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TMI Blog2022 (9) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on account of alleged rented building to UCO Ban - as argued the said income belonged to bigger HUF namely Badri Nath Khanna (HUF) up to 20.03.2014 - HELD THAT:- After the Assessment Year 2001-02, the total income of Badri Nath HUF being below taxable limits, no Income Tax Return was filed. However, it was also explained vide letter stating that after the demise of Sh. Badri Nath Khanna, the property let out to UCO Bank was transferred in the names of Sh. Rajiv Khanna and Smt. Chand Rani his mother, while Badri Nath Khanna HUF still remained undivided. Since, the said HUF got dissolved on 20.03.2014, on the death of Smt. Chand Rani and thereafter, from assessment year 2015-16, the property income from UCO Bank was shown in the hands of the appellant. We hold that the Ld. CIT(Appeal) was not justified in confirming the addition as property income in the hands of appellant. Accordingly, the addition is deleted. Violation of principles of natural justice - Addition relying upon the statement of Mr. Rohtash Kumar recorded, through the commission appointed under section 131(1)(d) at the back of the Appellant without granting the opportunity of cross examination and ignoring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961, based on assumptions and presumptions without any material evidence on record. 4. That the Ld. CIT (Appeals) failed to appreciate that the provision of section 69A were not applicable in the case of the Appellant as no where the Appellant was found to be the owner of any such amount. 5. That the Ld. CIT(Appeals) was further wrong in upholding the addition of Rs. 37,494 on account of alleged rented building to UCO Bank, failing to appreciate that the said income belonged to bigger HUF namely Badri Nath Khanna (HUF) up to 20.03.2014. 6. The Ld. CIT (Appeals) was unjustified in rejecting the submissions of the Appellant and wrongly refused to consider the additional evidence filed during the Appellate proceedings in contravention to Rule 46(1) of the Income Tax Rules, 1962. 7. That the Ld C.I.T.(Appeal) was absolutely misled while confirming the addition of Rs. 10,00,000, relying upon the statement of Mr. Rohtash Kumar recorded, through the commission appointed under section 131(1 )(d) of the Income Tax Act, 1961, at the back of the Appellant without the opportunity of cross examination and ignoring the affidavits filed during assessment as well as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: - Income Assessed Relief Allowed Remaining Additions Long Term Capital Gain Rs. 34,33,500 - 34,33,500 Deemed Income u/s 69A Rs.1,53,14,125 57,96,250 95,17,875 Property Income Tulip I.T. Services Ltd. Rs.10,800 10,800 - Property Income UCO Bank Rs.37,494 - 37,494 U/s 68 Amount deposited with M/s Tirath Ram BadriNath on Rs. 10,00,000 - 10,00,000 Agricultural Income Rs. 63,000 6. Ground no.1, is general in nature and hence doesn t require adjudication. 7. Ground no. 2 is not pressed by the assessee by way of endorsement in the appeal memo that not pressed. Accordingly, the ground no. 2 of the appellant assessee stands dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that money by the appellant. It clearly shows that when the appellant presented himself to the sub registrar he might have either filed an affidavit or sworn in statement in support of his contention that the agreed amount is in his possession. The Assessing Officer is justified in asking the explanation from the appellant about the source of the aforesaid money. In the assessment proceedings, the appellant is not allowed to take a position that he merely presented himself in formal capacity but never possessed the amount as was stated to the sub registrar. However, I do not agree with the Assessing Officer in respect of 7% stamp duty because that statement does not form the part of proceedings under the authority of sub registrar while marking the attendance of the parties to the contract. It is also pleaded by the appellant that by virtue of sale of land through registered sale deed dated 16th August 2010 an amount of Rs. 45 lakhs were available, a benefit of the same may be given as cash available because amount generated on 16/08/2010 by virtue of sale of Alamgarh land can reasonably be presumed to be available on 30/08/2010 for the transaction of purchase. The benefit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MONEY, BUILLION, JEWELLERY OR OTHER VALUABLE ARTICLE is recorded in the books of account maintained by the Assessee c) No explanation is offered about the nature and source of acquisition of money, bullion, jewellery or other valuable article and or d) Explanation offered is not found satisfactory by the Assessing Officer. 2. Further, there was no occasion for the appellant to carry cash Rs.1,40,17,875 to the office of Sub-Registrar, especially when he having categorically learnt about the cheating and fraud committed by Mrs. Balwant Kaur, by selling 12 Kanals of land, having prime location and value, to Smt. Chhinder Kaur on 07.05.2010 for Rs,1,00,77,200. Copy of sale deed on Page No.23-29. 3. The appellant filed the Suit for Recovery of Rs.80,00,000, in the Court of Add. Civil Judge (Sr. Division), Abohar on 04.11.2010, after affixing court fee of Rs.1,84,500, against Smt. Balwant Kaur and Raovarinder Singh. Copy of Plaint on Page No.42 -49. 4. In reply to Suit for Recovery, at Page No.50-60, the defendant Mrs. Balwant Kaur in para 4 on Page No. 51 admitted :- That the plaintiff is estopped by his own and conduct to file the present suit. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property is an un-necessary harassment to him and that too only on account of willful disobedience to the terms and conditions of the agreement to sell in question by the defendant No.1 The other important aspect of this case is reflected from the jamabadi of the suit property i.e. Exh.P10 for the year 2008-09 that there is a rider imposed by the Hon ble Punjab and Haryana High Court vide order dated 19.02.2010 upon the suit land and the other land of defendant No.1 and other whereby it was directed by the Hon ble Punjab and Haryana High Court not to alienate any portion of land except with the permission of the court where the civil suit is pending. The above said rapat has been entered on account of a civil suit filed by Gurlal Singh during his life time against the other including the present defendant No.1 who was defendant No.81 in that civil suit. In the above said civil suit, the parties have gone to the Hon ble Punjab Haryana High Court and the Hon ble Punjab and Haryana High Court while passing order dated 19.02.2010 Exh.P13 clearly made direction to the parties including the present defendant No.1 not to alienate the property by any mode except by informing the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision) and Addl. Civil Judge , referred to above, proves that no such amount was carried by the appellant to the office of Sub Registrar on 30.08.2010, the addition of Rs.95,17,875 upheld by the CIT(A) was unjustified and be kind enough in deleting the same. 8.6 Per contra, the defendant, Additional CIT (DR) supported the impugned order. He contended that assessee has failed to explain the source of amount of Rs.1,40,17,845/- and Rs.1,29,6,251/- was being available with the assessee as per the agreement and FIR lodged by assessee against the seller of the land. 8.7 We have heard the rival contentions, perused the material on record, and carefully gone through the impugned order and the case laws cited before us. Admittedly, the authorities below have alleged on the basis of mere statement made before the sub- registrar regarding possession of balance amount of Rs. 1,40,17,875/- with appellant assessee, presuming that he might have either filed an affidavit or sworn in statement in support of his possession. 8.8 The learned CIT appeal observed that the AO has called for the explanation of the appellant about the source of the aforesaid money. However, neither the AO nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in his possession or found recorded in the books of account. Since, the Assessee was found in possession of loose slips and not of any valuable articles or things, the Tribunal was justified is not applying s. 69A of the Act. 8.12 In the case at hand, it abundantly clear that the appellant was neither found to be owner of any money, Bullion or Jewellery etc., nor there was any value of such assets recorded in the books of account of the Assessee and further the explanation offered relating to the alleged amount of Rs.1,40,17,875, supported by the statement of Mrs. Balwant Kaur as well as the judgments of Addl. Civil Judge (Sr. Division) and Addl. Civil Judge , referred as above, proves that no such amount was carried by the appellant to the office of Sub Registrar on 30.08.2010. Accordingly, the addition of Rs.95,17,875 confirmed by the CIT(A) based on assumption and presumption u/s 69A of the act, without support of any cogent material evidence on record to establish that any disputed cash was found in the custody of the appellant and therefore, in our view, the addition of Rs. 95,17,875/- confirmed by the CIT(A) is unjustified, unwarranted and illegal. The same is deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 In view of the above, we hold that the Ld. CIT(Appeal) was not justified in confirming the addition of Rs.37,494, as property income in the hands of appellant. Accordingly, the addition of Rs.37,494 is deleted. 10. In ground no. 7, the assessee has challenged the confirmation of the addition of Rs. 10,00,000, relying upon the statement of Mr. Rohtash Kumar recorded, through the commission appointed under section 131(1)(d) of the Income Tax Act, 1961, at the back of the Appellant without granting the opportunity of cross examination and ignoring the affidavits filed during the assessment as well as appellate proceedings. 10.1 The appellant received an advance of Rs.10,00,000/- against sale of 7 Kanal 13 Marlas agricultural land in village Alamgarh from Mr.Rohtash Kumar on 24.08.2010. The said amount remained unutilized till 27.08.2010, and the same was deposited in the capital account of the appellant in the books of M/s Tirath Ram Badri Nath, Abohar in which he is a partner. The said amount remained unutilized till the same was received back on 31.08.2010 and returned to Rohtash Kumar, as the deal for sale of land was cancelled. However, the AO has made addition based on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- Q. Please have you given any amount except the above said payment to Mr. Rajiv Khanna? Ans. I have not given any payment to Sh. Rajiv Khanna except the payment of Rs.23,78,000 in any year. 10.3.1 Thus, the AO has misquoted the above facts on page 7 8 of the Assessment order :- (ii) In order to verify the genuineness of the transactions, a commission u/s 131(1)(d) of the Act was issued to ITO, Abohar, who recorded the statement of Sh. Rohtash Kumar. Sh. Rohtash Kumar admitted that he advanced an amount of Rs.10 Lakh to the assessee on 02.03.2011 but regarding claim of the assessee regarding having received an advance of Rs.10 lakh on 24.08.2010 from Sh. Rohtash Kumar, he stated that he had not advanced any amount to the assessee in any year except the amount advanced in pursuance to sale agreement dated 02.03.2011 10.3.2 While in the statement recorded on 16.11.2016, there was no reference to the transactions dated 24.08.2010 and 31.08.2010, and therefore above observations of the Assessing Officer relating to the said transaction are contrary to the same. Further, the AR argued that the AO wrongly stated that, The statement of Sh. Rohtash Kumar was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB)of section 10. 10.3.6 The AR contended that the appellant neither used the sum of Rs.10,00,000 from its date of receipt i.e. 24.08.2010 till the same was returned on 31.08.2010, nor credited in any of his books of accounts, as the appellant was not maintaining any personal books of accounts, provisions of section 68 could not be invoked, thereby, the AO was wrong in making an addition of Rs,10,00,000. 10.3.7 In the judgment of Hon ble Punjab Haryana High Court in the case of Smt. Shanta D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd he has only made an addition of Rs. 17,000 to the income of the assessee-firm. But strangely enough, the Tribunal, without going into the matter, has gone to the extent of invoking s. 69 and held that all the income should be assessed in the hands of the partners. The view taken by the Tribunal does not appear to be well-founded. As a matter of fact, s. 69 has no application to the facts of the present case. The present case is governed by s. 68, because s. 68 talks about entries in the books of account.-Banshidhar Agrawal vs. CIT (1983) 36 CTR (MP) 94 : (1984) 148 ITR 523 (MP) : TC 42R.1071 followed;NanakchandraLaxmandas vs. CIT (1982) 28 CTR (All) 280 : (1983) 140 ITR 151 (All) : TC 42R.1048, CIT vs. AnupamUdyog (1983) 35 CTR (Pat) 12 : (1983) 142 ITR 133 (Pat) : TC 42R.1049, Smt. Shanta Devi vs. CIT (1988) 68 CTR (P H) 52 : (1988) 171 ITR 532 (P H) : TC 42R.1125 and CIT vs. KishorilalSantoshilal (1995) 129 CTR (Raj) 450 : (1995) 216 ITR 9 (Raj) : TC 42R.1217 relied on 11. We understand that the CIT(A) has been misconstruing the provisions of Indian Evidence Act, relating to notarized affidavit given on oath, in holding, that The statement of the person where there is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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