CIT, PATIALA V. JASWINDER SINGH SODHI PATIALA

ITA/380/2009

AI Insights

The case involves an appeal by the Commissioner of Income-tax, Patiala against Sh. Jaswinder Singh Sodhi concerning discrepancies in financial records submitted to the bank for loan purposes and those maintained in the books of accounts. The Assessing Officer had made additions to the income of the assessee based on these discrepancies. However, both the CIT(A) and the ITAT found the assessee's explanations satisfactory, leading to the deletion of the additions. The High Court dismissed the appeal, agreeing with the lower authorities that the additions were unjustified without corroborative evidence.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 720692 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 13-10-2009
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: RAJESH KATOCH
• Keywords: Appeal; Assessment; Book Debts; CIT(A); Income Tax; ITAT; Rule 46A; Stock
• Section: 260A

Judgement Text

"In the High Court of Punjab and Haryana at Chandigarh I.T.A.No. 380 of 2009 (O&M) Date of Decision:October 13, 2009 The Commissioner of Income-tax, Patiala ---Appellant versus Sh. Jaswinder Singh Sodhi ---Respondent Coram: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HONBLE MR. JUSTICE GURDEV SINGH *** Present: Mr. Rajesh Katoch, Advocate, for the appellant *** ADARSH KUMAR GOEL, J. (Oral) 1. Revenue has preferred this appeal under Section 260A of the Income-tax Act, 1961 (for short 'the Act') against order dated 25.11.2008 passed by the Income-tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh's passed in ITA No. 755/Chd/2008 for the assessment year 2005-06 proposing to raise the following substantial questions of law :- 1. Whether on the facts and in the circumstances of the case the ITAT was legally correct in confirming the order of CIT(A) deleting the addition of Rs. 59,59,400/- made on a/c of difference in book debts and stock as appearing in the books I.T.A.No. 380 of 2009 (O&M) -2- of accounts vis-a-vis the one furnished to the bank. 2. Whether on the facts and in the circumstances of the case, the ITAT was right in upholding the CIT(A)'s order, ignoring the fact that the said order was passed in violation of Rule 46A of the IT Rules. 3. Whether on the facts and in the circumstances of the case, the ITAT was right in law holding that revenue had failed to bring any contrary evidence on record to prove that the book debts and stock as per bank statement were false and untrue whereas it was assessee's burden to prove that these were reliable because it was the result of his own substandard morality.” 2. During the assessment, the Assessing Officer made additions to the income of the assessees relying upon the inventory of stocks filed with the bank by the assessee for raising loan and also the inventory of stocks in trade and book debts furnished to the bank, which were at variance with entries in books of accounts. 3. On appeal, the CIT(A) accepted the explanation of the assessee about the version recorded in books of accounts being correct. This view has been upheld by the Tribunal. It was held:- “Consequently, the authentication filed by the assessee cannot be disbelieved. The Assessing Officer is not justified to make the addition merely on the basis of casual figure submitted to the bank without any corroborative evidence. The cases relied upon, specifically from the Hon'ble Jurisdictional High Court, have already been discussed in the impugned order at page No. I.T.A.No. 380 of 2009 (O&M) -3- 3, wherein it was held that the statement filed with the bank authority cannot be the ground for making addition, therefore, we have not found any infirmity in the impugned order. The same is upheld.” 4. We have heard the learned counsel for the appellant. 5. Only contention pressed is that the assessee furnished written submissions with fresh evidence before the CIT(A) on which remand report was sought from the A.O. A.O. had no opportunity to examine and investigate documents relied upon by the assessee for the first time in the appeal. 6. We are unable to accept this contention. It cannot be disputed when that Appellate Authority, in its discretion, can allow additional evidence and seek comments of the Assessing Officer on an issue. The main question is whether an adverse inference could have been drawn against the assessee, on the statement furnished to the bank when such statement was duly explained on the basis of books of account. CIT(A) as well as the Tribunal have recorded a concurrent finding of fact on the said issue. No substantial question of law arises for consideration. 7 The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE (GURDEV SINGH) JUDGE October 13, 2009 PARAMJIT "