TaxTMI 
TaxTMI 
2018 (12) TMI 970
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....ome of Rs. 90,000, Rs. 93,800/-, comprising, in the main, salary income (at Rs. 96,000) from M/s. Amritsar Gas Service, Putlighar, Amritsar (AGS), on 27/03/2008. The list of the employees of AGS (as on 31/03/2007) obtained by the Assessing Officer (AO) during the assessment proceedings, however, did not mention the name of the assessee, so that, apparently, the salary certificate from AGS as furnished by the assessee was false. The assessee being unable to explain the same, the returned taxable income was assessed as business income. The assessee had further received Rs. 80 lacs during the year. The same was explained to be on the sale of the business of AGS to Sh. Sada Singh s/o Lt. Sh. Budha Singh (half share) and S/Sh. Nirmaljeet Singh and Sawinder Pal Singh, sons of Sh. Balbir Singh (half share) on the basis of a general power of attorney (GPOA) dated 24/07/2006, issued in the assessee's favour by one, Sh. Paramdeep Singh, the owner of AGS (at PB pgs. 1/1A, 2 to 2C). The assessee had, it was explained, in pursuance of the GPOA, entered into an agreement to sell dated 29/08/2006 with the 'payers' for the transfer of the gas agency for a consideration of Rs. 80 lacs, and the a....
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....e (refer para 7, pgs. 7-9, of the impugned order). The addition of Rs. 80 lacs was, accordingly, deleted, while confirming the assessment of Rs. 93,800/- as business income. Aggrieved, the Revenue is in appeal, raising the following grounds: '1. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeal), Amritsar is not justified in deleting the addition of Rs. 80 lacs made by the Assessing Officer, without appreciating the facts that the assessee has transferred the Amritsar Gas Service after obtaining the power of attorney from the original Allottee. 2. The Ld. Commissioner of Income Tax (Appeal) is not justified in deleting the addition ignoring the facts that the Gas Agency is not saleable by the Original Allottee without the permission of Principal Authority. 3. On the facts and in the circumstances of the case the Commissioner of Income Tax (Appeal) has ignored the facts that the assessee failed to produce the documentary evidence of money transferred to the Original Allottee. 4. On the facts and in the circumstances of the case the Commissioner of Income Tax (Appeal) has ignored the facts that in the....
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....ting as an attorney holder, was not discussed or considered by the tribunal, which amounted to a mistake apparent from record (refer para 4 of the order u/s. 254(2)). The tribunal, noting the same, recalled its' order. It was thus incumbent on the assessee to, in the instant proceedings, show the document (or the fact exhibited thereby) not considered earlier, i.e., the non-consideration of which rendered the tribunal's order as mistaken. The tribunal's stating in its order under section 254(1) (dated 11.9.2012) that there was nothing on record to exhibit that Sh. Paramdeep Singh (the owner) had received the entire sale consideration is premised on the fact that the assessee is statedly not the owner but the POA, having received the amount only as an agent for and on behalf of the said principal, which is even otherwise apparent from the discussion of the facts at para 7.1 of its' order u/s. 254(1), which precedes it's findings/conclusions and, in fact, stands reproduced by the tribunal (at para 3, pgs. 3-4) of its' order under section 254(2) dated 16.6.2016. Again, there was no reference before us to any of the pages of the 38 page paper-book (PB), filed earlier, which were sta....
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.... Shrimal v. CIT [1981] 131 ITR 451 (SC), the Apex Court clarified that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, where necessary, appropriate directions to the authority (against whose decision the appeal is preferred) to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute. This is particularly so in the present case as the AO had called upon the assessee to produce Sh. Paramdeep Singh, which was not, and without any explanation for the same before him, and which has been found as extremely relevant by all, the AO; the first appellate authority, as well as the second appellate authority - on both the occasions. It also needs to be appreciated that the AO could not anticipate things, and it may well have been that the owner deposed before him, either confirming or resiling the transaction, whose evidence, where adverse, would have to be confronted to the assessee, enabling proving or, as a case may be, disproving the transaction, arriving at, in either case, the truth of the matter. In appeal, it was submitted, without leading any evidence to that....
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....r as a sale or transfer of business, nothing survives. Of course, this must be corroborated by the actual transfer of the gas agency which, as the Revenue points out per its Gd. 2 before us, is not, requiring permission - a fact which can be readily ascertained from the concerned company. Where the facts so found are not consistent with the assessee's claims, the matter would perhaps need to be examined/probed further or, in any case, the assessee required to substantiate his stand. As such, nothing much turns on the ld. counsel, who also confirmed before us that the agreement to sell is not a registered document, stating, with reference to the assessee's bank account, of a part of the entire amount as having been received on behalf of, and paid to, AGS. An 'agreement to sell' is not the same as an 'agreement of sale', and only envisages an understanding to, subject to certain preconditions, viz., the permissions afore-referred, undertake sale, a matter subsequent. The Agency changing hands, the amount should have rather been transferred to the personal account of the ex-proprietor (Sh. Paramdeep Singh), and not to the account of AGS. It is this that led us to say that the treatmen....
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....ar source of income, i.e., other than, perhaps, agriculture income; his bank balance, which after the transfer of funds received from the Vendees, is at a paltry sum of Rs. 1234/-. In fact, the assessment of the salary income as business income, given the fact that there is no finding as to what that business is, is perhaps also not appropriate, so that the same ought to have been, in the strict sense, assessed as income from other sources. At the same time, the demand raised upon assessment stands satisfied. How could it be, if the assessee is indeed, as claimed, a man of no means? Though circumstantial evidence constitutes a good ground for inference as to ownership of an asset, i.e., of belonging to the assessee, or investment therein by him (C.K. Sudhakaran v. CIT [2005] 279 ITR 533 (Ker)), the other, overwhelming inference that arises is of the assessee being, on the contrary, a front man for others. The money, after all, could directly have exchanged hands between the owner and the Vendees. The amount disclosed as salary income could well be the commission income allowed to him for being an attorney, or for acting as a conduit of funds. The Revenue has not caused proper ve....
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....o the stated vendees, the assessee would be required to be confronted therewith; his explanation being proved false or incorrect. The assesssee shall, in that case, be required to state the truth; rather, substantiate it. It is in such an eventuality that the assessee's claim of being a man of no means, a contention raised for the first time before the ld. CIT(A) - who did not either examine or cause to examine the same and, besides, our observations of the arrangement appearing to be a ruse for some ulterior purpose; the assessee being a layman with no business experience, etc. shall assume significance. It could also be that there are some conditions attached on the transfer of a gas agency, hindering a free transfer thereof. The same, if so, should have been stated upfront. Further, even so, surely it is the vendees who, as the 'new owners', would be running the business, if only benami, which fact is also relevant. And which may perhaps also explain the second GPOA by the owner, i.e., even as the gas agency stands transferred. Clearly, therefore, some explaining in such a case would be required. In short, the taxability of the impugned sum in the assessee's hands is dependen....