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I.T.O, Ward-15 (1) , Kolkata Versus DevenderJeet Singh Kler

2017 (12) TMI 658 - ITAT KOLKATA

Addition on account of unexplained cash credit and unexplained money u/s 69A - Held that:- AO did not bring any cogent evidence to disprove the same. We note that AO had raised a controversy about the receipt of the money from the assessee by his father. The assessee’s father has categorically stated in his affidavit that he has received the amount. In respect of non-filing of return by the assessee’s father for the A.Y 2009-10, we are of the view that this cannot result in any taxation in the a .....

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bogus. Based on the factual position, we are of the view that order passed by the CIT(A) does not contain any infirmity. Therefore, we confirm the order passed by the ld. CIT(A). - Addition under the head of unexplained expenditure and addition under the head concealed income earned from security charges - Held that:- AO during the assessment proceedings made his own estimate of what the assessee would have spent but we observe that the assessee had been supported by his son and his father .....

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o effect on the income. We note from the remand report that the AO has not controvert the fact that payment of ₹ 71,937/- to security personnel was debited to the security service charges received account resulting in netting off of the receipts to that extent. Therefore, the assessee’s explanation that if the security charges received were to be increased by ₹ 71,937/- to ₹ 2,34,473/-, the payment made to security personnel of ₹ 65,364/- was also required to be correspon .....

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gainst an order passed by the CIT(A), in Appeal No.857/CIT(A)-XIV/2011-12, dated 03.02.2014, which in turn arises out of an order passed by the Assessing Officer u/s143(3) of the Income Tax Act, 1961, (hereinafter referred to as the Act ) dated 28.12.2011. 2. The Revenue has raised the following grounds of appeal: 1.That under the facts and circumstances of the case ld CIT(A) erred in deleting the addition of ₹ 54,20,000/- in the head of unexplained cash credit u/s 68. 2. That under the fa .....

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or amend any grounds of appeal on or before the date of hearing. 3. Ground No.1 and Ground No.2 raised by the Revenue relate to addition of ₹ 54,20,000/- on account of unexplained cash credit and ₹ 14,00,000/- on account of unexplained money u/s 69Aof the Income Tax Act, 1961. 3.1 The brief facts qua the issues are that Mr. Devender Jeet Singh Kler, the assessee, is an ex-military person. During the course of scrutiny proceedings for the A.Y. 2009-10, the Assessing Officer added S .....

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ssessee, including the value of crop sales. Out of ₹ 54,20,000/-, the amount of ₹ 50,02,500 explained as a sale proceeds of the four lands and ₹ 4,25,000/-explained as a sale proceeds of crops standing on the aforesaid lands. In respect of ₹ 19,00,000/-, the assessee explained that it is a sale proceeds of personal effects of Mr. Hardev Singh, the father of the assessee. The assessee also explained the AO that Mr. Harnek Singh returned 8 pcs of Antiques and therefore the .....

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land during the years 2005- 08 and that out of such cash receipts of ₹ 54,27,500/-, a sum of ₹ 54,20,000/- was deposited in the said bank account. It was explained that the assessee did not want to travel to Kolkata with the cash and as such opened the savings bank account on the date of sale, namely, September 19, 2008, for depositing the money. In respect of the cheque received from Harnek Singh it was explained that Harnek Singh had initially given a cheque of ₹ 19,00,000/- .....

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icultural land executed by the constituted attorney of the assessee s father Shamsher Singh Kler, who was the elder brother of the assessee s father. The said sale deeds were in Punjabi and the assessee also furnished English translations. The assessee furnished copy of the sale bill relating to his father s household goods including silver. An affidavit of the assessee s father was also submitted. However, the ITO noted that in one of the sale deeds for an amount of ₹ 4,12,500/- Shamsher .....

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er Hardev Singh Kler was the owner of the agricultural lands which were sold under the four sale deeds all dated September 19, 2008 for an aggregate sum of ₹ 50,02,500/- received in cash. The sale deeds which the consideration amount was duly registered with the registering authority on September 19, 2008. The sale deed for ₹ 4,12,500/- was also in respect of agricultural land bellowing to the assessee s father and was executed by Shamsher Singh Kler as constituted attorney of the as .....

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tween the money received by the assessee on account of his father deposited in the said bank account and the transactions contained in the documents submitted to the ITO was clearly established. There can be no dispute that the assessee s father was the owner of agricultural land, which was sold on September 19, 2008 for cash consideration. The assessing officer disregarded the submission of the assessee and added ₹ 54,20,000/- under section 68 of the I.T. Act treating the same as unexplai .....

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e said money for his personal purpose. (5)No evidence regarding the agriculture crop or sale thereof. (6) No evidence found regarding the transaction of household goods including 30 K.G of silver. Based on the above observations the assessing officer added ₹ 54,20,000/- under section 68 of the I.T. Act, treating the same as unexplained cash credit and also added ₹ 14,00,000/- under section 69A of the I.T. Act. 3.2 Aggrieved by the addition made by the Assessing Officer, the assessee .....

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cheque. The ld. CIT(A) noted that assessee s father did not file the return of income because agricultural land was exempt from capital gain tax. The assessee retired from the Indian Air Force as a Wing Commander and he was in receipt of pension. He has interest income and a small amount of income from the business of providing security services. The assessee s father Hardev Singh Klerwas a decorated soldier and participated in the Bangladesh war. The assessee s grandfather Chajja Singh was also .....

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assessee resides at Kolkata. The bank account was opened by the assessee on September 19,2008 at Khanna in the State of Punjab. On the same day, four conveyance deeds were said to had been executed before the Additional District Sub-Regisrar, Khanna by Shamsher Singh as constituted attorney of the assessee s father Hardev Singh for sale of Hardev Singh s agricultural land for an aggregate sum of ₹ 50,02,500/-. It was claimed that this amount, along with another sum of ₹ 4,25,000/- r .....

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ponse to the notices/letters sent by him. According to the Assessing Officer, absence of office seal, name seal and office telephone number makes the documents suspect. The CIT(A) noted thatthis approach of the Assessing Officer is difficult to appreciate. The Assessing Officer has been in direct correspondence with the Additional District Sub-Registrar Khanna, and an officer of the State Government of Punjab, over a period of nearly six months. The Assessing Officer sent several letters to the .....

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mentioning the date May 30, 2013, as the date of certification. The letter dated December 13, 2012 of the said official also bears his office seal. Seals were also affixed on the registered envelopes of the letters dated February 28, 2013 and April 23, 2013. If the Assessing Officer entertained any doubts he should have requested his counterpart at Additional District Sub-Registrar, Khanna(Khanna) to make local enquiries in the office of the registering authority. The CIT(A) noted that the Addit .....

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ine in order to use up all the stamp papers. The same matter when typed out in single space for issuing certified copy has fitted in one and half pages. Just because the certified copies so typed out were in lesser number of pages than the original documents cannot be a reason to ignore the documents. The Assessing Officer had not pointed out any difference in the contents of the photocopies of the sale deeds submitted at the time of assessment and the certified copies subsequently received from .....

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ng to the registering authority, the land sold was agricultural. The CIT(A) noted that while considering the explanation of the assessee, the AO had acted unreasonably. The CIT(A) noted that the cash deposit in the bank to the extent of ₹ 4,25,000/- is claimed to be the amount received from the cultivation of the land during 2005- 2008, prior to its sale. The Assessing Officer had sent a summons to the cultivator Nirmal Singh who got it in Punjab on the date fixed for his appearance before .....

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at such land was cultivated and gave rise to agricultural income. Since the land was given on contract basis, the absence of details of the sales of agricultural produce such as date and quantity is not material. The CIT(A) noted that the Assessing Officer had also raised a controversy about the receipt of the money from the assessee by his father. The assessee's father has categorically stated in his affidavit that he has received the amount. It is not for the ITO to question this statement .....

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₹ 14,00,000/- on account of the cheque received from Harnek Singh. The cheque was for ₹ 19,00,000/- but ₹ 5,00,000/- was returned to him and hence the addition is ₹ 14,00,000/-. The CIT(A) noted that assessee had provided to the Assessing Officer a copy of the sale bill in respect of the household articles of his father. The assessee's father having moved to USA in 2005, wished to dispose of his household articles in India. Since the assessee had gone to Punjab in con .....

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vember 16, 2011. The second affidavit explaining the inadvertent omission in the first affidavit cannot be considered as contradicting the first affidavit. It simply seeks to state a fact which got left out in the first affidavit. Even the AO has added ₹ 14,00,000/- accepting the return of ₹ 5,00,000/- to Harnek Singh. The CIT(A) observed that the particulars of the household articles were mentioned in the sale bill. Such articles were items like furniture and fixture, carpets, camer .....

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ew of the items, therefore a sum of ₹ 5,00,000/- was returned to him by cheque. Therefore, the CIT(A), considering these facts and circumstances deleted the addition of ₹ 14,00,000/-. 3.4 Not being satisfied with the order of the CIT(A), the Revenue is in appeal before us. The ld. DR for the Revenue had submitted before us that during the assessment proceedings, the AO has analyzed the various issues and the cash deposited by the assessee in the bank. During the course of assessment .....

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g authorities but the Ld. CIT (A) did not provide opportunity to remove the doubt as stated in the Para no 8.5 of his order. The Ld. CIT (A) may issue a specific direction again to verify the genuineness .The doubt of the assessing officer was not clearly removed from any ends. The ld DR for the Revenue also pointed out that during the course of scrutiny proceedings the A.O found that out of four lands, one land was related to Shamsher Singh then how and why the total value of four lands deposit .....

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idence regarding this award. The assessee should have produced at least the paper of Mutation of land either in the name of his father or in the name of his grandfather because before selling any immovable property 'Mutation' is required. Besides, The DR also pointed out that there was no need to deposit the cash in several days but the assessee did it and it was accepted without supporting any valid reasons. During the assessment proceedings the assessee also did not submit the purchase .....

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presented sale proceeds of his father s agricultural land. The assessee used to provide security service and received a very small amount during the year under consideration from the business of security services. The assessee has explained the nature and source of the cash deposit in the bank account and there is clearly a nexus between the money deposited in the bank and sale of the land. The ld. counsel also pointed out that sale deeds provided by the Additional District Sub-Registrar, Khanna .....

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mabandi years 2002-03 and 2007-08 had been certified by the Patwari to be correct as per records. Further, even according to the registering authority, the land sold was agricultural. The Counsel stated that while considering the explanation of the assessee, the Department should not act unreasonably. The Cash deposit in the bank to the extent of ₹ 4,25,000/- was claimed to be the amount received from the cultivation of the land during 2005-2008, prior to its sale. The AO had sent a summon .....

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ment cannot be questioned. Even if one proceeds on the basis as if the father acknowledged receipt of the money but let his son have it, it cannot result in taxation of such amount in the son s hand. Besides, the non-filing of return by the assessee s father for the assessment year 2009-10, cannot result in any taxation in the assessee s hand. Therefore, based on these submissions, the ld. counsel for the assessee prayed that CIT(A) has passed a reasoned order and it should not be interfered by .....

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unity to also dispose of his father s household articles. The main reason why the AO did not accept the assessee s explanation was that the assessee s father in his affidavit dated November 16, 2011 did not mention about the return of ₹ 5,00,000/-. He considered the subsequent affidavit dated January 10, 2013 of the assessee s father about the return of ₹ 5,00,000/- as contradicting his previous affidavit dated November 16, 2011. The second affidavit explaining the inadvertent omissi .....

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, cigar case, old collector s wine bottles, some antiques, an silver flower pot and some silver. Such articles were accumulated by the assessee s father over his lifetime. The assessee s father is a decorated soldier and was 84 years of age in 2008. The assessee s father sold the articles and the buyers paid ₹ 19,00,000/- for the same by a/c payee cheque. Later, since the purchaser returned a few of the items, a sum of ₹ 5,00,000/- was returned to him by cheque. Therefore, based on t .....

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eposit in the bank to the extent of ₹ 4,25,000/- is claimed to be the amount received from the cultivation of the land during 2005-2008, prior to its sale. The AO did not bring any cogent evidence to disprove the same. We note that AO had raised a controversy about the receipt of the money from the assessee by his father. The assessee s father has categorically stated in his affidavit that he has received the amount. In respect of non-filing of return by the assessee s father for the A.Y 2 .....

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assessee during the assessment proceedings had provided to the AO a copy of the sale bill in respect of the household articles of his father. The AO did not bring on record and cogent evidence to prove that sale bills of household articles are bogus. Based on the factual position, we are of the view that order passed by the CIT(A) does not contain any infirmity. Therefore, we confirm the order passed by the ld. CIT(A). 3.8 In the result, the appeal filed by the Revenue (in Ground No.1 and 2) are .....

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ving the luxurious life style of the assessee. The ld Counsel pointed out that the assessing officer made addition on account of low drawings but the Ld. CIT (A) deleted the addition because the assessee was supported by his son. The ld. Counsel for the assessee has submitted before us that for the addition of ₹ 93,484/- on account of low drawings, the AO made his own estimate of what the assessee would have spent. The AO compared such estimate of ₹ 1,71,484/- made by him with the wi .....

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e assessee. Having heard the rival submissions and perused the materials available on record, we are of the view that AO during the assessment proceedings made his own estimate of what the assessee would have spent but we observe that the assessee had been supported by his son and his father was getting tax free pension which was sufficient to meet the family expenses. Therefore, considering the factual position, we are of the view that the order passed by the CIT(A) does not contain any infirmi .....

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efore the he added the extra receipt of ₹ 71,937/- as concealed income. But the Ld. CIT (A) deleted the addition, stating that if the security charges increased by ₹ 71,937/- then the payment was also required to be increased by ₹ 71,937/-. The ld DR for the Revenue pointed out that the Ld. CIT(A) did not consider that whatever the expenses incurred by the assessee had already been claimed by him in earlier years. Regarding securities charges, we note that according to the asse .....

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