Ita3822015 v. Surinder Pal Anand(2010) 48 Dir 135 (P&H)And Hence Violative Of Judicialdiscipline?”

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA3872015 (O&M)Pronounced on: 27 !september, 2016 Sr. No. 205 Naresh Kumar..... AppellantVERSUS Commissioner of Income Tax, Patiala ..... Respondent CORAMHON4BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICEHON4BLE MR. JUSTICE DEEPAK SIBAL PresentMr.Divya Suri, Advocate, for the appellant, Mr.Zora Singh Klar, Advocate, for the respondent. >>>>>>> DEEPAK SIBAL J. The present appeal under Section 260A of the Income Tax Act,1961 (for short the 'Act') has been preferred by the assessee to challengetherein order dated 15.07.2015, passed by the Income Tax AppellateTribunal, Division Bench, Chandigarh (for short the "Tribunal'’) The appeal pertains to the assessment year 2008-09. According to the appellant, the present appeal raises thefollowing substantial questions of law: - “14Whether under the facts & circumstances of the case, the‘presumptive charge’ of income u/s 44AF is distinguishablefrom arriving at 'chargeable income’ u/s 29 of the Income TaxAct, 19612 2 Whether on facts and in circumstances of the case, thedecision of the Tribunal is against the ratio laid down by the Hon'ble Court in the case ofCIT vs. Surinder Pal Anand(2010) 48 DIR 135 (P&H)and hence violative of judicialdiscipline?” The relevant facts which need to be noticed for adjudicatingupon the present appeal are that the assessee is in the business of retailtrading of wooden furniture and operates in the name and style of M/s ShivaFurniture House, Gole Market, Mandi Gobindgarh, Punjab. On 03.09.2008,for the assessment year in question, the assessee filed his return declaringtherein an income of Rs.1,17,622/- which was assessed under Section 143(1)of the Act. However, the assessing officer having reasons to believe that theincome of the assessee had escaped assessment, after recording reasons,issued notice to the assessee under Section 148 of the Act as to why theincome of the assessee may not be re-assessed. In response to such notice,the assessee filed his return, reiterating the income declared by him in hisoriginal return. Statutory notice under Sections 142(1)/143(2) of the Act,dated 31.10.2013, alongwith a questionnaire was issued and served upon theassessee in response to which the authorised representative of the assesseeappeared and filed the required information. The assessee maintained thathe was a retailer having a total turn-over of less than rupees forty lakhs andwas filing his return of income under Section 44AF of the Act. Thus, nobooks of accounts were being maintained by him. He, therefore, sought there-assessment proceedings to be dropped. the same pertaining to the relevant assessment year as borne out from therecord are aS under: - BKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKK There is nothing on the record to show that the assessee wasmaintaining any other bank account. | Since the above deposits were made by the assessee in cash, theassessing officer asked him to explain the source thereof. The assesseesubmitted that the above deposits were the result of sales effected by him. Afew bills were produced. After considering the entire matter, the assessingofficer found that the source of the afore-detailed cash deposits had not beenSatisfactorily explained by the assessee. Complete sale/purchase bills hadnot been produced. Photocopies of few bills which had been produced werethose which had been issued during the current year only. The accountdetails further did not show any withdrawals made by the assessee tillFebruary, 2008. The assessee failed to tell the names of the parties fromwhom he purchased the material/furniture for sale. Accordingly, invokingthe provisions of Section 69A of the Act, cash amounting to Rs.18,31,500/-deposited by the assessee, in his bank account, was ordered to be added tohis income. The assessee challenged the re-assessment order by filing anappeal before the Commissioner, Income Tax (Appeals), Patiala (for shortthe ‘Commissioner'), who rejected the plea of the assessee with regard to thechallenge to the very initiation of the re-assessment proceedings. Theassessee had raised a ground that the assessing officer had not recorded anyreasons but the Commissioner found the same to be duly recorded. TheCommissioner further held that the assessee declared his income undersection 44AF of the Act and, thus, was not required to maintain books ofaccounts and explain each entry. After relying upon a judgment of thisCourt 1nCIT vs. Surinder Pal Anand (2010) 48 DTR 135 (P&H), the Commissioner allowed the assessee's appeal and ordered deletion of theamount of Rs.18,31,500/- as ordered to be added to his income by theassessing officer. The order of the Commissioner led to the filing of the cross-appeals before the Tribunal. After considering the record and the orderspassed by the assessing officer as also the Commissioner, the Tribunaldecided the issues raised before it against the assessee. It was held thatwhen the assessing officer had sought from the assessee the source of thecash deposits to the tune of Rs.18,31,500/- made by him in his bank account,virtually no documentary proof regarding purchases/sale of furniture wassubmitted by him. Photocopies of only a few of the bills which wereproduced pertained to the current year only. The names of the parties fromwhom the assessee had purchased the material were not disclosed. TheTribunal noted that throughout the year, on different dates the assessee hadmade deposits of identical amounts of Rs.49,500/- and it was only at the fagend of the financial year i.e. on 02.02.2008 and 13.02.2008 that the assesseehad made withdrawals of Rs.1,50,000/- and Rs.2,00,000/-. The assessee was|also found to have failed to prove any purchases made by him from hiswithdrawals especially when these withdrawals were made only in February,2008 1.e. at the fag end of the financial year. The Tribunal further noted thatin his return, the assessee had shown sales of Rs.18,82,800/- with net profitof Rs.1,08,000/- and with this low profit margin, without making purchasesno sale could have possibly been effected by the assessee. Thus, the cashdeposited by the assessee in his bank account was not believed to be fromSales effected by him. The assessee's plea that he usually purchased furniture on credit ITA3822015 basis was also considered and rejected as no evidence of making anypurchases on credit had been filed by him before any of the authorities. Theassessee was also found to have established no nexus with the receipts/turnover and the deposited cash in his bank account. Link evidence to show thatthe sales were directly related to the cash deposits made by him in his bankaccount, was also found missing by the Tribunal, In view of the afore-referred facts, the Tribunal held that theassessee'S case was distinguishable from Surinder Pal Anand's case (supra).Accordingly, the appeal of the revenue was allowed and the addition madeby the assessing officer was restored. After going through the order of the Tribunal, we find that theTribunal has essentially decided questions of fact and while doing so it hasarrived at views which could have possibly be taken. The order of theTribunal, thus, cannot be termed as perverse or absurd. No question of lawmuch less any substantial question of law arise in the present appeal. Thus,the same is dismissed. | S.J. VAZIFDAR | CHIEF JUSTICE | DEEPAK SIBAL | 7[ !]September, 2016 JUDGE shamsher Whether reasoned/speakingYes / NoWhether reportableYes / No