Income Tax Appellate Tribunal - Amritsar
Shri Lakhwinder Singh, Amritsar vs Income Tax Officer Ward 3(2), Amritsar on 14 June, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
Before Sh. N. S. Saini, Accountant Member
And
Sh. N. K. Choudhry, Judicial Member
ITA No. 656/Asr./2016 : Asstt. Year : 2010-11
Shri. Lakhwinder Singh, Vs Income Tax Officer,
C.A. Ashwani Kalia, 237, Ward-3(2),
Basant Avenue, Maqbool Road, Amritsar
Amritsar
(APPELLANT) (RESPONDENT)
PAN No. CEOPS9859D
Assessee by : Shri. Aswani Kalia, CA
Revenue by : Sh. Charan Dass, DR
Date of Hearing :15.05.2019 Date of Pronouncement : 14.06.2019
ORDER
Per N. S. Saini, Accountant Member:
Thi s i s an appeal filed by the assessee agai nst the orde r of Commi ssi oner of Income Tax(Appeal s)-1, Amri tsar dated 08.09.2016.
2. In ground No. 3 of the appeal , the gri evance of the assessee i s that the Commi ssi oner of Income Tax(Appeal s) erred i n confi rming addi ti on of Rs.47,48,000/- as unexpl ai ned i ncome from purchase of l and.
3. The Assessi ng Offi cer observed that duri ng the year under consi derati on, the assessee has purchased 7 acres of l and i n Chati wi nd Vill age at Rs.24/- l akh per acre. The sha re of the assessee was 2.475 acre and accordi ngl y, the assessee made i nvestment i n purchase of agri cultural l and of Rs.59,48,000/-
2 ITA No. 656/Asr./2016Lakhwinder Singh and expendi ture Rs.1,28,000/- w a s i ncurred on stamp duty and in thi s way the total unexpl ai ned i nvestment was Rs.60,68,000/-. The assessee has shown i nvestment of Rs.13,20,000/-. The bal ance am ount of Rs.47,48 ,000/- was added as unexpl ai ned i nvestment u/s 69 of the Act, because the assessee fail ed to produce the books of account in connecti on wi th busi ness of property deal er.
4. On appeal , the Commi ssi oner of Income Tax(Appeal s) observed that pri mary contenti on of the assessee i s that the basi s of addi ti on has not been confronted to the assessee. Th e Commi ssi oner of Income Tax(Appeal s) obse rved that the assessee repl i ed to the basi s of addi ti on on 26.03.2013 (para 16 of the assessment order). Th e objecti on of the assesse e that opportuni ty of cross exami nati on was not gi ven has no vali di ty, si nce the assessee w as i n jail and admi tted to have purchased the l and at Rs.24,00 ,0 00/- per acre before poli ce. Hence, the addi ti on has ri ghtly been made by the Assessi ng Offi cer.
5. We have heard the ri val submi ssi ons and peruse d the orde rs of the l ower authori ties and materi al s avail abl e on record. In the instant case, addi ti on of Rs.47,48,000/- was made by the Assessi ng Offi cer on account of al l eged undi scl osed i nvestment for purchase of l and. Accordi ng to th e Assessi ng Offi cer i n a statement gi ven by the assessee in sui t No. 22 dated 29 .08.2011, the assessee has admi tted of havi ng purchase of l and @ Rs.24 l akh per acre. The assessee duri ng the year under consi derati on purchased 7 acres of l and. The assessee had shown Rs.13,20,000 /- as i nvestment i n the sai d 3 ITA No. 656/Asr./2016 Lakhwinder Singh l and. Therefore, the Assessi ng Offi cer added Rs.47,48,000/- t o the i ncome of the assessee w hi ch was confi rmed by the Commi ssi oner of Income Tax(Appe al s).
6. We fi nd that it i s not i n di spute that the sai d statement was not made for i ncome tax assessment. The Hon'bl e Madras Hi gh Court i n the case of CIT Vs N. Swamy (2000) 241 ITR 363 (Mad.) has hel d as under:
"The assessee's income is to be assessed by the Income Tax Officer on the basi s of the material which is required to be conside red for the purpose of assessment and ordina rily not on the basis of the statement which the assessee may have given to a third party unless there is material to corroborate that statement of the assessee given to a third party, even if it be a bank. The mere fact that the assessee had m ade such stateme nt by itself cannot be treated a s having resulted i n an irrebuttable presumption against the assesse e. The burden of showing that the assessee had undisclosed income is on the Revenue. That burden cannot be said to be discharge d by merely referring to the statement given by the assessee to a third party in connection with a transaction which was not directly related to the assessment and making that the sole foundation for a finding that the assessee had delibe rately suppressed his income."
7. Before us, the assessee coul d not expl ain the ci rcumstances i n whi ch the sai d statement was given by hi m.
8. Further, i t i s al so observed that no materi al has been brought on record by the Revenue by maki ng i ndependent i nqui ry to corroborate the sai d statement. In these ci rcumstances, in our consi dered vi ew, i t shall be in the i nterest of justi ce to restore the i ssue back to the fil e of the 4 ITA No. 656/Asr./2016 Lakhwinder Singh Assessi ng Offi cer for adjudi cati on afresh after prope r veri fi cati on and after all owi ng reasonabl e opportuni ty of heari ng to the assessee. We order accordi ngly. Thus, thi s ground of appeal i s all owed for sta ti sti cal purposes.
9. In ground No. 1 of the appeal , the gri evance of the assessee i s that the Commi ssi oner of Income Tax(Appeal s) erred i n confi rming addi ti on of Rs.7,09,000/- made by the Assessi ng Offi cer as unexpl ai ned deposi t i n bank account.
10. The bri ef facts of the case are that the Assessi ng Offi cer observed that the asse ssee has ba nk account namel y, Yes Bank a/c No. 0519110000800. The Assessi ng Offi cer observed that the assessee made cash deposi ts in the bank account as under:
26.10.2009 Initial funds Rs.5000.00 18.11.2009 Cash Deposits, Rs.1,00,000.00 Amritsar 03.12.2009 Cash Deposits Rs.99,000.0
11.12.2009 Cash Deposits, Rs.6,00,000.00 Amritsar 17.12.2009 Cash Deposits, Rs.5,000.00 Amritsar 31.03.2010 Cash Deposits, Rs.1,00,000.00 Amritsar Total dep osits cr edits Rs.9,09,000/-
11. The assessee submi tted that he was an ol d assessee an d filing Income Tax Return regul arl y. He fil ed bal ance sheet al ong with capi tal account for the fi nanci al year 2008-09 rel evant to the assessment year 2009-10 showi ng cash bal ance of Rs.6,41,820/-.
5 ITA No. 656/Asr./2016Lakhwinder Singh
12. The Assessi ng Offi cer di d not find the expl anati on of the assessee sati sfactory and therefore, treated the cash deposi t i n bank account and added to the i ncome of the assessee.
13. On appeal , the Commi ssi oner of Income Tax(Appeal s) hel d that the openi ng cash in hand i s qui te huge when compared to the assessee i ncome shown for t he vari ous assessment years. No basi s for the openi ng cash i n hand and no evi dence has been brought on record to su pport the same i nspi te of several opportuni ty provi ded. He observe d that however the benefi t of wi thdrawal of l oan whi ch i s wi thdrawn from bank. Hence, he sustai ned addi ti on of Rs.7,09 ,00 0/- and pa rtl y all owed the appeal of the assessee.
14. In ground No. 2 of the appeal , the gri evance of the assessee i s that the Commi ssi oner of Income Tax(Appeal s) erred i n confi rming the addi ti on of Rs.12,20,500/- made by the Assessi ng Offi cer by treati ng the amount of unsecured l oans a s accommodati on entries.
15. The Assessi ng Offi cer observed that the assessee has made sou rce of i nvestment in i mmovabl e prope rty of Rs.12,20,000/-. The assessee e xpl ai ned the source for the same as unsecured l oan taken by the assessee from the foll owi ng persons:
"i) Harwinder Singh Rs.200000
ii) Anoop Aggarwal HUF Rs.220000
iii) Smt. Sushma Sharma Rs.300000
iv) Dr. K.S. Sha rma Rs.200000
v) Shri. Vishal Sharma Rs.300000"
6 ITA No. 656/Asr./2016
Lakhwinder Singh
16. The Assessi ng Offi cer on exami ning the bank account of l oan credi tor observed that cash deposi ts of the same amount on or a day before the i ssue of cheque was made by the l oan credi tors. The Assessi ng Offi cer observed that the assessee di d not produce l oan credi tors nor the l oan credi tors have adhere to the summons i ssued. Therefore, he opi ned that i t seems that Rs.12,20,500/- are a ccommodati on entri es. Hence, he made addi ti on of the same u/s 68 of the Act to the income of the assessee.
17. On appeal , the Commi ssi oner of Income Tax(Appeal s) observed that the l oans taken by the assessee a re devoi d on genui neness as the a ssessee fai l ed to show why unsecure d l oans were gi ven and credi bili ty of the borrowe rs had not bee n proved. Therefore, the l oans are nothi ng but accommodati on entri es wherei n in most cases cash has been deposi ted few days before the i ssue of cheque or DD from the bank account. Therefore, he confi rmed the order of the Assessi ng Offi cer.
18. For ground Nos. 1 & 2 of the appeal , i t was submi tted by the Authori zed Representati ve of the assessee that as the assessee w as i n jai l compli ance coul d not be made by the assessee an d prayed f or all owi ng of one more opportuni ty to the assessee.
19. As we have al ready restore the issue in ground no. 3 of the appeal to the fil e of the Assessi ng Offi cer, i t shall be i n the i nterest of justi ce to al so restore the i ssues i nvol ved i n ground nos. 1 & 2 of the asse ssee to the fil e of the Assessi ng Offi cer to al l ow one more opportuni ty to the assessee and thereafter 7 ITA No. 656/Asr./2016 Lakhwinder Singh adjudi cate the i ssue afresh as per l aw. Thus, these grounds of appeal of the assessee are all owed for stati sti cal purposes.
20. In the resul t, the appeal of the assessee i s all owed for stati sti cal purposes.
(Order Pron ou n ced in th e Cou rt on 1 4 t h day of Ju n e 20 1 9 at Am rit sar) Sd/- Sd/-
(N. K. Choudhry) (N. S. Saini)
Judicial Member Accountant Member
Dated: 14/06/2019
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR