DALJIT KAUR,HOSHIARPUR vs. THE INCOME TAX OFFICER, HOSHIARPUR

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. No. 96/Asr/2017 Assessment Year: 2011-12

Daljit Kaur w/o Tilak Raj, vs. The Income Tax Officer, c/o Sher-E-Punjab Resorts, Ward-1, Hoshiarpur VPO Padrana, Teh. Garhsankar, Distt. Hoshiarpur [PAN: BMCPK 7540J] (Appellant) (Respondent)

Appellant by : Sh. Sudarshan Kapoor (Adv.) Respondent by: Sh. Charan Dass (D.R.) Date of Hearing: 29.03.2019 Date of Pronouncement: 04.06.2019

ORDER Per Sanjay Arora, AM: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-1, Jalandhar ('CIT(A)' for short) dated 13.01.2017, dismissing the assessee’s appeal contesting her assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) dated 05.3.2014 for the Assessment Year (AY) 2011-12.

2 ITA No. 96/Asr/2017 (AY 2011-12) Daljit Kaur v. ITO Hoshiarpur, vide sale deed dated 10.12.2010 for a consideration of Rs.121.72 lacs, paying another Rs.20.78 lacs toward crockery/utensils, furniture, ACs, etc., i.e., at a total cost of Rs.142.50 lacs. The entire payment was made from the NRE (Non- Resident External) account (with Axis Bank) of her husband, Sh. Tilak Raj, also a NRI. The issue arising is the difference in the stamp duty suffered and paid on the said transaction of purchase of immovable property. The assessee claims to have paid it at a total of Rs.4,05,500/-, as under: (Amount in Rs.) (a) Stamp duty : 3,65,500/- (b) Registration charges : 30,000/- (c) Other miscellaneous expenses : 10,000/-

The computerized assessment of the stamp duty was at Rs.7,30,320, i.e., the half of which is Rs. 3,65,160, so that the difference was regarded as paid out of unaccounted sources. In the view of the Revenue, the assessee had not explained the source for any sum, so that a sum of Rs. 7,40,320, i.e., inclusive of miscellaneous expenditure at Rs. 10,000/-, was deemed as her undisclosed income by way of unexplained investment, i.e., as to its’ source. Aggrieved, the assessee is in second appeal.

‘13. The Assessing Officer has also produced a certificate given by the Sub Registrar, Garhshankar stating that the total payment made by the assessee was Rs.3,95,540 /- as above. The assessee has produced the original during the course of hearing. The Assessing Officer has also vide his letter dated 05.12.2016 stated that he has no objection if the addition is restricted to Rs.3,95,540/- with subject to verification of the authenticity of the certificate. During the course of hearing, the assessee stated that stamp duty was paid out of funds withdrawn from the account of her husband Sh. Tilak Raj, with Axis Bank, Banga Branch.

3 ITA No. 96/Asr/2017 (AY 2011-12) Daljit Kaur v. ITO However, it can be seen that on the same day of withdrawal of Rs.6.00 lakh the assessee herself has deposited Rs.2,00,000/- in the same bank account. This transaction therefore leaves much in doubt. Why would any person during normal course of business deposit Rs.2,00,000/- in cash in a bank account and then withdraw Rs.6,00,000/- on the same day and use Rs.3.95/- lakh out of it for payment of stamp duty and other charges. This transaction defines (*) logic, and I see no reason to accept the explanation of the assessee, and no reason to interfere in the order of the Assessing Officer.’ [(*) defies]

There is a withdrawal of Rs.6 lacs in the bank account of Sh. Tilak Raj on 10.12.2010 (i.e., the date of registration of the sale deed), as well as a deposit of Rs.2 lacs on the same day, and which is the stated source of the impugned payment (PB pg. 21). The entire purchase consideration of Rs.142.50 lacs, satisfactorily explained, is from the bank account of Sh. Tilak Raj. How, then, could the assessee’s explanation of the source, i.e., to the extent of Rs.4 lacs, one wonders, be not accepted? As regards the quantum of stamp duty, it stands explained that while the stamp duty at the normal rate works to Rs. 7,30,320, as a measure of incentive by the State Government, a rebate of 50% is allowed where the sale deed to be registered is in the favour of a female, and which explains the reduced rate of duty. The stamp duty endorsement on the back side of the sale deed – which is on stamp papers for Rs.3.65 lacs, at Rs. 7,30,320/-, has been, on application, certified by the Sub-Registrar to be incorrect, and that the stamp duty paid is only Rs. 3,65,160/- (PB pgs. 17 – 20), which in fact stands accepted even by the Assessing Officer (AO) in the remand proceedings. No case for the impugned addition, to any extent, is made out. The addition, sustained at the impugned sum of Rs.7.30 lacs, is accordingly directed for deletion. I decide accordingly.

4 ITA No. 96/Asr/2017 (AY 2011-12) Daljit Kaur v. ITO assessee’s explanation thereof as being the cash withdrawal of Rs.12 lacs by her from the said account on 14.9.2010, was not accepted by the AO as the assessee had earlier, i.e., vide letter dated 15.01.2014, stated the cash, withdrawn thus, as given to her relatives on credit. The addition stands confirmed in first appeal; the ld. CIT(A) holding as under: ‘16. During the course of appellate proceedings the assessee reiterated what had already been submitted before the Assessing Officer, that this deposit was out of Rs.12,00,000/- withdrawn from her account on 14.09.2010. It can be seen from the copy of the cash flow statement filed by the assessee on 17.05.2016 that after the said withdrawal of Rs.12,00,000/- on 14.09.2010, the assessee has made several round figure large withdrawals and deposits during the period from 14.09.2010 to 17.01.2011. When the assessee already had cash in hand of Rs.5.00 lakh on 01.10.2010, she again withdrew a sum of Rs.7.00 lakh on 07.12.2010. She deposited Rs.7.00 lakh again on 05.01.2011 and immediately withdrew Rs.7,50,000/- on 13.01.2011 to spend on renovation, even though she purportedly had a cash in hand of Rs.5.00 lakh. The story of the assessee therefore regarding the availability of Rs.5.00 lakh to deposit on 17.01.2011 out of a sum withdrawn four months earlier is difficult to digest. Further during the final hearing on 11.01.2017 the assessee came up with another contention that she had brought a sum of 5000 Euros from Portugal twice while visiting India on 01.04.10 and 14.09.2010. Thus, with the conversion rate of Rs.70 per euro she had with her an amount of Rs.7,00,000/- In support of this statement the assessee has not produced any documents. This is also the first time that any mention of Euros brought to India has been made by the assessee either in assessment or appellate proceedings. No source of the same has been indicated by the assessee.

5 ITA No. 96/Asr/2017 (AY 2011-12) Daljit Kaur v. ITO cash with her. 1 therefore see no force in the arguments of the assessee and no reason to interfere in the order of the assessing officer.’

Aggrieved, the assessee is in second appeal.

6 ITA No. 96/Asr/2017 (AY 2011-12) Daljit Kaur v. ITO assessee and her husband are, as apparent, wealthy NRIs, having purchased property worth Rs.150 lacs during the year. The assessee is not maintaining any books of account. The stated purpose of the cash withdrawals, made in lacs of rupees, rendered after three years, can, under the circumstances, only be regarded as tentative. Out of the total withdrawal of Rs. 26.50 lacs (i.e., during the year up to the date of the relevant cash withdrawal), only Rs.1.50 lacs is for air tickets. How could then it be said that the balance is wholly consumed? The cash withdrawals and deposits are during the same year, indicating that the same may be for some proposal/s, which may not have materialized or shelved or cost the assessee a lesser amount than that anticipated, so that the balance came to be deposited in the bank. For example, expenditure likely to be incurred during travel; on functions, etc. Then, it could be that the cash given to relatives, stated to be a temporary accommodation, is returned back. It is normal for people to seek help from cash-rich relatives. The couple does not apparently have any other source of income in India. Under the circumstances, an adverse influence, in my view, could be drawn only where there is some definite information as to the cash spent on a particular expenditure, asset, etc. The Revenue, to make out a case, ought to have made enquiry into such expenditure, viz. on renovation – accepted at the stated amount of Rs.7.50 lacs; the related expenditure on travel, function/s, living expenses, etc. (refer pg. 5 of the assessment order), which has not been. In its’ absence, i.e., without clarity on facts, it is merely doubting the assessee’s explanation, which is in the realm of a possibility, considering the propensity of the people to withdraw cash and keep it in hand for exigencies, particularly where not using instruments like debit or credit cards. This tendency is more pronounced in India, particularly its’ country side, which is notorious for insistence on legal tender as the mode of payment. As explained by the Apex Court in Saroj Aggarwal v. CIT [1985] 156

7 ITA No. 96/Asr/2017 (AY 2011-12) Daljit Kaur v. ITO ITR 497 (SC), the facts must be viewed in their natural perspective, having regard to the compulsion of the circumstances of a case. Further, where it is possible to draw two inferences from the facts and where there is no evidence of any dishonest or improper motive on the part of the assessee, it would be just and equitable to draw such inference in such a manner that would lead to equity and justice. Too hyper-technical or legalistic approach should be avoided in looking at a provision which must be equitably interpreted and justly administered. No case for addition is in my opinion made out. The addition is, accordingly, directed for deletion.