Raj Kumar v. Income Tax Officer, Bathinda

ITA-181-2018 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA-181-2018 Date of Decision: 25.10.2018 Raj Kumar Versus ....Appellant. Income Tax Officer, Bathinda ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE AVNEESH JHINGAN. PRESENT: Mr. Maninder Arora, Advocate for the appellant. *** AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the assessee under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 31.10.2017 (Annexure A-3) passed by the Income Tax AppellateTribunal, Amritsar (hereinafter referred to as “the Tribunal”) in ITA No.533/ASR/2015, for the assessment year 2011-12, claiming the followingsubstantial questions of law:- i.Whether under the facts and in the circumstancesof the case the lower authorities and ITAT havenot committed illegality by passing the impugnedorders sustaining the addition of ` 14,73,000/-?of the case the lower authorities and ITAT havenot committed illegality by passing the impugnedorders sustaining the addition of ` 14,73,000/-?ii.Whether under the facts and in the circumstancesof the case the impugned orders are not liable to beset aside being in violation of Principles of Naturalof the case the impugned orders are not liable to beset aside being in violation of Principles of Natural ITA-181-2018 Justice? iii.Whether under the facts and in the circumstancesof the case, the Tribunal has not committed anillegality by not remanding the case to the file ofAssessing Officer by setting aside the ordersAnnexures A-1 & A-2?of the case, the Tribunal has not committed anillegality by not remanding the case to the file ofAssessing Officer by setting aside the ordersAnnexures A-1 & A-2? 2.Put shortly, the facts necessary for adjudication of the instantappeal as narrated therein may be noticed. The assessee filed his return ofincome on 12.3.2012 at ` 1,43,850/- for the assessment year 2011-12. Thecase was selected for scrutiny and statutory notices were issued to theassessee. The assessee could not receive the notices and even the registerednotice dated 7.3.2014 was returned with the remarks that 'the assessee hasleft without new address'. The Assessing Officer vide order dated19.3.2014 (Annexure A-1) added to the income of the assessee` 14,73,000/- and after making the addition of ` 57,700/- by estimating thenet profit @ 5% on the total amount of cash deposited by treating the sameas turnover and the income returned of ` 1,43,850/- framed the assessmentat ` 16,74,550/-. Feeling aggrieved by the said order, the assessee filed anappeal before the Commissioner of Income Tax (Appeals) [for brevity “theCIT(A)”]. The CIT(A) vide order dated 26.8.2015 (Annexure A-2)dismissed the appeal. Still dissatisfied, the assessee filed an appeal beforethe Tribunal who vide order dated 30.11.2017 (Annexure A-3) partlyallowed the appeal and remanded the matter back to the CIT(A) toadjudicate ground No.4, i.e., 'That Ld. CIT(A) erred on facts and law inconfirming the addition of ` 57,700/- made by the AO on account ofGURBACHAN SINGHestimating the net profit @ 5% on the total amount of cash deposits in the2018.11.12 14:15I attest to the accuracy andintegrity of this document ITA-181-2018 saving bank accounts of the assessee' on merits. Hence, the present appealby the assessee. 3.After hearing learned counsel for the assessee-appellant, we donot find any merit in the appeal. 4.On the basis of the substantial questions of law claimed by theassessee, the following issues emerge for consideration:-assessee, the following issues emerge for consideration:- (1)Whether the addition of ` 14,73,000/- made by theAssessing Officer sustained by the CIT(A) and theTribunal was justified?Assessing Officer sustained by the CIT(A) and theTribunal was justified? ITA-181-2018 saving bank accounts of the assessee' on merits. Hence, the present appealby the assessee. 3.After hearing learned counsel for the assessee-appellant, we donot find any merit in the appeal. 4.On the basis of the substantial questions of law claimed by theassessee, the following issues emerge for consideration:-assessee, the following issues emerge for consideration:- (1)Whether the addition of ` 14,73,000/- made by theAssessing Officer sustained by the CIT(A) and theTribunal was justified?Assessing Officer sustained by the CIT(A) and theTribunal was justified? (2)Whether the Tribunal was right in remanding theissue of addition of ` 57,000/- on account of netprofit @ 5% of the total amount of cash deposits tothe CIT(A)?issue of addition of ` 57,000/- on account of netprofit @ 5% of the total amount of cash deposits tothe CIT(A)? 5.Taking up first issue of addition of ` 14,73,000/-, the AssessingOfficer made the said addition with the following observations:-Officer made the said addition with the following observations:- “Since the assessee has not furnished any informationregarding source of the amounts, the whole amountdeposited by the assessee is to be treated as unexplained.However, since the assessee has made withdrawals ofcash also on different dates, peak amount at` 14,73,000/- has been worked out as above.regarding source of the amounts, the whole amountdeposited by the assessee is to be treated as unexplained.However, since the assessee has made withdrawals ofcash also on different dates, peak amount at` 14,73,000/- has been worked out as above. In view of the above working, the peak amount ofcash deposited by the assessee in cash in bank amountingto ` 14,73,000/- is held to be the income of the assesseefrom undisclosed sources and is added to his income u/s69 of the Act. The total amount of cash deposited in bothto ` 14,73,000/- is held to be the income of the assesseefrom undisclosed sources and is added to his income u/s69 of the Act. The total amount of cash deposited in both the accounts works at ` 35,31,000/-. It may bementioned here that there are certain cash withdrawalbelow ` 10,000/-, but the same have not been taken intoaccount while working out peak credit on thepresumption that the same withdrawals relates day-to-dayexpenses of business.” 6.During the appellate proceedings before the CIT(A), theassessee-appellant pleaded that cash deposits in bank accounts were on thebasis of availability of funds with his mother Smt. Satya Devi on account ofsale of portion of immovable property on 16.1.2008. According to him, thesaid property was sold for ` 56,50,000/- and the cash deposits were made byhim from the said amount. The said ground was rejected by the CIT(A)with the following observations:- “Even during the appellate proceedings, there was areluctance on the part of the appellant to come forwardand explain the sources from which the impugned cashdeposits were made in his bank accounts. Animplausible explanation was offered that the saiddeposits were sources from the sale proceeds of` 56,50,000/- which accrued to the appellant's mother on16[th] of January, 2008. The appellant had no explanationfor the considerable time lag in the purported deposit ofthe sale proceeds of January 2008, in the bank accountsduring the financial year 2010-11. The appellant wasalso unwilling to give any information regarding thetaxability of such accruals in the hands of the appellant's mother during the relevant period. Under thesecircumstances, the appellant was denied the opportunityof adducing the new evidence and the request wasoverwhelmingly rejected.” The Tribunal upheld the said addition sustained by the CIT(A). mother during the relevant period. Under thesecircumstances, the appellant was denied the opportunityof adducing the new evidence and the request wasoverwhelmingly rejected.” The Tribunal upheld the said addition sustained by the CIT(A). 7.In view of the concurrent findings of fact recorded by theAssessing Officer, the CIT(A) and the Tribunal that the assessee-appellantwas unable to satisfactorily explain the source of ` 14,73,000/-, which wasadded on account of peak addition, no error could be pointed out in theimpugned orders which may warrant interference by this Court. Thus,question No.1 does not arise. 8.Now adverting to second issue, regarding the addition of` 57,700/- on account of net profit @ 5% of the total amount of cashdeposits in the saving bank account of the assessee, it may be noticed that the Tribunal had recorded that from the order passed by the CIT(A), itappeared that the said issue was taken by the assessee in the grounds ofappeal before the CIT(A), however, neither specific agitation was made bythe assessee nor adjudicated by the CIT(A). The relevant findings recordedby the Tribunal in this regard read thus:- “From the order passed by the Ld. CIT(A), we realizethat although the assessee had raised the ground beforethe Ld. CIT(A) with regard to ground No.4 herein,however, from the order passed by the Ld. CIT(A), itappears that the said issue was taken by the assessee inthe grounds of appeal before the Ld. CIT(A), however,neither specific agitation was made by the assessee nor adjudicated by the Ld. CIT(A), therefore, we feel itappropriate to remand back the issue raised in groundNo.4 of instant appeal to the file of Ld. CIT(A) toadjudicate the same on merit by offering proper andreasonable opportunity of being heard. It is clarified thatthe Ld. CIT(A) shall be restricted to deal with groundNo.4 only. Ground No.4 stands allowed.” 9.Accordingly, the Tribunal had remitted the matter to the CIT(A) to decide the issue regarding 'the addition of ` 57,700/- made by theassessing Officer on account of net profit @ 5% on the total amount of cashdeposits in the saving bank account of the assessee afresh on merits afteraffording proper opportunity of hearing to the assessee. 10.No illegality or perversity could be pointed out by learnedcounsel for the assessee in the findings recorded by the Tribunal which maywarrant interference by this Court. No question of law, much less,substantial question of law arise in the appeal. 11.Accordingly, finding no merit in the appeal, the same is herebydismissed. (AJAY KUMAR MITTAL) JUDGE October 25, 2018gbs (AVNEESH JHINGAN)JUDGE Whether Speaking/Reasoned Whether Reportable Yes/NoYes/No