPOSIT IN T HE BANK ACCOUNT HAS BEEN EXPLAINED. EXPLANATION WITH REGARD TO CASH WITHDRAWAL HAS BEEN CONSIDERED BY ASSESSING OFFICER JUDICIOUSLY AND HAS RIGHTLY BEEN REJECTED, AS IT WAS ILLOGICAL TO CO-RELATE THE WITH DRAWALS WITH CASH DEPOSITS AFTER TIME GAP OF MORE THAN ONE YEAR. THE LD. CIT(APPEALS), ACCORDINGLY, DISMISSED APPEAL OF THE ASSESSEE. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS REFERRED TO PB-34 WHICH IS SALE DEED DATED 01.09.20 06 THROUGH WHICH ASSESSEE RECEIVED SALE CONSIDERATION OF RS. 36,60,000/- ON ACCOUNT OF SALE OF AGRICULTURAL LAND AND THE AMOUNT OF SALE CONSIDERATION WAS RECEIVED THROUGH CASH. PB-14 IS COPY OF THE BANK ACCOUNT OF THE ASSESSEE WHICH SHOWS THAT ASSESSEE HAS WITHDRAWN RS . 2,25,000/- ON 08.02.2007. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO PB-49 TO 66 WHICH ARE COP IES OF J-FORM FOR THE PERIOD 2007-08 TO 2008-09 IN THE NAM E OF THE ASSESSEE TO SHOW SUFFICIENT AGRICULTURE INCOME EARN ED BY ASSESSEE WHICH IS SUPPORTED BY COPIES OF THE LEASE DEEDS. THE LD. COUNSEL FOR THE ASSESSEE THEREFORE, SUBMITT ED 5 THAT SINCE ASSESSING OFFICER ACCEPTED CURRENT AGRIC ULTURE INCOME OF THE ASSESSEE AND ASSESSEE HAS NO OTHER SO URCE AND SUFFICIENT EVIDENCE HAVE BEEN PRODUCED ON RECOR D TO EXPLAIN SOURCE OF THE CASH DEPOSIT IN THE BANK ACCO UNT OF THE ASSESSEE ON 09.05.2008 THEREFORE, AVAILABILITY OF THE CASH WAS WITH THE ASSESSEE AND AS SUCH, NO ADDITION SHOULD BE MADE AGAINST THE ASSESSEE. HE HAS ALSO R ELIED UPON CERTAIN DECISIONS OF THE TRIBUNAL ON THE PROPO SITION THAT EVEN IF THERE IS A DELAY BETWEEN WITHDRAWALS A ND DEPOSIT, ADDITION SHOULD NOT BE MADE. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHIVCHARAN DASS VS CIT 126 ITR 263 CONSIDERED THE ISSUE IN WHICH PARTIAL PARTITION TOO K PLACE ON 31.03.1951 OF A HUF, OF WHICH THE ASSESSEE WAS KARTA. HUF DECLARED A SUM OF RS. 20,000/- UNDER VOLUNTARY DISCLOSURE SCHEME IN OCTOBER,1951 WHICH W AS ACCEPTED BY THE DEPARTMENT. THE MONEY WHICH WAS SUBJECT MATTER OF VOLUNTARY DISCLOSURE WAS KEPT WIT H THE WIFE OF THE ASSESSEE FROM 1951 UPTO HER DEATH IN MAY,1956. AFTER HER DEATH, THE AMOUNT WAS DEPOSITE D ON 29.10.1956 IN A BANK IN THE NAME OF TWO UNMARRIED DAUGHTERS OF THE ASSESSEE IN EQUAL SHARES. THE ASS ESSEE EXPLAINED THAT TWO DEPOSITS WERE OUT OF SUM OF RS. 20,000/- DECLARED UNDER VOLUNTARY DISCLOSURE SCHEME IN OCTOBER,1951. THE ASSESSING OFFICER DID NOT ACCEPT 6 EXPLANATION OF THE ASSESSEE AND TREATED THE SAME I NCOME FROM UNDISCLOSED SOURCE. THE AAC HELD THAT SAME C OULD BE RELATED TO THE AMOUNT VOLUNTARILY DISCLOSED EARL IER, HOWEVER, TRIBUNAL REVERSED ORDERS OF AAC AND RESTOR ED THAT OF THE ITO. ON REFERENCE, HON'BLE HIGH COURT H ELD AS UNDER : HELD, THAT SINCE BOTH THE DAUGHTERS HAD ATTAINED M AJORITY AT THE TIME WHEN THE MONEY WAS DEPOSITED IN THEIR NAMES, THE AMOUNT OF RS. 20,000 WAS NOT FOUND MENTIONED IN THE BOOKS OF THE ASSESSES NOR THE SAME WAS FOUND TO HAVE BEEN DEPOSITED IN THE AC COUNTS OF THE ASSESSEE OR THAT OF THE HUF AND THERE A NOTHING ON THE RECORD TO SHOW THAT THE AMOUNT WAS UTILISED BY THE ASSESSEE O R THE HUF IN ANY OTHER MANNER THAN THE ONE WHICH WAS REPRESENTED BY THE ASSESSEE, THE ONUS LAY ON THE DEPARTMENT TO SHOW THAT THE EXP LANATION OFFERED BY THE ASSESSEE SHOULD NOT BE ACCEPTED. FURTHER, IF THE ASSESSEE'S EXPLANATION THAT THE AMOUNT REPRESENTED THE SAME AM OUNT AS DISCLOSED UNDER THE VOLUNTARY DISCLOSURE SCHEME WAS NOT ACCEP TED, THE PRESUMPTION THAT THE AMOUNT WAS FROM UNDISCLOSED S OURCES COULD BE RAISED ONLY AGAINST THE MAJOR DAUGHTERS OF THE A SSESSEE AND NOT AGAINST THE ASSESSEE HIMSELF. THEREFORE, IT COULD NOT BE SAID THAT THE AMOUNT WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 7. IF THE RATIO OF THE AFORESAID JUDGEMENT IS APPLI ED TO THE FACTS OF THE CASE, IT IS CLEAR THAT THE REVENUE DEPARTMENT CONSIDERED THE ISSUE OF UNEXPLAINED CASH DEPOSIT OF RS. 9,50,000/- IN THE BANK ACCOUNT OF TH E ASSESSEE ON 09.05.2008, THE ASSESSEE WAS HAVING SUFFICIENT AVAILABILITY OF THE CASH WITH HIM TO EXP LAIN SUCH CASH DEPOSIT IN THE BANK ACCOUNT. THE ASSESSE E FILED COPY OF THE SALE DEED TO SHOW SUFFICIENT CASH ON ACCOUNT OF SALE OF444444444444444444 AGRICULTURAL L AND 7 AVAILABLE TO THE ASSESSEE. THERE IS A BANK WITHDRA WAL OF RS. 2,25,000/- ON 08.02.2007 AND THAT IN EARLIER YE AR, ASSESSEE WAS HAVING SUFFICIENT AGRICULTURE INCOME W HICH IS SUPPORTED BY FORM-J AND COPIES OF THE LEASE DEED . ALL THESE EVIDENCES ARE AVAILABLE ON RECORD. THE AUTHOR ITIES BELOW REJECTED THE CLAIM OF THE ASSESSEE BECAUSE OF THE TIME GAP BETWEEN AVAILABILITY OF THE CASH WITH THE ASSESSEE AND DEPOSIT IN THE BANK ACCOUNT. HOWEVER, THERE WAS NOTHING ON RECORD TO SHOW THAT AMOUNT SO AVAILABLE WITH THE ASSESSEE WAS UTILIZED BY THE ASS ESSEE IN ANY OTHER MANNER THAN THE ONE WHICH WAS REPRESEN TED BY THE ASSESSEE. THE ONUS LAY UPON THE REVENUE DEPARTMENT TO SHOW THAT EXPLANATION OFFERED BY THE ASSESSEE SHOULD NOT BE ACCEPTED. THE A.O. HAS NOT BROUGHT ANY EVIDENCE ON RECORD THAT AMOUNT AVAILABL E TO ASSESSEE WAS SPENT ANYWHERE ELSE. 7(I) IN THE PRESENT CASE, IT IS ADMITTED FACT ASS ESSEE IS ONLY AGRICULTURIST AND HAS INCOME FROM AGRICULTURAL ACTIVITIES AND INTEREST. THERE IS NO OTHER SOURCE OF INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS ACCEPTED CURRENT YEARS AGRICULTURE INCOME AS WELL AS GIVEN PART BENEFIT OUT OF AGRICULTURE INCOME AND FR OM SALE OF LAND. THEREFORE, THE CONTENTION OF THE ASS ESSEE CANNOT BE REJECTED IN VIEW OF THE EVIDENCES AND MAT ERIAL PLACED ON RECORD. MERELY BECAUSE THERE WAS A GAP BETWEEN AVAILABILITY OF THE CASH WITH THE ASSESSEE AND DEPOSIT IN THE BANK ACCOUNT IS NO GROUND TO DISBELI EVE 8 THE EXPLANATION OF THE ASSESSEE. THE AUTHORITIES B ELOW WERE, THEREFORE, UNJUSTIFIED IN SUSTAINING THE ADDI TION OF RS. 7,40,000/-. I, ACCORDINGLY, SET ASIDE THE ORDE RS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 7,40,000/-. 8. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 3 RD FEBRUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH