ITA No. 255 of 2011 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 255 of 2011 Date of Decision: 30.8.2011 Commissioner of Income Tax, Panchkula ....Appellant. Versus Shri Avinash Kant ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL, ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Senior Standing Counsel, for the appellant. AJAY KUMAR MITTAL, J. 1. This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 19.10.2010 passed by the Income Tax Appellate Tribunal, Chandigarh Bench “B”, Chandigarh (hereinafter referred to as “the Tribunal”) in ITA No. 1180/CHD/2009, for the assessment year 2006- 07, claiming the following substantial questions of law:- “i) Whether on the facts and circumstances of the case, the Hon'ble ITAT was right in law in deleting the addition of Rs.37,25,491/- without co-relating the deposits and withdrawals made in the bank account with the sale/purchases transactions of the HUF? ITA No. 255 of 2011 -2- ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law on facts in accepting the contention of the assessee that the transactions in the bank account of the assessee with Punjab State Cooperative Bank pertained to the property business of the HUF and not the assessee an individual although the copy of the bank account showed that it was opened in individual capacity showing income by way of 'Service' and not business?” 2. Put shortly, the facts of the case are that the assessee being an employee of the Haryana Government derived salary and filed his return on 19.7.2006 for the assessment year 2006-07 declaring an income of Rs.84,518/-. During the course of assessment proceedings, the statement of the assessee was recorded in which he is stated to have owned a saving bank account with State Bank of India, Main Secretariat Branch, Chandigarh. The Assessing Officer had received information that during the year in question, the assessee had made deposits of Rs.20.40 lacs in the Punjab State Cooperative Bank Ltd. The assessee was asked to explain the source of deposit of total of Rs.37,27,491/- in the said bank account. It was pleaded by the assessee that he had been making purchase and sale of property in his HUF capacity and filed certain copies of the sale and purchase agreements. It was noticed that the agreements for sale of properties were made by the assessee in his individual name and the bank account was also maintained in the individual capacity, therefore, all the ITA No. 255 of 2011 -3- deposits were the income of the assessee as an individual. Accordingly, the Assessing Officer made an addition of Rs.37,25,491/- in the returned income of the assessee. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [in short the “CIT (A)”]. The CIT(A) vide order dated 1.10.2009 deleted the said addition of Rs.37,25,491/- holding that the deposits made by the assessee had been separately assessed to tax and relates to HUF of the assessee and the same had been duly shown in the return filed in the status of HUF. Against the order of the CIT(A), the revenue approached the Tribunal by filing an appeal. The Tribunal vide order dated 19.10.2010 upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeal by the revenue. 3. We have heard learned counsel for the appellant. 4. The point for determination in this case is whether the CIT (A) and the Tribunal were justified in holding that the income declared by the assessee was income of HUF and not his individual income. The CIT(A) while reversing the findings of the Assessing Officer on appreciation of evidence came to the conclusion that the deposits made in cash in Punjab State Cooperative Bank related to the HUF of the assessee. The CIT(A) while recording a finding that it was HUF and not individual income had concluded as under:- “On careful consideration of the above facts and arguments, I find force in the arguments of the counsel for the appellant. The AO did not accept the contention of the appellant that the transactions in the bank account with Punjab State Co-op. Bank, ITA No. 255 of 2011 -4- Sector 34-A, Chandigarh relate to the HUF of the appellant as the agreements are in the individual name of the appellant and the amounts are not relatable to the creditors in the bank account, several amounts are credited to the bank account on a single day the bank account is not maintained in HUF capacity. There is force in the arguments of the counsel that not mentioning of the status does not alter the character of the property especially the source of funds and that the status of HUF is governed by the investments which were made out of HUF funds and the HUF can purchase property in the name of any member of family. The counsel produced books of account of the HUF and also copy of the return filed with ITO, Ward-5, Chandigarh in which the income from sale/purchase of properties has been shown. The counsel also filed narration of all the entries in the bank account. The AO has not brought any material on record to rebut this contention of the appellant and has not found any fault with the books of account. In view of the arguments of the counsel and the evidence produced by him, it is held that the transactions in the bank account with Punjab State Co-op. Bank, Sector 34A, Chandigarh relate to the HUF of the appellant, the income from which has been declared in the return of ITA No. 255 of 2011 -5- the HUF. The addition of Rs.37,25,491/- made by the AO is ordered to be deleted.” 5. On appeal by the revenue, the Tribunal affirmed the aforesaid finding with the following observations:- “We have heard the rival contentions and perused the records. The assessee has furnished on record the copies of return of income furnished in the status of HUF of the assessee relating to assessment years 1998-99 to 2000-01 along with computation of income at pages 17 to 22 of the paper book. The assessee has also furnished on record the details of sale and purchase of the property relating to the Financial Year 2005-06 along with the ledger account of sale property in the books of account of the HUF of the assessee at pages 15 & 16 of the paper book. The assessee has further filed the intimation issued u/s 143(1) of the Income Tax Act in the name of M/s Avinash (HUF) relating to assessment year 2006-07 at pages 14 of the paper book. The dispute arising in the present appeal is in respect of the transaction in the bank account with Punjab State Cooperative Bank Ltd. The claim of the assessee in respect of the said bank account is that the entries in the said account relate to business of sale/purchase of the properties being carried on by his HUF. The assessee had produced the books of account of the ITA No. 255 of 2011 -6- HUF before the CIT(A) which were examined by the CIT(A). Further, observation of the CIT(A) was that no fault was found by the Assessing Officer in respect of entries in the said books of account. The HUF of the assessee on the basis of the entries in the said books of account has furnished the return of income with ITO, Ward-5, Chandigarh in which income from sale/purchase of the properties were shown. The Ld. DR for the revenue has failed to bring on record any contrary findings to the findings of CIT(A) in this regard. In the entirety of the circumstances and the evidence produced by the assessee, we upheld the order of CIT(A) that in view of the evidence produced, the transactions in the bank account i.e. Punjab State Cooperative Bank Ltd. relates to the HUF of the assessee, income from which had been declared in the status of his HUF. There is no merit in including the said entries in the hands of the assessee. We confirm the order of CIT (A) in deleting the addition of Rs.37,25,491/-. The ground of appeal raised by the revenue is dismissed.” 6. No illegality or perversity has been pointed out in the aforesaid findings except an attempt is made on behalf of learned counsel for the appellant to persuade this Court to re-appreciate the evidence and record a different conclusion, which is not permissible ITA No. 255 of 2011 -7- under Section 260A of the Act in view of the concurrent findings recorded by the CIT(A) and the Tribunal. Thus, no question much less a substantial question of law arises in this appeal for consideration of this Court. 7. The appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE August 30, 2011 (ADARSH KUMAR GOEL) gbs ACTING CHIEF JUSTICE