SH. KAMALDEEP SINGH VIRK,MOHALI vs. ITO, W-6(2), MOHALI

आदेश/ORDER

The present appeal has been filed by the assessee wherein the correctness of the order dated 31.07.2018 of CIT(A)-2, Chandigarh is assailed on various grounds.

ITA 1080/CHD/2018 A.Y. 2010-11 Page 2 of 19

only ground which remains for adjudication is extracted

he reunder :

“2. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs.43,70,000/- made on account for cash deposits in Bank account in utter disregard of the explanations rendered which is arbitrary and unjustified.”

facts as noticed and encapsulate by the CIT(A) in para 7 and

7.1 of the order. Inviting attention to the arguments advanced

on behalf of the assessee, which have been extracted in para

7.2, the ld. AR placing heavy reliance thereupon submitted

that these arguments are relied upon in the present

proceedings also. Referring to the relevant pages of the Paper

Book available on record which we re relied upon before the

CIT(A) also, it was submitted that these have been discarded

by the tax authorities merely on presumptions and

suspicions.

3.1 In the said background, inviting attention to the findings

arrived at by the CIT(A) in para 7.3 of the order, it was his

submission that the said conclusion based on suspicions is

even otherwise contrary to facts and law. Carrying the Bench

through the relevant submissions, findings and the

conclusions, ld. AR submitted that the only issue which was

required to be addressed by the assessee was the source of

the deposits found reflected in his account. The assessee, it

ITA 1080/CHD/2018 A.Y. 2010-11 Page 3 of 19

was submitted, had successfully explained deposits from Shri

Jarnail Singh a close friend of his father. This claim was

demonstrated by supporting evidences which had been

accepted in part. By placing the evidences it was submitted

the onus place d on the assessee stood discharged.

Addressing the facts, it was argued that there is no dispute

that the funds to the said extent were available with Shri

Jarnail Singh as a re sult of his land acquired on 09.10.2009.

The source was stated to be not doubted. It was also his

submission that the fact that cash withdrawals were made to

the tune of Rs. 75 lacs by Shri Jarnail Singh on 12.10.2009

was also not doubted. Paper Book page 20 was referred to

which fact, it was submitted, has not been disputed by the

Revenue and is also an admitted fact on record. Referring to the

consistent arguments advanced, it was submitted, the assessee

has also explained that his father was a close friend of Shri

Jarnail Singh. By the time the assessee was being questioned on

it, Shri Jarnail Singh had expired. Evidence to this effect, it was

stated, is available on record. The fact of advance of amounts by

Shri Jarnail Singh has been admitted by Shri Jarnail Singh’s

daughter on an Affidavit. The money was advanced to the

assessee for investment and insurance purposes to a friend’s

son who was engaged in Banking and investment related

activities. It was submitted Shri Jarnail Singh on account of

ITA 1080/CHD/2018 A.Y. 2010-11 Page 4 of 19

the health related problems needed life insurance cover. The

assessee has explained that from the stated withdrawal in

cash by Shri Jarnail Singh an amount of Rs. 31 lacs was

advanced in cash and it was deposited on 27.10.2009 by the

assessee in the name of Shri Jarnail Singh. It was submitted

that the life insurance cover is person specific on account of

which fact, it was deposited in the name of Shri Jarnail Singh

and the flow of money from the same source has been

accepted by the department.

3.2 Referring to the record, it was submitted that Shri

Jarnail Singh and his father Mr. Gurdeep Singh Virk had very

close cordial family relations over the years. This fact has

consistently been argued before the tax authorities and has

not been upset by the Revenue. The assessee be ing son of a

close friend of Shri Jarnail Singh and was also engaged in the

banking sector was entrusted with the funds to be partly

deposited for Life Insurance cover and the remaining amount

of Rs. 43,70,000/- was to be invested in the share market. It

was his submission that it is a matter of fact that during this

period, share market was performing well and as and whe n

there were any profits, the amounts were handed over to Shri

Jarnail Singh. This fact, it was submitted, has been accepted

by the sole surviving child of Shri Jarnail Singh Smt. Tejinder

Kaur. It was submitted that though the assessee is only

ITA 1080/CHD/2018 A.Y. 2010-11 Page 5 of 19

required to address the source which stands established, the

assessee, it was argued on the basis of the Affidavit of the

sole surviving child of Shri Jarnail Singh could also establish

that profits as and when due were paid to Shri Jarnail Singh.

It had also been explained though not required under law that

ultimately, there was a loss of about Rs. 39 lacs odd. The

assessee's father being a close friend and feeling morally

bound, returned part of the funds during the life time of Shri

Jarnail Singh. Evidence to the said effect, it was submitted,

has been placed on record by the assessee. Referring to Paper

Book page 26 it was his submission that an amount of Rs. 3

lacs odd was returned after withdrawal on 08.06.2012 and an

amount of Rs. 7 lacs odd was returned from the cash

available at hand with Shri G.S.Virk who was a pension

holder having his own independent income. It was his

submission that it is not a case whether there were any

counter claims of Shri Jarnail Singh pending with the

assessee. The only issue for consideration was the

source /availability of funds amounting to Rs. 43,70,000/-

with the assessee.

3.3 It was his submission that this money like Rs. 31 lakh

deposited in Insurance in the name of Shri Jarnail Singh was

also received in cash from Shri Jarnail Singh. The assessee

acting in good faith due to the close family relations

ITA 1080/CHD/2018 A.Y. 2010-11 Page 6 of 19

deposited the funds in his India Bulls account for

transactions in Mutual Funds etc. This act of good faith was

ne ver questioned by Shri Jarnail Singh or his sole surviving

daughter Ms. Te jinder Kaur. It was his submission that when

the department questioned the assessee on 25.03.2017, Shri

Jarnail Singh was no longer alive. This fact, it was

submitted, is evident from Paper Book page 35 which contains

the Death Certificate of Shri Jarnail Singh who expired on

31.08.2012. In these circumstances, it was argued the only

evidence which the assessee could rely upon was the Affidavit

of the sole surviving child of Shri Jarnail Singh i.e. Ms.

Tejinder Kaur, copy of which is available at page 9 of the

Paper Book. It was his submission that the affidavit of Ms.

Tejinder Kaur, daughter of Shri Jarnail Singh is dated

21.08.2015 and is a document which is much before the

issuance of notice by the AO on 25.03.2017. In these

circumstances, it was his submission that it cannot be said to

be specifically created for this purpose and cannot be set

aside without assigning any reasons. The contents of the

affidavit, it was submitted, have not been upset. No effort, it

was submitted, to even examine the said deponent was made

by the tax authorities. It was submitted that the marriage of

the lady was infact fixed by the efforts of Shri G.S.Virk. The

close family relations between the two families is consistently

ITA 1080/CHD/2018 A.Y. 2010-11 Page 7 of 19

argued. In the facts which have not been upset, it was his

submission that no addition was warranted either on facts or

law.

impugned order drew specific attention to para 7.3 of the

order. Relying on the same it was submitted that the addition

deserves to be maintained. Alternately, it was his prayer that

in case the affidavit of Shri Jarnail Singh’s daughter Smt.

Tejinder Kaur is to be considered, then the AO may be

directed to carry out an enquiry. The affidavit, it was

submitted at this stage may not be accepted.

available on record. It has been available to the tax

authorities all along. The affidavit is dated 21.08.2015. The

assessment proceedings after the issuance of notice u/s 148

for the transactions pertaining to 2012 commenced on

25.03.2017. Since the affidavit was available to the AO as

well as the CIT(A), the tax authorities had ample opportunity

to either call for the said lady or rebut the evidences filed.

Thus, merely because it was argued that without assailing or

examining the contents of the affidavit, the assessee should

not be forced to go through the entire process. Some fact

should be on record to justify such a prayer. It was re-

iterated that the sole issue for consideration is the deposit of

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Rs. 43,70,000/- in India Bulls account of the assessee. The

assessee has consistently argued that these were funds

available to the assessee from Shri Jarnail Singh a close

family friend. The availability of funds with Shri Jarnail

Singh has been demonstrated before the AO. It is not

doubted by the de partment. Since by the said time , Shri

Jarnail Singh was no longer alive, the evidence of part

payment back to Shri Jarnail Singh during his life time was a

fact argued before the AO. Affidavit of Shri Jarnail Singh’s

daughter accepting the fact that the profit as and when

required and due were received by her father was a statement

on an Affidavit available before the AO. In these

circumstances, it was his submission that remand back to the

AO for considering the very same evidences which the

assessee all along has placed before the AO in the original

round would be an act of harassment for the assessee. It was

his submission that none of the relevant facts i.e. Shri

Jarnail Singh was about 85 years old at the relevant point of

time; that he was a close friend of his father; that on account

of the trust and proximity of relationships, the fund in the

insurance was invested through the assessee. The investment

made in the India Bulls account was also on behalf of the

Shri Jarnail Singh from the funds made available to him and

the profit as and when was sought by Shri Jarnail Singh was

ITA 1080/CHD/2018 A.Y. 2010-11 Page 9 of 19

shared by the assessee. These facts were affirmed by Shri

Jarnail Singh’s daughter. In the circumstances it was his

submission that the assessee making investment for Shri

Jarnail Singh through his bank account alongwith all the

supportive evidences already available in the first round

before the AO should not be re manded back to the AO as

apart from these evidences the assessee can place no further

evidence. The evidence filed and already available on record,

it was submitted, was sufficient to explain the deposits and

the relief, it was argued has been denied purely on

suspicions.

on record. The facts in the present case have been summed up

in the impugned order by the ld. CIT(A) in the following

manner :

ITA 1080/CHD/2018 A.Y. 2010-11 Page 10 of 19 had verbally asked him to invest in shares on his behalf. The AO was of the opinion that the amount of Rs 43,70,000/- deposited in this bank account by the assessee in cash is his own income earned by him from some undisclosed sources and out of which the amount of Rs 40,00,000/- was invested by him in India Bulls Securities in his name. The amount has never been returned to Sh. Jarnail Singh. Had the amount of Rs 43,70,000/- received in cash from Sh. Jarnail Singh the investment in India Bulls Securities would have been made in the name of Sh. Jarnail Singh. . In view of these facts the amount of Rs 43,70,000/- was added to the income of the assessee on account of unexplained cash deposit in the bank account.”

6.1. The assessee's explanation on which heavy reliance has

been placed by the ld. AR which has been extracted by the ld.

Commissioner (Appeals) in para 7.2 is also extracted

he reunder for the sake of completeness :

7.2 On this issue AR of the assessee made written submission, which is reproduced below:

"While completing the assessment, the AO has observed that Mr Kamaldeep Singh deposited an amount of Rs.74,70,000 in Shares and Insurance. This fact was not denied before AO. However, AO has not appreciated the fact that this amount belonged to Mr Jarnail Singh aged 85 years. Mr. Gurdeep Singh Virk father of Mr. Kamaldeep Singh, a family friend of Mr Jarnail Singh and have very cordial relations with him. Since Mr Jarnail Singh was bed ridden and unable to move, he passed an amount of Rs. 74,70,000 after withdrawing Rs. 75 Lakh from his bank account. He received an amount of Rs. 1,07,92,968/- on account of acquisition of agricultural land owned by him. He deposited this amount of Rs.1,07,92,968/- in his bank account and paid an amount of Rs.74,70,000 to Mr Kamal Deep who was in banking employment and paid to him after withdrawing an amount of Rs. 75 lakh from his bank account. The entire amount was paid by Mr Jarnail Singh to Kamaldeep Singh in cash. Mr Kamaldeep deposited an amount of Rs.31 lakh in the name of Mr Jarnail Singh in Insurance and balance in shares. The motive of Mr Jarnail Singh in these deposits through Mr Kamaldeep was that he will get profit in Insurance and shares. Mr Jarnail Singh during the course of assessment proceeding accepted that he paid this amount to Mr Kamaldeep Singh and also received back by cheque an amount of Rs.31 lakh on account of Insurance. A copy of his confirmation is enclosed. This confirmation was duly filed with AO during the course of assessment. This receipt was witnessed by his daughter Tejinder Kaur and one Mr Baldev Singh.

ITA 1080/CHD/2018 A.Y. 2010-11 Page 11 of 19 Mr Kamaldeep deposited an amount of Rs.31 Lakh in his bank account and invested the same in the name of Mr Jarnail Singh in Kotak Life Insurance and balance Rs.43,70,000 in India Bulls for investment in shares. He was of the opinion that share market would increase his investment. Share market was at peak at that time. Mr Jarnail Singh was very old (85 years) and was unable to participate actively in the share market. Unfortunately, there was a loss in share market and Mr Jarnail Singh has to bear this loss. Mr Kamaldeep Singh was only an agent of Jarnail Singh acting on his behalf. As such this amount belonged to Mr Jarnail Singh. Mr.Kamaldeep Singh has nothing to own this amount or got any profit.However, Mr Gurdeep Singh Virk father of Mr Kamaldeep Singh on moral responsibility of his friend paid him an amount ofRs.10 lakh out of his pension account on 8.6.2012. After getting this amount and also Rs.31 lakh by cheque on account of Insurance, Mr Jarnail Singh issued receipt having cleared full and final amount due. The Assessing Officer has accepted having paid by Mr Jarnail Singh an amount of Rs.31 lakh on account of insurance which he received back by cheque from company. As this amount of Rs.31 lakh has been accepted by AO is included in the total amount of Rs.74,70,000 paid to Mr Kamaldeep in cash after withdrawing it from bank out ofRs.75 Lakh. Partial acceptance is without any basis. In other words he has accepted that Mr Jarnail Singh has paid the amount of Rs.74,70,000 which included Rs.31 Lakh as well.Kindly accept our plea as during assessment as well as before your goodself have done its duty to prove source. The assessee was required to satisfy AO: 1. Receiver to prove the identity of the giver. 2. Source and nature of amount so advanced. 3. Genuineness of the transaction We have satisfied and proved it with documentary evidence whereas AO has failed to prove any adverse point in our submission except that only 31 lakh was returned and other amount was not returned. In other words he has accepted having received the amount from Jarnail Singh and it has not been disputed. It is not required to verify whether amount returned or not. In our case we have returned Rs.10 lakh out of pension account to Mr jarnail Singh as full and final settlement besides Rs.31 lakh paid back by Insurance Company as Draft. An explanation prima facie reasonable cannot be rejected on caporicious or arbitrary grounds(RBN J Naidu Vs CIT29IYTR 194(Nag). The assessee is entitled to have evidence produced to be considered and an inference to be drawn there from. By merely rejecting a good explanation ignoring explanation is an error of5 law. (Bhagwati Prasad Misra Vs CIT 35 ITR 97."

6.2 Considering the facts, submissions and the evidences,

the addition made by the AO have been sustained by the ld.

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Commissioner (Appeals) which finding is under challenge in

the present proceedings. For the sake of completeness, the

said finding is extracted hereunder :

7.3 I have considered the submissions of the assessee and perused the assessment order. It is undisputed the assessee had deposited cash of Rs. 74,70,000/- in his bank account. Thus the primary onus was on the assessee to explain the source of this cash deposit. The source of this cash deposit is explained to be amounts received from Sh. Jarnail Singh. It is further stated that Sh. Jarnail Singh advanced him the impugned cash of Rs 43,70,000/- on 16.10.2009 and Rs. 31,00,000/- on 27.10.2009 which were deposited by him in his bank account on .the said dates. The copy of the bank account of Sh. Jarnail Singh showing a withdrawal of Rs 74,70,000/- on 12.10.2009 has been furnished. It is further noticed that the assessee has purchased the insurance policy in the name of Sh. Jarnail Singh of Rs 31,00,000/- and therefore the AO has accepted the source of this deposit of Rs 31,00,000/- on 27.10.2009 has explained. The cash deposit of Rs 43,70,000/- on 16.10.2009 was used to invest Rs 40,00,000/- in India Bulls Securities in the name of the assessee himself. It has been claimed by the assessee that this investment was made on behalf of Sh. Jarnail Singh but no evidence in this regard has been provided. It is also claimed that subsequently there was a loss of Rs 39,50,000/- in trading of shares but no evidence in this regard has also been provided. It is further stated that in view of the Rs 43,70,000/-received from Sh. Jarnail Singh the father of the assessee Sh. Gurdeep Singh Virk paid Rs 10,00,000/- to Sh Jarnail Singh on 08.06.2012. No evidence in this regard to show that any money was returned to Sh. Jarnail Singh and the said money was in lieu of the Rs. 43,70,000/- received from him by his son was provided. The affidavit of daughter of Shri Jarnail Singh, Smt. Tejinder Kaur has been provided which states that the said money was provided by her father to the assessee. It is further stated in the said affidavit that Sh. Kuldeep Singh regularly gave the earning of the share market to her father. None of the contentions in this affidavit are corroborate by any supporting evidence. Nothing has been placed on record to show that the assessee was returning to Sh. Tejinder Singh, the earnings from the stock market. Thus the veracity of this affidavit is not established. Under these circumstances the only evidence provided by the assessee to support the contention that the money was given by Sh. Tejinder Singh is the bank account of Sh. Tejinder Singh showing a withdrawal of Rs 75,00,000/- on 12.10.2009. This evidence cannot taken as satisfactory evidence to explain the source of cash deposit of Rs 43,70,000/- on 16.10.2009. The assessee deposited Rs 31,00,000/- on 27.10.2009 and purchased the insurance in the name Sh. Tejinder Singh out of this money. The AO has correctly taken the source of money as explained. However it has not been explained why the amount of RS 75,00,000/- withdrawn on 12.10.2009 by Sh. Jarnail Singh and claimed to have been given to the assessee was deposited on two different dates. Nothing has been brought on record to show that the investment in the shares through India Bulls Securities made in the name of assessee was on behalf of Sh. Jarnail Singh. The trading in shares would have resulted in profits and loss from time to time but no subsequent financial transaction between the

ITA 1080/CHD/2018 A.Y. 2010-11 Page 13 of 19 assessee and Sh Jarnail Singh is visible in the bank account which could indicate but the share transactions were being done on behalf of Sh. Jarnail Singh. The claim of payment of Rs 10,00,000/- by the father of the assessee to Sh. Jarnail Singh for settlement of account is unsubstantiated. The affidavit of Smt. Tejinder Kaur is also not reliable as being unsubstantiated. Thus in the facts and the circumstance of the case the assessee has failed to explain the source of cash deposit of Rs 43,70,000/-.in his bank account on 16.10.2009. The AO has correctly treated this amount as unexplained and added to the income of the assessee. Ground of appeal no. 2 is dismissed.”

6.3 When the argument as advanced before the CIT(A) in the

light of the finding of the AO is considered, it is seen that

before the AO also, the assessee has pleaded that there were

close family relations of the assessee’s father with Shri

Jarnail Singh, 85 years old gentle man. The availability of the

stated funds from unimpeachable sources, it is seen is a fact

available in the assessment order itself. These are evidenced

from un-numbered page 2 from the assessment order and are

reproduced hereunder again for the sake of completeness:

“2. During the year under consideration the assessee has made cash deposit of Rs. 43,70,000/- on 16.10.2009 and Rs. 31,00,000/- on 27.10.2009 in his bank account No. 56501 0037399 maintained with Kotak Mahindra Bank, Sector 8 Chandigarh. The assessee was required to explain the sources of the said cash deposit. In reply, it has been stated that one Sh Jarnail Singh advance him the impugned cash of Rs 43,70,000/- and Rs. 31,00,000/-totaling Rs 74,70,000/- for making investment in share market and in Life Insurance respectively on his behalf. It has been stated that the assessee invested Rs 31,00,416/- in Kotak Life Insurance in the name of Sh. Jarnail Singh and investment of Rs 40,00,000/- was made in India Bulls Securities in the name of the assessee himself. In order to confirm and verify the cash receipt of Rs 74,70,000/- from Sh. Jarnail Singh and the sources of cash with him. (Jarnail Singh), statement of the assessee Sh. Kamaldeep Singh Virk, was recorded on 05.09.2017. 2.1 In the statement recorded, it has been deposed that Sh. Jarnail Singh was assessee's family friend. Sh. Jarnail Singh received Rs 1.07,92,968/- on 09.10.2009 in lieu of his land acquired by The Collector Land Acquisition Urban Development. Punjab. Assessee stated that Sh. Jarnail Singh had given Rs 74,70,000/- to him for investment in Kotak Life Insurance in the name of Sh. Jarnail Singh and investment

ITA 1080/CHD/2018 A.Y. 2010-11 Page 14 of 19 in India Bulls Securities. Accordingly, he invested the amount received from Sh. Jarnail Singh in Kotak Life Insurance at Rs 31,00,416/- and India Bulls Securities 40,00,000/-. It has also been admitted that the amount of Rs 31,00,000/- invested in Kotak Life Insurance was returned to Sh. Jarnail Singh in December, 2011 through cheque. However, the investment of Rs 40,00,000/- made by him in India Bulls Security, in his own name (assessee) there was a loss of Rs. 39,50,000/- in trading of shares of different companies hence, the amount was never returned. The assessee was asked to furnish documentary evidence regarding having received the advance of Rs 43,70,000/- from Sh. Jarnail Sinyh. But the assessee failed to adduce any evidence in this regard except saying that Sh. Jarnail Singh had verbally asked him to invest in shares on his behalf. The submission made by the assessee is not acceptable on the facts of the case. No person, who-so-ever may be, will allow to make investment of his hard earned money in the name of another person and not in his name as well as allow to retain the same by another person. 2.2 The fact is that the amount of Rs 43,70,000/- deposited in his bank account by the assessee in cash is his own income earned by him from some undisclosed sources best known to him and out of which the amount of Rs.40,00,000/- was invested by him in India Bulls Securities in his name. The amount has never been returned to Sh. Jarnail Singh. Had the amount of Rs 43,70,000/- received in cash from Sh. Jarnail Singh, the investment in India Bulls Securities would have been made in the name of Sh. Jarnail Singh. In the circumstances, an addition of Rs 43,70,000/- is made to the income returned by the assessee on account of unexplained cash deposit in the bank account. Penalty proceedings u/s 271(l)(c) of the Income Tax Act, are being initiated separately for concealment of income.”

6.4 On a reading of the above, it is seen that consistently

the assessee has argued that the funds were sourced from the

funds available with Shri Jarnail Singh. The source of the

funds with Shri Jarnail Singh admittedly is impeccable as

these were received on 09.10.2009 from the Collector, Land

Acquisition, Urban Development, Punjab totaling to Rs.

1,07,92,968/-. It is a fact that the proceedings be fore the AO

started as a result of notice issue d u/s 148 dated 25.03.2017.

It is seen that for this purpose when the assessee was

required to justify the receipt of cash amounting to Rs.

74,70,000/- from Shri Jarnail Singh, the AO as per para 2 of

ITA 1080/CHD/2018 A.Y. 2010-11 Page 15 of 19

his order, as extracted herein above, is found to have

recorded the statement of Shri Kamal Deep Singh Virk i.e. the

assessee. It is seen that nothing adverse or contrary was

noticed by the AO. The AO after having recorded his

statement considering the further supporting evidences relied

upon before him, held in para 2.1 that in response to the

require ment of furnishing documentary evidences

demonstrating advance of Rs. 43,70,000/- from Shri Jarnail

Singh, “……… the assessee failed to adduce any evidence in this regard

except saying that Sh. Jarnail Singh had verbally asked him to invest in shares on his behalf. The submission made by the assessee is not acceptable on the facts of the case. No person, who-so-ever may be, will allow to make investment of his hard earned money in the name of another person and not in his name as well as allow to retain the same by another person. The said assertion and presumption is

contrary to record. The assessee has been entrusted with

even Rs. 31 lakh in cash which the assessee as required

acting on the oral direction of Shri Jarnail Singh purchased

an Insurance Policy. This transaction has been accepted and

not questioned. Thus, there was sufficient evidence on record

to show that the assessee and Shri Jarnail Singh did have

close relations so much so that Rs. 31 lakh was handed over

in cash without any collateral with oral instruction to the

assessee. Thus, the occasion to doubt the similar oral

ITA 1080/CHD/2018 A.Y. 2010-11 Page 16 of 19

direction of Shri Jarnail Singh confirmed by Shri Jarnail

Singh’s daughter on Affidavit, it appears has been discarded

on mere suspicion.

6.5 On a reading of the impugned order, it is seen that the

assessee again reiterated the facts in greater detail namely

that the amount of Rs. 31 lacs as well as Rs. 43 lacs were

received in cash. The ld. CIT(A) in para 7.3 has taken note of

the fact that there was an evidence of withdrawal of Rs.

74,70,000/- on 2.10.2009 from the copy of the bank account

of Shri Jarnail Singh. This finding is corroborated from Paper

Book page 20 of the compilation filed before the Bench which

has been shown to be available before the AO as well as the

CIT(A). In the facts of the present case, the tax authorities

were required to be addressed on the deposit of Rs.

43,70,000/- found deposited in assessee's bank account.

Close proximity with Shri Jarnail Singh stands established.

Oral instructions qua the investment of Rs. 31 lacs handed

over in cash stands accepted out of the cash withdrawal of

Rs. 74,70,000/- made by Shri Jarnail Singh on 12.10.2009.

Rs. 31 lakhs as per oral instructions stood deposited by

assessee in Insurance policy on 27.10.2009. The assessee as

it is not noticed, erred in depositing the Rs. 43,70,000/-

considering it to be convenient in his India Bulls Securities

where he maintained a D-MAT account, in the circumstances

ITA 1080/CHD/2018 A.Y. 2010-11 Page 17 of 19

stands adequately explained and addressed. These claims

have not been upset by any counter evidence or argument

except suspicions. Shri Jarnail Singh’s daughter Ms. T.Kaur

confirms it on Affidavit. In the facts of the present case,

admittedly the evidence of Shri Jarnail Singh cannot be taken

on record as he has expired much before the issuance of

notice as per copy of the Death Certificate available on

record. It is seen that Shri Jarnail Singh expired on

31.08.2012. In this background the affidavit of Ms. Tejinder

Kaur, daughter of Shri Jarnail Singh is available on record.

The contents of the affidavit are reproduced hereunder for the

sake of convenience :

AFFIDAVIT I, Tejinder Kaur D/o Late S. Jarnail Singh, W/o Capt. Harveer Singh, R/o House No. 41, Phase 3B-1, SAS Nagar Mohali, do hereby solemnly affirm and declare as under: - 1. That I am the only living child of my parents. 2. That PUDA had acquired the agricultural land of my father Late S. Jarnail Singh and given him a cheque No. 262243 dated 6.10.2009 amounting to Rs. 1,07,92,968/-. 3. He deposited this cheque in his S.B. A/c No. 27800100000840 in the Bank of Baroda, Phase-IX, Mohali. 4. That my father was a lever patient and under treatment at Fortis Hospital Mohali. Later on it was declared Lever Cancer. 5. That he withdrawn Rs. 75 Lakhs from his this S.B. A/c on 12/10/2009 through cheque No. 964972 and planned for his life Insurance. 6. That my father given Rs. 43,70,000/- on 16.1Q.2009 to Kamaldeep Singh son of S. Gurdeep Singh Virk R/o House No. 3091, Phase-VII, Mohali, being our close family friend. My father given Rs. 31.00 lakh on 27.10.2009 for the first premium of life insurance. 7. That my father advised Kamaldeep Singh to invest Rs. 43,70,000/- in the share market and do the business on his behalf.

ITA 1080/CHD/2018 A.Y. 2010-11 Page 18 of 19 8. That Kamaldeep Singh regularly and honestly gave the earning of share market to my father whenever required by my father. 9. Unfortunately share market decline. Hence the Kamaldeep Singh had returned the remaining all amount to my father. Now nothing is due towards Kamaldeep Singh S/o Gurdeep Singh Virk R/o House No. 3091, Phase-VII, Mohali. Sd/- DEPONENT TEJINDER KAUR

6.6 A perusal of the above shows that the said lady

reiterates the availability of funds in para 2 of the above

affidavit and in paras 5, 6 and 7 of the same, the assessee’s

explanation stands supported. The said affidavit has not been

upset by way of any argument, evidence or material. In these

circumstances, I find on a careful reading of the consistent

findings of the tax authorities that instead of addressing

evidences available on record, the tax authorities have made

the addition and sustained the addition on the grounds that

the consistent submission that Shri Jarnail Singh verbally

asked the assessee to invest is a fact supported only by the

assessee and not corroborated by Shri Jarnail Singh. The

fact that Shri Jarnail Singh who had been suffering from liver

cancer etc. was no longer alive, stands ignored. The sole

surviving child does not plead ignorance on facts and infact

corroborates the assessee's version by an affidavit dated

21.08.2015. The said Affidavit is not even attempted to be

upset by the Revenue. For reasons best known to the tax

authorities, it has been left unaddressed. In the facts as they

ITA 1080/CHD/2018 A.Y. 2010-11 Page 19 of 19

stand, I am of the view that the onus placed upon by the

assessee to explain the deposits in his bank account stands

satisfactorily discharged. The orders of the AO ignoring the

evidences on whims cannot be upheld. The insistence of the

tax authorities without upsetting the evidences available on

record cannot be accepted. I find that in the facts of the

present case without any effort on the part of the Revenue to

assail the contents of the affidavits, prayer for remand back

to the AO has no meaning. Accepting the explanation of the

assessee the addition for the reasons set out hereinabove in

detail is directed to be deleted.

Order pronounced in the Open Court on 26th Sept.,2019.

Sd/-

(�दवा �संह ) (DIVA SINGH) �या�यक सद�य/Judicial Member “Poonam” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6. आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar