D.b. Income Tax Appeal v. Shri Inder Kumar

1 D.B. Income Tax Appeal No. 198/2013C.I.T. Bikaner vs Shri Inder Kumar DATE OF ORDER: 19[th] March 2014 HON’BLE MR. JUSTICE DINESH MAHESHWARIHON’BLE MR. JUSTICE BANWARI LAL SHARMA Mr. K.K. Bissa for the appellant. <><><> By way of this appeal filed under Section 260-A of the IncomeTax Act, 1961 [‘the Act’], the Revenue seeks to question the orderdated 22.05.2013 as passed by the Income Tax Appellate Tribunal,Jodhpur Bench, Jodhpur [‘the ITAT’] in ITA No. 507/Jodh/2010 forthe Assessment Year 2005-06 whereby, the ITAT has affirmed theorder passed by the Commissioner of Income Tax (Appeals), Bikaner[‘the CIT(A)’] dated 26.07.2010 in the assessee’s appeal and hasupheld the deletion of the additions made by the Assessing Officer[‘the AO’] on account of alleged unexplained income, unexplainedinvestment, and unexplained purchase of agricultural land. Put in brief, the relevant background aspects of the matter arethat the assessee, an individual and deriving income fromagricultural activities, filed the return of income on 16.05.2008 incompliance of the notice under Section 148 of the Act, declaring theincome of Rs. 5,23,403/- from long term capital gain and from othersources; and also declared agricultural income of Rs. 6 lakhs. TheAO proceeded to complete the assessment by the order dated29.12.2009, making addition of a sum of Rs. 34,00,000/-(10,00,000/- + 20,10,000/-+3,90,000/-), primarily on the ground thatthe assessee could not file the documentary evidence to prove the source of payment to one Shri Jessa Ram and also failed to furnishthe documentary evidence to show the receipt of payment from oneShri Ashok Kumar Goyal. The AO referred to the incongruity andinconsistency in the statement furnished by the said Shri Jessa Ramalleging receipt of payment from the assessee on different dates andof different amounts. However, the CIT(A), after analyzing the material on recordand also taking an overall view of the matter, found unacceptable theversion of Shri Jessa Ram; and also noticed that no opportunity tocross-examine Shri Jessa Ram was allowed to the assessee-respondent. The CIT(A), after referring to the various facets of thecase also found the approach of the AO unjustified and proceededto delete the additions of Rs.10,00,000/- and Rs.20,10,000/- in thefollowing: “In a nutshell, the AO proceeded to make the impugnedaddition only on the basis of cash deposits in the bank account ofShri Jessa Ram without allowing the appellant to cross examinehim during the assessment proceedings. The appellant hadoutrightly denied the payments on the dates given by Shri JessaRam. The AO has also ignored the vital aspect of the appellantreceiving moneys from Shri Ashok Kumar Goyal which were dulydisclosed by him in the return of income filed in response towhich U/s 148 issued to him. Sales to Shri Ashok Kumar Goyal isalso evident from the fact that the appellant could not completethe transaction with Shri Jessa Ram as he had no further funds.The deferment of payment noted on the backside of Ikrarnamadated 15.10.2003 is sufficient testimony to this fact. On overallconsideration of the facts, it is held that the AO was not justifiedin making the impugned additions. The same are, therefore,deleted. “ As regards, the other addition to the tune of Rs. 3,90,000/- onaccount of investment made in agricultural land in the name of son ofthe assessee, the CIT(A) found this addition too unjustified whileobserving as under: “I have considered the facts of the case and the As regards, the other addition to the tune of Rs. 3,90,000/- onaccount of investment made in agricultural land in the name of son ofthe assessee, the CIT(A) found this addition too unjustified whileobserving as under: “I have considered the facts of the case and the submissions made. For the detailed reasons given in the decisionfor Ground No.1, it is held that the AO was not justified in makingthis addition as well. The addition was made only on the basis ofstatement of Shri Jessa Ram which only sought to justify thedeposit of this cash in his bank account cited above. Thepayment and the source thereof has been explained satisfactorilycoming out receipts from Shri Ashok Kumar Goyal and his ownagricultural income. This addition, therefore, deserves to bedeleted.” In the revenue’s appeal, the ITAT has found the approach ofthe CIT(A) justified and no case for interference being made outwhile observing as under: “2.6Before us same and similar arguments arereiterated. We have found that the notings made on the backsideof ikrarnama are in the handwriting of Shri Jessa Ram. Oncecaught he has tried to explain them away in whatever manner heliked. But, Shri Jessa Ram was neither examined in the presenceof this assessee nor he was allowed to be cross-examined by theassessee, so, his statement recorded at assessee’s back has nolegal meaning and cannot be relied against the assessee. Insuch cases, where ex-parte statement is not confronted, it carriesno weight. The jurisdictional High Court in the group cases of CITVs M/s. A.L. Lalpuria Construction Pvt. Ltd. in ITA No. 39/2011judgment dated 25/02/2013 (copy of which is furnished for ourperusal) has taken a similar view. Therefore, the statement ofShri Jessa Ram which was never put to this assessee is of noavail and on the basis of that unrebutted statement no additioncan be made. Otherwise also, the backside of the ikrarnama thepayments between 04/06/2004 to 15/01/2005 are not recordedalthough these were made and have been accepted by the A.O.There is no evidence and it is not the case of the revenue thatassessee has got any other source of income. A sale of theportion of the land to Shri Ashok Goyal stands proved from theRegistered Deed itself. The deposits made by Jessa Ram in hisBank account are not and cannot be taken as a proof of receiptfrom this assess on that particular date. Shri Jessa Ram mayhave adjusted the sale proceeds in the manner he liked. In thetotality of the facts and circumstances of this case we areconvinced that there is no error in the finding of ld. CIT (A).Therefore, we confirm the same. All the payments, including asum of Rs. 3,90,000/- made on 15/01/2005 for the purchase ofagricultural land in the name of his son Shri Sunil Kumar arefound explained. In that case the assessee paid Rs. 6.40 lakhson the date of registration – 4 lakhs before the Sub Registrar and2.40 lakhs outside. Accordingly, we confirm the entire deletionand cannot allow the appeal of the revenue. 3.In the result, appeal of the revenue stands dismissed.” It is sought to be contended that the AO made the additions after considering all the relevant facts and evidence adduced beforehim; and the additions being just and proper, called for no interference, particularly when proper explanation regarding sourcefor purchase of agricultural land was not furnished. It is alsosubmitted that the statement of Shri Jessa Ram, as relied upon, wasduly supported by the registered document and the allegation of ShriAshok Kumar Goyal having made the payment of a sum of Rs.38,60,000/- being not supported by any other document, the ITAThas erred in affirming the order of CIT(A). 3.In the result, appeal of the revenue stands dismissed.” It is sought to be contended that the AO made the additions after considering all the relevant facts and evidence adduced beforehim; and the additions being just and proper, called for no interference, particularly when proper explanation regarding sourcefor purchase of agricultural land was not furnished. It is alsosubmitted that the statement of Shri Jessa Ram, as relied upon, wasduly supported by the registered document and the allegation of ShriAshok Kumar Goyal having made the payment of a sum of Rs.38,60,000/- being not supported by any other document, the ITAThas erred in affirming the order of CIT(A). After having given thoughtful consideration to the submissionsmade and having examined the record, we are unable to find anysubstantial question of law worth consideration in this case. Theconcurrent findings recorded by the CIT(A) and ITAT are essentiallythe findings of facts and have obviously been rendered after dueappreciation of the material on record, as also on the relevantconsiderations. The ITAT appears justified in observing that Shri Jessa Ramwas neither examined in the presence of the assessee nor wasallowedto becross-examined by the assessee and hence, hisstatement could not have been relied upon against the assessee.The ITAT has also rightly observed that the deposits made by ShriJessa Ram in his bank account cannot be taken as proof of thereceipt from the assessee-respondent on that particular date.Obviously, the procedure and system of accounting of a third partywas not a matter within the control of the assessee-respondent; andmerely with reference to the entries made by a third party, conclusioncould not have been drawn against the assessee-respondent. The CIT(A) and the ITAT have deleted the additions made bythe AO after being satisfied that all the questioned payments and receipts were fully explained. In the ultimate analysis, the matter only relates to the findingsof facts and rests on appreciation of evidence. The appellateauthorities have recorded such findings of facts concurrently afterdue and proper appreciation of evidence. Such findings are notshown suffering from any perversity; and no substantial question oflaw is involved in this appeal. The appeal fails and is, therefore, dismissed. (BANWARI LAL SHARMA),J. (DINESH MAHESHWARI),J.