Teji Singh v. Commissioner Of Income Tax, Karnal

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : I. T. A. No. 171 of 2015 Reserved On : August 22, 2016Pronounced On : September 05, 2016 Teji Singh vs. Commissioner of Income Tax, Karnal ....Appellant ....Respondent CORAM : HON'BLE MR. JUSTICE S. J. VAZIFDAR, CHIEF JUSTICE.HON'BLE MR. JUSTICE DEEPAK SIBAL. * * * Present :Mr. Divya Suri, Advocate for the appellant. Mr. Yogesh Putney, Advocatefor the respondent. * * * DEEPAK SIBAL, J. : Invoking Section 260-A of the Income Tax Act, 1961 (for short– the Act), the assessee has preferred the instant appeal to challenge thereinthe order passed by the Income Tax Appellate Tribunal, Chandigarh Bench`A', Chandigarh (for short – the Tribunal). The appeal pertains to the assessment year 2009-10 andaccording to the assessee, in the same, the following substantial questions oflaw arise :- “I.Whether the 'chargeable income' is to be inthe hands of the beneficiary & the 'charge'has to be on the 'real income' of theassessee as emerging from the 'materialfacts' containing 'material particulars' inaccordance with ITO Vs. Atchaiah (1996) 1SCC 417 ?the hands of the beneficiary & the 'charge'has to be on the 'real income' of theassessee as emerging from the 'materialfacts' containing 'material particulars' inaccordance with ITO Vs. Atchaiah (1996) 1SCC 417 ? II.Whether under the facts and circumstancesof the case, the action of treating the'capital account transactions' into 'revenue'is unreasonable while charging thecharacter of bank receipts in the hands ofthe recipient ?”of the case, the action of treating the'capital account transactions' into 'revenue'is unreasonable while charging thecharacter of bank receipts in the hands ofthe recipient ?” Having heard learned counsel for the parties and perusing therecord with their able assistance, we are of the opinion that the presentappeal raises no substantial questions of law as the Tribunal, as also theCommissioner of Income Tax (Appeals), Karnal (hereinafter referred to as –the Commissioner), on challenge made to the assessment order by theassessee, have only adjudicated upon factual issues. The relevant facts lie in a narrow compass. The assessee filed his income tax return for the assessment year 2009-10. His case wasselected for scrutiny, as a result whereof, he was issued and served uponnotices under Sections 142 (1) and 143 (2) of the Act. A detailed questionnaire was also issued, to which the assessee filed his response. Theassessee was asked to explain the cash deposits of Rs. 23,34,075/- and Rs.59,92,750/- made by him in the previous year in his accounts in the StateBank of India and Axis Bank. In response, attempting to explain the afore-referred cashdeposits made by him which he claimed to have received from his fatherSolia Ram, the assessee submitted that his father, along with his brothers(assessee's uncles), through agreement dated 02.08.2008 with one BaldevSingh son of Ram Singh, had agreed to sell 30 kanals of land @ Rs.1,11,00,000/- per acre. It was submitted that in pursuance to the afore-referred agreement, the advance of Rs. 60,00,000/- was received on02.08.2008 and the date of registration of sale deed was fixed as01.05.2009. However, on 30.04.2009, the agreement was cancelled. Theadvance of Rs. 60,00,000/- was returned. Thereafter, on 30.04.2009 itself,another agreement qua the same land was executed, in pursuance to which,advance of Rs. 85,00,000/- was received and date of registration of saledeed was fixed as 30.06.2009. This agreement was also cancelled on25.06.2009 and the entire amount of the received advance was returned.The assessee then went on to submit that on 26.06.2009, another agreementwas executed, in pursuance whereof, an advance of Rs.1,00,00,000/- wasreceived, but the date of registration of sale deed qua this agreement was notmentioned. The Assessing Officer disbelieved the stand of the assessee. The Assessing Officer disbelieved the stand of the assessee. He found that none of the afore-referred agreements referred to the assesseeas the owner of the land. The owners of the land were the assessee's fatherand his uncles. The sources of the afore-referred cash deposits of Rs.23,34,075/- and Rs. 59,92,750/- made by the assessee in his accounts in theState Bank of India and Axis Bank respectively were found to beunexplained. The final sale deed dated 30.12.2009 was found to havetransferred the aforesaid land in favour of Amar Nath, Nilima, NavitaKhurania and Sweta, whereas the earlier agreements were found to havebeen entered into between the father of the assessee and his uncles on oneside and one Baldev Singh son of Ram Singh on the other. The sale deeddated 30.12.2009 depicted the total sale price to be Rs. 54,12,000/-. Therewas no reference of any advance paid in the sale deed. When this wascompared to the agreement dated 02.08.2008, it was found that in pursuanceto such agreement, the advance itself paid by Baldev Singh to the assessee'sfather and his brothers was Rs.60,00,000/-. It was further found that theagreement dated 02.08.2008, as also the subsequent agreements, were for 30kanals, but the final sale deed dated 30.12.2009 was for only 24 kanals 01marla. The Assessing Officer asked the assessee to produce Baldev Singhson of Ram Singh but for reasons best known to him, the assessee failed todo so. Summons under Section 131 of the Act were issued to the saidBaldev Singh, who, as per the Inspector's report, refused to accept thesummons. Thereafter, a copy of the summons was sent to Baldev Singh byregistered post, but he failed to comply with the same. In view of the afore-referred facts, the Assessing Officer addedto the income of the assessee the cash deposits made by him for Rs.23,34,075/- and Rs. 59,92,750/- in the State Bank of India and Axis Bankrespectively. The assessee challenged the assessment order by way of anappeal before the Commissioner, who dismissed the same. The reasons, asgiven by the Assessing Officer, for addition of the cash deposits made bythe assessee, were sustained by the Commissioner. The Commissionerfurther found that no offer was made by the assessee to explain the source ofdeposits made by him in his saving bank account maintained with the StateBank of India. So far as the source of deposit of cash in his saving bankaccount maintained with Axis Bank was concerned, the assessee hadsubmitted that his father, along with his three uncles, in pursuance to thesale agreement dated 02.08.2008, had received Rs. 60,00,000/- in advanceand it was this amount, which had been handed over by his father to him,which he deposited in his bank account maintained with Axis Bank, Kaithal.This fact had also come in the statement of his father. When the veracity ofthe above stand taken by the assessee was gone into by the Commissioner,he found that cash deposits had been made by the assessee in his savingsaccount maintained with Axis Bank to the tune of Rs. 6,00,000/- and Rs.22,00,000/- on 16.07.2008 and 01.08.2008 respectively, which were prior tothe agreement to sell dated 02.08.2008. Thus, the submission of theassessee and the statement of his father were found to be false. The assessee had submitted that initially, the agreement to sellthe land had been entered into on 02.08.2008, in pursuance to which, Rs.60,00,000/- as advance had been received by the assessee's father and hisuncles. According to him, the amount deposited in Axis Bank was out ofthis amount. He further went on to submit that this agreement wascancelled on 30.04.2009 and on such cancellation, the entire amount wasreturned. The Commissioner found that no transaction for withdrawal ofany money from the bank accounts of the assessee had been made between16.04.2009 to 30.04.2009. The assessee had submitted that initially, the agreement to sellthe land had been entered into on 02.08.2008, in pursuance to which, Rs.60,00,000/- as advance had been received by the assessee's father and hisuncles. According to him, the amount deposited in Axis Bank was out ofthis amount. He further went on to submit that this agreement wascancelled on 30.04.2009 and on such cancellation, the entire amount wasreturned. The Commissioner found that no transaction for withdrawal ofany money from the bank accounts of the assessee had been made between16.04.2009 to 30.04.2009. The assessee had further submitted that after cancellation of theafore-referred agreement dated 02.08.2008, another agreement dated30.04.2009 qua the same tract of land was entered into between the fatherand the uncles of the assessee on one side and Baldev Singh on the otherside. In pursuance to this agreement, Rs. 85,00,000/- was received. Theassessee stated that this agreement was also cancelled on 25.06.2009 and theentire amount so received was returned. On perusal of the record, theCommissioner found that there was no transaction of withdrawal of anymoney by the assessee on 25/26.06.2009 from his bank accounts. In view of the above, the Commissioner, being of the view thatthe cash deposits made by the assessee in his saving bank accountsmaintained with the Axis Bank and State Bank of India had nothing to dowith the sale of land by his father and his uncles, dismissed his appeal,which gave him a cause to file an appeal before the Tribunal. The facts, as referred to above, were gone into by the Tribunaland agreeing with the Assessing Officer and the Commissioner, theTribunal, gave its stamp of approval to the orders passed by them bydismissing the appeal of the assessee. The afore-referred inconsistencies inthe stand of the assessee, were noticed which led to the rejection of theappeal of the assessee. Thus, the factual position brought forward by the assessee, toexplain the cash deposits made by him in his saving bank accounts, wereconcurrently considered and rejected by both – the Commissioner as alsothe Tribunal. After having gone through the same, we find no absurdity orperversity in them warranting any interference on our part. Resultantly, finding no merit in the appeal, the same is orderedto be dismissed. Whether speaking/reasoned ? Yes/No. Whether reportable ? Yes/No. ( S. J. VAZIFDAR ) CHIEF JUSTICE September 05, 2016 ( DEEPAK SIBAL )JUDGE