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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-1’ NEW DELHI
Before: SMT DIVA SINGH
per his reply dated 04.03.2013 stated that the said amount was received from his father. It
I.T.A .No.-560/Del/2016 Satpal Singh vs ITO
Page 2 of 5 was explained that the assessee’s father had sold his agricultural land to M/s Triveni Infrastructure Development Company and the said company had paid his father by cheques of Rs.37,70,309/- drawn on Bank of Baroda Delhi. The said cheque, it was stated was dishonoured by the Bank and as a result thereof the company agreed to pay the amount in cash to the assessee’s father. Out of this cash payment the father it was submitted had required the assessee to deposit Rs.30 lakh in his bank account. The said explanation was not accepted by the AO in view of the following reasons: i) “During the course assessment proceedings the assessee was asked to furnish the documentary evidence regarding the dishonor of cheque of Rs.37,70,309/- but the assessee failed to furnish any documentary evidence. ii) The father of the assessee Sh.Ram Bax is maintaining his own bank account then it does nto stand to reason that why Sh.Ram Bax will give the amount of Rs.30,00,000/- to his son instead of depositing this amount inhis bank. iii) The assessee was asked to furnish purpose of withdrawn of Rs.29,99,000/- on 26.09.2006 then he stated that this amount was returned to his father. But the perusal of the bank statement of father of the assessee revealed that no such amount has been deposited by the father of the assessee in his bank. iv) The company was also asked to furnish verification regarding making payment in cash to Sh.Ram Bax but no reply was furnish by the company.”
2.1. As a result of these reasons, addition of the said amount was made in the hands of the assessee.
In appeal before the CIT(A), the assessee assailed the transfer of jurisdiction from one AO to another AO. On merit, it was submitted that the agricultural land belonging to Shri Ram Bax i.e. the father of the assessee and his brothers had been sold for an amount of Rs.3,01,62,500/- to M/s Triveni Infrastructure Development Company Limited, New Delhi.
The assessee’s father in lieu of his share received sale consideration of Rs.50,27,084/-. Out of this, Rs.1,50,000/- was received in cash and the remaining was received in the shape of cheques payable on different dates. It was submitted that the cheques were deposited by Shri Ram Bax in his bank which was specifically opened with Punjab National Bank, Dharuhera for this purpose. The specific cheque of Rs.37,70,309/- it was submitted was dishonoured twice on 1st September and 12th Sep. 2006. In the circumstances, it was submitted Shri Ram Bax requested the purchaser company to pay the amount in cash. As a I.T.A .No.-560/Del/2016 Satpal Singh vs ITO
Page 3 of 5 result of this, the said amount was paid in cash to the assessee’s father. It was submitted that since on the date, a bank employee of Rewari Central Co-operative Bank, Bawal was visiting the village, he was requested to open the account in the name of the assessee. The direction to open the account in the name of the assessee it was submitted have been given by the assessee’s father. In support of the said submission, copy of the assessee’s father's pass book, sale deed, assessee’s passbook, his and his father’s affidavit filed before the ITO, Ward No. 2, Rewari were relied upon. It was submitted that during this time, it was learnt that the purchaser company went into liquidation. In the circumstances, the insistence of the AO to prove that the money came from the said company when it was already in liquidation before the Hon'ble High Court could not be complied with and affidavits placed on record were relied upon. It was submitted that copies of the bank passbooks, information regarding the liquidation of the company etc. were all information made available to the AO and he failed to duly consider the same. The intention of the AO was questioned also on the ground that he had even failed to address the affidavits on record as he was intent on rejecting the explanation of the assessee supported by a sale deed. Reliance was placed on various decisions of different Courts in support of the assertions made. The primary onus placed upon the assessee it was stated had been discharged and in case the AO still sought the presence of anyone from the purchaser company than it was for the AO to enforce attendance of the witness. It was further canvassed that the assessee is not obliged to exercise his rights in regard to the use of his money at the whims of the AO. Thus, the father’s choice to deposit the money in the bank account of his son’s bank account it was submitted cannot be required to be explained as it is the father’s fundamental right to use the money in any legal manner. These detailed submissions which have been summed up above are found recorded at pages 4 to 7 of the impugned order. 3.1. However, the CIT(A) relying upon the Remand Report of the AO rejected the explanation offered holding as under:- I.T.A .No.-560/Del/2016 Satpal Singh vs ITO Page 4 of 5 “A perusal of the facts reveal that the appellant has been unable to prove that the deposit in his account related to the amount purported to be received by his father. It is incomprehensible as to why when the father already maintained a bank account, the deposit should be made in the son’s account. Dishonoring of a cheque does not automatically mean that the amount of cash deposited in the appellant’s account related to the same transaction.”
Aggrieved by this, the assessee is in appeal before the ITAT.
Both the parties have been heard. The Ld.AR inviting attention to the copy of the sale deed (Paper Book page 44 to 50) submitted that it had been demonstrated that the specific piece of land was owned by the assessee’s father alongwith his brothers; documents demonstrating that it was sold to M/s Triveni Infrastructure Development Co. had also been provided. Affidavit of the Sh. Ram Bax (father of the assessee); and copy of his bank account had also been placed on record, the payment it has been explained was received from his father in cash on 24.09.2006 and deposited in his bank on 25.09.2006. ON 27.09.2006 it was withdrawn to the extent of Rs.29,99,000/- in cash and handed over again to his father who utilized the same for construction of house in the name of his father. It was his submission that in the circumstances whether it was returned to the father or was allowed to be retained by the assessee on his father’s instruction or utilized by the family in any other manner, was not an issue before the tax authorities as they were only required to consider whether the deposit of Rs.30 lacs was as per assessee’s explanation from the sale of the specific piece of land sold by the assessee’s father or not. The addition accordingly it was submitted was wrongly sustained and had the evidence made available to the AO originally has not been considered.
5.1. The Ld.Sr.DR submitted that the assessee has not been able to show that the amount had been returned to the father or not. How the said issue was relevant he was unable to address.
I have heard the submissions and perused the material available on record. I find that the issue whether the amount was returned to the father or not by the son is not the relevant issue for consideration in the present proceedings. The only issue which as per the query I.T.A .No.-560/Del/2016 Satpal Singh vs ITO
Page 5 of 5 raised by the AO was whether the amount of Rs.30 lacs found deposited in the assessee’s bank account can be stated to be explained by the sale of agricultural land to M/s Triveni Infrastructure Development Co. by the assessee’s father or not. I find that no effort has been made by the tax authorities to address the affidavits of the assessee and his father admittedly on record. Specific land was sold by the assessee’s father and the cheques issued by M/s Triveni Infrastructure Development Co. were not honoured by the Bank is a consistent unrebutted claim on record. The amount ultimately was handed in cash by M/s Triveni Infrastructure Development Co. is also a consistent claim on record. Copies of bank pass books of its father and son of the assessee in support of the affidavits filed are also stated to be on record. I find that on these material documents there is no discussion whatsoever in the orders of the tax authorities. Accordingly, holding the order devoid of discussion on material facts, the impugned order is set aside and the issue is restored back to the file of the AO directing the said authority to pass a speaking order denovo in accordance with law after giving the assessee a reasonable opportunity of being heard.