Income Tax Appellate Tribunal - Amritsar
Shri Kuldip Singh, Amritsar vs Income Tax Officer Ward 4(3), Amritsar on 22 January, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND
SH. N.K.CHOUDHRY, JUDICIAL MEMBER
ITA No.711(Asr)/2017
Assessment Year:2009-10
Kuldip Singh, Vs. Income Tax Officer,
H.No.399-A, Guru Amar Dass Ward-4(3), Amritsar
Avenue, Ajanala Road,
Amritsar
[PAN:ABVPS 8023P]
(Appellant) (Respondent)
Appellant by: Sh. R.K. Magow (Ld. CA)
Respondent by: Sh. Charan Dass (Ld. DR)
Date of hearing: 10.12.2018
Date of pronouncement: 22.01.2019
ORDER
PER N.K.CHOUDHRY, JM:
The instant appeal has been preferred by the Assessee/Appellant against the order dated 28.09.2017 passed by the Ld. CIT(A), Amritsar, u/s 250(6) of the I.T. Act, 1961 (hereinafter called as 'the Act').
2. In the instant case, the assessee had declared total income at Rs.1,99,840/-, however, later on the case was reopened u/s 147/148 on the basis of AIR and addition of Rs.7,83,000/-, which was shown as negative balance by the assessee during the year under consideration, was added back to the taxable income of the assessee by treating the same as income from undisclosed sources u/s 68 of the Act. The assessment order was passed u/s 144 r.w. sec. 147 of the Act, the assessee challenged the assessment order before the Ld. CIT(A) on the grounds that the ITO has erred in making addition of Rs.7,83,000/- on account of alleged negative 2 ITA No.711/Asr/2017 (A.Y.2009-10) Kuldip Singh, Amritsar vs. ITO cash balance qua cash deposited by the appellant in HDFC Bank Account during the F.Y.2008-09. Further the ITO erred in making the addition on account of negative balance after ignoring the fact that the appellant is a school teacher and an agriculturist and the appellant was ignorant of the assessment proceedings, however, explained verbally the source of cash deposit in the bank instead of in writing. It was further observed that the observations made by the Assessing Officer are against the facts and do not afford any legal justification to the additions made because of the facts and circumstances of the case and material on record have not been properly considered and judicially interpreted by the Assessing Officer. It was further averred that although the assessee appeared on 09.12.2016 along with his counsel before the AO, however, at that particular date the AO was not available in his office, thereafter, on dated 13.12.2016 when the assessee appeared before the Assessing Officer for submissions of documents in support of the cash deposited in the bank, the assessee was informed that ex-parte order has already been passed. It was also pleaded by the assessee that the assessment order has been passed in haste manner and justice has been miscarried by passing an ex-parte order. Further, it was also averred that the service of notice u/s 147/148 dated 30.03.2016 was not proper and finally it was averred that without prejudice, grounds of appeal in para no.2, the Income Tax Officer has erred in calculating negative balance while making addition and even the principal of telescoping has been ignored.
3. The Ld. CIT(A) while considering the submissions of the assessee, partly allowed the relief to the assessee by reducing the addition of Rs.7,83,000/- to 5,83,000/-. The concluding part of the order of Ld. CIT(A) is reproduced herein below for the disposal of the appeal.
"Decision:- The assesee had deposits of Rs.11,49,000/- in his savings bank account maintained in HDFC Bank during F.Y.2008-09. The assessee was asked to explain the source of cash deposits in the bank account of HDFC Bank during the year under consideration but the same remained 3 ITA No.711/Asr/2017 (A.Y.2009-10) Kuldip Singh, Amritsar vs. ITO unexplained despite several opportunities given by the AO. The AO prepared a cash flow statement on the basis of deposits and withdrawal in the bank account during the year and calculated a negative cash balance of Rs.7,83,000/-. Since the assessee had failed to explain the source of cash deposits in the bank account therefore, the AO made the addition of Rs.7,83,000/- u/s 68 of the Act.
In the appeal proceedings the appellant had submitted the statement showing calculation of cash in hand after considering the opening cash in hand of Rs.8,00,000/- and withdrawals from HDFC Bank and SBI from 01- 04-2008 to 13- 10-2008. The opening cash in hand as on 01-04-2008 was shown at Rs.8,00,000/-. The copy of Jamabandi and Gardhori of the agriculture lands of the assessee were also submitted with the written submissions along with the copy of statement of account in HDFC Bank Ltd A/c no. 116201000052818 from 01-04-2008 to 25-01-2009, and the statement of account of assessee in State Bank of India, Amritsar Cantt account no. 10734607959 for the period 08-04-2008 to 19-03-2009, the copy of form 16 of Amarjit Kaur w/o the appellant for F.Y.2006-07 and the copy of ITR of Smt. Amaijit Kaur w/o the appellant for A.Y.2008-09 declaring an income of Rs.2,74,950/- and the affidavits of Sh. Kuldip Singh (appellant) dated 24-04-2017 and of Sh. P. C Sharma, Advocate of the appellant dated 24-04-2017; and copy of agreement to sell the land at village Chakk Sikander, Tehsil Ajnala dated 08-02-2008 with Sh Baldev Singh s/o Sh. Hazara Singh for total consideration of Rs.15,00,000/- and received Rs.8,00,000/- as biana. The above additional evidences submitted by the appellant were admitted under rule 46A(1)(c) of the I.T. Rules 1962 as above and are considered for adjudicating the impugned appeal.
a) Regarding the source of the opening cash in hand of Rs.8,00,000/- as on 01-04-2008 the appellant had not given any specific explanation about the source thereof and in the written submissions filed in appeal proceedings it was stated that the AO had not given any benefit in regard to accumulation of cash since last so many years as the assessee was born in the year 1955 and was earning income since last 30 years. Also the AO had not given the benefit of agriculture income of Rs.99,800/- earned during the year.
In the year under consideration, the returned income of the assessee for A Y 2009-10 was Rs.1,99,840/- which is Rs.16,653/- per month which is barely sufficient to meet the house hold expenses of the family of the appellant. The salary income of the appellant in the earlier years was lesser than Rs.16,553/- PM and therefore the salary income of earlier years as well was not sufficient, for meeting the house hold expenses of the family of the appellant. Nevertheless, the Indians have a propensity to save from their income and therefore credit for savings of Rs.50,000/- from the earlier years is allowed to the appellant out of his past salary income and the opening cash in hand as of 01-04-2008 is upheld only at Rs.50,000/- as against claim of assessee at Rs.8,00,000/-.
4 ITA No.711/Asr/2017 (A.Y.2009-10)Kuldip Singh, Amritsar vs. ITO
(b) As regards the claim of having earned agriculture income of Rs.1,99,800/- during the year 2008-09, it is observed the appellant had not filed his return of income for A Y 2009-10 u/s 139(1) or in compliance to the notice u/s 148 of the Act. No claim of having earned agriculture income was made by the appellant in the return of income filed on 02-07-2009 declaring total income of Rs.1,99,840/-, the impugned assessment proceedings and also no evidence in the form of "J forms" was submitted by the appellant to show that he earned any agriculture income out of his share in the agriculture land holding, whose Jamabandis were submitted by the appellant in appeal proceedings. Therefore, it is held that the claim of agriculture income of Rs1,99,800/- in F.Y.2008-09 is denied to the appellant and no credit is allowed to the appellant out of his said claim of agriculture income.
(c) The statement of account of assessee in State Bank of India, Amritsar Cantt account no. 10734607959 for the period 08-04-2008 to 19-03-2009. The assessee had disclosed only one bank account with HDFC Bank A/c no. 1367160004120 which was already closed by him vide letter dated 28-07- 2016. The assessee had not disclosed his other bank account in State Bank of India to the AO in the assessment proceedings. The copy of the statement of account for the F Y 2008-09 in State Bank of India, Amritsar Cantt was perused which revealed monthly credits from Cemetex Dep, Ajnala of Rs.18,678/- from April, 2008 to August, 2008 and monthly credits of Rs.19,652/- each from Sept, -2008 to January, 2009, and credit of Rs.21,670/-, and 20,136/- in February, 2009 and March, 2009 respectively which totals to Rs. (93,390 + 98,260 + 21,670 +20,136) = Rs.233,456/- These credits appear to be in the nature of salary receipts from Cemetex Dep, Ajnala against which the income returned by the assessee had been declared at Rs.1,99,840/-. Therefore the appellant had already declared in his return of income for A Y 2009-10 the receipts credited in his saving bank account in State Bank of India, Amritsar Cantt as above from salary income. The said bank statement of assessee in SBI also revealed monthly withdrawals through ATM of amounts varying from Rs.5,000/- to Rs.15,000/- at a time, which were for meeting his monthly house hold expenses and other expenses.
Therefore no credit is allowed to the appellant of the cumulative cash withdrawals of Rs.1,27,900/- from savings account of the appellant from 01- 04-2008 up to 30-10-2008 or for the total cash withdrawal made through ATM from the said bank account of the appellant in SBI during F.Y.2008-09 out of the salary income of the current year.
Further if the cash withdrawals through ATM from the said S B account of the appellant in SBI, Amritsar Cantt were only to be accumulated throughout the year for making cash deposit in his savings account in HDFC Bank, then what was the source of his meeting his house hold expenses and other expenses incurred by the appellant on family and social obligations throughout the year, which has not been explained by the appellant. Therefore no credit is allowed to the appellant out of his cash withdrawals from S B Account in SBI.
5 ITA No.711/Asr/2017 (A.Y.2009-10)Kuldip Singh, Amritsar vs. ITO
(d) Salary income of his Smt. Amarjit Kaur, w/o the appellant- the copy of acknowledgement of ITR for A.Y.2008-09 of Smt. Amaijit Kaur w/o the appellant revealed gross-Salary income of Rs.2,74,950/- and after deductions under chapter VIA of Rs.99,087/- the net salary income was Rs.1,75,869/-. The copy of Form 16 of Smt. Amarjit Kaur for F.Y. 2006-07 revealed gross salary income of Rs.2,10,984/- and after deductions of Rs.80,094/- under chapter VIA, the net salary income was shown at Rs.1,30,890/-. Considering that the withdrawals of salary income of the appellant in SBI had been applied for house hold expenses, therefore, the net salary income of Rs.1,75,869/- and Rs.1,30,890/- of A.Y.2008-09 and 2007-08 after deducting some expenses/savings therefrom was available with the appellant. The appellant is allowed maximum credit of Rs.1,50,000/- out of the salary income of his wife for A.Y.2008-09 and 2007-08 for deposit of cash in his saving bank account in HDFC.
(e) The appellant submitted copy of agreement to sell the land at village Chakk Sikander, Tehsil Ajnala dated 08-02-2008 with Sh. Baldev Singh S/o Sh Hazara Singh for total consideration Rs.15,00,000/- and received Rs.8,00,000/- as biana. No doubt there is no legal requirement for registration of the agreement to sell as it does not transfer the property to the proposed buyer, but in absence of any affidavit or confirmation of the transaction of said agreement to sell dated 08-02-2008 from the proposed buyer Sh. Baldev Singh, S/o Hazara Singh and of any witness who witnessed the said agreement to sell confirming the receipt of biana of Rs.8,00,000/- by the appellant, therefore the genuineness of the said agreement to sell dated 08- 02-2008 stands not proved and therefore, no credit is allowed to the appellant on account of the said biana of Rs.8,00,000/-.
(f) The cash flow statement submitted by the appellant by considering the amounts withdrawn/deposited from/in his savings account in HDFC Bank and State Bank of India during F.Y.2008-09 does not take into account the utilization of the cash withdrawals for house hold expenses and family expenses of the appellant. Also the opening cash in hand had been shown by the assessee as on 01-04-2008 at Rs.8,00,000/- which has already rejected (except for Rs.50,000) as discussed above. Therefore the said cash flow statement cannot be accepted as correct and is dismissed.
Therefore the appellant is allowed the credit of Rs (50,000 + 150,000) = Rs.2,00,000/- as above which was at best available with the appellant for deposit in his saving bank account in HDFC Bank. The explanation of the appellant with regard to the balance cash credit in the HDFC Bank of Rs.5,83,000/- is considered unsatisfactorily explained in view of the above discussion. Therefore the addition of Rs.7,83,000/- is reduced to and confirmed at Rs.5,83,000/-."
4. On feeling aggrieved against the order passed by the Ld. CIT(A), the assessee preferred the instant appeal.
6 ITA No.711/Asr/2017 (A.Y.2009-10)Kuldip Singh, Amritsar vs. ITO
5. We have heard the parties and perused the material available on record. Before the Ld. CIT(A) in the appellate proceeding, the assessee had submitted the statement showing calculation of cash in hand after considering the opening cash in hand Rs.8,00,000/- and withdrawals from HDFC Bank and SBI Bank from 1st April, 2008 to 13th October, 2008. The assessee had also submitted the copy of Jamabandi and Gardhori of the agriculture lands of the assessee along with Form-16 of Amrjit Kaur, wife of the appellant for F.Y.2006-07 and the copy of the ITR of Smt. Amarjit Kaur for the A.Y.2008-09 declaring the total income of Rs.2,74,950/- and the copy of the agreement to sell of the land at village Chakk Sikander, Tehsil Ajnala dated 08.02.2008 with Sh. Baldev Singh s/o Sh. Hazara Singh for total consideration of Rs.15,00,000/- and had shown the amount of Rs.8,00,000/- received as Bayana. The said additional evidence filed by the assessee was admitted under Rule-46A (1)(c) of the I.T.Rule,1962 and thereafter, taken into consideration by the Ld. CIT(A). Before the Ld. CIT(A), the assessee had claimed that the assessee was born in the year 1955 and was earning since for the last 30 years, however, the AO had not given the benefit of agriculture income of Rs.99,800/- earned during the year.
5.1 While adjudicating the claim of the assessee, the Ld. CIT(A) allowed Rs.50,000/- as opening cash in hand as on 01.04.2008 qua past salary income of the assessee. With regard to the agriculture income of Rs.1,99,800/- during the year 2008-09, it was observed by the Ld. CIT(A) that the assessee had not filed his return of income for A.Y.2009-10 u/s 139(1) or in compliance to the notice u/s 148 of the Act and even no evidence in the From of "J Forms" submitted by the appellant to show that he earned any agriculture income out of his share in the agriculture land 7 ITA No.711/Asr/2017 (A.Y.2009-10) Kuldip Singh, Amritsar vs. ITO holding against which Jamabandis were submitted by the assessee/appellant in appeal proceedings, therefore, the claim of Rs.1,99,800/- during the F.Y.2008-09 was denied to the assessee/appellant by the Ld. CIT(A). While considering the statement of account maintained with SBI and HDFC Bank by the assessee, the Ld. CIT(A) declined to allow the credit on account of the cumulative cash withdrawals of Rs.1,27,900/- from the saving account of the appellant from 01.04.2008 upto 30.10.2008. With regard to the income of the assessee's wife Smt. Amrjit Kaur, the credit of Rs.1,50,000/- out of the salary income of the assessee's wife for A.Y.2008-09 and 2007-08 for deposit in assessee's saving bank account in HDFC was allowed. The assessee has failed to demonstrate, under which circumstances the aforesaid action of the Ld. CIT(A) was perverse, illegal and improper, hence we affirm the action of the Ld. CIT(A).
5.2 Before us, the assessee has also shown the agreement to sell qua land at village Chakk Sikkander, Tehsil Ajnala dated 08-02-2008 with Sh. Baldev Singh, S/o Sh. Hazara Singh for total consideration of Rs.15,00,000/- and had shown an amount of Rs.8,00,000/- as bayana receipt. It was opined by the ld. CIT(A) that although, there is no legal requirements for registration of the agreement to sell as it does not transfer to property by the proposed buyer, but in absence of any affidavit or confirmation of the transaction of said agreement to sale dated 08.02.2008 from the proposed buyer Sh. Baldev Singh s/o Sh. Hazara Singh and any witness, who witnessed the said agreement to sale, confirming the receipt of Bayana of Rs.8,00,000/- by the appellant, therefore, the genuineness of the said agreement to sale deed dated 08-02-2008 stands not proved and therefore, no credit was allowed to the appellant on account of said Bayana of Rs.8,00,000/-.
8 ITA No.711/Asr/2017 (A.Y.2009-10)Kuldip Singh, Amritsar vs. ITO 5.3 On specific query by this Bench, as to what has happened qua agreement to sale, it was submitted by the Ld. AR that agreement to sale stood cancelled vide cancellation agreement dated 07.11.2007 on the ground that no partition has been effected between the brothers, therefore, the deal could not be materialized and the amount of Rs.8,00,000/- (1 lac as cash and 7 lac through online transfer bearing No.SBINR-5211-7110-7000- 6250-3 dated 7.11.2017) was refunded. One of the clause of the agreement to sell dated 25.03.2008 on which the assessee had made its case, clearly reflects that the subjected property under proposed sale is free from sorts of encumbrances such as sale, mortgage, gift, transfer, decree, litigation, acquisition/notification nor attached as security under any bail but is clean and clear marketable property and no agreement has been executed regarding the above said land before. The cancellation deed due to partition dispute, as relied upon by the assessee, is contrary to the said clause of the agreement to sell therefore casts doubts about its authenticity. Even in the said agreement, it was proposed that registration of sale deed will be on or before 25.03.2008 and thereafter, vide reminder dated 25.03.2008, the date of registration was extended up to 24.09.2008. We have failed to under stand as to what prevented the assessee for executing the sale deed upto 2017. Nothing has been shown and brought before us qua any dispute with regard to the subjected property and/or any document by which it can be established that the assessee had ever tried to get demarcate/partition the property against which the earnest money of Rs.8,00,000/- has been taken and which was projected by the assessee as in cash in hand as on 1st April, 2008. Therefore, on the aforesaid reasons, we are unable to convince ourself qua desirability of the cancellation agreement. In our view, the assessee has clearly failed to prove the transaction made through agreement to sale deed 08.02.2008 as genuine and hence, we are not inclined to grant any relief in 9 ITA No.711/Asr/2017 (A.Y.2009-10) Kuldip Singh, Amritsar vs. ITO pursuance to the said agreement to sale as discussed above. The Ld. CIT(A) has rightly affirmed the addition of Rs.5,83,000/-.
5.4 In overall consideration and observation made above, we are of the considered view that the assessee has failed to establish the perversity, impropriety and illegality in the order impugned herein, hence, the same is liable to be upheld.
6. In the result, the appeal filed by the assessee is stands dismissed.
Order pronounced in the open Court on 22.01.2019.
Sd/- Sd/-
(SANJAY ARORA) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 22.01.2019
/PK/ Ps.
Copy of the order forwarded to:
(i) Kuldip Singh H.No.399-A, Guru Amar Dass Avenue,
Ajanala Road, Amritsar
(2) Income Tax Officer Ward-4(3), Amritsar
(3) The CIT(A), Amritsar
(4) The CIT concerned
(5) The SR DR, I.T.A.T., Amritsar
True copy
By order