SMT. NEERU GUGNANI,ROHTAK vs. ITO, ROHTAK

The grounds of appeal read as under:-

The brief facts of the case are that the assessee has filed the original return declaring income of Rs. 1,28,160/- on 18-07-2006. Later on the case was taken up for scrutiny under CASS and notice u/s 143(2) dated 29-06-2007 was issued and duly served upon the assessee. In response to this Shri M.P.Gugnani,Advocate and husband of the assessee attended the assessment proceedings. As per the CASS details the assessee had made cash deposits to the tune of Rs. 35,02,640/- in her IndusInd bank account during the year under consideration. The assessment was completed u/s 143(3) of the I,T.Act, 1961 on 25-12-2008 at a total income of Rs.10,78,160/- as the source of cash deposits of Rs.9,50,000/- remained unexplained. Aggrieved by the order of the A.O., assessee went in appeal before Ld. CIT(A), who vide order dated 31-12-2009 dismissed the appeal of the assessee. Again, aggrieved with the order of Ld. CIT(A), assessee further preferred appeal before ITAT, New Delhi. The ITAT in dated 23-07- 2010 remitted the matter to the file of AO with the direction to have detailed enquiry into the genuineness of the transaction by calling the witnesses in whose presence the agreement was signed. The ITAT further directed the AO to call the legal heirs of Shri Bijender Pal Singh and to look into the circumstances under which the transaction was cancelled and money was refunded back by the assessee to Shri Bijender Pal Singh. Keeping in view the order of ITAT, notice u/s 143(2) of the Act was issued to the assessee on 27-06-2011 fixing the case for 19-07-2011. In response to this notice Shri M.P.Gugnani, Advocate and husband of the assessee filed a written reply dated 19-07-2011 of the asssessee. Again the Assessee was asked some information by the AO vide notice u/s. 142(1) dated 1.11.2011 and 2 assessee again replied the same on 8.11.2011. Further, a notice dated 7.12.2011 was issued to the assessee u/s. 142(1) and assesssee replied the same vide reply dated 16.12.2011. On going through the replies, the AO observed that Statement of the witnesses Shri Mahender Pal Singh and Shri Sunil Kumar Jain were recorded to establish the genuineness of the transaction entered into by Smt, Neeru Gugnani with Shri Bijender Pal Singh for sale of property 1039123, DLF Colony, Rohtak. Meanwhile summons were also issued to Shri Tribhuvan son and legal heir of Shri Bijender Pal Singh S/o Thakur Jagmal Singh Village Samar Gopal Pur, Rohtak on 01-12-2011 & 14-12-2011 for 08-12-2011 and 20-12-2011 respectively. It was further observed by the AO that Shri Tribhuvan, the legal heir of Shri Bijender Pal Singh attended the office on 16-12-2011 in response to the summons issued. His statement was recorded. In his statement he has categorically denied of having transaction entered into by his father Shri Bijender Pal Singh with Smt.Neeru Gugnani on 30-06-2005 for the purchase of so called plot NO.1039/23 at DLF Colony, Rohtak. He further revealed that his father was suffering from lever disease and was admitted in Shri Ganga Ram Hospital, New Delhi for the period of 18 months prior to his demise. Copy of death certificate of Shri Bijender Pal Singh has also been filed by Shri Tribhuvan which is placed on record. Shri Bijender Pal according to his son expired on 25-12-2007. Shri Tribhuvan was shown the copy of the agreement dated 30-06-2005 entered into by assessee with Shri Bijender Pal for the sale of plot at DLF Colony, Rohtak and was also shown agreement for cancelling the said deal entered on 15-11-2007. He again categorically stated that the signatures of his father Shri Bijender Pal Singh on both the agreements are fake and does not match with the actual signature of his father. Copy of two Identity Cards of Shri Bijender Pal Singh bearing his signature was filed by Shri Tribhuvan which is placed on record. Keeping in view the above facts and circumstances and material available on record AO observed that it is quite evident that the said transactions regarding sale of property by the assessee to Shri Bijender Pal Singh is a concocted story woven to fit into the scheme of thing so as to cover up her unaccounted money in the garb of cash deposits made into the bank on different dates during the year under consideration. AO completed the assessment vide his order dated 22.12.2011 passed u/s. 143(3) of the I.T. Act, and treated the sum of Rs.9,50,000/- deposited in the above said bank on different dates as unexplained and added back to the income of the assessee as income from undisclosed sources.

Aggrieved with the aforesaid assessment order, assessee preferred an appeal before the Ld. CIT(A), who vide impugned Order 13.2.2014 has dismissed the appeal of the Assessee.

At the time of hearing, Ld. Counsel for the Assessee draw my attention towards the Agreement dated 30.6.2005 made between Smt. Neeru Gugnani, W/o Shri Mahinder Pal Gugnani, S/o Shri Nihal Chand which is at pages 2 & 3 of the Paper Book. He stated that these documents proved that Assessee has received Rs. 15 lacs from Sh. Bijender Pal Singh, S/o Thakur Jagmal Singh on the sale of property in dispute, but due to some reasons this agreement could not be materialized and both the parties cancelled this agreement vide Cancellation Deed dated 15.11.2007 and returned the said money to Sh. Bijender Pal Singh. The said Cancellation Deed is also attached at Page Nos. 4 to 7 of the Paper Book.

On the other hand, Ld. DR relied upon the orders of the authorities below and opposed the request of the Assessee’s Counsel.

I have heard both the parties and perused the orders passed by the Revenue Authorities alongwith relevant records available with the Appeal filed. I also perused the Agreement dated 30.6.2005 in which the assessee has received Rs. 15 lacs from Sh. Bajinder Pal Singh on account of sale of property and later on due to some reasons cancelled the said Agreement vide Cancellation Deed dated 15.11.2007 and returned back the money in dispute to Sh. Bajinder Pal Singh.

On perusing the aforesaid documentary evidences filed by the assessee in the shape of Paper Book, I am of the considered view that Assessee has explained the source of income. I further find that in compliance of the earlier Tribunal’s order dated 30.7.2010 the witnesses of the agreement for the sale of property has already been examined by the AO and they have admitted that assessee has received Rs. 15 lacs from Sh. Bajinder Pal Singh who died on 25.12.2007, on account of sale of property. In the facts and circumstances of the present case, the addition of Rs. 9,50,000/- made by the AO is not sustainable in the eyes of law and has been wrongly added without corroborating any evidence including the evidences produced by the assessee which is also contrary to law and facts of the case.