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2015 (12) TMI 978 - PUNJAB AND HARYANA HIGH COURT

2015 (12) TMI 978 - PUNJAB AND HARYANA HIGH COURT - TMI - Source of the deficit investment made towards the purchase of new agricultural lands - Sole source - Held that:- The cash flow statement furnished by the assessee had rightly been admitted by the ld. CIT(A), which is not in dispute. As mentioned the ancestral agricultural land had been sold, which was held jointly by the assessee along with his brother Sh. Amarjit Singh and agricultural land, which has been purchased by the assessee along .....

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e deficit of ₹ 5,87,500/- is on account of the assessee and the other deficit of ₹ 5,87,500/- is on account of brother of the assessee, Sh. Amarjit Singh. Accordingly, the addition confirmed by the Ld. CIT(A) is restricted to ₹ 5,87,500/- in view of our findings hereinabove.

As regards the arguments by the Ld. Counsel for the assessee that the assessee is having only source of income as salary income or agricultural income and the deficit so arisen should be treated .....

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cannot help the assessee. Accordingly, the AO is directed to sustain the addition of ₹ 5,87,500/- and is directed to delete the rest of the addition amounting to ₹ 5,87,500/-. Thus, the appeal of the assessee is partly allowed - ITA No. 86 of 2015 (O&M) - Dated:- 29-10-2015 - MR. AJAY KUMAR MITTAL AND MR. SHEKHER DHAWAN, JJ. For The Appellant : Mr. Ravish Sood, Advocate For The Respondent : Mr. Rajesh Katoch, Advocate AJAY KUMAR MITTAL, J. 1. The assessee has approached this Court b .....

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the deficit investment made towards the purchase of new agricultural lands? 2) Whether the Tribunal is right in law and facts of the case in sustaining the addition of ₹ 5,87,500/- in the hands of the appellant? 3) Whether the Tribunal has erred in law and facts of the case by failing to appreciate that in light of inextricable facts regarding the 'Sole source' of income of the appellant, i.e. 'Salary income' as a 'Machine operator' with M/s Nestle India Ltd. r.w. t .....

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r authorities while making an addition w.r.t. the source of the deficit investment in the hands of the appellant had gravely erred by failing to exercise the discretion, specifically in light of the explanation of the appellant? 2. A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee is employed as a Machine Operator with M/s Nestle India Ltd., Moga and filed his return of income on 20.7.2009 for the assessment year 2009-10 declaring incom .....

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ad Bank, Moga branch as 'unexplained cash credit' under Section 68 of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT(A) vide order dated 28.2.2013 (Annexure A-2) partly allowed the appeal and sustained the addition of ₹ 11,75,000/- towards unexplained investment with respect to purchase of the new agricultural land. Still dissatisfied, the assessee filed an appeal before the Tribunal who vi .....

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er sources. Reliance was placed upon the judgment of the Supreme Court in Commissioner of Income Tax v. Smt. P.K. Noorjahan (1999) 237 ITR 570. 4. On the other hand, learned counsel for the revenue has strongly opposed the prayer by submitting that there was deficit in the cash flow statement produced by the assessee and moreover, the sale proceeds cannot exceed the sale consideration in the registered sale deed. 5. After hearing learned counsel for the parties, we do not find any merit in the a .....

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said interest income was not shown in the computation of income. The Assessing Officer made addition of ₹ 38,066/- and added in the returned income of the assessee on account of non showing of interest income earned from saving bank account and also initiated penalty proceedings under Section 271(1)(c) of the Act separately for concealment of income. On being asked to furnish the copy of account maintained with Allahabad Bank, Kolkata Main Branch, the assessee failed to produce the statem .....

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onal evidence, inter alia, on the grounds that he has been filing his return of income reflecting his salary income in a routine manner; during the year in question, he had carried out sale transactions of 28 kanals of ancestral agricultural land at village Moga Mehal Singh, pursuant thereto, the substantial amounts were deposited by him in his bank accounts and the same were utilized towards purchase of further agricultural land. The CIT (A) forwarded the said application to the Assessing Offic .....

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on made by the Assessing Officer holding that the investment had been made by the assessee without having availability of explained cash in terms of receipt of sale consideration. The relevant findings recorded by the CIT(A) in paras 8 and 9 read thus:- 8. I have considered the facts of the case, the observations of the Assessing Officer in the remand proceedings, the submissions of the AR during the appellate proceedings and the rejoinder on the Assessing Officer's remand report. The first .....

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y the assessee with Allahabad bank had been confronted to him at the fag end of appellate proceedings i.e. 14.11.2011 and the order had been passed on 16.11.2011. The apparent limited time available with the assessee to come up with the entire explanation with regard to the cash deposits cannot be said to be sufficient under the circumstances. It is also important to appreciate that the assessee is an operator working on salary with Nestle India Ltd. at Moga and his main source of income for all .....

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cumented in the form of registered deed which are clear evidence of sale of agricultural land and the proceeds thereof. The entirety of circumstances and the facts detailed above make it clear that the same could not be filed at the time of assessment because of limited time available and apparent lack of appreciation of the legal requirement on the part of the assessee in this regard. It could be easily termed as a technical flaw on the part of the appellant especially when no amount is being c .....

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sale deeds, certificates from banks and copies of bank accounts. Therefore, the additional evidence is allowed to be admitted. 9. The recasted cash flow statement and the objections to the same by the Assessing Officer during the remand proceedings have been considered and it is seen that the cash deposits in the Allahabad bank account stand explained on the basis of amounts received by the assessee as per the registered sale deeds. However, there is a negative cash balance on 23.10.2008 to the .....

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e Tribunal restricted the addition of ₹ 11,75,000/- confirmed by the CIT(A) to ₹ 5,87,500/- by observing that the deficit of ₹ 11,75,000/- belonged equally to the assessee and his brother Shri Amarjit Singh and the assessee alone could not be said to be liable for the entire deficit. Further, the Tribunal held that in the absence of any cogent explanation or any evidence or arguments, the plea of the assessee that he was having only source of income as salary income or agricult .....

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e in the present case. In para 8, there is clear finding of the Ld. CIT(A), which is not subject matter of challenge by the Revenue and that the amounts deposited in the Allahabad Bank are clearly receipts from the sale proceeds of ancestral agricultural land belonging to the assessee and his brother. Therefore, it is possible that the assessee could not comprehend that he was liable to explain the entries pertaining to him/his brother of sale of agricultural land. Further, the evidence filed by .....

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sed by the assessee along with his brother Sh. Amarjit Singh in equal share is also not in dispute. Therefore, the deficit of ₹ 11,75,000/- belongs equally to the assessee and his brother Sh. Amarjit Singh and assessee alone cannot be said to be liable for the entire deposit of ₹ 11,75,000/-. The argument of the Ld. DR that Power of Attorney by Sh. Amarjit Singh brother of the assessee had been given to the assessee, does not mean the deficit or levy of tax in toto shall fall on the .....

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