The Commissioner Of Income Taxbathinda v. Karaj Singh

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 161 of 2005Date of decision: 31.3.2011 The Commissioner of Income TaxBathinda --- Appellant Versus Karaj Singh --- Respondent CORAM:HON’BLE MR. JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present:Ms. Savita Saxsena, Standing Counselfor the appellant-Revenue. Ms. Radhika Suri, Advocatefor the respondent. --- AJAY KUMAR MITTAL, J. This appeal under Section 260A of the Income-Tax Act, 1961(for short “the Act”) has been filed by the Revenue against the order dated2.11.2004, passed by the Income Tax Appellate Tribunal Amritsar Bench,Amritsar (in short “the Tribunal”) in ITA No. 60/ASR/2000, relating to theassessment year 1992-93. 2. The appeal was admitted for determination of the followingsubstantial question of law by this Court: “Whether the Income Tax Appellate Tribunal, Amritsar Bench,Amritsar was right in deleting the addition made u/s 68 on account of unexplained cash credit to the tune of Rs.1,50,000/-“ 3.The facts, in brief, necessary for adjudication as narrated inthe appeal, are that the assessee filed return for the assessment year1992-93 on 22.4.1993 declaring income at Rs. 66,090/-. On a complaintreceived, the matter was investigated and it was found that the assesseehad introduced his own secret funds to the tune of Rs. 1,50,000/- throughone Naresh Kapoor who first deposited that money in his account openedin the name of M/s. City Enterprises, Jalandhar and later on got prepareda bank draft in the name of the assess on the pretext of foreignremittance and same was given to the assessee. Subsequently,proceedings under Section 147 of the Act were issued and notice underSection 148 of the Act was issued to the assessee on 10.7.1996 and inresponse to which the assessee filed return on 27.1.1997 declaring anincome of Rs. 66,086/-. The assessment under Section 143(3) read withSection 147 of the Act was completed on 30.12.1998 and consequentlythe assessing officer vide order dated 30.12.1998 made an addition of Rs.1,50,000/- by invoking provisions of Section 68 of the Act. 4.Appeal carried by the assessee against the order of theassessing officer was dismissed by the Commissioner of Income-tax(Appeals) {in short “the CIT(A)”}, vide order dated 15.11.1999. Appeal ofthe assessee was, however, allowed by the Tribunal vide order dated2.11.2004 whereby the addition made by the assessing officer andsustained by the CIT(A) was deleted. 5.We have heard learned counsel for the parties and haveperused the record. 6.Learned counsel for the appellant-Revenue submitted that theTribunal had erred in reversing the findings of the CIT(A) whereby it hadbeen held that the amount of Rs. 1,50,000/- which was received by theassessee by way of an account payee’s cheque on 28.11.1991 was agenuine transaction. 7.Controverting the submission of the learned counsel for theRevenue, learned counsel for the assessee submitted that in identicalcases of other assesses, namely, Mohan Singh and Parminder Singh, theTribunal had decided the same issue, vide order dated 26.5.2003 infavour of the assessee and the said order having become final, thefindings recorded by the Tribunal in the present case did not warrantinterference by this Court. It was pointed out that as per circular of theBoard relating to filing of bills under Section 268A of the Act at therelevant time of filing of the appeal, the limit prescribed by Board of DirectTaxes was two lacs whereas the quantum of addition as claimed by theRevenue was Rs.1.50,000/- and taking the tax effect thereon the samewould not qualify under the instructions issued by the Board. 8.We have given our thoughtful consideration to thesubmissions made by the counsel for the parties. 8.We have given our thoughtful consideration to thesubmissions made by the counsel for the parties. 9.Learned counsel for the Revenue wanted to point out that thedecision in the cases of Mohan Singh and Parminder Singh, on whichreliance had been placed by the Tribunal holding them to be identicalcases, no appeal had been filed challenging the findings recorded therein.The Tribunal, on the basis of material on record, came to the conclusionthat the amount of Rs. 1.50,000/- which was received by the assesseefrom Naresh Kaoor had been repaid to him within a period of 15 days andthe said transaction was a bona fide transaction and the provisions of Section 68A were not attracted. At this stage, it would be advantageous to refer to the findings recorded by the Tribunal which read thus: “After considering the rival submissions and perusing therelevant material on record, it is noted as a factual positionthat the amount of Rs. 1,50,000/- was received by theassessee by way of A/c payee cheque on 28.11.1991 and wasrepaid within a period of less than 15 days through bankingchannel. The transaction having been opened and closedthrough bank draft within the short span of 15 days cannot beheld to be ingenuine unless any specific material is brought onrecord, which goes against it. Simply because Shri NareshKapoor could not be produced before the AO, cannot lead tothe confirmation of addition u/s 68. It is axiomatic thatimpossible cannot be complied with. Newspaper cuttings dulyestablish that Shri Naresh Kapoor was absconding and in ourconsidered opinion his physical production before the AOcould not have complied with. It is found that the transactionswith Shri Naresh Kapoor in identical circumstances becamesubject matter of adjudication before the Chandigarh Bench inthe case of ITO vs. Shri Mohan Singh, Ludhiana, in ITA No.373/Chandi/2000 and Shri Parminder Singh, Ludhiana Vs.ITO, Ward-II(9), Ludhiana in ITA No. 51/Chandigarh/2000 &43/Chandi/2000, order dated 26.5.2003 and the Tribunal heldthe assessee’s contention in those cases. Respectfullyfollowing the precedents, we overturn the impugned order onthis score.” 10. In view of the above, the substantial question of law isanswered against the Revenue and in favour of the assessee. 11.Since the appeals has been decided on merits, the questionof maintainability of appeal in terms of quantum involved under Section268-A of the Act has been left open. 12.In view of the above, the appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE March 31, 2011*rkmalik* (ADARSH KUMAR GOEL) JUDGE