Vijay Kumar Sharma v. Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.858 of 2008 & other connected cases beingITA Nos.693, 806, 813, 821 & 857 of 2008 and ITA Nos.72, 159 and 160 of 2009Date of decision: 13.7.2010 Vijay Kumar Sharma. Vs. Commissioner of Income Tax. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. S.K. Mukhi, Advocate andMs. Jyoti, Advocatefor the assessee. Ms. Jyoti, Advocatefor the assessee. Ms. Urvashi Dhugga, Standing counselfor the revenue. --- ADARSH KUMAR GOEL, J. 1. This order will dispose of nine appeals being ITANos.693, 806, 813, 821, 857 and 858 of 2008 and ITA Nos.72,159 and 160 of 2009, as all the appeals arise out of commonorder of the Income Tax Appellate Tribunal, Chandigarh. In I.T.A.Nos.858 of 2008 following substantial questions of law have beenproposed by the assessee:- “i)Whether on the facts and circumstances,evidences on record and established principlesof law the ITAT was justified in confirming theorders of the authorities below in treating theagricultural income to the extent ofRs.2,50,000/- as income from unknown sourcesevidences on record and established principlesof law the ITAT was justified in confirming theorders of the authorities below in treating theagricultural income to the extent ofRs.2,50,000/- as income from unknown sources ii) iii) by allowing partial relief despite of theconfirmatory statements as recorded by the AOof the genuine cultivators of the agricultural landof the appellant so that the order of the ITAT isperverse and thus unsustainable in the eyes oflaw in view of the various judicialpronouncements?” “Whether on the facts and circumstancesevidences on record and established Principlesof Law, the ITAT was justified in confirming theorders of the authorities below in treating theagricultural income being not in conformity withthe prevailing trend and also ignoring the factthat under similar facts and circumstances thesaid agricultural income having been acceptedin future years and thus the findings of ITAT arein direct confrontation with the judgment of theHon’ble Supreme Court of India in the case ofBerger Paints India Ltd. Vs. CIT, 266 ITR 99(SC)?” “Whether on the facts and circumstancesevidences on record and established Principlesof Law, the ITAT was justified in not adjudicatingupon the Ground of Appeal No.4 (as perAnnexure A-7) as taken before the ITAT?” 2. In other appeals questions of law proposed areidentical except in I.T.A. Nos.806, 813 and 857 of 2008 and I.T.A.No.159 of 2009. Additional question relate to correctness ofreassessment under Section 147 of the Income Tax Act, 1961(for short, “the Act”). 3. The assessees are family members and in theirreturns for the assessment year in question, they claimed theirsource of income being agricultural income which was partiallyturned down by the Assessing Authority and addition to thedeclared income was made by rejecting the plea that their sourceof income was agriculture to the extent of addition made. TheAssessing Officer held the said income to be from undisclosedsources. The finding of the Assessing Officer has been affirmedby the CIT(A) as also by the Tribunal except for reduction in thequantum of additions to the declared income. 4. We have heard learned counsel for the parties. 3. The assessees are family members and in theirreturns for the assessment year in question, they claimed theirsource of income being agricultural income which was partiallyturned down by the Assessing Authority and addition to thedeclared income was made by rejecting the plea that their sourceof income was agriculture to the extent of addition made. TheAssessing Officer held the said income to be from undisclosedsources. The finding of the Assessing Officer has been affirmedby the CIT(A) as also by the Tribunal except for reduction in thequantum of additions to the declared income. 4. We have heard learned counsel for the parties. 5. Learned counsel for the appellants submitted thatappreciation of evidence by the authorities below was not proper,as additions were made only on the statement of purchaserwhose claim of sale consideration paid for popular trees wasinflated. On the other hand, the evidence furnished by theassessee should have been accepted which was wronglydisbelieved. The assessees had the land and their version thatthey had income to the extent claimed, should not have beenrejected. There was inconsistency in the assessment for differentyears. He submitted that findings concurrently recorded by theAssessing Officer, Appellate Authority and the Tribunal wereperverse. 6. We are unable to accept the submission made. The Tribunal after taking into account the evidence produced,recorded the following findings:- “24. We now take up the common grounds of appealrelating to estimate of agricultural income and theincome on account of sale of popular trees. There isno dispute about the ownership of agricultural land bythe appellants. In the case of Smt. Kamla Devi theagricultural and holdings have been indicated at 54acres and in the case of other appellants theagricultural land holdings are indicated at approx 18acres each. The learned counsel for the assesseehad claimed before Revenue Authorities as well asbefore us that the agricultural income was distributedby the joint owners in equal proportionnotwithstanding the area owned by each of the co-owners. This claim on behalf of the appellants iscontrary to the returned income in the case ofappellants. In assessment year 2000-01 theagricultural income in the case of Smt. Kamla Devihas been disclosed at Rs.4 lacs. However, theagricultural income in the case of S/Shri Bal BhushanSharma and Vijay Kumar Sharma has been disclosedat Rs.5 lacs each for the same assessment year. Inthe case of Smt. Santosh Sharma the agriculturalincome has been disclosed at Rs.2 lacs only. It is,therefore, evident that the claim on behalf of theappellants that the agricultural income derived fromjoint ownership of agricultural land was distributedequally is contrary to the returns of income filed by theappellants. The claim of the assessee in this regardis accordingly rejected. 25.We now proceed to consider thereasonableness of the estimate of agricultural incomeby the Assessing Officer. It is pertinent to mentionthat the assessee had claimed that the agriculturalland was given on lease for cultivation and fixedamount of money was received from the cultivators.This claim of the assessee is not supported by anywritten agreement or by the Revenue records. Thereis no entry in the Revenue records about theagricultural land owned by the appellants having beengiven on lease. In the absence of any writtendocument and entries in Khasra girdawari (RevenueRecord) the Assessing Officer was justified in notaccepting the claim of the assessee that theagricultural land owned by the appellants had beengiven on lease for cultivation. The Assessing Officer,however, has accepted the fact that the land has beencultivated by the assessee as per the revenue recordsand he has accordingly estimated the agriculturalincome and in our view his action is justified. 26.The only issue that remains for ourconsideration is about the reasonableness of theestimate made by the Assessing Officer. It isobserved that in the case of S/Shri Bal BhushanSharma and Vijay Kumar Sharma the agriculturalincome disclosed by them in assessment year 2001-02 is Rs.2 lacs only. IN the case of Smt. SantoshSharma, the agricultural income disclosed by her forassessment year 2000-01 is also only Rs.2 lacs only.It is not, therefore, appreciated as to how in the caseof S/Shri Bal Bhushan Sharma and Vijay KumarSharma the agricultural income at Rs.5 lacs each inassessment year 2000-01 has been claimed when the land holdings are same. It is also pertinent to mentionthat in the case of S/Shri Bal Bhushan Sharma theagricultural income accepted by the RevenueAuthorities for assessment year 1998-99 wasRs.40,000/- only even in appeal. 27. In the light of the above facts we are of theconsidered view that the estimate of the agriculturalincome in the case of S/Shri Bal Bhushan Sharmaand Vijay Kumar Sharma at Rs.2 lacs for assessmentyear 2000-01 was more than reasonable. We,therefore, uphold the estimation of agricultural incomein the case of S/Shri Bal Bhushan Sharma and VijayKumar Sharma for assessment year 2000-01 atRs.lacs. 28. In the case of Smt. Kamla Devi the agriculturalincome disclosed is Rs.4 lacs for assessment year2000-01. The Assessing Officer has estimated heragricultural income at Rs.2 lacs. It is not disputed thatshe owns 54 acres of agricultural land as against 18acres of agricultural land in each case of S/Shri BalBhushan Sharma, Vijay Kumar Sharma and Smt.Santosh Sharma. In the case of S/Shri Bal BhushanSharma, Vijay Kumar Sharma, the Assessing Officerhas estimated the agricultural income at Rs.2 lacseach. We are, therefore, of the considered opinion thathe estimate of the agricultural income in the case ofSmt. Kamla Devi is too low. In our view, the returnedincome at Rs.4 lacs in respect of 54 acres of land isreasonable when we consider that in respect of 18acres of land owned by in the case of S/Shri BalBhushan Sharma, Vijay Kumar Sharma, theAssessing Officer has estimated the agriculturalincome at Rs.2 lacs each. We, accordingly, hold that the addition of Rs.2 lacs in the case of Smt. KamlaDevi out of Rs.4 lacs agricultural income forassessment year 2000-01 is not justified. Theaddition of Rs.2 lacs in the case of Smt. Kamla Devifor assessment year 2000-01 is accordingly deleted.For the same reasons, the income of Rs. 3 lacsdisclosed by Smt. Kamla Devi iin assessment year2001-02 is also considered to be reasonable and thesame is accepted. The addition of Rs. 1 lac out of Rs.3 lacs for assessment year 2001-02 in the case ofSmt. Kamla Devi is also accordingly deleted. 29.For assessment year 2001-02 in the case ofS/Shri Bal Bhushan Sharma and Vijay Kumar Sharmaagricultural income of Rs. 5 lacs each had beendisclosed against which the Assessing Officer hasestimated the same at Rs. 2 lacs each. In ourconsidered opinion view, the estimation of agriculturalincome for assessment year 2003-04 at Rs.2,50,000/-each would be reasonable. The addition ofRs.50,000/-each in the case of S/Sh.Bal BhushanSharma and Vijay Kumar Sharma for assessmentyear 2001-02 is accordingly deleted. 30.We now proceed to consider the additions madein respect of sale of popular trees. The sale ofpopular trees has been claimed in the case of Smt.Kamla Devi, in the case of S/Shri Bal BhushanSharma and Vijay Kumar Sharma in assessmentyears 2000-01 and 2001-02. In the case of Smt.Santosh Sharma the sale of popular trees wasclaimed at Rs.5,49,360/-in the original return. Sohowever, in the revised return no such income hasbeen disclosed. The assessing Officer has made theaddition of Rs.5,49,360/-on the basis of the original 30.We now proceed to consider the additions madein respect of sale of popular trees. The sale ofpopular trees has been claimed in the case of Smt.Kamla Devi, in the case of S/Shri Bal BhushanSharma and Vijay Kumar Sharma in assessmentyears 2000-01 and 2001-02. In the case of Smt.Santosh Sharma the sale of popular trees wasclaimed at Rs.5,49,360/-in the original return. Sohowever, in the revised return no such income hasbeen disclosed. The assessing Officer has made theaddition of Rs.5,49,360/-on the basis of the original return. We shall deal with the case of Smt. SantoshSharma separately as she has retracted from theclaim of sale of popular trees by filing a revised return.31.In the case of Smt., Kamla Devi, S/Sh. BalBhushan Sharma and Vijay Kumar Sharmaconsiderable amount has been shown to have beenreceived on account of sale of popular trees allegedlygrown on the agricultural land. The assessee hadfurnished a photocopy of the receipt signed bySh.Man Singh as proof for the sale of popular trees.The said receipt was also signed byt Sh.Sham Singh,Halka Patwari and Sh.Charanjit Singh, Sarpanch. TheAssessing Officer had made enquiries. Sh.Man Singhwho is supposed to have purchased popular treesfrom the appellants had been summoned and hisstatement was recorded. In his statement Sh.ManSingh has categorically denied having purchasedpopular trees from the appellants. The AssessingOfficer had given opportunity to the appellants tocross examine Shri Man Singh. So however, theappellants did not bring Shri Man Singh that is theirown witness, for recording of any cross examinationbefore the Assessing Officer. The assessee hadrelied upon the two witnesses who had signed thepayment receipt purportedly issued by Shri ManSingh. The statement of Shri Sham Singh Patwariand Shri Charanjit Singh Sarpanch had been recordedby the Assessing Officer. The Halka Patwari, namelyShri Sham Singh had confirmed to have signed thepayment receipt at the behest of the appellants in hisown office when the receipt had been sent to himthrough one of the employees of the appellants. ShriSham Singh Patwari had categorically stated that no cash transaction had taken place in his presence inrespect of the sale of popular trees. He had alsostated that Shri Man Singh was not known to him.Shri Charanjit Singh had also stated that notransactions for the sale of popular trees had takenplace in his presence. It is thus evident that assesseehad failed to establish the receipt of money from ShriMan Singh or any other person on account of sale ofpopular trees. We hardly need to mention that theburden of proof lies on those who would fail if noevidence was produced. The assessee had furnishedevidence in the shape of payment receipt. The saidreceipt was found to be bogus. No other evidencewas produced to establish the genuineness of thereceipt of money reflected in the statement ofaccounts and books of account of the appellants.Needless to say that the burden of proof was upon theassessee to establish the genuineness of thereceipts. Reference may be made to the decision ofthe Supreme Court in the case of CIT Vs.P.Mahanakala, 291, ITR 278 and in the case of CITVs. K.Chinnathanban, 292 ITR 682. In the presentcases the appellants have failed to discharge onus inregard the receipt of money allegedly to be onaccount of sale of popular trees. 32.Taking the totality of the facts andcircumstances of the case into consideration, we areof the considered view that the appellants havemiserably failed to establish the genuineness of thecash receipts on account of alleged sale of populartrees. The addition of Rs.13,81,248/-andRs.7,85,100/-for assessment year 2000-01 and 2001-02 respectively in the case of Smt. Kamla Devi is thus 32.Taking the totality of the facts andcircumstances of the case into consideration, we areof the considered view that the appellants havemiserably failed to establish the genuineness of thecash receipts on account of alleged sale of populartrees. The addition of Rs.13,81,248/-andRs.7,85,100/-for assessment year 2000-01 and 2001-02 respectively in the case of Smt. Kamla Devi is thus fully justified and the same are accordingly confirmed.Similarly, in the case of S/Shri Bal Bhushan Sharmathe additions of Rs.5,55,660/-and Rs.5,23,035/-forassessment years 2000-01 and 2001-02 respectivelyis hereby confirmed. In the case of Shri Vijay KumarSharma the addition of Rs.5,38,200/-andRs.5,12,760/-for assessment years 2000-01 and2001-02 respectively are also hereby confirmed. 33.In the case of Smt. Santosh Sharma, theAssessing Officer had made an addition ofRs.5,49,360/-for assessment year 2000-01. Theassessee had herself not disclosed the said amount inthe revised return thereby admitting the claim in theoriginal return to be wrong. 34.The question before us is as to whether onthese facts the Assessing Officer is justified in makingthe addition of Rs.4,59,690/-whereas in the originalreturn the assessee had claimed the receipt ofRs.5,43,690/-on account of sale of popular trees. Inthe subsequently return no such claim was made. Inour considered view, the addition on account of theoriginal return can be made if the assessee had takencredit for the said amount in explaining anyexpenditure or investment out of the said amount orhad taken its credit in any balance sheet if produced.We accordingly, restore the issue relating to theaddition of Rs.5,49,360/-in the case of Smt. SantoshSharma to the file of the Assessing Officer for freshdecision in accordance with law after givingreasonable opportunity of being heard to theassessee. 7. We are unable to hold that the finding recorded bythe Tribunal, quoted above, are in any manner perverse. The saidfindings are pure findings of fact. We, thus, do not find anyground to hold that any substantial question of law arise. 8.In so far as question regarding assumption ofjurisdiction under Section 147 of the Act is concerned, theTribunal placing reliance upon the judgment of the Apex Court inACITv. Rajesh Jhaveri Stock Brokers (P) Ltd.[2007] 291 ITR500 repelled the contention of the assessee and upheld thevalidity of proceedings initiated under Sections 147/148 of theAct. Nothing could be pointed out which may show that thereasoning of the Tribunal was erroneous in any manner. Nosubstantial question of law arises in that regard as well in theseappeals. 9. The appeals are dismissed.10. A photocopy of this order be placed on the files ofeach connected case. (ADARSH KUMAR GOEL) JUDGE July 13, 2010ashwani ( AJAY KUMAR MITTAL ) JUDGE