COMMISSIONER OF INCOME TAX Vs. AVINASH KANT

JUDGEMENT

(1.) THIS appeal has been filed by the Revenue under S. 260A of the IT Act, 1961 (in short "the Act") against the order dt. 19th Oct., 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 asst. yr. 2006-07 claiming the following substantial questions of law :

(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 19th July, 2006 for the asst. yr. 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 AO had received information that during the year in question, the assessee had made deposits of Rs. 20.40 lacs in the Punjab State Co-operative 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 deposits were the income of the assessee as an individual. Accordingly, the AO 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 (Appeal) [in short the "CIT(A)"]. The CIT(A) vide order dt. 1st Oct., 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 dt. 19th Oct., 2010 upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeal by the Revenue.

(3.) 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 AO on appreciation of evidence came to the conclusion that the deposits made in cash in Punjab State Co-operative 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 :