High Court Of Punjab & Haryana
Ishwar Chand Bansal vs. CIT & ANR.
Sections : 69, 260A
Asst. Year : 1991-92
Adarsh Kumar Goel & Rajesh Bindal, JJ.
IT Appeal Nos. 169 to 174 of 2005
11th July, 2006
Counsel Appeared
H.N. Mehtani, for the Appellant : S.K. Garg Narwana, for the Respondent
JUDGMENT
By the court :
This order will dispose of IT Appeal Nos. 169 to 174 of 2005. The facts are being taken from IT Appeal No. 170 of 2005.
2. This is an appeal filed by the assessee raising following substantial questions of law, arising out of common order passed by the Income-tax Appellate Tribunal, Chandigarh Bench ‘B’ (for short ‘the Tribunal’) in ITA Nos 310/Chd/2001 and 309/Chd/2001, dt. 10th March, 2004, for the asst. yr. 1991-92 :
“(i) Whether, on the facts and in the circumstances of the case, the learned Tribunal has erred in law in not considering the issue regarding examining the creditors, who had advanced the money to the assessee for booking the property, whereas specific directions were given in order passed under s. 144A of IT Act, 1961.
(ii) Without prejudice to the above, whether on facts and in the circumstances of the case, the learned Tribunal has committed an error of jurisdiction in holding that the surrender before the IT Department against the unexplained investment noticed during search proceeding was correctly adjusted during the immediately following year.”
3. Brief facts of the case are that the search and seizure operation was conducted at the business premises of M/s Kala Emporium, M/s Bansal Brothers and M/s Uphar Saree Centre on 19th May, 1992. During the search, certain documents were seized, which showed that the assessee along with other co-owners had constructed and sold shops in the form of shopping Complex at Delhi. The property on which the shopping complex was constructed was purchased by the co-owners on 26th Nov., 1987 for a sum of Rs. 5,17,690 and a sum of Rs. 7,39,680 was spent on construction during the year under assessment, i.e., asst. yr. 1991-92. Construction continued during the next two years and Rs. 16,94,310 and Rs. 3,09,500 were spent during asst. yrs. 1992-93 and 1993-94. A surrender of Rs. 10 lakhs was made for asst. yr. 1992-93 against investment in construction. No surrender was made for asst. yr. 1991-92. As per entry recorded at p. 5 of the document titled ‘Manju Register’ which was impounded by the AO during the course of search during asst. yr. 1992-93, a sum of Rs. 7,39,680 was invested from 12th Oct., 1990 to 31st March, 1991 on construction and 1/4th of the share of the assessee in the said investment comes to Rs. 1,84,920. It was further found that though the investment was made during the financial year 1990-91, but there was no withdrawal from the capital account. The plea of the assessee was that this investment was funded out of advance money received in cash from the prospective buyers who had booked shops in the shopping complex.a total of Rs. 7,40,000 was stated to have been received during the year in question. It was pleaded that the amount was received through Mr. Sukhmal Jain, a property dealer at Delhi, through whom the shops were booked. However, no details, etc., were furnished. The assessee even could not produce Mr. Sukhmal Jain to substantiate his plea. The affidavit got from Mr. Sukhmal Jain was rejected by the AO because of inconsistency noticed therein. Accordingly, the investment was treated as unexplained and added to the income of the assessee.
4. In appeal the case was remanded back by the Commissioner of Income-tax (Appeals) [for short ‘the CIT(A)’] on the ground that sufficient inquiry had not been made in the case. It was also opined that Commission should be issued to some other officer at Delhi to examine Mr. Sukhmal Jain. On opportunity having been granted, the assessee again pleaded that he was unable to produce Mr. Sukhmal Jain because of his ill-health and other personal reasons and a request was made for issue of Commission for recording his statement. However, none of the buyers was produced. Accordingly, a Commission was issued and statement of Mr. Sukhmal Jain was recorded on 21st Jan., 2000, who categorically denied having received any cash or passing thereof to the assessee. As the assessee failed to discharge the burden laid on him to prove the genuineness of the claim made by him, his share of unexplained investment was added to his income.
5. In appeal the CIT(A) accepted the contention of the assessee and deleted the addition. However, the Tribunal recorded the following findings while reversing the order of CIT(A) : “…..During this period total cost of construction of the shops was Rs. 7,39,680 and this fact has not been disputed before us. Now the only question is whether the contention of the assessee that source of the same was out of amounts received as advances against the sale of shops could be accepted. We may further mention that as per the provisions of s. 69 of IT Act, 1961, addition in respect of unexplained investment is required to be made in the financial year immediately preceding assessment year when such investment had been made and the same had not been recorded in the register of books of account of the assessee. Admittedly, if the source of investment made in the financial year 1990-91 relevant to asst. yr. 1991-92 is not explained, the addition of the same amount can only be made in the asst. yr. 1991-92. The assessee cannot take the benefit of the fact that in the subsequent year the assessee had made disclosure of income to cover such investment in the subsequent assessment year until or unless there is evidence that such payments have been made in the subsequent assessment year. No evidence, whatsoever, has been produced before us to show that the assessees had, in fact, received any advance on the sale of shops which was invested in the construction of shops. In fact, same issue came up before the Tribunal, Chandigarh Bench for asst. yr. 1992-93, in the cases of Smt. Ram Murti, Chandigarh and Dharam Chand Bansal in ITA Nos. 354 and 366 of 1995 and in the case of I.C. Bansal in ITA No. 353/Chd/1995. Similar submissions were made before the Bench. However, the Tribunal recorded a finding in para 8 of its consolidated order dt. 21st Aug., 2000 that there was absolutely no evidence in the seized document that assessee had received any advance prior to 7th Jan., 1992. Relevant findings recorded in para 8 of the aforesaid order are as under :
8. The next issue, which requires to be considered by the Bench is, whether the unexplained investment could be considered out of the profit realized on sale of shops. The learned CIT(A) has taken into account the actual date of first sale as on 7th Jan., 1992. There is absolutely no evidence in the seized documents that assessees have received any advance prior to 7th Jan., 1992. The learned CIT(A) has thereafter referred to the payments for cost of construction made during the period from 8th Jan., 1992 to 30th March, 1992 aggregating to Rs. 6,68,050. It is not the case of the assessees that out of the total cost of construction of Rs. 16,94,310 certain payments were outstanding, which were made in the subsequent year. No such submission has also been made in the written submissions filed before us. Admittedly, in the books of account, the assessees have accounted for cost of construction of Rs. 8.75 lakhs only. As regards the sale proceeds, which could be considered available for making the investments, would be only to the extent they were utilized for making such payments, which have already been taken into account by the learned CIT(A). In the absence of any further evidence, no further credit could be given on this account and the order of the learned CIT(A) is confirmed on this issue.’ We may mention that a copy of the said order was furnished before the Bench in response to directions given by the Bench. Thus, the submissions of the assessees that the assessees had received advances against sale of shops, has not been accepted by the Tribunal. Therefore, there is no question of allowing any credit for such amounts against cost of construction of shops in the accounting year relevant to asst. yr. 1991-92. It could be said that source of cost of construction made in the asst. yr. 1991-92 remains unexplained and as per the provisions of s. 69, addition of the same is liable to be made in this assessment year even though the amount available in the subsequent years would be considered sufficient to cover the cost of construction of Rs. 27,73,435. Thus, even if we ignore the evidence in the form of statement of Shri Sukhmal Jain, we are of the considered opinion that the learned CIT(A) was not justified in deleting the impugned additions. We set aside the orders of learned CIT(A) and restore that of the AO. Accordingly, all the grounds of appeal of the Revenue are allowed.”
6. Counsel has reiterated the same submissions which have been made before the Tribunal and were rejected. He has referred to the findings recorded by the CIT(A), which were reversed by the Tribunal. In our opinion CIT(A) had gone wrong while accepting the contention of the assessee that the surrender made by the assessee in subsequent year should be related back to the investment made in the previous year. The assessee was free to make surrender for the year in question as he was in knowledge of the fact as to in which year unexplained investment had been made by him. When stuck up in the web woven by the assessee himself by withholding true and correct picture of his income, he tried to wriggle out by taking pleas here and there. Such contentions cannot be accepted seeing the conduct of the assessee, the material on record and findings recorded by the Tribunal with which we are in complete agreement. Accordingly, no substantial question of law arises in the appeal and the same is dismissed.
7. Since we have dismissed the appeal on merits itself, we do not find any reason to condone the delay. Accordingly, the application for condonation of delay is also dismissed.
[Citation : 294 ITR 95]
