Income Tax Appellate Tribunal - Chandigarh
Bodh Raj Narang, , Panchkula vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES 'A' CHANDIGARH
BEFORE SHR I G.S.PANNU, ACCOUNTANT MEMBER
AND MS SUSHMA CHOWLA, JUDICIAL MEMBER
ITA No. 51/Chd/2010
Assessment Year: 2006-07
Shri Bodh Raj Narang, Vs The Income Tax Officer,
H.No. 447, Sector 10, Ward-1, Panchkula
Panchkula.
PAN: AAKPN 2656 F
(Appellant) (Respondent)
Appellant By : Shri S.K. Mukhi & Ms J yoti
Respondent By: Smt. Jai Shree Sharma
ORDER
PER SUSHMA CHOWLA, JM
The appeal by the assessee is against the order of CIT(A)- Panchkula dated 16.10.2009 relating to assessment year 2006-07 against the order passed under section 144 of the I.T. Act.
2. The assessee has raised the following grounds of appeal:-
1 That the orders of the Ld. CIT(A), Panchkula upholding the assessment order is erroneous and uncalled for as no sufficient opportunity was given to the appellant.
2 That the Assessing Officer, as well as the Ld. CIT(A) erred in passing the order ignoring appreciation of proper facts while passing the cryptic order making additions and ignoring that the old man of 73 years being a senior citizen was not in a position to represent his case properly also being not represented by any professional expert.
3 That the additions made by the Assessing Officer and upheld by the Ld. CIT(A) being based on non appreciation of proper facts and evidences are bad in law and needs due interference by this Hon'ble Bench.2
4 That without prejudice to the above grounds of appeal the appellant disputes the additions confirmed by the appellate authority as highly excessive.
3. The assessee has not pressed the ground No.1, against non allowance of sufficient opportunit y hence the same is dismissed as not pressed.
4. The brief facts of the case are that the assessee had furnished return of income showing total income of Rs. 1,43,913/-. The Assessing Officer issued several notices for compliance, which were not complied with by the assessee. The Assessing Officer noted that the assessee was maintaining a bank account with Centurion Bank of Punjab Ltd in which there were several deposits and withdrawals as incorporated at pages 1 & 2 of the assessment order. The Assessing Officer computed the peak deposits in the said bank account at Rs. 13,04,610/-. As the assessee had failed to furnish any evidence to prove the genuineness of the source of deposits in the bank accounts, the same were treated as income of the assessee under the provisions of section 68 of the Income Tax Act. Before the C IT(A), the assessee appeared in person and furnished written submissions. The contention of the assessee was that he and his famil y members had sold some portion of their ancestral agricultural land in District Sirsa, Haryana, for which two sales deeds were executed on 5.5.2005 for consideration of Rs. 2,54,000 and Rs. 2,91,000/- respectivel y. The whole consideration of the land was retained by the assessee being the youngest amongst the four brothers and deposited in his bank account. It was further claimed by the assessee that the agricultural land sold did not fall within any municipality, town or 3 notified area committee and hence was exempt from capital gain tax. Further, a sum of Rs. 9 lacs was received on sale of agricultural land measuring 3 kanals in District, Sirsa, Haryana and the amount was deposited on 8.10.2005. The said land also belonged to the assessee and his brothers. The written submissions of assessee are incorporated at page 2 of the appellate order. The CIT(A) noted from the perusal of the two sale deeds produced of Rs. 2,54,000 + Rs. 2,91,000/- respectivel y that there were nine co-owners of the land and the assessee's share in the sale consideration came to about Rs. 60,000/-. Further, the land was sold on 5.5.2005 and the two deposits of Rs. 2 lacs each were made on 24.8.2005. Before the CIT(A), the assessee failed to file any confirmation from the other eight co-owners with regard to his claim that the whole of the sale consideration was retained by him and deposited in his account and hence the same was rejected. The CIT(A) also observed that the assessee had furnished on record Power of Attorney given by assessee and his brother to one Shri Jugal Kishore dated 10.5.2005, with regard to the agricultural land measuring 3 kanals in village Talwarakhurd, Distt. Sirsa, but nothing is mentioned about the sale of the land as per the Power of Attorney. The CIT(A) thus held that the Power of Attorney does not prove anything with regard to the source of deposit of Rs. 9 lacs in the bank accounts. Accordingl y, addition of Rs. 13,04,610/- was upheld by the CIT(A). The assessee is in appeal before us.
5. The learned AR for the assessee drew our attention to the copy of sale deed furnished at pages 8 to 12 of the paper book for a total consideration of Rs. 2,91,000/- and at pages 13 to 17 in respect of sale of land at Rs. 2,51,000/-. The learned AR pointed out that the assessee was 4 claiming the source of deposit of Rs. 5,45,000/- out of the sale proceeds of agricultural land and the balance out of his savings and savings of his wife. The learned AR further placed reliance on the affidavit filed before CIT(A) by the other co-owners under which they have affirmed to have given up their share in the sale proceeds in favour of the assessee. The affidavits are placed at pages 1 to 3 of the paper book and were available on record of CIT(A) as produced before us during the course of hearing. In respect of the savings of his wife, the learned AR placed reliance on the return of income filed by the wife, necessary supports for which are placed at pages 21 to 25 of the paper book. The learned DR for the Revenue pointed out that the factum of the sale of agricultural land was not declared in the return of income. Further, the date of receipt of sale proceeds do not tally with the deposits made in the bank account and the two are significant as the date of deposit is being linked with the transaction of sale of land. The learned DR further pointed out that assessee's share in the aforesaid transactions works to onl y Rs. 60,000/-, as the land holding is owned by 9 co-owners. The learned DR also pointed out that no evidence of balance sale of land has been filed.
6. We have heard the rival contentions and perused the records. The assessee during the year under consideration had made certain deposits in his bank account with Centurion Bank of Punjab. The assessee failed to furnish any explanation before the Assessing Officer. However, before the CIT(A), the claim of the assessee was that part of the deposits were out of the sale proceeds of agricultural land sold for consideration of Rs. 2,54,000 and Rs. 2,91,000/- respectivel y, the two sales deed being executed on 5.5.2005. The said sale of land was claimed by the assessee to be exempt from capital gains tax as the said agricultural land did not 5 fall within any municipalit y, town or notified area committee. The assessee had deposited Rs. 2 lacs each on 24.8.2005 i.e. Rs. 4 lacs. The assessee claims that the said agricultural land was jointl y owned by the assessee alongwith his brothers. However, the sale proceeds in respect of the two sale deeds executed on 5.5.2005 were retained by the assessee in entiret y, as all the others had given up their shares in sale consideration. The copy of the sale deeds are placed at pages 8 to 12 and 13 to 17 of the paper book. The perusal of the said sale deed reveals the propert y to be joined owned by nine co-owners as under:-
a) Shiv Dayal S/o Shri Mohan Lal
b) Budh Ram S/o Shri Mohan Lal ( the assessee before us)
c) Dev Kumar S/o Bhanju Ram
d) Rukmani Devi w/o Shri Bhanju Ram
e) Vijay Kumar d/o Bhanju Ram
f) Chuni Lal S/o Shri Bhanju Ram
g) Dinesh Kumar S/o Wasakha Ram
h) Indira Ram D/o Wasakha Ram
i) Uttmi Devi w/o Wasakha Ram
7. The contention of the learned AR for the assessee was that the propert y was jointl y owned by four brothers and on the demise of two of the brothers, his legal heirs had become joint owners of the propert y. The learned AR for the assessee had also furnished on record the copy of the affidavits furnished before CIT(A) of Shri Shiv Dayal Narang, Shri Dev Kumar S/o Shri Bhanju Ram, Shri Dinesh Kumar S/o Wasakha Ram at pages 1 to 3 of the paper book. Similar affidavits have been filed by the persons, which reads as under:-
"AFFIDAVIT I, Shiv Dayal Narang (S.D. Narang) son of Late Shri Mohan Lal Narang, resident of House No. 955, Sec 7, Panchkula do here solemnly affirm and declare as under:
1 That I was one of the beneficiary in the Sale Deeds pertaining to Agricultural land bearing khewat No. 1238, Khatau No. 157, situated at village Talwara Khurd, Distt. Sirsa and the sale deeds registered with the 6 Sub Registrar, Ellanabad vide Registration No. 301 and 302, book No. 1, volume No. 41 page No. 34 to 36 and 37 to 39, both dated 5.5.2005 with consideration of Rs. 2,54,000/- and Rs. 2,91,000/- respectively. 2 That the entire amount of my share was given to my younger brother Shri Bodh Raj Narang son of late Shri Mohan Lal Narang resident of House No. 447, Sec 10, Panchkula.
Sd/-
Deponent Verification:-
Verified that the contents of my above affidavit are true and correct to the best of my knowledge and belief and that nothing has been concealed therein.
Place: Chandigarh Sd/-
Date: 20.7. Deponent"
8. During the course of hearing of the present appeal, the assessee furnished an amended affidavit of Shri Dev Kumar S/o Shri Bhanju Ram and Dinesh Kumar S/o Wasakha Ram. The contents of the said affidavits are as under:-
"AFFIDAVIT I, Dev Kumar son of Late Shri Bhanju Ram, resident of 8 Marla Colony, Patel Nagar, Hisar do hereby solemnly affirm and declare as under: 1 That I submitted an earlier affidavit dated 15.7.2009, stating there in that entire share of my father in the sale of agricultural land situated at Village Talwara Khurd, Distt. Sirsa (25%) vide sale deed, both bearing Registration No. 301 & 302 Book No. 1, Vol No. 41, page No. 34 dated 25.5.2005 with the Sub Registrar, Ellanabad District Sirsa for Rs. 2,54,000.00 & Rs. 2,91,000.00 respectively was given to my uncle Shri Bodh Raj Narang son of Shri Mohan Lal Narang, Resident of House No. 447, Sec 10, Panchkula.
2 That the entire share of my father was given to my uncle, who is my father's youngest brother, with the consent of all the legal heirs of my father.
3 That my earlier affidavit was also given by me on behalf of all the legal heirs of my late father, with their consent.
Sd/-
Deponent 7 Verification:-
Verified that the contents of my above affidavit are true and correct to the best of my knowledge and belief & nothing has been concealed therein.
Place: Chandigarh Sd/-
Date: Deponent"
9. In view of the above said evidence filed by the learned AR for the assessee wherein the parties have specificall y affirmed that the entire receipts of the sale of agricultural land totaling to Rs. 2,54,000/- and Rs. 2,91,000/- have been handed over to the assessee before us by the individual co-owners, we are of the view that the explanation of the assessee to the extent of Rs. 5,45,000/- (Rs. 2,54,000 + Rs. 2,91,000/- ) merits to be accepted. The total peak deposits in the saving accounts were Rs. 13,04,610./- and after allowing the credit for Rs. 5,45,000/-, the assessee had to furnish the evidence in respect of the balance deposit of Rs. 7,59,610/-. The explanation of the assessee before C IT(A) in this regard was that assessee along his brothers had sold another piece of agricultural land, for which Power of Attorney was executed and copy of which was filed. The assessee failed to produce any evidence of sale transaction except the copy of Power of Attorney executed either before CIT(A) or before us. In view thereof, the said plea was rejected by CIT(A). We uphold the same in the absence of any document evidencing the alleged sale of another agricultural land. Alternativel y, the source of the balance deposits was explained by the learned AR before us to be out of savings of the assessee and the savings of his wife. The assessee has furnished on record the return of income filed by his wife relating to Assessment Year 2005-06, in which she had shown income from pension 8 at Rs. 69,035/-, rental income of Rs. 30,000/- and deposit in FDS account with Chandigarh, LIC Employees Society of Rs. 2,96,000/-. The total taxable income for the year was declared at 73,447/-. The assessee during the under consideration had filed return of income showing total income of Rs. 1,43,913/-. In the facts and circumstances of the case, we are of the view that the assessee has failed to justifiabl y explain with evidence his claim about the availability of cash of Rs. 7,59,610/-, i.e. the balance of peak credits worked by the Assessing Officer. However, we are of the view that credit for past savings to the extent of Rs. 1,00,000/- may be allowed to the assessee. In the absence of an y evidence filed by the assessee justifying the availabilit y of cash of Rs. 6,59,610/-, we uphold the addition of Rs. 6,59,610/- under the provisions of section 68 of the Income Tax Act. The grounds of appeal raised b y the assessee are thus partl y allowed.
10. In the result, appeal of the assessee is partl y allowed.
Order Pronounced in the Open Court on this 30 t h day of August, 2010.
Sd/- Sd/-
(G.S.PANNU) (SUSHMA CHOWLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated : 30 t h August, 2010
Rkk
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The Ld. D.R.