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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This appeal has been filed by the assessee against the order dated 17.01.2019 passed by the ld. Commissioner of Income Tax (Appeals), Bathinda in respect of the Assessment Year 2010-11.
The assessee has raised the following grounds of appeal:
Harbans Singh v. ITO “1. The Ld. CIT(A), Bathinda erred on facts and law in confirming the addition of Rs.10,39,500/- while treating it as extra money paid as consideration for the execution of registered deed of sale of land and not for the sale of land itself despite the fact that the evidence was placed on record to prove that the payment of Rs. 25,92,000/- was received through banking channel from Sh. Avtar Singh to whom the assessee had sold agriculture land.
2. The Ld. CIT(A), Bathinda erred on facts and law in sustaining the addition of Rs.10,39,500/- by invoking the provisions of section 56(2)(v) or (vi) or (vii) without giving any opportunity of hearing during the course of appellate proceedings because the above stated addition was made by the AO u/s 69A.
The Ld. CIT(A), Bathinda erred on facts and law in confirming the addition of Rs.10,39,500/- u/s 56(2)(v) or (vi) or (vii), while relying on the judgment of Hon'ble Punjab and Haryana High Court in the case of Paramjit Singh vs. ITO 327ITR 580.
4. Alternatively without prejudice to the above stated grounds of appeal, The Ld. CIT(A), Bathinda erred on facts and law in confirming the addition of Rs.10,39,500/- while recording a vague finding in para 4.2.6 on page 7 of the appellate order that the receipt of Rs. 10,39,500/- would be income from other sources by virtue of provisions contained in 56(2)(v) or (vi) or (vii) depending upon the date of transactions. Hence the CIT(A) has failed to pass a speaking order.
5. The appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.”
3. None appeared for the assesse. However, considering the apropos ground no. 2, wherein the appellant challenged the order of the Ld. CIT(A), Bathinda on account of principles of natural justice (adequate opportunity), we are deciding the appeal after hearing the Ld. DR at length and going through the memorandum of appeal, and material on record.
Harbans Singh v. ITO 3.1 In this context, the appellant submitted before the CIT(A) that the assessee is purely an agriculturist having no other source of income. From the bank account of the assessee with SBI, Fund Flow Statement and Cash Flow Statement have been prepared for the sake of convenience and the same are enclosed herewith [PB 9-10]. From the perusal of these statements, it would be seen that there was never a negative cash balance.
A sum of Rs.11,00,000/- was deposited out of the earlier withdrawals made. Hence, the cash deposit of Rs.11,00,000/- stands explained.
3.2 However, the Ld. CIT(A) has sustained the addition of Rs.10,39,500/- by invoking the provisions of section 56(2)(v) or (vi) or (vii) without giving any opportunity of hearing during the course of appellate proceedings regarding the aforesaid adverse view against the assessee by invoking different provisions because the disputed addition was made by the AO u/s 69A of the Act.
The Ld. DR read out the impugned order and largely stands by the impugned order.
Heard the Ld. DR at length and have gone through the material available on record. Admittedly, the AO has made an addition Rs. 10,39,500/- u/s 69A of the Act, being not satisfied with the reply of the Harbans Singh v. ITO assesse, holding the same as undisclosed income of assessee, out of Rs.25,92,000/- deposited in bank account without appreciating the evidence and explanation tendered during the course of assessment proceedings.
From the impugned order, it is seen that the appellant submitted before the CIT(A) that there was a deposit transfer entry of Rs.25,92,000/- on 22-04- 2009 in the bank account of assessee maintained with SBI, Nahianwala. It was explained that the aforesaid entry related to sale of agricultural land by the assesse, vide his letter dated 06-12-2017 to the AO, the assessee stated that the registration deed was executed for an apparent consideration of Rs.15,52,500/- but the actual amount of Rs.25,92,000/- was received from the purchaser and this amount was transferred through banking channels. However, the AO without appreciation of facts made an addition of Rs.10,39,500/- by stating that the sale deed had been executed on 22-04-2009 vide RD No.492 for Rs.15,52,500/- and the balance amount of Rs.10,39,500/- was treated as undisclosed income of the assessee in view of the provisions of section 69A of the IT Act, 1961. The Ld CIT (A) however observed as under:
“I have given careful consideration to the legal proposition and find that the contention is unacceptable because it might be true that the appellant received Rs. 25,92,000/- from Shri Avtar Singh and Shri Jagsir Singh s/o Shri Avtar Singh
Harbans Singh v. ITO to whom the land was sold but this amount has two components. The first component is apparent sale consideration of Rs. 15,52,500/- which is evidenced by Registration deed No.492 dated 22-04-2009. The other component received over and above the registered amount. By virtue of section 91 and 92 of the Evidence Act the component of sale consideration mentioned in registered document cannot be disputed. However, it is a matter of fact that the balance amount of Rs. 10,39,500/-has also flown from the same persons but the moot question is what is the nature of this a receipt in the hands of the appellant.”,
Thus, the Ld. CIT(A) held the aforesaid amount received over and above the sale consideration mentioned in the registered document, partakes the character of income from other sources as contemplated u/s 56(2)(v) or (vi) or (vii) depending upon the date of transaction and thus he changed the charging section without taking rebuttal of the assessee by granting any opportunity of being heard which is in gross violation of principles of natural justice. The ld. CIT(A) action in confirming the said addition under different section without granting opportunity of being heard to the assesse and taking its rebuttal in violation of natural justice cannot be approved under law.
In our view, the CIT (A) ought to have seek rebuttal of the assessee to their adverse view against the assessee by way of granting adequate opportunity of being heard and brought on record any contrary evidence to prove that the disputed amount remained as unexplained investment or otherwise chargeable to tax under other provisions of law. It
Harbans Singh v. ITO is evident from the order of the CIT(A) that the submissions filed by the assessee has not been considered by him. In fact, the Ld. CIT(A) ought to have considered the submissions and evidences if any filed by the assessee by making verification from the sources mention in the written submissions before jumping on the decision that the amount received over and above - as unexplained investment u/s 56(1) of the Act.
In view of the principles of natural justice, we accept the grievance of the assessee as genuine and accordingly, we consider it deem fit to restore back the matter to the Ld. CIT(A) to decide afresh with the direction to pass a speaking order after considering the written submission and evidences filed on record before him during the appellate proceedings, and to be filed in fresh proceedings after granting sufficient opportunity of being heard to the assessee. No doubt, the assessee shall cooperate in the fresh proceedings.
In the result, the appeal of the assessee is allowed for statistical purpose.