C I T Vs. RAM SINGH

JUDGEMENT

(1.) THIS appeal by the Revenue has been filed against the judgment of the learned Tribunal dated 4.2.2005, allowing the appeal of the assessee, and quashing the reassessment proceedings. The appeal was admitted vide order dated 23.5.2006, by framing the following substantial question of law: whether in the facts and in the circumstances of the case, the Tribunal was justified in holding that the proceedings for re -assessment under Section 148/147 of the Income Tax Act were initiated by the Assessing Officer on non -existing facts because ultimately, the assessee has been able to explain that the income which was believed to have escape assessment was explainable but some other additions were made under the assessment order?

(2.) THE necessary facts are, that some search was undertaken at some business establishment, and in that process one diary was found, which showed some entry regarding purchase of plot of land by the present assessee, in village 1 -a -Chhoti, for a consideration of Rs. 1,66,000/ -, while in the agreement, it was shown to have been purchased for Rs. 45,000/ -. On this basis, a notice under Section 148 was issued to the present assessee. Then query letters were also issued. The assessee appeared, and explained, that he purchased the plot from his agricultural income, and also submitted the requisite return, showing the agricultural income. Then his statements were also recorded, wherein he deposed, that he carries on agriculture and animal husbandry. However, the Assessing Officer summoned the books of accounts of the establishment, at whose premises search was undertaken, and found, that during the period 4.3.95 to 16.3.95, the assessee had deposited Rs. 1,65,000/ - cash, which the assessee has failed to explain, therefore, this amount was taken to be unexplained investment, and was added to income.

(3.) AGAINST this order, the assessee filed appeal before the learned Commissioner. The learned Commissioner in the order reproduced the books of M/s. Barar and sons, relating to the assessee, showing the credit and debit balances in the account of the assessee, and ultimately found, that during the relevant assessment year, the assessee purchased a plot for a sum of Rs. 1,60,000/ - and also spent some amount on construction of the rooms etc. Thus, withdrawals made were utilised towards acquisition of plot, as also on construction, and it cannot be said that substantial amount aggregating to Rs. 1,65,000/ - was still left with the appellant, so as to make deposits in cash with the firm within the short span of time, and thus, concluded, that the assessee has failed to prove the sources of deposits, aggregating to Rs. 1,65,000/ - in cash, with M/s. Barar and sons, and thus, the addition was upheld.