SH. HARVINDER SINGH LEGAL HEIR OF SH. CHAMKAUR SINGH,LUDHIANA vs. ITO, W-1, JAGRAON

आदेश/ORDER

Per Annapurna Gupta, Accountant Member: This appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-3, Ludhiana [(in short ‘CIT(A)’] dated 5.11.2018, passed u/s

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250(6) of the Income Tax Act, 1961 (hereinafter referred to

as ‘Act’), relating to assessment year 2010-11.

2 . N o n e a p p e a r e d o n b e h a l f o f t h e a s s e s s e e . D u e

n o t i c e o f h e a r i n g w a s i s s u e d o n 2 9 . 5 . 2 0 1 9 a n d s e r v e d

o n t h e a s s e s s e e . N o a p p l i c a t i o n s e e k i n g a d j o u r n m e n t

w a s f i l e d . I t a p p e a r s t h a t t h e a s s e s s e e i s n o t

i n t e r e s t e d i n p r o s e c u t i n g t h e a p p e a l . Th e r e f o r e , t h e

a p p e a l w a s p r o c e e d e d t o b e h e a r d w i t h a n d

a d j u d i c a t e d e x - p a r t e o n me r i t s .

3 . F r o m t h e o r d e r s o f t h e a u t h o r i t i e s b e l o w , t h e

f a c t s e m a n a t i n g a r e t h a t p r o c e e d i n g s u / s 1 4 7 o f t h e

A c t w e r e i n i t i a t e d o n t h e a s s e s s e e o n t h e i n f o r m a t i o n

r e c e i v e d f r o m D D I T( I n v e s t i g a t i o n ) - 3 , L u d h i a n a t h a t t h e

a s s e s s e e h a d d e p o s i t e d c a s h o f R s . 4 0 . 7 0 l a c s i n h i s

b a n k a c c o u n t m a i n t a i n e d w i t h O r i e n t a l B a n k o f

C o m m e r c e , J a g r a o n a n d R s . 2 9 , 4 5 , 5 0 0 / - i n t h e B a n k

o f I n d i a , L u d h i a n a . Th e a s s e s s e e w a s a s k e d t o e x p l a i n

t h e s o u r c e o f t h e s a m e . B u t t h e p r o c e e d i n g s r e m a i n e d

u n a t t e n d e d . T h e r e f o r e , i n t h e a b s e n c e o f a n y

e x p l a n a t i o n w i t h r e s p e c t t o t h e c a s h d e p o s i t s , t h e

e n t i r e d e p o s i t s i n t h e t w o b a n k a c c o u n t s a m o u n t i n g t o

R s . 6 4 , 1 5 , 5 0 0 / - w e r e t r e a t e d a s u n d i s c l o s e d i n c o me o f

3 ITA No163/Chd/2019 A.Y.2010-11

t h e a s s e s s e e a n d a d d e d b a c k t o t h e r e t u r n e d i n c o m e

a s u n e x p l a i n e d c a s h d e p o s i t s u / s 6 8 o f t h e A c t .

4 . T h e a s s e s s e e w e n t i n a p p e a l b e f o r e t h e L d . C I T( A )

a n d f i l e d e v i d e n c e s b e f o r e h i m a l o n g w i t h a p p l i c a t i o n

s e e k i n g a d m i s s i o n o f t h e s a me s t a t i n g t h a t i n v i e w o f

t h e s u d d e n d e m i s e o f h i s f a t h e r d u r i n g a s s e s s m e n t

p r o c e e d i n g s , t h e a s s e s s e e c o u l d n o t c o n c e n t r a t e a n d

f u r n i s h r e p l y a n d , t h e r e f o r e , a d d i t i o n a l e v i d e n c e s b e

a d m i t t e d a t t h e a p p e l l a t e s t a g e . Th e L d . C I T( A ) o n

c o n s i d e r i n g f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e f o u n d

m e r i t i n t h e a p p l i c a t i o n f i l e d b y t h e a s s e s s e e a n d

a d m i t t e d t h e a d d i t i o n a l e v i d e n c e f i l e d . Th e r e a f t e r o n

c o n s i d e r i n g t h e a d d i t i o n a l e v i d e n c e s , t h e L d . C I T( A )

f o u n d t h a t t h e d e p o s i t s w i t h t h e b a n k t o t h e e x t e n t o f

R s . 4 3 , 4 0 , 0 0 0 / - s t o o d e x p l a i n e d b y t h e a s s e s s e e a s

h a v i n g b e e n m a d e o u t o f c o n s i d e r a t i o n r e c e i v e d f r o m

s a l e o f f o u r p r o p e r t i e s o w n e d b y h i m . Th e L d . C I T( A )

f o u n d t h a t t h e a s s e s s e e h a d s u b s t a n t i a t e d t h e

e x p l a n a t i o n a l s o b y f i l i n g s a l e d e e d p e r t a i n i n g t o t h e

f o u r p r o p e r t i e s . H e , t h e r e f o r e , d e l e t e d t h e a d d i t i o n

m a d e t o t h e e x t e n t o f R s . 4 3 , 4 0 , 0 0 0 / - . Th e a d d i t i o n

m a d e o n a c c o u n t o f r e m a i n i n g c a s h d e p o s i t s w e r e

4 ITA No163/Chd/2019 A.Y.2010-11

u p h e l d b y h i m a s u n e x p l a i n e d i n t h e a b s e n c e o f r e l e v a n t e v i d e n c e .

5 . A g g r i e v e d b y t h i s o r d e r o f t h e C I T( A ) , t h e a s s e s s e e h a s c o m e u p i n a p p e a l b e f o r e u s , r a i s i n g t h e f o l l o w i n g g r o u n d s :

“ 1 . T h a t th e L d . Commissioner of Income Tax (Appeals) has erred both on facts and law while passing this order. 2 . That the Ld. Commissioner of Income Tax (Appeals), Ludhiana has erred in law and facts in sustaining the addition made by the learned assessing officer without any basis and on the basis of conjectures and surmises. 3 . That there was no reason to believe or any tangible material with regard to reopening of the case under section 148 and therefore the whole proceedings are void ab initio. 4 . That the Ld. Commissioner of Income Tax (Appeals) was not justified in invoking the provisions of section 68 of the Income Tax Act, 1961 and thereby making addition of Rs.19,90,000/- in respect of cash deposit in bank account. 5. That the authorities below did not appreciate that the provisions of section 68 are not at all applicable in this case, as the assessee admittedly is not maintaining any books of accounts. As such, the provisions of section 68 are not at all applicable and the very basis on which the addition was made is liable to be deleted. 6. That the Ld. Commissioner of Income Tax. (Appeals) has concluded the assessment without following the principle of natural justice

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is bad in law and the addition in respect of cash deposit in bank account is not giving the credit of peak theory. The basic idea behind the peak credit theory is to avoid double addition and to bring only the actual income of the assessee to suffer tax. 7. That the Ld. AO has failed to consider that the appellant deposited the cash in the bank against the self-withdrawal from the bank account and sale of Agriculture land. Bank Statement of the assessee shows that the cash was deposited against the corresponding withdrawals of the amount. 8. The Ld. Commissioner of Income Tax (Appeals) made the addition merely on estimate basis and the Ld. Assessing officer without bringing on record any material to show that the assessee has earned any income in excess of the amount disclosed in the return. 9. That the appellant craves to allow to add or to amend any ground of appeal before or at the time of hearing of appeal. 10. That it is prayed that the addition may kindly be deleted.” 6 . O n g o i n g t h r o u g h t h e g r o u n d s a b o v e , w e f i n d t h a t t h e a s s e s s e e h a s r a i s e d a l e g a l g r o u n d i n g r o u n d N o . 3 c h a l l e n g i n g t h e v a l i d i t y o f t h e a s s e s s m e n t f r a m e d u / s

1 4 8 o f t h e A c t . B e f o r e t h e L d . C I T( A ) , w e f i n d t h a t n o s u c h g r o u n d h a d b e e n r a i s e d b y t h e a s s e s s e e a n d , t h e r e f o r e , t h e L d . C I T( A ) h a d n o o c c a s i o n t o a d j u d i c a t e

t h e s a me . S i n c e i t i s a l e g a l g r o u n d c h a l l e n g i n g t h e v a l i d i t y o f t h e a s s e s s me n t f r a m e d i t s e l f , t h e s a m e

6 ITA No163/Chd/2019 A.Y.2010-11

n e e d s t o b e a d j u d i c a t e d f i r s t b e f o r e d e a l i n g w i t h t h e

m e r i t s o f t h e c a s e . F u r t h e r s i n c e t h e a s s e s s e e i s

u n r e p r e s e n t e d b e f o r e u s , w e c o n s i d e r i t f i t t o r e s t o r e

t h e i s s u e t o t h e L d . C I T( A ) , t o a d j u d i c a t e t h e s a m e

a f t e r c o n s i d e r i n g t h e s p e c i f i c s u b m i s s i o n s o f t h e

a s s e s s e e , g i v i n g h i m d u e o p p o r t u n i t y o f h e a r i n g .

7 . F u r t h e r o n me r i t s , w e h a v e n o t e d f r o m t h e o r d e r

o f t h e C I T( A ) t h a t h e h a s s u s t a i n e d t h e b a l a n c e

a d d i t i o n o n a c c o u n t o f u n e x p l a i n e d c a s h d e p o s i t i n

b a n k o f R s . 1 9 , 9 0 , 0 0 0 / - , b y s t a t i n g t h a t t h o u g h t h e

a s s e s s e e h a d e x p l a i n e d t h e s o u r c e o f t h e s a m e a s

f r o m w i t h d r a w a l s f r o m o t h e r a c c o u n t s o r f r o m t h e

s a m e b a n k a c c o u n t , b u t i n t h e a b s e n c e o f r e l e v a n t

e v i d e n c e , b e n e f i t c a n n o t b e g i v e n t o t h e a s s e s s e e .

8 . W e a r e o f t h e v i e w t h a t t h e s e f i n d i n g s o f t h e

C I T( A ) a r e n e i t h e r h e r e n o r t h e r e . W h e r e t h e a s s e s s e e

h a s a d m i t t e d l y e x p l a i n e d t h e s o u r c e o f t h e c a s h

d e p o s i t s a s b e i n g f r o m w i t h d r a w a l s , t h e C I T( A ) i s

r e q u i r e d t o g i v e a s p e c i f i c f i n d i n g a s t o h o w t h e s a m e

r e m a i n e d u n e x p l a i n e d a n d u n s u b s t a n t i a t e d .

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9 . F o r t h e s a i d r e a s o n a l s o , t h e a p p e a l n e e d s t o b e a d j u d i c a t e d a f r e s h b y t h e L d . C I T( A ) . W e , t h e r e f o r e , r e s t o r e t h e e n t i r e a p p e a l b a c k t o t h e L d . C I T( A ) t o d e c i d e b o t h t h e l e g a l i s s u e a n d t h e i s s u e r a i s e d o n m e r i t s a f r e s h a f t e r g i v e n d u e o p p o r t u n i t y o f h e a r i n g t o t h e a s s e s s e e . W e d i r e c t t h e L d . C I T( A ) t o p a s s a s p e a k i n g o r d e r d e c i d i n g t h e i s s u e s i n a c c o r d a n c e w i t h l a w .

Order pronounced in the Open Court.

Sd/- Sd/ �दवा �संह अ�नपूणा� गु�ता (ANNAPURNA GUPTA) (DIVA SINGH ) �याय�क सद�य/Judicial Member लेखा सद�य/Accountant Member �दनांक /Dated: 09th July, 2019 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar