C I T vs. BALBIR SINGH MOHINDER SINGH

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ITA/203/2009HC Punjab & HaryanaPHHC01084286200905 November 2009Author: MR. JUSTICE GURDEV SINGH,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the findings of the ITAT were not shown to be perverse in any manner. The Court found that the questions proposed by the Revenue did not constitute substantial questions of law. The ITAT had accepted the assessee's explanation regarding the source of the money, noting that the assessee had satisfactorily explained it. The Tribunal had also observed that under Section 69, an opportunity must be given to the assessee to explain the source of income, and that assessment should be based on material evidence rather than solely on third-party statements without corroboration. The Tribunal's reliance on the principle that the burden shifts to the revenue when the assessee provides explanations and corroborating evidence was upheld. Consequently, the ITAT's decision to delete the addition of Rs. 1,60,000/- was affirmed. No issue was expressly left undecided.

What were the facts?

The Revenue (Commissioner of Income Tax, Karnal) preferred an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The ITAT's order pertained to the block period 1997-98 to 2003-04. The dispute arose from cash seized from the respondent (Balbir Singh Mohinder Singh) during a police check, which was subsequently assessed as undisclosed income under Section 158BC/BD. The Assessing Officer made an addition, which was partly allowed by the CIT(A). However, the ITAT accepted the assessee's explanation in its entirety, holding that the amount was not undisclosed income.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the finding recorded by the Ld. I.T.A.T. is perverse and contrary to evidence and statements of parties on record? (Question of law/mixed fact and law) 2. Whether on the facts and in the circumstances of the case, the Ld. I.T.A.T. was right in law in allowing the appeal of the assessee thereby deleting the addition of Rs. 1,60,000/- made by the Assessing Officer and confirmed by the CIT (A)? (Question of law) Assessee's contentions: The assessee had satisfactorily explained the source of the money recovered. The ITAT relied on Section 69 of the Act, stating that an opportunity should be provided to the assessee to explain the source. The Tribunal noted that assessment should be based on material and not solely on third-party statements unless corroborated. The Tribunal cited CIT Vs. N.Swamy (241 ITR 363) and CIT Vs. Daya Chand Jain Vaidya (98 ITR 280) to support its view that the burden shifted to the revenue when the assessee provided explanations and the names of persons were mentioned in receipts seized with the money. Revenue's contentions: The Revenue argued that the ITAT's findings were perverse and contrary to evidence and statements on record. The Revenue challenged the deletion of the addition of Rs. 1,60,000/-.

Which sections of the Income-tax Act were involved?

Section 260A,Section 158BC,Section 158BD,Section 69

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
I.T.A. No. 203 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A. No. 203 of 2009 (O&M) Date of decision: November 5, 2009 Commissioner of Income Tax, Karnal ...Appellant Versus Balbir Singh Mohinder Singh ...Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present: Mr. Sukant Gupta, Advocate, for the appellant.

ORDER

1.

This revenue has preferred this appeal under Section 260A of Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, Delhi Bench “I” New Delhi in IT (SS) No. 381/Del/2005 dated 31.8.2007 for the block period 1997-98 to 2003-04, proposing to raise the following substantial questions of law:- “Whether on the facts and in the circumstances of the case, the finding recorded by the Ld. I.T.A.T. are perverse and contrary to evidence and statements of parties on record ? Whether on the facts and in the circumstances of the case, the Ld. I.T.A.T. Was right in law in allowing the appeal of the assessee thereby deleting the addition of Rs. 1,60,000/- made by the Assessing Officer and confirmed by the CIT (A) ?”

2.

During the course of checking by the police, cash was found with the respondent, which was seized under Section 132 of the Act. The same was followed by the assessment under Section 158BC/BD for block period 1997-1998 to 2003-2004 and declaration of the amount as undisclosed income. The CIT (A) partly allowed the appeal of the respondent but the Tribunal accepted the explanation in entirety and held that the amount was not undisclosed income. The observations of the Tribunal are as under:- “...In the present case the assessee has satisfactorily explained the source of money recovered from him. At the same time it is clear from a reading of Section 69 that before the amount is said to be unexplained and is added as income of the assessee, opportunity should be provided to the assessee to explain the source. The assessee's income is to be assessed by the (All).”

3.

We have heard learned counsel for the appellant.

4.

The above finding of the Tribunal has not been shown, in any manner, to be perverse. The questions proposed cannot be held to be substantial questions of law.

5.

The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 5, 2009 (GURDEV SINGH ) prem

JUDGE

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