M/S BALURAM JAT,AJMER vs PRINCIPAL COMMISSIONER OF INCOME TAX, AJMER

Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 690/JP/2019

For Appellant: Shri S.R. Sharma (CA) &, Shri R.K. Bhatra (C.A.) jktLo dh vksj ls@

Hearing: 20/02/2020Pronounced: 12/03/2020

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 690/JP/2019 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Baluram Jat The Pr. CIT, Vs. S/o Shri Ghasiram Jat, Ajmer. Village- Chitkhera, Kishangarh, Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AEBPC 9106 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.R. Sharma (CA) & Shri R.K. Bhatra (C.A.) jktLo dh vksj ls@ Revenue by : Shri B.K. Gupta (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 20/02/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 12/03/2020 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. Pr. CIT, Ajmer passed u/s 263 dated 27.03.2019 for the assessment year 2009-10 wherein the assessee has taken the following grounds of appeal:-

1. That the Ld. Principal Commissioner of Income-tax, Ajmer has erred in considering the assessment order passed by the AO is erroneous and prejudicial to the interest of Revenue without appreciating the full facts and circumstances of the case. He set aside to the file of AO to the extent for making afresh order after carrying out enquiries in the manner as directed by his order after giving an opportunity of being heard.

2. That he has failed to consider our written submissions and without going into true facts of the case asked the AO to make enquiries on secondary evidence of third parties for considering the sale consideration of Rs.2,71,00,000/- and ignoring the detailed order DIG (Stamps) dtd. 22-6-16. The Competent Authority has also considered such photo stat copy of agreement and treated such complaints as fake and passed his order that no such agreement was made for consideration of Rs.2,71,00,000/-.

3. That as asked by Pr. CIT to make detailed enquiry and to make addition of deposit which were already explained. The payment received from Kailash was paid by cheque and it was sufficient proof and accordingly accepted by AO after source thereof. 4. That the order passed u/s 263 is bad in law. It is also time barred from date of original due date of return filed for Nil tax liability for 07-08-09 also. 5. That as decided by Supreme Court in (2007) 211 CTR page 69 (SC) there is distinction between lack of enquiry and inadequate enquiry. As held by Supreme Court if there is an enquiry even inadequacy. As held by Supreme Court if there is an enquiry even inadequate that would not by itself given occasion to the Pro CIT to pass an order u/s 263 of IT Act merely because he has a different opinion in the matter. 6. That the detailed arguments given prior to date of hearing but not at all considered and no further opportunity being heard was given inspite of assessee asked for date as the counsel was busy at Jaipur with CIT (Exemption) and therefore assessee asked for adjournment on 25/3/19 but refused and passed such order which was seems to be pre-determined.”

2. Briefly the facts of the case are that basis certain information received by the Assessing officer, notice u/s 148 of the Act was issued to assessee on 17-08-2015 and in response to said notice, the assessee filed his return of income on 21.11.2016 declaring total income of Rs.1,45,660/- and the assessment was subsequently completed u/s 143(3) r/w 147 vide order dated 30.12.2016 at an assessed income of Rs 4,44,721 wherein addition of Rs 2,99,000/- was made towards undisclosed receipts in bank account u/s 68 amounting to Rs 2,99,000/.

3. The ld. Pr. CIT, Ajmer thereafter examined the assessment records of assessee and held that Assessing officer failed to make requisite inquiries with reference to the explanation offered by assessee during the course of assessment proceedings and therefore, the order passed by the Assessing officer is erroneous and prejudicial to the interest of Revenue.

4. Before we examine the contentions advanced by both the parties, it would be relevant to refer to the show cause notice dated 22.02.2019 issued by ld. Pr. CIT which reads as under:

“The assessment in your case for A.Y 2009-10 was completed u/s 147 r.w.s 143(3) by the ITO Ward 2, Kishangarh on 30.12.2016 assessing total income of Rs 4,44,720/.

On examination of assessment record, it is noticed that certain deposits of cash have been made on different dates during the period relevant to the A.Y. 2009-10 in your bank account No. 51084340304 maintained with SBBJ, Madanganj – Kishangarh, detailed are as under:-

Date Amount 31-12-2008 Rs. 597650 03-02-2009 Rs. 748500 03-02-2009 Rs. 150000 11-02-2009 Rs. 3048 19-03-2009 Rs. 1000 Total Rs. 1500198

3. However, the AO failed to make enquiries with reference to the explanation offered as is evidenced in the assessment order. You tried to explain the source from following:-

i) Vehicle sold to Sukh Ram Rs. 700000 ii) Vehicle sold to Sheo Ram Rs. 600000 iii) Vehicle sold to Pusa Ram Rs. 400000 iv) Plot sold to various parties Rs. 119000 v) Agriculture income Rs. 252000 vi) Received from Hari Ram Rs. 200000 vii) Funds from operations Rs. 480000 viii) Amount routed through Kailash Rs. 600000 paid Rs.600000 on 6-1-2009

The AO failed to inquire into the dates of these transactions to explain the cash deposits. Further, Shri Pusa Ram and Shri Sukh Ram had not agreed to the claim of assessee that they have purchased such vehicles leave aside in cash. In fact the statement of Shri Pusa Ram was on Oath and in the presence of Shri Vimal Chauhan A/R. The statement of Shri Sukh Ram too was on oath. The important part of these statements was that they were made aware of the version of Shri Balu Ram Jat in question No. 6 of both the statement denying purchase as well as payment in cash.

Shri Sheo Ram was not available as per income-tax inspector Report dated 16-11-2016.

However, letter on Shri Sheo Ram appeared and admitted purchase of Tractor, Trolly, Machine, Jilau/Pilau, Plough (Hal) etc. but the AO failed to enquire into these many claim availability of these many items with the assessee and how the assessee acquired them and allowed without investigation.

Shri Pusa Ram in statement on oath dated 18-11-2016 denied about the transaction and cash payment but subsequently on 27-12- 2016 by a plain letter stated, without specifying any date about purchase and sale of the vehicle without getting it transferred in his name. If it would have been enquired by the AO that statement on Oath carry evidential value rather than plain denial which AO failed to enquire.

Similarly Such Ram denied on oath on 18-11-2016 but furnished notarized copy without specifying any date on which he received vehicle. The document does not say purchase nor it say payment in cash and AO failed to enquire into these also that above are only indicative that the transactions of cash have not been enquired into as to the date of deposits by the AO resulting the assessment order erroneous in so far as prejudicial to the interest of the Revenue.

Even the merely 5 cheques deposits have been checked on “test checkl basis” rather full enquiry there into making the assessment erroneous in so far as prejudicial to the interest of the revenue.

The reasons were recorded amongst other w.r.t. investment of Rs. 27100000/- however the AO recorded in the order only Rs. 221 without enquiring into it. Moreover, in the last part of para 2 of the assessment order, the AO unilaterally accepted an affidavit without any enquiry or arrangements as to how income-tax Authority could recover and/or assessee will pay without there being any demand unless any protective demand is raised pending adjudication making the assessment erroneous in so far as prejudicial to the interest of the Revenue.”

In reply to show cause notice u/s 263 issued by ld Pr. CIT, the assessee filed his reply on 22.03.2019 copy of which is placed at APB Pages 50–57. The reply so filed was considered but not found acceptable to the Ld. Pr. CIT and for the reasons, stated in his order at para 5-7, he held that assessment order passed by A.O. is erroneous in so far as it is prejudicial to the interest of Revenue and the assessment order was set-aside to the aforesaid extent for making afresh assessment after carrying out enquiries in the manner as above and after giving opportunity to the assessee. In the aforesaid factual background, the present appeal has been filed by the assessee against the said order of ld. Pr. CIT, Ajmer passed u/s 263 of the Act.

During the course of hearing, the ld. AR submitted that for invoking provisions of section 263, the condition precedent is that assessment order passed by A.O. is erroneous and prejudicial to the interest of Revenue i.e. both conditions must co-exist. In the case of assessee, the order is neither erroneous nor prejudicial to the interest of Revenue.

It was submitted that the assessee in reply to show cause notice issued by ld. Pr. CIT explained that sums paid to him by Shri Sukhram and Shri Pusaram in cash was confirmed by them by filing affidavits. Further the said cash transactions with the said persons have been accepted by Ld. AO after due verification of the facts. Accordingly the assessee explained the sources of cash deposits made in his bank account and the same are accepted by Ld. AO after application of his mind and evidences submitted before him. As such it is wrong to allege that AO failed to enquire into the dates of these transactions for cash deposits in Bank. Further as admitted by the Ld. Pr. CIT in the impugned show cause notice issued u/s 263 that Shri Sheoram was not made available to Inspector on 16-11-2016. But later Shri Sheoram appeared before the Ld. AO and admitted that he purchased as Tractor, Trolley, machine, jilan/pilan plough etc. from the assessee in cash. As Sheoram appeared before the Ld. AO and accepted the facts that he purchased the tractor etc. Thus it is not in assessee’s preview to ask AO to make an investigation about the affidavit filed by Pusaram and Sukhram and subsequently denied by them. As all the facts were available before the Ld. AO and after considering/taken into account the supporting documentary evidences filed by the said persons he accepted the transactions of purchase of his assets in cash by the said persons from the assessee. Further a copy of bank account was available with Ld. AO (even at the time of issuing the notice u/s 148 of the I.T. Act, 1961) and all the transactions made by cheques were also there and examined by the Ld. AO by applying his mind. Thus the assessment order on this issue was neither erroneous nor prejudicial to the interest of revenue.

It was further submitted that similarly with regards to alleged investment of Rs. 2,71,00,000/- made by the assessee it is submitted that no such investment was made by him as alleged by the department on the basis of an alleged agreement. Further in case of Sub-Registrar Kishangarh vs. Baluram Jat vide order 22-06-2016 case No. 516/2011 the Ld. collector – Stamps, Ajmer held that the complaint filed against the assessee is wrong and he referred agreement is fake. As no such original Agreement was found on record and finally decided that no such alleged agreement was made for Rs. 27100000/-. A copy of said order passed by the Collector Stamps, Ajmer on 22-6-16 is enclosed herewith. The assessee further submits that the finding of the Ld. Pr. CIT in this regard that the Ld. AO has added a sum of Rs. 221 as against Rs. 2,71,00,000/- in his order is grossly wrong and far from the facts. The correct facts of the amount Rs. 221 are that the assessee received back interest of Rs. 221. The said sums Rs. 221 (Rs.158 + 63) was on account of interest received on SB A/c No. 51084340304 on deposits and out of the said amounts Rs. 63 has already been declared in return of income and balance sum Rs.158/- has been added by the Ld. AO in the assessment order. Thus the above said observation of the Ld. Pr.CIT that in place of Rs. 2,21,00,000 the Ld. AO has added only Rs. 221/- is wrong, without any basis and against the true facts of the case as evident from record. In view of the above facts duly supported by legal documentary evidences that no agreement was executed by the assessee for a sum of Rs. 27100000 as alleged by the Ld. Pr. CIT in his order. Further as evident from the impugned order passed u/s 263 that The Pr. CIT did not held that contention of assessee is not correct in law but only held that Ld. A.O. erred in accepting the claim without any enquiry or verification which should have been made.

It was further submitted that it is evident that Ld. A.O. made enquiries on the issue and assessee complied to the enquiries and filed all the required details. Thus it is not a case where that A.O. made no enquiry or verification which should have been made. It is clear from reading of notice u/s 263 of the Act, 1961 that the proceedings u/s 263 has been started on the same issue which have already been considered and examined by the then A.O. Thus the proceeding u/s 263 is a step to start again a second scrutiny/investigation of facts without there being any material to hold even prima-facie that the assessment order passed by A.O. is erroneous which is not valid in the eyes of law (CIT Vs. Trustees Anupam Charitable Trust (1987) 167 ITR (129) (Raj), CIT Vs. Godawari Sugar Mills Ltd. (1993) 203 ITR 108 (Bom.) and CIT Vs. Shakti Charities (2000) 160 CTR 107 (Mad.). The facts and submissions are verifiable from the assessment record. The Supreme Court in case of CIT Vs. Green World Corporation (2009) 314 ITR 81 held that ‘The jurisdiction under section 263 can be exercised only when both the following conditions are satisfied (i) the order of the assessing officer should be erroneous and (ii) it should be prejudicial to the interest of the Revenue. These conditions are conjunctive. An order of assessment passed by the Assessing officer should not be interfered with only because another view is possible. The Rajasthan High Court in case of CIT Vs. Chambal Fertilizers and Chemicals Ltd. (2013) 258 CTR (Raj.) 540 has held that the CIT cannot invoke the powers to correct each and every mistake or error committed by the A.O. Every loss to the Revenue cannot be treated as prejudicial to the interest of the Revenue and if the AO has adopted one of the course permissible under the law or where two views are possible and the AO has taken one view which the CIT does not agree, it cannot be treated as an order erroneous and prejudicial to the interest of the Revenue, the AO exercises quasi judicial power vested in him and if he exercises such powers in accordance with law, arrives at a just conclusion such conclusion cannot be termed to be erroneous only because the CIT does not feel satisfied with the conclusion. The Delhi High Court in case of CIT Vs. Kelvinator of India Ltd. (2011) 332 ITR 231 (Delhi) has held that Assessing officer taking one of two possible views with which commissioner not agreeing the assessment order cannot be treated as an erroneous order prejudicial to the interest of revenue. The Karnataka High Court after considering various judicial pronouncement in the case of CIT Vs. Gokul Das Exports (2011) 333 ITR 214 (Kar) has held that assessing officer taking one out of two views the assessment order is not prejudicial to interest of revenue. In view of the above judicial pronouncements and various other judgements on the issue the assessment order passed by A.O. cannot be treated as an erroneous and prejudicial to the interest of revenue. In the case of CIT Vs. Vodafone Essar South Ltd. (2013) 2012 Taxman 184, the Hon'ble Delhi High Court held that assessing officer before passing assessment order made an enquiry and directed his mind on all aspects. View adopted by him was clearly one among two plausible views that could have been taken. Commissioner did not specifically furnish any reasons to say why original order was unsupportable in law. Commissioner could not have validity exercised his revisionary power u/s 263 in instant case.

10.

It was further submitted that the order is not prejudicial to revenue as A.O. was correct in law and on the facts of the case. Thus the Ld. Pr. CIT is wrong in holding that A.O. did not make any enquiry or verification so as to invoke jurisdiction u/s 263. Even newly inserted Explanation 2 (a) to section 263 does not authorize or give unfettered powers to the Commissioner to revise each and every order, if in his opinion, same has been passed without making enquiries or verification which should have been made, since the Pr. CIT had not brought any material on record to substantiate his inference, and so the impugned revision order is only to carry out fishing enquiries with objective of substituting his views with that of the Assessing Officer which is not permissible in law (refer Narayan Tatu Rane Vs. I.T.O. (2016) 70 Taxman.com 227 (Mum).

11.

It was further submitted that as admitted by AO in assessment order the assessee has submitted complete sources of cash deposit alongwith copy of Bank Account No. 51084340304 with SBBJ Kishangarh with detail of all five cheques also deposit in Bank account as shown above. During the course of assessment proceedings the assessee vide letter dated 26-10-15 has furnished evidences explaining sources of cash deposit in his Bank account and after application of mind and full satisfaction the Ld. AO made the assessment which is apparent from assessment proceedings. The affidavit of Shri Sukhram, Shri Pusaram and Shri Kailash filed and accepted by AO . It has also been cleared from the assessment order that the assessee failed to explain the source of deposit of Rs. 179000 and drawing made by him for Rs. 120000/- and hence asked by AO to assessee for surrender the a sum of Rs. 299000 as addition to the total income. The assessee in compliance to buy peace and litigation expenses surrendered the said sums of Rs.299000/-. The above surrendered amount added by AO to the taxable income of the assessee u/s 68 of Act and as the assessee surrendered the said amount and not filed any appeal before CIT (Appeals) Ajmer.

12.

It was further submitted that it is not out of place to mention here that the transactions with Shri Kailash of Rs. 600000/- has been taken place by cheque on 06-01-2009 as evident from the assessment order and debited to assessee on above account on 06-01-2009 vide cheque No. 213760. As such amount deposited in cash by Sukhram and Shri Pusaram was confirmed by an affidavit which has not been contradicted by deposits and has been accepted by Ld. AO also apply his mind explained accepted by AO after application of his mind on evidences submitted on 26-10-2015. Thus it is wrong to allege that Ld. AO failed to make enquires into the dates of these transactions of cash deposits in Bank. As Shri Pusram and Shri Sukhram has filed an affidavit, the disagreement by them not maintainable in view of affidavit given on Oath duly notarized. As admitted Shri Sheoram was not made available to Inspector on 16-11-2016 but later on appeared and admitted the purchases of Tractor, Trolley, machine, jilan/pilan plough etc. As Shevram appeared before AO, it was not our duty to ask AO to make an investigation that when affidavit filed by Pusaram and Sujhram both, the denial made later on 18-11-2016, the action should have been taken by you against his affidavit given on Oath which is more Valuable documents as against denial of parties under undue influence in their statement taken under undue influence because cleared from their written submission on 27-12-2016 on a plain letter. The 5 cheques deposit clearly shown in Bank account and deposit of all the five cheques mentioned in Bank statement.

13.

It was further submitted that similarly with regards to investment of Rs. 27100000/- we are to submit that no such investment made by any agreement. The fake complaints filed before the DIG Registration and Stamps on the basis of above alleged Ikrarnama for sale. On receipt of said complaint the DIG Registration and Stamps directed to Sub-Registrar, Kishangarh to Investigate matter and the Sub Registrar after Investigation submitted his report to DIG Stamps. The order has been passed in detail vide case No. 516/2011 in the Court of Sub- Registrar Kishangarh vs. Baluram Jat order dated 22-06-2016 and in the order the above said agreement shown in the name of assessee found fake and finally decided that no such alleged agreement made for Rs. 27100000/-. We are enclosing herewith copy of such order of competent court passed on 22-6-16. It is also wrong to allege that AO recorded in the order only Rs. 221 as against Rs. 27100000/-. The sums Rs. 221/- (Rs. 158 + 63) was on account of interest received from SB account No. 51084340304 as shown above and not concerning with Rs. 27100000/- as assumed by you without any basis ignoring the actual true facts on record. It was income from other sources added for Rs. 158/- only because Rs. 63/- was already shown by assessee in his return. As such the story of Rs. 27100000/- was found quite fake and /or biogases per detailed order and/or inspection made by Court.

14.

It was accordingly submitted that the the AO order was not erroneous as there was no material before CIT(A) to show that the assessee had not filed all the detail before the AO. In view of the above facts duly supported by documentary evidences it could not be said that assessment order passed by A.O. is erroneous or prejudicial to the interest of revenue.

15.

It was further submitted that assessment of seller company i.e. M/s Sterling Build Estate Pvt. Ltd. was reopened on the same ground/reasons by the Ld. AO u/s 148 of the I T Act, 1961 and after verification of all the relevant documents/facts of the case the Ld. AO has accepted that no extra sale consideration was received in cash of Rs. 2.21 crores as mentioned in the alleged agreement to sale. It is further submitted that the case of the said concern was reopened on the same issue i.e. on the basis of above referred agreement to sale and the assessment has been completed by ITO, Ward-1(1), Jaipur at returned income accepting the facts that there was no such valid agreement for extra consideration of sale has been received. A copy of said assessment order is placed on record.

16.

It was accordingly submitted that assessment order passed by A.O. is neither erroneous nor prejudicial to the interest of revenue. Therefore, the invoking of provisions of section 263 by Ld. Pr. CIT was wrong, bad in law and without jurisdiction. The impugned order u/s 263 passed by Pr. CIT thus deserves to be cancelled/set aside.

Per contra, the ld. DR is heard who has submitted that the AO has failed to go into the enquiries with reference to failure of assessee to prove the veracity of the explanation offered for bank deposits, with the help of any documentary evidence. The assessee had not been able to controvert the finding that in their statements recorded on oath, Shri Pusa Ram and Shri Sukh Ram had not agreed to the claim of the assessee that they have purchased the vehicles in cash, specially when they were made aware of the version of Shri Balu Ram Jat in Question No. 6 of both the statements where in AO failed to enquire. Moreover, no date about purchase and sale of vehicle has been mentioned in the plain letter which is must to explain the deposit made on a particular date, which thus has no evidentiary value, furnished by Shri Pusa Ram on 27.12.2016. Similarly, Shri Sukh Ram denied on oath on 18.11.2016 but furnished notarized copy without specifying any date of receipt of vehicle as in the absence of dates, the date wise deposit cannot be held explained and ought to have made enquiries thereinto. All these submission of plain letter/notarized copy, clearly established that these are nothing but only an afterthoughts. In the case of Shri Sheo Ram,

1. the assessee also not produced any evidence which can prove that the Tractor, Trolly, Machine, Jilau/Pilau, Plough (Hal) etc. were actually available with the assessee and he had sold the same to Shri Sheo Ram on any particular date and received cash on the said particular date to explain date wise cash deposit. Therefore, only admittance of Shri Sheo Ram regarding purchase of these items from the assessee, without any documentary evidences, is of no help for the assessee and the AO failed to enquire thereinto. Regarding unexplained source of investment, he relied on the findings of the ld Pr. CIT. It was further submitted that the fact that the assessment in hands of the seller company was reopened on the said ground was apparently not in the knowledge of the ld Pr. CIT at the time of passing of the order u/s 263 of the Act. Further, he relied on the decision of Coordinate Bench in case of Aashiyana Jaipur Developers (P) ltd vs PR CIT (ITA No. 713/JP/2019 dated 25.11.2019). He accordingly supported the order passed by the ld Pr. CIT.

18.

We have considered the rival submissions and perused the material available on record. The ld CIT has raised two broad issues while exercising his jurisdiction u/s 263 of the Act. Firstly, it relates to deposits in bank account wherein the AO didn’t make enquiries with reference to explanation offered by the assessee. Secondly, it relates to unexplained sources of investment of Rs 2.71 crores wherein the AO has failed to make an enquiry.

19.

Firstly, we refer to the issue of investment of Rs 2.71 crores wherein the ld CIT has held that the AO has failed to make an enquiry regarding source of such investment and therefore, the order passed by him is erroneous and prejudicial to interest of the revenue.

20.

In this regard, the ld AR has submitted that the case of the assessee was reopened for this precise reason and our reference was drawn to reasons recorded by the Assessing officer before issuance of notice u/s 148 which reads as under:

“On the basis of information available with the undersigned, it is noticed that the assessee has entered into transaction of purchase of property from M/s. Sterling Build Estate Pvt.Ltd. (the seller). On the basis of available copy of Ikrarnama, it is found that the assessee Shri Balu Ram Jast along with partner Shri Radhey Shyam Yadav (R/o Gogawas, Tehsil – Dantaramgarh) entered into Ikrarnama of purchase of property bearing Khasra No. 96 and measuring 06 bighas 8 biswas for a total consideration of Rs. 2.71 crores with M/s.Sterling Build Estate Pvt.Ltd. on 01-10-2008. As per available copy of Ikrarnama (which is duly notarized on 2/10/2008 by Notary Public Shri Ramesh Chand Sharma, Kishangarh) a sum of Rs. 50,00,000/- (fifty lacs only) has been claimed to be paid in cash by the purchasers on 1/10/2008 itself i.e. at the time of execution of Ikrarnama. As per Ikrarnama, the remaining amounts were claimed to be paid by cheque of Shri Balu Ram Jat bearing Nos. 213745 to 213749 of SBBJ, Madanganj Kishangarh. However, the cheques bearing Nos 213745 to 213749 were not cleared from the accounts of Shri Balu Ram Jat. Finally the property was transferred through following four sale deeds:-

Sale value and mode of Seller Purchaser Details of land payment Rs.1400000/- through cheque M/s. Sterling Smt.Mooli Part of Khasra No.213758 dated 6/1/2009 of Build Estate Devi W/o. No. 96/1, SBBJ, Madangarnaj. This P.Ltd Shri Ghasi Measuring 02 cheque has been cleared on Ram Jat i.e. Bigha 01 Biswa 30/1/2009 from the A/c of mother of 18 Biswanshi. Shri Balu Ram held with SBBJ Shri Balu bearing No. 51084340304 Ram Jat Rs. 1400000/- through M/s. Sterling Smt. Prem Part of Khasra cheque No. 213757 dated Build Estate Devi W/o. No. 96/1, 6/1/2009 of SBBJ, P.Ltd Shri Measuring 02 Madanganaj. This cheque Baluram Bigha 01 Biswa has been cleared on 18 Biswanshi. 10/3/2009 from the A/c of Shri Balu Ram held with SBBJ bearing No. 51084340304. Rs. 1400000/- through M/s. Sterling Smt. Kisni Part of Khasra cheque No. 458564 dated Build Estate Devi W/o. No. 96/1, 6/1/2009 The BOR, P.Ltd Shri Banshi Measuring 02 Madanganaj. This cheque Lal Yadav Bigha 01 Biswa has been cleared on 18 Biswanshi. 20/3/2009 from the A/c of Shri Shyam Lal Yadav held with BOR (now ICICI) bearing No. 0110101417402 Rs. 1300000/- through M/s. Sterling Smt. Kamla Part of Khasra cheque No. 458563 dated Build Estate Devi W/o. No. 96/1, 6/1/2009 The BOR, P.Ltd Shri Shyam Measuring 02 Madanganaj. This cheque Lal Yadav. Bigha 01 Biswa has been cleared on 18 Biswanshi 24/1/2009 from the A/c of with Shri Shyam Lal Yadav held construction of with BOR (now ICICI) bearing 10 rooms. No. 0110101417402 From the copies of registered sale deeds, it is clear that the properties for which the Ikrarnama was executed has finally been registered in the names of family members of Shri Balu Ram Jat and Shri Shyam Lal Yadav (relative of Radhey Shyam Yadav) and thus, it can be believed that the transaction has actually took place on the value of amount quoted in Ikrarnama. Thus, the transaction of Rs. 2.16 crores [Rs. 2.71 crores minus payment made through managed banking channels Rs. 55 lacs (14 + 14 + 14 + 13)] ha been made in cash from undisclosed sources.

On the basis of information available in AST Module and ATMS Module, the assessee Shri Balu Ram Jat has not filed his income tax return for the A.Y. 2009-2010 and 2010-2011. A payment of Rs. 2.16 crores has been made in cash during the period 2/10/2008 and 31/3/2009 i.e. period relevant to the A.Y. 2009-2010. Out of this a sum of Rs. 50 lacs has been made on 1/10/2008 as reflected in Ikrarnama itself. Thus, a payment of Rs. 2.16 crores remains escaped assessment in the hands of the purchasers as mentioned in Ikrarnama for the A.Y. 2009-2010.

The perusal of bank account No. 51084340304 with SBBJ, Madanganj of Shri Balu Ram reflects transactions of certain deposits in cash on different dates during the period relevant to the A.Y. 2009-2010 which are reflected as under:-

Date Amount 23/09/2008 Rs. 15000 12/01/2009 Rs. 41000 27/01/2009 Rs. 450000 30/1/2009 Rs. 1110000 31/01/2009 Rs. 300000 02/02/2009 Rs. 200000 07/02/2009 Rs. 800000 9/02/2009 Rs. 446000 9/02/2009 Rs. 145000 13/02/2009 Rs. 1500 9/3/2009 Rs. 1500 Total Rs. 3510000 The assessee has filed his return of income for the A.Y.2007-2008 and 2008-2009 declaring total taxable income of Rs. 204000 and Rs. 180500 respectively. Return of income for the A.Y. 2009-2010 has not been filed and thus, with meager incomes in the earlier years, the assessee had no sources to deposits cash woth Rs.3510000 in his bank account as cash. The payments for purchase of the land referred above in the names of family members have been made through this account amounting to Rs. 2800000 (Rs. 1400000 + Rs. 1400000).

“The perusal of Ikrarnama reflects that the other purchaser alongwith Shri Balu Ram Jat was Shri Radhey Shyam Yadav who happens to be nephew (Bhanja) of Shri Shyam Lal Yadav. The land in question has been registered in the names of Kisni Devi W/o Shri Banshilal Yadav (Banshilal is brother of Radhey Shyam yadav) and Smt5. Kamla Devi, W/o Shri Shyamlal Yadav, The perusal of other available information including copies of bank accounts of Shri Shyam lal Yadav (the other purchaser reflected in the Ikrarnama) and Shri Balu Ram Jat, it has been noticed that the payments of Rs.14,00,000/- and Rs.13,00,000/- have been made through the bank account of Shri Shyam Lal Yadav held with the bank of Rajasthan Ltd. (now ICICI). The source of payment of Rs.13,00,000/- was mainly through cash deposit of Rs.12,96,000/- made on 22.01.2009 and the source of payment of Rs.14,00,000/- was through cheque Against payment received from Shri Balu Ram Jat through cheque of Rs.14,00,000/-. The sources of cash deposits of Rs.13,00,000/- are not explainable and thus, it can be concluded that substantively the deposits in the bank account of Shri Shyam Lal Yadav were made by Shri Balu Ram Jat and he is the sole investor in the land bearing Khasra No.96 and measuring 06 bighas 8 biswas for a total consideration of Rs.2.71 crores with M/s. Sterling Build Estate Pvt. Ltd. during the F.Y. 2008-09 i.e. period relevant to the A.Y. 2009-2010.

From the above detail/elaborated discussion, I have reasons to believe that Shri Balu Ram Jat is the sole investor in different names in the land bearing Khasra No.96, measuring 06 bighas 8 biswas for a total consideration of Rs.2.71 crores with M/s. Sterling Build Estate Pvt. Ltd during the F.Y. 2008-2009 i.e. period relevant to the A.Y. 2009-2010 and the sources of this investment remains unexplained. Thus, I have reasons to believe that income of Rs.2.71 crores invested in the land has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961”

21.

It was further submitted by the ld AR that during the course of assessment proceedings, it was submitted before the AO that no such investment was made by any agreement/IKrarnama and a fake complaint was filed before the DIG Registration and Stamps on the basis of above alleged Ikrarnama for sale. On receipt of said complaint, the DIG Registration and Stamps directed the Sub-Registrar, Kishangarh to investigate the matter and the Sub Registrar after investigation submitted his report to DIG Stamps. The Collector, Stamps, Kishangarh has thereafter passed the order vide case No. 516/2011 namely Sub-Registrar Kishangarh vs. Baluram Jat dated 22- 06-2016 and in the said order, the above said agreement shown in the name of assessee has been found to be fake. It was accordingly submitted that no such alleged agreement was made for Rs. 271,00,000/-. The AO therefore examined this particular matter in detail and has also written a letter dated 14.12.2016 to DIG Registration and Stamps who has in turn replied to the AO vide his letter no. 10185 dated 14.12.2016 and the contents thereof reads as under:- “mijksDr fo"k; ds izklakfxd i= ds Øe esa ys[k gS fd izdj.k la[;k 516@2011 mi iath;d fd’kux<+ cuke ckywjker tkV esa fu.kZ; fnuakd 22-06-2016 ikfjr dj jsQjsal [kkfjt fd;k x;k gSA ftldh Nkk;k izfr lqyHk lUnHkZ gsrq i= ds layXu gSA mDr izdj.k dks fof/kd ijh{k.k gsrq Jheku egkfujh{kd] iath;u ,oa eqnzkad foHkkx] jktLFkku] vtesj dks fHktok;k tkuk gS ftuds }kjk fof/kd ijh{k.k fd;s tkus ds i’pkr izdj.k esa ikfjr fu.kZ; ds fo:} vihy fd;s tkus vFkok ugh fd;s tkus dk fu.kZ; Jheku egkfujh{kd egksn; vkids }kjk gh fy;k tkuk gSA ”

22.

Further, our reference was drawn to findings in the order passed by the Collector, Stamps, kishangarh in case of Sub-Registrar Kishangarh vs. Baluram Jat (Case no. 516/2011 dated 22-06-2016) which read as under:- “cgl mHk; i{k dh lquh xbZA mDr bdjkjukesa esa tks xqeuke f’kdk;rdrkZ }kjk dh xbZ f’kdk;r ds i’pkr dHkh Hkh bl U;k;ky; esa mifLFkr ugh gq,A f’kdk;r ls O;fFkr i{kdkj ekStwnk vizkFkhZx.k us mifLFkr gksdj bl U;k;ky; esa tfj;s vf/koDrk viuk i{k j[krs gq, tckc izLrqr dj izdj.k ds rF;ksa ls Li"V bUdkj fd;k vkSj vius tckc ds leFkZu esa nLrkost bR;kfn izLrqr fd;sA ijUrq mDr f’kdk;rdrkZ us bl U;k;ky; ds le{k dHkh gkftj ugha gqvk uk gh mlus dHkh mifLFkr gksdj izdj.k dh lquokbZ ds viuh f’kdk;r ds leFkZu esa dksbZ lk{; bR;kfnr izLrqr fd;sA tgkWa rd rFkkdfFkr dwVjfpr nLrkost gS mlds dwVjfpr :i ls fVªd QksVksLVsV ds ifjis{; esa Hkh jktLFkku eqnzkad vf/kfu;e ds rgr QksVksLVsV ds vk/kkj ij LVkEi olwyh dk izko/kku ugh gSA bl lEcU/k esa ekuuh; loksZPp U;k;ky; dk U;k; fu.kZ; ,=vkbZ-vkj- 1971 lqizhe dksVZ i`"B la[;k 1070 ,oa 1997 ¼1½ MCY;w ,y-;lh-i`"B la[;k 484 Li"V gSA ,slk dgha ij dksbZ lk{;] izek.k ugh gS fd rFkkdfFkr fnuakd 1-10-2008 ds dwVjfpr izys[k dh QksVksLVsV dkWaih dks i{kdkjku }kjk mi;ksx esa yk;k x;k gks ,oa mDr nLrkost dk fu"iknu izekf.kr ugha gSA ;g laLohd`r rF; gS fd mDr [kljk uEcj 96@1 dk foØ; i= vizkFkhZ ds i{k ea ugh gS ,oa vizkFkhZ us mijksDr Hkwfe [kjhn Hkh ugh dh gSA mi iath;d] fd’kux<+ }kjk rFkkdfFkr nLrkostksa dk iath;u dj ftyk Lrjh; lfefr }kjk vfHkfu/kkZfjr nj vuqlkj eqnzkad o iath;u 'kqYd [kjhnnkjksa ls olwyh dh gS ,oa /kkjk 54 ds rgr iw.kZ eqnzkafdr djus dk i`"Bkadu Hkh fd;k gSA mDr nLrkost dk iath;u iw.kZ eqnzkad cktkj nj ij fd;k tkuk izekf.kr gSA vr% bl foospu ds vk/kkj ij Hkh tkWap esa vUrfyZIr fcUnw fulkj gks pqdk gSA ;g fd f’kdk;rdrkZ us ftl dRkkdfFkr bdjkjukesa ds vk/kkj ij f’kdk;r dh gS og vly bdjkjukek uk gksdj ek= QksVks dkWaih gS vkSj

Qksvks dkWaih fdlh hkh izdkj ls lk[; esa xzkg~; ugha ekuh tk ldrh gSA f’kdk;rdrkZ dk ;g fof/kd nkf;Ro Fkk fd og ;fn dksbZ f’kdk;r ysdj vk;k gS rks mls viuh f’kdk;r dks lkfcr djus gsrq Bksl izek.k&i= U;k;ky; dks miyC/k djkus pkfg;s Fks ijUrq pwafd og ,d >wBh QthZ f’kdk;r ds vk/kkj ij ek= ekStwnk vizkFkhZx.k dks ekufld o vkfFkZd :i ls ijs’kku djuk pkgrk gS blfy;s mlus viuh uk rks ofYn;r uk gh lgh irk f’kdk;r esa dgha ntZ fd;k gSA og >wBs o QthZ dwVjfpr nLrkost ds vk/kkj ij ekuuh; U;k;ky; dk xqejkg djuk pkgrk gSA ,slh fLFkfr esa mlds }kjk izLrqr ,sls dwVjfpr QksVks dkWaih tSls nLrkost ij fdlh Hkh dkuwuh n`f"Vdks.k ls fo’okl ugha fd;k tk ldrk gSA mDr fofHkUu U;k;ky;ksa ds U;kf;d n`"VkUrksa ls Li"V gksrk gS vizkFkhZ }kjk izekf.kr] Li"V] izR;{k lk{; ds izHkko esa jgrs gq, ,d xqeuke O;fDr }kjk ftldk uke] irk Hkh vizkFkhZ dks tkWap ds nkSjku crk;k ugha x;k uk gh rFkkdfFkr nLrkost dh udy mlds fo:} fof/kd dk;Zokgh fd;s tkus ckcr nh xbZ rks fdl izdkj ls vizkFkhZ dks tkWap ds nkSjku nks"kh ekuus dh lk{; dk fdf’par ek= Hkh fcUnw ugh curk gSA mDr nLrkost dwVjfpr :i ls rS;kj fd;k x;k gS fdlh us tkucw>dj feF;k }s"ko’k f’kdk;r dh gSA tgkWa rd ljdkj dh iz’kklfud dk;Ziz.kkyh dk fdlh f’kdk;r ij dk;Zokgh tkWap fd;s tkus dk fn’kk funsZ’k gS mlesa f’kdk;rdrkZ dk uke irk Li"V gksus ds lkFk&lkFk f’kdk;rdrkZ dk 'kiFk&i= Hkh vuqlayXu gksuk vko’;d gksrk gS] ysfdu mldk iw.kZr;k vHkko jgk gSA ;g izdj.k ,slk gS ftlesa f’kdk;rdrkZ izkFkhZ i{k dksbZ gS gh ughA ;gkWaij ;g Hkh ,d fof/kd igyw utj vkrk gS fd ;fn gLrxr tkWap ds nkSjku ikfjr fdlh vkns’k dks pqukSrh dh tkrh gS rks mlesa izkFkhZ@izfri{kh fdls cuk;k tk;sA D;k tkWat vf/kdkjh tks Lo;a fu.kkZ;d gS og izfri{kh ds :i esa i{kdkj cusxk\ bl ifjis{; esa tks fof/k dh vk/kkjHkwr fLFkfr gS fd izR;sd izdj.k esa nks i{k gksxsA izdkj.k/khu f’kdk;r esa nwljk i{k dkSu gS ;g bl U;k;ky; ds le{k Hkh Li"V ugh gks jgk gSA blls Li"V gksrk gS fd f’kdk;rdrkZ }kjk ekStwnk vizkFkhZx.k dks csotg ijs’kku djuk pkgrh gS mDr rFkkdfFkr bdjkjukesa esa mlds Lo;a ds dwVjfpr izrhr gksrs gSA geus fookfnr izdj.k ,oa i=koyh miyC/k leLr lk{;@lcwrksa dk ,oa vizkFkhZ ds fo}ku vf/koDrk }kjk izLrqr fyf[kr tckc voyksdu ,oa v/;;u fd;kA ifj.kker% i=koyh esa miyC/k fjdkMZ ds vuqlkj fo}ku vf/koDrk }kjk cgl ds nkSjku izLrqr fyf[kr tckc ds lkFk ekuuh; mPpre U;k;ky; ,oa ekuuh; mPp U;k;ky; fnYyh] jktLFkku] iatkc ,oa gfj;k.kk ds U;kf;d n`"VkUr ds gokys ds foopu ds vk/kkj ;g Li"V gksrk gS fd mDr fookfnr Hkwfe bdjkjukesa ls ugha vkbZA QthZ ,oa dwVjfpr bdjkjukek ls izkIr ugh dh xbZ gSA vr% Loizsj.kk ls ntZ izdj.k dks [kkfjr fd;k tkrk gSA mijksDr izdj.k esa cdk;k jkf’k ugha gksus ls dk;Zokgh lekIr dh tkrh gSA i=koyh fof/kd ijh{k.k gsrq Jheku egkfujh{kd iath;u ,oa eqnzkad foHkkx jktLFkku] vtesj dks fHktokbZ tkosA i=koyh QSly’kqekj gksdj uEcj ls de gksA fu.kZ; [kqys fnukad 22&06&2016 dks U;k;ky; esa lquk;kA”

23.

It was further submitted that after taking into consideration the above facts and carrying out necessary verification including directly communicating with the concerned authorities, the AO has recorded his findings in the assessment order dated 30.12.2016 which reads as under:- “As per information available with the department, the assessee alongwith shri Radhey Shyam Yadav S/o Shri Bhola Ram Yadav has executed an ikrarnama with M/s Sterling Build Estate Pvt. Ltd. through its director Shri Dharmendra Singh Rathore for purchase of agriculture land measuring 6 bigha 5.70 biswas Khasara No. 96, situated at Madanganj, Kishangarh ( Ajmer) on 01/10/2008. As per ikrarnama , the actual sale consideration was Rs. 2,71,00,000/- which includes cash of Rs. 50 lakhs and remaining of Rs. 221/- received to be through post dated cheques bearing no. 213745-213749. This ikrarnama was duly singed by buyer, seller and witnesses and was also notarized. It has came to notice that the assessee has not disclosed source of investment of Rs. 2,71,00,000/- in his return of income as the assessee don't filed any return of income as per the provision of section 139 of the Income-tax Act, 1961.

During the course of assessment proceedings, it is noticed that the Sub registrar, Kishangarh has made a reference to the Collector (Stamps), Ajmer on the basis of agreement as discussed above. The Collector (Stamps), Ajmer has passed order in case no. 516/2011 dated 22/06/2016 by quashing the reference made by the Sub-Registrar, Kishangarh and Notary public has also denied to notarized the same.

Further, the assessee has filed an affidavit no. G 186024 dated 28/12/2016 stating that if any adverse decision is passed against him by the Hon'ble High Court as well as other Courts or any authority will also be binding on him to pay taxes to revenue authorities including Income-tax Authorities as determined them. Looking to the facts and circumstances of the case no interference made on the issue.”

24.

It was further submitted that assessment of seller company i.e. M/s Sterling Build Estate Pvt. Ltd. was also reopened on the same reasons by the Ld. AO u/s 148 of the I T Act, 1961 basis the same alleged agreement and after verification of all the relevant documents/facts of the case, the Ld. AO has accepted that no extra sale consideration was received in cash of Rs. 2.21 crores as mentioned in the alleged agreement to sale and sale consideration of Rs 55 lacs as per registered sale deed during offered to tax in return of income was accepted. Our reference was drawn to the findings of the AO vide his order passed under 143(3) r/w 147 dated 30.12.2016 which reads as under:-

“The assessee has filed its return of income for the A.Y. 2009-10 on 31.03.2010 declaring income at Rs. NIL. Later on, as per information available with the department, the assessee has executed an lkrarnama with Sh. Balu Ram Jat S/o Shri Ghasiram & Sh. Radhey Shyam Yadav S/o Bholaram Yadav for sale of agriculture land measuring 6 bigha 5.70 biswas Khasara situated at No.96, Mandaganj, Kishangarh (Ajmer) on 01.10.2008. As per Ikrarnarna, the actual sale consideration was Rs. 2,71,00,000/- (Rupees Two Crore and Seventy One Lakhs) which includes cash of Rs. 50 lakhs and Rs. 221 lakhs received through post dated cheques serial No. 213745-213749. This Ikrarnama was duly signed by buyer, seller and witness and was also notarized.

Further, it has came to notice that the assessee has not disclosed sale consideration of Rs. 2,71,00,000/- in its return of income. Therefore, notice u/s 148 was issued on 06.10.2015 after obtaining prior approval of the Pr. Commissioner of Income Tax-1, Jaipur. The notice was duly served upon the assessee on 06.10.2015. The A/R of the assessee has filed his written submission on 06.11.2015 alongwith revised return of income e- filed on 04.11.2015 in response to notice issued u/s 148 of the Act declaring gross sales of Rs. 55 lakhs and total income at Rs. 5,81,660/-. Thereafter, a copy of reasons recorded was provided to the assessee. Subsequently, notices u/s 143(2) and 142(1) alongwith questionnaire were issued on 09.05.2016 which was duly served upon the assessee on 10.05.2016 requiring certain details relevant to the case.

The AR of the assessee, Sh. R. K. Bhatra, C. A. attended proceedings from time to time and filed written submission and details. The details and explanation have been examined and discussed with him. During the course of assessment proceeding the assessee filed revised return of income alongwith computation of total income declaring income at Rs. 5,81,660/- on 04.11.2015 as against income declared at Nil in the original return of income filed on 31.03.2010. After considering the facts of the case and details filed, the returned income as declared by the assessee in its revised return filed in response to notice u/s 148 is accepted. Since the assessee had concealed his income and furnished inaccurate particulars of income to the above extent, therefore penalty proceedings u/s 271(1)(c) r.w.s. 274 are being initiated separately. Assessed at Rs. 5,81,660/-. Demand notice and challan are being issued. Interest 234A and 234B are being charged as per ITNS 150 appended to this order, which forms a part of this order. Penalty proceedings u/s 271(1)(c) rws 274 have been initiated separately for concealment of income/furnishing of inaccurate particulars of income.”

25.

It was accordingly submitted that the matter was examined by the AO and basis such examination, the order has been passed by the AO and therefore, the findings of the ld CIT that the AO has not examined the matter and thus the order passed by him is erroneous is not correct.

26.

Having considered the rival submissions and pursuing available on record, we are of the considered view that the order passed by the Assessing officer cannot be held as erroneous and prejudicial to the interest of Revenue for the reasons stated herein. We find that the case of the assessee was reopened and one of the reasons recorded by the AO was source of investment of Rs 2.71 crores as per copy of agreement entered into with M/s Sterling Build Estate Private limited which remain unexplained and to that extent, the income of the assessee has escaped assessment. During the course of assessment proceedings, the matter was examined by the Assessing officer wherein the assessee submitted that no such agreement was entered into and even a complaint has been lodged with the Stamp authorities regarding evasion of stamp duty and on investigation, an order dated 22.06.2016 has been passed by Collector (Stamps) wherein the said agreement was found to be fake. A copy of said order dated 22.06.2016 was filed before the Assessing officer and in turn, the Assessing officer also enquired from DIG stamps about the veracity of such assertion made by the assessee and passing of such an order which was duly confirmed by the DIG Stamps. The Assessing officer has thereafter recording a specific finding in the assessment order which reads as under:

“During the course of assessment proceedings, it is noticed that the Sub registrar, Kishangarh has made a reference to the Collector (Stamps), Ajmer on the basis of agreement as discussed above. The Collector (Stamps), Ajmer has passed order in case no. 516/2011 dated 22/06/2016 by quashing the reference made by the Sub-Registrar, Kishangarh and Notary public has also denied to notarized the same.”

We therefore find that the Assessing officer has duly examined the matter and has carried out requisite enquiry and investigation which was reasonably expected from him and was satisfied that there was no basis to make any addition and accordingly, no addition was finally made towards undisclosed source of such investment as alleged initially while recording the reasons u/s 148 of the Act. Further, we find that on similar grounds, the matter in the hands of M/s Sterling Build Estate Pvt limited was reopened and after verification of all the relevant documents/facts of the case, the AO has accepted that no extra sale consideration was received in cash of Rs. 2.21 crores as mentioned in the alleged agreement to sale from the assessee and sale consideration of Rs 55 lacs as per registered sale deed during offered to tax in return of income was accepted. We therefore find that there is concurring findings by two Assessing officers of respective assessees wherein they have held that no such investment was made and money has not changed hands and so called agreement to sale cannot be relied upon as the same was held to be a fake agreement by the stamp authorities. Therefore, the findings of ld CIT that the Assessing officer should have done a protective assessment pending adjudication by the Higher authorities cannot be accepted as there is nothing on record that the order of the collector stamps has not been accepted and any further appeal has been filed against the same. At the time of passing of the assessment order, the order of collector stamps was on record and even at the time of passing of the order by the ld CIT, there is nothing on record which establishes that the order of the collector stamps has been appealed against and the matter has been admitted for adjudication by the Higher authorities. In our view, taking an affidavit from the assessee stating that if any adverse decision is passed against him by the Courts, the assessee shall be binded to pay taxes is more a precautionary approach adopted by the Assessing officer and the order so passed by the Assessing officer cannot be held to be erroneous and prejudicial to the interest of the Revenue where he has carried out the necessary and thorough examination of the matter.

27.

Now, coming to the issue of deposits in the bank account maintained by the assessee, we find that this was again one of the reasons to reopen the case of the assessee u/s 147 and thereafter, during the course of assessment proceedings, the matter was examined by the Assessing officer wherein the assessee was asked to explain the source of such deposits, further statement of the person whom the assessee claim to have received the amount were also recorded and these persons also filed affidavits before the Assessing officer. Taking all these explanation and documentation into consideration, the Assessing officer has recorded his findings in the assessment order which reads as under:-

“Further, the assessee was asked to explain sources of these cash deposits in his bank accounts. In compliance, the assessee has submitted that he has deposited Rs. 35,10,000/- in cash and the remaining amount of Rs. 15,00,198/- through cheques. The deposits made through cheques have been verified from the details, evidences etc. as submitted by the AIR of the assessee during the course of assessment proceedings on test check basis.

Further, during the course of assessment proceedings, the assessee on 26/10/15 has furnished evidences explain sources of cash deposits in the bank account as under:-

Vehicle sold to Sukh Ram Rs. 7,00,000 a. Vehicle sold to Sheo Ram Rs. 6,00,00 b. Rs. 4,00,000 Vehicle sold to Pusa Ram c. Plot sold to various parties Rs. 1,19,000 d. Agriculture income Rs. 2,52,000 e. f. Received from Hari Ram Rs. 2,00,000 Funds from operations Rs. 4,80,000 g. Amount routed through Rs. 6,00,000 h. Kailash paid Rs. 6,00,000

4.1 During the course of assessment proceedings the assessee filed affidavits of Shri Sukh Ram, Shri Pusa Ram and Shri Kailash explaining the courses of cash deposit in the bank accounts.

The assessee filed an letter dated 2/12/2016 stating that he is not in position to explain the sources of cash deposits in the bank accounts of Rs. 1,79,000/-and also stated that he is not in position to explain the sources of drawing made during the year Rs. 1,20,000/-. Thus, total amount of Rs. 1,79,000 + Rs. 1,20,000= 2,99,000/-is hereby surrender by the assessee during the course of assessment proceedings.

4.2 In view of the above, it has been revealed that the assessee has been failed to explain the source of cash deposits made in his bank account. Therefore, the unexplained amount of Rs. 2,99,000/- as deposited in the bank account of the assessee remains to be unexplained money and therefore, the same is Rs. 2,99,000/- hereby added back to the taxable income of the assessee u/s 68 of the Income-tax, 1961.”

28.

We therefore find that the Assessing officer has carried out the requisite examination during the course of assessment proceedings and basis such examination, he has brought to tax an amount of Rs 2.99 lacs as unexplained deposits in the hands of the assessee. It is therefore not a case of lack of enquiry and further, we find that Assessing officer has taken all requisite steps in terms of calling for the explanation of the assessee, examining the bank statements, calling for statements of the persons and also taking into consideration the affidavits filed by these persons and thereafter, has come to a finding that out of total deposits, an amount of Rs 2.99 lacs remains unexplained and the same was brought to tax in the hands of the assessee. The ld CIT has referred to certain inconsistencies in the statements and the affidavits so filed and has held that the AO has failed to make further enquiries in the matter and to that extent, the order of the AO is erroneous and prejudicial in nature. However, what further enquiries are required in the matter have not been spelt out by the ld CIT when the explanation of the assessee, the statements and affidavits of the person from whom the assessee claims to have received the money is on record. In such a situation, where enquiries have already been made by the AO and all material is on record, the ld CIT should come with a definite finding instead of remanding the matter to the Assessing officer for fresh adjudication. In this regard, we refer to the decision of the Coordinate Bench in case of M/s Dangayach Hotels (P) ltd vs Pr. CIT (ITA No. 290/JP/2017 dated 4.09.2017) wherein the relevant findings read as under:-

“We would like to state that once necessaries enquiries are conducted and the claim of assessee is found in accordance with law and also not in violation of Board Circulars/ instructions and the AO adopted a plausible view permissible in law then such view cannot be overruled by taking recourse of section 263 of the Act. The ld. Pr.CIT should have shown that the view taken by the AO is unsustainable in law. Simply expressing the view that the AO should have conducted enquiries in a particular manner as desired by him then such course of action of ld. Pr. CIT is not in accordance with mandate of provision of Section 263 of the Act. The ld. Pr. CIT has taken the support of newly inserted Explanation 2(a) to Section 263 of the Act. Even though there is a doubt as to whether the said explanation, which was inserted by the Finance Act, 2015 w.e.f. 1-06-2015 would be applicable to the assessment order passed prior to the effectiveness of the amendment yet we are of the view that explanation cannot be said to have override the law interpreted by the Hon’ble Delhi High Court in the case of Nagesh Knitwears Pvt. Ltd. (2012) 345 ITR 135 wherein the Hon’ble Delhi High Court has elucidated and explained the scope of provision of 263 of the Act and the same has been extracted by Hon’ble Delhi High Court in the case of CIT vs Goetze (India) Ltd.,361 ITR 505 which reads as under:-

‘’Thus, in cases of wrong opinion or finding on merits, the Commissioner of Income tax has to come to conclusion and himself decided that the order is erroneous by conducting necessary enquiry. If required and necessary, before the order under section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order is not sustainable in law and the said finding must be recorded. The Commissioner of Income Tax cannot remand the matter to the Assessing Officer to decide whether the findings recorded dare erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the Commissioner of Income Tax must give and record a finding that the order/ enquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner of Income Tax and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in law. In some cases possibly though rarely, the Commissioner of Income Tax can also show and establish that the facts on record or inference drawn from facts on record as per se justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries whether a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under section 263 of the Act. In such matters, to remand the matter/ issue to the Assessing Officer would imply and mean the Commissioner of Income Tax has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question.’’

We would also like to state that this explanation cannot override the interpretation provided by the Hon’ble Delhi High Court and if that be the case then the ld. Pr. CIT can find fault with each and every assessment without conducting any enquiries or verification in order to establish that the assessment order is not sustainable in law and order for revision. We would also like to state that the ld. Pr. CIT can force the AO to conduct the enquiries in the manner preferred by him then it will be prejudiced to the independent application of mind by the AO and definitely that could not be intention of the legislature in inserting Explanation 2 to section 263 of the Act. Such interpretation would lead to unending litigations and there would not be any point of finality in the legal proceedings. The Hon’ble Supreme Court in the case of Parshuram Pottery Works Co. Ltd vs ITO (1977) 106 ITR 1 held that there must be a point of finality in all legal proceedings. In our considered view, this provision shall apply if the order has been passed without making enquiries or verification which a reasonable and prudent officer should have carried out in such cases. Under these facts and ratio decided by the Hon’ble Courts in case of CIT Vs. Green World Corporation 314 ITR 81 (SC), CIT v. Kelvinator of India Ltd. 332 ITR 231 (Delhi), CIT-8, Bombay v. Fine Jewellery (India) Ltd. 372 ITR 303 (Bombay) and CIT v. Reliance Communication Ltd (2017) 396 ITR 217, we are of the considered view that it is not a fit case of invoking the provisions of section 263 of the Act. Therefore, we set aside the order of the ld. Pr. CIT and restore the assessment order on this issue in the light of the above deliberations. Thus Ground No. 1, 2 and 3 (a) of the assessee are allowed”

29.

We have also gone through the decision in case of Aashiyana Developes (supra). The said case was rendered in context of commission payment and complete lack of enquiry as against the case of the assessee wherein we find that enquiries have been conducted by the Assessing officer and thus, the said decision doesn’t support the case of the Revenue.

M/S BALURAM JAT,AJMER vs. PRINCIPAL COMMISSIONER OF INCOME TAX, AJMER