JASBIR SINGH vs. COMMISSIONER OF INCOME TAX, KARNAL
What did the High Court hold?
The High Court held that no substantive question of law arises from the ITAT's order. The court found that the assessee failed to discharge the onus of explaining the nature of entries in its account books and bank account concerning the cash deposits. While the ITAT granted relief by allowing an adjustment of Rs. 2.30 lakhs in cash found with the assessee, the explanation for the remaining amount of Rs. 1,39,000/- was not accepted. The court reasoned that the additions made in respect of this balance amount were rightly confirmed by the ITAT. Therefore, the appeal was considered wholly without merit and was dismissed. The ratio decidendi is that the burden of proof lies with the assessee to explain the source of unexplained cash credits, and failure to do so can lead to additions to income. No issue was expressly left undecided.
What were the facts?
The appeal by the assessee, Jasbir Singh, is against the order dated May 31, 2011, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for the assessment year 2005-06. The dispute concerns additions made to the assessee's income on account of cash deposits in a bank account. The assessee had advanced Rs. 1.25 lakhs and Rs. 2.75 lakhs on June 11, 2004, to Bajrang Bali Rice Mills. The ITAT noted that the bank statement showed withdrawals and the preparation of a demand draft of Rs. 4 lakhs in favour of Bajrang Bali Rice Mills. The assessee was required to explain the source of these deposits. The ITAT granted some relief by directing the Assessing Officer to allow adjustment of Rs. 2.30 lakhs in cash found with the assessee, which was accepted. However, the explanation for the remaining amount was not accepted.
What were the issues?
1. Whether a substantive question of law arises from the ITAT's order confirming the addition of Rs. 1,39,000/- to the assessee's income, concerning the unexplained cash deposit in the bank account, under Section 260A of the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the appeal raises a substantive question of law, warranting admission. (No specific authorities or precedents were mentioned in the judgment for the assessee's argument). Revenue's Contention: The revenue contended that no substantive question of law arises from the ITAT's order, as the findings are based on facts and the assessee failed to discharge the onus of explaining the cash deposits. (No specific authorities or precedents were mentioned in the judgment for the revenue's argument).
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 296 of 2011 Date of decision 2.2.2012 Jasbir Singh . Appellant Versus Commissioner of Income Tax, Karnal .. Respondent CORAM: HON'BLE MR. JUSTICE M.M.KUMAR HON'BLE MR. JUSTICE ALOK SINGH Present: Mr.Ramesh Chaudhary, Advocate for Mr. S.K.Mukhi , Advocate for the appellant
To be referred to the Reporter or not ? 2. Whether the judgement should be reported in the Digest ? M.M.KUMAR,J.
The instant appeal under Section 260 A of the Income Tax Act,1961 is directed against order dated 31.5.2011 (A.3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh in respect of assessment year 2005-06 in ITA No. 153 (CHD) 2011. The matter pertains to additions made on account of cash deposit in the bank account. The appellant- assessee had advanced a sum of Rs.1.25 lakhs and Rs. 2.75 lakhs on 11.6.2004 to Bajrang Bali Rice Mills. There was no source of the deposit. It was infact cash deposited in the bank account before the issuance of demand draft from the bank account maintained by the assessee with Oriental Bank of Commerce, Pehowa. In para 8 of the impugned order, the bank statement has been cited commencing from October, 2003 which indicate the amount of withdrawal and then preparation of demand draft of rupees four lakhs in favour of Bajraj Bali Rice Mills. The onus was on the appellant-assessee to explain the nature of entries in the account book and the bank account maintained by it. However, some relief has been given and a direction has been issued by the Tribunal to the Assessing Officer to allow the adjustment of cash of Rs. 2.30 lakhs which was found available with the assessee and the explanation with regard thereto has been accepted. Whatsoever flimsy explanation has been tendered by the assessee- appellant in respect of the other amount was not accepted either by the Commissioner of Income Tax (A), Karnal or by the Tribunal. The addition made in respect of balance amount of Rs. 1,39,000/- has been rightly confirmed. No question of law much less a substantive question of law would arise for determination of this Court warranting admission of the appeal. The appeal is wholly without merit and the same is dismissed. (M.M.Kumar)
Judge (Alok Singh ) 2.2.2012 Judge okg
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