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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2007- 08 is directed against the order of Ld. CIT(A), Rohtak dated 05.03.2019.
The assessee has raised following ground of appeal:- 1. “That the Learned CIT (A) has erred in law as well as facts of the case by sustaining addition of remaining cash deposit of Rs. 1255500/- out of Rs. 4516000/- being unexplained and treated the same as undisclosed income.
2. That the Learned CIT (A) has further erred in law as well as facts of the case by giving benefit of Rs. 2 Lacs on A/c of sale of cattles while sales of buffaloes are Rs. 485650/-. In evidence sale receipts and the buyers produces who have purchased the Buffaloes and statement of the buyers was recorded who have confirmed the purchase. Thus the benefit of Rs. 2 lacs given is totally wrong and illegal instead of benefit of Rs. 485650/- may be given.
3. That the Learned CIT (A) has wrongly rejected of Rs. 12 lacs on A/c of Bayana received of Agriculture land and cancellation of bayana and payment repaid to the persons produce and their statements recorded and source of investment was also proved. Thus the addition confirmed Rs. 12 lacs is totally wrong, illegal and excessive in nature.
4. That the Learned CIT (A) has erred in law as well as facts of the case in considering the Remand Report of the A.O. dated 13-08- 2018 as it is prepared in gross violation of principles of natural justice as no opportunity of hearing has been afforded to the appellant and this remand report dt 13.08.2018 has been prepared on the papers filed in the record of predecessor A.O. Thus the Remand Report of the A.O. without affording any hearing to the appellant is totally wrong & illegal and against the provisions of I.T.Rules.
5. That the Learned CIT (A) has erred in law as well as facts of the case by not considering the first Remand Report of the A.O. dated 22-05-2018 as it is complied with Principles of natural justice as he has given proper Notice of hearing and he also called many witness and has recorded their statements. Thus the addition sustained by the CIT (A) is totally wrong & illegal.
6. That the appellant craves, leave to add delete amend or modify any Ground or Grounds of appeal
at the time of hearing.”
3. At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that despite various opportunities were given to the assessee but no one attended the hearing on behalf of the assessee. Therefore, the appeal of the assessee is taken up for hearing in the absence of the assessee and is being disposed off on the basis of material available on record and after hearing the Ld. Sr. DR.
FACTS OF THE CASE
Facts giving rise to the present appeal are that the case of the assessee was re-opened u/s 147 of the Income Tax Act, 191 [“the Act”] on the basis that the assessee had deposited cash amounting to Rs.45,16,000/- with State Bank of Patiala during Financial Year 2006-07. A notice u/s 148 of the Act was issued to the assessee. In response thereto, no income tax return was filed by the assessee. Despite various opportunities, there was no representation made on behalf of the assessee. Therefore, the Assessing Officer [“AO”] treated the cash deposited in the bank as unexplained income from undisclosed sources. Further, the AO made addition of the same and assessed the income of the assessee at Rs.45,16,000/-.
Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions and evidences placed by him, partly allowed the appeal of the assessee. Thereby, he deleted the addition of Rs.32,60,500/- which was treated as explained and remaining addition related to cash deposit of Rs.12,55,000/- was confirmed.
Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.
Ld. Sr. DR supported the assessment order and submitted that Ld.CIT(A) after considering the submissions and the evidences placed on record, has partly allowed the appeal of the assessee. He therefore, placed reliance on the decisions of the lower authorities.
I have heard the contention of Ld. Sr.DR and perused the material available on record and gone through the orders of the authorities below. I find that Ld.CIT(A) has given finding on facts by observing as under:-
6.2. “The assessee has shown cash in hand from old saving of Rs. 95,500/-. As submitted by him and considering the documentary evidence regarding land holding it is likely that he is earning income from agriculture and selling milk. Being an agriculturist he is not maintaining any books of accounts or documents to fully substantiate his claim as all the transactions are in cash. In his remand report the AO has not given any adverse finding regarding cash in hand shown by the assessee. In totality of circumstances, this plea of the assessee is found acceptable. 6.3 The assessee has shown receipt from sale of buffaloes of Rs. 4,85,650/- and photocopies of receipts have been submitted to prove the sale of buffaloes. It is seen that all the sales were made on the same date i.e. 02.04.2006, in his village. As the statement recorded by the AO confirmed this transaction, the only objection of the AO in the remand report is that buyer were not men of means. A perusal of the statements show that the buyers have paid from their past savings from their agricultural income and from dairy income. However, no proof has been given regarding possession of land or source of money, except the verbal statement. The evidence given by the assessee and the statements of the buyers of cattle are to be seen in the background of the realities of people of rural background who are not well educated and fully conversant with the provisions of law are different from those who are educated and well conversant with the taxation provisions and who are doing regular business activity and maintaining books of accounts. Considering that all the transactions were in cash, on the same date i.e. 2nd April, 2006 and the money received on sale of cattle was not deposited in the bank account by the assessee, but is claimed to be part of Rs 45,16,000/- which were deposited on 22.06.2006, the entire transaction does not seem to be correct and acceptable. A benefit of Rs 2 lacs is to be given to the assessee from sale of cattle. 6.4 Similarly, as regards advance receipts of Rs. 12,00,000/- as per agreement to sale, the statements recorded show that creditworthiness or source of money given is not fully substantiated. The persons with whom agreement was made were his family members. No documentary evidence has been given regarding the source of money given by the family members or details of their land holding or sources of income. The said agreements were made on the same day i.e. 15.06.2006 with three different parties, for the same land. From two parties Rs 6 lacs each is claimed to have been received as Bayana and from one party advance of Rs 2,15,000/- was taken and the later one materialized and was converted into sale deed on 22.06.2006. None of the document was registered and all transactions were in cash. Further, it is not understood why 45,16,000/- were deposited on one day i.e. on 22/06/2006 if he had received Rs 14,15,000/- on 15.06.2006. If he actually had this money with him, he could have very well deposited it in the bank account. It is not also clear why 35,00,000/- was transferred in the account of Rajender Singh (his relative) when total sale proceed was only 27,50,000/-. The assessee’s claim that money was repaid to the two relatives/parties from whom Bayana was taken earlier of Rs. 12,00,000/-, is not fully explained as there was no withdrawal from the bank account on the said dates. The remand report of the AO sent on 03.08.2018 has been considered as it was duly forwarded to the office of Addl. CIT (as per para 5 above). In this report the AO has opined that the assessee’-s contention regarding source of cash deposits has no basis and deserves to be dismissed. In view of the above discussion and remand report of the AO, the assessee’s submission regarding Bayana received from two relatives of Rs 12 lacs remains unsubstantiated and is found unacceptable. 6.5 The assessee has relied upon on several decisions of Hon'ble Supreme court and Privy Council which say that best judgment assessment should not be biased and should be rational. Considering these judgments, facts of the case and reality of rural India, the explanation of the assessee regarding the issue that the sale proceeds were deposited in his account (as other family members did not have any bank account) and then transferred out to Rajender Singh’s (his nephew) account is accepted in principle. Thus out of Rs 45,16,000/- the deposit of Rs 27,50,000/-, being amount received as per sale deed and deposit of Rs 2,15,000/- being advance received against the sale transaction vide agreement to sell dated 15.06.2006 is considered explained. Out of the receipt from sale of buffaloes benefit of Rs. 2,00,000/- is given as discussed in para 6.3 above. The assessee’s contention that he had cash in hand of Rs 95,500/- is considered acceptable as per para 6.2 above. Therefore cash deposits of Rs 32,60,500/- is treated as explained and addition of remaining cash deposit of Rs 12,55,500/- is confirmed, being unexplained. This amount is assessee’s undisclosed income u/s 69 of the Act. 6.6 The case laws given by the assessee regarding application of wrong section 68 in case of cash deposits in bank when assessee is not maintaining books of accounts have been considered and it is held that this addition is being made u/s 69 of the Act. Even otherwise, the submissions of the appellant that the addition has been wrongly made u/s 68 as addition on account of unexplained investments can be made only u/s 69 and therefore, the addition deserves to be deleted is legally untenable. Merely because an incorrect section has been mentioned while making the addition does not mean that the addition has been wrongly made. Reliance in this regard is placed on the case of Smt. Renu Aggarwal vs. ITO (2012) 75 DTR (Agra)(TM)(Trib) 48 . In this case, the Hon’ble tribunal held that In view of the subsisting obligation of the assessee to explain all credits and sources of investments, application of s. 68 or s. 69 does not make a difference. Therefore, addition cannot be deleted only on legal grounds disregarding the facts on record. As such, it would be of no consequence in law, in the facts and circumstances of the case, if the AO applied the provisions of s. 68 instead of s. 69 of the Act; it being trite that the omission to refer to section, or even applying a wrong section, would be of no moment as long as the authority concerned has the necessary power to perform the action under reference (refer : L. Hazari Mal Kuthiala vs. ITO (1961) 41 ITR 12 (SC), Laxmi Industries 8b Cold Storage Co. (P) Ltd. Vs. ITO (197) 79 ITR 248 (All). Also, it is settled principle of law that in a given case the transaction under reference may fall to be covered under more than one provision of the Act, and which by itself would be of no moment. I state so by way of abundant clarification, and for the sake of completeness of the discussion in the matter, even as the two provisions under reference, i.e. s. 68 or s. 69, are alternative, one' (s. 68) becoming applicable under the condition of existence of the books of account, and the other (s. 69) where not so.”
The above finding on fact is not rebutted by the assessee by placing contrary material on record. Therefore, in the absence of any contrary material on record, I do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby, affirmed. The grounds raised by the assessee are dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on 18th August, 2022.