VED PARKASH vs. COMMISSIONER OF INCOME TAX APPEAL CHD AND ORS

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ITA/235/2015HC Punjab & HaryanaPHHC01109869201502 July 2015Bench: MR. JUSTICE A.B. CHAUDHARI,MR. JUSTICE M.M. AGGARWAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issues raised before it were pure questions of fact requiring appreciation of evidence. Regarding the cash deposit, the CIT(A) had already directed the AO to consider cash withdrawals and add only the peak of the deposits, which was a factual determination. Similarly, concerning the capital gains, the CIT(A) had allowed a portion of the cost of acquisition of the earlier property, which was also a factual finding. The Court found that no question of law, much less a substantial question of law, arose from the orders of the lower authorities. Therefore, the appeal filed before the High Court was dismissed. No specific issue was left undecided; the entire appeal was dismissed on the ground that it did not involve a substantial question of law.

What were the facts?

The appeal concerns assessment year 2009-2010. The Assessing Officer (AO) noticed a cash deposit of ₹11,04,167/- in the appellant's savings bank account, which was significantly higher than his gross turnover of ₹4,21,855/-. The appellant failed to provide sale/purchase details. The AO added the entire deposit to the appellant's income. The Commissioner of Income Tax (Appeals) [CIT(A)] noted inconsistencies in the appellant's claim of maintaining accounts. However, the CIT(A) directed the AO to consider cash withdrawals from the same account and add only the peak of the deposits. Separately, the appellant deposited ₹12,30,500/- from the sale of a plot. The AO treated ₹37,84,380/- of the sale consideration as short-term capital gain, disallowing the appellant's claim of purchasing the plot with funds from selling an earlier house for ₹12 lacs, as no purchase details were provided. The CIT(A) allowed ₹12,85,500/- as the cost of acquisition for the earlier property, reducing the short-term capital gain to ₹25,01,880/-.

What were the issues?

1. Whether the Tribunal erred in dismissing the appeal, holding that no substantial question of law arises from the CIT(A)'s order regarding the addition of cash deposits in the savings bank account, which involved appreciation of evidence and consideration of cash withdrawals. 2. Whether the Tribunal erred in dismissing the appeal, holding that no substantial question of law arises from the CIT(A)'s order regarding the addition of short-term capital gain on the sale of a plot, which involved factual determination of the cost of acquisition of a prior property. Assessee's Contention: The appellant argued that the matters involved questions of law and that the Tribunal ought to have decided the appeal on merits. The appellant's case regarding the cash deposit was that it was related to business transactions, and regarding the plot sale, it was out of sale consideration of a plot, with a half share, purchased earlier by selling his old house. Revenue's Contention: The revenue, through the AO and implicitly supported by the Tribunal's finding, contended that the cash deposits were unexplained and not related to business turnover, and the sale consideration of the plot was taxable as capital gain due to lack of evidence for the cost of acquisition of the previous property.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA-235-2015 (O&M) Date of decision:- 02.07.2015

Ved Parkash ...Appellant Versus

Commissioner of Income Tax (Appeals), Chandigarh and others

...Respondents CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE

HON’BLE MR. JUSTICE G.S. SANDHAWALIA

Present: Mr. Tribhawan Singla, Advocate,

for the appellant. * * * * S.J. VAZIFDAR, A.C.J. (ORAL) This is an appeal against the order of the Income Tax Appellate Tribunal dismissing the appeal against the order of the CIT (Appeals). 2. The matter pertains to the assessment year 2009-2010. The AO noticed a cash deposit in the appellant’s savings bank account of ` 11,04,167/-. The amount had been deposited in cash in the appellant’s bank account. The AO observed that the gross turn-over was only ` 4,21,855/- and, therefore, the cash cannot be related to the appellant’s business transactions. This finding was also on account of the fact that the appellant had not produced any sale/purchase details. The AO, therefore, made an addition of ` 11,04,167/-. The CIT (Appeals) noted that the appellant had initially stated that he was not maintaining any regular books of accounts and later he submitted that the books of accounts were complete. Only a computerized cash book had been filed without any bills/vouchers. In these circumstances, the appellant’s case that he had been maintaining accounts was not acceptable. The CIT (Appeals), however, accepted the contention that the AO ought not to have treated the cash deposit as income without considering the cash withdrawals from the same bank. The CIT (Appeals), therefore, fairly granted the appellant relief by directing the AO to make addition of only peak of the deposits in the bank account after getting the details from the appellant. These are pure questions of fact which require the appreciation of evidence. No question of law much less a substantial question of law arises in this regard. AMODH SHARMA 2015.07.06 14:20 I attest to the accuracy and authenticity of this document chandigarh

ITA-235-2015 (O&M)

3.

The AO had also found that the appellant had deposited a sum of ` 12,30,500/- in another bank account. The appellant’s case is that this amount was deposited out of the sale consideration of a plot or land which was sold for ` 75,68,761/-. The appellant’s further case was that he had a half share and that the deposit was made from the sale proceeds received by him. The appellant also contended that this plot was purchased earlier by selling his old house for ` 12 lacs. As no details were filed regarding the purchase of the earlier house, the AO did not accept the fact of sale of the old house and subjected the sale consideration amounting to ` 37,84,380/- as short term capital gain. The appellant’s case regarding these transactions are purely questions of fact. The CIT (Appeals) in fact again directed the AO to allow ` 12,85,500/- on account of cost of acquisition of the earlier property and granted the appellant relief to that extent. The cost of acquisition of the new property was, therefore, reduced from half of the sale price taxed by the AO as capital gain. Accordingly, the short term capital gain was held by the CIT (Appeals) to be ` 25,01,880/-. The second issue also does not raise a substantial question of law. 4. The appeal is accordingly dismissed.

(S.J. VAZIFDAR) ACTING CHIEF JUSTICE

(G.S. SANDHAWALIA)

JUDGE 02.07.2015 Amodh AMODH SHARMA 2015.07.06 14:20 I attest to the accuracy and authenticity of this document chandigarh

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