SHRI KULDEEP KUMAR ,BIKANER vs. ITO, WARD-1(4), BIKANER

ORDER

PER DR. DIPAK P. RIPOTE, AM:

raised by the assessee are as under:-

1. The order passed by the Income Tax Officer and sustained by the Commissioner of Income Tax (Appeals) is illegal against the law and without any application of mind, therefore, is liable for quash.

2. That the Commissioner of Income Tax (Appeals) fails to cross- examine the contents of the affidavit submitted before him during the course of appeal in view of the judgment of Mehta Parakh and Company and as such the addition sustained by the Commissioner of Income Tax appeals is illegal.

3. That the Commissioner of Income Tax appeals fails to appreciate the evidence, additional evidence, and submission submitted before him, therefore, the Addition may kindly be declared illegal looking to the unreasoned and non-speaking order. 4. That cost may kindly be awarded because the Commissioner of Income Tax appeals fails to follow the law of the land and also has not decided all grounds taken in the appeal, therefore, send me kindly be declared as illegal and the addition may kindly be deleted. 5. That the order may kindly be declared as against judicial decorum and judicial discipline because the binding nature of judgment was not appreciated and also not providing a place in the order of CIT (A). 6. That the CIT (A) should have considered the double entry of 5 Lacs and also should have considered the bank certificate of Rs. 5 Lacs and should have accepted the amount as explained. 7. That the deposit in the bank may kindly be declared as explained looking at the fact that the same was accepted as explained by the AO. 8. That reopening of the assessment u/s 147/ 148 may kindly be declared illegal and against the law In view of the judgments submitted in a written submission before the CIT (A). 9. That the charging of interest is illegal and against the law.

Brief facts of the case 2. In this case, the Assessing Officer i.e. ITO-1(4), Bikaner had received information regarding cash deposited by the assessee in his bank account. The Assessing Officer issued notice under section 148 after recording reasons and after obtaining approval of the Pr. Commissioner of Income Tax, Bikaner. It is mentioned in the assessment order that assessee had deposited Rs. 10,00,500/- cash in his account maintained with State Bank of India. During the assessment proceedings, the assessee submitted before the Assessing Officer that his father had deposited the said amounts and he is not aware about anything. The assessee also submitted before the Assessing Officer that he is an agriculturist and his family is also agriculturist and they have limited income. He also submitted that his father had sold some land and received certain amount during the year. The Assessing Officer made addition of Rs. 5,00,000/- as undisclosed income. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before ld. Commissioner of Income Tax (Appeals), Bikaner. The assessee also filed an application for additional evidence before the ld. Commissioner of Income Tax (Appeals), Bikaner. The assessee filed copies of two affidavits and written submissions before the ld. Commissioner of Income Tax (Appeals), Bikaner. However, ld. Commissioner of Income Tax (Appeals) (National Faceless Appeal Centre) confirmed the addition. The relevant part of the order of ld. Commissioner of Income Tax (Appeals) is reproduced as under:- “Now the question arises in relation to the deposit of rest of amount of Rs. 5,00,000/-. The appellant in his written submission submitted in this office has stated that out of Rs. 5,00,000/-, Rs. 3,00,000/- was out of sale consideration and rest amount of Rs. 2,00,000/- was received by him as gift from his grandmother. Secondly, the appellant has also stated that he has received Rs. 5,00,000/- as gift from his grandmother and has also produced the affidavit regarding the gift made to the appellant before this office. On perusal of the affidavit, I have found that the affidavit was made and signed in the year 2018 in which it is stated that the grandmother of the appellant sold an immovable property on 01.01.2009. It is worthwhile to mention here that the appellant could have provided the copy of the sale deed with regard to the land sold by his grandmother in support of his affidavit. The said affidavit was not submitted before the AO at the time of assessment proceedings but the same has been produced before the undersigned is just an afterthought and not tenable. Therefore, in view of the above facts and circumstances of the case, the appellant has not been able to substantiate with documentary evidences to prove the source of deposit of Rs. 5,00,000/- before the AO at the time of assessment proceedings as well before the undersigned. Thus, the action of the AO is found justified and the order is confirmed.”

Submission of ld. AR 3. Ld. AR made a written submission. The thrust of the ld. AR’s submission was that once the assessee had filed affidavits and explained the source of cash deposits, the onus shifted on department. The ld. CIT(A) has merely rejected affidavits filed by the assessee without giving any proper reason. Therefore, the order of the ld. CIT(A) is bad in law. The ld. AR also pleaded that cost may be levied. 3.1 The relevant part of the ld. AR’s written submission is reproduced as under:- “The CIT (A) fails to pass the speaking order and passed the order in few lines whereas the assessee submitted a detailed submission referring to the case law AND THE TAXPAYER HAS BEEN DELIBERATELY PUSHED INTO THE PIT OF LITIGATION YOU ARE REQUESTED TO DECLARE THE SAME AS ILLEGAL In view of the above submission, you will observe that the addition made by the assessing officer is illegal and against the law without following the order of the tribunal. CONVERSATION OF PROOF INTO NO PROOF BY THE CIT(A). Respected sir, we fail to understand how CIT (A) disbelieved the explanation/statements given by the assessee when both documents are the documents submitted by the assessee during the hearing of appeal are the best evidence in itself but the CIT(A) ignore and converted good proof into no proof. Hon'ble Justice Hidayatullah of the Supreme Court in the case of Sreelekha Banerjee Vs CIT [1963] 49 ITR 112 (SC); 120 observed that the Income Tax Department cannot by merely rejecting unreasonably a good explanation, convert good "proof into no proof". Hon'ble Supreme Court in the case of Uma Charan Shaw & Bros Co Vs CIT 37 ITR 271 has held that the surmises and conjectures, and the conclusion are the result of suspicion which cannot take the place of proof. Hon'ble Punjab & Haryana High Court in the case of CIT Vs Anupam Kapoor (2008) 299 ITR 179 (P &H) also held that suspicion, howsoever strong cannot take the place of legal proof. Honorable, please also look into the working style of the Income Tax Commissioner Appeal, is nothing but pushing the assessee in the litigation.”

Submission of ld. DR 4. Ld. DR relied upon the orders of the lower authorities. The ld. DR submitted that the affidavits were not filed before the Assessing Officer. The ld. DR also submitted that though the affidavits were filed before ld. CIT(A) as claimed by the ld. AR of the assessee, the ld. CIT(A) has not forwarded these affidavits to the Assessing Officer. Hence, it is violation of Rule 46A of the Income Tax Rules, 1962.

Findings &Analysis 5. We have perused the orders and record. 6. It is an admitted fact that as per the bank statement of the assessee, there was cash deposit of Rs. 5,00,000/- on 29.06.2009 and then withdrawal on 29.06.2009, again deposited on 29.06.2009. Assessee had filed copy of a letter issued by State Bank of India, Khajuwala Beriyawali, Bikaner. The relevant part of the said letter is reproduced as under:-

disclosed by the assessee or from some undisclosed source. The Department does not then proceed on no evidence, because the fact that there was receipt of money is itself evidence against the assessee. There is thus, prima facie, evidence against the assessee which he fails to rebut, and being unrebutted, that evidence can be used against him by holding that it was a receipt of an income nature. The very words "an undisclosed source" show that the disclosure must come from the assessee and not from the Department. In cases of high denomination notes, where the business and the state of accounts and dealings of the assessee justify a reasonable inference that he might have for convenience kept the whole or a part of a particular sum in high denomination notes the assessee prima facie discharges his initial burden when he proves the balance and that it might reasonably have been kept in high denomination notes. Before the Department rejects such evidence, it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession. The Department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof. It is within the range of these principles that such cases have to be decided. We do not think that the Allahabad view puts no burden upon the assessee and throws the entire burden on the Department. The case itself does not bear this out. If it does, then, it is not the right view.”

8.1 Thus, the Hon’ble Supreme Court has observed that the department cannot merely reject explanation filed by the assessee.

“In all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. The appellant admitted that she had received jewellery and diverse sums of money from Sita Devi and she claimed these gifts made out of love and affection. The case of the appellant was that the receipts did not fall within the taxing provision. It was therefore, for the department to establish that these receipts were chargeable to tax.”

Ground No. 8