Dr. Jasleen Kaur v. Commissioner Of Income Tax, Jalandhar And Another

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA2722014Date of decision:01.07.2015 Dr. Jasleen Kaur ..Appellant Versus Commissioner of Income Tax, Jalandhar and another ...Respondents CORAMHONBLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICEHON5BLE MR. JUSTICE G.S. SAANDHAWALI Present: Mr. Akshay Bhan, Senior Advocate, | with Mr. Alok Mittal, Advocate, | for the appellant. Mr. Rajesh Katoch, Advocate,for the respondents.for the respondents. ee S.J. VAZIFDAR, A.C.J. (QRAL) This is an appeal against the order of the Tribunal setting aside the order of the CIT (Appeals) deleting the addition ofL20 lacs made by the| AO in the original assessment order. The matter pertains to the assessment year 2007-2008. 2 |The appeal is admitted on the following substantial question of law:- “Whether infact and circumstances of the case,the addition ofa‘20 lacs is admittedly based onpresumption in view of the remand report of theAO and against the material placed on record1s Sustainable in the eyes oflaw?” 3In view of the order we intend passing, it is not necessary to consider the other questions of law raised in paragraph 7 at this stage. They are kept open in the event of it being necessary for the appellant to raise the Same in any further challenge pursuant to the order of remand that we intend passing. 4The appellant entered into an agreement for sale dated 24.07.2006(the first transaction) under which she agreed to purchase 51 marlas159 sq. ft. from one Hitesh Kumar at the rate ofL2.32 lacs per marla. The|appellant paid an advance ofL5 lacs by cheque and=10 lacs by cash. On 29.09.2006, the appellant entered into an agreement for the saleof the same property (the second transaction) to one Sandeep Kumar at therate ofL3.75 lacs per marla. Under this agreement, the appellant received420 lacs in advance by cash. On the same date i.e. 29.09.2006, the appellant entered into anagreement (the third transaction) with one Jatinder Kumar for the purchaseof 10 marlas 45 sq. ft. at the rate of413 lacs per marla and in respect thereotthe appellant paid an advance of=2() lacs in cash. | 5.The appellant’s case is that the above three transactions stoodcancelled and that pursuant to the cancellation, Jatinder Kumar returned thesum of420 lacs to the appellant under the third transaction; the appellantutilized this amount of=20 lacs to refund the advance paid to |Sandeep Kumar under the second transaction and the said Hitesh Kumarrefunded the advance of=15 lacs paid by the appellant under the firsttransaction. | 6.)The AO in the original assessment proceedings disbelieved the appellant’s case that she had refunded the amount ofL20 lacs paid to her bythe said Sandeep Kumar as advance under the agreement dated 29.09.2006and concluded that the appellant had in fact forfeited the amount. J |The appellant challenged the assessment order before theCIT (Appeals). The CIT (Appeals) called for a remand report. It is importantto note that the AO observed that the details in respect of the transactionsSuch as the date on which the amounts were refunded may not have beenfurnished due to paucity of time. This is a vital fact which has persuaded usto afford the appellant an opportunity of establishing her case on remand.The CIT (Appeals), however, accepted the appellant’s case that she hadrefunded the amount of)=20 lacs to Sandeep Kumar under the secondtransaction upon the cancellation thereof. J |The appellant challenged the assessment order before theCIT (Appeals). The CIT (Appeals) called for a remand report. It is importantto note that the AO observed that the details in respect of the transactionsSuch as the date on which the amounts were refunded may not have beenfurnished due to paucity of time. This is a vital fact which has persuaded usto afford the appellant an opportunity of establishing her case on remand.The CIT (Appeals), however, accepted the appellant’s case that she hadrefunded the amount of)=20 lacs to Sandeep Kumar under the secondtransaction upon the cancellation thereof. &The Tribunal, however, reversed this finding holding the same tobe perverse. Based on the evidence, as it stood before the authoritiesincluding the Tribunal, the finding of fact cannot be said to be perverse orunsustainable. The appellant’s case is that she utilized the amount of420 lacs refunded under the third transaction by the said Jatinder Kumar toin turn refund the amount of=20 lacs to Sandeep Kumar under the second|transaction. The appellant is obviously in possession of the facts in thisregard. The onus was on the appellant to establish the same. To reiterate, it isthe appellant’s case that the amount received under the third transaction wasutilized to in turn refund the amount to Sandeep Kumar under the secondtransaction. It was necessary, therefore, for the appellant to establish thatshe received the amount of=2() lacs under the third transaction from)Jatinder Kumar in such a manner as to have enabled her to refund theadvance of=20 lacs to Sandeep Kumar. In other words, it was for theappellant to establish that the amount of420 lacs repaid to her under thethird transaction was available to enable her to in turn make the payment of=20 lacs to Sandeep Kumar under the second transaction. The appellant had not adduced the facts necessary to establish this case. In view thereof, thefinding of the Tribunal cannot be said to be perverse. 9Having said that, however, it is important to note that in theremand report the AO himself stated that the appellant was probably unableto adduce all the facts due to shortage of time in the original assessmentproceedings. We are inclined to accept Mr. Alok Mittal’s alternatesubmission on behalf of the appellant that in view thereof the appellant mustat least be afforded an opportunity of establishing her case. He rightlypointed out that in view of this finding the Tribunal ought to have remandedthe matter to the AO to adduce the necessary facts on this limited issue. 10.In these circumstances, the ends of justice would require grantingthe appellant an opportunity of establishing the facts in this regard.However, considering that the matter has been agitated at three levels beforethe authorities under the Income Tax Act, 1961, we deem it appropriate toremand the matter to the CIT (Appeals) to reconsider the issue in this regardalone. It will be open to the CIT (Appeals) to seek a remand report from theAO pertaining to the facts in this regard. The appellant will be entitled toadduce additional evidence in this regard including of the respectiveproposed purchasers and proposed sellers under the said three transactions. _ The appeal is accordingly disposed of. © (S.J. VAZIFDAR)ACTING CHIEF JUSTICE (G.S. SANDHAWALIA) |JUDGE 01.07.2015Amodh