Income Tax Appellate Tribunal - Chandigarh
Sh. Navinder Singh, Patiala vs Ito, Rajpura on 28 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH 'B', CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.924/Chd/2016
(Assessment Year : 2011-12)
Sh. Navinder Singh, Vs. The Income Tax Officer,
H.No.792, Sunder Nagar, Ward Rajpura.
Rajpura, Distt. Patiala.
P A N : CDBPS1646G
(Appellant) (Respondent)
Appellant by : Shri Jaspal Sharma, Adv.
Respondent by : Smt.Chanderkanta, Addl.CI T
Date of hearing : 22.03.2018
Date of Pronouncement : 28.05.2018
ORDER
PER ANNAPURNA GUPTA, A.M.:
Th i s a p p e a l h a s b e e n p r e f er r e d by t h e a s s es s e e ag a i n st the order of Ld . C o m m i s si o n er of Income Ta x ( A p p e a l s) , Meerut, C a mp Office P a ti a l a [ h e r e i n a f te r r e f er r e d to as ' CI T( A p p e a l s ) ' ] da t e d 1 0 . 6 . 2 01 6 re l a t i n g t o a s se s sm e n t y e a r 2011-12.
2. B r i e f l y s t a t e d , th e a s s e s se e h a d f i l e d r et u r n of i n c o m e for the i m p u g ne d a s s e s s m e nt year declaring income of R s . 1 , 5 6 , 78 0 / - pl u s a g r i c u l t ur a l i n c o m e o f R s . 1 , 3 5 , 0 0 0 /- . A s s e s s m e nt u / s 1 4 3 ( 3 ) o f t h e I n co m e Ta x A c t , 1 9 6 1 ( i n s h o r t ' t h e A c t ' ) w a s f r a m e d m a ki n g a d d i t i o n o n a c c o u n t o f the following:
1) Unexplained cash deposits in bank = Rs.10 lacs
2) Agricultural income treated as income from undisclosed sources = Rs.1,35,000/-2
3) Bank Interest earned = Rs. 19,632/-
3. Th e a s s e s s e e f i l e d a p p e a l a g a i ns t t h e a f o r e s a i d o r d e r t o t h e CI T( A p p ea l s ) w h o u p he l d a l l t h e a d d i t i o ns m a d e b y t h e A s s e ss i n g Off i c e r .
4. A g g r i e v e d b y t he s a m e , t he a s se s s e e h a s co m e u p i n a p p e a l b ef o r e us .
5. Ground No.1 r ai s e d by the a ss e s s e e is g en e ra l in n a t u r e a nd h e n ce , n e e d s n o a d jud i c a t i o n .
6. In g ro u n d N o .2 the assessee has c h a l l e n g ed t he a d d i t i o n m ad e on a c c o u n t o f u ne x p l a i n e d ca s h d e p o s i t s i n b a n k a c c ou n t of R s . 1 0 l ac s , a nd w h i c h r e ad s a s un d e r :
"2. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in having confirmed the addition amounting to Rs.10,00,000/- made by the Ld.AO u/s 69 of the Income Tax Act, on account of deposits in the bank account of assessee treating the same as assessee's income from undisclosed sources."
7. B r i e f fa c t s r e l e va n t t o t h e i s s u e a r e th a t th e a ss e s s ee w a s f o u n d t o ha v e d e p o s i te d ca s h i n h i s b a nk a c c o u n t, d u r i n g t h e i m p ug n e d a s s e s s me n t y e a r , t o t h e t u ne o f R s . 1 0 lacs. Th e a s s e s s e e c l a i m e d t h e s a m e t o h a v e b ee n r e c e i v e d a s g i f t f r o m h i s fa t h e r - i n -l a w t o th e e x t e n t o f R s .7 l a c s a nd f r o m h i s f at h e r t o t h e e x t en t of R s . 3 l a c s . The a s s e ss e e produced a ff i d av i t s from b ot h. Th e A s s e s s i ng Officer, however, a f te r examining b ot h the donors in detail by r e c o r d i n g t h e i r st a t e m e n t s a n d an a l y z i n g th e i r ag r i c u l t u ral t r a n s a c t i o n s , cam e t o t he c o n cl us i o n t h a t t h e y d i d n o t h a ve t h e s o u r c e a n d c a p a c i t y t o g i ft s u c h s u m s t o t he a s s e s s e e . 3 H e , t h e r e f o re , h el d t h e i m p u g n e d d e p o s i t s t o b e un e x p l a i n ed a n d a d d e d t h e sam e t o t h e i n c o me o f t h e a s s e s s ee .
8. Th e L d . C I T( A p pe a l s ) u p h el d th e findings of the A s s e s s i n g O f fi c er s t a t i n g t h a t th e A s s e s s i n g O ff i c e r h a d e x a m i n e d t h e i ss u e v e r y m i n u t el y a n d h ad b e en a b l e to marshal f a ct s which gave him room to d ra w a d v e r se i n f e r e n c e on t h e i s s u e . Th e L d . CI T( A p p e a l s ) s t a t ed t h a t t h e a s s e s s e e h a d f ai l e d t o b r i n g on r e c o rd e ve n a s h r e d of evidence which could establish the c a p ac i t y and c r e d i t w o rt h i n e ss o f t h e l e n d er s a n d a c co r d s om e l e v e l o f p l a u s i b i l i t y a n d r e l i a b i l i t y t o t he e x p l a n a ti o n r en d e r e d by h i m w i t h r e g a r d t o t h e s o u r c e o f d e p o s i t s o f R s .1 0 l a c s i n h i s b a n k a c c o unt . Th e L d . C I T( A p p e a l s ) , th e r e f or e , i n t h e a b s e n c e o f a n y s u p p o r t i ve e v i d en c e f i l e d b y t h e a s s e s s ee w i t h r e sp e c t to h i s e x p l a n a t i o n r e g a r d i n g s o u r ce o f c a sh d e p o s i t s i n h i s b a n k , u p h e l d t h e a d d i t i o n m ad e b y t h e A s s e s s i n g O f f i ce r.
9. Before us, t he Ld. c o u n s el for a s s e s s ee filed a p p l i c a t i o n f o r ad m i s s i o n o f a d di t i o n a l e v i d en c e a n d s t a t e d therein that all the evidences, now being filed before us, w e r e f i l e d t o t h e A s s e s s i n g Of f i ce r a l s o d u ri n g as s e s s m e n t p r o c e e d i ng s b ut c o u l d n o t b e f i l e d b e f or e th e CI T( A p p e a l s ) s i n c e t h e L d . co u n s e l f o r a s s es s e e w a s d i r e c te d b y t h e C I T( A p p e al s ) t o fi l e o n l y w r i t t en s u b m i s s i on s w i th r e g a r d t o the case and was told t h at the a t t e n da n c e was not n e c e s s a r y. Th e L d . c o un s e l f o r as s e s s e e , t h e re f o re , p l e ad e d t h a t t h e s a i d e v i d e n c e s , g o i n g t o t h e r o ot o f t h e m a t t e r , b e 4 a d m i t t e d i n t he i n t e r e s t o f j u st i c e . Th e L d . D R d i d n o t c o n t r o v e rt t h a t th e s e e v i de n c e s we r e t h e r e b e f o re t h e A O .
10. S i n c e a d m i t t ed l y a l l t h e s e e v i d e nc e s h a d b e e n f i l e d t o t h e A s s es s i n g O ff i c e r , t h e sa m e , w e h o l d, d o n o t c o n s t i t u te a d d i t i o n al e v i d en c e s , s i n c e th e y a l r e a d y f o r me d p a r t o f t h e r e c o r d s o f th e Re v e n u e , v i s - à- v i s t h e i m p u g n ed ca s e o f t he assessee an d were very much available with the C I T( A p p e al s ) a l so . W e , t h e r e f or e , s e e n o r e q ui r e m e n t of f o r m a l l y a d m i tt i n g t h e sa m e as a d d i t i on a l ev i de n c e s a nd proceed to d eci d e the a p p e al on the basis of t he s e e v i d e n c e s.
11. D u r i n g t he c o u rse o f h e a ri n g b ef or e u s , t he L d . c ou n s e l f o r a s s e ss e e p o i n t e d o u t t h a t t he a s s e s s ee h a d r e p e a t e d ly a t t r i b u t ed t h e s ou r c e o f t h e c a s h d e p o s i te d of R s .1 0 l a c s to g i f t s r e c ei v e d f ro m h i s f a t he r - i n- l a w o f R s .7 l a cs a n d f r om h i s f a th e r of R s .3 l a c s . Th e L d . c o u n s e l f o r a s se s s e e d re w o u r a t t e nt i o n to t h e s t a t em e n t s of t h e a f or e s a i d t w o p e r s o ns recorded by t he A s s e s si n g O ff i c e r d ur i n g as s e s s m e nt p r o c e e d i ng s a nd their a f f i da v i t s also a d m i tt i n g to th e a f o r e s a i d f a c ts . Th e L d . co u ns e l f o r a s s e ss e e t h e r e a ft e r d r e w o u r a t te n t i o n t o t h e a s s es sm e n t o r d e r a nd p o i n t e d o u t t h a t t he r ea s o n f o r r e j e c ti n g t he a f o r es a i d e x p l a n a t i o n o f t h e a s s e s s e e w as t h e i n v e s t i g a ti o n o f t h e A s s e s si n g O f f i c e r w h i c h re v e a l ed t h a t b ot h t he pe r s o n s h a d no t s o l d a n y a g r i c u l t ur a l p rod u c e t o th e i r r es p e c t i v e b r o k e rs d u r i n g t h e i m p u g n e d y e a r an d , t h e r e f o r e, t h e c o n c l u s i o n o f th e A O t h a t t h e y c o u l d n o t ha v e b e e n i n p o s se s s i o n o f s u f f i ci en t s u m s t o 5 g i f t t o th e a s se s se e . Th e L d . c o un s e l f o r a s s e s se e t h e r e a f te r s t a t e d t ha t t h e a f o r e s a i d c o n c l us i o n w a s i n c o r re c t , s i n ce b o t h t h e p e rs o ns h a d c l a i m ed th e s o u r c e o f t he i r g i f t a s, besides a g r i cu l t u r a l income, savings and loan f r om brothers. Th e r e fo r e h o l di n g th e m t o b e u n c r ed i t wo r t h y o nl y f o r t h e r ea s o n th a t t h e y w er e f ou n d n o t t o ha v e e a r n e d a n y a g r i c u l t ur a l i n co m e was i n c o rre c t . To s u b s tan t i a t e th e s a m e , t h e L d . c ou n s e l f o r a s s e s see d r e w o u r a t t e nt i o n t o t h e a f f i d a v i t o f h i s f a t h e r , p l a c e d a t P a p e r B o o k p a g e N o .7 s t a t i n g so a s und e r :
"I, Harbhalan Sinqh S/o Sh. Harbans Singh, aged 13 years, resident of Sunder Nagar, Rajpura, Distt. Patiala do hereby solemnly affirm and declare as under:
1. That I am agriculturist and owner in possession of agriculture land msg. 6 Acre.
2. That 1 have given Rs.300000/- (Rs.Three lac) to my son Sh. Navinder Sinqh without any consideration for his personal help on 17.05.2010.
3. That I have given this amount out of my agriculture receipts and previous savings.
DEPONENT VERFICATION:
Verified at Rajpura on this 12th day of April,2013. The contents of the affidavit are correct and true to the best of my knowledge and belief and nothing has been concealed therefrom."
DEPONENT
12. Th e Ld. c o u n s el for as s e s s ee t h e r e a f t er drew our a t t e n t i o n t o t h e s t a t e m e n t o f th e f a t h e r of t he a s s e s s e e r e c o r d e d b y t h e A s s e s s i ng O f f i ce r , w h e r ei n h e r e p e a t e d l y s t a t e d t ha t R s .3 l a c s w a s l y i n g w i t h h i m w hi c h h e h a d g i f t ed t o h i s s on . Th e st a t e m e n t r e a d s as u n d e r :
" Q . 4 P l e as e s t ate h o w an d wh e n th e ag r ic u l tu r al p r o d u c e ar e s o l d?6
A n s : A l l th e ag r i c u l tu r al p r o d u c e ar e b r o u g h t to A n aj M an d i an d ar e s o l d th r o u g h M / s J ag d is h K u mar S an j ay K u mar , S h o p N o . 1 9 , R ajp u r a. A l l th e ag r i c u l tu r al p r o d u c e ar e s o l d in c as h .
Q.5 P l e as e p r o d u c e yo u r ac c o u n t as ap p e ar i n g i n th e b o o k s of ac c o u n ts o f ab o v e me n ti o n e d f ir m f o r th e p e r io d 1 . 4 . 2 0 10 to 3 1 . 3 . 2 0 1 1 ?
A n s : S ir th e ac c o u n t i s n o t r e ad i l y av a i l ab l e me . I t s h al l be s u b mi tte d in yo u r o f f ic e by 1 1 . 9 . 2 0 1 2.
Q.6 H av e yo u g iv e n an y mo n e y/ l o an / ad v an c e to
S h r i N av in d e r S in g h d u r in g th e p e r io d
1 . 4 . 2 0 1 0 to 3 1 . 3 . 2 0 1 1 , if s o pl e as e s ta te h o w mu c h a mo u n t wa s g i v e n an d th e s o u r c e th e r e o f ?
A n s : I h av e g i v e n R s . 3 l ac s to my s o n S h r i N av in d e r S in g h wh i c h was l y i n g wi th me a t h o me .
Q.7 A s al r e ad y s ta t e d b y yo u th a t mo n e y was l y in g wi th yo u a t h o me . P l e as e s t ate o n th e d ate o f g iv in g g if t o f R s . 3 l ac s to yo u r s o n h o w mu c h mo n e y was l y i n g wi th yo u an d wh e r e f r o m i t h as c o me to yo u ?
A n s : I h av e g iv e n g if t o f R s. 3 l ac s to my s o n i n th e mo n th o f M ay, 2 0 1 0 wh i c h I h av e g o t f ro m s al e o f ag r ic u l tu r al p r o d u c e an d as o n th at d ate r s . 3 l ac s we r e wi th me .
Q.8 P l e as e s ta te wh e th e r th e h o u s e h ol d e x p e n se s ar e b ar r e d b y yo u o r b y yo u r s o n ?
A n s : A l l th e h o u s e h o l d e x p e n se s ar e b o r n e b y my son.
Q.9 I a m s h o wi n g yo u th e af f id av i t d t. 1 5 . 4 . 2 0 1 3 p l e as e s ta te wh e th e r i t h as b e e n g iv e n b y yo u ?
A n s : Y e s I h av e g iv e n th e af f id av i t.
13. Th e L d . c o u n s el f o r a ss e s s e e s ta t e d t h at i t i s ev i d e n t f r o m t h e a b ov e th a t R s . 3 l a c s wa s a d m i t t ed l y g i ft e d b y t h e f a t h e r f r o m h i s a g r i c u l t ur a l i n c om e a n d p a s t s a vi n g s w h i ch were available with him in cash.
14. E v e n o t h e r w i s e , t h e L d . c o u n s el f o r a s s e s s e e st a t e d t h a t t h e f a t h er o f t h e a s s e s s ee h a d e a r n e d i nc o m e f r o m 7 a g r i c u l t ur e d u r i n g t h e y e a r . Th e L d . c o u n s e l f or a s s e s s e e pointed out t h at it was c a t e gor i c a l l y s ta t e d be f o r e the A s s e s s i n g O f f i c er t h a t th e f at he r o w n e d 6 a cre s o f l an d e a r n i n g R s . 3 5 , 000 / - p e r a c r e o n th e s a m e a n d Do cu m e n t a r y e v i d e n c e i n t h e fo r m o f j a m a b a n dh i a n d g i r d a w a r i w a s f i l e d t o t h e A s se s s i n g O f f i c e r su b s t a nt i a t i n g th e s a i d c o n t e n t i on vide l e tt e r da t ed 1 2 . 8 . 20 1 3 fi l e d b e f o re the Assessing Officer. Th e L d . c o u n s e l f o r a ss es s e e t h e r e af t e r st a t e d t h a t i t w a s e xp l a i n ed t o t h e L d. CI T( A p p e a l s ) v i d e su b m i s s i o ns d a t e d 2 4 . 2 . 20 1 6 t h a t t h e a g r i cu l tu r a l i n c o m e e ar ne d b y t h e father from hi s a g r i c u l t u ra l l an d was d e p o s i te d by the a s s e s s e e i n h i s n a m e w i t h t h e br o k e r s i n ce h e us e d t o s e l l a g r i c u l t ur a l p rod u c e o n be h a l f of h i s f at h e r an d t h a t s om e ' J ' f o r m s we r e a l s o i s s u e d i n h i s n a m e . C o p i e s o f t h e s a i d ' J' f o r m s fi l e d t o th e A s s e ss i n g O ff i c e r a nd p l ac e d a t P a pe r Book page N o s .2 4 to 29 were also pointed out to us r e f l e c t i n g t h e afo r e s a i d f ac t s . Th e L d . c o u n se l f o r a s s e s s e e , t h e r e f o r e, s t a te d t h a t i t wa s a d eq u a t e l y d em o n s tr a t e d t h at t h e f a t h e r of t he a s s e s s e e h ad e a r n e d a g r i c u l t ur a l i n c o m e d u r i n g t h e y e a r w h i c h w a s s h o wn a s s o l d i n t h e n a m e o f t h e a s s e s s e e w i th t h e b r o k e r . L d . Co u n s e l t h e r ef o r e c o n t e n d ed t h a t t he s ta t e me n t g i ve n by t he b r o k er t o t h e A O , t o t he e f f e c t th a t n o s a l e o f a g ri c u l t u ra l p r o d u c e ha d b e en m a d e b y t h e f a t he r , m er i te d n o c on s i d e ra ti o n a t al l . Th e L d . c o u n s el f o r a s s e ss e e , t he r e f o r e , s t a t e d th a t t h e As s e s s i n g O f f i ce r a n d t h e L d. CI T( A p p e a l s ) h a d n ot c o r r e c tl y a p p re c i a t e d the f a c t s o f t h e c a se b e f o r e m a k i ng t h e i m p u g n e d a d d i t i o n . I t w a s a l s o c o n t en de d t h a t n o o p p o rt u n i t y f o r c r os s e x a m i n i n g 8 t h e b r o ke r w as al s o a f f or d e d t o th e a s s e ss e e , a n d t h e r e f or e w h i c h n o c o g n i za n c e c o u l d b e t ak e n o f th e a v er me n t s o f t h e b r o k e r t o t h e As se s s i n g Of f i c e r.
15. V i s - à - v i s t h e g i f t o f R s . 7 l a c s r e ce i v e d f r om t h e fat h e r - i n - l a w o f th e ass e s s e e , L d . c o u ns e l f o r a s se s s e e c o n t e n d e d t h a t t h e af f i d a vi t o f t h e f a t h e r- i n - l a w an d h i s s t a t e m e nt r e c o r d e d b y t h e A O , c a t e g o r i ca l l y s t a t e d t h a t t h e g i f t s h a d b e e n g i v e n o u t of h i s a g r i c u l tu r al i n c o m e , s a l e pr o c e e d s of personal e ff e c t s, and loan of Rs.2 lacs e a ch from his b r o t h e r s wh o w er e e n g a g e d i n a gr i c u l t u r e. Th e c o n t e n t s o f t h e a f f i d a v i t p l a ce d a t P a pe r B o ok p a g e 3 ar e a s un d e r :
3. That I have given this amount of out of my agriculture receipts and sale proceeds of personal effects and loans from brothers in law Sh. Bhag Singhj S/o Sh. Mehtab Singh, resident of Village Dhuma, Teshil Rajpura, Distt.
Patiala worth Rs.2.00 lacs and Sh. Gurmeet Singh S/o Sh. Labh Singh, resident of Village Bhapal, Tehsil Rajpura worth Rs.2.00 lacs."
16. Th e L d . c o u n s e l f o r a s s e s se e s t ate d t h a t c l e a r l y as p e r t h e a d m i s si o n o f t h e f a t h er - i n- l a w o f t h e a sse s s e e , t h e s o u r c e of t h e g i ft w a s n o t on l y fro m t h e a g r i c ul t ur a l i n co m e but also f ro m loans t a k en f r om his b r o t he r and other s o u r c e s a l s o. Th e L d . c o u n s e l f o r a s s e s s e e s t a t e d t h a t a s i n the case of the father, it was pointed out to the Assessing O f f i c e r t h at t h e f a t h e r - i n- l a w o f t h e a s s e s s e e al so w a s t h e owner of 10 ac r e s of land an d e v i d e nc e s by way of j a m a b a n d hi a n d g i r d a w a r i o f h i s l a n d p r o v i n g o w n e r s h i p were f i l ed . Th e Ld. c o u n se l fo r a s s e s se e s ta t e d that c o n s i d e r i n g t h e a b o v e f a c ts , t h e A s s e s s i n g O f f i ce r a n d t he L d . CI T( A p p e a l s ) h a d e r r e d i n m a ki n g t h e i m p ug n ed a d d i t i o n 9 m e r e l y o n t h e b as i s o f t he s t a t eme n t o f t h e b r o k er w h o w a s n o t e v e n a l l o w ed t o b e cr o s s e xam i n e d b y t h e a sse s s e e .
17. Th e L d . D R , o n t h e o t h e r h a n d , r e l i e d u p o n t h e o r d e r o f t h e l o w e r a uth o r i t i e s a n d s ta te d t h a t th e i n ve st i g a t i o n o f t h e A s s e ss i n g Off i c e r c a te g o r i ca l l y p r o v e d t h a t the s a i d t wo p e r s o n s w e r e no t c r e di t w o r th y f o r m a k i n g t he i m p u gn e d g i f t . Th e L d . D R p o i n t e d o u t t ha t t h e b r o ke r o n e xa m i n a t i o n h a d c a te g o r i ca l l y s t a t e d t h at n o sa l e w a s m a de b y t h o s e t w o p e r s o n s a n d, t h er e f o r e , t he y c o u l d n o t h a v e s u ff i ci e n t f u n d s a v a i l a b l e t o gi v e g i f t t o t h e a ss e s se e .
18. W e h a v e h e a r d th e r i v a l c o n te n t i o n s a n d g o n e t hr o u gh t h e o r d e r s o f t he a u t h o r i ti e s b e l o w a s a l s o th e d o c u m e n t s p r o d u c e d b e fo r e u s . Th e a d d i t i o n i n t h e p r e s e nt c a s e h a s b e e n m a d e u / s 6 8 o f t h e A c t o n a c c o u n t o f c a s h d e p o s i t ed i n b a n k a nd a t tr i b u t e d to g i f ts r e c e i v e d b y t h e a s s e s s e e , w h i c h r e ma i n e d u n e x p l a i ne d , si n c e t h e do n o r s w e r e n ot f o u n d c r ed i t w o rth y e n o u g h f o r ma k i n g t h e g i f t s . Th e b a s i s f o r a r ri v i n g a t th i s c o n cl u s i o n wa s t h a t w h i l e t he s o u r c e of t h e g i f t s w a s c l a i m e d t o b e f r om a g r i c u l t u ra l i n c o m e , t h e donors allegedly did not h av e any a g r i cu l t u ra l income e a r n e d d u r i ng t he y e a r , a s p e r t he i n v e s t i g at i o n ca r r i e d o u t b y t h e A s s e s s i n g O f f i c e r b y e x ami n i n g t h e b r ok e r t o w h o m t h e y s o l d a g r i cu l t u r a l p r od u c e .
19. W e f i n d t ha t t h e s o u r c e o f t h e c a sh d e p o s i te d h a s b e en a d e q u a t e l y e x p l ai n e d a n d t h e r e i s n o m e ri t i n t h e r e a s o n i ng and basis of the R e v e n ue fo r holding the same as u n e x p l a i ne d . F i rs t l y i t i s c l e a r f r o m t h e f a c t s o n r e c o r d, 10 t h a t t h e do n o r s h a d c l a i me d t o ha v e m a d e th e g i ft n o t o n ly f r o m a g ri c u l t ur al i n c o m e, b u t a l s o t h e i r s a v i n g s a n d l oa n t a k e n f r o m b r o th e r s . Th i s f a c t i s c l e a r l y b r o u g ht o u t f r o m t h e a f f i d a vi t o f th e d o n o r s w h i ch i s n o t c o n t r o v ert e d b y t h e R e v e n u e . Th e r e fo r e , i n a n y c a s e , t h e d o n o r s c o u l d n o t h a v e b e e n h e l d t o be n o t c r e d i t wo r t hy m e r e l y b e ca u se t h e y d i d n o t h a v e a ny a gr i c u l t u r al i n c o me . E v e n o t he r w i s e w e f i nd t h a t t h e a s s e s se e h a d d e m o n s tr a t e d t h e c a p a ci t y o f t h e d o n o r s t o e a r n su f f i c i e nt a g r i c u l tu r a l i n c om e b y su b m i t t i n g e v i d e n c e of o w n er s h i p o f l an d o f 6 a c r e s b y th e f a th e r a n d 10 a c r e s by t he f a the r - i n - l a w , b y s ub m i t t i n g t h e i r J am a b a n d i s . E v e n t h e g i rd a wa r i s o f b o th t h e l a n d s w a s f ur ni s h e d as e v i d e n c e of a g r i c u l t u r a l pr o d u c e g r o w n . Th e R ev e n u e h as n o t c o n t r ov e r t e d t h e s e f a c ts a l so . F u r t h e r w e f i n d t h a t i n the case of the father of the assessee it was also d e m o n s t r at e d t ha t h e h a d s o l d ag r i c u l t u ra l p r o du c e d u r i ng t h e y e a r t h r o u gh h i s s o n, t h e a s s e s s e e , w h o di d n o t o wn a n y l a n d a n d th e r e f o r e c o u l d n o t h a v e p o s si bl y s o l d a n y a g r i c u l t ur a l p r o du c e g r o w n b y hi m . ' J ' f o r m s i n th e n a m e o f the a s se s s e e we r e f u rn i s h e d as e v i d en c e . Th i s fact is c o r r o b o r at e d b y t h e a c t of t h e A ss e s s i n g Of f i c e r hi m s e l f wh o t r e a t e d t h e ag r i cu l t u r a l i n co m e re t u r n e d b y t he a s s e s s e e as i n c o m e f r o m o the r s o u r c e s o n t he b a s i s t h a t t he a s s e s s e e d i d n o t o w n a n y l a n d a n d t h er e f or e c o u l d n o t h a ve p o s s i b l y earned a g r i cu l tu r a l i n c o m e. The assessee, we find, h as s u f f i c i e nt l y d i s ch a r g e d h i s o n u s o f p r o vi n g t h e g en u i n e n e s s o f t h e gi f t r ec e i ve d .
11
20. W i t h o u t c on t r o ve r t i n g t h e a b o v e f a c t s , t h e g i f t s , c o u l d n o t h a v e be e n t re a t e d a s un e x p l ai n e d s o l el y o n the b a s i s o f s t a t e m e n t o f t h e b r o k e r , a t hi r d p a r t y , wh i c h s t a te m e n t w as a d m i t t e d l y n o t ev e n c o n f r o n te d to t h e a s s e s s e e. It is a basic p ri n c i p l e of law that no s t a t em e n t re c o r d e d or evidence c ol l e c te d at the back of the a s s e s se e can be t r e a t e d a s e v i d en c e a g a i n s t i t, wi t h o u t co n f r o nt i n g i t t o t h e a s s e s s e e a n d g i v i n g h i m a n o p p o rtu n i t y t o r e b u t t he s a m e .
21. I n v i e w o f t h e ab o v e , w e h o l d t ha t t h e c a s h d e po s i t ed i n t h e b a n k o f t he a s s e s s e e t o t h e t u n e o f R s .1 0 l ac s s t a n ds d u l y e x p l a i n ed a n d t h e a d d i t i on m a d e i n t h i s r e g a r d i s d i r e c t e d t o b e d el e t e d .
G r o u n d N o. 2 r a i se d b y t h e a s s e sse e i s a l l o w e d .
22. G r o u n d No . 3 r ai s e d b y t h e as se s s e e i s a g a i ns t t h e c o n f i r m a ti o n o f a d d i t i o n o f R s. 1 ,3 5 , 0 0 0 / - m a de by t r e a t i n g a g r i c u l t ur a l i n co m e r e tu r n e d by t h e a s s e s se e a s h i s o w n i n c o m e fr o m u n-e x p l a i n e d s o u r ces . Th e s a i d g r ou n d r e a d s as under:
"3. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in having confirmed the addition of Rs.l,35,000/- made by the Ld.AO u/s 68 of the Income Tax Act, treating the same as assessee's income from undisclosed sources."
23. B r i e f l y st a t e d , th e a s s e s se e h ad r e t u r n ed a su m o f R s . 1 , 3 5 , 00 0 / - a s h i s a gr i c u l tu r a l i n c o m e fo r t he ye a r . W h en c o n f r o n t ed w i t h t h e sa m e , t h e a s s e s s e e a d m i tte d t h a t h e had no a g r i c ul t u r a l i n c om e . Th e Assessing O f f i c e r, t h e r e f o r e, a d d e d t h e s a m e t o h i s i n c o m e a s i n c om e f r o m u n - e x p l a i n e d s o u r ce w h i c h wa s c o n fi r m e d b y th e CI T( A p p e a l s ) . 12
24. D u r i n g t he c o u rse o f h e a ri n g b ef or e u s , t he L d . c ou n s e l f o r a s s e s s ee d r e w o u r a t t e n t i on t o t h e e x p l a n at i o n g i v e n t o t h e L d .CI T( A p p e al s ) i n t h i s r e g a rd t h a t t h e as s e s s ee w a s n o t o w n e r of a ny a gr i c u l t u r al l an d a n d a g ri c u l t ur a l l a n d w as o w n e d b y h i s fa th e r o n l y b u t ag ri c u l t u r a l p r o d u ce w a s s o l d by him in his name and, th e r e f o r e , he i na d v e r t e n tl y r e f l e c t e d t h e a g r i c u l t u r a l i n c o me i n h i s o w n n a me in s t e a d of h i s f a t h er . Th e L d . c o u n s e l f o r a ss e s s e e p o i n t e d ou t t h a t t he documents p rov i n g the o w n er s h i p of f a t h er of the a g r i c u l t ur a l l a nd i n t he f or m o f j a m a b a nd h i and g i r d a wa r i w e r e f i l e d to t he A s s e s si n g Of f i c e r . Th e L d . c ou n s e l f or a s s e s s e e f u r th e r p o i n t ed o u t t ha t t h e e v i d en c e s o f sa l e of a g r i c u l t ur a l p r o du c e b y w a y o f ' J ' f o r m s , i s s u ed i n t h e n a m e o f t h e a s s e s s ee w e r e a l s o f i l e d i n s u p p o r t o f h i s a b o v e a v e r m e n t s. L d. Co u n s e l f o r th e a s s e s s e e s t a t ed t h a t s i n c e a g r i c u l t ur a l l a nd w a s o w n e d b y hi s f a t h e r, t h e a gr i c u l t u r al p r o d u c e s ol d b y t h e a s s e ss e e c o ul d n o t b e a t t r i but e d a s h i s income and sa t i s f a c t o r y e x p l a n at i o n h a d b ee n f ur n i s h e d i n t h i s r e g ar d .
25. Th e L d . D R , o n t h e o t h e r h a n d , r e l i e d u p o n t h e o r d e r o f t h e l o w e r a ut ho r i t i e s .
26. We have heard the rival c o n te n t i o n s . We ar e in agreement w i th the c o n t e n ti o ns of the Ld . co u n s e l for assessee t ha t th e assessee had i n a d v e r t en t l y returned a g r i c u l t ur a l i n co m e of R s . 1, 35 , 0 0 0 / - , wh i c h actually b e l o n g e d t o h i s fa t h e r a nd t h e re fo r e t h e re w a s n o r e a s o n t o t r e a t t h e s a i d am o u n t a s i n c o me f r o m o t h e r s o ur c e s . W h i l e 13 a d j u d i c a ti n g g r ou n d n o . 2 a b o ve , w e h a v e a c c e pte d t h a t t h e a g r i c u l t ur a l i n co m e e a r n e d f rom t h e s a l e o f a g r i c u l t ur a l p r o d u c e , r e f l e c t ed i n t h e ' J ' f o r m s i s s u e d i n t h e n a m e o f t h e a s s e s s e e , w er e a t t r i b u t ab l e t o th e f a t h e r o f t h e a s s e s s e e , considering the fact that hi s ownership of land was e s t a b l i s he d b ut n o s a l e o f a g r i cu l t u r a l p r o d u ce w a s s h o wn i n h i s n a m e b y th e b r o k er . Th e r ef o r e , th e e xp l a n at i o n o f t he a s s e s s e e t h a t th e a g r i c ul t u r a l p r o d u c e sh o w n a s s o l d by h i m w a s a c t u al l y o n b eh a l f o f h i s f a t he r , w a s a c c e p t ed . Having a cc e p t e d the e x pl a n a t i on of the a s s e ss e e to be b o n a f i d e , c o n si de r i n g t he f a ct s an d e v i d en c e s p r od u c e d , we , s e e n o re a s o n t o u p h o l d t h e a dd i t i o n m a de o f Rs .1 , 3 5 , 0 0 0 /- t r e a t i n g t h e a gr i c u l t u r a l i n co m e r e t u r n e d b y t h e a s s e s s e e a s i n c o m e f r o m o t he r s o u r c e s . G r ou n d o f a p p e a l No . 3 r a i s ed b y t h e a ss e s s e e s t a n d s a l l o w e d .
27. In the r es u l t , the a p p e al of the a s s e ss e e s ta n ds allowed.
O r d e r p r on o u n c ed i n t h e O p e n Cou r t .
Sd/- Sd/-
(SANJAY GARG) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated 28 t h May, 2018
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR
Assistant Registrar,
ITAT, Chandigarh