Shri Balbir Singh, Una vs Assessee

(Appellant) (Respondent)

Appellant By : Shri Sudhir Sehgal Respondent By : Shri S.K Mittal

Date of hearing : 22.12.2014 Date of Pronouncement : 12.01.2015

ORDER

PER T.R.SOOD, A.M.

The appeal filed by the assessee is directed against the order dated

31/01/2013 of CIT(A) Shimla.

2. In this appeal the assessee has raised the following grounds:-

1. That the Worthy Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the appellant and confirming the order of Assessing Officer assessing the income at Rs. 12,70,740/-.

2. That the Worthy CIT(A) has failed to consider that the appellant was not given sufficient time to explain the source of addition of Rs. 10,66,500/- made by the Assessing Officer on account of peak of deposits and withdrawals made from the bank account of the appellant.

3. That the Worthy CIT(A) has erred in not considering that the appellant owns agricultural land in Village Khadd, Distt.

2 Una and amount of Rs. 4,75,000/- was received by him as earnest money from the sale of KHAIR TREES on 05.07.2004.

4. That the Worthy CIT(A) has also erred in not considering that the appellant's wife also received Rs. 5,75,700/- from the sale of Gold ornaments on 17.07.2004.

5. That the Worthy CIT(A) has also failed to consider that the appellant had joint account with his wife Smt. Manjit Kaur and amount of Rs. 2,95,000/-, Rs. 2,70,000/- and Rs.

5,00,000/- was deposited on 06.07.2004, 20.07.2004 and 27.07.2004 respectively out of amount of Rs. 4,75,000/- received on 05.07.2004 and Rs. 5,75,750/- received on 17.07.2004 as explained in para-3 and 4 above.

6. That the worthy CIT(A) has erred in not admitting the additional evidence as furnished during the course of hearing.

3. After hearing both the parties we find that during assessment proceedings

the Assessing Officer noticed that assessee agree to sell certain pieces of land

against which advance was received and the transaction did not mature. In

response to further enquiries, some of the persons were produced and Assessing

Officer accepted the receipt of advances in the case of Shri Dhani Ram Heer,

Shri Amar Nath and Shri Krishan Dev. It was also claimed that assessee has

received a gift of Rs. 90,000/- that was also found to be correct. The assessee

had further withdrawn a sum of Rs. 1,20,000/- from the books of Diwan

Highway and out of this a sum of Rs. 94,500/- was shown to have been utilized

against these deposits. The Assessing Officer was of the opinion that if this

credit was given then net house hold withdrawals would remain at Rs. 22,500/-

which was not sufficient and, therefore, household withdrawals were taken at

Rs. 70,000/- and credit for Rs. 50,000/- was given. In this background, the

addition of Rs. 10,66,500/- was made as under:-

3

Peak worked out after giving credits to the deposits Rs. 22,26,500/- Less:-

Withdrawals from Capita a/c Rs. 50,000/- As discussed above Amount received as per agreements To sale land as mentioned above Rs. 10,20,000/- Gift from Mother Rs. 90,000/- Rs. 11,60,000

Unexplained Income Rs. 10,66,500

4. On appeal, it was mainl y submitted that assessee is owner of agricultural

land and had received a sum of Rs. 4,75,000/- as earnest money against the sale

of Khair trees on 5.7.2004. Further, the assessee's wife had received a sum of

Rs. 5,75,000/- from sale of gold ornaments and out of this source, a sum of Rs.

2,95,000/- and Rs. 2,70,000/- were received and Rs. 5 lakhs was deposited in the

bank account on 6.7.2004, 20.7.2004 and 27.7.2004. It was pleaded that since

sufficient opportunity was not given and, therefore, this soruce have not been

taken into credit by the Assessing Officer.

5. The Ld. CIT(A) after examining the submissions was of the opinion that

Assessing Officer had given sufficient opportunit y and no evidence was filed in

respect of earnest money against sale of trees as well as sale of jewellery by the

wife, therefore, this contention were rejected and addition was confirmed.

6. Before us, Ld. Counsel for the assessee reiterated the submissions made

before the Assessing Officer. He also referred to various documents in the

paper book to show that proper additional evidence was filed before the Ld.

CIT(A) and he should have examined the same or atleast asked for the remand

report. In the alternative he submitted that Tribunal could also admit these

documents as additional evidence which clearl y shows the source of cash. 4

7. On the other hand the Ld. DR strongl y supported the order of CIT(A).

8. We have considered the rival submissions carefull y and find some force in

the contention of Ld. Counsel for the assessee that C IT(A) should have atleast

asked for remand report in respect of these assessee. At the same time, we find

that no convincing reason had been given why these documents were not filed

before the Assessing Officer. However, considering the fact that case pertains

to assessment year 2005-06 and it may not be feasible to verify the evidence

after ten years, we are of the opinion that if a reasonable addition is made that

would meet the ends of justice. Therefore, considering the over all facts and

circumstances of the case we are of the opinion that if addition of Rs. 5,25,000/-

is made out of the addition made by Assessing Officer on account of unproved

deposits that would meet the ends of justice. Therefore, we set aside the order of

Ld. C IT(A) and direct the Assessing Officer to make the addition of Rs.

5,25,000/- on account of deposits instead of Rs. 10,66,000/-. Resultantl y, the

appeal of the assessee is partl y allowed.

9. In the result, appeal of the assessee is partl y allowed.

Order pronounced in the Open Court on 12.01.2015

Sd/- Sd/-

(BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 12 t h January, 2015 rkk

Copy to: The Appellant, The Respondent, The C IT, The CIT(A), The DR