Rajat Bansal v. Commissioner Of Income Tax And Another

ITA No. 213 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 213 of 2010Date of Decision: 21.7.2010 Rajat Bansal Versus ....Appellant. Commissioner of Income Tax and another ...Respondents. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Akshay Bhan, Advocate for the appellant. ADARSH KUMAR GOEL, J. 1.This appeal has been preferred by the assessee underSection 260A of the Income Tax Act, 1961 (in short, “the Act”) againstthe order dated 11.9.2009 passed by the Income Tax AppellateTribunal, Amritsar Bench, Amritsar (hereinafter referred to as “theTribunal”) in ITA No. 297/ASR/2009 for the assessment year 2003-04proposing to raise the following substantial questions of law:- “i)Whether in the facts and circumstances of thepresent case the action of the authorities belowto make addition mere relying upon thestatement of third person at the back of thepresent case the action of the authorities belowto make addition mere relying upon thestatement of third person at the back of the assessee/appellant is legally sustainable in the eyes of law? ii) Whether in the facts and circumstances of thepresent case the action of the authorities belownot to grant an opportunity to assessee/appellant to cross examine the person onwhose statement the addition was made andnot to hand over the copy of the statement, islegally sustainable in the eyes of law? iii) Whether in the facts and circumstances of thepresent case the action of the authorities not toconsider the additional evidence under Rule46-A of the Act is legally sustainable in theeyes of law? iv) Whether in the facts and circumstances of thepresent case the impugned orders A-1 to A-3are legally sustainable in the eyes of law?” 2.Facts necessary for deciding the present appeal may benoticed. The assessee is an individual and had not filed any return forthe relevant assessment year. A survey was conducted by the IncomeTax Department on M/s Usha Garg and Company. The AssessingOfficer on receiving information from the Assistant Commissioner ofIncome Tax, Moga vide his office letter dated 20.2.2006, examined indetail, the current account No. 31001 of M/s Usha Garg and Companywith Union Bank of India, Moga which revealed that Shri Rajat Bansalhad received the following entries from this account:- -3- It was also noticed that the said current account of M/s Usha Garg andCompany had entries of cash deposits of equal amounts in that accountbefore the issuance of cheque to Rajat Bansal, the present assessee.The authorized representative of M/s Usha Garg and Company statedthat he had no business other than providing accommodation entriesby receiving specific amount of commission. The Assessing officer alsonoticed that a sum of Rs.10,39,500/- was deposited in cash in CenturionBank of Punjab Ltd., Moga, on 19.2.2003, 21.2.2003 and 3.3.2003 inthe account of the assessee. Accordingly, notice under Section 148 ofthe Act was issued. The Assessing Officer also relied upon theobservations of the Hon'ble Supreme Court in the case of MC Dowelland Co. Ltd., 154 ITR 148 (SC) and finding that the assessee hadconcealed the income, re-assessment was framed on total taxableincome of Rs.22,17,700/- after making the aforesaid additions. Againstthese additions, an appeal was filed by the assessee before theCommissioner of Income Tax (Appeals) [in short “CIT (A)”]. During thependency of appeal, the assessee made an application to file certainadditional evidence in the form of undated certificate which was notallowed having regard to the conduct of the assessee not beingcooperative during the assessment proceedings. The CIT (A) observedthat in several other cases of Ludhiana, M/s Usha Garg and Company had been found to be an agent for laundering the unaccounted moneyin similar manner. He, therefore, treated Rs.11,27,000/- as concealedincome of the assessee and added the same to the return of his incomebeing income from undisclosed sources. The addition ofRs.10,39,500/-, however, was deleted. On further appeal, the Tribunalaffirmed the findings of the CIT (A). It was held that the addition indispute had rightly been upheld by the CIT (A) and additional evidencewas not permissible in view of the conduct of the assessee duringassessment proceedings as well as on the ground that the saidevidence was not essential for just and proper decision of the case. 3.We have heard the learned counsel for the appellant.4.The question for consideration is whether there is anyperversity in the view taken by the authorities in making the addition. 5.Learned counsel for the appellant submitted that thestatement of third person recorded, could not be used against himunless an opportunity to cross-examine that person was given asrequired under the law. Learned counsel further submitted thatadditional evidence under Rule 46A of the Income Tax Rules, 1962 hadbeen illegally declined. 6.Both the contentions of learned counsel for the assesseehas no substance in it. We do not find any ground to hold that thereassessment was not justified. The Assessing Officer had not madethe addition solely on the statement of third person Shri Shagun Gargbut there was cogent material on record on the basis of which thereassessment was done. The HUF of father of the assessee, namely,Dwarka Dass (HUF) had surrendered a sum of Rs.10,64,000/- which was allegedly received from M/s Usha Garg and Company asundisclosed income by filing the revised return. There were cashdeposits of almost equal amounts in the current account of M/s UshaGarg and Company before issuance of the cheques to the assessee.The grievance of the assessee that opportunity to cross examine ShriShagun Garg had not been provided does not stand judicial scrutiny asthe burden was on the assessee to examine the said party with whomhe had made transactions to prove the genuineness thereof. It is notthe case of the assessee that during reassessment proceedings noopportunity was given to the assessee to show that it was not hisincome whereas the Assessing Officer has recorded that the assesseehad not been cooperative during the proceedings and had beendeliberately and knowingly evading the reassessment proceedings.Once there was material to justify the addition made on merits, no errorcould be noticed in the re-assessment proceedings. 7.The second contention is equally devoid of merit inasmuchas the additional evidence had been declined as the assessee was notvigilant in pursuing the proceedings before the Assessing Officer and itwas not established that the material was essential to adjudicate thecontroversy effectively. Moreover, the Tribunal observed as under:- “.... In our view, the assessee does not deserve anylenient view from the court of law on the issue ofadditional evidence produced by the assessee beforethe Ld. first appellate authority. This evidence wasvery much available with the assessee during thecourse of assessment but the assessee could not establish the circumstances and the reasons as towhy he has not produced the same before the A.O.Therefore, the ld. first appellate authority has rightlyrejected the same. Secondly, the assessee could notestablish that the additional evidence produced bythe assessee before the ld. CIT (A) is very muchessential for just and proper decision in the case ofthe assessee.” 8.In view of the above, we are unable to hold that anysubstantial questions of law arise in this appeal. 9.The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE July 21, 2010gbs (AJAY KUMAR MITTAL)JUDGE