ITO, ROHTAK vs. SH. RAM KISHAN, HARYANA

the impugned order dated 30/1/2014 passed by the Ld. Commissioner of Income Tax (Appeals)-Rohtak on the following grounds:-

1. CIT(A) has admitted the additional evidences under rule

46A but the assessee did not fulfill the conditions mentioned under Rule 46A because the assessee was never denied to produce any evidence before the AO during assessment proceedings. The assessee was repeatedly given opportunity by the AO but the assessee failed to submit the evidences necessary for substantiation of his claim.

2. CIT(A) erred in deleting the additions of Rs. 39,84,837/-

(Rs. 29,75,000 + Rs. 10,09,837/-) made on account of unexplained deposits with bank as substantiating details with supporting documentaries evidences were not produced at the time of assessment as well as during remand proceedings. The original agreement supporting claim by the assessee of sale of land and advance received were not produced.

was given as an advance did not carry any specific datge of transactions on which this advance was given.

4. CIT(A) has erred in not considering properly the report

of the AO wherein no corroborative evidence was submitted by the appellant regarding his contention of having repaid the advance taken.

Accordingly, the AO frame the assessment u/s. 144 and made the addition of Rs. 29,75,000/- as income from undisclosed sources. AO further observed that as per the bank statement of the assessee the assessee has received an interest of Rs. 8631/- from Haryana Gramin Bank, Nuna Majra. Besides this credit entries amounting to Rs. 10,09,837/- are also there in the bank account during the year under consideration and assessee has not filed his return of income and nor shown these amounts at his income nor any explanation has been furnished, hence, the amount of Rs. 10,18,468/- was also added to the income of the assessee and assessment at Rs. 39,93,470/- was assessed under section 144/147 of the I.T. Act, 1961 vide Order dated 30.01.2014.

3. Aggrieved with the aforesaid assessment order, assessee preferred an appeal before the Ld. CIT(A), who vide his impugned Order dated 02.3.2016 has deleted some additions and partly allowed the appeal of the assessee.

6.1 With regard to ground no. 1 relating to admission of additional evidences is concerned has submitted that in the Remand Report dated 23.12.2015 no objection was raised by the AO to opportunity to furnish additional evidence and, therefore, plea is an afterthought and, hence, he submitted that the ground no. 1 may be rejected. He further stated that even otherwise, if an order framed u/s. 144 of the Act, once a remand report is passed by the Ld. CIT(A) and, the AO on the basis thereof grants opportunity and, consider such additional evidence and also filed a report on the same (without any objection) the ground now raised is untenable.

To support this contention, Ld. Counsel of the Assessee relied upon the following case laws:-

- 231 ITR 1 (Bom) Smt. Prabhavati S. Shah vs.

CIT

- 26 ITD 236 (Del) Electra Jaipur (P) Ltd. vs.

IAC

- 121 TTJ 269 (Jaipur) Anmol Colours (India)

(P) Ltd. vs. ITO 6.2 With regard to ground no. 2 to 4 relating to addition of Rs. 29,75,000/- on account of alleged unexplained cash deposit in bank account with Haryana Gramin Bank, Nuna Majra and addition of Rs. 10,09,837/- on account of alleged unexplained credits/ entries in bank account with Haryana Gramin Bank, Nuna Majra is concerned, the Ld. Counsel stated that Cash deposits of Rs. 29,85,000/- in bank account no. 5401 with Haryana Kshetriya Gramin Bank, Nuna Majra were deposited and explanation thereof is that amount represents advance towards sale of agricultural land from Sh.

Rajesh S/o Rajender Singh R/o Village Goela Kalan Tehsil Bahadurgarh, Jhajjar, Haryana which was established by filing the affidavit of Sh. Rajesh (page No. 4 of the PB); ration card of Sh.

Rajender Singh (Father of Shri Rajesh) (Page No. 5 of the PB); Driving License of Sh. Rajesh (Page No. 6 of the PB); agreement to sell dated 2.2.2006 (page no. 7 to 9 of the PB); copy of bank statement of assessee (page no. 10 to 14 of the PB). He further stated that the AO in the remand report did not dispute the evidences other than to allege that no evidence was produced regarding repayment and in the process he overlooked that in the affidavit it was stated that repayment were made in March, 2006 and June, 2006 of Rs. 18.00 lacs and Rs. 12 lacs repaid. Hence, he requested to delete the addition of Rs. 29,75,000/- in dispute.

6.3 With regard to addition of Rs. 10,09,837 is concerned, Ld. Counsel of the assessee stated that Cash deposits of Rs. 10,09,837/- in bank account no. 5401 with Haryana Kshetriya Gramin Bank, Nuna Majra were deposited and explanation thereof is the same represents the consideration of sale of agriculture land and on account of transfer entry. He further stated that evidence were on record i.e. sale deed dated 7.2.2006 in respect of land sold by assessee (page no. 16-22 of the Paper Book) and Nakal Jamabandhi (Page No. 15 of the PB). Hence, he submitted that Ld. CIT(A) has rightly held that “the entries relate to cheque deposits made on account of receipt of sale of land. The AO has made no effort to disprove the assessee claim. In view of the fact that there is no concrete evidence to disprove the assessee, I delete the addition.” In view of the above, Ld. Counsel of the assessee stated that the addition of Rs. 10,09,837/- may also be deleted.

“The 4th ground of appeal is against addition of Rs.

2975000/- on A/c of cash deposits in bank. the appellant had entered into in an agreement with one Sh. Rajesh

S/o Sh. Rajender Singh for sale of his ancestral agricultural land for Rs. 60 lacs and advance of Rs. 30 lacs was received on different dates as mentioned in agreement to sell and copy of the same was filed before the AO in remand proceedings. The AO in his remand report Dt. 23.12.2015 has admitted this fact and affidavit of the purchaser was also obtained by the AO. An affidavit is a valid piece of evidence as has been held by the Hon'ble Supreme Court of India in the case of Parikh and Co vs CIT reported at 30 ITR 181. The above judgment of Hon'ble Supreme Court of India was followed by the Hon'ble Allahabad High Court in the case of Sohan Lal Gupta vs CIT reported at 33 ITR 786. Thus, the source of deposits of Rs. 2975000/- stood proved and as such your good self is prayed to please delete the addition made by the AO.

I have examined the facts of the case, the submissions made by the appellant and the remand report of the AO dated 30.12.2015. The AO has admitted to the fact of the affidavit, dated 8.9.2015, affecting the repayment. The AO has however merely stated that no evidence was produced regarding the repayment, but no efforts were made by him. Filing of the affidavit and the fact the AO has made no effort to prove that it is false, makes the addition contentious. I, therefore, delete the same. This ground of appeal is allowed.

The 5th ground of appeal is against addition of Rs.

10,09,837/- received through cheques. During the year under appeal the appellant had sold part of his ancestral agricultural land along with his other family members for Rs. 32,55,000/- and the appellant had received two cheques of Rs. 945000/- (708750.00+236250.00) as his share. The other credit entry of Rs. 64837/- on 18.05.2005 is on Alc transfer from BC 334. The AO had not bothered to verify from bank. The credit entry in the bank were from the sale proceeds of agriculture land and transfer entries and as such the addition of 1009837/- made by the AO may kindly be deleted.

The entries relate to cheque deposits made on account of receipt of sale of land. The AO has made no effort to disprove the assessee’s claim. In view of the fact that there is no concrete evidence to disprove the assessee, I delete the said addition. This ground of appeal is allowed.”

8. After hearing the rival submissions and perusing the records available on record, with regard to ground no. 1 admission of additional evidences is concerned, I find that in the Remand Report dated 23.12.2015 no objection was raised by the AO to opportunity to furnish additional evidence and, therefore, plea is an afterthought. Even otherwise, if order framed u/s. 144 of the Act, once a remand report is passed by the Ld. CIT(A) and, the AO on the basis thereof grants opportunity and, consider such additional evidence and also filed a report on the same (without any objection) the ground relating to admission of additional evidence at this juncture is not justified, hence, the ground no. 1 is hereby rejected.

My aforesaid view is fortified by the following decisions:-

- 231 ITR 1 (Bom) Smt. Prabhavati S. Shah vs. CIT wherein the Hon’ble High Court has held as under:-

"On a plain reading of rule 46A, it is clear that this rule is intended to put fetters on the right of the appellant to produce before the Appellate Assistant

Commissioner any evidence. whether oral or documentary, other than the evidence produced by him during the course of the proceedings before the Income-tax Officer, except in the circumstances set out therein. It does not deal with the powers of the Appellate

Assistant Commissioner to make further enquiry or to direct the Income-tax

Officer to make further enquiry and to report the result of the same to him.

This position has been made clear by sub-rule (4) which specifically provides that the restrictions placed on the production of additional evidence by the appellant would not affect the powers of the Appellate Assistant Commissioner to call for the production of any document or the examination of any witness to enable him to dispose of the appeal.

Under sub-section (4) of section 250 of the Act, the Appellate Assistant

Commissioner is empowered to make such further inquiry as he thinks fit or to direct the Income-tax Officer to make further inquiry and to report the result of the same to him. Sub-section (5) of section 250 of the Act empowers the Appellate Assistant Commissioner to allow the appellant, at the hearing of the appeal, to go into any ground of appeal not specified in the grounds of appeal, on his being satisfied that the omission on the ground from the form of appeal was not willful. It is clear from the above provisions that the powers of the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The scope of his powers is conterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do. He can also direct the Income-tax Officer to do what he failed to do. The power conferred on the Appellate Assistant

Commissioner under sub-section (4) of section 250 being a quasi-judicial power, it is incumbent on him to exercise the same if the facts and circumstances justify. If the Appellate Assistant

Commissioner fails to exercise his discretion judicially, and arbitrarily refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority."

- 26 ITD 236 (Del) Electra Jaipur (P) Ltd. vs. IAC wherein the Tribunal has held that “it is incorrect to shut out an assessee in the process of administration of justice from loading evidence to prove its case.”

8.1 With regard to addition of Rs. 29,75,000/- on account of alleged unexplained cash deposit in bank account with Haryana Gramin Bank, Nuna Majra is concerned, I find that the assessee had entered into in an agreement with one Sh. Rajesh S/o Sh. Rajender Singh for sale of his ancestral agricultural land for Rs. 60 lacs and advance of Rs. 30 lacs was received on different dates as mentioned in agreement to sell and copy of the same was filed before the AO in remand proceedings. The AO in his remand report Dt. 23.12.2015 has admitted this fact and affidavit of the purchaser was also obtained by the AO. An affidavit is a valid piece of evidence as has been held by the Hon'ble Supreme Court of India in the case of Parikh and Co vs CIT reported at 30 ITR 181. The above judgment of Hon'ble Supreme Court of India was followed by the Hon'ble Allahabad High Court in the case of Sohan Lal Gupta vs CIT reported at 33 ITR 786. The AO has admitted to the fact of the affidavit, dated 8.9.2015, affecting the repayment. The AO has however merely stated that no evidence was produced regarding the repayment, but no efforts were made by him. Filing of the affidavit and the fact the AO has made no effort to prove that it is false, makes the addition contentious. Hence, the Ld. CIT(A) has rightly deleted the addition of Rs. 29,75,000/- which does not need any interference on my part, hence, I uphold the same.

8.2 With regard to addition of Rs. 10,09,837 is concerned, I find that AO has admitted to the fact of the affidavit, dated 8.9.2015, affecting the repayment. The AO has however merely stated that no evidence was produced regarding the repayment, but no efforts were made by him. Filing of the affidavit and the fact the AO has made no effort to prove that it is false, makes the addition contentious. The addition of Rs. 10,09,837/- received through cheques. During the year under appeal the assesse had sold part of his ancestral agricultural land along with his other family members for Rs. 32,55,000/- and the assessee had received two cheques of Rs. 945000/- (708750.00+236250.00) as his share. The other credit entry of Rs. 64837/- on 18.05.2005 is on Alc transfer from BC

Order pronounced in the Open Court on 13/02/2017.