Gurbinder Singh Mahal Vs ITO (ITAT Amritsar)
ITAT Amritsar held that the assessee is not liable for payment of tax related to sale of property which belong to his father. Accordingly, addition liable to be quashed.
Facts- The addition was made by AO for depositing of cash total in two bank accounts of the assessee. The addition of Rs.1,95,47,959/- was confirmed and the assessment was completed u/s 144 of the Act.
The assessee prayed that the entire amount of deposit was not properly reconciled by the AO. The withdraw of cash was also not considered in the assessment order. Further, the source of the cash deposit was from sale of the immovable properties, loan from the father of the assessee. The assessee ispower of attorney holder of the property (land) which was owned by his father. So, the entire amount related to sale of land would not be taxed in the hands of the assessee.
Aggrieved assessee filed an appeal before CIT(A). CIT(A) upheld the order of the ld. AO. Being aggrieved assessee filed the present appeal.
Conclusion- We fully respectfully relied on the order of the apex court and the assessee is not liable for payment of tax related to sale of property which belong to his father. The source of cash deposited in bank accounts is well explained considering the cash trial of the assessee. The ld. AO had only considered the cash deposit. The deposit of cash was duly explained during the remand before the ld. AO. Entire issue was explained before both the lower authorities by the assessee. The ld. DR has not submitted any contrary fact or any judgment against the submission of the ld. AR. So, the addition made by the ld. AO amount to Rs.1,95,47,959/- is quashed.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), NFAC, Delhi,[in brevity the ‘CIT (A)’] order passed u/s 250of the Income Tax Act 1961, for A.Y. 2014-15.The impugned order was emanated from the order of the Income Tax Officer Ward -4(2), Amritsar order passed u/s 144of the Act date of order 27.12.2016.
The assessee has taken the following grounds:-
“1. That the Ld. CIT(A) has erred in dismissing the appeal by passing an ex-parte order u/s 250(6) and sustaining the addition made by the AO.
2. That the ex-parte order passed u/s 250(6) of the Income Tax Act, is bad in law as the same has been disposed off without examining the merits of the case. That the order passed by the CIT(A) is bad in law as the same has been made without taking into account the remand report submitted by the jurisdictional assessing officer to the CIT(A) dated 08.10.2018. That the order u/s 250(6) has been passed in summary manner without considering the submissions made by the assessee during appellate proceedings.
3. That the CIT(A) has erred in confirming the addition of Rs. 19547959/- on account of cash to the tune of Rs. 7490000/- deposited in Punjab & Sind Bank and Rs. 12368499/-deposited in HDFC Bank without giving the benefit of agriculture income earned by the assessee, rotation of funds and funds credited in the bank account on account of sale of property made on behalf of the father through registered POA dated 17.02.2012.
4. That the CIT(A) has erred in confirming the addition of Rs. 19547959/- on account of cash deposited ignoring the fact that the assessee’s father was the owner of agriculture land and the said cash was deposited partly out proceeds from sale of agriculture land belonging to father. That the order has been passed without taking into consideration the affidavits filed by the father of the assessee before the CIT(A).
5. That the CIT(A) has erred in confirming the addition of Rs. 19547959/- on account of cash deposited ignoring the fact that all the saving bank accounts are joint bank accounts and as such, the cash deposited cannot be limited to the 1st account holder.
6. That the CIT(A) has ignored the fact that the assessee had regularly been filing return of income and showing business income and as such, both, the Ld. AO and the Ld. CIT(A) were duty bound to carry further investigation [u/s section 250(4)] through banks instead of disposing off the appeal for non-appearance without adjudicating on merits.
7. The appellant craves leave to add, amend, or alter any of the grounds of appeal.”
2. The case was called for hearing, first, the ld. DR filed an adjournment petition before the bench. But after the detailed discussion the ld. DR is ready for the hearing and withdraw the application. Both the parties Mr. Rohit Kapoor, CA for the assessee and Smt. Rajinder Kaur, CIT-DR for the respondent argued before the bench. The matter is taken for adjudication.
3. The ld. AR of the assessee filed a written submission which are kept in the record. In argument placed that the addition was made by the ld. AO for depositing of cash total amount of Rs.1,98,58,499/- in two bank accounts of the assessee. As per observation of the ld. AO amount to Rs.74,90,000/- was deposited in Punjab & Sind Bank and Rs.1,23,68,499/- cash was deposited in HDFC Bank. Considering the disclosed business income Rs.3,10,540/-, the addition was confirmed amount to Rs.1,95,47,959/- and the assessment was completed u/s 144 of the Act. The assessee prayed that the entire amount of deposit was not properly reconciled by the AO. The withdraw of cash was also not considered in the assessment order. Further, the source of the cash deposit was from sale of the immovable properties, loan from the father of the assessee. The assessee ispower of attorney holder of the property (land) which was owned by his father. So, the entire amount related to sale of land would not be taxed in the hands of the assessee. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved assessee filed an appeal before us.
4. The ld. AR first placed that the assessment order was passed u/s 144 of the Act. The assessee submitted all the relevant documents with application under Rule 46A of Income tax Rule,1962 for filing the additional evidence before the appellate authority. The detail of submission before the appellate authority is extracted as below:
“6. That the appellant filed an appeal before the Hon’ble CIT(A) on 10.03.2017 against the said order of AO. The appellant has made submission before the CIT(A) explaining the source of cash deposited in bank and it was also highlighted that the total cash deposited was to the tune of Rs. 14842999/- and not Rs. 19858499/- as per the AO. It was explained that the cash was deposited out of sale proceeds of property belonging to father and also furnished all the sale deeds belonging to father along with the affidavit of father Sh. Harjit Singh and copy of power of attorney. The summary of documents submitted by way of additional evidence before the CIT(A) is as under: –
