SHRIMATI SHALINI SHARMA,AMRITSAR vs. INCOME TAX OFICER WARD 5 (5), AMRITSAR

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.787(Asr)/2017 Assessment Year:2009-10

Smt. Shalini Sharma Vs. Income Tax Officer, H.No.285, Prem Nagar, Ward 5(5), Amritsar Mirankot Chowk, Opp. Central Jail, Airport Road, Amritsar [PAN:BKSPS 4437G] (Appellant) (Respondent)

Appellant by: Sh. R.K. Magow (Ld. CA) Respondent by: Sh. Dheeraj Garg (Ld. DR) Date of hearing: 25.07.2019 Date of pronouncement: 06.08.2019

ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Assessee/Appellant against the order dated 19/09/2017 impugned herein, passed by the Ld. CIT(A)-2, Amritsar u/s. 250(6) of Income Tax Act, 1961 (hereinafter called as the ‘Act’), for Asst. Year:2009-10.

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the course of assessment proceedings u/s 147, it was claimed by the assessee that during the relevant period, the assessee’s mother Smt. Vijay Kumari gave her power of attorney in the assessee’s name for sale of immovable property on her behalf. Subsequently an amount of Rs.17,20,000/- was received as advance against the sale of the immovable property but due to some dispute, the deal could not mature and the money was returned back. The Assessing Officer many time asked the assessee to furnish the relevant documentary evidence and also to produce the alleged buyer of the property, in response to which, though the assessee furnished copy of the power of attorney given to her, by her mother and agreement to sell, however, failed to furnish either the complete address of the alleged buyer Smt. Rama or to produce her for verification, therefore ultimately the Assessing Officer made an addition of Rs.17,20,000/- as assessee’s income from undisclosed sources for the relevant assessment year. The assessee challenged the said addition before the Ld. CIT(A), who partly affirmed the said addition of Rs.11,42,270/- in place of Rs.17,20,000/- by holding as under: “Decision:- The assessee had deposited cash amounting to Rs.16,33,5000/- in State Bank of India account no. 30079317822 and had also received insurance commission of Rs 7646/- during the year ending 31-03-2009 which had not been declared for taxation. The assessee was asked to explain the source of Rs.17,20,000/-. It was explained by the assessee that an amount of Rs.17,20,000/- was received as advance against sale of immovable property but subsequently due to dispute the deal could not mature and the money was returned back. The assessee was asked by the AO to furnish relevant documentary evidence and reproduce the owner of property and the suspected buyer. In response the assessee furnished

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the copy of power of attorney given by her mother Smt Vijay Kumari and an agreement to sell with suspected buyer Smt. Rama w/o Shri Vijay Kumar Kumar R/o Chehrata, Amritsar but failed to furnish either the complete address of the suspected buyer Smt. Rama or to produce her for verification despite several reminders given by the AO. The AO then recorded the statement of Smt. Vijay Kumari, the mother of the assessee who had authorized her daughter, the assessee, through power of attorney to sell the residential property. Therefore the assessee entered into an agreement to sell with Smt Rama w/o Sh Vijay Kumar and it was claimed by the assessee that an amount of Rs 17,20,000/- was received as advance against the sale of immovable property in cash. On being asked about the complete address of Smt. Rama, the suspected buyer, it was stated that she does not know her complete address. Further the assessee had claimed to have returned the advance money to Smt. Rama in cash on different dates but stated that she does not know her complete address. The assessee was also asked to furnish complete address of the property dealer involved if any, the complete address of the witness and also the vender but the assessee again and again failed to furnish the complete address of the suspected buyer, property dealer and witness. The AO then issued summons u/s 131 to Smt. Rama w/o Sh Vijay Kumar Chehrata, Amritsar through speed post and through notice server of the Department, but the speed post returned unserved with the remark of the postal Department “not known, returned”. The notice server also reported that despite visiting Chehrata, Amritsar and making enquiry the whereabouts of this lady could not be found. Thus the identity and creditworthiness of Smt. Rama and the genuineness of the transactions claimed could not be established. Therefore since the whereabouts of Smt Rama w/o Sh Vijay Kumar could not be traced by the notice server or the Postal Department, and nor did the assessee produce Smt Rama w/o Sh Vijay Kumar before the AO despite several opportunity given by the AO in the assessment proceedings, and the assessee again and again failed to furnish the complete address of the property dealer and witness to the agreement to sell and the cancellation agreement, the AO rightly dismissed the version of the assessee of having received cash amount of Rs 17,20,000/- against sale of property.

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The peak deposit in the PNB is Rs 10,00,000/- on 21-08- 2008. This peak stands explained out of cash withdrawn from State Bank of India on 19-08-2008 and 21-08-2008 and deposited in Punjab National Bank. However, the peak deposit in State Bank of India is Rs 11,92,270/- on 09-08-2008. The opening cash in hand as on 07- 04-2008 in the cash flow statement submitted by the appellant for the F Y 2008-09 is Rs 102,270/-. The source of income of the assessee is salary and commission income and the returned income of A Y 2009-10 is Rs 146,230/-. Considering the returned income of the assessee in A Y 2009- 10, i.e. 12,180/- PM, not much monthly savings are expected therefrom. Therefore the appellant is allowed the benefit of opening cash in hand of only Rs 50,000/- to the assessee and not Rs. 1,02,270/. Therefore the peak credit of Rs (11,92,270 - 50,000) = 11,42,270/- only remains unexplained and the addition of Rs 17,20,000/- is reduced to and confirmed at Rs.11,42,270/-. The ground of appeal no. 5 is against the charging of interest u/s 234A, 234B and 234C. The charging of interest under these sections is mandatory but not consequential in nature and the AO is directed to recomputed the interest under these sections.” 3. The assessee challenged the action of the Ld. CIT(A) before us. 4. At the outset, it is observed that the assessee has filed additional evidence in the form of affidavit of buyer and also moved an application for filing of additional evidence. It was contended by the assessee’s counsel that in the agreement to sell, complete address of the buyer has not been mentioned as the agreement was executed through a dealer. Though the assessee on the earlier stages, tried her level best to produce the buyer namely Smt. Rama, however due to non-availability of the complete address, was unable to produce the said buyer, on non-appearance of whom, the addition has been made by the Assessing Officer and sustained by the Ld. CIT(A). We realized that in the agreement to sell (page No.29 of PB) the complete

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address of the buyer Smt. Rama has not been mentioned and before us the assessee while relying upon other documents such as power of attorney, the agreement to sell, cancellation deed, copy of saving bank accounts in PNB and State Bank of India and copy of cash flow statement, also filed the affidavit of the buyer Smt. Rama. Though there is in-ordinate delay in producing the additional evidence, however, in our considered view, very much relevant for the real and proper adjudication of the dispute herein. Hence, we feel it appropriate to set-aside the orders passed by the authorities below and to direct the Assessing Officer to examine the documents including the affidavit of the buyer as well buyer in person. Production of Smt. Rama (alleged buyer) before the Assessing Officer shall be the responsibility of the assessee and in case of failure to produce the said lady, then the Revenue Department shall at liberty to draw the adverse inference, if any and the assessee shall suffer the consequences. Resultantly, the orders passed by the authorities below are set aside and the case is remanded to the file of the Assessing Officer to decide afresh while taking into consideration the documents including the affidavit of the buyer, submitted by the assessee and while examining the alleged buyer Mrs. Rama.

Order pronounced in open court on 06.08.2019.

Sd/- Sd/- (VIKRAM SINGH YADAV) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 06.08.2019 /PK/ Ps.

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Copy of the order forwarded to: (1) Smt. Shalini Sharma, H.No.285, Prem Nagar, Mirankot Chowk, Opp. Central Jail, Airport Road, Amritsar (2) The ITO, Ward-5(5), Amritsar (3) The CIT(A)-2, Amritsar (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order