ITO, New Delhi V. Sh. Shyamvir Singh, Delhi

ITA 3033/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3225 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 25-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Opportunity of being heard; Cost of acquisition
• Section: 69

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH G, NEW DELHI BEFORE : SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 3033/DEL./2013 ASSESSMENT YEAR: 2009-10 INCOME - TAX OFFICER, WARD 36(4), NEW DELHI. (APPELLANT) VS. SH. SHYAMVIR SINGH, 15 GHARAULI VILLAGE VASUNDHRA ENCLAVE, MAYUR VIHAR-III, DELHI PAN-AOHPS9399R (RESPONDENT) REVENUE BY SH. KAUSHLENDRA TIWARI, SR. DR ASSESSEE BY SH. ARVIND KUMAR, ADVOCATE ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)- XXVII, NEW DELHI DATED 06.02.2013 FOR THE ASSESSMEN T YEAR 2009-10 ON THE FOLLOWING GROUNDS : (I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CTT(A) HAD ERRED IN RESTRICTING THE ADDITION OF RS.26,90,000/- TO RS.2,87,834/- MADE BY THE A.O. ON ACCOUNT OF CASH DEPOSITED IN STATE B ANK OF PATIALA, NEW DELHI TREATING THE SAME AS UNEXPLAINED.' (II) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN DELETING THE ADDITION OF RS.6 LACS MADE BY THE A.O. U/S 69 ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN CASH IN T HE PURCHASE OF AGRICULTURAL LAND.' (III) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN DELETING THE ADDITION OF RS.38,50,000/- MA DE BY THE A.O. U/S 69 ON DATE OF HEARING 30.11.2017 DATE OF PRONOUNCEMENT 26 .02.201 8 ITA NO. 3033/DEL./2013 2 ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF RESIDENTIAL PLOT IN ROHINI.' (IV) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. C1T(A) HELD IN PARA-26 OF HIS ORDER THAT AMOUNT OF COMPENSATION OF RS.26,90,230/- RECEIVED ON 07.10.2008 WILL BE TAXABLE AS LONG TERM CAPITAL GAINS AS AGAINST COMPENSATION TAXED UNDER THE HEAD BUSINESS BY THE A.O.' 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME ON 31.03.2010 DECLARING INCOME AT RS.54,570/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS ON THE BASIS OF AIR INFORMATION . SEVERAL NOTICES WERE ISSUED TO THE ASSESSEE, MOST OF WHICH REMAINED UNAT TENDED. FROM THE ATTENDING FACTS OF THE CASE AND ABOVE GROUNDS OF AP PEAL RAISED BY THE REVENUE, FOLLOWING ISSUES ARE INVOLVED IN THE PRESENT APPEAL FOR ADJUDICATION : (I). RESTRICTION OF ADDITION OF RS.26,90,000/- TO RS.2,87,834/- MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK AC COUNT. (II). DELETION OF ADDITION OF RS.6,00,000/- ON ACC OUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF AGRICULTURAL LAND IN CA SH. (III). DELETION OF ADDITION OF RS.38,50,000/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF RESIDENTIAL PLOT AT ROHINI. (III). TREATMENT OF COMPENSATION RECEIVED WORTH RS. 26,90,230/- AS LONG-TERM CAPITAL GAIN AS AGAINST BUSINESS INCOME T REATED BY A.O. 3. THE RELEVANT FACTS PERTAINING TO FIRST ISSUE ARE TH AT AS PER AIR INFORMATION, THE ASSESSING OFFICER NOTICED THAT THE RE WAS CASH DEPOSITS OF RS.26,90,000/- IN THE BANK ACCOUNT OF ASSESSEE BEAR ING NO. 55013164569 WITH STATE BANK OF PATIALA. ON BEING ASKED FOR THE NATURE AND SOURCE OF ITA NO. 3033/DEL./2013 3 DEPOSITS, THE ASSESSEE FILED A CASH FLOW STATEMENT, AS REPRODUCED IN THE IMPUGNED ORDER. THIS CASH FLOW STATEMENT, INTER ALI A, SHOWED AN AMOUNT OF RS.20,00,000/- ON 15.05.2008 IN CASH, WHICH THE ASS ESSEE EXPLAINED THAT IT WAS RECEIVED AS ADVANCE AGAINST SALE OF PROPERTY BE ARING NO. A-12/250, MEASURING 200 SQ. METERS, GHARAOLI EXTN., DELHI FOR A CONSIDERATION OF RS.50,00,000/-. IN SUPPORT, THE ASSESSEE FILED RECE IPT CUM AGREEMENT TO SALE DATED 15.05.2008 AND STATED THAT SINCE THIS DEAL WA S SUBSEQUENTLY CANCELLED, THE ASSESSEE RETURNED THE ADVANCE TO THE CUSTOMER I N CASH ON 17.10.2008 UNDER ANOTHER MUTUAL AGREEMENT. BOTH THESE AGREEMEN TS ARE PLACED AT PB-17 TO 21. THE ASSESSING OFFICER DID NOT ACCEPT THE CON TENTION OF THE ASSESSEE ON THE PREMISE THAT THE RECEIPT CUM AGREEMENT WAS MADE ON NON-JUDICIAL PAPER OF RS.10/- ONLY AND WAS NOT REGISTERED AS PER AMEND MENT IN REGISTRATION ACT W.E.F. 2008-09 AND THAT NO SALE OF THE PROPERTY WAS MADE. HE, THEREFORE, OBSERVED THAT THE NATURE AND SOURCE OF CASH DEPOSIT S IN BANK STOOD UNEXPLAINED AND ADDED THE SUM OF RS.26,90,000/- TO THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. THE LD . CIT(A) RESTRICTED THE ADDITION TO RS.2,87,834/- AFTER RELYING ON THE CASH FLOW STATEMENT AND THE AGREEMENTS SUBMITTED BY THE ASSESSEE. ITA NO. 3033/DEL./2013 4 4. THE LD. DR SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED TO RESTRICT THE ADDITION AFTER RELYING ON THE CASH FLOW STATEMENT O F ASSESSEE AND THE ALLEGED AGREEMENTS. THE ASSESSEE HAD BEEN GIVEN AMPLE OPPOR TUNITIES TO EXPLAIN THE NATURE AND SOURCE OF DEPOSITS, BUT HE FAILED TO DO SO. THE ALLEGED AGREEMENTS WERE NOT REGISTERED DOCUMENTS BUT WERE MADE ON NON- JUDICIAL PAPER OF RS.10/- NOTARIZED BY THE NOTARY. EXCEPT THESE DOUBT FUL AGREEMENTS, THE ASSESSEE HAD NOTHING TO SUBSTANTIATE THE ADVANCE AG AINST SALE CONSIDERATION AND RETURN THEREOF TO THE CUSTOMER. THE ASSESSEE WA S MAINTAINING THE BANK ACCOUNT, BUT HE DID NOT BOTHER TO REFUND THE AMOUNT BY WAY OF CHEQUE IN CASE THE DEAL WAS CANCELLED. HE, THEREFORE, URGED FOR SU STENANCE OF THE ASSESSMENT ORDER. 5. THE LD. AR, ON THE OTHER HAND, REITERATED THE SU BMISSIONS MADE BEFORE THE LD. CIT(A) AND RELIED ON THE IMPUGNED ORDER. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER DID NOT CONSIDER THE CASH WITHDRA WN FROM THE BANK ACCOUNT DESPITE ALL THE NECESSARY FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO NOT ASSIGNE D ANY REASON TO DISBELIEVE THE CASH FLOW STATEMENT SUBMITTED BEFORE HIM. ITA NO. 3033/DEL./2013 5 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF R ECORD REVEALS THAT THE ASSESSING OFFICER HAD RAISED A DOUBT ON THE UNREGIS TERED DOCUMENTARY EVIDENCES IN THE FORM OF RECEIPT CUM AGREEMENT TO S ALE AND CANCELLATION AGREEMENT AS NOTED ABOVE. HOWEVER, ONCE THE ASSESSI NG OFFICER CREATED A DOUBT ON THE SAID EVIDENCES, IT WAS INCUMBENT UPON HIM TO MAKE FURTHER ENQUIRY TO EXAMINE THE AUTHENTICITY OF THE SAID EVI DENCES AND TO MAKE ENQUIRIES FROM THE CUSTOMER SHRI AZAD SINGH IN ORDE R TO ASCERTAIN WHETHER THE SAID CUSTOMER ACTUALLY MADE CASH PAYMENT AND RECEIV ED IT BACK IN CASH. THE LD. CIT(A) APPEARS TO HAVE RELIED ON THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE. THE CASH FLOW STATEMENT IS PREPARED ON TH E BASIS OF BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND IN THE PRES ENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT THE ASSESSEE HAD MAINTAIN ED ANY BOOKS OF ACCOUNTS FOR THE YEAR UNDER CONSIDERATION. RATHER, THE LD. C IT(A) HIMSELF IN THE IMPUGNED ORDER HAS CATEGORICALLY MENTIONED THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. MOREOVER, THE LD. CIT(A) HAS CO-TERMINUS POWERS AS THAT OF THE ASSESSING OFFICER. THEREFORE, ONCE THE ASSESSING OFFICER HAD CREATED DOUBT ON THE AUTHENTICITY OF THE EVIDEN CES FILED BY THE ASSESSEE BEFORE HIM, IT WAS IMPERATIVE ON THE PART OF THE LD . CIT(A) EITHER TO MAKE PROPER ENQUIRIES TO EXAMINE THE VERACITY OF ASSESSE ES VERSION OR TO SEEK ITA NO. 3033/DEL./2013 6 REMAND REPORT FROM THE ASSESSING OFFICER IN THIS RE SPECT, WHICH IS LACKING IN THE PRESENT CASE. THEREFORE, RELIANCE ON THE CASH F LOW STATEMENT AND DOCUMENTARY EVIDENCES LAID BY ASSESSEE DOES NOT APP EAR PROPER WITHOUT EXAMINING AND ENQUIRING ABOUT THE HARD FACT FROM TH E SAID CUSTOMER - WHETHER HE PAID AND RECEIVED BACK THE ADVANCE IN CA SH, AS CONTENDED BY ASSESSEE. IN PRESENCE OF THESE FACTS, WE DEEM IT PR OPER TO REMIT THE CASE BACK TO THE ASSESSING OFFICER FOR DECIDING THIS ISSUE AF RESH AFTER MAKING PROPER ENQUIRIES, AS HE DEEMS FIT. NEEDLESS TO SAY, THE AS SESSEE SHALL BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD, WHO SHALL CO OPERATE WITH THE ASSESSING OFFICER AND MAY PRODUCE THE ALLEGED CUSTO MER IN ITS SUPPORT FOR EXAMINATION. ACCORDINGLY, GROUND NO. 1 IS ALLOWED F OR STATISTICAL PURPOSES. 7. THE BRIEF FACTS RELEVANT TO SECOND ISSUE ARE THA T THE ASSESSEE HAD MADE PAYMENT OF RS.6,00,000/- ON 20.10.2008 IN CASH TOWA RDS PURCHASE OF AGRICULTURAL LAND MEASURING 8 BIGA 6 VISHA & 15 BIS WANSHI SITUATED AT VILLAGE ASALTPUR KHURD NAZAFGARH. AGREEMENT TO SALE WAS MAD E FROM SIX PARTIES ON NON-JUDICIAL STAMP PAPER ON 18.12.2008 FOR A CONSID ERATION OF RS.60 LACS. AS PER CASH FLOW STATEMENT SUBMITTED, THE ASSESSEE HAD PAID RS. 6,00,000/- IN CASH ON 20.10.2008 AND RS.3,00,000/- BY WAY OF SIX CHEQUES BEARING NOS. 650541 TO 650546 ALL DATED 20.12.2008 DRAWN ON STAT E BANK OF PATIALA, ITA NO. 3033/DEL./2013 7 KONDLI, NEW DELHI. THE ASSESSING OFFICER NOTICED TH AT AS PER AGREEMENT TO SALE EXECUTED ON 20.12.2008, WHEREIN ALL PAYMENTS, I.E., RS. 6,00,000/- IN CASH AND RS. 3 LACS BY CHEQUES WERE SHOWN TO HAVE BEEN MADE ON 20.12.2008. THEREFORE, THERE BEING NO LINK BETWEEN THE ALLEGED CASH PAYMENT OF RS.600000/- ON 20.10.08 AS PER IN CASH FLOW STATEME NT AND THE CASH PAYMENT OF RS.6,00,000/- SHOWN TO HAVE BEEN MADE ON 20.12.2 008 AS PER AGREEMENT, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE N ATURE AND SOURCE OF THE CASH PAYMENTS OF RS.600000/- STOOD UNEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE. THE LD. CIT(A) DELETED THIS AD DITION. 8. THE LD. DR SUBMITTED THAT RS.6,00,000/- WERE SHO WN BY THE ASSESSEE TO HAVE BEEN PAID IN CASH ON 20.10.2008 TOWARDS PURCHA SE OF AGRICULTURAL LAND AT NAZAFGARH AS PER CASH FLOW STATEMENT, WHEREAS AS PE R AGREEMENT FOR PURCHASE, THE DATE OF PAYMENT HAS BEEN SHOWN AS ON 20.12.2008 . THE ASSESSEE WAS UNABLE TO EXPLAIN THE NATURE AND SOURCE OF INVESTME NT ON DIFFERENT DATES. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED TO M AKE ADDITION OF IT AS AN UNEXPLAINED INVESTMENT. THE LD. CIT(A) WRONGLY DELE TED THIS ADDITION WITHOUT CONSIDERING THE FINDINGS OF THE ASSESSING OFFICER. 9. THE LEARNED AR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. CIT(A). ITA NO. 3033/DEL./2013 8 10. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THERE IS SHARP CONTRADICTION IN THE DATES OF PAYMENT SHOWN AS PER CASH FLOW STATEMENT AND AS PER PURCHASE/SALE DEED. ON PERUSAL OF THE BANK STATEMENT, IT IS OBSERVED THAT THE ASSESSEE HAD WIT HDRAWN CASH OF RS.13 LACS ON 29.07.2008, RS.15 LACS ON 30.07.2008 AND RS.20 L ACS ON 13.10.2008. OUT OF THESE WITHDRAWALS, THE ASSESSEE HAS SHOWN TO HAVE M ADE PAYMENT OF RS.20 LACS TO SH. AZAD SINGH AS ALLEGED REFUND OF ADVANCE AS PER CANCELLATION AGREEMENT, NOTED ABOVE. ON PERUSAL OF AGREEMENT FOR PURCHASE OF AGRICULTURAL LAND FROM SIX PERSONS AT NAZAFGARH, THE ASSESSEE HA S SHOWN TO HAVE MADE PAYMENT OF RS.1 LACS EACH ON 20.12.2008. FIRSTLY, A S NOTED ABOVE, THE CASH FLOW STATEMENT GIVEN BY THE ASSESSEE IS NOT SUPPORTED BY ANY BOOKS OF ACCOUNT. SECONDLY, THE CONTENTION OF THE ASSESSEE THAT PAYME NT OF RS.6 LACS WAS MADE IN CASH OUT OF WITHDRAWALS FROM BANK ACCOUNT, IS NO T ACCEPTABLE BECAUSE IT IS NOT CREDIBLE TO HOLD THAT MUCH OF CASH FROM THE DA TE OF ITS WITHDRAWALS TO THE DATE OF ITS PAYMENT, WHICH IS SHOWN AS 20.12.2008 I N THE AGREEMENT, PARTICULARLY WHEN THE ASSESSEE WAS MAINTAINING THE BANK ACCOUNT. WE, THEREFORE FIND THAT THE LD. CIT(A) WAS NOT JUSTIFIE D IN DELETING THIS ADDITION WITHOUT CONSIDERING THE ATTENDING FACTS AND CIRCUMS TANCES OF THE CASE. IT IS ALSO NOT CLEAR WHETHER THE ALLEGED PAYMENT WAS MADE ON THE DATE AS ITA NO. 3033/DEL./2013 9 MENTIONED IN CASH FLOW STATEMENT OR AS MENTIONED IN AGREEMENT. ACCORDINGLY, GROUND NO. 2 OF THE REVENUE DESERVES TO BE ALLOWED. 11. THE FACTS RELATING TO THIRD ISSUE ARE THAT IN T HE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D MADE INVESTMENT IN PURCHASE OF PLOT AT ROHINI FOR RS.38,50,000/- ON 06 .06.2008. THE DETAILS OF VARIOUS PAYMENTS MADE ARE AS UNDER : S.NO. MODE OF PAYMENT & DATE AMOUNT SOURCE (A) P.O. NO- 0073010 08.04.08 14,48,200 OUT OF SAVING BANK ACCOUNT NO. 55013164569 WITH STATE BANK OF PATIALA, KONDLI BRANCH (B) P.O. NO- 007433 07.05.08 1,29,450 OUT OF SAVING BANK ACCOUNT NO. 55013164569 WITH STATE BANK OF PATIALA, KONDLI BRANCH (C) CHEUQUE 650538 16.05.08 64,354 OUT OF SAVING BANK ACCOUNT NO. 55013164569 WITH STATE BANK OF PATIALA, KONDLI BRANCH (D) CASH ON 06.06.08 22,07,996 (OUT OF CASH IN HAND OF RS. 24,89,248/- AS ON 5-6-0 8 AS PER CASH FLOW STATEMENT. TOTAL 38,50,000 THE AGREEMENT TO SALE AND PURCHASE DEED IS PLACED A T PB-22 TO 34. THE STAMP DUTY HAS BEEN PAID OF RS.2,31,000/-. THE OBSERVATIO NS OF THE ASSESSING OFFICER ARE UNDER : THE ASSESSEE HAS TRIED TO GIVE A COLORABLE DEVICE BY TREATING THE ADVANCE WHICH APPEARS TO BE SHAM TRANSACTION. KEEPING THE ABOVE FA CTS JUST AS TO EXPLAIN THE SAME AS INVESTMENT IN PURCHASE OF PROPERTY ON 06.06.08 I.E. PLOT AT ROHINI (PLOT BEARING NO. 39, BLOCK, C, POCKET , A-L, AREA MEASURING 209 SQ MTRS SECTOR 32. THE RECEIPT IN RESPECT OF PURCHASE OF PLOT AT ROHINI INDICATE AS UNDER:- THE PERUSAL OF THE ABOVE FACTS REVEALS THAT PAY ORD ER AMOUNTING TO RS. 14,48,200 + RS. 1,29,450 = RS. 15,77,650/- HAS BEEN MADE TO DDA. THI S APPEARS EITHER SAME DUES WERE DUE TO THE ASSESSEE WHICH HAS BEEN PAID BY ASSESSEE ON BEHALF OF THE SELLER. NO SOURCE OF INVESTMENT HAS BEEN EXPLAINED INSPITE OF THE FACT TH AT THE ASSESSEE WAS AGAIN AND ITA NO. 3033/DEL./2013 10 AGAIN ASKED TO FURNISH THE BANK STATEMENTS WITH NARR ATION AND SOURCES OF INVESTMENT. AS PER RECEIPT FILED, IT SHOWS THAT A SUM OF RS. 64 ,354/- HAS BEEN PAID VIDE CHEQUE NO. 650538 ISSUED BY S.B.P IN FAVOUR OF COLLECTOR OF ST AMPS, VIKAS SADAN. THE AGREEMENT TO SELL MADE AND EXECUTED SHOWS THE COST OF CONSIDERAT ION AT RS. 38,50,000/-AND PAID RS. L,15,500/- AS STAMP DUTY AND RS. 1,15,500/- AS CORP ORATION TAX. THUS THE TOTAL PAYMENT OF RS. 2,31,000/- ON STAMP PAPERS WERE MADE BY THE ASSESSEE. THE RECEIPT SHOWS ONLY 64,354/- BY CHEQUE. THE REMAINING EXPENDITURE ON ST AMP DUTY I.E. RS. 2,31,000 (-) 64,354/- = RS. 1,66,646/-REMAINED UNEXPLAINED EXPEN DITURE. THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE. AS THE ASSESSEE HAS FURNISH ED INACCURATE PARTICULARS OF HIS INCOME THE PENALTY PROCEEDINGS U/S 271(1)(C) INITIATED SEPARATELY . BESIDES, THE FACTS DISCUSSED ABOVE, THE INVESTMENT I N PURCHASE OF PLOT AT ROHINI ALSO REMAINED UNEXPLAINED IN VIEW OF THE FACTS STATED ABO VE, HENCE THE INVESTMENT IN THE PURCHASE OF PLOT REMAINED UNEXPLAINED AND THE INVES TMENTS IS RS. 38,50,000/- MADE IN THE PROPERTY IS ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT. SINCE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS I NCOME, PENALTY PROCEEDINGS U/S 271(1) IS INITIATED SEPARATELY. ADDITION : RS. 38,50,000/- THE LD. CIT(A) DELETED THIS ADDITION, OBSERVING AS UNDER :- 20. I HAVE CONSIDERED THE APPELLANT'S SUBMISSIONS, THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AND THE FACTS OF THE CASE. AS FAR AS THE PAYMENT OF RS. 14,48,200/-, RS. 1,29,450/- AND RS.64,354/- IS CONCERNED, IT IS SEEN THAT THE SAME HAS BEEN PAID THROUGH CHEQUES FROM THE SAVING BANK ACCOUNT OF THE APPELLAN T WITH STATE BANK OF PATIALA, KONDLI WHERE ALL THESE PAYMENTS ARE DULY REFLECTED. ALL THE CREDIT ENTRIES IN THIS ACCOUNT HAVE DULY BEEN DISCUSSED AND APPROPRIATE INF ERENCE HAS BEEN DRAWN AS DISCUSSED UNDER GROUND NO. 2, WITH REGARD TO THE RE MAINING PAYMENT OF RS. 22,07,996/-PAID IN CASH ON 0570672008 IT IS SEEN TH E SAME HAS ALREADY BEEN DISCUSSED ABOVE UNDER GROUND NO. 2 WHILE CONSIDERING THE CASH AVAILABILITY AS ON 27.07.2008 AND APPROPRIATE ADDITION HAS ALREADY BEEN MADE ON ACCOUN T OF UNEXPLAINED CASH INVESTMENT IN THIS PAYMENT. THEREFORE NO ADVERSE IN FERENCE WAS REQUIRED TO BE DRAWN WITH RESPECT TO INVESTMENT OF RS. 38,50,000/- IN TH E PURCHASE OF THE RESIDENTIAL PLOT AT ROHINI. THE ADDITION OF RS. 38,50,000/- MADE ON THI S ACCOUNT IS THEREFORE, DELETED. 12. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE HAS TRIED TO EXPLAIN THE CASH AVA ILABILITY WITH HIM FROM THE CASH FLOW STATEMENT. IT WAS SUBMITTED THAT THE ASSE SSEE HAS MADE PAYMENT IN CASH ON 06.06.2008 AND HAS SHOWN TO HAVE RECEIVED C ASH OF RS.20 LACS FROM ITA NO. 3033/DEL./2013 11 AZAD SINGH ON 15.05.2008. THIS RECEIPT WAS DOUBTED BY THE ASSESSING OFFICER FOR CREDIBLE REASONS. THEREFORE, THERE WAS NO SUFFI CIENT CASH AVAILABLE WITH HIM AND THE ASSESSING OFFICER WAS JUSTIFIED TO MAKE ADDITION. 13. THE LD. AR, ON THE OTHER HAND, RELIED ON THE OR DER OF THE LD. CIT(A). 14. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTI ES AND HAVE GONE THROUGH THE RECORD. WE FIND THAT THE ASSESSEE HAD M ADE PAYMENT TO THE VENDOR BY CHEQUES WHICH HAVE BEEN DULY DEBITED IN H IS BANK PASSBOOK AS NOTED ABOVE. FURTHER THE ASSESSEE HAS MADE PAYMENT ON 06.06.2008 OF RS.22.07.996/- IN CASH. THE AVAILABILITY OF FUNDS T O MAKE THIS CASH PAYMENT IS BASED ON THE CASH FLOW STATEMENT, WHICH, AS ALREADY NOTED, IS NOT BASED ON ANY BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. SECOND LY, THE RECEIPT OF RS.20 LACS FROM SHRI AZAD SINGH ON 15.05.2008 HAS NOT BEE N ESTABLISHED BY THE ASSESSEE TO BE THE GENUINE RECEIPT AND WE HAVE ALRE ADY RESTORED THAT ISSUE TO THE ASSESSING OFFICER WHILE DECIDING GROUND NO. 1 O F THE REVENUES APPEAL. THEREFORE, UNLESS THE RECEIPT OF RS.20 LACS AS SHOW N IN THE CASH FLOW STATEMENT, STANDS VERIFIED AT THE STAGE OF ASSESSIN G OFFICER, THE EXPLANATION OF THE ASSESSEE REGARDING AVAILABILITY OF CASH FOR MAK ING PAYMENT OF RS.22,07,996/- CANNOT BE ACCEPTED. IN VIEW OF THIS, WE DEEM IT APPROPRIATE TO ITA NO. 3033/DEL./2013 12 RESTORE THIS ISSUE ALSO TO THE FILE OF ASSESSING OF FICER FOR DECIDING THE SAME AFRESH AFTER MAKING PROPER ENQUIRY ON THE GENUINENE SS OF RECEIPT OF RS.20 LACS FROM AZAD SINGH. IN CASE THE AMOUNT OF RS.20 LACS I S FOUND ACTUALLY RECEIVED BY THE ASSESSEE, THE CONTENTION OF ASSESSEE WITH RESPE CT TO THIS ISSUE SHALL STAND ACCEPTED. OTHERWISE, THE ASSESSING OFFICER SHALL AC T AS PER LAW. ACCORDINGLY, THIS GROUND OF APPEAL IS ALSO ALLOWED FOR STATISTIC AL PURPOSES. 15. REGARDING THE LAST ISSUE, THE FACTS ARE THAT TH E ASSESSEE CLAIMED EXEMPTION ON RECEIPT OF RS.26,90,230/- U/S. 10(37) OF THE ACT ON THE PREMISE THAT THE ASSESSEE HAD RECEIVED RS.26,90,230/- AS PA RT OF COMPENSATION OF AGRICULTURAL LAND AT KONDLI MEASURING 6 BIGHAS 10 B ISHWAS IN WHICH THE SHARE OF ASSESSEE WAS TO THE TUNE OF ONE BIGHA TEN BISWA. THE SAID PROPERTY WAS ALREADY IN POSSESSION OF DDA AS THEY HAD TAKEN ITS POSSESSION AT THE TIME OF ENHANCEMENT OF AWARD NO. 4/7980 ON DATED 22.05.79 W HEN THE AWARD WAS ANNOUNCED FOR THE LAND AREA MEASURING 3 BIGHAS 10 B ISHWA, BUT THE PHYSICAL POSSESSION OF TOTAL LAND AREA MEASURING 9 BIGHAS 18 BISHWA OF KHASRA NO. 670/414/2 WAS TAKEN OVER BY THE GOVERNMENT AUTHORIT Y. THE ASSESSING OFFICER APPLYING THE PROVISIONS OF SECTION 10(37) O BSERVED AS UNDER : WHERE THE COMPULSORY ACQUISITION HAS TAKEN PLACE BEF ORE 01.04.2004, BUT THE COMPENSATION IS RECEIVED AFTER 31.03.2004, IT SHALL BE EXEMPT. BUT IF PART OF ORIGINAL COMPENSATION IN THE ABOVE CASE HAS ALREADY BEEN RECEI VED BEFORE 01.04.2004 THEN EXEMPTION SHALL NOT BE AVAILABLE EVEN THOUGH BALANCE ORIGINAL COMPENSATION IS ITA NO. 3033/DEL./2013 13 RECEIVED AFTER 31.03.2004. HOWEVER, ENHANCED COMPEN SATION ON OR AFTER 01.04.2004 AGAINST AGRICULTURAL LAND, COMPULSORY ACQUIRED BEFOR E 01.04.2004 SHALL BE EXEMPT. AS THE CONDITION LAID DOWN U/S. 10(37) OF THE INCOM E TAX ACT, 1961 ARE NOT FULFILLED BY THE ASSESSEE IN NO CASE CAN CLAIM EXEMPTION OF THE COMPENSATION RECEIVED BY HIM, BECAUSE OF FACTS THAT : A) HE WAS NOT OWNER OF THE AGRICULTURAL LAND; B) NO AGRICULTURAL PRODUCES WERE MADE BY THE INDIVIDUA L PRECEDING TWO YEARS BEFORE THE ACQUISITION OF LAND. C) THE LAND WAS ACQUIRED AFTER 01.04.2004. THE ASSESSING OFFICER, ACCORDINGLY, DISALLOWED RS.2 6,90,230/- TREATING IT AS UNEXPLAINED INCOME FROM BUSINESS. THE LD. CIT(A) TR EATED THIS AMOUNT AS LONG-TERM CAPITAL GAINS TAXABLE IN THE HANDS OF ASS ESSEE. 16. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTI ES AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE FINDINGS OF THE LD. CIT(A) ARE REPR ODUCED AS UNDER : 26. I HAVE CAREFULLY CONSIDERED THE APPELLANT'S SUBM ISSIONS, THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AND THE FACTS OF THE CASE. AS FAR AS THE APPELLANT'S CONTENTION THAT HE HAD PURCHASED THE LAND UNDER CONSIDERATION IN THE YEAR 2001 IS CONCERNED, IT IS SEEN THAT THERE IS NO DOCUMENTARY EVIDENCE ON RECOR D IN SUPPORT OF THE SAME. THEREFORE, DATE OF ACQUISITION BY THE APPELLANT WOU LD THE DATE ON WHICH HE ACQUIRED THE ASSIGNMENT RIGHTS IN THE PROPERTY I.E. 23/09/20 04 ON WHICH DATE HE ENTERED INTO AN AGREEMENT WITH THE OWNERS OF THE LAND. THE TOTAL CO NSIDERATION PAID BY THE APPELLANT ALONG WITH THE OTHER THREE PERSONS WHO HAD BOUGHT TH E ASSIGNMENT RIGHTS OF THE PROPERTY IS RS. 19,10,000/- PLUS STAMP DUTY OF RS. 95,500/- I.E. RS. 20,05,500/-. THIS AMOUNT WAS THE COST OF THE TOTAL LAND MEASURING 6 BI GSA 7 BISWAS. THE APPELLANT'S SHARE OUT OF THIS LAND BEING 1 BIGA 10 BISWAS, THE CO ST TO THE APPELLANT FOR BUYING THE ASSIGNMENT RIGHTS WORKS OUT TO RS. 4,73,740/- (I.E RS, 20,05,550 X 30 / 127). FOR THIS COST OF ACQUISITION OF LAND, THE APPELLANT RECEIVED A TOTAL COMPENSATION AMOUNTING TO RS. 39,57,400/-, RS. 12,67,170/- IN FY RELEVANT TO Y 08-09 AND RS. 26,90,230/- FY RELEVANT TO THE CURRENT AY. AS THE ASSIGNMENT RIGHT S WERE OBTAINED BY THE APPELLANT ON 23/09/04, THE ASSET WAS HELD BY THE APPELLANT FOR L ESS THAN 36 MONTHS AS ON 10.08.2007 WHEN THE AMOUNT OF COMPENSATION WAS RECE IVED IN THE AY 08-09. THEREFORE, IN AY 2008-09 THE AMOUNT OF COMPENSATION LESS THE COST OF ACQUISITION ITA NO. 3033/DEL./2013 14 WOULD BE THE SHORT TERM CAPITAL GAIN ASSESSABLE TO TAX IN THAT ASSESSMENT YEAR. THE WHOLE OF THE AMOUNT OF RS.26,90,230/- RECEIVED ON 0 7.10.2008 WILL BE TAXABLE AS LONG TERM CAPITAL GAIN DURING THE CURRENT ASSESSMENT YEA R AS COST OF ACQUISITION HAS ALREADY BEEN ALLOWED TO THE APPELLANT IN AY 2008-09. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. IN VIEW OF THE ABOVE FINDINGS OF THE LD. CIT(A), WE DO NOT FIND ANY INFIRMITY IN THE DECISION REACHED BY HIM ON THIS ISSUE. ACCORDIN GLY, THIS GROUND OF THE REVENUE DESERVES TO BE DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2018. SD/- SD/- (H.S. SIDHU) (L.P . SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH FEBRUARY, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI