The Pr. Commissioner Of Income Tax, Rohtak v. Ram Kumar Duhan

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. LTA. No. 387 of 2015DATE OF DECISION: 12.02 2018 The Pr. Commissioner of Income Tax, Rohtak APPELLANT Versus Ram Kumar Duhan RESPONDENT CORAM :- HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICEHON'BLE MR. JUSTICE AVNEESH JHINGAN Present:Mr. Inderpreet Singh, Advocate,for the appellant. Mr. Amit Kumar Jain, Advocate,for the respondent. OR OR AVNEESH JHINGAN, J. This 1s an appeal against the order of the Income Tax AppellateTribunal confirming the order of the CIT (Appeals) whereby the order of theAssessing Authority making the addition of undisclosed income wasquashed. ? The matter pertains to the assessment year 2009-10, 3)According to the appellant, the following substantial question of law arises 1n this appeal :- Whether on the facts and circumstances of the case the Hon'bleITAT has erred in law and facts in dismissing the appeal of therevenue and deleting the addition of41,13,02,000/- made by ~)_ the A.O. on account of investment from undisclosed sources byholding the same as explained ignoring the fact that theassessee was unable to furnish any sustainable documentaryevidence with regard to his contention of being a farmer andthat the purchase consideration was out of his agriculturalincome though his returns did not reflect any agriculturalincome. Also the sale deeds No. 3535/2008 and 3536/2008clearly showed payment of|=22,35,000/- and |=84,28,000/- bythe assessee to Sh. S.N. Thakur?’ 3]The Assessing Officer (for short, the AO') finalished theassessment under Section 143 (3) of the Income Tax Act, 1961 (for short,‘the Act’), vide order dated 28.11.2011. The AO made an addition of=1,13,02,800/- of the investment made to purchase land from undisclosedsource of income. 4The CIT (Appeals) allowed the assessee's appeal vide orderdated 19.07.2012. The CIT (Appeals) took into consideration that transfer ofland in favour of assessee was to facilitate conversion of agricultural land tonon-agricultural land as per the State laws. The land though in the name ofthe assessee was shown in the balance sheet of the Company. The MOUentered between M/s KTC Developers Pvt. Ltd. (for short, the Company’)and its Directors was that property will be in name of Directors but it willremain property of the Company. The stamp duty was paid by the Companyfor transfer of land. Sale proceeds of the land were received by theCompany. On the above basis, the CIT (Appeals) held that no investmenthad been made by the assessee for purchase of the agricultural land in the sald year. ITA No. 387 of 2015 -~3 4 The Tribunal confirmed the reasonings given by the CIT(Appeals) and dismissed the appeal by the impugned order dated17.02.2015. The order 1s based on an appreciation of the facts. It cannot besaid to be perverse or irrational. The appeal therefore does not raise asubstantial question of law,6.The assessee filed the return during the relevant year declaringhis income from the salary. The case was taken up for scrutiny. The AO hadinformation that the assessee had purchased immovable property inMaharashtra and the sale deed was in the name of the assessee. The sourceof income was asked for. It was explained by the assessee that the Companywas incorporated on 25.10.2006 with three promoter Directors, one of thembeing Shri Niwas Thakur. The assessee joined the Company on 15.04.2007.The Company had already purchased certain land in the name of Shri NiwasThakur. He had status of a farmer. The Company wanted to convert theagricultural land to a non-agricultural land, as its business was ofdeveloping a residential township. As per the laws in the State ofMaharashtra, the transfer of land in the name of a Company was onlypossible, 1f the land was 1n the name of at least of its two Directors who hadfarmer status. It was for this reason that some of the land in the name of ShriNiwas Thakur was transferred in the name of the assessee without anyconsideration| 7 Addition was made of undisclosed income invested inipurchasing the land, considering the facts that the sale deed showed payment of full amount of consideration, 1n the revenue record the assesseewas shown as an ultimate owner and there was no proof showing that theassessee was a farmer or having agricultural income. § Copies of the return for the assessment year 2009-10 and 2010-11 showed that the agricultural income was declared. As per theMaharashtra State laws, agricultural land can be acquired only by farmers.The transfer was without consideration as per Frokt khat. The stamp dutyand registration fee was paid by the Company. The land 1n the name of theassessee and Shri Niwas Thakur was shown 1n the audited balance sheet ofthe Company. Shri Niwas Thakur filed an affidavit dated 01.10.2010 to theeffect that transfer of land was without consideration and for administrativereasons. MOU was entered between the Company and its Directors that theland bought 1n the name of the Directors shall be the sole property of theCompany. The sale deed dated 16.10.2010, vide which the land underconsideration was sold to M/s Oracle Realty Developers, showed that theconsideration 1s to be paid to the Company. Even the AO in its remandreport admitted that the sale proceeds were received by the Company. Thebank statement of the Company fortified the said fact. The assessment of theCompany was framed vide order dated 08.11.2011 under Section 143 (3) ofthe Act. On analysing the above mentioned evidence and fact, the additionwas deleted. Q The question raised by the Revenue in the appeal 1s a questionof fact and not a question of law, much less a substantial question of law.10.The issue has been decided on appreciation of evidence. The ITA No. 387 of 2015 conclusion arrived at is a logical conclusion. This Court under jurisdictionof Section 260-A of the Act cannot re-appreciate the evidence, especiallywhen no perversity 1s established. There 1s no warrant for interference with the order passed by the Tribunal. 11.The appeal is, therefore, dismissed, (S.J. VAZIFDAR )CHIEF JUSTICE February 12, 2018ndj (AVNEESH JHINGAN )JUDGE Whether speaking/reasonedWhether Reportable Yes/NoYes/No