Shri Rajbir Sharma, Kurukshetra V. ITO, Kurukshetra

ITA 298/CHANDI/2020

AI Insights

The case revolves around an appeal by Shri Rajbir Sharma against the order of the Commissioner of Income Tax (Appeals), Karnal, which confirmed the addition of Rs.34,78,500 to the assessee's income for the assessment year 2011-12. The addition was initially made by the AO on account of unexplained cash deposits in the assessee's bank account. The assessee contended that the deposits were proceeds from the sale of land, for which he held General Power of Attorney from his wife and mother. The CIT(A) upheld the AO's decision, leading to the present appeal. The Tribunal, after reviewing the evidence and submissions, found in favor of the assessee, noting that the AO had not pointed out any discrepancies in the documents provided.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127855 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 13-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “A” CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.298/CHD/2020 नधा रण वष / Assessment Year : 2011-12 Shri Rajbir Sharma, Bhagwan Nagar Colony, Pipli, Kurukshetra. बनाम The ITO, Kurukshetra. थायी लेखा सं./PAN NO: CEAPS1568H अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Neeraj Jain, CA राज व क! ओर से/ Revenue by : Shri Manveet Singh Sehgal, Sr.DR स ु नवाई क! तार&ख/Date of Hearing : 20.07.2023 उदघोषणा क! तार&ख/Date of Pronouncement : 07.08.2023 आदेश/ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 26.05.2020 of the Commissioner of Income Tax (Appeals), Karnal [in short ‘ the CIT(A)’] pertaining to 2011-12 assessment year. 2. The assessee in this appeal is aggrieved by the action of the CIT(A) in confirming the addition of Rs.34,78,500/- made by the Assessing Officer (in short ‘the AO’) on account of unexplained cash deposits in the bank account of the assessee. ITA No.298/CHD/2020 A.Y. 2011-12 Page 2 of 5 3. During the assessment proceedings, the assessee on being asked to explain, submitted that an amount of Rs.26,50,000/- was received as sale proceeds of land and further, another amount of Rs.5,46,000/- was received on sale of another land sold by the mother and wife of the assessee. That all these amounts were received by the assessee being General Power of Attorney of his wife and mother. The AO, however, noted that as per Registered Deed in respect of property sold as GPA holder, the entire sale proceeds were received on the date of registry i.e. on 07.07.2011, however, the amount in question was deposited in the bank account of the assessee during Financial Year 2010-11, therefore, the abovesaid amount was not available with the assessee as the registry was done subsequent to the deposit of the amount. Regarding availability of Rs.5,46,000/- AO noted that the assessee's wife in her own case for assessment year 2011-12 had replied that the said amount of Rs.5,46,000/- was spent by her for household requirements. The AO, therefore, made the impugned addition of Rs.34,78,500/-. 4. Before CIT(A), the assessee filed additional evidence to submit that another amount of Rs.21 lacs was received back on account of cancellation of the Sale Agreement from Shri Suresh Kumar and Shri Virender Kumar during the Financial Year ITA No.298/CHD/2020 A.Y. 2011-12 Page 3 of 5 2010-11. The assessee in this respect relied upon the following documents : i ) Copy of agreement dated 07.10.2008 tor purchase of land by Smt wife of the Rekha Sharma, wife of the assessee. ii) Copy of cancellation of agreement dated O8.10.2010 for purchase of land by Smt. Rekha Sharma. iii) Copy of suit for permanent injection in the court of Ld. Civil Judge, Kurukshetra as evidence of dispute in the family of sellers of land to Sml Rekha Sharma iv) Affidavit of Sh Suresh Kumar & Sh.Virender Kumar sons of Sh Bhartu Ram. v) Copy of sale deed dated 18.02.2008 as a proof of having fund for advancing of Biana on 07.10.2008. 5. The ld. CIT(A) called for remand report from the AO in this respect, however, the AO noted that earlier the assessee had claimed the receipt of Rs.26,25,500/- on account of sale of the land, however, now the assessee had come with the plea that an amount of Rs.21 lacs was received on account of refund of earnest money on cancellation of Sale Agreement and that the said plea of the assessee seems to be an after-thought. In response to the remand report of the AO, the assessee explained the total source of cash deposits as under : Respected madam during the year 2010-11 there are four sources of cash and all is not taxable, 1. Rs. 2100000.00 received from Suresh Kumar etc on account of refund of biana as per agreement dated 07/10/2008. Copy of agreement, affidavit from Suresh Kumar, is already submitted, 2. Received biyana of Rs. 1000000.00 for plot which is registered in 2011 but in registry it is wrongly written that the amount received on the table before registrar. 3 . Received Rs. 546000.00 on sale of plot by Rekha rani (assessee's wife). 4 . Cash withdrawal on earlier date from the bank and deposit thereafter in the bank. Cash flow statement is already submitted ITA No.298/CHD/2020 A.Y. 2011-12 Page 4 of 5 6. The ld. CIT(A) however, held that in the report of the AO, the flaws relating to the explanation have been duly noted by the AO. He, accordingly, confirmed the addition made by the AO. 7. We have heard the submissions and have gone through the record. Though the assessee, initially had claimed that the amount of Rs.26,25,000/- was received on account of sale proceeds of the land sold as GPA of Smt. Rekha Rani (wife), however, the assessee has specifically submitted that only Rs.10 lacs was received as Biana (earnest money) in respect of said Sale of land. Further, Rs.21 lacs were received from Shri Suresh Kumar on account of cancellation of the Sale Agreement. The assessee has duly furnished all the evidences on record. The AO in his remand report has not pointed out any discrepancy in the said documents. He has simply mentioned that the same seem to be after-thought and further that the plea of the assessee regarding the aforesaid amount of deposit of Rs.21 lacs may be considered on merits. The assessee herein is an agriculturist. It is not the case of the revenue that the assessee has any other source of income. The assessee has duly placed on file various documents from which he has shown the source of cash as received on account of sale of agriculture land etc. being GPA of his wife and mother. The assessee has also furnished Cash Flow Statement showing ITA No.298/CHD/2020 A.Y. 2011-12 Page 5 of 5 deposit and withdrawal on different dates. The ld. CIT(A) has not pointed out any defect or infirmity in the aforesaid evidences/explanation submitted by the assessee. We, therefore, do not find any justification on the part of the ld. CIT(A) in confirming the impugned additions. The same are, accordingly, ordered to be deleted. 8. In the result, appeal of the assessee stands allowed. Order pronounced in the Open Court on 07 th Aug., 2023. Sd/- Sd/- ( VIKRAM SINGH YADAV) लेखा सद य/ Accountant Member ( SANJAY GARG) या यक सद य/ Judicial Member “Poonam.” आदेशक! त,ल-पअ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु /त/ CIT 4. -वभागीय त न2ध, आयकर अपील&य आ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar