TMI Blog2016 (1) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of Shri Jeet Singh and Shri Hari Singh, the same would not be significant as is required under the Criminal Law, therefore, the judgements relied upon by ld. counsel for the assessee clearly apply to the facts of the case in support of the assessee. We, therefore, do not find any justification to sustain the orders of authorities below. The initial onus upon assessee has thus, been discharged to prove genuine credits in the matter. The Assessing Officer has not brought any evidence against the assessee to contradict or rebut the material on record. We, therefore, set aside the orders of authorities below and delete the addition As regards the credit in the name of Shri Gurdiwan Singh, assessee, however, submitted that subsequent to the statement recorded on 06.11.2008, Shri Gurdiwan Singh filed his affidavit before ld. CIT(Appeals) on 16.05.2009 confirming giving of loan to the assessee. Such an affidavit filed at the subsequent stage without making retraction to the earlier statement given to Assessing Officer would not serve any purpose. Further affidavit of Shri Gurdiwan Singh has not been supported by any evidence or material on record, therefore, authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e household expenditure. Before us, no sufficient evidence or material is produced to justify the withdrawal Levy of penalty under section 271(1)(c) - Held that:- As assessee did not produce any evidence before the authorities below to explain the addition to the capital account and on part of unexplained credit penalty imposed is confirmed. - ITA No. 1256/CHD/2009 & ITA 121/CHD/2012 - - - Dated:- 15-1-2016 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND Ms.RANO JAIN, ACCOUNTANT MEMBER Appellant by : Shri Rakesh Jain Respondent by : Shri S.K.Mittal O R D E R PER BHAVNESH SAINI,JM This order shall dispose of both the above appeals filed by the assessee on quantum as well as penalty matter. Both the appeals are decided as under. ITA 1256/2009 2. This appeal by assessee is directed against the order of ld. CIT(Appeals)-II Ludhiana dated 30.10.2009 for assessment year 2006-07. 3. We have heard ld. Representatives of both the parties. The ld. counsel for the assessee reiterated the submissions made before authorities below and referred to various statements of the creditors, agreement to sell and other documents and affidavits filed in the Paper Boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their parent and in- laws side at different regular occasions. The affidavit of wife of the assessee is thus, contradictory as against submissions made by the assessee before ld. CIT(Appeals). Further, the affidavit of wife of the assessee is not supported by any evidence or material on record. Thus, assessee failed to prove credit worthiness of his wife and the genuineness of the transaction in the matter. The authorities below were, therefore, justified in making and confirming the addition of ₹ 3,30,000/-. This ground of appeal of assessee is accordingly dismissed. 7. On ground No. 2, assessee challenged the addition of ₹ 36,04,000/- on account of unexplained credit under section 68 of the Income Tax Act. 7(i) As per balance sheet annexed to the return of income, the assessee was found to have introduced fresh unsecured loans in the name of following persons : i) S/Shri Jeet Singh, Hari Singh Balbir Singh ₹ 25,75,000/- ii) Shri Gurdiwan Singh ₹ 10,00,000/- iii) Shri Iqbal Singh ₹ 29,000/- Total : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that ₹ 10 lacs was not given by Shri Gurdiwan Singh to the assessee at any point of time and it was own money of the assessee which was introduced in the balance sheet in the name of Shri Gurdiwan Singh. The amount was, therefore, added under section 68 on account of undisclosed income. So far as credit of ₹ 29,000/- is concerned, the amount was shown in the name of Shri Iqbal Singh, payable to him on account of money transfer payment. The assessee did not produce him before Assessing Officer for his examination. No evidence was also produced in support of this credit, therefore, addition was made in the hands of the assessee. 9. The Assessing Officer also noted that assessee was coming in Esteem Car alongwith his two sons and a driver from Delhi on 28.10.2005 and on the way, during Naka by the police near Himmatpuri Drain, Moga Barnala Road, Police Station, Nihal Singh Wala, he was trapped by the police at about 10 PM and during search by the police, cash of ₹ 59,75,000/- from the bag lying at the backside of the vehicle was seized from the Esteem car. The entire money so seized was handed over to the Enforcement Directorate, Jalandhar for investigation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore Assessing Officer at assessment stage and their statements have been recorded. Besides that, all the three persons have received ₹ 7 lacs as advance for sale of agriculture land and they have confirmed having handed over money to the assessee for purchase of agriculture land jointly with the assessee. The Assessing Officer rejected the evidences without any reason. These persons are agriculturists and they did not avail banking facilities. Their statements could not be rejected by the Assessing Officer without any reasons. It was further submitted that Shri Gurdiwan Singh is agriculturist and his statement was recorded by Assessing Officer and his affidavit was also submitted before DDIT, Ludhiana in which he has confirmed advance of money to the assessee, therefore, his statement should not be rejected. He has further filed affidavit before ld. CIT(Appeals) in support of giving of ₹ 10 lacs to the assessee. 11. The assessee further claimed that ₹ 29,000/- was in the name of Shri Iqbal Singh and assessee was carrying on business of money transfer, therefore, no addition could be made. The assessee in the further submissions submitted that regarding the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the balance sheet and to make up this amount, credits have been shown on liability side of the balance sheet. Therefore, he agreed with findings of Assessing Officer. It was noted that nothing has prevented the assessee from explaining this factual position before police and Enforcement Directorate. The ld. CIT(Appeals), in view of the contradiction in the statement of Shri Jeet Singh and Shri Hari Singh, confirmed the addition of ₹ 25,75,000/-. As regards addition of ₹ 10 lacs in respect of the creditor Shri Gurdiwan Singh admitted in his statement that he did not advance any money to the assessee at any time, therefore, genuineness of the credit is not proved. The ld. CIT(Appeals) did not accept subsequent affidavit filed by the assessee of this creditor at the appellate proceedings and rejected the same and accordingly, confirmed the addition. In respect of credit of ₹ 29,000/- in respect of Shri Iqbal Singh, ld. CIT(Appeals) noted that assessee failed to prove source of the same and no evidence in this regard have been produced, therefore, assessee failed to explain this credit to the satisfaction of the Assessing Officer and accordingly, this credit was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the property jointly. PB-11 is reply dated 27.06.2006 filed before DDIT (Investigation) Ludhiana in which also same facts have been pleaded that ₹ 25,75,000/- have been advanced in cash to the assessee for the purpose of purchasing the property jointly with Shri Jeet Singh and others. It was also stated in the same reply that their affidavits have also been filed before DDIT (Investigation). Source of the amount being sale of the property were also filed. It was also explained that since these persons are villagers and they did not maintain bank account, therefore, they have kept the cash with them after selling their land for the purpose of purchasing the property jointly with the assessee. It is, therefore, clear that even before start of the assessment proceedings, assessee has been consistent in his stand before investigating agencies that amount in question was received from Shri Jeet Singh and his brothers for purchase of the property jointly with them. Same amount was recorded in the books of account of the assessee. Thus, identity of these creditors has been proved by assessee. For their source of giving amount in question, assessee has also proved through sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no interference is warranted. iii) Decision of Hon'ble Punjab Haryana High Court in the case of CIT Vs Shri Ram Narain Goel, 224 ITR 180 in which it was held as under : Finding of the Tribunal that cash credits were genuine being based on material on record, the observation of the Tribunal that the assessee was not supposed to prove the source of the loan did ( not give rise to any referable question of law. 14. Considering the facts and circumstances and material on record, it is clear that assessee, since beginning has been pleading that amount in question was received as advance from Shri Jeet Singh and his brothers for purchase of the property jointly and has produced them and their statements have been recorded by the Assessing Officer in which Shri Jeet Singh has confirmed to have given amount in question to the assessee. Therefore, even if there are certain contradictions in the statement of Shri Jeet Singh and Shri Hari Singh, the same would not be significant as is required under the Criminal Law, therefore, the judgements relied upon by ld. counsel for the assessee clearly apply to the facts of the case in support of the assessee. We, therefore, do not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly dismissed. 17. In the result, ground No. 2 of appeal of the assessee is partly allowed. 18. On ground No. 3, assessee challenged addition of ₹ 20 lacs on account of unexplained cash credit. In the balance sheet of the assessee as on 31.03.2006, the assessee was found to have shown a sum of ₹ 20 lacs on account of same agreement. Before Assessing Officer, it was explained that this amount was received by the assessee from Shri Pritam Singh against mortgage of house. The amount was, however, not related to any business transaction. The Assessing Officer asked the assessee to produce Shri Pritam Singh with whom the agreement of mortgage of house for ₹ 25 lacs was claimed to have been entered into and receipt of ₹ 20 lacs from him. Shri Pritam Singh was produced before Assessing Officer and his statement was recorded. In his statement, Shri Pritam Singh stated that he had given amount of ₹ 20 lacs in cash to the assessee in the month of September, 2005 after selling some land in August,2004. Shri Pritam Singh further stated that denomination of notes were not known to him. It was also stated that the possession of the kothi for mortgage of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. In view of the statement of Shri Pritam Singh, supported by documentary evidence on record, Assessing Officer was not justified in disbelieving his statement. It was submitted that there is a general proposition that more than 35% people in India have been keeping their money at their house without using banking channel. The Assessing Officer has, however, failed to make any enquiry in the matter with regard to availability of the amount with Shri Pritam Singh and his source thereof. 20. The ld. CIT(Appeals), however, did not accept contention of the assessee and dismissed this ground of appeal of the assessee. The ld. CIT(Appeals) also observed that the creditor has given amount to the assessee in September, 2005 out of the sale proceeds of land received by him in August, 2004. The ld. CIT(Appeals) accepted that agriculturists keep such huge cash at home for a long time for depositing the same into any bank account. However, in this case, since cash is seized from the assessee by the police, therefore, evidences produced by assessee are not relevant and findings of the Assessing Officer are not unjustified. The ld. CIT(Appeals), accordingly, confirmed the findings of the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money to the assessee. The statement of Shri Pritam Singh is not assailed to through any evidence or material on record. PB-100 is Agreement of Mortgage dated 15.10.2005 in which it is clearly mentioned that the assessee is General Attorney of the property in question through Registered Deed dated 22.07.2002 and Shri Pritam Singh has given ₹ 20 lacs to the assessee as earnest money as against total consideration of ₹ 25 lacs. 21(i) PB-106 is the General Power of Attorney executed by the owner of the property in favour of the assessee which is registered document dated 22.07.2002 authorizing the assessee to mortgage, sell or gift the property in question to anyone. PB-109 to 114 are the copies of the Sale Deed executed by Shri Pritam Singh on 18.08.2004 and 19.08.2004 in favour of Shri Darshan Singh for selling the property through consideration. Therefore, the statement of Shri Pritam Singh is corroborated by the registered Power of Attorney in his favour as well as Mortgage Deed and the Sale Deed executed by Shri Pritam Singh for availability of the cash prior to entering into the transaction with the assessee. Thus, assessee is able to prove the identity of Shri P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in progress, therefore, this issue could be decided by the Enforcement Directorate. Since issue before authorities below was addition under section 68 of the Act, therefore, the issue shall have to be decided on the basis of the parameters prescribed for genuineness of the transaction under section 68 of the Act which, in our opinion, assessee has been able to prove that he has received the money in question from Shri Pritam Singh through genuine transaction. We, therefore, do not find any justification for the authorities below to make and sustain the addition of ₹ 20 lacs. We, accordingly, set aside the orders of authorities below and delete the addition of ₹ 20 lacs. Ground No. 3 of appeal of the assessee is allowed. 22. On ground No. 4 assessee challenged the disallowance of ₹ 19,322/- on account of use of telephone and motor vehicle for personal purposes. The Assessing Officer disallowed these expenses because no log-book or day-to-day running was kept and expenses were not subject to verification. The element of personal usage of vehicles by the assessee and his family members cannot be ruled out. The assessee's counsel also submitted before ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther finding. 27. No other point is argued or pressed. 28. In the result, appeal of the assessee is partly allowed. ITA 121/2012 29. This appeal by assessee is directed against the order of ld. CIT(Appeals)-II, Ludhiana dated 17.11.2011 for assessment year 2006-07 challenging the levy of penalty under section 271(1)(c) of the Act. The Assessing Officer noted in the penalty order that above additions have been made at the assessment stage, therefore, the same would reveal that assessee had furnished inaccurate particulars of income in the garb of addition to capital account, unsecured loans and bogus agreement and additions have been made totaling to ₹ 59,34,000/-. Since these additions have been confirmed by the ld. CIT(Appeals) we well, therefore, Assessing Officer found that assessee had concealed his income to the tune of ₹ 59,34,000/- by furnishing inaccurate particulars of income and accordingly levied the penalty under section 271(1)(c) of the Act. The ld. CIT(Appeals) dismissed the appeal of the assessee. 30. We have considered the rival submissions. The Assessing Officer imposed the penalty under section 271(1)(c) of the Act on the additions m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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