TaxTMI 
TaxTMI 
2019 (9) TMI 1202
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.... unjustified." 3. Addressing the said ground, ld. AR drew attention to the facts as noticed and encapsulate by the CIT(A) in para 7 and 7.1 of the order. Inviting attention to the arguments advanced on behalf of the assessee, which have been extracted in para 7.2, the ld. AR placing heavy reliance thereupon submitted that these arguments are relied upon in the present proceedings also. Referring to the relevant pages of the Paper Book available on record which were relied upon before the CIT(A) also, it was submitted that these have been discarded by the tax authorities merely on presumptions and suspicions. 3.1 In the said background, inviting attention to the findings arrived at by the CIT(A) in para 7.3 of the order, it was his submission that the said conclusion based on suspicions is even otherwise contrary to facts and law. Carrying the Bench through the relevant submissions, findings and the conclusions, ld. AR submitted that the only issue which was required to be addressed by the assessee was the source of the deposits found reflected in his account. The assessee, it was submitted, had successfully explained deposits from Shri Jarnail Singh a close friend of his fath....
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....sion that it is a matter of fact that during this period, share market was performing well and as and when there were any profits, the amounts were handed over to Shri Jarnail Singh. This fact, it was submitted, has been accepted by the sole surviving child of Shri Jarnail Singh Smt. Tejinder Kaur. It was submitted that though the assessee is only required to address the source which stands established, the assessee, it was argued on the basis of the Affidavit of the sole surviving child of Shri Jarnail Singh could also establish that profits as and when due were paid to Shri Jarnail Singh. It had also been explained though not required under law that ultimately, there was a loss of about Rs. 39 lacs odd. The assessee's father being a close friend and feeling morally bound, returned part of the funds during the life time of Shri Jarnail Singh. Evidence to the said effect, it was submitted, has been placed on record by the assessee. Referring to Paper Book page 26 it was his submission that an amount of Rs. 3 lacs odd was returned after withdrawal on 08.06.2012 and an amount of Rs. 7 lacs odd was returned from the cash available at hand with Shri G.S.Virk who was a pension ho....
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....dered, then the AO may be directed to carry out an enquiry. The affidavit, it was submitted at this stage may not be accepted. 5. The ld. AR in reply submitted that the affidavit is available on record. It has been available to the tax authorities all along. The affidavit is dated 21.08.2015. The assessment proceedings after the issuance of notice u/s 148 for the transactions pertaining to 2012 commenced on 25.03.2017. Since the affidavit was available to the AO as well as the CIT(A), the tax authorities had ample opportunity to either call for the said lady or rebut the evidences filed. Thus, merely because it was argued that without assailing or examining the contents of the affidavit, the assessee should not be forced to go through the entire process. Some fact should be on record to justify such a prayer. It was re iterated that the sole issue for consideration is the deposit of Rs. 43,70,000/- in India Bulls account of the assessee. The assessee has consistently argued that these were funds available to the assessee from Shri Jarnail Singh a close family friend. The availability of funds with Shri Jarnail Singh has been demonstrated before the AO. It is not doubted by th....
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.... Rs. 74,70,000/-for making investment in share market and in Life Insurance respectively on his behalf. The assessee further stated that he invested Rs. 31,00,416/- in Kotak Life Insurance in the name of Sh. Jarnail Singh and an investment of Rs. 40,00,000/- was made in India Bulls Securities in his own name (on behalf of Jarnail Singh), in which there was a loss of Rs. 39,50,000/- while trading of shares of different companies hence, the amount was never returned. The assessee was asked to furnish documentary evidence regarding having received the advance of Rs. 43,70,000/- from Sh. Jarnail Singh but the assessee failed to adduce any evidence in this regard except saying that Sh. Jarnail Singh had verbally asked him to invest in shares on his behalf. The AO was of the opinion that the amount of Rs. 43,70,000/- deposited in this bank account by the assessee in cash is his own income earned by him from some undisclosed sources and out of which the amount of Rs. 40,00,000/- was invested by him in India Bulls Securities in his name. The amount has never been returned to Sh. Jarnail Singh. Had the amount of Rs. 43,70,000/- received in cash from Sh. Jarnail Singh the investment in India....
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....f the opinion that share market would increase his investment. Share market was at peak at that time. Mr Jarnail Singh was very old (85 years) and was unable to participate actively in the share market. Unfortunately, there was a loss in share market and Mr Jarnail Singh has to bear this loss. Mr Kamaldeep Singh was only an agent of Jarnail Singh acting on his behalf. As such this amount belonged to Mr Jarnail Singh. Mr.Kamaldeep Singh has nothing to own this amount or got any profit.However, Mr Gurdeep Singh Virk father of Mr Kamaldeep Singh on moral responsibility of his friend paid him an amount ofRs. 10 lakh out of his pension account on 8.6.2012. After getting this amount and also Rs. 31 lakh by cheque on account of Insurance, Mr Jarnail Singh issued receipt having cleared full and final amount due. The Assessing Officer has accepted having paid by Mr Jarnail Singh an amount of Rs. 31 lakh on account of insurance which he received back by cheque from company. As this amount of Rs. 31 lakh has been accepted by AO is included in the total amount of Rs. 74,70,000 paid to Mr Kamaldeep in cash after withdrawing it from bank out ofRs. 75 Lakh. Partial acceptance is without any basis....
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....hased the insurance policy in the name of Sh. Jarnail Singh of Rs. 31,00,000/- and therefore the AO has accepted the source of this deposit of Rs. 31,00,000/- on 27.10.2009 has explained. The cash deposit of Rs. 43,70,000/- on 16.10.2009 was used to invest Rs. 40,00,000/- in India Bulls Securities in the name of the assessee himself. It has been claimed by the assessee that this investment was made on behalf of Sh. Jarnail Singh but no evidence in this regard has been provided. It is also claimed that subsequently there was a loss of Rs. 39,50,000/- in trading of shares but no evidence in this regard has also been provided. It is further stated that in view of the Rs. 43,70,000/-received from Sh. Jarnail Singh the father of the assessee Sh. Gurdeep Singh Virk paid Rs. 10,00,000/- to Sh Jarnail Singh on 08.06.2012. No evidence in this regard to show that any money was returned to Sh. Jarnail Singh and the said money was in lieu of the Rs. 43,70,000/received from him by his son was provided. The affidavit of daughter of Shri Jarnail Singh, Smt. Tejinder Kaur has been provided which states that the said money was provided by her father to the assessee. It is further stated in the said....
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....bility of the stated funds from unimpeachable sources, it is seen is a fact available in the assessment order itself. These are evidenced from un-numbered page 2 from the assessment order and are reproduced hereunder again for the sake of completeness: "2. During the year under consideration the assessee has made cash deposit of Rs. 43,70,000/- on 16.10.2009 and Rs. 31,00,000/- on 27.10.2009 in his bank account No. 56501 0037399 maintained with Kotak Mahindra Bank, Sector 8 Chandigarh. The assessee was required to explain the sources of the said cash deposit. In reply, it has been stated that one Sh Jarnail Singh advance him the impugned cash of Rs. 43,70,000/- and Rs. 31,00,000/-totaling Rs. 74,70,000/- for making investment in share market and in Life Insurance respectively on his behalf. It has been stated that the assessee invested Rs. 31,00,416/- in Kotak Life Insurance in the name of Sh. Jarnail Singh and investment of Rs. 40,00,000/- was made in India Bulls Securities in the name of the assessee himself. In order to confirm and verify the cash receipt of Rs. 74,70,000/- from Sh. Jarnail Singh and the sources of cash with him. (Jarnail Singh), statement of t....
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....tely for concealment of income." 6.4 On a reading of the above, it is seen that consistently the assessee has argued that the funds were sourced from the funds available with Shri Jarnail Singh. The source of the funds with Shri Jarnail Singh admittedly is impeccable as these were received on 09.10.2009 from the Collector, Land Acquisition, Urban Development, Punjab totaling to Rs. 1,07,92,968/-. It is a fact that the proceedings before the AO started as a result of notice issued u/s 148 dated 25.03.2017. It is seen that for this purpose when the assessee was required to justify the receipt of cash amounting to Rs. 74,70,000/- from Shri Jarnail Singh, the AO as per para 2 of his order, as extracted herein above, is found to have recorded the statement of Shri Kamal Deep Singh Virk i.e. the assessee. It is seen that nothing adverse or contrary was noticed by the AO. The AO after having recorded his statement considering the further supporting evidences relied upon before him, held in para 2.1 that in response to the requirement of furnishing documentary evidences demonstrating advance of Rs. 43,70,000/- from Shri Jarnail Singh, ".........the assessee failed to adduce any evide....
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.... have not been upset by any counter evidence or argument except suspicions. Shri Jarnail Singh's daughter Ms. T.Kaur confirms it on Affidavit. In the facts of the present case, admittedly the evidence of Shri Jarnail Singh cannot be taken on record as he has expired much before the issuance of notice as per copy of the Death Certificate available on record. It is seen that Shri Jarnail Singh expired on 31.08.2012. In this background the affidavit of Ms. Tejinder Kaur, daughter of Shri Jarnail Singh is available on record. The contents of the affidavit are reproduced hereunder for the sake of convenience : AFFIDAVIT I, Tejinder Kaur D/o Late S. Jarnail Singh, W/o Capt. Harveer Singh, R/o House No. 41, Phase 3B-1, SAS Nagar Mohali, do hereby solemnly affirm and declare as under: - 1. That I am the only living child of my parents. 2. That PUDA had acquired the agricultural land of my father Late S. Jarnail Singh and given him a cheque No. 262243 dated 6.10.2009 amounting to Rs. 1,07,92,968/-. 3. He deposited this cheque in his S.B. A/c No. 27800100000840 in the Bank of Baroda, Phase-IX, Mohali. 4. That my father was a lever patient an....