Neena Aggarwal v. Commissioner Of Income Tax, Panchkula

ITA No. 368 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM Nos. 20803 to 05-CII of 2015 ITA No. 368 of 2015 Date of Decision: 17.11.2015 Neena Aggarwal Versus ....Appellant. Commissioner of Income Tax, Panchkula ...Respondent. 1.Whether the Reporters of the local papers may be allowed to see the judgment?the judgment? 2.To be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Jagmohan Bansal, Advocate for the appellant. AJAY KUMAR MITTAL, J. CM No. 20803-CII of 2015 Application is allowed and the delay of 277 days in refiling the appeal is condoned. CM No. 20804-CII of 2015 Learned counsel for the appellant submitted that thedeficiency in court fee has been made good, the delay, if any, becondoned. Application is allowed and the delay, if any, in making good the deficiency in court fee, is condoned. ITA No. 368 of 2015 1.This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 6.3.2014 (Annexure A-1) passed by the Income TaxAppellate Tribunal, Chandigarh Bench “A”, Chandigarh (hereinafterreferred to as “the Tribunal”) in ITA No. 520/CHD/2012, for theassessment year 2008-09, claiming the following substantial questions of law:- i.Whether the impugned order is perverse andcontrary to record?contrary to record? ii.Whether the Ld. Tribunal has passed theimpugned order on assumption and surmises?impugned order on assumption and surmises? Iii.Whether the appellant is liable to pay incometax when undisputedly appellant has sold apiece of land?tax when undisputedly appellant has sold apiece of land? 2.Briefly stated, the facts necessary for adjudication of theinstant appeal as narrated therein may be noticed. The appellant isrunning a boutique and regularly filing her income tax returns. She solda piece of land situated in Sector-9, Ambala for a sum of ` 10,00,000/- inSeptember, 2007. As per the sale deed dated 14.9.2007, she receivedthe said amount by way of cheque dated 14.9.2007. She did not depositthe said cheque in her SBI account and as per mutual understandingwith the buyer, the said cheque was cancelled and two bearer chequesNo. 684557 dated 14.9.2007 amounting to ` 5 lacs and No. 684558dated 14.9.2007 for ` 4 lacs, respectively were drawn from saving bankaccount No. 1002619886 with SBI, Model Town, Ambala City. Theappellant withdrew a sum of ` 9 lacs. She deposited the said amount ininstallments in her bank account. The assessee was getting salereceipts from her boutique and was regularly depositing her saving in her bank account. During the year 2007-08, she got receipts from sale ofplot as well as business operation of boutique and during September,2007 to March, 2008, she deposited a sum of ` 12,12,000/- in her bankaccount. The assessee filed her income tax return on 31.3.2009 for theassessment year 2008-09 declaring income at ` 1,65,990/-. The saidreturn was processed under Section 143(1)(a) of the Act at the returnedincome and was selected for scrutiny through CASS. A notice underSection 143(2) of the Act was issued to the assessee. The assessmentunder Section 143(3) of the Act was completed by the Assessing Officervide order dated 31.12.2010 (Annexure A-3) at a total income of `13,77,990/-. Feeling aggrieved, the assessee filed an appeal, AnnexureA-4, before the Commissioner of Income Tax (Appeals) [for brevity “theCIT(A)”]. Along with the appeal, the assessee also attached a certificate(Annexure A-5) received from State Bank of India under RTI informationthat the cheque mentioned in the sale deed was never encashed. Shealso filed statement of account dated 17.4.2012 (Annexure A-6) showingthe details of deposit and available cash with her during the assessmentyear 2008-09. The CIT(A) vide order dated 25.4.2012 (Annexure A-7)dismissed the appeal holding that the assessee had failed to prove thatthe cheque was deposited by her in SBI account to get cash and nocash deposit of ` 10 lacs was made by the assessee on 14.9.2007.Further, it was held that the dates of deposit and availability of cash donot tally either for sale of plot or receipts of boutique. Still dissatisfied,the assessee approached the Tribunal by way of an appeal. TheTribunal vide order dated 6.3.2014 (Annexure A-1) dismissed the appealwhich gave rise to the assessee to approach this Court by way of instantappeal. 3.Learned counsel for the appellant submitted that the orderof the Tribunal dated 6.3.2014 (Annexure A-1) dismissing her appeal isnot legally sustainable in the eyes of law, being based on surmises andconjectures. It was further submitted that the Tribunal has acted in anarbitrary manner in holding that the assessee had not been able tosatisfactorily explain the deposit of cash on various dates. 4.After hearing learned counsel for the appellant-assessee,we do not find any merit in the appeal. 5.The assessee had derived income from running a boutique.She filed return under Section 44AF of the Act and no books of accountwere maintained. The Assessing Officer asked the appellant to explainthe source of cash deposits of ` 12,12,000/- to which she submitted thatthe said amount was out of the sale proceeds as she had sold a piece ofland in Sector 9, Ambala for a sum of ` 10 lacs in September, 2007 andalso from the business of boutique where sales amounting to ` 14.50lacs were made resulting in profit of ` 1,54,690/-. The explanation of theassessee was not accepted by the Assessing Officer who held` 12,12,000/- as unexplained deposits/investment in the bank. Therelevant findings of the Assessing Officer are as under:- “3.2. This explanation on behalf of the assessee is notacceptable. As per the copy of the sale deed, theassessee received the entire sale proceeds ofRs.10,00,000/- through cheque no. 684555 dated14.09.2007. This amount is no where reflected in theabove mentioned bank account. Further, the copy ofsale account has also been filed during theassessment proceedings as per which the total sales “3.2. This explanation on behalf of the assessee is notacceptable. As per the copy of the sale deed, theassessee received the entire sale proceeds ofRs.10,00,000/- through cheque no. 684555 dated14.09.2007. This amount is no where reflected in theabove mentioned bank account. Further, the copy ofsale account has also been filed during theassessment proceedings as per which the total sales during the year were Rs.14,49,820/- from which profitis shown to be Rs.1,54,960/-. Thus, remainingamount has been claimed as expenditure. Further,the quantum of sales is also not of such a level whichcould provide the money for deposit in the said bankaccount. Thus, neither from the sale proceeds of theplot nor from the sale proceeds of boutiqueprofession, the assessee was having surplus funds todeposit in the bank as per the detail given above.Therefore, I hold the assessee as to have not beenable to explain the aforesaid deposits and accordinglymake an addition of Rs.12,12,000/- to the assessee'stotal income as unexplained investment/deposit.” 6.The said findings of the Assessing Officer were affirmed bythe CIT(A) in appeal. The CIT(A) held that although as per the saledeed, the assessee had received ` 10 lacs vide cheque dated 14.9.2007but she had failed to prove that the cheque was deposited by her in SBIto get the cash. Further, it was observed that the dates of deposit andthe availability of cash do not tally either for sale of plot or gross receiptsof boutique and the assessee had failed to explain the entries of cashdeposits in her bank account. The findings recorded by the CIT(A) readthus:- “4.1 The appellant has filed a copy of sale deed ofthe plot (supra) dated 14.09.2007. As per this deedthe appellant received Rs.10 lacs vide cheque No.684555 dated 14.09.2007 of State Bank of India,Ambala City. The appellant has failed to prove that ITA No. 368 of 2015-6- the cheque was deposited by her in SBI to get thecash. Moreover, there is no cash deposit of Rs.10lacs in Centurion Bank of Punjab on 14.09.2007. Thedates of deposit and the availability of cash do nottally either for sale of plot or gross receipts ofboutique. The appellant has failed to explain theentries of cash deposits in her bank account.Therefore, the appellant has failed to provide NEXUSbetween the cash availability and Bank deposits. As aresult, the addition of Rs.12,12,000/- is confirmed onaccount of unexplained deposits/investments in thebank.” 7.The Tribunal has affirmed the aforesaid findings of the CIT(A) by observing that even if it is assumed that certificate is correct andbearer of this property Shri Rajiv Kalra issued two bearer cheques No.684557 and 684558, then also it was not possible for the assessee toencash the cheque on 14.9.2007 itself whereas the sale deed wasexecuted on 14.9.2007 which must have taken some time. Further, itwas held that if the assessee had cash of ` 10 lacs on 14.9.2007, i.e.` 9 lacs from encashment of two cheques and ` 1 lac as cash payment,then why ` 4.05 lacs was deposited and the remaining amount has beendeposited in various installments. According to the Tribunal, theassessee had failed to satisfactorily explain the deposits of cash. TheTribunal has noticed as under:- “8.We have considered the rival submissioncarefully, we do not find any force in the submission ofLd. counsel for the assessee. Even if it is assumed that certificate is correct and bearer of this propertyShri Rajiv Kalra issued two bearer cheques No.684557 and 684558, then how it is possible thatassessee has been able to encash the cheque on14.07.2007 itself. The sale deed is also executed on14.09.2007 which must have taken sometime.Thereafter assessee got time to exchange thecheques. Assuming for argument sake that this ispossible. Still the problem is that on 15.09.2007 theassessee has deposited Rs.4,05,000/- only. Thedetails of cash deposited by the assessee are asunder:- “8.We have considered the rival submissioncarefully, we do not find any force in the submission ofLd. counsel for the assessee. Even if it is assumed that certificate is correct and bearer of this propertyShri Rajiv Kalra issued two bearer cheques No.684557 and 684558, then how it is possible thatassessee has been able to encash the cheque on14.07.2007 itself. The sale deed is also executed on14.09.2007 which must have taken sometime.Thereafter assessee got time to exchange thecheques. Assuming for argument sake that this ispossible. Still the problem is that on 15.09.2007 theassessee has deposited Rs.4,05,000/- only. Thedetails of cash deposited by the assessee are asunder:- 9.So, if the assessee has cash of Rs.10 lacs on14.09.2007 i.e. Rs.9 lacs from encashment of twocheques and Rs.1 lakh as cash payment, then whyonly Rs.4.05 lacs was deposited and then money hasbeen deposited in various installments as statedabove. No explanation was given for this discrepancy.Therefore, in our opinion, the assessee has not beenable to satisfactorily explain the deposits of cash and accordingly we confirm the order of CIT(A).” 8.The authorities below on appreciation of material on recordhave concurrently recorded that ` 12,12,000/- was unexplained deposits/investment in the bank of the assessee. Nothing could be shown thatthe approach of the Assessing Officer, the CIT(A) and the Tribunal waserroneous or perverse except only an effort was made to reappreciatethe evidence so as to record a finding different from the one arrived at bythe authorities below. The view of the Assessing Officer, the CIT(A) andthe Tribunal is a plausible view based on material on record whichwarrant no interference by this Court. 9.In view of the above, no substantial question of law arises inthis appeal. Accordingly, the instant appeal is dismissed. 10.There is a delay of 33 days in filing the appeal. CM No.20805-CII of 2015 has been filed for condonation of 33 days' delay infiling the appeal. Since the appeal has been dismissed on merits, nofurther orders are required to be passed in the application forcondonation of delay in filing the appeal and the same is disposed of assuch. (AJAY KUMAR MITTAL)JUDGE November 17, 2015gbs (RAMENDRA JAIN) JUDGE