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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. N. K. Saini
ORDER This is an appeal by the assessee against the order dated 28.09.2016 of ld. CIT(A), Ghaziabad.
The only grievance of the assessee in this appeal relates to the sustenance of addition of Rs.34,00,000/- made by the AO as unexplained income u/s 69A of the Income Tax Act, 1961 (hereinafter referred to as the Act).
Facts of the case in brief are that the AO on the basis of information that the assessee had deposited more than Rs.10 lacs in his savings bank account during the year under consideration, sent query letters to the assessee on the various dates to furnish the information in respect of cash deposits in 2 Mohd. Suleman the saving bank account. The AO on the basis of AIR information found that the assessee had deposited cash of Rs.34,00,000/- in his saving bank account. He, therefore, issued a notice u/s 148 r.w.s. 147 of the Act. In response, the assessee filed the return of income on 27.03.2015. The AO asked the assessee to explain the source of deposits amounting to Rs.34,00,000/- in the bank. The assessee through his counsel submitted that the amount deposited in the bank account was received by his father as an advance from Late Sh. Satish Chand and his son and later on the amount was returned to the said persons. It was also pointed out that Late Sh. Satish Chand, R/o-158, New Colony, Ghaziabad was murdered alongwith his family on 21.05.2013 and the said fact could have been verified from the accountant, namely, Sh. Vinod Kumar of the deceased Late Sh. Satish Chand, who had deposited the amount in his bank account. The AO however, did not find merit in the submissions of the assessee and made the addition u/s 69A of the Act.
Being aggrieved the assessee carried the matter to the ld. CIT(A) and furnished the written submission which has been incorporated in para 4 of the impugned order and as under: "The only issue in above referred appeal is that Cash Deposit of Rs 34 lacs into saving bank account of appellant has been added by Assessing Officer u/ s 69A as unexplained.
3 Mohd. Suleman Whereas Appellant through his advocate filed written reply to the Assessing Officer on dated 03/11/2015 wherein he has explained in Pt. no. 4, 5 and 6 that the said amount of Rs 34 lacs has been deposited cash by Late Sh. Satish Chand and his Son during April 2008 to buy agriculture land of my father which has been returned during same month to them due to non completion of deal. Copy of Bank deposit slips attached. - The above said cash deposit of Rs 34 Lacs has been deposited by then employee Sh. Vinod Kumar of Late Sh Satish Chand. Late Sh. Satish Chand was brutally murdered with family on 21/05/2013. - My statement can be verified by Sh. Vinod Kumar who was employee of Late Sh. Satish Chand at that time. If you feel fit you may call him to verify my statement. The Ld AO has pre set mind that Rs 34 lacs has been deposited by appellant as evident from his Assessment Order: - Point 2 of Assessment Order which starts that As per AIR information available on records, the assessee has deposited cash of Rs 34 lacs in his bank account. Whereas AIR information only reveals that Rs 34 lacs has been f deposited in cash into saving bank account of Appellant. - In last line of Assessment order at page 3, ld. AO mentioned that Only cash deposit slip cannot establish that Assessee had not deposit the cash into his bank account. On perusal of the deposit slip it is clear that the cash was deposited into the bank account of the Assessee. Whereas the deposit slip has been provided to the ld. AO by appellant to verify the appellant claim that these deposit slips 4 Mohd. Suleman were filed up by Sh. Vinod Kumar then employee of Late Sh. Satish Chand. These slips were arrange by appellant through Bank itself to substantiate his claim that the amount was deposited by Late Sh Satish Chand through his employee Sh. Vinod Kumar in pursuance of purchase of agriculture land of appellant's father. Appellant has submitted to the Id AO that his claim about said deposit may be verified with Sh. Vinod Kumar if he deems fit to do so. Ld AO has not made any enquiry to verify the claim of appellant and added the said sum of Rs 34 lacs as unexplained u/s 69A of the Income Tax Act, 1961. Your honour is hereby requested that keeping in view the appellant poor financial condition and quite low educational background as well as the situation wherein non availability of third person due to his murder who has given Rs 34 lacs to deposit in appellant saving bank account admit the additional evidences attached herewith application under Rule 46A in the interest of justice. Your honour may appreciate the efforts of the appellant for arranging these additional evidences which may be late and not possible for appellant to submit at assessment stage before assessing officer due to tracing of parties who know about the deal under the circumstances that all these parties are not in touch with the appellant. Appellant worked hard to contact these parties and get there affidavits about the said deposit of Rs 34 lacs. Even hand written agreement which was handed over to the Advocate at Assessment stage was not submitted by his Advocate to Assessing Officer for which appellant has no knowledge. Appellant has tried his level best to provide the documents at assessment stage at the advice of his Advocate.
5 Mohd. Suleman Appellant submits the following documents to substantiate his claim about murder of late Sh. Satish Chand and agreement to sale: > Copy of Notorized hand written Agreement to sale with Late Sh. Satish Chand. > Copy of Affidavit of Sh. Vinod Kumar employee of late Sh. Satish Chand confirming the deposit of Rs 34 lacs in appellant account on instruction o late Sh Satish Chand. > Copy of Affidavit of Sh. Mahesh Kumar Sharma who was present at the time of Agreement of sale and witnessed the Agreement of Sale. > Copy of Affidavit of Sh. Mukarram Ali who has initiated the said deal along with his photograph with Late Sh. Satish Chand > Copy of News Papers Cutting about murder of Late Sh. Satish Chand. Your honour is hereby requested to either remand back the case to the Assessing Officer to reassess the case in the light of additional evidences produce before your honour or may call the report of assessing officer or call any further information from the appellant as he may deem fit to provide justice. In CIT v Kanpur Coal Syndicate (1964) 53 ITR 225 (SC); CIT v Jute Corporation, 187 ITR 688 held that appeal proceedings are continuation of assessment proceedings, assessee can in appeal for the first time make a claim, which was not raised even before the assessing officer, if the facts relevant are on record. In appellant's case all relevant facts are on record and appellant hereby request to accept the additional evidences to substantiate the facts on record. In K. Venkataramiah v. A 6 Mohd. Suleman Seetharama Reddy AIR 1963 SC 1526 interpreting the words "any other substantial cause", it was held: "There may well cases where even though the court finds that it is able to pronounce judgment on the state of record as it is, and so, it cannot strictly say that it requires additional evidence 'to enable it to pronounce judgment', it still considers that in the interest of justice something which remains obscure should be filled up so that it can pronounce its judgment in a more satisfactory manner. The judgment was followed in ITO v. B N Bhattacharya, 112 ITR 423 (Cal). The Bombay High Court in Smt. Prabhavati S Shah's case (1998) 231 ITR 1 has stated that if prima facie an information evidence is necessary to examine the claim of the assessee, the CIT(A) should consider the necessary evidence in exercise of powers u/s 250(4) even if the case of the assessee does not fall within the four comers of the circumstances enumerated in rule 46A(I). As mentioned above, sees. 250(4) and (5) permits the CIT(A) to make such further inquiry on his own or direct the AO to do the same, as he may think fit. Therefore; the CIT(A) is well within his rights if he asks or allows to produce or file additional evidence or papers in the manner he thinks fit. Keshav Mills Co. Ltd. 56 ITR 365 (SC). Additional evidence can also be taken in the shape of affidavit sworn in by third party such as creditors (Hanutram Ramprasad V CIT 1978,114ITR19(Gau). It is within the discretion of CIT (A) to admit or not to admit further evidence. But such Discrition must be reasonably exercised. Rajkumar V CIT 102 ITR 525 approved by SC in Jute Corporation VCIT 187 ITR 688, 695 and EM Chettyar V CIT 4 ITC 111. Compliance with the principle of natural justice must necessarily be read into the provisions of rules. CIT v United 7 Mohd. Suleman Towers (I) Pvt. Ltd. 2008, 296 ITR 106 DEL We hope that above clarification along with additional evidences produce before your honor are enough to your's satisfaction to dispose the case. Your honour is hereby prayed to examine the person giving the Affidavit on oath by himself or may remand back the case to Assessing Officer as he may deem fit in the best interest of justice, any other query/ documents if required by your honor in the interest of justice, let us provide an opportunity to answer the same.”
It was further submitted that the agreement and the affidavits of the third parties which were additional/fresh evidence could not be furnished before the AO due the reason beyond the control of the assessee at the time of assessment. A request was made to admit the additional evidences. The ld. CIT(A) admitted the additional evidences furnished by the assessee but did not find merit in the submission of the assessee by observing in para 5.3 of the impugned order which is reproduced verbatim as under: “5.3 The main contention of appellant is that the cash of Rs. 34,00,000/- deposited in the bank account, was against the sale of land owned by appellant's father Shri Anwar Ali. The sale did not materialize so the same amount has been returned by appellant. However, copy of the bank account submitted during assessment proceedings reveals that following transactions have been made as under: Date Amount deposited Amount Remarks withdrawn 15.04.2008 8,00,000 - cash deposited 15.04.2008 9,00,000 - cash deposited 8 Mohd. Suleman 15.04.2008 7,00,000 - cash deposited 16.04.2008 - 9,00,000 cheque no. 674404 issued to Shri Ganesh 16.04.2008 - 15,00,000 cheque no. 674406 issued to Shri Satish 19.04.2008 5,00,000 - cash deposited 21.04.2008 5,00,000 - cash deposited 22.04.2016 - 10,00,000 cheque no. 674405 issued to Shri Sachin
The above extracts show that appellant has received Rs. 24,00,000/- on 15.04.2008. No details of form and manner in which the money was returned by appellant on cancellation of sale deed were furnished either at assessment stage or during appellate proceedings. If it is presumed that the money was returned through cheque no. 674404, 674405 and 674406 then the chronological order of receipt and payment does not substantiate the claim of appellant. That is once a cash deposit of Rs. 24 lac has been made and same has been returned by issuing two cheques to Shri Ganesh and Shri Satish on 16.04.2008 and If the deal was cancelled leading to return of money on 16.04.2008 than why further deposit of Rs. 5 lac each being part of sale consideration has been made on subsequent dates i.e. on 19.04.2018 and 21.04.2008. So appellant's claim that sale did not materialized and money was returned appears to be an afterthought and appellant is held to be failed in discharging primary onus regarding source of investment in the bank u/s 69A. Thus, addition made by AO u/s 69A is upheld and the ground of appeal is dismissed”
6. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee furnished all the documents in support of his 9 Mohd. Suleman contention that the amount was received as an advance against the sale of land owned by his father Sh. Anwar Ali and in support of the said submission all the relevant documents were furnished which were not appreciated by the ld. CIT(A) in right perspective. It was stated that the assessee furnished a copy of the notorized hand written agreement to sale with Late Sh. Satish Chand and copy of affidavit of Sh. Vinod Kumar then employee of Late Sh. Satish Chand who deposited Rs.34 lacs in the assessee’s account on the instruction of Late Sh. Satish Chand and also the affidavit of Sh. Mahesh Kumar Sharma who was present at the time of agreement of sale and witnessed the agreement of sale but the ld. CIT(A) without considering those documents sustained the impugned addition. Therefore, the same may be deleted.
7. In her rival submissions the ld. Senior DR supported the orders of the authorities below and further submitted that the assessee did not furnish the relevant documents before the AO who allowed ample opportunities of being heard to the assessee. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was justified.
8. I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that the AO made the addition for the reason that the assessee could not furnish the relevant documents before him. However, the assessee furnished all the documents in support of his claim that the 10 Mohd. Suleman amount was received from Late Sh. Satish Chand as an advance against the sale of land. He also furnished other documents as additional evidences which were admitted by the ld. CIT(A). It appears that those documents were not appreciated by the ld. CIT(A) in right perspective because he has not commented on the affidavits of Sh. Vinod Kumar, employee of Late Sh. Satish Chand and the affidavit of Sh. Mahesh Kumar Sharma who witnessed an agreement on sale. In the present case, the claim of the assessee was that the said amount was returned. I, therefore, considering the totality of the facts deem it appropriate to set aside this issue back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 20/03/2017)