Shakun Mehta v. Commissioner Of Income Tax, Hisar

ITA No. 78 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 78 of 2015 Date of Decision: 18.8.2015 Shakun Mehta ....Appellant. Versus Commissioner of Income Tax, Hisar ...Respondent. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Ravi Shankar, Advocate and Mr. B.M. Monga, Advocate for the appellant. Mr. Tajender K. Joshi, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the assessee underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 7.11.2014 (Annexure A-3) passed by the Income TaxAppellate Tribunal, Chandigarh Bench “A”, Chandigarh (hereinafterreferred to as “the Tribunal”) in ITA No. 901/CHD/2012, for theassessment year 2009-10, claiming the following substantial questionsof law:- i.Whether on the facts and in the circumstancesof the case, the Tribunal has erred in law insustaining the addition of ` 43,00,000/- thoughreceived as advance for sale of propertyignoring the vital fact that the deal could not beof the case, the Tribunal has erred in law insustaining the addition of ` 43,00,000/- thoughreceived as advance for sale of propertyignoring the vital fact that the deal could not be materialized and the said advance was returnedduring the year itself from the same bankaccount? ii. Whether the ITAT is justified while sustainingthe addition of`43,00,000/- withoutappreciating that the assessee had dischargedthe initial onus and the AO was duty bound todischarge its onus to prove that the impugnedbank deposits are actually the undisclosedincome of the assessee which in fact had beenreceived from the intending purchasers whichfinding is contrary to judgment of the Hon'bleDelhi High Court in CIT vs. Oasis HospitalitiesPvt. Ltd. 333 ITR 119? 2.Briefly stated, the facts necessary for adjudication of theinstant appeal as narrated therein may be noticed. The assessee filedreturn of income on 26.6.2009 declaring an income of ` 2,14,820/-. Theassessment was framed by the Assessing Officer vide order dated30.12.2011 (Annexure A-1) by making addition of ` 43,00,000/-. Feelingaggrieved, the assessee filed an appeal before the Commissioner ofIncome Tax (Appeals) [for brevity “the CIT(A)”]. The said appeal wasallowed by the CIT(A) vide order dated 18.6.2012 (Annexure A-2) andaddition of ` 43,00,000/- made by the Assessing Officer was deleted.Against the order, Annexure A-2, the revenue filed an appeal before theTribunal who vide order dated 7.11.2014 (Annexure A-3) set aside theorder of the CIT(A) and restored that of the Assessing Officer. Hence,the present appeal by the assessee. 4.We have heard learned counsel for the parties and perused the record. 5.The Assessing Officer vide assessment order dated30.12.2011 (Annexure A-1) made an addition of ` 43,00,000/- to thetotal income as the assessee had failed to explain the sources of thesaid amount. Further, the agreement of advance was held to be not areliable document. On appeal by the assessee, the CIT(A) vide orderdated 18.6.2012 (Annexure A-2) allowed the appeal. The CIT(A) heldthe finding of the Assessing Officer that the agreement to sell is not areliable document was erroneous and without basis and accordinglydeleted the addition of ` 43,00,000/- made by the Assessing Officer.Being aggrieved, the revenue filed an appeal before the Tribunal whovide order dated 7.11.2014 (Annexure A-3) set aside the order of the CIT(A) and restored that of the Assessing Officer. the record. 5.The Assessing Officer vide assessment order dated30.12.2011 (Annexure A-1) made an addition of ` 43,00,000/- to thetotal income as the assessee had failed to explain the sources of thesaid amount. Further, the agreement of advance was held to be not areliable document. On appeal by the assessee, the CIT(A) vide orderdated 18.6.2012 (Annexure A-2) allowed the appeal. The CIT(A) heldthe finding of the Assessing Officer that the agreement to sell is not areliable document was erroneous and without basis and accordinglydeleted the addition of ` 43,00,000/- made by the Assessing Officer.Being aggrieved, the revenue filed an appeal before the Tribunal whovide order dated 7.11.2014 (Annexure A-3) set aside the order of the CIT(A) and restored that of the Assessing Officer. 6.The Tribunal noticed that the assessee was not the owner ofthe land in respect of which she had entered into agreement as the landbelonged to her husband. No copy of any registered power of attorneyof her husband in her favour was produced. Further, a perusal of para13 of the Tribunal's order where affidavits of four persons who hadallegedly advanced money is seen, it is noticed that it is exactly in thesame language. None of the affidavits has individually specified theamount advanced. Still further, no specific source of the payment ofthese persons had been explained except to state that they areagriculturist and not income tax assessees. The said persons had notbeen produced before the Assessing Officer for verification of theiraffidavits as well. The relevant findings of the Tribunal are as under:- “12.We have considered the rival submissions carefully and find no force in the submissions of Ld.Counsel for the assessee. First of all, it is verydifficult to believe that the assessee who is not ownerof the land had entered into agreement when the landbelonged to her husband. Though it was statedbefore Assessing Officer and the Ld. CIT(A) thatPower of Attorney was executed by her husband infavour of the assessee but copy of the power ofattorney has not been produced before the AssessingOfficer and, therefore, the Ld. CIT(A) should havebeen little careful in asking for the power of attorneybut he simply believed this theory without examiningthe Power of Attorney. Before us also a copy ofPower of Attorney is not filed. It is very difficult toascertain in what circumstances the Power of Attorneywas given by her husband. This fact itself is sufficientto disbelieve the story of Agreement to Sell entered bythe assessee. 13.Normally, no purchaser would agree topurchase the land from attorney holder until andunless such Attorney is duly registered or the personsowning the land becomes a confirming party in theAgreement to Sell. As observed above, Power ofAttorney has not been filed before us and the perusalof the Agreement to Sell clearly shows that Shri I.D.Mehta who is husband of the assessment is not aconfirming party in the Agreement to Sell. The copies ITA No. 78 of 2015 of the affidavits filed by four different purchasers whowere stated to be not related parties reads as under:- “HARYANA 21AA 12878 AFFIDAVIT I Ravi Parkash S/o Sh. Bhim Singh resident ofvillage Khera, teshil Dabwali, Distt. Sirsa, dohereby solemnly affirm and declare as under: 1.That I am permanent resident of villageSukhera Khera and purely agriculturist.Sukhera Khera and purely agriculturist. 2.That my source of income is fromagriculture and I am not assessed toincome tax.agriculture and I am not assessed toincome tax. 3. That an agreement to purchaseagriculture land situated at villageBudhabhana, Distt. Sirsa was made byme with 3 other co-sharer on dated02.07.2008 with Smt. Shakun Mehta R/oagriculture land situated at villageBudhabhana, Distt. Sirsa was made byme with 3 other co-sharer on dated02.07.2008 with Smt. Shakun Mehta R/o Sirsa. 4. 21AA 12878 AFFIDAVIT I Ravi Parkash S/o Sh. Bhim Singh resident ofvillage Khera, teshil Dabwali, Distt. Sirsa, dohereby solemnly affirm and declare as under: 1.That I am permanent resident of villageSukhera Khera and purely agriculturist.Sukhera Khera and purely agriculturist. 2.That my source of income is fromagriculture and I am not assessed toincome tax.agriculture and I am not assessed toincome tax. 3. That an agreement to purchaseagriculture land situated at villageBudhabhana, Distt. Sirsa was made byme with 3 other co-sharer on dated02.07.2008 with Smt. Shakun Mehta R/oagriculture land situated at villageBudhabhana, Distt. Sirsa was made byme with 3 other co-sharer on dated02.07.2008 with Smt. Shakun Mehta R/o Sirsa. 4. That the said agreement was made jointlywith Sh. Sarjeet Singh, Sh. Prem Nathand Sh. Puran Chand. 5. That we have given total advance ofRs.43.00 lakh to Smt. Shakun Mehtaduring the year 2008-09. 6. That however, the deal could not bematerialized due to disputes between usand Shakun Mehta and ultimately the ITA No. 78 of 2015 advance given was returned back. Sd/- DEPONENT VERIFICATION: The above said facts are true and correct to thebest of my knowledge and belief and nothing is concealed therein. Place: SIRSASd/-Dated: 22.9.11 DEPONENT”XXXXXXXXXXXXXXXX14.The perusal of the above affidavits would showthat exactly the same language has been used in allthe affidavits. All the four persons have not statedhow much money each one of them has paid. Nospecific source of the payment has been explainedand it has been simply stated that they areagriculturists. When four persons have paid a sum ofRs.43 lakhs the Assessing Officer could have verifiedthe sources only if such persons were producedbefore him. We fail to understand how Ld. CIT(A)believed these affidavits particulars when theAssessing Officer had insisted on producing thesepersons. The affidavits are clearly in the nature of selfserving documents and cannot be believed. Furtherthere is no evidence why the deal did not mature.How the amounts were returned whether any receipts ITA No. 78 of 2015 -7- were taken or not is not clear. All thesecircumstances make the whole story not plausible. Inour opinion it seems to be only a story to explain thedeposits of cash and does not have any substance.Therefore, we set aside the order of Ld. CIT(A) and restore that to Assessing Officer.” 7.The aforesaid findings of fact recorded by the assessingauthority and the Tribunal are not shown to be erroneous or perverse inany manner. Thus, no substantial question of law arises in this appeal.Accordingly, the instant appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE August 18, 2015 gbs (RAMENDRA JAIN) JUDGE