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TMI Blog2019 (9) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... ims cannot be upheld. The insistence of the tax authorities without upsetting the evidences available on record cannot be accepted. In the facts of the present case without any effort on the part of the Revenue to assail the contents of the affidavits, prayer for remand back to the AO has no meaning. Accepting the explanation of the assessee the addition for the reasons set out hereinabove in detail is directed to be deleted. - Decided in favour of assessee. - ITA No. 1080/CHD/2018 - - - Dated:- 26-9-2019 - Smt. Diva Singh, JM For the Assessee : Shri Tej Mohan Singh, Advocate For the Revenue : Shri Manjit Singh, CIT (DR) ORDER The present appeal has been filed by the assessee wherein the correctness of the order dated 31.07.2018 of CIT(A)-2, Chandigarh is assailed on various grounds. 2. However, at the time of hearing, the ld. AR submitted that he has been instructed not to press ground Nos. 1 and 3 raised by the assessee. Accordingly, he would be arguing only ground No. 2. Noting to the said effect has been given by the ld. AR in the Memo of the Appeal filed. Accordingly, the on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted, the assessee has also explained that his father was a close friend of Shri Jarnail Singh. By the time the assessee was being questioned on it, Shri Jarnail Singh had expired. Evidence to this effect, it was stated, is available on record. The fact of advance of amounts by Shri Jarnail Singh has been admitted by Shri Jarnail Singh s daughter on an Affidavit. The money was advanced to the assessee for investment and insurance purposes to a friend s son who was engaged in Banking and investment related activities. It was submitted Shri Jarnail Singh on account of the health related problems needed life insurance cover. The assessee has explained that from the stated withdrawal in cash by Shri Jarnail Singh an amount of ₹ 31 lacs was advanced in cash and it was deposited on 27.10.2009 by the assessee in the name of Shri Jarnail Singh. It was submitted that the life insurance cover is person specific on account of which fact, it was deposited in the name of Shri Jarnail Singh and the flow of money from the same source has been accepted by the department. 3.2 Referring to the record, it was submitted that Shri Jarnail Singh and his father Mr. Gurdeep Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g daughter Ms. Tejinder Kaur. It was his submission that when the department questioned the assessee on 25.03.2017, Shri Jarnail Singh was no longer alive. This fact, it was submitted, is evident from Paper Book page 35 which contains the Death Certificate of Shri Jarnail Singh who expired on 31.08.2012. In these circumstances, it was argued the only evidence which the assessee could rely upon was the Affidavit of the sole surviving child of Shri Jarnail Singh i.e. Ms. Tejinder Kaur, copy of which is available at page 9 of the Paper Book. It was his submission that the affidavit of Ms. Tejinder Kaur, daughter of Shri Jarnail Singh is dated 21.08.2015 and is a document which is much before the issuance of notice by the AO on 25.03.2017. In these circumstances, it was his submission that it cannot be said to be specifically created for this purpose and cannot be set aside without assigning any reasons. The contents of the affidavit, it was submitted, have not been upset. No effort, it was submitted, to even examine the said deponent was made by the tax authorities. It was submitted that the marriage of the lady was infact fixed by the efforts of Shri G.S.Virk. The close family relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant facts i.e. Shri Jarnail Singh was about 85 years old at the relevant point of time; that he was a close friend of his father; that on account of the trust and proximity of relationships, the fund in the insurance was invested through the assessee. The investment made in the India Bulls account was also on behalf of the Shri Jarnail Singh from the funds made available to him and the profit as and when was sought by Shri Jarnail Singh was shared by the assessee. These facts were affirmed by Shri Jarnail Singh s daughter. In the circumstances it was his submission that the assessee making investment for Shri Jarnail Singh through his bank account alongwith all the supportive evidences already available in the first round before the AO should not be remanded back to the AO as apart from these evidences the assessee can place no further evidence. The evidence filed and already available on record, it was submitted, was sufficient to explain the deposits and the relief, it was argued has been denied purely on suspicions. 6. I have heard the submissions and perused the material on record. The facts in the present case have been summed up in the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below: While completing the assessment, the AO has observed that Mr Kamaldeep Singh deposited an amount of ₹ 74,70,000 in Shares and Insurance. This fact was not denied before AO. However, AO has not appreciated the fact that this amount belonged to Mr Jarnail Singh aged 85 years. Mr. Gurdeep Singh Virk father of Mr. Kamaldeep Singh, a family friend of Mr Jarnail Singh and have very cordial relations with him. Since Mr Jarnail Singh was bed ridden and unable to move, he passed an amount of ₹ 74,70,000 after withdrawing ₹ 75 Lakh from his bank account. He received an amount of ₹ 1,07,92,968/- on account of acquisition of agricultural land owned by him. He deposited this amount of ₹ 1,07,92,968/- in his bank account and paid an amount of ₹ 74,70,000 to Mr Kamal Deep who was in banking employment and paid to him after withdrawing an amount of ₹ 75 lakh from his bank account. The entire amount was paid by Mr Jarnail Singh to Kamaldeep Singh in cash. Mr Kamaldeep deposited an amount of ₹ 31 lakh in the name of Mr Jarnail Singh in Insurance and balance in shares. The motive of Mr Jarnail Singh in these deposits through M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Genuineness of the transaction We have satisfied and proved it with documentary evidence whereas AO has failed to prove any adverse point in our submission except that only 31 lakh was returned and other amount was not returned. In other words he has accepted having received the amount from Jarnail Singh and it has not been disputed. It is not required to verify whether amount returned or not. In our case we have returned ₹ 10 lakh out of pension account to Mr jarnail Singh as full and final settlement besides ₹ 31 lakh paid back by Insurance Company as Draft. An explanation prima facie reasonable cannot be rejected on caporicious or arbitrary grounds(RBN J Naidu Vs CIT29IYTR 194(Nag). The assessee is entitled to have evidence produced to be considered and an inference to be drawn there from. By merely rejecting a good explanation ignoring explanation is an error of5 law. (Bhagwati Prasad Misra Vs CIT 35 ITR 97. 6.2 Considering the facts, submissions and the evidences, the addition made by the AO have been sustained by the ld. Commissioner (Appeals) which finding is under challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the earnings from the stock market. Thus the veracity of this affidavit is not established. Under these circumstances the only evidence provided by the assessee to support the contention that the money was given by Sh. Tejinder Singh is the bank account of Sh. Tejinder Singh showing a withdrawal of ₹ 75,00,000/- on 12.10.2009. This evidence cannot taken as satisfactory evidence to explain the source of cash deposit of ₹ 43,70,000/- on 16.10.2009. The assessee deposited ₹ 31,00,000/- on 27.10.2009 and purchased the insurance in the name Sh. Tejinder Singh out of this money. The AO has correctly taken the source of money as explained. However it has not been explained why the amount of ₹ 75,00,000/- withdrawn on 12.10.2009 by Sh. Jarnail Singh and claimed to have been given to the assessee was deposited on two different dates. Nothing has been brought on record to show that the investment in the shares through India Bulls Securities made in the name of assessee was on behalf of Sh. Jarnail Singh. The trading in shares would have resulted in profits and loss from time to time but no subsequent financial transaction between the assessee and Sh Jarnail Singh is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iend. Sh. Jarnail Singh received ₹ 1.07,92,968/- on 09.10.2009 in lieu of his land acquired by The Collector Land Acquisition Urban Development. Punjab. Assessee stated that Sh. Jarnail Singh had given ₹ 74,70,000/- to him for investment in Kotak Life Insurance in the name of Sh. Jarnail Singh and investment in India Bulls Securities. Accordingly, he invested the amount received from Sh. Jarnail Singh in Kotak Life Insurance at ₹ 31,00,416/- and India Bulls Securities 40,00,000/-. It has also been admitted that the amount of ₹ 31,00,000/- invested in Kotak Life Insurance was returned to Sh. Jarnail Singh in December, 2011 through cheque. However, the investment of ₹ 40,00,000/- made by him in India Bulls Security, in his own name (assessee) there was a loss of ₹ 39,50,000/- in trading of shares of different companies hence, the amount was never returned. The assessee was asked to furnish documentary evidence regarding having received the advance of ₹ 43,70,000/- from Sh. Jarnail Sinyh. But the assessee failed to adduce any evidence in this regard except saying that Sh. Jarnail Singh had verbally asked him to invest in sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to invest in shares on his behalf. The submission made by the assessee is not acceptable on the facts of the case. No person, who-so-ever may be, will allow to make investment of his hard earned money in the name of another person and not in his name as well as allow to retain the same by another person. The said assertion and presumption is contrary to record. The assessee has been entrusted with even ₹ 31 lakh in cash which the assessee as required acting on the oral direction of Shri Jarnail Singh purchased an Insurance Policy. This transaction has been accepted and not questioned. Thus, there was sufficient evidence on record to show that the assessee and Shri Jarnail Singh did have close relations so much so that ₹ 31 lakh was handed over in cash without any collateral with oral instruction to the assessee. Thus, the occasion to doubt the similar oral direction of Shri Jarnail Singh confirmed by Shri Jarnail Singh s daughter on Affidavit, it appears has been discarded on mere suspicion. 6.5 On a reading of the impugned order, it is seen that the assessee again reiterated the facts in greater detail namely that the amount of ₹ 31 lacs as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phase-IX, Mohali. 4. That my father was a lever patient and under treatment at Fortis Hospital Mohali. Later on it was declared Lever Cancer. 5. That he withdrawn ₹ 75 Lakhs from his this S.B. A/c on 12/10/2009 through cheque No. 964972 and planned for his life Insurance. 6. That my father given ₹ 43,70,000/- on 16.1Q.2009 to Kamaldeep Singh son of S. Gurdeep Singh Virk R/o House No. 3091, Phase-VII, Mohali, being our close family friend. My father given ₹ 31.00 lakh on 27.10.2009 for the first premium of life insurance. 7. That my father advised Kamaldeep Singh to invest ₹ 43,70,000/- in the share market and do the business on his behalf. 8. That Kamaldeep Singh regularly and honestly gave the earning of share market to my father whenever required by my father. 9. Unfortunately share market decline. Hence the Kamaldeep Singh had returned the remaining all amount to my father. Now nothing is due towards Kamaldeep Singh S/o Gurdeep Singh Virk R/o House No. 3091, Phase-VII, Mohali. Sd/- DEPONENT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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