Commissioner of Income Tax-III, Ludhiana vs Sonia Dhillon

Ajay Kumar Mittal, J.—The Revenue has approached this Court u/s 260-A of the income tax Act, 1961 (in short "the Act") and has prayed that the following substantial questions of law arise in this appeal for the consideration of this Court, from the order of the income tax Appellate Tribunal, Chandigarh Bench ''A'', Chandigarh, (for short "the Tribunal") passed on 28.5.2009, in income tax Appeal No. 147/CHD/2009 for the assessment year 2000-01: 1. Whether on the facts and in the circumstances of the case, the Hon''ble ITAT is justified in deleting the addition of Rs. 7,72,837/- made on account of unexplained credit in the bank account of the assessee.

Whether on the facts and in the circumstances of the case, the Hon''ble ITAT is justified in deleting the addition of Rs. 6,50,000/- made on account of unexplained investment in making advance to Sh. Surjit Singh.

On the basis of an intimation that the assessee was having unexplained deposits in her bank account, amounting to Rs. 7,72,837/-, and further, she failed to explain the source of advances in the sum of Rs. 12,50,000/-, given to Surjit Singh, Sharanjit Kaur and M/s. Goodwill Metal Ltd., proceedings u/s 147 of the Act, were started against the assessee. Accordingly, a notice u/s 148 of the Act was issued to the assessee on 24.5.2006. Observing no compliance on behalf of the assessee, the Assessing Officer, after making additions of the above amounts, framed assessment on 24.12.2007 u/s 144 of the Act, at net taxable income of Rs. 20,97,837/-.

The appeal preferred by the assessee against the order of the Assessing Officer met with partial success before the Commissioner of income tax (A)-II, Ludhiana [(in short "the CIT (A)"]. Consequently, the additions of Rs. 7,72,837/- alleged to be unexplained deposits of the assessee and of sum of Rs. 6,50,000/- as unexplained investment by means of advance to Surjit Singh, were deleted vide order dated 21.11.2008. In other words, the CIT (A) gave relief to the assessee in the sum of Rs. 14,22,837/-. The Revenue challenged the order of the CIT (A) before the Tribunal, by filing ITA 147/Chd/2009 whereas, assessee preferred ITA No. 182/Chd/2009. The Tribunal affirmed the order of the CIT (A) and dismissed both the appeals vide order dated 28.5.2009.

We have heard learned counsel for the appellant and have perused the record.

The Assessing Officer had made addition of Rs. 7,72,837/- on the basis of the fact that the assessee had not been able to explain the credit of that sum in her bank account. An addition of other sum of Rs. 12,50,000/-was made on the ground that the assessee had not explained the source of that sum that was shown to have been advanced to Surjit Singh and two others. As noticed earlier, the CIT (A) deleted the addition of the entire sum of Rs. 7,72,837/- which had been found to be an unexplained credit in the bank account of the assessee, and deleted further addition of Rs. 6,50,000/-, out of the sum of Rs. 12,50,000/- which had been observed to be an investment by the assessee from unexplained sources. The finding of the Assessing Officer was consequently reversed to that extent.

The Tribunal put its seal of affirmation on the order of the CIT (A). While dealing with the challenge to the addition in the sum of Rs. 7,72,837/-, the Tribunal, in para 2 of its judgment, recorded as under:

I have carefully considered the contention of learned counsel for the appellant and perused the relevant record. Though the appellant did not avail the opportunity for furnishing the necessary information before the Assessing Officer, the documents being copy of bank account of the appellant, which is in question and the statement of S. Bhupinder Singh Dhillon dated 27.4.2002 being very much on the file of the DDIT and which information is stated to have been obtained by the Assessing Officer as per para 3 of the assessment order, the Assessing Officer should have taken these documents into consideration for deciding the issue in hand. Further, in view of the facts and circumstances explained by the appellant and which have been discussed above, i.e. appellant''s husband being bed-ridden on account of being chronic heart patient and the appellant being only person in the family to look after him and further she herself having suffered from depression etc. the additional documents which are just corroborating the factual position already stated in the statement dated 27.4.2002 and the evidence which goes to the root of the issue in hand and is very much relevant to impart substantial justice are admitted.

Coming to the merits of the case, as far as the credits of Rs. 1,50,000/- and Rs. 6,22,837/- on 5.4.1999 and 7.5.1999 respectively, in the bank account No. 121 in Canara Bank are concerned, it has been consistently stated that these documents were received on account of maturity of certain policies from Peerls Green Forest Ltd., New Delhi. The amounts are shown to be received by cheque as per the copy of bank account itself. Therefore, this contention of the appellant being verifiable from the record is to be accepted. It is further seen that the premium whatsoever paid in respect of these policies was paid during the period earlier to the period relevant to assessment year under consideration. Though it is shown that these policies were originally purchased by Shri Shad Nicklas, a paternal uncle to the appellant, and that the premium whatsoever were paid by him, without going into this aspect of the case even if the sources of the same are taken to be explained, the adverse inference could be drawn only for the assessment year during which the premium was paid. However, keeping in view the factual position as above, as far as assessment year 2000-01 is concerned, no adverse inference could be drawn against the appellant. The addition of Rs. 7,72,837/- treating these receipts to be unexplained is, therefore, not in order and the same is accordingly deleted.

As regards deletion of Rs. 6,50,000/- from loan amount of Rs. 12,50,000/-, the Tribunal recorded as under:

Brief facts are that the Assessing Officer was also informed that the assessee has given loan of Rs. 12,50,000/- to Shri Surjit Singh Nanda, Smt. Sharanjit Kaur and to M/s. Goodwill Metals Ltd. It was further pointed out that the assessee filed a suit in the Court of Judicial Magistrate, Ludhiana to the fact that the aforesaid loan has not been returned. The learned Assessing Officer was of the view that the assessee has not explained the source of Rs. 12,50,000/-, consequently, it was treated that the amount has escaped assessment, consequently added as unexplained income of the assessee. On appeal, the learned first appellate authority found that the loan of Rs. 6 lakh paid to Shri Surjit Singh is not explained, consequently, the addition to this extent was confirmed and the remaining amount of Rs. 6,50,000/- was deleted which is under challenge by the Revenue before the Tribunal. We have found that out of total loan of Rs. 12,50,000/-, the amount of Rs. 6,50,000/- was paid from same bank account No. 121 vide cheque No. 31306 dated 6.4.1999 and 10.5.1999 respectively. Even otherwise, it is not the case that the learned first appellate authority blindly accepted the contention of the assessee rather wherever he was not satisfied, he has not accepted the explanation extended by the assessee, therefore, we have not found any infirmity in the impugned order, on this issue also, consequently this ground is dismissed.

Learned counsel for the Revenue submitted that the Tribunal was in error in upholding the deletion of Rs. 7,72,000/-made by the CIT(A) on account of unexplained deposit to the income of the assessee. It was argued that the finding recorded by the CIT (A) and affirmed by the Tribunal that a sum of Rs. 6,00,000/- was the explained amount of the assessee, is erroneous, perverse and against the record. According to the learned counsel, the evidence on record has not been properly appreciated by the appellate authority.

Learned counsel for the Revenue made strenuous efforts to persuade this Court to re-appreciate the evidence and record fresh conclusion on the basis thereof. But the counsel could not point out any mis-reading or mis-appreciation of evidence on the basis of which it could be recorded that the findings of CIT (A), which were approved by the Tribunal, were erroneous or perverse in any manner. The view taken by the authorities below is plausible view based on appreciation of evidence available on record. No exception can, therefore, be taken to said findings. We, therefore, in exercise of our jurisdiction u/s 260A of the Act would not like to re-appreciate the evidence available on record and record a different conclusion on the basis thereof as sought to be contended by the learned counsel for the appellant. In view of the above, we are of the opinion that the substantial questions of law proposed on behalf of the Revenue do not arise in this case that may attract attention of this Court for decision. The appeal is consequently dismissed.