Avtar Singh v. Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.480 of 2009 Date of decision: 17.8.2010 Avtar Singh. Vs. Commissioner of Income Tax -----Appellant. -----Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. S.K. Mukhi, Advocatefor the assessee. for the assessee. Mr. T.S. Joshi, Advocatefor the revenue. --- ADARSH KUMAR GOEL, J. 1. The assessee has preferred this appeal under Section260A of the Income Tax Act, 1961 (for short, “the Act”) againstorder dated 31.12.2008 passed by Income Tax AppellateTribunal, Chandigarh for the assessment year 2004-05, proposingto raise following substantial questions of law:- “i)Whether on the facts and circumstances,evidences on record and established Principlesof Law that ITAT was justified in confirming theorders of the authorities below in finalizing theassessment under Section 144 of the IncomeTax Act, 1961 without conforming to the provisoto Section 144(1) of the Income Tax Act, 1961?evidences on record and established Principlesof Law that ITAT was justified in confirming theorders of the authorities below in finalizing theassessment under Section 144 of the IncomeTax Act, 1961 without conforming to the provisoto Section 144(1) of the Income Tax Act, 1961? ii)Whether on the facts and circumstances,evidences on record and established Principlesof Law the ITAT was justified in confirming theorders of the authorities below in treating theinvestment in purchase of agricultural land tothe extent of Rs. 5,05,940/- plus registrationcharges and deposit of Rs.1,00,000/-in the BankAccount and also interest income thereof asincome from unknown sources by ignoring thewithdrawals from Bank Accounts being incomefrom agriculture and past savings duly assessedby the A.O. ? iii)Whether on the facts and circumstances,evidences on record and established Principlesof Law the ITAT was justified in confirming theorders of the authorities below in treating theinvestment in purchase of agricultural land tothe extent of Rs.5,05,940/- plus registrationcharges by the wife and son both beingindependent assesses thereof as income fromunknown sources of the appellant by ignoringthe fact that the same amounts have also beenadded in their respective hands ? iv) Whether on the facts and circumstances,evidences on record and established Principlesof Law the ITAT was justified in confirming theorders of the authorities below in making theimpugned addition on account of investment bywife and son which leads to double taxationwhich is unwarranted under any and allprovisions of the Income Tax Act, 1961 and thatof natural justice? v)Whether the order of the Tribunal is perverseand against the provisions of law?”and against the provisions of law?” 2. During the course of assessment, for the assessmentyear 2004-05, the assessee filed his return declaring his incometo be agricultural income. The Assessing Officer after givingnotice to the assessee came to the conclusion that the assesseehad undisclosed income and he invested the same in purchase ofland in his own name and in the names of his son and wife. Itwas further found that he had deposited a sum of Rs.1 lac in bankwhich also represented undisclosed income. Accordingly, additionof Rs.16,08,890/- was made, which was upheld by the CIT(A) aswell as the Tribunal. The addition so made was attributed to theappellant and to his son and wife. The finding recorded by theTribunal is as under:- 2. During the course of assessment, for the assessmentyear 2004-05, the assessee filed his return declaring his incometo be agricultural income. The Assessing Officer after givingnotice to the assessee came to the conclusion that the assesseehad undisclosed income and he invested the same in purchase ofland in his own name and in the names of his son and wife. Itwas further found that he had deposited a sum of Rs.1 lac in bankwhich also represented undisclosed income. Accordingly, additionof Rs.16,08,890/- was made, which was upheld by the CIT(A) aswell as the Tribunal. The addition so made was attributed to theappellant and to his son and wife. The finding recorded by theTribunal is as under:- 9.We have heard the rival parties with respect tothe addition of Rs.5,05,940/-on account of landpurchased in the name of Shri Parshottam Singh.The claim of the assessee is that a sum ofRs.4,00,000/-was available as loan from Shri BalbirSingh which stood duly confirmed by way of affidavit.In this connection, we have perused the affidavit ofShri Balbir Singh and also the statement recorded bythe Assessing officer which are placed in the paperBook. Having perused the material on recor4d, we donot find any infirmity in the inference drawn by theAssessing Officer. Ostensibly, it is a mere baldassertion by the said creditor of having advancedmoney in cash to Shri Parshottam Singh. In any case, neither there is any evidence in support of theavailability of funds with said Shri Balbir Singh and notis there any justification made out for advancing ofcash loan to Shri Parshottam Singh. Therefore, theexplanation of the funds to make investment in thepurchase of land in the name of Shri ParshottamSingh, in our view, has been correctly rejected by boththe lower authorities. We find no reasons to interferein such conclusion. Further more we find that in so faras the justification for making such addition in thehands of the assessee is concerned, the stand of theAssessing Officer is justified. Admittedly, theAssessing officer has recorded a finding that ShriParshottam Singh has no independent source ofincome and neither has the assessee furnished anyevidence to show that any income was being earnedby Shri Parshottam Singh by doing of any activity ofpersons skill. The explanation of the assessee in thisregard is based on pure bald assertions without anyfactual support. Thus, we uphold the stand of theincome tax authorities on this issue also. 10.Now coming to the investment towardspurchase of agriculture land in the name Smt. JasbirKaur, wife of the assessee amounting toRs,5,05,940/-. In this regard, the explanation of theassessee stands on similar footing as was with regardto the purchase of agriculture land in the name of hisson Shri Parshottam Singh. Herein also, theAssessing Officer comes to a finding that there is noindependent source of income in the hands of Smt.Jasbir Kaur and accordingly, the investment inquestion was considered in the hands of theassessee. There is no independent source of income 10.Now coming to the investment towardspurchase of agriculture land in the name Smt. JasbirKaur, wife of the assessee amounting toRs,5,05,940/-. In this regard, the explanation of theassessee stands on similar footing as was with regardto the purchase of agriculture land in the name of hisson Shri Parshottam Singh. Herein also, theAssessing Officer comes to a finding that there is noindependent source of income in the hands of Smt.Jasbir Kaur and accordingly, the investment inquestion was considered in the hands of theassessee. There is no independent source of income in the hands of Smt. Jasbir Kaur and accordingly, theinvestment in question was considered in the hands ofthe assessee. Ther4e is no specific negation of thisfinding by the assessee, either before the CIT(Appeals) or even before us. The only point broughtout by the assessee was that Smt. Jasbir Kaur hadarranged for the loan of Rs.3,00,000/-from one ShriLabh Singh. The said explanation has beenconsidered by the Assessing Officer but was notfound satisfactory. The said creditor Shri Labh Singhfurnished an affidavit and his statement was alsorecorded by the Assessing Officer. For the reasonsdiscussed in relation to Shri Parshottam Singh in theforegoing paragraphs, herein also we find nojustification to uphold the plea of the assessee. Thearrangements of the assessee before us are also onsimilar lines as were in relation to the investment inthe name of Shri Parshottam Singh. In this regard asthe situation is identical to Shri Parshottam Singh,herein also we find no justification to interfere with theconclusion drawn by the lower authorities. 11.Thus, in conclusion, we find no reasons tointerfere with the addition of Rs.16,08,890/-made bythe Assessing officer as unexplained investment inthe purchase of agriculture land and the same in ourview, has been correctly sustained by the CIT(Appeals). 12.In so far as the addition of Rs.1,00,000/-representing deposit of cash, in the bank account on31.3.2004 is concerned, herein also we find nocredible explanation forthcoming from the assessee.The only explanation offered by the assessee beforethe Assessing Officer was that the same is out of agriculture income earned. The explanation offeredby the assessee before us also remains on similarfooting. This explanation in our view is too general innature and does not absolve the assessee from onuscast on him to explain source of the deposit made inthe bank account. The income tax authorities, in ourconsidered opinion, were justified in making theimpugned addition. 3. We have heard learned counsel for the parties. 4. Learned counsel for the appellant submitted that since son of the appellant and his wife were independent persons,having their own sources of income, income in the hands of sonand wife of the appellant was not taken into account. 5. We are unable to accept the submission. The findingrecorded above shows that the plea of son having separateincome was not found to be acceptable and the material onrecord has been duly appreciated. The finding recorded being ona question of fact and same not being perverse, no substantialquestion of law arises. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 17, 2010MITTAL )ashwani ( AJAY KUMAR JUDGE