No AI summary yet for this case.
Income Tax Appellate Tribunal, DIVISION BENCH ‘A’, CHANDIGARH
Before: MS.DIVA SINGH & MS.ANNAPURNA GUPTA
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘A’, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.1526/Chd/2017 (Assessment Year : 2009-10) The Income Tax Officer, Vs. Sh.Gubinder Singh Ward-1, S/o Sh.Kartar Singh, Malerkotla. VPO-Amargarh, Tehsil-Malerkotla. PAN: DOTPS9368B (Appellant) (Respondent)
Appellant by : Smt.Chanderkanta,Addl. CIT Respondent by : None Date of hearing : 02.04.2018 Date of Pronouncement : 01.05.2018
ORDER PER ANNAPURNA GUPTA, A.M.:
This appeal has been preferred by the Revenue against
the order of Ld. Commissioner of Income Tax (Appeals)-2,
Ludhiana (hereinafter referred to as (‘Ld.CIT(Appeals)’)
dated 20.4.2015 relating to assessment year 2009-10.
None appeared on behalf of the assessee, nor any
application seeking adjournment was filed. The case was,
therefore, proceeded to be heard.
Ground No.1 raised by the Revenue reads as under:
That the CIT(A) erred in admitting additional evidence violating the permission of rule 46A. No arguments were made before us vis-a-vis Ground
No.1 raised by the Revenue challenging the action of the
CIT(A) in admitting the additional evidence produced by the
assessee. This ground of appeal is therefore dismissed.
The only remaining issue in the present appeal relates
to addition made on account of cash found deposited in the
bank account of the assessee, which was deleted by the
Ld.CIT(Appeals).
Briefly stated, the assessment in this case was
reopened u/s 147 of the Income Tax Act, 1961 (in short ‘the
Act’) on the basis of AIR information regarding cash
deposits, amounting in all to Rs.42,52,000/-,made by the
assessee in his Saving Bank Account maintained by him
with State Bank of Patiala. The assessee neither filed his
return of income in response to notice issued u/s 148 of the
Act, nor furnished any reply to notice issued subsequently
u/s 142(1) of the Act. The Assessing Officer, therefore,
framed an ex-parte assessment order u/s 144 r.w.s. 147 of
the Act treating the entire cash deposited in the bank of
Rs.42,52,000/- as unexplained income and made addition of
the same to the returned income of the assessee.
Aggrieved by the same, the assessee carried the matter
in appeal before the Ld.CIT(Appeals). Before the
Ld.CIT(Appeals), the assessee filed evidences of the source
of the cash deposited in the bank in the form of two sale
deeds in respect of agricultural land sold by him and
sought admission of the same as additional evidence
submitting that the same could not be admitted earlier
since he was an illiterate person of rural background, not
conversant with Income Tax Law and could not attend the
proceedings because of ongoing matrimonial dispute of his
only son, which caused great distress and because of this,
he suffered prolonged depression. The evidence in the form
of papers relating to divorce of his son, a copy of medical
prescription of the assessees doctor, was filed before the
Ld.CIT(Appeals). The written submissions of the assessee,
alongwith application for admission of additional evidence,
were sent to the Assessing Officer for his comments, which
are reproduced in para 5.3 of the CIT(Appeals). The report
of the Assessing Officer was thereafter forwarded to the
assessee for his comments, who did not file any counter
comments. The Ld.CIT(Appeals) on the basis of material on
record accepted the assessee’s plea for admission of
additional evidences and on the basis of the documents
produced before him which were examined by the Assessing
Officer also, who the CIT(Appeals) noted had accepted the
genuineness of the transactions relating to the sale of
agricultural land, accepted the source of the cash deposited
in the bank of the assessee as out of said land sold and
deleted the addition made by the Assessing Officer. The
Ld.CIT(Appeals) noted that the only reason with the
Assessing Officer for upholding the addition was the delay
in time lag in receiving the said cash from the land sold and
depositing the same in the bank which he stated was not
valid enough to hold that the cash deposited in the bank
could not be attributable to that received from sale of
agricultural land by the assessee. Relevant findings of the
Ld.CIT(Appeals) at para 5.5 of his order are as under:
“5.5 1 have considered the observations of the Assessing Officer as made by him in the assessment order while framing assessment in this case under section 144 of the Act and thereafter making the impugned addition as well as his comments on the submissions of the assessee dated 10.05.2016 and on the petition filed by the assessee for the admission of additional evidence. I have also considered written submissions of the assessee filed through his learned AR vide letter dated 10.05.2016 on the issue under reference. 1 have further considered other material placed by the assessee on record. On careful consideration of the rival contentions, I am of the opinion that the additional evidences produced by the assessee in the form of copies of sale deeds should be admitted for the sake of justice as the assessee was having reasonable cause and genuine difficulty for not attending assessment proceedings. During the course of remand proceedings, the assessee also produced evidence with regard to sale of agriculture implements for Rs.3,12,000/- to further explain the source of cash deposits in his saving bank account maintained by him with SBOP, Amargarh. In my opinion, the time gap between receipt of cash from sale of agriculture land and in depositing cash into the bank account will not matter unless and until it is proved that the assessee has utilized sale proceeds of the agriculture land somewhere else. The only objection of the Assessing Officer was that there is a time gap between the receipt of cash and cash deposits in the bank account and apart from this he does not have any objection. The Assessing Officer has also failed to prove that the assessee apart from having agriculture income is also having any other source of income from which cash deposits can be made. The genuineness of documents produced by the assessee has also not been doubted. The Assessing Officer also failed to establish that the assessee has utilized the sale proceeds of agriculture land somewhere else. In the absence of proof with regard to the utilization of sale proceeds of the agriculture land, the assessee cannot be denied the benefit of such receipts. Apart from this, the assessee has also produced copy of another sale deed dated 26.11.2018 vide which a plot of land measuring 250 square yard was sold for an amount of Rs.2,00,000/-. The sale proceeds of agriculture land and agricultural implements were to the extent of Rs.42,62,000/- which is insufficient to make cash deposits of Rs.42,52,000/- in the bank account of the assessee. 1 am, therefore, of the opinion that the assessee has satisfactorily explained the source of cash deposits of Rs.42,52,000/- in his saving bank account maintained by him with SBOP, Amargarh by producing documentary evidence in the form of sale deeds and document with regard to sale of agricultural implements. Under such circumstances and looking to totality of facts, the addition of Rs.42,52,000/- made by the Assessing Officer in this case
on account of unexplained cash deposits in the bank account of the assessee maintained by him with SBOP, Amargarh is, therefore, directed to be deleted. In the result, the grounds No. 1, 2 and 3 of appeal taken by the assessee are allowed.” 6. Aggrieved by the same, the Revenue has come up in
appeal before us taking following ground no.2:
“2. That the CIT(A)-2, erred in holding that the AO was unable to prove that the assessee had any income other than the agriculture land as it was incumbent upon the assessee to prove that the source of cash was from a certain source and not the AO.” 7. During the course of hearing before us, the Ld. DR
though fairly conceded that the genuineness of the
transactions of sale of agricultural land by the assessee had
not been doubted by the Assessing Officer in Remand
Report after examining the documents which were sent to
him by the Ld.CIT(Appeals), the Ld. DR though still
emphasized the fact that there was inordinate period of
delay in receiving the cash on sale of agricultural land and
depositing the same in the bank account of the assessee
which cast serious doubts on the genuineness of the
explanation given by the assessee.
We have considered the submissions of the Ld. DR and
also gone through the orders of the Assessing Officer and
CIT(Appeals). We find no reason to interfere in the order of
the CIT(Appeals). Undisputedly, as admitted by the Ld. DR
also before us the assessee had received cash amounting to
Rs.39,50,000 on account of sale of his agricultural land in
the financial year 2005-06. The fact that the assessee had
received Rs.3 lacs on selling his agricultural implements is
also not disputed. Both these facts have admittedly been
examined and confirmed by the Assessing Officer also in his
Remand Report as under:
“2.3 Aggrieved with order of the Assessing Officer passed u/s 144 of the I.T. Act,1961, The assessee went in Appeal before the CIT(A) wherein he filed additional evidence u/s 46A of the Income Tax Rules 1962. 3. An examination of the additional evidence i.e. sale deeds of agriculture land shows that the assessee sold his ancestral agricultural land measuring 37 bigha 7 biswa 20 biswai at Vill. Amargarh on 15.02.2006 for Rs 39,50,000/- to Sh. Jagjit Singh s/o Sh.Bhajan Singh R/s H.N. 73-D, Model Town, Patiala. Whereas the assessee deposited Rs. 2,52,000/- in his saving band account No. 55057164089 with State Bank of Patiala, Amargarh during the period 01.04.2008 to 31.03.2009. It is surprising that the assessee had kept cash of Rs. 39,50,0007- with him for such a long period. On perusal of certain documents submitted by the assessee as additional evidence shows that it is an after thought on the part of the assessee just to suit things in his favour. The additional evidence filed by the assessee has no substance and nothing to do with source of cash deposits of Rs. 39,50,000/-. The certain documents submitted by the assessee as additional evidence before your goodself does not relate to the financial year relevant to A.Y. 2009-10. 3.1 Now with regard to the remaining amount of Rs.3 lacs is concerned. In this regard, in order to verify the genuineness and correctness of the additional evidence filed by the assessee before your goodself, a letter was written to Sh. Gubinder Singh to attend the office. In response to it, Sh. Gubinder Singh appeared on 09.01.2017 and he was asked to furnish necessary supporting evidence i.e. Form No. 'J' with regard to remaining amount of Rs. 3,00,000/- which he claimed to have been his past savings from agriculture income. After discussion, the case fixed for 12.01.2017. On the given date, Sh. Gubinder Singh appeared but failed to furnish the requisite Form No. 'J' to substantiate his claim that he had deposited Rs.3,00,000/- out of his past savings from agriculture income. During the proceedings, the assessee stated that he sold agriculture implements for an amount of Rs.3,12,000/- in August, 2008 to Sh. Gurmit Singh of Vill. Mehsumpur and after selling these agriculture implements he deposited this amount in SBOP, Amargarh. Thereafter, in order to know the truth, the statement of Sh.Gurmeet Singh (Purchaser) recorded on 17.02.2017. In his statement, he stated that he had purchased agriculture implements worth Rs.3,12,000/- in August, 2008 from Sh. Gubinder Singh. 4. In view of the forgoing facts, and after examining the additional evidence filed by the assessee, it is found that the assessee sold his agricultural land amounting to Rs. 39,50, OOO/- on 15.02.2006 in the F. Y. 2005-06 relevant to A. Y. 2006-
07 and deposited the amount of Rs. 39,50, 000/- in SBOP, Amargarh during the F.Y. 2008-09. Thus, the assessee kept sale proceeds of the agriculture land with him for a such long time. Similarly, on perusal of the additional evidence and enquiry made in this regard revealed that the assessee deposited Rs.3,00,000/- in the bank account after selling out his agriculture implements and not his past saving income earned from agriculture income as claimed by the assessee in his additional evidence. Thus, the addition evidence filed by the assessee needs to be rejected and additions made by the AO kindly be confirmed.” 10. Having accepted this fact that the assessee did receive
amount equivalent to the amount found deposited in his
bank from the sale of land and agricultural implements,
and considering the fact that the Revenue has failed to
prove its utilization elsewhere nor has been able to show
that the assessee had any other source of income from
which cash deposits could have been made, we completely
agree with the Ld.CIT(Appeals) that the cash deposited in
Bank stands adequately explained as sourced from the sale
of the said agricultural lands and implements. There
remains, we hold, no reason to hold the cash deposited as
unexplained, more particularly for the only reason that
there is time gap of three years in receiving the cash and
depositing the same in the bank. We agree with the
Ld.CIT(Appeals) that the said time gap does not matter
unless and until it is proved that the assessee had utilized
the sale proceeds of the agricultural land somewhere else or
has any other source of income to which the deposits can be
attributed. Therefore, we are in complete agreement with
the Ld.CIT(Appeals) that the assessee cannot be denied the
benefit of the receipts, the genuineness of which has been
accepted by the Assessing Officer. In view of the above, we
uphold the order of the Ld.CIT(Appeals) in deleting the
addition made on account of the cash found deposited in
the bank of the assessee. Ground of appeal No.2 is
therefore dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court.
Sd/- Sd/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated :1st May, 2018 *Rati* Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR Assistant Registrar, ITAT, Chandigarh