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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. N.S.SAINI & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.S.SAINI, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.645(Asr)/2018 Assessment Year:2011-12
Raghu Raj Chethley, Vs. Income Tax Officer, 139-142, Main Bazar, Ward-2, Moga. Moga [PAN:ABYPC 2989H ] (Appellant/Assessee) (Respondent)
S.A.No.02(Asr)/2019 (Arising out of ITA No.645(Asr)/2018) Assessment Year:2011-12
Raghu Raj Chethley, Vs. Income Tax Officer, 139-142, Main Bazar, Ward-2, Moga. Moga [PAN:ABYPC 2989H ] (Appellant/Assessee) (Respondent) Appellant by: Sh. Y.K.Sud (Ld. CA) Respondent by: Smt. Ratinder Kaur (Ld. DR) Date of hearing: 20.02.2019 Date of pronouncement: 22.03.2019
ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Assessee (hereinafter called as Appellant) against the order dated 24.10.2018 impugned herein, passed by the Ld. CIT(A)-3, Ludhiana u/s 250(6) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) whereby the Ld. CIT(A) upheld the assessment order passed u/s 147/143(3) of the Act.
The Appellant has raised the following grounds of appeal.
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“A. That the AO was not justified in initiating the reassessment proceedings u/s 147 of the Income Tax Act. (Not pressed)
B. That the CIT(A) was not justified in sustaining and addition of Rs.50 lacs made by the AO u/s 68 of the Income Tax Act. (Not pressed)
C. That both AO & CIT(A) failed to appreciate that there was no cash credit appearing in the books of accounts of the Appellant which could be treated as unexplained cash credit.
D. That even otherwise the CIT(A) was not justified to sustained the action of the AO of treating the agreement to sell as bogus agreement.
E. That the orders of AO & CIT(A) are against the law and facts of the case.
The brief facts of the case are that the Appellant claimed to be medical professional running an X-Ray clinic and also doing part time job in a hospital and had filed ITR for A.Y.2011-12 disclosing the amount of Rs.2,48,880/- from business. Lateron the case of the Appellant was re-opened u/s 147 of the Act, on the information that the Appellant had made cash deposits of Rs.36 lacs in the Bank Account of his wife Smt. Heather Chately bearing No.0200 1030 0079 70 maintained with HDFC Bank Ltd. Moga for the relevant assessment year 2011-12 . The Appellant in the assessment proceedings of his wife for the A.Y.2011-12, admitted the deposit of Rs.36 lacs, however reasoned that the Appellant had entered into an agreement dated 26.12.2010 for sale of immovable property situated at Mittal Road, Moga for
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Rs.1,05,00,000 with Sh. Harjit Singh S/o Sh. Kartar Singh Dhanoa R/o VPO Kokri Kalan, Distt. Moga through his attorney Mr. Manjit Singh Chahal S/o Sh. Ishar Singh Chahal R/o VPO Kokri Kalan, Distt. Moga and received Rs.50 lacs as earnest money in cash, out of which amount of Rs.36 lacs was deposited in the bank account of his wife Smt. Heather Chately. The said claim of the Appellant was considered by the Assessing Officer and the Appellant was called upon to produce the said purchaser Sh. Harjit Singh, but on the pretext that the said purchaser is residing at Canada, could not be produced for verification. The Assessing Officer summoned Sh. Manjit Singh Chahal (mediator of transaction) u/s 131 of the Act and recorded his statement qua transaction of property as claimed by the Appellant. While considering the statement of the mediator as well as facts and circumstances of the case, the Assessing Officer did not satisfy qua transactions claimed by the Appellant and added the amount of Rs.50 lacs in the income of the Appellant.
The Appellant challenged the assessment order before the Ld. CIT(A) who although given eight opportunities of being heard to the Appellant, however, the Appellant did not appear on each occasion and on some of the occasions i.e. 08.01.2018, 22.01.2018 and 06.09.2018 attended and filed submissions however sought adjournment and finally the Ld. CIT(A) on dated 24.10.2018 while issuing notice dated 04.10.2018 given a final opportunity to the Appellant by fixing the date of hearing on 24.10.2018. On the said date also the Appellant remained unattended thereafter in the constrained circumstances, the Ld. CIT(A) observed that from the sequence of events, it can be seen that neither the appellant nor his counsel attended the hearing on each occasion, although he has been issued notices
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for hearing on various dates, which have been duly served also. Further, it was also observed by the Ld. CIT(A) that as the appellant has not availed any of the opportunities allowed to him to represent the case therefore I (she) am (is) of the opinion that the appellant is not interested in pursuing the appeal matter and has nothing to say in the matter in addition to grounds of appeal taken by him. So, the appeal filed by the appellant is being disposed off ex-parte on the basis of material available on record without allowing any further opportunity of being heard to the appellant. The Ld. CIT(A) while considering the case of the Appellant on merits dismissed the appeal of the Appellant by observing that this is unbelievable that after a lapse of six years the agreement still holds good wherein the huge amount of Rs.50 lacs has been paid in advance. Further no legal proceedings were pending for recovery of this amount from the buyer. Further observed that the Appellant could have produced the witnesses present at the time of agreement, in support of its contention however no witnesses were produced for verification at the time of assessment proceedings in order to discharge its onus on the part of the Appellant that the transactions were genuine. Neither the affidavit of any witness with regard to payment of huge cash by the power of attorney holder of the buyer has been filed by the Appellant during the course of assessment proceedings. Apparently the genuineness of transactions of agreement and receipt of huge amount of 50 lacs by the Appellant as claimed has not been established by the Appellant during the course of assessment proceedings as well as appellate proceedings and the copy of agreement to sale presented and relied upon by the Appellant without incorporating evidence. The Appellant has also failed to adduce any documentary evidence in this regard and the Appellant also
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could not file any legal document in support of its contention of any family dispute due to which the property could not be registered as per the claim of the Appellant. The Appellant has not been able to file any documentary evidence in support of his contention that due to family dispute even after receipt of Rs.50 lacs, 6 years back as per the agreement, the property could not be registered and huge money of Rs.50 lacs kept lying with the Appellant without any charge of interest on the part of the buyer. Finally the Ld. CIT(A) dismissed the appeal of the Appellant.
On aggrieved the Appellant challenged the impugned order by filing the instant appeal and submitted that Appellant had entered into an agreement dated 26.12.2010 for the sale of immovable property situated at Mittal Road, Moga for Rs.1,05,00,000 with Sh. Harjit Singh through his attorney Mr. Manjit Singh Chahal and received Rs.50 lacs as earnest money in cash, out of which amount of Rs.36 lacs was deposited in the bank account of his wife Smt. Heather Chately and rest amount of Rs. 14,00000/- was deposited in his account therefore the deposits stands explained. The Ld. A.R. specifically emphasized that revenue department detected the amount of 36 lacs in the account of Appellant's wife and therefore the Revenue Department could have made the addition in her assessment only but at any stretch of imagination, the amount of Rs. 36,00,000/- cannot be added in the income of the Appellant.
Having heard the parties and perused the material available on record. We observe that the proceedings u/s 147 have also been initiated against the appellant's wife case, wherein while responding the notices u/s 148 dated 10.01.2014
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and 142(1) of the Act issued in the Appellant’s wife name, the Appellant responded on behalf of his wife by signing the replies himself. For the sake of brevity and ready reference the said replies are reproduced herein in below.
To The Income Tax Officer Ward-I, Moga
Ref: Your Notice U/s 148 dated 10.01.2014 in the case of Mrs. Heather Chathley, Moga for the. Ay 2011 -12
Sir, With due respect and in reference to your above referred letter it is submitted
That the Appellant is a foreign national having No PAN. The copies of the passport enclosed herewith for your perusal. 2. That the Appellant is a trained nurse and whenever she came to India she gets Rs. 10000/- for towards her services to her husbands hospital. 3. That the transactions of Rs. 3600000/- as mentioned in your letter are cash deposited by the husband of the Appellant, which he has received as advance against his property from Mr. Manjit Singh Chahal S/o Ishar Singh Chahal R/o VPO Kokri Kalan, District Moga. The evidence of the transactions may be produced if required.
Yours Faithfully Sd/- (R.R. Chatley) Husband of Heather Chatley
To The Income Tax Officer Ward-I, Moga
Ref: Your Notice U/s 142(l)in the case of Mrs. Heather Chathley, Moga for the Ay 2011-12
Sir,
With due respect and in reference to your above referred letter it is submitted
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That the Appellant has already submitted in her previous reply that she is a foreign national married to an Indian citizen. She has no source of income in India for which she is assessed in india. She is not having any PAN.
That during the AY 2011-12 she opened a bank account with her husband Mr. Raghu Chatley in HDFC Bank Moga. Her husband Mr. Raghu Chatley deposited a sum of Rs. 3600000/- during the AY 2011-12 out of the proceeds of agreement to sell his property. A declaration form of Mr. Raghu Chatley is attached herewith for your perusal.
That as per the agreement as referred in para 2 above Mr. Raghu Chatley entered into an agreement to sell his property and received Rs. 5000000/- from Mr. Manjit Singh Chahal S/o Ishar Singh, VPO Kokri Kalan, Tehsil & Distt Moga. Mr. Manjit Singh entered into such agreement on behalf of Haijit Singh S/o Kartar Singh resident of VPO Kokri Kalan, Distt Moga, presently residing at 79 Middleton Avenue, Greenford Middlesex UB6 8BG United Kingdom.
Mr. Manjit Singh Chahal, given such amount of Rs. 50.00 Lacs to Mr. Raghu Chatley out of the proceeds of sale of agricultural land which belongs to Mr. Haijit Singh, Indeijit Singh and Mr. Chahal as their Attorney.
The copies of agreement to sale, GPA, Jamabandi and Sale deed of land and an affidavit of Mr. Manjit Singh Chahal are enclosed herewith for your perusal.
That a copy of a certificate from Notary Public Adv. Kewal Krishan Gupta, with whom the agreement to sale is registered is also enclosed herewith.
That keeping in view of the above it is evident that the deposit of Rs. 3600000/- in the Ay 2011-12 does not belong to the Appellant but of her husband. The source of such deposit and the source of the source is duly explained along with all evidences relevant for you for the assessment purpose. In this regard you are requested to do the needful and oblige.
It your goodself require any other information, kindly do the needful.
Yours Faithfully. Sd/-
(R.R. Chatley) Husband of Heather Chatley.
6.1 In the aforesaid replies, the Appellant in his wife's assessment proceedings before the assessing officer has admitted that the Appellant's wife is a foreign national having no PAN and is a trained nurse and whenever she came to India she
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gets Rs. 10000/- for towards her services to her husband's hospital. That the transactions of Rs. 3600000/- as mentioned in your letter are cash deposited by the husband of the Assessee, which he has received as advance against his property from Mr. Manjit Singh Chahal S/o Ishar Singh Chahal R/o VPO Kokri Kalan, District Moga. That during the AY 2011-12 she opened a bank account with her husband Mr. Raghu Chatley in HDFC Bank Moga. Her husband Mr. Raghu Chatley deposited a sum of Rs. 3600000/- during the AY 2011-12 out of the proceeds of agreement to sell his property. A declaration from Mr. Raghu Chatley is attached herewith for your perusal. That as per the agreement as referred in para 2 above Mr. Raghu Chatley entered into an agreement to sell his property and received Rs. 5000000/- from Mr. Manjit Singh Chahal S/o Ishar Singh, VPO Kokri Kalan, Tehsil & Distt Moga. Mr. Manjit Singh entered into such agreement on behalf of Haijit Singh S/o Kartar Singh resident of VPO Kokri Kalan, Distt Moga, presently residing at 79 Middleton Avenue, Greenford Middlesex UB6 8BG United Kingdom. Mr. Manjit Singh Chahal, given such amount of Rs. 50.00 Lacs to Mr. Raghu Chatley out of the proceeds of sale of agricultural land which belongs to Mr. Haijit Singh, Indeijit Singh and Mr. Chahal as their Attorney. The copies of agreement to sale, GPA, Jamabandi and Sale deed of land and an affidavit of Mr. Manjit Singh Chahal are enclosed herewith for your perusal. That a copy of a certificate from Notary Public Adv. Kewal Krishan Gupta, with whom the agreement to sale is registered is also enclosed herewith. Keeping in view of the above it is evident that the deposit of Rs. 3600000/- in the Ay 2011-12 does not belong to the Assessee but of her husband. The source of such deposit and the source of the source is duly explained along with all evidences relevant for you for the assessment purpose. In this regard you are requested to do the needful and oblige.
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From the replies, it clearly reflects that the appellant categorically taken the stand that amount of Rs.36 lacs for the Asst. Year: 2011-12, does not belong to the Appellant’s wife but belongs to the Appellant himself. From the categorical acceptance on the part of the Appellant, the argument to the effect that as the amount of Rs. 36 Lakhs was found in the accounts of the Appellant’s wife by the revenue department therefore could have been subjected to addition in the Appellant’s wife assessment only, is devoid of merits and hence rejected.
6.2 The order passed by the Ld. CIT(A) is ex-parte on non- appearance of the Appellant and in impugned order it was observed by the Ld. CIT(A) that from the above sequence of events it can be seen that neither the appellant nor his counsel attended the hearing on each occasion although he has been issued notices for hearing on various dates, which have been duly served also. It was further observed that appellant had also failed to file any written submissions in support of various grounds of appeal. Further as the appellant has not availed any of the opportunities allowed to him to represent the case, therefore in her opinion, the Appellant is not interested in pursuing the appeal matter and has to say nothing in the matter in addition to grounds of appeal taken by him.
However, we observe from the dates of hearing as mentioned in para No.4 of the impugned order, the Appellant on 20.12.2017, 22.01.2018 & 06.09.2018 attended the appellate proceedings and also filed written submissions and paper book, therefore the observations of the Ld. CIT(A) to the effect that the appellant has not availed any of the opportunities allowed to
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him to represent the case and also failed to file any written submissions in support of various grounds of appeal are contrary to the facts on record wherein it reflects that the Appellant had filed written submissions and paper book and it is also a fact that the Appellant had raised sole ground of appeal therefore filling of written submissions in support of various grounds of appeal as observed, did not arise. Hence, for the end of justice, we feel it appropriate to remand back this case to the file of the Ld. CIT(A) to decide afresh the appeal of the assesse while affording reasonable opportunities of being heard. It is suffice to say that the Appellant shall co-operate with the appellant proceedings and shall appear as and when required by the Ld. CIT(A) and in case of default the Ld. CIT(A) at liberty to dispose of the appeal on merit ex-parte. As the Ld. CIT(A) has passed the order ex- parte therefore, we are not adverting to the other grounds/issues raised in the appeal and the Ld. CIT(A) shall decide the appeal without being influenced by any of the observations made above.
6.3 We clarify that the Appellant did not raise the grounds No.1 & 2 for want of assessment order of his wife, reasons recorded u/s 147 and other relevant documents thereto, as we have remanded the case to the file of Ld. CIT(A) for decision afresh therefore the Appellant shall be at liberty to agitate the original ground of appeal as raised earlier before the Ld. CIT(A).
S.A.No.02(Asr)/2019 As we have set aside the order impugned herein and remanded this case to the file of ld. CIT(A) for decision afresh, hence the Stay Application become infructuous and needs no adjudication.
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In the result, the appeal filed by the Appellant is allowed for statistical purposes. Order pronounced in the open Court on 22.03.2019.
Sd/- Sd/- (N.S.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22.03.2019 /PK/ Ps. Copy of the order forwarded to: (1) Raghu Raj Chethley, 139-142, Main Bazar, Moga (2) The Income Tax Officer, Ward-2, Moga (3) The CIT(A)-3, Ludhiana (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order