AI Insights
The case revolves around an appeal by Shri Jagir Singh against the order of the Ld. CIT(A), Karnal, which sustained the addition of Rs. 50,05,730/- to the assessee's income for the assessment year 2010-11, attributed to unexplained cash deposits in his bank account. The Assessing Officer (AO) had initially found that out of total cash deposits of Rs. 1,02,20,000/-, only Rs. 52,14,270/- could be explained by the assessee. The Tribunal examined the documentation and explanations provided by the assessee, including agreements to sell and sale deeds, and found a direct nexus between the sale transactions and the cash deposits, leading to the conclusion that the source of the deposits was legitimate and explained.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 127576 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 11 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-02-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
22-11-2022
Assessment Year
2010-2011
Appeal Filed On
19-03-2019
Judgement Text
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A ”, CHANDIGARH ीमती दवा संह, या"यक सद#य एवं ी $व%म संह यादव, लेखा सद#य BEFORE: SMT. DIVA SINGH, JM & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 331/Chd/2019 Assessment Year : 2010-11 Shri Jagir Singh S/o Puran Singh H.No. 63, Village Naya Diwana Pehowa, Kurukshetra The Astt. CIT Circle, Kurukshetra PAN NO: CJCPS6220H Appellant Respondent ! " Assessee by : Shri Sudhir Sehgal, Advocate # ! " Revenue by : Smt. Amanpreet Kaur, Sr. DR $ % ! & Date of Hearing : 23/11/2022 '()* ! & Date of Pronouncement : 21/02/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the assessee against the order of the Ld. CIT(A), Karnal dt. 16/01/2019 wherein the assessee has challenged the sustenance of addition of Rs. 50,05,730/- on account of cash deposits in his bank account. 2. Briefly the facts of the case are that the Assessing officer was in receipt of certain information that the assessee had deposited cash amounting to Rs. 1,02,20,000/- during the F.Y. 2009-10 in his bank account. It was also stated by the AO that the assessee has not filed any return of income for the impugned assessment year. Further query letters dt. 17/12/2014, 19/03/2015 and 04/03/2017 were issued to the assessee seeking necessary explanation regarding the cash deposited in his bank account. There was however, no response from the assessee nor was any return of income filed. Subsequently, reasons for income having escaped assessment were recorded after taking approval from the Ld. Pr. CIT, Karnal and notice under section 148 was issued to the assessee. In 2 response, the assessee filed his return of income and thereafter notices under section 143(2) and 142(1) were issued and necessary information was called for and examined by the AO. As per the AO, out of total cash deposit of Rs. 1,02,20,000/-, the assessee could only explain an amount of Rs. 52,14,270/- and balance amount of Rs. 50,05,730/- remained unexplained which was brought to tax in the hands of the assessee, and as against the returned income of Rs. 1,34,013/-, the assessed income was determined at Rs. 51,39,743/- vide order passed under section 147 read with 143(3) dt. 15/12/2017. 3. During the course of assessment proceedings, the assessee was directed to provide the explanation regarding the nature and source of cash deposited in his bank account. In his submission, the assessee submitted that the cash so deposited pertains to proceeds of sale of the property, cash received on account of sale proceeds of the agricultural produce as well as earlier withdrawals made from his bank account. In support of the sale of the property, the assessee submitted copy of the agreement to sell and copy of the sale deed. Further, during the course of assessment proceedings, the AO conducted inquiry from the HDFC Bank and the statement of the buyer, Shri Bohati Devi was also recorded after issuing summons under section 131 of the Act. As per the AO, in her statement, Shri Bohati Devi did not confirm the claim of the assessee nor could provide any details about the transaction. In his submissions, the assessee however stated that there was an agreement to sell and pursuant thereto the assessee has received the sale consideration of Rs 82,65,000/- from sale of the agriculture land, however, the AO did not agree to the explanation and the submission so filed by the assessee and allowed the explanation of the assessee to the extent of Rs. 42,53,000/- being the consideration as so stated in the sale deed and Rs. 5,61,270/- being the proceeds from sale of agriculture produce as per Form J submitted by the assessee and accordingly the explanation of the assessee to the extent of Rs. 3 52,14,270/- was accepted and the remaining deposits were held to be unexplained. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) and it was submitted that the assessee is an illiterate agriculturist and have entered into an agreement to sell 37K, 16M of his agriculture land with Smt. Bohti Devi w/o Sh Raj Kumar R/o Village Dalanpur, Tehsil and Distt Karnal @17,40,000/- per acre and another 8K of agriculture land with Sh Surender Singh S/o Sh Rulda R/o Bhana plot from whom an advance of Rs. 7.00 lacs was received on 11.08.2009. The assessee has received Rs.20,55,400/- in cash on 15.06.2009 from Smt Bohti Devi W/o Sh Raj Kumar and the date of execution of sale deed was fixed for 07.07.2009. The sale deed was got registered on 07.07.2009 and the assessee has received a total of Rs. 82,65,500/- from Smt Bohti Devi W/o Sh. Raj Kumar R/o V. Dalanpur, Tehsil and Distt. Karnal on account of sale of his agriculture land. It was submitted that the assessee has deposited Rs. 81,20,000/- in his HDFC bank account on the same day i.e. on 07.07.2009. Because the assessee has received the entire sale consideration in cash at home and he was not aware about the fact that the land being sold by him was got registered at the collector rate of Rs. 42,53,000/-. The assessee is an illiterate and he has no motive to get the sale deed of land registered at lower price than the market rate because the land sold was an agricultural land not being a capital asset and no capital gain arises on the transfer of this agricultural land within the meaning of IT Act. The assessee filed copy of agreement to sell with Smt. Bohati Devi which clearly shows that the sale consideration comes to Rs. 82,65,500/- and not Rs. 42,53,000/-. The amount was deposited on the same day when the sale deed was got registered. The assessee also requested for summoning of Smt. Bohati Devi. Smt. Bohati Devi was summoned by the AO and her statement was recorded. Smt. Bohati Devi although pretended to be uneducated but was well trained. In reply to a question whether she is known to Sh. Jagir Singh the assessee, she denied that 4 she did not know Sh. Jagir Singh although she has purchased agricultural land from him. To all other questions, she denied of any knowledge on the ground that these were known to her father-in-law who has since expired. She did not deny the agreement but to all other questions, she gave a stereotype reply that it was known to her father-in-law. It was submitted that although her husband was alive but the AO choose not to call him. It was submitted that decision of Hon’ble Allahabad High Court in the case of CIT Vs. Intezar Ali (in Income Tax Appeal No.- 162 of 2013) is fully applicable to the four corners of the case of the assessee. It was submitted that the AO has given the credit of amount mentioned in registered sale deed but has ignored the agreement to sell by which the assessee has received Rs. 82,65,500/- from Smt. Bohti Devi and the other amounts were deposited out of amount withdrawn from the bank on earlier dates, agriculture income and advance received. It was submitted that it is a common practice specially in rural areas in India that the sale deed are registered at collector rate instead of actual rate. It was submitted that the assessee was not having any major income except from agriculture and sale of milk and the amount was deposited on the very same day when the land was sold and got registered. 5. The Ld. CIT(A) however did not accept the explanation so submitted by the assessee and the appeal so filed by the assessee was dismissed. As per the Ld. CIT(A), the assessee was not able to rebut the AO’s findings. It was held that taking shelter under the garb of illiteracy was merely an excuse, given the fact that so called purchaser has denied the said transaction and in such a situation the onus lies on the assessee to prove his claim. The purchaser’s statement was recorded before the authorized representative of the assessee who did not cross examine her but merely stated that the agreement to sell be accepted. Further the assessee has taken the plea that the more money was received than that shown in the registered sale deed as it is the prevalent practice which was 5 found non- acceptable by the Ld. CIT(A) and the addition so made by the AO was confirmed. 6. Against the said findings and the order of the Ld. CIT(A), the assessee is in appeal before us. 7. During the course of hearing, the Ld. AR submitted that the case of the assessee was reopened under section 148 of the Act and at the time of recording the reasons, the AO had no reason to believe that income has escaped assessment. The AO merely relied upon the AIR information without applying his mind and without possessing any other document / information. It was submitted that during the course of reassessment proceedings, it was duly explained before the AO that the major amount of cash deposit is with regard to the amount received from sale of the property. The agreement to sell as executed with Smt. Bohati Devi was duly filed before the AO alongwith copy of the sale deed duly executed between the assessee and Smt. Bohati Devi. It was also explained to the AO that there are cash withdrawals earlier made from the bank accounts and which are re-deposited during the year. However, the reply of the assessee was not considered by the AO and also not properly appreciated by the Ld. CIT(A). Hence the addition has been confirmed in the hands of the assessee. 8. Further our reference was drawn to the statement of cash flow prepared on behalf of the assessee and the contents thereof read as under: Date Dr Cr Balance Source in case of Dr Use in case of Cr 10.04.2009 136580 136580 Agricultural Income (Admitted by AO) 12.04.2009 82808 219388 Agricultural Income (Admitted by AO) 15.04.2009 2055400 2274788 Agreement (Pb-Pg-2) 07.07.2009 6209600 8484388 Agreement (Pb-Pg-2) 07.07.2009 7900000 584388 Deposit in HDFC Bank A/c 6 09.07.2009 200000 384388 Deposit in HDFC Bank A/c 09.07.2009 20000 364388 Deposit in HDFC Bank A/c 20.07.2009 700000 1064388 Withdrawal from HDFC Bank A/c 11.08.2009 700000 1764388 Advance for sale of Plot (Pg-3 PB) 11.08.2009 1500000 264388 Deposit in OBC Bank A/c 12.08.2009 900000 1164388 Withdrawal from OBC Bank A/c 19.08.2009 700000 464388 Refund for Advance of Plot 19.08.2009 100000 364388 Deposit in OBC Bank A/c 05.11.2009 13960 378348 Agricultural Income (Admitted by AO) 06.11.2009 219388 597736 Agricultural Income (Admitted by AO) 06.11.2009 500000 97736 Deposit in HDFC Bank A/c 9. It was submitted that major source of the cash deposit is on account of sale proceeds received from sale of the agriculture land in terms of agreement executed with Smt. Bohati Devi followed by the sale deed executed with her. It was submitted that the cash was deposited on the same date when the sale deed was executed and thus, a clear nexus has been established between the sale of land and receipt of sale consideration. It was submitted that the AO did not accept the agreement to sell which was entered into with Smt. Bohati Devi. The AO also duly recorded the statement of Smt. Bohati Devi wherein she did not deny the execution of the sale deed. In this regard, our reference was drawn to the copy of the agreement to sell with Smt. Bohati Devi, copy of the statement of the Smt. Bohati Devi as recorded by the AO and the copy of the sale deed executed with her and it was submitted that from the perusal of the 7 statement as recorded by the AO, it is very much clear that Smt. Bohati Devi has never denied the transaction with assessee. It was submitted that in her statement, she has clearly stated that transaction has been entered into with the assessee through her Father in Law who has since expired. It was submitted that the agreement to sell was duly carrying the signature of the assessee, thumb print of Smt. Bohati Devi and also the thumb print of two witnesses. Further it is also a matter of record that she has never denied that the thumb impression on the sale agreement do not belong to her. It was accordingly submitted that the AO was not correct in stating that Smt. Bohati Devi did not confirm the claim of the assessee. She has duly agreed that she has entered into a transaction of the property through her Father in Law and the AO could have made further enquiry by calling her husband Shri Raj Kumar who was physically present at the time of execution of final sale deed but he choose not to call him for reasons best known to him. In support, reliance was placed on the Jaipur Benches decision in case of Shri Pappu Ram Saran vs. ITO (in ITA No. 1303/JP/2018 dated 03/09/2020) besides various other decisions. 10. It was further submitted that other sources of cash deposits were the advance received against sale of another land amounting to Rs. 7 lacs which was also refunded back to the buyer during the year, agriculture income and cash withdrawal from the bank account. It was submitted that the AO has not accept the withdrawal from the HDFC Bank by stating that the said withdrawal are not cash withdrawals and only an FDR was made by the Bank. In this regard our reference was drawn to the copy of the bank statement of HDFC Bank and it was submitted that on perusal of the said statement, it is clear that the assessee has withdrawn cash amounting to Rs. 7,00,000/- from HDFC Bank account on 20/07/2009. It was submitted that the assessee has never stated that he has withdrawn Rs. 15 lacs cash on 20/07/2009 and the said entry is towards FDR is even admitted by the assessee. However, there is a separate entry of cash withdrawal of Rs. 7,00,000/- on the same date i.e, 20/07/2009 which was 8 totally ignored by the AO. It was further submitted that the assessee filed a copy of affidavit from Shri Surender Singh with whom agreement to sell a plot for a total consideration of Rs. 19,00,000/- was entered into by the assessee. The assessee has received an amount of Rs. 7,00,000/- on 11/08/2009 but the deal did not materialize and the said amount was refunded back on 19/08/2009 itself. It was submitted that the AO has rejected the said explanation without stating as to why he does not agree to the explanation so submitted by the assessee. It was further submitted that the AO has also not given any benefit for the amount withdrawn in cash from the OBC Bank amounting to Rs. 9,00,000/- on 12/08/2009. 11. It was accordingly submitted that the cash deposit made in the bank account was duly explained during the course of assessment proceeding which was not appreciated in correct perspective and the addition has been made by the AO and confirmed by the Ld. CIT(A). It was accordingly submitted that the addition so made be directed to be deleted and necessary relief be provided to the assessee. 12. Per contra, the Ld. DR has relied on the order of the lower authorities. 13. We have heard the rival contentions and purused the material available on record. It is noted that on the basis of information that there were cash deposits in the bank account of the assessee, the case of the assessee was reopened to examine the nature and source of such deposits amounting to Rs 1,02,20,000/-. The assessee has submitted that the major source of the cash deposits was on account of proceeds received from sale of the agriculture land. Besides, other sources of cash deposits were explained in terms of amount received by way of advance against sale of another piece of agriculture land, income from agriculture operations and earlier cash withdrawals which were re- deposited during the year. As per the AO, out of total cash deposits of Rs. 1,02,20,000/-, the assessee could only explain an amount of Rs. 52,14,270/- 9 and balance amount of Rs. 50,05,730/- remained unexplained which was brought to tax in the hands of the assessee. The AO has accepted the explanation regarding receipts from agriculture operations, partially accepted the explanation regarding nature and source of receipts in cash being the sale proceeds from the sale of the agriculture land to the extent of sale consideration as per registered sale deed and not as per agreement to sell, and the remaining explanation regarding other sources of deposits was not accepted at all. 14. Firstly, regarding receipts from sale of agricultural land, the assessee has explained that he has received a sum of Rs 82,65,000/- from Smt Bhopati Devi and which has been deposited in his bank account. In order to support his explanation, he has submitted a copy of agreement to sell dated 15/04/2009, copy of registered sale deed dated 07/07/2009 and copy of the bank account maintained with HDFC bank where the sale proceeds were deposited. It was further submitted that he had received a sum of Rs 20,55,,400/- at the time of signing of the agreement to sell and balance amount of Rs 62,09,600/- at time when sale deed was registered and almost whole of the amount was immediately deposited in his bank account on date of signing of sale deed. In order to examine the aforesaid explanation and documentation so submitted by the assessee, the AO issued summons to Smt Bhopati Devi and her statement was recorded u/s 131 of the Act. Basis the statement so recorded, the AO recorded a finding that since Smt Bhopati Devi didn’t confirm the claim of the assessee nor could provide any details about the transaction, sale consideration to the extent of Rs 42,53,000/- as per registered sale deed as against Rs 82,65,000/- as agreement to sell can only be accepted and to that extent deposits in the bank account stood explained. The said findings of the AO have since been confirmed by ld CIT(Appeal). 10 15. We have gone through the copy of the agreement to sell dated 15/04/2009 wherein the description of agriculture land owned by the assessee, sale consideration and the date when the sale deed shall be subsequently registered has been stated and it is duly signed by the assessee and there is thumb impression of Smt Bhopati Devi along with signatures of two witnesses. The sale consideration has been arrived at the rate of Rs 17,40,0000/- per acre and given total area being sold, the total sale consideration amounts to Rs 82,65,000/-. 16. The sale deed was subsequently executed between the assessee and Smt Bhopati Devi which is signed by the assessee whereas Smt Bhopati Devi has put her thumb impression and there are again signatures of two witnesses. The sale deed was registered on 07/07/2009 as so stated in the agreement to sell and other contents thereof are also as per initial agreement to sell except for the value of sale consideration which is stated at Rs 42,53,000/-. Here it is relevant to note that stamp duty has been determined on the basis of same consideration as so stated in the sale deed and therefore, the consideration so stated in the sale deed is as per prescribed circle rate at the relevant point in time. 17. Given the aforesaid documentation so submitted by the assessee wherein the contents of both the documents matches except for the quantum of sale consideration, the AO in order to examine the matter further, called for personal appearance of the buyer. On assessee showing his inability to get the buyer appear before the AO, the summons were issued u/s 131 and statement of buyer Smt Bhopati Devi was recorded. 18. On perusal of statement of Smt Bhopati Devi so recorded u/s 131, we find that Smt Bhopati Devi has stated in response to question no. 4 that she is aware that the sale transaction for sale of agriculture land has been entered into in her 11 name with Jagir Singh and in response to further question no 5 and 6, she has stated that she is not aware of exact amount of sale consideration as the sale transaction was undertaken by her father-in-law on her behalf. Therefore, what emerges from her statement is that she was very much aware of sale transaction having being undertaken on her behalf with Jagir Singh however the value at which the transaction was executed and total sale consideration was not in her knowledge as the whole transaction was undertaken by her father-in-law. Given the fact that Smt Bhopati Devi’s father-in-law had expired, even no further examination of any other person including the husband of Smt Bhopati Devi or any other witnesses was carried by the Assessing officer. We therefore find that the statement so recorded of Smt Bhopati Devi doesn’t support and advance the case of the Revenue which we find is the sole basis of discrediting the explanation so submitted by the assessee. 19. Further, on perusal of the bank statement of assessee’s account maintained with HDFC bank, out of Rs. 82,65,000/-, a sum of Rs. 79,00,000/- was deposited on 07.07.2009 and Rs 2,00,000/- was deposited on 09.07.2009 which lends credence to assessee’s contention that there was direct nexus between receipt of sale consideration and deposits thereof in bank on the same date when the sale deed was registered. We find that a similar matter came up for consideration before the Coordinate Jaipur Benches in case of Shri Pappu Ram Saran vs ITO (supra) wherein it was held that where the cash was deposited on the very next day of entering into the sale deed, a direct nexus has been prima facie established between source of cash deposit and sale transaction and in absence of any contrary material brought on record, the explanation of the assessee regarding source of deposit cannot be disputed and the relevant findings read as under: “6. We have considered the rival submissions as well as relevant material on record. The AO has made addition on account of cash deposit of Rs. 27,50,000/- in the bank account of the assessee on 09.04.2009. Since the assessee has not 12 appeared before the AO nor made compliance to the various notices issued by the Assessing Officer, therefore, the assessment was completed ex-parte U/s 144 r.w.s. 147 of the Act. Before the ld. CIT(A) the assessee produced sale deed as well as bank account and also detailed submissions in respect of the source of cash deposit made in the bank account. The ld. C(IT(A) called for remand report wherein the AO has pointed out that the sale deed dated 08.04.2009 shows the sale consideration of Rs. 6,45,000/-. The ld. CIT(A) has consequently allowed the claim of the assessee only to the extent of Rs. 6,45,000/- as stated in the sale deed. The Bench has raised a query about the discrepancy in the name mentioned in the sale deed and the name of the assessee appearing in other records. The ld. AR has pointed out that the assessee Shri Pappu Ram is also known as @ Prabhu Ram. Thus, in the sale deed of the name of the assessee appearing as Shri Prabhu Ram. After verification of the record we are satisfied that the name appearing in the sale deed alias name of the assessee. The AO has also not disputed the fact that the assessee is one of the joint owners of the land which was sold vide sale deed 08.04.2009. We further note that the cash of Rs. 27,50,000/- was deposited in the bank account of the assessee with Oriental Bank of Commerce, Kishangarh on 09.04.2009. The date of cash deposit is subsequent to the date of sale deed dated 08.04.2009 which prima facie shows that the source of cash deposit has a direct nexus with the sale transaction of the land sold by the assessee jointly with other coowners vide sale deed dated 08.04.2009. Though the sale deed shows the sale consideration of Rs. 6,45,000/- which is also the Stamp Duty Valuation however, once the assessee has brought on record the relevant facts as well as nexus between transaction of sale and deposit in bank account then only inference can be drawn from these facts and circumstances of the case is that the source of deposit of Rs. 27,50,000/- is the sale consideration of the land. The Assessing Officer has not brought anything contrary on the record during the remand proceedings such as examination of the purchaser. Therefore, in the absence of any contrary material the explanation of the assessee regarding source of cash deposit in the bank account cannot be disputed. This Tribunal in case of M/s OM Plantation vs. ITO (supra) has considered an identical issue in para 6 as under:- “6. We have considered the rival submissions as well as the relevant material on record. The assessee purchased the land situated at Bhankrota, Jaipur vide two sale deeds both dated 11/8/2005 for a total consideration mentioned in the sale deeds at Rs. 1,76,34,000/-. However, the Assessing Officer received the report of the DDIT(Inv) alongwith the details of the cash deposits in the bank accounts of the sellers and their relatives and further an agreement to sell dated 11/5/2005 wherein the consideration @ Rs. 28,25,000/- per bigha was agreed upon between the parties and part consideration was stated to have been paid at the time of agreement in cash as well as in cheque. The Assessing Officer has computed the total purchase consideration by adopting the rate of Rs. 28,25,000/- per bigha as stated in the agreement to sell dated 11/5/2005. Though the said agreement is not signed by both the parties and it was signed only by the seller, however, we find that the details given in the agreement regarding the agricultural lands, its khasaras numbers as well as the part consideration of Rs. 15,50,000/- through a cheque No. 582863/- dated 10/6/2005 is not in dispute. The details of the said cheque also find place in the registered sale deed dated 11/8/2005. Thus, the contents of the agreement to the extent of part payment of consideration has been 13 established by the sale deed dated 11/8/2005. Therefore, even if the said agreement is not enforceable in law due to the non-bearing of the signature of the assessee and further due to non-registration, the contents of the said agreement which has been proved and corroborated by the sale deed go to establish the existence of the agreement between the parties. Further the details of the cash deposited in the bank account of the sellers and their relatives has been reproduced by the Assessing Officer in the assessment proceedings at page No. 4 and 5 of the assessment order as under: S.No . Name of person Bank account No. Deposited cash amount Date Relation with the seller 1. Smt. Dhapu Devi Meena 210501000 32,74,000/- 12/08/2005 Seller of land 2. Sh. Dulharam Meena 1007813 1,50,000/- 10,00,000/- 1,60,000/- 14/05/2005 12/08/2005 16/08/2005 Do 3. Sh. Ballu Ram Meena 1007108 4,00,000/- 11,70,666/- 14/05/2005 12/08/2005 Do 4. Sh. Harphool Meena 1004534 11,70,667/- 12/08/2005 Do 5. Sh. Satendra Basanwal 1007978 14,00,000/- 12/08/2005 Son of Sh. Bagwataram Seller 6. Sh. Rajendra Kumar Meena 1003946 1,50,000/- 14,00,000/- 12/05/2005 12/08/2005 Do 7. Sh. Om Prakash Meena 1004337 1,50,000/- 14,00,000/- 12/05/2005 12/08/2005 Do 8. Sh. Ashok Kumar Meena 1001168 14,00,000/- 12/08/2005 Do 9. Sh. Rosha/ La/ Meena 1006877 1,50,000/- 14,00,000/- 12/05/2005 12/08/2005 Grandson of Sh Bagwataram, Seller 10. Sh. Jagdish Pd. Meena 100131 7,50,000/- 12/08/2005 Son of Smt. Dhapu Devi Meena, Seller 11. Sh. Manna Lai Meena 1008064 7,15,800/- 12/08/2005 Son of Smt. Dhapu Devi Meena, Seller 12. Sh. Nemi Chand Meena 1005293 7,50,000/- 12/08/2005 Son of Smt. Dhapu Devi Meena, Seller 13. Smt. Sushila Meena W/o Prabhu Dayal Meena 210501000 07726 7,50,000/- 12/08/2005 W/o- Sh. Prabhu Dayal Meena, S/o- Smt. Dhapu Devi Meena, Seller The dates of deposit of cash as well as cheques in the bank accounts of the sellers, their sons, grandsons and wife are clearly matching to the dates of agreement to sell and sale deed i.e. 11/5/2005 and 11/8/2005. All the deposits of cash in the bank accounts of these persons were made on the very next day of execution of agreement and sale deed respectively. In absence of any other source of income of the sellers, the only inference which can be drawn from the details of the bank accounts and particularly the deposits made on the particular dates which is just one day after the execution of the agreement to sell and sale deeds that the cash deposits in the bank accounts of the sellers and their relatives is only 14 from the sale consideration received against the sale of agricultural lands in question. There is no other transaction either on those dates or in around those dates of deposits in the bank accounts other than the present transaction of sale of lands by the sellers. Further the Assessing Officer has reproduced the statements of the branch manager wherein the amounts were deposited as well as the relatives of the sellers who have confirmed the receipt of cash and deposit of the same in the bank account. Thus, we find that the assessment framed by the Assessing Officer is not solely based on the statements recorded by the Investigation Wing but there was tangible material in the shape of the bank accounts statements, agreement to sell and sale deeds which are of course not in dispute. The only dispute raised by the assessee is regarding the photo copy of the agreement and its evidentiary value, however, it is not the issue of legal enforceability of the said agreement and the claim under the agreement but the contents of the agreement which are to the extent corroborated by the independent evidence being sale deeds and further the bank statements of the sellers cannot be denied on the technical ground of admissibility. Therefore, once the payment of cash is reflected from all these documents as well as statements of the parties then the technical objection raised by the assessee will not help the case of the assessee.” In view of the facts and circumstances of the case when the deposit of cash in the bank account is contemporaneous to the transaction of sale of land then in the absence of any contrary material the source explained by the assessee cannot be rejected. Hence, the addition sustained by the Ld. CIT(A) is deleted.” 20. In the instant case, we find that there was deposit of cash of Rs 79,00,000/- on 07/07/2009 the very same day on which the sale deed was executed and Rs 2,00,000/- was deposited on the next day, therefore a clear nexus has been established between source of such cash deposit and sale transaction so executed by the assessee. In absence of any contrary evidence brought on record in terms of statement of witnesses and comparative sale data of similar transaction undertaken at same/nearby location at a value different from what has been claimed by the assessee, the explanation so furnished by the assessee cannot be disputed. We are conscious of the fact that though the sale deed shows lower sale consideration of Rs 42,53,000/- which is also the Stamp Duty Valuation however, once the assessee has brought on record the relevant facts and documentation as well as nexus between transaction of sale and deposit in bank account has been established then in absence of any contrary evidence brought on record, only inference which can be drawn from these facts and 15 circumstances of the case is that the source of deposit of Rs. 82,50,000/- is the sale consideration of the agriculture land. 21. Further, it is noted that no finding has been recorded by the AO as to why the explanation of the assessee regarding other sources of deposits being the advance received against sale of another piece of agriculture land was not found acceptable. From the impugned order of the ld CIT(A) as well, we don’t find any specific finding recorded by the ld CIT(A) rejecting the explanation so furnished by the assessee. During the course of hearing, the ld AR has taken us through the bank statements of the assessee and affidavit of Shri Surender Singh with whom agreement to sell a plot of land for a total consideration of Rs. 19,00,000/- was entered into by the assessee and it was submitted that the assessee has received an amount of Rs. 7,00,000/- on 11/08/2009 but since the deal did not materialize, the said amount was refunded back on 19/08/2009 itself. In absence of any contrary evidence brought on record by the Revenue, the explanation of the assessee duly corroborated by the affidavit from the buyer and the bank statements reflecting the receipts and refund of Rs 7,00,000/- is found acceptable and the source of such deposits thus stand explained and no adverse view is warranted in this regard. 22. Regarding explanation of the assessee that there were cash withdrawals earlier made from the bank accounts and which were re-deposited during the year, we have gone through the assessee’s bank statements and the cash flow statement and find that there were withdrawals and deposits during the year in the two bank accounts maintained by the assessee and the deposits so made duly stand explained by the earlier withdrawals during the year and no adverse view is warranted in this regard. 23. In light of aforesaid discussions and in the entirety of facts and circumstances of the case, we find that the assessee has duly explained the nature and source of cash deposits during the year and the initial onus on the 16 assessee duly stand discharged. In absence of any contrary evidence brought on record by the Revenue, we don’t see any justifiable basis in sustaining the addition so made by the AO and the same is directed to be deleted. 24. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 21/02/2023 Sd/- Sd/- दवा संह $व%म संह यादव (DIVA SINGH) ( VIKRAM SINGH YADAV) या"यक सद#य / JUDICIAL MEMBER लेखा सद#य/ ACCOUNTANT MEMBER AG Date: 21/02/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar
Other Referred Cases
CIT Vs. Intezar Ali, Shri Pappu Ram Saran vs. ITO
Laws Referred To
Income Tax Act
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