SMT. GURCHARAN KAUR,JAGADHARI vs. ITO, W-5, YAMUNANAGAR

PDF · subscribers
ITA 311/CHANDI/2019Status: DisposedITAT Chandigarh01 January 2020AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The CIT(A) was not justified in rejecting the evidence furnished by the assessee to prove the creditworthiness of the third party. The CIT(A)'s powers are co-terminus with the Assessing Officer and should have considered all facts.

What were the facts?

The assessee received Rs. 5 lacs which was added to her income as unexplained cash credit. The assessee claimed the amount was from her husband, who received it as earnest money for land sale. The CIT(A) upheld the addition, rejecting additional evidence.

What were the issues?

Whether the CIT(A) erred in rejecting additional evidence to prove the creditworthiness of a third party and whether the assessee had sufficiently discharged her onus.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

आदेश/Order

1.

The present appeal has been preferred by the assessee against the order dated 23.01.2019 of the Commissioner of Income Tax (Appeals)-3, Ludhiana [hereinafter referred to as ‘CIT(A)’].

2.

The assessee in this appeal has taken following grounds of appeal:-

1. That the Ld. Commissioner of Income Tax(Appeals)-3, has erred in dismissing the appeal of the appellant and thereby upholding - Smt. Gurcharan Kaur, Yamunanagar 2 the addition made by the Assessing Officer on account of alleged unexplained cash credit amounting to Rs. 5 lacs as per para 3.3. of her order.

2. That the Ld. CIT(A)-3, Ludhiana has erred in not considering that the appellant had sufficiently discharged her onus of proving the genuineness of the advance of Rs. 5,00,000/- received by her husband from Sh. Sardar Singh by way of furnishing his affidavit and his statement recorded during the course of assessment proceedings.

3. That the Ld. CIT(A)-3, Ludhiana has erred in holding that the assessee was required to prove the credit worthiness of Sh. Sardar Singh as the provisions of section 68 were not applicable as the transaction of the assessee.

4. Without prejudice to Ground No. 3 above and even otherwise, the Ld. CIT(A), Ludhiana has erred in rejecting the evidence proving the source of funds of Sh. Sardar Singh on technical grounds under Rule 46A without appreciating the cause of justice for the assessee.

5. That the appeal of the appellant has been rejected against the facts and circumstances of the case and the submission filed during the course of hearing has not been considered properly.

6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.

- Smt. Gurcharan Kaur, Yamunanagar 3 3. The sole issue raised in this appeal is regarding the addition of Rs.

5 lacs made into the income of the assessee by the Assessing Officer and further confirmed by the CIT(A) on account of unexplained cash credits.

4.

The case of the assessee has been that the said amount of Rs. 5 lacs was received by her from her husband Shri Daljeet Singh. The Assessing Officer made the impugned addition observing that assessee could not prove the creditworthiness of her husband Shri Daljeet Singh.

In the appellate proceedings before the Ld. CIT(A), it was submitted that the source of the deposit of Rs. 5 lacs into the account of the assessee was from earnest money received by the husband of the assessee for sale of his agricultural land. The assessee also sought to produce the additional evidence in this respect to even prove the source of source. However, the Ld. CIT(A) rejected the said evidences on the ground that the assessee had not produced the same during the assessment proceedings before the Assessing Officer. He, further observed that there was no specific request by the assessee for admission of additional evidence under Rule 46A of the Income Tax Act, 1961 (in short 'the Act').

5.

The Ld. proxy counsel of the assessee has submitted that the assessee from the very beginning has submitted that the aforesaid amount of Rs. 5 lacs was deposited by the husband Shri Daljeet Singh into her account which was the amount received from Shri Sardar Singh as advance against sale of land. However, the said plea of the assessee - Smt. Gurcharan Kaur, Yamunanagar 4 has been rejected by the lower authorities on the ground that the assessee could not prove the creditworthiness of the said Shri Sardar Singh from whom the amount was received by her husband. That since Shri Sardar Singh was a third person, hence, under the circumstances, the assessee was not expected to prove the creditworthiness of Shri Sardar Singh. However, later on, during the appellate proceedings, the assessee sought to prove the creditworthiness of Shri Sardar Singh. That the evidence sought to be produced regarding the sale of agricultural produce by Shri Sardar Singh were very much necessary and have to be looked into by the Ld. CIT(A).

6.

The Ld. DR, on the other hand, has relied on the findings of the lower authorities.

7.

After considering the above submissions of the proxy Counsel for the assessee and hearing the Ld. DR, I am of the view, that the Ld. CIT(A) was not justified in rejecting the evidence furnished by the assessee to prove the creditworthiness of Shri Sardar Singh who was a third person. The powers of the CIT(A) are co-terminus with that of the Assessing Officer and under the circumstances, the Ld. CIT(A) was supposed to consider the entre facts and circumstances especially when the plea of the assessee has been rejected on the ground that the assessee has failed to prove the source of source.

In view of the above, the order of the Ld. CIT(A) is set aside and the matter is restored to the file of the Assessing Officer for decision - Smt. Gurcharan Kaur, Yamunanagar 5 afresh on the said issue after giving proper opportunity to the assessee to produce the relevant evidences and after duly considering the same.

In the result, the appeal of the assessee is treated as allowed.

Order dictated and pronounced in the Open Court immediately on

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →