TaxTMI 
TaxTMI 
2016 (2) TMI 1031
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....ncome-tax (Appeals), Ludhiana, has not considered the fact that the assessee is the existing asses see of Income-tax for the past many years and besides business income, he has also agricultural income and he was in position to invest a sum of Rs. 8,53,150 out of the past savings. 4. That the worthy Commissioner of Income-tax (Appeals), Ludhiana, has also not considered the fact that the assessee has taken a loan from friends and relatives for the purchase of agricultural land especially when their statements were recorded by the Assessing Officer as per the direction of the predecessor of the worthy Commissioner of Income-tax (Appeals) and all the creditors have confirmed having advanced the loan and considering the fact and the entirety of circumstances, his worthy predecessor has deleted whole of the addition of Rs. 27,53,150. 5. That the worthy Commissioner of Income-tax (Appeals), Ludhiana, has confirmed the addition against the facts and in the circumstances of the case and by not considering our submission properly and, in fact, the addition was confirmed on imagination and guess work without considering the facts properly. 3. Briefly stated, the facts of the case are t....
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.... Rs. 27,53,150 Sources of the above investment was claimed as under : Unsecured loans Rs. 19,00,000 Self-savings Rs. 8,53,150 The assessee has filed a list of unsecured loans of Rs. 19 lakhs. The assessee has also claimed that he sold immovable property amounting to Rs. 3,06,000 as under : Date Item Total value Share value 19.1.88 Shop at Chomkkor Sahib 45,000 45,000 26.9.88 House at Bewholpur 27,000 27,000 8.9.89 Plot 20,000 20,000 20,000 1.06.90 Plot at Beholpur 36,000 36,000 7.1.91 Shop at Beholpur 11,000 11,000 7.5.91 House at Beholpur 20,000 20,000 1.10.91 Agricultural land at village Beholpur 1,98,000 1/3rd 66,000 9.10.91 -do- 1,98,000 1/3rd 66,000 2.12.91 -do- 75,000 1/3rd 25,000 The source of the balance investment of Rs. 5,47,150 was stated to be out of his past saving, which fact was not mentioned in assessee's letter dated December 4, 1997. The assessee has filed a letter dated December 15, 1997, and letter dated December 17, 1997, about the investment made and the source thereof for the purchase of agricultural land. 4. As regards the unsecured loans of Rs. 19 lakhs, the assessee submitted the affidavits of 22 per....
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....tative at length. During the course of survey under section 133A of the Act, statement of Shri Gurbachan Singh was recorded on oath by the Additional Director of Income-tax on August 8, 1996, which reads as under : "Statement of Shri Gurbachan Singh, S/o. Sh. Rattan Singh, C/o. M/s. Khalsa Cloth Store, Chandigarh Road, Samrala, recorded during the survey proceedings under section 133A(1) of the Income-tax Act, 1961, on August 8, 1996, at about 6 p.m. Stated on oath that I shall speak the truth, only truth and nothing but truth. Question During survey operations, one diary marked 'Gero' Coca Cola Colour was found and whose photo copies have been taken, you are requested to explain to whom this diary relates, to whom all the entries relate, by whom the diary has been written, whether all the recorded entries relating to different years have been reflected in the regular books of account of any business concern of your or of any family members business ? Answer I identify and admit that this diary is written by me and the entries relate to the business transactions of M/s. Khalsa Cloth Store relating to different years in 1992-93 and most all these entries are reflecte....
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..../3 of three brothers namely 1. Myself, i.e., Sh. Gurbachan Singh 2. Sh. Harnam Singh 3. Sh. Kulwant Singh This land was situated at village Beholelpur District Ferzepur. Ten acres of land was taken on lease from the Government at Village Villon adjoining to the village Beholepur. Later on the land measuring ten kilas was purchased/allotted to one at the rate of Rs. 200 per kila by the Government within year 1961-62. Till then, we were doing agriculture on this land. I have shifted to Samrala in the year 1951. The land at the village Villon was sold 25 to 26 years back at the rate of Rs. 3,600 per kila, (three thousand six hundred per kila). The total consideration was Rs. 31,200. The land at Behalelpur was sold about five to six years back at the rate of Rs. 15,03,000 per kila but the registry of the land was made at lower rate. I received my share value of Rs. 2½ lakhs. It was not deposited in any bank and the same was utilised in our household expenses like marriage of my five daughters and two sons. Question Please explain whether you had purchased agricultural land measuring 171 K-9 M at the village Raunke Kalan and 34 kanals at Village Beed Vadani in the year 19....
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....he requested me to get this paper executed in my name. Whereas the said payment of Rs. 40,000 has been made by Sh. Parminder only. This agreement of sale is a mere security on behalf of said Parminder Singh. Question You had stated earlier that you had raised loans from different friends and relatives, please, state whether any written agreement has been executed by you with them ? Answer No written agreements have been executed. Question Please give details of the persons to whom you had advanced loans and interest received from them ? Answer I had advanced loan of Rs. 1½ lakhs through draft and I used to receive monthly interest at the rate of 2 per cent. The interest is received through cheques. The above statement is true and correct to the best of my knowledge and belief and nothing has been concealed. Sd/- Gurbachan Singh 8/8/96" 7. Shri Sudhir Sehgal, the learned counsel for the assessee vehemently argued that the appellate authority below has laid main emphasis at the statements of assessee recorded during the course of survey. According to learned counsel for the assessee, the Commissioner of Income-tax (Appeals) has not taken the fact into the consid....
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....on is an extremely important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of account do not correctly disclose the correct state of facts, vide decision of the apex court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC) ; (ii) In contradistinction to the power under section 133A, section132(4) of the Income-tax Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law, vide Paul Mathews and Sons v. CIT [2003] 263 ITR 101 (Ker) ; (iii) The expression 'such other materials or information as are available with the Assessing Officer' contained in section 15....
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....he amount was surrendered only on the basis of apprehension that the assessee may not be able to lead the evidence to the extent of Rs. 15 lakhs of the remaining amount and being an old man, he had stated that I do not have any evidence at this moment, we have already observed hereinabove, the Commissioner of Income-tax (Appeals) held that the retraction was made after long time. In my opinion, the observation of the Commissioner of Income-tax (Appeals) is not correct because it is well settled that retraction is permissible only in those circumstances where it is shown by the assessee that it was contrary to the real facts and the assessee is able to lead the evidence in that regard. In our opinion, in the instant case, the deceased assessee did not retract from the statement, as it is evidentially clear from the statement reproduced hereinabove, that the amount of Rs. 15 lakhs was surrendered only as the assessee was of the belief that he might not be able to collect the evidence for the same. In our opinion, the assessee has not manipulated anything in this regard. At the same time, the assessee had produced certain documentary evidences before the lower authorities which we wil....
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....ing Officer has observed that some of them are residing abroad and some have died as per the report of the notice server of his office and the details have been given in the report. It is relevant to reproduce the report, which reads as under : "No. Office of the Income tax Officer. Ward-I, Khanna, Dated Khanna 15-3-2002 The Commissioner of Income-tax, (Appeals), Ludhiana. Sir, Sub : Appellate proceedings in the case of the late Gurbachan Singh, Samrala report submission of- Kindly refer to appellate proceedings in the abovementioned case. The main issue contested in appeal relates to investment of Rs. 27,53,150 in the purchase of agricultural land out of which a sum of Rs. 19,00,000 were shown as unsecured loans from various persons. During the course of last hearing, the appellant has given his arguments in writing before your honour which were handed over to me for giving my comments. It is also submitted that on the basis of discussion made before your goodself, the appellant has provided a list of persons which can be produced now for recording their statements in order to establish that the loans were given by them. It is submitted before your honour i....
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....en to the assessee. Though all these persons are maintaining their bank account from the last 18 to 22 years but the fact remains that the amounts in question were deposited by them just before issuing cheques to the appellant as is clear from their bank accounts available on file. However, the fact remains that the source of the deposit in the banks is not convincing. It is further to be mentioned that in the case of Sh. Jasbir, S/o Sh. Nachattar Singh, Samrala (listed at Sr . . No. iv) above, it was stated that apart from holding, he also sold land of Rs. 21 lakhs. However, no evidence has been filed. Similarly in the case of Smt. Balbir Kaur where the credit is of Rs. 1,50,000 the amount is stated to have been out of agricultural land of 8 acres and out of funds received on the death of her husband. On being asked the purpose of giving the loans to Sh. Gurbachan Singh, all of them replied that the amount was given with a purpose to purchase land by Sh. Gurbachan Singh and with a view to sell it out later on to earn profit and, accordingly, no interest was charged. It was further replied that as the land purchased is in dispute and the matter is pending in the court, the land c....
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....37 7. Kashmira Singh, Diwala 25,000 Cheque (P-43) Yes Yes (confirms) Form "J"/Jamabandi 38-64 8. Harbans Singh, Khalra 75,000 Cheque (P-66) Yes Yes (confirms) - 65-67 9. Ram Singh, Village Behlolpur 75,000 Cheque (P-69) Yes Yes (confirms) - 68-70 10. Sadhu Singh Attari 20,000 Cheque (P-72) Yes Yes (confirms) - 71-74 11. Master Hari Singh, Todarpur 25,000 Cheque (P-75) Yes - - 75-76 12. Amarjit Singh, Village Katala 30,000 Cheque (P-77) Yes - - 77-78 13. Balwant Singh, Jhar Sahib 20,000 - Yes Yes (confirms) - 79-80 14. Mohinder Singh, Khera 1,00,000 Cheque (P-82) Yes - - 81-82 15. Gurmall Singh Saini, Behlolpur 30,000 Cheque (P-83) Yes - - 83-84 16. Ram Pal Singh, Prodi 30,000 Cheque (P-86) Yes Yes (confirms) - 85-87 17. Baljinder Singh, Boundli 30,000 - Yes Yes (confirms) Form "J" (pg. 90-92) 88-92 18. Gurdeep Singh, Boundli 30,000 - Yes Yes (confirms) - 93-94 19. Master Darbara Singh, Barma 1,00,000 Cheque (P-95) Yes - Death Certificate (pg. 97) 95-97 20. Bagga Singh, Lamberdar Parodi 50,000 Cheque (P-99) Yes Yes (confirms) - 98-100 21. Amarjit Singh Kotla 25,000 - ....
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.... and the creditworthiness of the creditor and, hence, we confirm the addition of Rs. 20,000. Similarly, as per the above list in the case of master Dilip Singh, Ajnod (Sl. No. 28) the assessee claimed to have received Rs. 50,000. It is clear that no evidence is submitted to prove the identity, creditworthiness of the creditor and the genuineness of the transaction and, hence, we confirm the addition of Rs. 50,000. Also, the assessee claimed to have received a sum of Rs. 10,000 (Sl. No. 29) from one Shri Anil Kumar. The assessee failed to prove the identity of the creditor, cred itworthiness of the creditor and the genuineness of the transaction. The assessee stated that he is residing abroad. We also confirm the addition of Rs. 10,000. The assessee also claimed unsecured loan of Rs. 1 lakh received from Shri Labh Singh Berma (Sl. No. 30) in cash. The assessee has filed a certificate of Sarpanch which has no evidentiary value because the assessee has failed to prove the creditworthiness of the creditor and the genuineness of the transaction. Thus, the addition is confirmed. The assessee claimed to have received unsecured loan of Rs. 30,000 from one Ms. Amar Kaur, Bal lion (Sl. No. 2....
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.... In this case also, the assessee has failed to prove the creditworthiness of the creditor and the genuineness of the transaction. Accordingly, we confirm the addition. The assessee had also claimed that he had received a loan of Rs. 25,000 and Rs. 30,000 from master Hari Singh, Todarpur (Sl. No. 11) and Shri Amarjit Singh, village Katala (Sl. No. 12) respectively. The assessee had filed the affidavits of these two persons. Although the persons have stated that the loans were given out of sale proceeds of agricultural produce. However, no supporting evidence is available on record to show that they were having agricultural land and income therefrom. In the absence of such evidence, we confirm the addition of Rs. 25,000 and Rs. 30,000. The assessee has also claimed a sum of Rs. 1 lakh received as loan from Sh. Mohinder Singh, Khera (Sl. No. 14). The assessee had produced an affidavit of Shri Khera (page 81 of the paper book), wherein he has stated that he has given a loan of Rs. 1 lakh to the assessee out of sale proceeds of the agricultural produce. He has also claimed that he is having 20 acres of land at the village, Khera, Tehsil Samrala. However, there is no supporting documen....
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....ficer, affidavits, bank account and bank certificates of these creditors which are available in the assessee's compilation. All these creditors have categorically stated in their respective statements that they had given the loans to the assessee. They had also proved their creditworthiness and transaction are through banking channels. It is also worth mentioning that in the remand report the Assessing Officer has mentioned that Shri Balwant Singh, S/o. Sh. Mal Singh, Shri Ram Singh, S/o Sh. Bawant Singh and Shri Sadhu Singh, S/o Sh. Khazan Singh, have stated that the amounts given were returned back by the assessee. It appears that the authorities below have rejected the explanation of the assessee on the basis of conjectures and surmises. They have also not appreciated the explanation of the assessee in a right perspective. In our opinion, the addition has been made keeping in view the statement of assessee recorded at the time of survey and they have simply brushed aside the evidence of the assessee without assigning any cogent reasons. It is worthwhile to mention here that the Revenue authorities have doubted the genuineness of the transactions between the assessee and Shri....
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....icultural income. In support of the said contention the assessee submitted a copy of Jamabandi for the year 1985, which was issued by the Patwari dated February 8, 1990. The assessee has also furnished photocopies of Form 1 with regard to the sale of paddy in 1987 and 1990 with M/s. Inder Singh, Bhupinder Singh, Mandi Chamkaur Sahib, Distt. Ropar. These documents were filed to claim that the assessee was earning agricultural income and the amount was kept at home and also given to some persons by mortgaging agricultural land. It is also apparent from the record that photocopies of some mortgage deeds were produced before the lower authorities. The assessee has also claimed that he was partner in M/s. Gurbachan Singh C/o. M/s. Inder Singh Chamkaur Sahib who was being assessed by Income-tax Officer, Ropar and the firm was dissolved with effect from April 1, 1981. It is observed that the learned Commissioner of Income-tax (Appeals) has rejected the explanation of the assessee stating that for the year under consideration the assessee had declared income of only Rs. 19,600 in addition to the agricultural income of Rs. 15,000 in his return of income. He observed that in the preceding ye....