The Commissioner Of Income Tax-I, Chandigarh v. Sh. Sukhjit Singh

ITA No. 626 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 626 of 2010 Date of Decision: 16.2.2011 The Commissioner of Income Tax-I, Chandigarh Versus Sh. Sukhjit Singh ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Senior Standing Counsel,for the appellant. Mr. S.K. Mukhi, Advocate and Ms. Jyoti, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) againstthe order dated 23.7.2009 passed by the Income Tax AppellateTribunal, Chandigarh Bench “B”, Chandigarh in ITA No. 515/Chd/2009,relating to the assessment year 2005-06, claiming the followingsubstantial question of law:- “Whether, on the facts and in the circumstances ofthe case, the Hon'ble ITAT was right in law indeleting the addition of Rs.17,19,000/- made u/s 68of the I.T. Act, when the assessee had failed to establish the genuineness and source of the same during the course of the assessment proceedings?” 2.Briefly stated, the facts necessary for adjudication asnarrated in the appeal are that the assessee filed his return of incomeon 5.8.2005 for the assessment year 2005-06 declaring an income ofRs.1,03,500/- plus agricultural income amounting to Rs.3,75,000/-. Thecase of the assessee was taken up for scrutiny and the assessmentorder was passed on 31.12.2007 at an income of Rs.18,93,500/- plusRs.3,75,000/- as agricultural income against returned income ofRs.1,03,500/- plus agricultural income Rs.3,75,000/-. The AssessingOfficer made an addition of Rs.17,19,000/- on account of cash deposit.The assessee approached the Commissioner of Income Tax (Appeals)[in short “the CIT(A)”] by way of an appeal and the CIT(A) vide orderdated 13.3.2009 sustained the aforesaid addition of Rs.17,19,000/-. Onfurther appeal by the assessee, the Tribunal vide order dated 23.7.2009allowed the appeal and deleted the addition of Rs.17,19,000/- byholding that the said amount could be grown from the sale proceeds of100 acres of land. Hence, the present appeal by the revenue. 3.We have heard learned counsel for the parties. 4.The point for consideration in this case is whether theassessee had derived agricultural income amounting to Rs.17,19,000/-. 5.Learned counsel for the revenue submitted that theAssessing Officer as well as the CIT(A) came to the conclusion that theassessee had failed to establish and discharge the onus which wasplaced on him to show that the deposit made in the account was onaccount of agricultural income. He has placed reliance upon the following findings recorded by CIT(A):- “3.4I have given my careful consideration to theassessment order, rival contentions and counter commentsthereon of the A.O. After considering the same, I am of theview that it is well settled principle of law that the onus toestablish the genuineness and source of cash deposit inthis case is upon the assessee. Mere filing of affidavit orcopy of ledger account is not enough to discharge theonus. This principle of law is established in the decisions ofPunjab and Haryana High Court in 273 ITR 206 and 254ITR 617 and even in the decision of Hon'ble JurisdictionalTribunal in the case of M/s Ashok Trading Co. Vs. ITO,Kaithal, ITA No.452/Chandi/2003. following findings recorded by CIT(A):- “3.4I have given my careful consideration to theassessment order, rival contentions and counter commentsthereon of the A.O. After considering the same, I am of theview that it is well settled principle of law that the onus toestablish the genuineness and source of cash deposit inthis case is upon the assessee. Mere filing of affidavit orcopy of ledger account is not enough to discharge theonus. This principle of law is established in the decisions ofPunjab and Haryana High Court in 273 ITR 206 and 254ITR 617 and even in the decision of Hon'ble JurisdictionalTribunal in the case of M/s Ashok Trading Co. Vs. ITO,Kaithal, ITA No.452/Chandi/2003. 3.5Moreover, the Assessing Officer is entitled to enquireand satisfy himself about the sources of money in thehands of the assessee. In this case, the source of moneydeposited in the bank account was not explained. Themere statement that he is only an agriculturist and has nobusiness and CA told him that return of income showingagricultural income alone could not be filed as it is nottaxable is hard to believe. The case laws cited by thecounsel are quite different to the facts of this case and arenot applicable. Therefore, keeping in view the above factsand discussion, I hold that the Assessing Officer is justifiedin making the addition of Rs.17,19,000/-. The additionalevidence furnished by the assessee before me is also of no consequence in so far as the source of cash deposit ofRs.17,19,000/- has not been satisfactorily explained.” 6.On the other hand, learned counsel for the assesseesupported the order passed by the Tribunal and has placed reliance onthe following judgments:- (i)Commissioner of Income Tax v. Ashok Arora,[2010] 329 ITR 578 (P&H); and [2010] 329 ITR 578 (P&H); and (ii)Commissioner of Income-Tax v. D.S. Promotersand Developers Pvt. Ltd., [2011] 330 ITR 291and Developers Pvt. Ltd., [2011] 330 ITR 291 (Delhi); 7.We have given our thoughtful consideration to therespective submissions of learned counsel for the parties. 8.From a perusal of the order of the Tribunal, we find that theTribunal had proceeded to record the finding deleting the addition ofRs.17,19,000/- on the basis of conjectures that the assessee must havegrown on the land and the amount so deposited was from the saleproceeds of produce grown on 100 acres of land without there beingany material to substantiate the said claim. The relevant findingrecorded by the Tribunal reads thus:- “We are of the view that even the income if estimated at therate of Rs.25,000/- per acre, still it goes to Rs.25 lakhs. Ifthe totality of facts and circumstances are analysed, it canbe said that the impugned amount of Rs.17,19,000/- can begrown from 100 acres of land.” 9.The finding recorded by the Tribunal being based onconsideration of non-existent material is vitiated and liable to be set ITA No. 626 of 2010 aside. The judgments relied upon by learned counsel for the assesseehas no applicability to the facts of the present case. 10.Accordingly, the substantial question of law is answered infavour of the revenue. The appeal is allowed and the impugned orderpassed by the Tribunal is set-aside. The matter is remitted to theTribunal to proceed afresh in accordance with law. 11.The parties through their counsel are directed to appearbefore the Tribunal on 23.5.2011 for further proceedings in the matter. (AJAY KUMAR MITTAL) JUDGE February 16, 2011gbs (ADARSH KUMAR GOEL) JUDGE (i)Commissioner of Income-Tax, Mysore v. SeguBuchiah Setty, [1970] 77 ITR 539 (SC);Buchiah Setty, [1970] 77 ITR 539 (SC); (ii)Commissioner of Income-Tax v. Vir Bhan andsons, [2005] 273 ITR 206 (P&H);sons, [2005] 273 ITR 206 (P&H); (iii)Miri Mal Mahajan v. Commissioner of Income-Taxand another, [1974] 95 ITR 186 (P&H);and another, [1974] 95 ITR 186 (P&H); 11.The parties through their counsel are directed to appearbefore the Tribunal on 23.5.2011 for further proceedings in the matter. (AJAY KUMAR MITTAL) JUDGE February 16, 2011gbs (ADARSH KUMAR GOEL) JUDGE (i)Commissioner of Income-Tax, Mysore v. SeguBuchiah Setty, [1970] 77 ITR 539 (SC);Buchiah Setty, [1970] 77 ITR 539 (SC); (ii)Commissioner of Income-Tax v. Vir Bhan andsons, [2005] 273 ITR 206 (P&H);sons, [2005] 273 ITR 206 (P&H); (iii)Miri Mal Mahajan v. Commissioner of Income-Taxand another, [1974] 95 ITR 186 (P&H);and another, [1974] 95 ITR 186 (P&H); (iv)Commissioner of Income-Tax v. RayalaCorporation (P) Ltd., [1995] 215 ITR 883 (Mad);Corporation (P) Ltd., [1995] 215 ITR 883 (Mad); (v)Commissioner of Wealth-Tax, Delhi-I v. GurdialSingh, [1980] 123 ITR 483 (Del);Singh, [1980] 123 ITR 483 (Del); (vi)Commissioner of Income-Tax, A.P.-III v. Moduri Rajaiah Gari Kishtaiah, [1980] 123 ITR 494 (AP); 3.3In regard to documents filed by the counsel of theappellant, the A.O. Has stated that the photocopies of theledger a/c do not bear the signatures ad stamp of theCommission Agent and only certified by the assesseehimself. However, as per copy of account of Sh. SukhjeetSingh, the sale proceed of agriculture produce during theyear relevant to the A.Y. 2005-06 has been shown atRs.9,09,926/-. The amounts received on different datesare through cheque on 21.4.2004 only and all other are incash. He further stated that the deposits and withdrawalsdo not tally from the ledger account and mere filing theaffidavit do not fulfill the condition of discharging the onuslies upon him.