Jaspal Singh v. Commissioner Of Income Tax, Jalandhar

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH I.T.A.No. 481 of 2007 DATE OF DECISION: FEBRUARY 20, 2008 Jaspal Singh Versus .....APPELLANT Commissioner of Income Tax, Jalandhar ....RESPONDENT CORAM:HON'BLE MR.JUSTICE SATISH KUMAR MITTALHON'BLE MR.JUSTICE RAKESH KUMAR GARG --- Present:Mr. Pankaj Jain, Advocate,for the appellant-assesseefor the appellant-assessee .. SATISH KUMAR MITTAL, J. The assessee has filed this appeal under Section 260A of theIncome Tax Act (hereinafter referred to as `the Act') against the orderdated 30.03.2007 passed by the Income Tax Appellate Tribunal, AmritsarBench, Amritsar (hereinafter referred to as `the Tribunal') in I.T.(SS)ANo.24(ASR)/2004 of the assessee for the block period 01.04.1989 to28.01.2000, while raising the following substantial questions of law:- (i)Whether the Tribunal is justified in invoking thedeeming provisions under the Income Tax Act havingbeen influenced by the proceedings under the ForeignExchange Regulation Act, 1973 not withstanding thematter is premature?deeming provisions under the Income Tax Act havingbeen influenced by the proceedings under the ForeignExchange Regulation Act, 1973 not withstanding thematter is premature? (ii)Whether the Tribunal is justified in concurring withthe appellate authority whereby u/s 69A thetransactions of similar nature needs to be given animpartial treatment?the appellate authority whereby u/s 69A thetransactions of similar nature needs to be given animpartial treatment? I.T.A. No. 481 of 2007 -2- (iii)Whether on presuming the income under the Act thealternate pleadings for the source and disclosureneeds to be overlooked resulting into the denial ofjustice?alternate pleadings for the source and disclosureneeds to be overlooked resulting into the denial ofjustice? In this appeal, the issue is with regard to the addition ofRs.7.5 lacs made by the Assessing Officer and sustained by theCommissioner of Income Tax (Appeals). The said amount was recoveredfrom the possession of the appellant on 30.5.1996 when he wasapprehended by the Punjab Police at Shamboo, District Patiala. Thematter was informed to the Income Tax Department. The statement of theappellant was recorded on 31.5.1996 and on 1.6.1996 by the EnforcementDirectorate authorities where he had stated that on instructions of hisbrother, namely, Vijay Kumar, living in Abu Dhabi, he had received asum of Rs.14.50 lacs from one Ganga Ram which includes the seizedamount of Rs.7.5 lacs and further the same was to be distributed tovarious persons in Punjab as per the instructions of his brother.Subsequently, during the course of block assessment, the statement of theassessee was recorded where he had retracted from his earlier statementand stated that the money recovered from him was the sale proceeds of 13kanal and 8 marlas of land agreed to be sold by his brother Kewal Krishanby entering into an agreement of sale to one Budh Singh son of NaranjanSingh for a consideration of Rs.12,25,000/- out of which a sum ofRs.6,10,000/- was received by him in cash. It was stated that an amount ofRs.1,40,000/- was the savings of his brother Kewal Krishan and hisbrother had given the total amount of Rs.7.5 lacs to him for purchasing aplot at Delhi. The stand taken by the assessee was not accepted by the I.T.A.No. 481 of 2007 -3- Assessing Officer as no sufficient material/evidence was led to establishthe said plea and, thus, addition of Rs.7.5 lacs was made. The appeal filedby the assessee before the Commissioner of Income Tax (Appeals) wasdismissed while observing as under:- The stand taken by the assessee was not accepted by the I.T.A.No. 481 of 2007 -3- Assessing Officer as no sufficient material/evidence was led to establishthe said plea and, thus, addition of Rs.7.5 lacs was made. The appeal filedby the assessee before the Commissioner of Income Tax (Appeals) wasdismissed while observing as under:- “I have carefully considered the facts of the case, thearguments from both sides and the relevant material andassessment record. I am not inclined to agree with theassessee's plea for the following reasons:-arguments from both sides and the relevant material andassessment record. I am not inclined to agree with theassessee's plea for the following reasons:- (1) The statement retracted later seems true becausesome of the people named therein confirmed having received money from Sh. Jaspal.some of the people named therein confirmed having received money from Sh. Jaspal. (2) Sh. Kewal Krishan who had never visited Delhiwould not give Rs.7.5 lacs in cash to his brotherfor buying a plot even without confirming it'slocation.would not give Rs.7.5 lacs in cash to his brotherfor buying a plot even without confirming it'slocation. (3)Once Sh. Madan Lal supposed to be aware of theentire deal and hence very close to Sh. KewalKrishan, is untraceable. Even Sh. Kewal Krishanneither knows his phone number nor any otherparticulars of this person supposedly so veryclose. entire deal and hence very close to Sh. KewalKrishan, is untraceable. Even Sh. Kewal Krishanneither knows his phone number nor any otherparticulars of this person supposedly so veryclose. (4)In all his answers to the questions raised by theA.O. Sh. Kewal Krishan is harping on the samename Sh. Madan Lal alias Kala. He should havebeen produced before the AO to authenticatecertain things. Had the assessee been giving agenuine explanation, he should have definitelybrought in `kala' for recording his statement.Since the entire defence revolves around `Kala',his production before the AO was absolutelyessential.A.O. Sh. Kewal Krishan is harping on the samename Sh. Madan Lal alias Kala. He should havebeen produced before the AO to authenticatecertain things. Had the assessee been giving agenuine explanation, he should have definitelybrought in `kala' for recording his statement.Since the entire defence revolves around `Kala',his production before the AO was absolutelyessential. (5)It is hard to believe that Rs.7.5 lacs was beingcarried to be handed over to the seller of plot incarried to be handed over to the seller of plot in I.T.A.No. 481 of 2007 -4- Delhi whose name even is not known to either thepurchaser or the people deputed by him to strikethe deal. (6)Rs.1,40,000/- out of past savings, lying at homeof a person having an income of about Rs.2,000/-per month while he also has a saving bankaccount where he has been depositing meageramounts at times, can not be believed.of a person having an income of about Rs.2,000/-per month while he also has a saving bankaccount where he has been depositing meageramounts at times, can not be believed. (7)There is no documentary proof of any agriculturalincome accruing to him.income accruing to him. I am of the view that AO was correct in holding thatstatement given later was not correct. Regarding ground No.3, it is not correct to say that thesource of the amount was proved by sufficient evidence. The appellant may have sold the land, may have gotadvance, the deal could have been genuine but there is noevidence direct or circumstantial to link this amount with theamount carried by the assessee especially in view of so manyunconvincing replies to the questions asked by the AO whilerecording the statements which I have already discussedabove. The assessment has been completed in time as per section158BE of the Income Tax Act, therefore, ground No.4 isdismissed.” (7)There is no documentary proof of any agriculturalincome accruing to him.income accruing to him. I am of the view that AO was correct in holding thatstatement given later was not correct. Regarding ground No.3, it is not correct to say that thesource of the amount was proved by sufficient evidence. The appellant may have sold the land, may have gotadvance, the deal could have been genuine but there is noevidence direct or circumstantial to link this amount with theamount carried by the assessee especially in view of so manyunconvincing replies to the questions asked by the AO whilerecording the statements which I have already discussedabove. The assessment has been completed in time as per section158BE of the Income Tax Act, therefore, ground No.4 isdismissed.” Aggrieved against the aforesaid order, the assessee filed anappeal before the Tribunal which has also been dismissed. We have heard the counsel for the appellant and gonethrough the impugned order. Counsel for the appellant while referring to the provisions ofSection 132A(3) of the Act, submitted that in view of the statements madeby his brothers Vijay Kumar and Kewal Krishan, the presumption raisedin favour of the revenue under Section 132 (4A) stand rebutted and the I.T.A. No. 481 of 2007 -5- Tribunal has erred in law while dismissing the appeal on the ground thatthe material/evidence placed on record by the assessee is untenable andthe explanation given by him does not inspire confidence. We do not find any substance in the arguments raised by thelearned counsel for the appellant. In our view the adjudicating authoritiesbelow have recorded a pure finding of fact after appreciating thematerial/evidence available on the record and then came to the conclusionthat the stand taken by the assessee is not tenable and the explanationgiven by him does not inspire confidence. Since a pure finding of fact hasbeen recorded, which does not require any interference, therefore, in ouropinion, no substantial question of law is arising from the impugned orderpassed by the Tribunal. Dismissed. (SATISH KUMAR MITTAL) JUDGE February 20, 2008 (RAKESH KUMAR GARG)vkg JUDGE