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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-3’ NEW DELHI
Before: SMT DIVA SINGH
Date of Hearing 21.07.2016 Date of Pronouncement 19.10.2016 ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 19.02.2015 of CIT(A), Rohtak pertaining to 2005-06 assessment year on various grounds.
The relevant facts of the case are that the tax evasion petition in the case of the assessee was received by the tax authorities and on account of the failure to be represented an ex-parte assessment order was passed, assessing an income of Rs.31,50,000/- wherein addition of Rs.30 lakhs was made and salary income was estimated at Rs.1,50,000/-. The relevant facts are extracted from the assessment order:-
“TEP in the case of Sh. Naresh Chand was received in this office. As per allegation labeled in the TEP the assessee signed an agreement with SHri Krishan for purchase of land situated in Garhi Ujale Khan village of Gohana for a consideration of Rs.83 lacs. As per agreement he paid Rs.15 lacs on 02.12.2004 and Rs.15 lacs on 28.02.2005 to Shri Krishan before the witness Sh, Bansidhar. The assessee was asked vide this office letter No.4666 dated 05.08.2010 letter No.7761 dated 06.10.2010 to furnish complete details of immovable/movable assets along with source of investment. He filed reply vide
I.T.A .No.-2749/Del/2015 letter dated 25.11.2010 stated therein that he maintained bank account in OBC Karnal. He purchased residential plot of 270 sq. yard in 1999 for Rs.2.5 lacs. He maintained one wagon Car purchased in 2005 against loan. He further stated that he signed an agreement with Shri Krishan for purchase of land situated in Garhi UJale Khan Vilalge of Gohana for a consideration of Rs.83 lacs. He further stated that the amount of Rs.83 lacs was paid by my father. But he did not produce any evidence regarding payment of Rs.83 lacs by his father. There has been no mentioned in the agreement that the assessee has signed the agreement on behalf of his father. Hence contention of the assessee regarding, payment of Rs.83 lacs by his father is absolutely without any evidence and therefore, rejected.”
3. The assessee was found to have been working on the post of VLDA in the office of Sub Divisional Officer Animal Husbandry Karnal. No return of income was filed by the assessee in the year under consideration as the income was not taxable. Assailing the addition the assessee filed an appeal before the CIT(A) submitting that he was working on the post of V.L.D.A. in G.V.H. Butana. The relevant submissions extracted in the impugned order as under:-
“That I am working on the post of V.L.D.A. in G.V.H. Butana and I was appointed in the year 1988 for the post of V.L.D.A. I do not purchase any property in my name or in the name of my spouse and children. I purchased only a plot in Sector-7, Gohana against sale consideration of Rs.2,36,000/- and I constructed a house thereupon after obtaining a house loan from ICICI Bank Ltd. vide loan account no. LBPNP00000350493 Application No. 7771446818 and except this I purchased a Wagon-R Car bearing registration no. HR-1 IB/5400 and for that purpose I took a car loan from Oriental Bank of Commerce, Gohana. Except the above said plot and car, I have not purchased any other property.
2. I do not have any other income except the income from salary. 3. I have not filed income tax return from assessment year 2005-06 because my total income was below than taxable income. I have two bank account, one is salary account with S.B.P. Gohana bearing account no. 55057744253 and another account bearing no. 015074 with O.B.C. Gohana, which has been closed by me. 4. I belongs to a Joint Hindu Family. My grand-father Hardeva S/o Ram parsad was a big landlord, who was having approximately 120 acre agriculture land and after the consolidation, he had left owner of about 85 standard acre agriculture land. My father is elder son of his father i.e. my grand-father and is having 1/5 share in the ancestral property comprised in Khewat no. 65/59, Khata no. 80, Rect. & Killa no. 23//8/2(2-8), 9(8-0), 10(7-8), 11/1(6-0), 24//15(8-0), 17(8-0), 18(8-0), 19(8-0), 20(8-0), 33//8(6- 14), 12(8-0), 15(7-4), 45//5(2-13), 7(3-18) situated in the revenue estate of village Bali Brahmanan, Tehsil Gohana, Distt. Sonepat and in Khewat no. 68/77, Rect. & Killa no. 8//23(8-13), 24/1(3-0), ll//3/l(7-7), 4(7-7), 26//9(8-0), 11(8-0), 12(8-0), 33//13/2(6-0), 18(7-8), 19(8-0), 23(7-8), Page 2 of 5
I.T.A .No.-2749/Del/2015 39//18(8-0), 19(7-8), 23(7-8), Khewat no. 1194, Rect. & Killa no. 42//26(90-13), 43//3(6-16), 8(7-8), 45//3/2(3-10), 4(7-18), 5(2-13), 7(3-8), 93//6(8-0), 8/2(1-2), 13(8-0), 14(8-0), 24//20(8-0), 20(8-0), 22(8-0), 25//16(7-8), 26//9(8-0), 11(8-0), 12(8-0), 20(8-0), 21(8-0), 25//2(6-0), 31//16/2(3-16), 24(8-0), 25(7-12), 32//1(7-7), 33//23(7-8), 34(1(7-11) total measuring 93K-13M.
5. That I am just a share holder in the above said agriculture land being member of Joint Hindu Family and being legal heir of Sukhpal S/o Hardeva.”
However, not convinced with the explanation, the CIT(A) confirmed the addition holding as under:-
“I have examined the submissions made by the assessee and the facts on record. It is seen that at the time of assessment proceedings for this year, the assessee has stated that he had signed an agreement for purchase of land at Garhi Ujale Khan, village Gohana with a person called Shri Krishan for a consideration of Rs 83 lakhs. The assessee, by his own admission, stated that Rs 83 lakhs were paid by his father but no evidence of this was filed. A sum of Rs 30,00,000/- being payments made on 04.12.2004 (Rs15,00,000) and 28.02.2005 (Rs 15,00,000) were added for AY 2005-06. The assessee was unable to substantiate how the agreement signed by him is not true. Moreover, no additional evidence has been furnished before me as per the remand report of the AO dated 16.01.2015. The appellant has not been able to discharge his onus in proving that he was not a party to the said transaction. To state that his father made his "sign a paper" and that his father entered into an agreement with one Shri Krishan is not an acceptable explanation. There was repeated non compliance before the AO. Even before me, no new material has been placed on record to prove the appellant's claim. I, therefore, confirm the addition.”
Both the parties have been heard. In order to ascertain the correctness of the assertions made by the parties before the Bench, it is necessary to first address the facts. It needs to brought on record as to what specific land as per agreement to sell has been purchased by the assessee. Mere mention of a village in a document by itself does not form the evidence that a specific land was owned by way of purchase by the assessee. In the face of the denial of the assessee that the signatures do not belong to him the Revenue first needs to address the status of the specific land.
Namely bring on record the exact description of land and ascertain whether it has been purchased by the assessee. In case the alleged agreement to sell was never Page 3 of 5
I.T.A .No.-2749/Del/2015 acted upon even in that situation in the face of the denial of the assessee that the signature is not his the Revenue will need to seek forensic examination of the same by having an expert’s opinion on the handwriting. The fact that this is a case of tax evasion petition wherein there is an assertion of the assessee that the signature does not belong to him and the assessee has argued that apart from Wagon-R car and construction of a house after obtaining a house loan from ICICI Bank Ltd. vide loan A/c No.LBPNP00000350493 on a plot in Sector-7, Gohana there is no other property owned by the assessee all facts which need to be addressed. . The assessee may be called for to file a sworn declaration under penalty of perjury to address his version of facts if need be before proceeding to seek forensic evidence addressing the signatures etc. However, as far as the impugned order is concerned it cannot be sustained as there is no discussion whatsoever on the arguments recorded in the said order. Once the assessee says that the signature does not belong to him and the property refereed to has also not been purchased by him. Then, these basic facts and arguments have to be addressed and in order to proceed further and hold the same as assessee’s undisclosed income the Revenue needs to demonstrate by way of evidences the fallacies of the assessee’s claim. In the absence of any discussion on the relevant facts after hearing the parties the issue is restored back to the AO to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.