SHRI SANJAY AGARWAL,UTTAR PRADESH vs. THE ACIT 3(1), BHOPAL

आदेश / O R D E R

PER KUL BHARAT, J.M: This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-2, Bhopal dated 6.1.2014 pertaining to the assessment year

2008-09. The assessee has raised following grounds of appeal: 1. That on the facts and in the circumstances of the case the impugned orders passed by the Ld. lower authorities are contrary to law, materially incorrect and unsustainable in law as well as on facts. All the finding and conclusions of the ld. lower authorities are also contrary to the material, opposed to the facts, equity and law. 2. That the ld. lower authorities have erred and were not justified in holding that the appellant is the owner of the cash which was found in the suitcase while travelling in train and thereby making addition of Rs.5,34,700/- u/s 68 of the Income Tax Act. 3. The arbitrary findings and conclusion drawn by the ld. lower authorities are grossly wrong and based upon assumption and presumption also opposed to the facts and law. Therefore the addition made by the ld. AO and sustained by the ld. CIT(A) may please be deleted. 4. That ld. lower authorities have erred and were not justified in not considering the submission and the decisions quoted by the appellant judiciously. 5. That the appellant craves leave to add amend or to modify any ground(s) on or before the date of hearing.

addition of Rs.5,34,700/- u/s 68 of the Income Tax Act,

1961 (hereinafter called as ‘The Act’). Briefly stated the

facts are that case of the assessee was reopened for

assessment and the assessment u/s 143(3) r.w.s. 147 of 2

the Act was framed vide order dated 30.12.2009. It is

noticed by the assessing officer that during a search by the

Railway police, the assessee was found in possession of a

sum of Rs.5,34,700/-. The explanation of the assessee in

respect of this sum belonged to his father-in-law, who was

also travelling in the same train, which he was carrying to

give as gift to his daughter i.e. wife of the assessee. The

A.O. did not accept this explanation and added this

amount in the income of the assessee. The assessee had

preferred an appeal before the Ld. CIT(A), who sustained

the addition. Ld. Counsel for the assessee submitted that

the assessee is a State Government employee working in

Janpath Panchayat. The assessee was found to be carrying

cash of Rs.5,34,700/- on 10.9.2007 while

travelling in train Revachal Express by

Government railway police. The cash was released

on the direction of the court. Ld. Counsel reiterated the

submissions as made in the written submissions. The

submissions of the assessee are as under:

SUBMISSIONS

b. The delivery of above cash amount was being made through father Shri Omprakash Jalan who was travelling in same train –Rewanchal Express. Since, he did not have a confirmed reservation; he handed over the money to his son-in-law Shri Sanjay Agrawal having confirmed birth.

c. The aforesaid amounts were debited in the books of accounts maintained by Shri Vikas Jalan. The following documents are being produced in support of his contention :- i. Capital account from audited books of ‘Khatu Shyam Enterprises’ PB 50 ii. Statement recorded u/s 131 of Shri Vikas Jalan, (PB 21-22) iii. Cash book of ‘Khatu Shyam Enterprises.’ (PB 69-80) iv. Affidavit from Shri Omprakash Jalan before the upper court, Khurai dated 10/09/07 (PB 63-64) d. Out of the total cash seized of Rs. 5,34,700/- only Rs. 9,700/- belong to assessee. His Statement were recorded by ITO(Investigation) Jabalpur, wherein the assessee has adequately and properly explained. (PB 163-172, specific reply to Q3 on PB 164)

b. The Cheque no 704216, dated 28.08.2007 amounting to Rs. 2,91,585/- was presented by the ‘Danish Grah Nirman Society’ in their bank account and it was cleared on 13th Aug. It is pertinent to note that 11 years back, the banking system took atleast 2 days to clear a cheque and thus, appellant being in custody from 10.09.07 till 12.09.07 (Friday to Sunday) cannot sign and get the cheque cleared from his account same day. The counterfoil of the deposit slip is also dated 11.09.07 which is enclosed on pg. no ….

c. Smt. Ekta Agrawal drew a sum of Rs. 3,00,000/- on 22.08.07 vide draft no 062016 from her account with the firm M/s Sitaram & Sons Siswa bazaar district Maharajaganj (U.P) and deposited the same in joint account with husband in State Bank of India, Arera 4

Colony, Bhopal. The copy of the draft enclosed on pg no…… proves that the withdrawal was done only for investment in bank.

Thus, the findings of ld CIT(A) that as per GRPF records, the appellant didnot even name his father-in-law who is allegedly travelling with him is notcorrect, since the appellant’s statement were recorded on 24.01.08, wherein heclaimed that his statement were taken forcefully. 5. Addition cannot be based on Suspicion: The ld only on the basis of general findings, without directing to any specific instances have drawn inference that the cash seized from the assessee was his unexplained money, but not cash gift received by wife. Like the allegation that earlier also there were gifts in the family, but they were done through bank accounts. The appellant take support from the landmark judgement – Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax [1954] 26 ITR 775 (SC) In which it was held –“that in making the assessment under section 23(3) he is not entitled to make a pure guess and make an assessment without reference to any evidence or any 5

material at all and there must be something more than bare suspicion to support the assessment under section 23(3). The rule of law on this subject has been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. CIT [1944] 12 393. In the instant case, the Tribunal violated certain fundamental rules of justice in reaching its conclusions.

and supported orders of the authorities below.

materials available on record and gone through the orders

of the authorities below. We find that both the authorities

below have not accepted the explanation given by the

assessee. The authorities have acted merely on suspicion.

On the contrary, the father-in-law of the assessee has

categorically owned up the money. The authorities below

without appreciating the evidences submitted by the

father-in-law of the assessee, proceeded to make addition

and confirmed the same. The Ld. Counsel for the assessee

has taken us through various documents demonstrating

that wife of the assessee was in process of purchasing a

property. It is also on record that father-in-law of the

assessee was having sufficient money to give such gift to

his daughter. Under the facts of the present case, we are of

the view that the assessing officer and the Ld. CIT(A) have

not considered the explanation of the assessee and have

proceeded merely on the basis of suspicion. Hence, the

A.O. is directed to delete this addition.

allowed. Order was pronounced in the open court on 21 .08.2018.

Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER

Indore; �दनांक Dated : 21/08/2018 VG/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order

Sr. Private Secretary, Indore