The Commissioner Of Income Tax , Jalandhar-Ii,Jalandhar v. Avinash Chander Sharma

ITA No.424 of 2007 In the High Court for the States of Punjab and Haryana at Chandigarh… ITA No.424 of 2007 Date of decision:10.4.2008 The Commissioner of Income Tax , Jalandhar-II,Jalandhar Appellant Versus Avinash Chander Sharma .. Respondent Coram: Hon’ble Mr.Justice Satish Kumar MittalHon'ble Mr.Justice Rakesh Kumar Garg Present:Mr.Sanjiv Bansal, Advocatefor the Revenue/appellant. Rakesh Kumar Garg,J A search under section 132 of the Income Tax Act, 1961(for short the “Act”) was conducted on 24.6.1997 at the residentialand official premises of the assessee. Thereafter, making postsearch inquiries, the case was handed over to the Assessing officer.A notice under Section 158 of the Act was issued to the assessee,which was served on 31.8.1997. In response to the notice, the returnof income for the block period 1.4.1987 to 24.6.1997 was filed on29.5.1998 declaring therein a total undisclosed income ofRs.56,408/-. During the course of proceedings, it was found that the assessee has four daughters, namely, Nisha, Meenakshi, Sonia andSunaina. The first three daughters were married between December1995 to November, 1996 and the other one i.e., Sunaina wasunmarried at the time of search. It was further found that thedaughters of the assessee were not engaged in any business or anyother work, which could generate any income, but they weremaintaining bank accounts in which huge amounts were depositedfrom time to time. Therefore, the Assessing officer on the basis ofseized material conclusively held that the bank account in the nameof daughters, namely, Nisha, Meenakshi,Sonia and Sunaina werecontrolled by the assessee, who is none else than the benamidar ofthe daughters and therefore, the following additions were made bythe Assessing Officer for the block period vide order dated 30.6.1999 passed under Section 158 BC(c ) of the Act:- a) On A/c of cheques and cash deposits in S.B.A/cs of 4 daughtersRs.70,33,060/- in S.B.A/cs of 4 daughtersRs.70,33,060/- b) On A/c of interest income during Block period on bank deposits of Four daughtersRs. 3,23,118/- period on bank deposits of Four daughtersRs. 3,23,118/- c) On A/c of deposits during Block period in S.B.A/c No.810 with Bank of BarodaRs.1,16,310/- BarodaRs.1,16,310/- d) On A/c of expenses on marriages of daughtersRs. 5,78,100/- of daughtersRs. 5,78,100/- e) On A/c of deposits of Rs.1,32,158/- during block period in the name of Smt. Sita Rani.Rs. 1,32,158/- during block period in the name of Smt. Sita Rani.Rs. 1,32,158/- f) On A/c of Foreign Remittance received by assessee and family members. received by assessee and family members. Rs.20,43,756/- g) On A/c of investment and estimated profit during block period in the concern of Sujeet Sharma held to be property concern of assessee. h) Household items On an appeal filed by the assessee, the Commissioner ofIncome Tax(Appeals) (for short the “CIT(A)”) deleted some of theadditions,i.e.,(i) Rs.70,33,060/- on A/c of cheques and cash depositsin S.B.A/cs of 4 daughters,(ii) Rs.3,23,118/- on A/c of interest incomeduring Block period on bank deposits of Four daughters (iii) Rs.5,78,100/- on A/c of expenses on marriages of daughters (iv)Rs.20,43,756/- on A/c of Foreign Remittance received by assesseeand family members (v) Rs. 7,00,000/- on A/c of investment andestimated profit during block period in the concern of Sujeet Sharmaheld to be property concern of assessee and (vi) Rs. 10,000/- onaccount of Household items vide order dated 28.3.2002 by holdingthat the daughters of the assessee are independent assessees andhaving declared the bank accounts, deposits in their name, have tobe considered in their hands. Feeling aggrieved against the said order, the Revenuefiled an appeal before the Tribunal by raising the following grounds:- Feeling aggrieved against the said order, the Revenuefiled an appeal before the Tribunal by raising the following grounds:- “1. That on the facts and circumstances of the case, thelearned CIT(A) has erred in law in deleting the addition ofRs.70,33,060/- made on account of undisclosed incomeof the assessee by bringing to tax the deposits in theSaving Bank Accounts of the four daughters of theassessee. 2. That on the facts and circumstances of the case, the learned CIT(A) has further erred in law in deleting theaddition of Rs.3,23,118/- on account of interest incomeduring the block period on bank deposits of the fourdaughters of the assessee. 3. That on the facts and circumstances of the case, the learned CIT(A) has again erred in law in deleting theaddition of Rs.20,43,756/- on account of foreignremittance received by the assessee, his wife and fourdaughters . 4. That while giving relief as per ground number 1,2 and 3 above, the ld. CIT(A) failed to appreciate that thedaughters were benamidars of the assessee and theunexplained deposits and interest thereon was rightlytreated as income of the assessee and assessedaccordingly. 5. That on the facts and circumstances of the case, the learned CIT(A) has further erred in law in deleting theaddition of Rs.5,78,100/- on account of unexplainedmarriage expenses of the daughters of the assessee. 6. That on the facts and circumstances of the case, thelearned CIT(A) has further erred in law in deleting theaddition of Rs.7,00,000/- on account of unexplainedinvestment and estimated profit in respect of the benamiconcern of the assessee styled Surjit Sharma & Co.” The Tribunal vide its order dated 2.3.2007 rejected all the groundsraised by the Revenue and dismissed the appeal of the Revenue. Still not satisfied with the order passed by the Income TaxAppellate Tribunal, Amritsar Bench, Amritsar,(for short the “Tribunal”)the Revenue has filed the present appeal challenging the order ofthe Tribunal passed in IT(SS)A No.22(ASR)2002 dated 2.3.2007 forthe block period 1.4.1987 to 21.6.1997, raising the followingsubstantial questions of law:- (a) Whether in the facts and circumstances of thecase the ITAT was right in law in confirming the orderof the CIT(A) therein deleting the addition ofRs.70,33,000/- & 3,23,118/- by holding that daughtersof the assessee are not Benamidars of theassessee ? (b) Whether in the facts and circumstances of thecase the Tribunal was right in law in confirming theorder of the CIT(A) therein deleting the addition ofRs.20,43,756/- on account of foreign remittances andthe addition of Rs. 7 lacs on account of investmentand profit in benami firms without appreciating thefacts on record ? Mr. Sanjiv Bansal, Advocate, learned counsel for theRevenue has vehemently argued that the Tribunal has gone wrongwhile upholding the order of the CIT(A), who has deleted the additionof Rs.70,33,000/- made by the Assessing Officer as the said amountwas clearly proved to be unexplained income of the assessee as thedaughters of the assessee were merely Benamidars. The daughtersof the assessee had, admittedly, no source of income as no details regarding their earnings were given. (b) Whether in the facts and circumstances of thecase the Tribunal was right in law in confirming theorder of the CIT(A) therein deleting the addition ofRs.20,43,756/- on account of foreign remittances andthe addition of Rs. 7 lacs on account of investmentand profit in benami firms without appreciating thefacts on record ? Mr. Sanjiv Bansal, Advocate, learned counsel for theRevenue has vehemently argued that the Tribunal has gone wrongwhile upholding the order of the CIT(A), who has deleted the additionof Rs.70,33,000/- made by the Assessing Officer as the said amountwas clearly proved to be unexplained income of the assessee as thedaughters of the assessee were merely Benamidars. The daughtersof the assessee had, admittedly, no source of income as no details regarding their earnings were given. We have heard learned counsel for the Revenue andperused the record. We find that undisputedly, the four daughters ofthe assessee are independent assessees. They are having their ownseparate bank accounts containing the deposits in question. Thetheory of these daughters being benamidars of the assessee doesnot carry any weight. In the assessment of the daughters of theassessee, all bank accounts were explained and the return ofincome was accepted. These daughters of the assessee filedaffidavits confirming the deposit in their Saving Bank Accountsbelonging to them only and that their father (the assessee) hadnothing to do with those deposits. These affidavits were nevercontroverted by the department. Thus, these deposits havetherefore, to be considered in their hands. We also find that the bankaccount in which these foreign remittances were deposited, wereduly disclosed by the daughters of the assessee, while filing theirreturn of income before the date of search. The remittances werereceived by the daughters when they were major. The affidavits ofthe donors were also placed on the record. There is no evidence tocontrovert their affidavits. Thus in view of the above facts, it is crystalclear that the questions as raised by the Revenue does not arise inthe facts and circumstances of the case, as a pure finding of factbased upon evidence and documents on record has been recordedby the Tribunal. No perversity has been shown by the Revenue inthese findings reached by the Tribunal. ITA No.424 of 2007 Thus, we find that the appeal is without any merit and the same is hereby dismissed. (RAKESH KUMAR GARG) JUDGE April 10, 2008nk (SATISH KUMAR MITTAL) JUDGE