Commissioner Of Income Tax, Panchkula v. Shri Avinash Kant

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 255 of 2011 Date of Decision: 30.8.2011 Commissioner of Income Tax, Panchkula Versus Shri Avinash Kant ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL,ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Senior Standing Counsel, for the appellant.for the appellant. AJAY KUMAR MITTAL, J. 1.This appeal has been filed by the revenue under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 19.10.2010 passed by the Income Tax Appellate Tribunal,Chandigarh Bench “B”, Chandigarh (hereinafter referred to as “theTribunal”) in ITA No. 1180/CHD/2009, for the assessment year 2006-07, claiming the following substantial questions of law:- “i)Whether on the facts and circumstances of the case,the Hon'ble ITAT was right in law in deleting theaddition of Rs.37,25,491/- without co-relating thedeposits and withdrawals made in the bank accountwith the sale/purchases transactions of the HUF?the Hon'ble ITAT was right in law in deleting theaddition of Rs.37,25,491/- without co-relating thedeposits and withdrawals made in the bank accountwith the sale/purchases transactions of the HUF? ii)Whether on the facts and in the circumstances of thecase, the Hon'ble ITAT was right in law on facts inaccepting the contention of the assessee that thetransactions in the bank account of the assessee withPunjab State Cooperative Bank pertained to theproperty business of the HUF and not the assesseean individual although the copy of the bank accountshowed that it was opened in individual capacityshowing income by way of 'Service' and notbusiness?” 2.Put shortly, the facts of the case are that the assesseebeing an employee of the Haryana Government derived salary and filedhis return on 19.7.2006 for the assessment year 2006-07 declaring anincome of Rs.84,518/-. During the course of assessment proceedings,the statement of the assessee was recorded in which he is stated tohave owned a saving bank account with State Bank of India, MainSecretariat Branch, Chandigarh. The Assessing Officer had receivedinformation that during the year in question, the assessee had madedeposits of Rs.20.40 lacs in the Punjab State Cooperative Bank Ltd.The assessee was asked to explain the source of deposit of total ofRs.37,27,491/- in the said bank account. It was pleaded by theassessee that he had been making purchase and sale of property in hisHUF capacity and filed certain copies of the sale and purchaseagreements. It was noticed that the agreements for sale of propertieswere made by the assessee in his individual name and the bankaccount was also maintained in the individual capacity, therefore, all the deposits were the income of the assessee as an individual.Accordingly, the Assessing Officer made an addition of Rs.37,25,491/-in the returned income of the assessee. Feeling aggrieved, theassessee filed an appeal before the Commissioner of Income Tax(Appeals) [in short the “CIT (A)”]. The CIT(A) vide order dated1.10.2009 deleted the said addition of Rs.37,25,491/- holding that thedeposits made by the assessee had been separately assessed to taxand relates to HUF of the assessee and the same had been duly shownin the return filed in the status of HUF. Against the order of the CIT(A),the revenue approached the Tribunal by filing an appeal. The Tribunalvide order dated 19.10.2010 upheld the order of the CIT(A) anddismissed the appeal. Hence, the present appeal by the revenue. 3.We have heard learned counsel for the appellant. 3.We have heard learned counsel for the appellant. 4.The point for determination in this case is whether the CIT(A) and the Tribunal were justified in holding that the income declaredby the assessee was income of HUF and not his individual income. TheCIT(A) while reversing the findings of the Assessing Officer onappreciation of evidence came to the conclusion that the deposits madein cash in Punjab State Cooperative Bank related to the HUF of theassessee. The CIT(A) while recording a finding that it was HUF and notindividual income had concluded as under:- “On careful consideration of the above facts andarguments, I find force in the arguments of thecounsel for the appellant. The AO did not accept thecontention of the appellant that the transactions inthe bank account with Punjab State Co-op. Bank, Sector 34-A, Chandigarh relate to the HUF of theappellant as the agreements are in the individualname of the appellant and the amounts are notrelatable to the creditors in the bank account, severalamounts are credited to the bank account on a singleday the bank account is not maintained in HUFcapacity. There is force in the arguments of thecounsel that not mentioning of the status does notalter the character of the property especially thesource of funds and that the status of HUF isgoverned by the investments which were made out ofHUF funds and the HUF can purchase property in thename of any member of family. The counselproduced books of account of the HUF and also copyof the return filed with ITO, Ward-5, Chandigarh inwhich the income from sale/purchase of propertieshas been shown. The counsel also filed narration ofall the entries in the bank account. The AO has notbrought any material on record to rebut thiscontention of the appellant and has not found anyfault with the books of account. In view of thearguments of the counsel and the evidence producedby him, it is held that the transactions in the bankaccount with Punjab State Co-op. Bank, Sector 34A,Chandigarh relate to the HUF of the appellant, theincome from which has been declared in the return of the HUF. The addition of Rs.37,25,491/- made bythe AO is ordered to be deleted.” 5.On appeal by the revenue, the Tribunal affirmed theaforesaid finding with the following observations:- “We have heard the rival contentions and perusedthe records. The assessee has furnished on recordthe copies of return of income furnished in the statusof HUF of the assessee relating to assessment years1998-99 to 2000-01 along with computation ofincome at pages 17 to 22 of the paper book. Theassessee has also furnished on record the details ofsale and purchase of the property relating to theFinancial Year 2005-06 along with the ledger accountof sale property in the books of account of the HUF ofthe assessee at pages 15 & 16 of the paper book.The assessee has further filed the intimation issuedu/s 143(1) of the Income Tax Act in the name of M/sAvinash (HUF) relating to assessment year 2006-07at pages 14 of the paper book. The dispute arising inthe present appeal is in respect of the transaction inthe bank account with Punjab State CooperativeBank Ltd. The claim of the assessee in respect ofthe said bank account is that the entries in the saidaccount relate to business of sale/purchase of theproperties being carried on by his HUF. Theassessee had produced the books of account of the HUF before the CIT(A) which were examined by theCIT(A). Further, observation of the CIT(A) was thatno fault was found by the Assessing Officer inrespect of entries in the said books of account. TheHUF of the assessee on the basis of the entries inthe said books of account has furnished the return ofincome with ITO, Ward-5, Chandigarh in whichincome from sale/purchase of the properties wereshown. The Ld. DR for the revenue has failed tobring on record any contrary findings to the findingsof CIT(A) in this regard. In the entirety of thecircumstances and the evidence produced by theassessee, we upheld the order of CIT(A) that in viewof the evidence produced, the transactions in thebank account i.e. Punjab State Cooperative BankLtd. relates to the HUF of the assessee, income fromwhich had been declared in the status of his HUF.There is no merit in including the said entries in thehands of the assessee. We confirm the order of CIT(A) in deleting the addition of Rs.37,25,491/-. Theground of appeal raised by the revenue isdismissed.” 6.No illegality or perversity has been pointed out in theaforesaid findings except an attempt is made on behalf of learnedcounsel for the appellant to persuade this Court to re-appreciate theevidence and record a different conclusion, which is not permissible ITA No. 255 of 2011 under Section 260A of the Act in view of the concurrent findingsrecorded by the CIT(A) and the Tribunal. Thus, no question much lessa substantial question of law arises in this appeal for consideration ofthis Court. 7.The appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE August 30, 2011gbs (ADARSH KUMAR GOEL)ACTING CHIEF JUSTICE