Vildirect: IncomeTax-caselaws-2018-VIL-1669-ITAT-CHD

2018-VIL-1669-ITAT-CHD

Income Tax Appellate Tribunal CHANDIGARH

CO No. 25/CHD/2017 In ITA No 424/CHD/2017

Date: 04.01.2018

THE ITO, WARD-1, MALERKOTLA

SHRI JAGDEV SINGH, S/O SHRI INDER SINGH AND VICE-VERSA

BENCH

MS. DIVA SINGH, JUDICIAL MEMBER

JUDGMENT

The present appeal has been filed by the Revenue assailing the correctness of the order dated 23.12.2016 of ld. CIT (Appeals)-2 Ludhiana pertaining to 2012-13 assessment year on the following grounds :

1. Whether in the circumstances of the fact of the case and in law, the Ld.CIT(A)-2, Ludhiana was right in deleting the addition of Rs. 45,00,000/- made on account of unexplained income from undisclosed sources.

2. Whether in the circumstances of the fact of the case and in law, the Ld.CIT(A)-2, Ludhiana was right in admitting the copy of sale agreement of land as valid proof of cash deposits by ignoring the Registered Deed of sale of land.

3. The ld. Sr.DR placed reliance upon the assessment order. The said order, it is noticed has been passed u/s 144 of the Act wherein for want of necessary proof in regard to sale of specific agricultural land where in the bank account of the assessee, cash deposits totaling Rs. 45 lacs were noticed ( Rs. 9,00,000/-+ Rs. 9,00,000/- + Rs. 9,00,000/- + Rs. 9,00,000/- + Rs. 9,00,000/- ). Since the assessee initially failed to submit any evidence before the AO, an ex-parte order leading to the addition of the said amount was made in the hands of the assessee. Referring to the impugned order, it was submitted, that the CIT(A) has accepted that the said amount was an advance in respect of sale of the specific property which claim though was made before the AO, however, proof was not filed. The CIT(A) admitted fresh evidence which consisted of the following documents and remanded them to the AO :

1. Copy of sale agreement of land

2. Copies of (English translated) registries of land

3. Copy of Bank statement of Punjab National Bank and State Bank of Patiala

3.1. The AO in the remand proceedings considering the facts and evidences accepted that this was an advance for the sale of specific property. For ready reference, the relevant portion of his Remand Report is reproduced hereunder:

“From the foregoing facts and on the basis of additional evidence furnished by the assessee, it appears that the assessee had made cash deposits of Rs. 45,00,000/- in his saving bank account with SBOP at village Jattuan, Tehsil – Dhuri out of his sale proceeds of agricultural land sold at village Jattuan, Tehsil Malerkotla.”

3.2 Considering the said fact, relief was granted by the CIT(A) to the assessee which is under challenge in the present proceedings.

4. The ld. Sr.DR relied upon the assessment order.

5. The ld. AR on the other hand, relied upon the impugned order. Heavy reliance was placed on para 4.5 to 4.7 of the impugned order. The said paras are reproduced hereunder for ready reference :

“4.5 I have carefully considered the appellant's submission. During the course of appellate proceedings, the Appellant contended that he had deposited of Rs. 45,00,000/- on dated 14.11.2011 in account no. 65070334459 maintained with State Bank of Patiaia- Malerkotla branch, was against advance payment received as per agreement for sale of agriculture land situated at Village Jattuan, Malerkotla executed between appellant and Sh. Rachpal Singh S/o Sh. Chanranjit Singh. Copy of agreement dated 13.11.2011 was also produced by the appellant during the course of appellate proceedings. Persual of copy of agreement, it was noted that the sale deed would have been executed on dated 21.11.2011 and 21.03.2012. The appellant produced the copy of sale deed dated 21.11.2011 and 21.03.2012 of Rs. 2,56,50,000/- and 2,39,40,000/- executed between the appellant and Sh. Rachpal Singh S/o Sh. Chanranjit Singh. The appellant further contended that he had received Rs. 2,59,50,000/- and Rs. 1,94,40,000/- through RTGS and credited to the bank account No. 0309000102044528 maintained with Punjab National Bank, Kharar main Branch. The appellant further contended that as against the second deed executed on 21.03.2012, he received Rs. 1,94,40,000/- after adjusting Rs. 45.00.000/- already received at the time of agreement dated 13.11.2011.

4.6 The AO vide his remand report has also verify the contention of the appellant and agreed that amount of Rs. 45.00 lacs is on account of advance payment for same of agricultural land situated at Village Jattuan, Malerkotia, which has not been considered by the AO without going into the facts of the case, the assessment was completed u/s 144 of the Income Tax Act, 1961.

4.7 Keeping in view of all the facts and circumstances of the case, I am inclined to agree with the contention of the appellant. The appellant has fully justified his contention that he had deposited Rs. 45,00,0007- on 14.11.2011 in account no. 65070334459 maintained with State Bank of Patiala- Malerkotia branch as against the advance received in cash as per agreement dated 13.11.2011. Therefore, the disallowance made by the AO is deleted. This ground of appeal is allowed.”

6. I have heard the submissions and perused the material available on record. As noticed from the extract of the remand report of the AO extracted in para 4.3 of the impugned order which extract has also been reproduced in para 3.1 of this order. I find that the AO after having satisfied himself about the source of deposits as having been sourced from the advance received for sale of a specific agricultural land sold by the assessee, cannot thereafter have any grievance against the order passed which has relied upon his own Remand Report. Consequently, the occasion to file an appeal against the consequential relief does not arise. It is noted that the evidence relied upon has not been rebutted. The assessee in the facts of the present case, admittedly has pleaded that he only has agricultural income which has been accepted by the AO also as per page one of his order. The following facts and submissions relied upon by the assessee also are not disputed :

1. Assessee entered into an agreement for sale of 58 Bighas of agricultural land at village Jattuan., tehsil Malerkotla. Punjab for an total consideration of Rs. 495.90 lacs on 13.11.2011 (copy of agreement annexed herewith Annexure A.)

2. That a sum of Rs. 45.00 Lacs was received as advance which was deposited in the bank account no. 65070334459 maintained with State Bank of Patiala - Malerkotla Branch, dated 14.11.2011.

3. Part registry of the agreed to be sold vide agreement dated 13.11.2011 was got registered on 21.11.2011 and an amount of Rs. 256.00 lacs was received by way of RTGS and credited to the bank account no. 65070334459 maintained with State Bank of Patiala- Malerkotla Branch dated 21.11.2011 (Copy of registry annexed herewith Annexure B).

4. Remaining part of the land was got registered on 21.03.2012 for an amount of Rs. 239.40 lacs out of which an amount of Rs. 45.00 lacs of advance received on 13.11.2011 was adjusted and remaining amount of Rs. 194.40 lacs was received by way of RTGS and credited to the bank account no. 65070334459 maintained with State Bank of Patiala - Malerkotla dated 21.03.2012 (copy of registry annexed herewith Annexure C).

6.1 Considering the submissions, facts and findings arrived at in para 4.5 to 4.7 of the CIT(A), I find no merit in the departmental appeal. Being satisfied by the reasoning and the finding arrived at in the facts which remain unrebutted on record, the appeal of the Revenue is dismissed.

7. Though the ITAT has the powers to impose costs, however the exercise of the power is refrained from. However, it is hoped that the administration vigorously ensures that the Officers are advised and instructed to exercise their discretion fairly and judiciously in not filing appeals frivolously. It is noted that the administrative checks and balances put in place by the Department for ensuring that frivolous appeals are not filed, do not appear to be working. Care should have been taken to note that the issue had been given up in the Remand Proceedings by the AO. In these circumstances, without assailing the facts and evidences, appeal should not have been filed mechanically. It is seen that the present appeal has been filed with the approval of Pr. CIT-2 Ludhiana. It not only demonstrates that the approval has been given mechanically, it also erodes the trust reposed by the tax payer in the fairness of the administration. Filing of such frivolous appeals reflects poorly on the departmental mindset and gives unwanted strength to the ever increasing cynical belief that the administrative set up works mindlessly challenging any and every relief granted by an authority in accordance with law. Still more needs to be done to reign in the desire to show higher efficiency by concerned officials by filing a higher number of appeals. The mindless adherence to targets can cause irreparable havoc in the faith of the citizens in the administrative set up which should be avoided and obhored at all costs. A positive affirmative atmosphere may need to be created encouraging the concerned officials to bloom in a fearless atmosphere of trust and confidence in their functioning balanced with clear and unambiguous instructions that filing of frivolous appeals shall be viewed strictly and negatively. The message has to be clearly sent that filing of appeals mindlessly would be viewed and considered to be an act of inefficiency or dereliction of duty and not higher efficiency. Forcing the tax payer to go through the trouble of engaging a lawyer and incurring unnecessary costs to defend a relief granted wherein the AO has unambiguously accepted the evidence in the Remand Report gives rise in the public mind to seeds of State alienation. Such an act severely erodes the trust and implicit faith which the tax payer generally reposes in the Assessing Officer to always act fairly and impartially in a democratic India. The tax administration works for the government of India and cannot be allowed to be viewed as an agent of an alien State which was the case of pre independence India.

8. The Cross Objection filed by the assessee wherein no specific argument was advanced, is also dismissed.

9. In the result, the appeal of the Revenue and Cross Objection of the assessee are dismissed.

Order pronounced in the Open Court on 04 January,2018.

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